##### 









UNITED STATES SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549


Form 10-K


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

Commission File No. 0-1424


ADC Telecommunications, Inc.


(Exact name of registrant as specified in its charter)


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

Registrants telephone number, including area code:


(952) 938-8080


Securities registered pursuant to Section 12(b) of the
Act:


None


Securities registered pursuant to Section 12(g) of the
Act:


Common Stock, $.20 par value


Preferred Stock Purchase Rights


þ o


o þ


þ o


Regulation S-K Form 10-K Form 10-K. þ


Rule 12b-2


|                          |  |                     |  |                        
|------------------------- |  | ------------------- |  | -----------------------
|Large accelerated filer þ |  | Accelerated filer o |  | Non-accelerated filer o

Rule 12b-2 o þ


®




DOCUMENTS INCORPORATED BY REFERENCE


Form 10-K










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##### 



PART I




|        |         
|------- | --------
|Item 1. | BUSINESS









| |   |                                                                  
| | - | -----------------------------------------------------------------
| |  | Broadband Infrastructure and Access; and                         
|
| |  | Professional Services (previously known as Integrated Solutions).

Broadband Infrastructure and Access




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

Professional Services


Form 10-K, Form 10-Q, Form 8-K Forms 10-K, 10-Q or 8-K)


1



---



##### 



Form 10-K.




Industry Background






end-users




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



2



---



##### 





Strategy








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

Customer Focus.


Growing Sales.


Development of New Sales Channels.


3



---



##### 





Lowering Cost Structure.


Product Portfolio Additions.






fiber-to ® ®


Form 10-K.


Product and Service Offering Groups




4



---



##### 





Form 10-K


Broadband Infrastructure and Access






| |                                              
| | ---------------------------------------------
| | Broadband Connectivity Systems and Components



DSX and DDF Products.


FTTX Products. tm


Fiber Distribution Panels and Frame Products. fiber-optic


RF Signal Management Products. ®


Power Distribution and Protection Panels. ®


5



---



##### 



Modular Fiber-Optic Cable Management Systems. ®


Structured Cabling Products. ® ®


Broadcast and Entertainment Products. ® tm


Other Connectivity Products.




| |                                
| | -------------------------------
| | Wireless Systems and Components



Cellular Coverage/ Capacity Enhancement Solutions. ®


Tower Top Amplifiers. ®






| |                 
| | ----------------
| | Wireline Systems

® ®


6



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##### 



Professional Services




turn-up coast-to


Sales and Marketing






| |   |                                                                                                                                                                                                                                                                                                 
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the U.S. public communications network market, which
    includes the four major U.S. telephone companies (Verizon,
    BellSouth, SBC and Qwest), other local telephone companies,
    long-distance carriers,
    wireless service providers, cable television operators and
    broadcasters;
|
| |  | the public and private network markets outside of the United
    States;                                                                                                                                                                                                                        
|
| |  | the U.S. private and governmental markets, which include
    business customers and governmental agencies that own and
    operate their own Internet, data, video and voice networks for
    internal use; and                                                                                 
|
| |  | other communications equipment vendors, who incorporate our
    products into products and systems that they in turn sell into
    the three markets listed above.                                                                                                                              



non-U.S. net






7



---



##### 



on-site


Research and Development








| |   |                                                                                                                                                                                                                                           
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | connectivity products for FTTX initiatives;                                                                                                                                                                                               
|
| |  | high-performance structured cables, jacks, plugs, jumpers,
    frames and panels to enable the use of increasingly
    higher-performance IP network protocols within private networks;                                                   
|
| |  | connectivity products that enable the use of network protocols
    within the public communications network, which is used by our
    customers to more effectively deploy data services over their
    historic voice-based networks; and
|
| |  | digital interfaces for wireless networks that will enable
    software-based products to interact with the physical elements
    of these networks.                                                                                       



Competition




For Broadband Infrastructure and Access products:


For Professional Services:


8



---



##### 







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





Manufacturing and Suppliers




single-sourced,


9



---



##### 





Proprietary Rights






Seasonality






Employees




Executive Officers of the Registrant




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

Mr. Switz


10



---



##### 





Mr. Hemmady


Mr. Pratt


Mr. OBrien


Mr. Pflaum


Ms. Owen


Ms. Quay 28-year


Mr. Mathews CARE-USA,




|         |             
|-------- | ------------
|Item 1A. | RISK FACTORS



11



---



##### 



Risks Related to Our Business




| |                                                                                                                                                                                                                                                                                                                                    
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Our operating results were adversely affected by the
    significant downturn in the communications equipment industry
    and the slowdown in the United States economy that occured
    generally from 2001-2003, and there can be no assurance that we
    will consistently maintain operating profitability in the
    future.









| |                                                                          
| | -------------------------------------------------------------------------
| | Shifts in our product mix may result in declines in our
    gross margin.





| |                                                                                                                  
| | -----------------------------------------------------------------------------------------------------------------
| | We are becoming increasingly dependent on significant
    capital deployment initiatives driven by our customers.



12



---



##### 





| |                                                                                                                                       
| | --------------------------------------------------------------------------------------------------------------------------------------
| | Consolidation among our customers could result in our
    losing a customer or experiencing a slowdown as integration
    takes place.





| |                                                                                                                                  
| | ---------------------------------------------------------------------------------------------------------------------------------
| | Our sales could be negatively impacted if one or more of
    our key customers substantially reduces orders for our
    products.





| |                                                                                                                 
| | ----------------------------------------------------------------------------------------------------------------
| | In the aftermath of Hurricane Katrina, we may experience a
    change in the sales of our products and services.





| |                                                                                                                                                                    
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Our market is subject to rapid technological change, and
    to compete effectively, we must continually introduce new
    products that achieve market acceptance.





13



---



##### 







| |                                                                                          
| | -----------------------------------------------------------------------------------------
| | Strategic changes to our product portfolio may not yield
    the benefits that we expect.







| |                                                                                                                                                                       
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | If we are unable to garner customer support for our
    combined portfolio following the FONS acquisition, we may not be
    able to realize the gains we anticipated.





| |                                                                                                                                                                                                                                                                            
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | If we seek to secure additional financing, we may not be
    able to obtain it. Also, if we are able to secure additional
    financing, our shareowners may experience dilution of their
    ownership interest or we may be subject to limitations on our
    operations.



14



---



##### 





| |                                                                                                              
| | -------------------------------------------------------------------------------------------------------------
| | Our industry is highly competitive and subject to
    significant downward pricing pressure for our products.





| |                                                                                  
| | ---------------------------------------------------------------------------------
| | Possible consolidation among our competitors could result
    in a loss of sales.





| |                                                                                                                                       
| | --------------------------------------------------------------------------------------------------------------------------------------
| | Our operating results fluctuate significantly, and if we
    miss quarterly financial expectations, our stock price could
    decline.





| |   |                                                                                          
| | - | -----------------------------------------------------------------------------------------
| |  | the volume and timing of orders from and shipments to our
    customers;                 
|
| |  | work stoppages and other developments affecting the operations
    of our customers;     
|
| |  | the timing of and our ability to obtain new customer contracts
    and sales recognition;
|
| |  | the timing of new product and service announcements;                                     
|
| |  | the availability of products and services;                                               
|
| |  | the overall level of capital expenditures by our customers;                              
|
| |  | market acceptance of new and enhanced versions of our products
    and services;         
|
| |  | variations in the mix of products and services we sell;                                  
|
| |  | the location and utilization of our production capacity and
    employees; and           
|
| |  | the availability and cost of key components.                                             





15



---



##### 





| |                                                                           
| | --------------------------------------------------------------------------
| | The regulatory environment in which our customers operate
    is changing.

line-sharing,








| |                                                                                                                 
| | ----------------------------------------------------------------------------------------------------------------
| | Customer payment defaults could have an adverse effect on
    our financial condition and results of operations.







| |                                                              
| | -------------------------------------------------------------
| | Conditions in global markets could affect our
    operations.

non-U.S. sales


16



---



##### 



non-U.S. sales non-U.S. operations,




| |   |                                                                                                   
| | - | --------------------------------------------------------------------------------------------------
| |  | local economic and market conditions;                                                             
|
| |  | political and economic instability;                                                               
|
| |  | unexpected changes in or impositions of legislative or
    regulatory requirements;               
|
| |  | fluctuations in foreign currency exchange rates;                                                  
|
| |  | tariffs and other barriers and restrictions;                                                      
|
| |  | longer payment cycles;                                                                            
|
| |  | difficulties in enforcing intellectual property and contract
    rights;                          
|
| |  | greater difficulty in accounts receivable collection;                                             
|
| |  | potentially adverse taxes; and                                                                    
|
| |  | the burdens of complying with a variety of
    non-U.S. laws and
    telecommunications standards.

non-U.S. markets




non-U.S. markets, non-U.S. sales, non-U.S. operations




| |                                                                                  
| | ---------------------------------------------------------------------------------
| | Our intellectual property rights may not be adequate to
    protect our business.





17



---



##### 







| |                                     
| | ------------------------------------
| | We are dependent upon key personnel.







| |                   
| | ------------------
| | Internal Controls.





| |                                      
| | -------------------------------------
| | Integration of Key Finance Employees.





| |                                                                                                  
| | -------------------------------------------------------------------------------------------------
| | Product defects could cause us to lose customers and
    revenue or to incur unexpected expenses.





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

18



---



##### 







| |                                                                                                                                                                                  
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We may encounter difficulties obtaining raw materials and
    supplies needed to make our products and the prices of these
    materials and supplies are subject to fluctuation.





| |                                                           
| | ----------------------------------------------------------
| | We rely upon our contract manufacturing
    relationships.





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





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





19



---



##### 



Risks Related to Our Common Stock




| |                             
| | ----------------------------
| | Our stock price is volatile.

day-to




| |   |                                                                                                                  
| | - | -----------------------------------------------------------------------------------------------------------------
| |  | announcements of new products and services by us or our
    competitors;                                         
|
| |  | quarterly fluctuations in our financial results or the financial
    results of our competitors or our customers;
|
| |  | customer contract awards to us or our competitors;                                                               
|
| |  | increased competition with our competitors or among our
    customers;                                           
|
| |  | consolidation among our competitors or customers;                                                                
|
| |  | disputes concerning intellectual property rights;                                                                
|
| |  | the financial health of ADC, our competitors or our customers;                                                   
|
| |  | developments in telecommunications regulations;                                                                  
|
| |  | general conditions in the communications equipment industry;                                                     
|
| |  | general economic conditions in the U.S. or
    internationally; and                                              
|
| |  | rumors or speculation regarding ADCs future business
    results and actions.                                   





| |                                                                                                                       
| | ----------------------------------------------------------------------------------------------------------------------
| | We have not in the past and do not intend in the
    foreseeable future to pay cash dividends on our common
    stock.





| |                                                                                                                                                                   
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Anti-takeover provisions in our charter documents, our
    shareowner rights plan and Minnesota law could prevent or delay
    a change in control of our company.





| |   |                                                                                                                                                                                         
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | advance notice requirements for shareowner proposals;                                                                                                                                   
|
| |  | authorization for our Board of Directors to issue preferred
    stock without shareowner approval;                                                                                      
|
| |  | authorization for our Board of Directors to issue preferred
    stock purchase rights upon a third partys acquisition of
    15% or more of our outstanding shares of common stock; and
|
| |  | limitations on business combinations with interested shareowners.                                                                                                                       

20



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##### 







|         |                          
|-------- | -------------------------
|Item 1B. | UNRESOLVED STAFF COMMENTS

None.




|        |           
|------- | ----------
|Item 2. | PROPERTIES







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





21



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##### 





|        |                  
|------- | -----------------
|Item 3. | LEGAL PROCEEDINGS

In Re ADC
Telecommunications, Inc. ERISA Litigation






|        |                                                    
|------- | ---------------------------------------------------
|Item 4. | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.


22



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##### 



PART II




|        |                                                                                                                     
|------- | --------------------------------------------------------------------------------------------------------------------
|Item 5. | MARKET FOR REGISTRANTS COMMON EQUITY, RELATED
    STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY
    SECURITIES



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



23



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##### 





|        |                        
|------- | -----------------------
|Item 6. | SELECTED FINANCIAL DATA

Form 10-K.


FIVE-YEAR FINANCIAL SUMMARY


Years ended October 31


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

24



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|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 7. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
    CONDITION AND RESULTS OF OPERATIONS

Marketplace Conditions












| |   |                                                                                                                                                                                                                                                                                            
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | new product offerings, such as our
    OmniReachtm
    FTTX solutions being deployed by several communications service
    providers and the growing acceptance of our
    Digivance®
    wireless coverage solution and our
    TrueNet®
    and
    CopperTentm
    enterprise solutions;
|
| |  | opportunities to cross-sell products among ADCs
    traditional customer base and the traditional customer base of
    KRONE following our acquisition of KRONE in May 2004; and                                                                                                          
|
| |  | increasing our market share in certain areas as we have done
    recently with respect to some of our product lines.                                                                                                                                                                       





25



---



##### 













26



---



##### 



Results of Operations




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

Form 10-K


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

Overview of Acquisition and Divestiture Activities






27



---



##### 





ever-growing








Net Sales




| |                            
| | ---------------------------
| | Fiscal 2005 vs. Fiscal 2004









28



---



##### 









| |                            
| | ---------------------------
| | Fiscal 2004 vs. Fiscal 2003











Gross Profit




| |                            
| | ---------------------------
| | Fiscal 2005 vs. Fiscal 2004



29



---



##### 





| |                            
| | ---------------------------
| | Fiscal 2004 vs. Fiscal 2003





Operating Expenses




| |                            
| | ---------------------------
| | Fiscal 2005 vs. Fiscal 2004



Research and development:


Selling and administration:




Impairment charges:


Restructuring charges:




| |                            
| | ---------------------------
| | Fiscal 2004 vs. Fiscal 2003



30



---



##### 





Research and development:


Selling and administration:


Impairment charges:




Restructuring charges:




Form 10-K


Other Income, Net




| |                            
| | ---------------------------
| | Fiscal 2005 vs. Fiscal 2004





31



---



##### 





| |                            
| | ---------------------------
| | Fiscal 2004 vs. Fiscal 2003







| |                                              
| | ---------------------------------------------
| | Write-down, sale or conversion of investments





| |             
| | ------------
| | Acquisitions



Form 10-K




Form 10-K




Form 10-K


32



---



##### 









| |                        
| | -----------------------
| | Discontinued operations

Accounting for the Impairment
or Disposal of Long-Lived Assets




| |                                   
| | ----------------------------------
| | ADC Systems Integration UK Limited





| |        
| | -------
| | Metrica





| |              
| | -------------
| | BroadAccess40







| |               
| | --------------
| | Cuda/ FastFlow



33



---



##### 





| |            
| | -----------
| | Singl.eView





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



Income Taxes




| |                                            
| | -------------------------------------------
| | Fiscal 2005 vs. Fiscal 2004 vs. Fiscal 2003

Form 10-K


Form 10-K






Income (Loss) from Continuing Operations




34



---



##### 



Segment Disclosures




| |                                            
| | -------------------------------------------
| | Broadband Infrastructure and Access Segment



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











| |                              
| | -----------------------------
| | Professional Services Segment



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







35



---



##### 





Application of Critical Accounting Policies and Estimates


Form 10-K


Inventories: first-in,


Restructuring Accrual: Employers Accounting for
Postemployment Benefits  An Amendment of FASB
Statements No. 5 and 43 Accounting for Costs Associated with Exit
or Disposal Activities,


Revenue Recognition:


percentage-of


36



---



##### 







Allowance for Uncollectible Accounts:


Warranty:


Recoverability of Long-Lived Assets:




37



---



##### 





Income Taxes and Deferred Taxes:




Form 10-K


Litigation Reserves: Accounting for Contingencies, Form 10-K


Pensions: Employers
Accounting for Pensions


Recently Issued Accounting Pronouncements


Accounting Changes and Error Corrections-a replacement
of APB Opinion No. 20 and FASB Statement No. 3, Accounting Changes Reporting Accounting Changes in
Interim


38



---



##### 



Financial Statements


Exchanges of Nonmonetary Assets  an
amendment of APB Opinion No. 29,


Inventory Costs


Share-Based Payment: an amendment of
FASB Statements No. 123 and 95




Accounting and Disclosure
Guidance for Foreign Earnings Repatriation Provision within the
American Jobs Creation Act of 2004,


39



---



##### 



Liquidity and Capital Resources




| |          
| | ---------
| | Liquidity











| |                     
| | --------------------
| | Operating Activities





| |                     
| | --------------------
| | Investing Activities



40



---



##### 





| |                     
| | --------------------
| | Financing Activities





| |               
| | --------------
| | Unsecured Debt

6-month six-month




| |                       
| | ----------------------
| | Financing Arrangements





| |                 
| | ----------------
| | Vendor Financing





| |                                      
| | -------------------------------------
| | Working Capital and Liquidity Outlook





| |   |                                                                                                                                                          
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | $8.7 million for employee severance will be paid by the end
    of fiscal 2006;                                                                          
|
| |  | $10.0 million for facilities consolidation costs, which
    relate principally to excess leased facilities, will be paid in
    fiscal 2006; and         
|
| |  | the remainder of $14.6 million, which also relates to
    excess leased facilities, will be paid over the respective lease
    terms ending through 2015.

41



---



##### 











| |                                                   
| | --------------------------------------------------
| | Contractual Obligations and Commercial Commitments



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






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



|         |                                                               
|-------- | --------------------------------------------------------------
|Item 7A. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
    RISK



6-month


42



---



##### 











Form 10-K


43



---



##### 





|        |                                            
|------- | -------------------------------------------
|Item 8. | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Report of Independent Registered Public Accounting Firm
















| |                  
| | -----------------
| | Ernst & Young LLP





44



---



##### 



ADC Telecommunications, Inc. and Subsidiaries


Consolidated Statements of Operations


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



45



---



##### 



ADC Telecommunications, Inc. and Subsidiaries


Consolidated Balance Sheets


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



46



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##### 



ADC Telecommunications, Inc. and Subsidiaries


Consolidated Statements of Shareowners Investment


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



47



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##### 



ADC Telecommunications, Inc. and Subsidiaries


Consolidated Statements of Cash Flows


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



48



---



##### 



ADC Telecommunications, Inc. and Subsidiaries


Notes to Consolidated Financial Statements




|        |                                           
|------- | ------------------------------------------
|Note 1: | Summary of Significant Accounting Policies

Business:




Principles of Consolidation:


Basis of Presentation:


Fair Value of Financial Instruments:


Reclassifications:


49



---



##### 



ADC Telecommunications, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)




Reverse Stock Split:


Cash and Cash Equivalents:


Restricted Cash:


Available-for-Sale Securities:


Inventories: first-in,


Property and Equipment:


Impairment of Long-Lived Assets: Accounting for the
Impairment or Disposal of Long-Lived Assets.


Goodwill and Other Intangible Assets:


50



---



##### 



ADC Telecommunications, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)




Research and Development Costs:


Revenue Recognition:


percentage-of




Allowance for Uncollectible Accounts:


Warranty:




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

51



---



##### 



ADC Telecommunications, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)




Deferred Financing Costs:


Income Taxes and Deferred Taxes:


Foreign Currency Translation:






Stock-Based Compensation: Accounting for
Stock Issued to Employees,


Accounting for Stock-Based Compensation.


52



---



##### 



ADC Telecommunications, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)






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

30-month 24-month


Use of Estimates:


Comprehensive Income (Loss):


Dividends:


Off-Balance Sheet Arrangements:


Recently Issued Accounting Pronouncements: Accounting Changes
and Error Corrections-a replacement of APB Opinion No. 20
and FASB Statement No. 3 Accounting Changes Reporting Accounting Changes in Interim Financial
Statements


53



---



##### 



ADC Telecommunications, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)






Exchanges of Nonmonetary Assets  an
amendment of APB Opinion No. 29,


Inventory Costs,


Share-Based Payment: an amendment of FASB Statements
No. 123 and 95




Accounting and Disclosure
Guidance for Foreign Earnings Repatriation Provision within the
American Jobs Creation Act of 2004


54



---



##### 



ADC Telecommunications, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)






|        |                                             
|------- | --------------------------------------------
|Note 2: | Other Financial Statement Data (in millions)



| |                             
| | ----------------------------
| | Other Income (Expense), Net:

|                                                    |  |      |       |   |      |   |      |      |  |   |      |  
|--------------------------------------------------- |  | ---- | ----- | - | ---- | - | ---- | ---- |  | - | ---- | -
|                                                    |  | 2005 |       |   | 2004 |   |      | 2003 | 
|                                                    |  |      |       |   |      |   |      |      | 
|Interest income on short-term investments           |  | $    | 18.3  |   |      | $ | 12.4 |      |  | $ | 9.7  |  
|Interest expense on variable rate convertible notes |  |      | (11.2 | ) |      |   | (8.8 | )    |  |   | (3.6 | )
|                                                    |  |      |       |   |      |   |      |      | 
|Interest income, net                                |  |      | 7.1   |   |      |   | 3.6  |      |  |   | 6.1  |  
|                                                    |  |      |       |   |      |   |      |      | 
|Foreign exchange income (loss)                      |  |      | 0.6   |   |      |   | (0.5 | )    |  |   | 5.9  |  
|Gain on sale of note receivable                     |  |      | 9.0   |   |      |   |     |      |  |   |     |  
|Gain (loss) on divested product lines               |  |      |      |   |      |   | 3.5  |      |  |   | (1.4 | )
|Gain on investments                                 |  |      |      |   |      |   | 4.8  |      |  |   | 0.9  |  
|Gain (loss) on sale of fixed assets                 |  |      | 4.2   |   |      |   | 0.5  |      |  |   | (0.8 | )
|Other                                               |  |      | (0.5  | ) |      |   | (0.9 | )    |  |   | (1.6 | )
|                                                    |  |      |       |   |      |   |      |      | 
|Other, net                                          |  |      | 13.3  |   |      |   | 7.4  |      |  |   | 3.0  |  
|                                                    |  |      |       |   |      |   |      |      | 
|Total other income (expense), net                   |  | $    | 20.4  |   |      | $ | 11.0 |      |  | $ | 9.1  |  
|                                                    |  |      |       |   |      |   |      |      | 



| |                                    
| | -----------------------------------
| | Supplemental Cash Flow Information:

|                                     |  |      |      |  |      |   |     |      |  |   |        |  
|------------------------------------ |  | ---- | ---- |  | ---- | - | --- | ---- |  | - | ------ | -
|                                     |  | 2005 |      |  | 2004 |   |     | 2003 | 
|                                     |  |      |      |  |      |   |     |      | 
|Income taxes paid (refunds received) |  | $    | 9.0  |  |      | $ | 1.2 |      |  | $ | (142.7 | )
|Interest paid                        |  | $    | 10.0 |  |      | $ | 8.5 |      |  | $ | 1.5    |  



| |                                               
| | ----------------------------------------------
| | Supplemental Schedule of Investing Activities:

|                                   |  |      |       |   |      |   |        |      |  |   |      |  
|---------------------------------- |  | ---- | ----- | - | ---- | - | ------ | ---- |  | - | ---- | -
|                                   |  | 2005 |       |   | 2004 |   |        | 2003 | 
|                                   |  |      |       |   |      |   |        |      | 
|Acquisitions:                      |  |      |       |   |      |   |        |      |  |   |      |  
|Fair value of assets acquired      |  | $    | 179.4 |   |      | $ | 454.9  |      |  | $ |     |  
|Less: Liabilities assumed          |  |      | (5.8  | ) |      |   | (148.8 | )    |  |   |     |  
|Acquisition costs                  |  |      |      |   |      |   | 5.6    |      |  |   |     |  
|Cash acquired                      |  |      | (0.4  | ) |      |   | (16.5  | )    |  |   |     |  
|                                   |  |      |       |   |      |   |        |      | 
|Acquisitions, net of cash acquired |  | $    | 173.2 |   |      | $ | 295.2  |      |  | $ |     |  
|                                   |  |      |       |   |      |   |        |      | 
|Divestitures:                      |  |      |       |   |      |   |        |      |  |   |      |  
|Proceeds from divestitures         |  | $    | 33.6  |   |      | $ | 78.9   |      |  | $ |     |  
|Carrying value of assets disposed  |  |      |      |   |      |   |       |      |  |   | 2.6  |  
|Less: Liabilities disposed         |  |      |      |   |      |   |       |      |  |   | (0.7 | )
|Cash disposed                      |  |      | (0.8  | ) |      |   | (11.0  | )    |  |   |     |  
|                                   |  |      |       |   |      |   |        |      | 
|Divestitures, net of cash disposed |  | $    | 32.8  |   |      | $ | 67.9   |      |  | $ | 1.9  |  
|                                   |  |      |       |   |      |   |        |      | 

55



---



##### 



ADC Telecommunications, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)






| |                                        
| | ---------------------------------------
| | Consolidated Balance Sheet Information:

|                              |  |      |        |   |      |   |        |  
|----------------------------- |  | ---- | ------ | - | ---- | - | ------ | -
|                              |  | 2005 |        |   | 2004 |  
|                              |  |      |        |   |      |  
|Inventories:                  |  |      |        |   |      |   |        |  
|Purchased materials           |  | $    | 100.2  |   |      | $ | 81.0   |  
|Manufactured products         |  |      | 66.9   |   |      |   | 50.8   |  
|Work-in-process               |  |      | 9.1    |   |      |   | 7.7    |  
|Less: Inventory reserve       |  |      | (35.7  | ) |      |   | (41.9  | )
|                              |  |      |        |   |      |  
|Total                         |  | $    | 140.5  |   |      | $ | 97.6   |  
|                              |  |      |        |   |      |  
|Property and Equipment:       |  |      |        |   |      |   |        |  
|Land and buildings            |  | $    | 137.2  |   |      | $ | 135.3  |  
|Machinery and equipment       |  |      | 364.3  |   |      |   | 363.0  |  
|Furniture and fixtures        |  |      | 50.8   |   |      |   | 38.1   |  
|Less accumulated depreciation |  |      | (351.2 | ) |      |   | (314.9 | )
|                              |  |      |        |   |      |  
|Total                         |  |      | 201.1  |   |      |   | 221.5  |  
|Construction-in-process       |  |      | 20.0   |   |      |   | 11.0   |  
|                              |  |      |        |   |      |  
|Total, net                    |  | $    | 221.1  |   |      | $ | 232.5  |  
|                              |  |      |        |   |      |  
|Other Assets:                 |  |      |        |   |      |   |        |  
|Notes receivable, net         |  | $    | 7.8    |   |      | $ | 22.6   |  
|Deferred financing costs      |  |      | 6.5    |   |      |   | 6.9    |  
|Other                         |  |      | 5.4    |   |      |   | 1.6    |  
|                              |  |      |        |   |      |  
|Total                         |  | $    | 19.7   |   |      | $ | 31.1   |  
|                              |  |      |        |   |      |  
|Other Accrued Liabilities:    |  |      |        |   |      |   |        |  
|Deferred Revenue              |  | $    | 2.5    |   |      | $ | 4.5    |  
|Warranty reserve              |  |      | 10.8   |   |      |   | 14.4   |  
|Accrued taxes (non-income)    |  |      | 51.2   |   |      |   | 15.7   |  
|Non-trade payables            |  |      | 8.7    |   |      |   | 31.8   |  
|Other                         |  |      | 5.6    |   |      |   | 14.5   |  
|                              |  |      |        |   |      |  
|Total                         |  | $    | 78.8   |   |      | $ | 80.9   |  
|                              |  |      |        |   |      |  



|        |             
|------- | ------------
|Note 3: | Acquisitions





56



---



##### 



ADC Telecommunications, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)
















|                          |  |                 |       |  |             |   |     |              |  |   |       | 
|------------------------- |  | --------------- | ----- |  | ----------- | - | --- | ------------ |  | - | ----- | 
|                          |  | FONS            |       |  | OpenCell    |   |     | KRONE        | 
|                          |  |                 |       |  |             |   |     |              | 
|                          |  | August 26, 2005 |       |  | May 6, 2005 |   |     | May 18, 2004 | 
|                          |  |                 |       |  |             |   |     |              | 
|Current assets            |  | $               | 14.6  |  |             | $ | 1.4 |              |  | $ | 119.8 | 
|Intangible assets         |  |                 | 83.3  |  |             |   | 4.7 |              |  |   | 78.1  | 
|Goodwill                  |  |                 | 70.9  |  |             |   |    |              |  |   | 169.6 | 
|Other long-term assets    |  |                 | 3.2   |  |             |   | 1.3 |              |  |   | 83.9  | 
|                          |  |                 |       |  |             |   |     |              | 
|Total assets acquired     |  |                 | 172.0 |  |             |   | 7.4 |              |  |   | 451.4 | 
|                          |  |                 |       |  |             |   |     |              | 
|Current liabilities       |  |                 | 5.5   |  |             |   | 0.3 |              |  |   | 76.4  | 
|Long-term liabilities     |  |                 |      |  |             |   |    |              |  |   | 64.1  | 
|                          |  |                 |       |  |             |   |     |              | 
|Total liabilities assumed |  |                 | 5.5   |  |             |   | 0.3 |              |  |   | 140.5 | 
|                          |  |                 |       |  |             |   |     |              | 
|Net assets acquired       |  |                 | 166.5 |  |             |   | 7.1 |              |  |   | 310.9 | 
|Less cash acquired        |  |                 | 0.4   |  |             |   |    |              |  |   | 16.5  | 
|                          |  |                 |       |  |             |   |     |              | 
|Net cash paid             |  | $               | 166.1 |  |             | $ | 7.1 |              |  | $ | 294.4 | 
|                          |  |                 |       |  |             |   |     |              | 



57



---



##### 



ADC Telecommunications, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)






|                                            |  |      |         |  |      |   |       |      |  |   |       |  
|------------------------------------------- |  | ---- | ------- |  | ---- | - | ----- | ---- |  | - | ----- | -
|                                            |  | 2005 |         |  | 2004 |   |       | 2003 | 
|                                            |  |      |         |  |      |   |       |      | 
|Revenue                                     |  | $    | 1,240.1 |  |      | $ | 988.0 |      |  | $ | 883.4 |  
|Income (loss) from continuing operations(1) |  | $    | 97.5    |  |      | $ | 18.8  |      |  | $ | (50.2 | )
|Net income per share  basic                |  | $    | 0.84    |  |      | $ | 0.16  |      |  | $ | (0.44 | )
|Net income per share  diluted              |  | $    | 0.74    |  |      | $ | 0.16  |      |  | $ | (0.44 | )






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Includes restructuring and impairment charges of
    $14.7 million and $0.3 million, respectively, for the
    year ended October 31, 2005, $11.9 million and
    $1.7 million, respectively, for the year ended
    October 31, 2004, and $27.6 million and
    $15.6 million, respectively, for the year ended
    October 31, 2003 for the ADC stand-alone business. KRONE
    stand-alone business includes restructuring charges of
    $2.4 million and $4.3 million for the years ended
    October 31, 2004 and 2003, respectively. FONS stand-alone
    business includes impairment charges of $2.5 million for
    the year ended October 31, 2004.





|        |                        
|------- | -----------------------
|Note 4: | Discontinued Operations

Accounting for
the Impairment or Disposal of Long-Lived Assets




| |                                    
| | -----------------------------------
| | ADC Systems Integration UK Limited.





| |        
| | -------
| | Metrica



58



---



##### 



ADC Telecommunications, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)






| |              
| | -------------
| | BroadAccess40







| |               
| | --------------
| | Cuda/ FastFlow





| |            
| | -----------
| | Singl.eView





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

59



---



##### 



ADC Telecommunications, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)






|        |                                                       
|------- | ------------------------------------------------------
|Note 5: | Net Income (Loss) from Continuing Operations Per Share



|                                                           |  |      |       |  |      |   |       |      |  |   |       |  
|---------------------------------------------------------- |  | ---- | ----- |  | ---- | - | ----- | ---- |  | - | ----- | -
|                                                           |  | 2005 |       |  | 2004 |   |       | 2003 | 
|                                                           |  |      |       |  |      |   |       |      | 
|Numerator:                                                 |  |      |       |  |      |   |       |      |  |   |       |  
|Net income (loss) from continuing operations               |  | $    | 85.5  |  |      | $ | 33.6  |      |  | $ | (39.8 | )
|Convertible note interest                                  |  |      | 8.6   |  |      |   |      |      |  |   |      |  
|                                                           |  |      |       |  |      |   |       |      | 
|                                                           |  | $    | 94.1  |  |      | $ | 33.6  |      |  | $ | (39.8 | )
|                                                           |  |      |       |  |      |   |       |      | 
|Denominator:                                               |  |      |       |  |      |   |       |      |  |   |       |  
|Weighted average common shares outstanding                 |  |      | 116.0 |  |      |   | 115.5 |      |  |   | 114.8 |  
|Convertible notes assumed converted to common stock        |  |      | 14.2  |  |      |   |      |      |  |   |      |  
|Employee options and other                                 |  |      | 0.9   |  |      |   | 0.5   |      |  |   |      |  
|                                                           |  |      |       |  |      |   |       |      | 
|Weighted average common shares outstanding                 |  |      | 131.1 |  |      |   | 116.0 |      |  |   | 114.8 |  
|                                                           |  |      |       |  |      |   |       |      | 
|Basic income (loss) per share from continuing operations   |  | $    | 0.74  |  |      | $ | 0.29  |      |  | $ | (0.35 | )
|Diluted income (loss) per share from continuing operations |  | $    | 0.72  |  |      | $ | 0.29  |      |  | $ | (0.35 | )
|                                                           |  |      |       |  |      |   |       |      | 





anti-dilutive, net-of


60



---



##### 



ADC Telecommunications, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)






|        |            
|------- | -----------
|Note 6: | Investments



|                                                 |  |       |       |  |            |   |            |  |  |       |     |  |  |   |       | 
|------------------------------------------------ |  | ----- | ----- |  | ---------- | - | ---------- |  |  | ----- | --- |  |  | - | ----- | 
|                                                 |  | Cost  |       |  | Unrealized |   | Unrealized |  |  | Fair  |    
|                                                 |  | Basis |       |  | Gain       |   | Loss       |  |  | Value |    
|                                                 |  |       |       |  |            |   |            |  |  |       |    
|2005                                             |  |       |       |  |            |   |            |  |  |       |     |  |  |   |       | 
|U.S. Treasury and other U.S. government agencies |  | $     | 26.2  |  |            | $ |           |  |  | $     | 0.3 |  |  | $ | 25.9  | 
|Corporate bonds                                  |  |       | 13.9  |  |            |   |           |  |  |       | 0.2 |  |  |   | 13.7  | 
|Equity securities                                |  |       | 0.5   |  |            |   |           |  |  |       | 0.2 |  |  |   | 0.3   | 
|Auction rate securities                          |  |       | 307.5 |  |            |   |           |  |  |       |    |  |  |   | 307.5 | 
|                                                 |  |       |       |  |            |   |            |  |  |       |     | 
|Total available-for-sale securities              |  | $     | 348.1 |  |            | $ |           |  |  | $     | 0.7 |  |  | $ | 347.4 | 
|2004                                             |  |       |       |  |            |   |            |  |  |       |     |  |  |   |       | 
|U.S. Treasury and other U.S. government agencies |  | $     | 25.7  |  |            | $ |           |  |  | $     | 0.1 |  |  | $ | 25.6  | 
|Corporate bonds                                  |  |       | 8.3   |  |            |   |           |  |  |       |    |  |  |   | 8.3   | 
|Equity securities                                |  |       | 0.5   |  |            |   |           |  |  |       | 0.3 |  |  |   | 0.2   | 
|Auction rate securities                          |  |       | 427.3 |  |            |   |           |  |  |       |    |  |  |   | 427.3 | 
|                                                 |  |       |       |  |            |   |            |  |  |       |     | 
|Total available-for-sale securities              |  | $     | 461.8 |  |            | $ |           |  |  | $     | 0.4 |  |  | $ | 461.4 | 



|                                  |  |            |       | 
|--------------------------------- |  | ---------- | ----- | 
|                                  |  | Fair Value |      
|                                  |  |            |      
|Due in one year or less           |  | $          | 335.3 | 
|Due in one year through two years |  |            | 12.1  | 
|                                  |  |            |      
|Total                             |  | $          | 347.4 | 
|                                  |  |            |      







|        |                               
|------- | ------------------------------
|Note 7: | Goodwill and Intangible Assets



61



---



##### 



ADC Telecommunications, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)






|                                  |  |   |       |  
|--------------------------------- |  | - | ----- | -
|Balances as of October 31, 2003   |  | $ |      |  
|Goodwill acquired during the year |  |   | 175.7 |  
|Purchase accounting adjustments   |  |   | 4.4   |  
|                                  |  |   |      
|Balance as of October 31, 2004    |  |   | 180.1 |  
|                                  |  |   |      
|Goodwill acquired during the year |  |   | 70.9  |  
|Purchase accounting adjustments   |  |   | (10.5 | )
|                                  |  |   |      
|Balance as of October 31, 2005    |  | $ | 240.5 |  
|                                  |  |   |      

Goodwill and
Other Intangible Assets,






|                       |  |          |       |  |              |   |      |     |           |            |            |  |  |  |      |    
|---------------------- |  | -------- | ----- |  | ------------ | - | ---- | --- | --------- | ---------- | ---------- |  |  |  | ---- | ---
|                       |  | Gross    |       |  |              |   |      |     | Estimated |           
|                       |  | Carrying |       |  | Accumulated  |   |      |     |           | Life Range |           
|2005                   |  | Amounts  |       |  | Amortization |   |      | Net |           |            | (In Years) | 
|                       |  |          |       |  |              |   |      |     |           |            |            | 
|Technology             |  | $        | 54.0  |  |              | $ | 11.3 |     |           | $          | 42.7       |  |  |  | 5-7  |    
|Trade name/trademarks  |  |          | 26.2  |  |              |   | 2.0  |     |           |            | 24.2       |  |  |  | 2-20 |    
|Distributor network    |  |          | 10.1  |  |              |   | 1.5  |     |           |            | 8.6        |  |  |  | 10   |    
|Customer list          |  |          | 41.8  |  |              |   | 3.5  |     |           |            | 38.3       |  |  |  | 2-7  |    
|Patents                |  |          | 25.4  |  |              |   | 10.7 |     |           |            | 14.7       |  |  |  | 3-7  |    
|Non-compete agreements |  |          | 12.6  |  |              |   | 0.6  |     |           |            | 12.0       |  |  |  | 2-5  |    
|Other                  |  |          | 30.4  |  |              |   | 5.9  |     |           |            | 24.5       |  |  |  | 1-13 |    
|                       |  |          |       |  |              |   |      |     |           |            |            | 
|Total                  |  | $        | 200.5 |  |              | $ | 35.5 |     |           | $          | 165.0      |  |  |  | 8    | (1)
|                       |  |          |       |  |              |   |      |     |           |            |            | 

|                      |  |          |       |  |              |   |      |     |           |            |            |  |  |  |      |    
|--------------------- |  | -------- | ----- |  | ------------ | - | ---- | --- | --------- | ---------- | ---------- |  |  |  | ---- | ---
|                      |  | Gross    |       |  |              |   |      |     | Estimated |           
|                      |  | Carrying |       |  | Accumulated  |   |      |     |           | Life Range |           
|2004                  |  | Amounts  |       |  | Amortization |   |      | Net |           |            | (In Years) | 
|                      |  |          |       |  |              |   |      |     |           |            |            | 
|Technology            |  | $        | 28.9  |  |              | $ | 2.3  |     |           | $          | 26.6       |  |  |  | 5-7  |    
|Trade name/trademarks |  |          | 25.3  |  |              |   | .6   |     |           |            | 24.7       |  |  |  | 5-20 |    
|Distributor network   |  |          | 10.1  |  |              |   | .5   |     |           |            | 9.6        |  |  |  | 10   |    
|Customer list         |  |          | 4.5   |  |              |   | .5   |     |           |            | 4.0        |  |  |  | 2    |    
|Patents               |  |          | 19.8  |  |              |   | 7.9  |     |           |            | 11.9       |  |  |  | 3-7  |    
|Other                 |  |          | 18.3  |  |              |   | 2.1  |     |           |            | 16.2       |  |  |  | 1-13 |    
|                      |  |          |       |  |              |   |      |     |           |            |            | 
|Total                 |  | $        | 106.9 |  |              | $ | 13.9 |     |           | $          | 93.0       |  |  |  | 10   | (1)
|                      |  |          |       |  |              |   |      |     |           |            |            | 






|    |                       
|--- | ----------------------
|(1) | Weighted average life.

62



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##### 



ADC Telecommunications, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)






|           |  |   |       | 
|---------- |  | - | ----- | 
|2006       |  | $ | 29.6  | 
|2007       |  |   | 27.4  | 
|2008       |  |   | 26.7  | 
|2009       |  |   | 24.1  | 
|2010       |  |   | 18.2  | 
|Thereafter |  |   | 39.0  | 
|           |  |   |      
|Total      |  | $ | 165.0 | 
|           |  |   |      



|        |              
|------- | -------------
|Note 8: | Notes Payable

6-month






63



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ADC Telecommunications, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)










|        |                       
|------- | ----------------------
|Note 9: | Shareowner Rights Plan





|         |             
|-------- | ------------
|Note 10: | Income Taxes



|                                        |  |      |      |   |      |   |      |      |  |   |       |  
|--------------------------------------- |  | ---- | ---- | - | ---- | - | ---- | ---- |  | - | ----- | -
|                                        |  | 2005 |      |   | 2004 |   |      | 2003 | 
|                                        |  |      |      |   |      |   |      |      | 
|United States                           |  | $    | 95.9 |   |      | $ | 29.0 |      |  | $ | (12.3 | )
|Foreign                                 |  |      | (3.2 | ) |      |   | 6.6  |      |  |   | (32.6 | )
|                                        |  |      |      |   |      |   |      |      | 
|Total income (loss) before income taxes |  | $    | 92.7 |   |      | $ | 35.6 |      |  | $ | (44.9 | )
|                                        |  |      |      |   |      |   |      |      | 

64



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##### 



ADC Telecommunications, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)






|                          |  |      |      |   |      |   |      |      |  |   |      |  
|------------------------- |  | ---- | ---- | - | ---- | - | ---- | ---- |  | - | ---- | -
|                          |  | 2005 |      |   | 2004 |   |      | 2003 | 
|                          |  |      |      |   |      |   |      |      | 
|Current taxes:            |  |      |      |   |      |   |      |      |  |   |      |  
|Federal                   |  | $    |     |   |      | $ |     |      |  | $ | (1.0 | )
|Foreign                   |  |      | 6.8  |   |      |   | 2.1  |      |  |   | (0.1 | )
|State                     |  |      | (0.5 | ) |      |   | (0.7 | )    |  |   | (4.0 | )
|                          |  |      |      |   |      |   |      |      | 
|                          |  | $    | 6.3  |   |      | $ | 1.4  |      |  | $ | (5.1 | )
|                          |  |      |      |   |      |   |      |      | 
|Deferred taxes:           |  |      |      |   |      |   |      |      |  |   |      |  
|Federal                   |  |      |     |   |      |   |     |      |  |   |     |  
|Foreign                   |  |      | 0.9  |   |      |   | 0.6  |      |  |   |     |  
|State                     |  |      |     |   |      |   |     |      |  |   |     |  
|                          |  |      |      |   |      |   |      |      | 
|                          |  |      | 0.9  |   |      |   | 0.6  |      |  |   |     |  
|                          |  |      |      |   |      |   |      |      | 
|Total (benefit) provision |  | $    | 7.2  |   |      | $ | 2.0  |      |  | $ | (5.1 | )
|                          |  |      |      |   |      |   |      |      | 



|                                                 |  |      |     |   |      |  |     |      |  |  |     |   
|------------------------------------------------ |  | ---- | --- | - | ---- |  | --- | ---- |  |  | --- | --
|                                                 |  | 2005 |     |   | 2004 |  |     | 2003 | 
|                                                 |  |      |     |   |      |  |     |      | 
|Federal statutory rate                           |  |      | 35  | % |      |  | 35  | %    |  |  | (35 | )%
|Impairment charges                               |  |      |    |   |      |  |    |      |  |  | (22 | ) 
|Research and development tax credits             |  |      |    |   |      |  |    |      |  |  | (2  | ) 
|Change in deferred tax asset valuation allowance |  |      | (13 | ) |      |  | (25 | )    |  |  | 59  |   
|State income taxes, net                          |  |      | 1   |   |      |  | (2  | )    |  |  | (38 | ) 
|Foreign income taxes                             |  |      | (14 | ) |      |  | (4  | )    |  |  | 35  |   
|Other, net                                       |  |      | (1  | ) |      |  | 1   |      |  |  | (8  | ) 
|                                                 |  |      |     |   |      |  |     |      | 
|Effective income tax rate                        |  |      | 8   | % |      |  | 5   | %    |  |  | (11 | )%
|                                                 |  |      |     |   |      |  |     |      | 

65



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##### 



ADC Telecommunications, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)






|                                            |  |      |          |   |      |   |          |  
|------------------------------------------- |  | ---- | -------- | - | ---- | - | -------- | -
|                                            |  | 2005 |          |   | 2004 |  
|                                            |  |      |          |   |      |  
|Current deferred tax assets:                |  |      |          |   |      |   |          |  
|Asset valuation reserves                    |  | $    | 19.6     |   |      | $ | 20.6     |  
|Accrued liabilities                         |  |      | 19.7     |   |      |   | 22.7     |  
|                                            |  |      |          |   |      |  
|Subtotal                                    |  | $    | 39.3     |   |      | $ | 43.3     |  
|                                            |  |      |          |   |      |  
|Non-current deferred tax assets:            |  |      |          |   |      |   |          |  
|Intangible assets                           |  | $    | 237.2    |   |      | $ | 316.7    |  
|Depreciation                                |  |      | 17.5     |   |      |   | 12.3     |  
|Net operating loss and tax credit carryover |  |      | 532.3    |   |      |   | 468.0    |  
|Capital loss carryover                      |  |      | 225.6    |   |      |   | 226.7    |  
|Investments and other                       |  |      | 27.4     |   |      |   | 42.2     |  
|                                            |  |      |          |   |      |  
|Subtotal                                    |  |      | 1,040.0  |   |      |   | 1,065.9  |  
|                                            |  |      |          |   |      |  
|Total deferred tax assets                   |  | $    | 1,079.3  |   |      | $ | 1,109.2  |  
|                                            |  |      |          |   |      |  
|Current deferred tax liabilities:           |  |      |          |   |      |   |          |  
|Accrued liabilities                         |  | $    | (4.1     | ) |      | $ | (4.7     | )
|                                            |  |      |          |   |      |  
|Subtotal                                    |  |      | (4.1     | ) |      |   | (4.7     | )
|                                            |  |      |          |   |      |  
|Non-current deferred tax liabilities:       |  |      |          |   |      |   |          |  
|Intangible assets                           |  | $    | (27.5    | ) |      | $ | (29.0    | )
|Investments and other                       |  |      | (9.1     | ) |      |   | (8.1     | )
|                                            |  |      |          |   |      |  
|Subtotal                                    |  |      | (36.6    | ) |      |   | (37.1    | )
|                                            |  |      |          |   |      |  
|Total deferred tax liabilities              |  | $    | (40.7    | ) |      | $ | (41.8    | )
|                                            |  |      |          |   |      |  
|Net deferred tax assets                     |  | $    | 1,038.6  |   |      | $ | 1,067.4  |  
|Deferred tax asset valuation allowance      |  |      | (1,039.9 | ) |      |   | (1,068.9 | )
|                                            |  |      |          |   |      |  
|Net deferred tax liabilities                |  | $    | (1.3     | ) |      | $ | (1.5     | )
|                                            |  |      |          |   |      |  

Accounting for Income Taxes


66



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ADC Telecommunications, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)






















|         |                       
|-------- | ----------------------
|Note 11: | Employee Benefit Plans

Retirement Savings Plans:


67



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##### 



ADC Telecommunications, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)






Pension Benefits:




|                                                                          |  |             |       |   |      |   |       |  
|------------------------------------------------------------------------- |  | ----------- | ----- | - | ---- | - | ----- | -
|                                                                          |  | October 31, |      
|                                                                          |  |             |      
|                                                                          |  | 2005        |       |   | 2004 |  
|                                                                          |  |             |       |   |      |  
|Reconciliation of projected benefit obligation                            |  |             |       |   |      |   |       |  
|Beginning balance                                                         |  | $           | 62.8  |   |      | $ |      |  
|Amount assumed in the KRONE acquisition                                   |  |             |      |   |      |   | 63.9  |  
|Service cost                                                              |  |             | 0.2   |   |      |   | 0.2   |  
|Interest cost                                                             |  |             | 3.0   |   |      |   | 1.5   |  
|Actuarial (gain) loss                                                     |  |             | 9.2   |   |      |   | (1.1  | )
|Foreign currency exchange rate changes                                    |  |             | 0.1   |   |      |   |      |  
|Benefit payments                                                          |  |             | (3.4  | ) |      |   | (1.7  | )
|                                                                          |  |             |       |   |      |  
|Ending Balance                                                            |  | $           | 71.9  |   |      | $ | 62.8  |  
|                                                                          |  |             |       |   |      |  
|Funded status of the plan                                                 |  |             |       |   |      |   |       |  
|Plan assets at fair value less than benefit obligation                    |  | $           | (71.9 | ) |      | $ | (62.8 | )
|Unrecognized net actuarial (gain) loss                                    |  |             | 8.5   |   |      |   | (1.1  | )
|                                                                          |  |             |       |   |      |  
|Net amount recognized                                                     |  | $           | (63.4 | ) |      | $ | (63.9 | )
|                                                                          |  |             |       |   |      |  
|Amounts recognized in the Consolidated Balance Sheet as of
    October 31 |  |             |       |   |      |   |       |  
|Prepaid benefit cost                                                      |  | $           |      |   |      | $ |      |  
|Accumulated Benefit Obligation                                            |  |             | 70.6  |   |      |   | 63.9  |  
|Accumulated other comprehensive income, pre-tax                           |  |             | (7.2  | ) |      |   |      |  
|                                                                          |  |             |       |   |      |  
|Net amount recognized                                                     |  | $           | 63.4  |   |      | $ | 63.9  |  
|                                                                          |  |             |       |   |      |  

68



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##### 



ADC Telecommunications, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)






|                          |  |             |     |  |      |   |     | 
|------------------------- |  | ----------- | --- |  | ---- | - | --- | 
|                          |  | October 31, |    
|                          |  |             |    
|                          |  | 2005        |     |  | 2004 |  
|                          |  |             |     |  |      |  
|Service cost              |  | $           | 0.2 |  |      | $ | 0.2 | 
|Interest cost             |  |             | 3.0 |  |      |   | 1.5 | 
|                          |  |             |     |  |      |  
|Net periodic pension cost |  | $           | 3.2 |  |      | $ | 1.7 | 
|                          |  |             |     |  |      |  



|                                                                                |  |             |      |   |      |  |      |  
|------------------------------------------------------------------------------- |  | ----------- | ---- | - | ---- |  | ---- | -
|                                                                                |  | October 31, |     
|                                                                                |  |             |     
|                                                                                |  | 2005        |      |   | 2004 | 
|                                                                                |  |             |      |   |      | 
|Weighted average assumptions used to determine benefit
    obligations          |  |             |      |   |      |  |      |  
|Discount rate                                                                   |  |             | 4.25 | % |      |  | 5.25 | %
|Compensation rate increase                                                      |  |             | 2.50 | % |      |  | 2.50 | %
|Weighted average assumptions used to determine net cost for
    the years ended |  |             |      |   |      |  |      |  
|Discount rate                                                                   |  |             | 5.25 | % |      |  | 5.25 | %
|Compensation rate increase                                                      |  |             | 2.50 | % |      |  | 2.50 | %





|                      |  |   |      | 
|--------------------- |  | - | ---- | 
|2006                  |  | $ | 3.7  | 
|2007                  |  |   | 3.7  | 
|2008                  |  |   | 3.8  | 
|2009                  |  |   | 3.8  | 
|2010                  |  |   | 3.9  | 
|Five Years Thereafter |  | $ | 20.5 | 



|         |                   
|-------- | ------------------
|Note 12: | Stock Option Plans



69



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##### 



ADC Telecommunications, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)






|                                |  |              |      |               |                  |   |            |        |  |  |      |  
|------------------------------- |  | ------------ | ---- | ------------- | ---------------- | - | ---------- | ------ |  |  | ---- | -
|                                |  |              |      | Stock Options |                  |   | Restricted |       
|                                |  | Stock Option |      |               | Weighted Average |   |            | Stock  | 
|                                |  | Shares       |      |               | Exercise Price   |   |            | Awards | 
|                                |  |              |      |               |                  |   |            |        | 
|Outstanding at October 31, 2002 |  |              | 15.4 |               |                  | $ | 66.78      |        |  |  | 0.2  |  
|Granted                         |  |              | 4.3  |               |                  |   | 15.96      |        |  |  | 0.4  |  
|Exercised                       |  |              | (0.4 | )             |                  |   | (9.94      | )      |  |  |     |  
|Restrictions lapsed             |  |              |     |               |                  |   |           |        |  |  | (0.1 | )
|Canceled                        |  |              | (8.7 | )             |                  |   | (72.03     | )      |  |  | (0.2 | )
|                                |  |              |      |               |                  |   |            |        | 
|Outstanding at October 31, 2003 |  |              | 10.6 |               |                  |   | 42.98      |        |  |  | 0.3  |  
|Granted                         |  |              | 3.5  |               |                  |   | 22.33      |        |  |  |     |  
|Exercised                       |  |              | (0.3 | )             |                  |   | (10.99     | )      |  |  |     |  
|Restrictions lapsed             |  |              |     |               |                  |   |           |        |  |  | (0.1 | )
|Canceled                        |  |              | (5.5 | )             |                  |   | (49.77     | )      |  |  |     |  
|                                |  |              |      |               |                  |   |            |        | 
|Outstanding at October 31, 2004 |  |              | 8.3  |               |                  |   | 29.53      |        |  |  | 0.2  |  
|Granted                         |  |              | 1.1  |               |                  |   | 18.65      |        |  |  |     |  
|Exercised                       |  |              | (0.8 | )             |                  |   | (15.90     | )      |  |  |     |  
|Restrictions lapsed             |  |              |     |               |                  |   |           |        |  |  | (0.1 | )
|Canceled                        |  |              | (1.8 | )             |                  |   | (31.05     | )      |  |  |     |  
|                                |  |              |      |               |                  |   |            |        | 
|Outstanding at October 31, 2005 |  |              | 6.8  |               |                  |   | 28.95      |        |  |  | 0.1  |  
|                                |  |              |      |               |                  |   |            |        | 
|Exercisable at October 31, 2005 |  |              | 4.6  |               |                  | $ | 33.70      |        |  |  |     |  
|                                |  |              |      |               |                  |   |            |        | 



|                                 |  |                |       |                  |                  |  |      |                  |  |        |                |  |          |                |       |  |  |   |        | 
|-------------------------------- |  | -------------- | ----- | ---------------- | ---------------- |  | ---- | ---------------- |  | ------ | -------------- |  | -------- | -------------- | ----- |  |  | - | ------ | 
|                                 |  |                |       | Weighted Average |                  |  |      |                  |  |        |               
|                                 |  | Number         |       |                  | Remaining        |  |      |                  |  | Number |                |  | Weighted |               
|                                 |  | Outstanding    |       |                  | Contractual Life |  |      | Weighted Average |  |        | Exercisable    |  |          | Average        |      
|Range of Exercise Prices Between |  | (In Thousands) |       |                  | (In Years)       |  |      | Exercise Price   |  |        | (In Thousands) |  |          | Exercise Price |      
|                                 |  |                |       |                  |                  |  |      |                  |  |        |                |  |          |                |      
|$  8.05 - $ 15.26                |  |                | 282   |                  |                  |  | 7.54 |                  |  | $      | 12.65          |  |          |                | 227   |  |  | $ | 12.06  | 
|15.68 -   15.82                  |  |                | 1,223 |                  |                  |  | 7.09 |                  |  |        | 15.82          |  |          |                | 1,120 |  |  |   | 15.82  | 
|16.03 -   18.62                  |  |                | 658   |                  |                  |  | 8.17 |                  |  |        | 17.12          |  |          |                | 318   |  |  |   | 16.97  | 
|18.69 -   18.76                  |  |                | 952   |                  |                  |  | 9.13 |                  |  |        | 18.76          |  |          |                |      |  |  |   |       | 
|19.11 -   19.81                  |  |                | 836   |                  |                  |  | 5.40 |                  |  |        | 19.78          |  |          |                | 612   |  |  |   | 19.79  | 
|20.02 -   24.22                  |  |                | 749   |                  |                  |  | 8.29 |                  |  |        | 20.62          |  |          |                | 244   |  |  |   | 20.93  | 
|24.43 -   30.59                  |  |                | 806   |                  |                  |  | 5.98 |                  |  |        | 29.63          |  |          |                | 806   |  |  |   | 29.63  | 
|31.08 -   53.76                  |  |                | 702   |                  |                  |  | 4.57 |                  |  |        | 42.03          |  |          |                | 692   |  |  |   | 41.93  | 
|53.92 -  286.56                  |  |                | 590   |                  |                  |  | 3.49 |                  |  |        | 97.45          |  |          |                | 590   |  |  |   | 97.45  | 
|$293.56 - $293.56                |  |                | 7     |                  |                  |  | 4.68 |                  |  |        | 293.56         |  |          |                | 7     |  |  |   | 293.56 | 
|                                 |  |                |       |                  |                  |  |      |                  |  |        |                |  |          |                |      
|                                 |  |                | 6,805 |                  |                  |  | 6.71 |                  |  | $      | 28.95          |  |          |                | 4,616 |  |  | $ | 33.70  | 
|                                 |  |                |       |                  |                  |  |      |                  |  |        |                |  |          |                |      

70



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##### 



ADC Telecommunications, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)






|                           |  |      |           |   |      |  |           |      |  |  |           |  
|-------------------------- |  | ---- | --------- | - | ---- |  | --------- | ---- |  |  | --------- | -
|                           |  | 2005 |           |   | 2004 |  |           | 2003 | 
|                           |  |      |           |   |      |  |           |      | 
|Risk-free interest rate    |  |      | 3.83      | % |      |  | 3.13      | %    |  |  | 2.62      | %
|Expected dividend          |  |      |          |   |      |  |          |      |  |  |          |  
|Expected volatility factor |  |      | 50.2      | % |      |  | 59.4      | %    |  |  | 66.9      | %
|Expected option term       |  |      | 4.5 years |   |      |  | 4.6 years |      |  |  | 3.2 years |  









| |                       
| | ----------------------
| | Restricted Stock Units









|         |                                              
|-------- | ---------------------------------------------
|Note 13: | Accumulated Other Comprehensive Income (Loss)



71



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##### 



ADC Telecommunications, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)






|                                                           |  |             |       |   |                 |   |      |            |  |   |       |   |  |   |       |  
|---------------------------------------------------------- |  | ----------- | ----- | - | --------------- | - | ---- | ---------- |  | - | ----- | - |  | - | ----- | -
|                                                           |  | Foreign     |       |   | Unrealized      |   |      | Minimum    |  |   |      
|                                                           |  | Currency    |       |   | Gain (Loss)     |   |      | Pension    |  |   |      
|                                                           |  | Translation |       |   | On AFS          |   |      | Liability  |  |   |      
|                                                           |  | Adjustment  |       |   | Securities, net |   |      | Adjustment |  |   | Total |  
|                                                           |  |             |       |   |                 |   |      |            |  |   |       |  
|Balance, October 31, 2002                                  |  | $           | (14.7 | ) |                 | $ |     |            |  | $ |      |   |  | $ | (14.7 | )
|Translation loss                                           |  |             | (10.7 | ) |                 |   |     |            |  |   |      |   |  |   | (10.7 | )
|Unrealized gain on securities, net of taxes of $0.0        |  |             |      |   |                 |   | 4.2  |            |  |   |      |   |  |   | 4.2   |  
|                                                           |  |             |       |   |                 |   |      |            |  |   |       |  
|Balance, October 31, 2003                                  |  |             | (25.4 | ) |                 |   | 4.2  |            |  |   |      |   |  |   | (21.2 | )
|Translation gain, net of taxes of $0.0                     |  |             | 12.3  |   |                 |   |     |            |  |   |      |   |  |   | 12.3  |  
|Unrealized loss on securities, net of taxes of $0.0        |  |             |      |   |                 |   | (0.4 | )          |  |   |      |   |  |   | (0.4  | )
|Adjustment for sale of securities, net of taxes of $0.0    |  |             |      |   |                 |   | (4.2 | )          |  |   |      |   |  |   | (4.2  | )
|                                                           |  |             |       |   |                 |   |      |            |  |   |       |  
|Balance, October 31, 2004                                  |  |             | (13.1 | ) |                 |   | (0.4 | )          |  |   |      |   |  |   | (13.5 | )
|Translation loss, net of taxes of $0.0                     |  |             | (4.6  | ) |                 |   |     |            |  |   |      |   |  |   | (4.6  | )
|Minimum pension liability adjustment, net of taxes of $0.0 |  |             |      |   |                 |   |     |            |  |   | (7.2  | ) |  |   | (7.2  | )
|Unrealized loss on securities, net of taxes of $0.0        |  |             |      |   |                 |   | (0.3 | )          |  |   |      |   |  |   | (0.3  | )
|                                                           |  |             |       |   |                 |   |      |            |  |   |       |  
|Balance, October 31, 2005                                  |  | $           | (17.7 | ) |                 | $ | (0.7 | )          |  | $ | (7.2  | ) |  | $ | (25.6 | )
|                                                           |  |             |       |   |                 |   |      |            |  |   |       |  



|         |                              
|-------- | -----------------------------
|Note 14: | Commitments and Contingencies

Vendor Financing:


Letters of Credit:


Operating Leases:






72



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##### 



ADC Telecommunications, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)








|           |  |   |       | 
|---------- |  | - | ----- | 
|2006       |  | $ | 30.5  | 
|2007       |  |   | 22.0  | 
|2008       |  |   | 17.3  | 
|2009       |  |   | 14.9  | 
|2010       |  |   | 13.6  | 
|Thereafter |  |   | 26.5  | 
|           |  |   |      
|Total      |  | $ | 124.8 | 
|           |  |   |      



Legal Contingencies: In Re ADC Telecommunications, Inc. ERISA Litigation




Income Tax Contingencies:




73



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ADC Telecommunications, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)






Purchase Obligations:


Other Contingencies:


Change of Control:




|         |                                   
|-------- | ----------------------------------
|Note 15: | Segment and Geographic Information



| |                    
| | -------------------
| | Segment Information





| |   |                                                                                                                                                                                                                                                                    
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Connectivity systems and components that provide the
    infrastructure to wireline, wireless, cable, broadcast and
    enterprise networks to connect high-speed Internet, data, video
    and voice services over copper, coaxial and fiber-optic
    cables, and
|
| |  | Access systems used in the last mile/kilometer of
    wireline and wireless networks to deliver high-speed Internet,
    data and voice services.                                                                                                                









74



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ADC Telecommunications, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)






|                                          |  |      |         |  |      |   |       |      |  |   |       | 
|----------------------------------------- |  | ---- | ------- |  | ---- | - | ----- | ---- |  | - | ----- | 
|                                          |  | 2005 |         |  | 2004 |   |       | 2003 | 
|                                          |  |      |         |  |      |   |       |      | 
|Infrastructure Products (Connectivity)    |  | $    | 804.4   |  |      | $ | 472.8 |      |  | $ | 283.0 | 
|Access Products (Wireline and Wireless)   |  |      | 139.0   |  |      |   | 150.9 |      |  |   | 161.3 | 
|Eliminations, Divested Entities and Other |  |      | 0.5     |  |      |   | 2.1   |      |  |   | 3.1   | 
|                                          |  |      |         |  |      |   |       |      | 
|Broadband Infrastructure and Access       |  |      | 943.9   |  |      |   | 625.8 |      |  |   | 447.4 | 
|                                          |  |      |         |  |      |   |       |      | 
|Professional Services                     |  |      | 225.3   |  |      |   | 147.6 |      |  |   | 132.4 | 
|                                          |  |      |         |  |      |   |       |      | 
|Total                                     |  | $    | 1,169.2 |  |      | $ | 773.4 |      |  | $ | 579.8 | 
|                                          |  |      |         |  |      |   |       |      | 



|                              |  |                |       |   |              |   |       |              |  |   |         |  
|----------------------------- |  | -------------- | ----- | - | ------------ | - | ----- | ------------ |  | - | ------- | -
|                              |  | Broadband      |       |   |              |   |      
|                              |  | Infrastructure |       |   | Professional |   |       |             
|Segment Information           |  | and Access     |       |   | Services     |   |       | Consolidated | 
|                              |  |                |       |   |              |   |       |              | 
|                              |  | (In millions)  |      
|2005                          |  |                |       |   |              |   |       |              |  |   |         |  
|External sales:               |  |                |       |   |              |   |       |              |  |   |         |  
|Products                      |  | $              | 943.9 |   |              | $ | 54.0  |              |  | $ | 997.9   |  
|Services                      |  |                |      |   |              |   | 171.3 |              |  |   | 171.3   |  
|                              |  |                |       |   |              |   |       |              | 
|Total external sales          |  | $              | 943.9 |   |              | $ | 225.3 |              |  | $ | 1,169.2 |  
|                              |  |                |       |   |              |   |       |              | 
|Contribution margin           |  |                | 291.5 |   |              |   | 14.8  |              |  |   |        |  
|Depreciation and amortization |  | $              | 58.3  |   |              | $ | 8.9   |              |  | $ | 67.2    |  
|Operating income (loss)       |  | $              | 99.3  |   |              | $ | (27.0 | )            |  | $ | 72.3    |  
|2004                          |  |                |       |   |              |   |       |              |  |   |         |  
|External sales:               |  |                |       |   |              |   |       |              |  |   |         |  
|Products                      |  | $              | 625.8 |   |              | $ | 55.4  |              |  | $ | 681.2   |  
|Services                      |  |                |      |   |              |   | 92.2  |              |  |   | 92.2    |  
|                              |  |                |       |   |              |   |       |              | 
|Total external sales          |  | $              | 625.8 |   |              | $ | 147.6 |              |  | $ | 773.4   |  
|                              |  |                |       |   |              |   |       |              | 
|Contribution margin           |  |                | 207.1 |   |              |   | 8.5   |              |  |   |        |  
|Depreciation and amortization |  | $              | 32.7  |   |              | $ | 8.7   |              |  | $ | 41.4    |  
|Operating income (loss)       |  | $              | 58.3  |   |              | $ | (33.7 | )            |  | $ | 24.6    |  
|2003                          |  |                |       |   |              |   |       |              |  |   |         |  
|External sales:               |  |                |       |   |              |   |       |              |  |   |         |  
|Products                      |  | $              | 447.4 |   |              | $ | 37.3  |              |  | $ | 484.7   |  
|Services                      |  |                |      |   |              |   | 95.1  |              |  |   | 95.1    |  
|                              |  |                |       |   |              |   |       |              | 
|Total external sales          |  | $              | 447.4 |   |              | $ | 132.4 |              |  | $ | 579.8   |  
|                              |  |                |       |   |              |   |       |              | 
|Contribution margin           |  |                | 120.4 |   |              |   | 18.6  |              |  |   |        |  
|Depreciation and amortization |  | $              | 41.9  |   |              | $ | 11.5  |              |  | $ | 53.4    |  
|Operating loss                |  | $              | (37.7 | ) |              | $ | (16.3 | )            |  | $ | (54.0   | )

75



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ADC Telecommunications, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)






| |                     
| | --------------------
| | Regional Information



2005 Regional Operating Income


|                         |                                             |   |       |      | 
|------------------------ | ------------------------------------------- | - | ----- | ---- | 
|Americas                 |                                             | $ | 59.6  |     
|EMEA                     |                                             |   | 16.3  |     
|Indo-Pac                 |                                             |   | 13.7  |     
|Asia                     |                                             |   | (1.5  | )   
|                         |                                             |   |      
|Subtotal                 |                                             |   | 88.1  |     
|Intercompany elimination |                                             |   | (1.1  | )   
|                         |                                             |   |      
|                         | Operating income before restructuring costs |   |       | 87.0 | 
|Restructuring costs      |                                             |   | (14.7 | )   
|                         |                                             |   |      
|                         | Operating income after restructuring costs  |   | $     | 72.3 | 
|                         |                                             |   |      



| |                       
| | ----------------------
| | Geographic Information



|                                                                                            |  |               |         |  |      |   |       |      |  |   |       | 
|------------------------------------------------------------------------------------------- |  | ------------- | ------- |  | ---- | - | ----- | ---- |  | - | ----- | 
|Geographic Sales Information                                                                |  | 2005          |         |  | 2004 |   |       | 2003 | 
|                                                                                            |  |               |         |  |      |   |       |      | 
|                                                                                            |  | (In millions) |        
|Inside the United States                                                                    |  | $             | 639.0   |  |      | $ | 467.5 |      |  | $ | 436.5 | 
|Outside the United States:                                                                  |  |               |         |  |      |   |       |      |  |   |       | 
|Asia Pacific (China, Hong Kong, and Korea, Australia, India,
    Japan, and Southeast Asia) |  |               | 102.7   |  |      |   | 52.9  |      |  |   | 16.3  | 
|EMEA (Europe (Excluding Germany), Middle East, and Africa)                                  |  |               | 175.3   |  |      |   | 107.3 |      |  |   | 82.1  | 
|Germany                                                                                     |  |               | 167.4   |  |      |   | 78.0  |      |  |   |      | 
|Americas (Canada, Central and South America)                                                |  |               | 84.8    |  |      |   | 67.7  |      |  |   | 44.9  | 
|                                                                                            |  |               |         |  |      |   |       |      | 
|Total                                                                                       |  | $             | 1,169.2 |  |      | $ | 773.4 |      |  | $ | 579.8 | 
|                                                                                            |  |               |         |  |      |   |       |      | 
|Property and Equipment, Net:                                                                |  |               |         |  |      |   |       |      |  |   |       | 
|Inside the United States                                                                    |  | $             | 141.6   |  |      | $ | 144.1 |      |  | $ | 145.4 | 
|Outside the United States                                                                   |  |               | 79.5    |  |      |   | 88.4  |      |  |   | 29.5  | 
|                                                                                            |  |               |         |  |      |   |       |      | 
|Total                                                                                       |  | $             | 221.1   |  |      | $ | 232.5 |      |  | $ | 174.9 | 
|                                                                                            |  |               |         |  |      |   |       |      | 



|         |                                                      
|-------- | -----------------------------------------------------
|Note 16: | Impairment, Restructuring, and Other Disposal Charges



76



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##### 



ADC Telecommunications, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)






|                                               |  |            |     |  |               |   |      |       |  |   |      | 
|---------------------------------------------- |  | ---------- | --- |  | ------------- | - | ---- | ----- |  | - | ---- | 
|                                               |  | Impairment |     |  | Restructuring |   |      |      
|Fiscal 2005                                    |  | Charges    |     |  | Charges       |   |      | Total | 
|                                               |  |            |     |  |               |   |      |       | 
|Employee severance costs                       |  | $          |    |  |               | $ | 11.2 |       |  | $ | 11.2 | 
|Facilities consolidation and lease termination |  |            |    |  |               |   | 3.5  |       |  |   | 3.5  | 
|Fixed asset write-downs                        |  |            | 0.3 |  |               |   |     |       |  |   | 0.3  | 
|                                               |  |            |     |  |               |   |      |       | 
|Total                                          |  | $          | 0.3 |  |               | $ | 14.7 |       |  | $ | 15.0 | 
|                                               |  |            |     |  |               |   |      |       | 

|                                               |  |            |     |  |               |   |      |       |  |   |      | 
|---------------------------------------------- |  | ---------- | --- |  | ------------- | - | ---- | ----- |  | - | ---- | 
|                                               |  | Impairment |     |  | Restructuring |   |      |      
|Fiscal 2004                                    |  | Charges    |     |  | Charges       |   |      | Total | 
|                                               |  |            |     |  |               |   |      |       | 
|Employee severance costs                       |  | $          |    |  |               | $ | 9.3  |       |  | $ | 9.3  | 
|Facilities consolidation and lease termination |  |            |    |  |               |   | 2.6  |       |  |   | 2.6  | 
|Fixed asset write-downs                        |  |            | 1.7 |  |               |   |     |       |  |   | 1.7  | 
|                                               |  |            |     |  |               |   |      |       | 
|Total                                          |  | $          | 1.7 |  |               | $ | 11.9 |       |  | $ | 13.6 | 
|                                               |  |            |     |  |               |   |      |       | 

|                                               |  |            |      |  |               |   |      |       |  |   |      | 
|---------------------------------------------- |  | ---------- | ---- |  | ------------- | - | ---- | ----- |  | - | ---- | 
|                                               |  | Impairment |      |  | Restructuring |   |      |      
|Fiscal 2003                                    |  | Charges    |      |  | Charges       |   |      | Total | 
|                                               |  |            |      |  |               |   |      |       | 
|Employee severance costs                       |  | $          |     |  |               | $ | 23.5 |       |  | $ | 23.5 | 
|Facilities consolidation and lease termination |  |            |     |  |               |   | 4.1  |       |  |   | 4.1  | 
|Fixed asset write-downs                        |  |            | 15.6 |  |               |   |     |       |  |   | 15.6 | 
|                                               |  |            |      |  |               |   |      |       | 
|Total                                          |  | $          | 15.6 |  |               | $ | 27.6 |       |  | $ | 43.2 | 
|                                               |  |            |      |  |               |   |      |       | 

Impairment Charges: Accounting for the Impairment or Disposal of Long-Lived
Assets Goodwill
and other Intangible Assets.


Restructuring Charges:




77



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##### 



ADC Telecommunications, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)






|                         |  |             |      |  |               |   |     |               |  |   |         |  |         |             |      |  |  |   |      | 
|------------------------ |  | ----------- | ---- |  | ------------- | - | --- | ------------- |  | - | ------- |  | ------- | ----------- | ---- |  |  | - | ---- | 
|                         |  | Accrual     |      |  | Discontinued  |   |     | Continuing    |  |   |         |  | Accrual |            
|                         |  | October 31, |      |  | Operations    |   |     | Operations    |  |   | Cash    |  |         | October 31, |     
|Type of Charge           |  | 2004        |      |  | Net Additions |   |     | Net Additions |  |   | Charges |  |         | 2005        |     
|                         |  |             |      |  |               |   |     |               |  |   |         |  |         |             |     
|Employee severance costs |  | $           | 9.6  |  |               | $ | 0.1 |               |  | $ | 11.2    |  |         | $           | 12.2 |  |  | $ | 8.7  | 
|Facilities consolidation |  |             | 28.8 |  |               |   | 2.7 |               |  |   | 3.5     |  |         |             | 10.4 |  |  |   | 24.6 | 
|                         |  |             |      |  |               |   |     |               |  |   |         |  |         |             |     
|Total                    |  | $           | 38.4 |  |               | $ | 2.8 |               |  | $ | 14.7    |  |         | $           | 22.6 |  |  | $ | 33.3 | 
|                         |  |             |      |  |               |   |     |               |  |   |         |  |         |             |     

|                         |  |             |      |  |               |   |      |               |  |   |         |  |         |             |      |  |  |   |      | 
|------------------------ |  | ----------- | ---- |  | ------------- | - | ---- | ------------- |  | - | ------- |  | ------- | ----------- | ---- |  |  | - | ---- | 
|                         |  | Accrual     |      |  | Discontinued  |   |      | Continuing    |  |   |         |  | Accrual |            
|                         |  | October 31, |      |  | Operations    |   |      | Operations    |  |   | Cash    |  |         | October 31, |     
|Type of Charge           |  | 2003        |      |  | Net Additions |   |      | Net Additions |  |   | Charges |  |         | 2004        |     
|                         |  |             |      |  |               |   |      |               |  |   |         |  |         |             |     
|Employee severance costs |  | $           | 3.0  |  |               | $ | 4.5  |               |  | $ | 9.3     |  |         | $           | 7.2  |  |  | $ | 9.6  | 
|Facilities consolidation |  |             | 26.1 |  |               |   | 13.4 |               |  |   | 2.6     |  |         |             | 13.3 |  |  |   | 28.8 | 
|                         |  |             |      |  |               |   |      |               |  |   |         |  |         |             |     
|Total                    |  | $           | 29.1 |  |               | $ | 17.9 |               |  | $ | 11.9    |  |         | $           | 20.5 |  |  | $ | 38.4 | 
|                         |  |             |      |  |               |   |      |               |  |   |         |  |         |             |     







78



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ADC Telecommunications, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)






|         |                                                                                
|-------- | -------------------------------------------------------------------------------
|Note 17: | Quarterly Financial Data (Unaudited in millions, except
    earnings per share)

|                                            |  |         |       |     |         |   |       |         |  |   |         |     |  |       |       |     |  |   |         | 
|------------------------------------------- |  | ------- | ----- | --- | ------- | - | ----- | ------- |  | - | ------- | --- |  | ----- | ----- | --- |  | - | ------- | 
|                                            |  | First   |       |     | Second  |   |       | Third   |  |   | Fourth  |     |  |      
|                                            |  | Quarter |       |     | Quarter |   |       | Quarter |  |   | Quarter |     |  | Total |      
|                                            |  |         |       |     |         |   |       |         |  |   |         |     |  |       |      
|2005                                        |  |         |       |     |         |   |       |         |  |   |         |     |  |       |       |     |  |   |         | 
|Net Sales                                   |  | $       | 240.6 |     |         | $ | 312.4 |         |  | $ | 314.6   |     |  | $     | 301.6 |     |  | $ | 1,169.2 | 
|Net Sales Outside the United States         |  |         | 121.4 |     |         |   | 137.3 |         |  |   | 135.1   |     |  |       | 136.4 |     |  |   | 530.2   | 
|Gross Profit                                |  |         | 82.1  |     |         |   | 116.9 |         |  |   | 115.8   |     |  |       | 106.1 |     |  |   | 420.9   | 
|Income (Loss) Before Income Taxes           |  |         | 15.1  |     |         |   | 37.1  |         |  |   | 35.6    |     |  |       | 4.9   |     |  |   | 92.7    | 
|Provision (Benefit) for Income Taxes        |  |         | 1.0   |     |         |   | 2.3   |         |  |   | 1.5     |     |  |       | 2.4   |     |  |   | 7.2     | 
|Income (Loss) From Continuing Operations    |  |         | 14.1  |     |         |   | 34.8  |         |  |   | 34.1    |     |  |       | 2.5   |     |  |   | 85.5    | 
|Discontinued Operations, Net of Tax         |  |         | 38.4  |     |         |   | (1.4  | )       |  |   | (10.2   | )   |  |       | (1.6  | )   |  |   | 25.2    | 
|                                            |  |         |       |     |         |   |       |         |  |   |         |     |  |       |      
|Net Income (Loss)                           |  | $       | 52.5  | (1) |         | $ | 33.4  | (2)     |  | $ | 23.9    | (3) |  | $     | 0.9   | (4) |  | $ | 110.7   | 
|                                            |  |         |       |     |         |   |       |         |  |   |         |     |  |       |      
|Average Common Shares Outstanding  Basic   |  |         | 115.6 |     |         |   | 115.7 |         |  |   | 116.0   |     |  |       | 116.5 |     |  |   | 116.0   | 
|                                            |  |         |       |     |         |   |       |         |  |   |         |     |  |       |      
|Average Common Shares Outstanding  Diluted |  |         | 115.9 |     |         |   | 130.5 |         |  |   | 131.4   |     |  |       | 117.7 |     |  |   | 131.1   | 
|                                            |  |         |       |     |         |   |       |         |  |   |         |     |  |       |      
|Basic Income (Loss) Per Share:              |  |         |       |     |         |   |       |         |  |   |         |     |  |       |       |     |  |   |         | 
|Continuing operations                       |  | $       | 0.12  |     |         | $ | 0.30  |         |  | $ | 0.29    |     |  | $     | 0.02  |     |  | $ | 0.74    | 
|                                            |  |         |       |     |         |   |       |         |  |   |         |     |  |       |      
|Discontinued operations                     |  | $       | 0.33  |     |         | $ | (0.01 | )       |  | $ | (0.09   | )   |  | $     | (0.01 | )   |  | $ | 0.21    | 
|                                            |  |         |       |     |         |   |       |         |  |   |         |     |  |       |      
|Net Income (Loss)                           |  | $       | 0.45  |     |         | $ | 0.29  |         |  | $ | 0.20    |     |  | $     | 0.01  |     |  | $ | 0.95    | 
|                                            |  |         |       |     |         |   |       |         |  |   |         |     |  |       |      
|Diluted Income (Loss) Per Share:            |  |         |       |     |         |   |       |         |  |   |         |     |  |       |       |     |  |   |         | 
|Continuing operations                       |  | $       | 0.12  |     |         | $ | 0.28  |         |  | $ | 0.28    |     |  | $     | 0.02  |     |  | $ | 0.72    | 
|                                            |  |         |       |     |         |   |       |         |  |   |         |     |  |       |      
|Discontinued operations                     |  | $       | 0.33  |     |         | $ | (0.01 | )       |  | $ | (0.08   | )   |  | $     | (0.01 | )   |  | $ | 0.19    | 
|                                            |  |         |       |     |         |   |       |         |  |   |         |     |  |       |      
|Net Income (Loss)                           |  | $       | 0.45  |     |         | $ | 0.27  |         |  | $ | 0.20    |     |  | $     | 0.01  |     |  | $ | 0.91    | 
|                                            |  |         |       |     |         |   |       |         |  |   |         |     |  |       |      

79



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ADC Telecommunications, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)




|                                            |  |         |       |      |         |   |       |         |  |   |         |      |  |       |       |     |  |   |       |  
|------------------------------------------- |  | ------- | ----- | ---- | ------- | - | ----- | ------- |  | - | ------- | ---- |  | ----- | ----- | --- |  | - | ----- | -
|                                            |  | First   |       |      | Second  |   |       | Third   |  |   | Fourth  |      |  |      
|                                            |  | Quarter |       |      | Quarter |   |       | Quarter |  |   | Quarter |      |  | Total |      
|                                            |  |         |       |      |         |   |       |         |  |   |         |      |  |       |      
|2004                                        |  |         |       |      |         |   |       |         |  |   |         |      |  |       |       |     |  |   |       |  
|Net Sales                                   |  | $       | 134.1 |      |         | $ | 150.7 |         |  | $ | 224.9   |      |  | $     | 263.7 |     |  | $ | 773.4 |  
|Net Sales Outside the United States         |  |         | 37.4  |      |         |   | 42.9  |         |  |   | 101.4   |      |  |       | 124.1 |     |  |   | 305.8 |  
|Gross Profit                                |  |         | 53.8  |      |         |   | 62.5  |         |  |   | 85.8    |      |  |       | 100.2 |     |  |   | 302.3 |  
|Income (Loss) Before Income Taxes           |  |         | 16.8  |      |         |   | (2.1  | )       |  |   | 4.1     |      |  |       | 16.8  |     |  |   | 35.6  |  
|Provision (Benefit) for Income Taxes        |  |         | (0.1  | )    |         |   | 0.6   |         |  |   | 0.3     |      |  |       | 1.2   |     |  |   | 2.0   |  
|Income (Loss) From Continuing Operations    |  |         | 16.9  |      |         |   | (2.7  | )       |  |   | 3.8     |      |  |       | 15.6  |     |  |   | 33.6  |  
|Discontinued Operations, Net of Tax         |  |         | (19.3 | )    |         |   | (23.9 | )       |  |   | (18.1   | )    |  |       | 44.1  |     |  |   | (17.2 | )
|                                            |  |         |       |      |         |   |       |         |  |   |         |      |  |       |      
|Net Income (Loss)                           |  | $       | (2.4  | )(5) |         | $ | (26.6 | )(6)    |  | $ | (14.3   | )(7) |  | $     | 59.7  | (8) |  | $ | 16.4  |  
|                                            |  |         |       |      |         |   |       |         |  |   |         |      |  |       |      
|Average Common Shares Outstanding  Basic   |  |         | 115.3 |      |         |   | 115.4 |         |  |   | 115.6   |      |  |       | 115.6 |     |  |   | 115.5 |  
|                                            |  |         |       |      |         |   |       |         |  |   |         |      |  |       |      
|Average Common Shares Outstanding  Diluted |  |         | 130.3 |      |         |   | 115.4 |         |  |   | 116.0   |      |  |       | 130.0 |     |  |   | 116.0 |  
|                                            |  |         |       |      |         |   |       |         |  |   |         |      |  |       |      
|Basic Income (Loss) Per Share:              |  |         |       |      |         |   |       |         |  |   |         |      |  |       |       |     |  |   |       |  
|Continuing operations                       |  | $       | 0.15  |      |         | $ | (0.02 | )       |  | $ | 0.03    |      |  | $     | 0.13  |     |  | $ | 0.29  |  
|                                            |  |         |       |      |         |   |       |         |  |   |         |      |  |       |      
|Discontinued operations                     |  | $       | (0.17 | )    |         | $ | (0.21 | )       |  | $ | (0.15   | )    |  | $     | 0.39  |     |  | $ | (0.15 | )
|                                            |  |         |       |      |         |   |       |         |  |   |         |      |  |       |      
|Net Income (Loss)                           |  | $       | (0.02 | )    |         | $ | (0.23 | )       |  | $ | (0.12   | )    |  | $     | 0.52  |     |  | $ | 0.14  |  
|                                            |  |         |       |      |         |   |       |         |  |   |         |      |  |       |      
|Diluted Income (Loss) Per Share:            |  |         |       |      |         |   |       |         |  |   |         |      |  |       |       |     |  |   |       |  
|Continuing operations                       |  | $       | 0.14  |      |         | $ | (0.02 | )       |  | $ | 0.03    |      |  | $     | 0.13  |     |  | $ | 0.29  |  
|                                            |  |         |       |      |         |   |       |         |  |   |         |      |  |       |      
|Discontinued operations                     |  | $       | (0.15 | )    |         | $ | (0.21 | )       |  | $ | (0.15   | )    |  | $     | 0.34  |     |  | $ | (0.15 | )
|                                            |  |         |       |      |         |   |       |         |  |   |         |      |  |       |      
|Net Income (Loss)                           |  | $       | (0.01 | )    |         | $ | (0.23 | )       |  | $ | (0.12   | )    |  | $     | 0.47  |     |  | $ | 0.14  |  
|                                            |  |         |       |      |         |   |       |         |  |   |         |      |  |       |      






|    |                                                                                                                                                                                   
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Includes $3.1 million restructuring charges and
    $9.0 million gain on the sale of a notes receivable.                                                                          
|   
|(2) | Includes $3.2 million restructuring charges and
    $0.1 million impairment charges.                                                                                              
|   
|(3) | Includes $1.0 million restructuring charges.                                                                                                                                      
|   
|(4) | Includes $7.4 million restructuring charges and
    $0.2 million impairment charges.                                                                                              
|   
|(5) | Includes $1.7 million restructuring charges;
    $4.4 million nonoperating gain on sale of investments; and
    $3.5 million net nonoperating gain for divested product
    lines.
|   
|(6) | Includes $10.1 million restructuring charges and
    $1.5 million impairment charges.                                                                                             
|   
|(7) | Includes $0.6 million restructuring charges.                                                                                                                                      
|   
|(8) | Includes $(0.5) million restructuring charges
    (reversal) and $0.2 million impairment charges.                                                                                 

80



---



##### 



ADC Telecommunications, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)






| |            
| | -----------
| | Fiscal Year





| |                        
| | -----------------------
| | Discontinued Operations

Accounting for
the Impairment or Disposal of Long-Lived Assets


81



---



##### 





|        |                                                                                         
|------- | ----------------------------------------------------------------------------------------
|Item 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
    ACCOUNTING AND FINANCIAL DISCLOSURE

None.




|         |                        
|-------- | -----------------------
|Item 9A. | CONTROLS AND PROCEDURES

Disclosure Controls and Procedures


Rule 13a-15(e)


Rule 13a-15(f)




Managements Annual Report on Internal Control Over
Financial Reporting






82



---



##### 



Report of Independent Registered Public Accounting Firm






.












83



---



##### 



.






| |                  
| | -----------------
| | Ernst & Young LLP







|         |                  
|-------- | -----------------
|Item 9B. | OTHER INFORMATION

None.


84



---



##### 



PART III




|         |                                                   
|-------- | --------------------------------------------------
|Item 10. | DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Form 10-K


Form 10-K


www.adc.com/investorrelations/corporate governance


Form 8-K




|         |                       
|-------- | ----------------------
|Item 11. | EXECUTIVE COMPENSATION

Form 10-K Form 10-K).




|         |                                                                                                   
|-------- | --------------------------------------------------------------------------------------------------
|Item 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
    MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Form 10-K.




Equity Compensation Plan Information


|                                                              |  |                   |           |  |                   |   |         |                                    |  |  |            | 
|------------------------------------------------------------- |  | ----------------- | --------- |  | ----------------- | - | ------- | ---------------------------------- |  |  | ---------- | 
|                                                              |  | Number of         |           |  |                   |   |        
|                                                              |  | Securities to be  |           |  |                   |   |        
|                                                              |  | Issued Upon       |           |  | Weighted-Average  |   |         | Number of Securities Remaining     | 
|                                                              |  | Exercise of       |           |  | Exercise Price of |   |         | Available for Future Issuance      | 
|                                                              |  | Outstanding       |           |  | Outstanding       |   |         | Under Equity Compensation Plans    | 
|                                                              |  | Options, Warrants |           |  | Options, Warrants |   |         | (Excluding Securities Reflected in | 
|Plan Category                                                 |  | and Rights        |           |  | and Rights        |   |         | the Second Column)                 | 
|                                                              |  |                   |           |  |                   |   |         |                                    | 
|Equity compensation plans approved by security holders(1)     |  |                   | 6,369,575 |  |                   | $ | 26.7237 |                                    |  |  | 13,194,101 | 
|Equity compensation plans not approved by security holders(2) |  |                   | 435,335   |  |                   | $ | 61.5760 |                                    |  |  | 0          | 
|                                                              |  |                   |           |  |                   |   |         |                                    | 
|Total                                                         |  |                   | 6,804,910 |  |                   | $ | 28.9534 |                                    |  |  | 13,194,101 | 






|    |                                                                                                                                                                                                                                                                                                 
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Includes options and rights granted and shares that may become
    the subject of future awards under our Global Stock Incentive
    Plan to either employees or non-employee directors.
    Specifically, 13,194,101 shares may become the subject of
    future awards as of October 31, 2005.
|   
|(2) | Includes options granted under the following plans that have not
    been approved by our shareowners: (a) the 2001 Special
    Stock Option Plan (the 2001 Special Plan) as
    described below and (b) plans                                                                                

85



---



##### 



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | established by us in connection with our acquisitions of each of
    the following companies: CommTech Corporation in fiscal 2001;
    PairGain Technologies, Inc. in fiscal 2000; and Saville Systems
    Plc in fiscal 1999 (collectively, the Acquisition
    Plans). In certain instances the plans of the acquired
    companies that the Acquisition Plans replaced were approved by
    the shareowners of the acquired companies. Each Acquisition Plan
    was established by us to preserve the benefit of the outstanding
    options of the company we were acquiring on the same general
    terms and conditions under which these options were initially
    granted. At the time we completed an acquisition, the options
    then outstanding under the acquired companys option plan
    were converted into options to purchase ADC common stock using
    an agreed conversion ratio under the applicable Acquisition
    Plan. No future options will be issued under any of the
    Acquisition Plans. As of October 31, 2005, options to
    purchase an aggregate of 196,316 shares of common stock at
    a weighted average price of $90.3533 and an average remaining
    term of approximately 3.11 years were outstanding under the
    Acquisition Plans.







|         |                                               
|-------- | ----------------------------------------------
|Item 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

None.




|         |                                       
|-------- | --------------------------------------
|Item 14. | PRINCIPAL ACCOUNTANT FEES AND SERVICES

Form 10-K


86



---



##### 



PART IV




|         |                                           
|-------- | ------------------------------------------
|Item 15. | EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

Listing of Financial Statements


Form 10-K:














Form 10-K


Listing of Financial Statement Schedules


form 10-K:






Listing of Exhibits


Form 10-K


87



---



##### 



SIGNATURES






| |                             
| | ----------------------------
| | ADC TELECOMMUNICATIONS, INC.



| |     |                    
| | --- | -------------------
| | By: | /s/ Robert E. Switz

| | 
| | 
| | 





| |                                      
| | -------------------------------------
| | Robert E. Switz                      
| | President and Chief Executive Officer





|                                     |  |                                                                                  |  |                         |  |                        
|------------------------------------ |  | -------------------------------------------------------------------------------- |  | ----------------------- |  | -----------------------
|                                    
|/s/ Robert E. SwitzRobert E. Switz   |  | President and
    Chief Executive Officer
    (principal executive officer)      |  | Dated: January 13, 2006
|                                    
|/s/ Gokul V. HemmadyGokul V. Hemmady |  | Vice President and
    Chief Financial Officer
    (principal financial officer) |  | Dated: January 13, 2006
|                                    
|/s/ James G. MathewsJames G. Mathews |  | Vice President and Controller (principal accounting officer)                     |  | Dated: January 13, 2006
|                                    
|John A. Blanchard III*               |  | Director                                                                         |  |                        
|John J. Boyle III*                   |  | Director                                                                         |  |                        
|James C. Castle*                     |  | Director                                                                         |  |                        
|Mickey P. Foret*                     |  | Director                                                                         |  |                        
|J. Kevin Gilligan*                   |  | Director                                                                         |  |                        
|B. Kristine Johnson*                 |  | Director                                                                         |  |                        
|Lois M. Martin*                      |  | Director                                                                         |  |                        
|William R. Spivey*                   |  | Director                                                                         |  |                        
|Jean-Pierre Rosso*                   |  | Director                                                                         |  |                        
|John E. Rehfeld*                     |  | Director                                                                         |  |                        
|Larry W. Wangberg*                   |  | Director                                                                         |  |                        
|John D. Wunsch*                      |  | Director                                                                         |  |                        
|                                    
|*By:                                 |  | /s/ Gokul V. HemmadyGokul V. HemmadyAttorney-in-Fact                             |  |                         |  | Dated: January 13, 2006

88



---



##### 



ADC TELECOMMUNICATIONS


SCHEDULE II  VALUATION OF QUALIFYING ACCOUNTS
AND RESERVES


|                                                   |  |               |      |  |             |   |            |          |  |   |            |            |  |             |      |   |  |   |      | 
|-------------------------------------------------- |  | ------------- | ---- |  | ----------- | - | ---------- | -------- |  | - | ---------- | ---------- |  | ----------- | ---- | - |  | - | ---- | 
|                                                   |  | Balance at    |      |  |             |   | Charged to |          |  |   |            |           
|                                                   |  | Beginning     |      |  |             |   | Costs and  |          |  |   |            | Balance at | 
|                                                   |  | of Year       |      |  | Acquisition |   |            | Expenses |  |   | Deductions |            |  | End of Year |     
|                                                   |  |               |      |  |             |   |            |          |  |   |            |            |  |             |     
|                                                   |  | (In millions) |     
|Fiscal 2005                                        |  |               |      |  |             |   |            |          |  |   |            |            |  |             |      |   |  |   |      | 
|Allowance for doubtful accounts & notes receivable |  | $             | 42.4 |  |             | $ |           |          |  | $ | (3.0       | )          |  | $           | 18.6 |   |  | $ | 20.8 | 
|Inventory reserve                                  |  |               | 41.9 |  |             |   | 0.3        |          |  |   | 5.7        |            |  |             | 12.2 |   |  |   | 35.7 | 
|Warranty accrual                                   |  |               | 14.4 |  |             |   |           |          |  |   | 2.7        |            |  |             | 6.3  |   |  |   | 10.8 | 
|Fiscal 2004                                        |  |               |      |  |             |   |            |          |  |   |            |            |  |             |      |   |  |   |      | 
|Allowance for doubtful accounts & notes receivable |  | $             | 48.4 |  |             | $ | 7.5        |          |  | $ | (2.7       | )          |  | $           | 10.8 |   |  | $ | 42.4 | 
|Inventory reserve                                  |  |               | 32.2 |  |             |   | 16.9       |          |  |   | (0.4       | )          |  |             | 6.8  |   |  |   | 41.9 | 
|Warranty accrual                                   |  |               | 10.4 |  |             |   | 5.3        |          |  |   | 4.0        |            |  |             | 5.3  |   |  |   | 14.4 | 
|Fiscal 2003                                        |  |               |      |  |             |   |            |          |  |   |            |            |  |             |      |   |  |   |      | 
|Allowance for doubtful accounts & notes receivable |  | $             | 35.8 |  |             | $ |           |          |  | $ | 4.5        |            |  | $           | (8.1 | ) |  | $ | 48.4 | 
|Inventory reserve                                  |  |               | 81.9 |  |             |   |           |          |  |   |           |            |  |             | 49.7 |   |  |   | 32.2 | 
|Warranty accrual                                   |  |               | 10.5 |  |             |   |           |          |  |   | 5.7        |            |  |             | 5.8  |   |  |   | 10.4 | 

89



---



##### 



EXHIBIT INDEX


Form 10-K


|        |   |             |  |                                                                                                                                                                                                                                                                                                                                                               
|------- | - | ----------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |   |            
|Number  |   | Description
|        |   |            
|        | 2 | -a          |  | Share Purchase Agreement, dated March 25, 2004 among ADC
    Telecommunications, Inc., KRONE International Holding, Inc.,
    KRONE Digital Communications Inc., GenTek Holding Corporation
    and GenTek Inc. (Incorporated by reference to Exhibit 2.1
    to ADCs Current Report on Form 8-K dated June 2,
    2004.)                                    
|       
|        | 2 | -b          |  | First Amendment to Share Purchase Agreement, dated May 18,
    2004 among ADC Telecommunications, Inc., KRONE International
    Holding, Inc., KRONE Digital Communications Inc., GenTek Holding
    Corporation and GenTek Inc. (Incorporated by reference to
    Exhibit 2.2 to ADCs Current Report on Form 8-K
    dated June 2, 2004.)                   
|       
|        | 2 | -c          |  | Acquisition Agreement, dated May 24, 2004 among ADC
    Telecommunications, Inc., BigBand Networks, Inc. and ADC
    Broadband Access Systems, Inc. (Incorporated by reference to
    Exhibit 2.1 to ADCs Current Report on Form 8-K
    dated July 13, 2004.)                                                                                               
|       
|        | 2 | -d          |  | Acquisition Agreement, dated June 3, 2004 among ADC
    Telecommunications, Inc., ADC Irish Holdings IA, LLC, ADC Irish
    Holdings IIA, LLC, ADC Telecommunications Sales, Inc. and
    Intec Telecom Systems PLC. (Incorporated by reference to
    Exhibit 2.1 to ADCs Current Report on Form 8-K
    dated September 2, 2004.)                          
|       
|        | 2 | -e          |  | First Amendment to the Acquisition Agreement, dated
    August 27, 2004 among ADC Telecommunications, Inc., ADC
    Irish Holdings IA, LLC, ADC Irish Holdings IIA, LLC, ADC
    Telecommunications Sales, Inc. and Intec Telecom Systems PLC.
    (Incorporated by reference to Exhibit 2.2 to ADCs
    Current Report on Form 8-K dated September 2, 2004.)
|       
|        | 2 | -f          |  | Acquisition Agreement, dated October 22, 2004 between ADC
    Telecommunications, Inc. and WatchMark Corp. (Incorporated by
    reference to Exhibit 2.1 to ADCs Current Report on
    Form 8-K dated November 26, 2004.)                                                                                                                                    
|       
|        | 2 | -g          |  | Amendment No. 1 to Acquisition Agreement, dated
    November 19, 2004 between ADC Telecommunications, Inc. and
    WatchMark Corp. (Incorporated by reference to Exhibit 2.2
    to ADCs Current Report on Form 8-K dated
    November 26, 2004.)                                                                                                            
|       
|        | 2 | -h          |  | Agreement and Plan of Merger, dated July 21, 2005, by and
    among ADC Telecommunications, Inc., Falcon Venture Corp., Fiber
    Optic Network Solutions Corp., and Michael J. Noonan.
    (Incorporated by reference to Exhibit 2.1 to ADCs
    Current Report on Form 8-K dated July 21, 2005.)                                                           
|       
|        | 2 | -i          |  | First Amendment to Agreement and Plan of Merger, dated
    August 16, 2005, by and among ADC Telecommunications, Inc.,
    Falcon Venture Corp., Fiber Optic Network Solutions Corp., and
    Michael J. Noonan. (Incorporated by reference to
    Exhibit 2.1 to ADCs Current Report on Form 8-K
    dated August 16, 2005.)                                
|       
|        | 3 | -a          |  | Restated Articles of Incorporation of ADC Telecommunications,
    Inc., conformed to incorporate amendments dated January 20,
    2000, June 30, 2000, August 13, 2001, March 2, 2004
    and May 9, 2005. (Incorporated by reference to Exhibit 3-a
    to ADCs Quarterly Report on Form 10-Q for the quarter
    ended July 29, 2005.)                     
|       
|        | 3 | -b          |  | Restated Bylaws of ADC Telecommunications, Inc. effective
    April 18, 2005. (Incorporated by reference to
    Exhibit 3-f to ADCs Quarterly Report on
    Form 10-Q for the quarter ended April 29, 2005.)                                                                                                                                                 
|       
|        | 4 | -a          |  | Form of certificate for shares of Common Stock of ADC
    Telecommunications, Inc. (Incorporated by reference to
    Exhibit 4-a to ADCs Quarterly Report on
    Form 10-Q for the quarter ended April 29, 2005.)                                                                                                                                            
|       
|        | 4 | -b          |  | Rights Agreement, as amended and restated July 30, 2003,
    between ADC Telecommunications, Inc. and Computershare Investor
    Services, LLC as Rights Agent. (Incorporated by reference to
    Exhibit 4-b to ADCs Form 8-A/A filed on
    July 31, 2003.)                                                                                                

90



---



##### 



|        |    |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|------- | -- | ----------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|Number  |    | Description
|        |    |            
|       
|        | 4  | -c          |  | Indenture dated as of June 4, 2003, between ADC
    Telecommunications, Inc. and U.S. Bank National
    Association. (Incorporated by reference to Exhibit 4-g of
    ADCs Quarterly Report on Form 10-Q for the quarter
    ended July 31, 2003.)                                                                                                                                                                                                                                                                                  
|       
|        | 4  | -d          |  | Registration Rights Agreement dated as of June 4, 2003,
    between ADC Telecommunications, Inc. and Banc of America
    Securities LLC, Credit Suisse First Boston LLC and Merrill Lynch
    Pierce Fenner & Smith Incorporated as representations
    of the Initial Purchase of ADCs 1% Convertible
    Subordinated Notes due 2008 and Floating Rate Convertible
    Subordinated Notes due 2013. (Incorporated by reference to
    Exhibit 4-h to ADCs Quarterly Report on
    Form 10-Q for the quarter ended July 31, 2003.)
|       
|        | 10 | -a*         |  | ADC Telecommunications, Inc. Global Stock Incentive Plan, as
    amended and restated through August 1, 2005.                                                                                                                                                                                                                                                                                                                                                                                                                        
|       
|        | 10 | -b          |  | ADC Telecommunications, Inc. Management Incentive Plan for
    Fiscal Year 2004. (Incorporated by reference to
    Exhibit 10-d to ADCs Annual Report on Form 10-K
    for the fiscal year ended October 31, 2003.)                                                                                                                                                                                                                                                                                                                 
|       
|        | 10 | -c          |  | ADC Telecommunications, Inc. Management Incentive Plan for
    Fiscal Year 2005. (Incorporated by reference to
    Exhibit 10-d to ADCs Annual Report on Form 10-K
    for the fiscal year ended October 31, 2004.)                                                                                                                                                                                                                                                                                                                 
|       
|        | 10 | -d          |  | ADC Telecommunications, Inc. Management Incentive Plan for
    Fiscal Year 2006. (Incorporated by reference to
    Exhibit 10-b to ADCs Current Report on Form 8-K
    dated November 18, 2005.)                                                                                                                                                                                                                                                                                                                                    
|       
|        | 10 | -e          |  | ADC Telecommunications, Inc. Executive Incentive Exchange Plan,
    as amended and restated effective as of November 1, 2001.
    (Incorporated by reference to Exhibit 10-g to ADCs
    Annual Report on Form 10-K for the fiscal year ended
    October 31, 2001.)                                                                                                                                                                                                                                                                
|       
|        | 10 | -f          |  | Amendment 1 to the ADC Telecommunications, Inc. Executive
    Incentive Exchange Plan, effective as of November 1, 2002.
    (Incorporated by reference to Exhibit 10-g to ADCs
    Annual Report on Form 10-K for the fiscal year ended
    October 31, 2002.)                                                                                                                                                                                                                                                                     
|       
|        | 10 | -g          |  | ADC Telecommunications, Inc. Executive Change in Control
    Severance Pay Plan (2002 Restatement), effective as of
    January 1, 2002. (Incorporated by reference to
    Exhibit 10-I to ADCs Annual Report on Form 10-K
    for the fiscal year ended October 31, 2001.)                                                                                                                                                                                                                                                         
|       
|        | 10 | -h          |  | ADC Telecommunications, Inc. Change in Control Severance Pay
    Plan (2002 Restatement), effective as of January 1, 2002.
    (Incorporated by reference to Exhibit 10-b to ADCs
    Quarterly Report on Form 10-Q for the quarter ended
    January 31, 2002.)                                                                                                                                                                                                                                                                    
|       
|        | 10 | -i          |  | ADC Telecommunications, Inc. 2001 Special Stock Option Plan.
    (Incorporated by reference to Exhibit 10-c to ADCs
    Quarterly Report on Form 10-Q for the quarter ended
    January 31, 2002.)                                                                                                                                                                                                                                                                                                                                  
|       
|        | 10 | -j          |  | ADC Telecommunications, Inc. Special Incentive Plan, effective
    November 1, 2002. (Incorporated by reference to
    Exhibit 10-k to ADCs Annual Report on Form 10-K
    for the fiscal year ended October 31, 2002.)                                                                                                                                                                                                                                                                                                             
|       
|        | 10 | -k          |  | Compensation Plan for Non-employee Directors of ADC
    Telecommunications, Inc., restated as of January 1, 2004.
    (Incorporated by reference to Exhibit 10-b to ADCs
    Quarterly Report on Form 10-Q for the quarter ended
    January 31, 2004.)                                                                                                                                                                                                                                                                             
|       
|        | 10 | -l          |  | First Amendment to the Compensation Plan for Non-employee
    Directors of ADC Telecommunications, Inc., restated as of
    January 1, 2004. (Incorporated by reference to
    Exhibit 10-a to ADCs Current Report on Form 8-K
    dated November 18, 2005.)                                                                                                                                                                                                                                                                        
|       
|        | 10 | -m          |  | ADC Telecommunications, Inc. Deferred Compensation Plan (1989
    Restatement), as amended and restated effective as of
    November 1, 1989. (Incorporated by reference to
    Exhibit 10-aa to ADCs Annual Report on Form 10-K
    for the fiscal year ended October 31, 1996.)                                                                                                                                                                                                                                                   
|       
|        | 10 | -n          |  | Second Amendment to ADC Telecommunications, Inc. Deferred
    Compensation Plan (1989 Restatement), effective as of
    March 12, 1996. (Incorporated by reference to
    Exhibit 10-b to ADCs Quarterly Report on
    Form 10-Q for the quarter ended April 30, 1997.)                                                                                                                                                                                                                                                             
|       
|        | 10 | -o          |  | Third Amendment to ADC Telecommunications, Inc. Deferred
    Compensation Plan (1989 Restatement), effective as of
    December 9, 2003. (Incorporated by reference to
    Exhibit 10-d to ADCs Quarterly Report on
    Form 10-Q for the quarter ended January 31, 2004.)                                                                                                                                                                                                                                                          

91



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##### 



|        |    |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                     
|------- | -- | ----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|Number  |    | Description
|        |    |            
|       
|        | 10 | -p          |  | ADC Telecommunications, Inc. Pension Excess Plan (1989
    Restatement), as amended and restated effective as of
    January 1, 1989. (Incorporated by reference to
    Exhibit 10-bb to ADCs Annual Report on Form 10-K
    for the fiscal year ended October 31, 1996.)                                                                                                                                                          
|       
|        | 10 | -q          |  | Second Amendment to ADC Telecommunications, Inc. Pension Excess
    Plan (1989 Restatement), effective as of March 12, 1996.
    (Incorporated by reference to Exhibit 10-a to ADCs
    Quarterly Report on Form 10-Q for the quarter ended
    April 30, 1997.)                                                                                                                                                                   
|       
|        | 10 | -r          |  | ADC Telecommunications, Inc. 401(k) Excess Plan (2002
    Restatement), as amended and restated effective as of
    January 1, 2002. (Incorporated by reference to
    Exhibit 10-r to ADCs Annual Report on Form 10-K
    for the fiscal year ended October 31, 2001.)                                                                                                                                                            
|       
|        | 10 | -s          |  | First Amendment of ADC Telecommunications, Inc. 401(k) Excess
    Plan (2002 Restatement) dated as of February 26, 2002.
    (Incorporated by reference to Exhibit 10-a to ADCs
    Quarterly Report on Form 10-Q for the quarter ended
    July 31, 2003.)                                                                                                                                                                        
|       
|        | 10 | -t          |  | Second Amendment of ADC Telecommunications, Inc. 401(k) Excess
    Plan (2002 Restatement) dated as of April 1, 2003.
    (Incorporated by reference to Exhibit 10-b to ADCs
    Quarterly Report on Form 10-Q for the quarter ended
    July 31, 2003.)                                                                                                                                                                           
|       
|        | 10 | -u          |  | Third Amendment of ADC Telecommunications, Inc. 401(k) Excess
    Plan (2002 Restatement) dated as of January 1, 2003.
    (Incorporated by reference to Exhibit 10-c to ADCs
    Quarterly Report on Form 10-Q for the quarter ended
    July 31, 2003.)                                                                                                                                                                          
|       
|        | 10 | -v*         |  | Fourth Amendment of ADC Telecommunications, Inc. 401(k) Excess
    Plan (2002 Restatement) dated as of January 1, 2006.                                                                                                                                                                                                                                                                                                             
|       
|        | 10 | -w*         |  | Fifth Amendment of ADC Telecommunications, Inc. 401(k) Excess
    Plan (2002 Restatement) dated as of January 1, 2006.                                                                                                                                                                                                                                                                                                              
|       
|        | 10 | -x          |  | Executive Employment Agreement dated as of August 13, 2003,
    between ADC Telecommunications, Inc., and Robert E. Switz.
    (Incorporated by reference to Exhibit 10-e to ADCs
    Quarterly Report on Form 10-Q for the quarter ended
    July 31, 2003.)                                                                                                                                                                      
|       
|        | 10 | -y          |  | ADC Telecommunications, Inc. Executive Management Incentive
    Plan. (Incorporated by reference to Exhibit 10-jj to
    ADCs Annual Report on Form 10-K for the fiscal year
    ended October 31, 2002.)                                                                                                                                                                                                                          
|       
|        | 10 | -z          |  | ADC Telecommunications, Inc. Executive Stock Ownership Policy
    for Section 16 Officers, effective as of January 1,
    2004, and amended as of May 10, 2005. (Incorporated by
    reference to Exhibit 10-b to ADCs Quarterly Report on
    Form 10-Q for the quarter ended July 29, 2005.)                                                                                                                                     
|       
|        | 10 | -aa         |  | Summary of Executive Perquisite Allowances. (Incorporated by
    reference to Exhibit 10-cc to ADCs Annual Report on
    Form 10-K for the fiscal year ended October 31, 2003.)                                                                                                                                                                                                                                                    
|       
|        | 10 | -bb         |  | Letter Agreement of employment between ADC Telecommunications,
    Inc. and Michael K. Pratt dated April 25, 2002, that
    includes severance arrangements. (Incorporated by reference to
    Exhibit 10-y to ADCs Annual Report on Form 10-K
    for the fiscal year ended October 31, 2004.)                                                                                                                                    
|       
|        | 10 | -cc         |  | KRONE Acquisition Key Employee Retention Plan. (Incorporated by
    reference to Exhibit 10-b to ADCs Quarterly Report on
    Form 10-Q for the quarter ended July 31, 2004.)                                                                                                                                                                                                                                                      
|       
|        | 10 | -ee         |  | Form of ADC Telecommunications, Inc. Nonqualified Stock Option
    Agreement provided to certain officers and key management
    employees of ADC with respect to option grants made on
    November 1, 2001 (the form of incentive stock option
    agreement contains the same material terms). (Incorporated by
    reference to Exhibit 10-f to ADCs Quarterly Report on
    Form 10-Q for the quarter ended January 31, 2002.)
|       
|        | 10 | -ff         |  | Form of ADC Telecommunications, Inc. Restricted Stock Award
    Agreement utilized with respect to restricted stock grants
    beginning in ADCs 2002 fiscal year. (Incorporated by
    reference to Exhibit 10-g to ADCs Quarterly Report on
    Form 10-Q for the quarter ended January 31, 2002.)                                                                                                                              
|       
|        | 10 | -gg*        |  | Form of Restricted Stock Unit Award Agreement used for grants to
    employee under the Global Stock Incentive Plan.                                                                                                                                                                                                                                                                                                                

92



---



##### 



|        |     |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                               
|------- | --- | ----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |     |            
|Number  |     | Description
|        |     |            
|       
|        | 10  | -hh         |  | Form of Restricted Stock Unit Award Agreement used for
    non-employee directors under the Global Stock Incentive Plan.
    (Incorporated by reference to Exhibit 10-b to ADCs
    Current Report on Form 8-K dated February 1, 2005.)                                                                                                                                                                                      
|       
|        | 10  | -ii         |  | Form of ADC Telecommunications, Inc. Incentive Stock Option
    Agreement provided to employees with respect to option grants
    made under the ADC Telecommunications, Inc. Global Stock
    Incentive Plan. (Incorporated by reference to Exhibit 10-d
    to ADCs Current Report on Form 8-K dated
    February 1, 2005.)                                                                                                
|       
|        | 10  | -jj         |  | Form of ADC Telecommunications, Inc. Non-qualified Stock Option
    Agreement provided to employees with respect to option grants
    made under the ADC Telecommunications, Inc. Global Stock
    Incentive Plan. (Incorporated by reference to Exhibit 10-e
    to ADCs Current Report on Form 8-K dated
    February 1, 2005.)                                                                                            
|       
|        | 10  | -kk         |  | Form of Nonqualified Stock Option Agreement used for
    non-employee directors under the Global Stock Incentive Plan.
    (Incorporated by reference to Exhibit 10-f to ADCs
    Quarterly Report on Form 10-Q for the quarter ended
    July 31, 2004.)                                                                                                                                                                    
|       
|        | 10  | -ll         |  | Form of Nonqualified Stock Option Agreement used for
    non-employee directors under the Compensation Plan for
    Non-Employee Directors. (Incorporated by reference to
    Exhibit 10-g to ADCs Quarterly Report on
    Form 10-Q for the quarter ended July 31, 2004.)                                                                                                                                                   
|       
|        | 10  | -mm         |  | Form of ADC Telecommunications, Inc. Restricted Stock Unit Award
    Agreement provided to non-employee Directors of ADC with respect
    to Restricted Stock Unit awards made under the Compensation Plan
    for non-employee directors of ADC Telecommunications, Inc.,
    restated as of January 1, 2004. (Incorporated by reference
    to Exhibit 10-c to ADCs Current Report on
    Form 8-K dated February 1, 2005.)
|       
|        | 12  | -a*         |  | Computation of Ratio of Earnings to Fixed Charges.                                                                                                                                                                                                                                                                                                                                                                            
|       
|        | 21  | -a*         |  | Subsidiaries of ADC Telecommunications, Inc.                                                                                                                                                                                                                                                                                                                                                                                  
|       
|        | 23  | -a*         |  | Consent of Ernst & Young LLP.                                                                                                                                                                                                                                                                                                                                                                                                 
|       
|        | 24  | -a*         |  | Power of Attorney.                                                                                                                                                                                                                                                                                                                                                                                                            
|       
|        | 31  | -a*         |  | Certification of principal executive officer required by
    Exchange Act Rule 13a-14(a).                                                                                                                                                                                                                                                                                                                                     
|       
|        | 31  | -b*         |  | Certification of principal financial officer required by
    Exchange Act Rule 13a-14(a).                                                                                                                                                                                                                                                                                                                                     
|       
|        | 32* |             |  | Certifications furnished pursuant to 18 U.S.C. 1350, as
    adopted pursuant to Section 906 of the Sarbanes-Oxley Act
    of 2002.                                                                                                                                                                                                                                                                                            








93