What changed in this filing

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Item 1. Business

2023-02-23 compared with 2022-02-17 · 125 added, 122 removed, 322 unchanged (43% of the section changed)

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Our evolution has been driven by technological innovation and strategic acquisitions that expanded our product offerings and complemented our existing solutions.

We are a global provider of infrastructure solutions for communication and entertainment networks.

Our solutions for wired and wireless networks enable service providers including cable, telephone and digital broadcast satellite operators and media programmers to deliver media, voice, Internet Protocol (IP) data services and Wi-Fi to their subscribers and allow enterprises to experience constant wireless and wired connectivity across complex and varied networking environments.

Our solutions are supported by our broad array of services including technical support, systems design and integration.

We are a leader in digital video and IP television (IPTV) distribution systems, broadband access infrastructure platforms and associated data and voice customer premises equipment.

Our global leadership positions are built upon innovative technology, broad solution offerings, high-quality and cost-effective customer solutions, and global manufacturing and distribution scale.

We are a global provider of infrastructure solutions for communication, data center and entertainment networks.

Our solutions for wired and wireless networks enable service providers, including cable, telephone, data center and digital broadcast satellite operators and media programmers, to deliver media, voice, Internet Protocol (IP) data services and Wi-Fi to their subscribers and allow enterprises to experience constant wireless and wired connectivity across complex and varied networking environments.

Our solutions are complemented by services including technical support, systems design and integration.

We are a leader in digital video and IP television (IPTV) distribution systems, broadband access infrastructure platforms and equipment that delivers data and voice networks to homes.

Our global leadership position is built upon innovative technology, broad solution offerings, high-quality and cost-effective customer solutions, and global manufacturing and distribution scale.

We have a team of over 30,000 people who serve our customers in over 150 countries through a network of world-class manufacturing and distribution facilities strategically located around the globe.

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We have long-standing, direct relationships with our customers and serve them through a direct sales force and a global network of channel partners.

In the first quarter of 2021, we announced a transformation initiative referred to as CommScope NEXT designed to drive shareholder value through three pillars:

In 2021, we announced a transformation initiative called CommScope NEXT designed to drive shareholder value through three pillars:

profitable growth, operational efficiency and portfolio optimization.

We believe these efforts are critical to making us more competitive and allowing us to invest in growth, accelerate our de-leveraging effort and maximize stockholder and stakeholder value.

We incurred $91.9 million of restructuring costs and $90.3 million of transaction, transformation and integration costs during the year ended December 31, 2021, primarily related to CommScope NEXT.

We expect to continue to incur restructuring costs and transaction, transformation and integration costs related to CommScope NEXT and such costs could be material.

As a step in the CommScope NEXT transformation plan, in April 2021, we announced a plan to spin-off the Home Networks business in 2022.

After thorough consideration of the current supply chain environment and its impact on the Home Networks business, we have decided to delay the execution of the spin-off.

We remain committed to the spin-off of the Home Networks business from CommScope, but we currently do not have a firm timeline for restarting the plan.

Accordingly, management now analyzes the financial results of our "Core" business separately from Home Networks.

These Core measures reflect the results of the Broadband Networks (Broadband), Outdoor Wireless Networks (OWN) and Venue and Campus Networks (VCN) segments, in the aggregate.

Core financial measures exclude the results and performance of the Home Networks (Home) segment.

We believe these efforts are critical to making us more competitive and allowing us to invest in growth, de-leverage and maximize stockholder and other stakeholder value.

We incurred $62.9 million and $91.9 million of restructuring costs and $38.2 million and $90.3 million of transaction, transformation and integration costs during the years ended December 31, 2022 and 2021, respectively, which were primarily related to CommScope NEXT.

We expect to continue to incur restructuring costs and transaction, transformation and integration costs related to CommScope NEXT in 2023 and such costs could be material.

As a step to optimize our portfolio through CommScope NEXT, as of January 1, 2022, we reorganized our internal management and reporting structure to align our portfolio of products and solutions more closely with the markets we serve and provide better performance comparability with our competitive peer set across our businesses.

The reorganization changed the information regularly reviewed by our chief operating decision maker for purposes of allocating resources and assessing performance.

As a result, we are now reporting financial performance based on the following operating segments:

Connectivity and Cable Solutions (CCS), Outdoor Wireless Networks (OWN), Networking, Intelligent Cellular and Security Solutions (NICS), Access Network Solutions (ANS) and Home Networks (Home).

Prior to this change, we operated and reported four operating segments:

Broadband Networks, Outdoor Wireless Networks, Venue and Campus Networks and Home Networks.

The Home segment was unchanged in this realignment.

Also as a step in our CommScope NEXT transformation plan, in 2021, we announced a plan to separate the Home Networks business.

Due to the impact of the uncertain supply chain environment, capital spending patterns of customers and other macroeconomic factors related to the Home Networks business, we have delayed our separation plan, but we continue to analyze the financial results of our "Core" business separately from Home.

See the Operating Segments section below for an illustration of the aggregation of our Core financial measures.

These metrics represent the business segments as we have reported them.

However, the ultimate definition of the Home Networks business that we expect to separate may vary, and future results may differ materially.

For the year ended December 31, 2022, our revenues were $9.23 billion and our net loss was $1,286.9 million.

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Operating Segments

We operate and report based on four operating segments:

Broadband, OWN, VCN and Home.

In the second quarter of 2021, we shifted certain product lines from our Broadband segment to our Home segment to better align with how those businesses are being managed.

As discussed above, as of January 1, 2022, we reorganized our reporting structure and are now reporting financial performance based on five operating segments:

CCS, OWN, NICS, ANS and Home.

All prior period amounts have been recast to reflect these operating segment changes.

Our Core segments include our Broadband, OWN and VCN segments and exclude our Home segment.

The distribution of net revenues among our four segments was as follows:

Our Core segments include our CCS, OWN, NICS and ANS segments and exclude our Home segment.

The distribution of net revenues among our five segments was as follows:

Year Ended December 31,

Core segments

Broadband (2021 Net Sales of $3.1 billion)

Our Broadband segment combines our Network Cable and Connectivity (NCC) and Network and Cloud (N&C) businesses and provides an end-to-end product portfolio serving the telco and cable provider broadband market.

The Broadband segment includes converged cable access platforms, passive optical networking, video systems, access technologies, fiber and coaxial cable, fiber and copper connectivity and hardened closures.

CCS Segment (2022 Net Sales of $3.8 billion)

Our CCS segment provides fiber optic and copper connectivity and cable solutions for use in telecommunications, cable television, residential broadband networks, data centers and business enterprises.

The CCS portfolio includes network solutions for indoor and outdoor network applications.

Indoor network solutions include optical fiber and twisted pair structured cable solutions, intelligent infrastructure management hardware and software and network rack and cabinet enclosures.

Outdoor network solutions are used in both local-area and wide-area networks and “last mile”

fiber-to-the-home installations, including deployments of fiber-to-the-node, fiber-to-the-premises and fiber-to-the-distribution point to homes, businesses and cell sites.

OWN Segment (2022 Net Sales of $1.5 billion)

Our OWN segment brings together our radio frequency (RF) products and Integrated Solutions businesses and focuses on the macro and metro cell wireless markets.

The segment’s offerings include base station antennas, RF filters, tower connectivity, microwave antennas, metro cell products, cabinets, steel towers, accessories, Spectrum Access System and Comsearch.

As our wireless operator customers shift a portion of their 5G capital expenditures from the macro tower to the metro cell, the OWN segment portfolio will strategically help make the transition smooth and cost-effective.

VCN Segment (2021 Net Sales of $2.2 billion)

Our VCN segment targets both public and private networks for campuses, venues, data centers, and buildings and includes our Ruckus Networks, Enterprise and Distributed Coverage and Capacity Systems (DCCS) businesses.

The segment combines Wi-Fi and switching, distributed antenna systems (DAS), licensed and unlicensed small cells, and enterprise fiber and copper infrastructure.

Our OWN segment focuses on the macro and metro cell markets.

The segment includes base station antennas, radio frequency (RF) filters, tower connectivity, microwave antennas, metro cell products, cabinets, steel, accessories and our wireless spectrum management business, Comsearch.

NICS Segment (2022 Net Sales of $0.9 billion)

Our NICS segment provides wireless networks for enterprises and service providers.

Product offerings include indoor and outdoor Wi-Fi and long-term evolution (LTE) access points, access and aggregation switches;

an Internet of Things (IoT) suite, on-premises and cloud-based control and management systems;

and software and software-as-a-service applications addressing security, location, reporting and analytics.

ANS Segment (2022 Net Sales of $1.3 billion)

Our ANS segment’s product solutions include cable modem termination systems (CMTS), video infrastructure, distribution and transmission equipment and cloud solutions that enable facility-based service providers to construct a state-of-the-art residential and metro distribution network.

Home Segment (2022 Net Sales of $1.7 billion)

The Home segment offers broadband and video products.

Home segment broadband offerings include devices and related software and management solutions that provide residential connectivity and services to subscribers, such as digital subscriber line and cable modems and telephony and data gateways which incorporate routing and Wi-Fi functionality.

Video offerings include set top boxes and software that support cable, satellite and IPTV content delivery and include products such as digital video recorders, high definition set top boxes and hybrid set top devices.

The Home segment also sells broadband solutions through major retailers in the United States (U.S.).

Our Home segment includes subscriber-based solutions that support broadband and video applications.

The broadband offerings in the Home segment include devices that provide residential connectivity to a service provider’s network, such as digital subscriber line and cable modems and telephony and data gateways which incorporate routing and Wi-Fi functionality.

Video offerings include set top boxes that support cable, satellite and IPTV content delivery and include products such as digital video recorders, high definition set top boxes and hybrid set top devices.

Industry Background

We participate in the large and growing global market for connectivity and essential communications infrastructure.

This market is being driven by the growth in bandwidth demand associated with the continued demand of smartphones, tablets and machine-to-machine (M2M) communication as well as the proliferation of data centers, Big Data, cloud-based services, streaming media content and Internet of Things (IoT).

In addition, video distribution over the broadband IP network is transforming how content is managed and consumed.

IP facilitates new forms of video such as Over-the-Top (OTT) and interactive television.

Over the last two years, due to the coronavirus (COVID-19) pandemic, we learned even more about business and consumer reliance on their network connectivity, as our products and services allowed a dramatic shift from working in offices to working in the home.

We expect that as the world recovers from the COVID-19 pandemic we will continue to see a mix of connectivity needs in homes, in offices and while on the move.

As part of the shift in how people are using the network, we have seen more dramatic upticks in upstream usage than downstream usage.

Some of this will subside as people work less from home, but some recent network usage trends will also become the new normal, requiring network bandwidth capacities to be more symmetrical than in the past.

There are several major trends that we expect to drive network deployments and investment, including:

During the COVID-19 pandemic, we learned even more about business and consumer reliance on their network connectivity, as our products and services allowed a dramatic shift from working in offices to working in the home.

As the world is now recovering from the COVID-19 pandemic, we continue to see a mix of connectivity needs in homes, in offices and while on the move.

We are still seeing a shift in how people are using the network which is continuing to drive higher upstream usage than downstream usage.

Additionally, as the network becomes more bi-directional and interactive, the need for lower and more consistent latency is growing in importance.

Some of these trends have subsided and may continue to subside as people work less from home, but other recent network usage trends involving increased upstream usage remain the new normal, still requiring network bandwidth capacities to be more symmetrical than in the past.

There are several major trends that we expect to continue to drive network deployments and investment, including:

Evolving Network Architecture and Technology

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The work from home trend caused by the COVID-19 pandemic has accelerated many of these network trends.

We believe the following key network trends will continue to impact CommScope and the industry during 2022 and beyond:

We believe the following key network trends will continue to impact CommScope and the industry during 2023:

1) Network Convergence :

Operators are moving toward converged or multi-use network architectures.

Rather than building upon independent wireline and wireless networks, operators are now shifting toward networks that combine voice, video and data communications into a single converged data network for wired and wireless services.

Rather than building upon independent wireline and wireless networks, operators are shifting toward networks that combine voice, video and data communications into a single converged data network for wired and wireless services.

2) Continued Disruption by Over-the-Top TV:

Although content consumption continues to increase, subscriptions to pay TV are declining.

As a result, cable operators are compelled to invest in and upgrade their networks and expand their video, voice, data and mobile services to deliver higher data rates in both the uplink and downlink on their network.

While past data trends have been defined by rapid growth in the downlink, IoT will drive the need for major network change in the uplink.

Although content consumption continues to increase, subscriptions to pay TV continue declining.

As a result, cable operators are compelled to invest in and upgrade their networks for broadband but have mixed feelings about investments in their video and voice services.

While past data trends have been defined by rapid growth in the downlink, more interactive experiences and IoT will drive the need for major network change in the uplink.

3) Densification :

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To support the increased demands of a growing game-playing subscriber base, all operators are seeking new ways to reduce the latency and jitter of the gaming packet streams.

As an example, Data Over Cable Service Interface Specification (DOCSIS) deployments will likely be adding the new low latency DOCSIS technologies to their cable modem termination systems (CMTS) and customer premises equipment (CPE) gear in the coming year.

Node-splits will also be used to reduce congestion and decrease latency.

As an example, Data Over Cable Service Interface Specification (DOCSIS) deployments will likely be adding the new low latency DOCSIS technologies to their CMTS and customer premises equipment (CPE) gear in the coming year.

Node-splits will also be used to reduce congestion.

Over time, we expect these low latency services to allow support of Web3.0 and the metaverse, as access networks are increasing and used in a more interactive way.

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Capacity will also be increased via the increased use of the spectrally-efficient DOCSIS 3.1 orthogonal frequency-division multiplexing (OFDM) and orthogonal frequency-division multiple access (OFDMA) channels within the cable spectrum.

Additionally, some operators will begin their upgrade path to DOCSIS 4.0 in certain regions of their networks.

New DOCSIS equipment will be needed for this expansion.

For wireless providers, the next years will see moves to 5G that will include additions to their wireless spectrum in the CBRS band, the C-band and the mmWave band.

For wireless providers, the next years will see continued deployment of 5G that will include ongoing additions to their wireless spectrum in the CBRS band, the C-band and the millimeter wave (mmWave) bands.

New antenna equipment will be needed for this expansion.

7) Government-sponsored Broadband Improvements :

2022 is likely to see several government-sponsored programs aimed at improving the Broadband infrastructure connecting to rural and other under-served areas.

Several funds and initiatives to build more equitable access—in particular, in the U.S., the Rural Digital Opportunity Fund (RDOF) and the Bipartisan Infrastructure Law (BIL) package—may be driving technology and device sales across the board.

While we do not expect much money flowing under the BIL in 2022, we expect the preparation activity to pick up dramatically in the second half of the year.

Several government-sponsored programs aimed at improving the Broadband infrastructure connecting to rural and other under-served areas launched in the second half of 2022.

The funds from these programs and initiatives to build more equitable access—in particular, in the United States (U.S.), the Rural Digital Opportunity Fund (RDOF), American Rescue Plan Act (ARPA), and the Broadband Equity, Access, and Deployment (BEAD) Program—are expected to drive technology and device sales across the board.

While we did not see money flowing under the BEAD Program in 2022, we expect planning activity to pick up dramatically in 2023, and for funds to start being distributed by 2024.

Transition to 5G

5G wireless is evolving from an industry vision toward a tangible next generation wireless technology.

Many operators have begun a transition to 5G networks with countries like the U.S., South Korea, China, Switzerland and the Netherlands leading the way with further development across the globe expected in the coming years.

Many operators have begun a transition to 5G networks with countries in North America, Northeast Asia, Gulf Cooperation Council and Western Europe leading the way in terms of 5G subscription penetration.

To date, there are over 240 5G commercial networks launched worldwide and over 500 operators investing in 5G technology.

The number of 5G-enabled devices is expected to continue to increase during 2023.

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Enhanced mobile broadband—to support significant improvement in data rates and user experience in both the uplink and downlink,

IoT communications to support the expected billions of connections between machines as well as short bursts of information to other systems, and

Low latency, high-reliability—to support applications that are critical or are needed in real time, like factory machines, virtual reality and augmentation.

IoT communications to support the expected billions of connections between machines, as well as short bursts of information to other systems,

Low latency, high-reliability—to support applications that are critical or are needed in real time, like factory machines, virtual reality and augmentation, and

Underlying capacity to support fixed broadband services in underserved areas.

As described above, wireless operators will need to both acquire and launch new spectrum for 5G, as well as continue their strategy of re-allocation of spectrum from one generation to another.

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As wireless operators transition toward 5G, they must also manage the fundamental network deployment issues of site acquisition, power, backhaul and in-building wireless proliferation.

In addition to investment required by wireless operators, the transition to 5G could also spark an investment cycle by cable operators as they upgrade their networks to compete with fixed wireless broadband, which could become a viable alternative to traditional broadband internet access.

Many cable operators are already offering or planning to offer 5G wireless services on top of their wired cable services, and one approach under consideration employs convergence techniques that utilize wired networks, such as DOCSIS or passive optical networks (PON) to support xHaul to the more heavily-densified wireless access points and radio units of 5G.

In addition to investment required by wireless operators, the transition to 5G could also spark an investment cycle by cable operators as they upgrade their networks to compete with fixed wireless broadband, which is becoming a viable alternative to traditional broadband internet access.

Many cable operators are already offering or planning to offer 5G wireless services on top of their wired cable services, and one approach under consideration employs convergence techniques that utilize wired networks, such as DOCSIS or passive optical networks (PON), to support Crosshaul (xHaul) to the more heavily-densified wireless access points and radio units of 5G.

All of these transitions are expected to lead to increased investment.

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This is expected to drive investment in Wi-Fi networks and in the DOCSIS, PON and ethernet solutions that can provide the required connectivity.

In the first quarter of 2021, we announced a transformation initiative, CommScope NEXT, designed to drive stockholder value through three pillars:

In 2021, we announced a transformation initiative, CommScope NEXT, designed to drive stockholder value through three pillars:

profitable growth, operational efficiency and portfolio optimization.

We believe these efforts are critical to making us more competitive and allowing us to invest in growth, accelerate our de-leveraging and maximize stockholder and stakeholder value.

We believe these efforts are critical to making us more competitive and allowing us to invest in growth, de-leverage and maximize stockholder and stakeholder value.

Profitable Growth

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Portfolio Optimization

In addition to optimizing our portfolio with our commitment to spin-off the Home Networks business from Core CommScope, we will also reorganize our business structure in 2022 to align our portfolio of products and solutions more closely with the markets we serve and bring better performance clarity with our competitive peer set.

Based on this new operating structure, we expect to report our results in the below five reportable segments beginning in the first quarter of 2022.

However, work on reorganization of the new segments is still underway, and we have not yet finalized the exact segment composition.

Connectivity and Cable Solutions (CCS) - combines most of our copper and fiber cabling and connectivity products.

Access Network Solutions (ANS) - includes our active broadband cable and video technologies.

Networking, Intelligent Cellular and Security Solutions (NICS) - dedicated to providing wireless communications solutions for indoor and venue applications.

Outdoor Wireless Networks (OWN) - largely unchanged from our current OWN segment.

Home Networks –

largely unchanged from our current Home segment.

We have also moved to a general management model in our segments.

As discussed above, in addition to optimizing our portfolio with our commitment to separate the Home Networks business from Core CommScope, we reorganized our internal management and reporting structure as of January 1, 2022 to align our portfolio of products and solutions more closely with the markets we serve and provide better performance comparability with our competitive peer set.

As a result, our new operating segments are CCS, OWN, NICS, ANS and Home.

We utilize a general management model in our segments.

This enables us to manage our portfolio more granularly, assign responsibilities and build a culture of accountability and ownership.

We are continuing to review our portfolio and will look for other ways to better manage and optimize our product offerings.

We continuously review our portfolio and look for ways to better manage and optimize our product offerings.

The Future of CommScope

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Architect a simplified organization, with more accountability, responsibility and visibility

With CommScope NEXT, we have begun to transform our organization into one that has better operational efficiency, speed and resilience and one that can better service our existing customers, as well as new ones.

With CommScope NEXT, we are transforming our organization into one that has better operational efficiency, speed and resilience and one that can better service our existing customers, as well as new ones.

We expect CommScope NEXT to drive adjusted EBITDA expansion over the next several years that will enable us to significantly increase our cash flow to accelerate our de-leveraging and further invest in our growth.

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Comcast Corporation (Comcast);

Cox Communications, Inc.;

Graybar Electric Co.

Liberty Media Corporation;

Power & Telephone Supply Co.;

Purchase Power Exchange LLC;

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For the year ended December 31, 2022, we derived approximately 15% of our consolidated net sales from our top two direct customers, but no single direct customer accounted for 10% or more of our net sales.

For the year ended December 31, 2020 we derived approximately 11% of our consolidated net sales from Comcast.

Net sales to Comcast accounted for approximately 13% of our consolidated net sales for the year ended December 31, 2019, after giving effect to the acquisition of ARRIS International plc (ARRIS) as if it had happened on January 1, 2019.

Sales to Comcast originate from our VCN, Broadband and Home segments.

Products from our Broadband segment are primarily sold directly to wireline network service providers, such as telephone companies and cable television network providers, to be deployed into their service delivery networks.

In some cases, we sell through specialized resellers and distributors who primarily provide logistics support and in certain circumstances post-sale service and support.

Our customer service and engineering groups maintain close working relationships with these customers due to the significant amount of customization associated with some of these products.

We sell these products to most of the wireline and satellite operators globally.

No single direct customer accounted for 10% or more of our net sales for the year ended December 31, 2021, and we derived approximately 11% of our consolidated net sales from Comcast for the year ended December 31, 2020.

Products from our CCS segment are primarily sold directly to cable television system operators, broadband operators and other service providers that deploy broadband networks.

CCS segment products are also sold through independent distributors or system integrators for large telecommunication operators.

Products from our OWN segment are primarily sold directly to wireless operators, original equipment manufacturers (OEMs) that sell equipment to wireless operators and other service providers that deploy elements of wireless networks at the direction of wireless operators.

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Although we sell to most wireless operators globally, we are dependent on a small number of large operators.

Products from our VCN segment are primarily sold through independent distributors or system integrators for large telecommunications operators and to customers in a broad range of enterprise vertical markets, including hospitality, education, smart cities, government, venues and service providers indirectly through channel partners.

Products from our NICS segment are primarily sold through independent distributors or system integrators for large telecommunications operators and to customers in a broad range of enterprise vertical markets, including hospitality, education, smart cities, government, venues and service providers indirectly through channel partners.

We also sell directly to cable television system operators, broadband operators and service providers that deploy broadband networks.

In certain circumstances, we sell VCN segment products directly to end customers, but it is a relatively small part of the overall business.

In certain circumstances, we sell NICS segment products directly to end customers, but it is a relatively small part of the overall business.

Products from our ANS segment are primarily sold directly to wireline network service providers, such as telephone companies and cable television network providers, to be deployed into their service delivery networks.

In some cases, we sell through specialized resellers and distributors who primarily provide logistics support and in certain circumstances post-sale service and support.

Our customer service and engineering groups maintain close working relationships with these customers due to the significant amount of customization associated with some of these products.

We sell these products to most of the wireline and satellite operators globally.

Products from our Home segment are primarily sold directly to wireline network service providers, such as telephone companies and cable television network providers, to be deployed by them into their subscribers’

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Major competitors by segment include the following:

Broadband segment –

Cisco Systems, Inc., Corning Inc., Harmonic Inc., and Huawei Technologies Co., Ltd.;

CCS segment –

Amphenol Corporation, Belden Inc., Clearfield, Inc., Corning Inc.

and Sterlite Corporation.;

OWN segment –

Comba Telecom Systems Holding Ltd., Telefonaktiebolaget LM Ericsson, Huawei Technologies Co., Ltd.

and Rosenberger NA;

VCN segment –

Cisco Systems, Inc., Comba Telecom Systems Holding Ltd., Hewlett Packard Enterprise Development LP and Huawei Technologies Co., Ltd;

Comba Telecom Systems Holding Ltd., Huawei Technologies Co., Ltd., Rosenberger NA and Telefonaktiebolaget LM Ericsson;

NICS segment –

Cisco Systems, Inc., Comba Telecom Systems Holding Ltd., Corning Inc., Extreme Networks, Inc., Hewlett Packard Enterprise Development LP, Huawei Technologies Co., Ltd, JMA Wireless, Juniper Networks, Inc., SOLiD, Inc.

and Ubiquiti Inc.;

ANS segment –

ATX Networks Corp., Casa Systems, Inc., Cisco Systems, Inc., Harmonic Inc., Technetix Group Ltd., Teleste Corporation and Vecima Networks Inc.;

and Home segment –

Humax Co., Ltd., Sagemcom Broadband SAS and Technicolor S.A.

Humax Co., Ltd., Kaonmedia Co., Ltd., Nokia Oyj, Sagemcom Broadband SAS, Vantiva SA.

and ZTE Corporation.

We compete primarily on the basis of delivering solutions, product specifications, quality, price, customer service and delivery time.

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Our direct sales force and channel partner relationships give us extensive reach and distribution capabilities to customers globally.

Given our understanding of their existing networks, when it comes to deploying networks at scale, these customers trust CommScope and hold high regards for our ability to help them achieve their goals.

Global Scale, Manufacturing Footprint and Quality

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Effectively integrate acquisitions and capitalize on related synergies.

Record of Operational Excellence

We have a history of strong operating cash flow and have generated over $1.2 billion in cumulative operating cash flow over the last three years, despite a challenging supply environment in 2021 that drove lower profitability and additional working capital investment.

Over the past three years, our strong cash flow profile has allowed us to pay down $1.0 billion of debt, while also investing $2.0 billion in research and development aimed at both driving profit expansion and revenue growth.

We continuously pursue strategic initiatives aimed at optimizing our resources, reducing manufacturing and distribution costs and lowering our overall cost structure.

Manufacturing and Distribution

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Most of our manufacturing employees are located in lower-cost geographies such as Mexico, China, India and the Czech Republic.

In addition, we utilize contract manufacturers located throughout the world, including in Brazil, China, Malaysia, Mexico, South Africa, Thailand, Vietnam and the U.S., for many of our product groups, including those in our Home segment, certain Broadband segment products, certain OWN segment products and all of our Ruckus products.

In addition, we utilize contract manufacturers located throughout the world, including in Brazil, China, Malaysia, Mexico, South Africa, Thailand, Vietnam and the U.S., for many of our product groups, including those in our Home segment, certain products in our CCS, OWN and ANS segments and all of our Ruckus products.

There can be no guarantee that the Company will be able to extend or renew agreements with contract manufacturers on similar terms, or at all.

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Our internal manufacturing operations are largely process oriented and we use significant quantities of various raw materials, including aluminum, copper, steel, bimetals, optical fiber and plastics and other polymers, among others.

We use significant volumes of aluminum, copper, steel and polymers in manufacturing coaxial and twisted pair cables and antennas.

Other parts are produced using processes such as stamping, machining, molding and pressing from metals or plastics.

Portions of the requirements for these materials are purchased under supply arrangements where some portion of the unit pricing may be indexed to commodity market prices for these metals.

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Certain of the raw materials utilized in our products may only be available from a few suppliers, and we may enter into longer term agreements to secure access to certain key inputs.

We may, therefore, encounter significant price increases and/or availability issues for the materials we obtain from these suppliers, such as those that we have seen in 2021.

These supply chain constraints have limited our ability to manufacture and deliver products to our customers in 2021 and we expect this to continue into 2022.

We may, therefore, encounter significant price increases and/or availability issues for the materials we obtain from these suppliers as we have seen in recent years.

These supply chain constraints have limited our ability to manufacture and deliver products to our customers in the past and could have similar impacts in the future.

Our profitability has been and may continue to be materially affected by changes in the market price of our raw materials and components, most of which are linked to the commodity markets.

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Accordingly, R&D is important to preserve and expand our position as a market leader and to provide the most technologically advanced solutions in the marketplace.

We invested $683.2 million in research and development during 2021, and we expect to continue with substantial investments in future years.

We invested $657.4 million in R&D during 2022, and we expect to continue with substantial investments in future years.

We intend to focus our major R&D activities on high-growth opportunities such as fiber optic connectivity for fiber-to-the-x (FTTX) and data centers, Wi-Fi 6E and 6GHz, CCAP, DAA, DOCSIS 4.0, gigabit passive optical network (GPON), active and passive base-station antennas and metro cell and small cell wireless solutions.

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Due to the variability of shipments under large contracts, customers’

seasonal installation considerations and variations in product mix and in profitability of individual orders, we can experience significant quarterly fluctuations in sales and operating income.

seasonal installation considerations and variations in product mix and in profitability of individual orders, we can experience significant fluctuations in quarterly sales and operating income.

Our operating performance is typically the weakest during the first quarter, and this pattern is expected to continue in the future.

It may be more meaningful to focus on annual rather than interim results.

It may be more meaningful to focus on our annual rather than interim results.

Patents and Trademarks

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In addition, because of the nature of information that may pass through or is stored on our solutions or networks, we and our end customers may be subject to complex and evolving U.S.

and foreign laws and regulations regarding privacy, data protection and other matters.

and foreign laws and regulations regarding information privacy, data protection, cybersecurity and other matters.

Further, we are subject to various federal, state, local and foreign environmental laws and regulations governing, among other things, substances used in our products, discharges to air and water, management of regulated materials, handling and disposal of solid and hazardous waste, and investigation and remediation of contaminated sites.

These descriptions are not exhaustive, and these laws, regulations and rules frequently change and are increasing in number.

See Part I, Item 1A, “Risk Factors”

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workforce is a mix of manufacturing and non-manufacturing employees and makes up almost 20% of our employee base.

More than ever, our employees have continued to unite behind our common purpose to “Create Lasting Connections”

Our employees have continued to unite behind our common purpose to “Create Lasting Connections”

all over the world.

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Employee Engagement

CommScope prides itself on creating a culture where feedback and communication are vital in building an engaging, employee-centric organization.

To that end, twice a year we “take the pulse”

CommScope prides itself on creating a collaborative, engaged and enabled workforce.

We believe communication and feedback are integral to building engaged employees and driving a high-performance culture.

In support of this, we periodically “take the pulse”

of our organization through a global engagement survey.

This Pulse Survey obtains the voice of our employees worldwide and identifies strengths and development areas in our culture, workplace and management effectiveness to name a few.

We have consistently seen strong results in past years in areas such as engagement, teamwork and collaboration, pride in working for CommScope as well as the strategic clarity of the business.

CommScope has started the journey to further build out the total employee experience for our employees, in line with our purpose, vision and corporate values.

This is done in a number of ways including through leveraging technology, enabling managers, introducing flexible work approaches and a relentless focus on communication throughout the organization.

Our Pulse Survey is one way our employees worldwide can voice their opinions and give feedback.

The survey seeks to understand how employees experience company values, asks questions to determine if employees feel a strong sense of inclusion and belonging, and measures overall engagement.

With this rich feedback, we can identify strengths and determine potential areas for focused improvement.

We consistently see strong results in engagement, strategic alignment, teamwork, trust, collaboration, belonging, psychological safety and pride in working for CommScope.

CommScope continues to further build out the employee experience by leveraging technology, enabling managers, emphasizing communication, providing flexible work approaches and aiming to become a destination for the best talent.

Total Rewards

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Benefits typically include medical plans, life/disability and accident coverage, retirement benefits, paid time-off policies and other locally applicable benefits.

CommScope also offered a COVID-19 Leave Policy, providing eligible employees additional paid leave, the equivalent of up to 10 workdays and even more in certain cases.

With vaccines being widely available to our U.S.

employees, we discontinued the policy in the U.S.

in 2021, but it is still offered to our international employees.

Employee Education, Training and Development

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We focus heavily on interacting with our employees how, when and where it matters most.

Employee Inclusion, Equality, and Diversity

CommScope strives to create an inclusive environment that draws upon the strength of the diversity within our workforce to exceed the expectations of all our partners and stakeholders.

CommScope’s global workforce comprises individuals of many races, cultures, backgrounds, geographies and experiences.

Diversity is something we take pride in and work constantly to support.

We know diversity makes us stronger and helps to further grow our company and create fully inclusive teams.

CommScope has continued to strengthen the global Diversity & Inclusion Business Network that was established in 2020, providing employees with opportunities to network, learn and lead, grow their careers and support their communities.

We focus not only on diversity but also equality in the workplace.

Employee Inclusion, Equity, and Diversity

CommScope strives to create an inclusive environment that draws upon the strength of our diverse workforce to exceed the expectations of all our partners and stakeholders.

CommScope’s global workforce is comprised of individuals of many races, cultures, backgrounds, geographies and experiences.

We focus on ensuring equity in the workplace and take pride in our diverse workforce and inclusive culture for which we diligently strive to uphold.

The results of our focused efforts on diversity, equity and inclusion make us stronger and pave a path for innovation, which drives business differentiation, talent engagement and retention.

CommScope has also continued to strengthen the global Diversity & Inclusion Business Network that was established in 2020, providing over 1,600 employees with targeted opportunities to network, learn and lead, grow their careers and support their communities.

In February 2022, our chief executive officer signed the CEO Pledge for the CEO Action for Diversity & Inclusion and committed to a set of actions.

This is the largest CEO-driven business commitment to advance diversity and inclusion in the workplace—a commitment that recognizes diversity and inclusion is not a competitive issue but a societal issue.

Employee Health, Safety and Well-being

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health, safety and well-being are our top priority.

This has come more into focus than ever with the ongoing COVID-19 pandemic.

In response, we have implemented rigorous health and safety protocols globally.

This came into focus more than ever with the COVID-19 pandemic.

In response, we implemented rigorous health and safety protocols globally, which continue.

Overall, our vision is to seek opportunities to protect the well-being of our employees, customers, suppliers, environment and communities.

A commitment to business practices that are innovative, safe and sustainable is key to our company’s success.

To achieve this, we have established a robust Environment, Health & Safety (EHS) management system, set objectives and targets, provided necessary resources and created a comprehensive well-being and benefits program.

To achieve this, we maintain a robust Environment, Health & Safety (EHS) management system, set objectives and targets, provide necessary resources and create a comprehensive well-being and benefits program.

All of this encourages ongoing improvement as we continue to unlock the greatest potential of our employees.

The global EHS team has designed and implemented an integrated, companywide EHS management system based on the requirements of the International Standards of ISO45001 and ISO14001.

The global EHS team utilizes a companywide EHS management system designed and implemented based on the requirements of the International Standards of ISO45001 and ISO14001.

CommScope seeks to inspire a culture of proactive and productive health such that our employees make lifestyle decisions that lead to rewarding careers and balanced lives.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business