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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-K
(Mark One)
ýANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended March 31, 2022
For the fiscal year ended March 31, 2019Or
Or
oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 000-23354
FLEX LTD.
(Exact name of registrant as specified in its charter)
Singapore
Not Applicable
(State or other jurisdiction of
incorporation or organization)
Not Applicable
(I.R.S. Employer Identification No.)
2 Changi South Lane,
Singapore
486123
(Address of registrant's principal executive offices)
486123
(Zip Code)
Registrant's telephone number, including area code
(65) 6876-9899
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Ordinary Shares, No Par ValueFLEXFLEXThe Nasdaq Stock Market LLC
Securities registered pursuant to Section 12(g) of the Act—NONE
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ý    No o
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes o    No ý
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý    No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ý    No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer",filer," "smaller reporting company"company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer ý
Accelerated Filer
Accelerated filero
Non-accelerated filero
Smaller reporting company o
Emerging growth companyo
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.o
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes oYes ☐    No ý
As of September 28, 2018,October 1, 2021, the aggregate market value of the Company's ordinary shares held by non-affiliates of the registrant was approximately $6.9$8.6 billion based upon the closing sale price as reported on the Nasdaq Global Select Market.
Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date.
ClassOutstanding at May 13, 201916, 2022
Ordinary Shares, No Par Value514,029,702457,642,860
DOCUMENTS INCORPORATED BY REFERENCE
DocumentParts into Which Incorporated
Proxy Statement to be delivered to shareholders in connection with the Registrant's 20192022 Annual General Meeting of ShareholdersPart III


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Table of Contents
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Table of Contents
PART I


FORWARD-LOOKING STATEMENTS
Unless otherwise specifically stated, references in this report to "Flex," "the Company," "we," "us," "our" and similar terms mean Flex Ltd. and its subsidiaries.
Except for historical information contained herein, certain matters included in this annual report on Form 10-K are, or may be deemed to be forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 and Section 27A of the Securities Act of 1933. The words "will," "may," "designed to," "believe," "should," "anticipate," "plan," "expect," "intend," "estimate" and similar expressions identify forward-looking statements, which speak only as of the date of this annual report. These forward-looking statements are contained principally under Item 1, "Business," and under Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations." Because these forward-looking statements are subject to risks and uncertainties, actual results could differ materially from the expectations expressed in the forward-looking statements. Important factors that could cause actual results to differ materially from the expectations reflected in the forward-looking statements include those described in Item 1A, "Risk Factors" and Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations." In addition, new risks emerge from time to time and it is not possible for management to predict all such risk factors or to assess the impact of such risk factors on our business. Given these risks and uncertainties, the reader should not place undue reliance on these forward-looking statements. We undertake no obligation to update or revise these forward-looking statements to reflect subsequent events or circumstances.
Unless otherwise specifically stated, references in this report to "Flex," "the Company," "we," "us," "our" and similar terms mean Flex Ltd. and its subsidiaries.
ITEM 1.    BUSINESS
OVERVIEW
We are a globally-recognized, providerFlex is the diversified manufacturing partner of Sketch-to-Scale® services - innovative design, engineering, manufacturing, and supply chain services and solutions - from conceptual sketch to full-scale production. Wechoice that helps market-leading brands design, build ship and manage complete packaged consumerdeliver innovative products that improve the world. Through the collective strength of a global workforce across approximately 30 countries with responsible, sustainable operations, Flex delivers advanced manufacturing solutions and enterprise products, from medical devicesoperates one of the most trusted global supply chains, supporting the entire product lifecycle with fulfillment, after-market, and connected automotive systems to sustainable lighting and cloud and data centercircular economy solutions for companies of all sizes in variousdiverse industries including cloud, communications, enterprise, automotive, industrial, consumer devices, lifestyle, healthcare, and end-markets, through our activitiesenergy.
Beginning in the following segments:
Highfourth quarter of fiscal year 2022, as a result of the sale of certain Series A preferred units in Nextracker LLC ("Nextracker LLC" or "Nextracker") to a third party and our continuing evaluation to separate our Nextracker business and consistent with how our chief operating decision maker ("CODM") allocates resources, assesses performance and makes strategic and operational decisions, Flex now reports Nextracker as a separate operating and reportable segment. Nextracker was previously included in the Industrial reporting unit within the Flex Reliability Solutions segment. Flex's three operating and reportable segments are:
Flex Agility Solutions ("HRS"FAS"), which is comprised of our health solutions business,the following end markets:
Communications, Enterprise and Cloud ("CEC"), including surgical equipment, drug delivery, diagnostics, telemedicine, disposable devices, imagingdata infrastructure, edge infrastructure and monitoring, patientcommunications infrastructure;
Lifestyle, including appliances, consumer packaging, floorcare, micro mobility and ophthalmology;audio; and our automotive business,
Consumer Devices, including vehicle electrification, connectivity, autonomous,mobile and smart technologies;
high velocity consumer devices.

Industrial and Emerging IndustriesFlex Reliability Solutions ("IEI"FRS"), which is comprised of the following end markets:
Automotive, including next generation mobility, autonomous, connectivity, electrification, and smart technologies;
Health Solutions, including medical devices, medical equipment, and drug delivery; and
Industrial, including capital equipment, industrial devices, and renewables and grid edge.
Nextracker, the leading provider of intelligent, integrated solar tracker and software solutions used in utility-scale and ground-mounted distributed generation solar projects around the world. Nextracker's products enable solar panels to follow the sun’s movement across the sky and optimize plant performance.
The FAS segment is optimized for speed to market based on a highly flexible supply and manufacturing system. The FRS segment is optimized for longer product lifecycles requiring complex ramps with specialized production models and critical
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environments. Nextracker provides solar tracker technologies that optimize and increase energy including advanced metering infrastructure,production while reducing costs for significant plant return on investment.
In the fourth quarter of fiscal year 2022, Flex sold $500 million of convertible preferred equity in Nextracker to TPG Rise Flash, L.P., which is managed or advised by TPG Climate, the dedicated climate investing fund of TPG’s global impact investing platform ("TPG Rise"). Through this strategic partnership and investment from TPG Rise, Nextracker will continue to expand its market leading position in solar tracking and software solutions. TPG’s experience and extensive network in renewable energy storage, smart lighting, smart solar energy;provide Nextracker a strong partner to support long-term growth.
Our customers include many of the world's leading technology, healthcare, automotive, and industrial including semiconductorcompanies. We are focused on establishing long-term relationships with our customers and capital equipment, office solutions, household industrialhave been successful in expanding relationships to incorporate additional product lines and lifestyle, industrial automationservices.
In fiscal year 2022, our ten largest customers accounted for approximately 34% of net sales. No customer accounted for greater than 10% of the Company's net sales in fiscal year 2022.
Flex believes that growth in the contract manufacturing services industry will be driven by increased complexities in products, markets, and kiosks;

Communications & Enterprise Computeenvironmental, social, and governance ("CEC"ESG"), which includes our telecom business requirements. The “Digitization of radio access base stations, remote radio heads Everything” is the mega-trend that is driving products—and small cells for wireless infrastructure; our networking business, which includes optical, routing,even whole industries—to be smarter, more data-driven, and switching products for data and video networks; our server and storage platforms for both enterprise and cloud-based deployments;more connected. To make these next generation storageproducts, companies must integrate increasingly advanced technologies and security appliance products;build them at scale. Additionally, with regards to our solar business, we believe that both the attractive cost of solar generation and rack-level solutions, converged infrastructureincreasing demand for renewable energy will drive continued growth in the utility-scale solar market.
In addition to the pandemic, rising global uncertainty over the past few years including trade and software-definedtariff issues, increasing geopolitical conflict, and severe labor shortages are creating further complexity. Companies are rethinking their entire production strategies, and we are seeing a global rebalancing in sourcing and producing to maximize resiliency. Sustainability is no longer an afterthought. Businesses are being held to a much higher standard for how and where their products are sourced and produced, and, increasingly, how they are disposed.
These complexities are making it harder for companies to manage their own supply chain and manufacturing operations. They are looking for trusted partners to help them navigate this complex environment. Only a few outsourcing players have the right capabilities and scale to meet these challenges effectively and profitably. Flex is one of these partners.
STRATEGY
Flex helps its customers responsibly design and build products that create value and improve people’s lives. We do this by providing our customers with product solutions;development lifecycle services, from innovation, design, and

Consumer Technologies Group ("CTG"), which includes our consumer-related businesses in IoT enabled devices, audio and consumer power electronics, mobile devices; and various engineering, to manufacturing, supply chain solutions, for consumer, computinglogistics, and printing devices.
circularity offerings. Flex’s strategy is to continue investing in areas where we can differentiate and add value, whether through engineering and design services, product technologies or developing differentiated processes and business methods. We are strengthening our abilities in software, robotics, artificial intelligence, factory automation, and other disruptive technologies. We select ethical partners and integrate the supply chain so that our customers can operate efficiently and responsibly. We are committed to investing in our employees and communities, which includes addressing critical environmental issues.
These segments represent componentsPeople. To maintain competitiveness and world-class capabilities, we focus on hiring and retaining the world's best talent. We have focused on attracting the best engineering, functional and operational leaders and have accelerated efforts to develop the future leaders of the Company for which separate financial information is availableCompany.
Customer Focus. We believe that is utilizedbuilding strong partnerships with our customers and delivering on our commitments strengthens trust and customer retention. For Flex, customers come first, and we have a regular basis by the Chief Operating Decision Maker (“CODM”). Our segments are determined basedrelentless focus on several factors, including the nature ofdelivering distinctive products and services the naturein a cost-effective manner with fast time to market. We are highly collaborative and leverage our global system and processes to operate with speed and responsiveness to provide customers a reliant and resilient supply chain and manufacturing technology solutions and services.
Markets. We focus on companies that are leaders in their industry and value our superior capabilities in design, manufacturing, and supply chain services. Flex focuses on high-growth industries and markets where we have distinctive competence and a compelling value proposition. Examples include investments in specific technologies and industries such as healthcare, automotive, industrial, and energy. Our market-focused approach to managing our business increases customers' competitiveness by leveraging our deep vertical and cross-industry expertise, as well as global scale, regional presence, and agility to respond to changes in market dynamics.
Operations. We continue to invest in maintaining a leadership position in our world-class manufacturing and services capabilities including automation, simulation tools, digitizing our factories, and implementing leading edge Industry 4.0
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Table of production processes, customer base, delivery channelsContents
methodologies. We leverage our broad set of capabilities globally to provide a competitive advantage by minimizing logistics costs, manufacturing costs, and similar economic characteristics. Refer to note 19 to the consolidated financial statements in Item 8, "Financial Statementscycle times while increasing flexibility and Supplementary Data" for additional information on our operating segments.responsiveness.
We provide
SERVICE OFFERINGS
Flex provides design, manufacturing and supply chain services through a network of over 100 locations in approximately 3530 countries across fivefour continents. We have established global scale through an extensive network of innovation labs, design centers, manufacturing operations, and services sites in the world's major consumer and enterprise products markets (Asia, the Americas,

and Europe) in order to serve the supply chain needs of both multinational and regional companies. Our services provide customers with a competitive advantage by delivering leading-edge manufacturing technology, supply chain expertise, improved product quality, increased flexibility, leading-edge manufacturability, improved performance, faster time-to-market,time to market, and overall value. Our customers leverage our services to meet their requirements throughout their products' entire life cycles. For the fiscal year ended March 31, 2019, we had revenue of $26.2 billion and net income of $93 million.
Over the past several years, we have evolved beyond a traditional Electronics Manufacturing Services ("EMS") company, and now consider ourselves to be a provider of a full range of Sketch-to-Scale® services – beyond electronics manufacturing services – including strategic product development planning and design-phase innovation, supported by teams of talented design engineers. Our innovation strategy is focused on three levels: products, systems, and manufacturing technologies and processes.lifecycles.
We believe that the combination of our extensive innovative solutions, design and engineering services, advanced supply chain management solutions and services, significant global scale and regional presence, and manufacturing sites in key geographies provide us with a competitive advantage and strong differentiation in the market for designing, building, and servicing consumer and enterprise products for leading multinational and regional companies. Through these services, centers and sites, we offer our customers improved product design, increased flexibility and responsiveness. We also enable faster time to market, product safety and regulatory compliance and supply chain predictability with real-time visibility, all of which accelerate product launches, access to new markets, and mitigate of risks.
We recognized research and development costs primarily related to our product design and innovations service offerings of $66 million, $78 million, and $66 million for the fiscal years ended March 31, 2019, 2018 and 2017, respectively.
INDUSTRY OVERVIEW
Our expertise is Sketch-to-Scale® services: design, manufacture, and supply chain services for a broad range of products, from medical devices, connected automotive systems and smart home appliances to sustainable lighting and cloud data center infrastructures. Although Flex has evolved beyond traditional EMS, the majority of our customers are electronics original equipment manufacturers ("OEMs"); as such, the closest broad definition of our industry remains the outsourced EMS industry.
EMS has experienced significant change and growth as an increasing number of companies elect to outsource some or all of their design, manufacturing, and after-market services requirements. In recent years we have seen an increased level of diversification by many companies, in the technology, automotive and healthcare industries along with the convergence of many industries being transformed by technology advancements. Companies that have historically identified themselves as software providers, internet service providers, or e-commerce retailers are entering the highly competitive and rapidly evolving hardware markets, with products that include mobile devices, home entertainment products, and wearable devices. This trend has resulted in significant changes to the hardware manufacturing and supply chain solutions requirements of such companies. Increasingly complex products require highly customized supply chain solutions, in turn resulting in significant changes to the overall manufacturing and supply chain landscape. The growth of the overall industry for calendar year 2018 is estimated to have been around 4%.
We believe the total available market for the EMS industry is poised for continued growth, with current penetration rates estimated to be about 31%. The intensely competitive nature of the electronics industry, the increasing complexity and sophistication of electronics products, and pressure on OEMs to reduce product costs and shorten product life cycles are all factors that encourage OEMs to utilize supply chain service providers as part of their business and manufacturing strategies. Utilizing global manufacturing and service providers allows OEMs to take advantage of the global design, manufacturing and supply chain management expertise of such providers, and enables OEMs to concentrate on product research, development, marketing, and sales. We believe that OEMs realize a number of important benefits through their strategic relationships with EMS providers, including:
Improved inventory management and purchasing power;

Access to worldwide design, engineering, manufacturing, and after-market service capabilities;

Ability to focus on core branding and R&D initiatives;

Accelerated time-to-market and time-to-volume production;

Improved efficiency and optimized production costs;

Improved product quality through advanced design and production at scale; and

Reduced capital investment requirements and fixed costs;
We believe that growth in the EMS industry will be largely driven by the need for OEMs to respond to rapidly changing industries, markets and technologies, the increasing complexity of supply chains and the continued pressure to be innovative and cost competitive. Additionally, we believe that there are significant opportunities for global EMS providers to win additional business from OEMs in markets or industry segments that have yet to substantially utilize such providers.
SERVICE OFFERINGS
We offer a broad range of customizable services to our customers. We believe that Flex has the broadest worldwide product development lifecycle capabilities in the industry, from concept design to manufacturing to aftermarket and end of life services. We believe aour key competitive advantage isadvantages are our people, processes, and capabilities for making products, systems, and solutions for our customers:
Speed:Time to market advantage: Our sophisticated supply chain management tools and expertise allow us to provide customers with access to real-time information that increases visibility and reduces risk throughout the entire product lifecycle, reducing risk while accelerating execution.
lifecycle. Our experience with new product introductions and manufacturing ramps provides customers with a time to market advantage.

Scope:  Our full range of services, from Sketch-to-Scale®, include innovation and design, engineering, manufacturing, forward and reverse logistics, and circular economy supply chain management. Our deep industry and cross-industry knowledge and multi-domain expertise accelerate the production of increasingly complex products for increasingly interconnected industries.

Broad range of services: Our full range of services include innovation and design, engineering, manufacturing, supply chain management, forward and reverse logistics, and circular economy solutions. Our deep cross-industry knowledge and multi-domain expertise accelerate the production of increasingly complex products for increasingly interconnected industries.
Scale:  OurGlobal scale: Flex’s physical infrastructure includes over 100 facilities in approximately 3530 countries, staffed by approximately 200,000170,000 employees, providing our customers with truly global scale and strategic geographic distribution capabilities.
We offer global economies of scale in advanced materials and technology sourcing, manufacturing and after-market services, as well as market-focused expertise and capabilities in design and engineering. As a result of our extensive experience in specific markets, we have developed a deep understanding of complex market dynamics, giving us the ability to anticipate trends that impact our customers' businesses. Our expertise can help improve our customers' market positioning by effectively adjusting product plans and roadmaps to efficiently and cost-effectively deliver high quality products that meet their time-to-marketgeographic and time to market requirements.
Our services include all processes necessary to design, build, ship, and service a wide range of products for our customers. These services include:
Innovation Services.    We provide a comprehensive set of services that enable companies to successfully ideate, create new products and solutions, and gain access to new markets. These services span the entire product introduction and solution lifecycle by providing access to new cross-industry and technology platforms and building block technologies, accelerating innovation and product development from early concepts to final production-ready design, and providing advanced manufacturing and testing for new product introduction and market access to grow our customers' offerings. This area of our business has seen increased investment and focus over the past few years.
Beyond our flagship Customer Engagement Center in Silicon Valley, we have established a global network of Design and Engagement Centers. Our innovation and design services include:
Innovation and Design Centers. Our Innovation and Design Centers specialize in supporting customer design and product development. Customers gain access to our design and engineering facilities, technical subject matter expertise, and rapid prototyping resources such as metal and plastic 3D printers and soft tooling capabilities.

Cross-industry Technologies. Along with our portfolio of building block technologies in electrical/electronics, electromechanical, and software, we also have deep technical expertise in cross-industry technologies. Our Cross-industry technologies are a combination of building block technologies expertly applied to products and solutions for use within numerous industries. These technologies include: Human Machine Interface (HMI), Audio and Video, System in Package (SIP), Miniaturization, IoT Platforms and Asset Tracking.

Centers of Excellence/Competence. Our Centers of Excellence/Competence provide strategic technology capabilities developed by Flex in critical solutions areas which leverage our expertise across multiple

industries, for integration into our customers' products and next generation industry requirements. Centers of Excellence/Competence have specialized capabilities in connectivity, sensors and actuators, power, battery, interconnects and PMATX, smart software, optical, and "soft" Systems.

Systems Integration Services. Through systems integration, we design and integrate advanced data center servers, storage and networking equipment and data center appliances, providing engineering and design services with an emphasis on multivendor integration and open technologies that promote interoperability at a lower cost. Our CloudLabs provide a staging lab for customers to deploy the latest technologies, allowing for performance testing of workloads and enabling faster diffusion of technologies in a controlled environment.
Design and Engineering Services.   We offerServices. The Company offers a comprehensive range of value-added design, engineering and engineeringsystems integration services, tailored to specific industries and markets, and the needs of our customers. These services can be delivered using one of two primary business models:
Design Services, where customers, purchase engineering and development services on a time and materials basis; or

Joint Design and Manufacturing Services, where our engineering and development teams work jointly with our customers' teams to ensure product development integrity, seamless manufacturing handoffs, and faster time to market.
Our design and engineering services are provided by our global market-based engineering teams and cover a broad range of technical competencies:
System Architecture, architecture;
User Interfaceinterface and Industrial Design. We help our customers designindustrial design;
Cross-industry technologies;
Hardware design;
Software design; and develop innovative and cost-effective products that address the needs of the user and the market. These services include product definition, analysis and optimization of performance and functional requirements, 2-D sketch level drawings, 3-D mock-ups and CAD drawings, proofs of concept, product prototypes, interaction and interface models, detailed hard models, and product packaging.

Hardware Design. We offer design for printed-circuit board assemblies (PCBA); identification and selection of key components, Subsystem design and full-product design including electrical and mechanical design. We provide complete electrical and hardware design for products ranging from small handheld consumer devices to large, high-speed, carrier-grade, telecommunications equipment, incorporating embedded microprocessors, memory, digital signal processing, high-speed digital interfaces, analog circuit design, power management solutions, wired and wireless communication protocols, display imaging, audio/video, and radio frequency systems and antenna design. In addition, we offer detailed mechanical, structural, and thermal design solutions for enclosures that utilize a wide range of plastic, metal and other material technologies. These capabilities and technologies are increasingly important to our customers' product differentiation goals.

Software Design. We offer cloud integration design services which include developing and embedding a cloud agent onto a device, firmware and applications services including developing and embedding software of functionality and user-specific tasks and features.

Design for Excellence. We provide comprehensive design for manufacturing, testing, and reliability services leveraging robust, internally-developed tools and databases. These services leverage our core manufacturing competencies to help our customers achieve their time-to-revenue goals.
excellence.
We areFlex is exposed to different orand, in some cases greater, potential liabilities from ourthe various design services we provide than those we typically face in our core assembly and manufacturing services. See "Risk Factors—The success of certain of our activities depends on our ability to protect our intellectual property rights; claims of infringement or misuse of intellectual property and/or breach of license agreement provisions against our customers or us could harm our business."
Systems Assembly and Manufacturing.Manufacturing. Our systems assembly and manufacturing operations which generate the majority of our revenues and include printed circuit board assembly and assembly of systems and subsystems that incorporate printed circuit boards and complex electromechanical components. We assemble electronicselectronic products with custom electronic enclosures on
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either a build-to-order or configure-to-order basis. In these operations, we employ just-in-time, ship-to-stock and ship-to-line programs, continuous flow manufacturing, demand flow processes, and statistical process controls. As our customers seek to provide greater functionality in physically smaller products, they increasingly require more sophisticated manufacturing technologies and processes. Our investment in advanced manufacturing equipment and our expertise in innovative miniaturization, packaging and interconnectinterconnective technologies, enablesenable us to offer a variety of leading-edge manufacturing solutions.

We support a wide range of product demand profiles, from low-volume, high-complexity programs, to high-volume production. A continuous focus on Lean manufacturing, and a systematic approach to identifying and eliminating waste (non-value-added activities) through continuous improvement based on customer demand allows us to increase our efficiency and flexibility to meet dynamic customer requirements. Our systems assembly and manufacturing expertise includes the following:
Enclosures. We offer a comprehensive set of custom electronicscapabilities include enclosures, and related products and services. Our services include the design, manufacture, integration and deployment of electronics packaging systems, including custom enclosure systems, power and thermal subsystems, interconnect subsystems, cabling, and cases. In addition to standard sheet metal and plastic fabrication services, we assist in the design of electronics packaging systems that protect sensitive electronics and enhance functionality. Our enclosure design services focus on functionality, manufacturability, and testing. These services are integrated with our other assembly and manufacturing services to provide our customers with improved overall supply chain management.

Testing Services. We offer computer-aided testing services, for assembled printed circuit boards, systems, and subsystems. These services significantly improve our ability to deliver high-quality products on a consistent basis. Our test services include management defect analysis, in-circuit testing and functional testing; as well as environmental stress tests of board and system assemblies. We also offer design for test, manufacturing, and environmental services to jointly improve customer product design and manufacturing.

Materials Procurement and Inventory Management. Our manufacturing and assembly operations capitalize on our materials inventory management expertise and volume procurement capabilities. As a result, we believe that we are able to achieve highly competitive cost reductions and shorten total manufacturing cycle times our OEM customers. Materials procurement and management consists of the planning, purchasing, expediting, and warehousing of components and materials used in the manufacturing process. In addition, our strategy includes having third-party suppliers of custom components located in our industrial parks to reduce material and transportation costs, simplify logistics, and facilitate inventory management. We also use a sophisticated automated manufacturing resource planning system and enhanced electronic data interchange capabilities to ensure inventory control and optimization. Through our manufacturing resources planning system, we have real-time visibility of material availability and are able to track work in process. We utilize electronic data interchange with our customers and suppliers to implement a variety of supply chain management programs. Electronic data interchange allows customers to share demand and product forecasts, deliver purchase orders and assists suppliers with satisfying just-in-time delivery and supplier-managed inventory requirements. This also enables us to implement vendor-managed inventory solutions to increase flexibility and reduce overall capital allocation in the supply chain. We procure a wide assortment of materials, including electronic components, plastics and metals. There are a number of sources for these materials, including customers for whom we are providing systems assembly and manufacturing services. On some occasions, there have been shortages of certain electronic components, most recently this has been connectors, capacitors, LCD panels and memory (both DRAM and Flash). However, such shortages have not had a material impact on our operating results for any periods presented. See "Risk Factors—We may be adversely affected by supply chain issues, including shortages of required electronic components."
Components Business.Power Solutions. We offer a full-service power supply business that provides a range of solutions from custom to highly scalable system solutions. Flex hasWe have expertise in high efficiency and high-density switching power supplies ranging from 1 to 3,000 watts. Our product portfolio includes chargers for smartphones and tablets, adapters for notebooks and gaming systems, and power supplies for the server, storage, and networking markets. Our Power Modules business designs and manufactures a wide range of isolated DC/DC converters and non-isolated Point of Load (PoL) converters intended primarily, although not exclusively,In fiscal year 2022, Flex acquired Anord Mardix to expand our power solutions for the Informationrapidly growing data center market. Anord Mardix offers an extensive product portfolio of critical power solutions including switchgear, busway, power distribution and Communications Technology market, including Serversmodular power systems, along with monitoring solutions and High-Performance Computing applications. We also offer specializedservices. This portfolio combined with our embedded power, moduleserver and storage products, racks and enclosures and full systems assembly capability will accelerate our growth in the data center market.
Solar Tracker and Software Solutions. Our Nextracker business is the leading provider of intelligent, integrated solar tracker and software solutions suitable for other markets. We pride ourselves on our ability to serviceused in utility-scale and ground-mounted distributed generation solar projects around the needs of industry leaders in these markets through valuable technology, design expertise, collaborative development, and efficient execution.world. Our products are fully compliantenable solar panels in utility-scale power plants to follow the sun’s movement across the sky and optimize plant performance. By optimizing and increasing energy production and reducing costs, our tracker products and software solutions offer significant return on investment (“ROI”). Single axis solar trackers generate up to 25% more energy than projects that use fixed-tilt systems that do not track the sun. We have developed an intelligent independent row tracking system with proprietary technology that we believe produces more energy, lowers operating costs, and is easier to deploy compared to other tracker products. Our tightly-integrated software solutions use advanced algorithms and artificial intelligence technologies to optimize the environmentalperformance and Energy Star requirements that drive efficiency specifications incapabilities of our industry. Customers who engage with Flex gain access to compelling innovations and design expertise in digital control and smart power.tracker products.
Logistics.    OurLogistics. The Flex Global Services business is a provider of services includingprovides after-market and forward supply chain logistics services. Our comprehensive suite of services is tailored to customers operating in the computing, consumer digital, infrastructure, industrial, mobile, automotive and medical industries. Our expansive global infrastructure includes 27 sites and approximately 11,000 employees strategically located throughout the Americas, Europe, and Asia. By leveraging our operational infrastructure, supply chain network, and IT systems, we are able to offer our customers globally consistent logistics solutions. By linking the flow of information from these supply chains, we create supply chain insight for our

customers. We provide multiple logistics solutions including supplier-managed inventory, inbound freight management, product postponement, build/configure to order, order fulfillment and distribution, asset tracking, and supply chain network design.
Reverse Logistics and Repair Services.Circular Economy Solutions. We offer a suite of integrated reverse logistics, repair and repairrefurbishment solutions that use globally consistent processes, which help increase our customers' brand loyalty by improving turnaround times and raising end-customer satisfaction levels. Our objective is to maximize asset value retentionlevels while significantly reducing the carbon footprint for our customers' products throughout their product life cycle while simultaneously minimizing non-value added repair inventory levels and handling in the supply chain. With our suite of end-to-end solutions, we can effectively manage our customers' reverse logistics requirements, while providing critical feedback to their supply chain constituents, delivering continuous improvement and efficiencies for both existing and next generation products.customers. Our reverse logistics and repair solutions include returns management, exchange programs, complex repair, asset recovery, recycling and e-waste management. We provide repair expertise to multiple product lines such as consumer and midrange products, printers, smart phones, consumer medical devices, notebook personal computers, set-top boxes, game consoles and highly complex infrastructure products. With our service parts logistics business, we manage all of the logistics and restocking processes essential to the efficient operation of repair and refurbishment services.
STRATEGY
We help our customers responsibly build products for a connected world. We do this by providing our customers with product development lifecycle services, from innovation, design, and engineering, to manufacturing, logistics, and supply chain solutions. Our strategy is to enable and scale innovation for our customers, maintain our leadership in our capabilities, and build extended offerings in high-growth industries and markets.
Talent.    To maintain our competitiveness and world-class capabilities, we focus on hiring and retaining the world's best talent. We empower talented employees to develop innovative solutions that transform industries and companies. We have taken steps to attract the best engineering, functional and operational leaders and have accelerated efforts to develop the future leaders of the company.
Customer Focus.    We believe that serving leaders in dynamic industries fosters the development of our core skills and results in superior growth and profitability. Our customers come first, and we have a relentless focus on delivering distinctive products and services in a cost-effective manner with fast time-to-market.
Market Focus.    We aim to apply a rigorous approach to managing our portfolio of opportunities by focusing on companies that are leaders in their industry and value our superior capabilities in design, manufacturing, and supply chain services. We focus our energy and efforts on high-growth industries and markets where we have distinctive competence and compelling value propositions. Examples include our investments in specific technologies and industries including healthcare, automotive, industrial markets, and energy. Our market-focused approach to managing our business increases our customers' competitiveness by leveraging our deep vertical industry and cross-industry expertise, as well as global scale, regional presence and agility to respond to changes in market dynamics.
Global Operations Capabilities.    We continue to invest in maintaining the leadership of our world-class manufacturing and services capabilities including automation, new product introduction and large-scale manufacturing. We constantly push the state of the art in manufacturing technology, process development and operations management. We continue to capitalize on our industrial park concept, where we co-locate our design, manufacturing, and service resources globally in lower-cost regions, to provide a competitive advantage by minimizing logistics, manufacturing costs, and cycle times while increasing flexibility and responsiveness. We believe our global scale, breadth of services, IP, and assets contribute to our significant competitive advantage.
Extended Value Propositions.    We continue to extend our distinctiveness in manufacturing into new value propositions that leverage our core capabilities. We opportunistically invest in new technologies, capabilities and services to provide our customers with a broader value-added suite of innovative services and solutions to meet their product and market requirements.
COMPETITIVE STRENGTHS
We continue to enhance our business through the development and expansion of our product and service offerings. We strive to maintain the efficiency and flexibility of our organization, with repeatable execution that adapts to macro-economic changes to provide clear value to our customers, while increasing their competitiveness. We have a focused strategy on delivering scale, scope and speed to our customers through world-class innovation and design services, operations, supply chain solutions, and industry and market expertise. We provide active tracking and real-time data analytics (Flex Pulse®) that enable improved supply chain visibility, allowing customers to better monitor and mitigate risks. We believe the following capabilities further differentiate us from our competitors and better serve our customers' requirements:

Significant Scope and Global Scale.    We believe that scale is a significant competitive advantage, as our customers' solutions increasingly require capabilities and competitive solutions that can only be achieved through capabilities scope and global scale.
We have established an extensive, integrated network of design, manufacturing and logistics facilities in the world's major consumer electronics and industrial markets to serve the outsourcing needs of both multinational and regional companies. Our extensive global network of over 100 facilities in approximately 35 countries with approximately 200,000 employees, helps increase our customers' competitiveness by simplifying their global product development processes while delivering improved product quality with improved performance and accelerated time to market.
Additionally, we are a leader in global procurement, purchasing approximately $27 billion of electrical and mechanical materials during our fiscal year ended March 31, 2019. This scale provides us with an ability to use our worldwide supplier relationships to achieve leading-edge technologies, access, supply chain flexibility and advantageous pricing for our customers.
Digitized Supply Chain Solutions.    We offer a comprehensive range of worldwide supply chain services that simplify and improve global product development processes, providing meaningful time and cost savings to our customers. Our broad-based, full cycle services enable us to cost effectively design, build, ship and service a complete packaged product. We believe that our capabilities help our customers improve product quality, manufacturability and performance, while optimizing costs. We have expanded and enhanced our service offerings by adding capabilities in innovation and design centers, modern manufacturing including additive manufacturing, automation, robotics, real-time supply chain software, end-to-end supply chain modeling and simulation, precision plastics, and machining.
Long-Standing Customer Relationships.    We believe that maintaining our long-term relationships with key customers is a critical requirement for maintaining our market position, growth and profitability. We believe that our ability to maintain and grow these customer relationships results from our history and reputation of creating value for our customers while increasing their own competitiveness. We achieve this through our market-focused approach, our broad range of service offerings and solutions, and our deep vertical industry and cross-industry expertise, which allow us to provide innovative solutions to all of the manufacturing and related service needs of our customers. We continue to receive numerous service and quality awards that further validate the strength of our customer relationships.
Extensive Design and Engineering Capabilities.    We have an industry-leading global design service offering, with extensive product design engineering resources, that provides design services, product developments, and solutions to satisfy a wide array of customer requirements across all of our key industries and markets. We combine our design and manufacturing services to provide Sketch-to-Scale® customized solutions that include services from design concept, through product industrialization and development, including the manufacture of components and complete products across the industries and market that we serve, which are then sold by our customers under their brand names.
Geographic, Customer and End Market Diversification.    We believe we have created a well-diversified and balanced company. Our business spans multiple end markets, significantly expanding our total available market. The world is experiencing rapid changes, and macro-economic disruptions have led to demand shifts and realignments. We believe that we are well-positioned through our market diversification to grow faster than the industry average and successfully navigate through difficult economic times. Our broad geographic footprint and experiences with multiple product types and complexity levels create a significant competitive advantage. We continually look for new ways to diversify our offering within each market segment.
Customer and Product Innovation Hubs.    We have established state-of-the art innovation hubs in the Americas, Asia and Europe, with differentiated offerings and specialized services and focus. With subject matter expertise in connectivity, sensors and actuators, batteries, power, interconnects, human machine interfaces, smart textiles, optical technologies, software & security and advanced manufacturing, our technology leaders collaborate with customers to co-develop their next generation of products.  We offer concepting and quick-turn prototyping utilizing the most advanced 3D plastic printing, 3D metal printing, surface mount technology (SMT), AI, Machine Learning and advanced collaborative software to support major industries in bringing innovative products to market rapidly. We are dedicated to providing quality and reliable solutions to meet the customers’ requirements. We ensure confidentiality offering dedicated customer-confidential work spaces that provide increased security and restricted access to protect our customers' intellectual property and the confidentiality of new products being launched into the marketplace. These innovation hubs offer our customers a geographically-focused version of our Sketch-to-Scale® services, taking their product from concept to volume production and go-to-market in a rapid, cost effective and low risk manner.
Industrial Parks; Cost-Efficient Manufacturing Services.    We have developed self-contained campuses that co-locate our manufacturing and logistics operations with our suppliers in various cost-efficient locations. These sites enhance our supply chain management efficiency, while providing multi-technology solution value for our customers. This approach increases the

competitiveness of our customers by reducing logistical barriers and costs, improving communications, increasing flexibility, lowering transportation costs and reducing turnaround times. We have strategically established our industrial parks in Brazil, China, India, and Mexico.
We have selected manufacturing operations situated in regions around the world to provide our customers with a wide array of manufacturing solutions where our customers and/or their customers are located. As of March 31, 2019, approximately 80% of our manufacturing capacity was located in emerging markets, including Brazil, China, Hungary, India, Indonesia, Malaysia, Mexico, Poland, Romania, and the Ukraine.
Sustainability. We believe in the power of technology to connect people, products and services to create a smarter, more sustainable future. It’s not just good business, but it’s good for the environment, for people and the communities in which we live and work. This belief forms the cornerstone of our sustainability commitments and actions.
CUSTOMERS
Our customers include many of the world's leading technology companies. We have focused on establishing long-term relationships with our customers and have been successful in expanding our relationships to incorporate additional product lines and services.
As our business spans multiple end markets, we believe that we are well-positioned through our market diversification to grow faster than the industry average and successfully navigate through difficult economic times. As an example, we serve the following key customers across our diverse business groups: health solutions customers Abbott and Johnson & Johnson and auto customers Ford and Nexteer in our HRS segment; Teradyne, Applied Materials and Xerox in our IEI segment; Cisco, Nokia Solutions and Ericsson in our CEC segment; and Lenovo/Motorola, HP and Bose in our CTG segment.
In fiscal year 2019, our ten largest customers accounted for approximately 43% of net sales. No customer accounted for greater than 10% of the Company's net sales in fiscal year 2019.
BACKLOG
Although we obtain firm purchase orders from our customers, OEM customers typically do not place firm orders for delivery of products more than 30 to 90 days in advance. In addition, OEM customers may reschedule or cancel firm orders depending on contractual arrangements. Therefore, we do not believe that the backlog of expected product sales covered by firm purchase orders is a meaningful measure of future sales.
COMPETITION
OurFlex’s contract manufacturing services market is extremely competitive and includes many companies, several of which have achieved substantial market share.competitive. We compete against numerous domestic and foreign manufacturing service providers, as well as our current and prospective customers, who evaluate our capabilities in light of their own capabilities and cost structures. We face particular competition from Asian-based competitors, including Taiwanese Original Design Manufacturing ("ODM") suppliers who compete
In recent years, we have seen an increased level of diversification by many companies in a varietythe technology, automotive and healthcare industries along with the convergence of our end marketsmany industries being transformed by technology advances. Increasingly complex products require highly customized solutions, in turn resulting in significant changes to the overall manufacturing and have a substantial share of global information technology hardware production.supply chain landscape.
We compete with different companies depending on the type of service we are providing or the geographic area in which an activity takes place. We believe that the principal competitive factors in the contract manufacturing services market are:are quality and range of services; design and technological capabilities; cost; location of sites; and responsiveness and flexibility. We believe we are extremely competitive with regard to all of these factors.
CORPORATE SOCIAL RESPSONSIBLITY
Sustainability remains central to whoWe also compete in the solar industry with our specialized tracker solutions and we believe the principle factors that drive competition in this market include established track record of product performance; system energy yield; software capabilities; product features; total cost of ownership and return on investment; reliability; customer support; product warranty terms; services; supply chain and logistics capabilities; and vendor financial strength and stability. We believe we are extremely competitive with regard to all of these factors.
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COMPETITIVE STRENGTHS
We continuously enhance our business through the development and expansion of our product and service offerings. We strive to maintain the efficiency and flexibility of the organization, with repeatable execution that adapts to macro-economic changes to provide clear value to customers, while increasing their competitiveness. We have a focused strategy on delivering value to customers through manufacturing technology, a trusted supply chain, innovation and design services, and domain expertise.
Significant Scope and Global Scale. We believe our global scale and regional capability are a significant competitive advantage, as customers increasingly require a broad range of manufacturing and supply chain services and solutions globally. Increasingly, customers are exploring transitioning to regional-based supply chains to take advantage of time to market and specific customization required to win in those markets. Our global expertise, footprint and diverse supply chain network provides customers with the ability to quickly adjust to changing regional, trade and manufacturing dynamics.
Trusted Resilient Supply Chain. We offer one of the most trusted and resilient global supply chain services through a combination of digital supply chain capabilities, deep expertise, real time visibility and analytics, and collaborative supplier relationships to help customers navigate complex, global supply chains.
Long-Standing, Diverse Customer Relationships. We believe our long-term relationships with key customers are the result of our track record of meeting commitments and delivering value that increases customers' competitiveness. We serve a wide range of customers across six business units within the FAS and FRS segments in addition to our Nextracker business. No customer accounts for more than 10% of our annual revenue and the ten largest accounted for 34% of the Company’s net sales in fiscal year 2022. We believe we are well-positioned to grow faster than the industry average.
Extensive Design and Engineering Capabilities. We have an industry-leading global design service offering, with extensive product design engineering resources that provides design services, product development, and solutions to satisfy a wide array of customer requirements across all of the key industries and markets in which we do business.
Balanced geographic footprint. We have deployed manufacturing operations in regions around the world to provide customers with a wide array of solutions where our customers and/or their customers are located. We have a very balanced global manufacturing footprint with 34% of net sales in North America, 24% in China, 22% in Europe, the Middle East and Africa ("EMEA"), and 20% in other areas for fiscal year ended March 31, 2022 (with net sales attributable to the country in which the product is manufactured, or service is provided).
Cross-industry synergies.One of our competitive strengths is our ability to leverage technology from one industry and apply it to a different application within another industry. Examples include high-end computing, human machine interface, and internet of things ("IoT"). This cross-industry synergy gives our customers access to technology they would not otherwise have.
Customer and Product Innovation Hubs. We have established state-of-the art innovation hubs in the Americas, Asia and Europe, with differentiated offerings and specialized services for specific industries and markets. These innovation hubs offer customers geographically focused centers of design services, taking their products from concept to volume production and go-to-market in a rapid, cost effective and low risk manner.
Industrial Parks; Cost-Efficient Manufacturing Services. We have developed self-contained industrial parks that co-locate manufacturing and logistics operations with our suppliers in various cost-efficient locations. These sites enhance supply chain management efficiency, while providing multi-technology solution value for customers.
Innovative and Reliable Tracker Solutions. Our solar trackers provide high levels of performance and operability and improve over time through software enhancements when coupled with our software solutions. The benefits of our solutions include increased energy yield performance, superior constructability, reliability, ease of maintenance, and advanced software and sensor capabilities.
HUMAN CAPITAL MANAGEMENT
Culture underlies our stakeholder experience. Our values are intended to reflect and guide our behaviors and shape our culture. We endeavor for our value-driven culture to align us as we pursue our purpose, uphold our mission, live our values, advance toward our vision, and activate our strategy.
In support of cultivating an inclusive, high-performing culture, we adopted four specific behaviors that support our values and continued progress on our Flex Forward strategy. These behaviors, called our Ways of Working, bring our values to life through actions and are intended to provide a framework for how we operate. Our sustainability governance principles aremake decisions. The purpose of these behaviors is to enable us to put our culture into practice and provide an accountability system through training and development as well as performance management systems to ensure our desired behaviors become a core part of our everyday working norms.
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How we live our values define our culture:
We support each other as we strive to find a better way.
We move fast with discipline and purpose.
We do the right thing always.
We bring our values to life through four behaviors:
1.Respect and Value Others.
2.Collaborate and Share Openly.
3.Learn and Adapt.
4.Honor Commitments.
We believe that the performance of our Company is impacted by our human capital management, and as a result we consistently work to attract, select, develop, engage and retain strong, diverse talent. Our policies, philosophy and strategies support the inclusion of all people in our working environment. Further, we’re committed to respecting the human rights of our employees and improving their quality of life.
In 2020, the Company introduced new vision, mission, purpose, and value statements in support of cultivating an inclusive, high-performing culture where employees are empowered and given opportunities to reach their full potential. We are committed to providing a positive and safe workplace for Flex employees, respecting their dignity, creating an inclusive environment, and ensuring access to opportunity. We recognize that we have an opportunity to promote and support a culture of inclusion and diversity, wellness, and health and safety among our employees.
Employees. As of March 31, 2022, our global workforce totaled approximately 172,648 employees including our contractor workforce. In certain international locations, our employees are represented by labor unions and by work councils.
Region:Number of Employees
Asia76,002
Americas62,450
Europe34,196
Total172,648
Well-being, Health, and Safety. Flex is committed to providing a safe and injury-free workplace. We provide programs and tools to improve physical, mental, financial, and social well-being, with increased focus during the COVID-19 pandemic. Our programs give access to a variety of innovative, flexible, and convenient health and wellness programs for our global employees, including on-site health centers in some of our major factories, which were increasingly critical this year for our essential workers who have worked on site since the start of the COVID-19 pandemic.
We promote a “zero-injury” culture through health and safety management systems, some of which are certified ISO 45001:2018, that implement a data-driven and risk-based approach in monitoring and reporting performance regularly. Some of the specific goals for which we measure our performance include increasing employee development, social and environmental management system audits, human rights policy training completion, Responsible Business Alliance ("RBA") compliance for rest day requirements and decreasing safety incident rates.
In response to the ongoing COVID-19 pandemic, we continued our contingency and resiliency plans that are encompassed in our business operations. Through innovationcontinuity programs. We continued enhanced health and smart technologies,safety measures across all facilities, as our foremost focus remains the health and safety of our employees. We modified practices at our manufacturing locations and offices to require personal protective equipment, sanitization measures, temperature checks, and social distancing. These measures enabled us to continue to conduct operations throughout the pandemic and have been recognized by several governments as a role model for employee safety.
Diversity, Equity and Inclusion. Diversity, equity and inclusion are key priorities and strengths at Flex and are embedded in the fabric of our culture. Our commitment to diversity is exemplified by the composition of our Board of which three of twelve directors are female and five of twelve directors are ethnically diverse.
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In 2021, we continued our progress on improving diversity, equity and inclusion through employee programs. Our employee resources groups ("ERGs") work to create a community that fosters freedom of self, build cultural awareness, and develop a new generation of diverse leaders at Flex by establishing a sustainable solutions positivelystructure with executive support that challenges bias and promotes unity. With over 10,000 members, the Company maintains ERG chapters worldwide across eight identities: Asian and Pacific Islander, Black, LatinX, LGBTQ+, People with Disabilities, Women, Women in Tech, and Veterans. These groups help to create a sense of belonging and support retention and attraction. Each ERG has an executive sponsor and is supported by senior leaders across the Company. The Company also held cultural awareness activities throughout the year to highlight specific groups including People with Disabilities, Black History Month, Asian Pacific Heritage Month, PRIDE Month, LatinX Heritage Month, and Women’s History Month.
In partnership with McKinsey, we offered leadership development opportunities through their Management Accelerator and Executive Leadership Program to 45 Asian, 16 Black and 36 LatinX employees. We also enhanced SheLeads, our global leadership development program for women employees, offered leadership coaching to 20 of our top gender and ethnically diverse leaders, and continued to implement inclusive leadership training for people managers to, among other things, provide tools to help managers lead more inclusively and improve diversity in recruiting. Furthermore, we leveraged external community partnerships with organizations such as Catalyst, the Business Roundtable, the National Society of Black Engineers (“NSBE”) and The Valuable 500, to amplify our impact in recruiting and retaining diverse talent.
As of March 31, 2022, women represent 43% of our global employees, and underrepresented minorities (those who identify as Black/African American, Hispanic/Latinx, Native American, Pacific Islander and/or two or more races) represent 47% of our U.S. employees. Approximately 19% of our executive team and approximately 22% of our leadership team (director level and above) are female. Approximately 23% of our executive team and approximately 32% of our U.S. leadership team (director level and above) are comprised of underrepresented minorities.
We established corporate goals to increase the number of employees and leaders from underrepresented groups and will continue to evolve these goals over time to improve representation. In developing these goals, we focused on hiring, retaining and promoting diversity across the organization. Additionally, we remain committed to parity in pay and opportunity.
Talent Attraction, Development, and Retention. Talent attraction, development, and retention are critical to our success and core to our mission as a company. To support the advancement of our employees, we provide training and development programs and opportunities encouraging advancement from within as well as continue to fill our team with strong and experienced external talent. We leverage both formal and informal programs, including in-person (as health and safety allows), virtual, social and self-directed learning, mentoring, coaching, and external development to identify, foster, and retain top talent. Employees have access to courses through our learning and development platform, Flex Learn. In 2021, 36,894 of our employees completed 1 million hours of training programs. Flex has undertaken initiatives to keep employees who are working from home engaged during COVID-19, including virtual learning programs and check-in sessions.
We are also focused on completing talent and performance reviews. Our in-depth talent reviews serve to identify high potential talent to advance in roles with greater responsibility, assess learning and development needs, and establish and refresh succession plans for critical leadership roles across the enterprise. Our performance review process promotes transparent communication of team member performance, which we believe is a key factor in our success. The performance and the talent reviews enable ongoing assessments, reviews, and mentoring to identify career development and learning opportunities for our employees.
As a part of our efforts to improve employee experiences at Flex, we conduct the annual enterprise-wide employee engagement Flex Voice survey. Our leadership uses the results of the survey to continue developing our strengths and measure opportunities for improvement. This year 85% of employees completed the Flex Voice survey and the results reflected increased enthusiasm and engagement.
Compensation and Benefits. Our total rewards are designed to attract, motivate and retain employees. Our compensation philosophy is driven by the desire to attract and retain top talent, while ensuring that compensation aligns with our corporate financial objectives and the long-term interests of our shareholders. Our pay structures offer competitive salaries, bonuses, and equity awards in the countries where we operate.
In each of the countries where we have operations, our comprehensive benefit plans offer a locally competitive mix of some or all of the following: medical, dental and vision insurance, short and long-term disability, flexible spending accounts, various types of voluntary coverage, and other benefit programs. We routinely benchmark our salaries and benefits against market peers to ensure our total rewards package remains competitive.
Board Oversight of Human Capital Management. The Compensation and People Committee of our Board of Directors is responsible for assisting the Board in oversight of our human capital management, including among other aspects, receiving periodic updates (not less than twice annually) regarding, and overseeing any significant change to, our human capital
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management strategy including corporate culture, inclusion, pay and opportunity equity, diversity, social initiatives and results, and talent training, development and retention programs.
Additional Human Capital Management Information. Additional information regarding human capital management will be included in our proxy statement filed in connection with our 2022 Annual General Meeting and our upcoming sustainability report. The information in the sustainability report is not a part of this Annual Report on Form 10-K and is not incorporated by reference.
SUSTAINABILITY
At Flex, our sustainability journey began in 2002 with the creation of the Flex Foundation. For nearly 20 years, sustainability has been integrated into the fabric of our company, a key area of differentiation for Flex. In 2021, we refreshed our sustainability strategy with a new framework and joined the Science Based Targets initiative, a global movement comprised of leading companies working to reach the Paris Agreement’s goal of limiting global temperature rise to 1.5°C above preindustrial levels. Our sustainability framework is centered on the world, our people and our approach to business practices. Through our 2030 goals, we are committed to reducing our environmental impact in partnership with customers and suppliers, advancing a safe, inclusive and respectful work environment for our employees, investing in our communities, and driving ESG-focused practices with transparency.
Our strategy and global efforts, through our sustainability programs and multi-year objectives, are aligned with the environment.
Since February 2018,principles set forth in the 2030 Sustainable Development Goals ("SDGs"). For the last three years, we have been participantswere named an Advanced member of the United Nations Global Compact ("UNGC"), the world's largest corporate sustainability initiative, to showcaseshowcasing our commitment to integrate sustainability throughout our company and across our entire supply chain. Our commitment aims2030 sustainability strategy includes our most ambitious goals to help customers, partnersdate and other businesses increase their own efforts to build a more sustainable future.
Our strategy and global efforts, through our sustainability programs and multi-year "Flex 20 by 2020 goals," are aligned with the principles set forth in the UNGC, and the 2030 Sustainable Development Goals ("SDGs"). While our global efforts

contribute to most of the SDGs, we have prioritized them and focus on decent work, quality education, clean energy and responsible consumption and production.
We achievespans several environmental, social, and environmental compliance through a robust integrated management system that consolidates several management systems into one. Our Corporate Socialgovernance pillars. Several goals of note include cutting operational emissions in half, collaborating with customers and Environmental Responsibility management system has several elements, including environmental,suppliers to reduce value chain emissions, increasing gender representation at the director-level and above, providing access to mental health and safety compliance, laborwell-being services to all employees, and human rightsmaintaining top quartile performance for governance and ethics.transparency. The Flex Social and Environmental framework is based upon the principles, policies, and standards prescribed by the Responsible Business Alliance (“RBA”),RBA, a worldwide association of electronics companies committed to promoting an industry code of conduct for global electronics supply chains to improve working and environmental, health and safety conditions, as well as other relevant international standards (e.g., ISO 14001, United Nations Guiding Principles on Business and Human Rights). Flex is a founding member of the RBA. Social responsibility is also an area of increasing concern, with specific regulations such as the California Transparency in Supply Chains Act, the U.S. Federal Acquisition Regulation on Human Trafficking
During calendar year 2021, we received several awards and the U.K. Modern Slavery Act of 2015, all creating new compliance and disclosure obligations for the Company andaccolades for our customers. We operate a number of programs,sustainability program and efforts including compliance audits, data collection, trainingthe RBA’s Compass Award and Supply & Demand Chain Executive’s Green Supply Chain Award. In addition, we received Ericsson’s 2021 supplier award for our leadership programs that focus upon driving continuous improvement in social, ethical, and environmental performance throughout all of our global operating units, all in accordance with our Code of Business Conduct and Ethics ("CoBCE"). We also go beyond compliance by offering a wide range of programs and initiatives to engage both our internal and external stakeholders.climate action.
We are committed to providing decent work forThrough the Flex employees, respecting their dignity and striving to advance human rights around the world. Our philosophy, strategies, and policies in human rights, health and safety, diversity and inclusion, support the inclusion of all people in our working environment. Some of the cornerstone specific goals through whichFoundation, we measure our performance include increasing employee development, social and environmental management system audits, human rights policy training completion, RBA compliance for rest day requirements and decreasing incident rates.
We work with nonprofits, community leaders and governments to promote inclusive and sustainable economic growth, employment, and decent work for all. We help protect the environment, support resource conservation and provide disaster relief. We accomplish this through grants, from the Flex Foundation, corporate and employee donations, and volunteerism. Our multi-year goalsIn calendar year 2021, the Flex Foundation partnered with several organizations, including the American Red Cross, World Wildlife Foundation, and Silicon Valley Education Foundation, among others, and provided nearly $1.5 million in this area cover increasing volunteer hoursgrant support to 48 local projects in 15 countries, four regional projects to support well-known organizations, including Give2Asia and Global Giving, and several NGOs that support minorities and the percentage of sites with community activities as well as implementing the worker empowerment training program and environment, globally.
Flex Foundation community grants.
We take necessary measures to protect the environment, conserve energy and natural resources, and prevent pollution by applying appropriate management practices and technology. We take actions to protect the environment, including but not limited to strict compliance with material requirements, reduction of greenhouse gas emissions, waste, water and energy consumption, and circular economy implementation, among others. Our multi-year goals for environment cover increasing our use of renewable energy, water recycling, waste diversion rate and number of powered homes equivalents and decreasing water consumption, CO2 emissions, and cost of electricity to the grid vs. fossil fuels.
Our corporate compliance program integrates our obligations and commitment to integrity into our day-to-day business practices. We expect our employees and business partners to follow the highest ethical standards. The CoBCE serves as the foundation of our Ethics and Compliance program. We conduct regular internal audits, and we maintain metrics around compliance to continuously benchmark and improve. Implementing in-person training on CoBCE for direct labor employees and increasing CoBCE training for annual completion for indirect labor employees are our integrity multi-year goals targeted for 2020.
We areis committed to continuously monitoring and complying with social and environmental requirements across the supply chain. We require our supplierstransparency in sustainability reporting. The Company has adhered to have a management system in place to ensure compliance and mitigate potential risks. We also have sustainability supply chain programs in place like on-site sustainability training for suppliers, working hours improvement and labor agent programs which help us to develop our supplier’s competencies for them to comply with the applicable requirements. We measure our progress through two goals, namely increasing out sustainability supplier training and supplier screening on social and environmental criteria.
All of these activities are the subject of our annual sustainability reporting, done in accordance with the Global Reporting Initiative’s (“GRI”) standards,Initiative since 2013 and furtherhas published an annual sustainability report each year since 2016. In 2021, we improved our rating from Morgan Stanley Capital International ("MSCI"), earning an AA, and maintained strong marks from CDP (formally known as Carbon Disclosure Project) for water security and climate change, receiving an A and A- respectively. The Company also aligned its last sustainability report to the Sustainability Accounting Standards Board framework.
More detailed information can be found in ourthe Flex annual sustainability executivereport located at https://flex.com/company/our-sustainability. The information in the sustainability report and GRI reports,on our sustainability webpage is not a part of this Annual Report on Form 10-K and is not incorporated by reference.
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ENVIRONMENTAL RISKS AND CLIMATE CHANGE
Our operations, including past and present business operations as well as the Flex 20 by 2020 bi-annual report posted on our website.
The Dodd-Frank Wall Street Reformpast and Consumer Protection Act (the “Dodd-Frank Act”), Section 1502, introduced reporting requirements relatedpresent ownership of real property, are subject to the verification of whether we are directly (or indirectly through suppliers of materials) purchasing the following minerals (“Conflict Minerals”): columbite-tantalite, also known as coltan (the metal ore from which tantalum is extracted); cassiterite (the metal ore from which tin is extracted); gold; wolframite (the metal ore from which tungsten is extracted); or their derivatives, which are limited to tantalum, tinextensive and tungsten; or any other mineral or its derivatives as determined by the U.S. Secretary of State to be associated with financing conflicts in the Democratic Republic of

the Congo or an adjoining country. We work directly with suppliers, industry groups, and customers to comply with the reporting requirements necessary to comply with this law. See "Risk Factors - Compliance with government regulations regarding the use of ‘Conflict Minerals’ may result in increased costs and risks to us." We have filed the required reports on Form SD with the Securities and Exchange Commission ("SEC") in accordance with the Dodd-Frank Act.
In addition, we are a founding member and active participant in the RBA’s Responsible Minerals Initiative ("RMI"). RMI promotes the goal of understanding and mitigating social and environmental impacts of extraction and processing of raw materials in supply chains. As an active member of RMI, we leverage direct and indirect partnerships and use international standards, e.g.. Organization for Economic Co-operation and Development ("OECD") Guidelines for Multinational Enterprises, and the United Nations (UN) Guiding Principles on Business and Human Rights, as our guides. We are committed to responsibly sourcing minerals, in accordance with our Responsible Sourcing Policy, and follow the RMI’s Conflict Minerals data reporting format.
ENVIRONMENTAL REGULATION
Our operations are regulated under variouschanging federal, state, local and international environmental, health and safety laws governingand regulations, concerning, among other things, the environment, including laws governinghealth and safety of our employees, the generation, use, storage, transportation, discharge and disposal of certain materials (including chemicals and hazardous materials) used in or derived from our operations, emissions or discharge of substances including pollutants into the air and water, the management and disposal of hazardous substances and wastes and the cleanupinvestigation and remediation of contaminated sites. We have implemented processes and procedures aimed to ensure that our operations are in compliancecomply with all applicable environmental regulations.
We also comply with an increasing number of regulations concerning product safety and stewardship, packaging and labeling as well as product environmental compliance regulations focused on the restriction of certain hazardous substances, including:
Restrictions on Hazardous Substances (“RoHS”) 2011/65/EU
Waste Electrical and Electronic Equipment (“WEEE”) 2012/19/EU directives
The regulation EC 1907/2006 EU Directive REACH (“Registration, Evaluation, Authorization, and Restriction of Chemicals”)
China RoHS entitled, Management Methods for Controlling Pollution for Electronic Information Products (“EIPs”)
Moreover, climate change and other ESG-related laws, regulations, treaties, and similar initiatives and programs are being adopted and implemented throughout the world, many of which we will be required to comply with. As described above, we are committed to maintaining compliance with ESG-related laws applicable to our operations, products, and services.
We do not believe that costs of compliance with these environmental laws and regulations will have a material adverse effect on our capital expenditures, operating results, or competitive position. In addition, we are responsible for cleanup of contamination at some of our current and former manufacturing facilities and at some third-party sites. We engage environmental consulting firms to assist us in the evaluation of environmental liabilities associated with our ongoing operations, historical disposal activities, and closed sites in order to establish appropriate accruals in our financial statements. We determine the amount of our accruals for environmental matters by analyzing and estimating the probability of occurrence and the reasonable possibility of incurring costs in light of information currently available.
Compliance with environmental laws and regulations, including those concerning climate change and other ESG-related matters, requires continuing management efforts by the Company. The imposition of more stringent standards or requirements under environmentalthese laws or regulations, the results of future testing and analysis undertaken by us at our operating facilities, or a determination that we are potentially responsible for the release of hazardous substances at other sites could result in expenditures in excess of amounts currently estimated to be required for such matters. Additionally, we could be required to alter our operations in order to comply with any new standards or requirements under environmental laws or regulations. There can be no assurance that additional environmental matters will not arise in the future or that costs will not be incurred with respect to sites as to which no issue is currently known.
We are also required to comply with an increasing number of product environmental compliance regulations focused upon the restriction of certain hazardous substances. The electronics industry is subject to various regulations based on region or country. For example:
Restrictions on Hazardous Substances ("RoHS") 2011/65/EU

Waste Electrical and Electronic Equipment ("WEEE") 2012/19/EU directives

The regulation EC 1907/2006 EU Directive REACH ("Registration, Evaluation, Authorization, and Restriction of Chemicals")

China RoHS entitled, Management Methods for Controlling Pollution for Electronic Information Products ("EIPs").
Similar legislation has been or may be enacted in other jurisdictions, including the United States. Our business requires close collaboration with our customers and suppliers to mitigate risks of non-compliance.non-compliance with these laws and regulations. We have developed rigorous compliance programs designed to meet the needs and specifications of our customers as well as theapplicable regulations. These programs vary from collecting compliance or material data from our Flex controlled or managed suppliers to full laboratory testing, and wetesting. We include compliance requirements in our standard supplier contracts. Non-compliance could result in significant costs and/or penalties.
RoHS and other similar legislation ban or restrict the use of lead, mercury and certain other specified substances in electronics products and WEEE requires EUEuropean Union ("EU") importers and/or producers to assume responsibility for the collection, recycling and management of waste electronic products and components. In the case of WEEE, although the compliance responsibility rests primarily with the EU importers and/or producers rather than with EMSelectronic manufacturing services ("EMS") companies, OEMsoriginal equipment manufacturers ("OEM") may turn to EMS companies for assistance in meeting their WEEE obligations. Flex continues to monitor developments related to product environmental

compliance and is working with our customers and other technical organizations to anticipate and minimize any impacts to our operations.
EMPLOYEES
Our policies, philosophy and strategies support the inclusion of all people in our working environment. We’re committed to respecting the human rights of our employees and improving their quality of life. We encourage our people to engage in lifelong learning and growth. And we give them opportunities to performRefer to the bestdiscussion in "Risk Factors" for further details of their abilities.
As of March 31, 2019, our global workforce totaled approximately 200,000 employeesthe legal and regulatory initiatives related to environmental matters including our contractor workforce. In certain international locations, our employees are represented by labor unions and by work councils. We have never experienced a significant work stoppage or strike, and we believeclimate change that our employee relations are good.
Our success depends to a large extent upon the continued services of key managerial and technical employees. The loss of such personnel could seriously harmadversely affect our business, results of operations and business prospects. To date, we have not experienced significant difficulties in attracting or retaining such personnel.financial condition.
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INTELLECTUAL PROPERTY
We own or license various United States and foreign patents relating to a variety of technologies. For certain of our proprietary processes, inventions, and works of authorship, we rely on trade secret or copyright protection. We also maintain trademark rights (including registrations) for our corporate name and several other trademarks and service marks that we use in our business in the United States and other countries throughout the world. We have implemented appropriate policies and procedures (including both technological means and training programs for our employees) to identify and protect our intellectual property, as well as that of our customers and suppliers. As of March 31, 20192022, and 2018,2021, the carrying value of our intellectual property was not material.
Although we believe that our intellectual property assets and licenses are sufficient for the operation of our business as we currently conduct it, from time to time third parties assert patent infringement claims against us or our customers. In addition, we provide design and engineering services to our customers and also design and make our own products. As a consequence of these activities, our customers are sometimes requiring us to take responsibility for intellectual property to a greater extent than in our manufacturing and assembly businesses. If and when third parties make assertions regarding the ownership or right to use intellectual property, we could be required to either enter into licensing arrangements or to resolve the issue through litigation. Such license rights might not be available to us on commercially acceptable terms, if at all, and any such litigation might not be resolved in our favor. Additionally, litigation could be lengthy and costly and could materially harm our financial condition regardless of the outcome. We also could be required to incur substantial costs to redesign a product or re-perform design services.
From time See "Risk Factors - The success of certain of our activities depends on our ability to time, we enter intoprotect our intellectual property licenses (e.g., patent licenses and software licenses) with third parties which obligate us to report covered behavior to the licensor and pay license fees to the licensor for certain activitiesrights; claims of infringement or products, or that enable our usemisuse of third-party technologies. We may also decline to enter into licenses for intellectual property that we do not think is useful for and/or used in our operations, or for whichbreach of license agreement provisions against our customers or suppliers have licenses or have assumed responsibility. Given the diverse and varied nature of our business and the location of our business around the world, certain activities we perform, such as providing assembly services in China and India, may fall outside the scope of those licenses or may not be subject to the applicable intellectual property rights. Our licensors may disagree and claim royalties are owed for such activities. In addition, the basis (e.g. base price) for any royalty amounts owed are audited by licensors and may be challenged. Some of these disagreements may lead to claims and litigation that might not be resolved in our favor. Additionally, litigationus could be lengthy and costly and could materially harm our financial condition regardless of the outcome.business."
FINANCIAL INFORMATION ABOUT SEGMENTS AND GEOGRAPHIC AREAS
Refer to note 19 to our consolidated financial statements included under Item 8 for financial information about our business segments and geographic areas.
ADDITIONAL INFORMATION
Our Internet address is https://www.flex.com. We make available through our Internet website the Company's annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or

furnished pursuant to Section 13(a) of the Securities Exchange Act of 1934 as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission.Commission (“SEC”).
We were incorporated in the Republic of Singapore in May 1990. Our principal corporate office is located at 2 Changi South Lane, Singapore 486123. Our U.S. corporate headquarters is located at 6201 America Center Drive, San Jose, CA 95002.
ITEM 1A.    RISK FACTORS
Summary of Risk Factors
These statements reflect management’s current beliefs, assumptions and expectations and are subject to a number of factors that may cause actual results to differ materially. Such factors include but are not limited to:
Weak global economic conditions, geopolitical uncertainty (including the ongoing conflict between Russia and Ukraine) and instability in financial markets may adversely affect our business, results of operations, financial condition, and access to capital markets.
We depend on industries that continually produce technologically advanced products with short product life cycleslifecycles and our business would be adversely affected if our customers' products are not successful or if our customers lose market share.
We derive our revenues from customers in the following business groups:
HRS, which is comprised of our health solutions business, including surgical equipment, drug delivery, diagnostics, telemedicine, disposable devices, imaging and monitoring, patient mobility and ophthalmology; and our automotive business, including vehicle electrification, connectivity, autonomous, and smart technologies;

IEI, which is comprised of energy including advanced metering infrastructure, energy storage, smart lighting, smart solar energy; and industrial, including semiconductor and capital equipment, office solutions, household industrial and lifestyle, industrial automation and kiosks;

CEC, which includes our telecom business of radio access base stations, remote radio heads and small cells for wireless infrastructure; our networking business, which includes optical, routing, and switching products for data and video networks; our server and storage platforms for both enterprise and cloud-based deployments; next generation storage and security appliance products; and rack-level solutions, converged infrastructure and software-defined product solutions; and

CTG, which includes our consumer-related businesses in IoT enabled devices, audio and consumer power electronics, mobile devices; and various supply chain solutions for consumer, computing and printing devices.
Factors affecting any of these industries in general or our customers in particular, could adversely impact us. These factors include:
rapid changes in technology, evolving industry standards, and requirements for continuous improvement in products and services that result in short product life cycles;

demand for our customers' products may be seasonal;

our customers may fail to successfully market their products, and our customers' products may fail to gain widespread commercial acceptance;

our customers' products may have supply chain issues;

our customers may experience dramatic market share shifts in demand which may cause them to lose market share or exit businesses; and

there may be recessionary periods in our customers' markets.
Our customers may cancel their orders, change production quantities or locations, or delay production, and our current and potential customers may decide to manufacture some or all of their products internally, which could harm our business.
Our industry is extremely competitive; if we are not able to continue to provide competitive products and services, we may lose business.
A significant percentage of our sales comes from a small number of customers and a decline in sales to any of these customers could adversely affect our business.
We have been and continue to be adversely affected by supply chain issues, including shortages of required electronic components, fluctuations in the pricing or availability of raw materials, and logistical constraints.
We conduct operations in a number of countries and are subject to the risks inherent in international operations.
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The COVID-19 pandemic has materially and adversely affected our business and results of operations. The duration and extent to which it will continue to adversely impact our business and results of operations remains uncertain and could be material.
Our components business is dependent on our ability to quickly launch world-class component products, and our investment in the development of our component capabilities, together with the start-up and integration costs necessary to achieve quick launches of world-class component products, may adversely affect our margins and profitability.
Our exposure to financially troubled customers or suppliers may adversely affect our financial results.
Our margins and profitability may be adversely affected due to substantial investments, start-up and production ramp costs in our design services.
The success of certain of our activities depends on our ability to protect our intellectual property rights; claims of infringement or misuse of intellectual property and/or breach of license agreement provisions against our customers or us could harm our business.
We are subject to risks relating to litigation and regulatory investigations and proceedings, which may have a material adverse effect on our business.
We are subject to risks associated with changes in laws, regulations or policies that may adversely impact our business, including environmental protection laws and regulations, including those related to climate change.
If we do not effectively manage changes in our operations, our business may be harmed; we have taken substantial restructuring charges in the past and we may need to take material restructuring charges in the future.
A breach of our IT or physical security systems, or violation of data privacy laws, may cause us to incur significant legal and financial exposure and disrupt our operations.
Our strategic relationships with major customers create risks.
We may not meet regulatory quality standards applicable to our manufacturing and quality processes for medical devices, which could have an adverse effect on our business, financial condition or results of operations.
We are subject to physical and operational risks from natural disasters, severe weather events, and climate change.
If our products or components contain defects, demand for our services may decline and we may be exposed to product liability and product warranty liability.
Business and Operational Risks
Our customers may cancel their orders, change production quantities or locations, or delay production, any of which could harm our business; the short-term nature of our customers’ commitments and rapid changes in demand may cause supply chain and other issues which could adversely affect our operating results.
Cancellations, reductions, or delays by a significant customer or by a group of customers have harmed, and may in the future harm, our results of operations by reducing the volumes of products we manufacture and deliver for those customers, by causing a delay in the repayment of our expenditures for inventory in preparation for customer orders and forand/or an impairment loss for inventory, and by lowering our asset utilization and overhead absorption resulting in lower gross margins and earnings. Additionally, current and prospective customers continuously evaluate our capabilities against other providers as well as against the merits of manufacturing products themselves. Our business would be adversely affected if customers decide to perform these functions internally or transfer their business to another provider. In addition, we face competition from the manufacturing operations of some of our current and potential customers, who are continually evaluating the merits of

manufacturing products internally against the advantages of outsourcing. In the past, some of our customers moved a portion of their manufacturing from us in order to more fully utilize their excess internal manufacturing capacity. Any of these developments could cause a decline in our sales, loss of market acceptance of our products or services, decreases of our profits or loss of our market share.
As a provider of design and manufacturing services and components for electronics, we must provide increasingly rapid product turnaround times for our customers. We generally do not obtain firm, long-term purchase commitments from our customers, and we often experience reduced lead times in customer orders which may be less than the lead time we require to procure necessary components and materials.
The short-term nature of our customers' commitments and the rapid changes in demand for their products reduces our ability to accurately estimate the future requirements of our customers. This makes it difficult to schedule production and maximize utilization of our manufacturing capacity. In that regard, we must make significant decisions, including determining the levels of business that we will seek and accept, setting production schedules, making component procurement commitments, and allocating personnel and other resources based on our estimates of our customers' requirements.
On occasion, customers require rapid increases in production or require that manufacturing of their products be transitioned from one facility to another to reduce costs or achieve other objectives. These demands may stress our resources, can cause supply chain management issues, and reduce our margins. We may not have sufficient capacity at any given time to meet
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our customers' demands, and transfers from one facility to another can result in inefficiencies and costs due to excess capacity in one facility and corresponding capacity constraints at another. Many of our costs and operating expenses are relatively fixed, and thus customer order fluctuations, deferrals, and transfers of demand from one facility to another, as described above, have had a material adverse effect on our operating results in the past and we may experience such effects in the future.
Our industry is extremely competitive; if we are not able to continue to provide competitive services, we may lose business.
We compete with a number of different companies, depending on the type of service we provide or the location of our operations. For example, we compete with major global EMS providers, other smaller EMS companies that have a regional or product-specific focus and ODMs with respect to some of the services that we provide. We also compete with our current and prospective customers, who evaluate our capabilities in light of their own capabilities and cost structures. Our industry is extremely competitive, many of our competitors have achieved substantial market share, and some may have lower cost structures or greater design, manufacturing, financial or other resources than we do. We face particular competition from Asian-based competitors, including Taiwanese ODM suppliers who compete in a variety of our end markets and have a substantial share of global information technology hardware production. If we are unable to provide comparable manufacturing services and improved products at lower cost than the other companies in our market, our net sales could decline.
A significant percentage of our sales come from a small number of customers and a decline in sales to any of these customers could adversely affect our business.
Sales to our ten largest customers represent a significant percentage of our net sales. Our ten largest customers accounted for approximately 43%34%, 41%36% and 43%39% of net sales in fiscal years 2019, 20182022, 2021 and 2017,2020, respectively. No customer accounted for more than 10% of net sales in fiscal year 2019, 20182022, 2021 and 2017.2020. Our principal customers have varied from year to year. These customers may experience dramatic declines in their market shares or competitive position, due to economic or other forces, that may cause them to reduce their purchases from us or, in some cases, result in the termination of their relationship with us. Significant reductions in sales to any of these customers, or the loss of major customers, would materially harm our business. If we are not able to timely replace expired, canceled or reduced contracts with new business in a timely manner, our revenues and profitability could be harmed. Additionally, mergers, acquisitions, consolidations or other significant transactions involving our key customers generally entail risks to our business. If a significant transaction involving any of our key customers results in the loss of or reduction in purchases by any of our largest customers, it could have a materiallymaterial adverse effect on our business, results of operations, financial condition and prospects.
Supply chain disruptions, manufacturing interruptions or delays, or the failure to accurately forecast customer demand, could affect our ability to meet customer demand, lead to higher costs, or result in excess or obsolete inventory. We have been and continue to be adversely affected by supply chain issues, including shortages of required electronic components.
From time to time, we have experienced shortages of some of the components, including electronic components, that we use. These shortages can result from strong demand for those components or from problems experienced by suppliers, such as shortages of raw materials. We have also experienced, and continue to experience, such shortages due to the effects of the COVID-19 pandemic. Most recently, we have experienced shortages of semiconductor components which has impacted our end markets. These unanticipated component shortages have and will continue to result in curtailed production or delays in production, which prevent us from making scheduled shipments to customers. Our failure or inability to accurately forecast demand and volatility in the availability of materials, equipment, components, and services, including rising prices due to inflation or scarcity of availability may adversely impact our business and results of operations.
Our inability to make scheduled shipments has caused and will continue to cause us to experience a reduction in sales, increase in inventory levels and costs, and could adversely affect relationships with existing and prospective customers. Component shortages may also increase our cost of goods sold because we may be required to pay higher prices for components in short supply and redesign or reconfigure products to accommodate substitute components. As a result, component shortages have adversely affected, and will continue to adversely affect, our operating results. Our customers also may experience component shortages which may adversely affect customer demand for our products and services. Our end markets have been and continue to be impacted by logistical constraints, with COVID-19 related restrictions contributing to a declining workforce, including at ports and warehouses, as well as driver shortages and increased freight and logistics costs around the world.
Our supply chain has been and will continue to be impacted by the COVID-19 pandemic, and may be impacted by other events outside our control, including macro-economic events, trade restrictions, political crises, social unrest, terrorism, and conflicts (including the Russian invasion of Ukraine), other public health emergencies, trade restrictions, or natural or environmental occurrences in locations where we or our customers and suppliers have manufacturing, research, engineering and other operations.
The ongoing COVID-19 pandemic has materially and adversely affected our business and results of operations. The duration and extent to which it will continue to adversely impact our business and results of operations remains uncertain and could be material.
The ongoing COVID-19 pandemic has resulted in a widespread public health crisis and numerous disease control measures being taken to limit its spread, including travel bans and restrictions, quarantines, shelter-in-place orders, and shutdowns. These measures have materially impacted and are continuing to impact our workforce and operations, the operations of our customers, and those of our respective vendors and suppliers. We have significant operations worldwide, including in China, Mexico, the United States, Brazil, India, Malaysia and Europe, and each of these geographies has been affected by the outbreak and has taken measures to try to contain it. This has resulted in disruptions at many of our manufacturing operations and facilities, and further disruptions could occur in the future. Most recently, with the lockdowns in China, we have been experiencing temporary plant closures and/or restrictions at certain of our manufacturing facilities in
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China. Any such disruptions could materially adversely affect our business. There have been renewed disease control measures (most recently, in China) being taken to limit the spread including movement bans and shelter-in-place orders. We continue to closely monitor the situation in all the locations where we operate. The impact of the pandemic on our business has included and could in the future include:
disruptions to or restrictions on our ability to ensure the continuous provision of our manufacturing services and solutions;
temporary closures or reductions in operational capacity of our manufacturing facilities;
temporary closures of our direct and indirect suppliers, resulting in adverse effects to our supply chain, and other supply chain disruptions, which adversely affect our ability to procure sufficient inventory to support customer orders;
temporary shortages of skilled employees available to staff manufacturing facilities due to shelter-in-place orders and travel restrictions within as well as into and out of countries;
restrictions or disruptions of transportation, such as reduced availability of air transport, port closures, and increased border controls or closures;
increases in operational expenses and other costs related to requirements implemented to mitigate the impact of the pandemic;
delays or limitations on the ability of our customers to perform or make timely payments;
reductions in short- and long-term demand for our manufacturing services and solutions, or other disruptions in technology buying patterns;
workforce disruptions due to illness, quarantines, governmental actions, other restrictions, and/or the social distancing measures we have taken to mitigate the impact of COVID-19 at our locations around the world in an effort to protect the health and well-being of our employees, customers, suppliers and of the communities in which we operate (including working from home, restricting the number of employees attending events or meetings in person, limiting the number of people in our buildings and factories at any one time, further restricting access to our facilities and suspending employee travel); and
our management team continuing to commit significant time, attention and resources to monitoring the COVID-19 pandemic and seeking to mitigate its effects on our business and workforce.
The global spread of COVID-19 also has created significant macroeconomic uncertainty, volatility and disruption, which may continue to adversely affect our and our customers’ and suppliers’ liquidity, cost of capital and ability to access the capital markets. As a result, the continued spread of COVID-19 could cause further disruptions in our supply chain and customer demand, and could adversely affect the ability of our customers to perform, including making timely payments to us, which could further adversely impact our business, financial condition, and results of operations. The COVID-19 pandemic has, in the short-term, adversely impacted, and may, in the long-term, adversely impact the global economy, potentially leading to an economic downturn. In addition, various local, state and national governments and agencies issued various safety regulations and guidelines intended to prevent the transmission of COVID-19 in the workplace. These regulations are complex, costly to implement, subject to frequent change, and to audit and investigation by governmental authorities, including in the U.S. the Occupational Health and Safety Administration (“OSHA”), state counterparts, and local health departments. Any failure by us to materially comply with COVID-19-related safety rules and regulations in any of its facilities could result in sanctions, fines, as well as negative publicity for us. Recently, two executive orders were issued mandating that U.S. employees of our manufacturing facilities be vaccinated against COVID-19 (or tested weekly). Although the implementation of these executive orders was stayed by the Supreme Court on January 13, 2022, and OSHA withdrew the rules on January 25, 2022, it is currently not possible to predict the development and impact of future COVID-19-related safety rules and regulations with certainty. Even after the COVID-19 pandemic has subsided, we may continue to experience adverse impacts to our business as a result of the pandemic’s global economic impact, including any recession, economic downturn, government spending cuts, tightening of credit markets or increased unemployment that has occurred or may occur in the future, which could cause our customers and potential customers to postpone or reduce spending on our manufacturing services and solutions.
The extent to which the COVID-19 pandemic will continue to impact our business and financial results going forward will be dependent on future developments such as the length and severity of the crisis, the potential resurgence of COVID-19 in the future including the emergence of more contagious or vaccine-resistant variants of the virus, the availability and distribution of effective treatments and vaccines, and public health measures and actions taken throughout the world to contain COVID-19, and the overall impact of the COVID-19 pandemic on the global economy and capital markets, among many other factors, all of which remain highly uncertain and unpredictable. We cannot at this time quantify or forecast the business impact of
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COVID-19, and there can be no assurance that the COVID-19 pandemic will not have a material and adverse effect on our business, financial results and financial condition. In addition, the COVID-19 pandemic increases the likelihood and potential severity of other risks described in this “Risk Factors” section.
Our components business is dependent on our ability to quickly launch world-class component products, and our investment in the development of our component capabilities, together with the start-up and integration costs, necessary to achieve quick launches of world-class component products, may adversely affect our margins and profitability.
Our components business, which includeincludes power supply manufacturing, is part of our strategy to improve our competitive position and to grow our future margins, profitability and shareholder returns by expanding our capabilities. The success of our components business is dependent on our ability to design and introduce world- classworld-class components that have performance characteristics which are suitable for a broad market and that offer significant price and/or performance advantages over competitive products.

To create these world class components offerings, we must continue to make substantial investments in the development of our components capabilities, in resources such as research and development, technology licensing, test and tooling equipment, facility expansions, and personnel requirements. We may not be able to achieve or maintain market acceptance for any of our components offerings in any of our current or target markets. The success of our components business will also depend upon the level of market acceptance of our customers' end products, which incorporate our components, and over which we have no control.
Our exposure to financially troubled customers or suppliers may adversely affect our financial results.
We provide manufacturing services to companies and industries that have in the past, and may in the future, experience financial difficulty. If some of our customers experience financial difficulty, we could have difficulty recovering amounts owed to us from these customers, or demand for our products from these customers could decline. Additionally, if our suppliers experience financial difficulty we could have difficulty sourcing supplies necessary to fulfill production requirements and meet scheduled shipments. If one or more of our customers were to become insolvent or otherwise were unable to pay for the services provided by us on a timely basis, or at all, our operating results and financial condition could be adversely affected. Such adverse effects could include one or more of the following: an increase in our provision for doubtful accounts, a charge for inventory write-offs, a reduction in revenue, and an increase in our working capital requirements due to higher inventory levels and increases in days our accounts receivables are outstanding.
On April 21, 2016, SunEdison, Inc. and certain of its subsidiaries (“SunEdison”) filed for protection under Chapter 11 of the U.S. Bankruptcy Code. For the fiscal year ended March 31, 2016, we recognized a bad debt reserve charge of $61.0 million associated with our outstanding SunEdison receivables and accepted return of previously shipped inventory of approximately $90 million. During the second quarter of fiscal year 2017, prices for solar panel modules declined significantly. We determined that certain solar panel inventory previously designated for SunEdison on hand at the end of the second quarter of fiscal year 2017 was not fully recoverable and recorded a charge of $60.0 million to reduce the carrying costs to market during fiscal year 2017. In addition, we recognized a $16.0 million impairment charge for solar module equipment and incurred $16.9 million of incremental costs primarily related to negative margin sales and other associated solar panel direct costs. The estimates underlying our recorded provisions, as well as consideration of other potential customer bankruptcy-related contingencies associated with the SunEdison bankruptcy proceedings, are based on the facts currently known to us; no preference claims have been asserted against the Company. SunEdison stated in schedules filed with the Bankruptcy Court that, within the 90 days preceding SunEdison's bankruptcy filing, the Company received approximately $98.6 million of inventory and cash transfers of $69.2 million, which in aggregate represents the Company's estimate of the maximum reasonably possible contingent loss. On April 15, 2018, a subsidiary of the Company together with its subsidiaries and affiliates, entered into a tolling agreement with the trustee of the SunEdison Litigation Trust to toll any applicable statute of limitations or other time-related defense that might exist in regards to any potential claims that either party might be able to assert against the other for a period that will end at the earlier to occur of: (a) 60 days after a party provides written notice of termination; (b) six years from the effective date of April 15, 2018; or (c) such other date as the parties may agree in writing. We believe that we continue to have a number of affirmative and direct defenses to any potential claims for recovery and intend to vigorously defend any such claim, if asserted. An unfavorable resolution of this matter could be material to our results of operations, financial condition, or cash flows.
We may be adversely affected by supply chain issues, including shortages of required electronic components.
From time to time, we have experienced shortages of some of the electronic components that we use. These shortages can result from strong demand for those components or from problems experienced by suppliers, such as shortages of raw materials. These unanticipated component shortages could result in curtailed production or delays in production, which may prevent us from making scheduled shipments to customers. Our inability to make scheduled shipments could cause us to experience a reduction in sales, increase in inventory levels and costs, and could adversely affect relationships with existing and prospective customers. Component shortages may also increase our cost of goods sold because we may be required to pay higher prices for components in short supply and redesign or reconfigure products to accommodate substitute components. As a result, component shortages could adversely affect our operating results. Our performance depends, in part, on our ability to incorporate changes in component costs into the selling prices for our products.
Our supply chain may also be impacted by other events outside our control, including macro-economic events, trade restrictions, political crises, or natural or environmental occurrences.
Our margins and profitability may be adversely affected due to substantial investments, start-up and production ramp costs in our design services.
As part of our strategy to enhance our end-to-end service offerings, we continue to expand our design and engineering capabilities. Providing these services can expose us to different or greater potential risks than those we face when providing our manufacturing services.

Although we enter into contracts with our design services customers, we may design and develop products for these customers prior to receiving a purchase order or other firm commitment from them. We are required to make substantial investments in the resources necessary to design and develop these products, and no revenue may be generated from these efforts if our customers do not approve the designs in a timely manner or at all. In addition, we may make investments in designing products and not be able to design viable manufacturable products, in which cases we may not be able to recover our investments. Even if we are successful in designing manufacturable products and our customers accept our designs, if our customers do not then purchase anticipated levels of products, we may not realize any profits. Our design activities often require that we purchase inventory for initial production runs before we have a purchase commitment from a customer. Even after we have a contract with a customer with respect to a product, these contracts may allow the customer to delay or cancel deliveries and may not obligate the customer to any particular volume of purchases. These contracts can generally be terminated on short notice. In addition, some of the products we design and develop must satisfy safety and regulatory standards and some must receive government certifications. If we fail to obtain these approvals or certifications on a timely basis, we would be unable to sell these products, which would harm our sales, profitability and reputation.
Our design services offerings require significant investments in research and development, technology licensing, test and tooling equipment, patent applications, facility building and expansion, and recruitment. We may not be able to achieve a high enough level of sales for this business to be profitable. The initial costs of investing in the resources necessary to expand our design and engineering capabilities, and in particular to support our design services offerings, have historically adversely affected our profitability, and may continue to do so as we continue to make investments to grow these capabilities.
In addition, we often agree to certain product price limitations and cost reduction targets in connection with these services. Inflationary and other increases in the costs of the raw materials and labor required to produce the products have occurred and may recur from time to time. Also, the production ramps for these programs are typically significant and negatively impact our margin in early stages as the manufacturing volumes are lower and result in inefficiencies and unabsorbed manufacturing overhead costs. We may not be able to reduce costs, incorporate changes in costs into the selling prices of our products, or increase operating efficiencies as we ramp production of our products, which would adversely affect our margins and our results of operations.
We conduct operations in a number of countries and are subject to the risks inherent in international operations.
The geographic distances between the Americas, Asia and Europe create a number of logistical and communications challenges for us. These challenges include managing operations across multiple time zones, directing the manufacture and delivery of products across distances, coordinating procurement of components and raw materials and their delivery to multiple locations, and coordinating the activities and decisions of the core management team, which is based in a number of different countries.
Facilities in several different locations may be involved at different stages of the production process of a single product, leading to additional logistical difficulties.
Because our manufacturing operations are located in a number of countries throughout the Americas, Asia and Europe, we are subject to risks of changes in economic and political conditions in those countries, including:
fluctuations in the value of local currencies;

labor unrest, difficulties in staffing and geographic labor shortages;

longer payment cycles;

cultural differences;

increases in duties, tariffs, and taxation levied on our products including anti-dumping and countervailing duties;

trade restrictions including limitations on imports or exports of components or assembled products, unilaterally or bilaterally;

trade sanctions and related regulatory enforcement actions and other proceedings;

potential trade wars;


increased scrutiny by the media and other third parties of labor practices within our industry (including but not limited to working conditions) which may result in allegations of violations, more stringent and burdensome labor laws and regulations and inconsistency in the enforcement and interpretation of such laws and regulations, higher labor costs, and/or loss of revenues if our customers become dissatisfied with our labor practices and diminish or terminate their relationship with us;

imposition of restrictions on currency conversion or the transfer of funds;

expropriation of private enterprises;

ineffective legal protection of our intellectual property rights in certain countries;

natural disasters;

exposure to infectious disease and epidemics;

inability of international customers and suppliers to obtain financing resulting from tightening of credit in international financial markets;

political unrest; and

a potential reversal of current favorable policies encouraging foreign investment or foreign trade by our host countries.
The attractiveness of our services to customers and our ability to conduct business with certain customers can be affected by changes in U.S. and other countries' trade policies. In 2018, the U.S. imposed tariffs on a large variety of products of Chinese origin. The U.S. government has also indicated a readiness to further expand the scope of the tariffs on Chinese goods if negotiations are not successful, and most recently, effective May 10, 2019, increased tariffs on $200 billion of Chinese goods to 25%. Further, on May 15, 2019, President Trump issued an executive order designed to secure the information and communications technology and services supply chain, which would restrict the acquisition or use in the United States of information and communications technology or services designed, developed, manufactured, or supplied by persons owned by, controlled by, or subject to the jurisdiction or direction of foreign adversaries. The executive order is subject to implementation by the Secretary of Commerce and applies to contracts entered into prior to the effective date of the order. In addition, the U.S. Commerce Department has implemented additional restrictions and may implement further restrictions that would affect conducting business with certain Chinese companies. Depending upon their duration and implementation, as well as our ability to mitigate their impact, these tariffs, the executive order and its implementation and other regulatory actions could materially affect our business, including in the form of increased cost of goods sold, decreased margins, increased pricing for customers, and reduced sales.
In addition, some countries in which we operate, such as Brazil, Hungary, India, Mexico, Malaysia and Poland, have experienced periods of slow or negative growth, high inflation, significant currency devaluations or limited availability of foreign exchange. Furthermore, in countries such as China, Brazil, India and Mexico, governmental authorities exercise significant influence over many aspects of the economy, and their actions could have a significant effect on us. We could be seriously harmed by inadequate infrastructure, including lack of adequate power and water supplies, transportation, raw materials and parts in countries in which we operate. In addition, we may encounter labor disruptions and rising labor costs, in particular within the lower-cost regions in which we operate. Any increase in labor costs that we are unable to recover in our pricing to our customers could adversely impact our operating results.
Operations in foreign countries also present risks associated with currency exchange and convertibility, inflation and repatriation of earnings. In some countries, economic and monetary conditions and other factors could affect our ability to convert our cash distributions to U.S. dollars or other freely convertible currencies, or to move funds from our accounts in these countries. Furthermore, the central bank of any of these countries may have the authority to suspend, restrict or otherwise impose conditions on foreign exchange transactions or to approve distributions to foreign investors.
The success of certain of our activities depends on our ability to protect our intellectual property rights; claims of infringement or misuse of intellectual property and/or breach of license agreement provisions against our customers or us could harm our business.

We retain certain intellectual property rights to some of the technologies that we develop as part of our engineering, design and manufacturing services and components offerings. The measures we have taken to prevent unauthorized use of our technology may not be successful. If we are unable to protect our intellectual property rights, this could reduce or eliminate the competitive advantages of our proprietary technology, which would harm our business.
Our engineering, design and manufacturing services and components offerings involve the creation and use of intellectual property rights, which subject us to the risk of claims of infringement or misuse of intellectual property from third parties and/or breach of our agreements with third parties, as well as claims arising from the allocation of intellectual property risk among us and our customers. From time to time, we enter into intellectual property licenses (e.g., patent licenses and software licenses) with third parties which obligate us to report covered behavior to the licensor and pay license fees to the licensor for certain activities or products, or that enable our use of third party technologies. We may also decline to enter into licenses for intellectual property that we do not think is useful for or used in our operations, or for which our customers or suppliers have licenses or have assumed responsibility. Given the diverse and varied nature of our business and the location of our business around the world, certain activities we perform, such as providing assembly services in China and India, may fall outside the scope of those licenses or may not be subject to the applicable intellectual property rights. Our licensors may disagree and claim royalties are owed for such activities. In addition, the basis (e.g. base price) for any royalty amounts owed are audited by licensors and may be challenged. Our customers are increasingly requiring us to indemnify them against the risk of intellectual property-related claims and licensors are claiming that activities we perform are covered by licenses to which we are a party. In March 2018, we received an inquiry from a licensor referencing a patent license agreement, and requesting information relating royalties for products that we assemble for a customer in China. If any of these inquiries result in a claim, the Company intends to contest any such claim vigorously. If a claim is asserted and we are unsuccessful in its defense, a material loss is reasonably possible. We cannot predict or estimate an amount or reasonable range of outcomes with respect to the matter.
If any claims of infringement or misuse of intellectual property from third parties and/or breach of our agreements with third parties, as well as claims arising from the allocation of intellectual property risk among us and our customers, are brought against us or our customers, whether or not these have merit, we could be required to expend significant resources in defense of such claims. In the event of such a claim, we may be required to spend a significant amount of money to develop alternatives or obtain licenses or to resolve the issue through litigation. We may not be successful in developing such alternatives or obtaining such licenses on reasonable terms or at all, and any such litigation might not be resolved in our favor, in which cases we may be required to curtail certain of our services and offerings. Additionally, litigation could be lengthy and costly, and could materially harm our financial condition regardless of outcome.
We are subject to risks relating to litigation and regulatory investigations and proceedings, which may have a material adverse effect on our business.
From time to time, we are involved in various claims, suits, investigations and legal proceedings. Additional legal claims or regulatory matters may arise in the future and could involve matters relating to commercial disputes, government regulatory and compliance, intellectual property, antitrust, tax, employment or shareholder issues, product liability claims and other issues on a global basis. If we receive an adverse judgment in any such matter, we could be required to pay substantial damages and cease certain practices or activities. Regardless of the merits of the claims, litigation and other proceedings may be both time- consuming and disruptive to our business. The defense and ultimate outcome of any lawsuits or other legal proceedings may result in higher operating expenses and a decrease in operating margin, which could have a material adverse effect on our business, financial condition, or results of operations.
On May 8, 2018, a putative class action was filed in the Northern District of California against the Company and certain officers alleging violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5, promulgated thereunder, alleging misstatements and/or omissions in certain of the Company’s financial results, press releases and SEC filings made during the putative class period of January 26, 2017 through April 26, 2018. On October 1, 2018, the Court appointed lead plaintiff and lead plaintiff’s counsel in the case. On November 28, 2018, lead plaintiff filed an amended complaint alleging misstatements and/or omissions in certain of the Company’s SEC filings, press releases, earnings calls, and analyst and investor conferences and expanding the putative class period through October 25, 2018. On April 3, 2019, the Court vacated its prior order appointing lead plaintiff and lead plaintiff’s counsel and reopened the lead plaintiff appointment process. Motions for appointment as lead plaintiff are due June 4, 2019. Defendants’ deadline to move to dismiss is vacated until after the lead plaintiff appointment process is complete and an operative complaint is designated. In addition, the Court has set a case management conference for July 17, 2019. Any existing or future lawsuits could be time-consuming, result in significant expense and divert the attention and resources of our management and other key employees, as well as harm our reputation, business, financial condition or results of operations.
On February 14, 2019, we submitted an initial notification of voluntary disclosure to the U.S. Department of the Treasury, Office of Foreign Assets Control ("OFAC") regarding possible noncompliance with U.S. economic sanctions requirements among certain non-U.S. Flex-affiliated operations.  We have initiated an internal investigation regarding this matter.  The matter

is at a very preliminary stage and we cannot predict the total costs to be incurred in response to any steps taken by OFAC, the potential impact on our personnel or to what extent we could be subject to penalties, which could be material. Nor can we predict how long it will take to complete our investigation and for a disposition by OFAC.
If we do not effectively manage changes in our operations, our business may be harmed; we have taken substantial restructuring charges in the past and we may need to take material restructuring charges in the future.
The expansion of our business, as well as business contractions and other changes in our customers' requirements, including as a result of COVID-19, have in the past, and may in the future, require that we adjust our business and cost structures by incurring restructuring charges. Restructuring activities involve reductions in our workforce at some locations and
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closure of certain facilities. All of these changes have in the past placed, and may in the future place, considerable strain on our financial and management control systems and resources, including decision support, accounting management, information systems and facilities. If we do not properly manage our financial and management controls, reporting systems and procedures to manage our employees, our business could be harmed.
In recent years, including fiscal years 2019, 20182022, 2021, and 2017,2020, we initiated targeted restructuring activities focused on optimizing our portfolio, in particular customers and products in our CTGconsumer devices business, optimizing our cost structure in lower growth areas and, more importantly, streamlining certain corporate and segment functions as well as exited our NIKE operations in Mexico.functions. Restructuring charges are recorded based upon employee termination dates, site closure and consolidation plans generally in conjunction with an overall corporate initiative to drive cost reduction and realign the Company's global footprint.
We may be required to take additional charges in the future to align our operations and cost structures with global economic conditions, market demands, cost competitiveness, and our geographic footprint as it relates to our customers' production requirements.requirements and in response to the economic challenges in light of recent events with COVID-19. We may consolidate certain manufacturing facilities or transfer certain of our operations to lower cost geographies. If we are required to take additional restructuring charges in the future, our operating results, financial condition, and cash flows could be adversely impacted. Additionally, there are other potential risks associated with our restructurings that could adversely affect us, such as delays encountered with the finalization and implementation of the restructuring activities, work stoppages, and the failure to achieve targeted cost savings.
A breach of our IT or physical security systems, or violation of data privacy laws, may cause us to incur significant legal and financial exposure.
We relyare increasingly reliant on our information systems to process, transmit and store electronic information (including sensitive data such as confidential business information and personally identifiable datainformation relating to employees, customers, and other business partners), and to manage or support a variety of critical business processes and activities. In particular, the COVID-19 pandemic has caused us to modify our business practices, including requiring or permitting many of our office-based employees to work from home. As a result, we are increasingly dependent upon our information systems to operate our business and our ability to effectively manage our business depends on the security, reliability and adequacy of our information systems.
We regularly face attempts by otherssophisticated actors to gain unauthorized access through the Internet or to introduce malicious software to our information systems.systems, including those using techniques that change frequently or may be disguised or difficult to remain dormant until a triggering event or that may continue undetected for an extended period of time. We are also a target of malicious attackers who attempt to gain access to our network or data centers or those of our customers or end users;users, steal proprietary information related to our business, products, employees, and customers; or interrupt our systems and services or those of our customers or others. We believe such attempts are increasing in number and in technical sophistication. There has been a rise in ransomware and other “cyber attacks”, along with power outages or hardware failures, which, if we are subject to, could have material adverse effects. Due to the political uncertainty and military actions involving Russia, Ukraine and surrounding regions, we and the third parties upon which we rely may be vulnerable to a currently heightened risk of information technology breaches, computer malware or other cyber attacks, including attacks that could materially disrupt our systems and operations, supply chain and ability to produce, sell and distribute our products.
In some instances, we, our customers, and the users of our products and services might be unaware of an incident or its magnitude and effects. We have implemented security systems with the intent of maintaining and protecting the physical security of our facilities and inventory and protecting our customers’ and our suppliers’ confidential information. In addition, while we seek to detect and investigate all unauthorized attempts and attacks against our network, products, and services, and to prevent their recurrence where practicable through changes to our internal processes and tools, we are subject to, and at times have suffered from, breach or attempted breach of these security systems which have in the past and may in the future result in unauthorized access to our facilities and/or unauthorized acquisition, use or theft of the inventory or information we are trying to protect. If unauthorized parties gain physical access to our inventory or if they gain electronic access to our information systems or if such information or inventory is used in an unauthorized manner, misdirected, or lost or stolen during transmission or transport, any theft or misuse of such information or inventory could result in, among other things, unfavorable publicity, governmental inquiry and oversight, difficulty in marketing our services, allegations by our customers that we have not performed our contractual obligations, litigation by affected parties including our customers and possible financial obligations for damages related to the theft or misuse of such information or inventory, any of which could have a material adverse effect on our profitability and cash flow. These risks are likely to be elevated in times of geopolitical instability and escalated tensions between countries.
In addition, new data privacy laws and regulations, including the new European Union General Data Protection Regulation (“GDPR”) effective May 2018,, the UK GDPR, ePrivacy Directive, Singapore’s Personal Data Protection Act, and other privacy and data security
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laws throughout the Asia Pacific region and across the globe pose increasingly complex compliance challenges, which may increase compliance costs, and any failure to comply with data privacy laws and regulations could result in significant penalties. Additionally, many U.S. states including California, Virginia, Colorado and Utah recently enacted legislation, theand associated regulations and it is anticipated that many more states will enact similar legislation and/or release additional regulations. The California Consumer Privacy Act (“CCPA”), which will becomebecame effective January 1, 2020 and was further amended by the California Privacy Rights Act, or CPRA, on November 3, 2020. The CCPA will,and CPRA, among other requirements, require covered companies to provide new rights and disclosures to California consumers, and allow such consumers new abilities to opt-out of certain sales of personal information. information and other activities and will create a new regulatory enforcement body. These potential new regulations and avenues for enforcement could result in among other things, government inquiries, which could result in significant penalties, Additionally, new privacy laws and regulations are under development at the U.S. Federal and state level and many international jurisdictions.
The effects of the CCPAGDPR, the CPRA and other state laws and other data privacy laws and regulations, including the many international privacy laws, may be significant, and may require us to modify our data processing practices and policies and to incur substantial costs and expenses in an effort to comply.

Any actual or perceived failures to comply with these laws or regulations, or related contractual or other obligations, or any perceived privacy rights violation, could lead to investigations, claims, and proceedings by governmental entities and private parties, damages for contract breach, and other significant costs, penalties, and other liabilities, as well as harm to our reputation and market position. The GDPR, U.S. state laws and other laws and self-regulatory codes may affect our ability to reach current and prospective customers, to understand how our solutions and services are being used, to respond to customer requests allowed under the laws, and to implement our business strategy effectively. These laws and regulations could similarly affect our customers.
Our strategic relationships with major customers create risks.
In the past, we have completed numerous strategic transactions with customers. Under these arrangements, we generally acquire inventory, equipment and other assets from the customers, and lease or acquire their manufacturing facilities, while simultaneously entering into multi-year manufacturing and supply agreements for the production of their products. We may pursue these customer divestiture transactions in the future. These arrangements entered into with divesting customers typically involve many risks, including the following:
we may need to pay a purchase price to the divesting customers that exceeds the value we ultimately may realize from the future business of the customer;

the integration of the acquired assets and facilities into our business may be time-consuming and costly, including the incurrence of restructuring charges;

we, rather than the divesting customer, bear the risk of excess capacity at the facility;

we may not achieve anticipated cost reductions and efficiencies at the facility;

we may be unable to meet the expectations of the customer as to volume, product quality, timeliness and cost reductions;

our supply agreements with the customers generally do not require any minimum volumes of purchase by the customers, and the actual volume of purchases may be less than anticipated; and

if demand for the customers' products declines, the customer 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 customers.
As a result of these and other risks, we have been, and in the future may be, unable to achieve anticipated levels of profitability under these arrangements. In addition, these strategic arrangements have not, and in the future may not, result in any material revenues or contribute positively to our earnings per share.
If our compliance policies are breached, we may incur significant legal and financial exposure.
We have implemented local and global compliance policies to ensure compliance with our legal obligations across our operations. A significant legal risk resulting from our international operations is compliance with the U.S. Foreign Corrupt Practices Act or similar local laws of the countries in which we do business, including the UK Anti-Bribery Act, which prohibits covered companies from making payments to foreign government officials to assist in obtaining or retaining business. Our Code of Business Conduct prohibits corrupt payments on a global basis and precludes us from offering or giving anything of value to a government official for the purpose of obtaining or retaining business, to win a business advantage or to improperly influence a decision regarding Flex. Nevertheless, there can be no assurance that all of our employees and agents will refrain from taking actions in violation of this and our related anti-corruption policies and procedures. Any such violation could have a material adverse effect on our business.
We are subject to the risk of increased income taxes.
We are subject to taxes in numerous jurisdictions. Our future effective tax rates could be affected by changes in the mix of earnings in countries with differing statutory rates and changes in tax laws or their interpretation including changes related to tax holidays or tax incentives. The international tax environment continues to change as a result of both coordinated efforts by governments and unilateral measures designed by individual countries, both intended to tackle concerns over perceived international tax avoidance techniques, which could ultimately have an adverse effect on the taxation of international businesses. In addition, legislative changes may result from the Organization for Economic Co-operation and Development’s Base Erosion and Profit Shifting Project. Any such changes, if adopted, could adversely impact our effective tax rate.
Our taxes could also increase if certain tax holidays or incentives are not renewed upon expiration, or if tax rates applicable to us in such jurisdictions are otherwise increased. Our continued ability to qualify for specific tax holiday extensions will depend on, among other things, our anticipated investment and expansion in these countries and the manner in which the local governments interpret the requirements for modifications, extensions or new incentives.
In addition, the Company and its subsidiaries are regularly subject to tax return audits and examinations by various taxing jurisdictions around the world. In determining the adequacy of our provision for income taxes, we regularly assess the likelihood of adverse outcomes resulting from tax examinations. While it is often difficult to predict the final outcome or the

timing of the resolution of a tax examination, we believe that our reserves for uncertain tax benefits reflect the outcome of tax positions that are more likely than not to occur. However, we cannot assure you that the final determination of any tax examinations will not be materially different than that which is reflected in our income tax provisions and accruals. Should additional taxes be assessed as a result of a current or future examination, there could be a material adverse effect on our tax provision, operating results, financial position and cash flows in the period or periods for which that determination is made.
Changes in financial accounting standards or policies have affected, and in the future may affect, our reported financial condition or results of operations.
We prepare our financial statements in conformity with U.S. GAAP. These principles are subject to interpretation by the Financial Accounting Standards Board (FASB), the American Institute of Certified Public Accountants (AICPA), the SEC and various bodies formed to interpret and create accounting policies. For example, significant changes to revenue recognition rules have been enacted and applied to us in fiscal year 2019 per Accounting Standard Update ("ASU") 2014-09 "Revenue from Contracts with Customers (Topic 606)". Changes to accounting rules or challenges to our interpretation or application of the rules by regulators may have a material adverse effect on our reported financial results or on the way we conduct business. Refer to "Recently Adopted Accounting Pronouncements" within note 2 of Item 8, Financial Statements and Supplementary Data.
We may encounter difficulties with acquisitions and divestitures, which could harm our business.
We have completed numerous acquisitions of businesses, including the recent acquisition of Anord Mardix, and we may acquire additional businesses in the future. Any future acquisitions may require additional equity financing, which could be dilutive to our existing shareholders, or additional debt financing, which could increase our leverage and potentially affect our credit ratings. Any downgrades in our credit ratings associated with an acquisition could adversely affect our ability to borrow by resulting in more restrictive borrowing terms. As a result of the foregoing, we also may not be able to complete acquisitions or strategic customer transactions in the future to the same extent as in the past, or at all.
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To integrate acquired businesses, we must implement our management information systems, operating systems and internal controls, and assimilate and manage the personnel of the acquired operations. The difficulties of this integration may be further complicated by geographic distances. The integration of acquired businesses may not be successful and could result in disruption to other parts of our business. In addition, the integration of acquired businesses may require that we incur significant restructuring charges.
In addition, acquisitions involve numerous risks and challenges, including:
diversion of management's attention from the normal operation of our business;

potential loss of key employees and customers of the acquired companies;

difficulties managing and integrating operations in geographically dispersed locations;

the potential for deficiencies in internal controls at acquired companies;

increases in our expenses and working capital requirements, which reduce our return on invested capital;

lack of experience operating in the geographic market or industry sector of the acquired business;

cybersecurity and compliance related issues;

initial dependence on unfamiliar supply chain or relatively small supply chain partners; and

exposure to unanticipated liabilities of acquired companies.
In addition, divestitures involve significant risks, including without limitation, difficulty finding financially sufficient buyers or selling on acceptable terms in a timely manner, and the agreed-upon terms could be renegotiated due to changes in business or market conditions. Divestitures could adversely affect our profitability and, under certain circumstances, require us to record impairment charges or a loss as a result of the transaction. In addition, completing divestitures requires expenses and management attention and could leave us with certain continuing liabilities.
These and other factors have harmed, and in the future could harm, our ability to achieve anticipated levels of profitability at acquired operations or realize other anticipated benefits of an acquisition or divestiture, and could adversely affect our business and operating results.

We are pursuing alternatives for our Nextracker business, including a full or partial separation of the business, through an initial public offering of Nextracker or otherwise, which may not be consummated as or when planned or at all, and may not achieve the intended benefits.
We are pursuing alternatives for our Nextracker business, including a full or partial separation of the business, through an initial public offering of Nextracker or otherwise. The proposed separation of our Nextracker business may not meet regulatory quality standards applicablebe consummated as currently contemplated or at all, or may encounter unanticipated delays. If we are unable to consummate a transaction on favorable terms or at all, we may experience negative reactions from the financial markets and from our shareholders and employees. Planning a separation requires significant time, effort, and expense, may divert the attention of our management and employees from other aspects of our business operations and could adversely affect the business, financial condition, results of operations and cash flows of us and our Nextracker business. In addition, if we complete the proposed separation, there can be no assurance that we will be able to realize the intended benefits. Following a potential separation, the combined value of the two publicly-traded companies may not be equal to or greater than what the value of our ordinary shares would have been had the potential separation not occurred.
Our operating results may fluctuate significantly due to seasonal demand.
Two of our significant end markets are the lifestyle market and the consumer devices market. These markets exhibit particular strength generally in the two quarters leading up to the end of the calendar year in connection with the holiday season. As a result, we have historically experienced stronger revenues in our second and third fiscal quarters as compared to our other fiscal quarters. Economic or other factors leading to diminished orders in the end of the calendar year could harm our business.
We depend on our executive officers and skilled personnel.
Our success depends to a large extent upon the continued services of our executive officers and other key employees. Generally, our employees are not bound by employment or non-competition agreements, and we cannot assure you that we will retain our executive officers and other key employees. We could be seriously harmed by the loss of any of our executive officers or other key employees. In addition, in connection with expanding our design services offerings, we must attract and
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retain experienced design engineers. There is substantial competition in our industry for highly skilled employees. Additionally, hiring, training and retaining skilled employees may be adversely impacted by global economic uncertainty and office closures caused by COVID-19. Our failure to recruit and retain experienced design engineers, or if they are unable to work effectively or at all due to the COVID-19 pandemic, could limit the growth of our design services offerings, which could adversely affect our business. There also is the risk that we will be unable to achieve our diversity, equity and inclusion objectives and goals or meet the related requirements of our shareholders and other stakeholders.
Catastrophic events could have a material adverse effect on our operations and financial results.
Our operations or systems could be disrupted by natural disasters, terrorist activity, public health issues (including the COVID-19 pandemic), cybersecurity incidents, interruptions of service from utilities, political crises and conflicts (including the Russian invasion of Ukraine), transportation or telecommunications providers, or other catastrophic events. Such events could make it difficult or impossible to manufacture or deliver products to our customers, receive production materials from our suppliers, or perform critical functions, which could adversely affect our revenue and require significant recovery time and expenditures to resume operations. While we maintain business recovery plans that are intended to allow us to recover from natural disasters or other events that can be disruptive to our business, some of our systems are not fully redundant and we cannot be sure that our plans will fully protect us from all such disruptions.
We maintain a program of insurance coverage for a variety of property, casualty, and other risks. We place our insurance coverage with multiple carriers in numerous jurisdictions. However, one or more of our insurance providers may be unable or unwilling to pay a claim. The types and amounts of insurance we obtain vary depending on availability, cost, and decisions with respect to risk retention. The policies have deductibles and exclusions that result in us retaining a level of self-insurance. Losses not covered by insurance may be large, which could harm our results of operations and financial condition.
Our business could be adversely affected by any delays, or increased costs, resulting from issues that our common carriers are dealing with in transporting our materials, our products, or both.
Given the complexity of our supply chain and our geographically dispersed operations, we depend on a variety of common carriers to transport our materials from our suppliers to us, and to transport our products from us to our customers. Problems suffered by any of these common carriers, whether due to geopolitical issues, the COVID-19 pandemic, a natural disaster, labor problems, increased energy prices, criminal activity or some other issue, could result in shipping delays, increased costs, or other supply chain disruptions, and could therefore have a material adverse effect on our operations.
Industry Risks
We depend on industries that continually produce technologically advanced products with short product lifecycles and our business would be adversely affected if our customers' products are not successful or if our customers lose market share.
We derive our revenue from customers in a number of end markets and factors affecting any of these industries in general or our customers in particular, could adversely impact us. These factors include:
rapid changes in technology, evolving industry standards, and requirements for continuous improvement in products and services that result in short product lifecycles;
demand for our customers' products may be seasonal;
our customers may fail to successfully market their products, and our customers' products may fail to gain widespread commercial acceptance;
our customers' products may have supply chain issues, including as a result of the COVID-19 pandemic;
our customers may experience dramatic market share shifts in demand which may cause them to lose market share or exit businesses; and
a negative impact of the COVID-19 pandemic on our customers or on the demand for our customers’ products.
Our industry is extremely competitive; if we are not able to continue to provide competitive services, we may lose business.
We compete with a number of different companies, depending on the type of service we provide or the location of our operations. For example, we compete with major global EMS providers, other smaller EMS companies that have a regional or product-specific focus and Original Design Manufacturers ("ODMs") with respect to some of the services that we provide. We also compete with our current and prospective customers, who evaluate our capabilities in light of their own capabilities and cost structures. In the past, some of our customers moved a portion of their manufacturing from us in order to more fully utilize their excess internal manufacturing capacity. Any of these developments could cause a decline in our sales, loss of market
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acceptance of our products or services, decreases of our profits or loss of our market share. Our industry is extremely competitive, many of our competitors have achieved substantial market share, and quality processessome may have lower cost structures or greater design, manufacturing, financial or other resources than we do. We face particular competition from Asian-based competitors, including Taiwanese ODM suppliers who compete in a variety of our end markets and have a substantial share of global information technology hardware production. If we are unable to provide comparable manufacturing services and improved products at lower cost than the other companies in our market, our net sales could decline.
Financial Risks
Our goodwill and identifiable intangible assets could become impaired, which could reduce the value of our assets and reduce our net income in the year in which the write-off occurs.
Goodwill represents the excess of the cost of an acquisition over the fair value of the net assets acquired. We also ascribe value to certain identifiable intangible assets, which consist primarily of customer relationships, developed technology and trade names, among others, as a result of acquisitions. We may incur impairment charges on goodwill or identifiable intangible assets if we determine that the fair values of goodwill or identifiable intangible assets are less than their current carrying values. We evaluate, on a regular basis, whether events or circumstances have occurred that indicate all, or a portion, of the carrying amount of goodwill may no longer be recoverable, in which case an impairment charge to earnings would become necessary.
If the financial performance of our businesses were to decline significantly as a result of the COVID-19 pandemic, we could incur a material non-cash charge to our income statement for medical devices,the impairment of goodwill and other intangible assets.
Refer to note 2 to the consolidated financial statements and "Critical Accounting Policies" in "Management's Discussion and Analysis of Financial Condition and Results of Operations" for further discussion of the impairment testing of goodwill and identifiable intangible assets.
A decline in general economic conditions or global equity valuations could impact the judgments and assumptions about the fair value of our businesses and we could be required to record impairment charges on our goodwill or other identifiable intangible assets in the future, which could impact our consolidated balance sheet, as well as our consolidated statement of operations. If we are required to recognize an impairment charge in the future, the charge would not impact our consolidated cash flows, liquidity, capital resources, and covenants under our existing credit facilities, asset securitization program, and other outstanding borrowings.
Our debt level may create limitations.
As of March 31, 2022, our total debt was approximately $4.2 billion. This level of indebtedness could limit our flexibility as a result of debt service requirements and restrictive covenants, and may limit our ability to access additional capital or execute our business strategy.
Our exposure to financially troubled customers or suppliers may adversely affect our financial results.
We provide manufacturing services to companies and industries that have in the past, and may in the future, experience financial difficulty. If some of our customers experience financial difficulty, we could have difficulty recovering amounts owed to us by these customers, or demand for our products from these customers could decline. Additionally, if our suppliers experience financial difficulty, we could have difficulty sourcing supplies necessary to fulfill production requirements and meet scheduled shipments. If one or more of our customers were to become insolvent or otherwise were unable to pay for the services provided by us on a timely basis, or at all, our operating results and financial condition could be adversely affected. Such adverse effects could include one or more of the following: an increase in our provision for doubtful accounts, a charge for inventory write-offs, a reduction in revenue, and an increase in our working capital requirements due to higher inventory levels and increases in days our accounts receivables are outstanding. Any of these risks may be heightened by the effects of the COVID-19 pandemic.
The market price of our ordinary shares is volatile.
The stock market in recent years has experienced significant price and volume fluctuations that have affected the market prices of companies, including technology companies. These fluctuations have often been unrelated to or disproportionately impacted by the operating performance of these companies. The market for our ordinary shares has been and may in the future be subject to similar volatility. Factors such as fluctuations in our operating results, announcements of technological innovations or events affecting other companies in the electronics industry, currency fluctuations, general market fluctuations, and macro-economic conditions may cause the market price of our ordinary shares to decline. Stock price fluctuations could impact the value of our equity compensation, which could affect our ability to recruit and retain employees.
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Changes in our credit rating may make it more expensive for us to raise additional capital or to borrow additional funds. We are also exposed to interest rate fluctuations on our outstanding borrowings and investments.
Our credit is rated by credit rating agencies. Our 5.000% Notes due 2023, our 4.750% Notes due 2025, our 3.750% Notes due 2026, our 4.875% Notes due 2029 and our 4.875% Notes due 2030 are currently rated BBB- by Standard and Poor's ("S&P") which is considered to be “investment grade” by S&P, rated Baa3 by Moody’s which is considered to be “investment grade” by Moody's, and rated BBB- by Fitch which is considered to be "investment grade" by Fitch. Any decline in our credit rating may make it more expensive for us to raise additional capital in the future on terms that are acceptable to us, if at all, negatively impact the price of our ordinary shares, increase our interest payments under some of our existing debt agreements, and have other negative implications on our business, many of which are beyond our control. In addition, the interest rate payable on some of our credit facilities is subject to adjustment from time to time if our credit ratings change. Thus, any potential future negative change in our credit rating may increase the interest rate payable on these credit facilities.
In addition, we are exposed to interest rate risk under our variable rate terms loans, bilateral facilities and revolving credit facility for indebtedness we have incurred or may incur under such facilities. The interest rates on our borrowings under our revolving credit facility may be based on either (i) a margin over LIBOR or (ii) the base rate (the greatest of the agent's prime rate, the federal funds rate plus 0.50% and LIBOR for a one-month interest period plus 1.00%) plus an applicable margin, in each case depending on our credit rating, and other borrowings also may be based on LIBOR. Refer to the discussion in note 9 to the consolidated financial statements, "Bank Borrowings and Long-Term Debt" for further details of our debt obligations. We are also exposed to interest rate risk on our invested cash balances, our securitization facilities and our factoring activities.
In addition, the U.K.’s Financial Conduct Authority, which regulates LIBOR, announced the publication cessation dates for all U.S. Dollar and non-U.S. Dollar LIBOR settings. Most settings ceased at the end of December 2021 and the remaining U.S. Dollar settings (overnight and one-, three-, six- and twelve-month U.S. Dollar LIBOR) will cease at the end of June 2023. Although significant progress has been made by regulators, industry bodies, and market participants to introduce and implement the Secured Overnight Financing Rate (“SOFR”) as a replacement rate for U.S. Dollar LIBOR, there is no assurance that an alternative reference rate such as SOFR will achieve sufficient market acceptance when the publication of the principal tenors of U.S. Dollar LIBOR is discontinued, or that market participants will otherwise implement effective transitional arrangements to address that discontinuation. Such failure to implement an alternative reference rate could result in widespread dislocation in the financial markets and volatility in the pricing of debt facilities negatively affecting our access to the borrowing of additional funds. Furthermore, while contractual arrangements in connection with certain of our debt facilities contemplate the transition from LIBOR to an alternative reference rate (including SOFR), the consequences of such transition cannot be entirely predicted and could result in an increase in the cost of our borrowings on our variable rate debt, which could adversely impact our interest expense, results of operations, and cash flows.
We are subject to risks associated with investments.
We invest in private funds and companies for strategic reasons and may not realize a return on our investments. We make investments in private funds and companies to further our strategic objectives, support key business initiatives, and develop business relationships with related portfolio companies. Many of the instruments in which we invest are non-marketable at the time of our initial investment. If any of the funds or companies in which we invest fail, we could lose all or part of our investment. From time-to-time we have identified observable price changes, or impairments in investments, and we have written down investments' fair values and recognized a loss.
Changes in financial accounting standards or policies have affected, and in the future may affect, our reported financial condition or results of operations.
We prepare our financial statements in conformity with U.S. GAAP. These principles are subject to interpretation by the Financial Accounting Standards Board (FASB), the American Institute of Certified Public Accountants (AICPA), the SEC and various bodies formed to interpret and create accounting policies. For example, significant changes to lease accounting rules have been enacted and applied to us in fiscal year 2020 per Accounting Standard Update ("ASU") 2016-02 "Leases." Changes to accounting rules or challenges to our interpretation or application of the rules by regulators may have a material adverse effect on our reported financial results or on the way we conduct business. Refer to "Recently Adopted Accounting Pronouncements" within note 2 of Item 8, Financial Statements and Supplementary Data.
International Risks
Weak global economic conditions, geopolitical uncertainty and instability in financial markets may adversely affect our business, results of operations, financial condition, and access to capital markets.
Our operations and the execution of our business plans and strategies are subject to the effects of global economic trends, geopolitical risks and demand or supply shocks from events that could include political crises and conflict (including the
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Russian invasion of Ukraine), war, a major terrorist attack, natural disasters or actual or threatened public health emergencies (such as COVID-19, including virus variants and resurgences and responses to those developments such as continued or new government-imposed lockdowns and travel restrictions). They are also affected by local and regional economic environments, supply chain constraints and policies in the U.S. and other markets that we serve, including interest rates, monetary policy, inflation, economic growth, recession, commodity prices, currency volatility, currency controls or other limitations on the ability to expatriate cash, sovereign debt levels and actual or anticipated defaults on sovereign debt. For example, the ongoing conflict between Russia and Ukraine and the related sanctions and other measures imposed by the European Union, the U.S. and other countries and organizations in response have led, and may continue to lead, to disruption and instability in global markets, supply chains and industries that could negatively impact our businesses, financial condition and results of operations. Additionally, changes in local economic conditions or outlooks, such as lower rates of investment or economic growth in China, Europe or other key markets, affect the demand for or profitability of our products and services outside the U.S., and the impact on the Company could be significant given the extent of our activities outside the United States. Political changes and trends such as populism, protectionism, economic nationalism and sentiment toward multinational companies and resulting tariffs, export controls or other trade barriers, or changes to tax or other laws and policies, have been and may continue to be disruptive and costly to our businesses, and these can interfere with our global operating model, supply chain, production costs, customer relationships and competitive position. Further escalation of specific trade tensions, including intensified decoupling between the U.S. and China, or in global trade conflict more broadly could be harmful to global economic growth or to our business in or with China or other countries, and related decreases in confidence or investment activity in the global markets would adversely affect our business performance. We also do business in many emerging market jurisdictions where economic, political and legal risks are heightened. Further, an increase in inflation rates, such as those the market is currently experiencing, could affect our profitability and cash flows, due to higher wages, higher operating costs, higher financing costs, and/or higher supplier prices. Inflation may also adversely affect foreign exchange rates. We may be unable to pass along such higher costs to our customers. In addition, Inflation may adversely affect customers’ financing costs, cash flows, and profitability, which could adversely impact their operations and our ability to collect receivables.
These conditions may result in reduced consumer and business confidence and spending in many countries, a tightening in the credit markets, a reduced level of liquidity in many financial markets, high volatility in credit, fixed income and equity markets, currency exchange rate fluctuations, and global economic uncertainty. In addition, longer term disruptions in the capital and credit markets could adversely affect our access to liquidity needed for our business. If financial institutions that have extended credit commitments to us are adversely affected by the conditions of the U.S. and international capital markets, they may become unable to fund borrowings under their credit commitments to us, which could have an adverse impact on our financial condition and our ability to borrow additional funds, if needed, for working capital, capital expenditures, acquisitions, research and development and other corporate purposes.
We conduct operations in a number of countries and are subject to the risks inherent in international operations.
The geographic distances between the Americas, Asia and Europe create a number of logistical and communications challenges for us. These challenges include managing operations across multiple time zones, directing the manufacture and delivery of products across long distances, coordinating procurement of components and raw materials and their delivery to multiple locations, and coordinating the activities and decisions of the core management team, which is based in a number of different countries.
Facilities in several different locations may be involved at different stages of the production process of a single product, leading to additional logistical difficulties.
Because our manufacturing operations are located in a number of countries throughout the Americas, Asia and Europe, we are subject to risks of changes in economic, social and political conditions in those countries, including:
fluctuations in the value of local currencies;
labor unrest, difficulties in staffing and geographic labor shortages;
longer payment cycles;
cultural differences;
increases in duties, tariffs, and taxation levied on our products including anti-dumping and countervailing duties;
trade restrictions including limitations on imports or exports of components or assembled products, unilaterally or bilaterally;
trade sanctions and related regulatory enforcement actions and other proceedings;
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potential trade wars;
increased scrutiny by the media and other third parties of labor practices within our industry (including but not limited to forced labor and adverse working conditions) which may result in allegations of violations, more stringent and burdensome labor laws and regulations and inconsistency in the enforcement and interpretation of such laws and regulations, higher labor costs, increased risk of cross-border cargo being detained or seized and/or loss of revenues if our customers become dissatisfied with our labor practices and diminish or terminate their relationship with us;
inflationary pressures, such as those the market is currently experiencing, which may increase costs for materials, supplies, and services;
imposition of restrictions on currency conversion or the transfer of funds;
environmental protection laws and regulations, including those related to climate change;
expropriation of private enterprises;
ineffective legal protection of our intellectual property rights in certain countries;
natural disasters;
exposure to infectious disease, epidemics and pandemics, including the effects of the COVID-19 pandemic, on our business operations in geographic locations impacted by the outbreak and on the business operations of our customers and suppliers;
inability of international customers and suppliers to obtain financing resulting from tightening of credit in international financial markets;
government shutdowns, lockdowns and quarantines due to COVID-19, which may result in temporary closure of facilities or slowdowns in production;
ongoing global supply chain disruptions, slowing the ability of our facilities to import necessary materials and export our products;
political unrest; and
a potential reversal of current favorable policies encouraging foreign investment or foreign trade by our host countries.
We operate in a number of different countries and jurisdictions, and we cannot anticipate the potential impact that new or current restrictions in each of these countries or jurisdictions due to COVID-19 may have on our manufacturing operations and facilities, our supply chain, and our business more generally.
The attractiveness of our services to customers and our ability to conduct business with certain customers can be affected by changes in U.S. and other countries' trade policies. In 2018, the U.S. imposed tariffs on a large variety of products of Chinese origin. The U.S. government also, effective May 10, 2019, increased tariffs on $200 billion of Chinese goods to 25%. Further, on May 15, 2019, President Trump issued an executive order designed to secure the information and communications technology and services supply chain, which would restrict the acquisition or use in the United States of information and communications technology or services designed, developed, manufactured, or supplied by persons owned by, controlled by, or subject to the jurisdiction or direction of foreign adversaries. The executive order is subject to implementation by the Secretary of Commerce and applies to contracts entered into prior to the effective date of the order. In addition, the U.S. Commerce Department has implemented additional restrictions and may implement further restrictions that would affect the conduct of business with certain Chinese companies. A “phase one” trade deal signed between the U.S. and China on January 15, 2020 accompanied a U.S. decision to cancel a plan to increase tariffs on an additional list of Chinese products and to reduce the tariffs imposed on May 13, 2019 from 15% to 7.5% effective February 14, 2020. With US-China discussions over the “phase one” trade deal potentially stalled, there is a risk the current administration may consider raising tariffs on critical Chinese industries while rolling back tariffs for other products. At present, the majority of tariff exclusions granted have expired and many of the additional tariffs on Chinese origin goods remain, as do concerns over the stability of bilateral trade relations, particularly given the limited scope of the phase one agreement. In addition, China has not met its obligations under the deal and the economic disruption caused by the COVID-19 pandemic increases the potential for China to invoke the deal’s “disaster clause,” which could further challenge US-China bilateral trade relations. Depending upon their duration and implementation as well as our ability to mitigate their impact, these tariffs, the executive order and its implementation and other regulatory actions could materially affect our business, including in the form of increased cost of goods sold, decreased margins, increased pricing for customers, and reduced sales.
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In addition, US-China bilateral trade relations remain uncertain. At this time, there is no assurance that a broader trade agreement will be successfully negotiated between the United States and China to reduce or eliminate the existing tariffs. Further, one of our former customers, Huawei Technologies Co., Ltd., and some of its affiliates have been added to the U.S. Department of Commerce’s Entity List, and were recently made subject to enhanced restrictions designed to prevent them from having access to foreign-produced items using U.S.-origin semiconductor technology and equipment; we could be subject to reputational harm based on its business activities, including activities with sanctioned countries. In addition, some countries in which we operate, such as Brazil, Hungary, India, Mexico, Malaysia and Poland, have experienced periods of slow or negative growth, high inflation, significant currency devaluations or limited availability of foreign exchange. Furthermore, in countries such as China, Brazil, India and Mexico, governmental authorities exercise significant influence over many aspects of the economy, and their actions could have a significant effect on us.
Demand for Nextracker solar trackers could be indirectly depressed as a result of existing and/or increased tariffs, duties or taxation of imported solar panels and cells. Moreover, the ongoing anti-dumping investigation by the U.S. Department of Commerce into imports of crystalline silicon photovoltaic solar panels and cells from Cambodia, Malaysia, Thailand, and Vietnam, which investigation might lead to retroactive and/or prospective tariffs on imports of panels and cells may, as a result of increased costs, depress or delay demand for U.S. solar projects and Nextracker’s solar trackers in the U.S.
We could be seriously harmed by inadequate infrastructure, including lack of adequate power and water supplies, transportation, raw materials and parts in countries in which we operate. In addition, we may encounter labor disruptions and rising labor costs, in particular within the lower-cost regions in which we operate. Any increase in labor costs that we are unable to recover in our pricing to our customers could adversely impact our operating results.
Operations in foreign countries also present risks associated with currency exchange and convertibility, inflation and repatriation of earnings. Inflation may impact the Company’s profits and cash flows as well as adversely affect foreign exchange rates. In some countries, economic and monetary conditions and other factors could affect our ability to convert our cash distributions to U.S. dollars or other freely convertible currencies, or to move funds from our accounts in these countries. Furthermore, the central bank of any of these countries may have the authority to suspend, restrict or otherwise impose conditions on foreign exchange transactions or to approve distributions to foreign investors.
Fluctuations in foreign currency exchange rates could increase our operating costs.
We have manufacturing operations and industrial parks that are located in various part of the world, including Asia, Eastern Europe, Mexico and Brazil. A portion of our purchases and our sale transactions are denominated in currencies other than the United States dollar. As a result, we are exposed to fluctuations in these currencies impacting our fixed cost overhead or our supply base relative to the currencies in which we conduct transactions.
Currency exchange rates fluctuate on a daily basis as a result of a number of factors, including changes in a country's political and economic policies. The primary impact of currency exchange fluctuations is on the cash, receivables, payables and expenses of our operating entities. As part of our currency hedging strategy, we use financial instruments such as forward exchange, swap contracts, and options to hedge our foreign currency exposure in order to reduce the short-term impact of foreign currency rate fluctuations on our operating results. If our hedging activities are not successful or if we change or reduce these hedging activities in the future, we may experience significant unexpected fluctuations in our operating results as a result of changes in exchange rates.
We are also exposed to risks related to the valuation of the Chinese currency relative to the U.S. dollar. The Chinese currency is the renminbi ("RMB"). A significant increase in the value of the RMB could adversely affect our financial results and cash flows by increasing both our manufacturing costs and the costs of our local supply base. Additionally, the recent COVID-19 pandemic could contribute to foreign currency volatility. Volatility in the functional and non-functional currencies of our entities and the United States dollar could seriously harm our business, operating results and financial condition.
Legal and Regulatory Risks
We are subject to risks relating to litigation and regulatory investigations and proceedings, which may have a material adverse effect on our business.
From time to time, we are involved in various claims, suits, investigations and legal proceedings. Additional legal claims or regulatory matters may arise in the future and could involve matters relating to commercial disputes, government regulatory and compliance, intellectual property, antitrust, tax, employment or shareholder issues, product liability claims and other issues on a global basis. If we receive an adverse judgment in any such matter, we could be required to pay substantial damages and cease certain practices or activities. Regardless of the merits of the claims, litigation and other proceedings may be both time-consuming and disruptive to our business. The defense and ultimate outcome of any lawsuits or other legal proceedings may
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result in higher operating expenses and a decrease in operating margin, which could have a material adverse effect on our business, financial condition, or results of operations.
AsAny existing or future lawsuits could be time-consuming, result in significant expense and divert the attention and resources of our management and other key employees, as well as harm our reputation, business, financial condition or results of operations.
On February 14, 2019, we submitted an initial notification of voluntary disclosure to the U.S. Department of the Treasury, Office of Foreign Assets Control ("OFAC") regarding possible noncompliance with U.S. economic sanctions requirements among certain non-U.S. Flex-affiliated operations. On September 28, 2020, we made a medical device manufacturer,submission to OFAC that completed the Company’s voluntary disclosure based on the results of an internal investigation regarding the matter. On June 11, 2021, we notified OFAC that we had identified possible additional relevant transactions at one non-U.S. Flex-affiliated operation. We submitted an update to OFAC on November 16, 2021 reporting on the results of our review of those transactions. We intend to continue to cooperate fully with OFAC in this matter going forward. Nonetheless, it is reasonably possible that we could be subject to penalties that could have additionala material adverse effect on our financial position, results of operations or cash flows.
If our compliance requirements. policies are breached, we may incur significant legal and financial exposure.
We are requiredhave implemented local and global compliance policies to registerensure compliance with our legal obligations across our operations. A significant legal risk resulting from our international operations is compliance with the U.S. Food and Drug Administration ("FDA") and are subject to periodic inspection by the FDA for compliance with the FDA's Quality System Regulation ("QSR") requirements, which require manufacturers of medical devices to adhere to certain regulations, including testing, quality control and documentation procedures. Compliance with applicable regulatory requirements is subject to continual review and is rigorously monitored through periodic inspections and product field monitoring by the FDA. If any FDA inspection reveals noncompliance with QSRForeign Corrupt Practices Act or other FDA regulations, and the Company does not address the observation adequately to the satisfactionsimilar local laws of the FDA,countries in which we do business, including the FDA may take action against us. FDA actions may include issuingUK Anti-Bribery Act, which prohibits covered companies from making payments to foreign government officials to assist in obtaining or retaining business. Our Code of Business Conduct and Ethics prohibits corrupt payments on a letterglobal basis and precludes us from offering or giving anything of inspectional observations, issuingvalue to a warning letter, imposing fines, bringing an action againstgovernment official for the Company and its officers, requiring a recallpurpose of the products we manufactured for our customers, refusing requests for clearanceobtaining or approval of new products or withdrawal of clearance or approval previously granted, issuing an import detention on products entering the U.S. from an offshore facility, or shutting down a manufacturing facility. If any of these actions were to occur, it would harm our reputation and cause ourretaining business, to suffer.
In the European Union ("EU"), we are requiredwin a business advantage or to maintain certain standardized certificationsimproperly influence a decision regarding Flex. Nevertheless, there can be no assurance that all of our employees and agents will refrain from taking actions in order to sellviolation of this and our productsrelated anti-corruption policies and must undergo periodic inspections to obtain and maintain these certifications. Continued noncompliance to the EU regulationsprocedures. Any such violation could stop the flow of products into the EU from us or fromhave a material adverse effect on our customers. In China, the Safe Food and Drug Administration controls and regulates the manufacture and commerce of healthcare products. We must comply with the regulatory laws applicable to medical device manufactures or our ability to manufacture products in China could be impacted. In Japan, the Pharmaceutical Affairs Laws regulate the manufacture and commerce of healthcare products. These regulations also require that subcontractors manufacturing products intended for sale in Japan register with authorities and submit to regulatory audits. Other Asian countries and Latin America where we operate have similar laws regarding the regulation of medical device manufacturing.business.
If our products or components contain defects, demand for our services may decline and we may be exposed to product liability and product warranty liability.
Defects in the products we manufacture or design, whether caused by a design, engineering, manufacturing or component failure or deficiencies in our manufacturing processes, could result in product or component failures, which may damage our business reputation and expose us to product liability or product warranty claims.
Product liability claims may include liability for personal injury or property damage. Product warranty claims may include liability to pay for the recall, repair or replacement of a product or component. Although we generally allocate liability for these claims in our contracts with our customers, increasingly we are unsuccessful in allocating such liability, and even where we have allocated liability to our customers, our customers may not have the resources to satisfy claims for costs or liabilities arising from a defective product or component for which they have assumed responsibility.
If we design, engineer or manufacture a product or component that is found to cause any personal injury or property damage or is otherwise found to be defective, we could spend a significant amount of money to resolve the claim. In addition, product liability and product recall insurance coverage are expensive and may not be available for some or all of our services offerings on acceptable terms, in sufficient amounts, or at all. A successful product liability or product warranty claim in excess of our insurance coverage or any material claim for which insurance coverage is denied, limited or is not available could have a material adverse effect on our business, results of operations and financial condition.
FluctuationsWe are subject to the risk of increased income taxes.
We are subject to taxes in foreign currency exchangenumerous jurisdictions. Our future effective tax rates could be affected by changes in the mix of earnings in countries with differing statutory rates and changes in tax laws or their interpretation including changes related to tax holidays or tax incentives. The international tax environment continues to change as a result of both coordinated efforts by governments and unilateral measures designed by individual countries, both intended to tackle concerns over perceived international tax avoidance techniques, which could ultimately have an adverse effect on the taxation of international businesses. In the U.S., various proposals to raise corporate income taxes are under active consideration. In addition, legislative changes may result from the Organization for Economic Co-operation and Development’s Base Erosion and Profit Shifting Project. In 2021, more than 140 countries tentatively signed on to a framework that imposes a minimum tax rate of 15%, among other provisions. As this framework is subject to further negotiation and implementation by each member country, the timing and ultimate impact of any such changes on our tax obligations are uncertain. Any such changes, if adopted, could adversely impact our effective tax rate and may have a material impact on our results of operations, cash flows and financial position.
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Our taxes could also increase if certain tax holidays or incentives are not renewed upon expiration, or if tax rates applicable to us in such jurisdictions are otherwise increased. Our continued ability to qualify for specific tax holiday extensions will depend on, among other things, our operating costs.anticipated investment and expansion in these countries and the manner in which the local governments interpret the requirements for modifications, extensions or new incentives.
We have manufacturing operationsIn addition, the Company and industrial parksits subsidiaries are regularly subject to tax return audits and examinations by various taxing jurisdictions around the world. In determining the adequacy of our provision for income taxes, we regularly assess the likelihood of adverse outcomes resulting from tax examinations. While it is often difficult to predict the final outcome or the timing of the resolution of a tax examination, we believe that our reserves for uncertain tax benefits reflect the outcome of tax positions that are locatedmore likely than not to occur. However, we cannot assure you that the final determination of any tax examinations will not be materially different than that which is reflected in various part of the world, including Asia, Eastern Europe, Mexicoour income tax provisions and Brazil. A portion of our purchases and our sale transactions are denominated in currencies other than the United States dollar. As a result, we are exposed to fluctuations in these currencies impacting our fixed cost overhead or our supply base relative to the currencies in which we conduct transactions.
Currency exchange rates fluctuate on a daily basisaccruals. Should additional taxes be assessed as a result of a number of factors, including changes incurrent or future examination, there could be a country's politicalmaterial adverse effect on our tax provision, operating results, financial position and economic policies. Volatilitycash flows in the functionalperiod or periods for which that determination is made.
We may not meet regulatory quality standards applicable to our manufacturing and non-functional currenciesquality processes for medical devices, which could have an adverse effect on our business, financial condition or results of our entitiesoperations.
As a medical device manufacturer, we have additional compliance requirements. We are required to register with the U.S. Food and Drug Administration ("FDA") and are subject to periodic inspection by the FDA for compliance with the FDA's Quality System Regulation ("QSR") requirements, which require manufacturers of medical devices to adhere to certain regulations, including testing, quality control and documentation procedures. Compliance with applicable regulatory requirements is subject to continual review and is rigorously monitored through periodic inspections and product field monitoring by the FDA. If any FDA inspection reveals noncompliance with QSR or other FDA regulations, and the United States dollar could seriouslyCompany does not address the observation adequately to the satisfaction of the FDA, the FDA may take action against us. FDA actions may include issuing a letter of inspectional observations, issuing a warning letter, imposing fines, bringing an action against the Company and its officers, requiring a recall of the products we manufactured for our customers, refusing requests for clearance or approval of new products or withdrawal of clearance or approval previously granted, issuing an import detention on products entering the U.S. from an offshore facility, or shutting down a manufacturing facility. If any of these actions were to occur, it would harm our reputation and cause our business operating results and financial condition. The primary impact of currency exchange fluctuations is onto suffer.
In the cash, receivables, payables and expenses of our operating entities. As part of our currency hedging strategy,EU, we use financial instruments such as forward exchange, swap contracts, and optionsare required to hedge our foreign currency exposuremaintain certain standardized certifications in order to reduce the short-term impact of foreign currency rate fluctuations onsell our operating results. If our hedging activities are not successful or if we change or reduceproducts and must undergo periodic inspections to obtain and maintain these hedging activities in the future, we may experience significant unexpected fluctuations in our operating results as a result of changes in exchange rates.

We are also exposed to risks relatedcertifications. Continued noncompliance to the valuationEU regulations could stop the flow of products into the Chinese currency relative toEU from us or from our customers. In China, the U.S. dollar. The Chinese currency isSafe Food and Drug Administration controls and regulates the renminbi ("RMB"). A significant increase in the valuemanufacture and commerce of the RMB could adversely affect our financial results and cash flows by increasing both our manufacturing costs and the costs of our local supply base.
Our operating results may fluctuate significantly due to seasonal demand.
Two of our significant end markets are the mobile devices market and the consumer devices market. These markets exhibit particular strength generally in the two quarters leading up to the end of the calendar year in connectionhealthcare products. We must comply with the holiday season. As a result, we have historically experienced stronger revenuesregulatory laws applicable to medical device manufacturers, or our ability to manufacture products in our second and third fiscal quarters as compared to our other fiscal quarters. Economic or other factors leading to diminished orders in the end of the calendar year could harm our business.
We depend on our executive officers and skilled management personnel.
Our success depends to a large extent upon the continued services of our executive officers and other key employees. Generally, our employees are not bound by employment or non-competition agreements, and we cannot assure you that we will retain our executive officers and other key employees. WeChina could be seriously harmed byimpacted. In Japan, the lossPharmaceutical Affairs Laws regulate the manufacture and commerce of anyhealthcare products. These regulations also require that subcontractors manufacturing products intended for sale in Japan register with authorities and submit to regulatory audits. Other Asian countries and Latin America where we operate have similar laws regarding the regulation of our executive officers or other key employees. We will need to recruit and retain skilled management personnel, and if we are not able to do so, our business could be harmed. In addition, in connection with expanding our design services offerings, we must attract and retain experienced design engineers. There is substantial competition in our industry for highly skilled employees. Our failure to recruit and retain experienced design engineers could limit the growth of our design services offerings, which could adversely affect our business.medical device manufacturing.
Our failure to comply with environmental laws could adversely affect our business.
We are subject to variousextensive and changing federal, state, local and foreigninternational environmental, health and safety laws and regulations, including regulations governingconcerning, among other things, the health and safety of our employees, the generation, use, storage, transportation, discharge and disposal of certain materials (including chemicals and hazardous substancessubstances) used in or derived from our manufacturing processes. We are also subject to laws and regulations governing the recyclability of products, the materials that may be included in products, and our obligations to dispose of these products after end users have finished with them. Additionally, we may be exposed to liability to our customers relating to the materials that may be included in the components that we procure for our customers' products. Any violation or alleged violation by us of environmental laws could subject us to significant costs, fines or other penalties.
We are also required to comply with an increasing number of global and local product environmental compliance regulations focused on the restriction of certain hazardous substances. We are subject to the EU directives, including the Restrictions on RoHS, the WEEE as well as the EU's REACH regulation. In addition, new technical classifications of e-Waste being discussed in the Basel Convention technical working group could affect both our customers' abilities and obligations in electronics repair and refurbishment. Also of note is China's Management Methods for Controlling Pollution Caused by EIPselectrical information products regulation, commonly referred to as "China RoHS", which restricts the importation into and production within China of electrical equipment containing certain hazardous materials. Similar legislation has been or may be enacted in other jurisdictions, including in the United States. RoHS and other similar legislation bans or restricts the use of lead, mercury and certain other specified substances in electronics products and WEEE requires EU importers and/or producers to assume responsibility for the collection, recycling and management of waste electronic products and components. We have developed rigorous risk mitigating compliance programs designed to meet the needs of our customers as well as applicable
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regulations. These programs may include collecting compliance data from our suppliers, full laboratory testing and public reporting of other environmental metrics such as carbon emissions, electronic waste and water, and we also require our supply chain to comply. Non-compliance could potentially result in our customers refusing to purchase our products, and significant costs, penalties, and/or penalties.other sanctions, such as restrictions on our products entering certain jurisdictions. In the case of WEEE, the compliance responsibility rests primarily with the EU importers and/or producers rather than with EMS companies. However, customers may turn to EMS companies for assistance in meeting their obligations under WEEE.
In addition, we are responsible for the cleanup of contamination at some of our current and former manufacturing facilities and at some third party sites. If more stringent compliance or cleanup standards under environmental laws or regulations are imposed, or the results of future testing and analyses at our current or former operating facilities indicate that we are responsible for the release of hazardous substances into the air, ground and/or water, we may be subject to additional liability. Additional environmental matters may arise in the future at sites where no problem is currently known or at sites that we may acquire in the future. Some environmental laws impose liability without fault, leading companies to be responsible for investigating, removing, or remediating possible hazardous substances released at properties it owns or operates, regardless of when such substances were released. Additionally, we could be required to alter our manufacturing and operations and incur substantial expense in order to comply with environmental regulations. Our failure to comply with environmental laws and regulations or adequately address contaminated sites could limit our ability to expand our facilities or could require us to incur significant expenses, which would harm our business.
Failure to comply with domestic or international employment and related laws could result in the payment of significant damages, which would reduce our net income.

We are subject to a variety of domestic and foreign employment laws, including those related to safety, wages and overtime, discrimination, whistle-blowing, classification of employees and severance payments. Enforcement activity relating to these laws, particularly outside of the United States, can increase as a result of increased media attention due to violations by other companies, changes in law, political and other factors. There can be no assurance that we won't be found to have violated such laws in the future, due to a more aggressive enforcement posture by governmental authorities or for any other reason. Any such violations could lead to the assessment of fines against us by federal, state or foreign regulatory authorities or damages payable to employees, which fines could be substantial and which would reduce our net income.
We are subject to risks associated with investments.
We invest in private funds and companies for strategic reasons and may not realize a return on our investments. We make investments in private funds and companies to further our strategic objectives, support key business initiatives, and develop business relationships with related portfolio companies. Many of the instruments in which we invest are non-marketable at the time of our initial investment. During the last half of fiscal year 2019, we reassessed our strategy with respect to our investment portfolio. We focused on streamlining our investment portfolio and disposed of some of our investments and recognized certain charges. If any of the funds or companies in which we invest fail, we could lose all or part of our investment. From time-to-time we have identified observable price changes, or impairments in investments, and we have written down certain investments fair values and recognized a loss.
Our business could be impacted as a result of actions by activist shareholders or others.
We may be subject, from time to time, to legal and business challenges in the operation of our company due to actions instituted by activist shareholders or others. Responding to such actions could be costly and time-consuming, may not align with our business strategies and could divert the attention of our Board of Directors and senior management from the pursuit of our business strategies. Perceived uncertainties as to our future direction as a result of shareholder activism may lead to the perception of a change in the direction of the business or other instability and may make it more difficult to attract and retain qualified personnel and business partners and may affect our relationships with vendors, customers and other third parties.
Our debt levelSocial and environmental responsibility policies and provisions may create limitations.
As of March 31, 2019, our total debt was approximately $3.1 billion. This level of indebtedness could limit our flexibility as a result of debt service requirements and restrictive covenants,be difficult to comply with and may limit our ability to access additional capital or executeimpose costs on us. Increasing attention on environmental, social and governance (ESG) matters may have a negative impact on our business, strategy.impose additional costs on us, and expose us to additional risks.
ChangesCompanies are facing increasing attention from investors, customers, consumers, and other stakeholders relating to ESG matters, including environmental stewardship, social responsibility, diversity, equity, and inclusion, and workplace conduct. There is an increasing focus on sustainability including ESG in our credit ratingindustry. A number of our customers have adopted, or may make it moreadopt, procurement policies that include social and environmental responsibility provisions that their suppliers should comply with, or they may seek to include such provisions in their procurement terms and conditions. In addition, an increasing number of investors have adopted, or may adopt, ESG policies with which they expect their portfolio companies to comply. We currently comply with the sustainability standards set forth by various voluntary sustainability initiatives and organizations, and we have joined the U.N. Global Compact, a voluntary initiative for businesses to develop, implement and disclose sustainability policies and practices. These social and environmental responsibility and ESG practices, policies, provisions and initiatives are subject to change, can be unpredictable, and may be difficult and expensive for us to raise additional capital orcomply with. Evolving concerns may lead to borrow additional funds. subsequent international, national, regional and local legislative and regulatory reactions.
We may alsohave established sustainability and ESG programs aligned with sound environmental, social and governance principles. These programs reflect our current initiatives and are not guarantees that we will be exposedable to interest rate fluctuations onachieve them. Our ability to successfully execute these initiatives and accurately report our outstanding borrowingsprogress presents numerous operational, financial, legal, reputational and investments.
Our credit is rated by credit rating agencies. Our 4.625% Notes, our 5.000% Notes and our 4.750% Notes are currently rated BBB- by Standard and Poor's ("S&P") which is considered to be “investment grade” by S&P, rated Baa3 by Moody’s which is considered to be “investment grade” by Moody's, and rated BBB- by Fitch which is considered to be "investment grade" by Fitch. Any decline in our credit rating may make it more expensive for us to raise additional capital in the future on terms that are acceptable to us, if at all, negatively impact the price of our ordinary shares, increase our interest payments under some of our existing debt agreements, and have other negative implications on our business,risks, many of which are beyondoutside our control. In addition, the interest rate payable on somecontrol, and all of our credit facilities is subject to adjustment from time to time if our credit ratings change. Thus, any potential futurewhich could have a material negative change in our credit rating may increase the interest rate payable on these credit facilities.
In addition, we are exposed to interest rate risk under our variable rate terms loans, bilateral facilities and revolving credit facility for indebtedness we have incurred or may incur under such borrowings. The interest rates under these borrowings are based on either (i) a margin over LIBOR or (ii) the base rate (the greatest of the agent's prime rate, the federal funds rate plus 0.50% and LIBOR for a one-month interest period plus 1.00%) plus an applicable margin, in each case dependingimpact on our credit rating. Referbusiness. Additionally, the implementation of these initiatives imposes additional costs on us. If our ESG initiatives fail to the discussion in note 7, "Bank Borrowings and Long-Term Debt" to the consolidated financial statements for further details of our debt obligations. We are also exposed to interest rate risk on our invested cash balances, our securitization facilitiessatisfy investors, current or potential customers, consumers and our factoring activities.other stakeholders, our reputation, our ability to sell
In addition,
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products and services to customers, our ability to attract or retain employees, and our attractiveness as an investment, business partner or acquirer could be negatively impacted. Similarly, our failure or perceived failure to pursue or fulfill our goals, targets and objectives or to satisfy various reporting standards within the U. K.’s Financial Conduct Authority, which regulates LIBOR, announced that it intendstimelines we announce, or at all, could also have similar negative impacts and expose us to phase out LIBOR bygovernment enforcement actions and private litigation.
Climate change, and the end of 2021. The U.S. Federal Reserve has begun publishing a Secured Overnight Funding Rate (“SOFR”), which is intendedlegal and regulatory initiatives related to replace U.S. dollar LIBOR. Plans for alternative reference rates for other currencies have also been announced. At this time, we cannot predict how markets will respond to these proposed alternative rates or the effect of any changes to LIBOR or the discontinuation of LIBOR. If LIBOR is no longer available or if our lenders have increased costs due to changes in LIBOR, we may experience potential increases in interest rates on our variable rate debt, whichclimate change, could adversely impact our interest expense, results of operations and cash flows.

Weak global economic conditions, geopolitical uncertainty and instability in financial markets may adversely affect our business, results of operations and financial condition,condition.
There is increasing concern that a gradual increase in global average temperatures due to increased concentration of carbon dioxide and accessother greenhouse gases in the atmosphere will cause significant changes in weather patterns around the globe and an increase in the frequency and severity of natural disasters. Changes in weather patterns and an increased frequency, intensity and duration of extreme weather conditions, such as hurricanes, earthquakes, wildfires, water or other natural resource shortages, droughts, or flooding, could, among other things, pose physical risks to capital markets.
Our revenue and gross margin depend significantly on general economic conditionsimpair our production capabilities, disrupt the operations of our supply chain and theinfrastructure, and impact our customers and their demand for products inour services. The geographic locations of our manufacturing facilities could intensify the markets in which our customers compete. Adverse worldwide economic conditions and geopolitical uncertainty may create challenging conditions innegative impacts resulting from any of these issues. As a result, the electronics industry. For example, these conditions may be adversely impacted by the pending withdrawaleffects of the United Kingdom from the EU, which is scheduled to take place on October 31, 2019, following its referendum on EU membership and the actions that the U.S. has taken or may take with respect to certain treaty and trade relationships with other countries. These conditions may result in reduced consumer and business confidence and spending in many countries, a tightening in the credit markets, a reduced level of liquidity in many financial markets, high volatility in credit, fixed income and equity markets, currency exchange rate fluctuations, and global economic uncertainty. In addition, longer term disruptions in the capital and credit markets could adversely affect our access to liquidity needed for our business. If financial institutions that have extended credit commitments to us are adversely affected by the conditions of the U.S. and international capital markets, they may become unable to fund borrowings under their credit commitments to us, whichclimate change could have ana long-term adverse impact on our business, results of operations and financial condition. In many of the countries in which we operate, governmental bodies are increasingly enacting legislation and regulations in response to the potential impacts of climate change. These laws and regulations have, and will continue to have, the potential to impact our operations directly or indirectly as a result of required compliance by us and our suppliers. In addition, we have committed to cut our operational emissions in half by 2030 as part of our long-term sustainability strategy and we may take additional voluntary steps to mitigate our impact on climate change. As a result, we may experience increases in energy, production, transportation and raw material costs, capital expenditures and insurance premiums and deductibles. Inconsistency of legislation and regulations among jurisdictions may also affect the costs of compliance with such laws and regulations. Any assessment of the potential impact of future climate change legislation, regulations or industry standards, as well as any international treaties and accords, is uncertain given the scope of potential regulatory change in the countries in which we operate. Given the political significance and uncertainty around the impact of climate change and how it should be addressed, we cannot predict how legislation and regulation will affect our financial condition, operating performance and our ability to borrow additional funds, if needed, for working capital, capital expenditures, acquisitions, researchcompete. Furthermore, even without such regulation, increased awareness and development andany adverse publicity in the global marketplace about potential impacts on climate change by us or other corporate purposes.
Catastrophic eventscompanies in our industry could haveharm our reputation. Any of the foregoing could result in a material adverse effect on our operations and financial results.
Our operations or systems could be disrupted by natural disasters, terrorist activity, public health issues, cyber security incidents, interruptions of service from utilities, transportation or telecommunications providers, or other catastrophic events. Such events could make it difficult or impossible to manufacture or deliver products to our customers, receive production materials from our suppliers, or perform critical functions, which could adversely affect our revenue and require significant recovery time and expenditures to resume operations. While we maintain business, recovery plans that are intended to allow us to recover from natural disasters or other events that can be disruptive to our business, some of our systems are not fully redundant and we cannot be sure that our plans will fully protect us from all such disruptions.
We maintain a program of insurance coverage for a variety of property, casualty, and other risks. We place our insurance coverage with multiple carriers in numerous jurisdictions. However, one or more of our insurance providers may be unable or unwilling to pay a claim. The types and amounts of insurance we obtain vary depending on availability, cost, and decisions with respect to risk retention. The policies have deductibles and exclusions that result in us retaining a level of self-insurance. Losses not covered by insurance may be large, which could harm our results of operations and financial condition.
The success of certain of our activities depends on our ability to protect our intellectual property rights; claims of infringement or misuse of intellectual property and/or breach of license agreement provisions against our customers or us could harm our business.
We retain certain intellectual property rights to some of the technologies that we develop as part of our engineering, design, and manufacturing services and components offerings. The measures we have taken to prevent unauthorized use of our technology may not be successful. If we are unable to protect our intellectual property rights, this could reduce or eliminate the competitive advantages of our proprietary technology, which would harm our business.
Our business could be adversely affected by any delays,engineering, design and manufacturing services and component offerings involve the creation and use of intellectual property rights, which subject us to the risk of claims of infringement or increased costs, resultingmisuse of intellectual property from issues thatthird parties and/or breach of our common carriers are dealingagreements with in transportingthird parties, as well as claims arising from the allocation of intellectual property risk among us and our materials, ourcustomers. From time to time, we enter into intellectual property licenses (e.g., patent licenses and software licenses) with third parties which obligate us to report covered behavior to the licensor and pay license fees to the licensor for certain activities or products, or both.that enable our use of third party technologies. We may also decline to enter into licenses for intellectual property that we do not think is useful for or used in our operations, or for which our customers or suppliers have licenses or have assumed responsibility.
We rely on a varietyGiven the diverse and varied nature of common carriers to transport our materials from our suppliers to us, and to transport our products from us to our customers. Problems suffered by any of these common carriers, whether due to a natural disaster, labor problem, increased energy prices, criminal activity or some other issue, could result in shipping delays, increased costs, or other supply chain disruptions, and could therefore have a material adverse effect on our operations.
Our business and operations could be adversely impacted by climate change initiatives.
Concern over climate change has led to international legislative and regulatory initiatives directed at limiting carbon dioxide and other greenhouse gas emissions. Proposed and existing efforts to address climate change by reducing greenhouse gas emissions could directly or indirectly affect our costs of energy, materials, manufacturing, distribution, packaging and other operating costs, which could impact our business and financial results.
Our goodwill and identifiable intangible assets could become impaired, which could reduce the valuelocation of our assetsbusiness around the world, certain activities we perform, such as providing assembly services in China and reduce our net income inIndia, may fall outside the year in which the write-off occurs.
Goodwill represents the excessscope of the cost of an acquisition over the fair value of the net assets acquired. We also ascribe value to certain identifiable intangible assets, which consist primarily of customer relationships, developed technology and trade names, among others, as a result of acquisitions. Wethose licenses or may incur impairment charges on goodwill or identifiable intangible assets if we determine that the fair values of goodwill or identifiable intangible assets are less than their current carrying values. We evaluate, on a regular basis, whether events or circumstances have occurred that indicate all, or a portion, of the carrying amount of goodwill may no longernot be recoverable, in which case an impairment charge to earnings would become necessary.
Refer to note 2subject to the consolidated financial statementsapplicable intellectual property rights. Our licensors may disagree and 'critical accounting policies' in "management's discussionclaim royalties are owed for such activities. In addition, the basis (e.g., base price) for any royalty amounts owed are audited by licensors and analysismay be challenged. Our customers are increasingly requiring us to indemnify them against the risk of financial conditionintellectual property-related claims and resultslicensors are claiming that activities we perform are covered by licenses to which we are a party.
If any claims of operations" for further discussioninfringement or misuse of the impairment testing of goodwill and identifiable intangible assets.

A decline in general economic conditions intellectual property from third parties and/or global equity valuations could impact the judgments and assumptions about the fair valuebreach of our businessesagreements with third parties, as well as claims arising from the allocation of intellectual property risk among us and our customers, are brought against us or our customers, whether or not these have merit, we could be required to record impairment charges on our goodwill or other identifiable intangible assetsexpend significant resources in defense of such claims. In the future, which could impact our consolidated balance sheet, as well as our consolidated statementevent of operations. Ifsuch a claim, we aremay be required to recognize an impairment charge inspend a significant amount of money to develop alternatives or
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obtain licenses or to resolve the future, the charge would not impact our consolidated cash flows, liquidity, capital resources, and covenants under our existing credit facilities, asset securitization program, and other outstanding borrowings.
The market price of our ordinary shares is volatile.
The stock market in recent years has experienced significant price and volume fluctuations that have affected the market prices of companies, including technology companies. These fluctuations have often been unrelated to or disproportionately impacted by the operating performance of these companies. The market for our ordinary shares has been and may in the future be subject to similar volatility. Factors such as fluctuations in our operating results, announcements of technological innovations or events affecting other companies in the electronics industry, currency fluctuations, general market fluctuations, and macro-economic conditions may cause the market price of our ordinary shares to decline.
Compliance with government regulations regarding the use of "Conflict Minerals" may result in increased costs and risks to us.
As part of the Dodd-Frank Act, the SEC has promulgated disclosure requirements regarding the use of certain minerals ("Minerals") that may have originated in the Democratic Republic of the Congo or adjoining countries. In our most recent report on Form SD, we reported that, based on our diligence review, we were unable to determine whether Minerals contained in our products originated in the Democratic Republic of the Congo or adjoining countries or whether the mining or trade of such Minerals directly or indirectly financed or otherwise benefited armed groups in those countries.issue through litigation. We expect to undertake further reviews of our supply chain as necessary to comply with the SEC’s requirements. Additionally, customers rely on us to provide critical data regarding the products they purchase and request information on such Minerals. Our materials sourcing is broad-based and multi-tiered, and we may not be ablesuccessful in developing such alternatives or obtaining such licenses on reasonable terms or at all, and any such litigation might not be resolved in our favor, in which cases we may be required to easily verifycurtail certain of our services and offerings. Additionally, litigation could be lengthy and costly, and could materially harm our financial condition regardless of outcome.
We also face certain heightened risks to our intellectual property rights due to our extensive operations in foreign jurisdictions, including the originsrisk of theft or misuse of our intellectual property rights in certain foreign jurisdictions. The laws of certain countries in which we operate may not protect intellectual property rights to the same extent as the laws of the Minerals used inUnited States, and the products we sell. We have many suppliers and each may provide the required information in a different manner, if at all. Accordingly, because the supply chain is complex, our reputation may suffer if we are unablemechanisms to sufficiently verify the origins of the Minerals, if any, used in our products. Additionally, customers may demand that the products they purchase be free of any Minerals originating in the specified countries. The implementation of this requirement could affect the sourcing and availability of products we purchase from our suppliers. This may reduce the number of suppliers thatenforce intellectual property rights may be ableinadequate to provide products and may affectprotect our ability to obtain products in sufficient quantities to meet customer demand or at competitive prices.rights, which could harm our business.
ITEM 1B.    UNRESOLVED STAFF COMMENTS
None.
ITEM 2.    PROPERTIES
Our facilities consist of a global network of industrial parks, regional manufacturing operations, and design, engineering and product introduction centers, providing approximately 2726.7 million square feet of productive capacity as of March 31, 2019. We do not identify or allocate assets by operating segment, as they are interchangeable in nature and used by multiple operating segments.2022.
The composition of the square footage of our facilities, by region, is as follows:
Leased
(Manufacturing)
Owned
(Manufacturing)
Total
(Manufacturing)
Non-manufacturingTotal
Leased
(Manufacturing)
 Owned
(Manufacturing)
 Total
(Manufacturing)
 Non-manufacturing Total(In million square feet)
(in million square feet)
AsiaAsia6.2 5.9 12.1 6.9 19.0 
Americas3.4
 5.4
 8.8
 8.9
 17.7
Americas3.8 5.5 9.3 8.6 17.9 
Asia7.8
 5.9
 13.7
 7.6
 21.3
Europe1.9
 2.6
 4.5
 5.1
 9.6
Europe2.5 2.8 5.3 5.8 11.1 
Total13.1
 13.9
 27.0
 21.6
 48.6
Total12.5 14.2 26.7 21.3 48.0 
Our facilities include large industrial parks, ranging in size from approximately 100,000 to 5.74.3 million square feet in Brazil, China, India, and Mexico. We also have regional manufacturing operations, generally ranging in size from under 100,000 to approximately 2.7 million square feet in Austria, Brazil, Canada, China, Czech Republic, Denmark, Hungary, India, Indonesia, Ireland, Israel, Italy, Japan, Malaysia, Mexico, Thethe Netherlands, Poland, Romania, Singapore, Spain, Switzerland, Ukraine, the Ukraine

United Kingdom, and the United States. We also have smaller design and engineering centers, innovation centers and product introduction centers at a number of locations in the world's major industrial and electronics markets.
Our facilities are well maintained and suitable for the operations conducted. The productive capacity of our plants is adequate for current needs.
ITEM 3.    LEGAL PROCEEDINGS
For a description of our material legal proceedings, see note 1214 "Commitments and Contingencies" to the consolidated financial statements included under Item 8, which is incorporated herein by reference.
ITEM 4.    MINE SAFETY DISCLOSURES
Not applicable

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PART II
ITEM 5.    MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
MARKET AND SHAREHOLDER INFORMATION
Our ordinary shares are quoted on the Nasdaq Global Select Market under the symbol "FLEX."
As of May 13, 201916, 2022, there were 3,0532,890 holders of record of our ordinary shares. This does not include persons whose stock is in nominee or "street name" accounts through brokers.
DIVIDENDS
Since inception, we have not declared or paid any cash dividends on our ordinary shares. We currently do not have plans to pay any cash dividends in fiscal year 2020.2023.
CERTAIN TAXATION CONSIDERATIONS UNDER SINGAPORE LAW
Dividends.    Singapore does not impose a withholding tax on dividends. All dividends on our ordinary shares are not taxable in Singapore to shareholders, provided that any dividends are paid to shareholders outside of Singapore for this purpose and such dividends are not received or deemed to be received in Singapore by shareholders and are not derived by shareholders pursuant to any trade or business carried on in Singapore. Certain tax exemptions are available for foreign-sourced dividends received by Singapore tax residents, subject to conditions. Since inception, we have not declared nor paid any cash dividends on our ordinary shares, and we currently do not have plans to pay any cash dividends.
Gains on Disposal.    Under current Singapore tax law there is no tax on capital gains, and thus any profits from the disposal of shares are not taxable in Singapore unless the gains arising from the disposal of shares are income in nature and subject to tax, especially if they arise from activities which the Inland Revenue Authority of Singapore regards as the carrying on of a trade or business in Singapore (in which case, the profits on the sale would be taxable as trade or business profits rather than capital gains).
Shareholders who apply, or who are required to apply, the Singapore Financial Reporting Standard ("FRS") 39, FRS 109 or Singapore Financial Reporting Standard (International) 9 (“SFRS(I) 9”) (as the case may be) for the purposes of Singapore income tax may be required to recognize gains or losses (not being gains or losses in the nature of capital) in accordance with the provisions of FRS 39, FRS 109 or SFRS(I) 9 (as the case may be) (as modified by the applicable provisions of Singapore income tax law) even though no sale or disposal of shares is made.
Stamp Duty.    There is no stamp duty payable for holding shares, and no duty is payable on the issue of new shares. Singapore stamp duty is payable on a transfer of existing shares if there is an instrument of transfer executed in Singapore or if there is an instrument of transfer executed outside Singapore that is received in Singapore. In such situations, stamp duty is payable on the instrument of transfer of such shares at the rate of 0.2% of the consideration for, or market value of, such shares, whichever is higher. The stamp duty is borne by the purchaser unless there is an agreement to the contrary. If the instrument of transfer is executed outside of Singapore, the stamp duty must be paid only if the instrument of transfer is received in Singapore.
Estate Taxation.    Singapore estate duty was abolished for deaths occurring on or after February 15, 2008.
Tax Treaties Regarding Withholding.    There is no reciprocal income tax treaty between the U.S. and Singapore regarding withholding taxes on dividends and capital gains.
STOCK PRICE PERFORMANCE GRAPH
The following stock price performance graph and accompanying information is not deemed to be "soliciting material" or to be "filed" with the SEC or subject to Regulation 14A under the Securities Exchange Act of 1934 or to the liabilities of Section 18 of the Securities Exchange Act of 1934, and will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, regardless of any general incorporation language in any such filing.
The graph below compares the cumulative total shareholder return on our ordinary shares, the Standard & Poor's 500 Stock Index and a peer group comprised of Benchmark Electronics, Inc., Celestica Inc., Jabil Inc., and Sanmina Corporation.
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The graph below assumes that $100 was invested in our ordinary shares, in the Standard & Poor's 500 Stock Index and in the peer group described above on March 31, 20142017 and reflects the annual return through March 31, 2019,2022, assuming dividend reinvestment.
The comparisons in the graph below are based on historical data and are not indicative of, or intended to forecast, the possible future performances of our ordinary shares.



COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN
Flex, the S&P 500 Index, and Peer Group
chart-c4f1b043d381540b82a.jpgflex-20220331_g1.jpg
3/14 3/15 3/16 3/17 3/18 3/193/173/183/193/203/213/22
Flex Ltd.100.00
 137.23
 130.52
 181.82
 176.73
 108.23
Flex Ltd.100.00 97.20 59.52 49.85 108.99 110.42 
S&P 500 Index100.00
 112.73
 114.74
 134.45
 153.26
 167.81
S&P 500 Index100.00 113.99 124.82 116.11 181.54 209.94 
Peer Group100.00
 123.37
 111.90
 169.45
 144.64
 136.56
Peer Group100.00 85.36 80.59 68.24 131.48 148.91 
Prepared by Zacks Investment Research, Inc. Used with permission. All rights reserved. Copyright 1980-20191980-2022.
Index Data: Copyright Standard and Poor's, Inc. Used with permission. All rights reserved.
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Issuer Purchases of Equity Securities
The following table provides information regarding purchases of our ordinary shares made by us for the period from January 1, 20192022 through March 31, 2019.2022.
Period (2)Total Number
of Shares
Purchased (1)
Average Price
Paid per Share
Total Number of Shares
Purchased as Part of
Publicly Announced
Plans or Programs
Approximate Dollar Value
of Shares that May Yet
Be Purchased Under the
Plans or Programs
January 1 - February 4, 20222,900,386 $17.07 2,900,386 $551,406,982 
February 5 - March 4, 20223,263,494 17.07 3,263,494 495,708,750 
March 5 - March 31, 20227,900 15.43 7,900 495,586,831 
Total6,171,780  6,171,780  
Period (2)Total Number
of Shares
Purchased (1)
 Average Price
Paid per Share
 Total Number of Shares
Purchased as Part of
Publicly Announced
Plans or Programs
 Approximate Dollar Value
of Shares that May Yet
Be Purchased Under the
Plans or Programs
January 1 - January 25, 20191,058,740
 $8.03
 1,058,740
 $381,021,766
January 26 - March 1, 20192,245,925
 10.24
 2,245,925
 358,017,848
March 2 - March 31, 20193,270,091
 10.24
 3,270,091
 324,522,119
Total6,574,756
  
 6,574,756
  


(1)During the period from January 1, 2019 through March 31, 2019(1)    During the period from January 1, 2022 through March 31, 2022, all purchases were made pursuant to the program discussed below in open market transactions. All purchases were made in accordance with Rule 10b-18 under the Securities Exchange Act of 1934.




(2)    On August 4, 2021, our Board of Directors authorized repurchases of our outstanding ordinary shares for up to $1.0 billion. This is in accordance with the share purchase mandate whereby our shareholders approved a repurchase limit of 20% of our issued ordinary shares outstanding at the Annual General Meeting held on the same date as the Board authorization. As of March 31, 2022, shares in the aggregate amount of $495.6 million were available to be repurchased under the current plan.
(2)On August 16, 2018, our Board of Directors authorized repurchases of our outstanding ordinary shares for up to $500 million. This is in accordance with the share purchase mandate whereby our shareholders approved a repurchase limit of 20% of our issued ordinary shares outstanding at the Annual General Meeting held on the same date as the Board authorization. As of March 31, 2019, shares in the aggregate amount of $324,522,119 were available to be repurchased under the current plan.
RECENT SALES OF UNREGISTERED SECURITIES
None.
INCOME TAXATION UNDER SINGAPORE LAW
33
Dividends.    Singapore does not impose a withholding tax on dividends. All dividends are tax exempt to shareholders.

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Gains on Disposal.    Under current Singapore tax law there is no tax on capital gains, and thus any profits from the disposal of shares are not taxable in Singapore unless the gains arising from the disposal of shares are income in nature and subject to tax, especially if they arise from activities which the Inland Revenue Authority of Singapore regards as the carrying on of a trade or business in Singapore (in which case, the profits on the sale would be taxable as trade profits rather than capital gains).
Shareholders who apply, or who are required to apply, the Singapore Financial Reporting Standard 39 Financial Instruments—Recognition and Measurement ("FRS 39") for the purposes of Singapore income tax may be required to recognize gains or losses (not being gains or losses in the nature of capital) in accordance with the provisions of FRS 39 (as modified by the applicable provisions of Singapore income tax law) even though no sale or disposal of shares is made.
Stamp Duty.    There is no stamp duty payable for holding shares, and no duty is payable on the issue of new shares. When existing shares are acquired in Singapore, a stamp duty of 0.2% is payable on the instrument of transfer of the shares at market value. The stamp duty is borne by the purchaser unless there is an agreement to the contrary. If the instrument of transfer is executed outside of Singapore, the stamp duty must be paid only if the instrument of transfer is received in Singapore.
Estate Taxation.    The estate duty was abolished for deaths occurring on or after February 15, 2008. For deaths prior to February 15, 2008 the following rules apply:
If an individual who is not domiciled in Singapore dies on or after January 1, 2002, no estate tax is payable in Singapore on any of our shares held by the individual.
If property passing upon the death of an individual domiciled in Singapore includes our shares, Singapore estate duty is payable to the extent that the value of the shares aggregated with any other assets subject to Singapore estate duty exceeds S$600,000. Unless other exemptions apply to the other assets, for example, the separate exemption limit for residential properties, any excess beyond S$600,000 will be taxed at 5% on the first S$12,000,000 of the individual's chargeable assets and thereafter at 10%.
An individual shareholder who is a U.S. citizen or resident (for U.S. estate tax purposes) will have the value of the shares included in the individual's gross estate for U.S. estate tax purposes. An individual shareholder generally will be entitled to a tax credit against the shareholder's U.S. estate tax to the extent the individual shareholder actually pays Singapore estate tax on the value of the shares; however, such tax credit is generally limited to the percentage of the U.S. estate tax attributable to the inclusion of the value of the shares included in the shareholder's gross estate for U.S. estate tax purposes, adjusted further by a pro rata apportionment of available exemptions. Individuals who are domiciled in Singapore should consult their own tax advisors regarding the Singapore estate tax consequences of their investment.
Tax Treaties Regarding Withholding.    There is no reciprocal income tax treaty between the U.S. and Singapore regarding withholding taxes on dividends and capital gains.

ITEM 6.    SELECTED FINANCIAL DATA[RESERVED]
These historical results are not necessarily indicative of the results to be expected in the future. The following selected consolidated financial data set forth below was derived from our historical audited consolidated financial statements and is qualified by reference to, and should be read in conjunction with, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" and Item 8, "Financial Statements and Supplementary Data." On April 1, 2018, we adopted the new revenue standard and as a result we recognized the cumulative effect of initially applying the new revenue standard as an adjustment to the opening balance of retained earnings, as further described in note 2 to the consolidated financial statements included under Item 8. The comparative information has not been restated and continues to be reported under the accounting standards in effect at the time.
 Fiscal Year Ended March 31,
 2019 2018 2017 2016 2015
 (In millions, except per share amounts)
CONSOLIDATED STATEMENT OF OPERATIONS DATA: 
  
  
  
  
Net sales$26,211
 $25,441
 $23,863
 $24,419
 $26,148
Cost of sales24,594
 23,778
 22,303
 22,811
 24,603
Restructuring charges (3)99
 67
 39
 
 
Gross profit1,518
 1,596
 1,521
 1,608
 1,545
Selling, general and administrative expenses953
 1,019
 937
 955
 844
Intangible amortization74
 79
 81
 66
 32
Restructuring charges (3)14
 24
 11
 
 
Interest and other, net183
 123
 100
 84
 51
Other charges (income), net (1)110
 (170) 21
 48
 (53)
Income before income taxes182
 521
 371
 455
 671
Provision for income taxes89
 92
 51
 11
 70
Net income$93
 $429
 $320
 $444
 $601
Diluted earnings per share: 
  
  
  
  
Total$0.18
 $0.80
 $0.59
 $0.79
 $1.02



 As of March 31,
 2019 2018 2017 2016 2015
 (In millions)
CONSOLIDATED BALANCE SHEET DATA: 
  
  
  
  
Working capital (2)$1,506
 $1,902
 $1,883
 $1,743
 $1,986
Total assets13,499
 13,716
 12,593
 12,385
 11,653
Total long-term debt, excluding current portion2,422
 2,898
 2,891
 2,709
 2,026
Shareholders' equity2,972
 3,019
 2,678
 2,606
 2,396

(1)For fiscal years 2019, 2018 and 2017, refer to note 15 to the consolidated financial statements in Item 8, "Financial Statements and Supplementary Data" for further discussion.

During fiscal year 2016, the Company incurred non-cash losses of $47.7 million primarily due to a $26.8 million loss on the disposition of a non-strategic Western European manufacturing facility, which included a non-cash foreign currency translation loss of $25.3 million, and a $21.8 million loss from the impairment of a non-core investment offset by immaterial currency translation gains.


During fiscal year 2015, an amendment to a customer contract to reimburse a customer for certain performance provisions was executed which included the derecognition of a $55 million contractual obligation previously recognized during fiscal year 2014. Accordingly, the Company reversed this charge with a corresponding credit to other charges (income), net in the consolidated statement of operations. Additionally, during fiscal year 2015, the Company recognized a loss of $11 million in connection with the disposition of a manufacturing facility in Western Europe.

(2)Working capital is defined as current assets, less current liabilities.

(3)The Company initiated restructuring plans during fiscal years 2019, 2018 and 2017, refer to note 14 to the consolidated financial statements in Item 8, "Financial Statements and Supplementary Data" for further discussion.

ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This report on Form 10-KYou should read the following discussion and analysis of our financial condition and results of operations in conjunction with our consolidated financial statements and notes thereto included in Item 8, “Financial Statements and Supplementary Data.” In addition to historical consolidated financial information, the following discussion and analysis contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended,that involve risks, uncertainties, and Section 27A of the Securities Act of 1933, as amended. The words "expects," "anticipates," "believes," "intends," "plans" and similar expressions identify forward-looking statements. In addition, any statements which refer to expectations, projections or other characterizations of future events or circumstances are forward-looking statements. We undertake no obligation to publicly disclose any revisions toassumptions. Our actual results could differ materially from those anticipated by these forward-looking statements as a result of many factors. We discuss factors that we believe could cause or contribute to reflect events or circumstances occurring subsequent to filing this Form 10-K with the Securitiesthese differences below and Exchange Commission. These forward-looking statements are subject to risks and uncertainties, including, without limitation, those discussedelsewhere in this section and inreport, including those set forth under Item 1A, "Risk“Risk Factors." In addition, new risks emerge from time to time and it is not possible for management to predict all such risk factors or to assess the impact of such risk factors on our business. Accordingly, our future results may differ materially from historical results or from those discussed or implied by these forward-looking statements. Given these risks and uncertainties, the reader should not place undue reliance on these forward-looking statements.
OVERVIEW
We are a globally-recognized, providerthe diversified manufacturing partner of Sketch-to-Scale® services - innovative design, engineering, manufacturing, and supply chain services and solutions - from conceptual sketch to full-scale production. Wechoice that helps market-leading brands design, build and deliver innovative products that improve the world. Through the collective strength of a global workforce across approximately 30 countries with responsible, sustainable operations, we deliver advanced manufacturing solutions and manage complete packaged consumeroperate one of the most trusted global supply chains, supporting the entire product lifecycle with fulfillment, after-market, and enterprise products, from medical devices and connected automotive systems to sustainable lighting and cloud data center infrastructures, for companies of all sizes in various industries and end-markets, through our activities in the following segments:
High Reliability Solutions ("HRS"), which is comprised of our health solutions business, including surgical equipment, drug delivery, diagnostics, telemedicine, disposable devices, imaging and monitoring, patient mobility and ophthalmology; and our automotive business, including vehicle electrification, connectivity, autonomous, and smart technologies;
Industrial and Emerging Industries ("IEI"), which is comprised of energy including advanced metering infrastructure, energy storage, smart lighting, smart solar energy; and industrial, including semiconductor and capital equipment, office solutions, household industrial and lifestyle, industrial automation and kiosks;
Communications & Enterprise Compute ("CEC"), which includes our telecom business of radio access base stations, remote radio heads and small cells for wireless infrastructure; our networking business, which includes optical, routing, and switching products for data and video networks; our server and storage platforms for both enterprise and cloud-based deployments; next generation storage and security appliance products; and rack-level solutions, converged infrastructure and software-defined product solutions; and
Consumer Technologies Group ("CTG"), which includes our consumer-related businesses in IoT enabled devices, audio and consumer power electronics, mobile devices; and various supply chaincircular economy solutions for diverse industries including cloud, communications, enterprise, automotive, industrial, consumer computingdevices, lifestyle, healthcare, and printing devices.
These segments represent components of the Company for which separate financial information is available that is utilized on a regular basis by the Chief Operating Decision Maker (“CODM”)energy. Our segments are determined based on several factors, including the nature of products and services, the nature of production processes, customer base, delivery channels and similar economic characteristics.
DuringBeginning in the fourth quarter of fiscal year 2019, we announced that Revathi Advaithi was appointed CEO2022, as a result of the Company effective February 11, 2019. As partsale of her new rolecertain Series A preferred units in Nextracker LLC ("Nextracker LLC" or "Nextracker") to a third party and responsibilities,our continuing evaluation to separate the CEO alongNextracker business and consistent with certain direct reports that oversee operationshow our chief operating decision maker allocates resources, assesses performance and makes strategic and operational decisions, we report Nextracker as a separate operating and reportable segment. Nextracker was previously included in the Industrial reporting unit within the Flex Reliability Solutions segment. Our three operating and reportable segments are:
Flex Agility Solutions ("FAS"), which is comprised of the business, are now consideredfollowing end markets:
Communications, Enterprise and Cloud ("CEC"), including data infrastructure, edge infrastructure and communications infrastructure;
Lifestyle, including appliances, consumer packaging, floorcare, micro mobility and audio; and
Consumer Devices, including mobile and high velocity consumer devices.
Flex Reliability Solutions ("FRS"), which is comprised of the CODM. There is a possibility thatfollowing end markets:
Automotive, including next generation mobility, autonomous, connectivity, electrification, and smart technologies;
Health Solutions, including medical devices, medical equipment, and drug delivery; and
Industrial, including capital equipment, industrial devices, and renewables and grid edge.
Nextracker, the CODM will request changesleading provider of intelligent, integrated solar tracker and software solutions used in utility-scale and ground-mounted distributed generation solar projects around the

information that is regularly reviewed in determining how world. Nextracker's products enable solar panels to allocate resourcesfollow the sun’s movement across the sky and in assessing performance, which could eventually result in changes to our reportable segments.
Refer to note 19 to the consolidated financial statements in Item 8, "Financial Statements and Supplementary Data" for additional information on our operating segments.optimize plant performance.
Our strategy is to provide customers with a full range of cost competitive, vertically-integrated global supply chain solutions through which we can design, build, ship and service a complete packaged product for our customers. This enables our customers to leverage our supply chain solutions to meet their product requirements throughout the entire product life cycle.lifecycle.
Over the past few years, we have seen an increased level of diversification by many companies, primarily in the technology sector. Some companies that have historically identified themselves as software providers, Internet service providers or e-commerce retailers have entered the highly competitive and rapidly evolving technology hardware markets, such as mobile devices, home entertainment and wearable devices. This trend has resulted in a significant change in the manufacturing and supply chain solutions requirements of such companies. While the products have become more complex, the supply chain solutions required by such companies have become more customized and demanding, and it has changed the manufacturing and supply chain landscape significantly.
We use a portfolio approach to manage our extensive service offerings. As our customers change the way they go to market, we have the capability to reorganize and rebalance our business portfolio in order to align with our customers' needs and requirements in an effort to optimize operating results. The objective of our business model is to allow us to be flexible and redeploy and reposition our assets and resources as necessary to meet specific customer'scustomers' supply chain solutionssolution needs across all the markets we serve and earn a return on our invested capital above the weighted average cost of that capital.
During the past several years, we have evolved our long-term portfolio towards a mix
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Table of businesses which possess longer product life cycles and higher segment operating margins such as reflected in our IEI and HRS businesses. We have expanded our design and engineering relationships through our product innovation centers and global design centers.Contents
During fiscal year 2019,2021, in order to further support our strategy and build a sustainable organization, and after considering that the economic recovery from the COVID-19 global pandemic will be slower than anticipated, we took action to revise our go-to-market strategy within our CTG business, where we are actively managing under-performing accountsidentified and are focused on partnering with well-funded, leading multi-national brands that control multiple categoriesengaged in certain structural changes. See additional discussion regarding these restructuring actions below under "Results of products and have regional demand requirements. We expect this transition to continue in fiscal year 2020 which will continue to put downward pressure on the segment operating margins until fully transitioned. During the fiscal year 2019, we also completed the wind down of our NIKE operations in Mexico and concurrently streamlined our third-party investments. In addition, we developed a measured and sustainable operating plan for India and as of March 31, 2019, we have completed the majority of our regional build-out. We continue to invest in the capital expenditures necessary to support underlying higher margin, long-term programs in our IEI and HRS businesses.Operations - Restructuring charges".
We believe that our continued business transformation is strategically positioning us to take advantage of the long-term, future growth prospects for outsourcing of advanced manufacturing capabilities, design and engineering services and after-market services.
Update on the Impact of COVID-19 on our Business
With the second wave of the global pandemic including follow-on variants of COVID-19, there have been renewed disease control measures being taken to limit the spread including movement bans and shelter-in-place orders. Although not materially impacting our results for the fourth quarter of fiscal year 2022, most recently, with the lockdowns in China, we have also been experiencing temporary plant closures and/or restrictions at certain of our manufacturing facilities in China. We continue to closely monitor the situation in all the locations where we operate. Our priority remains the welfare of our employees. In addition, our end markets continue to be impacted by the global supply chain disruptions. Component shortages and logistical constraints are pervasive across the entire value chain. COVID-19 related restrictions also contributed to a declining workforce, including at ports and warehouses, as well as creating driver shortages around the world. We expect persistent waves of COVID-19 to remain a headwind into the near future. Component shortages and significantly increased logistic costs are also expected to persist at least in the near future as we are continuing to see increasing supply constraints and costs. We continue to carefully monitor potential supply chain disruptions due to ongoing tightness in the overall component environment. Refer to “Risk Factors - The ongoing COVID-19 pandemic has materially and adversely affected our business and results of operations. The duration and extent to which it will continue to adversely impact our business and results of operations remains uncertain and could be material.
We are continuously evaluating our capital structure in response to the current environment and expect that our current financial condition, including our liquidity sources are adequate to fund future commitments. See additional discussion in the Liquidity and Capital Resources section below.
Russian Invasion of Ukraine
We are monitoring and responding to the escalating conflict in Ukraine and the associated sanctions and other restrictions. As of the date of this report, there is no material impact to our business operations and financial performance in Ukraine. The full impact of the conflict on our business operations and financial performance remains uncertain and will depend on future developments, including the severity and duration of the conflict and its impact on regional and global economic conditions. We will continue to monitor the conflict and assess the related restrictions and other effects and pursue prudent decisions for our team members, customers, and business.
Other Developments
On April 28, 2021, we announced that we confidentially submitted a draft registration statement on Form S-1 with the SEC relating to the proposed initial public offering of Nextracker's Class A common stock. The initial public offering and its timing are subject to market and other conditions and the SEC’s review process, and there can be no assurance that we will proceed with such offering or any alternative transaction. Refer to "Risk Factors - We are pursuing alternatives for our Nextracker business, including a full or partial separation of the business, through an initial public offering of Nextracker or otherwise, which may not be consummated as or when planned or at all, and may not achieve the intended benefits."
On February 1, 2022, we sold Series A Preferred Units representing a 16.7% interest in Nextracker to TPG Rise Flash, L.P., a Delaware limited partnership, which is managed or advised by TPG Rise Climate, TPG, Inc.’s dedicated renewables and climate investing fund (“TPG Rise”), for an aggregate purchase price of $500 million. The sale of the 16.7% interest in Nextracker reflects an implied value for Nextracker as of the date of the sale of $3.0 billion. See note 7 to the consolidated financial statements in Item 8, “Financial Statements and Supplementary Data” for further information.
This Annual Report on Form 10-K does not constitute an offer to sell or a solicitation of an offer to buy securities, and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of that jurisdiction.
Business Overview
We are one of the world's largest providers of global supply chain solutions, with revenues of $26.2$26.0 billion in the fiscal year 2019.ended March 31, 2022. We have established an extensive network of manufacturing facilities in the world's major
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consumer and enterprise markets (Asia, the Americas, and Europe) to serve the growing outsourcing needs of both multinational and regional customers. We design, build, ship, and service consumer and enterprise products for our customers through a network of over 100 facilities in approximately 3530 countries across four continents. We also provide intelligent, integrated solar tracker and software solutions used in utility-scale and ground-mounted distributed generation solar projects around the world. As of March 31, 2019,2022, our total manufacturing capacity was approximately 27 million square feet. In fiscal year 2019, our net sales in Asia, the Americas and Europe represented approximately 44%, 38% and 18%, respectively, of our total net sales, based on the location of the manufacturing site. On April 1, 2018, we adopted a new revenue standard and as a result we recognized a cumulative effect of adoption as an adjustment to the opening balance of retained earnings, as further described in note 2 to the consolidated financial statements included under Item 8. The comparative information has not been restated and continues to be reported under the accounting standards in effect at the time. The following tables set forth the relative percentages and dollar amounts of net sales by region and by country, and net property and equipment, by country, based on the location of our manufacturing sites:

 Fiscal Year Ended March 31,
Net sales:2019 2018 2017
 (In millions)
China$6,649
 25% $7,450
 29% $7,214
 30%
Mexico4,539
 17% 4,362
 17% 4,076
 17%
U.S.3,106
 12% 2,860
 11% 2,560
 11%
Brazil2,181
 8% 2,578
 10% 1,908
 8%
Malaysia1,996
 8% 2,005
 8% 2,267
 10%
India1,805
 7% 609
 2% 511
 2%
Other5,935
 23% 5,577
 23% 5,327
 22%
 $26,211
   $25,441
  
 $23,863
  

Amountssites (amounts may not sum due to rounding.rounding):
 Fiscal Year Ended March 31,
20222021
 (In millions)
Net sales by region:
Americas$10,839 42 %$9,672 40 %
Asia9,601 37 %9,326 39 %
Europe5,601 21 %5,126 21 %
$26,041 $24,124 
Net sales by country:
China$6,146 24 %$6,147 25 %
Mexico5,059 19 %4,413 18 %
U.S.3,690 14 %3,648 15 %
Brazil2,022 %1,554 %
Malaysia1,866 %1,563 %
Hungary1,230 %1,313 %
Other6,028 23 %5,486 25 %
$26,041 $24,124  
 Fiscal Year Ended March 31,
Property and equipment, net:2019 2018
 (In millions)
Mexico$537
 23% $587
 26%
China523
 22% 492
 22%
U.S.361
 15% 305
 14%
India219
 9% 78
 3%
Hungary103
 4% 150
 7%
Malaysia138
 6% 153
 7%
Other454
 21% 475
 21%
 $2,336
   $2,240
  


Fiscal Year Ended March 31,
20222021
(In millions)
Property and equipment, net:
Mexico$626 29 %$553 26 %
U.S.354 17 %361 17 %
China299 14 %331 16 %
India129 %166 %
Hungary118 %105 %
Malaysia110 %106 %
Other489 23 %475 23 %
$2,125 $2,097 
Amounts may not sum due to rounding.
We believe that the combination of our extensive open innovation platform solutions, design and engineering services, advanced supply chain management solutions and services, significant scale and global presence, and manufacturing campuses in low-cost geographic areas provide us with a competitive advantage and strong differentiation in the market for designing, manufacturing and servicing consumer and enterprise products for leading multinational and regional customers. Specifically, we have launched multiple product innovation centers ("PIC") focused exclusively on offeringoffer our customers the ability to simplify their global product development, manufacturing process, and after salesafter-sales services, and enable them to meaningfully accelerate their time to market and cost savings.
Our operating results are affected by a number of factors, including the following:
the impacts on our business due to component shortages, disruptions in transportation or other supply chain related constraints including as a result of the COVID-19 global pandemic;
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the effects of the COVID-19 global pandemic on our business and results of operations;

changes in the macro-economic environment and related changes in consumer demand;


the mix of the manufacturing services we are providing, the number, size, and complexity of new manufacturing programs, the degree to which we utilize our manufacturing capacity, seasonal demand, shortages of components and other factors;


the effects on our business when our customers are not successful in marketing their products, or when their products do not gain widespread commercial acceptance;


our ability to achieve commercially viable production yields and to manufacture components in commercial quantities to the performance specifications demanded by our customers;


the effects that current credit and market conditions (including as a result of the COVID-19 global pandemic and the ongoing conflict between Russia and Ukraine) could have on the liquidity and financial condition of our customers and suppliers, including any impact on their ability to meet their contractual obligations;

the effects on our business due to certain customers' products having short product life cycles;lifecycles;


our customers' ability to cancel or delay orders or change production quantities;



our customers' decisions to choose internal manufacturing instead of outsourcing for their product requirements;


our exposure to financially troubled customers;

integration of acquired businesses and facilities;


increased labor costs due to adverse labor conditions in the markets we operate;


the impacts on our business due to component shortages or other supply chain related constraints;

changes in tax legislation; and


changes in trade regulations and treaties.
The attractiveness of our services to customers and our ability to conduct business with certain customers can be affected by changes in U.S. and other countries' trade policies. In 2018, the U.S. imposed tariffs on a large variety of products of Chinese origin. The U.S. government has also indicated a readiness to further expand the scope of the tariffs on Chinese goods if negotiations are not successful, and most recently, effective May 10, 2019, increased tariffs on $200 billion of Chinese goods to 25%. Further, on May 15, 2019, President Trump issued an executive order designed to secure the information and communications technology and services supply chain, which would restrict the acquisition or use in the United States of information and communications technology or services designed, developed, manufactured, or supplied by persons owned by, controlled by, or subject to the jurisdiction or direction of foreign adversaries. The executive order is subject to implementation by the Secretary of Commerce and applies to contracts entered into prior to the effective date of the order. In addition, the U.S. Commerce Department has implemented additional restrictions and may implement further restrictions that would affect conducting business with certain Chinese companies. Depending upon their duration and implementation, as well as our ability to mitigate their impact, these tariffs, the executive order and its implementation and other regulatory actions could materially affect our business, including in the form of increased cost of goods sold, decreased margins, increased pricing for customers, and reduced sales.
We also are subject to other risks as outlined in Item 1A, "Risk Factors".
Net sales for fiscal year 20192022 increased 3%approximately 8%, or $0.8$1.9 billion, to $26.2$26.0 billion from the prior year. The increase in sales was notable in all three segments. Net sales for our FAS segment increased $0.5 billion, or 4.0%, from the prior year, driven by an increase in our Lifestyle business, and to a lesser extent, an increase in our CEC business. These increases were driven by a lesser impact from COVID-19 production pressure during the current year versus the prior year, coupled with new ramps, customer expansions and continued recoveries in consumer spending, offset to some extent by the scarcity of components and raw material and logistics constraints noted above. The increases noted in FAS during fiscal year 2022 were partially offset by a decrease in our Consumer Devices business primarily due to component shortages and planned contract completions. Net sales for our FRS segment increased $1.1 billion, or 12%, from the prior year, primarily driven by an increase in sales from our Industrial business, as a result of customer ramps and strong demand in EV charging and renewables, semicap, and robotics, coupled with incremental revenue from the Anord Mardix acquisition. In addition, net sales for our Automotive business increased due to new programs during fiscal year 2022 for our next generation mobility portfolio and recovery from the depressed sales from factory shutdowns in the first quarter of fiscal year 2021. The increase in our Automotive business was partially constrained by component shortages and OEM plant shutdowns during fiscal year 2022. Net sales for our Nextracker segment increased $0.3 billion, or 22.0%, from the prior year, primarily driven by additional tracker projects, most notably outside the United States. Our fiscal year 2022 gross profit totaled $1.9 billion, representing an increase of $0.2 billion, or 15%, from the prior year. The increase was primarily due to a $0.6 billion increasedriven by overall stronger cost discipline focused on driving further productivity improvements, coupled with continued improvement in the mix of our CEC segmentbusiness, lower restructuring charges in the current fiscal year, benefits from prior restructuring activities and a $0.2 billion increaselower direct and incremental impact from COVID-19, coupled with the stronger demand in our IEI segment. Our fiscal year 2019 gross profit totaled $1.5 billion, representing a decrease of $78 million, or 5%, frommultiple end markets compared to the prior year which is primarily driven by an incremental increase of $32 million of restructuring charges, coupled with approximately $47 million of additional charges related to distressed customers that were included in cost of sales in fiscal year 2019. These incremental charges were part of our targeted actions to optimize our business portfolio, most notably within CTG, as we eliminated certain non-core activities and repositioned ourselves to align with go-forward strategies. The decline in gross margin is also due to the mix of revenues included in our portfolio most notably a decline in revenues from our automotive products and services within HRS which carry higher gross profit margins. Increased revenues from our ramping businesses in India further impacted the decline in gross profit margin from the prior year as the new programs were pressured below our average margins during the ramp. period. Our net income totaled $93 million,$0.9 billion, representing a decreasean increase of $335 million,$0.3 billion, or 78%53%, compared to fiscal year 2018. The decrease in net income during fiscal year 2019 is primarily2021, due to the same factors explained above in addition to the recognition of $193along with an approximately $150 million of charges primarily for the impairment of certain of our investments, including our investment in Elementum SCM (Cayman) Ltd ("Elementum"), offset by an $87 millionnon-cash gain from the deconsolidation of Bright Machines (formerly known as AutoLab AI). We also recognized a $152 million gain from the deconsolidation of Elementumrecorded in fiscal year 2018, which contributed further2022 related to the decreasecertain tax credits in net income from fiscal year 2018 to 2019. Refer toBrazil (See note 214 to the consolidated financial statements in Item 8, "Financial Statements and Supplementary Data" for detailsfurther information).
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Table of the investment impairments and the deconsolidation of Bright Machines, respectively.Contents
Cash usedprovided by operations in operations decreasedcreased by approximately $0.9 billion to $3.0a cash inflow of $1.0 billion for fiscal year 20192022 compared with $3.9a cash inflow of $0.1 billion for fiscal year 20182021 primarily due to a lower level ofdriven by the $0.3 billion increase in net income and $0.6 billion increase in cash collections on deferred purchase price being reclassed to investing activities offsetprovided by elevated levels of investment required to support the business growthoperating assets and operating through a more constrained inventory marketplace in fiscal year 2019.liabilities. Our net working capital defined("NWC") is calculated as current quarter accounts receivable, net of allowance for doubtful accounts, adding back the reduction in accounts receivable resulting from non-cash accounts receivable sales, plus inventories and contract assets, less accounts payable, was redefined upon the adoption of ASC 606 (as further described in note 2 to the consolidated financial statements in Item 8, "Financial Statements and Supplementary Data"), to include contract assets on a going forward basis.payable. Our net working capital as a percentage of annualized sales for fiscal year 20192022 increased by 0.3% to 6.7%15.4% from 11.5% in the prior year. Upon adoptionyear as a direct result of Accounting Standard Update (ASU) 2016-15 during the first quarter of fiscal yearelevated inventory levels due to component shortages and logistics constraints.

2019, cash collections on deferred purchase price from our ABS programs that were previously classified as operating cash inflows are now classified as cash flows from investing activities. Refer to note 2 to the consolidated financial statements in Item 8, "Financial Statements and Supplementary Data" for further description on the ASU.
As a result, we redefined ourWe believe adjusted free cash flow is an important liquidity metric because it measures, during a given period, the amount of cash generated that is available to repay debt obligations, make investments, fund acquisitions, repurchase company shares and for certain other activities. Our adjusted free cash flow is defined as cash from operating activities, plus cash collections of deferred purchase price,operations, less net purchases of property and equipment in order to present freeadjusted cash flows on a consistent basis for investor transparency. We also excluded the reductionimpact to operating cash flows related to certain vendor programs that is required for U.S. GAAP presentation as well as cash outflows related to repayment of the outstanding balance of our asset-backed securitization ("ABS") programs in fiscal year 2021 as we utilized proceeds from debt issuance to replace funding from the ABS programs for working capital purposes. Our adjusted free cash flow calculation. Free cash flow was $3 million$0.6 billion and $0.7 billion for fiscal year 2019 compared to $236 million for fiscal year 2018. The decrease in free cash flow is primarily due to increased capital expenditures in fiscal year 2019 as we built out our regional capacity in Indiayears 2022 and continued to expand our capacity and capability in support of our expanding IEI and HRS businesses, as well as increased inventory levels due to a more constrained inventory marketplace and higher business levels.2021, respectively. Refer to the Liquidity and Capital Resources section for the adjusted free cash flows reconciliation to ourthe most directly comparable GAAP financial measure of cash flows from operations. Cash used in investing activities increased by approximately $0.7 billion to a cash outflow of $1.0 billion for fiscal year 2022, compared with a cash outflow of $0.2 billion for fiscal year 2021, primarily due to $0.5 billion of cash paid for the acquisition of Anord Mardix in December 2021, net of cash acquired. Cash provided by investingfinancing activities decreased by approximately $458 million$0.5 billion to $3.3a cash inflow of $0.3 billion for fiscal year 2019, compared with $3.7 billion for fiscal year 2018, primarily due lower cash collection on deferred purchase price and higher capital expenditures as described above. Cash used in financing activities totaled $30 million during fiscal year 2019, which decreased by approximately $158 million from $188 million2022, compared with a cash inflow of $0.7 billion in the prior year, primarily due to higher net proceeds from bank borrowings and long-term debtdriven by $0.5 billion of additional cash paid for the repurchase of our ordinary shares in the current fiscal year 2019.year.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP" or "GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Due to the COVID-19 pandemic and the ongoing conflict between Russia and Ukraine, there has been and we expect there will continue to be uncertainty and disruption in the global economy and financial markets. We have made estimates and assumptions taking into consideration certain possible impacts due to the COVID-19 pandemic and the Russian invasion of Ukraine. These estimates may change, as new events occur, and additional information is obtained. Actual results may differ from those estimates and assumptions.
We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our consolidated financial statements. For further discussion of our significant accounting policies, refer to note 2 to the consolidated financial statements in Item 8, "Financial Statements and Supplementary Data."
Revenue Recognition
In determining the appropriate amount of revenue to recognize, we apply the following steps: (i) identify the contracts with the customers; (ii) identify performance obligations in the contracts; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations per the contracts; and (v) recognize revenue when (or as) we satisfy a performance obligation. Further, we assess whether control of the product or services promised under the contract is transferred to the customer at a point in time (PIT) or over time (OT). We are first required to evaluate whether our contracts meet the criteria for OT recognition. We have determined that for a portion of our contracts, we are manufacturing products for which there is no alternative use (due to the unique nature of the customer-specific product and IPintellectual property restrictions) and we have an enforceable right to payment including a reasonable profit for work-in-progress inventory with respect to these contracts. For certain other contracts, the Company’s performance creates and enhances an asset that the customer controls as the Company performs under the contract. As a result, revenue is recognized under these contracts OT based on the cost-to-cost method as it best depicts the transfer of control to the customer measured based on the ratio of costs incurred to date as compared to the total estimated costs at completion of the performance obligation. For all other contracts that do not meet these criteria, we recognize revenue when we have transferred control of the related manufactured products which generally occurs upon delivery and passage of title to the customer. Refer to notes 2 and 3note 4 to the consolidated financial statements in Item 8, "Financial Statements and Supplementary Data" for further details.
Customer Contracts and Related Obligations
Certain of our customer agreements include potential price adjustments which may result in variable consideration. These price adjustments include, but are not limited to, sharing of cost savings, committed price reductions, material margins earned over the period that are contractually required to be paid to the customers, rebates, refunds tied to performance metrics such as
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on-time delivery, and other periodic pricing resets that may be refundable to customers. We estimate the variable consideration related to these price adjustments as part of the total transaction price and recognize revenue in accordance with the pattern applicable to the performance obligation, subject to a constraint. We constrain the amount of revenues recognized for these contractual provisions based on our best estimate of the amount which will not result in a significant reversal of revenue in a future period. We determine the amounts to be recognized based on the amount of potential refunds required by the contract, historical experience and other surrounding facts and circumstances. Refer to note 24 to the consolidated financial statements in Item 8, "Financial Statements and Supplementary Data" for further details.
Customer Credit Risk

We have an established customer credit policy through which we manage customer credit exposures through credit evaluations, credit limit setting, monitoring, and enforcement of credit limits for new and existing customers. We perform ongoing credit evaluations of our customers' financial condition and make provisions for doubtful accounts based on the outcome of those credit evaluations. We evaluate the collectability of accounts receivable based on specific customer circumstances, current economic trends, historical experience with collections and the age of past due receivables. To the extent we identify exposures as a result of customer credit issues, we also review other customer related exposures, including but not limited to inventory and related contractual obligations.
Restructuring Charges
We recognize restructuring charges related to our plans to close or consolidate excess manufacturing facilities and rationalize administrative functions and to realign our corporate cost structure. In connection with these activities, we recognize restructuring charges for employee termination costs, long-lived asset impairment and other exit-related costs.
The recognition of these restructuring charges requires that we make certain judgments and estimates regarding the nature, timing and amount of costs associated with the planned restructuring activity. To the extent our actual results differ from our estimates and assumptions, we may be required to revise the estimates of future liabilities, requiring the recognition of additional restructuring charges or the reduction of liabilities already recognized. Such changes to previously estimated amounts may be material to the consolidated financial statements. At the end of each reporting period, we evaluate the remaining accrued balances to ensure that no excess accruals are retained, and the utilization of the provisions are for their intended purpose in accordance with developed exit plans.
Refer to note 1416 to the consolidated financial statements in Item 8, "Financial Statements and Supplementary Data" for further discussion of our restructuring activities.
Inventory Valuation
Our inventories are stated at the lower of cost (on a first-in, first-out basis) or net realizable value. Our industry is characterized by rapid technological change, short-term customer commitments and rapid changes in demand. We purchase our inventory based on forecasted demand, and we estimate write downs for excess and obsolete inventory based on our regular reviews of inventory quantities on hand, and the latest forecasts of product demand and production requirements from our customers. If actual market conditions or our customers' product demands are less favorable than those projected, additional write downs may be required. In addition, unanticipated changes in the liquidity or financial position of our customers and/or changes in economic conditions may require additional write downs for inventories due to our customers' inability to fulfill their contractual obligations with regards to inventory procured to fulfill customer demand.
Valuation of Private Company Investments
We assess our investments for impairment whenever events or changes in circumstances indicate that the assets may be impaired. The factors we consider in our evaluation of potential impairment of our investments, include, but are not limited to a significant deterioration in the earnings performance or business prospects of the investee, or factors that raise significant concerns about the investee’s ability to continue as a going concern, such as negative cash flows from operation or working capital deficiencies. The carrying value of certain of our investments are individually material, and thus there is the potential for material charges in future periods if we determine that those investments are impaired.
During the last half of fiscal year 2019, the Company reassessed its strategy with respect Refer to its investment portfolio. As a result of the change in the Company's strategy and duenote 2 to market valuation changes, the Company recognized an aggregate net charge related to investment impairments and dispositions of approximately $193 million for the fiscal year ended March 31, 2019, which is recorded in other charges (income), net on the consolidated statementfinancial statements in Item 8, "Financial Statements and Supplementary Data" for further discussion of operations. The aggregate charge was primarily driven by write-downs of the Company's investment positions in a non-core cost method investment and Elementum as well as other investment impairments that were individually immaterial.our investments.
Carrying Value of Long-Lived Assets
We review property and equipment and acquired amortizable intangible assets for impairment at least annually and whenever events or changes in circumstances indicate that the carrying amount of the asset group may not be recoverable. An impairment loss is recognized when the carrying amount of these long-lived assetsthe asset group exceeds theirits fair value. Recoverability of property and equipment and acquired amortizable intangible assets are measured by comparing their carrying amount to the projected cash flows the assets are expected to generate. If such assetsasset groups are determined to be impaired, the impairment loss
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recognized, if any, is the amount by which the carrying amount of the property and equipment and acquired amortizable intangible assets exceeds fair value. Our judgments regarding projected cash flows for an extended period of time and the fair value of assets may be impacted by changes in market conditions, the general business environment and other factors.factors including future developments of the COVID-19 pandemic and the ongoing conflict between Russia and Ukraine, which remain highly uncertain and unpredictable. To the extent

our estimates relating to cash flows and fair value of assets change adversely we may have to recognize additionalmaterial impairment charges in the future.
Goodwill
Goodwill is tested for impairment on an annual basis and whenever events or changes in circumstances indicate that the carrying amount of goodwill may not be recoverable. Recoverability of goodwill is measured at the reporting unit level by comparing the reporting unit's carrying amount, including goodwill, to the fair value of the reporting unit, which is measured based upon, among other factors, market multiples for comparable companies as well as a discounted cash flow analysis. These approaches use significant unobservable inputs, or Level 3 inputs, as defined by the fair value hierarchy and require us to make various judgmental assumptions about sales, operating margins, growth rates and discount rates which consider our budgets, business plans and economic projections, and are believed to reflect market participant views. Some of the inherent estimates and assumptions used in determining fair value of the reporting units are outside the control of management, including interest rates, cost of capital, tax rates, market EBITDA comparables and credit ratings. While we believe we have made reasonable estimates and assumptions to calculate the fair value of the reporting units, it is possible a material change could occur. If our actual results are not consistent with our estimates and assumptions used to calculate fair value, it could result in material impairments of our goodwill. During fiscal year 2019, we adopted ASU 2017-04 "Simplifying the Test for Goodwill Impairment", which simplifies the subsequent measurement of goodwill by eliminating step 2 from the goodwill impairment test. The ASU did not have a material impact to Flex's financial position during the period (ReferRefer to note 2 to the consolidated financial statements in Item 8, "Financial Statements and Supplementary Data" for further detail).
We performeddetail on our goodwill impairment assessment on January 1, 2019 and determined that no impairment existed as of the date of the impairment test because the fair value of each one of our reporting units exceeded its respective carrying value. As of the date of the impairment test, all reporting units' fair values were 25% or more, over their respective carrying values, with the exception of the CTG reporting unit which was 22% in excess of its carrying value. The estimated future results for CTG used in the impairment analysis reflect our revised strategy including the wind down of our NIKE operations in Mexico, further restrictions on capital expenditures related to our expansion into India and our focus on partnering with well-funded, leading multi-national brands that control multiple categories of products and have regional demand requirements. If we are not successful in driving improved results in our CTG segment it is reasonably possible that material goodwill impairment charges could be recorded in future periods.goodwill.
Contingent Liabilities
We may be exposed to certain liabilities relating to our business operations, acquisitions of businesses and assets and other activities. We make provisions for such liabilities when it is probable that the settlement of the liability will result in an outflow of economic resources or the impairment of an asset. We make these assessments based on facts and circumstances that may changechange in the future resulting in additional expenses.
Refer to note 1214 to the consolidated financial statements in Item 8, "Financial Statements and Supplementary Data" for further discussion of our contingent liabilities.
Redeemable Noncontrolling Interest
Interest held by a third party in a consolidated majority-owned subsidiary is presented as noncontrolling interest, which represents the noncontrolling equity holder’s interest in the underlying net assets of our consolidated majority-owned subsidiary. Noncontrolling interest, where we may be required to repurchase the noncontrolling interest under a contractual redemption requirement, is reported in the consolidated balance sheets between liabilities and equity, as redeemable noncontrolling interest (“RNCI”). The carrying value of the RNCI should not be accreted or adjusted to redemption value unless it becomes probable that the Series A Units will become redeemable. Refer to note 7 to the consolidated financial statements in Item 8, "Financial Statements and Supplementary Data" for further discussion of our RNCI.
Income Taxes
Our deferred income tax assets represent temporary differences between the carrying amount and the tax basis of existing assets and liabilities, which will result in deductible amounts in future years, including net operating loss carry forwards. Based on estimates, the carrying value of our net deferred tax assets assumes that it is more likely than not that we will be able to generate sufficient future taxable income in certain tax jurisdictions to realize these deferred income tax assets. Our judgments regarding future profitability may change due to future market conditions, changes in U.S. or international tax laws and other factors. If these estimates and related assumptions change in the future, we may be required to increase or decrease our valuation allowance against deferred tax assets previously recognized, resulting in additional or lesser income tax expense.
We are regularly subject to tax return audits and examinations by various taxing jurisdictions and around the world, and there can be no assurance that the final determination of any tax examinations will not be materially different than that which is reflected in our income tax provisions and accruals. Should additional taxes be assessed as a result of a current or future examination, there could be a material adverse effect on our tax position, operating results, financial position and cash flows. Refer to note 1315 to the consolidated financial statements in Item 8, "Financial Statements and Supplementary Data" for further discussion of our tax position.

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RESULTS OF OPERATIONS
The following table sets forth, for the periods indicated, certain statements of operations data expressed as a percentage of net sales.sales (amounts may not sum due to rounding). The financial information and the discussion below should be read in conjunction with the consolidated financial statements and notes thereto included in Item 8, "Financial Statements and Supplementary Data." As further discussed in note 1 and note 21 to the consolidated financial statement in Item 8, we revised our reportable segments in the fourth quarter of fiscal year 2022 to reflect Nextracker as a separate reportable segment in addition to FRS and FAS. There was no change to our consolidated financial statements. Additionally, as further discussed in note 2 to the consolidated financial statement in Item 8, the prior year amounts related to interest expense (income), net are now presented separately under interest, net, and the remaining balances under interest and other, net have been reclassified to other charges (income), net within the consolidated statements of operations. We also elected to include operating income as a subtotal in the consolidated statements of operations. For comparability purposes, the prior periods have been recast to conform to the current presentation. The reclassifications had no effect on the previously reported results of operations.
For a discussion of our results of operations for the fiscal year ended March 31, 2021 compared to the fiscal year ended March 31, 2020, refer to Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the fiscal year ended March 31, 2021.
The data below, and discussion that follows, represents our results from operations. On April 1, 2018, we adopted the new revenue standard and as a result we recognized the cumulative effect of initially applying the new revenue standard as an adjustment to the opening balance of retained earnings, as further described in note 2 to the consolidated financial statements included under Item 8. The comparative information has not been restated and continues to be reported under the accounting standards in effect at the time.
 Fiscal Year Ended
March 31,
 20222021
Net sales100.0 %100.0 %
Cost of sales92.5 92.6 
Restructuring charges0.1 0.4 
Gross profit7.4 7.0 
Selling, general and administrative expenses3.4 3.4 
Intangible amortization0.3 0.3 
Restructuring charges— 0.1 
  Operating income3.7 3.2 
Interest, net0.6 0.6 
Other charges (income), net(0.9)(0.3)
Income before income taxes4.0 2.9 
Provision for income taxes0.4 0.4 
Net income3.6 %2.5 %
Net income attributable to redeemable noncontrolling interest— — 
Net income attributable to Flex Ltd.3.6 %2.5 %
 Fiscal Year Ended
March 31,
 2019 2018 2017
Net sales100.0% 100.0 % 100.0%
Cost of sales93.8
 93.5
 93.5
Restructuring charges0.4
 0.3
 0.2
Gross profit5.8
 6.2
 6.3
Selling, general and administrative expenses3.6
 4.0
 3.9
Intangible amortization0.3
 0.3
 0.3
Restructuring charges0.1
 0.1
 
Interest and other, net0.7
 0.5
 0.4
Other charges (income), net0.4
 (0.7) 0.1
Income before income taxes0.7
 2.0
 1.6
Provision for income taxes0.3
 0.4
 0.2
Net Income0.4% 1.6 % 1.4%


Net sales
Net sales during fiscal year 2019 totaled $26.2 billion, representing an increase of $0.8 billion, or 3%, from $25.4 billion during fiscal year 2018. The overall increase in sales was driven by increases in three of our segments offset by a decline in sales in our CTG segment. Net sales was higher across all our regions during fiscal year 2019, with increases of $0.5 billion in Europe, $0.3 billion in Asia, and to a lesser extent, $12 million in the Americas.
Net sales during fiscal year 2018 totaled $25.4 billion, representing an increase of $1.5 billion, or 7%, from $23.9 billion during fiscal year 2017. During fiscal year 2018, the increase in net sales was primarily driven by an increase of $1.3 billion in the Americas and to a lesser extent, $0.2 billion in Asia with Europe remaining relatively consistent from the prior year.
The following table sets forth our net sales by segmentssegment, and their relative percentages. Historical information has been recast to reflect realignment of customers and/or products between segments:percentages:
Fiscal Year Ended March 31,
20222021
Net sales:(In millions)
Flex Agility Solutions$14,027 54 %$13,493 56 %
Flex Reliability Solutions10,603 41 %9,495 39 %
Nextracker1,458 %1,195 %
Intersegment eliminations(47)— %(59)— %
$26,041 $24,124 
 Fiscal Year Ended March 31,
Segments:2019 2018 2017
 (In millions)
High Reliability Solutions$4,829
 18% $4,770
 19% $4,149
 17%
Industrial & Emerging Industries6,183
 24% 5,972
 24% 4,968
 21%
Communications & Enterprise Compute8,336
 32% 7,729
 30% 8,384
 35%
Consumer Technologies Group6,863
 26% 6,970
 27% 6,362
 27%
 $26,211
  
 $25,441
  
 $23,863
  


Net sales duringfor the fiscal year 2019 increased $0.6ended 2022 totaled $26.0 billion, representing an increase of $1.9 billion, or approximately 8% in, from $24.1 billion for the fiscal year ended 2021. Net sales for our CEC segment driven by momentum from our cloud and data center business as well as the expansion of network infrastructure programs to support 4G and 5G technology, offset by declines in our data networking business due to weakness with some legacy product lines. Our IEI segmentFAS segment increased $0.2$0.5 billion, or 4%, which wasfrom the
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prior year, mainly drivendue to an increase in net sales of 14% in our Lifestyle business and 3% in our CEC business resulting from a lesser impact from COVID-19 production pressure during the current year versus the prior year, coupled with new ramps, customer expansions and continued recoveries in consumer spending, offset to some extent by new programsthe scarcity of components and customer launches within our industrial, homeraw material and lifestyle

businesses,logistics constraints. These increases in FAS were offset by declinesa 7% decrease in our capital equipment and energy businesses. Our HRS segment increased $59 million or 1% from highernet sales in our health solutionsConsumer Devices business as we benefiteddue to certain planned contract completions in fiscal year 2022 reflecting our active program management. Net sales in our FRS segment increased $1.1 billion, or 12%, driven primarily by an increase of 17% in net sales from prior year investments in design, engineering and automation that have strengthened and improved our capabilities and competitive positioning that more than offset year over year declines from our automotive customers primarily in Asia. These segment increases were partially offset by a decrease of $107 million or 1.5% in our CTG segment, primarily within the legacy consumer sectors of the segment andIndustrial business as a result of actively repositioningcustomer ramps and strong demand in EV charging and renewables, semicap, and robotics, coupled with incremental revenues from our Anord Mardix acquisition. In addition, net sales for our Automotive business increased 15% from the prior year due to new programs during fiscal year 2022 for our next generation mobility portfolio and recovery from the depressed sales from factory shutdowns in the first quarter of customersfiscal year 2021. The increase in our Automotive business was partially constrained by component shortages and rationalizing underperforming customers and eliminating certain product categories.OEM plant shutdowns during fiscal year 2022. Net sales for our Nextracker segment increased $0.3 billion, or 22%, from the prior year driven by additional tracker projects, most notably outside the United States.
Net sales during fiscal year 2018 increased $1.0across all regions with a $1.2 billion or 20%increase to $10.8 billion in our IEI segment, which was mainly driven by our industrial, homethe Americas, a $0.5 billion increase to $5.6 billion in Europe, and lifestyle businessesa $0.3 billion increase to $9.6 billion in addition to growth in our solar energy business. Our CTG segment increased $0.6 billion or 10% largely attributable to stronger sales in our connected living and mobile devices businesses, offset by a decrease in gaming. Our HRS segment increased $0.6 billion or 15% from higher sales in our automotive business. These increases were partially offset by a decrease of $0.7 billion or 8% in our CEC segment, largely attributable to lower sales within our telecom and networking businesses, offset by increased sales in our cloud and data center business.Asia.
Our ten largest customers during fiscal years 2019, 20182022 and 20172021 accounted for approximately 43%, 41%34% and 43%36% of net sales, respectively. We have made substantial efforts to diversify of our portfolio which allows us to operate at scale in many different industries, and, as a result, no customer accounted for greater than 10% of net sales in fiscal year 2019, 2018 or 2017.2022 and 2021.
Gross profitCost of sales
Gross profitCost of sales is affected by a number of factors, including the number and size of new manufacturing programs, product mix, labor cost fluctuations by region, component costs and availability and capacity utilization.
Cost of sales during fiscal year 2022 totaled $24.1 billion, representing an increase of approximately $1.7 billion, or 8% from $22.3 billion during fiscal year 2021. The increase in cost of sales is most notable in our FRS segment. Cost of sales in FRS for fiscal year 2022 increased $1.0 billion or approximately 12% from fiscal year 2021, which is in line with the 12% increase in revenue, primarily as a result of higher revenue in our Industrial and Automotive businesses. Cost of sales in FAS increased $0.4 billion, or approximately 3%, from fiscal year 2021, which is relatively consistent the 4% increase in revenue, primarily as a result of higher revenue in our Lifestyle and CEC businesses, and partially offset by improved efficiencies. Cost of sales in our Nextracker segment increased $0.4 billion or approximately 37% from fiscal year 2021, primarily due to the increase in steel and freight costs due to container shortages and other logistics challenges resulting from the COVID-19 pandemic, coupled with the increase in sales noted above.
Gross profit
Gross profit is affected by a fluctuation in costs of sales elements as outlined above and further by a number of factors, including product life cycles,lifecycles, unit volumes, product mix, pricing, competition, new product introductions, capacity utilization and the expansion or consolidation of manufacturing facilities, includingas well as specific restructuring activities initiated from time to time. The flexible design of our manufacturing processes allows us to manufacture a broad range of products in our facilities and better utilize our manufacturing capacity across our diverse geographic footprint and service customers from all segments. In the cases of new programs, profitability normally lags revenue growth due to product start-up costs, lower manufacturing program volumes in the start-up phase, operational inefficiencies, and under-absorbed overhead. Gross margin for these programs often improves over time as manufacturing volumes increase, as our utilization rates and overhead absorption improve, and as we increase the level of manufacturing services content. As a result of these various factors, our gross margin varies from period to period.
Gross profit decreased $0.1during fiscal year 2022 increased $0.2 billion to $1.5$1.9 billion, from $1.6 billion from fiscal year 2018 to fiscal year 2019. Gross margin decreased 40 basis points, to 5.8%or 7.4% of net sales, in fiscal year 2019, from 6.2%$1.7 billion, or 7.0% of net sales, in fiscal year 2018. The decrease is primarily due to an additional $32 million, or 10 basis points, of restructuring charges coupled with approximately $47 million of additional charges related to distressed customers incurred during fiscal year 2019 versus fiscal year 2018. As noted above, during the year we completed the wind down2021, an improvement of our NIKE Mexico operations and incurred a total of $66 million of charges primarily for non-cash asset impairments40 basis points. The increase in the second and third quarters of fiscal year 2019. Additional gross profit and gross margin declines were due to revenue reductions in some of our higher margin businesses, such as automotive and semi-cap equipment and further due to the Multek China divestiture. Also negatively pressuring the gross profit margin was the significant revenues from ramping new programs in India which had pressured margins below our average margins during the ramp in fiscal year 2019.
Gross profit during fiscal year 2018 increased $75 million to $1.6 billion2022 primarily resulted from $1.5 billion during fiscal year 2017, primarily as a resultthe overall stronger cost discipline focused on driving further productivity improvements, coupled with continued improvement in the mix of the increase in revenue offset by $67 million, or 30 basis points, ofour business, lower restructuring charges incurred during fiscalcompared to prior year, 2018. Gross margin decreased 10 basis points, to 6.2% of net salesbenefits from prior restructuring activities and a lower direct and incremental impact from COVID-19, coupled with stronger demand in fiscal year 2018, from 6.3% of net sales in fiscal year 2017, mainly attributableour Automotive, Industrial, CEC and Lifestyle businesses compared to the same factors previously described, coupled with elevated levels of investments in ramping new operations for our strategic footwear customer.prior year period.
Segment income
An operating segment's performance is evaluated based on its pre-tax operating contribution, or segment income. Segment income is defined as net sales less cost of sales, and segment selling, general and administrative expenses, and does not include amortization of intangibles, stock-based compensation, customer related asset impairments (recoveries), restructuring charges, the new revenue standard adoption impact, contingencieslegal and other, interest and other, net and other charges (income), net.other. A portion of depreciation is allocated to the respective segmentsegments, together with other general corporate research and development and administrative expenses.
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The following table sets forth segment income and margins. Historical information has been recastmargins:
 Fiscal Year Ended March 31,
 20222021
 (In millions)
Segment income:
Flex Agility Solutions$605 4.3 %$449 3.3 %
Flex Reliability Solutions546 5.1 %484 5.1 %
Nextracker90 6.2 %178 14.9 %

FAS segment margin increased 100 basis points, to reflect realignment of customers and/or products between segments:

 Fiscal Year Ended March 31,
 2019 2018 2017
 (In millions)
Segment income & margin:           
High Reliability Solutions$371
 7.7% $381
 8.0% $334
 8.1%
Industrial & Emerging Industries269
 4.4% 235
 3.9% 180
 3.6%
Communications & Enterprise Compute215
 2.6% 186
 2.4% 229
 2.7%
Consumer Technologies Group121
 1.8% 112
 1.6% 180
 2.8%
Corporate and Other(104)   (128)   (108)  
   Total segment income872
 3.3% 786
 3.1% 815
 3.4%
Reconciling items:           
Intangible amortization74
   79
   81
  
Stock-based compensation76
   85
   82
  
Customer related asset impairments (1)87
   6
   93
  
Restructuring charges (Note 14)113
   91
   49
  
New revenue standard adoption impact (Note 2 & Note 3)9
   
   
  
Contingencies and other (2)35
   52
   18
  
Interest and other, net183
   123
   100
  
Other charges (income), net (Note 15)110
   (170)   21
  
Income before income taxes$182
   $521
   $371
  
Amounts may not sum due to rounding.
(1)Customer related asset impairments for fiscal year 2019, relate to provision for doubtful accounts receivable, inventory and impairment of other assets for certain customers experiencing significant financial difficulties and/or the Company is disengaging from.
During fiscal year 2017, prices for solar panel modules declined significantly. We determined that certain solar panel inventory on hand at the end of the fiscal year 2017 was not fully recoverable and recorded a charge of $60 million to reduce the carrying costs to market in fiscal year 2017. We also recognized a $16 million impairment charge for solar module equipment and $17 million primarily related to negative margin sales and other associated direct costs. The total charge of $93 million is included in cost of sales4.3% for fiscal year 2017 but is excluded2022, from segment results above.

(2)Contingencies and other during fiscal year 2019, primarily consists of costs incurred relating to the independent investigation undertaken by the Audit Committee of the Company’s Board of Directors which was completed in June 2018. In addition, Contingencies and other also includes certain charges of the China based Multek operations that was divested in the second quarter of fiscal year 2019.

During fiscal year 2018, we incurred charges in connection with certain legal matters, for loss contingencies where it believed that losses were probable and estimable. Additionally, we incurred various other charges predominately related to damages incurred from a typhoon that impacted a China facility as well as certain assets impairments during fiscal year 2018.
Corporate and other primarily includes corporate services costs that are not included in the CODM's assessment of the performance of each of the identified reporting segments.
HRS segment margin decreased 30 basis point to 7.7% 3.3% for fiscal year 2019, from 8.0%2021. The margin increase during fiscal year 2018, primarily due to reduced revenues from our automotive productsthe period was driven by disciplined cost management and services, which carry higher gross marginsimproved efficiencies as noted above, partially offset by greater contribution fromelevated costs due to component shortages and logistics constraints across all of our growing health solutions business. HRSend markets.
FRS segment margin decreased 10 basis points to 8.0%for both fiscal years 2022 and 2021 was consistent at 5.1%. FRS segment margin increased for fiscal year 2018, from 8.1%2022 in our Automotive business compared to the prior year despite component shortages and OEM plant shutdowns during fiscalthe current year 2017. The slight decrease reflects investmentsand to a lesser extent, increased in expanding the segment's designour Industrial business due to strong demand and engineering capabilities, coupled with ramping up new customerscustomer ramps. Increases in Automotive and programs.
IEI segment margin increased 50 basis points to 4.4% for fiscal year 2019, from 3.9% during fiscal year 2018, as a result of improved overhead absorption benefits from the increased revenues and greater levels of design led programs which have higher gross margins,Industrial were offset by reduced demanda drop in capital equipment and energy. IEI segment margin increased 30 basis points to 3.9% for fiscal year 2018, from 3.6% during fiscal year 2017. This is primarily driven by strong revenue expansion led by

several new customer programs and improving overall demand across its diverse market that has provided to overhead absorption benefits.
CEC segment margin increased 20 basis points to 2.6% for fiscal year 2019, from 2.4% during fiscal year 2018. The increase was driven by operational efficiencies and improved absorption of overhead as a result of the 8% increase in revenues. CEC segment margin decreased 30 basis points to 2.4% for fiscal year 2018, from 2.7% during fiscal year 2017. The decrease was driven by lower revenues which negatively impacted profitability with under-absorbed overhead and higher investment costs.
CTG segment margin increased 20 basis points to 1.8% for fiscal year 2019, from 1.6% during fiscal year 2018, as a result of lower losses from our NIKE operations in Mexico, which we exited in the third quarter of fiscal year 2019, partially offset by under-performance of certain accounts. CTG segment margin decreased 120 basis points to 1.6% for fiscal year 2018, from 2.8% during fiscal year 2017, primarily driven by negatively impacted profitsHealth Solutions due to a lower contribution, and continued losseshigh growth from our NIKE operationscritical care products in Mexico.
Restructuring charges
During fiscal year 2019, we took targeted actions to optimize our portfolio, most notably within CTG. We recognized restructuring charges of approximately $113 million during the fiscal year ended March 31, 2019, of which $73.2 million were non-cash charges primarily2021.
Nextracker segment margin decreased 870 basis points, to 6.2% for asset impairments. A significant component of our charges were associated with the wind down of our NIKE operations in Mexico in the third quarter of fiscal year 2019 where we recognized charges of $66 million primarily2022, from 14.9% for non-cash asset impairments. In addition, we executed targeted head-count reductions at existing operating and design sites and corporate functions and exited certain immaterial businesses. Of these total charges, approximately $99 million was recognized as a component of cost of sales during the fiscal year ended March 31, 2019.2021 driven primarily by increased freight and logistics costs.
Restructuring charges
We continued to identify certain structural changes to restructure the business throughout fiscal year 2022. During fiscal year 2018,2022, we initiated targeted restructuring activities, focused on optimizing our cost structure in lower growth areas and, more importantly, streamlining certain corporate and segment functions. The objective of the plan is to make Flex a faster, more responsive and agile company, better positioned to react to marketplace opportunities. We recognized $79approximately $15 million of pre-tax cashrestructuring charges, predominantlymost of which related to employee severance. During fiscal year 2021, we recognized approximately $0.1 billion of restructuring charges, most of which related to employee severance costs,as part of an overall effort to align our cost structure with the reorganizing and $12 millionoptimizing of pre-tax non-cash charges for asset impairmentour operations model along the reporting segments, and other exit charges. We classified $67 million of these charges as a component of cost of salesfurther sharpen our focus to winning business in end markets where we have competitive advantages and $24 million as a component of selling, general and administrative expenses during fiscal year 2018.
During fiscal year 2017, we initiated a restructuring plan to accelerate our ability to support more Sketch-to-Scale® efforts across the Company and reposition away from historical legacy programs and structures through rationalizing our current footprint at existing sites including certain corporate SG&A functions. We recognized $49 million of pre-tax restructuring charges predominantly for employee termination costs. We classified $39 million of these charges as a component of cost of sales and $10 million as a component of selling, general and administrative expenses.deep domain expertise
Refer to note 1416 to the consolidated financial statements in Item 8, "Financial Statements and Supplementary Data" for further discussion of our restructuring activities.
Selling, general and administrative expenses
Selling, general and administrative expenses ("SG&A") totaled $953 million$0.9 billion, or 3.6%3.4% of net sales, during fiscal year 2019,2022, compared to $1.0$0.8 billion, or 4.0%3.4% of net sales, during fiscal year 2018, decreasing2021, increasing by $66$75 million or 7%9%, duewhich reflects our enhanced cost control efforts to strong cost discipline focused on driving further productivity improvements and a refined cost structure benefiting from prior restructuring initiatives.
support higher revenue growth while keeping our SG&A totaled $1.0 billion or 4.0% of net sales, during fiscal year 2018, compared to $937 million, or 3.9% of net sales, during fiscal year 2017, increasing by $82 million or 9%. This increase in SG&A was due to incremental costs associated with our continued expansion of our design and engineering resources and innovation system but also, due to the recognition of certain contingencies that are probable and estimable of payout. We also incurred incremental costs from our acquisitions in fiscal year 2018.expenses relatively flat.
Intangible amortization
Amortization of intangible assets in fiscal year 2019 decreased by $5years 2022 and 2021 were $68 million to $74and $62 million, from $79respectively, representing an increase of $6 million, infrom fiscal year 2018, primarily2021 as a result of four months of amortization expense related to new intangible assets from the Anord Mardix acquisition in December 2021 offset by certain intangible assets being fully amortized during fiscal year 2019.2022.
Amortization of intangible assets in fiscal year 2018 decreased by $2Interest, net
Interest, net remained relatively flat at $152 million to $79and $148 million from $81 million in fiscal year 2017, primarily as a result of certain intangible assets being fully amortized during fiscal year 2018.years 2022 and 2021, respectively.
Other charges (income), net

During the last half of fiscal year 2019,2022, we reassessed our strategy with respect to our entire investment portfolio. As a result, we recognized an aggregaterecorded $225 million of other income, net, charge related to investment impairments and dispositions of approximately $193 million for the year ended March 31, 2019. The aggregate charge was primarily driven by write-downsa $150 million gain related to a certain tax credit recorded upon approval of oura "Credit Habilitation" request by the relevant Brazil tax authorities. This is a non-cash gain which will be used to offset certain current and future tax obligations. Other income, net also includes $61 million of equity in earnings, driven by the value increase in certain investment positions in a non-core cost method investment and Elementum that were recognizedfunds resulting from discrete market events including initial public offerings of certain companies included in the third and fourth quartersfunds, coupled with a $32 million gain on foreign exchange transactions.
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During fiscal 2019, respectively. We also incurredyear 2021, we recorded $67 million of other investment impairments that were individually immaterialincome, net, primarily as a result of recognizing $83 million of equity in earnings, driven by the value increase in certain investment funds resulting from discrete market events including initial public offerings of certain companies included in the funds. Out of the $83 million equity in earnings recorded in fiscal year 2021, we collected $48 million of cash proceeds as we sold certain shares received as a distribution from one of our strategy shift and due to market valuation changes. Offsetting these chargesfund's investments. Partially offsetting the income was an $87impairment charge of $37 million non-cash gain from the deconsolidation of Bright Machines (formally known as AutoLab AI). related to certain non-core investments that were determined to be other than temporarily impaired.
Refer to note 217 to the consolidated financial statements in Item 8, "Financial Statements and Supplementary Data" for details on the investment impairments and the deconsolidationfurther discussion of Bright Machines.
During fiscal year 2018, we recognized $152 million of gain from the deconsolidation of Elementum, and $39 million of gain from the sale of Wink. We also recorded $22 million related to the impairment of certain non-core investments during fiscal year 2018. No other components ofour other charges and income, net incurred during fiscal year 2018 were material.
The fiscal year ended March 31, 2017 includes a $7 million loss attributable to a non-strategic facility sold during the second quarter of fiscal year 2017. No other components of other charges and income, net incurred during fiscal year 2017 were material.
Interest and other, net
Interest and other, net was $183 million during fiscal year 2019, compared to $123 million during fiscal year 2018, increasing $60 million due to a $23 million increase of interest expense primarily from higher weighted average interest rates and a higher average borrowing level, as well as a $21 million increase in interest expense from our accounts receivable sales program, coupled with a $14 million decrease in foreign exchange gains as compared to the prior year.
Interest and other, net was $123 million during fiscal year 2018, compared to $100 million during fiscal year 2017. The increase in interest and other, net of $23 million was primarily due to a $15 million increase of interest expense from higher weighted average interest rates and a higher borrowing level.(income), net.
Income taxes
We work to ensure that we accrue and pay the appropriate amount of income taxes according to the laws and regulations of each jurisdiction in which we operate. Certain of our subsidiaries have, at various times, been granted tax relief in their respective countries, resulting in lower income taxes than would otherwise be the case under ordinary tax rates. The consolidated effective tax rates were 48.7%, 17.7%10.0% and 13.8%14.1% for the fiscal years 2019, 20182022 and 2017,2021, respectively. The effective rate varies from the Singapore statutory rate of 17.0% in each year as a result of the following items:
Fiscal Year Ended March 31,
20222021
Income taxes based on domestic statutory rates17.0 %17.0 %
Effect of jurisdictional tax rate differential(10.9)(11.6)
Change in unrecognized tax benefit1.1 1.5 
Change in valuation allowance1.1 4.9 
Foreign exchange movement on prior year taxes recoverable(0.9)0.7 
Tax impacts related to sale of Nextracker Series A Preferred Units1.2 — 
APB 23 tax liability0.1 0.1 
Other1.3 1.5 
Provision for income taxes10.0 %14.1 %
 Fiscal Year Ended March 31,
 2019 2018 2017
Income taxes based on domestic statutory rates17.0 % 17.0 % 17.0 %
Effect of tax rate differential(74.1) (46.9) (23.0)
Change in liability for uncertain tax positions(8.4) 4.3
 0.2
Change in valuation allowance105.4
 57.1
 21.2
Recognition of prior year taxes recoverable3.0
 (10.3) 
Expiration of tax attributes2.3
 
 
Other3.5
 (3.5) (1.6)
Provision for income taxes48.7 % 17.7 % 13.8 %


The variation in our effective tax rate each year is primarily a result of recognition of earnings in foreign jurisdictions which are taxed at rates lower than the Singapore statutory rate including the effect of tax holidays and tax incentives we received primarily for our subsidiaries in China, Malaysia, Costa Rica, India, Netherlands and Israel of $24 million, $22$23 million and $16$21 million in fiscal years 2019, 20182022 and 2017,2021, respectively. Additionally, our effective tax rate is impacted by changes in our liabilities for uncertain tax positions of ($15) million, $22$12 million, and $1$11 million and changes in our valuation allowances on deferred tax assets of $192 million, $279$12 million and $79$35 million in fiscal years 2019, 20182022 and 2017,2021, respectively. We generate most of our revenues and profits from operations outside of Singapore.
We are regularly subject to tax return audits and examinations by various taxing jurisdictions and around the world, and there can be no assurance that the final determination of any tax examinations will not be materially different than that which is

reflected in our income tax provisions and accruals. Should additional taxes be assessed as a result of a current or future examinations,examination, there could be a material adverse effect on our effective tax rate, tax position, operating results, financial position and cash flows.
We provide a valuation allowance against deferred tax assets that in our estimation are not more likely than not to be realized. During fiscal year 2019,2022, we released valuation allowanceallowances totaling $26 million, $8 million of $3 millionwhich related primarily to ourcertain operations in PolandCanada and Hungary, as this amount wasthese amounts were deemed to be more likely than not to be realized due to the sustained profitability during the past three fiscal years as well as continued forecasted profitability of this subsidiary.those operations. The remaining approximately $19 million valuation allowance release related to deferred tax assets in the United States deemed realizable due to purchase accounting related to the Anord Mardix acquisition. Various other valuation allowance positions were also reduced due to varying factors such as recognition of uncertain tax positions impacting deferred tax assets, one-time income recognition in loss entities, and foreign exchange impacts on deferred tax balances. Lastly, these valuation allowance reductions and eliminations were offset by current period valuation allowance additions due to increased deferred tax assets as a result of current period losses in legal entities with existing full valuation allowance positions.
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LIQUIDITY AND CAPITAL RESOURCES
In response to the recent challenging environment following the COVID-19 pandemic, we continuously evaluate our ability to meet our obligations over the next 12 months and have proactively reset our capital structure during these times to improve maturities and liquidity. As a result, we expect that our current financial condition, including our liquidity sources are adequate to fund current and future commitments. As of March 31, 2019,2022, we had cash and cash equivalents of $1.7approximately $3.0 billion and bank and other borrowings of $3.1approximately $4.2 billion. We have a $1.75$2.0 billion revolving credit facility, that is due to mature in June 2022,January 2026 (the "2026 Credit Facility"), under which we had no borrowings outstanding as of March 31, 2019.2022. We have also entered into two credit facilities in India during fiscal year 2019, (i) a $200issued HUF 100 billion of 3.6% bonds due December 2031 (approximately $301.4 million, term loan facility entered in July 2018, under which there were $79 million in borrowings outstanding as of the end of fiscal year 2019, and (ii) a $100 million uncommitted credit import advance facility in India, under which there were $91 million in advances outstanding as of March 31, 2019, which we anticipate repaying2022) and borrowed €350 million under a one-year term loan (approximately $388.6 million as of March 31, 2022) at an interest rate of (0.18)% per annum. The proceeds of the new debt were used to refinance certain other outstanding debt in fiscal year 2020.2022 and for other general corporate purposes. As of March 31, 2022, we were in compliance with the covenants under all of our credit facilities and indentures. Refer to note 79 to the consolidated financial statement in Item 8, "Financial Statements and Supplementary Data" for additional details. As of March 31, 2019, we were in compliance withdetails on the covenants under all of our credit facilities2026 Credit Facility and indentures. In April 2019, we entered into an additional $300 million term loan facility as further explained below.the new notes. 
Our cash balances are held in numerous locations throughout the world. As of March 31, 2019, over half2022, approximately 34% of our cash and cash equivalents were held by foreign subsidiaries outside of Singapore. Although substantially all of the amounts held outside of Singapore could be repatriated, under current laws, a significant amount could be subject to income tax withholdings. We provide for tax liabilities on these amounts for financial statement purposes, except for certain of our foreign earnings that are considered indefinitely reinvested outside of Singapore (approximately $1.6 billion as of March 31, 2019)2022). Repatriation could result in an additional income tax payment; however, for the majority of our foreign entities, our intent is to permanently reinvest these funds outside of Singapore and our current plans do not demonstrate a need to repatriate them to fund our operations in jurisdictions outside of where they are held. Where local restrictions prevent an efficient intercompany transfer of funds, our intent is that cash balances would remain outside of Singapore and we would meet our liquidity needs through ongoing cash flows, external borrowings, or both.
The following is a discussion of our cash flows for the fiscal years ended March 31, 2022 and March 31, 2021. For a discussion of our cash flows for the fiscal years ended March 31, 2021 and March 31, 2020, please refer to Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended March 31, 2021.
Fiscal Year 20192022
Cash used inprovided by operating activities was $3.0$1.0 billion during fiscal year 2019. As further discussed below, cash collections on the deferred purchase price from our ABS sales program of $3.6 billion are now included in cash from investing activities instead of cash from operating activities in accordance with new accounting guidance.2022. The total cash used inprovided by operating activities resulted primarily from $93 million$0.9 billion of net income for the period plus $804 million$0.6 billion of non-cash charges such as depreciation, amortization, non-cash lease expense, restructuring and impairment charges, provision for doubtful accounts, deferred income taxes and stock-based compensation, net of a gain of $87 million from the deconsolidation of Bright Machines which are included in the determination of net income.compensation. Depreciation expense was $433 million$0.4 billion and relatively consistent with prior years. These additions were more than offset by a net change in our operating assets and liabilities of $3.9 billion. In accordance with the new accounting guidance adopted$0.5 billion primarily driven by changes in fiscal 2019 (and further described in note 2 to the consolidated financial statements in Item 8 “Financial Statements and Supplementary Data”), cash collections on deferred purchase price from our ABS programs are now classifiedNWC as cash flows from investing activities and no longer includeddiscussed below, partially offset by an increase in cash receipts relatedfrom other current liabilities of $1.1 billion primarily attributed to accounts receivable. As a result, while accounts receivable only increased by approximately $95 million from fiscal year 2018 to fiscal year 2019, the impact to operating cash flows is an outflow of $3.6 billion further described below. Year over year increases in inventory and contract assets also added to the net change in our operating assets and liabilities reflected on our cash flow from operations.customer advances received.
We believe net working capital ("NWC"),NWC, and net working capital as a percentage of annualized net sales are key metrics that measure our liquidity. NWC was previouslyis calculated as current quarter accounts receivable, net of allowance for doubtful accounts, adding back the reduction in accounts receivable resulting from non-cash accounts receivable sales, plus inventories lessand contract assets, less accounts payable. As part of the adoption of ASC 606, we expanded NWC, to include contract assets. We also included certain other current liabilities related to vendor financing programs, which are immaterial for the fiscal year, in the NWC calculation. NWC increased by $32 million$1.3 billion to $1.7$4.2 billion as of March 31, 2019,2022, from $1.6$2.9 billion as of March 31, 2018.2021. This increase is primarily driven by (i) ana $2.7 billion increase of $216 millionin inventories due to component shortages, clear-to build constraints and logistic challenges which increased buffer stock and inventory pricing, coupled with a $0.2 billion increase in contract assets, upon adoption of ASC 606, (ii)and partially offset with a $58 million$1.0 billion increase in accounts payable due to increased inventory purchases and a $0.6 billion decrease in accounts receivable, adding back reductions from non-cashnet partially due to more accounts receivable sales, and (iii) a $77 million decrease in our inventory levels fromfactored as of March 31, 2018, offset by an approximately $25 million increase in accounts

payable.2022. Our netnet working capital as a percentage of annualized net sales as of March 31, 20192022 increased slightly to 6.7%15.4% as compared to 6.4%11.5% of annualized net sales as of March 31, 2018.2021 due to these factors. We continue to experience component shortages in the supply chain and logistical constraints, and although we are actively managing these impacts, we expect continued working capital pressure in the near future. We expect it will take time to adequately drive down our inventory levels. We are proactively working with our partners to rebalance safety and buffer stock requirements and we have an established enterprise-wide cross-functional initiative to reset our load planning in an effort to reduce inventory levels. In addition, we are pursuing alternative resources using inclusive hybrid solutions to minimize transit times and implementing operational efficiencies. Component shortages and significantly increased logistic costs are expected to persist into the near future as we are continuing to experience increasing supply constraints and costs. We are working diligently with our partners to secure needed parts and fulfill demand. In addition, to the extent possible, we have collaborated with our customers for working capital advances to offset the required investment in inventory. Advances from customers were $1.4 billion as of March 31, 2022, an increase of $0.9 billion from $0.5 billion as of March 31, 2021.
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Cash provided byused in investing activities totaled $3.3$1.0 billion during fiscal year 2019.2022. This was primarily driven by $0.5 billion of cash paid for the impactacquisition of Anord Mardix in December 2021, net of cash acquired, and approximately $0.4 billion of capital expenditures for property and equipment to continue expanding capabilities and capacity in support of our adoption of ASU 2016-15expanding Lifestyle, Automotive, and Industrial businesses.
Cash provided by financing activities was $0.3 billion during the current fiscal year referred to above, which requires us to classify2022. This was primarily driven by $0.7 billion of proceeds received in aggregate, after premiums, following the issuance of the HUF 100 billion Bonds due December 2031 and the €350 million term loan due December 2022, and $0.5 billion of proceeds received from the sale of Nextracker redeemable preferred units, partially offset by $0.7 billion of cash collections on deferred purchase price frompaid for the repurchase of our ABS programs that were previously classified as operatingordinary shares and $0.2 billion of cash inflows as cash flows from investing activities.paid for the repayment of the Euro term loan due January 2022. Refer to note 29 to the consolidated financial statementsstatement in Item 8, "Financial Statements and Supplementary Data", for further description of the ASU. In addition, we received $267 million of proceeds, net of cash held, in connection with the divestitures of our China-based Multek operations as further described in note 17 to the consolidated financial statements in Item 8, "Financial Statements and Supplementary Data". We also invested $631 million of net capital expenditures for property and equipment to expand capabilities and capacity in support of our expanding IEI and HRS businesses as well as building out capacity in India.
Cash used in financing activities was $30 million during fiscal year 2019. This was primarily the result of repurchases of ordinary shares in the amount of $189 million, offset by $170 million received from the drawdown of India Facilities as further described in note 7 to the consolidated financial statements in Item 8, "Financial Statements and Supplementary Data".additional details.
Fiscal Year 20182021
Cash provided by operating activities was $0.8$0.1 billion during fiscal year 2018. This2021. The total cash provided by operating activities resulted primarily from $429 million$0.6 billion of net income for the period plus $478 million$0.6 billion of non-cash charges such as depreciation, amortization, non-cash lease expense, restructuring and impairment charges, provision for doubtful accounts, deferred income taxes and stock-based compensation, net of a gain from the deconsolidation of Elementum that are included in the determination of net income.compensation. Depreciation expense was $434 million of those non-cash charges.$0.4 billion and relatively consistent with prior years. These additions were partially offset by a net change in our operating assets and liabilities of $153 million,$1.1 billion, primarily driven primarily by a $354 million increase in inventories, an $88 million increase in other current and noncurrent assets, and a $347 million increase incash outflows related to accounts receivable, includingreceivables resulting from the change in salesreduction of our outstanding balances of accounts receivable offset by a $623 million increase insold through our ABS and accounts payable.receivable factoring programs.
Cash used in investing activities totaled $0.9$0.2 billion during fiscal year 2018.2021. This resultedwas primarily from $214 million paid for the acquisitiondriven by approximately $0.4 billion of AGM Automotive ("AGM") for our HRS segment, net of cash acquired, and $55 million paid for a power module business for our CEC segment, net of cash acquired. Further, we invested $517 million of net capital expenditures for property and equipment to expandcontinue expanding capabilities and capacity in support of our automotive, medical, footwearexpanding Health Solutions and IEI businesses. In addition, other investing activities includes $73 millionIndustrial businesses net of cash derecognizedapproximately $0.1 billion of proceeds from the sale of fixed assets including proceeds from the sale of an exited facility in the fourth quarter of fiscal year 2021 as a result of the datedisengagement of the Elementum deconsolidation, and $46 million of payments for non-core investments, net of cash received.
Cash used in financing activities was $188 million during fiscal year 2018. This was primarily the result of repurchases of ordinary shares in the amount of $180 million, and the repayment of $55 million of debt, partially offset by $65 million received from third party investorsa certain customer in fiscal year 2018 in exchange for an additional noncontrolling equity interest in Elementum prior to2020. Further offsetting the deconsolidation described above.
Fiscal Year 2017capital expenditures was $48 million of proceeds from the sale of certain shares received as distribution from one of our funds' investments.
Cash provided by operating activities was $1.1 billion during fiscal year 2017. This resulted primarily from $320 million of net income for the period plus $674 million of non-cash charges such as depreciation, amortization, other impairment charges, provision for doubtful accounts and stock-based compensation expense that are included in the determination of net income. Depreciation expense was $432 million of those non-cash charges. We generated $157 million in cash as a result of changes in our operating assets and liabilities, driven primarily by a $268 million increase in accounts payable, offset by a $184 million increase in accounts receivable, including the change in sales of accounts receivable.
Cash used in investingfinancing activities was $0.7 billion during fiscal year 2017.2021. This resultedwas primarily from $490 milliondriven by $1.4 billion of proceeds received in aggregate, net capital expenditures for propertyof discounts and equipment to expand capabilityafter premiums, following the issuance of the 2026 Notes and capacity in supportthe 2030 Notes, partially offset by $0.4 billion of our automotive and medical businesses and further investments in both automation and expanding technologies to support our innovation services. We alsocash paid $189 million for the acquisitionrepayment of four businesses, net ofthe term loan due June 2022. Also offsetting cash acquired, including $162 million, net of $18 million of cash acquired related to the acquisition of manufacturing facilities from Bose. Further, $60 million was paid for a non-controlling interest in a joint venture with RIB Software AG as our partner. Offsetting this were proceeds from various other investing activities of $64 million, most notably the receipt of $38 million for the sale of two non-strategic businesses.
Cash used inprovided by financing activities was $242 million during fiscal year 2017. This was primarily the result of repurchases of ordinary shares in the amount $350 million, and $31 million$0.2 billion of cash paid to a third-party banking institution for certain assets that were financed by the third-party banking institution on behalf of a customer, which is included in other financing activities. These cash outflows were partially offset by $171 million of net proceeds from bank borrowings and long-term debt, of which $130 million is the incremental amount borrowed extending the maturity date of onerepurchase of our loan agreements fromordinary shares.

August 30, 2018 to November 30, 2021, and $107 million is the amount of proceeds from the €100 million term loan, discussed further in note 7 to the consolidated financial statements in Item 8, "Financial Statements and Supplementary Data".
Adjusted Free Cash Flow
We believe adjusted free cash flow is an important liquidity metric because it measures, during a given period, the amount of cash generated that is available to repay debt obligations, make investments, fund acquisitions, repurchase company shares fund acquisitions, make investments, repay debt obligations, and for certain other activities. Upon adoption of ASU 2016-15 effective for fiscal year 2019, ourOur adjusted free cash flow was redefinedis defined as cash from operations, plus cash collections of deferred purchase price, less net purchases of property and equipment to present adjusted cash flows on a consistent basis for investor transparency. Weinvestors. During fiscal year 2021, we proactively and strategically reduced the outstanding balance of our ABS programs. Proceeds from our debt issuance replaced the funding from the ABS programs for working capital purposes. As this decrease in cash flow reflected the change of our capital strategy, we added this back for our adjusted free cash flow calculation and also excludeexcluded the reductionimpact to operating cash flows related to certain vendor programs that is required for US GAAP presentation.presentation for fiscal year 2021. Refer to Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” (Adjusted Free Cash Flow subsection) of our Annual Report on our Form 10-K for the fiscal year ended March 31, 2021 for further discussion. Our adjusted free cash flow was $3 million, $236 million$0.6 billion and $660 million$0.7 billion for fiscal years 2019, 20182022 and 2017,2021, respectively. FreeAdjusted free cash flow is not a measure of liquidity under generally accepted accounting principles in the United States,U.S. GAAP, and may not be defined and calculated by other companies in the same manner. FreeAdjusted free cash flow should not be considered in isolation or as an alternative to net cash provided by operating activities. FreeAdjusted free cash flows reconcile to the most directly comparable GAAP financial measure of cash flows from operations as follows:
 Fiscal Year Ended March 31,
 20222021
 (In millions)
Net cash provided by operating activities$1,024 $144 
Reduction in ABS levels and other— 799 
Purchases of property and equipment(443)(351)
Proceeds from the disposition of property and equipment11 85 
Adjusted free cash flow (1)$593 $677 
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 Fiscal Year Ended March 31,
 2019 2018 2017
 (In millions)
Net cash used in operating activities$(2,971) $(3,866) $(3,822)
Cash collection of deferred purchase price and other3,605
 4,620
 4,971
Purchases of property and equipment(725) (562) (525)
Proceeds from the disposition of property and equipment94
 44
 36
Free cash flow$3
 $236
 $660
(1)Figures in the table may not foot exactly due to rounding.

Our cash balances are generated and held in numerous locations throughout the world. Liquidity is affected by many factors, some of which are based on normal ongoing operations of the business and some of which arise from fluctuations related to global economics and markets. Cash balances are generated and held in many locations throughout the world. Local government regulations may restrict our ability to move cash balances to meet cash needs under certain circumstances; however, any current restrictions are not material. We do not currently expect such regulations and restrictions to impact our ability to pay vendors and conduct operations throughout the global organization. We believe that our existing cash balances, together with anticipated cash flows from operations and borrowings available under our credit facilities, will be sufficient to fund our operations through at least the next twelve months.
Future liquidity needs will depend on fluctuations in levels of inventory, accounts receivable and accounts payable, the timing of capital expenditures for new equipment, the extent to which we utilize operating leases for new facilities and equipment, and the levels of shipments and changes in the volumesvolume of customer orders.
We maintain global paying servicesservice agreements with several financial institutions. Under these agreements, the financial institutions act as our paying agents with respect to accounts payable due to our suppliers who elect to participate in the program. The agreements allow our suppliers to sell their receivables to one of the participating financial institutions at the discretion of both parties on terms that are negotiated between the supplier and the respective financial institution. Our obligations to our suppliers, including the amounts due and scheduled payment dates, are not impacted by our suppliers’ decisions to sell their receivables under this program. AtDuring fiscal years ended March 31, 20192022 and 2018,2021, the cumulative payments due to suppliers participating toin the programs amounted to approximately $0.5$1.3 billion and $0.3$1.0 billion, respectively. Pursuant to their agreement with one of the financial institutions, certain suppliers may elect to be paid early at their discretion. We are not always notified when our suppliers sell receivables under these programs. The available capacity under these programs can vary based on the number of investors and/or financial institutions participating in these programs at any point in time.
In addition, we maintain various uncommitted short-term financing facilities including but not limited to a commercial paper program, and a revolving sale and repurchase of subordinated notes established under the securitization facility, under which there were no borrowings outstanding as of March 31, 2022.
Historically, we have funded operations from cash and cash equivalents generated from operations, proceeds from public offerings of equity and debt securities, bank debt and lease financings. We also have the ability to sell a designated pool of trade receivables under asset-backed securitization ("ABS")ABS programs and sell certain trade receivables, which are in addition to the trade receivables sold in connection with these securitization agreements.
During fiscal years 2019, 2018 and 2017, we received approximately $6.8 billion, $8.0 billion and $7.6 billion, respectively from transfers of receivables under our ABS programs, and $2.7 billion, $1.5 billion and $1.3 billion, respectively from other sales of receivables. As of March 31, 2019, and 2018, the outstanding balance on receivables sold for cash was $1.3 billion, for both years, respectively, under all our accounts receivable sales programs, which are removed from accounts receivable balances in our consolidated balance sheets.

We anticipate that we willmay enter into debt and equity financings, sales of accounts receivable and lease transactions to fund acquisitions and anticipated growth.growth as needed.
During fiscal year 2022, no accounts receivable had been sold under our ABS programs and we received approximately $1.6 billion from other sales of receivables under our factoring program. During fiscal years 2021, we received approximately $0.6 billion from transfers of receivables under our ABS programs, and $0.8 billion from other sales of receivables. As of March 31, 2022 and 2021, the outstanding balance on receivables sold for cash was $0.6 billion and $0.2 billion, respectively, under our accounts receivable factoring programs, which were removed from accounts receivable balances in our consolidated balance sheets.
Historically we have been successful in refinancing and extending the maturity dates on our term loans and credit facilities. In January 2021, we entered into a $2.0 billion credit agreement which matures in January 2026 and consists of a $2.0 billion revolving credit facility with a sub-limit of $360 million available for swing line loans, and a sub-limit of $175 million available for the issuance of letters of credit.
The sale or issuance of equity or convertible debt securities could result in dilution to current shareholders. Further, we may issue debt securities that have rights and privileges senior to those of holders of ordinary shares, and the terms of this debt could impose restrictions on operations and could increase debt service obligations. This increased indebtedness could limit our flexibility as a result of debt service requirements and restrictive covenants, potentially affect our credit ratings, and may limit our ability to access additional capital or execute our business strategy. Any downgrades in credit ratings could adversely affect our ability to borrow as a result of more restrictive borrowing terms. We continue to assess our capital structure and evaluate the merits of redeploying available cash to reduce existing debt or repurchase ordinary shares.
Historically we have been successful in refinancing and extending the maturity dates on our term loans and credit facilities. In June 2017, we entered into a five-year credit facility consisting of a $1.75 billion revolving credit facility and a $503 million term loan, which is due to mature on June 30, 2022 (the "2022 Credit Facility"). This 2022 Credit Facility replaced our $2.1 billion credit facility, which was due to mature in March 2019. The outstanding principal of the term loan portion of the 2022 Credit Facility is repayable in quarterly installments of approximately $6 million from September 30, 2017 through June 30, 2020 and approximately $13 million from September 30, 2020 through March 31, 2022 with the remainder due upon maturity. As of March 31, 2019, one of our $500 million Notes due February 2020 has been included in current liabilities on the consolidated balance sheet.
In April 2019, we entered into a JPY 33.5 billion term loan agreement (approximately $300 million) due April 2024, which was then swapped to U.S. dollars. The term loan will be used to fund general operations and refinance certain other outstanding debt. Borrowings under this term loan bear interest, at LIBOR plus the applicable margin of 1.21%
Under our current share repurchase program, our Board of Directors authorized repurchases of our outstanding ordinary shares for up to $500 million$1 billion in accordance with the share purchase mandate approved by our shareholders at the date of the most recent Annual General Meeting which was held on August 16, 2018.4, 2021. During fiscal year 2019,2022, we paid $189$686 million to repurchase shares (underunder the current and prior repurchase plans)plans at an average price of $10.66$17.97 per share. As of March 31, 2019,2022, shares in the aggregate amount of $325$496 million were available to be repurchased under the current plan.
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CONTRACTUAL OBLIGATIONS AND COMMITMENTS
Bank borrowings and long-term debt are as follows:
As of March 31,
20222021
(In millions)
5.000% Notes due February 2023$500 $500 
Term Loan due April 2024 - three-month TIBOR plus 0.43%273 305 
4.750% Notes due June 2025598 598 
3.750% Notes due February 2026690 694 
4.875% Notes due June 2029659 661 
4.875% Notes due May 2030690 694 
Euro Term Loans389 168 
3.600% HUF Bonds due December 2031301 — 
India Facilities84 133 
Other31 51 
Debt issuance costs(18)(21)
4,197 3,783 
Current portion, net of debt issuance costs(949)(268)
Non-current portion$3,248 $3,515 
 As of March 31,
 2019 2018
 (In millions)
4.625% Notes due February 2020$500
 $500
Term Loan, including current portion, due in installments through November 2021672
 688
Term Loan, including current portion, due in installments through June 2022459
 484
5.000% Notes due February 2023500
 500
4.750% Notes due June 2025597
 596
India Facilities (1)170
 
Other168
 187
Debt issuance costs(11) (14)
 3,055
 2,941
Current portion, net of debt issuance costs(633) (43)
Non-current portion$2,422
 $2,898


(1)India Facilities as of March 31, 2019 include an approximately $91.4 million drawdown of short-term bank borrowings under a facility entered in February 2019 and a $78.8 million drawdown from the $200 million term loan facility entered in July 2018.
Refer to the discussion in note 79 to the consolidated financial statements in Item 8, "Financial Statements and Supplementary Data" for further details of our debt obligations.

We have purchase obligations that arise in the normal course of business, primarily consisting of binding purchase orders for inventory related items and capital expenditures. Additionally,In addition. we have leased certain of our property and equipment under capitalfinance lease commitments, and certain of our facilities and equipment under operating lease commitments.
Future payments due under our purchase obligations, debt including capitalfinance leases and related interest obligations and operating leases are as follows:follows (amounts may not sum due to rounding):
 TotalLess Than
1 Year
1 - 3 Years4 - 5 YearsGreater Than
5 Years
 (In millions)
Contractual Obligations:     
Bank borrowings, long-term debt and finance lease obligations:     
Bank borrowings and long-term debt$4,215 $950 $326 $1,288 $1,651 
Finance leases— — 
Interest on long-term debt obligations744 153 264 154 173 
Operating leases, net of subleases765 148 232 156 229 
Restructuring costs43 42 — — 
Total contractual obligations$5,771 $1,295 $825 $1,598 $2,053 
 Total Less Than
1 Year
 1 - 3 Years 4 - 5 Years Greater Than
5 Years
 (In millions)
Contractual Obligations: 
  
  
  
  
Purchase obligations$3,299
 $3,299
 $
 $
 $
Long-term debt and capital lease obligations: 
  
  
  
  
Long-term debt3,065
 634
 913
 918
 600
Capital leases45
 19
 19
 7
 
Interest on long-term debt obligations512
 140
 253
 83
 36
Operating leases, net of subleases683
 155
 207
 149
 172
Restructuring costs32
 32
 
 
 
Total contractual obligations$7,636
 $4,279
 $1,392
 $1,157
 $808


We have excluded $252$282 million of liabilities for unrecognized tax benefits from the contractual obligations table as we cannot make a reasonably reliable estimate of the periodic settlements with the respective taxing authorities. See note 13,15, "Income Taxes" to the consolidated financial statements in Item 8, "Financial Statements and Supplementary Data" for further details.
We also have outstanding firm purchase orders with certain suppliers for the purchase of inventory, which are not included in the table above. The majority of the purchase obligations are generally short-term in nature. As of March 31, 2022, our purchase obligations over one year were approximately $0.9 billion. We generally do not enter into non-cancelable purchase orders for materials until we receive a corresponding purchase commitment from our customer. Our purchase obligations can fluctuate significantly from period to period and can materially impact our future operating asset and liability balances, and our future working capital requirements. We intend to use our existing cash balances, together with anticipated cash flows from operations to fund our existing and future contractual obligations.
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OFF-BALANCE SHEET ARRANGEMENTSOn February 1, 2022, we sold Series A Preferred Units, representing a 16.67% interest in Nextracker, to TPG Rise and received proceeds of $487.5 million, net of $12.5 million in transaction costs. Because the Series A Preferred Units are redeemable upon the occurrence of conditions not solely within the control of Flex, we classified the redeemable noncontrolling interest as temporary equity on our consolidated balance sheets.
We sell designated pools of trade receivablesAt TPG Rise’s election, we are required to unaffiliated financial institutions under our ABS programs, and in addition to cash, we receive a deferred purchase price receivable for each poolrepurchase all of the receivables sold. Eachoutstanding Series A Preferred Units at their liquidation preference, which shall include all contributed but unreturned capital plus accrued but unpaid dividends, at the earlier of these deferred purchase price receivables servescertain change in control events and February 2, 2028. Additionally, if Nextracker has not completed a qualified initial public offering prior to February 2, 2027, then TPG Rise may cause us to repurchase all of the outstanding Series A Preferred Units at their fair market value. We do not believe that it is probable as additional credit support to the financial institutions and is recorded at its estimated fair value. As of March 31, 2019 and 2018,2022, that the fair valuenoncontrolling interest will become redeemable given the anticipated Qualified Public Offering of our deferred purchase price receivable was approximately $293 million and $445 million, respectively. As of March 31, 2019 and 2018, the outstanding balance on receivables sold for cash was $1.3 billion for both periods, respectively, under all our accounts receivable sales programs, which were removed from accounts receivable balances in our consolidated balance sheets. For further information, seeNextracker. See note 107, "Redeemable Noncontrolling Interest" to the consolidated financial statements in Item 8, "Financial Statements and Supplementary Data". for further details.
RECENT ACCOUNTING PRONOUNCEMENTS
Refer to note 2 to the consolidated financial statements in Item 8, "Financial Statements and Supplementary Data" for recent accounting pronouncements.

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ITEM 7A.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
INTEREST RATE RISK
A portion of our exposure to market risk for changes in interest rates relates to our highly liquid investment portfolio, with maturities of three months or less from original dates of purchase and are classified as cash equivalents on our consolidated balance sheet. We do not use derivative financial instruments in our highly liquid investment portfolio. We place cash and cash equivalents with various major financial institutions and highly rated money market accounts. Our investment policy has strict guidelines focusing on preservation of capital. The portfolio is comprised of various instruments including term deposits with banks, marketable securities and money market accounts. Our cash is principally invested in the U.S. dollar and China RMBrenminbi serving as a natural hedge of our RMBrenminbi denominated costs. As of March 31, 2019,2022, the outstanding amount in the highly liquid investment portfolio was $0.5$2.3 billion, the largest components of which were U.S. dollar, Indian rupee, Brazilian real, Israeli new shekel and China renminbi and Indian rupee denominated money market accounts with an average return of 2.18%1%. A hypothetical 10% change in interest rates would not be expected to have a material effect on our financial position, results of operations and cash flows over the next fiscal year.
We had variable rate debt outstanding of approximately $1.5$0.4 billion as of March 31, 2019.2022. Variable rate debt obligations consisted of borrowings under our term loans. Interest on these obligations is discussed in note 79 to the consolidated financial statements in Item 8, "Financial Statements and Supplementary Data".
Our variable rate debt instruments create exposures for us related to interest rate risk. Primarily due to the current low interest rates, aA hypothetical 10% change in interest rates would not be expected to have a material effect on our financial position, results of operations and cash flows over the next fiscal year.
As of March 31, 2019,2022, the approximate average fair value of our debt outstanding under our term loan facilities that mature in November 2021 and June 2022, and Notes due February 2020, February 2023, and June 2025, February 2026, June 2029, and May 2030 was 99.9%102.6% of the face value of the debt obligations based on broker trading prices.
In July 2017, the U.K.'s Financial Conduct Authority (“FCA”), which regulates LIBOR, announced the publication cessation dates for all U.S. Dollar and non-U.S. Dollar LIBOR settings. Most settings ceased at the end of December 2021 and the remaining U.S. Dollar settings (overnight and one-, three-, six- and twelve-month U.S. Dollar LIBOR) will cease at the end of June 2023. Although significant progress has been made by regulators, industry bodies, and market participants to introduce and implement the Secured Overnight Financing Rate (“SOFR”) as a replacement rate for U.S. dollar LIBOR, there is no assurance that an alternative reference rate such as SOFR will achieve sufficient market acceptance when the publication of the principal tenors of U.S. Dollar LIBOR is discontinued, or that market participants will otherwise implement effective transitional arrangements to address that discontinuation. Such failure to implement an alternative reference rate could result in widespread dislocation in the financial markets and volatility in the pricing of debt facilities negatively affecting our access to the borrowing of additional funds. Furthermore, while contractual arrangements in connection with certain of our debt facilities contemplate the transition from LIBOR to an alternative reference rate (including SOFR), the consequences of such transition cannot be entirely predicted and could result in an increase in the cost of our borrowings on our variable rate debt, which could adversely impact our interest expense, results of operations, and cash flows. For risks related to the discontinuation of LIBOR, see the following risk factor in Item IA: “Changes in our credit rating may make it more expensive for us to raise additional capital or to borrow additional funds. We are also exposed to interest rate fluctuations on our outstanding borrowings and investments.
FOREIGN CURRENCY EXCHANGE RISK
We transact business in various foreign countries and are, therefore, subject to risk of foreign currency exchange rate fluctuations. We have established a foreign currency risk management policy to manage this risk. To the extent possible, we manage our foreign currency exposure by evaluating and using non-financial techniques, such as currency of invoice, leading and lagging payments and receivables management. In addition, we may borrow in various foreign currencies and enter into short-term and long-term foreign currency derivative contracts, including forward, swap, and option contracts to hedge only those currency exposures associated with certain assets and liabilities, mainly accounts receivable, and accounts payable, debt, and cash flows denominated in non-functional currencies.
We endeavor to maintain a partial or fully hedged position for certain transaction exposures. These exposures are primarily, but not limited to, revenues, customer and vendor payments and inter-company balances in currencies other than the functional currency unit of the operating entity. The credit risk of our foreign currency derivative contracts is minimized since all contracts are with large financial institutions and accordingly, fair value adjustments related to the credit risk of the counter-party financial institutioninstitutions were not material. The gains and losses on foreign currency derivative contracts generally offset the losses and gains on the assets, liabilities and transactions hedged. The fair value of currency derivative contracts is reported on the balance sheet. The aggregate notional amount of outstanding contracts as of March 31, 20192022 amounted to $7.8$11.6 billion and
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the recorded fair values of the associated assets and liabilities were not material. The majority of these foreign exchange contracts expire in less than three months and all expire within one year.months. They will settle primarily in the Brazilian real, British pound, China renminbi, Euro, Hungarian forint, Indian rupee, Israeli shekel, Malaysian ringgit, Mexican peso, Singapore dollar, and U.S. dollar.
Based on our overall currency rate exposures as of March 31, 2019,2022, including the derivative financial instruments intended to hedge the nonfunctional currency-denominated monetary assets, liabilities and cash flows, and other factors, a 10% appreciation or depreciation of the U.S. dollar from its cross-functional rates would not be expected, in the aggregate, to have a material effect on our financial position, results of operations and cash flows in the near-term.

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ITEM 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


To the Board of Directors and Shareholders of Flex Ltd., Singapore
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Flex Ltd. and subsidiaries (the "Company") as of March 31, 20192022 and 2018,2021, and the related consolidated statements of operations, comprehensive income, redeemable noncontrolling interest and shareholders' equity, and cash flows for each of the three years in the period ended March 31, 20192022, and the related notes.notes (collectively referred to as the “financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of Flex Ltd. and subsidiariesthe Company as of March 31, 20192022 and 2018,2021, and the results of theirits operations and theirits cash flows for each of the three years in the period ended March 31, 2019,2022, in conformity with accounting principles generally accepted in the United States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of March 31, 2019,2022, based on the criteria established in Internal Control-Integrated Framework(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated May 20, 2019,2022, expressed an unqualified opinion on the Company's internal control over financial reporting.
Change in Accounting Principles
As discussed in Note 2 to the financial statements, the Company changed its method of accounting for revenue from contracts with customers in fiscal year 2019 due to the adoption of Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers, using the modified retrospective approach. As also discussed in Note 2 to the financial statements, the Company changed its method of accounting for cash receipts on the deferred purchase price from asset-backed securitization programs in fiscal year 2019 due to the adoption of ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments using the retrospective approach.
Basis of Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.US federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedureprocedures included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our audits also included assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Revenue - Customer Contracts and Related Obligations - Refer to Notes 2 and 4 to the financial statements
Critical Audit Matter Description
Certain of the Company’s customer agreements include potential price adjustments which are accounted for as variable consideration under the relevant accounting literature. For arrangements that include potential price adjustments the Company limits the amount of revenue recognized to that amount which is not probable of significant reversal, considering potential refunds required by the contract, historical experience and other surrounding facts and circumstances. The amount of variable consideration that is deferred is recorded in ‘customer-related accruals’ on the consolidated balance sheets, which totaled $227.4 million as of March 31, 2022.
Auditing the Company’s estimates of variable consideration required extensive audit effort and a high degree of auditor judgment. For these reasons we identified the measurement of variable consideration and the associated customer-related accruals as a critical audit matter.
How the Critical Audit Matter Was Addressed in the Audit
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Our audit procedures related to variable consideration and associated customer related accruals included the following, among others:
We tested the effectiveness of controls the Company has in place relating to reviewing customer contracts to identify price adjustment clauses, estimating variable consideration and assessing the reasonableness of customer related accrual balances.
We evaluated the Company’s accounting policy with respect to variable consideration, as well as its process for identifying contracts that include potential price adjustment clauses.
We selected a sample of contracts with customers that included potential price adjustment clauses and performed the following:
We read the customer contracts to develop an understanding of clauses that could give rise to variable consideration and evaluated whether the Company’s accounting conclusions with respect to those clauses were reasonable.
We obtained and tested the mathematical accuracy of the Company’s calculations of customer related accruals and evaluated the Company’s judgments regarding the amount of variable consideration that should be deferred. In making this evaluation we considered both the terms included in the customer contract and the Company’s historical experience in settling amounts with the customer.

/s/ DELOITTE & TOUCHE LLP
San Jose, California
May 20, 20192022
We have served as the Company’s auditors since 2002.

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FLEX LTD.
CONSOLIDATED BALANCE SHEETS


As of March 31, As of March 31,
2019 2018 2022 2021
(In thousands, except
share amounts)
(In millions, except share amounts)
ASSETS 
  
ASSETS
Current assets: 
  
Current assets:   
Cash and cash equivalents$1,696,625
 $1,472,424
Cash and cash equivalents$2,964  $2,637 
Accounts receivable, net of allowance for doubtful accounts (Note 2)2,612,961
 2,517,695
Accounts receivable, net of allowance for doubtful accounts (Note 2)3,371  3,959 
Contract assets216,202
 
Contract assets519 282 
Inventories3,722,854
 3,799,829
Inventories6,580  3,895 
Other current assets854,790
 1,380,466
Other current assets903  590 
Total current assets9,103,432
 9,170,414
Total current assets14,337  11,363 
Property and equipment, net2,336,213
 2,239,506
Property and equipment, net2,125  2,097 
Operating lease right-of-use assets, netOperating lease right-of-use assets, net637 642 
Goodwill1,073,055
 1,121,170
Goodwill1,342 1,090 
Other intangible assets, net330,995
 424,433
Other intangible assets, net411 213 
Other assets655,672
 760,332
Other assets473  431 
Total assets$13,499,367
 $13,715,855
Total assets$19,325  $15,836 
LIABILITIES AND SHAREHOLDERS' EQUITY 
  
LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND SHAREHOLDERS' EQUITYLIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND SHAREHOLDERS' EQUITY
Current liabilities: 
  
Current liabilities:   
Bank borrowings and current portion of long-term debt$632,611
 $43,011
Bank borrowings and current portion of long-term debt$949  $268 
Accounts payable5,147,236
 5,122,303
Accounts payable6,254  5,247 
Accrued payroll391,591
 383,332
Accrued payroll470  473 
Deferred revenue and customer working capital advancesDeferred revenue and customer working capital advances2,002 848 
Other current liabilities1,426,075
 1,719,418
Other current liabilities1,036  998 
Total current liabilities7,597,513
 7,268,064
Total current liabilities10,711  7,834 
Long-term debt, net of current portion2,421,904
 2,897,631
Long-term debt, net of current portion3,248  3,515 
Operating lease liabilities, non-currentOperating lease liabilities, non-current551 562 
Other liabilities507,590
 531,587
Other liabilities608  489 
Commitments and contingencies (Note 12)

 

Total liabilitiesTotal liabilities15,118 12,400 
Commitments and contingencies (Note 14)Commitments and contingencies (Note 14)0 0
Redeemable noncontrolling interest (Note 7)Redeemable noncontrolling interest (Note 7)78 — 
Shareholders' equity 
  
Shareholders' equity   
Flex Ltd. Shareholders' equity 
  
Ordinary shares, no par value; 566,787,620 and 578,317,848 issued, and 516,548,265 and 528,078,493 outstanding as of March 31, 2019 and 2018, respectively6,523,750
 6,636,747
Treasury stock, at cost; 50,239,355 shares as of March 31, 2019 and 2018, respectively(388,215) (388,215)
Ordinary shares, no par value; 510,799,667 and 542,807,200 issued, and 460,560,312 and 492,567,845 outstanding as of March 31, 2022 and 2021, respectivelyOrdinary shares, no par value; 510,799,667 and 542,807,200 issued, and 460,560,312 and 492,567,845 outstanding as of March 31, 2022 and 2021, respectively6,052  6,232 
Treasury stock, at cost; 50,239,355 shares as of March 31, 2022 and 2021, respectivelyTreasury stock, at cost; 50,239,355 shares as of March 31, 2022 and 2021, respectively(388)(388)
Accumulated deficit(3,012,012) (3,144,114)Accumulated deficit(1,353)(2,289)
Accumulated other comprehensive loss(151,163) (85,845)Accumulated other comprehensive loss(182)(119)
Total shareholders' equity2,972,360
 3,018,573
Total shareholders' equity4,129 3,436 
Total liabilities and shareholders' equity$13,499,367
 $13,715,855
Total liabilities, redeemable noncontrolling interest, and shareholders' equityTotal liabilities, redeemable noncontrolling interest, and shareholders' equity$19,325 $15,836 
   
The accompanying notes are an integral part of these consolidated financial statements.



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FLEX LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS


Fiscal Year Ended March 31, Fiscal Year Ended March 31,
2019 2018 2017 2022 20212020
(In thousands, except per share amounts) (In millions, except per share amounts)
Net sales$26,210,511
 $25,441,131
 $23,862,934
Net sales$26,041 $24,124 $24,210 
Cost of sales24,593,731
 23,778,404
 22,303,231
Cost of sales24,094 22,349 22,681 
Restructuring charges99,005
 66,845
 38,758
Restructuring charges15 88 190 
Gross profit1,517,775
 1,595,882
 1,520,945
Gross profit1,932 1,687 1,339 
Selling, general and administrative expenses953,077
 1,019,399
 937,339
Selling, general and administrative expenses892 817 834 
Intangible amortization74,396
 78,640
 81,396
Intangible amortization68 62 64 
Restructuring charges14,308
 23,846
 10,637
Restructuring charges— 13 26 
Interest and other, net183,454
 122,823
 99,532
Operating incomeOperating income972 795 415 
Interest, netInterest, net152 148 174 
Other charges (income), net110,414
 (169,719) 21,193
Other charges (income), net(225)(67)82 
Income before income taxes182,126
 520,893
 370,848
Income before income taxes1,045 714 159 
Provision for income taxes88,727
 92,359
 51,284
Provision for income taxes105 101 71 
Net income$93,399
 $428,534
 $319,564
Net income940 613 88 
Net income attributable to redeemable noncontrolling interestNet income attributable to redeemable noncontrolling interest— — 
Net income attributable to Flex Ltd.Net income attributable to Flex Ltd.$936 $613 $88 

 
  
  
   
Earnings per share: 
  
  
Earnings per share attributable to the shareholders of Flex Ltd.:Earnings per share attributable to the shareholders of Flex Ltd.:   
Basic$0.18
 $0.81
 $0.59
Basic$1.97 $1.23 $0.17 
Diluted$0.18
 $0.80
 $0.59
Diluted$1.94 $1.21 $0.17 
Weighted-average shares used in computing per share amounts:     Weighted-average shares used in computing per share amounts:
Basic526,519
 529,782
 540,503
Basic476 499 509 
Diluted530,070
 536,598
 546,220
Diluted483 506 512 
   
The accompanying notes are an integral part of these consolidated financial statements.

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FLEX LTD.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME


Fiscal Year Ended March 31, Fiscal Year Ended March 31,
2019 2018 2017 2022 20212020
(In thousands) (In millions)
Net income$93,399
 $428,534
 $319,564
Net income$940 $613 $88 
Other comprehensive income (loss): 
  
  
Other comprehensive income (loss):   
Foreign currency translation adjustments, net of zero tax(59,508) 45,618
 (1,324)Foreign currency translation adjustments, net of zero tax(39)56 (24)
Unrealized gain (loss) on derivative instruments and other, net of zero tax (5,810) (3,320) 9,096
Unrealized gain (loss) on derivative instruments and other, net of tax Unrealized gain (loss) on derivative instruments and other, net of tax (24)40 (40)
Comprehensive income$28,081
 $470,832
 $327,336
Comprehensive income$877 $709 $24 
Comprehensive income attributable to redeemable noncontrolling interestComprehensive income attributable to redeemable noncontrolling interest— — 
Comprehensive income attributable to Flex Ltd.Comprehensive income attributable to Flex Ltd.$873 $709 $24 
   
The accompanying notes are an integral part of these consolidated financial statements.

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FLEX LTD.
CONSOLIDATED STATEMENTS OF REDEEMABLE NONCONTROLLING INTEREST AND SHAREHOLDERS' EQUITY

Redeemable
Noncontrolling
Interest
Ordinary SharesAccumulated Other Comprehensive LossTotal
Ordinary Shares   Accumulated Other Comprehensive Loss     TotalAmountShares
Outstanding
AmountAccumulated
Deficit
Unrealized
Gain (Loss) on
Derivative
Instruments
And Other
Foreign
Currency
Translation
Adjustments
Total
Accumulated
Other
Comprehensive
Loss

Shareholders'
Equity
Shares
Outstanding
 Amount Accumulated
Deficit
 Unrealized
Gain (Loss) on
Derivative
Instruments
And Other
 Foreign
Currency
Translation
Adjustments
 Total
Accumulated
Other
Comprehensive
Loss
 Total Flex Ltd.
Shareholders'
Equity
 Noncontrolling
Interests
 Shareholders'
Equity
(In millions)
(In thousands)
BALANCE AT MARCH 31, 2016544,823
 $6,598,999
 $(3,892,212) $(41,522) $(94,393) $(135,915) $2,570,872
 $34,658
 $2,605,530
Repurchase of Flex Ltd. ordinary shares at cost(25,125) (345,782) 
 
 
 
 (345,782) 
 (345,782)
Exercise of stock options2,283
 12,438
 
 
 
 
 12,438
 610
 13,048
Issuance of Flex Ltd. vested shares under restricted share unit awards9,313
 
 
 
 
 
 
 
 
Issuance of subsidiary shares
 
 
 
 
 
 
 9,306
 9,306
Net income
 
 319,564
 
 
 
 319,564
 (8,492) 311,072
Stock-based compensation, net of tax
 79,669
 
 
 
 
 79,669
 (2,339) 77,330
Total other comprehensive income
 
 
 9,096
 (1,324) 7,772
 7,772
 
 7,772
BALANCE AT MARCH 31, 2017531,294
 6,345,324
 (3,572,648) (32,426) (95,717) (128,143) 2,644,533
 33,743
 2,678,276
Repurchase of Flex Ltd. ordinary shares at cost(10,829) (180,050) 
 
 
 
 (180,050) 
 (180,050)
Exercise of stock options667
 2,774
 
 
 
 
 2,774
 256
 3,030
Issuance of Flex Ltd. vested shares under restricted share unit awards6,946
 
 
 
 
 
 
 
 
Issuance of subsidiary shares, net
 
 
 
 
 
 
 63,363
 63,363
Net income
 
 428,534
 
 
 
 428,534
 (7,573) 420,961
Stock-based compensation, net of tax
 80,484
 
 
 
 
 80,484
 849
 81,333
Deconsolidation of subsidiary entity
 
 
 
 
 
 
 (90,638) (90,638)
Total other comprehensive income
 
 
 (3,320) 45,618
 42,298
 42,298
 
 42,298
BALANCE AT MARCH 31, 2018528,078
 6,248,532
 (3,144,114) (35,746) (50,099) (85,845) 3,018,573
 
 3,018,573
BALANCE AT MARCH 31, 2019BALANCE AT MARCH 31, 2019$— 517 $6,136 $(3,012)$(42)$(109)$(151)$2,973 
Repurchase of Flex Ltd. ordinary shares at cost(17,726) (188,978) 
 
 
 
 (188,978) 
 (188,978)Repurchase of Flex Ltd. ordinary shares at cost— (24)(260)— — — — (260)
Exercise of stock options244
 245
 
 
 
 
 245
 
 245
Exercise of stock options— — — — — — 
Issuance of Flex Ltd. vested shares under restricted share unit awards5,952
 
 
 
 
 
 
 
 
Issuance of Flex Ltd. vested shares under restricted share unit awards— — — — — — — 
Net income
 
 93,399
 
 
 
 93,399
 
 93,399
Net income— — — 88 — — — 88 
Stock-based compensation, net of tax
 76,032
 
 
 
 
 76,032
 
 76,032
Stock-based compensationStock-based compensation— — 71 — — — — 71 
Cumulative effect on opening equity of adopting accounting standards and other
 (296) 38,703
 
 
 
 38,407
 
 38,407
Cumulative effect on opening equity of adopting accounting standards and other— — — 22 — — — 22 
Total other comprehensive loss
 
 
 (5,810) (59,508) (65,318) (65,318) 
 (65,318)Total other comprehensive loss— — — — (40)(24)(64)(64)
BALANCE AT MARCH 31, 2019516,548
 $6,135,535
 $(3,012,012) $(41,556) $(109,607) $(151,163) $2,972,360
 $
 $2,972,360
BALANCE AT MARCH 31, 2020BALANCE AT MARCH 31, 2020— 497 5,948 (2,902)(82)(133)(215)2,831 
Repurchase of Flex Ltd. ordinary shares at costRepurchase of Flex Ltd. ordinary shares at cost— (10)(183)— — — — (183)
Issuance of Flex Ltd. vested shares under restricted share unit awardsIssuance of Flex Ltd. vested shares under restricted share unit awards— — — — — — — 
Net incomeNet income— — — 613 — — — 613 
Stock-based compensationStock-based compensation— — 79 — — — — 79 
Total other comprehensive incomeTotal other comprehensive income— — — — 40 56 96 96 
BALANCE AT MARCH 31, 2021BALANCE AT MARCH 31, 2021— 492 5,844 (2,289)(42)(77)(119)3,436 
Sale of subsidiary's redeemable preferred units, net of transaction costSale of subsidiary's redeemable preferred units, net of transaction cost74 — 414 — — — — 414 
Repurchase of Flex Ltd. ordinary shares at costRepurchase of Flex Ltd. ordinary shares at cost— (38)(686)— — — — (686)
Exercise of stock optionsExercise of stock options— — — — — 
Issuance of Flex Ltd. vested shares under restricted share unit awardsIssuance of Flex Ltd. vested shares under restricted share unit awards— — — — — — — 
Net incomeNet income— — 936 — — — 936 
Stock-based compensationStock-based compensation— — 91 — — — — 91 
Total other comprehensive lossTotal other comprehensive loss— — — — (24)(39)(63)(63)
BALANCE AT MARCH 31, 2022BALANCE AT MARCH 31, 2022$78 461 $5,664 $(1,353)$(66)$(116)$(182)$4,129 
The accompanying notes are an integral part of these consolidated financial statements.

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FLEX LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Fiscal Year Ended March 31, Fiscal Year Ended March 31,
2019 2018 2017 2022 20212020
(In thousands) (In millions)
Cash flows from operating activities: 
  
  
Cash flows from operating activities:   
Net income$93,399
 $428,534
 $319,564
Net income$936 $613 $88 
Adjustments to reconcile net income to net cash provided by operating activities: 
  
  
Adjustments to reconcile net income to net cash provided by operating activities:   
Depreciation433,413
 434,432
 432,238
Depreciation409 422 422 
Amortization and other impairment charges 331,539
 120,932
 177,422
Amortization and other impairment charges 75 147 204 
Provision for doubtful accounts (Note 2)41,977
 8,225
 (184)Provision for doubtful accounts (Note 2)(3)24 
Non-cash other loss (income)12,655
 (58,223) 6,858
Other non-cash incomeOther non-cash income(54)(119)(39)
Non-cash lease expenseNon-cash lease expense130 124 122 
Stock-based compensation76,032
 81,346
 77,330
Stock-based compensation91 79 71 
Gain from deconsolidation of subsidiary entity (Note 2)(86,614) (151,574) 
Deferred income taxes(13,856) 43,187
 (20,041)Deferred income taxes(44)(12)
Changes in operating assets and liabilities, net of acquisitions: 
  
  
Changes in operating assets and liabilities, net of acquisitions:   
Accounts receivable(3,628,129) (4,916,843) (5,136,256)Accounts receivable624 (1,615)(2,106)
Contract assets215,877
 
 
Contract assets(226)107 (86)
Inventories(360,152) (354,319) 85,047
Inventories(2,655)(96)(66)
Other current and noncurrent assets(7,541) (138,184) 84,949
Other current and noncurrent assets(295)62 (19)
Accounts payable68,070
 623,148
 268,686
Accounts payable969 103 (15)
Other current and noncurrent liabilities(147,694) 13,004
 (117,721)Other current and noncurrent liabilities1,067 324 (139)
Net cash used in operating activities(2,971,024) (3,866,335) (3,822,108)
Net cash provided by (used in) operating activitiesNet cash provided by (used in) operating activities1,024 144 (1,533)
Cash flows from investing activities: 
  
  
Cash flows from investing activities:   
Purchases of property and equipment(725,606) (561,997) (525,111)Purchases of property and equipment(443)(351)(462)
Proceeds from the disposition of property and equipment 94,219
 44,780
 35,606
Proceeds from the disposition of property and equipment 11 85 106 
Acquisitions of businesses, net of cash acquired(12,796) (268,377) (189,084)Acquisitions of businesses, net of cash acquired(539)— (1)
Divestitures of businesses, net of cash held in divested businesses267,147
 (2,949) 36,731
Proceeds from divestiture of businesses, net of cash held in divested businessesProceeds from divestiture of businesses, net of cash held in divested businesses(3)
Cash collections of deferred purchase price3,585,901
 4,619,933
 4,972,017
Cash collections of deferred purchase price— — 2,566 
Other investing activities, net44,032
 (120,442) (60,329)Other investing activities, net11 67 67 
Net cash provided by investing activities3,252,897
 3,710,948
 4,269,830
Net cash provided by (used in) investing activitiesNet cash provided by (used in) investing activities(951)(202)2,279 
Cash flows from financing activities: 
  
  
Cash flows from financing activities:   
Proceeds from bank borrowings and long-term debt3,199,460
 1,366,000
 312,741
Proceeds from bank borrowings and long-term debt759 2,065 1,070 
Repayments of bank borrowings and long-term debt(3,059,828) (1,420,977) (141,730)Repayments of bank borrowings and long-term debt(284)(1,142)(1,316)
Payments for repurchases of ordinary shares(188,979) (180,050) (349,532)Payments for repurchases of ordinary shares(686)(183)(260)
Proceeds from exercise of stock options245
 2,774
 12,438
Proceeds from sale of subsidiary's redeemable preferred unitsProceeds from sale of subsidiary's redeemable preferred units488 — — 
Other financing activities, net19,398
 44,468
 (76,024)Other financing activities, net(2)
Net cash used in financing activities(29,704) (187,785) (242,107)
Net cash provided by (used in) financing activitiesNet cash provided by (used in) financing activities280 743 (508)
Effect of exchange rates on cash(27,968) (15,079) 17,490
Effect of exchange rates on cash(26)29 (12)
Net change in cash and cash equivalents224,201
 (358,251) 223,105
Net increase in cash and cash equivalentsNet increase in cash and cash equivalents327 714 226 
Cash and cash equivalents, beginning of year1,472,424
 1,830,675
 1,607,570
Cash and cash equivalents, beginning of year2,637 1,923 1,697 
Cash and cash equivalents, end of year$1,696,625
 $1,472,424
 $1,830,675
Cash and cash equivalents, end of year$2,964 $2,637 $1,923 
   
The accompanying notes are an integral part of these consolidated financial statements.

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FLEX LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. ORGANIZATION OF THE COMPANY
Flex Ltd. ("Flex" or the "Company") was incorporatedis the diversified manufacturing partner of choice that helps market-leading brands design, build and deliver innovative products that improve the world. Through the collective strength of a global workforce across approximately 30 countries with responsible, sustainable operations, Flex delivers advanced manufacturing solutions and operates one of the most trusted global supply chains, supporting the entire product lifecycle with fulfillment, after-market, and circular economy solutions for diverse industries including cloud, communications, enterprise, automotive, industrial, consumer devices, lifestyle, healthcare, and energy. Beginning in the Republicfourth quarter of Singaporefiscal year 2022, as a result of the sale of certain Series A preferred units in May 1990. TheNextracker LLC ("Nextracker LLC" or "Nextracker") to a third party (see note 7) and the Company's operations have expanded overcontinuing evaluation to separate the years throughNextracker business and consistent with how the Company's chief operating decision maker ("CODM") allocates resources, assesses performance and makes strategic and operational decisions, Flex now reports Nextracker as a combination of organic growthseparate operating and acquisitions. The Company is a globally-recognized, provider of Sketch-to-Scale® services - innovative design, engineering, manufacturing, and supply chain services and solutions - from conceptual sketch to full-scale production. The Company designs, builds, ships and manages complete packaged consumer and enterprise products, from medical devices and connected automotive systems to sustainable lighting and cloud and data center solutions for companies of all sizes in various industries and end-markets, through its activitiesreportable segment. Nextracker was previously included in the following segments:
HighIndustrial reporting unit within the Flex Reliability Solutions segment. Flex's 3 operating and reportable segments are:
Flex Agility Solutions ("HRS"FAS"), which is comprised of our health solutions business,the following end markets:
Communications, Enterprise and Cloud, including surgical equipment, drug delivery, diagnostics, telemedicine, disposable devices, imagingdata infrastructure, edge infrastructure and monitoring, patientcommunications infrastructure;
Lifestyle, including appliances, consumer packaging, floorcare, micro mobility and ophthalmology;audio; and our automotive business,
Consumer Devices, including vehicle electrification, connectivity, autonomous,mobile and smart technologies;high velocity consumer devices.
Industrial and Emerging IndustriesFlex Reliability Solutions ("IEI"FRS"), which is comprised of energythe following end markets:
Automotive, including advanced metering infrastructure, energy storage,next generation mobility, autonomous, connectivity, electrification, and smart lighting, smart solar energy;technologies;
Health Solutions, including medical devices, medical equipment, and industrial,drug delivery; and
Industrial, including semiconductor and capital equipment, officeindustrial devices, and renewables and grid edge.
Nextracker, the leading provider of intelligent, integrated solar tracker and software solutions household industrialused in utility-scale and lifestyle, industrial automationground-mounted distributed generation solar projects around the world. Nextracker's products enable solar panels to follow the sun’s movement across the sky and kiosks;
Communications & Enterprise Compute ("CEC"), which includes our telecom business of radio access base stations, remote radio heads and small cells for wireless infrastructure; our networking business, which includes optical, routing, and switching products for data and video networks; our server and storage platforms for both enterprise and cloud-based deployments; next generation storage and security appliance products; and rack-level solutions, converged infrastructure and software-defined product solutions; and
Consumer Technologies Group ("CTG"), which includes our consumer-related businesses in IoT enabled devices, audio and consumer power electronics, mobile devices; and various supply chain solutions for consumer, computing and printing devices.optimize plant performance.
The Company's service offerings include a comprehensive range of value-added design and engineering services that are tailored to the various markets and needs of its customers. Other focused service offerings relate to manufacturing (including enclosures, metals, plastic injection molding, precision plastics, machining, and mechanicals), system integration and assembly and test services, materials procurement, inventory management, logistics and after-sales services (including product repair, warranty services, re-manufacturing and maintenance) and, supply chain management software solutions and component product offerings (including flexible printed circuit boards and power adapters and chargers). The Company also provide intelligent, integrated solar tracker and software solutions used in utility-scale and ground-mounted distributed generation solar projects around the world.
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FLEX LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
2. SUMMARY OF ACCOUNTING POLICIES
Basis of Presentation and Principles of Consolidation
The accompanying consolidated financial statements include the accounts of Flex and its majority-owned subsidiaries, after elimination of intercompany accounts and transactions. Amounts included in these consolidated financial statements are expressed in U.S. dollars unless otherwise designated. The Company consolidates its majority-owned subsidiaries and investments in entities in which the Company has a controlling interest. For the consolidated majority-owned subsidiaries in which the Company owns less than 100%, the Company recognizes a noncontrolling interest for the ownership of the noncontrolling owners. As of March 31, 2019, the noncontrolling interest was not material as a result of the deconsolidation of one of the Company's subsidiaries. In prior years, the noncontrolling interest was included on the consolidated balance sheets as a component of total shareholders' equity. The associated noncontrolling owners' interest in the income or losses of these companies is not material to the Company's results of operations for all periods presented, and is classified as a component of interest and other charges (income), net, in the consolidated statements of operations. Noncontrolling interest that is redeemable upon the occurrence of conditions outside of the control of the Company is reported as temporary equity in the consolidated balance sheets.The amount of consolidated net income attributable to Flex Ltd. and to the redeemable noncontrolling interest is presented in the consolidated statements of operations. Refer to note 7 Redeemable Noncontrolling Interest for additional information.

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TableCertain prior period presentations and disclosures were reclassified to ensure comparability with the current period presentation. In fiscal year 2022, the Company elected to include operating income as a subtotal in the consolidated statements of Contents
FLEX LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

operations. In addition, deferred revenue and customer working capital advances, previously included within other current liabilities, have been separately presented as deferred revenue and customer working capital advances in the current liabilities section of the consolidated balance sheets. Further, certain unbilled receivables previously presented as part of accounts receivable, net of allowance for doubtful accounts are now being presented as contract assets on the consolidated balance sheets as billing is to occur subsequent to revenue recognition and is conditional upon other than the passage of time. The Company reclassified $146.8 million of unbilled receivables from accounts receivable, net of allowance for doubtful accounts to contract assets for the period ended March 31, 2021 in order to align with the current year presentation. The Company also recast fiscal year 2021 and 2020 consolidated statements of cash flows reflecting similar reclassifications between changes in contract assets and accounts receivable, net of allowance for doubtful accounts to align with the current year presentation. The reclassifications had no effect on the previously reported results of operations or cash flows from operating activities.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP" or "GAAP")GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Estimates are used in accounting for, among other things: allowances for doubtful accounts; inventory write-downs; valuation allowances for deferred tax assets; uncertain tax positions; valuation and useful lives of long-lived assets including property, equipment, and intangible assets andassets; valuation of goodwill; valuation of investments in privately held companies; asset impairments; fair values of financial instruments, including highly liquid investments, notes receivable and derivative instruments; restructuring charges; contingencies; warranty provisions; incremental borrowing rates in determining the present value of lease payments; accruals for potential price adjustments arising from customer contracts; fair values of assets obtained and liabilities assumed in business combinationscombinations; and the fair values of stock options and restricted share unit awards granted under the Company's stock-based compensation plans. Due to the COVID-19 pandemic and geopolitical conflicts (including the Russian invasion of Ukraine), there has been and will continue to be uncertainty and disruption in the global economy and financial markets. The Company has made estimates and assumptions taking into consideration certain possible impacts due to the COVID-19 pandemic and the Russian invasion of Ukraine. These estimates may change, as new events occur, and additional information is obtained. Actual results may differ from previously estimated amounts, and such differences may be material to the consolidated financial statements. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the period they occur.
Translation of Foreign Currencies
The financial position and results of operations for certain of the Company's subsidiaries are measured using a currency other than the U.S. dollar as their functional currency. Accordingly, all assets and liabilities for these subsidiaries are translated into U.S. dollars at the current exchange rates as of the respective balance sheet dates. Revenue and expense items are translated at the average exchange rates prevailing during the period. Cumulative gains and losses from the translation of these subsidiaries' financial statements are reported as other comprehensive loss,income (loss), a component of shareholders' equity. Foreign exchange gains and losses arising from transactions denominated in a currency other than the functional currency of the entity involved, and re-measurement adjustments for foreign operations where the U.S. dollar is the functional currency, are included in operating results. Non-functional currency transaction gains and losses, and re-measurement adjustments were not
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FLEX LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
material to the Company's consolidated results of operations for all periods presented, and have been classified as a component of interest and other charges (income), net in the consolidated statements of operations.
Revenue Recognition
In determining the appropriate amount of revenue to recognize, Flexthe Company applies the following steps: (i) identifyidentifies the contracts with the customers; (ii) identifyidentifies performance obligations in the contracts; (iii) determinedetermines the transaction price; (iv) allocateallocates the transaction price to the performance obligations per the contracts; and (v) recognizerecognizes revenue when (or as) the Company satisfies a performance obligation. Further, the Company assesses whether control of the productproducts or services promised under the contract is transferred to the customer at a point in time (PIT) or over time (OT). FlexThe Company is first required to evaluate whether its contracts meet the criteria for OT recognition. The Company has determined that for a portion of its contracts, itthe Company is manufacturing products for which there is no alternative use (due to the unique nature of the customer-specific product and IPintellectual property restrictions) and Flexthe Company has an enforceable right to payment including a reasonable profit for work-in-progress inventory with respect to these contracts. For certain other contracts, the Company’s performance creates and enhances an asset that the customer controls as the Company performs under the contract. As a result, revenue is recognized under these contracts OT based on the cost-to-cost method as it best depicts the transfer of control to the customer measured based on the ratio of costs incurred to date as compared to the total estimated costs at completion of the performance obligation. For all other contracts that do not meet these criteria, the Company recognizes revenue when it has transferred control of the related manufactured products which generally occurs upon delivery and passage of title to the customer. Certain of the Company’s customer agreements include potential price adjustments which may result in variable consideration. These price adjustments include, but are not limited to, sharing of cost savings, committed price reductions, material margins earned over the period that are contractually required to be paid to the customers, rebates, refunds tied to performance metrics such as on-time delivery, and other periodic pricing resets that may be refundable to customers. The Company recognizes estimates of this variable consideration that are not expected to result in a significant revenue reversal in the future, primarily based on the amount of potential refunds required by the contract, historical experience and other surrounding facts and circumstances. Refer to note 3 "Revenue Recognition"4 "Revenue" for further details.
On April 1, 2018, the Company adopted the Accounting Standard Codification 606 ("ASC 606") using the modified retrospective approach by applying the guidance to all open contracts at the adoption date and has implemented revised accounting policies, new operational and financial reporting processes, enhanced systems capabilities and relevant internal controls.
As part of adopting ASC 606, revenue for certain customer contracts where the Company is manufacturing products for which there is no alternative use and the Company has an enforceable right to payment including a reasonable profit for work-in-progress, revenue is recognized over time (i.e., as the Company manufactures the product) instead of upon shipment of products. In addition to the following disclosures, note 3 "Revenue Recognition" provides further disclosures required by the new standard.

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FLEX LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The cumulative effect of change made to the Company's April 1, 2018 condensed consolidated balance sheet for the adoption of ASC 606 was as follows:
Condensed Consolidated Balance Sheet     
 Impact of Adopting ASC 606
 Balance at March 31, 2018 Adjustments Balance at April 1, 2018
 
(In thousands)

ASSETS     
Contract assets$
 $451,287
 $451,287
Inventories3,799,829
 (447,752) 3,352,077
Other current assets1,380,466
 (51,479) 1,328,987
      
LIABILITIES AND SHAREHOLDERS’ EQUITY     
Other current liabilities1,719,418
 (87,897) 1,631,521
Other liabilities531,587
 2,098
 533,685
      
Accumulated deficit$(3,144,114) $37,855
 $(3,106,259)
The adoption of ASC 606 resulted in the establishment of contract asset and contract liability balance sheet accounts and in the reclassification to these new accounts from certain asset and liability accounts, primarily inventories. The decrease in accumulated deficit in the table above reflects $37.9 million of net adjustments to the balance sheet as of April 1, 2018, resulting from the adoption of ASC 606 primarily related to certain customer contracts requiring an over-time method of revenue recognition. The declines in inventories and other current assets reflect reclassifications to contract assets due to the earlier recognition of certain costs of products sold for over-time contracts. The decline in other current liabilities is primarily due to the reclassification of payments from customers in advance of work performed to contract assets to reflect the net position of the related over-time contracts.
The following tables summarize the impacts of ASC 606 adoption on the Company’s consolidated balance sheets and consolidated statements of operations:
Condensed Consolidated Balance Sheet     
As of March 31, 2019     
 Impact of Adopting ASC 606
 As Reported Adjustments Balance without ASC 606 Adoption
 
(In thousands)

ASSETS     
Contract assets$216,202
 $(216,202) $
Inventories3,722,854
 252,844
 3,975,698
Other current assets854,790
 8,865
 863,655
      
LIABILITIES AND SHAREHOLDERS’ EQUITY     
Other current liabilities1,426,075
 65,705
 1,491,780
      
Accumulated deficit$(3,012,012) $(35,114) $(3,047,126)

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FLEX LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Condensed Consolidated Statement of Operations     
 Fiscal Year Ended March 31, 2019
 Impact of Adopting ASC 606
 As Reported Adjustments Balance without ASC 606 Adoption
 (In thousands)
Net sales$26,210,511
 $(25,665) $26,184,846
Cost of sales (including restructuring charges)24,692,736
 (28,406) 24,664,330
Gross profit$1,517,775
 $2,741
 $1,520,516

In the first quarter of fiscal year 2019, to align contractual terms across the vast majority of customers to allow the Company to efficiently and accurately manage its contracts the Company waived certain contractual rights to bill profit for work in progress in the event of a contract termination, which is expected to be infrequent. These modifications resulted in revenue from these customers being recognized upon shipment of products, rather than over time (i.e., as the Company manufactures products) as further explained in note 3. The result of the modifications for the fiscal year 2019 reduced revenue and gross profit by approximately $132.7 million and $9.3 million, respectively, compared to amounts that would have been reported both (i) under ASC 606 had the Company not amended the contracts, and (ii) had the Company not adopted ASC 606.
The impacts to revenue and gross profit as a result of the adoption of ASC 606 are driven by a number of factors including the timing of inventory levels for over time ("OT") customers at the end of each reporting period and the mix of customer profitability.
For the fiscal year ended March 31, 2019 the as reported revenue was approximately $25.7 million higher and the gross profit approximately $2.7 million lower than it would have been without the adoption of ASC 606. Additional revenue of $158.4 million was reported under ASC 606 due to the accelerated timing of recognition of revenue for contracts which meet the criteria for over-time recognition and revenue recognized for certain contracts that no longer qualify for net revenue treatment. Approximately $6.5 million of additional gross profit was recognized on the customers qualifying for accelerated revenue recognition. These increases were offset by reductions of $132.7 million of revenue and $9.3 million of gross profit respectively, as a result of the waiver of contract rights noted above. There was no material tax impact for the fiscal year ended March 31, 2019 from the adoption of ASC 606.
The Company applies the following practical expedients:
The Company elected to not disclose information about remaining performance obligations as its performance obligations generally have an expected duration of one year or less.

In accordance with ASC 606-10-25-18B the Company will account for certain shipping and handling as activities to fulfill the promise to transfer the good, instead of a promised service to its customer.

In accordance with ASC 606-10-32-18 the Company elected to not adjust the promised amount of consideration for the effects of a significant financing component as the Company expects, at contract inception, that the period between when the entity transfers a promised good or service to a customer and when the customer pays for that good or service will generally be one year or less.
Concentration of Credit Risk
Financial instruments which potentially subject the Company to concentrations of credit risk are primarily accounts receivable, derivative instruments, and cash and cash equivalents.
Customer Credit Risk
The Company has an established customer credit policy, through which it manages customer credit exposures through credit evaluations, credit limit setting, monitoring, and enforcement of credit limits for new and existing customers. The Company performs ongoing credit evaluations of its customers' financial condition and makes provisions for doubtful accounts

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FLEX LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

based on the outcome of those credit evaluations. The Company evaluates the collectability of its accounts receivable based on specific customer circumstances, current economic trends, historical experience with collections and the age of past due receivables. To the extent the Company identifies exposures as a result of credit or customer evaluations, the Company also reviews other customer related exposures, including but not limited to inventory and related contractual obligations.
The following table summarizes the activity in the Company's allowance for doubtful accounts during fiscal years 2019, 20182022, 2021 and 2017:2020:
Balance at
Beginning
of Year
Charged to
Costs and
Expenses (1)
Deductions/
Write-Offs
Balance at
End of
Year
(In millions)
Allowance for doubtful accounts:
Year ended March 31, 2020$91 $24 $(19)$96 
Year ended March 31, 202196 (40)61 
Year ended March 31, 202261 (3)(2)56 
 Balance at
Beginning
of Year
 Charged to
Costs and
Expenses
 Deductions/
Write-Offs
 Balance at
End of
Year
 (In thousands)
Allowance for doubtful accounts:       
Year ended March 31, 2017$64,608
 $(184) $(7,122) $57,302
Year ended March 31, 201857,302
 8,225
 (5,476) 60,051
Year ended March 31, 2019 (1)60,051
 41,977
 (10,632) 91,396


(1)Charges incurred and recoveries during fiscal years 2022, 2021 and 2020 are primarily for costs and expenses or bad debt recoveries related to various distressed customers.
(1)Charges incurred during fiscal year 2019 are primarily for costs and expenses related to various distressed customers.
No customer accounted for greater than 10% of the Company's net sales in fiscal years 2019, 20182022, 2021 and 2017.2020. No customer accounted for greater than 10% of the Company's total balance of accounts receivable, net as of fiscal year ended
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FLEX LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
March 31, 2022. One customer within the Company's CTGFAS segment accounted for approximately 11% of the Company's total balance of accounts receivable, net inas of fiscal year 2019. Oneended March 31, 2021. A different customer within the Company's CTGFAS segment accounted for approximately 17%10% of the Company's total balances of accounts receivable, net inas of fiscal years 2018 and 2017, respectively.year ended March 31, 2020.
The Company's ten largest customers accounted for approximately 43%34%, 41%36% and 43%39%, of its net sales in fiscal years 2019, 20182022, 2021 and 2017,2020, respectively.
Derivative Instruments
The amount subject to credit risk related to derivative instruments is generally limited to the amount, if any, by which a counterparty's obligations exceed the obligations of the Company with that counterparty. To manage counterparty risk, the Company limits its derivative transactions to those with recognized financial institutions. See additional discussion of derivatives in note 8.10.
Cash and Cash Equivalents
The Company maintains cash and cash equivalents with various financial institutions that management believes to be of high credit quality. These financial institutions are located in many different locations throughout the world. The Company's investment portfolio, which consists of short-term bank deposits and money market accounts, is classified as cash equivalents on the consolidated balance sheets.
All highly liquid investments with maturities of three months or less from original dates of purchase are carried at cost, which approximates fair market value, and are considered to be cash equivalents. Cash and cash equivalents consist of cash deposited in checking accounts, money market funds and time deposits.

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FLEX LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Cash and cash equivalents consisted of the following:
As of March 31,
20222021
(In millions)
Cash and bank balances$679 $1,130 
Money market funds and time deposits2,285 1,507 
$2,964 $2,637 
 As of March 31,
 2019 2018
 (In thousands)
Cash and bank balances$1,222,737
 $1,019,802
Money market funds and time deposits473,888
 452,622
 $1,696,625
 $1,472,424


Inventories
Inventories are stated at the lower of cost (on a first-in, first-out basis) or net realizable value. The stated cost is comprised of direct materials, labor and overhead. The components of inventories, net of applicable lower of cost or net realizable value write-downs, were as follows:
As of March 31,
20222021
(In millions)
Raw materials$5,290 $2,831 
Work-in-progress602 459 
Finished goods688 605 
$6,580 $3,895 
 As of March 31,
 2019 2018
 (In thousands)
Raw materials$2,922,101
 $2,760,410
Work-in-progress366,135
 450,569
Finished goods434,618
 588,850
 $3,722,854
 $3,799,829

Due to the adoption of ASC 606, amounts that would have been reported as inventory under prior guidance are now included in contract assets or liabilities, depending on the net position of the contract, as disclosed above. As a result of this accounting change, work-in-progress and finished goods as of March 31, 2019 are $252.8 million less than they would have been, had the Company not adopted ASC 606. The comparative information as of March 31, 2018, has not been restated and continues to be reported under the accounting standards in effect at that time.
Property and Equipment, Net
Property and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation and amortization are recognized on a straight-line basis over the estimated useful lives of the related assets, with the exception of building leasehold improvements, which are depreciated over the term of the lease, if shorter. Repairs and maintenance costs are expensed as incurred. Property and equipment wasis comprised of the following:
62
 Depreciable
Life
(In Years)
 As of March 31,
  2019 2018
   (In thousands)
Machinery and equipment3 - 10 $3,305,335
 $3,004,707
Buildings30 1,111,708
 1,154,881
Leasehold improvementsup to 30 453,119
 414,917
Furniture, fixtures, computer equipment and software3 - 7 501,994
 482,248
Land 121,976
 152,992
Construction-in-progress 291,458
 287,724
   5,785,590
 5,497,469
Accumulated depreciation and amortization  (3,449,377) (3,257,963)
Property and equipment, net  $2,336,213
 $2,239,506

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Depreciable
Life
(In Years)
As of March 31,
20222021
(In millions)
Machinery and equipment2 - 10$3,540 $3,381 
Buildings301,123 1,103 
Leasehold improvementsShorter of lease term or useful life of the improvement564 500 
Furniture, fixtures, computer equipment and software3 - 7503 491 
Land113 113 
Construction-in-progress261 255 
6,104 5,843 
Accumulated depreciation and amortization(3,979)(3,746)
Property and equipment, net$2,125 $2,097 


Total depreciation expense associated with property and equipment was approximately $433.4$408.9 million, $434.4$422.3 million and $432.2$422.4 million in fiscal years 2019, 20182022, 2021 and 2017,2020, respectively.
The Company reviews property and equipment for impairment at least annually and whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of property and equipment is determined by comparing its carrying amount to the lowest level of identifiable projected undiscounted cash flows the property and equipment are expected to generate. An impairment loss is recognized when the carrying amount of property and equipment exceeds its fair value.
Deferred Income Taxes
The Company provides for income taxes in accordance with the asset and liability method of accounting for income taxes. Under this method, deferred income taxes are recognized for the tax consequences of temporary differences between the carrying amount and the tax basis of existing assets and liabilities by applying the applicable statutory tax rate to such differences. Additionally, the Company assesses whether each income tax position is "more likely than not" of being sustained on audit, including resolution of related appeals or litigation, if any. For each income tax position that meets the "more likely than not" recognition threshold, the Company would then assess the largest amount of tax benefit that is greater than 50% likely of being realized upon effective settlement with the tax authority.
Accounting for Business and Asset Acquisitions
The Company has strategically pursued business and asset acquisitions, which are accounted for using the acquisition method of accounting. During fiscal year 2019, the Company adopted the Accounting Standard Update (ASU) No. 2017-01 “Clarifying the Definition of a Business” which did not have a material impact to its financial position as there were no material acquisitions during the period (Refer to "Recently Adopted Accounting Pronouncement" below for more details on the ASU). The fair value of the net assets acquired and the results of the acquired businesses are included in the Company's consolidated financial statements from the acquisition dates forward. The Company is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and results of operations during the reporting period. Estimates are used in accounting for, among other things, the fair value of acquired net operating assets, property and equipment, intangible assets and related deferred tax liabilities, useful lives of plant and equipment and amortizable lives for acquired intangible assets. Any excess of the purchase consideration over the fair value of the identified assets and liabilities acquired is recognized as goodwill.
The Company estimates the preliminary fair value of acquired assets and liabilities as of the date of acquisition based on information available at that time. Contingent consideration is recorded at fair value as of the date of the acquisition with subsequent adjustments recorded in earnings. Changes to valuation allowances on acquired deferred tax assets are recognized in the provision for, or benefit from, income taxes. The valuation of these tangible and identifiable intangible assets and liabilities is subject to further management review and may change materially between the preliminary allocation and end of the purchase price allocation period. Any changes in these estimates may have a material effect on the Company's consolidated operating results or financial position.

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Goodwill
Goodwill is testedIn accordance with accounting guidance on goodwill, the Company evaluates goodwill for impairment at the reporting unit level annually, and in certain circumstances such as a change in reporting units or whenever there are indications that goodwill might be impaired. The Company performed its annual goodwill impairment assessment on an annual basisJanuary 1, 2022 and whenever events oras a result of the quantitative assessment of its goodwill, the Company determined that no impairment existed as of the date of the impairment test because the fair value of each one of its reporting units exceeded its respective carrying value. As described in note 1 and note 7, during the fourth quarter of fiscal year 2022, as a result of the sale of certain Series A preferred units in Nextracker to a third party and the Company's continuing evaluation to separate the Nextracker business and consistent with how the Company's CODM allocates resources, assesses performance and makes strategic and operational decisions, Flex now reports its financial performance based on 3 operating and reportable segments. With these changes, in circumstances indicate that the carrying amountCompany also revised its reporting units, separating Nextracker from the Industrial reporting unit. Accordingly, the Company reallocated total Industrial goodwill between Nextracker and the updated Industrial reporting unit (excluding the Nextracker business) based on each reporting unit’s relative fair value as of goodwill may not be recoverable. February 1, 2022.
Recoverability of goodwill is measured at the reporting unit level by comparing the reporting unit's carrying amount, including goodwill, to the fair value of the reporting unit, which typically is measured based upon, among other factors, market multiples for comparable companies as well as a discounted cash flow analysis. These approaches use significant unobservable inputs, or Level 3 inputs, as defined by the fair value hierarchy and require management to make various judgmental assumptions about sales, operating margins, growth rates and discount rates which consider itsthe Company's budgets, business plans and economic projections, and are believed to reflect market participant views. Some of the inherent estimates and assumptions used in determining fair value of the reporting units are outside the control of management, including interest rates, cost of capital, tax rates, market EBITDA comparablecomparables and credit ratings. While the Company believes it has made reasonable estimates and assumptions to calculate the fair value of the reporting units, it is possible a material change could occur. If the actual results are not consistent with management's estimates and assumptions used to calculate fair value, it could result in material impairments of the Company's goodwill. During fiscal year 2019, the Company adopted ASU 2017-04 "Simplifying the Test for Goodwill Impairment", which simplifies the subsequent measurement of goodwill by eliminating step 2 from the goodwill impairment test. The ASU did not have a material impact to Flex's financial position during the period as there were no identified impairments during the period. (Refer to "Recently Adopted Accounting Pronouncement" below for more details on the ASU).
If the recorded value of the assets, including goodwill, and liabilities ("net book value") of any reporting unit exceeds its fair value, an impairment loss may be required to be recognized. Further, to the extent the net book value of the Company as a whole is greater than its fair value in the aggregate, all, or a significant portion of its goodwill may be considered impaired.
The Company has fourcompleted its acquisition of Anord Mardix in December 2021. The acquisition generated $272 million of goodwill in the Industrial reporting units, which correspondunit and primarily related to its four reportable operating segments: HRS, IEI, CECvalue placed on the acquired employee workforce, service offerings and CTG. The Company concluded that there was no change to its reporting units in fiscal year 2019 and performed its goodwill impairment assessment on January 1, 2019. The Company performed a quantitative assessment of its goodwill and determined that no impairment existed ascapabilities of the date of the impairment test because the fair value of each one of its reporting units exceeded its respective carrying value. As of the date of the impairment test, all reporting units' fair values were 25% oracquired business. The goodwill is not deductible for income tax purposes. Refer to note 19 for more over their respective carrying values, with the exception of the CTG reporting unit which was 22% in excess of its carrying value. The estimated future results for CTG used in the impairment analysis reflect the Company’s revised strategy including the wind down of the Company's NIKE operations in Mexico, further restrictions on capital expenditures related to the Company's expansion into India and the Company's focus on partnering with well-funded, leading multi-national brands that control multiple categories of products and have regional demand requirements.

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information.
The following table summarizes the activity in the Company's goodwill during fiscal years 20192022 and 2018 (in thousands):2021:
FASFRSNextrackerTotal
(In millions)
Balance at March 31, 2020$370 $695 $— $1,065 
Divestitures— (1)— (1)
Foreign currency translation adjustments25 — 26 
Balance at March 31, 2021$371 $719 $— $1,090 
Reporting unit reallocation— (204)204 — 
Acquisitions— 272 — 272 
Foreign currency translation adjustments— (20)— (20)
Balance at March 31, 2022$371 $767 $204 $1,342 
 HRS IEI CEC CTG Total
Balance, as of March 31, 2017$420,935
 $337,707
 $115,002
 $111,223
 $984,867
Additions (1)75,280
 
 9,730
 
 85,010
Divestitures (2)
 
 
 (3,475) (3,475)
Foreign currency translation adjustments (3)54,768
 
 
 
 54,768
Balance, as of March 31, 2018550,983
 337,707
 124,732
 107,748
 1,121,170
Additions (1)
 
 10,984
 
 10,984
Divestitures (2)(5,303) (4,450) (6,391) (4,484) (20,628)
Foreign currency translation adjustments (3)(38,471) 
 
 
 (38,471)
Balance, as of March 31, 2019$507,209
 $333,257
 $129,325
 $103,264
 $1,073,055

(1)The goodwill generated from the Company's business combinations completed during the fiscal years 2019 and 2018 are primarily related to value placed on the employee workforce, service offerings, capabilities and expected synergies. The goodwill is not deductible for income tax purposes. Refer to the discussion of the Company's business acquisitions in note 17. Also included in fiscal year 2018 were adjustments based on management's estimates resulting from its review and finalization of the valuation of assets and liabilities acquired through certain business combinations completed in a period subsequent to the respective acquisition. These adjustments were not individually, nor in the aggregate, significant to the Company during the fiscal year ended March 31, 2018.
(2)During the fiscal year ended March 31, 2019, the Company divested its China-based Multek operations along with another non-strategic immaterial business, and as a result, recorded an aggregate reduction of goodwill of $20.6 million. During the fiscal year ended March 31, 2018, the Company disposed of Wink Labs Inc. ("Wink"), a business within the CTG segment.
(3)During the fiscal years ended March 31, 2019 and 2018, the Company recorded $38.5 million and $54.8 million, respectively, of foreign currency translation adjustments primarily related to historical acquisitions, as the U.S. Dollar fluctuated against foreign currencies.
Other Intangible Assets
The Company's acquired intangible assets are subject to amortization over their estimated useful lives and are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an intangible asset may not be recoverable. An impairment loss is recognized when the carrying amount of an intangible asset exceeds its fair value. The
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Company reviewed the carrying value of its intangible assets as of March 31, 20192022 and concluded that such amounts continued to be recoverable.
Intangible assets are comprised of customer-related intangible assets that include contractual agreements and customer relationships;relationships, and licenses and other intangible assets that are primarily comprised of licenses, and also include patents and trademarks, and developed technologies. Generally, both customer-related intangible assets and licenses and other intangible assets are amortized on a straight-line basis, over a period of up to ten years. No residual value is estimated for any intangible assets. The fair value of the Company's intangible assets purchased through business combinations is determined based on management's estimates of cash flow and recoverability.
During fiscal year 2022, the total value of intangible assets increased by $273.0 million as a result of the Company's initial estimated value of intangible assets from the Anord Mardix acquisition. This acquisition contributed an additional $147.0 million in customer-related intangible assets, and $126.0 million in licenses and other intangibles assets such as trade names and technology. Refer to note 19 for additional information.
The components of acquired intangible assets are as follows:
As of March 31, 2022As of March 31, 2021
Weighted-Average Remaining Useful life
(in Years)
Gross
Carrying
Amount
Accumulated
Amortization
Net
Carrying
Amount
Gross
Carrying
Amount
Accumulated
Amortization
Net
Carrying
Amount
(In millions)
Intangible assets:
Customer-related intangibles6.8$385 $(157)$228 $276 $(154)$122 
Licenses and other intangibles6.8319 (136)183 250 (159)91 
Total$704 $(293)$411 $526 $(313)$213 
 As of March 31, 2019 As of March 31, 2018
 Gross
Carrying
Amount
 Accumulated
Amortization
 Net
Carrying
Amount
 Gross
Carrying
Amount
 Accumulated
Amortization
 Net
Carrying
Amount
 (In thousands)
Intangible assets:           
Customer-related intangibles$297,306
 $(113,627) $183,679
 $306,943
 $(79,051) $227,892
Licenses and other intangibles274,604
 (127,288) 147,316
 304,007
 (107,466) 196,541
Total$571,910
 $(240,915) $330,995
 $610,950
 $(186,517) $424,433

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Total intangible asset amortization expense recognized in operations during fiscal years 2019, 20182022, 2021 and 20172020 was $74.4$67.9 million, $78.6$61.8 million and $81.4$64.1 million, respectively. The gross carrying amounts of intangible assets are removed when fully amortized. During fiscal year 2019,2022, the gross carrying amounts of fully amortized intangible assets totaled $9.4$81.4 million. The Company also recorded $21.0$7.1 million of foreign currency translation adjustments during fiscal year 2019,2022, as the U.S. Dollar fluctuated against foreign currencies for certain intangibles. As of March 31, 2019, the weighted-average remaining useful lives of the Company's intangible assets were approximately 6.3 years for customer-related intangibles and approximately 5.5 years for licenses and other intangible assets. The estimated future annual amortization expense for acquired intangible assets is as follows:
Fiscal Year Ending March 31,Amount
(In millions)
2023$87 
202472 
202565 
202644 
202737 
Thereafter106 
Total amortization expense$411 
Fiscal Year Ending March 31,Amount
 (In thousands)
2020$64,917
202160,604
202252,099
202344,390
202442,830
Thereafter66,155
Total amortization expense$330,995


The Company owns or licenses various United States and foreign patents relating to a variety of technologies. For certain of the Company's proprietary processes, inventions, and works of authorship, the Company relies on trade secret or copyright protection. The Company also maintains trademark rights (including registrations) for the Company's corporate name and several other trademarks and service marks that the Company uses in the Company's business in the United States and other countries throughout the world. The Company has implemented appropriate policies and procedures (including both technological means and training programs for the Company's employees) to identify and protect the Company's intellectual property, as well as that of the Company's customers and suppliers. As of March 31, 20192022 and 2018,2021, the carrying value of the Company's intellectual property was not material.
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Derivative Instruments and Hedging Activities
All derivative instruments are recognized on the consolidated balance sheets at fair value. If the derivative instrument is designated as a cash flow hedge, effectiveness is tested monthly using a regression analysis of the change in spot currency rates and the change in present value of the spot currency rates. The spot currency rates are discounted to present value using functional currency Inter-bank Offering Rates over the maximum length of the hedge period. The effective portion of changes in the fair value of the derivative instrument (excluding time value) is recognized in shareholders' equity as a separate component of accumulated other comprehensive income (loss), and recognized in the consolidated statements of operations when the hedged item affects earnings. Ineffective and excluded portions of changes in the fair value of cash flow hedges are recognized in earnings immediately. If the derivative instrument is designated as a fair value hedge, the changes in the fair value of the derivative instrument and of the hedged item attributable to the hedged risk are recognized in earnings in the current period. Cash receipts and cash payments related to derivative instruments are recorded in the same category as the cash flows from the items being hedged on the consolidated statements of cash flows. Additional information is included in note 8.
Other Current Assets
Other current assets include approximately $292.5 million and $445.4 million as of March 31, 2019 and 2018, respectively for the deferred purchase price receivable from the Company's Asset-Backed Securitization programs. See note 10 for additional information. Assets held for sale related to the China-based Multek operations previously recorded in other current assets have been removed from the consolidated balance sheet as of March 31, 2019, following the execution of the divestiture during the Company's second quarter of fiscal year 2019. See note 17 for additional information.

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10.
Investments
The Company has an investment portfolio that consists of strategic investments in privately held companies, and certain venture capital funds which are included within other assets. These privately held companies range from startups to more mature companies with established revenue streams and business models. As of March 31, 2019,2022, and March 31, 2018,2021, the Company's investments in non-consolidated companies totaled $294.1$131.3 million and $411.1$102.8 million, respectively.
During the last half of fiscal year 2019, the Company reassessed its strategy with respect to its investment portfolio. As a result of the change in the Company's strategy and due to market valuation changes,2022, the Company recognized an aggregate net charge related to investment impairments and dispositions$61.0 million of approximately $193 million for the fiscal year ended March 31, 2019, which is recordedequity in earnings, associated with its equity method investments, in other charges (income), net on the consolidated statement of operations. The aggregate charge wasAdditional information is included in note 17.
During fiscal year 2021, the Company recognized $83.5 million of equity in earnings, associated with its equity method investments in other charges (income), net on the consolidated statement of operations. Also during fiscal year 2021, in connection with the Company’s ongoing assessment of recoverability of its investment portfolio, the Company concluded that the carrying amounts of certain non-core investments were other than temporarily impaired and recognized a $36.5 million total impairment in other charges (income), net on the consolidated statement of operations primarily driven by write-downs ofrelated to the Company's investment positions in a non-core cost method investment and Elementum as well as other investment impairments that were individually immaterial.Bright Machines.
Non-consolidated investments in entities are accounted for using the equity method when the Company has an investment in common stock or in-substance common stock, and either (a) has the ability to significantly influence the operating decisions of the issuer, or (b) if the Company has a voting percentage generally equal to or generally greater than 20% but less than 50%, and for non-majority-owned investments in partnerships when generally greater than 5%. The equity in the earnings or losses of the Company's equity method investments was not material to the consolidated results of operations for any period presented and is included in interest and other, net. Cost method is used for investments whichwhere the Company does not have the ability to significantly influence the operating decisions of the investee, or if the Company’s investment is in securities other than common stock or in-substance common stock.
The Company monitors these investments for impairment indicators and makes appropriate reductions in carrying values as required whenever events or changes in circumstances indicate that the assets may be impaired. The factors the Company considers in its evaluation of potential impairment of its investments include, but are not limited to, a significant deterioration in the earnings performance or business prospects of the investee, or factors that raise significant concerns about the investee’s ability to continue as a going concern, such as negative cash flows from operation or working capital deficiencies. Fair values of these investments, when required, are estimated using unobservable inputs, or Level 3 inputs, as defined by the fair value hierarchy, and require management to make various judgmental assumptions primarily about primarily comparable company multiples and discounted cash flow projections. Some of the inherent estimates and assumptions used in determining the fair value of the investments are outside the control of management. While the Company believes it has made reasonable estimates and assumptions to calculate the fair value of the investments, it is possible a material change could occur. If the actual results are not consistent with management's estimates and assumptions used to calculate fair value, it could result in material impairments of investments.
For investments accounted for under the cost method that do not have readily determinable fair values, the Company has elected, per ASU 2016-01 and commencing on April 1, 2018, to measuremeasures them at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer.
Investment in Elementum SCM (Cayman) Ltd ("Elementum)
Starting in fiscal year 2014, the Company had a majority owned subsidiary, Elementum, which qualified as a variable interest entity for accounting purposes. The Company owned a majority of Elementum' s outstanding equity (consisting primarily of preferred stock) and as of March 31, 2017, controlled its board of directors, which gave the Company the power to direct the activities of Elementum that most significantly impact its economic performance. Accordingly, the Company recognized the carrying value of the noncontrolling interest as a component of total shareholders' equity, and the consolidated financial statements included the financial position and results of operations of Elementum as of and for the period ended March 31, 2017.
During the second quarter of fiscal year 2018, the Company and other minority shareholders of Elementum amended certain agreements resulting in joint control of the board of directors between the Company and other non-controlling interest holders. As a result, the Company concluded it is no longer the primary beneficiary of Elementum and accordingly, deconsolidated the entity and recognized a gain on deconsolidation of approximately $151.6 million with no related tax impact, which is included in other charges (income), net on the consolidated statement of operations for the year ended March 31, 2018. Further, the Company derecognized approximately $72.6 million of cash of Elementum as of the date of deconsolidation, which was reflected as an outflow from investing activities within other investing activities, net in the consolidated statement of cash

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Customer Working Capital Advances
flows for the year ended March 31, 2018. The Company no longer recognizes the carrying value of the noncontrolling interest as a component of total shareholder’s equity. As of March 31, 2018, the carrying value of the Company's variable interest in Elementum was approximately $125 million included in other assets on the consolidated balance sheet.
During the fourth quarter of fiscal year 2019, the CompanyCustomer working capital advances were $1.4 billion and Elementum executed agreements that provided for, among other things, the termination of certain commercial agreements between the Company and Elementum, the repurchase of certain shares of Elementum held by the Company and the removal of certain rights associated with such shares, including the Company’s right to elect certain members of Elementum’s board of directors. Management initiated a valuation of the Company's remaining investment using the public guideline company approach which relied on inputs such as comparable company multiples that would be considered Level 3 inputs in the fair value hierarchy. The latest valuation of the remaining investment resulted in a total charge of approximately $84 million, which is included in other charges (income), net on the consolidated statement of operations for the year ended March 31, 2019. The Company's remaining investment in Elementum is accounted for as a cost method investment, and is included in other assets on the consolidated balance sheet.
Joint Venture with RIB Software AG
During fiscal year 2017, the Company formed a joint venture with RIB Software AG, a provider of technology for the construction industry. The Company contributed $60.0 million for a non-controlling interest in this joint venture which was included in cash flows from other investing activities net in the consolidated statement of cash flows for the year ended March 31, 2017.
During the third quarter of fiscal year 2019, the Company sold its non-controlling interest in the joint venture with RIB Software AG, a provider of technology for the construction industry, to its former joint venture partner, for a total consideration of approximately $48.4 million. The Company recognized an immaterial gain on sale, which is recorded in other charges (income), net on the consolidated statement of operations for the fiscal year ended March 31, 2019. The cash inflows received as consideration have been included in cash flows from other investing activities during the same period.
Investment in Unrelated Third-party Company
During the third quarter of fiscal year 2019, the Company noted, as part of the evaluation of its investment portfolio, a significant deterioration in a certain investee's performance and near-term projections. Additionally, the Company identified certain risks around that investee's capability to acquire additional funding to support its operation in the near term. The Company considered these facts as triggering events for impairment evaluations, and as a result recognized a $76 millionimpairment charge during the fiscal year ended March 31, 2019, which is included in other charges (income), net on the consolidated statement of operations. The remaining carrying value of this investment at March 31, 2019 was immaterial, and was determined using a discounted cash flow approach which relied on inputs that would be considered Level 3 inputs in the fair value hierarchy.
Bright Machines (formerly known as AutoLab AI)
During the first quarter of fiscal year 2019, the Company transferred existing employees and equipment with a net book value of approximately $35 million along with certain related software and Intellectual Property ("IP"), into the newly created Bright Machines, in exchange for shares of preferred stock and a controlling financial interest in Bright Machines. Bright Machines is a privately held software-as-a service (SaaS) and hardware company focused on developing and deploying an automation solution worldwide. The Company has concluded that Bright Machines does not qualify as a variable interest entity for purposes of evaluating whether it has a controlling financial interest.
Subsequent to the initial formation and prior to June 29, 2018, Bright Machines received equity funding from third party investors and expanded the board of directors, resulting in dilution of the Company's voting interest to below 50%. As a result, the Company concluded it no longer held a controlling financial interest in Bright Machines and accordingly, deconsolidated the entity.
The fair value of the Company’s non-controlling interest in Bright Machines upon deconsolidation was approximately $127.6 million as of the date of deconsolidation. The Company accounts for its investment in Bright Machines under the equity method, with the carrying amount included in other assets on the consolidated balance sheet. The value of the Company’s interest on the date of deconsolidation was based on management’s estimate of the fair value of Bright Machines at that time. Management relied on a multi-stage process which involved calculating the enterprise and equity value of Bright Machines, then allocating the equity value of the entity to the Company’s securities. The enterprise value of Bright Machines was

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estimated based on the value implied by the equity funding Bright Machines received from third parties in the same period (i.e., level 2 inputs). The Company recognized a gain on deconsolidation of approximately $87 million with no material tax impact, which is included in other charges (income), net on the consolidated statement of operations.
Concurrently with the deconsolidation, the Company engaged Bright Machines as a strategic partner to develop and deploy automation solutions for Flex and entered into a 5-year subscription agreement for use of fixed assets along with other automation services. The subscription agreement provides the Company with the use of the assets previously contributed to Bright Machines and accordingly is accounted for as a capital lease. As a result, the Company has recognized a capital lease asset and obligation with balances of $30.3 million and $34.8$471.5 million, as of March 31, 2019, respectively, in the consolidated balance sheets.
Pro-forma financials have not been presented because the effects were not material to the Company’s consolidated financial position2022 and results of operation for all periods presented. Bright Machines became a related party to the Company starting on the date of deconsolidation. Subscription fees under the Bright Machines agreement were immaterial for the fiscal year ended March 31, 2019.
Other Current Liabilities
Other current liabilities include customer working capital advances of $266.3 million and $153.6 million, customer-related accruals of $260.1 million and $439.0 million, and deferred revenue of $271.8 million and $329.0 million as of March 31, 2019 and 2018,2021, respectively. The customerCustomer working capital advances are not interest bearing,interest-bearing, do not generally have fixed repayment dates and are generally reduced as the underlying working capital is consumed in production.
Other Current Liabilities held for sale related to the China-based Multek operations
Other current liabilities include customer-related accruals of approximately $144$227.4 million and $242.0 million as of March 31, 2018,2022 and 2021, respectively.
Leases
The Company is a lessee with several non-cancellable operating leases, primarily for warehouses, buildings, and other assets such as vehicles and equipment. The Company determines if an arrangement is a lease at contract inception. A contract is a lease or contains a lease when (1) there is an identified asset, and (2) the Company has the right to control the use of the identified asset. Beginning with the adoption of ASC 842 on April 1, 2019, the Company elected to adopt the package of transition practical expedients and, therefore, has not reassessed (1) whether then-existing or expired contracts contain a lease, (2) lease classification for then-existing or expired leases or (3) the accounting for initial direct costs that were previously capitalized. The Company recognizes a right-of-use (“ROU”) asset and a lease liability at the lease commencement date for the Company's operating leases. For operating leases, the lease liability is initially measured at the present value of the unpaid lease payments at the lease commencement date. The Company has elected the short-term lease recognition and measurement exemption for all classes of assets, which allows the Company to not recognize ROU assets and lease liabilities for leases with a lease term of 12 months or less and with no purchase option the Company is reasonably certain of exercising. The Company has also elected the practical expedient to account for the lease and non-lease components as a single lease component, for all classes of underlying assets. Therefore, the lease payments used to measure the lease liability include all of the fixed considerations in the contract. Lease payments included in the measurement of the lease liability comprise the following: fixed payments (including in-substance fixed payments), and variable payments that depend on an index or rate (initially measured using the index or rate at the lease commencement date). As the Company cannot determine the interest rate implicit in the lease for the Company's leases, the Company uses the Company's estimate of the incremental borrowing rate as of the commencement date in determining the present value of lease payments. The Company's estimated incremental borrowing rate is the rate of interest it would have to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms. The lease term for all of the Company's leases includes the non-cancellable period of the lease plus any additional periods covered by either an option to extend (or not to terminate) the lease that the Company is reasonably certain to exercise, or an option to extend (or not to terminate) the lease controlled by the lessor.
The adoption of ASC 842 had a material impact to the Company’s consolidated balance sheet, but did not materially impact the consolidated statement of operations or consolidated statement of cash flows. The most significant changes to the consolidated balance sheet relate to the recognition of ROU assets and lease liabilities for operating leases. The Company’s accounting for finance leases remains substantially unchanged and the balances are not material for any periods presented.
As of March 31, 2022 and 2021, current operating lease liabilities were $132.4 million and $127.6 million, respectively, which are included in other current liabilities have been removed fromon the consolidated balance sheet as of March 31, 2019, following the execution of the divestiture. See note 17 for additional information.sheets.
Restructuring Charges
The Company recognizes restructuring charges related to its plans to close or consolidate excess manufacturing facilities and rationalize administrative functions. In connection with these activities, the Company records restructuring charges for employee termination costs, long-lived asset impairment and other exit-related costs.
The recognition of restructuring charges requires the Company to make certain judgments and estimates regarding the nature, timing and amount of costs associated with the planned exit activity. To the extent the Company's actual results differ from its estimates and assumptions, the Company may be required to revise the estimates of future liabilities, requiring the recognition of additional restructuring charges or the reduction of liabilities already recognized. Such changes to previously estimated amounts may be material to the consolidated financial statements. At the end of each reporting period, the Company evaluates the remaining accrued balances to ensure that no excess accruals are retained, and the utilization of the provisions are for their intended purpose in accordance with developed restructuring plans. See note 1416 for additional information regarding restructuring charges.
Recently Adopted Accounting Pronouncements
In January 2017, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update (ASU) No. 2017-01 “Business Combinations (Topic 805): Clarifying the Definition of a Business” to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The Company adopted the guidance on a prospective basis during the first quarter of fiscal year 2019, which did not have a material impact to its financial position as there were no material acquisitions during the period of adoption.
In January 2017, the FASB issued ASU 2017-04 "Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment" to simplify the subsequent measurement of goodwill by eliminating step 2 from the goodwill impairment test. This guidance requires that the change be applied on a prospective basis, and it is effective for the Company beginning in the first quarter of fiscal year 2021, with early application permitted. The Company adopted the guidance during fiscal year 2019 without a material impact to its financial position as there were no identified impairments during the period.
In August 2016, the FASB issued ASU 2016-15, "Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force)." The ASU is intended to address specific cash

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flow issues with the objective of reducing the existing diversity in practice and provide guidance on how certain cash receipts and payments are presented and classified in the statement of cash flows. The majority of the guidance in ASU 2016-15 was consistent with the Company's current cash flow classification. However, cash receipts on the deferred purchase price from the Company's asset-backed securitization programs described in note 10 are now classified as cash flows from investing activities instead of the Company's former presentation as cash flows from operations. The Company adopted the guidance during the first quarter of fiscal year 2019 and retrospectively adjusted cash flows from operating and investing activities for fiscal year 2018. The Company recorded $3.6 billion of cash receipts on the deferred purchase price from the Company's asset-backed securitization programs for the fiscal year ended March 31, 2019 and reclassified $4.6 billion and $5.0 billion of cash receipts on the deferred purchase price for the fiscal years ended March 31, 2018 and 2017, from cash flows from operating activities to cash flows from investing activities, respectively.Recently Adopted Accounting Pronouncements
In January 2016,August 2020, the FASB issued ASU 2016-01 "Financial Instruments-Overall2020-06 "Debt - Debt with Conversion and Other Options (Subtopic 825-10)470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40): RecognitionAccounting for Convertible Instruments and MeasurementContracts in an Entity’s Own Equity", which simplifies the accounting for certain financial instruments with characteristics of Financial Assetsliabilities and Financial Liabilities." This guidance generally requires equity, investments, except those accounted for under the equity method of accounting or those that result in consolidation of the investee, to be measured at fair value with changes in fair value recognized in net income. This guidance also requires the separate presentation of financial assetsincluding convertible instruments and financial liabilities by measurement category and form of financial assetcontracts on the balance sheet or in the accompanying notes to the financial statements. The Company adopted this guidance on April 1, 2018 with an immaterial impact on the Company's financial position, results of operations and cash flows.
In February 2018, the FASB issued ASU 2018-03 "Technical Corrections and Improvements to Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities." This standard comes as an addition to ASU 2016-01 which the Company adopted in the first quarter of fiscal year 2019. This update includes amendments to clarify certain aspects of the guidance issued in Update 2016-01. The Company adopted this guidance during the second quarter of fiscal year 2019 with an immaterial impact on its consolidated financial statements.
In May 2014, the FASB issued ASU 2014-09 "Revenue from Contracts with Customers (Topic 606)" (also referred to as Accounting Standard Codification 606 ("ASC 606")). As noted above, the Company adopted the standard on April 1, 2018 using the modified retrospective approach by applying the guidance to all open contracts at the adoption date and has implemented revised accounting policies, new operational and financial reporting processes, enhanced systems capabilities and relevant internal controls. Details of the impact of adopting ASC 606 has been described in the Revenue Recognition section above.
Recently Issued Accounting Pronouncements
In November 2018, the FASB issued ASU 2018-19 “Codification Improvements to Topic 326: Financial Instruments - Credit Losses” to introduce an expected credit loss methodology for the impairment of financial assets measured at amortized cost basis. That methodology replaces the probable, incurred loss model for those assets.entity’s own equity. The guidance is effective for the Company beginning in the first quarter of fiscal year 2023 with early adoption permitted. The Company early adopted the guidance during the fourth quarter of fiscal year 2022 using the modified retrospective approach with an immaterial impact to its consolidated financial statements.
In October 2021, the FASB issued ASU 2021-08 "Business Combinations (Topic 805) - Accounting for Contract Assets and Contract Liabilities From Contracts With Customers", which requires an acquirer to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with FASB Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers. The guidance is effective prospectively for the Company beginning in the first quarter of fiscal year 2024 with early adoption permitted. The Company early adopted the guidance during the third quarter of fiscal year 2022 with an immaterial impact to its consolidated financial statements.
In October 2020, the FASB issued ASU 2020-10 "Codification Improvements", which improves consistency by amending the Codification to include all disclosure guidance in the appropriate disclosure sections and clarifies application of various provisions in the Codification by amending and adding new headings, cross referencing to other guidance, and refining or correcting terminology. The Company adopted the guidance during the first quarter of fiscal year 2022 with an immaterial impact on its consolidated financial statements.
In January 2020, the FASB issued ASU 2020-01 "Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815): Clarifying the Interactions Between Topic 321, Topic 323, and Topic 815 — a consensus of the FASB Emerging Issues Task Force", which makes improvements related to the following two topics: (1) accounting for certain equity securities when the equity method of accounting is applied or discontinued, and (2) scope considerations related to forward contracts and purchased options on certain securities. The Company adopted the guidance during the first quarter of fiscal year 2022 with an immaterial impact on its consolidated financial statements.
In December 2019, the FASB issued ASU 2019-12 "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes," which removes certain exceptions for recognizing deferred taxes for investments, performing intra-period allocation and calculating income taxes in interim periods. The ASU also adds guidance to reduce complexity in certain areas, including recognizing deferred taxes for tax goodwill and allocating taxes to members of a consolidated group. The Company adopted the guidance during the first quarter of fiscal year 2022 with an immaterial impact on its consolidated financial statements.
Recently Issued Accounting Pronouncements
In November 2021, the FASB issued ASU 2021-10 "Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance," which aims to provide increased transparency by requiring business entities to disclose information about certain types of government assistance they receive in the notes to the annual financial statements. The guidance is effective for the Company beginning in fiscal year 2023 with early adoption permitted. The Company expects the new guidance will have an immaterial impact on its consolidated financial statements, and it intends to adopt the guidance when it becomes effective in the first quarter of fiscal year 2021.2023.
In October 2018,July 2021, the FASB issued ASU 2018-17 “Consolidation2021-05 "Leases (Topic 810)842): Targeted ImprovementsLessors - Certain Leases with Variable Lease Payments", which requires a lessor to Related Party Guidance for Variable Interest Entities” to provideclassify a new private companylease with variable interest entity exemption and changes how decision makers applylease payments that don’t depend on an index or a rate as an operating lease on the variable interest criteria.commencement date of the lease if specified criteria are met. The guidance is effective for the Company beginning in the first quarter of fiscal year 20212023 with early adoption permitted. The Company expects the new guidance will have an immaterial impact on its consolidated financial statements, and it intends to adopt the guidance when it becomes effective in the first quarter of fiscal year 2021.2023.
In August 2018, the FASB issued ASU 2018-15 "Intangibles-Goodwill
3. LEASES
The Company has several commitments under operating leases for warehouses, buildings, and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract” to provide guidance on a customer's accounting for implementation, set-up, and other upfront costs incurred in a cloud computing arrangement that is hosted by the vendor, i.e., a service contract. Under the new guidance, customers will apply the same criteria for capitalizing implementation costs as they would for an arrangement thatequipment. The Company also has a software license. The new guidance also prescribes the balance sheet, income statement, and cash flow classificationminimal number of the capitalized implementation costs and related amortization expense, as well as requires additional quantitative and qualitative disclosures. The guidance is effective for the Company beginning in the first quarter of fiscalfinance leases with an immaterial impact on its consolidated financial statements. Leases have lease terms ranging from 1 year 2021 with early adoption permitted. The

to 18 years.
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The components of lease cost recognized under ASC 842 were as follow (in millions): 
Company is still evaluating the impact on its consolidated financial statements, and it intends to adopt the guidance when it becomes effective
Lease costFiscal Year Ended
March 31, 2022March 31, 2021
Operating lease cost$156 $152 

Amounts reported in the first quarter of fiscal year 2021.
In August 2018, the FASB issued ASU 2018-13, "Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement”, which amends ASC 820 to add, remove, and modify fair value measurement disclosure requirements. The guidance is effective for the Company beginning in the first quarter of fiscal year 2020 with early adoption permitted. The Company expects the new guidance will have an immaterial impact on its consolidated financial statements, and it intends to adopt the guidance when it becomes effective in the first quarter of fiscal year 2020.
In June 2018, the FASB issued ASU 2018-07 "Compensation - Stock Compensation (Topic 718): Improvement to Nonemployee Share-Based Payment Accounting" with the objective of simplifying several aspectsbalance sheet as of the accounting for nonemployee share-based payment transactions in current GAAP. The guidance is effective for the Company beginning in the first quarter of fiscal year 2020 with early adoption permitted. The Company expects the new guidance will have an immaterial impact on its consolidated financial statements, and it intends to adopt the guidance when it becomes effective in the first quarter of fiscal year 2020.
In August 2017, the FASB issued ASU 2017-12 "Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities" with the objective of improving the financial reporting of hedging relationships and simplifying the application of the hedge accounting guidance in current GAAP. The guidance is effective for the Company beginning in the first quarter of fiscal year 2020 with early adoption permitted. The Company expects the new guidance will have an immaterial impact on its consolidated financial statements, and it intends to adopt the guidance when it becomes effective in the first quarter of fiscal year 2020.
In February 2016, the FASB issued ASU No. 2016-02, Leases with subsequent updates through 2018 (together “ASC 842”). The new standard is intended to improve financial reporting of lease transactions by requiring lease assets and liability to be recorded on the balance sheet for the rights and obligations created by leases that extend more than twelve months. ASC 842 also requires additional disclosures for the amount, timing, and uncertainty of cash flows arising from leases.
ASC 842 is effective for financial statements issued for annual and interim periods beginning after December 15, 2018 for public business entities. The Company adopted the new standard on its effective date of April 1, 2019, using the effective date method. Under this method, the initial recognition of lease assets and liabilities as required by ASC 842 will occur on April 1, 2019, and financial information for comparative periods prior to that date will not be updated. ASC 842 provides a number of optional practical expedients impacting transition to the new standard. Management elected the package of practical expedients which, among other things, allows the Company to carry forward historical lease classification in place prior to April 1, 2019.
ASC 842 also provides practical expedients for an entity’s accounting after transition. Management has elected the short-term lease recognition exemption for all leases that qualify, as well as the practical expedient to not separate lease and non-lease components, Both of these expedients were elected for all classes of underlying leased assets.
As a balance sheet impact upon adoption, the Company expects to recognize right-of-use assets and operating lease liabilities, respectively, in the range of approximately $550 million to $750 million. The Company is continuing to assess the impact of adopting the new standard on its consolidated financial statements but does not expect a material impact on its consolidated statement of operations or its consolidated statement of cash flows. The Company is also continuing to adjust its accounting policies, operational and financial reporting processes, systems capabilities and relevant internal controls.
In December 2017, the Securities and Exchange Commission ("SEC") staff issued Staff Accounting Bulletin No. 118 (SAB 118), Income Tax Accounting Implications of the Tax Cuts and Jobs Act ("Tax Act"), which allowed the Company to record provisional amounts during a measurement period not to extend beyond one year of the enactment date. As ofended March 31, 2019, the Company has finalized all provisional amounts2022 and 2021 were (in millions, except weighted average lease term and discount rate):
As of March 31, 2022As of March 31, 2021
Operating Leases:
   Operating lease right of use assets$637$642
   Operating lease liabilities683690
Weighted-average remaining lease term (In years)
   Operating leases7.17.5
Weighted-average discount rate
   Operating leases3.6 %3.9 %

Other information related to the Tax Act. Finalizing provisional adjustments related to the Tax Act did not have a material impact on the Company's consolidated financial statementsleases was as follow (in millions):
Fiscal Year Ended
March 31, 2022March 31, 2021
Cash paid for amounts included in the measurement of lease liabilities: 
   Operating cash flows from operating leases$158 $152 
Right‑of‑use assets obtained in exchange for lease liabilities
   Operating Lease$78 $159 
Future lease payments under non-cancellable leases as of March 31, 2019. The Company expects further guidance may be forthcoming from the FASB2022 are as follows (in millions):
Fiscal Year Ended March 31,Operating Leases
2023$151 
2024128 
2025107 
202684 
202772 
Thereafter229 
Total undiscounted lease payments771 
Less: imputed interest88 
Total lease liabilities$683 
Total rent expense amounted to $180.3 million, $179.8 million, and the SEC, as well as regulations, interpretations$186.9 million in fiscal years 2022, 2021 and rulings from federal and state tax agencies, which could result in additional impacts.2020, respectively.
3.4. REVENUE
Revenue Recognition

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The Company provides a comprehensive suite of services for its customers that range from advanced product design to manufacturing and logistics to after-sales services. The first step in its process for revenue recognition is to identify a contract
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with a customer. A contract is defined as an agreement between two parties that createcreates enforceable rights and obligations and can be written, verbal, or implied. The Company generally enters into master supply agreements (“MSA”MSAs”) with its customers that provide the framework under which business will be conducted. This includes matters such as warranty, indemnification, transfer of title and risk of loss, liability for excess and obsolete inventory, pricing formulas, payment terms, etc., and the level of business under those agreements may not be guaranteed. In those instances, the Company bids on a program-by-program basis and typically receives customer purchase orders for specific quantities and timing of products. As a result, the Company considers its contract with a customer to be the combination of the MSA and the purchase order, or any other similar documents such as a statement of work, product addenda,addendum, emails or other communications that embody the commitment by the customer.
In determining the appropriate amount of revenue to recognize, the Company applies the following steps: (i) identifyidentifies the contracts with the customers; (ii) identifyidentifies performance obligations in the contracts; (iii) determinedetermines the transaction price; (iv) allocateallocates the transaction price to the performance obligations per the contracts; and (v) recognizerecognizes revenue when (or as) the Company satisfies a performance obligation. Further, the Company assesses whether control of the productproducts or services promised under the contract isare transferred to the customer at a point in time (PIT) or over time (OT). The Company is first required to evaluate whether its contracts meet the criteria for OT recognition. The Company has determined that for a portion of its contracts the Company is manufacturing products for which there is no alternative use (due to the unique nature of the customer-specific product and IPintellectual property restrictions) and the Company has an enforceable right to payment including a reasonable profit for work-in-progress inventory with respect to these contracts. For certain other contracts, the Company’s performance creates and enhances an asset that the customer controls as the Company performs under the contract. As a result, revenue is recognized under these contracts OT based on the cost-to-cost method as it best depicts the transfer of control to the customer measured based on the ratio of costs incurred to date as compared to the total estimated costs at completion of the performance obligation. For all other contracts that do not meet these criteria, the Company recognizes revenue when it has transferred control of the related manufactured products which generally occurs upon delivery and passage of title to the customer.
Customer Contracts and Related Obligations
Certain of the Company’s customer agreements include potential price adjustments which may result in variable consideration. These price adjustments include, but are not limited to, sharing of cost savings, committed price reductions, material margins earned over the period that are contractually required to be paid to the customers, rebates, refunds tied to performance metrics such as on-time delivery, and other periodic pricing resets that may be refundable to customers. The Company estimates the variable consideration related to these price adjustments as part of the total transaction price and recognizes revenue in accordance with the pattern applicable to the performance obligation, subject to a constraint. The Company constrains the amount of revenues recognized for these contractual provisions based on its best estimate of the amount which will not result in a significant reversal of revenue in a future period. The Company determines the amounts to be recognized based on the amount of potential refunds required by the contract, historical experience and other surrounding facts and circumstances. Often these obligations are settled with the customer in a period after shipment through various methods which include reduction of prices for future purchases, issuance of a payment to the customer, or issuance of a credit note applied against the customer’s accounts receivable balance. In many instances, the agreement is silent on the settlement mechanism. Any difference between the amount accrued upon shipment for potential refunds and the actual amount agreed to with the customer is recorded as an increase or decrease in revenue. These potential price adjustments are included as part of other current liabilities on the consolidated balance sheet and disclosed as part of customer relatedcustomer-related accruals in note 2.
Performance Obligations
The Company derives its revenues primarily from manufacturing services, and to a lesser extent, from innovative design, engineering, and supply chain services and solutions.
A performance obligation is an implicitly or explicitly promised good or service that is material in the context of the contract and is both capable of being distinct (customer can benefit from the good or service on its own or together with other readily available resources) and distinct within the context of the contract (separately identifiable from other promises). The Company considers all activities typically included in its contracts, and identifies those activities representing a promise to transfer goods or services to a customer. These include, but are not limited to, design and engineering services, prototype products, tooling, etc. Each promised good or service with regards to these identified activities is accounted for as a separate performance obligation only if it is distinct - i.e., the customer can benefit from it on its own or together with other resources that are readily available to the customer. Certain activities on the other hand are determined not to constitute a promise to

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transfer goods or service, and therefore do not represent separate performance obligations for revenue recognition (e.g., procurement of materials and standard workmanship warranty).
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A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The majority of the Company's contracts have a single performance obligation as the promise to transfer the individual good or service is not separately identifiable from other promises in the contract and is, therefore, not distinct. Promised goods or services that are immaterial in the context of the contract are not separately assessed as performance obligations. In the event that more than one performance obligation is identified in a contract, the Company is required to allocate the transaction price between the performance obligations. The allocation would generally be performed on the basis of a relative standalone price for each distinct good or service. This standalone price most often represents the price that the Company would sell similar goods or services separately.
Contract Balances
A contract asset is recognized when the Company has recognized revenue, but not issued an invoice for payment. Contract assets are classified separately on the consolidated balance sheets and transferred to receivables when rights to payment become unconditional. The following table summarizes the activity in the Company's contract assets during the fiscal year ended March 31, 2019 (in thousands):
 Contract Assets
Beginning balance, April 1, 2018$
Cumulative effect adjustment at April 1, 2018451,287
Revenue recognized7,169,638
Amounts collected or invoiced(7,404,723)
Ending balance, March 31, 2019$216,202

A contract liability or deferred revenue is recognized when the Company receives payments in advance of the satisfaction of performance and is included in other current liabilities on the consolidated balance sheets.performance. Contract liabilities, identified as deferred revenue, were $271.8$704.3 million and $265.3$435.4 million as of March 31, 20192022 and April 1, 2018, respectively.2021, respectively, of which $615.5 million and $376.5 million, respectively, is included in deferred revenue and customer working capital advances under current liabilities.
Disaggregation of Revenue
The following table presents the Company’s revenue disaggregated based on timing of transfer - point in time and over time for the fiscal yearyears ended March 31, 2019:2022, 2021 and 2020:
Fiscal Year Ended March 31,
202220212020
Timing of Transfer(In millions)
FAS
Point in time$13,288 $12,058 $11,581 
Over time739 1,435 2,472 
Total14,027 13,493 14,053 
FRS
Point in time9,904 7,667 6,518 
Over time699 1,828 2,535 
Total10,603 9,495 9,053 
Nextracker
Point in time128 66 419 
Over time1,330 1,129 752 
Total1,458 1,195 1,171 
Intersegment eliminations
Point in time(47)(59)(67)
Over time— — — 
Total(47)(59)(67)
Flex
Point in time23,273 19,732 18,451 
Over time2,768 4,392 5,759 
Total$26,041 $24,124 $24,210 
 Fiscal Year Ended March 31, 2019
 HRS IEI CEC CTG Total
 (In thousands)
Timing of Transfer         
Point in time$3,773,735
 $4,395,773
 $6,126,454
 $4,744,911
 $19,040,873
Over time1,055,215
 1,786,864
 2,209,876
 2,117,683
 7,169,638
Total segment$4,828,950
 $6,182,637
 $8,336,330
 $6,862,594
 $26,210,511
4.5. SHARE-BASED COMPENSATION
Equity Compensation Plans
The Company's primary plan used for granting equity compensation awards is the Company's 2017 Equity Incentive Plan (the "2017 Plan"), which was approved by the Company's shareholders at the 2017 Annual General Meeting of Shareholders, to replace the former 2010 Equity Incentive Plan.

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The Company assumed all of the outstanding and unvested restricted shares and options associated with a couple acquisitions and converted all of these shares into Flex awards. As a result, the Company maintains two additional equity compensation plans that are immaterial to the Company for all periods presented. No share options or restricted share unit awards were granted under these plans during fiscal year 2019, nor were there any shares available for grant under these plans as of March 31, 2019.
Share-Based Compensation Expense
The following table summarizes the Company's share-based compensation expense for all Equity Incentive Plans:equity incentive plans:
 Fiscal Year Ended March 31,
 202220212020
 (In millions)
Cost of sales$24 $20 $15 
Selling, general and administrative expenses67 59 56 
Total share-based compensation expense$91 $79 $71 
 Fiscal Year Ended March 31,
 2019 2018 2017
 (In thousands)
Cost of sales$19,554
 $19,102
 $10,023
Selling, general and administrative expenses56,478
 66,142
 72,243
Total share-based compensation expense$76,032
 $85,244
 $82,266


Cash flows resulting from excess tax benefits (tax benefits related to the excess of proceeds from employee exercises of share options over the share-based compensation cost recognized for those options) are classified as operating cash flows. During fiscal years 2019, 20182022, 2021 and 2017,2020, the Company did not recognize any excess tax benefits as an operating cash inflow.
As of March 31, 2019,2022, the Company had approximately 16.119.4 million shares available for grant under the 2017 Plan. Options issuedThe Company no longer issues options to employees under this plan generally vest over four yearsall plans. The number of outstanding and expire ten years fromexercisable options are immaterial and the date of grant. Options granted to non-employee directors generally expire five years from the date of grant.
The exercise price of options granted to employees is determined by the Company's Board of Directors or the Compensation Committee and may not be less than the closing price of the Company's ordinary shares on the date of grant.
As of March 31, 2019, the total unrecognized compensation cost related to unvested share options granted to employees under all plans was not material and will be amortized on a straight-line basis over a weighted-average periodhas been fully recognized as of approximately 1.8 years.March 31, 2022.
The Company also grants restricted share unit ("RSU") awards under its 2017 Plan. Restricted share unitRSU awards are rights to acquire a specified number of ordinary shares for no cash consideration in exchange for continued service with the Company. Restricted share unitRSU awards generally vest in installments over a threetwo to five-yearfour-year period and unvested restricted share unitRSU awards are generally forfeited upon termination of employment.
Vesting for certain restricted share unitRSU awards is contingent upon both service and market conditions or both service and performance conditions. Further, vesting for certain restricted share unit awards granted to certain executive officers is contingent upon meeting certain free cash flow targets.
As of March 31, 2019,2022, the total unrecognized compensation cost related to unvested restricted share unitRSU awards under all plans was approximately $132.9$148.4 million. These costs will be amortized generally on a straight-line basis over a weighted-average period of approximately 2.42.0 years. Approximately $14.2$16.0 million of the total unrecognized compensation cost is related to restricted share unitRSU awards granted to certain key employees whereby vesting is contingent on meeting a certain market condition.conditions. Approximately $5.5 million of the total unrecognized compensation cost is related to RSU awards granted to certain key employees whereby vesting is contingent on meeting certain performance conditions.
Determining Fair Value - Options and restricted share unitRSU awards
Valuation and Amortization MethodThe Company estimates the fair value of share options granted under the 2017 Plan using the Black-Scholes valuation method and a single option award approach. This fair value is then amortized on a straight-line basis over the requisite service periods of the awards, which is generally the vesting period. The fair market value of restricted share unitRSU awards granted, other than those awards with a market condition, is the closing price of the Company's ordinary shares on the date of grant and is generally recognized as compensation expense on a straight-line basis over the respective vesting period.

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Expected Term—The Company's expected term used in the Black-Scholes valuation method represents the period that the Company's share options are expected to be outstanding and is determined based on historical experience of similar awards, giving consideration to the contractual terms of the share options, vesting schedules and expectations of future employee behavior as influenced by changes to the terms of its share options.
Expected Volatility—The Company's expected volatility used in the Black-Scholes valuation method is derived from a combination of implied volatility related to publicly traded options to purchase Flex ordinary shares and historical variability in the Company's periodic share price.
Expected Dividend—The Company has never paid dividends on its ordinary shares and accordingly the dividend yield percentage is zero for all periods.
Risk-Free Interest Rate—The Company bases the risk-free interest rate used in the Black-Scholes valuation method on the implied yield currently available on U.S. Treasury constant maturities issued with a term equivalent to the expected term of the option.
There were no options granted under the 2017 Plan during fiscal years 2019, 2018, and 2017.
Determining Fair Value - Restricted share unitRSU awards with service and market conditions
Valuation and Amortization Method—The Company estimates the fair value of restricted share unitRSU awards granted under the 2017 Plan whereby vesting is contingent on meeting certain market conditions using Monte Carlo simulation. This fair value is then amortized on a straight-line basis over the vesting period, which is the service period.
Expected volatility of Flex—Volatility used in a Monte Carlo simulation is derived from the historical volatility of Flex's stock price over a period equal to the service period of the restricted share unitRSU awards granted. The service period is three years for those restricted share unitRSU awards granted in fiscal years 2019, 2018,2022, 2021, and 2017.2020.
Average peer volatility—Volatility used in a Monte Carlo simulation is derived from the historical volatilities of Flex's peer companies for the RSU awards granted in fiscal years 2022, and volatility used in a Monte Carlo simulation is derived from the historical volatility of the Standard and Poor's ("S&P") 500 index for the restricted share unitRSU awards granted in fiscal years 2019, 2018,2021 and 2017.2020.
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Average Peer Correlation—Correlation coefficients were used to model the movement of Flex's stock price relative to Flex's peer companies for the RSU awards granted in fiscal years 2022, and correlation coefficients were used to model the movement of Flex's stock price relative to the S&P 500 index for the restricted share unitRSU awards granted in fiscal years 2019, 2018,2021 and 2017.2020.
Expected Dividend —The Company has never paid dividends on its ordinary shares and accordingly the dividend yield percentage is zero for all periods.
Risk-Free Interest Rate assumptionsSame methodology as discussed above.The Company bases the risk-free interest rate used in the Monte Carlo simulation on the implied yield currently available on U.S. Treasury constant maturities issued with a term equivalent to the expected term of the RSU awards.
The fair value of the Company's restricted share unitRSU awards under the 2017 Plan, whereby vesting is contingent on meeting certain market conditions, for fiscal years 2019, 2018,2022, 2021, and 20172020 was estimated using the following weighted-average assumptions:
Fiscal Year Ended March 31, Fiscal Year Ended March 31,
2019 2018 2017 202220212020
Expected volatility27.4% 25.1% 25.8%Expected volatility54.6 %52.8 %38.8 %
Average peer volatility25.6% 28.7% 25.1%Average peer volatility39.8 %35.9 %24.9 %
Average peer correlation0.5
 0.6
 0.6
Average peer correlation0.4 0.7 0.5 
Expected dividends0.0% 0.0% 0.0%Expected dividends— %— %— %
Risk-free interest rate2.7% 1.5% 0.9%Risk-free interest rate0.3 %0.3 %1.8 %
Share-Based Awards Activity
The following is a summary of optionOption activity for all plans ("Price" reflects the weighted-average exercise price):

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 Fiscal Year Ended March 31,
 2019 2018 2017
 Options Price Options Price Options Price
Outstanding, beginning of fiscal year1,189,550
 $3.28
 1,937,400
 $3.75
 5,111,490
 $5.70
Granted
 
 288,386
 0.54
 159,057
 0.51
Exercised(244,393) 1.00
 (667,184) 4.15
 (2,283,201) 5.44
Forfeited(71,927) 3.37
 (369,052) 5.75
 (1,049,946) 9.47
Outstanding, end of fiscal year873,230
 $3.93
 1,189,550
 $3.28
 1,937,400
 $3.75
Options exercisable, end of fiscal year546,339
 $5.34
 373,950
 $4.99
 507,965
 $6.08
The aggregate intrinsic value of options exercised underis immaterial for all plans (calculated as the difference between the exercise price of the underlying award and the price of the Company's ordinary shares determined as of the time of option exercise for options exercised in-the-money) was $2.4 million, $8.9 million and $17.3 million during fiscal years 2019, 2018 and 2017, respectively.periods presented. 
Cash received from option exercises under all plans, which was reflected within other financing activities in the consolidated statement of cash flows, was immaterial for fiscal year 2019. Cash received from option exercises under all plans was $2.8 millionyears 2022, 2021, and $12.4 million for fiscal years 2018 and 2017, respectively.
As of March 31, 2019 the aggregate intrinsic value for options outstanding, options vested and expected to vest, and options exercisable under all plans were immaterial. The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the quoted price of the Company's ordinary shares as of March 31, 2019 for the immaterial amount of options that were in-the-money at March 31, 2019.2020.
The following table summarizes the Company's restricted share unitRSU award activity under all plans ("Price" reflects the weighted-average grant-date fair value):
Fiscal Year Ended March 31,
202220212020
SharesPriceSharesPriceSharesPrice
Unvested RSU awards outstanding, beginning of fiscal year17,308,625 $11.14 16,050,640 $11.87 14,903,886 $13.76 
Granted7,276,643 18.48 10,982,109 11.04 8,259,272 9.81 
Vested(5,933,605)10.87 (5,520,005)11.64 (4,222,524)13.33 
Forfeited(1,632,104)12.42 (4,204,119)11.92 (2,889,994)12.89 
Unvested RSU awards outstanding, end of fiscal year17,019,559 $14.13 17,308,625 $11.14 16,050,640 $11.87 
 Fiscal Year Ended March 31,
 2019 2018 2017
 Shares Price Shares Price Shares Price
Unvested restricted share unit awards outstanding, beginning of fiscal year14,619,692

$14.39

17,242,019

$12.24

19,309,172
 $10.71
Granted (1)8,257,502

12.59

6,680,739

16.97

8,261,666
 13.46
Vested (1)(5,952,039)
13.12

(6,945,393)
11.86

(9,311,984) 9.50
Forfeited(2,021,269)
14.51

(2,357,673)
12.20

(1,016,835) 11.15
Unvested restricted share unit awards outstanding, end of fiscal year14,903,886

$13.76

14,619,692

$14.39

17,242,019
 $12.24


(1)Included in the fiscal years 2018 and 2017 amounts are 0.7 million and 1.7 million of restricted share unit awards, respectively, representing the number of awards achieved above target levels based on the achievement of certain market conditions, as further described in the table below. These awards were issued and immediately vested in accordance with the terms and conditions of the underlying awards.
Of the 8.37.3 million unvested restricted share unitRSU awards granted in fiscal year 2019,2022, approximately 6.56.4 million are plain-vanilla unvested restricted share unitRSU awards with no performance or market conditions with an average grant date price of $12.57$18.02 per share. Further, approximately 1.30.4 million of these unvested restricted share unitRSU awards granted in fiscal year 20192022 represents the target amount of grants made to certain key employees whereby vesting is contingent on certain market conditions, with an average grant date fair value estimated to be $14.00$25.86 per award calculated using a Monte Carlo simulation. Vesting information for these shares is further detailed in the table below.
Of the 14.917.0 million unvested restricted share unitRSU awards outstanding under all plans as of the fiscal year ended March 31, 2019,2022, approximately 2.52.9 million unvested restricted share unitRSU awards represent the target amount of grants made to certain key employees whereby vesting is contingent on meeting certain market conditions summarized as follows:

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Targeted
number of
awards as of
March 31, 2022
(in shares)
Range of shares
that may be issued (1)
Average
grant date
fair value
(per share)
Assessment dates
Year of grantMinimumMaximum
Fiscal 2022409,526 $25.86 — 819,052 June 2024
Fiscal 20211,243,848 15.03 — 2,487,696 June 2023
Fiscal 20201,200,639 11.92 — 2,401,278 June 2022
Totals2,854,013  05,708,026  

  Targeted
number of
awards as of
March 31, 2019
(in shares)
   Range of shares
that may be issued (1)
  
  Average
grant date
fair value
(per share)
  
   Assessment dates
Year of grant  Minimum Maximum 
Fiscal 2019 1,316,279
 $14.00
 
 2,632,558
 June 2021
Fiscal 2018 586,077
 $20.25
 
 1,172,154
 June 2020
Fiscal 2017 619,574
 $17.57
 
 1,239,148
 June 2019
Totals 2,521,930
  
 
 5,043,860
  
(1)    Vesting ranges from zero to 200% based on measurement of Flex's total shareholder return against Flex's peer companies for RSU awards granted in fiscal year 2022 and based on measurement of Flex's total shareholder return against the Standard and Poor's ("S&P") 500 Composite Index for RSU awards granted in fiscal years 2021 and 2020.

(1)Vesting ranges from zero to 200% based on measurement of Flex's total shareholder return against the Standard and Poor's ("S&P") 500 Composite Index.
The Company will continue to recognize share-based compensation expense for awards with market conditions regardless of whether such awards will ultimately vest. During fiscal year 2019, 0.6 million2022, no shares vested in connection with the restricted share unitRSU awards with market conditions granted in fiscal year 2016.2019.
Approximately 0.4 million of these unvested RSU awards granted in fiscal year 2022 represents the target amount of grants made to certain key employees whereby vesting is contingent on certain performance conditions, with an average grant date price of $18.24 per share. Vesting information for these shares is further detailed in the table below.
Of the 17.0 million unvested RSU awards outstanding under all plans as of the fiscal year ended March 31, 2022, approximately 0.4 million unvested RSU awards represent the target amount of grants made to certain key employees whereby vesting is contingent on meeting certain performance conditions summarized as follows:
Targeted
number of
awards as of
March 31, 2022
(in shares)
Range of shares
that may be issued (1)
Average
grant date
fair value
(per share)
Assessment date
Year of grantMinimumMaximum
Fiscal 2022409,524 $18.24 — 819,048 Mar 2024
(1)    Vesting ranges from zero to 200% based on performance of Flex's average earnings per share growth.
The total intrinsic value of restricted share unitRSU awards vested under all the Company's plans was $80.2$108.1 million, $116.4$68.6 million and $119.1$41.7 million during fiscal years 2019, 20182022, 2021 and 2017,2020, respectively, based on the closing price of the Company's ordinary shares on the date vested.
In April 2022, Nextracker granted 11.2 million equity-based compensation awards to its employees under the 2022 Nextracker LLC Equity Incentive Plan (the “2022 Nextracker Plan”). Vesting for the awards granted under the 2022 Nextracker Plan is contingent upon continued employee service and certain performance conditions, including a liquidity event such as the occurrence of an initial public offering or the sale of Nextracker.
5.
6. EARNINGS PER SHARE
Basic earnings per share excludes dilution and is computed by dividing net income by the weighted-average number of ordinary shares outstanding during the applicable periods.
Diluted earnings per share reflects the potential dilution from stock options and restricted share unitRSU awards. The potential dilution from stock options exercisable into ordinary share equivalents and restricted share unit awards was computed using the treasury stock method based on the average fair market value of the Company's ordinary shares for the period.
The following table reflects the basic weighted-average ordinary shares outstanding and diluted weighted-average ordinary share equivalents used to calculate basic and diluted income per share:

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Fiscal Year Ended March 31,
Fiscal Year Ended March 31,2022 20212020
2019 2018 2017(In millions, except per share amounts)
(In thousands, except
per share amounts)
Basic earnings per share:     
Basic earnings per share attributable to the shareholders of Flex Ltd.Basic earnings per share attributable to the shareholders of Flex Ltd.
Net income$93,399
 $428,534
 $319,564
Net income$940 $613 $88 
Net income attributable to redeemable noncontrolling interestNet income attributable to redeemable noncontrolling interest— — 
Net income attributable to Flex Ltd.Net income attributable to Flex Ltd.$936 $613 $88 
Shares used in computation:     Shares used in computation:
Weighted-average ordinary shares outstanding526,519
 529,782
 540,503
Weighted-average ordinary shares outstanding476 499 509 
Basic earnings per share$0.18
 $0.81
 $0.59
Basic earnings per share$1.97 $1.23 $0.17 
     
Diluted earnings per share:     
Diluted earnings per share attributable to the shareholders of Flex Ltd.Diluted earnings per share attributable to the shareholders of Flex Ltd.
Net income$93,399
 $428,534
 $319,564
Net income$940 $613 $88 
Net income attributable to redeemable noncontrolling interestNet income attributable to redeemable noncontrolling interest— — 
Net income attributable to Flex Ltd.Net income attributable to Flex Ltd.$936 $613 $88 
Shares used in computation:     Shares used in computation:
Weighted-average ordinary shares outstanding526,519
 529,782
 540,503
Weighted-average ordinary shares outstanding476 499 509 
Weighted-average ordinary share equivalents from stock options and restricted share unit awards (1) (2)3,551
 6,816
 5,717
Weighted-average ordinary share equivalents from stock options and RSU awards (1)Weighted-average ordinary share equivalents from stock options and RSU awards (1)
Weighted-average ordinary shares and ordinary share equivalents outstanding530,070
 536,598
 546,220
Weighted-average ordinary shares and ordinary share equivalents outstanding483 506 512 
Diluted earnings per share$0.18
 $0.80
 $0.59
Diluted earnings per share$1.94 $1.21 $0.17 


(1)An immaterial amount of options to purchase ordinary shares during fiscal years 2019 and 2018 were excluded from the computation of diluted earnings per share due to their anti-dilutive impact on the weighted average ordinary shares equivalents. Options to purchase ordinary shares of 0.5 million during fiscal year 2017 were excluded from the computation of diluted earnings per share.
(2)Restricted share unit awards of 6.8 million during fiscal year 2019 were excluded from the computation of diluted earnings per share due to their anti-dilutive impact on the weighted average ordinary shares equivalents. Less than 0.1 million of anti-dilutive restricted share unit awards were excluded from the computation of diluted earnings per share during fiscal years 2018 and 2017, respectively.

(1)An immaterial amount of options to purchase ordinary shares and RSU awards during fiscal years 2022, 2021, and 2020, respectively were excluded from the computation of diluted earnings per share due to their anti-dilutive impact on the weighted average ordinary shares equivalents.

7. REDEEMABLE NONCONTROLLING INTEREST
On February 1, 2022, the Company sold redeemable preferred units (“Series A Preferred Units”), representing a 16.67% interest in its subsidiary Nextracker LLC ("Nextracker"), to TPG Rise Flash, L.P. ("TPG Rise") and received proceeds of $487.5 million, net of $12.5 million in transaction costs. Because the Series A Preferred Units are redeemable upon the occurrence of conditions not solely within the control of the Company, the Company classified the redeemable noncontrolling interest as temporary equity on its consolidated balance sheets.
The Series A Preferred Units have a dividend rate of 5% per annum, payable semi-annually, up to 100% of which may be paid by the issuance of additional Series A Preferred Units ("payable-in-kind") during the first two years following the closing of the sale to TPG Rise, and 50% of which may be payable-in-kind thereafter. The Series A Preferred Units will vote together with the common units of Nextracker as a single class in all matters that are subject to a vote by common unitholders. The Series A Preferred Units provide TPG Rise the right to designate 2 members of the Board of Nextracker; if, however, TPG Rise owns Series A Preferred Units or common units with a fully diluted ownership percentage of less than 10% but more than 5%, the number of Board members that TPG Rise will be entitled to designate will be reduced to one. So long as at least 51% of the Series A Preferred Units remain outstanding, the consent of the holders of the Series A Preferred Units must be obtained prior to taking certain actions regarding Nextracker.
The Series A Preferred Units will be automatically converted into common units of Nextracker upon a qualified initial public offering (a “Qualified Public Offering”) and TPG Rise may elect to convert the Series A Preferred Units into common units at any time after March 31, 2023. Subject to certain exceptions, for any mandatory or optional conversion, the conversion ratio for each Series A Preferred Unit will be based on a deemed value of Nextracker equal to the lesser of $3.00 billion and the implied equity valuation of Nextracker determined by the underwriters engaged in connection with a Qualified Public Offering. If a Qualified Public Offering occurs by March 31, 2023 with an implied equity valuation greater than $3.75 billion, then the conversion ratio will be adjusted upwards based on a deemed value of Nextracker equal to $3.20 billion. If a Qualified Public Offering occurs after March 31, 2023 with an implied equity valuation between $2.70 billion and $3.00 billion, then the conversion ratio will be based on a deemed value of Nextracker equal to $3.00 billion. If a Qualified Public Offering occurs
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after March 31, 2023 with an implied equity valuation of less than $2.70 billion, then the conversion ratio will be based on a deemed value equal to the implied equity valuation of Nextracker in the Qualified Public Offering divided by 90%. If TPG Rise elects to convert the Series A Preferred Units prior to an initial public offering, the conversion ratio shall be based on a deemed value of Nextracker equal to $3.00 billion.
6.At TPG Rise’s election, the Company is required to repurchase all of the outstanding Series A Preferred Units at their liquidation preference, which shall include all contributed but unreturned capital plus accrued but unpaid dividends, at the earlier of certain change in control events and February 2, 2028. Additionally, if Nextracker has not completed a Qualified Public Offering prior to February 2, 2027, then TPG Rise may cause the Company to repurchase all of the outstanding Series A Preferred Units at their fair market value.
In connection with any voluntary or involuntary liquidation, dissolution, or winding up of Nextracker, each outstanding Series A Preferred Unit will be entitled to receive cash equal to the liquidation preference prior to distributions made to any other units.
The Company has determined that a Qualified Public Offering is likely and that the change in control is not probable as of March 31, 2022 and as such, it is not probable that the noncontrolling interest will become redeemable as of March 31, 2022.
8. SUPPLEMENTAL CASH FLOW DISCLOSURES
The following table represents supplemental cash flow disclosures and non-cash investing and financing activities:
Fiscal Year Ended March 31,
202220212020
(In millions)
Net cash paid for:
Interest$169 $147 $172 
Income taxes122 105 99 
Non-cash investing and financing activity:
Unpaid purchases of property and equipment$126 $102 $104 
Finance lease for Bright Machines assets— 23 


76
 Fiscal Year Ended March 31,
 2019 2018 2017
 (In thousands)
Net cash paid for:     
Interest$190,204
 $152,750
 $127,346
Income taxes134,178
 91,846
 86,651
Non-cash investing and financing activity:     
Unpaid purchases of property and equipment$111,989
 $128,044
 $84,375
Customer-related third party banking institution equipment financing net settlement
 
 90,576
Non-cash investment in Elementum (Note 2)
 132,679
 
Non-cash proceeds from sales of Wink (Note 2)
 59,000
 
Non-cash investment in Bright Machines (Note 2)127,641
 
 
Capital lease for Bright Machines assets (Note 2)34,828
 
 

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FLEX LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
7.9. BANK BORROWINGS AND LONG-TERM DEBT
Bank borrowings and long-term debt are as follows:
As of March 31,
20222021
(In millions)
5.000% Notes due February 2023$500 $500 
Term Loan due April 2024 - three-month TIBOR plus 0.43%273 305 
4.750% Notes due June 2025598 598 
3.750% Notes due February 2026690 694 
4.875% Notes due June 2029659 661 
4.875% Notes due May 2030690 694 
Euro Term Loans389 168 
3.600% HUF Bonds due December 2031301 — 
India Facilities84 133 
Other31 51 
Debt issuance costs(18)(21)
4,197 3,783 
Current portion, net of debt issuance costs(949)(268)
Non-current portion$3,248 $3,515 
 As of March 31,
 2019 2018
 (In thousands)
4.625% Notes due February 2020$500,000
 $500,000
Term Loan, including current portion, due in installments through November 2021671,563
 687,813
Term Loan, including current portion, due in installments through June 2022458,531
 483,656
5.000% Notes due February 2023500,000
 500,000
4.750% Notes due June 2025596,815
 596,387
India Facilities (1)170,206
 
Other168,039
 186,601
Debt issuance costs(10,639) (13,815)
 3,054,515
 2,940,642
Current portion, net of debt issuance costs(632,611) (43,011)
Non-current portion$2,421,904
 $2,897,631


(1)India Facilities as of March 31, 2019 include approximately $91.4 million drawdown of short-term bank borrowings facility entered in February 2019 and $78.8 million drawdown from the $200 million term loan facility entered in July 2018.
The weighted-average interest rates for the Company's long-term debt were 4.2%4.0% and 3.9%4.3% as of March 31, 20192022 and 2018,2021, respectively.
Scheduled repayments of the Company's bank borrowings and long-term debt are as follows:

Fiscal Year Ending March 31,Amount
(In millions)
2023$950 
202453 
2025273 
20261,288 
2027— 
Thereafter1,651 
Total$4,215 

HUF Bonds due December 2031
In December 2021, the Company issued HUF 100 billion (approximately $301.4 million as of March 31, 2022) in aggregate principal amount of bonds under the National Bank of Hungary’s Bond Funding for Growth Scheme. The bonds mature in December 2031 and amortize in an amount equal to 10% of the original principal amount thereof on each of the seventh, eighth, and ninth anniversaries of the bonds, with the remaining 70% due upon maturity. The outstanding principal amount of the bonds bear interest at 3.60% per annum. Interest is due and payable annually in arrears. The proceeds of the bonds were used for general corporate purposes.
The bonds are unsecured and unsubordinated obligations of the Company and rank equally with all of the Company’s other existing and future unsecured and unsubordinated obligations. The bonds contain a customary negative pledge covenant restricting the ability of the Company to incur liens to secure indebtedness without ratably and equally securing the bonds. This covenant is subject to a number of exceptions and limitations. The bonds also provide for customary events of default, including, but not limited to, cross defaults to certain specified other debt of the Company. Except in limited circumstances resulting from adverse changes in applicable tax laws, the bonds are not voluntarily redeemable. The bonds are listed for
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trading on the XBond multilateral trading facility operated by the Budapest Stock Exchange. As of March 31, 2022, the Company was in compliance with the covenants under the HUF bond agreement.
Fiscal Year Ending March 31,Amount
 (In thousands)
2020$634,321
2021111,558
2022801,836
2023857,571
202460,423
Thereafter599,445
Total$3,065,154

Term Loan due November 2021The 2026 Credit Facility
In August 2013, the Company entered into a $600 million term loan agreement due August 2018. In November 2016,January 2021, the Company entered into a new arrangement$2.0 billion credit agreement which matures in January 2026 (the "2026 Credit Facility") and consists of a $2.0 billion revolving credit facility with a sub-limit of $360 million available for swing line loans, and a sub-limit of $175 million available for the issuance of letters of credit. The 2026 Credit Facility replaced the previous $1.75 billion revolving credit facility, which was due to extendmature in June 2022 (the "2022 Credit Facility"). The Company determined that effectively increasing the maturity dateborrowing capacity of the agreement from August 30, 2018former revolving arrangement qualified as a debt modification and consequently all unamortized debt issuance costs related to November 30, 2021,the 2022 Credit Facility remain capitalized and borrowed an incremental amount of $130 million under this term loan, thereby increasing the total amount underare being amortized over the term loan to $700 million. This loan is repayable in quarterly installments of $4.1 million, which commenced October 31, 2017 and continue through September 30, 2021, with the remaining amount due at maturity.2026 Credit Facility.
Borrowings under this term loanthe 2026 Credit Facility bear interest, at the Company'sCompany’s option, either at (i) the Base Rate, which is defined as the greatest of (a) the Administrative Agent’s prime rate, (b) the federal funds effective rate, plus 0.50% and (c) the LIBOR (the London Interbank Offered Rate) rate plus 1.0%; plus, in the case of each of clauses (a) through (c), an applicable margin ranging from 0.250% to 0.875% per annum, based on the Company’s credit ratings (as determined by Standard & Poor’s Financial Services LLC, Moody’s Investors Service, Inc. and Fitch Ratings Inc.) or (ii) LIBOR plus the applicable margin for LIBOR loans ranging between 1.125%1.250% and 2.125%,1.875% per annum, based on the Company'sCompany’s credit ratings orratings. Interest on the outstanding borrowings is payable, (i) in the case of borrowings at the Base Rate, on the last business day of March, June, September and December of each calendar year and (ii) in the basecase of borrowings at the LIBOR rate, (the greateston the last day of the prime rate in effect on each day as published in The Wall Street Journal, the federal funds rate plus 0.5% and LIBOR for a one-monthapplicable interest period plus 1.00%selected by the Company, which date shall be no later than the last day of every third month. The Company is required to pay a quarterly commitment fee on the unutilized portion of the revolving credit commitments under the 2026 Credit Facility ranging from 0.15% to 0.30% per annum, based on the Company’s credit ratings. The Company is also required to pay letter of credit usage fees ranging from 1.250% to 1.875% per annum (based on the Company’s credit ratings) on the amount of the daily average outstanding letters of credit and a fronting fee of 0.125% per annum on the undrawn and unexpired amount of each letter of credit.
Under the 2026 Credit Facility, the interest rate margins, commitment fee and letter of credit usage fee are subject to upward or downward adjustments if the Company achieves, or fails to achieve, certain specified sustainability targets with respect to workplace safety and greenhouse gas emissions. Such upward or downward sustainability adjustments may be up to 0.05% per annum in the case of the interest rate margins and letter of credit usage fee and up to 0.01% per annum in the case of the commitment fee.
The 2026 Credit Facility is unsecured, and contains customary restrictions on the ability of the Company and its subsidiaries to (i) incur certain debt, (ii) make certain acquisitions of other entities, (iii) incur liens, (iv) dispose of assets and (v) engage in transactions with affiliates. These covenants are subject to a number of significant exceptions and limitations. The 2026 Credit Facility also requires that the Company maintains a maximum ratio of total indebtedness to EBITDA (earnings before interest expense, taxes, depreciation and amortization) and a minimum interest coverage ratio. As of March 31, 2022, the Company was in compliance with the covenants under the 2026 Credit Facility agreement.
Notes
Notes due February 2023
In February 2013, the Company issued $500 million of 5.000% notes due February 15, 2023 in a private offering pursuant to Rule 144A and Regulation S under the Securities Act. In July 2013, the Company exchanged these notes for new notes (the “2023 Notes”) with substantially similar terms and completed the registration of the 2023 Notes with the Securities and Exchange Commission.
Notes due June 2025
In June 2015, the Company issued $600 million of 4.750% notes due June 15, 2025 in a private offering pursuant to Rule 144A and Regulation S under the Securities Act, at 99.213% of face value, and an effective yield of approximately 4.850%. The Company received net proceeds of approximately $595.3 million from the issuance which was used for general corporate purposes. During January 2016, the Company exchanged these notes for new notes (the “2025 Notes”) with substantially similar terms and completed the registration of the 2025 Notes with the Securities and Exchange Commission.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Notes due February 2026 and May 2030
In May 2020, the Company issued $425 million aggregate principal amount of 3.750% Notes due February 2026 (the "Existing 2026 Notes"), at 99.617% of face value and $325 million aggregate principal amount of 4.875% Notes due May 2030 (the "Existing 2030 Notes" and, together with the Existing 2026 Notes, the "Existing Notes"), at 99.562% of face value. In August 2020, as a further issuance of the Existing Notes, the Company issued under the same terms (other than the initial interest accrual date and first interest payment date for the additional 2026 Notes, and the initial offering price and the issue date for the additional 2026 and 2030 Notes), an additional $250 million of 3.750% Notes due February 2026 (together with the Existing 2026 Notes, the "2026 Notes"), at 109.294% of face value, and $325 million of 4.875% Notes due May 2030 (together with the Existing 2030 Notes, the "2030 Notes"), at 114.863% of face value. Immediately after the issuance of the additional notes issued in August 2020, the Company has $675 million aggregate principal amount of 3.750% 2026 Notes outstanding and $650 million aggregate principal amount of 4.875% 2030 Notes outstanding. The Company received in aggregate, proceeds of approximately $1.4 billion, net of discounts and after premiums, from the issuances, which were used for working capital and other general corporate purposes.
Notes due June 2029
In June 2019, the Company issued $450 million of 4.875% Notes due June 15, 2029 (the “Existing 2029 Notes”), at 99.607% of face value. In November 2019, as a further issuance of the Existing 2029 Notes, the Company issued under the same terms, an additional $200 million of 4.875% Notes due June 15, 2029 (together with the "Existing 2029 Notes", the "2029 Notes"), at 107.289% of face value. Immediately after the issuance of the notes issued in November 2019, the Company has $650 million aggregate principal amount of 4.875% 2029 Notes outstanding. The Company received in aggregate, proceeds of approximately $662.8 million, net of discount and premium, from the issuances which were used, together with available cash, to refinance certain other outstanding debt.
Interest on the 2023 Notes, 2025 Notes, 2026 Notes, 2029 Notes, 2030 Notes (collectively the “Notes”) is payable semi-annually. The Notes are senior unsecured obligations of the Company and rank equally with all of the Company’s other existing and future senior and unsecured debt obligations.
At any time up to three months prior to the maturity date of the respective Notes, the Company may redeem some or all of the Notes at a redemption price equal to 100% of the principal amount of the Notes redeemed, plus an applicable margin ranging between 0.125%premium accrued and 1.125%unpaid interest, if any, to the applicable redemption date. Upon the occurrence of a change of control repurchase event (as defined in the indentures of the respective Notes), based onthe Company must offer to repurchase the respective Notes at a repurchase price equal to 101% of the principal amount of these Notes, plus accrued and unpaid interest, if any, to the applicable repurchase date.
The indentures governing the Notes contain covenants that, among other things, restrict the ability of the Company and certain of the Company's credit rating.subsidiaries to create liens; enter into sale-leaseback transactions; and consolidate or merge with, or convey, transfer or lease all or substantially all of the Company's assets to, another person, or permit any other person to consolidate, merge, combine or amalgamate with or into the Company. These covenants are subject to a number of significant limitations and exceptions set forth in the indentures. The indentures also provide for customary events of default, including, but not limited to, cross defaults to certain specified other debt of the Company and its subsidiaries. In the case of an event of default arising from specified events of bankruptcy or insolvency, all outstanding Notes will become due and payable immediately without further action or notice. If any other events of default under the indentures occur or are continuing, the trustee or holders of at least 25% in aggregate principal amount of the then outstanding Notes may declare all of the Notes to be due and payable immediately, but upon certain conditions such declaration and its consequences may be rescinded and annulled by the holders of a majority in principal amount of the Notes. As of March 31, 2022, the Company was in compliance with the covenants in the indentures governing the Notes.
Term Loan due April 2024
In April 2019, the Company entered into a JPY 33.525 billion term loan agreement due April 2024, at three-month TIBOR plus 0.43%, which was then swapped to U.S. dollars. The term loan, which is due at maturity and subject to quarterly interest payments, was used to fund general operations and refinance certain other outstanding debts.
This term loan is unsecured, and contains customary restrictions on the ability of the Company and its subsidiaries to (i) incur certain debt, (ii) make certain investments, (iii) make certain acquisitions of other entities, (iv) incur liens, (v) dispose of assets, (vi) make non-cash distributions to shareholders, and (vii) engage in transactions with affiliates. These covenants are subject to a number of exceptions and limitations. This term loan agreement also requires that the Company maintainmaintains a
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maximum ratio of total indebtedness to EBITDA, (earnings before interest expense, taxes, depreciation and amortization), and a minimum interest coverage ratio, as defined therein, during its term; provided that the requirement to maintain the minimum interest coverage ratio may be suspended in certain circumstances.term. As of March 31, 2019,2022, the Company was in compliance with the covenants under this term loan agreement.
Term Loan AgreementOther Borrowings
In December 2021, the Company borrowed €350 million (approximately $388.6 million as of March 31, 2022), under a 1-year term-loan agreement. Of this amount, €250 million is due JuneDecember 9, 2022 and Revolving Line of Credit
In June 2017, the Company entered into a five-year credit facility consisting of a $1.75 billion revolving credit facility and a $502.5€100 million term loan, which is due to mature on JuneDecember 30, 2022 (the "2022 Credit Facility"). This 2022 Credit Facility replaced the Company's $2.1 billion credit facility, which was due to mature in March 2019.2022. The outstanding principalproceeds of the term loan portion of the 2022 Credit Facility is repayable in quarterly installments of approximately $6.3 million from September 30, 2017 through June 30, 2020was used to refinance certain other outstanding debt and approximately $12.6 million from September 30, 2020 through March 31, 2022 with the remainder due upon maturity. The Company determined that effectively extending the maturity date of the revolving credit and repaying the term loan due March 2019 qualified as a debt modification and consequently all unamortized debt issuance costs related to the $2.1 billion credit facility are capitalized and will be amortized over the term of the 2022 Credit Facility.
for other general corporate purposes. Borrowings under the 2022 Credit Facilitythis term loan bear interest at the Company’s option, either at (i) the Base Rate,(0.18)% per annum, which is defined aspayable in full at maturity. The term loan is repayable upon maturity, and the greatest of (a) the Administrative Agent’s prime rate, (b) the federal funds effective rate, plus 0.50% and (c) the LIBOR (the London Interbank Offered Rate) rate that would be calculated as of each day in respect of a proposed LIBOR loan with a one-month interest period, plus 1.0%; plus, in the case of each of clauses (a) through (c), an applicable margin ranging from 0.125% to 0.875% per annum, based on the Company’s credit ratings (as determined by Standard & Poor’s Financial Services LLC, Moody’s Investors Service, Inc. and Fitch Ratings Inc.) or (ii) LIBOR plus the applicable margin for LIBOR loans ranging between 1.125% and 1.875% per annum, based on the Company’s credit ratings.

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The 2022 Credit Facility is unsecured and contains customary restrictions on the ability of the Company and its subsidiaries to (i) incur certain debt, (ii) make certain investments, (iii) make certain acquisitions of other entities, (iv) incur liens, (v) dispose of assets, (vi) make non-cash distributions to shareholders, and (vii) engage in transactions with affiliates. These covenants are subject to a number of significant exceptions and limitations. The 2022 Credit Facility also requires that the Company maintain a maximum ratio of total indebtedness to EBITDA (earnings before interest expense, taxes, depreciation and amortization), and a minimum interest coverage ratio during the term of the 2022 Credit Facility. As of March 31, 2019, the Company was in compliance with the covenants under the 2022 Credit Facility agreement.
Notes due February 2020 and February 2023
In February 2013, the Company issued $500 million of 4.625% Notes due February 15, 2020 and $500 million of 5.000% Notes due February 15, 2023 (collectively the "Notes") in a private offering pursuant to Rule 144A and Regulation S under the Securities Act. In July 2013, the Company exchanged these notes for new notes with substantially similar terms and completed the registration of these notes with the Securities and Exchange Commission.
Interest on the Notes is payable semi-annually, which commenced on August 15, 2013. The Notes are senior unsecured obligations of the Company, rank equally with all of the Company's other existing and future senior and unsecured debt obligations, and up until June 30, 2017 were guaranteed, jointly and severally, fully and unconditionally on an unsecured basis, by certain of the Company's 100% owned subsidiaries (the "guarantor subsidiaries"). The Company replaced its $2.1 billion credit facility, which was due to expire in March 2019 and was guaranteed by the guarantor subsidiaries, with the 2022 Credit Facility, which is not guaranteed by the guarantor subsidiaries. Effective upon the replacement, all guarantor subsidiaries were released from their guarantees under each indenture for the Notes.
At any time prior to maturity, the Company may redeem some or all of the Notes at a redemption price equal to 100% of the principal amount of the Notes redeemed, plus an applicable premium accrued and unpaid interest, if any, to the applicable redemption date. Upon the occurrence of a change of control repurchase event (as defined in the Notes indenture), the Company must offer to repurchase the Notes at a repurchase price equal to 101% of the principal amount of the Notes repurchased, plus accrued and unpaid interest, if any, to the applicable repurchase date.
The indenture governing the Notes contains covenants that, among other things, restrict the ability of the Company and certain of the Company's subsidiaries to create liens; enter into sale-leaseback transactions; create, incur, issue, assume or guarantee any funded debt; and consolidate or merge with, or convey, transfer or lease all or substantially all of the Company's assets to, another person. These covenants are subject to a number of significant limitations and exceptions set forth in the indenture. The indenture also provides for customary events of default, including, but not limited to, cross defaults to certain specified other debt of the Company and its subsidiaries. In the case of an event of default arising from specified events of bankruptcy or insolvency, all outstanding Notes will become due and payable immediately without further action or notice. If any other event of default under the indenture occurs or is continuing, the applicable trustee or holders of at least 25% in aggregate principal amount of the then outstanding Notes may declare all of the Notes to be due and payable immediately. As of March 31, 2019, the note due February 2020 hasborrowings have been included inas bank borrowings and current liabilities onportion of long-term debt under the consolidated balance sheet, and the Company was in compliance with the covenants in the indenture governing the Notes as of March 31, 2019.
Notes due June 2025
In June 2015, the Company issued $600 million of 4.750% Notes ("2025 Notes") due June 15, 2025 in a private offering pursuant to Rule 144A and Regulation S under the Securities Act, at 99.213% of face value, and an effective yield of approximately 4.850%. The Company received net proceeds of approximately $595.3 million from the issuance which was used for general corporate purposes. During January 2016, the Company exchanged these notes for new notes with substantially similar terms and completed the registration of these notes with the Securities and Exchange Commission.
The Company incurred approximately $7.9 million of costs in conjunction with the issuance of the 2025 Notes. The issuance costs were capitalized and presented on the balance sheet as a direct deduction from the carrying amount of the 2025 Notes.
Interest on the 2025 Notes is payable semi-annually, commencing on December 15, 2015. The 2025 Notes are senior unsecured obligations of the Company, rank equally with all of the Company's other existing and future senior and unsecured debt obligations, and up until June 30, 2017 were guaranteed, jointly and severally, fully and unconditionally on an unsecured basis, by each of the Company's 100% owned subsidiaries (the "guarantor subsidiaries"). The Company replaced its $2.1 billion credit facility, which was due to expire in March 2019 and was guaranteed by the guarantor subsidiaries, with the 2022

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Credit Facilities, which is not guaranteed by the guarantor subsidiaries. Effective upon the replacement, all guarantor subsidiaries were released from their guarantees under the indenture for the 2025 Notes.
At any time prior to March 15, 2025, the Company may redeem some or all of the 2025 Notes at a redemption price equal to 100% of the principal amount of the 2025 Notes redeemed, plus an applicable premium and accrued and unpaid interest, if any, to the applicable redemption date. Upon the occurrence of a change of control repurchase event (as defined in the 2025 Notes indenture), the Company must offer to repurchase the 2025 Notes at a repurchase price equal to 101% of the principal amount of the 2025 Notes repurchased, plus accrued and unpaid interest, if any, to the applicable repurchase date.
The indenture governing the 2025 Notes contains covenants that, among other things, restrict the ability of the Company and certain of the Company's subsidiaries to create liens; enter into sale-leaseback transactions; create, incur, issue, assume or guarantee any funded debt; and consolidate or merge with, or convey, transfer or lease all or substantially all of the Company's assets to, another person, or permit any other person to consolidate, merge, combine or amalgamate with or into the Company. These covenants are subject to a number of significant limitations and exceptions set forth in the indenture. The indenture also provides for customary events of default, including, but not limited to, cross defaults to certain specified other debt of the Company and its subsidiaries. In the case of an event of default arising from specified events of bankruptcy or insolvency, all outstanding 2025 Notes will become due and payable immediately without further action or notice. If any other event of default under the agreement occurs or is continuing, the applicable trustee or holders of at least 25% in aggregate principal amount of the then outstanding 2025 Notes may declare all of the 2025 Notes to be due and payable immediately, but upon certain conditions such declaration and its consequences may be rescinded and annulled by the holders of a majority in principal amount of the 2025 Notes. As of March 31, 2019, the Company was in compliance with the covenants in the indenture governing the 2025 Notes.
Other Credit Lines
In February 2019, a subsidiary of the Company entered into a $100 million uncommitted credit import advance facility (the "Advance Facility"), under which there was $91.4 million advances outstanding as of March 31, 2019. The Advance Facility will be used to assist the Company in the import of goods into India. Advances under this facility are repayable at any time, and bear interest at LIBOR plus a margin of 0.70%. The Company anticipates repaying the facility in fiscal year 2020.sheet.
In July 2018, a subsidiary of the Company entered into a $200 million term loan facility (the "Facility""India Facility"), under which there was $78.8$84.1 million in borrowings outstanding as of March 31, 2019.2022. The India Facility will bewas used to fund capital expenditureexpenditures to support the Company's expansion planplans for India. The availability period during which drawdowns can be made will bewas from the date of the agreement to and including June 30, 2019.January 2020. The maximum maturity of each drawdown will be 5 years from the funded Capex shipment date. As a result, the longest maturity date of any future drawdown under the India Facility will beis June 30, 2024.2023. Borrowings under this term loan bear interest at LIBOR plus a margin of 0.90% to 1.15% depending on loan duration.
In January 2017, the Company borrowed €100 million, (approximately $112.5 million as of March 31, 2019), under a 5-year, term-loan agreement due January 2, 2022. Borrowings under this term loan bear interest at EURIBOR minus 0.1% plus the applicable margin ranging between 0.40% and 1.35%, based on the Company's credit ratings. The loan is repayable upon maturity.
In October 2015,During the fourth quarter of fiscal year 2021, the Company repaid the loan and immediately borrowed €50 million (approximately $56.3 million asthe same amount at a fixed interest rate of (0.16)%, while maintaining the January 2, 2022 maturity date. As of March 31, 2019), under a 5-year, term-loan agreement due September 30, 2020. Borrowings2022, the borrowings under this term loan bear interest at EURIBOR plus the applicaeble margin ranging between 0.80% and 2.00%, based on the Company’s credit ratings. The loan is repayable beginning December 30, 2016term-loan have been paid in quarterly payments of €312,500 through June 30, 2020 with the remainder due upon maturity.full.
These term loans are unsecured and are guaranteed by the Company. These term loan agreements contain customary restrictions on the Company's and its subsidiaries' ability to (i) incur certain debt, (ii) make certain investments, (iii) make certain acquisitions of other entities, (iv) incur liens, (v) dispose of assets, (vi) make non-cash distributions to shareholders, and (vii) engage in transactions with affiliates. These covenants are subject to a number of exceptions and limitations. These term loan agreements also require that the Company maintain a maximum ratio of total indebtedness to EBITDA (earnings before interest expense, taxes, depreciation and amortization), and a minimum interest coverage ratio, as defined therein, during their terms.unsecured. As of March 31, 2019,2022, the Company was in compliance with the covenants under these term loan agreements.
As of March 31, 2019,2022, the Company and certain of its subsidiaries had various uncommitted revolving credit facilities, lines of credit and other credit facilities in the amount of $332.2$325 million in the aggregate. There were no borrowings outstanding under these facilities as of March 31, 20192022 and 2018.2021. These unsecured credit facilities, and lines of credit and other

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credit facilities bear annual interest at the respective country's inter-bank offering rate, plus an applicable margin, and generally have maturities that expire on various dates in future fiscal years.margin.
Term Loan due April 26, 2024
In April 2019, the Company entered into a JPY 33.525 billion term loan agreement (approximately $300 million) due April 2024, which was then swapped to U.S. dollars. The term loan will be used to fund general operations and refinance certain other outstanding debt. Borrowings under this term loan bear interest, at LIBOR plus the applicable margin of 1.21%. This term loan is unsecured, and contains customary restrictions on the ability of the Company and its subsidiaries to (i) incur certain debt, (ii) make certain investments, (iii) make certain acquisitions of other entities, (iv) incur liens, (v) dispose of assets, (vi) make non-cash distributions to shareholders, and (vii) engage in transactions with affiliates. These covenants are subject to a number of exceptions and limitations. This term loan agreement also requires that the Company maintain a maximum ratio of total indebtedness to EBITDA (earnings before interest expense, taxes, depreciation and amortization), and a minimum interest coverage ratio, as defined therein, during its term.
8.10. FINANCIAL INSTRUMENTS
Foreign Currency Contracts
The Company transacts business in various foreign countries and is therefore exposed to foreign currency exchange rate risk inherent in forecasted sales, cost of sales, and monetary assets and liabilities denominated in non-functional currencies. The Company has established risk management programs to protect against volatility in the value of non-functional currency denominated monetary assets and liabilities, and of future cash flows caused by changes in foreign currency exchange rates. The Company tries to maintain a partial or fully hedged position for certain transaction exposures, which are primarily, but not limited to, revenues, customer and vendor payments and inter-company balances in currencies other than the functional currency unit of the operating entity. The Company enters into short-term and long-term foreign currency derivativesderivative contracts, including forward, swap, and optionsoption contracts to hedge only those currency exposures associated with certain assets and liabilities, primarily accounts receivable, and accounts payable, debt, and cash flows denominated in non-functional currencies. Gains and losses on the Company's derivative contracts are designed to offset losses and gains on the assets, liabilities and transactions hedged, and accordingly, generally do not subject the Company to risk of significant accounting losses. The Company hedges committed exposures and does not engage in speculative transactions. The credit risk of these derivative contracts is minimized since the contracts are with large financial institutions and accordingly, fair value adjustments related to the credit risk of the counterparty financial institution were not material.

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As of March 31, 2019,2022, the aggregate notional amount of the Company's outstanding foreign currency derivative contracts was $7.8$11.6 billion as summarized below:
Foreign Currency
Amount
 Notional Contract
Value in USD
Foreign Currency
Amount
Notional Contract
Value in USD
CurrencyBuy Sell Buy SellCurrencyBuySellBuySell
(In thousands)(In millions)
Cash Flow Hedges       Cash Flow Hedges
CNY2,207,000
 
 $328,349
 $
CNY3,177 — $499 $— 
EUR48,763
 700
 55,445
 788
HUF34,401,000
 
 120,981
 
HUF140,860 — 435 — 
ILS181,000
 
 49,833
 
JPYJPY33,525 — 300 — 
MXN4,123,000
 
 212,987
 
MXN7,075 — 354 
MYR286,100
 30,200
 70,276
 7,418
MYR483 86 114 20 
PLN144,500
 
 37,841
 
RON247,000
 
 58,365
 
SGD42,500
 
 31,354
 
OtherN/A
 N/A
 17,853
 7,089
OtherN/AN/A261 114 
    983,284
 15,295
1,963 134 
Other Foreign Currency Contracts       Other Foreign Currency Contracts
BRL
 972,000
 
 246,092
BRL17 900 190 
CAD74,484
 132,895
 55,511
 99,042
CAD113 66 90 53 
CNY3,132,409
 458,795
 466,085
 68,230
CNY6,283 2,224 982 348 
EUR1,793,103
 2,043,034
 2,019,883
 2,303,762
EUR2,477 2,320 2,758 2,575 
GBP39,047
 30,869
 51,590
 40,857
GBP136 148 178 194 
HUF52,526,969
 54,425,127
 184,727
 191,402
HUF66,804 56,541 201 170 
ILS160,775
 77,600
 44,265
 21,365
ILS386 23 121 
INR3,921,500
 10,356,508
 56,930
 150,312
INR12,744 534 167 
MXN2,969,832
 2,078,128
 153,416
 107,352
MXN8,187 6,128 409 307 
MYR455,920
 255,210
 111,989
 62,688
MYR1,002 351 238 83 
PLNPLN243 199 58 47 
SEK706,435
 755,275
 76,470
 81,479
SEK515 579 53 62 
SGD83,800
 50,280
 61,822
 37,093
SGD97 50 71 37 
OtherN/A
 N/A
 77,860
 57,612
OtherN/AN/A69 49 
    3,360,548
 3,467,286
5,398 4,129 
Total Notional Contract Value in USD    $4,343,832
 $3,482,581
Total Notional Contract Value in USD$7,361 $4,263 
As of March 31, 20192022 and 2018,2021, the fair value of the Company's short-term foreign currency contracts was included in other current assets or other current liabilities, as applicable, in the consolidated balance sheets. Certain of these contracts are designed to economically hedge the Company's exposure to monetary assets and liabilities denominated in a non-functional currenciescurrency and are not accounted for as hedges under the accounting standards. Accordingly, changes in the fair value of these instruments are recognized in earnings during the period of change as a component of interest and other charges (income), net in the consolidated statements of operations. As of March 31, 2019 and 2018, theThe Company also has included net deferred gains and losses in accumulated other comprehensive loss, a component of shareholders' equity in the consolidated balance sheets, relating to changes in fair value of its foreign currency contracts that are accounted for as cash flow hedges. Deferred losses totaled $0.2were $40.9 million as of March 31, 2019,2022, and are expected to be recognized primarily as a component of cost of sales in the consolidated statement of operations primarily over the next twelve-month period. period, except for the USD JPY cross currency swap, and the USD HUF cross currency swaps, which are further discussed below.
The gains and losses recognized in earnings dueCompany entered into a USD JPY cross currency swap to hedge

the foreign currency risk on the JPY term loan due April 2024, and the fair value of the cross currency swap was included in other liabilities and other assets as of March 31, 2022, and March 31, 2021, respectively. Additionally, the Company entered into USD HUF cross currency swaps to hedge the foreign currency risk on the HUF bonds due December 2031, and the fair value of the cross currency swaps was included in other liabilities as of March 31, 2022. The changes in fair value of the USD JPY cross currency swap and the USD HUF cross currency swaps are reported in accumulated other comprehensive loss. In addition, corresponding amounts are reclassified out
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ineffectiveness were not material for all fiscal years presentedof accumulated other comprehensive loss to other charges (income), net to offset the remeasurements of the underlying JPY loan principal and are included as a component of interest and other, net inHUF bond principal, which also impact the consolidated statements of operations.same line.
The following table presents the fair value of the Company's derivative instruments utilized for foreign currency risk management purposes at March 31, 20192022 and 2018:2021:
Fair Values of Derivative Instruments
Asset DerivativesLiability Derivatives
Fair ValueFair Value
Balance Sheet
Location
March 31,
2022
March 31,
2021
Balance Sheet
Location
March 31,
2022
March 31,
2021
(In millions)
Derivatives designated as hedging instruments
Foreign currency contractsOther current assets$22 $23 Other current liabilities$35 $16 
Foreign currency contractsOther assets— Other liabilities61 — 
Derivatives not designated as hedging instruments
Foreign currency contractsOther current assets$21 $31 Other current liabilities$26 $32 
 Fair Values of Derivative Instruments
 Asset Derivatives Liability Derivatives
   Fair Value   Fair Value
 Balance Sheet
Location
 March 31,
2019
 March 31,
2018
 Balance Sheet
Location
 March 31,
2019
 March 31,
2018
 (In thousands)
Derivatives designated as hedging instruments           
Foreign currency contractsOther current assets $10,503
 $19,422
 Other current liabilities $10,282
 $7,065
Derivatives not designated as hedging instruments           
Foreign currency contractsOther current assets $16,774
 $23,912
 Other current liabilities $17,144
 $18,246


The Company has financial instruments subject to master netting arrangements, which providesprovide for the net settlement of all contracts with the counterparty upon maturity.a single counterparty. The Company does not offset fair value amounts for assets and liabilities recognized for derivative instruments under these arrangements, and as such, the asset and liability balances presented in the table above reflect the gross amounts of derivatives in the consolidated balance sheets. The impact of netting derivative assets and liabilities is not material to the Company's financial position for any of the periods presented.
9.11. ACCUMULATED OTHER COMPREHENSIVE LOSS
The changes in accumulated other comprehensive loss by component, net of tax, during fiscal years ended March 31, 2019, 20182022, 2021 and 20172020 are as follows:

Unrealized loss on
derivative
instruments and
other
Foreign currency
translation
adjustments
Total
(In millions)
Beginning balance on March 31, 2019$(42)$(109)$(151)
Other comprehensive loss before reclassifications(43)(22)(65)
Net (gains) losses reclassified from accumulated other comprehensive loss(2)
Net current-period other comprehensive loss(40)(24)(64)
Ending balance on March 31, 2020$(82)$(133)$(215)
Other comprehensive gain before reclassifications48 56 104 
Net (gains) losses reclassified from accumulated other comprehensive loss(8)— (8)
Net current-period other comprehensive gain40 56 96 
Ending balance on March 31, 2021$(42)$(77)$(119)
Other comprehensive loss before reclassifications(49)(44)(93)
Net losses reclassified from accumulated other comprehensive loss25 30 
Net current-period other comprehensive loss(24)(39)(63)
Ending balance on March 31, 2022$(66)$(116)$(182)
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 Unrealized loss on
derivative
instruments and
other
 Foreign currency
translation
adjustments
 Total
 (In thousands)
Beginning balance on April 1, 2016$(41,522) $(94,393) $(135,915)
Other comprehensive gain (loss) before reclassifications6,925
 (1,198) 5,727
Net (gains) losses reclassified from accumulated other comprehensive loss2,171
 (126) 2,045
Net current-period other comprehensive gain (loss)9,096
 (1,324) 7,772
Ending balance on March 31, 2017$(32,426) $(95,717) $(128,143)
Other comprehensive gain before reclassifications15,667
 46,022
 61,689
Net gains reclassified from accumulated other comprehensive loss(18,987) (404) (19,391)
Net current-period other comprehensive gain (loss)(3,320) 45,618
 42,298
Ending balance on March 31, 2018$(35,746) $(50,099) $(85,845)
Other comprehensive loss before reclassifications(48,302) (59,508) (107,810)
Net losses reclassified from accumulated other comprehensive loss42,492
 
 42,492
Net current-period other comprehensive loss(5,810) (59,508) (65,318)
Ending balance on March 31, 2019$(41,556) $(109,607) $(151,163)

Net losses reclassified from accumulated other comprehensive loss during fiscal year 2019 relating to derivative instruments and other includes $40.6 million attributable to the Company's cash flow hedge instruments which were recognized as a component of cost of sales in the consolidated statement of operations.
Net gains reclassified from accumulated other comprehensive loss during fiscal year 2018 relating to derivative instruments and other includes $20.8 million attributable to the Company's cash flow hedge instruments which were recognized as a component of cost of sales in the consolidated statement of operations.
Net (gains) losses reclassified from accumulated other comprehensive loss was $30 million loss during fiscal year 2022, and were immaterial during fiscal year 2017.years 2021 and 2020.
The tax impact to other comprehensive loss was immaterial for all periods presented.
10.
12. TRADE RECEIVABLES SECURITIZATION
The Company sells trade receivables under two2 asset-backed securitization programs and an accounts receivable factoring program.
Asset-Backed Securitization Programs
The Company continuously sellshas historically sold designated pools of trade receivables under its Global Asset-Backed Securitization Agreement (the "Global Program") and its North American Asset-Backed Securitization Agreement (the "North American Program," collectively,and together with the Global Program, the "ABS Programs") to affiliated special purpose entities, each of which in turn sells 100%a fraction of the receivables to unaffiliated financial institutions. Theseinstitutions, based on the Company's requirements. Under these programs, allow the operating subsidiaries to receive a cash payment and a deferredentire purchase price receivable forof sold receivables.receivables are paid in cash. The portionABS Programs contain guarantees of the purchase price for the receivables which is not paidpayment by the unaffiliated financial institutions in cash is a deferred purchase price receivable, which is paid to the special purpose entity as payments onentities, in amounts equal to approximately the net cash proceeds under the programs, and are collateralized by certain receivables are collected from account debtors.held by the special purpose entities. The deferred purchase price receivable represents a beneficial interest in the transferred financial assets and is recognized at fair value as part of the sale transaction. The deferred purchase price receivables, which are included in other current assetsguarantee obligation was zero as of March 31, 20192022 and March 31, 2018, were carried at the expected recovery amount of the related receivables.2021, respectively. The difference between the carrying amount of the receivablesaccounts receivable balances sold under these programsthe ABS Programs were removed from the consolidated balance sheets and the sum ofcash proceeds received by the Company were included as cash and fair value of the deferred purchase price receivables received at time of

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transfer is recognized as a loss on sale of the related receivables, and recorded in interest and other, netprovided by operating activities in the consolidated statements of operations and were immaterial for all periods presented.cash flows.
Following the transfer of the receivables to the special purpose entities, the transferred receivables are legally isolated from the Company and its affiliates, and upon the sale of the receivables from the special purpose entities to the unaffiliated financial institutions, effective control of the transferred receivables is passed to the unaffiliated financial institutions, which hashave the right to pledge or sell the receivables. Although the special purpose entities are consolidated by the Company, they are separate corporate entities and their assets are available first to satisfy the claims of their creditors. The investment limits set by the financial institutions are $900uncommitted and amount to $500 million for the Global Program of which $725 million is committed and $175 million is uncommitted, and $250 million for the North American Program, of which $210 million is committed and $40 million is uncommitted. Both programs require a minimum level of deferred purchase price receivable to be retained by the Company in connection with the sales.Program.
The Company services, administers and collects the receivables on behalf of the special purpose entities and receives a servicing fee of 0.1% to 0.5% of serviced receivables per annum. Servicing fees recognized were zero during thefiscal year ended March 31, 2022 and were not material during fiscal years ended March 31, 2019, 20182021 and 2017 were not material2020 and are included in interest, and other, net within the consolidated statements of operations. As the Company estimates the fee it receives in return for its obligation to service these receivables is at fair value, no servicing assets or liabilities are recognized.
The Company's deferred purchase price receivables relating to its asset-backed securitization program are recorded initially at fair value based on a discounted cash flow analysis using unobservable inputs (i.e., level 3 inputs), which are primarily risk free interest rates adjusted for the credit quality of the underlying creditor. Due to its high credit quality and short term maturity, the fair value approximates carrying value. Significant increases in either of the major unobservable inputs (credit spread, risk free interest rate) in isolation would result in lower fair value estimates, however the impact is not material. The interrelationship between these inputs is also insignificant.
As of March 31, 20192022 and 2018, the accounts receivable balances that were sold under the ABS Programs were removed from the consolidated balance sheets and the net cash proceeds received by the Company during fiscal years ended March 31, 2019, 2018 and 2017 were included as cash provided by operating activities in the consolidated statements of cash flows. The Company recognizes these proceeds net of the deferred purchase price, consisting of a receivable from the purchasers that entitles the Company to certain collections on the receivable. The Company recognizes the collection of the deferred purchase price in net cash provided by investing activities in the consolidated statements of cash flows separately as cash collections of deferred purchase price.
As of March 31, 2019, approximately $1.2 billion of2021, no accounts receivable had been sold under the ABS programs.
For the fiscal year ended March 31, 2021, cash flows from sales of receivables to the special purpose entities under the ABS Programs consisted of approximately $8.7 billion, for which the Company had received nettransfers of receivables. Further, cash proceedsflows from sales of $0.9 billion and deferred purchase price receivables of $0.3 billion. As of March 31, 2018, approximately $1.5 billion of accounts receivable had been sold tofrom the special purpose entities to unaffiliated financial institutions, during fiscal year 2021, consisted of approximately $0.6 billion for which the Company had received net cash proceedstransfers of $1.1 billion and deferred purchase price receivables of $0.4 billion. The deferred purchase price balances as of March 31, 2019 and March 31, 2018, also represent the non-cash beneficial interest obtained in exchange for securitized receivables.
For the fiscal yearsyear ended March 31, 2019, 2018 and 2017,2020, cash flows from sales of receivables under the ABS Programs consisted of approximately $6.8 billion, $8.0 billion and $7.6 billion, respectively, for transfers of receivables, and approximately $3.6$2.6 billion $4.6 billion and $5.0 billion, respectively, for collections on deferred purchase price receivables.receivables (effective November 2019, upon amending the previous ABS programs, the Company no longer holds a deferred purchase price receivables balance). The Company's cash flows from transfertransfers of receivables consist primarily of proceeds from collections reinvested in revolving-period transfers. Cash flows from new transfers were not significant for all periods presented.
Trade Accounts Receivable Sale Programs
The Company also sold accounts receivables to certain third-party banking institutions. The outstanding balance of receivables sold and not yet collected on accounts where the Company has continuing involvement was approximately $0.5$0.6 billion and $0.3$0.2 billion as of March 31, 20192022 and 2018,2021, respectively. For the fiscal years ended March 31, 2019, 20182022, 2021 and 2017,2020, total accounts receivablesreceivable sold to certain third party banking institutions was approximately $2.7$1.6 billion, $1.5$0.8 billion and $1.3$1.6 billion, respectively. The receivables that were sold were removed from the consolidated balance sheets and the cash received is reflectedwas included as cash provided by operating activities in the consolidated statements of cash flows.
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11. FAIR VALUE MEASUREMENT OF ASSETS AND LIABILITIES

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13. FAIR VALUE MEASUREMENT OF ASSETS AND LIABILITIES
Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact, and it considers assumptions that market participants would use when pricing the asset or liability. The accounting guidance for fair value establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument's categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is as follows:
Level 1—1 - Applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. There were no balances classified as level 1 in the fair value hierarchy as of March 31, 2022.
The Company has deferred compensation plans for its officers and certain other employees. Amounts deferred under the plans are invested in hypothetical investments selected by the participant or the participant's investment manager. The Company's deferred compensation plan assets are included in other noncurrent assets on the consolidated balance sheets and include investments in equity securities that are valued using active market prices.
Level 2—2 - Applies to assets or liabilities for which there are inputs other than quoted prices included within level 1 that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets) such as cash and cash equivalents and money market funds; or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.
The Company values foreign exchange forward contracts using level 2 observable inputs which primarily consist of an income approach based on the present value of the forward rate less the contract rate multiplied by the notional amount.
The Company's cash equivalents are comprised of bank time deposits and money market funds, which are valued using level 2 inputs, such as interest rates and maturity periods. Due to their short-term nature, their carrying amount approximates fair value.
The Company has deferred compensation plans for its officers and certain other employees. Amounts deferred under the plans are invested in hypothetical investments selected by the participant or the participant's investment manager. The Company's deferred compensation plan assets alsoare included in other assets on the consolidated balance sheets and include money market funds, mutual funds, corporate and government bonds and certain convertible securities that are valued using prices obtained from various pricing sources. These sources price these investments using certain market indices and the performance of these investments in relation to these indices. As a result, the Company has classified these investments as level 2 in the fair value hierarchy. There were no investments classified as level 1 in the fair value hierarchy as of March 31, 2022.
Level 3—3 - Applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.
The Company has accrued for contingent consideration in connection with its business acquisitions as applicable, which is measured at fair value based on certain internal models and unobservable inputs. There were no contingent consideration liabilities outstanding as of March 31, 20192022 and 2018.2021.
There were no transfers between levels in the fair value hierarchy during fiscal years 20192022 and 2018.2021.
Financial Instruments Measured at Fair Value on a Recurring Basis
The following table presents the Company's assets and liabilities measured at fair value on a recurring basis as of March 31, 20192022 and 2018:

2021:
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Fair Value Measurements as of March 31, 2022
Level 1Level 2Level 3Total
(In millions)
Assets:    
Money market funds and time deposits (Note 2)$— $2,285 $— $2,285 
Foreign currency contracts (Note 10)— 43 — 43 
Deferred compensation plan assets:
Mutual funds, money market accounts and equity securities— 39 — 39 
Liabilities:
Foreign currency contracts (Note 10)$— $(122)$— $(122)

Fair Value Measurements as of March 31, 2019Fair Value Measurements as of March 31, 2021
Level 1 Level 2 Level 3 TotalLevel 1Level 2Level 3Total
(In thousands)(In millions)
Assets: 
  
  
  
Assets:
Money market funds and time deposits (Note 2)$
 $473,888
 $
 $473,888
Money market funds and time deposits (Note 2)$— $1,507 $— $1,507 
Foreign exchange forward contracts (Note 8)
 27,277
 
 27,277
Foreign currency contracts (Note 10)Foreign currency contracts (Note 10)— 59 — 59 
Deferred compensation plan assets:       Deferred compensation plan assets:
Mutual funds, money market accounts and equity securities2,845
 76,852
 
 79,697
Mutual funds, money market accounts and equity securities— 48 — 48 
Liabilities:       Liabilities:
Foreign exchange forward contracts (Note 8)$
 $(27,426) $
 $(27,426)
Foreign currency contracts (Note 10)Foreign currency contracts (Note 10)$— $(48)$— $(48)

 Fair Value Measurements as of March 31, 2018
 Level 1 Level 2 Level 3 Total
 (In thousands)
Assets:       
Money market funds and time deposits (Note 2)$
 $452,622
 $
 $452,622
Foreign exchange forward contracts (Note 8)
 43,334
 
 43,334
Deferred compensation plan assets:       
Mutual funds, money market accounts and equity securities7,196
 67,532
 
 74,728
Liabilities:       
Foreign exchange forward contracts (Note 8)$
 $(25,311) $
 $(25,311)


Other financial instruments
The following table presents the Company's liabilitiesmajor debts not carried at fair value as of March 31, 2019 and 2018:
 As of March 31, 2019 As of March 31, 2018  
 Carrying
Amount
 Fair
Value
 Carrying
Amount
 Fair
Value
 Fair Value
Hierarchy
 (In thousands) (In thousands)  
4.625% Notes due February 2020$500,000
 $499,950
 $500,000
 $513,596
 Level 1
Term Loan, including current portion, due in installments through November 2021671,563
 670,724
 687,813
 689,966
 Level 1
Term Loan, including current portion, due in installments through June 2022458,531
 457,958
 483,656
 485,470
 Level 1
5.000% Notes due February 2023500,000
 499,950
 500,000
 525,292
 Level 1
4.750% Notes due June 2025596,815
 599,940
 596,387
 627,407
 Level 1
Euro Term Loan due September 202052,746
 52,746
 59,443
 59,443
 Level 2
Euro Term Loan due January 2022112,524
 112,524
 123,518
 123,518
 Level 2
India Facilities170,206
 170,206
 
 
 Level 2
Total$3,062,385
 $3,063,998
 $2,950,817
 $3,024,692
  


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The Term Loans due November 2021 and June 2022 and the2021:
As of March 31, 2022As of March 31, 2021
Carrying
Amount
Fair
Value
Carrying
Amount
Fair
Value
Fair Value
Hierarchy
(In millions)(In millions)
5.000% Notes due February 2023$500 $511 $500 $537 Level 1
Term Loan due April 2024 - three-month TIBOR plus 0.43%273 273 305 305 Level 2
4.750% Notes due June 2025598 615 598 670 Level 1
3.750% Notes due February 2026690 690 694 756 Level 1
4.875% Notes due June 2029659 687 661 756 Level 1
4.875% Notes due May 2030690 713 694 800 Level 1
Euro Term Loans389 389 168 168 Level 2
3.600% HUF Bonds due December 2031301 301 — — Level 2
India Facilities84 84 133 133 Level 2
The Notes due February 2020,2023, June 2025, February 20232026, June 2029 and June 2025May 2030 are valued based on broker trading prices in active markets.
The Company values its Term Loan due April 2024, India Facilities, Euro Term Loans due September 2020 and January 2022, and India FacilitiesHUF Bonds, based on the current market rate, and as of March 31, 2019,2022, the carrying amounts approximate fair values.
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14. COMMITMENTS AND CONTINGENCIES
Commitments
As of March 31, 20192022 and 2018,2021, the gross carrying amount and associated accumulated depreciation of the Company's property and equipment financed under capitalfinance leases, and the related obligations was not material. The Company also leases certain of its facilities and equipment under non-cancelable operating leases. These operating leases expire in various years through 2035 and require2038. Refer to note 3 for additional details on the following minimum lease payments:
Fiscal Year Ending March 31,Operating Lease
 (In thousands)
2020$155,391
2021113,245
202293,777
202381,335
202467,341
Thereafter171,828
Total minimum lease payments$682,917

Total rent expense amounted to $176.8 million, $140.3 million and $124.7 million in fiscal years 2019, 2018 and 2017, respectively.payments.
Litigation and other legal matters
In connection with the matters described below, the Company has accrued for loss contingencies where it believes that losses are probable and estimable. The amounts accrued are not material. Although it is reasonably possible that actual losses could be in excess of the Company’s accrual, the Company is unable to estimate a reasonably possible loss or range of loss in excess of its accrual, except as discussed below, due to various reasons, including, among others, that: (i) the proceedings are in early stages or no claims hashave been asserted, (ii) specific damages have not been sought in all of these matters, (iii) damages, if asserted, are considered unsupported and/or exaggerated, (iv) there is uncertainty as to the outcome of pending appeals, motions, or settlements, (v) there are significant factual issues to be resolved, and/or (vi) there are novel legal issues or unsettled legal theories presented. Any such excess loss could have a material adverse effect on the Company’s results of operations or cash flows for a particular period or on the Company’s financial condition.
In addition, the Company provides design and engineering services to its customers and also designs and makes its own products. As a consequence of these activities, its customers are requiring the Company to take responsibility for intellectual property to a greater extent than in its manufacturing and assembly businesses. Although the Company believes that its intellectual property assets and licenses are sufficient for the operation of its business as it currently conducts it, from time to time third parties do assert patent infringement claims against the Company or its customers. If and when third parties make assertions regarding the ownership or right to use intellectual property, the Company could be required to either enter into licensing arrangements or to resolve the issue through litigation. Such license rights might not be available to the Company on commercially acceptable terms, if at all, and any such litigation might not be resolved in itsthe Company's favor. Additionally, litigation could be lengthy and costly and could materially harm the Company's financial condition regardless of the outcome. The Company also could be required to incur substantial costs to redesign a product or re-perform design services.
From time to time, the Company enters into IPintellectual property licenses (e.g., patent licenses and software licenses) with third parties which obligate the Company to report covered behavior to the licensor and pay license fees to the licensor for certain activities

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or products, or that enable the Company's use of third partythird-party technologies. The Company may also decline to enter into licenses for intellectual property that it does not think is useful for or used in its operations, or for which its customers or suppliers have licenses or have assumed responsibility. Given the diverse and varied nature of its business and the location of its business around the world, certain activities the Company performs, such as providing assembly services in China and India, may fall outside the scope of those licenses or may not be subject to the applicable intellectual property rights. The Company's licensors may disagree and claim royalties are owed for such activities. In addition, the basis (e.g., base price) for any royalty amounts owed are audited by licensors and may be challenged. Some of these disagreements may lead to claims and litigation that might not be resolved in the Company's favor. Additionally, litigation could be lengthy and costly and could materially harm the Company's financial condition regardless of the outcome. In March 2018, the Company received an inquiry from a licensor referencing its patent license agreement with the Company, and requesting information relating to royalties for products that the Company assembles for a customer in China. The Company and licensor have had subsequent discussions, during which the licensor claimed that the Company owes a material amount under the patent license agreement, which the Company disputes and would contest vigorously. While the Company cannot predict the outcome with respect to this claim or estimate an amount or reasonable range of loss, a material loss is reasonably possible.
On May 8, 2018, a putative class action was filed in the Northern District of California against the Company and certain officers alleging violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5, promulgated thereunder, alleging misstatements and/or omissions in certain of the Company’s financial results, press releases and SEC filings made during the putative class period of January 26, 2017 through April 26, 2018. On October 1, 2018, the Court appointed lead plaintiff and lead plaintiff’s counsel in the case. On November 28, 2018, lead plaintiff filed an amended complaint alleging misstatements and/or omissions in certain of the Company’s SEC filings, press releases, earnings calls, and analyst and investor conferences and expanding the putative class period through October 25, 2018. On April 3, 2019, the Court vacated its prior order appointing lead plaintiff and lead plaintiff’s counsel and reopened the lead plaintiff appointment process. Motions for appointment asOn September 26, 2019, the Court appointed a new lead plaintiff, are due JuneNational Elevator Industry Pension Fund, and lead plaintiff’s counsel in the case. On November 8, 2019, lead plaintiff filed a further amended complaint. On December 4, 2019. Defendants’ deadline to move2019, defendants filed a motion to dismiss is vacated until after the amended complaint. On May 29, 2020, the Court granted defendants’ motion to dismiss without prejudice and gave lead plaintiff appointment process is complete and an operative complaint is designated.  In addition,30 days to amend. On June 29, 2020, lead plaintiff filed a further amended complaint. On July 27, 2020, defendants filed a motion to dismiss the amended complaint. On December 10, 2020, the Court has setgranted defendants’ motion to dismiss with prejudice and entered judgment in favor of defendants. On January 7, 2021, lead plaintiff filed a case management conferencenotice
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of appeal to the Ninth Circuit Court of Appeals. On December 21, 2021, the Court of Appeals affirmed the dismissal with prejudice of the case. The Court of Appeals’ decision took effect on January 12, 2022. The time for July 17, 2019. The Company believes thatplaintiffs to seek review by the claims are without merit and intends to vigorously defend this case.U.S. Supreme Court lapsed on March 21, 2022.This matter is now fully resolved.
On April 21, 2016, SunEdison, Inc. (together with certain of its subsidiaries, "SunEdison") filed for protection under Chapter 11 of the U.S. Bankruptcy Code. During the fiscal year ended March 31, 2016, the Company recognized a bad debt reserve charge of $61.0 million associated with its outstanding SunEdison receivables and accepted return of previously shipped inventory of approximately $90.0 million. SunEdison stated in schedules filed with the Bankruptcy Court that, within the 90 days preceding SunEdison's bankruptcy filing, the Company received approximately $98.6 million of inventory and cash transfers of $69.2 million, which in aggregate represents the Company's estimate of the maximum reasonably possible contingent loss. On April 15, 2018, a subsidiary of the Company together with its subsidiaries and affiliates, entered into a tolling agreement with the trustee of the SunEdison Litigation Trust to toll any applicable statute of limitations or other time-related defense that might exist in regards to any potential claims that either party might be able to assert against the other for a period that will end at the earlier to occur of: (a) 60 days after a party provides written notice of termination; (b) six years from the effective date of April 15, 2018; or (c) such other date as the parties may agree in writing. No preferenceThe parties reached a cash settlement, that is fully provided for as of March 31, 2022, whereby the SunEdison Litigation Trust released all potential claims have been asserted against the Company and consideration has been given to the related contingencies based on the facts currently known. The Company has a number of affirmative and direct defenses to any potential claims for recovery and intends to vigorously defend any such claim, if asserted.Company.
One of the Company's Brazilian subsidiaries has received related assessments for certain sales and import taxes. There are sixwere originally 6 tax assessments totaling 359.9the updated amount of 373.7 million Brazilian reals (approximately USD $91.1$78.7 million based on the exchange rate as of March 31, 2019)2022). TheFive of the assessments are in various stages of the review process at the administrative levellevel; the Company successfully defeated 1 of the 6 assessments in September 2019 (totaling approximately the updated amount of 60.6 million Brazilian reals or USD $12.8 million); that assessment remains subject to appeal and no tax proceeding has been finalized yet. The Company was unsuccessful at the administrative level for one of the assessments and filed an annulment action in federal court in Brasilia, Brazil on March 23, 2020; the updated value of that assessment is 33.9 million Brazilian reals (approximately USD $7.1 million). The Company believes there is no legal basis for any of these assessments and that it has meritorious defenses anddefenses. The Company will continue to vigorously oppose all of these assessments, as well as any future assessments. The Company does not expect final judicial determination on any of these claims for severalin the next four years.
On February 14, 2019, the Company submitted an initial notification of voluntary disclosure to the U.S. Department of the Treasury, Office of Foreign Assets Control ("OFAC") regarding possible noncompliance with U.S. economic sanctions requirements among certain non-U.S. Flex-affiliated operations. TheOn September 28, 2020, the Company has initiatedmade a submission to OFAC that completed the Company’s voluntary disclosure based on the results of an internal investigation regarding thisthe matter. The matter isOn June 11, 2021, the Company notified OFAC that it had identified possible additional relevant transactions at a very preliminary stage.one non-U.S. Flex-affiliated operation. The Company cannot predict how longsubmitted an update to OFAC on November 16, 2021 reporting on the results of its review of those transactions. The Company intends to continue to cooperate fully with OFAC in this matter going forward. Nonetheless, it will take to complete the investigation or to what extentis reasonably possible that the Company could be subject to penalties.penalties that could have a material adverse effect on the Company’s financial position, results of operations or cash flows.

A foreign Tax Authority (“Tax Authority”) has assessed a cumulative total of approximately $163.9 million in taxes owed for multiple Flex legal entities within its jurisdiction for various fiscal years ranging from fiscal year 2010 through fiscal year 2018. The assessed amounts related to the denial of certain deductible intercompany payments. The Company disagrees with the Tax Authority’s assessments and is actively contesting the assessments through the administrative and judicial processes. 
As the final resolution of the above outstanding tax item remains uncertain, the Company continues to provide for the uncertain tax positions based on the more likely than not standard. While the resolution of the issues may result in tax liabilities, interest and penalties, which may be significantly higher than the amounts accrued for these matters, management currently believes that the resolution will not have a material adverse effect on the Company’s financial position, results of operations or cash flows.
In November 2019, the Company received a favorable ruling from the Brazilian Supreme Court in a case against the Brazilian tax authorities regarding the right to exclude the value of a state tax referred to as ICMS from the calculation of a federal operational tax basis referred to as PIS/COFINS. The ruling allowed the Company the right to recover amounts unduly paid from February 2003 to December 2019. As a result, the Company recorded an immaterial gain in fiscal year 2020 for the recovery of taxes. The Receita Federal, a tax authority in Brazil, filed a Motion of Clarification on a leading case with the Brazilian Supreme Court previously in 2017 and in May 2021, the Brazilian Supreme Court ruled in favor of the taxpayers and specifically clarified that the ICMS taxes to be excluded from the PIS/COFINS tax basis are to be based on the amount stated
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on the sales invoice irrespective of any further discounts received from the state. As a result of this ruling, which further reinforced the favorable ruling received in November 2019, the Company initiated the request for "Credit Habilitation" with the tax authorities in June 2021 to request additional PIS/COFINS credit in the amount of 776.7 million Brazilian reals (approximately USD $154.8 million based on the exchange rate as of July 2, 2021). However, the nature of the Company's credits requested for Habilitation were not specifically addressed by the May 2021 ruling, and accordingly there remained uncertainty regarding the Company’s ability to recognize these credits. The Company considered the recognition of these credits to be a contingent gain in accordance with ASC 450, Contingencies, and did not record a gain for such credits in the three-month period ended July 2, 2021 as it had not resolved all contingencies to conclude a realized or realizable amount. In September 2021, the Credit Habilitation request was approved by the tax authorities and the Company recognized a gain of 809.6 million Brazilian reals (approximately USD $149.3 million based on the exchange rate as of October 1, 2021) included in other charges (income), net in the consolidated statements of operations for the twelve-month period ended March 31, 2022. The total gain recorded included credits from February 2003 to September 2021, net of additional taxes, as the Credit Habilitation received covering the period from February 2003 to December 2019 resolved any uncertainty regarding the Company's ability to claim such credits. This gain is non-cash and can only be used to offset certain current and future tax obligations. As of March 31, 2022, credits totaling 378.7 million Brazilian reals (approximately USD $79.8 million based on the exchange rate as of March 31, 2022) are included in other current assets.
In addition to the matters discussed above, from time to time, the Company is subject to legal proceedings, claims, and litigation arising in the ordinary course of business. The Company defends itself vigorously against any such claims. Although the outcome of these matters is currently not determinable, management expects that any losses that are probable or reasonably possible of being incurred as a result of these matters, which are in excess of amounts already accrued in the Company’s consolidated balance sheets, would not be material to the financial statements as a whole.
13.15. INCOME TAXES
The domestic (Singapore) and foreign components of income before income taxes were comprised of the following:
Fiscal Year Ended March 31,
202220212020
(In millions)
Domestic$352 $242 $(2)
Foreign693 472 161 
Total$1,045 $714 $159 
 Fiscal Year Ended March 31,
 2019 2018 2017
 (In thousands)
Domestic$(10,498) $323,522
 $435,709
Foreign192,624
 197,371
 (64,861)
Total$182,126
 $520,893
 $370,848


The provision for income taxes consisted of the following:
Fiscal Year Ended March 31,
202220212020
(In millions)
Current:
Domestic$$$
Foreign146 105 62 
149 106 64 
Deferred:
Domestic— — 
Foreign(44)(6)
(44)(5)
Provision for income taxes$105 $101 $71 

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 Fiscal Year Ended March 31,
 2019 2018 2017
 (In thousands)
Current:     
Domestic$1,517
 $2,894
 $1,037
Foreign99,894
 50,889
 71,773
 101,411
 53,783
 72,810
Deferred:     
Domestic(40) 422
 350
Foreign(12,644) 38,154
 (21,876)
 (12,684) 38,576
 (21,526)
Provision for income taxes$88,727
 $92,359
 $51,284
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The domestic statutory income tax rate was approximately 17.0% in fiscal years 2019, 20182022, 2021 and 2017.2020. The reconciliation of the income tax expense expected based on domestic statutory income tax rates to the expense for income taxes included in the consolidated statements of operations is as follows:
Fiscal Year Ended March 31,
202220212020
(In millions)
Income taxes based on domestic statutory rates$178 $121 $27 
Effect of jurisdictional tax rate differential(114)(82)(81)
Change in unrecognized tax benefit12 11 (1)
Change in valuation allowance12 35 93 
Foreign exchange movement on prior year taxes recoverable(9)13 
Tax impacts related to sale of Nextracker Series A Preferred Units13 — — 
APB23 tax liability
Other12 10 11 
Provision for income taxes$105 $101 $71 
 Fiscal Year Ended March 31,
 2019 2018 2017
 (In thousands)
Income taxes based on domestic statutory rates$30,961
 $88,552
 $63,044
Effect of tax rate differential(135,033) (244,128) (85,132)
Change in liability for uncertain tax positions(15,381) 22,180
 684
Change in valuation allowance191,896
 297,330
 78,728
Recognition of prior year taxes recoverable5,439
 (53,757) 
Expiration of tax attributes4,277
 
 
Other6,568
 (17,818) (6,040)
Provision for income taxes$88,727
 $92,359
 $51,284

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A number of countries in which the Company is located allow for tax holidays or provide other tax incentives to attract and retain business. In general, these holidays were secured based on the nature, size and location of the Company’s operations. The aggregate dollar effect on the Company’s income resulting from tax holidays and tax incentives to attract and retain business for the fiscal years ended March 31, 2019, 20182022, 2021 and 20172020 was $24.4$22.5 million, $21.7$21.2 million and $15.5$15.6 million, respectively. For the fiscal year ended March 31, 2019,2022, the effect on basic and diluted earnings per share was $0.05 and $0.05, respectively, and the effecteffects on basic and diluted earnings per share during fiscal years 20182021 and 20172020 were $0.04 and $0.04, and $0.03 and $0.03, respectively. Unless extended or otherwise renegotiated, the Company's existing holidays will expire in various years through the end of fiscal year 2028.
The Company provides a valuation allowance against deferred tax assets that in the Company's estimation are not more likely than not to be realized. During fiscal year 2019, 20182022, 2021 and 2017,2020, the Company released valuation allowances totaling $2.8$26.3 million, $1.3$24.5 million and $39.6$1.1 million, respectively. For fiscal year 2019, this2022, $7.7 million valuation allowance release was mainly related to the Company'scertain operations in PolandCanada and Hungary, as this amount wasthese amounts were deemed to be more likely than not to be realized due to the sustained profitability during the past three fiscal years as well as continued forecasted profitability of that subsidiary.those operations. The remaining $18.6 million valuation allowance release relates to deferred tax assets in the United States deemed realizable due to purchase accounting related to the Anord Mardix acquisition. Various other valuation allowance positions were also reduced due to varying factors such as recognition of uncertain tax positions impacting deferred tax assets, one-time income recognition in loss entities, and foreign exchange impacts on deferred tax balances. Lastly, these valuation allowance reductions and eliminations were offset by current period valuation allowance additions due to increased deferred tax assets as a result of current period losses in legal entities with existing full valuation allowance positions. For fiscal years ended March 31, 2019, 20182022, 2021 and 2017,2020, the offsetting amounts totaled $194.8$38.7 million, ($65.9)$60.0 million and $103.9$90.2 million, respectively.
Under its territorial tax system, Singapore generally does not tax foreign sourced income until repatriated to Singapore. The Company has included the effects of Singapore's territorial tax system in the rate differential line above. The tax effect of foreign income not repatriated to Singapore for the fiscal years ended March 31, 2019, 20182022, 2021 and 20172020 were $7.5$104.5 million, $65.8$57.3 million and $67.9$27.9 million, respectively.

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The components of deferred income taxes are as follows:
As of March 31,
20222021
(In millions)
Deferred tax liabilities:
Fixed assets$(49)$(69)
Intangible assets(89)(45)
Others(14)(13)
Total deferred tax liabilities(152)(127)
Deferred tax assets:
Fixed assets72 66 
Intangible assets
Deferred compensation22 20 
Inventory valuation26 28 
Provision for doubtful accounts
Net operating loss and other carryforwards1,542 1,641 
Others201 190 
Total deferred tax assets1,874 1,958 
Valuation allowances(1,631)(1,726)
Total deferred tax assets, net of valuation allowances243 232 
Net deferred tax asset$91 $105 
The net deferred tax asset is classified as follows:
Long-term asset$177 $165 
Long-term liability(86)(60)
Total$91 $105 
 As of March 31,
 2019 2018
 (In thousands)
Deferred tax liabilities:   
Fixed assets$(39,376) $(33,056)
Intangible assets(57,939) (80,565)
Others(14,879) (12,544)
Total deferred tax liabilities(112,194) (126,165)
Deferred tax assets:   
Fixed assets67,980
 65,155
Intangible assets7,442
 11,237
Deferred compensation13,864
 13,475
Inventory valuation11,082
 6,952
Provision for doubtful accounts4,797
 3,073
Net operating loss and other carryforwards1,944,782
 2,133,097
Others243,016
 236,916
Total deferred tax assets2,292,963
 2,469,905
Valuation allowances(2,083,082) (2,259,956)
Total deferred tax assets, net of valuation allowances209,881
 209,949
Net deferred tax asset$97,687
 $83,784
The net deferred tax asset is classified as follows:   
Long-term asset$164,611
 $165,319
Long-term liability(66,924) (81,535)
Total$97,687
 $83,784


Utilization of the Company's deferred tax assets is limited by the future earnings of the Company in the tax jurisdictions in which such deferred assets arose. As a result, management is uncertain as to when or whether these operations will generate sufficient profit to realize any benefit from the deferred tax assets. The valuation allowance provides a reserve against deferred tax assets that are not more likely than not to be realized by the Company. However, management has determined that it is more likely than not that the Company will realize certain of these benefits and, accordingly, has recognized a deferred tax asset from these benefits. The change in valuation allowance is net of certain increases and decreases to prior year losses and other carryforwards that have no current impact on the tax provision.
The Company has recorded deferred tax assets of approximately $2.0$1.7 billion related to tax losses and other carryforwards against which the Company has recorded a valuation allowance for all but $54.7$84.2 million of the deferred tax assets. These tax losses and other carryforwards will expire at various dates as follows:
Expiration dates of deferred tax assets related to operating losses and other carryforwards
Fiscal year(In millions)
2023 - 2028$555 
2029 - 2034274 
2035 and post120 
Indefinite706 
$1,655 
Expiration dates of deferred tax assets related to operating losses and other carryforwards 
 (In thousands)
2020 - 2025$606,378
2026 - 2031444,040
2032 and post295,361
Indefinite691,313
 $2,037,092

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The amount of deferred tax assets considered realizable, however, could be reduced or increased in the near-term if facts, including the amount of taxable income or the mix of taxable income between subsidiaries, differ from management’s estimates.
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The Company does not provide for income taxes on approximately $1.6 billion of undistributed earnings of its subsidiaries which are considered to be indefinitely reinvested outside of Singapore as management has plans for the use of such earnings to fund certain activities outside of Singapore. The estimated amount of the unrecognized deferred tax liability on these undistributed earnings is approximately $150$147.5 million. As a result, as of March 31, 2019,2022, the Company has provided for earnings in foreign subsidiaries that are not considered to be indefinitely reinvested and therefore subject to withholding taxes on $32.8$10.0 million of undistributed foreign earnings, recording a deferred tax liability of approximately $2.0$0.5 million thereon.
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
Fiscal Year Ended
March 31,
20222021
(In millions)
Balance, beginning of fiscal year$266 $246 
Additions based on tax position related to the current year27 16 
Additions for tax positions of prior years15 14 
Reductions for tax positions of prior years(7)(8)
Reductions related to lapse of applicable statute of limitations(16)(16)
Impact from foreign exchange rates fluctuation(3)14 
Balance, end of fiscal year$282 $266 
 Fiscal Year Ended
March 31,
 2019 2018
 (In thousands)
Balance, beginning of fiscal year$227,590
 $203,323
Additions based on tax position related to the current year82,966
 24,415
Additions for tax positions of prior years5,575
 5,926
Reductions for tax positions of prior years(15,432) (11,936)
Reductions related to lapse of applicable statute of limitations(14,786) (9,029)
Settlements(22,174) 
Impact from foreign exchange rates fluctuation(12,017) 14,891
Balance, end of fiscal year$251,722
 $227,590


The Company’s unrecognized tax benefits are subject to change over the next twelve months primarily as a result of the expiration of certain statutes of limitations and as audits are settled. The Company believes it is reasonably possible that the total amount of unrecognized tax benefits could decrease by approximately $20an additional approximate $93.2 million within the next twelve months primarily due to potential settlements of various audits and the expiration of certain statutes of limitations.
The Company and its subsidiaries file federal, state, and local income tax returns in multiple jurisdictions around the world. With few exceptions, the Company is no longer subject to income tax examinations by tax authorities for years before 2008.
Of the $251.7$282.2 million of unrecognized tax benefits at March 31, 2019, $166.82022, $189.8 million will affect the annual effective tax rate (ETR) if the benefits are eventually recognized. The amount that doesn’t impact the ETR relates to positions that would be settled with a tax loss carryforward previously subject to a valuation allowance.
The Company recognizes interest and penalties accrued related to unrecognized tax benefits within the Company’s tax expense. During the fiscal years ended March 31, 2019, 20182022, 2021 and 2017,2020, the Company recognized interest and penaltypenalties of approximately ($2.9)$2.1 million, $2.1 million and ($3.3) million and ($1.6)0.9) million, respectively. The Company had approximately $13.3$16.4 million, $16.2$14.4 million and $12.9$12.3 million accrued for the payment of interest and penalties as of the fiscal years ended March 31, 2019, 20182022, 2021 and 2017,2020, respectively.
14.16. RESTRUCTURING CHARGES
Fiscal Year 20192022
The Company continues to identify certain structural changes to restructure the business throughout fiscal year 2022. During fiscal year 2019,2022, the Company took targeted actions to optimize its portfolio, most notably within CTG. The Company recognized approximately $15 million of restructuring charges, of approximately $113.3 million during the fiscal year ended March 31, 2019,most of which $73.2 million were non-cash charges primarily for asset impairments. A significant component of its charges were

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associated with the wind down of its NIKE operations in Mexico in the third quarter of fiscal year 2019 where it recognized charges of $66 million primarily for non-cash asset impairments.
In addition, the Company executed targeted head-count reductions at existing operating and design sites and corporate functions and exited certain immaterial businesses. Of these total restructuring charges, approximately $99.0 million was recognized as a component of cost of sales during the fiscal year ended March 31, 2019.
related to employee severance. Restructuring charges are not included in segment income, as disclosed further in note 19.21.
Fiscal Year 20182021
In order to support the Company’s strategy and build a sustainable organization, and after considering that the economic recovery from the pandemic would be slower than anticipated, the Company identified certain structural changes to restructure the business. These restructuring actions eliminated non-core activities primarily within the Company’s corporate function, aligned the Company’s cost structure with its reorganizing and optimizing of its operations model along its reporting segments, and further sharpened its focus to winning business in end markets where it has competitive advantages and deep domain expertise. During fiscal year 2018,2021, the Company initiated targeted restructuring activities focused on optimizing the Company's cost structure in lower growth areas and, more importantly, streamlining certain corporate and segment functions. Restructuring charges are recorded based upon employee termination dates, site closure and consolidation plans generally in conjunction with an overall corporate initiative to drive cost reduction and realign the Company's global footprint. The Company recognized approximately $78.6$101.3 million of cashrestructuring charges, predominantlymost of which related to employee severance costs and $12.1 million of non-cash charges for asset impairment and other exit charges under the above plan. Of these total charges, approximately $66.8 million was recognized in cost of sales. A majority of the fiscal year 2018 restructuring activities were completed as of March 31, 2018.
Fiscal Year 2017
During fiscal year 2017, the Company initiated a restructuring plan to accelerate its ability to support more Sketch-to-Scale® efforts across the Company and reposition away from historical legacy programs and structures through rationalizing its current footprint at existing sites and at corporate SG&A functions. The Company recognized restructuring charges of approximately $49.4 million primarily for employee termination costs under the above plan. Of these total charges, approximately $38.8 million was recognized in cost of sales. All fiscal year 2017 restructuring activities were completed as of March 31, 2017.
The following table summarizes the provisions, respective payments, and remaining accrued balance as of March 31, 2019 for charges incurred in fiscal years 2019, 2018 and 2017 and prior periods:

severance.
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Fiscal Year 2020
During the first half of fiscal year 2020 in connection with the geopolitical developments and uncertainties at the time, primarily impacting one customer in China, the Company experienced a reduction in demand for products assembled for that customer. As a result, the Company accelerated its strategic decision to reduce its exposure to certain high-volatility products in both China and India. The Company also initiated targeted activities to restructure its business to further reduce and streamline its cost structure. During fiscal year 2020, the Company recognized $216.4 million of restructuring charges. The Company incurred cash charges of approximately $159.3 million, that were predominantly for employee severance, in addition to non-cash charges of $57.1 million, respectively, primarily related to asset impairments.
SeveranceLong-Lived
Asset
Impairment
Other
Exit Costs
Total
(In millions)
Balance as of March 31, 2019$23 $— $$32 
Provision for charges incurred in fiscal year 2020123 46 47 216 
Cash payments for charges incurred in fiscal year 2019 and prior(15)— (3)(18)
Cash payments for charges incurred in fiscal year 2020(112)— (35)(147)
Non-cash charges incurred in fiscal year 2020— (46)(14)(60)
Balance as of March 31, 202019 — 23 
Provision for charges incurred in fiscal year 202189 101 
Cash payments for charges incurred in fiscal year 2020 and prior(14)— — (14)
Cash payments for charges incurred in fiscal year 2021(49)— (1)(50)
Non-cash charges incurred in fiscal year 2021— (8)(7)
Balance as of March 31, 202145 — 53 
Provision for charges incurred in fiscal year 202211 15 
Cash payments for charges incurred in fiscal year 2021 and prior(15)— — (15)
Cash payments for charges incurred in fiscal year 2022(6)— — (6)
Non-cash charges incurred in fiscal year 2022— (1)(3)(4)
Balance as of March 31, 202235 — 43 
Less: Current portion (classified as other current liabilities)34 — 42 
Accrued restructuring costs, net of current portion (classified as other liabilities)$$— $— $

 Severance Long-Lived
Asset
Impairment
 Other
Exit Costs
 Total
 (In thousands)
Balance as of March 31, 2016$11,905
 $
 $1,335
 $13,240
Provision for charges incurred in fiscal year 201742,253
 
 7,142
 49,395
Cash payments for charges incurred in fiscal year 2017(25,894) 
 
 (25,894)
Cash payments for charges incurred in fiscal year 2016 and prior(11,905) 
 (1,335) (13,240)
Balance as of March 31, 201716,359
 
 7,142
 23,501
Provision for charges incurred in fiscal year 201869,439

9,417

11,835

90,691
Cash payments for charges incurred in fiscal year 2017 and prior(13,237) 
 (3,671) (16,908)
Cash payments for charges incurred in fiscal year 2018(24,555) 
 
 (24,555)
Non-cash charges incurred in fiscal year 2018
 (9,417) (1,968) (11,385)
Balance as of March 31, 201848,006
 
 13,338
 61,344
Provision for charges incurred in fiscal year 201938,634
 46,365
 28,314
 113,313
Cash payments for charges incurred in fiscal year 2018 and prior(40,623) 
 (4,293) (44,916)
Cash payments for charges incurred in fiscal year 2019(22,783) 
 (1,330) (24,113)
Non-cash charges incurred in fiscal year 2019
 (46,365) (26,829) (73,194)
Balance as of March 31, 201923,234
 
 9,200
 32,434
Less: Current portion (classified as other current liabilities)23,234
 
 9,200
 32,434
Accrued restructuring costs, net of current portion (classified as other liabilities)$
 $
 $
 $

15.17. OTHER CHARGES (INCOME), NET
Other charges (income), net for the fiscal years ended March 31, 2019, 20182022, 2021 and 20172020 are primarily composedcomprised of the following:
Fiscal Year Ended March 31
202220212020
(In millions)
Gain on foreign exchange transactions$(32)$(21)$(10)
Equity in earnings (1)(61)(83)(5)
Impairments and (gain) loss on sale of investments (2)37 98 
Brazil tax credit (3)(150)— — 
 Fiscal Year Ended March 31
 2019 2018 2017
 (In thousands)
Gain on deconsolidation of subsidiary (1)$(87,348) $(151,574) $
(Gain) loss on sale of non-strategic business (2)
 (38,689) 7,400
Investment impairments and dispositions (3)193,063
 21,895
 

(1)During fiscal year ended March 31, 2019 the Company recognized other income of approximately $87 million from the deconsolidation of Bright Machines (formally known as AutoLab AI). The fiscal year ended March 31, 2018 includes a $151.6 million gain from the deconsolidation of Elementum. See note 2 for additional information on the deconsolidation of Bright Machines and Elementum.

(2)The Company recognized other income of $38.7 million from the sale of Wink during fiscal year 2018. See note 2 for additional information on the sale of Wink. Fiscal year 2017 includes a $7.4 million loss attributable to a non-strategic facility sold during the second quarter of that year.


(1)Represents gains on strategic investments in privately held companies accounted under equity method. During fiscal years 2022 and 2021, the Company recognized $61 million and $83 million of equity in earnings, respectively, driven by the value increase in certain investment funds primarily resulting from discrete market events such as initial public offerings of certain companies included in the funds. Out of the total gain on investments recorded in fiscal years 2022 and 2021, the Company realized approximately $17 million and $48 million of cash proceeds as it sold certain shares received as a distribution from one of its funds' investments.
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(3)During fiscal year ended March 31, 2019 the Company recognized investment impairments of $193.1 million, under other charges, which is primarily driven by an $84 million impairment in its investment in Elementum, coupled with a $76 million loss for the portion of its investment in an unrelated third-party venture backed company, also determined to be impaired. See note 2 for additional information on the impairments. The Company recognized $21.9 million of impairment during fiscal year 2018 for certain non-core investments.

(2)During fiscal years 2022, 2021 and 2020, and in connection with the Company’s ongoing assessment of recoverability of its investment portfolio, the Company concluded that the carrying amounts of certain non-core investments were other than temporarily impaired and recognized $3.0 million, $36.5 million and $97.7 million of total impairment charges, respectively (See note 2 for additional information).
(3)The Company recognized a $150.0 million gain related to a certain tax credit upon approval of a "Credit Habilitation" request by the relevant Brazil tax authorities for fiscal year 2022. Refer to note 14 for further information.
16.
18. INTEREST, AND OTHER, NET
Interest, and other, net for the fiscal years ended March 31, 2019, 20182022, 2021 and 20172020 are primarily composedcomprised of the following:
Fiscal Year Ended March 31
202220212020
(In millions)
Interest expenses on debt obligations (1)$153 $150 $146 
Interest income(14)(14)(19)
ABS and AR sales programs related expenses11 43 

(1)    Interest expense on debt obligations for fiscal year 2020 includes debt extinguishment costs of $7.2 million, related to the full repayments of the Notes due February 2020 and the Term Loan due November 2021. Debt extinguishment costs incurred during fiscal years 2022 and 2021 were immaterial.
 Fiscal Year Ended March 31
 2019 2018 2017
 (In thousands)
Interest expenses on debt obligations$145,658
 $123,098
 $107,978
ABS and AR sales programs related expenses46,344
 25,002
 15,252
Interest income(19,496) (18,840) (12,084)
Gain on foreign exchange transactions(1,175) (15,222) (16,528)


17.19. BUSINESS AND ASSET ACQUISITIONS & DIVESTITURES
Fiscal 20192022 Business acquisition
In October 2018,On December 1, 2021, the Company completed the business acquisition of Anord Mardix, a businessglobal leader in critical power solutions for an initial purchase consideration of $522.5 million, net of $25.1 million cash acquired, with an additional $16.5 million deferred purchase price paid out in the fourth quarter of fiscal year 2022, for a total purchase consideration of $539 million. The acquisition adds to the Company's portfolio of Power products and expands its offering in the data center market. For reporting purposes, Anord Mardix is included in the Industrial reporting unit within the FRS segment. The allocation of the purchase price to the tangible and identifiable intangible assets acquired and liabilities assumed was based on their estimated fair values as of the date of acquisition. The excess of the purchase price over the tangible and identifiable intangible assets acquired and liabilities assumed has been allocated to goodwill. The results of operations of the acquisition were included in the Company’s consolidated financial results beginning on the date of acquisition, and the total amount of net income and revenue were not material to the Company's consolidated financial results for fiscal year 2022.
The following represents the Company's allocation of the total purchase price to the acquired assets and liabilities of Anord Mardix (in millions):
Current assets$142 
Property and equipment13 
Operating lease right-of-use assets36 
Intangible assets273 
Goodwill272 
       Total assets$736 
Current liabilities$104 
Operating lease liabilities and other liabilities, non-current37 
Deferred tax liabilities, non-current56 
          Total aggregate purchase price, net of cash acquired$539 
The intangible assets of $273.0 million are comprised of customer related intangible assets of $147.0 million and licenses and other intangible assets such as trade names and developed technology of $126.0 million. Customer related assets are
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amortized over a weighted-average estimated useful life of 8.7 years while licensed and other intangibles are amortized over a weighted-average estimated useful life of 8.9 years.
Pro-forma results of operations have not been presented because the effects were not material to the Company’s consolidated financial results for all periods presented.
The Company is in the process of evaluating the fair value of the assets and liabilities related to this acquisition. Additional information, which existed as of the acquisition date, may become known to the Company during the remainder of the measurement period, a period not to exceed 12 months from the date of acquisition. Changes to amounts recorded as assets and liabilities may result in a corresponding adjustment to goodwill during the respective measurement period.
Fiscal 2020 Business acquisition and divestitures
During fiscal year 2020, the Company completed an acquisition that was not significant to the consolidated financial position, result of operations and cash flows of the Company. The acquired business expanded the Company's design capabilities in the telecom market within the CEC segment. The assets acquired and liabilities assumed were not material to the Company's consolidated financial results. Results of operations were included in the Company’s consolidated financial results beginning on the date of acquisition, and were not material to the Company’s consolidated financial results for all periods presented.
Fiscal 2019 Divestitures
During the third quarter ofFurther, during fiscal year 2019,2020, the Company disposed of an2 immaterial non-strategic business in Brazil that operated across all of its segments.businesses. The net lossgain on dispositiondispositions was not material to the Company'sCompany’s consolidated financial results, and was included in other charges, (income), net in the consolidated statement of operation for the fiscal year 2019.
During the second quarter of fiscal year 2019, the Company divested its China-based Multek operations, for proceeds of approximately $267.1 million, net of cash. The Company transferred approximately $231.4 million of net assets, primarily property and equipment, accounts receivable, and accounts payable. Further, the Company incurred various selling costs as part of this divestiture and allocated approximately $19.0 million of goodwill to the divested business. This transaction resulted in the recognition of an immaterial loss which is included in other charges (income), net in the consolidated statements of operations for the fiscal year 2019.2020.
Pro-forma results of operations for thesethe acquisition and divestitures have not been presented because the effects were not individually, nor in the aggregate, material to the Company's consolidated financial results for all periods presented.
Fiscal 2018 Business and asset acquisitions
During the fiscal year ended March 31, 2018, the Company completed two acquisitions that were not individually, nor in the aggregate, significant to the consolidated financial position, results of operation and cash flows of the Company.
In April 2017, the Company completed its acquisition of AGM, which expanded its capabilities in the automotive market, and is included within the HRS segment. The Company paid $213.7 million, net of cash acquired.

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Additionally, in September 2017, the Company acquired a power modules business, which expanded its capabilities within the CEC segment. The Company paid $54.7 million, net of cash acquired.
A summary of the allocation of the total purchase consideration is presented as follows (in thousands):
  Purchase Consideration Net Tangible Assets Acquired Purchased Intangible Assets Goodwill
AGM $213,718
 $56,438
 $82,000
 $75,280
Power Modules Business 54,659
 11,615
 33,300
 9,744
The intangibles of AGM comprised solely of customer relationships, will amortize over a weighted-average estimated useful life of 10 years. The intangibles of the power modules business, comprised of $16.0 million of customer relationships and $17.3 million of licenses and other intangibles, will amortize over a weighted-average estimated useful life of 10 years and 8 years, respectively.
The results of operations of the acquisitions were included in the Company’s consolidated financial results beginning on the respective acquisition dates, and the total amount of net income and revenue, collectively, were immaterial to the Company's consolidated financial results for the fiscal year ended March 31, 2018. Pro-forma results of operations for the acquisitions completed in fiscal year 2018 have not been presented because the effects, individually and in aggregate, were not material to the Company’s consolidated financial results for all periods presented.
Fiscal 2017 Business and asset acquisitions
During the fiscal year ended March 31, 2017, the Company completed four acquisitions that were not individually, nor in the aggregate, significant to the consolidated financial position, results of operations and cash flows of the Company. Most notable is the Company’s acquisition of two manufacturing and development facilities from Bose Corporation (“Bose”), a global leader in audio systems. The acquisition expanded the Company’s capabilities in the audio market and is included in the CTG segment. The other acquired businesses strengthen the Company's capabilities in the communications market and energy market within the CEC and IEI segments, respectively. At the acquisition dates, the Company paid a total of $189.1 million, net of cash acquired, of which $161.7 million, net of $18.0 million of cash acquired is related to the Bose acquisition which is included in cash from investing activities in the consolidated statements of cash flows. The Company acquired primarily $73.1 million of inventory, $60.8 million of property and equipment, and recorded goodwill of $63.8 million and intangible assets of $47.4 million principally related to the Bose acquisition. The intangibles will amortize over a weighted-average estimated useful life of 6.5 years. In connection with these acquisitions, the Company assumed $63.3 million in other liabilities including additional consideration of $28.0 million which was paid in the fourth quarter of fiscal year 2017 and included in other financing activities in the consolidated statements of cash flows. Further, the equity incentive plan of one of the acquirees was assumed as part of the acquisition.
The results of operations for each of the acquisitions completed in fiscal year 2017, including the Bose acquisition, were included in the Company’s consolidated financial results beginning on the date of each acquisition, and the total amount of net income and revenue of the acquisitions, collectively, were immaterial to the Company's consolidated financial results for the fiscal year ended March 31, 2017. Pro-forma results of operations for the acquisitions completed in fiscal year 2017 were not presented because the effects, individually and in the aggregate, were not material to the Company’s consolidated financial results for all periods presented.
Fiscal 2017 Divestitures
During the fiscal year ended March 31, 2017, the Company disposed of two non-strategic businesses within the HRS and IEI segments. The Company received $30.7 million of proceeds, net of an immaterial amount of cash held in one of the divested businesses. The property and equipment and various other assets sold, and liabilities transferred were not material to the Company's consolidated financial results. The loss on disposition was not material to the Company’s consolidated financial results, and was included in other charges, net in the consolidated statements of operations for the fiscal year 2017.
18.20. SHARE REPURCHASE PLAN

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During fiscal year 2019,2022, the Company repurchased approximately 17.738.2 million shares for an aggregate purchase valueprice of approximately $189.0$685.6 million and retired all of these shares.
Under the Company’s current share repurchase program, the Board of Directors authorized repurchases of its outstanding ordinary shares for up to $500 million$1.0 billion in accordance with the share repurchase mandate approved by the Company’s shareholders at the date of the most recent Annual General Meeting held on August 16, 2018.4, 2021. As of March 31, 2019,2022, shares in the aggregate amount of $324.5$495.6 million were available to be repurchased under the current plan.
19.21. SEGMENT REPORTING
Operating segments are defined as components of an enterprise for which separate financial information is available that is evaluated regularly by the Chief Operating Decision Maker ("CODM"), or a decision making group, in deciding how to allocate resources and in assessing performance. Resource allocation decisions and theThe Company's performance are assessed by its Chief Executive Officer ("CEO"), with support from certain direct staffis our CODM who oversee operationsevaluates how we allocate resources, assesses performance and make strategic and operational decisions. Based on such evaluation, the Company determined as of and for the business, collectively identified asperiod ended March 31, 2022, that Flex has 3 operating and reportable segments. See note 1 and note 7 for further details on the CODM or the decision making group.
Duringsegment change that took place in the fourth quarter of fiscal year 2019, the Company announced that Revathi Advaithi was appointed CEO2022.
The FAS segment is optimized for speed to market based on a highly flexible supply and manufacturing system. FAS is comprised of the Company effective February 11, 2019. As part of her new rolefollowing end markets that represent reporting units:
Communications, Enterprise and responsibilities, the CEO alongCloud, including data infrastructure, edge infrastructure and communications infrastructure;
Lifestyle, including appliances, consumer packaging, floorcare, micro mobility and audio; and
Consumer Devices, including mobile and high velocity consumer devices.
The FRS segment is optimized for longer product lifecycles requiring complex ramps with certain direct report that oversee operationsspecialized production models and critical environments. FRS is comprised of the business, are now considered the CODM. There is a possibilityfollowing end markets that the CODM will request some changes in the information that it regularly reviews in determining how to allocate resourcesrepresent reporting units:
Automotive, including next generation mobility, autonomous, connectivity, electrification, and in assessing performance, which could eventually result in changes to the Company's reportable segments.smart technologies;
Health Solutions, including medical devices, medical equipment, and drug delivery; and
Industrial, including capital equipment, industrial devices, and renewables and grid edge.
The Company has four reportable segments: HRS, IEI, CECNextracker segment provides solar tracker technologies that optimize and CTG. These segments represent componentsincrease energy production while reducing costs for significant plant return on investment.
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Nextracker, the leading provider of intelligent, integrated solar tracker and software solutions used in utility-scale and ground-mounted distributed generation solar projects around the world. Nextracker's products enable solar panels to follow the sun’s movement across the sky and optimize plant performance.
The determination of the Company for which separate financial informationoperating and reporting segments is available that is utilized on a regular basis by the CODM. These segments are determined based on several factors, including the nature of products and services, the nature of production processes, customer base, delivery channels and similar economic characteristics. Refer to note 1 for a description of the various product categories manufactured under each of these segments.
An operating segment's performance is evaluated based on its pre-tax operating contribution, or segment income. Segment income is defined as net sales less cost of sales, and segment selling, general and administrative expenses, and does not include amortization of intangibles, stock-based compensation, customer related assetsasset impairments (recoveries), restructuring charges, legal and other. A portion of depreciation is allocated to the new revenue standard adoption impact, contingenciesrespective segments, together with other general corporate research and other, interestdevelopment and other, net and other charges (income), net.administrative expenses.
Selected financial information by segment is in the table below. ForFiscal year 2021 and 2020 historical information has been recast to reflect the new operating and reportable segments, in the table below and in Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations."
Fiscal Year Ended March 31,
202220212020
(In millions)
Net sales:
Flex Agility Solutions$14,027 $13,493 $14,053 
Flex Reliability Solutions10,603 9,495 9,053 
Nextracker1,458 1,195 1,171 
Intersegment eliminations(47)(59)(67)
$26,041 $24,124 $24,210 
Segment income and reconciliation of operating income:
Flex Agility Solutions$605 $449 $369 
Flex Reliability Solutions546 484 474 
Nextracker90 178 168 
Corporate and Other(72)(80)(113)
Total segment income1,169 1,031 898 
Reconciling items:
Intangible amortization68 62 64 
Stock-based compensation91 79 71 
Customer related asset impairments (recoveries) (1)— (7)106 
Restructuring charges (Note 16)15 101 216 
Legal and other (2)23 26 
Operating income$972 $795 $415 

(1)Customer related asset impairments (recoveries) for fiscal years 2022 and 2021 were not material.

Customer related asset impairments for fiscal year 2019,2020 primarily relate to non-cash impairments of certain property and equipment for customers from whom we have disengaged or were in the process of disengaging, additional provision for doubtful accounts receivable, charges for other asset impairments, and reserves for excess and obsolete inventory for certain customers experiencing financial difficulties and/or related to inventory that will not be recovered due to significant reductions in future customer demand.

(2)Legal and other consists of costs not directly related to core business results and may include matters relating to commercial disputes, government regulatory and compliance, intellectual property, antitrust, tax, employment or shareholder issues, product liability claims and other issues on a global basis as well as acquisition related costs and customer related asset recoveries. During the fourth quarter of fiscal year 2022, the Company recognized the cumulative effectaccrued for certain loss contingencies where losses are considered probable and estimable offset by a gain upon successful settlement of initially applying the new revenue standard as an adjustment to the opening balance of retained earnings, as further described in note 2 to the consolidated financial statements. The comparative information for the fiscal years 2018 and 2017 has not been restated and continues to be reported under the accounting standards in effect at the time:certain supplier claims.


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 Fiscal Year Ended March 31,
 2019 2018 2017
 (In thousands)
Net sales:     
High Reliability Solutions$4,828,950
 $4,769,464
 $4,149,438
Industrial & Emerging Industries6,182,637
 5,972,496
 4,967,738
Communications & Enterprise Compute8,336,330
 7,729,350
 8,383,420
Consumer Technologies Group6,862,594
 6,969,821
 6,362,338
 $26,210,511
 $25,441,131
 $23,862,934
Segment income and reconciliation of income before tax:     
High Reliability Solutions$371,003
 $380,878
 $334,108
Industrial & Emerging Industries269,172
 235,422
 179,749
Communications & Enterprise Compute214,723
 186,335
 229,332
Consumer Technologies Group121,336
 111,629
 179,910
Corporate and Other(104,471) (127,810) (107,850)
Total income871,763
 786,454
 815,249
Reconciling items:     
Intangible amortization74,396
 78,640
 81,396
Stock-based compensation76,032
 85,244
 82,266
Customer related asset impairments (1)87,093
 6,251
 92,915
Restructuring charges (Note 14)113,313
 90,691
 49,395
New revenue standard adoption impact (Note 2 & Note 3)9,291
 
 
Contingencies and other (2)35,644
 51,631
 17,704
Interest and other, net183,454
 122,823
 99,532
Other charges (income), net (Note 15)110,414
 (169,719) 21,193
Income before income taxes$182,126
 $520,893
 $370,848

(1)Customer related asset impairments for fiscal year 2019, relate to provision for doubtful accounts receivable, inventory and impairment of other assets for certain customers experiencing significant financial difficulties and/or the Company is disengaging.

DuringLegal and other during fiscal year 2017, prices2021 primarily consists of costs accrued for solar panel modules declined significantly. The Company determined that certain solar panel inventoryloss contingencies where losses are considered probable and estimable, offset by a gain on hand at the endsale of real estate in the fourth quarter of fiscal year 2021 exited as a result of the fiscal year 2017 was not fully recoverable and recordeddisengagement of a charge of $60 million to reduce the carrying costs to marketcertain customer in fiscal year 2017. The Company also recognized a $16 million impairment charge for solar module equipment2020.

Legal and $17 million primarily related to negative margin sales and other associated direct costs. The total charge of $93 million is included in cost of sales for fiscal year 2017 but is excluded from segment results above.

(2)Contingencies and other during fiscal year 2019, primarily consists of costs incurred relating to the independent investigation undertaken by the Audit Committee of the Company’s Board of Directors which was completed in June 2018. In addition, Contingencies and other also includes certain charges of the China based Multek operations that was divested in the second quarter of fiscal year 2019.

During fiscal year 2018, the Company incurred charges in connection with certain legal matters, for loss contingencies where it believed that losses were probable and estimable. Additionally, the Company incurred various other charges predominately related to damages incurred from a typhoon that impacted a China facility, as well as certain assets impairments during fiscal year 2018.2020 primarily consists of direct and incremental costs associated with certain wind-down activities related to the disengagement of a certain customer primarily in China and India, offset by certain gains resulting from the recognition of prior year expenses paid to a government now considered probable of recovery and reasonably estimable due to a favorable tax ruling.
Corporate and other primarily includes corporate services costs that are not included in the CODM's assessment of the performance of each of the identified reporting segments.
The Company provides an overall platform of assets and services, which the segments utilize for the benefit of their various customers. The shared assets and services are contained within the Company's global manufacturing and design

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operations and include manufacturing and design facilities. Most of the underlying manufacturing and design assets are co-mingled in the operating campuses and are compatible to operate across segments and highly interchangeable throughout the platform. Given the highly interchangeable nature of the assets, they are not separately identified by segmentssegment nor reported by segment to the Company's CODM.
Property and equipment on a segment basis is not disclosed as it is not separately identified and is not internally reported by segment to the Company's CODM as described above. During fiscal year 2019, 2018years 2022, 2021 and 2017,2020, depreciation expense included in the segments' measure of operating performance above is as follows. Historical information has been recast to reflect realignment of customers and/or products between segments:
Fiscal Year Ended March 31,
202220212020
(In millions)
Depreciation expense:
Flex Agility Solutions$184 $185 $218 
Flex Reliability Solutions204 210 170 
Nextracker
Corporate and Other18 25 31 
Total depreciation expense$409 $422 $422 
 Fiscal Year Ended March 31,
 2019 2018 2017
 (In thousands)
Depreciation expense     
High Reliability Solutions$96,854
 $97,114
 $88,604
Industrial & Emerging Industries92,606
 75,366
 70,814
Communication & Enterprise Compute103,162
 118,150
 133,057
Consumer Technologies Group104,298
 110,276
 110,379
Corporate and Other36,493
 33,526
 29,384
Total depreciation expense$433,413
 $434,432
 $432,238


Geographic information of net sales is as follows:
Fiscal Year Ended March 31,
202220212020
(In millions)
Net sales by region:
Americas$10,839 42 %$9,672 40 %$10,066 42 %
Asia9,601 37 %9,326 39 %9,362 39 %
Europe5,601 21 %5,126 21 %4,782 19 %
$26,041 $24,124 $24,210 
 Fiscal Year Ended March 31,
 2019 2018 2017
 (In thousands)
Net sales:           
Asia$11,469,617
 44% $11,210,793
 44% $10,962,075
 46%
Americas9,893,072
 38% 9,880,626
 39% 8,582,849
 36%
Europe4,847,822
 18% 4,349,712
 17% 4,318,010
 18%
 $26,210,511
   $25,441,131
   $23,862,934
  


Revenues are attributable to the country in which the product is manufactured, or service is provided.
During fiscal years 2019, 20182022, 2021 and 2017,2020, net sales generated from Singapore, the principal country of domicile, were approximately $642.7$518.9 million, $686.9$507.0 million and $595.3$574.6 million, respectively.
The following table summarizedsummarizes the countries that accounted for more than 10% of net sales in fiscal year 2019, 2018,years 2022, 2021, and 2017.

2020:
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 Fiscal Year Ended March 31,
202220212020
 (In millions)
Net sales by country:
China$6,146 24 %$6,147 25 %$5,665 23 %
Mexico5,059 19 %4,413 18 %4,449 18 %
U.S.3,690 14 %3,648 15 %3,719 15 %
 Fiscal Year Ended March 31,
Net sales:2019 2018 2017
 (In thousands)
China$6,648,549
 25% $7,449,591
 29% $7,213,614
 30%
Mexico4,538,720
 17% 4,361,814
 17% 4,075,616
 17%
U.S.3,106,222
 12% 2,860,242
 11% 2,560,300
 11%
Brazil2,181,025
 8% 2,578,466
 10% 1,907,591
 8%
Malaysia1,996,152
 8% 2,005,119
 8% 2,267,478
 10%


No other country accounted for more than 10% of net sales for the fiscal periods presented in the table above.
Geographic information of property and equipment, net is as follows:
As of March 31,
20222021
(In millions)
Property and equipment, net:
Americas$1,075 51 %$1,015 48 %
Asia561 26 %627 30 %
Europe489 23 %455 22 %
$2,125 $2,097 
 As of March 31,
 2019 2018
 (In thousands)
Property and equipment, net:       
Asia$903,288
 39% $747,314
 33%
Americas1,003,708
 43% 1,012,188
 45%
Europe429,217
 18% 480,004
 22%
 $2,336,213
   $2,239,506
  


As of March 31, 20192022 and 2018,2021, property and equipment, net held in Singapore were approximately $12.3$5.0 million and $12.6$5.9 million, respectively.
The following table summarizedsummarizes the countries that accounted for more than 10% of property and equipment, net in fiscal year 20192022 and 2018.2021:
Fiscal Year Ended March 31,
20222021
(In millions)
Property and equipment, net:
Mexico$626 29 %$553 26 %
U.S.354 17 %361 17 %
China299 14 %331 16 %
 Fiscal Year Ended March 31,
Property and equipment, net:2019 2018
 (In thousands)
Mexico$537,396
 23% $586,594
 26%
China523,124
 22% 491,664
 22%
U.S.361,098
 15% 305,222
 14%


No other country accounted for more than 10% of property and equipment, net for the fiscal periods presented in the table above.
20.22. QUARTERLY FINANCIAL DATA (UNAUDITED)
The Company's third fiscal quarter ends on December 31, and the fourth fiscal quarter and fiscal year endsend on March 31 of each year. The firstyear, which is comprised of 90 days for fiscal quarters of 2019years 2022 and 2018 ended on June 29, 2018 and June 30, 2017, respectively, and the second fiscal quarters of 2019 and 2018, ended on September 28, 2018 and September 29, 2017,2021, respectively.
The following table contains the unaudited quarterlyfourth quarter financial data for fiscal years 20192022 and 2018. For fiscal year 2019, the Company recognized the cumulative effect of initially applying the new revenue standard as an adjustment to the opening balance of retained earnings, as further described in note 2 to the consolidated financial statements. The comparative

2021.
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information for the fiscal year 2018 has not been restated and continues to be reported under the accounting standards in effect at the time.
Three Months Ended
March 31, 2022March 31, 2021
(In millions, except per share amounts)
Net sales$6,851 $6,266 
Gross profit505 509 
Operating income228 282 
Net income172 240 
Net income attributable to Flex Ltd.168 240 
Earnings per share attributable to the shareholders of Flex Ltd.
Basic$0.36 $0.48 
Diluted$0.36 $0.47 
98
 Fiscal Year Ended March 31, 2019 Fiscal Year Ended March 31, 2018
 First Second Third Fourth First Second Third Fourth
                
Net sales (1)$6,398,956
 $6,662,604
 $6,922,827
 $6,226,124
 $6,008,272
 $6,270,420
 $6,751,552
 $6,410,887
Gross profit (2)377,854
 402,301
 357,325
 380,295
 406,932
 393,325
 446,328
 349,297
Net income (loss) (3)116,035
 86,885
 (45,169) (64,352) 124,710
 205,086
 118,333
 (19,595)
Earnings (losses) per share (4):               
Net income:               
Basic$0.22
 $0.16
 $(0.09) $(0.12) $0.24
 $0.39
 $0.22
 $(0.04)
Diluted$0.22
 $0.16
 $(0.09) $(0.12) $0.23
 $0.38
 $0.22
 $(0.04)



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(1)The Company has made certain immaterial corrections to net sales previously reported for the first three quarters of fiscal 2019 primarily to reflect revenue from certain contracts with customers on a net basis. As a result, the amounts presented above for net sales are $25 million, $48 million and $22 million lower than those previously reported for the first, second and third quarters of fiscal year 2019, respectively. These corrections had no impact on gross profit or net income for any period presented, as they were fully offset by corrections to cost of sales. The Company evaluated these corrections, considering both qualitative and quantitative factors, and concluded they are immaterial to previously issued financial statements and will make corrections prospectively in subsequent quarterly filings.

(2)The Company recorded a total of $65.8 million restructuring charges during the third quarter of fiscal year 2019. The Company classified $60.4 million of these charges as a component of cost of sales and approximately $5.4 million as a component of selling, general and administrative expenses. Refer to note 14 for additional information on these charges. The Company recorded $82.7 million restructuring charges during the fourth quarter of fiscal year 2018. The Company classified approximately $58.9 million of these charges as a component of cost of sales and approximately $23.8 million of these charges as a component of selling, general and administrative expenses.

(3)Net income for the fourth quarter of fiscal year 2019 was primarily affected by an $84 million charge for the impairment of the Company's investment in Elementum. Net income for the third quarter of fiscal year 2019 was primarily affected by a $70 million charge for the impairment of the Company's investment in an unrelated third-party company. Net income for the first quarter of fiscal year 2019 was affected by a $91.8 million gain on the deconsolidation of Bright Machines. Refer to note 2 for further details on the investments impairment charges and the gain on deconsolidation. Net income for the first quarter of fiscal year 2018 was affected by a $38.7 million gain recognized for the disposition of Wink. Net income for the second quarter of fiscal year 2018 was affected by $151.6 million non-cash gain as a result of the deconsolidation of the Company's investment in Elementum.

(4)Earnings per share are computed independently for each quarter presented and basic shares are used in the quarters with losses; therefore, the sum of the quarterly earnings per share may not equal the total earnings per share amounts for the fiscal year.

ITEM 9.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
Not applicable.
ITEM 9A.    CONTROLS AND PROCEDURES
(a)Evaluation of Disclosure Controls and Procedures
(a)Evaluation of Disclosure Controls and Procedures
The Company's management, with the participation of the Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company's disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act)Act of 1934, as amended (the “Exchange Act”)) as of March 31, 2019.2022. Based on that evaluation, the Company's Chief Executive Officer and Chief Financial Officer concluded that, as of March 31, 2019,2022, the Company's disclosure controls and procedures were effective in ensuring that information required to be disclosed by the Company in reports that it files or submits under the Securities Exchange Act, of

1934, as amended, is (i) recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission'sSEC's rules and forms and (ii) accumulated and communicated to our management, including our principal executiveChief Executive officer and principal financial officer,Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Management’s evaluation excluded an assessment of those disclosure controls and procedures of Anord Mardix that are subsumed by internal control over financial reporting, described under paragraph (b) below.
(b)Management's Annual Report on Internal Control over Financial Reporting
(b)Management's Annual Report on Internal Control over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a- 15(f)13a-15(f) under the Securities Exchange Act of 1934, as amended.Act. Internal control over financial reporting consists of policies and procedures that: (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) are designed and operated to provide reasonable assurance regarding the reliability of the Company's financial reporting and the Company's process for the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, a system of internal control over financial reporting can provide only reasonable assurance and may not prevent or detect misstatements or prevent or detect instances of fraud. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls may be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
On December 1, 2021, the Company acquired Anord Mardix. Management's annual assessment of the effectiveness of internal control over financial reporting as of March 31, 2022 excluded the internal control over financial reporting at Anord Mardix, which constitutes, in the aggregate, less than 1% of the total assets and net sales of the related consolidated financial statement amounts as of, and for the fiscal year ended March 31, 2022.
As of March 31, 2019,2022, under the supervision and with the participation of management, including the Company's Chief Executive Officer and Chief Financial Officer, an evaluation was conducted of the effectiveness of the Company's internal control over financial reporting based on the framework in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO"). Based on that evaluation, management concluded that the Company's internal control over financial reporting was effective as of March 31, 2019.2022.
(c)Attestation Report of the Registered Public Accounting Firm
(c)Attestation Report of the Registered Public Accounting Firm
The effectiveness of the Company's internal control over financial reporting as of March 31, 20192022 has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report which appears in this Item under the heading "Report of Independent Registered Public Accounting Firm."
(d)Changes in Internal Control Over Financial Reporting
Throughout fiscal year 2019, we implemented enhanced and additional procedures to remediate the control deficiencies that aggregated to material weaknesses in our internal control over financial reporting relating to the accounting for customer contractual obligations and aspects of our control environment and monitoring activities as disclosed in Item 9A on Form 10-K for the fiscal year ended March 31, 2018.
Management, with the oversight of the Audit Committee, took the following steps as part of our remediation efforts during fiscal 2019:
Designed and implemented additional site level controls related to accounting for customer contractual obligations including establishing criteria for effective contract reviews and approvals with enhanced documentation to evidence judgements and estimates.

Designed and implemented a centralized Contract Management Office responsible for the determination of the appropriate accounting on material contracts including maintaining proper evidence of review.

Designed and implemented centralized oversight controls that provide enhanced visibility to the accounting for customer contracts to ensure improved monitoring and detection of material errors related to certain decentralized activities.

Enhanced the quality and the frequency of training across all levels to improve awareness of Company policies and knowledge of the expected standards of conduct.
Given the remediation efforts noted above, testing of applicable controls completed during the fourth quarter and the determination that controls are designed and operating effectively, management has concluded that the material weaknesses previously identified have been remediated as of March 31, 2019.

Other than the changes described above there have not been anyThere were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) underthat occurred during the Exchange Act) as offourth quarter ended March 31, 20192022 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

We have not experienced any material impact to our internal control over financial reporting despite the fact that most of our employees are working remotely for their health and safety during the COVID-19 pandemic. We are continually monitoring
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and assessing the potential impact of COVID-19 on our internal controls to minimize the impact on their design and operating effectiveness.
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


To the Board of Directors and the Shareholders of Flex Ltd., Singapore


Opinion on Internal Control over Financial Reporting
We have audited the internal control over financial reporting of Flex Ltd. and subsidiaries (the "Company") as of March 31, 2019,2022, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission(COSO)Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of March 31, 2019,2022, based on the criteria established in Internal Control - Integrated Framework (2013) issued by COSO.
As indicated in the accompanying Management’s Report on Internal Control Over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls at Anord Mardix (as defined in Note 19), which is included in the 2022 consolidated financial statements of the Company and constituted less than 1% of total assets as of March 31, 2022 and less than 1% of net sales for the year then ended. Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting at Anord Mardix.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended March 31, 20192022 of the Company and our report dated May 20, 2019,2022, expressed an unqualified opinion on those financial statements and included an explanatory paragraph related to the Company’s change in method of accounting for revenue from contracts with customers in fiscal year 2019 due to the adoption of Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers and the Company’s change in method of accounting for cash receipts on the deferred purchase price from asset-backed securitization programs in fiscal year 2019 due to the adoption of ASU 2016-15 Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments.statements.
Basis for Opinion
The Company'sCompany’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company'sCompany’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company'scompany’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company'scompany’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Companycompany are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company'scompany’s assets that could have a material effect on the financial statements.
Because of theits inherent limitations, internal control over financial reporting, may not prevent or detect misstatements. Also, projections of any evaluation of the effectiveness to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.


/s/ DELOITTE & TOUCHE LLP
San Jose, California
May 20, 20192022

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Table of Contents
ITEM 9B.    OTHER INFORMATION
Not applicable.
ITEM 9C.    DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
PART III
ITEM 10.    DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Information with respect to this item may be found in the Company's definitive proxy statement to be delivered to shareholders in connection with the Company's 20192022 Annual General Meeting of Shareholders. Such information is incorporated by reference.
ITEM 11.    EXECUTIVE COMPENSATION
Information with respect to this item may be found in the Company's definitive proxy statement to be delivered to shareholders in connection with the Company's 20192022 Annual General Meeting of Shareholders. Such information is incorporated by reference.
ITEM 12.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS
Information with respect to this item may be found in the Company's definitive proxy statement to be delivered to shareholders in connection with the Company's 20192022 Annual General Meeting of Shareholders. Such information is incorporated by reference.
ITEM 13.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Information with respect to this item may be found in the Company's definitive proxy statement to be delivered to shareholders in connection with the Company's 20192022 Annual General Meeting of Shareholders. Such information is incorporated by reference.
ITEM 14.    PRINCIPAL ACCOUNTANT FEES AND SERVICES (Deloitte & Touche LLP, PCAOB ID: 34)
Information with respect to this item may be found in the Company's definitive proxy statement to be delivered to shareholders in connection with the Company's 20192022 Annual General Meeting of Shareholders. Such information is incorporated by reference.

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Table of Contents
PART IV
ITEM 15.    EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a)Documents filed as part of this annual report on Form 10-K:
(a)Documents filed as part of this annual report on Form 10-K:
1.    Financial Statements.    See Item 8, "Financial Statements and Supplementary Data."
2.
Financial Statement Schedules.   "Schedule II—Valuation and Qualifying Accounts" is included in the financial statements, see Concentration of Credit Risk in Note 2, "Summary of Accounting Policies" of the Notes to Consolidated Financial Statements in Item 8, "Financial Statements and Supplementary Data."
2.    Financial Statement Schedules.   "Schedule II—Valuation and Qualifying Accounts" is included in the financial statements, see Concentration of Credit Risk in Note 2, "Summary of Accounting Policies" of the Notes to Consolidated Financial Statements in Item 8, "Financial Statements and Supplementary Data."
3.    Exhibits.    Reference is made to Item 15(b) below.
(b)
Exhibits.    The Exhibit Index, which immediately precedes the signature page to this annual report on Form 10-K, is incorporated by reference into this annual report on Form 10-K.
(b)    Exhibits.    The Exhibit Index, which immediately precedes the signature page to this annual report on Form 10-K, is incorporated by reference into this annual report on Form 10-K.
(c)    Financial Statement Schedules.    Reference is made to Item 15(a)(2) above.

(c)
Financial Statement Schedules.    Reference is made to Item 15(a)(2) above.

ITEM 16.    FORM 10-K SUMMARY
None
EXHIBIT INDEX
Incorporated by Reference
Exhibit No.ExhibitFormFile No.Filing DateExhibit No.Filed Herewith
Constitution of the Registrant (incorporating all amendments as at August 20, 2019)10-Q000-2335410/30/20193.01
Indenture, dated as of February 20, 2013, by and between the Registrant, the Guarantors party thereto and U.S. Bank National Association, as Trustee, related to the Registrant's 5.000% Notes due 20238-K000-233542/22/20134.1
Form of 5.000% Note due 2023 (included in Exhibit 4.01)8-K000-233542/22/20134.1
First Supplemental Indenture, dated as of March 28, 2013, among the Registrant, the Guarantor party thereto and U.S. Bank National Association, as Trustee, to the Indenture, dated as of February 20, 2013, by and between the Registrant, the Guarantors party thereto and U.S. Bank National Association, as Trustee, related to the Registrant's 5.000% Notes due 202310-K000-233545/28/20134.11
Second Supplemental Indenture, dated as of August 25, 2014, among the Registrant, the Guarantor party thereto and U.S. Bank National Association, as Trustee, to the Indenture, dated as of February 20, 2013, by and between the Registrant, the Guarantors party thereto and U.S. Bank National Association, as Trustee, related to the Registrant's 5.000% Notes due 202310-Q000-2335410/30/20144.01
Third Supplemental Indenture, dated as of September 11, 2015, among the Registrant, the Guarantor party thereto and U.S. Bank National Association, as Trustee, related to the Registrant’s 5.000% Notes due 2023S-4333-2070679/22/20154.11
Indenture, dated as of June 8, 2015, by and between the Registrant, the Guarantors party thereto and U.S. Bank National Association, as Trustee8-K000-233546/8/20154.1
103

      Incorporated by Reference    
Exhibit No. Exhibit Form File No. Filing Date Exhibit No. Filed Herewith
 Constitution of the Registrant 10-Q 000-23354 10/31/2016 3.01  
 Indenture, dated as of February 20, 2013, by and between the Registrant, the Guarantors party thereto and U.S. Bank National Association, as Trustee, related to the Registrant's 4.625% Notes due 2020 and 5.000% Notes due 2023 8-K 000-23354 2/22/2013 4.1  
 Form of 4.625% Note due 2020 8-K 000-23354 2/22/2013 4.1  
 Form of 5.000% Note due 2023 8-K 000-23354 2/22/2013 4.1  
 First Supplemental Indenture, dated as of March 28, 2013, among the Registrant, the Guarantor party thereto and U.S. Bank National Association, as Trustee, to the Indenture, dated as of February 20, 2013, by and between the Registrant, the Guarantors party thereto and U.S. Bank National Association, as Trustee, related to the Registrant's 4.625% Notes due 2020 and 5.000% Notes due 2023 10-K 000-23354 5/28/2013 4.11  
 Second Supplemental Indenture, dated as of August 25, 2014, among the Registrant, the Guarantor party thereto and U.S. Bank National Association, as Trustee, to the Indenture, dated as of February 20, 2013, by and between the Registrant, the Guarantors party thereto and U.S. Bank National Association, as Trustee, related to the Registrant's 4.625% Notes due 2020 and 5.000% Notes due 2023 10-Q 000-23354 10/30/2014 4.01  

Incorporated by Reference
Exhibit No.ExhibitFormFile No.Filing DateExhibit No.Filed Herewith
Form of 4.750% Note due 2025 (included in Exhibit 4.06)8-K000-233546/8/20154.1
First Supplemental Indenture, dated as of September 11, 2015, among the Registrant, the Guarantor party thereto and U.S. Bank National Association, as Trustee, related to the Registrant’s 4.750% Notes due 2025S-4333-2070679/22/20154.04
Indenture, dated as of June 6, 2019, by and between the Company and U.S. Bank National Association, as trustee8-K000-233546/6/20194.1
First Supplemental Indenture, dated as of June 6, 2019, by and between the Company and U.S. Bank National Association, as trustee8-K000-233546/6/20194.2
Form of 4.875% Global Note due 2029 (included in Exhibit 4.10)8-K000-233546/6/20194.3
Second Supplemental Indenture, dated as of November 7, 2019, by and between the Company and U.S. Bank National Association, as trustee8-K000-2335411/7/20194.3
Form of 4.875% Global Note due 2029 (included in Exhibit 4.12)8-K000-2335411/7/20194.4
Third Supplemental Indenture dated as of May 12, 2020, by and between the Company and U.S. Bank National Association, as trustee8-K000-233545/12/20204.2
Form of 3.750% Global Note due 2026 (included in Exhibit 4.14)8-K000-233545/12/20204.3
Form of 4.875% Global Note due 2030 (included in Exhibit 4.14)8-K000-233545/12/20204.4
Fourth Supplemental Indenture, dated as of August 17, 2020, by and between the Company and U.S. Bank National Association, as trustee8-K000-233548/17/20204.3
Form of 3.750% Global Note due 2026 (included in Exhibit 4.17)8-K000-233548/17/20204.4
Form of 4.875% Global Note due 2030 (included in Exhibit 4.17)8-K000-233548/17/20204.5
Description of Registrant's Securities10-K000-233545/28/20204.14
Credit Agreement, dated as of January 7, 2021, among Flex Ltd. and certain of its subsidiaries, from time to time party thereto, as borrowers, Bank of America, N.A., as Administrative Agent, an L/C Issuer and a Swing Line Lender, and the other L/C Issuers, Swing Line Lenders and Lenders party thereto8-K000-233541/13/202110.01
First Amendment to Credit Agreement, dated as of April 12, 2022 among Flex Ltd., the Lenders party thereto, the L/C Issuers party thereto, the Swing Line Lenders party thereto, and Bank of America, N.A., as the Administrative AgentX
Form of Indemnification Agreement between the Registrant and its Directors and certain officers†10-K000-233545/20/200910.01
Form of Indemnification Agreement between Flextronics Corporation and Directors and certain officers of the Registrant†10-K000-233545/20/200910.02
Flex Ltd. Amended and Restated 2017 Equity Incentive Plan†DEF 14A000-233546/26/2020Annex A
Form of Restricted Share Unit Award Agreement under the 2017 Equity Incentive Plan for time-based vesting awards†10-Q000-2335410/30/201710.05
104

      Incorporated by Reference    
Exhibit No. Exhibit Form File No. Filing Date Exhibit No. Filed Herewith
 Third Supplemental Indenture, dated as of September 11, 2015, among the Registrant, the Guarantor party thereto and U.S. Bank National Association, as Trustee, related to the Registrant’s 4.625% Notes due 2020 and 5.000% Notes due 2023 S-4 333-207067 9/22/2015 4.11  
 Indenture, dated as of June 8, 2015, by and between the Registrant, the Guarantors party thereto and U.S. Bank National Association, as Trustee 8-K 000-23354 6/8/2015 4.1  
 Form of 4.750% Note due 2025 8-K 000-23354 6/8/2015 4.1  
 First Supplemental Indenture, dated as of September 11, 2015, among the Registrant, the Guarantor party thereto and U.S. Bank National Association, as Trustee, related to the Registrant’s 4.750% Notes due 2025 S-4 333-207067 9/22/2015 4.04  
 Description of Registrant's Securities         X
 Credit Agreement, dated as of June 30, 2017, among Flex Ltd. and certain of its subsidiaries, from time to time party thereto, as borrowers, Bank of America, N.A., as Administrative Agent and Swing Line Lender, and the other Lenders party thereto 8-K 000-23354 6/30/2017 10.01  
 Term Loan Agreement, dated as of November 30, 2016, among Flex Ltd., as borrower, The Bank of Tokyo-Mitsubishi UFJ, Ltd., as Administrative Agent, and the other Lenders party thereto 8-K 000-23354 12/1/2016 10.01  
 Amendment No. 1, dated as of July 25, 2017, to Term Loan Agreement, dated as of November 30, 2016, among Flex Ltd., as borrower, The Bank of Tokyo-Mitsubishi UFJ, Ltd., as Administrative Agent, and the other Lenders party thereto 10-Q 000-23354 10/30/2017 10.01  
 Form of Indemnification Agreement between the Registrant and its Directors and certain officers† 10-K 000-23354 5/20/2009 10.01  
 Form of Indemnification Agreement between Flextronics Corporation and Directors and certain officers of the Registrant† 10-K 000-23354 5/20/2009 10.02  
 Flex Ltd. 2010 Equity Incentive Plan† 8-K 000-23354 7/28/2010 10.01  
 Form of Share Option Award Agreement under 2010 Equity Incentive Plan† 10-Q 000-23354 8/5/2010 10.02  
 Flex Ltd. 2017 Equity Incentive Plan† DEF 14A 000-23354 7/5/2017 Annex A  
 Form of Restricted Share Unit Award Agreement under the 2017 Equity Incentive Plan for time-based vesting awards† 10-Q 000-23354 10/30/2017 10.05  
 Form of Restricted Share Unit Award Agreement under the 2017 Equity Incentive Plan for performance-based vesting awards† 10-Q 000-23354 10/30/2017 10.06  

Incorporated by Reference
Exhibit No.ExhibitFormFile No.Filing DateExhibit No.Filed Herewith
Flextronics International USA, Inc. Third Amended and Restated 2005 Senior Management Deferred Compensation Plan†10-Q000-233542/6/200910.02
Flextronics International USA, Inc. Third Amended and Restated Senior Executive Deferred Compensation Plan†10-Q000-233542/6/200910.01
Summary of Directors' Compensation†10-Q000.2335410/30/201710.02
Executive Incentive Compensation Recoupment Policy†10-Q000-233548/5/201010.06
2010 Flextronics International USA, Inc. Deferred Compensation Plan†10-Q000-2335411/3/201010.04
Form of Award Agreement under 2010 Deferred Compensation Plan†10-Q000-233547/30/201210.01
Form of 2010 Deferred Compensation Plan Award Agreement (performance targets, cliff vesting)†10-Q000-233548/2/201310.02
Form of 2010 Deferred Compensation Plan Award Agreement (non-performance, periodic vesting, continuing Participant)†10-Q000-233548/2/201310.03
Award Agreement under the 2010 Deferred Compensation Plan†10-Q000-233547/28/201410.01
Form of Restricted Share Unit Award Agreement under the 2017 Equity Incentive Plan for performance-based vesting awards (20-day trading average)†10-Q000-233547/26/201910.02
Nextracker Inc. 2014 Equity Incentive Plan†S-8333-20732510/7/201599.01
Flex Ltd. Executive Severance Plan†10-K000-233545/21/201910.27
Scott Offer Amended Offer Letter, dated as of January 27, 2019†10-K000-233545/28/202010.29
Revathi Advaithi Offer Letter, dated February 7, 2019†10-K000-233545/21/201910.29
Form of Restricted Share Unit Award Agreement under the 2017 Equity Incentive Plan for time-based vesting awards (FY21)†10-Q000-233548/5/202010.02
Form of Restricted Share Unit Award Agreement under the 2017 Equity Incentive Plan for performance-based vesting awards (20-day trading average) (FY21)†10-Q000-233548/5/202010.03
Paul R. Lundstrom Offer Letter, dated August 5, 2020†10-Q000-2335411/2/202010.02
Form of Addendum Award Agreement under the 2010 Deferred Compensation Plan (FY21)†10-Q000-233541/29/202110.02
Description of Annual Incentive Bonus Plan for Fiscal Year 2022†10-Q000-233547/30/202110.01
Form of Restricted Share Unit Award Agreement under the Amended and Restated 2017 Equity Incentive Plan for performance-based vesting awards (FY22)†10-Q000-233547/30/202110.02
Summary of Compensation Arrangements of Certain Executive Officers of Flex Ltd.†10-Q000-233547/30/202110.03
First Amendment to Flex 2010 Deferred Compensation Plan, dated December 17, 2018†10-Q000-2335410/29/202110.01
Second Amendment to Flex 2010 Deferred Compensation Plan, dated August 16, 2019†10-Q000-2335410/29/202110.02
Third Amendment to Flex 2010 Deferred Compensation Plan, dated June 3, 2020†10-Q000-2335410/29/202110.03
105
      Incorporated by Reference    
Exhibit No. Exhibit Form File No. Filing Date Exhibit No. Filed Herewith
 Flextronics International USA, Inc. Third Amended and Restated 2005 Senior Management Deferred Compensation Plan† 10-Q 000-23354 2/6/2009 10.02  
 Flextronics International USA, Inc. Third Amended and Restated Senior Executive Deferred Compensation Plan† 10-Q 000-23354 2/6/2009 10.01  
 Summary of Directors' Compensation† 10-Q 000.23354 10/30/2017 10.02  
 Executive Incentive Compensation Recoupment Policy† 10-Q 000-23354 8/5/2010 10.06  
 2010 Flextronics International USA, Inc. Deferred Compensation Plan† 10-Q 000-23354 11/3/2010 10.04  
 Form of Award Agreement under 2010 Deferred Compensation Plan† 10-Q 000-23354 7/30/2012 10.01  
 Summary of Compensation Arrangements of Certain Executive Officers of Flex Ltd.†         X
 Form of Restricted Share Unit Award Agreement under the 2010 Equity Incentive Plan for time-based vesting awards† 10-Q 000-23354 11/1/2013 10.02  
 Form of 2010 Deferred Compensation Plan Award Agreement (performance targets, cliff vesting)† 10-Q 000-23354 8/2/2013 10.02  
 Form of 2010 Deferred Compensation Plan Award Agreement (non-performance, periodic vesting, continuing Participant)† 10-Q 000-23354 8/2/2013 10.03  
 Award Agreement under the 2010 Deferred Compensation Plan† 10-Q 000-23354 7/28/2014 10.01  
 Form of Restricted Share Unit Award Agreement under the 2017 Equity Incentive Plan for retention performance-based vesting awards† 10-Q 000-23354 2/6/2019 10.01  
 
Form of Restricted Share Unit Award Agreement under the 2017 Equity Incentive Plan for retention service-based vesting awards†

         X
 Description of Annual Incentive Bonus Plan for Fiscal 2019† 10-Q 000-23354 8/2/2018 10.01  
 NEXTracker Inc. 2014 Equity Incentive Plan† S-8 333-207325 10/7/2015 99.01  
 BrightBox Technologies, Inc. 2013 Stock Incentive Plan† S-8 333-212267 6/27/2016 99.01  
 Flex Ltd. Executive Severance Plan†         X
 Separation and Release of Claims dated December 24, 2018 between Flex Ltd. and Michael M. McNamara† 10-Q 000-23354 2/6/2019 10.02  
 Revathi Advaithi Offer Letter, dated February 7, 2019         X
 Subsidiaries of Registrant         X
 Consent of Deloitte & Touche LLP         X
 Power of Attorney (included on the signature page to this Form 10-K)         X
 Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Exchange Act         X


Incorporated by Reference
Exhibit No.ExhibitFormFile No.Filing DateExhibit No.Filed Herewith
Executive Transition Agreement dated March 25, 2022 between Flex Ltd. and Francois Barbier†X
Subsidiaries of RegistrantX
Consent of Deloitte & Touche LLPX
Power of Attorney (included on the signature page to this Form 10-K)X
Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Exchange ActX
Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Exchange ActX
Certification of Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(b) of the Exchange Act and 18 U.S.C. Section 1350*X
101.INSInline XBRL Instance DocumentX
101.SCHInline XBRL Taxonomy Extension Scheme DocumentX
101.CALInline XBRL Taxonomy Extension Calculation Linkbase DocumentX
101.DEFInline XBRL Taxonomy Extension Definition Linkbase DocumentX
101.LABInline XBRL Taxonomy Extension Label Linkbase DocumentX
101.PREInline XBRL Taxonomy Extension Presentation Linkbase DocumentX
104Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101)X


*This exhibit is furnished with this Annual Report on Form 10-K, is not deemed filed with the Securities and Exchange Commission, and is not incorporated by reference into any filing of Flex Ltd. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and irrespective of any general incorporation language contained in such filing.
Management contract, compensatory plan or arrangement.

*This exhibit is furnished with this Annual Report on Form 10-K, is not deemed filed with the Securities and Exchange Commission, and is not incorporated by reference into any filing of Flex Ltd. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and irrespective of any general incorporation language contained in such filing.
Management contract, compensatory plan or arrangement.
106

SIGNATURES
Pursuant to the requirement of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
Flex Ltd.
Date: May 20, 2022By:/s/ REVATHI ADVAITHI
Revathi Advaithi
Chief Executive Officer

107
Date: May 20, 2019

POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints jointly and severally, Revathi Advaithi and Christopher E. CollierPaul R. Lundstrom and each one of them, her or his attorneys-in-fact, each with the power of substitution, for her or him in any and all capacities, to sign any and all amendments to this Report, and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that each of said attorneys-in-fact, or her or his substitutes, may do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
SignatureTitleDate
/s/ REVATHI ADVAITHIChief Executive Officer (Principal Executive Officer) and DirectorMay 20, 2022
Revathi Advaithi
SignatureTitleDate
/s/ REVATHI ADVAITHIPAUL R. LUNDSTROMChief Executive Officer and Director (Principal Executive Officer)May 20, 2019
Revathi Advaithi
/s/ CHRISTOPHER E. COLLIERChief Financial Officer (Principal Financial Officer)May 20, 20192022
Christopher E. CollierPaul R. Lundstrom
/s/ DAVID P. BENNETTDANIEL J. WENDLERSenior Vice President and Chief Accounting Officer (Principal Accounting Officer)May 20, 20192022
David P. BennettDaniel J. Wendler
/s/ MICHAEL D. CAPELLASChairman of the BoardMay 20, 20192022
Michael D. Capellas
/s/ JILL A. GREENTHALJOHN D. HARRIS IIDirectorMay 20, 20192022
Jill A. GreenthalJohn D. Harris II
/s/ MICHAEL E. HURLSTONDirectorMay 20, 2022
Michael E. Hurlston
/s/ JENNIFER LIDirectorMay 20, 20192022
Jennifer Li
/s/ ERIN L. MCSWEENEYDirectorMay 20, 2022
Erin L. McSweeney
/s/ MARC A. ONETTODirectorMay 20, 20192022
Marc A. Onetto
/s/ WILLY C. SHIH, PH.D.DirectorMay 20, 20192022
Willy C. Shih, Ph.D.
/s/ CHARLES K. STEVENS, IIIDirectorMay 20, 20192022
Charles K. Stevens, III
/s/ LAY KOON TANDirectorMay 20, 20192022
Lay Koon Tan
/s/ PATRICK J. WARDDirectorMay 20, 2022
Patrick J. Ward
/s/ WILLIAM D. WATKINSDirectorMay 20, 20192022
William D. Watkins
/s/ LAWRENCE A. ZIMMERMANDirectorMay 20, 2019
Lawrence A. Zimmerman


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108