##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-Q
 (Mark One)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended January 30, 2009
 OR
 o
    
    TRANSACTION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from N/A to N/A
 Commission file number 0-1424
 ADC Telecommunications, Inc.
  Minnesota
    
    41-0743912(State or other jurisdiction of incorporation or organization)
    
    (I.R.S. Employer Identification No.)
 13625 Technology Drive, Eden Prairie, MN 55344-2252
 (952) 938-8080
 N/A
  þ o
  Large accelerated filer þ
    
    Accelerated filer o
    
    Non-accelerated filer   o
(Do not check if a smaller reporting company)
    
    Smaller reporting company o
  o þ




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##### 



TABLE OF CONTENTS
 PART I. FINANCIAL INFORMATION


3ITEM 1. FINANCIAL STATEMENTS


3ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS


17ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK


28ITEM 4. CONTROLS AND PROCEDURES


28PART II. OTHER INFORMATION


28ITEM 1. LEGAL PROCEEDINGS


28ITEM 1A. RISK FACTORS


28ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS


29ITEM 3. DEFAULTS UPON SENIOR SECURITIES


29ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS


29ITEM 5. OTHER INFORMATION


30ITEM 6. EXHIBITS


30SIGNATURES


31ADC TELECOMMUNICATIONS, INC. EXHIBIT INDEX TO FORM 10-Q FOR THE THREE MONTHS
ENDED JANUARY 30, 2009


32EX-10.5EX-10.6EX-10.7EX-10.8EX-10.9EX-10.10EX-31.1EX-31.2EX-32
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PART I. FINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS
 ADC TELECOMMUNICATIONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETSUNAUDITED
 January 30,
    
    
    October 31,2009
    
    
    2008(In millions)ASSETSCurrent Assets:Cash and cash equivalents
    
    $
    515.8
    
    
    $
    631.4Accounts receivable, net of reserves of $18.6 and $17.3
    
    
    173.5
    
    
    
    215.4Unbilled revenue
    
    
    16.3
    
    
    
    25.2Inventories, net of reserves of $47.9 and $50.7
    
    
    167.2
    
    
    
    162.7Prepaid and other current assets
    
    
    35.0
    
    
    
    34.7Assets of discontinued operations
    
    
    10.8
    
    
    
    8.0Total current assets
    
    
    918.6
    
    
    
    1,077.4Property and equipment, net of accumulated depreciation of $415.8 and $407.7
    
    
    169.3
    
    
    
    177.1Assets held for sale
    
    
    
    
    
    
    2.9Restricted cash
    
    
    14.9
    
    
    
    15.3Goodwill
    
    
    
    
    
    
    359.3Intangibles,
net of accumulated amortization of $124.8 and $126.3
    
    
    105.8
    
    
    
    161.1Long-term available-for-sale securities
    
    
    26.7
    
    
    
    40.4Other assets
    
    
    80.6
    
    
    
    86.3Long-term assets of discontinued operations
    
    
    1.0
    
    
    
    1.2Total assets
    
    $
    1,316.9
    
    
    $
    1,921.0LIABILITIES AND SHAREOWNERS INVESTMENTCurrent Liabilities:Current portion of long-term debt
    
    $
    1.8
    
    
    $
    2.6Accounts payable
    
    
    75.9
    
    
    
    99.1Accrued compensation and benefits
    
    
    46.9
    
    
    
    78.1Other accrued liabilities
    
    
    68.7
    
    
    
    71.0Income taxes payable
    
    
    2.1
    
    
    
    2.4Restructuring accrual
    
    
    10.8
    
    
    
    16.7Liabilities of discontinued operations
    
    
    6.7
    
    
    
    8.1Total current liabilities
    
    
    212.9
    
    
    
    278.0Pension obligations and other long-term liabilities
    
    
    84.0
    
    
    
    78.1Long-term notes payable
    
    
    650.5
    
    
    
    650.7Total liabilities
    
    
    947.4
    
    
    
    1,006.8Shareowners Investment:(96.6 and 111.3 shares outstanding, respectively)
    
    
    369.5
    
    
    
    914.2Total liabilities and shareowners investment
    
    $
    1,316.9
    
    
    $
    1,921.0
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ADC TELECOMMUNICATIONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONSUNAUDITED
 Three Months EndedJanuary 30, 2009
    
    
    February 1, 2008(In millions, except earnings per share)Net Sales:Products
    
    $
    223.8
    
    
    $
    292.9Services
    
    
    30.5
    
    
    
    36.2Total net sales
    
    
    254.3
    
    
    
    329.1Cost of Sales:Products
    
    
    149.0
    
    
    
    175.3Services
    
    
    26.6
    
    
    
    33.4Total cost of sales
    
    
    175.6
    
    
    
    208.7Gross Profit
    
    
    78.7
    
    
    
    120.4Operating Expenses:Research and development
    
    
    19.0
    
    
    
    19.5Selling and administration
    
    
    71.9
    
    
    
    81.7Impairment charges
    
    
    413.5
    
    
    
    Restructuring charges
    
    
    0.5
    
    
    
    1.2Total operating expenses
    
    
    504.9
    
    
    
    102.4Operating Income (Loss)
    
    
    (426.2
    )
    
    
    18.0Other Income (Expense), Net
    
    
    (20.3
    )
    
    
    (44.9
    )Loss before income taxes
    
    
    (446.5
    )
    
    
    (26.9
    )Provision (benefit) for income taxes
    
    
    (4.0
    )
    
    
    1.5Loss from continuing operations
    
    
    (442.5
    )
    
    
    (28.4
    )Discontinued Operations, Net of Tax:Income (loss) from discontinued operations
    
    
    (0.3
    )
    
    
    1.1Net Loss
    
    $
    (442.8
    )
    
    $
    (27.3
    )Weighted Average Common Shares Outstanding (Basic)
    
    
    99.4
    
    
    
    117.6Weighted Average Common Shares Outstanding (Diluted)
    
    
    99.4
    
    
    
    117.6Basic Income (Loss) Per Share:Continuing operations
    
    $
    (4.45
    )
    
    $
    (0.24
    )Discontinued operations
    
    $
    
    
    
    $
    0.01Net loss per share
    
    $
    (4.45
    )
    
    $
    (0.23
    )Diluted Income (Loss) Per Share:Continuing operations
    
    $
    (4.45
    )
    
    $
    (0.24
    )Discontinued operations
    
    $
    
    
    
    $
    0.01Net loss per share
    
    $
    (4.45
    )
    
    $
    (0.23
    )
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ADC TELECOMMUNICATIONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWSUNAUDITED
 Three Months EndedJanuary 30, 2009
    
    
    February 1, 2008(In millions)Operating Activities:Loss from continuing operations
    
    $
    (442.5
    )
    
    $
    (28.4
    )Adjustments to reconcile loss from continuing operations to net cash provided by (used for)
operating activities from continuing operations:Inventory write-offs
    
    
    1.8
    
    
    
    2.8Goodwill impairment
    
    
    366.2
    
    
    
    Write-down of cost method investment
    
    
    3.0
    
    
    
    Write-down of intangibles
    
    
    47.3
    
    
    
    Write-down of available-for-sale investments
    
    
    14.2
    
    
    
    50.2Depreciation and amortization
    
    
    21.0
    
    
    
    20.1Provision for bad debt
    
    
    1.9
    
    
    
    (0.3
    )Change in warranty reserves
    
    
    (0.2
    )
    
    
    (1.5
    )Non-cash stock compensation
    
    
    3.4
    
    
    
    5.4Change in deferred income taxes
    
    
    (4.3
    )
    
    
    (2.5
    )Gain on sale of property and equipment
    
    
    (1.1
    )
    
    
    Amortization of deferred financing costs
    
    
    1.5
    
    
    
    0.5Other, net
    
    
    3.9
    
    
    
    (0.9
    )Changes in operating assets and liabilities, net of acquisitions and divestitures:Accounts receivable and unbilled revenues decrease
    
    
    47.3
    
    
    
    26.0Inventories increase
    
    
    (7.6
    )
    
    
    (14.6
    )Prepaid and other assets decrease
    
    
    1.2
    
    
    
    5.4Accounts payable decrease
    
    
    (22.9
    )
    
    
    (15.1
    )Accrued liabilities decrease
    
    
    (49.1
    )
    
    
    (41.5
    )Total cash provided by (used for) operating activities from continuing operations
    
    
    (15.0
    )
    
    
    5.6Total cash used for operating activities from discontinued operations
    
    
    (4.2
    )
    
    
    (0.5
    )Total cash provided by (used for) operating activities
    
    
    (19.2
    )
    
    
    5.1Investing Activities:Acquisitions, net of cash acquired
    
    
    2.7
    
    
    
    (197.1
    )Property, equipment and patent additions
    
    
    (7.7
    )
    
    
    (7.4
    )Proceeds from disposal of property and equipment
    
    
    4.5
    
    
    
    0.1Decrease in restricted cash
    
    
    0.5
    
    
    
    Purchase of available-for-sale securities
    
    
    
    
    
    
    (4.7
    )Sale of available-for-sale securities
    
    
    
    
    
    
    36.7Total cash used for investing activities
    
    
    
    
    
    
    (172.4
    )Financing Activities:Debt issued
    
    
    
    
    
    
    450.0Payments of financing costs
    
    
    
    
    
    
    (10.7
    )Debt payments
    
    
    (1.0
    )
    
    
    Common stock repurchase
    
    
    (94.1
    )
    
    
    Common stock issued
    
    
    
    
    
    
    0.3Total cash provided by (used for) financing activities
    
    
    (95.1
    )
    
    
    439.6Effect of Exchange Rate Changes on Cash
    
    
    (1.3
    )
    
    
    0.1Increase (Decrease) in Cash and Cash Equivalents
    
    
    (115.6
    )
    
    
    272.4Cash and Cash Equivalents, beginning of period
    
    
    631.4
    
    
    
    520.2Cash and Cash Equivalents, end of period
    
    $
    515.8
    
    
    $
    792.6
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ADC TELECOMMUNICATIONS, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTSUNAUDITED
 Note 1: Basis of Presentation
  Accounting for the Impairment or Disposal of Long-Lived
Assets
 Fiscal Year
  st th th
 st th st th
 Summary of Significant Accounting Policies
  Fair Value Measurements
 Fair Value
Measurements
  The Fair Value Option for Financial Assets and Financial Liabilities 
Including an amendment of FASB Statement No. 115
 6




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Warranty
   PurchaseAccrual
    
    Accounting
    
    Charged to costs
    
    
    
    
    
    AccrualOctober 31, 2008
    
    Adjustments
    
    and expenses
    
    Deductions
    
    January 30, 2009(In millions)Warranty Reserve
    
    $
    8.9
    
    
    $
    (0.6
    )
    
    $
    (0.2
    )
    
    $
    0.6
    
    
    $
    7.5
 Share-Based Compensation
 Share-Based Payment: An amendment of
FASB Statement No. 123 and 95,
 Note 2: Acquisitions
 LGC
     December 3,2007Current assets
    
    $
    44.9Intangible assets
    
    
    58.9Goodwill
    
    
    85.4Other long-term assets
    
    
    3.3Total assets acquired
    
    
    192.5Current liabilities
    
    
    42.9Long-term liabilities
    
    
    2.5Total liabilities assumed
    
    
    45.4Net assets acquired
    
    
    147.1Less:Cash acquired
    
    
    0.8LGC Options exchanged for ADC Options
    
    
    3.0Net cash paid
    
    $
    143.3
 7




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Century Man
      January 10,2008Current assets
    
    $
    33.1Intangible assets
    
    
    13.0Goodwill
    
    
    36.7Other long-term assets
    
    
    0.5Total assets acquired
    
    
    83.3Current liabilities
    
    
    26.0Long-term liabilities
    
    
    Total liabilities assumed
    
    
    26.0Net assets acquired
    
    
    57.3Less cash acquired
    
    
    5.0Net cash paid
    
    $
    52.3
 Pro-Forma Results of Operations
  Three MonthsEndedFebruary 1,2008Net sales
    
    $
    353.6Loss from continuing operations
    
    
    (25.6
    )Net loss
    
    
    (25.4
    )Loss from continuing operations per share  basic and diluted
    
    
    (0.22
    )Net loss per share  basic and diluted
    
    $
    (0.22
    )
  8




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Note 3: Discontinued Operations
 APS Germany
   Three Months EndedJanuary 30,
    
    February 1,2009
    
    2008(In millions)Net sales
    
    $
    6.9
    
    
    $
    9.4Income (loss) from discontinued operations
    
    
    (0.3
    )
    
    
    1.1
 Note 4: Net Loss from Continuing Operations Per Share
  Three Months EndedJanuary 30,
    
    
    February 1,2009
    
    
    2008(In millions, exceptper share amounts)Numerator:Loss from continuing operations
    
    $
    (442.5
    )
    
    $
    (28.4
    )Denominator:Weighted average common shares outstanding  basic and diluted
    
    
    99.4
    
    
    
    117.6Basic and diluted loss per share from continuing operations
    
    $
    (4.45
    )
    
    $
    (0.24
    )
   Convertible Shares
    
    ConversionConvertible Subordinated Notes
    
    January 30, 2009
    
    February 1, 2008
    
    Price(In millions)$200 million, 1.0% fixed rate, paid June 15, 2008
    
    
    
    
    
    
    7.1
    
    
    $
    28.091$200 million, 6-month LIBOR plus 0.375%, due June 15, 2013
    
    
    7.1
    
    
    
    7.1
    
    
    
    28.091$225 million, 3.5% fixed rate, due July 15, 2015
    
    
    8.3
    
    
    
    8.3
    
    
    
    27.00$225 million, 3.5% fixed rate, due July 15, 2017
    
    
    7.9
    
    
    
    7.9
    
    
    
    28.55Total
    
    
    23.3
    
    
    
    30.4
  9




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Note 5: Inventories
  January 30,
    
    
    October 31,2009
    
    
    2008(In millions)Manufactured products
    
    $
    138.2
    
    
    $
    132.9Purchased materials
    
    
    70.4
    
    
    
    73.1Work-in-process
    
    
    6.5
    
    
    
    7.4Less: Inventory reserve
    
    
    (47.9
    )
    
    
    (50.7
    )Total inventories, net
    
    $
    167.2
    
    
    $
    162.7
 Note 6: Property and Equipment
  January 30,
    
    
    October 31,2009
    
    
    2008(In millions)Land and buildings
    
    $
    131.9
    
    
    $
    134.7Machinery and equipment
    
    
    406.4
    
    
    
    404.6Furniture and fixtures
    
    
    38.6
    
    
    
    38.9Less: Accumulated depreciation
    
    
    (415.8
    )
    
    
    (407.7
    )Total
    
    
    161.1
    
    
    
    170.5Construction-in-progress
    
    
    8.2
    
    
    
    6.6Total property and equipment, net
    
    $
    169.3
    
    
    $
    177.1
 Note 7: Goodwill and Intangible Assets
    10




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NetworkConnectivity
    
    
    Solutions
    
    
    Total(In millions)Balance as of October 31, 2008
    
    $
    274.0
    
    
    $
    85.3
    
    
    $
    359.3Purchase accounting adjustments
    
    
    6.5
    
    
    
    0.1
    
    
    
    6.6Cumulative translation adjustment
    
    
    0.3
    
    
    
    
    
    
    
    0.3Impairment
    
    
    (280.8
    )
    
    
    (85.4
    )
    
    
    (366.2
    )Balance as of January 30, 2009
    
    $
    
    
    
    $
    
    
    
    $
    
  Note 8: Credit Facility
   Note 9: Income Taxes
  Accounting for
Income Taxes,
   11




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Note 10: Comprehensive Income (Loss)
   Three Months EndedJanuary 30,
    
    
    February 1,2009
    
    
    2008(In millions)Net loss
    
    $
    (442.8
    )
    
    $
    (27.3
    )Change in cumulative translation adjustment
    
    
    0.5
    
    
    
    (3.3
    )Net change in fair value of interest rate swap
    
    
    (9.6
    )
    
    
    Unrealized loss on foreign currency hedge
    
    
    (2.1
    )
    
    
    Unrealized gain on securities
    
    
    0.5
    
    
    
    Total comprehensive loss
    
    $
    (453.5
    )
    
    $
    (30.6
    )
  Note 11: Segment and Geographic Information
   
    
    Connectivity
    
    Network Solutions
    
    Professional Services
  Connectivity
 Network Solutions
 Professional Services
 12




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Network
    
    
    Professional
    
    
    
    
    
    
    Restructuring
    
    
    GAAPConnectivity
    
    
    Solutions
    
    
    Services
    
    
    Consolidated
    
    
    and impairment
    
    
    Consolidated(In millions)Three Months Ended January 30, 2009External net sales:Products
    
    $
    198.2
    
    
    $
    16.1
    
    
    $
    9.5
    
    
    $
    223.8
    
    
    
    
    
    
    $
    223.8Services
    
    
    
    
    
    
    4.2
    
    
    
    26.3
    
    
    
    30.5
    
    
    
    
    
    
    
    30.5Total external net sales
    
    $
    198.2
    
    
    $
    20.3
    
    
    $
    35.8
    
    
    $
    254.3
    
    
    
    
    
    
    $
    254.3Depreciation and amortization
    
    $
    16.1
    
    
    $
    3.2
    
    
    $
    1.7
    
    
    $
    21.0
    
    
    
    
    
    
    $
    21.0Operating income (loss)
    
    $
    
    
    
    $
    (11.0
    )
    
    $
    (1.2
    )
    
    $
    (12.2
    )
    
    $
    414.0
    
    
    $
    (426.2
    )Three Months Ended February 1, 2008External net sales:Products
    
    $
    257.5
    
    
    $
    23.3
    
    
    $
    12.1
    
    
    $
    292.9
    
    
    
    
    
    
    $
    292.9Services
    
    
    
    
    
    
    5.5
    
    
    
    30.7
    
    
    
    36.2
    
    
    
    
    
    
    
    36.2Total external net sales
    
    $
    257.5
    
    
    $
    28.8
    
    
    $
    42.8
    
    
    $
    329.1
    
    
    
    
    
    
    $
    329.1Depreciation and amortization
    
    $
    14.7
    
    
    $
    4.0
    
    
    $
    1.4
    
    
    $
    20.1
    
    
    
    
    
    
    $
    20.1Operating income (loss)
    
    $
    28.2
    
    
    $
    (6.3
    )
    
    $
    (2.7
    )
    
    $
    19.2
    
    
    $
    1.2
    
    
    $
    18.0
 Geographic Information
  Three Months EndedJanuary 30,
    
    
    February 1,2009
    
    
    2008(In millions)Geographic Sales Information:Inside the United States
    
    $
    143.1
    
    
    $
    198.0Outside the United States:Asia Pacific (Australia, China, Hong Kong, India, Japan,
Korea, New Zealand, Southeast Asia and Taiwan)
    
    
    40.4
    
    
    
    33.3EMEA (Europe (excluding Germany), Middle East and Africa)
    
    
    39.8
    
    
    
    67.6Germany (1)
    
    
    10.0
    
    
    
    8.9Americas (Canada, Central and South America)
    
    
    21.0
    
    
    
    21.3Total net sales
    
    $
    254.3
    
    
    $
    329.1Property and Equipment, Net:Inside the United States
    
    $
    110.4Outside the United States
    
    
    58.9Total property and equipment, net
    
    $
    169.3
 
 (1)
    
    Due to the significance of its sales, Germany is broken out for geographic purposes.  Note 12: Restructuring Charges
  13




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Three Months EndedJanuary 30,
    
    
    February 1,2009
    
    
    2008(In millions)Employee severance
    
    $
    
    
    
    $
    1.1Facilities consolidation and lease termination
    
    
    0.5
    
    
    
    0.1Total restructuring charges
    
    $
    0.5
    
    
    $
    1.2
    ContinuingAccrual
    
    
    Operations Net
    
    
    Cash payments
    
    
    AccrualType of Charge
    
    October 31, 2008
    
    
    Additions
    
    
    Charged to accrual
    
    
    January 30, 2009(In millions)Employee severance costs
    
    $
    8.6
    
    
    $
    
    
    
    $
    5.5
    
    
    $
    3.1Facilities consolidation
    
    
    8.1
    
    
    
    0.5
    
    
    
    0.9
    
    
    
    7.7Total restructuring accrual
    
    $
    16.7
    
    
    $
    0.5
    
    
    $
    6.4
    
    
    $
    10.8
  Note 13: Other Income (Loss), Net
  Three months endedJanuary 30,
    
    
    February 1,2009
    
    
    2008(In millions)Interest income on investments
    
    $
    3.8
    
    
    $
    9.9Interest expense on borrowings
    
    
    (8.0
    )
    
    
    (5.6
    )Interest income (loss), net
    
    
    (4.2
    )
    
    
    4.3Impairment loss on available-for-sale securities
    
    
    (14.2
    )
    
    
    (50.2
    )Impairment loss on cost method investment
    
    
    (3.0
    )
    
    
    Foreign exchange income (loss)
    
    
    (0.9
    )
    
    
    1.0Gain on sale of fixed assets
    
    
    1.1
    
    
    
    Other, net
    
    
    0.9
    
    
    
    Subtotal
    
    
    (16.1
    )
    
    
    (49.2
    )Total other loss, net
    
    $
    (20.3
    )
    
    $
    (44.9
    )
 14




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##### Table of Contents



The Meaning of Other-Than-Temporary Impairment and Its Application to
Certain Investments.
   Note 14: Commitments and Contingencies
 Legal Contingencies
 Change of Control
 Note 15: Common Stock Repurchase Plan
  Note 16: Fair Value Measurements
  Fair Value Hierarchy
  15




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##### Table of Contents



Level 1
  Level 2
   
    
    Determining which instruments are most similar to the instrument being priced
requires management to identify a sample of similar securities based on the
coupon rates, maturity, issuer, credit rating and instrument type, and
subjectively select an individual security or multiple securities that are
deemed most similar to the security being priced; and
    
    Determining whether a market is considered active requires management judgment.
 Level 3
  Assets and Liabilities Measured at Fair Value on a Recurring Basis
  Fair Value Measurements at Reporting Date UsingQuoted Prices inActive Markets
    
    
    
    
    
    
    Significantfor Identical
    
    
    Significant Other
    
    
    UnobservableJanuary 30,
    
    
    Assets
    
    
    Observable Inputs
    
    
    InputsDescription
    
    2009
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Assets:Cash and cash equivalents
    
    $
    515.8
    
    
    $
    515.8
    
    
    $
    
    
    
    $
    Available-for-sale securities
    
    
    0.2
    
    
    
    0.2
    
    
    
    
    
    
    
    Restricted cash
    
    
    14.9
    
    
    
    14.9
    
    
    
    
    
    
    
    Long-term available-for-sale securities
(auction-rate securities)
    
    
    26.7
    
    
    
    
    
    
    
    
    
    
    
    26.7Total assets measured at fair value
    
    $
    557.6
    
    
    $
    530.9
    
    
    $
    
    
    
    $
    26.7Liabilities:Interest rate swap liabilities
(included in other noncurrent
liabilities)
    
    
    12.4
    
    
    
    
    
    
    
    12.4
    
    
    
    Currency hedge liabilities (included in
other noncurrent liabilities)
    
    
    1.9
    
    
    
    
    
    
    
    1.9
    
    
    
    Total liabilities measured at fair value
    
    $
    14.3
    
    
    $
    
    
    
    $
    14.3
    
    
    $
    
 16




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##### Table of Contents



Fair ValueMeasurements UsingSignificantUnobservable Inputs(Level 3)Beginning balance
    
    $
    40.4Total gains or losses (realized or unrealized)
    
    
    (14.2
    )Included in earnings (or changes in net assets)Included in other comprehensive income
    
    
    0.5Purchases, issuance, and settlements
    
    
    Transfers in and /or out of Level 3
    
    
    Ending balance
    
    $
    26.7
  
 ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 Overview
     
    
    Connectivity
    
    Network Solutions
    
    Professional Services
  17




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##### Table of Contents



Connectivity
 Network Solutions
 Professional Services
 Marketplace Conditions
 Current Global Macro-Economic Conditions
  
    
    Net sales decreased by 22.7% from our first quarter of fiscal 2008;
    
    Our net sales from countries outside the U.S. grew to 43.7% of our total net sales
versus 39.8% in the first quarter of fiscal 2008. As a result of this and the fact that
the U.S. dollar has strengthened, our net sales were negatively
impacted by approximately $16.0 million
in the first quarter versus the same period in fiscal 2008;
    
    Despite reducing actual expenditures for research and development and selling and
administrative costs in the first quarter from the same period in fiscal 2008, these costs
grew as a percentage of our net sales because of lower sales volumes;
and
    
    Our gross profit percentage in the first quarter was 30.9% versus 36.6% in the same
period in fiscal 2008 primarily because of lower sales volumes.
  Industry Conditions
   
    
    First, businesses and consumers worldwide are becoming increasingly dependent on
broadband, multi-service communications networks to conduct a wide range of daily
communications tasks for business and personal purposes (e.g., emails with large amounts of
data, online gaming, video streaming and photo sharing). This demand for additional
broadband services increases the need for broadband network infrastructure products.
 18




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##### Table of Contents




    
    Second, end-users of communications services increasingly expect to do business over a
single network connection at a low price. Both public networks operated by communications
service providers and private enterprise networks are evolving to provide combinations of
Internet, data, video and voice services that can be offered over the same high-speed
network connection.
    Strategy
      19




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##### Table of Contents




    
    migrating sales volume to customer-preferred, leading technology products and sunsetting
end of life products;
    
    improving our customers ordering experience through a faster, simpler, more efficient
inquiry-to-invoice process;
    
    redesigning product lines to gain efficiencies from the use of more common components and
improve customization capabilities;
    
    increasing direct material savings from strategic global sourcing;
    
    improving cash flow from supplier-managed inventory and lead-time reduction programs;
    
    relocating certain manufacturing, engineering and other operations from higher-cost
geographic areas to lower-cost areas;
    
    reducing the number of locations from which we conduct general and administrative support
functions; and
    
    focusing our resources on core operations and, where appropriate, using third parties to
perform non-core processes.
   20




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##### Table of Contents



Results of Operations
 Net Sales
  January 30,
    
    
    February 1,
    
    
    Percentage Increase2009
    
    
    2008
    
    
    (Decrease) Between(In millions)
    
    
    PeriodsNet sales
    
    $
    254.3
    
    
    $
    329.1
    
    
    
    (22.7
    )%Cost of sales
    
    
    175.6
    
    
    
    208.7
    
    
    
    (15.9
    )Gross profit
    
    
    78.7
    
    
    
    120.4
    
    
    
    (34.6
    )Gross margin
    
    
    30.9
    %
    
    
    36.6
    %Operating expenses:Research and development
    
    
    19.0
    
    
    
    19.5
    
    
    
    (2.6
    )Selling and administration
    
    
    71.9
    
    
    
    81.7
    
    
    
    (12.0
    )Impairment charges
    
    
    413.5
    
    
    
    
    
    
    
    100.0Restructuring charges
    
    
    0.5
    
    
    
    1.2
    
    
    
    (58.3
    )Total operating expenses
    
    
    504.9
    
    
    
    102.4
    
    
    
    393.1Operating income
    
    
    (426.2
    )
    
    
    18.0
    
    
    
    Operating margin
    
    
    (167.6
    )%
    
    
    5.5
    %Other income (expense), net:Interest income, net
    
    
    (4.2
    )
    
    
    4.3
    
    
    
    (197.7
    )Other, net
    
    
    (16.1
    )
    
    
    (49.2
    )
    
    
    67.3Income before income taxes
    
    
    (446.5
    )
    
    
    (26.9
    )
    
    
    Provision (benefit) for income taxes
    
    
    (4.0
    )
    
    
    1.5
    
    
    
    366.7
    %Income from continuing operations
    
    $
    (442.5
    )
    
    $
    (28.4
    )
    
    
    
  PercentageJanuary 30,
    
    
    February 1,
    
    
    Increase (Decrease)Reportable Segment
    
    2009
    
    
    2008
    
    
    Between Periods(In millions)Connectivity
    
    $
    198.2
    
    
    $
    257.5
    
    
    
    (23.0
    )%Network Solutions:Products
    
    
    16.1
    
    
    
    23.3
    
    
    
    (30.9
    )Services
    
    
    4.2
    
    
    
    5.5
    
    
    
    (23.6
    )Total Network Solutions
    
    
    20.3
    
    
    
    28.8
    
    
    
    (29.5
    )Professional Services:Products
    
    
    9.5
    
    
    
    12.1
    
    
    
    (21.5
    )Services
    
    
    26.3
    
    
    
    30.7
    
    
    
    (14.3
    )Total Professional Services
    
    
    35.8
    
    
    
    42.8
    
    
    
    (16.4
    )Total Net Sales
    
    $
    254.3
    
    
    $
    329.1
    
    
    
    (22.7
    )%
    21




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##### Table of Contents



Gross Profit
  Operating Expenses
  Research and development:
 Selling and administration:
 Restructuring charges:
 Impairments:
   22




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##### Table of Contents



Other Income (Loss), Net
  Three months endedJanuary 30,
    
    
    February 1,2009
    
    
    2008(In millions)Interest income on investments
    
    $
    3.8
    
    
    $
    9.9Interest expense on borrowings
    
    
    (8.0
    )
    
    
    (5.6
    )Interest income (loss), net
    
    
    (4.2
    )
    
    
    4.3Impairment loss on available-for-sale securities
    
    
    (14.2
    )
    
    
    (50.2
    )Impairment loss on cost method investment
    
    
    (3.0
    )
    
    
    Foreign exchange income (loss)
    
    
    (0.9
    )
    
    
    1.0Gain on sale of fixed assets
    
    
    1.1
    
    
    
    Other, net
    
    
    0.9
    
    
    
    Subtotal
    
    
    (16.1
    )
    
    
    (49.2
    )Total other loss, net
    
    $
    (20.3
    )
    
    $
    (44.9
    )
 The Meaning of Other-Than-Temporary Impairment and Its Application to
Certain Investments.
   Income Taxes
    23




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##### Table of Contents



Acquisitions
 LGC
    Century Man
      Discontinued Operations
 APS Germany
  Application of Critical Accounting Policies and Estimates
  24




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##### Table of Contents



Fair Value Measurements:
  Liquidity and Capital Resources
 Liquidity
      Operating Activities
   25




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##### Table of Contents



Investing Activities
   Financing Activities
  Credit Facility
   Share Repurchase
  Off-Balance-Sheet Arrangements and Contractual Obligations
  26




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##### Table of Contents



Working Capital and Liquidity Outlook
      Cautionary Statement Regarding Forward Looking Information
  27




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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  
 ITEM 4. CONTROLS AND PROCEDURES
 Disclosure Controls and Procedures
  Changes in Internal Control over Financial Reporting
  
 PART II. OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
  
 ITEM 1A. RISK FACTORS
  We terminated our existing line of credit during the first quarter of fiscal 2009. If we seek
to secure other financing we may not be able to obtain it on acceptable terms and, given the
current recession, obtaining financing on any terms may not be possible.
  28




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##### Table of Contents



ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
  Issuer Purchases of Equity Securities.
 Total Number of Shares
    
    Maximum Dollar Value ofTotal Number of
    
    
    
    
    
    Purchased as Part of
    
    Shares that May Yet BeShares
    
    Average Price Paid
    
    Publicly Announced Plans
    
    Purchased Under the Plans orFiscal Month
    
    Purchased
    
    Paid per Share(1)
    
    or Programs
    
    Programs(2)November 1, 2008  November 28, 2008
    
    
    12,437,803
    
    
    $
    6.20
    
    
    
    12,437,803
    
    
    $
    16,054,298November 29, 2008  December 26, 2008
    
    
    2,461,496
    
    
    $
    6.75
    
    
    
    2,461,496
    
    
    $
    December 27, 2008  January 30, 2009
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    Total
    
    
    14,899,299
    
    
    
    
    
    
    
    14,899,299
 
 (1)
    
    Excludes commissions paid to brokers.(2)
    
    On August 12, 2008, our Board of Directors approved a share repurchase
program for up to $150.0 million. As of October 31, 2008, we had
repurchased approximately 6.4 million shares of common stock for
approximately $56.5 million, or $8.80 average per share. In early
December 2008, we completed this repurchase program at an average
price of $7.04 per share, resulting in approximately 21.3 million
shares purchased under the program. 
 ITEM 3. DEFAULTS UPON SENIOR SECURITIES
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  For
    
    WithheldLois M. Martin
    
    85,081,814
    
    2,720,541Krish A. Prabhu, Ph.D
    
    85,479,179
    
    2,323,176John E. Rehfeld
    
    85,204,926
    
    2,597,429David A. Roberts
    
    84,700,236
    
    3,102,119
  Votes For
    
    Votes Against
    
    Abstentions86,105,274
    
    1,219,501
    
    477,580
  Votes For
    
    Votes Against
    
    Abstentions86,951,504
    
    483,467
    
    367,384
 29




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##### Table of Contents



ITEM 5. OTHER INFORMATION
  
 ITEM 6. EXHIBITS
  30




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##### Table of Contents



SIGNATURES
  Dated: March 4, 2009
    ADC TELECOMMUNICATIONS, INC.By:
    /s/ James G. MathewsJames G. MathewsVice President, Chief Financial Officer
(Principal Financial Officer and Duly Authorized Officer) 31




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##### Table of Contents



ADC TELECOMMUNICATIONS, INC.
EXHIBIT INDEX TO FORM 10-Q
FOR THE THREE MONTHS ENDED JANUARY 30, 2009
 ExhibitNo.
    
    Description3.1
    
    Restated Articles of Incorporation of ADC Telecommunications, Inc., conformed to incorporate
amendments dated January 20, 2000, June 30, 2000, August 13, 2001, March 2, 2004 and May 9,
2005. (Incorporated by reference to Exhibit 3-a to ADCs Quarterly Report on Form 10-Q for the
quarter ended July 29, 2005.)3.2
    
    Restated Bylaws of ADC Telecommunications, Inc. effective December 9, 2008 (incorporated by
reference to Exhibit 3.1 of ADCs Current Report on Form 8-K filed on December 12, 2008).4.1
    
    Form of certificate for shares of Common Stock of ADC Telecommunications, Inc. (Incorporated by
reference to Exhibit 4-a to ADCs Quarterly Report on Form 10-Q for the quarter ended April 29,
2005.)4.2
    
    Rights Agreement, as amended and restated as of May 9, 2007, between ADC Telecommunications,
Inc. and Computershare Investor Services, LLC, as Rights Agent (which includes as Exhibit A,
the Form of Certificate of Designation, Preferences and Right of Series A Junior Participating
Preferred Stock, as Exhibit B, the Form of Right Certificate, and as Exhibit C, the Summary of
Rights to Purchase Preferred Shares). (Incorporated by reference to Exhibit 4-b to ADCs Form
8-A/A filed on May 11, 2007.)10.1
    
    ADC Telecommunications, Inc. Management Incentive Plan for Fiscal Year 2009 (incorporated by
reference to Exhibit 10.5 of ADCs Annual Report on Form 10-K filed on December 22, 2008).10.2
    
    ADC Telecommunications, Inc. Executive Management Incentive Plan effective November 1, 2008
(incorporated by reference to Exhibit 10.6 of ADCs Annual Report on Form 10-K filed on
December 22, 2008).10.3
    
    Form of ADC Telecommunications, Inc. Incentive Stock Option Agreement provided to Robert E.
Switz under the ADC Telecommunications, Inc. 2008 Global Stock Incentive Plan on December 23,
2008 (incorporated by reference to Exhibit 99.1 of ADCs Current Report on Form 8-K filed on
December 30, 2008).10.4
    
    Form of ADC Telecommunications, Inc. Nonqualified Stock Option Agreement provided to Robert E.
Switz under the ADC Telecommunications, Inc. 2008 Global Stock Incentive Plan on December 23,
2008 (incorporated by reference to Exhibit 99.2 of ADCs Current Report on Form 8-K filed on
December 30, 2008).10.5
    
    Form of ADC Telecommunications, Inc. Incentive Stock Option Agreement provided to employees
with respect to option grants made under the ADC Telecommunications, Inc. 2008 Global Stock
Incentive Plan beginning December 15, 2008.*10.6
    
    Form of ADC Telecommunications, Inc. Nonqualified Stock Option Agreement provided to employees
with respect to option grants made under the ADC Telecommunications, Inc. 2008 Global Stock
Incentive Plan beginning December 15, 2008.*10.7
    
    Form of ADC Telecommunications, Inc. Three-Year Time-Based Restricted Stock Unit Award
Agreement provided to employees with respect to restricted stock unit grants made under the ADC
Telecommunications, Inc. 2008 Global Stock Incentive Plan beginning December 15, 2008.*10.8
    
    Form of ADC Telecommunications, Inc. Three-Year Performance-Based Restricted Stock Unit Award
Agreement provided to employees with respect to restricted stock unit grants made under the ADC
Telecommunications, Inc. 2008 Global Stock Incentive Plan beginning December 15, 2008.*10.9
    
    Form of ADC Telecommunications, Inc. Three-Year Performance-Based Cash Unit Award Agreement
provided to employees with respect to restricted cash unit grants made under the ADC
Telecommunications, Inc. 2008 Global Stock Incentive Plan beginning December 15, 2008.*10.10
    
    Amendment to Employment Agreement between ADC Telecommunications, Inc. and Robert E. Switz
dated December 28, 2008.*31.1
    
    Certification of principal executive officer required by Exchange Act Rule 13a-14(a)*31.2
    
    Certification of principal financial officer required by Exchange Act Rule 13a-14(a)*32
    
    Certifications furnished pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002*
 
 *
    
    Filed herewith 32