Beth Walters - IR Forbes Alexander - CFO Tim Main - President, CEO

Louis Miscioscia - Cowen Steven Fox - Merrill Lynch Matt Sheerin - Thomas Weisel Partners Shawn Harrison - Longbow Research Brian White - Jefferies Kevin Kessel - Bear Stearns Amit Daryanani - RBC Capital Markets Long Jiang - UBS Thomas Dinges – JP Morgan Jeff Walkenhorst - Banc of America

I would like to welcome everyone to the Jabil fourth quarter and fiscal year 2007 conference call. (Operator Instructions) I would now like to turn the conference over to Ms. Beth Walters, Vice President of Investor Relations and Communications. Please go ahead. Beth Walters: Thank you. Welcome to our fourth quarter and fiscal year 2007 call. Joining me on the call today are President and CEO Tim Main and Chief Financial Officer Forbes Alexander. The call is being recorded, and will be posted for audio playback on the Jabil website in the investor section, along with today's press release and the slideshow presentation on the fourth quarter and fiscal year results. You can follow our presentation with the slides that are posted on the website and began with slide 1 now, our forward-looking statement. During this conference call, we will be making forward-looking statements, including those regarding the anticipated outlook for our business, our currently expected first quarter fiscal year 2008 net revenue and earnings results, our long-term outlook for the company and improvements in our operational efficiency and in our financial performance. The statements are based on current expectations, forecasts and assumptions involving risks and uncertainties that could cause actual outcomes and results to differ materially. These risks and uncertainties include, but are not limited to, the Securities and Exchange Commission having views different from ours on the results of the review of our past stock option grants, conducted by a special committee of our board and governmental authorities; and the review of our historical recognition of our revenue by our audit committee; the impacts of the restatement of our financial statements and any other actions that may be taken or required as a result of any such reviews; risks and costs inherent in litigation, including any pending or…

Your first question comes from Louis Miscioscia - Cowen. Louis Miscioscia - Cowen: Tim, can you talk a little bit more about Taiwan Green Point and how things are going there? I apologize if you had that in your remarks; I was unfortunately getting on the call a little bit late. Tim Main: We didn't address Taiwan Green Point specifically and we don't intend to break them out going forward. They are part of the Consumer Division and more narrowly, part of the mobility and displays sector within Consumer. Having said that, they are on plan, doing well. I did make some comments that we have relationships now with most of the major device manufacturers in mobility, and that Green Point is a cornerstone element of our value proposition in that area. Our major thrust in fiscal 2008 will be leveraging Green Point's technology and capability into bigger, broader relationships with those device OEMs. We feel like we're on a very supportable path to do that. We did mention that in the mobility area, we would expect the benefits of leveraging that technology and expanding relationships to contribute to year-over-year top line growth in late fiscal 2008 and then, more appreciably, in fiscal 2009.

Your next question comes from Steven Fox - Merrill Lynch. Steven Fox - Merrill Lynch: On the consumer business, you mentioned some areas that you need to focus on and need to evolve in. I was wondering if you could talk about what areas are most challenging, whether it's the vertical integration, pricing discipline? Where do you think you're furthest along, and what should we see as the most improved area during the course of this fiscal year? Tim Main: I think it's really now a function of primarily resuming growth and continuing to execute on the key areas that we talked about: pricing discipline, moving to a full product orientation throughout the Consumer Electronics Division, which will include displays as well as mobility. We do expect to see pretty significant growth in displays, even in fiscal 2008. In the mobility area, as we move to a more integrated model, ramping and scaling the facilities that we have established in places like China, the Ukraine and India. Steven Fox - Merrill Lynch: Forbes on the tax number, non-GAAP, I came out with about $20 million in book taxes. Is that the right number for the quarter? Can you just review what happened, what was the true-up that went on again? Forbes Alexander: Yes. The actual tax number for the quarter, if we're talking about core, was actually about $18 million, 22% in the quarter. As you are aware, we book our taxes on an annualized approach, and I think there's a couple of million there just in true-up as we have seen income come in from higher tax jurisdictions. Now, as you are aware, we've got many geographies with tax holidays and we are not always perfect with a predictive index as to where exactly that income is going to fall through from. So that's really the impact there. As we look into fiscal 2008, I would use an 18% tax rate, based upon the profile of the income stream that we see.

Your next question comes from Matt Sheerin - Thomas Weisel Partners. Matt Sheerin - Thomas Weisel Partners: Now that you're breaking out your businesses into three segments, can you give us an idea of profitability levels for each segment and return metrics, and what your short and long-term goals are for each division? Forbes Alexander: We don't plan, certainly at this stage, to go into that level of detail. Our overall goal is to continue to grow our operating income margin from 3.3% this fiscal quarter and continue a step function to return our overall profitability to our longer-term goals. You see that being a step function as we move through fiscal 2008, and we're going to continue to strive towards that and look towards a number of key drivers in our business, predominantly adding revenue as we move through the fiscal year, continuing with our restructuring plans and, frankly, some continued focus on our operating expenses in terms of SG&A. So clearly, our divisional heads have metrics and targets placed upon them, but overall we're looking to drive the corporation step function forward to our longer-term targeted goals. Matt Sheerin - Thomas Weisel Partners: Just another question on the mobility and consumer business. It sounds like you're really looking to leverage Taiwan Green Point to get some bigger contracts with some other large handset customers out there. What does the pipeline look like? Are you close to signing any big deals there? Tim Main: We looked at the fiscal year having growth in the back half of the year; let's say, late in fiscal 2008. I prefer to just leave it at that. We have major relationships, including Jabil relationships that are still critically important and still top 5 customers. So there's no reliance completely on making sure that…

Your next question comes from Shawn Harrison - Longbow Research. Shawn Harrison - Longbow Research: Just first on the margin profile, understanding that revenue growth is kind of the key to delivering further operating leverage, what other maybe headwinds are we still facing, in terms of just legal fee expectations going forward or anything else out there? Then maybe just some commentary on the timing and restructuring benefits. Do we still expect that 20 or 30 basis points to be more back-end loaded in FY 2008? Or is there a chance that maybe it can be pulled forward a little bit? Forbes Alexander: You talked about legal fees. I would expect to see legal fees starting to really tail off now. Maybe it's $1 million in the following quarter; it's that type of magnitude. So not an incredible burden in terms of the SG&A structure. With regards to restructuring activity, that's a great question. As we look at things right now, we've incurred on a US GAAP basis $119 million of those charges. I would want to point out that that's on an accrual basis. Really, what I'd encourage investors to look at it is follow the cash impact. So cash going out the door in terms of restructuring is indicative of physical change within the corporation in terms of plant closures, employees leaving the company, revenue streams transferring out of our higher-cost locations into some of our lower-cost locations. So given that and the fact that we incurred somewhere in the region of $70 million of cash, it is going to be the back half of fiscal 2008. Again, these product transfers are occurring. We've got ongoing discussions with unions and employee representatives in Western Europe, and you may see some additional restructuring charges again on a US accruals basis in the first fiscal quarter or second fiscal quarter in the magnitude of $45 million to $50 million. Again, I'd ask you to follow the cash. In summary, yes, we still continue to expect to see these benefits in the back half of fiscal 2008. Shawn Harrison - Longbow Research: The interest rate on the credit facility as well as the term loan put in place, what's the debt rate on the bridge loan? Forbes Alexander: That's LIBOR-based. I don't have that in front of me. Shawn Harrison - Longbow Research: Maybe just a better question is, should we expect any further interest expense savings as you transfer that $400 million to maybe a fixed-rate debt? Forbes Alexander: Yes, there's certainly opportunity to do that, absolutely. Again, with the cash generation that we've seen in the corporation in the last two quarters the $200 million after our CapEx and dividends, we would anticipate certainly having some higher cash balances also, which would help give the potential to drive that net interest expense down.

Your next question comes from Brian White - Jefferies. Brian White - Jefferies: Just curious, Tim, if you could comment a little bit about some of the news stories surrounding Jabil potentially acquiring assets from Nokia Siemens in Italy. Tim Main: I can confirm that there's a dialogue with Nokia Siemens Networks regarding certain operations in Italy. That's a negotiation that's in process, and we'll reserve any further comment on that until those agreements are complete. It's principally about a transfer of business though, not an acquisition of substantial brick and mortar and assets. So there's an employment base of less than 1,000 employees. During the transition period, we would lease certain operations and then move that business into our existing facilities in the Italy market. So I think that the negative comments we've heard from folks have to do with, is this another brick and mortar acquisition? That's not really the nature of the transaction. We'll have more details on that, provided that the agreements are finally completed. Brian White - Jefferies: This would be more board level or system level? Tim Main: We'll comment on that more when the deal is done. Brian White - Jefferies: It looks like the Consumer business for the November quarter, relative to historical sequential changes, looks a little soft. Is that simply because of the transition that's still ongoing or are you just seeing something in the markets? Tim Main: Which looks a little soft? Brian White - Jefferies: Consumer. I know you broke it out a little bit differently, but I still think you can compare it to historical. It looks a little softer than we have seen historically for the November quarter. I'm just curious why that might be. Tim Main: It's not really that much softer. Some years we've seen 30%, some years we've seen 20%. 15% to 20%, I think, in this environment is being reasonably conservative.

Your next question comes from Kevin Kessel - Bear Stearns. Kevin Kessel - Bear Stearns: The question actually, Tim, that I have is also related to the Consumer Division, just trying to understand it better based on some of the numbers that you guys broke down today. Nokia is about a 13% customer now, and Philips has fallen below 10%. So if I look at those two, they both appear to be down in excess of 20% year on year for you guys, yet your Consumer Division itself actually was only down 2% or so based on my numbers. So that shows maybe what you were speaking to was just the diversification. If that is the case, maybe you could describe what other areas within Consumer you guys had actually made some good traction on during the year? Tim Main: I don't know that Philips is actually down 20%. There are elements of Philips that go into other segments. It's not completely Consumer. Having said that, don't forget also, Kevin, that we have the Green Point acquisition categorized in that segment, which will increase it there. There is an impact of diversification in that segment, principally in the displays area today. We have added several important customer relationships in the displays area. It's not a big driver of revenue growth in 2007. But, again, we think that will contribute to fiscal 2008 and contribute more substantially in 2008 later in the year. Kevin Kessel - Bear Stearns: Just so I heard you correctly, did you say that Nokia you expect to be below 10% in the quarter coming up, November, as well as February? Or was it the quarter you just reported? Tim Main: The quarter we just reported, so the fourth quarter of 2007 and the first quarter of…

Your next question comes from Amit Daryanani - RBC Capital Markets. Amit Daryanani - RBC Capital Markets: Just a quick question on the margins. In the past, you have spoken about a 4% margin target. Could you just talk about what do we need to get there at this point? In the past, I think you said $3.34 billion run rate if you get to the midpoint in November, and we're still, I think, 50 basis shy of that target. So what do we need from here to get to the 4% number? Tim Main: Let's put that in some perspective. A 50 basis point change in our operating margin is around $15 million, $16 million. So we're not talking about a huge leap from where we are to where we want to be. I think also, let's think about where we've come from in 2007, so a much more material and tested revenue stream in our networking segment and some of the other segments we do business in. As we generate and manufacture more business in the industrial instrumentation medical segments, as we gain vertical integration and traction in Consumer Electronics, we're essentially increasing the amount of value add in our revenue stream. That will certainly help the margin side. Secondly, we do plan on getting additional operating expense leverage, much like we saw in the 2003 - 2006 time period when the expansion of our operating expenses and SG&A expenses were relatively flat. We fully intend to do a better job of leveraging operating expenses as we grow revenue, particularly in the back half of fiscal 2008. Then we'll get better capacity utilization. Forbes mentioned we spent approximately $90 million in capital expenditures. We're building facilities because we anticipate growth in, certainly, the back half of 2008. As…

Your next question comes from Long Jiang - UBS. Long Jiang - UBS: Good afternoon. I was late to the call, so I apologize if you already addressed it. Did you talk about the foreign exchange impact for the quarter in terms of revenue and operating income? Forbes Alexander: We did not specifically discuss that. However, we're not seeing a very large material impact in terms of foreign exchanges, though certainly, we have a broad-based revenue stream across the world, with various dollar purchases, yen purchases, even based in European markets and such. So we don't see significant impacts on our revenue stream or income stream as a result of that. We're pretty well-hedged and risk-averse, if you will. Long Jiang - UBS: Basically, no meaningful impact to the top line operating profit? Forbes Alexander: That's correct. Long Jiang - UBS: A question related to the consumer segment. You are guiding flat for fiscal 2008. Now, to what degree do you assume vertical integration with TGP products in guiding flat consumer revenue for fiscal 2008? Tim Main: As we've said, any revenue contribution from Green Point operations are included in our consumer segment. Long Jiang - UBS: Yes, I understand. But if you increase vertical integration, some of their products may not reflected in external sales, right? If you do more consulting with TGP? Tim Main: Are you saying, if we substituted Green Point plastics for externally secured plastics, that would not increase the revenue stream? I had a hard time understanding what you're really asking. Long Jiang - UBS: If TGP increased production, some of the increased production, if used internally with your EMS side of the business, that could impact the extent of sales, but it could benefit margins, right? Tim Main: Yes. Long Jiang - UBS: So…

Your next question comes from Thomas Dinges – JP Morgan. Thomas Dinges - JP Morgan: To segue off one of the things you said there Tim, with the relentless pursuit that Forbes has on ROIC and cash flow and so forth, can you talk a bit in general terms about the build rate of new capacity that you guys are undergoing? Is next quarter maybe a bit of the peak of that? Because a couple quarters in a row, you guys have obviously come in either at the high end or higher than where you thought you would be on new capacity. You talked about a couple of sites there. Especially in the context of what you guys are seeing for new opportunities for the year, it would help if you can walk through your assumptions on where you stand in that. Tim Main: I think Forbes has been making the rounds and picking up people's credit cards and counseling their lines of credit. But to be directly responsive to your question, I think from a facility expansion standpoint, yes, that tends to be very, very lumpy. It's a stair step function, classic stair step function, whereas the internal machinery and equipment that will go into the facilities can come, matched with the revenue stream on a much closer basis. So we did have a pretty significant build out in terms of facility expansion, and we will have an opportunity to slow that part of our CapEx stream down when they are complete, after the end of the first quarter. Thomas Dinges - JP Morgan: The quick follow-up is just last quarter you mentioned, I think it was, four to five different sectors where you guys were anticipating some ramps of some nice programs. Some of those look like they…

Your next question comes from Jeff Walkenhorst - Banc of America. Jeff Walkenhorst - Banc of America: Could you talk a little bit more about the communications equipment sector? It seems like you came in slightly better on the top line overall than the $3 billion guidance. It looks like maybe some of that upside came on the com side. It seems like networking, you guided for that to be consistent and telecom, you actually guided that to be down 10%, but that was actually slightly higher, in our numbers. Was there anything in the revenue, maybe on the networking side from Cisco, that was more materials-related that you weren't expecting, that helped create the upside? Or talk on that and the overall headline growth rates for the full company for the full year at 20% looks great. But, of course, if you look at it on an organic basis, it's a little bit less than half of that, by my numbers. So the last question related to that is, I think earlier in the call you did say you are not providing fiscal-year guidance for 2008, but you do expect that your long-term target of 20% type growth is what you're shooting for. Is that the case? Tim Main: On your first question regarding the communications segment, networking and telecommunications both came in above original expectations and guidance. Spending in those areas has been pretty good, and it's kind of an iffy end market environment right now. But those two areas seem to be relatively strong. So I think we are expanding our services in those areas, if you speak of communications to encompass networking and the telecommunications side. We're expanding services. We're winning market share. I also talked about the potential they had, a couple of relationships in…