Phil Armstrong - SVP, Corporate Finance Mark Olson - EVP and CFO Eddie Edwards - President and CEO.

Jess Lubert - Wells Fargo Brian Modoff - Deutsche Bank Amir Rozwadowski - Barclays Kulbinder Garcha - Credit Suisse Mark Delaney - Goldman Sachs Simon Leopold - Raymond James Mark Sue - RBC Capital Markets George Notter - Jefferies Shawn Harrison - Longbow Research Steven Fox - Cross Research Brian Cohan - National Alliance.

Good morning. My name is Tony and I’ll be your conference operator today. At this time, I would like to welcome everyone to Commscope’s Third Quarter 2014 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. (Operator Instructions).

Thank you. I would now like to turn the conference over to Mr. Phil Armstrong, Senior Vice President of Corporate Finance. Sir, please go ahead. .

Good morning and thank you for joining us today to discuss Commscope’s third quarter 2014 results.

With me on the call today are Eddie Edwards, Commscope’s President and Chief Executive Officer; Mark Olson, Commscope’s Executive Vice President and Chief Financial Officer; Mark Huegerich, Director of Investor Relations and Jennifer Crawford, Manager of Investor Relations.

You can find the slides that accompany this review on our Investor Relations site. Before we begin the presentation, I’ll cover a few housekeeping items. On Slide 2, you will find our cautionary language related to forward-looking statements.

During this conference call we may make forward-looking statements regarding our financial position, plans and outlook that are based on information currently available to management, management’s beliefs and a number of assumptions concerning future events.

Forward-looking statements are not a guarantee of performance and are subject to a number of uncertainties and other factors which could cause the actual results to differ materially from those currently expected.

For a more detailed description of factors that could cause such a difference please see our third quarter 2014 10-Q and other SEC filings. In providing forward-looking statements, the company is not undertaking any duty or obligation to update these statements as a result of new information, future events or otherwise.

Also please note that all dollar figures and percentages are approximations. In addition to GAAP information we will provide certain non-GAAP measures. We believe that presenting these non-GAAP or adjusted measures provides additional meaningful information to investors.

Detailed reconciliations of GAAP to adjusted measures can be found in the appendix to our slide presentation. Slide 3 is our agenda for this morning.

Mark Olson will provide an overview of the quarter, highlight our three segments performance, discuss the balance sheet cash flow and capital structure and will provide an outlook for the fourth quarter and year. I’ll turn the call over to Eddie Edwards for comments before we open the line for Q&A.

To make sure that everyone have the opportunity to ask a question on today’s call, we request that you ask one question and return to the queue for any additional questions. I’ll now turn it over to Mark Olson.

Mark?.

Thanks, Phil, and good morning to everyone joining us on the call. Now let’s turn to Slide 4 for a summary of our third quarter. We're very pleased to deliver third quarter records for gross margin, adjusted operating margin and adjusted net income. And here are the highlights. Sales grew 13% year-over-year to a $1 billion.

We’re pleased that see growth in all three segments contributed to the sales increase. As we entered the seasonally slower fourth quarter, orders booked decreased 2% year-over-year to $867 million, providing a book-to-bill ratio of approximately 0.9 times.

Third quarter gross margin increased 130 basis points from the year ago quarter to a third quarter record of 36%. GAAP operating income in the quarter rose 51% year-over-year to $151 million. Adjusted operating income, which excludes the amortization of purchase, intangible assets and other special items rose 35% year-over-year to $219 million.

Adjusted operating margin increased 350 basis points year-over-year to a third quarter record of 22%; our adjusted operating performance improved not only through higher gross margin but also a reduction in period overhead despite a 13% increase in sales.

We believe this is a great example of our commitment to cost reduction and focus on improved efficiencies. For the quarter, the Company reported net income of $96 million or $0.50 per diluted share, excluding special items non-GAAP adjusted net income increased 97% year-over-year to a third quarter record $119 million or $0.62 per diluted share.

Adjusted EPS increased 63%, despite an increase of 33 million shares in our diluted share count, primarily as a result of our October 2013 IPO. Our operating results grew substantially year-over-year, primarily due to strong wireless performance and significantly improved broadband results.

Both the wireless and broadband performance were driven by higher sales volumes and the benefit from ongoing cost savings initiatives. I’ll now discuss each of our three segments third quarter performance starting with the Wireless segment on Slide 6.

In Wireless, we are the global leader in merchant RF Wireless Network Connectivity Solutions and Small Cell DAS solutions. Our solutions, which are marketed primarily under the Andrew brand enable wireless operators to deploy macro cell sites and small cell DAS solutions to meet 2, 3 and 4G cellular coverage and capacity requirements.

Wireless segment sales increased 15% year-over-year to $633 million, with our recent Alifabs acquisition contributing approximately $10 million of incremental sales. The sales increase was driven by growth in most regions, with particular strength in the Asia Pacific region and Europe.

In the quarter wireless adjusted operating income rose 33% year-over-year to $155 million or 25% of sales. We continue to benefit from higher sales volume and ongoing cost savings initiatives.

During the quarter we did see a softening in order trends and have reduced our fourth quarter outlook, due primarily to a slowdown in activity by North American wireless operators. But despite the short term volatility we continue to believe we are in the early innings of global LTE investment.

We are seeing three consecutive quarters of significant year over year growth in Europe and the outlook remain positive as European operators roll out LTE and modernize existing 3G networks.

We’re also pleased to see meaningful growth in India and the Asia Pacific region as operators are densifying exiting 2G and 3G networks and are in the early phase of LTE deployments. Moving now to Slide 7 I’ll discuss our Enterprise segment. We are the global leader and Enterprise connectivity solutions for data centers and commercial buildings.

Our compressive solutions sold primarily under the SYSTIMAX and Uniprise brands include optical fiber and twisted pair structured cabling solutions, intelligent infrastructure software, network rack and cabinet enclosures, intelligent building sensors, advanced LED lighting control systems and network design services.

Enterprise sales increased 3% year over year to $218 million, primarily driven by growth in the Asia Pacific and North American regions. In the quarter enterprise adjusted operating income increased 6% year over year to $45 million or 20% of sales.

Our enterprise sales pipeline remains solid and we continue to signs of modest improvement in the market. We’re pleased with our Enterprise operating performance and remain optimistic regarding our long term growth opportunities. I’ll now turn to Slide 8 to discuss our broadband segment.

We are a global leader in providing cable and communications products that support the multi-channel video, voice and high speed data services provided by multiple system operators or MSOs.

We believe we are the leading global manufacturer of coaxial cable or hybrid fiber coax networks and a leading supplier of fiber optic cable for North American MSOs. Broadband sales increased 20% year over year to a $150 million.

The sales growth was primarily driven by increased investment in North America as cable operators invest the increase the quality of their video and broadband offerings and push fiber deeper in the networks.

In the quarter broadband adjusted operating income increased meaningfully year-over-year to $19 million or 13% of sales, primarily due to an increase in sales volume and the benefits realized from cost reduction initiatives. We’re pleased with broadband's meaningful improvement and continue to work diligently to position broadband for success.

Next I’ll discuss cash flow and liquidity on slide 10. During the third quarter Commscope generated $211 million in cash from operations up 66% year over year, and we invested $9 million in capital expenditures, resulting our record third quarter free cash flow of $202 million. Adjusted free cash flow for the 12 months September 30 was $361 million.

We ended the quarter with $616 million in cash and cash equivalents and had availability under our credit facility of $371 million, which combined with our cash balance provided total liquidity of $987 million. We’re pleased with our demonstrated capability to generate strong cash flow which provides us with significant optionality.

On Slide 11 I’ll discussed the capital structure. Since the take private in January 2011 we have reduced our net leverage ratio from 5 terms to 2.4 terms by substantially growing earnings and free cash flow.

We continue to expect to generate strong free cash flow during the remainder of 2014 and our priorities for cash have not changed; and as a reminder those priorities are first to grow the business both organically and to acquisition; second, to reduce debt over the longer term; and third, to consider other shareholder friendly actions.

Finally I’ll cover our fourth quarter and full year 2014 outlook on Slide 13. For the fourth quarter we expect revenue of $810 million to $850 million or down 2% year over year at the midpoint of the range.

Adjusted operating income was $125 million to $145 million, down 6% year over year at the midpoint, and adjusted earnings of $0.30 to $0.35 per diluted share up 8% year-over-year to midpoint and based on a diluted share count of a 192 million shares. Our fourth quarter guidance leads to a 2014 calendar year outlook as follows.

Revenue of approximately $3.8 billion to $3.85 billion, up approximately 10% year over year at the midpoint of the range; adjusted operating income of $795 million to $815 million, up approximately 30% year-over-year at the midpoint, and adjusted effective tax rate of 36% to 37% and adjusted earnings per diluted share of $2.15 to $2.20 or up 36% at the mid-point and based on a diluted share count of a 192 million shares.

We also expect to continue to generate strong free cash flow which reflects growing net income, disciplined working capital management, cash taxes that are below the effective tax rate and modest capital spending.

Consistent with our prior expectations, this guidance assumes typical seasonal slowdowns in enterprise and broadband and lowered second-half North American wireless operator spending that we have highlighted throughout the year.

Despite the end of year pause in wireless, we are very pleased with our strong year-to-date performance and longer-term opportunities. We believe our industry leading technologies, global sales force and ability to ramp with customer demand has increased our relevance and position in the market.

Finally, although we are currently in a process of developing our 2015 operating plan and expect to provide full year guidance when we release our fourth quarter results, we currently expect modest sales growth that is more concentrated in the second-half of the year.

And with that, I’ll turn the call over to Eddie before the operator opens the call for Q&A.

Eddie?.

Thank you, Mark. I want to start by thanking the global Commscope team for their outstanding performance in the third quarter of 2014. We’re pleased to deliver a strong quarter as our Wireless, Enterprise and Broadband segments, all delivered solid results.

As previously highlighted, while we will see lower sales in the second-half of ’14, we believe continued investment in LTE coverage and capacity over license spectrum will remain a strategic initiative for wireless operators over the long-term.

The broadband came delivered an exceptional quarter with significant improvement in both revenue and adjusted operating income. We are working hard to build on this momentum to sustain long-term margin improvement. In Enterprise, we believe our performance is indicative of a continued market recovery.

Enterprises are investing in data centers and intelligent building and market is showing signs of modest improvement. We continue to invest in Altrac’s, Redwood Systems and our data center owned demand solutions and customer feedback is very positive. The first nine months of 2014 have been strong with particularly robust wireless performance.

Despite wireless orders that had slowed as we worked through the third quarter, we are pleased with our performance and outlook for the total year. We are confident that our industry leading wireless solutions and position in the market provides meaningful long-term opportunities.

Now we’ll be happy to answer your questions and I turn it back to you Tony..

Okay. (Operator Instructions) Your first question comes from the line of Jess Lubert with Wells Fargo..

A couple of questions, but first, can you talk about general visibility entering Q4 and perhaps helps us understand how we should be thinking about Q1 seasonality, just so we have a baseline for how to get to growth for ’15 and what’s providing confidence the overall business will grow next year?.

Sure Jess and good morning. Thanks for your question. Maybe if we talk through it a little bit by segment. First, we did have some nice growth in our broadband business. We wouldn’t encourage you to continue to think about 20% growth going forward, but we do have a little bit of a tailwind in that business right now.

From an enterprise perspective, as Eddie had commented, this is fundamentally our third consecutive quarter of growth in Enterprise and it will represent the first year in three that we have seen growth in that segment. So, we are optimistic with the momentum that we have in that business and we see that continuing moving forward.

And then finally in wireless, we started the year exceptionally strong, we had 26% growth in wireless in the first quarter and 23% in the second; and as we’ve guided throughout the year, we expect and have now begun to see a pause in wireless spending here in the second-half.

We do believe that that is temporary; that it will take a quarter or two to work through what we’re seeing as an expected second-half slow carriers and again, it's U.S. North American carrier consideration here that, like us they have budgets and they're working through those and those will be reset just like ours will next year.

And so we do expect a continuation of spending in the U.S. next year. [indiscernible] provide some color as to momentum..

Would you also expect the wireless business to grow next year and can you just help us understand the dynamics? Given the strength in North America this year, can you talk, it might be difficult for the North American wireless business to grow? Is that an accurate assessment? And can you help us understand the breadth of the uptick you’re seeing in Europe? To what extent that is giving you confidence that the wireless business can grow next year? Thanks..

Sure. And maybe if we think about that geographically. You mentioned Europe and this is the third consecutive quarter of very strong growth in Europe. We see that continuing unabated as we move into 2015.

In Asia we’ve also had a very nice growth throughout the year, very strong quarter in the third quarter, and we see that continuing as well and when we talk Asia, China for us is a relative small portion of our wireless segment, but 3G and now initial LTE bills in countries like Taiwan, the Philippines, Myanmar, its broad brush across and India, as well as now returns to a demonstrable strength over the past several quarters.

And we see that continuing as we move into 2015. In the U.S we do see growth in North America in our wireless segment. We do see that more second half oriented as carriers reload budgets and get their capital spending plans configured but we do see growth in wireless in North America next year..

Mark before I let you go. I didn’t hear a comment on Q1 seasonality.

Should we be thinking in a Q1 as flat up or down relative to Q4? Any help there just in terms of how we build our models for 2015?.

Yes sure Jess and we’re still in the midst of working our 2015 operating plans and we don’t have calendarization fine-tuned. We will have difficult comparatives, in particular in wireless in the first two quarters coming off of about 25% growth in each of those two.

So we will have -- again it’s a resumption of growth for the full year but we would encourage you to consider that as more of second half oriented..

Your next question comes from the line of Brian Modoff with Deutsche Bank..

Can you kind a give us your definition in America, what you think modest growth is? Is this low single digit a way to think of it, kind of mid-single digit? Any clarity on that?.

Yes. At this point Brian, we would guide more towards low single digits. It's early stage in our planning process..

Okay and then looking at the enterprise space in the next year, you’ve been seeing a little bit of a pickup in that business.

How should we think of that is a driver for next year and then what kind a of seasonality will you be seeing there? That seems like that’s a more steady business than wireless and didn’t have the stuff that wireless had during this year..

I think that’s a fair point and we would expect to see the continuation of growth in that business. It is much more linear of course than our wireless business is. We are seeing growth, both in the U.S and outside the U.S.

Data center activity we see that continuing at a good pace next year and we do expect that our I-tracks and data center on demand businesses will be more meaningful contributors to us as we move throughout 2015. .

And then looking at wireless in Q4 -- we’ve been talking about seasonality in Q4 and this seemed to be a bit more. As you’ve been saying this, almost beginning of the year expected the back half to be down.

What happened in this quarter to cause you to think about it being down more materially then previously?.

Brian this is Eddie. I think what we saw and I think it’s not a secret to anybody on the call is that we had a pause in one and a slowdown in another of our U.S carriers. U.S. is a meaningful part of our business. So that was greater then what we saw and I think a surprise in the market somewhat. In time we issued our guidance for the quarter.

I think as Mark has said, January 1 is the start of a new budget year.

We have seen this phenomena before and January 1 is a new budget year and we fully expect there is no shortage or a lack of demand in the bandwidth need and these guys are going to spend money and we’ve heard nothing in the marketplace that says they're going to curtail spending and I think based upon what the tower people say, they see a vibrant utilization of this business going forward..

And lastly can you talk about a little bit about the DAS systems, take up of the new product and then overall kind a trend on your DAS business as we look into Q4 and in next year?.

It grew in double digits during the course of '14 and we would expect '15 to not be materially different than that. The advent of the -- we introduced INU, which is both a low power and half power. It is in place with a couple of carriers right now and the reception is very good.

So this I guess is a first transition towards more software managed DAS systems. The INE, which we introduced in Barcelona, which you saw, we’re in the final throws of trailing in Europe.

We have one system in the headquarters of one other carriers that’s operating and we should start seeing I think early in the year business from that part of the world.

We are in conversation and have had several meetings with the larger U.S carriers and very good response to guys who are blown away at the ease of deployment as to what our system will do and we would expect those trials to start possibly by end of the year, certainly early in the first quarter. Optimism in that part of the market is unabated..

Thank you. Next question Tony..

Our next question comes from the line of Amir Rozwadowski with Barclays..

Wanted to touch a bit more on sort of the spending environment currently and particularly if we start to think about where carriers are discussing sort of priorities right now, it does seem as though we are shifting a bit from more of a coverage to a capacity type purchasing environment and certainly when we look at some initiatives such as the AWS auctions taking place today and sort of where they sort of see spending trends going forward, [indiscernible] I think here a bit more about how you folks are positioned to capitalize on that particularly when it comes to the solutions that we should think about that will help them meet their needs and how we should think about that positioning?.

LTE is still less than 40% of our macro business, as well as our DAS business. So it is the fastest growing -- not far, but the bulk of our business outside North America is still in 3G, although Europe is well underway and we see that happening.

So, where do we benefit from this capacity part of your question? We have metro sale type devices, antennas and radios on the pole, street lights things like that, that would enable you to go from the macro environment to a smaller sale side capability.

And those products are available today and they are shown our carrier base and I think well appreciated. That market is not yet developed.

What you would see -- if you go out into some of the areas, you see a radio, a nail to a side of a telephone pole with an antenna nailed to the top of it and that’s not going to pass the approvals of the municipalities the people have to work with. So site solution power backhaul are really the rivers of that.

Our designs and capabilities offer answers to that problem. The second one is as the sales sides get even smaller, our small cell DAS offerings that we have, all of which are multi frequency I think you know will a big place in that, as they do today.

We’ve been in that smaller sell environment for a long time here in North America and in the DAS business for 20 years around the world. So, we have offerings that take us from the macro side which is the bulk of our business to a intermediary side and then to the smaller cell sides with DAS..

And then if I think about your prior commentary and you're looking at cash priorities right now. You had mentioned some sort of shareholder initiatives and stuff along those lines.

I was wondering if you could outline sort of where you stand today relative in terms of your priorities for cash utilization and are we still focused on sort of tuck in M&A type acquisitions? How should we think about sort of the near and perhaps mid-term sort of priorities for cash?.

Our properties are the same I would say, they have been adjusted somewhat, and that we have a capital structure today that is really not indicative of wanting to repay debt back in the same fashion as we did before. The number one priority, and has been and still is, is the growth of the Company, whether it tuck-ins or possibly larger acquisitions.

We have active work being done and lots of interest out, there people talking to us. So that is the first priority. And if we don’t find the right thing, then shareholder actions would be considered after that..

But Amir as you know, we are carrying over $600 million of cash on the balance sheet right now. The second-half of the year is our strong cash generation half and we do expect to be cash flow positive in the fourth quarter.

Our working capital requirements for cash are broadly in the 200 million range and we do not expect to carry quantities of excess cash on the balance sheet for lengthy periods of time..

Your next question comes from the line of Rod Hall with JP Morgan..

Unidentified Analyst :.

Yeah, hi. Thanks for taking my question, this is [Ashwin] on behalf of Rod. I wanted to build on the previous question about wireless weakness in Q4.

The two largest customers here in the U.S., actually sort of increased their 2014 CapEx towards the high end of the range and right from the middle of this year it was well telegraphed as wireless spending will be weak in second-half.

But I was hoping you could help us bridge the gap between what the carriers have to say and lower Q4 guidance? Is it concentrated to just one or two carriers or is it very much a broad based weakness here in the U.S. Also any thoughts on phasing of European LTE rollout will be interesting..

That’s a lot of questions. I’ll forget some of them before I finish talking. But you can remind me. If you look at the whole year, which is what or how we judge at the end of the day, our wireless business has far exceeded what we thought it would be and we’re extremely pleased as of what we’ve seen.

How that happens per quarter is less scientific and really dependent upon how these guys do their spending. You can’t listen to what they say as far as I'm going to spend x and really relate that to what that means for Commscope, because it depends on what they’re buying here.

I think you would see that as some of the OEMs earlier in the year had challenges, while we were absolutely running wide open. So the timing is not the same. We have no concern about the fundamental basis of what wireless is and what it’s going to be in the future.

All of us have multiple devices that we carry around every day and that’s not going to abate. So we have absolutely no concern as to the future -- long-term future of the business. How it happens per quarter is less precise as we sit here right now and we have to work with our customer base as to how that’s going to flow out.

And they’re not always exactly accurate as to how they us and how it really happens. So the biggest material effect is here in North America, with more than one carrier but if one is paused and one is slowed and so that does impact us.

I think as Mark has said in his commentary, we saw substantial growth in Europe and also in the Asia-Pac region, which is much stronger than we’ve seen in years. The other promising thing, a part of the APAC India seems to have a resurgence and we look forward to that as we’re located there.

We talked before about our transition from North America into Europe as LTE coverage is going to have capacity and Europe is going to start with 4G bills. I think Everything Everywhere yesterday announced their LTE advanced introduction I think. We’re part of that.

So we’re seeing how that is working along with other carriers throughout the whole of the continent. So nothing different in what we’ve said, timing differences, yes, are the extremes in timing differences but on overall basis for 2014 we’re exceedingly proud of what our people have done across all the segments that we have..

If I could ask one more question, it would be on the broadband. Obviously strong growth there, but I was trying to understand why we do not see continued growth in that business maybe in 2015. If you could comment on that little bit..

What we have talked about in broadband historically has been primarily maintenance business, certainly in our legacy products that being hybrid fiber coax primarily. What we saw in growth in our broadband business was a lot of fiber oriented products as they have bills from across the universal -- domestic suppliers for their broadband backbone.

There is alternative providers out there and they’re reacting to that somewhat. As Mark said, we currently have tailwinds in that business but you shouldn’t think about that as a growth business. We’re still in the process of cost containment and margin improvement.

We’re looking at the geographies that we sell in outside of North America to understand which ones we need to continue, at what pace, and also to look at the products that we sell and some of more commoditized products we would expect to see a change in approach, whether it be delivery, how we deliver those products to the customer or whether we need to continue to make them.

So a lot is happening in that business. We don’t see it currently as a huge growth engine as we do the other two.

But we think the performance that we saw for this quarter is significant and I think if you look, it’s probably the best performance we’ve seen since 2007 and these guys have done a great job in what they have done to improve this business this year..

Your next question comes from the line of Kulbinder Garcha with Credit Suisse..

This is I guess both of you. As we look for next year what you’re trying to I think tell us is you do expect some moderate growth of the organization. You expect the wireless business to grow. You expect the North American wireless business to grow but that growth is pretty much second half loaded.

I just want to clarify that before that before I have my main question.

Is that correct?.

Yes Kulbinder. That’s our outlook right now..

Okay great. And then my question then is, the confidence around down the phase that we acceleration implies I understand the CapEx and the carriers and I agree with you tend to be revised every quarter and what they guide for it and what they spend can really change as we’ve seen positively and negatively this year.

But the confidence that gives you that growth for next year, is it -- could you tell me, can you talk about the process you’ve have done to give us that confidence? Is it based upon -- I assume it's not based upon your orders. You book-to-bill is less than one right now.

So what are the other factor? Is it projects you're in discussion with? Is it indications you're getting from them? I'm just trying to understand that why [indiscernible] kind of mitigate is the risk that we get to January and this pause in the U.S is achieve deeper and longer for a few more quarters than we think as I think that confidence can be your best outlook now how you arriving there.

.

I think our relationship with the four carriers here is only improved over the course of the last few years. The position that we have in the market and the scale that we have is different than others. And so we appreciate the benefits of that.

The breadth of products that we have across the macro and in the DAS side is also different in scale than the other people certainly in the macro part here in North America. And the appreciation they have for our technology and what we're doing going forward there I think adds to our confidence.

I think further more from I guess a generic point of view is we’ve heard or seeing nothing as to I’m going to stop spending. I think I said earlier that this bandwidth appetite is only increasing and that plays well to what we do. So we don’t see a falloff in the business today.

I think as Mark has said multiple times, we’re still in the early process of our budget process. And you’ll get more clarity in February. But we see nothing there that says that the U.S. won’t be stable.

The outside of the U.S., as we’ve said we see significant growth as a percentage, both in Europe and Asia Pac during the quarter and we'd expect that to continue as these build outs of 4G LTE in Europe and the continuation of the improvement into 3G applications in most of Asia Pacific..

Your next question comes from the line of Mark Delaney with Goldman Sachs..

You mentioned one into grow the businesses as the first priority for use of cash and Eddy, I think you mentioned in potentially larger acquisition. I haven’t heard you talk about that regionally the commentary in the past. From my understanding it was more about tuck in.

So I was hopping help us understand what types of assets or product areas that you are considering in terms of acquisitions and then what type of leverage you be willing to run at if you did to a larger acquisition?.

Sure thanks Mark. What we have talked -- the question is come up I think on every call since we’ve gone public Mark, as far as we are not acquisitions are a part of our long term strategy.

And yes they have been and will continue to be and we’ve always talked about that running the gambit, from tuck-ins to consideration for things that could be more transformational. So you’re not hearing anything new as far strategy in that area today.

From a leverage standpoint we have been levered as high as five times twice in the last six or seven years, once following the Andrew acquisition and once about three and half years ago when we were taken private. And one of the strengths of the Company has been its history of strong free cash flow generation.

And so on prior years, as you know that’s been in the $200 million to $250 million range. That has moved up. We will generate north of $300 million this year and we continue to see that grow going forward. So that gives us straight optionality on how we deploy that cash.

But anything in the acquisition world would not be far up field from what we do today and from a segment standpoint we would tend to invest more in the enterprise and a wireless segments than perhaps in broadband..

Your next question comes from the line of Simon Leopold with Raymond James..

Thank you very much. I wanted to ask what I hope are two simple questions. One may be a little bit more complicated. On the simple side, obviously when you have some volume reduction, your gross margins come in.

If you could talk about what you’re thinking of for gross margin in the fourth quarter? And then more broadly, 2015 you're expecting the modest sales growth.

How are you thinking about gross and operating margin expansion in 2015? And then what I was hoping to follow up with is within the wireless business, I’d like to try to understand concentration issues, either customers and I’d like to think about end customers.

So I know you sometimes sell with partners and sell direct but end customer concentration or product concentration, I’m trying to understand how much of the weakness you are seeing is strictly about a product category like DAS, which had been really strong in the beginning year or whether it’s just very broad. Thank you. .

First part was the easy one. I’ll do that and give it to Eddy. .

I'm going to take the last one and then Mark can have the one I think is harder. I think as we’ve said, we sell to we think every carrier in the world where we can do business.

We sell in China, which we’ve also talked about that, we sell selectively there and with products that we can make -- actually make a profit on and there is not something to churn money. So that’s a market that we deal with differently than the rest of the world. So that’s a large market.

We appreciate, but it's not a market that we want to sell in, unless it's on a profitable basis. But we do have relationships with all three carriers as well as both of the OEMs. Given that we sell to everybody in the world, you can rack up outside of China who are larger and that possibly would be indicative of how we sell through them.

I am not going to answer your question directly. But I think you can put on a list of who the big guys are around the world and you can assume that they are larger to us than the smaller people. But we do have positions with each of them and we appreciate that diversity, both from a customer standpoint as well as a geographic standpoint..

Within wireless is it you're confident [ph] DAS cabling, antennas or….

Okay, in the macro side they generally -- when they buy, I think for the most part all of them, when they buy an antenna they are usually buying our cabling, our filtering, our combined equipment, connectors and all of those things. So, when you see a decline you’re going to see it across that universe in DAS.

It would be more project oriented and it really depends upon -- and let's say in a pause or a slowdown it depends upon what projects we're underway as opposed to the ones in planning. And end customers have a way of controlling one differently than the other..

And then large in inspection for first….

Operating margin Simon in the fourth quarter, we have guided to a slight pressure on operating margins compared to last year’s fourth quarter and it’s primarily due to mix. So, we expect to have a heavier mix of international versus U.S. sales for all reasons that we’ve talked about.

And I'm looking ahead into ’15 on growth in the range that we have described before. We would expect relatively stable margins on a year-over-year basis. .

Your next question comes from the line of Mark Sue with RBC Capital Markets..

I just had a quick question on working assumptions for price declines overall next year.

How does the negotiations actually work with customers and how should we think about unit growth and volume growth versus price declines in 2015?.

We participate in RFPs in the bidding process with customers. Our DAS business really is project oriented. We’re not selling pieces of things. We’re selling a unit. In our Enterprise business it's end-to-end solutions that we warrant. It's not selling a feet of cable or meters of fiber cable, things like that. So it's really all different.

In broadband we have generally annual or periodic contracts, the frame agreements which we understand, our position relative to others and that’s done on the bidding process. Our intent is not to have declines all the time.

We do a lot of a reengineering of our products to make them better and more efficient and give our costs down and maintain our margins. I think you can see over the course of time we’ve done not a bad job of that and so we’re proud about our cost reduction capability and our ability to engineer. We spend about a $130 million a year in development.

So it's important to us within the confines of our business to continue that. So it's not -- our intent is not be in the commodity price only marketplace, because we do believe that we have leading technology in the businesses that we serve and we believe that we need to be appropriately rewarded for that..

And then if I look at your cost structure, you did a commendable job with the overhead cost reductions on the fix side.

Anything else to kind to look at there to make the cost structure more variable considering that one thing that we’re not sure of, which is the duration of the downturn [indiscernible]?.

We manufacture about 85% of what we sell. Much of the componentry or sub-assemblies of that are made by some other people. So we have a lot of variable cost in that model that -- and our expectation is that, that will continue. We need to be close to our customers for the things that don’t ship well.

That’s more of a fixed version of the things that we can ship or done in low cost environments; a lot with temporary workers and I think we would continue that process as well..

Thank you very much for your question Mark..

Your next question comes from the line of George Notter with Jefferies..

I want to ask about Europe. You’ve mentioned it quite a few times on the call and it sounds like its really improving.

But can you help us better understand exactly what’s changing there? How many operators are deploying LTE relative to the number of operators over there in total? It is more about the competitive response vis-à-vis Vodafone getting out in the marketplace earlier? Can you kind of just give us more detail on what you’re seeing?.

Well all four of the U.S. are. And Europe is starting. Certainly Vodafone is the leader, Everything Everywhere certainly is a leader. The other carriers are doing that. It’s going to be at a pace that they, set not us. But that will come. We expected that Europe would start up. I think what we’ve seen in the recent months is this accelerating.

Our position with those carriers are improving. But I don’t have in my pocket a list of the number of them that are doing LTE. We do know that less than 40% of our business globally today is LTE. So the 3G market is still important to us..

But George we’re good growth. As we count, there is little bit north of 40 wireless carriers in Europe and our revenue growth is not concentrated. Vodafone and Project Spring of course captures the headlines, but our growth there is much broader than that and the growth itself is focused on LTE.

There is still good network modernization from a 3G standpoint that we see. And we’re also pleased with the timing and the performance of our Alifabs acquisition. That happens to fit in very nicely by design with growth in the wireless spending on Europe. So not focused on any single carrier..

Your next question comes from the line of Shawn Harrison with Longbow Research..

A clarification and a question. If DAS will be up double-digits in ‘15, that implies your macro-site solutions have to be down maybe mid-single-digits.

Is that a correct assumption? And then second, while I understand the need to invest in organic growth and M&A opportunities, if leverage is coming down and the view on your business continues, you continue to be positive on it for ‘15. Why not more strongly consider buyback, particularly just given the cash flow you’re generating right now..

Unless you want to jump in..

I am going to answer the easy one first. So our DAS business has outpaced the macro business for some years. And is still in the 20% kind of range relative to the total wireless business. So it’s not a new phenomenon that it will outpace the growth of the macro side.

We did have significant growth in our active wireless business of antennas and filters during the course of ‘14 and that would be something that would be more moderated I think during the course of ‘15. But I think as Mark has said now more than once that we haven’t done our budget yet.

We’re in the process and as we get more granularity we’ll certainly share as much as we can with you..

And then Shawn the other part of your question on capital allocation. Again we’ve got 600 plus million in cash on the balance sheet. We’re in somewhat new territory as far as size of cash balances. We expect those will expand as we move into the fourth quarter. Our priorities have not changed; first to reinvest.

Paying down debt for us is not a rational economic decision in the near-term and so therefore other shareholder friendly actions would be right behind reinvestment. So we don’t expect to accumulate large quantities of cash on our balance sheet for long periods of time..

Your next question comes from the line of Steven Fox with Cross Research..

Just one question from me. Could you guys speak to the quality of the wireless backlog during last quarter and into October, and just how that has sort of trended over the last several months? That would be helpful..

Sure Steven, with the book-to-bill overall at 0.9 times it was below that for our wireless business. And so we have eaten into backlog a bit as we have moved through the third quarter..

My question is are you seeing cancellations or are you just seeing orders slow significantly and has the pace sort of bottomed yet?.

No we aren’t seeing cancellations. Its order slowdown as far as -- new orders deliverable in the fourth quarter..

We did have during the initial pause of one our carriers -- some of the tariffs [ph] requested to do that. We did not accept cancellations, we’re still shipping. And I think the balance of inventory is getting well in hand now and we don’t really see it as a problem..

Your next question comes from the line of Brian Cohan with National Alliance..

I really just wanted to follow up George’s question earlier, which is with wireless growth having shifting toward Europe and APAC and obviously understanding your historical presence and strength in markets outside U.S., still wondering if you see or any opportunities or intent to shift meaningful resources, either to Europe or APAC or any of the geographies that are growing faster perhaps to catch a greater share of that growth?.

We already have meaningful resources in all of those places. We manufactured in APAC for close to 20 years. We’ve been in Europe for something a lot greater than that, Mexico, North America. So we be where we need to from a standpoint of either technology or close to the customer and we use lower cost environments for things to travel well.

So wherever the resources need to be we will place them, whether that be technology resources, where we design things all over the world on each of the current that’s we do business. So, whatever is necessary to balance our business, our cost structure with our customer base, we'll do..

And just to put that in perspective Brian, we have about 15,000 employees in the company. About 12,000 of those are located outside the United States and that includes research and development sales manufacturing..

And if I could, just a clarification on earlier. I'm not sure that I heard the commentary on trend visibility into wireless say versus fixing last quarter and then versus the typical visibility you have at this time of the year? Thanks..

Sure, less visibility for us of course are orders in backlog that we’re going to ship within the next month or two and as we had talked, our backlog has come down a bit.

Lot of our visibility that comes from customer relationships and that’s what gives us the capability of being able to ramp up when you see volume spike as they did in the first-half of the year and we’re also skilled in being able to take down that capacity. As volume slows they are currently.

So, our ability to ramp up and down is something we believe gives us a competitive edge and shows up in our bottom-line..

Yes and Brian, if you're just being specific to wireless, we deal both with the headquarters procurement organizations that give us indicators. We have people in every region of every carrier that see them probably on a daily basis and they cross check what those indications are to make sure that we don’t go out and either under build or over build.

So that doesn’t cause us exact preciseness on pauses, but I think in the course of normal business, it gives us a good indicator of what we need to do. So, our coverage base, we have in total over 700 people in our sales organization that have very close contact across all three segments with our customer base..

Operator, I think we have time for one more question if one is available. If not we’ll turn it over Eddie to conclude the call..

(Operator Instructions)..

Okay. We thank you for your continued support and interest in Commscope. We look forward to talking with you at the end of next quarter with our year-end results and until then we’ll see you..

Mark Olson:.

Thanks all..

Thank you for your participation. This does conclude today’s conference call. You may now disconnect..