Good morning. My name is Rachel and I will be your conference operator today. At this time, I would like to welcome everyone to Jabil First Quarter Fiscal 2009 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question and answer session. (Operator instructions). Thank you. Ms. Walters, you may begin your conference.

Thank you. Welcome to our first quarter fiscal 2009 call. Joining me on the call today are President and CEO, Tim Main, and our Chief Financial Officer, Forbes Alexander. This call is being recorded and will be posted for audio playback on the Jabil website in Investors section along with today’s press release and a slide show presentation on the first quarter. You can follow our presentation with the slides that are posted on the web site, and begin with slide one now, our forward-looking statements. During this conference call, we will be making forward-looking statements, including those regarding the anticipated outlook for our business, are currently expected second quarter of fiscal 2009 net revenue and earnings results. Our long-term outlook for the company and improvements in our operational efficiency, and our financial performance. These statements and are based on current expectations, forecasts, and assumptions, involving risks and uncertainties that could cause actual outcomes and results to differ materially. An extensive list of these risks and uncertainties are identified in our annual report on form 10-K for the fiscal year ended August 31, 2008, and subsequent reports on form 10-Q and form 8-K and other securities filings. Jabil disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. I would like to turn the call now over to Tim Main.

Thanks, Beth. And as most of you know, we provided fiscal Q1 guidance in mid-September prior to the worst of the financial crisis and resulting abrupt reductions in end market demand. We don’t normally do this, but I think it would be helpful to review how we looked at our guidance then as will be instructed later on in the call when we cover our guidance for the second fiscal quarter. In September, we were looking at customer schedules, which translated to $3.85 billion in revenue for fiscal Q1. The demand behind the revenue was broad based but also included a significant ramp up production for our mobility customers. Anticipating that are schedules could be reduced if the economy worsens, we handicapped our revenue guidance by 9% at the midpoint with a commensurate reduction in earnings. The launch of the new mobility program was delayed until very late in the quarter which reduced our expected revenue another 3% overall. Therefore the total reduction from the beginning of the quarter revenue expectation was 12%. Excluding the effect of the new mobility program, the intra quarter reduction was 9%, right on our expectations. Given the rather severe reduction in orders over the course of the quarter, we’ve actually worked very hard and I think well to maintain inventory turns of eight. We are positioned to rapidly generate cash liquidity over the course of the current quarter as we collect receivables and liquidate inventory. We expect to exit fiscal Q2 with inventory turns of eight or better and with accounts receivables at normal levels. Our pace of capital expenditure will also slow as we adjust for the lower revenue levels. This should result in a cash flow of about $750 million by the end of February. These are very turbulent times and I hope the additional transparency is helpful for you understanding the dynamics of our business. Recessions are unpleasant, but we have taken a fairly hard blow and it appears very clear to me that Jabil’s weathering it very well. Now we will take a look at the detail we typically provide and then I will close with some additional commentary on our guidance and expectations.

Okay. If we could please now turn to slide two and three four for our results for the first quarter of fiscal 2009. On revenues of $3.38 billion, GAAP operating income was $77.7 million. This compares to $98.9 million GAAP operating income on revenues of $3.37 billion for the same period in the prior year. Core operating income, excluding amortization of intangibles, stock-based compensation and restructuring charges for the quarter was $101.2 million or 3% of revenue as compared to $122.1 million or 3.6% for the same period in the prior year. Core earnings per diluted share was $0.30 as compared to $0.36 for the same period in the prior year. On a year over year basis for the quarter, revenue was consistent, while core operating profits declined 17%. On a sequential basis, revenues increased by 4% but core operating income declined by 3%. Please turn to slide four now for a discussion of revenue by division and sector for the first fiscal quarter. The EMS division represented revenues of 59% or $2 billion, a decline of 6% as compared to the fourth quarter of fiscal 2008. Core operating income for the division in the quarter was 2.7% of revenue. Sector movements are as follows. Production levels in the automotive sector grew 7% versus the prior quarter, primarily reflecting seasonality across much of our customer base. Computing and storage sector decreased 5% from the quarter reflecting scheduled declines across the majority of customers in the sector. Industrial, instrumentation and medical sectors declined 4% from the current quarter, primarily reflecting clients and point of sale products. Networking sector levels of production decreased by 10% from the previous quarter. Telecommunication sector increased 4% sequentially reflecting new product ramps with new and existing customers. Taking a look at the consumers division, it represented…

Thank you, Beth. Good morning, everyone. As Beth said, I would like to review our balance sheet, and some of our ratio trends. I would ask you to turn to slide 6, 7 and 8, which I would like you to follow along with my comments. The company’s sales cycle in the quarter expanded by four days to 24 days. Days sales outstanding grew by four days to 44 days, reflecting growth in seasonal consumer sales and the new product ramps during November. Accounts payable days and inventory days were consistent with prior quarter, inventory turns remaining at eight. Cash flows used in operations was approximately $33 million in the fiscal quarter despite some net working capital expansion. Our return on invested capital, 10%, consistent with that of the prior quarter. Our cash and cash equivalents were $580 million. Our capital expenditures during the quarter were approximately $150 million. This level of expenditure primarily reflects investments in our IT infrastructure, capacity to support new programs being run in the mobility sector. Capital expenditure in the quarter were planned and permitted to support significantly higher revenue levels. Depreciation for the quarter was approximately $64 million, with EBITDA in the quarter of approximately $165 million or 4.8% of revenue. Our operating performance at the low-end of our previous guidance was a function of broad based schedule declines in the second half of the fiscal quarter, but our networking capital expanded by approximately $160 million. We were pleased with the performance given the volatile nature of the demented environment. Inventory levels remained at eight turns, a good result given when we enter the quarter with revenue forecast levels significantly higher than the end result. Accounts receivable expanded by of approximately $200 million as a result of the revenue profile within the quarter associated…

Thanks, Forbes. I will make a few closing comments regarding where we go from here. First let’s consider our guidance. We are taking an approach of fiscal Q2 similar to the approach that we took in handicapping our guidance for Q1, roughly a 9% reduction to our present schedules with customers. I don’t think we’ve hit the bottom yet, but I do believe this is reasonably conservative for several reasons. Number one, customers have already severely curtailed their demand for this period relative to 90 days ago. Two, I think it is a bit less likely we will experience abrupt intra quarter schedule reductions on the order of what we experienced in Q1. And three, the large new mobility program has ramped up well. We will not be providing any guidance beyond the second quarter, but I do think there are valid reasons to believe our earnings will improve in Q3 and Q4 from second quarter levels, and let me go through a few reasons behind the statement. Some of the severe cutbacks in Q2 will be related to balancing pipeline and inventory, but this will dissipate in the second half of the year. We have cut back our exposure to underperforming sectors and you’re seeing evidence of this as our displays and auto sectors continue to decline as a percentage of our overall business. We have new customers, new programs which will begin to contribute to our business. The pipeline of opportunities is actually very good right now. Finally in this environment, customers will favor financially strong suppliers with deep capabilities and a solid record of execution and we fit that description pretty well. Many of you will be concerned with the industry dynamics in this environment. I’m sure we will see some unsavory behavior from time to time,…

Operator, we are ready to begin the question and answer period.

(Operator instructions) Your first question comes from the line of Louis Miscioscia with Cowen & Co. Louis Miscioscia – Cowen & Co.: Okay, thank you. Hopefully, I am coming through okay. Forbes, can you walk us through I guess your thoughts about the debt coming due in 2009 and 2010, and maybe also sync that up with Tim’s opening comments about getting the cash balance back up to 750, just how you guys are going to get it back up?

Sure, yes, absolutely. So in terms of our debt profile, in 2009, we have two accounts receivable programs, I think everyone is aware of that that total right about $400 million that we have applied. Those come due in March and April respectively of 2009, so our plans are to renew those. That marketplace remains open. In fact, securtizations are getting done on a regular basis. So we feel very comfortable in that regard. With regards to the next maturity, that is in mid to late 2010 and those are senior notes we put in place in 2003, the $300 million. In terms of refinancing those, that parlays into the cash generation that we expect in the balance of this fiscal year and beyond. As we noted in our comments, we’ll exit the February quarter, this coming quarter with cash of at least $750 million, which is a nice position to have. With $800 million of available credit on our revolver, so $1.5 billion to $1.6 billion of liquidity. As we move through the balance of the year, I would expect continued cash generation both for the fiscal year somewhere in the region of $400 million to $500 million of operating cash generation. Our CapEx levels are slowing, I would estimate somewhere in the region of 200 to 225 for the year. So it is a pretty good free cash flow generation now. Like to call up the earnings, say, 300 million plus, which gives us plenty of flexibility should we decide to refinance those loans or not. So we feel pretty good about that. In terms of how we’re going to get there, well between now and the end of February, our accounts receivable will liquidate very naturally. We expect for the quarter of about $1.7 billion there. And if you look at the profile of our revenue in the first fiscal quarter, with the new product ramp, hundred percent of that revenue which came in the last two or three weeks in November. So that cash is slowing in the month of December, will continue to do so in January here, so no issues there. And inventory, as we have talked about, we have got some pretty firm plans there and some actions to reduce inventory levels and honestly it needs to be some modest reduction there, Lou, maybe a day or two, and we will see that 750 at the end of this fiscal quarter. Louis Miscioscia – Cowen & Co.: Okay great. One quick follow-up for Tim, obviously you gave us second quarter guidance, I appreciate that. I guess when you look at the rest of the year, you have said that you didn’t want to give guidance. Do you think that will hit the low point in the first quarter just from a revenue standpoint, or do you think that it is going to be pretty choppy, possibly even to continue down on a sequential basis from a revenue standpoint?

For the balance of the year? Louis Miscioscia – Cowen & Co.: Yes.

That is pretty speculative. Right now based on our continuing softness in fiscal Q2. So if things get softer from here, I don't think we have hit the bottom yet. And as things start to bottom out, but they early spring and summer, then I think we would see some revenue growth in the back half of the from Q2 levels. Louis Miscioscia – Cowen & Co.: Okay, thank you.

Yes.

Your next question comes from the line of Brian Alexander with Raymond James. Brian Alexander – Raymond James: Thanks. Tim, with displays becoming a much lower percentage of your business, and that having been a significant drag on profitability in the consumers space, and with mobility gaining momentum, do think the consumer segment will be profitable in the second quarter and for the rest of the fiscal year?

Yes, I think it will be. I don't think we have provided any guidance for divisional profitability, but yes, peripheral segment tends to be, or peripheral sector, excuse me, tends to be a lower margin, operating margin business but a very good return on invested capital business. Mobility is a mix of assembly services and mechanic services that the mechanic side are higher margin and the assembly side is higher margins, but again accretive returns on invested capital. The displays, it’s it's been a drag on, it is a primary drag on earnings in the division, and we think what we are doing there to rationalize operations. We may still continue to build TV sets, but it will be a smaller part of our business and tuned to economic performance as opposed to strategic penetration of the space. And so, yes, I think for the year, it will be a profitable business for us. With Q1, it was actually an accretive division because our overall corporate margins and I think it certainly has the opportunity to do that for the year, but let’s see how the rest of the year goes. Brian Alexander – Raymond James: Right. And then just, Forbes, a follow up. I don't know if you touched on this earlier, but do any of the loan agreements that you have total network covenants that could be affected by goodwill impairments charge?

(inaudible) no.

We have one covenant, right?

Yes, that is true. In terms of the covenants that we have (inaudible) on our revolver, and the key covenant there is the debt to EBITDA ratio of 3.5 times, which we are certainly well under three and are in good shape here. So goodwill impairment would have no impact on any of our debt structure whatsoever. Brian Alexander – Raymond James: Great. Thank you very much.

Sure.

Your next question comes from the line of Steven Fox with Merrill Lynch. Steven Fox – Merrill Lynch: Hi, good morning. Can you hear me?:

Yes. Steven Fox – Merrill Lynch: Hi. A couple of questions. First of all, in terms of outsourcing trends, I think you mentioned that Nokia was pulling some business back in house. Can you talk about quantifying how much of that you saw across your customer base and how many more quarters of that do you think you are going to see where customers are more focused on pulling stuff in house before they look at reducing cost by outsourcing?

It is very, very isolated and very counter to long-term, short-term and in my opinion rational trends. So isolated case, I know two customers that have done that. In both cases, it’s generally relatively marginal business and business that we tend not to put a great deal of emphasis on anyways, because we hate being in a position where we are competing with our customers’ internal capacity. So we try and avoid that as much as we can here and there we ride into it. It is typical though to begin a recession like this, again it is an aberration, but several customers might be a little bit conflicted about the manufacturing strategy to pull a couple of things inside. That will be overwhelmed by the number of customers that will engage in do outsourcing initiatives and eventually these customers that end up pulling production back inside will have increasing difficulties justifying their manufacturing investments. So we are saying we haven't quantified in the call but I'd say in terms of just kind of organic business opportunity, we're looking at $2 billion, $2.5 billion of pipeline of opportunity which is actually really good. And a pretty good percentage of that are vertically integrated OEMs looking to move into the outsourcing space and taking this opportunity in terms of slower economic activity to do what they may have plans for long time to take the opportunity, take a rationalization charge on their site, just on their factories and move their production into more efficient manufacturing like Jabil. So I think that will be, Steve, I think that will be a very pronounced trend, particularly as we get into later into fiscal 2009. So around mid 2009 I think you will see a great deal of activity that will overwhelm the isolated instances where an OEM is has points up in sight. Steven Fox – Merrill Lynch: That's very helpful. And then just looking at the businesses that have been giving trouble or the segments, the auto and display, as you sort of rationalize down and focus a little bit more on profits there, obviously it is a drag this quarter. Are those businesses still a drag next quarter incrementally, or as you go quarter to quarter, do they actually help profits, by some of the actions you are taking?

It is still dilutive, so we are still struggling with profitability there a little bit, but certainly a much smaller problem than it was a year ago. You know unfortunately in this environment, it doesn't show up as well because of the reduction in trajectory here, but we will probably get whatever is left in a profitable footing by the back half of the year. Steven Fox – Merrill Lynch: Great, thank you.

Okay.

Your next question comes from the line of Sherri Scribner with Deutsche Bank. Sherri Scribner – Deutsche Bank: Hi, thank you. Forbes, I had a quick question on CapEx and G&A. I thought that last quarter the CapEx guidance was to be for CapEx to be lower than the 115 and I know you commented a little bit about it coming down in the February quarter, but just sort of curious a little bit about that? And then also why did the G&A come down? It came down pretty significantly and what is the trend for that over fiscal 2009?

Okay. In terms of the CapEx, yes, Sherri, CapEx came in I think roundabout $20 million to $25 million, a little bit heavier than we had anticipated. And that really (inaudible) high levels of capacity we are putting in place for this ramp in mobility. We have put in additional overall capacity to support that program and that would accelerate into the quarter a little bit. That is moving very nicely. In terms of the depreciation and amortization, those levels are relatively consistent. Our depreciation are like $64 million to $65 million for the quarter and our amortization was about nine, that’s was relatively consistent, I believe. Sherri Scribner – Deutsche Bank: Okay. It just seemed like it was down about $6 million versus the last quarter?

No. On my notes here, so it's relatively consistent. I can certainly follow up with you at the office. Sherri Scribner – Deutsche Bank: Okay. Maybe I'm looking at it with the amortization or maybe without amortization?

Yes. Our intangibles was about $8 million. Sherri Scribner – Deutsche Bank: And the deprivation was $64 million?

$65 million, yes $64 million. Sherri Scribner – Deutsche Bank: Okay. That clarifies it. And then in terms of the mobility customers, I think last quarter you mentioned that you had a number of mobility customers ramping in this quarter. It seems like you are just emphasizing one significant customers that ramped later in the quarter. What happened with those other customers, did you see a nice ramp there also, and what would be your expectations as we move into the rest of fiscal 2009?

We do have multiple customers ramping new business with us. There is one in particular that is relatively large, so that is still, we are still seeing some broad-based penetration there, but there is one in particular that is quite larger than the others. Sherri Scribner – Deutsche Bank: Okay. And let me just quickly ask a question on the accounts receivable. Obviously you talked a lot about it and it picked up and it impacted your cash levels. How much of that accounts receivable would you feel is at risk, is sort of longer dated accounts receivable or do you feel like all of that is finding you are comfortable with that, you made some comments that you felt that a lot of that would turnaround in the second quarter and you get the cash from that?

No, Sherri, I am very comfortable. And the quality of our potential receivables is very good and our customers pay us on time and we are pretty vigilant about that. So I feel very, very good. Clearly the profile of the revenue in the quarter and we typically see seasonal expansion here in this particular quarter of somewhere in the two to three days generally. Some of our customers in the space hopefully have longer-term than perhaps in the EMS division for example. So with the growth in consumer, this is not unusual. It may be one to two days unusual, which is $50 million to $60 million, not primarily a run back that’s the new products that ramped in November. Sherri Scribner – Deutsche Bank: Okay. Great, thank you very much.

Thank you.

Your next question comes from the line of Ryan Jones with RBC Capital Markets. Ryan Jones – RBC Capital Markets:

That was a general phase and I can't really provide any color on customers we're talking to, but the dynamic in this type of environment generally is for the customer base to look to consolidate their vendor base. The kind of severe environment that we are in will really I think impair some of the more thinly capitalized and less financially stable players in our business. That may contribute to some market opportunities for Jabil and so we will have more color as we move through but that’s a general statement, not about specific customers. Ryan Jones – RBC Capital Markets: All right. And then just one last question is, if you work to restore the cash balance to $750 million, would Jabil consider reducing its dividend?

We don't see any need to do that at this point. We have ample cash flow even in this severe environment. Our operating cash flow will be more than sufficient to continue to support our dividend. Ryan Jones – RBC Capital Markets: All right. Thank you.

Your next question comes from the line of Shawn Harrison with Longbow Research. Shawn Harrison – Longbow Research: Hi, good morning. A few questions. Just looking at the automotive and the displays business, is there a revenue run rate that we should think of when getting back to a level of breakeven or profitability, kind of getting to that number, is it facility closures involved, or is there just kind of pruning the mix of products you are involved with?

Yes, I think as we look forward, the two sectors combined will be 5% to 7%. So I don't think it's actually going to be a topic in the back half of the year simply because it will be down to a level or improving to a point where it will be profitable or it would be noise level. And at this point – I mean things can change, but at this point, we don't see any large-scale facility closures due to the de-emphasis in the auto and the display space. Shawn Harrison – Longbow Research: Okay. Secondly just on the gross margin profile this quarter, it looks like it is holding up relatively well, especially given the down forecast in sales. Is a lot of that just driven by the continued ramp of some of those higher margin handset business?

Yes. We're also seeing – we are seeing that certainly, but also in terms of cost base as we move forward here. We do have some impact as we’ve undertaken rationalization over the last year or two. So it is holding up pretty well. We will have continued focus also to render SG&A which has been relatively consistent over the last few quarters and look forward to that going forward. So certainly the ramping business helps in that regard, and that should continue to hold as we go forward. Shawn Harrison – Longbow Research: Okay. And one final question, if you look at in terms of customer orders, what are you seeing in terms of say, maybe inventory corrections coming with those orders in terms of excess inventory at the OEM level versus actual underlying demand, if you can kind of without what your are seeing in terms of your customer orders?

I don't know how to – I'm not sure how to handicap that at this point in a clean top-level way. I think if you have looked at the cumulative revenue between the beginning of the fiscal year and where it'll be kind of halfway through the year from original expectations, we're probably down about 25%, 20% to 25%. I certainly think there is a significant level of inventory adjustment and pipeline management on the part of our customers in order for them to participate their inventories levels in fiscal Q2. Again I think that activity will dissipate a little bit as we get into Q3, Q4, and we will have some seasonal recovery as well. So I would expect that to be less a factor, and I think it's a little bit instructive, if I could spend a minute talking about it, this recession versus the most recent recession in 2001, 2002, going into the 2001-2002 recession, Jabil was 70% commutations based and about 70% of our production was in the United States. Since then, we’ve significantly diversified our customer base, the markets that we serve. We have moved most of our production into low-cost locations. So we are much better positioned to enjoy the benefits of diversification and less exposed to dislocating structural events that would put Jabil in an uncompetitive position. So I feel very good from the standpoint. And when we look at inventories levels, in the last recession, the commutations business which is a high margin business, we were chasing demand blindly that inventory levels were very, very fat at that point, and it took very significant effort and actually some customers that charged off billions of millions of dollars of inventory in that recession. And I feel like going into this recession that the…

Y, it has slowdown a little bit. I don't know (inaudible) it is December, it is getting close to Christmas. There are still a lot of human beings that they kind of go to sleep this time of the year, so that is why we are taking a more conservative view of the fiscal quarter even though the amount of reduction will slow down typically because after the first of the year we could see another hair cut. And I don't think that we have seen the absolute bottom yet, but it seems like the free fall that we saw in October and November is slowing down a bit. Ryan Jones – RBC Capital Markets: All right. Thanks a lot and happy holidays everybody.

Okay.

Your next question is from the line of Jim Suva with Citi. Jim Suva – Citi: Great. Thanks. Hey, Tim. On the trends, you know the phases, the insourcing from customers and then order revisions and such, and then eventually outsourcing, can you talk a little bit about, it sounds like you have one other customer in addition to Nokia that is doing some more insourcing, do expect any more? And then when we come to the point that is even more favorable for Jabil, of more outsourcing, can you talk about do you expect this round to be more asset sales or is it pure outsourcing trends? I mean in the past some of the asset sales for some of the EMS companies have not been absolutely their most glowing, can you talk a little bit about that, those phases that you see?

Sure. First of all I would say that insourcing is not a trend. There is a couple of isolated cases we have – I don’t know, 80, 90 customers, and two is not a big number. One is them has a big name, but in terms of how important those product lines are to overall profitability and the health of the company, is really not as material. And even in this environment, I would say that the real trend is that we will see – we are seeing more opportunity come towards us and more vertically integrated OEMs approaching us right now to engage in a dialogue about how to move them from their vertical assets into an outsourced model. So that trend is already started. In terms of the asset sales, I don't think you are going to see that at all. There is not a lot of assets that are attractive. Nobody needs high cost capacity. Here and there you may see an acquisition of a particular technology, a key facility, places in the world where people want to be, but that would be, I think that would be the exception more than the rule. The days of big asset sales are over. And then just kind of close that out, Jim, I said during the prepared remarks that there will be opportunities for us to grow market share, we are going to be aggressive, better consolidation is generally good for us. I think in the last recession, by my tally, we were three in one in consolidation, but we will definitely favor returns and margins. And the controlling factor would be how good is this for a business from a profitability standpoint, and if we have sacrifice some revenue to do that, we're going to sacrifice revenue. Jim Suva – Citi: Okay. And as a quick follow-up, this quarter, you some cash and inventory came up in front of the quarter where we are seeing some slowdown in sales outlook. I would have expected I guess inventory to come down going into a period of sales coming down sequentially. Was it just some programming as far as the timing of the mobility or some of the customer cuts came later in the quarter, can you just kind of help us connect those two data points?

Yes, not at all. I mean you should expect to see inventory build in that quarter, particularly when you start the quarter, it is scheduled expectation of $3.85 billion and you ended $3.4 billion and a very significant program that was to launch early in the quarter didn’t launch until two or three weeks before the quarter ended. So again I feel like given the deceleration and end market demand and the position that we were in the beginning of the quarter, I think our teams did a very good job to generate eight turns, and that settled us with a huge inventory bubble. And as we move through Q2, we will look at some of the inventory that is still here. So I think with the deceleration of orders, have pulled our inventory turns consistently with previous performance. Jim Suva – Citi: Thank you very much, everyone, and happy holidays.

Okay.

Your next question comes from the line of Sean Hannan with Needham & Co. Sean Hannan – Needham & Co.: Yes, thank you. Good morning.

Good morning. Sean Hannan – Needham & Co.: So, if we look at the current environment today, and outside of some of the ramps you have in mobility, is it possible, Tim, if you can explain to us a little bit where you view your strongest opportunities based on the current business development or code activities as we look through the remainder of 2009?

Well, we have talked about mobility. We expect that to be a strong sector for this. I think there's a significant opportunity for us in computing and storage, telecommunication, and then the industrial, instrumentation and medical segments seems to be very vibrant right now, and a lot of opportunity embedded in that sector. I think we will hold our own in the other areas, but probably will function more as a result of what end market demand looks like. The sectors that I mentioned will be able to probably outgrow any expectations based on additional penetration. Sean Hannan – Needham & Co.: Okay. Thank you. And then separately, you have been in Mexico for a good period of time, you have been building some of your capability there. Is it possible if you can maybe provide us with a little bit of color in terms of where you stand with your current capabilities out of your various facilities there, and how that is – whether it is driving any increased near-shoring discussions with current customers or with prospective customers?

There's a lot more talk about that when oil was $140 a barrel. We have two last mass production sites in Mexico, one in Guadalajara and one in Chihuahua. We have I think the world's largest aftermarket services operation in Reynosa. So we're pretty mature there. The capabilities in the Chihuahua Guadalajara sites are very, very strong. They serve everything from telecommunication customers to mobility customers. And I think long-term there will be some near-shoring as you call it, it’s a great term. As people look at logistics costs, become more sophisticated in the way that we look at what the lowest total cost analysis looks like. And so I think that with the increase in costs in China, escalation of taxes and other things there, along with probably the long-term trend, logistics products will increase in spite of the short-term reduction in oil prices. That will contribute to more near-shoring, more business from Mexico, and I think generally will play into the hands of, in my opinion, will play into the hands of the service providers that had diversified global footprint, that can offer customers a richer solution and more choices in terms of their manufacturing locations.

Operator, we have time for one more question please.

Your last question comes from the line of William Stein with Credit Suisse. William Stein – Credit Suisse: Thanks. I am always last which is – I am glad to get in here. So first, I'm curious about the decline in op margin guidance for the next quarter relative to where we were this quarter. The declines have been more than I expected. Is that owing to more to the leverage, the negative leverage from revenue or mix, or are there any kind of more unusual items that are in the cost basis that would get us down to 21 next quarter?

No, nothing unusual. Historically, the decline is actually a little bit flatter, if you will. In other words, it is not a steep, the decline quarter over quarter, Q1 going to Q2, than we have seen historically. Historically, as you move out, as Jabil has seen, as we moved out of our high seasonal quarter, we are seeing – typically, we saw over the last 4, 5 years, about $0.18 on one dollar of revenue decline in operations. As we are moving into this quarter, it is certainly less than that. And again you have got a cost based around seasonal demand, that remains both muted more than previous years, the seasonal demand as we sit here and (inaudible). Obviously we do have a continuing ramp of the product in the mobility sector. So we're actually pretty pleased with that. I am pleased with it, but it is not a steep a decline as we have seen historically over the last four or five years. It is currently nothing extraordinary and we feel pretty good about it.

It is really all about the negative revenue leverage.

Yes. William Stein – Credit Suisse: That is revenue, it is not the mix? Did I get that right?

Yes. The revenue decline, yes. William Stein – Credit Suisse: Okay. Another quick one on the credit side, I think Nortel has spoken about pursuing or at least retiring council regarding a potential bankruptcy filing. Would that impact Jabil if that were to happen?

Not in any material way. William Stein – Credit Suisse: And then one more quick one on the mobility segment, that is being guided up quarter over quarter. I think normal seasonality is about 25% down in the quarter. First I am wondering if you can comment as to whether that normal seasonal view is correct, and if so, it's a pretty massive separation from normal, right? And I'm wondering if that is owing to a big ramp with the same customer that ramped in the November quarter? Is it a greater number of customers, and whether it is assembly or components or where the majority of it is, in assembly or components?

Yes, it is more traction with Jabil’s customers, but the large mobility programs we talked about clamping in fiscal Q1, which is more of a tiered level of production in fiscal Q2, and so that is really the primary driver behind the better than normal performance in that sector. William Stein – Credit Suisse: But you are down normal – down 25% normal, is that about right or am I over seeing?

No. I think the last two years have been, the last two years have been averages [ph] for different reasons. Last year it was down about that much, but that was really from an industry standpoint, Motorola really imploded. And then this year, we have the most severe recession we’ve had in a couple of decades. So I think normal patterns, if you looked at analysts that cover that space and that cover that for a long time, it is generally about 10 to 15%. As end market, that market continues, this year it will not grow, but the typical growth pattern in that space has been 8% to 10% a year and the typical seasonality has been more like 15% up. William Stein – Credit Suisse: Okay, great. Thanks very much guys.

Okay, thank you.

That concludes our call for today. Thanks everyone for joining us on today's call.

This concludes today's conference call. You may now disconnect.