**UNITEDSTATESSECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

** **

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**FORM 10-Q**

 
| **(Mark One)**                                          | ** **                                                                                              |
|---------------------------------------------------------|---------------------------------------------------------------------------------------------------------|
| **x**                                                   | **QUARTERLY REPORT PURSUANT TO SECTION 13 OR  15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**  |
|                                                    |                                                                                                    |
| **For the  quarterly period ended March 31, 2008** |
| ** **                                              | ** **                                                                                              |
| **OR**                                                  |
|                                                    |                                                                                                    |
| **o**                                                   | **TRANSITION REPORT PURSUANT TO SECTION 13 OR  15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** |

 

**For thetransition periodfrom                to**

 

**Commission file number  001-12929**

 

**CommScope, Inc.**

(Exact name of registrant as specified in its charter)

 

| **Delaware**                     | ** ** | **36-4135495**      |
|----------------------------------|------------|---------------------|
| (State or other  jurisdiction of |       | (I.R.S. Employer    |
| incorporation or  organization)  |       | Identification No.) |

 

**1100 CommScope Place, SEP.O. Box 339Hickory, North Carolina**(Address of principal executive offices)

 

**28602**(Zip Code)

 

**(828) 324-2200**(Registrant’s telephone number, including area code)

 

Indicateby check mark whether the registrant (1) has filed all reports required tobe filed by Section 13 or 15(d) of the Securities Exchange Act of1934 during the preceding 12 months (or for such shorter period that theregistrant was required to file such reports), and (2) has been subject tosuch filing requirements for the past 90 days. Yes x    No o

 

Indicate by check markwhether the registrant is a large accelerated filer, an accelerated filer, a non-acceleratedfiler, or a smaller reporting company. See definitions of “large acceleratedfiler,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2of the Exchange Act. (Check one):

 

| Large accelerated filer  x                     |   | Accelerated filer o          |
|------------------------------------------------|--------|-----------------------------------|
|                                           |   |                              |
| Non-accelerated filer o                        |   | Smaller reporting  company o |
| (Do not check if a  smaller reporting company) |   |                              |

 

Indicate by check mark whether the registrant is ashell company (as defined in Rule 12b-2 of the Exchange Act). Yes o    No x

 

As of April 23, 2008there were 69,843,759 shares of Common Stock outstanding.

 

 

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**CommScope, Inc.Form 10-QMarch 31, 2008Table of Contents**

 
| Part I - Financial Information (Unaudited): |                                                                                        |
|--------------------------------------------------|---------------------------------------------------------------------------------------------|
|                                             |                                                                                        |   |
| Item 1.                                          | Condensed Consolidated Financial Statements:                                                |
|                                             |                                                                                        | Condensed  Consolidated Statements of Operations |
|                                             |                                                                                        | Condensed  Consolidated Balance Sheets |
|                                             |                                                                                        | Condensed  Consolidated Statements of Cash Flows |
|                                             |                                                                                        | Condensed  Consolidated Statements of Stockholders’ Equity and Comprehensive Income  (Loss) |
|                                             |                                                                                        | Notes to  Condensed Consolidated Financial Statements |
|                                             |                                                                                        |   |
| Item 2.                                          | Management’s  Discussion and Analysis of Financial Condition and Results of Operations |
|                                             |
| Item 3.                                          | Quantitative  and Qualitative Disclosures About Market Risk                                 |
|                                             |
| Item 4.                                          | Controls and  Procedures                                                                    |
|                                             |
| Part II - Other  Information:               |
|                                             |
| Item 1.                                          | Legal Proceedings                                                                           |
|                                             |
| Item 2.                                          | Unregistered  Sales of Equity Securities and Use of Proceeds                                |
|                                             |
| Item 6.                                          | Exhibits                                                                                    |
|                                             |
| Signatures                                       |                                                                                        |
|                                                  |                                                                                             |  |  |

 

1

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**CommScope, Inc.**

**Condensed Consolidated Statements ofOperations**

**(Unaudited— In thousands, except per share amounts)**

 
| ** **                                   | ** ** | **Three Months Ended** | ** ** |
|----------------------------------------------|------------|----------------------------------|------------|
| ** **                                   | ** ** | **March 31,**               | ** ** |
| ** **                                   | ** ** | **2008**                         | ** ** | **2007** | ** ** |
|                                         |       |                             |       |   |   |
| Net sales                                    |       | $                                | 1,005,094  |   | $ | 435,452 |   |
|                                         |       |                             |       |   |   |
| Operating costs  and expenses:               |       |                             |       |   |   |
| Cost of sales                                |       | 788,650                          |       | 303,508 |   |
| Selling, general  and administrative         |       | 128,018                          |       | 58,642 |   |
| Research and  development                    |       | 35,965                           |       | 7,869 |   |
| Amortization of  purchased intangible assets |       | 24,552                           |       | 1,040 |   |
| Restructuring  costs                         |       | 132                              |       | 729 |   |
| Total operating  costs and expenses          |       | 977,317                          |       | 371,788 |   |
|                                         |       |                             |       |   |   |
| Operating income                             |       | 27,777                           |       | 63,664 |   |
| Other income  (expense), net                 |       | (6,757                           | )          | 169 |   |
| Interest expense                             |       | (39,579                          | )          | (1,893 | ) |
| Interest income                              |       | 5,183                            |       | 4,496 |   |
|                                         |       |                             |       |   |   |
| Income (loss)  before income taxes           |       | (13,376                          | )          | 66,436 |   |
| Income tax  benefit (expense)                |       | 2,327                            |       | (20,581 | ) |
|                                         |       |                             |       |   |   |
| Net income  (loss)                           |       | $                                | (11,049    | ) | $ | 45,855 |   |
|                                         |       |                             |       |   |   |
| Earnings (loss)  per share:                  |       |                             |       |   |   |
| Basic                                        |       | $                                | (0.16      | ) | $ | 0.76 |   |
| Assuming  dilution                           |       | $                                | (0.16      | ) | $ | 0.63 |   |
|                                         |       |                             |       |   |   |
| Weighted average  shares outstanding:        |       |                             |       |   |   |
| Basic                                        |       | 67,430                           |       | 60,247 |   |
| Assuming  dilution                           |       | 67,430                           |       | 73,632 |   |

 

See notes tounaudited condensed consolidated financial statements.

 

2

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**CommScope, Inc.Condensed Consolidated Balance Sheets**

**(Unaudited — In thousands, exceptshare amounts)**

 
| ** **                                                                                                                                                                                                                                                                                       | ** ** | **March 31,** | ** ** | **December 31,** | ** ** |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|--------------------|------------|-----------------------|------------|
| ** **                                                                                                                                                                                                                                                                                       | ** ** | **2008**           | ** ** | **2007**              | ** ** |
| **Assets**                                                                                                                                                                                                                                                                                       |       |               |       |                  |       |
|                                                                                                                                                                                                                                                                                             |       |               |       |                  |       |
| Cash and cash  equivalents                                                                                                                                                                                                                                                                       |       | $                  | 459,251    |                  | $          | 649,451 |   |
| Accounts  receivable, less allowance for doubtful accounts of $20,891 and $22,154, respectively                                                                                                                                                                                                  |       | 764,267            |       | 793,366               |       |
| Inventories                                                                                                                                                                                                                                                                                      |       | 516,582            |       | 548,360               |       |
| Prepaid expenses  and other current assets                                                                                                                                                                                                                                                       |       | 106,285            |       | 133,737               |       |
| Deferred income  taxes                                                                                                                                                                                                                                                                           |       | 148,871            |       | 106,476               |       |
| Total current  assets                                                                                                                                                                                                                                                                            |       | 1,995,256          |       | 2,231,390             |       |
|                                                                                                                                                                                                                                                                                             |       |               |       |                  |       |
| Property, plant  and equipment, net                                                                                                                                                                                                                                                              |       | 523,395            |       | 525,305               |       |
| Goodwill                                                                                                                                                                                                                                                                                         |       | 1,306,485          |       | 1,211,214             |       |
| Other  intangibles, net                                                                                                                                                                                                                                                                          |       | 1,007,995          |       | 1,042,765             |       |
| Other noncurrent  assets                                                                                                                                                                                                                                                                         |       | 74,290             |       | 95,897                |       |
|                                                                                                                                                                                                                                                                                             |       |               |       |                  |       |
| Total Assets                                                                                                                                                                                                                                                                                     |       | $                  | 4,907,421  |                  | $          | 5,106,571 |   |
|                                                                                                                                                                                                                                                                                             |       |               |       |                  |       |
| **Liabilities and Stockholders’ Equity**                                                                                                                                                                                                                                                    |       |               |       |                  |       |
|                                                                                                                                                                                                                                                                                             |       |               |       |                  |       |
| Accounts payable                                                                                                                                                                                                                                                                                 |       | $                  | 367,540    |                  | $          | 350,615 |   |
| Other accrued  liabilities                                                                                                                                                                                                                                                                       |       | 309,486            |       | 399,944               |       |
| Current portion  of long-term debt                                                                                                                                                                                                                                                               |       | 217,288            |       | 247,662               |       |
| Total current  liabilities                                                                                                                                                                                                                                                                       |       | 894,314            |       | 998,221               |       |
|                                                                                                                                                                                                                                                                                             |       |               |       |                  |       |
| Long-term debt                                                                                                                                                                                                                                                                                   |       | 2,088,013          |       | 2,348,157             |       |
| Deferred income  taxes                                                                                                                                                                                                                                                                           |       | 334,701            |       | 268,647               |       |
| Pension and  postretirement benefit liabilities                                                                                                                                                                                                                                                  |       | 101,655            |       | 108,275               |       |
| Other noncurrent  liabilities                                                                                                                                                                                                                                                                    |       | 136,410            |       | 103,263               |       |
| Total  Liabilities                                                                                                                                                                                                                                                                               |       | 3,555,093          |       | 3,826,563             |       |
|                                                                                                                                                                                                                                                                                             |       |               |       |                  |       |
| Commitments and  contingencies                                                                                                                                                                                                                                                                   |       |               |       |                  |       |
|                                                                                                                                                                                                                                                                                             |       |               |       |                  |       |
| Stockholders’  Equity:                                                                                                                                                                                                                                                                      |       |               |       |                  |       |
| Preferred stock,  $.01 par value; Authorized shares: 20,000,000; Issued and outstanding shares:  None at March 31, 2008 and December 31, 2007                                                                                                                                          |       | —             |       | —                |       |
| Common stock,  $.01 par value; Authorized shares: 300,000,000; Issued shares, including  treasury stock: 80,004,700 at March 31, 2008 and 77,070,029 at  December 31, 2007; Issued and outstanding shares: 69,804,700 at  March 31, 2008 and 66,870,029 at December 31, 2007 |       | 800                |       | 770                   |       |
| Additional  paid-in capital                                                                                                                                                                                                                                                                      |       | 939,085            |       | 856,452               |       |
| Retained  earnings                                                                                                                                                                                                                                                                               |       | 534,558            |       | 545,607               |       |
| Accumulated  other comprehensive income                                                                                                                                                                                                                                                          |       | 23,420             |       | 22,714                |       |
| Treasury stock,  at cost: 10,200,000 shares at March 31, 2008 and December 31, 2007                                                                                                                                                                                                    |       | (145,535           | )          | (145,535              | )          |
| Total  Stockholders’ Equity                                                                                                                                                                                                                                                                 |       | 1,352,328          |       | 1,280,008             |       |
|                                                                                                                                                                                                                                                                                             |       |               |       |                  |       |
| Total  Liabilities and Stockholders’ Equity                                                                                                                                                                                                                                                 |       | $                  | 4,907,421  |                  | $          | 5,106,571 |   |

 

See notes tounaudited condensed consolidated financial statements.

 

3

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**CommScope, Inc.Condensed Consolidated Statements of Cash Flows**

**(Unaudited — In thousands)**

 
| ** **                                                                                | ** ** | **Three Months Ended** | ** ** |
|-------------------------------------------------------------------------------------------|------------|----------------------------------|------------|
| ** **                                                                                | ** ** | **March 31,**               | ** ** |
| ** **                                                                                | ** ** | **2008**                         | ** ** | **2007** | ** ** |
|                                                                                      |       |                             |       |   |   |
| **Operating  Activities:**                                                                |       |                             |       |   |   |
| Net income  (loss)                                                                        |       | $                                | (11,049    | ) | $ | 45,855 |   |
| Adjustments to  reconcile net income (loss) to net cash provided by operating activities: |       |                             |       |   |   |
| Depreciation and  amortization                                                            |       | 56,674                           |       | 12,372 |   |
| Equity-based  compensation                                                                |       | 4,596                            |       | 2,641 |   |
| Changes in  assets and liabilities:                                                       |       |                             |       |   |   |
| Accounts  receivable                                                                      |       | 46,344                           |       | (42,945 | ) |
| Inventories                                                                               |       | 42,033                           |       | (14,512 | ) |
| Prepaid expenses  and other assets                                                        |       | 16,304                           |       | 2,097 |   |
| Accounts payable  and other liabilities                                                   |       | (78,921                          | )          | 5,023 |   |
| Other                                                                                     |       | 4,173                            |       | 150 |   |
| Net cash  provided by operating activities                                                |       | 80,154                           |       | 10,681 |   |
|                                                                                      |       |                             |       |   |   |
| **Investing  Activities:**                                                                |       |                             |       |   |   |
| Purchases of  property, plant and equipment                                               |       | (11,820                          | )          | (4,077 | ) |
| Net purchases of  short-term investments                                                  |       | —                           |       | (11,214 | ) |
| Proceeds from  disposal of fixed assets                                                   |       | 2,203                            |       | 85 |   |
| Proceeds from  sale of product line                                                       |       | 8,513                            |       | — |   |
| Acquisition of  Andrew Corporation                                                        |       | (58,371                          | )          | — |   |
| Net cash used in  investing activities                                                    |       | (59,475                          | )          | (15,206 | ) |
|                                                                                      |       |                             |       |   |   |
| **Financing  Activities:**                                                                |       |                             |       |   |   |
| Principal  payments on long-term debt                                                     |       | (221,410                         | )          | (3,250 | ) |
| Proceeds from  the issuance of shares under equity-based compensation plans               |       | 1,040                            |       | 19,295 |   |
| Tax benefit from  the issuance of shares under equity-based compensation plans            |       | 420                              |       | 8,893 |   |
| Long-term  financing costs                                                                |       | (246                             | )          | — |   |
| Net cash  provided by (used in) financing activities                                      |       | (220,196                         | )          | 24,938 |   |
|                                                                                      |       |                             |       |   |   |
| Effect of  exchange rate changes on cash and cash equivalents                             |       | 9,317                            |       | 231 |   |
|                                                                                      |       |                             |       |   |   |
| Change in cash  and cash equivalents                                                      |       | (190,200                         | )          | 20,644 |   |
| Cash and cash  equivalents, beginning of period                                           |       | 649,451                          |       | 276,042 |   |
| Cash and cash  equivalents, end of period                                                 |       | $                                | 459,251    |   | $ | 296,686 |   |

 

See notes tounaudited condensed consolidated financial statements.

 

4

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**CommScope, Inc.**

**Condensed ConsolidatedStatements of Stockholders' Equity**

**and Comprehensive Income (Loss)**

**(Unaudited — In thousands, except share amounts)**

 
| ** **                                                            | ** ** | **Three Months Ended  March 31,** | ** ** |
|-----------------------------------------------------------------------|------------|--------------------------------------------------|------------|
| ** **                                                            | ** ** | **2008**                                         | ** ** | **2007** | ** ** |
|                                                                  |       |                                             |       |   |   |
| Number of common  shares outstanding:                                 |       |                                             |       |   |   |
| Balance at  beginning of period                                       |       | 66,870,029                                       |       | 59,734,533 |   |
| Issuance of  shares under equity-based compensation plans             |       | 56,422                                           |       | 1,203,666 |   |
| Issuance of  shares for conversion of convertible debentures          |       | 2,878,249                                        |       | — |   |
| Balance at end  of period                                             |       | 69,804,700                                       |       | 60,938,199 |   |
|                                                                  |       |                                             |       |   |   |
| Common stock:                                                         |       |                                             |       |   |   |
| Balance at  beginning of period                                       |       | $                                                | 770        |   | $ | 699 |   |
| Issuance of  shares under equity-based compensation plans             |       | 1                                                |       | 12 |   |
| Issuance of shares  for conversion of convertible debentures          |       | 29                                               |       | — |   |
| Balance at end  of period                                             |       | $                                                | 800        |   | $ | 711 |   |
|                                                                  |       |                                             |       |   |   |
| Additional  paid-in capital:                                          |       |                                             |       |   |   |
| Balance at  beginning of period                                       |       | $                                                | 856,452    |   | $ | 532,344 |   |
| Issuance of  shares under equity-based compensation plans             |       | 1,039                                            |       | 19,283 |   |
| Tax benefit from  shares issued under equity-based compensation plans |       | 420                                              |       | 8,893 |   |
| Equity-based  compensation expense recognized                         |       | 4,596                                            |       | 2,641 |   |
| Issuance of  shares for conversion of convertible debentures          |       | 76,578                                           |       | — |   |
| Balance at end  of period                                             |       | $                                                | 939,085    |   | $ | 563,161 |   |
|                                                                  |       |                                             |       |   |   |
| Retained  earnings:                                                   |       |                                             |       |   |   |
| Balance at  beginning of period                                       |       | $                                                | 545,607    |   | $ | 346,821 |   |
| Net income  (loss)                                                    |       | (11,049                                          | )          | 45,855 |   |
| Impact of  adoption of FIN 48                                         |       | —                                           |       | (6,055 | ) |
| Balance at end  of period                                             |       | $                                                | 534,558    |   | $ | 386,621 |   |
|                                                                  |       |                                             |       |   |   |
| Accumulated  other comprehensive income:                              |       |                                             |       |   |   |
| Balance at  beginning of period                                       |       | $                                                | 22,714     |   | $ | 4,775 |   |
| Other  comprehensive income, net of tax                               |       | 706                                              |       | 1,431 |   |
| Balance at end  of period                                             |       | $                                                | 23,420     |   | $ | 6,206 |   |
|                                                                  |       |                                             |       |   |   |
| Treasury stock,  at cost:                                             |       |                                             |       |   |   |
| Balance at  beginning and end of period                               |       | $                                                | (145,535   | ) | $ | (145,535 | ) |
|                                                                  |       |                                             |       |   |   |
| Total  stockholders’ equity                                      |       | $                                                | 1,352,328  |   | $ | 811,164 |   |

 
| ** **                                                                     | ** ** | **Three Months Ended  March 31,** | ** ** |
|--------------------------------------------------------------------------------|------------|--------------------------------------------------|------------|
| ** **                                                                     | ** ** | **2008**                                         | ** ** | **2007** | ** ** |
|                                                                           |       |                                             |       |   |   |
| Comprehensive  income (loss):                                                  |       |                                             |       |   |   |
| Net income  (loss)                                                             |       | $                                                | (11,049    | ) | $ | 45,855 |   |
| Other  comprehensive income, net of tax:                                       |       |                                             |       |   |   |
| Foreign currency  translation gain                                             |       | 29,938                                           |       | 500 |   |
| Foreign currency  transaction gain on long-term intercompany loans             |       | 1,027                                            |       | 1,146 |   |
| Loss on  derivative financial instruments                                      |       | (30,037                                          | )          | (102 | ) |
| Amortization of  unrecognized pension and other postretirement benefit amounts |       | (222                                             | )          | (113 | ) |
| Total other  comprehensive income, net of tax                                  |       | 706                                              |       | 1,431 |   |
|                                                                           |       |                                             |       |   |   |
| Total  comprehensive income (loss)                                             |       | $                                                | (10,343    | ) | $ | 47,286 |   |

 

See notes tounaudited condensed consolidated financial statements.

 

5

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**CommScope, Inc.Notes to Condensed Consolidated Financial Statements**

**(Unaudited—InThousands, Unless Otherwise Noted)**

 

**1.****             ****BACKGROUND AND BASIS OF PRESENTATION**

 

**Background**

 

CommScope, Inc.and its wholly owned subsidiaries (CommScope or the Company) is a world leaderin infrastructure solutions for communications networks. With the December 27,2007 acquisition of Andrew Corporation (Andrew), the Company is a global leaderin providing radio frequency subsystem solutions for wireless networks. Throughits SYSTIMAX® and Uniprise® brands, the Company is also aglobal leader in structured cabling systems for business enterpriseapplications. In addition, CommScope is the premier manufacturer of coaxialcable for broadband cable television networks and one of the leading NorthAmerican providers of environmentally secure cabinets for digital subscriberline (DSL) and Fiber-to-the-Node (FTTN) applications.

 

#### **Basisof Presentation**

####  

The condensedconsolidated balance sheet as of March 31, 2008 and the condensed consolidatedstatements of operations, cash flows, stockholders’ equity and comprehensiveincome (loss) for the three months ended March 31, 2008 and 2007 areunaudited and reflect all adjustments of a normal recurring nature that are, inthe opinion of management, necessary for a fair presentation of the interimperiod financial statements. The results of operations for the interim periodare not necessarily indicative of the results of operations to be expected forthe full year.

 

The unaudited interimcondensed consolidated financial statements of CommScope have been preparedpursuant to the rules and regulations of the Securities and ExchangeCommission (SEC). Accordingly, certain information and footnote disclosuresnormally included in financial statements prepared in accordance withaccounting principles generally accepted in the United States of America havebeen condensed or omitted. The significant accounting policies followed by theCompany are set forth in Note 2 to the consolidated financial statements withinthe Company’s Annual Report on Form 10-K for the year ended December 31,2007 (the 2007 Form 10-K). There were no changes in the Company’ssignificant accounting policies during the three months ended March 31,2008 other than the implementation of Statements of Financial AccountingStandards (SFAS) No. 157, “Fair Value Measurements” (SFAS No. 157)and SFAS No. 159, “The Fair Value Option for Financial Assets andFinancial Liabilities”  (SFAS No. 159)(see Note 7).  In addition, the Companyreaffirms the use of estimates in the preparation of the financial statementsas set forth in the 2007 Form 10-K. These interim condensed consolidatedfinancial statements should be read in conjunction with the Company’s auditedconsolidated financial statements and notes thereto included in the 2007 Form 10-K.

 

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

 

###### **Concentrationsof Risk**

######  

Net sales to AnixterInternational Inc. and its affiliates (Anixter) accounted for approximately 12%and 30% of the Company’s total net sales during the three months ended March 31,2008 and 2007, respectively.  Sales toAnixter primarily originate within the Enterprise segment.

 

Net sales toAlcatel-Lucent, an original equipment manufacturer (OEM) for telecommunicationscompanies, accounted for approximately 10% and 12% of the Company’s total netsales during the three months ended March 31, 2008 and 2007,respectively.  Sales to Alcatel-Lucentprimarily originate within the Antenna, Cable and Cabinets Group and WirelessNetwork Solutions segments.  Other thanAnixter and Alcatel-Lucent, no customer accounted for 10% or more of theCompany’s total net sales for the three months ended March 31, 2008 and2007.

 

6

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Accounts receivable fromAnixter and Alcatel-Lucent represented approximately 12% and 10%, respectively,of net accounts receivable as of March 31, 2008. No other customeraccounted for 10% or more of the Company’s net accounts receivable as of March 31,2008.

 

**ProductWarranties**

 

The Company recognizes aliability for the estimated claims that may be paid under its customer warrantyagreements to remedy potential deficiencies of quality or performance of theCompany’s products. These product warranties extend over periods ranging fromone to twenty-five years from the date of sale, depending upon the productsubject to the warranty. The Company records a provision for estimated futurewarranty claims as cost of sales based upon the historical relationship ofwarranty claims to sales and specifically-identified warranty issues. Duringthe three months ended March 31, 2008, the Company recorded an addition to theproduct warranty accrual as an adjustment to the Andrew preliminary purchaseprice allocation as a result of additional information obtained regardingwarranty exposure on certain products sold prior to CommScope’s acquisition ofAndrew. The Company bases its estimates on assumptions that are believed to bereasonable under the circumstances and revises its estimates, as appropriate,when events or changes in circumstances indicate that revisions may benecessary.

 

The following table summarizes the activity in theproduct warranty accrual, included in other accrued liabilities, for the threemonths ended March 31, 2008 and 2007. The beginning balance and the activity for the three months ended March 31,2008 include the activity related to legacy Andrew products.

 
| ** **                                                | ** ** | **2008** | ** ** | **2007** | ** ** |
|-----------------------------------------------------------|------------|----------|------------|----------|------------|
| Product  warranty accrual, beginning of period            |       | $        | 29,183     |     | $          | 2,090 |   |
| Provision  for warranty claims                            |       | 3,873    |       | 14       |       |
| Revision  of Andrew preliminary purchase price allocation |       | 9,375    |       | —   |       |
| Less:  Warranty settlements                               |       | (8,553   | )          | (1       | )          |
| Product  warranty accrual, end of period                  |       | $        | 33,878     |     | $          | 2,103 |   |

 

**Commitmentsand Contingencies**

 

In 2007, a jury ruled infavor of TruePosition, Inc., finding that Andrew had willfully infringed asingle TruePosition patent, and the jury awarded $45.3 million in damagesto TruePosition (see Note 16 in the Notes to the Consolidated FinancialStatements in the 2007 Form 10-K). In addition to the TruePositionlitigation described above, CommScope is either a plaintiff or a defendant inpending legal matters in the normal course of business; however, managementbelieves none of these legal matters, other than the TruePosition litigation,will have a materially adverse effect on the Company’s financial statementsupon final disposition. In addition, CommScope is subject to various federal,state, local and foreign laws and regulations governing the use, discharge,disposal and remediation of hazardous materials. Compliance with current lawsand regulations has not had, and is not expected to have, a materially adverseeffect on the Company’s financial condition or results of operations.

 

### **Earnings(Loss) Per Share**

###  

### Basic earnings (loss) per share is computed by dividing net income(loss) by the weighted average number of common shares outstanding during theapplicable period. Diluted earnings (loss) per share is based on net income (loss)adjusted for after-tax interest and amortization of debt issuance costs relatedto convertible debt, if dilutive, divided by the weighted average number ofcommon shares outstanding adjusted for the dilutive effect of stock options,restricted stock units, performance share units and convertible securities.

###  

Below is a reconciliationof earnings (loss) and weighted average common shares and potential commonshares outstanding for calculating diluted earnings (loss) per share:

 

7

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| ** **                                                                                                            | ** ** | **Three Months  Ended  March 31,** | ** ** |
|-----------------------------------------------------------------------------------------------------------------------|------------|----------------------------------------------|------------|
| ** **                                                                                                            | ** ** | **2008**                                     | ** ** | **2007** | ** ** |
| Numerator:                                                                                                            |       |                                         |       |   |   |
| Net  income (loss) for basic earnings per share                                                                       |       | $                                            | (11,049    | ) | $ | 45,855 |   |
| Effect  of assumed conversion of convertible senior subordinated debentures                                           |       | —                                       |       | 629 |   |
| Income  (loss) applicable to common shareholders for diluted earnings (loss) per  share                               |       | $                                            | (11,049    | ) | $ | 46,484 |   |
|                                                                                                                  |       |                                         |       |   |   |
| Denominator:                                                                                                          |       |                                         |       |   |   |
| Weighted  average number of common shares outstanding for basic earnings (loss) per  share                            |       | 67,430                                       |       | 60,247 |   |
| Effect  of dilutive securities:                                                                                       |       |                                         |       |   |   |
| Employee  stock options                                                                                               |       | —                                       |       | 1,534 |   |
| Restricted  stock units and performance share units                                                                   |       | —                                       |       | 357 |   |
| Convertible  senior subordinated debentures                                                                           |       | —                                       |       | 11,494 |   |
| Weighted  average number of common and potential common shares outstanding for diluted  earnings (loss) per share (a) |       | 67,430                                       |       | 73,632 |   |

 

----

(a)          The calculation of dilutedearnings (loss) per share for the three months ended March 31, 2008excludes the dilutive effect of 1.1 million stock options, 0.6 millionrestricted stock units and performance share units, and 11.5 millionconvertible senior subordinated debentures because they would have decreasedthe loss per share.  Options to purchase approximately 0.8million and 0.5 million common shares were excluded from the computation of dilutedearnings (loss) per share for the three months ended March 31, 2008 and2007, respectively, because they would have been antidilutive.

 

**IncomeTax Uncertainties**

 

The Company adopted theprovisions of Financial Accounting Standards Board (FASB) Interpretation No. 48,“Accounting for Uncertainty in Income Taxes,” (FIN 48) as of January 1,2007, resulting in a $4.2 million increase in the liability for unrecognizedtax benefits with an offsetting reduction to opening retained earnings. Inaddition, the Company reduced a long-term deferred tax asset by $4.0 millionwith an offsetting reduction to opening retained earnings of $1.9 million andan increase of $2.1 million to long-lived assets as a purchase accountingadjustment related to the 2004 acquisition of Connectivity Solutions.

 

The liability forunrecognized tax benefits under FIN 48 was $63.9 million at March 31, 2008and $61.3 million at December 31, 2007. The Company’s unrecognized tax benefits as of March 31, 2008include $14.5 million that, if recognized, would favorably affect the effectivetax rate in future periods.  Accruedinterest and penalties related to unrecognized tax benefits was $6.7 million asof March 31, 2008 and December 31, 2007.

 

**Impactof Newly Issued Accounting Standards**

 

In December 2007, the FASB issued SFAS No. 141(revised 2007), “Business Combinations” (SFAS No. 141(R)). SFAS No. 141(R) modifieshow acquirers recognize and measure the consideration transferred, identifiableassets acquired, liabilities assumed, noncontrolling interests and goodwillacquired in a business combination. SFAS No. 141(R) requires thatacquisition related expenses and restructuring costs be expensed.  SFAS No. 141(R) will be implementedas of January 1, 2009 and will generally be effective, on a prospectivebasis, for transactions consummated on or after January 1, 2009.  Provisions of SFAS No. 141(R) relatedto the accounting for certain income tax assets and liabilities will also beeffective for acquisitions completed prior to the effective date.  The Company is currently unable to determinethe impact of adopting SFAS No. 141(R).

 

In December 2007, the FASB issued SFAS No. 160,“Noncontrolling Interests in Consolidated Financial Statements” (SFAS No. 160).SFAS No. 160 establishes requirements for ownership interests insubsidiaries held by parties other than the Company (i.e., minority interests)to be shown separate from the parent’s equity within the equity section of theconsolidated statement of financial position. Changes in the parent’s ownershipinterests are required to be accounted for as equity transactions and anynoncontrolling equity investments in unconsolidated subsidiaries must bemeasured initially at fair value. SFAS No. 160 will be implemented, on aprospective basis, as of January 1, 2009. Presentation and disclosure 

 

8

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requirementsmust be retrospectively applied to comparative financial statements. SFAS No. 160is not expected to have a material impact on the Company’s consolidatedfinancial position and results of operations.

 

In March 2008, the FASB issued SFAS No. 161,“Disclosures About Derivative Instruments and Hedging Activities – an amendmentof FASB Statement No. 133” (SFAS No. 161). SFAS No. 161 expandsrequired disclosure about an entity’s derivative instruments and hedgingactivities. SFAS No. 161 is effective for fiscal years beginning after November 15,2008.

 

**2.****             ****ACQUISITIONS**

 

**AndrewCorporation**

 

On December 27,2007, CommScope completed its acquisition of Andrew. The Company acquiredAndrew primarily to become a global leader in providing radio frequencysubsystem solutions for wireless networks. The acquisition provides CommScopethe opportunity to build upon complementary global product offerings andrealize operational synergies.

 

The total purchaseprice consisted of approximately $2.3 billion in cash and approximately5.1 million shares of CommScope common stock, with a value ofapproximately $255 million. The cash portion of the purchase price wasfunded primarily through $2.1 billion of borrowings under new seniorsecured credit facilities. The Company prepared the following preliminaryestimate of the acquisition date fair values assigned to each major asset andliability category of Andrew as of March 31, 2008 (in millions):

 
| ** **                                                 | ** ** | **Estimated Fair  Value** | ** ** |
|------------------------------------------------------------|------------|--------------------------------|------------|
| Cash  and cash equivalents                                 |       | $                              | 165.7      |   |
| Accounts  receivable                                       |       | 590.4                          |       |
| Inventories                                                |       | 387.5                          |       |
| Other  current assets                                      |       | 205.4                          |       |
| Property,  plant and equipment                             |       | 303.2                          |       |
| Identifiable  intangible assets                            |       | 970.4                          |       |
| Goodwill                                                   |       | 1,151.9                        |       |
| Other  noncurrent assets                                   |       | 37.4                           |       |
| Total  assets                                              |       | $                              | 3,811.9    |   |
| Accounts  payable                                          |       | $                              | 281.6      |   |
| Current  employee benefit liabilities                      |       | 57.4                           |       |
| Other  current liabilities                                 |       | 198.3                          |       |
| Current  portion of long-term debt                         |       | 234.2                          |       |
| Long-term  debt                                            |       | 11.7                           |       |
| Noncurrent  pension and postretirement benefit liabilities |       | 35.9                           |       |
| Noncurrent  deferred tax liabilities                       |       | 386.8                          |       |
| Other  noncurrent liabilities                              |       | 50.2                           |       |
| Total  liabilities                                         |       | $                              | 1,256.1    |   |
| Net  acquisition cost                                      |       | $                              | 2,555.8    |   |

 

Revisions to thepreliminary purchase price allocation from the initial allocation reflect newinformation received during the three months ended March 31, 2008.  Such information included the determinationthat certain foreign earnings will be remitted to the U.S., warranty exposurefrom certain products exhibiting performance issues, asset valuations relatedto assets that were either sold or subject to sales agreements, updatedinformation in support of identifiable intangible asset valuations and initialrestructuring plans that were put into place. As additional information is obtained regarding these and other matters,there may be further adjustments to the preliminary purchase price allocation.

 

The table belowsummarizes preliminary valuations of the intangible assets acquired that were determinedby management to meet the criteria for recognition apart from goodwill. Thevalues presented below are preliminary estimates and are subject to change asmanagement completes its valuation of the Andrew acquisition.

 
| ** **                           | ** ** | **Estimated Fair  Value** | ** ** | **Weighted  Average  Amortization  Period** | ** ** |
|--------------------------------------|------------|--------------------------------|------------|---------------------------------------------|------------|
| ** **                           | ** ** | **(in millions)**         | ** ** | **(in years)**                         | ** ** |
| Customer  base                       |       | $                              | 552.6      |                                        | 7.1        |   |
| Trade  names and trademarks          |       | 336.2                          |       | 23.0                                        |       |
| Patents  and technologies            |       | 81.6                           |       | 6.6                                         |       |
| Total  amortizable intangible assets |       | $                              | 970.4      |                                        | 12.6       |   |

 

9

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The identifiableintangible assets were determined by management to have finite lives. Theuseful lives for the customer base were based on management’s forecasts ofcustomer turnover, sales levels with major customers and types of customers.The useful lives for the trade names and trademarks were estimated based on theperiods that the trade names and trademarks have been in use and the absence ofa definite plan to discontinue their use in the foreseeable future. The usefullives for the patents and technologies were based on review of historical livesof similar products, in conjunction with technology-specific factors andanticipated future trends in the industry as well as the remaining lives of therelated patents.

 

The goodwillarising from the preliminary purchase price allocation is believed to beconsistent with Andrew’s reputation in the marketplace (which is expected tolead to sales to new customers), synergies expected to be realized from theacquisition and the going concern value of the assembled Andrew business. Thegoodwill is not expected to be deductible for tax purposes.  The following table presents the allocationof goodwill, including the preliminary goodwill allocation arising from theAndrew acquisition, to reportable segments (in millions):

 
| Antenna,  Cable and Cabinets Group                                 |   | $       | 834.9   |   |
|--------------------------------------------------------------------|--------|---------|---------|--------|
| Wireless  Network Solutions                                        |   | 317.0   |    |
| Goodwill  from the preliminary allocation of Andrew purchase price |   | 1,151.9 |    |
| Enterprise                                                         |   | 20.9    |    |
| Broadband                                                          |   | 133.7   |    |
| Total                                                              |   | $       | 1,306.5 |   |

 

The Andrew amountsincluded in the following pro forma information are based on Andrew’shistorical results and, therefore, may not be indicative of the actual resultswhen operated as part of CommScope. The pro forma adjustments representmanagement’s best estimates based on information available at the time thepro forma information was prepared and may differ from the adjustmentsthat may actually have been required. Accordingly, the pro forma financialinformation should not be relied upon as being indicative of the historicalresults that would have been realized had the acquisition occurred as of thedate indicated or that may be achieved in the future.

 

The followingtable presents consolidated results of operations for CommScope for the three monthsended March 31, 2007 as though the acquisition had been completed as of January 1,2007 (in millions, except per share amount):

 
| Net sales                   |   | $    | 938.2  |   |
|-----------------------------|--------|------|--------|--------|
| Net  income                 |   | 7.5  |   |
| Diluted  earnings per share |   | 0.10 |   |

 

Thesepro forma results reflect pro forma adjustments for net interestexpense, depreciation, amortization and related income taxes. No pro formaadjustment has been made to provide a tax benefit for Andrew’s actual netlosses.

 

Net loss duringthe three months ended March 31, 2008 includes certain charges that relatedirectly or indirectly to the acquisition, as listed below on a pretax basis(in millions):

 
| Purchase  accounting inventory adjustment  |   | $   | 52.8   |   |
|--------------------------------------------|--------|-----|--------|--------|
| Acquisition  and integration related costs |   | 2.9 |   |

 

On January 31,2008, the Company sold the Satellite Communications (SatCom) product lineacquired as part of the Andrew acquisition to ASC Signal Corporation (ASC). TheCompany received $8.5 million in cash, $2.5 million in notesreceivable due April 30, 2010, a 17.9% ownership interest in ASC and thepotential for up to an additional $25.0 million of cash if certainfinancial targets are met over a three year period from the date of thedivestiture. In addition, the Company will receive an additional notereceivable for $2.5 million also due April 30, 2010, upon completionof certain manufacturing asset transfers, expected to be completed within oneyear. Net sales from the SatCom product line for the three months ended March 31,2008 and 2007 were $8.6 million and $30.7 million, respectively.  No gain or loss was recognized on the sale ofSatCom.

 

10

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On March 26,2008, the Company entered into an agreement to divest its minority interest inAndes Industries, Inc. (Andes), which had been acquired as part of theAndrew acquisition.  The agreement wasapproved by the United States Department of Justice on April 24, 2008 andthe transaction was consummated on April 28, 2008.  No gain or loss was recognized on thedisposal of the Andes interest.

 

**SignalVision, Inc.**

 

On May 1,2007, CommScope acquired substantially all of the assets and assumed certaincurrent liabilities of Signal Vision, Inc., a leading supplier ofbroadband radio frequency subscriber products, for approximately$19.0 million, of which $17.0 million was paid in cash and thebalance is payable by May 2009. The acquisition is included within theBroadband segment and resulted in net sales of $5.5 million for the threemonths ended March 31, 2008.

 

The allocation ofthe purchase price, based on estimated fair values of the assets acquired, isas follows:

 
| ** **                         | ** ** | **Estimated Fair  Value** | ** ** | **Amortization  Period** | ** ** |
|------------------------------------|------------|--------------------------------|------------|--------------------------|------------|
| ** **                         | ** ** | **(in millions)**         | ** ** | **(in years)**      | ** ** |
| Inventory                          |       | $                              | 4.4        |                     |       |   |
| Accounts  receivable               |       | 2.5                            |       |                     |       |
| Machinery  and equipment           |       | 0.1                            |       |                     |       |
| Intangible  assets:                |       |                           |       |                     |       |
| Customer  base                     |       | 5.2                            |       | 9.7                      |       |
| Trade  name                        |       | 0.7                            |       | 3.7                      |       |
| Patents  and technologies          |       | 0.4                            |       | 10.0                     |       |
| Other                              |       | 3.0                            |       | 5.0                      |       |
| Goodwill                           |       | 3.1                            |       |                     |       |
| Less:  Current liabilities assumed |       | (0.4                           | )          |                     |       |
|                               |       |                           |       |                     |       |
| Total  purchase price              |       | $                              | 19.0       |                     |       |   |

 

The weightedaverage estimated useful life of the amortizable intangible assets acquired is7.8 years.

 

**3.****             ****BALANCE SHEET DETAILS**

 

**Inventories**

 
| ** **       | ** ** | **March 31,** | ** ** | **December 31,** | ** ** |
|------------------|------------|--------------------|------------|-----------------------|------------|
| ** **       | ** ** | **2008**           | ** ** | **2007**              | ** ** |
|             |       |               |       |                  |       |
| Raw  materials   |       | $                  | 158,682    |                  | $          | 137,606 |   |
| Work  in process |       | 150,329            |       | 158,721               |       |
| Finished  goods  |       | 207,571            |       | 252,033               |       |
|             |       | $                  | 516,582    |                  | $          | 548,360 |   |

 

**OtherCurrent Accrued Liabilities**

 
| ** **                                     | ** ** | **March 31,  2008** | ** ** | **December 31,  2007** | ** ** |
|------------------------------------------------|------------|--------------------------|------------|-----------------------------|------------|
| Compensation  and employee benefit liabilities |       | $                        | 94,238     |                        | $          | 118,361 |   |
| Purchase  price payable                        |       | 5,047                    |       | 61,240                      |       |
| Litigation  reserve                            |       | 45,300                   |       | 45,300                      |       |
| Warranty  reserve                              |       | 33,878                   |       | 29,183                      |       |
| Restructuring  reserve                         |       | 26,550                   |       | 34,695                      |       |
| Other                                          |       | 104,473                  |       | 111,165                     |       |
|                                           |       | $                        | 309,486    |                        | $          | 399,944 |   |

 

11

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**4.****             ****FINANCING**

 
| ** **                                        | ** ** | **March 31,** | ** ** | **December 31,** | ** ** |
|---------------------------------------------------|------------|--------------------|------------|-----------------------|------------|
| ** **                                        | ** ** | **2008**           | ** ** | **2007**              | ** ** |
| Seven-year  senior secured term loan              |       | $                  | 1,336,949  |                  | $          | 1,350,000 |   |
| Six-year  senior secured term loan                |       | 750,000            |       | 750,000               |       |
| 1%  convertible senior subordinated debentures    |       | 199,550            |       | 250,000               |       |
| 3.25%  convertible senior subordinated debentures |       | 105                |       | 231,264               |       |
| Other                                             |       | 18,697             |       | 14,555                |       |
|                                              |       | 2,305,301          |       | 2,595,819             |       |
| Less  current portion                             |       | (217,288           | )          | (247,662              | )          |
|                                              |       | $                  | 2,088,013  |                  | $          | 2,348,157 |   |

 

See Note 9 in theNotes to the Consolidated Financial Statements in the 2007 Form 10-K forinformation on the terms and conditions of the senior secured creditfacilities. As of March 31, 2008, the Company had availability ofapproximately $376 million and no outstanding borrowings under the seniorsecured revolving credit facility. The weighted average effective interest rateon outstanding borrowings under the above debt instruments, including theeffect of the interest rate swap (see Note 6 below) and amortization ofassociated loan fees, was 6.08% and 6.23% at March 31, 2008 and December 31,2007, respectively.

 

During the threemonths ended March 31, 2008, the Company agreed with certain holders ofthe 1% convertible senior subordinated debentures to increase the conversionrate as an inducement for them to convert their debentures to commonstock.  Accordingly, $50.45 million ofthe debentures were converted into 2,393,513 shares of common stock (2,319,540related to the original conversion ratio and 73,973 related to theinducement).  As a result of theinducement, the Company recorded a $2.8 million pretax charge in other expensein the Condensed Consolidated Statement of Operations.

 

During the threemonths ended March 31, 2008, holders of substantially all of the 3.25%convertible senior subordinated debentures assumed in the Andrew acquisitionchose to convert their debentures into the contractual merger  consideration.  As a result, $207.5 million of cash was paidand 484,736 shares of CommScope common stock were issued.

 

See Note 9 in the Notesto the Consolidated Financial Statements in the 2007 Form 10-K for informationon the terms and conditions of the 1% convertible senior subordinateddebentures. The 1% convertible senior subordinated debentures are classified ascurrent liabilities as of March 31, 2008 because they may be redeemed bythe holders on March 20, 2009.

 

**5.**              RESTRUCTURING COSTS

** **

During the three monthsended March 31, 2008, the Company recorded net restructuring charges of$132, which included $412 related to initial restructuring actions as furtheractions are considered at one of the Company’s European manufacturingfacilities.  These charges were partiallyoffset by a net gain of $280 realized on the sale of a parcel of land at theCompany’s Omaha facility that had been written down as part of an earlierrestructuring.  The restructuring chargesrecognized during the three months ended March 31, 2007 resulted fromactions taken under the Company’s global manufacturing initiatives that werebegun during 2005 and completed in 2007. The pretax restructuring charges recognized by the Company during thethree months ended March 31, 2008 and 2007 were as follows:

 
| ** **                              | ** ** | **Enterprise  Segment** | ** ** | **Broadband  Segment** | ** ** | **ACCG  Segment** | ** ** | **Total** | ** ** |
|-----------------------------------------|------------|-------------------------|------------|------------------------|------------|-------------------|------------|-----------|------------|
| Three  months ended March 31, 2008 |       | $                       | (280       | )                      | $          | 412               |       | $         | —     |   | $ | 132 |   |
| Three  months ended March 31, 2007 |       | 488                     |       | 155                    |       | 86                |       | 729       |       |
|                                         |            |                         |            |                        |            |                   |            |           |            |  |  |  |  |

 

12

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The liability forrestructuring costs as of March 31, 2008 and December 31, 2007 and the activityassociated with employee-related costs and lease termination costs during thethree months ended March 31, 2008 are related to the integration of Andrew operations.The activity within the liability (included in other accrued liabilities) forthese restructuring initiatives was as follows:

 
| ** **                                    | ** ** | **Employee-  Related  Costs** | ** ** | **Lease  Termination  Costs** | ** ** | **Asset  Impairment  Charges** | ** ** | **Total** | ** ** |
|-----------------------------------------------|------------|-------------------------------|------------|-------------------------------|------------|--------------------------------|------------|-----------|------------|
| Balance as of  December 31, 2007         |       | $                             | 32,506     |                          | $          | 2,189                          |       | —    |       | $ | 34,695 |   |
| Additional  charge (recovery) recorded        |       | 412                           |       | —                        |       | (280                           | )          | 132       |       |
| Revision of  Andrew purchase price allocation |       | 1,937                         |       | 558                           |       | —                         |       | 2,495     |       |
| Cash paid                                     |       | (10,681                       | )          | (355                          | )          | —                         |       | (11,036   | )          |
| Non-cash items                                |       | (16                           | )          | —                        |       | 280                            |       | 264       |       |
| Balance as of  March 31, 2008            |       | $                             | 24,158     |                          | $          | 2,392                          |       | —    |       | $ | 26,550 |   |

 

Employee-relatedcosts include the expected severance costs and related fringe benefits, accruedfrom the communication date over the remaining period employees are required towork in order to receive severance benefits. Additional charges and purchase accounting adjustments foremployee-related costs are expected during the balance of 2008 as furtherrestructuring plans related to the integration of Andrew operations areimplemented.

 

Leasetermination costs relate to the cost of vacating leased facilities, net ofanticipated sub-rental income. Additional charges and purchase accounting adjustments for leasetermination costs are expected during the balance of 2008 as furtherrestructuring plans related to the integration of Andrew operations areimplemented.

 

As a result of restructuring and consolidationactions, there is unutilized real estate at various facilities in the U.S. andinternationally.  The Company isattempting to sell or lease this unutilized space. As additional restructuringinitiatives are implemented, additional excess property may be identified andimpairment charges, which may be material, may be incurred.

 

**6.****     DERIVATIVES AND HEDGING ACTIVITIES**

 

In December 2007,the Company entered into an interest rate swap agreement to hedge against thevariability of forecasted interest payments attributable to changes in interestrates on a portion of the term loans issued under the new senior secured creditfacilities. Through this swap, the Company fixed the following notional amountsat 4.1275% (before application of the applicable margin): $1.5 billionfrom December 27, 2007 through December 31, 2008; $1.3 billion during2009; $1.0 billion during 2010; and $400 million during 2011. Theinterest rate swap agreement was designated as a cash flow hedge at inceptionand such designation was substantially effective at March 31, 2008 and isexpected to continue to be effective for the duration of the swap agreement.During the three months ended March 31, 2008, additional interest expenseof $1.9 million was recognized as a result of hedge ineffectiveness related tothe interest rate swap.  The fair valueof the interest rate swap, reflected in other noncurrent liabilities, was $53.2million as of March 31, 2008 and $4.5 million as of December 31,2007.

 

As of March 31, 2008and 2007, the Company had a cross currency swap of U.S. dollars for euros witha notional amount of $14 million. A portion of the swap was designated anddocumented as a hedge of the Company’s net investment in its Belgian subsidiaryto reduce the volatility in stockholders’ equity caused by changes in euroexchange rates and the remainder of the swap was designated as a hedge againstfluctuations in the fair value of certain of the Company’s euro-denominatedassets. Pretax losses of $901 and $41 on the portion designated as a fair valuehedge are reflected in the Company’s Condensed Consolidated Statements ofOperations for the three months ended March 31, 2008 and 2007,respectively. The designations of the hedging instrument were effective as of March 31,2008 and 2007, and are expected to continue to be effective for the duration ofthe agreement, resulting in no anticipated hedge ineffectiveness. The fairvalue of the hedging instrument, reflected in other noncurrent liabilities, was$10.4 million and $8.7 million as of March 31, 2008 and December 31,2007, respectively.

 

There were no reclassifications from accumulated othercomprehensive income (loss) to earnings related to derivatives and hedgingactivities during the three months ended March 31, 2008 and 2007.

 

13

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Activity in the accumulated net loss on derivativeinstruments included in accumulated other comprehensive income (loss) consistedof the following:

 
| ** **                                                                      | ** ** | **Three Months  Ended  March 31,** | ** ** |
|---------------------------------------------------------------------------------|------------|----------------------------------------------|------------|
| ** **                                                                      | ** ** | **2008**                                     | ** ** | **2007** | ** ** |
| Accumulated net  loss on derivative instruments, beginning of period            |       | $                                            | (8,849     | ) | $ | (5,201 | ) |
| Loss on cross  currency swap designated as a net investment hedge, net of taxes |       | (567                                         | )          | (102 | ) |
| Loss on interest  rate swap designated as a cash flow hedge, net of taxes       |       | (29,470                                      | )          | — |   |
| Accumulated net  loss on derivative instruments, end of period                  |       | $                                            | (38,886    | ) | $ | (5,303 | ) |

 

During the three months ended March 31, 2008 and 2007,the income tax benefit related to the loss on derivative financial instrumentsreported within other comprehensive income was $17,641 and $60, respectively.

 

**7.****     FAIR VALUE MEASUREMENTS**

 

As of January 1, 2008, the Company implementedSFAS No. 157, which defines fair value, establishes a framework formeasuring fair value as required by other accounting pronouncements and expandsdisclosure requirements.  In February 2008,FASB Staff Position 157-2 was issued which delays the effective date of SFAS No. 157as it applies to non-financial assets and liabilities that are not required tobe measured at fair value on a recurring (at least annual) basis.  As a result of the delay, SFAS No. 157will be applied to non-financial assets and liabilities for fiscal yearsbeginning after November 15, 2008.

 

SFAS No. 157 establishes a three-tier hierarchyfor evaluating fair values based on the inputs utilized to measure the fairvalues as follows:

 

Level1 – Observable inputs such as quoted prices in active markets;

Level 2 – Inputs other than quoted market prices inactive markets that are observable, either directly or indirectly; and

Level 3 – Inputs for which there is little or noobservable market data, which requires the reporting entity to develop its ownassumptions.

 

Forfinancial assets and liabilities measured at fair value as of March 31,2008, the following table provides the quantitative disclosures regarding thefair value.  A market approach, based onprices or other relevant information from market transactions involvingidentical or comparable assets or liabilities was used to determine the fairvalues.

 
| ** **                                                                                     | ** ** | **Fair Value as of  March 31, 2008** | ** ** | **Valuation  Inputs** | ** ** |
|------------------------------------------------------------------------------------------------|------------|---------------------------------------------------------------|------------|-----------------------|------------|
| Cash and cash  equivalents                                                                     |       | $                                                             | 459,251    |                  | Level 1    |   |
| Auction rate  securities (included in other noncurrent assets) (1)                             |       | 4,568                                                         |       | Level 2               |       |
| Interest rate  and cross currency swap liabilities (included in other noncurrent  liabilities) |       | (63,520                                                       | )          | Level 2               |       |
|                                                                                                |            |                                                               |            |                       |            |  |

 

----

(1) Duringthe three months ended March 31, 2008, the Company determined theseauction rate securities (original principal of $5.8 million) were furtherimpaired and that the impairment continued to be other-than-temporary,resulting in a pretax loss of approximately $0.6 million, which is included inother expense.

 

As of January 1, 2008, the Company implementedSFAS No. 159, which gives companies the irrevocable option to carry mostfinancial assets or liabilities at fair value, with changes in fair valuerecorded in earnings.   The Company didnot elect to carry any of its financial assets or liabilities at fair valueunder the provisions of SFAS No. 159.

 

14

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**8.****     EMPLOYEE BENEFIT PLANS**

 
| ** **                             | ** ** | **Pension Benefits**                        | ** ** | **Other Postretirement  Benefits** | ** ** |
|----------------------------------------|------------|--------------------------------------------------|------------|-----------------------------------------|------------|
| ** **                             | ** ** | **Three Months Ended  March 31,** | ** ** |
| ** **                             | ** ** | **2008**                                         | ** ** | **2007**                                | ** ** | **2008** | ** ** | **2007** | ** ** |
| Service cost                           |       | $                                                | 861        |                                    | $          | 778 |   | $ | 842 |   | $ | 1,039 |   |
| Interest cost                          |       | 3,612                                            |       | 1,801                                   |       | 1,509 |   | 1,319 |   |
| Recognized  actuarial (gain) loss      |       | —                                           |       | —                                  |       | (124 | ) | 26 |   |
| Amortization of  prior service credits |       | (193                                             | )          | (193                                    | )          | (21 | ) | (22 | ) |
| Amortization of  transition obligation |       | 12                                               |       | 11                                      |       | — |   | — |   |
| Expected return  on plan assets        |       | (4,100                                           | )          | (2,191                                  | )          | (126 | ) | (118 | ) |
| Net periodic  benefit cost             |       | $                                                | 192        |                                    | $          | 206 |   | $ | 2,080 |   | $ | 2,244 |   |

 

TheCompany contributed $10.2 million to its pension plans during the three monthsended March 31, 2008 and anticipates making additional contributions of upto $1.5 million to these plans during 2008. The Company contributed $1.2million to its other postretirement benefit plans during the three months endedMarch 31, 2008 and anticipates making additional contributions ofapproximately $3.5 million to these plans during 2008.

 

**9.     EQUITY-BASED COMPENSATION PLANS**

** **

As of March 31,2008, $47.0 million of total unrecognized compensation costs related tonon-vested awards are expected to be recognized over a weighted average periodof 1.8 years. There were no significant capitalized equity-based compensationcosts at March 31, 2008.

 

**Stock Options**

 

The following tablesummarizes the stock option activity for the three months ended March 31,2008 (in thousands, except per share data):

 
| ** **                                                  | ** ** | **Shares** | ** ** | **Weighted  Average Option  Exercise Price  Per Share** | ** ** | **Weighted Average  Grant Date  Fair Value  Per Share** | ** ** | **Aggregate  Intrinsic  Value** | ** ** |
|-------------------------------------------------------------|------------|------------|------------|------------------------------------------------------------------------|------------|-----------------------------------------------------------------------------|------------|---------------------------------|------------|
| Outstanding and  expected to vest at December 31, 2007 |       | 3,585      |       | $                                                                      | 28.45      |                                                                        |       |                            |       |   |
| Granted                                                     |       | 278        |       | $                                                                      | 41.22      |                                                                        | $          | 20.85                           |       |   |   |
| Exercised                                                   |       | (56        | )          | $                                                                      | 18.43      |                                                                        |       |                            |       |   |
| Expired or  forfeited                                       |       | (207       | )          | $                                                                      | 59.34      |                                                                        | $          | 3.01                            |       |   |   |
| Outstanding and  expected to vest at March 31, 2008    |       | 3,600      |       | $                                                                      | 27.82      |                                                                        |       |                            | $          | 43,529 |   |
| Exercisable at  March 31, 2008                         |       | 3,107      |       | $                                                                      | 26.57      |                                                                        |       |                            | $          | 41,829 |   |

 

The total intrinsicvalue of options exercised during the three months ended March 31, 2008and 2007 was $1.3 million and $25.5 million, respectively. All of thenon-vested options at March 31, 2008 are expected to vest as they areprimarily held by senior management and directors.

 

The exercise prices ofoutstanding options at March 31, 2008 were in the following ranges:

 
| ** **                              | ** ** | **Options Outstanding**    | ** ** | **Options Exercisable**                                             | ** ** |
|-----------------------------------------|------------|---------------------------------|------------|--------------------------------------------------------------------------|------------|
| **Range of Exercise  Prices** | ** ** | **Shares  (in thousands)** | ** ** | **Weighted  Average  Remaining  Contractual Life  (in years)** | ** ** | **Weighted  Average  Exercise Price  Per Share** | ** ** | **Shares  (in thousands)** | ** ** | **Weighted  Average  Exercise Price  Per Share** | ** ** |
| $7.43 to $16.50                         |       | 1,248                           |       | 4.8                                                                      |       | $ | 13.07 |   | 1,235 |   | $ | 13.05 |   |
| 16.51 to 24.00                          |       | 952                             |       | 5.4                                                                      |       | $ | 18.53 |   | 888 |   | $ | 18.44 |   |
| 24.01 to 49.21                          |       | 944                             |       | 6.1                                                                      |       | $ | 38.26 |   | 528 |   | $ | 37.91 |   |
| 49.22 to 90.16                          |       | 456                             |       | 2.1                                                                      |       | $ | 65.91 |   | 456 |   | $ | 65.91 |   |
| $7.43 to $90.16                         |       | 3,600                           |       | 5.0                                                                      |       | $ | 27.82 |   | 3,107 |   | $ | 26.57 |   |

 

15

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The Company uses the Black-Scholes model to estimatethe fair value of stock option awards. Key input assumptions used in the modelto estimate the fair value of stock options include the grant price of theaward, the expected option term, volatility of the Company’s stock, therisk-free rate and the Company’s projected dividend yield. The Company believesthat the valuation technique and the approach utilized to develop theunderlying assumptions are appropriate in estimating the fair values ofCommScope stock options. Estimates of fair value are not intended to predictactual future events or the value ultimately realized by employees who receiveequity awards, and subsequent events are not indicative of the reasonablenessof the original estimates of fair value made by the Company.  The following table presents the weightedaverage assumptions used to estimate the fair value of stock option awardsgranted during the three months ended March 31, 2008.  No stock option awards were granted in thethree months ended March 31, 2007.

 
| ** **                                 | ** ** | **Three Months Ended  March 31, 2008** | ** ** |
|--------------------------------------------|------------|------------------------------------------------------------|------------|
| Expected option  term (in years)           |       | 7.0                                                        |       |
| Risk-free  interest rate                   |       | 3.0                                                        | %          |
| Expected  volatility                       |       | 45                                                         | %          |
| Expected  dividend yield                   |       | 0                                                          | %          |
| Weighted-average  fair value at grant date |       | $                                                          | 20.85      |   |
|                                            |            |                                                            |            |  |

 

**Performance Share Units**

 

The following tablesummarizes the performance share unit activity for the three months ended March 31,2008 (in thousands, except per share data):

 
| ** **                                            | ** ** | **Units** | ** ** | **Weighted Average Grant  Date Fair Value  Per Share** | ** ** |
|-------------------------------------------------------|------------|-----------|------------|---------------------------------------------------------------------------------|------------|
| Outstanding and  non-vested at December 31, 2007 |       | 514       |       | $                                                                               | 24.29      |   |
| Granted                                               |       | 329       |       | $                                                                               | 41.22      |   |
| Forfeited                                             |       | (3        | )          | $                                                                               | 41.22      |   |
| Outstanding and  non-vested at March 31, 2008    |       | 840       |       | $                                                                               | 30.86      |   |

 

**Restricted Stock Units**

 

The following tablesummarizes the restricted stock unit activity for the three months ended March 31,2008 (in thousands, except per share data):

 
| ** **                                            | ** ** | **Units** | ** ** | **Weighted Average Grant  Date Fair Value  Per Share** | ** ** |
|-------------------------------------------------------|------------|-----------|------------|---------------------------------------------------------------------------------|------------|
| Outstanding and  non-vested at December 31, 2007 |       | 495       |       | $                                                                               | 25.43      |   |
| Granted                                               |       | 467       |       | $                                                                               | 41.21      |   |
| Forfeited                                             |       | (8        | )          | $                                                                               | 33.75      |   |
| Outstanding and  non-vested at March 31, 2008    |       | 954       |       | $                                                                               | 33.09      |   |

 

**10.****  SEGMENTS**

 

As a result of theacquisition of Andrew, management reorganized its internal reporting structure,which consequently affects the Company’s reportable segments.  The Company’s four reportable segments, whichalign with the manner in which the business is managed, are as follows:Antenna, Cable and Cabinets Group (ACCG); Enterprise; Broadband; and WirelessNetwork Solutions (WNS).

 

The ACCG segmentincludes product offerings of primarily passive transmission devices for thewireless infrastructure market including base station antennas, coaxial cableand connectors and microwave antennas as well as secure environmentalenclosures for electronic devices and equipment used by wireline and wirelessproviders.  The ACCG segment is largelycomposed of product lines that were part of legacy Andrew.

 

16

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The Enterprise segmentconsists mainly of structured cabling systems for business enterpriseapplications and connectivity solutions for wired and wireless networks withinorganizations. The segment also includes coaxial cable for various video anddata applications that are not related to cable television.

 

The Broadband segmentconsists mainly of coaxial cable, fiber optic cable and conduit for cabletelevision system operators. These products support multi-channel video, voiceand high-speed data services for residential and commercial customers usingHybrid Fiber Coaxial architecture.

 

The WNS segment includesa variety of active electronic devices and services including power amplifiers,filters and tower mounted amplifiers, geolocation products, networkoptimization analysis systems, and engineering and consulting services as wellas products that are used to extend and enhance the coverage of wireless networksin areas where signals are difficult to send or receive such as tunnels,subways, airports and commercial buildings. The WNS segment is entirely composed of product lines that were part oflegacy Andrew.

 

The following tablesprovide summary financial information by segment as of March 31, 2008 and December 31,2007 and for the three months ended March 31, 2008 and 2007 (in millions):

 
| ** **                                 | ** ** | **As of  March 31,  2008** | ** ** | **As of  December 31,  2007** | ** ** |
|--------------------------------------------|------------|--------------------------------------|------------|-----------------------------------------|------------|
| Identifiable  segment-related assets:      |       |                                 |       |                                    |       |
| ACCG                                       |       | $                                    | 2,496.5    |                                    | $          | 2,560.0 |   |
| Enterprise                                 |       | 372.1                                |       | 352.6                                   |       |
| Broadband                                  |       | 397.2                                |       | 389.3                                   |       |
| WNS                                        |       | 1,033.4                              |       | 1,048.7                                 |       |
| Total  identifiable segment-related assets |       | 4,299.2                              |       | 4,350.6                                 |       |
|                                       |       |                                 |       |                                    |       |
| Reconciliation  to total assets:           |       |                                 |       |                                    |       |
| Cash and cash  equivalents                 |       | 459.3                                |       | 649.5                                   |       |
| Deferred income  taxes                     |       | 148.9                                |       | 106.5                                   |       |
| Total assets                               |       | $                                    | 4,907.4    |                                    | $          | 5,106.6 |   |

 
| ** **                     | ** ** | **Three Months Ended  March 31,** | ** ** |
|--------------------------------|------------|--------------------------------------------------|------------|
| ** **                     | ** ** | **2008**                                         | ** ** | **2007** | ** ** |
| Net sales:                     |       |                                             |       |   |   |
| ACCG                           |       | $                                                | 479.0      |   | $ | 87.1 |   |
| Enterprise                     |       | 211.5                                            |       | 200.9 |   |
| Broadband                      |       | 135.5                                            |       | 148.1 |   |
| WNS                            |       | 180.6                                            |       | — |   |
| Inter-segment  eliminations    |       | (1.5                                             | )          | (0.6 | ) |
| Consolidated net  sales        |       | $                                                | 1,005.1    |   | $ | 435.5 |   |
|                           |       |                                             |       |   |   |
| Operating income  (loss):      |       |                                             |       |   |   |
| ACCG                           |       | $                                                | 20.4       |   | $ | 12.6 |   |
| Enterprise                     |       | 36.0                                             |       | 29.5 |   |
| Broadband                      |       | 3.3                                              |       | 21.6 |   |
| WNS                            |       | (31.9                                            | )          | — |   |
| Consolidated  operating income |       | $                                                | 27.8       |   | $ | 63.7 |   |

 

17

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**11.****  SUPPLEMENTAL CASH FLOW INFORMATION**

 
| ** **                                                    | ** ** | **Three Months Ended  March 31,** | ** ** |
|---------------------------------------------------------------|------------|--------------------------------------------------|------------|
| ** **                                                    | ** ** | **2008**                                         | ** ** | **2007** | ** ** |
| Cash paid during  the period for:                             |       |                                             |       |   |   |
| Income taxes                                                  |       | $                                                | 12,153     |   | $ | 1,081 |   |
| Interest                                                      |       | 39,772                                           |       | 2,047 |   |
|                                                          |       |                                             |       |   |   |
| Non-cash  investing and financing activities:                 |       |                                             |       |   |   |
| Conversion of  senior subordinated debentures to common stock |       | $                                                | 76,607     |   | $ | — |   |
| Assets acquired  under capital lease                          |       | 4,530                                            |       | — |   |

 

**ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OFFINANCIAL CONDITION AND RESULTS OF   OPERATIONS**

 

The following discussion and analysis of our financialcondition and results of operations for the three months ended March 31,2008 and 2007 is provided to increase the understanding of, and should be readin conjunction with, the unaudited condensed consolidated financial statementsand accompanying notes included in this document as well as the auditedconsolidated financial statements, related notes thereto and management’sdiscussion and analysis of financial condition and results of operations,including management’s discussion and analysis about the application ofcritical accounting policies included in our 2007 Annual Report on Form 10-K.

 

**Overview**

 

### CommScope, Inc. is a worldleader in infrastructure solutions for communications networks. With theacquisition of Andrew Corporation (Andrew), we are a global leader in providingradio frequency subsystem solutions for wireless networks. Through our SYSTIMAX® and Uniprise® brands, we are also a global leader instructured cabling systems for business enterprise applications. In addition,we are the premier manufacturer of coaxial cable for broadband cable televisionnetworks and one of the leading North American providers of environmentallysecure cabinets for digital subscriber line (DSL) and Fiber-to-the-Node (FTTN)applications.

###  

As a result of the acquisition of Andrew, managementreorganized its internal reporting structure and revised our reportablesegments.  Our four reportable segments,which align with the manner in which the business is managed, are as follows:Antenna, Cable and Cabinets Group (ACCG); Enterprise; Broadband; and WirelessNetwork Solutions (WNS).

 

### **CRITICAL ACCOUNTING POLICIES**

###  

There have been no changes in our critical accountingpolicies or significant accounting estimates as disclosed in our 2007 AnnualReport on Form 10-K other than the implementation of SFAS No. 157, “FairValue Measurements” and SFAS No. 159, “The Fair Value Option for FinancialAssets and Financial Liabilities.”  SeeNote 7 to the Condensed Consolidated Financial Statements included elsewhere inthis Form 10-Q.

 

### **COMPARISON OF RESULTS OF OPERATIONS FOR THETHREE MONTHS ENDED MARCH 31, 2008 WITH THE THREE MONTHS ENDED MARCH 31,2007**

 
| ** **                                   | ** ** | **Three Months Ended March 31,**                              | ** ** | ** **                    | ** ** | ** ** | ** ** |
|----------------------------------------------|------------|-----------------------------------------------------------------------------------|------------|-------------------------------|------------|------------|------------|
| ** **                                   | ** ** | **2008**                                                                          | ** ** | **2007**                      | ** ** | ** ** | ** ** | ** ** | ** ** |
| ** **                                   | ** ** | **Amount**                                                                        | ** ** | **% of Net  Sales** | ** ** | **Amount** | ** ** | **% of Net  Sales** | ** ** | **Dollar  Change** | ** ** | **%  Change** | ** ** |
| ** **                                   | ** ** | **(dollars in millions, except per share amounts)** | ** ** |
| Net sales                                    |       | $                                                                                 | 1,005.1    |                          | 100.0      | %          | $          | 435.5 |   | 100.0 | % | $ | 569.6 |   | 130.8 | % |
| Gross profit                                 |       | 216.4                                                                             |       | 21.5                          |       | 131.9      |       | 30.3 |   | 84.5 |   | 64.0 |   |
| SG&A expense                             |       | 128.0                                                                             |       | 12.7                          |       | 58.6       |       | 13.5 |   | 69.4 |   | 118.3 |   |
| R&D expense                              |       | 36.0                                                                              |       | 3.6                           |       | 7.9        |       | 1.8 |   | 28.1 |   | 357.0 |   |
| Amortization of  purchased intangible assets |       | 24.6                                                                              |       | 2.4                           |       | 1.0        |       | 0.2 |   | 23.6 |   | 2,360.0 |   |
| Restructuring  costs                         |       | 0.1                                                                               |       | 0.0                           |       | 0.7        |       | 0.2 |   | (0.6 | ) | (81.9 | ) |
| Net income  (loss)                           |       | (11.0                                                                             | )          | (1.1                          | )          | 45.9       |       | 10.5 |   | (56.9 | ) | (124.1 | ) |
| Earnings (loss)  per diluted share           |       | (0.16                                                                             | )          |                          |       | 0.63       |       |   |   |   |   |   |   |
|                                              |            |                                                                                   |            |                               |            |            |            |  |  |  |  |  |  |  |  |  |

 

18

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**Netsales**

 

The increase in net sales for the first quarter of 2008over the first quarter of 2007 is attributable to the acquisition of  Andrew on December 27, 2007.  Net sales for Andrew during this period were$568.8 million, which included $11.3 million for the four day period from December 28,2007 through December 31, 2007 and are included in the ACCG and WNSsegments.  For further details bysegment, see the section titled “Segment Results” below.

 

### **Gross profit (net sales less cost of sales)**

###  

The year-over-year increase in gross profit of $84.5million is attributable to the acquisition of Andrew.  Gross profit for the three months ended March 31,2008 has been adversely affected by $52.8 million of purchase accountingadjustments, primarily related to the effect on first quarter cost of sales ofthe step-up of the acquired inventory to its estimated fair value less thecosts to sell the inventory and $3.1 million related to amortization expenseincluded in cost of sales related to certain intangible assets acquired in theAndrew acquisition.

 

Our gross profit margin for the three months ended March 31,2008 was 21.5% compared to 30.3% for the comparable prior year period.  The gross profit margin excluding the impactof the purchase accounting adjustments and amortization expense discussed aboveis 27.1%.  This adjusted gross profitmargin is lower than the prior period reflecting that legacy Andrew’shistorical gross profit margins were lower than those of CommScope.

 

In response to increased raw material costs, we haveannounced price increases for certain cable products with the ACCG, Enterpriseand Broadband segments.  These priceincreases are expected to provide limited benefit to gross profit in the secondquarter, but more significant benefits in the second half of the year.

 

We expect continued volatility in the costs of certainraw materials, particularly copper, aluminum, plastics and other polymers. Ifraw material costs continue to increase and we delay implementing priceincreases or are unable to achieve market acceptance of announced or futureprice increases, gross profit may be adversely affected.  Price reductions in response to a significantdecline in raw material costs may also have an adverse impact on gross profit.

 

### **Selling, general and administrative expense**

###  

The year-over-year increase in selling, general andadministrative expense (SG&A) of $69.4 million was primarily due to theacquisition of Andrew.  As a result ofthe acquisition, we incurred $2.9 million in acquisition and integrationrelated costs during the three months ended March 31, 2008 that areincluded in SG&A.  The decrease inSG&A expense as a percentage of sales can be primarily attributed to theincreased level of net sales.

 

### **Research and development**

###  

Research and development (R&D) expense increasedby $28.1 million year over year primarily as a result of the Andrewacquisition. R&D expense as a percentage of net sales increased to 3.6% forthe three months ended March 31, 2008 compared to 1.8% for the threemonths ended March 31, 2007. This year-over-year increase in R&Dexpense as a percentage of net sales reflects the higher level of R&Dspending required to support the Andrew products, particularly those in the WNSsegment.  R&D activities generallyrelate to ensuring that our products are capable of meeting the developing technologicalneeds of our customers, bringing new products to market and modifying existingproducts to better serve our customers.

 

### **Amortization of purchased intangibles**

###  

As a result of the Andrewacquisition, we recognized approximately $970 million of identifiableintangible assets, which increased our total amortization expense by $26.4million to $28.5 million for the three months ended March 31, 2008.  Of the total amortization expense for thefirst quarter of 2008, $3.9 million relates to patents and technologies and isincluded in cost of sales.  In thecomparable prior year period, $1.0 million of amortization expense was includedin cost of sales.

 

19

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**RestructuringCosts**

 

Werecognized pretax restructuring costs of $0.1 million in the first quarter of2008. These costs resulted from a $0.4 million charge related to initialrestructuring actions as further actions are considered at one of legacyCommScope’s European manufacturing facilities. This was partially offset by a $0.3 million gain realized on the sale ofa parcel of real estate in Omaha that had been written down in a previousrestructuring.  The restructuring costsincurred during the three months ended March 31, 2007 resulted from thecontinued implementation of the global manufacturing initiatives announcedduring the third quarter of 2005.  Duringthe first quarter of 2008, we also added $2.5 million to the liability forrestructuring activities as an adjustment to the preliminary allocation of theAndrew purchase price.

 

Weanticipate that there will be additional restructuring charges recognized andadditions to the liability for restructuring activities through furtheradjustments to the allocation of the Andrew purchase price during 2008.  We have announced the planned closing of alegacy CommScope manufacturing facility in Brazil which is expected to resultin restructuring charges during the second and third quarters of 2008.  The level of such charges has not beendetermined.  Additional restructuringinitiatives related to the Andrew integration are expected and the resultingcharges or additions to the liability for restructuring activities asadjustments to the preliminary allocation of the Andrew purchase price could bematerial.

 

As aresult of restructuring and consolidation actions, there is unutilized realestate at various facilities in the U.S. and internationally.  We are attempting to sell or lease thisunutilized space. As additional restructuring initiatives are implemented,additional excess real estate or equipment may be identified and impairmentcharges, which may be material, may be incurred.

 

### **Net interest income (expense)**

###  

We incurred net interestexpense of $34.4 million during the three months ended March 31, 2008compared to recognizing net interest income of $2.6 million for the threemonths ended March 31, 2007.  Thischange is the result of the significant borrowings undertaken and the cash,cash equivalents and short-term investments that were utilized to finance theAndrew acquisition.  Our weighted averageeffective interest rate on outstanding borrowings, including the interest rateswap and amortization of long-term financing costs, was 6.08% as of March 31,2008 compared to 6.23% as of December 31, 2007.

 

Interest expense for thethree months ended March 31, 2008 includes a $1.9 million charge relatedto ineffectiveness on the interest rate swap entered into to fix the interestrate on a portion of the debt incurred to finance the Andrew acquisition.  No material amount of additionalineffectiveness is expected over the remainder of the term of the interest rateswap.

 

### **Income taxes**

###  

Our effective income tax rate was 17.4% for the threemonths ended March 31, 2008 compared to 31.0% for the three months ended March 31,2007. The tax provision for the three months ended March 31, 2008 reflectsthe impact of purchase accounting adjustments, primarily related to theincreased costs of sales as a result of the step-up of inventory to itsestimated fair value.  The effective rateexcluding these purchase accounting items was 35.6%. Our effective tax ratereflects the benefits derived from significant operations outside the U.S., whichare generally taxed at rates lower than the U.S. statutory rate of 35%, offsetby U.S. state income taxes and valuation allowances for losses in certainforeign jurisdictions for which we cannot record tax benefits.  The effective tax rate (excluding purchaseaccounting) increased from the comparable prior year period due to theexpiration of the U.S. research and development tax credit, tax rate increasesenacted in China and an unfavorable shift in the geographic mix of earnings.

 

# **Segment Results**

 

The pro forma information provided below is intendedto show how CommScope’s results might have looked if the acquisition of Andrewhad occurred as of January 1, 2007. The Andrew amounts included in this pro forma information are based onAndrew’s actual results and, therefore, may not be indicative of the actualresults when operated as part of CommScope. No pro forma adjustments have been made other than combining CommScope’shistorical results with those of 

 

20

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Andrew.  The pro forma financial information shouldnot be relied upon as being indicative of the historical results that wouldhave been realized had the acquisition occurred as of the date indicated orthat may be achieved in the future.

 
| ** **                           | ** ** | **Actual**                       | ** ** | **Pro Forma**          | ** ** |
|--------------------------------------|------------|----------------------------------|------------|-----------------------------|------------|
| ** **                           | ** ** | ** **                       | ** ** | **Three months ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| ** **                           | ** ** | **Three months ended** | ** ** | **ended**                   | ** ** | ** ** | ** ** | ** ** | ** ** |
| ** **                           | ** ** | **March 31,**               | ** ** | **March 31,**          | ** ** | ** ** | ** ** | ** ** | ** ** |
| ** **                           | ** ** | **2008**                         | ** ** | **2007**                    | ** ** | **2007** | ** ** | ** ** | ** ** | ** ** | ** ** |
| ** **                           | ** ** | ** **                       | ** ** | **% of Net**      | ** ** | ** ** | ** ** | **% of Net** | ** ** | ** ** | ** ** | **% of Net** | ** ** | **Dollar** | ** ** | ** ** | ** ** |
| ** **                           | ** ** | **Amount**                       | ** ** | **Sales**                   | ** ** | **Amount** | ** ** | **Sales** | ** ** | **Amount** | ** ** | **Sales** | ** ** | **Change** | ** ** | **% Change** | ** ** |
| ** **                           | ** ** | **(dollars in millions)**        | ** ** |
| Net sales by  segment:               |       |                             |       |                        |       |   |   |   |   |   |   |   |   |   |   |   |   |
| ACCG                                 |       | $                                | 479.0      |                        | 47.7       | % | $ | 87.1 |   | 20.0 | % | $ | 401.2 |   | 42.8 | % | $ | 77.8 |   | 19.4 | % |
| Enterprise                           |       | 211.5                            |       | 21.0                        | %          | 200.9 |   | 46.1 | % | 200.9 |   | 21.4 | % | 10.6 |   | 5.3 | % |
| Broadband                            |       | 135.5                            |       | 13.5                        | %          | 148.1 |   | 34.0 | % | 148.1 |   | 15.8 | % | (12.6 | ) | (8.5 | )% |
| WNS                                  |       | 180.6                            |       | 18.0                        | %          | — |   | 0.0 | % | 188.6 |   | 20.1 | % | (8.0 | ) | (4.3 | )% |
| Inter-segment  eliminations          |       | (1.5                             | )          | (0.2                        | )%         | (0.6 | ) | (0.1 | )% | (0.6 | ) | (0.1 | )% | (0.9 | ) | NM |   |
| Consolidated net  sales              |       | $                                | 1,005.1    |                        | 100.0      | % | $ | 435.5 |   | 100.0 | % | $ | 938.2 |   | 100.0 | % | $ | 66.9 |   | 7.1 | % |
|                                 |       |                             |       |                        |       |   |   |   |   |   |   |   |   |   |   |   |   |
| Total domestic  sales                |       | $                                | 504.4      |                        | 50.2       | % | $ | 299.2 |   | 68.7 | % | $ | 488.7 |   | 52.1 | % | $ | 15.7 |   | 3.2 | % |
| Total  international sales           |       | 500.7                            |       | 49.8                        | %          | 136.3 |   | 31.3 | % | 449.5 |   | 47.9 | % | 51.2 |   | 11.4 | % |
| Total worldwide  sales               |       | $                                | 1,005.1    |                        | 100.0      | % | $ | 435.5 |   | 100.0 | % | $ | 938.2 |   | 100.0 | % | $ | 66.9 |   | 7.1 | % |
|                                 |       |                             |       |                        |       |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating income  (loss) by segment: |       |                             |       |                        |       |   |   |   |   |   |   |   |   |   |   |   |   |
| ACCG                                 |       | $                                | 20.4       |                        | 4.3        | % | $ | 12.6 |   | 14.5 | % | $ | 37.8 |   | 9.4 | % | $ | (17.4 | ) | (46.0 | )% |
| Enterprise                           |       | 36.0                             |       | 17.0                        | %          | 29.5 |   | 14.7 | % | 29.5 |   | 14.7 | % | 6.5 |   | 22.0 | % |
| Broadband                            |       | 3.3                              |       | 2.5                         | %          | 21.6 |   | 14.6 | % | 21.6 |   | 14.6 | % | (18.3 | ) | (84.7 | )% |
| WNS                                  |       | (31.9                            | )          | (17.7                       | )%         | — |   | 0.0 | % | (16.4 | ) | (8.7 | )% | (15.5 | ) | NM |   |
| Consolidated  operating income       |       | $                                | 27.8       |                        | 2.8        | % | $ | 63.7 |   | 14.6 | % | $ | 72.5 |   | 7.7 | % | $ | (44.7 | ) | (61.7 | )% |

 

*Antenna,Cable and Cabinets Group Segment*

 

The ACCG segment includesproduct offerings of primarily passive transmission devices for the wirelessinfrastructure market including base station antennas, coaxial cable andconnectors, and microwave antennas and secure environmental enclosures forelectronic devices and equipment used by wireline and wireless telecommunicationsproviders.

 

Higher international anddomestic sales of most product lines as well as the positive impact of foreignexchange rate changes drove the increase in ACCG segment net sales for thefirst quarter of 2008 as compared to the pro forma net sales for the comparable2007 period.  The ACCG segmentexperienced strong international growth in the Asia Pacific region.

 

In response to increasesin raw material costs, price increases have been announced for certain ACCGcable products, the impact of which should begin to be realized in the secondquarter.

 

We expect demand for ourACCG products to be affected by wireless capacity expansion in emerging marketsand growth in mobile data services in developed markets.

 

Operating income for theACCG segment for the first quarter of 2008 includes the negative impact of$31.4 million from the step-up of inventory to its estimated fair value as aresult of the acquisition of Andrew and approximately $16.5 million ofincremental intangible asset amortization expense resulting from thepreliminary purchase price allocation from the Andrew acquisition. Theseincreased costs were somewhat offset by the benefits of higher sales volume inthe quarter.

 

The impact on operatingincome from the step-up of the acquired inventory to its estimated fair valueis expected to be substantially less in the remainder of 2008 than it was inthe first quarter.

 

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*EnterpriseSegment*

 

The Enterprise segmentconsists mainly of structured cabling systems for business enterpriseapplications and connectivity solutions for wired and wireless networks withinorganizations. The segment also includes coaxial cable for various video anddata applications that are not related to cable television.

 

The increasein Enterprise segment net sales was primarily driven by higher internationalsales volume with all major regions generating higher sales.  Domestic net sales were essentially unchangedfrom the prior year.  In response tohigher raw material costs, price increases that are expected to begin to berealized during the second half of the year have been announced for severalmajor product groups.

 

Weexpect demand for Enterprise products to be driven by the ongoing need forbandwidth and high-performance structured cabling in the enterprise market andaffected by global information technology spending.

 

Theimprovement in Enterprise segment operating income is primarily attributable tochanges in product mix towards products that generate higher margins and thecontinued impact of cost reductions resulting from the global manufacturinginitiatives.  Operating income wassomewhat adversely affected by increased raw material costs during the firstquarter of 2008. Operating income was favorably affected by a $0.8 milliondecrease in restructuring costs for the three months ended March 31, 2008compared to the three months ended March 31, 2007.

 

*BroadbandSegment*

 

TheBroadband segment primarily consists of coaxial cable, fiber optic cable andconduit for cable television system operators. These products supportmulti-channel video, voice and high-speed data services for residential andcommercial customers using Hybrid Fiber Coaxial architecture.

 

Thedecrease in net sales of Broadband products primarily resulted from reducedsales volume to domestic cable system operators.  The slowdown in purchasing by these customersis largely attributable to the deterioration in general economic conditions,particularly the residential housing market. Net international sales increased slightly, reflecting continuedspending on new projects and system maintenance.  Net sales for the three months ended March 31,2008 includes $5.5 million related to the Signal Vision product line that wasacquired in May 2007.

 

Thereduction in Broadband segment operating income largely reflects the impact ofhigher raw material prices, lower production volume due to the decline indomestic sales and charges related to a product warranty matter.  Operating income is expected to improve duringthe balance of 2008 as a result of higher projected sales volume, priceincreases that have been announced and are being implemented during the secondquarter and cost reduction efforts. Further increases in raw material costs, acontinued slowdown in purchasing by cable system operators and further chargesfor the warranty matter may limit the improvement in operating income.

 

*WirelessNetwork Solutions Segment*

 

The WNS segmentincludes a variety of active electronic devices and services including poweramplifiers, filters and tower mounted amplifiers, geolocation products, networkoptimization analysis systems, and engineering and consulting services as wellas products that are used to extend and enhance the coverage of wirelessnetworks in areas where signals are difficult to send or receive, such astunnels, subways, airports and commercial buildings.

 

WNS segment netsales decreased in the first quarter of 2008 compared to the comparable 2007quarter primarily due to the divestiture of the Satellite Communications(SatCom) product line on January 31, 2008. SatCom sales in the first quarter of 2008 and 2007 were $8.6 million and$30.7 million, respectively.  Excludingthe impact of SatCom, WNS segment net sales increased 8.9% in the first quarterof 2008 as compared to the first quarter of 2007, primarily due to increasedsales of filters and power amplifiers as well as the benefit of foreignexchange rate changes. These improvements were partially offset by decreasedgeolocation sales due to the completion of a large Middle East geolocationproject in the March 2007 quarter.

 

WNS operating income forthe first quarter of 2008 included the negative impact of $21.4 million fromthe step-up of inventory to its estimated fair value as a result of the acquisitionof Andrew, $4.5 million of incremental intangible 

 

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amortization from the Andrew acquisition preliminary purchase priceallocation, and lower geolocation operating income compared to the first quarterof 2007 due to a major project that was completed during the first quarter of2007.  Operating income from filterproducts benefited from improved product mix, higher volume, cost reductionsand a rationalized product portfolio. WNS operating income was also favorably affected by reduced SatComlosses as a result of the sale of the SatCom product line in January of2008.

 

The impact on operatingincome from the step-up of the acquired inventory to its estimated fair valueis expected to be substantially less in the remainder of 2008 than it was inthe first quarter.

 

### **LIQUIDITY AND CAPITAL RESOURCES**

###  

Thefollowing table summarizes certain key measures of our liquidity and capital resources.

 
| ** **                                                                                  | ** ** | **As of**           | ** ** | ** **                  | ** ** | ** **         | ** ** |
|---------------------------------------------------------------------------------------------|------------|--------------------------|------------|-----------------------------|------------|--------------------|------------|
| ** **                                                                                  | ** ** | **March 31,  2008** | ** ** | **December 31,  2007** | ** ** | **Dollar  Change** | ** ** | **%  Change** | ** ** |
|                                                                                        |       |                     |       |                        |       |               |       |   |   |
| Cash and cash  equivalents                                                                  |       | $                        | 459.3      |                        | $          | 649.5              |       | $ | (190.2 | ) | (29.3 | )% |
| Working capital,  excluding cash and cash equivalents and current portion of long-term debt |       | 859.0                    |       | 831.4                       |       | 27.6               |       | 3.3 |   |
| Long-term debt,  including current portion                                                  |       | 2,305.3                  |       | 2,595.8                     |       | (290.5             | )          | (11.2 | ) |
| Total  capitalization (1)                                                                   |       | 3,657.6                  |       | 3,875.8                     |       | (218.2             | )          | (5.6 | ) |
| Long-term debt  as a percentage of total capitalization                                     |       | 63.0                     | %          | 67.0                        | %          |               |       |   |   |
|                                                                                             |            |                          |            |                             |            |                    |            |  |  |  |  |  |

 

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(1)  Totalcapitalization includes long-term debt, including the current portion, andstockholders’ equity.

 

Ourprincipal sources of liquidity, both on a short-term and long-term basis, arecash and cash equivalents, short-term investments, cash flows provided byoperations and availability under credit facilities. The primary uses ofliquidity include funding working capital requirements (primarily inventory andaccounts receivable, net of accounts payable and other accrued liabilities),debt service requirements, capital expenditures, payment of certainrestructuring costs and funding of pension and other postretirementobligations.

 

Thedecrease in cash and cash equivalents during the quarter ended March 31,2008 was primarily driven by $207.5 million disbursed in conjunction withexchanging substantially all of the 3.25% convertible debentures assumed in theAndrew acquisition into merger consideration and the payment of $56.2 million aspart of the merger consideration paid to former Andrew shareholders as theirAndrew shares were presented.  Thesedecreases were partially offset by $80.2 million in net cash flow fromoperations.

 

Thedecrease in long-term debt was primarily the result of the exchange ofsubstantially all of the 3.25% convertible debentures for merger consideration andthe negotiated conversion of a portion of the 1% convertible debentures intoshares of our common stock.  The declinein total capitalization was primarily driven by the cash portion of the mergerconsideration that was exchanged for the 3.25% convertible debentures. Thereduction in long-term debt as a percentage of total capitalization resultedprimarily from the reduction of debt.

 

**CashFlow Overview**

 
| ** **                                           | ** ** | **Three months ended** | ** ** | ** ** | ** ** | ** ** | ** ** |
|------------------------------------------------------|------------|----------------------------------|------------|------------|------------|------------|------------|
| ** **                                           | ** ** | **March 31,**               | ** ** | **Dollar** | ** ** | **%**      | ** ** |
| ** **                                           | ** ** | **2008**                         | ** ** | **2007**   | ** ** | **Change** | ** ** | **Change** | ** ** |
|                                                 |       |                             |       |       |       |       |       |   |   |
| Net cash  provided by operating activities           |       | $                                | 80.2       |       | $          | 10.7       |       | $ | 69.5 |   | 649.5 | % |
| Net cash used in  investing activities               |       | (59.5                            | )          | (15.2      | )          | (44.3      | )          | 291.1 |   |
| Net cash  provided by (used in) financing activities |       | (220.2                           | )          | 24.9       |       | (245.1     | )          | NM |   |
|                                                      |            |                                  |            |            |            |            |            |  |  |  |  |  |

 

*Operating Activities*

 

Duringthe three months ended March 31, 2008, operating activities provided $80.2million in cash compared to $10.7 million during the three months ended March 31,2007. During the three months ended March 31, 2008, a net loss of $11.0million was offset by depreciation and amortization of $56.7 million,reductions in net accounts receivable of $46.3 million and a reduction in netinventory of $42.0. These items were somewhat offset by a reduction in accountspayable and other liabilities that included payments under annual bonus plansand payments of restructuring costs that had been accrued as part of the Andrewpreliminary purchase price allocation.

 

Weexpect to continue to generate net cash from operations during 2008, primarilydue to improved operating 

 

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income from higher sales, including the Andrew business, the impact ofour cost reduction efforts and the reduction in the level of working capitalexcluding cash and cash equivalents and the current portion of long-term debt.

 

*Investing Activities*

 

Investmentin property, plant and equipment during the first quarter of 2008 increased by$7.7 million year over year to $11.8 million due to capital expenditures madeby the acquired Andrew business.  Wecurrently expect total capital expenditures of $80 million to $90 million in2008 compared to $27.9 million in 2007. The expected capital spending during2008 is primarily for expanding and upgrading production capability, costreduction efforts and investments in information technology.

 

Duringthe three months ended March 31, 2008, we received proceeds ofapproximately $8.5 million from the sale of the SatCom product line.  These proceeds were used to reduce theprincipal outstanding under our seven-year senior secured term loan.

 

Duringthe three months ended March 31, 2008, we paid an additional $58.4 millionin connection with the Andrew acquisition. The majority ($56.2 million) of this cash outflow related to the paymentof merger consideration to former Andrew shareholders.

 

*Financing Activities*

 

Inconnection with the exchange of substantially all of our 3.25% convertiblesenior subordinated debentures for merger consideration, we paid $207.5 millionin cash, which is reflected as a financing use of cash, and issued 0.5 millionshares of CommScope common stock, which is reflected as a non-cash transaction.  In connection with the negotiated conversionof $50.5 million in face value of our 1% convertible senior subordinateddebentures, we issued 2.4 million shares of CommScope common stock, which isreflected as a non-cash transaction. We also made other principal repayments of$13.9 million, primarily to reduce the amount outstanding under our seven-yearsenior secured term loan.  We hadavailability under the $400 million revolving credit portion of thefacilities of approximately $376 million and had no outstanding borrowingsunder the revolving credit portion as of March 31, 2008.

 

Management is evaluating our capital structure and mayconsider various alternatives, including but not limited to, reducing debtlevels by making additional principal payments on our outstanding term loans orinducing additional conversions of some or all of our 1% convertible debenturesor raising additional capital.

 

**FutureCash Needs**

 

Weexpect that our primary future cash needs will be debt service, workingcapital, capital expenditures and employee benefit obligations. We madecontributions of $11.4 million to our pension and other postretirement benefitplans during the three months ended March 31, 2008. We expect to makeadditional contributions of up to $5.0 million to our pension and otherpostretirement benefit plans during 2008. We expect that our noncurrentemployee benefit liabilities will be funded through cash flow from futureoperations.

 

Webelieve that our existing cash and cash equivalents and cash flows fromoperations, combined with availability under our senior secured revolvingcredit facility, will be sufficient to meet our presently anticipated futurecash needs, including cash requirements related to restructuring initiatives orother costs related to the Andrew integration. We may, from time to time,borrow under our revolving credit facility or issue securities, if marketconditions are favorable, to meet our future cash needs or to reduce ourborrowing costs.

 

### **FORWARD-LOOKING STATEMENTS**

###  

Certain statements inthis Form 10-Q that are other than historical facts are intended to be “forward-lookingstatements” within the meaning of the Securities Exchange Act of 1934, thePrivate Securities Litigation Reform Act of 1995 and other related lawsand include but are not limited to those statements relating to our businessposition, plans, outlook, revenues, earnings, margins, synergies and otherfinancial items, restructuring plans, sales and earnings expectations, expecteddemand, cost and availability of key raw materials, internal and externalproduction capacity and expansion, competitive pricing and relative marketposition. While we believe such statements are reasonable, the actual results andeffects could differ materially from those currently anticipated. Theseforward-looking statements are identified by the use of certain terms andphrases including but not limited to “intend,” “goal,” “estimate,”  “expect,” “project,” “projections,” “plan,” “anticipate,”“should,” “designed to,” “foreseeable future,” “believe,” “think,” “scheduled,”“outlook,” “guidance” and similar expressions.

 

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Thesestatements are subject to various risks and uncertainties, many of which areoutside our control, including, without limitation, continued economic weaknessand uncertainties, changesin cost and availability of key raw materials and our ability to recover thesecosts from our customers through pricing; customer demand for our products andthe ability to maintain existing business alliances with key customers ordistributors; the risk that our internal production capacity and that of ourcontract manufacturers may be insufficient to meet customer demand or qualitystandards for our products; the risk that customers might cancel orders placedor that orders currently placed may reduce orders in the future; continuingconsolidation among our customers; competitive pricing and acceptance of ourproducts; industry competition and the ability to retain customers throughproduct innovation; possible production disruption due to supplier or contractmanufacturer bankruptcy, reorganization or restructuring; successful ongoingoperation of our vertical integration activities; the possibility of furtherrestructuring actions; possible future impairment charges for fixed orintangible assets; increased obligations under employee benefit plans; abilityto achieve expected sales growth and earnings goals; ability to achieveexpected benefits from prior or future acquisitions; costs of protecting ordefending our intellectual property; ability to obtain capital on commerciallyreasonable terms; adequacy and availability of insurance; costs and challengesof compliance with domestic and foreign environmental laws; variability ineffective tax rate and ability to recover amounts recorded as value added taxreceivables; product performance issues and associated warranty claims; abilityto successfully implement major systems initiatives; regulatory changesaffecting us or the industries we serve; authoritative changes in generallyaccepted accounting principles by standard-setting bodies; politicalinstability; and any statements of belief and any statements of assumptionsunderlying any of the foregoing. These and other factors are discussedin greater detail in Item 1A to our Annual Report on Form 10-K for theyear ended December 31, 2007. The information contained in this Form 10-Qrepresents our best judgment at the date of this report based on informationcurrently available. However, we do not intend, and are not undertaking anyduty or obligation, to update this information to reflect developments orinformation obtained after the date of this report.

 

# **ITEM 3.****                 QUANTITATIVE ANDQUALITATIVE DISCLOSURES ABOUT MARKET RISK**

#  

As disclosed in ourAnnual Report on Form 10-K for the year ended December 31, 2007, ourmajor market risk exposure relates to adverse fluctuations in interest rates,commodity prices and foreign currency exchange rates. We have established arisk management strategy that includes the reasonable use of derivative andnonderivative financial instruments primarily to manage our exposure to thesemarket risks. With the acquisition of Andrew, a greater portion of our salesare to foreign customers and are denominated in currencies other than the U.S.dollar.  Other than the increased levelof exposure to foreign currency fluctuations, we believe our exposureassociated with these market risks has not materially changed since December 31,2007. We have not acquired any new derivative financial instruments since December 31,2007 or terminated any derivative financial instruments that existed at thatdate.

 

# **ITEM 4.****                 CONTROLS ANDPROCEDURES**

#  

Our disclosure controlsand procedures are designed to ensure that information****required to be disclosed in reports thatwe file or submit under the Securities Exchange Act of 1934 is recorded,processed, summarized and reported within the time periods specified in the rules andforms of the Securities and Exchange Commission. Our Chief Executive Officerand our Chief Financial Officer have reviewed the effectiveness of ourdisclosure controls and procedures as of the end of the period covered by thisreport and have concluded that the disclosure controls and procedures areeffective.

 

Other than the migrationof one of our major manufacturing facilities to a different enterprise resourceplanning (ERP) system, as discussed below, there were no changes in ourinternal control over financial reporting during the three months ended March 31,2008 that have materially affected, or are reasonably likely to materiallyaffect, our internal control over financial reporting.

 

During the three monthsended March 31, 2008, we completed the migration of the ERP system used atone of our major domestic manufacturing facilities to an ERP system used inother operations of the Company.  Thismigration was not in response to any identified weakness or deficiency in ourinternal control over financial reporting.

 

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# **PART II — OTHER  INFORMATION**

#  

# **ITEM 1.****                 LEGAL PROCEEDINGS**

 

On October 25,2005, TruePosition, Inc. filed a complaint in the U.S. District Court forthe District of Delaware, alleging that Andrew’s sale of certain mobilelocation products to a customer located in the Middle East infringed aTruePosition patent. Mobile location systems installed in wireless networks areused to determine the position of mobile devices. The complaint sought, amongother things, injunctive relief and unspecified monetary damages.

 

On September 14,2007, a jury ruled in favor of TruePosition, finding that Andrew had willfullyinfringed a single TruePosition patent in providing a mobile location system tothe customer, and the jury awarded $45.3 million in damages to TruePosition.Management believes the verdict is in error and is seeking to have it reversed.The jury’s verdict, including the damage award, is subject to the outcome ofvarious post-verdict motions that we are currently pursuing. In addition, thejudge presiding over the case has not ruled on various equitable claims thatAndrew presented to the judge as part of the post-trial submissions. In theevent that we are unsuccessful in having the verdict set aside by the trialcourt, we intend to appeal.

 

On October 1,2007, TruePosition filed a motion seeking a permanent injunction and a motionseeking to increase the damages awarded, up to trebling the amount as well asthe fees and expenses of its counsel. TruePosition may also seek to recoverinterest on the judgment. However, management believe the damages awarded areinappropriate, as would be any increase, any award of interest, fees orexpenses or the issuance of an injunction.

 

As a result of thejury verdict in the case, a $45.3 million liability is included in otheraccrued liabilities as of March 31, 2008, which was our estimate of theprobable loss, if the jury verdict is not reduced, set aside or overturned. Thelitigation with TruePosition may result in the loss of future revenueopportunities, including opportunities to manufacture and sell products usinguplink time difference of arrival (U-TDOA) technology; however, we are notcurrently able to assess the likelihood or magnitude of such potential losses.

 

At issue in thelitigation with TruePosition is a patent that TruePosition argued was infringedby an Andrew U-TDOA mobile location system that is being deployed undermultiple phases with the customer. Andrew was awarded the initial two phaseswith this customer for an expanded deployment of this strategic project which,when completed, will cover approximately a thousand cell sites. There areadditional phases, not all of which have been awarded by the customer. The juryverdict includes claims related to all such cell sites, including those alreadyinstalled and those to be installed. The patent at issue relates only tocertain implementations using U-TDOA technology. As a result, other customerinstallations and projects that use different mobile location technologies arenot impacted.

 

In March 2008,TruePosition Inc. served Andrew with a complaint in a lawsuit filed in theSuperior Court, New Castle County in Delaware. The suit alleges that Andrew breached certain patent license royaltyobligations to TruePosition under a 2004 settlement agreement related to aprior lawsuit between the parties and alleges that Andrew owes TruePositionapproximately $30 million.  The Companybelieves it has valid defenses and will vigorously defend itself in this action.

 

We are either aplaintiff or a defendant in other pending legal matters in the normal course ofbusiness. As a result of the Andrew acquisition, we became subject toadditional legal matters, including asserted and unasserted claims. Managementbelieves none of these other legal matters, other than that discussed above,will have a material adverse effect on our business or financial condition upontheir final disposition.

 

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# **ITEM 2.****                 UNREGISTEREDSALES OF EQUITY SECURITIES AND USE OF PROCEEDS**

#  

During the threemonths ended March 31, 2008, the Company agreed with certain holders of its1% convertible senior subordinated debentures to increase the conversion rateas an inducement for them to convert their debentures to common stock.  Accordingly, $50.45 million of the debentureswere converted into 2,393,513 shares of common stock (2,319,540 related to theoriginal conversion ratio and 73,973 related to the inducement).  The conversion was made in reliance on theexemption from registration provided by Section 3(a)(9) of theSecurities Act of 1933.

 

# **ITEM 6.****                 EXHIBITS**

 
| 10.1   |   | Agreement, dated as of March 26, 2008, by and  among CommScope, Inc., Andrew Corporation, Andrew Corporation Mauritius,  Andes Industries, Inc., PCT International, Inc., PCT Mauritius  Holding Limited, Mr. Steven Youtsey and PCT Broadband Telecommunications  (Yantai) Co., Ltd. (Incorporated herein by reference from the Company’s  Current Report on Form 8-K dated March 26, 2008 (File  No. 1-12929)). |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 31.1   |   | Certification of Chief Executive Officer pursuant to  Rule 13a-14(a).                                                                                                                                                                                                                                                                                                                                                                                     |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 31.2   |   | Certification of Chief Financial Officer pursuant to  Rule 13a-14(a).                                                                                                                                                                                                                                                                                                                                                                                     |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 32     |   | Certification of Chief Executive Officer and Chief  Financial Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant  to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished pursuant to  Item 601(b)(32)(ii) of Regulation S-K).                                                                                                                                                                                                  |

 

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**SIGNATURES**

 

Pursuant to the requirements of the Securities Exchange Actof 1934, the Registrant has duly caused this report to be signed on its behalfby the undersigned thereunto duly authorized.

 

 
|              |   | COMMSCOPE, INC.                                  |
|-------------------|--------|-------------------------------------------------------|
|              |   |                                                  |
|              |   |                                                  |
| May 7,  2008 |   | /s/  JEARLD L. LEONHARDT                              |
| Date              |   | Jearld L.  Leonhardt                                  |
|              |   | Executive  Vice President and Chief Financial Officer |
|              |   | signing  both in his capacity as Executive Vice       |
|              |   | President  on behalf of the Registrant and as         |
|              |   | Chief  Financial Officer of the Registrant            |

 

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