##### Table of Contents



UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
  Form 10-Q
  (Mark One)þ

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended
    February 24, 2006oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          
    to   Commission file number 1-11098
  SOLECTRON CORPORATION
 (Exact name of registrant as
    specified in its charter)
  Delaware

94-2447045(State or Other Jurisdiction
    of
    Incorporation or Organization)

(I.R.S. Employer
    Identification Number)   847 Gibraltar Drive
 Milpitas, California 95035
 (Address of principal executive
    offices including zip code)
  (408) 957-8500
 (Registrants telephone
    number, including area code)
   þ o
  Rule 12b-2
 þ o o
  Rule 12b-2 o þ
    one-to-one




---



##### 



SOLECTRON
    CORPORATION
   INDEX TO
    FORM 10-Q
  PART I.
    FINANCIAL INFORMATIONItem 1.

Financial
    Statements (unaudited)


3Condensed
    Consolidated Balance Sheets at February 28, 2006 and
    August 31, 2005


3Condensed
    Consolidated Statements of Operations for the three and six
    months ended February 28, 2006 and 2005


4Condensed
    Consolidated Statements of Comprehensive Income for the three
    and six months ended February 28, 2006 and 2005


5Condensed
    Consolidated Statements of Cash Flows for the six months ended
    February 28, 2006 and 2005


6Notes to Condensed
    Consolidated Financial Statements


7Item 2.

Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations


29Item 3.

Quantitative and
    Qualitative Disclosures About Market Risk


51Item 4.

Controls and
    Procedures


51PART II.
    OTHER INFORMATIONItem 1.

Legal
    Proceedings


51Item 2.

Purchase of Equity
    Securities


51Item 6.

Exhibits


51Signatures


53EXHIBIT 10.1EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1EXHIBIT 32.2   2




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##### Table of Contents



PART I.
    FINANCIAL INFORMATION  Item 1.
    Financial
    Statements  SOLECTRON
    CORPORATION AND SUBSIDIARIES
 CONDENSED CONSOLIDATED BALANCE SHEETS  February 28


August 312006


2005(Unaudited)(In millions)ASSETSCurrent assets:Cash, cash equivalents and
    short-term investments*

$
1,526.8


$
1,722.3Accounts receivable, net


1,177.7



1,180.7Inventories


1,346.1



1,108.5Prepaid expenses and other current
    assets


233.2



211.4Total current assets


4,283.8



4,222.9Property and equipment, net


681.7



666.3Goodwill


147.6



148.8Other assets


221.8



219.8Total assets

$
5,334.9


$
5,257.8LIABILITIES AND
    STOCKHOLDERS EQUITYCurrent liabilities:Short-term debt

$
228.5


$
165.7Accounts payable


1,430.3



1,371.2Accrued employee compensation


143.3



167.0Accrued expenses and other current
    liabilities


472.1



509.6Total current liabilities


2,274.2



2,213.5Long-term debt


628.0



540.9Other long-term liabilities


79.6



59.2Total liabilities

$
2,981.8


$
2,813.6Commitments and contingenciesStockholders equity:Common stock


1.0



1.0Additional paid-in capital


7,619.6



7,774.1Accumulated deficit


(5,152.1
)


(5,206.5
)Accumulated other comprehensive
    loss


(115.4
)


(124.4
)Total stockholders equity


2,353.1



2,444.2Total liabilities and
    stockholders equity

$
5,334.9


$
5,257.8     *
    
    Includes $31.2 million and $13.2 million of restricted
    cash balances as of February 28, 2006 and August 31,
    2005, respectively, and $15.0 million and
    $26.3 million of short term investments as of
    February 28, 2006 and August 31, 2005, respectively.   3




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##### Table of Contents



SOLECTRON
    CORPORATION AND SUBSIDIARIES
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS  Three Months Ended February
    28


Six Months Ended February
    282006


2005


2006


2005(In millions, except


(In millions, exceptper share data)


per share data)(Unaudited)


(Unaudited)Net sales

$
2,499.6


$
2,756.0


$
4,956.0


$
5,446.6Cost of sales


2,370.6



2,598.1



4,701.4



5,133.2Gross profit


129.0



157.9



254.6



313.4Operating expenses:Selling, general and administrative


104.3



104.7



211.7



200.3Restructuring and impairment costs


5.6



43.2



6.5



43.9Operating income


19.1



10.0



36.4



69.2Interest income


12.3



9.1



24.4



14.9Interest expense


(6.9
)


(16.7
)


(13.6
)


(33.0
)Other (expense)
    income  net


(1.9
)


1.1







5.8Operating income from continuing
    operations before income taxes


22.6



3.5



47.2



56.9Income tax expense


5.5



6.6



9.9



12.5Income (loss) from continuing
    operations

$
17.1


$
(3.1
)

$
37.3


$
44.4Discontinued operations:Income from discontinued operations

$
13.3


$
0.9


$
17.1


$
13.3Income tax expense














1.7Income from discontinued operations


13.3



0.9



17.1



11.6Net income (loss)

$
30.4


$
(2.2
)

$
54.4


$
56.0Basic net income (loss) per shareContinuing operations

$
0.02


$
(0.00
)

$
0.04


$
0.05Discontinued operations


0.01



0.00



0.02



0.01Basic net income (loss) per share

$
0.03


$
(0.00
)

$
0.06


$
0.06Diluted net income (loss) per shareContinuing operations

$
0.02


$
(0.00
)

$
0.04


$
0.05Discontinued operations


0.01



0.00



0.02



0.01Diluted net income (loss) per share

$
0.03


$
(0.00
)

$
0.06


$
0.06Shares used to compute basic net
    income per share


908.8



977.1



917.3



966.7Shares used to compute diluted net
    income per share


909.7



977.1



918.1



970.6    4




---



##### Table of Contents



SOLECTRON
    CORPORATION AND SUBSIDIARIES
 CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME  Three Months


Six MonthsEnded


EndedFebruary 28


February 282006


2005


2006


2005(In millions)
    (Unaudited)


(In millions)
    (Unaudited)Net income (loss)

$
30.4


$
(2.2
)

$
54.4


$
56.0Other comprehensive income:Foreign currency translation
    adjustments, net


8.6



17.6



9.0



25.8Comprehensive income

$
39.0


$
15.4


$
63.4


$
81.8      5




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##### Table of Contents



SOLECTRON
    CORPORATION AND SUBSIDIARIES
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS  Six Months Ended February
    282006


2005(In millions)(Unaudited)(Revised)Cash flows from operating
    activities:Net income

$
54.4


$
56.0Adjustments to reconcile net income
    to net cash (used in) provided by operating activities:Earnings from discontinued
    operations


(17.1
)


(11.6
)Depreciation and amortization


87.5



101.3Impairment of property, equipment
    and other long-term assets, net


10.4



40.8Gain on disposal of property and
    equipment


(0.1
)


(0.1
)Stock based compensation


10.2



1.5Changes in operating assets and
    liabilities:Accounts receivable, net of
    allowance


4.5



161.3Inventories


(237.4
)


213.9Prepaid expenses and other current
    assets


(27.4
)


14.9Accounts payable


59.0



(55.5
)Accrued expenses and other current
    liabilities


(14.0
)


(45.9
)Net cash (used in) provided by
    operating activities of continuing operations


(70.0
)


476.6Net cash used in operating
    activities of discontinued operations


(8.2
)


(5.9
)Net cash (used in) provided by
    operating activities


(78.2
)


470.7Cash flows from investing
    activities:Sale of available for sale
    securities


11.3



Change in restricted cash and cash
    equivalents


(18.0
)


(2.9
)Settlement of receivable related to
    synthetic lease






19.9Capital expenditures


(109.7
)


(66.1
)Proceeds from sale of property and
    equipment


4.4



9.3Proceeds from sale of investments






16.0Dispositions and receipts from
    discontinued operations


8.9



7.1Net cash used in investing
    activities of continuing operations


(103.1
)


(16.7
)Net cash provided by investing
    activities of discontinued operations


17.1



13.0Net cash used in investing
    activities


(86.0
)


(3.7
)Cash flows from financing
    activities:Net proceeds (repayment) of bank
    lines of credit and other debt arrangements


0.8



(16.5
)Proceeds from issuance of debt, net


147.4



Lyon repurchase


(2.0
)


(0.5
)Common stock repurchase


(180.4
)


(1.4
)Net proceeds from issuance of
    common stock






64.3Net proceeds from stock issued
    under option and employee purchase plans


5.1



8.1Net cash (used in) provided by
    financing activities of continuing operations


(29.1
)


54.0Net cash used in financing
    activities of discontinued operations


(8.9
)


(7.1
)Net cash (used in) provided by
    financing activities


(38.0
)


46.9Effect of exchange rate changes on
    cash and cash equivalents






10.7Net increase (decrease) in cash and
    cash equivalents


(202.2
)


524.6Cash and cash equivalents of
    continuing operations at beginning of period


1,682.8



1,412.7Cash and cash equivalents of
    discontinued operations at beginning of period






Total cash and cash equivalents at
    beginning of period


1,682.8



1,412.7Cash and cash equivalents
    continuing operations at end of period

$
1,480.6


$
1,937.3Cash and cash equivalents
    discontinued operations at end of period






Total cash and cash equivalents at
    end of period

$
1,480.6


$
1,937.3    6




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##### Table of Contents



SOLECTRON
    CORPORATION AND SUBSIDIARIES
  Notes
    to Condensed Consolidated Financial Statements
 (Unaudited)
  NOTE 1 
    Basis of
    Presentation and Recent Accounting Pronouncements  Basis
    of Presentation
  Form 10-K
        Research
    and Development Expenses
    Restricted
    Cash
    Recent
    Accounting Pronouncements
   7




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##### Table of Contents



SOLECTRON
    CORPORATION AND SUBSIDIARIES
  Notes to
    Condensed Consolidated Financial
    Statements  (Continued)
  and/or and/or
  Reclassifications
    NOTE 2 
    Revision
    of Statement of Cash Flows    Years Ended
    August 312005


2004


2003(In millions)(Revised)


(Revised)


(Revised)Cash flows from operating
    activities:Net income (loss)

$
3.4


$
(177.4
)

$
(3,452.6
)Adjustments to reconcile net
    income (loss) to net cash (used in) provided by operating
    activities:(Earnings) loss from discontinued
    operations


(13.9
)


(85.0
)


443.7Depreciation and amortization


193.3



276.3



330.3Loss (gain) on retirement of debt
    and interest rate swaps


45.6



72.1



(39.4
)Deferred tax charge


11.9



(12.0
)


528.9Impairment of goodwill and
    intangible assets






47.5



1,792.0Loss on disposal and impairment of
    property and equipment, net


46.6



60.2



157.5Other










(5.2
) 8




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##### Table of Contents



SOLECTRON
    CORPORATION AND SUBSIDIARIES
  Notes to
    Condensed Consolidated Financial
    Statements  (Continued)
  Years Ended
    August 312005


2004


2003(In millions)(Revised)


(Revised)


(Revised)Changes in operating assets and
    liabilities:Accounts receivable, net of
    allowance


362.9



(144.3
)


123.4Inventories


348.5



(134.1
)


420.4Prepaid expenses and other assets


11.0



6.8



106.9Accounts payable


(53.6
)


150.3



(132.0
)Accrued expenses and other current
    liabilities


(8.4
)


(69.0
)


7.1Net cash provided by (used in)
    operating activities of continuing operations


947.3



(8.6
)


281.0Net cash provided by operating
    activities of discontinued operations


22.4



2.9



109.4Net cash provided by (used in)
    operating activities


969.7



(5.7
)


390.4Cash flows from investing
    activities:Change in restricted cash and cash
    equivalents


4.3



44.5



169.8Sales and maturities of short-term
    investments


2.5



27.5



252.5Purchases of short-term investments


(28.8
)






(56.1
)Settlement of loan receivable
    related to synthetic lease


31.4







Acquisitions, net of cash acquired


(42.2
)






(49.3
)Divestitures










Capital expenditures


(150.4
)


(149.6
)


(124.6
)Proceeds from sale of property and
    equipment


32.1



68.9



60.1Dispositions and receipts from
    discontinued operations


38.9



505.6



84.1Supply agreement and other






0.2



48.3Net cash (used in) provided by
    investing activities of continuing operations


(112.2
)


497.1



384.8Net cash provided by (used in)
    investing activities of discontinued operations


16.5



466.3



(112.2
)Net cash (used in) provided by
    investing activities


(95.7
)


963.4



272.6 9




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##### Table of Contents



SOLECTRON
    CORPORATION AND SUBSIDIARIES
  Notes to
    Condensed Consolidated Financial
    Statements  (Continued)
  Years Ended
    August 312005


2004


2003(In millions)(Revised)


(Revised)


(Revised)Cash flows from financing
    activities:Proceeds used for ACES early
    settlement






(63.3
)


Net repayment of bank lines of
    credit and other debt arrangements


(23.8
)


(50.5
)


(85.0
)Proceeds from issuance of ACES and
    Senior Notes






436.5



Payments made to redeem ACES and
    Senior Notes


(544.7
)






Net (costs) proceeds to settle
    interest rate swap


(8.2
)


6.0



Repurchase of LYONS






(950.2
)


(967.5
)Common stock repurchase


(71.0
)






Net proceeds from issuance of
    common stock


77.7



111.1



7.8Other










28.4Net cash used in financing
    activities of continuing operations


(570.0
)


(510.4
)


(1,016.3
)Net cash used in financing
    activities of discontinued operations


(38.9
)


(507.4
)


(6.3
)Net cash used in financing
    activities


(608.9
)


(1,017.8
)


(1,022.6
)Effect of exchange rate changes on
    cash and cash equivalents


5.0



14.7



35.8Net increase (decrease) in cash
    and cash equivalents


270.1



(45.4
)


(323.8
)Cash and cash equivalents of
    continuing operations at beginning of period


1,412.7



1,425.3



1,742.9Cash and cash equivalents of
    discontinued operations at beginning of period






32.8



39.0Total cash and cash equivalents at
    beginning of period


1,412.7



1,458.1



1,781.9Cash and cash equivalents of
    continuing operations at end of period


1,682.8



1,412.7



1,425.3Cash and cash equivalents of
    discontinued operations at end of period










32.8Total cash and cash equivalents at
    end of period

$
1,682.8


$
1,412.7


$
1,458.1SUPPLEMENTAL DISCLOSURESCash paid (received) during the
    period:Income taxes

$
14.7


$
6.6


$
(199.6
)Interest

$
59.0


$
100.8


$
133.4Non-cash investing and financing
    activities:Early settlement of ACES for stock

$



$
1,006.6


$
Accrued stock repurchase

$
11.2


$



$
   NOTE 3 
    Stock-Based
    Compensation  No. 123-R, Share-Based Payment Accounting for
    Stock Issued to Employees,
 10




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##### Table of Contents



SOLECTRON
    CORPORATION AND SUBSIDIARIES
  Notes to
    Condensed Consolidated Financial
    Statements  (Continued)
        Three Months Ended


Six Months EndedFebruary 28, 2005


February 28, 2005Net income (loss):As reported

$
(2.2
)

$
56.0Fair value-based expense, net of
    tax

$
(43.1
)

$
(52.3
)Pro forma

$
(45.3
)

$
3.7Net income (loss) per common share:BasicAs reported

$
(0.00
)

$
0.06Pro Forma

$
(0.05
)

$
0.00DilutedAs reported

$
(0.00
)

$
0.06Pro Forma

$
(0.05
)

$
0.00  11




---



##### Table of Contents



SOLECTRON
    CORPORATION AND SUBSIDIARIES
  Notes to
    Condensed Consolidated Financial
    Statements  (Continued)
   Stock
    Options
      Six Months EndedThree Months Ended February
    28

February 28Stock Options

2006

2005

2006

2005Expected volatility

59%

69%

52%-59%

70%Dividends Yield

zero

zero

zero

zeroExpected life

4.32 years

3.9 years

4.32 years to 4.91 years

3.9 yearsRisk-free rate

4.35%

3.54%

4.26% to 4.35%

3.43%   Six Months EndedThree Months Ended February
    28

February 28Employee Stock Purchase
    Plan

2006

2005

2006

2005Weighted-average volatility

30%

39%

30%-44%

40%Dividends Yield

zero

zero

zero

zeroExpected life

6 months

6 months

6 months

6 monthsRisk-free rate

4.43%

2.68%

3.94%-4.43%

2.50%    12




---



##### Table of Contents



SOLECTRON
    CORPORATION AND SUBSIDIARIES
  Notes to
    Condensed Consolidated Financial
    Statements  (Continued)
    WeightedAverageWeighted


Remaining


AggregateAverage


Contractual


IntrinsicShares


Exercise Price


Term (Years)


Value(In millions)








(In millions)Balance, September 1, 2005


50.9


$
9.75Granted


1.1


$
3.77Cancelled


(2.8
)

$
10.60Balance, November 30, 2005


49.2


$
9.57



6.86Exercisable, November 30, 2005


37.5


$
11.34



6.21Balance, November 30, 2005


49.2


$
9.57



6.86Granted


1.1


$
3.74Cancelled


(2.3
)

$
10.18Balance, February 28, 2006


48.0


$
9.41



6.67


$
0.70Exercisable, February 28, 2006


36.8


$
11.09



6.02


$
0.60         Employee
    Stock Purchase Plan
    Restricted
    Stock Awards and Discounted Stock Options
   13




---



##### Table of Contents



SOLECTRON
    CORPORATION AND SUBSIDIARIES
  Notes to
    Condensed Consolidated Financial
    Statements  (Continued)
        Pro Forma
    Net Loss and Assumptions for Fiscal Years 2005 and
    2004
    Fiscal


Fiscal2005


2004(In millions, except per-share
    data)Net income (loss) as reported

$
3.4


$
(177.4
)Stock-based employee compensation
    expense determined under fair value method, net of related tax
    effects


(58.7
)


(60.5
)Pro forma net loss

$
(55.3
)

$
(237.9
)Net loss per shareBasic and
    diluted  as reported

$
0.00


$
(0.20
)Basic and
    diluted  pro forma

$
(0.06
)

$
(0.27
)    14




---



##### Table of Contents



SOLECTRON
    CORPORATION AND SUBSIDIARIES
  Notes to
    Condensed Consolidated Financial
    Statements  (Continued)
     Fiscal

Fiscal2005

2004Stock OptionsExpected life of options

4.5 years

3.9 yearsVolatility

57%

75%Risk-free interest rate

3.79%

2.30% to 3.06%Dividend yield

zero

zeroEmployee Stock Purchase
    PlanExpected life of purchase right

6 months

6 monthsVolatility

37%

77%Risk-free interest rate

2.90%

1.00% to 1.70%Dividend yield

zero

zero   NOTE 4 
    Stock
    Repurchase    NOTE 5 
    Inventories    February 28


August 312006


2005Raw materials

$
985.2


$
771.0Work-in-process


168.7



152.8Finished goods


192.2



184.7Total

$
1,346.1


$
1,108.5   NOTE 6 
    Accounts
    Receivable, Net    February 28


August 312006


2005Accounts Receivable

$
1,194.1


$
1,203.0Less: Allowance for doubtful
    accounts


16.4



22.3Accounts Receivable, net

$
1,177.7


$
1,180.7  15




---



##### Table of Contents



SOLECTRON
    CORPORATION AND SUBSIDIARIES
  Notes to
    Condensed Consolidated Financial
    Statements  (Continued)
   NOTE 7 
    Property
    and Equipment, Net    February 28


August 312006


2005Original Cost

$
1,843.0


$
1,818.3Less: Accumulated depreciation


1,161.3



1,152.0Total

$
681.7


$
666.3   NOTE 8 
    Commitments
    and Contingencies  Synthetic
    Leases
    30-day
     16




---



##### Table of Contents



SOLECTRON
    CORPORATION AND SUBSIDIARIES
  Notes to
    Condensed Consolidated Financial
    Statements  (Continued)
   Future
    Minimum Lease Obligations
    Payments Due by PeriodShort-


Q3 07-Total


Term


Q4 07


FY08


FY09


FY10


FY11


Thereafter(In millions)Operating lease

$
142.1


$
34.2


$
20.2


$
21.3


$
16.4


$
14.5


$
13.5


$
22.0   Legal
    Proceedings
    Abrams v. Solectron Corporation
    et al. No. C-03-0986
  NOTE 9 
    Segment
    Information and Geographic Information        Three Months Ended February
    28


Six Months Ended February
    282006


2005


2006


2005Geographic net sales:United States

$
808.5


$
828.8


$
1,605.2


$
1,615.2Other North and Latin America


385.6



448.0



743.6



921.7Europe


288.8



381.2



602.7



815.3Malaysia


515.3



514.7



1,012.1



951.2China


279.1



349.5



538.6



689.6Other Asia Pacific


222.3



233.8



453.8



453.6$
2,499.6


$
2,756.0


$
4,956.0


$
5,446.6   17




---



##### Table of Contents



SOLECTRON
    CORPORATION AND SUBSIDIARIES
  Notes to
    Condensed Consolidated Financial
    Statements  (Continued)
  February 28


August 312006


2005Long-lived assets:United States

$
299.7


$
314.3Other North and Latin America


165.7



165.7Europe


130.7



138.0Asia Pacific


299.7



275.8$
895.8


$
893.8     Three Months Ended February
    28


Six Months Ended February
    282006


2005


2006


2005Cisco Systems


18.1
%


17.0
%


17.4
%


15.6
%Nortel Networks


11.7
%


10.7
%


11.0
%


10.5
%     NOTE 10 
    Long-Term
    Debt  8.00% Senior
    Subordinated Notes due 2016
    0.5% Convertible
    Senior Notes due 2034
     18




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##### Table of Contents



SOLECTRON
    CORPORATION AND SUBSIDIARIES
  Notes to
    Condensed Consolidated Financial
    Statements  (Continued)
        7.375% Senior
    Notes
    Adjustable
    Conversion-Rate Equity Securities (ACES)
        Liquid
    Yield Option Notes
    (LYONstm )
  tm
 19




---



##### Table of Contents



SOLECTRON
    CORPORATION AND SUBSIDIARIES
  Notes to
    Condensed Consolidated Financial
    Statements  (Continued)
  tm
  tm tm
  NOTE 11  Derivative
    Instruments
          NOTE 12  Goodwill
    and Intangible Assets
    GoodwillBalance at August 31, 2005

$
148.80Adjustments


(1.20
)Balance at February 28, 2006

$
147.60  20




---



##### Table of Contents



SOLECTRON
    CORPORATION AND SUBSIDIARIES
  Notes to
    Condensed Consolidated Financial
    Statements  (Continued)
     Intellectual


CustomerSupply


Property


RelationshipsAgreements


Agreements


and Other


TotalFebruary 28, 2006Gross amount

$
89.5


$
61.0


$
98.9


$
249.4Accumulated amortization


(85.9
)


(57.1
)


(88.9
)


(231.9
)Carrying value

$
3.6


$
3.9


$
10.0


$
17.5August 31, 2005Gross amount

$
91.9


$
61.0


$
98.9


$
251.8Accumulated amortization


(86.7
)


(56.2
)


(84.1
)


(227.0
)Carrying value

$
5.2


$
4.8


$
14.8


$
24.8       NOTE 13  Discontinued
    Operations
     21




---



##### Table of Contents



SOLECTRON
    CORPORATION AND SUBSIDIARIES
  Notes to
    Condensed Consolidated Financial
    Statements  (Continued)
     Six MonthsThree Months Ended


EndedFebruary 28


February 282006


2005


2006


2005Net sales

$



$



$



$
15.2Cost of sales














14.1Gross profit














1.1Operating
    income  net


(6.5
)


(0.9
)


(8.2
)


(11.3
)Operating income (loss)


6.5



0.9



8.2



12.4Interest
    income  net














Other income  net


6.8







8.9



0.9Income before income taxes


13.3



0.9



17.1



13.3Income tax expense














1.7Income from discontinued
    operations, net of tax

$
13.3


$
0.9


$
17.1


$
11.6          22




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##### Table of Contents



SOLECTRON
    CORPORATION AND SUBSIDIARIES
  Notes to
    Condensed Consolidated Financial
    Statements  (Continued)
   NOTE 14  Restructuring
    and Impairment
  No. 94-3,
    Overview
    of Restructuring Plans
  Fiscal
    Year 2005 Restructuring Plan
    
    Closing our facilities in Hillsboro, Oregon; Winnipeg, Canada;
    Lincoln, California; Turnhout, Belgium; and Munich, Germany.
    Eliminating approximately 2,400 positions at (1) the
    facilities being closed; (2) our facilities in Bordeaux,
    France; Dunfermline, Scotland; Mexico; Brazil; and other
    facilities; and (3) within our material procurement and
    sales organizations in Europe and North America. These actions
    included the elimination of certain positions, the migration of
    certain functional activities to facilities in low cost
    geographies, and the outsourcing of certain activities.
    Impair certain long-lived assets (primarily building and
    leasehold improvement) in connection with the facilities being
    vacated and equipment made obsolete to the extent that we would
    be unable to recover their carrying value upon sales to third
    parties. 23




---



##### Table of Contents



SOLECTRON
    CORPORATION AND SUBSIDIARIES
  Notes to
    Condensed Consolidated Financial
    Statements  (Continued)
     Fiscal
    Year 2004 Restructuring Plan
      Legacy
    Restructuring Plans
    Three
    and six months ended February 28, 2006 and
    2005
   24




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##### Table of Contents



SOLECTRON
    CORPORATION AND SUBSIDIARIES
  Notes to
    Condensed Consolidated Financial
    Statements  (Continued)
     Three Months Ended


Six Months EndedFebruary 28


February 282006


2005


2006


2005


NatureLoss on diposal of and impairment
    of equipment and facilities, net

$
5.1


$
38.5


$
8.5


$
39.7


non-cashIntangible asset impairment
    charge, net










1.9






non-cashTotal impairment of equipment,
    facilities and intangibles


5.1



38.5



10.4



39.7


non-cashSeverance and benefit costs


(2.8
)


2.9



(9.9
)


3.3


cashNet adjustment to facility lease
    loss accrual


2.1



1.9



4.5



0.9


cashNet adjustment to equipment lease
    loss accrual


0.1



(0.2
)


0.1



(0.1
)

cashOther exit costs


1.1



0.1



1.4



0.1


cashTotal cash restructuring


0.5



4.7



(3.9
)


4.2


cashTotal cash and non-cash
    restructuring

$
5.6


$
43.2


$
6.5


$
43.9   Restructuring
    Accrual
    Severance


Leased Facilities


Other Exitand Benefits


& Equipment


Costs


TotalBalance of accrual at
    August 31, 2005

$
44.9


$
32.7


$
0.1


$
77.7Provision


1.6



2.8



0.4



4.8Q1-FY06 Provision Adjustments


(8.7
)


(0.4
)


(0.1
)


(9.2
)Q1-FY06 Cash Payments


(5.2
)


(5.2
)


(0.4
)


(10.8
)Foreign Exchange Adjustment


(0.9
)


(0.1
)






(1.0
)Balance of accrual at
    November 30, 2005


31.7



29.8







61.5Provision


2.1



2.2



1.2



5.5Q2-FY06 Provision Adjustments


(5.0
)










(5.0
)Q2-FY06 Cash Payments


(13.3
)


(4.9
)


(1.2
)


(19.4
)Foreign Exchange Adjustment


0.2



0.1







0.3Balance of accrual at
    February 28, 2006

$
15.7


$
27.2


$



$
42.9    25




---



##### Table of Contents



SOLECTRON
    CORPORATION AND SUBSIDIARIES
  Notes to
    Condensed Consolidated Financial
    Statements  (Continued)
   Restructuring
    Activity by Plan
    Fiscal 2005


Fiscal 2004


LegacyPlan


Plan


Plans


TotalBalance at August 31, 2005

$
40.2


$
5.2


$
32.3


$
77.7Provision


2.4



0.2



2.2



4.8Provision adjustments


(7.2
)


(1.4
)


(0.6
)


(9.2
)Cash payments


(5.3
)


(0.7
)


(4.8
)


(10.8
)Foreign Exchange Adjustment


(0.8
)






(0.2
)


(1.0
)Balance at November 30, 2005

$
29.3


$
3.3


$
28.9


$
61.5Q1FY2006 loss on disposal of and
    impairment of equipment and facilities, net

$
1.3


$
2.0


$
0.1


$
3.4Provision


3.9



0.7



0.9



5.5Provision adjustments


(5.0
)










(5.0
)Cash payments


(14.8
)


(0.4
)


(4.2
)


(19.4
)Foreign Exchange Adjustment


0.2







0.1



0.3Balance at February 28, 2006

$
13.6


$
3.6


$
25.7


$
42.9Q2FY2006 loss on disposal of and
    impairment of equipment and facilities, net

$
2.0


$



$
1.5


$
3.5   NOTE 15 
    Net
    Income (Loss) Per Share Calculation     26




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##### Table of Contents



SOLECTRON
    CORPORATION AND SUBSIDIARIES
  Notes to
    Condensed Consolidated Financial
    Statements  (Continued)
     Three Months Ended February
    28


Six Months Ended February
    282006


2005


2006


2005Basic earnings per share:Net income

$
30.4


$
(2.2
)

$
54.4


$
56.0Shares used in computation:Weighted average ordinary shares
    outstanding


908.8



977.1



917.3



966.7Basic earnings per share

$
0.03


$
(0.00
)

$
0.06


$
0.06Diluted earnings per share:Net income

$
30.4


$
(2.2
)

$
54.4


$
56.0Shares used in computation:Weighted average ordinary shares
    outstanding


908.8



977.1



917.3



966.7Employee stock options


.2







.2



3.9Restricted Stock


0.7







0.6



Shares issuable upon conversion of
    LYONs














Shares issuable upon conversion of
    ACES














Weighted average number of shares


909.7



977.1



918.1



970.6Diluted earnings per share

$
0.03


$
(0.00
)

$
0.06


$
0.06     Three Months Ended February
    28


Six Months Ended February
    282006


2005


2006


2005Dilutive securities:Employee stock options


40.2



28.6



30.8



26.9Shares issuable upon conversion of
    LYONs


0.2



0.2



0.2



0.3Shares issuable upon conversion of
    ACES














2.9Shares issuable upon conversion of
    0.5% notes


0.3



0.3



0.3



0.3Total dilutive potential common
    shares


40.7



29.1



31.3



30.4   NOTE 16 
    Income
    Taxes   27




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##### Table of Contents



SOLECTRON
    CORPORATION AND SUBSIDIARIES
  Notes to
    Condensed Consolidated Financial
    Statements  (Continued)
          NOTE 17 
    Related
    Party Transactions    NOTE 18 
    Guarantee
    of Subsidiary Notes    NOTE 19 
    Subsequent
    Events    Abrams v. Solectron Corporation
    et al. No. C-03-0986
 28




---



##### Table of Contents



Item 2.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  Cautionary
    Statement Regarding Forward-Looking Statements
  With the exception of historical facts, the statements
    contained in this quarterly report are forward-looking
    statements within the meaning of Section 27A of the
    Securities Act of 1933, as amended, and Section 21E of the
    Securities Exchange Act of 1934, as amended (the Exchange
    Act), and are subject to the safe harbor provisions set
    forth in the Exchange Act. These forward-looking statements
    relate to matters including, but not limited to:
  
    future sales and operating results, including future earnings,
    growth, rates and trends;
    our anticipation of the timing and amounts of our future
    obligations and commitments and our ability to meet those
    commitments;
    the impact of our Lean Initiative and its expected future
    benefit to us;
    our expectations regarding valuation allowances on future tax
    benefits in various countries;
    the adequacy of our reserves for potential tax liabilities for
    open periods;
    the amount of available future cash and our belief that our cash
    and cash equivalents, short-term investments, lines of credit
    and cash from continuing operations will be sufficient for us to
    meet our obligations for the next twelve months;
    the success, capabilities and capacities of our business
    operations;
    the adequacy of our restructuring provisions and timing of our
    restructuring actions and their impact on our business or
    results of operations;
    the anticipated financial impact of recent and future
    acquisitions and divestitures and the adequacy of our provisions
    for indemnification obligations pursuant to such transactions;
    our ability to continue to comply with the requirements of
    Section 404 of the Sarbanes-Oxley Act of 2002;
    our exposure to foreign currency exchange rate fluctuations;
    our belief that our current or future environmental liability
    exposure related to our facilities will not be material to our
    business, financial condition or results of operations; and
    various other forward-looking statements contained in
    Managements Discussion and Analysis of Financial
    Condition and Results of Operations.  We intend that our forward-looking statements be subject to
    the safe harbors created by the Exchange Act. The
    forward-looking statements are generally accompanied by words
    such as intend, anticipate,
    believe, estimate, expect
    and other similar words and statements and variations or
    negatives of these words. Our forward-looking statements are
    based on current expectations, forecasts and assumptions and are
    subject to risks, uncertainties and changes in condition,
    significance, value and effect, including those discussed under
    the heading Risk Factors in this report and in our
    reports filed with the Securities and Exchange Commission on
    Forms 10-K,
    10-Q,
    8-K,
    S-3 and
    S-4. Such
    risks, uncertainties and changes in condition, significance,
    value and effect could cause our actual results to differ
    materially from our anticipated outcomes. Although we believe
    that the assumptions underlying the forward-looking statements
    are reasonable, any of the assumptions could prove inaccurate.
    Therefore, we can give no assurance that the results implied by
    these forward-looking statements will be realized. The inclusion
    of forward-looking information should not be regarded as a
    representation by our company or any other person that the
    future events, plans or expectations contemplated by Solectron
    will be achieved. Furthermore, past performance in operations
    and share price is not necessarily indicative of future
    performance. We disclaim any intention or obligation to update
    or revise any forward-looking statements contained in the
    documents incorporated by reference herein, whether as a result
    of new information, future events or otherwise.
 29




---



##### Table of Contents



Overview
    Summary
    of Results and Key Performance Indicators
    Three Months Ended February
    28


Six Months Ended February
    282006


2005


2006


2005Net sales

$
2,499.6


$
2,756.0


$
4,956.0


$
5,446.6Gross profit


129.0



157.9



254.6



313.4Selling, general and
    administrative expense


104.3



104.7



211.7



200.3Income (loss) from continuing
    operations


17.1



(3.1
)


37.3



44.4     Three Months EndedFebruary 28,

November 30,

August 31,

May 31,

February 28,2006

2005

2005

2005

2005Inventory turns

7.4 turns

8.0 turns

7.9 turns

8.1 turns

7.9 turnsDays sales outstanding (DSO)

44 days

45 days

46 days

46 days

46 daysDays payable outstanding (DPO)

54 days

53 days

54 days

50 days

48 daysCash-to-cash
    cycle (C2C)

40 days

37 days

38 days

41 days

44 daysCapital expenditures (in millions)

$50.8

$58.9

$48.4

$35.9

$34.1     Critical
    Accounting Policies and Estimates
  Form 10-K
 30




---



##### Table of Contents



Revenue
    Recognition
  out-of-warranty
  01-09, and/or
  time-to-time,
  No. 99-19,
  Inventory
    Valuation
   31




---



##### Table of Contents



Allowance
    for Doubtful Accounts
    Goodwill
    Intangible
    Assets
    Restructuring
    and Related Impairment Costs
   32




---



##### Table of Contents



No. 94-3,
      Income
    Taxes
   33




---



##### Table of Contents



Loss
    Contingencies
    Stock-Based
    Compensation
  Share-Based
    Payment.
         34




---



##### Table of Contents



Results
    of Operations
    Three Months Ended February
    28


Six Months Ended February
    282006


2005


2006


2005Net sales


100.0
%


100.0
%


100.0
%


100.0
%Cost of sales


94.8



94.3



94.9



94.2Gross profit


5.2



5.7



5.1



5.8Operating expenses:Selling, general and administrative


4.2



3.8



4.3



3.7Restructuring and impairment costs


0.2



1.5



0.1



0.8Operating income


0.8



0.4



0.7



1.3Interest income


0.5



0.3



0.5



0.3Interest expense


(0.3
)


(0.6
)


(0.2
)


(0.6
)Other (expense)
    income  net


(0.1
)


0.0







0.0Operating income from continuing
    operations before income taxes


0.9



0.1



1.0



1.0Income tax expense


0.2



0.2



0.2



0.2Income (loss) from continuing
    operations


0.7
%


(0.1
)%


0.8
%


0.8
%Discontinued operations:Income from discontinued operations


0.5



0.0



0.3



0.2Income tax expense














Income from discontinued operations


0.5
%



%


0.3
%


0.2
%Net income (loss)


1.2
%


(0.1
)%


1.1
%


1.0
%   Net
    Sales  Continuing Operations
     35




---



##### Table of Contents



Three Months Ended February
    28


Six Months Ended February
    282006


2005


2006


2005Computing & Storage


32.8
%


28.9
%


33.3
%


28.8
%Consumer


9.5
%


15.8
%


9.1
%


16.6
%Communications


18.3
%


19.2
%


18.3
%


19.9
%Networking


27.0
%


26.0
%


26.3
%


24.5
%Industrial


8.0
%


5.3
%


8.1
%


5.3
%Automotive


2.7
%


3.0
%


3.1
%


3.1
%Other


1.7
%


1.8
%


1.8
%


1.8
%Total


100.0
%


100.0
%


100.0
%


100.0
%   International
    Sales  Continuing Operations
    Major
    Customers  Continuing Operations
    Three Months Ended February
    28


Six Months Ended February
    282006


2005


2006


2005Cisco Systems


18.1
%


17.0
%


17.4
%


15.6
%Nortel Networks


11.7
%


10.7
%


11.0
%


10.5
%       Gross
    Profit  Continuing Operations
   36




---



##### Table of Contents




    A 0.7 percentage point and 0.6 percentage point
    increase as a percentage of revenue in direct labor and overhead
    costs for the three and six months ended February 28, 2006,
    respectively, over the corresponding periods in fiscal 2005.
    This increase was driven by additions of headcount in
    anticipation of certain customer program ramps as well as wage
    increases.
    A 0.7 percentage point and 0.7 percentage point
    increase in material supply chain costs as a percentage of
    revenues, largely attributable to higher freight, duties, fuel
    costs, and labor costs, for each of the three and six months
    ended February 28, 2006, respectively, over the
    corresponding periods in fiscal 2005.
    These increases in cost of sales were partially offset by a
    0.9 percentage point and 0.7 percentage point decrease
    in material and material related costs as a percentage of
    revenues for the three and six months ended February 28,
    2006, respectively, over the corresponding periods in fiscal
    2005.
    In addition, to the above items, the adoption of SFAS 123R
    during fiscal 2006, increased cost of sales by $1.8 million
    and $3.6 million during the three month and six month
    periods ended February 28, 2006, respectively, compared to
    the corresponding periods of fiscal 2005.    Selling,
    General and Administrative (SG&A)
    Expenses  Continuing Operations
      Restructuring
    and Impairment  Continuing Operations
        Interest
    Income  Continuing Operations
   37




---



##### Table of Contents



Interest
    Expense  Continuing Operations
    Other
    (Expense)
    Income  net  Continuing
    Operations
    Income
    Taxes  Continuing Operations
         38




---



##### Table of Contents



Liquidity
    and Capital Resources
  Cash
    Six Months Ended February
    282006


2005Net cash (used in) provided by
    operating activities of continuing operations


(70.0
)


476.6Net cash used in operating
    activities of discontinued operations


(8.2
)


(5.9
)Net cash (used in) provided by
    operating activities


(78.2
)


470.7Net cash used in investing
    activities of continuing operations


(103.1
)


(16.7
)Net cash provided by investing
    activities of discontinued operations


17.1



13.0Net cash used in investing
    activities


(86.0
)


(3.7
)Net cash (used in) provided by
    financing activities of continuing operations


(29.1
)


54.0Net cash (used in) provided by
    financing activities of discontinued operations


(8.9
)


(7.1
)Net cash (used in) provided by
    financing activities


(38.0
)


46.9         Debt
     39




---



##### Table of Contents



Synthetic
    Leases
    30-day
      Restricted
    Cash
    Off-Balance
    Sheet Arrangements and Contractual Obligations
   40




---



##### Table of Contents



Contractual
    Obligations and Commitments
      Payments Due by PeriodShort-


Q3 07-Total


Term


Q4 07


FY08


FY09


FY10


FY11


Thereafter(In millions)Debt

$
860.2


$
227.0


$
0.3


$
0.1


$
0.8


$
14.5


$
450.0


$
167.5Operating lease


142.1



34.2



20.2



21.3



16.4



14.5



13.5



22.0Operating leases for restructured
    facilities and equipment


36.2



13.3



6.6



7.4



3.6



3.0



1.3



1.0Purchase obligations(1)


150.9



150.4







0.1



0.2



0.2







$
1,189.4


$
424.9


$
27.1


$
28.9


$
21.0


$
32.2


$
464.8


$
190.5     (1)
    
    We have guaranteed various purchase commitments for materials,
    supplies and services incurred during the normal course of
    business.    Discontinued
    Operations
   41




---



##### Table of Contents



Six MonthsThree Months Ended
    February 28


Ended February 282006


2005


2006


2005Net sales

$



$



$



$
15.2Cost of sales














14.1Gross profit














1.1Operating
    income  net


(6.5
)


(0.9
)


(8.2
)


(11.3
)Operating income (loss)


6.5



0.9



8.2



12.4Interest
    income  net














Other income
    (expense)  net


6.8







8.9



0.9Income (loss) before income taxes


13.3



0.9



17.1



13.3Income tax expense














1.7Income (loss) from discontinued
    operations, net of tax

$
13.3


$
0.9


$
17.1


$
11.6          42




---



##### Table of Contents



RISK
    FACTORS
  Risks
    Related to Our Business
  Most
    of our sales come from a small number of customers; if we lose
    any of these customers, our net sales could decline
    significantly.
      Our
    customers may cancel their orders, change production quantities
    or locations, or delay production.
    We may
    not be able to sell excess or obsolete inventory to customers or
    third parties, which could have a material adverse impact on our
    consolidated financial condition.
     43




---



##### Table of Contents



and/or
  and/or and/or
  Our
    non-U.S. locations
    represent a significant portion of our sales; we are exposed to
    risks associated with operating internationally.
    
    adverse movement of foreign currencies against the
    U.S. dollar in which our results are reported;
    import and export duties, and value added taxes;
    import and export regulation changes that could erode our profit
    margins or restrict exports
    and/or
    imports;
    potential restrictions on the transfer of funds;
    government and license requirements governing the transfer of
    technology and products abroad;
    disruption of local labor supply
    and/or
    transportation services;
    inflexible employee contracts in the event of business downturns;
    the burden and cost of compliance with import and export
    regulations and foreign laws;
    economic and political risks in emerging or developing
    economies; and
    risks of conflict and terrorism that could disrupt our or our
    customers and suppliers businesses.   44




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We are
    exposed to general economic conditions, which could have a
    material adverse impact on our business, operating results and
    consolidated financial condition.
    Possible
    fluctuation of operating results from quarter to quarter and
    factors out of our control could affect the market price of our
    securities.
  and/or
  
    differences in the profitability of the types of manufacturing
    services we provide. For example, high velocity and low
    complexity printed circuit boards and systems assembly services
    have lower gross profit than low volume/complex printed circuit
    boards and systems assembly services;
    our ability to maximize the hours of use of our equipment and
    facilities is dependent on the duration of the production run
    time for each job and customer;
    the amount of automation that we can use in the manufacturing
    process for cost reduction varies, depending upon the complexity
    of the product being made;
    our customers demand for our products and their ability to
    take delivery of our products and make timely payments for
    delivered products;
    our ability to optimize the ordering of inventory as to timing
    and amount to avoid holding inventory in excess of immediate
    production needs;
    our ability to offer technologically advanced, cost-effective,
    quick response manufacturing services;
    our ability to drive down manufacturing costs in accordance with
    customer and market requirements is dependent upon our ability
    to apply Lean Six Sigma operating principles;
    fluctuations in the availability and pricing of components;
    timing of expenditures in anticipation of increased sales;
    cyclicality in our target markets;
    fluctuations in our market share;
    fluctuations in currency exchange rates;
    expenses and disruptions associated with acquisitions and
    divestitures;
    announcements of operating results and business conditions by
    our customers;
    announcements by our competitors relating to new customers or
    technological innovation or new services;
    economic developments in the electronics industry as a whole;
    credit rating and stock analyst downgrades;
    our ability to successfully integrate changes to our enterprise
    resource planning, or ERP, system;
    political and economic developments in countries in which we
    have operations; and
    general market conditions. 45




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If we
    incur more restructuring-related charges than currently
    anticipated, our consolidated financial condition and results of
    operations may suffer.
    Failure
    to attract and retain key personnel and skilled associates could
    hurt our operations.
    We
    depend on limited or sole source suppliers for critical
    components. The inability to obtain sufficient components as
    required, and under favorable purchase terms, would cause harm
    to our business.
    We
    potentially bear the risk of price increases associated with
    shortages in electronics components.
    Our
    net sales could decline if our competitors provide comparable
    manufacturing services and improved products at a lower
    cost.
  and/or
 46




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We
    depend on the continuing trend of OEMs to
    outsource.
    Our
    strategic relationships with major customers create
    risks.
  and/or
  
    we may pay a purchase price to the divesting OEMs that exceeds
    the value we are ultimately able to realize from the future
    business of the OEM;
    the integration into our business of the acquired assets and
    facilities may be time-consuming and costly;
    we, rather than the divesting OEM, would bear the risk of excess
    capacity;
    we may not achieve anticipated cost reductions and efficiencies;
    we may be unable to meet the expectations of the OEM as to
    volume, product quality, timeliness and cost reductions; and
    if demand for the OEMs products declines, the OEM may
    reduce its volume of purchases, and we may not be able to
    sufficiently reduce the expenses of operating the facility or
    use the facility to provide services to other OEMs, and we might
    find it appropriate to close, rather than continue to operate,
    the facility, and any such actions would require us to incur
    significant restructuring
    and/or
    impairment charges.    Business
    disruptions could seriously harm our future revenue and
    financial condition and increase our costs and
    expenses.
   47




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If we
    are unable to manage future acquisitions and cost-effectively
    run our operations, our profitability could be adversely
    affected.
    Notwithstanding
    our recent divestiture of certain businesses, we will remain
    subject to certain indemnification obligations for a period of
    time after completion of the divestitures.
    If we
    have a material weakness in our internal controls over financial
    reporting, investors could lose confidence in the reliability of
    our financial statements, which could result in a decrease in
    the value of our securities.
    If our
    products are subject to warranty or liability claims, our
    business reputation may be damaged and we may incur significant
    costs.
  and/or and/or
 48




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Our
    design and engineering services may result in additional
    exposure to product liability, intellectual property
    infringement and other claims.
    We are
    exposed to fluctuations in foreign currency exchange rates and
    interest rate fluctuations.
          Failure
    to comply with environmental regulations could harm our
    business.
     49




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We may
    not be able to adequately protect or enforce our intellectual
    property rights and could become involved in intellectual
    property disputes.
  and/or
    Rating
    downgrades may make it more expensive for us to borrow
    money.
    Unanticipated
    changes in our tax rates or in our exposure to additional income
    tax liabilities could affect our operating results and financial
    condition.
   50




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Item 3.
    Quantitative
    and Qualitative Disclosures about Market Risk    Item 4.
    Controls
    and Procedures  Evaluation of disclosure controls and
    procedures. Rules 13a-15(e) 15d-15(e)
  Changes in internal control over financial
    reporting.
 PART II.
    OTHER INFORMATION  Item 1.
    Legal
    Proceedings    Abrams v. Solectron Corporation
    et al. No. C-03-0986
  Item 2.
    Purchases
    of Equity Securities    Item 6.
    Exhibits  INDEX TO
    EXHIBITS
  ExhibitNo

Exhibit Description3
.1*

Certificate of Incorporation of
    the Registrant, as amended3
.2**

Amended and Restated Bylaws of the
    Registrant3
.3***

Certificate of Designation Rights,
    Preferences and Privileges of Series A Participating
    Preferred Stock of the Registrant4
.1****

Indenture dated February 21,
    2006, among Solectron Global Finance LTD, as Issuer, Solectron
    Corporation, as Guarantor and U.S. Bank National
    Association, as Trustee 51




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##### Table of Contents



ExhibitNo

Exhibit Description4
.2****

Form of 8.00% Senior
    Subordinated Note due 2016 (included in Exhibit 4.1)4
.3****

Registration Rights Agreement
    dated February 21, 2006, among Solectron Global Finance
    LTD, Solectron Corporation and the Initial Purchasers named
    therein10
.1

Indirect Sourcing Services
    Agreement dated as of March 16, 2006, by and between
    Solectron USA, Inc. and International Business Machines
    Corporation31
.1

Certification of Chief Executive
    Officer Pursuant to Section 302(a) of the Sarbanes-Oxley
    Act of 200231
.2

Certification of Chief Financial
    Officer Pursuant to Section 302(a) of the Sarbanes-Oxley
    Act of 200232
.1

Certification of Chief Executive
    Officer Pursuant to 18 U.S.C Section 1350, as adopted
    pursuant to Section 906 of the Sarbanes-Oxley Act of 200232
.2

Certification of Chief Financial
    Officer Pursuant to 18 U.S.C. Section 1350, as adopted
    pursuant to Section 906 of the Sarbanes-Oxley Act of 2002     *
    
    Incorporated by reference from Exhibit 3.1 filed with
    Registrants Form
    10-Q for the
    quarter ended February 28, 2001, Exhibit 3.1 filed
    with Registrants
    Form 10-Q
    for the quarter ended February 25, 2000, and
    Exhibit 3.1 filed with Registrants
    Form 10-Q
    for the quarter ended February 26, 1999.**
    
    Incorporated by reference from Exhibit 3.2 filed with
    Registrants Form
    10-Q for the
    quarter ended November 28, 2003.***
    
    Incorporated by reference from Exhibit 3.3 filed with
    Registrants Annual Report on
    Form 10-K
    for the fiscal year ended August 31, 2001.****
    
    Incorporated by reference from Exhibits 4.1, 4.2 and 4.3 to
    Registrants
    Form 8-K,
    filed with the Commission on February 21, 2006. 52




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##### Table of Contents



SOLECTRON
    CORPORATION
 SIGNATURE     (Registrant)
  By:
    /s/  PAUL J.
    TUFANO   Executive Vice President, Chief Financial Officer
 (Principal Financial Officer)
  By:
    /s/  WARREN J.
    LIGAN   Senior Vice President and Chief Accounting Officer
 (Principal Accounting Officer)
   53




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INDEX TO
    EXHIBITS
  ExhibitNo

Exhibit Description3
.1*

Certificate of Incorporation of
    the Registrant, as amended3
.2**

Amended and Restated Bylaws of the
    Registrant3
.3***

Certificate of Designation Rights,
    Preferences and Privileges of Series A Participating
    Preferred Stock of the Registrant4
.1****

Indenture dated February 21,
    2006, among Solectron Global Finance LTD, as Issuer, Solectron
    Corporation, as Guarantor and U.S. Bank National
    Association, as Trustee4
.2****

Form of 8.00% Senior
    Subordinated Note due 2016 (included in Exhibit 4.1)4
.3****

Registration Rights Agreement
    dated February 21, 2006, among Solectron Global Finance
    LTD, Solectron Corporation and the Initial Purchasers named
    therein10
.1

Indirect Sourcing Services
    Agreement dated as of March 16, 2006, by and between
    Solectron USA, Inc. and International Business Machines
    Corporation31
.1

Certification of Chief Executive
    Officer Pursuant to Section 302(a) of the Sarbanes-Oxley
    Act of 200231
.2

Certification of Chief Financial
    Officer Pursuant to Section 302(a) of the Sarbanes-Oxley
    Act of 200232
.1

Certification of Chief Executive
    Officer Pursuant to 18 U.S.C Section 1350, as adopted
    pursuant to Section 906 of the Sarbanes-Oxley Act of 200232
.2

Certification of Chief Financial
    Officer Pursuant to 18 U.S.C. Section 1350, as adopted
    pursuant to Section 906 of the Sarbanes-Oxley Act of 2002     *
    
    Incorporated by reference from Exhibit 3.1 filed with
    Registrants Form
    10-Q for the
    quarter ended February 28, 2001, Exhibit 3.1 filed
    with Registrants
    Form 10-Q
    for the quarter ended February 25, 2000, and
    Exhibit 3.1 filed with Registrants
    Form 10-Q
    for the quarter ended February 26, 1999.**
    
    Incorporated by reference from Exhibit 3.2 filed with
    Registrants Form
    10-Q for the
    quarter ended November 28, 2003.***
    
    Incorporated by reference from Exhibit 3.3 filed with
    Registrants Annual Report on
    Form 10-K
    for the fiscal year ended August 31, 2001.****
    
    Incorporated by reference from Exhibits 4.1, 4.2 and 4.3 to
    Registrants
    Form 8-K,
    filed with the Commission on February 21, 2006. 54