What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2025-02-26 compared with 2024-02-29 · 692 added, 357 removed, 1158 unchanged (48% of the section changed)

33 unchanged sentences

Description of the Matter

As more fully described in Note 4 to the consolidated financial statements, at December 31, 2023, the Company’s goodwill was $3,514.4 million, of which $261.4 million and $881.5 million relate to the Access Network Solutions (ANS) and Building and Data Center Connectivity (BDCC) reporting units, respectively.

As more fully described in Note 5 to the consolidated financial statements, at December 31, 2024, the Company’s goodwill was $2,867.3 million, of which $266.1 million relates to the Access Network Solutions (ANS) reporting unit.

The Company’s goodwill is initially assigned to its reporting units as of the acquisition date.

Goodwill is tested for impairment at the reporting unit level annually, or more frequently if indicators of potential goodwill impairment exist.

The Company performed its goodwill impairment tests using both a discounted cash flow model and a guideline public company approach.

During the third quarter of 2023, the Company determined that indicators of goodwill impairment existed for the ANS and BDCC reporting units and performed an interim goodwill impairment test, which indicated that the carrying value of the ANS reporting unit exceeded its fair value.

The Company performed its annual goodwill impairment test in the fourth quarter of 2023.

As a result of the impairment tests, the Company recorded goodwill impairment charges of $472.3 million and $99.1 million related to the ANS and BDCC reporting units, respectively, which reflects a partial impairment of the goodwill of these reporting units.

Auditing management’s goodwill impairment tests was complex and highly judgmental due to the significant estimation required in determining the fair values of the ANS and BDCC reporting units.

In particular, the fair value estimates were sensitive to changes in estimated discount rates, projected revenue growth rates and projected EBITDA margin percentages.

Goodwill is tested for impairment at least annually at the reporting unit level.

The Company performed its annual goodwill impairment test in the fourth quarter of 2024 using both a discounted cash flow model and a guideline public company approach.

As a result of the annual goodwill impairment test, no impairment charge was measured, as the estimated fair value of the ANS reporting unit was greater than the carrying value.

Auditing management’s goodwill impairment test was complex and highly judgmental due to the significant estimation required in determining the fair value of the ANS reporting unit.

In particular, the fair value estimate was sensitive to changes in significant assumptions, such as the estimated discount rate, projected revenue growth rate and projected EBITDA margin percentage, which are affected by expectations about future market or economic conditions.

How We Addressed the Matter in Our Audit

We evaluated the Company’s assessments of the impairment of goodwill for the ANS and BDCC reporting units.

We obtained an understanding, evaluated the design and tested the operating effectiveness of controls that address the risks of material misstatement relating to the interim and annual goodwill impairment tests for these reporting units, including controls over management’s development and review of the assumptions discussed above.

To test the estimated fair values of the ANS and BDCC reporting units, we performed audit procedures with the assistance of our valuation specialists that included, among others, assessing methodologies and testing the assumptions discussed above and the underlying data used by the Company in its analyses.

We evaluated the Company’s assessment of the impairment of goodwill for the ANS reporting unit.

We obtained an understanding, evaluated the design and tested the operating effectiveness of controls that address the risks of material misstatement relating to the annual goodwill impairment test for this reporting unit, including controls over management’s development and review of the significant assumptions discussed above.

To test the estimated fair value of the ANS reporting unit, we performed audit procedures with the assistance of our valuation specialists that included, among others, assessing methodologies and testing the significant assumptions discussed above and the underlying data used by the Company in its analysis.

We evaluated the Company’s estimated discount rate methodology and developed independent ranges of reasonable discount rates.

We compared the assumptions of projected revenue growth rates and projected EBITDA margin percentages used by management to current industry and economic trends, changes to the Company’s business and other relevant factors.

We also evaluated the reasonableness of the guideline public companies used to develop the fair value estimates of the ANS and BDCC reporting units.

We assessed the historical accuracy of management’s estimates and performed sensitivity analyses to evaluate the changes in the fair value of these reporting units that would result from changes in the assumptions discussed above.

We compared the significant assumptions of projected revenue growth rates and projected EBITDA margin percentages used by management to current industry and economic trends, changes to the Company’s business model, customer base or product mix and other relevant factors.

We also evaluated the reasonableness of the guideline public companies used to develop the fair value estimate of the ANS reporting unit.

We assessed the historical accuracy of management’s estimates and performed sensitivity analyses of significant assumptions to evaluate the changes in the fair value of the reporting unit that would result from changes in the assumptions.

We also evaluated the related goodwill disclosures included in Note 5 to the consolidated financial statements.

7 unchanged sentences

We obtained an understanding, evaluated the design and tested the operating effectiveness of controls that address the risks of material misstatement relating to the realizability of deferred tax assets, including controls over management’s development and review of the projected future taxable income.

To test the realizability of deferred tax assets, we performed audit procedures that included, among others, evaluating whether the sources of management’s estimated future taxable income were of the appropriate character and would be sufficient to utilize the deferred tax assets under the relevant tax laws.

We also evaluated the significant assumptions used by the Company to develop estimates of future taxable income and tested the completeness and accuracy of the underlying data.

To test the realizability of deferred tax assets, we performed audit procedures that included, among others, evaluating whether the sources of management’s projected future taxable income would be sufficient to utilize the deferred tax assets under the relevant tax laws.

We evaluated the significant assumptions used by the Company to develop the projected future taxable income and tested the completeness and accuracy of the underlying data.

We also evaluated the related income tax disclosures included in Note 14 to the consolidated financial statements.

34 unchanged sentences

Cost of sales

Transition service agreement income

Operating expenses:

6 unchanged sentences

Operating income (loss)

Other income (expense), net

Other income, net

Interest expense

3 unchanged sentences

Loss from continuing operations

Loss from discontinued operations, net of income tax (expense)

benefit of $ 184.0 , $( 1.9 ) and $ 32.6 , respectively

Income (loss) from discontinued operations, net of income tax

(expense) benefit of $( 95.0 ), $ 117.2 and $( 78.2 ), respectively

Series A convertible preferred stock dividends

1 unchanged sentence

Loss from continuing operations per share

Loss from discontinued operations per share

Earnings (loss) from discontinued operations per share

Loss per share

Loss from continuing operations per share

Loss from discontinued operations per share

Earnings (loss) from discontinued operations per share

Loss per share

2 unchanged sentences

CommScope Holding Company, Inc.

Consolidated Stat ements of Comprehensive Loss

Consolidated Statements of Comprehensive Loss

(In millions)

4 unchanged sentences

Defined benefit plans:

Change in unrecognized actuarial gain (loss)

Change in unrecognized loss

Change in unrecognized net prior service credit

73 unchanged sentences

Proceeds from sale of property, plant and equipment

Payments upon settlement of net investment hedge

Acquisition of a business

Net cash generated by (used in) investing activities

3 unchanged sentences

Long-term debt proceeds

Cash paid for debt discount

Debt issuance costs

Debt extinguishment costs

Dividends paid on Series A convertible preferred stock

Proceeds from the issuance of common shares under equity-based compensation plans

Tax withholding payments for vested equity-based compensation awards

48 unchanged sentences

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

The Company determined the anticipated sale of the Home business met the “held for sale” criteria and the “discontinued operations” criteria in accordance with Accounting Standards Codification (ASC) No.

On January 31, 2025, the Company completed the previously announced sale of the Outdoor Wireless Networks (OWN) segment and the Distributed Antenna Systems (DAS) business unit of the Networking, Intelligent Cellular & Security Solutions (NICS) segment to Amphenol Corporation (Amphenol), pursuant to the Purchase Agreement dated July 18, 2024, in exchange for approximately $ 2.1 billion in cash.

In the third quarter of 2024, the Company determined the sale of the OWN segment and DAS business unit met the “held for sale” criteria and the “discontinued operations” criteria in accordance with Accounting Standards Codification (ASC) No.

360-10, Impairment and Disposal of Long–Lived Assets , and ASC No.

205-20, Presentation of Financial Statements:

Discontinued Operations, in the fourth quarter of 2023 due to its relative size and strategic rationale.

All prior period amounts in these consolidated financial statements have been recast to reflect the discontinuation of the Home business in accordance with ASC 205-20.

Discontinued Operations, due to its relative size and strategic rationale.

For all periods presented, amounts in these consolidated financial statements have been recast to reflect the discontinuation of the OWN segment and DAS business unit in accordance with this guidance.

All discussions and results related to the NICS segment exclude the DAS business unit, since the DAS business unit was moved to held for sale in the third quarter of 2024.

The Company completed the acquisition of certain assets of Casa Systems, Inc.

and its subsidiaries (Casa) on June 7, 2024 (the Casa Transaction).

As part of the Casa Transaction, the Company acquired certain assets (the Casa Assets) and assumed certain specified liabilities (the Casa Liabilities) of Casa.

The sale was conducted pursuant to the bid procedures (the Bid Procedures) established in the chapter 11 cases of Casa Systems, Inc.

and certain affiliates in the United States (U.S.) Bankruptcy Court for the District of Delaware (the Bankruptcy Court).

Pursuant to the Bid Procedures, the Company was designated as the successful bidder following an auction held on May 29, 2024.

On June 5, 2024, the Bankruptcy Court entered an order authorizing the sale of the Casa Assets to the Company pursuant to Section 363 of the U.S.

Bankruptcy Code (subject to the terms thereof).

The sale closed on June 7, 2024 and, at such time, the Company funded the purchase price of $ 45.1 million and settled certain assumed Casa Liabilities, with cash on hand.

The Company is integrating this strategic acquisition into its Access Network Solutions (ANS) segment and expects the acquisition to strengthen its ANS segment’s position by enhancing its virtual cable modem termination systems ( CMTS) and passive optical network ( PON) product offerings, which will enable customers to migrate to distributed access architecture (DAA) solutions at their own speed, and further grow its customer base.

See Note 3 for additional discussion of the Casa Transaction.

On January 9, 2024, the Company completed the sale of its Home Networks (Home) segment and substantially all of the associated segment assets and liabilities (Home business) to Vantiva SA (Vantiva) pursuant to the Call Option Agreement entered into on October 2, 2023 and Purchase Agreement dated as of December 7, 2023.

In the fourth quarter of 2023, the Company determined the sale of the Home business met the “held for sale” criteria and the “discontinued operations” criteria in accordance with accounting guidance.

All prior period amounts in these consolidated financial statements have been recast to reflect the discontinuation of the Home business.

The discussions in these consolidated financial statements relate solely to the Company’s continuing operations, unless otherwise noted.

As a result, the Company is reporting financial performance based on the following remaining four operating segments, which excludes the Home segment:

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

For further discussion of the discontinued operation related to the Home business, see Note 3.

As a result, the Company is reporting financial performance based on the following remaining three operating segments, which excludes the OWN segment, DAS business unit of the NICS segment and Home business:

Connectivity and Cable Solutions (CCS), NICS and ANS.

See Note 4 for further discussion of the discontinued operations related to the OWN segment, DAS business unit and Home business.

As of January 1, 2024, management shifted certain product lines from the Company’s CCS segment to its ANS segment to better align with how the businesses are managed.

All prior period amounts in these consolidated financial statements have been recast to reflect these operating segment changes.

CommScope Holding Company, Inc.

Notes to Consolidated Financial Statements-(Continued)

(In millions, unless otherwise noted)

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3 unchanged sentences

Certain prior year amounts have been reclassified to conform to the current year presentation.

Revision of Previously Issued Financial Statements

In 2024, the Company identified errors within the consolidated financial statements as of and for the year ended December 31, 2023 (specifically in the quarter ended December 31, 2023).

The errors related to the treatment of foreign currency translation associated with the loss on held for sale classification included in loss from discontinued operations, net of income taxes, and changes in uncertain tax positions and valuation allowances impacting other noncurrent liabilities and income tax expense.

The Company assessed the materiality of these errors and subsequent correction on its current and prior period consolidated financial statements on a qualitative and quantitative basis in accordance with SEC Staff Accounting Bulletin (“SAB”) No.

99, Materiality, and SAB No.

108 on Quantifying Financial Statement Errors, codified in Accounting Standards Codification Topic 250, Accounting Changes and Error Corrections.

Based on this assessment, although the Company concluded that the previously issued financial statements as of and for the year ended December 31, 2023, were not materially misstated, the Company corrected the immaterial errors for the previously reported year ended December 31, 2023 in this Annual Report on Form 10-K.

In connection with these adjustments, the Company also corrected certain other immaterial adjustments affecting both continuing and discontinued operations, as noted below.

Amounts adjusted to reflect the correction of these errors are labeled “As Adjusted” within this Annual Report on Form 10-K.

The impact of the revisions for the year ended December 31, 2023 are disclosed below.

The Consolidated Statements of Stockholders’ Deficit for the year ended December 31, 2023 was only impacted by the change to net income (loss) and is not included in the tables below.

The impact of the first quarter revisions on the unaudited condensed consolidated financial statements as of and for the three months ended March 31, 2024, six months ended June 30, 2024 and nine months ended September 30, 2024 were also considered immaterial and are presented below.

There was no impact to the Condensed Consolidated Statements of Operations or Statements of Comprehensive Income (Loss) for the three months ended June 30, 2024 or September 30, 2024.

The following tables are in millions, except per share amounts.

CommScope Holding Company, Inc.

Notes to Consolidated Financial Statements-(Continued)

(In millions, unless otherwise noted)

Consolidated Statement of Operations and Comprehensive Loss

Year Ended December 31, 2023

As Recast (1)

Cost of sales

Operating loss

Loss from continuing operations before income taxes

Income tax expense

Loss from continuing operations

Loss from discontinued operations, net of income taxes

Net loss attributable to common stockholders

Total comprehensive loss

Basic and Diluted:

Loss from continuing operations per share

Loss from discontinued operations per share

Loss per share

(1) Reflects the impact of classifying the OWN segment and DAS business unit as discontinued operations.

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)

Three Months Ended

March 31, 2024

Six Months Ended

June 30, 2024

Nine Months Ended

September 30, 2024

Cost of sales

Operating income (loss)

Income (loss) from continuing

operations before income taxes

Income tax expense

Income (loss) from continuing

Income (loss) from discontinued

operations, net of income taxes

Net income (loss)

Net income (loss) attributable to

common stockholders

Total comprehensive income (loss) (2)

Basic and Diluted:

Earnings (loss) from continuing

operations per share

Earnings (loss) from discontinued

operations per share

Earnings (loss) per share

(1) Reflects the impact of classifying the OWN segment and DAS business unit as discontinued operations.

(2) Reflects the changes to net income (loss) which was the only line item impacted in the Consolidated Statements of Comprehensive Income (Loss).

CommScope Holding Company, Inc.

Notes to Consolidated Financial Statements-(Continued)

(In millions, unless otherwise noted)

Consolidated Balance Sheet

As of December 31, 2023

As Recast (1)

Accounts receivable, net of allowance for doubtful accounts

Current assets held for sale

Total current assets

Deferred income taxes

Accrued and other liabilities

Total current liabilities

Other noncurrent liabilities

Total liabilities

Accumulated deficit

Total stockholders' deficit

Total liabilities and stockholders' deficit

(1) Reflects the impact of classifying the OWN segment and DAS business unit as discontinued operations.

Condensed Consolidated Balance Sheets

As of March 31, 2024

As of June 30, 2024

As of September 30, 2024

Other noncurrent

Total liabilities

Accumulated deficit

Total stockholders'

Consolidated Statement of Cash Flows

Year Ended December 31, 2023

Operating Activities:

Adjustments to reconcile net loss to net cash generated by operating activities:

Deferred income taxes

Asset impairments

Changes in assets and liabilities:

Accounts receivable

Accounts payable and other accrued liabilities

Other noncurrent liabilities

Net cash generated by operating activities

Investing Activities:

Additions to property, plant and equipment

Net cash generated by investing activities

CommScope Holding Company, Inc.

Notes to Consolidated Financial Statements-(Continued)

(In millions, unless otherwise noted)

Condensed Consolidated Statements of Cash Flows

Three Months Ended

March 31, 2024

Six Months Ended

June 30, 2024

Nine Months Ended

September 30, 2024

Operating Activities:

Net income (loss)

Adjustments to reconcile net

loss to net cash generated by

operating activities:

Deferred income taxes

Changes in assets and liabilities:

Accounts receivable

Accounts payable, accrued and

other liabilities

Use of Estimates in the Preparation of the Financial Statements

13 unchanged sentences

Cash and cash equivalents represent deposits in banks and cash invested temporarily in various instruments that are highly liquid and have a maturity of three months or less at the time of purchase.

CommScope Holding Company, Inc.

Notes to Consolidated Financial Statements-(Continued)

(In millions, unless otherwise noted)

Accounts Receivable and Allowance for Doubtful Accounts

9 unchanged sentences

Accounts are written off against the allowance account when they are determined to be no longer collectible.

The Company sells certain of its accounts receivable under a customer-sponsored supplier financing agreement.

Under this agreement, the Company is able to sell certain accounts receivable to a bank at a discount.

The Company sold approximately $ 183 million and $ 339 million of trade accounts receivable under this program during the years ended December 31, 2023 and 2022 , respectively, and the cost of factoring such receivables was not material.

CommScope Holding Company, Inc.

Notes to Consolidated Financial Statements-(Continued)

(In millions, unless otherwise noted)

The Company sells certain of its accounts receivable under customer-sponsored supplier financing agreements.

Under these agreements, the Company is able to sell certain accounts receivable to a bank at a discount.

The Company sold approximately $ 330 million and $ 183 million of trade accounts receivable under these programs during the years ended December 31, 2024 and 2023 , respectively, and the cost of factoring such receivables was not material.

The Company derecognizes the accounts receivable on the Consolidated Balance Sheets once sold to the bank, as it retains no interest in and has no servicing responsibilities for them once they have been sold.

6 unchanged sentences

The Company reports the results of operations of a business as discontinued operations if a disposal represents a strategic shift that has or will have a major effect on the Company’s operations and financial results when the business is sold, in accordance with the criteria of ASC Topic 205-20, Presentation of Financial Statements—Discontinued Operations , and classified as held for sale, in accordance with ASC Topic 360-10, Impairment and Disposal of Long Lived Assets .

For assets (disposal group) held for sale, the disposal group as a whole is measured at the lower of its carrying amount or fair value less cost to sell after adjusting the individual assets of the disposal group, if necessary.

The results of discontinued operations are reported in loss from discontinued operations, net of income taxes in the accompanying Consolidated Statements of Operations for the current and prior periods and include any gain or loss recognized on classification as held for sale, or adjustment of the carrying amount or estimated fair value less cost to sell.

6 unchanged sentences

This strategy does not permit the use of derivative financial instruments for trading or speculation.

CommScope Holding Company, Inc.

Notes to Consolidated Financial Statements-(Continued)

(In millions, unless otherwise noted)

The Company periodically uses forward contracts to hedge a portion of its balance sheet foreign exchange re-measurement risk and to hedge certain planned foreign currency expenditures.

Unrealized gains and losses resulting from these contracts are recognized in other income (expense), net and partially offset corresponding foreign exchange gains and losses on the balances and expenditures being hedged.

Unrealized gains and losses resulting from these contracts are recognized in other income, net and partially offset corresponding foreign exchange gains and losses on the balances and expenditures being hedged.

These instruments are not designated as hedges for hedge accounting purposes and are marked to market each period through earnings.

The Company also utilizes a hedging strategy to mitigate the interest rate risk from its variable rate debt, initially associated with its amended senior secured term loan due 2026 (2026 Term Loan) and extending to future borrowings or debt issued, to fix a portion of the future interest cash flows by designating qualifying receive-variable and pay-fixed interest rate swaps as a cash flow hedge for accounting and financial reporting purposes.

The Company also utilizes a hedging strategy to mitigate the interest rate risk from its variable rate debt, associated with its borrowings or debt issued, to fix a portion of the future interest cash flows by designating qualifying receive-variable and pay-fixed interest rate swaps as a cash flow hedge for accounting and financial reporting purposes.

Hedge effectiveness is assessed each quarter, and for hedges that meet the effectiveness requirements, changes in fair value are recorded as a component of other comprehensive income (loss), net of tax, and are reclassified to interest expense as interest payments are made on the Company’s variable rate debt.

1 unchanged sentence

See Note 10 for further disclosure related to the derivative instruments and hedging activities.

CommScope Holding Company, Inc.

Notes to Consolidated Financial Statements-(Continued)

(In millions, unless otherwise noted)

The Company determines if a contract is a lease or contains a lease at inception.

19 unchanged sentences

Assets that management intends to dispose of and that meet “held for sale” criteria are carried at the lower of the carrying value or fair value less costs to sell.

CommScope Holding Company, Inc.

Notes to Consolidated Financial Statements-(Continued)

(In millions, unless otherwise noted)

Goodwill and Other Intangible Assets

8 unchanged sentences

See Notes 5 and 11 for discussion of asset impairment charges.

CommScope Holding Company, Inc.

Notes to Consolidated Financial Statements-(Continued)

(In millions, unless otherwise noted)

Revenue Recognition

25 unchanged sentences

Variable consideration is primarily related to the Company’s sales to distributors, system integrators and value-added resellers.

CommScope Holding Company, Inc.

Notes to Consolidated Financial Statements-(Continued)

(In millions, unless otherwise noted)

A contract liability for deferred revenue is recorded when consideration is received or is unconditionally due from a customer prior to transferring control of goods or services to the customer under the terms of a contract.

6 unchanged sentences

Shipping and handling costs incurred after control is transferred to the customer are accounted for as fulfillment costs and are not accounted for as separate revenue obligations.

CommScope Holding Company, Inc.

Notes to Consolidated Financial Statements-(Continued)

(In millions, unless otherwise noted)

Tax Collected from Customers

16 unchanged sentences

In some instances, the Company enhances its ongoing termination benefits with one-time termination benefits, which are recognized when employees are notified of their enhanced termination benefits.

CommScope Holding Company, Inc.

Notes to Consolidated Financial Statements-(Continued)

(In millions, unless otherwise noted)

Foreign Currency Translation

8 unchanged sentences

Upon sale or liquidation of an investment in a foreign subsidiary, the amount of net translation gains or losses that have been accumulated in other comprehensive loss attributable to that investment are reported as a gain or loss in earnings in the period in which the sale or liquidation occurs.

Aggregate foreign currency gains and losses, such as those resulting from the settlement of receivables or payables, foreign currency contracts and short-term intercompany advances in a currency other than the subsidiary’s functional currency, are recorded currently in earnings (included in other income (expense), net) and resulted in losses o f $ 13.9 million, $ 4.6 million and $ 4.1 mi llion during the years ended December 31, 2023, 2022 and 2021 , respectively.

Aggregate foreign currency gains and losses, such as those resulting from the settlement of receivables or payables, foreign currency contracts and short-term intercompany advances in a currency other than the subsidiary’s functional currency, are recorded currently in earnings (included in other income, net) and resulted in gains ( losses) of $ 9.5 million, $( 7.6 ) million and $( 4.0 ) mill ion during the years ended December 31, 2024, 2023 and 2022 , respectively.

Foreign currency remeasurement gains and losses related to certain long-term intercompany loans that are not expected to be settled in the foreseeable future are recorded in accumulated other comprehensive loss.

CommScope Holding Company, Inc.

Notes to Consolidated Financial Statements-(Continued)

(In millions, unless otherwise noted)

Equity-Based Compensation

15 unchanged sentences

The denominator used in diluted EPS is based on the basic EPS computation plus the effect of potentially dilutive common shares related to the Convertible Preferred Stock and equity-based compensation plans, subject to antidilution requirements.

CommScope Holding Company, Inc.

Notes to Consolidated Financial Statements-(Continued)

(In millions, unless otherwise noted)

For the years ended December 31, 2024, 2023 and 2022 , 18.3 million, 17.9 million and 11.3 million shares, respectively, of outstanding equity-based compensation awards were not included in the computation of diluted EPS because either the effect was antidilutive or the performance conditions were not met.

2 unchanged sentences

however, they may have been considered dilutive if the Company had not been in a net loss attributable to common stockholders position.

CommScope Holding Company, Inc.

Notes to Consolidated Financial Statements-(Continued)

(In millions, unless otherwise noted)

The following table presents the basis for the EPS computations (in millions, except per share data):

1 unchanged sentence

Loss from continuing operations

Loss from discontinued operations, net of tax

Income (loss) from discontinued operations, net of tax

Dividends on Series A convertible preferred stock

5 unchanged sentences

Loss from continuing operations per share

Loss from discontinued operations per share

Earnings (loss) from discontinued operations per share

Loss per share

Loss from continuing operations per share

Loss from discontinued operations per share

Earnings (loss) from discontinued operations per share

Loss per share

8 unchanged sentences

However, an adverse change in financial condition of a significant customer or group of customers or in the telecommunications industry could materially affect the Company’s estimates related to doubtful accounts.

CommScope Holding Company, Inc.

Notes to Consolidated Financial Statements-(Continued)

(In millions, unless otherwise noted)

The principal raw materials and components purchased by CommScope (aluminum, copper, steel, bimetals, optical fiber, plastics and other polymers, capacitors, memory devices and silicon chips) are subject to changes in market price as these materials are linked to various commodity markets.

2 unchanged sentences

Any disruption or termination of these arrangements could have a material adverse impact on the Company’s results of operations.

CommScope Holding Company, Inc.

Notes to Consolidated Financial Statements-(Continued)

(In millions, unless otherwise noted)

Recent Accounting Pronouncements

Adopted in 2024

On January 1, 2023, the Company adopted Accounting Standards Update (ASU) No.

On January 1, 2024, the Company adopted Accounting Standard Update (ASU) No.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures.

The new guidance improves reportable segment disclosure requirements, primarily through enhanced disclosures for significant segment expenses.

The guidance was effective retrospectively for the Company as of January 1, 2024 for the annual period.

The guidance is effective retrospectively for the Company as of January 1, 2025 for the interim periods.

As a result, the Company has enhanced its segment disclosures to include the presentation of significant cost and expenses by segment.

The adoption of this ASU only affects the Company’s disclosures, with no impacts to the financial condition and results of operations.

On January 1, 2024, the Company adopted the rollforward disclosure requirement of ASU No.

2022-04, Liabilities—Supplier Finance Programs (Subtopic 405-50):

1 unchanged sentence

The new guidance improves the transparency of supplier finance programs by requiring that a buyer in a supplier finance program disclose sufficient qualitative and quantitative information about the program to allow a user of its financial statements to understand the program’s nature, activity during the period, changes from period to period and potential effect on an entity’s financial statements.

This guidance has been applied retrospectively to all periods in which a balance sheet is presented, except for the requirement to disclose rollforward information, which is effective prospectively for the Company as of January 1, 2024.

The impact of adopting this new guidance was not material to the consolidated financial statements.

In June 2023, the Company adopted ASU No.

2020-04, Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting and the related updates , ASU No.

2021-01, Reference Rate Reform (Topic 848):

Scope and ASU No.

2022-06, Reference Rate Reform (Topic 848):

Deferral of the Sunset Date of Topic 848 .

Together, the ASUs provide temporary optional guidance to ease the potential burden in accounting for reference rate reform.

The guidance provides optional expedients and exceptions for applying generally accepted accounting principles (GAAP) to transactions affected by reference rate reform if certain criteria are met.

The Company adopted the reference rate reform guidance in connection with its amendment of the 2026 Term Loan on June 8, 2023 to transition from the Eurodollar Rate based on the London Interbank Offered Rate (LIBOR) to a Secured Overnight Financing Rate (SOFR), as the reference interest rate, effective as of July 1, 2023, in anticipation of the cessation of LIBOR in 2023 (see Note 8 for further discussion).

The impact of adopting this guidance was not material to the consolidated financial statements.

The Company continues to evaluate and monitor developments and its assessment of this guidance during the LIBOR transition period.

The requirement to disclose rollforward information was effective prospectively for the Company as of January 1, 2024.

The impact of adopting this new guidance was not material to the consolidated financial statements and related disclosures.

Issued but Not Adopted

In December 2023, the Financial Accounting Standards Board (FASB) issued ASU No.

2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures .

The new guidance is expected to improve income tax disclosures primarily related to the rate reconciliation and income taxes paid information by requiring 1) consistent categories and greater disaggregation of information in the rate reconciliation and 2) income taxes paid disaggregated by jurisdiction.

The guidance is effective for the Company on a prospective basis, although retrospective application is permitted, as of January 1, 2025 for the annual period.

In November 2024, the Financial Accounting Standards Board (FASB) issued ASU No.

2024-04, Debt—Debt with Conversion and Other Options (Subtopic 470-20):

Induced Conversions of Convertible Debt Instruments.

The new guidance improves the relevance and consistency in application of the induced conversion guidance in Subtopic 410-20.

The amendments in this update clarify the requirements for determining whether settlements of convertible debt instruments should be accounted for as an induced conversion.

The guidance also addresses the settlement of convertible debt instruments that are not currently convertible and provides additional clarifications to assist stakeholders in applying the guidance.

The guidance is effective for the Company on a prospective or retrospective basis, beginning January 1, 2026 for the interim and annual periods.

Early adoption is permitted.

1 unchanged sentence

In November 2024, the FASB issued ASU No.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures.

The new guidance is expected to improve reportable segment disclosure requirements, primarily through enhanced disclosures for significant segment expenses.

The guidance is effective for the Company on a retrospective basis as of January 1, 2024 for the annual period and January 1, 2025 for the interim periods.

2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40).

The new guidance improves disclosures for expenses of public entities and addresses requests from investors for more detailed information about the types of expenses in commonly presented expense captions.

Coupled with recent standards that enhanced the disaggregation of revenue and income tax information, the disaggregated expense information required by these amendments will enable investors to better understand the major components of an entity's income statement.

The guidance is effective for the Company on a prospective or retrospective basis, as of January 1, 2027 for the annual period.

Early adoption is permitted.

As this ASU relates to disclosures only, there will be no impact to CommScope’s consolidated results of operations and financial condition.

In March 2024, the FASB issued ASU No.

2024-01, Compensation—Stock Compensation (Topic 718).

The amendments in this guidance include clarification on how entities should apply the scope guidance in Topic 718 when determining whether profits interest and similar awards should be accounted for in accordance with Topic 718.

The guidance is effective for the Company on a prospective or retrospective basis, beginning January 1, 2026 for the interim and annual periods.

Early adoption is permitted.

The Company is currently evaluating the impact of the new guidance on the consolidated financial statements.

In December 2023, the Financial Accounting Standards Board issued ASU No.

2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures .

The new guidance is expected to improve income tax disclosures by requiring additional

information related to the rate reconciliation and income taxes paid, including 1) consistent categories and greater disaggregation of

information in the rate reconciliation and 2) disaggregation of income taxes paid by jurisdiction.

The guidance is effective for the

Company on a prospective or retroactive basis, beginning January 1, 2025 for the annual period.

Early adoption is permitted.

The Company is currently evaluating the impact of the new guidance on the consolidated financial

CommScope Holding Company, Inc.

1 unchanged sentence

(In millions, unless otherwise noted)

On June 7, 2024, the Company completed the acquisition of certain assets of Casa Systems, Inc.

and its subsidiaries (Casa), which provides telecommunication infrastructure equipment and software-centric infrastructure solutions that allow cable service providers to deliver voice, video and data services over a single platform.

The acquired assets included, among other things, accounts receivable, specified inventory, intellectual property and intellectual property rights, certain specified contracts, including facility leases, equipment and other personal property (collectively, the Casa Assets).

As part of the Casa Transaction, the Company assumed certain specified liabilities, including certain cure costs related to assumed contracts and liabilities under such contracts and relating to the employment of continuing employees, in each case, arising after the consummation of the acquisition (collectively, the Casa Liabilities).

The sale was conducted pursuant to the Bid Procedures established in the chapter 11 cases of Casa Systems, Inc.

and certain affiliates in the Bankruptcy Court.

Pursuant to the Bid Procedures, the Company was designated as the successful bidder following an auction held on May 29, 2024.

On June 5, 2024, the Bankruptcy Court entered an order authorizing the sale of the Casa Assets to the Company pursuant to Section 363 of the U.S.

Bankruptcy Code (subject to the terms thereof).

The sale closed on June 7, 2024 and, at such time, the Company funded the purchase price of $ 45.1 million and settled certain assumed Casa Liabilities, with cash on hand.

The Company is integrating this strategic acquisition into its ANS segment and expects the acquisition to strengthen its ANS segment’s position by enhancing its virtual CMTS and PON product offerings, which will enable customers to migrate to DAA solutions at their own speed, and further grow its customer base.

The Company recorded the purchase of the Casa Transaction using the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations , and, accordingly, recognized the assets acquired and liabilities assumed at their fair values as of the date of acquisition.

As of December 31, 2024, the acquisition is substantially complete, with the exception of pending information on certain accounts receivable, of which the final determination of the fair value will be completed within the one-year measurement period.

The following amounts represent the preliminary determination of the fair value of identifiable assets acquired and liabilities assumed in the Casa Transaction as of the acquisition date:

Amounts Recognized as of Acquisition Date

Measurement Period Adjustments

Amounts Recognized as of Acquisition Date

(As Adjusted)

Purchase price

Total cash consideration paid

Accounts receivable, net (1)

Inventories, net

Property, plant and equipment

Identifiable intangible assets

Other noncurrent assets

Liabilities assumed

Accounts payable and accrued and

other liabilities

Other noncurrent liabilities

Fair value allocated to net assets acquired

(1) The fair value of accounts receivable, net is $ 5.2 million with a gross contractual amount of $ 12.2 million.

The Company expects $ 7.0 million to be uncollectible.

The impact of measurement period adjustments to the Consolidated Statements of Operations was immaterial for the year ended December 31, 2024.

CommScope Holding Company, Inc.

Notes to Consolidated Financial Statements-(Continued)

(In millions, unless otherwise noted)

The goodwill arising from the Casa Transaction is believed to result from the company’s reputation in the marketplace and assembled workforce and is expected to be fully deductible for income tax purposes.

Various valuation techniques which use significant unobservable inputs, or Level 3 inputs as defined by the fair value hierarchy, were used to estimate the fair value of the assets acquired and the liabilities assumed.

Using these valuation approaches requires the Company to make certain estimates and assumptions.

The table below summarizes the preliminary valuations of the intangible assets acquired that were determined by management to meet the criteria for recognition apart from goodwill and determined to have finite lives.

Estimated Fair Value

Weighted Average Estimated Useful Life

Customer relationships

Existing technology

Total amortizable intangible assets

The Company recorded $ 18.6 million of net sales included in the Consolidated Statements of Operations related to the Casa business for the year ended December 31, 2024.

The Company recognized $ 1.4 million of transaction and integration-related costs related to the Casa Transaction for the year ended December 31, 2024, and these costs were recognized in selling, general and administrative expense in the Consolidated Statements of Operations.

DISCONTINUED OPERATIONS

On October 2, 2023, the Company entered into a Call Option Agreement with Vantiva SA, a société anonyme organized under the Laws of France (Vantiva), pursuant to which the Company granted Vantiva a binding call option to acquire the Home segment and substantially all of the associated segment assets and liabilities, which was subsequently exercised and a Purchase Agreement signed on December 7, 2023, in exchange for (i) 134,704,669 shares of Vantiva common stock representing a 24.73 % equity stake in Vantiva (determined on a fully diluted basis), (ii) $ 250,465 in cash (in addition to cash paid in exchange for the cash on the Home business companies’ balance sheets) and (iii) an earn-out of up to $ 100 million in the aggregate.

The $ 250,465 in cash paid in connection with the closing was expected to be used to acquire additional shares of Vantiva common stock, following which the Company was expected to own a 25 % equity stake in Vantiva (on a fully diluted basis).

The earn-out payments are contingent on Vantiva achieving adjusted EBITDA equal to or greater than € 400 million for one or more of Vantiva’s first five fiscal years following the closing of the transaction.

On January 31, 2025, the Company completed the previously announced sale of the OWN segment and the DAS business unit of the NICS segment to Amphenol, pursuant to the Purchase Agreement dated July 18, 2024, in exchange for approximately $ 2.1 billion in cash.

The OWN segment and DAS business unit qualified as “held for sale” per ASC 360-10 in the third quarter of 2024 and were classified as a discontinued operation per ASC 205-20, as the Company determined, qualitatively and quantitatively, that this transaction represents a strategic shift that has or will have a major effect on the Company’s operations and financial results.

As such, activity directly attributable to the OWN segment and DAS business unit has been removed from continuing operations and presented in income (loss) from discontinued operations, net of income taxes, on the Consolidated Statements of Operations for all periods presented.

In addition, all assets and liabilities of the OWN segment and DAS business unit were classified as assets and liabilities held for sale on the Consolidated Balance Sheets as of December 31, 2024 and 2023.

On January 9, 2024, the Company completed the sale of the Home business to Vantiva pursuant to the Call Option Agreement entered into on October 2, 2023 and the Purchase Agreement dated as of December 7, 2023, in exchange for (i) 134,704,669 shares of Vantiva common stock representing a 24.73 % equity stake in Vantiva (determined on a fully diluted basis), (ii) $ 250,465 in cash (in addition to cash paid in exchange for the cash on the Home business companies’ balance sheets) and (iii) an earn-out of up to $ 100 million in the aggregate.

The earn-out payments are contingent upon Vantiva achieving adjusted EBITDA equal to or greater than € 400 million for one or more of Vantiva’s first five fiscal years following the closing of the transaction.

The earn-out payment with respect to any fiscal year will be subject to an additional annual cap, the amount of which will depend on certain elections made by the Company following Vantiva reaching the € 400 million adjusted EBITDA threshold for the first time, and on Vantiva’s maintenance of certain liquidity levels (after giving effect to such payment).

CommScope Holding Company, Inc.

Notes to Consolidated Financial Statements-(Continued)

(In millions, unless otherwise noted)

The Home business qualified as “held for sale” per ASC 360-10 in the fourth quarter of 2023 and was classified as a discontinued operation per ASC 205-20, as the Company determined, qualitatively and quantitatively, that this transaction represents a strategic shift that has or will have a major effect on the Company’s operations and financial results.

As such, activity directly attributable to the Home business has been removed from continuing operations and presented in loss from discontinued operations, net of income taxes on the Consolidated Statements of Operations for all periods presented.

In addition, all assets and liabilities of the Home business have been classified as assets and liabilities held for sale on the Consolidated Balance Sheets as of December 31, 2023 and 2022.

In connection with the “held for sale” classification, the Company recognized a loss on classification as held for sale of $ 177.0 million, which has been included in loss from discontinued operations, net of income taxes on the Consolidated Statements of Operations for the year ended December 31, 2023.

Following the closing of this transaction, the Company’s ownership interest in Vantiva is expected to be reported as an equity method investment.

In addition, the Company has also entered into a Supply Agreement, whereby the Company will sell certain retained inventory to Vantiva for a period of two years following the close of the transaction at market prices.

The following table presents the summarized components of loss from discontinued operations, net of income taxes:

Year Ended December 31,

As such, activity directly attributable to the Home business has been removed from continuing operations and presented in income (loss) from discontinued operations, net of income taxes, on the Consolidated Statements of Operations for all periods presented.

In addition, all assets and liabilities of the Home business were classified as assets and liabilities held for sale on the Consolidated Balance Sheet as of December 31, 2023.

In connection with the “held for sale” classification, the Company recognized a loss on classification as held for sale of $ 203.4 million in the fourth quarter of 2023.

Upon the closing of the transaction on January 9, 2024, the Company recognized an additional loss of $ 56.4 million on the disposal of the Home business for the year ended December 31, 2024.

The Company also recorded a loss on impairment of $ 19.2 million, based on Level 3 valuation inputs which included contractual payment amounts and market comparable information, related to Home business patents.

These losses were recorded in income (loss) from discontinued operations, net of income taxes on the Consolidated Statements of Operations.

During the third quarter of 2023, a partial impairment of $ 469.2 million was recorded related to the Home segment’s intangible assets.

The Company estimated the fair value of the asset group using Company-specific inputs, including estimates of consideration to be received upon the impending divestiture, as well as other market participant assumptions.

The determination of the impairment charge was based on Level 3 valuation inputs.

The loss was recorded in income (loss) from discontinued operations, net of income taxes on the Consolidated Statements of Operations.

In conjunction with the closing of the Home business transaction, the Company entered into a transition service agreement with Vantiva (Vantiva TSA), whereby the Company provides and receives certain post-closing support on a transitional basis which is included in continuing operations in transition service agreement income.

The terms of the Vantiva TSA vary based on the services provided thereunder, with the longest such term having a duration of sixteen months.

The Vantiva TSA provides options to extend services for up to two renewal terms of three months each.

Following the closing of the transaction, the Company also entered into a Supply Agreement with Vantiva (Vantiva Supply Agreement), whereby the Company sells certain retained inventory at cost, or market price if below cost, for a period of two years.

The Company’s investment in Vantiva is accounted for using the equity method of accounting, and the carrying value of the investment is included in other noncurrent assets in the Consolidated Balance Sheets.

The Company recognized a loss on its investment of $ 17.0 million in the second quarter of 2024, as a result of recording its proportionate share of loss on its equity investment, which is recorded on a one-quarter lag basis in discontinued operations in the Consolidated Statements of Operations beginning in the second quarter of 2024.

The investment in the ordinary shares is subject to a lock-up period, until the earlier of eighteen months, or the occurrence of a change of control or the entry into an agreement that would result in a change of control, following closing.

CommScope Holding Company, Inc.

Notes to Consolidated Financial Statements-(Continued)

(In millions, unless otherwise noted)

The following table presents the summarized components of income (loss) from discontinued operations, net of income taxes for the years ended December 31, 2024, 2023 and 2022 for each discontinued operation:

Cost of sales (1)

Operating expenses:

Selling, general and

administrative

Research and development

Amortization of purchased

intangible assets

Restructuring costs (credits), net

Asset impairments

Total operating expenses

Operating income (loss)

Other income (expense), net (2)

Income (loss) from operations of

discontinued businesses before

Loss on disposal of discontinued

operations before income taxes

Income tax (expense) benefit

Income (loss) from discontinued

operations, net of income taxes

(1) Cost of sales includes a charge of $ 19.5 million for excess and obsolete inventory related to the Home business during the year ended December 31, 2024 .

(2) Other income (expense), net includes a loss on equity investment of $ 17.0 million related to the Home business for the year ended December 31, 2024 .

Cost of sales (1)

Operating expenses:

Selling, general and administrative

1 unchanged sentence

Amortization of purchased intangible assets

Restructuring costs (credits), net

Restructuring costs, net

Asset impairments

Total operating expenses

Operating loss

Other income, net

Loss from discontinued operations before income taxes

Loss on classification as held for sale

Operating income (loss)

Other expense, net (2)

Income (loss) from operations of discontinued businesses before income taxes

Loss on disposal of discontinued operations before income taxes

Income tax (expense) benefit

Loss from discontinued operations, net of income taxes

Income (loss) from discontinued operations, net of income taxes

CommScope Holding Company, Inc.

1 unchanged sentence

(In millions, unless otherwise noted)

The following table presents balance sheet information for assets and liabilities held for sale:

(1) Cost of sales includes a charge of $ 19.5 million for excess and obsolete inventory related to the Home business during the year ended December 31, 2024 .

(2) Other expense, net includes a loss on equity investment of $ 17.0 million related to the Home business for the year ended December 31, 2024 .

The following table presents balance sheet information for assets and liabilities held for sale related to the discontinued operations:

December 31, 2024

December 31, 2023

Cash and cash equivalents

2 unchanged sentences

Prepaid expenses and other

Property, plant, and equipment, net

Other intangible assets, net

Total current assets

8 unchanged sentences

Accrued and other liabilities

Other liabilities

Total current liabilities held for sale

3 unchanged sentences

Total liabilities held for sale

The following table presents the details of the loss on disposal of Home business:

January 9, 2024

Consideration received (net of cash acquired):

Fair value of shares issued to seller

Total disposal consideration

Carrying value of net assets sold

Loss on disposal of Home business before income taxes

and reclassification of foreign currency translation

Reclassification of foreign currency translation

Loss on disposal of Home business before income taxes

Income tax expense

Loss on disposal of Home business, net of income taxes

CommScope Holding Company, Inc.

Notes to Consolidated Financial Statements-(Continued)

(In millions, unless otherwise noted)

The cash flows related to discontinued operations have not been segregated in the Consolidated Statements of Cash Flows, and accordingly, they include the results from continuing and discontinued operations.

The following table summarizes significant non-cash operating items and capital expenditures of the discontinued operation included in the Consolidated Statements of Cash Flows:

For the year ended December 31, 2024, the Company’s cash inflows related to the Vantiva TSA and inventory sales resulting from the Home business transaction, as described above, were $ 22.6 million and $ 46.3 million, respectively .

The following table summarizes significant non-cash operating items of the discontinued operations included in the Consolidated Statements of Cash Flows:

Year Ended December 31,

Significant non-cash operating items:

Loss on disposal of Home business

Depreciation and amortization

Equity-based compensation

Asset impairments (1)

Loss on equity investment

Equity-based compensation

Capital expenditures

(1) Includes loss of $ 177.0 million on classification as held for sale and $ 469.2 million on impairment of long-lived assets.

The loss on classification as held for sale of $ 177.0 million recorded in the fourth quarter of 2023 reduced the carrying value of the Home business disposal group, comprised of all the assets and liabilities of the Home business, to its fair value less cost to sell.

The Company estimated the fair value of the disposal group using Company-specific inputs, including estimates of consideration to be exchanged upon the close of the divestiture.

The determination of the loss on classification as held for sale was based on Level 3 valuation inputs.

The Company also recorded a partial impairment of $ 469.2 million related to the Home segment's intangible assets during the third quarter of 2023.

The determination of the impairment charge was based on Level 3 valuation inputs.

CommScope Holding Company, Inc.

Notes to Consolidated Financial Statements-(Continued)

(In millions, unless otherwise noted)

(1) Includes loss of $ 203.4 million on classification as held for sale related to the Home business f or the year ended December 31, 2023 and $ 469.2 million on partial impairment recorded during the third quarter of 2024 related to the Home segment’s intangible assets.

GOODWILL AND OTHER INTANGIBLE ASSETS

9 unchanged sentences

Customer base

Trade names and

Trade names and trademarks

Patents and technologies

3 unchanged sentences

Future amortization expense as of December 31, 2024 is as follows:

The table above includes amortization expense of $ 19.5 million in 2024 and $ 4.4 million in 2025 related to retained patents in the Home business, which will be classified as discontinued operations.

CommScope Holding Company, Inc.

Notes to Consolidated Financial Statements-(Continued)

(In millions, unless otherwise noted)

The following table presents the activity in goodwill by reportable segment.

2 unchanged sentences

Accumulated Impairment Losses

Additions (Deductions)

Foreign Exchange and Other

Accumulated Impairment Losses

(1) As of December 31, 2023, the CCS reportable segment goodwill balance of $ 2,140.4 million includes goodwill balances of $ 881.5 million and $ 1,258.9 million for the Building and Data Center Connectivity (BDCC) and Network Cable and Connectivity reporting units, respectively.

December, 31, 2022

1 unchanged sentence

Accumulated Impairment Losses

Additions (Deductions)

Foreign Exchange and Other

Accumulated Impairment Losses

CommScope Holding Company, Inc.

Notes to Consolidated Financial Statements-(Continued)

(In millions, unless otherwise noted)

During the annual impairment test performed in the fourth quarter of 2023 and in conjunction with the development of the Company's 2024 and long-range plans, CommScope continued to evaluate its ANS and BDCC reporting units' expected cash flows and market valuations.

The Company determined the goodwill balances in the ANS and BDCC reporting units were impaired and recorded partial impairment charges of $ 46.4 million and $ 99.1 million, respectively, in asset impairments in the Consolidated Statements of Operations.

Goodwill at December 31, 2022 reflects the reorganization of the Company’s segment structure, as disclosed in Note 1.

As a result of the new segment structure and certain other intrasegment realignments, as of January 1, 2024, the Company assessed goodwill for impairment due to changes in the composition of certain reporting units.

The Company performed impairment testing immediately before the change and after the change once goodwill was reallocated and determined that no goodwill impairment existed.

Additional goodwill of $ 5.2 million resulting from the Casa acquisition is included in the other activity above related to the ANS segment as of December 31, 2024.

During the third quarter of 2024, the Company completed an impairment analysis for goodwill recorded within the NICS reporting unit, which is impacted by the divestiture of the DAS business.

The quantitative assessment was used, and the Company determined that the fair value of the impacted reporting unit exceeded the carrying value and that no impairment existed immediately prior to or subsequent to allocating goodwill to the disposal group that includes the DAS business.

The Company allocated $ 113.5 million of goodwill to the disposal group based on the relative fair value of the DAS business as compared to the NICS reporting unit, along with $ 504.3 million of goodwill that was entirely attributable to its OWN reporting unit.

Total goodwill for the disposal group of $ 617.8 million has been classified as held for sale as of December 31, 2024.

During the annual impairment test performed in the fourth quarter of 2024, no goodwill impairments were identified.

During the annual impairment test performed in the fourth quarter of 2023 and in conjunction with the development of the Company’s 2024 and long-range plans, the Company determined the goodwill balances in the ANS and BDCC reporting units were impaired and recorded partial impairment charges of $ 46.4 million and $ 99.1 million, respectively, in asset impairments in the Consolidated Statements of Operations.

The impairment charges resulted from the Company’s assessment of further lower revenue growth and EBITDA margins in the fourth quarter of 2023, due to adverse impacts of market conditions on the current year profitability and estimated future business results and cash flows.

The ANS reporting unit is the same as the ANS segment, and the BDCC reporting unit is part of the CCS reportable segment.

See Note 10 for further discussion of the assumptions used in the valuation.

During the third quarter of 2023, the Company concluded that a triggering event occurred, primarily due to a sustained decrease in the market value of the Company’s debt and common stock affecting the overall business and changes in expected future cash flows due to reduced earnings forecasts and current macroeconomic conditions, including a rising interest rate environment.

The Company performed an interim quantitative goodwill impairment test for its ANS and BDCC reporting units, which were most sensitive to negative performance and outlook, to compare the fair values of the reporting units to their carrying amounts, including the goodwill.

As a result, the Company recorded a goodwill impairment charge of $ 425.9 million in asset impairments in the Consolidated Statements of Operations to partially write down the carrying amount of the ANS reporting unit goodwill in the ANS segment.

There was no impairment identified in the BDCC reporting unit.

As a result, the Company performed an interim quantitative goodwill impairment test for its ANS and BDCC reporting units and recorded a goodwill impairment charge of $ 425.9 million in asset impairments in the Consolidated Statements of Operations to partially write down the carrying amount of the goodwill in the ANS reporting unit.

There was no impairment identified in the BDCC reporting unit within the CCS reportable segment.

CommScope Holding Company, Inc.

Notes to Consolidated Financial Statements-(Continued)

(In millions, unless otherwise noted)

During the annual impairment test performed in the fourth quarter of 2022 and in conjunction with the development of its 2023 and long-range plans, the Company identified changes in the ANS reporting unit’s expected future cash flows due to various market trends expected to affect the business, including technology shifts affecting hardware sales, trends affecting bandwidth growth and other operational challenges, as well as an increase in the cost of capital.

2 unchanged sentences

Changes in projected revenue growth rates, projected EBITDA margin percentages or estimated discount rates due to uncertain market conditions, terminal growth rates, lower market multiples, loss of one or more key customers, changes in the Company’s strategy, changes in technology or other factors could negatively affect the fair value in one or more of the Company’s reporting units and result in a material impairment charge in the future.

See Note 11 for further discussion of the assumptions used in the valuations.

REVENUE FROM CONTRACTS WITH CUSTOMERS

7 unchanged sentences

Allowance for doubtful accounts, end of period

During the year ended December 31, 2022, the Company recorded an allowance for $ 20.9 million to reserve the balance due from a distributor in the OWN segment based on deterioration in the customer’s risk profile which is included in the provision line in the table above and in selling, general and administrative expense on the Consolidated Statements of Operations.

During the year ended December 31, 2023, the Company subsequently wrote off $ 18.5 million related to the balance.

CommScope Holding Company, Inc.

Notes to Consolidated Financial Statements-(Continued)

(In millions, unless otherwise noted)

Customer Contract Balances

17 unchanged sentences

Operating lease expense included period cost for short-term, cancellable and variable leases that were not included in lease liabilities of $ 22.6 million, $ 30.8 million and $ 34.7 million for the years ended December 31, 2024, 2023 and 2022, respectively.

CommScope Holding Company, Inc.

Notes to Consolidated Financial Statements-(Continued)

(In millions, unless otherwise noted)

The Company occasionally subleases all or a portion of certain unutilized real estate facilities.

15 unchanged sentences

Weighted average discount rate

CommScope Holding Company, Inc.

Notes to Consolidated Financial Statements-(Continued)

(In millions, unless otherwise noted)

Future minimum lease payments under non-cancellable leases as of December 31, 2024 are as follows:

2 unchanged sentences

imputed interest

CommScope Holding Company, Inc.

Notes to Consolidated Financial Statements-(Continued)

(In millions, unless otherwise noted)

SUPPLEMENTAL FINANCIAL STATEMENT INFORMATION

17 unchanged sentences

No interest was capitalized during the years ended December 31, 2024, 2023 or 2022.

CommScope Holding Company, Inc.

Notes to Consolidated Financial Statements-(Continued)

(In millions, unless otherwise noted)

Accrued and Other Liabilities

4 unchanged sentences

Product warranty accrual

Restructuring liabilities

Total accrued and other liabilities

CommScope Holding Company, Inc.

Notes to Consolidated Financial Statements-(Continued)

(In millions, unless otherwise noted)

Accumulated Other Comprehensive Loss

9 unchanged sentences

Other comprehensive loss

Amounts reclassified from AOCL

Balance at end of period

1 unchanged sentence

Balance at beginning of period

Other comprehensive income (loss)

Other comprehensive loss

Balance at end of period

Net AOCL at end of period

Amounts reclassified from net AOCL related to foreign currency translation and defined benefit plans are recorded in other income (expense), net in the Consolidated Statements of Operations.

Amounts reclassified from net AOCL related to foreign currency translation and defined benefit plans are recorded in other income, net in the Consolidated Statements of Operations.

Cash Flow Information

2 unchanged sentences

Income taxes, net of refunds

CommScope Holding Company, Inc.

Notes to Consolidated Financial Statements-(Continued)

(In millions, unless otherwise noted)

Non-cash investing activities:

Equity method investment from divestiture

7.125 % senior notes due July 2028

2 unchanged sentences

6.00 % senior notes due June 2025

9.50 % senior secured notes due December 2031

4.75 % senior secured notes due September 2029

6.00 % senior secured notes due March 2026

Senior secured term loan due December 2029

Senior secured term loan due April 2026

5 unchanged sentences

Total long-term debt

As of December 31, 2023, the Company had outstanding two series of senior secured notes:

CommScope Holding Company, Inc.

Notes to Consolidated Financial Statements-(Continued)

(In millions, unless otherwise noted)

On December 17, 2024, the Company completed certain refinancing transactions (the Transactions), including (i) the issuance and sale of $ 1,000.0 million in aggregate principal amount of 9.500 % senior secured notes due 2031 (the 2031 Secured Notes) , (ii) entry into the senior secured term loan facility due December 2029 (the 2029 Term Loan) with an initial aggregate principal amount of $ 3,150.0 million and (iii) the effectiveness of ABL Amendment No.

3 (as defined below).

The Company used the net proceeds from the Transactions, together with cash on hand and borrowings under the asset-based revolving credit facility (the Revolving Credit Facility) , to (i) refinance in full the Company’s existing senior secured term loan facility due April 2026 (the 2026 Term Loan), (ii) redeem all of the approximately $ 1,274.6 million in outstanding aggregate principal amount of 6.000 % senior notes due 2025 (the 2025 Notes) issued by CommScope Technologies LLC (CommScope Technologies), a wholly owned indirect subsidiary of the Company, and satisfy and discharge the related indenture and (iii) pay fees and expenses related to the foregoing.

In connection with the refinancing, the Company capitalized approximately $ 59.4 million of original issuance discount and $33.1 million of debt issuance costs.

In addition, the Company incurred $6.4 million of debt issuance costs which were included in other income, net in the Consolidated Statements of Operations for the year ended December 31, 2024.

For the year ended December 31, 2024, the Company wrote-off $ 16.2 million of existing debt issuance costs and original issuance discount associated with the redemption of the 2025 Notes and refinancing of the 2026 Term Loan related to certain lenders who were not parties to the refinancing, which were included as interest expense in the Consolidated Statements of Operations.

During the year ended December 31, 2024 , the Company made scheduled amortization payments totaling $ 24.0 million due in equal quarterly installments on the 2026 Term Loan prior to the refinancing.

As of December 31, 2024 , the Company had outstanding three series of senior secured notes:

(1) $ 1,000.0 million of the 2031 Secured Notes issued by CommScope, LLC ;

(2) $ 1,250.0 million of 4.75 % senior secured notes due September 1, 2029 (the 2029 Secured Notes) issued by CommScope, LLC (f/k/a CommScope, Inc.) in August 2021;

and (2) $ 1.5 billion of 6.00 % senior secured notes due March 1, 2026 issued by CommScope, LLC in February 2019 (the 2026 Secured Notes and, together with the 2029 Secured Notes, the Secured Notes).

As of December 31, 2023, the Company had outstanding four series of senior unsecured notes:

and (3) $ 1,500.0 million of 6.00 % senior secured notes due March 1, 2026 issued by CommScope, LLC in February 2019 (the 2026 Secured Notes and, together with the 2029 Secured Notes and the 2031 Secured Notes, collectively, the Secured Notes).

As of December 31, 2024, the Company had outstanding three series of senior unsecured notes:

(1) $ 700.0 million initial aggregate principal amount of 7.125 % senior notes due July 1, 2028 (the 2028 Notes) issued by CommScope, LLC in July 2020;

(2) $ 750.0 million initial aggregate principal amount of 5.00 % senior notes due March 15, 2027 issued by CommScope Technologies LLC (CommScope Technologies), a wholly owned subsidiary of the Company, in March 2017 (the 5.00 % 2027 Notes);

(3) $ 1.3 billion initial aggregate principal amount of 6.00 % senior notes due June 15, 2025 issued by CommScope Technologies in June 2015 (the 2025 Notes, and together with the 5.00 % 2027 Notes, the CommScope Technologies Notes);

and (4) $ 1.0 billion initial aggregate principal amount of 8.25 % senior notes due March 1, 2027 issued by CommScope, LLC in February 2019 (the 8.25 % 2027 Notes and, together with the 2028 Notes, the CommScope, LLC Notes;

the Secured Notes, the CommScope Technologies Notes and the CommScope, LLC Notes, collectively, the Senior Notes).

(2) $ 750.0 million initial aggregate principal amount of 5.00 % senior notes due March 15, 2027 issued by CommScope Technologies in March 2017 (the 5.00 % 2027 Notes);

and (3) $ 1,000.0 million initial aggregate principal amount of 8.25 % senior notes due March 1, 2027 ( 8.25 % 2027 Notes) issued by CommScope, LLC in February 2019 (the 8.25 % 2027 Notes and, together with the 2028 Notes, collectively, the CommScope, LLC Notes;

the Secured Notes, the 5.00 % 2027 Notes and the CommScope, LLC Notes, collectively, the Senior Notes).

The indentures governing the Senior Notes contain covenants that restrict the ability of CommScope, LLC and its restricted subsidiaries to, among other things, incur additional debt, make certain payments, including payment of dividends (except, in the case of the CommScope, LLC Notes and the Secured Notes, with respect to the Convertible Preferred Stock) or repurchases of equity interests of CommScope, LLC or the applicable issuer, make loans or acquisitions or capital contributions and certain investments, incur certain liens, sell assets, merge or consolidate or liquidate other entities and enter into certain transactions with affiliates.

4 unchanged sentences

(In millions, unless otherwise noted)

4.75 % Senior Secured Notes due 2029 and 6.00 % Senior Secured Notes due 2026 (the Secured Notes)

The 2029 Secured Notes mature on September 1, 2029 and the 2026 Secured Notes mature on March 1, 2026 .

Interest is payable on the Secured Notes semi-annually in arrears on March 1 and September 1 of each year.

9.50 % Senior Secured Notes due December 2031, 4.75 % Senior Secured Notes due 2029 and 6.00 % Senior Secured Notes due 2026 (the Secured Notes)

The 2031 Secured Notes mature on December 15, 2031, the 2029 Secured Notes mature on September 1, 2029 and the 2026 Secured Notes mature on March 1, 2026 .

Interest is payable on the 2031 Secured Notes semi-annually in arrears on June 15 and December 15 of each year, commencing on June 15, 2025.

Interest is payable on the 2029 Secured Notes and 2026 Secured Notes semi-annually in arrears on March 1 and September 1 of each year.

The Secured Notes are guaranteed on a senior secured basis by the Company and each of CommScope, LLC’s existing and future wholly owned domestic restricted subsidiaries that is an obligor under the senior secured credit facilities or certain other debt, subject to certain exceptions.

The Secured Notes and the related guarantees are secured on a first-priority basis by security interests in all of the assets that secure indebtedness under the 2026 Term Loan on a first-priority basis, and on a second-priority basis in all assets that secure the Revolving Credit Facility (as defined below) on a first-priority basis and the 2026 Term Loan on a second-priority basis.

Certain foreign subsidiaries of CommScope, LLC organized in the United Kingdom, Ireland and the Netherlands are required to, and will, be added as subsidiary guarantors to the Secured Notes pursuant to the terms of the 2031 Secured Notes.

The Secured Notes and the related guarantees are secured on a first-priority basis by security interests in all of the assets that secure indebtedness under the 2029 Term Loan on a first-priority basis, and on a second-priority basis in all assets that secure the Revolving Credit Facility on a first-priority basis and the 2029 Term Loan on a second-priority basis.

The Secured Notes and the related guarantees rank senior in right of payment to all of CommScope, LLC’s and the guarantors’ subordinated indebtedness and equally in right of payment with all of CommScope, LLC’s and the guarantors’ senior indebtedness (without giving effect to collateral arrangements), including the senior secured credit facilities and the other Senior Notes.

3 unchanged sentences

The Secured Notes may be redeemed prior to maturity under certain circumstances.

Upon certain change of control events, the Secured Notes may be redeemed at the option of the holders at 101 % of their face amount, plus accrued and unpaid interest.

The 2029 Secured Notes may be redeemed on or after September 1, 2024 by CommScope, LLC at the redemption prices specified in the indenture governing the 2029 Secured Notes.

Prior to September 1, 2024 , the 2029 Secured Notes may be redeemed by CommScope, LLC at a redemption price equal to 100 % of their principal amount, plus a make-whole premium (as specified in the indenture governing the 2029 Secured Notes), plus accrued and unpaid interest.

Prior to September 1, 2024 , under certain circumstances, CommScope, LLC may also redeem up to 40 % of the aggregate principal amount of the 2029 Secured Notes at a redemption price of 104.750 %, plus accrued and unpaid interest, using the proceeds of certain equity offerings.

At any time prior to September 1, 2024 , CommScope, LLC may redeem during each calendar year up to 10.0 % of the aggregate principal amount of the 2029 Secured Notes at a redemption price equal to 103.0 % of the aggregate principal amount of the 2029 Secured Notes to be redeemed, plus accrued and unpaid interest, if any, to, but not including, the date of redemption.

The 2026 Secured Notes may be redeemed by CommScope, LLC at the redemption prices specified in the indenture governing the 2026 Secured Notes.

Upon certain change of control events, the 2031 Secured Notes may be redeemed at the option of the holders at 100 % of the principal amount, plus accrued and unpaid interest.

The 2031 Secured Notes may be redeemed on or after June 15, 2026 by CommScope, LLC at the redemption prices specified in the indenture governing the 2031 Secured Notes.

Prior to June 15, 2026 , the 2031 Senior Notes may be redeemed at a redemption price of 100 %, plus a make-whole premium (as specified in the indenture governing the 2031 Senior Notes), plus accrued and unpaid interest.

At any time prior to June 15, 2025 , the 2031 Senior Notes may be redeemed at a redemption price of 103 % of the aggregate principal amount of the 2031 Senior Notes to be redeemed, plus accrued and unpaid interest, in an amount up to $ 500.0 million, where the redemption payment is made from proceeds from the issuance of certain preferred stock or common equity interests of the Company.

Upon certain change of control events, the 2029 Secured Notes and the 2026 Senior Notes may be redeemed at the option of the holders at 101 % of their face amount, plus accrued and unpaid interest.

The 2029 Secured Notes and the 2026 Secured Notes may be redeemed by CommScope, LLC at the redemption prices specified in the indenture governing the 2029 Secured Notes or 2026 Secured Notes , as applicable.

In connection with the sale of the OWN segment and the DAS business unit of the NICS segment as described in Note 20 in these consolidated financial statements, CommScope, LLC redeemed all of the 2026 Secured Notes and satisfied and discharged the related indenture and repaid a portion of the 2029 Secured Notes.

CommScope Holding Company, Inc.

Notes to Consolidated Financial Statements-(Continued)

(In millions, unless otherwise noted)

In connection with issuing the 2031 Secured Notes, the Company incurred debt issuance costs of $ 8.0 million and original issue discount of $ 20.0 million dur ing the year ended December 31, 2024 which were recorded as a reduction of the carrying amount of the debt and are being amortized over the term of the 2031 Secured Notes.

The Company also incurred debt issuance costs of $ 1.5 million, reflected in other income, net in the Consolidation Statements of Operations, during the year ended December 31, 2024.

7.125% Senior Notes due 2028 and 8.25% Senior Notes due 2027 (the CommScope, LLC Notes)

9 unchanged sentences

The 8.25% 2027 Notes may be redeemed by CommScope, LLC at the redemption prices specified in the indenture governing the 8.25% 2027 Notes.

5.00% Senior Notes due 2027

The 5.00 % 2027 Notes mature on March 15, 2027 .

Interest is payable on the 5.00% 2027 Notes semi-annually in arrears on March 15 and September 15 of each year.

The 5.00% 2027 Notes are guaranteed on a senior unsecured basis by CommScope, LLC and each of CommScope, LLC’s existing and future wholly owned domestic restricted subsidiaries (other than CommScope Technologies) that is an obligor under the senior secured credit facilities or certain other capital markets debt, subject to certain exceptions.

The 5.00% 2027 Notes and the related guarantees rank senior in right of payment to all of CommScope Technologies’ and the guarantors’ subordinated indebtedness and equally in right of payment with all of CommScope Technologies’ and the guarantors’ senior indebtedness (without giving effect to collateral arrangements), including the senior secured credit facilities and the other Senior Notes.

The 5.00% 2027 Notes and the related guarantees are effectively junior to all of CommScope Technologies’ and the guarantors’ existing and future secured indebtedness, including the Secured Notes and the senior secured credit facilities, to the extent of the value of the assets securing such secured indebtedness.

In addition, the 5.00% 2027 Notes and related guarantees are structurally subordinated to all existing and future liabilities (including trade payables) of CommScope, LLC’s subsidiaries that do not guarantee the 5.00% 2027 Notes.

The 5.00% 2027 Notes may be redeemed prior to maturity under certain circumstances.

Upon certain change of control events, the 5.00% 2027 Notes may be redeemed at the option of the holders at 101 % of their principal amount, plus accrued and unpaid interest.

The 5.00% 2027 Notes may be redeemed by CommScope Technologies at the redemption prices specified in the indenture governing the 5.00% 2027 Notes.

CommScope Holding Company, Inc.

1 unchanged sentence

(In millions, unless otherwise noted)

During the year ended December 31, 2023, the Company repurchased $ 58.4 million and $ 133.1 million aggregate principal amounts of the 2028 Notes and 2027 Notes, respectively, which resulted in gains on the early extinguishment of debt of $ 73.1 million reflected in other income (expense), net, and the write-off of debt issuance costs of $ 1.8 million reflected in interest expense, in the Consolidated Statements of Operations.

See the “Other Matters” section below for the summarized debt repurchase activity for the year ended December 31, 2023.

5.00% Senior Notes due 2027 and 6.00% Senior Notes due 2025 (the CommScope Technologies Notes)

The 5.00 % 2027 Notes mature on March 15, 2027 and the 2025 Notes mature on June 15, 2025 .

Interest is payable on the 5.00% 2027 Notes semi-annually in arrears on March 15 and September 15 of each year and on the 2025 Notes on June 15 and December 15 of each year.

The CommScope Technologies Notes are guaranteed on a senior unsecured basis by CommScope, LLC and each of CommScope, LLC’s existing and future wholly owned domestic restricted subsidiaries (other than CommScope Technologies) that is an obligor under the senior secured credit facilities or certain other capital markets debt, subject to certain exceptions.

The CommScope Technologies Notes and the related guarantees rank senior in right of payment to all of CommScope Technologies’ and the guarantors’ subordinated indebtedness and equally in right of payment with all of CommScope Technologies’ and the guarantors’ senior indebtedness (without giving effect to collateral arrangements), including the senior secured credit facilities and the other Senior Notes.

The CommScope Technologies Notes and the related guarantees are effectively junior to all of CommScope Technologies’ and the guarantors’ existing and future secured indebtedness, including the Secured Notes and the senior secured credit facilities, to the extent of the value of the assets securing such secured indebtedness.

In addition, the CommScope Technologies Notes and related guarantees are structurally subordinated to all existing and future liabilities (including trade payables) of CommScope, LLC’s subsidiaries that do not guarantee the CommScope Technologies Notes.

The CommScope Technologies Notes may be redeemed prior to maturity under certain circumstances.

Upon certain change of control events, the CommScope Technologies Notes may be redeemed at the option of the holders at 101 % of their principal amount, plus accrued and unpaid interest.

The 5.00% 2027 Notes may be redeemed by CommScope Technologies at the redemption prices specified in the indenture governing the 5.00% 2027 Notes.

The 2025 Notes may be redeemed by CommScope Technologies at the redemption prices specified in the indenture governing the 2025 Notes.

During the year ended December 31, 2023, the Company repurchased $ 25.4 million aggregate principal amount of the 2025 Notes, which resulted in gains on the early extinguishment of debt of $ 1.2 million reflected in other income (expense), net, and the write-off of debt issuance costs of $ 0.2 million reflected in interest expense, in the Consolidated Statements of Operations.

See the “Other Matters” section below for the summarized debt repurchase activity for the year ended December 31, 2023.

Senior Secured Credit Facilities

Senior Secured Term Loan due 2029

The 2026 Term Loan has scheduled amortization payments of $ 32.0 million per year due in equal quarterly installments, which began with the quarter ended December 31, 2019, with the balance due at maturity ( April 2026 ).

On June 8, 2023, the Company amended its 2026 Term Loan to transition from the Eurodollar Rate based on LIBOR to SOFR, effective as of July 1, 2023, as the reference interest rate in anticipation of the cessation of LIBOR in 2023.

As a result, the 2026 Term Loan bears interest at (1) an adjusted Term SOFR rate, subject to certain adjustments, plus an applicable margin of 3.25 % or (2) at the option of the Company, a base rate plus an applicable margin of 2.25 %.

Subject to certain conditions, the 2026 Term Loan may be increased or a new incremental term loan facility may be added to increase the capacity by up to the sum of the greater of $ 950.0 million and 50 % of Consolidated EBITDA, as defined in the credit agreement governing the 2026 Term Loan (the Credit Agreement), plus an unlimited amount as long as on a pro forma basis the Company meets certain net leverage ratios or fixed charge ratios as defined in the Credit Agreement.

CommScope Holding Company, Inc.

Notes to Consolidated Financial Statements-(Continued)

(In millions, unless otherwise noted)

CommScope, LLC may voluntarily prepay loans under the 2026 Term Loan, subject to minimum amounts, with prior notice but without premium or penalty.

On December 17, 2024, the Company entered into a term loan agreement providing the new 2029 Term Loan which will mature in December 2029.

Borrowings under the 2029 Term loan will not amortize and will be due at final maturity.

T he 2029 Term Loan bears interest at (1) an adjusted Term SOFR rate, subject to certain adjustments, plus an applicable margin between 4.50 % and 5.50 % or (2) at the option of the Company, a base rate plus an applicable margin between 3.50 % to 4.50 %.

The applicable margins were subsequently reduced by 25 basis points after repayment of certain indebtedness in connection with the sale of the OWN segment and the DAS business unit of the NICS segment as described in Note 20 in these consolidated financial statements.

The 2029 Term Loan is subject to a Term SOFR floor of 2.00 %.

Subject to certain conditions, the 2029 Term Loan may be increased or a new incremental term loan facility may be added to increase the capacity by an unlimited amount as long as on a pro forma basis the Company ’s first lien net leverage ratio does not exceed 4.00 :1.00.

CommScope, LLC may voluntarily prepay loans under the 2029 Term Loan, subject to minimum amounts, with prior notice , subject to a prepayment premium (other than in connection with a change of control or permitted disposition) equal to:

(1) a customary make-whole premium for any prepayments within 18 months of the closing date of the 2029 Term Loan (or a 3.0 % premium with respect to any prepayments in the first six months using the proceeds of a new equity issuance);

(2) a 3.0 % premium on amounts prepaid from and after 18 months after the closing date of the 2029 Term Loan and prior to 30 months after the closing date of the 2029 Term Loan;

or (3) a 1.0 % premium on amounts prepaid from and after 30 months after the closing date of the 2029 Term Loan and prior to 42 months after the closing date of the 2029 Term Loan.

CommScope, LLC must prepay the 2029 Term Loan with the net cash proceeds of certain asset sales, the incurrence or issuance of specified refinancing indebtedness and 50 % of excess cash flow (such percentage subject to reduction based on the achievement of specified Consolidated First Lien Net Leverage Ratios), in each case, subject to certain reinvestment rights and other exceptions.

3 unchanged sentences

The 2029 Term Loan is secured by a lien on substantially all of CommScope, LLC’s and the guarantors’ current and fixed assets (subject to certain exceptions), and the 2029 Term Loan has a first-priority lien on all fixed assets and a second-priority lien on all current assets (second in priority to the liens securing the Revolving Credit Facility), in each case, subject to other permitted liens.

The 2026 Term Loan contains customary negative covenants consistent with those applicable to the 2026 Secured Notes, including, but not limited to, restrictions on the ability of CommScope, LLC and its subsidiaries to merge and consolidate with other companies, incur indebtedness, grant liens or security interests on assets, pay dividends (except with respect to the Convertible Preferred Stock) or make other restricted payments, sell or otherwise transfer assets or enter into certain transactions with affiliates.

Certain foreign subsidiaries of CommScope, LLC organized in the United Kingdom, Ireland and the Netherlands will become Subsidiary Guarantors.

Additional foreign subsidiaries of CommScope, LLC may be added as Subsidiary Guarantors in the future.

The 2029 Term Loan contains customary negative covenants that limit CommScope, LLC's (and its subsidiaries’) ability to, among other things:

(i) incur additional debt or issue certain preferred stock;

(ii) pay dividends, redeem stock or make other distributions;

(iii) make other restricted payments or investments;

(iv) grant liens or security interests on assets;

(v) transfer or sell assets;

(vi) create restrictions on payment of dividends or other amounts to CommScope, LLC by CommScope, LLC’s subsidiaries;

(vii) engage in mergers or consolidations;

or (viii) engage in certain transactions with affiliates.

The 2029 Term Loan provides that, upon the occurrence of certain events of default, the obligations thereunder may be accelerated.

Such events of default will include payment defaults, material inaccuracies of representations and warranties, covenant defaults, cross-defaults to other material indebtedness, voluntary and involuntary bankruptcy proceedings, material money judgments, material pension-plan events, change of control and other customary events of default.

During the year ended December 31, 2023 , the Company made scheduled amortization payments totaling $ 32.0 million due in equal quarterly installments on the 2026 Term Loan.

The current portion of long-term debt reflects $ 32.0 million of repayments due under the 2026 Term Loan.

Such events of default will include payment defaults to the lenders thereunder, material inaccuracies of representations and warranties, covenant defaults, cross-defaults to other material indebtedness, voluntary and involuntary bankruptcy proceedings, material money judgments, material pension-plan events, change of control and other customary events of default.

No portion of the 2029 Term Loan was reflected as a current portion of long-term debt as of December 31, 2024 related to the potentially required excess cash flow payment because no such payment is expected to be required.

3 unchanged sentences

(In millions, unless otherwise noted)

In connection with entering into the new 2029 Term Loan, the Company incurred debt issuance costs of $25.1 million and original issue discount of $ 39.4 million during the year ended December 31, 2024 which were recorded as a reduction of the carrying amount of the debt and are being amortized over the term of the 2029 Term Loan.

The Company also incurred debt issuance costs of $4.9 million, reflected in other income, net in the Consolidated Statements of Operations, during the year ended December 31, 2024.

Senior Secured Revolving Credit Facility

On October 19, 2022, the Company completed the refinancing (the Refinancing) of the Company’s asset-based revolving credit facility (Revolving Credit Facility) which continues to provide borrowing capacity of up to $ 1.0 billion, subject to certain limitations, available to CommScope, LLC and its U.S.

On December 17, 2024, the Company amended its Revolving Credit Facility agreement which permits the 2029 Term Loan and 2031 Secured Notes to be guaranteed by foreign subsidiary guarantors that will also become borrowers or guarantors under the Revolving Credit Facility agreement on a post-closing basis, and to permit such entities to grant liens on their assets to secure such obligations.

The amendment also removed the ability to have a Swiss borrowing base (as defined in the credit agreement governing the Revolving Credit Facility) and includes an obligation to reduce the committed amount from $ 1.0 billion to $ 750.0 million.

The Revolving Credit Facility provides borrowing capacity of up to $ 750.0 million, subject to certain limitations, available to CommScope, LLC and its U.S.

subsidiaries designated as co-borrowers (the U.S.

Revolving Borrowers).

The Refinancing, among other things, (i) refinanced in full all existing loans outstanding under the Revolving Credit Facility immediately prior to the Refinancing, (ii) extended the maturity of the Revolving Credit Facility from April 2024 to the earliest of (x) September 30, 2027, (y) the date the commitments of the lenders under the agreement governing the Revolving Credit Facility are reduced to zero and (z) 91 days prior to the maturity date of any other indebtedness of a “Credit Party” (as defined in the credit agreement governing the Revolving Credit Facility) that has a scheduled maturity or weighted average life to maturity that is prior to September 30, 2027 (subject to certain exceptions) and (iii) replaced the existing revolving loan commitments outstanding under the Revolving Credit Facility immediately prior to the Refinancing with a new tranche of commitments (the Tranche A Revolving Commitments) for borrowings denominated in U.S.

dollars, euros and pounds sterling made to the U.S.

Revolving Borrowers and a separate tranche of commitments (the Tranche B Revolving Commitments) for borrowings denominated in euros, pounds sterling and Swiss francs made to the U.S.

Revolving Borrowers and certain of the Company’s wholly owned Irish, English and Swiss subsidiaries that are joined as borrowers under the Revolving Credit Facility (such subsidiaries, the European Revolving Borrowers and, together with the U.S.

Revolving Borrowers, the Revolving Borrowers).

Prior to the joinder of any European Revolving Borrower, Tranche A Loans are available to the U.S.

Revolving Borrowers in an aggregate amount equal to (i) the lesser of (x) $ 1.0 billion and (y) the borrowing base of the U.S.

Revolving Borrowers minus (ii) the aggregate amount of all “Tranche A Revolving Credit Outstandings” (as defined in the credit agreement governing the Revolving Credit Facility).

From and after the joinder of any European Revolving Borrower, the Revolving Borrowers may reallocate an amount of the Tranche A Revolving Commitments to Tranche B Revolving Commitments, and Tranche B Loans will then be available to the Revolving Borrowers in an amount equal to (i) the lesser of (x) the Tranche B Revolving Commitments and (y) the sum of the borrowing base of the European Revolving Borrowers minus (ii) the aggregate amount of all “Tranche B Revolving Credit Outstandings” (as defined in the credit agreement governing the Revolving Credit Facility).

At no time will the aggregate commitments of the lenders under the Revolving Credit Facility exceed $ 1.0 billion.

Borrowing base calculations are based on the sum of specific percentages of eligible accounts receivable and eligible inventory, minus the amount of any applicable reserves.

The ability to draw under the Revolving Credit Facility or issue letters of credit is conditioned upon, among other things, delivery of prior written notice of a borrowing or issuance, as applicable, the ability of the Revolving Borrowers to reaffirm the representations and warranties contained in the credit agreement governing the Revolving Credit Facility and the absence of any default or event of default.

As of December 31, 2023, the Company had no outstanding borrowings under the Revolving Credit Facility and had availability of $ 688.0 million, after giving effect to borrowing base limitations and outstanding letters of credit.

As of December 31, 2024 , the Company had $ 200.0 million of outstanding borrowings under the Revolving Credit Facility and had availability of $ 449.3 million, after giving effect to borrowing base limitations and outstanding letters of credit.

Letters of credit under the Revolving Credit Facility are limited to the lesser of (x) $ 250.0 million and (y) the aggregate unused amount of commitments under the Revolving Credit Facility then in effect.

12 unchanged sentences

The Revolving Credit Facility has a first-priority lien on all current assets and a second-priority lien on all fixed assets (second in priority to the liens securing the 2029 Secured Notes, the 2026 Secured Notes and the 2026 Term Loan), in each case, subject to other permitted liens.

CommScope Holding Company, Inc.

Notes to Consolidated Financial Statements-(Continued)

(In millions, unless otherwise noted)

The following fees are applicable under the Revolving Credit Facility:

4 unchanged sentences

The Revolving Borrowers will be required to make prepayments under the Revolving Credit Facility at any time when, and to the extent that, the aggregate amount of the outstanding loans and letters of credit under the Revolving Credit Facility exceeds the lesser of the aggregate amount of commitments in respect of the Revolving Credit Facility and the borrowing base.

CommScope Holding Company, Inc.

Notes to Consolidated Financial Statements-(Continued)

(In millions, unless otherwise noted)

The Revolving Credit Facility contains customary covenants, including, but not limited to, restrictions on the ability of CommScope, LLC and its subsidiaries to merge and consolidate with other companies, incur indebtedness, grant liens or security interests on assets, make acquisitions, loans, advances or investments, pay dividends (except with respect to the Convertible Preferred Stock), sell or otherwise transfer assets, optionally prepay or modify terms of any junior indebtedness, enter into certain transactions with affiliates or change lines of business.

5 unchanged sentences

Other Matters

The table below summarizes the debt repurchase activity during the year ended December 31, 2023:

Reacquisition

7.125 % senior notes due July 2028

8.25 % senior notes due March 2027

6.00 % senior notes due June 2025

For the year ended December 31, 2023, the repurchase of debt resulted in gains on the early extinguishment of debt of $ 74.3 million reflected in other income (expense), net , and the write-off of debt issuance costs of $ 2.0 million reflected in interest expense, in the Consolidated Statements of Operations.

The following table summarizes scheduled maturities of long-term debt as of December 31, 2024:

2 unchanged sentences

All amounts presented exclude intercompany balances.

CommScope Holding Company, Inc.

Notes to Consolidated Financial Statements-(Continued)

(In millions, unless otherwise noted)

The Company is dependent upon the earnings and cash flow of its subsidiaries to make certain payments, including debt and interest payments.

4 unchanged sentences

The Company uses forward contracts to hedge a portion of its balance sheet foreign exchange re-measurement risk and to hedge certain planned foreign currency expenditures.

As of December 31, 2023, the Company had foreign exchange contracts outstanding with maturities of up to nine months and aggregate notional values of $ 630.1 million (based on exchange rates as of December 31, 2023).

As of December 31, 2024 , the Company had foreign exchange contracts outstanding with maturities of up to four months and aggregate notional values of $ 123.6 million (based on exchange rates as of December 31, 2024).

The following table presents the balance sheet location and fair value of the Company’s derivatives not designated as hedging instruments:

7 unchanged sentences

hedging instruments

CommScope Holding Company, Inc.

Notes to Consolidated Financial Statements-(Continued)

(In millions, unless otherwise noted)

The pretax impact of the foreign currency forward contracts, both matured and outstanding, on the Consolidated Statements of Operations is as follows:

1 unchanged sentence

Location of Gain (Loss)

Other income (expense), net

Other income, net

Derivative Instruments Designated as Cash Flow Hedges of Interest Rate Risk

The Company has utilized a hedging strategy to mitigate a portion of the exposure to changes in cash flows resulting from variable interest rates on the 2026 Term Loan.

In conjunction with the amendment to its 2026 Term Loan due to reference rate reform, on June 28, 2023, the Company settled its cash flow hedges with a notional value of $ 300.0 million and received cash of $ 6.8 million which is included within operating cash flow activity in accordance with the Company’s accounting policy.

The cash flow hedges were derecognized, and the gain of $ 6.1 million remaining as a component of accumulated comprehensive loss in the Consolidated Balance Sheets continues to be reclassified to earnings through interest expense as the interest payments are made on the 2026 Term Loan unless the forecasted hedged transaction becomes probable of not occurring.

See Note 8 for further discussion of the amendment to the 2026 Term Loan.

Following the amendment to the 2026 Term Loan and settlement of the cash flow hedges noted above, during the third quarter of 2023, the Company reenacted its hedging strategy to mitigate the interest rate risk from its variable rate debt, initially associated with its amended 2026 Term Loan and extending to future borrowings or debt issued, to fix a portion of the future interest cash flows by designating qualifying receive-variable and pay-fixed interest rate swaps as a cash flow hedge for accounting and financial reporting purposes.

The total notional amount of the interest rate swap derivatives as of December 31, 2023 was $ 700.0 million with outstanding maturities up to thirty-one months .

The hedging strategy extends to future borrowings or debt issued, to fix a portion of the future interest cash flows by designating qualifying receive-variable and pay-fixed interest rate swaps as a cash flow hedge for accounting and financial reporting purposes.

In June 2023, and in conjunction with the amendment to the 2026 Term Loan due to reference rate reform, the Company settled and derecognized its cash flow hedges.

A gain of $ 6.1 million remaining as a component of accumulated comprehensive loss in the Consolidated Balance Sheets continued to be reclassified to earnings through interest expense as the interest payments continued to be made on the 2026 Term Loan through December 17, 2024, at which time as a result of the refinancing transactions, the forecasted hedge transaction was no longer probable of occurring which resulted in a gain of $ 3.1 million being reclassified to earnings as an adjustment to interest expense.

The Company reenacted its hedging strategy in the third quarter of 2023, by entering into new interest rate swap derivatives with a total notional amount of $ 700 million which terminate on July 31, 2026 .

As a result of the refinancing transaction and changes in the terms of the 2029 Term Loan, the Company dedesignated its interest rate swaps as of December 17, 2024 and redesignated $ 700 million of the swaps as hedging instruments on the same day.

As a result, the Company will reclassify the frozen amount out of accumulated other comprehensive income (loss) into earnings through the December 2029 maturity of the new 2029 Term Loan or until terminated, and recognize the excluded component (i.e., off-market component of the swap) through earnings over the same period, which offset.

The Company believes that floating rate debt in the amount of $ 700 million will exist through the interest rate swaps' maturity in July 2026 and therefore, will continue to apply hedge accounting to the interest rate swaps.

The total notional amount of the interest rate swap derivatives as of December 31, 2024 was $ 700.0 million with outstanding maturities up to nineteen months .

There was no ineffectiveness on the instruments designated as cash flow hedges for the years ended December 31, 2024, 2023 or 2022.

CommScope Holding Company, Inc.

Notes to Consolidated Financial Statements-(Continued)

(In millions, unless otherwise noted)

The following table presents the balance sheet location and fair value of the derivative instruments designated as cash flow hedges of interest rate risk:

11 unchanged sentences

Other comprehensive income (loss), net of tax

CommScope Holding Company, Inc.

Notes to Consolidated Financial Statements-(Continued)

(In millions, unless otherwise noted)

FAIR VALUE MEASUREMENTS

7 unchanged sentences

Foreign currency contracts

Interest rate swap contracts

7.125% senior notes due 2028

4 unchanged sentences

4.75% senior secured notes due 2029

6.00% senior secured notes due 2026

Senior secured term loan due 2029

Senior secured term loan due 2026

Senior secured revolving credit facility

Foreign currency contracts

Interest rate swap contracts

CommScope Holding Company, Inc.

Notes to Consolidated Financial Statements-(Continued)

(In millions, unless otherwise noted)

Non-Recurring Fair Value Measurements

The Company recorded the assets acquired and liabilities assumed from the Casa Transaction during the second quarter of 2024, as well as the respective measurement adjustments in the third and fourth quarters of 2024.

The fair values were determined using Level 3 valuation inputs.

See Note 3 in these consolidated financial statements.

During the first quarter of 2024, the Company recognized a loss on impairment of unutilized real estate within restructuring costs, net on the Condensed Consolidated Statements of Operations.

The fair value was determined using Level 3 valuation inputs.

See Note 12 in these consolidated financial statements.

During the annual impairment test in the fourth quarter of 2023 , a goodwill impairment charge of $ 46.4 million was recorded related to the ANS reporting unit which is the same as the ANS segment, and $ 99.1 million was recorded related to the BDCC reporting unit which is part of the CCS segment.

The fair value of the reporting unit was determined using a discounted cash flow (DCF) model and a guideline public company approach, with 75 % of the value determined using the DCF model and 25 % of the value determined using the guideline public company approach.

Under the DCF method, the fair value of a reporting unit is based on the present value of estimated future cash flows.

Under the guideline public company method, the fair value is based upon market multiples of revenue and earnings derived from publicly-traded companies with similar operating and investment characteristics as the reporting unit.

The inputs to both the DCF model and the guideline public company analysis are Level 3 valuation inputs.

Changes in any of these inputs, among other factors, could negatively affect the fair value of the ANS and BDCC reporting units and result in a material impairment charge in the future.

The fair value of each reporting unit was determined using Level 3 valuation inputs with an approach consistent with the 2023 annual impairment test.

In the third quarter of 2023, a goodwill impairment charge of $ 425.9 million was recorded related to the ANS reporting unit.

The fair value of each reporting unit was determined using Level 3 valuation inputs with an approach consistent with the 2023 annual impairment test.

CommScope Holding Company, Inc.

Notes to Consolidated Financial Statements-(Continued)

(In millions, unless otherwise noted)

During the annual impairment test in the fourth quarter of 2022, a goodwill impairment charge of $ 1,119.6 million was recorded related to the ANS reporting unit.

10 unchanged sentences

Corporate and other

The corporate and other line item above reflects general corporate restructuring costs that were previously allocated to the Home segment.

These indirect expenses have been classified as continuing operations for all periods presented since the costs were not directly attributable to the discontinued operations of the Home business.

These costs will be reallocated to the Company’s remaining segments in future years.

CommScope Holding Company, Inc.

Notes to Consolidated Financial Statements-(Continued)

(In millions, unless otherwise noted)

The corporate and other line item above reflects general corporate restructuring costs that were previously allocated to the OWN segment, DAS business unit and Home segment.

These indirect expenses have been classified as continuing operations for all periods presented since the costs were not directly attributable to these discontinued operations.

Beginning in the first quarter of 2024, the corporate and other costs related to the Home segment have been reallocated to the Company’s remaining segments and partially offset by income from the Vantiva TSA.

The corporate and other costs related to the OWN segment and DAS business unit will be reallocated to the Company’s remaining segments beginning in the first quarter of 2025.

Restructuring liabilities were included in the Company’s Consolidated Balance Sheets as follows:

2 unchanged sentences

Total restructuring liabilities

CommScope Holding Company, Inc.

Notes to Consolidated Financial Statements-(Continued)

(In millions, unless otherwise noted)

CommScope NEXT Restructuring Actions

5 unchanged sentences

Balance at December 31, 2022

Additional expense, net

Additional expense (reversals), net

Cash received (paid)

Foreign exchange and other non-cash items

Balance at December 31, 2023

Additional expense (income), net

Cash received (paid)

Additional expense, net

Third-party indemnification receivable (1)

Foreign exchange and other non-cash items

Balance at December 31, 2024

(1) Reflects the reimbursement of severance and other costs from a third-party, for which the Company was obligated to pay.

CommScope NEXT actions to date have included the closure of manufacturing, administration and warehouse facilities as well as headcount reductions in other manufacturing locations and engineering, marketing, sales and administrative functions and asset impairments associated with restructuring related actions.

During the year ended December 31, 2024, additional expenses were recorded for employee related costs for severance.

Other costs included asset impairments for certain leased real estate and equipment, and sales of several owned properties, including an international manufacturing facility, along with U.S.

office and warehouse facilities.

The Company recorded net proceeds of $ 67.6 million related primarily to facility sales, resulting in a gain of $ 33.9 million.

Employee related and other costs are recorded as restructuring costs, net on the Consolidated Statements of Operations.

Concurrent with the international manufacturing facility sale, the Company entered into a sale leaseback transaction whereby a minor portion of the building used to support research and development operations was leased back for a term of nine years with annual payments that range from € 800 thousand to € 1.5 million.

The Company determined the lease to be an operating lease, and upon entering into the lease, recognized a right of use asset and operating lease liability of € 7.5 million based on the present value of the minimum lease payments discounted using an incremental borrowing rate of 7.15 %.

Other costs included the impairment of idled administration and engineering facilities.

The Company has recognized restructuring charges of $ 185.4 million to date related to CommScope NEXT actions.

7 unchanged sentences

During the years ended December 31, 2024, 2023 and 2022 , the Company made contributions to defined contribution retirement savings plans of $ 31.6 million, $ 24.3 million and $ 40.8 million, respectively.

The Company temporarily paused its employer contribution as of July 1, 2023 and incurred no expenses for contributions through the end of 2023.

CommScope Holding Company, Inc.

Notes to Consolidated Financial Statements-(Continued)

(In millions, unless otherwise noted)

The Company also maintains noncontributory and contributory deferred compensation plans.

1 unchanged sentence

The liability related to these plans was $ 22.1 million and $ 22.7 million as of December 31, 2024 and 2023, respectively.

CommScope Holding Company, Inc.

Notes to Consolidated Financial Statements-(Continued)

(In millions, unless otherwise noted)

Pension Plans

16 unchanged sentences

Fair value of plan assets, ending

Funded status, net liability

Funded status, net liability (asset)

The following table presents the balance sheet location of the Company’s pension liabilities and assets:

3 unchanged sentences

The accumulated benefit obligation for the Company’s U.S.

defined benefit pension plans was $ 9.4 million for both periods as of December 31, 2023 and 2022 , and the accumulated benefit obligation for the Company’s non-U.S.

defined benefit pension plans was $ 8.6 million and $ 9.4 million as of December 31, 2024 and 2023 , respectively, and the accumulated benefit obligation for the Company’s non-U.S.

defined benefit pension plans was $ 157.4 million and $ 181.5 million as of December 31, 2024 and 2023, respectively.

CommScope Holding Company, Inc.

Notes to Consolidated Financial Statements-(Continued)

(In millions, unless otherwise noted)

The following table summarizes information for the Company’s pension plans with an accumulated benefit obligation in excess of plan assets:

2 unchanged sentences

Fair value of plan assets

CommScope Holding Company, Inc.

Notes to Consolidated Financial Statements-(Continued)

(In millions, unless otherwise noted)

The following table summarizes pretax amounts included in accumulated other comprehensive loss:

9 unchanged sentences

Expected return on plan assets

Settlement loss

Settlement (gain) loss

Curtailment gain

4 unchanged sentences

Change in unrecognized prior service cost

Curtailment and settlements

Total included in other comprehensive income (loss)

1 unchanged sentence

included in other comprehensive income (loss)

The Company reports the service cost component of net periodic benefit cost in the same line item as other compensation costs arising from the services rendered by the employee and records the other components of net periodic benefit cost in other income (expense), net.

CommScope Holding Company, Inc.

Notes to Consolidated Financial Statements-(Continued)

(In millions, unless otherwise noted)

Significant weighted average assumptions used in determining benefit obligations and net periodic benefit cost are as follows:

7 unchanged sentences

The Company considered the available yields on high-quality fixed-income investments with maturities corresponding to the Company’s expected benefit obligations to determine the discount rates at each measurement date.

CommScope Holding Company, Inc.

Notes to Consolidated Financial Statements-(Continued)

(In millions, unless otherwise noted)

In developing the expected rate of return on plan assets, the Company considered the expected long-term rate of return on individual asset classes.

18 unchanged sentences

International debt

Absolute return

CommScope Holding Company, Inc.

Notes to Consolidated Financial Statements-(Continued)

(In millions, unless otherwise noted)

Expected Cash Flows

3 unchanged sentences

The following table summarizes projected benefit payments from pension plans through 2034, including benefits attributable to estimated future service (in millions):

Loss from continuing operations before income taxes includes the results from domestic and international operations as follows:

CommScope Holding Company, Inc.

Notes to Consolidated Financial Statements-(Continued)

(In millions, unless otherwise noted)

L oss from continuing operations before income taxes includes the results from domestic and international operations as follows:

Year Ended December 31,

2 unchanged sentences

Year Ended December 31,

Current income tax expense

Deferred income tax benefit

Current income tax expense (benefit)

Deferred income tax expense (benefit)

Total income tax expense (benefit)

CommScope Holding Company, Inc.

Notes to Consolidated Financial Statements-(Continued)

(In millions, unless otherwise noted)

The reconciliation of income taxes calculated at the statutory U.S.

16 unchanged sentences

Total expense (benefit) for income taxes

CommScope Holding Company, Inc.

Notes to Consolidated Financial Statements-(Continued)

(In millions, unless otherwise noted)

The components of deferred income tax assets and liabilities and the classification of deferred tax balances on the balance sheet were as follows:

18 unchanged sentences

Deferred taxes recognized on the balance sheet:

Noncurrent deferred tax asset

Noncurrent deferred tax asset (included with other noncurrent assets)

Noncurrent deferred tax liability

Net deferred tax asset

CommScope Holding Company, Inc.

Notes to Consolidated Financial Statements-(Continued)

(In millions, unless otherwise noted)

The deferred tax asset for foreign net operating loss and tax credit carryforwards as of December 31, 2024 includes foreign net operating loss carryforwards (net of federal tax effects) of $ 30.6 million, which begin to expire in 2025 , and foreign tax credit carryforwards (net of federal tax effects) of $ 10.1 million, which begin to expire in 2025 .

7 unchanged sentences

The deferred tax asset for federal and state interest limitation carryforwards as of December 31, 2024 are $ 315.5 million, which have an indefinite carryforward.

During 2023, a valuation allowance of $ 158.8 million has been established against these federal and state deferred tax assets.

A valuation allowance of $ 315.5 million has been established against these federal and state deferred tax assets.

CommScope Holding Company, Inc.

Notes to Consolidated Financial Statements-(Continued)

(In millions, unless otherwise noted)

In addition to the valuation allowances detailed above, the Company has also established a valuation allowance of $ 3.4 million against other deferred tax assets.

15 unchanged sentences

Decrease related to lapse in statutes of limitations

Decrease related to divestiture

Balance at end of period

4 unchanged sentences

Although the timing and outcome of such events are difficult to predict, the Company estimates that the balance of unrecognized tax benefits, excluding the impact of accrued interest and penalties, may be reduced by up to $ 22.0 million within the next twelve months.

CommScope Holding Company, Inc.

Notes to Consolidated Financial Statements-(Continued)

(In millions, unless otherwise noted)

The Company provides for interest and penalties related to unrecognized tax benefits as income tax expense.

7 unchanged sentences

During 2024 , the Company recognized $( 14.2 ) million (net of payments) related to the lapse of applicable statutes of limitations and the conclusion of various domestic and foreign examinations.

The Organization for Economic Co-operation and Development has proposed a global minimum tax of 15% under its Pillar Two Model Rules.

Beginning in 2023, many countries began to incorporate Pillar Two into their domestic laws with Pillar Two becoming effective in some countries beginning in 2024.

In 2024, the company incurred insignificant tax expense in connection with Pillar Two.

CommScope Holding Company, Inc.

Notes to Consolidated Financial Statements-(Continued)

(In millions, unless otherwise noted)

The following table presents income tax expense (benefit) related to amounts presented in other comprehensive income (loss):

12 unchanged sentences

During the years ended December 31, 2024, 2023 and 2022 , the Company paid dividends in-kind of $ 65.2 million, $ 61.8 million and $ 44.2 million, respectively, which were recorded as additional Convertible Preferred Stock on the Consolidated Balance Sheets.

The Company did no t pay cash dividends for the year ended December 31, 2023 but did pay cash dividends of $ 14.9 million and $ 43.0 million for the years ended December 31, 2022 and 2021, respectively.

The Company did no t pay cash dividends for the years ended December 31, 2024 or 2023, but did pay cash dividends of $ 14.9 million for the year ended December 31, 2022.

Conversion Features

2 unchanged sentences

At any time after the third anniversary of the issuance of the Convertible Preferred Stock, if the volume weighted average price of CommScope’s common stock exceeds the conversion price of $ 49.50 , as may be adjusted pursuant to the Certificate of Designations, for at least thirty trading days in any period of forty-five consecutive trading days (including the final five trading days of any such forty-five-trading day period) all of the Convertible Preferred Stock may be converted at the election of CommScope into the relevant number of shares of CommScope common stock.

CommScope Holding Company, Inc.

Notes to Consolidated Financial Statements-(Continued)

(In millions, unless otherwise noted)

Redemption Rights

1 unchanged sentence

The redemption price is payable, at the Company’s option, in cash or a combination of cash and common stock, subject to certain restrictions.

CommScope Holding Company, Inc.

Notes to Consolidated Financial Statements-(Continued)

(In millions, unless otherwise noted)

Upon certain change of control events involving CommScope, CommScope has the right, subject to the holder’s right to convert prior to such redemption, to redeem all of the Convertible Preferred Stock for the greater of (i) an amount in cash equal to the sum of the liquidation preference of the Convertible Preferred Stock, all accrued but unpaid dividends and, if the applicable redemption date is prior to the fifth anniversary of the first dividend payment date, the present value, discounted at a rate of 10 %, of any remaining scheduled dividends through the five year anniversary of the first dividend payment date, assuming CommScope chose to pay such dividends in cash and (ii) the consideration the holders would have received if they had converted their shares of the Convertible Preferred Stock into CommScope common stock immediately prior to the change of control event.

12 unchanged sentences

There were no significant capitalized equity-based compensation costs at December 31, 2024.

CommScope Holding Company, Inc.

Notes to Consolidated Financial Statements-(Continued)

(In millions, unless otherwise noted)

The following table shows a summary of the equity-based compensation expense included in the Consolidated Statements of Operations:

4 unchanged sentences

Total equity-based compensation expense

CommScope Holding Company, Inc.

Notes to Consolidated Financial Statements-(Continued)

(In millions, unless otherwise noted)

The Company believes the valuation techniques and the approaches utilized to develop the underlying assumptions are appropriate in estimating the fair values of its equity-based compensation.

9 unchanged sentences

The intrinsic value of options exercised during the years ended December 31, 2024, 2023 and 2022 was not material.

The intrinsic value of options exercised during the year ended December 31, 2021 was $ 5.3 million.

Restricted Stock Units

7 unchanged sentences

Non-vested share units at December 31, 2024

CommScope Holding Company, Inc.

Notes to Consolidated Financial Statements-(Continued)

(In millions, unless otherwise noted)

The weighted average grant date fair value per unit of these awards granted during the years ended December 31, 2024, 2023 and 2022 was $ 1.41 , $ 4.60 and $ 8.06 , respectively.

12 unchanged sentences

treasury securities, and stock price volatility, which is derived based on the historical volatility of the Company’s stock.

During the year ended December 31, 2024, certain PSUs expired as the performance measure stock price milestone was not met.

Consequently, no shares were issued related to these awards.

CommScope Holding Company, Inc.

Notes to Consolidated Financial Statements-(Continued)

(In millions, unless otherwise noted)

The following table presents the weighted average assumptions used to estimate the fair value of these awards granted:

8 unchanged sentences

Non-vested share units at December 31, 2024

No PSUs were granted during the year ended December 31, 2024.

The weighted average grant date fair value per unit of these awards granted during the years ended December 31, 2023 and 2022 was $ 5.83 and $ 9.54 , respectively.

No PSUs vested during the year ended December 31, 2024.

The total fair value of PSUs that vested during the year ended December 31, 2023 , was no t material.

The total fair value of PSUs that vested during the years ended December 31, 2022 and 2021 was $ 3.1 million, and $ 1.0 million, respectively.

The total fair value of PSUs that vested during the year ended December 31, 2022 was $ 2.6 million.

COMMITMENTS AND CONTINGENCIES

6 unchanged sentences

Product warranty accrual, end of period

CommScope Holding Company, Inc.

Notes to Consolidated Financial Statements-(Continued)

(In millions, unless otherwise noted)

Third-Party Guarantees

The Company was contingently liable under open standby letters of credit issued by its banks to support performance obligations of a third-party contractor that totaled $ 35.9 million as of December 31, 2023.

These amounts represent an estimate of the maximum amounts the Company would expect to incur upon the contractual non-performance of the third-party contractor, but the Company also has cross-indemnities in place that may enable it to recover amounts in the event of non-performance by the third-party contractor.

The Company believes the likelihood of having to perform under these guarantees is remote.

There were no material amounts recorded in the consolidated financial statements related to third-party guarantee agreements as of and for the years ended December 31, 2023 or 2022.

As of December 31, 2023, these instruments reduced the available borrowings under the Revolving Credit Facility.

Non-cancellable Purchase Obligations

1 unchanged sentence

Under the terms of the contract, the Company will make advance payments through 2026 totaling $ 120.0 million (undiscounted) and based on meeting certain minimum purchase requirements through 2031, such advance payments will be credited and applied to future orders on a quarterly basis beginning in 2027 through 2031.

Advance payments of $ 30.0 million are recorded as other noncurrent assets in the Consolidated Balance Sheets as of December 31, 2023.

The Company has committed to purchases of raw materials under this agreement beginning in 2023, growing to a level of approximately $ 137 million per year by 2026 and continuing through 2032.

Advance payments of $ 60.0 million and $ 30.0 million are recorded as other noncurrent assets in the Consolidated Balance Sheets as of December 31, 2024 and 2023 .

The Company has committed to growing purchases of raw materials under this agreement to a level of approximately $ 137 million per year by 2026 and continuing through 2032.

CommScope Holding Company, Inc.

Notes to Consolidated Financial Statements-(Continued)

(In millions, unless otherwise noted)

Legal Proceedings

6 unchanged sentences

Gain contingencies, if any, are recognized when they are realized.

During the year ended December 31, 2021, the Company received $ 17.1 million in the settlement of a warranty indemnification matter that was assumed in the acquisition of ARRIS in 2019.

The recovery was recorded as a reduction of cost of sales in the Consolidated Statements of Operations and is reflected in the results of the ANS segment.

The Company is either a plaintiff or a defendant in certain other pending legal matters in the normal course of business.

4 unchanged sentences

Segment Information

As a result of the pending divestiture of the Home business, the Company is now reporting financial performance based on the following remaining four operating segments, which excludes the Home segment:

CCS, OWN, NICS and ANS.

As a result of the pending sale of the OWN segment and DAS business unit, and the divestiture of the Home business, the Company manages its continuing operations and is reporting financial performance based on the following remaining three operating segments:

CCS, NICS and ANS.

In addition, as of January 1, 2024, management shifted certain product lines from the Company’s CCS segment to its ANS segment to better align with how the businesses are managed.

For all periods presented, amounts have been recast to reflect these operating segment changes.

CommScope Holding Company, Inc.

Notes to Consolidated Financial Statements-(Continued)

(In millions, unless otherwise noted)

The Connectivity and Cable Solutions (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 following is a brief description of the activities of the Company's business segments:

CCS - The 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.

1 unchanged sentence

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.

The Outdoor Wireless Networks (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 the wireless spectrum management business, Comsearch.

The Networking, Intelligent Cellular and Security Solutions (NICS) segment provides wireless networks for enterprises and service providers.

Product offerings include indoor cellular solutions such as distributed antenna systems, public key infrastructure solutions, indoor and outdoor Wi-Fi and long-term evolution (LTE) access points, access and aggregation switches;

NICS - The segment provides wireless networks for enterprises and service providers.

Product offerings include indoor cellular solutions such as public key infrastructure solutions, indoor and outdoor Wi-Fi and long-term evolution (LTE) access points, access and aggregation switches;

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

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

The Access Network Solutions (ANS) segment’s product solutions include cable modem termination systems, 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.

ANS - The segment’s product solutions include cable modem termination systems, 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.

CommScope Holding Company, Inc.

Notes to Consolidated Financial Statements-(Continued)

(In millions, unless otherwise noted)

The following table provides summary financial information by reportable segment:

5 unchanged sentences

Deferred income tax assets

Home business assets (3)

Assets held for sale

The corporate and other line item above reflects certain assets retained by the Company related to the Home business, with the primary asset being net inventory in the amount of $ 88.0 million as of December 31, 2023.

The Company has entered into a Supply Agreement, whereby the Company will sell the retained inventory to Vantiva for a period of two years following the close of the transaction at market prices.

(1) Assets related to business segments largely include accounts receivable, inventories, property, plant and equipment, goodwill, intangible assets and certain limited other assets.

All other items are reflected in Corporate and other.

Accounts receivable and inventory are ascribed based on underlying sales or activity.

Property, plant and equipment are attributed to a particular business segment based on that item’s primary user and reflect an allocation of certain corporate-shared assets.

Intangible assets and goodwill are largely directly associated with a particular reporting unit and attributed on that basis.

(2) The corporate and other line item above reflects assets related to the OWN segment and DAS business unit which are not expected to transfer upon sale.

(3) The Home business assets line item above reflects certain assets retained by the Company related to the Home business, with the primary asset being net inventory related to the Home business in the amount of $ 14.5 and $ 88.0 million as of December 31, 2024 and 2023 , respectively.

The Company has entered into the Vantiva Supply Agreement, pursuant to which the Company will sell the retained inventory to Vantiva at cost, or market price if below cost, for a period of two years following the close of the transaction.

The Company organizes its business segments based on the nature of products and services offered.

Segment information is presented on the same basis that the Company's Chief Executive Officer , who is the chief operating decision maker, uses to manage its segments, evaluate financials results and make key operating decisions.

The Company’s measurement of segment performance is adjusted EBITDA (earnings before interest, income taxes, depreciation and amortization).

The Company defines adjusted EBITDA as operating income (loss), adjusted to exclude depreciation, amortization of intangible assets, restructuring costs, asset impairments, equity-based compensation, transaction, transformation and integration costs and other items that the Company believes are useful to exclude in the evaluation of operating performance from period to period because these items are not representative of the Company’s core business.

These financial metrics are used to view operating trends, perform analytical comparisons and benchmark performance between periods and among geographic regions and monitor budget-to-actual variances on a monthly basis.

To manage operations and make decisions regarding resource allocations, the Company’s chief operating decision-maker is regularly provided and reviews expense information at a consolidated level for each segment.

Each segment has a manager responsible for executing the Company’s strategic initiatives.

CommScope Holding Company, Inc.

1 unchanged sentence

(In millions, unless otherwise noted)

The following table provides net sales, adjusted EBITDA, depreciation expense and additions to property, plant and equipment by reportable segment:

Year Ended December 31,

Consolidated net sales

The following table provides net sales, cost of sales, total operating expenses, adjusted EBITDA, depreciation expense and additions to property, plant and equipment by reportable segment for the year ended December 31, 2024:

and other (1)

Cost and expenses:

Segment cost of sales

Segment operating expenses

Segment adjusted EBITDA

Corporate and other

Total segment adjusted EBITDA

Amortization of intangible assets

1 unchanged sentence

Equity-based compensation

Transaction, transformation and integration costs

Patent claims and litigation settlements

Operating income

Other expense, net

Loss from continuing operations before income taxes

Additions to property, plant and equipment

(1) The corporate and other category above reflects general corporate costs that were previously allocated to the OWN segment, DAS business unit and Home segment.

These indirect expenses have been classified as continuing operations, since the costs were not directly attributable to these discontinued operations.

The corporate and other costs related to the OWN segment and DAS business unit will be reallocated to the Company’s remaining segments beginning in the first quarter of 2025.

CommScope Holding Company, Inc.

Notes to Consolidated Financial Statements-(Continued)

(In millions, unless otherwise noted)

and other (1)

Acquisition-related adjustments (2)

Segment net sales

Cost and expenses:

Segment cost of sales

Segment operating expenses

Segment adjusted EBITDA

Amortization of intangible assets

Restructuring costs, net

Equity-based compensation

Asset impairments

2 unchanged sentences

Patent claims and litigation settlements

Recovery (reserve) of Russian accounts receivable

Recovery of Russian accounts receivable

Cyber incident costs

Consolidated operating income (loss)

Depreciation expense:

Corporate and other

Consolidated depreciation expense

Operating loss

Other expense, net

Loss from continuing operations before income taxes

Additions to property, plant and equipment

Corporate and other

Consolidated additions to property, plant and equipment

The corporate and other line item above reflects general corporate costs that were previously allocated to the Home segment.

These indirect expenses have been classified as continuing operations for all periods presented since the costs were not directly attributable to the discontinued operations of the Home segment.

These costs will be reallocated to the Company's remaining segments in future years and will be at least partially offset by income from a transition services agreement with Vantiva or other restructuring actions.

(1) The corporate and other category above reflects general corporate costs that were previously allocated to the OWN segment, DAS business unit and Home segment.

These indirect expenses have been classified as continuing operations, since the costs were not directly attributable to these discontinued operations.

The corporate and other costs related to the OWN segment and DAS business unit will be reallocated to the Company’s remaining segments beginning in the first quarter of 2025.

(2) Reflects ARRIS acquisition accounting adjustments related to reducing deferred revenue to its estimated fair value.

CommScope Holding Company, Inc.

1 unchanged sentence

(In millions, unless otherwise noted)

and other (1)

Acquisition-related adjustments (2)

Segment net sales

Cost and expenses:

Segment cost of sales

Segment operating expenses

Segment adjusted EBITDA

Amortization of intangible assets

Restructuring costs, net

Equity-based compensation

Asset impairments

Transaction, transformation and integration costs

Acquisition accounting adjustments

Patent claims and litigation settlements

Recovery of Russian accounts receivable

Operating loss

Other expense, net

Loss from continuing operations before income taxes

Additions to property, plant and equipment

(1) The corporate and other category above reflects general corporate costs that were previously allocated to the OWN segment, DAS business unit and Home segment.

These indirect expenses have been classified as continuing operations, since the costs were not directly attributable to these discontinued operations.

The corporate and other costs related to the OWN segment and DAS business unit will be reallocated to the Company’s remaining segments beginning in the first quarter of 2025.

(2) Reflects ARRIS acquisition accounting adjustments related to reducing deferred revenue to its estimated fair value.

Customer and Supplier Information

1 unchanged sentence

Accounts receivable from Comcast Corporation (Comcast) represented approximately 12 % of accounts receivable as of December 31, 2024.

Accounts receivable from Charter Communications, Inc.

(Charter) represented approximately 14 % of accounts receivable as of December 31, 2022.

Other than Comcast and Charter, no direct customer accounted for 10 % or more of the Company’s accounts receivable as of December 31, 2023 or 2022.

Accounts receivable from Comcast and Charter Communications, Inc.

(Charter) represented approximately 16 % and 12 %, respectively, of accounts receivable as of December 31, 2023 .

Other than Comcast and Charter, no direct customer accounte d for 10 % or more of the Company’s accounts receivable as of December 31, 2024 or 2023.

The Company relies on sole suppliers or a limited group of suppliers for certain key components, subassemblies and modules and a limited group of contract manufacturers to manufacture a significant portion of its products.

Any disruption or termination of these arrangements could have a material adverse impact on the Company’s results of operations.

CommScope Holding Company, Inc.

Notes to Consolidated Financial Statements-(Continued)

(In millions, unless otherwise noted)

Related Party Transactions

See Note 15 for a discussion of the Convertible Preferred Stock issued to Carlyle to finance the ARRIS acquisition.

Other than transactions related to the Convertible Preferred Stock, there were no material related party transactions for the years ended December 31, 2023, 2022 or 2021.

Other than transactions related to the Convertible Preferred Stock and the Company’s continuing involvement with Vantiva discussed in Note 4, there were no material related party transactions for the years ended December 31, 2024, 2023 or 2022.

Geographic Information

21 unchanged sentences

QUARTERLY FINANCIAL DATA (UNAUDITED)

The unaudited interim financial information below has been recast to reflect the discontinuation of the Home business.

The unaudited interim financial information below has been recast to reflect the discontinuation of the OWN segment, DAS business unit and Home business.

See Note 4 for further information on discontinued operations.

Quarter 2024 (1)

Operating income (loss)

Loss from continuing operations

Income (loss) from continuing operations

Net income (loss)

Net loss attributable to common stockholders

Net income (loss) attributable to common stockholders

Basic earnings (loss) from continuing operations per share

Diluted earnings (loss) from continuing operations per share

Quarter 2023 (1)

Operating income (loss)

1 unchanged sentence

Net income (loss)

Net income (loss) attributable to common stockholders

Basic earnings (loss) from continuing operations per share

Diluted earnings (loss) from continuing operations per share

Net loss attributable to common stockholders

Basic loss from continuing operations per share

Diluted loss from continuing operations per share

(1) See Note 2 for further discussion of adjustments impacting certain financial results above.

SUBSEQUENT EVENTS

On January 9, 2024, the Company completed the previously announced sale of the Home Business to Vantiva pursuant to the Purchase Agreement, dated as of December 7, 2023.

Vantiva acquired the Home Business in exchange for (i) 134,704,669 shares of Vantiva common stock, representing a 24.73 % equity stake in Vantiva (determined on a fully diluted basis), (ii) $ 250,465 in cash (in addition to cash paid in exchange for the cash on the Home Business companies’ balance sheets) and (iii) an earn-out of up to $ 100 million, subject to the satisfaction of certain conditions.

The $ 250,465 in cash paid in connection with the closing is expected to be used to acquire additional shares of Vantiva common stock, following which the Company is expected to own a 25 % equity stake in Vantiva (on a fully diluted basis).

In conjunction with the closing of the transaction, the Company entered into a transition services agreement (TSA) with Vantiva, whereby the Company will provide and receive certain post-closing support on a transitional basis.

The TSA has varying terms for duration up to sixteen months, depending on the service, and provides for options to extend services for up to two renewal terms of three months each.

The loss recognized upon disposal at closing of the transaction is currently estimated to be less than $ 50 million.

The proceeds from the sale of the OWN segment and the DAS business unit were used to pay fees and expenses associated with the transactions and to repay all outstanding amounts under the Company’s Revolving Credit Facility, to repay in part the 2029 Secured Notes and to repay in full the 2026 Secured Notes (collectively, the Debt Repayment).

In connection with the repayment of all outstanding amounts under the Revolving Credit Facility on January 31, 2025, the committed amount thereunder was reduced to $ 750.0 million, subject to borrowing base limitations.

On February 3, 2025, the Company completed (i) the redemption of $ 299,000,000 in aggregate principal amount of the 2029 Secured Notes, and following the redemption, $ 951,000,000 in aggregate principal amount of the 2029 Secured Notes remain outstanding and (ii) the redemption of all amounts outstanding under the 2026 Secured Notes.

In connection with the redemption in full of the 2026 Secured Notes, the indenture governing the 2026 Secured Notes was satisfied and discharged.

Following the consummation of the Debt Repayment on February 3, 2025, the conditions precedent were met for a 25 basis point reduction in the applicable margin on the 2029 Term Loan.

CHANGES IN AND DISAGREEMENTS WITH ACCOUN TANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

1 unchanged sentence

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 8. Financial Statements and Supplementary Data