UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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 definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.:

Non-accelerated filer

The number of shares of the registrant’s ordinary shares outstanding as of ~~October 22, 2019~~July 29, 2020 was ~~508,308,187.~~500,888,523.

ITEM 1. FINANCIAL STATEMENTS

As of September 27, 2019 As of March 31, 2019
(In thousands, except share amounts)
(Unaudited)
ASSETS
Current assets:

Cash and cash equivalents $ 1,815,513
$ 1,696,625
Accounts receivable, net of allowance for doubtful accounts of $90,430 and $91,396 as of September 27, 2019 and March 31, 2019, respectively 2,414,633
2,612,961
Contract assets 205,753
216,202
Inventories 3,721,237
3,722,854
Other current assets 1,335,387
854,790
Total current assets 9,492,523
9,103,432
Property and equipment, net 2,217,445
2,336,213
Operating lease right-of-use assets, net 588,474
—
Goodwill 1,062,450
1,073,055
Other intangible assets, net 292,179
330,995
Other assets 623,582
655,672
Total assets $ 14,276,653
$ 13,499,367

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:

Bank borrowings and current portion of long-term debt $ 32,450
$ 632,611
Accounts payable 5,227,495
5,147,236
Accrued payroll 382,812
391,591
Other current liabilities 1,915,263
1,426,075
Total current liabilities 7,558,020
7,597,513
Long-term debt, net of current portion 2,957,878
2,421,904
Operating lease liabilities, non-current 512,086
—
Other liabilities 442,708
507,590
Shareholders’ equity

Ordinary shares, no par value; 559,389,281 and 566,787,620 issued, and 509,149,926 and 516,548,265 outstanding as of September 27, 2019 and March 31, 2019, respectively 6,445,997
6,523,750
Treasury stock, at cost; 50,239,355 shares as of September 27, 2019 and March 31, 2019 (388,215 ) (388,215 )
Accumulated deficit (3,062,057 ) (3,012,012 )
Accumulated other comprehensive loss (189,764 ) (151,163 )
Total shareholders’ equity 2,805,961
2,972,360
Total liabilities and shareholders’ equity $ 14,276,653
$ 13,499,367


	Three-Month Periods Ended
	June 26, 2020		June 28, 2019
	(In thousands, except per share amounts) (Unaudited)
Net sales	$	5,153,333	$	6,175,939
Cost of sales	4,840,114		5,775,775
Restructuring charges	9,666		47,405
Gross profit	303,553		352,759
Selling, general and administrative expenses	190,721		209,624
Intangible amortization	15,176		17,082
Restructuring charges	16		8,787
Interest and other, net	30,257		53,157

Income before income taxes	67,383		64,109
Provision for income taxes	15,563		19,237
Net income	$	51,820	$	44,872



Earnings per share:
Basic	$	0.10	$	0.09
Diluted	$	0.10	$	0.09
Weighted-average shares used in computing per share amounts:
Basic	497,920		514,238
Diluted	501,632		517,550


	Three-Month Periods Ended
	June 26, 2020		June 28, 2019
	(In thousands) (Unaudited)
Net income	$	51,820	$	44,872
Other comprehensive income:
Foreign currency translation adjustments, net of 0 tax	14,050		4,404
Unrealized gain (loss) on derivative instruments and other, net of 0 tax	29,760		(5,475)
Comprehensive income	$	95,630	$	43,801

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

~~CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Continued)~~

1. ORGANIZATION OF THE COMPANY AND BASIS OF PRESENTATION

Organization of the Company

Flex Ltd. ("Flex" or the "Company") was incorporated in the Republic of Singapore in May 1990. The Company's operations have expanded over the years through a combination of organic growth and acquisitions. The Company is the manufacturing partner of choice that helps a ~~globally-recognized, provider~~diverse customer base design and build products that improve the world. Through the collective strength of ~~Sketch-to-Scale~~^®~~services - innovative design, engineering, manufacturing,~~a global workforce across approximately 30 countries and responsible, sustainable operations, the Company delivers technology innovation, supply chain, ~~services~~ and manufacturing solutions ~~- from conceptual sketch~~ to ~~full-scale production. The~~diverse industries and end markets. In the first quarter of fiscal year 2021, the Company ~~designs, builds, ships~~made certain changes in its organizational structure as part of its strategy to further drive growth and ~~manages complete packaged~~productivity with two focused delivery models. As a result, beginning in the first quarter of fiscal year 2021, the Company reports its financial performance based on two operating and reportable segments:

•Flex Agility Solutions ("FAS"), which is comprised of the following end markets:

◦Consumer Devices, including mobile and high velocity consumer devices;

◦Lifestyle, including appliances, consumer packaging, floorcare, micro mobility and ~~enterprise products, from~~audio; and

◦Communications, Enterprise and Cloud ("CEC"), including data infrastructure, edge infrastructure and communication infrastructure.

•Flex Reliability Solutions ("FRS"), which is comprised of the following end markets:

◦Automotive, including autonomous, connectivity, electrification, and smart technologies;

◦Health Solutions, including medical devices, medical equipment and ~~connected automotive systems to sustainable lighting~~drug delivery; and ~~cloud~~

◦Industrial, including capital equipment, industrial devices, renewable and ~~data center solutions for companies of all sizes in various industries~~grid edge, and ~~end-markets, through its activities in the following segments:~~power systems.

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 chain solutions for consumer, computing and printing devices.

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).

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP” or “GAAP”) for interim financial information and in accordance with the requirements of Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements, and should be read in conjunction with the Company’s audited consolidated financial statements as of and for the fiscal year ended March 31, ~~2019~~2020 contained in the Company’s Annual Report on Form 10-K. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the ~~three and six-month~~three-month periods ended ~~September 27, 2019~~June 26, 2020 are not necessarily indicative of the results that may be expected for the fiscal year ending March 31, ~~2020.~~2021.

The first quarters for fiscal years ~~2020~~2021 and ~~2019~~2020 ended on June 26, 2020, which is comprised of 87 days in the period, and June 28, 2019, which is comprised of 89 days in the period, ~~and June 29, 2018, which is comprised of 90 days in the period,~~ respectively. ~~The second quarters for fiscal years 2020 and 2019 ended on September 27, 2019 and September 28, 2018, which are comprised of 91 days in both periods.~~

The accompanying unaudited condensed consolidated financial statements include the accounts of Flex and its majority-owned subsidiaries, after elimination of intercompany accounts and transactions. 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. 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, net, in the condensed consolidated statements of operations.

InThe changes to the accompanying condensed consolidated statements of operations $26.8 million and $29.0 million of expenses incurred in the three-month and six-month periods ended September 28, 2018, respectively, that were previously included as cost of sales have been reclassified as restructuring charges to conform with the current period presentation. Also, as previously disclosed, the Company has made certain immaterial corrections to net sales previously reported for the first and second quarters of fiscal year 2019 primarily to reflect revenue from certain contracts with customers on a net basis. As a result of correcting these errors, net sales and cost of sales in the accompanying Condensed Consolidated Statement of Operations for the three-month and six-month periods ended September 28, 2018 have been reduced by $48 million and $73 million, respectively, from previously reported amounts. These correctionsCompany’s organizational structure noted above had no impact ~~on gross profit, segment income or net income for the periods presented. Amounts presented for the three-month and six-month periods ended September 28, 2018 related~~ to the ~~disaggregation of revenue in the CTG~~condensed consolidated financial statements. For comparability purposes, segment ~~in Note 4, and CTG segment net sales and total net sales in Note 16,~~reporting for prior periods have ~~also~~ been restated ~~accordingly. The Company evaluated these corrections, considering both qualitative and quantitative factors, and concluded they are immaterial~~to conform to the ~~previously issued financial statements.~~current

~~Recently Adopted Accounting Pronouncement~~

~~In February 2016,~~presentation. Refer to note 14, “Segments Reporting,” for additional information on the ~~Financial Accounting Standards Board (FASB) issued ASU No. 2016-02, Leases,~~changes in operating and ~~subsequent updates (collectively, referred to as Accounting Standard Codification 842 or “ASC 842”). ASC 842 requires a lessee to recognize a right~~reportable segments.

Use of ~~use (“ROU”) asset and lease liability. Leases will be classified as finance or operating, with classification affecting the recognition of expense and presentation in the income statement.~~Estimates

The ~~Company adopted ASC 842 on April 1, 2019 using~~preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the ~~modified retrospective method on~~reported amounts of assets and liabilities, the ~~effective date. As a result,~~disclosure of contingent assets and liabilities at the ~~Company was not required to adjust its comparative period financial information for effects~~date of the ~~standard or make~~financial statements, and the ~~new required lease disclosures for periods before~~reported amounts of revenues and expenses during the Company's adoption date. The Company has elected to adopt the package of transition practical expedients and, therefore, has not reassessed (1) whether existing or expired contracts contain a lease, (2) lease classification for existing or expired leases or (3) thereporting period. Estimates are used in accounting for, ~~initial direct costs that were previously capitalized. In addition, the Company has elected the short-term lease recognition~~among other things: allowances for doubtful accounts; inventory write-downs; valuation allowances for deferred tax assets; uncertain tax positions; valuation and ~~measurement exemption for all classes~~useful lives of long-lived assets ~~which allows the Company to not recognize ROU~~including property, equipment, intangible assets and ~~lease liabilities for leases with a lease term~~goodwill; valuation of ~~12 months or less~~investments in privately held companies; asset impairments; fair values of financial instruments including highly liquid investments, notes receivable 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 nonlease 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 its leases, the Company uses its estimate of thederivative instruments; restructuring charges; contingencies; warranty provisions; incremental borrowing rate ~~as of the commencement date~~ in determining the present value of lease ~~payments. The Company’s estimated incremental borrowing rate is~~payments; accruals for potential price adjustments arising from customer contracts; fair values of assets obtained and liabilities assumed in business combinations; and the ~~rate~~fair values of ~~interest it would have to pay on a collateralized basis to borrow an amount equal~~stock options and restricted share unit awards granted under the Company's stock-based compensation plans. Due to the ~~lease payments under similar terms.~~COVID-19 pandemic, there has been and will continue to be uncertainty and disruption in the global economy and financial markets. The ~~lease term for all of the Company’s leases includes the non-cancellable period of the lease plus any~~Company has made estimates and assumptions taking into consideration certain possible impacts due to COVID-19. These estimates may change, as new events occur, and additional ~~periods covered by either an option to extend (or not to terminate) the lease that the Company~~information 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~~obtained. Actual results may differ from previously estimated amounts, and such differences may be material ~~impact~~ to the ~~Company’s~~condensed consolidated balance sheet, but did not materially impact the consolidated statement of income or consolidated statement of cash flows. The most significant changes to the consolidated balance sheet relate to the recognition of new ROU assetsfinancial statements. Estimates and ~~lease liabilities for operating leases. The Company’s accounting for finance leases remains substantially unchanged~~assumptions are reviewed periodically, and the ~~balances~~effects of revisions are ~~not material for any periods presented.~~reflected in the period they occur.

As a result of adopting ASC 842 as of April 1, 2019, the Company recognized additional operating liabilities of $658 million with a corresponding ROU asset of $624 million and a deferred gain of $22 million for sale leaseback transactions to opening retained earnings.Recently Adopted Accounting Pronouncement

In ~~October 2018,~~March 2020, the FASB issued ASU ~~2018-16 “Derivatives and Hedging (Topic 815): Inclusion~~2020-04 "Facilitation of the ~~Secured Overnight Financing~~Effects of Reference Rate ~~(SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate~~Reform on Financial Reporting", which temporarily simplifies the accounting for ~~Hedge Accounting Purposes”~~contract modifications, including hedging relationships, due to ~~expand~~ the ~~lists of eligible benchmark interest~~transition from LIBOR and other interbank offered rates to ~~include OIS based on SOFR~~alternative reference interest rates. For example, entities can elect not to ~~facilitate~~remeasure the ~~marketplace transition from LIBOR.~~contracts at the modification date or reassess a previous accounting determination if certain conditions are met. Additionally, entities can elect to continue applying hedge accounting for hedging relationships affected by reference rate reform if certain conditions are met. The Company adopted the guidance during the first quarter of fiscal year ~~2020 with an immaterial impact on the Company's financial position, results of operations and cash flows.~~

In August 2018, the FASB issued ASU 2018-15 "Intangibles-Goodwill 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 that has a software license. The new guidance also prescribes the balance sheet, income statement, and cash flow classification 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 fiscal year 2021 ~~with early adoption permitted. The Company early adopted the guidance during the second quarter of fiscal year 2020 with an immaterial impact to its condensed consolidated financial statements.~~

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 Company adopted the guidance during the first quarter of fiscal year 2020 with an immaterial impact on the Company's financial position, results of operations and cash flows.

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 aspects of the accounting for nonemployee share-based payment transactions in current GAAP. The Company adopted this guidance during the first quarter of fiscal year 2020 with an immaterial impact on its consolidated financial statements.

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 Company adopted this guidance during the first quarter of fiscal year 2020 with an immaterial impact on its consolidated financial statements.

~~Recently Issued Accounting Pronouncements~~

In June 2016, the FASB issued ASU 2016-13 “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” and also issued subsequent amendments to the initial guidance: ASU 2018-19, ASU 2019-04, ASU 2019-05, ASU 2019-10, and ASU ~~2019-05,~~2019-11, which replaces the existing incurred loss impairment model with an expected credit loss model and requires a financial asset measured at amortized cost to be presented at the net amount expected to be collected. The Company adopted the guidance ~~is effective for the Company beginning in~~during the first quarter of fiscal year 2021 with ~~early adoption permitted. The Company is currently assessing and expects the new guidance to 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.~~statements.

Recently Issued Accounting Pronouncements

In ~~October 2018,~~January 2020, the FASB issued ASU ~~2018-17 “Consolidation~~2020-01 "Investments - Equity Securities (Topic ~~810)~~321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815): ~~Targeted Improvements~~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 ~~Related Party Guidance~~the following two topics: (1) accounting for ~~Variable Interest Entities”~~certain equity securities when the equity method of accounting is applied or discontinued, and (2) scope considerations related to ~~provide a new private company variable interest entity exemption~~forward contracts and ~~change how decision makers apply the variable interest criteria.~~purchased options on certain securities. The guidance is effective for the Company beginning in the first quarter of fiscal year ~~2021~~2022 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.~~2022.

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 guidance is effective for the Company beginning in the first quarter of fiscal year 2022 with early adoption permitted. The Company expects the new guidance will have an immaterial impact on its consolidated financial statements, and intends to adopt the guidance when it becomes effective in the first quarter of fiscal year 2022.

2. BALANCE SHEET ITEMS

The components of inventories, net of applicable lower of cost and net realizable value write-downs, were as follows:

As of September 27, 2019 As of March 31, 2019
(In thousands)
Raw materials $ 2,780,646
$ 2,922,101
Work-in-progress 394,282
366,135
Finished goods 546,309
434,618
$ 3,721,237
$ 3,722,854

Goodwill and Other Intangible Assets

~~The following table summarizes~~In accordance with accounting guidance on goodwill and other intangible assets, the ~~activity~~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. As described in note 1, the ~~Company’s goodwill account for each~~Company made certain changes in its organizational structure during the first quarter of fiscal year 2021 as part of its 4strategy to further drive growth and productivity through two separate delivery models that represent reportable segments, FAS and FRS. With these changes, the Company also revised its reporting ~~units (which align to~~units. Accordingly, the ~~Company's reportable segments) during the six-month period ended September 27, 2019:~~

~~The components~~Company completed an interim test as of ~~acquired intangible assets are as follows:~~

As of September 27, 2019 As of March 31, 2019
Gross
Carrying
Amount Accumulated
Amortization Net
Carrying
Amount Gross
Carrying
Amount Accumulated
Amortization Net
Carrying
Amount
(In thousands)
Intangible assets:

Customer-related intangibles $ 282,006
$ (118,818 ) $ 163,188
$ 297,306
$ (113,627 ) $ 183,679
Licenses and other intangibles 254,797
(125,806 ) 128,991
274,604
(127,288 ) 147,316
Total $ 536,803
$ (244,624 ) $ 292,179
$ 571,910
$ (240,915 ) $ 330,995

Goodwill is tested for impairment on an annual basis and whenever events or changes in circumstances indicate that it is more likely than not that the fair value of a reporting unit is below its carrying value.April 1, 2020. Recoverability of goodwill is measured at the reporting unit level by comparing the reporting unit's carrying ~~value,~~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. ~~As previously disclosed,~~These approaches use significant unobservable inputs, or Level 3 inputs, as defined by the ~~date~~fair value hierarchy and require management to make various judgmental assumptions about sales, operating margins, growth rates and discount rates which consider the Company's budgets, business plans and economic projections, and are believed to reflect market participant views. Some of ~~its most recent annual impairment test~~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 the Company believes it has made reasonable estimates and assumptions to calculate the fair value of the ~~CTG~~ reporting ~~unit exceeded~~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.

Based on the latest assessment of its ~~carrying value by 22%. The~~goodwill as of April 1, 2020, the Company ~~has assessed whether an interim~~determined that no impairment existed as of the date of the impairment test, ~~should be performed on~~because the ~~CTG reporting unit in light of recent shortfalls in CTG’s financial performance. Management has concluded that it is more likely than not that CTG’s~~ fair value of each one of its reporting units exceeds its respective carrying value. In addition, goodwill was reallocated among each of the Company's six reporting units based on each reporting unit’s relative fair value as of September 27, 2019, thus an interim impairment test was not completed. As the Company continues to refine its long-term strategy for the CTG reporting unit, it is reasonably possible that changes in circumstances could require management to perform an impairment test for CTG prior to the next annual impairment test date of JanuaryApril 1, 2020. InThe following table summarizes the ~~event that an interim test is performed~~goodwill allocation as of April 1, 2020 and ~~goodwill in CTG is determined to be impaired,~~ the ~~resulting charge could be material to~~activity during the ~~consolidated results~~three-month period ended June 26, 2020:


	FAS										FRS
	Communications, Enterprise and Cloud		Lifestyle		Consumer Devices		Automotive		Health Solutions		Industrial		Total
	(In thousands)
Balance at April 1, 2020	$	188,179	$	130,705	$	50,328	$	174,123	$	192,498	$	328,720	$	1,064,553



Foreign currency translation adjustments	—		—		—		9,231		820		—		10,051
Balance at June 26, 2020	$	188,179	$	130,705	$	50,328	$	183,354	$	193,318	$	328,720	$	1,074,604

The components of ~~operations.~~acquired intangible assets are as follows:


	As of June 26, 2020										As of March 31, 2020
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
	(In thousands)
Intangible assets:
Customer-related intangibles	$	276,087	$	(135,299)	$	140,788	$	275,678	$	(128,155)	$	147,523
Licenses and other intangibles	248,966		(139,299)		109,667		244,917		(130,022)		114,895
Total	$	525,053	$	(274,598)	$	250,455	$	520,595	$	(258,177)	$	262,418

The gross carrying amounts of intangible assets are removed when fully amortized. The estimated future annual amortization expense for intangible assets is as follows:

(1)Represents estimated amortization for the remaining fiscal nine-month period ending ~~March 31, 2020.~~

~~Other Current Assets~~

~~Other current assets include approximately $357.1 million and $292.5 million as of September 27, 2019 and~~ March 31, ~~2019, respectively, for the deferred purchase price receivable from the Company's Asset-Backed Securitization programs. See note 12 for additional information.~~

The Company participates in certain customers' supplier financing programs allowing Flex to sell its receivables to financial institutions identified by the customer. Under these programs, the financial institutions act as the customers' paying agent with respect to receivables due to the Company. Following the sale of the receivables to the financial institutions, the transferred receivables are isolated from the Company and its affiliates, and effective control of the transferred receivables is passed to the financial institutions, which have the right to pledge or sell the receivables.

During the second quarter of fiscal year 2020, certain invoices were sold and transferred to certain financial institutions under a customer's supplier financing program, that had the right to pledge or sell the receivables as of September 27, 2019. However, under the governing law in the jurisdiction of sale, the assignment of receivables is effective against third-parties only upon registration of the transferred assets with a governmental agency. The Company was not able to complete the registration of the receivables before the end of the fiscal quarter and accordingly did not account for these transactions as true sales. As a result of these transactions the Company has recorded $336.1 million of other current assets, with a corresponding amount recorded as other current liabilities, in the condensed consolidated balance sheet as of September 27, 2019, and has recorded the same amount as “other financing activities, net” in the statement of cash flows. The Company subsequently registered all of the invoices in October 2019 and the receivables were considered sold at that time.2021.

Other Current Liabilities

Other current liabilities include customer working capital advances of ~~$249.9~~$325.7 million and ~~$266.3~~$264.2 million, and customer-related accruals of ~~$243.5~~$231.3 million and ~~$260.1 million, and deferred revenue of $341.5 million and $271.8~~$195.1 million, as of ~~September 27, 2019~~June 26, 2020 and March 31, ~~2019,~~2020, respectively. The customer working capital advances are not interest-bearing, do not have fixed repayment dates and are generally reduced as the underlying working capital is consumed in production. ~~Following the adoption of ASC 842, current~~Current operating lease liabilities were ~~$119.6~~$116.1 million and $114.1 million as of ~~September 27, 2019. Further, other current liabilities include $336.1 million representing the arrangement with the financial institutions as of September 27, 2019, as further described above.~~June 26, 2020 and March 31, 2020.

The Company has several commitments under operating leases for warehouses, buildings, and equipment. The Company also has a minimal number of finance leases with an immaterial impact on its condensed financial statements. Leases have initial lease terms ranging from 1 year to 23 years.

~~The components of lease cost were as follow (in thousands):~~

Lease cost Three-Month Period Ended Six-Month Period Ended
September 27, 2019 September 27, 2019
Operating lease cost $ 40,630
$ 81,306
Total lease cost $ 40,630
$ 81,306

~~Amounts reported in the Consolidated Balance Sheet as of the period ended September 27, 2019 were (in thousands, except weighted average lease term and discount rate):~~

As of September 27, 2019
Operating Leases:
   Operating lease right of use assets $ 588,474
   Operating lease liabilities 631,701

Weighted-average remaining lease term (In years)
   Operating leases 7.2

Weighted-average discount rate
   Operating leases 4.3 %

~~Other information related to leases was as follow (in thousands):~~

Six-Month Period Ended
September 27, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases $ 69,106

~~Future lease payments under non-cancellable leases as of September 27, 2019 are as follows (in thousands):~~

Fiscal Year Ended March 31, Operating Leases
2020 (1) $ 77,710
2021 125,871
2022 106,230
2023 92,832
2024 79,096
Thereafter 259,559
Total undiscounted lease payments
741,298
Less: imputed interest 109,597
Total lease liabilities $ 631,701

As previously disclosed in our Annual Report on Form 10-K for the fiscal year ended March 31, 2019 and under the previous lease accounting standard ASC 840, the aggregate future non-cancellable minimum rental payments on our operating lease, as of March 31, 2019, are as follows:

Fiscal Year Ending March 31, Operating Leases
(In thousands)
2020 $ 155,391
2021 113,245
2022 93,777
2023 81,335
2024 67,341
Thereafter 171,828
Total minimum lease payments $ 682,917

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 with a customer. A contract is defined as an agreement between two parties that creates enforceable rights and obligations and can be written, verbal, or implied. The Company generally enters into master supply agreements (“MSA”) 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) 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) the Company satisfies a performance obligation. Further, the Company assesses 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). 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 IP restrictions) and the Company has an enforceable right to payment including a reasonable profit for work-in-progress inventory with respect to these contracts. 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-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 transfer goods or service, and therefore do not represent separate performance obligations for revenue recognition (e.g., procurement of materials and standard workmanship warranty).

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.

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 condensed consolidated balance sheets and transferred to receivables when rights to payment become unconditional.

A contract liability is recognized when the Company receives payments in advance of the satisfaction of performance and is included in other current liabilities on the condensed consolidated balance sheets. Contract liabilities, identified as deferred revenue, were ~~$341.5~~$362.1 million and ~~$271.8~~$361.5 million as of ~~September 27, 2019~~June 26, 2020 and March 31, ~~2019,~~2020, respectively.

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 ~~three and six-month~~three-month periods ended ~~September 27,~~June 26, 2020 and June 28, 2019 ~~and September 28, 2018~~ (in thousands), respectively.


	Three-Month Period Ended June 26, 2020
	FAS		FRS		Total
Timing of Transfer
Point in time	$	2,445,663	$	1,323,523	$	3,769,186
Over time	466,367		917,780		1,384,147
Total segment	$	2,912,030	$	2,241,303	$	5,153,333

Six-Month Period Ended September 28, 2018
HRS IEI CEC CTG Total
Timing of Transfer
Point in time $ 1,898,321
$ 2,153,218
$ 3,012,548
$ 2,499,833
$ 9,563,920
Over time 525,075
859,046
1,082,535
1,030,984
3,497,640
Total segment $ 2,423,396
$ 3,012,264
$ 4,095,083
$ 3,530,817
$ 13,061,560

5.4. SHARE-BASED COMPENSATION

The Company's primary plan used for granting equity compensation awards is the 2017 Equity Incentive Plan (the "2017 Plan").

The following table summarizes the Company’s share-based compensation expense:

Three-Month Periods Ended
Six-Month Periods Ended
September 27, 2019
September 28, 2018
September 27, 2019
September 28, 2018
(In thousands)
Cost of sales $ 4,212

$ 4,767

$ 7,152

$ 10,171
Selling, general and administrative expenses 14,678

14,314

26,965

29,863
Total share-based compensation expense $ 18,890

$ 19,081

$ 34,117

$ 40,034

Total unrecognized compensation expense related to share options under all plans ~~was $1.2 million and will be recognized over a weighted-average remaining vesting period of 1.5 years. As of September 27, 2019,~~as well as the number of options outstanding

and exercisable ~~under all plans was 0.6 million and 0.5 million, respectively, at a weighted-average exercise price~~were immaterial as of ~~$4.28 per share and $5.49 per share, respectively.~~ June 26, 2020.

During the ~~six-month~~three-month period ended ~~September 27, 2019,~~June 26, 2020, the Company granted ~~8.1~~10.2 million unvested restricted share unit ("RSU") awards. Of this amount, approximately ~~6.3~~8.8 million are plain-vanilla unvested RSU awards that vest over a period of three to four years, with no performance or market conditions, and with an average grant date price of ~~$9.19~~$10.25 per award. Further, approximately ~~1.8~~1.4 million unvested shares represent the target amount of grants made to certain key employees whereby vesting is contingent on certain market conditions. The average grant date fair value of these awards contingent on certain market conditions was estimated to be ~~$11.92~~$15.02 per award and was calculated using a Monte Carlo simulation. The number of shares contingent on market conditions that ultimately will vest will range from 0 up to a maximum of ~~3.6~~2.8 million based on a measurement of the percentile rank of the Company’s total shareholder return over a certain specified period against the Standard and Poor’s (“S&P”) 500 Composite Index, and will cliff vest after a period of three years, to the extent such market conditions have been met.

As of ~~September 27, 2019,~~June 26, 2020, approximately ~~17.6~~22.5 million unvested RSU awards under all plans were outstanding, of which vesting for a targeted amount of ~~3.5~~4.5 million awards is contingent primarily on meeting certain market conditions. The number of shares that will ultimately be issued can range from 0 to ~~7.0~~9.0 million based on the achievement levels of the respective conditions. ~~During the six-month period ended September 27, 2019, no~~No shares ~~vested~~are expected to vest in connection with the awards with market conditions granted in fiscal year ~~2017.~~ 2018.

As of ~~September 27, 2019,~~June 26, 2020, total unrecognized compensation expense related to unvested RSU awards under all plans was approximately ~~$161.3~~$203.3 million, and will be recognized over a weighted-average remaining vesting period of ~~2.6~~2.4 years.

6.5. EARNINGS ~~(LOSSES)~~ PER SHARE

The following table reflects basic weighted-average ordinary shares outstanding and diluted weighted-average ordinary share equivalents used to calculate basic and diluted earnings per share attributable to the shareholders of Flex:


	Three-Month Periods Ended
	June 26, 2020		June 28, 2019
	(In thousands, except per share amounts)
Basic earnings per share:
Net income	$	51,820	$	44,872
Shares used in computation:
Weighted-average ordinary shares outstanding	497,920		514,238
Basic earnings per share	$	0.10	$	0.09

Diluted earnings per share:
Net income	$	51,820	$	44,872
Shares used in computation:
Weighted-average ordinary shares outstanding	497,920		514,238
Weighted-average ordinary share equivalents from stock options and RSU awards (1) (2)	3,712		3,312
Weighted-average ordinary shares and ordinary share equivalents outstanding	501,632		517,550
Diluted earnings per share	$	0.10	$	0.09

(1)An immaterial number of options to purchase ordinary shares were excluded from the computation of diluted earnings per share during the three-month periods ended June 26, 2020 and June 28, 2019, respectively, due to their anti-dilutive impact on the weighted-average ordinary share equivalents.

(2)RSU awards of 3.2 million and 6.1 million for the three-month periods ended June 26, 2020 and June 28, 2019 were excluded from the computation of diluted earnings per share due to their anti-dilutive impact on the weighted-average ordinary share equivalents.

Three-Month Periods Ended Six-Month Periods Ended
September 27, 2019 September 28, 2018 September 27, 2019 September 28, 2018
(In thousands, except per share amounts)
Basic earnings (losses) per share:

Net income (loss) $ (116,940 ) $ 86,885
$ (72,068 ) $ 202,920
Shares used in computation:

Weighted-average ordinary shares outstanding 512,692
531,503
513,448
530,426
Basic earnings (losses) per share $ (0.23 ) $ 0.16
$ (0.14 ) $ 0.38

Diluted earnings (losses) per share:

Net income (loss) $ (116,940 ) $ 86,885
$ (72,068 ) $ 202,920
Shares used in computation:

Weighted-average ordinary shares outstanding 512,692
531,503
513,448
530,426
Weighted-average ordinary share equivalents from stock options and restricted share unit awards (1) (2) (3) —
2,955
—
4,601
Weighted-average ordinary shares and ordinary share equivalents outstanding 512,692
534,458
513,448
535,027
Diluted earnings (losses) per share $ (0.23 ) $ 0.16
$ (0.14 ) $ 0.38

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~~(3)~~

RSU awards of 5.9 million and 5.5 million for the three and six-month periods ended September 27, 2019 were excluded from the computation of diluted earnings (losses) per share due to their anti-dilutive impact on the weighted-average ordinary share equivalents. RSU awards of 3.1 million for the three and six-month periods ended September 28, 2018 were excluded from the computation of diluted earnings per share.

7.6. BANK BORROWINGS AND LONG-TERM DEBT

Bank borrowings and long-term debt as of ~~September 27, 2019~~June 26, 2020 are as follows:

As of September 27, 2019 As of March 31, 2019
(In thousands)
4.625% Notes due February 2020 $ —
$ 500,000
Term Loan due November 2021 421,563
671,563
Term Loan, including current portion, due in installments through June 2022 452,250
458,531
5.000% Notes due February 2023 500,000
500,000
Term Loan due April 2024 - three-month Yen LIBOR plus 0.50% 311,224
—
4.75% Notes due June 2025 597,037
596,815
4.875% Notes due June 2029 448,277
—
India Facilities 110,258
170,206
Other 162,992
168,039
Debt issuance costs (13,273 ) (10,639 )
2,990,328
3,054,515
Current portion, net of debt issuance costs (32,450 ) (632,611 )
Non-current portion $ 2,957,878
$ 2,421,904


	As of June 26, 2020		As of March 31, 2020
	(In thousands)
Term Loan, including current portion, due in installments through June 2022	433,406		433,406
5.000% Notes due February 2023	500,000		500,000
Term Loan due April 2024 - three-month Yen LIBOR plus 0.500%	313,596		310,115
4.750% Notes due June 2025	597,380		597,265
3.750% Notes due February 2026	423,411		—
4.875% Notes due June 2029	661,610		661,908
4.875% Notes due May 2030	323,595		—
India Facilities	138,238		138,238
Other	213,881		210,684
Debt issuance costs	(19,668)		(13,377)
	3,585,449		2,838,239
Current portion, net of debt issuance costs	(162,287)		(149,130)
Non-current portion	$	3,423,162	$	2,689,109

The weighted-average interest rate for the Company's long-term debt was ~~4.1%~~3.8% and ~~4.2%~~4.0% as of ~~September 27, 2019~~June 26, 2020 and March 31, ~~2019.~~

~~During the first quarter of fiscal year~~ 2020, and as further discussed below, the Company entered into a JPY33.525 billion term loan agreement due April 2024, in addition to issuing $450 million of 4.875% Notes due June 15, 2029. Part of the proceeds obtained were used to repay the outstanding balance of the Company's existing 4.625% Notes due February 2020, and $250 million of the Term Loan due November 2021. As both transactions were determined to fall under extinguishment accounting, the Company recognized an immaterial loss on extinguishment during the three-month and six-month periods ended September 27, 2019, which was recorded in interest and other, net on the condensed consolidated statements of operations during the period.respectively.

Scheduled repayments of the Company's bank borrowings and long-term debt as of ~~September 27, 2019~~June 26, 2020 are as follows:


Fiscal Year Ending March 31,	Amount
	(In thousands)
2021 (1)	$	149,983
2022	212,255
2023	870,178
2024	53,109
2025	313,596
Thereafter	2,005,996
Total	$	3,605,117

Fiscal Year Ending March 31, Amount
(In thousands)
2020 (1) $ 19,529
2021 98,849
2022 607,940
2023 857,571
2024 60,438
Thereafter 1,359,274
Total $ 3,003,601


~~(1)~~	(1)Represents estimated repayments for ~~the remaining six-month period ending March 31, 2020.~~

~~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 Yen LIBOR plus 0.50%, which was then swapped to U.S. dollars. The term loan, which is due at maturity and subject to quarterly interest payments, is used to fund general operations and refinance certain other outstanding debts. As the term loan is denominated in Japanese Yen, the debt balance is remeasured to USD at end of each reporting period. Foreign currency

~~contracts have been entered into with respect to this Japanese yen denominated term loan. Refer to note 10 for additional details.~~

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. As of September 27, 2019, the Company was in compliance with the covenants under this term loan agreement.remaining fiscal nine-month period ending March 31, 2021.

Notes due ~~June 2029~~February 2026 and May 2030

In ~~June 2019,~~May 2020, the Company issued ~~$450~~$425 million aggregate principal amount of 3.750% Notes due February 2026 (the "2026 Notes"), at 99.617% of face value and $325 million aggregate principal amount of 4.875% Notes due ~~June 15, 2029~~May 2020 (the ~~“2029 Notes”~~"2030 Notes" and , together with the 2026 Notes, the " Notes"), at ~~99.607%~~99.562% of face value. The Company received in aggregate, proceeds of approximately ~~$448.2~~$747 million, net of discount, from the issuance which ~~was~~were used ~~together with available cash, to refinance certain~~for working capital and other ~~outstanding debt.~~general corporate purposes. The Company incurred and capitalized as a direct reduction to the carrying amount of the ~~notes~~Notes presented on the balance sheet approximately ~~$4.3~~$7.1 million of costs in conjunction with the issuance of the ~~2029~~ Notes.

Interest on the ~~2029~~2026 Notes and the 2030 Notes is payable semi-annually, commencing on ~~June 15~~August 1, 2020 and ~~December 15 of each year, beginning on December 15, 2019.~~November 12, 2020, respectively. The ~~2029~~ Notes are senior unsecured obligations of the Company and rank equally with all of the ~~Company’s~~Company's other existing and future senior and unsecured ~~indebtedness.~~ debt obligations.

The ~~Indenture~~indenture governing the ~~2029~~ 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; 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

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default arising from specified events of bankruptcy or insolvency, all outstanding ~~2029~~ 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 trustee or holders of at least 25% in aggregate principal amount of the then outstanding ~~2029~~2026 Notes or 2030 Notes may declare all of ~~the 2029~~such series of 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 2029~~such series of Notes. As of ~~September 27, 2019,~~June 26, 2020, the Company was in compliance with the covenants in the indenture governing the ~~2029~~ Notes.

8.7. INTEREST AND OTHER, NET

Interest and other, net for the ~~three and six-month~~three-month periods ended ~~September 27,~~June 26, 2020 and June 28, 2019 ~~and September 28, 2018~~ are primarily composed of the following:


	Three-Month Periods Ended
	June 26, 2020		June 28, 2019
	(In thousands)
Interest expenses on debt obligations (1)	$	33,374	$	40,428
ABS and AR sales programs related expenses	4,832		12,981
Interest income	(2,803)		(4,592)

Three-Month Periods Ended Six-Month Periods Ended
September 27, 2019 September 28, 2018 September 27, 2019 September 28, 2018
(In thousands)
Interest expenses on debt obligations (1) $ 38,461
$ 35,139
$ 78,889
$ 68,656
ABS and AR sales programs related expenses 11,658
11,109
24,639
20,589
Interest income (5,206 ) (4,751 ) (9,798 ) (9,872 )
(Gain) Loss on foreign exchange transactions (3,167 ) 3,129
(4,053 ) 5,186


~~(1)~~	(1)Interest expense on debt obligations for the three-month and six-month periods ended September 27, 2019 include debt extinguishment costs of $2.4 million and $6.5 million, respectively, related to the full repayment of the Notes due February 2020 and partial repayment of Term Loan due November 2021.

~~9. OTHER CHARGES (INCOME), NET~~

~~During the six-month~~ period ended ~~September~~June 28, ~~2018,~~2019 include debt extinguishment costs of $4.1 million related to the ~~Company recognized other income~~partial repayments of ~~$80.4 million, primarily driven by an $87.3 million gain on~~ the ~~deconsolidation~~Notes due February 2020 and the Term Loan due November 2021. There were no debt extinguishment costs incurred during the first quarter of ~~Bright Machines.~~fiscal year 2021.

~~10.~~

8. FINANCIAL INSTRUMENTS

Foreign Currency Contracts

The Company enters into short-term and long-term foreign currency derivatives contracts, including forward, swap, and options contracts to hedge only those currency exposures associated with certain assets and liabilities, primarily accounts receivable and accounts payable, 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.

As of ~~September 27, 2019,~~June 26, 2020, the aggregate notional amount of the Company’s outstanding foreign currency derivative contracts was ~~$9.1~~$9.5 billion as summarized below:

Foreign Currency Amount Notional Contract Value in USD
Currency Buy Sell Buy
Sell
(In thousands)
Cash Flow Hedges

CNY 1,086,000
—
$ 152,447
$ —
EUR 34,640
4,260
38,352
4,668
HUF 27,209,000
—
89,151
—
ILS 190,000
—
54,247
—
JPY 33,525,000
—
300,000
—
MXN 4,035,000
—
206,441
—
MYR 264,000
40,900
63,187
9,789
PLN 131,400
—
32,862
—
RON 192,000
—
44,333
—
Other N/A
N/A
46,353
—

1,027,373
14,457
Other Foreign Currency Contracts

BRL —
972,000
—
232,619
CAD 65,885
43,154
49,627
32,505
CNY 5,214,716
1,371,026
738,250
192,837
EUR 1,820,719
2,011,008
1,997,855
2,209,684
GBP 45,292
56,241
56,026
69,547
HUF 80,227,683
84,751,497
262,868
277,690
ILS 264,700
115,000
75,575
32,834
INR 6,807,200
6,411,000
95,825
90,248
JPY 3,195,245
2,596,970
29,736
24,233
MXN 4,450,330
2,690,978
227,691
137,678
MYR 2,142,120
1,799,000
512,702
430,579
SEK 455,420
538,295
46,934
55,304
SGD 90,548
53,439
65,686
38,766
Other N/A
N/A
57,488
41,809

4,216,263
3,866,333

Total Notional Contract Value in USD

$ 5,243,636
$ 3,880,790

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	Foreign Currency Amount				Notional Contract Value in USD
Currency	Buy	Sell	Buy		Sell
	(In thousands)
Cash Flow Hedges

CNY	1,405,500	—	$	198,674	$	—




JPY	33,525,000	—	300,000		—
MXN	4,416,000	—	195,603		—




Other	N/A	N/A	341,318		34,874
			1,035,595		34,874
Other Foreign Currency Contracts
BRL	—	814,000	—		154,865


CNY	6,248,223	2,609,172	880,450		368,858
EUR	2,068,053	2,262,983	2,327,007		2,541,864
GBP	62,624	82,744	77,883		102,857
HUF	63,675,232	63,537,453	204,053		203,611
ILS	403,491	64,100	117,427		18,655
INR	5,500,000	6,495,390	72,630		85,722

MXN	3,885,763	2,446,456	172,117		108,364
MYR	1,163,860	934,940	272,222		218,679

SEK	652,526	734,086	68,873		78,835

Other	N/A	N/A	213,584		147,837
			4,406,246		4,030,147

Total Notional Contract Value in USD			$	5,441,841	$	4,065,021

As of ~~September 27, 2019,~~June 26, 2020, 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 condensed 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 currency 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, net in the condensed consolidated statements of operations. As of ~~September 27, 2019~~June 26, 2020 and March 31, ~~2019,~~2020, the Company also has included net deferred gains and losses in accumulated other comprehensive loss, a component of shareholders’ equity in the condensed consolidated balance sheets, relating to changes in fair value of its foreign currency contracts that are accounted for as cash flow hedges. Deferred ~~gains~~losses were immaterial as of ~~September 27, 2019,~~June 26, 2020, and are expected to be recognized primarily as a component of cost of sales in the condensed consolidated statements of operations primarily over the next twelve-month period, except for the USD JPY cross currency swap, which is further discussed below.

The Company 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 assets as of ~~September 27, 2019.~~June 26, 2020. The changes in fair value of the USD JPY cross currency swap are reported in accumulated other comprehensive loss, with the impact of the excluded component reported in interest and other, net. In addition, a corresponding amount is reclassified out of accumulated other comprehensive loss to interest and other, net to offset the remeasurement of the underlying JPY loan principal which also impacts the same line.

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The following table presents the fair value of the Company’s derivative instruments utilized for foreign currency risk management purposes:

Fair Values of Derivative Instruments
Asset Derivatives Liability Derivatives
Fair Value Fair Value
Balance Sheet
Location September 27,
2019 March 31,
2019 Balance Sheet
Location September 27,
2019 March 31,
2019
(In thousands)
Derivatives designated as hedging instruments

Foreign currency contracts Other current assets $ 2,492
$ 10,503
Other current liabilities $ 22,800
$ 10,282
Foreign currency contracts Other assets $ 18,316
$ —
Other liabilities $ —
$ —

Derivatives not designated as hedging instruments

Foreign currency contracts Other current assets $ 24,508
$ 16,774
Other current liabilities $ 23,327
$ 17,144


	Fair Values of Derivative Instruments
	Asset Derivatives								Liability Derivatives
		Fair Value							Fair Value
	Balance Sheet Location	June 26, 2020		March 31, 2020		Balance Sheet Location	June 26, 2020		March 31, 2020
	(In thousands)
Derivatives designated as hedging instruments
Foreign currency contracts	Other current assets	$	16,150	$	7,257	Other current liabilities	$	16,983	$	46,645
Foreign currency contracts	Other assets	$	15,314	$	13,849	Other liabilities	$	—	$	—

Derivatives not designated as hedging instruments
Foreign currency contracts	Other current assets	$	29,816	$	83,086	Other current liabilities	$	31,291	$	102,709

The Company has financial instruments subject to master netting arrangements, which ~~provides~~provide for the net settlement of all contracts with 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 condensed 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.

~~11.~~9. ACCUMULATED OTHER COMPREHENSIVE LOSS

The changes in accumulated other comprehensive loss by component, net of tax, are as follows:

Three-Month Periods Ended

September 27, 2019
September 28, 2018
Unrealized
loss on derivative
instruments and
other
Foreign currency
translation
adjustments
Total
Unrealized
loss on derivative
instruments and
other
Foreign currency
translation
adjustments
Total

(In thousands)
Beginning balance $ (47,031 )
$ (105,203 )
$ (152,234 )
$ (76,649 )
$ (94,185 )
$ (170,834 )
Other comprehensive gain (loss) before reclassifications (2,883 )
(25,907 )
(28,790 )
945

(6,622 )
(5,677 )
Net (gains) losses reclassified from accumulated other comprehensive loss (8,740 )
—

(8,740 )
20,130

—

20,130
Net current-period other comprehensive gain (loss) (11,623 )
(25,907 )
(37,530 )
21,075

(6,622 )
14,453
Ending balance $ (58,654 )
$ (131,110 )
$ (189,764 )
$ (55,574 )
$ (100,807 )
$ (156,381 )

Six-Month Periods Ended
September 27, 2019 September 28, 2018
Unrealized
loss on derivative
instruments and
other Foreign currency
translation
adjustments Total Unrealized
loss on derivative
instruments and
other Foreign currency
translation
adjustments Total
(In thousands)
Beginning balance $ (41,556 ) $ (109,607 ) $ (151,163 ) $ (35,746 ) $ (50,099 ) $ (85,845 )
Other comprehensive gain (loss) before reclassifications (8,951 ) (21,503 ) (30,454 ) (40,714 ) (50,708 ) (91,422 )
Net (gains) losses reclassified from accumulated other comprehensive loss (8,147 ) —
(8,147 ) 20,886
—
20,886
Net current-period other comprehensive gain (loss) (17,098 ) (21,503 ) (38,601 ) (19,828 ) (50,708 ) (70,536 )
Ending balance $ (58,654 ) $ (131,110 ) $ (189,764 ) $ (55,574 ) $ (100,807 ) $ (156,381 )


	Three-Month Periods Ended
	June 26, 2020										June 28, 2019
	Unrealized loss on derivative instruments and other		Foreign currency translation adjustments		Total		Unrealized loss on derivative instruments and other		Foreign currency translation adjustments		Total
	(In thousands)
Beginning balance	$	(81,663)	$	(133,004)	$	(214,667)	$	(41,556)	$	(109,607)	$	(151,163)
Other comprehensive gain (loss) before reclassifications	18,286		14,050		32,336		(6,068)		4,404		(1,664)
Net losses reclassified from accumulated other comprehensive loss	11,474		—		11,474		593		—		593
Net current-period other comprehensive gain (loss)	29,760		14,050		43,810		(5,475)		4,404		(1,071)
Ending balance	$	(51,903)	$	(118,954)	$	(170,857)	$	(47,031)	$	(105,203)	$	(152,234)

Substantially all unrealized losses relating to derivative instruments and other, reclassified from accumulated other comprehensive loss for the three-month ~~and six-month periods~~period ended ~~September 27, 2019~~June 26, 2020 were recognized as a component of cost of sales in the condensed consolidated statement of operations, which primarily relate to the Company’s foreign currency contracts accounted for as cash flow hedges.

~~12.~~

10. TRADE RECEIVABLES SECURITIZATION

The Company sells trade receivables under 2 asset-backed securitization programs and an accounts receivable factoring program.

Asset-Backed Securitization Programs

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The Company continuously sells 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% of~~ the receivables to unaffiliated financial institutions. ~~These~~Under these programs, ~~allow~~ the ~~operating subsidiaries to receive a cash payment and a deferred~~entire purchase price ~~receivable for~~of sold ~~receivables.~~receivables are paid in cash. The ~~portion~~ABS Programs contain guarantees of ~~the purchase price for the receivables which is not paid~~payment by ~~the unaffiliated financial institutions in cash is a deferred purchase price receivable, which is paid to~~ the special purpose ~~entity as payments on~~entities, in amounts equal to approximately the ~~receivables are collected from account debtors. The deferred purchase price receivable represents a beneficial interest in~~net cash proceeds under 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 assets as of September 27, 2019 and March 31, 2019, were carried at the expected recovery amount of the related receivables. The difference between the carrying amount of the receivables sold under these programs, and are collateralized by certain receivables held by the ~~sum of the cash and~~special purpose entities. The fair value of the ~~deferred purchase price receivables~~guarantee obligation was immaterial as of June 26, 2020 and March 31, 2020, respectively. The accounts receivable balances sold under the ABS Programs were removed from the condensed consolidated balance sheets and the cash proceeds received ~~at time of transfer is recognized~~by the Company were included as ~~a loss on sale of the related receivables, and recorded in interest and other, net~~cash provided by operating activities in the condensed 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 ~~has~~have 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 ~~$900~~$790 million for the Global Program, of which ~~$725~~$615 million is committed and $175 million is uncommitted, and ~~$250~~$285 million for the North American Program, of which $210 million is committed and ~~$40~~$75 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.~~

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 during the three-month ~~and six-month~~ periods ended ~~September 27,~~June 26, 2020 and June 28, 2019 ~~and September 28, 2018~~ were not material and are included in interest and other, net within the condensed 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, 0 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 ~~September 27, 2019~~June 26, 2020 and March 31, ~~2019, the accounts receivable balances that were sold under the ABS Programs were removed from the condensed consolidated balance sheets~~2020, approximately $0.1 billion and the net cash proceeds received by the Company during the six-month periods ended September 27, 2019 and September 28, 2018 were included as cash provided by operating activities in the condensed 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 condensed consolidated statements of cash flows separately as cash collections of deferred purchase price.

~~As of September 27, 2019, approximately $1.2~~$0.8 billion, respectively, of accounts receivable had been sold to the special purpose entities under the ABS Programs for which the Company had received net cash proceeds ~~of approximately $0.8 billion and deferred purchase price receivables of $0.4 billion. As of March 31, 2019, approximately $1.2 billion of accounts receivable had been sold to~~for the special purpose entities for which the Company had received net cash proceeds of $0.9 billion and deferred purchase price receivables of $0.3 billion. The deferred purchase price balances as of September 27, 2019 and March 31, 2019, also represent the non-cash beneficial interest obtained in exchange for securitized receivables.same amount.

For the ~~six-month~~three-month periods ended ~~September 27,~~June 26, 2020 and June 28, 2019, ~~and September 28, 2018,~~ cash flows from sales of receivables under the ABS Programs consisted of approximately ~~$3.2~~$2.7 billion and ~~$3.7~~$1.6 billion, respectively, for transfers of ~~receivables, and~~receivables. The three-month period ended June 28, 2019 also included approximately ~~$1.8~~$0.9 billion ~~respectively,~~ for collections on deferred purchase price ~~receivables.~~receivables (effective November 2019, the Company no longer holds a deferred purchase price receivables balance). The Company's cash flows from ~~transfer~~transfers 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 ~~$0.4~~$0.3 billion and ~~$0.5~~$0.4 billion as of ~~September 27, 2019~~June 26, 2020 and March 31, ~~2019,~~2020, respectively. For the ~~six-month~~three-month periods ended ~~September 27,~~June 26, 2020 and June 28, 2019, ~~and September 28, 2018,~~ total accounts receivable sold to certain third-party banking institutions was approximately ~~$0.9~~$0.3 billion and ~~$1.4~~$0.5 billion, respectively. The receivables that were sold were removed from the condensed consolidated balance sheets and the cash received ~~is reflected~~were included as cash provided by operating activities in the condensed consolidated statements of cash flows.

~~13.~~11. 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 - Applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

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 condensed consolidated balance

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sheets and include investments in equity securities that are valued using active market prices. There were no investments ~~balance~~ classified as level 1 in the fair value hierarchy as of ~~September 27, 2019.~~June 26, 2020.

Level 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’s deferred compensation plan assets also 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.

Level 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 ~~September 27, 2019~~June 26, 2020 and March 31, ~~2019.~~2020.

There were no transfers between levels in the fair value hierarchy during the ~~six-month~~three-month periods ended ~~September 27, 2019~~June 26, 2020 and ~~September~~June 28, ~~2018.~~2019.

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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:~~basis as of June 26, 2020 and March 31, 2020:

Fair Value Measurements as of September 27, 2019
Level 1 Level 2 Level 3 Total
(In thousands)
Assets:

Money market funds and time deposits (included in cash and cash equivalents of the condensed consolidated balance sheet) $ —
$ 796,718
$ —
$ 796,718
Foreign exchange contracts (Note 10) —
45,316
—
45,316
Deferred compensation plan assets:

0
Mutual funds, money market accounts and equity securities —
56,351
—
56,351
Liabilities:

0.003
Foreign exchange contracts (Note 10) $ —
$ (46,127 ) $ —
$ (46,127 )

Fair Value Measurements as of March 31, 2019
Level 1 Level 2 Level 3 Total
(In thousands)
Assets:

Money market funds and time deposits (included in cash and cash equivalents of the condensed consolidated balance sheet) $ —
$ 473,888
$ —
$ 473,888
Foreign exchange contracts (Note 10) —
27,277
—
27,277
Deferred compensation plan assets:

0
Mutual funds, money market accounts and equity securities 2,845
76,852
—
79,697
Liabilities:

0
Foreign exchange contracts (Note 10) $ —
$ (27,426 ) $ —
$ (27,426 )


	Fair Value Measurements as of June 26, 2020
	Level 1		Level 2		Level 3		Total
	(In thousands)
Assets:
Money market funds and time deposits (included in cash and cash equivalents of the condensed consolidated balance sheet)	$	—	$	1,656,647	$	—	$	1,656,647

Foreign currency contracts (Note 8)	—		61,280		—		61,280

Deferred compensation plan assets:							0
Mutual funds, money market accounts and equity securities	—		53,837		—		53,837
Liabilities:
Foreign currency contracts (Note 8)	$	—	$	(48,274)	$	—	$	(48,274)



	Fair Value Measurements as of March 31, 2020
	Level 1		Level 2		Level 3		Total
	(In thousands)
Assets:
Money market funds and time deposits (included in cash and cash equivalents of the condensed consolidated balance sheet)	$	—	$	403,657	$	—	$	403,657

Foreign currency contracts (Note 8)	—		104,192		—		104,192
Deferred compensation plan assets:							0
Mutual funds, money market accounts and equity securities	—		49,086		—		49,086
Liabilities:							0
Foreign currency contracts (Note 8)	$	—	$	(149,354)	$	—	$	(149,354)

Other financial instruments

The following table presents the Company’s major debts not carried at fair value:

As of September 27, 2019
As of March 31, 2019

Carrying
Amount
Fair
Value
Carrying
Amount
Fair
Value
Fair Value
Hierarchy
(In thousands)
4.625% Notes due February 2020 —
—
500,000
499,950
Level 1
Term Loan due November 2021 421,563

423,671

671,563
670,724

Level 1
Term Loan, including current portion, due in installments through June 2022 452,250
453,946
458,531
457,958
Level 1
5.000% Notes due February 2023 500,000

533,977

500,000
499,950

Level 1
Term Loan due April 2024 - three-month Yen LIBOR plus 0.50% 311,224
311,224
—
—
Level 2
4.750% Notes due June 2025 597,037

637,084

596,815
599,940

Level 1
4.875% Notes due June 2029 448,277
473,116
—
—
Level 1
India Facilities 110,258
110,258
170,206
170,206
Level 2
Euro Term Loan due September 2020 50,679
50,679
52,746
52,746
Level 2
Euro Term Loan due January 2022 109,577
109,577
112,524
112,524
Level 2
Total $ 3,000,865

$ 3,103,532

$ 3,062,385

$ 3,063,998


	As of June 26, 2020			As of March 31, 2020
	Carrying Amount	Fair Value	Carrying Amount	Fair Value	Fair Value Hierarchy
	(In thousands)
Term Loan, including current portion, due in installments through June 2022	433,406	433,363	433,406	413,903	Level 1
5.000% Notes due February 2023	500,000	535,591	500,000	499,710	Level 1
Term Loan due April 2024 - three-month Yen LIBOR plus 0.500%	313,596	313,596	310,115	310,115	Level 2
4.750% Notes due June 2025	597,380	663,623	597,265	613,152	Level 1
3.750% Notes due February 2026	423,411	449,958	—	—	Level 1
4.875% Notes due June 2029	661,610	734,043	661,908	628,419	Level 1
4.875% Notes due May 2030	323,595	358,899	—	—	Level 1
Euro Term Loans	212,678	212,678	207,646	207,646	Level 2
India Facilities	138,238	138,238	138,238	138,238	Level 2

The Term Loan due June 2022, and the Notes due February 2023, June 2025, February 2026, June 2029 and May 2030 are valued based on broker trading prices in active markets.

The Company values its Term Loan due April 2024, India Facilities, and Euro Term Loans due September 2020, March 2021, and January 2022 based on the current market rate, and as of ~~September 27, 2019,~~June 26, 2020, the carrying amounts approximate fair values.

~~The Term Loans due November 2021 and June 2022, and the Notes due February 2020, February 2023, June 2025 and June 2029 are valued based on broker trading prices in active markets.~~

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~~14.~~12. COMMITMENTS AND CONTINGENCIES

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 for any individual matter 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 have 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 its 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 IP 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 or products, or that enable the Company's use of third-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~~have agreed in principle to ~~this claim or estimate~~ an ~~amount or reasonable range of loss, a material loss is reasonably possible.~~immaterial settlement.

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. On September 26, 2019, the Court appointed a new lead plaintiff and lead plaintiff’s counsel in the case. ~~Lead plaintiff’s deadline to file~~On November 8, 2019, lead plaintiff filed a further amended ~~complaint is November 8,~~complaint. On December 4, 2019, Defendants filed a motion to dismiss the amended complaint. On May 29, 2020, the Court granted Defendants’ motion to dismiss without prejudice and gave lead plaintiff 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. Defendants’ ~~deadline to move~~motion to dismiss is set for hearing on December ~~4, 2019.~~3, 2020. The Company believes that the claims are without merit and intends to vigorously defend this case.

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

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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 preference 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.

One of the Company's Brazilian subsidiaries has received assessments for certain sales and import taxes. There ~~are~~were originally 6 tax assessments totaling ~~360~~373.7 million Brazilian reals (approximately USD ~~$86.2~~$71.1 million based on the exchange rate as of ~~September 27, 2019)~~June 26, 2020). ~~The~~Four of the assessments are in various stages of the review process at the administrative level; the Company successfully defeated one of the six assessments in September 2019 ~~(totally~~(totaling approximately 5460.5 million Brazilian reals or USD ~~$12.9~~$11.5 million)~~, but~~; 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 Sao Paolo, Brazil on March 23, 2020; the value of that assessment is 33.9 million Brazilian reals (approximately USD $6.4 million). The Company believes there is no legal basis for any of these assessments and has meritorious ~~defenses and~~defenses. 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 several 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. The Company has initiated an internal investigation regarding this matter which is ongoing. The Company ~~cannot predict how long it will take~~expects to complete the investigation orand report to ~~what extent~~OFAC by the end of the second quarter of fiscal year 2021, and it is 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 $94 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.

A different foreign Tax Authority has issued a letter against one of the Company’s legal entities asserting that the entity did not meet the qualification criteria for tax holiday status for the periods fiscal year 2006 through fiscal year 2013. The asserted additional tax and penalty is approximately $80 million. The Company disagrees with the Tax Authority’s assertion and is actively contesting through administrative processes and will defend through judicial processes if necessary.

As the final ~~resolution~~resolutions of the ~~assessment remains~~above items remain 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 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.

~~15.~~13. SHARE REPURCHASES

During the ~~three and six-month periods~~three-month period ended ~~September 27, 2019,~~June 26, 2020, the Company ~~repurchased 5.9 million and 11.0 million shares at an aggregate purchase price~~made no repurchases of ~~$60.2 million and $112.2 million, respectively, 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 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 20, 2019. As of ~~September 27, 2019,~~June 26, 2020, shares in the aggregate amount of ~~$463.0~~$315.2 million were available to be repurchased under the current plan.

~~16.~~

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14. SEGMENT REPORTING

In March 2020, the Company announced a change in organizational structure as part of its strategy to further drive efficiency and productivity with two focused delivery models. The Company’s chief operating decision maker ("CODM") changed from the CEO and certain direct staff who oversee operations of the business, to the CEO herself. As a result, beginning in fiscal year 2021, the Company now reports its financial performance based on two operating and reportable segments, Flex Agility Solutions (“FAS”) and Flex Reliability Solutions (“FRS”) and analyzes operating income as the measure of segment profitability.

The FAS segment is optimized for speed to market at any volume based on a highly flexible supply and manufacturing system. The Company ~~has 4 reportable segments: HRS, IEI,~~realigned the majority of the customers under the former CEC and ~~CTG. These~~CTG segments ~~are determined~~under the new FAS segment. Certain customers that were in the former Industrial segment that meet the above delivery model were also consolidated into the FAS segment. FAS is now comprised of the following end markets that represent reportable units:

•Consumer Devices, including mobile and high velocity consumer devices;

•Lifestyle, including appliances, consumer packaging, floorcare, micro mobility and audio; and

•Communications, Enterprise and Cloud ("CEC"), including data infrastructure, edge infrastructure and communication infrastructure.

The FRS segment is optimized for longer product lifecycles requiring complex ramps at any volume with specialized production models and critical environments. The Company consolidated the majority of its customers under the former HRS and IEI segments into the new FRS segment.FRS is now comprised of the following end markets that represent reportable units:

•Automotive, including autonomous, connectivity, electrification, and smart technologies;

•Health Solutions, including medical devices, medical equipment and drug delivery; and

•Industrial, including capital equipment, industrial devices, renewable and grid edge, and power systems.

The determination of the FAS and FRS segments is 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.~~

amortization of intangibles, stock-based compensation, customer related asset impairment charges, restructuring charges, ~~the new revenue standard adoption impact,~~ legal and other, interest and other, ~~net and other charges (income),~~ net.

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Selected financial information by segment is in the table below. Fiscal year 2020 historical information has been recast to reflect the new operating and reportable segments in Item 2, "Management's Discussion and Analysis of Financial Condition and Results of Operations."

Three-Month Periods Ended Six-Month Periods Ended
September 27, 2019 September 28, 2018 September 27, 2019 September 28, 2018
(In thousands)
Net sales:
High Reliability Solutions $ 1,188,631
$ 1,207,971
$ 2,366,674
$ 2,423,396
Industrial & Emerging Industries 1,785,568
1,565,953
3,422,482
3,012,264
Communications & Enterprise Compute 1,728,597
2,140,797
3,587,446
4,095,083
Consumer Technologies Group 1,385,258
1,747,883
2,887,391
3,530,817
$ 6,088,054
$ 6,662,604
$ 12,263,993
$ 13,061,560
Segment income and reconciliation of income before tax:
High Reliability Solutions $ 83,400
$ 89,589
$ 170,632
$ 183,123
Industrial & Emerging Industries 111,354
65,857
206,811
117,218
Communications & Enterprise Compute 31,634
62,855
57,781
108,873
Consumer Technologies Group 26,992
31,212
57,108
57,769
Corporate and Other (26,238 ) (25,983 ) (57,330 ) (55,745 )
Total segment income 227,142
223,530
435,002
411,238
Reconciling items:
Intangible amortization 16,223
18,234
33,305
36,751
Stock-based compensation 18,890
19,081
34,117
40,034
Customer related asset impairments (1) 90,973
—
91,456
17,364
Restructuring charges (Note 17) 128,315
25,773
184,507
34,590
New revenue standard adoption impact (Note 4) —
—
—
9,291
Legal and other (2) 19,538
4,058
21,148
20,369
Interest and other, net 47,749
41,060
99,443
82,802
Other charges (income), net (Note 9) 1,147
6,530
2,610
(80,394 )
Income (loss) before income taxes $ (95,693 ) $ 108,794
$ (31,584 ) $ 250,431

~~(1)~~

Customer related asset impairments for the three-month and six-month periods ended September 27, 2019 primarily relate to additional provision for doubtful accounts receivable, 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 as the Company reduces its exposure to certain higher volatility businesses.


	Three-Month Periods Ended
	June 26, 2020		June 28, 2019
	(In thousands)
Net sales:
Flex Agility Solutions	$	2,912,030	$	3,908,176
Flex Reliability Solutions	2,241,303		2,267,763
	$	5,153,333	$	6,175,939
Segment income and reconciliation of income before tax:
Flex Agility Solutions	$	71,807	$	108,958
Flex Reliability Solutions	114,737		129,994
Corporate and Other	(23,672)		(31,092)
Total segment income	162,872		207,860
Reconciling items:
Intangible amortization	15,176		17,082
Stock-based compensation	12,769		15,227
Customer related asset impairments	(76)		483
Restructuring charges (Note 15)	9,682		56,192


Legal and other (1)	27,681		1,610
Interest and other, net	30,257		53,157

Income before income taxes	$	67,383	$	64,109

Customer related asset impairments for the six-month period ended September 28, 2018 relate to additional provision for doubtful accounts receivable and reserves on inventory for certain customers experiencing financial difficulties.(1)


~~(2)~~	Legal and other during the three-month and six-month periods ended September 27, 2019 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.

Legal and other during the ~~three and six-month periods~~three-month period ended ~~September 28, 2018 primarily~~June 26, 2020 consists of costs ~~incurred~~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. During the ~~independent investigation undertaken by~~first quarter of fiscal year 2021, the ~~Audit Committee of the Company’s Board of Directors which was completed in June 2018.~~Company accrued for certain loss contingencies where losses are considered probable and estimable.

Corporate and other primarily includes corporate services costs that are not included in the ~~Chief Operating Decision Maker's ("CODM")~~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 operations and include manufacturing and design facilities. Most of the underlying manufacturing and design assets are co-mingled on 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 segments nor reported by segment to the Company's CODM.

~~17.~~

15. RESTRUCTURING CHARGES

~~During fiscal year 2019,~~In order to support the Company’s strategy and build a sustainable organization, and after considering that the economic recovery from the pandemic will be slower than anticipated, the Company ~~took~~has identified and is engaging in certain structural changes. These restructuring actions ~~to optimize~~will eliminate non-core activities primarily within the Company’s corporate function, align the Company’s cost structure with its ~~portfolio with greater~~reorganizing and optimizing of its operations model along its 2 reporting segments, and further sharpen its focus to ~~be placed on higher margin, less volatile businesses.~~ winning business in end markets where it has competitive advantages and deep domain expertise. During the three-month period ended June 26, 2020, the Company recognized approximately $9.7 million of restructuring charges, most of which related to employee severance.

During the first ~~half~~quarter of fiscal year 2020 in connection with ~~the recent~~ 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 the ~~three and six-month periods~~three-month period ended ~~September 27,~~June 28, 2019, the Company recognized ~~$128.3~~$56.2 million ~~and $184.5 million, respectively,~~ of restructuring ~~charges. The Company incurred cash~~

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charges, comprised of approximately ~~$97.0~~$30.8 million ~~and $127.8 million, respectively, that were~~of cash charges predominantly for employee severance, and $25.4 million of non-cash charges ~~of $31.3 million and $56.7 million, respectively, primarily~~ related to ~~asset impairments during the three~~impairment of equipment and ~~six-month periods ended September 27, 2019. The Company expects to complete these activities during fiscal year 2020.~~

During the three and six-month periods ended September 28, 2018, the Company recognized $25.8 million and $34.6 million, respectively, for charges primarily associated with the wind down of its NIKE operations in Mexico, the majority of which were for non-cash asset impairments.inventory.

The following table summarizes the provisions, respective payments, and remaining accrued balance as of ~~September 27, 2019~~June 26, 2020 for charges incurred during the ~~six-month~~three-month period ended ~~September 27, 2019:~~June 26, 2020:


	Severance		Long-Lived Asset Impairment		Other Exit Costs		Total
	(In thousands)
Balance as of March 31, 2020	$	19,502	$	—	$	3,900	$	23,402
Provision for charges incurred during the three-month period ended June 26, 2020	6,538		3,508		(364)		9,682
Cash payments for charges incurred in the fiscal year 2020 and prior	(11,187)		—		(197)		(11,384)
Cash payments for charges incurred during the three-month period ended June 26, 2020	(1,273)		—		—		(1,273)
Non-cash charges incurred during the three-month period ended June 26, 2020	—		(3,508)		971		(2,537)

Balance as of June 26, 2020	13,580		—		4,310		17,890
Less: Current portion (classified as other current liabilities)	13,580		—		4,310		17,890
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, 2019 $ 23,234
$ —
$ 9,200
$ 32,434
Provision for charges incurred during the six-month period ended September 27, 2019 91,857
44,621
48,029
184,507
Cash payments for charges incurred in the fiscal year 2019 and prior (10,899 ) —
(2,260 ) (13,159 )
Cash payments for charges incurred during the six-month period ended September 27, 2019 (76,453 ) —
(552 ) (77,005 )
Non-cash charges incurred during the six-month period ended September 27, 2019 —
(44,621 ) (13,073 ) (57,694 )
Balance as of September 27, 2019 27,739
—
41,344
69,083
Less: Current portion (classified as other current liabilities) 27,739
—
41,344
69,083
Accrued restructuring costs, net of current portion (classified as other liabilities) $ —
$ —
$ —
$ —

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Unless otherwise specifically stated, references in this report to “Flex,” “the Company,” “we,” “us,” “our” and similar terms mean Flex Ltd., and its subsidiaries.

This report on Form 10-Q contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, 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 to these forward-looking statements to reflect events or circumstances occurring subsequent to filing this Form 10-Q with the Securities and Exchange Commission. These forward-looking statements are subject to risks and uncertainties, including, without limitation, those risks and uncertainties discussed in this section, as well as any risks and uncertainties discussed in Part II, Item 1A, “Risk Factors” of this report on Form 10-Q, and in Part I, Item 1A, “Risk Factors” and in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended March 31, ~~2019.~~2020. 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.

We are the manufacturing partner of choice that helps a ~~globally-recognized, provider~~diverse customer base design and build products that improve the world. Through the collective strength of ~~Sketch-to-Scale~~^tm ~~services - innovative design, engineering, manufacturing,~~a global workforce across approximately 30 countries and responsible, sustainable operations, the Company delivers technology innovation, supply chain, ~~services~~ and manufacturing solutions ~~- from conceptual sketch~~ to ~~full-scale production. We design, build, ship and service complete packaged consumer and enterprise products, for companies of all sizes in various~~diverse industries and ~~end-markets, through our activities~~end markets. In the first quarter of fiscal year 2021, the Company made certain changes in its organization structure as part of its strategy to further drive efficiency and productivity with two focused delivery models. As a result, the Company now reports its financial performance based on two reportable segments:

•Flex Agility Solutions ("FAS"), which is comprised of the following ~~segments:~~end markets:

◦Lifestyle, including appliances, consumer packaging, floorcare, micro mobility and audio; and

◦Communications, Enterprise and Cloud ("CEC"), including data infrastructure, edge infrastructure and communication infrastructure.

•Flex Reliability Solutions ("FRS"), which is comprised of the following end markets:

◦Automotive, including autonomous, connectivity, electrification, and smart technologies;

◦Health Solutions, including medical devices, medical equipment and drug delivery; and

◦Industrial, including capital equipment, industrial devices, renewable and grid edge, and power systems.

Refer to "note 14 - Segments Reporting,” to the condensed consolidated financial statements for additional information on the changes in operating and reportable segments.

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.

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's supply chain solutions 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 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.

~~During fiscal year 2019, we took actions to optimize our portfolio with greater focus to be placed on higher margin, less volatile businesses. During the~~ first ~~half~~quarter of fiscal year 2020 in connection with ~~the recent~~ geopolitical developments and uncertainties at the time, primarily impacting one customer in China, we experienced a reduction in demand for products assembled for that customer. As a result, we accelerated our strategic decision to reduce our exposure to certain high-volatility products in both China and India. We also initiated targeted activities to restructure our business to further reduce and streamline our cost structure. ~~We recognized $185 million of charges during~~During the first ~~half~~quarter of fiscal year ~~2020, comprised of approximately $128 million of cash charges predominantly for employee severance,~~2021, in order to support the Company’s strategy and ~~$57 million of non-cash charges primarily related to asset impairments. While~~build a sustainable organization, and after considering that the ~~bulk of~~economic recovery from the ~~restructuring charges were executed~~pandemic will be slower than anticipated, the Company has identified and is engaging in ~~the first half of fiscal year 2020, we expect to incur~~

~~additional restructuring charges throughout the remainder of fiscal year 2020, with the expectation to complete these activities by the end of the fiscal year.~~certain structural changes.

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

As anticipated, our results were negatively impacted by COVID-19 disruptions to our factories, workforce, and suppliers. In the first quarter our COVID-19 related costs roughly doubled sequentially from the March quarter to over $100 million as the impact from the pandemic extended throughout the entire quarter. These costs are primarily comprised of enhanced health and safety protocols, incremental labor incentives, incremental supply chain costs and forced under-absorption of idle and underutilized labor and overhead costs. While we expect that these incremental costs will persist in our second quarter, we believe that these incremental costs will be significantly lower as demand improves.

The decrease in sales during the three-month period ended June 26, 2020 was also impacted by demand pressures and disruptions due to COVID-19. Other than our Health Solutions and Industrial businesses which performed well during the quarter, our other businesses were impacted by demand pressures and disruptions, most notably our automotive business where our automotive facilities were closed for nearly half of the quarter due to shutdowns by our automotive customers. While we anticipate revenue to improve across our end markets, we believe that our businesses tied to consumer spending, such as Lifestyle and Consumer Devices, will continue to be impacted if there is a prolonged demand slowdown. Refer to “Risk actors - 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,” as disclosed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended March 31, 2020.

As part of our continuous response to the outbreak, we have maintained salary cuts, furloughs and other programs to cut costs initiated at the beginning of our first quarter, including aggressively reducing discretionary corporate spend. Employees that have been operating on a work-from-home basis are continuing to do so. Further, to support our strategy and build a sustainable organization, and after considering that the economic recovery will be slower than anticipated, we have identified and are engaging in certain structural changes. See additional discussion regarding these restructuring actions below under "Restructuring charges".

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.

We are one of the world's largest providers of global supply chain solutions, with revenues of ~~$12.3~~$5.2 billion for the ~~six-month~~three-month period ended ~~September 27, 2019~~June 26, 2020 and ~~$26.2~~$24.2 billion in fiscal year ~~2019.~~2020. The following tables set forth the relative percentages and dollar amounts of net sales and net property and equipment, by country, based on the location of our manufacturing ~~sites:~~

Three-Month Periods Ended Six-Month Periods Ended
Net sales: September 27, 2019 September 28, 2018 September 27, 2019 September 28, 2018
(In millions)
China $ 1,446
24 % $ 1,730
26 % $ 2,897
24 % $ 3,400
26 %
Mexico 1,158
19 % 1,179
18 % 2,237
18 % 2,291
18 %
U.S. 907
15 % 782
12 % 1,711
14 % 1,288
10 %
Brazil 489
8 % 533
8 % 1,044
9 % 1,120
9 %
Malaysia 408
7 % 550
8 % 834
7 % 1,018
8 %
India 304
5 % 421
6 % 793
6 % 884
7 %
Other 1,376
22 % 1,468
22 % 2,748
22 % 3,061
22 %
$ 6,088

$ 6,663

$ 12,264

$ 13,062

~~Amounts~~sites (amounts may not sum due to ~~rounding.~~rounding):

In the accompanying condensed consolidated statements of operations $26.8 million and $29.0 million of expenses incurred in the three-month and six-month periods ended September 28, 2018, respectively, that were previously included as cost of sales have been reclassified as restructuring charges to conform with the current period presentation. Also, as previously disclosed, we have made certain immaterial corrections to net sales previously reported for the first and second quarters of fiscal year 2019 primarily to reflect revenue from certain contracts with customers on a net basis. As a result of correcting these errors, net sales and cost of sales in the accompanying Condensed Consolidated Statement of Operations for the three-month and six-month periods ended September 28, 2018 have been reduced by $48 million and $73 million, respectively, from previously reported amounts. These corrections had no impact on gross profit, segment income or net income for the periods presented.


	Three-Month Periods Ended
Net sales:	June 26, 2020						June 28, 2019
	(In millions)
China	$	1,417	27	%	$	1,450	23	%
Mexico	907		18	%	1,079		17	%
U.S.	869		17	%	804		13	%
Brazil	322		6	%	555		9	%
Malaysia	299		6	%	427		7	%
Hungary	250		5	%	321		5	%
Israel	187		4	%	184		3	%
Other	902		17	%	1,356		23	%
	$	5,153			$	6,176

~~Amounts may not sum due to rounding.~~


	As of						As of
Property and equipment, net:	June 26, 2020						March 31, 2020
	(In millions)
Mexico	$	543	25	%	$	555	25	%
China	375		17	%	396		18	%
U.S.	375		17	%	378		17	%
India	199		9	%	207		9	%
Malaysia	106		5	%	111		5	%
Hungary	98		5	%	100		4	%
Other	467		22	%	469		22	%
	$	2,163			$	2,216

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 offer our customers the ability to simplify their global product development, manufacturing process, and after 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 or other supply chain related constraints including as a result of the COVID-19 pandemic;

•the effects of the COVID-19 pandemic on our business and results of operations;

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

•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 pandemic) 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;

•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;~~

•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 trade regulations and treaties.

We are also subject to other risks as ~~outline~~outlined in ~~Part II, Item 1A, “Risk Factors” and~~ Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended March 31, ~~2019.~~2020.

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, there has been and 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 COVID-19. These estimates may change, as new events occur, and additional information is obtained. Actual results may differ from those estimates and assumptions.

Refer to the accounting policies under 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, ~~2019,~~2020, where we discuss our more significant judgments and estimates used in the preparation of the condensed consolidated financial statements. ~~There were no changes to our accounting policies other than the adoption of ASC 842, as discussed below.~~

We are a lessee with several non-cancellable operating leases, primarily for warehouses, buildings, and other assets such as vehicles and equipment. We determine 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 customer has the right to control the use of the identified asset.

Beginning with the adoption of ASC 842 on April 1, 2019, we recognize a right-of-use (“ROU”) asset and a lease liability at the lease commencement date for our operating leases. For operating leases, the lease liability is initially and subsequently measured at the present value of the unpaid lease payments at the lease commencement date. We have elected the short-term lease recognition and measurement exemption for all classes of assets, which allows us to not recognize ROU assets and lease liabilities for leases with a lease term of 12 months or less and with no purchase option we are reasonably certain of exercising. We have also elected the practical expedient to account for the lease and nonlease 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 we cannot determine the interest rate implicit in the lease for our leases, as such we use our estimate of the incremental borrowing rate as of the commencement date in determining the present

value of lease payments. Our 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 our 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 we are reasonably certain to exercise, or an option to extend (or not to terminate) the lease controlled by the lessor.

RESULTS OF OPERATIONS

The following table sets forth, for the periods indicated, certain statements of operations data expressed as a percentage of net sales. The financial information and the discussion below should be read together with the condensed consolidated financial statements and notes thereto included in this document. In addition, reference should be made to our audited consolidated financial statements and notes thereto and related Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our ~~2019~~2020 Annual Report on Form 10-K. As previously disclosed, we made certain changes in our organization structure. As a result of these changes, we revised our reportable segments as further discussed in note 14 to the condensed consolidated financial statements. There was no change to our condensed consolidated financial statements. For comparability purposes, segment reporting for the prior period has been recast to conform to the current presentation.

The following table sets forth our net sales by segment and their relative percentages:

Amounts may not sum due to rounding.

Net sales during the three-month period ended ~~September 27, 2019~~June 26, 2020 totaled ~~$6.1~~$5.2 billion, representing a decrease of approximately ~~$575 million,~~$1.0 billion, or 9%17% from ~~$6.7~~$6.2 billion during the three-month period ended ~~September~~June 28, ~~2018.~~2019. The decrease in sales ~~was driven by softness across~~impacted both of our segments ~~with the exception of our IEI segment.~~reflecting significant COVID-19 demand and production pressure. Our ~~CTG~~FAS segment decreased $363 million, primarily resulting from our continued active pruning of underperforming customers and product categories coupled with a reduction and delay in demand with certain customers in India. Our CEC segment decreased $412$996 million, driven by ~~reduced~~lower demand in all of the end markets we serve, and more specifically in our ~~networking and telecommunication~~Consumer Devices business, further impacted by COVID-19 related supply chain constraints, coupled with our targeted disengagement of high volatility, short cycle businesses ~~due to~~we launched in the ~~slower roll-out of 5G technology and our previously announced disengagement with a customer primarily in China and India.~~prior year. Our ~~HRS~~FRS segment modestly decreased ~~$19~~$27 million, primarily due to ~~lower demand in our health solution business, partially offset by ramps in~~disruptions directly impacting our automotive ~~business. These declines were offset by a $220 million increase in our IEI segment, mainly driven by strong sales within our home~~business towards the end of fiscal year 2020 and ~~lifestyle business in addition to growth in our solar energy business that~~extending throughout the first quarter of fiscal year 2021. That decline more than offset ~~declines~~increases in ~~capital equipment demand.~~sales in both of our Health Solution and Industrial businesses. Net sales decreased ~~$597~~$566 million to ~~$2.4~~$2.0 billion in Asia, ~~$47~~$355 million to ~~$1.1 billion in Europe, offset by a modest increase of $70 million to $2.6~~$2.1 billion in the ~~Americas.~~

Net sales during the six-month period ended September 27, 2019 totaled $12.3 billion, representing a decrease of approximately $798 million, or 6% from $13.1 billion during the six-month period ended September 28, 2018. As noted above, the decrease in net sales was notable across all our segments with the exception of our IEI segment, driven by a $0.6 billion decrease in CTG, a $0.5 billion decrease in CECAmericas, and ~~a $0.4 billion increase in IEI due to the same factors described above. Net sales decreased $891~~$102 million to ~~$4.9~~$1.0 billion in ~~Asia, and $88 million to $2.3 billion in Europe, offset by an increase of $181 million to $5.0 billion in the Americas.~~Europe.

Our ten largest customers, during the ~~three and six-month~~three-month periods ended ~~September 27,~~June 26, 2020 and June 28, 2019, accounted for approximately 39% ~~of net sales, respectively. Our ten largest customers, during the three~~ and ~~six-month periods ended September 28, 2018, accounted for approximately 43%~~42% of net sales, respectively. No customer accounted for more than 10% of net sales during the ~~three and six-month~~three-month periods ended ~~September 27, 2019~~June 26, 2020 or ~~September~~June 28, ~~2018.~~2019.

Gross profit is affected by a number of factors, including the number and size of new manufacturing programs, product mix, component costs and availability, product life cycles, unit volumes, pricing, competition, new product introductions, capacity utilization and the expansion or consolidation of manufacturing facilities, as 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 during the three-month period ended ~~September 27, 2019~~June 26, 2020 decreased ~~$213~~$49 million to ~~$189~~$304 million, or ~~3.1%~~5.9% of net sales, from ~~$402~~$353 million, or ~~6.0%~~5.7% of net sales, during the three-month period ended ~~September~~June 28, ~~2018.~~2019, driven by the lower sales referred

to above. Gross ~~profit~~margin improved 20 basis points during the ~~six-month~~same period primarily resulting from lower restructuring costs for the three-month period ended September 27, 2019 decreased $238 million to $542 million, or 4.4% of net sales, from $780 million, or 5.9% of net sales, during the six-month period ended September 28, 2018. Gross margin deteriorated 290 basis points and 150 basis points, respectively, during the three-month and six-month periods ended September 27, 2019. The decrease in both gross profit and gross margin is primarily dueJune 26, 2020, compared to the ~~geopolitical challenges and uncertainties which impacted specific customers resulting in restructuring charges recorded in the first half of fiscal~~prior year 2020 as well as the current quarter write down of inventory that will not be recovered due to significant reductions in future customer demand as we reduce our exposure to certain higher volatility businesses. These were partially offset by the favorable product mix and the increased revenues from our IEI segment, the wind-down of our NIKE Mexico operations in the second half of fiscal year 2019, and benefits realized from our earlier restructuring activities initiated in fiscal year 2019.period.

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 impairment charges, restructuring charges, ~~the new revenue standard adoption impact,~~ legal and other, interest and other, ~~net and other charges (income),~~ net. A portion of depreciation is allocated to the respective segment, together with other general corporate research and development and administrative expenses.

The following table sets forth segment income and ~~margins. Historical information has been recast~~margins (amounts may not sum due to ~~reflect realignment of customers and/or products between segments:~~rounding):


	Three-Month Periods Ended
	June 26, 2020						June 28, 2019
	(In millions)
Segment income and reconciliation of income before tax:
Flex Agility Solutions	$	72	2.5	%	$	109	2.8	%
Flex Reliability Solutions	115		5.1	%	130		5.7	%
Corporate and Other	(24)				(31)
Total segment income	163		3.2	%	208		3.4	%
Reconciling items:
Intangible amortization	15				17
Stock-based compensation	13				15

Restructuring charges (Note 15)	10				56


Legal and other (1)	28				2
Interest and other, net	30				53

Income before income taxes	$	67			$	64

Three-Month Periods Ended Six-Month Periods Ended
September 27, 2019 September 28, 2018 September 27, 2019 September 28, 2018
(In millions)
Segment income and reconciliation of income before tax:
High Reliability Solutions $ 83
7.0 % $ 90
7.4 % $ 171
7.2 % $ 183
7.6 %
Industrial & Emerging Industries 111
6.2 % 66
4.2 % 207
6.0 % 117
3.9 %
Communications & Enterprise Compute 32
1.8 % 63
2.9 % 58
1.6 % 109
2.7 %
Consumer Technologies Group 27
1.9 % 31
1.7 % 57
2.0 % 58
1.6 %
Corporate and Other (26 ) (26 ) (57 ) (56 )
Total segment income 227
3.7 % 224
3.3 % 435
3.5 % 411
3.1 %
Reconciling items:
Intangible amortization 16
18
33
37

Stock-based compensation 19
19
34
40

Customer related asset impairments (1) 91
—
91
17

Restructuring charges (Note 17) 128
26
185
35

New revenue standard adoption impact (Note 4) —
—
—
9

Legal and other (2) 20
4
21
20

Interest and other, net 48
41
99
83

Other charges (income), net (Note 9) 1
7
3
(80 )
Income (loss) before income taxes $ (96 ) $ 109
$ (32 ) $ 250

Amounts may not sum due to rounding.



Singapore						Not Applicable
(State or other jurisdiction of						(I.R.S. Employer
incorporation or organization)						Identification No.)



2 Changi South Lane,
Singapore						486123
(Address of registrant’s principal executive offices)						(Zip Code)


	As of June 26, 2020		As of March 31, 2020
	(In thousands, except share amounts) (Unaudited)


ASSETS
Current assets:
Cash and cash equivalents	$	1,935,081	$	1,922,686
Accounts receivable, net of allowance of $95,406 and $95,930, respectively	3,280,837		2,435,982
Contract assets	306,198		282,444
Inventories	3,483,475		3,785,073
Other current assets	556,786		660,085
Total current assets	9,562,377		9,086,270
Property and equipment, net	2,162,715		2,215,991
Operating lease right-of-use assets, net	611,047		605,070
Goodwill	1,074,604		1,064,553
Other intangible assets, net	250,455		262,418
Other assets	471,870		455,315
Total assets	$	14,133,068	$	13,689,617

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Bank borrowings and current portion of long-term debt	$	162,287	$	149,130
Accounts payable	4,595,409		5,108,251
Accrued payroll	390,544		363,644

Other current liabilities	1,647,011		1,590,060
Total current liabilities	6,795,251		7,211,085
Long-term debt, net of current portion	3,423,162		2,689,109
Operating lease liabilities, non-current	539,441		528,967
Other liabilities	435,609		429,303

Shareholders’ equity

Ordinary shares, 0 par value; 550,585,570 and 547,665,632 issued, and 500,346,215 and 497,426,277 outstanding, respectively	6,349,267		6,336,445
Treasury stock, at cost; 50,239,355 shares as of June 26, 2020 and March 31, 2020	(388,215)		(388,215)
Accumulated deficit	(2,850,590)		(2,902,410)
Accumulated other comprehensive loss	(170,857)		(214,667)


Total shareholders’ equity	2,939,605		2,831,153
Total liabilities and shareholders’ equity	$	14,133,068	$	13,689,617


	Six-Month Periods Ended							Three-Month Periods Ended
	September 27, 2019			September 28, 2018				June 26, 2020		June 28, 2019
	(In thousands) (Unaudited)							(In thousands) (Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:							CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	(72,068	)	$	202,920
Net income							Net income	$	51,820	$	44,872
Depreciation, amortization and other impairment charges	357,020			269,062			Depreciation, amortization and other impairment charges	156,215		190,163
Gain from deconsolidation of Bright Machines	—			(86,614		)
Changes in working capital and other	(1,933,364		)	(2,092,964		)
Changes in working capital and other, net							Changes in working capital and other, net	(837,425)		(891,901)
Net cash used in operating activities	(1,648,412		)	(1,707,596		)	Net cash used in operating activities	(629,390)		(656,866)
CASH FLOWS FROM INVESTING ACTIVITIES:							CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment	(271,541		)	(363,373		)	Purchases of property and equipment	(110,259)		(162,115)
Proceeds from the disposition of property and equipment	53,330			12,973			Proceeds from the disposition of property and equipment	7,853		38,901
Acquisition of businesses, net of cash acquired	(1,390		)	—
Proceeds from divestiture of businesses, net of cash held in divested businesses	3,402			264,438

Cash collections of deferred purchase price	1,839,818			1,812,945			Cash collections of deferred purchase price	—		899,260
Other investing activities, net	20,114			(24,411		)	Other investing activities, net	2,027		(920)
Net cash provided by investing activities	1,643,733			1,702,572
Net cash (used in) provided by investing activities							Net cash (used in) provided by investing activities	(100,379)		775,126
CASH FLOWS FROM FINANCING ACTIVITIES:							CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from bank borrowings and long-term debt	779,682			650,023			Proceeds from bank borrowings and long-term debt	1,247,835		771,533
Repayments of bank borrowings and long-term debt	(863,930		)	(652,600		)	Repayments of bank borrowings and long-term debt	(510,554)		(601,240)

Payments for repurchases of ordinary shares	(112,158		)	(59,980		)	Payments for repurchases of ordinary shares	—		(51,999)
Net proceeds from issuance of ordinary shares	728			131

Other financing activities, net	327,348			—			Other financing activities, net	3,513		(11,979)
Net cash provided by (used in) financing activities	131,670			(62,426		)
Net cash provided by financing activities							Net cash provided by financing activities	740,794		106,315
Effect of exchange rates on cash and cash equivalents	(8,103		)	(27,254		)	Effect of exchange rates on cash and cash equivalents	1,370		(749)
Net increase (decrease) in cash and cash equivalents	118,888			(94,704		)
Net increase in cash and cash equivalents							Net increase in cash and cash equivalents	12,395		223,826
Cash and cash equivalents, beginning of period	1,696,625			1,472,424			Cash and cash equivalents, beginning of period	1,922,686		1,696,625
Cash and cash equivalents, end of period	$	1,815,513		$	1,377,720		Cash and cash equivalents, end of period	$	1,935,081	$	1,920,451

Non-cash investing activities:							Non-cash investing activities:
Unpaid purchases of property and equipment	$	70,901		$	182,901		Unpaid purchases of property and equipment	$	34,909	$	78,663
Non-cash investment in Bright Machines	$	—		$	127,641


	As of June 26, 2020		As of March 31, 2020
	(In thousands)
Raw materials	$	2,626,618	$	2,835,582
Work-in-progress	336,469		373,513
Finished goods	520,388		575,978
	$	3,483,475	$	3,785,073



/s/ DELOITTE & TOUCHE LLP
San Jose, California
~~October 29, 2019~~August 4, 2020



	As of September 27, 2019			As of March 31, 2019
	(In thousands, except share amounts) (Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	1,815,513		$	1,696,625
Accounts receivable, net of allowance for doubtful accounts of $90,430 and $91,396 as of September 27, 2019 and March 31, 2019, respectively	2,414,633			2,612,961
Contract assets	205,753			216,202
Inventories	3,721,237			3,722,854
Other current assets	1,335,387			854,790
Total current assets	9,492,523			9,103,432
Property and equipment, net	2,217,445			2,336,213
Operating lease right-of-use assets, net	588,474			—
Goodwill	1,062,450			1,073,055
Other intangible assets, net	292,179			330,995
Other assets	623,582			655,672
Total assets	$	14,276,653		$	13,499,367

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Bank borrowings and current portion of long-term debt	$	32,450		$	632,611
Accounts payable	5,227,495			5,147,236
Accrued payroll	382,812			391,591
Other current liabilities	1,915,263			1,426,075
Total current liabilities	7,558,020			7,597,513
Long-term debt, net of current portion	2,957,878			2,421,904
Operating lease liabilities, non-current	512,086			—
Other liabilities	442,708			507,590
Shareholders’ equity
Ordinary shares, no par value; 559,389,281 and 566,787,620 issued, and 509,149,926 and 516,548,265 outstanding as of September 27, 2019 and March 31, 2019, respectively	6,445,997			6,523,750
Treasury stock, at cost; 50,239,355 shares as of September 27, 2019 and March 31, 2019	(388,215		)	(388,215		)
Accumulated deficit	(3,062,057		)	(3,012,012		)
Accumulated other comprehensive loss	(189,764		)	(151,163		)
Total shareholders’ equity	2,805,961			2,972,360
Total liabilities and shareholders’ equity	$	14,276,653		$	13,499,367


	Ordinary Shares							Accumulated Other Comprehensive Loss						Total
Three Months Ended June 26, 2020	Shares Outstanding	Amount		Accumulated Deficit		Unrealized Gain (Loss) on Derivative Instruments and Other		Foreign Currency Translation Adjustments		Total Accumulated Other Comprehensive Loss		Shareholders' Equity
	(In thousands) Unaudited
BALANCE AT MARCH 31, 2020	497,426	$	5,948,230	$	(2,902,410)	$	(81,663)	$	(133,004)	$	(214,667)	$	2,831,153

Exercise of stock options	89	53		—		—		—		—		53
Issuance of Flex Ltd. vested shares under restricted share unit awards	2,831	—		—		—		—		—		—
Net income	—	—		51,820		—		—		—		51,820
Stock-based compensation, net of tax	—	12,769		—		—		—		—		12,769

Total other comprehensive income	—	—		—		29,760		14,050		43,810		43,810
BALANCE AT JUNE 26, 2020	500,346	$	5,961,052	$	(2,850,590)	$	(51,903)	$	(118,954)	$	(170,857)	$	2,939,605



	HRS			IEI			CEC		CTG		Total
	(In thousands)
Balance, beginning of the year	$	507,209		$	333,257		$	129,325	$	103,264	$	1,073,055
Divestitures	(1,102		)	(137		)	—		—		(1,239		)
Foreign currency translation adjustments	(9,366		)	—			—		—		(9,366		)
Balance, end of the period	$	496,741		$	333,120		$	129,325	$	103,264	$	1,062,450


~~(1)~~	~~Represents estimated amortization for the remaining six-month~~ (1)Represents estimated amortization for the remaining fiscal nine-month period ending ~~March 31, 2020.~~



Lease cost	Three-Month Period Ended		Six-Month Period Ended
	September 27, 2019		September 27, 2019
Operating lease cost	$	40,630	$	81,306
Total lease cost	$	40,630	$	81,306



	As of September 27, 2019
Operating Leases:
Operating lease right of use assets	$	588,474
Operating lease liabilities	631,701

Weighted-average remaining lease term (In years)
Operating leases	7.2

Weighted-average discount rate
Operating leases	4.3		%



	Six-Month Period Ended
	September 27, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	69,106



Fiscal Year Ended March 31,	Operating Leases
2020 (1)	$	77,710
2021	125,871
2022	106,230
2023	92,832
2024	79,096
Thereafter	259,559
Total undiscounted lease payments	741,298
Less: imputed interest	109,597
Total lease liabilities	$	631,701


~~(1)~~	~~Represents estimated lease payments for the remaining six-month period ending March 31, 2020.~~


	Three-Month Period Ended September 27, 2019											Three-Month Period Ended June 28, 2019
	HRS		IEI		CEC		CTG		Total			FAS		FRS		Total
Timing of Transfer											Timing of Transfer
Point in time	$	942,113	$	1,147,976	$	1,390,059	$	1,103,855	$	4,584,003	Point in time	$	2,969,333	$	1,453,444	$	4,422,777
Over time	246,518		637,592		338,538		281,403		1,504,051		Over time	938,843		814,319		1,753,162
Total segment	$	1,188,631	$	1,785,568	$	1,728,597	$	1,385,258	$	6,088,054	Total segment	$	3,908,176	$	2,267,763	$	6,175,939



	Six-Month Period Ended September 27, 2019
	HRS		IEI		CEC		CTG		Total
Timing of Transfer
Point in time	$	1,865,840	$	2,263,035	$	2,749,423	$	2,128,481	$	9,006,779
Over time	500,834		1,159,447		838,023		758,910		3,257,214
Total segment	$	2,366,674	$	3,422,482	$	3,587,446	$	2,887,391	$	12,263,993



	Three-Month Period Ended September 28, 2018
	HRS		IEI		CEC		CTG		Total
Timing of Transfer
Point in time	$	893,141	$	1,089,319	$	1,519,041	$	1,201,696	$	4,703,197
Over time	314,830		476,634		621,756		546,187		1,959,407
Total segment	$	1,207,971	$	1,565,953	$	2,140,797	$	1,747,883	$	6,662,604


~~(2)~~	An immaterial number of options to purchase ordinary shares were excluded from the computation of diluted earnings (losses) per share during the three and six-month periods ended September 27, 2019 and September 28, 2018, respectively, due to their anti-dilutive impact on the weighted-average ordinary share equivalents.



	Three-Month Periods Ended								Six-Month Periods Ended
Segments:	September 27, 2019				September 28, 2018				September 27, 2019				September 28, 2018
	(In millions)
High Reliability Solutions	$	1,189	20	%	$	1,208	18	%	$	2,367	19	%	$	2,423	19	%
Industrial & Emerging Industries	1,786		29	%	1,566		24	%	3,422		28	%	3,012		23	%
Communications & Enterprise Compute	1,729		28	%	2,141		32	%	3,587		29	%	4,095		31	%
Consumer Technologies Group	1,385		23	%	1,748		26	%	2,887		24	%	3,531		27	%
	$	6,088			$	6,663			$	12,264			$	13,062


	Three-Month Periods Ended																					Fiscal Year Ended
	June 28, 2019						September 27, 2019						December 31, 2019						March 31, 2020		March 31, 2020
	(In thousands)
	(Unaudited)
Net sales:
Flex Agility Solutions	$	3,908,176	63	%	$	3,582,900	59	%	$	3,631,082	56	%	$	2,930,956	53	%	$	14,053,114	58	%
Flex Reliability Solutions	2,267,763		37	%	2,505,154		41	%	2,830,305		44	%	2,553,534		47	%	10,156,756		42	%
	$	6,175,939			$	6,088,054			$	6,461,387			$	5,484,490			$	24,209,870
Segment income and reconciliation of income before tax:
Flex Agility Solutions	$	108,958	2.8	%	$	94,194	2.6	%	$	98,022	2.7	%	$	67,856	2.3	%	$	369,030	2.6	%
Flex Reliability Solutions	129,994		5.7	%	159,186		6.4	%	186,249		6.6	%	167,120		6.5	%	642,549		6.3	%
Corporate and Other	(31,092)				(26,238)				(28,233)				(27,985)				(113,548)
Total segment income	207,860		3.4	%	227,142		3.7	%	256,038		4.0	%	206,991		3.8	%	898,031		3.7	%
Reconciling items:
Intangible amortization	17,082				16,223				15,598				15,203				64,106
Stock-based compensation	15,227				18,890				19,215				18,214				71,546
Customer related asset impairments	483				90,973				3,754				10,730				105,940
Restructuring charges	56,192				128,315				14,616				17,284				216,407
Legal and other	1,610				19,538				6,864				(1,742)				26,270
Interest and other, net	51,694				47,749				36,207				28,077				163,727
Other charges, net	1,463				1,147				14,395				74,545				91,550
Income (loss) before income taxes	$	64,109			$	(95,693)			$	145,389			$	44,680			$	158,485



Period	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
June 29, 2019 - August 2, 2019 (2)	148,905	$	10.76	148,905	$	270,920,458
August 3, 2019 - August 30, 2019 (2) (3)	3,721,732	$	9.98	3,721,732	$	484,411,060
August 31, 2019 - September 27, 2019 (3)	2,057,106	$	10.42	2,057,106	$	462,981,874
Total	5,927,743			5,927,743


~~(1)~~	During the period from June 29, 2019 through September 27, 2019, 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.



		FLEX LTD.
		(Registrant)


		/s/ REVATHI ADVAITHI
		Revathi Advaithi
		Chief Executive Officer
		(Principal Executive Officer)

Date:	~~October 29, 2019~~August 4, 2020
		/s/ CHRISTOPHER E. COLLIER
		Christopher E. Collier
		Chief Financial Officer
		(Principal Financial Officer)

Date:	~~October 29, 2019~~August 4, 2020