<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>2
<FILENAME>a2047897zex-99_1.txt
<DESCRIPTION>EXHIBIT 99.1
<TEXT>

<PAGE>


[CELESTICA LOGO]                                                 EXHIBIT 99.1

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS


         THE FOLLOWING DISCUSSION OF THE FINANCIAL CONDITION AND RESULTS OF
OPERATIONS OF THE COMPANY SHOULD BE READ IN CONJUNCTION WITH THE CONSOLIDATED
FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2000.

         CERTAIN STATEMENTS CONTAINED IN THE FOLLOWING MANAGEMENT'S DISCUSSION
AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, INCLUDING,
WITHOUT LIMITATION, STATEMENTS CONTAINING THE WORDS BELIEVES, ANTICIPATES,
ESTIMATES, EXPECTS, AND WORDS OF SIMILAR IMPORT, CONSTITUTE FORWARD-LOOKING
STATEMENTS. FORWARD-LOOKING STATEMENTS ARE NOT GUARANTEES OF FUTURE PERFORMANCE
AND INVOLVE RISKS AND UNCERTAINTIES WHICH COULD CAUSE ACTUAL RESULTS TO DIFFER
MATERIALLY FROM THOSE ANTICIPATED IN THESE FORWARD-LOOKING STATEMENTS. AMONG THE
KEY FACTORS THAT COULD CAUSE SUCH DIFFERENCES ARE: THE LEVEL OF OVERALL GROWTH
IN THE ELECTRONICS MANUFACTURING SERVICES (EMS) INDUSTRY; LOWER-THAN-EXPECTED
CUSTOMER DEMAND; COMPONENT CONSTRAINTS; VARIABILITY OF OPERATING RESULTS AMONG
PERIODS; DEPENDENCE ON THE COMPUTER AND COMMUNICATIONS INDUSTRIES; DEPENDENCE ON
A LIMITED NUMBER OF CUSTOMERS; AND THE ABILITY TO MANAGE EXPANSION,
CONSOLIDATION AND THE INTEGRATION OF ACQUIRED BUSINESSES. THESE AND OTHER
FACTORS ARE DISCUSSED IN THE COMPANY'S FILINGS WITH SEDAR AND THE U.S.
SECURITIES AND EXCHANGE COMMISSION.

GENERAL

         Celestica is a leading provider of electronics manufacturing services
to OEMs worldwide and is the third-largest EMS provider in the world with 2000
revenue of $9.8 billion. Celestica provides a wide variety of products and
services to its customers, including the high-volume manufacture of complex PCAs
and the full system assembly of final products. In addition, the Company is a
leading-edge provider of design, repair and engineering services, supply chain
management and power products. Celestica operates facilities in North America,
Europe, Asia and Latin America.

         In 1998 and 1999, Celestica completed three equity offerings, including
its initial public offering, issuing a total of 81.9 million subordinate voting
shares for net proceeds (after tax) of $1.1 billion. The net proceeds from the
initial public offering were used to prepay a significant portion of Celestica's
debt. The net proceeds of the subsequent offerings were used to fund organic and
acquisition-related growth. In March 2000, Celestica issued 16.6 million
subordinate voting shares for net proceeds (after tax) of $740.1 million and in
August 2000, Celestica completed an offering of 20-year Liquid Yield OptionTM
Notes, or LYONs, for net proceeds (after tax) of $850.4 million. The LYONs are
recorded as an equity instrument pursuant to Canadian GAAP. See "Convertible
Debt". The Company's net debt to capitalization ratio decreased from 57% at July
1998 to negative 11% at March 31, 2001.

         In December 1999, the Company completed a two-for-one stock split of
the subordinate voting and multiple voting shares by way of a stock dividend.
All historical share and per share information has been restated to reflect the
effects of this stock split on a retroactive basis.

         Celestica prepares its financial statements in accordance with
accounting principles which are generally accepted in Canada with a
reconciliation to accounting principles generally accepted in the United States,
as disclosed in Note 24 to the fiscal 2000 Consolidated Financial Statements.

ACQUISITIONS

         A significant portion of Celestica's growth has been generated by the
strengthening of its customer relationships and increases in the breadth of its
service offerings through facility and business acquisitions completed since the
beginning of 1997.

         During 1997, 1998 and 1999 Celestica completed 17 acquisitions and
established three greenfield operations. In 2000, Celestica completed four
acquisitions and established one greenfield operation. During the first quarter
of 2001, Celestica completed three acquisitions and established one greenfield
operation.

<PAGE>


         In February and May, 2000, the Company acquired certain assets from the
Enterprise Systems Group and Microelectronics Division of IBM in Rochester,
Minnesota and Vimercate and Santa Palomba, Italy, respectively,


for a total purchase price of $470.0 million. The purchase price, including
capital assets, working capital and intangible assets, was financed with cash
on hand. The Company signed two three-year strategic supply agreements with
IBM to provide a complete range of electronics manufacturing services, with
estimated annual revenue of approximately $1.5 billion. The Rochester,
Minnesota operation provides printed circuit board assembly and test
services. The Vimercate operation provides printed circuit board assembly
services and the Santa Palomba operation provides system assembly services.
Approximately 1,800 employees joined Celestica.

         In June 2000, Celestica acquired NDB Industrial Ltda., NEC
Corporation's wholly-owned manufacturing subsidiary in Brazil. The Company
signed a five-year supply agreement to manufacture NEC communications network
equipment for the Brazilian market, with estimated revenue of approximately $1.2
billion over the five-year term of the agreement. Approximately 680 employees
joined Celestica. This acquisition enhanced the Company's presence in South
America and put Celestica in a leadership position with communications and
Internet infrastructure customers. In August 2000, the Company acquired Bull
Electronics Inc., the North American contract manufacturing operation of Groupe
Bull of France. The operations, which are located in Lowell, Massachusetts, have
enhanced the Company's service offerings in the New England area. The Company
has moved its printed circuit board assembly operation from Andover into this
Lowell facility, resulting in lower infrastructure costs. In November 2000,
Celestica acquired NEC Technologies (UK) Ltd., in Telford, UK, which enhanced
the Company's wireless communications capacity in Europe. The aggregate price
for these three acquisitions in 2000 was $169.8 million. In 2000, Celestica
established a greenfield operation in Singapore.

         In January 2001, Celestica acquired Excel Electronics, Inc. through a
merger with Celestica (US) Inc., a subsidiary of the Company. The Company issued
subordinate voting shares with a value of $1.5 million as consideration with
approximately $1.5 million in additional shares to be issued upon resolution of
certain contingencies. This acquisition enhanced the Company's prototype service
offering in the Southern region of the United States. In February 2001,
Celestica acquired certain manufacturing assets in Dublin, Ireland and Mt.
Pleasant, Iowa from Motorola Inc. The Company signed a three-year supply
agreement with estimated revenue of more than $1 billion over the three-year
term of the agreement. Approximately 1,150 employees joined Celestica. This
acquisition expanded the Company's business relationship with Motorola, a
leading telecom wireless customer. In March 2001, Celestica acquired certain
assets relating to a repair business from N.K. Techno Co. Ltd. in Japan. This
acquisition expanded the Company's presence in Japan. The aggregate purchase
price for the first quarter acquisitions was $67.2 million. Celestica also
established a greenfield operation in Shanghai.

         In February 2001, Celestica entered into agreements with Avaya Inc. to
purchase certain assets in Denver, Colorado and Little Rock, Arkansas. The
Company signed a five-year global supply agreement with Avaya with estimated
revenue of approximately $4 billion over the term of the agreement. The
aggregate purchase price is approximately $200 million and approximately 1,400
employees are expected to join Celestica. The acquisition is expected to close
in phases during the second and third quarters of 2001.

         Celestica continues to examine numerous acquisition opportunities in
order to:

- create strategic relationships with new customers and diversify end-product
  programs with existing customers;
- expand its capacity in selected geographic regions to take advantage of
  existing infrastructure or low cost manufacturing;
- diversify its customer base to serve a wide variety of end-markets;
- broaden its product and service offerings; and
- optimize its global positioning.


                                     - 2 -

<PAGE>

         Consistent with its past practices and as a normal course of
business, Celestica is engaged in ongoing discussions with respect to several
possible acquisitions of widely varying sizes, including small single
facility acquisitions, significant multiple facility acquisitions and
corporate acquisitions. Celestica has identified several possible
acquisitions that would enhance its global operations, increase its
penetration in the computer and communication industries and establish
strategic relationships with new customers. There can be no assurance that
any of these discussions will result in a definitive purchase agreement and,
if they do, what the terms or timing of any agreement would be. Celestica
expects to continue its current discussions and actively pursue other
acquisition opportunities.

RESULTS OF OPERATIONS

         Celestica's revenue and margins can vary from period to period as a
result of the level of business volumes, seasonality of demand, component supply
availability, and the timing of acquisitions. There is no certainty that the
historical pace of Celestica's acquisitions will continue in the future.

         Celestica's contracts with its key customers generally provide a
framework for its overall relationship with the customer. Actual production
volumes are based on purchase orders for the delivery of products. These orders
typically do not commit to firm production schedules for more than 30 to 90 days
in advance. Celestica minimizes risk relative to its inventory by ordering
materials and components only to the extent necessary to satisfy existing
customer orders. Celestica is largely protected from the risk of inventory cost
fluctuations as these costs are generally passed through to customers.

         Celestica's annual and quarterly operating results are primarily
affected by the level and timing of customer orders, fluctuations in materials
costs, and relative mix of value add products and services. The level and timing
of a customer's orders will vary due to the customer's attempt to balance its
inventory, changes in its manufacturing strategy and variation in demand for its
products. Celestica's annual and quarterly operating results are also affected
by capacity utilization and other factors, including price competition,
manufacturing effectiveness and efficiency, the degree of automation used in the
assembly process, the ability to manage inventory and capital assets
effectively, the timing of expenditures in anticipation of increased sales, the
timing of acquisitions and related integration costs, customer product delivery
requirements and shortages of components or labour. Historically, Celestica has
experienced some seasonal variation in revenue, with revenue typically being
highest in the fourth quarter and lowest in the first quarter.

The table below sets forth certain operating data expressed as a percentage of
revenue for the periods indicated:

<TABLE>
<CAPTION>
                                                                           THREE MONTHS ENDED
                                                                                MARCH 31,
                                                                                ---------
                        <S>                                                <C>        <C>
                                                                           2000       2001
                                                                           ----       ----
                        Revenue.....................................       100.0%     100.0%
                        Cost of sales...............................        93.1       92.8
                                                                           -----      -----
                        Gross profit................................         6.9        7.2
                        Selling, general and administrative expenses         3.6        3.3
                        Amortization of intangible assets...........         1.0        1.1
                        Integration costs related to acquisitions...          -         0.1
                        Other charges...............................          -         0.1
                                                                           ------     -----
                        Operating income............................         2.3        2.6
                        Interest income, net........................        (0.1)      (0.1)
                                                                           ------     ------
                        Earnings before income taxes................         2.4        2.7
                        Income taxes................................         0.8        0.7
                                                                           -----      -----
                        Net earnings................................         1.6%       2.0%
                                                                           ======     ======
</TABLE>


                                     - 3 -

<PAGE>

ADJUSTED NET EARNINGS

         As a result of the significant number of acquisitions made by Celestica
over the past few years, management of Celestica uses adjusted net earnings as a
measure of operating performance on an enterprise-wide basis. Adjusted net
earnings exclude the effects of acquisition-related charges (most significantly,
amortization of intangible assets and integration costs related to
acquisitions), other charges (most significantly restructuring) and the related
income tax effect of these adjustments. Adjusted net earnings is not a measure
of performance under Canadian GAAP or U.S. GAAP. Adjusted net earnings should
not be considered in isolation or as a substitute for net earnings prepared in
accordance with Canadian GAAP or U.S. GAAP or as a measure of operating
performance or profitability. The following table reconciles net earnings to
adjusted net earnings:


<TABLE>
<CAPTION>

                                                 THREE MONTHS ENDED
                                                       MARCH 31,
                                                       ---------
                                                    2000      2001
                                                    ----      ----
<S>                                                <C>        <C>
Net earnings................................       $ 26.1     $54.8
Amortization of intangible assets...........         15.3      29.6
Integration costs related to acquisitions...          0.7       2.3
Other charges...............................          -         3.8
Income tax effect of above..................         (2.6)     (3.2)
                                                   -------   -------
Adjusted net earnings.......................       $ 39.5     $87.3
                                                   -------   -------
                                                   -------   -------
% of revenue................................         2.4%      3.2%

</TABLE>

REVENUE

         Revenue increased $1,080.3 million, or 67%, to $2,692.6 million for the
three months ended March 31, 2001 from $1,612.3 million for the same period in
2000. This increase resulted from growth achieved both organically and through
strategic acquisitions and was driven primarily by customers in the
communications, storage and server industries. The Company defines organic
revenue as revenue excluding the business from operations acquired in the
preceding comparable period. Organic revenue growth for the three months ended
March 31, 2001 was 29% and represented 44% of the total year-over-year quarterly
growth. Organic growth came from growth in existing business and new customers
across all geographic segments. Sequentially, revenue decreased 22%, or $755.2
million for the three months ended March 31, 2001 compared to the three months
ended December 31, 2000, as a result of anticipated seasonality and the general
economic slowdown.

         Revenue from the Americas operations grew $514.9 million, or 44%, to
$1,695.6 million for the three months ended March 31, 2001 from $1,180.7 million
for the same period in 2000. Revenue from European operations grew $557.0
million, or 160%, to $904.9 million for the three months ended March 31, 2001
from $347.9 million for the same period in 2000. The Italian facilities
generated over half of Europe's increase from the prior year, with the remainder
due to an overall increase in Europe's base business. Revenue from Asian
operations increased $60.4 million, or 39%, to $215.0 million for the three
months ended March 31, 2001 from $154.6 million for the same period in 2000.
Inter-segment revenue for the first three months of 2001 was $122.9 million,
compared to $70.8 million for the same period in 2000.

         Revenue from customers in the communications industry for the three
months ended March 31, 2001 increased to 34% of revenue compared to 31% of
revenue for the same period in 2000. This increase is consistent with the
Company's strategy to increase the portion of its revenue from customers in the
communications industry. Revenue from customers in the server-related business
for the three months ended March 31, 2001 increased to 32% of revenue compared
to 23% of revenue for the same period in 2000, mainly as a result of the IBM
acquisitions in February and May, 2000.

                                     - 4 -

<PAGE>

         The following customers represented more than 10% of total revenue for
each of the indicated periods:

<TABLE>
<CAPTION>
                              THREE MONTHS ENDED
                                  MARCH 31,
                                  ---------
                              2000     2001
                              ----     ----
<S>                           <C>      <C>
Sun Microsystems.......        x        x
IBM....................                 x
Hewlett-Packard........        x
</TABLE>

         Celestica's top five customers represented in the aggregate 67% of
total revenue for both the three months ended March 31, 2001 and 2000. The
Company is dependent upon continued revenue from its top five customers. There
can be no guarantee that revenue from these or any other customers will not
increase or decrease as a percentage of consolidated revenue either individually
or as a group. Any material decrease in revenue from these or other customers
could have a material adverse effect on the Company's results of operations.

GROSS PROFIT

         Gross profit increased $82.7 million, or 75%, to $193.3 million for the
three months ended March 31, 2001 from $110.6 million for the same period in
2000. Gross margin increased to 7.2% for the three months ended March 31, 2001
from 6.9% for the same period in 2000 as a result of improved capacity at
several sites and continued focus on costs. The gross margin of 7.2% for the
three months ended March 31, 2001 is consistent with the gross margin for the
three months ended December 31, 2000.

         For the foreseeable future, the Company's gross margin is expected to
depend primarily on product mix, production efficiencies, utilization of
manufacturing capacity, start-up activity, new product introductions, and
pricing within the electronics industry. Over time, gross margins at individual
sites and for the Company as a whole are expected to fluctuate. Changes in
product mix, additional costs associated with new product introductions and
price erosion within the electronics industry could adversely affect the
Company's gross margin. Also, the availability of raw materials, which are
subject to lead time and other constraints, could possibly limit the Company's
revenue growth.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

         Selling, general and administrative expenses increased $31.0 million,
or 53%, for the three months ended March 31, 2001 to $89.0 million (3.3% of
revenue) from $58.0 million (3.6% of revenue) for the same period in 2000. The
increase in expenses was a result of increased staffing levels and higher
selling, marketing and administrative costs to support sales growth, as well as
the impact of expenses incurred by operations acquired during 2000 and 2001.
Selling, general and administrative expenses continue to increase year over year
at a slower rate than revenue.

         Research and development costs of $6.5 million (0.2% of revenue) were
incurred for the three months ended March 31, 2001 compared to $4.3 million
(0.3% of revenue) for the same period in 2000 and $5.3 million (0.2% of revenue)
for the three months ended December 31, 2000.

INTANGIBLE ASSETS AND AMORTIZATION

         Amortization of intangible assets increased $14.3 million, or 93%, to
$29.6 million for the three months ended March 31, 2001 from $15.3 million for
the same period in 2000. The increase is attributable to the intangible assets
arising from the 2000 and 2001 acquisitions, with the largest portion relating
to the IBM and NEC acquisitions. The excess of the purchase price paid over the
fair value of tangible assets acquired in the seven acquisitions completed in
2000 and 2001 totalled $306.5 million and has been allocated to goodwill,
intellectual property and other intangible assets.

         At March 31, 2001, intangible assets represented 10% of Celestica's
total assets compared to 10% at December 31, 2000 and 12% at March 31, 2000.


                                     - 5 -

<PAGE>


INTEGRATION COSTS RELATED TO ACQUISITIONS

         Integration costs related to acquisitions represent one-time costs
incurred within 12 months of the acquisition date, such as the costs of
implementing compatible information technology systems in newly acquired
operations, establishing new processes related to marketing and distribution
processes to accommodate new customers and salaries of personnel directly
involved with integration activities. All of the integration costs incurred
related to newly acquired facilities, and not to the Company's existing
operations.

         Integration costs were $2.3 million for the three months ended March
31, 2001 compared to $0.7 million for the same period in 2000 and $5.7 million
for the three months ended December 31, 2000. The integration costs incurred in
2001 primarily relate to the IBM acquisitions.

         Integration costs vary from period to period due to the timing of
acquisitions and related integration activities. Celestica expects to incur
additional integration costs in 2001 as it completes the integration of its 2000
and 2001 acquisitions. Celestica will incur future additional integration costs
as the Company continues to make acquisitions as part of its growth strategy.

OTHER CHARGES

         Other charges are non-recurring items or items that are unusual in
nature. For the three months ended March 31, 2001, Celestica incurred $3.8
million in other charges, relating to the restructuring of some of its
smaller operations. Celestica did not incur any other charges in 2000.

INTEREST INCOME, NET

         Interest income, net of interest expense, for the three months ended
March 31, 2001 amounted to $3.5 million compared to $1.8 million for the same
period in 2000. The Company continued to earn interest income on its cash
balance which more than offset the interest expense incurred on the Company's
Senior Subordinated Notes. Average cash balances for the three months ended
March 31, 2001 were higher compared to the same period in 2000, resulting in
higher interest income for the period.

INCOME TAXES

         Income tax expense for the three months ended March 31, 2001 was $17.3
million, reflecting an effective tax rate of 24%, compared to an income tax
expense of $12.3 million and an effective tax rate of 32% for the same period in
2000. The Company's effective tax rate decreased to 24% in the second quarter of
2000 as a result of the mix and volume of business in lower tax jurisdictions
within Europe and Asia. These lower tax rates include special tax holidays or
similar tax incentives that Celestica has negotiated with the respective tax
authorities.

         Celestica has recognized a net deferred tax asset at March 31, 2001 of
$82.7 million compared to $83.5 million at December 31, 2000. The balance
relates to the recognition of net operating losses and future income tax
deductions available to reduce future years' income for income tax purposes.
Celestica's current projections demonstrate that it will generate sufficient
taxable income in the future to realize the benefit of these deferred income tax
assets in the carry-forward periods. These losses will expire over a 15-year
period commencing in 2006.

                                     - 6 -


<PAGE>


QUARTERLY RESULTS OF OPERATIONS

         The following table sets forth certain unaudited quarterly financial
information of Celestica for the eight quarters ended March 31, 2001.
Historically, Celestica has experienced some seasonal variation in revenue,
with revenue typically being highest in the fourth quarter and lowest in the
first quarter. This variation may be offset in part by organic growth and
acquisitions. This information has been derived from the quarterly
consolidated financial statements of Celestica which are unaudited but which,
in the opinion of management, have been prepared on the same basis as the
Company's annual Consolidated Financial Statements and include all
adjustments (consisting only of normal recurring adjustments) necessary for a
fair presentation of the financial results for such periods. This information
should be read in conjunction with the Consolidated Financial Statements. The
operating results for any previous quarter are not necessarily indicative of
results for any future period.

<TABLE>
<CAPTION>

                                 JUNE 30,   SEPTEMBER  DECEMBER    MARCH 31,  JUNE 30,   SEPTEMBER   DECEMBER    MARCH 31,
                                   1999      30, 1999  31, 1999      2000       2000      30, 2000   31, 2000      2001
                                   ----      --------  --------      ----       ----      --------   --------      ----

                                                                            QUARTER ENDED (1)
                                                                            -----------------

                                                               (U.S.$ millions, except per share amounts)

<S>                             <C>        <C>        <C>        <C>         <C>         <C>         <C>         <C>

 Revenue ....................   $ 1,249.7  $ 1,356.9  $ 1,608.8  $ 1,612.3   $ 2,091.9   $ 2,600.1   $ 3,447.8   $ 2,692.6
 Cost of sales ..............     1,161.3    1,258.3    1,488.5    1,501.7     1,946.1     2,416.6     3,199.7     2,499.3
                                ---------  ---------  ---------  ---------   ---------   ---------   ---------   ---------
 Gross profit ...............        88.4       98.6      120.3      110.6       145.8       183.5       248.1       193.3
     % of revenue ...........         7.1%       7.3%       7.5        6.9%        7.0%        7.1%        7.2%        7.2%
 Selling, general and
   administrative expenses ..        47.1       51.6       61.3       58.0        73.5        85.1       109.5        89.0
     % of revenue ...........         3.8%       3.8%       3.8%       3.6%        3.5%        3.3%        3.2%        3.3%
 Amortization of intangible
   assets ...................        13.7       14.1       14.0       15.3        19.2        25.6        28.8        29.6
 Integration costs relating
to acquisitions .............         3.6        1.3        4.3        0.7         4.9         4.8         5.7         2.3
Other charges ...............          --         --         --         --          --          --          --         3.8
                                ---------  ---------  ---------  ---------   ---------   ---------   ---------   ---------

 Operating income ...........        24.0       31.6       40.7       36.6        48.2        68.0       104.1        68.6
 Interest expense (income) ..         2.3        3.0        2.2       (1.8)       (6.3)       (5.2)       (5.7)       (3.5)
                                ---------  ---------  ---------  ---------   ---------   ---------   ---------   ---------
 Earnings before income taxes        21.7       28.6       38.5       38.4        54.5        73.2       109.8        72.1
 Income taxes ...............         8.5        9.1       12.3       13.1        17.5        26.3        17.3
                                ---------  ---------  ---------  ---------   ---------   ---------   ---------   ---------
 Net earnings ...............   $    13.2  $    19.5  $    26.2  $    26.1   $    41.4   $    55.7   $    83.5   $    54.8
                                =========  =========  =========  =========   =========   =========   =========   =========

 Basic earnings per share ...   $    0.08  $    0.12  $    0.15  $    0.14   $    0.20   $    0.26   $    0.39   $    0.25
                                =========  =========  =========  =========   =========   =========   =========   =========
 Adjusted net earnings ......   $    27.5  $    32.6  $    41.0  $    39.5   $    63.7   $    83.9   $   117.0   $    87.3
                                =========  =========  =========  =========   =========   =========   =========   =========
        % of revenue ........         2.2%       2.4%       2.5%       2.4%        3.0%        3.2%        3.4%        3.2%

</TABLE>


                                     - 7 -

<PAGE>

------

(1)      For 1999, 2000 and 2001, includes the results of operations of (a) VXI
         Electronics, Inc. acquired in September 1999, (b) the assets acquired
         from Hewlett-Packard's Healthcare Group in October 1999, (c) EPS
         Wireless, Inc. acquired in December 1999 and (d) certain assets and
         repair operations acquired from Fujitsu-ICL Systems Inc. in December
         1999; for 2000 and 2001, includes the results of operations of (e)
         certain assets in Minnesota and Italy acquired from IBM in February and
         May, 2000, respectively, (f) NDB Industrial Ltda. acquired in June
         2000, (g) Bull Electronics Inc. acquired in August 2000, (h) NEC
         Technologies (UK) Ltd. acquired in November 2000, and (i) a greenfield
         operation established in Singapore in 2000; and for 2001, includes the
         results of operations of (j) Excel Electronics Inc. acquired in January
         2001, (k) certain assets in Ireland and Iowa acquired from Motorola
         Inc. in February 2001 and (l) a greenfield operation established in
         Shanghai in March 2001.

CONVERTIBLE DEBT

         In August 2000, Celestica issued LYONs with a principal amount at
maturity of $1,813.6 million, payable August 1, 2020. The Company received gross
proceeds of $862.9 million and incurred $12.5 million in underwriting
commissions, net of tax of $6.9 million. No interest is payable on the LYONs and
the issue price of the LYONs represents a yield to maturity of 3.75%. The LYONs
are subordinated in right of payment to all existing and future senior
indebtedness of the Company.

         The LYONs are convertible at any time at the option of the holder,
unless previously redeemed or repurchased, into 5.6748 subordinate voting shares
for each $1,000 principal amount at maturity. Holders may require the Company to
repurchase all or a portion of their LYONs on August 2, 2005, August 1, 2010 and
August 1, 2015 and the Company may redeem the LYONs at any time on or after
August 1, 2005 (and, under certain circumstances, before that date). The Company
is required to offer to repurchase the LYONs if there is a change in control or
a delisting event. Generally, the redemption or repurchase price is equal to the
accreted value of the LYONs. At the maturity of the LYONS, or in the event of an
investor put, the Company has the option to settle the LYONs in cash or
subordinate voting shares or any combination thereof. Presently, the Company's
policy would be to settle the LYONs, at a put date or at maturity, in cash
unless the market price of the subordinate voting shares exceeds a specific
threshold. This policy may change in the future.

         The Company has recorded the LYONs as an equity instrument pursuant to
Canadian GAAP. The LYONs are bifurcated into a principal equity component
(representing the present value of the notes) and an option component
(representing the value of the conversion features of the notes). The principal
equity component is accreted over the 20-year term through periodic charges to
retained earnings. Under U.S. GAAP, the LYONs are classified as a long-term
liability and, accordingly, the accrued yield on the LYONs during any period (at
3.75% per year) is classified as interest expense for that period.

         To calculate basic earnings per share for Canadian GAAP, the accretion
of the convertible debt is deducted from net earnings for the period to
determine earnings available to shareholders.

LIQUIDITY AND CAPITAL RESOURCES

         For the three months ended March 31, 2001, Celestica used cash of
$261.0 million from operating activities compared to generating cash of $25.7
million for the same period in 2000. Cash was utilized in the quarter
principally to support higher working capital requirements, primarily carrying
higher than anticipated inventory balances during the quarter, offset by cash
generated from operations. Investing activities for the first quarter of 2001
included capital expenditures of $76.5 million and $65.7 million for
acquisitions. The acquisitions included manufacturing assets in Dublin, Ireland
and Mt. Pleasant, Iowa and assets relating to a repair business in Japan. For
the three months ended March 31, 2000, investing activities included capital
expenditures of $68.6 million and the acquisition of assets in Rochester,
Minnesota for $135.1 million. In March 2000, Celestica completed an equity
offering and issued 16.6 million subordinate voting shares, for gross proceeds
of $757.4 million less expenses and underwriting commissions of $26.8 million
(pre-tax).


                                     - 8 -

<PAGE>

CAPITAL RESOURCES

         Celestica has two $250 million global, unsecured, revolving credit
facilities totalling $500 million, each provided by a syndicate of lenders. The
credit facilities permit Celestica and certain designated subsidiaries to borrow
funds directly for general corporate purposes (including acquisitions) at
floating rates. The credit facilities are available until April 2004 and July
2003, respectively. Under the credit facilities: Celestica is required to
maintain certain financial ratios; its ability and that of certain of its
subsidiaries to grant security interests, dispose of assets, change the nature
of its business or enter into business combinations, is restricted; and a change
in control is an event of default. No borrowings were outstanding under the
revolving credit facilities at March 31, 2001 or December 31, 2000.

         The only other financial covenant in effect is a debt incurrence
covenant contained in Celestica's Senior Subordinated Notes due 2006. This
covenant is based on Celestica's fixed charge coverage ratio, as defined in the
indenture governing the Senior Subordinated Notes.

         Celestica was in compliance with all debt covenants as at March 31,
2001 and December 31, 2000.

         Standard and Poors senior corporate credit rating for Celestica is BB+
with a stable outlook. Moody's senior implied rating for Celestica is Ba1, also
with a stable outlook.

         Celestica believes that cash flow from operating activities, together
with cash on hand and borrowings available under its global, unsecured,
revolving credit facilities, will be sufficient to fund currently anticipated
working capital, planned capital spending and debt service requirements for the
next 12 months. The Company expects capital spending for 2001 to be
approximately $225 million to $275 million. At March 31, 2001, Celestica had
committed $46 million in capital expenditures. In addition, Celestica regularly
reviews acquisition opportunities, and may therefore require additional debt or
equity financing.

         Celestica prices the majority of its products in U.S. dollars, and the
majority of its material costs are also denominated in U.S. dollars. However, a
significant portion of its non-material costs (including payroll, facilities
costs and costs of locally sourced supplies and inventory) are primarily
denominated in Canadian dollars, British pounds sterling, Euros and Mexican
pesos. As a result, Celestica may experience transaction and translation gains
or losses because of currency fluctuations. At March 31, 2001, Celestica had
forward foreign exchange contracts covering various currencies in an aggregate
notional amount of $762 million with expiry dates up to October 2002. The fair
value of these contracts at March 31, 2001 was an unrealized loss of $17.3
million. Celestica's current hedging activity is designed to reduce the
variability of its foreign currency costs and involves entering into contracts
to sell U.S. dollars to purchase Canadian dollars, British pounds sterling,
Mexican pesos and Euros at future dates. In general, these contracts extend for
periods of less than 19 months. Celestica may, from time to time, enter into
additional hedging transactions to minimize its exposure to foreign currency and
interest rate risks. There can be no assurance that such hedging transactions,
if entered into, will be successful.

BACKLOG

         Although Celestica obtains firm purchase orders from its customers, OEM
customers typically do not make firm orders for delivery of products more than
30 to 90 days in advance. Celestica does not believe that the backlog of
expected product sales covered by firm purchase orders is a meaningful measure
of future sales since orders may be rescheduled or cancelled.

RECENT DEVELOPMENTS

         Celestica announced at $40 - $60 million restructuring charge to be
recorded by the end of the second quarter. The provision is anticipated to cover
plant consolidations and the elimination of up to 3,000 jobs on a global basis.
These actions are being taken to resolve surpluses as a result of current
general market conditions and to manage more conservatively in light of our
customers end market visibility remaining poor. The reduced costs realized as a
result of this restructuring is expected to payback within a one-year period.


                                     - 9 -

<PAGE>

EURO CONVERSION

         As of January 1, 2001, 12 of the 15 member countries of the European
Union (the participating countries) had established fixed conversion rates
between their existing sovereign currencies and the Euro. For three years after
the introduction of the Euro, the participating countries can perform financial
transactions in either the Euro or their original local currencies. This will
result in a fixed exchange rate among the participating countries, whereas the
Euro (and the participating countries' currencies in tandem) will continue to
float freely against the U.S. dollar and currencies of other non-participating
countries.

         Management continuously monitors and evaluates the effects of the Euro
conversion on the Company. Celestica does not believe that significant
modifications of its information technology systems are needed in order to
handle Euro transactions and reporting. The Company has modified its hedging
policies to take the Euro conversion into account. While the Company currently
believes that the effects of the conversion do not and will not have a material
adverse effect on the Company's business and operations, there can be no
assurances that such conversion will not have a material adverse effect on the
Company's results of operations and financial position due to competitive and
other factors that may be affected by the conversion and that cannot be
predicted by the Company.

RECENT ACCOUNTING DEVELOPMENTS

         The Financial Accounting Standards Board (FASB) has issued SFAS No.
133, "Accounting for Derivative Instruments and Hedging Activities" and SFAS No.
138 which amends SFAS No. 133. SFAS No. 133 establishes methods of accounting
for derivative financial instruments and hedging activities related to those
instruments as well as other hedging activities. The standard requires that all
derivatives be recorded on the balance sheet at fair value. The Company will
implement SFAS No. 133 for its year ended December 31, 2001 for purposes of the
U.S. GAAP reconciliation. In accordance with the new standard, the Company
accounts for its existing foreign currency contracts as cash flow hedges.

         In the first quarter of 2001, Celestica adopted retroactively the
new Canadian Institute of Chartered Accountants Handbook Section 3500
"Earnings per Share", which requires the use of the treasury stock method for
calculating diluted earnings per share. This change results in earnings per
share calculations which are consistent with United States generally accepted
accounting principles. Previously reported diluted earnings per share have
been restated to reflect this change.


                                     - 10 -

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