Matthew Sheerin, Thomas Weisel Partners Brian White, Kaufman Brothers. Carter Shoop, Deutsche Bank. Todd Coupland CIBC, Oppenheimer. Bernie Mahon, Morgan Stanley. Alex Blanton, Ingalls & Snyder. Lou Miscioscia, Lehman Brothers. James Szweda, Smith Barney Citigroup Tom Hopkins, Bear Stearns Steven Fox, Merrill Lynch Michael Walker, Credit Suisse First Boston

Good afternoon ladies and gentleman and thank you for joining on the Conference Call to discuss the results of Flextronics third quarter ended December 31st 2005. You have to communicate the data on this call, you can also view our presentation on the Internet, go to the Investors section of our website and select Earnings Presentation. You will need to click through the slides so we will give you the slide number we are referring to as we do our discussion. On the call with me today is our Chief Financial Officer, Thomas Smach. I will turn the first part of call over to Tom to go through the financial portion of our prepared remarks. I will then provide some commentary on the quarter along with our guidance for the next quarter and then open it up for questions. So go ahead Tom. Thomas Smach, Chief Financial Officer: Thanks Mike and good afternoon ladies and gentleman. Please note this conference call contains forward-looking statements within the meaning of Federal Securities Laws, including statements relating to the success of our long-term initiatives, new customer opportunities, the successful transition of the Nortel operations, the success of our investments in component design and ODM capabilities, along with our ability to increase our Camera modules market share, revenue and margin growth, profitability, future restructuring charges, and anticipated use of available cash. These statements are subject to attendant risks that can cause actual results to differ materially. Information about these risks is noted in the earnings release in Slide 14 of this presentation and in the business, risk factors and management discussion and analysis section of our latest Annual Report filed with the SEC as well as in our other SEC filings. These forward-looking statements are based on current expectations and we assume no obligations to update these forward-looking statements. Investors are cautioned not to place undue reliance on these forward looking statements. In addition throughout this conference call we will use non-GAAP financial measures. Please refer the schedules in the earnings press release in Slide 3, 7 and 13 of the slide presentation, which contain the reconciliation for the most directly comparable GAAP measures. Slide 3: Because of the sales of our network services and semiconductor divisions during September 2005, our year-over-year financial comparisons require some clarification. Revenue in operating profits from these divisions are reflected in the prior year quarter and are obviously not in this December 2005 quarter. After we provide the actual comparisons we will summarize the results on an apples-to-apples basis by adjusting for the impact of these divestitures. Please pay particular attention to this slide as it contains the results with and without the impact of these divestitures operations. Revenue in the December 2005 quarter was $4.2 billion, which is a decrease of $90 million or 2% from the year ago quarter. There are couple of things to keep in mind regarding this year-over-year revenue decline. First, the December 2005 quarterly revenues included $228 million from the divested operations. Excluding the prior year revenues from these divested operations revenues grew 3% on a year-over-year basis in the third quarter ended December 31st 2005. Another item to keep in mind regarding the year-over-year revenue decline is Siemens and Alcatel divested their cell phone businesses to Asian suppliers who brought the manufacturing in-house during 2005. As a result our December 2005 quarterly cell phone revenues from these two customers were approximately $300 million lower than in the December 2004 quarter. New program wins during the year such as Nortel and Kyocera provide incremental year-over-year revenue that more than offset the year-over-year decline from Siemens and Alcatel. Slide 4. During the quarter Asia increased on a sequential basis to 59% of total revenue, Americas decreased to 21% and Europe decreased to 20%. With regard to market segments communications infrastructure decreased from 22% in the September 2005 quarter to 20% in the December 2005 quarter. Primarily as the result of the divestiture of our network service division in September 2005, which is partially offset by continued growth in our Nortel business. As expected we saw a sequential decrease in revenue from our computers and office automation segments from 27% revenue in September 2005 quarter to 24% in December 2005 quarter primarily as a result of the normal seasonal trend in our printer business. Handsets increased from 26% in the September 2005 quarter to 30% in the December 2005 quarter as a result of the seasonal demand increase in this product segment combined with the ramp-up of new program win from Kyocera. Industrial, medical, automotive and other remained at 10% of total revenues in the December 2005 quarter while the consumer segment increased from 9% in the September 2005 quarter to 10% in the December 2005 quarter. Sony Ericsson and Hewlett Packard were the only customers in excess of 10% of quarterly revenues in December 2005. Our top ten customers accounted for approximately 64% of revenue in the quarter. Slide 5: Gross margin decreased 80 basis points to 6.2% from 7% in the year ago quarter. Adjusting for the divestitures gross margin was 6.4% in December 2004 quarter compared with 6.2% in December 2005 quarter. On a sequential basis operating margin was 3.2% in both the September and December 2005 quarters after adjusting for the divestitures. Actual operating margin decreased 50 basis points to 3.2% from 3.7% in the year ago quarter. The decline in the year-over-year operating margins after adjusting for divestitures can be attributable in part to the substantial investments we were making in the development of our component capabilities, which includes camera modules and power supplies as well as our ODM capabilities. We continue to invest in resources such as research and development, technology licensing, test and tooling equipment, facility expansions and personnel requirements in order to aggressively grow our components capability. These expanded vertical integration capabilities are part of the cornerstone of our strategy to improve our competitive position and to grow our profitability in shareholder returns. Additionally our margins were negatively impacted by startups and integration cost associated with our new programs such as Kyocera and Nortel as well as many other new programs that are ramping in calendar 2006. Lastly we continue to make significant investments to further enhance and strengthen our design capabilities. Mike will elaborate on our investments shortly. Slide 6: Excluding amortization, restructuring and other charges our December 2005 quarter net income amounted to $180 million, which represents an increase of 2% over the year ago quarter. Earnings per diluted share amounted to $0.20 in both the December 2005 and in 2004 quarters. The December 2005 quarter includes a $0.01 cumulative tax rate adjustment to bring the year-to-date effective tax rate to 2.3%, which is the effective tax rate we are currently estimating for fiscal 2006. Excluding the tax rate adjustment owing to previous quarters EPS would have been $0.19 in the December 2005 quarter. Slide7: During the December 2005 quarter after-tax amortization amounted to $12 million and our restructuring and other charges amounted to $65 million. After all these adjustments we reported GAAP net income in the December 2005 quarter of $42 million and towards a GAAP net income of $99 million in the year ago quarter. This resulted in $0.07 of earnings per diluted share in the current quarter compared to $0.17 in the prior year ago quarter. Slide 8: Return on invested tangible capital improved sequentially to 31.5% from 27% while return on investment capital which includes goodwill and intangibles has improved sequentially to 10.3% from 9.5%. Slide 9: We ended the quarter with $1.08 billion in cash. We’ve reduced our total debt by $79 million during the quarter, by $225 million during the fiscal year-to-date and by $435 million during the last 12 months. Net GAAP is only $427 million at the end of the December 2005. Including our undrawn $1.35 revolver, our total liquidity was $2.4 billion at the end of December. Our debt-to-capital leverage ratio has been reduced from 27% at the end of December 2004 to 22% at the end of December 2005, which is our lowest level in almost three years. Slide 10. Cash conversion cycle came in at an industry leading, an all-time low of 8 days versus 16 days last quarter. Slide 11. Depreciation and amortization amounted to $73 million and net capital expenditures were $45 million in the quarter. Cash flow from operations during the quarter generated $214 million, including an increase of $39 million in the sale of accounts receivable. Our fiscal year-to-date cash flow from operations has generated $647 million, including an increase of $54 million on the sales of accounts receivable. Free cash flow, which is cash flow from operations less capital expenditures generated $169 million during the quarter and $495 million during the first nine months of fiscal 2006. During the December 2005 quarter, we invested $150 million in acquisition related activity, which included an installment payments to Nortel in the amount of $76 million. Additionally, as part of our previously announced plan to delist our Indian-based subsidiary, Flextronics Software Systems, previously known as Hughes Software Systems, we acquired a portion of minority shares outstanding for $43 million in cash, taking our ownership percentage to 93.7% of the total company. We also repaid a total of $76 million of debt during the quarter. As previously outlined, we expect to continue to use our available cash for working capital as needed to fund positive net present value core growth opportunities or to redeploy it back into our capital structure to maximize earnings and long-term returnings for our shareholders, including further retirement of debt or repurchase of stock. We fully deployed the remaining divestiture proceeds, the divestitures are one penny per share dilutive although they have substantially improved our balance sheet by increasing our cash reserves, and reducing our debt, goodwill, and deferred tax assets, which are very positive for the company on a longer term basis. I know many of you have been speculating as to whether we announced the share repurchase program but the law has just changed yesterday and we will be addressing this matter at our board meeting next month. Thank you very much, ladies and gentlemen I will now turn the call over to Mike McNamara. Mike McNamara, Chief Operating Office: Thanks Tom. Slide 12: I would like to first review our operational and financial performance in this quarter. With regard to our transaction with Nortel we announced today that both companies have agreed to reschedule the transfer of Nortel’s remaining manufacturing operations from the March 2006 quarter to the June 2006 quarter. The schedule changes made to allow completion of several major information systems changes in Calgary that will simplify and improve the quality of the transition, as well as operations after the transition. Meanwhile, we are very pleased with our existing system houses supporting Nortel, in Montreal and Chateaudun, and these facilities are operating well. In addition the vertical integration transfers into the existing Flex factories is also progressing nicely. We continue to see a significant amount of outsourcing opportunities that are broadly distributed across most end market. We are focused on growth opportunities that meet our most important financial requirements, which is Return On Invested Capital. We remain optimistic that a number of these opportunities will result in additional revenue in profits in the second half of fiscal 2007, and beyond. As a result we are investing heavily for this anticipated growth. Our major long-term incentives continue to work well and we continue to see customer adoption of a vertically integrated EMS services, which incorporate design, components, manufacturing and logistics. The ability to provide all of these activities from our industrial sparks is a big competitive advantage. As a result, we are investing heavily in plastics, metals, assembling capacity in Asia as well as building industrial parks in India and the Ukraine, and the manufacturing logistics and repair operations in Juarez, Mexico, our printer circuit board operation continues to perform very well. We are expanding our rigid circuit capacity in China with the new factory that we expect to come online in the December 2006 quarter. Our new flexible circuit factory in China should begin volume production in the June 2006 quarter. We are also making significant investments in our design capabilities, for example during the quarter we opened the Beijing Design Center that has increased our cell phone design engineering by over 250 engineers. We have also acquired WWL, a small but talent rich Hong Kong and China based company engaged in the design, development and manufacture of variety of digital products. We are also making organic investments in various technologies in our ODM and component businesses including camera modules, power supplies and various other components. With regard to our camera module business, we finish the calendar year with an estimated 14% market share, which we believe puts us in the No.1 market position. We added several factories throughout the year and had quadrupled our headcounts. We have diversified our customer base substantially and look forward to another strong growth year. Until we get these new camera module factories to the proper efficiency and yield level, short-term profits are impacted, we expect to see the profit benefits soon. With regards to Power Supplies we are making further investments in this business, which is in organic startup investment mode today. We do not anticipate this operation to be profitable this coming year, well that continues to yield great customer interest resulting in new design wins with multinational OEMs. We strongly believe in our ability to create long-term value from these types of investments. Lastly, I would like to highlight that we have organized our company’s resources around several focus to market segments, which is designed to bring more value and innovation to our customers, improve our competitiveness and increase our market share with our customers. In order to enhance our revenue growth strategy senior executives are being added to lead each of our market segment. Obviously, we are making significant investments in our future. We think these investments will not only help us meet our revenue growth rate expectations, while yielding better profit and return for our shareholders but will also improve our competitiveness and enhance our capabilities. Despite these investments we anticipate that our capital expenditures will be below depreciation once again in fiscal 2007. We believe we are executing very well to control the aspects of our business, we are extremely pleased with our working capital management, strength of our balance sheet and cash flow generations. We ended the period with $1.1 billion in cash and only $427 million in net debt. We set an all-time best cash conversion cycle of only 8 days. Our capital expenditures continued to be lower than our depreciation and we continue to generate good free cash flow, which amounted to $495 million on a year-to-date basis. Slide13: The March quarter is always a very difficult quarter with regards to demand visibility because post holiday channel inventory needs to be cleared as next generation product transitions begin for the next year. The Nortel schedule delay will adversely impact our March and June quarters in terms of revenue and profitability. We anticipate this delay to adversely impact earnings per share, a little more than the one penny in both March and June quarter. For the March 2006 quarter we are currently expecting revenue in the range of $3.5 billion to $3.7 billion compared to a revenue of $3.4 billon in the year ago quarter, excluding the revenue from network services and semiconductor. The reduction from our previous revenue guidance for the March 2006 quarter is entirely attributable to the Nortel schedule revision. This revision, this revised revenue guidance reflect the year-over-year growth rate in the range of 3%to 9%. We are currently expecting earnings in the March 2006 quarter in the range of $0.15 to $0.16 per diluted share excluding amortization restructuring and other charges. The reduction from our previous EPS guidance for the March 2006 quarter is also entirely attributable to the Nortel schedule revision. Quarterly GAAP earnings per diluted share are expected to be lower than the guidance provided herein by approximately $0.02 per diluted share, reflecting quarterly amortization expense and by an additional $0.01 to $0.06 depending on our final charges associated with the completion of our previously announced restructuring plan. With regard to restructuring, we continue to believe that fiscal 2006 restructuring and other charges net of gain on divestitures will be in the pretax range of $100 million to $125 million, which we have already recognized approximately $92 million on a pretax basis throughout the first three quarters. We are executing according to our previously announced plan, and look forward to having this behind us. In that regard we expect these activities to be part of our global operating results next year. Slide 14. There are real risks of operating in this business, which includes the macro economical technology slowdown among other things, please pay particular attention to the slide in light of the current market condition. I will now turn the conference call over to operator for questions, please limit yourself to one question and one follow-up.

Q - Matthew Sheerin: Yes thanks. I am hoping you can talk a little bit about your ODM initiatives and sort of the impact that’s having either positive or negative? A - Mike McNamara: Yeah, well, we have several ODM initiatives and we continue to expand them overtime, you know probably the biggest one that gets the most attention is the ODM initiatives for our mobile phones, and one of the things that we did describe in our analyst meeting in late last year was that, we did not execute well last year, and what I mean by that is that there is usually a one-year delay in terms of the development of the product that we are going to use to build the market where I can go compete with delay of when those revenues. So, you know this year we expect to do about 4 million units, last year we did about 4 million units, which though we did not have growth within a nice growth market, we for sure lost money in those initiatives and one of the reason that our profits are down a little bit. You know however the investment this year have been and the changes this year have been actually quite substantial, we’ve reduced our R&D expenses by well over a third, we got a 250 people in the Beijing design center. Alright, we got about 250 people in a Beijing design center, we have improved all of our profits, seasonal industrial, relations and the product categories that we’ve created for revenues that’s coming this year that we are in now, or this coming year of this fiscal ‘07, we expect to ship probably, we already have booked probably 11 million or 12 million phones. So, we anticipate, in terms of what we have already booked for this year, assuming our customers hit their numbers to at least triple our numbers and we expect to be well positioned for the following year so we are extremely bullish about the changes that we made last year, the results that we have, the execution that’s been going to go on and, but right now it is absolutely contributing negatively from an earning standpoint. Q - Matthew Sheerin: And once you do get that ramp Mike, what are the operating margin goals now, I know in the past you’ve talked about 6% to 8% in our business, what is it now? A – Mike McNamara: Yeah, you know everyone is a little bit different because it really depends on the amount of vertical integration that you can get into those phones, sometimes you can get all the verticals in, sometimes we can only get some but I would say that the cell phone market is very, very competitive and anything on the low-end from 3% margin all way the up to about 6% is very realistic. Q - Matthew Sheerin: Okay, just to follow up on the Flex circuiting initiatives, is that largely aimed at the handset business as well? A – Mike McNamara: We anticipate it coming, yes, I would say in this first year we anticipate probably 80% of that demand coming through cell phones, not necessarily our own but either our own or just tell them these in the open market there’s still quite of opportunity for us to play there. Q - Matthew Sheerin: Gotcha. Thank you.

Thank you. And our next question comes from Brian White, Kaufman Brothers. Q - Brian White: Okay, good afternoon. Could you talk little bit about, you talked about the EPS impact for the Nortel delay, could you talk a little about the revenue impact for the coming quarter, also what is left in terms of payment and what square footage are you bringing on with Calgary? A – Mike McNamara: Yeah, so for the March quarter the impact in terms of revenue was roughly maybe $100 million A - Thomas Smach: It was a little bit more than $100 million A – Mike McNamara: And in June the negative, the decrease in revenue will probably closer to $200 or about a $150 million or so, so we expect to lose a $100 million in the March quarter, $150 million in the June quarter. The capacity coming on, I don’t know exactly the square footage but the way we actually are not buying any buildings. So, what we’ll bring on will just be a pay-per-use kind of arrangement. So we actually the size of the facility is probably just 3000 sq. feet or so. But we don’t have any long-term commitments to the project. Q - Brian White: Okay, and then the payment how much in payments in rough? A – Mike McNamara: It is about $200 million remaining altogether and that’s still spread out over the next four quarters or so. Q - Brian White: Okay thank you.

Thank you. And our next question comes from Carter Shoop, Deutsche Bank. Q – Carter Shoop: Thanks, just a quick clarification there, you say that you are looking for operating margins in the 3 to 6% range for the ODM handsets? A – Mike McNamara: Yeah, that will be fully implemented, yeah, and anywhere from 3 to 6%. Q – Carter Shoop: Yeah, that’s with all the components staked in there? A – Mike McNamara: Yeah, that’s about all the components staked in. I mean, again it depends on how many different components, we actually do get within there so. Q – Carter Shoop: Okay and then just a clarification on the Nortel deal, it sounds like it is going to be roughly $100 million, out of guidance for the March quarter but roughly a penny and a half due to the guidance there, I guess the mid point of our guidance, before it was roughly $0.17 now it is about $15.5. So is that just system? A – Mike McNamara: Yeah. I mean, we have got to look at it and view it as being almost all attributable to that, we don’t have the exact numbers, but roughly speaking it is we - Q – Carter Shoop: I mean I don’t want to get tuning in on here and back into these numbers, each hard numbers here but just based on the math 5% to 10% operating margins for that business I assume it is not coming on that high, but can you talk to what kind of operating margin for that business coming on, the company averages for that now or anywhere above that? A – Thomas Smach: Well, I think what you are excluding from that analysis is the fact that we have startup and integration cost over a longer period of time, they aren’t being absorbed against the rest. Q – Carter Shoop: Do you have those costs fixed into the guidance before that, is that correct? A – Thomas Smach: So we will know because we expect the incremental revenue, its absorbed from those cost so we are not only loosing profit associated with the revenue stream but the startup in the integration cost are now occurring over a longer period of time and are more than what we originally expected. A – Mike McNamara: Yeah, they are actually extended so we have to work on this thing for another three months with a quite a sizable project team, it just puts the whole thing into a labor side of our expenses. Q – Carter Shoop: Okay and when did you find out about the delayed breaker, new development or? A – Michael Marks: Yeah, and Nortel just also announced it today as well. Q – Carter Shoop: Okay. A – Michael Marks: And it has been in discussion but only concluded just in the last few days here. Q – Carter Shoop: Okay great, and then can you talk a little bit about the progress with components complete sourcing with the Kyocera win, have we made any progress there or how is the outlook there? A – Thomas Smach: Yeah again it is, that’s a tough question. There is really two, you know in terms of progress where we hope to contribute even all our resources to go, improve the margins, there is really two initiatives, one is the component sourcing, but the other thing is the ODM effort. So we currently have, you know between, I don’t know 5 and 8 phones in ODM development right now with Kyocera. And you know as a result of that there is a whole variety of schedules of when that component sourcing comes on. But we are truly offered the opportunity to make a quite a bit of improvement. Most of our product cycles that are coming onboard, starts coming in around June, July kind of timeframe, where we would expect some of these phones to come in, but they really do come in at a variety of different levels, trying to meet the September ramp. Q – Carter Shoop: Okay, and then just two more quick ones on the ODM handset model, of the revenue $12 million you have already booked, are the majority of those are Kyocera or is there several customers? A – Thomas Smach: No, there is multiple customers, I mean Kyocera’s actually not the largest. Q – Carter Shoop: Okay. And then just lastly obviously the ODM initiative hasn’t really worked out, it is a plan over the past several years and there is no other execution is used, my understanding is it’s been the time to market this year. What have you done to address that to streamline the process of design to getting the phones of volume manufacturing? A – Thomas Smach: Yeah I don’t think it just depends the market, I think it is the product categories that we are going after. I think its the diversity of the design organization they both have worked together, part of being able to be successful whether its time or cost, it is the ability to take it from design into volume manufacturing in an expeditious way and with the right yield. And I think some of those processes were challenged with the some of the acquisition that we have done. And you know what we have done is, we’ve consolidated those operations, we expanded the developments of our GSM products in Beijing, we expanded development of our CDMA products in Korea, we’ve very substantial processes around industrialization and a number of different time to market kind of products. We have added some real good design expertise in terms of making sure that the products that we do come out with are timely and at the right price point. So, we have challenged the organization pretty heavily about price points they need to achieve and you know I think we’ve been much more focused at how we go about going after the customer in terms of even the sales process we use and the information we share with customers and be open if we are with them. So I think it's a combination of a lot of things but there are a whole set of very specific activities and I’d say last year financially it was extremely rough but operationally it was exceptionally good because of a year delay, I mean in other words, all the activities of last year is what is going to lead to $11 million from this year. So it's really I mean hopefully we can do more than that, it's only January. So we still have 14 months to go there to try to book some of our additional products. Q – Carter Shoop: Okay, thank you. A – Thomas Smach: Basically it is a whole range of things but we actually had a good last year operationally and a bad year financially.

Thank you. And our next question comes from Todd Coupland of CIBC, Oppenheimer. Q - Todd Coupland: Hi, good evening everyone. If you could just clarify the targeted effective tax rate for ’07, please? A – Thomas Smach: Yeah, Todd, we are still working on that but I would use 7% to 10%, it is probably our best estimate today. Q - Todd Coupland: Okay great, and how should we think about excluding Nortel seasonal ramp into the June quarter, given the visibility you have, what type of balance should we look for, maybe just give us some color around that? Thank you. A – Mike McNamara: We actually don’t see that much seasonality. So I am not sure about the seasonal June ramp, I mean we see an incremental revenues in our results only because of the acquisition of recovery operation. But in terms of real seasonality, we have seen them to be generally pretty flat with the exception of December quarter where it beefs up. Q - Todd Coupland: Okay. So, we should expect to see even with all the mobile handset programs coming in, we should expect to see the bulk of that in the second half of the year, the second half of the calendar of ’06 year? A – Mike McNamara: Yeah, in terms of overall revenue increases, we will for sure see some of our programs hitting in September and a lot hitting in December. Q - Todd Coupland: Okay. A – Mike McNamara: But you asked specifically about Nortel? Correct? Q - Todd Coupland: No. I, sorry, moving away from Nortel, you talked about this 12 million or tripling of the unit volume in your mobile handset business A – Mike McNamara: Yeah. Q - Todd Coupland: Should given that you don’t expect the business ex Nortel to increase in June, should we expect to see the bulk of those handsets in September and December of ’06? A – Mike McNamara: Yeah. September and December. But don’t necessarily anticipate that these are all going to be incremental revenue. You know while it is incremental ODM business, and it validates our model, you know some of that business is going to be protection of existing model, so some of these are replacing existing models that maybe the customers would have done themselves if otherwise. So it allows an opportunity for us to design in all of our verticals and as the result of that maybe getting increased margin, but it doesn’t necessarily mean it is true incremental business. Q - Todd Coupland: Okay. A – Mike McNamara: Does it make sense to you? I think what we are doing with our ODM business, I mean part of it is design in our verticals to get more margins and to drive the topline but part of it also that we didn’t have it, it will be difficult to protect the business that we have. Q - Todd Coupland: So in order to give us some idea on the incremental potential, are you able to size that for us? A – Mike McNamara: Yeah. I mean, really the question that is, what’s the incremental cell phone business next year, and we have a good idea of what that is and we are pretty bullish about it, let us put it that way. But I don’t want to make any projections because it seems a little bit has come back in here lowering our projections after a while but it is kind of like not to put a number on it but we actually expect the cell phone business to grow very, very nicely in FY ’07 versus FY 2006. Q - Todd Coupland: Okay great, thanks a lot.

Thank you, and our next question come from Bernie Mahon, Morgan Stanley. Q – Bernie Mahon: Hi good evening. Just a quick question on the guidance for March, it seems like as you know the mid-point the range it sounds 15% sequentially now but if you look at December it was only up 8%, so it seems like the demand is a little bit weaker even excluding kind of a Nortel being pushed out. Could you just talk about maybe what segments are driving most of that weakness or if it is, and if it is Siemens and Alcatel, you are going from X number of dollars down to 0 and they were brought in-house, just kind of the status there? A – Thomas Smach: So, Bernie, little trouble on the following your math there, but our prior guidance for the March quarter was $3.6 to $3.8 billion and we lowered that range by $100 million to 3.5 to 3.7 so the entire reduction in our guidance range was all attributable to Nortel. Q – Bernie Mahon: Okay. Excluding that, I guess I am just asking, the guidance was down mid-point range 15%, and you were up say 11% sequentially, I guess could you just talk about what is driving the weakness in the March quarter? A – Thomas Smach: Yeah, I would say that is pretty traditional seasonal adjustments going into the March quarter, I would say 15% down sequentially and March is more or less normal. A – Mike McNamara: I’d kind of add to that, you know we’ve had some reductions as you know in Siemens and Alcatel which were kind of offset by Nortel and Kyocera on average. But I would say most of our wins that we’ve talked about really don’t hit till the second half of the year, I think that is pretty consistent with what we have been saying, and I think in general as a result of that, I mean its nothing inspiring in the March quarter but we are obviously positive about the end of the year when the thing start ticking in. Q – Bernie Mahon: Alright that’s great thanks.

Thank you, and our next question comes from Alex Blanton, Ingalls & Snyder. Q – Alex Blanton: Good evening. I want to ask first about the wins that you announced last spring and how they are shaping up now for entry into production as opposed to what you originally expected now. We have already talked about Nortel but we are talking about Kyocera, which has already started, is that inline? And then there was $1 billion or excessive $1 billion worth of printer business from 4 OEMs I believe, and there was another $1 billion or an excessive 1 billion 5 OEMs including three server and storage companies, one peripheral company, one semiconductor company. So the total of all that including Nortel of course is about $5 billion but it was scheduled to come in in calendar 2006 and 2007, so could you update us on how those things are tracking? A – Mike McNamara: That one is kind of a tough answer as well, but I would say on average, I think one of the things that we mentioned in a lot of these programs, we worked with the design, we worked with designing in a lot of vertical, so as a result we are very very early on the process, I would say on average while all these things are moving along, creating a lot of expenses for us, I would say, on average they are, you know a little bit slower than normal, that’s kind of, we were kind of move towards the speed of the product introductions as it relates to our customers, lets say on average we are probably a little bit slower, Alex, and maybe a little bit softer. We still anticipate all of them hitting full by the end of 2007, calendar year 2007. But predominantly a full rate, so we are still pretty positive that we are going to hit it. But we don’t know what customers marketplace and not that either these are products that are pretty far out there so I would say on average slow, it is a little bit slower and a little bit softer than what we were originally understanding the programs to be. But they are all moving along and we are working on them, and we are also looking on a number of other programs that we are pretty positive on. Q – Alex Blanton: Okay. When you say softly, you mean, less volume then you …? A – Mike McNamara: Probably just you know, instead of X amount, fiscal year, or say calendar year 2006, may be it is Y amount, you know maybe its whatever it is, they are all different, some are coming on right on schedule and some are being delayed, so we will probably work in 8 or 10 different programs so it is actually hard to, you know they are all just kind of on different schedules. Q – Alex Blanton: But you haven’t mentioned any new ones, these were, I guess it was 9 months ago, and I think you mentioned these and what about this past few three months, any more like this come in? A – Mike McNamara: Yeah we are going to try not to – you know what when we get these programs and they start 6 or 9 months out rather than talk about them, and have to come back and explain why they are delayed or slower or anything else, we’d rather just book them and start running them and then you will hopefully see the revenues popping on. So we are going to be a little bit quieter about you know what’s coming and when it’s coming, because it always seem to be a little bit slower and a little bit softer than what we anticipate. Q – Alex Blanton: Okay. A – Mike McNamara: So we are just going to book them and then we are going to show the results. Q – Alex Blanton: Okay, second part of my question is relates to the segment breakdown that gave us the percentage of sales, if you can translate that into dollars, and I know this isn’t exact because you haven’t given us the decimal point on those percentages, so there is some variation because of that I wish you give us the decimal point, so first decimal point, so this should be more accurate in the future, but at any rate it shows that industrial, medical and other, in the December quarter it was 419 versus 555 a year ago, so could you comment on that just about a 25% decline? And than computers office automation is down 4% sequentially from the third quarter, 1005 versus 1049 and why is that, they didn’t seen any seasonal upswing there, and where is the printers? You’ve mentioned printers were up seasonally, where is that? A – Thomas Smach: So the printers are in, computers are in office automation, Alex, and we said that it’s down slightly because of the seasonal trend for he printers, so. Q – Alex Blanton: It was strong in September then? A – Mike McNamara: Well that is when the back-to-school seasonal launch. Q – Alex Blanton: Okay, so its not really a year-end seasonal. A – Mike McNamara: Its really more of a back-to-school, while it is still strong in the December quarter, it’s a little bit stronger in September for back-to-school launches. Q – Alex Blanton: Okay, and what about the industrial medical and others? A – Thomas Smach: Yeah. you know what, I am going to have to confess, I think you are stumping on that one, I will have to come back to you on that Alex, I have been more focused just looking at seasonal trend in this chart. I suspect let me just look into it, I don’t know. I am not going to be particular about that. Q – Alex Blanton: I mean, sometimes when you have an other catch all, something moves out of there and goes into one of the other segment during the year, that can be happen too, so. A – Mike McNamara: Yeah I think maybe. I agree with you 100%. But, other categories are lot of stuff and as soon it matures into something meaningful it goes and picks into the appropriate category. So, you know what? Our – you know if I can make a comment on industrial, medical and automotive, I think there are all up year-on-year, and we are confident that they are all up year-on-year, and I think you probably seeing more the effect in the other category. Q – Alex Blanton: Okay, well you can get back to me, thanks. A – Mike McNamara: Thanks a lot.

Thank you, and our next question comes from Lou Miscioscia, Lehman Brothers. Q – Lou Miscioscia: Okay, thank you. I was hoping maybe you can comment on the June quarter in the sense that you mentioned that, Nortel, to some degree it is going to come out of the number, so would you expect that June now will be now our March stand will be flattish both top and bottom line, respectively or you could get to the some of the other programs that you had talked about ramping up, it will be higher sequentially? A – Mike McNamara: So for sure, our philosophy going forward is to provide quarterly guidance, just one quarter at a time. But just the frame our thinking we are not providing guidance, we do think both the topline and bottomline in June will be sequentially higher but we are not prepared to give any guidance for that quarter, but our expectations is both top and bottomline will be higher sequentially. Q – Lou Miscioscia: Okay, quick one on an update the laws that passed in Singapore, maybe if you could just help us out, what actually passed and what was your thoughts being, going into, just talking to the board, on the stock repurchase? A – Thomas Smach: Well, so the law changed, and that allows us to buy our stock back with as long as we have positive equity not just retain profit. So obviously we have a great deal of work in the company so, that just allows us to buy stock back. You know, if you want me to answer this, I would just say generally speaking we are extremely bullish about the organic growth opportunities that increase both profits and opportunities that we can generate in incremental return on invested capital of 20% or more on those revenue opportunities. We have deployed a significant amount of cash back into our capital structure already through debt reductions, as we think deleverage our balance sheet and increases net income for reductions of interest expense. During the script, I highlighted that our total debt was reduced by $435 million during the last 12 months. So, with regard to our cash, Lou, our primary objective is to fund positive net present value, core growth opportunity. To the extent that we have more cash than investment opportunities, we will seriously consider a stock buyback. And as I said we are going to discuss this with our board next month. But the message that I am trying to give you here is we are extremely excited about our pipeline of opportunities and as Mike highlighted we are expanding rapidly in making some sizeable investments in order to meet what we see as our high growth opportunities. Mike, do you have anything else to add? A – Mike McNamara: Yeah I think, we are trying to get the sense that people would like to see us buyback some of the stock to as a sign of confidence in such but in order to do that, we have to do a pretty sizable, we have to put a pretty sizable chunk back in in order to move the needle so to speak. And we are probably more inclined to do that a quarter ago and we are probably giving a little bit less inclined as Tom said, not less inclined, but we are going to go through all the options and talk a lot about, what are they? What are the possibilities and the options first, we also like that and find it attractive to buyback stock. But we are finding, you know our No.1 priority as Tom said is, I mean to the extent we could find good organic growth opportunities that drive our topline and drive for appropriate return on capital, I mean that is much preferred model. And we are still thinking we are a growth company here. And even though we’ve only grown about 5% in over the last three years you now, alternatively we see a lot of possibilities of how we can expand the markets for us and be able to participate and then they will become increasingly thoughtful about making sure we have enough cash to fund the working capital going forward. Q – Lou Miscioscia: Okay, that’s helpful. Thank you.

Thank you, and our next question comes from James Szweda, Smith Barney Citigroup. Q - James Szweda: Great, thank you. When we talk about Nortel and coming in on, out of the June quarter, any confidence you can give us about indeed will that have been transpired in the June quarter and are we going to see anymore head wins after that or is the $0.01 EPS dilution for that just through the June quarter then we go positive accretiveness, thereafter? A – Thomas Smach: I mean, impressed to commit to that it would be very difficult for us. We come in here quarter after quarter after quarter saying we’ve slipped something with Nortel, we slipped in the Nortel, so I would say when it happens, it happens and you guys will be the first to know. But if we do slip it again I mean it would cause some additional deterioration of both revenue and the profitability. Once again our expenses will go up as we continue to work on the transition. And we have lots of revenue and opportunity for profit growth as a result of transition across. So we don’t know I mean if it doesn’t transition across, it has a whole set of implications for goodwill and the cash payments made in such so. I mean we are very, very bullish about it. Moving forward I think Nortel is, but I just you did really have to see it. I mean, we will certainly be ready in the June quarter, but we still have to get the switch closed and that still needs to happen. Q - James Szweda: Okay, and then as a follow-up. Can you give any additional color on what you exactly mean by completion of several major information systems, is this just getting them on to your consistent system or is there more behind it than that? A – Thomas Smach: Yeah, it just a combination of it. There is combination of systems involved, there are all kinds of systems there is the manufacturing systems there, there are various systems there and it’s a pretty complex environment because of the nature of all the different product category running in there, because, they have wireless and enterprise and other things so there is actually a whole set of complications associated with this computer transition. So its just a variety in the book of ours, and we are working pretty hard together to go make that happen, I mean there is no some particular issues but it just we wanted to be bulletproof when it comes across and we will make it sure that it’s bulletproof and so that when I say we I mean not just Flex but also Nortel. Q - James Szweda: Okay, thank you.

Thank you and our next question comes from Tom Hopkins, Bear Stearns. Q – Tom Hopkins: Yes, good afternoon. Could you guys talk about how sticky you think your market share is, and that your top five customers have obviously been some new qualifications with Microsoft in terms of vendors, another group of vendors have been qualified its Sony Ericsson, your No.1 customer. So you could just talk how sticky do you see your market share and if you expect any material shifts in the first half of this year? A – Thomas Smach: Well there is no, I mean if you look through the top customers, Sony Ericsson, HP, Motorola, you know none of these have any requirements to use us, they only use us to the extent that really it is just the value and the service we provide, it is good or better than anybody else. So you know there is not, I won’t say there is lot of stickiness, the question of what’s the relationship with these customers, I think Sony Ericsson is very good, we anticipate they will be building this next year. They are very thoughtful and process oriented and we are very happy with the allocation we’ve received. You know as they grow larger and larger there are for sure are going to use more than us, I mean its just kind of factored things, you know Kyocera is one of our bigger customers, you know we view that a little bit stickier, because you know we have a multiyear deal with them so we feel really good about that and I think Kyocera has been doing pretty okay in the marketplace now, you know Hewlett Packard like I was saying we’ve been doing $1.5 billion of business with Hewlett Packard year after year after year. I think the relationship is good, I think it is very strong, I don’t really worry about that and I actually hope we can expand that relationship into the other product categories where we are under penetrated, so actually I view there has been more upside with HP than downside. You know Microsoft, Microsoft has basically taken their product as it has become mature. It is basically now become kind of a PC Box and it is highly, a new one, like a commodity. So you know the opportunities for both, but sure we will be there, just because we are pretty key supplier there we are the first supplier. You know as it becomes more commoditized, it becomes challenged from a profitability standpoint. So you know from that standpoint we’ll probably do the same amount next year and the profitability will be, you know not fabulous. With Motorola we have a huge relationship with them, and we are pretty positive on that relationship, we are actually very positive on that. We do everything from printed circuit boards, we do camera modules, we do infrastructure, we do mobile phones, we do prospects, I mean it is such a broad engagement probably encompassing 8 or 10 countries that you know we view that to be, you know there is no obligations to use us, but I think it is pretty strong. And Xerox also is very very strong relationship and I think that is very positive. Q – Tom Hopkins: Okay. Let me ask the question in other way. Looking at this $4 billion, I’ll just call it $4 billion, looking at this $4 billion quarterly run rate you have right now, do you see anything market share wise in the top five that would a year from now make it different? A – Thomas Smach: Biggest risk? Sony Ericsson, HP, I am just looking at our top guys. Who the other one? Nortel, no, I don’t. So the past six customers I see, very little risk based on what I know from a relationship standpoint. Q – Tom Hopkins: So if there is anything whether the change it will be just the basic demand in the business, there wouldn’t be market share related? A – Thomas Smach: That is correct. Q – Tom Hopkins: Okay. Great thank you. A – Thomas Smach: And the only risk I see is, I mean, we still have another factory with Nortel moving across which we haven’t done yet. So, I mean that is what I would see as, but just it has been done yet. You will seeing more upside in the other accounts. Q – Tom Hopkins: Okay. Thanks.

Thank you sir. Our question comes from Steven Fox, Merrill Lynch. Q – Steven Fox: Hi, good afternoon, couple of questions. First of all on the profitability, excluding Nortel, is there anything that you see that can offset the investments, and that you can wind up with higher margins say two to three quarters from now? And then secondly just do you have an off balance sheet receivable number account? A – Mike McNamara: Yes. A – Thomas Smach: Yeah. For our margins, yeah I do, I think, you don’t want the benefit of being the No.1 provider in camera module business, it gives us an opportunity to manage the slight base in an aggressive way. I think, it gives us a lot more cycles running and you know I think, we will solve our efficiency and relations there, I think, we know how to do it. We build a lot of them today, more than anybody in the world. So I think, we know, how to do it, know what we need to do in order to get that possible. So actually I think that to be a good contribution by the second half of the year in camera modules. And you know things like, you know power supply business, some of the other business, I actually do not see that, I think there is still an investment process and I have to remind, our cumulative investment in power supplies as far is going to be, you know, $15 million. And normally what we have done in the done past is gone out and spend, you know, couple of hundred million dollars for a power supply company with a bunch of goodwill. And this is something that we are trying not to do. And what that does is the result of, it creates some expenses, you know, actually set up these business but we are thinking in the long run it is a much better return model. So I think that won’t do much, but then again I don’t think its going to be that much of a drain on our business, I think the more, I do think in, you know December quarter, December March quarter, we could see the benefit of some of our ODM programs come along with the camera module business becoming more profitable, which is a large revenue business now and I could see some of the effects of these things. Q – Steven Fox: Just specifically on that, what is the restructuring do you think in terms of cost savings, the charges that you have been thinking, or is that already in the savings, is the savings already in the numbers? A - Mike McNamara: Yeah I mean there is no incremental benefit associated with that, so whatever we have assuming for profitability, now that’s already assuming the benefits of the restructuring. Q – Steven Fox: Okay. And then just off balance sheet number? A - Mike McNamara: Actually we sold almost the same level this quarter as last quarter, in terms of asset securitizations, $257 million, and $184 million of that was received in cash proceeds. Q – Steven Fox: Okay. Great thank you very much. A - Mike McNamara: Okay. So maybe we will take one more question.

Thank you. and our final question comes from Michael Walker, Credit Suisse First Boston. Q – Michael Walker: Thank you. Nortel, in prior quarters you have given us on the slides, you given us expected Nortel revenues for fiscal ’06 and ’07 and I am wondering if you have those numbers now? A - Mike McNamara: I actually don’t remember breaking out those records specifically for year, Mike, But I would say in terms of fiscal ’06, the gulf is about a little more than a $100 million as a result of the push out that we anticipated from revenues in the March quarter that didn’t happen and about $150 million will come out of fiscal ’07 because of the scheduled reductions well and so whatever numbers you were using for Nortel, just back out, about $150 million in fiscal ’06 and ’07. Q – Steven Fox: And I guess my second question, I am confused as to why the Nortel, they would be bigger in June than it is in March? A - Mike McNamara: Well, we expected full June quarter revenue load because we expected the factory to transfer over late in the March quarter. So there is a partial quarter impact in March and a bigger impact in June. Just the timing of what our expectations was versus what, when we think will transfer over now. Q – Steven Fox: Okay so assuming Nortel, still $2 billion a piece of business, and if you can confirm or deny that, do we expect to hit that full run rate, either in the $600 million range per quarter by some time fiscal ’07 or is that now more of a fiscal ’08 timeframe? A - Mike McNamara: We are definitely not an year up to hit $6 to $7 million a quarter, $600 to $700 million a quarter, is that what you said? Q – Steven Fox: Well, yeah, because you have been saying 2.5 way back, you kind of guided that down to greater than two so I was kind of estimating somewhere in the 6, 7 but it sounds like it might now be 2, which would assume 500, is that what I should be thinking? A - Mike McNamara: You know again, it really depends on what, you know we have all the obstacles, the wireline and the enterprise business, so whatever that runs with Nortel, is what it would be, some stain from the, there’s a few program, they have some freedom to do with few things with programs outside of that, but generally it is just a question of what they are going to do but you know I think, you know, conservatively I think you have to assume that its $2 billion program and we’d be running at that run rate by the month of June. Q – Steven Fox: Okay. And then just the last question, on the margins, it looks as though, the margin decline September to December was a little bit greater than, can you explain entirely by the divestitures, if that is the case, and if so can you just tell us what the influences were there? A - Mike McNamara: It is definitely not just divestitures, I mean we are, you know I think I mentioned we are struggling with particularly with our mobile ODM investments that are absolutely loosing money, or camera modules businesses for sure are losing money, our power supply business is losing money, all these are negatives, we’ve got a lot of expectations in the camera modules, we went from a thousand people at the beginning of the year to 4000, 5000 at the end of the year, we went from one factory at the beginning to three factories at the end, we had to build clean rooms, it is a massively yield in terms of process we probably had five design wins at the beginning of the year, and at the end of the year, we were probably in 50 different zone with multiple customers, so the complexity of the business when we drove forward the high growth gain in the 15% 14% market share, you know with real fast, lot of learning curve, a lot of new people, a lot of new facilities, a lot of investments and, you know, we just weren’t able to make money but we chased the revenue. We also mentioned the ODM fees from a financial standpoint, we just didn’t do well last year, operationally in terms of positioning ourselves for this year, we did a great job, so I think that’s, but as I said nonetheless from a margin standpoint it is negative, so you take all the ODM investments from the component investments and they are actually contributing negatively as a bundle. So it is actually taking the base CMS, and printer circuit board and margins down when you put it altogether. Q – Steven Fox: Is there a quarter where we can start looking for to when those components to modules, power supplies will start to breakeven and contribute to margins? A - Mike McNamara: Yeah, we went from 4 million pieces in ODM, there are 11 or maybe more, you know maybe it is not that high, maybe but it is 9 but once you hit double and triple those volume levels those investments absolutely pay for themselves. You know, camera modules, we absolutely, we actually intend to be profitable even starting this quarter, so even though our revenues are going to be down, we actually had greater efficiencies, and we have improvements this quarter as the result of the work we did at the end of last year. We actually expect that business to start turning, new freight even this quarter, I think power supply is going to another year. I mean it is a complicated business, we have to bring on a lot of IP and know how. We actually just hired a general manager for that business, we were really excited about and we also have some better leadership in that business so I think you better start, you don’t anticipate that being profitable this coming year. So that is still going to be an investment for us. So I would say, it is starting to turn, and you know what I think it will still be a little bit of a drain, you push couple of quarters, you know March and June and then I think we’ll start to see some of the benefits towards as we get into the later quarters. And after that we also expect to do some of the volumes coming online from an additional revenue. A - Michael Marks: Definitely it is important to understand this strategically we’ve made the decision to invest in certain of these business organically, even if they hurt our short-term profits. So we are doing it organically rather than investing in acquisitions and goodwill premiums and we think in the long run, and actually even in the short run it is much easier to achieve our ROIC requirements from these organic investments than through acquisitions, so that’s a strategic decision we made and we do think that is in the best interest of our shareholders and that’s what’s going to create more value than acquiring these capabilities externally. A - Mike McNamara: And that doesn’t mean we won’t do acquisitions. That we’ll continue to do acquisitions, accelerate our learning and certain product categories where we need the expertise and don’t want to bring it on our, or too complicated to bring on from an organic strategy but we are going to try a lot harder to be more precise with those acquisition and investments and try to keep the goodwill down and get our return on capital items. Q – Steven Fox: Thanks a lot. A - Mike McNamara: Okay. Thanks everybody for joining, we will close it up at this point and we will see you again next quarter.