ADC TELECOMMUNICATIONS INC, 424A, 1995-05-22

ADC TELECOMMUNICATIONS INC
424A, 1995-05-22
TELEPHONE & TELEGRAPH APPARATUS

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<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
<PAGE>
File Pursuant to 424(a)
Registration #33-59445
Subject to Completion, dated May 19, 1995

PROSPECTUS
5,500,000 SHARES

[LOGO]
COMMON STOCK
----------------

All of the shares of Common Stock offered hereby are being sold by ADC
Telecommunications, Inc. ("ADC" or the "Company"). Of the 5,500,000 shares,
4,400,000 shares are being offered in the United States by the U.S. Underwriters
(the "U.S. Offering") and 1,100,000 shares are being offered outside the United
States by the International Managers (the "International Offering" and together
with the U.S. Offering, the "Offerings"). The public offering price and
underwriting discounts and commissions are identical for both Offerings.

The Company's Common Stock is traded on the Nasdaq National Market under the
symbol "ADCT." On May 17, 1995, the last reported sale price of the Company's
Common Stock on the Nasdaq National Market was $32.00 per share. See "Price
Range of Common Stock and Dividend Policy."

---------------------

THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK. SEE "RISK
FACTORS."

---------------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.

<TABLE>
<CAPTION>
Underwriting
Discounts
Price to and Proceeds to
Public Commissions (1) Company (2)
<S> <C> <C> <C>
Per Share.......................... $ $ $
Total (3).......................... $ $ $
<FN>
(1) The Company has agreed to indemnify the U.S. Underwriters and the
International Managers against certain liabilities, including liabilities
under the Securities Act of 1933, as amended. See "Underwriting."
(2) Before deducting estimated expenses of the Offerings of $475,000 payable by
the Company.
(3) The Company has granted the U.S. Underwriters and the International
Managers 30-day options to purchase up to 825,000 additional shares of
Common Stock on the same terms and conditions as set forth above, solely to
cover over-allotments, if any. If such options are exercised in full, the
total Price to Public, Underwriting Discounts and Commissions and Proceeds
to the Company will be $ , $ and $ , respectively. See
"Underwriting."
</TABLE>

---------------------

The shares of Common Stock offered by this Prospectus are offered by the
U.S. Underwriters subject to prior sale, to withdrawal, cancellation or
modification of the offer without notice, to delivery to and acceptance by the
U.S. Underwriters and to certain other conditions. It is expected that delivery
of the certificates for the shares of Common Stock will be made at the offices
of Lehman Brothers Inc., New York, New York, on or about June , 1995.

---------------------

LEHMAN BROTHERS GOLDMAN, SACHS & CO.

June , 1995
<PAGE>
[INT'L VERSION]
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
<PAGE>
File Pursuant to 424(a)
Registration #33-59445
Subject to Completion, dated May 19, 1995

PROSPECTUS
5,500,000 SHARES

[LOGO]
COMMON STOCK
----------------

All of the shares of Common Stock offered hereby are being sold by ADC
Telecommunications, Inc. ("ADC" or the "Company"). Of the 5,500,000 shares,
1,100,000 shares are being offered outside the United States by the
International Managers (the "International Offering") and 4,400,000 shares are
being offered in the United States by the U.S. Underwriters (the "U.S. Offering"
and together with the International Offering, the "Offerings"). The public
offering price and underwriting discounts and commissions are identical for both
Offerings.

---------------------

THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK. SEE "RISK
FACTORS."

---------------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.

<TABLE>
<CAPTION>
Underwriting
Discounts
Price to and Proceeds to
Public Commissions (1) Company (2)
<S> <C> <C> <C>
Per Share.......................... $ $ $
Total (3).......................... $ $ $
<FN>
(1) The Company has agreed to indemnify the International Managers and the U.S.
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, as amended. See "Underwriting."
(2) Before deducting estimated expenses of the Offerings of $475,000 payable by
the Company.
(3) The Company has granted the International Managers and the U.S.
Underwriters 30-day options to purchase up to 825,000 additional shares of
Common Stock on the same terms and conditions as set forth above, solely to
cover over-allotments, if any. If such options are exercised in full, the
total Price to Public, Underwriting Discounts and Commissions and Proceeds
to the Company will be $ , $ and $ , respectively. See
"Underwriting."
</TABLE>

---------------------

The shares of Common Stock offered by this Prospectus are offered by the
International Managers subject to prior sale, to withdrawal, cancellation or
modification of the offer without notice, to delivery to and acceptance by the
International Managers and to certain other conditions. It is expected that
delivery of the certificates for the shares of Common Stock will be made at the
offices of Lehman Brothers Inc., New York, New York, on or about June , 1995.

---------------------

LEHMAN BROTHERS GOLDMAN SACHS INTERNATIONAL

June ,1995
<PAGE>
AVAILABLE INFORMATION

The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy and information statements and other information
with the Securities and Exchange Commission (the "Commission"). Reports, proxy
statements and other information filed by the Company with the Commission
pursuant to the Exchange Act may be inspected and copied at the public reference
facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the Commission's regional offices located at
Seven World Trade Center, 13th Floor, New York, New York 10048 and at Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of
such material also can be obtained from the Public Reference Branch of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates.

The Company has filed with the Commission a registration statement on Form
S-3 (herein, together with all amendments and exhibits, referred to as the
Registration Statement) under the Securities Act of 1933, as amended (the
"Securities Act"). This Prospectus does not contain all of the information set
forth in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission. For further
information, reference is hereby made to the Registration Statement.

DOCUMENTS INCORPORATED BY REFERENCE

The following documents filed with the Commission (File No. 0-1424) pursuant
to the Exchange Act are incorporated herein by reference: (i) the Company's
Annual Report on Form 10-K for the fiscal year ended October 31, 1994; (ii) the
Company's Quarterly Report on Form 10-Q for the quarterly period ended January
31, 1995; (iii) the description of the Company's Common Stock contained in Item
1 of Amendment No. 2 on Form 8 to the Company's Registration Statement on Form
8-A filed with the Commission on August 16, 1989; and (iv) the description of
the Company's Common Stock Purchase Rights contained in its Registration
Statement on Form 8-A filed with the Commission on September 23, 1986, as
amended by an Amendment No. 1 on Form 8 to the Company's Registration Statement
on Form 8-A on August 16, 1989.

All reports and other documents subsequently filed by the Company pursuant
to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
Prospectus and prior to the termination of this offering shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from the
date of filing of such documents. Any statement incorporated herein shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part
of the Registration Statement or this Prospectus. The Company will provide
without charge to each person to whom this Prospectus is delivered, upon the
written or oral request of such person, a copy of any and all of the documents
which are incorporated herein by reference (other than exhibits to such
documents, unless such exhibits are specifically incorporated by reference into
such document). Requests for such documents should be directed to ADC
Telecommunications, Inc., Investor Relations, 4900 West 78th Street,
Minneapolis, Minnesota 55435, or by calling (612) 938-8080.
---------------------

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK AT
A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

IN CONNECTION WITH THIS OFFERING, CERTAIN UNDERWRITERS AND SELLING GROUP
MEMBERS (IF ANY) MAY ENGAGE IN PASSIVE MARKET MAKING TRANSACTIONS IN THE COMMON
STOCK OF THE COMPANY ON THE NASDAQ NATIONAL MARKET IN ACCORDANCE WITH RULE
10b-6A UNDER THE EXCHANGE ACT. SEE "UNDERWRITING."
---------------------

Soneplex-Registered Trademark-, FiberGuide-Registered Trademark-,
Homeworx-TM-, DV6000-TM-, PixlNet-TM-, CityWide-TM-, CityCell-TM-, CityRad-TM-,
AAC-1-TM-, AAC-3-TM-, PatchMate-TM- and LightTracer-TM- are trademarks of the
Company. All other trademarks appearing in this Prospectus are the property of
their respective holders.

2
<PAGE>
PROSPECTUS SUMMARY

THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED
INFORMATION AND CONSOLIDATED FINANCIAL STATEMENTS, INCLUDING NOTES THERETO,
APPEARING ELSEWHERE IN, OR INCORPORATED BY REFERENCE INTO, THIS PROSPECTUS.
UNLESS OTHERWISE INDICATED: (I) ALL SHARE AND PER SHARE AMOUNTS HAVE BEEN
RESTATED TO REFLECT A TWO-FOR-ONE STOCK SPLIT OF THE COMPANY'S COMMON STOCK,
$.20 PAR VALUE (THE "COMMON STOCK"), EFFECTED IN THE FORM OF A 100% STOCK
DIVIDEND IN JUNE 1993 AND AN ADDITIONAL TWO-FOR-ONE STOCK SPLIT OF THE COMMON
STOCK EFFECTED IN THE FORM OF A 100% STOCK DIVIDEND IN FEBRUARY 1995; (II) THE
TERMS "COMPANY" AND "ADC" REFER TO ADC TELECOMMUNICATIONS, INC. AND ITS WHOLLY
OWNED SUBSIDIARIES, UNLESS THE CONTEXT OTHERWISE REQUIRES; (III) 1992, 1993,
1994 AND 1995 REFER TO THE COMPANY'S FISCAL YEARS ENDED OR ENDING OCTOBER 31,
1992, 1993, 1994 AND 1995, RESPECTIVELY; AND (IV) THE INFORMATION CONTAINED IN
THIS PROSPECTUS ASSUMES NO EXERCISE OF THE UNDERWRITERS' OVER-ALLOTMENT OPTION.

THE COMPANY

ADC designs, manufactures and markets transmission, networking, access and
connectivity products for use in broadband global networks. The Company's wide
range of products employ fiber, hybrid fiber coax, wireless and traditional
copper-based technologies. The Company's customers include: public network
providers, which consist of all seven of the Regional Bell Operating Companies
("RBOCs"), other telephone companies, long distance carriers, wireless service
providers, the major cable TV operators and other domestic public network
providers; private and governmental network providers (such as various large
business customers and governmental agencies); and international network
operators. The Company also sells indirectly to these customers through the
major telecommunications original equipment manufacturers ("OEMs"). The
Company's products enable these network providers to build and upgrade their
networks to support increasing user demand for voice, data and video services.

ADC seeks to capitalize on opportunities in the evolving global
telecommunications market by providing equipment, services and integrated
solutions for its customers' voice, data and video needs. Key components of the
Company's strategy include: (i) focusing on broadband (1.544 Mbps or higher)
network opportunities, (ii) providing end-to-end network solutions, (iii)
leveraging technological capabilities across product groups, (iv) expanding
international presence and (v) pursuing strategic alliances and acquisitions.
ADC offers a broad line of telecommunications equipment that provides customers
with solutions for key network needs from the central office, through the local
loop, into the customer premise and across the enterprise network. ADC seeks to
leverage its substantial expertise in fiber optics, broadband, video and
wireless technologies across its product groups in order to develop new product
architectures and network management tools for its customers' evolving voice,
data and video network needs in a variety of applications.

The Company's products can be categorized into three general product groups:
transmission, enterprise networking and broadband connectivity. These product
groups accounted for 23%, 28% and 49%, respectively, of the Company's net sales
for the year ended October 31, 1994 and 28%, 24% and 48%, respectively, of the
Company's net sales for the six months ended April 30, 1995. The Company's
emphasis on fiber optic products is demonstrated by ADC's increasing net sales
of fiber optic products over each of the last three years.

A majority of the Company's sales are made by a direct sales force, and the
Company maintains sales offices throughout the United States and also maintains
offices in Canada, Europe, the Pacific Rim, Australia and Central and South
America. The public network providers, private and governmental network
providers and international sales accounted for 57%, 28% and 15%, respectively,
of the Company's net sales in 1994 and 57%, 25%, and 18%, respectively, of net
sales for the six months ended April 30, 1995.

The Company was incorporated under the laws of the State of Minnesota in
1953. The Company's principal offices are located at 12501 Whitewater Drive,
Minnetonka, Minnesota 55343 and its telephone number at that location is (612)
938-8080.

3
<PAGE>
THE OFFERING

<TABLE>
<S> <C>
Common Stock offered............................ 5,500,000 shares
Common Stock to be outstanding after the
offering....................................... 61,645,662 shares(1)
Nasdaq National Market symbol................... ADCT
Use of Proceeds................................. General corporate purposes, including
working capital, capital expenditures and
possible acquisitions or strategic
alliances. See "Use of Proceeds."
</TABLE>

SUMMARY CONSOLIDATED FINANCIAL DATA

<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEARS ENDED OCTOBER 31, APRIL 30,
---------------------------------- ----------------------
1992 1993 1994 1994 1995
---------- ---------- ---------- ---------- ----------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
STATEMENT OF INCOME DATA:
Net sales.......................................... $ 316,496 $ 366,118 $ 448,735 $ 204,749 $ 262,116
Gross profit....................................... $ 161,422 $ 187,546 $ 227,287 $ 103,342 $ 128,411
Operating income (2)............................... $ 35,873 $ 50,449 $ 64,379 $ 26,758 $ 31,384
Net income before extraordinary item (3)........... $ 21,026 $ 31,636 $ 40,521 $ 16,780 $ 20,855
Net income......................................... $ 21,026 $ 31,636 $ 39,071 $ 15,330 $ 20,855
Average common shares outstanding.................. 54,176 54,998 55,610 55,520 55,974
Earnings per share before extraordinary item (3)... $ .39 $ .58 $ .73 $ .30 $ .37
Earnings per share................................. $ .39 $ .58 $ .70 $ .27 $ .37
</TABLE>

<TABLE>
<CAPTION>
APRIL 30, 1995
OCTOBER 31, --------------------------
1994 ACTUAL AS ADJUSTED(4)
--------------- ---------- --------------
<S> <C> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents......................................... $ 49,512 $ 37,135 $ 205,180
Working capital................................................... 132,015 149,389 317,434
Total assets...................................................... 334,684 353,297 521,342
Total debt........................................................ 810 410 410
Total stockholders' investment.................................... 264,758 286,937 454,982
<FN>
------------------------
(1) Based on actual shares outstanding as of April 30, 1995. Excludes an
aggregate of 4,772,360 shares reserved for issuance under the Company's
incentive and stock option plans, of which options to purchase 2,956,396
shares were outstanding as of April 30, 1995.

(2) Operating income was reduced by expenses primarily related to reductions in
personnel which totalled $3,800,000 in the year ended October 31, 1992 and
$3,914,000 in the six months ended April 30, 1995. See Note 9 of Notes to
Consolidated Financial Statements.

(3) An extraordinary charge of $1,450,000 (or $.03 per share), net of income
taxes, recorded in the quarter ended January 31, 1994, represents the
charge to clean up and repair the damage from an earthquake at the
Company's facility in California. See Note 2 of Notes to Consolidated
Financial Statements.

(4) Adjusted to reflect the sale of the 5,500,000 shares offered by the
Company, at the assumed public offering price of $32.00 per share.
</TABLE>

4
<PAGE>
RISK FACTORS

The following risk factors should be considered carefully in addition to the
other information contained in or incorporated by reference into this Prospectus
before purchasing the Common Stock offered hereby:

RAPID TECHNOLOGICAL CHANGE AND IMPORTANCE OF NEW PRODUCTS

The telecommunications equipment industry is characterized by rapid
technological change, evolving industry standards, changing market conditions
and frequent new product introductions and enhancements. The introduction of
products embodying new technologies or the emergence of new industry standards
can render existing products or products under development obsolete or
unmarketable. The Company's ability to anticipate changes in technology and
industry standards and to successfully develop and introduce new products on a
timely basis will be a significant factor in the Company's ability to grow and
remain competitive. New product development often requires long-term forecasting
of market trends, development and implementation of new technologies and
processes and a substantial capital commitment. In particular, the Company has
recently invested substantial resources toward the development of new products
such as its Homeworx system utilizing hybrid fiber coax technology. The Company
has shipped the Homeworx system for video-only applications to a limited number
of customers for initial deployment and is engaged in extensive field testing of
versions of its Homeworx system designed for deployment in integrated video and
telephony and telephony-only broadband applications. Development and customer
acceptance of new products is inherently uncertain, and there can be no
assurance that the Company will successfully complete the development of the
enhanced versions of the Homeworx system for telephony applications or other new
products on a timely basis or that such products will be commercially
successful. Any failure by the Company to anticipate or respond on a
cost-effective and timely basis to technological developments, changes in
industry standards or customer requirements, or any significant delays in
product development or introduction, could have a material adverse effect on the
Company's business, operating results and financial condition. See
"Business--Product Groups" and "--Research and Development."

UNCERTAIN MARKET FOR BROADBAND NETWORK PRODUCTS

Historically, the Company's principal product offerings have generally
consisted of copper-based and fiber-based products designed to address the needs
of its customers for transmission, enterprise networking and connectivity
applications on traditional telephony networks. With the growth of multimedia
applications and the associated development of enhanced voice, data and video
transmission services, the Company's more recent product offerings and research
and development efforts have increasingly focused on emerging technologies and
applications relating to the broadband telecommunications equipment market. The
market for broadband telecommunications equipment is evolving and rapidly
changing. The Company's future growth is dependent in part on its ability to
successfully develop and commercially introduce new products in each of its
product groups addressing this market, as well as the growth in this market. The
growth in the market for such broadband telecommunications products is dependent
on a number of factors, including the amount of capital expenditures by public
network providers, regulatory and legal developments and end-user demand for
integrated voice, data, video and other network services. There can be no
assurance that the Company's new or enhanced products will meet with market
acceptance or be profitable. See "Management's Discussion and Analysis of
Financial Conditions and Results of Operations--Results of Operations."

COMPETITION

Competition in the telecommunications equipment industry is intense, and the
Company believes that competition may increase substantially with the deployment
of broadband networks and potential regulatory changes. Many of the Company's
foreign and domestic competitors have more extensive engineering, manufacturing,
marketing, financial and personnel resources than those of the Company. The
Company believes its success in competing with other manufacturers of
telecommunications equipment depends primarily on its engineering, manufacturing
and marketing skills, the price, quality and reliability of its products, and
its delivery and service capabilities. While the market for the Company's
products has not historically been characterized by significant price
competition, the Company may face increasing pricing pressures from current and
future competitors in certain or all of the markets for its products. In
addition, the Company believes that technological change, the increasing
addition of data, video and other services to

5
<PAGE>
networks, continuing regulatory change and industry consolidation or new
entrants will continue to cause rapid evolution in the competitive environment
of the telecommunications equipment market, the full scope and nature of which
is difficult to predict at this time. Increased competition could result in
price reductions, reduced margins and loss of market share by the Company. There
can be no assurance that the Company will be able to compete successfully with
its existing or new competitors or that competitive pressures faced by the
Company will not materially and adversely affect its business, operating results
and financial condition. See "Business--Competition."

FLUCTUATIONS IN OPERATING RESULTS

The Company's operating results may fluctuate significantly from quarter to
quarter due to several factors, including without limitation the volume and
timing of orders from and shipments to major customers, the timing of new
product announcements by and the availability of product from the Company or its
competitors, overall level of capital expenditures by public network providers,
market acceptance of new and enhanced versions of the Company's products,
variations in the mix of products sold by the Company or its sales channels and
the availability and cost of key components. The Company's expense levels are
based in part on expectations of future revenues. If revenue levels in a
particular period do not meet expectations, operating results will be adversely
affected. In addition, the Company's results of operations are subject to
seasonal factors. The Company historically has experienced a stronger demand for
its products in the fourth fiscal quarter, primarily as a result of customer
budget cycles and Company year-end incentives, and has experienced a weaker
demand for its products in the first fiscal quarter, primarily as a result of
the number of holidays in late November, December and early January and a
general industry slowdown during that period. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations--Results of
Operations--Quarterly Results of Operations."

CHANGING REGULATORY ENVIRONMENT

The telecommunications industry is subject to regulation in the United
States and other countries. Federal and state regulatory agencies regulate most
of the Company's domestic customers. The Company's business is dependent upon
the continued growth of the telecommunications industry in the United States and
internationally. Legislation has been introduced in the U.S. Congress that would
lift certain restrictions on the ability of companies, including RBOCs and other
customers of the Company, to compete with the Company; however, the outcome and
the scope of the legislative process and the resulting effect on the market for
the Company's products is difficult to predict at this time. Changes in current
or future laws or regulations, in the United States or elsewhere, could
materially and adversely affect the Company's business. See "Business--Industry
Background."

INTERNATIONAL OPERATIONS

International sales accounted for 15.6%, 16.1%, 15.0% and 17.8% of the
Company's net sales in fiscal 1992, 1993, 1994 and the six months ended April
30, 1995, respectively, and the Company believes that international sales may
increase as a percentage of net sales in the future. In addition, the Company
owns or has subcontracted for manufacturing operations located in Mexico,
Australia and China. Due to its export sales and international manufacturing
operations, the Company is subject to the risks of conducting business
internationally, including unexpected changes in legislative or regulatory
requirements, currency fluctuations which could materially and adversely affect
U.S. dollar revenues or operating expenses, tariffs and other barriers and
restrictions, potentially longer payment cycles, greater difficulty in accounts
receivable collection, potentially adverse taxes, and the burdens of complying
with a variety of foreign laws and telecommunications standards. The Company
also is subject to general geopolitical risks, such as political and economic
instability and changes in diplomatic and trade relationships, in connection
with its international operations. There can be no assurance that such factors
will not materially and adversely affect the Company's operations in the future
or require the Company to modify significantly its current business practices.
In addition, the laws of certain foreign countries may not protect the Company's
proprietary technology to the same extent as do the laws of the United States.
See "Business--Sales and Marketing" and "--Manufacturing and Facilities."

6
<PAGE>
DEPENDENCE ON PROPRIETARY TECHNOLOGY

The Company's future success depends in part upon its proprietary
technology. Although the Company attempts to protect its proprietary technology
through patents, copyrights and trade secrets, it also believes that its future
success will depend upon product development, technological expertise and
marketing efforts. There can be no assurance that the Company will be able to
protect its technology or that competitors will not be able to develop similar
technology independently. The Company has received and may in the future receive
from third parties, including some of its competitors, notices claiming that it
is infringing third-party patents or other proprietary rights. There can be no
assurance that the Company would prevail in any litigation over third-party
claims, or that it would be able to license any valid and infringed patents on
commercially reasonable terms. Furthermore, litigation, regardless of its
outcome, could result in substantial cost to and diversion of effort by the
Company. Any litigation or successful infringement claims by third parties could
materially and adversely affect the Company's business, operating results and
financial condition. See "Business--Product Groups" and "--Research and
Development."

VOLATILITY OF STOCK PRICE

Based on the trading history of its stock, the Company believes factors such
as announcements of new products by the Company or its competitors, quarterly
fluctuations in the Company's financial results, customer contract awards,
developments in telecommunications regulation and general conditions in the
telecommunications equipment industry have caused and are likely to continue to
cause the market price of the Company's Common Stock to fluctuate substantially.
In addition, telecommunications equipment company stocks have experienced
significant price and volume fluctuations that often have been unrelated to the
operating performance of such companies. This market volatility may adversely
affect the market price of the Company's Common Stock. See "Price Range of
Common Stock and Dividend Policy."

7
<PAGE>
USE OF PROCEEDS

The net proceeds to the Company from the sale of the 5,500,000 shares of
Common Stock being offered hereby are estimated to be $168,045,000 ($193,323,000
if the Underwriters' over-allotment option is exercised in full), assuming a
public offering price of $32.00 per share and after deducting estimated
underwriting discounts and commissions and offering expenses. The Company
intends to use the net proceeds for general corporate purposes, including
working capital, capital expenditures and possible acquisitions or strategic
alliances. The Company believes that success in its industry requires
substantial financial liquidity and capital to maintain the flexibility to take
advantage of business opportunities as they arise. The Company also continually
evaluates investment in or the acquisition of complementary businesses, assets
and technologies and may use a portion of the net proceeds of this offering for
such investments or acquisitions. The Company is presently evaluating various
potential acquisitions; however, at this time the Company has no agreements or
commitments with respect to any material investment or acquisition. Pending such
uses, the Company intends to invest the net proceeds in short-term, investment
grade, interest-bearing obligations.

PRICE RANGE OF COMMON STOCK AND DIVIDEND POLICY

The Company's Common Stock is traded on the Nasdaq National Market under the
symbol "ADCT." The following table sets forth, for the periods indicated, high
and low sale prices for the Common Stock on the Nasdaq National Market. All
prices have been restated to reflect a two-for-one stock split effected in the
form of a 100% stock dividend in June 1993 and an additional two-for-one stock
split effected in the form of a 100% stock dividend in February 1995.

<TABLE>
<CAPTION>
LOW HIGH
------- -------
<S> <C> <C>
FISCAL YEAR ENDED OCTOBER 31, 1993
First Quarter................................... $ 9 1/8 $12 3/8
Second Quarter.................................. 9 3/8 11 3/4
Third Quarter................................... 10 1/8 15 5/8
Fourth Quarter.................................. 14 5/8 22
FISCAL YEAR ENDED OCTOBER 31, 1994
First Quarter................................... 15 1/2 19 3/8
Second Quarter.................................. 16 1/8 21 3/8
Third Quarter................................... 18 1/8 23 3/8
Fourth Quarter.................................. 18 3/4 23 7/8
FISCAL YEAR ENDING OCTOBER 31, 1995
First Quarter................................... 19 3/4 25 1/2
Second Quarter.................................. 22 5/8 34 1/4
Third Quarter (through May 17, 1995)............ 29 3/4 33 1/2
</TABLE>

No cash dividends have been declared or paid during the past five years. The
Company currently anticipates that it will retain any future earnings for use in
its business and does not anticipate paying any cash dividends in the
foreseeable future. The Company's revolving credit agreements have certain
restrictions on the payment of cash dividends. As of April 30, 1995, there were
approximately 2,450 holders of record of the Common Stock.

8
<PAGE>
CAPITALIZATION

The following table sets forth the consolidated capitalization of the
Company at April 30, 1995 and as adjusted to give effect to the issuance and
sale by the Company of the 5,500,000 shares of Common Stock offered hereby, at
an assumed public offering price of $32.00 per share and the application of the
estimated net proceeds therefrom. The financial data in the following table
should be read in conjunction with the Company's Consolidated Financial
Statements (and notes thereto) at April 30, 1995 contained in this Prospectus or
incorporated by reference herein.

<TABLE>
<CAPTION>
AS OF APRIL 30, 1995
-----------------------
ACTUAL AS ADJUSTED
---------- -----------
(IN THOUSANDS)
<S> <C> <C>
Long-term debt, less current maturities.................................................. $ -- $ --
Stockholders' Investment:
Preferred Stock, no par value, 10,000,000 shares authorized; none issued or
outstanding........................................................................... -- --
Common Stock, $.20 par value, 100,000,000 shares authorized; 56,146,000 shares issued
and outstanding; 61,646,000 shares issued and outstanding, as adjusted (1)............ 11,229 12,329
Paid-in capital........................................................................ 31,703 198,648
Retained earnings...................................................................... 246,331 246,331
Deferred compensation.................................................................. (875) (875)
Cumulative translation adjustment...................................................... (1,451) (1,451)
---------- -----------
Total stockholders' investment....................................................... 286,937 454,982
---------- -----------
Total capitalization............................................................... $ 286,937 $ 454,982
---------- -----------
---------- -----------
<FN>
------------------------
(1) Excludes an aggregate of 4,772,360 shares reserved for issuance under the
Company's incentive and stock option plans, of which options to purchase
2,956,396 shares were outstanding as of April 30, 1995.
</TABLE>

9
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA

The selected consolidated financial data presented below as of October 31,
1993 and 1994 and for the years ended October 31, 1992, 1993 and 1994 have been
derived from the Consolidated Financial Statements of the Company included
elsewhere in this Prospectus. The selected consolidated financial data presented
below as of October 31, 1990, 1991 and 1992 and for the years ended October 31,
1990 and 1991 have been derived from the Consolidated Financial Statements of
the Company not included in this Prospectus. The selected consolidated financial
data presented below as of and for the six months ended April 30, 1994 and 1995
have been derived from unaudited interim consolidated financial statements of
the Company. In the opinion of the Company's management, the unaudited interim
consolidated financial statements have been prepared on the same basis as the
audited consolidated financial statements and include all adjustments,
consisting of normal recurring adjustments, necessary to fairly state the
information set forth therein. The results of operations for the six months
ended April 30, 1995 are not necessarily indicative of the results to be
expected for a full year. Such data should be read in conjunction with the
Consolidated Financial Statements, related notes and other financial information
contained in this Prospectus or incorporated by reference herein. See "Documents
Incorporated by Reference."

<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEARS ENDED OCTOBER 31, APRIL 30,
----------------------------------------------------- --------------------
1990 1991 1992 1993 1994 1994 1995
--------- --------- --------- --------- --------- --------- ---------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF INCOME DATA:
Net sales....................................... $ 259,802 $ 293,839 $ 316,496 $ 366,118 $ 448,735 $ 204,749 $ 262,116
Cost of product sold............................ 133,802 148,614 155,074 178,572 221,448 101,407 133,705
--------- --------- --------- --------- --------- --------- ---------
Gross profit.................................... 126,000 145,225 161,422 187,546 227,287 103,342 128,411
--------- --------- --------- --------- --------- --------- ---------
Expenses:
Development and product engineering........... 25,462 32,315 36,063 40,988 48,974 23,250 29,146
Selling and administration.................... 62,793 74,369 82,966 93,311 110,799 51,767 62,401
Goodwill amortization......................... 920 1,953 2,720 2,798 3,135 1,567 1,566
Personnel reduction........................... -- -- 3,800 -- -- -- 3,914
--------- --------- --------- --------- --------- --------- ---------
Total expenses.............................. 89,175 108,637 125,549 137,097 162,908 76,584 97,027
--------- --------- --------- --------- --------- --------- ---------
Operating income................................ 36,825 36,588 35,873 50,449 64,379 26,758 31,384
Other income (expense), net:
Interest...................................... 1,255 (108) (942) 183 1,158 297 1,203
Other......................................... 92 (75) (205) (895) (1,216) (421) --
--------- --------- --------- --------- --------- --------- ---------
Income before income taxes and extraordinary
item........................................... 38,172 36,405 34,726 49,737 64,321 26,634 32,587
Provision for income taxes...................... 15,269 14,380 13,700 18,101 23,800 9,854 11,732
--------- --------- --------- --------- --------- --------- ---------
Net income before extraordinary item............ 22,903 22,025 21,026 31,636 40,521 16,780 20,855
Extraordinary item, net of taxes (1)............ -- -- -- -- (1,450) (1,450) --
--------- --------- --------- --------- --------- --------- ---------
Net income...................................... $ 22,903 $ 22,025 $ 21,026 $ 31,636 $ 39,071 $ 15,330 $ 20,855
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
Average common shares outstanding............... 53,060 53,476 54,176 54,998 55,610 55,520 55,974
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
Earnings per share before extraordinary item
(1)............................................ $ .43 $ .41 $ .39 $ .58 $ .73 $ .30 $ .37
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
Earnings per share.............................. $ .43 $ .41 $ .39 $ .58 $ .70 $ .27 $ .37
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
Orders (2)...................................... $ 265,272 $ 284,993 $ 322,823 $ 375,637 $ 462,332 $ 205,891 $ 269,679
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
BALANCE SHEET DATA (AT PERIOD END):
Cash and cash equivalents....................... $ 25,978 $ 30,109 $ 20,484 $ 16,324 $ 49,512 $ 21,764 $ 37,135
Working capital................................. 65,190 79,005 75,284 87,630 132,015 104,214 149,389
Total assets.................................... 181,665 247,169 240,762 280,054 334,684 293,767 353,297
Total debt...................................... 6,098 45,046 14,434 1,110 810 810 410
Total stockholders' investment.................. 134,013 158,374 182,188 220,394 264,758 237,163 286,937
<FN>
------------------------------
(1) An extraordinary charge of $1,450,000 (or $.03 per share), net of income
taxes, recorded in the quarter ended January 31, 1994, represents the
charge to clean up and repair the damage from an earthquake at the
Company's facility in California.
(2) Orders reported for each period reflect purchase orders received during
such period for which shipment has been scheduled within one year.
Substantially all of the Company's products are shipped within the period
that the related orders are received. As a result, orders correspond
generally to net sales for the specified period and are not necessarily
indicative of future results.
</TABLE>

10
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

The Company offers a broad range of products to address key areas of the
telecommunications network infrastructure. To meet its customers' needs, the
Company offers equipment, services and integrated solutions within the following
general functional product groups: transmission, enterprise networking and
broadband connectivity. The Company's transmission products are sold primarily
to public network providers in the United States and internationally. The
Company's enterprise networking products are sold primarily to private voice,
data and video network providers around the world. The Company's broadband
connectivity products are sold to both public and private network providers.

RESULTS OF OPERATIONS

The percentage relationships to net sales of certain income and expense
items for the three years ended October 31, 1994 and the six month periods ended
April 30, 1994 and 1995 are contained in the following table:

<TABLE>
<CAPTION>
SIX MONTHS
YEARS ENDED OCTOBER 31, ENDED APRIL 30,
------------------------------- --------------------
1992 1993 1994 1994 1995
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Net sales.............................................................. 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of product sold................................................... (49.0) (48.8) (49.3) (49.5) (51.0)
--------- --------- --------- --------- ---------
Gross profit........................................................... 51.0 51.2 50.7 50.5 49.0
Expenses:
Development and product engineering.................................. (11.4) (11.2) (11.0) (11.3) (11.1)
Selling and administration........................................... (26.2) (25.5) (24.7) (25.3) (23.8)
Goodwill amortization................................................ (.9) (.7) (.7) (.8) (.6)
Personnel reduction.................................................. (1.2) -- -- -- (1.5)
--------- --------- --------- --------- ---------
Operating income....................................................... 11.3 13.8 14.3 13.1 12.0
Other income (expense), net:
Interest............................................................. (.3) .1 .3 .1 .5
Other................................................................ -- (.3) (.3) (.2) --
--------- --------- --------- --------- ---------
Income before income taxes and extraordinary item...................... 11.0 13.6 14.3 13.0 12.5
Provision for income taxes............................................. (4.4) (5.0) (5.3) (4.8) (4.5)
--------- --------- --------- --------- ---------
Net income before extraordinary item................................... 6.6 8.6 9.0 8.2 8.0
Extraordinary item, net of taxes....................................... -- -- (.3) (.7) --
--------- --------- --------- --------- ---------
Net income............................................................. 6.6% 8.6% 8.7% 7.5% 8.0%
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
</TABLE>

11
<PAGE>
The following table sets forth the Company's net sales for the three years
ended October 31, 1994 and the six month periods ended April 30, 1994 and 1995
for each of the functional product groups described above:

<TABLE>
<CAPTION>
YEARS ENDED OCTOBER 31, SIX MONTHS ENDED APRIL 30,
--------------------------------------------------------- -------------------------------------
1992 1993 1994 1994 1995
----------------- ----------------- ----------------- ----------------- -----------------
PRODUCT GROUP NET SALES % NET SALES % NET SALES % NET SALES % NET SALES %
------------------------------ --------- ----- --------- ----- --------- ----- --------- ----- --------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Transmission.................. $ 60,500 19.1% $ 69,386 18.9% $103,694 23.1% $ 45,762 22.3% $ 74,751 28.5%
Enterprise networking......... 84,227 26.6 95,540 26.1 123,300 27.5 55,196 27.0 62,112 23.7
Broadband connectivity........ 171,769 54.3 201,192 55.0 221,741 49.4 103,791 50.7 125,253 47.8
--------- ----- --------- ----- --------- ----- --------- ----- --------- -----
Total......................... $316,496 100.0% $366,118 100.0% $448,735 100.0% $204,749 100.0% $262,116 100.0%
--------- ----- --------- ----- --------- ----- --------- ----- --------- -----
--------- ----- --------- ----- --------- ----- --------- ----- --------- -----
</TABLE>

SIX MONTHS ENDED APRIL 30, 1995 COMPARED TO SIX MONTHS ENDED APRIL 30, 1994

NET SALES. Net sales for the six months ended April 30, 1995 were $262.1
million, a 28.0% increase over $204.7 million of net sales for the six months
ended April 30, 1994. This increase was primarily the result of a 63.3% increase
in net sales of transmission products, predominantly fiber optic systems sold to
public telecommunications network providers. Net sales of fiber optic products
represented 39.7% and 33.5% of total net sales for the six months ended April
30, 1995 and 1994, respectively.

In the six months ended April 30, 1995, net sales of broadband connectivity
products increased 20.7% over the six months ended April 30, 1994, reflecting
the Company's success in selling these products into new global broadband market
applications. The Company believes that future sales of broadband connectivity
products will continue to account for a substantial portion of the Company's
revenues, although net sales of these products may continue to decline as a
percentage of total net sales primarily due to the ongoing evolution of
technologies in the telecommunications marketplace.

Net sales of enterprise networking products for the six months ended April
30, 1995 increased 12.5% over the six months ended April 30, 1994. This increase
reflects significant growth in net sales of access equipment, which was
partially offset by a decrease in net sales of Local Area Network ("LAN")
equipment. Recognizing changes in the competitive environment for LAN equipment,
the Company has realigned its Kentrox Industries Inc. ("Kentrox") and Fibermux
Corporation ("Fibermux") subsidiaries, which market primarily enterprise
networking products, into one business unit to better address the industry trend
toward integration of LAN and Wide Area Network ("WAN") technologies and
products. See "Business -- Product Groups -- Enterprise Networking."

GROSS PROFIT. The gross profit percentage was 49.0% of net sales for the
six months ended April 30, 1995 compared to a gross profit percentage of 50.5%
for the six months ended April 30, 1994. The decline in gross profit percentage
was primarily the result of a change in product sales mix toward sales of newer,
lower margin products which address emerging broadband applications. The
Company's future gross profit percentage will continue to be affected by product
mix, the timing of new product introductions and manufacturing volume, among
other factors.

OPERATING EXPENSES. Operating expenses were $97.0 million for the six
months ended April 30, 1995, an increase of 26.7% over $76.6 million of
operating expenses for the six months ended April 30, 1994. Operating expenses
represented 37.0% of net sales for the six months ended April 30, 1995 compared
to 37.4% of net sales for the six months ended April 30, 1994. The increase in
absolute dollars of operating expenses from period to period was due primarily
to the expanded operations associated with higher revenue levels, and a charge
of $3.9 million related primarily to a personnel reduction at Fibermux resulting
from the realignment of the Company's Kentrox and Fibermux subsidiaries. This
charge increased operating expenses as a percentage of net sales by 1.5% for the
six months ended April 30, 1995. All other operating expense categories
decreased as a percentage of net sales for the six months ended April 30, 1995,
reflecting the Company's operating leverage as net sales increased. See Note 9
of Notes to Consolidated Financial Statements.

12
<PAGE>
Development and product engineering expenses were $29.1 million for the six
months ended April 30, 1995, an increase of 25.4% over $23.3 million for the six
months ended April 30, 1994, reflecting substantial product development efforts
in each of the Company's three functional product groups. Selling and
administration expenses were $62.4 million for the six months ended April 30,
1995, an increase of 20.5% over $51.8 million of such expenses for the six
months ended April 30, 1994, primarily as a result of selling activities
associated with new product introductions and additional personnel costs related
to expanded operations.

The Company believes that, given the rapidly changing technological and
competitive environment in the telecommunications equipment industry, continued
commitment to product development efforts will be required for the Company to
remain competitive. Accordingly, the Company intends to continue to allocate
substantial resources to product development for each of its three functional
product groups. However, the Company recognizes the need to balance the cost of
product development with expense control.

OTHER INCOME (EXPENSE), NET. For the six month periods ended April 30, 1995
and 1994, net interest income represents interest income on cash balances. See
"--Liquidity and Capital Resources."

INCOME TAXES. The Company's effective income tax rate was 36.0% for the six
months ended April 30, 1995 and 37.0% for the six months ended April 30, 1994.
These rates reflect $1.6 million of non-deductible goodwill amortization
included in operating expenses in each of the six month periods and the
beneficial impact of tax credits.

EXTRAORDINARY ITEM. An extraordinary charge of $1.5 million (or $.03 per
share), net of income taxes, was recorded in the six month period ended April
30, 1994, representing expenses related to the clean up and repair of damage to
the Fibermux facility resulting from an earthquake in January 1994. See Note 2
of Notes to Consolidated Financial Statements

NET INCOME. Reflecting all of the matters discussed above, net income was
$20.9 million (or $.37 per share) for the six months ended April 30, 1995, an
increase of 36.0% over $15.3 million (or $.27 per share) for the six months
ended April 30, 1994.

YEARS ENDED OCTOBER 31, 1994, 1993 AND 1992

NET SALES. Net sales for the year ended October 31, 1994 were $448.7
million, a 22.6% increase over net sales of $366.1 million for the year ended
October 31, 1993. Net sales in 1993 reflected a 15.7% increase over net sales of
$316.5 million for the year ended October 31, 1992. The increase in net sales
from 1992 to 1993 and from 1993 to 1994 reflected increased net sales in each
year from each of the Company's three general product groups.

The 1994 and 1993 increases in net sales of transmission products were
attributable principally to sales of new products, primarily to public
telecommunications network providers. The 1994 and 1993 increases in net sales
of networking products primarily represent increased sales of public network
access equipment to private network customers.

Within the broadband connectivity product group, net sales of ADC's digital
signaling cross-connect ("DSX") modules and bays have declined as a percentage
of total net sales to 27.2% in 1994 from 28.7% in 1993 and 29.0% in 1992.
Although these products currently account for a substantial portion of the
Company's revenues, management believes that future sales of DSX and other
copper products utilizing telephone jacks will continue gradually to decline as
a percentage of total net sales primarily due to the ongoing evolution of
technologies within the telecommunications marketplace and the addition of new
products to the ADC product portfolio. As a result, the Company anticipates that
net sales of the broadband connectivity product group will continue gradually to
decline as a percentage of the Company's total net sales. See "Business --
Industry Background."

Net sales of fiber optic products represented 34.8%, 34.2% and 29.9% of
total net sales in 1994, 1993 and 1992, respectively. These year-to-year
increases reflect the Company's increasing emphasis on development and marketing
of fiber optic products.

13
<PAGE>
GROSS PROFIT. The 1994 decrease in gross profit percentage, to 50.7% of net
sales, primarily reflects a less favorable product sales mix in 1994. The slight
1993 increase in gross profit percentage to 51.2% of net sales from 51.0% of net
sales in 1992 primarily reflects a more favorable product sales mix, successful
manufacturing cost reduction efforts and higher net sales volumes in 1993.

OPERATING EXPENSES. Operating expenses for the year ended October 31, 1994
were $162.9 million, an 18.8% increase over operating expenses of $137.1 million
for the year ended October 31, 1993. The 1993 level represented a 9.2% increase
over 1992 operating expenses of $125.5 million. These expenses represented
36.3%, 37.4% and 39.7% of net sales in 1994, 1993 and 1992, respectively. The
lower 1994 and 1993 levels primarily reflect effective cost controls, higher net
sales levels and the absence of the 1992 personnel reduction charge, which
represented 1.2% of net sales in that year.

The 19.5% and 13.7% increases in development and product engineering
expenses in 1994 and 1993, respectively, also reflect significant investments in
new product development. The Company has been able to maintain its development
and product engineering expenses as a relatively constant percentage of net
sales during the 1992 to 1994 period by planning for and controlling such
expenditures.

The 18.7% and 12.5% increases in selling and administrative expenses in 1994
and 1993, respectively, also reflect increased marketing and selling activities
associated with new product introductions and expansion of markets, and growth
of the Company which has resulted in higher compensation expenses, including
increased incentive-based and stock-based compensation. Due to effective
management of expenditures, the Company has decreased its ratio of selling and
administration expenses as a percentage of net sales over the three-year period.

Company management has reclassified amortization of goodwill expense from
"other non-operating expense" to "operating expenses" to conform with internal
financial performance measurement. This expense represents amortization of the
goodwill portions of the acquisition prices for Fibermux, Kentrox and American
Lightware Systems, Inc. ("ALS"), beginning at the respective acquisition dates.

The major technological changes underway in the telecommunications industry
will require the Company to continue investing significantly in product
development. Company management recognizes the need to balance the cost of
product development with expense control. See "Business -- Research and
Development."

OTHER INCOME (EXPENSE), NET. The interest income (expense) category
reflected net interest income earned on cash balances during 1994 and 1993 and
net interest expense during 1992. See "-- Liquidity and Capital Resources."

INCOME TAXES. Effective tax rates were 37.0%, 36.4% and 39.5% in 1994, 1993
and 1992, respectively. In addition to the non-deductible goodwill amortization
amounts discussed above which impact all three years, the 1994 and 1993 rates
reflect a 1% higher federal statutory rate as well as the beneficial impact of
tax credits. See Note 7 of Notes to Consolidated Financial Statements.

Effective November 1, 1993, the Company adopted Statement of Financial
Accounting Standards ("SFAS") No. 109, "Accounting for Income Taxes." SFAS No.
109 requires the recognition of deferred tax liabilities or assets for the
expected future tax consequences of temporary differences between the book and
tax bases of assets and liabilities. SFAS No. 109 was adopted prospectively and
the cumulative impact of adoption was not material.

EXTRAORDINARY ITEM. An extraordinary charge of $1.5 million, (or $.03 per
share), net of income taxes, was recorded in the quarter ended January 31, 1994,
representing expenses related to the clean up and repair of damage to the
Fibermux facility resulting from an earthquake. See Note 2 of Notes to
Consolidated Financial Statements

NET INCOME. As a result of all of the items discussed above, net income for
the year ended October 31, 1994 was $39.1 million (or $.70 per share),
representing a 23.5% increase over net income of $31.6 million (or $.58 per
share) for the year ended October 31, 1993. Net income for 1993 represented a
50.5% increase over net income of $21.0 million (or $.39 per share) for the year
ended October 31, 1992.

14
<PAGE>
QUARTERLY RESULTS OF OPERATIONS

Statement of operations data and the percentage relationships to net sales
of that data for each of the Company's last ten quarters (contained in the
following tables) have been derived from the unaudited, interim consolidated
financial statements of the Company. In the opinion of the Company's management,
this information has been presented on the same basis as the audited financial
statements and include all adjustments, consisting of normal recurring
adjustments, necessary to fairly state the information set forth therein. The
Company's operating results may fluctuate significantly from quarter to quarter
due to several factors. The Company's expense levels are based in part on
expectations of future revenues. If revenue levels in a particular period do not
meet expectations, operating results will be adversely affected. In addition,
the Company's results of operations are subject to seasonal factors. The Company
historically has experienced a stronger demand for its products in the fourth
fiscal quarter, primarily as a result of customer budget cycles and Company
year-end incentives, and has experienced a weaker demand for its products in the
first fiscal quarter, primarily as a result of the number of holidays in late
November, December and early January and a general industry slowdown during that
period.
<TABLE>
<CAPTION>
1993 1994
------------------------------------------------ --------------------------------------------
1ST QTR. 2ND QTR. 3RD QTR. 4TH QTR. 1ST QTR. 2ND QTR. 3RD QTR. 4TH QTR.
----------- ----------- ----------- --------- ----------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net sales....................... $ 78,648 $ 88,999 $ 93,346 $ 105,125 $ 91,176 $ 113,573 $ 115,688 $ 128,298
Cost of product sold............ 38,510 43,708 44,708 51,646 45,247 56,160 57,346 62,695
----------- ----------- ----------- --------- ----------- --------- --------- ---------
Gross profit.................... 40,138 45,291 48,638 53,479 45,929 57,413 58,342 65,603
----------- ----------- ----------- --------- ----------- --------- --------- ---------
Expenses:
Development and product
engineering.................. 9,537 10,282 10,080 11,089 11,003 12,247 12,515 13,200
Selling and administration.... 21,428 23,036 23,435 25,412 23,879 27,888 27,434 31,607
Goodwill amortization......... 698 698 701 701 784 783 784 784
Personnel reduction........... -- -- -- -- -- -- -- --
----------- ----------- ----------- --------- ----------- --------- --------- ---------
Total expenses................ 31,663 34,016 34,216 37,202 35,666 40,918 40,733 45,591
----------- ----------- ----------- --------- ----------- --------- --------- ---------
Operating income................ 8,475 11,275 14,422 16,277 10,263 16,495 17,609 20,012
Other income (expense), net:
Interest...................... 21 68 42 52 133 164 318 543
Other......................... (146) (131) (119) (499) 230 (651) (471) (324)
----------- ----------- ----------- --------- ----------- --------- --------- ---------
Income before income taxes and
extraordinary item............. 8,350 11,212 14,345 15,830 10,626 16,008 17,456 20,231
Provision for income taxes...... 3,090 4,148 5,164 5,699 3,931 5,923 6,459 7,487
----------- ----------- ----------- --------- ----------- --------- --------- ---------
Net income before extraordinary
item........................... 5,260 7,064 9,181 10,131 6,695 10,085 10,997 12,744
Extraordinary item, net of
taxes (1)...................... -- -- -- -- (1,450) -- -- --
----------- ----------- ----------- --------- ----------- --------- --------- ---------
Net income...................... $ 5,260 $ 7,064 $ 9,181 $ 10,131 $ 5,245 $ 10,085 $ 10,997 $ 12,744
----------- ----------- ----------- --------- ----------- --------- --------- ---------
----------- ----------- ----------- --------- ----------- --------- --------- ---------
Average common shares
outstanding.................... 54,648 54,968 55,088 55,282 55,470 55,568 55,658 55,740
----------- ----------- ----------- --------- ----------- --------- --------- ---------
----------- ----------- ----------- --------- ----------- --------- --------- ---------
Earnings per share before
extraordinary item (1)......... $ .10 $ .13 $ .17 $ .18 $ .12 $ .18 $ .20 $ .23
----------- ----------- ----------- --------- ----------- --------- --------- ---------
----------- ----------- ----------- --------- ----------- --------- --------- ---------
Earnings per share.............. $ .10 $ .13 $ .17 $ .18 $ .09 $ .18 $ .20 $ .23
----------- ----------- ----------- --------- ----------- --------- --------- ---------
----------- ----------- ----------- --------- ----------- --------- --------- ---------
Orders (2)...................... $ 78,363 $ 93,214 $ 95,020 $ 109,040 $ 97,206 $ 108,796 $ 119,160 $ 137,170
----------- ----------- ----------- --------- ----------- --------- --------- ---------
----------- ----------- ----------- --------- ----------- --------- --------- ---------

<CAPTION>
1995
--------------------
1ST QTR. 2ND QTR.
--------- ---------
<S> <C> <C>
Net sales....................... $ 121,774 $ 140,342
Cost of product sold............ 62,402 71,303
--------- ---------
Gross profit.................... 59,372 69,039
--------- ---------
Expenses:
Development and product
engineering.................. 13,209 15,937
Selling and administration.... 29,763 32,638
Goodwill amortization......... 784 782
Personnel reduction........... -- 3,914
--------- ---------
Total expenses................ 43,756 53,271
--------- ---------
Operating income................ 15,616 15,768
Other income (expense), net:
Interest...................... 656 547
Other......................... 80 (80)
--------- ---------
Income before income taxes and
extraordinary item............. 16,352 16,235
Provision for income taxes...... 5,886 5,846
--------- ---------
Net income before extraordinary
item........................... 10,466 10,389
Extraordinary item, net of
taxes (1)...................... -- --
--------- ---------
Net income...................... $ 10,466 $ 10,389
--------- ---------
--------- ---------
Average common shares
outstanding.................... 55,849 56,094
--------- ---------
--------- ---------
Earnings per share before
extraordinary item (1)......... $ .19 $ .18
--------- ---------
--------- ---------
Earnings per share.............. $ .19 $ .18
--------- ---------
--------- ---------
Orders (2)...................... $ 124,680 $ 144,999
--------- ---------
--------- ---------
<FN>
------------------------------
(1) An extraordinary charge of $1,450,000 (or $.03 per share), net of income
taxes recorded in the quarter ended January 31, 1994, represents the charge
to clean up and repair the damage from an earthquake at the Company's
facility in California.
(2) Orders reported for each period reflect purchase orders received during
such period for which shipment has been scheduled within one year.
Substantially all of the Company's products are shipped within the period
that the related orders are received. As a result, orders correspond
generally to net sales for the specified period and are not necessarily
indicative of future results.
</TABLE>

15
<PAGE>
<TABLE>
<CAPTION>
AS A PERCENTAGE OF NET SALES
-------------------------------------------------------------------------------------
1993 1994
----------------------------------------- -----------------------------------------
1ST QTR. 2ND QTR. 3RD QTR. 4TH QTR. 1ST QTR. 2ND QTR. 3RD QTR. 4TH QTR.
-------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net sales......................... 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of product sold.............. (49.0) (49.1) (47.9) (49.1) (49.6) (49.4) (49.6) (48.9)
-------- -------- -------- -------- -------- -------- -------- --------
Gross profit...................... 51.0 50.9 52.1 50.9 50.4 50.6 50.4 51.1
Expenses:
Development and product
engineering.................... (12.1) (11.6) (10.8) (10.5) (12.1) (10.8) (10.8) (10.3)
Selling and administration...... (27.2) (25.8) (25.1) (24.2) (26.2) (24.6) (23.7) (24.6)
Goodwill amortization........... (.9) (.8) (.7) (.7) (.8) (.7) (.7) (.6)
Personnel reduction............. -- -- -- -- -- -- -- --
-------- -------- -------- -------- -------- -------- -------- --------
Total expenses.................. (40.2) (38.2) (36.6) (35.4) (39.1) (36.1) (35.2) (35.5)
-------- -------- -------- -------- -------- -------- -------- --------
Operating income.................. 10.8 12.7 15.5 15.5 11.3 14.5 15.2 15.6
Other income (expense), net:
Interest........................ -- .1 .1 -- .1 .2 .3 .4
Other........................... (.2) (.2) (.2) (.5) .2 (.6) (.4) (.3)
-------- -------- -------- -------- -------- -------- -------- --------
Income before income taxes and
extraordinary item............... 10.6 12.6 15.4 15.0 11.6 14.1 15.1 15.7
Provision for income taxes........ (3.9) (4.7) (5.6) (5.4) (4.3) (5.2) (5.6) (5.8)
-------- -------- -------- -------- -------- -------- -------- --------
Net income before extraordinary
item............................. 6.7 7.9 9.8 9.6 7.3 8.9 9.5 9.9
Extraordinary item, net of
taxes............................ -- -- -- -- (1.5) -- -- --
-------- -------- -------- -------- -------- -------- -------- --------
Net income........................ 6.7% 7.9% 9.8% 9.6% 5.8% 8.9% 9.5% 9.9%
-------- -------- -------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- -------- -------- --------

1995
-------------------
1ST QTR. 2ND QTR.
-------- --------
<S> <C> <C>
Net sales......................... 100.0% 100.0%
Cost of product sold.............. (51.2) (50.8)
-------- --------
Gross profit...................... 48.8 49.2
Expenses:
Development and product
engineering.................... (10.9) (11.3)
Selling and administration...... (24.4) (23.3)
Goodwill amortization........... (.7) (.6)
Personnel reduction............. -- (2.8)
-------- --------
Total expenses.................. (36.0) (38.0)
-------- --------
Operating income.................. 12.8 11.2
Other income (expense), net:
Interest........................ .5 .4
Other........................... .1 --
-------- --------
Income before income taxes and
extraordinary item............... 13.4 11.6
Provision for income taxes........ (4.8) (4.2)
-------- --------
Net income before extraordinary
item............................. 8.6 7.4
Extraordinary item, net of
taxes............................ -- --
-------- --------
Net income........................ 8.6% 7.4%
-------- --------
-------- --------
</TABLE>

LIQUIDITY AND CAPITAL RESOURCES
During the years ended October 31, 1994, 1993 and 1992, cash and cash
equivalents, primarily short-term investments in commercial paper with
maturities of less than 90 days, increased $33.2 million, decreased $4.1 million
and decreased $9.6 million, respectively. The 1994 increase primarily reflects
increased cash provided from operating activities and the absence of debt
repayments, offset by $7.1 million of acquisition payments. In 1993 and 1992,
property and equipment additions and long-term debt repayments, offset by cash
generated from operating activities, represented the majority of the decreases.
During the three years ended October 31, 1994, 1993 and 1992, property and
equipment additions net of retirements totaled $21.8 million, $21.2 million and
$15.8 million, respectively.

Cash and cash equivalents, primarily short-term investments in commercial
paper with maturities of less than 90 days, decreased $12.4 million during the
six months ended April 30, 1995 and increased $5.4 million during the six months
ended April 30, 1994. The major elements of the 1995 decrease were net income
before depreciation, totaling $32.4 million, offset by property and equipment
additions of $12.1 million, acquisition payments of $4.7 million, and the $24.7
million increase in inventory and receivable levels (reflecting an acquisition
completed in 1995, as well as growth in business). In the six months ended April
30, 1994, the major elements of the increase were net income before
depreciation, totaling $26.5 million, partially offset by property and equipment
additions of $10.3 million and acquisition payments of $7.1 million.

The Company may borrow up to $40.0 million under revolving credit
agreements. Borrowings under these agreements bear interest at floating
short-term market rates, may be repaid any time without penalty and may be
converted to term loans bearing interest principally at the prime rate, payable
in annual installments through December 2000. At April 30, 1995, the entire
$40.0 million of borrowings under these agreements was available to the Company,
and it had no long-term debt outstanding.

Management believes that the net proceeds from this offering, cash generated
from operating activities, borrowings available under revolving credit
agreements and cash balances will be adequate to fund the Company's anticipated
capital and operating requirements through 1996. However, the Company may find
it necessary to seek additional sources of financing to support its capital
needs, for additional working capital, potential investments or acquisitions or
otherwise. There is no assurance that such financing would be available on
commercially reasonable terms or at all. Total property and equipment additions
for 1995 are expected to be approximately $30 million.

16
<PAGE>
BUSINESS

ADC designs, manufactures and markets transmission, enterprise networking
and connectivity products for use in broadband global networks. The Company's
wide range of products employ fiber, hybrid fiber coax, wireless and traditional
copper-based technologies. The Company's customers include: public network
providers, which consist of all seven of the RBOCs, other telephone companies,
long distance carriers, wireless service providers, the major cable TV operators
and other domestic public network providers; private and governmental network
providers; international network operators; and telecommunications OEMs. The
Company's products enable these network providers to build and upgrade their
networks to support increasing user demand for voice, data and video services.

INDUSTRY BACKGROUND

Since the 1970's, the telecommunications equipment industry has grown and
changed substantially, primarily as a result of continuous technological
development, increased demand for the transmission of data and video traffic
over public and private networks, market convergence and a changing regulatory
and competitive environment.

Several important technological developments have spurred the evolution of
the telecommunications equipment industry. The development of cost-effective
digital technology has been particularly important and has resulted in an
increasing trend over the past decade to replace analog technology in
transmission networks. More recently, the use of integrated circuits in both
public and private telecommunications equipment has allowed network equipment to
perform high speed switching, network performance monitoring, network
management, information compression, data translation and other functions,
thereby allowing the network to address increasingly complex tasks and users'
needs. In addition, fiber-based systems have increasingly replaced copper-based
transmission systems. The increasing shift to fiber-based systems has been
principally due to the ability of fiber optics to carry large volumes of
information at high speeds, its insensitivity to electromagnetic interference
and the high transmission quality made possible by the physical properties of
light. In future years, the telecommunications equipment industry also may be
significantly affected by the continuing development of wireless communications
technology, which could substantially extend the reach of current communications
networks.

Demands on network infrastructure have grown substantially in the past
decade. Networks increasingly are required to transmit a combination of data and
video to communicate information, conduct business and deliver entertainment.
Such demands have prompted the development and use of "broadband" networks,
which feature the improved reliability and increased speed of transmission
generally required for data and video transmission over the network.
Specifically, the industry term "broadband" refers to all transmission speeds of
T1 (1.544 million bits per second) and higher. Growth in broadband network
applications has fueled increased infrastructure investment by network operators
in order to expand network capacity and provide new applications and services to
meet users' needs.

In addition, there has been substantial growth in wireless communications
such as cellular telephone services, and the prospect for increasing use of
satellite-based services and personal communications services ("PCS"). This
growth has been spurred by the convenience of mobility and the limits of
wireline infrastructure. In particular, in countries without reliable or
extensive wireline systems, wireless service could ultimately provide the
primary service platform for both mobile and fixed telecommunications
applications, because of the potential savings in installation time and cost.

The evolution in technology and user needs has been accompanied by changes
in the domestic and international regulatory environment. Since the divestiture
of the AT&T regional operating companies in 1984, the RBOCs have been prevented
from manufacturing equipment for use in telecommunications networks. As the
RBOCs have embarked on aggressive expansion plans, significant opportunities
have been created for independent telecommunications equipment manufacturers
such as the Company. The policy of deregulation currently being followed by the
Federal Communications Commission and other important regulatory agencies
throughout the world has increased opportunities for independent companies to
supply products and services within public telephone system markets and within
private voice, data and video

17
<PAGE>
communications markets. Although the ultimate impact is uncertain, current
telecommunications legislation being discussed in the U.S. Congress may result
in new competitors, including the RBOCs, entering the telecommunications
equipment market.

Outside of the United States, the telecommunications equipment market has
also expanded and changed significantly in recent years, as network users have
increasingly demanded access to voice, data and video communications
capabilities. Many countries without reliable or extensive wireline systems are
seeking to develop and enhance their telecommunications infrastructure. This
growth in demand for network services and infrastructure has been accompanied by
changes in the international regulatory environment. In many countries,
government operated telecommunications monopolies are being converted to private
network services providers, and competition among such carriers may intensify.

The Company believes that "broadband global networking," or the emerging
series of worldwide broadband networks, represents a key enabling capability for
meeting the information needs of network users. The addition of high speed data
and video traffic has driven the need for broadband infrastructure and has
enabled the creation of a wide range of new applications, including video on
demand, distance learning, telecommuting and remote medical imaging. The Company
participates in this emerging broadband global network market by providing a
broad variety of equipment, services and integrated product solutions.

STRATEGY

ADC's strategy is to capitalize on opportunities in the evolving global
telecommunications market by providing equipment, services and integrated
solutions for its customers' voice, data and video telecommunications networks.
ADC's broad range of products addresses key areas of the telecommunications
network infrastructure, and these products are used to connect physical
networks, access network services, transport network traffic and manage
networks. ADC's diverse product offerings address the needs of its many
customers which include the RBOCs, other telephone companies, long distance
carriers, wireless service providers, the major cable TV operators, other public
network providers, private network providers and telecommunications OEMs. Key
components of the Company's strategy include:

-FOCUS ON BROADBAND NETWORK OPPORTUNITIES. In recent years, broadband
requirements for both public and private networks have grown significantly.
Accordingly, ADC is focusing its product development and marketing efforts on
opportunities in emerging broadband networks. In the public network market,
broadband deployment has been driven by telephone and cable television providers
seeking to establish the infrastructure required to offer video, telephony,
entertainment and other interactive services to residential customers over a
single network. In the private network market, broadband requirements have been
driven by the growth of voice, data and video applications utilizing increasing
amounts of bandwidth. Examples of products developed by ADC targeting these
opportunities include the Company's Homeworx system that has been designed to
enable telephone and cable television companies to provide a range of voice and
video services to residential customers; the Soneplex product that allows
business customers to transmit broadband traffic across their private networks
and access various switched and dedicated services provided by the networks; and
the AAC-3 ATM access concentrator that is being developed to allow customers to
access switched voice, data and video traffic on public networks from their
private networks.

-PROVIDE END-TO-END NETWORK SOLUTIONS. ADC offers a broad line of
telecommunications equipment that addresses customers' key network needs from
the central office, through the local loop (the portion of a network that
connects a subscriber's equipment to a local central office), into the customer
premise and across enterprise networks. Through internal development and
acquisitions, ADC has formed its expertise in three major network areas:
transmission, enterprise networking and broadband connectivity. ADC is currently
enhancing its systems integration capability to enable it to offer customers
more complete solutions to their network needs.

-LEVERAGE TECHNOLOGICAL CAPABILITIES ACROSS PRODUCT GROUPS. ADC has
developed substantial expertise in fiber optics, broadband, video and wireless
technologies. The Company has built these core competencies through internal
development, acquisitions, joint ventures and licensing arrangements. ADC's
strategy is to leverage these core competencies across its product groups in
order to develop new product architectures

18
<PAGE>
and network management tools for its customers' evolving voice, data and video
network needs in various market areas. An example of this effort is the
continuing development of the Company's wireless technologies for use in
converging wired and wireless applications such as potential wireless local loop
products.

-EXPAND INTERNATIONAL PRESENCE. ADC believes that significant growth in
telecommunications equipment market may occur outside the United States as a
result of deregulation and the need of many foreign countries to substantially
expand or enhance their telecommunications services. ADC's strategy is to expand
its international presence by increasing its international sales and marketing
resources, leveraging its existing customer relationships, developing additional
international distribution channels and seeking strategic alliances and
acquisitions.

-PURSUE STRATEGIC ALLIANCES AND ACQUISITIONS. ADC has sought and will
continue to seek alliances and acquisitions to: (i) add key technologies that it
can leverage across its businesses, (ii) broaden its product offerings, (iii)
enter attractive new markets and (iv) expand or enhance its distribution
channels. Examples of such alliances and acquisitions include: ADC's OEM
relationship with Premisys Communications, Inc. in the integrated access device
market; its joint development effort with Tektronix, Inc. in the area of test
and monitoring systems; its marketing relationships in the ATM access equipment
market; its acquisition of ALS in the video transmission area; its acquisition
of Kentrox in the public network access product area; and its acquisition of
Australia-based AOFR Pty. Ltd. in the fiber optic connectors area.

PRODUCT GROUPS

The Company's products can be categorized into three general functional
groups: (i) transmission, (ii) enterprise networking and (iii) broadband
connectivity. These product groups accounted for 23%, 28% and 49%, respectively,
of the Company's net sales for the year ended October 31, 1994 and 28%, 24%, and
48%, respectively, for the six months ended April 30, 1995. Each of these
product groups is discussed below.

TRANSMISSION

ADC's transmission products provide electronic and optical signal generation
within predominantly public networks. Certain of the transmission products also
provide access to the network in order to monitor, test and reroute circuits
within telecommunications transmission systems. ADC's transmission products are
designed for use in copper-based, coax-based, fiber-based or wireless
transmission networks. Transmission products include fiber optic video delivery
products, other high speed voice, data and video delivery and access platforms,
wireless microcell systems, test and monitoring systems and digital repeaters.
Certain of the Company's transmission products are described below.

DV6000 AND OTHER FIBER VIDEO DELIVERY EQUIPMENT. The DV6000 system
transmits a variety of signal types using a high speed, uncompressed digital
format (2.4 billion bits per second) over fiber in the super trunking portions
of broadcast and interactive video networks. This system is used in significant
public residential broadband networks, such as Viacom Cable's San Francisco Bay
Area video backbone network and the regional headend network in Florida of TCI
Cablevision of Florida, Inc. ADC's PixlNet multipoint videoconferencing system
provides a public network switched digital video system for user-initiated video
conference management. The PixlNet system is currently being tested in customer
field trials. The Company also manufactures various analog video transmission
systems.

HOMEWORX ACCESS TRANSPORT PLATFORM. The Company's Homeworx access transport
platform is a customer loop transmission system for small business and
residential customers utilizing hybrid fiber coax technology. The Homeworx
system has been designed for deployment on video-only, integrated video and
telephony and telephony-only broadband networks, but currently is only available
in the video-only version. The Homeworx system has been selected for video-only
use in the residential broadband networks of Ameritech Corporation, Southern New
England Telephone Corporation, Cox Cable Communications, Inc. and Cable Bahamas,
and the Company began shipping product to certain of these customers in 1994.
Versions allowing integrated video and telephony and telephony-only for
broadband networks are under development. The enhanced telephony version of the
Homeworx system is scheduled to commence test trials with a limited number of
customers in July 1995. Also, Optus Vision Pty. Ltd. in Australia has elected to
use

19
<PAGE>
the telephony capability of the integrated video and telephony Homeworx system
in its residential broadband network, and the Company currently plans to begin
shipping this product commercially in the first quarter of 1996. Additionally,
the system is being tested by several of the Company's public network provider
customers both in the United States and internationally. There is no assurance,
however, that the enhanced versions of Homeworx will be developed on a timely
basis or achieve market acceptance.

SONEPLEX SERVICE DELIVERY PRODUCT PLATFORM. The Company's Soneplex platform
is an integrated transmission system that enables public network providers to
deliver T1, T3 (44.6 million bits per second) and other high rate services from
their networks to customer premises over copper or fiber for business customers.
The Soneplex platform enables end user customers to transmit voice, data and
video traffic across their private network and to access various switched and
dedicated services provided by public networks. The Company's Soneplex family of
platforms and modules employ electrical to optical conversion for transport of
voice, data and video over fiber facilities and High bit rate Digital Subscriber
Line ("HDSL") transmission technology for transport of high bandwidth services
over copper-based systems. Soneplex products also integrate circuit performance
monitoring and test access capabilities to help public network carriers provide
reliable service at a low operational cost. The Company has under development
new modules and capabilities for the Soneplex platform, including Synchronous
Optical Network ("SONET") internetworking. There is no assurance that the SONET
version of Soneplex will be developed on a timely basis or achieve market
acceptance.

CITYWIDE PRODUCTS. The Company's CityWide family of wireless systems
products includes the CityCell radio frequency and wideband digital microcells
for adding and extending cellular communication coverage, primarily in large
urban areas. CityCell has been commercially deployed by six RBOC cellular
network providers. The Company's CityRad air-to-air re-radiator with traffic
level monitoring is designed to extend wireless coverage without adding
microcells.

TEST AND MONITORING SYSTEMS. The Company manufactures a variety of remote
digital test and performance monitoring products for copper-based and
fiber-based systems.

DIGITAL REPEATERS. The Company's copper-based digital repeaters are used
primarily in central office applications to regenerate digital signals that have
degraded because of transmission over long distances.

ATM SWITCH. The Company has entered into a marketing arrangement with an
OEM under which the Company has the exclusive right to market an ATM switching
system that supports advanced high speed data and video applications, primarily
in public networks. The Company has installed customer test sites for this ATM
switching system. However, there is no assurance that the ATM switching system
will be developed on a timely basis or achieve market acceptance.

ENTERPRISE NETWORKING

ADC's enterprise networking products provide interconnection and
transmission of voice, data and video signals within a private network and also
provide access to the public network. These products are designed for use in
copper-based and fiber optic networks. Certain of the Company's enterprise
networking products are described below.

PUBLIC NETWORK ACCESS EQUIPMENT. The Company manufactures a family of
Channel Service Unit ("CSU") and Data Service Unit ("DSU") products that are
used to interconnect digitally the public network and the private network. This
equipment monitors circuits and provides system protection and other network
management functions. Certain of these products also enable the customer to test
the performance of its voice network and allow connection of voice, data and
video circuits. These products support T1 and T3 services and a variety of data
protocols, including Frame Relay, Switched Multi-megabit Data Service ("SMDS")
and ATM. The Company recently began shipping its AAC-1 ATM access concentrator
that transports T1 voice, data and video signals. The Company is currently
developing the AAC-3 ATM access concentrator (for T3 signal speeds). The AAC-3
is expected to enter customer field trials and be commercially released late in
calendar 1995. There is no assurance that the AAC-3 will be developed on a
timely basis or achieve market acceptance. The Company has jointly announced
interoperability of its ATM access equipment with ATM equipment suppliers such
as Fore Systems Inc. and Cascade Communications Corp. and with long distance
carriers such as Wiltel, Inc.

20
<PAGE>
INTERNETWORKING PRODUCTS. Internetworking products include fiber optic
backbones used to transport high speed multiple voice, data and video signals
simultaneously over private networks and link LANs, mainframes, minicomputers,
personal computers, telephone systems and video equipment with diverse protocols
within private networks or over the public network; intelligent wiring hub
products that interconnect workstations, personal computers and terminals,
utilizing many different LAN protocols and types of cables; and network
management systems.

PATCH/SWITCH SYSTEM AND PATCHMATE MODULE. The Company's Patch/Switch system
is a data network management product that provides access to and monitors, tests
and reconfigures digital data circuits and permits local or remote switching to
alternate circuits or backup equipment. This system is modular, permitting the
user to select and combine the particular functions desired in a system. The
PatchMate Module is a manually operated electromechanical device used to gain
access to the network in order to monitor, test and reconfigure digital data
circuits.

Recognizing changes in the competitive environment for LAN equipment, the
Company has realigned its Kentrox and Fibermux subsidiaries into one business
unit to better address the industry trend toward integration of LAN and WAN
technologies and products. This group combines LAN and WAN expertise in order to
develop, manufacture and distribute advanced network access and transport
products for use in current and future broadband enterprise networks. The
Company recorded a one-time charge of $3.9 million related to a personnel
reduction at the Fibermux facility and other expenses resulting from the
realignment. See "Management's Discussion and Analysis of Financial Condition
and Results of Operations -- Results of Operations and Note 9 of Notes to
Consolidated Financial Statements."

BROADBAND CONNECTIVITY

ADC's broadband connectivity products provide the physical contact points
for connecting different telecommunications system components and gaining access
to telecommunications system circuits for the purpose of installing, testing,
monitoring or reconfiguring such circuits. These products are sold to the RBOCs,
other telephone companies, long distance carriers, other public network
providers, private network providers and telecommunications OEMs. A majority of
the Company's broadband connectivity products are designed for use in
copper-based transmission networks, with the remainder designed for use in coax,
fiber optic or wireless transmission networks. Broadband connectivity products
include various network access/connection devices for copper networks, various
network access/connection devices for fiber optic networks, modular fiber optic
cable routing systems and outside plant cabinets and enclosures. Certain of the
Company's broadband connectivity products are described below.

JACKS, PLUGS AND PATCH CORDS. Jacks and plugs are the basic components used
to gain access to copper telecommunications circuits for testing and
maintenance. Patch cords are wires or cables with a plug on each end. ADC
incorporates its jacks, plugs and patch cords into its own products and also
sells them in component form, primarily to OEMs. These components are generally
manufactured to industry-recognized compatibility and reliability standards as
off-the-shelf items.

JACKFIELDS AND PATCH BAYS. A jackfield is a module containing an assembly
of jacks wired to terminal blocks or connectors and used by telecommunications
companies to gain access to copper communication circuits for testing or
patching the circuits. ADC manufactures jackfields in both longframe and bantam
formats, including prewired and connectorized models. When testing a large
number of circuits, series of jackfields are combined in specialized rack
assemblies, which often may include test modules. These are called patch bays.
ADC manufactures a range of jackfields and patch bays in various configurations.

DSX PRODUCTS. ADC manufactures digital signaling cross-connect (DSX)
modules and bays which are jackfields and patch bays designed to gain access to
and cross-connect digital copper circuits for both voice and data transmission.
Since the introduction of DSX products in 1977, the Company has continued to
expand and refine its DSX product offerings, and has become a leading
manufacturer of products for the mechanical termination and interconnection of
digital circuits used in voice and data transmission. During

21
<PAGE>
1994, ADC added DS-3 Digital Distribution Point ("DDP") products to its line of
DSX products. DDP products are mechanical alternatives to hard-wiring equipment
used for cable management and circuit access in software based digital
cross-connect systems.

TERMINAL BLOCK AND FRAME PRODUCTS. Terminal blocks are molded plastic
blocks with contact points used to facilitate multiple wire interconnections.
ADC manufactures a wide variety of terminal blocks. The Company's cross-connect
frames are terminal block assemblies used to connect the external wiring of a
telecommunications network to the internal wiring of a telephone operating
company central office or to interconnect various pieces of equipment within a
telephone company.

FIBER OPTIC PATCH CORDS. Fiber optic patch cords are functionally similar
to copper patch cords and are the basic components used to gain access to fiber
telecommunications circuits for testing, maintenance, cross-connection and
configuration purposes. The Company's LightTracer fiber optic patch cords
provide immediate identification of fiber optic connections. The Company
incorporates its fiber optic patch cords into its own products and also sells
them in component form, principally to OEMs.

FIBER DISTRIBUTION PANELS AND FRAMES. Fiber distribution panels and frames
are functionally similar to copper jackfields and frames with the added feature
of additional bend protection. They also provide interconnection points between
fiber optic cables entering a building and fiber optic cables connected to fiber
optic equipment within the building.

FIBERGUIDE SYSTEM. The FiberGuide system is a modular routing system which
provides a segregated, protected method of storing and routing fiber patch cords
and cables within buildings.

OUTSIDE PLANT PRODUCTS. Outside plant ("OSP") products consist of cabinets
and other enclosures configured to locate and integrate the functions of passive
fiber optic equipment and electronic transmission systems outside the telephone
central office/cable TV headend switching and transmission facilities. The
Company's OSP products provide flexible network management, remote transmission
capability and environmental protection for various telecommunications
topologies and architectures. OSP products designed for broadband residential
loop applications also provide power supply and coaxial splicing and tapping
functions.

In addition, the Company has under development new broadband network
measurement and monitoring solutions for the telecommunications and cable TV
industries. ADC has entered into a memorandum of understanding with Tektronix,
Inc. to jointly develop and manufacture broadband network systems for managing,
testing and monitoring physical layer integrity and signal transmission quality.
These systems are expected to be released in phases over the next two years, and
are to contain components from both ADC and Tektronix, Inc. and be sold and
serviced by ADC. There can be no assurance that these systems will be released
on a timely basis, or achieve market acceptance.

The Company also provides engineer, furnish and install ("EF&I") services,
consisting of layout and installation of new telecommunications networks,
modification of existing networks or the addition of equipment to existing
networks. The Company sells its EF&I services primarily to telephone operating
companies, other common carriers and users of private telecommunications
networks.

SALES AND MARKETING

ADC sells its products to customers in three primary markets: (i) the United
States public telecommunications network market, (ii) the private and
governmental voice, data and video network market in the United States, and
(iii) the international public and private network market. The public,
private/governmental and international market segments accounted for 57%, 28%
and 15%, respectively, of the Company's net sales for the year ended October 31,
1994, and 57%, 25%, and 18%, respectively, of the Company's net sales for the
six months ended April 30, 1995.

The Company's customers include: (i) public network providers, which consist
of all seven of the RBOCs, other telephone companies, long distance carriers,
wireless service providers, the major cable TV operators and other domestic
public network providers; (ii) private and governmental network providers,

22
<PAGE>
such as various large business customers and governmental agencies; and (iii)
international network operators. The Company also sells product for each of
these customer groups to the major telecommunications OEMs.

Purchases of products by public network providers and the OEMs which supply
such companies have accounted for the largest portion of the Company's net sales
in recent periods. The Company's transmission and broadband connectivity
products for public network providers are primarily located in central
transmission facilities (such as telephone company network central offices,
cable TV company network supertrunks and headend offices, and wireless network
base stations, all of which contain the equipment used in switching and
transmitting incoming and outgoing circuits). Increasingly, portions of the
Company's public network transmission systems are located in the public network
outside plant facilities (outside the central transmission buildings) and on
customers' premises. The Company's private and governmental network customers
generally purchase the Company's enterprise-wide communications systems and
public network access equipment for location on their premise network.

The Company also markets its products outside the United States primarily to
telephone operating companies and cable TV companies for public
telecommunications networks located in Canada, Europe, the Pacific Rim,
Australia and Central and South America.

A majority of the Company's sales are made by a direct sales force, and the
Company maintains sales offices throughout the United States and also maintains
offices in Canada, Europe, the Pacific Rim, Australia and Central and South
America. The Company's products are sold in the United States by approximately
119 field sales representatives located in 26 sales offices throughout the
country, and by several dealer organizations and distributors. The Company sells
its products to foreign customers through 23 employee field salespersons, eight
foreign independent sales representatives and 77 foreign distributors, as well
as through United States public and private network providers who also
distribute outside the United States.

The Company also has a customer service group that supports field sales
personnel and is responsible for application engineering, customer training,
entering orders and supplying delivery status information, and a field service
engineering group that provides on-site service to customers.

RESEARCH AND DEVELOPMENT

The Company believes that its future success depends on its ability to adapt
to the rapidly changing telecommunications environment, to maintain its
significant expertise in core technologies and to continue to meet and
anticipate its customers' needs. The Company continually reviews and evaluates
technological changes affecting the telecommunications market and invests
substantially in applications-based research and development. The Company is
committed to an ongoing program of new product development that combines
internal development efforts with acquisitions, joint ventures and licensing or
marketing arrangements relating to new products and technologies from sources
outside the Company.

In recent periods, increasingly significant portions of new
telecommunications equipment purchased by public network providers and private
network customers have utilized fiber optic transmission technology and have
employed digital technology. In the future, these telecommunications network
equipment purchasing trends will include increasingly sophisticated, software
intensive, switching and network management systems. In addition, there has been
significantly increased demand for wireless communications services and higher
speed transmission technologies. As a result, the Company's internal and
external product development activities are directed at the integration of fiber
optic technology into additional products, the continuing development of its
Homeworx system for telephony and integrated video and telephony applications,
the development of network systems software, the continuing development of
wireless microcell products, the incorporation of ATM technology into voice,
data and video products for both public and private telecommunications networks
and the addition of video compression technology to its product line. The
Company is also developing copper and fiber optic products for applications in
the local loop.

New product development often requires long-term forecasting of market
trends, development and implementation of new processes and technologies and a
substantial capital commitment. As a result of

23
<PAGE>
these and other factors, development and customer acceptance of new products is
inherently uncertain, and there can be no assurance that such products will be
developed on a timely basis or achieve market acceptance.

COMPETITION

Competition in the telecommunications equipment industry is intense, and the
Company believes that competition may increase substantially with the deployment
of broadband networks and potential regulatory changes. Many of the Company's
foreign and domestic competitors have more extensive engineering, manufacturing,
marketing, financial and personnel resources than those of the Company. The
Company's transmission products are competitive with products offered by several
other companies, including AT&T Technologies, Inc., Northern Telecom, Inc. and
Motorola, Inc. The Company's enterprise networking products compete with the
products of a number of other companies, two of which (Bay Networks, Inc. and
Cabletron Systems Inc.) are dominant in its intelligent wiring hub markets, and
face both strong price competition and pressure from alternative distribution
strategies utilized by these other companies. The Company's broadband
connectivity products are competitive with the products offered by numerous
other companies, including AT&T Technologies, Inc. and Switchcraft, Inc., a
subsidiary of Raytheon Company. In addition, the Company faces increasing
competition from a number of other smaller competitors, none of which is
dominant at this time.

The rapid technological developments within the telecommunications industry
have resulted in frequent changes to the Company's group of competitors. The
Company believes its success in competing with other manufacturers of
telecommunications products depends primarily on its engineering, manufacturing
and marketing skills, the price, quality and reliability of its products and its
delivery and service capabilities. While the market for the Company's products
has not historically been characterized by significant price competition, the
Company may face increasing pricing pressures from current and future
competitors in certain or all of the markets for its products.

The Company believes that technological change, the increasing addition of
data, video and other services to networks, continuing regulatory change and
industry consolidation or new entrants will continue to cause rapid evolution in
the competitive environment of the telecommunications equipment market, the full
scope and nature of which is difficult to predict at this time. Increased
competition could result in price reductions, reduced margins and loss of market
share by the Company. The Company believes industry regulatory change may create
new opportunities for suppliers of telecommunications equipment. The Company
expects, however, that such opportunities may attract increased competition from
others as well. In addition, the Company expects that AT&T Technologies, Inc.
will continue to be a major supplier to the RBOCs, and is competing more
extensively outside the RBOC market. The Company also believes that the rapid
technological changes which characterize the telecommunications industry will
continue to make the markets in which the Company competes attractive to new
entrants. There can be no assurance that the Company will be able to compete
successfully with its existing or new competitors or that competitive pressures
faced by the Company will not materially and adversely affect its business,
operating results and financial condition.

MANUFACTURING AND FACILITIES

The Company manufactures a wide variety of products which are fabricated,
assembled and tested in its own facilities or in subcontracted facilities. To
seek to reduce costs, the Company also takes advantage of off-shore assembly and
sourcing. The manufacturing process for the Company's electronic products
consists primarily of assembly and testing of electronic systems built from
fabricated parts, printed circuit boards and electronic components. The
manufacturing process for the Company's electromechanical products consists
primarily of fabrication of jacks, plugs, and other basic components from raw
materials, assembly of components and testing. The Company's sheet metal,
plastic molding, stamping and machining capabilities permit the Company to
configure components to customer specifications.

The Company's corporate headquarters are currently located in two leased
buildings in Minnetonka, Minnesota. The Company also leases facilities in
Minnetonka for its Minnesota fiber optic operations and its

24
<PAGE>
engineering, product management, manufacturing and manufacturing support
operations for its transmission products. The Company owns two buildings in
Bloomington, Minnesota, which house manufacturing and manufacturing support
operations.

The Company owns two facilities in Le Sueur, Minnesota, which are used for
electromechanical assembly and warehouse space. The Company leases additional
warehouse space on a short-term basis from time to time to meet its needs. The
Company owns another facility in Bloomington, Minnesota, which is leased to an
unaffiliated company. In addition, the Company owns approximately 38 acres of
undeveloped land in Eden Prairie, Minnesota.

The Company leases space in Richardson, Texas for an engineering development
center and leases sales office facilities in the United States, Canada, Mexico,
Venezuela, the United Kingdom, Germany, Belgium, Australia and Singapore. The
Company owns a facility in Portland, Oregon, which serves as the office and
manufacturing facility for certain of its enterprise networking products and
leases space in Waseca, Minnesota, which serves as a research and development
center. The Company leases space in Meriden, Connecticut as the office and
manufacturing facility for certain of its transmission products. The Company
also leases space in Chatsworth, California for certain of its enterprise
networking operations.

Leases for the Company's headquarters, sales offices and manufacturing
facilities expire at different times through 2000 and are generally renewable on
a fixed term or month-to-month basis.

EMPLOYEES

As of April 30, 1995, there were 2,725 persons employed by the Company. The
Company considers relations with its employees to be good.

25
<PAGE>
CERTAIN UNITED STATES FEDERAL TAX CONSIDERATIONS FOR
NON-U.S. HOLDERS OF COMMON STOCK

This is a general discussion of certain U.S. federal income and estate tax
consequences of the ownership and disposition of Common Stock by a non-U.S.
holder. This discussion is based on the Internal Revenue Code of 1986, as
amended (the "Code") and administrative and judicial interpretations as of the
date hereof, all of which may be retroactively changed. This discussion does not
address all the aspects of U.S. federal income and estate taxation that may be
relevant to non-U.S. holders in light of their particular circumstances. Nor
does it address tax consequences under the laws of any U.S. state, municipality
or other taxing jurisdiction or under the laws of any country other than the
United States. Prospective non-U.S. holders should consult their own tax
advisors about the particular tax consequences to them of holding and disposing
of Common Stock.

A "non-U.S. holder" is a person or entity that, for U.S federal income tax
purposes, is a non-resident alien individual, a foreign corporation (one
organized outside the United States), a foreign partnership or a foreign state
or trust. A non-U.S. citizen individual may be deemed to be a resident alien of
the United States by reason of (a) becoming a lawful permanent resident, (b) in
certain circumstances an election where the individual is present at least 31
days in the relevant tax year or (c) by being present in the United States on at
least 31 days in the calendar year and for an aggregate of 183 days taking into
account certain days during the three-year period ending with the current
calendar year. For purposes of this determination, all of the days the
individual is present in the United States during the current year, one-third of
the days the individual is present during the immediately preceding year, and
one-sixth of the days the individual is present during the second preceding year
are taken into account. Resident aliens are subject to U.S. federal tax as if
they were U.S. citizens.

DIVIDENDS

In the event that dividends are paid to a non-U.S. holder of Common Stock,
such dividends will be subject to federal withholding tax at a 30% rate or such
lower rate as may be specified by an applicable income tax treaty. Under current
U.S. Treasury regulations, dividends paid to an address outside the United
States in a foreign country are presumed to be paid to a resident of such
country for purposes of the withholding tax. Under the current interpretation of
U.S. Treasury regulations, the same presumption applies to determine the
applicability of a reduced rate of withholding under a U.S. tax treaty. Thus,
non-U.S. holders receiving dividends at addresses outside the United States are
not yet required to file tax forms to obtain the benefit of an applicable treaty
rate. If there is excess withholding on a person eligible for a treaty benefit,
the person can file for a refund with the U.S. Internal Revenue Service.

Under U.S. Treasury regulations which were proposed in 1984 and which have
not yet been put into effect, to claim the benefits of a tax treaty a non-U.S.
holder of Common Stock would have to file certain forms accompanied by
statements from a competent authority of the treaty country attesting to the
holder's eligibility to claim treaty benefits.

Generally, upon the filing of a Form 4224 with the Company, there is no
withholding tax on dividends that are effectively connected with the non-U.S.
holder's conduct of a trade or business within the United States. Instead, the
effectively connected dividends are subject to tax at rates applicable to U.S.
persons. Effectively connected dividends received by a foreign corporation may
be subject to an additional "branch profits tax" at a 30% rate (or a lower rate
under an applicable income tax treaty) when such dividends are deemed
repatriated from the United States.

GAIN ON DISPOSITION OF COMMON STOCK

A non-U.S. holder generally will not be subject to U.S. federal income tax
in respect of gain recognized on a disposition of Common Stock unless (i) the
gain is effectively connected with a trade or business of the non-U.S. holder in
the United States, (ii) in the case of a non-U.S. holder who is an individual
and holds the Common Stock as a capital asset, such holder is present in the
United States for 183 or more days in the taxable year of the disposition, (iii)
in the case of a non-resident individual who is a partner in a foreign
partnership holding the Common Stock, such non-resident individual is present in
the United States for

26
<PAGE>
183 or more days in the taxable year of the disposition or the gain is
effectively connected with a trade or business conducted by such partnership in
the United States, (iv) the non-U.S. holder is subject to tax pursuant to the
provisions of U.S. tax law applicable to certain United States expatriates, or
(v) the Company is or has been a "U.S. real property holding corporation" for
federal income tax purposes. The Company has not been and does not anticipate
becoming a "U.S. real property holding corporation" for U.S. federal income tax
purposes.

INFORMATION REPORTING AND BACKUP WITHHOLDING

Generally, the Company must report to the Internal Revenue Service the
amount of dividends paid, the name and address of the recipient and the amount,
if any, of tax withheld. A similar report is sent to the holder. Pursuant to tax
treaties or other agreements, the Internal Revenue Service may make its reports
available to tax authorities in the recipients's country of residence. No
further information reporting and no backup withholding is required. Dividends
not subject to withholding tax may be subject to backup withholding if the
non-U.S. holder is not an "exempt recipient" and fails to provide its tax
identification number and other information to the Company.

If the proceeds of a disposition of Common Stock are paid over by or through
a U.S. office of a broker, the payment is subject to information reporting and
possible backup withholding at a 31% rate unless the disposing holder certifies
as to his name, address and non-United States status or otherwise establishes an
exemption. Generally, United States information reporting and backup withholding
currently will not apply to a payment of disposition proceeds if the payment is
made outside the United States through a non-U.S. office of a non-U.S. broker
and the payor does not have actual knowledge that the payee is a U.S. citizen,
resident, or a domestic partnership, corporation, estate or trust.

Backup withholding is not an additional tax. Rather, the tax liability of
persons subject to backup withholding will be reduced by the amount of tax
withheld. If withholding results in an overpayment of taxes, a refund may be
obtained.

FEDERAL ESTATE TAXES

Common Stock held at death by an individual who is neither a citizen nor
domiciled in the United States for federal estate tax purposes will be subject
to federal estate tax, unless an applicable estate tax treaty provides
otherwise. Domicile is acquired by living in the United States with no definite
present intention of leaving. An estate of an individual who is neither a
citizen nor domiciled in the United States is generally allowed a statutory
credit which is the equivalent of an exclusion of $60,000 of assets from the
U.S. estate tax. Tax treaties may permit a larger credit.

27
<PAGE>
UNDERWRITING

Under the terms of, and subject to the conditions contained in, the U.S.
Underwriting Agreement, the form of which is filed as an exhibit to the
Registration Statement (the "Registration Statement") of which this Prospectus
forms a part, the Underwriters named below (the "U.S. Underwriters"), for whom
Lehman Brothers Inc. and Goldman, Sachs & Co. are acting as representatives (the
"Representatives"), have severally agreed to purchase from the Company, and the
Company has agreed to sell to each U.S. Underwriter, the aggregate number of
shares of Common Stock set forth opposite their respective names below:

<TABLE>
<CAPTION>
NUMBER OF
U.S. UNDERWRITERS SHARES
--------------------------------------------------------------------------------- ----------
<S> <C>
Lehman Brothers Inc..............................................................
Goldman, Sachs & Co..............................................................
----------
Total........................................................................ 4,400,000
----------
----------
</TABLE>

Under the terms of, and subject to the conditions contained in, the
International Underwriting Agreement, the form of which is filed as an exhibit
to the Registration Statement, the managers named below of the concurrent
offering of the Common Stock outside the United States (the "International
Managers" and together with the U.S. Underwriters, the "Underwriters") have
severally agreed to purchase from the Company, and the Company has agreed to
sell to each International Manager, the aggregate number of shares of Common
Stock set forth opposite the name of each such International Manager below:

<TABLE>
<CAPTION>
NUMBER OF
INTERNATIONAL MANAGERS SHARES
--------------------------------------------------------------------------------- ----------
<S> <C>
Lehman Brothers International (Europe)...........................................
Goldman Sachs International......................................................
----------
Total........................................................................ 1,100,000
----------
----------
</TABLE>

The U.S. Underwriting Agreement and the International Underwriting Agreement
(collectively, the "Underwriting Agreements") provide that the obligations of
the U.S. Underwriters and the International Managers to purchase shares of
Common Stock are subject to certain conditions, and that if any of the foregoing
shares of Common Stock are purchased by the U.S. Underwriters pursuant to the
U.S. Underwriting Agreement or by the International Managers pursuant to the
International Underwriting Agreement, all the shares of Common Stock agreed to
be purchased by either the U.S. Underwriters or the International Managers, as
the case may be, pursuant to their respective Underwriting Agreements must be so
purchased. The offering price and underwriting discounts and commissions for the
U.S. Offering and the International Offering are identical. The closing of the
U.S. Offering is a condition to the closing of the International Offering, and
the closing of the International Offering is a condition to the closing of the
U.S. Offering.

The Company has been advised that the U.S. Underwriters and the
International Managers propose to offer the shares of Common Stock directly to
the public at the public offering price set forth on the cover page of this
Prospectus, and to certain selected dealers (who may include the U.S.
Underwriters and the International Managers) at such public offering price less
a concession not in excess of $ per share. The U.S. Underwriters and the
International Managers may allow and the selected dealers may reallow a
concession not in excess of $ per share to certain other brokers and
dealers. After commencement of the public offering, the public offering price,
the concession to selected dealers and the reallowance to other dealers may be
changed by the U.S. Underwriters or the International Managers.

The Company has granted to the U.S. Underwriters and the International
Managers options to purchase up to an aggregate of 660,000 and 165,000
additional shares of Common Stock, respectively, exercisable solely to cover
over-allotments, at the offering price to the public less the underwriting
discounts and commissions, shown on the cover page of this Prospectus. Either or
both of such options may be exercised at any time until 30 days after the date
of the U.S. Underwriting Agreement and the International Underwriting Agreement,
respectively. To the extent that either option is exercised, each U.S.
Underwriter

28
<PAGE>
or International Manager, as the case may be, will be committed, subject to
certain conditions, to purchase a number of the additional shares of Common
Stock proportionate to such U.S. Underwriter's or International Manager's
initial commitment as indicated in the preceding tables.

The Company has agreed to indemnify the U.S. Underwriters and the
International Managers against certain liabilities, including liabilities under
the Securities Act, and to contribute to payments the U.S. Underwriters and the
International Managers may be required to make in respect thereof.

The Company has agreed that without the written consent of the
Representatives and, it will not offer, sell, contract to sell or otherwise
dispose of any shares of Common Stock or any securities, convertible or
exchangeable therefor, for a period of 90 days from the date of this Prospectus,
subject to limited exceptions.

The Company's directors and executive officers, who collectively held as of
December 31, 1994 an aggregate of 753,620 shares of Common Stock (including
shares issuable upon exercise of options), have agreed that without the consent
of the Representatives they will not offer, sell, contract to sell or otherwise
dispose of any shares of Common Stock or any securities convertible into or
exchangeable therefor for a period of 90 days from the date of this Prospectus.

The U.S. Underwriters and the International Managers have entered into an
Agreement Between U.S. Underwriters and International Managers pursuant to which
each U.S. Underwriter has agreed that, as part of the distribution of the shares
of Common Stock offered in the U.S. Offering, (i) it is not purchasing any such
shares for the account of anyone other than a U.S. Person (as defined below) and
(ii) it has not offered or sold and will not offer, sell, resell or deliver,
directly or indirectly, any of such shares or distribute any prospectus relating
to the U.S. Offering to anyone other than a U.S. Person. In addition, pursuant
to such agreement each International Manager has agreed that, as part of the
distribution of the shares of Common Stock offered in the International
Offering, (i) it is not purchasing any such shares for the account of a U.S.
Person and (ii) it has not offered or sold, and will not offer, sell, resell or
deliver, directly or indirectly, any of such shares or distribute any prospectus
relating to the International Offering to any U.S. Person. Each International
Manager has also agreed that it will offer to sell shares only in compliance
with all relevant requirements of any applicable laws.

The foregoing limitations do not apply to stabilization transactions or to
certain other transactions specified in the Underwriting Agreements and the
Agreement Between U.S. Underwriters and International Managers, including (i)
certain purchases and sales between the U.S. Underwriters and the International
Managers, (ii) certain offers, sales, resales, deliveries or distributions to or
through investment advisors or other persons exercising investment discretion,
(iii) purchases, offers or sales by a U.S. Underwriter who is also acting as an
International Manager or by an International Manager who is also acting as a
U.S. Underwriter and (iv) other transactions specifically approved by the
Representatives and the International Managers. As used herein, (a) the term
"United States" means the United States of America (including the District of
Columbia) and its territories, its possessions and other areas subject to its
jurisdiction, and (b) the term "U.S. Person" means any resident or national of
the United States, any corporation, partnership or other entity created or
organized in or under the laws of the United States or any estate or trust the
income of which is subject to United States income taxation regardless of the
source of its income (other than the foreign branch of any U.S. Person), and
includes any United States branch of a Person other than a U.S. Person.

Certain of the Underwriters and selling group members (if any) that
currently act as market makers for the Common Stock may engage in "passive
market making" in the Common Stock on the Nasdaq in accordance with Rule 10b-6A
under the Exchange Act. Rule 10b-6A permits, upon the satisfaction of certain
conditions, underwriters and selling group members participating in a
distribution that are also Nasdaq market makers in the security being
distributed to engage in limited market making transactions during the period
when Rule 10b-6 under the Exchange Act would otherwise prohibit such activity.
Rule 10b-6A prohibits underwriters and selling group members engaged in passive
market making generally from entering a bid or effecting a purchase at a price
that exceeds the highest bid for those securities displayed on the Nasdaq by a
market marker that is not participating in the distribution. Under Rule 10b-6A,
each underwriter or selling group member engaged in passive market making is
subject to a daily net purchase

29
<PAGE>
limitation equal to 30% of such entity's average daily trading volume during the
two full consecutive calendar months immediately preceding the date of the
filing of the registration statement under the Securities Act pertaining to the
security to be distributed.

From time to time, certain of the Underwriters or their affiliates have
provided, and may continue to provide, investment banking services to the
Company.

VALIDITY OF SHARES

The validity of the Common Stock offered hereby will be passed upon for the
Company by Dorsey & Whitney P.L.L.P., Minneapolis, Minnesota. Certain legal
matters will passed upon for the Underwriters by Gray Cary Ware & Freidenrich, A
Professional Corporation, Palo Alto, California.

EXPERTS

The consolidated balance sheets of the Company as of October 31, 1993 and
1994, and the consolidated statements of income, stockholders' investment and
cash flows for each of the three years in the period ended October 31, 1994,
together with the related financial statement schedules thereto, contained in or
incorporated by reference in this Prospectus and in the Registration Statement
have been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their reports with respect thereto, and are included herein in
reliance upon the authority of said firm as experts in accounting and auditing
in giving said reports.

30
<PAGE>
ADC TELECOMMUNICATIONS, INC. AND SUBSIDIARIES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Report of Independent Public Accountants................................... F-2
Consolidated Balance Sheets................................................ F-3
Consolidated Statements of Income.......................................... F-4
Consolidated Statements of Stockholders' Investment........................ F-5
Consolidated Statements of Cash Flows...................................... F-6
Notes to Consolidated Financial Statements................................. F-7
</TABLE>

F-1
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To ADC Telecommunications, Inc.:

We have audited the accompanying consolidated balance sheets of ADC
TELECOMMUNICATIONS, INC. AND SUBSIDIARIES as of October 31, 1994 and 1993, and
the related consolidated statements of income, stockholders' investment and cash
flows for each of the three years in the period ended October 31, 1994. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of ADC Telecommunications, Inc.
and Subsidiaries as of October 31, 1994 and 1993, and the results of their
operations and their cash flows for each of the three years in the period ended
October 31, 1994, in conformity with generally accepted accounting principles.

ARTHUR ANDERSEN LLP

Minneapolis, Minnesota
December 16, 1994

F-2
<PAGE>
ADC TELECOMMUNICATIONS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)

ASSETS

<TABLE>
<CAPTION>
OCTOBER 31,
------------------
1993 1994
-------- -------- APRIL 30,
1995
-----------
(UNAUDITED)
<S> <C> <C> <C>
Current Assets:
Cash and cash equivalents....................... $ 16,324 $ 49,512 $ 37,135
Accounts receivable, net of reserves of $2,541,
$2,494 and $3,203.............................. 66,830 75,348 82,564
Inventories, net of reserves of $5,048, $5,668
and $7,322..................................... 48,278 64,203 83,333
Prepaid income taxes and other.................. 11,099 10,305 10,743
-------- -------- -----------
Total current assets.......................... 142,531 199,368 213,775
-------- -------- -----------
Property and Equipment:
Land and buildings.............................. 30,794 31,620 32,412
Machinery and equipment......................... 100,117 114,337 125,373
Furniture and fixtures.......................... 15,617 16,232 17,657
Accumulated depreciation and amortization....... (83,652) (96,057) (104,176)
-------- -------- -----------
Total property and equipment.................. 62,876 66,132 71,266
-------- -------- -----------
Other Assets, principally goodwill................ 74,647 69,184 68,256
-------- -------- -----------
$280,054 $334,684 $353,297
-------- -------- -----------
-------- -------- -----------

LIABILITIES AND STOCKHOLDERS' INVESTMENT
Current Liabilities:
Current maturities of long-term debt............ $ 300 $ 400 $ 410
Accounts payable................................ 21,194 22,132 22,706
Accrued compensation and benefits............... 20,490 30,916 25,613
Accrued income taxes............................ 2,368 5,804 4,137
Other accrued liabilities....................... 10,549 8,101 11,520
-------- -------- -----------
Total current liabilities..................... 54,901 67,353 64,386
Deferred Income Taxes............................. 3,949 2,163 1,974
Long-Term Debt, less current maturities above..... 810 410 --
-------- -------- -----------
Total liabilities............................. 59,660 69,926 66,360
-------- -------- -----------
Stockholders' Investment:
Common stock (27,697, 27,888 and 56,146 shares
issued and outstanding)........................ 5,539 5,577 11,229
Paid-in capital................................. 29,465 34,851 31,703
Retained earnings............................... 186,405 225,476 246,331
Deferred compensation........................... (1,015) (1,146) (875)
Cumulative translation adjustment............... -- -- (1,451)
-------- -------- -----------
Total stockholders' investment................ 220,394 264,758 286,937
-------- -------- -----------
$280,054 $334,684 $353,297
-------- -------- -----------
-------- -------- -----------
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-3
<PAGE>
ADC TELECOMMUNICATIONS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
SIX MONTHS
YEARS ENDED OCTOBER 31, ENDED APRIL 30,
---------------------------------- ----------------------
1992 1993 1994 1994 1995
---------- ---------- ---------- ---------- ----------
(UNAUDITED)

<S> <C> <C> <C> <C> <C>
NET SALES......................................... $ 316,496 $ 366,118 $ 448,735 $ 204,749 $ 262,116
COST OF PRODUCT SOLD.............................. 155,074 178,572 221,448 101,407 133,705
---------- ---------- ---------- ---------- ----------
GROSS PROFIT...................................... 161,422 187,546 227,287 103,342 128,411
---------- ---------- ---------- ---------- ----------
Gross profit percentage....................... 51.0% 51.2% 50.7% 50.5% 49.0%
---------- ---------- ---------- ---------- ----------
EXPENSES:
Development and product engineering............. 36,063 40,988 48,974 23,250 29,146
Selling and administration...................... 82,966 93,311 110,799 51,767 62,401
Goodwill amortization........................... 2,720 2,798 3,135 1,567 1,566
Personnel reduction............................. 3,800 -- -- -- 3,914
---------- ---------- ---------- ---------- ----------
Total expenses................................ 125,549 137,097 162,908 76,584 97,027
---------- ---------- ---------- ---------- ----------
OPERATING INCOME.................................. 35,873 50,449 64,379 26,758 31,384
OTHER INCOME (EXPENSE), NET:
Interest...................................... (942) 183 1,158 297 1,203
Other......................................... (205) (895) (1,216) (421) --
---------- ---------- ---------- ---------- ----------
INCOME BEFORE INCOME TAXES AND EXTRAORDINARY
ITEM............................................. 34,726 49,737 64,321 26,634 32,587
PROVISION FOR INCOME TAXES........................ 13,700 18,101 23,800 9,854 11,732
---------- ---------- ---------- ---------- ----------
NET INCOME BEFORE EXTRAORDINARY ITEM.............. 21,026 31,636 40,521 16,780 20,855
EXTRAORDINARY ITEM, NET OF TAXES.................. -- -- (1,450) (1,450) --
---------- ---------- ---------- ---------- ----------
NET INCOME........................................ $ 21,026 $ 31,636 $ 39,071 $ 15,330 $ 20,855
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
AVERAGE COMMON SHARES OUTSTANDING................. 54,176 54,998 55,610 55,520 55,974
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
EARNINGS PER SHARE BEFORE EXTRAORDINARY ITEM...... $ 0.39 $ 0.58 $ 0.73 $ 0.30 $ 0.37
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
EARNINGS PER SHARE................................ $ 0.39 $ 0.58 $ 0.70 $ 0.27 $ 0.37
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-4
<PAGE>
ADC TELECOMMUNICATIONS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' INVESTMENT
(IN THOUSANDS)

<TABLE>
<CAPTION>
COMMON STOCK CUMULATIVE
-------------------- PAID-IN RETAINED DEFERRED TRANSLATION
SHARES AMOUNT CAPITAL EARNINGS COMPENSATION ADJUSTMENT
--------- --------- --------- ---------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
BALANCE OCTOBER 31, 1991.......................... 13,429 $ 2,686 $ 22,285 $ 133,743 $ (340) $ --
Stock issued for employee benefit plans........... 181 36 3,460 -- (1,484) --
Reduction of deferred compensation................ -- -- -- -- 776 --
Net income........................................ -- -- -- 21,026 -- --
--------- --------- --------- ---------- ------------- -----------
BALANCE OCTOBER 31, 1992.......................... 13,610 2,722 25,745 154,769 (1,048) --
Stock split effected in the form of a stock
dividend......................................... 13,778 2,756 (2,756) -- -- --
Stock issued for employee benefit plans........... 309 61 6,476 -- (781) --
Reduction of deferred compensation................ -- -- -- -- 814 --
Net income........................................ -- -- -- 31,636 -- --
--------- --------- --------- ---------- ------------- -----------
BALANCE OCTOBER 31, 1993.......................... 27,697 5,539 29,465 186,405 (1,015) --
Stock issued for employee benefit plans........... 191 38 5,386 -- (1,262) --
Reduction of deferred compensation................ -- -- -- -- 1,131 --
Net income........................................ -- -- -- 39,071 -- --
--------- --------- --------- ---------- ------------- -----------
BALANCE OCTOBER 31, 1994.......................... 27,888 5,577 34,851 225,476 (1,146) --
Stock split effected in the form of a stock
dividend*........................................ 28,044 5,609 (5,609) -- -- --
Stock issued for employee benefit plans*.......... 214 43 2,461 -- -- --
Reduction of deferred compensation*............... -- -- -- -- 271 --
Translation adjustment*........................... -- -- -- -- -- (1,451)
Net income*....................................... -- -- -- 20,855 -- --
--------- --------- --------- ---------- ------------- -----------
BALANCE APRIL 30, 1995*........................... 56,146 $ 11,229 $ 31,703 $ 246,331 $ (875) $ (1,451)
--------- --------- --------- ---------- ------------- -----------
--------- --------- --------- ---------- ------------- -----------
<FN>
------------------------
*Unaudited
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-5
<PAGE>
ADC TELECOMMUNICATIONS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
YEAR ENDED SIX MONTHS ENDED APRIL
OCTOBER 31, 30,
---------------------------------- ----------------------
1992 1993 1994 1994 1995
---------- ---------- ---------- ---------- ----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income................................................... $ 21,026 $ 31,636 $ 39,071 $ 15,330 $ 20,855
Adjustments to reconcile net income to net cash from
operating activities--
Depreciation and amortization.............................. 19,878 20,587 23,366 11,213 11,567
Reduction in deferred compensation......................... 776 814 1,131 543 271
Decrease in deferred income taxes.......................... (243) (444) (1,786) (1,332) (189)
Other...................................................... -- 115
Changes in assets and liabilities..........................
Accounts receivable...................................... (6,041) (19,416) (8,518) (2,718) (6,516)
Inventories.............................................. 1,364 (9,215) (15,925) (7,734) (18,142)
Prepaid income taxes and other assets.................... (921) (3,586) 1,010 814 (283)
Accounts payable......................................... 560 2,967 8,438 514 482
Accrued liabilities...................................... (1,644) 6,105 11,414 5,562 (4,855)
---------- ---------- ---------- ---------- ----------
Total cash from operating activities................... 34,755 29,448 58,201 22,192 3,305
---------- ---------- ---------- ---------- ----------
CASH FLOWS FROM INVESTMENT ACTIVITIES:
Property and equipment additions, net...................... (15,780) (21,243) (21,788) (10,261) (12,108)
Acquisition payments....................................... -- (2,199) (7,087) (7,087) (4,676)
Investment in technology................................... -- (763) -- -- --
Long-term investments...................................... -- (1,835) -- -- (1,000)
---------- ---------- ---------- ---------- ----------
Total cash used for investment activities.............. (15,780) (26,040) (28,875) (17,348) (17,784)
---------- ---------- ---------- ---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Decrease in long-term debt................................. (30,612) (13,324) (300) (300) (400)
Common stock issued........................................ 2,012 5,756 4,162 896 2,504
---------- ---------- ---------- ---------- ----------
Total cash from (used for) financing activities........ (28,600) (7,568) 3,862 596 2,104
---------- ---------- ---------- ---------- ----------
EFFECT OF EXCHANGE RATE CHANGES ON CASH...................... -- -- -- -- (2)
---------- ---------- ---------- ---------- ----------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS............. (9,625) (4,160) 33,188 5,440 (12,377)
CASH AND CASH EQUIVALENTS, beginning of period............... 30,109 20,484 16,324 16,324 49,512
---------- ---------- ---------- ---------- ----------
CASH AND CASH EQUIVALENTS, end of period..................... $ 20,484 $ 16,324 $ 49,512 $ 21,764 $ 37,135
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
SUPPLEMENTAL DISCLOSURES:
Interest paid.............................................. $ 2,271 $ 308 $ 574 $ 80 $ 69
Income taxes paid.......................................... $ 13,361 $ 18,206 $ 21,802 $ 6,752 $ 13,560
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-6
<PAGE>
ADC TELECOMMUNICATIONS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

BUSINESS AND OPERATIONS--The consolidated financial statements include the
accounts of ADC Telecommunications, Inc. (a Minnesota corporation) and its
wholly-owned subsidiaries, referred to collectively herein as the Company. All
significant intercompany transactions and balances have been eliminated in
consolidation.

The Company designs, manufactures and markets a broad range of transmission,
and networking systems, and physical connectivity products for broadband
telecommunications networks utilizing copper, coax, fiber optic and wireless
transmission methods. Revenue is recognized at the time of shipment. Export
sales were $49,347,000, $58,919,000, and $67,113,000 for the years ended October
31, 1992, 1993 and 1994, and $29,500,000 and $46,627,000 for the six months
ended April 30, 1994 and 1995, respectively.

CASH EQUIVALENTS--Cash equivalents primarily represent short-term
investments in commercial paper with maturities of three months or less. These
investments are reflected in the accompanying consolidated balance sheets at
cost, which approximates market.

INVENTORIES--Inventories include material, labor and overhead and are stated
at the lower of first-in, first-out cost or market. Inventories consisted of:

<TABLE>
<CAPTION>
OCTOBER 31,
-------------------- APRIL 30,
1993 1994 1995
--------- --------- -----------
(IN THOUSANDS) (UNAUDITED)
<S> <C> <C> <C>
Purchased materials and manufactured products........................ $ 42,889 $ 57,031 $ 75,471
Work-in-process...................................................... 5,389 7,172 7,862
--------- --------- -----------
$ 48,278 $ 64,203 $ 83,333
--------- --------- -----------
--------- --------- -----------
</TABLE>

PROPERTY AND EQUIPMENT--Property and equipment are recorded at cost.
Additions and improvements to property and equipment are capitalized at cost
while maintenance and repair expenditures are charged to operations as incurred.

Depreciation charges are computed using the straight-line method for
financial reporting purposes and both straight-line and accelerated methods for
income tax purposes. For financial reporting purposes, depreciation is provided
over the following estimated useful lives:

<TABLE>
<CAPTION>
YEARS
-----
<S> <C>
Buildings and improvements............................................................. 5-30
Machinery and equipment................................................................ 3-10
Furniture and fixtures................................................................. 3-10
</TABLE>

GOODWILL AND OTHER INTANGIBLES--The excess of the cost over the net assets
of acquired businesses (goodwill of $77,000,000 at October 31, 1993 and 1994 and
at April 30, 1995) is being amortized on a straight-line basis over 25 years.
Related accumulated amortization was $8,653,000, $11,788,000, and $13,355,000 at
October 31, 1993 and 1994 and April 30, 1995, respectively. Other intangibles
are being amortized on a straight-line basis over five years.

FOREIGN CURRENCY TRANSLATION--The functional currency for the majority of
the Company's foreign operations is the applicable local currency. The
translation to U.S. dollars is performed for balance sheet accounts using
exchange rates in effect at the balance sheet date and for revenue and expense
accounts using a weighted average exchange rate during the period. The gains or
losses resulting from such translation are included in stockholders' investment.
Prior to 1995, the Company's primary functional currency was the U.S. dollar.
The functional currency changed as a result of substantial changes in the
Company's foreign operations.

F-7
<PAGE>
ADC TELECOMMUNICATIONS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)
RESEARCH AND DEVELOPMENT COSTS--The Company's policy is to expense all
research and development costs in the period incurred.

WARRANTY COSTS--The Company warrants most of its products against defects in
materials and workmanship under normal use and service for periods extending to
fifteen years. Historically, warranty costs have been insignificant. The Company
maintains reserves for warranty costs based on this experience.

EARNINGS PER SHARE--Earnings per share is computed using the weighted
average number of common shares outstanding during the year, after consideration
of the dilutive effect of stock options and restricted stock awards.

RECLASSIFICATIONS--Certain prior year amounts have been reclassified to
conform to the current year financial statement presentation. These
reclassifications had no impact on previously reported results of operations or
stockholders' investment.

NEW ACCOUNTING PRONOUNCEMENTS--A new accounting standard, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of,
requires impairment losses on long-lived assets to be recognized when an asset's
book value exceeds its expected future cash flows (undiscounted). The Company
anticipates adopting this standard on November 1, 1996 and does not expect that
adoption will have a material impact on the financial position or results of
operations of the Company.

INTERIM RESULTS (UNAUDITED)--The accompanying consolidated balance sheet at
April 30, 1995 and the consolidated statements of income and cash flows for the
six months ended April 30, 1994 and 1995, and the consolidated statement of
stockholders' investment for the six months ended April 30, 1995 are unaudited.
In the opinion of the Company's management, the unaudited interim consolidated
financial statements have been prepared on the same basis as the audited
consolidated financial statements and include all adjustments, consisting of
only normal recurring adjustments, necessary to fairly state the information set
forth therein. The results of operations for the six months ended April 30, 1995
are not necessarily indicative of the results to be expected for the fiscal year
ending October 31, 1995. The information disclosed in these notes to
consolidated financial statements related to these periods is unaudited.

(2) EXTRAORDINARY ITEM:
The building that serves as headquarters for Fibermux Corporation
(Fibermux), a wholly-owned subsidiary of the Company, suffered damage as a
result of the earthquake that struck Los Angeles on January 17, 1994. The
facility sustained damages of $2,300,000 (net of the related $850,000 tax
benefit). All operations resumed by February 8, 1994.

(3) ACQUISITIONS:
Effective May 6, 1991, the Company acquired Fibermux. During the third
quarter of 1990, the Company acquired technology and other assets of TELINQ
Systems Incorporated and the stock of American Lightwave Systems, Inc. (ALS).
Payments related to these acquisitions through April 30, 1995 totalled
$74,050,000.

These acquisitions have been accounted for as purchases. Accordingly, the
total purchase prices were allocated to the net assets acquired based on
estimated fair values at the dates of the acquisitions. The excess of cost over
the net assets acquired has been recorded as goodwill. The results of operations
have been included in the Consolidated Statements of Income from the respective
acquisition dates. The inclusion of financial data for these acquisitions prior
to the dates of acquisition would not have materially affected reported results.

(4) DEBT:
The Company has revolving credit agreements which permit borrowing up to
$40,000,000 on an unsecured basis, principally at prevailing market rates of
interest. The agreements require, among other

F-8
<PAGE>
ADC TELECOMMUNICATIONS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(4) DEBT: (CONTINUED)
matters, that the Company meet certain defined net worth, interest coverage and
liability to equity ratios, and restrict cash dividends. The Company was in
compliance with these covenants at April 30, 1995. The Company pays commitment
fees based upon the average unused amounts of the commitments. There are no
compensating balance requirements.

In May 1991, the Company borrowed $40,000,000 under the revolving credit
agreements to partially finance the acquisition of Fibermux. The debt
outstanding under such agreements was repaid during 1992 and 1993. There was no
outstanding debt under these agreements during 1994 or during the six months
ended April 30, 1995. The weighted average annual interest rates during the
period borrowings were outstanding were 5.3%, and 4.9% for 1992 and 1993,
respectively.

At October 31, 1993 and 1994, and at April 30, 1995, the Company had a
mortgage note payable of $1,100,000, $810,000, and $410,000, respectively,
collateralized by certain land, buildings and equipment. The note is payable in
annual installments of approximately $400,000 through 1996 and bears interest at
a rate of 7.55%.

(5) EMPLOYEE BENEFIT PLANS:

PENSION PLAN--The Company maintains a defined benefit plan covering a
majority of its employees. The Company funds the plan in accordance with the
requirements of Federal laws and regulations. Plan assets consist of fixed
income securities and a managed portfolio of equity securities.

Pension expense included the following components:

<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
-------------------------------
1992 1993 1994
--------- --------- ---------
(IN THOUSANDS)
<S> <C> <C> <C>
Service cost for benefits earned during the period....................... $ 1,412 $ 1,828 $ 1,804
Interest cost on the projected benefit obligation........................ 1,207 1,348 1,522
Return on assets......................................................... (1,216) (2,137) (633)
Net amortization and deferral............................................ 266 984 (700)
--------- --------- ---------
$ 1,669 $ 2,023 $ 1,993
--------- --------- ---------
--------- --------- ---------
Discount rate used to determine actuarial present value of benefits at
October 31.............................................................. 7.0% 7.0% 7.5%
--------- --------- ---------
--------- --------- ---------
</TABLE>

The rate of compensation used to measure the projected benefit obligation
was 6% in 1992, 5% in 1993 and 5% in 1994. The expected long-term rate of return
on plan assets was 9%.

F-9
<PAGE>
ADC TELECOMMUNICATIONS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(5) EMPLOYEE BENEFIT PLANS: (CONTINUED)
The following table sets forth the funded status of the plan as of October
31:

<TABLE>
<CAPTION>
1993 1994
---------- ----------
(IN THOUSANDS)
<S> <C> <C>
Accumulated benefit obligation:
Vested........................................................................ $ (16,282) $ (17,857)
Nonvested..................................................................... (1,248) (1,405)
---------- ----------
Total....................................................................... (17,530) (19,262)
Excess of projected benefit obligation over accumulated benefit obligation...... (4,216) (3,164)
---------- ----------
Projected benefit obligation.................................................... (21,746) (22,426)
Market value of plan assets..................................................... 16,990 17,589
---------- ----------
Unfunded projected benefit obligation........................................... (4,756) (4,837)
Unrecognized net (gain) loss.................................................... (872) (1,922)
Unrecognized prior service cost................................................. 2,092 1,967
Unrecognized transition liability............................................... 993 922
---------- ----------
Total accrued pension liability............................................. $ (2,543) $ (3,870)
---------- ----------
---------- ----------
</TABLE>

The Company also maintains supplemental defined benefit retirement plans for
members of the Board of Directors and for certain officers. The cost of these
plans was $257,000, $210,000, and $352,000 for 1992, 1993 and 1994,
respectively.

RETIREMENT SAVINGS PLAN--The Company has a voluntary plan of investment
available to any employee who has completed one year of service. The Company
contributes 1% of wages to the Retirement Savings Plan on behalf of all
employees covered under the plan. Based on Company performance, salary deferrals
up to 6% of wages are partially matched by the Company. Employees are fully
vested in salary deferrals and Company contributions at all times. The
contributions to this plan totalled $2,639,000, $3,210,000, and $6,778,000 in
1992, 1993 and 1994, respectively. A portion of the cash contributions is
invested in the Company's stock by the Plan's trustee.

STOCK AWARD PLANS--The Company maintains a Stock Incentive Plan which
provides for the granting of certain stock awards, including stock options at
fair market value and restricted shares, to key employees of the Company.

The Company also maintains a Non-Employee Director Stock Option Plan in
order to enhance the ability to attract and retain the services of experienced
and knowledgeable outside directors. The plan provides for granting a maximum of
110,000 nonqualified stock options at fair market value.

The Company issued shares of common stock to certain employees which are
restricted as to their transferability through October 31, 1996. The market
value of such stock at the date of issuance is being amortized over the
restricted period. The unamortized amount of the resulting deferred compensation
is recorded as a reduction of stockholders' investment. In addition, the Company
awarded stock retention bonuses which provide for cash payments to offset the
personal income taxes incurred upon the lapsing of stock restriction. The
compensation expense associated with this plan was $1,008,000, $1,938,000, and
$3,213,000 for the years ended October 31, 1992, 1993 and 1994, and $1,331,000
and $306,000 for the six months ended April 30, 1994 and 1995, respectively.

F-10
<PAGE>
ADC TELECOMMUNICATIONS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(5) EMPLOYEE BENEFIT PLANS: (CONTINUED)
The following schedule summarizes activity in the plans:

<TABLE>
<CAPTION>
STOCK RESTRICTED GRANT
OPTIONS STOCK PRICE
---------- ---------- ---------
<S> <C> <C> <C>
Outstanding at October 31, 1992..................................... 2,805,680 248,936 $ 3-$9
Granted........................................................... 186,400 56,600 $ 10-$21
Exercised......................................................... (949,474) -- $ 3-$9
Restrictions lapsed............................................... -- (46,000) $ 5-$9
Cancelled......................................................... (157,866) (38,420) $ 6-$13
---------- ----------
Outstanding at October 31, 1993..................................... 1,884,740 221,116 $ 3-$21
Granted........................................................... 448,270 68,230 $ 16-$22
Exercised......................................................... (324,398) -- $ 3-$11
Restrictions lapsed............................................... -- (172,316) $ 6-$15
Cancelled......................................................... (35,806) (16,220) $ 6-$19
---------- ----------
Outstanding at October 31, 1994..................................... 1,972,806 100,810 $ 3-$22
Granted*.......................................................... 1,439,013 9,000 $ 20-$32
Exercised*........................................................ (382,278) -- $ 3-$19
Restrictions lapsed*.............................................. -- (720) $ 18-$22
Cancelled*........................................................ (164,285) (17,950) $ 18-$32
---------- ----------
Outstanding at April 30, 1995*...................................... 2,865,256 91,140 $ 3-$32
---------- ---------- ---------
---------- ---------- ---------
Exercisable at April 30, 1995....................................... 1,284,267 -- $ 3-$27
---------- ---------- ---------
---------- ---------- ---------
<FN>
------------------------
* Unaudited
</TABLE>

(6) CAPITAL STOCK:

AUTHORIZED STOCK--The Company is authorized to issue 100,000,000 shares of
common stock at 20 cents par value and 10,000,000 shares of preferred stock, no
par value. The Board of Directors has the power to determine the dividend,
voting, conversion and redemption rights of each series of preferred stock which
they may create. There are no preferred shares issued.

STOCK SPLIT--On January 24, 1995 the Company declared a two-for-one stock
split effected in the form of a 100% stock dividend paid February 28, 1995 to
stockholders of record as of February 15, 1995. On May 26, 1993, the Company
declared a two-for-one stock split effected in the form of a 100% stock dividend
paid June 28, 1993 to stockholders of record as of June 15, 1993. The share and
per share information in the accompanying financial statements have been
adjusted to reflect the effect of the stock dividends.

SHAREHOLDER RIGHTS PLAN--The Company has a Shareholder Rights Plan which
provides that if any person or group acquires 20% or more of the Company's
common stock, each Right not owned by such person or group will entitle its
holder to purchase, at the Right's then-current purchase price ($8 1/3 at April
30, 1995), common stock of the Company having a value of twice the Right's
purchase price. The Rights would not be triggered, however, if the acquisition
of 20% or more of the Company's common stock is pursuant to a tender offer or
exchange for all outstanding shares of the Company's common stock which is
determined by the Board of Directors to be fair and in the best interests of the
Company and its shareholders. If the Board of Directors determines that a 10%
shareholder's interest is likely to have an adverse effect on the long-term
interests of the Company and its shareholders, the Rights may also become
exercisable. The Rights are redeemable at 5/6 cent any time prior to the time
they become exercisable. The Rights will expire on October 6, 1996 if not
previously redeemed or exercised.

F-11
<PAGE>
ADC TELECOMMUNICATIONS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(7) INCOME TAXES:
Effective November 1, 1993, the Company adopted Statement of Financial
Accounting Standards (SFAS) No. 109, "Accounting for Income Taxes." SFAS No. 109
requires the recognition of deferred tax liabilities or assets for the expected
future tax consequences of temporary differences between the book and tax bases
of assets and liabilities. SFAS No. 109 was adopted prospectively and the
cumulative impact of adoption was not material.

The components of the provision for income taxes are as follows:

<TABLE>
<CAPTION>
YEARS ENDED OCTOBER 31,
-------------------------------
1992 1993 1994
--------- --------- ---------
(IN THOUSANDS)
<S> <C> <C> <C>
Current taxes payable--
Federal.............................................................. $ 12,071 $ 17,820 $ 21,357
Foreign.............................................................. 567 426 330
State................................................................ 1,629 2,859 3,211
--------- --------- ---------
14,267 21,105 24,898
Deferred............................................................... (567) (3,004) (1,098)
--------- --------- ---------
Total provision...................................................... $ 13,700 $ 18,101 $ 23,800
--------- --------- ---------
--------- --------- ---------
</TABLE>

The Company records a reduction in income taxes payable for qualifying tax
credits in the year in which they occur.

The benefit for deferred taxes is primarily due to timing differences in the
tax deductibility of employee benefit plan costs, depreciation and certain
accrued expenses and reserves which are not yet deductible for income tax
purposes.

The effective income tax rate differs from the Federal statutory rate as
follows:

<TABLE>
<CAPTION>
YEARS ENDED OCTOBER 31,
-------------------------------------
1992 1993 1994
----- ----- -----
<S> <C> <C> <C>
Federal statutory rate............................................................. 34% 35% 35%
Current year tax credits utilized for research and development..................... (3) (2) (2)
Goodwill........................................................................... 3 2 2
State income taxes, net............................................................ 3 3 3
Other, net......................................................................... 2 (2) (1)
-- -- --
Effective income tax rate........................................................ 39% 36% 37%
-- -- --
-- -- --
</TABLE>

The Company's effective tax rate of 36% for the six months ended April 30,
1995 is based on the 1995 estimated annual rate.

F-12
<PAGE>
ADC TELECOMMUNICATIONS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(7) INCOME TAXES: (CONTINUED)
Deferred tax assets and liabilities as of October 31, 1994 are comprised of
the following:

<TABLE>
<CAPTION>
Current deferred tax assets:
<S> <C>
Asset valuation reserves......................................... $ 3,059
Accrued liabilities.............................................. 4,339
Other............................................................ 326
---------
Total.......................................................... $ 7,724
---------
---------
Non-current deferred tax assets (liabilities):
Depreciation..................................................... $ (2,536)
Other............................................................ 373
---------
Total.......................................................... $ (2,163)
---------
---------
</TABLE>

The Company's United States income tax returns for years through 1993 have
been examined. Management believes that adequate provision for income taxes has
been made for all periods through April 30, 1995.

(8) COMMITMENTS AND CONTINGENCIES:

OPERATING LEASES--A portion of the Company's operations are conducted using
leased equipment and facilities. These leases are non-cancellable and renewable
with expiration dates ranging through the year 2004. The rental expense included
in the accompanying consolidated income statements was $5,324,000, $5,347,000,
and $5,411,000 for the years ended October 31, 1992, 1993 and 1994, and
$2,387,000 and $2,679,000 for the six months ended April 30, 1994 and 1995,
respectively.

The following is a schedule of future minimum rental payments required under
all non-cancellable operating leases as of October 31, 1994:

<TABLE>
<CAPTION>
(IN THOUSANDS)
--------------
<S> <C>
1995...................................................... $ 5,078
1996...................................................... 3,711
1997...................................................... 2,281
1998...................................................... 1,753
1999 and Thereafter....................................... 3,274
-------
$ 16,097
-------
-------
</TABLE>

CONTINGENCIES--The Company is exposed to a number of asserted and unasserted
potential claims encountered in the normal course of business. In the opinion of
management, the resolution of these matters will not have a material adverse
effect on the Company's financial position or results of operations.

CHANGE OF CONTROL--The Board of Directors has approved the extension of
certain employee benefits, including salary continuation to key employees, in
the event of a change of control of the Company. The Board has retained the
flexibility to cancel such provisions under certain circumstances.

(9) PERSONNEL REDUCTION (UNAUDITED):

During the six months ended April 30, 1995, the Company initiated a
realignment of its Kentrox and Fibermux subsidiaries into one business unit. The
Company recorded a charge of $3,914,000 in conjunction with the realignment,
primarily related to reductions in personnel. The realignment terminated
approximately 110 Fibermux employees primarily in sales and administration and
engineering. Substantially all termination benefits are expected to be paid by
October 31, 1995.

F-13
<PAGE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY OR ANY OF THE U.S. UNDERWRITERS. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY
SECURITIES OTHER THAN THE SECURITIES TO WHICH IT RELATES OR AN OFFER TO SELL OR
A SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH
SUCH OFFER OR SOLICITATION IS UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS
NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE
THE DATE HEREOF OR THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY
TIME SUBSEQUENT TO ITS DATE.

---------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
---
<S> <C>
Available Information.............................. 2
Documents Incorporated by Reference................ 2
Prospectus Summary................................. 3
Risk Factors....................................... 5
Use of Proceeds.................................... 8
Price Range of Common Stock and Dividend Policy.... 8
Capitalization..................................... 9
Selected Consolidated Financial Data............... 10
Management's Discussion and Analysis of Financial
Condition and Results of Operations.............. 11
Business........................................... 17
Certain United States Federal Tax Considerations
for Non-U.S. Holders of Common Stock............. 26
Underwriting....................................... 28
Validity of Shares................................. 30
Experts............................................ 30
Index to Consolidated Financials Statements........ F-1
</TABLE>

5,500,000 SHARES

[LOGO]

COMMON STOCK

-------------------

PROSPECTUS
June , 1995

---------------------

LEHMAN BROTHERS

GOLDMAN, SACHS & CO.

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<PAGE>
[INT'L VERSION]

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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY OR ANY OF THE INTERNATIONAL MANAGERS. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY
SECURITIES OTHER THAN THE SECURITIES TO WHICH IT RELATES OR AN OFFER TO SELL OR
A SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH
SUCH OFFER OR SOLICITATION IS UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS
NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE
THE DATE HEREOF OR THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY
TIME SUBSEQUENT TO ITS DATE.

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TABLE OF CONTENTS

5,500,000 SHARES

[LOGO]

COMMON STOCK

-------------------

PROSPECTUS
June , 1995

---------------------

LEHMAN BROTHERS

GOLDMAN SACHS INTERNATIONAL

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