CTS Corporation Definition of Financial Term Adjusted Return on Invested Capital 2011 Operating earnings $ 25.2 2010 $ 27.8 2009 $ Full Year 2008 (17.8) $ 30.9 2007 $ 32.3 2006 $ 32.8 2005 $ 37.9 Charges (credits) to reported operating earnings: Restructuring and asset impairment charges Additional Legal Costs Gain on sale of excess equipment less LTCC severance Goodwill Impairment 3.1 0.3 Total adjustments to reported operating earnings 3.5 Adjusted operating earnings 1.7 2.2 6.1 (1.2) $ 28.7 1.7 $ 21% 22.6 29.5 35.4 $ 22% * 20% * $ 274.3 70.0 (73.3) 270.9 $ 247.5 50.4 (51.2) 246.7 $ 277.5 80.0 (44.6) 312.9 Prior Year: Shareholders' equity Long-term debt Notes payable and current portion of LT debt Less: Cash Invested capital $ 274.3 70.0 (73.3) 270.9 $ 247.5 50.4 (51.2) 246.7 $ 277.5 80.0 (44.6) 312.9 $ 326.4 68.3 1.0 (52.9) 342.8 Adjusted invested capital $ 266.1 $ 258.8 $ 279.8 $ 327.9 $ 588.5 22.6 Sales Adjusted invested capital Invested capital turns (b) $ 588.5 266.1 2.21 3.8% 8.5% * For 2011, 2010, 2009 & 2008, Tax rates are Adjusted Effective Tax Rates $ 552.6 23.0 4.2% $ 552.6 258.8 2.14 8.9% 14.1 5.0% $ 499.0 14.1 2.8% $ 499.0 279.8 1.78 5.0% 2.6 $ 12% * $ 263.3 74.4 (76.4) 261.3 8.9% $ 37.0 Invested Capital: Current Year: Shareholders' equity Long-term debt Notes payable and current portion of LT debt Less: Cash Invested capital Sales Tax effected adjusted operating earnings Tax effected adjusted operating margin as a percentage of sales (a) 23.0 $ $ 8.5% $ 17.6 6.1 Tax effected adjusted operating earnings Adjusted return on invested capital (a) x (b) 4.3 33.2 * Tax rate Adjusted return on invested capital 2.6 $ 32.6 9.9% $ 691.7 32.6 4.7% $ 691.7 327.9 2.11 9.9% 34.9 4.3 $ 20% $ 27.9 37.1 (1.2) $ 20% $ 29.7 36.7 37% $ 23.1 $ 326.4 $ 322.6 $ 333.0 68.3 54.6 59.9 1.0 5.6 13.5 (52.9) (38.6) (12.0) $ 342.8 $ 344.2 394.4 322.6 54.6 5.6 (38.6) 344.2 $ 345.5 8.1% $ 685.9 27.9 4.1% $ 685.9 345.5 1.99 8.1% 333.0 59.9 13.5 (12.0) 394.4 $ 372.3 8.0% $ 655.6 29.7 4.5% $ 655.6 372.3 1.76 8.0% 316.9 83.4 3.3 (61.0) 342.6 $ 372.6 6.2% $ 617.5 23.1 3.7% $ 617.5 372.6 1.66 6.2%