Celestica Announces Second Quarter 2016 Financial Results

Our non-IFRS measures herein include adjusted gross profit, adjusted gross margin (adjusted gross profit as a percentage of revenue), adjusted selling, general and administrative expenses (SG&A), adjusted SG&A as a percentage of revenue, operating earnings (adjusted EBIAT), operating margin (adjusted EBIAT as a percentage of revenue), adjusted net earnings, adjusted earnings per share, return on invested capital (ROIC), and free cash flow. Adjusted EBIAT, ROIC and free cash flow are further described in the tables below. In calculating these non-IFRS financial measures, management excludes the following items, where applicable: employee stock-based compensation expense, amortization of intangible assets (excluding computer software), restructuring and other charges, net of recoveries (most significantly restructuring charges), the write-down of goodwill, intangible assets and property, plant and equipment, and gains or losses related to the repurchase of our securities, net of tax adjustments and significant deferred tax write-offs or recoveries associated with restructuring actions or restructured sites.

We believe the non-IFRS measures we present herein are useful, as they enable investors to evaluate and compare our results from operations and cash resources generated from our business in a more consistent manner (by excluding specific items that we do not consider to be reflective of our ongoing operating results) and provide an analysis of operating results using the same measures our chief operating decision makers use to measure performance. The non-IFRS financial measures that can be reconciled to IFRS measures result largely from management's determination that the facts and circumstances surrounding the excluded charges or recoveries are not indicative of the ordinary course of the ongoing operation of our business.

Non-IFRS measures do not have any standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other public companies that use IFRS, or who report under U.S. GAAP and use non-U.S. GAAP measures to describe similar operating metrics. Non-IFRS measures are not measures of performance under IFRS and should not be considered in isolation or as a substitute for any standardized measure under IFRS. The most significant limitation to management's use of non-IFRS financial measures is that the charges or credits excluded from the non-IFRS measures are nonetheless charges or credits that are recognized under IFRS and that have an economic impact on the company. Management compensates for these limitations primarily by issuing IFRS results to show a complete picture of the company's performance, and reconciling non-IFRS results back to IFRS results where a comparable IFRS measure exists.

The economic substance of these exclusions and management's rationale for excluding them from non-IFRS financial measures is provided below:

Employee stock-based compensation expense, which represents the estimated fair value of stock options, restricted share units and performance share units granted to employees, is excluded because grant activities vary significantly from quarter-to-quarter in both quantity and fair value. In addition, excluding this expense allows us to better compare core operating results with those of our competitors who also generally exclude employee stock-based compensation expense in assessing operating performance, who may have different granting patterns and types of equity awards, and who may use different valuation assumptions than we do, including those competitors who report under U.S. GAAP and use non-U.S. GAAP measures to present similar metrics.

Amortization charges (excluding computer software) consist of non-cash charges against intangible assets that are impacted by the timing and magnitude of acquired businesses. Amortization of intangible assets varies among our competitors, and we believe that excluding these charges permits a better comparison of core operating results with those of our competitors who also generally exclude amortization charges in assessing operating performance.

Restructuring and other charges, net of recoveries, include costs relating to employee severance, lease terminations, site closings and consolidations, write-downs of owned property and equipment which are no longer used and are available for sale, reductions in infrastructure, and acquisition-related transaction costs. We exclude restructuring and other charges, net of recoveries, because we believe that they are not directly related to ongoing operating results and do not reflect expected future operating expenses after completion of these activities. We believe these exclusions permit a better comparison of our core operating results with those of our competitors who also generally exclude these charges, net of recoveries, in assessing operating performance.

Impairment charges, which consist of non-cash charges against goodwill, intangible assets and property, plant and equipment, result primarily when the carrying value of these assets exceeds their recoverable amount. Our competitors may record impairment charges at different times, and we believe that excluding these charges permits a better comparison of our core operating results with those of our competitors who also generally exclude these charges in assessing operating performance.

Gains or losses related to the repurchase of our securities are excluded, as we believe that these gains or losses do not reflect core operating performance and vary significantly among those of our competitors who also generally exclude these gains or losses in assessing operating performance.

Significant deferred tax write-offs or recoveries associated with restructuring actions or restructured sites are excluded, as we believe that these write-offs or recoveries do not reflect core operating performance and vary significantly among those of our competitors who also generally exclude these charges or recoveries in assessing operating performance.

The following table sets forth, for the periods indicated, the various non-IFRS measures discussed above, and a reconciliation of IFRS to non-IFRS measures, where a comparable IFRS measure exists (in millions, except percentages and per share amounts):

                                                                            
                  Three months ended June 30     Six months ended June 30   
                 ----------------------------- -----------------------------
                      2015           2016           2015           2016     
                 -------------- -------------- -------------- --------------
                          % of           % of           % of           % of 
                       revenue        revenue        revenue        revenue 
                 -------------- -------------- -------------- --------------
IFRS revenue     $1,417.3       $1,485.5       $2,715.8       $2,838.8      
                                                                            
IFRS gross                                                                  
 profit          $   97.3  6.9% $  111.8  7.5% $  188.7  6.9% $  204.6  7.2%
  Employee                                                                                                                       
      stock-based                                                                                                                            
      compensation                                                                                                                          
      expense                        3.0                        3.0                        7.4                        7.5            
                                  ---------            ---------            ---------            ---------          
Non-IFRS                                                                                                                                        
  adjusted  gross                                                                                                                          
  profit                    $    100.3    7.1%  $    114.8    7.7%  $    196.1    7.2%  $    212.1    7.5%
                                  =========            =========            =========            =========          
                                                                                                                                                        
IFRS  SG&A                $      50.1    3.5%  $      54.4    3.7%  $    105.5    3.9%  $    106.4    3.7%
    Employee                                                                                                                                    
      stock-based                                                                                                                            
      compensation                                                                                                                          
      expense                      (4.1)                    (3.8)                  (11.2)                    (8.7)          
                                  ---------            ---------            ---------            ---------          
Non-IFRS                                                                                                                                        
  adjusted  SG&A      $      46.0    3.2%  $      50.6    3.4%  $      94.3    3.5%  $      97.7    3.4%
                                  =========            =========            =========            =========          
                                                                                                                                                        
IFRS  earnings                                                                                                                              
  before  income                                                                                                                            
  taxes                      $      29.3              $      49.1              $      56.0              $      78.3            
    Finance  costs              1.1                        2.7                        1.6                        4.9            
    Employee                                                                                                                                    
      stock-based                                                                                                                            
      compensation                                                                                                                          
      expense                        7.1                        6.8                      18.6                      16.2            
    Amortization                                                                                                                            
      of  intangible                                                                                                                        
      assets                                                                                                                                      
      (excluding                                                                                                                              
      computer                                                                                                                                  
      software)                    1.5                        1.5                        3.0                        3.0            
    Restructuring                                                                                                                          
      and  other                                                                                                                                
      charges                                                                                                                                    
      (recoveries)              9.3                      (3.0)                      9.6                      (1.3)          
                                  ---------            ---------            ---------            ---------          
Non-IFRS                                                                                                                                        
  operating                                                                                                                                    
  earnings                                                                                                                                      
  (adjusted                                                                                                                                    
  EBIAT)  (1)            $      48.3    3.4%  $      57.1    3.8%  $      88.8    3.3%  $    101.1    3.6%
                                  =========            =========            =========            =========          
                                                                                                                                                        
IFRS  net                                                                                                                                        
  earnings                $      24.2    1.7%  $      36.2    2.4%  $      43.9    1.6%  $      61.8    2.2%
    Employee                                                                                                                                    
      stock-based                                                                                                                            
      compensation                                                                                                                          
      expense                        7.1                        6.8                      18.6                      16.2            
    Amortization                                                                                                                            
      of  intangible                                                                                                                        
      assets                                                                                                                                      
      (excluding                                                                                                                              
      computer                                                                                                                                  
      software)                    1.5                        1.5                        3.0                        3.0            
    Restructuring                                                                                                                          
      and  other                                                                                                                                
      charges                                                                                                                                    
      (recoveries)              9.3                      (3.0)                      9.6                      (1.3)          
    Adjustments                                                                                                                              
      for  taxes  (2)          (0.4)                      0.3                      (0.4)                    (0.3)          
                                  ---------            ---------            ---------            ---------          
Non-IFRS                                                                                                                                        
  adjusted  net                                                                                                                              
  earnings                $      41.7              $      41.8              $      74.7              $      79.4            
                                  =========            =========            =========            =========          
                                                                                                                                                        
Diluted  EPS                                                                                                                                  
    Weighted                                                                                                                                    
      average  #  of                                                                                                                          
      shares  (in                                                                                                                              
      millions)                166.9                    144.1                    170.7                    144.6            
    IFRS  earnings                                                                                                                          
      per  share          $      0.14              $      0.25              $      0.26              $      0.43            
    Non-IFRS                                                                                                                                    
      adjusted                                                                                                                                  
      earnings  per                                                                                                                          
      share                  $      0.25              $      0.29              $      0.44              $      0.55            
#  of  shares                                                                                                                                  
  outstanding  at                                                                                                                          
  period  end  (in                                                                                                                          
  millions)                    142.9                    140.7                    142.9                    140.7            
                                                                                                                                                        
IFRS  cash                                                                                                                                      
  provided  by                                                                                                                                
  (used  in)                                                                                                                                    
  operations            $      44.4              $      (4.5)            $      79.5              $    (22.8)          
    Purchase  of                                                                                                                              
      property,                                                                                                                                
      plant  and                                                                                                                                
      equipment,                                                                                                                              
      net  of  sales                                                                                                                          
      proceeds                  (18.2)                  (17.7)                  (30.8)                  (33.6)          
    Finance  lease                                                                                                                          
      payments                          -                      (1.1)                          -                      (2.4)          
    Repayments                                                                                                                                
      from                                                                                                                                          
      (Advances  to)                                                                                                                        
      Solar                                                                                                                                        
      Supplier                  (21.0)                      2.0                    (21.0)                      5.0            
    Finance  costs                                                                                                                          
      paid                            (2.8)                    (2.5)                    (3.3)                    (4.8)          
                                  ---------            ---------            ---------            ---------          
Non-IFRS  free                                                                                                                              
  cash  flow  (3)      $        2.4              $    (23.8)            $      24.4              $    (58.6)          
                                  =========            =========            =========            =========          
                                                                                                                                                        
Non-IFRS  ROIC  %                                                                                                                          
  (4)                                  19.6%                    20.9%                    18.2%                    19.3%          
                                                                                                                                                        
 
 
          The  calculation  of  our  weighted  average  number  of  shares  (used  to            
          determine  our  IFRS  EPS  and  non-IFRS  adjusted  EPS)  for  the  second              
          quarter  and  first  half  of  2016  reflected  the  full  impact  of  the                
          reduction  in  our  subordinate  voting  shares  as  a  result  of  our  share        
          repurchases  and  cancellations  in  2015  pursuant  to  our  $350.0  million      
          substantial  issuer  bid  completed  in  June  2015,  as  well  as  our  previous  
          NCIB  that  expired  in  September  2015.  Accordingly,  the  positive  effect    
          of  reduced  weighted  average  number  of  shares  on  our  IFRS  EPS  and  non-    
          IFRS  adjusted  EPS  for  the  second  quarter  and  first  half  of  2016  was        
          greater  as  compared  to  the  prior  year  periods.                                                  
                                                                                                                                                        
(1)    Management  uses  non-IFRS  operating  earnings  (adjusted  EBIAT)  as  a            
          measure  to  assess  our  operational  performance  related  to  our  core            
          operations.  Non-IFRS  adjusted  EBIAT  is  defined  as  earnings  before            
          finance  costs  (consisting  of  interest  and  fees  related  to  our  credit      
          facility  and  accounts  receivable  sales  program),  amortization  of              
          intangible  assets  (excluding  computer  software)  and  income  taxes.  Non-  
          IFRS  adjusted  EBIAT  also  excludes,  in  periods  where  such  charges  have    
          been  recorded,  employee  stock-based  compensation  expense,  restructuring
          and  other  charges  (net  of  recoveries),  gains  or  losses  related  to  the    
          repurchase  of  our  securities,  and  impairment  charges.                                    
                                                                                                                                                        
(2)    The  adjustments  for  taxes,  as  applicable,  represent  the  tax  effects  on  
          the  non-IFRS  adjustments  and  significant  deferred  tax  write-offs  or        
          recoveries  associated  with  restructuring  actions  or  restructured  sites  
          that  management  considers  not  to  be  reflective  of  our  core  operating      
          performance.                                                                                                                      
                                                                                                                                                        
(3)    Management  uses  non-IFRS  free  cash  flow  as  a  measure,  in  addition  to      
          IFRS  cash  flow  provided  by  (used  in)  operations,  to  assess  our                  
          operational  cash  flow  performance.  We  believe  non-IFRS  free  cash  flow    
          provides  another  level  of  transparency  to  our  liquidity.  Non-IFRS  free  
          cash  flow  is  defined  as  cash  provided  by  (used  in)  operations  after  the
          purchase  of  property,  plant  and  equipment  (net  of  proceeds  from  the        
          sale  of  certain  surplus  equipment  and  property),  finance  lease                  
          payments,  advances  to  (or  repayments  from)  a  solar  supplier,  and              
          finance  costs  paid.  Note  that  non-IFRS  free  cash  flow,  however,  does      
          not  represent  residual  cash  flow  available  to  Celestica  for                        
          discretionary  expenditures.                                                                                        
                                                                                                                                                        
(4)    Management  uses  non-IFRS  ROIC  as  a  measure  to  assess  the  effectiveness  
          of  the  invested  capital  we  use  to  build  products  or  provide  services  to
          our  customers,  by  quantifying  how  well  we  generate  earnings  relative  to
          the  capital  we  have  invested  in  our  business.  Our  non-IFRS  ROIC  measure
          reflects  non-IFRS  operating  earnings,  working  capital  management  and      
          asset  utilization.  Non-IFRS  ROIC  is  calculated  by  dividing  non-IFRS        
          adjusted  EBIAT  by  average  net  invested  capital.  Net  invested  capital      
          (calculated  in  the  table  below)  consists  of  the  following  IFRS                  
          measures:  total  assets  less  cash,  accounts  payable,  accrued  and  other    
          current  liabilities  and  provisions,  and  income  taxes  payable.  We  use  a  
          two-point  average  to  calculate  average  net  invested  capital  for  the        
          quarter  and  a  three-point  average  to  calculate  average  net  invested        
          capital  for  the  six-month  period.  Management  believes  there  is  no            
          comparable  measure  under  IFRS.                                                                                  
 

The following table sets forth, for the periods indicated, our calculation of non-IFRS ROIC % (in millions, except ROIC %):

 
 
 
                                                                                                                                                        
                                          Three  months  ended  June  30      Six  months  ended  June  30    
                                          ---------------------------  ---------------------------
                                                  2015                    2016                    2015                    2016          
                                          -------------  -------------  -------------  -------------
                                                                                                                                                        
Non-IFRS  operating                                                                                                                    
  earnings  (adjusted                                                                                                                  
  EBIAT)                            $              48.3    $              57.1    $              88.8    $            101.1  
Multiplier                                            4                          4                          2                          2  
                                          -------------  -------------  -------------  -------------
Annualized  non-IFRS                                                                                                                  
  adjusted  EBIAT            $            193.2    $            228.4    $            177.6    $            202.2  
                                          -------------  -------------  -------------  -------------
                                                                                                                                                        
Average  net  invested                                                                                                                
  capital  for  the                                                                                                                        
  period                            $            985.5    $        1,090.7    $            978.4    $        1,047.9  
                                                                                                                                                        
Non-IFRS  ROIC  %  (1)                    19.6%                  20.9%                  18.2%                  19.3%
                                                                                                                                                        
                                                                        December  31        March  31              June  30      
                                                                              2015                    2016                    2016          
                                                                      -------------  -------------  -------------
Net  invested  capital                                                                                                                
  consists  of:                                                                                                                              
Total  assets                                              $        2,612.0    $        2,621.9    $        2,720.1  
Less:  cash                                                                545.3                  511.5                  472.9  
Less:  accounts                                                                                                                            
  payable,  accrued                                                                                                                      
  and  other  current                                                                                                                    
  liabilities,                                                                                                                              
  provisions  and                                                                                                                          
  income  taxes                                                                                                                              
  payable                                                                1,104.3              1,053.8              1,122.5  
                                                                      -------------  -------------  -------------
Net  invested  capital                                                                                                                
  at  period  end  (1)                                  $            962.4    $        1,056.6    $        1,124.7  
                                                                      =============  =============  =============
                                                                                                                                                        
                                                                        December  31        March  31              June  30      
                                                                              2014                    2015                    2015          
                                                                      -------------  -------------  -------------
Net  invested  capital                                                                                                                
  consists  of:                                                                                                                              
Total  assets                                              $        2,583.6    $        2,579.3    $        2,624.7  
Less:  cash                                                                565.0                  569.2                  496.8  
Less:  accounts                                                                                                                            
  payable,  accrued                                                                                                                      
  and  other  current                                                                                                                    
  liabilities,                                                                                                                              
  provisions  and                                                                                                                          
  income  taxes                                                                                                                              
  payable                                                                1,054.3              1,044.8              1,122.3  
                                                                      -------------  -------------  -------------
Net  invested  capital                                                                                                                
  at  period  end  (1)                                  $            964.3    $            965.3    $        1,005.6  
                                                                      =============  =============  =============
                                                                                                                                                        
 
 
(1)    Management  uses  non-IFRS  ROIC  as  a  measure  to  assess  the  effectiveness  
          of  the  invested  capital  we  use  to  build  products  or  provide  services  to
          our  customers,  by  quantifying  how  well  we  generate  earnings  relative  to
          the  capital  we  have  invested  in  our  business.  Our  non-IFRS  ROIC  measure
          reflects  non-IFRS  operating  earnings,  working  capital  management  and      
          asset  utilization.  Non-IFRS  ROIC  is  calculated  by  dividing  non-IFRS        
          adjusted  EBIAT  by  average  net  invested  capital.  Net  invested  capital      
          consists  of  the  following  IFRS  measures:  total  assets  less  cash,              
          accounts  payable,  accrued  and  other  current  liabilities  and  provisions,
          and  income  taxes  payable.  We  use  a  two-point  average  to  calculate            
          average  net  invested  capital  for  the  quarter  and  a  three-point  average  
          to  calculate  average  net  invested  capital  for  the  six-month  period.        
          Management  believes  there  is  no  comparable  measure  under  IFRS.                  
                                                                                                                                                        
 
 
                                                                                                                                                        
GUIDANCE  SUMMARY                                                                                                                        
                                                Q2  2016  Guidance  Q2  2016  Actual  Q3  2016  Guidance  (2)
                                                ----------------------------------------------------
IFRS  revenue  (in                                                                                                                        
  billions)                                $1.4  to  $1.5                $1.49              $1.475  to  $1.575    
Non-IFRS  adjusted  EPS                                                                                                              
  (diluted)  (1)                      $0.25  to  $0.31              $0.29                $0.27  to  $0.33      
                                                                                                                                                        
 
 
                                                                                                                                                        
(1)  Non-IFRS  adjusted  EPS  (diluted)  for  the  second  quarter  of  2016  was            
negatively  impacted  by  a  $0.02  per  share  net  income  tax  expense  related  to    
the  unfavorable  impact  of  taxable  foreign  exchange  related  to  the  weakening  
of  the  Malaysian  ringgit  and  Chinese  renminbi.  Our  guidance  for  this  measure
for  the  second  quarter  of  2016  excluded  the  potential  impact  of  taxable          
foreign  exchange.                                                                                                                      
                                                                                                                                                        
(2)  For  the  third  quarter  of  2016,  we  anticipate  a  negative  $0.07  to  $0.12    
per  share  (pre-tax)  aggregate  impact  on  net  earnings  on  an  IFRS  basis  for      
employee  stock-based  compensation  expense,  amortization  of  intangible  assets
(excluding  computer  software)  and  restructuring  charges.  We  cannot  predict    
changes  in  currency  exchange  rates,  the  impact  of  such  changes  on  our              
operating  results,  or  the  degree  to  which  we  will  be  able  to  manage  such        
impacts.  For  the  third  quarter  of  2016,  we  also  anticipate  our  non-IFRS          
operating  margin  to  be  3.6%  at  the  mid-point  of  our  expectations.                      
                                                                                                                                                        
 
 
                                                                                                                                                        
                                                              CELESTICA  INC.                                                              
                                                                                                                                                        
                                        CONDENSED  CONSOLIDATED  BALANCE  SHEET                                        
                                              (in  millions  of  U.S.  dollars)                                                
                                                                (unaudited)                                                                  
                                                                                                                                                        
                                                                                                December  31            June  30        
                                                                                                        2015                      2016          
                                                                                              --------------  --------------
Assets                                                                                                                                            
Current  assets:                                                                                                                          
    Cash  and  cash  equivalents  (note  11)                    $              545.3    $              472.9  
    Accounts  receivable  (note  5)                                                  681.0                    741.7  
    Inventories  (note  6)                                                                  794.6                    905.6  
    Income  taxes  receivable                                                              10.4                      12.9  
    Assets  classified  as  held-for-sale                                        27.4                      27.4  
    Other  current  assets  (note  4)                                                  65.3                      86.3  
                                                                                              --------------  --------------
Total  current  assets                                                                  2,124.0                2,246.8  
                                                                                                                                                        
Property,  plant  and  equipment                                                    314.6                    310.2  
Goodwill                                                                                                19.5                      19.5  
Intangible  assets                                                                              30.4                      27.3  
Deferred  income  taxes                                                                      40.1                      36.5  
Other  non-current  assets  (note  4)                                              83.4                      79.8  
                                                                                              --------------  --------------
Total  assets                                                                      $          2,612.0    $          2,720.1  
                                                                                              ==============  ==============
                                                                                                                                                        
Liabilities  and  Equity                                                                                                            
Current  liabilities:                                                                                                                
    Current  portion  of  borrowings  under  credit                                                                
      facility  and  finance  lease  obligations                                                                      
      (notes  4  &  7)                                                              $                29.1    $                84.1  
    Accounts  payable                                                                          801.4                    856.6  
    Accrued  and  other  current  liabilities                                257.7                    217.9  
    Income  taxes  payable                                                                    25.0                      27.9  
    Current  portion  of  provisions                                                  20.2                      20.1  
                                                                                              --------------  --------------
Total  current  liabilities                                                        1,133.4                1,206.6  
                                                                                                                                                        
Long-term  portion  of  borrowings  under  credit                                                                
  facility  and  finance  lease  obligations  (notes                                                            
  4  &  7)                                                                                                250.6                    211.7  
Pension  and  non-pension  post-employment                                                                          
  benefit  obligations                                                                        83.2                      88.2  
Provisions  and  other  non-current  liabilities                        28.0                      29.9  
Deferred  income  taxes                                                                      25.8                      21.6  
                                                                                              --------------  --------------
Total  liabilities                                                                        1,521.0                1,558.0  
                                                                                                                                                        
Equity:                                                                                                                                          
    Capital  stock  (note  8)                                                          2,093.9                2,046.6  
    Treasury  stock  (note  8)                                                            (31.4)                    (4.3)
    Contributed  surplus                                                                    846.7                    852.8  
    Deficit                                                                                      (1,785.4)            (1,723.6)
    Accumulated  other  comprehensive  loss                                  (32.8)                    (9.4)
                                                                                              --------------  --------------
Total  equity                                                                                  1,091.0                1,162.1  
                                                                                              --------------  --------------
Total  liabilities  and  equity                                      $          2,612.0    $          2,720.1  
                                                                                              ==============  ==============
                                                                                                                                                        
                                                    Contingencies  (note  12)                                                      
 

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

 
                                                                                                                                                        
                                                              CELESTICA  INC.                                                              
                                                                                                                                                        
                              CONDENSED  CONSOLIDATED  STATEMENT  OF  OPERATIONS                              
                    (in  millions  of  U.S.  dollars,  except  per  share  amounts)                      
                                                                (unaudited)                                                                  
                                                                                                                                                        
                                                                    Three  months  ended          Six  months  ended      
                                                                                June  30                              June  30              
                                                                  ---------------------  ---------------------
                                                                        2015              2016              2015              2016      
                                                                  ----------  ----------  ----------  ----------
Revenue                                                    $  1,417.3    $  1,485.5    $  2,715.8    $  2,838.8  
Cost  of  sales  (note  6)                          1,320.0        1,373.7        2,527.1        2,634.2  
                                                                  ----------  ----------  ----------  ----------
Gross  profit                                                    97.3            111.8            188.7            204.6  
Selling,  general  and                                                                                                                
  administrative  expenses  (SG&A)              50.1              54.4            105.5            106.4  
Research  and  development                              5.2                6.3              11.4              11.7  
Amortization  of  intangible                                                                                                    
  assets                                                                2.3                2.3                4.6                4.6  
Other  charges  (recoveries)  (note                                                                                        
  9)                                                                        9.3              (3.0)              9.6              (1.3)
                                                                  ----------  ----------  ----------  ----------
Earnings  from  operations                            30.4              51.8              57.6              83.2  
Finance  costs                                                    1.1                2.7                1.6                4.9  
                                                                  ----------  ----------  ----------  ----------
Earnings  before  income  taxes                    29.3              49.1              56.0              78.3  
Income  tax  expense  (recovery)                                                                                              
  (note  10):                                                                                                                                  
    Current                                                            7.7              10.0              13.1              19.0  
    Deferred                                                        (2.6)              2.9              (1.0)            (2.5)
                                                                  ----------  ----------  ----------  ----------
                                                                              5.1              12.9              12.1              16.5  
                                                                  ----------  ----------  ----------  ----------
Net  earnings  for  the  period            $        24.2    $        36.2    $        43.9    $        61.8  
                                                                  ==========  ==========  ==========  ==========
                                                                                                                                                        
Basic  earnings  per  share                  $        0.15    $        0.25    $        0.26    $        0.43  
                                                                                                                                                        
Diluted  earnings  per  share              $        0.14    $        0.25    $        0.26    $        0.43  
                                                                                                                                                        
Shares  used  in  computing  per                                                                                                
  share  amounts  (in  millions):                                                                                              
    Basic                                                            164.9            142.1            168.6            142.8  
    Diluted                                                        166.9            144.1            170.7            144.6  
                                                                                                                                                        
 

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

 
                                                                                                                                                        
                                                              CELESTICA  INC.                                                              
                                                                                                                                                        
                    CONDENSED  CONSOLIDATED  STATEMENT  OF  COMPREHENSIVE  INCOME                    
                                                (in  millions  of  U.S.  dollars)                                              
                                                                  (unaudited)                                                                
                                                                                                                                                        
                                                                        Three  months  ended        Six  months  ended    
                                                                                  June  30                              June  30            
                                                                      --------------------  --------------------
                                                                            2015            2016              2015              2016    
                                                                      ---------  ----------  ----------  ---------
Net  earnings  for  the  period                $        24.2  $        36.2    $        43.9    $        61.8
Other  comprehensive  income  (loss),                                                                                    
  net  of  tax:                                                                                                                                
    Items  that  may  be  reclassified                                                                                        
      to  net  earnings:                                                                                                                  
        Currency  translation                                                                                                        
          differences  for  foreign                                                                                                
          operations                                                    0.2              1.4              (1.8)              2.2
        Changes  from  derivatives                                                                                                
          designated  as  hedges                                5.8            (2.2)              0.3              21.2
                                                                      ---------  ----------  ----------  ---------
Total  comprehensive  income  for  the                                                                                    
  period                                                        $        30.2  $        35.4    $        42.4    $        85.2
                                                                      =========  ==========  ==========  =========
                                                                                                                                                        
 

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

 
                                                                                                                                                        
                                                              CELESTICA  INC.                                                              
                                                                                                                                                        
                      CONDENSED  CONSOLIDATED  STATEMENT  OF  CHANGES  IN  EQUITY                        
                                              (in  millions  of  U.S.  dollars)                                                
                                                                (unaudited)                                                                  
                                                                                                                                                        
                                                                                                                Accumul-                        
                                                                                                                    ated                            
                                                                                                                    other                          
                                Capital    Treasury      Contri-                            compre-                        
                                  stock          stock          buted                              hensive          Total      
                              (note  8)    (note  8)      surplus      Deficit      loss  (a)        equity    
                              ---------  ---------  ---------  ----------  ---------  ----------
Balance  --                                                                                                                                    
  January  1,                                                                                                                                  
  2015                    $2,609.5    $    (21.4)  $    677.1    $(1,845.3)  $    (25.0)  $  1,394.9  
Capital                                                                                                                                          
  transactions                                                                                                                              
  (note  8):                                                                                                                                    
  Issuance  of                                                                                                                                
    capital                                                                                                                                      
    stock                          7.4                  -            (4.8)                  -                  -                2.6  
  Repurchase  of                                                                                                                            
    capital                                                                                                                                      
    stock  for                                                                                                                                  
    cancellation      (528.2)                -          157.3                    -                  -          (370.9)
  Stock-based                                                                                                                                
    compensation                                                                                                                            
    and  other                      -            15.8              3.7                    -                  -              19.5  
Total                                                                                                                                              
  comprehensive                                                                                                                            
  income:                                                                                                                                        
  Net  earnings                                                                                                                              
    for  the                                                                                                                                      
    period                            -                  -                  -              43.9                  -              43.9  
  Other                                                                                                                                            
    comprehensive                                                                                                                            
    income                                                                                                                                    
    (loss),  net                                                                                                                              
    of  tax:                                                                                                                                      
    Currency                                                                                                                                    
      translation                                                                                                                            
      differences                                                                                                                            
      for                                                                                                                                            
      foreign                                                                                                                              
      operations                  -                  -                  -                    -            (1.8)            (1.8)
    Changes  from                                                                                                                            
      derivatives                                                                                                                            
      designated                                                                                                                              
      as  hedges                    -                  -                  -                    -              0.3                0.3  
                              ---------  ---------  ---------  ----------  ---------  ----------
Balance  --                                                                                                                                    
  June  30,  2015  $2,088.7    $      (5.6)  $    833.3    $(1,801.4)  $    (26.5)  $  1,088.5  
                              ---------  ---------  ---------  ----------  ---------  ----------
                                                                                                                                                        
Balance  --                                                                                                                                    
  January  1,                                                                                                                                  
  2016                    $2,093.9    $    (31.4)  $    846.7    $(1,785.4)  $    (32.8)  $  1,091.0  
Capital                                                                                                                                          
  transactions                                                                                                                              
  (note  8):                                                                                                                                    
  Issuance  of                                                                                                                                
    capital                                                                                                                                      
    stock                          4.8                  -            (1.8)                  -                  -                3.0  
  Repurchase  of                                                                                                                            
    capital                                                                                                                                      
    stock  for                                                                                                                                  
    cancellation        (52.1)                -            17.8                    -                  -            (34.3)
  Stock-based                                                                                                                                
    compensation                                                                                                                            
    and  other                      -            27.1            (9.9)                  -                  -              17.2  
Total                                                                                                                                              
  comprehensive                                                                                                                            
  income:                                                                                                                                        
  Net  earnings                                                                                                                              
    for  the                                                                                                                                      
    period                            -                  -                  -              61.8                  -              61.8  
  Other                                                                                                                                            
    comprehensive                                                                                                                            
    income,                                                                                                                                  
    net  of  tax:                                                                                                                              
    Currency                                                                                                                                    
      translation                                                                                                                            
      differences                                                                                                                            
      for                                                                                                                                            
      foreign                                                                                                                              
      operations                  -                  -                  -                    -              2.2                2.2  
    Changes  from                                                                                                                            
      derivatives                                                                                                                            
      designated                                                                                                                              
      as  hedges                    -                  -                  -                    -            21.2              21.2  
                              ---------  ---------  ---------  ----------  ---------  ----------
Balance  --                                                                                                                                    
  June  30,  2016  $2,046.6    $      (4.3)  $    852.8    $(1,723.6)  $      (9.4)  $  1,162.1  
                              =========  =========  =========  ==========  =========  ==========
                                                                                                                                                        
 
 
          (a)  Accumulated  other  comprehensive  loss  is  net  of  tax.                                
                                                                                                                                                        
 

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

 
                                                                                                                                                        
                                                              CELESTICA  INC.                                                              
                                                                                                                                                        
                              CONDENSED  CONSOLIDATED  STATEMENT  OF  CASH  FLOWS                              
                                              (in  millions  of  U.S.  dollars)                                                
                                                          (unaudited)                                                                        
                                                                                                                                                        
                                                                                                                                                        
                                                                    Three  months  ended          Six  months  ended      
                                                                                June  30                              June  30              
                                                                  --------------------    ---------------------
                                                                            2015              2016              2015              2016  
                                                                  ----------  ----------  ----------  ----------
Cash  provided  by  (used  in):                                                                                                  
Operating  activities:                                                                                                              
Net  earnings  for  the  period              $      24.2      $      36.2      $      43.9      $      61.8  
Adjustments  to  net  earnings  for                                                                                          
  items  not  affecting  cash:                                                                                                    
    Depreciation  and  amortization              16.9              19.0              33.5              36.8  
    Equity-settled  stock-based                                                                                                
      compensation                                                7.1                6.8              18.6              16.2  
    Other  charges                                                4.0                2.2                4.0                2.2  
    Finance  costs                                                1.1                2.7                1.6                4.9  
    Income  tax  expense                                      5.1              12.9              12.1              16.5  
Other                                                                  (3.9)              6.3              (8.6)            (1.0)
Changes  in  non-cash  working                                                                                                  
  capital  items:                                                                                                                          
    Accounts  receivable                                (25.5)          (87.3)            23.7            (60.7)
    Inventories                                                (64.2)          (49.7)          (99.1)        (111.0)
    Other  current  assets                                  1.8            (15.4)            (0.3)          (10.5)
    Accounts  payable,  accrued  and                                                                                          
      other  current  liabilities  and                                                                                        
      provisions                                                  81.9              70.5              57.8              39.3  
                                                                  ----------  ----------  ----------  ----------
Non-cash  working  capital  changes            (6.0)          (81.9)          (17.9)        (142.9)
Net  income  taxes  paid                                  (4.1)            (8.7)            (7.7)          (17.3)
                                                                  ----------  ----------  ----------  ----------
Net  cash  provided  by  (used  in)                                                                                            
  operating  activities                                  44.4              (4.5)            79.5            (22.8)
                                                                                                                                                        
Investing  activities:                                                                                                              
Purchase  of  computer  software  and                                                                                      
  property,  plant  and  equipment              (18.5)          (18.2)          (31.2)          (34.3)
Proceeds  from  sale  of  assets                      0.3                0.5                0.4                0.7  
Advances  to  solar  supplier  (note                                                                                        
  4)                                                                    (21.0)                  -            (21.0)                  -  
Repayments  from  solar  supplier                                                                                            
  (note  4)                                                                -                2.0                    -                5.0  
                                                                  ----------  ----------  ----------  ----------
Net  cash  used  in  investing                                                                                                    
  activities                                                    (39.2)          (15.7)          (51.8)          (28.6)
                                                                                                                                                        
Financing  activities:                                                                                                              
Borrowings  under  credit  facility                                                                                        
  (note  7)                                                        275.0                    -            275.0              40.0  
Repayments  under  credit  facility                                                                                        
  (note  7)                                                                -            (16.3)                  -            (22.5)
Finance  lease  payments  (note  4)                    -              (1.1)                  -              (2.4)
Issuance  of  capital  stock  (note                                                                                          
  8)                                                                        0.6                1.5                2.6                3.0  
Repurchase  of  capital  stock  for                                                                                          
  cancellation  (note  8)                            (350.4)                  -          (370.2)          (34.3)
Finance  costs  paid                                        (2.8)            (2.5)            (3.3)            (4.8)
                                                                  ----------  ----------  ----------  ----------
Net  cash  used  in  financing                                                                                                    
  activities                                                    (77.6)          (18.4)          (95.9)          (21.0)
Net  decrease  in  cash  and  cash                                                                                              
  equivalents                                                  (72.4)          (38.6)          (68.2)          (72.4)
Cash  and  cash  equivalents,                                                                                                    
  beginning  of  period                                  569.2            511.5            565.0            545.3  
                                                                  ----------  ----------  ----------  ----------
Cash  and  cash  equivalents,  end  of                                                                                      
  period                                                      $    496.8      $    472.9      $    496.8      $    472.9  
                                                                  ----------  ----------  ----------  ----------
                                                                                                                                                        
 

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements .

CELESTICA INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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