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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrantþ
Filed by a Party other than the Registranto
Check the appropriate box:
o | Preliminary Proxy Statement | |
o | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |
þ | Definitive Proxy Statement | |
o | Definitive Additional Materials | |
o | Soliciting Material Pursuant to §240.14a-12 |
FLEXTRONICS INTERNATIONAL LTD.
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1. | To re-elect each of the following Directors, who will retire by rotation pursuant to Article 95 of our Articles of Association, to the Board of Directors: |
(a) | Mr. James A. Davidson; and | |
(b) | Mr. Lip-Bu Tan. |
2. | To re-appoint Mr. Patrick Foley as a Director to the Board of Directors pursuant to Section 153(6) of the Singapore Companies Act, Chapter 50, to hold such office from the date of this Annual General Meeting until our next Annual General Meeting. | |
3. | To consider and vote upon a proposal to re-appoint Deloitte & Touche LLP as our independent auditors for the fiscal year ending March 31, 2006 and to authorize the Board of Directors to fix their remuneration. |
“RESOLVED THAT, pursuant to the provisions of Section 161 of the Singapore Companies Act, Chapter 50, and notwithstanding the provisions of Article 46 of our Articles of Association but subject otherwise to the provisions of that Act and our Articles of Association, authority be and is hereby given to our Directors to: |
(a) (i) | allot and issue ordinary shares in our capital; and/or |
(ii) | make or grant offers, agreements or options that might or would require ordinary shares in our capital to be allotted and issued whether after the expiration of this authority or otherwise (including but not limited to the creation and issue of warrants, debentures or other instruments convertible into ordinary shares in our capital), |
at any time to and/or with such persons and upon such terms and conditions and for such purposes as our Directors may in their absolute discretion deem fit, and with such rights or restrictions as our Directors may think fit to impose and as are set forth in our Articles of Association aforesaid; and |
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(b) | (notwithstanding that the authority conferred by this resolution may have ceased to be in force) allot and issue ordinary shares in our capital in pursuance of any offer, agreement or option made or granted by our Directors while this resolution was in force, |
and that such authority shall continue in force until the conclusion of our next Annual General Meeting or the expiration of the period within which our next Annual General Meeting is required by law to be held, whichever is earlier.” |
(a) | $10,000 of quarterly cash compensation to each of our non-employee Directors for services rendered as a director; | |
(b) | an additional $2,500 of quarterly cash compensation to the Chairman of the Audit Committee (if appointed) of the Board of Directors for services rendered as Chairman of the Audit Committee and for his or her participation on the Audit Committee; and | |
(c) | an additional $1,250 of quarterly cash compensation to each of our non-employee Directors for their participation on each committee of the Board of Directors on which such Director serves.” |
(a) | for the purposes of Sections 76C and 76E of the Singapore Companies Act, Chapter 50 (the “Companies Act”) and subject to the provisions of Applicable Laws from time to time in force, the exercise by our Directors of all of the company’s powers to purchase or otherwise acquire issued ordinary shares not exceeding in aggregate the number of issued ordinary shares representing 10% of the company’s issued ordinary shares in the company’s capital as at the date of the passing of this resolution, at such price or prices as may be determined by our Directors from time to time up to the maximum purchase price described in paragraph (c) below, whether by way of: |
(i) | market purchases on The NASDAQ National Market or any other stock exchange on which the company’s ordinary shares may for the time being be listed and quoted; and/or | |
(ii) | off-market purchases (if effected other than on The NASDAQ National Market or, as the case may be, any other stock exchange on which the company’s ordinary shares may for the time being be listed and quoted) in accordance with any equal access scheme(s) as may be determined or formulated by our Directors as they consider fit, which scheme(s) shall satisfy all of the conditions prescribed by the Companies Act, | |
and otherwise in accordance with all other laws and regulations and rules of The NASDAQ National Market or, as the case may be, any other stock exchange on which our ordinary shares may for the time being be listed and quoted as may for the time being be applicable, be and is hereby authorized and approved generally and unconditionally; |
(b) | subject to Applicable Laws from time to time in force, unless varied or revoked by our shareholders in a general meeting, the authority conferred on our Directors pursuant to the mandate contained in paragraph (a) above may be exercised by our Directors at any time and from time to time during the period commencing from the date of the passing of this resolution and expiring on the earlier of: |
(i) | the date on which our next Annual General Meeting is held; or | |
(ii) | the date by which our next Annual General Meeting is required by law to be held; |
(c) | subject to Applicable Laws from time to time in force, the maximum purchase price (excluding brokerage, commission, applicable goods and services tax and other related expenses) which may |
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be paid for an ordinary share purchased or acquired by the company pursuant to the mandate contained in paragraph (a) above shall not exceed: |
(i) | in the case of a market purchase of an ordinary share, one hundred and five percent (105%) of the Average Closing Price of the company’s ordinary shares; and | |
(ii) | in the case of an off-market purchase pursuant to an equal access scheme, one hundred and ten percent (110%) of the Average Closing Price of the company’s ordinary shares, | |
and for the above purposes, the term Average Closing Price means the average of the last dealt prices of an ordinary share for the five consecutive trading days on which the company’s ordinary shares are transacted on The NASDAQ National Market or, as the case may be, any other stock exchange on which the company’s ordinary shares may for the time being be listed and quoted, immediately preceding the date of the market purchase by the company or, as the case may be, the date of the making of the offer pursuant to the off-market purchase. The date of the making of the offer refers to the date on which the company announces its intention to make an offer for the purchase or acquisition of the company’s ordinary shares from holders of the company’s ordinary shares, stating therein the purchase price (which shall not be more than the maximum purchase price calculated on the foregoing basis) for each ordinary share and the relevant terms of the equal access scheme for effecting the off-market purchase; and |
(d) | our Directors and/or any of them be and are hereby authorized to complete and do all such acts and things (including executing such documents as may be required) as they and/or he or she may consider expedient or necessary to give effect to the transactions contemplated and/or authorized by this resolution, and the source of funds for any purchase or acquisition of ordinary shares shall be as authorized or permitted under Applicable Laws. |
For the purposes of the resolutions above, the term “Applicable Laws” shall mean the Companies Act or any statutory modification, amendment or re-enactment thereof from time to time in force and any and every other act or regulation of the Republic of Singapore from time to time in force concerning companies and affecting the company.” |
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Bernard Liew Jin Yang |
Joint Secretary |
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Nominating and | ||||||||||||||||
Corporate | ||||||||||||||||
Audit | Compensation | Governance | Finance | |||||||||||||
Name | Committee | Committee | Committee | Committee | ||||||||||||
Michael E. Marks | X | |||||||||||||||
James A. Davidson | X | |||||||||||||||
Patrick Foley | X | X | ||||||||||||||
Michael J. Moritz | X | X | X | |||||||||||||
Richard L. Sharp | X | |||||||||||||||
Lip-Bu Tan | X |
Audit Committee |
Compensation Committee |
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Nominating and Corporate Governance Committee |
Finance Committee |
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Fiscal Year | Fiscal Year | |||||||
2005 | 2004 | |||||||
(In millions) | ||||||||
Audit Fees | $ | 7.6 | $ | 4.5 | ||||
Audit-Related Fees | 0.0 | 1.0 | ||||||
Tax Fees | 2.6 | 2.0 | ||||||
All Other Fees | — | — | ||||||
Total: | $ | 10.2 | $ | 7.5 | ||||
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• | Our Articles of Association permit the Chairman of the Annual General Meeting (provided he is a person entitled to vote at the Annual General Meeting) or any shareholder(s) present and representing not less than one-tenth of the total voting rights of all shareholders having the right to vote at that meeting to demand that votes at the Annual General Meeting be decided by a poll (where each ordinary share is entitled to one vote), rather than by a show of hands (where each shareholder is entitled to one vote, irrespective of the number of shares held by that shareholder). | |
• | Our option agreements with each executive officer provide that if the executive officer is terminated without cause or leaves for good reason within the first 12 months following a change in control of the company, the vesting of any unvested portion of the option will be accelerated in full. If the executive officer is still employed upon the first year anniversary of such a change of control of the company, the vesting of any unvested portion of the option will be accelerated in full. Each option includes a limited stock appreciation right pursuant to which the option will automatically be cancelled upon the occurrence of certain hostile tender offers, in return for a cash distribution from us based on the tender offer price per share. |
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(A) Maximum number of ordinary shares |
(B) Duration of authority |
(1) | the date on which our next Annual General Meeting is held or required by law to be held; or | |
(2) | the date on which the authority conferred by the Share Purchase Mandate is revoked or varied. |
(C) Manner of purchases or acquisitions of ordinary shares |
(1) | market purchases on The NASDAQ National Market or any other stock exchange on which our ordinary shares may for the time being be listed and quoted, through one or more duly licensed dealers appointed by us for that purpose; and/or | |
(2) | off-market purchases (if effected other than on The NASDAQ National Market or, as the case may be, any other stock exchange on which our ordinary shares may for the time being be listed and quoted), in accordance with an equal access scheme. | |
(1) | offers for the purchase or acquisition of ordinary shares shall be made to every person who holds ordinary shares to purchase or acquire the same percentage of their ordinary shares; | |
(2) | all of those persons shall be given a reasonable opportunity to accept the offers made; and | |
(3) | the terms of all of the offers are the same (except that there shall be disregarded (a) differences in consideration attributable to the fact that offers may relate to ordinary shares with different accrued dividend entitlements and (b) differences in the offers introduced solely to ensure that each person is left with a whole number of ordinary shares). |
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(D) Purchase price |
(1) | in the case of a market purchase, 105% of the “Average Closing Price” of our ordinary shares; and | |
(2) | in the case of an off-market purchase pursuant to an equal access scheme, 110% of the “Average Closing Price” of our ordinary shares, |
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Name | Age | Position | ||||
Michael E. Marks | 54 | Chief Executive Officer and Director | ||||
Michael M. McNamara | 48 | Chief Operating Officer | ||||
Thomas J. Smach | 45 | Chief Financial Officer | ||||
Ronny Nilsson | 56 | President, Flextronics Network Services | ||||
Peter Tan | 56 | President and Managing Director, Asia Operations | ||||
Richard L. Sharp | 58 | Chairman of the Board | ||||
James A. Davidson | 46 | Director | ||||
Patrick Foley | 73 | Director | ||||
Michael J. Moritz | 50 | Director | ||||
Lip-Bu Tan | 45 | Director |
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Long Term | |||||||||||||||||||||
Compensation | |||||||||||||||||||||
Awards | |||||||||||||||||||||
Annual Compensation | Securities | ||||||||||||||||||||
Underlying | All Other | ||||||||||||||||||||
Name and Principal Position | Fiscal Year | Salary | Bonus | Options | Compensation | ||||||||||||||||
Michael E. Marks | 2005 | $ | 985,000 | $ | 2,795,350 | 2,375,000 | $ | 1,567,595 | (1) | ||||||||||||
Chief Executive Officer | 2004 | 785,442 | 605,000 | — | 17,599 | (2) | |||||||||||||||
2003 | 341,402 | 150,000 | 5,000,000 | 10,048 | (3) | ||||||||||||||||
Michael M. McNamara | 2005 | $ | 800,000 | $ | 1,143,860 | 600,000 | $ | 6,780 | (4) | ||||||||||||
Chief Operating Officer | 2004 | 700,110 | 393,750 | — | 17,183 | (5) | |||||||||||||||
2003 | 257,127 | 84,375 | 2,600,000 | 7,548 | (6) | ||||||||||||||||
Thomas J. Smach(7) | 2005 | $ | 441,250 | $ | 642,750 | 500,000 | $ | 12,075 | (8) | ||||||||||||
Chief Financial Officer | |||||||||||||||||||||
Ronny Nilsson | 2005 | $ | 576,969 | $ | 385,900 | 37,500 | $ | 1,395 | (9) | ||||||||||||
President, Flextronics | 2004 | 538,362 | 17,414 | 75,000 | 47,625 | (10) | |||||||||||||||
Network Services | 2003 | 349,562 | 100,147 | 375,000 | 47,568 | (11) | |||||||||||||||
Peter Tan(12) | 2005 | $ | 350,000 | $ | 251,628 | 350,000 | $ | 24,640 | (13) | ||||||||||||
President and Managing Director, Asia Operations | |||||||||||||||||||||
Robert R.B. Dykes(14) | 2005 | $ | 367,500 | $ | 707,325 | 500,000 | $ | 2,043,867 | (15) | ||||||||||||
President, Systems Group | 2004 | 475,000 | 267,188 | 1,000,000 | 7,115 | (16) | |||||||||||||||
and Chief Financial Officer | 2003 | 221,327 | 79,688 | 700,000 | 272 | (17) |
(1) | Represents our contribution to the supplemental executive retirement plan for Mr. Marks of $1,554,286, our contribution to the 401(k) plan of $8,374, life insurance premium payments of $660, disability insurance premium payments of $3,939 and imputed income for group term life insurance of $336. | |
(2) | Represents our contribution to the 401(k) plan of $7,100, life insurance premium payments of $867, disability insurance premium payments of $5,985, imputed income for group term life insurance of $276 and a vehicle allowance of $3,371. | |
(3) | Represents our contributions to the 401(k) plan of $2,716, life insurance premium payments of $2,250 and a vehicle allowance of $5,082. | |
(4) | Represents our contribution to the 401(k) plan of $6,600 and imputed income for group term life insurance of $180. | |
(5) | Represents our contributions to the 401(k) plan of $6,000, life insurance premium payments of $1,431, disability insurance premium payments of $2,047, imputed income for group term life insurance of $180, a vehicle allowance of $70 and personal use of the company jet of $7,455. | |
(6) | Represents our contributions to the 401(k) plan of $3,525, life insurance premium payments of $98 and a vehicle allowance of $3,925. | |
(7) | Mr. Smach was elected our Chief Financial Officer during fiscal year 2005. | |
(8) | Represents our contributions to the 401(k) plan of $6,188, life insurance premium payments of $852, imputed income for group term life insurance of $135 and a vehicle allowance of $4,900. |
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(9) | Represents life insurance premium payments of $85 and health insurance premium payments of $1,310. |
(10) | Represents our contributions to a pension retirement fund of $46,672 and health insurance premium payments of $953. |
(11) | Represents our contributions to a pension retirement fund of $39,046 and a vehicle allowance of $8,522. |
(12) | Mr. Tan was elected our President and Managing Director, Asia Operations during fiscal year 2005. |
(13) | Represents health insurance premium payments of $330, disability insurance premium payments of $150 and a vehicle allowance of $24,160. |
(14) | Mr. Dykes resigned on December 14, 2004. |
(15) | Represents a lump-sum cash payment of $2,033,739 in connection with Mr. Dykes’ resignation on December 14, 2004, our contribution to the 401(k) plan of $6,857, imputed income for domestic partner insurance coverage of $2,885 and imputed income for group term life insurance of $387. |
(16) | Represents our contribution to the 401(k) plan of $762, life insurance premium payments of $864, disability insurance premium payments of $2,047, imputed income for domestic partner insurance coverage of $2,986, imputed income for group term life insurance of $336 and a vehicle allowance of $120. |
(17) | Represents life insurance premium payments of $150 and a vehicle allowance of $122. |
Individual Grants | ||||||||||||||||||||||||
Potential Realizable Value at | ||||||||||||||||||||||||
Number of | Assumed Annual Rates of | |||||||||||||||||||||||
Securities | Percent of Total | Stock Price Appreciation for | ||||||||||||||||||||||
Underlying | Options Granted | Exercise | Option Term | |||||||||||||||||||||
Options | to Employees in | Price per | Expiration | |||||||||||||||||||||
Name | Granted | Fiscal Year 2005 | Share | Date | 5% | 10% | ||||||||||||||||||
Michael E. Marks | 1,000,000 | (1) | 5.42 | % | $ | 17.69 | 04/21/2014 | $ | 11,125,146 | $ | 28,193,304 | |||||||||||||
1,375,000 | (2) | 7.45 | % | $ | 11.53 | 08/23/2014 | $ | 9,970,338 | $ | 25,266,795 | ||||||||||||||
Michael M. McNamara | 400,000 | (1) | 2.17 | % | $ | 16.07 | 04/30/2014 | $ | 4,042,535 | $ | 10,244,577 | |||||||||||||
200,000 | (3) | 1.08 | % | $ | 11.53 | 08/23/2014 | $ | 1,450,231 | $ | 3,675,170 | ||||||||||||||
Thomas J. Smach | 500,000 | (3) | 2.71 | % | $ | 11.53 | 08/23/2014 | $ | 3,625,578 | $ | 9,187,925 | |||||||||||||
Ronny Nilsson | 37,500 | (4) | 0.20 | % | $ | 11.53 | 08/23/2008 | $ | 93,180 | $ | 200,665 | |||||||||||||
Peter Tan | 100,000 | (1) | 0.54 | % | $ | 17.37 | 04/01/2014 | $ | 1,092,390 | $ | 2,768,331 | |||||||||||||
100,000 | (1) | 0.54 | % | $ | 13.18 | 09/28/2014 | $ | 828,883 | $ | 2,100,553 | ||||||||||||||
150,000 | (3) | 0.81 | % | $ | 12.05 | 10/29/2014 | $ | 1,136,727 | $ | 2,880,689 | ||||||||||||||
Robert R.B. Dykes(5) | 500,000 | (4) | 2.71 | % | $ | 11.53 | 08/23/2014 | $ | 3,625,578 | $ | 9,187,925 |
(1) | The vesting of these options was accelerated to January 17, 2005. |
(2) | Options for 1,000,000 shares vest and become exercisable on the first anniversary of the date of grant with respect to 50% of these shares and at the rate of1/12 per month thereafter until fully vested with respect to the remaining shares. Options for 375,000 shares vest and become exercisable on the first anniversary of |
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the date of grant with respect to 25% of these shares and at the rate of1/36 per month thereafter until fully vested with respect to the remaining shares. | |
(3) | These options vest and become exercisable on the first anniversary of the date of grant with respect to 25% of the total shares and at the rate of1/36 per month thereafter until fully vested with respect to the remaining shares. |
(4) | These options were 100% vested and exercisable on the date of grant. |
(5) | Mr. Dykes resigned on December 14, 2004. |
Number of Securities | ||||||||||||||||||||||||
Underlying Unexercised | Value of Unexercised | |||||||||||||||||||||||
Options at | In-the-Money Options at | |||||||||||||||||||||||
Shares | March 31, 2005 | March 31, 2005 | ||||||||||||||||||||||
Acquired | ||||||||||||||||||||||||
Name | on Exercise | Value Realized | Vested | Unvested | Vested | Unvested | ||||||||||||||||||
Michael E. Marks | — | $ | — | 3,600,000 | 5,366,000 | $ | 4,140,000 | $ | 17,256,660 | |||||||||||||||
Michael M. McNamara | — | — | 1,725,000 | 1,875,000 | 3,336,000 | 6,966,000 | ||||||||||||||||||
Thomas J. Smach | 50,000 | 520,700 | 1,260,000 | 635,000 | 2,214,900 | 813,900 | ||||||||||||||||||
Ronny Nilsson | — | — | 645,833 | — | 1,571,625 | — | ||||||||||||||||||
Peter Tan | — | — | 405,750 | 212,500 | 215,085 | 254,915 | ||||||||||||||||||
Robert R.B. Dykes(1) | 556,000 | 1,212,360 | 1,516,667 | — | 2,898,000 | — |
(1) | In connection with Mr. Dykes’ resignation on December 14, 2004, we agreed to amend certain of Mr. Dykes’ stock option agreements to provide for (i) full acceleration of vesting of approximately 1.2 million of Mr. Dykes’ outstanding but unvested stock options, which had a weighted average exercise price of $13.65 per share, and (ii) extension of the expiration date of approximately 1.5 million of Mr. Dykes’ stock options to five years after his employment termination date. These stock options would otherwise have expired ninety days after the termination of his employment. |
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Employment Agreement with Michael E. Marks |
Supplemental Executive Retirement Plan for Michael E. Marks |
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Flextronics International USA, Inc. 2005 Senior Executive Deferred Compensation Plan |
Deferred Bonuses |
Named Executive Officer | Amount | |||
Michael M. McNamara | $ | 5,000,000 | ||
Thomas J. Smach | $ | 3,000,000 | ||
Peter Tan | $ | 3,200,000 |
Ronny Nilsson Bonus |
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Amendment of Option Agreements with and Lump-Sum Cash Payment to Robert R.B. Dykes |
Change in Control Arrangements Under Option Agreements |
(A) | (B) | (C) | ||||||||||
Number of Ordinary Shares | ||||||||||||
Remaining Available for | ||||||||||||
Number of Ordinary | Weighted-Average | Future Issuance Under | ||||||||||
Shares to be Issued | Exercise Price of | Equity Compensation Plans | ||||||||||
Upon Exercise of | Outstanding | (Excluding Ordinary Shares | ||||||||||
Plan Category | Outstanding Options | Options | Reflected in Column (A)) | |||||||||
Equity compensation plans approved by shareholders | 29,824,395 | $ | 15.06 | 24,399,658 | (1) | |||||||
Equity compensation plans not approved by shareholders(2)(3)(4) | 21,713,418 | $ | 11.28 | 1,909,746 | (5) | |||||||
Total | 51,537,813 | $ | 13.47 | 26,309,404 | ||||||||
(1) | Of these, 23,071,462 ordinary shares remained available for grant under the 2001 Equity Incentive Plan and 1,328,196 ordinary shares remained available for issuance under the 1997 Employee Share Purchase Plan. There are no additional ordinary shares available for grant under the 1993 Equity Incentive Plan and the 1997, 1998 and 1999 Interim Option Plans, which were consolidated into the 2001 Equity Incentive Plan in September 2004. |
(2) | The 2004 Award Plan for New Employees, which we refer to as the 2004 Plan, was established in October 2004. The purpose of the 2004 Plan is to provide incentives to attract, retain and motivate eligible persons whose potential contributions are important to our success by offering such persons an opportunity to participate in our future performance through stock awards. Grants under the 2004 Plan may be granted only to persons who: (a) were not previously an employee or director of Flextronics or any parent or subsidiary of Flextronics or (b) have either (i) completed a period of bona fide |
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non-employment by Flextronics, and any parent or subsidiary of Flextronics, of at least 1 year, or (ii) are returning to service as an employee of Flextronics, or any parent or subsidiary of Flextronics, after a period of bona fide non-employment of less than 1 year due to Flextronics’s acquisition of such person’s employer; and then only as an incentive to such persons entering into employment with Flextronics or any parent or subsidiary of Flextronics. We may only grant nonqualified stock options or stock bonuses under the 2004 Plan. The 2004 Plan is administered by the Compensation Committee, which is comprised of two independent directors. The 2004 Plan provides for grants of up to 7,500,000 shares (5,000,000 shares as of March 31, 2005). The exercise price of options granted under the 2004 Plan is determined by the Compensation Committee and may not be less than the fair market value of the underlying stock on the date of grant. Options granted under the 2004 Plan generally vest over four years and generally expire ten years from the date of grant. | |
(3) | Our 2002 Interim Incentive Plan, which we refer to as the 2002 Plan, was adopted by our Board in May 2002. The adoption of the 2002 Plan was necessitated by our internal growth, our multiple acquisitions and the requirement to provide equity compensation for employees consistent with competitors and peer companies. The Board reserved an aggregate of 20,000,000 ordinary shares for issuance under the 2002 Plan. The 2002 Plan provides for the grant to qualified persons of non-statutory stock options to purchase our ordinary shares. Shares subject to options granted pursuant to the 2002 Plan that expire or terminate for any reason without being exercised will again become available for grant and issuance pursuant to awards under the 2002 Plan. Options granted under the 2002 Plan have an exercise price of not less than 85% of the fair market value of the underlying ordinary shares on the date of grant. Options issued under the 2002 Plan generally vest over a four-year period and expire ten years from the date of grant. The other general terms of the 2002 Plan are similar to the 2001 Equity Incentive Plan. |
(4) | Companies acquired by us have adopted option plans, which we refer to as the Assumed Plans. Options to purchase a total of 6,040,588 ordinary shares under the Assumed Plans have been assumed. These options have a weighted average exercise price of $5.89 per share. These options have been converted into options to purchase our ordinary shares on the terms specified in the applicable acquisition agreement, but are otherwise administered in accordance with terms of the Assumed Plans. Options under the Assumed Plans generally vest over four years and expire 10 years from the date of grant. No further awards may be made under the Assumed Plans. Options outstanding under the Assumed Plans are not included in the above table. |
(5) | Of these, 459,021 ordinary shares remained available for grant under the 2002 Plan and 1,450,725 ordinary shares remained available for grant under the 2004 Plan. On May 12, 2005, our Board of Directors approved an increase of 2.5 million ordinary shares available for grant under the 2004 Plan. |
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Submitted by the Compensation Committee of the Board of Directors: | |
Richard L. Sharp | |
Michael J. Moritz |
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Submitted by the Audit Committee of the Board of Directors: | |
Patrick Foley | |
Michael J. Moritz | |
James A. Davidson |
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* | $100 invested on 3/31/00 in stock or index, including reinvestment of dividends. Fiscal year ending March 31. |
2000 | 2001 | 2002 | 2003 | 2004 | 2005 | ||||||||||||||||||||||||||
Flextronics International Ltd. | $ | 100.00 | $ | 42.59 | $ | 51.82 | $ | 24.76 | $ | 48.52 | $ | 34.19 | |||||||||||||||||||
S&P 500 Index | 100.00 | 78.32 | 78.51 | 59.07 | 79.82 | 85.16 | |||||||||||||||||||||||||
Peer Group | 100.00 | 53.71 | 40.46 | 16.64 | 29.75 | 21.64 | |||||||||||||||||||||||||
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• | each shareholder known to us to be the beneficial owner of more than 5% of our ordinary shares outstanding as of May 15, 2005; | |
• | each Named Executive Officer (except for Robert R.B. Dykes, who resigned on December 14, 2004); | |
• | each director; and | |
• | all Named Executive Officers (except for Robert R.B. Dykes, who resigned on December 14, 2004) and directors as a group. |
Shares Beneficially Owned | |||||||||
Name and Address of Beneficial Owner | Number of Shares | Percent | |||||||
5% Shareholders: | |||||||||
Entities associated with AXA Financial, Inc.(1) | 78,149,958 | 13.73 | % | ||||||
1290 Avenue of the Americas | |||||||||
New York, NY 10104 | |||||||||
Entities associated with FMR Corp.(2) | 58,948,750 | 10.36 | |||||||
82 Devonshire Street Boston, MA 02109 | |||||||||
Entities associated with Capital Research and Management Company(3) | 30,398,500 | 5.34 | |||||||
333 South Hope Street Los Angeles, CA 90071 | |||||||||
Named Executive Officers and Directors: | |||||||||
James A. Davidson(4) | 18,659,216 | 3.17 | |||||||
Michael E. Marks(5) | 8,170,059 | 1.42 | |||||||
Richard L. Sharp(6) | 2,479,400 | * | |||||||
Michael M. McNamara(7) | 2,772,547 | * | |||||||
Thomas J. Smach(8) | 1,438,878 | * | |||||||
Ronny Nilsson(9) | 780,833 | * | |||||||
Peter Tan(10) | 434,250 | * | |||||||
Michael J. Moritz(11) | 460,880 | * | |||||||
Patrick Foley(12) | 53,448 | * | |||||||
Lip-Bu Tan(13) | 41,941 | * | |||||||
All Named Executive Officers and directors as a group (10 persons)(14) | 35,291,452 | 5.91 | % |
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* | Less than 1%. | |
(1) | Based on information supplied by AXA Financial, Inc. in an amended Schedule 13G filed with the SEC on February 14, 2005. Advest, Inc. is deemed to have shared voting power and shared dispositive power for 34,111 of these shares. Alliance Capital Management L.P. is deemed to have sole voting power for 47,885,828 of these shares, shared voting power for 6,345,783 of these shares and sole dispositive power for 78,103,347 of these shares. AXA Equitable Life Insurance Company has sole dispositive power for 8,100 of these shares. A majority of these shares are held by unaffiliated third-party client accounts managed by Alliance Capital Management L.P., as investment adviser. Each of Advest Inc., Alliance Capital Management L.P. and AXA Equitable Life Insurance Company is a subsidiary of AXA Financial, Inc. | |
(2) | Based on information supplied by FMR Corp. in an amended Schedule 13G filed with the SEC on February 14, 2005. FMR Corp., as a result of acting as an investment adviser, is deemed to beneficially own all of these shares. FMR Corp. is deemed to have sole voting power for 4,103,180 of these shares and sole dispositive power for 58,948,750 of these shares. | |
(3) | Based on information supplied by Capital Research and Management Company in an amended Schedule 13G filed with the SEC on February 14, 2005. Capital Research and Management Company, as a result of acting as an investment adviser, is deemed to beneficially own all of these shares. | |
(4) | Includes 18,571,427 shares issuable upon the conversion of $195 million in aggregate principal amount of our convertible junior subordinated notes due March 20, 2008, based on the current conversion price of $10.50 per share, 45,740 shares held by the Davidson Revocable Trust of which Mr. Davidson is a trustee, 5,000 shares held directly by Mr. Davidson, 94 shares held by the John Alexander Davidson Trust of which Mr. Davidson is a trustee and 36,955 shares subject to options exercisable within 60 days of May 15, 2005. Mr. Davidson received these options in connection with his service as a member of our Board. Under Mr. Davidson’s arrangements with respect to director compensation, these 35,638 shares issuable upon exercise of options are expected to be assigned by Mr. Davidson to Silver Lake Technology Management, L.L.C. The 18,571,427 shares are issuable to a group of investment funds as the holders of such notes in the following amounts: (i) 18,013,107 shares issuable to Silver Lake Partners Cayman, L.P.; (ii) 506,814 shares issuable to Silver Lake Investors Cayman, L.P.; and (iii) 51,506 shares issuable to Silver Lake Technology Investors Cayman, L.P. The sole general partner of each of Silver Lake Partners Cayman, L.P. and Silver Lake Investors Cayman, L.P. is Silver Lake Technology Associates Cayman, L.P. The sole general partner of each of Silver Lake Technology Associates Cayman, L.P. and Silver Lake Technology Investors Cayman, L.P. is Silver Lake (Offshore) AIV GP Ltd. Mr. Davidson is a director and shareholder of Silver Lake (Offshore) AIV GP Ltd. As such, Mr. Davidson could be deemed to have shared voting or dispositive power over these shares. Mr. Davidson, however, disclaims beneficial ownership of these shares, except to the extent of his pecuniary interest therein. | |
(5) | Includes 2,296,059 shares held by Epping Investment Holdings, LLC of which Mr. Marks and his spouse are managing members, 1,250,000 shares held by the Marks Family Trust, 24,000 shares held by a trust for Mr. Marks’s minor children and 4,600,000 shares subject to options exercisable within 60 days of May 15, 2005. | |
(6) | Includes 480,000 shares beneficially owned by Bethany, LLC of which Mr. Sharp is a manager. Also includes 53,448 shares subject to options exercisable within 60 days of May 15, 2005. | |
(7) | Includes 2,175,000 shares subject to options exercisable within 60 days of May 15, 2005. | |
(8) | Includes 1,320,000 shares subject to options exercisable within 60 days of May 15, 2005. | |
(9) | Includes 645,833 shares subject to options exercisable within 60 days of May 15, 2005. | |
(10) | Includes 418,250 shares subject to options exercisable within 60 days of May 15, 2005. | |
(11) | Includes 407,432 shares held directly by the Maximus Trust of which Mr. Moritz is a co-trustee. Also includes 53,448 shares subject to options exercisable within 60 days of May 15, 2005. | |
(12) | Includes 53,448 shares subject to options exercisable within 60 days of May 15, 2005. |
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(13) | Includes 5,000 shares held by the Lip-Bu Tan and Ysa Loo, TTEES of which Mr. Tan is a co-trustee and 36,761 shares subject to options exercisable within 60 days of May 15, 2005. |
(14) | Includes 9,393,143 shares subject to options exercisable within 60 days of May 15, 2005. Also includes 18,571,427 shares issuable upon the conversion of $195 million in aggregate principal amount of our convertible junior subordinated notes due March 20, 2008, of which Mr. Davidson could be deemed to have shared voting or dispositive power. |
• | in which the amount involved exceeded or will exceed $60,000; and | |
• | in which any director, nominee, executive officer, holder of more than 5% of our ordinary shares or any member of their immediate family had or will have a direct or indirect material interest. |
Date | Amount of Loan | Interest Rate | ||||||
July 2000 | $ | 309,335 | 6.40 | % | ||||
August 2000 | 202,858 | 6.22 | ||||||
November 2000 | 997,336 | 6.09 | ||||||
August 2001 | 151,107 | 5.72 | ||||||
November 2001 | 117,269 | 5.05 | ||||||
December 2001 | 33,594 | 5.05 |
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• | Item 8, “Financial Statements and Supplementary Data”; | |
• | Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”; and | |
• | Item 7A, “Quantitative and Qualitative Disclosures About Market Risk”. |
• | our consolidated financial statements (which are identical to those included in the Annual Report on Form 10-K, described above); | |
• | supplementary financial statements (which reflect solely our standalone financial results, with our subsidiaries accounted for under the equity method rather than consolidated, and which we refer to in this section as the Parent financial statements); | |
• | a Report of the Directors; | |
• | a Statement of Directors; and | |
• | the Auditors’ Report of Deloitte & Touche, our Singapore statutory auditors for the financial year ended March 31, 2005. | |
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Bernard Liew Jin Yang |
Joint Secretary |
33
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S-2 | ||||
S-6 | ||||
S-7 | ||||
S-8 | ||||
S-45 |
S-1
Table of Contents
Michael E. Marks | |
Richard L. Sharp | |
James A. Davidson | |
Patrick Foley | |
Michael J. Moritz | |
Lip-Bu Tan |
Interest Held | ||||||||
As of | As of | |||||||
Ordinary Shares, S$0.01 Each, in Flextronics International Ltd. | March 31, 2004 | March 31, 2005 | ||||||
Michael E. Marks | 3,520,059 | 3,570,059 | ||||||
Richard L. Sharp | 6,037,952 | 2,425,952 | ||||||
James A. Davidson | 50,834 | 50,834 | ||||||
Michael J. Moritz | 407,432 | 407,432 | ||||||
Lip-Bu Tan | 5,000 | 5,000 |
As of | As of | |||||||||||||||
March 31, 2004 | March 31, 2005 | Exercise Price | Exercisable Period | |||||||||||||
Michael E. Marks | 600,000 | — | 14.5000 | 10.01.99 to 10.01.04 | ||||||||||||
1,000,000 | 1,000,000 | 23.1875 | 12.20.00 to 12.20.10 | |||||||||||||
200,000 | 200,000 | 13.9800 | 09.21.01 to 09.21.11 | |||||||||||||
400,000 | 400,000 | 15.9000 | 10.01.01 to 10.01.11 | |||||||||||||
5,000,000 | 5,000,000 | 7.9000 | 07.01.02 to 07.01.12 | |||||||||||||
— | 1,000,000 | 17.6900 | 04.21.04 to 04.21.14 | |||||||||||||
— | 1,375,000 | 11.5300 | 08.23.04 to 08.23.14 |
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As of | As of | |||||||||||||||
March 31, 2004 | March 31, 2005 | Exercise Price | Exercisable Period | |||||||||||||
Richard L. Sharp | 24,000 | — | 13.8750 | 08.27.99 to 08.27.04 | ||||||||||||
6,000 | 6,000 | 42.0313 | 09.21.00 to 09.21.05 | |||||||||||||
6,000 | 6,000 | 14.1000 | 09.20.01 to 09.20.06 | |||||||||||||
10,000 | 10,000 | 7.9000 | 07.01.02 to 07.01.07 | |||||||||||||
12,500 | 12,500 | 9.5100 | 08.29.02 to 08.29.07 | |||||||||||||
12,500 | 12,500 | 14.2200 | 09.30.03 to 09.30.08 | |||||||||||||
20,000 | 20,000 | 17.5000 | 01.22.04 to 01.22.09 | |||||||||||||
— | 20,000 | 10.0800 | 08.12.04 to 08.12.09 | |||||||||||||
— | 12,500 | 13.5300 | 09.23.04 to 09.23.09 | |||||||||||||
James A. Davidson | 25,000 | 25,000 | 9.3500 | 03.20.03 to 03.20.08 | ||||||||||||
6,610 | 6,610 | 14.2200 | 09.30.03 to 09.30.08 | |||||||||||||
20,000 | 20,000 | 17.5000 | 01.22.04 to 01.22.09 | |||||||||||||
— | 20,000 | 10.0800 | 08.12.04 to 08.12.09 | |||||||||||||
— | 12,500 | 13.5300 | 09.23.04 to 09.23.09 | |||||||||||||
Patrick Foley | 24,000 | — | 13.8750 | 08.27.99 to 08.27.04 | ||||||||||||
6,000 | 6,000 | 42.0313 | 09.21.00 to 09.21.05 | |||||||||||||
6,000 | 6,000 | 14.1000 | 09.20.01 to 09.20.06 | |||||||||||||
10,000 | 10,000 | 7.9000 | 07.01.02 to 07.01.07 | |||||||||||||
12,500 | 12,500 | 9.5100 | 08.29.02 to 08.29.07 | |||||||||||||
12,500 | 12,500 | 14.2200 | 09.30.03 to 09.30.08 | |||||||||||||
20,000 | 20,000 | 17.5000 | 01.22.04 to 01.22.09 | |||||||||||||
— | 20,000 | 10.0800 | 08.12.04 to 08.12.09 | |||||||||||||
— | 12,500 | 13.5300 | 09.23.04 to 09.23.09 | |||||||||||||
Michael J. Moritz | 24,000 | — | 13.8750 | 08.27.99 to 08.27.04 | ||||||||||||
6,000 | 6,000 | 42.0313 | 09.21.00 to 09.21.05 | |||||||||||||
6,000 | 6,000 | 14.1000 | 09.20.01 to 09.20.06 | |||||||||||||
10,000 | 10,000 | 7.9000 | 07.01.02 to 07.01.07 | |||||||||||||
12,500 | 12,500 | 9.5100 | 08.29.02 to 08.29.07 | |||||||||||||
12,500 | 12,500 | 14.2200 | 09.30.03 to 09.30.08 | |||||||||||||
20,000 | 20,000 | 17.5000 | 01.22.04 to 01.22.09 | |||||||||||||
— | 20,000 | 10.0800 | 08.12.04 to 08.12.09 | |||||||||||||
— | 12,500 | 13.5300 | 09.23.04 to 09.23.09 | |||||||||||||
Lip-Bu Tan | 25,000 | 25,000 | 9.0000 | 04.03.03 to 04.03.08 | ||||||||||||
6,165 | 6,165 | 14.2200 | 09.30.03 to 09.30.08 | |||||||||||||
20,000 | 20,000 | 17.5000 | 01.22.04 to 01.22.09 | |||||||||||||
— | 20,000 | 10.0800 | 08.12.04 to 08.12.09 | |||||||||||||
— | 12,500 | 13.5300 | 09.23.04 to 09.23.09 |
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2004 Award Plan (the “2004 Plan”) |
2002 Interim Incentive Plan (the “2002 Plan”) |
2001 Equity Incentive Plan (the “2001 Plan”) |
Employee Share Purchase Plan (the “ESPP”) |
S-4
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On Behalf of the Board of Directors | |
/s/MICHAEL E. MARKS | |
Director | |
/s/MICHAEL J. MORITZ | |
Director |
S-5
Table of Contents
On Behalf of the Board of Directors | |
/s/MICHAEL E. MARKS | |
Director | |
/s/MICHAEL J. MORITZ | |
Director |
S-6
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a) the statutory financial statements are properly drawn up in accordance with the provisions of the Singapore Companies Act, Cap. 50 (“Act”) and accounting principles generally accepted in the United States of America (the use of which is approved by the Accounting and Corporate Regulatory Authority in Singapore) so as to give a true and fair view of the state of affairs of the Company and of the Parent as at March 31, 2005, and of the results, changes in equity and cash flows of the Company for the financial year then ended; and | |
b) the accounting and other records required by the Act to be kept by the Parent and by those subsidiaries incorporated in Singapore of which we are the auditors have been properly kept in accordance with the provisions of the Act. |
S-7
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March 31, | ||||||||||
2005 | 2004 | |||||||||
(In thousands, except share | ||||||||||
and per share amounts) | ||||||||||
ASSETS | ||||||||||
CURRENT ASSETS: | ||||||||||
Cash and cash equivalents | $ | 869,258 | $ | 615,276 | ||||||
Accounts receivable, less allowance for doubtful accounts of $31,166 and $38,736 as of March 31, 2005, and 2004, respectively | 1,842,010 | 1,871,637 | ||||||||
Inventories | 1,518,866 | 1,179,513 | ||||||||
Deferred income taxes | 12,117 | 14,244 | ||||||||
Other current assets | 544,914 | 581,063 | ||||||||
Total current assets | 4,787,165 | 4,261,733 | ||||||||
Property and equipment, net | 1,704,516 | 1,625,000 | ||||||||
Deferred income taxes | 684,952 | 604,785 | ||||||||
Goodwill | 3,359,477 | 2,653,372 | ||||||||
Other intangible assets, net | 142,712 | 68,060 | ||||||||
Other assets | 328,750 | 370,987 | ||||||||
Total assets | $ | 11,007,572 | $ | 9,583,937 | ||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||
CURRENT LIABILITIES: | ||||||||||
Bank borrowings and current portion of long-term debt | $ | 17,448 | $ | 96,287 | ||||||
Current portion of capital lease obligations | 8,718 | 8,203 | ||||||||
Accounts payable | 2,523,269 | 2,145,174 | ||||||||
Accrued payroll | 285,504 | 263,949 | ||||||||
Other current liabilities | 1,045,255 | 863,304 | ||||||||
Total current liabilities | 3,880,194 | 3,376,917 | ||||||||
Long-term debt, net of current portion | 1,700,429 | 1,609,177 | ||||||||
Capital lease obligation, net of current portion | 9,141 | 15,084 | ||||||||
Other liabilities | 193,760 | 215,546 | ||||||||
Commitments and contingencies (Note 7) | ||||||||||
SHAREHOLDERS’ EQUITY: | ||||||||||
Ordinary shares, S$0.01 par value; authorized — 1,500,000,000 shares; issued and outstanding — 568,329,662 and 529,944,282 shares as of March 31, 2005, and 2004, respectively | 3,360 | 3,135 | ||||||||
Additional paid-in capital | 5,486,404 | 5,014,990 | ||||||||
Accumulated deficit | (382,600 | ) | (722,471 | ) | ||||||
Accumulated other comprehensive income (loss) | 123,683 | 78,105 | ||||||||
Deferred compensation | (6,799 | ) | (6,546 | ) | ||||||
Total shareholders’ equity | 5,224,048 | 4,367,213 | ||||||||
Total liabilities and shareholders’ equity | $ | 11,007,572 | $ | 9,583,937 | ||||||
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Fiscal Year Ended March 31, | |||||||||||||
2005 | 2004 | 2003 | |||||||||||
(In thousands, except per share amounts) | |||||||||||||
Net sales | $ | 15,908,223 | $ | 14,530,416 | $ | 13,378,699 | |||||||
Cost of sales | 14,827,860 | 13,704,576 | 12,650,402 | ||||||||||
Restructuring charges | 78,381 | 477,305 | 266,244 | ||||||||||
Gross profit | 1,001,982 | 348,535 | 462,053 | ||||||||||
Selling, general and administrative expenses | 568,533 | 487,287 | 456,199 | ||||||||||
Intangibles amortization | 42,520 | 36,715 | 22,146 | ||||||||||
Restructuring charges | 16,978 | 63,043 | 30,711 | ||||||||||
Other charges (income), net | (13,491 | ) | — | 7,456 | |||||||||
Interest and other expense, net | 94,205 | 77,700 | 92,780 | ||||||||||
Loss on early extinguishment of debt | 16,328 | 103,909 | — | ||||||||||
Income (loss) before income taxes | 276,909 | (420,119 | ) | (147,239 | ) | ||||||||
Benefit from income taxes | (62,962 | ) | (67,741 | ) | (63,786 | ) | |||||||
Net income (loss) | $ | 339,871 | $ | (352,378 | ) | $ | (83,453 | ) | |||||
Earnings (loss) per share: | |||||||||||||
Basic | $ | 0.61 | $ | (0.67 | ) | $ | (0.16 | ) | |||||
Diluted | $ | 0.58 | $ | (0.67 | ) | $ | (0.16 | ) | |||||
Weighted average shares used in computing per share amounts: | |||||||||||||
Basic | 552,920 | 525,318 | 517,198 | ||||||||||
Diluted | 585,499 | 525,318 | 517,198 | ||||||||||
S-9
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Fiscal Year Ended March 31, | |||||||||||||
2005 | 2004 | 2003 | |||||||||||
(In thousands) | |||||||||||||
Net income (loss) | $ | 339,871 | $ | (352,378 | ) | $ | (83,453 | ) | |||||
Other comprehensive income (loss): | |||||||||||||
Foreign currency translation adjustment, net of taxes | 56,255 | 105,963 | 127,518 | ||||||||||
Unrealized gain (loss) on investment and derivatives, net of taxes | (10,667 | ) | 5,561 | (1,223 | ) | ||||||||
Comprehensive income (loss) | $ | 385,449 | $ | (240,854 | ) | $ | 42,842 | ||||||
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Table of Contents
Accumulated | ||||||||||||||||||||||||||||
Additional | Other | Total | ||||||||||||||||||||||||||
Paid-In | Accumulated | Comprehensive | Deferred | Shareholders’ | ||||||||||||||||||||||||
Shares | Amount | Capital | Deficit | Income (Loss) | Compensation | Equity | ||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||
BALANCE AT MARCH 31, 2002 | 513,012 | $ | 3,043 | $ | 4,898,807 | $ | (286,640 | ) | $ | (159,714 | ) | $ | — | $ | 4,455,496 | |||||||||||||
Issuance of ordinary shares for acquisitions | 1,639 | 3 | 14,709 | — | — | — | 14,712 | |||||||||||||||||||||
Exercise of stock options | 4,567 | 26 | 17,970 | — | — | — | 17,996 | |||||||||||||||||||||
Ordinary shares issued under Employee Stock Purchase Plan | 1,010 | 6 | 9,883 | — | — | — | 9,889 | |||||||||||||||||||||
Net loss | — | — | — | (83,453 | ) | — | — | (83,453 | ) | |||||||||||||||||||
Deferred stock compensation | — | — | 7,232 | — | — | (7,232 | ) | — | ||||||||||||||||||||
Amortization of deferred stock compensation | — | — | — | — | — | 1,085 | 1,085 | |||||||||||||||||||||
Unrealized loss on derivative instruments, net of taxes | — | — | — | — | (1,223 | ) | — | (1,223 | ) | |||||||||||||||||||
Foreign currency translation adjustments, net of taxes | — | — | — | — | 127,518 | — | 127,518 | |||||||||||||||||||||
BALANCE AT MARCH 31, 2003 | 520,228 | 3,078 | 4,948,601 | (370,093 | ) | (33,419 | ) | (6,147 | ) | 4,542,020 | ||||||||||||||||||
Issuance of ordinary shares for acquisitions | 517 | 2 | 3,160 | — | — | — | 3,162 | |||||||||||||||||||||
Exercise of stock options | 8,235 | 49 | 54,776 | — | — | — | 54,825 | |||||||||||||||||||||
Ordinary shares issued under Employee Stock Purchase Plan | 718 | 5 | 6,283 | — | — | — | 6,288 | |||||||||||||||||||||
Issuance of restricted shares | 246 | 1 | (1 | ) | — | — | — | — | ||||||||||||||||||||
Net loss | — | — | — | (352,378 | ) | — | — | (352,378 | ) | |||||||||||||||||||
Deferred stock compensation | — | — | 2,171 | — | — | (2,171 | ) | — | ||||||||||||||||||||
Amortization of deferred stock compensation | — | — | — | — | — | 1,772 | 1,772 | |||||||||||||||||||||
Unrealized gain on investment and derivatives, net of taxes | — | — | — | — | 5,561 | — | 5,561 | |||||||||||||||||||||
Foreign currency translation adjustments, net of taxes | — | — | — | — | 105,963 | — | 105,963 | |||||||||||||||||||||
BALANCE AT MARCH 31, 2004 | 529,444 | 3,135 | 5,014,990 | (722,471 | ) | 78,105 | (6,546 | ) | 4,367,213 | |||||||||||||||||||
Issuance of ordinary shares for acquisitions | 10,004 | 60 | 127,166 | — | — | — | 127,226 | |||||||||||||||||||||
Exercise of stock options | 3,182 | 19 | 29,765 | — | — | — | 29,784 | |||||||||||||||||||||
Modification of stock options grants (note 11) | — | — | 5,575 | — | — | — | 5,575 | |||||||||||||||||||||
Ordinary shares issued under Employee Stock Purchase Plan | 561 | 3 | 6,814 | — | — | — | 6,817 | |||||||||||||||||||||
Sales of ordinary shares in public offering, net of offering costs of $4,636 | 24,331 | 142 | 299,358 | — | — | — | 299,500 | |||||||||||||||||||||
Issuance of restricted ordinary shares | 308 | 1 | 328 | — | — | — | 329 | |||||||||||||||||||||
Net income | — | — | — | 339,871 | — | — | 339,871 | |||||||||||||||||||||
Deferred stock compensation | — | — | 2,408 | — | — | (2,408 | ) | — | ||||||||||||||||||||
Amortization of deferred stock compensation | — | — | — | — | — | 2,155 | 2,155 | |||||||||||||||||||||
Unrealized loss on investment and derivatives, net of taxes | — | — | — | — | (10,677 | ) | — | (10,677 | ) | |||||||||||||||||||
Foreign currency translation adjustments, net of taxes | — | — | — | — | 56,255 | — | 56,255 | |||||||||||||||||||||
BALANCE AT MARCH 31, 2005 | 568,330 | $ | 3,360 | $ | 5,486,404 | $ | (382,600 | ) | $ | 123,683 | $ | (6,799 | ) | $ | 5,224,048 | |||||||||||||
S-11
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Fiscal Year Ended March 31, | |||||||||||||||
2005 | 2004 | 2003 | |||||||||||||
(In thousands) | |||||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||||||
Net income (loss) | $ | 339,871 | $ | (352,378 | ) | $ | (83,453 | ) | |||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||||||||
Depreciation, amortization and impairment charges | 373,670 | 662,798 | 419,086 | ||||||||||||
Gain on sale of equipment | (1,752 | ) | (2,206 | ) | (1,200 | ) | |||||||||
Provision for doubtful accounts | 4,848 | 1,256 | 2,647 | ||||||||||||
Equity in earnings (losses) of associated companies and other charges | 2,785 | (181 | ) | 27,086 | |||||||||||
Amortization of deferred stock compensation | 2,155 | 1,772 | 1,085 | ||||||||||||
Deferred income taxes | (84,070 | ) | (97,171 | ) | (92,798 | ) | |||||||||
Changes in operating assets and liabilities, net of acquisitions: | |||||||||||||||
Accounts receivable | 110,907 | (381,948 | ) | 496,193 | |||||||||||
Inventories | (105,126 | ) | (40,302 | ) | 189,601 | ||||||||||
Other assets | 61,341 | (139,691 | ) | 127,535 | |||||||||||
Accounts payable and other current liabilities | 19,636 | 535,749 | (477,998 | ) | |||||||||||
Net cash provided by operating activities | 724,265 | 187,698 | 607,784 | ||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||||||
Purchases of property and equipment, net of disposition | (289,680 | ) | (181,461 | ) | (208,311 | ) | |||||||||
Purchases of OEM facilities and related assets | — | — | (8,143 | ) | |||||||||||
Acquisition of businesses, net of cash acquired | (469,003 | ) | (119,983 | ) | (501,602 | ) | |||||||||
Other investments and notes receivable | 20,406 | (102,323 | ) | (94,990 | ) | ||||||||||
Net cash used in investing activities | (738,277 | ) | (403,767 | ) | (813,046 | ) | |||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||||||
Bank borrowings and proceeds from long-term debt | 1,793,969 | 1,446,592 | 892,961 | ||||||||||||
Repayments of bank borrowings and long-term debt | (1,789,862 | ) | (1,008,692 | ) | (1,000,159 | ) | |||||||||
Repayment of capital lease obligations | (10,672 | ) | (12,613 | ) | (24,231 | ) | |||||||||
Payment for early extinguishment of debt | (13,201 | ) | (91,647 | ) | — | ||||||||||
Proceeds from exercise of stock options and Employee Stock Purchase Plan | 36,601 | 61,113 | 27,885 | ||||||||||||
Net proceeds from issuance of ordinary shares in public offering | 299,500 | — | — | ||||||||||||
Net cash provided by (used in) financing activities | 316,335 | 394,753 | (103,544 | ) | |||||||||||
Effect of exchange rate on cash | (48,341 | ) | 12,572 | (12,298 | ) | ||||||||||
Net increase (decrease) in cash and cash equivalents | 253,982 | 191,256 | (321,104 | ) | |||||||||||
Cash and cash equivalents, beginning of year | 615,276 | 424,020 | 745,124 | ||||||||||||
Cash and cash equivalents, end of year | $ | 869,258 | $ | 615,276 | $ | 424,020 | |||||||||
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Table of Contents
1. | ORGANIZATION OF THE COMPANY |
2. | SUMMARY OF ACCOUNTING POLICIES |
Basis of Presentation and Principles of Consolidation |
Use of Estimates |
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Table of Contents
Translation of Foreign Currencies |
Revenue Recognition |
Cash and Cash Equivalents |
March 31, | ||||||||
2005 | 2004 | |||||||
(In thousands) | ||||||||
Cash and bank balances | $ | 832,290 | $ | 596,259 | ||||
Money market funds | 15,911 | 14,501 | ||||||
Certificates of deposits | 21,057 | 4,516 | ||||||
$ | 869,258 | $ | 615,276 | |||||
Long-term Investments |
Concentration of Credit Risk |
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Table of Contents
Inventories |
March 31, | ||||||||
2005 | 2004 | |||||||
(In thousands) | ||||||||
Raw materials | $ | 711,251 | $ | 622,905 | ||||
Work-in-progress | 306,833 | 242,435 | ||||||
Finished goods | 500,782 | 314,173 | ||||||
$ | 1,518,866 | $ | 1,179,513 | |||||
Property and Equipment |
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March 31, | ||||||||
2005 | 2004 | |||||||
(In thousands) | ||||||||
Machinery and equipment | $ | 1,451,083 | $ | 1,333,578 | ||||
Buildings | 767,120 | 741,692 | ||||||
Leasehold improvements | 100,218 | 86,133 | ||||||
Computer equipment and software | 261,249 | 232,129 | ||||||
Land and other | 370,063 | 358,646 | ||||||
2,949,733 | 2,752,178 | |||||||
Accumulated depreciation and amortization | (1,245,217 | ) | (1,127,178 | ) | ||||
Property and equipment, net | $ | 1,704,516 | $ | 1,625,000 | ||||
Deferred Income Taxes |
Goodwill and Other Intangibles |
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2005 | 2004 | ||||||||
(In thousands) | |||||||||
Balance, beginning of the year, | $ | 2,653,372 | $ | 2,121,997 | |||||
Additions | 594,691 | 450,959 | |||||||
Reclassification to other intangibles* | (5,270 | ) | (2,381 | ) | |||||
Foreign currency translation adjustments | 116,684 | 82,797 | |||||||
Balance, end of the year, | $ | 3,359,477 | $ | 2,653,372 | |||||
* | Reclassification resulting from the completion of the final allocation of the Company’s intangible assets acquired through certain business combinations in a period subsequent to the respective period of acquisition, based on the completion of third-party valuations. |
March 31, 2005 | March 31, 2004 | |||||||||||||||||||||||||
Gross | Net | Gross | Net | |||||||||||||||||||||||
Carrying | Accumulated | Carrying | Carrying | Accumulated | Carrying | |||||||||||||||||||||
Amount | Amortization | Amount | Amount | Amortization | Amount | |||||||||||||||||||||
(In thousands) | (In thousands) | |||||||||||||||||||||||||
Intangible assets: | ||||||||||||||||||||||||||
Contractual agreements | $ | 104,383 | $ | (58,221 | ) | $ | 46,162 | $ | 77,706 | $ | (31,584 | ) | $ | 46,122 | ||||||||||||
Patents and trademarks | 8,082 | (1,688 | ) | 6,394 | 2,611 | (536 | ) | 2,075 | ||||||||||||||||||
Developed technologies | 11,812 | (1,231 | ) | 10,581 | 500 | (84 | ) | 416 | ||||||||||||||||||
Customer relationships | 71,353 | (4,342 | ) | 67,011 | 3,286 | (426 | ) | 2,860 | ||||||||||||||||||
Other acquired intangibles | 32,619 | (20,055 | ) | 12,564 | 28,234 | (11,647 | ) | 16,587 | ||||||||||||||||||
Total | $ | 228,249 | $ | (85,537 | ) | $ | 142,712 | $ | 112,337 | $ | (44,277 | ) | $ | 68,060 | ||||||||||||
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Table of Contents
Fiscal Years Ending March 31, | Amount | ||||
(In thousands) | |||||
2006 | $ | 37,547 | |||
2007 | 22,336 | ||||
2008 | 19,082 | ||||
2009 | 14,813 | ||||
2010 | 13,876 | ||||
Thereafter | 35,058 | ||||
Total amortization expenses | $ | 142,712 | |||
Derivative Instruments and Hedging Activities |
Accounting for Stock-Based Compensation |
1. Modified Prospective Application Method: Under this method SFAS 123R is applied to new awards and to awards modified, repurchased, or cancelled after the effective date. Compensation cost for the portion of awards for which service has not been rendered (such as unvested options) that are outstanding as of the date of adoption shall be recognized as the remaining services are rendered. The compensation cost relating to unvested awards at the date of adoption shall be based on the grant-date fair value of those awards as calculated for pro forma disclosures under the original SFAS 123. |
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2. Modified Retrospective Application Method: Companies may also use the Modified Retrospective Application Method for all prior years for which the original SFAS 123 was effective or only to prior interim periods in the year of initial adoption. If the Modified Retrospective Application Method is applied, financial statements for prior periods shall be adjusted to give effect to the fair-value-based method of accounting for awards on a consistent basis with the pro forma disclosures required for those periods under the original SFAS 123. |
Fiscal Year Ended March 31, | ||||||||||||
2005 | 2004 | 2003 | ||||||||||
(In thousands) | ||||||||||||
Net income (loss), as reported | $ | 339,871 | $ | (352,378 | ) | $ | (83,453 | ) | ||||
Add: Stock-based employee compensation expense included in reported net income (loss), net of tax | $ | 2,155 | $ | 1,772 | $ | 1,085 | ||||||
Less: Fair value compensation costs, net of taxes | (175,981 | ) | (54,623 | ) | (72,911 | ) | ||||||
Pro forma net income (loss) | $ | 166,045 | $ | (405,229 | ) | $ | (155,279 | ) | ||||
Basic net income (loss) per share: | ||||||||||||
As reported | $ | 0.61 | $ | (0.67 | ) | $ | (0.16 | ) | ||||
Pro forma | $ | 0.30 | $ | (0.77 | ) | $ | (0.30 | ) | ||||
Diluted net income (loss) per share: | ||||||||||||
As reported | $ | 0.58 | $ | (0.67 | ) | $ | (0.16 | ) | ||||
Pro forma | $ | 0.29 | $ | (0.77 | ) | $ | (0.30 | ) | ||||
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Fiscal Year Ended March 31, | ||||||||||||
2005 | 2004 | 2003 | ||||||||||
Volatility | 79.4 | % | 84.8 | % | 77.0 | % | ||||||
Risk-free interest rate | 3.0 | % | 2.3 | % | 3.8 | % | ||||||
Dividend yield | 0.0 | % | 0.0 | % | 0.0 | % | ||||||
Expected option lives | 3.8 years | 3.8 years | 3.6 years |
Fiscal Year Ended March 31, | ||||||||||||
2005 | 2004 | 2003 | ||||||||||
Volatility | 41.3 | % | 44.0 | % | 44.0 | % | ||||||
Risk-free interest rate | 1.7 | % | 1.4 | % | 1.1 | % | ||||||
Dividend yield | 0.0 | % | 0.0 | % | 0.0 | % | ||||||
Expected option lives | 0.5 years | 0.5 years | 0.5 years |
Earnings (Loss) Per Share |
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Fiscal Year Ended March 31, | ||||||||||||||
2005 | 2004 | 2003 | ||||||||||||
(In thousands, except per share amounts) | ||||||||||||||
Basic earnings (loss) per share: | ||||||||||||||
Net income (loss) | $ | 339,871 | $ | (352,378 | ) | $ | (83,453 | ) | ||||||
Shares used in computation: | ||||||||||||||
Weighted-average ordinary shares outstanding | 552,920 | 525,318 | 517,198 | |||||||||||
Basic earnings (loss) per share | $ | 0.61 | $ | (0.67 | ) | $ | (0.16 | ) | ||||||
Diluted earnings (loss) per share: | ||||||||||||||
Net income (loss) | $ | 339,871 | $ | (352,378 | ) | $ | (83,453 | ) | ||||||
Shares used in computation: | ||||||||||||||
Weighted average ordinary shares outstanding | 552,920 | 525,318 | 517,198 | |||||||||||
Weighted average ordinary share equivalents from Stock options and awards(1) | 12,956 | — | — | |||||||||||
Weighted average ordinary share equivalents from convertible notes(2) | 19,623 | — | — | |||||||||||
Weighted average ordinary shares and ordinary share equivalents outstanding | 585,499 | 525,318 | 517,198 | |||||||||||
Diluted earnings (loss) per share | $ | 0.58 | $ | (0.67 | ) | $ | (0.16 | ) | ||||||
(1) | Due to the Company’s reported net loss, the ordinary share equivalents from stock options and restricted stock to purchase 13,668,419 and 8,730,635 shares outstanding were excluded from the computation of diluted earnings (loss) per share during fiscal years 2004 and 2003, respectively, because the inclusion would be anti- dilutive for the periods. |
Also, the ordinary share equivalents from stock options to purchase 24,186,135, 14,750,432 and 26,010,567 shares outstanding during fiscal years 2005, 2004 and 2003, respectively, were excluded from the computation of diluted earnings (loss) per share because the exercise price of these options was greater than the average market price of the Company’s ordinary shares during the respective periods. |
(2) | Ordinary share equivalents from the zero coupon convertible junior subordinated notes of 19,047,619 and 809,772 shares outstanding were anti-dilutive in fiscal years 2004 and 2003, respectively. Therefore, these are not assumed to be converted for diluted earnings (loss) per share computation. Such shares were included as common stock equivalents during fiscal year 2005. |
In addition, the ordinary share equivalents from the principal portion of the 1% convertible subordinated notes due August 2010 are excluded from the computation of diluted earnings (loss) per share, as the Company has the positive intent and ability to settle the principal amount of the notes in cash. The Company intends to settle any conversion spread (excess of conversion value over face value) in stock. Accordingly, 575,587 ordinary shares equivalents from the conversion spread have been included in the shares used for computation of diluted earnings per share during fiscal 2005. The ordinary shares equivalent of 851,274 from the conversion spread were anti- dilutive in fiscal year 2004, and therefore, these were excluded from the computation of diluted earnings (loss) per share during fiscal year 2004. No such shares were outstanding during fiscal year 2003. |
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Recent Accounting Pronouncements |
Inventory Costs |
Accounting and Disclosure Guidance for the Foreign Earnings Repatriation Provision within the American Jobs Creation Act of 2004 |
Share-Based Payments |
Exchanges of Nonmonetary Assets |
Implicit Variable Interests under FASB Interpretation No. 46 (revised December 2003), Consolidation of Variable Interest Entities |
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Reclassifications |
3. | SUPPLEMENTAL CASH FLOW DISCLOSURES |
Fiscal Year Ended March 31, | |||||||||||||
2005 | 2004 | 2003 | |||||||||||
(In thousands) | |||||||||||||
Net cash paid for: | |||||||||||||
Interest | $ | 76,060 | $ | 89,244 | $ | 107,395 | |||||||
Income taxes | $ | 24,246 | $ | 36,356 | $ | 11,348 | |||||||
Non-cash investing and financing activities: | |||||||||||||
Equipment acquired under capital lease obligations | $ | 6,091 | $ | 18,713 | $ | — | |||||||
Issuance of ordinary shares for acquisition of businesses | $ | 127,226 | $ | 3,162 | $ | 14,712 |
4. | BANK BORROWINGS AND LONG-TERM DEBT |
March 31, | ||||||||
2005 | 2004 | |||||||
(In thousands) | ||||||||
Short term bank borrowings | $ | 10,304 | $ | 89,335 | ||||
0.00% convertible junior subordinated notes | 200,000 | 200,000 | ||||||
9.875% senior subordinated notes, net of discount | 7,659 | 7,659 | ||||||
9.75% Euro senior subordinated notes | 7,432 | 181,422 | ||||||
1.0% convertible subordinated notes | 500,000 | 500,000 | ||||||
6.5% senior subordinated notes | 399,650 | 399,650 | ||||||
6.25% senior subordinated notes | 490,270 | — | ||||||
Outstanding under revolving lines of credit | — | 220,000 | ||||||
Other | 102,562 | 107,398 | ||||||
1,717,877 | 1,705,464 | |||||||
Current portion | (17,448 | ) | (96,287 | ) | ||||
Non-current portion | $ | 1,700,429 | $ | 1,609,177 | ||||
Fiscal Years Ending March 31, | Amount | ||||
(In thousands) | |||||
2006 | $ | 17,448 | |||
2007 | 28,417 | ||||
2008 | 200,000 | ||||
2009 | — | ||||
2010 | — | ||||
Thereafter | 1,472,012 | ||||
Total | $ | 1,717,877 | |||
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Table of Contents
Revolving Credit Facilities and Other Credit Lines |
9.75% Euro Senior Subordinated Notes |
6.25% Senior Subordinated Notes |
S-24
Table of Contents
1.0% Convertible Subordinated Notes |
6.5% Senior Subordinated Notes |
Zero Coupon Convertible Junior Subordinated Notes |
5. | FINANCIAL INSTRUMENTS |
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6. | TRADE RECEIVABLES SECURIZATION |
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7. | COMMITMENTS AND CONTINGENCIES |
Capital | Operating | ||||||||
Fiscal Year Ending March 31, | Lease | Lease | |||||||
(In thousands) | |||||||||
2006 | $ | 9,202 | $ | 77,497 | |||||
2007 | 5,764 | 54,496 | |||||||
2008 | 1,044 | 36,505 | |||||||
2009 | 972 | 24,969 | |||||||
2010 | 690 | 19,549 | |||||||
Thereafter | 1,207 | 202,900 | |||||||
Total minimum lease payments | 18,879 | $ | 415,916 | ||||||
Amount representing interest | (1,020 | ) | |||||||
Present value of total minimum lease payments | 17,859 | ||||||||
Current portion | (8,718 | ) | |||||||
Capital lease obligation, net of current portion | $ | 9,141 | |||||||
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8. | INCOME TAXES |
Fiscal Year Ended March 31, | |||||||||||||
2005 | 2004 | 2003 | |||||||||||
(In thousands) | |||||||||||||
Domestic | $ | 42,374 | $ | 19,251 | $ | 33,628 | |||||||
Foreign | 234,535 | (439,370 | ) | (180,867 | ) | ||||||||
Total | $ | 276,909 | $ | (420,119 | ) | $ | (147,239 | ) | |||||
Fiscal Year Ended March 31, | |||||||||||||
2005 | 2004 | 2003 | |||||||||||
(In thousands) | |||||||||||||
Current: | |||||||||||||
Domestic | $ | 2,088 | $ | 3,388 | $ | 4,095 | |||||||
Foreign | 28,516 | 91,282 | 18,361 | ||||||||||
30,604 | 94,670 | 22,456 | |||||||||||
Deferred: | |||||||||||||
Domestic | 870 | (599 | ) | 700 | |||||||||
Foreign | (94,436 | ) | (161,812 | ) | (86,942 | ) | |||||||
(93,566 | ) | (162,411 | ) | (86,242 | ) | ||||||||
Benefit from income taxes | $ | (62,962 | ) | $ | (67,741 | ) | $ | (63,786 | ) | ||||
Fiscal Year Ended March 31, | |||||||||||||
2005 | 2004 | 2003 | |||||||||||
(In thousands) | |||||||||||||
Income tax based on domestic statutory rates | $ | 55,382 | $ | (84,024 | ) | $ | (32,392 | ) | |||||
Effect of tax rate differential | (318,256 | ) | (114,143 | ) | (128,969 | ) | |||||||
Goodwill and other intangibles amortization | 4,252 | 3,672 | 4,872 | ||||||||||
Change in valuation allowance | 202,463 | 142,556 | 117,894 | ||||||||||
Other | (6,803 | ) | (15,802 | ) | (25,191 | ) | |||||||
Benefit from income taxes | $ | (62,962 | ) | $ | (67,741 | ) | $ | (63,786 | ) | ||||
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March 31, | ||||||||||
2005 | 2004 | |||||||||
(In thousands) | ||||||||||
Deferred tax liabilities: | ||||||||||
Fixed assets | $ | (37,669 | ) | $ | (39,373 | ) | ||||
Intangible assets | (26,633 | ) | (27,540 | ) | ||||||
Others | (3,874 | ) | (1,684 | ) | ||||||
Total deferred tax liabilities | (68,176 | ) | (68,597 | ) | ||||||
Deferred tax assets: | ||||||||||
Deferred compensation | 4,710 | 8,229 | ||||||||
Provision for inventory obsolescence | 14,466 | 15,138 | ||||||||
Provision for doubtful accounts | 1,303 | 3,674 | ||||||||
Net operating loss and other carryforwards | 1,564,628 | 1,169,906 | ||||||||
Others | 68,730 | 64,245 | ||||||||
1,653,837 | 1,261,193 | |||||||||
Valuation allowances | (888,592 | ) | (573,567 | ) | ||||||
Total deferred tax asset | 765,245 | 687,626 | ||||||||
Net deferred tax asset | $ | 697,069 | $ | 619,029 | ||||||
Classification of net deferred tax asset: | ||||||||||
Current | $ | 12,117 | $ | 14,244 | ||||||
Long-term | 684,952 | 604,785 | ||||||||
Total | $ | 697,069 | $ | 619,029 | ||||||
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9. | SHAREHOLDERS’ EQUITY |
Equity Offering |
Stock Option and Incentive Plans |
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March 31, 2005 | March 31, 2004 | March 31, 2003 | ||||||||||||||||||||||
Options | Price | Options | Price | Options | Price | |||||||||||||||||||
Outstanding, beginning of fiscal year | 50,303,999 | $ | 12.86 | 55,682,533 | $ | 11.35 | 45,641,139 | $ | 15.00 | |||||||||||||||
Granted | 18,461,056 | 13.94 | 8,841,856 | 15.60 | 19,864,076 | 6.97 | ||||||||||||||||||
Exercised | (3,182,087 | ) | 9.34 | (8,235,283 | ) | 6.66 | (4,567,256 | ) | 4.05 | |||||||||||||||
Forfeited | (8,004,567 | ) | 17.99 | (5,985,107 | ) | 11.39 | (5,255,426 | ) | 21.25 | |||||||||||||||
Outstanding, end of fiscal year | 57,578,401 | $ | 12.67 | 50,303,999 | $ | 12.86 | 55,682,533 | $ | 11.35 | |||||||||||||||
Options exercisable, end of fiscal year | 40,484,074 | 27,638,781 | 31,056,183 | |||||||||||||||||||||
Weighted average fair value per option granted | $ | 7.99 | $ | 9.47 | $ | 4.84 | ||||||||||||||||||
Options Outstanding | Options Exercisable | |||||||||||||||||||
Weighted | Weighted | Weighted | ||||||||||||||||||
Average | Average | Average | ||||||||||||||||||
Number of | Contractual | Exercise | Number of | Exercise | ||||||||||||||||
Range of Exercise Prices | Shares | Life | Price | Shares | Price | |||||||||||||||
$ 0.42 - $ 5.88 | 7,053,025 | 4.28 | $ | 4.63 | 5,998,121 | $ | 4.41 | |||||||||||||
$ 5.96 - $ 6.23 | 644,644 | 3.75 | 6.17 | 641,311 | 6.17 | |||||||||||||||
$ 7.13 - $ 7.90 | 11,754,976 | �� | 6.84 | 7.88 | 5,265,193 | 7.86 | ||||||||||||||
$ 8.01 - $11.53 | 5,836,848 | 7.64 | 10.20 | 2,245,515 | 8.88 | |||||||||||||||
$11.57 - $13.18 | 7,574,965 | 9.47 | 12.68 | 3,120,440 | 13.14 | |||||||||||||||
$13.35 - $15.90 | 8,219,876 | 7.19 | 14.70 | 6,721,552 | 14.99 | |||||||||||||||
$15.95 - $17.37 | 6,948,010 | 8.48 | 16.93 | 6,946,960 | 16.93 | |||||||||||||||
$17.38 - $23.19 | 7,474,801 | 6.90 | 19.71 | 7,473,726 | 19.71 | |||||||||||||||
$23.61 - $43.00 | 2,068,956 | 0.41 | 28.43 | 2,068,956 | 28.43 | |||||||||||||||
$44.13 - $44.13 | 2,300 | 0.44 | 44.13 | 2,300 | 44.13 | |||||||||||||||
$ 0.42 - $44.13 | 57,578,401 | 6.94 | $ | 12.67 | 40,484,074 | $ | 13.77 | |||||||||||||
10. | RESTRUCTURING CHARGES |
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Fiscal Year 2005 |
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Table of Contents
First | Second | Third | Fourth | |||||||||||||||||||||
Quarter | Quarter | Quarter | Quarter | Total | Nature | |||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
Americas: | ||||||||||||||||||||||||
Severance | $ | 1,793 | $ | — | $ | — | $ | — | $ | 1,793 | ||||||||||||||
Long-lived asset impairment | 365 | 125 | — | 5,300 | 5,790 | |||||||||||||||||||
Other exit costs | 1,598 | 321 | 170 | — | 2,089 | |||||||||||||||||||
Total restructuring charges | 3,756 | 446 | 170 | 5,300 | 9,672 | |||||||||||||||||||
Asia: | ||||||||||||||||||||||||
Severance | — | 872 | — | — | 872 | |||||||||||||||||||
Long-lived asset impairment | — | 267 | — | — | 267 | |||||||||||||||||||
Other exit costs | — | 1,220 | — | — | 1,220 | |||||||||||||||||||
Total restructuring charges | — | 2,359 | — | — | 2,359 | |||||||||||||||||||
Europe: | ||||||||||||||||||||||||
Severance | 17,447 | 15,613 | 29,092 | 1,515 | 63,667 | |||||||||||||||||||
Long-lived asset impairment | 100 | 5,743 | — | 795 | 6,638 | |||||||||||||||||||
Other exit costs | 2,285 | 9,341 | 1,397 | — | 13,023 | |||||||||||||||||||
Total restructuring charges | 19,832 | 30,697 | 30,489 | 2,310 | 83,328 | |||||||||||||||||||
Total | ||||||||||||||||||||||||
Severance | 19,240 | 16,485 | 29,092 | 1,515 | 66,332 | Cash | ||||||||||||||||||
Long-lived asset impairment | 465 | 6,135 | — | 6,095 | 12,695 | Non-cash | ||||||||||||||||||
Other exit costs | 3,883 | 10,882 | 1,567 | — | 16,332 | Cash & non-cash | ||||||||||||||||||
Total restructuring charges | $ | 23,588 | $ | 33,502 | $ | 30,659 | $ | 7,610 | $ | 95,359 | ||||||||||||||
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Long-Lived | ||||||||||||||||||
Asset | Other | |||||||||||||||||
Severance | Impairment | Exit Costs | Total | |||||||||||||||
(In thousands) | ||||||||||||||||||
Activities during the year: | ||||||||||||||||||
Provision | $ | 66,332 | $ | 12,695 | $ | 16,332 | $ | 95,359 | ||||||||||
Cash payments | (57,758 | ) | — | (6,977 | ) | (64,735 | ) | |||||||||||
Non-cash charges | — | (12,695 | ) | (6,624 | ) | (19,319 | ) | |||||||||||
Balance as of March 31, 2005 | 8,574 | — | 2,731 | 11,305 | ||||||||||||||
Less: | ||||||||||||||||||
Current portion (classified as other current liabilities) | (8,574 | ) | — | (799 | ) | (9,373 | ) | |||||||||||
Accrued facility closure costs, net of current portion (classified as other long-term liabilities) | $ | — | $ | — | $ | 1,932 | $ | 1,932 | ||||||||||
Fiscal Year 2004 |
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First | Second | Third | Fourth | |||||||||||||||||||||
Quarter | Quarter | Quarter | Quarter | Total | Nature | |||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
Americas: | ||||||||||||||||||||||||
Severance | $ | 3,691 | $ | 14,072 | $ | 5,023 | $ | 3,623 | $ | 26,409 | ||||||||||||||
Long-lived asset impairment | 64,844 | 18,024 | 2,273 | 8,247 | 93,388 | |||||||||||||||||||
Other exit costs | 17,736 | 18,492 | 18,978 | 25,772 | 80,978 | |||||||||||||||||||
Total restructuring charges | 86,271 | 50,588 | 26,274 | 37,642 | 200,775 | |||||||||||||||||||
Asia: | ||||||||||||||||||||||||
Severance | — | — | — | — | — | |||||||||||||||||||
Long-lived asset impairment | 111,340 | — | — | — | 111,340 | |||||||||||||||||||
Other exit costs | — | — | — | — | — | |||||||||||||||||||
Total restructuring charges | 111,340 | — | — | — | 111,340 | |||||||||||||||||||
Europe: | ||||||||||||||||||||||||
Severance | 8,200 | 6,003 | 28,081 | 35,040 | 77,324 | |||||||||||||||||||
Long-lived asset impairment | 114,388 | 1,497 | 8,008 | 2,539 | 126,432 | |||||||||||||||||||
Other exit costs | 6,909 | 2,164 | 8,656 | 6,748 | 24,477 | |||||||||||||||||||
Total restructuring charges | 129,497 | 9,664 | 44,745 | 44,327 | 228,233 | |||||||||||||||||||
Total: | ||||||||||||||||||||||||
Severance | 11,891 | 20,075 | 33,104 | 38,663 | 103,733 | Cash | ||||||||||||||||||
Long-lived asset impairment | 290,572 | 19,521 | 10,281 | 10,786 | 331,160 | Non-cash | ||||||||||||||||||
Other exit costs | 24,645 | 20,656 | 27,634 | 32,520 | 105,455 | Cash & non-cash | ||||||||||||||||||
Total restructuring charges | $ | 327,108 | $ | 60,252 | $ | 71,019 | $ | 81,969 | $ | 540,348 | ||||||||||||||
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Other | ||||||||||||||
Severance | Exit Costs | Total | ||||||||||||
(In thousands) | ||||||||||||||
Balance as of March 31, 2004 | $ | 22,376 | $ | 38,731 | $ | 61,107 | ||||||||
Activities during fiscal year 2005: | ||||||||||||||
Cash payments | (18,653 | ) | (23,914 | ) | (42,567 | ) | ||||||||
Balance as of March 31, 2005 | 3,723 | 14,817 | 18,540 | |||||||||||
Less: | ||||||||||||||
Current portion (classified as other current liabilities) | (3,723 | ) | (8,639 | ) | (12,362 | ) | ||||||||
Accrued facility closure costs, net of current portion (classified as other long-term liabilities) | $ | — | $ | 6,178 | $ | 6,178 | ||||||||
Fiscal Year 2003 |
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First | Third | |||||||||||||||
Quarter | Quarter | Total | Nature | |||||||||||||
(In thousands) | ||||||||||||||||
Americas: | ||||||||||||||||
Severance | $ | 21,053 | $ | 11,654 | $ | 32,707 | ||||||||||
Long-lived asset impairment | 31,061 | 30,017 | 61,078 | |||||||||||||
Other exit costs | 42,287 | 31,086 | 73,373 | |||||||||||||
Total restructuring charges | 94,401 | 72,757 | 167,158 | |||||||||||||
Asia: | ||||||||||||||||
Severance | 2,306 | 183 | 2,489 | |||||||||||||
Long-lived asset impairment | 5,072 | (5,397 | ) | (325 | ) | |||||||||||
Other exit costs | 1,349 | (1,677 | ) | (328 | ) | |||||||||||
Total restructuring charges | 8,727 | (6,891 | ) | 1,836 | ||||||||||||
Europe: | ||||||||||||||||
Severance | 53,542 | 29,737 | 83,279 | |||||||||||||
Long-lived asset impairment | 20,146 | (10,335 | ) | 9,811 | ||||||||||||
Other exit costs | 23,551 | 11,320 | 34,871 | |||||||||||||
Total restructuring charges | 97,239 | 30,722 | 127,961 | |||||||||||||
Total | ||||||||||||||||
Severance | 76,901 | 41,574 | 118,475 | Cash | ||||||||||||
Long-lived asset impairment | 56,279 | 14,285 | 70,564 | Non-cash | ||||||||||||
Other exit costs | 67,187 | 40,729 | 107,916 | Cash & non-cash | ||||||||||||
Total restructuring charges | $ | 200,367 | $ | 96,588 | $ | 296,955 | ||||||||||
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Other | |||||||||||||
Severance | Exit Costs | Total | |||||||||||
(In thousands) | |||||||||||||
Balance as of March 31, 2004 | $ | 4,720 | $ | 15,658 | $ | 20,378 | |||||||
Activities during fiscal year 2005: | |||||||||||||
Cash payments | (3,466 | ) | (8,869 | ) | (12,335 | ) | |||||||
Balance as of March 31, 2005 | 1,254 | 6,789 | 8,043 | ||||||||||
Less: | |||||||||||||
Current portion (classified as other current liabilities) | (353 | ) | (3,027 | ) | (3,380 | ) | |||||||
Accrued facility closure costs, net of current portion (classified as other long-term liabilities) | $ | 901 | $ | 3,762 | $ | 4,663 | |||||||
11. | OTHER CHARGES (INCOME), NET |
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12. | RELATED PARTY TRANSACTIONS |
13. | BUSINESS ACQUISITIONS |
Fiscal Year 2005 |
Nortel |
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Hughes Software Systems Limited (now known as Flextronics Software Systems Limited) |
Fiscal Year Ended March 31, | ||||||||
2005 | 2004 | |||||||
(In thousands, except | ||||||||
per share data) | ||||||||
Net sales | $ | 15,957,695 | $ | 14,617,250 | ||||
Net income (loss) | 344,345 | (346,631 | ) | |||||
Basic earnings (loss) per share | $ | 0.62 | $ | (0.66 | ) | |||
Diluted earnings (loss) per share | $ | 0.59 | $ | (0.66 | ) |
Other Acquisitions |
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Fiscal Year 2004 |
Fiscal Year 2003 |
Xerox |
NatSteel |
Other Acquisitions |
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14. | SEGMENT REPORTING |
Fiscal Year Ended March 31, | ||||||||||||||
2005 | 2004 | 2003 | ||||||||||||
(In thousands) | ||||||||||||||
Net Sales: | ||||||||||||||
Asia | $ | 8,190,470 | $ | 6,878,458 | $ | 5,060,085 | ||||||||
Americas | 2,698,093 | 2,099,713 | 3,101,589 | |||||||||||
Europe | 5,779,337 | 6,202,207 | 5,933,859 | |||||||||||
Intercompany eliminations | (759,677 | ) | (649,962 | ) | (716,834 | ) | ||||||||
Total | $ | 15,908,223 | $ | 14,530,416 | $ | 13,378,699 | ||||||||
Income (Loss) Before Income Taxes: | ||||||||||||||
Asia | $ | 312,406 | $ | 152,117 | $ | 187,785 | ||||||||
Americas | 4,667 | (204,288 | ) | (232,094 | ) | |||||||||
Europe | 5,981 | (170,915 | ) | (27,127 | ) | |||||||||
Intercompany eliminations | (46,145 | ) | (197,033 | ) | (75,803 | ) | ||||||||
Total | $ | 276,909 | $ | (420,119 | ) | $ | (147,239 | ) | ||||||
Long-Lived Assets: | ||||||||||||||
Asia | $ | 806,617 | $ | 700,262 | $ | 758,331 | ||||||||
Americas | 422,644 | 402,031 | 544,348 | |||||||||||
Europe | 475,255 | 522,707 | 663,050 | |||||||||||
Total | $ | 1,704,516 | $ | 1,625,000 | $ | 1,965,729 | ||||||||
Depreciation and Amortization*: | ||||||||||||||
Asia | $ | 137,482 | $ | 112,357 | $ | 110,485 | ||||||||
Americas | 73,815 | 80,650 | 97,433 | |||||||||||
Europe | 140,214 | 155,082 | 141,599 | |||||||||||
Total | $ | 351,511 | $ | 348,089 | $ | 349,517 | ||||||||
Gross Capital Expenditures: | ||||||||||||||
Asia | $ | 188,910 | $ | 142,425 | $ | 125,952 | ||||||||
Americas | 59,829 | 81,454 | 50,153 | |||||||||||
Europe | 40,941 | 102,869 | 74,513 | |||||||||||
Total | $ | 289,680 | $ | 326,748 | $ | 250,618 | ||||||||
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* | Excludes restructuring charges related property and equipment impairment charges of $12.7 million, $331.2 million, and $70.6 million in fiscal years 2005, 2004, and 2003, respectively. See Note 10, “Restructuring Charges,” for additional information regarding those charges. |
15. | CONSOLIDATION OF VARIABLE INTEREST ENTITIES |
16. | SUBSEQUENT EVENTS |
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17. | QUARTERLY FINANCIAL DATA (UNAUDITED) |
Fiscal Year Ended March 31, 2005 | Fiscal Year Ended March 31, 2004 | ||||||||||||||||||||||||||||||||
First | Second | Third | Fourth | First | Second | Third | Fourth | ||||||||||||||||||||||||||
(In thousands, except per share amounts) | |||||||||||||||||||||||||||||||||
Net sales | $ | 3,880,448 | $ | 4,138,249 | $ | 4,276,614 | $ | 3,612,912 | $ | 3,106,677 | $ | 3,503,242 | $ | 4,152,344 | $ | 3,768,153 | |||||||||||||||||
Cost of sales | 3,633,516 | 3,867,385 | 3,976,832 | 3,350,127 | 2,941,636 | 3,320,772 | 3,912,912 | 3,529,256 | |||||||||||||||||||||||||
Restructuring and other charges | 20,991 | 25,704 | 24,076 | 7,610 | 308,835 | 42,362 | 50,553 | 75,555 | |||||||||||||||||||||||||
Gross profit (loss) | 225,941 | 245,160 | 275,706 | 255,175 | (143,794 | ) | 140,108 | 188,879 | 163,342 | ||||||||||||||||||||||||
Selling, general and administrative | 141,596 | 139,022 | 143,330 | 144,585 | 116,415 | 108,940 | 121,597 | 140,335 | |||||||||||||||||||||||||
Intangibles amortization | 8,661 | 8,683 | 9,201 | 15,975 | 8,817 | 8,573 | 9,553 | 9,772 | |||||||||||||||||||||||||
Restructuring and other charges (income) | 2,597 | 7,798 | (8,323 | ) | 1,415 | 18,273 | 17,890 | 20,466 | 6,414 | ||||||||||||||||||||||||
Interest and other expense, net | 18,286 | 22,429 | 27,240 | 26,250 | 25,911 | 20,703 | 13,453 | 17,633 | |||||||||||||||||||||||||
Loss on early extinguishment of debt, net | — | — | — | 16,328 | 8,695 | 95,214 | — | — | |||||||||||||||||||||||||
Income (loss) before income taxes | 54,801 | 67,228 | 104,258 | 50,622 | (321,905 | ) | (111,212 | ) | 23,810 | (10,812 | ) | ||||||||||||||||||||||
Provision for (benefit from) income taxes | (19,521 | ) | (25,394 | ) | 5,575 | (23,622 | ) | (32,190 | ) | (11,122 | ) | 2,381 | (26,810 | ) | |||||||||||||||||||
Net income (loss) | $ | 74,322 | $ | 92,622 | $ | 98,683 | $ | 74,244 | $ | (289,715 | ) | $ | (100,090 | ) | $ | 21,429 | $ | 15,998 | |||||||||||||||
Earnings (loss) per share: | |||||||||||||||||||||||||||||||||
Basic | $ | 0.14 | $ | 0.17 | $ | 0.18 | $ | 0.13 | $ | (0.56 | ) | $ | (0.19 | ) | $ | 0.04 | $ | 0.03 | |||||||||||||||
Diluted | $ | 0.13 | $ | 0.16 | $ | 0.17 | $ | 0.12 | $ | (0.56 | ) | $ | (0.19 | ) | $ | 0.04 | $ | 0.03 | |||||||||||||||
Weighted average shares used in computing per share amounts: | |||||||||||||||||||||||||||||||||
Basic | 530,626 | 551,875 | 562,200 | 566,912 | 521,000 | 523,529 | 527,321 | 529,323 | |||||||||||||||||||||||||
Diluted | 568,013 | 582,206 | 594,081 | 597,628 | 521,000 | 523,529 | 561,438 | 569,572 | |||||||||||||||||||||||||
�� |
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March 31, | ||||||||||
2005 | 2004 | |||||||||
(In thousands, except share | ||||||||||
and per share amounts) | ||||||||||
ASSETS | ||||||||||
CURRENT ASSETS: | ||||||||||
Cash and cash equivalents | $ | 221,088 | $ | 188,929 | ||||||
Due from subsidiaries | 2,044,976 | 1,213,620 | ||||||||
Other current assets | 1,047 | 5,398 | ||||||||
Total current assets | 2,267,111 | 1,407,947 | ||||||||
Intangible assets, net | 3,083 | 4,083 | ||||||||
Other investments | 55,958 | 49,774 | ||||||||
Investment in subsidiaries | 6,828,834 | 6,176,109 | ||||||||
Due from subsidiaries | 1,923,796 | 1,659,878 | ||||||||
Other assets | 133,522 | 170,627 | ||||||||
Total assets | $ | 11,212,304 | $ | 9,468,418 | ||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||
CURRENT LIABILITIES: | ||||||||||
Due to subsidiaries | $ | 3,762,125 | $ | 3,186,790 | ||||||
Other current liabilities | 35,368 | 17,552 | ||||||||
Total current liabilities | 3,797,493 | 3,204,342 | ||||||||
Long-term debt, net of current portion | 1,605,012 | 1,498,731 | ||||||||
Due to subsidiaries | 585,751 | 411,860 | ||||||||
Commitments and contingencies (Note 6) | ||||||||||
SHAREHOLDERS’ EQUITY: | ||||||||||
Ordinary shares, S$0.01 par value; authorized — 1,500,000,000 shares; issued and outstanding — 568,329,662 and 529,944,282 shares as of March 31, 2005 and 2004, respectively | 3,360 | 3,135 | ||||||||
Additional paid-in capital | 5,486,404 | 4,997,033 | ||||||||
Accumulated deficit | (382,600 | ) | (722,471 | ) | ||||||
Accumulated other comprehensive income | 123,683 | 82,334 | ||||||||
Deferred compensation | (6,799 | ) | (6,546 | ) | ||||||
Total shareholders’ equity | 5,224,048 | 4,353,485 | ||||||||
Total liabilities and shareholders’ equity | $ | 11,212,304 | $ | 9,468,418 | ||||||
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1. | ORGANIZATION OF THE COMPANY |
2. | SUMMARY OF ACCOUNTING POLICIES |
Basis of Presentation |
Use of Estimates |
Translation of Foreign Currencies |
Cash and Cash Equivalents |
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Long-term Investments |
Due from/ Due to Subsidiaries |
Investment in Subsidiaries |
Concentration of Credit Risk |
Intangible Assets |
March 31, 2005 | March 31, 2004 | ||||||||||||||||||||||||
Gross | Net | Gross | Net | ||||||||||||||||||||||
Carrying | Accumulated | Carrying | Carrying | Accumulated | Carrying | ||||||||||||||||||||
Amount | Amortization | Amount | Amount | Amortization | Amount | ||||||||||||||||||||
(In thousands) | (In thousands) | ||||||||||||||||||||||||
Intangible assets: | |||||||||||||||||||||||||
Developed technologies | $ | 5,000 | $ | (1,917 | ) | $ | 3,083 | $ | 5,000 | $ | (917 | ) | $ | 4,083 | |||||||||||
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Derivative Instruments and Hedging Activities |
Accounting for Stock-Based Compensation |
1. Modified Prospective Application Method: Under this method SFAS 123R is applied to new awards and to awards modified, repurchased, or cancelled after the effective date. Compensation cost for the portion of awards for which service has not been rendered (such as unvested options) that are outstanding as of the date of adoption shall be recognized as the remaining services are rendered. The compensation cost relating to unvested awards at the date of adoption shall be based on the grant-date fair value of those awards as calculated for pro forma disclosures under the original SFAS 123. | |
2. Modified Retrospective Application Method: Companies may also use the Modified Retrospective Application Method for all prior years for which the original SFAS 123 was effective or only to prior interim periods in the year of initial adoption. If the Modified Retrospective Application Method is applied, financial statements for prior periods shall be adjusted to give effect to the fair-value-based method of accounting for awards on a consistent basis with the pro forma disclosures required for those periods under the original SFAS 123. |
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Recent Accounting Pronouncements |
Accounting and Disclosure Guidance for the Foreign Earnings Repatriation Provision within the American Jobs Creation Act of 2004 |
Share-Based Payments |
Exchanges of Nonmonetary Assets |
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Implicit Variable Interests under FASB Interpretation No. 46 (revised December 2003), Consolidation of Variable Interest Entities |
3. | LONG-TERM DEBT |
March 31, | ||||||||
2005 | 2004 | |||||||
(In thousands) | ||||||||
0.00% convertible junior subordinated notes | $ | 200,000 | $ | 200,000 | ||||
9.875% senior subordinated notes | 7,659 | 7,659 | ||||||
9.75% Euro senior subordinated notes | 7,433 | 181,422 | ||||||
1.0% convertible subordinated notes | 500,000 | 500,000 | ||||||
6.5% senior subordinated notes | 399,650 | 399,650 | ||||||
6.25% senior subordinated notes | 490,270 | — | ||||||
Outstanding under revolving lines of credit | — | 210,000 | ||||||
$ | 1,605,012 | $ | 1,498,731 | |||||
Fiscal Year Ending March 31, | (In thousands) | |||
2006 | $ | — | ||
2007 | — | |||
2008 | 200,000 | |||
2009 | — | |||
2010 | — | |||
Thereafter | 1,405,012 | |||
$ | 1,605,012 | |||
Revolving Credit Facilities |
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9.75% Euro Senior Subordinated Notes |
6.25% Senior Subordinated Notes |
1.0% Convertible Subordinated Notes |
S-51
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6.5% Senior Subordinated Notes |
Zero Coupon Convertible Junior Subordinated Notes |
4. | FINANCIAL INSTRUMENTS |
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5. | TRADE RECEIVABLES SECURIZATION |
6. | COMMITMENTS AND CONTINGENCIES |
Legal Proceedings |
Guarantees |
7. | INCOME TAXES |
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8. | SHAREHOLDERS’ EQUITY |
Equity Offering |
Stock Option and Incentive Plans |
S-54
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March 31, 2005 | March 31, 2004 | ||||||||||||||||
Options | Price | Options | Price | ||||||||||||||
Outstanding, beginning of fiscal year | 50,303,999 | $ | 12.86 | 55,682,533 | $ | 11.35 | |||||||||||
Granted | 18,461,056 | 13.94 | 8,841,856 | 15.60 | |||||||||||||
Exercised | (3,182,087 | ) | 9.34 | (8,235,283 | ) | 6.66 | |||||||||||
Forfeited | (8,004,567 | ) | 17.99 | (5,985,107 | ) | 11.39 | |||||||||||
Outstanding, end of fiscal year | 57,578,401 | $ | 12.67 | 50,303,999 | $ | 12.86 | |||||||||||
Options exercisable, end of fiscal year | 40,484,074 | 27,638,781 | |||||||||||||||
Weighted average fair value per option granted | $ | 7.99 | $ | 9.47 | |||||||||||||
Options Outstanding | Options Exercisable | |||||||||||||||||||
Weighted | Weighted | Weighted | ||||||||||||||||||
Average | Average | Average | ||||||||||||||||||
Number of | Contractual | Exercise | Number of | Exercise | ||||||||||||||||
Range of Exercise Prices | Shares | Life | Price | Shares | Price | |||||||||||||||
$ 0.42 - $ 5.88 | 7,053,025 | 4.28 | $ | 4.63 | 5,998,121 | $ | 4.41 | |||||||||||||
$ 5.96 - $ 6.23 | 644,644 | 3.75 | 6.17 | 641,311 | 6.17 | |||||||||||||||
$ 7.13 - $ 7.90 | 11,754,976 | 6.84 | 7.88 | 5,265,193 | 7.86 | |||||||||||||||
$ 8.01 - $11.53 | 5,836,848 | 7.64 | 10.20 | 2,245,515 | 8.88 | |||||||||||||||
$11.57 - $13.18 | 7,574,965 | 9.47 | 12.68 | 3,120,440 | 13.14 | |||||||||||||||
$13.35 - $15.90 | 8,219,876 | 7.19 | 14.70 | 6,721,552 | 14.99 | |||||||||||||||
$15.95 - $17.37 | 6,948,010 | 8.48 | 16.93 | 6,946,960 | 16.93 | |||||||||||||||
$17.38 - $23.19 | 7,474,801 | 6.90 | 19.71 | 7,473,726 | 19.71 | |||||||||||||||
$23.61 - $43.00 | 2,068,956 | 0.41 | 28.43 | 2,068,956 | 28.43 | |||||||||||||||
$44.13 - $44.13 | 2,300 | 0.44 | 44.13 | 2,300 | 44.13 | |||||||||||||||
$ 0.42 - $44.13 | 57,578,401 | 6.94 | $ | 12.67 | 40,484,074 | $ | 13.77 | |||||||||||||
9. | SUBSEQUENT EVENTS |
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• | Take Montague Expressway exit going East | |
• | Follow Montague Expressway to Trade Zone | |
• | Right onto Trade Zone | |
• | Right onto Lundy Avenue | |
• | Right onto Fortune Drive (first traffic light) | |
• | Left into the third driveway |
• | Take Brokaw Road exit going East | |
• | Left onto Lundy Avenue | |
• | Left onto Fortune Drive | |
• | Left into the first driveway |
• | Take Capital Avenue Exit | |
• | Left onto Trade Zone | |
• | Left onto Lundy Avenue | |
• | Right onto Fortune Drive (first traffic light) | |
• | Left into the third driveway |
Table of Contents
[Form of Proxy Card]
FLEXTRONICS INTERNATIONAL LTD.
(Incorporated in the Republic of Singapore)
(Company Registration Number 199002645H)
2090 Fortune Drive
San Jose, California 95131 U.S.A.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned being a member of Flextronics International Ltd. (the “Company”) hereby appoints Michael E. Marks or failing whom Thomas J. Smach or failing whom the Chairman of the Annual General Meeting as Proxy of the undersigned and hereby authorizes the Proxy to represent and to vote, as designated on the reverse side, all of the ordinary shares of the Company owned by the undersigned, at the 2005 Annual General Meeting of Shareholders of the Company to be held on September 20, 2005, or at any adjournment thereof.
This Proxy Card, when properly executed and returned in a timely manner, will be voted at the Annual General Meeting and any adjournments thereof in the manner described herein. If no contrary indication is made, this Proxy Card will be voted FOR the Board of Director nominees (Proposals No. 1 and 2), FOR Proposals No. 3 through 6 and in accordance with the judgment of the persons named as Proxies herein on any other matters that may properly come before the 2005 Annual General Meeting.
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING,
PLEASE COMPLETE, DATE AND SIGN THIS PROXY CARD AND
RETURN IT NOT LESS THAN 48 HOURS PRIOR TO THE TIME OF
THE MEETING IN THE ENCLOSED ENVELOPE.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
SEE REVERSE SIDE
Table of Contents
[Reverse Side]
T please mark votes as in this example.
The Board of Directors unanimously recommends a vote FOR the Board nominees (Proposals No. 1 and 2) and FOR Proposals No. 3 through 6. This Proxy Card, when properly executed, will be voted as specified below. This Proxy Card will be voted FOR the Board nominees (Proposals No. 1 and 2) and FOR Proposals No. 3 through 6 if no specification is made.
1a. | Re-election of Mr. James A. Davidson as a Director of the Company. |
FOR o | AGAINST o | ABSTAIN o |
1b. | Re-election of Mr. Lip-Bu Tan as a Director of the Company. |
FOR o | AGAINST o | ABSTAIN o |
2. | Re-appointment of Mr. Patrick Foley as a Director of the Company. |
FOR o | AGAINST o | ABSTAIN o |
3. | To re-appoint Deloitte & Touche LLP as independent auditors of the Company for the fiscal year ending March 31, 2006 and to authorize the Board of Directors to fix their remuneration. |
FOR o | AGAINST o | ABSTAIN o |
4. | To approve the authorization for the Directors of the Company to allot and issue ordinary shares. |
FOR o | AGAINST o | ABSTAIN o |
5. | To approve the director cash compensation and additional cash compensation for the Chairman of the Audit Committee (if appointed) and for committee participation. |
FOR o | AGAINST o | ABSTAIN o |
6. | To approve the proposed renewal of the Share Repurchase Mandate relating to acquisitions by the Company of its own issued ordinary shares. |
FOR o | AGAINST o | ABSTAIN o |
In their discretion, the Proxies are authorized to vote upon such other matters as may properly come before the meeting. This Proxy Card must be signed exactly as your name appears hereon. If more than one name appears, all persons so designated should sign. Attorneys, executors, administrators, trustees and guardians should indicate their capacities. If the signatory is a corporation, please print full corporate name and indicate capacity of duly authorized officer executing on behalf of the corporation. If the signatory is a partnership, please print full partnership name and indicate capacity of duly authorized person executing on behalf of the partnership.
Signature: | Date: | |||||||
Signature: | Date: |