##### 









UNITED STATES SECURITIES AND EXCHANGE COMMISSION


Washington, DC 20549


Form 10-K


|  |  |                                                                                         
|- |  | ----------------------------------------------------------------------------------------
|þ |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934
| 
|  |  | For The Fiscal Year Ended December 31, 2004                                             

Commission File No. 0-4466


Artesyn Technologies, Inc.


(Exact name of Registrant as specified in its charter)


|                                                                                            |  |                                         
|------------------------------------------------------------------------------------------- |  | ----------------------------------------
|Florida                                                                                     |  | 59-1205269                              
|(State or other jurisdiction of
    incorporation)                                          |  | (I.R.S. Employer
    Identification No.)
|                                                                                           
|7900 Glades Road,
    Suite 500,
    Boca Raton, FL(Address of principal executive offices) |  | 33434-4105(Zip Code)                    

(561) 451-1000


(Registrants telephone number, including area code)


Securities registered pursuant to Section 12(b) of the
Act:


None


Securities registered pursuant to Section 12(g) of the
Act:


Common Stock, $0.01 par value


Common Stock Purchase Rights


(Title of each class)


þ o


þ


þ o






DOCUMENTS INCORPORATED BY REFERENCE












---



##### 



This Form 10-K may contain forward-looking
statements within the meaning of the Private Securities
Litigation Reform Act of 1995 that involve risks and
uncertainties. We caution readers that a number of important
factors, including those identified in the section entitled
Risk Factors that May Affect Future Results as well
as factors discussed in our other reports filed with the
Securities and Exchange Commission, could affect our actual
results and cause them to differ materially from those expressed
in the forward-looking statements. Forward-looking statements
typically use words or phrases such as estimate,
plans, projects,
anticipates, continuing,
ongoing, expects, believes,
or words of similar import. Forward-looking statements included
in this Form 10-K are made only as of the date hereof,
based on information available as of the date hereof, and
subject to applicable law to the contrary, we assume no
obligation to update any forward-looking statements.


PART I




|        |         
|------- | --------
|Item 1. | Business

Overview






Strategic Direction:
Empowering Communications




Focus on faster growth markets within the communications
industry.


Increase market share with existing customers and grow
emerging customer base.


1



---



##### 





Expand product offerings to high growth segments.


Invest in technology to create new leading-edge solutions for
customers and to expand our product lines. tm tm


Leverage manufacturing and operating infrastructure to
support growth.


Power Conversion




| |         
| | --------
| | Overview







2



---



##### 





| |                    
| | -------------------
| | Industry and Market











| |   |                                                                
| | - | ---------------------------------------------------------------
| |  | Lower semiconductor operating voltages;                        
|
| |  | Faster operating speeds of silicon devices;                    
|
| |  | Increasing number of voltages;                                 
|
| |  | Need for higher efficiency and efficient heat distribution; and
|
| |  | Accelerated time to market.                                    





3



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##### 







| |                      
| | ---------------------
| | Competitive Strengths



Global sales and engineering organized by customers.




Industry leading technology development.


Broad product line.


Low cost global manufacturing structure.




| |         
| | --------
| | Products



4



---



##### 









| |   |                                                                                                                                                                                                                                                                                                                                                                                           
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | AC/DC Power Supplies.These products represent
    approximately 62% of our power conversion product sales. Typical
    AC/DC power supplies include open-frame, closed-frame and
    external units, as well as a series of rack-mountable front-end
    power supplies for DPA systems. Most are advanced switch mode
    designs ranging in power from a few watts to several kilowatts.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Rectifiers were recently added to our portfolio of front-end
    power supplies. In addition to converting AC to DC, these
    products can also charge batteries and are primarily used by
    wireless infrastructure customers in base stations. Our new
    design of rectifier is more compact and efficient than the
    typical rectifier currently offered by our competitors. This
    product line of rectifiers also offers embedded and site power
    solutions to our wireless infrastructure customers.



| |   |                                                                                                                                                                                                                                                                                                                                                                                          
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | DC/DC Power Supplies.These products represent
    approximately 38% of our power conversion product sales. Each of
    our focus market sectors has incorporated the use of DPA in
    their communication systems, and to respond, we have grown our
    DC/DC product portfolio to include one of the broadest ranges of
    power conversion products available in the industry today.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | With the emergence of low-voltage, high performance silicon, the
    development of DC/DC converters has migrated toward smaller,
    highly efficient low voltage modules with higher current outputs
    and improved thermal performance. Our
    Typhoontm
    line of ultra low-profile, high power board-mounted DC/DC
    converters provide increased output power capabilities at a
    relatively low voltage, improved conversion efficiencies, and
    radical reductions in physical size from previous options.                                                                                                                                               
|
| | Our fastest growing line of DC/DC converters are non-isolated
    PoL modules, which provide power directly at the point of use or
    Point of Load. Advanced microprocessors, DSPs, FPGAs
    and memory chips require a dynamic power source that is able to
    respond to changing fluctuations in micro-seconds. In order to
    provide the low voltages, high currents and fast response time
    to attain its full potential, the PoL power converter is placed
    in close proximity to the semiconductor component. While we
    design and sell custom PoL modules, we also offer eight distinct
    product families of standard, non-isolated PoL modules.



| |                       
| | ----------------------
| | Sales and Distribution







| |   |                                                                                                                                                                                                                                                                                                            
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Enterprise Computing Group, or ECG, serves our server and
    storage customers such as Dell, EMC, Hewlett-Packard, IBM and
    Sun Microsystems, as well as our enterprise networking customers
    such as Cisco.                                                                                        
|
| |  | Communications Infrastructure Group, or CIG, addresses the needs
    of telecommunications and wireless infrastructure customers such
    as Andrew, Alcatel, Ericsson, Lucent, Motorola, Nokia, Nortel,
    Powerwave and Siemens among others.                                                           
|
| |  | Marketing and Standard Products Group, or MSP, services and
    cultivates the needs of our emerging customers through direct
    sales, manufacturers representatives and global
    distributors. MSP also designs and promotes standard and
    modified-standard products to our entire customer base.

5



---



##### 











| |              
| | -------------
| | Manufacturing







Communications Products




| |         
| | --------
| | Overview

tm




6



---



##### 





| |                    
| | -------------------
| | Industry and Market







| |   |                                                                                                                                                   
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Increased deployment of broadband access;                                                                                                         
|
| |  | Acceptance and deployment of 3G wireless infrastructure;                                                                                          
|
| |  | New equipment deployment to support the growing use of the
    Internet for voice traffic, known as Voice Over Internet
    Protocol (VoIP); and
|
| |  | Outsourcing of system designs by telecommunications and wireless
    OEMs.                                                                        



| |                      
| | ---------------------
| | Competitive Strengths



Global sales and engineering organized by customers.


Industry leading technology development using open standards.


Time to market.




| |         
| | --------
| | Products



tm tm


7



---



##### 



tm




| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Control software.Otherwise known as signaling software,
    control software is used to control telephone calls in both the
    land line and wireless networks. Industry standard names for
    this software are SS7 and SIGTRAN. This software is used for
    setting up a call, identifying a route for the call to take
    through the specific phone network and providing various
    information to the end-user, including caller ID.
|
| |  | Data software.This software is used to enable a call,
    for either voice or data, from a mobile handset to a voice
    network or to the Internet. Our customers integrate this
    software with their proprietary software to create an end
    application.                                                                                                                                                                                  

tm tm




| |                       
| | ----------------------
| | Sales and Distribution







| |              
| | -------------
| | Manufacturing



Customers




|                                             |  |      |    |  
|-------------------------------------------- |  | ---- | -- | -
|                                             |  | 2004 |   
|                                             |  |      |   
|Server and Storage                           |  |      | 43 | %
|Wireless Infrastructure                      |  |      | 27 | %
|Distribution and Other                       |  |      | 17 | %
|Enterprise Networking and Telecommunications |  |      | 13 | %



8



---



##### 





|                 |  |      |    |   |      |  |    |      |  |  |    |  
|---------------- |  | ---- | -- | - | ---- |  | -- | ---- |  |  | -- | -
|                 |  | 2004 |    |   | 2003 |  |    | 2002 | 
|                 |  |      |    |   |      |  |    |      | 
|Dell             |  |      | 13 | % |      |  | 11 | %    |  |  | 15 | %
|IBM              |  |      | 11 | % |      |  | 7  | %    |  |  | 3  | %
|Hewlett Packard  |  |      | 10 | % |      |  | 15 | %    |  |  | 17 | %
|Sun Microsystems |  |      | 8  | % |      |  | 10 | %    |  |  | 13 | %

Suppliers








Backlog




Research and Development




9



---



##### 



Intellectual Property Matters




Competition






Employees




Environmental Matters




Company Website and Access to Company Filings


www.artesyn.com


10



---



##### 





|        |           
|------- | ----------
|Item 2. | Properties



|                    |  |                                              |  |                |  |             
|------------------- |  | -------------------------------------------- |  | -------------- |  | ------------
|                    |  |                                              |  | Approximate    |  |             
|Facility            |  | Primary Activity                             |  | Square Footage |  | Owned/Leased
|                    |  |                                              |  |                |  |             
|Boca Raton, FL      |  | Corporate Headquarters                       |  | 11,100         |  | Leased      
|Eden Prairie, MN    |  | Engineering, Administration                  |  | 28,300         |  | Leased      
|Edinburgh, Scotland |  | Engineering, Administration                  |  | 6,900          |  | Leased      
|Einsiedel, Germany  |  | Manufacturing                                |  | 28,400         |  | Owned       
|Framingham, MA      |  | Engineering, Administration                  |  | 23,100         |  | Leased      
|Hong Kong, China    |  | Engineering, Administration                  |  | 144,900        |  | Owned       
|Madison, WI         |  | Manufacturing,  Administration,  Engineering |  | 45,000/11,600  |  | Owned/Leased
|Redwood Falls, MN   |  | Manufacturing, Warehouse                     |  | 117,000/45,300 |  | Owned/Leased
|Tatabanya, Hungary  |  | Manufacturing                                |  | 118,000        |  | Owned       
|Tuscon, AZ          |  | Engineering                                  |  | 4,900          |  | Leased      
|Vienna, Austria     |  | Engineering, Administration                  |  | 26,600         |  | Leased      
|Westminster, CO     |  | Engineering                                  |  | 7,000          |  | Leased      
|Youghal, Ireland    |  | Engineering                                  |  | 36,000         |  | Owned       
|Zhongshan, China    |  | Manufacturing                                |  | 800,000        |  | Leased      





|        |                  
|------- | -----------------
|Item 3. | Legal Proceedings







11



---



##### 







|        |                                                    
|------- | ---------------------------------------------------
|Item 4. | Submission of Matters to a Vote of Security Holders



PART II




|        |                                                                                                                     
|------- | --------------------------------------------------------------------------------------------------------------------
|Item 5. | Market for Registrants Common Equity, Related
    Stockholder Matters and Issuer Purchases of Equity
    Securities



| |                   
| | ------------------
| | Market Information

SM SM


|               |  |      |       |  |      |   |      |      |  |   |      |  |  |   |      | 
|-------------- |  | ---- | ----- |  | ---- | - | ---- | ---- |  | - | ---- |  |  | - | ---- | 
|               |  | 2004 |       |  | 2003 |  
|               |  |      |       |  |      |  
|Fiscal Quarter |  | High |       |  | Low  |   |      | High |  |   | Low  | 
|               |  |      |       |  |      |   |      |      |  |   |      | 
|First          |  | $    | 12.30 |  |      | $ | 8.00 |      |  | $ | 4.05 |  |  | $ | 2.60 | 
|Second         |  |      | 10.98 |  |      |   | 7.80 |      |  |   | 6.00 |  |  |   | 2.74 | 
|Third          |  |      | 10.28 |  |      |   | 7.01 |      |  |   | 9.00 |  |  |   | 5.42 | 
|Fourth         |  |      | 11.32 |  |      |   | 8.75 |      |  |   | 9.50 |  |  |   | 7.01 | 



| |          
| | ---------
| | Dividends





| |        
| | -------
| | Holders





| |                                     
| | ------------------------------------
| | Equity Compensation Plan Information



|                                                       |                          |                            |   |           |                     |  |   |                         |  |  |   |           |  
|------------------------------------------------------ | ------------------------ | -------------------------- | - | --------- | ------------------- |  | - | ----------------------- |  |  | - | --------- | -
|                                                       |                          | Number of Securities to Be |   |           | Weighted Average    |  |   | Number of Securities    | 
|                                                       |                          | Issued Upon Exercise of    |   |           | Exercise Price of   |  |   | Remaining Available for | 
|                                                       |                          | Outstanding Options        |   |           | Outstanding Options |  |   | Future Issuance         | 
|                                                       |                          |                            |   |           |                     |  |   |                         | 
|Equity Compensation Plans Not approved by stockholders |                          |                            |  |           |                     |  |  |                         |  |  |  |          
|                                                       | Approved by stockholders |                            |   | 6,851,000 |                     |  | $ | 10.85                   |  |  |   | 655,000(1 | )






|    |                                                                                                                                                                                                                                                                                              
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Under the terms of our 2000 Performance Equity Plan, we reserved
    4,400,000 shares of common stock for issuance. Additionally,
    options under our 1990 Performance Equity Plan that expire or
    terminate unexercised after the adoption of the 2000 Performance
    Equity Plan, and

12



---



##### 



| |                                                                                                                                                                  
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------
| | options under the 2000 Plan that expire or terminate
    unexercised, are available for new grants pursuant to the terms
    of the 2000 Performance Equity Plan.



|        |                               
|------- | ------------------------------
|Item 6. | Selected Financial Information



|                                              |                     |                                                               |         |      |      |   |         |       |    |   |          |       |    |      |         |       |    |   |         |      |  
|--------------------------------------------- | ------------------- | ------------------------------------------------------------- | ------- | ---- | ---- | - | ------- | ----- | -- | - | -------- | ----- | -- | ---- | ------- | ----- | -- | - | ------- | ---- | -
|As of and for the Fiscal Years                |                     | 2004                                                          |         |      | 2003 |   |         | 2002  |    |   | 2001     |       |    | 2000 |        
|                                              |                     |                                                               |         |      |      |   |         |       |    |   |          |       |    |      |        
|                                              |                     | (In thousands except per share, employee and percentage data) |        
|Results of Operations                         |                     |                                                               |         |      |      |   |         |       |    |   |          |       |    |      |         |       |    |   |         |     
|Sales                                         |                     | $                                                             | 429,389 |      |      | $ | 356,871 |       |    | $ | 350,829  |       |    | $    | 493,968 |       |    | $ | 690,083 |     
|Net income (loss)                             |                     |                                                               | 13,873  |      |      |   | (15,622 | )     |    |   | (108,822 | )     |    |      | (31,763 | )     |    |   | 43,253  |     
|                                              | Per share  basic   |                                                               |         | 0.35 |      |   |         | (0.40 | )  |   |          | (2.84 | )  |      |         | (0.83 | )  |   |         | 1.15 |  
|                                              | Per share  diluted |                                                               |         | 0.34 |      |   |         | (0.40 | )  |   |          | (2.84 | )  |      |         | (0.83 | )  |   |         | 1.10 |  
|Financial Statistics                          |                     |                                                               |         |      |      |   |         |       |    |   |          |       |    |      |         |       |    |   |         |     
|Selling, general and administrative expenses  |                     | $                                                             | 45,851  |      |      | $ | 38,898  |       |    | $ | 36,593   |       |    | $    | 54,057  |       |    | $ | 62,771  |     
|                                              |  as a % of sales   |                                                               |         | 10.7 | %    |   |         | 10.9  | %  |   |          | 10.4  | %  |      |         | 10.9  | %  |   |         | 9.1  | %
|Research and development expenses             |                     |                                                               | 41,141  |      |      |   | 34,329  |       |    |   | 34,341   |       |    |      | 41,470  |       |    |   | 44,867  |     
|                                              |  as a % of sales   |                                                               |         | 9.6  | %    |   |         | 9.6   | %  |   |          | 9.8   | %  |      |         | 8.4   | %  |   |         | 6.5  | %
|Operating income (loss)(1)                    |                     |                                                               | 22,640  |      |      |   | (9,584  | )     |    |   | (120,569 | )     |    |      | (31,945 | )     |    |   | 67,139  |     
|                                              |  as a % of sales   |                                                               |         | 5.3  | %    |   |         | (2.7  | )% |   |          | (34.4 | )% |      |         | (6.5  | )% |   |         | 9.7  | %
|Total debt as a % of total capitalization     |                     |                                                               | 40.2    | %    |      |   | 44.1    | %     |    |   | 36.0     | %     |    |      | 31.4    | %     |    |   | 22.6    | %   
|Debt to equity ratio                          |                     |                                                               | 67.2    | %    |      |   | 78.9    | %     |    |   | 56.3     | %     |    |      | 45.9    | %     |    |   | 29.2    | %   
|Financial Position                            |                     |                                                               |         |      |      |   |         |       |    |   |          |       |    |      |         |       |    |   |         |     
|Working capital                               |                     | $                                                             | 120,329 |      |      | $ | 109,519 |       |    | $ | 89,025   |       |    | $    | 152,776 |       |    | $ | 176,113 |     
|Property, plant & equipment, net              |                     |                                                               | 66,124  |      |      |   | 64,210  |       |    |   | 78,631   |       |    |      | 103,291 |       |    |   | 105,059 |     
|Total assets                                  |                     |                                                               | 341,639 |      |      |   | 316,676 |       |    |   | 303,587  |       |    |      | 426,483 |       |    |   | 497,815 |     
|Total debt, including current maturities      |                     |                                                               | 90,000  |      |      |   | 90,000  |       |    |   | 69,533   |       |    |      | 100,606 |       |    |   | 74,813  |     
|Shareholders equity                          |                     |                                                               | 133,976 |      |      |   | 114,037 |       |    |   | 123,446  |       |    |      | 219,245 |       |    |   | 256,512 |     
|Total capitalization (total debt plus equity) |                     |                                                               | 223,976 |      |      |   | 204,041 |       |    |   | 192,979  |       |    |      | 319,851 |       |    |   | 331,325 |     
|Other Data                                    |                     |                                                               |         |      |      |   |         |       |    |   |          |       |    |      |         |       |    |   |         |     
|Capital expenditures                          |                     | $                                                             | 22,140  |      |      | $ | 7,081   |       |    | $ | 5,230    |       |    | $    | 28,763  |       |    | $ | 39,256  |     
|Depreciation and amortization                 |                     |                                                               | 22,275  |      |      |   | 22,937  |       |    |   | 26,978   |       |    |      | 34,423  |       |    |   | 27,195  |     
|Common shares outstanding (000s)             |                     |                                                               | 39,305  |      |      |   | 38,755  |       |    |   | 38,389   |       |    |      | 38,253  |       |    |   | 38,282  |     
|Permanent employees                           |                     |                                                               | 1,482   |      |      |   | 1,341   |       |    |   | 2,366    |       |    |      | 2,427   |       |    |   | 5,227   |     
|Temporary employees and contractors           |                     |                                                               | 4,720   |      |      |   | 3,492   |       |    |   | 2,310    |       |    |      | 2,818   |       |    |   | 3,960   |     






|    |                                                                                 
|--- | --------------------------------------------------------------------------------
|(1) | The 2002 information includes a goodwill impairment charge of
    $51.9 million.

13



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##### 





|        |                                                                                                       
|------- | ------------------------------------------------------------------------------------------------------
|Item 7. | Managements Discussion and Analysis of Financial
    Condition and Results of Operation; Risk Factors

The following discussion should be read in conjunction with
the consolidated financial statements and related notes, as well
as the section under the heading Risk Factors that May
Affect Future Results. With the exception of historical
information, the matters discussed below may include
forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995 that involve
risks and uncertainties. Forward-looking statements typically
use words or phrases such as estimate,
plans, projects,
anticipates, continuing,
ongoing, expects, believes,
or words of similar import. We caution readers that a number of
important factors, including those identified in the section
entitled Risk Factors that May Affect Future
Results, as well as factors discussed in our other reports
filed with the Securities and Exchange Commission, could affect
our actual results and cause them to differ materially from
those expressed in the forward-looking statements.
Forward-looking statements included in this Form 10-K are
made only as of the date hereof, based on information available
as of the date hereof, and subject to applicable law to the
contrary, we assume no obligation to update any forward-looking
statements.


Introduction














14



---



##### 



2004 Overview




Maintain profitability.




Grow market share.


Enter new market segments.


Continue investments in technology.






Critical Accounting Policies




15



---



##### 





Inventories






Warranties






Goodwill






16



---



##### 







Accounting for Income Taxes










Results of Operations




| |             
| | ------------
| | Consolidated

Sales.


|                        |       |      |       |       |      |   |       |             |  |   |             |       |  |      |    |    |   |  |    |    |  
|----------------------- | ----- | ---- | ----- | ----- | ---- | - | ----- | ----------- |  | - | ----------- | ----- |  | ---- | -- | -- | - |  | -- | -- | -
|                        |       |      |       |       |      |   |       | 2004        |  |   | 2003        |      
|                        |       |      |       |       |      |   |       | Compared to |  |   | Compared to |      
|                        |       | 2004 |       |       | 2003 |   |       | 2002        |  |   | 2003        |       |  | 2002 |   
|                        |       |      |       |       |      |   |       |             |  |   |             |       |  |      |   
|Power Conversion        |       | $    | 354.6 |       |      | $ | 314.4 |             |  | $ | 318.9       |       |  |      | 13 | %  |   |  | (1 | )%
|Communications Products |       |      | 74.8  |       |      |   | 42.5  |             |  |   | 31.9        |       |  |      | 76 | %  |   |  | 33 | % 
|                        |       |      |       |       |      |   |       |             |  |   |             |       |  |      |   
|                        | Total |      | $     | 429.4 |      |   | $     | 356.9       |  |   | $           | 350.8 |  |      |    | 20 | % |  |    | 2  | %
|                        |       |      |       |       |      |   |       |             |  |   |             |       |  |      |   



17



---



##### 









Gross Profit.


|                                        |  |      |       |   |      |   |      |             |  |   |             |   |  |      |    |   |  |  |     |  
|--------------------------------------- |  | ---- | ----- | - | ---- | - | ---- | ----------- |  | - | ----------- | - |  | ---- | -- | - |  |  | --- | -
|                                        |  |      |       |   |      |   |      | 2004        |  |   | 2003        |  
|                                        |  |      |       |   |      |   |      | Compared to |  |   | Compared to |  
|                                        |  | 2004 |       |   | 2003 |   |      | 2002        |  |   | 2003        |   |  | 2002 |   
|                                        |  |      |       |   |      |   |      |             |  |   |             |   |  |      |   
|Gross profit                            |  | $    | 109.6 |   |      | $ | 69.3 |             |  | $ | 29.6        |   |  |      | 58 | % |  |  | 134 | %
|Gross profit as a percentage of revenue |  |      | 25.5  | % |      |   | 19.4 | %           |  |   | 8.4         | % |  |      |    |   |  |  |     |  







18



---



##### 



Operating Expenses.


|                                    |                          |      |      |      |      |   |      |              |  |   |      |       |  |      |    |    |      |  |    |    |   |  |    |    |  
|----------------------------------- | ------------------------ | ---- | ---- | ---- | ---- | - | ---- | ------------ |  | - | ---- | ----- |  | ---- | -- | -- | ---- |  | -- | -- | - |  | -- | -- | -
|                                    |                          |      |      |      |      |   |      | % of Revenue | 
|                                    |                          |      |      |      |      |   |      |              | 
|                                    |                          | 2004 |      |      | 2003 |   |      | 2002         |  |   | 2004 |       |  | 2003 |    |    | 2002 | 
|                                    |                          |      |      |      |      |   |      |              |  |   |      |       |  |      |    |    |      | 
|Selling, general and administrative |                          | $    | 45.9 |      |      | $ | 38.9 |              |  | $ | 36.6 |       |  |      | 11 | %  |      |  | 11 | %  |   |  | 10 | % 
|Research and development            |                          |      | 41.1 |      |      |   | 34.3 |              |  |   | 34.3 |       |  |      | 10 | %  |      |  | 10 | %  |   |  | 10 | % 
|Restructuring and related charges   |                          |      |     |      |      |   | 5.6  |              |  |   | 27.3 |       |  |      |   |    |      |  | 2  | %  |   |  | 8  | % 
|Goodwill impairment                 |                          |      |     |      |      |   |     |              |  |   | 51.9 |       |  |      |   |    |      |  |   |    |   |  | 15 | % 
|                                    |                          |      |      |      |      |   |      |              |  |   |      |       |  |      |    |    |      | 
|                                    | Total operating expenses |      | $    | 87.0 |      |   | $    | 78.8         |  |   | $    | 150.1 |  |      |    | 20 | %    |  |    | 22 | % |  |    | 43 | %
|                                    |                          |      |      |      |      |   |      |              |  |   |      |       |  |      |    |    |      | 









Restructuring and Related Charges.






Impairment of Goodwill.






19



---



##### 





Loss on Debt Extinguishment.




.


Interest Expense, net.


|                      |  |      |      |   |      |   |      |             |  |   |             |   |  |      |     |   |  |  |     |   
|--------------------- |  | ---- | ---- | - | ---- | - | ---- | ----------- |  | - | ----------- | - |  | ---- | --- | - |  |  | --- | --
|                      |  |      |      |   |      |   |      | 2004        |  |   | 2003        |  
|                      |  |      |      |   |      |   |      | Compared to |  |   | Compared to |  
|                      |  | 2004 |      |   | 2003 |   |      | 2002        |  |   | 2003        |   |  | 2002 |    
|                      |  |      |      |   |      |   |      |             |  |   |             |   |  |      |    
|Interest expense      |  | $    | 6.0  |   |      | $ | 5.0  |             |  | $ | 7.6         |   |  |      | 20  | % |  |  | (34 | )%
|Less: Interest income |  |      | (1.0 | ) |      |   | (0.5 | )           |  |   | (1.1        | ) |  |      | 100 | % |  |  | (55 | )%
|                      |  |      |      |   |      |   |      |             |  |   |             |   |  |      |    
|Net interest expense  |  | $    | 5.0  |   |      | $ | 4.5  |             |  | $ | 6.5         |   |  |      | 11  | % |  |  | (31 | )%
|                      |  |      |      |   |      |   |      |             |  |   |             |   |  |      |    





Provision (Benefit) for Income Taxes.


|                                     |  |      |     |   |      |   |      |      |  |   |       |  
|------------------------------------ |  | ---- | --- | - | ---- | - | ---- | ---- |  | - | ----- | -
|                                     |  | 2004 |     |   | 2003 |   |      | 2002 | 
|                                     |  |      |     |   |      |   |      |      | 
|Provision (benefit) for income taxes |  | $    | 3.8 |   |      | $ | (2.2 | )    |  | $ | (18.8 | )
|Effective tax rate                   |  |      | 21  | % |      |   | 12   | %    |  |   | 15    | %



20



---



##### 





Net Income (Loss).


|                                    |  |      |      |  |      |   |       |      |  |   |        |  
|----------------------------------- |  | ---- | ---- |  | ---- | - | ----- | ---- |  | - | ------ | -
|                                    |  | 2004 |      |  | 2003 |   |       | 2002 | 
|                                    |  |      |      |  |      |   |       |      | 
|Net income (loss)                   |  | $    | 13.9 |  |      | $ | (15.6 | )    |  | $ | (108.8 | )
|Net income (loss) per basic share   |  | $    | 0.35 |  |      | $ | (0.40 | )    |  | $ | (2.84  | )
|Net income (loss) per diluted share |  | $    | 0.34 |  |      | $ | (0.40 | )    |  | $ | (2.84  | )
|Basic shares outstanding            |  |      | 39.1 |  |      |   | 38.7  |      |  |   | 38.4   |  
|Diluted shares outstanding          |  |      | 51.1 |  |      |   | 38.7  |      |  |   | 38.4   |  





Power Conversion




|                        |  |      |       |  |      |   |       |             |  |   |             |   |  |      |     |   |  |  |    |   
|----------------------- |  | ---- | ----- |  | ---- | - | ----- | ----------- |  | - | ----------- | - |  | ---- | --- | - |  |  | -- | --
|                        |  |      |       |  |      |   |       | 2004        |  |   | 2003        |  
|                        |  |      |       |  |      |   |       | Compared to |  |   | Compared to |  
|                        |  | 2004 |       |  | 2003 |   |       | 2002        |  |   | 2003        |   |  | 2002 |    
|                        |  |      |       |  |      |   |       |             |  |   |             |   |  |      |    
|Revenue                 |  | $    | 354.6 |  |      | $ | 314.4 |             |  | $ | 318.9       |   |  |      | 13  | % |  |  | (1 | )%
|Operating income (loss) |  |      | 12.7  |  |      |   | (7.5  | )           |  |   | (88.1       | ) |  |      | 269 | % |  |  | 91 | % 









21



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##### 





Communications Products




|                        |  |      |      |  |      |   |      |             |  |   |             |   |  |      |     |   |  |  |     |  
|----------------------- |  | ---- | ---- |  | ---- | - | ---- | ----------- |  | - | ----------- | - |  | ---- | --- | - |  |  | --- | -
|                        |  |      |      |  |      |   |      | 2004        |  |   | 2003        |  
|                        |  |      |      |  |      |   |      | Compared to |  |   | Compared to |  
|                        |  | 2004 |      |  | 2003 |   |      | 2002        |  |   | 2003        |   |  | 2002 |    
|                        |  |      |      |  |      |   |      |             |  |   |             |   |  |      |    
|Revenue                 |  | $    | 74.8 |  |      | $ | 42.5 |             |  | $ | 31.9        |   |  |      | 76  | % |  |  | 33  | %
|Operating income (loss) |  |      | 22.3 |  |      |   | 7.3  |             |  |   | (20.9       | ) |  |      | 205 | % |  |  | 135 | %









Liquidity and Capital Resources




|                                      |                                      |                                             |      |    |      |   |      |      |     |   |      |    |      |  
|------------------------------------- | ------------------------------------ | ------------------------------------------- | ---- | -- | ---- | - | ---- | ---- | --- | - | ---- | -- | ---- | -
|                                      |                                      | 2004                                        |      |    | 2003 |   |      | 2002 |    
|                                      |                                      |                                             |      |    |      |   |      |      |    
|Cash and cash equivalents             |                                      | $                                           | 84.8 |    |      | $ | 94.2 |      |     | $ | 65.0 |   
|Short-term marketable debt securities |                                      |                                             | 21.1 |    |      |   |     |      |     |   |     |   
|Long-term debt and capital leases     |                                      |                                             |     |    |      |   |     |      |     |   | 23.0 |   
|Convertible subordinated debt         |                                      |                                             | 90.0 |    |      |   | 90.0 |      |     |   | 46.5 |   
|                                      |                                      |                                             |      |    |      |   |      |      |    
|                                      |                                      | Cash and marketable securities, net of debt |      | $  | 15.9 |   |      | $    | 4.2 |   |      | $  | (4.5 | )
|                                      |                                      |                                             |      |    |      |   |      |      |    
|Working Capital Statistics:           |                                      |                                             |      |    |      |   |      |      |     |   |      |   
|                                      | Days of sales outstanding            |                                             |      | 50 |      |   |      | 50   |     |   |      | 48 |     
|                                      | Days of inventory on-hand            |                                             |      | 55 |      |   |      | 52   |     |   |      | 71 |     
|                                      | Days of accounts payable outstanding |                                             |      | 60 |      |   |      | 57   |     |   |      | 48 |     





22



---



##### 





Cash Flows from Operating Activities.




Cash Flows from Investing Activities.






Cash Flows from Financing Activities.






23



---



##### 













24



---



##### 





|                                      |  |       |       |                        |         |   |      |           |  |   |           |  |  |           |     |  |           |   |     |          |  |   |     |  |  |   |      | 
|------------------------------------- |  | ----- | ----- | ---------------------- | ------- | - | ---- | --------- |  | - | --------- |  |  | --------- | --- |  | --------- | - | --- | -------- |  | - | --- |  |  | - | ---- | 
|                                      |  |       |       | Payments Due by Period |        
|                                      |  |       |       |                        |        
|                                      |  | Total |       |                        | <1 year |   |      | 1-2 years |  |   | 2-3 years |  |  | 3-4 years |     |  | 4-5 years |   |     | >5 years | 
|                                      |  |       |       |                        |         |   |      |           |  |   |           |  |  |           |     |  |           |   |     |          | 
|Convertible senior subordinated notes |  | $     | 90.0  |                        |         |   |     |           |  |   |          |  |  |           |    |  |           |   |    |          |  |   |    |  |  | $ | 90.0 | 
|Asset-based revolving credit facility |  |       |      |                        |         |   |     |           |  |   |          |  |  |           |    |  |           |   |    |          |  |   |    |  |  |   |     | 
|Interest payments on convertible debt |  |       | 29.7  |                        |         |   | 5.0  |           |  |   | 5.0       |  |  |           | 5.0 |  |           |   | 5.0 |          |  |   | 5.0 |  |  |   | 4.7  | 
|Operating leases                      |  |       | 15.7  |                        |         |   | 8.5  |           |  |   | 2.3       |  |  |           | 1.7 |  |           |   | 1.1 |          |  |   | 0.4 |  |  |   | 1.7  | 
|                                      |  |       |       |                        |         |   |      |           |  |   |           |  |  |           |     |  |           |   |     |          | 
|Total contractual cash obligations    |  | $     | 135.4 |                        |         | $ | 13.5 |           |  | $ | 7.3       |  |  | $         | 6.7 |  |           | $ | 6.1 |          |  | $ | 5.4 |  |  | $ | 96.4 | 
|                                      |  |       |       |                        |         |   |      |           |  |   |           |  |  |           |     |  |           |   |     |          | 

|                                      |  |       |      |                                 |         |  |   |           |  |  |           |  |  |           |   |  |           |   |      |          |  |  |   |  |  |  |   | 
|------------------------------------- |  | ----- | ---- | ------------------------------- | ------- |  | - | --------- |  |  | --------- |  |  | --------- | - |  | --------- | - | ---- | -------- |  |  | - |  |  |  | - | 
|                                      |  |       |      | Commitment Expiration by Period |        
|                                      |  |       |      |                                 |        
|                                      |  | Total |      |                                 | <1 year |  |   | 1-2 years |  |  | 2-3 years |  |  | 3-4 years |   |  | 4-5 years |   |      | >5 years | 
|                                      |  |       |      |                                 |         |  |   |           |  |  |           |  |  |           |   |  |           |   |      |          | 
|Asset-based revolving credit facility |  | $     | 35.0 |                                 |         |  |  |           |  |  |          |  |  |           |  |  |           | $ | 35.0 |          |  |  |  |  |  |  |  | 
|                                      |  |       |      |                                 |         |  |   |           |  |  |           |  |  |           |   |  |           |   |      |          | 

Risk Factors That May Affect Future Results


The following discussion should be read in conjunction with
the Consolidated Financial Statements and related notes. With
the exception of historical information, the matters discussed
below may include forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995 that involves risks and uncertainties. Forward-looking
statements typically use words or phrases such as
estimate, plans, projects,
anticipates, continuing,
ongoing, expects, believes,
or words of similar import. We caution readers that a number of
important factors, as well as factors discussed in our other
reports filed with the Securities and Exchange Commission, could
affect our actual results and cause them to differ materially
from those expressed in the forward-looking statements.
Forward-looking statements included in this form 10-K are
made only as of the date hereof, based on information available
as of the date hereof, and subject to applicable law to the
contrary, we assume no obligation to update any forward
looking-statements.




| |                                                                                                                                                                                                                            
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Our future profitability depends on our ability to
    successfully develop and market our products in a volatile,
    competitive industry characterized by rapidly changing prices,
    technologies and customer demand.



25



---



##### 





| |                                                                                        
| | ---------------------------------------------------------------------------------------
| | Price erosion due to competition could have a material
    effect on our profitability.





| |                                                                                                  
| | -------------------------------------------------------------------------------------------------
| | We face risks by having most of our manufacturing capacity
    concentrated in foreign locations.





| |                                                                                                                                                                                                                                                
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We rely on significant relationships with a small number
    of customers and the loss of any of those customers or
    significant reductions in their purchases of our products could
    adversely affect our revenue and operating results.





26



---



##### 





| |                                                                                                
| | -----------------------------------------------------------------------------------------------
| | If demand for our products were to increase, we could face
    production capacity constraints.





| |                                                                                 
| | --------------------------------------------------------------------------------
| | We face risks associated with the sale of our products in
    foreign locations.





| |                                                                                            
| | -------------------------------------------------------------------------------------------
| | Our future profitability may be adversely affected by a
    disruption in our supply chain.





| |                                                                                                        
| | -------------------------------------------------------------------------------------------------------
| | With an asset-based credit facility, we face risks
    associated with fluctuating credit availability.





| |                                                                                                        
| | -------------------------------------------------------------------------------------------------------
| | The provisions of our credit agreement could affect our
    ability to enter into certain transactions.



27



---



##### 







| |                                                                                                    
| | ---------------------------------------------------------------------------------------------------
| | Market consolidation could create companies that are
    larger and have greater resources than us.





| |                                                                                                                          
| | -------------------------------------------------------------------------------------------------------------------------
| | We face, and might in the future face, intellectual
    property infringement claims that might be costly to
    resolve.





| |                                                                                                                                                                                                           
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Our future success could depend on the protection of our
    intellectual property; costs associated with enforcing our
    intellectual property rights could adversely affect our
    operating results.



28



---



##### 





| |                                                                                               
| | ----------------------------------------------------------------------------------------------
| | Our future profitability may be adversely affected by a
    change in governmental regulation.





| |                                                                                                       
| | ------------------------------------------------------------------------------------------------------
| | We rely on certain key personnel and a loss of such
    personnel could adversely affect our business.





| |                                                                                                                                           
| | ------------------------------------------------------------------------------------------------------------------------------------------
| | Increased leverage as a result of the issuance of our
    convertible debt may harm our financial condition and results of
    operations.





| |   |                                                                                                                                                                                                           
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | a portion of our cash flow from operations will be dedicated to
    the payment of interest required with respect to outstanding
    indebtedness;                                                        
|
| |  | increases in our outstanding indebtedness and leverage will
    increase our vulnerability to adverse changes in general
    economic and industry conditions, as well as to competitive
    pressure; and
|
| |  | depending on the levels of our outstanding debt, our ability to
    obtain additional financing for working capital, capital
    expenditures and general corporate and other purposes may be
    limited.





| |   |                                                                                                                          
| | - | -------------------------------------------------------------------------------------------------------------------------
| |  | to seek additional financing in the debt or equity markets;                                                              
|
| |  | to refinance or restructure all or a portion of our
    indebtedness, including our outstanding convertible
    notes; or
|
| |  | to sell selected assets.                                                                                                 

29



---



##### 







| |                                                                                                   
| | --------------------------------------------------------------------------------------------------
| | We may not have sufficient funds to repurchase our
    convertible notes upon a change of control.





| |                                                                                                                                                
| | -----------------------------------------------------------------------------------------------------------------------------------------------
| | Our Board of Directors ability to issue preferred
    shares could deter a change in control that could be profitable
    to our shareholders.





| |                                                                                                     
| | ----------------------------------------------------------------------------------------------------
| | We have a rights agreement that could deter a potentially
    profitable take-over by a third party.





| |                                                                                                      
| | -----------------------------------------------------------------------------------------------------
| | There are certain provisions of Florida law that could
    limit acquisitions and changes of control.



30



---



##### 





| |                                                                                                                                                                        
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Our shareholders will be diluted if we issue shares
    subject to options, warrants, convertible notes or payment of
    matching contributions under our 401(k) plan.





| |   |                                                                                                                                                                                                                                                                                               
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | 1,550,000 shares issuable upon exercise of outstanding
    warrants held by Finestar International, which are subject to
    anti-dilution provisions that provide for adjustments to the
    exercise price of the warrants for issuances of additional
    securities below a certain price;
|
| |  | 6,851,000 shares issuable pursuant to stock options
    outstanding;                                                                                                                                                                                                                          
|
| |  | 655,000 shares available for future grant under our stock
    option plans;                                                                                                                                                                                                                   
|
| |  | 11,161,000 shares issuable upon conversion of
    5.5% Convertible Senior Subordinated notes issued in August
    2003; and                                                                                                                                                                   
|
| |  | 624,000 shares for the purpose of making matching
    contributions under our 401(k) plan.                                                                                                                                                                                                    





|         |                                                              
|-------- | -------------------------------------------------------------
|Item 7A. | Quantitative and Qualitative Disclosure About Market
    Risk







31



---



##### 





|        |                                            
|------- | -------------------------------------------
|Item 8. | Financial Statements and Supplementary Data

Managements Report on Internal Control Over Financial
Reporting






32



---



##### 



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


ON INTERNAL CONTROL OVER FINANCIAL REPORTING




















| |                             
| | ----------------------------
| | /s/ Ernst & Young
    LLP   
| | Certified Public Accountants





33



---



##### 



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
















| |                             
| | ----------------------------
| | /s/ Ernst & Young
    LLP   
| | Certified Public Accountants





34



---



##### 



ARTESYN TECHNOLOGIES, INC. AND SUBSIDIARIES


CONSOLIDATED BALANCE SHEETS


|                                     |                                                                                                                                                   |                             |         |         |              |   |         |         |         | 
|------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------- | ------- | ------- | ------------ | - | ------- | ------- | ------- | 
|                                     |                                                                                                                                                   | December 31,                |         |         | December 26, |  
|                                     |                                                                                                                                                   | 2004                        |         |         | 2003         |  
|                                     |                                                                                                                                                   |                             |         |         |              |  
|                                     |                                                                                                                                                   | (Amounts in thousands       |        
|                                     |                                                                                                                                                   | except share data)          |        
|ASSETS                              
|Current Assets                       |                                                                                                                                                   |                             |         |         |              |   |         |        
|                                     | Cash and cash equivalents                                                                                                                         |                             | $       | 84,811  |              |   | $       | 94,215  |        
|                                     | Short-term marketable debt securities                                                                                                             |                             |         | 21,125  |              |   |         |        |        
|                                     | Accounts receivable, net of allowances of $1,633 in 2004 and
    $2,831 in 2003                                                                   |                             |         | 61,352  |              |   |         | 54,196  |        
|                                     | Inventories                                                                                                                                       |                             |         | 50,320  |              |   |         | 44,047  |        
|                                     | Prepaid expenses and other current assets                                                                                                         |                             |         | 1,380   |              |   |         | 2,753   |        
|                                     | Deferred income taxes                                                                                                                             |                             |         | 9,137   |              |   |         | 11,526  |        
|                                     |                                                                                                                                                   |                             |         |         |              |  
|                                     |                                                                                                                                                   | Total current assets        |         |         | 228,125      |   |         |         | 206,737 | 
|                                     |                                                                                                                                                   |                             |         |         |              |  
|Property, Plant & Equipment, Net     |                                                                                                                                                   |                             | 66,124  |         |              |   | 64,210  |        
|Other Assets                         |                                                                                                                                                   |                             |         |         |              |   |         |        
|                                     | Goodwill, net                                                                                                                                     |                             |         | 22,107  |              |   |         | 20,806  |        
|                                     | Deferred income taxes                                                                                                                             |                             |         | 4,155   |              |   |         | 19,211  |        
|                                     | Other assets                                                                                                                                      |                             |         | 21,128  |              |   |         | 5,712   |        
|                                     |                                                                                                                                                   |                             |         |         |              |  
|                                     |                                                                                                                                                   | Total other assets          |         |         | 47,390       |   |         |         | 45,729  | 
|                                     |                                                                                                                                                   |                             |         |         |              |  
|                                     |                                                                                                                                                   | Total assets                |         | $       | 341,639      |   |         | $       | 316,676 | 
|                                     |                                                                                                                                                   |                             |         |         |              |  
|                                    
|LIABILITIES AND SHAREHOLDERS EQUITY
|Current Liabilities                  |                                                                                                                                                   |                             |         |         |              |   |         |        
|                                     | Accounts payable                                                                                                                                  |                             | $       | 54,958  |              |   | $       | 47,994  |        
|                                     | Accrued and other current liabilities                                                                                                             |                             |         | 52,838  |              |   |         | 49,224  |        
|                                     |                                                                                                                                                   |                             |         |         |              |  
|                                     |                                                                                                                                                   | Total current liabilities   |         |         | 107,796      |   |         |         | 97,218  | 
|                                     |                                                                                                                                                   |                             |         |         |              |  
|Long-Term Liabilities                |                                                                                                                                                   |                             |         |         |              |   |         |        
|                                     | Convertible subordinated debt                                                                                                                     |                             |         | 90,000  |              |   |         | 90,000  |        
|                                     | Deferred income taxes                                                                                                                             |                             |         | 5,598   |              |   |         | 5,693   |        
|                                     | Other long-term liabilities                                                                                                                       |                             |         | 4,269   |              |   |         | 9,728   |        
|                                     |                                                                                                                                                   |                             |         |         |              |  
|                                     |                                                                                                                                                   | Total long-term liabilities |         |         | 99,867       |   |         |         | 105,421 | 
|                                     |                                                                                                                                                   |                             |         |         |              |  
|                                     |                                                                                                                                                   | Total liabilities           |         |         | 207,663      |   |         |         | 202,639 | 
|                                     |                                                                                                                                                   |                             |         |         |              |  
|Commitments and Contingencies        |                                                                                                                                                   |                             |         |         |              |   |         |        
|Shareholders Equity                 |                                                                                                                                                   |                             |         |         |              |   |         |        
|                                     | Preferred stock, par value $0.01; 1,000,000 shares
    authorized; none issued or outstanding                                                     |                             |         |        |              |   |         |        |        
|                                     | Common stock, par value $0.01; 80,000,000 shares
    authorized; 39,304,957 shares issued and outstanding in
    2004 (38,755,365 shares in 2003) |                             |         | 393     |              |   |         | 387     |        
|                                     | Additional paid-in capital                                                                                                                        |                             |         | 131,787 |              |   |         | 129,169 |        
|                                     | Retained earnings (accumulated deficit)                                                                                                           |                             |         | 5,832   |              |   |         | (8,041  | )      
|                                     | Accumulated other comprehensive loss                                                                                                              |                             |         | (4,036  | )            |   |         | (7,478  | )      
|                                     |                                                                                                                                                   |                             |         |         |              |  
|                                     |                                                                                                                                                   | Total shareholders equity  |         |         | 133,976      |   |         |         | 114,037 | 
|                                     |                                                                                                                                                   |                             |         |         |              |  
|                                     |                                                                                                                                                   | $                           | 341,639 |         |              | $ | 316,676 |        
|                                     |                                                                                                                                                   |                             |         |         |              |  



35



---



##### 



ARTESYN TECHNOLOGIES, INC. AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF OPERATIONS


|                                     |                                     |                                              |         |        |              |   |         |              |   |   |          |        |  
|------------------------------------ | ----------------------------------- | -------------------------------------------- | ------- | ------ | ------------ | - | ------- | ------------ | - | - | -------- | ------ | -
|                                     |                                     | For the Fiscal Years Ended                   |        
|                                     |                                     |                                              |        
|                                     |                                     | December 31,                                 |         |        | December 26, |   |         | December 27, |  
|                                     |                                     | 2004                                         |         |        | 2003         |   |         | 2002         |  
|                                     |                                     |                                              |         |        |              |   |         |              |  
|                                     |                                     | (Amounts in thousands except per share data) |        
|Sales                                |                                     | $                                            | 429,389 |        |              | $ | 356,871 |              |   | $ | 350,829  |       
|Cost of Sales                        |                                     |                                              | 319,757 |        |              |   | 287,617 |              |   |   | 321,263  |       
|                                     |                                     |                                              |         |        |              |   |         |              |  
|Gross Profit                         |                                     |                                              | 109,632 |        |              |   | 69,254  |              |   |   | 29,566   |       
|                                     |                                     |                                              |         |        |              |   |         |              |  
|Expenses                             |                                     |                                              |         |        |              |   |         |              |   |   |          |       
|                                     | Selling, general and administrative |                                              |         | 45,851 |              |   |         | 38,898       |   |   |          | 36,593 |  
|                                     | Research and development            |                                              |         | 41,141 |              |   |         | 34,329       |   |   |          | 34,341 |  
|                                     | Restructuring and related charges   |                                              |         |       |              |   |         | 5,611        |   |   |          | 27,345 |  
|                                     | Goodwill impairment                 |                                              |         |       |              |   |         |             |   |   |          | 51,856 |  
|                                     |                                     |                                              |         |        |              |   |         |              |  
|                                     |                                     |                                              | 86,992  |        |              |   | 78,838  |              |   |   | 150,135  |       
|                                     |                                     |                                              |         |        |              |   |         |              |  
|Operating Income (Loss)              |                                     |                                              | 22,640  |        |              |   | (9,584  | )            |   |   | (120,569 | )     
|                                     |                                     |                                              |         |        |              |   |         |              |  
|Other Income (Expense)               |                                     |                                              |         |        |              |   |         |              |   |   |          |       
|                                     | Interest expense                    |                                              |         | (6,009 | )            |   |         | (5,003       | ) |   |          | (7,576 | )
|                                     | Interest income                     |                                              |         | 1,005  |              |   |         | 534          |   |   |          | 1,122  |  
|                                     | Debt extinguishment expense         |                                              |         |       |              |   |         | (3,723       | ) |   |          | (558   | )
|                                     |                                     |                                              |         |        |              |   |         |              |  
|                                     |                                     |                                              | (5,004  | )      |              |   | (8,192  | )            |   |   | (7,012   | )     
|                                     |                                     |                                              |         |        |              |   |         |              |  
|Income (Loss) Before Income Taxes    |                                     |                                              | 17,636  |        |              |   | (17,776 | )            |   |   | (127,581 | )     
|Provision (Benefit) for Income Taxes |                                     |                                              | 3,763   |        |              |   | (2,154  | )            |   |   | (18,759  | )     
|                                     |                                     |                                              |         |        |              |   |         |              |  
|Net Income (Loss)                    |                                     | $                                            | 13,873  |        |              | $ | (15,622 | )            |   | $ | (108,822 | )     
|                                     |                                     |                                              |         |        |              |   |         |              |  
|Earnings (Loss) Per Share            |                                     |                                              |         |        |              |   |         |              |   |   |          |       
|                                     | Basic                               |                                              | $       | 0.35   |              |   | $       | (0.40        | ) |   | $        | (2.84  | )
|                                     |                                     |                                              |         |        |              |   |         |              |  
|                                     | Diluted                             |                                              | $       | 0.34   |              |   | $       | (0.40        | ) |   | $        | (2.84  | )
|                                     |                                     |                                              |         |        |              |   |         |              |  
|Weighted Average Common and Common   |                                     |                                              |         |        |              |   |         |              |   |   |          |       
|                                     | Equivalent Shares Outstanding       |                                              |         |        |              |   |         |              |   |   |          |        |  
|                                     | Basic                               |                                              |         | 39,093 |              |   |         | 38,678       |   |   |          | 38,370 |  
|                                     |                                     |                                              |         |        |              |   |         |              |  
|                                     | Diluted                             |                                              |         | 51,140 |              |   |         | 38,678       |   |   |          | 38,370 |  
|                                     |                                     |                                              |         |        |              |   |         |              |  



36



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##### 



ARTESYN TECHNOLOGIES, INC. AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY


AND COMPREHENSIVE INCOME (LOSS)


|                                                                              |                                                                                                |                        |        |   |            |          |     |              |             |   |               |   |  |               |         |          |               |   |         |               |   |   |         |          |   |   |          |          |  
|----------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------- | ---------------------- | ------ | - | ---------- | -------- | --- | ------------ | ----------- | - | ------------- | - |  | ------------- | ------- | -------- | ------------- | - | ------- | ------------- | - | - | ------- | -------- | - | - | -------- | -------- | -
|                                                                              |                                                                                                |                        |        |   |            | Retained |     |              | Accumulated |   |               |   |  |              
|                                                                              |                                                                                                | Common Stock           |        |   | Additional |          |     | Earnings     |             |   | Other         |   |  | Total         |         |          | Total         |  
|                                                                              |                                                                                                |                        |        |   | Paid-In    |          |     | (Accumulated |             |   | Comprehensive |   |  | Shareholders |         |          | Comprehensive |  
|                                                                              |                                                                                                | Shares                 |        |   | Amount     |          |     | Capital      |             |   | Deficit)      |   |  | Loss          |         |          | Equity        |   |         | Income (Loss) |  
|                                                                              |                                                                                                |                        |        |   |            |          |     |              |             |   |               |   |  |               |         |          |               |   |         |               |  
|                                                                              |                                                                                                | (Amounts in thousands) |       
|Balance, December 28, 2001                                                    |                                                                                                |                        | 38,253 |   |            | $        | 383 |              |             | $ | 122,041       |   |  | $             | 116,403 |          |               | $ | (19,582 | )             |   | $ | 219,245 |          |   | $ |         |         
|Issuance of common stock under stock option plans                             |                                                                                                |                        | 136    |   |            |          | 1   |              |             |   | 741           |   |  |               |        |          |               |   |        |               |   |   | 742     |          |   |   |         |         
|Issuance of warrants in connection with convertible subordinated
    debt     |                                                                                                |                        |       |   |            |          |    |              |             |   | 5,105         |   |  |               |        |          |               |   |        |               |   |   | 5,105   |          |   |   |         |         
|Comprehensive loss:                                                           |                                                                                                |                        |        |   |            |          |     |              |             |   |               |   |  |               |         |          |               |   |         |               |   |   |         |          |   |   |          |         
|                                                                              | Net loss                                                                                       |                        |        |  |            |          |     |             |             |   |               |  |  |               |         | (108,822 | )             |   |         |              |   |   |         | (108,822 | ) |   |          | (108,822 | )
|                                                                              | Changes in fair value of derivative financial instrument, net of
    income tax expense of $89 |                        |        |  |            |          |     |             |             |   |               |  |  |               |         |         |               |   |         | 240           |   |   |         | 240      |   |   |          | 240      |  
|                                                                              | Foreign currency translation adjustment                                                        |                        |        |  |            |          |     |             |             |   |               |  |  |               |         |         |               |   |         | 6,936         |   |   |         | 6,936    |   |   |          | 6,936    |  
|                                                                              |                                                                                                |                        |        |   |            |          |     |              |             |   |               |   |  |               |         |          |               |   |         |               |  
|Total comprehensive loss                                                      |                                                                                                |                        |       |   |            |          |    |              |             |   |              |   |  |               |        |          |               |   |        |               |   |   |        |          |   |   | (101,646 | )       
|                                                                              |                                                                                                |                        |        |   |            |          |     |              |             |   |               |   |  |               |         |          |               |   |         |               |  
|Balance, December 27, 2002                                                    |                                                                                                |                        | 38,389 |   |            |          | 384 |              |             |   | 127,887       |   |  |               | 7,581   |          |               |   | (12,406 | )             |   |   | 123,446 |          |   |   |         |         
|Issuance of common stock                                                      |                                                                                                |                        | 295    |   |            |          | 3   |              |             |   | 899           |   |  |               |        |          |               |   |        |               |   |   | 902     |          |   |   |         |         
|Issuance of common stock under stock option plans                             |                                                                                                |                        | 71     |   |            |          |    |              |             |   | 202           |   |  |               |        |          |               |   |        |               |   |   | 202     |          |   |   |         |         
|Modification of warrants in connection with convertible
    subordinated debt |                                                                                                |                        |       |   |            |          |    |              |             |   | 181           |   |  |               |        |          |               |   |        |               |   |   | 181     |          |   |   |         |         
|Comprehensive loss:                                                           |                                                                                                |                        |        |   |            |          |     |              |             |   |               |   |  |               |         |          |               |   |         |               |   |   |         |          |   |   |          |         
|                                                                              | Net loss                                                                                       |                        |        |  |            |          |     |             |             |   |               |  |  |               |         | (15,622  | )             |   |         |              |   |   |         | (15,622  | ) |   |          | (15,622  | )
|                                                                              | Foreign currency translation adjustment                                                        |                        |        |  |            |          |     |             |             |   |               |  |  |               |         |         |               |   |         | 4,928         |   |   |         | 4,928    |   |   |          | 4,928    |  
|                                                                              |                                                                                                |                        |        |   |            |          |     |              |             |   |               |   |  |               |         |          |               |   |         |               |  
|Total comprehensive loss                                                      |                                                                                                |                        |       |   |            |          |    |              |             |   |              |   |  |               |        |          |               |   |        |               |   |   |        |          |   |   | (10,694  | )       
|                                                                              |                                                                                                |                        |        |   |            |          |     |              |             |   |               |   |  |               |         |          |               |   |         |               |  
|Balance, December 26, 2003                                                    |                                                                                                |                        | 38,755 |   |            |          | 387 |              |             |   | 129,169       |   |  |               | (8,041  | )        |               |   | (7,478  | )             |   |   | 114,037 |          |   |   |         |         
|Issuance of common stock under stock option plans                             |                                                                                                |                        | 466    |   |            |          | 5   |              |             |   | 1,753         |   |  |               |        |          |               |   |        |               |   |   | 1,758   |          |   |   |         |         
|Issuance of common stock                                                      |                                                                                                |                        | 84     |   |            |          | 1   |              |             |   | 865           |   |  |               |        |          |               |   |        |               |   |   | 866     |          |   |   |         |         
|Comprehensive loss:                                                           |                                                                                                |                        |        |   |            |          |     |              |             |   |               |   |  |               |         |          |               |   |         |               |   |   |         |          |   |   |          |         
|                                                                              | Net income                                                                                     |                        |        |  |            |          |     |             |             |   |               |  |  |               |         | 13,873   |               |   |         |              |   |   |         | 13,873   |   |   |          | 13,873   |  
|                                                                              | Foreign currency translation adjustment                                                        |                        |        |  |            |          |     |             |             |   |               |  |  |               |         |         |               |   |         | 3,478         |   |   |         | 3,478    |   |   |          | 3,478    |  
|                                                                              | Unrealized loss on marketable equity securities, net of income
    tax benefit of $23          |                        |        |  |            |          |     |             |             |   |               |  |  |               |         |         |               |   |         | (36           | ) |   |         | (36      | ) |   |          | (36      | )
|                                                                              |                                                                                                |                        |        |   |            |          |     |              |             |   |               |   |  |               |         |          |               |   |         |               |  
|Total comprehensive income                                                    |                                                                                                |                        |       |   |            |          |    |              |             |   |              |   |  |               |        |          |               |   |        |               |   |   |        |          |   | $ | 17,315   |         
|                                                                              |                                                                                                |                        |        |   |            |          |     |              |             |   |               |   |  |               |         |          |               |   |         |               |  
|Balance, December 31, 2004                                                    |                                                                                                |                        | 39,305 |   |            | $        | 393 |              |             | $ | 131,787       |   |  | $             | 5,832   |          |               | $ | (4,036  | )             |   | $ | 133,976 |          |   |   |          |         
|                                                                              |                                                                                                |                        |        |   |            |          |     |              |             |   |               |   |  |               |         |          |               |   |         |               |  



37



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##### 



ARTESYN TECHNOLOGIES, INC. AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF CASH FLOWS


|                                                                 |                                                                                              |                                                                   |         |        |              |   |         |              |         |   |         |          |         |  
|---------------------------------------------------------------- | -------------------------------------------------------------------------------------------- | ----------------------------------------------------------------- | ------- | ------ | ------------ | - | ------- | ------------ | ------- | - | ------- | -------- | ------- | -
|                                                                 |                                                                                              | For the Fiscal Years Ended                                        |        
|                                                                 |                                                                                              |                                                                   |        
|                                                                 |                                                                                              | December 31,                                                      |         |        | December 26, |   |         | December 27, |        
|                                                                 |                                                                                              | 2004                                                              |         |        | 2003         |   |         | 2002         |        
|                                                                 |                                                                                              |                                                                   |         |        |              |   |         |              |        
|                                                                 |                                                                                              | (Amounts in thousands)                                            |        
|Operating Activities                                             |                                                                                              |                                                                   |         |        |              |   |         |              |         |   |         |         
|                                                                 | Net income (loss)                                                                            |                                                                   | $       | 13,873 |              |   | $       | (15,622      | )       |   | $       | (108,822 | )      
|                                                                 | Adjustments to reconcile net income (loss) to net cash provided
    by operating activities: |                                                                   |         |        |              |   |         |              |         |   |         |          |        
|                                                                 |                                                                                              | Depreciation and amortization of deferred debt issuance costs     |         |        | 22,275       |   |         |              | 22,937  |   |         |          | 26,978  |  
|                                                                 |                                                                                              | Impairment of goodwill                                            |         |        |             |   |         |              |        |   |         |          | 51,856  |  
|                                                                 |                                                                                              | Deferred income tax provision (benefit)                           |         |        | 1,767        |   |         |              | 980     |   |         |          | (12,826 | )
|                                                                 |                                                                                              | Provision for inventory valuation reserves                        |         |        | 4,397        |   |         |              | 1,874   |   |         |          | 25,818  |  
|                                                                 |                                                                                              | Provision for bad debts and returns                               |         |        | 1,436        |   |         |              | 1,418   |   |         |          | 356     |  
|                                                                 |                                                                                              | Non-cash restructuring charges                                    |         |        |             |   |         |              | 1,349   |   |         |          | 5,883   |  
|                                                                 |                                                                                              | Accretion of convertible subordinated debt discount               |         |        |             |   |         |              | 1,064   |   |         |          | 1,622   |  
|                                                                 |                                                                                              | Loss on debt extinguishment                                       |         |        |             |   |         |              | 3,723   |   |         |          | 588     |  
|                                                                 |                                                                                              | Gain on foreign currency transactions                             |         |        | (560         | ) |         |              | (451    | ) |         |          | (5,231  | )
|                                                                 |                                                                                              | Other non-cash items                                              |         |        | 323          |   |         |              | (109    | ) |         |          | 724     |  
|                                                                 | Changes in operating assets and liabilities, net of the effects
    of acquisitions:         |                                                                   |         |        |              |   |         |              |         |   |         |          |        
|                                                                 |                                                                                              | Accounts receivable                                               |         |        | (7,520       | ) |         |              | (8,577  | ) |         |          | 30,768  |  
|                                                                 |                                                                                              | Inventories                                                       |         |        | (9,852       | ) |         |              | 11,525  |   |         |          | 27,366  |  
|                                                                 |                                                                                              | Prepaid expenses and other assets                                 |         |        | 1,424        |   |         |              | 278     |   |         |          | (102    | )
|                                                                 |                                                                                              | Accounts payable and accrued liabilities                          |         |        | 2,906        |   |         |              | 3,816   |   |         |          | 1,111   |  
|                                                                 |                                                                                              |                                                                   |         |        |              |   |         |              |        
|Net Cash Provided by Operating Activities                        |                                                                                              |                                                                   | 30,469  |        |              |   | 24,205  |              |         |   | 46,089  |         
|                                                                 |                                                                                              |                                                                   |         |        |              |   |         |              |        
|Investing Activities                                             |                                                                                              |                                                                   |         |        |              |   |         |              |         |   |         |         
|                                                                 |                                                                                              | Purchases of property, plant & equipment                          |         |        | (22,140      | ) |         |              | (7,081  | ) |         |          | (5,230  | )
|                                                                 |                                                                                              | Proceeds from sale of property, plant & equipment                 |         |        | 908          |   |         |              | 735     |   |         |          | 538     |  
|                                                                 |                                                                                              | Purchases of marketable securities                                |         |        | (76,344      | ) |         |              |        |   |         |          |        |  
|                                                                 |                                                                                              | Proceeds from sale of marketable securities                       |         |        | 55,035       |   |         |              |        |   |         |          |        |  
|                                                                 |                                                                                              | Earn-out payments related to acquisitions                         |         |        | (714         | ) |         |              | (4,259  | ) |         |          | (4,335  | )
|                                                                 |                                                                                              |                                                                   |         |        |              |   |         |              |        
|Net Cash Used in Investing Activities                            |                                                                                              |                                                                   | (43,255 | )      |              |   | (10,605 | )            |         |   | (9,027  | )       
|                                                                 |                                                                                              |                                                                   |         |        |              |   |         |              |        
|Financing Activities                                             |                                                                                              |                                                                   |         |        |              |   |         |              |         |   |         |         
|                                                                 |                                                                                              | Proceeds from issuance of convertible subordinated debt           |         |        |             |   |         |              | 90,000  |   |         |          |        |  
|                                                                 |                                                                                              | Proceeds from issuances of long-term debt, net of financing costs |         |        |             |   |         |              | 9,481   |   |         |          | 49,000  |  
|                                                                 |                                                                                              | Financing costs on convertible subordinated debt                  |         |        |             |   |         |              | (3,725  | ) |         |          |         |  
|                                                                 |                                                                                              | Principal payments on convertible debt                            |         |        |             |   |         |              | (50,000 | ) |         |          |        |  
|                                                                 |                                                                                              | Principal payments on debt and capital leases                     |         |        | (4           | ) |         |              | (33,512 | ) |         |          | (79,115 | )
|                                                                 |                                                                                              | Proceeds from exercises of stock options                          |         |        | 1,758        |   |         |              | 202     |   |         |          | 742     |  
|                                                                 |                                                                                              |                                                                   |         |        |              |   |         |              |        
|Net Cash Provided by (Used in) Financing Activities              |                                                                                              |                                                                   | 1,754   |        |              |   | 12,446  |              |         |   | (29,373 | )       
|                                                                 |                                                                                              |                                                                   |         |        |              |   |         |              |        
|Effect of Exchange Rate Changes on Cash and Cash
    Equivalents |                                                                                              |                                                                   | 1,628   |        |              |   | 3,168   |              |         |   | 3,229   |         
|                                                                 |                                                                                              |                                                                   |         |        |              |   |         |              |        
|(Decrease) Increase in Cash and Cash Equivalents                 |                                                                                              |                                                                   | (9,404  | )      |              |   | 29,214  |              |         |   | 10,918  |         
|                                                                 |                                                                                              |                                                                   |         |        |              |   |         |              |        
|Cash and Cash Equivalents, Beginning of Year                     |                                                                                              |                                                                   | 94,215  |        |              |   | 65,001  |              |         |   | 54,083  |         
|                                                                 |                                                                                              |                                                                   |         |        |              |   |         |              |        
|Cash and Cash Equivalents, End of Year                           |                                                                                              | $                                                                 | 84,811  |        |              | $ | 94,215  |              |         | $ | 65,001  |         
|                                                                 |                                                                                              |                                                                   |         |        |              |   |         |              |        



38



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##### 



ARTESYN TECHNOLOGIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS




|   |                                                                
|-- | ---------------------------------------------------------------
|1. | Organization and Summary of Significant Accounting
    Policies

Organization.


Basis of Presentation.




Fiscal Year.


Cash and Cash Equivalents.


Marketable Debt Securities.


Trade Receivables.


Inventories.


Property, Plant & Equipment.


39



---



##### 



ARTESYN TECHNOLOGIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




Impairment of Long-Lived Assets.


Goodwill.




Foreign Currency Translation.


Revenue Recognition.




40



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##### 



ARTESYN TECHNOLOGIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






Product Warranty.




|                                    |  |      |        |   |      |   |        |  
|----------------------------------- |  | ---- | ------ | - | ---- | - | ------ | -
|                                    |  | 2004 |        |   | 2003 |  
|                                    |  |      |        |   |      |  
|Balance, beginning of period        |  | $    | 7,854  |   |      | $ | 5,378  |  
|Warranties issued during the period |  |      | 2,059  |   |      |   | 5,183  |  
|Settlements made during the period  |  |      | (2,980 | ) |      |   | (2,707 | )
|                                    |  |      |        |   |      |  
|Balance, end of period              |  | $    | 6,933  |   |      | $ | 7,854  |  
|                                    |  |      |        |   |      |  

Research and Development.


Advertising Expenses.


Income Taxes.


Stock-Based Compensation.


41



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##### 



ARTESYN TECHNOLOGIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                        |  |      |            |  |      |  |            |      |  |  |            | 
|----------------------- |  | ---- | ---------- |  | ---- |  | ---------- | ---- |  |  | ---------- | 
|                        |  | 2004 |            |  | 2003 |  |            | 2002 | 
|                        |  |      |            |  |      |  |            |      | 
|Risk-free interest rate |  |      | 3.3%       |  |      |  | 2.2%       |      |  |  | 3.1%       | 
|Dividend yield          |  |      |           |  |      |  |           |      |  |  |           | 
|Expected volatility     |  |      | 79%        |  |      |  | 94%        |      |  |  | 98%        | 
|Expected life           |  |      | 3.6  years |  |      |  | 3.3  years |      |  |  | 3.9  years | 



|                                     |  |  |             |      |  |   |        |   |  |      |         |   |  |   |          |  
|------------------------------------ |  |  | ----------- | ---- |  | - | ------ | - |  | ---- | ------- | - |  | - | -------- | -
|                                     |  |  |             | 2004 |  |   | 2003   |   |  | 2002 |        
|                                     |  |  |             |      |  |   |        |   |  |      |        
|Net income (loss)                    |  |  | As reported |      |  | $ | 13,873 |   |  | $    | (15,622 | ) |  | $ | (108,822 | )
|Pro forma expense, net of tax effect |  |  |             |      |  |   | (3,504 | ) |  |      | (5,464  | ) |  |   | (11,965  | )
|                                     |  |  |             |      |  |   |        |   |  |      |         |  
|                                     |  |  | Pro forma   |      |  | $ | 10,369 |   |  | $    | (21,086 | ) |  | $ | (120,787 | )
|                                     |  |  |             |      |  |   |        |   |  |      |         |  
|Earnings (loss) per share  Basic    |  |  | As reported |      |  | $ | 0.35   |   |  | $    | (0.40   | ) |  | $ | (2.84    | )
|                                     |  |  |             |      |  |   |        |   |  |      |         |  
|                                     |  |  | Pro forma   |      |  | $ | 0.27   |   |  | $    | (0.55   | ) |  | $ | (3.15    | )
|                                     |  |  |             |      |  |   |        |   |  |      |         |  
|Earnings (loss) per shared  Diluted |  |  | As reported |      |  | $ | 0.34   |   |  | $    | (0.40   | ) |  | $ | (2.84    | )
|                                     |  |  |             |      |  |   |        |   |  |      |         |  
|                                     |  |  | Pro forma   |      |  | $ | 0.26   |   |  | $    | (0.55   | ) |  | $ | (3.15    | )
|                                     |  |  |             |      |  |   |        |   |  |      |         |  



Earnings (Loss) Per Share.


Comprehensive Loss.


Use of Estimates.


42



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##### 



ARTESYN TECHNOLOGIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Concentration of Credit Risk.




|                 |  |      |    |   |      |  |    |      |  |  |    |  
|---------------- |  | ---- | -- | - | ---- |  | -- | ---- |  |  | -- | -
|                 |  | 2004 |    |   | 2003 |  |    | 2002 | 
|                 |  |      |    |   |      |  |    |      | 
|Dell Computer    |  |      | 13 | % |      |  | 11 | %    |  |  | 15 | %
|IBM              |  |      | 11 | % |      |  | 7  | %    |  |  | 3  | %
|Hewlett-Packard  |  |      | 10 | % |      |  | 15 | %    |  |  | 17 | %
|Sun Microsystems |  |      | 8  | % |      |  | 10 | %    |  |  | 13 | %



Fair Value of Financial Instruments.


Reclassifications.


Recent Accounting Pronouncements






43



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##### 



ARTESYN TECHNOLOGIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






|   |            
|-- | -----------
|2. | Inventories



|                |  |              |        |  |              |   |        | 
|--------------- |  | ------------ | ------ |  | ------------ | - | ------ | 
|                |  | December 31, |        |  | December 26, |  
|                |  | 2004         |        |  | 2003         |  
|                |  |              |        |  |              |  
|Raw materials   |  | $            | 19,736 |  |              | $ | 17,184 | 
|Work-in-process |  |              | 8,722  |  |              |   | 8,446  | 
|Finished goods  |  |              | 21,862 |  |              |   | 18,417 | 
|                |  |              |        |  |              |  
|                |  | $            | 50,320 |  |              | $ | 44,047 | 
|                |  |              |        |  |              |  



|   |                            
|-- | ---------------------------
|3. | Property, Plant & Equipment



|                              |  |              |          |   |              |   |          |  
|----------------------------- |  | ------------ | -------- | - | ------------ | - | -------- | -
|                              |  | December 31, |          |   | December 26, |  
|                              |  | 2004         |          |   | 2003         |  
|                              |  |              |          |   |              |  
|Land                          |  | $            | 1,719    |   |              | $ | 1,633    |  
|Buildings and fixtures        |  |              | 22,687   |   |              |   | 21,953   |  
|Machinery and equipment       |  |              | 177,146  |   |              |   | 162,301  |  
|Leasehold improvements        |  |              | 9,279    |   |              |   | 8,914    |  
|                              |  |              |          |   |              |  
|                              |  |              | 210,831  |   |              |   | 194,801  |  
|Less accumulated depreciation |  |              | (144,707 | ) |              |   | (130,591 | )
|                              |  |              |          |   |              |  
|                              |  | $            | 66,124   |   |              | $ | 64,210   |  
|                              |  |              |          |   |              |  





|   |             
|-- | ------------
|4. | Other Assets



|                                                                                                     |  |              |        |  |              |   |       | 
|---------------------------------------------------------------------------------------------------- |  | ------------ | ------ |  | ------------ | - | ----- | 
|                                                                                                     |  | December 31, |        |  | December 26, |  
|                                                                                                     |  | 2004         |        |  | 2003         |  
|                                                                                                     |  |              |        |  |              |  
|Long term prepaid asset, net of accumulated amortization of
    $1,148 in 2004                       |  | $            | 16,240 |  |              | $ |      | 
|Deferred debt issuance costs, net of accumulated amortization of
    $1,178 in 2004 and $378 in 2003 |  |              | 3,669  |  |              |   | 4,470 | 
|Other                                                                                                |  |              | 1,219  |  |              |   | 1,242 | 
|                                                                                                     |  |              |        |  |              |  
|                                                                                                     |  | $            | 21,128 |  |              | $ | 5,712 | 
|                                                                                                     |  |              |        |  |              |  



44



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##### 



ARTESYN TECHNOLOGIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)








|   |                              
|-- | -----------------------------
|5. | Accrued and Other Liabilities



|                                        |  |              |        |  |              |   |        | 
|--------------------------------------- |  | ------------ | ------ |  | ------------ | - | ------ | 
|                                        |  | December 31, |        |  | December 26, |  
|                                        |  | 2004         |        |  | 2003         |  
|                                        |  |              |        |  |              |  
|Compensation and benefits               |  | $            | 16,006 |  |              | $ | 14,780 | 
|Income taxes payable                    |  |              | 10,868 |  |              |   | 9,949  | 
|Warranty reserve                        |  |              | 6,933  |  |              |   | 7,854  | 
|Restructuring reserve (current portion) |  |              | 5,806  |  |              |   | 5,552  | 
|Other                                   |  |              | 13,225 |  |              |   | 11,089 | 
|                                        |  |              |        |  |              |  
|                                        |  | $            | 52,838 |  |              | $ | 49,224 | 
|                                        |  |              |        |  |              |  





|                        |  |              |       |  |              |   |       | 
|----------------------- |  | ------------ | ----- |  | ------------ | - | ----- | 
|                        |  | December 31, |       |  | December 26, |  
|                        |  | 2004         |       |  | 2003         |  
|                        |  |              |       |  |              |  
|Restructuring reserve   |  | $            | 3,252 |  |              | $ | 8,662 | 
|Directors pension plan |  |              | 1,017 |  |              |   | 1,066 | 
|                        |  |              |       |  |              |  
|                        |  | $            | 4,269 |  |              | $ | 9,728 | 
|                        |  |              |       |  |              |  



|   |            
|-- | -----------
|6. | Investments



|                      |  |              |        | 
|--------------------- |  | ------------ | ------ | 
|                      |  | December 31, |       
|                      |  | 2004         |       
|                      |  |              |       
|Government securities |  | $            | 14,110 | 
|Corporate securities  |  |              | 4,565  | 
|Municipal securities  |  |              | 2,450  | 
|                      |  |              |       
|                      |  | $            | 21,125 | 
|                      |  |              |       



45



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##### 



ARTESYN TECHNOLOGIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






|   |                                  
|-- | ---------------------------------
|7. | Restructuring and Related Charges





| |                                                                                                                                                                                                            
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1) A realignment of our commercial functions along
    customer/market lines in order to provide enhanced customer
    service.                                                                           
|
| | (2) Addressing excess capacity and cost issues by closing
    several operating and administrative facilities throughout the
    world and consolidating these functions into other existing
    locations.
|
| | (3) The elimination of a number of operational and
    administrative positions company-wide.                                                                                                              








46



---



##### 



ARTESYN TECHNOLOGIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                              |  |              |        |  |               |   |              |      |  |   |       | 
|--------------------------------------------- |  | ------------ | ------ |  | ------------- | - | ------------ | ---- |  | - | ----- | 
|                                              |  | Accrued      |        |  |               |   | Accrued      |     
|                                              |  | Liability at |        |  |               |   | Liability at |     
|                                              |  | December 26, |        |  |               |   | December 31, |     
|                                              |  | 2003         |        |  | 2004 Activity |   |              | 2004 | 
|                                              |  |              |        |  |               |   |              |      | 
|Employee termination costs                    |  | $            | 1,462  |  |               | $ | (610         | )    |  | $ | 852   | 
|Liability for payback of developmental grants |  |              | 3,080  |  |               |   | 306          |      |  |   | 3,386 | 
|Facility closures                             |  |              | 9,672  |  |               |   | (4,852       | )    |  |   | 4,820 | 
|                                              |  |              |        |  |               |   |              |      | 
|                                              |  | $            | 14,214 |  |               | $ | (5,156       | )    |  | $ | 9,058 | 
|                                              |  |              |        |  |               |   |              |      | 





|                                              |  |              |        |  |               |   |       |              |  |              |          |   |  |      |        |   |  |   |        | 
|--------------------------------------------- |  | ------------ | ------ |  | ------------- | - | ----- | ------------ |  | ------------ | -------- | - |  | ---- | ------ | - |  | - | ------ | 
|                                              |  | Accrued      |        |  | 2003 Activity |   |       | Accrued      | 
|                                              |  | Liability at |        |  |               |   |       | Liability at | 
|                                              |  | December 27, |        |  | Restructuring |   |       |              |  | December 26, |         
|                                              |  | 2002         |        |  | Charge        |   |       | Cash         |  |              | Non-Cash |   |  | 2003 |       
|                                              |  |              |        |  |               |   |       |              |  |              |          |   |  |      |       
|Employee termination costs                    |  | $            | 8,879  |  |               | $ | 2,201 |              |  | $            | (9,618   | ) |  | $    |       |   |  | $ | 1,462  | 
|Liability for payback of developmental grants |  |              | 2,654  |  |               |   | 30    |              |  |              |         |   |  |      | 396    |   |  |   | 3,080  | 
|Facility closures                             |  |              | 13,954 |  |               |   | 3,380 |              |  |              | (6,313   | ) |  |      | (1,349 | ) |  |   | 9,672  | 
|                                              |  |              |        |  |               |   |       |              |  |              |          |   |  |      |       
|                                              |  | $            | 25,487 |  |               | $ | 5,611 |              |  | $            | (15,931  | ) |  | $    | (953   | ) |  | $ | 14,214 | 
|                                              |  |              |        |  |               |   |       |              |  |              |          |   |  |      |       



|                                              |  |              |       |  |               |   |        |              |  |              |          |   |  |      |        |   |  |   |        | 
|--------------------------------------------- |  | ------------ | ----- |  | ------------- | - | ------ | ------------ |  | ------------ | -------- | - |  | ---- | ------ | - |  | - | ------ | 
|                                              |  | Accrued      |       |  | 2002 Activity |   |        | Accrued      | 
|                                              |  | Liability at |       |  |               |   |        | Liability at | 
|                                              |  | December 28, |       |  | Restructuring |   |        |              |  | December 27, |         
|                                              |  | 2001         |       |  | Charge        |   |        | Cash         |  |              | Non-Cash |   |  | 2002 |       
|                                              |  |              |       |  |               |   |        |              |  |              |          |   |  |      |       
|Employee termination costs                    |  | $            | 2,283 |  |               | $ | 9,887  |              |  | $            | (3,291   | ) |  | $    |       |   |  | $ | 8,879  | 
|Liability for payback of developmental grants |  |              |      |  |               |   | 2,547  |              |  |              |         |   |  |      | 107    |   |  |   | 2,654  | 
|Facility closures                             |  |              | 3,149 |  |               |   | 14,911 |              |  |              |         |   |  |      | (4,106 | ) |  |   | 13,954 | 
|                                              |  |              |       |  |               |   |        |              |  |              |          |   |  |      |       
|                                              |  | $            | 5,432 |  |               | $ | 27,345 |              |  | $            | (3,291   | ) |  | $    | (3,999 | ) |  | $ | 25,487 | 
|                                              |  |              |       |  |               |   |        |              |  |              |          |   |  |      |       



|   |                      
|-- | ---------------------
|8. | Business Combinations



47



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##### 



ARTESYN TECHNOLOGIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)








|   |                 
|-- | ----------------
|9. | Convertible Debt







48



---



##### 



ARTESYN TECHNOLOGIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|    |                  
|--- | -----------------
|10. | Credit Facilities







|    |             
|--- | ------------
|11. | Income Taxes



|                                           |         |      |       |       |      |   |        |        |   |   |         |        |  
|------------------------------------------ | ------- | ---- | ----- | ----- | ---- | - | ------ | ------ | - | - | ------- | ------ | -
|                                           |         | 2004 |       |       | 2003 |   |        | 2002   |  
|                                           |         |      |       |       |      |   |        |        |  
|Current provision (benefit):               |         |      |       |       |      |   |        |        |   |   |         |       
|                                           | Federal |      | $     | (747  | )    |   | $      | (3,486 | ) |   | $       | (5,372 | )
|                                           | State   |      |       | 289   |      |   |        | (398   | ) |   |         | (614   | )
|                                           | Foreign |      |       | 2,454 |      |   |        | 750    |   |   |         | 53     |  
|                                           |         |      |       |       |      |   |        |        |  
|Total current                              |         |      | 1,996 |       |      |   | (3,134 | )      |   |   | (5,933  | )     
|Deferred provision (benefit):              |         |      |       |       |      |   |        |        |   |   |         |       
|                                           | Federal |      |       | 1,846 |      |   |        | 3,449  |   |   |         | (7,795 | )
|                                           | State   |      |       | 230   |      |   |        | 477    |   |   |         | (764   | )
|                                           | Foreign |      |       | (309  | )    |   |        | (2,946 | ) |   |         | (4,267 | )
|                                           |         |      |       |       |      |   |        |        |  
|Total deferred                             |         |      | 1,767 |       |      |   | 980    |        |   |   | (12,826 | )     
|                                           |         |      |       |       |      |   |        |        |  
|Total provision (benefit) for income taxes |         | $    | 3,763 |       |      | $ | (2,154 | )      |   | $ | (18,759 | )     
|                                           |         |      |       |       |      |   |        |        |  



49



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##### 



ARTESYN TECHNOLOGIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)








|                                                                |  |      |        |  |      |   |         |      |  |   |          |  
|--------------------------------------------------------------- |  | ---- | ------ |  | ---- | - | ------- | ---- |  | - | -------- | -
|                                                                |  | 2004 |        |  | 2003 |   |         | 2002 | 
|                                                                |  |      |        |  |      |   |         |      | 
|U.S.                                                            |  | $    | 8,828  |  |      | $ | (5,552  | )    |  | $ | (64,821  | )
|Foreign                                                         |  |      | 8,808  |  |      |   | (12,224 | )    |  |   | (62,760  | )
|                                                                |  |      |        |  |      |   |         |      | 
|Total income (loss) before provision (benefit) for income taxes |  | $    | 17,636 |  |      | $ | (17,776 | )    |  | $ | (127,581 | )
|                                                                |  |      |        |  |      |   |         |      | 



|                                                |  |      |       |   |      |  |       |      |  |  |       |  
|----------------------------------------------- |  | ---- | ----- | - | ---- |  | ----- | ---- |  |  | ----- | -
|                                                |  | 2004 |       |   | 2003 |  |       | 2002 | 
|                                                |  |      |       |   |      |  |       |      | 
|U.S. federal statutory tax rate                 |  |      | 35.0  | % |      |  | 35.0  | %    |  |  | 35.0  | %
|Foreign tax effects                             |  |      | (15.0 | ) |      |  | (30.4 | )    |  |  | (14.8 | )
|Permanent items                                 |  |      | (3.7  | ) |      |  | 3.1   |      |  |  | (1.4  | )
|Austrian tax rate change                        |  |      | 1.4   |   |      |  |      |      |  |  | (6.1  | )
|State income tax effect, net of federal benefit |  |      | 3.6   |   |      |  | (0.6  | )    |  |  | 0.8   |  
|Tax credits                                     |  |      |      |   |      |  | 4.3   |      |  |  | 1.2   |  
|Other                                           |  |      |      |   |      |  | 0.7   |      |  |  |      |  
|                                                |  |      |       |   |      |  |       |      | 
|Effective income tax rate                       |  |      | 21.3  | % |      |  | 12.1  | %    |  |  | 14.7  | %
|                                                |  |      |       |   |      |  |       |      | 



50



---



##### 



ARTESYN TECHNOLOGIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                   |                                  |      |       |         |      |   |        |         |  
|---------------------------------- | -------------------------------- | ---- | ----- | ------- | ---- | - | ------ | ------- | -
|                                   |                                  | 2004 |       |         | 2003 |  
|                                   |                                  |      |       |         |      |  
|Current Deferred Tax Assets        |                                  |      |       |         |      |   |        |        
|                                   | Inventory valuation reserves     |      | $     | 3,061   |      |   | $      | 4,173   |  
|                                   | Other accrued liabilities        |      |       | 5,674   |      |   |        | 6,780   |  
|                                   | Allowance for doubtful accounts  |      |       | 402     |      |   |        | 573     |  
|                                   |                                  |      |       |         |      |  
|                                   |                                  | $    | 9,137 |         |      | $ | 11,526 |        
|                                   |                                  |      |       |         |      |  
|Long-Term Deferred Tax Assets      |                                  |      |       |         |      |   |        |        
|                                   | Lease liabilities                |      | $     | 1,521   |      |   | $      | 2,177   |  
|                                   | Other accrued liabilities        |      |       | 570     |      |   |        | 556     |  
|                                   | Net operating loss carryforwards |      |       | 16,606  |      |   |        | 27,260  |  
|                                   | Tax credit carryover             |      |       | 1,633   |      |   |        | 1,633   |  
|                                   | Valuation allowance              |      |       | (16,175 | )    |   |        | (12,415 | )
|                                   |                                  |      |       |         |      |  
|                                   |                                  | $    | 4,155 |         |      | $ | 19,211 |        
|                                   |                                  |      |       |         |      |  
|Long-Term Deferred Tax Liabilities |                                  |      |       |         |      |   |        |        
|                                   | Property, plant & equipment      |      | $     | 4,023   |      |   | $      | 3,804   |  
|                                   | Goodwill                         |      |       | 1,479   |      |   |        | 1,210   |  
|                                   | Other                            |      |       | 96      |      |   |        | 679     |  
|                                   |                                  |      |       |         |      |  
|                                   |                                  | $    | 5,598 |         |      | $ | 5,693  |        
|                                   |                                  |      |       |         |      |  





51



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##### 



ARTESYN TECHNOLOGIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|               |       |                |      |       |            |  |                    |  | 
|-------------- | ----- | -------------- | ---- | ----- | ---------- |  | ------------------ |  | 
|               |       | Net Operating  |      |       |           
|Country        |       | Loss Available |      |       | Expiration | 
|               |       |                |      |       |            | 
|United States  |       | $              | 9.7  |       |            |  | 2024               | 
|Austria        |       |                | 18.9 |       |            |  | No expiration      | 
|Hungary        |       |                | 23.6 |       |            |  | 2005-no expiration | 
|Germany        |       |                | 14.8 |       |            |  | No expiration      | 
|United Kingdom |       |                | 4.0  |       |            |  | No expiration      | 
|Ireland        |       |                | 30.7 |       |            |  | No expiration      | 
|Netherlands    |       |                | 7.6  |       |            |  | No expiration      | 
|               |       |                |      |       |            | 
|               | Total |                | $    | 109.3 |            |  |                    |  | 
|               |       |                |      |       |            | 





|    |                              
|--- | -----------------------------
|12. | Commitments and Contingencies



| |                  
| | -----------------
| | Legal Proceedings









52



---



##### 



ARTESYN TECHNOLOGIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






| |                     
| | --------------------
| | Purchase Commitments





| |                  
| | -----------------
| | Lease Obligations



|                    |  |           |        | 
|------------------- |  | --------- | ------ | 
|                    |  | Operating |       
|Fiscal Year         |  | Leases    |       
|                    |  |           |       
|2005                |  | $         | 8,518  | 
|2006                |  |           | 2,307  | 
|2007                |  |           | 1,730  | 
|2008                |  |           | 1,137  | 
|2009                |  |           | 357    | 
|2010 and thereafter |  |           | 1,611  | 
|                    |  |           |       
|                    |  | $         | 15,660 | 
|                    |  |           |       







|    |                               
|--- | ------------------------------
|13. | Stock-Based Compensation Plans



| |                           
| | --------------------------
| | Employee Stock Option Plan



53



---



##### 



ARTESYN TECHNOLOGIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






| |                                    
| | -----------------------------------
| | Outside Directors Stock Option Plan





|                                                                   |  |         |           |           |       |   |       |         |           |   |            |   |  |           |       |  |       |   |            |   |  |   |       | 
|------------------------------------------------------------------ |  | ------- | --------- | --------- | ----- | - | ----- | ------- | --------- | - | ---------- | - |  | --------- | ----- |  | ----- | - | ---------- | - |  | - | ----- | 
|                                                                   |  | 2004    |           |           | 2003  |   |       | 2002    |          
|                                                                   |  |         |           |           |       |   |       |         |          
|                                                                   |  |         |           | Weighted- |       |   |       |         | Weighted- |   |            |   |  | Weighted- |      
|                                                                   |  |         |           | average   |       |   |       |         | average   |   |            |   |  | average   |      
|                                                                   |  |         |           | Exercise  |       |   |       |         | Exercise  |   |            |   |  | Exercise  |      
|                                                                   |  | Options |           |           | Price |   |       | Options |           |   | Price      |   |  | Options   |       |  | Price |  
|                                                                   |  |         |           |           |       |   |       |         |           |   |            |   |  |           |       |  |       |  
|Options outstanding, beginning of year                             |  |         | 6,931,359 |           |       | $ | 11.68 |         |           |   | 7,050,064  |   |  | $         | 12.87 |  |       |   | 7,160,755  |   |  | $ | 14.62 | 
|Options granted                                                    |  |         | 1,050,250 |           |       |   | 8.13  |         |           |   | 1,008,200  |   |  |           | 6.29  |  |       |   | 1,231,200  |   |  |   | 4.34  | 
|Options exercised                                                  |  |         | (466,000  | )         |       |   | 3.77  |         |           |   | (70,750    | ) |  |           | 2.87  |  |       |   | (136,003   | ) |  |   | 5.74  | 
|Options forfeited                                                  |  |         | (664,640  | )         |       |   | 20.15 |         |           |   | (1,056,155 | ) |  |           | 14.79 |  |       |   | (1,205,888 | ) |  |   | 15.25 | 
|                                                                   |  |         |           |           |       |   |       |         |           |   |            |   |  |           |       |  |       |  
|Options outstanding, end of year                                   |  |         | 6,850,969 |           |       |   | 10.85 |         |           |   | 6,931,359  |   |  |           | 11.68 |  |       |   | 7,050,064  |   |  |   | 12.87 | 
|                                                                   |  |         |           |           |       |   |       |         |           |   |            |   |  |           |       |  |       |  
|Options exercisable, end of year                                   |  |         | 4,280,019 |           |       | $ | 12.63 |         |           |   | 3,887,284  |   |  | $         | 15.81 |  |       |   | 3,323,544  |   |  | $ | 17.65 | 
|                                                                   |  |         |           |           |       |   |       |         |           |   |            |   |  |           |       |  |       |  
|Weighted-average fair value of options granted during the
    year |  | $       | 4.62      |           |       |   |       |         |           | $ | 3.90       |   |  |           |       |  |       | $ | 2.95       |   |  |   |       | 
|                                                                   |  |         |           |           |       |   |       |         |           |   |            |   |  |           |       |  |       |  

54



---



##### 



ARTESYN TECHNOLOGIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                         |  |                     |           |                  |                     |  |           |       |  |   |         |           |  |          |           |  |  |   |       | 
|------------------------ |  | ------------------- | --------- | ---------------- | ------------------- |  | --------- | ----- |  | - | ------- | --------- |  | -------- | --------- |  |  | - | ----- | 
|                         |  | Options Outstanding |           |                  | Options Exercisable | 
|                         |  |                     |           |                  |                     | 
|                         |  |                     |           | Weighted-        |                     |  |           |       | 
|                         |  |                     |           | average          |                     |  | Weighted- |       |  |   |         | Weighted- | 
|                         |  |                     |           | Remaining        |                     |  | average   |       |  |   |         | average   | 
|                         |  |                     |           | Contractual Life |                     |  | Exercise  |       |  |   |         | Price     | 
|Range of Exercise Prices |  | Options             |           |                  | (Years)             |  |           | Price |  |   | Options |           |  | Exercise |          
|                         |  |                     |           |                  |                     |  |           |       |  |   |         |           |  |          |          
|$ 1.42  $ 5.37          |  |                     | 1,698,450 |                  |                     |  | 2.57      |       |  | $ | 3.90    |           |  |          | 1,201,200 |  |  | $ | 4.38  | 
|5.50    7.68            |  |                     | 1,746,900 |                  |                     |  | 4.24      |       |  |   | 7.31    |           |  |          | 245,150   |  |  |   | 7.09  | 
|7.70   10.25            |  |                     | 1,219,150 |                  |                     |  | 2.38      |       |  |   | 9.27    |           |  |          | 862,500   |  |  |   | 9.25  | 
|10.38   19.94           |  |                     | 1,151,379 |                  |                     |  | 2.16      |       |  |   | 15.96   |           |  |          | 1,033,829 |  |  |   | 16.44 | 
|20.13   43.13           |  |                     | 1,035,090 |                  |                     |  | 1.21      |       |  |   | 24.41   |           |  |          | 937,340   |  |  |   | 23.53 | 
|                         |  |                     |           |                  |                     |  |           |       |  |   |         |           |  |          |          
|                         |  |                     | 6,850,969 |                  |                     |  | 2.69      |       |  | $ | 10.85   |           |  |          | 4,280,019 |  |  | $ | 12.63 | 
|                         |  |                     |           |                  |                     |  |           |       |  |   |         |           |  |          |          



|                                                             |  |        |        | 
|------------------------------------------------------------ |  | ------ | ------ | 
|Description                                                  |  | Shares |       
|                                                             |  |        |       
|Conversion of convertible senior subordinated notes          |  |        | 11,161 | 
|Conversion of common stock warrants outstanding              |  |        | 1,550  | 
|Available for issuance pursuant to stock options outstanding |  |        | 6,851  | 
|Available for future grant under stock options plans         |  |        | 655    | 
|Available for issuance for 401(k) plan matching obligations  |  |        | 624    | 
|                                                             |  |        |       
|                                                             |  |        | 20,841 | 
|                                                             |  |        |       



|    |                       
|--- | ----------------------
|14. | Employee Benefit Plans





55



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##### 



ARTESYN TECHNOLOGIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|    |                                             
|--- | --------------------------------------------
|15. | Business Segments and Geographic Information





56



---



##### 



ARTESYN TECHNOLOGIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                              |                         |       |   |         |         |  |   |         |         |   |   |         |          |  
|----------------------------- | ----------------------- | ----- | - | ------- | ------- |  | - | ------- | ------- | - | - | ------- | -------- | -
|                              |                         | 2004  |   |         | 2003    |  |   | 2002    |        
|                              |                         |       |   |         |         |  |   |         |        
|Sales                         |                         |       |   |         |         |  |   |         |         |   |   |        
|                              | Power Conversion        |       | $ | 354,625 |         |  | $ | 314,412 |         |   | $ | 318,961 |         
|                              | Communications Products |       |   | 74,764  |         |  |   | 42,459  |         |   |   | 31,868  |         
|                              |                         |       |   |         |         |  |   |         |        
|                              |                         | Total |   | $       | 429,389 |  |   | $       | 356,871 |   |   | $       | 350,829  |  
|                              |                         |       |   |         |         |  |   |         |        
|Operating Income (Loss)       |                         |       |   |         |         |  |   |         |         |   |   |        
|                              | Power Conversion        |       | $ | 12,680  |         |  | $ | (7,486  | )       |   | $ | (88,057 | )       
|                              | Communications Products |       |   | 22,292  |         |  |   | 7,309   |         |   |   | (20,850 | )       
|                              | Corporate               |       |   | (12,332 | )       |  |   | (9,407  | )       |   |   | (11,662 | )       
|                              |                         |       |   |         |         |  |   |         |        
|                              |                         | Total |   | $       | 22,640  |  |   | $       | (9,584  | ) |   | $       | (120,569 | )
|                              |                         |       |   |         |         |  |   |         |        
|Year-End Assets               |                         |       |   |         |         |  |   |         |         |   |   |        
|                              | Power Conversion        |       | $ | 215,109 |         |  | $ | 220,973 |         |   | $ | 245,945 |         
|                              | Communications Products |       |   | 64,582  |         |  |   | 44,763  |         |   |   | 39,310  |         
|                              | Corporate               |       |   | 61,948  |         |  |   | 50,940  |         |   |   | 18,332  |         
|                              |                         |       |   |         |         |  |   |         |        
|                              |                         | Total |   | $       | 341,639 |  |   | $       | 316,676 |   |   | $       | 303,587  |  
|                              |                         |       |   |         |         |  |   |         |        
|Capital Expenditures          |                         |       |   |         |         |  |   |         |         |   |   |        
|                              | Power Conversion        |       | $ | 20,852  |         |  | $ | 6,008   |         |   | $ | 4,883   |         
|                              | Communications Products |       |   | 1,267   |         |  |   | 1,053   |         |   |   | 306     |         
|                              | Corporate               |       |   | 21      |         |  |   | 20      |         |   |   | 41      |         
|                              |                         |       |   |         |         |  |   |         |        
|                              |                         | Total |   | $       | 22,140  |  |   | $       | 7,081   |   |   | $       | 5,230    |  
|                              |                         |       |   |         |         |  |   |         |        
|Depreciation and Amortization |                         |       |   |         |         |  |   |         |         |   |   |        
|                              | Power Conversion        |       | $ | 19,840  |         |  | $ | 20,433  |         |   | $ | 23,733  |         
|                              | Communications Products |       |   | 1,529   |         |  |   | 1,836   |         |   |   | 2,081   |         
|                              | Corporate               |       |   | 906     |         |  |   | 668     |         |   |   | 1,164   |         
|                              |                         |       |   |         |         |  |   |         |        
|                              |                         | Total |   | $       | 22,275  |  |   | $       | 22,937  |   |   | $       | 26,978   |  
|                              |                         |       |   |         |         |  |   |         |        

57



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##### 



ARTESYN TECHNOLOGIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                           |                         |      |         |         |      |   |         |         |  |   |         |         | 
|-------------------------- | ----------------------- | ---- | ------- | ------- | ---- | - | ------- | ------- |  | - | ------- | ------- | 
|                           |                         | 2004 |         |         | 2003 |   |         | 2002    | 
|                           |                         |      |         |         |      |   |         |         | 
|Sales                      |                         |      |         |         |      |   |         |         |  |   |         |        
|United States              |                         | $    | 255,962 |         |      | $ | 223,695 |         |  | $ | 221,355 |        
|Austria                    |                         |      | 37,043  |         |      |   | 37,982  |         |  |   | 56,303  |        
|Ireland                    |                         |      | 16,780  |         |      |   | 19,024  |         |  |   | 20,534  |        
|Peoples Republic of China |                         |      | 110,192 |         |      |   | 67,253  |         |  |   | 45,401  |        
|Other foreign countries    |                         |      | 9,412   |         |      |   | 8,917   |         |  |   | 7,236   |        
|                           |                         |      |         |         |      |   |         |         | 
|                           | Total sales             |      | $       | 429,389 |      |   | $       | 356,871 |  |   | $       | 350,829 | 
|                           |                         |      |         |         |      |   |         |         | 
|Long-Lived Assets          |                         |      |         |         |      |   |         |         |  |   |         |        
|United States              |                         | $    | 14,549  |         |      | $ | 15,843  |         |  | $ | 16,335  |        
|Austria                    |                         |      | 1,325   |         |      |   | 1,893   |         |  |   | 6,839   |        
|Ireland                    |                         |      | 1,443   |         |      |   | 2,967   |         |  |   | 6,519   |        
|Peoples Republic of China |                         |      | 35,938  |         |      |   | 32,026  |         |  |   | 35,767  |        
|Other foreign countries    |                         |      | 12,869  |         |      |   | 11,481  |         |  |   | 13,171  |        
|                           |                         |      |         |         |      |   |         |         | 
|                           | Total long-lived assets |      | $       | 66,124  |      |   | $       | 64,210  |  |   | $       | 78,631  | 
|                           |                         |      |         |         |      |   |         |         | 
|Net Assets                 |                         |      |         |         |      |   |         |         |  |   |         |        
|United States              |                         | $    | 61,998  |         |      | $ | 43,940  |         |  | $ | 23,382  |        
|Austria                    |                         |      | 13,206  |         |      |   | 16,175  |         |  |   | 24,244  |        
|Ireland                    |                         |      | 1,104   |         |      |   | 2,925   |         |  |   | 14,303  |        
|Peoples Republic of China |                         |      | 41,020  |         |      |   | 31,021  |         |  |   | 35,918  |        
|Other foreign countries    |                         |      | 16,648  |         |      |   | 19,976  |         |  |   | 25,599  |        
|                           |                         |      |         |         |      |   |         |         | 
|                           | Net assets              |      | $       | 133,976 |      |   | $       | 114,037 |  |   | $       | 123,446 | 
|                           |                         |      |         |         |      |   |         |         | 



|    |                         
|--- | ------------------------
|16. | Issuance of Common Stock





|    |                                   
|--- | ----------------------------------
|17. | Supplemental Cash Flow Disclosures

|                               |              |      |   |       |      |  |   |       |  |  |   |       | 
|------------------------------ | ------------ | ---- | - | ----- | ---- |  | - | ----- |  |  | - | ----- | 
|                               |              | 2004 |   |       | 2003 |  |   | 2002  | 
|                               |              |      |   |       |      |  |   |       | 
|Cash paid during the year for: |              |      |   |       |      |  |   |       |  |  |   |      
|                               | Interest     |      | $ | 4,978 |      |  | $ | 1,410 |  |  | $ | 3,816 | 
|                               |              |      |   |       |      |  |   |       | 
|                               | Income taxes |      | $ | 1,777 |      |  | $ | 102   |  |  | $ | 387   | 
|                               |              |      |   |       |      |  |   |       | 

58



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##### 



ARTESYN TECHNOLOGIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






|    |                   
|--- | ------------------
|18. | Earnings Per Share



|                                                                         |                               |      |        |       |      |   |         |      |  |   |          |   | 
|------------------------------------------------------------------------ | ----------------------------- | ---- | ------ | ----- | ---- | - | ------- | ---- |  | - | -------- | - | 
|                                                                         |                               | 2004 |        |       | 2003 |   |         | 2002 | 
|                                                                         |                               |      |        |       |      |   |         |      | 
|Numerator:                                                               |                               |      |        |       |      |   |         |      |  |   |          |  
|Numerator for basic earnings per share  net income
    (loss)           |                               | $    | 13,873 |       |      | $ | (15,622 | )    |  | $ | (108,822 | )
|Effect of potential common shares:                                       |                               |      |        |       |      |   |         |      |  |   |          |  
|                                                                         | convertible subordinated debt |      |        | 3,431 |      |   |         |     |  |   |          |  | 
|                                                                         |                               |      |        |       |      |   |         |      | 
|Numerator for diluted earnings per share  net income
    (loss)         |                               | $    | 17,304 |       |      | $ | (15,622 | )    |  | $ | (108,822 | )
|                                                                         |                               |      |        |       |      |   |         |      | 
|Denominator:                                                             |                               |      |        |       |      |   |         |      |  |   |          |  
|Denominator for basic earnings per share  weighted
    average shares   |                               |      | 39,093 |       |      |   | 38,678  |      |  |   | 38,370   |  
|Net effect of dilutive stock options                                     |                               |      | 887    |       |      |   |        |      |  |   |         |  
|Assumed conversion of convertible subordinated debt                      |                               |      | 11,160 |       |      |   |        |      |  |   |         |  
|                                                                         |                               |      |        |       |      |   |         |      | 
|Denominator for diluted earnings per share  weighted
    average shares |                               |      | 51,140 |       |      |   | 38,678  |      |  |   | 38,370   |  
|                                                                         |                               |      |        |       |      |   |         |      | 
|Basic earnings (loss) per share                                          |                               | $    | 0.35   |       |      | $ | (0.40   | )    |  | $ | (2.84    | )
|                                                                         |                               |      |        |       |      |   |         |      | 
|Diluted earnings (loss) per share                                        |                               | $    | 0.34   |       |      | $ | (0.40   | )    |  | $ | (2.84    | )
|                                                                         |                               |      |        |       |      |   |         |      | 
|Antidilutive weighted shares                                             |                               |      | 4,210  |       |      |   | 15,433  |      |  |   | 12,844   |  
|                                                                         |                               |      |        |       |      |   |         |      | 





|    |         
|--- | --------
|19. | Goodwill



|                         |  |              |         |   |              |   |         |  
|------------------------ |  | ------------ | ------- | - | ------------ | - | ------- | -
|                         |  | December 31, |         |   | December 26, |  
|                         |  | 2004         |         |   | 2003         |  
|                         |  |              |         |   |              |  
|Goodwill                 |  | $            | 39,475  |   |              | $ | 37,194  |  
|Accumulated amortization |  |              | (17,368 | ) |              |   | (16,388 | )
|                         |  |              |         |   |              |  
|Goodwill, net            |  | $            | 22,107  |   |              | $ | 20,806  |  
|                         |  |              |         |   |              |  



59



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##### 



ARTESYN TECHNOLOGIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)








|    |                           
|--- | --------------------------
|20. | Related Party Transactions





|    |                                                 
|--- | ------------------------------------------------
|21. | Selected Consolidated Quarterly Data (Unaudited)



|                              |  |         |        |   |         |   |         |         |  |   |         |   |  |   |         |    
|----------------------------- |  | ------- | ------ | - | ------- | - | ------- | ------- |  | - | ------- | - |  | - | ------- | ---
|                              |  | First   |        |   | Second  |   |         | Third   |  |   | Fourth  |  
|                              |  | Quarter |        |   | Quarter |   |         | Quarter |  |   | Quarter |  
|                              |  |         |        |   |         |   |         |         |  |   |         |  
|Fiscal 2004                   |  |         |        |   |         |   |         |         |  |   |         |   |  |   |         |    
|Sales                         |  | $       | 96,513 |   |         | $ | 105,497 |         |  | $ | 107,013 |   |  | $ | 120,366 |    
|Gross profit                  |  |         | 24,473 |   |         |   | 26,472  |         |  |   | 27,634  |   |  |   | 31,053  |    
|Net income                    |  |         | 1,917  |   |         |   | 3,078   |         |  |   | 3,609   |   |  |   | 5,269   |    
|Per share  basic             |  |         | 0.05   |   |         |   | 0.08    |         |  |   | 0.09    |   |  |   | 0.13    |    
|Per share  diluted           |  |         | 0.05   |   |         |   | 0.08    |         |  |   | 0.09    |   |  |   | 0.12    |    
|Fiscal 2003                   |  |         |        |   |         |   |         |         |  |   |         |   |  |   |         |    
|Sales                         |  | $       | 81,856 |   |         | $ | 87,644  |         |  | $ | 88,035  |   |  | $ | 99,336  |    
|Gross profit                  |  |         | 13,390 |   |         |   | 15,346  |         |  |   | 18,237  |   |  |   | 22,281  |    
|Net income (loss)             |  |         | (7,459 | ) |         |   | (4,155  | )       |  |   | (5,244  | ) |  |   | 1,236   | (1)
|Per share  basic and diluted |  |         | (0.19  | ) |         |   | (0.11   | )       |  |   | (0.14   | ) |  |   | 0.03    |    



60



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##### 



ARTESYN TECHNOLOGIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






|        |                                                                                         
|------- | ----------------------------------------------------------------------------------------
|Item 9. | Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure





|         |                        
|-------- | -----------------------
|Item 9A. | Controls and Procedures

Evaluation of Disclosure Controls and Procedures








Changes in Internal Control over Financial Reporting




Item 9B.     Other
Information






| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 1) | The payout of the 2004 Executive Incentive Program
    (2004 EIP) in the amount of $4,592,000. The 2004 EIP
    is a bonus program pursuant to which financial targets and bonus
    amounts were set at the beginning of 2004. The payout was based
    on the achievement of five out of six internal and external
    financial performance goals.                                                                                                                                                                                                                                                                                                         
|
| | 2) | The 2005 Executive Incentive Program (2005 EIP) was
    approved. The 2005 EIP is an annual executive bonus program
    designed to provide incentives to management to achieve
    specified performance objectives. The 2005 EIP contains
    four criteria, which incorporate both internal and external
    performance measurements. The criteria are  revenue
    improvement over 2004, improvement in earnings before interest,
    taxes, depreciation and amortization, improvement in cash, and
    revenue growth over 2004 relative to a peer group of ten
    competitors. A description of the approved plan is attached as
    Exhibit 10.25.
|
| | 3) | Amended and Restated Employment Agreements with Joseph
    ODonnell, our Chairman, Chief Executive Officer and
    President, and Richard Thompson, our Chief Financial Officer.
    The amended and restated agreements update certain terms of the
    agreements, such as base salary and target bonus, to current
    numbers and provide (a) that Messrs. ODonnells                                                                                                                                                                                                                                                                                   

61



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##### 



| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | and Thompsons accrued employee managed time
    off be paid upon termination of employment for any
    reason  which is the current company policy for all
    employees  and that Mr. ODonnells
    accrual is subject to a cap of 800 hours, (b) that
    Messrs. ODonnells and Thompsons existing
    car allowance will be included in the severance benefits payable
    after specified termination events, and (c) that in the
    event of Messrs. ODonnells or Thompsons
    termination without cause or resignation for a substantial
    breach of the agreement by the company after a change of
    control, he will receive a cash payment equal to the value of
    the medical and other employee benefits that he otherwise would
    have received over the course of three years rather than a
    continuation of such benefits. The amended and restated
    agreements are attached as Exhibits 10.5 and 10.6.





PART III




|         |                                 
|-------- | --------------------------------
|Item 10. | Directors and Executive Officers



www.artesyn.com,


Item 11.     Executive
Compensation




62



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##### 





|         |                                                                                                   
|-------- | --------------------------------------------------------------------------------------------------
|Item 12. | Security Ownership of Certain Beneficial Owners and
    Management and Related Stockholder Matters





|         |                                               
|-------- | ----------------------------------------------
|Item 13. | Certain Relationships and Related Transactions





|         |                                       
|-------- | --------------------------------------
|Item 14. | Principal Accounting Fees and Services



PART IV




|         |                                           
|-------- | ------------------------------------------
|Item 15. | Exhibits and Financial Statement Schedules



| |     |                                                                 
| | --- | ----------------------------------------------------------------
| | (a) | Financial Statements, Financial Statement Schedules and Exhibits



| |                         
| | ------------------------
| | (1) Financial Statements



|                                                                                                         |  |      |    | 
|-------------------------------------------------------------------------------------------------------- |  | ---- | -- | 
|Description                                                                                              |  | Page |   
|                                                                                                         |  |      |   
|Report of Management on Internal Control Over Financial Reporting                                        |  |      | 32 | 
|Report of Independent Registered Public Accounting Firm on
    Internal Control Over Financial Reporting |  |      | 33 | 
|Report of Independent Registered Public Accounting Firm                                                  |  |      | 34 | 
|Consolidated Balance Sheets                                                                              |  |      | 35 | 
|Consolidated Statements of Operations                                                                    |  |      | 36 | 
|Consolidated Statements of Shareholders Equity and
    Comprehensive Income (Loss)                      |  |      | 37 | 
|Consolidated Statements of Cash Flows                                                                    |  |      | 38 | 
|Notes to Consolidated Financial Statements                                                               |  |      | 39 | 



| |                                  
| | ---------------------------------
| | (2) Financial Statement Schedules



|                                                |  |  |    | 
|----------------------------------------------- |  |  | -- | 
|Schedule II  Valuation and Qualifying Accounts |  |  | 67 | 





| |                                                        
| | -------------------------------------------------------
| | (3) Exhibits Required by Item 601 of
    Regulation S-K

63



---



##### 



|          |   |     |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|--------- | - | --- | ----------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit # |   |     | Description
|          |   |     |            
|          | 3 | .1  |             | By-laws of the Company, as amended, effective October 16,
    1990  incorporated by reference to Exhibit 3.2
    of Registrants Registration Statement on Form S-4,
    filed with the SEC on September 25, 1997, as amended.                                                                                                                                                                                                                 
|          | 3 | .2  |             | Articles of Incorporation of the Company 
    incorporated by reference to Exhibit 3.1 of
    Registrants Annual Report on Form 10-K for the fiscal
    year ended December 28, 1989.                                                                                                                                                                                                                                                         
|          | 3 | .3  |             | Articles of Amendment to Articles of Incorporation of the
    Company as of May 6, 1998  incorporated by
    reference to Exhibit 3.1 of the Registrants Current
    Report on Form 8-K filed on May 6, 1998.                                                                                                                                                                                                                                 
|          | 3 | .4  |             | Articles of Amendment to Articles of Incorporation of the
    Company, as amended on December 22, 1998 
    incorporated by reference to Exhibit 3.4 of
    Registrants Annual Report on Form 10-K for the fiscal
    year ended January 1, 1999.                                                                                                                                                                                             
|          | 4 | .1  |             | Amended and Restated Rights Agreement, dated as of
    November 21, 1998, between the Company and The Bank of New
    York as Rights Agent, including the form of Right Certificate
    and the Summary of Rights to Purchase Preferred Shares attached
    thereto as Exhibits B and C, respectively 
    incorporated by reference to Exhibit 4.1 of
    Registrants Current Report on Form 8-K filed with the
    SEC on December 22, 1998.
|          | 4 | .2  |             | Amendment No. 1 to Amended and Restated Rights Agreement, dated
    as of October 22, 2004, between the Company and the Bank of
    New York.                                                                                                                                                                                                                                                                                                   
|          | 4 | .3  |             | Purchase Agreement between the Company, Lehman Brothers Inc. and
    Stephens Inc., dated August 7, 2003 
    incorporated by reference to Exhibit 4.1 of
    Registrants Form S-3 Registration Statement (File
    number 333-109053) filed with the SEC on September 23, 2003.                                                                                                                                                              
|          | 4 | .4  |             | Indenture between the Company and The Bank of New York, dated
    August 13, 2003  incorporated by reference to
    Exhibit 4.2 of Registrants Form S-3 Registration
    Statement (File number 333-109053) filed with the SEC on
    September 23, 2003.                                                                                                                                                                                     
|          | 4 | .5  |             | Resale Registration Rights Agreement between the Company, Lehman
    Brothers Inc. and Stephens Inc. dated August 13,
    2003  incorporated by reference to Exhibit 4.3
    of Registrants Form S-3 Registration Statement (File
    number 333-109053) filed with the SEC on September 23, 2003.                                                                                                                                            
|          | 4 | .6  |             | Securities Purchase Agreement dated January 14, 2002, by
    and between Artesyn Technologies, Inc. and Finestar
    International Limited  incorporated by reference to
    Exhibit 4.1 of the Registrants Current Report on
    Form 8-K/A, filed with the SEC on January 24, 2002.                                                                                                                                                         
|          | 4 | .7  |             | 3% Convertible Note, due January 15, 2007, issued by
    Artesyn Technologies, Inc. to Finestar International
    Limited  incorporated by reference to
    Exhibit 4.2 of the Registrants Current Report on
    Form 8-K/A, filed with the SEC on January 24, 2002.                                                                                                                                                                          
|          | 4 | .8  |             | Warrant to Purchase Shares of Common Stock of Artesyn
    Technologies, Inc., dated January 15, 2002, issued by
    Artesyn Technologies, Inc. to Finestar International
    Limited  incorporated by reference to
    Exhibit 4.3 of Registrants Current Report on
    Form 8-K/A, filed with the SEC on January 24, 2002.                                                                                                                   
|          | 4 | .9  |             | Registration Rights Agreement, dated January 15, 2002, by
    and between Artesyn Technologies, Inc. and Finestar
    International Limited  incorporated by reference to
    Exhibit 4.4 of the Registrants Current Report on
    Form 8-K/A, filed with the SEC on January 24, 2002.                                                                                                                                                        
|          | 4 | .10 |             | Waiver of selected entitlements related to Registration Rights
    Agreement by and between Artesyn Technologies, Inc., a Florida
    corporation, and Finestar International Limited, a British
    Virgin Islands corporation.  incorporated by
    reference to Exhibit 10.1 of Registrants Quarterly
    report on Form 10-Q filed with the SEC on May 8, 2002.                                                                           
|          | 4 | .11 |             | Promissory Note Payoff Agreement, dated August 1, 2003, by
    and between Artesyn Technologies Inc., a Florida Corporation,
    and Finestar International Limited, a British Virgin Islands
    corporation  incorporated by reference to
    Exhibit 10.1 of the Registrants quarterly report on
    Form 10-Q filed with the SEC on November 7, 2003.                                                                                     

64



---



##### 



|          |    |     |             |                                                                                                                                                                                                                                                                                                                                                        
|--------- | -- | --- | ----------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit # |    |     | Description
|          |    |     |            
|          | 10 | .1  |             | Lease for facilities of Boschert, Incorporated located in
    Milpitas, California  incorporated by reference to
    Exhibit 10.14 of Registrants Annual Report on
    Form 10-K for the fiscal year ended January 3, 1986.                                                                                                                          
|          | 10 | .2  |             | Letter Amendment to Lease of Boschert, Incorporated facilities,
    located in Milpitas, California, dated January 9,
    1991  incorporated by reference to Exhibit 10.8
    of Registrants Annual Report on Form 10-K for the
    fiscal year ended December 28, 1990.                                                                             
|          | 10 | .3  |             | Sublease for facilities of Boschert, Incorporated located in
    Milpitas, California  incorporated by reference to
    Exhibit 10.8 of Registrants Annual Report on
    Form 10-K for the fiscal year ended January 1, 1988.                                                                                                                        
|          | 10 | .4  |             | Sublessee Estoppel Certificate to sublease for facilities of
    Boschert, Incorporated, located in Milpitas, California dated
    February 4, 1991,  incorporated by reference to
    Exhibit 10.10 of Registrants Annual Report on
    Form 10-K for the fiscal year ended December 28, 1990.                                                      
|          | 10 | .5  |             | Amended and Restated Employment Agreement, dated as of
    March 14, 2005, by and between Artesyn Technologies, Inc.
    and Joseph M. ODonnell.                                                                                                                                                                                                      
|          | 10 | .6  |             | Amended and Restated Employment Agreement, dated as of
    March 14, 2005, by and between Artesyn Technologies, Inc.
    and Richard J. Thompson.                                                                                                                                                                                                      
|          | 10 | .7  |             | Grant Agreement, dated October 26, 1994, by and among the
    Industrial Development Authority of Ireland, Power Products Ltd.
    and Computer Products, Inc.  incorporated by
    reference to Exhibit 10.43 of Registrants Annual
    Report on Form 10-K for the fiscal year ended
    December 30, 1994.                                        
|          | 10 | .8  |             | 1990 Performance Equity Plan, as amended 
    incorporated by reference to Exhibit 10.46 of
    Registrants Annual Report on Form 10-K for the fiscal
    year ended December 29, 1995.                                                                                                                                                              
|          | 10 | .9  |             | 2000 Performance Equity Plan, as amended and restated
    March 8, 2004.                                                                                                                                                                                                                                                                               
|          | 10 | .10 |             | Agreement by and between Superior Investments I, Inc. and the
    Company, dated January 22, 1996, regarding the leasing of
    certain premises and real property located in Broomfield,
    Colorado  incorporated by reference to
    Exhibit 10.27 to Form 10-K of Zytec Corporation for
    the year ended December 31, 1995. (File No. 0-22428).
|          | 10 | .11 |             | Third Addendum to Lease Agreement between Zytec Corporation and
    Superior Investments I, Inc., dated May 23,
    1997  incorporated by reference to Exhibit 10.2
    to Form 10-Q of Zytec Corporation for the quarter ended
    June 29, 1997.                                                                                                    
|          | 10 | .12 |             | Fourth Addendum to Lease Agreement between Zytec Corporation and
    Superior Investments I, Inc., dated June 27,
    1997  incorporated by reference to Exhibit 10.3
    to Form 10-Q of Zytec Corporation for the quarter ended
    June 29, 1997.                                                                                                  
|          | 10 | .13 |             | Amended and Restated 1990 Outside Directors Stock Option Plan,
    as amended January 29, 2004.                                                                                                                                                                                                                                                        
|          | 10 | .14 |             | Outside Directors Retirement Plan effective October 17,
    1989, as amended January 25, 1994, August 15, 1996,
    January 29, 1998 and October 28, 1999, incorporated by
    reference to Exhibit 10.31 of the Registrants Annual
    Report on Form 10-K for the period ended December 31,
    1999.                                               
|          | 10 | .15 |             | Stock Purchase Agreement, dated July 31, 2000, by and among
    Artesyn Technologies, Inc., Artesyn North America, Inc., and
    AzCore Technologies, Inc.  incorporated by reference
    to Exhibit 10.1 of the Registrants Quarterly Report
    on Form 10-Q for the quarterly period ended
    September 29, 2000.                                
|          | 10 | .16 |             | Share Purchase Agreement, dated March 10, 2000, by and among
    Artesyn Communications Products UK Ltd., and Zozma Investments
    Limited, and David Noble  incorporated by reference
    to Exhibit 10.33 of Registrants Annual Report of
    Form 10-K for the period ended December 29, 2000.                                                   
|          | 10 | .17 |             | Stock Purchase Agreement, dated January 12, 2001, by and
    among Artesyn Communications Products, Inc. and Real-Time
    Digital, Inc.  incorporated by reference to
    Exhibit 10.1 of the Registrants Quarterly Report on
    Form 10-Q for the quarterly period ended March 30,
    2001.                                                      

65



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##### 



|          |    |     |             |                                                                                                                                                                                                                                                                                                                                       
|--------- | -- | --- | ----------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit # |    |     | Description
|          |    |     |            
|          | 10 | .18 |             | Stock Purchase Agreement, dated November 20, 2001, by and among
    Artesyn Solutions, Inc., Artesyn North America, Inc. and
    Solectron Global Services, Inc.  incorporated by
    reference to Exhibit 10.40 of the Registrants Annual
    Report on Form 10-K filed with the SEC on March 8,
    2002.                         
|          | 10 | .19 |             | Amendment to Stock Purchase Agreement dated November 20,
    2001, by and among Artesyn Solutions, Inc., Artesyn North
    America, Inc. and Solectron Global Services, Inc. 
    incorporated by reference to Exhibit 10.41 of the
    Registrants Annual Report on Form 10-K filed with the
    on March 8, 2002.                 
|          | 10 | .20 |             | Loan and Security Agreement dated March 28, 2003 by and among
    Fleet Capital Corporation, Artesyn Technologies, Inc. and
    certain of its subsidiaries  incorporated by
    reference to Exhibit 10.1 of the Registrants current
    report on Form 8-K, filed with the Commission April 3,
    2003.                          
|          | 10 | .21 |             | Amendment No. 2 to Loan and Security Agreement and Consent, by
    and among Fleet Capital Corporation, Artesyn Technologies, Inc.
    and certain of its subsidiaries entered into as of
    August 13, 2003.                                                                                                                        
|          | 10 | .22 |             | Supplemental agreement made the 5th day of September 2003
    between the Industrial Development Agency (Ireland), Artesyn
    International Limited, and Artesyn Technologies,
    Inc.  incorporated by reference to Exhibit 10.2
    of the Registrants quarterly report on Form 10-Q
    filed with the SEC on November 7, 2003.
|          | 10 | .23 |             | Form of agreement for stock option awards under the
    Registrants 2000 Performance Equity Plan, as amended and
    restated effective March 8, 2004.                                                                                                                                                                               
|          | 10 | .24 |             | Form of agreement for stock option awards under the
    Registrants Amended and Restated 1990 Outside Directors
    Stock Option Plan, as amended January 29, 2004.                                                                                                                                                                  
|          | 10 | .25 |             | Description of the 2005 Executive Incentive Program.                                                                                                                                                                                                                                                                                  
|          | 10 | .26 |             | Severance Agreement, dated March 14, 2005, by and among
    Artesyn Technologies, Inc. and Scott McCowan.                                                                                                                                                                                                                             
|          | 10 | .27 |             | Severance Agreement, dated July 6, 2001, by and among
    Artesyn Technologies, Inc. and Ken Blake.                                                                                                                                                                                                                                   
|          | 10 | .28 |             | Form of Directors Retirement Agreement.                                                                                                                                                                                                                                                                                              
|          | 21 |     |             | List of subsidiaries of the Company.                                                                                                                                                                                                                                                                                                  
|          | 23 | .1  |             | Consent of Ernst & Young LLP, Independent Registered Public
    Accounting Firm.                                                                                                                                                                                                                                                      
|          | 31 | .1  |             | Certification by the Chief Executive Officer pursuant to
    pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                               
|          | 31 | .2  |             | Certification by the Chief Financial Officer pursuant to
    pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                               
|          | 32 | .1  |             | Certification by the Chief Executive Officer pursuant to
    18 U.S.C. Section 1350, as adopted, pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                       
|          | 32 | .2  |             | Certification by the Chief Financial Officer pursuant to
    18 U.S.C. Section 1350, as adopted, pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                       

66



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##### 



SCHEDULE II  VALUATION AND QUALIFYING
ACCOUNTS


For the Years Ended on the Friday Nearest December 31
($000s)


|                                            |                      |            |        |           |            |   |            |            |  |  |             |  |            |        |    |   |        |   |        |  |  |   |        |  | 
|------------------------------------------- | -------------------- | ---------- | ------ | --------- | ---------- | - | ---------- | ---------- |  |  | ----------- |  | ---------- | ------ | -- | - | ------ | - | ------ |  |  | - | ------ |  | 
|COLUMN A                                    |                      | COLUMN B   |        |           | COLUMN C   |   |            | COLUMN D   |  |  | COLUMN E    | 
|                                            |                      |            |        |           |            |   |            |            |  |  |             | 
|                                            |                      |            |        | Additions |            |   | Deductions |            |  | 
|                                            |                      |            |        |           |            |   |            |            |  | 
|                                            |                      | Balance at |        |           | Charged to |   |            | Charged to |  |  |             |  | Balance at |       
|                                            |                      | Beginning  |        |           | Costs &    |   |            | Other      |  |  |             |  | End of     |       
|Description                                 |                      | of Period  |        |           | Expenses   |   |            | Accounts   |  |  | Description |  |            | Amount |    |   | Period |  
|                                            |                      |            |        |           |            |   |            |            |  |  |             |  |            |        |    |   |        |  
|Fiscal Year 2004:                           |                      |            |        |           |            |   |            |            |  |  |             |  |            |        |    |   |        |   |        |  |  |   |        | 
|Reserve deducted from asset                 |                      |            |        |           |            |   |            |            |  |  |             |  |            |        |    |   |        |   |        |  |  |   |        | 
|                                            | To which it applies: |            |        |           |            |   |            |            |  |  |             |  |            |        |    |   |        |   |        |  |  |   |        |  | 
|Accounts Receivable allowances              |                      | $          | 2,831  |           |            | $ | 1,436      |            |  |  |            |  |            |        | (1 | ) |        | $ | 2,634  |  |  | $ | 1,633  | 
|Inventory valuation reserve                 |                      |            | 23,700 |           |            |   | 4,397      |            |  |  |            |  |            |        | (1 | ) |        |   | 8,445  |  |  |   | 19,652 | 
|Valuation allowance for deferred tax assets |                      |            | 12,415 |           |            |   | 3,760      |            |  |  |            |  |            |        |    |   |        |   |       |  |  |   | 16,175 | 
|Fiscal Year 2003:                           |                      |            |        |           |            |   |            |            |  |  |             |  |            |        |    |   |        |   |        |  |  |   |        | 
|Reserve deducted from asset                 |                      |            |        |           |            |   |            |            |  |  |             |  |            |        |    |   |        |   |        |  |  |   |        | 
|                                            | To which it applies: |            |        |           |            |   |            |            |  |  |             |  |            |        |    |   |        |   |        |  |  |   |        |  | 
|Accounts Receivable allowances              |                      | $          | 3,121  |           |            | $ | 1,418      |            |  |  |            |  |            |        | (1 | ) |        | $ | 1,708  |  |  | $ | 2,831  | 
|Inventory valuation reserve                 |                      |            | 39,451 |           |            |   | 1,874      |            |  |  |            |  |            |        | (1 | ) |        |   | 17,625 |  |  |   | 23,700 | 
|Valuation allowance for deferred tax assets |                      |            | 10,733 |           |            |   | 1,682      |            |  |  |            |  |            |        |    |   |        |   |       |  |  |   | 12,415 | 
|Fiscal Year 2002:                           |                      |            |        |           |            |   |            |            |  |  |             |  |            |        |    |   |        |   |        |  |  |   |        | 
|Reserve deducted from asset                 |                      |            |        |           |            |   |            |            |  |  |             |  |            |        |    |   |        |   |        |  |  |   |        | 
|                                            | To which it applies: |            |        |           |            |   |            |            |  |  |             |  |            |        |    |   |        |   |        |  |  |   |        |  | 
|Accounts Receivable allowances              |                      | $          | 4,140  |           |            | $ | 356        |            |  |  |            |  |            |        | (1 | ) |        | $ | 1,375  |  |  | $ | 3,121  | 
|Inventory valuation reserve                 |                      |            | 37,212 |           |            |   | 25,818     |            |  |  |            |  |            |        | (1 | ) |        |   | 23,579 |  |  |   | 39,451 | 
|Valuation allowance for deferred tax assets |                      |            | 2,910  |           |            |   | 7,823      |            |  |  |            |  |            |        |    |   |        |   |       |  |  |   | 10,733 | 






|    |                                      
|--- | -------------------------------------
|(1) | The reduction relates to charge-offs.

67



---



##### 



SIGNATURES






| |                           
| | --------------------------
| | Artesyn Technologies, Inc.
| | (Company)                 



| |     |                            
| | --- | ---------------------------
| | By: | /s/ Joseph M.
    ODonnell

| |                                      
| | -------------------------------------
| |                                      
| | Joseph M. ODonnell                  
| | Chairman of the Board,               
| | President and Chief Executive Officer





|                                                       |  |                                                                                |  |      |                | 
|------------------------------------------------------ |  | ------------------------------------------------------------------------------ |  | ---- | -------------- | 
|Signature                                              |  | Title                                                                          |  | Date |               
|                                                       |  |                                                                                |  |      |               
|/s/ Joseph M.
    ODonnellJoseph
    M. ODonnell     |  | Chairman of the Board, President and Chief Executive Officer,
    and Director |  |      | March 16, 2005 | 
|                                                      
|/s/ Richard J. ThompsonRichard
    J. Thompson         |  | Vice President  Finance, Chief Financial Officer, and
    Secretary           |  |      | March 16, 2005 | 
|                                                      
|/s/ Edward S. Croft,
    IIIEdward
    S. Croft, III   |  | Director                                                                       |  |      | March 16, 2005 | 
|                                                      
|/s/ Lawrence J.
    MatthewsLawrence
    J. Matthews   |  | Director                                                                       |  |      | March 16, 2005 | 
|                                                      
|/s/ Stephen A.
    OllendorffStephen
    A. Ollendorff |  | Director                                                                       |  |      | March 16, 2005 | 
|                                                      
|/s/ Phillip A.
    OReillyPhillip
    A. OReilly     |  | Director                                                                       |  |      | March 16, 2005 | 
|                                                      
|/s/ Bert SagerBert
    Sager                           |  | Director                                                                       |  |      | March 16, 2005 | 
|                                                      
|/s/ A. Eugene Sapp, Jr.A.
    Eugene Sapp, Jr.         |  | Director                                                                       |  |      | March 16, 2005 | 
|                                                      
|/s/ Ronald D. SchmidtRonald
    D. Schmidt             |  | Director                                                                       |  |      | March 16, 2005 | 

68



---



##### 



|                                   |  |          |  |      |                | 
|---------------------------------- |  | -------- |  | ---- | -------------- | 
|Signature                          |  | Title    |  | Date |               
|                                   |  |          |  |      |               
|/s/ Lewis SolomonLewis
    Solomon |  | Director |  |      | March 16, 2005 | 
|                                  
|/s/ John M. SteelJohn
    M. Steel |  | Director |  |      | March 16, 2005 | 

69



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##### 



INDEX TO EXHIBITS


|        |       |  |             |                                                                                                                                                                     
|------- | ----- |  | ----------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |       |  |            
|No.     |       |  | Description
|        |       |  |            
|        | 4.2   |  |             | Amendment No. 1 to Amended and Restated Rights Agreement,
    dated as of October 22, 2004, between the Company and the
    Bank of New York.                       
|        | 10.5  |  |             | Amended and Restated Employment Agreement, dated as of
    March 14, 2005, by and between Artesyn Technologies, Inc.,
    and Joseph M. ODonnell.                  
|        | 10.6  |  |             | Amended and Restated Employment Agreement, dated as of
    March 14, 2005, by and between Artesyn Technologies, Inc.,
    and Richard J. Thompson.                  
|        | 10.9  |  |             | 2000 Performance Equity Plan, as amended and restated
    March 8, 2004.                                                                                            
|        | 10.13 |  |             | Amended and restated 1990 Outside Directors Stock Option Plan,
    as amended January 29, 2004.                                                                     
|        | 10.21 |  |             | Amendment No. 2 to Loan and Security Agreement and Consent,
    entered into as of August 13, 2003.                                                                 
|        | 10.23 |  |             | Form of agreement for stock option awards under the
    Registrants 2000 Performance Equity Plan, as amended and
    restated effective March 8, 2004.             
|        | 10.24 |  |             | Form of agreement for stock option awards under the
    Registrants Amended and Restated 1990 Outside Directors
    Stock Option Plan, as amended January 29, 2004.
|        | 10.25 |  |             | Description of the 2005 Executive Incentive Program.                                                                                                                
|        | 10.26 |  |             | Severance Agreement, dated March 14, 2005, by and among
    Artesyn Technologies, Inc. and Scott McCowan.                                                           
|        | 10.27 |  |             | Severance Agreement, dated July 6, 2001, by and among
    Artesyn Technologies, Inc. and Ken Blake.                                                                 
|        | 10.28 |  |             | Form of Directors Retirement Agreement.                                                                                                                            
|        | 21    |  |             | List of subsidiaries of the Company.                                                                                                                                
|        | 23.1  |  |             | Consent of Ernst & Young LLP, Independent Registered Public
    Accounting Firm                                                                                     
|        | 31.1  |  |             | Certification by the Chief Executive Officer pursuant to Section
    302 of the Sarbanes-Oxley Act of 2002.                                                         
|        | 31.2  |  |             | Certification by the Chief Financial Officer pursuant to Section
    302 of the Sarbanes-Oxley Act of 2002.                                                         
|        | 32.1  |  |             | Certification by the Chief Executive Officer pursuant to 18
    U.S.C. Section 1350, as adopted, pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.     
|        | 32.2  |  |             | Certification by the Chief Financial Officer pursuant to 18
    U.S.C. Section 1350, as adopted, pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.     

70