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<SEC-DOCUMENT>0000950137-06-004658.txt : 20061107
<SEC-HEADER>0000950137-06-004658.hdr.sgml : 20061107
<ACCEPTANCE-DATETIME>20060418172407
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0000950137-06-004658
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20060418

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			CTS CORP
		CENTRAL INDEX KEY:			0000026058
		STANDARD INDUSTRIAL CLASSIFICATION:	ELECTRONIC COMPONENTS & ACCESSORIES [3670]
		IRS NUMBER:				350225010
		STATE OF INCORPORATION:			IN
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		905 WEST BOULEVARD NORTH
		CITY:			ELKHART
		STATE:			IN
		ZIP:			46514
		BUSINESS PHONE:		5742937511

	MAIL ADDRESS:	
		STREET 1:		905 W BLVD NORTH
		CITY:			ELKHART
		STATE:			IN
		ZIP:			46514
</SEC-HEADER>
<DOCUMENT>
<TYPE>CORRESP
<SEQUENCE>1
<FILENAME>filename1.htm
<TEXT>
<HTML>
<HEAD>
<TITLE>corresp</TITLE>
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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 12pt">April&nbsp;18, 2006
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Gary Todd<BR>
Division of Corporation Finance<BR>
United States Securities and Exchange Commission<BR>
100 F Street, NE<BR>
Washington, D.C. 20549-6010

</DIV>

<DIV align="left" style="margin-top: 12pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD></TD>
</TR>
<TR valign="top">
    <TD nowrap align="left"><B>Re:</B></TD>
    <TD>&nbsp;</TD>
    <TD><B>CTS Corporation<BR>
Form&nbsp;10-K for the year ended December&nbsp;31, 2005<BR>
Filed February&nbsp;27, 2006<BR>
File No.&nbsp;001-04639</B></TD>
</TR>
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Dear Mr.&nbsp;Todd:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This letter is in response to your letter of April&nbsp;4, 2006, in which you requested responses to
comments relative to CTS Corporation&#146;s (the &#147;Company&#148; or &#147;CTS&#148;) Form 10-K for the year ended
December&nbsp;31, 2005.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In connection with the responses to your comments, the Company acknowledges that:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Company is responsible for the adequacy and accuracy of the disclosure in the
filing;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>staff comments or changes to disclosure in response to staff comments do not foreclose
the Commission from taking any action with respect to the filing; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Company may not assert staff comments as a defense in any proceeding initiated by
the Commission or any person under the federal securities laws of the United States.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Listed below are each of your comments, in bold, followed by CTS&#146; response.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U><B>Form&nbsp;10-K for the year ended December&nbsp;31, 2005</B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U><B>Exhibit&nbsp;13</B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U><B>Management&#146;s Discussion and Analysis of Financial Condition and Results of Operation</B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U><B>Overview, page 1</B></U>
</DIV>


<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>1.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>We see that you present a non-GAAP measure of adjusted earnings per share in MD&#038;A. We
see that this measure excludes the impact of tax repatriation and reversal of tax reserves
and gains on sales of assets. Since we see that gains on sales of assets occurred in both
2005 and 2004, it is not clear that your disclosures fully comply with S-K </B><B>Item 10(e)</B><B> and
Question 8 to the FAQ Regarding the Use of Non-GAAP Financial Measures dated June&nbsp;13, 2003.
As set forth in the FAQ, while there is no </B><B><I>per se </I></B><B>prohibition against removing a recurring
item, you must meet the burden of demonstrating the usefulness of any measure that excludes
recurring items, especially if the non-GAAP financial measure is used to evaluate
performance. Accordingly, in future filings please either remove the non-GAAP measure from
your MD&#038;A or tell us why it is appropriate to present a performance measure excluding the
effects of the gains on sale and provide all of the disclosures required by </B><B>Item 10(e)</B><B> or
Regulation&nbsp;S-K, and Question 8 of the FAQ. Show us how you plan to implement this comment.</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The sale of excess real estate in 2004 and the sale of the LTCC assets in 2005 were discrete
events. Because the gains on sales of those assets were significant, including those gains
would distort the evaluation of operational results. For example, including the impact of
gains on real estate sales could make operational performance look better than it really is
and/or mask operational performance issues. As a result, measurement and comparisons could
be misleading which could affect strategic decision making.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>CTS believes the adjusted earnings per share measure is useful to investors in that it
provides a truer measure of CTS&#146; operational performance and provides a greater level of
comparability of CTS&#146; performance over time.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If we use the adjusted earnings per share performance measure in future filings, we will
provide disclosure similar to that set forth in the following example, as appropriate:</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Earnings per share of $0.57 in 2005 increased $0.04 from earnings per share of $0.53 in
2004. Adjusted earnings per share of $0.65 in 2005 increased $0.17 from adjusted earnings
per share of $0.48 in 2004. Adjusted earnings per share is a non-GAAP financial measure.
The most comparable GAAP measure is earnings per share. We calculated adjusted earnings per
share for 2005 by excluding the tax expense related to cash repatriation and the reversal of
tax reserves and the tax affected gain on sale of excess equipment less LTCC severance. We
calculated adjusted earnings per share for 2004 by excluding the tax affected gain on sale
of excess land in Canada. We exclude the impact of these items because they were discrete
events which had a significant impact on comparable GAAP financial measures and could
distort an evaluation of our normal operational performance. CTS&#146; management uses measures,
such as adjusted earnings per share, to evaluate overall performance, establish plans and
perform strategic analysis. Using adjusted earnings per share avoids distortion in the
evaluation of operational results by eliminating the impact of events which are not related
to normal operating performance. Because adjusted earnings per share is based on the
exclusion of specific items, it may not be comparable to measures used by other companies
which have similar</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt">2
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #textcolor#; background: #bgcolor#">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>titles. CTS&#146; management compensates for this limitation when performing peer comparisons by
evaluating both GAAP and non-GAAP financial measures reported by peer companies. CTS
believes the adjusted earnings per share measure is useful to its management, investors and
other stakeholders in that it:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>provides a truer measure of CTS&#146; operational performance,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>reflects the results used by management in making decisions about the business, and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>helps review CTS&#146; performance over time.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>We recommend that investors consider both earnings per share and adjusted earnings per share
measures in evaluating the performance of CTS with peer companies.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The following table provides a reconciliation of Earnings Per Share to Adjusted Earnings Per
Share</TD>
</TR>

</TABLE>
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000"><B>Year Ending December 31,</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2005</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2004</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Earnings per share &#151; diluted</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.57</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.53</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Tax affected charges (credits)&nbsp;to reported</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Earnings per share:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Gain on sale of excess Canadian land</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(0.05</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Gain on sale of excess equipment less
LTCC severance</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(0.02</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Impact of tax repatriation &#038; reversal of
tax reserves</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total tax affected adjustments to reported</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Earnings per share</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.08</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(0.05</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Adjusted earnings per share</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.65</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.48</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>2.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>As a related matter, under S-K Item&nbsp;</B><B>10(e)(1)(ii)</B><B>(B) you should not adjust a non-GAAP
performance measure to eliminate or smooth items identified as non-recurring, infrequent or
unusual when it is reasonably likely that you may incur a similar gain or loss within two
years or where you actually incurred a similar gain or loss within the prior two years.
With respect to the gains on real estate and equipment, please describe your consideration
of that guidance. We see, for instance, that you plan to close a facility in Indiana in
2006. Accordingly, it is not clear why it is not reasonably likely that similar gains or
losses might not be realized in 2006.</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>From time to time, CTS&#146; management must respond to business conditions by making decisions
which result in asset sales. There is not, however, an active market for many of these
assets, particularly real estate due to the specialized nature of the assets. The fact that
sales may ultimately occur in consecutive years is largely coincidental. Each sales event
is discrete and, as discussed above, we exclude the impact of such sales in order to avoid
distortion in the evaluation of operational results.</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt">3
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>3.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Item&nbsp;</B><B>10(e)(1)(i)</B><B> of Regulation&nbsp;S-K requires that whenever one or more non-GAAP
financial measures are included in a filing with the Commission the registrant must include
a presentation, with equal or greater prominence, of the most directly comparable financial
measure or measures calculated and presented in accordance with Generally Accepted
Accounting Principles. The bulleted highlight disclosing non-GAAP earnings per share
does not appear to meet that requirement. Presuming you can support inclusion of the
non-GAAP measure, please appropriately revise future filings to better comply with this
guidance.</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If CTS uses non-GAAP financial measures in future filings, it will ensure that the most
comparable GAAP financial measures appear with equal or greater prominence.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>Critical Accounting Polices, page 3</B></U>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>4.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Please expand future filings to disclose the bases for the significant assumptions used
in measuring stock-based compensation. For instance, we see that expected volatility used
for Black-Scholes purposes decreased from 65% in 2004 to 52% in 2005 and that the expected
life of your options also significantly decreased. Please make disclosure about methods
and assumptions and about reasons for changes in those methods and assumptions from period
to period. Please refer to SAB Topic 14.D.1 and 14.D.2, SEC Release No.&nbsp;FR-60 and Section
V, &#147;Critical Accounting Estimates,&#148; in SEC Release No.&nbsp;FR -72.</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>CTS adopted the provisions of Financial Accounting Standard No.&nbsp;123(R),&#147;Share-based
Payment,&#148; effective January&nbsp;1, 2006. Future filings will disclose information relating to
significant assumptions used in measuring equity-based compensation, including, as
appropriate, the reasons for changes in methods and assumptions.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>Results of Operations, page 5</B></U>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>5.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>We see that your pension plans generate income as opposed to expense and that the
amounts involved have historically been material to pre-tax earnings. It is unusual for
pension plans to generate income. In future filings, where material, please clearly
identify amounts of income derived from pension accounting. Please also address reasons
for that income and reasons for changes in the level of that income from period to period.
As a related matter, tell us why the actual return on plan assets in 2005 varied so
significantly from the expected return and make appropriate disclosure in future filings.</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In future filings, within MD&#038;A, CTS will clearly identify amounts, where material, of income
derived from pension accounting, the reasons for that income and the reasons for changes in
the level of that income from period to period, as appropriate.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In 2005, CTS&#146; expected return on plan assets was $25.7&nbsp;million, or 8.45%, and the actual
return on plan assets was $8.7&nbsp;million, or 3.14%. The ten-year average annual returns for
2003, 2004 and 2005 were 9.72%, 10.14% and 8.52%, respectively. The
2005 three-year average annual (2003 &#151; 2005) return was 9.10%, further supporting CTS&#146; 8.50% expected
return on plan assets.</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt">4
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt">

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>CTS utilizes a building block approach in determining the long-term rate of return for plan
assets, after considering the recommendation of its actuaries. The rate of return on plan
assets is carefully reviewed during the fourth quarter of each year, in light of current
economic conditions and considering the actual returns over a ten-year horizon.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The overall S&#038;P 500 equity return was 4.9% in 2005 and 10.9% in 2004. Similarly, the Lehman
Brothers Aggregate Bond Index was 2.4% in 2005 and 4.2% in 2004. CTS&#146; return on plan assets
during 2005 and 2004 approximated these broader market returns as approximately two-thirds
of CTS&#146; plan assets are invested in equity securities, with the remaining one-third invested
in debt securities. In summary, the actual return on plan assets in 2005 varied
significantly from the expected return because the equity and debt market performed worse
than expected; however, as mentioned above, the returns over the last three years are
consistent with our overall expectation. We will discuss reasons for variations in actual
and expected returns in future filings, as appropriate.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>Free Cash Flow, page 10</B></U>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>6.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>We note the discussion of a non-GAAP measure titled &#147;free cash flow.&#148; Please expand
future filings to more fully comply with the disclosure guidance from Questions 8 and 13 of
the FAQ Regarding the Use of Non-GAAP Measures dated June&nbsp;13, 2003. Please expand to
explain in greater detail:</B></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>the substantive reasons why management believes the non-GAAP measure provides useful
information to investors;</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>the </B><B><I>specific </I></B><B>manner in which management uses the non-GAAP measure to conduct or
evaluate its business;</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>the economic substance behind management&#146;s decision to use the measure; and</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>the material limitations associated with the use of the non-GAAP measure as compared
to the use of the most directly comparable GAAP measure, including the manner in which
management compensates for these limitations when using the non-GAAP measure.</B></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>CTS defines free cash flow as net cash flow provided by operations less capital
expenditures.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>CTS&#146; management believes that the non-GAAP measure free cash flow is useful to investors
because it reflects the performance of its overall operations more accurately than the
most comparable GAAP measure, net cash provided by operations. Free cash flow is one of
the measures we use in evaluating our performance and in strategic planning. Specifically,
CTS uses free cash flow for investing and financing decisions.</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt">5
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Free cash flow is a useful measure because it indicates the ability of a business
operation to fund its own required capital investments. It is also useful because it
provides investors with the same results that management uses as the basis for making
decisions about the business. Free cash flow is not an indicator of residual cash
available for discretionary spending, because it does not take into account mandatory
debt service or other non-discretionary spending requirements which are not deducted in
the calculation of free cash flow.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If we use the free cash flow measure in future filings, we will include the foregoing
disclosure along with the required reconciliation to net cash provided by operations.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>Consolidated Financial Statements</B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U><B>Consolidated Balance Sheets, page 17</B></U>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>7.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>We note from page 13 that the 6.5% Debentures contain a put option which allows the
debt holders to accelerate maturity of the debentures anytime after April&nbsp;2005. Please
tell us why the outstanding balance of those debentures should not be presented as a
current liability.</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>CTS has classified its 6.5% Debentures as a non-current liability in accordance with
Financial Accounting Standard No.&nbsp;6, &#147;Classification of Short-Term Obligations Expected to
Be Refinanced, an amendment of ARB No.&nbsp;43, Chapter&nbsp;3A&#148;
(FAS No.&nbsp;6). If a debenture holder
exercises its put option, CTS&#146; intention is to refinance the $5.5&nbsp;million outstanding
balance of 6.5% debentures utilizing its long-term revolving credit facility, which had an
unused capacity in excess of $70&nbsp;million at December&nbsp;31,
2005. CTS has considered FAS No.&nbsp;6,
paragraph 11b, and notes that this long-term revolving credit facility expires in July&nbsp;2007,
CTS was in compliance with the credit facility covenants as of December&nbsp;31, 2005, and the
lender is financially capable.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>Note G. Debt, page 27</B></U>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>8.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>We note that you have convertible 2.1% senior subordinated debentures, due in 2025 and
convertible 6.5% subordinated debentures, due in 2007. It also appears that you may incur
liquidated damages or penalties pursuant to registration rights agreements under certain
circumstances. Please refer to the guidance provided in the Division of Corporation
Finance&#146;s Current Accounting and Disclosures Issues Outline at
<U>http://www.sec.gov</U> and
address the following:</B></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Please ensure that future filings fully and clearly disclose all material terms
of the convertible notes, including but not limited to, the conditions under which
you or the holder may convert into common shares, the conversion rate and all
conditions that may result in adjustments to that rate, any conditions under which you or the holder may accelerate payment of the notes, the
interest rate and the conditions that result in adjustments to that rate. Likewise,
please clearly describe the material terms of the registration rights agreements,
including the conditions under which you would incur liquidated damages and
disclosure about how those damages may be satisfied under the agreements.</B></TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt">6
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>CTS will enhance future filings to clarify disclosure of the material terms of the
convertible notes. CTS fulfilled its obligation to file and cause to become
effective a registration statement for the stock underlying the 6.5% senior
subordinated debentures under the terms of the registration rights agreement entered
into in that transaction in 2002. CTS&#146; obligation to maintain the effectiveness of
that registration statement expired in April&nbsp;2004 under the terms of the
registration rights agreement.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The registration rights agreement entered into in the 2.125% convertible notes
transaction requires CTS to use its reasonable best efforts to cause to become
effective a registration statement for the notes and underlying stock and maintain
the effectiveness of the registration statement during a period of two years
following the original issue date. CTS fulfilled its obligation to file and cause
to become effective a registration statement for the notes and underlying stock in
2004. In the event CTS fails to maintain the effectiveness of the registration
statement, CTS would be required to pay additional interest to the note holders,
together with its regular interest payments, in the amount of .25% per annum of
the principal for the first 90&nbsp;days of default and .5% per annum of the principal
for any period of default thereafter. In the event a noteholder exercises the
conversion option during a period of default, CTS must deliver 103% of the shares
which would otherwise be deliverable to the holder, and the holder has no right to
any additional interest. CTS&#146; obligation to maintain the
effectiveness of that registration statement will expire in May&nbsp;2006 under the terms
of the registration rights agreement. In future filings, CTS will describe the
material terms of this registration rights agreement, including the conditions under
which CTS could incur liquidated damages via additional interest and how these
damages may be satisfied.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Tell us how you have considered the guidance provided in EITF 05-04 The Effect
of a Liquidated Damages Clause on a Freestanding Financial Instrument Subject to
Issue No.&nbsp;00-19 in concluding how to account for these instruments. While we note
that the EITF has not reached a consensus on this issue and has deferred
deliberation until the FASB addresses certain questions which could impact a
conclusion on this issue, please tell us how you considered the guidance in EITF
05-4 and the different views on this issue as outlined in Issue Summary No.&nbsp;1 to
EITF 05-04 in analyzing the registration rights agreement and in considering
whether you are required to bifurcate the conversion option from the debt host.</B></TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt">7
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>As noted above, CTS no longer has an obligation under the registration rights
agreement related to the 6.5% convertible debentures. In determining whether the
2.125% convertible notes and registration rights agreement should be combined and
how they should be classified, CTS has considered the guidance in EITF 05-4 and the
information outlined in Issue Summary No.&nbsp;1 to EITF 05-4. CTS&#146; view is that the
additional interest is clearly and closely related to the debt-host contract and is
thus not a bifurcatable derivative. As referenced to paragraph 12a of FAS No.&nbsp;133,
the additional interest is an integral part of the economic characteristics and
risks of the host contract, which is that of an interest-bearing obligation. A
crucial characteristic and risk of the debt host is its liquidity, which is affected
by the existence of a registration statement. The additional interest reflects the
risk to the debt host&#146;s liquidity arising from the absence of a registration
statement and compensates the investor accordingly. Accordingly, it is not a
payment that is made from an extraneous variable that is not clearly and closely
related to the economic risks and characteristics of the debt host.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The additional interest is not associated with the conversion
feature of the
convertible debt, since CTS does not pay it upon conversion. Accordingly, the
additional interest is not subject to an EITF 00-19 analysis because it is not
viewed as an equity item but rather as a feature that is clearly and closely related
to the debt host. As a further note, the additional interest is not material or
consequential to CTS.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Tell us how you have applied the guidance in EITF Issue 00-19 in evaluating
whether any of the features of the convertible notes, including for example, the
conversion feature, are embedded derivatives that you should separate from the debt
host, record as liabilities and account for at fair value under SFAS 133. Please
provide us with your analysis of any such features under paragraphs 12-32 of EITF
00-19.</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>As noted above, CTS no longer has an obligation under the registration rights
agreement related to 6.5% convertible debentures. With respect to the 2.125%
convertible notes, CTS has considered the guidance in EITF Issue No.&nbsp;00-19,
&#147;Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled
in, a Company&#146;s Own Stock.&#148; Below is a summary of conclusions for each condition
outlined in paragraphs 12-32 of EITF 00-19 as it relates to the conversion feature
on the convertible notes:</TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 9%">CTS&#146; convertible notes do not require cash settlement of either the
principal or the conversion spread. CTS retains the right to net share
settle the conversion spread. (Paragraphs 12-13 of EITF 00-19)
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 9%">CTS can settle in unregistered shares even where there has been a default
under the registration rights agreement. (Paragraphs 14-18 of EITF 00-19)
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 9%">CTS has in excess of 21&nbsp;million unissued and authorized shares available at
December&nbsp;31, 2005 which exceeds the maximum number of shares issuable upon conversion and any other share-delivery obligations it might
have in total and has had a sufficient number of shares available
since inception. (Paragraph&nbsp;19 of EITF 00-19)
</DIV>

<P align="center" style="font-size: 10pt">8
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 9%">CTS&#146; convertible debt contains a maximum number of shares issuable upon
conversion. (Paragraphs 20-24 of EITF 00-19)
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 9%">The conversion feature on CTS&#146; convertible debt contains no provisions which
require cash payments in the event the company fails to make timely filings
with the SEC. (Paragraph&nbsp;25 of EITF 00-19)
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 9%">The conversion feature on CTS&#146; convertible debt does not contain any
&#147;top-off&#148; or &#147;make-whole&#148; provisions. (Paragraph&nbsp;26 of EITF 00-19)
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 9%">The conversion feature on CTS&#146; convertible debt does not have any special
rights to demand cash in a merger or other corporate event except in those
specific circumstances in which holders of shares underlying the contract
also would receive cash. (Paragraph&nbsp;27-28 of EITF 00-19)
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 9%">CTS&#146; convertible debt holders do not have creditor rights when the
conversion spread is settled. (Paragraphs 29-31 of EITF 00-19)
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 9%">CTS&#146; convertible debt does not require collateral posting at any point or
for any reason. (Paragraph&nbsp;32 of EITF 00-19)
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Please contact me at (574)&nbsp;293-7511 if you have any further questions concerning this filing. Thank
you.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Sincerely,
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U>/s/ Vinod M. Khilnani </U><BR>
Vinod M. Khilnani<BR>
Senior Vice President and<BR>
Chief Financial Officer

</DIV>


<P align="center" style="font-size: 10pt">9
</DIV>


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