<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>3
<FILENAME>a2078647zex-99_1.txt
<DESCRIPTION>EXHIBIT 99.1
<TEXT>
<PAGE>

EXHIBIT 99.1


<PAGE>



                     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  2001
CONSOLIDATED FINANCIAL STATEMENTS.

         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;  OUR VARIABILITY OF OPERATING  RESULTS
AMONG PERIODS; OUR DEPENDENCE ON THE COMPUTER AND COMMUNICATIONS INDUSTRIES; OUR
DEPENDENCE  ON A  LIMITED  NUMBER  OF  CUSTOMERS;  AND  OUR  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.

         WE  DISCLAIM  ANY  INTENTION  OR  OBLIGATION  TO UPDATE  OR REVISE  ANY
FORWARD-LOOKING  STATEMENTS  CONTAINED  HEREIN,  WHETHER  AS  A  RESULT  OF  NEW
INFORMATION, FUTURE EVENTS OR OTHERWISE.

GENERAL

         Celestica is a leading provider of electronics  manufacturing  services
to OEMs worldwide with 2001 revenue of $10.0 billion.  Celestica provides a wide
variety of products and services to its  customers,  including  the  high-volume
manufacture  of complex  printed  circuit board  assemblies  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 the Americas, Europe and Asia.

         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 22 to the 2001 Consolidated Financial Statements.

ACQUISITIONS

         A  significant  portion of  Celestica's  growth has been  generated  by
strengthening  its  customer  relationships  and  increasing  the breadth of its
service offerings through asset and business acquisitions.

2001 ASSET ACQUISITIONS:

         In February 2001,  Celestica acquired certain  manufacturing  assets in
Dublin,  Ireland and Mt.  Pleasant,  Iowa from  Motorola  Inc. and signed supply
agreements for two and three years, respectively.  This acquisition expanded the
Company's  business  relationship  with  Motorola,  a leading  telecom  wireless
customer.  In March 2001,  Celestica  acquired  certain assets  relating to N.K.
Techno Co. Ltd 's repair  business,  which  expanded the  Company's  presence in
Japan,  and  established  a  greenfield  operation  in  Shanghai.  In May  2001,
Celestica  acquired certain assets from Avaya Inc. in Little Rock,  Arkansas and
Denver,  Colorado and in August 2001, acquired certain assets in Saumur, France.
The Company  signed a five-year  supply  agreement  with Avaya which  positioned
Celestica as Avaya's primary  outsourcing partner in the area of printed circuit
board,  system  assembly,  test,  repair and supply chain management for a broad
range of its  telecommunications  products.  In August 2001,  Celestica acquired
certain  assets in  Columbus,  Ohio and  Oklahoma  City,  Oklahoma  from  Lucent
Technologies  Inc. The Company signed a five-year  supply agreement with Lucent,
which  positions  Celestica  as the  leading EMS  provider  for  Lucent's  North
American switching, access and wireless networking systems products.

         The  aggregate  price for these  asset  acquisitions  in 2001 of $834.1
million was financed with cash.



<PAGE>


2001 BUSINESS COMBINATIONS:

         In January 2001,  Celestica acquired Excel Electronics,  Inc. through a
merger with  Celestica  (U.S.)  Inc.,  which  enhanced the  Company's  prototype
service  offering in the  southern  region of the United  States.  In June 2001,
Celestica  acquired Sagem CR s.r.o.,  in the Czech  Republic,  from Sagem SA, of
France,  which enhanced the Company's  presence in central Europe and positioned
Celestica as Sagem's primary EMS provider.  In August 2001,  Celestica  acquired
Primetech Electronics Inc. (Primetech),  an electronics  manufacturer in Canada.
This   acquisition   provided   Celestica  with   additional   high   complexity
manufacturing  capability  and an expanded  global  customer  base. The purchase
price for  Primetech  was  financed  primarily  with the issuance of 3.4 million
subordinate  voting  shares and the  issuance of options to purchase 0.3 million
subordinate voting shares of the Company.

         In October 2001,  Celestica  acquired Omni  Industries  Limited (Omni).
Omni  is  an  EMS  provider,  headquartered  in  Singapore,  with  locations  in
Singapore,  Malaysia,  China, Indonesia and Thailand and had approximately 9,000
employees  at the date of  acquisition.  Omni  provides  printed  circuit  board
assembly and system  assembly  services,  as well as other related  supply chain
services including plastic injection molding and distribution. Omni manufactures
products  for  industry  leading  OEMs in the  PC,  storage  and  communications
sectors.  The  acquisition  significantly  enhanced  Celestica's EMS presence in
Asia.  The  purchase  price for Omni of $865.8  million  was  financed  with the
issuance of 9.2 million subordinate voting shares and the issuance of options to
purchase 0.3 million subordinate voting shares of the Company and $479.5 million
in cash.

         The aggregate purchase  price for these  business combinations  in 2001
 was $1,093.3  million, of which $526.3 million was financed with cash.

         The Company is in the process of obtaining  third-party  valuations  of
certain  assets  for the Omni  acquisition.  The fair  value  allocation  of the
purchase price is subject to refinement and could result in adjustments  between
goodwill and other net assets.

2002 ASSET ACQUISITIONS:

         On March 31,  2002,  the Company  acquired  certain  assets  located in
Miyagi and Yamanashi, Japan from NEC Corporation. The Company signed a five-year
supply  agreement  to  provide a  complete  range of  electronics  manufacturing
services  for a broad  range of NEC's  optical  backbone  and  broadband  access
equipment.  The purchase  price was financed  with cash and was allocated to the
net  assets  acquired,  based  on  their  relative  fair  values  at the date of
acquisition.  The Company is obtaining third-party valuations of certain assets.
The fair value allocation of the purchase price is subject to refinement.

         Consistent  with its past practices and as a normal course of business,
Celestica  may at any time be  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 several  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 any 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  contractual  agreements  with its key customers  generally
provide a framework for its overall  relationship  with the customer.  Celestica
recognizes  product  revenue upon  shipment to the customer as  performance  has
occurred,  all customer specified  acceptance criteria have been tested and met,
and the earnings process is considered  complete.  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 its risk  relative to its  inventory  by ordering  materials
and components only to the extent necessary to


                                      -2-

<PAGE>


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  customers'  orders will vary due to  customers'  attempts  to balance  their
inventory,  changes in their manufacturing  strategies,  variation in demand for
their products and general economic conditions. 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.  Weak  end-market  conditions  continue in the
telecommunications  and  information  technology  industries  which  resulted in
customers  rescheduling  and cancelling  orders.  This has impacted  Celestica's
results of operations.

         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
                                                    2001       2002
                                                    -----      -----
<S>                                                 <C>        <C>
Revenue.....................................        100.0%     100.0%
Cost of sales...............................         92.8       92.9
                                                    -----      -----
Gross profit................................          7.2        7.1
Selling, general and administrative expenses          3.3        3.6
Amortization of goodwill and other intangible
assets......................................          1.1        1.0
Integration costs related to acquisitions...          0.1        0.2
Other charges...............................          0.1         -
                                                    -----      ----
Operating income ...........................          2.6        2.3
Interest expense (income), net..............         (0.1)       0.1
                                                    ------     -----
Earnings before income taxes................          2.7        2.2
Income taxes ...............................          0.7        0.4
                                                    -----      -----
Net earnings................................          2.0%       1.8%
                                                    ======     ======
</TABLE>

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 costs and the
write-down of goodwill and intangible  assets) 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.  Adjusted  net  earnings  does  not have a  standardized  meaning
prescribed  by  GAAP  and is not  necessarily  comparable  to  similar  measures
presented by other  companies.  The following  table  reconciles net earnings to
adjusted net earnings:

<TABLE>
<CAPTION>

                                                   THREE MONTHS ENDED
                                                        MARCH 31
                                                     2001       2002
                                                     -----      -----
                                                     (in millions)
<S>                                                 <C>        <C>
Net earnings ...............................       $  54.8    $  39.7
Amortization of goodwill and other intangible
assets......................................          29.6       22.0
Integration costs related to acquisitions...           2.3        3.9
Other charges...............................          3.8          -
Income tax effect of above..................          (3.2)      (2.2)
                                                   --------   --------
Adjusted net earnings.......................       $  87.3    $  63.4
                                                   =======    =======
   As a percentage of revenue...............          3.2%       2.9%
                                                   =======    =======

</TABLE>


                                      -3-

<PAGE>


REVENUE

         Revenue  decreased 20%, to $2,151.5  million for the three months ended
March 31, 2002 from $2,692.6  million for the same period in 2001. Base business
volumes  declined  47%,  offset  by  a  27%  increase  in  acquisition  revenue.
Acquisition  growth was driven by our 2001  acquisitions  in the  communications
industry,  primarily  in the U.S.  and Asia.  Base  revenue  declined due to the
significant  softening  of  end-markets.  The  visibility  of future  end-market
conditions remains limited.

         Revenue from the Americas operations  decreased 20% to $1,359.4 million
for the three  months  ended March 31, 2002  compared to the same period in 2001
primarily  due to  the  end-market  softening  which  was  partially  offset  by
acquisitions.  Revenue from European operations  decreased 48% to $470.3 million
for the three  months  ended March 31, 2002  compared to the same period in 2001
primarily due to the general  industry  downturn.  Revenue from Asian operations
increased  86% to $400.7  million  for the three  months  ended  March 31,  2002
compared  to the same  period  in 2001  primarily  due to the Omni  acquisition.
Inter-segment  revenue  for the three  months  ended  March  31,  2002 was $78.9
million,  compared to $122.9  million for the same period in 2001.  Acquisitions
completed in 2001 are expected to primarily increase revenue in the Americas and
Asian operations.

         Revenue  from  customers in the  communications  industry for the three
months  ended  March 31,  2002 was 46% of revenue  compared  to 34% for the same
period in 2001.  Revenue from customers in the  server-related  business for the
three months ended March 31, 2002 was 28% compared to 32% for the same period in
2001.  Revenue  in  the  communications   industry  benefited  from  our  recent
acquisitions.

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

<TABLE>
<CAPTION>
                              THREE MONTHS
                             ENDED MARCH 31
                              2001     2002
                             -----    -----
<S>                          <C>      <C>
Sun Microsystems....         X        X
IBM.................         X        X
Lucent Technologies                   X
Hewlett-Packard.....                  X
</TABLE>


         Celestica's  top-five  customers  represented  in the  aggregate 72% of
total  revenue for the three months ended March 31, 2002 compared to 67% for the
same period in 2001. The Company is dependent  upon  continued  revenue from its
top  customers.  There can be no assurance  that revenue from these or any other
customers  will not increase or decrease as a percentage of total 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. See notes 17 (concentration of risk) and 19 to the 2001 Consolidated
Financial Statements.

GROSS PROFIT

         Gross  profit  decreased  21%, to $152.1  million for the three  months
ended March 31, 2002 compared to the same period in 2001. Gross margin decreased
to 7.1% for the three months ended March 31, 2002, from 7.2% for the same period
in 2001.  Margins  decreased due to the drop in volumes,  offset by the benefits
from the restructuring actions.

         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  (SG&A) expenses decreased 14% to
$76.7  million  (3.6% of revenue) for the three months ended March 31, 2002 from
$89.0  million  (3.3% of revenue)  for the same period in 2001.  The


                                      -4-

<PAGE>

decrease  in expenses,  on  an  absolute  basis, is driven by  lower volumes and
includes the benefits from the restructuring.

         Research and  development  costs  decreased  to $4.5  million  (0.2% of
revenue)  for the three  months  ended March 31, 2002  compared to $6.5  million
(0.2% of revenue) for the same period in 2001.

AMORTIZATION OF GOODWILL AND OTHER INTANGIBLE ASSETS

         Amortization of goodwill and other intangible  assets decreased 26%, to
$22.0  million for the three months ended March 31, 2002 from $29.6  million for
the same period in 2001.  Effective  January 1, 2002,  the Company fully adopted
the new accounting standards for "Business Combinations" and "Goodwill and Other
Intangible   Assets"  and  has   discontinued   amortization  of  all  goodwill.
Amortization  of goodwill  expense for the three months ended March 31, 2002 was
$9.9  million and for fiscal  2001 was $39.2  million.  See  "Recent  Accounting
Developments."  The  decrease  in  amortization  is the result of this change in
accounting for goodwill,  offset by the amortization of other intangible  assets
arising from the 2001 acquisitions.

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 $3.9  million for the three  months ended March
31, 2002 compared to $2.3 million for the same period in 2001.  The  integration
costs incurred for the three months ended March 31, 2002 primarily relate to the
Avaya, Lucent and Primetech 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 2002 as it completes the integration of its 2001
and 2002 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.  Celestica  did not incur other charges for the three months ended March
31, 2002 compared to $3.8 million for the same period in 2001.  The 2001 charges
related to the Company's restructuring.

         A further  description  of other charges is included  in note 13 to the
2001 Consolidated Financial Statements.

         The Company expects to benefit from the restructuring measures taken in
2001 through  margin  improvements  and reduced  operating  costs in the current
year. The Company expects to complete the major components of the  restructuring
plan by the end of 2002. Cash outlays are funded from cash on hand.

INTEREST EXPENSE, NET

         Interest  expense,  net of interest income,  for the three months ended
March 31, 2002 amounted to $1.7 million  compared to net interest income of $3.5
million for the same period in 2001.  Interest  income  decreased  for the three
months  ended  March 31, 2002  compared  to the same period in 2001  because the
Company  earned lower interest  rates on its cash balance.  The interest  income
earned on its cash balance was offset by the interest  expense on the  Company's
Senior Subordinated Notes and debt facilities.


                                      - 5 -


<PAGE>


INCOME TAXES

         The  Company's  income tax expense for the three months ended March 31,
2002 was $8.1 million, reflecting an effective tax rate of 17%. This is compared
to an  income  tax  expense  of  $17.3  million  for the  same  period  in 2001,
reflecting an effective tax rate of 24%.

         The  Company's  effective  tax  rate  decreased  from 24% to 17% in the
second  quarter of 2001 as a result of the mix and volume of  business  in lower
tax  jurisdictions  within  Europe and Asia.  These lower tax rates  include tax
holidays and tax incentives  that  Celestica has negotiated  with the respective
tax  authorities  which expire between 2002 and 2012. The Company's  current tax
rate of 17% is expected to continue for the foreseeable future.

         Celestica has  recognized a net deferred tax asset at March 31, 2002 of
$143.1  million  compared to $102.8  million at December 31, 2001. The net asset
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. A portion of the net operating losses have
an indefinite carry forward period. The other portion will expire over a 19-year
period commencing in 2005.

LIQUIDITY AND CAPITAL RESOURCES

         For the  three  months  ended  March  31,  2002,  operating  activities
provided  Celestica with $273.9 million in cash  principally from earnings and a
reduction  in  working  capital,  primarily  inventory  due to better  inventory
management.  Investing  activities  for the three  months  ended  March 31, 2002
included   capital   expenditures  of  $26.1  million  and  $102.9  million  for
acquisitions  which  were  funded  from  cash  generated  in  the  quarter.  See
"Acquisitions."  The Company will continue to focus on improving working capital
management.

         For the three  months  ended  March  31,  2001,  Celestica's  operating
activities utilized $260.8 million in cash.  Investing  activities for the three
months ended March 31, 2001 included  capital  expenditures of $76.8 million and
$65.7 million for acquisitions.

CAPITAL RESOURCES

         Celestica  has two $250.0  million  and one $500.0  million  unsecured,
revolving credit facilities totalling $1.0 billion, each provided by a syndicate
of lenders and which are  available  until July 2003,  April 2004 and July 2005,
respectively.  The credit  facilities  permit  Celestica and certain  designated
subsidiaries to borrow funds directly for general corporate purposes  (including
acquisitions)  at floating  rates.  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, 2002.

         Effective  April 19, 2002,  the  maturity on one of the $250.0  million
facilities has been extended from April 2004 to April 2005. Concurrent with this
extension,  the Company  elected to reduce the  facility to $210.0  million from
$250.0 million.

         There  is  an  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 this debt covenant as at March 31, 2002.

         A subsidiary  of the Company has secured loan  facilities of which $8.0
million was outstanding at March 31, 2002. The weighted  average  interest rates
on these  facilities in 2002 was 4.6%.  The loans are  denominated  in Singapore
dollars and are repayable through quarterly payments.

         Celestica and certain  subsidiaries  have  uncommitted  bank facilities
which total $43.0 million that are available for operating requirements.


                                      -6-
<Page>

         Celestica believes that cash flow from operating  activities,  together
with cash on hand and borrowings available under its 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 2002 to be in the range of 1% to 1.5% of revenue.
At  March  31,  2002,   Celestica  had   committed   $17.5  million  in  capital
expenditures.    In   addition,    Celestica   regularly   reviews   acquisition
opportunities, and may therefore require additional debt or equity financing.

         The  Company  has  entered  into an  arrangement  to sell up to  $400.0
million in accounts  receivable  under a revolving  facility  which is available
until September 2004. The Company has sold $400.0 million in accounts receivable
for the periods ended December 31, 2001 and March 31, 2002.

         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  denominated in
various  currencies.  As a result,  Celestica  may  experience  transaction  and
translation gains or losses because of currency fluctuations. At March 31, 2002,
Celestica had forward foreign exchange  contracts covering various currencies in
an  aggregate  notional  amount of $653.2  million  with expiry dates up to June
2003. The fair value of these contracts at March 31, 2002 was an unrealized loss
of $4.5 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,  euros,  Thailand  baht,  Japanese yen and Czech koruna 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.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

         The  preparation of financial  statements in conformity  with generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  that  affect the  reported  amounts of assets and  liabilities  and
disclosures  of contingent  assets and  liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the reporting
period. Significant estimates are used in determining the allowance for doubtful
accounts,  inventory valuation and the useful lives of intangible assets. Actual
results could differ materially from those estimates and assumptions.

         Celestica  records an  allowance  for doubtful  accounts for  estimated
 credit losses based on customer and industry  concentrations  and the Company's
 knowledge  of the  financial  condition  of its  customers.  A change  to these
 factors could impact the estimated allowance.

         Celestica  values its inventory on a first-in,  first-out  basis at the
 lower of cost and  replacement  cost for  production  parts and at the lower of
 cost  and net  realizable  value  for  work in  progress  and  finished  goods.
 Celestica adjusts its inventory  valuation based on estimates of net realizable
 value and shrinkage.  A change to these  assumptions could impact the valuation
 of inventory.

         Celestica's  estimate of the useful life of intangible  assets reflects
 the periods in which the projected  future net cash flows will be generated.  A
 significant  change in the  projected  future net cash flows  could  impact the
 estimated useful life.

RECENT ACCOUNTING DEVELOPMENTS

BUSINESS COMBINATIONS, GOODWILL AND OTHER INTANGIBLE ASSETS:

     In  September  2001,  the CICA  issued  Handbook  Sections  1581  "Business
Combinations" and 3062 "Goodwill and Other Intangible Assets".  See note 2(a) to
the March 31, 2002 Consolidated Financial Statements.

STOCK-BASED COMPENSATION AND OTHER STOCK-BASED PAYMENTS:

     Effective  January 1,  2002,  the  Company  adopted  the new CICA  Handbook
Section  3870.  See note  2(b) to the  March  31,  2002  Consolidated  Financial
Statements.


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FOREIGN CURRENCY TRANSLATION AND HEDGING RELATIONSHIPS:

     CICA  Handbook  Section 1650 has been amended to eliminate the deferral and
amortization  of foreign  currency  translation  gains and losses on  long-lived
monetary items, effective January 1, 2002, with retroactive restatement of prior
periods.  The Company is not impacted by this change. The CICA issued Accounting
Guideline AcG-13,  which establishes criteria for hedge accounting effective for
the Company's 2003 fiscal year.  The Company has complied with the  requirements
of AcG-13 and has  determined  that all of its current  hedges will  continue to
qualify for hedge accounting when the guideline becomes effective.

IMPAIRMENT OF LONG-LIVED ASSETS:

     In  October  2001,  FASB  issued  Statement  No.  144  "Accounting  for the
Impairment or Disposal of  Long-Lived  Assets,"  which  retains the  fundamental
provisions  of SFAS 121 for  recognizing  and  measuring  impairment  losses  of
long-lived  assets  other  than  goodwill.   Statement  144  also  broadens  the
definition of discontinued operations to include all distinguishable  components
of an entity that will be eliminated from ongoing operations.  This Statement is
effective  for the  Company's  fiscal  year  commencing  January 1, 2002,  to be
applied prospectively. In August 2001, SFAS 143 "Accounting for Asset Retirement
Obligations"  was  approved  and  requires  that  the  fair  value  of an  asset
retirement  obligation be recorded as a liability,  at fair value, in the period
in which the  Company  incurs  the  obligation.  SFAS 143 is  effective  for the
Company's  fiscal  year  commencing  January 1, 2003.  The  Company  expects the
adoption  of these  standards  will have no  material  impact  on its  financial
position, results of operations or cash flows.


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