UNITEDTable STATESof SECURITIES AND EXCHANGE COMMISSION Contents

~~Washington, D.C.~~UNITED ~~20549~~STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549 ~~Form 10-K~~

(Mark One)
þ		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the fiscal year ended October 31, 2005.
OR
o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the transition period from to .

Form 10-K

~~Commission~~(Mark ~~File No. 0-1424~~One)

~~ADC~~þ ~~Telecommunications,~~ANNUAL ~~Inc.~~ REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

~~(Exact~~For ~~name~~the offiscal ~~registrant~~year asended ~~specified~~September 30, ~~in its charter)~~ 2010.

Minnesota		41-0743912
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
13625 Technology Drive Eden Prairie, Minnesota (Address of principal executive offices)		55344-2252 (Zip Code)

~~Registrant’s~~o ~~telephone~~TRANSITION ~~number,~~REPORT ~~including~~PURSUANT ~~area~~TO ~~code:~~ SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

~~(952) 938-8080~~ For the transition period from _______ to _______.

~~Securities~~Commission ~~registered~~File ~~pursuant to Section~~No. ~~12(b) of the~~0-1424 ~~Act:~~

ADC Telecommunications, Inc. ~~None~~

~~Securities~~(Exact ~~registered~~name ~~pursuant~~of toregistrant ~~Section 12(g)~~as ofspecified ~~the~~in its charter) ~~Act:~~

Common Stock, $.20 par value


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

13625 Technology Drive
Eden Prairie, Minnesota		55344-2252
(Address of principal executive offices)		(Zip Code)

~~Preferred~~Registrant’s ~~Stock~~telephone ~~Purchase~~number, ~~Rights~~including area code: (952) 938-8080

~~Indicate~~Securities byregistered ~~checkmark~~pursuant ifto ~~the registrant is a well-known seasoned issuer, as defined in Rule~~Section ~~405~~12(b) of the ~~Securities~~ Act~~. þ Yes o No~~ :

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. o Yes þ No


Title of Each Class		Name of Each Exchange on Which Registered:

Common Stock, $.20 par value		The NASDAQ Stock Market LLC
Preferred Stock Purchase Rights

~~Indicate~~Securities byregistered ~~check~~pursuant ~~mark whether the registrant (1) has filed all reports required~~ to ~~be filed by~~ Section ~~13 or 15~~12(dg) of ~~the~~ ~~Securities Exchange Act of 1934 during~~ the ~~preceding~~Act: 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. þ Yes o No None

Indicate by ~~check~~checkmark ~~mark~~ if ~~disclosure~~the ofregistrant ~~delinquent~~is ~~filers pursuant~~a ~~to Item 405 of Regulation S~~well-Kknown ~~is not~~seasoned ~~contained herein~~issuer, ~~and~~as ~~will~~defined ~~not be contained, to the best of registrant’s knowledge,~~ in ~~definitive proxy or information~~Rule ~~statements~~405 ~~incorporated~~of bythe ~~reference~~Securities inAct. ~~Part III~~þ ofYes ~~this Form 10-K~~o ~~or any~~No ~~amendment to this Form 10-K. þ~~

Indicate by check mark ~~whether~~if the registrant is anot ~~large accelerated~~required ~~filer,~~to anfile ~~accelerated~~reports ~~filer,~~pursuant orto ~~a non-accelerated~~Section ~~filer.~~13 ~~See~~or ~~definition~~Section of15(d) ~~“accelerated filer and large accelerated filer” in Rule 12b-2~~ of the ~~Exchange~~ Act. ~~(Check~~o ~~one):~~Yes þ No

~~Large~~ Indicate ~~accelerated~~by ~~filer~~check þmark ~~Accelerated~~whether ~~filer~~the oregistrant ~~Non-accelerated~~(1) has ~~filer~~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. þ Yes o No

Indicate by check mark whether the registrant ishas asubmitted ~~shell~~electronically ~~company~~and ~~(as~~posted on its ~~defined~~corporate inWeb Site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule ~~12b-2~~405 of Regulation S-T during the preceding 12 months (or such shorter period that ~~Exchange Act~~the registrant was required to submit and post such files). o Yes þ o No

~~The~~Indicate ~~aggregate~~by ~~market~~check ~~value~~mark if disclosure of ~~voting~~delinquent ~~and~~filers ~~non-voting~~pursuant ~~stock~~to ~~held by~~Item 405 ~~non~~of Regulation S-~~affiliates~~K ofis ~~the~~not ~~registrant~~contained ~~based~~herein, onand will not be contained, to the ~~last~~best ~~sale~~of ~~price~~registrant’s knowledge, in ofdefinitive ~~such~~proxy ~~stock~~or asinformation ~~reported~~statements incorporated by ~~The~~reference ~~NASDAQ~~in ~~Stock~~Part III of this Form 10-K ~~Market® on~~or ~~April 29,~~any ~~2005,~~amendment ~~was~~to ~~$1,672,086,540~~this Form 10-K.~~00.~~ þ

~~The~~Indicate ~~number~~by ofcheck ~~shares~~mark ~~outstanding~~whether of the registrant’s ~~common~~is a large accelerated filer, an accelerated ~~stock~~filer, ~~$0.20 par~~a ~~value~~non-accelerated filer, asor a smaller reporting company. See the definitions of ~~January 11,~~“large accelerated ~~2006~~filer,” ~~was~~“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the ~~116,801,210~~Exchange Act. (Check one):

~~DOCUMENTS~~Large ~~INCORPORATED~~accelerated BYfiler ~~REFERENCE~~ þ Accelerated filer o Non-accelerated filer o(Do not check if a smaller reporting company) Smaller reporting company o

AIndicate ~~portion~~by ofcheck ~~the~~mark ~~information~~whether ~~required~~the byregistrant ~~Part III of this Form 10-K~~ is ~~incorporated~~ bya ~~reference~~shell ~~from~~company ~~portions~~(as ofdefined ~~our~~in ~~definitive~~Rule 12b-2 ~~proxy~~of ~~statement~~the ~~for~~Exchange ~~our~~Act). ~~2006~~o ~~Annual~~Yes ~~Meeting~~þ ~~of Shareowners to be filed~~No ~~with the Securities and Exchange Commission.~~

The aggregate market value of voting and non-voting stock held by non-affiliates of the ~~PART~~registrant based on the last sale price of such stock as reported by The NASDAQ Global Select Market® on April I2, 2010, was $707,383,971.

~~Item~~ The 1number of shares outstanding of the registrant’s common stock, $0.20 ~~BUSINESS~~par value, as of November 19, 2010, was 97,155,925.

~~ADC~~DOCUMENTS ~~Telecommunications,~~INCORPORATED ~~Inc.~~BY ~~(“we”, “us” or~~REFERENCE “ADC”) was incorporated in Minnesota in 1953 as Magnetic Controls Company. We adopted our current name in 1985. Our World Headquarters is located at 13625 Technology Drive in Eden Prairie, Minnesota.

None We are a leading global provider of communications network infrastructure solutions and services. Our products and services provide connections for communications networks over copper, fiber, coaxial and wireless media and enable the use of high-speed Internet, data, video and voice services by residences, businesses and mobile communications subscribers. Our products include fiber optic, copper and coaxial based frames, cabinets, cables, connectors, cards and other physical components essential to enable the delivery of communications for wireline, wireless, cable, and broadcast networks by service providers and enterprises. Our products also include network access devices such as high-bit-rate digital subscriber line and wireless coverage solutions. Our products are primarily used in the “last mile/kilometer” portion of networks. This network of copper, coaxial cable, fiber lines, wireless facilities and related equipment link voice, video and data traffic from the end-user of the communications service to the serving office of our customer. In addition, we provide professional services relating to the design, equipping and building of networks. The provision of such services also allows us additional opportunities to sell our hardware products, thereby complementing our hardware business.

~~Our~~TABLE ~~customers~~OF ~~include local and long-distance telephone~~CONTENTS companies, private enterprises that operate their own networks, cable television operators, wireless service providers, new competitive service providers, broadcasters, governments, system integrators and communications equipment manufacturers and distributors. We offer broadband connectivity systems, enterprise systems, wireless transport and coverage optimization systems, business access systems and professional services to our customers through the following two reportable business segments:

• Broadband Infrastructure and Access; and • Professional Services (previously known as Integrated Solutions).


PART I		3
Item 1. BUSINESS		3
Item 1A. RISK FACTORS		12
Item 1B. UNRESOLVED STAFF COMMENTS		23
Item 2. PROPERTIES		23
Item 3. LEGAL PROCEEDINGS		24
Item 4. (REMOVED AND RESERVED)		25
PART II		25
Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES		25
Item 6. SELECTED FINANCIAL DATA		26
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		26
Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		43
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA		45
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE		83
Item 9A. CONTROLS AND PROCEDURES		83
Item 9B. OTHER INFORMATION		84
PART III		84
Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE		84
Item 11. EXECUTIVE COMPENSATION		86
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS		114
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE		116
Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES		118
PART IV		119
Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES		119
SIGNATURES		120
EXHIBIT INDEX		122
EX-10.8
EX-10.9
EX-12.1
EX-21.1
EX-23.1
EX-24.1
EX-31.1
EX-31.2
EX-32

2 ~~Our Broadband Infrastructure and Access business provides network infrastructure products for wireline, wireless, cable, broadcast and enterprise network applications. These products consist of:~~

•Table connectivity systems and components that provide the infrastructure to networks to connect Internet, data, video and voice services over copper, coaxial and fiber-optic cables; and • access systems used in the last mile/kilometer of wireline and wireless networks to deliver high-speed Internet, data and voice services.Contents

~~Our~~Introductory ~~Professional Services business provides integration~~Note services for broadband, multiservice communications over wireline, wireless, cable and enterprise networks. Professional services are used to plan, deploy and maintain communications networks that deliver Internet, data, video and voice services.

~~Our~~On ~~corporate~~July 12, ~~website~~2010, ~~address~~we isentered ~~www.adc.com.~~into Inan ~~the “Financial~~Agreement ~~Information”~~and ~~category~~Plan of ~~the~~Merger ~~Investor Relations~~with ~~section~~Tyco ofElectronics ~~our website~~Ltd., a weSwiss ~~make~~company, ~~our~~and ~~annual~~its ~~reports~~indirect ~~on Form 10-K~~subsidiary, ~~quarterly~~ ~~reports~~Tyco ~~on Form 10-Q~~Electronics Minnesota, ~~current reports~~Inc. ~~on Form 8-K~~(each ~~and~~such company ~~amendments~~individually toas ~~these~~well ~~reports~~as ~~available~~collectively, ~~free~~“Tyco ofElectronics”), ~~charge~~which aswas ~~soon~~amended as ~~reasonably~~ ~~practicable~~of ~~after~~July 24, ~~such~~2010. Pursuant ~~reports~~to ~~are~~that ~~filed~~merger ~~with~~agreement, ~~or furnished~~on toJuly 26, ~~the~~2010, ~~United~~Tyco ~~States~~Electronics ~~Securities~~commenced ~~and~~a ~~Exchange Commission~~tender ~~(the~~offer ~~“SEC”). The “Corporate~~to ~~Governance”~~purchase ~~category~~all of ~~the~~our ~~Investor~~outstanding ~~Relations~~shares ~~section~~ of ~~our~~ ~~website~~common ~~also~~stock ~~contains~~at ~~copies~~a purchase price of ~~our~~$12.75 ~~Financial~~per ~~Code~~share ofin ~~Ethics,~~cash. ~~our~~The ~~Principles~~closing of ~~Corporate~~the ~~Governance,~~transaction ~~our~~has ~~Global Business~~not ~~Conduct~~yet ~~Program~~taken place, ~~our~~although ~~Articles~~we ofpresently ~~Incorporation~~expect ~~and~~it will ~~Bylaws~~occur ~~and~~during the ~~charter~~current ofcalendar ~~each committee of our Board of Directors~~quarter. ~~Each~~For ofmore ~~these~~information ~~documents~~on ~~can~~the ~~also~~transactions ~~be obtained free of~~contemplated ~~charge~~by ~~(except~~the ~~for~~merger aagreement, ~~reasonable~~please ~~charge~~refer ~~for duplicating exhibits~~ to ~~our~~ADC’s ~~reports on Forms~~Schedule 1014D-~~K, 10-Q or 8-K)~~9 infiled ~~print by~~with ~~any~~the ~~shareowner~~United ~~who~~States Securities ~~requests~~and ~~them~~Exchange ~~from~~Commission ~~our~~(the ~~Investor~~“SEC”) ~~Relations department.~~on ~~The~~July 26, ~~Investor~~2010, ~~Relations~~as ~~department’s~~well ~~email address~~as isthe ~~investor@adc.com~~various ~~and~~amendments to ~~its~~Schedule 14D-9, ~~mail~~which ~~address~~are ~~is:~~available ~~Investor Relations,~~online ~~ADC~~at ~~Telecommunications,~~www.sec.gov.

1PART I

~~Inc., P.O. Box~~Item ~~1101, Minneapolis, Minnesota 55440-1101~~1. ~~Information~~ ~~on our website is not incorporated by reference into~~BUSINESS ~~this Form 10-K.~~

General ~~As used in this report, fiscal 2003, fiscal 2004, fiscal 2005 and fiscal 2006 refer to our fiscal years ended or ending October 31, 2003, 2004, 2005 and 2006, respectively.~~

ADC Telecommunications, Inc. (“ADC,” “we,” “us” or “our”) was incorporated in Minnesota in ~~Industry~~1953 ~~Background~~as Magnetic Controls Company. We adopted our current name in 1985. Our World Headquarters are located at 13625 Technology Drive in Eden Prairie, Minnesota. Our telephone number is (952) 938-8080.

~~Our~~We ~~products and services~~ are ~~deployed~~a ~~primarily~~leading ~~by communications~~global ~~service~~provider ~~providers and the owners/operators~~ of ~~private~~ ~~enterprise~~broadband ~~networks.~~communications ~~The~~network ~~competition~~infrastructure ~~to attract and~~products ~~retain~~and ~~customers~~related ~~in our industry is intense~~services. ~~Further,~~Our ~~the~~products ~~market for~~offer ~~communications~~comprehensive ~~services~~solutions ~~being~~that ~~demanded~~enable bythe ~~end-users~~delivery isof ~~undergoing~~high-speed anInternet, ~~evolution~~data, invideo ~~which~~and ~~customers~~voice ~~expect to receive a variety of broadband~~ communications ~~services~~ over ~~a single network at lower~~wireline, ~~often flat-rate~~wireless, ~~prices. In this environment~~cable, weenterprise ~~believe~~and ~~those~~broadcast ~~equipment~~networks. ~~providers~~These ~~who provide~~ products ~~and services~~include ~~that~~fiber-optic, ~~permit~~copper ~~network operators~~ and ~~communications~~coaxial based ~~service~~frames, ~~providers~~cabinets, tocables, ~~operate~~connectors ~~more efficiently~~ and ~~at a lower cost~~cards, ~~while~~wireless ~~meeting~~capacity ~~the~~and ~~changing~~coverage ~~demands of end-users~~solutions, ~~will be~~network inaccess ~~the~~devices ~~best~~and ~~position~~other tophysical ~~win~~infrastructure ~~market share and grow their businesses~~components.

~~The~~Our ~~competition~~products inand ~~our~~services ~~industry~~are ~~has~~deployed ~~been~~primarily ~~extremely~~by ~~intense following the downturn in the~~ communications ~~industry~~service ~~that occurred~~providers ~~generally during calendar years 2001 through 2003. In~~and ~~connection~~owners ~~with~~and ~~the~~operators ~~downturn, many~~ of ~~our~~private ~~customers~~enterprise ~~reduced their equipment purchases and deferred capital spending from previous levels~~networks. Our ~~customers~~products are ~~dependent~~used onmainly in the ~~level~~“edge” of ~~end-user~~communications ~~demand~~networks ~~for~~where Internet, data, video and voice ~~services, and~~traffic ~~they~~ are ~~likely~~linked tofrom ~~defer~~the ~~significant network expansions when~~serving ~~they~~office ~~do not believe there is significant demand for these services. In addition, some~~ of ~~our~~a ~~customers~~communications ~~experienced~~service ~~serious financial~~provider ~~difficulties, including bankruptcy filings or cessation of operations. These factors, among others, led~~ to the ~~existing~~ ~~fierce~~end-user ~~competition among vendors~~ of ~~communications equipment~~communication ~~and related~~ services. toOur ~~protect their market shares and placed significant pressure on the prices at which companies such as ours are able to sell their~~ products ~~and services.~~ include:

~~Coupled~~• ~~with~~Connectivity ~~this~~solutions ~~intense~~that ~~competition,~~provide the ~~market~~physical ~~for communications~~interconnections ~~services~~between ~~being~~network ~~demanded~~components ~~by end~~and network access points. These products connect wireline, wireless, cable, enterprise and broadcast communication networks over fiber-~~users~~optic, ~~continues~~copper ~~to evolve~~(twisted pair), coaxial, and wireless media. ~~Specifically~~• Wireless solutions that help improve coverage and capacity for wireless networks. These products improve signal quality, weincrease ~~believe~~coverage ~~there~~and ~~are~~capacity ~~two~~into ~~key~~expanded ~~elements~~geographic areas, increase the speed and expand the delivery and capacity of networks, and help reduce the capital and operating costs of delivering wireless services. Applications for these products include in ~~this~~-building ~~evolution:~~ solutions, outdoor coverage solutions and mobile network solutions.

• We ~~First,~~also ~~businesses~~provide ~~and~~professional ~~consumers~~services ~~worldwide are becoming increasingly dependent on broadband, multiservice communications networks~~ to ~~conduct~~our ~~daily communications tasks~~customers. ~~People~~These and businesses increasingly are accessing the Internet and using Web-based software applications through broadband connections. The growing popularity of applications such as digital video and audio programs, podcasting, wireless data and video services, ~~video~~help ~~conferencing~~our ~~from personal computers~~customers plan, ~~video~~deploy ~~e-mail, video on demand, interactive entertainment~~ and ~~gaming~~maintain ~~via the~~ Internet, ~~distance learning~~data, ~~telemedicine~~video and ~~high-speed~~voice ~~imaging~~communication ~~is further increasing the need for broadband network infrastructure; • Second, end-users of communications services increasingly expect to do business with service providers or develop their own~~ networks. ~~that~~We ~~can~~also ~~provide~~assist our ~~all~~customers ofin ~~their~~integrating ~~communications~~broadband ~~needs over a single network connection at a low price. Both public networks operated by~~ communications ~~service~~equipment ~~providers~~used ~~and~~in ~~private enterprise networks are evolving to provide combinations of Internet~~wireline, ~~data~~wireless, ~~video~~ cable and ~~voice~~enterprise ~~services that can be offered over the same high-speed network connection as opposed to each service being conducted over a separate connection~~networks. WeBy ~~believe~~providing ~~the competition among service providers to retain new customers over~~ these ~~more fully integrated networks is causing~~ services ~~to be offered more frequently at low~~, ~~flat-rate~~we ~~prices~~have asadditional ~~opposed~~opportunities to ~~prices~~sell ~~based on metered usage~~our products.

Other factors such as regulatory changes and industry consolidation among our customers and competitors also will likely impact the competitive landscape of our industry significantly. Fundamentally, however, we expect the demand for greater levels of communications network capacity provided in low priced, “bundled” services will create new opportunities to develop and market infrastructure elements that will allow networks to provide more robust services while operating more efficiently. We ~~believe~~have ~~this will be especially true in~~ the ~~“last~~following ~~mile/kilometer”~~three ~~portion~~reportable ofbusiness ~~networks~~segments: ~~where our products and services are primarily~~

2 • Global Connectivity Solutions (“Connectivity”) • Network Solutions • Professional Services

~~used.~~ Our Itcorporate website address is inwww.adc.com. ~~this~~In the “Financial Information” category of the Investor Relations section of ~~networks~~our ~~where~~website, ~~bottlenecks~~we inmake ~~the~~our annual reports on Form 10-K, quarterly ~~high~~reports on Form 10-~~speed~~Q, ~~delivery~~current reports on Form 8-K and amendments to these reports available free of charge ~~communications~~as ~~services~~soon as reasonably practicable after these reports are ~~most~~filed ~~likely to~~with beor ~~pronounced~~furnished to the SEC. The

3 ~~Strategy~~

OurTable aim is to be the global leader in the provisioning of communications network infrastructure solutions and services. The core of our business has long been based in providing the infrastructure elements that connect equipment in communications networks with an emphasis on solutions serving the “last mile/kilometer” of a network. We believe our experience with network infrastructure solutions provides us with sustainable competitive advantages in this core business. To advance this core business, in recent years we have divested businesses that were not profitable or did not aid our strategic vision. In addition, we have grown our business in ways that we believe complement our strategic focus. Contents

“Corporate Governance” category of the Investor Relations section of our website also contains ~~Ultimately~~copies weof ~~are~~our ~~working~~Financial toCode ~~implement~~of aEthics, ~~growth~~our ~~strategy~~Principles ~~around~~of Corporate Governance, our Global Business Conduct Program, our ~~network~~Articles ~~infrastructure~~of ~~business~~Incorporation ~~that~~and ~~includes~~Bylaws, Description of Roles of Independent Lead Director and Executive Chairman and the ~~following~~charter of each committee of our Board of Directors. Each ~~key~~of ~~elements~~these documents can also be obtained free of charge (except for a reasonable charge for duplicating exhibits to our reports on Forms 10-K, 10-Q or 8-K) in print by any shareowner who requests them from our Investor Relations department. The Investor Relations department’s email address is investor@adc.com and its mailing address is: Investor Relations, ADC Telecommunications, Inc., P.O. Box 1101, Minneapolis, Minnesota 55440-1101. Information on our website is not incorporated by reference into this report or any other report we file with or furnish to the SEC.

•Industry ~~a heightened focus on the needs of our customer, delivering customer-specific solutions, high quality products~~ and ~~world-class~~Marketplace customer service; • sales growth through market share gains, new product introductions and expansion into adjacent and related markets; • development of new sales channels and market opportunities through the use of partnerships and alliances with other equipment vendors, distributors, resellers and systems integrators; • lowering our cost structure through improved operational efficiencies and economies of scale to compete effectively in a more cost-conscious marketplace; and • product portfolio additions and enhancements through both strategic acquisitions and our own research and development process.Conditions

~~Customer~~Over ~~Focus.~~the Welonger-term, ~~are~~we ~~committed~~believe tothat ~~helping~~the ~~our~~ever-increasing ~~customers maximize~~consumption ~~their~~of ~~return~~bandwidth onwill continue ~~investment,~~to ~~evolve~~drive ~~their~~an ~~networks~~ongoing ~~and simplify~~migration ~~network~~to ~~deployment~~next-generation ~~challenges~~networks inthat ~~providing~~can deliver reliable ~~communications~~broadband services toat ~~end~~low, often flat-~~users.~~rate Weprices ~~strive~~over tovirtually ~~offer~~any medium anytime and anywhere. ~~customer-specific~~We ~~solutions,~~believe ~~price~~this ~~competitive~~evolution ~~products~~particularly ~~that offer~~will ~~great~~impact ~~functionality~~the “edge” of the network where our products and services ~~quality,~~primarily are used and ~~world-class~~where ~~customer service~~constraints ~~that~~in ~~offers~~the onhigh-~~time~~speed ~~product~~ delivery ~~and~~of ~~highly~~communications ~~responsive~~services ~~support.~~are Wemost ~~believe~~likely ~~those~~to ~~companies~~occur. ~~that~~For ~~best~~us ~~service their~~to ~~customers~~participate ~~with~~as ~~compelling~~fully ~~value~~as ~~propositions~~possible ~~that~~in ~~include the~~this ~~aforementioned~~evolution ~~elements~~we must ~~hold~~focus a ~~competitive~~significant ~~advantage~~amount ~~in efforts~~of toour ~~grow~~resources ~~their~~on ~~businesses~~the development and sale of next-generation network infrastructure products.

~~Growing~~We ~~Sales. In the current environment of constrained capital spending by communications service providers, we~~ believe ~~that~~ wethere ~~must grow our market share to significantly grow our business. We~~ are ~~undertaking~~two ~~several~~key ~~initiatives~~elements indriving ~~our efforts to gain market share. Specifically, we look to sell more of our current portfolio to our existing customers, introduce new products to our existing customers, and introduce~~ the ~~entire~~migration ~~ADC product portfolio~~ to ~~new~~next-generation customers. The cornerstone of these initiatives is our commitment to focus on the needs of our customers. We are an industry leader in the areas of Engineer to Order and Configure to Order. These two processes provide our customers with customized product solutions that fulfill their requirements. We also are committed to the development and introduction of new products that have applications in our current markets and as adjacent markets focused primarily on the “last mile/kilometer” of networks~~. Examples of this~~: are new products and services for IPTV (Internet Protocol TV), VOIP (Voice over Internet Protocol), Carrier Ethernet, Metro Ethernet, and Wireless Coverage and Capacity solutions. The results of our market share growth initiatives can be seen in our 2005 fiscal year results with 23.5% growth (excluding KRONE) in our core business against an overall market growth of approximately 9%.

~~Development~~• ofFirst, ~~New~~businesses ~~Sales~~and ~~Channels.~~consumers Weworldwide ~~also~~ are ~~committed to~~becoming ~~the~~increasingly ~~development~~dependent ofon ~~more~~broadband, ~~sales~~multi-service ~~channels~~communications ~~that~~networks ~~can~~to ~~deliver~~conduct ~~our products~~a ~~into~~wide ~~various~~range ~~market~~of ~~segments.~~daily Wecommunications ~~continuously~~tasks ~~seek~~(e.g., ~~to partner~~emails with ~~other~~large ~~companies~~amounts ~~serving~~of ~~the~~data, ~~public~~teleconferencing, social networking, video streaming and ~~private communication~~photo ~~network~~sharing). ~~markets~~• toSecond, ~~offer~~end-users ~~more~~of ~~complete~~communications ~~solutions~~ services increasingly expect to ~~customer~~do ~~needs~~business over a single network connection at a low price. ~~Our~~Both ~~connectivity~~public ~~products~~networks inoperated ~~particular~~by communications service providers and private enterprise networks are ~~conducive~~ evolving to ~~incorporation~~provide bycombinations ~~other~~of ~~equipment~~Internet, ~~vendors~~data, ~~into~~video ~~a systems-level~~and ~~solution.~~voice Weservices ~~also~~that ~~believe~~can ~~there~~be ~~are~~offered ~~opportunities for~~economically usover tothe ~~sell~~same ~~more~~high-speed of network.

3 This evolution to next-generation networks impacts our industry significantly. Many of our communications service provider customers now focus their investments in these next-generation networks to differentiate themselves from their competitors by providing more robust services at increasing speeds. They believe such network advancements will attract business and consumer customers and allow them to grow their businesses.

Next-generation network investment by communications service providers has tended to come in ~~our~~the ~~products~~form ~~through~~of ~~indirect~~large, ~~sales~~multi-year ~~channels~~projects, which have attracted many equipment vendors, including ~~System~~us. ~~Integrators~~We ~~and~~believe ~~Value~~that ~~Added~~it ~~Resellers.~~is Weimportant ~~now~~for ~~have~~us ~~over~~to ~~500 Value~~participate ~~Added~~in ~~Reseller~~these ~~partners~~projects ~~worldwide.~~to Ingrow ~~addition,~~our webusiness ~~are~~and ~~partnering~~therefore ~~and~~have ~~expanding~~focused our ~~relationships~~strategy ~~with~~on ~~distribution~~the products that will be used in these projects. These ~~companies~~include ~~such~~central asoffice ~~Anixter~~fiber-based ~~and~~equipment, ~~Rexel~~wireless ~~that~~coverage ~~make~~and ~~our~~capacity ~~products~~equipment, ~~more~~and ~~readily~~equipment ~~available~~ to aaid ~~wider~~the ~~base~~deployment of ~~customers~~fiber-based ~~worldwide~~networks closer to the ultimate customer (i.e., fiber to the node, curb, residence, cell site, or business, which we collectively refer to as our “FTTX” products).

~~Lowering~~Spending ~~Cost~~on ~~Structure.~~these Wenext-generation ~~remain~~initiatives ~~committed~~by ~~to lower~~ our ~~overall~~ ~~cost~~customers ~~structure~~has ~~and~~not beresulted ain ~~low-cost industry leader. Over~~significant ~~the~~aggregate ~~next~~overall ~~three~~spending ~~years~~increases weon ~~want~~all tocategories ~~work toward an operating margin~~ of ~~14%~~network orinfrastructure ~~better~~equipment. ~~(exclusive~~This ofis because ~~impairment,~~spending ~~restructuring~~on ~~and acquisition-related charges~~mature, ~~amortization~~legacy ofproducts ~~purchased intangibles~~has ~~and~~decreased ~~stock-based~~over ~~compensation expenses)~~time. ~~To meet this goal we must contain costs.~~ We ~~have~~therefore ~~several~~believe ~~initiatives~~our ~~currently~~ability ~~underway~~to ~~that~~compete ~~include~~effectively ~~relocating~~in ~~production~~the ~~facilities from~~communications ~~high-cost~~equipment ~~geographic~~marketplace ~~areas~~depends toin ~~lower cost areas and~~significant ~~streamlining~~part ~~certain~~on ~~warehousing~~whether ~~activities to reduce duplicative functions. For instance,~~ we ~~are~~can ~~moving~~continue ~~certain manufacturing operations~~ to ~~the~~develop ~~Czech~~and ~~Republic~~market ~~to take advantage of reduced operating costs there compared to other areas in Europe. We also are aggressively pursuing manufacturing opportunities in the Asia~~next-~~Pacific~~generation ~~region.~~network ~~In fiscal 2006 we also~~infrastructure ~~intend~~products to ~~advance~~drive ~~towards~~growth ~~our operating margin goal by transitioning our operations~~ in ~~Europe and Asia onto~~ our ~~global enterprise resource planning system~~business.

~~Product~~Current ~~Portfolio~~Global ~~Additions.~~Macro-Economic ~~We continue to invest in~~Conditions research and development initiatives and to search for appropriate acquisition opportunities to strengthen our core product portfolio. Our efforts are focused on opportunities within our existing markets, as well as opportunities in adjacent or related markets that will strengthen our product offerings. In addition, we are focused on acquisitions that may enhance our geographic operations. We also will continue to evaluate and monitor our existing business and product lines for growth and profitability potential. If we believe it necessary, we will deemphasize or divest product lines and businesses that we no longer believe can advance our strategic vision.

We believe there are indicators that certain geographies and markets around the world are Inemerging ~~fiscal~~from ~~2004~~the adverse impacts of the global economic downturn, although the timing, strength and ~~2005~~continuity of a global economic recovery all remain uncertain. During the economic downturn we took steps, and we ~~divested~~continue ~~five~~to ~~businesses~~take ~~that~~steps, ~~either~~to lower our operating cost structure. We believe these steps were ~~not~~necessary ~~profitable~~to oralign ~~that~~our webusiness ~~did~~with ~~not~~the changing market conditions globally. Longer-term, we believe ~~fit~~that ~~within~~our lower cost structure will build leverage into our operating model ~~strategic~~without ~~focus~~significantly compromising our ongoing investment for the future. The actions we have taken include reductions in our global work force, an increased use of resources in low cost locations, and the consolidation of facilities and activities. We also ~~completed~~have ~~three~~realigned ~~important~~and refocused ~~acquisitions~~our resources on our most strategic initiatives through the rationalization or sale of ~~during~~certain ~~this~~non-strategic ~~time~~product and service offerings.

4 In fiscal 2004, we acquired the KRONE Group (“KRONE”), a global supplier of connectivity solutions and cabling products used in public access and enterprise networks. KRONE’s product and service offerings are an extension of our own core connectivity competencies. The acquisition of KRONE expanded our presence in the global marketplace and increased our percentage of sales outside the United States from approximately 25% in fiscal 2003 to approximately 45% in fiscal 2005. The acquisition also provided us with an established position in the enterprise customer market that augmented our historical service provider customer base.

InTable fiscal 2005, we acquired Fiber Optic Network Solutions Corp. (“FONS”) and OpenCell, Corp. (“OpenCell”). FONS is a leading manufacturer of high-performance passive optical components and fiber optical cable packaging, distribution and connectivity solutions. The FONS acquisition expanded and enhanced our existing line of fiber-to-the-x solutions (i.e., the deployment of fiber based networks closer to the ultimate consumer, which is sometimes referred to as “FTTX”) in a fast growing market. OpenCell is a manufacturer of digital fiber-fed Distributed Antenna Systems and shared multi-access radio frequency network equipment. The OpenCell acquisition enhanced our Digivance® wireless solutions that are used to extend coverage and accommodate growing capacity demands of wireless networks. Specifically, we believe the OpenCell technology will allow us to develop a Digivance® platform that will work across a wider range of communications frequencies and network protocols. Contents

Strategy Our ability to implement our strategy effectively is subject to numerous uncertainties, the most significant of which are described in Part 1, Item 1A “Risk Factors” in this Form 10-K. We cannot assure you that our efforts will be successful.

~~Product~~Market ~~and Service Offering Groups~~Goals

~~Our~~Over ~~Broadband~~the ~~Infrastructure~~past ~~and~~few ~~Access~~years, ~~business~~central ~~focuses~~office ~~on broadband~~and ~~connectivity~~outside plant (FTTX) fiber-based products ~~for~~have become a ~~variety~~greater percentage of ~~network~~our sales as service providers focus on building out their ~~applications~~fiber-based networks closer to the end user, ~~DSL~~as ~~offerings~~well ~~and~~as ~~wireless~~on ~~products~~providing ~~that~~more ~~improve~~network capacity to ~~and~~support ~~extend~~bandwidth ~~network~~intensive ~~coverage~~3G and ~~capacity~~4G wireless services. ~~Broadband Infrastructure~~Maintaining and ~~Access~~growing ~~products~~our ~~accounted~~position ~~for~~as ~~approximately~~a ~~80.7%,~~leading ~~80.9%,~~global ~~and~~provider ~~77.2%~~ of ~~our~~central ~~net~~office ~~sales~~fiber inand ~~fiscal~~FTTX ~~2005,~~solutions ~~2004,~~is therefore important to our strategy and ~~2003,~~long-term ~~respectively~~success.

4 In addition, we believe that service providers and enterprises around the world want to expand the coverage and capacity of wireless networks more efficiently by strategically deploying microcellular network solutions. This is especially applicable inside buildings and in capacity-strained outdoor areas that are poorly served by macro-cellular network solutions such as cell towers. We believe that our microcellular network solutions that distribute coverage and capacity to targeted areas will help service providers and enterprises achieve these goals.

~~Our~~The ~~Professional~~migration ~~Services~~to ~~business~~high ~~focuses~~performance onfiber-based ~~planning, deploying~~enterprise networks and ~~maintaining~~data ~~network~~centers ~~infrastructure. Professional~~within ~~Services~~public ~~products~~ and ~~services~~private ~~accounted~~organizations also represents an ongoing opportunity for ~~approximately 19.3%,~~our 19solutions.~~1%,~~ ~~and~~Today’s advanced ~~22.8%~~business ofrequirements ~~our~~mean ~~net~~that ~~sales~~organizations inare ~~fiscal~~rethinking ~~2005,~~the ~~2004,~~entire enterprise ~~and~~infrastructure ~~2003,~~to ~~respectively~~utilize new technologies for their mission-critical applications. ~~The~~We ~~primary~~believe that our products ~~and~~provide ~~services offered~~organizations bywith ~~each~~comprehensive ofend-to-end ~~these~~solutions ~~segments~~to ~~are~~help ~~described~~them ~~below~~meet their need for reliable, high-bandwidth networks.

Finally, in addition to targeting growth in these fiber-based and wireless market segments, we ~~See~~will ~~Note 15~~also seek to expand our presence in growing markets in developing countries around the ~~Consolidated~~world. We ~~Financial~~expect ~~Statements~~communications spending rates in developing countries to outpace such rates in more ~~Item 8~~developed parts of ~~this Form 10-K~~the world for ~~financial~~ ~~information~~the ~~regarding~~foreseeable ~~our~~future. ~~two~~In ~~business~~China ~~segments~~and asother targeted, developing ~~well~~countries, asfor ~~information~~example, ~~regarding~~we expect our ~~assets~~Century ~~and~~Man ~~sales~~product byportfolio ~~geographic~~to benefit from significant ~~region~~public and private sector investment in fiber-based wireline and wireless networks.

~~Broadband~~Business ~~Infrastructure and Access~~Priorities

~~Our~~Given ~~Broadband~~conditions ~~Infrastructure and Access products are used~~ in ~~both~~ ~~public~~the ~~and~~global ~~enterprise~~economy ~~(private business~~ and ~~government) networks. In public networks,~~ our ~~products are located primarily in serving offices for telephone~~industry, ~~cable~~we ~~tv,~~believe ~~wireless~~we ~~and~~must ~~other communication~~continue ~~service~~to ~~providers. These facilities contain the~~focus ~~equipment used in switching, routing and transmitting incoming and outgoing communications channels. Some of our products are also located in the public networks outside the serving offices and~~ on ~~end-users’ premises. As FTTX and~~ the ~~need~~following ~~for~~business ~~more flexible~~priorities ~~wireless coverage solutions continue~~ to ~~expand,~~advance ~~we expect to see growth in the use of~~ our ~~products~~market outside the serving offices. Our enterprise, private and governmental network customers generally purchase our products for installation in the networks located on their premises. We also sell connection products for broadcast and entertainment facilities. Broadband Infrastructure and Access products consist of the following general product groupingsgoals:

~~Broadband~~• ~~Connectivity~~Business ~~Systems~~growth in fiber-based wireline and ~~Components~~wireless communications networks, as well as in growing markets and geographies; • Operational excellence that drives low-cost industry leadership and provides our customers with superior products and support; and • High levels of customer service and focus through alignment with the next generation network needs of our global customer base.

~~Our~~Business ~~connectivity~~Growth ~~devices~~in Areas of High Strategic Importance. We are ~~used~~focused on growing our business in ~~copper~~markets ~~(twisted~~and ~~pair),~~geographies we consider to be of high strategic importance. We will service ~~coaxial~~these high growth market segments, which are largely within fiber-~~optic,~~based ~~wireless~~wireline and ~~broadcast communications~~wireless communications networks., ~~These~~with ~~products~~central ~~provide~~office ~~the~~fiber, ~~physical~~FTTX, ~~interconnections between~~enterprise ~~network~~data ~~components~~center orfiber ~~access~~and microcellular ~~points~~wireless ~~into~~coverage ~~networks~~and capacity product solutions. ~~Principally,~~ ~~these~~We ~~products~~will ~~include:~~also focus on markets in developing countries.

~~DSX~~ In ~~and~~the ~~DDF~~event ~~Products.~~our Weproposed ~~manufacture~~acquisition ~~digital~~by ~~signal cross-connect~~Tyco ~~(“DSX”)~~Electronics ~~and~~does ~~digital~~not ~~distribution frame (“DDF”) modules~~close, ~~panels~~we ~~and~~may ~~bays,~~pursue ~~which are designed~~growth toeither ~~terminate~~through ~~and~~making ~~cross-connect~~internal ~~copper~~investments ~~channels~~or ~~and~~by ~~gain~~pursuing ~~access to~~strategic ~~digital channels for Internet, data, video and voice transmission~~transactions. ~~Within our DSX and DDF product group, we offer~~ ~~solutions to meet global market needs for both twisted-pair and coaxial cable solutions.~~

~~FTTX~~Operational ~~Products~~Excellence and Low Cost Industry Leadership. ~~ADC’s~~We continue to implement ~~OmniReachtm~~initiatives designed to better align our business with changing macro-economic and market ~~product~~conditions. ~~family~~We believe this will enable us to meet the needs of ~~fiber~~our ~~distribution~~global ~~terminals,~~customer ~~fiber~~base ~~access~~more ~~terminals,~~efficiently ~~passive~~and ~~optical~~effectively. ~~splitter~~These ~~modules~~initiatives are designed to reduce our operating cost structure and improve organizational efficiency through a variety of actions that include, ~~wavelength~~among ~~division~~others, ~~multiplexer~~relocating ~~modules~~certain manufacturing, ~~connectors~~engineering and ~~drop~~other ~~cables~~operations isfrom ~~designed~~higher-cost togeographic ~~bring~~areas ~~flexibility~~to inlower-cost ~~implementation~~areas and ~~optimization~~implementing ofnew ~~capital infrastructure~~operating methods designed to ~~customers~~drive ~~deploying~~increased operational ~~FTTX~~efficiencies.

5 Fiber Distribution Panels and Frame Products. Fiber distribution panels and frames, which are functionally similar to copper cross-connect modules and bays, provide interconnection points between fiber-optic cables entering a service provider’s serving office and fiber-optic cables connected to fiber-optic equipment within the serving office. Our fiber distribution panels and frames are designed with special consideration of fiber-optic properties.

RFTable Signal Management Products. Our series of Radio Frequency (“RF”) products are designed to meet the unique performance requirements of video, voice and data transmission over coaxial cable used in today’s cable television networks and telephony carrier networks. Our RFWorx® product family leads the industry by offering the “plug-and-play” flexibility of combiners, splitters, couplers and forward/reverse amplification modules in a single platform designed for optimum cable management. The RFWorx system provides network design engineers with the full breadth of RF signal management tools that are essential in an evolving video, voice and data communications environment. Contents

~~Power~~These ~~Distribution~~initiatives have yielded significant ongoing cost savings to our operations and ~~Protection~~have allowed ~~Panels~~us to manage effectively through the global economic downturn. ~~Our~~For instance, during fiscal ~~PowerWorx®~~2010, we increased our gross margin percentages as compared to those in fiscal 2009 due to the ~~family~~impact of ~~circuit~~these ~~breaker~~initiatives on our cost structure, increased sales volume, and ~~fuse~~an ~~panels~~improved ~~are~~product mix. ~~designed~~These savings have helped to ~~power~~ generate leverage in our operating model and ~~protect~~offset ~~network~~pricing pressures ~~equipment~~and unfavorable mixes in ~~multi-service~~product ~~broadband~~sales that can have negative impacts on our operating ~~networks~~results. Our ability to continue to implement these initiatives is subject to numerous risks and uncertainties and no assurance can be given that this strategy will continue to be successful. Our gross profit percentages will continue to fluctuate from period to period due to several factors, including, but not limited to, sales volume, raw material and freight costs, product mix and the impact of future potential efficiency and cost saving initiatives.

5 Improved Customer Service and Focus. We remain highly committed to creating a compelling value proposition for our customers. This includes helping our customers maximize their return on investment, expand capacity in their networks and simplify deployment challenges in providing communications services to end-users. We strive to offer customer-specific solutions, price-competitive products with high functionality and quality, and world-class customer service and support that collectively will better position us to grow our business in a cost-effective manner. We also are focused on developing ways to sell more of our current portfolio and our newly developed products to existing customers and to introduce our products to new customers. The cornerstone of these initiatives is our commitment to understand and respond to our customers’ needs.

We also seek to partner with other companies as a means to serve the public and private ~~Modular~~communication ~~Fiber-Optic~~network ~~Cable~~markets ~~Management~~and ~~Systems~~to offer more complete solutions for our customers’ needs. ~~Our~~Many ~~FiberGuide®~~of our connectivity products in particular are conducive to incorporation by other equipment ~~system~~vendors isinto a ~~modular~~systems-level ~~cable~~solution. ~~management~~We ~~system~~also ~~that~~believe ~~provides~~there ~~a segregated,~~are ~~protected~~opportunities ~~method~~for us to sell more of ~~storing~~our products through indirect sales channels, including systems integrators and ~~managing~~value-added resellers. ~~fiber~~We have over 500 value-~~optic~~added reseller partners worldwide. In addition, we are expanding ~~patch~~our ~~cords~~relationships ~~and~~with ~~cables~~distributors ~~within~~to make our products more readily available to a ~~service~~wider ~~provider’s~~base ~~serving~~of ~~office~~customers globally.

~~Structured Cabling Products.~~ Our ~~TrueNet® Structured~~ ~~cabling~~ability ~~products~~to ~~are~~implement ~~the~~this ~~cables,~~strategy ~~jacks, plugs, jumpers, frames~~ and ~~panels~~operate ~~used~~our tobusiness ~~connect~~effectively ~~desk~~is ~~top~~subject ~~systems like~~to ~~personal~~numerous ~~computers~~uncertainties, to the ~~network~~most ~~switches~~significant ~~and servers in large enterprise campuses and condominium high-rise buildings. Our TrueNet® cabling products include various generations~~ of ~~unshielded twisted-pair~~which ~~copper~~are ~~cable~~described ~~and~~in ~~apparatus capable of supporting varying bandwidth requirements~~Part 1, asItem 1A ~~well as multi-mode fiber~~“Risk ~~systems~~Factors” ~~used~~in ~~primarily~~this ~~to interconnect switches, servers and commercial campus locations~~report.

~~Broadcast~~Product and ~~Entertainment~~Service ~~Products.~~Offering ~~Broadcast and~~Groups Entertainment products are audio, video, data patching and connectors used to connect and access worldwide broadcast radio and television networks. The industry leading Pro-Patch® brand is recognized as the leader in digital broadcast patching. Products include our ProAxtm triaxial connectors preferred by operators of mobile broadcast trucks, DBS satellite and large venue, live broadcasts like the Olympic games. A new line of our HDTV products exceeds the highest performance standards in the new digital broadcast industry.

~~Other~~The ~~Connectivity~~following ~~Products.~~table Ashows ~~variety~~the percent of ~~other~~net ~~products are~~sales ~~used~~for byeach ~~telecommunications~~of ~~service~~our ~~providers~~three ~~and~~reportable ~~private~~segments ~~networks~~for tothe ~~connect,~~three ~~monitor~~fiscal ~~and~~years ~~test~~ended ~~portions of their networks~~September 30, ~~such as patch cords~~2010, ~~media converters~~September 30, ~~splitter products~~2009 and ~~jacks~~October 31, ~~and plugs.~~2008:

Wireless Systems and Components


Reportable Segment	2010			2009			2008
Connectivity		75.3	%		79.5	%		79.8	%
Network Solutions		9.8			6.7			7.6
Professional Services		14.9			13.8			12.6

Total		100.0	%		100.0	%		100.0	%

~~Our~~Below ~~wireless~~we ~~systems~~describe the primary products and ~~components~~services ~~help~~offered ~~improve~~by ~~and~~each ~~extend~~of ~~the~~these segments. See ~~coverage~~Note ~~and~~15 ~~capacity~~to the Consolidated Financial Statements in Item 8 of ~~wireless~~this ~~communications~~report ~~networks.~~for ~~These~~financial information ~~products~~regarding ~~include:~~our three business segments as well as information regarding our assets and sales by geographic region.

Connectivity Cellular Coverage/ Capacity Enhancement Solutions. Our Digivance® family of wireless systems products includes solutions that address a wide range of coverage and capacity challenges for wireless network operators. These solutions include (i) applications to address challenging locations such as tunnels, traffic corridors and urban centers, (ii) cellular base station hotels that serve significant segments of a metropolitan area, (iii) neutral host applications that serve multiple carriers simultaneously, and (iv) indoor products that provide complete coverage for a single building or an entire campus. These solutions are sold directly to the major cellular operators, to the national and regional carriers including those in rural markets, and to neutral host facility providers who lease or resell coverage and capacity to the cellular carriers.

~~Tower~~Our ~~Top~~connectivity ~~Amplifiers.~~products Weconnect ~~develop~~wireline, ~~manufacture~~wireless, cable, enterprise and ~~market~~broadcast ~~the ClearGain® family~~communications ofnetworks ~~tower~~over fiber-~~top~~optic, ~~amplifier~~copper ~~products~~(twisted pair), ~~which~~coaxial ~~are~~and ~~distributed~~wireless media. These ~~globally~~products ~~for~~generally ~~all~~provide ~~major~~the ~~air~~physical ~~interfaces.~~interconnections ~~These~~between ~~products~~network ~~amplify~~components aand access ~~wireless~~points ~~signal~~into ~~and~~networks. ~~are~~As ~~sold~~of ~~primarily~~September 30, to2010, ~~wireless~~our ~~carriers.~~Connectivity products included:

~~Our~~FTTX ~~wireless~~Products. ~~products~~Our ~~improve~~OmniReachtm ~~signal~~product ~~quality~~family byof ~~boosting~~fiber ~~the~~distribution ~~uplink~~terminals, ~~signal~~fiber ofaccess ~~mobile~~terminals, ~~systems~~passive tooptical ~~increase~~splitter ~~receiver~~modules, ~~performance~~wavelength division ~~and~~multiplexer ~~improve~~modules, ~~overall~~connectors, ~~coverage.~~enclosures ~~The~~and ~~improvements~~drop incables ~~quality~~provide ~~of service~~customers ~~allow~~with ~~mobile~~a ~~subscribers~~flexible architecture to ~~place~~deploy ~~more~~FTTX ~~calls, make longer calls, and successfully complete calls in an expanded geographic area~~solutions.

~~Wireline~~ Fiber ~~Systems~~Distribution Panels and Frame Products. Our fiber distribution panels and frames, which are functionally similar to copper cross-connect modules and bays, provide interconnection points between fiber-optic cables entering a service provider’s serving office and fiber-optic cables connected to fiber-optic equipment within the serving office.

6 Our Soneplex® and HiGain® wireline products enable communications service providers to deliver high capacity voice and data services over copper or optical facilities in the “last mile/kilometer” of communications networks, while integrating functions and capabilities that help reduce the capital and operating costs of delivering such services. The LoopStar product family provides our customers with a flexible and economical optical transport platform for both legacy voice and next-generation protocols. The LoopStar portfolio provides “last mile/kilometer” and inter-office data transport to support a variety of business service offerings at a variety of different transmission rates.

6 Table of Contents

DSX and DDF Products. Our digital signal cross-connect (“DSX”) and digital distribution frame ~~Professional~~(“DDF”) ~~Services~~modules, panels and bays are designed to terminate and cross-connect copper cables and gain access to digital signals for Internet, data, video and voice transmission. We offer DSX and DDF products to meet global market needs for both twisted-pair and coaxial cable solutions.

~~Professional~~Structured ~~services,~~Cabling ~~which~~Products. weOur ~~offer~~TrueNet® instructured ~~North~~cabling ~~America~~products ~~and~~are the cables, jacks, ~~Europe~~plugs, ~~consist~~jumpers, offrames and panels used to connect desk top systems ~~integration~~like ~~services~~personal ~~for~~computers ~~broadband,~~to the ~~multiservice~~network ~~communications~~switches ~~over~~and ~~wireline,~~servers ~~wireless~~in large enterprise campuses, ~~cable~~high-rise buildings and ~~enterprise~~ ~~networks~~data centers. Our ~~Professional~~TrueNet® ~~services~~cabling ~~are~~products ~~used~~include tovarious ~~plan, deploy~~generations of twisted-pair copper cable and apparatus ~~maintain~~capable ~~communications~~of ~~networks~~supporting ~~that~~varying ~~deliver Internet,~~bandwidth ~~data~~requirements, ~~video~~as ~~and~~well ~~voice~~as ~~services~~multi-mode fiber systems used primarily to ~~consumers~~interconnect switches, servers and ~~businesses~~ commercial campus locations.

~~Our~~Broadcast ~~professional~~and ~~services~~Entertainment ~~support~~Products. ~~both~~Our ~~the~~broadcast ~~multi-vendor~~ and entertainment products are audio, ~~multi-service~~video, ~~delivery~~data ~~requirements~~patching ofand ~~our~~connectors ~~customers.~~used ~~These services~~to ~~support~~connect ~~customers~~and ~~throughout~~access ~~the~~worldwide ~~technology~~broadcast ~~life-cycle,~~radio and ~~from~~television ~~network~~networks. ~~design,~~Our ~~build~~Pro-~~out, turn-up~~Patch® ~~and~~products ~~testing~~are torecognized as the industry leader in digital ~~ongoing~~broadcast ~~maintenance~~patching. ~~and~~Our ~~training,~~ProAx® ~~and~~triaxial connectors are ~~utilized~~used by ~~our~~operators of mobile broadcast ~~customers~~trucks, inDBS ~~creating~~satellite and ~~maintaining~~large ~~intra-office~~venue, ~~inter-office or~~live ~~coast-to-coast networks.~~broadcasts ~~The~~such ~~provision~~as ofthe ~~such~~Olympic ~~services~~games. ~~also~~We ~~allows~~have usalso ~~additional~~introduced ~~opportunities~~a tonew ~~sell~~line ~~our~~of ~~hardware~~HDTV products, ~~thereby complementing~~for ~~our~~the ~~hardware~~digital ~~business~~broadcast industry.

~~Sales~~Network ~~and Marketing~~Solutions

Our Network Solutions products help improve coverage and ~~services~~capacity ~~are~~for ~~used~~wireless bynetworks ~~customers~~and broadband inaccess ~~four~~for ~~primary~~wireline networks. As of September 30, 2010, our Network Solutions products ~~markets~~include:

• In-building ~~the~~Wireless UCoverage/Capacity Solutions.S. ~~public~~Our ~~communications~~family ~~network~~of ~~market,~~indoor ~~which~~wireless ~~includes~~systems products ~~the~~provide ~~four~~coverage ~~major U.S. telephone companies (Verizon, BellSouth, SBC~~ and ~~Qwest),~~capacity ~~other~~for ~~local telephone companies, long-distance carriers,~~ wireless ~~service~~network ~~providers, cable television~~ operators ~~and~~in ~~broadcasters;~~in-building •environments such ~~the~~as ~~public~~office ~~and~~buildings ~~private~~or ~~network~~college ~~markets~~campuses. ~~outside~~We ofsell ~~the~~these ~~United~~solutions ~~States;~~directly •to the ~~U.S.~~major providers ~~private~~of ~~and~~mobile ~~governmental~~telephone ~~markets~~services, ~~which~~to ~~include~~national ~~business customers~~ and ~~governmental~~regional ~~agencies~~carriers, ~~that~~including ~~own~~those ~~and~~in ~~operate their own Internet~~rural markets, ~~data,~~enterprise ~~video~~markets and ~~voice~~to ~~networks~~neutral ~~for~~host ~~internal~~facility ~~use;~~providers ~~and~~that •lease ~~other~~or ~~communications~~resell ~~equipment vendors, who incorporate our products into products~~ coverage and ~~systems~~capacity ~~that~~to ~~they in turn sell into~~ the ~~three~~mobile ~~markets listed above~~carriers.

~~Our~~Outdoor ~~customer~~Wireless ~~base~~Coverage/Capacity isSolutions. ~~relatively~~Our ~~concentrated,~~family ~~with~~of ~~our~~outdoor ~~top~~wireless ~~ten~~systems products ~~customers~~provides ~~accounting~~coverage ~~for 42.7%, 46.9%,~~ and ~~56.7%~~capacity offor ~~our~~wireless ~~net sales~~network operators in ~~fiscal~~underserved ~~2005,~~outdoor ~~2004,~~metro and expanded ~~2003,~~venue ~~respectively.~~environments ~~The~~such ~~decline in~~as ~~these~~open-air ~~customer~~stadiums. ~~concentration~~These ~~levels~~solutions ~~from~~also ~~2004~~help tocustomers ~~2005 is~~address ~~largely~~coverage ~~due~~and tocapacity ~~the~~challenges ~~KRONE~~in ~~acquisition,~~locations ~~which~~such ~~gave~~as ustunnels, atraffic ~~more diversified~~corridors ~~customer~~and ~~base~~urban ~~throughout the world~~centers. ~~The majority of~~ ~~our~~These ~~sales~~solutions are ~~made~~sold directly to ~~U.S. telecommunications~~the ~~service~~ major providers. ~~Verizon,~~of ~~BellSouth,~~mobile ~~Qwest~~telephone ~~and~~services, ~~SBC~~to ~~collectively~~national ~~accounted~~and ~~for~~regional ~~approximately 25.7%~~carriers, ~~30.7%,~~including ~~and~~those ~~34.3%~~in ofrural ~~our net sales during fiscal 2005~~markets, ~~2004,~~ and ~~2003,~~to ~~respectively.~~neutral ~~Our largest~~host ~~customer,~~facility ~~Verizon,~~providers that ~~accounted~~lease ~~for~~or ~~12.5%,~~resell ~~13.5%,~~coverage and ~~12.9% of~~capacity ~~our~~to ~~sales~~the inmobile ~~fiscal 2005, 2004, and 2003, respectively~~carriers.

~~Outside~~Professional ~~the United States, we market our products to telephone~~Services operating companies, owners and operators of private enterprise networks, cable television operators and wireless service providers for networks located around the world. Our non-U.S. net sales accounted for approximately 45.4%, 39.5%, and 24.8% of our net sales in fiscal 2005, 2004, and 2003, respectively. Although the sales are not concentrated in any one country, our EMEA region (Europe, Middle East and Africa) accounted for the largest percentage of sales outside of North America. The increase in international sales is due primarily to our 2004 acquisition of KRONE, which has a greater mix of international sales.

~~Our~~We ~~direct~~also ~~sales~~offer ~~force~~systems ~~completes~~integration aservices ~~majority~~primarily ofin ~~our~~North ~~sales.~~America Wefor broadband, ~~maintain~~multiservice ~~sales~~communications ~~offices~~over ~~throughout the world. In the United States~~wireline, ~~our~~wireless ~~products~~and ~~are~~cable. ~~sold~~These ~~directly~~services byhelp our ~~sales personnel as~~customers ~~well as through value-added resellers~~plan, ~~distributors~~deploy and ~~manufacturers’~~ ~~representatives.~~maintain ~~Outside~~communications ~~the~~networks ~~United~~that ~~States~~deliver Internet, ~~our~~ ~~products~~data, ~~are~~video ~~sold~~and ~~directly~~voice services byto ~~our~~consumers ~~field~~and ~~sales~~businesses. ~~personnel~~These ~~and by~~services ~~independent~~support ~~sales~~customers ~~representatives~~throughout ~~and~~the ~~distributors~~technology life-cycle, asincluding ~~well as~~network ~~through~~design, ~~other~~build-out, ~~public~~turn-up, and ~~private~~on-going ~~network~~testing, ~~providers~~and ~~that distribute~~are ~~products.~~utilized ~~Nearly all of~~ by our ~~sales~~customers toin ~~enterprise networks~~creating ~~outside~~and ~~the~~maintaining ~~United~~intra-office, ~~States~~inter-office ~~are~~or ~~conducted~~coast-to-coast ~~through third~~networks. ~~party~~Providing ~~distributors~~these ~~who~~services ~~have~~gives ~~historical~~us ~~relationships~~the ~~with~~opportunity ~~KRONE. We use these relationships~~ to sell ~~our~~more ~~historical~~of our products ~~as well~~to asusers ~~KRONE’s~~of ~~historical~~our Professional ~~products~~Services.

Customers We maintain a customer service group that supports our field sales personnel and our third-party distributors. The customer service group is responsible for application engineering, customer training, entering

7 Our products and services are used by customers in three primary markets:

~~orders~~• ~~and~~the ~~supplying~~public ~~delivery~~communications ~~status~~network ~~information.~~market Weworldwide, ~~also~~which ~~have~~includes ~~a field~~major ~~service-engineering~~telephone ~~group~~companies ~~that~~such ~~provides on~~as Verizon, AT&T, Sprint, Telefonica, Deutsche Telecom and Bell Canada, local telephone companies, long-~~site~~distance carriers, wireless service to providers, cable television operators and broadcasters; • the private and governmental markets worldwide, which include business customers and governmental agencies that own and operate their own Internet, data, video and voice networks for internal use; and • other communications equipment vendors, which incorporate our products into their products and systems that they in turn sell into the above markets.

7 ~~Research and Development~~

WeTable believe that our future success depends, in part, on our ability to adapt to the rapidly changing communications environment, to maintain our significant expertise in core technologies and continue to meet and anticipate our customers’ needs. We continually review and evaluate technological changes affecting the communications market and invest in applications-based research and development. The focus of our research and development activities will change over time based on particular customer needs and industry trends as well as our decisions regarding those areas in which we believe we are most likely to achieve success. As part of our long-term strategy, we intend to continue an ongoing program of new product development that combines internal development efforts with acquisitions and strategic alliances relating to new products and technologies from sources outside ADC. Our expenses for internal research and development activities were $71.6 million, $59.1 million, and $59.9 million in fiscal 2005, 2004, and 2003, respectively. These amounts represented 6.1%, 7.6%, and 10.3% of our total revenues in each of those respective fiscal years. These percentages have decreased over time as we became more focused on the initiatives we will fund and as our operations became more concentrated in infrastructure products. Contents

Our customer base is concentrated, with our top ten customers accounting for 45.8%, 45.5% and ~~During~~45.4% of our net sales in fiscal ~~2005~~2010, ~~our~~2009 ~~research~~and 2008, respectively. In fiscal 2010, 2009 and ~~development~~2008, AT&T ~~activities~~accounted ~~were~~for approximately 25.9%, 20.5%, and 18.3% of our net sales, respectively. Verizon ~~directed~~accounted atfor ~~primarily~~12.6%, ~~the~~17.8% ~~following~~and ~~areas:~~17.9% of our net sales in fiscal 2010, 2009 and 2008, respectively.

• Our ~~connectivity~~non-U.S. ~~products~~net ~~for~~sales ~~FTTX~~accounted ~~initiatives;~~for •approximately ~~high-performance structured cables~~39.4%, ~~jacks,~~40.6% ~~plugs,~~and ~~jumpers,~~41.0% ~~frames~~of ~~and~~our ~~panels~~net tosales ~~enable~~in fiscal ~~the~~2010, ~~use~~2009 ofand ~~increasingly~~2008, ~~higher-performance~~respectively. IPIn ~~network~~fiscal ~~protocols~~2010, ~~within~~our ~~private~~APAC ~~networks;~~region •(Asia ~~connectivity~~and ~~products~~Indo-Pacific) accounted ~~that~~for ~~enable~~ the ~~use~~largest percentage of ~~network~~sales ~~protocols~~outside ~~within~~of ~~the~~North ~~public~~America ~~communications~~and ~~network,~~represented ~~which~~17.1% isof ~~used by~~ our net ~~customers~~sales. toIn ~~more~~fiscal ~~effectively~~2009 ~~deploy~~and ~~data~~2008, ~~services~~our ~~over~~EMEA ~~their~~region ~~historic~~(Europe, ~~voice-based~~Middle ~~networks;~~East and •Africa) ~~digital~~accounted ~~interfaces~~ for the ~~wireless~~largest ~~networks~~percentage ~~that~~of ~~will~~sales ~~enable~~outside ~~software-based~~of ~~products~~North toAmerica ~~interact~~and ~~with~~represented ~~the~~17.2% ~~physical~~and ~~elements~~21.1% of ~~these~~our ~~networks~~net sales, respectively.

~~New~~Our ~~product~~direct ~~development~~sales ~~often~~force ~~requires~~builds ~~long-term~~demand ~~forecasting~~for ~~of market~~our ~~trends,~~products ~~the~~and ~~development~~services and ~~implementation~~completes ofthe ~~new~~majority ~~processes~~of ~~and~~our ~~technologies~~sales. ~~and~~We amaintain ~~prioritization~~sales ofoffices ~~substantial capital~~throughout ~~commitment~~the world. ~~Due~~In to the ~~uncertainties~~United ~~inherent~~States, inour ~~each of~~products ~~these~~are ~~elements,~~sold ~~there~~directly ~~can~~by beour nosales ~~assurance~~personnel ~~that~~as ~~any~~well ~~new~~as ~~products we~~through ~~develop~~value-added ~~will~~resellers, ~~achieve~~distributors ~~market~~and manufacturers’ ~~acceptance~~representatives. orOutside bethe ~~profitable.~~United ~~In addition~~States, asour weproducts ~~balance~~are ~~product~~sold ~~development~~directly ~~with~~by our field ~~efforts~~sales ~~to achieve~~personnel ~~sustained~~and ~~profitability,~~by weindependent ~~are~~sales ~~more~~representatives ~~selective~~and indistributors, ~~our research~~as ~~and~~well ~~development~~as inthrough other ~~order~~public toand ~~focus~~private onnetwork ~~projects~~providers that ~~we believe~~distribute ~~directly~~products. ~~advance~~Nearly ~~our~~all ~~strategic~~of ~~aims~~our ~~and~~sales ~~have~~to enterprise anetwork ~~higher probability~~customers toare ~~return~~conducted ~~our~~through ~~investment~~third-party distributors.

We maintain a customer service group that supports our field sales personnel and our ~~Competition~~third-party distributors. The customer service group is responsible for application engineering, customer training, entering orders and supplying delivery status information. We also have a field service-engineering group that provides on-site service to customers.

~~Competition~~Research in the communications equipment industry is intense, particularly in light of reduced spending levels by our customers as well as the consolidation of our customer base. Many of our competitors have more extensive engineering, manufacturing, marketing, financial and ~~personnel resources than~~Development ~~us. In addition, rapid technological developments within the communications industry result in frequent changes among our group of competitors. Currently, our primary competitors include:~~

Given the constant evolution of technology in our industry, we believe it is important to ~~For~~develop ~~Broadband~~new ~~Infrastructure~~products so we can continue to meet our customers’ needs. We continually review and evaluate ~~Access~~technological ~~products:~~changes ~~3M,~~affecting our industry and invest in applications-based research and ~~ADTRAN,~~development. ~~Andrew,~~The ~~CommScope,~~focus ~~Corning,~~of ~~Furukawa,~~our ~~Nexans,~~research ~~Powerwave,~~and development activities will change over time based on ~~Schmitt,~~customer ~~Telect~~needs and industry trends as well as our decisions regarding those areas where we believe we are most likely to achieve success and advance our strategic aims. Our current projects have varying risk and reward profiles. As part of our longer-term strategy, we intend to continue an ongoing program of new product development that combines internal development efforts with acquisitions and ~~Tyco~~strategic alliances within spaces that are closely related to our core businesses.

~~For~~Our ~~Professional~~expenses ~~Services:~~for ~~Alcoa~~internal ~~Fujikawa,~~research ~~Butler~~and development activities were $69.7 million, $60.1 ~~Graniou~~million and $76.2 million in fiscal 2010, ~~Lucent~~2009 ~~Technologies~~and 2008, ~~NEC~~respectively, ~~SAG~~which represented 6.0%, 6.1% and ~~SPIE~~5.3% of our total revenues in each of those fiscal years.

8 During fiscal 2010, we directed our development activities primarily in the areas of:

We• ~~believe~~fiber ~~that~~connectivity ~~our~~products ~~success~~for inFTTX ~~competing~~initiatives ~~with~~and ~~other communications~~central ~~product~~office ~~manufacturers~~applications; ~~depends~~• ~~primarily~~high-performance onstructured cables, jacks, plugs, jumpers, frames and panels to enable the ~~following~~ ~~factors:~~ use of increasingly higher-performance IP network protocols within private networks; and • wireless coverage and capacity solutions that enable our customers to optimize their network coverage.

• our long-term customer relationships; • our brand recognition and reputation as a financially sound long-term supplier to our customers; • our engineering (research and development), manufacturing, sales and marketing skills; • the price, quality and reliability of our products; and • our delivery and service capabilities.Competition

~~We experience increased pricing pressures from competitors~~Currently, ~~as well as general pricing pressure from~~ our ~~customers~~primary ascompetitors ~~part of~~include: their cost reduction efforts. Price will likely continue to be a major factor in the markets in which we compete and we believe our potential ability to offset any downward pressure on prices primarily would be driven by the above listed success factors.

We• ~~believe~~For ~~that~~Connectivity ~~technological~~products: ~~change~~3M, ~~the increasing addition of Internet~~CommScope, ~~data~~Corning, ~~video~~Panduit and ~~voice~~Tyco ~~services~~Electronics. to• ~~integrated broadband,~~For ~~multimedia~~Network ~~networks,~~Solutions ~~continuing~~products: ~~regulatory~~CommScope, ~~changes and~~Mobile ~~industry~~Access, ~~consolidation will continue to cause rapid evolution in the competitive environment of the communications equipment market. At this time~~Powerwave, ~~it is difficult to predict the full scope~~ and ~~nature of these changes~~Alcatel-Lucent. ~~There~~• ~~can~~For beProfessional ~~no assurance~~Services: ~~that~~AFL weTelecommunications, ~~will~~Alcatel-Lucent, beEmerson, ~~able~~Mastec ~~to compete successfully with existing or new competitors. Competitive pressures may materially~~ and ~~adversely affect our business, operating results or financial condition~~Telamon.

Competition in the communications equipment industry is intense. We and other equipment ~~Manufacturing~~vendors are competing for the business of fewer and ~~Suppliers~~larger customers due to industry consolidation over the past several years. As these customers become larger,

8 We manufacture a variety of products that are primarily fabricated, assembled and tested in our own facilities around the world. In an effort to reduce costs and improve customer service, we generally attempt to manufacture our products in the region of the world where they will be deployed. Our strategy to reduce costs includes looking for opportunities to locate manufacturing in low-cost areas as competitive dynamics require. For instance, we recently announced an initiative to establish a manufacturing facility in the Czech Republic, which will replace and supplement other activities in Europe. We are also looking for ways in which we can respond quickly to changes in market factors in our manufacturing and supply chain. Like many companies in our industry, we are focusing on the Asia Pacific region as a potential place to locate manufacturing facilities. As part of our acquisition of FONS, we obtained additional manufacturing capabilities in China and Mexico. Our global sourcing team uses vendors from around the world to procure key components and raw materials at advantageous prices and lead times. The manufacturing process for our electronic products consists primarily of assembly and testing of electronic systems built from fabricated parts, printed circuit boards and electronic components. The manufacturing process for our connectivity products is vertically integrated and consists primarily of the fabrication of jacks, plugs, cables and other basic components from raw materials as well as the assembly of components and the testing of products. Our sheet metal, plastic molding, stamping and machining capabilities permit us to configure components to customer specifications, provide competitive lead times and control production costs. We also utilize several outsourced manufacturing companies to manufacture, assemble and test certain of our products within our Broadband Infrastructure and Access segment. We estimate that products obtained from outsourced manufacturers accounted for approximately 20% of our net sales for the Broadband Infrastructure and Access segment in fiscal 2005.

WeTable purchase raw materials and component parts from many suppliers. These purchases consist primarily of copper wire, optical fiber, steel, brass, nickel-steel alloys, gold, plastics, printed circuit boards, solid state components, discrete electronic components and similar items. Although many of these items are single-sourced, we have experienced no significant difficulties to date in obtaining adequate quantities. At this time, we are experiencing some increase in the prices for raw materials we use to make our products. To date, we have been able to mitigate most of these increases through the greater purchasing power we now have following our acquisitions of KRONE and FONS. These circumstances could change, however, and we Contents

9they have more buying power and are able to negotiate lower pricing. In addition, there are rapid and extensive technological developments within the communications industry that can and have resulted in significant changes to the spending levels and trends of these large customers, which further drives competition among equipment vendors.

~~cannot~~ We ~~guarantee~~believe that ~~sufficient~~our ~~quantities~~success orin ~~quality~~competing ofwith ~~raw materials~~other ~~and~~communications ~~component~~product ~~parts~~manufacturers ~~will be as readily available~~ in ~~the~~this ~~future~~environment ~~or,~~depends ifprimarily ~~available,~~on ~~that~~the wefollowing ~~will be able to obtain them~~factors: ~~at favorable prices.~~

~~Proprietary~~• ~~Rights~~ our long-term customer relationships; • our brand recognition and reputation as a financially-sound, long-term supplier to our customers; • our engineering (research and development), manufacturing, sales and marketing skills; • the price, quality and reliability of our products; • our delivery and service capabilities; and • our ability to contain costs.

WeManufacturing ~~own a portfolio of U.S.~~ and ~~foreign patents relating to our~~Suppliers ~~products. These patents, in the aggregate, constitute a valuable asset. We do not believe, however, that our business is dependent upon any single patent or any particular group of related patents.~~

We ~~registered~~manufacture ~~the~~a ~~initials~~variety ~~“ADC”~~of asproducts ~~well~~that asare ~~the~~fabricated, ~~word~~assembled and tested in facilities ~~“KRONE,”~~around ~~each~~the ~~alone~~world. In an effort to reduce costs and inimprove ~~conjunction~~customer ~~with~~service, ~~specific~~we generally attempt ~~designs,~~to asmanufacture ~~trademarks~~our products in low cost areas located in the ~~United~~region ~~States~~of the world where they will be deployed. We also utilize several outsourced manufacturing companies to manufacture, assemble and test ~~various~~certain ~~foreign~~of our products. We estimate that products manufactured by these companies accounted ~~countries~~for approximately 3.6% of our aggregate net product sales for the Connectivity and Network Solutions segments of our business in fiscal 2010.

We purchase raw materials and component parts from many suppliers located around the world ~~Seasonality~~through a global sourcing group. Although some of these items are single-sourced, we have not experienced any significant difficulties to date in obtaining adequate quantities to support customer demand. During fiscal 2010, we experienced net inflation in raw materials, primarily due to increases in several commodity markets but partially offset by our internal efficiency efforts and strategic sourcing partner selection. Looking to fiscal 2011, we expect that global economic conditions and supply and demand shifts will continue to have an adverse effect on the pricing of commodities. In addition, to the degree that certain regions experience an economic recovery, supply could tighten, providing additional upward price pressure. Circumstances relating to the availability and pricing of materials could change and our ability to mitigate price increases or to take advantage of price decreases in the future will depend upon a variety of factors, such as our purchasing power and the purchasing power of our customers.

WeIntellectual ~~believe the historical seasonality of our sales whereby there~~Property was stronger demand for our products during our fourth fiscal quarter ending October 31 may no longer apply to our business. This seasonality trend in our sales generally existed prior to the 2001-2003 downturn in the telecommunications equipment market when our business was more focused on central-office-based products. We believe our expansion into new growth markets of FTTX, wireless and enterprises may have changed this seasonality in our business. Our sales of these products have so far fluctuated from quarter to quarter, something we expect to continue. In addition, in fiscal 2005, it appears that many of our customers may have accelerated their annual capital spending in the first calendar-half of 2005. While the historical seasonality trend of our central-office-based business may no longer be apparent, we still expect sales in our first fiscal quarter to be lower than in other quarters. This is because of the number of holidays in that quarter and the development of capital spending budgets that many of our customers undertake during that time frame.

~~The~~We ~~working~~own ~~days~~a bylarge ~~quarter~~portfolio inof ~~fiscal~~U.S. ~~2006~~and isforeign ~~59 days~~patents ~~in the~~relating ~~first~~to ~~quarter,~~our ~~65 days~~products. These patents, in the ~~second quarter~~aggregate, ~~62 days~~ inconstitute ~~the~~a ~~third~~valuable ~~quarter~~asset as they allow us to sell unique products and ~~66 days~~provide protection infrom ~~the~~our ~~fourth~~competitors selling similar products. We do not believe, however, that our ~~quarter~~business is dependent upon any single patent or any particular group of related patents.

Additionally, we hold a large portfolio of U.S. and foreign trademarks. For example, we ~~Employees~~registered the initials “ADC” as well as the name “KRONE,” each alone and in conjunction with specific designs, as trademarks in the United States and various foreign countries. U.S. trademark registrations generally are for a term of ten years and are renewable every ten years as long as the trademark is used in the regular course of trade.

Seasonality As of October 31, 2005, we employed approximately 8,200 people worldwide, which is an increase of approximately 700 employees since October 31, 2004. The increase includes employees hired for our manufacturing operations and approximately 90 employees who joined ADC as a result of the OpenCell and FONS acquisitions.

Due to the change in our fiscal year end that was completed in fiscal 2009, our fiscal ~~Executive~~quarters ~~Officers~~now ofend near the ~~Registrant~~last day of December, March and June and our fiscal year ends on September 30th.

The number of sales days for each of our quarters in fiscal 2010 was: 62 days in the first ~~Our~~quarter, ~~executive~~65 days ~~officers~~in ~~are~~the second quarter, 64 days in the third quarter and 62 days in the fourth quarter. The number of sales days for each of our quarters in fiscal 2009 was: 58 days in the first quarter, 65 days in the second quarter, 63 days in the third quarter and, because of our transition to a September 30th fiscal year end, 42 days in the fourth quarter.

		Officer
Name	Office	Since		Age
Robert E. Switz	President and Chief Executive Officer		1994		59
Gokul V. Hemmady	Vice President, Chief Financial Officer		1997		45
Michael K. Pratt	Vice President, President, Wireline and Wireless Business Unit		2002		51
Patrick D. O’Brien	Vice President, President, Connectivity Business Unit		2002		42
Jeffrey D. Pflaum	Vice President, General Counsel and Secretary		1999		46
Laura N. Owen	Vice President, Human Resources		1999		49
Mary E. Quay	Vice President, Worldwide Operations		2002		54
James G. Mathews	Vice President and Controller		2005		54

Mr. SwitzTable joinedof ADC in January 1994 and served as ADC’s Chief Financial Officer from that date until August 2003, when he was named Chief Executive Officer. From 1988 to 1994, Mr. Switz was employed by Contents

10Employees

~~Burr-Brown~~ As ~~Corporation~~of September 30, a2010, ~~manufacturer~~we ofemployed ~~precision micro-electronics~~approximately 9,300 ~~most~~people ~~recently~~worldwide, aswhich ~~Vice~~is ~~President~~an increase of approximately 250 employees since September 30, ~~Chief~~2009. The increase in headcount is due ~~Financial~~primarily ~~Officer~~to ~~and~~supporting ~~Director,~~customer ~~Ventures~~demand in our Professional Services business and ~~Systems~~investment ~~Business~~in certain strategic initiatives.

~~Mr. Hemmady~~Executive ~~joined~~Officers ADC in October 1997. Mr. Hemmady served as ADC’s Vice President and Treasurer from October 1997 until August 2003. From May 2002 until August 2003, he also served as our Controller. Mr. Hemmady was named Chief Financial Officer in August 2003. Prior to joining ADC, Mr. Hemmady was employed by U S WEST International, a communications service provider, where he served as Director of ~~International~~the ~~Finance~~Registrant ~~from January 1996 to September 1997.~~

~~Mr. Pratt~~Our ~~joined~~executive ~~ADC~~officers ~~in June 2002 as President of~~are: ADC’s Wireline Business Unit. In September 2004 he also was named President of ADC’s Wireless Business Unit. Prior to joining ADC, Mr. Pratt served in a variety of positions, including Vice President and General Manager of the Access Systems Division of RELTEC Corporation, from 1996 to 1999. In March 1999, RELTEC Corporation was acquired by Marconi, Inc., a subsidiary of Marconi plc, a global telecommunications equipment and solutions company. Mr. Pratt continued to serve as the Vice President and General Manager of this business following its acquisition, until he was promoted to Executive Vice President of Marconi, Inc. in July 2000, a position he held until joining ADC.

Mr. O’Brien joined ADC in 1993 as a product manager for the company’s industry-leading DSX products and, during the following eight years, he held a variety of positions of increasing responsibility in the product management area, including positions such as Vice President and General Manager of copper and fiber connectivity products. He was named President of ADC’s Global Connectivity Solutions Business Unit in September 2004. From May 2004 through August 2004, Mr. O’Brien served as President and Regional Director of the Americas Region for ADC. Mr. O’Brien also served as President of our Copper and Fiber Connectivity Business Unit from October 2002 to May 2004. Prior to joining ADC, Mr. O’Brien was employed by Contel Telephone for six years in a network planning capacity.


		Officer
Name	Office	Since		Age
Robert E. Switz	Chairman, President and Chief Executive Officer		1994		64
James G. Mathews	Vice President, Chief Financial Officer		2005		59
Patrick D. O’Brien	Vice President, President, Global Connectivity Solutions Business Unit		2002		47
Kimberly S. Hartwell	Vice President, Global Go-To-Market		2008		48
Richard B. Parran, Jr.	Vice President, President, Network Solutions Business Unit		2006		54
Christopher Jurasek	Vice President, President, Professional Services Business Unit, Chief
	Information Officer		2009		45
Steven G. Nemitz	Vice President and Controller		2007		36
Laura N. Owen	Vice President, Chief Administrative Officer		1999		54
Jeffrey D. Pflaum	Vice President, General Counsel and Secretary		1999		51

Mr. ~~Pflaum~~Switz joined ADC in ~~April~~January 1994 ~~1996.~~as MrADC’s Chief Financial Officer. ~~Pflaum~~ He served in this ~~became~~capacity ~~Vice~~until ~~President,~~he ~~General~~was ~~Counsel~~appointed ~~and~~as ~~Secretary~~our ofChief ~~ADC~~Executive Officer in ~~March~~ ~~1999~~August 2003. ~~after~~He ~~having~~was ~~served~~appointed Chairman asof ~~Associate~~our ~~General~~Board ~~Counsel since~~of ~~April~~Directors ~~1996~~in July 2008. ~~Prior~~From 1988 to ~~joining ADC~~1994, heMr. Switz was anemployed ~~attorney with~~by ~~the Minneapolis~~Burr-~~based~~Brown ~~law~~Corporation, ~~firm~~a manufacturer of ~~Popham~~precision ~~Haik~~micro-electronics. His last position at ~~Schnobrich &~~Burr-Brown ~~Kaufman~~was as Vice President, Chief Financial Officer and Director, Ventures and Systems Business.

MsMr. ~~Owen~~Mathews joined ADC in 2005 as our Vice President, ~~Human Resources~~and Controller. He served in ~~December~~this capacity ~~1997~~until he was appointed as our Chief Financial Officer in April 2007. ~~Prior~~From 2000 to ~~joining~~2005 ~~ADC, Ms~~Mr. ~~Owen~~ ~~was~~Mathews ~~employed~~served byas ~~Texas~~Vice ~~Instruments~~President-Finance and ~~Raytheon~~Chief ~~(which~~Accounting ~~purchased~~Officer for Northwest Airlines, which ~~the~~filed ~~Defense~~for ~~Systems~~Bankruptcy ~~and~~Reorganization ~~Electronics~~under ~~Group~~Chapter 11 ofin ~~Texas~~U.S. ~~Instruments~~ Bankruptcy Court in ~~1997)~~September 2005. Prior to joining Northwest Airlines, ~~manufacturers~~Mr. Mathews ofwas ~~high-technology~~Chief ~~systems~~Financial and Administrative Officer at ~~components.~~CARE-USA, ~~From~~the ~~1995~~world’s tolargest ~~1997,~~private ~~she~~relief ~~served~~and asdevelopment ~~Vice~~agency. ~~President~~Mr. Mathews ofalso held a ~~Human~~variety ~~Resources~~of ~~for~~positions ~~the~~at ~~Defense~~Delta ~~Systems~~Air ~~and~~Lines, ~~Electronics~~including ~~Group~~service ofas Delta’s Corporate Controller and ~~Texas~~Corporate ~~Instruments~~Treasurer.

MsMr. ~~Quay~~O’Brien joined ADC in ~~1977~~1993 ~~and~~as ~~has~~a ~~served~~product inmanager afor the company’s DSX products. During the following eight years, he held a variety of positions ~~over~~of ~~her 28-year~~increasing ~~career~~responsibility atin ~~ADC.~~the product ~~During~~management ~~the~~area, ~~last~~including ~~five~~Vice ~~years,~~President Msand General Manager of copper and fiber connectivity products. Mr. ~~Quay~~O’Brien served as ~~Vice~~ President of ~~Manufacturing/~~our ~~Operations,~~Copper and ~~during~~Fiber Connectivity Business Unit from October 2002 to May 2004. From May 2004 through August 2004, Ms Mr. ~~Quay~~O’Brien served as our President and Regional Director of the Americas Region. He was named ~~Vice~~ President of ADC’s Global Connectivity Solutions Business Unit in September 2004. Prior to joining ADC, ~~Worldwide~~Mr. O’Brien ~~Operations~~was employed by Contel Telephone for six years in a network planning capacity.

MrMs. ~~Mathews~~Hartwell joined ADC in ~~2005~~July 2004 as Vice President of Sales, National Accounts and became ~~Controller.~~Vice ~~Prior~~President, toGo-To-Market ~~joining~~Americas ~~ADC,~~in Mr2007. ~~Mathews~~ ~~served~~She as became Vice President, Global Go-~~Finance~~To-Market ~~and~~in July 2008. ~~Chief~~In ~~Accounting~~this ~~Officer~~role, ~~for Northwest~~she ~~Airlines~~leads ~~from~~our ~~2000~~sales, tomarketing, ~~2005~~customer service and technical support functions worldwide. Prior to joining ~~Northwest Airlines~~ADC, MrMs. ~~Mathews~~Hartwell was ~~chief~~Vice ~~financial~~President ~~and administrative~~of ~~officer~~Marquee Accounts at ~~CARE-USA,~~Emerson ~~the world’s~~Electric ~~largest~~Corporation, ~~private~~a ~~relief~~manufacturer ~~and~~of ~~development~~electrical, ~~agency. Mr. Mathews~~electronic ~~also~~and ~~has~~other ~~held~~products ~~a variety of positions at Delta~~for ~~Air~~consumer, ~~Lines~~commercial, ~~including~~communications ~~service~~and asindustrial ~~Delta’s~~markets ~~corporate controller~~from ~~and~~June 2003 ~~corporate~~to ~~treasurer~~June 2004.

~~Item~~ Mr. 1AParran joined ADC in November 1995 and served in our business development group. ~~RISK~~From ~~FACTORS~~November 2001 to November 2005 he held the position of Vice President, Business Development. In November 2005, Mr. Parran became the interim leader of our Professional Services Business Unit and in March 2006 he was appointed Vice President, President, Professional Services Business Unit. In January 2009, he was named President of our Network Solutions Business Unit. Prior to joining ADC, Mr. Parran served as a general manager of the business services telecommunications business for Paragon Cable and spent 10 years with Centel in positions of increasing responsibility in corporate development and cable and mobile operations roles.

10 Our business faces many risks, all of which may not be described below. Additional risks of which we are currently unaware or believe to be immaterial may also result in events that could impair our business operations. If any of the events or circumstances described in the following risks actually occur, our business, financial condition or results of operations may suffer, and the trading price of our common stock could decline.

11 Table of Contents

Mr. Jurasek joined ADC in May 2007 as our Chief Information Officer. In this position, he oversees ADC’s information systems ~~Risks~~worldwide. ~~Related~~In January 2009, he was also named President of ADC Professional Services. In this role, he leads the company’s services business that helps network operators plan, deploy and maintain their networks. Prior to ~~Our~~joining ~~Business~~ADC, Mr. Jurasek served as Vice President and Chief Information Officer at Rexnord Corporation, a global industrial and aerospace equipment manufacturer, from September 2002 to May 2007. Prior to that, he held a variety of IT management positions at Solo Cup Company, Komatsu Dresser Company, and Dana Corporation.

~~Our~~ Mr. Nemitz ~~operating~~joined ~~results~~ADC ~~were~~in ~~adversely~~January 2000 ~~affected~~as bya ~~the~~financial ~~significant~~analyst. ~~downturn~~In inSeptember 2002, ~~the~~Mr. Nemitz ~~communications~~left ~~equipment~~ADC ~~industry~~to work for Zomax Incorporated, a provider of media and ~~the~~supply ~~slowdown~~chain insolutions, ~~the~~where ~~United~~he ~~States~~held ~~economy~~the ~~that~~position ~~occured~~of ~~generally~~Corporate ~~from~~Accounting ~~2001-~~Manager. In September 2003, ~~and~~Mr. Nemitz ~~there~~returned ~~can~~to beADC noas ~~assurance~~a ~~that~~Corporate weFinance ~~will~~Manager. ~~consistently~~He ~~maintain~~became ~~operating~~the ~~profitability~~Finance Manager of our Global Connectivity Solutions business unit in ~~the~~October 2004, ~~future~~Americas Region Controller in November 2005 and Assistant Corporate Controller in August 2006. In May 2007, he began service as our Corporate Controller.

~~Our~~Ms. Owen ~~operating~~joined ~~results~~ADC ~~during~~as ~~fiscal~~Vice ~~2001~~President, ~~2002~~Human ~~and~~Resources ~~2003~~in ~~were significantly~~December 1997. ~~impacted~~In byOctober 2007 ~~the~~she ~~substantial~~was ~~downturn~~named inVice ~~the~~President, ~~telecommunications~~Chief ~~equipment~~Administrative ~~industry~~Officer. WeAs ~~incurred~~a ~~significant losses~~part ~~from~~of ~~continuing~~this ~~operations~~role, inshe ~~our~~continues ~~fiscal~~to ~~years~~oversee ~~2001,~~our ~~2002 and~~human ~~2003~~resources function. ~~While~~Prior weto ~~returned~~joining toADC, ~~profitability~~Ms. Owen inwas ~~fiscal~~employed ~~2004~~by Texas Instruments and ~~are~~ ~~currently~~Raytheon ~~profitable,~~(which itpurchased isthe ~~not~~Defense ~~clear~~Systems ~~that~~and weElectronics ~~will~~Group beof ~~able~~Texas toInstruments ~~continue~~in to1997), ~~achieve~~manufacturers ~~revenue~~of ~~and~~high-technology ~~gross~~systems ~~margin~~and ~~levels~~components. ~~needed~~From 1995 to ~~sustain~~ ~~profitability. Further~~1997, ~~the~~she ~~increase~~served inas ~~our~~Vice ~~2004~~President ~~revenue~~of ~~was~~Human ~~primarily~~Resources ~~because~~for ofthe ~~our~~Defense ~~acquisition~~Systems ofand ~~KRONE~~Electronics inGroup ~~May~~of ~~2004~~Texas Instruments.

~~During this downturn, many of our customers reduced their equipment purchases and deferred capital spending~~Mr. Pflaum ~~Our~~joined ~~customers are~~ADC ~~dependent~~in onApril 1996 ~~the~~as ~~level~~Associate ofGeneral ~~end-user~~Counsel ~~demand for communications services,~~ and ~~they~~became ~~are~~Vice ~~likely to defer significant network expansions when they do not believe there is significant demand for greater Internet~~President, ~~data,~~General ~~video~~Counsel and ~~voice services. During the~~Secretary ~~downturn~~ of ~~the~~ADC ~~telecommunications~~in ~~industry~~March 1999. ~~that~~Prior ~~occurred~~to injoining ~~our fiscal years 2001~~ADC, ~~2002~~Mr. Pflaum ~~and~~was ~~2003,~~an ~~some~~attorney ofwith ~~our~~the ~~customers experienced~~Minneapolis-based ~~serious~~law ~~financial~~firm ~~difficulties,~~of ~~including~~Popham ~~bankruptcy~~Haik ~~filings~~Schnobrich or& ~~cessation of operations~~Kaufman.

11 The general slowdown in the United States economy in the early part of this decade negatively impacted our business and operating results. If general economic conditions in the United States and globally do not continue to improve, and especially if they worsen, we may experience material adverse effects on our business, financial condition and results of operations. Further, when our customers announce spending initiatives that might positively impact sales of one or more of our products, it is possible these customers contemporaneously will reduce spending in a manner that would negatively impact one or more of our other products.

ShiftsTable inof our product mix may result in declines in our gross margin.Contents

Our gross margins vary among our product groups and have fluctuated from quarter to quarter as a result of shifts in product mix (that is, how much of each product type we sell in any particular quarter), the introduction of new products, decreases in average selling prices and our ability to reduce manufacturing and other costsItem 1A. WeRISK ~~expect such fluctuation in~~FACTORS gross profit to continue in the future. Both KRONE and FONS historically sold certain products at margins lower than the margins at which the majority of our products sold. The integration of KRONE has negatively impacted our gross profit margins, and it is likely that the integration of FONS will do so as well. In addition, our gross margins could decrease based on the amount of new products we sell that have lower startup gross margins.

We Our ~~are~~business ~~becoming~~faces ~~increasingly~~many ~~dependent~~risks, onwhich ~~significant~~we ~~capital~~describe ~~deployment~~below. ~~initiatives~~If ~~driven~~any byof the events or circumstances described in the following risk factors actually occurs, our ~~customers~~business, financial condition or results of operations may suffer, and the trading price of our common stock could decline.

~~Increasingly~~Risks ~~our~~Related business is focused upon the sale of products serving significant customer initiatives for increased broadband capabilities deep into their networks. Examples of products serving these initiatives include our FTTX products, wireless coverage solutions and products used in enterprise networks. These products generally are utilized outside the central offices, where we traditionally sold most of our products, of our customer and often are deployed in connection with the construction of specific network projects. To date, our experience has been that the deployment of capital for such network projects is driven by our customers’ priorities and the needs of specific projects. For this reason, the demand for our products can fluctuate significantly from quarter to ~~quarter.~~ InOur ~~addition, the competition to sell our products can~~Business be very intense as the projects often utilize new products that are not incumbent to networks. The continued sale of these products by us will also be contingent upon the continued build-out by our customers of networks that utilize these products and the acceptance of our products into such networks. We cannot assure that these deployments will continue or that our products will be selected for these deployments on a consistent basis.

12If our merger transaction with Tyco Electronics Ltd. is not completed or is delayed, our share price, business and results of operations may materially suffer.

~~Consolidation~~ While ~~among~~we believe our ~~customers~~acquisition ~~could~~by ~~result~~Tyco Electronics Ltd. will close in ~~our~~the ~~losing~~current calendar quarter, it is possible the transaction might not be completed or could be delayed for a ~~customer~~number of reasons. If the consummation of the merger is delayed or ~~experiencing~~otherwise not consummated within the contemplated time periods or not at all, we could suffer a ~~slowdown~~number asof ~~integration~~consequences ~~takes~~that ~~place.~~may affect our business, results of operations and share price in a material and adverse manner, including:

We• ~~believe~~a ~~there~~loss ~~likely~~of ~~will~~revenue beand ~~continued~~market ~~consolidation~~position ~~among our~~that ~~customers~~we inmay ~~order~~not ~~for~~be ~~them~~able to ~~increase~~regain ~~market~~if ~~share, diversify~~the ~~product~~proposed ~~portfolios~~transaction ~~and~~is ~~achieve~~not ~~greater~~consummated; ~~economies~~• ~~of scale.~~damage ~~Consolidation~~to ~~may impact~~ our ~~business~~relationships aswith our customers ~~focus~~, onsuppliers, ~~integrating~~and ~~their~~other ~~operations.~~business Wepartners; ~~believe~~• ~~that~~a ~~in certain~~potential ~~instances~~obligation ~~customers~~to ~~engaged~~pay ina ~~integrating~~$38.0 ~~large-scale acquisitions~~million ~~may~~termination ~~scale~~fee ~~back~~depending ~~their~~on ~~purchases~~the ofreasons ~~network~~for ~~equipment while~~termination of the ~~integration~~merger istransaction; ~~ongoing.~~• ~~Further,~~significant ~~once~~costs ~~consolidation occurs,~~related ~~our~~to ~~customers~~the ~~may~~proposed ~~choose~~transaction, toincluding ~~pare~~substantial ~~down~~legal, ~~the~~accounting ~~number~~and ~~of vendors~~investment ~~they~~banking ~~use~~expenses; to• ~~source~~a ~~their~~loss ~~equipment,~~of ~~although~~key weemployees ~~have~~during ~~not yet~~the ~~seen~~pendency ~~this~~of ~~impact.~~the ~~After~~merger aand ~~consolidation~~our ~~occurs,~~relationships ~~there~~with ~~can~~employees generally may be no ~~assurance~~damaged; ~~that~~and we• ~~will~~a ~~continue~~loss toof ~~supply~~business ~~equipment~~and toorganizational ~~the surviving~~opportunities ~~communications~~due ~~service~~to ~~provider.~~covenants ~~The~~in ~~impact~~the ~~of significant~~merger ~~mergers~~agreement onthat ~~our~~restrict ~~business~~certain isactions ~~likely~~by tous beprior ~~unclear until~~to ~~sometime~~completion ~~after~~of ~~such~~the ~~transactions~~merger, ~~have~~or ~~closed~~other factors.

Our ~~sales~~industry ~~could~~is behighly ~~negatively~~competitive ~~impacted~~and ifspending ~~one~~for orcommunication ~~more~~infrastructure ofproducts ~~our~~has ~~key~~not grown ~~customers~~significantly ~~substantially~~in ~~reduces~~recent ~~orders~~years. ~~for~~In addition, our ~~products~~product and services sales are subject to significant downward pricing and volume pressure.

~~Our~~Competition ~~customer~~in ~~base~~the isbroadband ~~relatively~~network ~~concentrated,~~infrastructure ~~with~~equipment ~~our~~and ~~top~~services ~~ten~~industry is ~~customers~~intense. ~~accounting~~We ~~for~~have ~~42.7%~~experienced, ~~46.9%,~~ and ~~56.7%~~anticipate ofcontinuing ~~net~~to ~~sales for fiscal years 2005~~experience, ~~2004,~~greater ~~and~~pricing ~~2003,~~pressures from ~~respectively. While~~ our ~~acquisition~~ ofcustomers ~~KRONE~~as ~~diversified~~well as our ~~customer base~~competitors, ~~our~~many ~~recent acquisitions~~ of ~~FONS~~whom ~~may~~are ~~have~~headquartered ~~the~~or ~~effect~~have ofoperations ~~mitigating some of~~in ~~this~~low ~~diversification~~cost regions. IfIn ~~we lose a significant customer for any reason~~part, ~~including~~this ~~consolidation~~pressure ~~among~~exists ~~our~~because ~~customer base,~~ our ~~sales~~ ~~and~~industry ~~gross~~currently ~~margins~~is ~~would~~characterized ~~be negatively impacted. Further,~~by inmany ~~the~~vendors ~~product~~pursuing ~~areas~~relatively ~~where~~few welarge ~~believe the potential for revenue growth is most pronounced (e~~customers.~~g.,~~ ~~FTTX~~As ~~initiatives~~a ~~and wireless products)~~result, our ~~sales~~customers ~~remain~~have ~~highly concentrated with~~ the ~~major~~ability ~~telephone companies. The loss of sales due~~ to aexert ~~decrease~~significant ~~in orders~~pressure ~~from~~on aus ~~key~~with ~~customer~~respect ~~could require us~~ to ~~record~~product ~~additional impairment~~pricing and ~~restructuring~~other ~~charges~~contractual ~~or exit a particular business or product line~~terms.

In We ~~the~~believe ~~aftermath~~our ability to compete with other manufacturers of ~~Hurricane~~communications ~~Katrina,~~equipment products weand ~~may~~providers ~~experience~~of arelated ~~change~~services independs primarily on our engineering, manufacturing and marketing skills; the ~~sales~~price, quality and reliability of our products; our delivery and ~~services~~service capabilities; and the management of our business model (e.g., improving gross margins and controlling operating expenses).

WeOur sell our products and services to customers operating in some of the areas hardest hit by Hurricane Katrina. Communications networks have been impacted adversely, along with other infrastructure in this area. Although we are not certain about the effect that Hurricane Katrina may have on sales ~~of our products~~ and ~~services, it is possible that we will experience slower sales in the near term while affected customers work to stabilize their networks and normalize~~ operations. ~~Moving forward, there~~ may ~~also~~continue ~~be a temporary upturn in our sales as our customers work~~ to ~~replace~~be ~~damaged or destroyed network elements in the areas~~ impacted adversely by ~~the~~global ~~hurricane.~~economic ~~Conversely, our sales could decrease as our customers divert money from other parts of their budgets to spend on rebuilding~~conditions.

~~Our~~ The ~~market~~ongoing isglobal ~~subject~~economic todownturn ~~rapid~~may ~~technological~~worsen ~~change,~~or ~~and~~continue tofor ~~compete~~a ~~effectively,~~significant weperiod ~~must~~of ~~continually~~time. There ~~introduce~~can ~~new~~be ~~products~~no assurance that ~~achieve~~there ~~market~~will ~~acceptance~~not be a further deterioration in financial markets and in business conditions generally. These economic developments have affected our business adversely in a number of ways and could continue to impact our business adversely during the foreseeable future. Examples of the impact the global economic downturn has had, and could continue to have on our business include:

~~The~~• ~~communications~~There ~~equipment~~has ~~industry is characterized by rapid technological changes~~been, ~~evolving industry standards, changing market conditions~~ and ~~frequent~~may ~~new~~continue ~~product~~to ~~and~~be, ~~service introductions~~soft ~~and~~demand ~~enhancements~~for ~~by our competitors. The introduction of products using new technologies or~~ the ~~adoption of~~goods ~~new~~and ~~industry~~services ~~standards can make~~ our ~~existing~~customers ~~products~~provide ~~or products~~to ~~under~~their ~~development obsolete or unmarketable~~customers. ~~For example, it is possible that FTTX initiatives may negatively impact sales of non-fiber products.~~ In ~~order~~turn, tothis ~~grow~~has ~~and remain competitive~~caused, weand ~~will~~may ~~need~~continue to ~~adapt to these rapidly changing technologies~~cause, tosome ~~enhance~~of our ~~existing~~customers ~~solutions and~~ to ~~introduce new~~spend ~~solutions~~less toon ~~address~~the ~~our~~products ~~customers’~~and ~~changing~~services ~~demands~~we sell.

12 We may not accurately predict technological trends or the success of new products in the communications equipment market. New product development often requires long-term forecasting of market trends, development and implementation of new technologies and processes and a substantial capital commitment. In addition, we do not know whether our products and services will meet with market acceptance or be profitable. Many of our competitors have greater engineering and product development

13 Table of Contents

~~resources~~• ~~than~~Increased wecompetition ~~do. Although we expect~~ to ~~continue~~complete tosales ~~invest substantial~~among ~~resources~~our incompetitors ~~product~~has ~~development activities~~created, ~~our efforts to achieve~~ and ~~maintain~~may ~~profitability~~continue ~~will require us~~ to be ~~more~~create, ~~selective~~pressure ~~and focused with our research and development expenditures. If we fail~~ to ~~anticipate~~sell orproducts ~~respond in a cost-effective~~ and ~~timely~~services ~~manner~~at tolower ~~technological~~prices ~~developments, changes in industry standards~~ or ~~customer~~on ~~requirements,~~less oradvantageous ifterms ~~we have~~than ~~any significant delays~~ in ~~product~~the ~~development or introduction, our business, operating results and financial condition could be materially adversely affected~~past.

~~Strategic~~Our ~~changes~~gross tomargins ~~our~~may ~~product~~vary ~~portfolio~~over ~~may~~time, ~~not~~and ~~yield~~our ~~the~~level ~~benefits~~of ~~that~~gross wemargins ~~expect~~may not be sustainable.

InGross ~~connection~~margins ~~with~~among ~~the~~our ~~downturn~~product ingroups ~~the~~vary ~~communications~~and ~~industry, we~~are ~~divested~~subject orto ~~ceased~~fluctuation ~~operating~~from ~~numerous~~quarter to quarter. Many of our newer product ~~lines~~offerings, ~~and businesses~~such ~~that~~as ~~either~~our ~~were~~FTTX ~~not~~products, ~~profitable~~typically orhave ~~did~~lower ~~not~~gross margins ~~match~~than our ~~new~~ ~~strategic~~legacy ~~focus~~products. WeAs ~~may~~these ~~make~~new ~~further~~products ~~divestitures~~increasingly oraccount for a larger ~~closures~~percentage of ~~product~~our ~~lines~~sales, ~~and~~our ~~businesses.~~gross Inmargins ~~addition,~~could webe ~~have recently~~impacted ~~made~~negatively. ~~acquisitions~~The factors that wemay impact ~~believe~~our gross margins adversely are ~~aligned~~numerous ~~with~~and ~~our current~~include, ~~strategic~~among ~~focus.~~others:

~~The~~• ~~impact~~Changes ofin ~~potential~~customer, ~~changes~~geographic, toor ~~our~~ product ~~portfolio~~mix, ~~and~~including the ~~effect~~ mix of ~~such~~configurations ~~changes~~within oneach ~~our~~product ~~business,~~group; ~~operating~~• ~~results~~Introduction ~~and financial~~of ~~condition~~new ~~are~~products, ~~evolving~~including ~~and~~products ~~not~~with ~~fully~~price-performance ~~known~~advantages; at• ~~this time.~~Our Ifability weto ~~acquire~~reduce ~~other~~product ~~businesses~~costs; • Increases in ~~our~~material ~~areas~~or oflabor ~~strategic focus,~~costs; we• ~~may~~Expediting ~~have~~costs ~~difficulty~~incurred ~~assimilating~~to ~~these~~meet ~~businesses~~customer ~~and their~~delivery ~~products,~~requirements; ~~services,~~• ~~technologies~~Excess inventory and ~~personnel~~inventory ~~into~~carrying ~~our operations.~~charges; ~~These~~• ~~difficulties~~Changes ~~could~~in ~~disrupt~~shipment ~~our~~volume; ~~ongoing business,~~• ~~distract~~Changes ~~our~~in ~~management~~component ~~and~~pricing; ~~workforce,~~• ~~increase~~Increased ~~our expenses~~price ~~and~~competition; ~~adversely~~• ~~affect~~Changes ~~our~~in ~~operating~~distribution ~~results~~channels; ~~and financial~~• ~~condition.~~Increased ~~Furthermore,~~warranty wecost; ~~may~~• ~~not~~Liquidated bedamages ~~able~~costs relating to ~~retain key~~customer ~~management,~~contractual ~~technical~~terms; and ~~sales~~• ~~personnel~~Our ~~after~~ability ~~an acquisition. In addition~~ to ~~these~~manage ~~integration risks, if we acquire new businesses, we may not realize all of~~ the ~~anticipated~~ ~~benefits~~impact of ~~these~~foreign ~~acquisitions.~~currency ~~Divestitures~~exchange ~~or elimination~~rate ~~of existing businesses or product lines could also have disruptive effects and may cause us to incur material expenses~~fluctuations.

IfOur weoperating results are ~~unable~~difficult to ~~garner~~predict ~~customer~~and ~~support~~fluctuate ~~for~~significantly ~~our~~from ~~combined~~quarter ~~portfolio following the FONS acquisition, we may not be able~~ to ~~realize the gains we anticipated~~ quarter.

~~Both~~Our ~~ADC~~operating ~~and~~results ~~FONS~~are ~~rely~~difficult ~~heavily~~to onpredict ~~the~~for ~~business~~any ~~generated~~particular ~~from one~~period ~~customer~~due ~~for~~to a ~~large~~variety ~~percentage~~ of factors, ~~sales~~including in the ~~FTTX~~current ~~space. If~~global ~~this~~economic ~~particular~~environment ~~customer~~and ~~decreases~~related ~~the~~market ~~amount~~uncertainty. ~~of products it~~The ~~purchases,~~significant orfluctuation ~~seeks~~of ~~out~~our ~~additional~~operating ~~suppliers~~results ~~for~~from ~~products~~quarter ~~rather than allowing us~~ to ~~consolidate~~quarter ~~the~~is ~~combined~~caused ~~revenue~~by ~~share~~many offactors, ~~both ADC and FONS~~including, ~~the~~among ~~efficiencies that we projected with this~~others: ~~acquisition may not materialize.~~

If• wethe ~~seek~~volume and timing of orders from and shipments to ~~secure~~our ~~additional~~customers; ~~financing,~~• wethe ~~may~~overall ~~not~~level beof ~~able~~capital toexpenditures ~~obtain~~by ~~it.~~our ~~Also,~~customers; if• wework ~~are~~stoppages ~~able~~and toother ~~secure~~developments ~~additional~~affecting ~~financing,~~the operations of our ~~shareowners~~customers; ~~may~~• ~~experience~~the ~~dilution~~timing of ~~their~~and ~~ownership~~our ~~interest~~ability orto weobtain ~~may~~new becustomer ~~subject~~contracts toand ~~limitations~~the ontiming ~~our~~of ~~operations.~~revenue recognition; • the timing of new product and service announcements; • the availability of products and services;

13 We currently anticipate that our available cash resources, which include existing cash, cash equivalents and available-for sale securities, will be sufficient to meet our anticipated needs for working capital and capital expenditures to execute our near-term business plan, based on current business operations and economic conditions. If our estimates are incorrect and we are unable to generate sufficient cash flows from operations, we may need to raise additional funds. In addition, if one or more of our strategic acquisition opportunities exceeds our existing resources, we may be required to seek additional capital. We do not currently have any significant available lines of credit or other significant credit facilities, and we are not certain that we can obtain commercial bank financing on acceptable terms. If we raise additional funds through the issuance of equity or equity-related securities, our shareowners may experience dilution of their ownership interests and the newly issued securities may have rights superior to those of common stock. See “Risks Related to our Common Stock” below. If we raise additional funds by issuing debt, we may be subject to restrictive covenants that could limit our operating flexibility and interest payments could dilute earnings per share.

14 Table of Contents

~~Our~~• ~~industry~~market isacceptance ~~highly~~of ~~competitive~~new and ~~subject~~enhanced toversions ~~significant~~of ~~downward~~our products and services; • variations in the mix of products and services we sell; • fluctuations in foreign currency exchange rates; • the location and utilization of our production capacity and employees; • increased pricing pressure ~~for~~by our customers; and • the availability and cost of key components of our products.

~~Competition~~Our inexpense ~~the~~levels ~~communications~~are ~~equipment~~based ~~and related services industry is intense. We believe our success~~ in ~~competing~~part ~~with other manufacturers of communications equipment products and related services will depend primarily~~ on ~~our~~expectations ~~engineering, manufacturing and marketing skills, the price, quality and reliability~~ of ~~our products, our delivery and service capabilities and our control of operating expenses. We have experienced and anticipate greater pricing pressures from current and~~ future ~~competitors as well as our customers~~revenues. ~~Our industry~~If isrevenue ~~currently~~levels ~~characterized by many vendors pursuing relatively few and very large customers, which provides our customers with the ability to exert significant pressure on their suppliers, both~~ in ~~terms of pricing and contractual terms.~~ ~~Many~~a ofparticular ~~our~~quarter ~~competitors~~are ~~have~~lower ~~more extensive engineering, manufacturing, marketing, financial and personnel resources~~ than we ~~do. As a result~~expected, ~~other~~our ~~competitors~~operating ~~may~~results will be ~~able~~affected ~~to respond more quickly to new or emerging technologies or changes in customer requirements, or offer more aggressive price reductions~~adversely.

~~Possible~~Our ~~consolidation~~profitability ~~among~~could ~~our~~be ~~competitors~~impacted ~~could~~negatively ~~result~~if inone aor ~~loss~~more of ~~sales~~our key customers substantially reduces orders for our products and/or transitions their purchases towards lower gross margin products.

WeOur ~~expect~~customer tobase ~~see~~is ~~continued~~concentrated, ~~consolidation~~with ~~among~~our ~~communication equipment~~top ~~vendors.~~ten ~~This~~customers ~~could~~accounting ~~result~~for in45.8%, 45.5% and 45.4% of our ~~competitors~~net ~~becoming financially~~sales ~~stronger~~in ~~and~~fiscal ~~obtaining~~2010, ~~broader~~2009 ~~product~~and ~~portfolios~~2008, respectively. It isIn ~~possible~~fiscal ~~that~~2010, ~~such~~2009 ~~consolidation~~and ~~could~~2008, AT&T ~~lead~~accounted tofor aapproximately ~~loss~~25.9%, 20.5%, and 18.3% of our net sales, respectively. Verizon accounted for us12.6%, as17.8% and 17.9% of our ~~competitors~~net ~~increase~~sales ~~their~~in ~~resources~~fiscal ~~through consolidation~~2010, 2009 and 2008, respectively.

~~Our~~ If a significant customer slows-down, delays, or completes a large project or if we lose a significant customer for any reason, including consolidation among our major customers, our sales and operating results ~~fluctuate~~will ~~significantly~~be impacted negatively. Also, ~~and~~in ifthe case of products for which we believe ~~miss~~potential ~~quarterly~~revenue ~~financial~~growth ~~expectations~~is the greatest, our ~~stock~~sales ~~price~~remain highly concentrated with the major communications service providers. The loss of sales due to a decrease in orders from a key customer could ~~decline~~require us to exit a particular business or product line or record related impairment or restructuring charges.

~~Our~~Gross ~~operating~~margins ~~results~~vary ~~are~~among ~~difficult~~our toproduct ~~predict~~groups and ~~may~~a ~~fluctuate significantly~~shift ~~from~~in ~~quarter to quarter. It is likely that~~ our ~~operating~~ ~~results~~customers’ inpurchases ~~some~~toward ~~periods will be below investor~~a ~~expectations.~~product Ifmix ~~this happens~~(i.e., the ~~market~~amount ~~price~~ of ~~our~~each ~~common stock~~type isof ~~likely~~product towe ~~decline.~~sell ~~Fluctuations~~ in ~~our~~a ~~future~~particular ~~quarterly~~period) with lower ~~earnings~~margins ~~may~~could beresult ~~caused~~in bya ~~many~~reduction ~~factors,~~in ~~including~~our ~~without~~profitability. ~~limitation:~~

•Our ~~the~~market ~~volume~~is ~~and~~subject ~~timing of orders from and shipments~~ to ~~our~~rapid ~~customers;~~technological •change ~~work stoppages~~ and, ~~other developments affecting the operations of our customers; • the timing of and our ability~~ to ~~obtain~~compete ~~new~~effectively, ~~customer~~we ~~contracts~~must continually ~~and~~introduce ~~sales recognition; • the timing of~~ new ~~product and service announcements; • the availability of~~ products ~~and~~that ~~services;~~achieve ~~• the overall level of capital expenditures by our customers; •~~ market acceptance of new and enhanced versions of our products and services; • variations in the mix of products and services we sell; • the location and utilization of our production capacity and employees; and • the availability and cost of key components.

The communications equipment industry is characterized by rapid technological changes, ~~Our~~evolving ~~expense~~industry ~~levels~~standards, ~~are~~changing ~~based~~market inconditions ~~part~~and onfrequent ~~expectations~~new ofproduct ~~future~~and service ~~revenues~~introductions and enhancements. IfThe ~~revenue~~introduction ~~levels~~of inproducts ausing ~~particular~~new ~~period~~technologies ~~are~~or ~~lower~~the adoption ~~than~~of ~~expected~~new industry standards can make our existing products, or products under development, obsolete or unmarketable. For example, FTTX product sales initiatives may impact sales of our ~~operating~~non-fiber products ~~results~~negatively. In order to remain competitive and increase sales, we will beneed ~~affected~~to ~~adversely~~adapt to these rapidly changing technologies, enhance our existing products and introduce new products to address the changing demands of our customers.

InDue ~~addition, prior~~ to ~~fiscal~~the ~~2001~~rapid ~~and~~changes ~~during~~in ~~fiscal 2004~~technology, ~~our operating~~we ~~results~~may ~~were~~not ~~subject~~predict totechnological ~~seasonal~~trends ~~factors.~~in Wethe ~~historically~~communications ~~had~~equipment ~~stronger~~market ~~demand for our products and services in our fourth fiscal quarter ending October 31~~accurately. ~~Conversely, we~~New ~~typically~~product ~~experienced~~development ~~weaker~~often ~~demand~~requires ~~for our products and~~long-term ~~services~~forecasting inof ~~the~~market ~~first fiscal quarter~~trends, ~~primarily~~development asand aimplementation ~~result~~ of ~~the~~ ~~number~~new oftechnologies ~~holidays~~and inprocesses ~~late November, December~~ and ~~early~~ ~~January,~~substantial ~~the development of annual~~ capital ~~budgets~~commitments. byWe ~~our customers,~~do asnot ~~well~~know aswhether anew ~~general~~products ~~industry~~and ~~slowdown,~~services ~~during that period. In our fourth fiscal quarter of 2005,~~ we ~~did~~develop ~~not~~will ~~experience~~gain ~~this~~market ~~historical~~acceptance ~~pattern~~or ofresult ~~seasonality,~~in ~~primarily because~~profitable ~~of less predictable spending patterns for our FTTX and wireless products~~sales.

15 Many companies with whom we may compete have greater engineering and product development resources than us. Although we expect to continue to invest substantial resources in product development activities, our efforts to achieve and maintain profitability will require us to be selective and focused with our research and development expenditures. If we fail to anticipate or respond in a cost-effective and timely manner to technological developments, changes in industry standards or customer requirements, or if we experience any significant delays in product development or introduction, our business, operating results and financial condition could be affected adversely.

~~The regulatory environment in which our customers operate is changing.~~14

AlthoughTable our business is not subject to a significant amount of direct regulation, the communications service industry in which our customers operate is subject to significant and evolving federal and state regulation in the United States as well as regulation in other countries. The United States Telecommunications Act of 1996 (the “Act”) lifted certain restrictions on the ability of companies, including the major telephone companies and other ADC customers, to compete with one another. The Act also made other significant changes in the regulation of the telecommunications industry. These changes generally increased our opportunities to provide solutions for our customers’ Internet, data, video and voice needs. The established telecommunications providers have stated that some of these changes have diminished the profitability of additional investments made by them in their networks, which reduces their demand for our products. Recently, however, the Federal Communications Commission (“FCC”) ended the practice of forced “line-sharing”, which means that major telephone companies are no longer legally mandated to lease space to DSL resellers. This ruling also included language allowing major telephone companies to maintain sole ownership of newly built networks that include fiber deployment (i.e., FTTX). While it is anticipated that this ruling will benefit us, there can be no assurance that it will have any impact on sales of our products. Contents

~~Additional~~Our ~~regulatory~~cost ~~changes~~reduction ~~affecting~~initiatives ~~the~~may ~~communications industry~~not ~~are~~result ~~anticipated both~~ in ~~the~~anticipated ~~United States~~savings ~~and internationally.~~or Amore ~~European~~efficient ~~Union directive on waste electrical~~operations and ~~electronic~~may ~~equipment~~be ~~(“WEEE”)~~disruptive and the restriction of hazardous substances (“RoHS”) in such equipment is in the process of being implemented in member states. The directive sets a framework for producers’ obligations in relation to ~~manufacturing~~our ~~(including the amounts of named hazardous substances contained in products sold), labeling, and treatment, recovery and recycling of electronic products in the European Union~~operations. ~~We have established policies and procedures to~~ ~~comply with these directives as they are implemented in various member states. Detailed regulations on practices and procedures related to WEEE and RoHS are evolving in member states.~~

~~These~~Over ~~changes~~the ~~could~~past ~~affect~~several ~~our~~years, ~~customers~~we have implemented, and ~~alter~~are ~~demand~~continuing ~~for our~~to ~~products.~~implement, ~~Recently~~significant cost ~~announced~~reduction ormeasures. ~~future~~These ~~changes~~measures ~~could~~have ~~also come~~been ~~under~~taken ~~legal~~in ~~challenge~~an ~~and~~effort beto ~~altered,~~improve ~~thereby~~our ~~reversing~~levels ~~the~~of ~~effect~~profitability. ofWe ~~such~~have ~~regulations~~incurred orsignificant ~~changes~~restructuring and ~~the~~impairment ~~impact~~charges ~~we expected.~~in Inconnection ~~addition,~~with these ~~competition~~cost inreduction ~~our~~efforts. ~~markets~~If ~~could intensify~~these asmeasures ~~the~~are ~~result~~not offully ~~changes~~completed ~~to existing~~ or ~~new regulations.~~are ~~Accordingly,~~not ~~changes~~completed in ~~the regulatory environment~~a ~~could~~timely ~~adversely~~fashion, ~~affect~~we ~~our~~may ~~business~~not ~~and~~realize ~~results~~their offull ~~operations~~potential benefit.

~~Customer~~ In ~~payment~~addition, ~~defaults~~the ~~could~~efforts ~~have~~to ancut ~~adverse~~costs ~~effect~~may onnot generate the savings and improvements in our operating ~~financial~~margins ~~condition~~and profitability we anticipate and ~~results~~such efforts may be disruptive to our operations. For example, cost savings measures may yield unanticipated consequences, such as attrition beyond planned reductions in force or increased difficulties in our day-to-day operations due to a weakening of employee morale. Although we believe it is necessary to reduce the cost of our operations to improve our performance, these initiatives may preclude us from making potentially significant expenditures that could improve our product offerings and competitiveness over the longer term.

AsWe aare ~~result~~becoming ofincreasingly ~~adverse~~dependent ~~conditions~~on inspecific ~~the~~network ~~communications~~expansion ~~market, some~~projects ofundertaken by our customers, ~~have~~which ~~experienced~~are ~~and~~subject ~~may continue~~ to ~~experience~~ ~~serious~~intense ~~financial~~competition ~~difficulties.~~and ~~In some cases these difficulties have resulted or may~~ result in ~~bankruptcy~~sales ~~filings or cessation of operations~~volatility. ~~If customers experiencing financial~~ problems default on paying amounts owed to us, we may not be able to collect these amounts or recognize expected revenue. It is possible those customers from whom we expect to derive substantial revenue will default or that the level of defaults will increase. Any material payment defaults by our customers would have an adverse effect on our results of operations and financial condition.

~~Some~~Our ofbusiness ~~our~~increasingly ~~competitors~~is ~~engage~~focused inon ~~financing~~the ~~transactions~~sale ~~with some~~ of ~~their~~products, ~~customers~~including ~~for~~our ~~the~~FTTX ~~purchase~~products ofand wireless ~~equipment.~~coverage Toand ~~remain competitive~~capacity solutions, itto ~~may~~support ~~become~~customer ~~necessary~~initiatives ~~for us~~ to ~~offer~~expand ~~similar~~broadband and ~~financing~~coverage ~~arrangements~~capabilities in their networks. IfThese ~~such~~products ~~financings~~increasingly ~~occur,~~have itbeen ~~would~~deployed be by our customers ~~intent~~outside their central offices in connection with specific capital projects to ~~sell~~increase network ~~all~~capabilities. orThere acan ~~portion~~be ofno assurance that these ~~commitments~~customer ~~and~~initiatives will continue going ~~outstanding~~forward ~~receivables~~or tothat ~~third~~we ~~parties.~~will Incontinue to be awarded the ~~past,~~work we historically have been awarded. In ~~sold~~addition, ~~some~~there ~~receivables~~can ~~with~~be ~~recourse~~no ~~and~~assurance ~~have~~that ~~had~~as tosignificant ~~compensate the~~projects ~~purchaser~~are ~~for~~completed, ~~the~~new ~~related~~projects ~~losses~~will be available to replace them.

~~Conditions~~ Because inof ~~global~~these ~~markets~~project-specific ~~could~~purchases ~~affect~~by our ~~operations~~customers, the short-term demand for our products can fluctuate significantly and our ability to forecast sales accurately from quarter to quarter can be negatively impacted. This fluctuation can be further affected by the long sales cycles necessary to obtain contracts to supply equipment for these projects. These long sales cycles may result in significant effort expended with no resulting sales or sales that are not made in the anticipated quarter or year.

~~Our~~In ~~sales outside the United States accounted for approximately 45.4%~~addition, ~~39.5%,~~competition ~~and~~among ~~24.8%~~suppliers ofwith ~~our~~respect ~~net~~to ~~sales~~these incapital ~~fiscal~~projects ~~2005,~~can ~~2004,~~be ~~and 2003~~intense, ~~respectively.~~particularly Webecause ~~expect non-U.S. sales~~these ~~to remain~~projects aoften ~~significant~~utilize ~~percentage~~new ofproducts ~~net~~that ~~sales~~were innot ~~the future. In~~used ~~addition~~previously ~~to sales and distribution~~ in ~~numerous~~customers’ ~~countries,~~networks. weWe ~~own or~~cannot ~~lease~~give ~~operations~~any ~~located~~assurance inthat ~~Australia,~~these ~~Austria,~~capital ~~Belgium,~~projects will ~~Brazil,~~continue ~~Canada,~~or ~~Chile,~~that ~~France,~~our ~~Germany,~~products ~~Hungary,~~will ~~India, Indonesia,~~be ~~Ireland,~~selected ~~Italy,~~for ~~Japan,~~these ~~Malaysia,~~equipment ~~Mexico, New Zealand,~~deployments. ~~Norway, Philippines, Puerto Rico,~~

16Further consolidation among our customers may result in the loss of some customers and may reduce revenue during the pendency of business combinations and related integration activities.

~~Russia,~~ Consolidation ~~Singapore,~~among ~~South Africa,~~our ~~South~~customers ~~Korea,~~may ~~Spain, Sweden,~~continue ~~Taiwan,~~in ~~Thailand,~~order ~~the~~for ~~United~~them ~~Arab~~to ~~Emirates,~~increase ~~the~~market ~~United~~share and ~~Kingdom,~~achieve ~~the~~greater ~~United~~economies ~~States,~~of ~~Venezuela~~scale. ~~and~~Consolidation ~~Vietnam.~~has ~~Due~~impacted toour business as our customers focus ~~non-U.S. sales~~on completing business combinations and integrating their operations. In certain instances, ~~our non~~customers integrating large-Uscale acquisitions have reduced their purchases of network equipment during the integration period.~~S. operations~~ For example, we ~~are~~following ~~subject~~the tomerger of SBC Communications with AT&T and the ~~risks~~merger of ~~conducting~~AT&T ~~business~~with ~~globally.~~BellSouth, the combined companies initially deferred spending on ~~These~~certain ~~risks~~network ~~include~~equipment purchases, ~~without~~which ~~limitation:~~resulted in lower product sales by ADC to these companies for a period of time.

• The ~~local~~impact ~~economic~~of ~~and~~significant ~~market~~mergers ~~conditions;~~among •our ~~political~~customers ~~and~~on ~~economic~~our ~~instability;~~business •is ~~unexpected~~likely ~~changes~~to inbe orunclear until ~~impositions~~sometime ofafter ~~legislative~~such ortransactions ~~regulatory~~are ~~requirements;~~completed. •After ~~fluctuations~~a inconsolidation ~~foreign~~occurs, ~~currency~~a ~~exchange~~customer ~~rates;~~may choose •to ~~tariffs~~reduce ~~and~~the ~~other~~number ~~barriers~~of ~~and~~vendors ~~restrictions;~~from •which ~~longer~~it ~~payment~~purchases ~~cycles;~~equipment •and ~~difficulties~~may inchoose ~~enforcing~~one ~~intellectual~~of ~~property~~our competitors ~~and~~as ~~contract~~its ~~rights;~~preferred •vendor. ~~greater~~There ~~difficulty~~can inbe ~~accounts~~no ~~receivable~~assurance ~~collection;~~that •we ~~potentially~~will ~~adverse~~continue ~~taxes;~~to ~~and~~supply equipment •to the ~~burdens~~surviving ofcommunications ~~complying~~service ~~with~~provider after a ~~variety~~business ofcombination ~~non-U~~is completed.~~S. laws and telecommunications standards.~~

WeOur ~~also~~Professional ~~are~~Services ~~subject~~business tois ~~general~~exposed ~~geopolitical~~to ~~and environmental~~ risks, ~~such~~associated aswith ~~terrorism,~~a ~~political~~highly ~~and economic instability,~~concentrated ~~changes~~customer ~~in the costs of key resources such as oil, changes in diplomatic or trade relationships and natural disasters~~base. ~~Economic conditions in many of the non-U.S. markets in which we do business represent significant risks to us.~~

Our Professional Services business is heavily dependent on sales to AT&T. If, over the Welong-term, ~~cannot~~AT&T ~~predict~~reduces ~~whether~~the demand for our ~~sales~~services, ~~and~~we ~~business~~may ~~operations~~not be successful in finding new ~~these~~customers ~~markets~~to ~~will~~replace bethe ~~affected~~lost ~~adversely~~sales for a period of time. Therefore, sales by ~~these~~our ~~conditions~~Professional Services business could decline substantially and have an adverse effect on our business and operating results.

15 Instability in non-U.S. markets, which we believe is most likely to occur in the Middle East, Asia and Latin America, could have a negative impact on our business, financial condition and operating results. The wars in Afghanistan and Iraq and other turmoil in the Middle East and the global war on terror also may have negative effects on the operating results of some of our businesses. In addition to the effect of global economic instability on non-U.S. sales, sales to United States customers having significant non-U.S. operations could be impacted negatively by these conditions.

OurTable intellectualof property rights may not be adequate to protect our business.Contents

~~Our~~Possible ~~future~~consolidation ~~success~~among ~~depends in part upon~~ our proprietary technology. Although we attempt to protect our proprietary technology through patents, trademarks, copyrights and trade secrets, these protections are limited. Accordingly, we cannot predict whether such protection will be adequate, or whether our competitors ~~can~~could ~~develop~~result ~~similar technology independently without violating our proprietary rights. In addition, rights that may be granted under any patent application~~ in ~~the~~a ~~future~~loss ~~may not provide competitive advantages to us. Intellectual property protection in foreign jurisdictions may be limited or unavailable. In addition, many~~ of ~~our~~sales ~~competitors~~and ~~have substantially~~profitability ~~larger portfolios of patents~~ and ~~other~~ ~~intellectual~~negatively ~~property~~impact ~~rights~~our ~~than~~competitive usposition.

AsIn ~~the~~recent ~~competition~~years, ina ~~the~~number ~~communications equipment industry intensifies and the functionality~~ of ~~the~~our ~~products~~competitors ~~further overlaps,~~have weengaged ~~believe~~in ~~that~~business ~~companies are becoming increasingly~~combination ~~subject to infringement claims~~transactions. We ~~have received and~~ may ~~continue~~ tosee ~~receive~~continued ~~notices~~consolidation ~~from~~among ~~third~~communication ~~parties,~~equipment ~~including~~vendors and some of ~~our competitors, claiming that we are infringing third-party~~of ~~patents~~the ortransactions ~~other~~may ~~proprietary~~be ~~rights~~significant. WeThese ~~have~~business ~~also~~combinations ~~asserted certain~~may ofresult ~~our patents against third parties. We cannot predict whether we will prevail~~ in ~~any~~our ~~litigation over third-party~~competitors ~~claims,~~becoming orfinancially ~~whether~~stronger ~~we will be able to license any valid~~ and ~~infringed~~ ~~patents~~obtaining onbroader ~~commercially~~product ~~reasonable~~portfolios ~~terms~~than us. ItAs isa result, ~~possible~~consolidation ~~that unfavorable resolution of such litigation~~ could ~~have~~ aincrease ~~material~~the ~~adverse~~resources ~~effect~~of on our ~~business,~~competitors ~~results~~and ~~of operations~~provide orthem ~~financial~~with ~~condition~~competitive advantages. ~~Any~~In ofturn ~~these~~this ~~claims, whether with or without merit,~~ could ~~result~~adversely inimpact ~~costly litigation, divert~~ our ~~management’s~~product ~~time,~~sales ~~attention~~ and ~~resources, delay~~ our ~~product~~ ~~shipments or require us to enter into royalty or~~profitability. ~~licensing agreements, which~~

17We may not successfully close strategic acquisitions and, if these acquisitions are completed, we may have difficulty integrating the acquired businesses with our existing operations.

~~could~~ If beour ~~expensive.~~proposed Aacquisition ~~third~~by ~~party~~Tyco ~~may~~Electronics ~~not~~Ltd. beis ~~willing~~not tocompleted ~~enter into~~for aany ~~royalty or licensing agreement on acceptable terms~~reason, ifin atthe ~~all.~~future Ifwe amay ~~claim~~acquire ofcompanies and/or product ~~infringement~~lines ~~against~~that uswe isbelieve ~~successful and~~are wealigned ~~fail~~with toour ~~obtain~~strategic focus. aThe ~~license~~significant oreffort ~~develop~~and ormanagement ~~license non-infringing~~attention ~~technology,~~invested ~~our~~in ~~business,~~a ~~financial~~strategic ~~condition~~acquisition ~~and~~may not ~~operating~~result ~~results~~in ~~could~~a becompleted ~~affected adversely~~transaction.

The impact of future acquisitions on our business, operating results and financial condition is not known at this time. In the case of businesses we may acquire in the future, we may have difficulty assimilating these businesses and their products, services, technologies and personnel into our operations. These difficulties could disrupt our ongoing business, distract our management and workforce, increase our expenses and adversely affect our operating results and financial condition. We ~~are~~may ~~dependent~~also ~~upon~~acquire unanticipated liabilities. Also, we may not be able to retain key management ~~personnel~~and other critical employees after an acquisition. In addition to these risks, we may not realize all of the anticipated benefits of these acquisitions.

~~Like~~If ~~all~~we ~~technology~~seek ~~companies,~~to ~~our~~secure ~~success~~other isfinancing ~~dependent~~we onmay ~~the efforts~~not ~~and~~be ~~abilities~~able ~~of our employees. Our ability~~ to ~~attract, retain~~obtain ~~and~~it ~~motivate~~on ~~skilled~~acceptable ~~employees~~terms ~~is critical to our success. In addition~~and, ~~because we may acquire one or more~~given ~~businesses in~~ the ~~future,~~current ~~our~~market ~~success will depend~~conditions, inobtaining ~~part,~~financing ~~upon our~~on ~~ability~~any toterms ~~retain~~may ~~and~~not ~~integrate~~be ~~our own personnel with personnel from acquired entities who are necessary to the continued success or the successful integration of the acquired businesses~~possible.

We believe our current cash, cash equivalents, and short-term investment holdings as well as ~~Our~~expected ~~recent~~levels ~~initiatives~~of future cash generated from operations provide adequate resources to ~~focus~~fund ongoing operating requirements. If our ~~business~~estimates onare ~~core~~incorrect ~~operations~~ and ~~products~~we byare ~~restructuring~~unable ~~and~~to ~~streamlining~~generate sufficient cash flows from operations, ~~including~~ ~~substantial~~we ~~reductions~~may inneed ~~our~~to ~~workforce,~~raise ~~have~~new ~~created uncertainty~~financing. onIn addition, if the ~~part~~costs of our strategic ~~remaining~~acquisition ~~employees~~opportunities ~~regarding future~~exceed ~~employment~~our ~~with~~existing ~~us.~~resources, ~~This~~we ~~uncertainty,~~may ~~together~~be ~~with~~required ~~our~~to seek ~~recent~~additional ~~past~~capital. ~~history~~If ofwe ~~operating~~determine ~~losses~~it ~~and~~is ~~general~~necessary ~~industry~~to seek other additional funding for any ~~uncertainty~~reason, we may ~~have~~not anbe ~~adverse~~able ~~effect~~to onobtain ~~our~~such ~~ability~~funding or, if such funding is available, to ~~retain~~obtain it on acceptable terms. This possibility is heightened by the economic downturn and ~~attract~~its ~~key~~adverse ~~personnel~~effect on credit markets.

~~Internal~~ If ~~Controls.~~we are unable to obtain capital on commercially reasonable terms it could:

~~Although~~• wereduce ~~have~~funds ~~now~~available ~~completed~~to ~~the~~us ~~documentation and testing of the effectiveness of our internal control over financial reporting~~ for ~~fiscal~~purposes ~~2005,~~such as ~~required~~working ~~by Section 404 of the Sarbanes-Oxley Act of 2002~~capital, wecapital ~~expect we will have to incur continuing costs~~expenditures, ~~including~~research ~~increased accounting fees~~ and ~~increased~~ ~~staffing levels~~development, instrategic ~~order~~acquisitions toand ~~maintain~~other ~~compliance~~general ~~with that~~corporate ~~section~~purposes; of• ~~the~~restrict ~~Sarbanes-Oxley Act. Further, if we complete acquisitions in the future,~~ our ability to ~~integrate~~introduce ~~operations of~~new ~~the~~products ~~acquired company could impact our compliance with Section 404. In the future, if we fail to complete the Sarbanes-Oxley 404 evaluation in a timely manner,~~ or ifexploit ~~our independent~~new ~~registered~~business ~~public~~opportunities; ~~accounting~~• ~~firm~~increase ~~cannot attest in a timely manner to~~ our ~~evaluation~~vulnerability or to ~~the~~economic ~~efficacy~~downturns ~~of our internal controls, we could be subject to regulatory scrutiny~~ and acompetitive ~~loss~~pressures ~~of public confidence~~ in ~~our~~the ~~internal~~markets ~~controls. In addition, any failure to implement required new or improved controls, or difficulties encountered~~ in ~~their~~which ~~implementation, could~~we ~~harm~~operate; ~~our~~and ~~operating~~• ~~results~~place ~~or cause~~ us toat ~~fail~~a tocompetitive ~~meet our reporting obligations~~disadvantage.

~~Integration~~We ofmay ~~Key~~complete ~~Finance~~transactions, ~~Employees~~undertake restructuring initiatives or face other circumstances in the future that will result in restructuring or impairment charges.

InFrom ~~recent~~time ~~weeks~~to time, we have ~~hired~~undertaken ~~many~~actions ~~new~~that ~~employees~~have resulted in ~~our~~restructuring charges. We ~~internal~~may ~~finance~~take ~~and~~such ~~accounting~~actions ~~staff.~~in ~~Until~~the ~~such~~future ~~personnel~~either in response to slowdowns or shifts in market demand for ~~become~~our ~~familiar~~products and services or in connection with other initiatives to improve our ~~operations~~operating efficiency. In addition, if the fair value of any of our ~~ability~~long-lived toassets ~~maintain~~decreases as a result of ~~effective~~an ~~internal~~economic ~~controls~~slowdown, ~~over~~a downturn in the markets where we sell products and services or a downturn in our financial ~~reporting~~performance ~~could~~and/or future outlook, we may be required to take an impairment charge ~~impaired~~on such assets. Restructuring and impairment charges could have a negative impact on our results of operations and financial position.

~~Product~~The ~~defects~~regulatory ~~could~~environment ~~cause~~in uswhich towe ~~lose~~and our customers ~~and~~operate ~~revenue~~is orchanging toand ~~incur~~those ~~unexpected~~changes may ~~expenses~~impact our business.

IfAlthough our ~~products~~business dois not ~~meet~~subject ~~our~~to ~~customers’~~substantial ~~performance requirements~~direct governmental regulation, ~~our~~the communications ~~customer~~services ~~relationships~~provider ~~may~~industry ~~suffer.~~in ~~Also,~~which our customers operate is subject to significant ~~products~~and ~~may~~changing ~~contain~~federal ~~defects.~~and ~~Any~~state ~~failure~~regulation orin ~~poor~~the ~~performance~~United ofStates and in other countries. Regulatory changes could alter demand for our products and could ~~result~~affect ~~in:~~our business and results of operations adversely.

• delayed market acceptance of our products; • delayed product shipments; • unexpected expenses and diversion of resources to replace defective products or identify and correct the source of errors; • damage to our reputation and our customer relationships; • delayed recognition of sales or reduced sales; and • product liability claims or other claims for damages that may be caused by any product defects or performance failures.16

18 Table of Contents

~~Our~~In ~~products~~October 2009, ~~are~~the ~~often~~FCC ~~critical~~voted to ~~the~~begin ~~performance~~developing ofregulations related to “Net Neutrality” ~~communications~~(i.e., ~~systems~~open Internet). ~~Many~~While ofit ~~our~~is ~~supply~~unclear ~~agreements~~whether ~~contain limited~~Congress ~~warranty~~will, ~~provisions.~~in Iffact, ~~these~~enact ~~contractual~~any ~~limitations~~legislation ~~are~~forbidding ~~unenforceable~~Internet inservice aproviders ~~particular~~from ~~jurisdiction~~restricting oraccess ifto welawful ~~are~~sites, applications and ~~exposed~~services, tolegislation ~~product~~on ~~liability~~“Net ~~claims~~Neutrality” ~~that~~may ~~are~~adversely ~~not~~impact ~~covered~~our bybusiness. Many of our largest ~~insurance~~customers would be subject to the legislation, awhich ~~successful~~may ~~claim~~change ~~could~~how ~~harm~~they ~~our~~operate ~~business~~their businesses.

We The ~~may~~regulatory ~~encounter~~environment ~~difficulties~~for ~~obtaining~~communication ~~raw~~services ~~materials~~providers ~~and~~is ~~supplies~~also ~~needed~~changing in other countries. In many countries, regulators are considering whether service providers should be required to ~~make~~provide ~~our~~access ~~products~~to their networks by competitors. For example, this issue is currently being debated in Germany and Australia. As a result, the ~~prices~~FTTX ofinitiatives in these ~~materials~~countries ~~and~~have been ~~supplies~~delayed, ~~are~~which ~~subject~~has correspondingly delayed any potential sales by us related to ~~fluctuation~~these initiatives.

~~Our~~Additional ~~ability~~regulatory tochanges ~~produce~~affecting ~~our products is dependent upon~~ the ~~availability~~ ofcommunications ~~certain~~industry ~~raw~~have ~~materials~~occurred and ~~supplies. The~~are ~~availability~~anticipated ofto ~~these~~occur ~~raw~~in ~~materials~~the ~~and~~future. ~~supplies~~For isexample, ~~subject~~a ~~to market~~European ~~forces~~Union ~~beyond~~(“EU”) ~~our~~directive ~~control.~~relating ~~From time~~ to ~~time, there may~~the ~~not~~restriction ~~be sufficient quantities~~ of ~~raw~~hazardous ~~materials~~substances ~~and~~(“RoHS”) ~~supplies~~ in ~~the~~ ~~marketplace~~electrical toand ~~meet~~electronic ~~the~~equipment ~~customer~~and ~~demand~~a ~~for our products. In~~directive ~~addition,~~relating ~~the costs~~ to ~~obtain~~waste ~~these~~electrical ~~raw materials~~ and ~~supplies are~~electronic ~~subject~~equipment to(“WEEE”) ~~price~~have ~~fluctuations~~been ~~because~~and ofare ~~global~~being ~~market~~implemented ~~demands.~~in ~~Further,~~EU ~~some~~member ~~raw~~states. ~~materials~~Among orother ~~supplies may be subject to regulatory actions~~things, ~~which may affect available supplies. Many companies utilize~~ the ~~same~~RoHS ~~raw~~directive ~~materials~~restricts ~~and supplies in~~ the ~~production~~ ~~of their products as we~~ use inof ~~our~~certain ~~products.~~hazardous ~~Companies~~substances ~~with~~in ~~more~~the ~~resources~~manufacture ~~than~~of ~~our~~electrical ~~own~~and ~~may~~electronic ~~have~~equipment ~~a competitive advantage in obtaining raw materials~~ and ~~supplies due~~the toWEEE ~~greater purchasing power. Reduced supply and higher~~directive ~~prices~~requires producers of ~~raw~~electrical ~~materials~~goods ~~and~~to ~~supplies~~be ~~may~~responsible ~~affect~~for ~~our~~the ~~business~~collection, ~~operating~~ ~~results~~recycling, treatment and ~~financial~~disposal ~~condition~~of ~~adversely~~these goods.

We In ~~rely~~addition, ~~upon~~a regulation regarding the registration, authorization and restriction of chemical substances in industrial products (“REACH”) became effective in the EU in 2007. Over time this regulation, among other items, may require us to substitute certain chemicals contained in our products ~~contract~~with ~~manufacturing~~substances ~~relationships~~the EU considers less dangerous.

WeSimilar laws to RoHS and WEEE have ~~significant~~been ~~reliance~~implemented onin ~~contract~~other ~~manufacturers~~countries, such as China and may be in-acted in other nations. Our inability or failure to ~~make~~comply with the REACH, RoHS and WEEE ~~certain~~directives, or similar laws and regulations that have been and may be implemented in other countries, could result in reduced sales of our products, onsubstantial ~~our~~product ~~behalf.~~inventory Ifwrite-offs, reputational ~~these~~damage, ~~contract manufacturers~~monetary dopenalties ~~not~~and ~~fulfill~~other ~~their~~sanctions. ~~obligations~~Further, the evolution and frequent changes to usthe REACH, orRoHS ifand weWEEE directives make strict compliance particularly challenging and dothe ~~not~~ongoing ~~properly~~costs ~~manage~~associated with complying with these ~~relationships~~directives, ~~our~~or ~~existing customer~~similar ~~relationships~~laws and regulations, may ~~suffer.~~affect Weour ~~may~~business ~~outsource~~and ~~additional functions~~results inof ~~the~~operation ~~future~~adversely.

WeConditions ~~may~~in ~~encounter~~global ~~litigation~~markets ~~that~~could ~~has~~adversely aaffect ~~material impact on~~ our ~~business~~operations.

WeOur ~~are~~sales aoutside ~~party~~the toUnited ~~various~~States ~~lawsuits~~accounted for 39.4%, ~~proceedings~~40.6% and ~~claims arising~~41.0% ~~in the ordinary course~~ of ~~business~~our ornet ~~otherwise.~~sales ~~Many of~~in ~~these~~fiscal ~~disputes~~2010, ~~may~~2009 beand ~~resolved~~2008, ~~amicably without resort to formal litigation~~respectively. ~~The~~We ~~amount~~expect ofsales ~~monetary~~outside ~~liability resulting from~~ the ~~ultimate~~ ~~resolution~~United ofStates ~~these~~to ~~matters~~remain ~~cannot be determined at~~a ~~this~~significant ~~time.~~percentage As of ~~October 31,~~net ~~2005,~~sales wein ~~had~~the ~~recorded approximately $8~~future.~~4 million~~ inWe ~~loss~~conduct ~~reserves~~business ~~for~~in ~~certain~~many ~~of these~~countries ~~matters.~~around ~~In light of~~ the world ~~reserves~~including: weAustralia, ~~have~~Austria, ~~recorded~~Belgium, ~~at this~~Brazil, ~~time~~Chile, weChina, ~~believe~~Czech ~~the~~Republic, ~~ultimate resolution of these lawsuits~~France, ~~proceedings~~Germany, ~~and~~Hong ~~claims~~Kong, ~~will~~Hungary, ~~not~~India, ~~have~~Indonesia, aItaly, ~~material~~Japan, ~~adverse~~Malaysia, ~~impact on our business~~Mexico, ~~results~~New ~~of operations or financial condition.~~Zealand, ~~Because~~Philippines, ofRussia, ~~the~~Saudi ~~uncertainty~~Arabia, ~~inherent~~Singapore, inSouth ~~litigation~~Africa, itSouth ~~is possible~~Korea, ~~that~~Spain, ~~unfavorable resolutions of these lawsuits~~Thailand, ~~proceedings~~ ~~and claims could exceed~~ the ~~amount currently~~ ~~reserved~~United ~~and~~Arab ~~could~~Emirates, ~~have~~the aUnited ~~material adverse affect on our business~~Kingdom, ~~results~~Venezuela ofand ~~operations or financial condition~~Vietnam.

~~We are subject to risks associated with changes in commodity prices, interest rates, security prices, and foreign currency exchange rates.~~17

WeTable face market risks from changes in certain commodity prices, security prices and interest rates. Market fluctuations could affect our results of operations and financial condition adversely. At times, we reduce this risk through the use of derivative financial instruments. However, we do not enter into derivative instruments for the purpose of speculation. Contents

~~Also,~~Due ~~we are exposed~~ to ~~market~~our ~~risks~~sales ~~from~~and ~~changes~~other inoperations ~~foreign currency~~outside ~~exchange~~the ~~rates.~~United ~~From time to time~~States, we hedge our foreign currency exchange risk. The objective of this program is to protect our net monetary assets and liabilities in non-functional currencies from fluctuations due to movements in foreign currency exchange rates. We attempt to minimize exposure to currencies in which hedging instruments are ~~unavailable~~subject ~~or prohibitively expensive by managing our operating activities and net assets position. As a result of our increased international exposure due~~ to the ~~KRONE acquisition, we may expand our foreign~~risks ~~currency~~of ~~hedging~~conducting ~~program~~business ~~in the future~~globally. AtThese ~~October 31~~risks include, ~~2005,~~ ~~the~~among ~~principal currency for which we have implemented a~~others: ~~hedging strategy is the Australian dollar.~~

19 • local economic and market conditions; • political and economic instability; • unexpected changes in or impositions of legislative or regulatory requirements; • compliance with the Foreign Corrupt Practices Act and various laws in countries in which we are doing business; • fluctuations in foreign currency exchange rates which can be significant; • requirements to consult with or obtain the approval of works councils or other labor organizations to complete business initiatives; • tariffs and other barriers and restrictions; • risk of foreign governments nationalizing our manufacturing operations; • foreign governments’ efforts to control their local currency and economies in general, resulting in difficulties in exchanging currency or transferring funds to and from such countries; • longer payment cycles; • difficulties enforcing intellectual property and contract rights; • greater difficulty in accounts receivable collection; • potentially adverse taxes and export and import requirements; and • the burdens of complying with a variety of non-U.S. laws and telecommunications standards.

~~Risks~~ Our ~~Related~~business is also subject to ~~Our~~general ~~Common~~geopolitical, ~~Stock~~economic and environmental risks, such as terrorism, political and economic instability, changes in the costs of key resources such as crude oil, changes in diplomatic or trade relationships, natural disasters, pandemic illnesses and other possible disruptive events.

~~Our~~ Instability ~~stock~~created ~~price~~by isany ~~volatile~~of these risks to countries or markets in which we conduct business could have a negative impact on our sales and business operations in these areas. For instance, we operate a significant manufacturing facility in Juarez, Mexico whose operations might be difficult to replicate in other locations in the event an increase in the political and social instability in that city were to cause a disruption to our local operations. The military engagements in Afghanistan and Iraq and other turmoil in the Middle East and the global initiatives against terror also may have negative effects on our business operations. We cannot predict whether these unstable conditions will affect our business and results of operations adversely.

~~Based~~We ~~on the trading history of our common stock and the nature of the market for publicly traded securities of companies in our industry, we believe that some factors have caused and~~ are ~~likely~~ tosubject ~~continue~~ to ~~cause~~special ~~the~~risks ~~market~~relating ~~price of our common stock~~ to ~~fluctuate~~doing ~~substantially.~~business ~~These~~in ~~fluctuations~~China ~~could~~and ~~occur~~other ~~from day-to-day~~developing ~~or over a longer period of time~~nations. ~~The factors that may cause such~~ ~~fluctuations include, without limitation:~~

• Our ~~announcements~~operations ofin ~~new~~China ~~products~~ and ~~services~~other bydeveloping usnations orare ~~our~~subject ~~competitors;~~to •significant ~~quarterly~~political, economic ~~fluctuations~~and legal uncertainties. Changes in ~~our~~laws ~~financial~~and ~~results~~regulations or ~~the~~their ~~financial~~interpretation, ~~results~~or the imposition of ~~our~~confiscatory ~~competitors~~taxation, orrestrictions ~~our~~on ~~customers;~~currency •conversion, ~~customer~~imports ~~contract~~and ~~awards~~sources toof supply, usdevaluations of currency or ~~our~~the ~~competitors;~~nationalization •or ~~increased~~other ~~competition~~expropriation ~~with~~of ~~our~~private enterprises ~~competitors~~could oradversely ~~among~~affect our ~~customers;~~operations •in ~~consolidation~~China ~~among~~and ~~our~~other ~~competitors~~developing ornations. ~~customers;~~In •China, the ~~disputes~~current ~~concerning~~government ~~intellectual~~has ~~property~~been ~~rights;~~pursuing •economic ~~the~~reform ~~financial~~policies ~~health~~that ofencourage ~~ADC,~~private ~~our~~economic activity ~~competitors~~and orgreater ~~our~~economic ~~customers;~~decentralization. •However, ~~developments~~there incan ~~telecommunications~~be ~~regulations;~~no •assurance ~~general~~that ~~conditions in~~ the government ~~communications~~will ~~equipment~~continue ~~industry;~~to •pursue ~~general~~these ~~economic~~policies, ~~conditions~~especially in the ~~U.S.~~event orof ~~internationally;~~a ~~and~~change •in leadership, ~~rumors~~social, political or ~~speculation~~economic ~~regarding~~disruption ~~ADC’s~~or ~~future~~other ~~business~~circumstances ~~results~~affecting China’s social, political and ~~actions~~economic environment.

18 In addition, stocks of companies in our industry in the past have experienced significant price and volume fluctuations that are often unrelated to the operating performance of such companies. This market volatility may adversely affect the market price of our common stock.

WeTable haveof not in the past and do not intend in the foreseeable future to pay cash dividends on our common stock.Contents

Although not permitted under the law in most nations, corruption, extortion, bribery, payoffs and other fraudulent practices occur from time to time in developing nations. We ~~have~~must comply with U.S. laws prohibiting corrupt business practices outside the United States. Foreign companies, including some of our competitors, are not subject to these laws. If our competitors in ~~the~~developing nations ~~past~~engage in these practices, we may be at a competitive disadvantage. We maintain a business conduct program to prevent, deter and ~~currently~~detect doviolations ~~not~~of ~~pay~~law ~~any~~in ~~cash~~the conduct of business ~~dividends~~throughout onthe world. We conduct periodic reviews of our ~~common~~business ~~stock~~practices in China and doother developing ~~not~~nations ~~anticipate~~and ~~paying~~train ~~any cash~~our ~~dividends~~personnel in these areas on appropriate ethical and legal business standards. However, a risk remains that our ~~common~~employees ~~stock~~will engage in ~~the~~activities ~~foreseeable~~that ~~future~~violate laws or our corporate policies. WeThis is particularly true in instances in which new employees we hire or ~~intend~~the employees of a company we may acquire may not previously have been accustomed to ~~retain~~operating under ~~future~~similar ~~earnings~~standards. In the event an employee violates applicable laws pertaining to sales practices, ifaccounting ~~any~~standards, tofacility ~~finance~~operations ~~our~~or other business or operational requirements, ~~operations~~we may face substantial penalties, and ~~for~~our ~~general~~business ~~corporate~~in ~~purposes~~China and other developing nations could be affected adversely.

~~Anti-takeover~~Our ~~provisions~~intellectual inproperty ~~our charter documents, our shareowner~~ rights ~~plan~~may ~~and~~not ~~Minnesota~~be ~~law~~adequate ~~could~~to ~~prevent~~protect ~~or delay a change in control of~~ our ~~company~~business.

~~Provisions~~Our offuture success depends in part upon our ~~articles~~proprietary oftechnology. ~~incorporation~~Although ~~and~~we ~~bylaws,~~attempt ~~our~~to ~~shareowner~~protect ~~rights~~our ~~plan~~proprietary ~~(also~~technology ~~known~~through aspatents, atrademarks, ~~“poison~~copyrights ~~pill”)~~ and ~~Minnesota~~trade ~~law~~secrets, ~~may~~these protections ~~discourage~~are limited. Accordingly, ~~delay~~we orcannot ~~prevent~~predict awhether ~~merger~~these protections will be adequate, or whether our competitors will develop similar technology independently without violating our ~~acquisition~~proprietary ~~that~~rights. aRights ~~shareowner~~that may ~~consider~~be ~~favorable~~granted ~~and~~under ~~may limit~~any patent application in the ~~market~~future ~~price~~may ~~for~~not provide ~~our~~competitive ~~common~~advantages ~~stock~~to us. ~~These~~Intellectual ~~provisions~~property protection in foreign jurisdictions may ~~include~~be ~~the~~limited ~~following:~~or unavailable.

• Many ~~advance~~of ~~notice~~our ~~requirements~~competitors ~~for~~have ~~shareowner~~substantially ~~proposals;~~larger •portfolios ~~authorization~~of ~~for~~patents ~~our~~and ~~Board~~other ofintellectual property ~~Directors~~rights tothan ~~issue~~we ~~preferred~~do. ~~stock~~As ~~without~~competition ~~shareowner~~in ~~approval;~~the •communications ~~authorization~~network ~~for~~equipment ~~our~~industry ~~Board~~has intensified and the functionality of ~~Directors~~products has continued to ~~issue~~overlap, ~~preferred~~we ~~stock~~believe ~~purchase~~that ~~rights~~network equipment ~~upon~~manufacturers aincreasingly ~~third~~are ~~party’s~~becoming ~~acquisition~~subject ofto ~~15%~~infringement orclaims. ~~more~~We have received, and expect to continue to receive, notices from third parties (including some of our ~~outstanding~~competitors) claiming ~~shares~~that ofwe ~~common~~are ~~stock;~~infringing ~~and~~their •patents ~~limitations~~or onother ~~business~~proprietary ~~combinations~~rights. ~~with~~We ~~interested~~also ~~shareowners~~have asserted patent claims against certain third parties.

20 We cannot predict whether we will prevail in any patent litigation brought against us by third-parties, or that we will be able to license any valid and infringed patents on commercially reasonable terms. Unfavorable resolution of such litigation may adversely affect our business, results of operations or financial condition. In addition, any of these claims, whether with or without merit, could result in costly litigation, divert our management’s time and attention, delay our product shipments or require us to enter into expensive royalty or licensing agreements.

~~Some~~A ofthird ~~these~~party ~~provisions~~ may ~~discourage~~not abe ~~future~~willing ~~acquisition~~to ~~of ADC~~enter ~~even~~into ~~though~~a ~~our~~royalty ~~shareowners~~or ~~would~~licensing ~~receive~~agreement anon ~~attractive~~acceptable ~~value~~terms, ~~for~~if ~~their~~at ~~shares~~all. orIf a ~~significant~~claim ~~number~~ of ~~our shareowners~~product ~~believe~~infringement ~~such~~against us is successful and we fail to obtain a ~~proposed~~license, ~~transaction~~or ~~would~~develop beor inlicense non-infringing technology, our business, operating results and ~~their~~financial ~~best~~condition ~~interest~~could be adversely affected.

~~Item~~We ~~1B.~~are ~~UNRESOLVED~~dependent ~~STAFF~~upon ~~COMMENTS~~our senior management and other critical employees.

Our success is dependent on the efforts and abilities of our senior management personnel and ~~None~~other critical employees, including those in customer service and product development functions. Our ability to attract, retain and motivate these employees is critical to our success. In addition, if our acquisition by Tyco Electronics Ltd. is not completed or we subsequently acquire one or more businesses in the future, our success will depend, in part, upon our ability to retain and integrate our own personnel with personnel from acquired entities who are necessary to the continued success or the successful integration of the acquired businesses.

~~Item~~ Our 2continuing initiatives to streamline operations as well as the challenging business environment in which we operate may cause uncertainty in our employee base about whether they will have future employment with us. ~~PROPERTIES~~This uncertainty may have an adverse effect on our ability to retain and attract key personnel and may adversely impact our internal control structure.

WeCompliance ~~own~~with ~~our~~internal ~~500,000~~control ~~sq.~~requirements ~~ft. corporate headquarters facility, which~~ is ~~located~~expensive inand ~~Eden~~poses ~~Prairie,~~certain ~~Minnesota~~risks. ~~During 2005, we~~ ~~reached agreement with Wells Fargo Financial Acceptance Minnesota, Inc. whereby they will lease approximately 110,000 square feet of this facility for a period of ten years.~~

We continue to incur significant continuing costs, including accounting fees and staffing Incosts, ~~addition~~in order to maintain compliance with the internal control requirements of the Sarbanes-Oxley Act of 2002. Expansion of our ~~headquarters~~business, ~~facility~~particularly in international geographies, ~~our~~will ~~principal~~necessitate ~~facilities~~ongoing aschanges ofto ~~October 31~~our internal control systems, ~~2005~~processes and information systems. In addition, ~~consisted~~if we complete acquisitions in the future, our ability to integrate operations of the acquired company ~~following:~~could impact our compliance with Section 404 of the Sarbanes-Oxley Act. We cannot be certain that, as our business changes, our current design for internal control over

• Shakopee, Minnesota — approximately 360,000 sq. ft., owned; general purpose facility used for engineering, manufacturing, and general support of our global connectivity products; and a second facility, approximately 50,000 sq. ft., leased; general purpose facility used for engineering, testing and general support for our wireless products; • Juarez and Delicias, Mexico — approximately 327,000 sq. ft. and 139,000 sq. ft., respectively, owned; manufacturing facilities used for our global connectivity products; • Berlin, Germany — approximately 619,000 sq. ft., leased; general purpose facility used for engineering, manufacturing, and general support of our global connectivity products; • Sidney, Nebraska — approximately 382,000 sq. ft., owned; manufacturing facility used for our global connectivity products; • Berkely Vale, Australia — approximately 98,000 sq. ft., owned; general purpose facility for engineering, manufacturing, and general support of our global connectivity products; • Bangalore, India — approximately 88,000 sq. ft., owned; manufacturing facility used for our global connectivity products; and a second site in Bangalore, approximately 22,000 sq. ft., leased; general purpose facilities for engineering, sales, finance, information technology and back office applications; • Santa Teresa, New Mexico — approximately 290,000 sq. ft., leased; global warehouse and distribution center facility with approximately 60,000 sq. ft. dedicated to selected finished product assembly operations; and • Muggelheim, Germany — approximately 127,000 sq. ft., leased; general purpose facility used for engineering, staging, distribution and sales for our professional services business.19

WeTable alsoof own or lease approximately 103 other facilities in the following locations: Australia, Austria, Belgium, Brazil, Canada, Chile, China, France, Germany, Hungary, India, Indonesia, Ireland, Italy, Japan, Malaysia, Mexico, New Zealand, Norway, Philippines, Puerto Rico, Russia, Singapore, South Africa, South Korea, Spain, Sweden, Taiwan, Thailand, the United Arab Emirates, the United Kingdom, the United States, Venezuela and Vietnam. Contents

Wefinancial ~~believe~~reporting ~~the~~will ~~facilities~~be ~~used~~sufficient into ~~our~~enable ~~operations~~management ~~are~~or ~~suitable for their respective uses and are adequate to meet~~ our ~~current needs.~~independent Onregistered ~~October 31, 2005 we maintained approximately~~public ~~3.8 million~~accounting ~~square~~firm feet of active space (1.8 million square feet leased and 2.0 million square feet owned), and have irrevocable commitments for an additional 0.8 million square feet of inactive space, totaling approximately 4.6 million square feet of space at locations around the world. During fiscal year 2005, we continued to ~~take~~determine ~~steps~~that ~~to reduce and consolidate~~ our ~~facilities~~internal tocontrols ~~use~~are ~~them~~effective ~~more efficiently. In comparison, at the end of fiscal year 2004, we had 4.1 million square feet of active space, and irrevocable commitments~~ for ~~1.5 million~~any ~~square feet of inactive space~~period, ~~totaling~~or ~~approximately~~on ~~5.6 million square~~an ~~feet~~ongoing ~~of space at locations around the world~~basis.

21 In the future, if we fail to maintain effective controls, or if our independent registered public accounting firm cannot attest to the effectiveness of our internal controls, we could be subject to regulatory scrutiny and/or a loss of public confidence in our internal controls. In addition, any failure to implement required new or improved controls, or difficulties encountered in their implementation, could affect our operating results adversely or cause us to fail to meet our reporting obligations.

~~Item~~Product 3.defects ~~LEGAL~~or ~~PROCEEDINGS~~the failure of our products to meet specifications could cause us to lose customers and revenue or to incur unexpected expenses.

OnIf ~~May 19,~~our ~~2003,~~products wedo ~~were~~not ~~served~~meet ~~with a lawsuit that was filed in the United States District Court for the District of Minnesota. The complaint named ADC and several of~~ our ~~current~~ ~~and~~customers’ ~~former~~performance ~~officers~~requirements, ~~employees~~our ~~and directors as defendants.~~customer ~~After~~relationships ~~this~~may ~~lawsuit was served, we were served with two substantially similar lawsuits~~suffer. ~~All three of these lawsuits were consolidated into a single lawsuit captioned In Re ADC Telecommunications~~Also, ~~Inc. ERISA Litigation. This lawsuit has been brought by individuals who seek to represent a class of participants in~~ our ~~Retirement~~products ~~Savings~~may ~~Plan~~contain ~~who~~defects ~~purchased~~or ~~our common~~fail ~~stock as one of the investment alternatives under the Retirement Savings Plan from February 2000~~ to ~~present.~~meet ~~The~~product ~~lawsuit alleges a breach of fiduciary duties under the Employee Retirement Income Security Act~~specifications. OnAny ~~October 26,~~failure ~~2005,~~or ~~after mediation,~~poor ~~the~~performance ~~parties reached a conditional agreement to settle the case subject to various approvals, including approvals from an independent fiduciary and the court. Pending finalization, the amount and terms~~ of ~~the~~our ~~settlement~~products ~~are~~could ~~confidential.~~result ~~We do not expect, based on the conditional agreement, the resolution of this matter to have a material impact on our financial statements.~~ in:

We• ~~are~~delayed amarket ~~party~~acceptance toof ~~various~~our ~~other~~products; ~~lawsuits,~~• ~~proceedings~~delayed ~~and~~product ~~claims arising~~shipments; in• ~~the~~unexpected ~~ordinary~~expenses ~~course~~and ofdiversion ~~business or otherwise. Many~~ of ~~these~~ ~~disputes~~resources ~~may be resolved amicably without resort~~ to ~~formal litigation.~~replace ~~The~~defective ~~amount~~products ofor ~~monetary~~identify ~~liability~~and ~~resulting~~correct ~~from~~ the ~~ultimate~~ ~~resolution~~source of ~~these~~errors; ~~matters~~• ~~cannot~~damage beto ~~determined~~our ~~at this~~reputation ~~time.~~and Asour ofcustomer ~~October 31,~~relationships; ~~2005,~~• wedelayed ~~had~~recognition ~~recorded approximately $8.4 million in loss reserves for certain~~ of ~~these~~ ~~matters.~~sales Inor ~~light~~reduced ofsales; ~~the~~and/or ~~reserves~~• weproduct ~~have~~liability ~~recorded, at this time we believe the ultimate resolution of these lawsuits, proceedings and~~ claims ~~will not have a material adverse impact on our business, results of operations~~ or ~~financial~~other ~~condition. Because~~claims offor ~~the~~damages ~~uncertainty inherent in litigation, it is possible~~ that ~~unfavorable~~may ~~resolutions~~be ofcaused ~~these~~by ~~lawsuits, proceedings~~any ~~and~~product ~~claims~~defects ~~could exceed the amount currently reserved and could have a material adverse affect on our business, results of operations~~ or ~~financial~~performance ~~condition~~failures.

~~Item~~ Our 4products are often critical to the performance of communications systems. ~~SUBMISSION~~Many OFof ~~MATTERS~~our supply TOagreements Acontain ~~VOTE~~warranty OFprovisions. ~~SECURITY~~If ~~HOLDERS~~these provisions do not have meaningful limits that can be enforced or if we are exposed to product liability claims that are not covered by insurance, a claim could have a material adverse effect on our business.

~~None~~Managing our inventory is complex and may include write-downs of excess or obsolete inventory.

22 Managing our inventory of components and finished products is complicated by a number of factors, including the need to maintain a significant inventory of components that are not easy to obtain, and often must be purchased in bulk to ensure favorable pricing. This is further complicated by parts that require long lead times, and the fact that we operate and sell, manufacture and warehouse products in many locations around the world. These issues may cause us to purchase and maintain significant amounts of inventory. If this inventory is not used as expected based on anticipated levels of customer demand, it may become excess or obsolete. The existence of excess or obsolete inventory can result in sales price reductions and/or inventory write-downs, which could affect our business and results of operations adversely.

We may encounter difficulties obtaining raw materials and supplies needed to make our products, ~~PART II~~and the prices of these materials and supplies are subject to fluctuation.

~~Item~~ Our 5ability to manufacture our products is dependent upon the availability of certain raw materials and supplies. ~~MARKET~~In ~~FOR~~some ~~REGISTRANT’S~~instances ~~COMMON~~these ~~EQUITY~~materials or supplies may be available from only one or a limited number of sources. The availability of these raw materials and supplies is subject to market forces beyond our control. From time to time, ~~RELATED~~there ~~STOCKHOLDER~~may ~~MATTERS~~not ~~AND~~be ~~ISSUER~~sufficient ~~PURCHASES~~quantities OFof raw ~~EQUITY~~materials ~~SECURITIES~~and supplies in the marketplace to meet customer demand for our products. The costs to obtain these raw materials and supplies are subject to price fluctuations, which may be substantial, because of global market demands. During fiscal 2010, we experienced net inflation in raw materials, primarily due to increases in several commodity markets, partially offset by our internal efficiency efforts and strategic sourcing partner selection. In fiscal 2011, we expect that global economic conditions and supply and demand shifts will continue to have an adverse effect on commodities. In addition, to the degree that certain regions experience an economic recovery, supply could tighten, providing additional upward price pressure. Circumstances relating to the availability and pricing of materials could change and our ability to mitigate price increases or to take advantage of price decreases in the future will depend upon a variety of factors, such as our purchasing power and the purchasing power of our customers. Many companies utilize the same raw materials and supplies in the production of their products as we use in our products. Companies with more resources than us may have a competitive advantage in obtaining raw materials and supplies due to greater purchasing power. Some raw materials or supplies may be subject to

~~Our common stock, $0.~~20 ~~par value, is traded on The NASDAQ~~ Stock Market under the symbol “ADCT.” The following table sets forth the high and low sales prices of our common stock for each quarter during our fiscal years ended October 31, 2005 and 2004, as reported on that market.

	2005				2004
	High		Low		High		Low
First Quarter	$	19.88	$	14.70	$	26.95	$	16.24
Second Quarter		18.06		12.88		25.28		16.24
Third Quarter		26.27		15.33		19.96		14.70
Fourth Quarter		27.14		16.95		17.08		12.25

Asregulatory ~~of January 11~~actions, ~~2006,~~which ~~there~~may ~~were~~adversely ~~11,026~~affect ~~holders~~available ~~of record of our common stock~~supplies. WeFurthermore, dodue ~~not~~to ~~pay cash dividends on our common~~general ~~stock~~economic ~~and~~conditions ~~do not intend to pay cash dividends~~ in the ~~foreseeable future.~~United OnStates ~~April 18,~~and ~~2005~~globally, ~~we announced a one-for-seven reverse split of~~ our ~~common~~suppliers ~~stock.~~may ~~The~~experience ~~effective date of the~~financial ~~reverse split was May 10~~difficulties, ~~2005.~~which ~~All~~could ~~share,~~result ~~share equivalent and per share amounts have been adjusted to reflect the reverse stock split for all periods presented~~ in ~~this~~increased ~~Form 10-K. We did not issue any fractional shares of our new common stock as a result of the reverse split. Instead~~delays, ~~shareowners~~additional ~~who were otherwise entitled to receive a fractional share of new common stock~~costs, ~~received~~or ~~cash~~loss ~~for the fractional share in an amount equal to the fractional share multiplied by the split adjusted price~~ of ~~one share of ADC’s common stock. As~~ a ~~result, we have a treasury stock balance of 4,272 shares at $16~~supplier.~~10 per~~ ~~share.~~

23 Reduced availability and higher prices of raw materials and supplies as well as potential delays in obtaining these items may affect our business, operating results and financial condition adversely. We cannot guarantee that sufficient quantities or quality of raw materials and supplies will be as readily available in the future, that they will be available at acceptable prices, or how the prices at which we sell our products will be impacted by the prices at which we, or any contract manufacturers we utilize, obtain raw materials or supplies. Our ability to pass increases in the prices of raw materials and supplies along to our customers is uncertain. Delays in implementing price increases or a failure to achieve market acceptance of future price increases may affect our results of operations adversely. Further, in an environment of falling commodities prices, we may be unable to sell higher-cost inventory before implementing price decreases, which may affect our results of operations adversely.

~~Item~~If 6.our ~~SELECTED~~manufacturing ~~FINANCIAL~~operations ~~DATA~~suffer production or shipping delays or if we do not have sufficient manufacturing capabilities, we may experience difficulty in meeting customer demands.

~~The~~We ~~following~~internally ~~table~~produce ~~presents~~or ~~selected~~rely ~~financial~~on ~~data~~contract ~~for~~manufacturers ~~ADC.~~to produce a wide range of finished ~~The~~products ~~data~~as ~~included~~well as components used in our finished products at various locations around the ~~following~~world. We ~~table~~also ~~has~~periodically ~~been~~realign ~~restated~~our tomanufacturing capacities among various manufacturing facilities in ~~exclude~~an ~~the~~effort ~~assets,~~to ~~liabilities~~improve efficiencies and ~~results~~our competitive position. Disruption of ~~operations~~our ability to produce or distribute from any of these facilities due to mechanical failures, fires, electrical ~~certain~~outages, ~~businesses~~shipping ~~that~~interruptions, ~~have~~labor ~~met~~issues, ~~the~~natural ~~criteria~~disasters ~~for~~or ~~treatment~~other asreasons could impact our ~~discontinued~~ability ~~operations~~to produce our products in a cost-effective and timely manner adversely. ~~The~~In ~~following~~addition, ~~summary~~there are ~~information~~risks associated with actions we may take to realign manufacturing capacities among facilities, ~~should~~such beas: ~~read~~potential disruptions in ~~conjunction~~production ~~with~~capacity ~~the~~necessary ~~Consolidated~~to ~~Financial~~meet customer demand; decreases ~~Statements~~in ~~and~~production ~~related~~quality; ~~notes~~disruptions ~~thereto~~in ~~set~~the ~~forth~~availability of raw materials and supplies; delays in ~~Item 8~~the movement of necessary tools and equipment among facilities; and adequate personnel to meet ~~this~~production ~~Form 10-K~~demands caused by planned production shifts. In the event of any of these disruptions, we could lose sales, incur increased operating costs and suffer customer relations problems, which may affect our business and results of operations adversely.

In addition, it is possible from time to time that we may not have sufficient production ~~FIVE-YEAR~~capacity ~~FINANCIAL~~to ~~SUMMARY~~meet customer demand whether through our internal facilities or through contract manufacturers we utilize. In such an event we may lose sales opportunities and suffer customer relations problems, which may adversely affect our business and results of operations.

If contract manufacturers that we rely on to produce a significant portion of our products or key ~~Years~~components ~~ended~~of ~~October 31~~products encounter production quality, financial or other difficulties, we may experience difficulty in meeting customer demands.

	2005		2004		2003			2002			2001
	(Dollars in millions, except per share data)
Income Statement Data from Continuing Operations
Net sales	$	1,169.2	$	773.4	$	579.8		$	803.4		$	2,103.2
Gross profit		420.9		302.3		208.0			161.6			625.6
Research and development expense		71.6		59.1		59.9			106.8			201.9
Selling and administration expense		262.0		205.0		158.9			247.1			560.9
Operating (loss) income		72.3		24.6		(54.0	)		(734.3	)		(855.2	)
Income (loss) before income taxes		92.7		35.6		(44.9	)		(728.0	)		(1,728.6	)
Provision (benefit) for income taxes		7.2		2.0		(5.1	)		249.4			(577.3	)
Income (loss) from continuing operations		85.5		33.6		(39.8	)		(977.4	)		(1,151.3	)
Earnings (loss) per diluted share from continuing operations		0.72		0.29		(0.35	)		(8.60	)		(10.24	)
Balance Sheet Data
Current assets		853.0		836.1		1,032.6			718.7			1,390.7
Current liabilities		286.6		302.0		266.8			405.8			604.2
Total assets		1,535.0		1,428.1		1,296.9			1,144.2			2,499.7
Long-term notes payable		400.0		400.0		400.0			10.5			2.1
Total long-term obligations		474.5		466.8		402.4			11.7			2.1
Shareowners’ investment		773.9		659.3		627.7			732.2			1,893.4

We rely on unaffiliated contract manufacturers, both domestically and internationally, to produce certain products or key components of products. If we are unable to arrange for sufficient production capacity among our contract manufacturers or if our contract manufacturers encounter production, quality, financial or other difficulties, we may encounter difficulty in meeting customer demands. Any such difficulties could have an adverse effect on our business and financial results.

24Our ability to operate our business and report financial results is dependent on maintaining effective information management systems.

~~Item~~ We 7rely on our information management systems to support critical business operations such as processing sales orders and invoicing, inventory control, purchasing and supply chain management, payroll and human resources, and financial reporting. ~~MANAGEMENT’S~~We ~~DISCUSSION~~periodically ~~AND~~implement ~~ANALYSIS~~upgrades OFto ~~FINANCIAL~~such systems ~~CONDITION~~or ~~AND~~migrate ~~RESULTS~~one OFor ~~OPERATIONS~~more of our affiliates, facilities or operations from one system to another. In addition, when we acquire other companies we often take actions to migrate their information management systems to the systems we use. If we are unable to adequately maintain these systems to support our developing business requirements or effectively manage any upgrade or migration, we could encounter difficulties that may adversely affect our business, internal controls over financial reporting, financial results, or our ability to report such results timely and accurately.

We are subject to risks associated with changes in commodity prices, interest rates, security ~~Marketplace~~prices, ~~Conditions~~and foreign currency exchange rates.

~~Our~~We ~~operating~~face ~~results~~market ~~for~~risks ~~fiscal~~from ~~2005~~changes ~~reflected significant growth~~ in ~~net~~certain ~~sales~~commodity ~~when~~prices, ~~compared~~security ~~with~~prices, ~~fiscal~~foreign exchange ~~2004,~~rates ~~even~~and ~~when excluding~~interest ~~sales~~rates. ofMarket ~~KRONE~~fluctuations ~~and~~could ~~FONS,~~affect ~~which~~our weresults ~~acquired~~of inoperations ~~the~~and ~~third~~financial ~~quarter~~condition ofadversely. ~~fiscal~~We ~~2004~~may ~~and~~reduce ~~the~~these ~~fourth~~risks ~~quarter~~through ofthe ~~fiscal 2005,~~use ~~respectively.~~of

21 We believe that there is a general trend in our industry toward modest overall spending increases from the historical low levels experienced from fiscal 2001 through fiscal 2003. However, overall spending on communications equipment and services remains at significantly lower levels than existed prior to fiscal 2001 and customers appear to be selective about areas where they are willing to increase spending. Specifically, we believe that spending increases by our customers are likely to be more pronounced in FTTX initiatives as well as in the wireless and enterprise areas. We undertook our recent acquisition of FONS to help expand our position as a leader in the FTTX space.

WeTable also believe that capital spending budgets remain constrained, and any increases in spending in specific areas therefore may cause service providers to decrease spending in other areas. Initiatives to increase spending on FTTX projects may be causing decreases in spending on other wireline initiatives. Ongoing consolidation among communications service providers may cause such companies to defer spending while they focus on integrating combined businesses. In addition, our industry continues to experience very intense competition and increased pricing pressure from our customers. Subject to telecom industry spending cycles, we currently anticipate at least slow year-over-year growth in the overall market for spending on communications equipment and services in the near term. There is increased competition among telephone, wireless and cable providers. This is causing service providers to upgrade their networks to offer Internet, voice, video and data services at low, often flat-rate, prices to attract and retain customers. The rate at which these providers respond to each other’s competitive threats may impact the rate of sales growth we might experience and place pressure on our gross profit margins. Contents

~~While~~derivative wefinancial ~~are~~instruments. ~~cautious~~As ~~about~~of ~~our~~September 30, ~~ability to be successful in achieving continued revenue growth~~2010, we ~~believe~~had ~~several~~derivative ~~factors may~~transactions ~~provide~~in usplace to ~~with~~minimize the ~~opportunity~~financial toimpact ~~increase~~from ~~our~~most ~~sales~~significant ~~faster than~~fluctuations ~~growth~~ in ~~the~~interest ~~overall~~rates ~~market~~and inforeign exchange ~~our fiscal 2006~~rates. ~~Such sales~~ ~~growth could be achieved through:~~

• Interest ~~new~~rate ~~product~~exposure ~~offerings,~~exists ~~such~~on as our ~~OmniReachtm~~cash ~~FTTX~~investments ~~solutions~~as ~~being~~interest ~~deployed~~income byis ~~several~~negatively impacted ~~communications~~when ~~service~~short-term ~~providers~~interest ~~and~~rates ~~the~~decline. ~~growing~~Additionally, ~~acceptance~~we ofhave ~~our~~exposure ~~Digivance®~~to ~~wireless~~increases ~~coverage~~in interest ~~solution~~rates ~~and~~on our ~~TrueNet®~~floating ~~and~~rate ~~CopperTentm~~debt ~~enterprise~~obligations. ~~solutions;~~As •of ~~opportunities~~September 30, to2010, ~~cross-sell~~we ~~products~~minimized ~~among ADC’s traditional customer base and~~ the exposure ~~traditional~~to ~~customer~~rising ~~base~~interest ofrates ~~KRONE~~on ~~following~~substantially ~~our~~all ~~acquisition~~ of ~~KRONE in May 2004; and • increasing~~ our ~~market~~floating ~~share~~rate indebt ~~certain~~obligations through ~~areas~~an asinterest werate ~~have~~swap ~~done~~which ~~recently~~fixed ~~with~~the ~~respect~~rate toon ~~some~~our of$200.0 million ~~our~~convertible ~~product~~bond ~~lines~~maturing in 2013.

We ~~continue~~have exposure to beforeign ~~dependent~~denominated onrevenues ~~telecommunications~~and ~~service providers~~operating ~~for~~expenses athrough ~~majority of~~ our ~~sales, although this dependence~~operations ~~has~~in ~~recently~~various ~~declined~~countries. toOur ~~some~~largest ~~degree~~exposure ~~because~~is ofto ~~our~~the ~~KRONE acquisition~~Mexican peso. ~~The~~As ~~four~~of ~~major U.S.~~September ~~telephone companies (Verizon~~30, ~~BellSouth~~2010, ~~Qwest~~we mitigated ~~and~~a ~~SBC)~~certain ~~accounted~~portion ~~for 25.7%, 30.7% and 34.3%~~ of our ~~net~~exposure ~~sales for fiscal 2005, 2004 and 2003, respectively. The decline in these customer concentration levels from fiscal 2004~~ to ~~fiscal~~Mexican ~~2005~~peso isoperating ~~largely~~expenses ~~because the KRONE acquisition gave us a more diversified customer base~~ throughout ~~the~~ ~~world. However, the increased diversification may be offset~~fiscal by2010 ~~mergers~~through ~~among~~forward ~~our~~contracts ~~customers~~and orcostless ~~acquisitions we undertake, such as our recent acquisition of FONS~~collars. The ~~long-term~~forward ~~impact~~contracts ~~of customer~~enable ~~mergers~~us ~~on our business is difficult~~ to ~~predict. In~~purchase ~~addition,~~Mexican inpesos ~~the~~at ~~product~~specified ~~areas~~rates ~~where~~and ~~we believe~~ the ~~potential for~~collars ~~sales~~establish ~~growth~~a iscap ~~most~~and ~~pronounced~~a ~~(e.g.,~~floor ~~FTTX~~on ~~initiatives, wireless~~the ~~products~~price ~~and~~at ~~enterprise), our sales remain highly~~which ~~concentrated~~we ~~with~~purchase ~~the large U~~pesos.~~S. telephone and wireless~~ ~~companies.~~

We ~~believe~~also ~~the~~are ~~historical~~exposed ~~seasonality~~to offoreign ~~our~~currency ~~sales,~~exchange ~~whereby~~risk ~~the strongest~~as ~~demand~~a ~~for~~result ~~our~~of ~~products~~changes ~~was~~in ~~during~~intercompany balance ~~our~~sheet ~~fourth~~accounts ~~fiscal quarter~~and ~~ending~~other ~~October~~balance sheet items. At September 3130, ~~may~~2010, nothese ~~longer~~balance ~~apply~~sheet exposures towere ~~our~~mitigated through the use of foreign exchange forward contracts with maturities of ~~business~~approximately one month. ~~This~~The ~~seasonality~~principal ~~trend~~currency inexposures ~~our~~being ~~sales~~mitigated ~~generally~~were ~~existed~~the Australian ~~prior~~dollar, toBrazilian ~~the~~real, ~~2001-2003~~British ~~downturn~~pound, inChinese ~~the~~renminbi, ~~telecommunications~~Czech koruna, euro, Mexican peso, ~~equipment~~Singapore dollar and South African rand.

25We may encounter litigation that has a material impact on our business.

~~market when our business was more focused on central-office-based products.~~ We ~~believe~~are ~~our~~a ~~expansion~~party ~~into~~to ~~new growth~~various ~~markets of FTTX~~lawsuits, ~~wireless~~proceedings and ~~enterprises~~claims ~~may~~arising ~~have changed this seasonality~~ in ~~our~~the ~~business.~~ordinary ~~Our~~course ~~sales~~ of ~~these~~ ~~products~~business ~~have~~or ~~fluctuated from quarter to quarter, something we expect to continue~~otherwise. InMany ~~addition, in fiscal 2005, it appears that many~~ of ~~our~~these ~~customers~~disputes may ~~have~~be ~~accelerated~~resolved ~~their~~without ~~annual~~formal ~~capital spending in the first calendar-half of 2005~~litigation. ~~While~~The ~~the~~amount ~~historical seasonality trend~~ of ~~our~~monetary ~~central-office-based business~~liability ~~may~~resulting nofrom ~~longer be apparent, we still expect sales in our first fiscal quarter to be lower than in other quarters. This is because of~~ the ~~number~~ultimate ofresolution ~~holidays in that quarter and the development~~ of ~~annual~~these ~~capital~~matters ~~spending~~cannot ~~budgets~~be ~~that many of our~~determined ~~customers~~at ~~undertake~~this ~~during that~~ time ~~frame~~.

~~The~~As ~~working~~of ~~days~~September 30, by2010, ~~quarter~~we inhad ~~fiscal~~recorded ~~2006~~approximately ~~is 59~~$7.5 ~~days~~million in loss reserves for ~~the~~certain ~~first~~of ~~quarter,~~these ~~65 days~~matters. inBecause of the ~~second~~uncertainty ~~quarter~~inherent in litigation, it is possible that ~~62 days~~unfavorable inresolutions ~~the~~of ~~third~~these ~~quarter~~lawsuits, proceedings and ~~66 days~~claims incould exceed the ~~fourth~~amount currently ~~quarter~~reserved by us and may adversely affect our business, results of operations or financial condition.

WeRisks ~~are~~Related ~~continuing~~ to ~~focus~~Our onCommon ~~ways to conduct our operations~~Stock more efficiently and to reduce costs. During the downturn in the telecommunications equipment industry in fiscal years 2001 through 2003, we took significant cost-reduction measures. We believe most of our restructuring activity related to that downturn is completed, but we continue to pursue expense reductions. For example, the integration of the KRONE acquisition has presented opportunities to reduce costs through the consolidation of duplicative facilities, the movement of operations into lower cost locations and the elimination of duplicative processes and personnel functions. Following our acquisition of FONS, we will seek additional opportunities to reduce costs and gain economies of scale, although such opportunities are more limited because the operations of FONS are significantly smaller than were those of KRONE when we completed that acquisition. Accordingly, we anticipate incurring additional restructuring charges in future periods associated with our ongoing initiative to be a cost leader.

WeOur intend to continue to explore additional product line or business acquisitions that are complimentary to our communications infrastructure business. We believe our acquisition of FONS will enhance our FTTX and other connectivity solution offerings. In addition, we recently completed the acquisition of OpenCell, which should enhance our Digivance wireless coverage solution offering. We expect to fund other potential acquisitions with existing cash resources, the issuance of shares of common or preferred stock, ~~the~~price ~~issuance~~has ~~of debt~~been orvolatile ~~equity-linked~~historically ~~securities or through some combination of these alternatives. In addition, we will continue to monitor all of our businesses~~ and may ~~determine~~continue ~~that it is appropriate~~ to ~~sell~~ orbe ~~otherwise dispose of certain operations~~volatile. ~~For example, in~~ the third quarter of fiscal 2005, we completed the sale of our professional services operations in the United Kingdom. This sale was completed primarily because the business was not profitable and we did not believe we were realizing sufficient sales of our hardware products through this part of our services operation.

The trading price of our common stock has been and may continue to be subject to wide Afluctuations. ~~detailed~~Our ~~description~~stock price may fluctuate in response to a number of ~~many~~events and factors, such as quarterly variations in operating results, announcements of ~~the~~technological ~~risks~~innovations toor new products by us or our ~~business~~competitors, ~~can~~changes in financial estimates and recommendations by securities beanalysts, ~~found~~purchases inor ~~Item 1A~~sales ~~under~~of our stock by significant investors, the ~~caption~~operating ~~“Risk~~and stock price ~~Factors~~performance of other companies that investors may deem comparable to us, and new reports relating to our customers, trends in our markets or general economic conditions.”

26 In addition, the stock market in general, and prices for companies in our industry in particular, have experienced extreme volatility that often has been unrelated to the operating performance of such companies. These broad market and industry fluctuations may adversely affect the price of our common stock, regardless of our operating performance.

Furthermore, components of the compensation of many of our key employees are dependent on the ~~Results~~price of ~~Operations~~our common stock. Lack of positive performance in our stock price may affect our ability to retain key employees.

~~The~~Anti-takeover ~~following~~provisions ~~table~~in ~~contains~~our ~~information~~charter ~~regarding~~documents, ~~the percentage~~our ofshareholder ~~net~~rights ~~sales~~agreement ~~represented by certain income~~ and ~~expense~~ ~~items from continuing operations for the three fiscal~~Minnesota ~~years~~law ~~ended~~could ~~October 31,~~prevent ~~2005,~~or ~~2004,~~delay ~~and~~a ~~2003~~change ~~and the percentage changes~~ in ~~the~~control ~~dollar amounts~~ of ~~these~~our ~~income and~~company. ~~expense items from year to year:~~

										Percentage
										Increase (Decrease)
	Percentage of Net Sales									Between Periods
	2005			2004			2003			2005 vs. 2004			2004 vs. 2003
Net sales		100.0	%		100.0	%		100.0	%		51.2	%		33.4	%
Cost of sales		(64.0	)		(60.9	)		(64.1	)		58.8			26.7
Gross profit		36.0			39.1			35.9			39.2			45.3
Operating expenses:
Research and development		(6.1	)		(7.7	)		(10.3	)		21.2			(1.3	)
Selling and administration		(22.4	)		(26.5	)		(27.4	)		27.8			29.0
Impairment charges		—			(0.2	)		(2.7	)		(82.4	)		(89.1	)
Restructuring charges		(1.3	)		(1.5	)		(4.8	)		23.5			(56.9	)
Operating income (loss)		6.2			3.2			(9.3	)		193.9			145.6
Other income (expense), net:
Interest income, net		0.6			0.5			1.1			91.9			(39.3	)
Other, net		1.1			0.9			0.5			82.2			143.3
Income (loss) before income taxes		7.9			4.6			(7.7	)		160.4			179.3
(Provision) benefit for income taxes		(0.6	)		(0.3	)		0.9			260.0			139.2
Income (loss) from continuing operations		7.3	%		4.3	%		(6.8	)%		154.5	%		184.4	%

Provisions of our articles of incorporation and bylaws, our shareholder rights agreement (also known as a “poison pill”) and Minnesota law may discourage, delay or prevent a merger or acquisition that a shareholder may consider favorable, and could limit the price that investors are willing to pay for our common stock. These provisions include the following:

~~The~~• ~~table~~advance ~~below~~notice ~~sets~~requirements ~~forth~~for ~~our~~shareholder ~~net~~proposals; ~~sales~~• ~~from~~authorization ~~continuing operations~~ for ~~the~~our ~~three~~Board ~~fiscal years ended October 31 for each~~ of ~~our~~Directors ~~reportable~~to ~~segments~~issue ~~described~~preferred instock ~~Item 1~~without ofshareholder ~~this Form 10-K (in millions).~~ approval;

			2005					2004					2003
Operating Segment			Net Sales		%			Net Sales		%			Net Sales		%
Broadband Infrastructure and Access			$	943.9		80.7	%	$	625.8		80.9	%	$	447.4		77.2	%
Professional Services:
	Product			54.0					55.4					37.3
	Service			171.3					92.2					95.1
Total Professional Services				225.3		19.3	%		147.6		19.1	%		132.4		22.8	%
		Total	$	1,169.2		100.0	%	$	773.4		100.0	%	$	579.8		100.0	%

OverviewTable of Acquisition and Divestiture Activities Contents

On August 26, 2005, we completed the acquisition of Fiber Optic Network Solutions Corp. (“FONS”), a leading manufacturer of high-performance passive optical components and fiber optic cable packaging, distribution and connectivity solutions. With the addition of FONS, we became one of the largest suppliers of FTTX solutions in the United States according to proprietary market share estimates. The results of FONS subsequent to August 26, 2005 are included in our results of operations.

	•		authorization for our Board of Directors to issue preferred stock purchase rights upon a third party’s acquisition of 15% or more of our outstanding shares of common stock; and

	•		limitations on business combinations with interested shareholders.

OnSome ~~May 24,~~of ~~2005,~~these weprovisions ~~sold~~may ~~ADC~~discourage ~~Systems~~a ~~Integration~~future UKacquisition ~~Limited (“SIUK”),~~of ~~which~~our ~~was~~company even though our shareholders ~~professional~~would ~~services~~receive ~~unit~~an ~~in the~~attractive ~~United~~value ~~Kingdom~~for their shares, ~~for~~or a ~~nominal~~significant ~~amount~~number ~~and~~of ~~recorded~~our shareholders believe such a ~~loss~~proposed ~~of $6~~transaction would be in their best interest.~~3 million~~

27Item 1B. UNRESOLVED STAFF COMMENTS

~~on the disposition~~ None. ~~This business had been included in our~~ ~~Professional Services segment. The results of SIUK are reported separately as discontinued operations for all periods presented.~~

~~On May~~Item ~~6, 2005, we completed the acquisition of OpenCell, Corp~~2. ~~(“OpenCell”), a manufacturer of digital~~PROPERTIES fiber-fed Distributed Antenna systems and shared multi-access radio frequency network equipment. The acquisition of OpenCell allows us to incorporate OpenCell’s technology into our existing Digivance wireless solutions, which are used by wireless carriers to extend network coverage and accommodate ever-growing capacity demands. The results of OpenCell subsequent to May 6, 2005 are included in our results of operations.

OnWe ~~November 19,~~own ~~2004~~our approximately 500,000 wesq. ~~completed~~ft. ~~the~~corporate ~~sale~~headquarters offacility, ~~our~~which ~~Metrica~~is located in ~~service~~Eden ~~assurance~~Prairie, ~~software~~Minnesota. ~~group~~During ~~and~~2005, ~~recorded~~we aentered ~~gain~~into ~~of $32.6 million~~a onlease ~~the~~agreement ~~disposition.~~with ~~This~~Wells ~~business~~Fargo ~~had~~Bank, ~~been~~N.A. ~~included~~to inlease ~~our~~approximately ~~Professional~~112,000 ~~Services~~square ~~segment.~~feet ~~The results~~ of ~~Metrica~~ ~~are~~this ~~reported~~facility. ~~separately~~The asremaining ~~discontinued~~lease ~~operations~~term ~~for~~is ~~all~~approximately ~~periods~~five ~~presented~~years.

OnIn ~~May 18,~~addition ~~2004,~~to weour ~~completed~~headquarters ~~the acquisition of KRONE~~facility, ~~a global supplier of connectivity solutions and cabling products used in public access and enterprise networks, from GenTek, Inc. This acquisition increased~~ our ~~network~~principal ~~infrastructure~~facilities ~~business and~~as ~~expanded our presence in the international marketplace. The results~~ of ~~KRONE subsequent to May~~September 1830, ~~2004 are included in~~2010, ~~our~~consisted ~~results~~ of ~~operations.~~the following:

~~During~~• ~~fiscal~~Shakopee, ~~2004~~Minnesota — approximately 370,000 wesq. ~~sold~~ft., owned; general purpose facility used for engineering, manufacturing and general support of our ~~BroadAccess40~~global ~~business~~connectivity products; • Marietta, ~~the~~ Georgia — approximately 86,000 sq. ft., leased; administration and operations facility used for our professional services business; ~~related~~• toSan Jose, California — approximately 61,000 sq. ft., leased; general purpose facility used for engineering, manufacturing and general support of our ~~Cuda~~network ~~cable~~solutions ~~modem~~group; ~~termination~~• ~~system product~~Juarez ~~line~~and Delicias, Mexico — approximately 327,000 sq. ft. and ~~related~~139,000 ~~FastFlow~~sq. ~~Broadband~~ft., ~~Provisioning~~respectively, ~~Manager software~~owned; manufacturing facilities; each facility used for our global connectivity products; • Berlin, Germany — approximately 377,000 sq. ft., leased; general purpose facility used for engineering, manufacturing and ~~the~~general ~~business~~support ~~related~~of toour global connectivity products; • Sidney, Nebraska — approximately 376,000 sq. ft., owned; manufacturing facility used for our ~~Singl~~global connectivity products; • Brno, Czech Republic — approximately 123,000 sq.~~eView~~ ~~product line~~ft., ~~The~~leased; ~~results~~manufacturing facility used for our global connectivity products; • Berkeley Vale, Australia — approximately 99,000 sq. ft., owned; general purpose facility for engineering, manufacturing and general support of ~~these~~our ~~businesses~~global ~~are~~connectivity ~~reported~~products; ~~separately~~• ~~as discontinued~~Bangalore, India — approximately 44,000 sq. ft., owned; manufacturing facility used for our global connectivity products; and a second site in Bangalore, approximately 69,000 sq. ft., leased; general purpose facilities for engineering, sales, finance, information technology and other shared service support functions; • Santa Teresa, New Mexico — approximately 254,000 sq. ft., leased; global warehouse and distribution center facility with approximately 60,000 sq. ft. dedicated to selected finished product assembly operations; • Shanghai, China — approximately 59,000 sq. ft., leased; manufacturing site used for ~~all~~our ~~periods~~global ~~presented~~connectivity products; and a second facility in Shanghai, approximately 37,000 sq. ft., leased; facility for engineering, manufacturing and product management; and

23 ~~Net Sales~~

FiscalTable 2005of vs. Fiscal 2004Contents

~~Net~~• ~~sales were $1~~Shenzhen,~~169.2 million~~ ~~and~~China ~~$773.4 million~~— ~~for fiscal~~approximately ~~2005 and 2004~~149,000 ~~respectively, a 51~~sq.2% ~~increase (23~~ft.~~5% exclusive~~, ofleased; ~~the~~and ~~KRONE~~a ~~acquisition).~~second ~~The~~facility ~~KRONE~~in ~~acquisition accounted~~Shenzhen, ~~for~~approximately ~~64.2%~~112,000 ~~of the net sales increase over fiscal 2004~~sq. ~~Sales~~ ~~generated from FONS and OpenCell in fiscal 2005 following their acquisitions do not constitute a significant portion of 2005 net sales~~ft., ~~Excluding~~leased; ~~the~~both ~~KRONE~~manufacturing ~~acquisition,~~sites ~~our~~used ~~sales growth~~ for ~~fiscal 2005 was driven by strong, broad-based growth among~~ our ~~comprehensive~~global ~~communication~~connectivity ~~infrastructure~~products; ~~solutions. International net sales were 45.4%~~ and ~~39.5%~~an ofadditional ~~our~~facility ~~net sales~~ in ~~fiscal~~ ~~2005~~Shenzhen, ~~and~~approximately ~~2004~~6,000 ~~respectively~~sq. ~~The~~ft., ~~increase~~leased; ~~in international~~used ~~sales~~for isengineering ~~due~~and ~~primarily~~operations toof our ~~acquisition~~network ~~of KRONE,~~solutions ~~which has a greater mix of international sales~~group.

~~During~~We ~~fiscal~~also ~~2005,~~own ~~net~~or ~~sales~~lease ofapproximately ~~Broadband~~80 ~~Infrastructure~~other ~~and Access~~facilities ~~products~~in ~~increased~~the byfollowing ~~50.8%~~locations: ~~compared~~Australia, Austria, toBelgium, ~~fiscal~~Brazil, ~~2004.~~Chile, ~~Our Broadband~~China, ~~Infrastructure~~France, ~~and~~Hong ~~Access~~Kong, ~~segment~~Hungary, ~~includes infrastructure~~India, ~~(Connectivity)~~Indonesia, ~~and~~Italy, ~~access~~Japan, Malaysia, ~~(Wireless~~Mexico, ~~and~~New ~~Wireline) products.~~Zealand, ~~The~~Philippines, ~~inclusion~~Russia, ofSaudi ~~sales~~Arabia, bySingapore, ~~KRONE~~South ~~beginning~~Africa, onSouth ~~May 18~~Korea, ~~2004~~Spain, ~~accounts~~Thailand, ~~for 69.0% of~~ the ~~increase~~United ~~for~~Arab ~~fiscal 2005~~Emirates, ~~with~~ the ~~remaining~~United ~~increase~~Kingdom, ~~primarily~~the ~~due~~United toStates, ~~increased~~Venezuela ~~sales of our legacy Broadband Infrastructure~~ and ~~Access products~~Vietnam.

~~For~~We ~~fiscal~~believe ~~2005,~~the ~~net~~facilities ~~sales~~used ofin our ~~Connectivity~~operations ~~products increased~~are ~~70.1%~~suitable ~~compared~~for totheir ~~fiscal~~respective ~~2004,~~uses ~~with~~and are ~~the~~adequate ~~KRONE acquisition~~to ~~accounting~~meet ~~for~~our 66current needs.2% ofOn ~~the~~September 30, ~~increase.~~2010, ~~Sales~~we ofmaintained ~~our~~approximately 3.4 ~~fiber~~million ~~connectivity~~square ~~products~~feet ~~represented~~of 27active space (1.7% million ofsquare ~~the~~feet ~~net connectivity~~leased ~~increase~~and ~~over~~1.7 million ~~fiscal~~square ~~2004~~feet owned), ~~largely~~and ~~the~~have ~~result~~irrevocable commitments for an additional 0.4 million square feet of inactive ~~increased~~space, ~~sales~~totaling approximately 3.8 million square feet of ~~our~~space ~~OmniReach~~at ~~FTTX~~locations ~~products,~~around ~~which~~the ~~had~~world. In ~~minimal~~comparison, ~~sales~~at inthe end of fiscal ~~2004.~~2009, ~~Sales~~we ofhad ~~FTTX~~3.6 million ~~products~~square ~~have fluctuated~~feet ~~quarter~~of ~~over~~active ~~quarter~~space, and irrevocable wecommitments ~~expect~~for ~~this~~0.4 million ~~trend~~square ~~to continue~~feet of inactive space, ~~based~~totaling onapproximately ~~the~~4.0 million ~~timing~~square feet of ~~customer~~space ~~deployments~~at locations around the world.

~~For fiscal 2005, net sales of our Wireless products increased 38~~Item 3.6% ~~compared~~LEGAL ~~to fiscal 2004. This was largely a result of~~PROCEEDINGS increased demand for our Digivance products, due to production of a new product, as well as an improved supply chain for certain Digivance components. Sales of our Digivance products are continuing to grow because of sales to Verizon and Nextel for deployments in large North American cities. However, sales of Digivance have fluctuated, and are expected to continue to fluctuate, from one quarter to the next due to the timing of new products and customer deployments.

28Legal Contingencies: Beginning on July 14, 2010, a number of putative shareholder class action lawsuits were filed in the District Court of Hennepin County, Minnesota, Fourth Judicial District and three lawsuits were filed in the United States District Court for the District of Minnesota against various combinations of Tyco Electronics and one of its subsidiaries, ADC, the individual members of our board of directors, and one of our non-director officers with respect to the merger transaction with Tyco Electronics, Ltd. On August 4, 2010, plaintiffs in the state actions filed a consolidated shareholder derivative and class action complaint. The consolidated complaint alleges, among other things, that the members of our board of directors breached their fiduciary duties owed to the public shareholders of ADC by entering into the merger agreement, approving the tender offer contemplated thereby and the proposed merger and failing to take steps to maximize the value of ADC to its public shareholders. The consolidated complaint further alleges that ADC and our board of directors violated their fiduciary duties owed to the public shareholders of ADC by filing with the SEC a Schedule 14D-9 that is materially misleading or omissive. The consolidated complaint further alleges that Tyco Electronics Ltd. and Tyco Electronics Minnesota, Inc. aided and abetted such breaches of fiduciary duties. The consolidated complaint seeks, among other things, declaratory and injunctive relief concerning the alleged fiduciary breaches, injunctive relief prohibiting the defendants from consummating the merger and other forms of equitable relief. On August 9, 2010, the court entered an order consolidating the state actions under the caption In re ADC Telecommunications, Inc. Shareholders Litigation. The complaints filed in the United States District Court for the District of Minnesota allege, among other things, that the members of our board of directors breached their fiduciary duties owed to the public shareholders of ADC by entering into the merger agreement, approving the tender offer contemplated thereby and the proposed merger and failing to take steps to maximize the value of ADC to its public shareholders, and that ADC, Tyco Electronics Ltd. and Tyco Electronics Minnesota, Inc. aided and abetted such breaches of fiduciary duties. The complaints further allege that ADC and members of our board of directors violated Section 14(d)(4) and Section 14(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), by filing with the SEC a Schedule 14D-9 that is materially misleading or omissive. The complaints generally seek, among other things, declaratory and injunctive relief concerning the alleged fiduciary breaches and alleged violations of the Exchange Act, injunctive relief prohibiting the defendants from consummating the merger and other forms of equitable relief.

InOn ~~fiscal~~September 23, ~~2005~~2010, ~~net~~the ~~sales~~parties to the state and federal actions executed a stipulation of settlement ~~our~~(the ~~Wireline~~“Stipulation”), ~~products~~which ~~decreased~~sets byforth the terms and conditions of the proposed 27settlement.6% ~~compared~~Pursuant to ~~fiscal~~the ~~2004.~~Stipulation, ~~This~~the ~~decrease~~consolidated ~~was~~state ~~caused~~action will be dismissed with ~~primarily~~prejudice byon athe ~~general~~merits, ~~industry-wide~~the ~~decline~~plaintiffs in the ~~market~~federal actions have voluntarily dismissed those ~~demand~~actions, ~~for~~and ~~high-bit-rate~~all ~~digital~~defendants ~~subscriber~~will ~~line~~be ~~products~~released asfrom any and all claims relating to, among other ~~carriers~~things, ~~undertake~~the ~~product~~merger ~~substitution~~agreement, bythe ~~delivering~~merger, ~~fiber~~the tender offer and any disclosures made in connection ~~Internet~~therewith. ~~Protocol~~The ~~services~~Stipulation ~~closer~~is subject to ~~end~~customary conditions, including completion of the merger, completion of certain confirmatory discovery, class certification and final approval by the District Court of Hennepin County, Minnesota, Fourth Judicial District, following notice to our shareholders. In connection with the settlement, we (or our successor-~~user~~in-interest) ~~premises~~have agreed to pay to plaintiffs’ counsel fees and expenses not to exceed $925,000, subject to court approval. WeOn ~~expect~~October 14, ~~this~~2010, ~~industry-wide~~the ~~trend~~District inCourt ~~market~~of ~~demand~~Hennepin County, Minnesota, Fourth Judicial District entered an order preliminarily approving the proposed settlement and setting forth the schedule and procedures for notice to ~~continue~~our shareholders and the court’s final review of the settlement. The court ~~into~~scheduled a hearing for February 10, 2011, at which the ~~future~~court will consider the fairness, reasonableness and adequacy of the settlement, the proposed final certification of the class, and an application by plaintiffs’ counsel for fees and expenses.

We ~~Net~~are ~~sales~~a ofparty ~~our~~to ~~Professional~~various ~~Services~~other ~~segment~~lawsuits, ~~increased~~proceedings ~~52.6% compared~~and toclaims ~~fiscal~~arising ~~2004,~~in ~~with~~ the ~~KRONE~~ordinary course ~~acquisition~~of ~~representing 44~~business or otherwise.5% Many of ~~the~~these ~~increase.~~disputes Inmay ~~addition,~~be ~~increased~~resolved ~~sales~~without toformal ~~several~~litigation. ~~key~~The ~~customers~~amount ~~contributed~~of tomonetary ~~the~~liability ~~growth~~resulting infrom ~~net~~the ~~sales~~ultimate resolution of ~~professional services.~~

~~Fiscal 2004 vs. Fiscal 2003~~24

NetTable sales were $773.4 million and $579.8 million for fiscal 2004 and 2003, respectively, which was a 33.4% increase. International net sales were 39.5% and 24.8% of our net sales in fiscal 2004 and 2003, respectively. Contents

~~During~~these ~~fiscal~~matters ~~2004,~~cannot ~~net~~be ~~sales~~determined at this time. As of ~~Broadband~~September 30, ~~Infrastructure~~2010, ~~and~~we had recorded $7.5 ~~Access~~million ~~products~~in ~~increased~~loss byreserves ~~40.6%~~for ~~compared~~certain toof ~~fiscal~~these ~~2003~~matters. ~~Our Broadband~~In ~~Infrastructure~~light ~~and~~of ~~Access~~the ~~segment~~reserves ~~includes~~we have recorded, ~~infrastructure~~at ~~(Connectivity)~~this ~~and~~time ~~access~~we ~~(Wireless~~believe the ultimate resolution of these lawsuits, proceedings and ~~Wireline)~~claims will not ~~products.~~have ~~The~~a ~~inclusion~~material adverse impact on our business, results of ~~sales~~operations byor financial condition. Because of the ~~KRONE~~uncertainty ~~Group~~inherent ~~beginning~~in ~~on May 18~~litigation, ~~2004~~however, ~~accounts~~it ~~for~~is ~~82.8%~~possible that unfavorable resolutions of ~~the~~one ~~increase~~or ~~for~~more ~~fiscal 2004~~of ~~with~~these ~~the~~lawsuits, ~~remaining~~proceedings ~~increase~~and ~~being~~claims ~~accounted~~could ~~for~~exceed ~~primarily~~the amount ~~through~~currently ~~increased~~reserved ~~sales~~and ofcould ~~Connectivity~~have ~~and~~a ~~Wireless~~material ~~products~~adverse effect on our business, results of operations or financial condition.

~~For~~On ~~fiscal~~August 17, ~~2004~~2009, ~~sales~~we ofmet ~~our~~with ~~Connectivity~~representatives ~~and~~from ~~Wireless~~the ~~products increased~~Office ~~67.1%~~of ~~and~~the ~~98.7%,~~Inspector ~~respectively~~General of the United States, ~~compared~~where towe ~~fiscal 2003.~~disclosed ~~The~~a ~~inclusion~~potential breach of ~~$149.2 million~~the incountry ~~sales~~of byorigin ~~KRONE~~requirements for ~~beginning~~certain onproducts ~~May 18,~~sold ~~2004,~~under asa ~~well~~supply asagreement ~~FTTX~~with ~~sales,~~the ~~accounted for~~federal 87government’s General Services Administration.8% ofWe ~~the~~self-reported ~~increase~~this inpotential ~~Connectivity~~breach ~~product~~as ~~sales~~a ~~for~~precautionary matter and it is unclear ~~fiscal~~at ~~2004.~~this ~~The~~time ~~remaining~~whether ~~increase~~any inpenalties ~~Connectivity~~will ~~sales~~be ~~was attributable~~imposed. ~~primarily~~At tothis ~~increased~~time ~~spending~~we bydo ~~our~~not ~~customers~~believe in the ~~legacy~~ultimate resolution ~~central~~of ~~office~~this ~~space.~~matter ~~Wireless~~will ~~sales~~have ~~increased primarily~~a ~~due~~material toadverse ~~growing~~impact ~~acceptance~~on our business, results of operations ~~our~~or ~~Digivance~~financial ~~product~~condition.

~~For fiscal 2004, net sales of our Wireline products decreased by 21~~Item 4.6% ~~from~~(REMOVED ~~the~~AND ~~comparable 2003 period. The decrease in Wireline~~RESERVED) product sales was caused by a combination of decreased volumes and price reductions resulting from decreased demand for certain types of products within the industry generally and competitive pressures.

~~Net~~PART ~~sales of our Professional Services segment increased by~~II 11.5% from $132.4 million in fiscal 2003 to $147.6 million in fiscal 2004. The inclusion of KRONE’s professional services business (“KRONE Services”) resulted in a $22.1 million increase in net sales in fiscal 2004. This increase, however, was partially offset by a 5.2% decline in sales of ADC’s historical professional services. Excluding KRONE Services, a significant customer of our Professional Services segment represented 11.9% of revenue in fiscal 2004 compared to 31.3% in fiscal 2003. The decreased spending by this customer, however, was largely offset by market share gains with other customers.

Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF ~~Gross~~EQUITY ~~Profit~~SECURITIES

~~Fiscal~~ Our ~~2005~~common vsstock, $0.20 ~~Fiscal~~par ~~2004~~value, is traded on The NASDAQ Global Select Market under the symbol “ADCT.” The following table sets forth the high and low sales prices of our common stock for each quarter during our fiscal years ended September 30, 2010 and 2009, as reported on that market.

Gross profit percentages were 36.0% (37.3% exclusive of the KRONE acquisition) and 39.1% (39.7% exclusive of the KRONE acquisition) during fiscal 2005 and 2004, respectively. The acquisition of FONS and OpenCell do not constitute a significant portion of 2005 gross profit. The decrease in gross profit percentage was due to increases in sales of lower margin products, many of which came to us through our acquisition of KRONE. Overall, increased sales from FTTX products and Professional Services segment, both of which are lower margin businesses, were partially offset by an increase in sales of our higher margin Connectivity and Wireless products. The mix of products we sell is variable; as a result, our future gross margin rate is difficult to predict accurately.


	2010				2009
	High		Low		High		Low
First Quarter	$	8.35	$	5.35	$	7.20	$	4.28
Second Quarter		7.55		5.18		7.52		2.47
Third Quarter		8.73		6.90		8.85		6.25
Fourth Quarter		12.74		7.55		9.78		6.90

29 As of November 19, 2010, there were 5,600 holders of record of our common stock. We do not pay cash dividends on our common stock and do not intend to pay cash dividends in the foreseeable future.

~~Fiscal 2004 vs. Fiscal 2003~~25

DuringTable fiscal 2004 and 2003, gross profit percentages were 39.1% and 35.9%, respectively. The 3.2% increase in gross profit percentage was due to a more favorable sales mix toward higher margin products and a reduction in our fixed costs of sales as a result of our restructuring activities. Contents

WeItem 6. ~~also~~SELECTED ~~benefited~~FINANCIAL ~~from production efficiencies and cost~~DATA reductions resulting from more favorable supplier pricing, which was the result of increased purchasing power due to the KRONE acquisition and the outsourcing of portions of our manufacturing operations.

The following table presents selected financial data. The data included in the following table ~~Operating~~has ~~Expenses~~been restated to exclude the assets, liabilities and results of operations of certain businesses that have met the criteria for treatment as discontinued operations. The following summary information should be read in conjunction with the Consolidated Financial Statements and related notes thereto set forth in Item 8 of this report. Due to the change in our fiscal year end, our fiscal 2009 was only 11 months.

~~Fiscal~~FIVE-YEAR ~~2005~~FINANCIAL ~~vs.~~SUMMARY Years ~~Fiscal 2004~~ended

Total operating expenses for fiscal 2005 and 2004 were $348.6 million and $277.7 million, respectively, representing 29.8% and 35.9% of net sales, respectively. KRONE operating expenses were $96.4 million and $44.8 million for fiscal 2005 and 2004, respectively. The acquisitions of FONS and OpenCell do not constitute a significant portion of fiscal 2005 operating expenses. Excluding the effect of the KRONE operating expenses, operating expenses increased 8.3% compared to fiscal 2004, mainly due to the change in selling and administration expenses discussed below.


	September 30,		September 30,			October 31,			October 31,		October 31,
	2010		2009			2008			2007		2006
	(In millions, except per share data)
Income Statement Data from Continuing Operations
Net sales	$	1,156.6	$	990.2		$	1,442.6		$	1,276.7	$	1,231.9
Gross profit		417.9		327.2			481.3			442.6		406.3
Research and development expense		69.7		60.1			76.2			69.6		70.9
Selling and administration expense		288.3		240.7			323.2			287.2		269.6
Operating income (loss)		45.9		(416.7	)		66.7			78.0		45.2
Income (loss) before income taxes		85.6		(456.0	)		(33.9	)		128.3		56.7
Provision (benefit) for income taxes		7.1		(3.1	)		6.2			3.3		(37.7	)
Income (loss) from continuing operations (1)		78.5		(452.9	)		(40.1	)		125.0		94.4
Earnings (loss) per diluted share from continuing operations (2)		0.80		(4.65	)		(0.34	)		0.95		0.80
Balance Sheet Data
Current assets		1,107.7		900.8			1,084.1			1,008.2		942.7
Current liabilities		288.7		236.1			277.9			474.1		263.9
Total assets		1,474.5		1,343.6			1,921.0			1,764.8		1,611.4
Long-term notes payable		650.8		651.0			650.7			200.6		400.0
Total long-term obligations		751.4		746.6			720.3			273.4		474.0
ADC Shareowners’ investment		429.6		356.2			914.2			1,007.6		873.5

Research and development: Research and development expenses were $71.6 million and $59.1 million for fiscal 2005 and fiscal 2004, respectively, an increase of 21.2% compared to fiscal 2004. This increase was almost entirely attributable to spending on projects related to KRONE based products. Given the rapidly changing technological and competitive environment in the communications equipment industry, continued commitment to product development efforts will be required for us to remain competitive. Accordingly, we intend to continue to allocate substantial resources, as a percentage of our net sales, to product development in each of our segments. Most of our research and development will be directed towards projects that we believe directly advance our strategic aims and have a higher probability to return our investment.


(1)		Income (loss) from continuing operations available to ADC common shareowners was $77.2, $(451.6), $(39.4), $123.5, and $93.3 for the fiscal years 2010, 2009, 2008, 2007, and 2006, respectively.

(2)		Earnings (loss) per diluted shares from continuing operations available to ADC common shareowners was $0.78, $(4.64), $(0.34), $1.04, and $0.79 for the fiscal years 2010, 2009, 2008, 2007, and 2006, respectively.

~~Selling and administration: Selling and administration expenses were $262.0~~Item ~~million and $205~~7.~~0 million~~ ~~for fiscal~~MANAGEMENT’S ~~2005~~DISCUSSION ~~and~~AND ~~fiscal~~ANALYSIS ~~2004,~~OF ~~respectively,~~FINANCIAL anCONDITION ~~increase~~AND ofRESULTS ~~27.8% (11.4%~~OF ~~exclusive of the KRONE acquisition) compared to fiscal~~OPERATIONS 2004. The increase in selling and administrative expenses is due primarily to incentive payments made to employees in fiscal 2005 that have been partially offset by a decrease in the number of leased facilities. In addition, in fiscal 2004, there were $6.0 million of one-time benefits, primarily due to bad debt recoveries for which we previously had established reserves.

InOn ~~fiscal~~July 12, ~~2005~~2010, we ~~incurred~~entered ~~added~~into ~~administrative~~an ~~expense~~Agreement and Plan of Merger with Tyco Electronics Ltd., ~~including~~a ~~external~~Swiss ~~advisory~~company, ~~fees~~and ofits $4indirect subsidiary, Tyco Electronics Minnesota, Inc.~~0 million~~ ~~associated~~(each such company ~~with~~individually ~~the~~as ~~requirements~~well toas ~~comply~~collectively, ~~with~~“Tyco ~~Section 404~~Electronics”),, ofwhich ~~the Sarbanes-Oxley~~was ~~Act~~amended as of ~~2002~~July 24, 2010. Pursuant ~~Compliance~~to ~~with~~that ~~Section~~merger agreement, on July ~~404 requires~~26, us2010, toTyco ~~conduct~~Electronics commenced a ~~thorough~~tender ~~evaluation~~offer to purchase all of our ~~internal control~~outstanding ~~over~~shares ~~financial~~of ~~reporting~~common stock at a purchase price of $12.75 ~~While~~per share in cash. The closing of the transaction has not yet taken place, although we presently expect ~~such~~it ~~fees to~~will ~~decline~~occur induring the ~~future,~~current ~~there~~calendar isquarter. anFor ~~ongoing~~more ~~need~~information ~~for~~on usthe totransactions contemplated ~~allocate~~by ~~internal~~the ~~resources~~merger ~~and~~agreement, please refer to ~~work~~ADC’s Schedule 14D-9 filed with ~~independent~~the SEC on July 26, 2010, ~~advisors~~as inwell ~~this~~as ~~process~~the various amendments to Schedule 14D-9, which are available online at www.sec.gov.

~~Impairment~~We ~~charges:~~are ~~Impairment~~a ~~charges~~leading ~~declined~~global inprovider ~~fiscal~~of broadband communications network infrastructure products ~~2005~~and ~~($0~~related services.~~3 million~~ ~~compared~~Our toproducts ~~$1.7 million~~and inservices ~~fiscal 2004).~~offer Incomprehensive ~~fiscal~~solutions ~~2005~~that weenable ~~wrote~~the delivery of high-~~off~~speed ~~certain~~Internet, ~~manufacturing~~data, video and voice communications over wireline, wireless, ~~equipment~~cable, enterprise and ~~leasehold~~broadcast ~~improvements~~networks ~~when~~for itour ~~was~~extensive ~~determined~~customer base. Our customers include public and private, wireline and wireless communications service providers, private enterprises that operate their own networks, cable television operators, broadcasters, government agencies, ~~these~~system ~~assets~~integrators ~~had~~and nocommunications ~~further~~equipment ~~value~~manufacturers and distributors.

~~Restructuring~~We ~~charges:~~sell ~~Restructuring~~our ~~charges~~products ~~of $14.7 million in fiscal 2005~~ and ~~$11.9 million~~services ~~in fiscal 2004 relate principally to employee severance~~ and ~~facility~~ ~~consolidation~~report ~~costs~~financial ~~resulting~~results ~~from~~for the ~~closure~~following ofthree ~~facilities~~operating ~~and other workforce reductions attributable to our~~segments: efforts to reduce costs. During fiscal 2005, approximately 500 employees were impacted by reductions in force, principally in our Broadband Infrastructure and Access segment. During fiscal 2004, approximately 200 employees were impacted by reductions in force, principally in corporate functions.

~~Fiscal~~• ~~2004~~Our vsConnectivity business segment designs, manufactures and sells products that generally provide the physical interconnections between network components and access points into networks. ~~Fiscal~~These ~~2003~~products connect wireline, wireless, cable, enterprise and broadcast communications networks over fiber-optic, copper (twisted pair), coaxial and wireless media.

26 Total operating expenses for fiscal 2004 and 2003 were $277.7 million and $262.0 million, respectively, representing 35.9% and 45.2% of net sales, respectively. Included in these operating expenses were

30 Table of Contents

restructuring charges of $11.9 million and $27.6 million, respectively, and impairment charges of $1.7 million and $15.6 million, respectively. KRONE operating expenses were $44.8 million in fiscal 2004, representing costs incurred from and after the close of the acquisition on May 18, 2004. Excluding KRONE, operating expenses decreased 11.1% in fiscal 2004. Although the largest factor in the decrease in operating expenses was the reduction in the amount of our restructuring and impairment charges, our operating expenses also declined due to the ongoing cost savings from those restructuring efforts.

			This operating segment’s net sales in fiscal 2010 were $870.5 million, which represented 75.3% of our total net sales for this time period. Our acquisition of Century Man in fiscal 2008 was integrated into this segment.

	•		Our Network Solutions business segment designs, manufactures, sells, installs and services products that help improve the coverage and capacity of wireless networks. These products improve signal quality, increase coverage and capacity, enhance the delivery and capacity of networks and help reduce the capital and operating costs of delivering wireless services. Applications for these products include in-building solutions and outdoor coverage solutions. This operating segment’s net sales in fiscal 2010 were $113.3 million, which represented 9.8% of our total net sales for this time period. Our acquisition of LGC Wireless in fiscal 2008 was integrated into this segment.

	•		Our Professional Services business segment provides integration services for broadband and multi-service communication over wireline, wireless, cable and enterprise networks. Our professional services segment helps customers plan, deploy and maintain communications networks through delivery of internet data, video and voice services. This operating segment’s net sales in fiscal 2010 were $172.8 million, which represented 14.9% of our total net sales for this time period.

~~Research~~We ~~and~~examine ~~development:~~many ~~Research~~financial, operational, and ~~development expenses~~other ~~were~~metrics ~~$59.1 million~~to ~~for~~evaluate ~~fiscal~~both ~~2004~~our ~~compared to~~financial ~~$59.9 million~~condition ~~for~~and ~~fiscal~~our ~~2003,~~financial aperformance. ~~decrease~~The ofresults ~~1.3%.~~discussed ~~KRONE represented~~below ~~5.8%~~are offor the ~~fiscal~~12 months ~~2004~~ended September 30, ~~expense.~~2010 Wecompared ~~allocate substantial~~to ~~resources~~the 11 months ended September 30, as2009, aand ~~percentage~~highlight the results of ~~net~~those ~~sales,~~financial tometrics ~~product development~~that inwe ~~each~~feel ofare ~~our~~most ~~operating~~important ~~segments.~~in these evaluations:

~~Selling~~• ~~and~~Net ~~administration~~Sales were approximately $1.2 Billion: ~~Selling~~Our net sales were approximately $1.2 billion in fiscal 2010, up 16.8% compared to net sales of approximately $1.0 billion in fiscal 2009. Net sales increased 10.6% in our Connectivity business segment, 69.6% in our Network Solutions business segment and ~~administration expenses~~26.8% in our Professional Services business segment. • Gross Margins were 36.1%: Gross margins increased 29to 36.1% for fiscal 2010 compared to 33.0% ~~from~~for fiscal 2009 due primarily to our cost reduction efforts and improvements in operational efficiencies, along with the impact of higher sales volumes and improved product mix. • Operating Income of $~~158~~45.9 Million: We generated operating income of $45.9 million in fiscal ~~2003~~ 2010, compared to an operating loss of $~~205~~(416.0 7) million in fiscal ~~2004~~2009. ~~KRONE~~Operating ~~represented~~margin 93was 4.90% of ~~the~~net ~~increase~~sales in fiscal ~~2004~~2010, compared to (42.1)% of net sales in fiscal 2009. The ~~remaining~~operating ~~increase~~loss in fiscal 2009 primarily was due to impairment charges of $3408.9 million related to goodwill and other long-lived assets. • Income from Continuing Operations of $78.5 Million, or $0.80 per Diluted Share: We generated income from continuing operations of $78.5 million, or $0.80 per diluted common share, in fiscal 2010, compared to a loss from continuing operations of $452.9 million, or $(4.65) per diluted common share, in fiscal 2009. The loss from continuing operations in fiscal 2009 primarily was due to impairment charges of $408.9 million related to goodwill and other long-lived assets. • Operating Cash Flow from Continuing Operations of $140.8 Million: We generated operating cash flow from continuing operations of $140.8 million in fiscal 2010, compared to $97.2 million in fiscal 2009. • Cash and Cash Equivalents of ~~KRONE~~$518.1 ~~integration~~Million: ~~costs~~As of September 30, 2010 our cash and cash equivalents totaled $6518.6 1 million, which represented a decrease of ~~increased~~$17.4 ~~incentive~~million ~~accruals~~compared to $535.5 million as of September 30, ~~partially~~ 2009. The decrease in our cash and cash equivalents was primarily driven by the $152.5 million of cash used in investing activities, primarily for the purchase of available-for-sale securities, offset by $4136.4 6 million of ~~decreased~~cash ~~facility~~generated ~~costs resulting~~by ~~from~~our ~~ongoing~~operating ~~restructuring~~activities.

27 Impairment charges: Impairment charges represent a write-down of the carrying value of fixed assets to their estimated fair market value. These charges declined in fiscal 2004 compared to fiscal 2003 ($1.7 million compared to $15.6 million). In fiscal 2004, we recorded an impairment charge for a building included in assets held for sale when it was determined the carrying value for the property exceeded market value. The fair market value was determined based on an examination of sales prices for similar properties. Impairment charges affected both the Broadband Infrastructure and Access segment and the Professional Services segment.

FiscalTable 2003 impairment charges consisted solely of property and equipment impairments, which impacted both the Broadband Infrastructure and Access segment and the Professional Services segment, and were caused by our plan to dispose of excess equipment. The fair market value was determined using external sources, primarily proceeds received from previous equipment sales or estimates of discounted cash flows. Contents

~~Restructuring~~Results ~~charges: Restructuring charges represent the direct costs~~ of ~~consolidating certain leased facilities and~~Operations severance costs for workforce reductions. Our restructuring charges also declined significantly in fiscal 2004 compared to fiscal 2003 ($11.9 million compared to $27.6 million). The fiscal 2004 restructuring charges consisted of $9.3 million of employee severance for workforce reductions and $2.6 million of facility consolidation charges. Employee terminations affected both the Broadband Infrastructure and Access segment and the Professional Services segment.

The ~~$27.6~~results discussed below are for the 12 ~~million~~months ofended ~~restructuring~~September 30, ~~charges~~2010 incompared ~~fiscal~~to ~~2003~~the 11 ~~related~~months toended ~~our~~September 30, ~~actions~~2009 and the 12 months ended October 31, 2008. Due to ~~downsize~~the change in our fiscal ~~business~~year in ~~response~~2009, tofiscal 2009 was an 11 month year and many differences in the reported results ~~declining~~between ~~sales.~~fiscal ~~These~~2010 ~~restructuring~~and ~~charges~~fiscal ~~include~~2009, as well as the differences between fiscal 2009 and fiscal ~~$23~~2008, are directly impacted by the one month difference.~~5 million~~ We believe that our variance explanations, which in many cases discuss the significant impact of ~~employee~~the ~~severance~~general downturn in the global economy, would not be significantly different than if we were comparing 12 month periods for fiscal years 2010, 2009, and $42008.1 The following table shows the percentage change in net sales and expense items from continuing operations for the three fiscal years ended September ~~million~~30, 2010, September 30, of2009 ~~facility~~and ~~consolidation~~October 31, ~~charges.~~2008:

See Note 16 to the Consolidated Financial Statements in Item 8 of this Form 10-K for a further discussion of our impairment and restructuring charges.


										Percentage
										Increase (Decrease)
										Between Periods
	2010			2009			2008			2010 vs. 2009			2009 vs. 2008
	(In millions)
Net sales	$	1,156.6		$	990.2		$	1,442.6			16.8	%		(31.4	)%
Cost of sales		738.7			663.0			961.3			11.4			(31.0	)

Gross profit		417.9			327.2			481.3			27.7			(32.0	)

Gross margin		36.1	%		33.0	%		33.4	%
Operating expenses:
Research and development		69.7			60.1			76.2			15.9			(21.1	)
Selling and administration		288.3			240.7			323.2			19.8			(25.5	)
Impairment charges		0.9			408.9			4.1			—			—
Restructuring charges		13.1			34.2			11.1			(61.7	)		208.1

Total operating expenses		372.0			743.9			414.6			(50.0	)		79.4

Operating income (loss)		45.9			(416.7	)		66.7			111.0			(724.7	)
Operating margin		4.0	%		(42.1	)%		4.6	%
Other income (expense), net:
Interest income (expense), net		(22.9	)		(17.4	)		2.8			31.6			(721.4	)
Other, net		62.6			(21.9	)		(103.4	)		385.8			78.8

Income (loss) before income taxes		85.6			(456.0	)		(33.9	)		118.8			—
Provision (benefit) for income taxes		7.1			(3.1	)		6.2			329.0			(150.0	)

Income (loss) from continuing operations	$	78.5		$	(452.9	)	$	(40.1	)		117.3			—

~~Other~~ The ~~Income~~table below sets forth our net sales from continuing operations for fiscal 2010, ~~Net~~2009 and 2008 for each of our three reportable segments described in Item 1 of this report.

Fiscal 2005 vs. Fiscal 2004


							Percentage
							Increase (Decrease)
	Net Sales						Between Periods
Reportable Segment	2010		2009		2008		2010 vs. 2009			2009 vs. 2008
	(In millions)
Connectivity
Product	$	866.6	$	785.4	$	1,151.8		10.3	%		(31.8	)%
Service		3.9		1.7		—		129.4			—

Total Connectivity		870.5		787.1		1,151.8		10.6			(31.7	)

Network Solutions
Product		87.0		52.4		88.1		66.0			(40.5	)
Service		26.3		14.4		21.1		82.6			(31.8	)

Total Network Solutions		113.3		66.8		109.2		69.6			(38.8	)

Professional Services
Product		44.4		37.4		49.1		18.7			(23.8	)
Service		128.4		98.9		132.5		29.8			(25.4	)

Total Professional Services		172.8		136.3		181.6		26.8			(24.9	)

Total Net Sales	$	1,156.6	$	990.2	$	1,442.6		16.8	%		(31.4	)%

28 ~~Other income, net for fiscal 2005 and 2004 was $20.4 million and $11.0 million, respectively.~~

TheTable net interest income (expense) category represents interest income on cash and cash equivalents and available-for-sale securities as well as interest expense on debt. Interest income was $18.3 million in fiscal 2005 compared to $12.4 million in fiscal 2004. Interest income increased in fiscal 2005 due to higher yields on our short-term investments. Interest expense was $11.2 million in fiscal 2005 compared to $8.8 million in fiscal 2004. Interest expense increased in fiscal 2005 due to an increase in the interest rate on the variable rate convertible notes. In addition, we recorded both a $9.0 million gain on a sale of a note receivable and a $4.2 million gain on the sale of fixed assets in other income. Contents

31Net Sales

Fiscal ~~2004~~2010 vs. Fiscal ~~2003~~2009

~~Other~~Our ~~income,~~ net sales increase for fiscal ~~2004~~2010 ~~and~~as ~~2003~~compared to fiscal 2009 was driven by customer ~~$11.0 million~~spending increases in a majority of our geographies and ~~$9.1 million,~~products ~~respectively~~and the fact that our 2010 results included one more month of activity versus 2009.

~~Interest~~International ~~income~~sales ~~was~~comprised ~~$12~~39.4 ~~million~~% and $940.~~7 million~~6% of our net sales in fiscal ~~2004~~2010 and ~~2003,~~fiscal 2009, respectively. ~~Interest~~As ~~income~~a ~~increased~~result ~~in fiscal~~of ~~2004~~significant ~~compared~~international tosales, ~~fiscal~~our ~~2003~~net ~~primarily~~sales ~~due~~have tobeen ~~higher~~impacted ~~average~~positively ~~cash~~in ~~balances~~recent ~~maintained~~quarters ~~during~~from the ~~first~~relative ~~half~~weakening of ~~fiscal 2004~~the ~~and~~U.S. ~~higher~~dollar ~~yields~~against ona ~~our~~majority ~~short-term investments. Interest~~of ~~expense~~other ~~was $8~~currencies.~~8 million~~ ~~and~~Changes ~~$3.6 million~~ in ~~fiscal 2004~~foreign ~~and~~currency ~~2003,~~exchange ~~respectively.~~rates ~~Interest expense~~ increased sales in fiscal ~~2004~~2010 ~~due to inclusion of interest expense for the~~by ~~convertible~~approximately ~~notes~~$10.4 million ~~for~~as acompared ~~full~~to ~~year~~fiscal 2009.

~~Write-down,~~ Our ~~sale~~Connectivity orproducts’ ~~conversion~~net sales increase of ~~investments~~10.6% in fiscal 2010 as compared to fiscal 2009 primarily was due to the additional month in fiscal 2010 results.

~~During~~Our ~~fiscal~~Network ~~2005,~~Solutions ~~2004~~net ~~and~~sales ~~2003,~~increase weof ~~sold~~69.6% ~~common~~in ~~stock~~fiscal ~~of certain~~2010 ~~companies~~as incompared ~~our~~to ~~portfolio~~fiscal ~~and~~2009 was ~~two~~driven ~~investments~~primarily ~~in non-publicly~~by ~~traded~~strong ~~securities~~customer ~~for~~spending ~~aggregate~~that ~~gains~~drove ~~of $0.0 million,~~growth ~~$4.8 million~~in both our in-building and outdoor $0wireless products.~~9 million,~~ ~~respectively.~~

~~Acquisitions~~ Our Professional Services net sales increase of 26.8% in fiscal 2010 as compared to fiscal 2009 was due primarily to increased spending and an expanded presence with a key customer.

OnFiscal ~~August 26,~~2009 ~~2005 we completed the acquisition of FONS, a leading manufacturer of high-performance passive optical components and fiber optic cable packaging, distribution and connectivity solutions~~vs. ~~With~~Fiscal ~~the addition of FONS, we become one~~2008 ~~of the largest suppliers of FTTX solutions in the United States. The results of FONS subsequent to August 26, 2005 are included in our results of operations.~~

InOur ~~this~~net ~~transaction,~~sales wedecrease ~~acquired all of the outstanding shares of FONS in exchange~~ for ~~cash~~fiscal ~~paid~~2009 ofas ~~$166.1 million~~compared ~~(net~~to ~~of cash~~fiscal ~~acquired)~~2008 ~~and~~was ~~certain~~driven ~~assumed~~by ~~liabilities of FONS.~~significant ~~$34.0 million~~sales ofdeclines ~~the purchase price will be held~~ in ~~escrow for~~all upreporting tosegments ~~two~~and ~~years~~our toshortened ~~address~~2009 ~~potential~~fiscal ~~indemnification claims of ADC~~year. InThese ~~addition,~~decreases ~~ADC placed approximately~~are ~~$6.7 million~~due ~~into~~primarily ~~a trust account~~ to bethe ~~paid~~general todownturn ~~FONS employees~~of ~~over~~ the ~~course~~global ~~of nine months. As of October 31~~economy, ~~2005,~~ ~~$4.1 million~~which ~~had~~extended ~~been~~across ~~paid~~the tomajority ~~FONS employees. We acquired $83.3 million~~ of ~~intangible assets as part of the~~ ~~purchase (see Note 7 to~~ the ~~Consolidated~~geographic ~~Financial Statements~~markets inwe ~~Item 8~~served ofduring ~~this Form 10-K~~fiscal ~~for further discussion of intangible assets)~~2009. ~~$3.3 million was allocated to in-process research and development for new technology development~~Geographically, ~~which~~we ~~was~~experienced ~~immediately written-off.~~particular ~~Goodwill~~weakness ~~of $70.9 million was recorded~~ in the ~~transaction and~~Europe, ~~assigned~~Middle toEast, ~~our~~Africa ~~Broadband~~(“EMEA”) ~~Infrastructure~~region and ~~Access~~Latin ~~segment. None of this goodwill~~America, ~~intangible~~partially ~~assets~~offset ~~and in-process research~~by ~~and~~relative ~~development~~strength isin ~~deductible for tax purposes~~China.

OnInternational ~~May 6,~~sales ~~2005,~~comprised we40.6% ~~completed~~and ~~the~~41.0% ~~acquisition~~ of ~~OpenCell,~~our ~~a manufacturer~~net ofsales ~~digital~~in ~~fiber-fed~~fiscal ~~distributed~~2009 ~~antenna systems~~ and ~~shared~~fiscal ~~multi-access~~2008, respectively. ~~radio~~As ~~frequency~~a ~~network~~result ~~equipment.~~of ~~The acquisition~~significant ofinternational ~~OpenCell~~sales, ~~will~~our ~~allow~~net ussales towere ~~incorporate~~impacted ~~OpenCell’s~~negatively ~~technology~~due ~~into~~to ~~our~~the ~~existing~~relative ~~Digivance~~strengthening ~~wireless solutions,~~of ~~which~~the ~~are~~U.S. ~~used~~dollar byagainst ~~wireless~~a ~~carriers~~majority toof ~~extend network~~other ~~coverage~~currencies ~~and~~in ~~accommodate~~fiscal ~~ever-growing~~2009. ~~capacity~~Changes ~~demands.~~in ~~The results~~foreign ofcurrency ~~OpenCell~~exchange ~~subsequent~~rates toreduced ~~May 6,~~sales ~~2005~~in ~~are~~fiscal ~~included~~2009 inby ~~our~~approximately ~~results~~$34.0 million ofas ~~operations~~compared to fiscal 2008.

We Our ~~purchased~~Connectivity ~~OpenCell~~products’ ~~from~~net ~~Crown~~sales ~~Castle~~decrease ~~International Corp for $7.1 million~~ in ~~cash~~fiscal ~~and~~2009 ~~certain~~as ~~assumed~~compared ~~liabilities. Included~~to infiscal ~~the~~2008 ~~purchase~~ was ~~$4.7 million of intangible~~ ~~assets~~due ~~(see Note 7~~ to ~~the~~a ~~Consolidated~~decrease ~~Financial Statements~~ in ~~Item 8~~customer ofspending ~~this Form 10-K~~driven ~~for further~~by ~~discussion~~the ofweak ~~intangible~~global ~~assets).~~economic Noenvironment ~~amounts~~that ~~were~~existed ~~allocated~~at tothat ~~in-process~~time ~~research~~ and ~~development,~~a ~~because OpenCell~~shortened ~~did~~fiscal ~~not have any new products in development at the time of the acquisition~~year. ~~No goodwill was recorded in the transaction.~~

On Our ~~May 18,~~Network ~~2004,~~Solutions wenet ~~completed~~sales ~~the~~decrease ~~acquisition~~in offiscal ~~KRONE~~2009 ~~from GenTek,~~as ~~Inc.~~compared ~~This~~to ~~acquisition~~fiscal ~~increased~~2008 ~~our~~was ~~network~~driven, ~~infrastructure~~in ~~business~~part, ~~and~~by ~~substantially~~our ~~expanded~~decision ~~our~~to ~~presence in~~discontinue ~~the~~certain ~~international~~outdoor ~~marketplace.~~wireless ~~The~~product ~~results~~lines ofin ~~KRONE~~the fourth ~~subsequent~~quarter toof ~~May 18~~fiscal 2008, ~~2004~~the ~~are~~global ~~included~~economic indownturn, ~~our~~and ~~results~~a ~~of operations~~shortened fiscal year.

In Our ~~this~~Professional ~~transaction,~~Services wenet ~~acquired~~sales ~~all~~decrease ~~of the outstanding capital stock of KRONE~~ in ~~exchange~~fiscal ~~for~~2009 ~~$294.4 million~~as incompared ~~cash~~to ~~(net of~~fiscal ~~cash~~2008 ~~acquired)~~was ~~and certain assumed liabilities of KRONE. The~~due ~~purchase included $78.1 million of intangible assets (see Note 7~~ to ~~the~~decreased ~~Consolidated~~spending ~~Financial~~from ~~Statements~~a ~~in Item 8~~key ofcustomer ~~this Form 10-K for further discussion of intangible assets). No amounts were allocated to in-process research~~ and ~~development,~~a ~~because~~shortened ~~KRONE did~~fiscal ~~not have any new products in development at the time of the~~ year.

32Gross Profit

~~acquisition.~~ Fiscal ~~Goodwill~~2010 ~~of $169~~vs.~~6 million~~ ~~was~~Fiscal ~~recorded in the~~2009 ~~transaction and assigned to our Broadband Infrastructure and~~ ~~Access segment. Substantially none of this goodwill is deductible for tax purposes.~~

Gross profit percentages were 36.1% and 33.0% during fiscal 2010 and fiscal 2009, Norespectively. The increase in gross margins was due to a combination of operating efficiencies realized across most of our businesses, leverage from increased volumes, and an improved product mix. The operating efficiencies were ~~acquired~~achieved ~~during~~through a combination of our cost reduction initiatives begun in fiscal ~~2003~~2009 and an on-going commitment to operational excellence.

~~Discontinued operations~~29

InTable the third quarter of fiscal 2005, we sold our SIUK business. In the first quarter of fiscal 2005, we sold our Metrica service assurance software group. During fiscal 2004, we sold our BroadAccess40 business, the business related to our Cuda cable modem termination system product line and related FastFlow Broadband Provisioning Manager software, and the business related to our Singl.eView product line. In accordance with SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” these businesses were classified as discontinued operations in fiscal 2005 and 2004 and the financial results are reported separately as discontinued operations for all periods presented. Contents

~~ADC~~ Fiscal ~~Systems~~2009 ~~Integration~~vs. UKFiscal ~~Limited~~2008

~~During~~Gross ~~the~~profit ~~third~~percentages ~~quarter~~were ~~of fiscal 2005, we sold our SIUK business for a nominal amount~~33.0% Asand ~~of October 31, 2005, a loss of $6~~33.~~3 million~~4% ~~has~~during ~~been~~fiscal ~~recorded~~2009 inand ~~connection~~fiscal ~~with~~2008, ~~the sale~~respectively. The ~~transaction~~decrease ~~closed~~in ongross ~~May 24,~~profit ~~2005.~~was ~~This business~~driven ~~had~~primarily ~~been~~by ~~included~~a decrease in ~~our~~sales ~~Professional~~volumes ~~Services segment.~~due Weto ~~classified~~the ~~this~~global ~~business~~economic asdownturn, apartially ~~discontinued~~offset ~~operation~~by inour ~~the third~~cost ~~quarter~~reduction ~~of fiscal 2005~~initiatives.

~~Metrica~~Operating Expenses

~~During~~Fiscal ~~the~~2010 fourth quarter of fiscal 2004, we entered into an agreement to sell the business related to our Metrica service assurance software group to Vallent Corporation (formerly known as WatchMark Corporation) (“Vallent”) for a cash purchase price of $35vs.~~0 million,~~ ~~subject~~Fiscal ~~to purchase price~~2009 ~~adjustments, and a $3.9 million equity interest in Vallent.~~ The transaction closed on November 19, 2004. The equity interest constitutes less than a five percent ownership in Vallent and is therefore accounted for under the cost method. This business had been included in our Professional Services segment. We classified this business as a discontinued operation in the fourth quarter of fiscal 2004. We recognized a gain on the sale of $32.6 million.

~~BroadAccess40~~ The results discussed below are for the 12 months ended September 30, 2010 compared to 11 months ended September 30, 2009. Total operating expenses for fiscal 2010 and fiscal 2009 represented 32.2% and 75.1% of net sales, respectively. Our fiscal 2009 operating results included a $408.9 million impairment of goodwill and intangible and fixed assets. As discussed below, operating expenses include research and development, selling and administration expenses and restructuring and impairment charges.

Research and development: Research and development expenses for fiscal 2010 and fiscal 2009 ~~During~~represented ~~the~~6.0% ~~first~~and ~~quarter~~6.1% of ~~fiscal~~net ~~2004~~sales, werespectively. ~~entered~~Research ~~into~~and ~~an agreement~~development expenses increased to ~~sell~~$69.7 million ~~our~~in ~~BroadAccess40~~fiscal ~~business,~~2010 ~~which~~compared ~~was~~to ~~included~~ $60.1 million in ~~our~~fiscal ~~Broadband~~2009 ~~Infrastructure~~due to new product development initiatives and ~~Access~~the ~~segment~~fact that fiscal 2009 was a shortened year. ~~This~~Given the rapidly ~~transaction~~changing ~~closed~~technological onand ~~February 24~~competitive environment in the communications equipment industry, continued ~~2004.~~commitment Weto ~~classified~~product ~~this~~development efforts will be required for us to remain competitive. ~~business~~Accordingly, we intend to continue to allocate substantial resources, as a ~~discontinued~~percentage ~~operation~~of ~~beginning~~our innet sales, ~~the~~to ~~first quarter~~product development. Most of ~~fiscal~~our ~~2004.~~research Wehas ~~recorded~~been adirected ~~loss~~towards onprojects that we believe directly advance our strategic aims in segments in the ~~sale~~marketplace ofthat we believe are most $6likely to grow.~~8 million.~~

~~The~~Selling ~~purchasers~~and ofadministration: ~~the~~Selling ~~BroadAccess40~~and ~~business~~administration ~~acquired~~expenses ~~all~~for offiscal ~~the~~2010 and fiscal ~~capital~~2009 ~~stock~~represented of24.9% ~~our~~and ~~subsidiary~~24.3% ~~that~~of ~~operated~~net ~~this~~sales, ~~business~~respectively. Selling and ~~assumed~~ ~~substantially~~administration ~~all~~expenses increased ~~associated~~to ~~liabilities,~~$288.3 million ~~with~~in ~~the exception~~fiscal of2010 acompared to $7240.57 million ~~note~~in ~~payable~~fiscal ~~that~~2009. weThis ~~paid in~~increase ~~full~~was ~~prior~~due to ~~the~~a ~~closing~~combination of ~~the~~higher ~~transaction.~~stock-based ~~The~~compensation ~~purchasers issued~~expense aand ~~promissory~~increased ~~note~~employee incentive ~~for~~expenses of approximately $342.84 million ~~that~~due ~~was~~to ~~fully paid~~the tofact usfiscal in2010 ~~May~~financial ofperformance was ~~2005~~above target levels.

~~Cuda/~~ Restructuring ~~FastFlow~~charges: Restructuring charges relate principally to employee severance and facility consolidation costs resulting from the closure of leased facilities and other workforce reductions attributable to our efforts to reduce costs. In fiscal 2009, due to the global economic downturn, we expanded our restructuring efforts globally and continued to execute on our efforts to streamline our operations, primarily through reductions in headcount. During fiscal 2010 and 2009, we terminated the employment of approximately 336 and 750 employees, respectively, through reductions in force. We have accrued costs for actions that are probable of occurring and for which the cost can be reasonably estimated. In fiscal 2009, we recorded $33.1 million of severance charges. During fiscal 2010, as the plans begun in fiscal 2009 were finalized, we recorded an additional $11.8 million of severance charges. The costs of these reductions have been funded through cash from operations. These charges have impacted each of our reportable segments.

~~During~~Facility ~~the~~consolidation ~~third~~and ~~quarter~~lease oftermination ~~fiscal~~costs ~~2004,~~represent wecosts ~~entered~~associated ~~into~~with anour ~~agreement~~decision to ~~sell~~consolidate ~~the~~and ~~business~~close ~~related~~duplicative toor ~~our~~excess ~~Cuda~~manufacturing ~~cable modem termination system product line~~ and ~~related~~office ~~FastFlow Broadband Provisioning Manager software to BigBand Networks, Inc~~facilities. ~~(“BigBand”).~~ ~~This transaction closed on June 29,~~During ~~2004.~~fiscal ~~The~~2010 ~~business had been included in our Broadband Infrastructure~~ and ~~Access segment. In consideration for this sale~~2009, we ~~were~~incurred ~~issued~~charges ~~a non-voting minority interest in BigBand, which has a nominal value. We also provided BigBand with a non-revolving credit facility~~ of ~~up to~~ $121.03 million ~~with~~and ~~a term of three years~~$1. ~~As of October~~1 31million, ~~2005~~respectively, ~~$7.0 million~~ ~~was~~due ~~drawn~~to our ondecision ~~the~~to ~~credit~~close ~~facility.~~unproductive ~~We classified~~and ~~this~~excess ~~business~~facilities asand abecause ~~discontinued~~of ~~operation beginning in~~ the ~~third~~continued ~~quarter~~softening of real ~~fiscal~~estate ~~2004.~~markets, Wewhich ~~recorded~~resulted ain ~~loss~~lower onsublease ~~the sale of $4~~income.~~9 million.~~

33 Impairments: Goodwill is tested for impairment annually, or more frequently if potential interim indicators exist that could result in impairment. We perform impairment reviews at a reporting unit level and use a discounted cash flow model based on management’s judgment and assumptions to determine the estimated fair value of each reporting unit. Our three operating segments, Connectivity, Network Solutions and Professional Services are considered the reporting units. An impairment loss generally would be recognized when the carrying amount of the reporting unit’s net assets exceeds the estimated fair value of the reporting unit.

~~Singl~~ We record impairment losses on long-lived assets used in operations and finite lived intangible assets when events and circumstances indicate the assets might be impaired and the undiscounted cash flows estimated to be generated by those assets are less than their carrying amounts.~~eView~~ Any impairment loss is measured by comparing the fair value of the asset to its carrying amount. There were no material impairments of goodwill, intangible assets, or long-lived assets during fiscal year 2010.

During ~~the~~fiscal ~~third~~years ~~quarter~~2010 ofand ~~fiscal 2004~~2009, we ~~entered~~recorded ~~into~~impairment ~~an agreement~~charges ~~to sell the business related to our Singl.eView product line to Intec Telecom Systems PLC (“Intec”) for a cash purchase price~~ of $740.59 million, ~~subject~~and ~~to purchase price adjustments~~$408. ~~The transaction closed on~~9 ~~August 27~~million, ~~2004~~respectively. ~~This~~See ~~business~~Note ~~had~~7 ~~been included in our Professional Services segment. We also agreed~~ to ~~provide Intec with a $6.0 million non-revolving credit facility with a term of 18 months. As of October 31, 2005, $4.0 million was drawn on~~ the ~~credit~~financial ~~facility.~~statements ~~We classified~~for ~~this business as~~ a ~~discontinued~~discussion ~~operation in the third quarter~~ of ~~fiscal 2004. In~~ the ~~fourth quarter of fiscal 2004, we recognized a gain on the sale of~~ $61408.~~7 million. In~~9 ~~fiscal 2005, we recognized an income tax benefit of $3.7~~ million ~~from~~impairment ~~the~~charges ~~resolution~~recorded ofin ~~certain~~fiscal ~~income tax contingencies related to Singl~~2009.~~eView. In connection with the~~ ~~sale, the parties agreed to a post closing financial true-up mechanism related to certain working capital measurements.~~

30 ~~The financial results of our BroadAccess40, Cuda/ FastFlow, Singl.eView, Metrica and SIUK businesses included in discontinued operations are as follows (in millions):~~

	2005			2004			2003
Revenue	$	8.4		$	113.9		$	198.7
Loss from discontinued operations	$	(1.3	)	$	(67.2	)	$	(36.9	)
Gain on sale of discontinued operations, net		26.5			50.0			—
Gain (loss) from discontinued operations	$	25.2		$	(17.2	)	$	(36.9	)

NoFiscal ~~businesses~~2009 ~~were~~vs. ~~discontinued~~Fiscal ~~during fiscal 2003.~~2008

Total operating expenses for fiscal 2009 and fiscal 2008 represented 75.1% and 28.7% of net ~~Income~~sales, ~~Taxes~~respectively. Our fiscal 2009 operating results included a $408.9 million impairment of goodwill, intangible assets and fixed assets. As discussed below, operating expenses include research and development, selling and administration expenses and restructuring and impairment charges.

~~Fiscal~~ Research ~~2005~~and vsdevelopment: Research and development expenses for fiscal 2009 and fiscal 2008 represented 6.1% ~~Fiscal~~and ~~2004~~5.3% vsof net sales, respectively. ~~Fiscal~~Research ~~2003~~and development expenses decreased to $60.1 million in fiscal 2009 compared to $76.2 million in fiscal 2008, which primarily was a result of our cost reduction initiatives.

~~Note 10~~Selling toand ~~the~~administration: ~~Consolidated~~Selling ~~Financial~~and ~~Statements~~administration inexpenses for fiscal 2009 and fiscal ~~Item 8~~2008 represented 24.3% and 22.4% of ~~this~~net sales, respectively. Selling and administration expenses ~~Form~~decreased to $240.7 ~~10-K describes~~million ~~the~~in ~~items~~fiscal ~~which~~2009 ~~have~~compared ~~impacted~~to $323.2 million in fiscal 2008. This decrease was due primarily to our ~~effective~~cost ~~income~~reduction ~~tax~~initiatives, which included workforce reductions and ~~rate~~significant ~~for~~decreases ~~fiscal~~in ~~2005~~discretionary spending, ~~2004~~as well as a decrease in incentives and acquisition ~~2003~~amortization.

AsRestructuring acharges: ~~result~~Restructuring ofcharges ~~our~~relate ~~cumulative~~principally ~~losses~~to inemployee ~~fiscal~~severance ~~2001~~ and facility ~~2002~~consolidation ~~and the~~costs ~~full~~resulting ~~utilization~~from the closure of ~~our~~leased ~~loss~~facilities ~~carryback~~and ~~potential,~~other weworkforce ~~concluded~~reductions ~~during~~attributable ~~the~~to ~~third~~our ~~quarter~~efforts ofto reduce costs. In fiscal ~~2002~~2009, ~~that~~due ato ~~full~~the global economic ~~valuation~~downturn, ~~allowance~~we ~~against~~expanded our ~~net~~restructuring ~~deferred~~efforts ~~tax~~globally ~~assets~~and ~~was~~continued to execute on our efforts to ~~appropriate~~streamline our operations, primarily through reductions in headcount. ~~Since~~During ~~the~~fiscal ~~third~~2009 ~~quarter~~and 2008, we terminated the employment of approximately 750 and 550 employees, respectively, through reductions in force. Accordingly, in fiscal ~~2002~~2009, we ~~have~~recorded $33.1 million of severance charges, ~~continued~~of towhich ~~provide~~$12.8 million arelated ~~nearly~~to ~~full~~certain ~~valuation~~components ~~allowance~~of ~~against~~ our ~~net~~restructuring ~~deferred~~efforts ~~tax~~which ~~assets.~~were considered ~~See~~probable ~~Note 10~~and estimable and expected to ~~the Consolidated~~take ~~Financial~~place ~~Statements~~during infiscal ~~Item 8~~2010. The costs of ~~this~~these ~~Form 10-K~~reductions ~~for further~~were ~~information~~funded ~~regarding~~through ~~the~~cash ~~valuation~~from ~~allowance~~operations. These charges have impacted each of our reportable segments.

WeFacility ~~recorded~~consolidation anand ~~income~~lease ~~tax~~termination ~~provision~~costs ~~totaling~~represent ~~$7.2 million and~~costs ~~$2.0 million~~associated ~~for~~with ~~fiscal~~our decision ~~2005~~to consolidate and ~~2004,~~close ~~respectively, primarily~~duplicative ~~attributable~~or toexcess ~~our~~manufacturing ~~foreign~~and ~~operations~~office facilities. ~~The~~During fiscal ~~income~~2009 ~~tax provision~~and ~~attributable~~2008, towe ~~our~~incurred Ucharges of $1.S1 million and $0.7 ~~operations~~million, isrespectively, ~~minimal~~due to ~~since~~our ~~the~~decision ~~tax~~to onclose ~~this~~unproductive ~~income~~and isexcess ~~offset~~facilities ~~with~~and because of the ~~realization~~continued softening of ~~deferred~~real ~~tax~~estate ~~assets~~markets, which ~~have~~resulted ain ~~full~~lower ~~valuation~~sublease ~~allowance~~income.

InDuring fiscal ~~2003~~years 2009 and 2008, we recorded animpairment ~~income~~charges ~~tax~~of ~~benefit~~$408.9 million ~~totaling~~ and $54.1 million, respectively. ~~This~~See ~~benefit~~Note is7 ~~primarily~~to ~~attributable~~the tofinancial statements for a discussion of the $408.9 ~~reversal~~million impairment of ~~accrued~~goodwill, ~~income~~intangible ~~tax~~and ~~liabilities~~fixed ~~resulting~~assets ~~from~~recorded ~~the~~in fiscal 2009. In fiscal ~~finalization~~2008, we recorded impairment charges of ~~federal,~~$4.1 million ~~state~~primarily ~~and~~to ~~foreign~~write-off ~~income~~certain ~~tax~~intangible ~~examinations~~assets related to the exit of certain of our outdoor wireless product lines in our Network Solutions segment.

Other Income (~~Loss~~Expense), ~~from Continuing Operations~~Net

~~Income~~Other ~~from~~income ~~continuing operations was $85.5 million~~ (~~or $0.72 per diluted share~~expense), net for fiscal ~~2005~~2010, ~~compared~~2009 ~~to income~~and ~~from~~2008 ~~continuing~~was ~~operations of~~ $3339.67 million, ~~(or~~ $0(39.~~29 per diluted share~~3) ~~for fiscal 2004. Loss from~~million ~~continuing~~and ~~operations was~~ $(39100.86) million, ~~(or $(0~~respectively.~~35)~~ ~~per diluted~~The ~~share)~~following provides details for ~~fiscal~~the ~~2003.~~respective periods:


	2010			2009			2008
	(In millions)
Interest income on investments	$	4.5		$	8.4		$	31.0
Interest expense on borrowings		(27.4	)		(25.8	)		(28.2	)

Interest income (expense), net		(22.9	)		(17.4	)		2.8

Foreign exchange (loss)		(4.4	)		(1.0	)		(1.8	)
Gain realized on sale of available-for-sale securities		7.5			—			—
Loss recognized on impairment of available-for-sale securities		(3.1	)		(18.4	)		(100.6	)
Settlement of auction rate securities claims, net of $2.1 million in fees		54.4			—			—
Gain on sale of product line		15.9			—			—
Write-down of cost method investment		(5.3	)		(3.0	)		—
Gain (loss) on sale of fixed assets		(1.4	)		0.9			(0.5	)
Other		(1.0	)		(0.4	)		(0.5	)

Subtotal		62.6			(21.9	)		(103.4	)

Total other income (expense), net	$	39.7		$	(39.3	)	$	(100.6	)

31 ~~Segment Disclosures~~

BroadbandTable Infrastructureof and Access SegmentContents

~~Detailed~~The ~~information~~change ~~regarding~~in ~~our~~net ~~Broadband~~interest ~~Infrastructure~~income ~~and~~(loss) from fiscal 2008 through fiscal 2010 was ~~Access~~predominately ~~segment~~due isto ~~provided~~significantly inlower ~~the~~interest ~~following~~income ~~table:~~rates on cash investments.

	For the Years Ended
	October 31,
	2005		2004		2003
	(Dollars in millions)
Operating income (loss)	$	99.3	$	58.3	$	(37.7	)
Depreciation and amortization		58.3		32.7		41.9

During June 2010, we entered into a settlement agreement with Merrill Lynch and its agent/broker in connection with certain auction rate securities they sold to us. The settlement resulted in our receiving $56.5 million in cash and provided for us to retain ownership in the auction rate securities. As of September 30, 2010, we have sold substantially all of our auction rate securities, realizing proceeds of $31.4 million and gains of $7.5 million during fiscal 2010 within Other Income (Expense), Net. During fiscal 2010, 2009 and 2008, we recorded other-than-temporary impairment charges of $3.1 million, $18.4 million and $100.6 million, respectively, to reduce the carrying value of certain auction rate securities we held.

~~During~~On ~~fiscal~~October 30, ~~2005~~2009, ~~operating~~we ~~income~~completed ~~for~~ the ~~Broadband Infrastructure~~sale ~~and~~of ~~Access~~our ~~segment~~copper-based ~~increased~~RF bysignal ~~70.3%~~management tobusiness ~~$99~~to ATX Networks, Corp.~~3 million~~ ~~compared~~(“ATX”). toATX paid us $5817.30 million in ~~fiscal 2004~~cash for the business. ~~This~~The ~~increase~~assets sold isconsisted primarily ~~due~~of inventory, fixed assets and intellectual property. ATX assumed future product warranty liabilities for products sold prior to October 30, 2009, subject to our reimbursement ~~KRONE~~of ~~acquisition~~expenses and costs related to certain of those future product warranty claims, if ~~which~~any. isAs ~~included~~part inof ~~our~~the ~~results~~sale ~~for~~transaction, we agreed to manufacture the ~~full~~RF ~~year~~signal ofmanagement ~~fiscal~~products ~~2005~~on ~~compared~~behalf toof ~~approximately~~ATX ~~five~~for up to 12 months ~~during~~and ~~fiscal~~assist ~~2004. The~~in ~~remaining~~other ~~increase~~transitional ~~was~~activities. ~~largely~~We ~~the~~recorded ~~result~~a gain of ~~growth~~$15.9 million in ~~ADC’s~~ ~~copper~~connection ~~and~~with ~~fiber~~the ~~connectivity~~transaction ~~sales~~within Other Income (Expense), Net.

During ~~fiscal 2004, operating income for~~ the ~~Broadband Infrastructure~~second ~~and~~quarter ~~Access~~of ~~segment~~fiscal ~~increased~~2010, bywe ~~254.6%~~recorded to a $585.3 million ~~compared to an operating loss of~~other-than-temporary ~~$(37.7) million~~impairment inrelated ~~fiscal~~to ~~2003.~~our ~~The~~investment ~~inclusion of operating income by KRONE beginning on May 18, 2004, accounts for 12.6% of the increase~~ in ~~operating income for fiscal 2004~~ip.access ~~The remaining~~Ltd ~~increase~~(refer ~~in operating income for the Broadband Infrastructure and Access segment resulted from increased Connectivity sales, which was attributable primarily~~ to ~~increased~~ ~~sales~~Note ~~to our customers for products used in either the core central office space or FTTX networks~~6).

WeDuring ~~recorded~~the ~~impairment~~second ~~and~~quarter ~~restructuring~~of ~~charges~~fiscal ~~of $8.7 million~~2009, ~~$10.9 million~~we ~~and~~recorded a $~~34.~~3.0 million other-than-temporary ~~during~~impairment ~~fiscal 2005, 2004 and 2003, respectively,~~ related ~~principally~~ to ~~employee~~our ~~severance~~investment ~~and~~in ~~facility~~E-Band ~~consolidation costs~~Communications Corporation.

Acquisitions Depreciation and amortization increased $25.6 million, or 78.3%, and decreased $9.2 million, or 22.0%, in fiscal 2005 and 2004, respectively. The increase from 2004 to 2005 is attributable to our acquisition of KRONE, which is included in our results for the full year of fiscal 2005 and for only five months during fiscal 2004.

~~Professional~~LGC ~~Services Segment~~Wireless

~~Detailed~~On ~~information~~December 3, ~~regarding~~2007, ~~our~~we ~~Professional~~completed ~~Services~~the ~~segment~~acquisition of LGC Wireless, a provider of in-building iswireless ~~provided~~solution products, headquartered in San Jose, California. These products increase the quality ~~following~~and ~~table:~~capacity of wireless networks by permitting voice and data signals to penetrate building structures and by distributing these signals evenly throughout the building. LGC Wireless also offers products that permit voice and data signals to reach remote locations. The acquisition was made to enable us to participate in this high growth segment of the industry.

	For the Years Ended
	October 31,
	2005			2004			2003
	(Dollars in millions)
Operating loss	$	(27.0	)	$	(33.7	)	$	(16.3	)
Depreciation and amortization		8.9			8.7			11.5

We acquired all of the outstanding capital stock and warrants of LGC Wireless for $143.3 million in cash (net of cash acquired). We acquired $58.9 million of intangible assets as part of this purchase. Goodwill of $85.4 million was recorded in this transaction and assigned to our Network Solutions segment. This goodwill is not deductible for tax purposes. We also assumed debt of $17.3 million associated with this acquisition, the majority of which was paid off by the second quarter of fiscal 2008. The results of LGC Wireless, subsequent to December 3, 2007, are included in our consolidated statements of operations.

~~During~~Century ~~fiscal 2005, the operating loss of the Professional~~Man Services segment decreased $6.7 million compared to 2004. The addition of KRONE, which is included in our results for the full year of fiscal 2005 and for five months during fiscal 2004 following its acquisition, as well as market share gains with several key customers, contributed to the overall improvement.

~~During~~On ~~fiscal~~January 10, ~~2004~~2008, ~~operating~~we ~~loss~~completed ~~for~~ the ~~Professional~~acquisition ~~Services~~of Century Man, a leading provider of ~~segment~~communication ~~increased~~distribution ~~$17.4 million~~frame ~~compared~~solutions, toheadquartered ~~fiscal~~in ~~2003~~Shenzhen, China. ~~Lower~~ ~~operating~~The ~~losses~~acquisition ~~due~~was made to accelerate our growth in the ~~addition~~Chinese ofconnectivity ~~KRONE~~market, ~~were~~as ~~offset~~well as provide us with byadditional ~~reductions~~products designed to meet the needs of customers in ~~customer~~developing ~~spending~~markets outside of China.

We ~~recorded~~acquired ~~impairment~~Century ~~and~~Man ~~restructuring~~for ~~charges~~$52.3 million in cash (net of cash acquired). The former shareholders of Century Man may be paid up to an additional $615.30 million (the “earn out”) if, during the three years following closing, certain financial results are achieved by the acquired business. We paid the first $25.70 million ~~and~~installment of this earn out in March 2009. In addition, a $80.94 million ~~during~~ ~~fiscal~~payment ~~2005,~~was ~~2004~~made ~~and~~to ~~2003,~~the ~~respectively,~~former ~~related~~shareholders for the effect of changes in foreign ~~principally~~exchange torates ~~employee~~on ~~severance~~the ~~and~~installment ~~facility~~payment. ~~consolidation~~These amounts were recorded as increases to the goodwill ~~costs~~associated with these transactions.

35 During the first quarter of 2010, we recorded an accrual of $5.5 million due to the attainment of certain earnout thresholds by the Century Man business. During the second quarter of fiscal 2010, we recorded $0.3 million of goodwill related to the foreign exchange rate guarantee on the release of the escrow related to the acquisition. During the fourth quarter of fiscal 2010, we paid $3.8 million to the former shareholders of these amounts. The remaining amounts are expected to be paid later in fiscal 2011.

32 Depreciation and amortization increased by $0.2 million in fiscal 2005 compared to fiscal 2004, and decreased by $2.8 million in fiscal 2004 compared to fiscal 2003. The fiscal 2005 increase is the result of our acquisition of KRONE, which is included in our results for the full year of fiscal 2005. The decrease in fiscal 2004 was the result of restructuring efforts, which reduced the amount of property, plant and equipment offset by the addition of KRONE.

ApplicationTable of Critical Accounting Policies and Estimates Contents

~~The~~Of ~~preparation~~the ofpurchase ~~financial~~price, ~~statements~~$7.5 million ~~and~~was ~~related~~placed ~~disclosures~~ in ~~conformity~~escrow ~~with~~following ~~accounting~~the ~~principles~~close ~~generally~~of ~~accepted in~~ the transaction. ~~United~~As ~~States~~of ~~requires us to make judgments~~September 30, ~~assumptions~~2009, ~~and~~ ~~estimates~~$3.9 million ~~that~~of ~~affect~~ the ~~amounts~~total ~~reported~~escrow inamount ~~our Consolidated~~had ~~Financial~~been ~~Statements~~released ~~and accompanying notes. Note 1~~ to the ~~Consolidated~~former ~~Financial~~shareholders ~~Statements in Item 8~~ of ~~this Form 10-K describes~~Century ~~the~~Man. ~~significant~~In ~~accounting~~addition, ~~policies and methods used in preparing the Consolidated Financial Statements~~$0.4 million Wewas ~~consider the~~paid ~~accounting policies described below~~ to bethe ~~our most critical~~former ~~accounting~~shareholders ~~policies~~for ~~because~~the ~~they~~effect ~~are~~of ~~impacted~~changes ~~significantly~~in ~~by estimates~~foreign weexchange ~~make.~~rates ~~We base our estimates~~ on ~~historical experience~~the oramount ~~various~~of ~~assumptions~~escrow ~~that we believe to be~~released ~~reasonable~~in ~~under~~accordance with the ~~circumstances,~~escrow ~~and~~agreement. ~~the~~These ~~results~~payments ~~form~~were ~~the basis~~accounted for ~~making~~as ~~judgments~~additional ~~about the reported values of assets,~~contingent ~~liabilities,~~consideration ~~revenues~~ and ~~expenses.~~increased ~~Actual~~goodwill ~~results may differ materially from these estimates~~accordingly.

~~Inventories:~~The Weallocation ~~state our inventories at the lower~~ of ~~first-in,~~ ~~first-out cost or market. In assessing~~ the ~~ultimate~~purchase ~~realization~~prices ~~of inventories,~~for weLGC ~~are~~and ~~required~~Century toMan ~~make judgments as~~ to ~~future demand~~the ~~requirements~~assets ~~compared with current or committed inventory levels. Our reserve requirements generally increase as our projected demand requirements decrease due to market conditions, technological~~ and ~~product life cycle changes as well as longer~~liabilities ~~than~~acquired ~~previously~~was ~~expected~~finalized ~~usage periods for previously sold equipment. We have experienced significant changes~~ in ~~required reserves~~the infirst ~~recent~~quarter ~~periods~~of ~~due~~fiscal ~~primarily~~2009 toand ~~improving~~did ~~market conditions.~~not Itresult ~~is possible that significant increases~~ in ~~inventory~~ ~~reserves~~any ~~may be required in the future if there is a~~material ~~decline in market conditions~~adjustments. ~~Alternatively,~~See ifNote we7 ~~are~~for ~~able to sell previously reserved inventory, we will reverse~~ a ~~portion~~discussion of the ~~reserves.~~goodwill ~~Changes~~and inintangible ~~inventory~~asset ~~reserves~~impairments ~~are~~ recorded ~~as a~~ ~~component~~in ofthe ~~cost~~first ofquarter ~~sales. As~~ of ~~October 31,~~fiscal ~~2005 and 2004, we had $35~~2009.~~7 million and $41.9 million,~~ ~~respectively, reserved against our inventories, which represents 20.3% and 30.0%, respectively, of total inventory on-hand.~~

~~Restructuring~~Discontinued ~~Accrual: During fiscal 2005 and 2004, we~~Operations recorded restructuring charges representing the direct costs of exiting leased facilities and employee severance. If such costs constitute an ongoing benefit arrangement that is probable and estimable, accruals are established pursuant to FASB Statement No. 112, “Employers’ Accounting for Postemployment Benefits — An Amendment of FASB Statements No. 5 and 43,” (“SFAS No. 112”). All other restructuring accruals are established pursuant to FASB Statement No. 146, “Accounting for Costs Associated with Exit or Disposal Activities,” (“SFAS No. 146”). Restructuring charges represent our best estimate of the associated liability at the date the charges are taken. Significant judgment is required in estimating the restructuring costs of leased facilities. For example, we make certain assumptions with respect to when a facility will be subleased and the amount of sublease income. Adjustments for changes in assumptions are recorded as a component of operating expenses in the period they become known. Changes in assumptions could have a material effect on our restructuring accrual as well as our consolidated results of operations.

~~Revenue~~GSM ~~Recognition: We recognize revenue, net of~~Business ~~discounts, when product ownership and the risk of loss has~~ transferred to the customer, we have no remaining obligation, persuasive evidence of a final agreement exists, delivery has occurred, the selling price is fixed or determinable and collectibility is reasonably assured.

~~Revenue~~On ~~from~~December 31, ~~product~~2009, ~~sales~~we isdivested ~~generally~~substantially ~~recognized~~all ~~upon shipment~~ of the ~~product~~assets of our GSM business to Altobridge ~~the~~Limited ~~customer~~(“Altobridge”). inIn ~~accordance~~connection with the ~~terms~~transaction, ~~of the~~we ~~sales~~also ~~agreement~~provided Altobridge $4.3 million ~~Revenue~~in ~~from~~cash, ~~services~~a ~~consists~~portion of ~~fees~~which was held back for certain transition services. Altobridge ~~systems~~also ~~requirements,~~assumed ~~design~~various ~~and~~liabilities ~~analysis,~~related ~~customization~~to ~~and~~the business. We recorded a loss on the sale in the ~~installation~~amount ~~services~~of $13.2 million. During fiscal 2010, ~~ongoing~~in ~~system~~connection ~~management~~with the sale of our GSM Business, ~~enhancements~~we wrote off the value of related inventory and ~~maintenance.~~fixed Weassets ~~primarily~~having ~~apply~~carrying ~~the percentage-~~amounts of~~-completion~~ $6.3 million ~~method~~and to$0.6 million, ~~arrangements~~respectively. ~~consisting~~The amounts written off were recognized as part of ~~design,~~the ~~customization~~loss ~~and~~on sale ~~installation~~of this business.

36 APS Germany

~~The~~During ~~assessment~~the offourth ~~collectibility~~quarter isof ~~particularly~~fiscal ~~critical~~2008, ~~in determining~~our ~~whether~~Board ~~revenue~~of ~~should~~Directors beapproved ~~recognized~~a inplan ~~the~~to ~~current market~~divest ~~environment~~APS Germany. AsWe ~~part~~classified ofthis ~~the~~business ~~revenue~~as ~~recognition~~a ~~process, we~~discontinued ~~determine~~operation ~~whether~~in ~~collection~~the offourth ~~trade~~quarter ~~and~~of ~~notes receivable~~fiscal ~~are~~2008. ~~reasonably~~On ~~assured~~July 31, ~~based on various factors~~2009, ~~including~~we ~~an evaluation~~sold all of ~~whether there has been deterioration in~~ the ~~credit quality~~capital stock of our ~~customers~~subsidiary that ~~could~~operated ~~result~~our inAPS Germany usbusiness ~~being~~to ~~unable~~telent ~~to collect~~Investments orLimited ~~sell~~for ~~the~~a ~~receivables.~~cash Inpurchase ~~situations~~price ~~where~~of it$3.3 million, isresulting ~~unclear~~in ~~whether~~a wetotal ~~will~~loss beon ~~able~~sale toof ~~sell~~$5.2 million orof ~~collect~~which ~~the receivable,~~$0.7 million ~~revenue and~~ related ~~costs~~to ~~are~~the ~~deferred.~~write ~~Related costs~~off ~~are~~of ~~recognized when it has been determined that~~ the ~~collection~~foreign ofcurrency ~~the~~translation ~~receivable is unlikely~~adjustment.

WeAPS ~~record provisions against our gross revenue for estimated~~France product returns and allowances in the period when the related revenue is recorded. These estimates are based on factors that include, but are not limited to, historical sales returns, analyses of credit memo activities, current economic trends and changes in our customers’ demands. Should our actual product returns and allowances exceed our estimates, additional reductions to our revenue would result.

~~Allowance~~On ~~for~~January 12, ~~Uncollectible~~2007, ~~Accounts:~~we Wecompleted ~~are required to estimate~~ the ~~collectibility~~sale of ~~our~~certain ~~trade~~assets ~~receivables and notes receivable. A considerable amount~~ of ~~judgment~~APS isFrance ~~required in assessing the realization of these receivables, including the current creditworthiness of each customer and related aging of the past due balances. In order~~ to ~~assess~~a ~~the~~subsidiary ~~collectibility~~ of ~~these~~Groupe ~~receivables~~Circet, wea ~~perform~~French ~~ongoing credit evaluations of our customers’ financial condition. Through these evaluations~~company, we ~~may~~for ~~become aware of~~ a ~~situation~~cash ~~where~~price ~~a customer may not be able to meet its financial obligations due to deterioration~~ of ~~its~~ ~~financial viability, credit ratings or bankruptcy~~$0. ~~The reserve requirements are based on the best facts available to us and are reevaluated and adjusted as additional information is received~~1 million. ~~Our~~We ~~reserves~~recorded ~~are~~a ~~also~~total ~~derived~~loss ~~using~~on ~~percentages~~sale ~~applied to certain aged receivable categories. These percentages are determined by a variety~~ of ~~factors including, but not limited to, current economic trends, historical payment and bad debt write-off experience~~$27.3 million ~~Significant~~which ~~increases~~includes ~~may occur in the future due to deteriorating market conditions~~$7.0 million Werelating ~~are not able~~ to ~~predict changes in~~ the ~~financial~~write ~~condition~~off of ~~our customers and, if circumstances related to our customers deteriorate, our estimates of~~ the ~~recoverability~~foreign ~~of our~~currency ~~receivables~~translation ~~could be materially affected and we may be required to record additional allowances~~adjustment. ~~Alternatively,~~During ifthe wefirst ~~provided more~~quarter ~~allowances~~of ~~than~~fiscal ~~are ultimately required~~2010, we ~~will~~recognized ~~reverse~~income ~~a portion~~ of ~~such~~$0.5 million ~~provisions~~within indiscontinued ~~future~~operations ~~periods~~resulting ~~based~~from ~~on our actual collection experience. Changes in~~ the ~~allowance~~reversal ~~are~~of ~~recorded as~~ a ~~component~~reserve offor ~~operating~~an ~~expenses. As of October 31, 2005~~uncertain ~~and~~tax ~~2004,~~position werelated ~~had~~to ~~$9.6 million~~APS ~~and~~France ~~$15.8 million, respectively,~~for ~~reserved against our accounts receivable,~~ which ~~represents~~ ~~4.7%~~the ~~and~~statute ~~9.2%, respectively,~~ of ~~total~~limitations ~~accounts receivable.~~had ~~The decrease in allowance for uncollectible accounts from 2004 to 2005 is due to improved collections~~expired.

~~Warranty:~~Share-Based ~~We provide reserves for the estimated cost of~~Compensation warranties at the time revenue is recognized. We estimate the costs of our warranty obligations based on our warranty policy or applicable contractual warranty, our historical experience of known product failure rates, and use of materials and service delivery costs incurred in correcting product failures. In addition, from time to time, specific warranty accruals may be made if unforeseen technical problems arise. Should our actual experience relative to these factors be worse than our estimates, we will be required to record additional warranty reserves. Alternatively, if we provide more reserves than we need, we will reverse a portion of such provisions in future periods. Changes in warranty reserves are recorded as a component of cost of sales. As of October 31, 2005 and 2004, we reserved $10.8 million and $14.4 million, respectively, related to future estimated warranty costs.

~~Recoverability of Long~~Share-~~Lived~~based ~~Assets:~~compensation ~~Goodwill~~recognized ~~is tested~~ for ~~impairment~~fiscal ~~annually~~2010, or2009 ~~more~~and ~~frequently~~2008 ifwas ~~events~~$14.7 million, ~~or changes~~$10.6 inmillion ~~circumstances~~and ~~indicate~~$17.2 million, ~~that~~respectively. ~~the~~The ~~asset~~share-based ~~might~~compensation beexpense ~~impaired.~~is Wecalculated and ~~perform~~recognized ~~impairment~~primarily ~~reviews~~on at a ~~reporting~~straight-line ~~unit~~basis ~~level~~over ~~and~~the ~~use~~vesting ~~a discounted~~periods ~~cash~~of ~~flow~~the ~~model~~related share-based ~~on management’s judgment~~ ~~and~~awards, ~~assumptions~~except tofor ~~determine~~performance-based ~~the~~awards. ~~estimated~~Share-based ~~fair~~compensation ~~value~~expense ofrelated ~~each~~to ~~reporting~~performance-based ~~unit.~~awards Anis ~~impairment~~recognized ~~loss~~only ~~generally would be recognized~~ when ~~the~~it ~~carrying~~is ~~amount~~probable ofthat the ~~reporting~~awards ~~unit’s~~will ~~net~~vest. ~~assets~~Once ~~exceeds~~this ~~the~~determination ~~estimated~~is ~~fair~~made, ~~value~~the ofexpense ~~the~~related ~~reporting~~to ~~unit. Impairment~~prior ~~testing~~periods ~~indicated~~is ~~that~~recognized in the ~~estimated~~current period ~~fair~~and ~~value~~the ~~of each~~remaining ~~reporting~~expense ~~unit~~is ~~exceeded~~recognized ~~its~~ratably ~~corresponding~~over ~~carrying~~the ~~amount, including~~remaining ~~recorded~~vesting ~~goodwill~~period. ~~and~~Thus, expense asrelated to such, noawards ~~impairment~~can ~~existed at~~fluctuate ~~that time~~significantly.

~~The~~Income ~~assessment of the recoverability of long-lived assets~~Taxes ~~reflects management’s assumptions and estimates. Factors that management must estimate when performing impairment tests include sales volume,~~

37 Note 10 to the Consolidated Financial Statements in Item 8 of this report describes the items which have impacted our effective income tax rate for fiscal 2010, 2009 and 2008.

~~prices,~~ In ~~inflation,~~fiscal ~~discount rates~~2010, ~~exchange~~we ~~rates,~~recorded ~~tax~~a ~~rates, and~~net ~~capital~~income ~~spending.~~tax ~~Significant~~provision ~~management~~totaling ~~judgment is involved in estimating these factors, and they include inherent uncertainties~~$7.1 million. ~~The~~This ~~measurement of the recoverability of these~~provision ~~assets~~ is ~~dependent~~attributable ~~upon~~primarily ~~the accuracy of the assumptions used in making these estimates and how the estimates compare~~ to ~~the eventual~~foreign ~~future~~income ~~operating performance of the specific businesses to which the assets are attributed~~taxes. ~~All assumptions utilized in~~ ~~the impairment analysis are consistent with management’s internal planning. If other assumptions and estimates had been used, the balances for long-lived assets could have been materially impacted.~~

~~Income~~In ~~Taxes~~fiscal ~~and~~2009, ~~Deferred~~we ~~Taxes:~~recorded Wea ~~currently~~net ~~have significant~~income ~~deferred~~ tax ~~assets~~benefit ~~(primarily~~totaling in$3.1 million. ~~the~~This ~~United~~tax ~~States)~~benefit asprimarily arelates ~~result~~to ofthe ~~net~~reversal ~~operating~~of ~~loss~~deferred ~~carryforwards,~~ tax ~~credit carryforwards~~liabilities ~~and~~attributable ~~temporary~~to ~~differences~~U.S. ~~between~~tax ~~taxable income~~amortization onof ~~our~~purchased ~~income~~goodwill ~~tax~~from ~~returns~~the ~~and~~acquisition ~~income~~of ~~before~~KRONE, ~~income~~partially ~~taxes~~offset ~~under U.S. generally~~by ~~accepted~~foreign ~~accounting~~income ~~principles~~taxes. ~~A deferred~~The ~~tax~~reversal ~~asset~~of ~~represents~~these ~~future~~deferred tax ~~benefits~~liabilities toresults befrom ~~received~~the ~~when these~~goodwill ~~carryforwards~~impairment ~~can~~charge bediscussed ~~applied against future taxable income~~in orNote ~~when~~7 ~~expenses~~to ~~previously~~the ~~reported in our~~ financial statements ~~become deductible for income tax purposes~~.

33 In the third quarter of fiscal 2002, we recorded a full valuation allowance against our net deferred tax assets because we concluded that it was more likely than not that we would not realize these assets. Our decision was based on the cumulative losses we had incurred to that point as well as the full utilization of our loss carryback potential. From the third quarter of fiscal 2002 to date, we have maintained our policy of providing a nearly full valuation allowance against all future tax benefits produced by our operating results. We expect to continue to provide a nearly full allowance on any future tax benefits until we can sustain a level of profitability that demonstrates our ability to utilize these assets.

AsTable of October 31, 2005, our net deferred tax assets were $1,038.6 million with a related valuation allowance of $1,039.9 million. As of October 31, 2004, our net deferred tax assets were $1,067.4 million with a related valuation allowance of $1,068.9 million. See Note 10 to the Consolidated Financial Statements in Item 8 of this Form 10-K for further discussion of the accounting treatment for income taxes. Contents

~~Litigation~~In ~~Reserves:~~fiscal As2008, ofwe ~~October 31,~~recorded ~~2005~~a ~~and 2004,~~net weincome ~~had~~tax ~~recorded~~provision ~~approximately~~totaling $86.~~4 million and $5.~~2 million ~~in loss reserves for pending litigation~~. This ~~reserve~~ provision is ~~based~~attributable onprimarily ~~the~~to ~~application~~foreign ofincome ~~FASB~~taxes ~~Statement No. 5,~~and ~~“Accounting~~deferred ~~for~~tax ~~Contingencies,” which~~liabilities ~~requires~~attributable us to ~~record a reserve if we believe an~~U.S. ~~adverse~~tax ~~outcome~~amortization ~~is probable and the amount~~ of ~~the~~purchased ~~probable~~goodwill ~~loss is~~from ~~capable~~our acquisition of ~~reasonable estimation~~KRONE. AsThis ~~explained~~provision ~~in Note 14~~also ~~to the Consolidated Financial Statements in~~includes ~~Item 8,~~a ~~and in Part I, Item~~ $3 ~~of this Form~~.4 ~~10-K~~million ~~(Legal Proceedings),~~charge werelated ~~are a party~~ to ~~numerous lawsuits, proceedings and claims. Litigation by its nature is uncertain and~~ the ~~determination~~ ofestablishment ~~whether any particular case involves a probable loss or the amount thereof requires the exercise~~ of ~~considerable judgment,~~additional ~~which~~valuation isallowance ~~applied~~on asour ~~of a certain date~~U. ~~The required~~S. ~~reserves~~deferred ~~may~~tax ~~change in the future due to new matters, developments in existing matters or if we determine to change our strategy with respect to any particular matter~~assets.

~~Pensions:~~Income We acquired KRONE in May 2004, which maintains a defined benefit pension for a portion of its German workforce. A participating individual’s post-retirement pension benefit is based primarily on the individual’s years of service and earnings. The plan is accounted for in accordance with FASB Statement No. 87, “Employers’ Accounting for Pensions”, which requires that amounts recognized in the financial statements be determined on an actuarial basis. That measurement includes estimates relating to the discount rate used to measure plan liabilities, which reflects the current rate at which the pension liability could effectively be settled at the end of the year. In estimating this discount rate, we considered rates of return on high-grade fixed-income investments with similar duration to the plan liability. We used a discount rate of 4.25% at October 31, 2005. A quarter percentage point increase (~~decrease~~Loss) infrom ~~the assumed~~Continuing ~~discount rate would (decrease) increase the~~Operations ~~post-retirement benefit obligation by approximately $2.3 million and $(2.3) million, respectively.~~

During fiscal 2010 we had income from continuing operations of $78.5 million compared to a ~~Recently~~$452.9 million ~~Issued~~loss ~~Accounting~~in ~~Pronouncements~~fiscal 2009. The fiscal 2010 results were attributable mainly to stronger sales, the fact that our fiscal 2010 results included 12 months versus 11 months for 2009, increased gross margins as a result of the cost reduction and efficiency initiatives begun in fiscal 2009, and our settlement and receipt of $56.5 million related to our auction rate securities arbitration claim against Merrill Lynch.

InDuring ~~May~~fiscal ~~2005,~~2009 ~~FASB~~we ~~issued~~had ~~SFAS No. 154, “Accounting~~a ~~Changes~~loss ~~and~~from ~~Error~~continuing ~~Corrections-a~~operations ~~replacement~~ of ~~APB~~$452.9 million ~~Opinion~~compared Noto a $40.1 20million ~~and~~loss ~~FASB~~in ~~Statement~~fiscal No2008. ~~3,” (“SFAS 154”).~~ ~~SFAS 154~~The ~~replaces~~fiscal ~~APB~~2009 decline in operating results was largely due to ~~Opinion~~impairment Nocharges and the general downturn of the global economy. ~~20,~~ ~~Accounting~~The ~~Changes,~~fiscal ~~and~~2009 ~~FASB~~results ~~Statement~~included Noa $408.9 3,million ~~Reporting~~impairment ~~Accounting~~of ~~Changes~~goodwill inand other long-lived assets. ~~Interim~~

38Segment Disclosures

~~Financial~~ Specific Statements, and changes the requirements for the accounting for and reporting of a change in accounting principle. Opinion 20 previously required that most voluntary changes in accounting principle be recognized by including the cumulative effect of changing to the new accounting principle in net income of the period of the change. SFAS 154 requires retrospective application to prior periods’ financial ~~statements~~ ofinformation ~~changes~~regarding ineach ~~accounting principle applied as if that principle had always been used or as the adjustment~~ of ~~previously~~ ~~issued~~our ~~financial~~three ~~statements~~reportable tosegments reflect a change in the reporting entity. SFAS 154 also requires that a change in depreciation, amortization, or depletion method for long-lived, nonfinancial assets be accounted for as a change in accounting estimate effected by a change in accounting principle. SFAS 154 is ~~effective~~provided ~~for changes and error corrections made~~ in ~~fiscal years beginning after~~ ~~December 15, 2005. We are required to adopt~~ the ~~provisions of~~following ~~SFAS 154 in our fiscal year beginning November 1,~~table: ~~2006.~~

In December 2004, the FASB issued SFAS No. 153, “Exchanges of Nonmonetary Assets — an amendment of APB Opinion No. 29,” (“SFAS 153”). SFAS 153 amends Opinion 29 to eliminate the exception for nonmonetary exchanges of similar productive assets and replaces it with a general exception for exchanges of nonmonetary assets that do not have commercial substance. A nonmonetary exchange has commercial substance if the future cash flows of the entity are expected to change significantly as a result of the exchange. SFAS 153 is effective for fiscal years beginning after June 15, 2005. We are required to adopt the provisions of SFAS 153 in our fiscal year beginning November 1, 2005.


	2010			2009			2008
	(In millions)
Connectivity
Operating income	$	64.9		$	50.9		$	117.2
Depreciation and amortization		54.1			57.3			64.3
Network Solutions
Operating loss	$	(13.9	)	$	(28.5	)	$	(36.1	)
Depreciation and amortization		4.4			5.4			13.0
Professional Services
Operating income	$	8.9		$	4.0		$	0.8
Depreciation and amortization		3.0			3.3			3.5

InFiscal ~~November~~2010 ~~2004, FASB issued SFAS No~~vs. ~~151, “Inventory~~ ~~Costs,”~~Fiscal ~~(“SFAS 151”).~~2009 This statement requires that abnormal amounts of idle facility expense, freight, handling costs and spoilage be recognized as current-period charges. This statement also requires that fixed production overhead be allocated to inventory conversion costs based on normal capacity of the production facilities. SFAS 151 is effective for inventory costs incurred by us beginning in fiscal 2006. We do not expect that the adoption of this statement will have a material impact on our consolidated financial statements.

InThe ~~December~~increase ~~2004, FASB issued SFAS No. 123R, “Share-Based Payment: an amendment of FASB Statements No. 123 and 95,” (“SFAS 123R”) which requires companies to recognize~~ in ~~the~~operating income ~~statement~~in ~~the~~fiscal ~~grant-date~~2010 ~~fair~~compared ~~value of stock options and other equity-based compensation issued~~ to ~~employees.~~ ~~SFAS 123R~~fiscal is2009 ~~effective~~across ~~for~~all ~~financial~~of ~~statements~~our ~~issued~~segments ~~for~~was ~~periods~~due ~~that~~to ~~begin~~a ~~after~~combination ~~June 15,~~of ~~2005,~~higher ~~which~~revenue ~~is our~~and ~~first~~an ~~quarter~~increase ~~beginning~~in ~~November 1,~~gross ~~2005~~margins. WeIn ~~will use~~our ~~the~~Connectivity ~~modified prospective transition method. Under the modified prospective method~~segment, ~~awards that are granted, modified or settled after~~ the ~~date~~decrease ofin ~~adoption~~depreciation ~~will be measured~~ and ~~accounted~~amortization ~~for~~ in ~~accordance~~ ~~with~~fiscal ~~SFAS 123R.~~2010 ~~Compensation~~from ~~cost~~fiscal ~~for awards~~2009 ~~granted~~was ~~prior~~due to, ~~but~~a ~~not~~decline ~~vested,~~in asacquisition ofrelated ~~the~~amortization ~~date~~expense ~~SFAS 123R is~~related ~~adopted~~to ~~would~~our beacquisition ~~based on the grant date attributes~~of ~~originally~~Krone ~~used~~completed toin ~~value those awards for proforma purposes under SFAS 123~~2004.

WeFiscal ~~expect~~2009 ~~the adoption of this standard will reduce fiscal 2006 net income by approximately $8~~vs.~~6 million.~~ ~~This estimate~~Fiscal ~~is based on the number of options currently outstanding~~2008 ~~and exercisable and could change based on the number of options granted or forfeited in fiscal 2006.~~

In ~~December 2004, FASB issued FASB Staff Position No. FAS 109-2, “Accounting and Disclosure Guidance for Foreign Earnings Repatriation Provision within~~ the ~~American~~ ~~Jobs~~Connectivity ~~Creation Act of 2004~~segment,” ~~(“FSP 109-2”).~~operating ~~FSP~~income ~~109-2~~decreased ~~allows~~as acompared ~~company~~to ~~time~~fiscal ~~beyond~~2008 ~~the~~primarily ~~financial~~due ~~reporting period of enactment~~ to ~~evaluate~~ the ~~effect of~~general ~~the~~downturn ~~American~~in ~~Jobs Creation Act of 2004 (~~the ~~“Act”) on~~global ~~its plan for reinvestment or repatriation of foreign earnings~~economy. ~~The~~Network ~~Act~~Solutions ~~creates~~generated a ~~temporary~~smaller ~~incentive~~loss ~~for~~in ~~U.S. corporations~~fiscal to2009 ~~repatriate~~as ~~accumulated~~compared ~~income~~to ~~earned abroad~~fiscal by2008 ~~providing~~due anto ~~85 percent~~lower ~~deduction~~acquisition ~~for~~related ~~certain dividends~~amortization ~~received from controlled foreign corporations~~expense. The ~~deduction~~Professional isServices ~~subject~~segment’s tooperating aincome ~~number~~increased ofprimarily ~~limitations.~~due ~~FSP~~to ~~109-2~~efficiencies ~~will~~generated ~~not~~through ~~impact~~restructuring usinitiatives ~~because~~and weprocess ~~do not plan on repatriating our foreign earnings~~improvements.

39 Depreciation and amortization expense was relatively flat for our Connectivity and Professional Services segments, but decreased for our Network Solutions segment largely because fiscal 2008 included $9.4 million of amortization expense related to acquired intangibles from LGC compared to $2.2 million in fiscal 2009.

Liquidity and Capital Resources

Liquidity

~~Cash~~The table below summarizes our cash and cash equivalents and ~~current~~ available-for-sale ~~securities~~ ~~not subject to restrictions were $445.4 million~~securities: ~~at October 31, 2005, a decrease of $55.4 million compared to $500.8 million as of October 31, 2004. The reasons for this decrease are described below.~~

34 We invest a large portion of our available cash in highly liquid government bonds and high quality corporate debt securities of varying maturities. Our investment policy is to manage these assets to preserve principal, maintain adequate liquidity at all times, and maximize returns subject to our investment guidelines.

AuctionTable rate securities reclassified from cash and cash equivalents to current available-for-sale securities as of October 31, 2005 and 2004 were $307.5 million and $427.3 million, respectively. Certain prior year amounts have been reclassified to conform to the current year presentation. These reclassifications have no effect on current assets, working capital or any amounts reported on the statement of operations. Contents

Restricted cash balances that are pledged primarily as collateral for letters of credit and lease obligations affect our liquidity. As of October 31, 2005, we had restricted cash of $23.6 million compared to $21.9 million as of October 31, 2004, an increase of $1.7 million. Restricted cash is expected to become available to us upon satisfaction of the obligations pursuant to which the letters of credit or guarantees were issued. In addition, we have $6.7 million of restricted cash related to our FONS acquisition, which is held in trust to be paid to FONS employees over the course of the next nine months. We are entitled to the interest earnings on our restricted cash balances and interest earned on restricted cash is included in cash and cash equivalents.


	September 30,		September 30,
	2010		2009
	(In millions)

Cash and cash equivalents	$	518.1	$	535.5
Short-term available-for-sale securities
Corporate commercial paper, CD’s and bonds		129.2		—
Government bonds		49.6		—

Total cash, cash equivalents and short-term available-for-sale securities		696.9		535.5

Long-term available-for-sale securities
Corporate commercial paper, CD’s and bonds		21.0		51.1
Government bonds		28.8		—
Auction rate securities		—		24.3

Total long-term available-for-sale securities		49.8		75.4

Total	$	746.7	$	610.9

~~Operating~~ Cash ~~Activities~~and cash equivalents not subject to restrictions were $518.1 million at September 30, 2010, a decrease of $17.4 million compared to $535.5 million as of September 30, 2009. This decrease does not represent a decrease in liquidity, but was driven primarily by $147.7 million of net purchases of available-for-sale securities. The securities purchased primarily include corporate commercial paper, certificates of deposit, bonds and U.S. government and agency obligations. In accordance with our investment policy, the securities carry a credit rating of A+ or higher.

~~Net~~On ~~cash provided by operating activities from continuing operations for fiscal 2005 totaled $60.0~~June ~~million~~8, ~~a $13.5 million~~2010, ~~decrease~~we ~~from~~entered ~~the~~into ~~cash~~a ~~provided~~settlement byagreement ~~operating activities~~with ~~from~~Merrill ~~continuing~~Lynch ~~operations~~and ~~for fiscal 2004. This~~its ~~decrease~~agent/broker ~~was~~in ~~largely~~connection ~~driven~~with bycertain anauction ~~increase~~rate insecurities ~~inventory~~they ~~and accounts~~sold ~~receivable related~~ to ~~the~~us. ~~manufacture~~The ~~and sales of FTTX~~settlement ~~and~~agreement ~~wireless~~resulted ~~products,~~in ~~along~~our ~~with~~receiving an $856.5 million ~~reduction~~ in ~~accrued~~cash ~~liabilities,~~and ~~primarily~~provided for ~~restructuring~~us ~~and incentive~~to ~~payments.~~retain ~~Offsetting this additional cash outflow was~~ownership ~~increased year-over-year net income from continuing operations. Working capital requirements will typically increase or decrease with changes~~ in the ~~level~~auction ofrate ~~net sales~~securities. InDuring ~~addition~~2009, ~~the~~we ~~timing of~~made ~~certain~~a ~~accrued~~claim ~~payments~~in ~~will affect~~ the ~~annual~~Lehman ~~cash~~Brothers ~~flow.~~bankruptcy ~~Our~~proceeding ~~employee~~with ~~incentive~~respect ~~payments~~to ~~are~~auction ~~accrued~~rate ~~throughout~~securities ~~the fiscal~~they ~~year~~sold ~~but~~to ~~paid during the first quarter of the subsequent fiscal year. Net cash provided by operating activities from continuing operations for fiscal 2004 totaled $73.5 million~~us, abut ~~$37.9 million~~at ~~increase~~this ~~from~~time ~~cash provided~~we ~~by operating activities from continuing operations for~~are ~~fiscal~~uncertain ~~2003.~~whether ~~This~~we ~~increase~~will ~~was~~recover ~~primarily~~any ~~related~~of toour ~~increased year-over-year~~losses ~~net~~associated ~~income~~with ~~from~~these ~~continuing operations~~securities.

~~Investing~~ As ~~Activities~~of September 30, 2010, we have sold substantially all of our auction rates securities. During the twelve months ended September 30, 2010, we sold auction rate securities having a par value of $169.1 million for proceeds of $31.4 million. As a result of these sales, we recorded net gains of $7.5 million within Other Income (Expense), Net (refer to Note 2).

~~Investing~~Restricted ~~activities~~cash ~~used~~balances ~~$23.7 million~~that ~~during~~are ~~fiscal~~pledged ~~year 2005.~~primarily ~~Cash~~as ~~used~~collateral ~~by investing activities included $7.1 million~~ for ~~the~~letters ~~acquisition~~ of ~~OpenCell~~credit and ~~$166.1 million~~derivative ~~for~~transactions ~~the~~also ~~FONS~~affect ~~acquisition,~~our ~~plus $30~~liquidity.~~2 million~~ ~~for~~As ~~property~~of ~~and~~September 30, ~~equipment~~2010, ~~additions.~~we ~~Cash provided~~had byrestricted ~~investing activities consisted primarily of~~cash of $167.7 million incompared ~~proceeds~~to ~~from the disposal of property and equipment,~~ $925.0 million ~~related~~as ~~to the sale~~ of aSeptember 30, ~~vendor note receivable~~2009, ~~$9.2 million~~a ~~from~~decrease ~~receipts on notes receivable and $32.8 million related to proceeds from the sale~~ of ~~our Metrica service assurance software group. Investing activities used~~ $~~190~~17.03 million ~~during fiscal 2004~~. ~~Cash~~ ~~used~~The bydecrease ~~investing~~is ~~activities~~primarily ~~included~~a ~~$295.2~~result ~~primarily~~of ~~related to~~ the ~~KRONE~~release ~~acquisition.~~of ~~Cash provided by investing activities included~~ $6713.92 million ~~related~~of tocash ~~proceeds~~collateral ~~from~~relating ~~the sale of~~to our ~~divested~~interest ~~entities.~~rate ~~Investing~~swap ~~activities~~as ~~used $397.0 million~~this ~~during~~requirement ~~fiscal~~is ~~2003.~~now ~~Cash~~secured ~~used~~under bythe ~~investing activities~~Credit ~~included~~Facility, ~~$69.5 million~~as ~~for property and~~defined ~~equipment~~below. ~~additions~~Restricted ~~and~~cash ais ~~net~~expected ~~increase~~to ofbecome ~~$492.7 million in~~ available ~~for~~to ~~sale~~us ~~securities,~~upon ~~primarily~~satisfaction ~~related to the investment~~ of ~~proceeds related to~~ the ~~sale our convertible~~obligations ~~notes.~~pursuant ~~Cash~~to ~~provided~~which bythe ~~investing~~letters ~~activities included an increase~~ of ~~$161.4 million~~credit inor ~~restricted~~guarantees ~~cash~~were issued.

40 Operating Activities

~~Financing~~ Net ~~Activities~~cash provided by operating activities from continuing operations for fiscal 2010 was $140.8 million. This was driven primarily by results from continuing operations after adjustments for certain non-cash items, including $61.5 million of depreciation and amortization, partially offset by cash used for working capital. Working capital requirements typically will increase or decrease with changes in the level of net sales. In addition, the timing of certain accrued incentive payments will affect the annual cash flow as these expenses are accrued throughout the fiscal year but paid during the first quarter of the subsequent year.

~~Financing~~Net ~~activities~~cash provided ~~$13.6 million~~by ofoperating ~~cash~~activities ~~during fiscal~~from ~~2005,~~continuing ~~primarily~~operations ~~consisting~~for offiscal ~~the~~2009 ~~proceeds~~was ~~from the~~$97.2 ~~issuance~~million. ofThis ~~common~~was ~~stock~~driven ~~for~~primarily ~~certain~~by ~~employee~~results ~~benefit~~from ~~plans. Financing~~continuing ~~activities~~operations ~~used~~after ~~$7.0 million~~adjustments ~~during fiscal 2004.~~for ~~This~~certain ~~was~~non-cash ~~primarily~~items, ~~related~~including tothe $10407.79 million ~~payments~~goodwill ~~on notes~~and ~~payable.~~intangible ~~Financing~~impairment ~~activities~~recorded ~~provided $345.4 million~~in ~~during~~the ~~fiscal~~first ~~2003,~~quarter ~~primarily~~of ~~related~~fiscal to2009, ~~the~~partially ~~net~~offset ~~proceeds~~by ~~from issuance~~cash ofused ~~our~~for ~~$400.0 million~~working ~~convertible unsecured subordinated notes~~capital.

~~Unsecured~~ Net ~~Debt~~cash provided by operating activities from continuing operations for fiscal 2008 totaled $189.5 million. This was driven primarily by results from continuing operations after adjustments for certain non-cash items, including the $100.6 million impairment loss on available-for-sale securities, partially offset by cash used for working capital.

35 As of October 31, 2005 we had outstanding $400.0 million of convertible unsecured subordinated notes, consisting of $200.0 million in 1.0% fixed rate convertible unsecured subordinated notes maturing on June 15, 2008, and $200.0 million of convertible unsecured subordinated notes with a variable interest rate and maturing on June 15, 2013. The interest rate for the variable rate notes is equal to the 6-month LIBOR plus 0.375%, and is reset on each semi-annual interest payment date (June 15 and December 15 of each year beginning on December 15, 2003). The interest rate on the variable rate notes was 3.99625% for the six-month period ending December 15, 2005, but rose to 5.045% for the period December 15, 2005 to June 15, 2006. The holders of both the fixed and variable rate notes may convert all or some of their notes into shares of our common stock at any time prior to maturity at a conversion price of $28.091 per share. We may not redeem the fixed rate notes anytime prior to their maturity date. We may redeem any or all of the variable rate notes at any time on or after June 23, 2008.

FinancingTable Arrangementsof Contents

AsInvesting ~~a part of the divestitures of Cuda and Singl.eView, we agreed~~Activities to extend to the parties non-revolving credit facility financing arrangements. As of October 31, 2005, we had commitments to extend credit of $18.0 million. The total amount drawn and outstanding under these arrangements was approximately $11.0 million on both October 31, 2005 and 2004. The commitments to extend credit are conditional agreements generally having fixed expiration or termination dates and specific interest rates, conditions and purposes. These commitments may expire without being drawn. We regularly review all outstanding commitments and the results of these reviews are considered in assessing the overall risk for possible credit losses.

~~Vendor~~ Investing ~~Financing~~activities from continuing operations used $152.5 million of cash during fiscal 2010. Cash used by investing activities included $147.7 million of net purchases of available-for-sale securities and $29.4 million of property, patent and equipment additions, partially offset by a decrease in restricted cash of $17.0 million and $11.7 million of cash received for the divestitures of certain businesses.

InInvesting ~~the~~activities ~~past~~from wecontinuing ~~have~~operations ~~worked~~used ~~with~~$87.9 million ~~customers~~of ~~and~~cash ~~third-party~~during fiscal 2009. ~~financiers~~Cash toused ~~negotiate~~by ~~financing~~investing ~~arrangements~~activities ~~for~~included ~~projects~~$51.2 million As of ~~October 31,~~net ~~2005~~purchases ~~and~~of ~~2004,~~long-term ~~approximately~~investments, $1032.20 million ~~was~~of ~~outstanding~~property, ~~relating~~patent toand ~~such~~equipment ~~financing arrangements.~~additions Atand ~~October 31,~~an ~~2005~~increase ~~and~~in ~~2004,~~restricted wecash ~~have~~of ~~recorded~~$9.1 million, ~~approximately~~partially offset by $95.43 million inof ~~loss~~proceeds ~~reserves~~from inthe disposal of property and equipment. Proceeds from the disposal of property primarily reflect the sale of our Cheltenham U.K. ~~event~~facility, for which we received $4.3 million of ~~non-performance~~cash ~~related~~proceeds toduring ~~these~~the ~~financing~~first ~~arrangements~~quarter of fiscal 2009.

~~Working~~ Investing ~~Capital~~activities from continuing operations used $213.5 million of cash during fiscal 2008. Cash used by investing activities included $146.0 million for the acquisition of LGC Wireless, $52.3 million for the acquisition of Century Man, a $4.0 million investment in ip.access, a $1.2 million investment in E-Band and ~~Liquidity~~$42.4 million ~~Outlook~~of property, equipment and patent additions. This was offset partially by $35.1 million of net sales of available-for-sale securities.

~~Our~~Financing ~~main source of liquidity continues to be our unrestricted~~Activities cash resources, which include existing cash, cash equivalents and available-for-sale securities. We currently anticipate that our existing cash resources will be sufficient to meet our anticipated needs for working capital and capital expenditures to execute our near-term business plan. This is based on current business operations and economic conditions so long as we are able to maintain breakeven or positive cash flows from operations. We expect that our entire restructuring accrual of $33.3 million as of October 31, 2005 will be paid from our unrestricted cash as follows:

• Financing activities used $82.7 3 million ~~for~~of ~~employee~~cash ~~severance~~during ~~will~~fiscal be2010 ~~paid~~for bypayment ~~the~~of ~~end~~debt ofand ~~fiscal~~debt financing ~~2006;~~costs. •Financing activities used $1096.0 8 million ~~for~~of ~~facilities~~cash ~~consolidation~~during ~~costs~~fiscal 2009, of which ~~relate~~$94.1 million ~~principally~~was due to ~~excess~~common ~~leased~~stock ~~facilities,~~repurchases. ~~will~~Financing beactivities ~~paid~~provided $163.8 million of cash during fiscal 2008. The higher amount in fiscal ~~2006;~~2008 ~~and~~was •due to the ~~remainder~~issuance of $~~14.6~~ 450 million, ~~which~~of convertible ~~also~~debt ~~relates~~discussed in Note 8 to ~~excess~~the ~~leased~~financial ~~facilities~~statements, ~~will~~less bepayments ~~paid~~for ~~over~~the financing costs associated with debt, the ~~respective~~$200.0 million ~~lease~~payment ~~terms~~of ~~ending~~our ~~through~~2008 ~~2015~~convertible notes and payments made on LGC Wireless and Century Man debt. Fiscal 2008 results also included $56.5 million of common stock repurchases.

41 Outstanding Debt and Credit Facility

WeAs ~~also believe that our unrestricted cash resources will enable us to pursue strategic opportunities, including possible product line or business acquisitions. However, if the cost~~ of ~~one or more acquisition opportunities exceeds our existing cash resources~~September 30, ~~additional sources may be required. We do not currently have any committed lines of credit or other available credit facilities~~2010, ~~and~~we ithad isoutstanding ~~uncertain~~the ~~whether~~following ~~such facilities could be obtained in sufficient amounts or on acceptable terms~~$650. ~~Any~~0 million ~~plan to raise additional capital may involve an equity-based or equity-linked financing, such as another issuance~~ of ~~convertible~~ ~~debt or the issuance of common stock or preferred~~convertible ~~stock,~~unsecured ~~which~~subordinated ~~would be dilutive to existing shareowners. If we~~notes: ~~raise additional funds by issuing debt, we may be subject to restrictive covenants that could limit our operational flexibility and higher interest expense could dilute earnings per share.~~

Our $200 million of fixed rate convertible notes do not mature until June 15, 2008 and the other $200 million of variable rate convertible notes do not mature until June 15, 2013. All convertible notes have a conversion price of $28.091 per share.


	September 30,		Conversion
	2010		Price
	(In millions)
Convertible subordinated notes, six-month LIBOR plus 0.375%, due June 15, 2013	$	200.0	$	28.091
Convertible subordinated notes, 3.5% fixed rate, due July 15, 2015		225.0		27.00
Convertible subordinated notes, 3.5% fixed rate, due July 15, 2017		225.0		28.55

Total convertible subordinated notes	$	650.0

InSee ~~addition,~~Note ~~our~~8 ~~deferred~~to ~~tax~~the ~~assets,~~Consolidated ~~which~~Financial ~~are~~Statements ~~nearly~~in ~~fully reserved~~Item 8 atof this ~~time,~~report ~~should~~for ~~reduce~~more information ~~our income tax payable~~ on ~~taxable~~ ~~earnings~~these ~~in future years~~notes.

~~Contractual~~ From ~~Obligations~~time to time, we may use interest rate swaps to manage interest costs and ~~Commercial~~the ~~Commitments~~risk associated with changing interest rates. We do not enter into interest rate swaps for speculative purposes. On April 29, 2008, we entered into an interest rate swap effective June 15, 2008, for a notional amount of $200.0 million. The interest rate swap hedges the exposure to changes in interest rates of our $200.0 million of convertible unsecured subordinated notes that have a variable interest rate of six-month LIBOR plus 0.375% and a maturity date of June 15, 2013. We have designated the interest rate swap as a cash flow hedge for accounting purposes. The swap is structured so that we receive six-month LIBOR and pay a fixed rate of 4.0% (before the credit spread of 0.375%). The variable portion we receive resets semiannually and both sides of the swap are settled net semiannually based on the $200.0 million notional amount. The swap matures concurrently with the end of the debt obligation.

AsCredit ~~of October 31, 2005, the following table summarizes our~~Facility ~~commitments (in millions) to make long-term debt and lease payments and certain other contractual obligations.~~

	Payments Due by Period
			Less
			Than		1-3		3-5		More Than
Contractual Obligations	Total		1 Year		Years		Years		5 Years
Long-Term Debt Obligations(1)	$	486.7	$	11.1	$	224.5	$	20.4	$	230.7
Operating Lease Obligations		124.8		30.5		39.3		28.5		26.5
Purchase Obligations(2)		26.8		24.5		1.9		0.4		—
Minimum Pension Obligations		71.9		3.7		7.5		7.7		53.0
Total	$	710.2	$	69.8	$	273.2	$	57.0	$	310.2

On January 30, 2009, we terminated the $200.0 million secured five-year revolving credit facility that we entered into in April 2008. This facility had no outstanding balances when it was terminated. As a consequence of terminating our revolving credit facility, we recorded a non-operating charge of $1.0 million to write-off the deferred financing costs associated with the facility.

(1)	Includes interest on the fixed rate debt of 1% and interest on our variable rate debt of 5.045%. The interest rate for our variable rate debt resets on each semi-annual interest payment date. For purposes of this schedule, we used the rate as reset on December 15, 2005.
(2)	Amounts represent non-cancelable commitments to purchase goods and services, including items such as inventory and information technology support.

The assets that secured the facility also served as collateral for our interest rate swap on our $200.0 million convertible unsecured floating rate notes that mature in 2013. As a result of the facility’s termination, we were required to pledge cash collateral to secure the

~~Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK~~36

OurTable major market risk exposures relate to adverse fluctuations in certain commodity prices, interest rates, security prices and foreign currency exchange rates. Market fluctuations could affect our results of operations and financial condition adversely. At times, we attempt to reduce this risk through the use of derivative financial instruments. We do not enter into derivative financial instruments for the purpose of speculation. Contents

~~We are exposed to~~ interest rate ~~risk~~swap. asAs ~~a result~~ of ~~issuing $200.0~~September ~~million of convertible unsecured subordinated notes on June 4~~30, ~~2003~~2009, ~~that~~we ~~have~~pledged a$13.2 million ~~variable~~of ~~interest~~cash ~~rate equal~~ to ~~6-month~~secure ~~LIBOR~~the ~~plus 0.375%. The~~ interest rate onswap ~~these~~termination ~~notes is reset semiannually on each interest payment date~~value, which is ~~June~~included 15in ~~and December~~our 15restricted ofcash ~~each year until their maturity in fiscal 2013~~balance. ~~The~~ ~~interest rate for the six-month period ending~~This ~~December 15,~~collateral ~~2005~~amount ~~was~~could ~~3.99625%,~~vary ~~but~~significantly ~~rose~~as toit ~~5.045%~~fluctuates ~~for~~with the ~~current~~ six-month ~~period~~forward ~~ending June 15, 2006~~LIBOR. ~~Assuming~~ interest rates rise an additional 100 basis points, 500 basis points and 1,000 basis points, our annual interest expense would increase by $2.0 million, $10.0 million and $20.0 million, respectively.

42 On December 18, 2009, we entered into a new asset-backed revolving credit facility with Wachovia Bank National Association (the “Credit Facility”) in the amount of up to $75.0 million. Drawings under the Credit Facility may be used for general operating, working capital and other corporate purposes. Additionally, availability under the Credit Facility may be used to issue letters of credit or to secure hedging obligations. Along with the parent company, two U.S-based subsidiaries are borrowers and three other U.S.-based subsidiaries provide guarantees of obligations under the Credit Facility.

WeThe ~~offer~~Credit aFacility ~~non-qualified~~has ~~401(k)~~a ~~excess~~scheduled ~~plan~~expiration ~~to allow certain executives to defer earnings in excess~~ of ~~the~~March 15, ~~annual~~2013 ~~individual contribution~~ and ~~compensation~~is ~~limits~~secured ~~on 401(k) plans imposed~~ by ~~the~~ various U.S. ~~Internal~~ ~~Revenue~~assets ~~Code.~~including ~~Under~~accounts ~~this~~receivable, ~~plan~~inventory, ~~the~~and ~~salary deferrals~~machinery and ~~our~~equipment. ~~matching~~We ~~contributions~~also ~~are~~granted a ~~not~~security ~~placed~~interest in ~~a separate fund or trust account. Rather,~~ the ~~deferrals~~capital ~~represent our~~stock ~~unsecured~~of ~~general obligation to pay~~ the ~~balance~~two ~~owing~~subsidiary toborrowers ~~the executives~~and ~~upon~~one ~~termination~~ of ~~their~~the ~~employment~~guarantors. Borrowings Inunder ~~addition,~~ the ~~executives~~Credit ~~are~~Facility ~~able~~will torank ~~elect~~on toparity ~~have~~in ~~their~~right ~~account balances indexed to a variety~~ of ~~diversified~~payment ~~mutual~~with ~~funds~~all ~~(stock,~~other ~~bond~~senior ~~and~~indebtedness ~~balanced),~~that asmay ~~well~~be ~~as to our common stock. Accordingly, our~~ outstanding ~~deferred~~from ~~compensation~~time ~~obligation under this plan is subject~~ to ~~market risk~~time. AsAvailability of ~~October 31,~~borrowings ~~2005,~~is ~~our outstanding~~based ~~deferred compensation obligation related to the~~on ~~401(k)~~measurements ~~excess plan was $4.6 million,~~ of ~~which~~accounts ~~approximately $0.7 million~~receivable ~~was~~and ~~indexed~~inventory toless ~~ADC~~standard ~~common stock~~reserves. ~~Assuming~~The ~~a 20%,~~Credit ~~50%~~Facility ~~or 100% aggregate increase in the value of the~~size ~~investment alternatives to which the account balances~~ may be ~~indexed,~~ ~~our~~increased ~~outstanding~~up ~~deferred~~to ~~compensation obligation would increase by~~ $0100.90 million, ~~$2.3 million~~subject ~~and $4.6 million,~~to ~~respectively,~~certain terms and ~~we would incur an expense of a like amount~~conditions.

WeUnder ~~also~~the ~~are~~Credit ~~exposed~~Facility, towe ~~market~~must ~~risk~~comply ~~from~~with ~~changes~~various infinancial ~~foreign currency~~and ~~exchange~~non-financial ~~rates~~covenants. Among ~~Our~~other ~~primary~~things, ~~risk~~the isfinancial ~~the~~covenants ~~effect~~require us to maintain a minimum amount of liquidity, ~~foreign~~defined ~~currency~~as ~~exchange~~cash ~~rate~~and ~~fluctuations~~certain oninvestments located in the U.S. ~~dollar~~ ~~value~~plus ofavailability ~~foreign~~under ~~currency~~the ~~denominated operating~~Credit ~~sales~~Facility, ~~and~~equal ~~expenses~~to $150.0 million. ~~Our~~Additionally, ~~largest~~when ~~exposure~~borrowing ~~comes~~availability ~~from~~under the ~~Mexican~~Credit ~~peso.~~Facility ~~The~~drops ~~result~~below ofa specified level, we must maintain a ~~10%~~fixed ~~weakening~~charge incoverage ~~the~~ratio Uof 1.S0. ~~dollar to~~ ~~Mexican~~This ~~peso~~ratio ~~denominated~~is ~~sales~~defined ~~and~~as ~~expenses~~consolidated ~~would~~EBITDA ~~result~~divided inby ~~a reduction~~the sum of ~~operating~~certain ~~income~~fixed ~~of $4~~payments.~~4 million~~ Non-financial ~~for~~covenants ~~the~~include ~~year~~limitations on, among other things, asset dispositions and ~~ended~~acquisitions, ~~October 31~~liens, ~~2005~~and debt issuances. ~~This~~Our ~~exposure~~ability ~~remained~~to ~~unhedged~~repurchase asdebt, equity and pay cash dividends is contingent upon ADC maintaining certain levels of ~~October~~liquidity. As of September 3130, ~~2005~~2010 we were in compliance with all covenants under the Credit Facility.

Borrowings under the Credit Facility bear interest at the one, two or three month LIBOR or a base rate plus a specified margin. We ~~are~~pay ~~also~~an ~~exposed~~annual tocommitment ~~foreign~~fee ~~currency~~of ~~exchange~~1% ~~risk~~on asany aunused portion of ~~result~~the facility. The amount available under the Credit Facility will fluctuate based on seasonality of ~~changes~~our insales ~~intercompany~~and ~~balance~~the ~~sheet~~value ~~accounts~~of any hedging obligations and ~~other~~ ~~balance~~letters ~~sheet~~of ~~items~~credit secured under the Credit Facility. AtAs ~~October~~of September 3130, ~~2005~~2010, ~~these~~although there were no borrowings outstanding, an $18.8 ~~balance~~million ~~sheet~~collateral ~~exposures~~requirement under our interest rate swap agreement (refer to Note 18) as well as $2.0 million of letters of credit were ~~mitigated~~secured ~~through~~under the ~~use~~Credit Facility, releasing us from a cash collateral requirement of $20.8 million. The amount secured under the Credit Facility could ~~foreign~~fluctuate ~~exchange~~significantly ~~forward~~as ~~contracts~~the interest rate swap termination value fluctuates with ~~maturities~~the forward LIBOR. As of ~~less~~September 30, ~~than 12~~2010, we have deferred $1.7 ~~months~~million of financing fees, $1.6 million ~~The~~of which ~~principal~~was ~~currency~~incurred ~~exposure~~during ~~being~~the ~~mitigated~~twelve months ended September 30, 2010, related to this facility that ~~was~~will be amortized as interest expense over the ~~Australian~~term ~~dollar~~of the Credit Facility. No borrowings were outstanding under the Credit Facility as of November 22, 2010.

~~During~~Share ~~July 2005, the People’s Bank of China announced that~~Repurchase it would change from its policy of fixing the value of the Yuan to the U.S. dollar to a floating rate regime managed against a basket of currencies. Although this change may create additional foreign currency risk, we do not expect that it will have a material impact on our results of operations or foreign currency risk management strategy.

~~See~~On ~~Note~~August 112, to2008, ~~the~~our ~~Consolidated~~Board ~~Financial~~of ~~Statements~~Directors inapproved a share repurchase program for up to ~~Item~~$150.0 8million. ofIn early December 2008, we completed this ~~Form~~ $150.0 ~~10-K~~million ~~for~~repurchase program at an ~~information~~average ~~about~~price ~~our~~of ~~foreign~~$7.04 ~~currency~~per ~~exchange-derivative~~share, resulting in 21.3 million shares being purchased under the program.

43 Working Capital and Liquidity Outlook

~~Item~~ Our 8main source of liquidity continues to be our unrestricted cash and cash equivalents and short-term available-for-sale securities. ~~FINANCIAL~~We ~~STATEMENTS~~also ~~AND~~consider ~~SUPPLEMENTARY~~our ~~DATA~~long-term available-for-sale securities to be highly liquid. We currently expect that our existing cash resources will be sufficient to meet our anticipated needs for working capital and capital expenditures to execute our near-term business plan. This expectation is based on current business operations and economic conditions and assumes we are able to maintain breakeven or positive cash flows from operations.

In addition, our deferred tax assets, which are reserved substantially at this time, should ~~Report~~reduce ofour ~~Independent~~income ~~Registered~~tax ~~Public~~payable ~~Accounting~~on ~~Firm~~taxable earnings in future years.

37 ~~Board of Directors and Shareowners~~

ADCTable Telecommunications,of Inc. Contents

WeContractual ~~have~~Obligations ~~audited the accompanying consolidated balance sheets of ADC Telecommunications, Inc.~~ and ~~subsidiaries~~Commercial ~~as of~~Commitments October 31, 2005 and 2004, and the related consolidated statements of operations, shareowners’ investment, and cash flows for each of the three years in the period ended October 31, 2005. Our audits also included the financial statement schedule listed in the index at Item 15. These financial statements and the schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and the schedule based on our audits.

WeThe ~~conducted~~following ~~our~~table ~~audits~~summarizes inour ~~accordance~~commitments ~~with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit~~ to ~~obtain reasonable~~make ~~assurance~~long-term ~~about~~debt ~~whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts~~ and ~~disclosures~~lease inpayments ~~the financial statements. An audit also includes assessing the accounting principles used~~ and ~~significant~~certain ~~estimates~~other ~~made~~contractual ~~by management,~~obligations as ~~well~~of asSeptember 30, ~~evaluating the overall financial~~2010: ~~statement presentation. We believe that our audits provide a reasonable basis for our opinion.~~

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of ADC Telecommunications, Inc. and subsidiaries at October 31, 2005 and 2004, and the consolidated results of their operations and their cash flows for each of the three years in the period ended October 31, 2005, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.


	Payments Due by Period
			Less						More
			Than		1-3		3-5		Than
Contractual Obligations	Total		1 Year		Years		Years		5 Years
Long-Term Debt Obligations(1)	$	772.6	$	24.9	$	249.8	$	257.1	$	240.8
Capital Lease Obligations		0.4		0.4		—		—		—
Operating Lease Obligations		67.1		15.5		24.1		16.7		10.8
Purchase Obligations(2)		35.2		35.0		0.2		—		—
Other Liabilities (3)		7.0		3.9		1.4		1.7		—
Pension Obligations		74.1		4.2		8.5		8.6		52.8

Total	$	956.4	$	83.9	$	284.0	$	284.1	$	304.4

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of ADC Telecommunications, Inc. and subsidiaries’ internal control over financial reporting as of October 31, 2005, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated January 12, 2006 expressed an unqualified opinion thereon.


(1)		Includes interest on our $450.0 million of fixed rate debt of 3.5% and interest on our $200.0 million of variable rate debt of 4.375%.

(2)		Amounts represent non-cancelable commitments to purchase goods and services, including items such as inventory and information technology support.

(3)		Represents uncertain income tax liabilities.

~~Ernst~~Application &of ~~Young~~Critical ~~LLP~~Accounting Policies and Estimates

The preparation of financial statements and related disclosures in conformity with accounting ~~Minneapolis~~principles generally accepted in the United States requires us to make judgments, ~~Minnesota~~assumptions and estimates that affect the amounts reported in our Consolidated Financial Statements and accompanying notes. Note 1 to the Consolidated Financial Statements in Item 8 of this report describes the significant accounting policies and methods used in preparing the Consolidated Financial Statements. We consider the accounting policies described below to be our most critical accounting policies because they are impacted significantly by estimates we make. We base our estimates on historical experience or various assumptions that we believe to be reasonable under the circumstances, and the results form the basis for making judgments about the reported values of assets, liabilities, revenues and expenses. Actual results may differ materially from these estimates.

Revenue Recognition: We recognize revenue, net of discounts, when persuasive evidence of an ~~January 12~~arrangement exists, ~~2006~~delivery has occurred or service has been rendered, the selling price is fixed or determinable and collectability is reasonably assured.

44 As part of the revenue recognition process, we determine whether collection is reasonably assured based on various factors, including an evaluation of whether there has been deterioration in the credit quality of our customers that could result in us being unable to collect the receivables. In situations where it is unclear whether we will be able to collect the receivable, revenue and related costs are deferred.

The majority of our revenue comes from product sales. Revenue from product sales is generally ~~ADC~~recognized ~~Telecommunications~~upon shipment of the product to the customer in accordance with the terms of the sales agreement. Revenue from services consists of fees for systems requirements, ~~Inc~~design and analysis, customization and installation services, ongoing system management, enhancements and maintenance. The majority of our service revenue comes from our Professional Services business. For this business, we primarily apply the percentage-of-completion method to arrangements consisting of design, customization and ~~Subsidiaries~~installation. We measure progress towards completion by comparing actual costs incurred to total planned project costs. All other services are provided in customer arrangements with multiple deliverables.

Some of our customer arrangements include multiple deliverables, such as product sales that ~~Consolidated~~include ~~Statements~~services to be performed after delivery of ~~Operations~~the product. In such cases, we account for a deliverable (or a group of deliverables) separately if both of the following criteria have been met: (i) the delivered item has stand-alone value to the customer, and (ii) if we have given the customer a general right of return relative to the delivered item, the delivery or performance of the undelivered item or service is probable and substantially in our control. When the elements can be separated, product revenue is generally recognized upon shipment and service

		For the Years Ended October 31,
		2005			2004			2003
		(In millions, except earnings
		per share)
Net Sales:
	Products	$	997.9		$	681.2		$	484.7
	Services		171.3			92.2			95.1
Total net sales			1,169.2			773.4			579.8
Cost of Sales:
	Products		588.6			372.0			270.0
	Services		159.7			99.1			101.8
Total cost of sales			748.3			471.1			371.8
Gross Profit			420.9			302.3			208.0
Operating Expenses:
	Research and development		71.6			59.1			59.9
	Selling and administration		262.0			205.0			158.9
	Impairment charges		0.3			1.7			15.6
	Restructuring charges		14.7			11.9			27.6
Total operating expenses			348.6			277.7			262.0
Operating Income (Loss)			72.3			24.6			(54.0	)
Other Income, Net			20.4			11.0			9.1
Income (loss) before income taxes			92.7			35.6			(44.9	)
Provision (benefit) for income taxes			7.2			2.0			(5.1	)
Income (loss) from continuing operations			85.5			33.6			(39.8	)
Discontinued Operations, Net of Tax:
	Loss from discontinued operations		(1.3	)		(67.2	)		(36.9	)
	Gain on sale of discontinued operations, net		26.5			50.0			—
			25.2			(17.2	)		(36.9	)
Net Income (Loss)		$	110.7		$	16.4		$	(76.7	)
Weighted Average Common Shares Outstanding (Basic)			116.0			115.5			114.8
Weighted Average Common Shares Outstanding (Diluted)			131.1			116.0			114.8
Basic Income (Loss) Per Share:
	Continuing operations	$	0.74		$	0.29		$	(0.35	)
	Discontinued operations	$	0.21		$	(0.15	)	$	(0.32	)
	Net income (loss)	$	0.95		$	0.14		$	(0.67	)
Diluted Income (Loss) Per Share:
	Continuing operations	$	0.72		$	0.29		$	(0.35	)
	Discontinued operations	$	0.19		$	(0.15	)	$	(0.32	)
	Net income (loss)	$	0.91		$	0.14		$	(0.67	)

TheTable accompanying notes are an integral part of these Consolidated Financial Statements. Contents

45revenue upon completion. If the elements cannot be considered separate units of accounting we defer revenue, if material, until the entire arrangement (i.e., both products and services) is delivered. We elected to early adopt the provisions of ASU 2009-13 Revenue Recognition (Topic 605) Multiple-Deliverable Revenue Arrangements, a consensus of the FASB Emerging Issues Task Force. We early adopted this new guidance on a prospective basis requiring implementation from the beginning of fiscal 2009. Under this new guidance, we allocate consideration at the inception of the arrangement to all deliverables based on the relative selling price method. The adoption of this new guidance did not impact the units of accounting or have a material impact on our financial results. Because these types of arrangements make up a small portion of our business, this new guidance did not have a significant impact on the pattern or timing of revenue recognition.

Reserves for Sales Returns, Discounts, Allowances, Rebates and Distributor Price Protection ~~ADC~~Programs: ~~Telecommunications~~We record estimated reductions to revenue for potential sales returns as well as customer programs and incentive offerings, ~~Inc~~such as discounts, allowances, rebates and distributor price protection programs. These estimates are based on contract terms, historical experience, inventory levels in the distributor channel and ~~Subsidiaries~~other factors. We believe we have sufficient historical experience to allow for reasonable and reliable estimation of these reductions to revenue.

Available-for-Sale Securities: We generally classify both debt securities with maturities of ~~Consolidated~~more ~~Balance~~than ~~Sheets~~three months but less than one year and equity securities in publicly held companies as current available-for-sale securities. Debt securities with maturities greater than one year from the acquisition date are classified as long-term available-for-sale securities. Available-for-sale securities are recorded at fair value, and temporary unrealized holding gains and losses are recorded, net of tax, as a separate component of accumulated other comprehensive income (loss). Upon the sale of a security classified as available-for-sale the amount reclassified out of accumulated other comprehensive income into earnings is based on the specific identification method. Unrealized losses related to equity securities are charged against net earnings when a decline in fair value is determined to be other-than-temporary. We review several factors to determine whether a loss is other-than-temporary. These factors include but are not limited to: (i) the length of time a security is in an unrealized loss position, (ii) the extent to which fair value is less than cost, (iii) the financial condition and near term prospects of the issuer, and (iv) our ability to hold the security for a period of time sufficient to allow for any anticipated recovery in fair value.

			October 31,			October 31,
			2005			2004
			(In millions)
ASSETS
Current Assets:
	Cash and cash equivalents		$	110.1		$	66.2
	Available-for-sale securities			335.3			434.6
	Accounts receivable, net of reserves of $9.6 and $15.8			195.6			156.2
	Unbilled revenues			38.1			34.8
	Inventories, net of reserves of $35.7 and $41.9			140.5			97.6
	Assets of discontinued operations			—			22.0
	Prepaid and other current assets			33.4			24.7
		Total current assets		853.0			836.1
Property and equipment, net of accumulated depreciation of $351.2 and $314.9				221.1			232.5
Assets held for sale				—			6.6
Restricted cash				23.6			21.9
Goodwill				240.5			180.1
Intangibles, net of accumulated amortization of $35.5 and $13.9				165.0			93.0
Available-for-sale securities				12.1			26.8
Other assets				19.7			31.1
		Total assets	$	1,535.0		$	1,428.1
LIABILITIES AND SHAREOWNERS’ INVESTMENT
Current Liabilities
	Accounts payable		$	77.4		$	72.5
	Accrued compensation and benefits			80.9			65.6
	Other accrued liabilities			78.8			80.9
	Income taxes payable			15.9			27.6
	Restructuring accrual			33.3			38.4
	Liabilities of discontinued operations			—			16.7
	Notes payable			0.3			0.3
		Total current liabilities		286.6			302.0
Pension obligations and other long-term liabilities				74.5			66.8
Long-term notes payable				400.0			400.0
		Total liabilities	$	761.1		$	768.8
Shareowners’ investment:
	Preferred stock, $0.00 par value; authorized 10.0 shares; None issued or outstanding			—			—
	Common stock, $0.20 par value; authorized 1,200.0 shares; issued and outstanding 116.5 and 115.7 shares			23.3			162.0
	Paid-in capital			1,397.9			1,250.8
	Accumulated deficit			(622.9	)		(733.6	)
	Deferred compensation			1.2			(6.4	)
	Accumulated other comprehensive loss			(25.6	)		(13.5	)
		Total shareowners’ investment		773.9			659.3
		Total liabilities and shareowners’ investment	$	1,535.0		$	1,428.1

Other-than-temporary impairments associated with debt securities are required to be separated into the amount representing the decrease in cash flows expected to be collected from a security (referred to as credit losses), which is recognized in earnings, and the amount related to other factors (referred to as noncredit losses), which is recognized in other comprehensive income. This noncredit loss component of the impairment may only be classified in other comprehensive income if both of the following conditions are met: (a) the holder of the security concludes that it does not intend to sell the security and (b) the holder concludes that it is more likely than not that the holder will not be required to sell the security before the security recovers its value. If these conditions are not met, the noncredit loss must also be recognized in earnings.

Auction rate securities, which are reflected in our available-for-sale securities at September ~~The~~30, ~~accompanying~~2009, ~~notes~~include interests in collateralized debt obligations, a portion of which are collateralized by pools of residential and commercial mortgages, interest-bearing corporate debt obligations, and non-dividend-yielding preferred stock. Liquidity for these auction rate securities historically had been provided by an ~~integral~~auction ~~part~~process that reset the applicable interest rate at pre-determined intervals, usually every 7, 28, 35 or 90 days. Because of the short interest rate reset period, we had historically recorded auction rate securities in current available-for-sale securities. As of September 30, 2009, we held auction rate securities that had experienced a failed reset process and were deemed to have experienced an other-than-temporary decline in fair value. We concluded that we did not meet the conditions necessary to recognize the noncredit loss component of the other-than-temporary impairment in other comprehensive income. Accordingly, the entire amount of the loss was recorded in earnings. As of September 30, 2010, we have sold substantially all of our auction rates securities. During the twelve months ended September 30, 2010, we sold auction rate securities having a par value of $169.1 million for proceeds of $31.4 million. As a result of these sales, we recorded net gains of $7.5 million within Other Income (Expense), Net ~~Consolidated~~(refer ~~Financial~~to ~~Statements~~Note 2).

46 Restructuring Accrual: During fiscal 2010 and fiscal 2009, we recorded restructuring charges representing the direct costs of employee severance and exiting leased facilities. Significant judgment is required in estimating the restructuring costs of severance and leased facilities. Restructuring charges represent our best estimate of the associated liability at the date the charges are taken. For example, we make certain assumptions with respect to when a facility will be subleased and the amount of income that will be generated from that sublease. Adjustments for changes in assumptions are recorded as a component of operating expenses in the period they become known. Changes in assumptions could have a material effect on our restructuring accrual as well as our consolidated results of operations.

39 ~~ADC Telecommunications, Inc. and Subsidiaries~~

ConsolidatedTable Statements of Shareowners’ Investment Contents

																	Accumulated
		Common Stock									Retained						Other
								Paid-In			Earnings			Deferred			Comprehensive
		Shares			Amount			Capital			(Deficit)			Compensation			Income (Loss)			Total
		(In millions)
Balance, October 31, 2002			799.6		$	159.9		$	1,272.6		$	(673.3	)	$	(12.3	)	$	(14.7	)	$	732.2
Net loss			—			—			—			(76.7	)		—			—			(76.7	)
Other comprehensive loss, net of tax:
	Translation loss		—			—			—			—			—			(10.7	)		(10.7	)
	Unrealized gain on securities, net of taxes of $0.0		—			—			—			—			—			4.2			4.2
Total comprehensive loss																					(83.2	)
Exercise of common stock options			2.7			0.5			3.6			—			—			—			4.1
Stock issued for employee benefit plans, net of forfeitures			4.3			0.9			5.2			—			(1.4	)		—			4.7
Reduction of deferred compensation			—			—			—			—			4.4			—			4.4
Purchased call option			—			—			(137.3	)		—			—			—			(137.3	)
Sale of warrants			—			—			102.8			—			—			—			102.8
Balance, October 31, 2003			806.6			161.3			1,246.9			(750.0	)		(9.3	)		(21.2	)		627.7
Net income			—			—			—			16.4			—			—			16.4
Other comprehensive income, net of tax:
	Translation gain, net of taxes of $0.0		—			—			—			—			—			12.3			12.3
	Unrealized loss on securities, net of taxes of $0.0		—			—			—			—			—			(0.4	)		(0.4	)
	Adjustment for sale of securities, net of taxes of $0.0		—			—			—			—			—			(4.2	)		(4.2	)
Total comprehensive income																					24.1
Exercise of common stock options			2.0			0.4			2.2			—			—			—			2.6
Reduction of deferred compensation			1.5			0.3			1.7			—			2.9			—			4.9
Balance, October 31, 2004			810.1			162.0			1,250.8			(733.6	)		(6.4	)		(13.5	)		659.3
Net income			—			—			—			110.7			—			—			110.7
Other comprehensive income, net of tax:
	Translation loss, net of taxes of $0.0		—			—			—			—			—			(4.6	)		(4.6	)
	Unrealized loss on securities, net of taxes of $0.0		—			—			—			—			—			(0.3	)		(0.3	)
	Minimum pension liability adjustment, net of taxes of $0.0		—			—			—			—			—			(7.2	)		(7.2	)
Total comprehensive income																					98.6
Reverse stock split			(694.9	)		(139.0	)		138.9			—			—			—			(0.1	)
Stock issued for employee incentive plan, net of forfeitures			0.1			—			0.2			—			(0.6	)		—			(0.4	)
Exercise of common stock options			1.2			0.3			13.2			—			—			—			13.5
Reduction of deferred compensation			—			—			(5.2	)		—			8.2			—			3.0
Balance, October 31, 2005			116.5		$	23.3		$	1,397.9		$	(622.9	)	$	1.2		$	(25.6	)	$	773.9

Inventories: We state our inventories at the lower of first-in, first-out cost or market. In assessing the ultimate realization of inventories, we are required to make judgments as to future demand requirements compared with current or committed inventory levels. Our reserve requirements generally increase as our projected demand requirements decrease due to market conditions, technological and product life cycle changes as well as longer than previously expected usage periods for previously sold equipment. It is possible that significant increases in inventory reserves may be required in the future if there is a decline in market conditions or significant change in technology. Alternatively, if we are able to sell previously reserved inventory, we will reverse a portion of the reserves. Changes in inventory reserves are recorded as a component of cost of sales. As of September 30, 2010 and 2009, we had $32.1 million and $41.8 million, respectively, reserved against our inventories, which represents 23.2% and 25.1%, respectively, of total inventory on-hand.

Impairment of Goodwill and Long-Lived Assets: Goodwill is tested for impairment annually, or ~~The~~more ~~accompanying~~frequently ~~notes~~if ~~are~~potential aninterim ~~integral~~indicators ~~part~~exist that could result in impairment. We perform impairment reviews at a reporting unit level and use a discounted cash flow model based on management’s judgment and assumptions to determine the estimated fair value of ~~these~~each reporting unit. ~~Consolidated~~Our ~~Financial~~three ~~Statements~~operating segments, Connectivity, Network Solutions and Professional Services are considered the reporting units. An impairment loss generally would be recognized when the carrying amount of the reporting unit’s net assets exceeds the estimated fair value of the reporting unit.

47 During the first quarter of fiscal 2009, due to the global economic downturn and related adverse business conditions that resulted in reduced estimates to our near-term cash flows and a sustained decline in our market capitalization, we performed a goodwill impairment analysis for our two reporting units that contained goodwill, Connectivity and Network Solutions. The analysis, which utilized forecasts and estimates based on assumptions that were consistent with the forecasts and estimates we were using to manage our business at that time, resulted in the recognition of impairment charges for both reporting units. Accordingly, we recorded impairment charges of $366.6 million to reduce the carrying value of goodwill.

We record impairment losses on long-lived assets used in operations and finite lived ~~ADC~~intangible ~~Telecommunications,~~assets ~~Inc.~~when events and ~~Subsidiaries~~circumstances indicate the assets might be impaired and the undiscounted cash flows estimated to be generated by those assets are less than their carrying amounts. Any impairment loss is measured by comparing the fair value of the asset to its carrying amount. There were no material impairments of goodwill, intangible assets, or long-lived assets during fiscal 2010.

During the first quarter of fiscal 2009, we performed an impairment analysis of intangible ~~Consolidated~~assets ~~Statements~~held in our Connectivity and Network Solutions reporting units. The analysis, which utilized forecasts and estimates based on assumptions that were consistent with the forecasts and estimates we were using to manage our business at that time, resulted in the recognition of ~~Cash~~impairment charges ~~Flows~~for Network Solutions. Accordingly, we recorded impairment charges of $41.3 million to reduce the carrying value of these long-lived intangible assets. Further deterioration of the estimates used in our impairment analysis could result in additional impairments of intangible assets in a future period.

			For the Years Ended October 31,
			2005			2004			2003
			(In millions)
Operating Activities:
Net income (loss) from continuing operations			$	85.5		$	33.6		$	(39.8	)
Adjustments to reconcile net income (loss) from continuing operations to net cash provided by operating activities from continuing operations —
	Inventory and fixed asset write-offs			0.3			1.7			15.6
	Depreciation and amortization			67.2			41.4			53.4
	Change in bad debt reserves			(3.0	)		(2.7	)		4.5
	Change in inventory reserves			5.7			(0.4	)		—
	Non-cash stock compensation			3.0			2.9			4.4
	Change in deferred income taxes			2.5			1.5			—
	(Gain) loss on sale of investments			—			(4.8	)		(0.9	)
	(Gain) loss on sale of property and equipment			(4.2	)		(0.5	)		1.0
	(Gain) loss on sale of business			—			(2.8	)		1.4
	Other, net			1.9			(1.8	)		(1.0	)
	Changes in operating assets and liabilities, net of acquisitions and divestitures:
		Accounts receivable and unbilled revenues (increase)/decrease		(31.5	)		(10.7	)		1.9
		Inventories (increase)/decrease		(40.8	)		(5.2	)		9.4
		Prepaid and other assets (increase)/decrease		(20.1	)		19.3			138.8
		Accounts payable increase/(decrease)		0.8			1.9			(29.5	)
		Accrued liabilities increase/(decrease)		(8.5	)		0.1			(123.6	)
		Pension liabilities		1.2			—			—
		Total cash provided by operating activities from continuing operations		60.0			73.5			35.6
		Total cash used by operating activities from discontinued operations		(1.4	)		(68.0	)		(3.6	)
		Total cash provided by operating activities		58.6			5.5			32.0
Investing Activities:
	Acquisitions, net of cash acquired			(173.2	)		(295.2	)		—
	Divestitures, net of cash disposed			32.8			67.9			1.9
	Property and equipment additions			(30.2	)		(10.3	)		(69.5	)
	Proceeds from disposal of property and equipment			16.7			11.2			1.9
	Proceeds from sale/collection of note receivable			18.2			—			—
	(Increase) decrease in restricted cash			(1.8	)		(6.3	)		161.4
	Purchase of available for sale securities			(957.4	)		(2,073.2	)		(652.2	)
	Sale of available for sale securities			1,071.2			2,115.9			159.5
		Total cash (used for) provided by investing activities		(23.7	)		(190.0	)		(397.0	)
Financing Activities:
	(Repayments) Issuance of debt			—			(10.7	)		371.7
	Purchase of call spread option			—			—			(34.5	)
	Common stock issued			13.6			3.7			8.2
		Total cash (used for) provided by financing activities		13.6			(7.0	)		345.4
Effect of Exchange Rate Changes on Cash				(4.6	)		(0.2	)		0.8
(Decrease) Increase in Cash and Cash Equivalents				43.9			(191.7	)		(18.8	)
Cash and Cash Equivalents, Beginning of Year				66.2			257.9			276.7
Cash and Cash Equivalents, End of Year			$	110.1		$	66.2		$	257.9

Income Taxes and Deferred Taxes: We currently have significant deferred tax assets (primarily in the United States) as a result of net operating loss carryforwards, tax credit carryforwards and temporary differences between taxable income on our income tax returns and income before income taxes under U.S. generally accepted accounting principles. A deferred tax asset represents future tax benefits to be received when these carryforwards can be applied against future taxable income or when expenses previously reported in our financial statements become deductible for income tax purposes.

In the third quarter of fiscal 2002, we recorded a full valuation allowance against our net ~~The~~deferred ~~accompanying~~tax ~~notes~~assets ~~are~~because anwe ~~integral~~concluded ~~part~~that it was more likely than not that we would not realize these assets. Our decision was based on the cumulative losses we had incurred to that point as well as the full utilization of our loss carryback potential. From the third quarter of fiscal 2002 to fiscal 2005, we maintained our policy of providing a nearly full valuation allowance against all future tax benefits produced by our operating results. During fiscal 2006 to fiscal 2010, we determined our recent experience generating U.S. income, along with our projection of future U.S. income, constituted significant positive evidence for partial realization of our U.S. deferred tax assets. Although we have reported losses during fiscal 2008 and fiscal 2009, these losses were ~~Consolidated~~primarily ~~Financial~~attributable ~~Statements~~to impairment charges, including non-deductible goodwill which did not reduce U.S. taxable income. As of September 30, 2010 we have recognized a total of $51.6 million of our U.S. deferred tax assets expected to be realized. At one or more future dates, if sufficient positive evidence exists that it is more likely than not that additional benefits will be realized with respect to our deferred tax assets, we will release additional valuation allowance. Also, certain events, including our actual results or changes to our expectations regarding future U.S. income or other negative evidence, may result in the need to increase the valuation allowance. We had a valuation allowance of $790.3 million as of September 30, 2010.

4840

ADCTable Telecommunications,of Inc. and Subsidiaries Contents

We recognize the income tax benefit from an uncertain tax position if, based on the technical ~~Notes~~merits of the position, it is more likely than not that the tax position will be sustained upon examination by the taxing authorities. The tax benefit recognized in the financial statements from such a position is measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. No tax benefit has been recognized in the financial statements if the more likely than not recognition threshold has not been met. The actual tax benefits ultimately realized may differ from our estimates. In future periods, changes in facts, circumstances, and new information may require us to ~~Consolidated~~change ~~Financial~~the ~~Statements~~recognition and measurement estimates with regard to individual tax positions. Changes in recognition and measurement estimates are recorded in the financial statements in the period in which the change occurs.

See Note 1:10 ~~Summary~~to the Consolidated Financial Statements in Item 8 of ~~Significant~~this ~~Accounting~~report ~~Policies~~for further discussion of the accounting treatment for income taxes.

~~Business~~Share-Based Compensation: We ~~are~~use athe ~~leading~~Black-Scholes ~~global~~Model ~~provider~~for purposes of determining estimated ~~communications~~fair ~~network~~value ~~infrastructure~~of ~~solutions~~share-based ~~and~~payment ~~services. Our~~awards ~~products~~on ~~and~~the ~~services~~date ~~provide~~of ~~connections~~grant. ~~for~~The ~~communications~~Black-Scholes Model requires ~~networks~~certain ~~over~~assumptions ~~copper,~~that ~~fiber,~~involve ~~coaxial~~judgment. ~~and~~Because ~~wireless~~our ~~media~~employee stock options and ~~enable~~ ~~the~~restricted ~~use~~stock units ofhave ~~high-speed~~characteristics ~~Internet,~~significantly ~~data,~~different ~~video~~from ~~and~~those ~~voice services~~of bypublicly ~~residences~~traded options, ~~businesses~~ and because ~~mobile~~changes ~~communications subscribers.~~in ~~Our~~the ~~products~~input ~~include~~assumptions ~~fiber~~can ~~optic,~~materially ~~copper~~affect ~~and coaxial~~the ~~based~~fair ~~frames,~~value ~~cabinets~~estimate, ~~cables,~~the existing ~~connectors,~~models ~~cards~~may ~~and other~~not ~~physical~~provide ~~components~~a ~~essential~~reliable tosingle ~~enable~~measure of the ~~delivery~~fair value of ~~communications~~ ~~for~~our ~~wireline,~~share-based payment ~~wireless,~~awards. ~~cable~~Management ~~and~~will ~~broadcast.~~continue ~~Our products~~to ~~also~~assess ~~include~~the ~~network~~assumptions ~~access~~and ~~devices~~methodologies ~~such~~used asto ~~high~~calculate estimated fair value of share-~~bit-rate~~based ~~digital~~compensation. ~~subscriber~~Circumstances ~~line~~may change and ~~wireless coverage~~additional ~~solutions.~~data ~~Our~~may ~~products~~become ~~are~~available ~~primarily~~over ~~used~~time, inwhich ~~the~~could ~~“last mile/kilometer”~~result ~~portion~~in ofchanges ~~networks.~~to ~~This~~these ~~network~~assumptions ofand ~~copper,~~methodologies ~~coaxial~~and ~~cable,~~thereby ~~fiber~~materially ~~lines,~~impact ~~wireless~~our ~~facilities~~fair ~~and related~~value ~~equipment~~determination. ~~link~~If ~~voice,~~factors ~~video~~change and ~~data~~we employ ~~traffic~~different ~~from~~assumptions, the ~~end-user~~ ofcompensation ~~the~~expense ~~communications~~that ~~service~~we torecord ~~the~~may ~~serving~~differ ~~office~~significantly offrom ~~our~~what ~~customer~~we have recorded in the current period. InWe ~~addition,~~elected weto ~~compliment~~adopt ~~our~~the ~~hardware~~alternative ~~business~~transition method ~~through~~provided ~~the~~for ~~provision~~purposes of ~~professional~~calculating ~~services~~the ~~relating~~pool toof ~~the design,~~excess ~~equipping~~tax ~~and~~benefits ~~building~~available ofto ~~networks~~absorb tax deficiencies recognized.

~~Our~~Recently ~~customers~~Adopted ~~include~~Accounting ~~local and long-distance telephone~~Pronouncements companies, private enterprises that operate their own networks, cable television operators, wireless service providers, new competitive service providers, broadcasters, governments, system integrators and communications equipment manufacturers and distributors. We offer broadband connectivity systems, enterprise systems, wireless transport and coverage optimization systems, business access systems and professional services to our customers through the following two reportable business segments: Broadband Infrastructure and Access and Professional Services (previously known as Integrated Solutions).

~~Principles~~ Business ofcombinations ~~Consolidation: The consolidated financial statements include the accounts of ADC Telecommunications, Inc., a Minnesota corporation,~~ and ~~all~~non-controlling ~~significant subsidiaries~~interests ~~in which ADC Telecommunications, Inc. has more than a 50%~~ equity ownership. In these Notes to Consolidated Financial Statements, these companies are collectively referred to as “ADC,” “we,” “us” or “our.” All significant intercompany transactions and balances have been eliminated in consolidation.

~~Basis~~In ~~of Presentation: During fiscal 2005~~December 2007, wethe ~~sold~~FASB ~~our ADC~~issued ~~Systems~~new ~~Integration~~accounting UKguidance ~~Limited~~related ~~(“SIUK”)~~to business combinations and non-controlling ~~Metrica~~interests ~~service~~in ~~assurance~~consolidated ~~software~~financial ~~group~~statements. ~~During~~In ~~fiscal~~addition to other changes in ~~2004~~practice, wethe ~~sold~~guidance ~~our~~requires ~~BroadAccess40~~the ~~business,~~acquiring ~~the~~entity in a business ~~related~~ combination to ~~our~~recognize ~~Cuda~~and measure ~~cable~~all ~~modem~~assets ~~termination~~acquired ~~system~~and ~~product~~liabilities ~~line~~assumed ~~and~~at their respective acquisition date fair ~~related~~values. ~~FastFlow~~The ~~Broadband~~guidance ~~Provisioning~~also ~~Manager~~requires ~~software,~~non-controlling ~~and~~interests in a subsidiary to be reported as equity in the ~~business~~financial ~~related~~statements, toseparate ~~our~~from ~~Singl.eView~~the ~~product~~parent’s ~~line~~equity. InWe have adopted this ~~accordance~~guidance ~~with~~effective ~~SFAS~~October ~~No. 144~~1, ~~these~~2009. ~~businesses~~We ~~were~~have reclassified financial statement line items within our ~~classified~~condensed asconsolidated ~~discontinued~~balance sheets and statements of operations infor ~~fiscal~~the ~~2005~~prior ~~and~~period ~~2004~~to conform ~~and~~to the ~~financial~~non-controlling ~~results~~interest ~~are~~guidance. ~~reported~~Additionally, ~~separately~~see asthe Consolidated Statements of ~~discontinued~~Shareowners’ ~~operations~~Investment and Note 13 for ~~all~~disclosures ~~periods~~reflecting ~~presented~~the impact of the new guidance on our reconciliations of equity and comprehensive income, respectively.

Fair Value ~~of Financial Instruments: At October 31,~~Measurements 2005 and 2004, our financial instruments included cash and cash equivalents, restricted cash, accounts receivable, available-for-sale securities and accounts payable. The fair values of these financial instruments approximated carrying value because of the short-term nature of these instruments. In addition, we have long-term notes payable. We estimate that the carrying value of our $200.0 million variable rate notes is its fair market value. As of October 31, 2005, the fair value of our $200.0 million fixed rate notes was $182.7 million. Fair value was estimated based on the quoted market price at October 31, 2005.

~~Reclassifications:~~In ~~Certain~~January 2010, ~~prior~~the ~~year~~FASB ~~amounts~~issued ~~have~~new ~~been reclassified~~accounting toguidance ~~conform~~regarding todisclosures ~~the~~about ~~current~~fair value ~~year presentation~~measurements. ~~These reclassifications~~The ~~have~~guidance norequires ~~effect~~additional ondisclosures ~~reported~~concerning ~~earnings.~~transfers ~~Auction~~between the ~~rate~~levels ~~securities,~~within ~~which~~the ~~previously~~fair ~~had~~value ~~been~~hierarchy ~~classified~~and asinformation ~~cash~~in the reconciliation of recurring Level 3 ~~and~~measurements ~~cash~~about ~~equivalents~~purchases, ~~are~~sales, ~~now~~issuances ~~classified~~and assettlements ~~current available-for-sale~~on ~~securities~~a ~~for~~gross ~~all~~basis. ~~periods~~The ~~presented.~~new ~~This~~guidance ~~reclassification~~also ~~had~~clarifies nothe ~~impact~~requirement onto ~~current~~provide ~~assets,~~fair ~~working capital,~~value ormeasurement ~~any~~disclosures ~~amounts~~for ~~reported~~each onclass ~~the~~of asset ~~statement~~and ofliability ~~operations. Changes~~and inclarifies ~~available-for-sale~~the ~~securities~~requirement ~~are~~to ~~shown~~disclose ininformation about both the valuation ~~investing~~techniques ~~section~~and ofinputs ~~the~~used ~~statement~~to ofestimate ~~cash~~Level ~~flows~~2 and Level 3 measurements. AsWe ofadopted this guidance ~~October~~effective January 312, ~~2005~~2010. ~~and~~The ~~2004,~~adoption weof ~~held~~this ~~auction~~guidance ~~rate~~resulted ~~securities~~in additional disclosures and had ~~with~~no amaterial ~~value~~impact ofon ~~$307.5 million~~our ~~and~~consolidated ~~$427~~financial statements.~~3 million,~~ ~~respectively.~~

49 In September 2006, the FASB issued new accounting guidance related to fair value measurements. In February 2008, the FASB issued guidance delaying the effective date of the accounting guidance for nonfinancial assets and nonfinancial liabilities until the beginning of fiscal 2010, except for items that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). We adopted this guidance effective October 1, 2009. The adoption of the guidance had no material impact on our consolidated financial statements.

In August 2009, the FASB issued guidance regarding measuring liabilities at fair value. This ~~ADC~~guidance ~~Telecommunications~~clarifies how the fair value of a liability should be determined. Among other things, ~~Inc~~the guidance clarifies how the price of a traded debt security (i.e., ~~and~~an ~~Subsidiaries~~asset value) should be considered in estimating the fair value of the issuer’s liability. We adopted this guidance effective October 1, 2009. The adoption of this guidance had no material impact on our consolidated financial statements.

41 ~~Notes to Consolidated Financial Statements — (Continued)~~

ReverseTable Stock Split: On April 18, 2005, we announced a one-for-seven reverse split of our common stock. The effective date of the reverse split was May 10, 2005. All share, share equivalent and per share amounts have been adjusted to reflect the reverse stock split for all periods presented in this Form 10-K. We did not issue any fractional shares of our new common stock as a result of the reverse split. Instead, shareowners who would otherwise be entitled to receive a fractional share of new common stock received cash for the fractional share in an amount equal to the fractional share multiplied by the split adjusted price of one share of ADC’s common stock. As a result, we have a treasury stock balance of 4,272 shares at $16.10 per share. The treasury stock balance is included as a reduction to the common shares and a reduction to paid-in capital. Contents

~~Cash~~Accounting ~~and~~for ~~Cash~~Convertible ~~Equivalents:~~Debt ~~Cash~~Instruments ~~equivalents~~That ~~represent short-term~~May ~~investments~~be Settled in ~~money~~Cash ~~market~~upon ~~instruments with original~~Conversion ~~maturities~~(Including ofPartial ~~three~~Cash ~~months or less. The carrying amounts of~~Settlement) these investments approximate their fair value due to their short maturities. At October 31, 2005, the majority of our cash equivalents were spread between three major financial institutions to avoid any significant concentration risk.

~~Restricted~~In ~~Cash:~~May 2008, ~~Restricted~~the ~~cash~~FASB ~~consists~~issued ~~primarily~~accounting ~~of collateral~~guidance ~~for~~that ~~letters~~clarifies ofthe ~~credit~~accounting ~~and~~for ~~lease~~convertible debt ~~obligations,~~instruments ~~which~~that ~~is expected~~may tobe ~~become~~settled ~~available~~in tocash us(including ~~upon~~partial ~~satisfaction~~cash ofsettlement) ~~the~~upon conversion. ~~obligations~~The ~~pursuant~~accounting guidance requires issuers to ~~which~~account separately for the ~~letters~~liability and equity components of ~~credit~~certain orconvertible debt instruments in a manner that reflects the issuer’s ~~guarantees~~nonconvertible ~~were~~debt ~~issued.~~(unsecured Indebt) ~~addition,~~borrowing werate ~~have~~when $6interest cost is recognized.~~7 million~~ The guidance requires bifurcation of ~~restricted~~a ~~cash~~component ~~held~~of inthe ~~trust~~debt, ~~related~~classification toof ~~our~~that ~~FONS~~component in equity and the ~~acquisition,~~accretion ~~which~~of isthe resulting discount on debt to be ~~paid~~recognized as part of interest expense. The guidance requires retrospective application to ~~FONS~~the ~~employees~~terms ~~over~~of the instruments as they existed for all ~~course~~periods presented. We adopted the guidance effective October 1, 2009. The adoption of the ~~next~~guidance did ~~nine~~not ~~months~~impact our consolidated financial statements because our convertible debt cannot be settled in cash upon conversion.

~~Available-for-Sale~~Determining ~~Securities:~~Whether Wean ~~classify~~Instrument ~~debt securities~~(or ~~with~~an ~~maturities~~Embedded ofFeature) ~~more~~is ~~than~~Indexed three months but less than one year and equity securities in publicly held companies as current available-for-sale securities. Debt securities with maturities greater than one year on their acquisition date are classified as long-term available-for-sale securities. We intend to ~~hold~~an ~~the~~Entity’s ~~long-term~~Own ~~available-for-sale securities for a period~~Stock ~~longer than 12 months.~~

~~Inventories:~~In ~~Inventories include material~~June 2008, ~~labor~~the ~~and overhead~~FASB ~~and~~issued ~~are~~accounting ~~stated~~guidance atregarding the ~~lower~~determination of ~~first-in,~~ ~~first-out~~whether an ~~cost~~instrument (or ~~market~~an embedded feature) is indexed to an entity’s own stock. InThe ~~assessing~~guidance provides that the ~~ultimate~~entity ~~realization~~should ~~of inventories,~~use wea ~~are~~two ~~required~~step approach to ~~make~~evaluate ~~judgments~~whether asan toequity-linked ~~future~~financial instrument ~~demand~~(or ~~requirements~~embedded ~~compared~~feature) is indexed to ~~current~~its orown ~~committed~~stock. ~~inventory~~This includes evaluating the instrument’s ~~levels~~contingent exercise and settlement provisions. ~~Our~~It ~~reserve~~also ~~requirements~~clarifies ~~generally~~the ~~increase~~impact asof ~~our~~foreign currency ~~projected~~denominated ~~demand~~strike ~~requirements~~prices ~~decrease~~and ~~due~~market-based toemployee ~~market~~stock ~~conditions,~~option valuation instruments on the ~~technological~~evaluation. ~~and~~We ~~product~~adopted ~~life~~the ~~cycle~~guidance ~~changes~~effective October 1, ~~and~~2009. ~~longer~~The ~~than~~adoption of the guidance had no ~~previously~~material ~~expected~~impact ~~usage~~on ~~periods~~our consolidated financial statements.

~~Property~~Consolidation ~~and Equipment: Property and equipment are recorded at cost and depreciated using the straight-line method over estimated useful lives~~ of ~~three~~Variable toInterest ~~thirty years or, in the~~Entities ~~case of leasehold improvements, over the term of the lease, if shorter. Both straight-line and accelerated methods of depreciation are used for income tax purposes.~~

~~Impairment~~In ofJune 2009, ~~Long-Lived~~FASB ~~Assets:~~issued Inguidance ~~fiscal~~that ~~2003,~~revises ~~we adopted~~the ~~SFAS No. 144,~~consolidation ~~“Accounting~~of ~~for~~variable ~~the~~interest ~~Impairment~~entities orby ~~Disposal~~requiring ofan ~~Long-Lived~~analysis ~~Assets.”~~to Wedetermine ~~record impairment~~whether ~~losses~~a onvariable ~~long-lived~~interest ~~assets~~gives ~~used~~the inentity ~~operations and~~a ~~definite~~controlling ~~lived~~financial ~~intangible~~interest ~~assets~~in ~~when~~a ~~events~~variable ~~and~~interest ~~circumstances indicate~~entity. ~~the~~This ~~assets~~guidance ~~might~~requires bean ~~impaired~~ongoing reassessment and eliminates the ~~undiscounted~~quantitative ~~cash flows~~approach ~~estimated~~previously torequired befor ~~generated~~determining bywhether an ~~those~~entity ~~assets~~is ~~are~~the ~~less~~primary ~~than their~~beneficiary. ~~carrying~~We ~~amounts.~~are ~~The~~required ~~impairment~~to ~~loss~~adopt isthe ~~measured~~guidance ~~by comparing~~in the ~~fair~~first ~~value~~quarter of 2011. ~~the~~The ~~asset~~adoption toof ~~its~~the ~~carrying~~guidance ~~amount. See~~will ~~Note 16~~not ~~for~~have ~~details~~a ofmaterial impact on our ~~impairment~~consolidated ~~charges~~financial statements.

~~Goodwill~~Disclosures ~~and~~about ~~Other Intangible Assets: Goodwill is tested for impairment annually, or more frequently if events or changes in circumstances indicate that~~ the ~~asset~~Credit ~~might~~Quality beof ~~impaired.~~Financing ~~We perform~~Receivables ~~impairment reviews at a reporting unit level~~ and ~~use a discounted cash flow model based on management’s judgment and assumptions to determine~~ the ~~estimated~~Allowance fair value of each reporting unit. An impairment loss generally would be recognized when the carrying amount of the reporting unit’s net assets exceeds the estimated fair value of the reporting unit. Impairment testing indicated that the estimated fair value of each reporting unit exceeded its corresponding carrying amount, including recorded goodwill and, as such, no impairment existed at that time. Our other intangible assets (consisting primarily of technology, trademarks, customer lists, non-compete agreements, distributor network and patents) are amortized over their useful lives, which are from one to twenty years. Refer to Note 7 for ~~details of our goodwill and intangible assets.~~Credit Losses

50 In July 2010, the FASB issued accounting guidance that expanded the disclosures regarding the allowance for credit losses and the credit quality of financing receivables. The guidance requires additional disclosures be made addressing the nature of the credit risk, how the risk is analyzed and any changes in accounting for the allowance for credit losses for any companies that have significant financing receivables, excluding short-term trade accounts receivables. We are required to adopt the guidance in the first quarter of 2011. The adoption of the guidance will not have a material impact on our consolidated financial statements.

~~ADC~~ Accounting ~~Telecommunications,~~for ~~Inc.~~Technical Amendments to Various SEC Rules and ~~Subsidiaries~~Schedules

In August 2010, the FASB issued accounting guidance requiring an analysis of changes in ~~Notes~~non-controlling interests for the reporting period in a separate statement or footnote. This analysis should consist of reconciliation from the beginning balance to ~~Consolidated~~the ~~Financial~~ending balance for each ~~Statements — (Continued)~~period in which an income statement is presented. Significant reconciling items, like changes in the ownership interest of a subsidiary, should be stated separately in the analysis. We are required to adopt the guidance in the first quarter of 2011. The adoption of the guidance will not have a material impact on our consolidated financial statements.

~~Research~~We ~~and~~have ~~Development~~determined ~~Costs:~~that ~~Our~~all ~~policy~~other isrecently toissued ~~expense~~accounting standards will not have a ~~all~~material ~~research~~impact ~~and~~on ~~development~~our ~~costs~~Consolidated inFinancial ~~the~~Statements, ~~period~~or ~~incurred~~do not apply to our operations.

~~Revenue~~Cautionary ~~Recognition:~~Statement WeRegarding ~~recognize~~Forward ~~revenue,~~Looking ~~net of~~Information discounts, when product ownership and the risk of loss has transferred to the customer, we have no remaining obligation, persuasive evidence of a final agreement exists, delivery has occurred, the selling price is fixed or determinable and collectibility is reasonably assured.

~~Revenue~~The ~~from~~discussion ~~product~~herein, ~~sales~~including, isbut ~~generally~~not ~~recognized~~limited ~~upon~~to, ~~shipment~~Management’s Discussion and Analysis of Financial Condition and Results of Operations as well as the ~~product~~Notes to the ~~customer~~Condensed inConsolidated Financial ~~accordance~~Statements, ~~with~~contains ~~the~~various ~~terms~~“forward-looking of statements” within the ~~sales~~meaning ~~agreement.~~of ~~Revenue~~Section 27A ~~from~~of ~~services~~the ~~consists~~Securities Act of ~~fees~~1933, ~~for systems~~as ~~requirements~~amended, ~~design~~ and ~~analysis,~~Section 21E ~~customization~~of ~~and installation~~the ~~services,~~Securities ~~ongoing~~Exchange ~~system~~Act ~~management~~of 1934, ~~enhancements and~~as ~~maintenance.~~amended We(the ~~primarily~~“Exchange ~~apply~~Act”). ~~the percentage~~Forward-~~of-completion method~~looking tostatements ~~arrangements~~represent ~~consisting~~our ofexpectations ~~design,~~or beliefs ~~customization~~concerning future events and ~~installation.~~ Weare ~~measure~~subject ~~progress~~to ~~towards~~certain ~~completion~~risks byand uncertainties that could ~~comparing~~cause ~~costs~~actual ~~incurred~~results to ~~total~~differ ~~planned~~materially ~~project~~from ~~costs.~~the forward looking

42 ~~We record provisions against our gross revenue for estimated product returns and allowances in the period when the related revenue is recorded.~~

AllowanceTable for Uncollectible Accounts: We are required to estimate the collectibility of our trade and notes receivable. A considerable amount of judgment is required in assessing the realization of these receivables, including the current creditworthiness of each customer and related aging of past due balances. In order to assess the collectibility of these receivables, we perform ongoing credit evaluations of our customers’ financial condition. Through these evaluations we may become aware of a situation where a customer may not be able to meet its financial obligations due to deterioration of its financial viability, credit ratings or bankruptcy. The reserve requirements are based on the best facts available to us and are reevaluated and adjusted as additional information is received. Contents

statements. These statements may include, among others, statements regarding the proposed ~~Warranty:~~merger Wetransaction ~~provide~~with ~~reserves~~Tyco ~~for~~Electronics Ltd. and the ~~estimated~~related ~~cost~~litigation, statements about future sales, profit percentages, earnings per share and other results of operations; statements about ~~product~~shareholder ~~warranties~~value; atexpectations or beliefs regarding the ~~time~~industry ~~revenue~~in iswhich ~~recognized.~~we Weoperate and the ~~estimate~~macro-economy generally; statements about our cost cutting initiatives; the prices of raw materials and transportation costs; the sufficiency of our ~~warranty~~cash ~~obligations~~balances ~~based~~and oncash generated from operating and financing activities for our future liquidity; capital resource needs, and the effect of ~~warranty~~regulatory ~~policy~~changes. These statements could be affected by a variety of factors, such as: uncertainties as to the timing of the merger transaction with Tyco Electronics Ltd.; the possibility that various closing conditions for the merger transaction may not be satisfied or waived, ~~applicable~~including ~~contractual~~that ~~warranty~~a governmental entity may prohibit, ~~our~~delay or refuse to grant approval for ~~historical~~the ~~experience~~consummation of ~~known~~the ~~product~~transaction; ~~failure~~the ~~rates~~effects of the merger transaction on our relationships with employees, customers, vendors and ~~use~~other business partners; the risk that shareholder litigation in connection with the merger transaction may result in significant costs of defense, ~~materials~~indemnification and liability; demand for equipment by telecommunication service ~~delivery~~providers and large enterprises; variations in demand for particular products in our portfolio and other factors that can impact our overall margins; our ability to operate our business to achieve, maintain and grow operating profitability; our ability to reduce costs ~~incurred~~without adversely affecting our ability to serve our customers; changing regulatory conditions and macro-economic conditions, both in ~~correcting~~our ~~product~~industry ~~failures.~~and Inin ~~addition~~local and global markets that can influence the demand for our products and services; fluctuations in the market value of our common stock, ~~from~~which ~~time~~can be caused by many factors outside of our control and could cause us to record additional impairment charges on our goodwill or other intangible assets in the future if our market capitalization drops below the book value of our assets for a continued time period; consolidation among our customers, ~~specific~~competitors or vendors ~~warranty~~that ~~accruals~~can ~~may~~disrupt or displace customer relationships; our ability to keep pace with rapid technological change in our industry; our ability to make the proper strategic choices regarding acquisitions or divestitures; our ability to integrate the operations of any acquired business; increased competition within our industry and increased pricing pressure from our customers; our dependence on relatively few customers for a majority of our sales as well as potential sales growth in market segments we believe have the greatest potential; fluctuations in our operating results from quarter-to-quarter that can be ~~made~~caused ifby ~~unforeseen~~many ~~technical~~factors beyond our control; financial problems, work interruptions in operations or other difficulties faced by customers or vendors that can impact our sales, sales collections and ability to procure necessary materials, components and services to operate our business; our ability to protect our intellectual property rights and defend against potential infringement claims; possible limitations on our ability to raise any additional required capital; our ability to attract and retain qualified employees; potential liabilities that can arise if any of our products have design or manufacturing defects; our ability to obtain, and the prices of, raw materials, components and services; our dependence on contract manufacturers to make certain products as well as our reliance on our operation of a limited number of significant manufacturing facilities around the world; changes in interest rates, foreign currency exchange rates and equity securities prices, all of which will impact our operating results; political, economic and legal uncertainties related to doing business in China or other developing countries; our ability to defend or settle satisfactorily any litigation; and other risks and uncertainties including those identified in the section captioned Risk Factors in Item 1A of this Annual Report on Form 10-K for the year ended September 30, 2010. We disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

~~The changes in the amount of warranty reserve for the fiscal years ended October~~Item ~~31,~~7A. ~~2005,~~QUANTITATIVE ~~2004~~AND ~~and~~QUALITATIVE ~~2003~~DISCLOSURES isABOUT asMARKET ~~follows:~~RISK

	(In millions)
Balance as of October 31, 2002	$	10.5
Charged to other accounts		—
Charged to costs and expenses		5.7
Deductions (write-off’s)		5.8
Balance as of October 31, 2003		10.4
Charged to other accounts		5.3
Charged to costs and expenses		4.0
Deductions (write-off’s)		(5.3	)
Balance as of October 31, 2004		14.4
Charged to other accounts		—
Charged to costs and expenses		2.7
Deductions (write-off’s)		(6.3	)
Balance as of October 31, 2005	$	10.8

Our major market risk exposures relate to adverse fluctuations in certain commodity prices, interest rates, security prices and foreign currency exchange rates. Market fluctuations in any of these prices or rates could affect our results of operations and financial condition adversely. At times, we attempt to reduce this risk through the use of derivative financial instruments. We do not enter into derivative financial instruments for the purpose of speculation.

51 We use certain commodities and other raw materials in the production of our products that are subject to price volatility caused by many factors, including supply conditions, demand levels, political and economic variables and other unpredictable factors. Management attempts to mitigate these risks through effective requirements planning and by working closely with key suppliers to obtain the best possible pricing and delivery terms. In addition, in certain areas of our business where contractual terms allow, we are able to pass-through a portion of this volatility to our customers, although this pass-through typically occurs on a delayed basis due to internal processing time and, potentially, contractual terms. We periodically evaluate our commodity pricing exposures and have considered the use of derivative instruments to hedge our commodity price risks, but, to date, we have concluded that it was not cost beneficial to utilize derivative instruments for this purpose.

We are exposed to fluctuations in interest rates through the issuance of variable rate debt ~~ADC~~and ~~Telecommunications,~~by ~~Inc~~investing our cash holdings in short-term investments. ~~and~~We ~~Subsidiaries~~mitigate our exposures to interest rate fluctuations related to our debt by entering into derivative instruments which can reduce exposure to interest rate volatility.

43 ~~Notes to Consolidated Financial Statements — (Continued)~~

DeferredTable Financing Costs: Deferred financing costs are capitalized and amortized as interest expense on a basis that approximates the effective interest method over the terms of the related notes. Contents

~~Income~~For ~~Taxes~~example, ~~and~~on ~~Deferred~~April 29, ~~Taxes:~~2008, Wewe ~~utilize~~entered ~~the~~into ~~liability method~~an ofinterest ~~accounting~~rate ~~for~~swap ~~income~~effective ~~taxes.~~June 15, ~~Deferred tax liabilities~~2008, orfor ~~assets~~a ~~are~~notional ~~recognized~~amount ~~for~~of ~~the~~$200 million ~~expected~~to ~~future~~hedge ~~tax consequences~~the ofrisk ~~temporary~~associated ~~differences~~with ~~between~~ the ~~book~~floating ~~and~~interest ~~tax~~rate ~~bases~~ of ~~assets~~our ~~and~~$200 million ~~liabilities.~~of Weconvertible ~~regularly~~unsecured ~~assess~~subordinated ~~the likelihood~~notes that ~~our~~have ~~deferred~~a ~~tax~~variable ~~assets~~interest ~~will~~rate of besix-month ~~recovered~~LIBOR ~~from future~~plus ~~taxable~~0.375% ~~income,~~ and ~~we record~~ a ~~valuation~~maturity ~~allowance~~date ~~to reduce~~of ~~our~~June 15, ~~deferred~~2013. ~~tax~~For ~~assets~~this tointerest ~~the~~rate ~~amounts~~ swap, we ~~believe~~pay tothe ~~be realizable.~~counterparty Wethe ~~consider~~equivalent ~~projected~~of ~~future~~a ~~taxable~~fixed ~~income~~rate ~~and ongoing~~interest ~~tax~~payment ~~planning~~of ~~strategies~~4.0% inon ~~assessing~~a ~~the amount of the~~predetermined ~~valuation~~notional ~~allowance.~~value, Ifand we ~~determine~~receive wethe ~~will~~equivalent ~~not~~of ~~realize~~a ~~all~~floating ~~or part~~interest ofpayment ~~our~~based ~~deferred~~on ~~tax~~a ~~assets,~~six-month LIBOR anrate ~~adjustment~~calculated toon the ~~deferred tax~~same ~~asset~~notional ~~will~~value. beIf ~~charged~~the tointerest ~~earnings~~rate inswap ~~the~~had ~~period~~been ~~such~~discontinued ~~determination~~on isSeptember 30, ~~made.~~2010, Wewe ~~concluded~~would ~~during~~have owed the ~~third~~counterparties ~~quarter~~approximately of$16.8 million. Because ~~fiscal~~we ~~2002~~have ~~that~~mitigated athe ~~full~~interest ~~valuation~~rate ~~allowance~~exposure ~~against~~on our ~~net deferred~~variable ~~tax~~rate ~~assets~~long ~~was~~term ~~appropriate~~debt asby aentering ~~result of our~~into ~~cumulative~~this ~~losses~~interest torate ~~that~~swap ~~point~~agreement, ~~and~~effectively fixing the ~~full~~interest ~~utilization~~rate ofwe ~~our loss~~pay ~~carryback~~on ~~potential.~~our Invariable ~~addition~~rate long-term debt, wea ~~expect~~10% toincrease ~~provide~~or ~~a nearly~~decrease ~~full~~in ~~valuation~~interest ~~allowance~~rates on ~~any~~our ~~future~~debt ~~tax~~obligations ~~benefits~~would ~~until we~~have ~~can sustain~~ a nominal ~~level~~impact ~~of profitability that demonstrates,~~ on ~~a more likely than not basis,~~ our ~~ability~~income to(loss) before ~~utilize~~income ~~these assets~~taxes.

We also are exposed to market risk from changes in foreign currency exchange rates as we ~~Foreign~~conduct ~~Currency~~business ~~Translation:~~globally Wein ~~convert~~numerous ~~assets~~currencies. ~~and~~Our primary risk is the effect of foreign ~~liabilities~~currency exchange rate fluctuations on the U.S. dollar value of foreign ~~operations~~currency todenominated operating ~~their~~sales and expenses. For example, if the U.S. dollar strengthens relative to other ~~equivalents~~currencies, atsuch ~~rates~~strengthening incould have an indirect effect aton our sales to the ~~balance~~extent ~~sheet~~it ~~dates,~~raises the cost of our products to non-U.S. customers and we ~~record~~thereby ~~translation~~reduces ~~adjustments~~demand. inA ~~shareowners’~~weaker U.S. dollar ~~investment~~could have the opposite effect. ~~Income~~However, ~~statements~~the precise indirect effect of ~~foreign~~currency ~~operations~~fluctuations ~~are~~is ~~translated~~difficult ~~from~~to measure or predict because our sales are influenced by many factors in addition to the impact ~~operations’~~of ~~functional~~such currency fluctuations. Our largest exposure is related to the Mexican peso. We estimate that a 10% weakening in the U.S. dollar ~~equivalents~~to at the ~~exchange~~Mexican ~~rate~~peso onwould ~~the transaction~~result ~~dates~~in a $4.3 million reduction ~~Foreign~~to ~~currency~~our ~~exchange~~operating ~~transaction~~income ~~gains and~~due ~~losses~~to ~~are~~the ~~reported~~impact inof ~~other~~the ~~income~~change ~~(expense),~~on ~~net~~our Mexican peso denominated sales and expenses.

WeAs ~~are also exposed to foreign currency exchange risk as a result~~ of ~~changes in intercompany balance sheet accounts and other balance sheet items. At October~~September 3130, ~~2005~~2010, ~~these balance~~we ~~sheet~~have ~~exposures~~entered ~~were~~into ~~mitigated~~a ~~through~~series ~~the use~~ of ~~foreign~~ ~~exchange~~ forward contracts ~~with~~and ~~maturities of less than~~costless ~~12 months.~~collars ~~Derivatives~~to ~~entered~~mitigate ~~into~~a ~~for~~certain ~~this~~portion ~~purpose~~of ~~are classified~~our asexpected ~~economic~~exposure ~~hedges~~to ofthe ~~foreign~~Mexican ~~currency~~peso ~~cash~~in ~~flows.~~fiscal We2011. ~~record~~The ~~these~~forward ~~instruments~~contracts atenable ~~fair~~us ~~value~~to onpurchase ~~our~~Mexican ~~balance~~pesos ~~sheet, with~~at ~~gains~~specified rates and ~~losses~~the ~~recorded in other income (expense) as~~collars ~~foreign~~establish ~~currency~~a ~~transactions.~~cap ~~The~~and ~~principal~~a ~~currency~~floor ~~exposure being~~on ~~mitigated was~~ the ~~Australian~~price ~~dollar.~~at Aswhich ~~of October 31,~~we ~~2005,~~purchase ~~the~~pesos. ~~fair~~These ~~value~~forward ofcontracts ~~these derivative~~and ~~instruments~~collars ~~are~~have ~~immaterial~~been todesignated ~~the~~as ~~financial~~cash ~~statements~~flow hedges.

~~Our~~We also are exposed to foreign currency ~~forward~~exchange ~~contracts~~risk ~~contain~~as ~~credit~~a ~~risk~~result toof changes in intercompany ~~the~~balance ~~extent~~sheet ~~that~~accounts ~~our~~and ~~bank~~other ~~counterparties~~balance ~~may~~sheet beitems. ~~unable~~At toSeptember 30, ~~meet~~2010, these balance sheet exposures were mitigated through the ~~terms~~use of ~~the~~foreign ~~agreements~~exchange forward contracts with maturities of approximately one month. WeThe ~~minimize~~principal ~~such~~currency ~~risk~~exposures bybeing ~~limiting~~mitigated were the Australian ~~our~~dollar, ~~counterparties~~Brazilian toreal, ~~major~~British ~~financial~~pound, ~~institutions~~Chinese ofrenminbi, ~~high~~Czech koruna, euro, Mexican peso, ~~credit~~Singapore ~~quality~~dollar, Indian Rupee, New Zealand dollar and South African rand.

~~Stock-Based~~See ~~Compensation:~~Note We1 ~~have~~to ~~recognized and measured our stock option compensation by~~ the ~~intrinsic~~Consolidated ~~value~~Financial ~~method~~Statements in ~~accordance~~ ~~with APB Opinion~~Item ~~25,~~8 ~~“Accounting~~of ~~for Stock~~this ~~Issued~~report ~~to Employees,” and related interpretations. Compensation cost~~ for ~~employee stock options is~~information ~~measured~~about ~~as the excess, if any, of the quoted market price of~~ our ~~common~~foreign ~~stock~~currency atexchange-derivative ~~the date of the grant over the amount that the employee is required to pay for the stock~~program. ~~No compensation~~ expense was recognized for options issued in fiscal 2005, 2004 and 2003 as all stock options were issued at fair market value on the date of grant. We have also issued restricted stock awards and restricted stock units (hereafter sometimes collectively called “restricted stock”). The fair market value of the restricted stock is amortized over the projected remaining vesting period.

44 We adopted the disclosure provisions of SFAS No. 148, “Accounting for Stock-Based Compensation.” SFAS No. 148 requires disclosure of how stock compensation expense would be computed under SFAS No. 123, using the fair value method. We estimated the fair value using the Black-Scholes option-

52 Table of Contents

~~ADC~~Item 8. ~~Telecommunications,~~FINANCIAL ~~Inc.~~STATEMENTS ~~and~~AND ~~Subsidiaries~~SUPPLEMENTARY DATA

~~Notes~~Report toof ~~Consolidated~~Independent ~~Financial~~Registered Public Accounting Firm ~~Statements — (Continued)~~

~~pricing model.~~ The ~~following~~Board ~~table~~of ~~summarizes~~Directors ~~what~~and ~~our operating~~Shareowners ~~results~~ADC ~~would have been if the fair value method of accounting for stock options had been utilized (in millions~~Telecommunications, ~~except for per~~Inc. ~~share amounts):~~

	2005			2004			2003
Net income (loss) as reported	$	110.7		$	16.4		$	(76.7	)
Plus: Stock-based employee compensation expense included in reported income (loss)		3.0			2.9			4.4
Less: Stock compensation expense — fair value based method		(20.5	)		(36.6	)		(46.7	)
Pro Forma Income (Loss)	$	93.2		$	(17.3	)	$	(119.0	)
Income (Loss) Per Share — Basic and Diluted
As reported — Basic	$	0.95		$	0.14		$	(0.67	)
As reported — Diluted	$	0.91		$	0.14		$	(0.67	)
Pro forma — Basic	$	0.80		$	(0.15	)	$	(1.04	)
Pro forma — Diluted	$	0.78		$	(0.15	)	$	(1.04	)

We have audited the accompanying consolidated balance sheets of ADC Telecommunications, Inc. and subsidiaries as of September 30, 2010 and 2009, and the related consolidated statements of operations, shareowners’ investment and cash flows for the year ended September 30, 2010, the eleven-month period ended September 30, 2009, and the year ended October 31, 2008. Our audits also included the financial statement schedule listed in the index at Item 15. These financial statements and the schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and the schedule based on our audits.

~~During~~We ~~the~~conducted ~~third~~our ~~quarter~~audits ofin ~~fiscal~~accordance ~~2003,~~with ~~we offered eligible employees~~ the ~~right~~standards ~~to exchange certain~~ of ~~their~~the ~~employee~~Public ~~stock~~Company Accounting ~~options~~Oversight ~~for~~Board a(United ~~lesser~~States). ~~number~~Those ofstandards ~~new~~require ~~options~~that towe beplan ~~granted six months~~ and ~~one~~perform ~~day following~~ the ~~surrender~~audit ~~of their existing~~to ~~options.~~obtain ~~The~~reasonable ~~new~~assurance ~~options,~~about ~~which~~whether ~~were~~the ~~granted~~financial ~~on December 29,~~statements ~~2003,~~are ~~have~~free ~~an exercise price~~ of material ~~$19~~misstatement.~~81 per~~ ~~share.~~An ~~This~~audit ~~exercise~~includes ~~price~~examining, ison ~~equal~~a totest ~~the average~~basis, ofevidence supporting the ~~high~~amounts and ~~low trading price of our common stock on~~ ~~the~~disclosures ~~grant~~in ~~date. These options will vest over a two-year period from~~ the ~~grant~~financial ~~date~~statements. ~~For~~An ~~purposes~~audit ofalso ~~the~~includes ~~above~~assessing ~~tabular disclosure,~~ the ~~unrecognized~~accounting ~~compensation cost of the cancelled~~principles ~~options~~used and ~~the~~significant ~~incremental~~estimates ~~fair~~made ~~value~~by ~~of the replacement options are being amortized over a 30-month period~~management, ~~consisting~~ ofas ~~the 24-month~~well ~~vesting~~as ~~period for~~evaluating the ~~replacement~~overall ~~options and the six month and one day period~~financial ~~between~~statement ~~the~~presentation. ~~cancellation~~We ofbelieve ~~the~~that ~~surrendered~~our ~~options~~audits ~~and~~provide ~~the grant~~a ofreasonable ~~the~~basis ~~replacement~~for ~~options~~our opinion.

~~Use~~In ofour ~~Estimates:~~opinion, ~~The~~the ~~preparation of~~ financial statements in ~~conformity~~referred ~~with~~to ~~accounting~~above ~~principles~~present ~~generally~~fairly, ~~accepted~~ in all material respects, the ~~United~~consolidated ~~States~~financial ~~requires~~position usof toADC ~~make~~Telecommunications, ~~estimates~~Inc. and ~~assumptions~~subsidiaries at ~~that~~September 30, ~~affect~~2010 ~~the~~and ~~amounts~~2009, ~~reported~~and in the ~~financial~~consolidated ~~statements~~results of their operations and their cash flows ~~accompanying~~for ~~notes.~~the ~~Estimates~~year ~~are~~ended ~~used~~September 30, in2010, ~~determining~~the ~~such~~eleven-month ~~items as~~period ~~returns~~ended ~~and~~September 30, ~~allowances~~2009, ~~depreciation~~ and ~~amortization lives~~the ~~and~~year ~~amounts~~ended ~~recorded~~October 31, ~~for~~2008, ~~contingencies~~in ~~and~~conformity ~~other~~with ~~reserves~~U. ~~Although~~S. ~~these~~generally ~~estimates~~accepted ~~are~~accounting ~~based~~principles. Also, onin our ~~knowledge~~opinion, ofthe ~~current events~~related ~~and~~financial ~~actions~~statement weschedule, ~~may~~when ~~undertake~~considered in relation to the basic ~~future~~financial statements taken as a whole, ~~these estimates~~presents ~~ultimately~~fairly ~~may~~in ~~differ~~all ~~from~~material ~~actual~~respects, ~~results~~the information set forth therein.

~~Comprehensive~~As ~~Income~~discussed ~~(Loss):~~in ~~Components~~Note of1 ~~comprehensive income~~to ~~(loss)~~the ~~include~~consolidated ~~net~~financial ~~income~~statements, ~~foreign~~effective ~~currency translation adjustments~~October 1, ~~unrealized gains (losses) on available-for-sale securities~~2009, ~~and adjustments to record minimum pension liability,~~ ~~net~~the ofCompany ~~tax.~~adopted ~~Comprehensive~~new ~~income~~rules isregarding ~~presented in~~ the ~~consolidated~~ ~~statements~~accounting offor ~~shareowners’~~non-controlling ~~investment~~interests.

We also have audited, in accordance with the standards of the Public Company Accounting ~~Dividends:~~Oversight NoBoard ~~cash~~(United ~~dividends~~States), ~~have~~ADC ~~been~~Telecommunications, ~~declared~~Inc.’s orinternal ~~paid~~control over financial ~~during~~reporting as of September 30, 2010, based on criteria established in Internal Control-Integrated Framework issued by the ~~past~~Committee ~~three~~of ~~years~~Sponsoring Organizations of the Treadway Commission and our report dated November 23, 2010, expressed an unqualified opinion thereon.

~~Off-Balance~~Ernst ~~Sheet~~& ~~Arrangements:~~Young ~~We do not have any~~LLP ~~off-balance sheet arrangements.~~

~~Recently Issued Accounting Pronouncements: In May 2005~~Minneapolis, ~~FASB~~ ~~issued SFAS No. 154, “Accounting Changes~~Minnesota ~~and Error Corrections-a replacement of APB Opinion No.~~November ~~20 and FASB Statement No. 3” (“SFAS 154”). SFAS 154 replaces APB Opinion No. 20~~23, ~~Accounting Changes, and FASB Statement~~2010 ~~No. 3, Reporting Accounting Changes in Interim Financial~~ Statements, and changes the requirements for the accounting for and reporting of a change in accounting principle. Opinion 20 previously required that most voluntary changes in accounting principle be recognized by including the cumulative effect of changing to the new accounting principle in net income of the period of the change. SFAS 154 requires retrospective application to prior periods’ financial statements of changes in accounting principle applied as if that principle had always been used or as the adjustment of previously issued financial statements to reflect a

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ADCTable Telecommunications,of Inc. and Subsidiaries Contents

~~Notes~~ADC toTelecommunications, ~~Consolidated~~Inc. ~~Financial~~and Subsidiaries ~~Statements — (Continued)~~

~~change~~Consolidated inStatements the reporting entity. SFAS 154 also requires that a change in depreciation, amortization, or depletion method for long-lived, nonfinancial assets be accounted for as a change in accounting estimate effected by a change in accounting principle. SFAS 154 is effective for changes and error corrections made in fiscal years beginning after December 15, 2005. We are required to adopt the provisions of ~~SFAS 154 in our fiscal year beginning November 1,~~Operations ~~2006.~~

For the Year

Ended

For 11 Months Ended

Ended

September 30,

September 26,

October 31,

2010

2009

2008

(Unaudited

proforma)

(In millions, except earnings per share)

Net Sales:

Products

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