C O R P O R A T E O V E R V I E W 1
ADTRAN has been improving telecommunications with smart solutions and innovation for more than 25 years. In the world of broadband, ADTRAN is the reliable business partner you can trust to build the high-performance network you need to compete in today s challenging business environment. 3
Widely deployed by telecommunications carriers, small and mid-sized businesses and distributed enterprises, ADTRAN products enable voice and broadband access across copper, fiber, and wireless networks. A History of Success ADTRAN was incorporated in 1985 and began operation in 1986 in Huntsville, Alabama. Our corporate headquarters and principal administrative, engineering, and manufacturing facilities are located on an 80-acre campus in Cummings Research Park, the nation s second largest science and technology community. In addition to Huntsville, the company also has engineering facilities in Phoenix, Arizona, Mountain View, California, and Ottawa, Canada. With superb talent and excellent management, the company has steadily grown to a workforce that now approaches 1,700 employees worldwide. ADTRAN has two distinct operating divisions, Carrier Networks and Enterprise Networks. The Carrier Networks Division offers products used by service providers to deliver voice and broadband services to a customer s premises. The Enterprise Networks Division provides small and mid-size businesses or enterprise customers the products to serve numerous business applications such as VoIP, LAN, Internet, and VPN services across one or more sites. Combined, ADTRAN offers a premier portfolio of more than 1,700 high-speed network access products and communication devices. ADTRAN is proud to hold ISO 9001, ISO 14001, and TL 9000 NSAI certifications, which further demonstrate our ongoing corporate commitment to excellence. The International Organization for Standardization ISO issues certifications to suppliers in the telecommunications arena who meet strict requirements and adhere to a consistent set of quality system guidelines. As an ISO-certified supplier supporting next-generation quality standards, the company maintains extensive in-house labs for reliability, component, and compliance testing all in the name of customer satisfaction. Every ADTRAN purchase is backed by an indisputable reputation of quality and reliability. ADTRAN continues its long-term, corporate-wide commitment to quality assurance in all phases of business and manufacturing operations. TL19.1270 Both divisions of the company are positioned with product and service offerings that compete in many segments of the global telecommunications market, specifically in the areas of Ethernet- and Internet Protocol- (IP) based networks. As networks migrate to IP-based architectures, ADTRAN has strengthened its technologies in its primary growth areas: Broadband Access, Optical Access, and Internetworking. A Commitment to Quality and Reliability ADTRAN maintains a disciplined program of compliance with the standards mandated by the Sarbanes-Oxley Act, including the Section 404 requirement that we document and test key internal controls over financial reporting, and our strict Code of Business Conduct and Ethics adopted in 2003. In our view, both measures are a reaffirmation of the high standards of ethical conduct we have enforced since our founding. 4
Financial Performance 2010 Operating Results ADTRAN seeks to be a high-quality, low-cost provider of products in our markets. The company continues its successful strategy of increasing unit volume and market share through the introduction of new products and the proliferation of succeeding generations of products with lower selling prices and increased functionality as compared to both the prior generation of the product and competitive products. An important part of the ADTRAN strategy is to reduce the cost of each succeeding product generation and then to lower the product s selling price based on the cost savings achieved. $473 $477 $606 $501 $484 ADTRAN remains a leading provider of networking and communications equipment. The company reported annual sales revenue of $606 million in 2010. A complete report of the company s financial results and current Annual Report can be found on the Investor Relations portion of the ADTRAN Website at www.adtran.com/investorrelations 2006 2007 2008 2009 2010 Annual Revenue (In millions) The company expects to continue to demonstrate sound financial competence as it provides easy-to-use, affordable, and reliable innovative network solutions that deliver a connected world. Products and Services The Carrier Networks Division offers access system equipment used by service providers to deliver voice and broadband services to the customer s premises. The Enterprise Networks Division provides products used by enterprise customers to construct broadband infrastructure within the customer s site or among distributed sites. ADTRAN products are developed for markets serving both ends of the last mile, or local loop, to transmit, route, or switch data and voice traffic traveling across the local loop. Our solutions are currently in use by every major U.S. service provider and many global providers, as well as by many public, private, and governmental organizations worldwide. Our success in the access network has established ADTRAN as a leader in the industry, with a reputation for quality products and superior customer service. 5
ADTRAN is an active participant in numerous standards organizations and has been recognized as a significant contributor in the development of worldwide standards for many technologies. Commitment to R&D Rapidly changing technologies, evolving industry standards, changing customer requirements, and continuing developments in telecommunications service offerings characterize the markets for ADTRAN products. The company s ability to adapt to these changes and to develop new and enhanced products is a significant factor in maintaining or improving ADTRAN s competitive position and growth potential. As a result, ADTRAN continues to make significant investments in product development. Our product development activities center on products to support both existing and emerging technologies in the telecommunications industry. We are actively engaged in developing and refining technologies to support broadband services over TDM, ATM and IP network architectures. Our work involves Ethernet transport, DSL transport (VDSL2, ADSL2+, ADSL, SHDSL, and HDSLx), fiber optic transport, access routing, Ethernet switching, integrated access and network management and services. ADTRAN is an active participant in numerous standards organizations and has been recognized as a significant contributor in the development of worldwide standards for many technologies. We were a major contributor to both HDSL2 and SHDSL standards, having developed much of the technology incorporated into them. ADTRAN is involved in a number of additional standards development efforts related to maximizing the bandwidth potential of the copper pair to enable new applications. We contributed to the development of the new second generation VDSL2 ITU-T standard, and as an active participant in the DSL Forum we continue to make contributions toward ADSL2+ and VDSL2 development. Our efforts in industry standards extend beyond the copper loop. ADTRAN continues to promote the evolution of Ethernet technology through participation in the IEEE 802 LAN/MAN standards committee, the ITU-T and the Metro Ethernet Forum, all of which are standardizing technologies such as Carrier Ethernet traffic management, networking, Ethernet Operations, Administration and Management (OA&M) and Connectivity Fault Management. Most recently, we have worked through these organizations to bring increased interoperability between GPON equipment. These efforts have included helping Alliance for Telecommunications Industry Solutions (ATIS) establish a new subcommittee focusing on optical access networks and increasing our participation in GPON work in the DSL Forum. Positioned for the Future ADTRAN s success is predicated on our ability to anticipate changes in technology, industry standards, and common carrier service offerings, coupled with our ability to develop and manufacture products cost-effectively. The company s continued ability to adapt is a significant factor in maintaining or improving the company s competitive position and growth potential. 6
ADTRAN s management team and employees are committed to: Helping the customer solve networking problems within the confines of restrained capital budgets Providing responsive customer service, technical support, and training Engineering solutions that fit the distributed networking model being deployed by most service providers Ensuring reliability and redundancy, especially for higher-bandwidth products Designing solutions for service provider networks as they increasingly focus on network transformation, convergence and integration of services ADTRAN is recognized throughout the industry for product quality, outstanding customer service, and overall business success. Satisfying the customer s need to utilize the most cost-effective combination of transmission technologies to connect geographically dispersed locations Introducing new or different technologies without a major system upgrade Assisting customers requiring hands-on installation and maintenance ADTRAN is recognized throughout the industry for product quality, outstanding customer service, and overall business success. The ability to provide carrier and enterprise customers with superbly engineered and innovative products at cost-effective price points, with industry-leading warranties, and best-in-class technical support continues to set ADTRAN apart from the competition. 7
For the regional office nearest you, visit www.adtran.com/regional ADTRAN, Inc. 901 Explorer Boulevard Huntsville, AL 35806 P.O. Box 140000 Huntsville, AL 35814-5516 256 963-8000 voice 256 963-8004 fax General Information 800 9ADTRAN info@adtran.com www.adtran.com Customer Care Center 888 4ADTRAN Pre-Sales Technical Support 800 615-1176 application.engineer@adtran.com www.adtran.com/support Where To Buy 877 280-8416 channel.sales@adtran.com www.adtran.com/where2buy Post-Sales Technical Support 888 423-8726 (888-4ADTRAN) support@adtran.com www.adtran.com/support ACES Installation & Maintenance Services 888 874-ACES aces@adtran.com www.adtran.com/support Training 800 615-1176 voice 256 963-6700 fax training@adtran.com www.adtran.com/university TL19.1270 ADTRAN is an ISO 9001, ISO 14001, and a TL 9000 certified supplier. EN1193C February 2011 Copyright 2011 ADTRAN, Inc. All rights reserved. ADTRAN believes the information in this publication to be accurate as of publication date, and is not responsible for error. Specifications subject to change without notice. ADTRAN, OPTI-6100, NetVanta, Total Access and TScan are registered trademarks of ADTRAN, Inc. and its affiliates in the U.S. and certain other countries. All other trademarks mentioned in this document are the property of their respective owners. ADTRAN five-year warranties apply only to products sold in North America. Global limited lifetime warranties are available for select NetVanta products. For complete warranty information and a list of countries participating in the global warranty, visit www.adtran.com/warranty ADTRAN products may be subject to U.S. export controls and other trade restrictions. Any export, re-export, or transfer of the products contrary to law is prohibited. For more information regarding ADTRAN s export license, please visit www.adtran.com/exportlicense An Export License is required if these ADTRAN products are sold to a Government Entity outside of the EU+8 (Austria, Australia, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Japan, Latvia, Lithuania, Luxembourg, Malta, Netherlands, New Zealand, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, Switzerland, and the United Kingdom). This is per DOC/BIS ruling G030477 issued June 6, 2003.