**EXHIBIT99.1**

 

# **COMMSCOPE, INC.FORWARD-LOOKING INFORMATION**

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The Securities Exchange Act of 1934, the PrivateSecurities Litigation Reform Act of 1995 and other related laws provide a “safeharbor” for forward-looking statements. Our Form 10-K/A for the year ended December 31, 2003, our Annual Reportto Stockholders, 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.  Theseforward-looking statements are identified, including without limitation, bytheir use 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” and “scheduled” and similar expressions. Readers are cautioned notto place undue reliance on these forward-looking statements, which speak onlyas of the date the statement was made. We do not intend, and are not undertaking any duty or obligation, toupdate any forward-looking statements to reflect developments or information obtainedafter the date of this Exhibit 99.1.

 

Our actual results may differ significantly from theresults discussed in forward-looking statements.  Factors that might cause such a differenceinclude, but are not limited to (a) the general political, military, economicand competitive conditions in the United States and other markets where weoperate; (b) changes in capital availability or costs, such as changes ininterest rates, market perceptions of the industry in which we operate,security ratings or general stock market fluctuations; (c) employee workforcefactors; (d) authoritative generally accepted accounting principles or policychanges from such standard-setting bodies as the Financial Accounting StandardsBoard, the Public Company Accounting Oversight Board and the Securities andExchange Commission (“SEC”); (e) the impact of corporate governance, accountingand securities law reforms by the United States Congress, the SEC and the NewYork Stock Exchange; (f) ability to timely comply with Section 404 of theSarbanes-Oxley Act and related regulations, (g) risks related to inventory,including warranty costs, obsolescence charges, excess capacity and materialand labor costs; (h) significant joint ventures and acquisitions; and (i) thefactors set forth below.

 

### **We mayfail to realize the anticipated benefits of our acquisition of ConnectivitySolutions because of the challenges of integrating and operating theConnectivity Solutions business.**

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On January 31, 2004, we acquired substantially all ofthe assets and certain specified liabilities of the Connectivity Solutionsbusiness (“Connectivity Solutions”) of Avaya Inc. (“Avaya”).  Although we expect to realize strategic,operational and financial benefits as a result of theConnectivity Solutions acquisition, we cannot predict whether and to whatextent such benefits will be achieved. There are significant challenges to integrating the ConnectivitySolutions operations into our business, including:

 

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

 

•            maintaining andincreasing the customer base for Connectivity Solutions products;

 

•            successfullymarketing and selling two potentially competing LAN products; and

 

•            integrating managementinformation, inventory, accounting and sales systems of CommScope andConnectivity Solutions.

 

The ConnectivitySolutions acquisition is significant to us in size and range of productofferings and we have not previously had comparable experience integratingoperations as substantial and

 

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geographicallydiverse as those of Connectivity Solutions. As a result of this acquisition, we now have subsidiaries, orrepresentative branch offices, in numerous foreign countries, subjecting us todiverse foreign laws and regulations.

 

In connection with our acquisition of ConnectivitySolutions, our wholly owned subsidiary Connectivity Solutions Manufacturing,Inc. assumed a collective bargaining agreement, with applicable modifications,effective January 31, 2004 with the International Brotherhood of ElectricalWorkers.  This agreement expires on May31, 2006.  Disputes under this agreement,our inability to successfully negotiate future agreements, or attempts toorganize our non-union employees could result in disruption of our operationsand higher ongoing labor costs.    Priorto the Connectivity Solutions acquisition, none of our domestic employees weresubject to a collective bargaining agreement.

 

Also, in connection with the Connectivity Solutionsacquisition, we assumed underfunded pension plan and retiree medicalliabilities for U.S. represented employees of the Connectivity Solutionsbusiness upon the transfer of plan assets and obligations to us.  Declines in equity markets and interest ratescould decrease the value of pension plan assets and further increase theunfunded amount of our obligations under these plans.

 

Our failure to successfully integrate and operate ourConnectivity Solutions segment, and to realize the anticipated benefits of theacquisition, could adversely impact our operating performance and financialresults.

 

### **Thehistorical financial information of Connectivity Solutions is not necessarilyindicative of the future financial condition or performance of our ConnectivitySolutions segment subsequent to the acquisition.**

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The historical financial information of ConnectivitySolutions as a division of Avaya differs from the future financial conditionand performance of our Connectivity Solutions segment subsequent to theacquisition because, among other reasons:

 

•                  the Connectivity Solutions financial statements includeassets and liabilities that were not acquired or assumed by us;

 

•                  the Connectivity Solutions financial statements include anallocation of corporate overhead from Avaya which would not be applicable afterthe acquisition;

 

•                  the financial information does not reflect anticipatedtransaction costs or expected synergies resulting from the acquisition;

 

•                  the financial results of Connectivity Solutions may not beindicative of the actual results of the Connectivity Solutions business whenoperated as a part of our company; and

 

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

 

Accordingly,the historical financial information of the Connectivity Solutions business asa division of Avaya should not be relied upon as indicative of the futurefinancial condition or performance of our Connectivity Solutions segmentsubsequent to the acquisition.

 

**The proforma financial information of CommScope and Connectivity Solutions is notnecessarily indicative of the future financial condition or performance of thecombined businesses.**

 

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The pro forma financial information of CommScope withrespect to the acquisition of Connectivity Solutions that is included in ourSEC filings is intended to provide information regarding how CommScope mighthave looked if the acquisition had occurred as of the dates indicated in suchinformation.  The amounts for theConnectivity Solutions business of Avaya included in this pro forma informationfor periods in the year ended December 31, 2003 and the month of January 2004are based on the historical results of the Connectivity Solutions business as adivision of Avaya, however, and therefore may not be indicative of the actualresults of our Connectivity Solutions segment when operated as part ofCommScope going forward.  Moreover, thepro forma information does not reflect all of the changes that may result fromthe acquisition, including, but not limited to, challenges of transition,integration and restructuring associated with the transaction; challenges ofachieving anticipated synergies; ability to retain qualified employees andexisting business alliances; maintaining satisfactory relationships withrepresented employees; and customer demand for Connectivity Solutionsproducts.  The pro forma adjustments tothe balance sheet and income statements represent management’s best estimatesbased on information available at the time the pro forma information wasprepared and may differ from the adjustments that may actually berequired.  Accordingly, the pro formafinancial information should not be relied upon as being indicative of thehistorical results that would have been realized had the acquisition occurredas of the dates indicated or that may be achieved in the future.

 

### **Oursales and profitability have been adversely affected by a reduction in capitalspending in the cable television and telecommunications industries.**

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Historically, most of our revenues have come fromsales of communications cable products to the cable television industry.  Demand for our communication cable productsdepends primarily on capital spending by cable television operators formaintaining, constructing, rebuilding or upgrading their systems.  Capital spending in the cable television andtelecommunications industries is cyclical. The amount of this capital spending, and, therefore, our sales andprofitability, will be affected by a variety of factors, including, withoutlimitation:

 

•                  general economic conditions;

 

•                  availability and cost of capital;

 

•                  changes in ownership of cable television operators;

 

•                  cable system consolidation within the industry;

 

•                  the financial condition of domestic and international cabletelevision operators and their access to financing;

 

•                  competition from satellite and wireless television providersand telephone companies;

 

•                  technological developments;

 

•                  new legislation and regulation of cable televisionoperators; and

 

•                  government investigations into industry practices.

 

In recent years, cable television capital spending hasdecreased substantially and we expect ongoing volatility in the near term.  Our 2003 sales were negatively impacted by asignificant slowdown in spending by our international customers, substantiallylower sales of fiber optic cable and a major slowdown in spending by AdelphiaCommunications Corporation, primarily as a result of its Chapter 11 bankruptcyfiling.  We also experienced asignificant slowdown in spending by Charter Communications, Inc. during2003.  A shift away from rebuilding orupgrading activities has negatively impacted our profit margins.  Comcast Corporation has stated publicly thatit is nearing the end of its major capital spending

 

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forupdate and rebuild activities, and we expect lower sales of Broadband/Videoproducts in the second half of 2004.  Wecannot assure you that cable television capital spending will not continue todecrease in the future or when, if at all, it will increase.  Lack of demand could increase competition forexisting customers and negatively affect pricing.  In addition, if we are unable to adequatelymanage our costs in response to reduced demand for our products, there could bea material adverse effect on our profitability.

 

**Thesales and profitability of Connectivity Solutions has been adversely affectedby a reduction in capital spending in the corporate information technologysector as well in the telecommunications industry.**

 

The majority of the salesof Connectivity Solutions as operated by Avaya were derived from corporateinformation technology spending by global enterprises.  In 2001 and 2002, global enterprises reducedtheir information technology capital spending in light of, and to a greaterextent than, the overall decline in the economy.  In addition, a significant portion of thesales of Connectivity Solutions historically were derived from capital spendingby telecommunications service providers. These telecommunications customers have greatly reduced their spendingon communications equipment, as demand for products in the telecommunicationsequipment market remains at historically low levels due to the overall declinein the economy.  If capital spendinglevels in the corporate information technology sector and in thetelecommunications industry continue to decline and/or do not increase, oursales and profitability relating to our Connectivity Solutions segment will beadversely affected.

 

### **Ourcommunications cable customers are subject to significant government regulationthat could materially adversely affect our business.**

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In recent years, cable television capital spending hasbeen affected by new legislation and regulation, on the federal, state andlocal level.  Many aspects of governmentregulation are currently the subject of judicial proceedings and administrativeor 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 industry andalter federal, state and local laws and regulations regarding the provision ofcable, internet and telephony services. The Telecom Act eliminates substantially all restrictions on the entryof telephone companies and certain public utilities into the cable televisionbusiness.  Telephone companies may nowenter the cable television business as traditional cable operators, as commoncarrier conduits for programming supplied by others, as operators of wirelessdistribution systems, or as hybrid common carrier/cable operator providers ofprogramming on so-called “open video systems.” The economic impact of the Telecom Act, ongoing litigation in thisregard, other recent federal legislation and the rules implementing these lawson the cable television industry and our business is still uncertain.

 

### **The lossof one or more of our principal customers could materially adversely affect us.**

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Although the domestic cable television industry iscomprised of thousands of cable systems, a small number of cable televisionoperators own a majority of cable television systems and account for a majorityof the capital expenditures made by cable television operators.  Although we sell to a wide variety ofcustomers dispersed across many different geographic areas, sales to the fivelargest domestic broadband service providers represented approximately 48% ofour net sales during 2002 and 39% during 2003. Accordingly, the loss of one or more of our principal communicationscable customers could have a material adverse effect on our business andfinancial condition.

 

### **The lossof one or more principal distributors, value-added resellers and systemintegrators for SYSTIMAX® could materially adversely affect us.**

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We distribute SYSTIMAX® solutions through a worldwidenetwork of more than 2,000 distributors, value-added resellers and systemintegrators.  Prior to our acquisition ofConnectivity Solutions, for the fiscal year ended September 30, 2003,sales of SYSTIMAX® by the Connectivity Solutions business of

 

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Avaya to the topfive distributors, value-added resellers and system integrators representedapproximately 77% of the net sales of SYSTIMAX® in that period.  In particular, Anixter Corporation andaffiliates accounted for approximately 53% and Graybar Electric Companyaccounted for approximately 14% of the net sales of SYSTIMAX® for the fiscalyear ended September 30, 2003. Sales to Anixter Corporation and affiliates accounted for approximately31.4% of our net sales during the six months ended June 30, 2004.  The loss of one or more of our principaldistributors of SYSTIMAX® solutions could have a material adverse effect on ourbusiness and financial condition.

 

### **Consolidationamong our major customers could materially adversely affect our business.**

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The telecommunications industry has experienced theconsolidation of many industry participants and this trend is expected tocontinue.  Consolidations could result indelays in purchasing decisions by the merged businesses, and we could playeither a greater or lesser role in supplying products to the mergedentity.  These purchasing decisions ofthe merged companies could have a material adverse effect on our business.  In November 2002, AT&T Broadband, thelargest domestic multiple system operator and one of our significant customers,merged with Comcast Corporation to form a new company named ComcastCorporation, creating a concentration of credit risk in the new mergedentity.    Wecannot determine whether or to what extent future potential regional clusteringof cable systems and subscriber trades, will delayexpected cable spending or negatively impact our sales volumes or profits.

 

In addition, CommScope Carrier Solutions sellsdirectly or indirectly to a very small group of telecommunications serviceproviders, primarily the former Bell operating companies and their extendedsupply chain.  Additional consolidationof providers or the loss of access to their product portfolios could have amaterial adverse effect on our business and financial condition.

 

### **Thefinancial condition of some of our major communications cable customers has deteriorated, which has resulted in write-offs and increasedour credit risk.**

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Some of our major communications cable customers haveexperienced financial difficulties as a result of weakness in thetelecommunications industry or for other reasons.

 

One of our significant communications cable customers,Adelphia, filed for Chapter 11 debtor-in-possession reorganization on June 25,2002.  During 2002, we wrote off $21.4million of Adelphia receivables, which we sold in 2003.  We have reached an agreement with Adelphia onthe terms under which we will continue to do business with Adelphia during itsChapter 11 reorganization but we do not expect a significant recovery ofbusiness with Adelphia in the near term.

 

If the current weakness in the telecommunicationsindustry continues, or if conditions deteriorate further, or for other reasons,our customers may experience financial difficulties, become subject togovernment investigation or file with the courts seeking protection under theapplicable bankruptcy or reorganization laws. Upon the financial failure of a customer, we may experience losses as aresult of our inability to collect, in a timely manner or at all, the accountsreceivable outstanding to such customer, as well as the loss of such customer’songoing business.  If our customers failto meet their payment obligations to us, we could experience reduced cash flowsand losses in excess of amounts reserved.

 

### **Althoughwe believe that our existing goodwill and other intangible assets are notcurrently impaired, we may incur impairment charges related to these assets inthe future.**

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Effective January 1, 2002, we adopted Statement ofFinancial Accounting Standards (“SFAS”) No. 142, “Goodwill and Other IntangibleAssets.”  SFAS No. 142 requires the useof a nonamortization approach to account for purchased goodwill and certainintangible assets with indefinite lives and also requires at least an annual assessmentfor impairment by applying a fair-value-based test.

 

SFAS No. 142 requires that goodwill be tested forimpairment annually at the same time each year and on an interim basis whenevents or circumstances change.  Weelected to perform our annual

 

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goodwillimpairment test as of August 31.  Wecompleted our most recent annual goodwill impairment test as of August 31, 2003and believe that goodwill was not impaired as of this date.

 

Existing goodwill, which totaled $151 million as ofDecember 31, 2003, arose from previous acquisitions accounted for underthe purchase method of accounting.  Ifthe current weakness in the telecommunications industry is prolonged or furtherdeteriorates, we cannot assure you that future tests will not result inimpairment of existing goodwill and that potential future goodwill impairmentwill not materially adversely affect our results of operations.

 

### **We haverecognized impairment charges for fixed assets and may need to do so again inthe future.**

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Effective January 1, 2002, we adopted SFAS No. 144,“Accounting for Impairment or Disposal of Long-Lived Assets,” which supersedesSFAS No. 121, “Accounting for the Impairment or Disposal of Long-Lived Assetsand for Long-Lived Assets to be Disposed Of,” but retains many of itsfundamental provisions.  Long-livedassets must be tested for impairment in accordance with SFAS No. 144 wheneverevents or changes in circumstances indicate that their carrying amounts may notbe recoverable.  Due to the difficultbusiness environment in telecommunications and the continuing decline in demandfor our products, we recognized impairment charges of $31.7 million during thethree months ended June 30, 2003 primarily related to our broadband cablemanufacturing assets.  We previouslyrecognized impairment charges of $25.1 million during the three months endedSeptember 30, 2002 primarily related to fixed assets used in the manufacture ofour wireless, fiber optic cable and other telecommunications products.  These impairment charges representedapproximately 17% and 11% of our total net property, plant and equipment as ofJune 30, 2003 and September 30, 2002, respectively.

 

Utilization in our facilities is subject to changebased on customer demand.  We can give noassurances that we will not have excess manufacturing capacity over thelong-term.  If the current weakness inthe telecommunications industry is prolonged or further deteriorates, we cannotassure you that future tests will not result in additional impairment oflong-lived assets and that potential future impairment of long-lived assetswill not materially adversely affect our results of operations.

 

### **Ourfailure to introduce new products successfully, and changes in technology,could materially adversely affect us.**

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Many of our markets are characterized by advances ininformation processing and communications capabilities which require increasedtransmission speeds and greater capacity, or “bandwidth,” for carryinginformation.  These advances requireongoing improvements in the capabilities of wire and cable products.  We believe that our future success willdepend in part upon our ability to enhance existing products and to develop andmanufacture new products that meet or anticipate these changes.  The failure to introduce successful new orenhanced products on a timely and cost-competitive basis or the inability tocontinue to market existing products on a cost-competitive basis couldmaterially adversely affect our business and financial condition.

 

Fiber optic technology presents a potential substitutefor the products that comprise most of our sales of communications cableproducts.  A significant decrease in thecost of fiber optic systems could make these systems superior on a price/performancebasis to copper systems.  A significantdecrease in the cost of fiber optic systems would reasonably be expected tohave a materially adverse effect on our coaxial cable sales.

 

### **Thecommunications cable industry is highly competitive globally and rapidtechnological change may lead to further competition.**

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Our coaxial, fiber optic and electronic cable productscompete with those of a substantial number of foreign and domestic companies,some of which have greater resources (financial or otherwise), or loweroperating costs, than we have.  The rapidtechnological changes occurring in the telecommunications

 

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industrycould lead to the entry of new competitors. Existing competitors’ actions, such as price reductions, use of internetauctions or introduction of new innovative products, and new entrants may havea materially adverse impact on our 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.

 

### **Ourdependence on commodities subjects us to price fluctuations which couldmaterially adversely affect our profitability.**

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Our profitability may be materially affected bychanges in the market price and availability of our raw materials, most ofwhich are linked to the commodity markets. The principal raw materials we purchase are plastics and polymers,fabricated aluminum, and, to a lesser extent, copper, bimetals and opticalfiber.  Plastics and polymers are used toinsulate and protect cables and fabricated aluminum, copper and steel are usedin the production of coaxial and twister pair cables.  Prices for copper, fluoropolymers and certainpolymers derived from oil and natural gas have increased substantially over thelast twelve months.  As a result, we havesignificantly increased our prices for certain enterprise products and may haveto increase prices again in the future. Our inability to achieve market acceptance of future price increasescould have a material impact on the results of our operations.

 

### **Difficultieswith our key suppliers could materially adversely affect us.**

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For certain of our raw material purchases, includingfluorinated ethylene propylene, bimetallic center conductors, copper rods, finewire aluminum and optical fiber, we are dependant on key suppliers.

 

Fluorinated ethylene propylene (FEP) is the primaryraw material used throughout the industry for producing flame retarding cablesfor local area network applications. There are few worldwide producers of FEP and market supplies have beenperiodically limited over the past several years.  Availability of adequate supplies of FEP willbe critical to future local area network cable sales growth.  If FEP is not available in adequatequantities on acceptable terms, our business and financial condition could bematerially adversely affected.

 

A portion of our raw material purchases are bimetalliccenter conductors for coaxial cables. During 2003, we produced substantially all of our requirementsinternally and purchased the remaining amount from Copperweld Corporation.  We will continue to use our internalproduction capabilities to meet the majority of our bimetallic center conductorrequirements for 2004.  However, the lossof our ability to produce bimetallic center conductors would likely require thepurchase of bimetallic center conductors from Copperweld or other sources,which are limited.  Copperweld’sinability to supply, and/or our failure to manufacture or adequately expand ourinternal production of these products, could have a materially adverse effecton our business and financial condition.

 

We internally produce a significant portion of ourrequirements for fine aluminum wire, which is available externally from only alimited number of suppliers.  Althoughthis is a smaller raw material purchase than bimetallic center conductors, ourfailure to manufacture or adequately expand our internal production of finealuminum wire, and/or our inability to obtain these materials from othersources in adequate quantities on acceptable terms, could have a materiallyadverse effect on our business and financial condition.

 

Optical fiber is a primary material used for makingfiber optic cables.  There are fewworldwide suppliers of these premium optical fibers.  Availability of adequate supplies of premiumoptical fibers will be critical to future fiber optic cable sales growth.  We believe that our optical fiber supplyarrangement (which does not contain minimum volume requirements) with awholly-owned subsidiary of Furukawa address concerns about the continuingavailability of these materials to us, although there can be no assurance ofthis.

 

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Our key suppliers could experience financialdifficulties, or there may be global shortages of the raw materials we use, andour inability to find sources of supply on reasonable terms could materiallyadversely affect our ability to manufacture products in a cost effective way.

 

### **Becauseof our vertical integration of supply and production of some products, adisruption or failure at one of our manufacturing facilities could materiallyadversely affect our ability to manufacture products at other manufacturingfacilities in a cost-effective and timely manner**

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We internally produce a significant portion of some ofthe components used in our finished products, including bimetallic centerconductors and fine aluminum wire, at certain of our manufacturing facilities.Disruption at these facilities due to failure of our technology, fire,electrical outage, natural disaster, acts of terrorism or some othercatastrophic event could materially adversely affect our ability to manufactureproducts at our other manufacturing facilities in a cost-effective and timelymanner.

 

### **If ourproducts or components purchased from our suppliers experience performanceissues, our business will suffer.**

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Our business depends on our producing excellentproducts of consistently high quality. To this end, our products, including components and raw materialspurchased from our suppliers, are rigorously tested for quality both by us andour customers.  Nevertheless, ourproducts are highly complex and our customers’ testing procedures are limitedto evaluating our products under likely and foreseeable failure scenarios.  For various reasons (including, among others,the occurrence of performance problems unforeseeable in testing), our productsand components and raw materials purchased from our suppliers may fail toperform as expected.  Performance issuescould result from faulty design or problems in manufacturing.  We have experienced such performance issuesin the past and remain exposed to such performance issues. In some cases,recall of some or all affected products, product redesigns or additionalcapital equipment may be required to correct a defect.  In addition, we warrant or indemnify certainproducts over varying periods of time. In particular, we warrant the operation of our SYSTIMAX Solutionsproducts for a period of 20 years from installation.  Although historical warranty and indemnityclaims have not been significant, we cannot assure you that future claims willnot have a materially adverse affect on our results of operations.  Any significant or systemic product failurecould also result in lost future sales of the affected product and otherproducts, as well as result in customer relations problems.

 

### **Ourbusiness is subject to the economic uncertainties and political risks of makingand selling our products in foreign countries.**

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With the acquisition of Connectivity Solutions, wehave significantly increased our international manufacturing operations andinternational sales.  For the six monthsended June 30, 2004, international sales represented approximately 31% of ournet sales, (including sales from our Connectivity Solutions segment).  Our international sales and operations aresubject to the risks inherent in operating abroad, including risks with respectto currency exchange rates, economic and political destabilization, restrictiveactions by foreign governments, nationalizations, the laws and policies of theUnited States affecting trade, foreign investment and loans, foreign tax laws,compliance with local laws and regulations, armed conflict, war, terrorism andmajor health concerns (such as SARS).

 

### **Potentialenvironmental liabilities may arise in the future and materially adverselyimpact our financial position.**

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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 thenature of our business, we have incurred and will continue to incur, costsrelating to compliance with these environmental laws and regulations.  Compliance with current laws and regulationshas not had and is not expected to have a material adverse effect on our

 

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financialcondition.  However, new laws andregulations, including those regulating the types of substances allowable incertain of our consumer products, stricter enforcement of existing laws andregulations, the discovery of previously unknown contamination or theimposition of new remediation or discharge requirements could require us toincur costs or become the basis for new or increased liabilities that couldhave a material adverse effect on our business, financial condition and resultsof operations.

 

Pursuant to the Comprehensive Environmental Response,Compensation and Liability Act and similar state statutes, current or formerowners or operators of a contaminated property, as well as companies thatgenerated, disposed of, or arranged for the disposal of hazardous substances ata contaminated property, can be held jointly and severally liable for the costsof investigation and remediation of the contaminated property, regardless offault.  Our present and past facilitieshave been in operation for many years, and over that time in the course ofthose operations, these facilities have used substances which are or might beconsidered hazardous, and we have generated and disposed of wastes which are ormight be considered hazardous. Therefore, it is possible that environmental liabilities may arise inthe future which we cannot now predict.

 

### **Althoughwe believe cash from operations and availability under our senior securedcredit facility provide adequate resources to fund ongoing operatingrequirements, we may be limited in our ability to obtain additional capital oncommercially reasonable terms.**

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Although we believe cash from operations andavailability under our senior secured revolving credit facility provideadequate resources to fund ongoing operating requirements, we may need to seekadditional financing to compete effectively. Our public debt ratings affect our ability to raise capital and the costof that capital.  Future downgrades ofour debt ratings may increase our borrowing costs and affect our ability toaccess the equity capital markets on terms and in amounts that would besatisfactory to us.

 

### **Ourindebtedness could restrict our operations, make us more vulnerable to adverseeconomic conditions and make it more difficult to invest in our business.**

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Our current and future indebtedness could haveimportant consequences to you.  Forexample, it could:

 

•                  impair ourability to obtain additional financing in the future;

 

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

 

•                  restrict ourability to introduce new products or exploit business opportunities;

 

•                  increase ourvulnerability to economic downturns and competitive pressures in the industrywe operate in;

 

•                  increase our vulnerability to interest rate increases to theextent variable-rate debt is not effectively hedged;

 

•                  limit, including as a result of the financial and otherrestrictive covenants in that indebtedness, our ability to dispose of assets orborrow additional funds; and

 

•                  place us at acompetitive disadvantage.

 

We may incur additional indebtedness in the future,either under the revolving credit facility that is part of our senior securedcredit facility, through future debt issuances, in connection with futureacquisitions or otherwise.

 

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### **Asignificant uninsured loss or a loss in excess of our insurance coverage couldmaterially adversely affect our financial condition.**

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We maintain insurance covering normal businessoperations, including fire, property and casualty protection that we believe isadequate.  We do not generally carryinsurance covering wars, acts of terrorism, earthquakes or other similarcatastrophic events.  Because insurancehas generally become more expensive, we may not be able to obtain adequateinsurance coverage on financially reasonable terms.  A significant uninsured loss or a loss inexcess of our insurance coverage could materially adversely affect ourfinancial condition.

 

### **We havein the past reduced the size of our workforce and may need to do so again inthe future.**

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In response to the level of business and outlook forfuture business, in recent years we have reduced the size of ourworkforce.  During 2002 and 2003, wereduced our workforce by a total of approximately 350 employees and recordedtotal pretax charges related to these workforce reductions of approximately$2.5 million for employee termination benefits during 2002.  During the three months ended March 31, 2004,we reduced our Connectivity Solutions segment workforce by 45 employees andrecorded total pretax charges related to these workforce reductions ofapproximately $1.6 million for employee termination benefits.  If we reduce our expectations for futurebusiness we may again reduce our workforce and incur restructuring costs or impairmentcharges if we adopt a restructuring plan in response to changing businessconditions.

 

### **We mayexperience difficulties in obtaining or protecting intellectual property.**

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We may encounter difficulties, costs or risks inprotecting our intellectual property rights or obtaining rights to additionalintellectual property to permit us to continue or expand our business.  Other companies, including some of ourlargest competitors, hold intellectual property rights in our industry and theintellectual property rights of others could inhibit our ability to introducenew products in our field of operations unless we secure licenses oncommercially reasonable terms, as such are needed.

 

**Changes inaccounting standards or practices, including those relating to our outstandingconvertible debentures, could affect our financial results.**

 

The Financial Accounting Standards Board (“FASB”), andother regulatory or standard setting bodies, periodically revise accountingstandards and practices.  Any suchrevisions could adversely, and potentially materially adversely, affect ourfinancial results.  In particular, theFASB has recently announced a proposal to the effect that shares contingentlyissuable under convertible debt instruments should be included in calculationsof diluted earnings per share, regardless of whether the conversion contingencyapplicable to the debt instrument has been met, and that prior period earningsper share amounts should be restated for comparative purposes.  We presently have $250 million aggregateprincipal amount of 1% convertible senior subordinated debentures outstandingand do not include the impact of the conversion of these debentures incalculating our diluted earnings per share, as the conversion contingencyapplicable to the debentures has not been met. In the event that the current FASB proposal, or a similar proposal, isadopted, our diluted earnings per share would be required to reflect theconversion of the debentures.  The effectof such change is uncertain, but may be material.

 

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