CommScope : 2Q’21 Financial & Operational Schedules

CommScope Holding Company, Inc.

Condensed Consolidated Statements of Operations (Unaudited -- In millions, except per share amounts)

		Three Months Ended		Six Months Ended
		June 30,				June 30,
		2021				2020			2021			2020
Net sales	$	2,185.3			$	2,102.8		$	4,257.3		$	4,136.0
Cost of sales		1,512.0				1,446.7			2,911.8			2,838.7
Gross profit		673.3				656.1			1,345.5			1,297.3
Operating expenses:
Selling, general and administrative		302.3				290.9			595.0			602.0
Research and development		176.3				176.1			347.8			356.5
Amortization of purchased intangible assets		154.2				157.6			308.9			315.4
Restructuring costs, net		58.9				19.6			103.3			43.3
Asset impairments		-				206.7			-			206.7
Total operating expenses		691.7				850.9			1,355.0			1,523.9
Operating loss		(18.4	)			(194.8	)		(9.5	)		(226.6	)
Other income (expense), net		1.5				(0.8)		2.5			(13.3)
Interest expense		(138.0	)			(141.4	)		(275.5	)		(290.5	)
Interest income		0.5				0.8			1.0			2.9
Loss before income taxes		(154.4	)			(336.2	)		(281.5	)		(527.5	)
Income tax benefit		0.6				15.1			30.1			46.5
Net loss		(153.8	)			(321.1	)		(251.4	)		(481.0	)
Series A convertible preferred stock dividend		(14.3)			(13.9)		(28.7)		(27.7)
Net loss attributable to common stockholders	$	(168.1	)		$	(335.0	)	$	(280.1	)	$	(508.7	)
Loss per share:
Basic	$	(0.82)	$	(1.71)	$	(1.38)	$	(2.60)
Diluted (a)	$	(0.82	)		$	(1.71	)	$	(1.38	)	$	(2.60	)
Weighted average shares outstanding:
Basic		204.1				195.9			202.9			195.4
Diluted (a)		204.1				195.9			202.9			195.4
(a) Calculation of diluted loss per share:
Net loss (basic and diluted)	$	(168.1)	$	(335.0)	$	(280.1)	$	(508.7)
Weighted average shares (basic)		204.1				195.9			202.9			195.4
Dilutive effect of equity-based awards		-				-			-			-
Denominator (diluted)		204.1				195.9			202.9			195.4

See notes to unaudited condensed consolidated financial statements included in our Form 10-Q.

CommScope Holding Company, Inc.

Condensed Consolidated Balance Sheets

(In millions, except share amounts)

			Unaudited
			June 30, 2021			December 31, 2020
Assets
Cash and cash equivalents	$	446.2		$	521.9
Accounts receivable, less allowance for doubtful accounts of
$30.8 and $40.3, respectively			1,653.9				1,487.4
Inventories, net			1,150.2				1,088.9
Prepaid expenses and other current assets			247.1				256.3
Total current assets			3,497.4				3,354.5
Property, plant and equipment, net of accumulated depreciation
of $759.1 and $705.7, respectively			667.7				684.5
Goodwill			5,272.3				5,286.5
Other intangible assets, net			3,336.9				3,650.4
Other noncurrent assets			653.5				600.9
Total assets		$	13,427.8			$	13,576.8
Liabilities and Stockholders' Equity
Accounts payable		$	1,080.1			$	1,010.8
Accrued and other liabilities			983.9				910.6
Current portion of long-term debt			32.0				32.0
Total current liabilities			2,096.0				1,953.4
Long-term debt			9,484.8				9,488.6
Deferred income taxes			202.5				206.2
Other noncurrent liabilities			533.8				531.8
Total liabilities			12,317.1				12,180.0
Commitments and contingencies
Series A convertible preferred stock, $0.01 par value			1,041.8				1,041.8
Stockholders' equity:
Preferred stock, $0.01 par value: Authorized shares: 200,000,000;
Issued and outstanding shares: 1,041,819 Series A convertible			-			-
preferred stock
Common stock, $0.01 par value: Authorized shares:
1,300,000,000; issued and outstanding shares:
204,154,201 and 200,095,232, respectively			2.1				2.1
Additional paid-in capital			2,528.1				2,512.9
Retained earnings (accumulated deficit)			(2,004.1	)			(1,752.7	)
Accumulated other comprehensive loss			(181.2)			(155.9)
Treasury stock, at cost: 10,834,613 shares and
9,223,081 shares, respectively			(276.0	)			(251.4	)
Total stockholders' equity			68.9				355.0
Total liabilities and stockholders' equity		$	13,427.8			$	13,576.8

See notes to unaudited condensed consolidated financial statements included in our Form 10-Q.

CommScope Holding Company, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited -- In millions)

		Three Months Ended		Six Months Ended
		June 30,				June 30,
		2021					2020			2021				2020
Operating Activities:
Net loss	$	(153.8)	$	(321.1)	$	(251.4)	$	(481.0)
Adjustments to reconcile net loss to
net cash generated by operating activities:
Depreciation and amortization		193.6					203.5			392.8				408.9
Equity-based compensation		16.4					32.5			40.0				56.0
Deferred income taxes		(27.7)			(31.1)		(81.1)			(69.4)
Asset impairments		-				206.7			-				206.7
Changes in assets and liabilities:
Accounts receivable		(9.7	)			(35.5	)		(173.9	)			33.5
Inventories		(54.2)			(124.1)		(64.9)			(73.5)
Prepaid expenses and other assets		28.3					(3.5	)		32.3				11.7
Accounts payable and other liabilities		192.9					279.9			169.0				62.7
Other		5.8					1.8			4.8				10.7
Net cash generated by operating activities		191.6					209.1			67.6				166.3
Investing Activities:
Additions to property, plant and equipment		(33.8)			(23.8)		(60.2)			(47.7)
Proceeds from sale of property, plant and equipment		0.3					-			1.3				0.1
Payments upon settlement of net investment hedge		(18.0)			-		(18.0)			-
Net cash used in investing activities		(51.5	)			(23.8	)		(76.9	)			(47.6	)
Financing Activities:
Long-term debt repaid		(8.0	)			(8.0	)		(16.0	)			(116.0	)
Long-term debt proceeds		-			250.0			-			250.0
Dividends paid on Series A convertible preferred stock		(14.3	)			-			(28.7	)			-
Proceeds from the issuance of common shares under		-			-
equity-based compensation plans					3.9				0.9
Tax withholding payments for vested equity-based
compensation awards		(0.3	)			(0.4	)		(24.6	)			(6.3	)
Net cash generated by (used in) financing activities		(22.6	)			241.6			(65.4	)			128.6
Effect of exchange rate changes on cash and cash equivalents		2.8					2.2			(1.0	)			(22.1	)
Change in cash and cash equivalents		120.3					429.1			(75.7	)			225.2
Cash and cash equivalents at beginning of period		325.9					394.3			521.9				598.2
Cash and cash equivalents at end of period	$	446.2			$	823.4		$	446.2			$	823.4

See notes to unaudited condensed consolidated financial statements included in our Form 10-Q.

CommScope Holding Company, Inc.

Reconciliation of GAAP Measures to Non-GAAP Adjusted Measures

(Unaudited -- In millions, except per share amounts)

		Three Months		Six Months
		Ended					Ended
		June 30,					June 30,
		2021				2020				2021					2020
Net loss, as reported	$	(153.8	)		$	(321.1	)		$	(251.4	)		$		(481.0	)
Income tax benefit, as reported		(0.6)			(15.1)			(30.1	)				(46.5)
Interest income, as reported		(0.5	)			(0.8	)			(1.0	)				(2.9	)
Interest expense, as reported		138.0				141.4				275.5					290.5
Other (income) expense, net, as reported		(1.5	)			0.8				(2.5	)				13.3
Operating loss, as reported	$	(18.4	)		$	(194.8	)		$	(9.5	)		$		(226.6	)
Adjustments:
Amortization of purchased intangible assets		154.2				157.6				308.9					315.4
Restructuring costs, net		58.9				19.6				103.3					43.3
Equity-based compensation		16.4				32.5				40.0					56.0
Asset impairments		-				206.7				-					206.7
Transaction, transformation and integration costs		21.0				7.6				36.7					13.0
Acquisition accounting adjustments		3.0				5.2				6.2					10.7
Patent claims and litigation settlements		40.0				7.5				41.5					12.8
Depreciation		32.6				37.9				70.3					79.7
Total adjustments to operating loss		326.1				474.5				606.9					737.6
Non-GAAP adjusted EBITDA	$	307.7			$	279.8			$	597.4			$		511.0
Net loss, as reported	$	(153.8	)		$	(321.1	)		$	(251.4	)		$		(481.0	)
Adjustments:
Total pretax adjustments to operating loss
other than depreciation		293.5				436.7				536.6					657.9
Pretax amortization of debt issuance costs and OID (1)		6.7				6.7				13.5					13.7
Tax effects of adjustments and other tax items (2)		(40.7	)			(45.3	)			(104.5	)				(86.6	)
Non-GAAP adjusted net income	$	105.7			$	76.9			$	194.0			$		104.0
GAAP EPS, as reported (3)	$	(0.82	)		$	(1.71	)		$	(1.38	)		$		(2.60	)
Non-GAAP adjusted diluted EPS (4)	$	0.43		$	0.32			$	0.79		$		0.44

1. Included in interest expense.
2. The tax rates applied to adjustments reflect the tax expense or benefit based on the tax jurisdiction of the entity generating the adjustment. There are certain items for which we expect little or no tax effect.
3. For all periods presented, GAAP EPS was calculated using net income (loss) attributable to common stockholders in the numerator, which includes the impact of the Series A convertible preferred stock dividend.
4. The Company's definition of non-GAAP adjusted diluted EPS is non-GAAP adjusted net income, excluding the Series A convertible preferred stock dividend, divided by weighted average shares outstanding assuming the if-converted method, which reflects the conversion of the Series A convertible preferred stock.

Note: Components may not sum to total due to rounding

See Description of Non-GAAP Financial Measures

CommScope Holding Company, Inc.

Sales by Region

(Unaudited -- In millions)

Sales by Region

									% Change
			Q2 2021				Q2 2020	YOY
United States		$	1,254.2			$	1,353.6		(7.3	)	%
Europe, Middle East and Africa			408.8				359.0		13.9
Asia Pacific			244.1				201.9		20.9
Caribbean and Latin America			190.3				124.0		53.5
Canada			87.9				64.3		36.7
Total net sales		$	2,185.3		$	2,102.8		3.9		%