**EXHIBIT 99.1**

 

**COMMSCOPE, INC. FORWARD-LOOKINGINFORMATION**

 

The Securities Exchange Act of 1934, the Private Securities LitigationReform Act of 1995 and other related laws provide a “safe harbor” forforward-looking statements.  OurForm 10-K for the year ended December 31, 2004, our Annual Report toStockholders, any Form 10-Q or Form 8-K of ours, or any other oral orwritten statements made by us or on our behalf, may include forward-lookingstatements which reflect our current views with respect to future events andfinancial performance. These forward-looking statements are identified by theuse of such terms and phrases as “intends,” “intend,” “intended,” “goal,” “estimate,”“estimates,” “expects,” “expect,” “expected,” “project,” “projects,” “projected,”“projections,” “plans,” “anticipates,” “anticipated,” “should,” “think,” “thinks,”“designed to,” “foreseeable future,” “believe,” “believes,” “scheduled” andsimilar expressions. This list of indicative terms and phrases is not intendedto be all-inclusive.  Readers arecautioned not to place undue reliance on these forward-looking statements,which speak only as of the date the statement was made. We do not intend, andare not undertaking any duty or obligation, to update any forward-lookingstatements to reflect developments or information obtained after the date ofthis Exhibit 99.1.

 

Our actual results may differ significantly from the results discussedin forward-looking statements. Factors that might cause such a differenceinclude, but are not limited to (a) the general political, military,economic and competitive conditions in the United States and other marketswhere we operate; (b) changes in capital availability or costs, such aschanges in interest rates, market perceptions of the industry in which weoperate, security ratings or general stock market fluctuations; (c) workforce factors; (d) authoritative generally accepted accountingprinciples or policy changes from such standard-setting bodies as the FinancialAccounting Standards Board, the Public Company Accounting Oversight Board andthe Securities and Exchange Commission (“SEC”); (e) the impact ofcorporate governance, accounting and securities law reforms by the UnitedStates Congress, the SEC and the New York Stock Exchange; (f) risks relatedto production and inventory, including warranty costs, obsolescence charges,excess capacity and material and labor costs; and (g) the factors setforth below.

 

**We may fail to realize the anticipatedbenefits of our acquisition of Connectivity Solutions because of the challengesof integrating and operating the Connectivity Solutions business.**

 

On January 31, 2004, weacquired substantially all of the assets and assumed certain specifiedliabilities of the Connectivity Solutions business (“Connectivity Solutions”)of Avaya Inc. (“Avaya”). Although we expect to realize strategic,operational and financial benefits as a result of the Connectivity Solutionsacquisition, we cannot predict whether and to what extent such benefits will beachieved. There are significant challenges to integrating the ConnectivitySolutions operations into our business, including, but not limited to:

 

•                  successfullymanaging the operations, manufacturing facilities and technology ofConnectivity Solutions;

 

•                  maintainingand increasing the customer base for Connectivity Solutions products;

 

•                  successfullymarketing and selling two potentially competing local area network (“LAN”)products;

 

•                  integratingmanagement information, inventory, accounting and sales systems of CommScopeand Connectivity Solutions; and

 

•                  addressingsignificant operating losses related to certain product lines.

 

The Connectivity Solutions acquisition is significant to us in size andrange of product offerings and we have not previously had comparable experienceintegrating operations as substantial and geographically diverse as those ofConnectivity Solutions. As a result of this acquisition, we now havesubsidiaries or representative branch offices in numerous foreign countries,subjecting us to diverse foreign laws and regulations.

 

In connection with our acquisition of Connectivity Solutions, ourwholly-owned subsidiary Connectivity Solutions Manufacturing, Inc. (“CSMI”)assumed a collective bargaining agreement, with applicable modifications,effective January 31, 2004 with the International Brotherhood ofElectrical Workers. This agreement expires on May 31, 2006.  Disputes under this agreement, our inabilityto successfully negotiate future agreements or attempts to organize ournon-union employees could result in disruption of our operations and higherongoing labor costs.  Prior to theConnectivity Solutions acquisition, none of our domestic employees were subjectto a collective bargaining agreement.

 

Also, in connection with the Connectivity Solutions acquisition, weassumed underfunded pension and retiree medical plan liabilities for U.S.represented employees of CSMI.  Declinesin equity and/or fixed income markets could decrease the value of plan

 

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assets and further increase theunfunded amount of our obligations under these plans, resulting in increasedcosts and funding requirements and the possibility of having to establish aminimum pension liability and record a charge to accumulated other comprehensiveincome/loss.

 

During October 2004, CSMI began implementation of an organizational andcost reduction initiative at its Omaha, Nebraska facility designed to improvethe competitive position of its operations (the “October Initiative”). This OctoberInitiative was substantially completed by June 30, 2005. As a result of thisOctober Initiative, we recognized pretax restructuring charges of$14.2 million and $3.7 million during the fourth quarter of 2004 and thenine months ended September 30, 2005, respectively.

 

Our failure to successfully integrate and operate the ConnectivitySolutions business and to realize the anticipated benefits of the acquisitionand subsequent cost reduction initiatives, including the October Initiative,could adversely impact our operating performance and financial results.

 

**The historical financial information ofConnectivity Solutions is not necessarily indicative of the future financialcondition or performance of the Connectivity Solutions business subsequent tothe acquisition.**

 

The historical financial information of Connectivity Solutions as adivision of Avaya differs from the future financial condition and performanceof the Connectivity Solutions business subsequent to the acquisition because,among other reasons:

 

•                  theConnectivity Solutions financial statements include assets and liabilities thatwere not acquired or assumed by us;

 

•                  theConnectivity Solutions financial statements include an allocation of corporateoverhead from Avaya which would not be applicable after the acquisition;

 

•                  thefinancial information does not reflect anticipated transaction costs orexpected synergies resulting from the acquisition;

 

•                  thefinancial results of Connectivity Solutions may not be indicative of the actualresults of the Connectivity Solutions business when operated as a part of ourcompany; and

 

•                  ConnectivitySolutions’ balance sheet as of September 30, 2003 does not reflect thecurrent market value of the assets acquired as of January 31, 2004.

 

Accordingly, the historical financial information of the ConnectivitySolutions business as a division of Avaya should not be relied upon as beingindicative of the future financial condition or performance of the ConnectivitySolutions business subsequent to the acquisition.

 

**The pro forma financial information ofCommScope and Connectivity Solutions is not necessarily indicative of thefuture financial condition or performance of the combined businesses.**

 

The pro forma financial information of CommScope with respect to the acquisitionof Connectivity Solutions that is included in our SEC filings is intended toprovide information regarding how CommScope might have looked if theacquisition had occurred as of the dates indicated in such information. Theamounts for the Connectivity Solutions business of Avaya included in this proforma information for periods in the year ended December 31, 2003 and themonth of January 2004 are based on the historical results of theConnectivity Solutions business as a division of Avaya, however, and thereforemay not be indicative of the actual results of the Connectivity Solutionsbusiness when operated as part of CommScope going forward. Moreover, the proforma information does not reflect all of the changes that may result from theacquisition, including, but not limited to, those arising from challenges oftransition, integration and restructuring associated with the transaction;challenges of achieving anticipated synergies; ability to retain qualifiedemployees and existing business alliances; maintaining satisfactoryrelationships with represented employees; and customer demand for ConnectivitySolutions products. The pro forma adjustments represent management’s bestestimates based on information available at the time the pro forma informationwas prepared and may differ from the adjustments that may actually have beenrequired. Accordingly, the pro forma financial information should not be reliedupon as being indicative of the historical results that would have beenrealized had the acquisition occurred as of the dates indicated or that may beachieved in the future.

 

**Our failure to successfully implement ourglobal manufacturing initiatives could materially affect our profitability.**

 

During September 2005, we began implementation of global manufacturinginitiatives designed to reduce costs by improving manufacturing efficiency andto improve our long-term competitive position. The implementation of these initiatives includes significant shifts of productioncapacity among facilities.

 

There are significant risks inherent in the implementation of theseinitiatives, including but not limited to ensuring that there

 

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is adequate production capacityto meet customer demand while capacity is being shifted among facilities, nodecrease in product quality occurs as a result of shifting capacity, adequateraw material and other service providers are available to meet the needs at thenew production locations, equipment can be successfully removed, transportedand reinstalled and that adequate supervisory, production and support personnelare available to accommodate the shifted production.

 

In the event that our global manufacturing initiatives are notsuccessfully implemented, we could experience lost future sales and increasedoperating costs as well as customer relations problems, which could have amaterial adverse effect on our results of operations.

 

**Our dependence on commodities subjects us toprice fluctuations and potential availability constraints which couldmaterially adversely affect our profitability.**

 

Our profitability may be materially affected by changes in the marketprice and availability of certain raw materials, most of which are linked tothe commodity markets. The principal raw materials we purchase are plastics andother polymers, copper, steel, fabricated aluminum and optical fiber. Polymersare used to insulate and protect cables, and fabricated aluminum, copper andsteel are used in the production of coaxial and twisted pair cables. Prices forcopper, fluoropolymers and certain other polymers, derived from oil and naturalgas, have increased substantially over the last twelve months and there havebeen supply disruptions as a result of the hurricanes affecting the southern UnitedStates. As a result, we have significantly increased our prices for certainproducts and may have to increase prices again in the future. Delays inimplementing price increases and our inability to achieve market acceptance offuture price increases could have a material impact on the results of ouroperations.

 

**Our sales and profitability could beadversely affected by a reduction in capital spending in the cable televisionand telecommunications industries.**

 

A substantial portion of sales of our Broadband segment products havecome from sales of communications cable products to the cable televisionindustry. Demand for such communications cable products depends primarily oncapital spending by cable television system operators for maintaining, constructing,rebuilding or upgrading their systems. Capital spending in the cable televisionand telecommunications industries is cyclical. The amount of this capitalspending, and, therefore, our sales and profitability, will be affected by avariety of factors, including, without limitation:

 

•                  generaleconomic conditions;

 

•                  availabilityand cost of capital;

 

•                  changesin ownership of cable television operators;

 

•                  cablesystem consolidation within the industry;

 

•                  thefinancial condition of domestic and international cable television operatorsand their access to financing;

 

•                  competitionfrom satellite and wireless television providers and telephone companies;

 

•                  technologicaldevelopments;

 

•                  levelsof network maintenance spending; and

 

•                  newlegislation and regulation of cable television operators.

 

In recent years, cable television capital spending has been volatileand has experienced some substantial declines and we expect ongoing volatilityin the near term. We cannot assure you that cable television capital spendingwill not decrease in the future or when, if at all, it will increase. Lack ofdemand could increase competition for existing customers and negatively affectpricing. In addition, if we are unable to adequately manage our costs inresponse to reduced demand for our products, there could be a material adverseeffect on our profitability.

 

**The sales and profitability of ConnectivitySolutions could be adversely affected by a reduction in capital spending in thecorporate information technology sector as well as in the telecommunicationsindustry.**

 

The majority of Connectivity Solutions sales have been derived fromcorporate information technology spending by global enterprises. In recentyears, global enterprises reduced their information technology capital spendingin light of, and to a greater extent than, the overall decline in the economy.In addition, a significant portion of the sales of Connectivity Solutionshistorically were

 

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derived from capital spendingby telecommunications service providers. These telecommunications customershave greatly reduced their spending on communications equipment, as demand forproducts in the telecommunications equipment market remains at historically lowlevels due to general economic conditions and over-capacity in segments of thetelecommunications industry. If capital spending levels in the corporateinformation technology sector and in the telecommunications industry continueto decline and/or do not increase, the sales and profitability of ourEnterprise and Carrier segments will be adversely affected.

 

**Our communications cable customers aresubject to significant government regulation that could materially adverselyaffect our business.**

 

In recent years, cable television capital spending has been affected bynew legislation and regulation on the federal, state and local level. Manyaspects of government regulation are currently the subject of judicialproceedings and administrative or legislative proposals. The FederalCommunications Commission is continuing its implementation of theTelecommunications Act of 1996, referred to herein as the “Telecom Act” which,when fully implemented, may significantly impact the communications industryand alter federal, state and local laws and regulations regarding the provisionof cable, internet and telephony services. The Telecom Act eliminatessubstantially all restrictions on the entry of telephone companies and certainpublic utilities into the cable television business. Telephone companies maynow enter the cable television business as traditional cable operators, commoncarrier conduits for programming supplied by others, operators of wirelessdistribution systems or hybrid common carrier/cable operator providers ofprogramming on so-called “open video systems.” The economic impact of theTelecom Act, ongoing litigation in this regard, other recent federallegislation and the rules implementing these laws on the cable televisionindustry and, therefore, on our business, is still uncertain.

 

**The loss of one or more of our principalcustomers, distributors, system integrators or value-added resellers couldmaterially adversely affect us.**

 

Although the domestic cable television industry is comprised ofthousands of cable systems, a small number of cable television operators own amajority of cable television systems and account for a majority of the capitalexpenditures made by cable television operators. Although we sell to a widevariety of customers dispersed across many different geographic areas, sales tothe five largest domestic broadband service providers represented approximately18% of our consolidated net sales for the nine months ended September 30,2005. Accordingly, the loss of one or more of our principal communicationscable customers could have a material adverse effect on our results ofoperations and financial condition.

 

We distribute enterprise products and certain other products through aworldwide network of more than 2,000 distributors, system integrators andvalue-added resellers. For the nine months ended September 30, 2005, salesof such products to the top three distributors, system integrators andvalue-added resellers represented approximately 44% of our consolidated netsales. In particular, Anixter International Inc. and affiliates accountedfor approximately 33% of our consolidated net sales during the nine monthsended September 30, 2005. The loss of one or more of our principaldistributors, system integrators or value-added resellers could have a materialadverse effect on our results of operations. Several of our significantdistributor agreements expire by their terms at the end of 2005, and ourfailure to renegotiate new distributor agreements with any one or more of ourprincipal distributors could have a material adverse effect on our results ofoperations.  In addition, sellingproducts through distributors has associated risks, including, withoutlimitation, that sales can be negatively affected on a short-term basis as aresult of changes in inventory levels maintained by distributors; theseinventory changes may be unrelated to the purchasing trends by the ultimatecustomer.

 

**Consolidation among our major customers couldmaterially adversely affect our business.**

 

The telecommunications industry has experienced the consolidation ofmany industry participants and this trend is expected to continue. In November,2002, AT&T Broadband, the largest domestic multiple system operator and oneof our significant customers, merged with Comcast Corporation to form anew company named Comcast Corporation, creating a concentration for us in thenew merged entity. Mergers have recently been announced and/or closed betweenNextel Communications, Inc. and Sprint Corporation; SBC Communications, Inc.and AT&T Corp.; and MCI, Inc. and Verizon Communications Inc.  A sale of substantially all of the assets ofAdelphia Communications Corporation to Time Warner Inc. and Comcast Corporationhas been announced.

 

Consolidations in the telecommunications industry could result indelays in purchasing decisions by the merged businesses, and we could playeither a greater or lesser role in supplying products to the merged entity.These purchasing decisions of the merged companies could have a materialadverse effect on our business. Because CommScope sells certain productsdirectly or indirectly to a very small group of telecommunications serviceproviders, primarily the former Bell operating companies and their extendedsupply chain, consolidation of providers or the loss of access to their productportfolios could have a material adverse effect on our business and financialcondition. In addition, we cannot determine whether or to what extent futurepotential regional clustering of cable systems and subscribers will delayexpected cable spending or negatively impact our sales volumes or profits.

 

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**The financial condition of some of our majorcommunications cable customers has deteriorated, which has resulted in write-offsand increased our credit risk.**

 

Some of our major communications cable customers have experiencedfinancial difficulties as a result of weakness in the telecommunicationsindustry or for other reasons in the past few years.

 

One of our significant communications cable customers, Adelphia, filedfor Chapter 11 debtor-in-possession reorganization on June 25, 2002.During 2002, we wrote off $21.4 million of Adelphia receivables, which wesold in 2003. We have continued to do business with Adelphia during its Chapter11 reorganization, but we do not expect a significant recovery of business withAdelphia in the near term.

 

If the weakness in the telecommunications industry continues, or ifconditions deteriorate further, or for other reasons, our customers mayexperience financial difficulties, become subject to government investigationor file with the courts seeking protection under the applicable bankruptcy orreorganization laws. Upon the financial failure of a customer, we mayexperience losses as a result of our inability to collect, in a timely manneror at all, the accounts receivable outstanding to such customer, as well as theloss of such customer’s ongoing business. If our customers fail to meet theirpayment obligations to us, we could experience reduced cash flows and losses inexcess of amounts reserved.

 

**Although we believe that our existinggoodwill and other intangible assets are not currently impaired, we may incurimpairment charges related to these assets in the future.**

 

Statement of Financial Accounting Standards No. 142, “Goodwill andOther Intangible Assets” requires the use of a nonamortization approach toaccount for purchased goodwill and other intangible assets with indefinitelives and also requires that such assets be tested for impairment annually atthe same time each year and on an interim basis when events or circumstanceschange. We elected to perform our annual impairment test as of August 31.We completed our most recent annual impairment tests as of August 31, 2005and believe that goodwill and other intangible assets with indefinite liveswere not impaired as of this date.

 

Existing goodwill, which totaled approximately $151 million as ofSeptember 30, 2005, arose from previous acquisitions accounted for underthe purchase method of accounting. In connection with the acquisition ofConnectivity Solutions, we recognized an intangible asset of approximately$12 million for trademarks which was determined to have an indefinitelife. If the current weakness in the telecommunications industry is prolongedor further deteriorates, we cannot assure you that future tests will not resultin impairment of existing goodwill and other intangible assets with indefinitelives or that potential future impairment will not materially adversely affectour results of operations and financial position.

 

**We have recognized restructuring charges andimpairment charges for fixed assets and may need to do so again in the future.**

 

As a result of the global manufacturing initiatives and the OctoberInitiative at the CSMI Omaha, Nebraska facility, we have recognizedrestructuring charges that included pretax impairment charges of $17.0 millionand $6.8 million which were recognized in the nine months ended September30, 2005 and the fourth quarter of 2004, respectively.

 

Long-lived assets must be tested for impairment whenever events orchanges in circumstances indicate that their carrying amounts may not berecoverable. Due to the difficult business environment in telecommunicationsand the continuing decline in demand for certain of our products, we recognizedimpairment charges of $31.7 million during the second quarter of 2003primarily related to our broadband cable manufacturing assets. We previouslyrecognized impairment charges of $25.1 million during the third quarter of2002 primarily related to fixed assets used in the manufacture of our wireless,fiber optic cable and other telecommunications products. These impairmentcharges represented approximately 17% and 11% of our total net property, plant andequipment as of June 30, 2003 and September 30, 2002, respectively.

 

Utilization in our facilities is subject to change based on customerdemand. We currently have excess capacity in our worldwide manufacturingoperations and can give no assurances that we will not continue to have excessmanufacturing capacity over the long-term. If the current weakness in thetelecommunications industry is prolonged or further deteriorates or we furtherrealign our manufacturing operations, we cannot assure you that future testswill not result in additional impairment of long-lived assets and thatpotential future impairment of long-lived assets will not materially adverselyaffect our results of operations and financial position.

 

**Our failure to introduce new productssuccessfully, and changes in technology, could materially adversely affect us.**

 

Many of our markets are characterized by advances in informationprocessing and communications capabilities which require increased transmissionspeeds and greater capacity, or “bandwidth,” for carrying information. Theseadvances require ongoing improvements in the capabilities of wire and cableproducts. We believe that our future success will depend in part upon ourability to enhance existing products and to develop and manufacture newproducts that meet or anticipate these changes. The failure to introducesuccessful new or enhanced products on a timely and cost-competitive basis orthe inability to continue to market existing products on

 

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a cost-competitive basis couldmaterially adversely affect our results of operations and financial condition.

 

Fiber optic technology presents a potential substitute for some of thecommunications cable products we sell. A significant decrease in the cost offiber optic systems could make these systems superior on a price/performancebasis to copper systems. A significant decrease in the cost of fiber opticsystems would reasonably be expected to have a materially adverse effect on ourcoaxial cable sales.

 

**The communications cable industry is highlycompetitive globally and rapid technological change may lead to furthercompetition.**

 

Our coaxial, fiber optic and electronic cable products compete withthose of a substantial number of foreign and domestic companies, some of whichhave greater resources (financial or otherwise), or lower operating costs, thanwe have. The rapid technological changes occurring in the telecommunicationsindustry could lead to the entry of new competitors. Existing competitors’actions, such as price reductions, use of Internet auctions or introduction ofnew innovative products, and new entrants may have a material adverse impact onour sales and profitability. We cannot assure you that we will continue tocompete successfully with our existing competitors or that we will be able tocompete successfully with new competitors.

 

**Difficulties with our key suppliers couldmaterially adversely affect us.**

 

For certain of our raw material purchases, including fluorinated ethylenepropylene (“FEP”), copper rods, fine aluminum wire, steel and optical fiber, weare dependant on key suppliers.

 

FEP is the primary raw material used throughout the industry forproducing flame-retarding cables for LAN applications. There are few worldwideproducers of FEP and market supplies have been periodically limited over thepast several years. Availability of adequate supplies of FEP will be criticalto future LAN cable sales growth. If FEP is not available in adequatequantities on acceptable terms, our results of operations and financialcondition could be materially adversely affected.

 

We internally produce a significant portion of our requirements forfine aluminum wire, which is available externally from only a limited number ofsuppliers. Our failure to manufacture or adequately expand our internalproduction of fine aluminum wire, and/or our inability to obtain thesematerials from other sources in adequate quantities on acceptable terms, couldhave a material adverse effect on our results of operations and financialcondition.

 

Optical fiber is a primary material used for making fiber optic cables.There are few worldwide suppliers of these premium optical fibers. Availabilityof adequate supplies of premium optical fibers will be critical to future fiberoptic cable sales growth. We believe that our optical fiber supply arrangementswith two suppliers address concerns about the continuing availability of thesematerials to us, although there can be no assurance of this.

 

Our key suppliers could experience financial difficulties, or there maybe global shortages of the raw materials we use, and our inability to findsources of supply on reasonable terms could materially adversely affect ourability to manufacture products in a cost-effective way.

 

**Because of our vertical integration of supplyand production of some products, a disruption or failure at one of ourmanufacturing facilities could materially adversely affect our ability tomanufacture products at other manufacturing facilities in a cost-effective andtimely manner.**

 

We internally produce a significant portion of some of the componentsused in our finished products, including bimetallic center conductors, braidedcore and fine aluminum wire, at certain of our manufacturing facilities.Disruption of our ability to produce at or distribute from these facilities dueto failure of our technology, fire, electrical outage, natural disaster, actsof terrorism, shipping interruptions or some other catastrophic event couldmaterially adversely affect our ability to manufacture products at our othermanufacturing facilities in a cost-effective and timely manner.

 

**If our products or components purchased fromour suppliers experience performance issues, our business will suffer.**

 

Our business depends on our producing excellent products ofconsistently high quality. To this end, our products, including components andraw materials purchased from our suppliers and completed goods purchased forresale, are rigorously tested for quality both by us and our customers.Nevertheless, our products are highly complex and our customers’ testingprocedures are limited to evaluating our products under likely and foreseeablefailure scenarios. For various reasons (including, among others, the occurrenceof performance problems unforeseeable in testing), our products and componentsand raw materials purchased from our suppliers may fail to perform as expected.Performance issues could result from faulty design or problems inmanufacturing. We have experienced such performance issues in the past andremain exposed to such performance issues. In some cases, recall of some or allaffected products, product redesigns or additional capital equipment may berequired to correct a defect. In addition, we warrant certain

 

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products for periods rangingfrom one to twenty-five years from the date of sale, depending upon the productsubject to the warranty. In particular, we warrant the operation of ourSYSTIMAX products for a period of 20 years from installation. In somecases, we indemnify our customers against damages or losses that might arisefrom certain claims relating to our products. Although historical warranty and indemnity claims have not beensignificant, we cannot assure you that future claims will not have a materialadverse effect on our results of operations and financial position. Anysignificant or systemic product failure could also result in lost future salesof the affected product and other products, as well as customer relationsproblems.

 

**Our business is subject to the economicuncertainties and political risks of making and selling our products in foreigncountries.**

 

With the acquisition of Connectivity Solutions, we have significantlyincreased our international manufacturing operations and international sales.For the nine months ended September 30, 2005, international salesrepresented approximately 33% of our net sales. Our international sales,manufacturing and distribution operations are subject to the risks inherent inoperating abroad, including risks with respect to currency exchange rates,economic and political destabilization, restrictive actions by foreigngovernments, nationalizations, the laws and policies of the United Statesaffecting trade, foreign investment and loans, foreign tax laws, compliancewith local laws and regulations, armed conflict, war, terrorism and majorhealth concerns (such as infectious diseases).

 

**Compliance with domestic and foreignenvironmental laws and potential environmental liabilities may materiallyadversely impact our financial position.**

 

We are subject to various federal, state, local and foreignenvironmental laws and regulations governing, among other things, discharges toair and water, management of hazardous substances, handling and disposal ofsolid and hazardous waste, and investigation and remediation of hazardoussubstance contamination. Because of the nature of our business, we haveincurred and will continue to incur costs relating to compliance with theseenvironmental laws and regulations. Compliance with current laws andregulations has not had and is not expected to have a material adverse effecton our financial condition. However, new laws and regulations, including thoseregulating the types of substances allowable in certain of our products,stricter enforcement of existing laws and regulations, the discovery ofpreviously unknown contamination or the imposition of new remediation ordischarge requirements could require us to incur costs or become the basis fornew or increased liabilities that could have a material adverse effect on ourfinancial condition and results of operations. For example, the European Union has issued new directives relating tohazardous substances contained in electrical and electronic equipment and thedisposal of waste electrical and electronic equipment.  If we are unableto comply with these, and similar laws in other jurisdictions, it could have amaterial adverse effect on our financial condition and results of operations.

 

Pursuant to the Comprehensive Environmental Response, Compensation andLiability Act and similar state statutes, current or former owners or operatorsof a contaminated property, as well as companies that generated, disposed of,or arranged for the disposal of hazardous substances at a contaminated propertycan be held jointly and severally liable for the costs of investigation andremediation of the contaminated property, regardless of fault. Our present andpast facilities have been in operation for many years and over that time, inthe course of those operations, these facilities have used substances orgenerated and disposed of wastes which are or might be considered hazardous. Wehave been indemnified by prior owners and operators of certain of thesefacilities for costs of investigation and/or remediation, but there can be noassurance that we will not ultimately be liable for some or all of these costs.Therefore, it is possible that environmental liabilities may arise in thefuture which we cannot now predict.

 

**Although we believe cash from operations andavailability under our senior secured credit facility provide adequateresources to fund ongoing operating requirements, we may be limited in ourability to obtain additional capital on commercially reasonable terms.**

 

Although we believe cash from operations and availability under oursenior secured revolving credit facility provide adequate resources to fundongoing operating requirements, we may need to seek additional financing to competeeffectively. Our public debt ratings affect our ability to raise capital andthe cost of that capital. Future downgrades of our debt ratings may increaseour borrowing costs and affect our ability to access the equity capital marketson terms and in amounts that would be satisfactory to us.

 

**Our indebtedness could restrict ouroperations, make us more vulnerable to adverse economic conditions and make itmore difficult to invest in our business.**

 

Our current and future indebtedness could have important consequences.For example, it could:

 

•                  impairour ability to obtain additional financing in the future;

 

•                  reducefunds available to us for other purposes, including working capital, capitalexpenditures, research and development, strategic acquisitions and othergeneral corporate purposes;

 

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•                  restrictour ability to introduce new products or exploit business opportunities;

 

•                  increaseour vulnerability to economic downturns and competitive pressures in theindustry we operate in;

 

•                  increaseour vulnerability to interest rate increases to the extent variable-rate debtis not effectively hedged;

 

•                  limit,including as a result of the financial and other restrictive covenants in thatindebtedness, our ability to dispose of assets or borrow additional funds; and

 

•                  placeus at a competitive disadvantage.

 

We may incur additional indebtedness in the future under the revolvingcredit facility that is part of our senior secured credit facility, throughfuture debt issuances, assumption of liabilities in connection with futureacquisitions or otherwise.

 

**A significant uninsured loss or a loss inexcess of our insurance coverage could materially adversely affect ourfinancial condition.**

 

We maintain insurance covering normal business operations, includingfire, property and casualty protection that we believe is adequate. We do notgenerally carry insurance covering wars, acts of terrorism, earthquakes orother similar catastrophic events. Because insurance has generally become moreexpensive, we may not be able to obtain adequate insurance coverage onfinancially reasonable terms. A significant uninsured loss or a loss in excessof our insurance coverage could materially adversely affect our financialcondition.

 

**We have in the past reduced the size of ourworkforce and may need to do so again in the future.**

 

In response to the level of business and outlook for future business,in recent years we have reduced the size of our workforce. During 2002 and2003, we reduced our workforce by a total of approximately 350 employees andrecorded pretax charges related to these workforce reductions of approximately$2.5 million for employee termination benefits during 2002. During thefirst quarter of 2004, we reduced our Connectivity Solutions segment workforceby 45 employees and recorded net pretax charges related to these workforcereductions of approximately $1.3 million for employee terminationbenefits. As a result of the October Initiative at CSMI’s Omaha, Nebraskafacility, we incurred pretax charges of $5.9 million related to employeeseverance costs, which were included in the fourth quarter 2004 restructuringcharge. This charge was reduced by releasing $1.5 million of the reserve in thenine months ended September 30, 2005 as a result of fewer reductions inpersonnel under the initiative than we originally projected, primarily due tohigher than anticipated levels of business volume.  As a result of our global manufacturing initiatives,we incurred pretax charges of $1.0 million for employee termination benefitsduring the three months ended September 30, 2005 and anticipate additionalemployee-related costs of $9 to $11 million. If we reduce our expectations for future business or further realign ourmanufacturing operations, we may again reduce our workforce and incurrestructuring charges.

 

**We may experience difficulties in obtainingor protecting intellectual property.**

 

We may encounter difficulties, costs or risks in protecting ourintellectual property rights or obtaining rights to additional intellectualproperty to permit us to continue or expand our business. Other companies,including some of our largest competitors, hold intellectual property rights inour industry and the intellectual property rights of others could inhibit ourability to introduce new products in our field of operations unless we securelicenses on commercially reasonable terms, as such are needed.

 

In addition, we have been required and may be required in the future toinitiate litigation in order to enforce any patents issued or licensed to us orto determine the scope and/or validity of a third party’s patent or otherproprietary rights. We also have been and may in the future be subject tolawsuits by third parties seeking to enforce their own intellectual propertyrights. Any such litigation, regardless of outcome, could subject us tosignificant liabilities or require us to cease using proprietary third partytechnology and, consequently, could have a material adverse effect on our resultsof operations and financial condition.

 

**We may experience significant variability inour effective income tax rate.**

 

Our acquisition of Connectivity Solutions significantly expanded ourinternational activities in jurisdictions with differing tax rates. Variabilityin the profitability of domestic and international activities may significantlyimpact our effective income tax rate. A significant increase in our effectiveincome tax rate could have a material impact on our results of operations.

 

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