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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q



|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------

For the quarterly period ended March 31, 2007

OR



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------

For the transition period from  to

Commission
file number: 001-14617

ANDREW CORPORATION

(Exact name of registrant as specified in its charter)



|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Delaware                                                       |  | 36-2092797                          
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)
|                                                               | 
|3 Westbrook Corporate Center, Suite 900 Westchester, Illinois  |  | 60154                               
|(Address of principal executive offices)                       |  | (Zip Code)                          

(708) 236-6600

(Registrants telephone number, including area code)

Indicate by check mark whether the
registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.

Yes  x    No ̈

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of
accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act.

Large accelerated filer  x            Accelerated filer ̈Non-accelerated filer ̈

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ̈No  x

The number of outstanding shares of the
registrants common stock as of May 7, 2007 was 155,723,518.



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##### Table of Contents

INDEX

ANDREW CORPORATION



|          |  |                                                                                           |  |   
|--------- |  | ----------------------------------------------------------------------------------------- |  | --
|PART I.   |  | FINANCIAL INFORMATION                                                                     |  | 3 
|          |  |                                                                                          
|Item 1.   |  | Financial Statements (Unaudited)                                                          |  | 3 
|          |  |                                                                                          
|          |  | Consolidated Balance Sheets March 31, 2007 and September 30, 2006                        |  | 3 
|          |  |                                                                                          
|          |  | Consolidated Statements of Operations Three and six months ended March 31, 2007 and 2006 |  | 4 
|          |  |                                                                                          
|          |  | Consolidated Statements of Cash Flows Six months ended March 31, 2007 and 2006           |  | 5 
|          |  |                                                                                          
|          |  | Notes to Consolidated Financial Statements March 31, 2007                                |  | 6 
|          |  |                                                                                          
|Item 2.   |  | Managements Discussion and Analysis of Financial Condition and Results of Operations     |  | 20
|          |  |                                                                                          
|Item 3.   |  | Quantitative and Qualitative Disclosures About Market Risk                                |  | 33
|          |  |                                                                                          
|Item 4.   |  | Controls and Procedures                                                                   |  | 33
|          |  |                                                                                          
|PART II.  |  | OTHER INFORMATION                                                                         |  | 34
|          |  |                                                                                          
|Item 1.   |  | Legal Proceedings                                                                         |  | 34
|          |  |                                                                                          
|Item 1A.  |  | Risk Factors                                                                              |  | 34
|          |  |                                                                                          
|Item 2.   |  | Unregistered Sales of Equity Securities and Use of Proceeds                               |  | 35
|          |  |                                                                                          
|Item 4.   |  | Submission of matters to a Vote of Security Holders                                       |  | 35
|          |  |                                                                                          
|Item 6.   |  | Exhibits                                                                                  |  | 35
|          | 
|SIGNATURE |  | 36                                                                                       



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PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ANDREW CORPORATION

CONSOLIDATED BALANCE SHEETS

(In thousands, except share amounts)



|                                                                                                                                                                    |  |                |           |   |                   |   |           |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------- | --------- | - | ----------------- | - | --------- | -
|                                                                                                                                                                    |  | March 31, 2007 |           |   | September 30,2006 |  
|                                                                                                                                                                    |  | (UNAUDITED)    |           |   |                   |  
|ASSETS                                                                                                                                                              |  |                |           |   |                   |   |           |  
|Current Assets                                                                                                                                                      |  |                |           |   |                   |   |           |  
|Cash and cash equivalents                                                                                                                                           |  | $              | 127,157   |   |                   | $ | 169,609   |  
|Accounts receivable, less allowances (March 2007 - $7,500; September 2006 - $7,112)                                                                                 |  |                | 512,081   |   |                   |   | 557,834   |  
|Inventory                                                                                                                                                           |  |                | 397,968   |   |                   |   | 388,296   |  
|Other current assets                                                                                                                                                |  |                | 56,272    |   |                   |   | 37,282    |  
|Assets held for sale                                                                                                                                                |  |                | 17,582    |   |                   |   |          |  
|                                                                                                                                                                    |  |                |           |   |                   |   |           |  
|Total Current Assets                                                                                                                                                |  |                | 1,111,060 |   |                   |   | 1,153,021 |  
|Other Assets                                                                                                                                                        |  |                |           |   |                   |   |           |  
|Goodwill                                                                                                                                                            |  |                | 913,436   |   |                   |   | 882,666   |  
|Intangible assets, less amortization                                                                                                                                |  |                | 49,349    |   |                   |   | 47,205    |  
|Other assets                                                                                                                                                        |  |                | 46,196    |   |                   |   | 62,018    |  
|Property, Plant and Equipment                                                                                                                                       |  |                |           |   |                   |   |           |  
|Land and land improvements                                                                                                                                          |  |                | 23,166    |   |                   |   | 22,578    |  
|Buildings                                                                                                                                                           |  |                | 143,033   |   |                   |   | 160,244   |  
|Equipment                                                                                                                                                           |  |                | 582,710   |   |                   |   | 566,482   |  
|Allowance for depreciation                                                                                                                                          |  |                | (513,574  | ) |                   |   | (485,293  | )
|                                                                                                                                                                    |  |                |           |   |                   |   |           |  
|                                                                                                                                                                    |  |                | 235,335   |   |                   |   | 264,011   |  
|                                                                                                                                                                    |  |                |           |   |                   |   |           |  
|TOTAL ASSETS                                                                                                                                                        |  | $              | 2,355,376 |   |                   | $ | 2,408,921 |  
|                                                                                                                                                                    |  |                |           |   |                   |   |           |  
|LIABILITIES AND SHAREHOLDERS EQUITY                                                                                                                                |  |                |           |   |                   |   |           |  
|Current Liabilities                                                                                                                                                 |  |                |           |   |                   |   |           |  
|Accounts payable                                                                                                                                                    |  |                | 242,641   |   |                   |   | 324,295   |  
|Accrued expenses and other liabilities                                                                                                                              |  |                | 115,172   |   |                   |   | 115,952   |  
|Compensation and related expenses                                                                                                                                   |  |                | 50,050    |   |                   |   | 60,596    |  
|Restructuring                                                                                                                                                       |  |                | 8,563     |   |                   |   | 6,167     |  
|Income tax payable                                                                                                                                                  |  |                | 7,041     |   |                   |   | 5,433     |  
|Notes payable and current portion of long-term debt                                                                                                                 |  |                | 115,803   |   |                   |   | 55,443    |  
|Liabilities related to assets held for sale                                                                                                                         |  |                | 4,263     |   |                   |   |          |  
|                                                                                                                                                                    |  |                |           |   |                   |   |           |  
|Total Current Liabilities                                                                                                                                           |  |                | 543,533   |   |                   |   | 567,886   |  
|Deferred liabilities                                                                                                                                                |  |                | 48,719    |   |                   |   | 43,382    |  
|Long-term debt, less current portion                                                                                                                                |  |                | 250,251   |   |                   |   | 290,378   |  
|SHAREHOLDERS EQUITY                                                                                                                                                |  |                |           |   |                   |   |           |  
|Common stock (par value, $.01 a share; 400,000,000 shares authorized; 162,476,513 shares issued at March 31, 2007 and September 30,
2006, including treasury stock) |  |                | 1,625     |   |                   |   | 1,625     |  
|Additional paid-in capital                                                                                                                                          |  |                | 686,403   |   |                   |   | 684,868   |  
|Accumulated other comprehensive income                                                                                                                              |  |                | 62,579    |   |                   |   | 37,743    |  
|Retained earnings                                                                                                                                                   |  |                | 831,793   |   |                   |   | 836,298   |  
|Treasury stock, common stock at cost (6,811,095 shares at March 31, 2007 and                                                                                        |  |                |           |   |                   |   |           |  
|5,215,977 shares at September 30, 2006)                                                                                                                             |  |                | (69,527   | ) |                   |   | (53,259   | )
|                                                                                                                                                                    |  |                |           |   |                   |   |           |  
|Total Shareholders Equity                                                                                                                                          |  |                | 1,512,873 |   |                   |   | 1,507,275 |  
|                                                                                                                                                                    |  |                |           |   |                   |   |           |  
|TOTAL LIABILITIES AND SHAREHOLDERS EQUITY                                                                                                                          |  | $              | 2,355,376 |   |                   | $ | 2,408,921 |  
|                                                                                                                                                                    |  |                |           |   |                   |   |           |  

See Notes to Consolidated Financial Statements



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ANDREW CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(In thousands, except per share amounts)



|                                    |  |                             |         |   |                           |   |         |      |  |   |           |   |  |   |         |  
|----------------------------------- |  | --------------------------- | ------- | - | ------------------------- | - | ------- | ---- |  | - | --------- | - |  | - | ------- | -
|                                    |  | Three Months EndedMarch 31, |         |   | Six Months EndedMarch 31, |  
|                                    |  | 2007                        |         |   | 2006                      |   |         | 2007 |  |   | 2006      |  
|Sales                               |  | $                           | 502,721 |   |                           | $ | 481,653 |      |  | $ | 1,024,906 |   |  | $ | 996,352 |  
|Cost of products sold               |  |                             | 397,922 |   |                           |   | 382,236 |      |  |   | 798,616   |   |  |   | 779,929 |  
|                                    |  |                             |         |   |                           |   |         |      |  |   |           |   |  |   |         |  
|Gross Profit                        |  |                             | 104,799 |   |                           |   | 99,417  |      |  |   | 226,290   |   |  |   | 216,423 |  
|Operating Expenses                  |  |                             |         |   |                           |   |         |      |  |   |           |   |  |   |         |  
|Research and development            |  |                             | 26,979  |   |                           |   | 26,792  |      |  |   | 54,288    |   |  |   | 54,751  |  
|Sales and administrative            |  |                             | 62,435  |   |                           |   | 58,318  |      |  |   | 128,461   |   |  |   | 120,022 |  
|Intangible amortization             |  |                             | 5,460   |   |                           |   | 4,429   |      |  |   | 11,331    |   |  |   | 9,548   |  
|Restructuring                       |  |                             | 1,372   |   |                           |   | 1,362   |      |  |   | 7,899     |   |  |   | 861     |  
|(Gain) loss on sale of assets       |  |                             | (331    | ) |                           |   | (72     | )    |  |   | (516      | ) |  |   | 1,389   |  
|                                    |  |                             |         |   |                           |   |         |      |  |   |           |   |  |   |         |  
|                                    |  |                             | 95,915  |   |                           |   | 90,829  |      |  |   | 201,463   |   |  |   | 186,571 |  
|                                    |  |                             |         |   |                           |   |         |      |  |   |           |   |  |   |         |  
|Operating Income                    |  |                             | 8,884   |   |                           |   | 8,588   |      |  |   | 24,827    |   |  |   | 29,852  |  
|Other                               |  |                             |         |   |                           |   |         |      |  |   |           |   |  |   |         |  
|Interest expense                    |  |                             | 4,383   |   |                           |   | 4,139   |      |  |   | 8,506     |   |  |   | 7,908   |  
|Interest income                     |  |                             | (1,330  | ) |                           |   | (1,351  | )    |  |   | (2,595    | ) |  |   | (2,232  | )
|Other (income) expense, net         |  |                             | (452    | ) |                           |   | 687     |      |  |   | 447       |   |  |   | 533     |  
|                                    |  |                             |         |   |                           |   |         |      |  |   |           |   |  |   |         |  
|                                    |  |                             | 2,601   |   |                           |   | 3,475   |      |  |   | 6,358     |   |  |   | 6,209   |  
|                                    |  |                             |         |   |                           |   |         |      |  |   |           |   |  |   |         |  
|Income Before Income Taxes          |  |                             | 6,283   |   |                           |   | 5,113   |      |  |   | 18,469    |   |  |   | 23,643  |  
|Income taxes                        |  |                             | 8,241   |   |                           |   | 1,544   |      |  |   | 22,974    |   |  |   | 5,231   |  
|                                    |  |                             |         |   |                           |   |         |      |  |   |           |   |  |   |         |  
|Net Income (Loss)                   |  | $                           | (1,958  | ) |                           | $ | 3,569   |      |  | $ | (4,505    | ) |  | $ | 18,412  |  
|                                    |  |                             |         |   |                           |   |         |      |  |   |           |   |  |   |         |  
|Basic Net Income (Loss) per Share   |  | $                           | (0.01   | ) |                           | $ | 0.02    |      |  | $ | (0.03     | ) |  | $ | 0.12    |  
|                                    |  |                             |         |   |                           |   |         |      |  |   |           |   |  |   |         |  
|Diluted Net Income (Loss) per Share |  | $                           | (0.01   | ) |                           | $ | 0.02    |      |  | $ | (0.03     | ) |  | $ | 0.11    |  
|                                    |  |                             |         |   |                           |   |         |      |  |   |           |   |  |   |         |  
|Average Shares Outstanding          |  |                             |         |   |                           |   |         |      |  |   |           |   |  |   |         |  
|Basic                               |  |                             | 156,293 |   |                           |   | 159,530 |      |  |   | 156,686   |   |  |   | 159,873 |  
|Diluted                             |  |                             | 156,293 |   |                           |   | 160,260 |      |  |   | 156,686   |   |  |   | 160,486 |  

See Notes to Consolidated Financial Statements



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ANDREW CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(In thousands)



|                                                    |  |                           |          |   |      |   |         |  
|--------------------------------------------------- |  | ------------------------- | -------- | - | ---- | - | ------- | -
|                                                    |  | Six Months EndedMarch 31, |         
|                                                    |  | 2007                      |          |   | 2006 |  
|Cash Flows from Operations                          |  |                           |          |   |      |   |         |  
|Net Income (Loss)                                   |  | $                         | (4,505   | ) |      | $ | 18,412  |  
|Adjustments to Net Income (Loss)                    |  |                           |          |   |      |   |         |  
|Depreciation                                        |  |                           | 29,136   |   |      |   | 28,192  |  
|Amortization                                        |  |                           | 11,331   |   |      |   | 9,548   |  
|Gain on sale of assets                              |  |                           | (516     | ) |      |   | (100    | )
|Restructuring costs                                 |  |                           | 1,874    |   |      |   | (2,130  | )
|Stock-based compensation                            |  |                           | 5,454    |   |      |   | 4,045   |  
|Change in Operating Assets / Liabilities            |  |                           |          |   |      |   |         |  
|Accounts receivable                                 |  |                           | 65,214   |   |      |   | (3,694  | )
|Inventory                                           |  |                           | 21,669   |   |      |   | (12,885 | )
|Other assets                                        |  |                           | (23,725  | ) |      |   | (6,118  | )
|Accounts payable and other liabilities              |  |                           | (110,624 | ) |      |   | (23,657 | )
|                                                    |  |                           |          |   |      |   |         |  
|Net Cash (Used for) From Operations                 |  |                           | (4,692   | ) |      |   | 11,613  |  
|Investing Activities                                |  |                           |          |   |      |   |         |  
|Capital expenditures                                |  |                           | (33,231  | ) |      |   | (33,181 | )
|Acquisition of businesses                           |  |                           | (48,670  | ) |      |   | (9,063  | )
|Investments                                         |  |                           | 5,220    |   |      |   | (1,722  | )
|Proceeds from sale of property, plant and equipment |  |                           | 10,580   |   |      |   | 1,777   |  
|                                                    |  |                           |          |   |      |   |         |  
|Net Cash Used for Investing Activities              |  |                           | (66,101  | ) |      |   | (42,189 | )
|Financing Activities                                |  |                           |          |   |      |   |         |  
|Long-term debt payments, net                        |  |                           | (26,305  | ) |      |   | (7,610  | )
|Notes payable borrowings, net                       |  |                           | 69,867   |   |      |   | 17,839  |  
|Payments to acquire common stock for treasury       |  |                           | (20,425  | ) |      |   | (17,600 | )
|Stock purchase and option plans                     |  |                           | 167      |   |      |   | 3,019   |  
|                                                    |  |                           |          |   |      |   |         |  
|Net Cash From (Used for) Financing Activities       |  |                           | 23,304   |   |      |   | (4,352  | )
|Effect of exchange rate changes on cash             |  |                           | 5,037    |   |      |   | 1,086   |  
|                                                    |  |                           |          |   |      |   |         |  
|Decrease for the Period                             |  |                           | (42,452  | ) |      |   | (33,842 | )
|Cash and Equivalents at Beginning of Period         |  |                           | 169,609  |   |      |   | 188,780 |  
|                                                    |  |                           |          |   |      |   |         |  
|Cash and Equivalents at End of Period               |  | $                         | 127,157  |   |      | $ | 154,938 |  
|                                                    |  |                           |          |   |      |   |         |  

See Notes to Consolidated Financial Statements



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ANDREW CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles (GAAP) for complete
financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six month periods ended March 31,
2007 are not necessarily indicative of the results that may be expected for the year ending September 30, 2007. For further information, refer to the consolidated financial statements and footnotes thereto included in the companys annual
report on Form 10-K for the year ended September 30, 2006.

The preparation of the unaudited financial statements in conformity with GAAP requires the
use of estimates and assumptions related to the reporting of assets, liabilities, revenues, expenses and related disclosures. Estimates are used for, but not limited to, accounting for the allowance for doubtful accounts, sales returns, inventory
reserves, revenue recognition, warranty costs, depreciation and amortization, goodwill and intangible asset impairments, contingencies, taxes, pension liabilities, and restructuring and merger integration costs. Estimates are revised periodically.
Actual results could differ from these estimates.

Reclassifications

Certain previously reported amounts have been reclassified to conform to the current period presentation.

NOTE 2.
EARNINGS (LOSS) PER SHARE

The following table sets forth the computation of basic and diluted earnings (loss) per share (in thousands, except per
share amounts):



|                                    |  |                             |         |                           |      |   |         |  |   |         |   |  |   |        
|----------------------------------- |  | --------------------------- | ------- | ------------------------- | ---- | - | ------- |  | - | ------- | - |  | - | -------
|                                    |  | Three months endedMarch 31, |         | Six months endedMarch 31,
|BASIC EARNINGS (LOSS) PER SHARE     |  | 2007                        |         |                           | 2006 |   | 2007    |  |   | 2006   
|Net income (loss)                   |  | $                           | (1,958  | )                         |      | $ | 3,569   |  | $ | (4,505  | ) |  | $ | 18,412 
|Average basic shares outstanding    |  |                             | 156,293 |                           |      |   | 159,530 |  |   | 156,686 |   |  |   | 159,873
|                                    |  |                             |         |                           |      |   |         |  |   |         |   |  |   |        
|Basic net income (loss) per share   |  | $                           | (0.01   | )                         |      | $ | 0.02    |  | $ | (0.03   | ) |  | $ | 0.12   
|                                    |  |                             |         |                           |      |   |         |  |   |         |   |  |   |        
|                                    |  |                            
|                                    |  | Three months endedMarch 31, |         | Six months endedMarch 31,
|DILUTED EARNINGS (LOSS) PER SHARE   |  | 2007                        |         |                           | 2006 |   | 2007    |  |   | 2006   
|Net income (loss)                   |  | $                           | (1,958  | )                         |      | $ | 3,569   |  | $ | (4,505  | ) |  | $ | 18,412 
|Average basic shares outstanding    |  |                             | 156,293 |                           |      |   | 159,530 |  |   | 156,686 |   |  |   | 159,873
|Convertible Notes                   |  |                             |        |                           |      |   |        |  |   |        |   |  |   |       
|Options, warrants, and equivalents  |  |                             |        |                           |      |   | 730     |  |   |        |   |  |   | 613    
|                                    |  |                             |         |                           |      |   |         |  |   |         |   |  |   |        
|Average diluted shares outstanding  |  |                             | 156,293 |                           |      |   | 160,260 |  |   | 156,686 |   |  |   | 160,486
|                                    |  |                             |         |                           |      |   |         |  |   |         |   |  |   |        
|Diluted net income (loss) per share |  | $                           | (0.01   | )                         |      | $ | 0.02    |  | $ | (0.03   | ) |  | $ | 0.11   
|                                    |  |                             |         |                           |      |   |         |  |   |         |   |  |   |        

The company did not include the dilutive effect of 902,975 and 829,326 stock options, respectively, for the three
and six months ended March 31, 2007. Including these shares would have decreased the loss per share.



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The companys convertible subordinated notes are potentially convertible into 17,531,568 shares of the
companys common stock. These shares were not included in the calculation of diluted earnings per share because including these shares and excluding the interest expense on these notes would have been anti-dilutive.

Options and warrants to purchase 6,304,796 and 6,579,133 shares of common stock, at March 31, 2007 and 2006, respectively, were not included in the computation of
diluted shares because the options and warrants exercise prices were greater than the average market price of the companys common stock.

NOTE 3. INVENTORIES

Inventories consisted of the following at March 31, 2007 and September 30, 2006, net of reserves:



|                |  |               |         |                   |   |        
|--------------- |  | ------------- | ------- | ----------------- | - | -------
|(In thousands)  |  | March 31,2007 |         | September 30,2006
|Raw materials   |  | $             | 103,936 |                   | $ | 110,431
|Work in process |  |               | 115,513 |                   |   | 110,936
|Finished goods  |  |               | 178,519 |                   |   | 166,929
|                |  |               |         |                   |   |        
|                |  | $             | 397,968 |                   | $ | 388,296
|                |  |               |         |                   |   |        

NOTE 4. COMPREHENSIVE INCOME

For the three and six months ended March 31, 2007 and 2006, comprehensive income consisted of net income (loss) and foreign currency translation adjustments. Additionally, in the first quarter of fiscal 2006, the
company recognized a $1.5 million gain for foreign currency translation adjustments related to the liquidation of an investment in a foreign subsidiary. Foreign currency translation adjustments are recorded in accumulated other comprehensive income,
a component of shareholders equity. The following table sets forth comprehensive income for the three and six months ended March 31, 2007 and 2006:



|                                                 |  |                             |        |                           |      |   |        |  |   |        |   |  |   |        |  
|------------------------------------------------ |  | --------------------------- | ------ | ------------------------- | ---- | - | ------ |  | - | ------ | - |  | - | ------ | -
|                                                 |  | Three months endedMarch 31, |        | Six months endedMarch 31, |     
|(In thousands)                                   |  | 2007                        |        |                           | 2006 |   | 2007   |  |   | 2006   |  
|Net income (loss)                                |  | $                           | (1,958 | )                         |      | $ | 3,569  |  | $ | (4,505 | ) |  | $ | 18,412 |  
|Foreign currency translation adjustments         |  |                             | 6,900  |                           |      |   | 10,298 |  |   | 24,836 |   |  |   | (1,834 | )
|Realized foreign currency translation adjustment |  |                             |       |                           |      |   |       |  |   |       |   |  |   | 1,489  |  
|                                                 |  |                             |        |                           |      |   |        |  |   |        |   |  |   |        |  
|Comprehensive income                             |  | $                           | 4,942  |                           |      | $ | 13,867 |  | $ | 20,331 |   |  | $ | 18,067 |  
|                                                 |  |                             |        |                           |      |   |        |  |   |        |   |  |   |        |  

NOTE 5. RECENTLY ISSUED ACCOUNTING POLICIES

In July 2006, the Financial Accounting Standards Board (FASB) issued Interpretation (FIN) 48, Accounting for Uncertainty in Income Taxes  an interpretation of FASB Statement
No. 109. FIN 48 prescribes a recognition threshold and measurement attribute for tax positions. The company is required to adopt FIN 48 at the beginning of fiscal 2008 and is in the process of determining any potential impact to the
financial statements.

In September 2006, the FASB issued Statement of Financial Accounting Standards (SFAS) No. 157, Fair Value
Measurements. This statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. SFAS No. 157 will be effective for the
company beginning in fiscal 2009, and the company is in the process of determining any potential impact to the financial statements.

In September 2006,
the FASB issued SFAS No. 158, Employers Accounting for Defined Benefit Pension and Other Postretirement Plans. This statement requires an entity to (1) recognize in its statement of financial position an asset for a defined benefit
postretirement plans overfunded status or a liability for a plans underfunded status, (2) measure a defined benefit postretirement plans assets and obligations that determine its funded status as of the end of the
employers fiscal year, and (3) recognize changes in the funded status of a defined benefit postretirement plan in comprehensive income in the year in which the change occurs. SFAS No. 158 is effective for the company as of
September 30, 2007. Had this pronouncement been effective as of March 31, 2007, accumulated other comprehensive income would have decreased by $26.1 million, with a corresponding increase to net long-term liabilities.



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In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial
Liabilities.This Statement permits entities to choose to measure many financial instruments and certain other items at fair value. An entity shall report unrealized gains and losses on items for which the fair value option has been elected in
earnings at each subsequent reporting date. Upfront costs and fees related to items for which the fair value option is elected shall be recognized in earnings as incurred and not deferred. SFAS No. 159 will be effective for the company
beginning in fiscal 2009, and the company is in the process of determining any potential impact to the financial statements.

NOTE 6. ADOPTION OF NEW
ACCOUNTING POLICIES

In May 2005, the FASB issued revised SFAS No. 154, Accounting Changes and Error Corrections, a replacement of APB
Opinion No. 20, Accounting Changes, and FASB Statement No. 3, Reporting Accounting Changes in Interim Financial Statements. This statement applies to all voluntary changes in accounting principle, and requires retrospective
application to prior periods financial statements for changes in accounting principle. The company adopted SFAS No. 154 beginning in fiscal 2007. The adoption of SFAS No. 154 did not have an impact on the companys results of
operations.

In October 2005, the FASB issued Staff Position (FSP) 13-1, Accounting for Rental Costs Incurred during a Construction Period.The guidance requires that the rental costs for ground or building operating leases during the construction period be recognized as rental expenses. The guidance permits either retroactive or prospective treatment for the first reporting period
beginning after December 15, 2005. The company adopted FSP 13-1 in the second quarter fiscal 2006. The adoption of FSP 13-1 did not have a material impact on the companys results of operations.

In June 2006, the FASB ratified Emerging Issues Task Force (EITF) Issue No. 06-3, How Taxes Collected from Customers and Remitted to Governmental
Authorities Should Be Presented in the Income Statement (That Is, Gross versus Net Presentation). The task force reached a conclusion that either method is acceptable; however, if taxes are reported on a gross basis (included as Sales) those
amounts should be disclosed if significant. This pronouncement is effective for the first reporting period beginning after December 15, 2006. The company adopted EITF No. 06-3 in the second quarter of fiscal 2007. The company continues to
exclude sales taxes and value added taxes from revenue. The adoption of EITF 06-3 did not have a material impact on the companys results of operations.

NOTE 7. STOCK-BASED COMPENSATION

In the first quarter of fiscal 2006, the company adopted SFAS No. 123(R), Share-Based
Payments, which revised SFAS No. 123, Accounting for Stock-Based Compensation. SFAS No. 123(R) requires the company to record compensation expense for all share-based payments, including employee stock options, at fair value.
Prior to fiscal 2006, the company had accounted for its stock-based compensation awards pursuant to Accounting Principles Board Opinion (APB) No. 25, Accounting for Stock Issued to Employees, and its related interpretations, which
allowed the use of the intrinsic value method. Under the intrinsic value method, compensation expense for stock option-based employee compensation was not recognized in the income statement since all stock options granted by the company had an
exercise price equal to the market price of the underlying common stock on the option grant date.

The company elected to use the modified prospective
transition method to adopt SFAS No. 123(R). Under this transition method beginning in fiscal 2006, compensation expense recognized includes: (a) expense for all share-based payments granted prior to, but not vested as of, October 1,
2005, based on the grant date fair value estimated in accordance with the original provisions of SFAS No. 123, and (b) expense for all share-based payments granted subsequent to October 1, 2005, based on the grant date fair value
estimated in accordance with the provisions of SFAS No. 123(R). As required under the modified prospective transition method, the company did not restate prior period results.

The company maintains long-term management incentive plans (LTIPs) which provide for the issuance of equity-based awards including stock options, which vest over a four- or five-year period. During the
first six months of 2007 and 2006, the company granted 523,302 and 463,900 stock options, respectively, under its LTIPs. The company has elected to value these options using the Black-Scholes option-pricing model and has determined that the weighted
average fair value of these options is $5.01 and $5.29 per option, respectively. Total pre-tax compensation cost recognized in the first six months of fiscal 2007 and 2006 for all stock options was $1.8 and $1.9 million, respectively. Based on the
options currently outstanding, the company estimates that for fiscal 2007, the company will recognize $3.4 million, on a pre-tax basis, of compensation expense for all stock options. As of March 31, 2007, unrecognized compensation expense
related to the unvested portion of the companys stock options was approximately $5.9 million and the weighted average remaining vesting period of these options was 2.6 years.



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The fair value of each option was estimated based on the date of grant using the Black-Scholes option valuation model
with the following assumptions:



|                        |  |                           |   |  |                                 |   |  |           |   |  |           |  
|----------------------- |  | ------------------------- | - |  | ------------------------------- | - |  | --------- | - |  | --------- | -
|                        |  | Six Months EndedMarch 31, |   |  | Fiscal Year Ended September 30, |  
|                        |  | 2007                      |   |  | 2006                            |   |  | 2005      |   |  | 2004      |  
|Risk-free interest rate |  | 4.67                      | % |  | 4.42                            | % |  | 4.25      | % |  | 4.00      | %
|Expected life           |  | 5.5 years                 |   |  | 5.5 years                       |   |  | 6.0 years |   |  | 6.0 years |  
|Expected volatility     |  | 50                        | % |  | 50                              | % |  | 66        | % |  | 61        | %
|Dividend yield          |  | 0                         | % |  | 0                               | % |  | 0         | % |  | 0         | %
|Estimated forfeitures   |  | 10                        | % |  | 10                              | % |  | NA        |   |  | NA        |  

The risk-free interest rate was based on U.S. Treasury yields with a remaining term that approximates the expected
life of the options granted. The expected life used for options granted in fiscal 2007 and 2006 was based on historical data of employee exercise performance. Prior to fiscal 2006, the expected life was based on the average life of exercised
options. The estimated volatility for fiscal 2007 and 2006 was based both on the companys historical stock price volatility and the market-implied volatility from traded options. Prior to fiscal 2006, the company calculated volatility based
only on historical stock price volatility. The company used an expected dividend yield of 0% for all periods because the company has never paid a dividend and does not anticipate paying dividends in the foreseeable future. Beginning in fiscal 2006,
the company has used an estimated forfeiture rate of 10% based on historical data and maintains that current rate for fiscal 2007. Prior to fiscal 2006, the company used the actual forfeiture method allowed under SFAS No. 123 which assumed that
all options would vest and pro forma expense was adjusted when options were forfeited.

A summary of the companys stock option activity and related
information follows for the six months ended March 31, 2007:



|                                  |  |                           |   |  |                               |      
|--------------------------------- |  | ------------------------- | - |  | ----------------------------- | -----
|                                  |  | Summary ofOption Activity |   |  | WeightedAverageExercise Price
|Outstanding at September 30, 2006 |  | 7,740,116                 |   |  | $                             | 16.65
|Granted                           |  | 523,302                   |   |  |                               | 9.79 
|Expired or cancelled              |  | (1,287,719                | ) |  |                               | 23.38
|Exercised                         |  | (23,300                   | ) |  |                               | 9.36 
|                                  |  |                           |   |  |                               |      
|Outstanding at March 31, 2007     |  | 6,952,399                 |   |  | $                             | 14.93
|                                  |  |                           |   |  |                               |      
|Exercisable at March 31, 2007     |  | 5,939,517                 |   |  | $                             | 15.71
|                                  |  |                           |   |  |                               |      

The range of exercise prices for options outstanding and exercisable at March 31, 2007 was $8.91 to $28.44.



|                         |  |                    |  |                  |       |             |      |                    |           |               |   |             |  |     
|------------------------ |  | ------------------ |  | ---------------- | ----- | ----------- | ---- | ------------------ | --------- | ------------- | - | ----------- |  | ----
|                         |  |                    |  | Weighted Average |       |             |      | Weighted Average  
|Range of Exercise Prices |  | OutstandingOptions |  | ExercisePrice    |       | AverageLife |      | ExercisableOptions |           | ExercisePrice |   | AverageLife
|$8.91 - $10.63           |  | 1,658,603          |  | $                | 9.74  |             | 7.65 |                    | 906,341   |               | $ | 9.56        |  | 6.33
|$11.09 - $12.91          |  | 1,506,638          |  |                  | 11.43 |             | 6.70 |                    | 1,246,018 |               |   | 11.46       |  | 6.63
|$13.64 - $16.84          |  | 1,689,100          |  |                  | 14.94 |             | 7.14 |                    | 1,689,100 |               |   | 14.94       |  | 7.14
|$17.40 - $18.65          |  | 522,428            |  |                  | 17.63 |             | 3.11 |                    | 522,428   |               |   | 17.63       |  | 3.11
|$19.12 - $22.19          |  | 509,705            |  |                  | 21.77 |             | 5.00 |                    | 509,705   |               |   | 21.77       |  | 5.00
|$22.65 - $24.00          |  | 1,033,925          |  |                  | 23.16 |             | 2.77 |                    | 1,033,925 |               |   | 23.16       |  | 2.77
|$27.88 - $28.44          |  | 32,000             |  |                  | 28.36 |             | 0.79 |                    | 32,000    |               |   | 28.36       |  | 0.79
|                         |  |                    |  |                  |       |             |      |                    |           |               |   |             |  |     
|Total                    |  | 6,952,399          |  | $                | 14.93 |             | 5.99 |                    | 5,939,517 |               | $ | 15.71       |  | 5.57
|                         |  |                    |  |                  |       |             |      |                    |           |               |   |             |  |     

The company also grants restricted stock units (RSUs) to officers, key employees and directors under
its LTIPs. Each RSU entitles the participant to one share of the companys common stock on the vesting date. SFAS No. 123(R) requires compensation expense to be adjusted for an estimated forfeiture factor. The company uses an estimated
forfeiture rate of 10% based upon its historical experience. Compensation expense for RSUs is recognized on a straight-line basis over the vesting period and is based on the market price of the companys common stock on the grant date. Certain
RSUs vest over service periods ranging from three to four years. In fiscal 2007 and 2006, the company granted RSUs that vest based on the company achieving a target return on



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invested capital (ROIC) goal in fiscal 2009 and 2008, respectively. The number of RSUs that vest will range from 0% to 125% of the grant based on
the actual ROIC achieved in fiscal 2009 and 2008, respectively, for each grant. In determining compensation expense, the company assumed that the ROIC targets will be achieved at 100% of the grants. The company evaluates this assumption
periodically. The fair value of these RSUs was based on the companys common stock price at the date of each grant. The company recognized pre-tax compensation expense for these RSUs of $3.7 million and $2.2 million during the first six months
of fiscal 2007 and 2006, respectively. Assuming the RSUs currently outstanding achieve 100% of the target, the company estimates that for fiscal 2007, the company will recognize $7.4 million, on a pre-tax basis, of compensation expense for all
currently outstanding RSU grants.

The table below shows the companys outstanding RSUs at March 31, 2007:



|           |  |                  |  |                   |  |                           |       |                                                   |   |                     |  |           
|---------- |  | ---------------- |  | ----------------- |  | ------------------------- | ----- | ------------------------------------------------- | - | ------------------- |  | ----------
|Grant Year |  | RSUsOutstanding |  | Vesting Period    |  | WeightedAverageFair Value |       | UnearnedCompensationExpense(Dollars in thousands) |   | WeightedAverageLife
|2004       |  | 25,000           |  | 3 years           |  | $                         | 19.84 |                                                   | $ | 63                  |  | 0.18 years
|2005       |  | 289,350          |  | 4 years           |  |                           | 13.49 |                                                   |   | 1,111               |  | 1.75 years
|2006       |  | 99,625           |  | 4 years           |  |                           | 12.29 |                                                   |   | 930                 |  | 2.87 years
|2006       |  | 610,402          |  | performance-based |  |                           | 10.21 |                                                   |   | 3,391               |  | 1.60 years
|2007       |  | 105,000          |  | 4 years           |  |                           | 10.34 |                                                   |   | 1,029               |  | 3.90 years
|2007       |  | 1,095,360        |  | performance-based |  | $                         | 9.76  |                                                   |   | 9,077               |  | 2.60 years
|           |  |                  |  |                   |  |                           |       |                                                   |   |                     |  |           
|Total      |  | 2,224,737        |  |                   |  |                           |       |                                                   | $ | 15,601              |  |           
|           |  |                  |  |                   |  |                           |       |                                                   |   |                     |  |           

A summary of the companys RSU activity and related information follows for the six months ended
March 31, 2007:



|                                  |  |                        |   |  |                                        |      
|--------------------------------- |  | ---------------------- | - |  | -------------------------------------- | -----
|                                  |  | Summary ofRSU Activity |   |  | WeightedAverage FairValue atGrant Date
|Outstanding at September 30, 2006 |  | 1,518,023              |   |  | $                                      | 11.60
|Granted                           |  | 1,235,916              |   |  |                                        | 9.81 
|Expired or forfeited              |  | (128,877               | ) |  |                                        | 11.00
|Vested                            |  | (400,325               | ) |  |                                        | 11.71
|                                  |  |                        |   |  |                                        |      
|Outstanding at March 31, 2007     |  | 2,224,737              |   |  | $                                      | 10.62
|                                  |  |                        |   |  |                                        |      

NOTE 8. RESTRUCTURING AND INTEGRATION

During the six months ended March 31, 2007, the company recorded $7.9 million of restructuring expense consisting of $7.8 million of employee related severance costs and $0.1 million of lease cancellation and
other costs; $3.0 million of these costs were paid in the period incurred during the six months ended March 31, 2007 and $4.9 million were recorded as an increase to restructuring reserves. The expense during the six months ended March 31,
2007 relates to the following segments: Base Station Subsystems, $6.1 million; Antenna and Cable, $0.9 million; sales and administration, $0.5 million; Network Solutions, $0.3 million; and Satellite Communications, $0.1 million. The majority ($5.6
million) of the Base Station Subsystems expense was related to the reduction of headcount in Italy due to the companys previously announced plans to outsource North American and European filter production to Elcoteq S.A. The remaining $2.3
million of expense was due to cost cutting initiatives to reduce headcount in specific departments that were initiated and completed in the same quarter. In addition, the company established integration reserves for the Precision Antennas and EMS
Wireless acquisitions of $0.4 million and $0.7 million, respectively. These reserves were recorded as an increase to goodwill.

At March 31, 2007, the
companys total restructuring reserve balance was $8.6 million, which was comprised of $0.7 million for its fiscal 2002 restructuring plan, $2.9 million for the Allen Telecom acquisition integration plan, $0.4 million for the Channel Master
integration plan, $0.2 million for the Skyware acquisition integration plan, $3.5 million for the Italian filter restructuring plan, $0.4 million for Precision Antenna integration plan and $0.5 million for EMS Wireless integration plan.



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Restructuring Reserve

In fiscal 2002, the company initiated a plan to restructure its operations. As part of this plan, the company consolidated its operations into fewer, more efficient facilities and opened two new manufacturing facilities in Mexico and the
Czech Republic. In fiscal 2002, when the company initiated its restructuring efforts, it incurred pre-tax charges of $36.0 million. In fiscal 2003 and 2004, the company made additional accruals to operating expense of $7.9 million and $7.5 million,
respectively, primarily for additional severance and lease cancellation costs. The company does not expect to incur any significant additional expense related to this plan.

Since the start of this restructuring initiative in fiscal 2002, the company has incurred $20.7 million of inventory and equipment write-downs, paid severance costs of $17.3 million to 1,226 employees, paid $11.8
million for lease cancellation and other costs, and reversed $1.0 million to income. During the first quarter of fiscal 2007, the company decreased the reserve $0.1 million as an adjustment to the lease reserve. Additionally, in the first six months
of fiscal 2007, the company incurred cash costs of $0.5 million for lease payments. The remaining reserve balance at March 31, 2007 of $0.7 million relates to a leased facility previously used by the Base Station Subsystems segment for lease
cancellation costs that are scheduled to continue through fiscal 2007.

A summary of the restructuring reserve activity for the first six months of fiscal
2007 is as follows (in thousands):



|                                   |  |                                |       |                        |   |      |                    |  |   |                                |   |  |   |    
|---------------------------------- |  | ------------------------------ | ----- | ---------------------- | - | ---- | ------------------ |  | - | ------------------------------ | - |  | - | ---
|Restructuring Reserve Activity     |  | Reserve Balance Sept. 30, 2006 |       | Utilization of Reserve |   |      | Changes to Reserve |  |   | Reserve Balance March 31, 2007
|Lease cancellation and other costs |  | $                              | 1,236 |                        | $ | (489 | )                  |  | $ | (80                            | ) |  | $ | 667

Allen Telecom Acquisition Integration Reserve

As part of the Allen Telecom acquisition, the company accrued an integration reserve for costs to integrate Allens operations with those of the company and to eliminate duplicate operations. The initial cost
estimate of $29.9 million was comprised of a $16.2 million provision for inventory and fixed asset write-downs and a restructuring reserve of $13.7 million for employee termination, lease cancellation and other costs. During fiscal 2004, the company
adjusted this initial estimate and recorded an additional $13.6 million of reserves consisting of $14.1 million of additional employee termination, lease cancellation and other costs, and a $0.5 million reduction in expected inventory provisions.
Integration reserves established in purchase accounting were accounted for as a decrease in assets acquired and an increase in liabilities assumed from Allen Telecom.

Included in the fiscal 2004 Allen Telecom integration reserve were costs to close a facility in France. In fiscal 2005, the company determined that it would continue to operate in this facility. The company reversed
$2.7 million in severance and $0.9 million of lease cancellation and other costs that had been accrued for the closing of this facility. The reversal of this accrual was treated as a decrease in liabilities acquired from Allen Telecom resulting in a
$3.6 million decrease in goodwill.

The company increased the reserve and recorded expense of $0.9 million and $0.1 million in fiscal 2006 and fiscal 2007,
respectively, for additional lease cancellation costs related to the Amesbury, Massachusetts facility and decreased the reserve and goodwill in fiscal 2006 by $1.1 million for severance and other costs that will not be incurred. During the first
quarter of fiscal 2007, the company completed the transfer of its North American and European filter production to Elcoteq S.A. and ceased operations in its Amesbury facility. The company is attempting to sublease the facility, and has recorded a
restructuring reserve for the currently expected rent cost associated with the unused facility. The lease for the Amesbury facility expires in 2010. The company does not expect to incur any significant additional expense related to this integration
plan.

Since the start of these integration efforts in 2003, the company has paid severance costs of $12.0 million to 462 employees and $9.3 million for
lease cancellation and other costs. During the first six months of fiscal 2007, the company paid cash costs of $0.4 million for severance payments to 55 employees and $0.5 million for lease payments. The company expects to substantially complete its
integration activities during fiscal 2007. The reserve balance at March 31, 2007 of $2.9 million primarily relates to a leased facility previously used by the Base Station Subsystems segment.



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A summary of the Allen Telecom integration reserve activity for the first six months of fiscal 2007 is as follows (in
thousands):



|                                           |  |                              |       |                       |   |      |                     |  |                              |    |  |   |      
|------------------------------------------ |  | ---------------------------- | ----- | --------------------- | - | ---- | ------------------- |  | ---------------------------- | -- |  | - | -----
|Allen Telecom Integration Reserve Activity |  | ReserveBalanceSept. 30, 2006 |       | Utilizationof Reserve |   |      | Additions toReserve |  | ReserveBalanceMarch 31, 2007
|Severance                                  |  | $                            | 730   |                       | $ | (362 | )                   |  | $                            |   |  | $ | 368  
|Lease cancellation and other costs         |  |                              | 2,919 |                       |   | (454 | )                   |  |                              | 81 |  |   | 2,546
|                                           |  |                              |       |                       |   |      |                     |  |                              |    |  |   |      
|Total Allen Telecom Integration Reserve    |  | $                            | 3,649 |                       | $ | (816 | )                   |  | $                            | 81 |  | $ | 2,914
|                                           |  |                              |       |                       |   |      |                     |  |                              |    |  |   |      

Channel Master Integration Reserve

As part of the Channel Master acquisition, the company accrued an integration reserve for costs to restructure Channel Masters U.S. manufacturing operations. The initial cost estimate of $5.2 million was
comprised of a $2.9 million provision for relocation and restructuring of manufacturing operations and a $2.3 million provision to pay severance benefits to approximately 245 manufacturing employees. The $5.2 million was treated as a purchase
accounting adjustment and was recorded as an increase in the value of net assets acquired.

In fiscal 2006, $4.6 million of the previously established
reserve was reversed as the company executed a lease agreement to retain a smaller, more cost-effective portion of its existing facility in Smithfield, North Carolina that eliminated the need for employee severance and the majority of
facility-related costs. This resulted in a purchase accounting adjustment to decrease the net assets acquired (there was no goodwill acquired in this acquisition). In the first six months of fiscal 2007, the company paid cash costs of $0.3 million
for facility relocation costs. The company does not expect to incur any significant additional expense related to this plan.

Channel Masters
operations are included in the Satellite Communications segment. The company expects to substantially complete its integration activities in fiscal 2007.

A summary of the Channel Master integration reserve activity for the first six months of fiscal 2007 is as follows (in thousands):



|                                            |  |                              |     |                       |   |      |                     |  |                              |   |  |   |    
|------------------------------------------- |  | ---------------------------- | --- | --------------------- | - | ---- | ------------------- |  | ---------------------------- | - |  | - | ---
|Channel Master Integration Reserve Activity |  | ReserveBalanceSept. 30, 2006 |     | Utilizationof Reserve |   |      | Additions toReserve |  | ReserveBalanceMarch 31, 2007
|Facility relocation and other costs         |  | $                            | 607 |                       | $ | (277 | )                   |  | $                            |  |  | $ | 330
|                                            |  |                              |     |                       |   |      |                     |  |                              |   |  |   |    

Skyware Acquisition Integration Reserve

As part of the Skyware acquisition in fiscal 2006, the company accrued an integration reserve for costs to integrate Skywares operations with those of Andrew. This initial cost estimate of $0.7 million was
comprised of a $0.4 million provision for restructuring manufacturing operations and $0.3 million to pay severance benefits to a total of 15 people. The $0.7 million restructuring reserve was treated as a purchase accounting adjustment and recorded
as an increase in the value of goodwill. In the first six months of fiscal 2007, the company paid cash costs of $0.3 million for severance and $0.2 million for lease payments. The lease for the unused facility expires in fiscal 2008. The reserve
balance relates to the Satellite Communications segment. The company does not expect to incur any additional significant expense related to this integration plan.

A summary of the Skyware integration reserve activity for the first six months of fiscal 2007 is as follows (in thousands):



|                                     |  |                              |     |                       |   |      |                     |  |                              |   |  |   |    
|------------------------------------ |  | ---------------------------- | --- | --------------------- | - | ---- | ------------------- |  | ---------------------------- | - |  | - | ---
|Skyware Integration Reserve Activity |  | ReserveBalanceSept. 30, 2006 |     | Utilizationof Reserve |   |      | Additions toReserve |  | ReserveBalanceMarch 31, 2007
|Severance                            |  | $                            | 337 |                       | $ | (296 | )                   |  | $                            |  |  | $ | 41 
|Lease cancellation and other costs   |  |                              | 338 |                       |   | (168 | )                   |  |                              |  |  |   | 170
|Total Skyware Integration Reserve    |  | $                            | 675 |                       | $ | (464 | )                   |  | $                            |  |  | $ | 211

Italian Filter Restructuring Reserve

As part of the outsourcing of filter production to Elcoteq S.A. in the first quarter of fiscal 2007, the company accrued a restructuring reserve of $4.8 million for the reduction in force of approximately 156
employees that will be terminated at facilities in Capriate and Agrate, Italy. The restructuring reserve balance primarily relates to the Base Station Subsystems segment. During the six months ended March 31, 2007, the company paid cash costs
of $1.3 million for severance payments. The company does not expect to incur any additional significant expense related to this integration plan. The company expects to substantially complete its reduction in force in fiscal 2007.



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A summary of the Italy restructuring reserve activity for the first six months of fiscal 2007 is as follows (in
thousands):



|                                              |  |                              |   |                       |   |        |                     |  |                              |       |  |   |      
|--------------------------------------------- |  | ---------------------------- | - | --------------------- | - | ------ | ------------------- |  | ---------------------------- | ----- |  | - | -----
|Italian Filter Restructuring Reserve Activity |  | ReserveBalanceSept. 30, 2006 |   | Utilizationof Reserve |   |        | Additions toReserve |  | ReserveBalanceMarch 31, 2007
|Severance                                     |  | $                            |  |                       | $ | (1,286 | )                   |  | $                            | 4,818 |  | $ | 3,532

Precision Antennas Integration Reserve

As part of the Precision Antennas acquisition in fiscal 2006, the company accrued an integration reserve for costs to integrate Precision Antennas operations with those of Andrew. This initial cost estimate of
$0.4 million was comprised entirely of severance benefits for 71 employees. The $0.4 million restructuring reserve was treated as a purchase accounting adjustment and recorded as an increase in the value of goodwill. In the first six months of
fiscal 2007, the company paid cash costs of less than $0.1 million for severance payments. This reserve balance relates to the Antenna and Cable Products segment. The company is in the process of evaluating any remaining redundant positions
associated with the Precision Antennas acquisitions, but does not expect to incur any additional significant expense related to this integration plan. The company expects to finalize the integration plan in fiscal 2007.

A summary of the Precision Antennas integration reserve activity for the first six months of fiscal 2007 is as follows (in thousands):



|                                                |  |                              |   |                       |   |     |                     |  |                              |     |  |   |    
|----------------------------------------------- |  | ---------------------------- | - | --------------------- | - | --- | ------------------- |  | ---------------------------- | --- |  | - | ---
|Precision Antennas Integration Reserve Activity |  | ReserveBalanceSept. 30, 2006 |   | Utilizationof Reserve |   |     | Additions toReserve |  | ReserveBalanceMarch 31, 2007
|Severance                                       |  | $                            |  |                       | $ | (62 | )                   |  | $                            | 449 |  | $ | 387
|                                                |  |                              |   |                       |   |     |                     |  |                              |     |  |   |    

EMS Wireless Integration Reserve

As part of the EMS Wireless acquisition in fiscal 2007, the company accrued an integration reserve for costs to integrate EMS Wireless operations with those of Andrew. This initial cost estimate of $0.7 million
was to pay severance benefits to 69 employees. The $0.7 million restructuring reserve was treated as a purchase accounting adjustment and recorded as an increase in the value of goodwill. In the first six months of fiscal 2007, the company paid cash
costs of $0.2 million for severance payments. The reserve balance relates primarily to the Antenna and Cable Products segment. The company expects to finalize the integration plan in fiscal 2007.

A summary of the EMS Wireless integration reserve activity for the first six months of fiscal 2007 is as follows (in thousands):



|                                          |  |                              |   |                       |   |      |                     |  |                              |     |  |   |    
|----------------------------------------- |  | ---------------------------- | - | --------------------- | - | ---- | ------------------- |  | ---------------------------- | --- |  | - | ---
|EMS Wireless Integration Reserve Activity |  | ReserveBalanceSept. 30, 2006 |   | Utilizationof Reserve |   |      | Additions toReserve |  | ReserveBalanceMarch 31, 2007
|Severance                                 |  | $                            |  |                       | $ | (222 | )                   |  | $                            | 744 |  | $ | 522
|                                          |  |                              |   |                       |   |      |                     |  |                              |     |  |   |    

NOTE 9. CONTINGENCIES

Warranty Reserve

The company offers warranties on most of its products. The specific terms and conditions of the warranties offered by the
company vary depending upon the product sold. The company estimates the costs that may be incurred under its warranty plans and records a liability in the amount of such estimated costs at the time revenue is recognized. Factors that affect the
companys warranty liability include the number of units sold, the type of products sold, historical and anticipated rates of warranty claims and cost per claim. The company periodically assesses the adequacy of its recorded warranty
liabilities and adjusts the amounts as necessary. The company reports warranty reserves as a current liability included in accrued expenses and other liabilities.



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Changes in the companys warranty reserve during the three and six month periods ended March 31, 2007 and 2006
were as follows:



|                                        |  |                             |        |   |                           |   |        |      |  |   |        |   |  |   |         |  
|--------------------------------------- |  | --------------------------- | ------ | - | ------------------------- | - | ------ | ---- |  | - | ------ | - |  | - | ------- | -
|                                        |  | Three months endedMarch 31, |        |   | Six months endedMarch 31, |  
|(In thousands)                          |  | 2007                        |        |   | 2006                      |   |        | 2007 |  |   | 2006   |  
|Warranty reserve at beginning of period |  | $                           | 22,163 |   |                           | $ | 25,482 |      |  | $ | 17,044 |   |  | $ | 26,754  |  
|Accrual for warranties issued           |  |                             | 3,010  |   |                           |   | 4,364  |      |  |   | 6,566  |   |  |   | 9,509   |  
|Warranty reserve aquired in acquisition |  |                             | (46    | ) |                           |   |       |      |  |   | 1,558  |   |  |   |        |  
|Warranty settlements made               |  |                             | (2,786 | ) |                           |   | (6,822 | )    |  |   | (3,092 | ) |  |   | (12,783 | )
|Warranty expirations and adjustments    |  |                             | (60    | ) |                           |   | (1,711 | )    |  |   | 205    |   |  |   | (2,167  | )
|                                        |  |                             |        |   |                           |   |        |      |  |   |        |   |  |   |         |  
|Warranty reserve at end of period       |  | $                           | 22,281 |   |                           | $ | 21,313 |      |  | $ | 22,281 |   |  | $ | 21,313  |  
|                                        |  |                             |        |   |                           |   |        |      |  |   |        |   |  |   |         |  

In fiscal 2005, the company incurred $16.6 million of costs above normal warranty provisions associated with
abnormally high field failure rates for a specific component supplied by a third-party vendor used in certain base station subsystem product lines. This $16.6 million was comprised of a first quarter fiscal 2005 charge of $19.8 million and a fourth
quarter recovery from a third-party vendor of $3.2 million. The repair and replacement of installed units was completed during the first quarter of fiscal 2007, during which time the company paid $0.1 million for this component failure, which is
included in warranty settlements in the table above.

Legal Proceedings

On October 25, 2005, TruePosition, Inc. filed a complaint in the U.S. District Court for the District of Delaware, alleging the companys potential sale of certain geolocation products to Saudi Telecom will
infringe a TruePosition patent. As relief, the complaint seeks, among other things, injunctive relief and unspecified monetary damages. The company filed its response and counterclaim on December 15, 2005 and is vigorously defending this
litigation. Discovery in this matter is now complete and both parties have moved for summary judgment. A decision on these motions is not expected until the fourth quarter of fiscal 2007. A trial date has been set for September 2007. The parties
have not engaged in meaningful settlement talks to date.

The company is also a party to various other legal proceedings, lawsuits and other claims arising
in the ordinary course of its business. The company does not believe that such other litigation will have a material effect on the companys business, financial position, results of operations or cash flow.

NOTE 10. BUSINESS ACQUISITIONS

On December 1, 2006, the company
acquired EMS Wireless, a division of EMS Technologies, Inc., a major designer and manufacturer of base station antennas based in Norcross, Georgia, for approximately $48.7 million in cash. A preliminary allocation of the purchase price resulted in
$12.9 million of intangible assets and $28.1 million of goodwill. The company has not completed its purchase price allocation, nor has the company finalized the valuation of assets acquired and liabilities assumed. The company anticipates completing
its purchase price allocation by the end of fiscal 2007. This acquisition did not have a material impact on the financial statements.

In the second
quarter of fiscal 2006, the company acquired Skyware, a German manufacturer of electronic products for broadband satellite communications networks, for approximately $8.7 million in cash.

NOTE 11. SALE OF ASSETS

In the six months ended March 31, 2007
and 2006, the company recorded a (gain) loss on the sale of assets of $(0.5) million and $1.4 million respectively. The loss of $1.4 million in the first six months of fiscal 2006 included a $2.0 million write-down of certain assets to fair value
($1.5 million of intangible assets and $0.5 million of inventory and fixed assets), partially offset by a gain of approximately $0.8 million principally from the sale of unimproved land in Denton, Texas.

During the first quarter of fiscal 2007, the company decided to sell its Yantai, China facility and inventory and equipment related to its broadband cable product line
(the Yantai sale). On January 22, 2007, the company announced the Yantai sale to Andes Industries, Inc. (Andes), which was completed on April 2, 2007. Concurrent with the sale, the company exercised the conversion
feature of a note receivable from Andes, obtained in a previous transaction, for a 30% equity ownership interest in Andes. The company recorded a $0.1 million write-down in the first quarter of fiscal 2007 of the assets included in the Yantai sale
to fair value. The company has not completed its analysis of the accounting for the transaction.



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The companys assets and liabilities held for sale as of March 31, 2007, which primarily relate to the Yantai
sale, are as follows:



|                                               |  |               |       
|---------------------------------------------- |  | ------------- | ------
|(In thousands)                                 |  | March 31,2007
|Assets held for sale                           |  |               |       
|Accounts receivable                            |  | $             | 819   
|Inventory                                      |  |               | 8,596 
|Other current assets                           |  |               | 147   
|Property, plant, and equipment, net            |  |               | 8,020 
|                                               |  |               |       
|Total assets held for sale                     |  | $             | 17,582
|                                               |  |               |       
|Liabilities related to assets held for sale    |  |               |       
|Accounts payable and other current liabilities |  | $             | 4,263 
|                                               |  |               |       

NOTE 12. DEBT

Under the terms of the companys $250 million revolving credit facility, the company is subject to various quarterly requirements, including maintaining a ratio of earnings before interest, taxes, depreciation and amortization (EBITDA)
to total debt including letters of credit, maintaining a ratio of EBITDA to senior debt, maintaining a fixed-charge coverage ratio and limiting the amount of assets that the company can dispose of in a fiscal year. These requirements may limit the
amount of borrowing under this credit agreement. The company was in compliance with all of these requirements as of March 31, 2007 and had the ability to utilize the entire $250 million credit facility. The company had $106.3 million in
borrowings under this credit facility at March 31, 2007, compared to $35.2 million at September 30, 2006.

Several of the companys foreign
subsidiaries maintain credit facilities with local banks. At March 31, 2007, the company had $7.0 million of borrowings under credit facilities in India, Italy and Japan compared to $7.2 million at September 30, 2006.

NOTE 13. BENEFIT PLANS

The company has a defined benefit plan that
covers approximately 699 current and former employees of the companys United Kingdom (U.K.) subsidiary. In addition, the company had a frozen defined benefit plan that was assumed from Allen Telecom that covered approximately 1,600
former employees of Allen Telecom (the Allen Plan). In fiscal 2005, the company initiated the process of terminating the Allen Plan. In the fourth quarter of fiscal 2006 the company purchased an annuity contract to fully fund the
remaining obligations and terminated the Allen Plan.



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##### Table of Contents

The components of net periodic expense for these plans, as well as the companys post-retirement medical and life
insurance plans, for the three and six months ended March 31, 2007 and 2006 are as follows:



|                                                 |  |                                  |        |   |                           |   |        |      |  |   |        |   |  |   |        |  
|------------------------------------------------ |  | -------------------------------- | ------ | - | ------------------------- | - | ------ | ---- |  | - | ------ | - |  | - | ------ | -
|                                                 |  | Pension Benefits                 |       
|                                                 |  | Three months endedMarch 31,      |        |   | Six months endedMarch 31, |  
|(In thousands)                                   |  | 2007                             |        |   | 2006                      |   |        | 2007 |  |   | 2006   |  
|Service costs                                    |  | $                                | 640    |   |                           | $ | 453    |      |  | $ | 1,220  |   |  | $ | 900    |  
|Interest costs                                   |  |                                  | 1,367  |   |                           |   | 1,723  |      |  |   | 2,729  |   |  |   | 3,433  |  
|Expected return on plan assets                   |  |                                  | (1,268 | ) |                           |   | (1,392 | )    |  |   | (2,530 | ) |  |   | (2,772 | )
|Amortization of unrecognized prior service costs |  |                                  | 77     |   |                           |   | 80     |      |  |   | 155    |   |  |   | 159    |  
|Amortization of net loss (gain)                  |  |                                  | 168    |   |                           |   | (37    | )    |  |   | 336    |   |  |   | (76    | )
|                                                 |  |                                  |        |   |                           |   |        |      |  |   |        |   |  |   |        |  
|Net periodic expense                             |  | $                                | 984    |   |                           | $ | 827    |      |  | $ | 1,910  |   |  | $ | 1,644  |  
|                                                 |  |                                  |        |   |                           |   |        |      |  |   |        |   |  |   |        |  
|                                                 | 
|                                                 |  | Medical Plans and Other Benefits |       
|                                                 |  | Three months endedMarch 31,      |        |   | Six months endedMarch 31, |  
|(In thousands)                                   |  | 2007                             |        |   | 2006                      |   |        | 2007 |  |   | 2006   |  
|Service costs                                    |  | $                                | 73     |   |                           | $ | 102    |      |  | $ | 146    |   |  | $ | 204    |  
|Interest costs                                   |  |                                  | 216    |   |                           |   | 243    |      |  |   | 432    |   |  |   | 486    |  
|Amortization of unrecognized prior service costs |  |                                  | (228   | ) |                           |   | (135   | )    |  |   | (456   | ) |  |   | (270   | )
|Amortization of net loss                         |  |                                  | 259    |   |                           |   | 337    |      |  |   | 518    |   |  |   | 674    |  
|                                                 |  |                                  |        |   |                           |   |        |      |  |   |        |   |  |   |        |  
|Net periodic expense                             |  | $                                | 320    |   |                           | $ | 547    |      |  | $ | 640    |   |  | $ | 1,094  |  
|                                                 |  |                                  |        |   |                           |   |        |      |  |   |        |   |  |   |        |  

Recent legislation enacted in the U.K. has accelerated the rate of funding required for the U.K. defined benefit
pension plan. In March 2007, the company proposed to the U.K. Pensions Regulator a plan to fund a pension deficit of approximately $29.9 million by March 31, 2010. As a result, the company made additional cash contributions of $8.3 million in
April 2007 in excess of the originally planned funding amount for fiscal 2007. The following schedule shows the timing of the additional cash contributions/payments the company currently intends to make to the plan:



|                    |  |           |       |           |   |           |  |           |       |       |   |       |  |   |       
|------------------- |  | --------- | ----- | --------- | - | --------- |  | --------- | ----- | ----- | - | ----- |  | - | ------
|(In thousands)      |  | April2007 |       | March2008 |   | March2009 |  | March2010 |       | Total
|Contribution amount |  | $         | 8,300 |           | $ | 9,800     |  | $         | 9,800 |       | $ | 2,000 |  | $ | 29,900

NOTE 14. INCOME TAXES

The reported tax rate was 131.2% for the second quarter and 124.4% for the first six months of fiscal 2007. The second quarter reported tax rate included the favorable impact of 19.6% related to tax benefits from intercompany transfer price
adjustments to prior fiscal years and of 8.2% related to tax benefits from an adjustment to China deferred tax assets to reflect changes to Chinas tax laws enacted in the quarter. The reported tax rate was 30.2% for the second quarter and
22.1% for the first six months of fiscal 2006. The reported tax rates for both reporting periods of fiscal 2006 benefited from non-recurring tax adjustments, primarily tax benefits related to the repatriation of foreign earnings.

During the fourth quarter of fiscal 2006, the company concluded that it was appropriate to record an $83.4 million charge to establish a full valuation allowance against
the tax benefits arising from losses in the United States (U.S.). During the fourth quarter of fiscal 2006, the company experienced significant events such as a fee to terminate the ADC merger, an asset impairment charge on capitalized
software, restructuring charges for business unit and leadership team changes, and lower than expected operating income due to delays in obtaining customer acceptance on a geolocation project, which negatively impacted U.S. pretax income and caused
the company to be in the position as of September 30, 2006 of having cumulative losses in recent years with respect to its U.S. operations. In accordance with the relevant accounting guidance, the company did not use future projections of U.S.
pretax income as a material factor in its analysis of the realizability of its net U.S. deferred tax assets. In addition, the company also concluded during the fourth quarter of fiscal 2006, that tax planning strategies to generate future taxable
income through transfers of intellectual property to foreign affiliates were no longer feasible due to uncertainties regarding the ability of foreign affiliates to efficiently utilize and finance the intellectual property. Prior to the fourth
quarter of fiscal 2006, this tax planning strategy was a material factor in the companys assessment of the realizability of its net U.S. deferred tax assets.



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The negative events mentioned above, while non-recurring in nature and/or beneficial to the companys long-term future prospects, were material to the
companys decision to establish a full valuation allowance against its net U.S. deferred tax assets. This is due to the fact that the relevant accounting guidance puts more weight on the negative objective evidence of cumulative losses in
recent years than the positive subjective evidence of future projections of pretax income. The company continually analyzes the realizability of its deferred tax assets, but reasonably expects to continue to record a full valuation allowance on
future U.S. tax benefits until the company sustains an appropriate level of taxable income through improved U.S. operations and tax planning strategies.

The company currently records no tax benefits for losses incurred in certain jurisdictions, primarily the U.S. and Italy, because in the companys judgment it is more likely than not that the future tax benefits from these losses will
not be realized based on all available evidence, positive and negative. The reported income tax provision for the second quarter and the first six months of fiscal 2006 included tax benefits of $5.0 million and $9.9 million, respectively, related to
U.S. losses.

As of March 31, 2007, the company has concluded in its judgment that it is appropriate to continue to maintain valuation allowances
against its deferred tax assets, (primarily net operating loss and tax credit carryforwards) in certain jurisdictions, principally the U.S. and Italy, due to the lack of positive objective evidence of future profitability in these jurisdictions. The
inability to record net tax benefits on the losses in the U.S. and Italy negatively impacts the companys effective tax rate. Conversely, if the company generates pretax income in either the U.S. or Italy in future periods, such pretax income
should result in a lower reported tax rate. During the second quarter of fiscal 2007, the reported tax provision increased by $9.2 million due to losses in the U.S. and Italy for which the company recorded no net tax benefits.

As of March 31, 2007, the company has established valuation allowances of $188.5 million against deferred tax assets which, in its judgment, do not have a more
likely than not probability of being realized based on an evaluation of all evidence, positive and negative, in accordance with prescribed accounting guidance under SFAS 109. The companys valuation allowances have increased $29.1 million since
September 30, 2006, primarily due to an increase of $14.2 million and $6.1 million related to the tax impact of current period pretax losses in the U.S. and Italy, respectively, and an increase of $8.2 million related to U.S. foreign tax credit
and research and development credit carryovers.

NOTE 15. SUPPLEMENTAL CASH FLOW INFORMATION

In accordance with EITF No. 97-10, The Effect of Lessee Involvement in Asset Construction,the company was considered the owner of the new Joliet, Illinois
manufacturing facility during the construction period. The company capitalized, as construction in progress (within the Buildings caption on the balance sheet), $5.3 million in the first quarter of fiscal 2007, with a corresponding
increase to long-term debt, based on the construction projects estimated costs incurred by the landlord during the period. As of December 31, 2006, the company had total capitalized costs of $30.5 million related to the landlords
estimated project costs incurred for the Joliet facility.

During the second quarter, the company executed a sale-leaseback transaction for certain
leasehold improvements it paid for related to the Joliet facility that resulted in the EITF 97-10 capitalization accounting. The company received $9.0 million of cash and reduced its debt obligation by $30.5 million in exchange for approximately
$7.5 million of capitalized leasehold improvements and the $30.5 million value of the building on the companys balance sheet prior to the sale. The cash ($9.0 million) in excess of the value of assets sold ($7.5 million) was recorded as
deferred rent ($1.5 million) which will be amortized as a reduction in rent expense over the life of the lease. The companys only continuing involvement is a normal leaseback, which qualifies as an operating lease.

NOTE 16. GOODWILL

Under the provisions of SFAS No. 142, Goodwill
and Other Intangible Assets, the company tests each reporting unit for possible goodwill impairment on an annual basis or on an interim basis if circumstances dictate. The goodwill allocated to each segment as of March 31, 2007 and
September 30, 2006 is as follows:



|                           |  |               |         |                   |   |        
|-------------------------- |  | ------------- | ------- | ----------------- | - | -------
|(In thousands)             |  | March 31,2007 |         | September 30,2006
|Antenna and Cable Products |  | $             | 226,357 |                   | $ | 196,299
|Satellite Communications   |  |               | 14,371  |                   |   | 14,207 
|Base Station Subsystems    |  |               | 411,782 |                   |   | 411,782
|Network Solutions          |  |               | 117,779 |                   |   | 117,178
|Wireless Innovations       |  |               | 143,147 |                   |   | 143,200
|                           |  |               |         |                   |   |        
|Total Goodwill             |  | $             | 913,436 |                   | $ | 882,666
|                           |  |               |         |                   |   |        



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As a result of the losses generated by Base Station Subsystems in the first six months of fiscal 2007, the company
determined that a potential indicator of impairment had occurred and an interim test for goodwill impairment was required. The company performed step one of the goodwill impairment test, in accordance with paragraph 19 of SFAS 142, on
this reporting unit as of March 31, 2007. Based on this test, the company determined that the fair value of the reporting unit was less than the carrying value of the net assets. The company has not yet completed step two of the
impairment test and, as of the filing of this 10-Q, an impairment loss is not probable nor reasonably estimable.

In addition, as a result of the announced
plan to sell the Satellite Communications reporting unit, the company determined that a potential indicator of impairment had occurred and an interim test for goodwill impairment was required. The company performed step one of the
goodwill impairment test as of March 31, 2007, and determined that the fair value exceeded the carrying value of the net assets, therefore no indication of impairment existed and step two was not required.

NOTE 17. SEGMENTS

The company manages its business in two operating
groups which are comprised of five reportable segments: Antenna and Cable Products, Satellite Communications, Base Station Subsystems, Network Solutions, and Wireless Innovations.

Antenna and Cable Products includes a diverse product offering for the wireless infrastructure market including base station antennas, coaxial cable and connectors and microwave antennas. Satellite Communications is
comprised of the following product lines: direct-to-home (DTH) satellite antennas, earth station antennas and systems (ESA) and high frequency (HF) / radar products. Base Station Subsystems products are integral components of wireless base stations
and include products such as power amplifiers, filters, duplexers and combiners. Network Solutions includes geolocation products, network optimization analysis systems, and engineering and consulting services. Wireless Innovations products are used
to extend and enhance the coverage of wireless networks in areas where signals are difficult to send or receive such as tunnels, subways and airports.

The
following tables show sales and operating income (loss) by reporting segment for the three and six months ended March 31, 2007 and 2006:



|                                 |  |                            |         |                          |   |         |  |      |           |  |   |        
|-------------------------------- |  | -------------------------- | ------- | ------------------------ | - | ------- |  | ---- | --------- |  | - | -------
|                                 |  | Three months endedMarch 31 |         | Six months endedMarch 31
|(In thousands)                   |  | 2007                       |         | 2006                     |   | 2007    |  | 2006
|Sales                            |  |                            |         |                          |   |         |  |      |           |  |   |        
|Antenna and Cable Products       |  |                            |         |                          |   |         |  |      |           |  |   |        
|Antenna and Cable Products1      |  | $                          | 318,982 |                          | $ | 265,711 |  | $    | 658,527   |  | $ | 556,655
|Satellite Communications         |  |                            | 30,693  |                          |   | 31,321  |  |      | 53,783    |  |   | 60,384 
|                                 |  |                            |         |                          |   |         |  |      |           |  |   |        
|Total Antenna and Cable Products |  |                            | 349,675 |                          |   | 297,032 |  |      | 712,310   |  |   | 617,039
|                                 |  |                            |         |                          |   |         |  |      |           |  |   |        
|Wireless Network Solutions       |  |                            |         |                          |   |         |  |      |           |  |   |        
|Base Station Subsystems          |  |                            | 81,333  |                          |   | 119,409 |  |      | 171,208   |  |   | 242,863
|Network Solutions                |  |                            | 25,201  |                          |   | 26,816  |  |      | 44,591    |  |   | 49,236 
|Wireless Innovations             |  |                            | 46,512  |                          |   | 38,396  |  |      | 96,797    |  |   | 87,214 
|                                 |  |                            |         |                          |   |         |  |      |           |  |   |        
|Total Wireless Network Solutions |  |                            | 153,046 |                          |   | 184,621 |  |      | 312,596   |  |   | 379,313
|                                 |  |                            |         |                          |   |         |  |      |           |  |   |        
|Total Consolidated Sales         |  | $                          | 502,721 |                          | $ | 481,653 |  | $    | 1,024,906 |  | $ | 996,352
|                                 |  |                            |         |                          |   |         |  |      |           |  |   |        



|1 | Includes billable freight and distribution services that are not included in the Antenna and Cable
Products results for internal management purposes. The three and six months ended March 31, 2007 includes freight and distribution services of $6,570 and $12,746, respectively. The three and six months ended March 31, 2006 includes freight
and distribution services of $6,652 and $19,597, respectively.
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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|                                           |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|------------------------------------------ |  | -------------------------- | ------- | - | ------------------------ | - | ------- | ---- |  | - | ------- | - |  | - | ------- | -
|                                           |  | Three months endedMarch 31 |         |   | Six months endedMarch 31 |  
|(In thousands)                             |  | 2007                       |         |   | 2006                     |   |         | 2007 |  |   | 2006    |  
|Operating Income (Loss)                    |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Antenna and Cable Products                 |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Antenna and Cable Products2                |  | $                          | 43,921  |   |                          | $ | 29,896  |      |  | $ | 106,109 |   |  | $ | 74,806  |  
|Satellite Communications                   |  |                            | (3,520  | ) |                          |   | (4,093  | )    |  |   | (7,133  | ) |  |   | (6,694  | )
|                                           |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Total Antenna and Cable Products           |  |                            | 40,401  |   |                          |   | 25,803  |      |  |   | 98,976  |   |  |   | 68,112  |  
|                                           |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Wireless Network Solutions                 |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Base Station Subsystems                    |  |                            | (12,266 | ) |                          |   | 3,116   |      |  |   | (32,311 | ) |  |   | 5,967   |  
|Network Solutions                          |  |                            | 3,825   |   |                          |   | 5,676   |      |  |   | 3,279   |   |  |   | 7,868   |  
|Wireless Innovations                       |  |                            | 8,983   |   |                          |   | 6,385   |      |  |   | 22,616  |   |  |   | 15,741  |  
|                                           |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Total Wireless Network Solutions           |  |                            | 542     |   |                          |   | 15,177  |      |  |   | (6,416  | ) |  |   | 29,576  |  
|                                           |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Items not included in segments             |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Unallocated Sales and Administrative Costs |  |                            | (26,930 | ) |                          |   | (28,035 | )    |  |   | (56,918 | ) |  |   | (56,899 | )
|Intangible Amortization                    |  |                            | (5,460  | ) |                          |   | (4,429  | )    |  |   | (11,331 | ) |  |   | (9,548  | )
|Gain (Loss) on the Sale of Assets          |  |                            | 331     |   |                          |   | 72      |      |  |   | 516     |   |  |   | (1,389  | )
|                                           |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Total Consolidated Operating Income        |  | $                          | 8,884   |   |                          | $ | 8,588   |      |  | $ | 24,827  |   |  | $ | 29,852  |  
|                                           |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  



|2 | Includes billable freight and distribution services that are not included in the Antenna and Cable
Products results for internal management purposes. The three and six months ended March 31, 2007 includes operating income related to billable freight and distribution services of $785 and $1,301, respectively. The three and six months ended
March 31, 2006 includes operating income related to freight and distribution services of $1,103 and $2,523, respectively.
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

NOTE
18. SUBSEQUENT EVENT

On May 3, 2007, the company announced its intention to sell the Satellite Communications business. The final terms of any
divestiture transaction are subject to board approval, and there can be no assurance as to the terms, timing, or consummation of any such transaction. Satellite Communications sales were 6% of the second quarter sales and 5% of the year-to-date
sales for fiscal 2007.



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##### Table of Contents

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

Unless otherwise indicated or the context otherwise requires, the terms Andrew, company, we, us and our and other similar terms in this Quarterly Report
on Form 10-Q refer to Andrew Corporation and its subsidiaries.

The following discussion and analysis should be read in conjunction with our
consolidated financial statements and accompanying notes contained herein and our consolidated financial statements and accompanying notes, and managements discussion and analysis of results of operations and financial condition contained in
our Annual Report on Form 10-K for the fiscal year ended September 30, 2006. This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those
anticipated in these forward-looking statements as a result of many factors, including but not limited to those described below under the heading Safe Harbor for Forward-Looking Statements.

Overview

We are engaged in the design, manufacture, and supply of
communications equipment, services, and systems for global communications infrastructure markets. Our products are used in the infrastructure for traditional wireless networks, third generation (3G) technologies, voice, data, video and internet
services, as well as applications for microwave and satellite communications, and other specialized applications. As previously announced, we have restructured our five product businesses into two operating groups, Wireless Network Solutions and
Antenna and Cable Products, in order to reflect the distinct markets these groups serve and to leverage the many opportunities for collaboration and efficiencies in supporting global customers.

Our financial results are influenced by factors in the markets in which we operate and by our ability to successfully execute our business strategy. Marketplace factors
include competition for customers, raw material prices, product and price competition, economic conditions in various geographic regions, foreign currency exchange rates, interest rates, changes in technology, fluctuations in customer demand, patent
and intellectual property issues, litigation results and legal and regulatory developments. We expect that the marketplace environment will remain highly competitive. Our ability to execute our business strategy successfully will require that we
meet a number of challenges, including our ability to (i) accurately forecast sales demand and calibrate manufacturing to such demand, (ii) develop, manufacture and successfully market new and enhanced products and product lines,
(iii) control overhead spending, (iv) successfully integrate acquired businesses, and (v) attract, motivate and retain key personnel to manage our operational, financial and management information systems.

Highlights

Sales were $502.7 million and $1,024.9 million,
respectively, for the three and six months ended March 31, 2007; an increase of 4% and 3%, respectively, from the comparable periods of fiscal 2006. Strong demand for antenna and cable products and the implementation of price increases on cable
products, the Precision Antennas (Precision) and EMS Wireless (EMS) acquisitions, and favorable foreign exchange impact increased sales, partially offset by weaker sales of active products, primarily to original equipment
manufacturer (OEM) customers. Sales for the three and six month periods increased in Asia Pacific and Europe, Middle East and Africa (EMEA) geographic markets, partially offset by a decrease in the North American market.
Sales to two specific North American customers decreased approximately $130 million for the six months ended March 31, 2007, compared to the prior year. Historically our strongest sales periods have been the third and fourth fiscal quarters due
primarily to the wireless infrastructure construction season in the northern hemisphere. We remain cautious about our sales prospects in our North American business, if we do not see meaningful sequential improvement from the two customers with whom
we have had significant weakness for the first six months of fiscal 2007.

Gross margin was 20.8% for the second quarter of fiscal 2007 compared to 20.6%
in the second quarter of fiscal 2006. On a year-to-date basis gross margin was 22.1% compared to 21.7% for the first half of fiscal 2006. Higher antenna and cable sales and margins and better product mix were partially offset by relocation and
start-up costs incurred during the quarter for our new cable manufacturing facility in Joliet, Illinois and by lower base station subsystem sales and margins.

Income before income tax was $6.3 million and $18.5 million, respectively, for the three and six months ended March 31, 2007, compared to $5.1 million and $23.6 million, respectively, for the three and six months ended March 31,
2006.

Our income tax rate was 131.2% and 124.4%%, respectively, for the second quarter of fiscal 2007 and for the first half of fiscal 2007, compared to
30.2% and 22.1% for the same periods of fiscal 2006. The increase in the effective tax rate was primarily due to losses in the United States (U.S.) and Italy for which no income tax benefit was recorded. We currently anticipate our
effective tax rate for the full year to be in the range of 44% to 46%.



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##### Table of Contents

Net loss was $2.0 million for the second quarter of fiscal 2007 and $4.5 million year-to-date, compared to net income of
$3.6 million for the second quarter of fiscal 2006 and $18.4 million for the first half of fiscal 2006.

We continue to grow through strategic
acquisitions. In the first six months of fiscal 2007, we acquired EMS, a major designer and manufacturer of base station antennas for cellular networks in North America. We believe the acquisition of EMS will strengthen our relationships with key
customers and extend our leadership position in wireless subsystems.

We continue to focus on our core wireless infrastructure business. As a result, we
completed the sale of our broadband cable product line to Andes Industries, Inc. on April 2, 2007, and on May 3, 2007, we announced our intention to sell our Satellite Communications business. The final terms of any divestiture transaction
are subject to board approval, and there can be no assurance as to the terms, timing, or consummation of any such transaction.

As a result of the losses
generated by Base Station Subsystems in the first six months of fiscal 2007, we determined that a potential indicator of impairment had occurred. We expect to complete step two of our impairment analysis in the next 90 days, which could
result in a portion of the $412 million of Base Station Subsystems goodwill being written off as a non-cash charge to earnings. For additional information about our accounting for goodwill see Critical Accounting Policies and
Item 1A. Risk Factors

Results of Operations

Sales by operating segment for the three and six months ended March 31, 2007 and 2006 were as follows:



|                                 |  |                             |     |          |   |     |                           |     |          |  |   |       |  |   |     |  |     |   
|-------------------------------- |  | --------------------------- | --- | -------- | - | --- | ------------------------- | --- | -------- |  | - | ----- |  | - | --- |  | --- | --
|                                 |  | Three months endedMarch 31, |     | % Change |   |     | Six months endedMarch 31, |     | % Change | 
|(In millions)                    |  | 2007                        |     | 2006     |   |     | 2007                      |     | 2006     | 
|Sales                            |  |                             |     |          |   |     |                           |     |          |  |   |       |  |   |     |  |     |   
|Antenna and Cable Products       |  |                             |     |          |   |     |                           |     |          |  |   |       |  |   |     |  |     |   
|Antenna and Cable Products       |  | $                           | 319 |          | $ | 266 |                           | 20  | %        |  | $ | 658   |  | $ | 557 |  | 18  | % 
|Satellite Communications         |  |                             | 31  |          |   | 31  |                           | 0   | %        |  |   | 54    |  |   | 60  |  | (10 | )%
|                                 |  |                             |     |          |   |     |                           |     |          |  |   |       |  |   |     |  |     |   
|Total Antenna and Cable Products |  |                             | 350 |          |   | 297 |                           | 18  | %        |  |   | 712   |  |   | 617 |  | 15  | % 
|                                 |  |                             |     |          |   |     |                           |     |          |  |   |       |  |   |     |  |     |   
|Wireless Network Solutions       |  |                             |     |          |   |     |                           |     |          |  |   |       |  |   |     |  |     |   
|Base Station Subsystems          |  |                             | 81  |          |   | 120 |                           | (33 | )%       |  |   | 171   |  |   | 243 |  | (30 | )%
|Network Solutions                |  |                             | 25  |          |   | 27  |                           | (7  | )%       |  |   | 45    |  |   | 49  |  | (8  | )%
|Wireless Innovations             |  |                             | 47  |          |   | 38  |                           | 24  | %        |  |   | 97    |  |   | 87  |  | 11  | % 
|                                 |  |                             |     |          |   |     |                           |     |          |  |   |       |  |   |     |  |     |   
|Total Wireless Network Solutions |  |                             | 153 |          |   | 185 |                           | (17 | )%       |  |   | 313   |  |   | 379 |  | (17 | )%
|                                 |  |                             |     |          |   |     |                           |     |          |  |   |       |  |   |     |  |     |   
|Total Sales                      |  | $                           | 503 |          | $ | 482 |                           | 4   | %        |  | $ | 1,025 |  | $ | 996 |  | 3   | % 
|                                 |  |                             |     |          |   |     |                           |     |          |  |   |       |  |   |     |  |     |   

Antenna and Cable Products sales increased 20% and 18%, respectively, in the three and six months
ended March 31, 2007 compared to the same periods of fiscal 2006. The increase in sales was due primarily to higher sales of coaxial cable, microwave systems and base station antennas. Coaxial cable sales increased primarily from price
increases and network expansion in EMEA and Asia Pacific regions, which continue to experience increased network expansion and upgrades. Microwave systems and base station antenna sales also increased due to the acquisitions of Precision in April
2006 and EMS in December 2006 and network expansion in the EMEA and Asia Pacific regions. The Precision and EMS acquisitions increased sales in the three and six months ended March 31, 2007, $20.8 million and $39.1 million, respectively,.

Satellite Communications sales for the quarter were consistent with the second quarter of fiscal 2006 and decreased 10% on a year-to-date
basis. Second quarter fiscal 2007 sales declines in consumer direct-to-home satellite products were partially offset by increases in earth station electronics and VSAT antenna sales. Sales for the first half of fiscal 2007 decreased primarily due to
the first quarter fiscal 2006 completion of a substantial earth station antenna gateway contract.

Base Station Subsystems sales decreased
33% for the second quarter and 30% on a year-to-date basis compared to the same periods in the prior year primarily due to reduced sales of filters and power amplifiers to certain North American and European OEM customers and North American
operators. The market for our base station components declined in the first half of fiscal 2007 as a result of reduced demand from certain North American and European OEM customers and North American operators, who were in the process of
consolidating during the first half of fiscal 2007.

Network Solutions sales declined 7% in the second quarter of fiscal 2007 and 8% on a
year-to-date basis compared to the same periods of fiscal 2006, primarily due to a decline in E-911 geolocation equipment sales in North America. In the second quarter of fiscal 2007, the decline in North American sales was partially offset by the
completion of the first phase of a Middle East geolocation project. In previous years, Network Solutions sales have mainly resulted from E-911 regulatory requirements in the U.S. Sales have declined as major U.S. operators have completed
upgrading their networks to meet these E-911 requirements. We have recently experienced, and expect to see further international sales growth of geolocation equipment.



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Wireless Innovations sales increased 24% and 11%, respectively, in the three and six months ended
March 31, 2007, compared to the same periods of fiscal 2006. The increased sales were primarily due to strong repeater sales in North America and the Asia Pacific region, partially offset by lower sales of radiating cables. Repeater sales have
increased as operators continue to improve signal coverage in densely populated urban areas and buildings.

Our sales by region for the three and six
months ended March 31, 2007 and 2006 were as follows:



|                                   |  |                             |     |          |   |     |                           |     |          |  |   |       |  |   |     |  |     |   
|---------------------------------- |  | --------------------------- | --- | -------- | - | --- | ------------------------- | --- | -------- |  | - | ----- |  | - | --- |  | --- | --
|                                   |  | Three months endedMarch 31, |     | % Change |   |     | Six months endedMarch 31, |     | % Change | 
|(In millions)                      |  | 2007                        |     | 2006     |   |     | 2007                      |     | 2006     | 
|Sales                              |  |                             |     |          |   |     |                           |     |          |  |   |       |  |   |     |  |     |   
|Americas                           |  | $                           | 222 |          | $ | 264 |                           | (16 | )%       |  | $ | 471   |  | $ | 560 |  | (16 | )%
|Europe, Middle East, Africa (EMEA) |  |                             | 189 |          |   | 155 |                           | 22  | %        |  |   | 360   |  |   | 308 |  | 17  | % 
|Asia Pacific                       |  |                             | 92  |          |   | 63  |                           | 46  | %        |  |   | 194   |  |   | 128 |  | 52  | % 
|                                   |  |                             |     |          |   |     |                           |     |          |  |   |       |  |   |     |  |     |   
|Total                              |  | $                           | 503 |          | $ | 482 |                           | 4   | %        |  | $ | 1,025 |  | $ | 996 |  | 3   | % 
|                                   |  |                             |     |          |   |     |                           |     |          |  |   |       |  |   |     |  |     |   

Americas sales decreased 16% in the quarter and year-to-date compared to the prior year, due mainly
to decreased base station component sales in North America, which reflected a reduction in spending by certain North American operators and OEM customers that are in the process of consolidating. Second quarter and year-to-date sales also decreased
due to reduced E-911 geolocation equipment sales. Sales to two specific North American customers decreased approximately $130 million for the six months ended March 31, 2007, compared to the prior year. This was partially offset by sales to
other North American customers.

Europe, Middle East, Africa (EMEA) sales increased 22% and 17%, respectively, in the three and six months
ended March 31, 2007, compared to the same period of fiscal 2006, due mainly to stronger cable sales resulting from network expansion, higher antenna sales primarily resulting from the Precision acquisition in April 2006 ($14 million and $31
million, respectively for the three and six months ended March 31, 2007), the completion of the first phase of a large Middle East geolocation project, and an approximate $10 million favorable impact of foreign exchange rate movement during the
second quarter. These increases were partially offset by decreased base station component sales due to weak demand from certain OEM customers who are in the process of consolidating.

Asia Pacific sales increased 46% and 52%, respectively, in the three and six months ended March 31, 2007, compared to the same period of fiscal 2006. The increase was due to growth in Antenna and
Cable Products supporting network expansion in India and China and certain OEM customers investing in Base Station Subsystem and Wireless Innovations products to support network expansion in China and India.

Our top 25 customers represented 70% of sales in the second quarter of fiscal 2007, compared to 67% in the second quarter of fiscal 2006. On a year-to-date basis our top
25 customers represented 68% of sales, consistent with the prior year. Major OEMs accounted for 41% of sales in the second quarter of fiscal 2007, compared to 38% in the second quarter of fiscal 2006. Ericsson was the largest customer for the second
quarter of fiscal 2007 at 11% of sales. Alcatel-Lucent, Sprint-Nextel, Siemens and Nokia each represented more than 5% of total sales for the second quarter of fiscal 2007.

Gross profit margin was 20.8% in the second quarter of fiscal 2007, compared with 20.6% in the second quarter of fiscal 2006. On a year-to-date basis gross profit was 22.1% compared with 21.7% for fiscal
2006. For both the second quarter and year-to-date results, higher Antenna and Cable Products margins were reduced by lower Base Station Subsystems and Network Solutions margins. Antenna and Cable Products margins were slightly higher than the
prior year quarter as the impact of higher volume and prices was offset by approximately $8.0 million of relocation and startup costs incurred during the second quarter associated with the move into our new cable manufacturing facility in Joliet,
Illinois. We expect to incur approximately $8.0 million of additional relocation and start-up expenses during the third quarter of fiscal 2007. Our gross margin for Antenna and Cable Products is impacted by the price of copper. The spot price of
copper has increased significantly during the months of March and April of 2007. Our ability to maintain gross margin is dependent on our ability to adjust our selling prices for changes in copper costs. Base Station Subsystems margins for the
second quarter were lower than the prior year quarter primarily due to lower sales volume, less-profitable product mix and higher filter inventory provisions. Network Solutions margins decreased as higher-margin U.S. geolocation sales in fiscal 2006
are partially replaced with less profitable international geolocation sales in fiscal 2007.



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Research and development expenses were $27.0 million, or 5.4% of sales, in the second quarter of fiscal
2007, compared to $26.8 million, or 5.6% of sales, in the second quarter of fiscal 2006. On a year-to-date basis, research and development expenses were $54.3 million, or 5.3% of sales, in fiscal 2007 compared to $54.8 million, or 5.5% of sales, in
fiscal 2006. The year-to-date decrease in research and development expenses is primarily the result of Base Station Subsystems headcount reductions, which were partially offset by higher Satellite Communications research and development expenses
related to new product development, the inclusion of Skyware Radio Systems GmbH (Skyware) which was acquired in February 2006 and increased spending for Wireless Innovations.

Sales and administrative expenseswere $62.4 million, or 12.4% of sales, in the second quarter of fiscal 2007, compared to $58.3 million, or 12.1% of sales, in the second quarter of fiscal 2006. For the
six months ended March 31, 2007, sales and administrative expenses were $128.5 million, or 12.5% of sales, compared to $120.0 million, or 12.0% of sales, in the same period of fiscal 2006. Sales and administrative expenses were higher primarily
due to an increase in sales commissions and selling expenses associated with supporting sales growth in emerging markets, developing direct-to-carrier channels and increased legal expenses related to intellectual property litigation. Sales and
administrative expenses for the three and six months ended March 31, 2007 included incremental costs of $0.9 million and $1.5 million, respectively, as a result of the acquisitions of Precision and EMS.

Intangible amortizationwas $5.5 million and $11.3 million, respectively, in the three and six months ended March 31, 2007, compared to $4.4 million
and $9.5 million, respectively, in the comparable periods of fiscal 2006. Included in the second quarter of fiscal 2007 amortization is $0.9 million related to the intangible assets acquired in the EMS acquisition in December 2006. The year-to-date
amount for fiscal 2007 also includes an impairment charge of $1.2 million as a result of a decision in the first quarter of fiscal 2007 to discontinue use of certain technology acquired with Quasar Microwave Technology Ltd. It is anticipated that
intangible amortization will be approximately $18.4 million in fiscal 2007, compared to $19.0 million in fiscal 2006. The reduction in intangible amortization, excluding the recent acquisitions and impairment charge, compared to the prior year is
due mainly to a reduction of amortization expense associated with intangibles acquired with Allen Telecom in fiscal 2003 and Celiant in fiscal 2002.

Restructuring expense was $1.4 million in the second quarter of fiscal 2007 and $7.9 million on a year-to-date basis, compared to $1.4 million and $0.9 million, respectively, in the second quarter and year-to-date for fiscal
2006. The restructuring charges in the second quarter of fiscal 2007 were primarily due to headcount reductions related to cost cutting initiatives in the U.S. and headcount reductions in Nogales, Mexico due to the outsourcing of our filter
manufacturing to Elcoteq S.A. The fiscal 2007 year-to-date restructuring charges were primarily the result of accruing severance costs related to the downsizing of our Italian filter operations in Base Station Subsystems and other headcount
reductions. We do not expect to incur any significant additional expense related to the Italian filter restructuring plan. We anticipate that the outsourcing of production to Elcoteq S.A. and reduced overhead costs associated with the headcount
reductions will increase the profitability of Base Station Subsystems. We currently estimate the annual benefit from these cost savings to be approximately $2.0 million, which we will begin to realize in the second half of fiscal 2007.

Additionally, in the second quarter of fiscal 2007, we recorded integration reserves for the Precision and EMS acquisitions of $0.4 million and $0.7 million,
respectively, which increased the goodwill associated with the acquisitions. We expect the annual benefit from these costs savings to be approximately $4 million to $5 million, which we will begin to realize in the second half of fiscal 2007.



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##### Table of Contents

Operating income (loss) by operating segment for the three and six months ended March 31, 2007 and
2006 is as follows:



|                                           |  |                             |     |   |          |   |     |                           |      |     |          |      |   |     |   |  |   |     |   |  |     |   
|------------------------------------------ |  | --------------------------- | --- | - | -------- | - | --- | ------------------------- | ---- | --- | -------- | ---- | - | --- | - |  | - | --- | - |  | --- | --
|                                           |  | Three months endedMarch 31, |     |   | % Change |   |     | Six months endedMarch 31, |      |     | % Change |     
|(In millions)                              |  | 2007                        |     |   | 2006     |   |     |                           | 2007 |     |          | 2006 |   |    
|Operating Income (Loss)                    |  |                             |     |   |          |   |     |                           |      |     |          |      |   |     |   |  |   |     |   |  |     |   
|Antenna and Cable Products                 |  |                             |     |   |          |   |     |                           |      |     |          |      |   |     |   |  |   |     |   |  |     |   
|Antenna and Cable Products                 |  | $                           | 44  |   |          | $ | 30  |                           |      | 47  | %        |      | $ | 106 |   |  | $ | 75  |   |  | 41  | % 
|Satellite Communications                   |  |                             | (4  | ) |          |   | (4  | )                         |      | 0   | %        |      |   | (7  | ) |  |   | (7  | ) |  | 0   | % 
|                                           |  |                             |     |   |          |   |     |                           |      |     |          |      |   |     |   |  |   |     |   |  |     |   
|Total Antenna and Cable Products           |  |                             | 40  |   |          |   | 26  |                           |      | 54  | %        |      |   | 99  |   |  |   | 68  |   |  | 46  | % 
|                                           |  |                             |     |   |          |   |     |                           |      |     |          |      |   |     |   |  |   |     |   |  |     |   
|Wireless Network Solutions                 |  |                             |     |   |          |   |     |                           |      |     |          |      |   |     |   |  |   |     |   |  |     |   
|Base Station Subsystems                    |  |                             | (12 | ) |          |   | 3   |                           |      | NM  |          |      |   | (32 | ) |  |   | 6   |   |  | NM  |   
|Network Solutions                          |  |                             | 4   |   |          |   | 6   |                           |      | (33 | )%       |      |   | 3   |   |  |   | 8   |   |  | (63 | )%
|Wireless Innovations                       |  |                             | 9   |   |          |   | 6   |                           |      | 50  | %        |      |   | 23  |   |  |   | 16  |   |  | 44  | % 
|                                           |  |                             |     |   |          |   |     |                           |      |     |          |      |   |     |   |  |   |     |   |  |     |   
|Total Wireless Network Solutions           |  |                             | 1   |   |          |   | 15  |                           |      | NM  |          |      |   | (6  | ) |  |   | 30  |   |  | NM  |   
|                                           |  |                             |     |   |          |   |     |                           |      |     |          |      |   |     |   |  |   |     |   |  |     |   
|Items not included in segments             |  |                             |     |   |          |   |     |                           |      |     |          |      |   |     |   |  |   |     |   |  |     |   
|Unallocated Sales and Administrative Costs |  |                             | (27 | ) |          |   | (28 | )                         |      | (4  | )%       |      |   | (57 | ) |  |   | (57 | ) |  | 0   | % 
|Intangible Amortization                    |  |                             | (5  | ) |          |   | (4  | )                         |      | 25  | %        |      |   | (11 | ) |  |   | (10 | ) |  | 10  | % 
|Gain (Loss) on the Sale of Assets          |  |                             |    |   |          |   |    |                           |      | NM  |          |      |   |    |   |  |   | (1  | ) |  | NM  |   
|                                           |  |                             |     |   |          |   |     |                           |      |     |          |      |   |     |   |  |   |     |   |  |     |   
|Total Consolidated Operating Income        |  | $                           | 9   |   |          | $ | 9   |                           |      | 0   | %        |      | $ | 25  |   |  | $ | 30  |   |  | (17 | )%
|                                           |  |                             |     |   |          |   |     |                           |      |     |          |      |   |     |   |  |   |     |   |  |     |   

NM - Not Meaningful

Antenna and Cable Products operating income increased 47% and 41%, respectively, for the three and six months ended March 31, 2007 compared to the same periods of fiscal 2006. The increase was primarily as a result of increased coaxial
cable and base station antenna sales, a benefit from price increases on certain cable products and the acquisitions of Precision and EMS, partially offset by approximately $8.0 million of relocation and startup costs incurred during the second
quarter associated with the move into our new cable manufacturing facility in Joliet, Illinois, and higher commodity costs.

Satellite Communications
operating loss was $4 million and $7 million, respectively, for the second quarter and year-to-date fiscal 2007, consistent with the same periods of fiscal 2006. Higher margins were offset by higher research and development expenses associated with
the acquisition of Skyware in February 2006. Additionally, the year-to-date Satellite Communications operating loss was impacted by lower sales volumes resulting from our planned reduced involvement in certain consumer broadband satellite programs.

For the three and six months ended March 31, 2007, Base Station Subsystems generated operating losses of $12 million and $32 million, respectively,
compared to operating income of $3 million and $6 million, respectively, for the same periods of fiscal 2006. The operating losses primarily resulted from lower base station component sales and margins due to decreased demand from certain OEM and
operator customers that were in the process of consolidating during the quarter. Fixed costs on lower volume as well as higher inventory provisions for the filter supply chain transition also contributed to the operating losses for the quarter and
year-to-date periods. Also included in the year-to-date operating loss for fiscal 2007 is $5.6 million of restructuring expense, primarily attributable to severance costs associated with the previously announced headcount reduction in Italy for the
filter product line. We also recorded a charge of $1.5 million during the first quarter of fiscal 2007 for a product quality matter involving a specific OEM customer. During the first half of fiscal 2007, we made continued progress towards
relocating our high-volume filter product line manufacturing to Elcoteq S.A. and expect this transition to be completed during the second half of fiscal 2007.

Network Solutions generated operating income of $4 million in the second quarter of fiscal 2007, and $3 million year-to-date compared to operating income of $6 million and $8 million, respectively, in the second quarter and year-to-date for
fiscal 2006. The decrease was primarily due to a decline in E-911 geolocation equipment sales in North America, partially offset by an increase in less profitable geolocation sales in the EMEA region.

Wireless Innovations operating income increased 50% and 44%, respectively, for the three and six months ended March 31, 2007 compared to the same period in the
prior year, due to sales growth, improved repeater margins resulting from cost reduction initiatives and better revenue mix.



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Other expense was $2.6 million and $6.3 million for the quarter and year-to-date periods ended
March 31, 2007 as compared to $3.5 million and $6.2 million for the same period in fiscal 2006. Interest expense for the three and six months ended March 31, 2007 was $4.4 million and $8.5 million, respectively, compared to
$4.1 million and $7.9 million, respectively, in the same periods of fiscal 2006. Interest income for the quarter was consistent with the prior year and increased $0.4 million to $2.6 million for the first half of fiscal 2007, compared to the same
periods of fiscal 2006. Other income was $0.5 million in the second quarter of fiscal 2007, primarily from the recognition of foreign government investment incentives offset by foreign exchange losses; this compared to other expense of $0.7 million
in the second quarter of fiscal 2006 which was primarily due to foreign exchange gains and losses. On a year-to-date basis, other expense was basically unchanged year over year, and is primarily attributable to foreign exchange gains and losses.

Income Taxes. The reported tax rate was 131.2% for the second quarter and 124.4% for the first six months of fiscal 2007. The high
reported tax rate for both periods of fiscal 2007 was primarily due to a concentration of pretax losses in jurisdictions in which the company could not record tax benefits, such as the U.S. and Italy. The second quarter reported tax rate included
the favorable impact of 19.6% related to tax benefits from intercompany transfer price adjustments to prior fiscal years and of 8.2% related to tax benefits from an adjustment to China deferred tax assets to reflect changes to Chinas tax laws
enacted in the quarter. The reported tax rate was 30.2% for the second quarter and 22.1% for the first six months of fiscal 2006. The reported tax rates for both reporting periods of fiscal 2006 benefited from non-recurring tax adjustments,
primarily tax benefits related to the repatriation of foreign earnings.

During the fourth quarter of fiscal 2006, the company concluded that it was
appropriate to establish full valuation allowances against its U.S. deferred tax assets due to the lack of positive objective evidence of future taxable income in the U.S. The reported income tax provision for the second quarter and the first six
months of fiscal 2006 included tax benefits of $5.0 million and $9.9 million, respectively, related to U.S. losses during those periods.

The company
expects the effective tax rate for 2007 to be in the range of 44% to 46%. This rate could be materially affected by the level of pretax income or loss generated in the U.S., the earnings mix in foreign countries where the statutory rates are higher
or lower than the federal statutory rate, or by changes in tax laws. The company is subject to examination of its tax filings by the Internal Revenue Service and other taxing authorities. The company regularly reviews and assesses the potential
outcome of these examinations to determine the adequacy of its tax provisions.

Liquidity and Capital Resources

Cash and cash equivalents were $127.2 million at March 31, 2007, compared to $169.6 million at September 30, 2006. Working capital at March 31, 2007 was
$567.5 million, compared to $585.1 million at September 30, 2006. Management believes that our strong working capital position, ability to generate cash flow from operations, and ability to borrow under our revolving credit agreement will allow
us to meet our normal operating cash flow needs for the foreseeable future.

We maintain a $250 million revolving credit facility with a group of lenders
that expires in September 2010. Under the terms of this facility, we are subject to various quarterly covenant requirements, including maintaining a ratio of earnings before interest, taxes, depreciation and amortization (EBITDA) to total debt
including letters of credit, maintaining a ratio of EBITDA to senior debt, maintaining a fixed charge coverage ratio and limiting the amount of assets that Andrew can dispose of in a fiscal year. These requirements may limit the amount of borrowing
under this credit agreement. As of March 31, 2007, we were in compliance with all of these requirements and have the ability to utilize the entire $250 million of the credit facility. The company had $106.3 million in borrowings under this
credit facility at March 31, 2007, compared to $35.2 million at September 30, 2006.

Several of the companys foreign subsidiaries maintain
credit facilities with local banks. At March 31, 2007, the company had $7.0 million of borrowings under credit facilities in India, Italy and Japan compared to $7.2 million at September 30, 2006.



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Cash Flows.The following table sets forth certain information from our consolidated statements of cash flows for
the six months ended March 31, 2007 and 2006:



|                                                                                                        |  |                          |     |   |      |   |     |        |  |   |     |  
|------------------------------------------------------------------------------------------------------- |  | ------------------------ | --- | - | ---- | - | --- | ------ |  | - | --- | -
|                                                                                                        |  | Six MonthsEndedMarch 31, |     |   |      |  
|(In millions)                                                                                           |  | 2007                     |     |   | 2006 |   |     | Change | 
|Net income (loss)                                                                                       |  | $                        | (5  | ) |      | $ | 18  |        |  | $ | (23 | )
|Non-cash charges for depreciation, amortization, asset sale gains/(losses) and stock-based compensation |  |                          | 45  |   |      |   | 41  |        |  |   | 4   |  
|Restructuring costs                                                                                     |  |                          | 2   |   |      |   | (2  | )      |  |   | 4   |  
|Change in operating assets and liabilities                                                              |  |                          | (47 | ) |      |   | (46 | )      |  |   | (1  | )
|                                                                                                        |  |                          |     |   |      |   |     |        |  |   |     |  
|Net cash (used for) from operations                                                                     |  |                          | (5  | ) |      |   | 11  |        |  |   | (16 | )
|Net cash used for investing activities                                                                  |  |                          | (66 | ) |      |   | (42 | )      |  |   | (24 | )
|Net cash from (used for) financing activities                                                           |  |                          | 23  |   |      |   | (4  | )      |  |   | 27  |  
|Effect of exchange rates changes on cash                                                                |  |                          | 5   |   |      |   | 1   |        |  |   | 4   |  
|                                                                                                        |  |                          |     |   |      |   |     |        |  |   |     |  
|Decrease in cash for the period                                                                         |  | $                        | (43 | ) |      | $ | (34 | )      |  | $ | (9  | )
|                                                                                                        |  |                          |     |   |      |   |     |        |  |   |     |  

Operating Activities. In the first six months of fiscal 2007, we utilized $4.7 million of cash from
operations, compared to generating $11.6 million of cash in the first six months of fiscal 2006. The decrease in cash from operations was primarily due to a net loss for the six months ended March 31, 2007. In the first six months of fiscal
2007, accounts receivable decreased from $557.8 million at September 30, 2006 to $512.1 million at March 31, 2006, due to lower sales in the second quarter of fiscal 2007 compared to the fourth quarter of fiscal 2006. Days sales
outstanding (DSO) increased to 90 days compared to 89 days as of December 31, 2006 and 80 days as of September 30, 2006, due primarily to a higher percentage of fiscal 2007 sales from the Asia Pacific and EMEA regions where collection
terms are longer than in the U.S. Inventory increased from $388.3 million at September 30, 2006 to $398.0 million at March 31, 2007, due primarily to the acquisition of EMS Wireless, and the build-up of cable inventory in anticipation of
the transition of production from Orland Park, Illinois to the new Joliet, Illinois facility during our second and third quarters.

Recent legislation
enacted in the U.K. has accelerated the rate of funding required for the U.K. defined benefit pension plan. In March of 2007, the company proposed to the U.K. Pensions Regulator a plan to fund a pension deficit of approximately $29.9 million by
March 31, 2010. As a result, the company made additional cash contributions of $8.3 million in April of 2007 in excess of the originally planned funding amount for fiscal 2007. The following schedule shows the timing of the additional
contributions/payments the company currently intends to make to the plan:



|                    |  |            |     |            |   |            |  |            |     |       |   |     |  |   |     
|------------------- |  | ---------- | --- | ---------- | - | ---------- |  | ---------- | --- | ----- | - | --- |  | - | ----
|(In millions)       |  | April 2007 |     | March 2008 |   | March 2009 |  | March 2010 |     | Total
|Contribution amount |  | $          | 8.3 |            | $ | 9.8        |  | $          | 9.8 |       | $ | 2.0 |  | $ | 29.9

Investing Activities.Capital expenditures were $33.2 million in the first six months of fiscal 2007,
consistent with the first six months of fiscal 2006, primarily due to construction costs for the new cable manufacturing facilities in Goa, India, which opened during the first quarter of fiscal 2007, and in Joliet, Illinois, into which transition
is expected to be completed in the third quarter of fiscal 2007. In the first six months of fiscal 2007, we paid $48.7 million for the assets of EMS Wireless, net of cash received.

During the second quarter the company executed a sale-leaseback transaction for the Joliet facility. As part of that transaction, the company received $9.0 million in exchange for approximately $7.5 million of
previously purchased and capitalized leasehold improvements. The company recorded the $1.5 million of cash in excess of assets sold as deferred rent which will be amortized as a reduction in rent expense over the life of the lease.

Financing Activities. We reduced our net long-term debt by $26.3 million in the first six months of fiscal 2007, primarily as a result of retiring certain senior
notes that were due in fiscal 2008. Short-term notes payable increased by $69.9 million, primarily to fund the acquisition of EMS Wireless, fund working capital requirements, and repurchase 2.0 million shares of our common stock for $20.4
million. We have approximately 5.4 million shares remaining under a previously authorized stock repurchase program.



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##### Table of Contents

On May 3, 2007, we announced our intention to sell our Satellite Communications business. The final terms of any
divestiture transaction are subject to board approval, and there can be no assurance as to the terms, timing, or consummation of any such transaction.

As
part of our future growth strategy, we may acquire other companies in the same or complementary lines of business and pursue other business ventures. The timing and size of any new business ventures or acquisitions we complete may impact our cash
requirements.

Contractual Obligations and Commercial Commitments

We have contractual obligations and commercial commitments as described in Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations  Contractual Obligations and
Commercial Commitments of our Annual Report on Form 10-K filed with the Securities and Exchange Commission for the year ended September 30, 2006. In addition, we have obligations under open purchase orders and the long-term liabilities
reflected in our consolidated balance sheet. Except as described herein, there have been no material changes in our contractual obligations and commercial commitments since September 30, 2006 arising outside of the ordinary course of business.



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##### Table of Contents

CRITICAL ACCOUNTING POLICIES

We use certain critical accounting policies as described in Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations  Critical Accounting Policies of our Annual Report on Form 10-K
for the fiscal year ended September 30, 2006 filed with the Securities and Exchange Commission. There have been no material changes in our critical accounting policies during the six months ended March 31, 2007. The following is providing
additional disclosure related to our critical accounting policies:

Goodwill

We perform an annual impairment test of goodwill on the first day of our fiscal fourth quarter, July 1. In fiscal 2006, we managed our business as five operating segments. In accordance with SFAS No. 142,
Goodwill and Other Intangible Assets, we determined these operating segments were our reporting units. We tested each reporting unit for possible goodwill impairment by comparing each reporting units net book value to fair value. As
each reporting units fair value was greater than its net book value and no other impairment indicators existed, further impairment tests were not deemed necessary and no impairment loss was recorded. The process of evaluating the potential
impairment of goodwill is subjective and requires significant judgment. In estimating the fair value of the reporting units for the purpose of our annual or periodic analyses, we make estimates and judgments about the future cash flows of these
businesses as well as fair value on a comparable business basis.

We use both the Discounted Cash Flow (DCF) method and the Comparable Business
(CB) method for determining fair value of our reporting units. The CB method is a valuation technique by which the fair value of the equity of a business is estimated by comparing it to publicly traded companies in similar lines of
business. The multiples of key metrics of other similar companies (revenue and/or EBITDA) are generally applied to the historical or projected results of the company being valued to determine its fair market value. The DCF method considers the
future cash flow projections of the company and the value of those projections discounted to the present day. While the use of historical results and future projections can result in different valuations for a company, it is a generally accepted
valuation practice to apply more than one valuation technique to establish a range of values for a business. Since each technique relies on different inputs and assumptions, it is unlikely that each technique would yield the same results. However,
it is expected that the different techniques would establish a reasonable range.

On an annual basis, we assess the current business environment, changes
in the operations of each reporting unit, deviations from projected results, and the results of the prior year goodwill impairment test. We then determine if the DCF method, the CB method or both will be used in performing the current year goodwill
impairment test. When both methods are used for a reporting unit, we consider the similarities of each valuation to the underlying business to determine the weight given to each method. In 2005 and 2006, we weighted the two methods equally in
determining the value of the reporting units that used both methods because we believed both methods had an equal probability of providing an appropriate fair value. In fiscal 2006, we used the DCF method for all reporting units and the CB method
for Base Station Subsystems, Wireless Innovations and Satellite Communications as these represented managements best estimate of the fair value of each reporting unit.

When using the CB method, we select comparable companies that operate in the same market place as the reporting unit. Because of the limited number of companies that operate in the same market and are of the same size
as the reporting unit, we focus on companies that closely match the reporting unit from a product offering and customer base standpoint, regardless of size. When considering the multiples of the comparable companies we factor in the size of the
comparable companies when selecting the appropriate multiple to use in the valuation. Generally, the CB method has resulted in a higher valuation of our reporting units than the DCF method. This is indicative of the future prospects and higher
values the market places on companies that operate in our industry.

Although our cash flow forecasts used in the DCF method are based on assumptions that
are consistent with plans and estimates we are using to manage the underlying businesses, there is significant judgment in determining the cash flows attributable to these businesses over their estimated remaining useful lives. If actual results are
different from our forecasts, future tests may indicate an impairment of goodwill, which could result in non-cash charges, adversely affecting our results of operations.



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##### Table of Contents

The following tables summarize the significant assumptions in the 2006 DCF fair value calculations:



|                           |  |                                               |    |  |      |   |  |      |   |  |      |   |  |          |  
|-------------------------- |  | --------------------------------------------- | -- |  | ---- | - |  | ---- | - |  | ---- | - |  | -------- | -
|REVENUE GROWTH RATE        |  | PROJECTED (as of July 1, 2006 valuation date) |   
|                           |  | 2007                                          |    |  | 2008 |   |  | 2009 |   |  | 2010 |   |  | Terminal |  
|Antenna and Cable Products |  | 5.6                                           | %  |  | 4.8  | % |  | 3.6  | % |  | 2.0  | % |  | 1.0      | %
|Satellite Communications   |  | 23.6                                          | %  |  | 20.4 | % |  | 8.7  | % |  | 8.5  | % |  | 4.0      | %
|Base Station Subsystems    |  | 0.0                                           | %  |  | 25.4 | % |  | 9.7  | % |  | 8.5  | % |  | 5.0      | %
|Network Solutions          |  | 5.6                                           | %  |  | 7.1  | % |  | 5.2  | % |  | 3.0  | % |  | 2.0      | %
|Wireless Innovations       |  | 11.4                                          | %  |  | 10.0 | % |  | 10.0 | % |  | 7.5  | % |  | 4.0      | %
|                           | 
|EBIT MARGIN                |  | PROJECTED (as of July 1, 2006 valuation date) |   
|                           |  | 2007                                          |    |  | 2008 |   |  | 2009 |   |  | 2010 |   |  | Terminal |  
|Antenna and Cable Products |  | 11.9                                          | %  |  | 11.2 | % |  | 11.3 | % |  | 11.3 | % |  | 10.4     | %
|Satellite Communications   |  | (0.9                                          | )% |  | 3.2  | % |  | 4.9  | % |  | 5.1  | % |  | 5.1      | %
|Base Station Subsystems    |  | 2.3                                           | %  |  | 7.6  | % |  | 11.5 | % |  | 12.3 | % |  | 12.5     | %
|Network Solutions          |  | 14.1                                          | %  |  | 19.9 | % |  | 22.7 | % |  | 22.7 | % |  | 22.7     | %
|Wireless Innovations       |  | 15.6                                          | %  |  | 17.3 | % |  | 18.9 | % |  | 19.0 | % |  | 19.0     | %

The following tables summarize the significant assumptions in the 2005 DCF fair value calculations:



|                           |  |                                               |    |  |      |   |  |      |   |  |      |   |  |          |  
|-------------------------- |  | --------------------------------------------- | -- |  | ---- | - |  | ---- | - |  | ---- | - |  | -------- | -
|REVENUE GROWTH RATE        |  | PROJECTED (as of July 1, 2005 valuation date) |   
|                           |  | 2006                                          |    |  | 2007 |   |  | 2008 |   |  | 2009 |   |  | Terminal |  
|Antenna and Cable Products |  | 7.7                                           | %  |  | 3.3  | % |  | 2.0  | % |  | 2.0  | % |  | 2.0      | %
|Satellite Communications   |  | 18.3                                          | %  |  | 34.8 | % |  | 18.4 | % |  | 15.1 | % |  | 4.0      | %
|Base Station Subsystems    |  | 2.1                                           | %  |  | 19.7 | % |  | 20.0 | % |  | 2.5  | % |  | 5.0      | %
|Network Solutions          |  | (22.7                                         | )% |  | 3.5  | % |  | 3.5  | % |  | 3.8  | % |  | 3.0      | %
|Wireless Innovations       |  | 12.0                                          | %  |  | 12.0 | % |  | 8.5  | % |  | 8.5  | % |  | 5.0      | %
|                           | 
|EBIT MARGIN                |  | PROJECTED (as of July 1, 2005 valuation date) |   
|                           |  | 2006                                          |    |  | 2007 |   |  | 2008 |   |  | 2009 |   |  | Terminal |  
|Antenna and Cable Products |  | 14.3                                          | %  |  | 15.0 | % |  | 15.0 | % |  | 15.0 | % |  | 15.0     | %
|Satellite Communications   |  | 5.3                                           | %  |  | 6.8  | % |  | 7.7  | % |  | 8.3  | % |  | 8.3      | %
|Base Station Subsystems    |  | 1.3                                           | %  |  | 7.6  | % |  | 14.2 | % |  | 15.8 | % |  | 18.5     | %
|Network Solutions          |  | 19.3                                          | %  |  | 19.1 | % |  | 21.9 | % |  | 23.5 | % |  | 23.5     | %
|Wireless Innovations       |  | 17.6                                          | %  |  | 19.1 | % |  | 17.0 | % |  | 16.6 | % |  | 16.6     | %

The following table summarizes the discount rates used in the 2006 and 2005 DCF fair value calculations:



|                           |  |               |   |  |      |  
|-------------------------- |  | ------------- | - |  | ---- | -
|                           |  | Discount Rate |  
|                           |  | 2006          |   |  | 2005 |  
|Antenna and Cable Products |  | 13            | % |  | 10   | %
|Satellite Communications   |  | 13            | % |  | 12   | %
|Base Station Subsystems    |  | 14            | % |  | 16   | %
|Network Solutions          |  | 14            | % |  | 11   | %
|Wireless Innovations       |  | 14            | % |  | 13   | %



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The following table summarizes the significant assumptions used in the 2006 and 2005 CB fair value calculations:



|                           |  |                   |   |  |                |   |  |                   |         |  |                |  |      |   |  |    |  
|-------------------------- |  | ----------------- | - |  | -------------- | - |  | ----------------- | ------- |  | -------------- |  | ---- | - |  | -- | -
|                           |  | 2006              |   |  | 2005           |  
|                           |  | CB Multiples Used |   |  | ControlPremium |   |  | CB Multiples Used |         |  | ControlPremium | 
|                           |  | Revenue           |   |  | EBITDA         |   |  |                   | Revenue |  | EBITDA         |  |     
|Antenna and Cable Products |  | (a                | ) |  | (a             | ) |  | (a                | )       |  | 1.2x           |  | 8.6x |   |  | (c | )
|Satellite Communications   |  | 0.5x              |   |  | 8.0x           |   |  | 20                | %       |  | 0.7x           |  | 8.1x |   |  | (c | )
|Base Station Subsystems    |  | 1.2x              |   |  | 10.0x          |   |  | 20                | %       |  | 1.3x           |  | (b   | ) |  | (c | )
|Network Solutions          |  | (a                | ) |  | (a             | ) |  | (a                | )       |  | 2.1x           |  | 8.4x |   |  | (c | )
|Wireless Innovations       |  | 1.5x              |   |  | 9.0x           |   |  | 20                | %       |  | 1.6x           |  | 8.2x |   |  | (c | )



|(a) | The Comparable Business method was not used for Antenna and Cable Products and Network Solutions for the 2006 valuation because these reporting units had continued positive results
in fiscal 2006, had large amounts of headroom in fiscal 2005 and had fiscal 2006 projected results that indicated continued revenue and EBIT margin growth.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(b) | EBITDA was not used for Base Station Subsystems in the 2005 valuation. As of the valuation date, the EBITDA for Base Station Subsystems was considered a de minimis amount and
not representative of the value of the reporting unit.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(c) | The control premium was factored into the selection of the Revenue and EBITDA Multiples in the 2005 fair value calculation.
|--- | ---------------------------------------------------------------------------------------------------------------------------

The following table illustrates the goodwill allocated to each reporting unit as of March 31, 2007 and September 30, 2006 and 2005, and the amount of headroom,
(which represents the percentage difference between each reporting units fair value and carrying value) as of our annual impairment test, July 1, 2006 and 2005, as follows:



|                           |  |                         |         |               |      |         |      |   |         |      |    |   |  |     |  
|-------------------------- |  | ----------------------- | ------- | ------------- | ---- | ------- | ---- | - | ------- | ---- | -- | - |  | --- | -
|                           |  | Goodwill (In thousands) |         | Headroom (1)  |     
|                           |  | March 31, 2007          |         | September 30, |      | July 1, |     
|                           |  |                         | 2006    |               | 2005 |         | 2006 |   |         | 2005 |   
|Antenna and Cable Products |  | $                       | 226,357 |               | $    | 196,299 |      | $ | 186,308 |      | 24 | % |  | 85  | %
|Satellite Communications   |  |                         | 14,371  |               |      | 14,207  |      |   | 7,085   |      | 43 | % |  | 184 | %
|Base Station Subsystems    |  |                         | 411,782 |               |      | 411,782 |      |   | 402,799 |      | 6  | % |  | 5   | %
|Network Solutions          |  |                         | 117,779 |               |      | 117,178 |      |   | 113,233 |      | 7  | % |  | 29  | %
|Wireless Innovations       |  |                         | 143,147 |               |      | 143,200 |      |   | 152,658 |      | 45 | % |  | 3   | %



|(1) | Headroom = (fair value - carrying value)/carrying value
|--- | -------------------------------------------------------

The decrease in
Antenna and Cable Products headroom is due primarily to the use of a higher discount rate resulting from long-term uncertainty of future copper prices and the markets continued acceptance of copper cable as compared to other products, such as
optical fiber. The decrease in the Satellite Communications headroom is due to a lower fiscal 2006 fair value resulting from lower projected long-term revenues and cash flows in fiscal 2006 versus fiscal 2005 and a higher fiscal 2006 carrying value
due primarily to the acquisition of Skyware in February 2006. The decrease in the Network Solutions headroom was primarily the result of greater uncertainty in the assumptions (e.g. greater mix of international revenue) underlying the reporting
units fair value. As a result, a higher discount rate was applied to determine the fair value of the reporting unit. The increase in Wireless Innovations headroom was the result of a higher fair value due to higher projected long-term revenues
and cash flows resulting from expected continued strong market acceptance of the product offering.



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##### Table of Contents

The following table illustrates the impact on the amount of headroom of a change to each of the critical assumptions used
in the goodwill valuation for 2006:



|                                               |  |                                      |   |  |                         |   |  |                        |   |  |                  |    |  |                     |  
|---------------------------------------------- |  | ------------------------------------ | - |  | ----------------------- | - |  | ---------------------- | - |  | ---------------- | -- |  | ------------------- | -
|                                               |  | HEADROOM ANALYSIS AS OF JULY 1, 2006 |  
|                                               |  | Antenna andCable Products            |   |  | SatelliteCommunications |   |  | Base StationSubsystems |   |  | NetworkSolutions |    |  | WirelessInnovations |  
|Headroom                                       |  | 24                                   | % |  | 43                      | % |  | 6                      | % |  | 7                | %  |  | 45                  | %
|METHOD USED                                    |  |                                      |   |  |                         |   |  |                        |   |  |                  |    |  |                     |  
|TEN PERCENTAGE POINT:                          |  |                                      |   |  |                         |   |  |                        |   |  |                  |    |  |                     |  
|Decrease in Comparable Business (CB) Weighting |  | N/A                                  |   |  | 39                      | % |  | 4                      | % |  | N/A              |    |  | 44                  | %
|Increase in Comparable Business (CB) Weighting |  | N/A                                  |   |  | 49                      | % |  | 8                      | % |  | N/A              |    |  | 45                  | %
|DCF METHOD                                     |  |                                      |   |  |                         |   |  |                        |   |  |                  |    |  |                     |  
|ONE PERCENTAGE POINT:                          |  |                                      |   |  |                         |   |  |                        |   |  |                  |    |  |                     |  
|Decrease in Revenue Growth Rate                |  | 20                                   | % |  | 41                      | % |  | 4                      | % |  | 2                | %  |  | 41                  | %
|Increase in Revenue Growth Rate                |  | 28                                   | % |  | 46                      | % |  | 8                      | % |  | 12               | %  |  | 47                  | %
|Decrease in EBIT Margin                        |  | 12                                   | % |  | 29                      | % |  | 1                      | % |  | 0                | %  |  | 40                  | %
|Increase in EBIT Margin                        |  | 36                                   | % |  | 59                      | % |  | 11                     | % |  | 14               | %  |  | 49                  | %
|Decrease in Terminal Growth Rate               |  | 18                                   | % |  | 38                      | % |  | 1                      | % |  | (2               | )% |  | 39                  | %
|Increase in Terminal Growth Rate               |  | 31                                   | % |  | 51                      | % |  | 12                     | % |  | 18               | %  |  | 52                  | %
|Decrease in Discount Rate                      |  | 35                                   | % |  | 52                      | % |  | 13                     | % |  | 22               | %  |  | 54                  | %
|Increase in Discount Rate                      |  | 15                                   | % |  | 37                      | % |  | 0                      | % |  | (5               | )% |  | 37                  | %
|CB METHOD                                      |  |                                      |   |  |                         |   |  |                        |   |  |                  |    |  |                     |  
|TEN PERCENT:                                   |  |                                      |   |  |                         |   |  |                        |   |  |                  |    |  |                     |  
|Decrease in Revenue Multiple                   |  | N/A                                  |   |  | 39                      | % |  | 2                      | % |  | N/A              |    |  | 40                  | %
|Increase in Revenue Multiple                   |  | N/A                                  |   |  | 48                      | % |  | 10                     | % |  | N/A              |    |  | 50                  | %
|Decrease in EBITDA Multiple                    |  | N/A                                  |   |  | 39                      | % |  | 3                      | % |  | N/A              |    |  | 41                  | %
|Increase in EBITDA Multiple                    |  | N/A                                  |   |  | 47                      | % |  | 9                      | % |  | N/A              |    |  | 49                  | %
|FIVE PERCENTAGE POINT:                         |  |                                      |   |  |                         |   |  |                        |   |  |                  |    |  |                     |  
|Decrease in Control Premium                    |  | N/A                                  |   |  | 40                      | % |  | 4                      | % |  | N/A              |    |  | 42                  | %
|Increase in Control Premium                    |  | N/A                                  |   |  | 47                      | % |  | 8                      | % |  | N/A              |    |  | 48                  | %

N/A - The CB method was not used for determining the fair value of this reporting unit

Network Solutions has continued to produce positive results; however, because of the sensitivity of the valuation to changes in the cash flow projections, there is a
greater risk of potential future impairment. Some of the significant factors that could impact the cash flow projections for Network Solutions are (1) the level of revenue resulting from the consolidation of U.S. wireless service providers,
(2) the timing and volume of international expansion opportunities, (3) the ability to maintain operating margin levels, (4) the ability to develop new and enhanced products and (5) our ability to execute direct production and
overhead cost reductions.

As a result of its relatively large amount of goodwill and its operating losses in fiscal 2004, 2005 and 2006, Base Station
Subsystems goodwill is at a higher risk of potential future impairment. As of July 1, 2006, our future cash flow projections for Base Station Subsystems included (1) higher sales volumes resulting from international wireless network
expansion, in particular from China which is expected to begin building their third generation (3G) networks in late 2007 and into 2008, (2) increased gross margin rates as a result of our outsourcing of North American and European filter
manufacturing to Elcoteq S.A., (3) increased facility utilization as a result of the restructuring of our operations in line with our business needs, (4) introduction of new products and rationalization of research and development spending
resulting in sales volumes growing at a higher rate than operating expenses, and (5) focus on higher margin products and business relationships resulting in an improved mix of product sales.

If one or more of these assumptions differ from our forecasts, future tests may indicate an impairment of goodwill.

As a result of the losses generated by Base Station Subsystems in the first six months of fiscal 2007, we determined that a potential indicator of impairment had
occurred and an interim test for goodwill impairment was required. We performed step one of the goodwill impairment test, in accordance with paragraph 19 of SFAS 142, on this reporting unit as of March 31, 2007. Based on this test,
we determined that an indicator of impairment existed and step two of the impairment test was required. We expect to complete step two of the Base Station Subsystems reporting unit goodwill impairment test in the next
90 days. Goodwill represents approximately 90% of the net assets of the Base Station Subsystems reporting unit. Based on the results of this test, a portion of the $412 million of Base Station Subsystems goodwill may be written off as a non-cash
charge to earnings.



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This discussion and analysis of our financial condition and results of operations is based on our condensed consolidated
financial statements, which have been prepared in conformity with accounting principles generally accepted in the United States. The preparation of these financial statements requires the use of estimates and assumptions related to the reporting of
assets, liabilities, revenues, expenses and related disclosures. In preparing these financial statements, we have made our best estimates and judgments of certain amounts included in the financial statements. Estimates are revised periodically.
Actual results could differ from these estimates.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

We have made forward-looking statements in this Form 10-Q, including in Managements Discussion and Analysis of Financial Condition and Results of
Operations and in the Notes to Consolidated Financial Statements. In addition, management may make other written or oral statements that constitute forward-looking statements. Forward-looking statements are based on
managements beliefs and assumptions and on information currently available to them. You can identify these statements by the fact that they do not relate strictly to historical or current facts. Words such as expect,
anticipate, outlook, forecast, potential, could, project, intend, plan, continue, believe, seek,
estimate, should, would, may, will, assume, variations of such words and similar expressions are intended to identify such forward-looking statements. We make these statements
under the protection afforded them by Section 21E of the Securities Exchange Act of 1934.

Forward-looking statements involve risks, uncertainties and
assumptions, including those discussed under the caption Risk Factors in Andrews Annual Report on Form 10-K for the fiscal year ended September 30, 2006 (Part I, Item 1A) and in Part II, Item 1A of this Quarterly
Report on Form 10-Q. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, our business, financial condition and results of operations could be materially and adversely affected. We caution
the reader, however, that the list of factors may not be exhaustive. We operate in a continually changing business environment and new risk factors emerge from time to time. We cannot predict those risk factors, nor can we assess the impact, if any,
of those risk factors on our business or the extent to which any such factors may cause actual results to differ materially from those projected in any forward-looking statements. Forward-looking statements do not guarantee future performance, and
you should not put undue reliance on them.

Forward-looking statements speak only as of the date they are made and, except to the extent required by law,
we do not have any intention or obligation to update publicly any forward-looking statements after the distribution of this report, whether as a result of new information, future events, changes in assumptions, or otherwise. You are advised to
consult any further disclosures we make on related subjects in our 8-K, 10-Q, and 10-K reports filed with or furnished to the Securities and Exchange Commission.



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|ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|------- | ----------------------------------------------------------

Information with respect to our exposure to interest
rate risk, foreign currency risk and commodity risk is contained in Item 7A, Quantitative and Qualitative Disclosures About Market Risk, of our Annual Report on Form 10-K for the fiscal year ended September 30, 2006. With the
exception of copper purchase commitments, we believe that there has been no material change to the market risks disclosed in our Annual Report on Form 10-K for the fiscal year ended September 30, 2006.

We use various metals in the production of our products. Copper, which is used to manufacture coaxial cable, is the most significant of these metals. As a result, we are
exposed to fluctuations in the price of copper. In order to reduce this exposure, we have implemented price increases on our cable products and have entered into forward purchase contracts with various suppliers. At March 31, 2007, we had
contracts to purchase approximately 20.4 million pounds of copper for $56.7 million. For the remainder of fiscal 2007, we estimate that we will purchase approximately 12 million additional pounds of copper. We estimate that a 10% change in
the price of copper could increase or decrease the cost of our forecasted fiscal 2007 copper purchases that are not under contract at March 31, 2007 by approximately $3.9 million.



|ITEM 4. | CONTROLS AND PROCEDURES
|------- | -----------------------

Evaluation of Disclosure Controls and
Procedures: As of March 31, 2007, our management, including our Chief Executive Officer and Chief Financial Officer, reviewed and evaluated the effectiveness of the our disclosure controls and procedures pursuant to Rule 13a-15(b) of the
Securities Exchange Act of 1934 (the Exchange Act). Based on that review and evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the our disclosure controls and procedures were effective as of
March 31, 2007.

Internal Control Over Financial Reporting: During the second quarter of fiscal 2007, there were no changes in our internal
control over financial reporting (as defined in Rules 13a-15(f) under the Exchange Act) or in other factors that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.



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PART II
OTHER INFORMATION

Items 3, 4 and 5 of this Part II are not applicable.



|ITEM 1. | LEGAL PROCEEDINGS
|------- | -----------------

On October 25, 2005, TruePosition, Inc.
filed a complaint in the U.S. District Court for the District of Delaware, alleging the companys potential sale of certain geolocation products to Saudi Telecom will infringe a TruePosition patent. As relief, the complaint seeks, among other
things, injunctive relief and unspecified monetary damages. The company filed its response and counterclaim on December 15, 2005 and is vigorously defending this litigation. Discovery in this matter is now complete and both parties have
moved for summary judgment. A decision on these motions is not expected until the fourth quarter of fiscal 2007. A trial date has been set for September 2007. The parties have not engaged in meaningful settlement talks to date.

The company is also a party to various other legal proceedings, lawsuits and other claims arising in the ordinary course of its business. The company does not believe
that such other litigation will have a material effect on the companys business, financial position, results of operations or cash flow.

ITEM 1A. RISK FACTORS

Information regarding risk factors appears in Item 1A. Risk Factors, in our Annual
Report on Form 10-K for the year ended September 30, 2006. Except as described below, there have been no material changes from the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended September 30, 2006.

We intend to sell our Satellite Communications business. On May 3, 2007, we announced our intention to sell our Satellite Communications
business. We have engaged in discussions with potential buyers and, subject to board approval, currently expect to complete the divestiture. However, we cannot assure you that we will complete a transaction on terms acceptable to us, or at all. We
also cannot predict the length of time needed to sign or close any such divestiture transaction. If we do not complete the intended divestiture, we may have incurred significant expenses for which we will not receive any benefit. Our ability to sell
this business on acceptable terms depends on its future operating performance and other factors beyond our control, including the degree of interest from potential buyers and prevailing market conditions. The net assets of the Satellite
Communications business were approximately $54 million as of March 31, 2007. While we currently believe that there is no impairment related the Satellite Communications assets, if the sale price is less than the carrying value of the
assets being sold, we would record either a loss on the sale or an impairment of the assets depending on the timing of the transaction.

The goodwill
balance on our balance sheet is tested at least annually for possible valuation impairment and any non-cash impairment charges could adversely affect our financial results. We test our goodwill balance for possible impairment based on the five
reporting units of our business. On March 31, 2007 we had a goodwill balance of $913 million, of which $412 million relates to the Base Station Subsystems group. As a result of its relatively large amount of goodwill and its operating losses in
fiscal 2004, 2005 and 2006, the Base Station Subsystem Groups goodwill is at a higher risk of potential future impairment. As a result of the losses generated by Base Station Subsystems in the first six months of fiscal 2007, we determined
that a potential indicator of impairment had occurred and an interim test for goodwill impairment was required. We performed step one of the goodwill impairment test, in accordance with paragraph 19 of SFAS 142, on this reporting unit as
of March 31, 2007. Based on this test, we determined that an indicator of impairment existed and step two of the impairment test was required. We expect to complete step two of the Base Station Subsystems reporting unit
goodwill impairment test in the next 90 days. Goodwill represents approximately 90% of the net assets of the Base Station Subsystems reporting unit. Based on the results of this test, a portion of the $412 million of Base Station Subsystems
goodwill may be written off as a non-cash charge to earnings. The process of evaluating the potential impairment of goodwill is subjective and requires significant judgment. In estimating the fair value of the businesses for the purpose of our
annual or periodic analyses, we make estimates and judgments about the future cash flows of these businesses. Although our cash flow forecasts are based on assumptions that are consistent with plans and estimates we are using to manage the
underlying businesses, there is significant judgment in determining the cash flows attributable to these businesses. If actual results are different from the companys forecasts, future tests may indicate an impairment of goodwill, which could
result in non-cash charges, adversely affecting the companys results of operations. If, in the course of our valuation testing procedures, we determine that a portion of the consolidated goodwill balance is impaired, any non-cash impairment
charges would adversely affect our financial results.



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|ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|------- | -----------------------------------------------------------

Since
fiscal 1997, our Board of Directors has authorized us to repurchase up to 30.0 million common shares. As of March 31, 2007, we had repurchased approximately 24.6 million shares. These repurchases may be made on the open
market or in negotiated transactions and the timing and amount of shares repurchased will be determined by our management. Included in the 24.6 million shares repurchased are 1.0 million shares repurchased in the second quarter of
fiscal 2007 for $10.3 million.

The table below lists our repurchases of shares of common stock during the first six months of fiscal 2007:



|                          |  |                                  |  |                             |       |                                                                     |           |                               |          
|------------------------- |  | -------------------------------- |  | --------------------------- | ----- | ------------------------------------------------------------------- | --------- | ----------------------------- | ---------
|Fiscal Year 2007          |  | Total Number ofSharesRepurchased |  | Average PricePaid per Share |       | Total Number ofShares Repurchasedas Part of PubliclyAnnounced Plans |           | SharesAvailable forRepurchase
|December 1 to December 31 |  | 1,000,000                        |  | $                           | 10.09 |                                                                     | 1,000,000 |                               | 6,389,568
|March 1 to March 31       |  | 1,000,000                        |  | $                           | 10.34 |                                                                     | 1,000,000 |                               | 5,389,568
|                          |  |                                  |  |                             |       |                                                                     |           |                               |          
|Total                     |  | 2,000,000                        |  |                             |       |                                                                     | 2,000,000 |                               |          



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

The
companys Annual Meeting of Shareholders was held on February 7, 2007. At the meeting, the following matters were submitted to shareholders for a vote:



| | 1. | Election of Directors
| | -- | ---------------------



|                  |  |             |  |               
|----------------- |  | ----------- |  | --------------
|Nominee           |  | Votes For   |  | Votes Withheld
|William L. Bax    |  | 132,619,715 |  | 6,914,651     
|Thomas A. Donahoe |  | 132,703,396 |  | 6,830,970     
|Ralph E. Faison   |  | 135,305,864 |  | 4,228,502     
|Jere D. Fluno     |  | 130,421,271 |  | 9,113,095     
|William O. Hunt   |  | 132,637,652 |  | 6,896,714     
|Gerald A. Poch    |  | 132,291,699 |  | 7,242,667     
|Anne F. Pollack   |  | 132,510,164 |  | 7,024,202     
|Glen O. Toney     |  | 132,164,645 |  | 7,369,721     
|Andrea L. Zopp    |  | 132,550,727 |  | 6,983,639     



| | 2. | The appointment of Ernst & Young LLP to serve as independent public auditors for fiscal 2007 was ratified by a vote of 136,505,316 shares for, 2,890,972 shares against, and
138,077 abstentions.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|ITEM 6. | EXHIBITS
|------- | --------



|            |  |                                                                                       |  |                   
|----------- |  | ------------------------------------------------------------------------------------- |  | ------------------
|Exhibit No. |  | Description                                                                           |  | Reference         
|            |  |                                                                                      
|31.1        |  | Rule 13a-14(a) Certification of Chief Executive Officer                               |  | Filed herewith    
|            |  |                                                                                      
|31.2        |  | Rule 13a-14(a) Certification of Chief Financial Officer                               |  | Filed herewith    
|            |  |                                                                                      
|32          |  | 18 U.S.C. Section 1350 Certifications of Chief Executive and Chief Financial Officers |  | Furnished herewith



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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned thereunto duly authorized.



|                  |  |  |  |     |  |                       |  |                                                                                                                                 
|----------------- |  |  |  | --- |  | --------------------- |  | --------------------------------------------------------------------------------------------------------------------------------
|                  |  |  | 
|Date May 10, 2007 |  |  |  | By: |  | /s/ Marty R. Kittrell
|                  |  |  |  |     |  |                       |  | Marty R. Kittrell Executive Vice President and Chief
Financial Officer (Duly Authorized Officer and Principal Financial Officer)



36