FLEX LTD. MANAGEMENT REPORT AND ANALYSIS OF FINANCIAL POSITION AND OPERATING RESULTS (Form 10-K)

You should read the following discussion and analysis of our financial condition
and results of operations in conjunction with our consolidated financial
statements and notes thereto included in Item 8, "Financial Statements and
Supplementary Data." In addition to historical consolidated financial
information, the following discussion and analysis contains forward-looking
statements that involve risks, uncertainties, and assumptions. Our actual
results could differ materially from those anticipated by these forward-looking
statements as a result of many factors. We discuss factors that we believe could
cause or contribute to these differences below and elsewhere in this report,
including those set forth under Item 1A,"Risk Factors."

PREVIEW

We are the diversified manufacturing partner of choice that helps market-leading
brands design, build and deliver innovative products that improve the world.
Through the collective strength of a global workforce across approximately 30
countries with responsible, sustainable operations, we deliver advanced
manufacturing solutions and operate one of the most trusted global supply
chains, supporting the entire product lifecycle with fulfillment, after-market,
and circular economy solutions for diverse industries including cloud,
communications, enterprise, automotive, industrial, consumer devices, lifestyle,
healthcare, and energy. Beginning in the fourth quarter of fiscal year 2022, as
a result of the sale of certain Series A preferred units in Nextracker LLC
("Nextracker LLC" or "Nextracker") to a third party and our continuing
evaluation to separate the Nextracker business and consistent with how our chief
operating decision maker allocates resources, assesses performance and makes
strategic and operational decisions, we report Nextracker as a separate
operating and reportable segment. Nextracker was previously included in the
Industrial reporting unit within the Flex Reliability Solutions segment. Our
three operating and reportable segments are:

• Flex Agility Solutions (“FAS”), which includes the following end markets:

• Communications, Enterprise and Cloud (“CEC”), including data infrastructure, edge infrastructure and communications infrastructure;

•Lifestyle, including appliances, consumer packaging, floor care, micro-mobility and audio; and

•Consumer devices, including mobile and high-speed consumer devices.

• Flex Reliability Solutions (“FRS”), which includes the following end markets:

• Automotive, including next-generation mobility, autonomy, connectivity, electrification and smart technologies;

• Healthcare solutions, including medical devices, medical equipment and drug delivery; and

•Industrial, including capital goods, industrial appliances, renewables and network edge.

•Nextracker, the leading provider of intelligent, integrated solar tracker and
software solutions used in utility-scale and ground-mounted distributed
generation solar projects around the world. Nextracker's products enable solar
panels to follow the sun's movement across the sky and optimize plant
performance.

Our strategy is to provide customers with a full range of vertically integrated and competitive global supply chain solutions through which we can design, build, ship and service a complete product for our customers. This enables our customers to leverage our supply chain solutions to meet their product requirements throughout the product lifecycle.

Over the past few years, we have seen an increased level of diversification by
many companies, primarily in the technology sector. Some companies that have
historically identified themselves as software providers, Internet service
providers or e-commerce retailers have entered the highly competitive and
rapidly evolving technology hardware markets, such as mobile devices, home
entertainment and wearable devices. This trend has resulted in a significant
change in the manufacturing and supply chain solutions requirements of such
companies. While the products have become more complex, the supply chain
solutions required by such companies have become more customized and demanding,
and it has changed the manufacturing and supply chain landscape significantly.

We use a portfolio approach to manage our extensive service offerings. As our
customers change the way they go to market, we have the capability to reorganize
and rebalance our business portfolio in order to align with our customers' needs
and requirements in an effort to optimize operating results. The objective of
our business model is to allow us to be flexible and redeploy and reposition our
assets and resources as necessary to meet specific customers' supply chain
solution needs across all the markets we serve and earn a return on our invested
capital above the weighted average cost of that capital.

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During fiscal year 2021, in order to further support our strategy and build a
sustainable organization, and after considering that the economic recovery from
the COVID-19 global pandemic will be slower than anticipated, we identified and
engaged in certain structural changes. See additional discussion regarding these
restructuring actions below under "Results of Operations - Restructuring
charges".

We believe that the continued transformation of our business strategically positions us to capitalize on the long-term future growth prospects of outsourcing advanced manufacturing capabilities, design and engineering services, and aftermarket services.

Update on the impact of COVID-19 on our activities

With the second wave of the global pandemic including follow-on variants of
COVID-19, there have been renewed disease control measures being taken to limit
the spread including movement bans and shelter-in-place orders. Although not
materially impacting our results for the fourth quarter of fiscal year 2022,
most recently, with the lockdowns in China, we have also been experiencing
temporary plant closures and/or restrictions at certain of our manufacturing
facilities in China. We continue to closely monitor the situation in all the
locations where we operate. Our priority remains the welfare of our employees.
In addition, our end markets continue to be impacted by the global supply chain
disruptions. Component shortages and logistical constraints are pervasive across
the entire value chain. COVID-19 related restrictions also contributed to a
declining workforce, including at ports and warehouses, as well as creating
driver shortages around the world. We expect persistent waves of COVID-19 to
remain a headwind into the near future. Component shortages and significantly
increased logistic costs are also expected to persist at least in the near
future as we are continuing to see increasing supply constraints and costs. We
continue to carefully monitor potential supply chain disruptions due to ongoing
tightness in the overall component environment. Refer to "Risk Factors - The
ongoing COVID-19 pandemic has materially and adversely affected our business and
results of operations. The duration and extent to which it will continue to
adversely impact our business and results of operations remains uncertain and
could be material."

We continually assess our capital structure in response to the current environment and expect our current financial position, including our sources of liquidity, to be adequate to fund our future liabilities. See additional discussion in the Liquidity and Capital Resources section below.

Russian invasion of Ukraine

We are monitoring and responding to the escalating conflict in Ukraine and the
associated sanctions and other restrictions. As of the date of this report,
there is no material impact to our business operations and financial performance
in Ukraine. The full impact of the conflict on our business operations and
financial performance remains uncertain and will depend on future developments,
including the severity and duration of the conflict and its impact on regional
and global economic conditions. We will continue to monitor the conflict and
assess the related restrictions and other effects and pursue prudent decisions
for our team members, customers, and business.

Other developments

On April 28, 2021, we announced that we confidentially submitted a draft
registration statement on Form S-1 with the SEC relating to the proposed initial
public offering of Nextracker's Class A common stock. The initial public
offering and its timing are subject to market and other conditions and the SEC's
review process, and there can be no assurance that we will proceed with such
offering or any alternative transaction. Refer to "Risk Factors - We are
pursuing alternatives for our Nextracker business, including a full or partial
separation of the business, through an initial public offering of Nextracker or
otherwise, which may not be consummated as or when planned or at all, and may
not achieve the intended benefits."

On February 1, 2022, we sold Series A Preferred Units representing a 16.7%
interest in Nextracker to TPG Rise Flash, L.P., a Delaware limited partnership,
which is managed or advised by TPG Rise Climate, TPG, Inc.'s dedicated
renewables and climate investing fund ("TPG Rise"), for an aggregate purchase
price of $500 million. The sale of the 16.7% interest in Nextracker reflects an
implied value for Nextracker as of the date of the sale of $3.0 billion. See
note 7 to the consolidated financial statements in Item 8, "Financial Statements
and Supplementary Data" for further information.

This Annual Report on Form 10-K does not constitute an offer to sell or a
solicitation of an offer to buy securities, and shall not constitute an offer,
solicitation or sale in any jurisdiction in which such offer, solicitation or
sale would be unlawful prior to registration or qualification under the
securities laws of that jurisdiction.

Company overview

We are one of the world's largest providers of global supply chain solutions,
with revenues of $26.0 billion in the fiscal year ended March 31, 2022. We have
established an extensive network of manufacturing facilities in the world's
major

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consumer and enterprise markets (Asia, the Americas, and Europe) to serve the
growing outsourcing needs of both multinational and regional customers. We
design, build, ship, and service consumer and enterprise products for our
customers through a network of over 100 facilities in approximately 30 countries
across four continents. We also provide intelligent, integrated solar tracker
and software solutions used in utility-scale and ground-mounted distributed
generation solar projects around the world. As of March 31, 2022, our total
manufacturing capacity was approximately 27 million square feet. The following
tables set forth the relative percentages and dollar amounts of net sales by
region and by country, and net property and equipment, by country, based on the
location of our manufacturing sites (amounts may not sum due to rounding):

                                        Fiscal Year Ended March 31,
                                       2022                            2021
                                               (In millions)
Net sales by region:
Americas                $      10,839                 42  %    $  9,672        40  %
Asia                            9,601                 37  %       9,326        39  %
Europe                          5,601                 21  %       5,126        21  %
                        $      26,041                          $ 24,124

Net sales by country:
China                   $       6,146                 24  %    $  6,147        25  %
Mexico                          5,059                 19  %       4,413        18  %
U.S.                            3,690                 14  %       3,648        15  %
Brazil                          2,022                  8  %       1,554         6  %
Malaysia                        1,866                  7  %       1,563         6  %
Hungary                         1,230                  5  %       1,313         5  %
Other                           6,028                 23  %       5,486        25  %
                        $      26,041                          $ 24,124



                                                  Fiscal Year Ended March 31,
                                                 2022                             2021
                                                         (In millions)
Property and equipment, net:
Mexico                           $         626                   29  %    $   553        26  %
U.S.                                       354                   17  %        361        17  %
China                                      299                   14  %        331        16  %
India                                      129                    6  %        166         8  %
Hungary                                    118                    6  %        105         5  %
Malaysia                                   110                    5  %        106         5  %
Other                                      489                   23  %        475        23  %
                                 $       2,125                            $ 2,097



We believe that the combination of our extensive open innovation platform
solutions, design and engineering services, advanced supply chain management
solutions and services, significant scale and global presence, and manufacturing
campuses in low-cost geographic areas provide us with a competitive advantage
and strong differentiation in the market for designing, manufacturing and
servicing consumer and enterprise products for leading multinational and
regional customers. Specifically, we offer our customers the ability to simplify
their global product development, manufacturing process, and after-sales
services, and enable them to meaningfully accelerate their time to market and
cost savings.

Our results of operations are influenced by a number of factors, including the following:

•impacts on our business due to component shortages, transportation disruptions or other supply chain constraints, including as a result of the global COVID-19 pandemic;

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

•the evolution of the macro-economic environment and the correlative evolution of consumer demand;

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

• the effects on our business when our customers fail to market their products or when their products do not achieve wide commercial acceptance;

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

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

•the effects on our business of certain customers’ products having short life cycles;

•the possibility for our customers to cancel or delay orders or modify production quantities;

•the decision of our customers to choose in-house manufacturing rather than outsourcing for their product needs;

•the integration of acquired activities and facilities;

•increased labor costs due to unfavorable working conditions in the markets in which we operate;

•changes in tax legislation; and

•changes in regulations and commercial treaties.

We are also subject to other risks as set out in Section 1A, “Risk Factors”.

Net sales for fiscal year 2022 increased approximately 8%, or $1.9 billion, to
$26.0 billion from the prior year. The increase in sales was notable in all
three segments. Net sales for our FAS segment increased $0.5 billion, or 4.0%,
from the prior year, driven by an increase in our Lifestyle business, and to a
lesser extent, an increase in our CEC business. These increases were driven by a
lesser impact from COVID-19 production pressure during the current year versus
the prior year, coupled with new ramps, customer expansions and continued
recoveries in consumer spending, offset to some extent by the scarcity of
components and raw material and logistics constraints noted above. The increases
noted in FAS during fiscal year 2022 were partially offset by a decrease in our
Consumer Devices business primarily due to component shortages and planned
contract completions. Net sales for our FRS segment increased $1.1 billion, or
12%, from the prior year, primarily driven by an increase in sales from our
Industrial business, as a result of customer ramps and strong demand in EV
charging and renewables, semicap, and robotics, coupled with incremental revenue
from the Anord Mardix acquisition. In addition, net sales for our Automotive
business increased due to new programs during fiscal year 2022 for our next
generation mobility portfolio and recovery from the depressed sales from factory
shutdowns in the first quarter of fiscal year 2021. The increase in our
Automotive business was partially constrained by component shortages and OEM
plant shutdowns during fiscal year 2022. Net sales for our Nextracker segment
increased $0.3 billion, or 22.0%, from the prior year, primarily driven by
additional tracker projects, most notably outside the United States. Our fiscal
year 2022 gross profit totaled $1.9 billion, representing an increase of $0.2
billion, or 15%, from the prior year. The increase was primarily driven by
overall stronger cost discipline focused on driving further productivity
improvements, coupled with continued improvement in the mix of our business,
lower restructuring charges in the current fiscal year, benefits from prior
restructuring activities and a lower direct and incremental impact from
COVID-19, coupled with the stronger demand in multiple end markets compared to
the prior year period. Our net income totaled $0.9 billion, representing an
increase of $0.3 billion, or 53%, compared to fiscal year 2021, due to the
factors explained above along with an approximately $150 million non-cash gain
recorded in fiscal year 2022 related to certain tax credits in Brazil (See note
14 to the consolidated financial statements for further information).

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Cash provided by operations increased by approximately $0.9 billion to a cash
inflow of $1.0 billion for fiscal year 2022 compared with a cash inflow of $0.1
billion for fiscal year 2021 primarily driven by the $0.3 billion increase in
net income and $0.6 billion increase in cash provided by operating assets and
liabilities. Our net working capital ("NWC") is calculated as current quarter
accounts receivable, net of allowance for doubtful accounts, plus inventories
and contract assets, less accounts payable. Our net working capital as a
percentage of annualized sales for fiscal year 2022 increased to 15.4% from
11.5% in the prior year as a direct result of elevated inventory levels due to
component shortages and logistics constraints.

We believe adjusted free cash flow is an important liquidity metric because it
measures, during a given period, the amount of cash generated that is available
to repay debt obligations, make investments, fund acquisitions, repurchase
company shares and for certain other activities. Our adjusted free cash flow is
defined as cash from operations, less net purchases of property and equipment to
present adjusted cash flows on a consistent basis for investor transparency. We
also excluded the impact to cash flows related to certain vendor programs that
is required for U.S. GAAP presentation as well as cash outflows related to
repayment of the outstanding balance of our asset-backed securitization ("ABS")
programs in fiscal year 2021 as we utilized proceeds from debt issuance to
replace funding from the ABS programs for working capital purposes. Our adjusted
free cash flow was $0.6 billion and $0.7 billion for fiscal years 2022 and 2021,
respectively. Refer to the Liquidity and Capital Resources section for the
adjusted free cash flows reconciliation to the most directly comparable GAAP
financial measure of cash flows from operations. Cash used in investing
activities increased by approximately $0.7 billion to a cash outflow of $1.0
billion for fiscal year 2022, compared with a cash outflow of $0.2 billion for
fiscal year 2021, primarily due to $0.5 billion of cash paid for the acquisition
of Anord Mardix in December 2021, net of cash acquired. Cash provided by
financing activities decreased by approximately $0.5 billion to a cash inflow of
$0.3 billion during fiscal year 2022, compared with a cash inflow of $0.7
billion in the prior year, primarily driven by $0.5 billion of additional cash
paid for the repurchase of our ordinary shares in the current fiscal year.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America ("U.S. GAAP" or "GAAP")
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities, the disclosure of contingent assets and
liabilities at the date of the financial statements, and the reported amounts of
revenues and expenses during the reporting period. Due to the COVID-19 pandemic
and the ongoing conflict between Russia and Ukraine, there has been and we
expect there will continue to be uncertainty and disruption in the global
economy and financial markets. We have made estimates and assumptions taking
into consideration certain possible impacts due to the COVID-19 pandemic and the
Russian invasion of Ukraine. These estimates may change, as new events occur,
and additional information is obtained. Actual results may differ from those
estimates and assumptions.

We believe the following critical accounting policies affect our more
significant judgments and estimates used in the preparation of our consolidated
financial statements. For further discussion of our significant accounting
policies, refer to note 2 to the consolidated financial statements in Item 8,
"Financial Statements and Supplementary Data."

Revenue recognition

In determining the appropriate amount of revenue to recognize, we apply the
following steps: (i) identify the contracts with the customers; (ii) identify
performance obligations in the contracts; (iii) determine the transaction price;
(iv) allocate the transaction price to the performance obligations per the
contracts; and (v) recognize revenue when (or as) we satisfy a performance
obligation. Further, we assess whether control of the product or services
promised under the contract is transferred to the customer at a point in time
(PIT) or over time (OT). We are first required to evaluate whether our contracts
meet the criteria for OT recognition. We have determined that for a portion of
our contracts, we are manufacturing products for which there is no alternative
use (due to the unique nature of the customer-specific product and intellectual
property restrictions) and we have an enforceable right to payment including a
reasonable profit for work-in-progress inventory with respect to these
contracts. For certain other contracts, the Company's performance creates and
enhances an asset that the customer controls as the Company performs under the
contract. As a result, revenue is recognized under these contracts OT based on
the cost-to-cost method as it best depicts the transfer of control to the
customer based on the ratio of costs incurred to date as compared to the total
estimated costs at completion of the performance obligation. For all other
contracts that do not meet these criteria, we recognize revenue when we have
transferred control of the related manufactured products which generally occurs
upon delivery and passage of title to the customer. Refer to note 4 to the
consolidated financial statements in Item 8, "Financial Statements and
Supplementary Data" for further details.

Customer contracts and related obligations

Certain of our customer agreements include potential price adjustments which may
result in variable consideration. These price adjustments include, but are not
limited to, sharing of cost savings, committed price reductions, material
margins earned over the period that are contractually required to be paid to the
customers, rebates, refunds tied to performance metrics such as

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on-time delivery, and other periodic pricing resets that may be refundable to
customers. We estimate the variable consideration related to these price
adjustments as part of the total transaction price and recognize revenue in
accordance with the pattern applicable to the performance obligation, subject to
a constraint. We constrain the amount of revenues recognized for these
contractual provisions based on our best estimate of the amount which will not
result in a significant reversal of revenue in a future period. We determine the
amounts to be recognized based on the amount of potential refunds required by
the contract, historical experience and other surrounding facts and
circumstances. Refer to note 4 to the consolidated financial statements in
Item 8, "Financial Statements and Supplementary Data" for further details.

Customer credit risk

We have an established customer credit policy through which we manage customer
credit exposures through credit evaluations, credit limit setting, monitoring,
and enforcement of credit limits for new and existing customers. We perform
ongoing credit evaluations of our customers' financial condition and make
provisions for doubtful accounts based on the outcome of those credit
evaluations. We evaluate the collectability of accounts receivable based on
specific customer circumstances, current economic trends, historical experience
with collections and the age of past due receivables. To the extent we identify
exposures as a result of customer credit issues, we also review other customer
related exposures, including but not limited to inventory and related
contractual obligations.

Restructuring charges

We recognize restructuring charges related to our plans to close or consolidate
excess manufacturing facilities and rationalize administrative functions and to
realign our corporate cost structure. In connection with these activities, we
recognize restructuring charges for employee termination costs, long-lived asset
impairment and other exit-related costs.

The recognition of these restructuring charges requires that we make certain
judgments and estimates regarding the nature, timing and amount of costs
associated with the planned restructuring activity. To the extent our actual
results differ from our estimates and assumptions, we may be required to revise
the estimates of future liabilities, requiring the recognition of additional
restructuring charges or the reduction of liabilities already recognized. Such
changes to previously estimated amounts may be material to the consolidated
financial statements. At the end of each reporting period, we evaluate the
remaining accrued balances to ensure that no excess accruals are retained, and
the utilization of the provisions are for their intended purpose in accordance
with developed exit plans.

Refer to note 16 to the consolidated financial statements in Item 8, "Financial
Statements and Supplementary Data" for further discussion of our restructuring
activities.

Inventory Valuation

Our inventories are stated at the lower of cost (on a first-in, first-out basis)
or net realizable value. Our industry is characterized by rapid technological
change, short-term customer commitments and rapid changes in demand. We purchase
our inventory based on forecasted demand, and we estimate write downs for excess
and obsolete inventory based on our regular reviews of inventory quantities on
hand, and the latest forecasts of product demand and production requirements
from our customers. If actual market conditions or our customers' product
demands are less favorable than those projected, additional write downs may be
required. In addition, unanticipated changes in the liquidity or financial
position of our customers and/or changes in economic conditions may require
additional write downs for inventories due to our customers' inability to
fulfill their contractual obligations with regards to inventory procured to
fulfill customer demand.

Valuation of private company investments

We assess our investments for impairment whenever events or changes in
circumstances indicate that the assets may be impaired. The factors we consider
in our evaluation of potential impairment of our investments, include, but are
not limited to a significant deterioration in the earnings performance or
business prospects of the investee, or factors that raise significant concerns
about the investee's ability to continue as a going concern, such as negative
cash flows from operation or working capital deficiencies. The carrying value of
certain of our investments are individually material, and thus there is the
potential for material charges in future periods if we determine that those
investments are impaired. Refer to note 2 to the consolidated financial
statements in Item 8, "Financial Statements and Supplementary Data" for further
discussion of our investments.

Carrying amount of long-lived assets

We review property and equipment and acquired amortizable intangible assets for
impairment at least annually and whenever events or changes in circumstances
indicate that the carrying amount of the asset group may not be recoverable. An
impairment loss is recognized when the carrying amount of the asset group
exceeds its fair value. Recoverability of property and equipment and acquired
amortizable intangible assets are measured by comparing their carrying amount to
the projected cash flows the assets are expected to generate. If such asset
groups are determined to be impaired, the impairment loss

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recognized, if any, is the amount by which the carrying amount of the property
and equipment and acquired amortizable intangible assets exceeds fair value. Our
judgments regarding projected cash flows for an extended period of time and the
fair value of assets may be impacted by changes in market conditions, the
general business environment and other factors including future developments of
the COVID-19 pandemic and the ongoing conflict between Russia and Ukraine, which
remain highly uncertain and unpredictable. To the extent our estimates relating
to cash flows and fair value of assets change adversely we may have to recognize
material impairment charges in the future.

Good will

Goodwill is tested for impairment on an annual basis and whenever events or
changes in circumstances indicate that the carrying amount of goodwill may not
be recoverable. Recoverability of goodwill is measured at the reporting unit
level by comparing the reporting unit's carrying amount, including goodwill, to
the fair value of the reporting unit, which is measured based upon, among other
factors, market multiples for comparable companies as well as a discounted cash
flow analysis. These approaches use significant unobservable inputs, or Level 3
inputs, as defined by the fair value hierarchy and require us to make various
judgmental assumptions about sales, operating margins, growth rates and discount
rates which consider our budgets, business plans and economic projections, and
are believed to reflect market participant views. Some of the inherent estimates
and assumptions used in determining fair value of the reporting units are
outside the control of management, including interest rates, cost of capital,
tax rates, market EBITDA comparables and credit ratings. While we believe we
have made reasonable estimates and assumptions to calculate the fair value of
the reporting units, it is possible a material change could occur. If our actual
results are not consistent with our estimates and assumptions used to calculate
fair value, it could result in material impairments of our goodwill. Refer to
note 2 to the consolidated financial statements in Item 8, "Financial Statements
and Supplementary Data" for further detail on our goodwill.

Contingent liabilities

We may be exposed to certain liabilities relating to our business operations,
acquisitions of businesses and assets and other activities. We make provisions
for such liabilities when it is probable that the settlement of the liability
will result in an outflow of economic resources or the impairment of an asset.
We make these assessments based on facts and circumstances that may change in
the future resulting in additional expenses.

Refer to Note 14 to the Consolidated Financial Statements under Section 8, “Financial Statements and Supplementary Data”, for further discussion of our contingent liabilities.

Participation not giving refundable control

Interest held by a third party in a consolidated majority-owned subsidiary is
presented as noncontrolling interest, which represents the noncontrolling equity
holder's interest in the underlying net assets of our consolidated
majority-owned subsidiary. Noncontrolling interest, where we may be required to
repurchase the noncontrolling interest under a contractual redemption
requirement, is reported in the consolidated balance sheets between liabilities
and equity, as redeemable noncontrolling interest ("RNCI"). The carrying value
of the RNCI should not be accreted or adjusted to redemption value unless it
becomes probable that the Series A Units will become redeemable. Refer to note 7
to the consolidated financial statements in Item 8, "Financial Statements and
Supplementary Data" for further discussion of our RNCI.

Income taxes

Our deferred income tax assets represent temporary differences between the
carrying amount and the tax basis of existing assets and liabilities, which will
result in deductible amounts in future years, including net operating loss carry
forwards. Based on estimates, the carrying value of our net deferred tax assets
assumes that it is more likely than not that we will be able to generate
sufficient future taxable income in certain tax jurisdictions to realize these
deferred income tax assets. Our judgments regarding future profitability may
change due to future market conditions, changes in U.S. or international tax
laws and other factors. If these estimates and related assumptions change in the
future, we may be required to increase or decrease our valuation allowance
against deferred tax assets previously recognized, resulting in additional or
lesser income tax expense.

We are regularly subject to tax return audits and examinations by various taxing
jurisdictions and around the world, and there can be no assurance that the final
determination of any tax examinations will not be materially different than that
which is reflected in our income tax provisions and accruals. Should additional
taxes be assessed as a result of a current or future examination, there could be
a material adverse effect on our tax position, operating results, financial
position and cash flows. Refer to note 15 to the consolidated financial
statements in Item 8, "Financial Statements and Supplementary Data" for further
discussion of our tax position.

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RESULTS OF OPERATIONS

The following table sets forth, for the periods indicated, certain statements of
operations data expressed as a percentage of net sales (amounts may not sum due
to rounding). The financial information and the discussion below should be read
in conjunction with the consolidated financial statements and notes thereto
included in Item 8, "Financial Statements and Supplementary Data." As further
discussed in note 1 and note 21 to the consolidated financial statement in Item
8, we revised our reportable segments in the fourth quarter of fiscal year 2022
to reflect Nextracker as a separate reportable segment in addition to FRS and
FAS. There was no change to our consolidated financial statements. Additionally,
as further discussed in note 2 to the consolidated financial statement in Item
8, the prior year amounts related to interest expense (income), net are now
presented separately under interest, net, and the remaining balances under
interest and other, net have been reclassified to other charges (income), net
within the consolidated statements of operations. We also elected to include
operating income as a subtotal in the consolidated statements of operations. For
comparability purposes, the prior periods have been recast to conform to the
current presentation. The reclassifications had no effect on the previously
reported results of operations.

For a discussion of our results of operations for the fiscal year ended March
31, 2021 compared to the fiscal year ended March 31, 2020, refer to Item 7,
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" in our Annual Report on Form 10-K for the fiscal year ended March
31, 2021.

The data below, and discussion that follows, represents our results from
operations.

                                                                                     Fiscal Year Ended
                                                                                         March 31,
                                                                                2022                    2021
Net sales                                                                          100.0  %                100.0  %
Cost of sales                                                                       92.5                    92.6
Restructuring charges                                                                0.1                     0.4
Gross profit                                                                         7.4                     7.0
Selling, general and administrative expenses                                         3.4                     3.4
Intangible amortization                                                              0.3                     0.3
Restructuring charges                                                                  -                     0.1
 Operating income                                                                    3.7                     3.2
Interest, net                                                                        0.6                     0.6
Other charges (income), net                                                         (0.9)                   (0.3)
Income before income taxes                                                           4.0                     2.9
Provision for income taxes                                                           0.4                     0.4

Net income                                                                           3.6  %                  2.5  %
Net income attributable to redeemable noncontrolling interest                          -                       -
Net income attributable to Flex Ltd.                                                 3.6  %                  2.5  %



Net sales

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

                                             Fiscal Year Ended March 31,
                                            2022                            2021
Net sales:                                          (In millions)
Flex Agility Solutions       $      14,027                 54  %    $ 13,493        56  %
Flex Reliability Solutions          10,603                 41  %       9,495        39  %
Nextracker                           1,458                  6  %       1,195         5  %
Intersegment eliminations              (47)                 -  %         (59)        -  %
                             $      26,041                          $ 24,124



Net sales for the fiscal year ended 2022 totaled $26.0 billion, representing an
increase of $1.9 billion, or approximately 8%, from $24.1 billion for the fiscal
year ended 2021. Net sales for our FAS segment increased $0.5 billion, or 4%,
from the

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prior year, mainly due to an increase in net sales of 14% in our Lifestyle
business and 3% in our CEC business resulting from a lesser impact from COVID-19
production pressure during the current year versus the prior year, coupled with
new ramps, customer expansions and continued recoveries in consumer spending,
offset to some extent by the scarcity of components and raw material and
logistics constraints. These increases in FAS were offset by a 7% decrease in
net sales in our Consumer Devices business due to certain planned contract
completions in fiscal year 2022 reflecting our active program management. Net
sales in our FRS segment increased $1.1 billion, or 12%, driven primarily by an
increase of 17% in net sales from prior year in our Industrial business as a
result of customer ramps and strong demand in EV charging and renewables,
semicap, and robotics, coupled with incremental revenues from our Anord Mardix
acquisition. In addition, net sales for our Automotive business increased 15%
from the prior year due to new programs during fiscal year 2022 for our next
generation mobility portfolio and recovery from the depressed sales from factory
shutdowns in the first quarter of fiscal year 2021. The increase in our
Automotive business was partially constrained by component shortages and OEM
plant shutdowns during fiscal year 2022. Net sales for our Nextracker segment
increased $0.3 billion, or 22%, from the prior year driven by additional tracker
projects, most notably outside the United States.

Net sales increased across all regions with a $1.2 billion increase to $10.8
billion in the Americas, a $0.5 billion increase to $5.6 billion in Europe, and
a $0.3 billion increase to $9.6 billion in Asia.

Our ten largest customers during fiscal years 2022 and 2021 accounted for
approximately 34% and 36% of net sales, respectively. We have made substantial
efforts to diversify our portfolio which allows us to operate at scale in many
different industries, and, as a result, no customer accounted for greater than
10% of net sales in fiscal year 2022 and 2021.

Cost of sales

Cost of sales is affected by a number of factors, including the number and size
of new manufacturing programs, product mix, labor cost fluctuations by region,
component costs and availability and capacity utilization.

Cost of sales during fiscal year 2022 totaled $24.1 billion, representing an
increase of approximately $1.7 billion, or 8% from $22.3 billion during fiscal
year 2021. The increase in cost of sales is most notable in our FRS segment.
Cost of sales in FRS for fiscal year 2022 increased $1.0 billion or
approximately 12% from fiscal year 2021, which is in line with the 12% increase
in revenue, primarily as a result of higher revenue in our Industrial and
Automotive businesses. Cost of sales in FAS increased $0.4 billion, or
approximately 3%, from fiscal year 2021, which is relatively consistent the 4%
increase in revenue, primarily as a result of higher revenue in our Lifestyle
and CEC businesses, and partially offset by improved efficiencies. Cost of sales
in our Nextracker segment increased $0.4 billion or approximately 37% from
fiscal year 2021, primarily due to the increase in steel and freight costs due
to container shortages and other logistics challenges resulting from the
COVID-19 pandemic, coupled with the increase in sales noted above.

Gross profit

Gross profit is affected by a fluctuation in costs of sales elements as outlined
above and further by a number of factors, including product lifecycles, unit
volumes, product mix, pricing, competition, new product introductions, and the
expansion or consolidation of manufacturing facilities, as well as specific
restructuring activities initiated from time to time. The flexible design of our
manufacturing processes allows us to manufacture a broad range of products in
our facilities and better utilize our manufacturing capacity across our diverse
geographic footprint and service customers from all segments. In the cases of
new programs, profitability normally lags revenue growth due to product start-up
costs, lower manufacturing program volumes in the start-up phase, operational
inefficiencies, and under-absorbed overhead. Gross margin for these programs
often improves over time as manufacturing volumes increase, as our utilization
rates and overhead absorption improve, and as we increase the level of
manufacturing services content. As a result of these various factors, our gross
margin varies from period to period.

Gross profit during fiscal year 2022 increased $0.2 billion to $1.9 billion, or
7.4% of net sales, from $1.7 billion, or 7.0% of net sales, during fiscal year
2021, an improvement of 40 basis points. The increase in gross profit and gross
margin during fiscal year 2022 primarily resulted from the overall stronger cost
discipline focused on driving further productivity improvements, coupled with
continued improvement in the mix of our business, lower restructuring charges
incurred compared to prior year, benefits from prior restructuring activities
and a lower direct and incremental impact from COVID-19, coupled with stronger
demand in our Automotive, Industrial, CEC and Lifestyle businesses compared to
the prior year period.

Segment income

An operating segment's performance is evaluated based on its pre-tax operating
contribution, or segment income. Segment income is defined as net sales less
cost of sales, and segment selling, general and administrative expenses, and
does not include amortization of intangibles, stock-based compensation, customer
related asset impairments (recoveries), restructuring charges, legal and other.
A portion of depreciation is allocated to the respective segments, together with
other general corporate research and development and administrative expenses.

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The following table presents segment revenues and margins:

                                                    Fiscal Year Ended March 31,
                                                    2022                             2021
                                                           (In millions)
     Segment income:
     Flex Agility Solutions       $        605                      4.3  %    $ 449        3.3  %
     Flex Reliability Solutions            546                      5.1  %      484        5.1  %
     Nextracker                             90                      6.2  %      178       14.9  %



FAS segment margin increased 100 basis points, to 4.3% for fiscal year 2022,
from 3.3% for fiscal year 2021. The margin increase during the period was driven
by disciplined cost management and improved efficiencies as noted above,
partially offset by elevated costs due to component shortages and logistics
constraints across all of our end markets.

FRS segment margin for both fiscal years 2022 and 2021 was consistent at 5.1%.
FRS segment margin increased for fiscal year 2022 in our Automotive business
compared to the prior year despite component shortages and OEM plant shutdowns
during the current year and to a lesser extent, increased in our Industrial
business due to strong demand and customer ramps. Increases in Automotive and
Industrial were offset by a drop in Health Solutions due to high growth from
critical care products in the fiscal year ended 2021.

Nextracker segment margin decreased 870 basis points, to 6.2% for fiscal year
2022, from 14.9% for fiscal year 2021 driven primarily by increased freight and
logistics costs.

Restructuring charges

We continued to identify certain structural changes to restructure the business
throughout fiscal year 2022. During fiscal year 2022, we recognized
approximately $15 million of restructuring charges, most of which related to
employee severance. During fiscal year 2021, we recognized approximately $0.1
billion of restructuring charges, most of which related to employee severance as
part of an overall effort to align our cost structure with the reorganizing and
optimizing of our operations model along the reporting segments, and further
sharpen our focus to winning business in end markets where we have competitive
advantages and deep domain expertise

Refer to note 16 to the consolidated financial statements in Item 8, "Financial
Statements and Supplementary Data" for further discussion of our restructuring
activities.

Selling, general and administrative expenses

Selling, general and administrative expenses ("SG&A") totaled $0.9 billion, or
3.4% of net sales, during fiscal year 2022, compared to $0.8 billion, or 3.4% of
net sales, during fiscal year 2021, increasing by $75 million or 9%, which
reflects our enhanced cost control efforts to support higher revenue growth
while keeping our SG&A expenses relatively flat.

Intangible amortization

Amortization of intangible assets in fiscal years 2022 and 2021 were $68 million
and $62 million, respectively, representing an increase of $6 million, from
fiscal year 2021 as a result of four months of amortization expense related to
new intangible assets from the Anord Mardix acquisition in December 2021 offset
by certain intangible assets being fully amortized during fiscal year 2022.

Net interest

Net interest remained relatively stable at $152 million and $148 million in fiscal years 2022 and 2021, respectively.

Other expenses (income), net

During fiscal year 2022, we recorded $225 million of other income, net,
primarily driven by a $150 million gain related to a certain tax credit recorded
upon approval of a "Credit Habilitation" request by the relevant Brazil tax
authorities. This is a non-cash gain which will be used to offset certain
current and future tax obligations. Other income, net also includes $61 million
of equity in earnings, driven by the value increase in certain investment funds
resulting from discrete market events including initial public offerings of
certain companies included in the funds, coupled with a $32 million gain on
foreign exchange transactions.

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During fiscal year 2021, we recorded $67 million of other income, net, primarily
as a result of recognizing $83 million of equity in earnings, driven by the
value increase in certain investment funds resulting from discrete market events
including initial public offerings of certain companies included in the funds.
Out of the $83 million equity in earnings recorded in fiscal year 2021, we
collected $48 million of cash proceeds as we sold certain shares received as a
distribution from one of our fund's investments. Partially offsetting the income
was an impairment charge of $37 million related to certain non-core investments
that were determined to be other than temporarily impaired.

Refer to note 17 to the consolidated financial statements in Item 8, "Financial
Statements and Supplementary Data" for further discussion of our other charges
(income), net.

Income taxes

We work to ensure that we accrue and pay the appropriate amount of income taxes
according to the laws and regulations of each jurisdiction in which we operate.
Certain of our subsidiaries have, at various times, been granted tax relief in
their respective countries, resulting in lower income taxes than would otherwise
be the case under ordinary tax rates. The consolidated effective tax rates were
10.0% and 14.1% for the fiscal years 2022 and 2021, respectively. The effective
rate varies from the Singapore statutory rate of 17.0% in each year as a result
of the following items:

                                                                            Fiscal Year Ended March 31,
                                                                           2022                    2021
Income taxes based on domestic statutory rates                                 17.0  %                 17.0  %
Effect of jurisdictional tax rate differential                                (10.9)                  (11.6)

Change in unrecognized tax benefit                                              1.1                     1.5
Change in valuation allowance                                                   1.1                     4.9
Foreign exchange movement on prior year taxes recoverable                      (0.9)                    0.7

Tax impacts related to the sale of Nextracker Series A Preferred Units

    1.2                       -
APB 23 tax liability                                                            0.1                     0.1
Other                                                                           1.3                     1.5
Provision for income taxes                                                     10.0  %                 14.1  %



The variation in our effective tax rate each year is primarily a result of
recognition of earnings in foreign jurisdictions which are taxed at rates lower
than the Singapore statutory rate including the effect of tax holidays and tax
incentives we received primarily for our subsidiaries in China, Malaysia, Costa
Rica, Netherlands and Israel of $23 million and $21 million in fiscal years 2022
and 2021, respectively. Additionally, our effective tax rate is impacted by
changes in our liabilities for uncertain tax positions of $12 million, and $11
million and changes in our valuation allowances on deferred tax assets of $12
million and $35 million in fiscal years 2022 and 2021, respectively. We generate
most of our revenues and profits from operations outside of Singapore.

We are regularly subject to tax return audits and examinations by various taxing
jurisdictions around the world, and there can be no assurance that the final
determination of any tax examinations will not be materially different than that
which is reflected in our income tax provisions and accruals. Should additional
taxes be assessed as a result of a current or future examination, there could be
a material adverse effect on our effective tax rate, tax position, operating
results, financial position and cash flows.

We provide a valuation allowance against deferred tax assets that in our
estimation are not more likely than not to be realized. During fiscal year 2022,
we released valuation allowances totaling $26 million, $8 million of which
related primarily to certain operations in Canada and Hungary, as these amounts
were deemed to be more likely than not to be realized due to the sustained
profitability during the past three fiscal years as well as continued forecasted
profitability of those operations. The remaining approximately $19 million
valuation allowance release related to deferred tax assets in the United States
deemed realizable due to purchase accounting related to the Anord Mardix
acquisition. Various other valuation allowance positions were also reduced due
to varying factors such as recognition of uncertain tax positions impacting
deferred tax assets, one-time income recognition in loss entities, and foreign
exchange impacts on deferred tax balances. Lastly, these valuation allowance
reductions and eliminations were offset by current period valuation allowance
additions due to increased deferred tax assets as a result of current period
losses in legal entities with existing full valuation allowance positions.

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CASH AND CAPITAL RESOURCES

In response to the recent challenging environment following the COVID-19
pandemic, we continuously evaluate our ability to meet our obligations over the
next 12 months and have proactively reset our capital structure during these
times to improve maturities and liquidity. As a result, we expect that our
current financial condition, including our liquidity sources are adequate to
fund current and future commitments. As of March 31, 2022, we had cash and cash
equivalents of approximately $3.0 billion and bank and other borrowings of
approximately $4.2 billion. We have a $2.0 billion revolving credit facility,
that is due to mature in January 2026 (the "2026 Credit Facility"), under which
we had no borrowings outstanding as of March 31, 2022. We also issued HUF 100
billion of 3.6% bonds due December 2031 (approximately $301.4 million, as of
March 31, 2022) and borrowed €350 million under a one-year term loan
(approximately $388.6 million as of March 31, 2022) at an interest rate of
(0.18)% per annum. The proceeds of the new debt were used to refinance certain
other outstanding debt in fiscal year 2022 and for other general corporate
purposes. As of March 31, 2022, we were in compliance with the covenants under
all of our credit facilities and indentures. Refer to note 9 to the consolidated
financial statement in Item 8, "Financial Statements and Supplementary Data" for
additional details on the 2026 Credit Facility and the new notes.

Our cash balances are held in numerous locations throughout the world. As of
March 31, 2022, approximately 34% of our cash and cash equivalents were held by
foreign subsidiaries outside of Singapore. Although substantially all of the
amounts held outside of Singapore could be repatriated, under current laws, a
significant amount could be subject to income tax withholdings. We provide for
tax liabilities on these amounts for financial statement purposes, except for
certain of our foreign earnings that are considered indefinitely reinvested
outside of Singapore (approximately $1.6 billion as of March 31, 2022).
Repatriation could result in an additional income tax payment; however, for the
majority of our foreign entities, our intent is to permanently reinvest these
funds outside of Singapore and our current plans do not demonstrate a need to
repatriate them to fund our operations in jurisdictions outside of where they
are held. Where local restrictions prevent an efficient intercompany transfer of
funds, our intent is that cash balances would remain outside of Singapore and we
would meet our liquidity needs through ongoing cash flows, external borrowings,
or both.

The following is a discussion of our cash flows for the fiscal years ended March
31, 2022 and March 31, 2021. For a discussion of our cash flows for the fiscal
years ended March 31, 2021 and March 31, 2020, please refer to Item 7,
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" in our Annual Report on Form 10-K for the fiscal year ended March
31, 2021.

Fiscal Year 2022

Cash provided by operating activities was $1.0 billion during fiscal year 2022.
The total cash provided by operating activities resulted primarily from $0.9
billion of net income for the period plus $0.6 billion of non-cash charges such
as depreciation, amortization, non-cash lease expense, restructuring and
impairment charges, provision for doubtful accounts, deferred income taxes and
stock-based compensation. Depreciation expense was $0.4 billion and relatively
consistent with prior years. These additions were offset by a net change in our
operating assets and liabilities of $0.5 billion primarily driven by changes in
NWC as discussed below, partially offset by an increase in cash from other
current liabilities of $1.1 billion primarily attributed to customer advances
received.

We believe NWC, and net working capital as a percentage of annualized net sales
are key metrics that measure our liquidity. NWC is calculated as current quarter
accounts receivable, net of allowance for doubtful accounts, plus inventories
and contract assets, less accounts payable. NWC increased by $1.3 billion to
$4.2 billion as of March 31, 2022, from $2.9 billion as of March 31, 2021. This
increase is primarily driven by a $2.7 billion increase in inventories due to
component shortages, clear-to build constraints and logistic challenges which
increased buffer stock and inventory pricing, coupled with a $0.2 billion
increase in contract assets, and partially offset with a $1.0 billion increase
in accounts payable due to increased inventory purchases and a $0.6 billion
decrease in accounts receivable, net partially due to more accounts receivable
factored as of March 31, 2022. Our net working capital as a percentage of
annualized net sales as of March 31, 2022 increased to 15.4% as compared
to 11.5% of annualized net sales as of March 31, 2021 due to these factors. We
continue to experience component shortages in the supply chain and logistical
constraints, and although we are actively managing these impacts, we expect
continued working capital pressure in the near future. We expect it will take
time to adequately drive down our inventory levels. We are proactively working
with our partners to rebalance safety and buffer stock requirements and we have
an established enterprise-wide cross-functional initiative to reset our load
planning in an effort to reduce inventory levels. In addition, we are pursuing
alternative resources using inclusive hybrid solutions to minimize transit times
and implementing operational efficiencies. Component shortages and significantly
increased logistic costs are expected to persist into the near future as we are
continuing to experience increasing supply constraints and costs. We are working
diligently with our partners to secure needed parts and fulfill demand. In
addition, to the extent possible, we have collaborated with our customers for
working capital advances to offset the required investment in inventory.
Advances from customers were $1.4 billion as of March 31, 2022, an increase of
$0.9 billion from $0.5 billion as of March 31, 2021.

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Cash used in investing activities totaled $1.0 billion during fiscal year 2022.
This was primarily driven by $0.5 billion of cash paid for the acquisition of
Anord Mardix in December 2021, net of cash acquired, and approximately $0.4
billion of capital expenditures for property and equipment to continue expanding
capabilities and capacity in support of our expanding Lifestyle, Automotive, and
Industrial businesses.

Cash provided by financing activities was $0.3 billion during fiscal year 2022.
This was primarily driven by $0.7 billion of proceeds received in aggregate,
after premiums, following the issuance of the HUF 100 billion Bonds due December
2031 and the €350 million term loan due December 2022, and $0.5 billion of
proceeds received from the sale of Nextracker redeemable preferred units,
partially offset by $0.7 billion of cash paid for the repurchase of our ordinary
shares and $0.2 billion of cash paid for the repayment of the Euro term loan due
January 2022. Refer to note 9 to the consolidated financial statement in Item 8,
"Financial Statements and Supplementary Data" for additional details.

Financial year 2021

Cash provided by operating activities was $0.1 billion during fiscal year 2021.
The total cash provided by operating activities resulted primarily from
$0.6 billion of net income for the period plus $0.6 billion of non-cash charges
such as depreciation, amortization, non-cash lease expense, restructuring and
impairment charges, provision for doubtful accounts, deferred income taxes and
stock-based compensation. Depreciation expense was $0.4 billion and relatively
consistent with prior years. These additions were offset by a net change in our
operating assets and liabilities of $1.1 billion, primarily driven by cash
outflows related to accounts receivables resulting from the reduction of our
outstanding balances of accounts receivable sold through our ABS and accounts
receivable factoring programs.

Cash used in investing activities totaled $0.2 billion during fiscal year 2021.
This was primarily driven by approximately $0.4 billion of capital expenditures
for property and equipment to continue expanding capabilities and capacity in
support of our expanding Health Solutions and Industrial businesses net of
approximately $0.1 billion of proceeds from the sale of fixed assets including
proceeds from the sale of an exited facility in the fourth quarter of fiscal
year 2021 as a result of the disengagement of a certain customer in fiscal year
2020. Further offsetting the capital expenditures was $48 million of proceeds
from the sale of certain shares received as distribution from one of our funds'
investments.

Cash provided by financing activities was $0.7 billion during fiscal year 2021.
This was primarily driven by $1.4 billion of proceeds received in aggregate, net
of discounts and after premiums, following the issuance of the 2026 Notes and
the 2030 Notes, partially offset by $0.4 billion of cash paid for the repayment
of the term loan due June 2022. Also offsetting cash provided by financing
activities was $0.2 billion of cash paid for the repurchase of our ordinary
shares.

Adjusted free cash flow

We believe adjusted free cash flow is an important liquidity metric because it
measures, during a given period, the amount of cash generated that is available
to repay debt obligations, make investments, fund acquisitions, repurchase
company shares and for certain other activities. Our adjusted free cash flow is
defined as cash from operations, less net purchases of property and equipment to
present adjusted cash flows on a consistent basis for investors. During fiscal
year 2021, we proactively and strategically reduced the outstanding balance of
our ABS programs. Proceeds from our debt issuance replaced the funding from the
ABS programs for working capital purposes. As this decrease in cash flow
reflected the change of our capital strategy, we added this back for our
adjusted free cash flow calculation and also excluded the impact to cash flows
related to certain vendor programs that is required for US GAAP presentation for
fiscal year 2021. Refer to Item 7, "Management's Discussion and Analysis of
Financial Condition and Results of Operations" (Adjusted Free Cash Flow
subsection) of our Annual Report on our Form 10-K for the fiscal year ended
March 31, 2021 for further discussion. Our adjusted free cash flow was $0.6
billion and $0.7 billion for fiscal years 2022 and 2021, respectively. Adjusted
free cash flow is not a measure of liquidity under U.S. GAAP, and may not be
defined and calculated by other companies in the same manner. Adjusted free cash
flow should not be considered in isolation or as an alternative to net cash
provided by operating activities. Adjusted free cash flows reconcile to the most
directly comparable GAAP financial measure of cash flows from operations as
follows:

                                                                         Fiscal Year Ended March 31,
                                                                           2022                2021
                                                                                (In millions)
Net cash provided by operating activities                             $     1,024          $     144
Reduction in ABS levels and other                                               -                799

Purchases of property and equipment                                          (443)              (351)
Proceeds from the disposition of property and equipment                        11                 85
Adjusted free cash flow (1)                                           $       593          $     677


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(1)Figures in table may not match exactly due to rounding.

Our cash balances are generated and held in numerous locations throughout the
world. Liquidity is affected by many factors, some of which are based on normal
ongoing operations of the business and some of which arise from fluctuations
related to global economics and markets. Local government regulations may
restrict our ability to move cash balances to meet cash needs under certain
circumstances; however, any current restrictions are not material. We do not
currently expect such regulations and restrictions to impact our ability to pay
vendors and conduct operations throughout the global organization. We believe
that our existing cash balances, together with anticipated cash flows from
operations and borrowings available under our credit facilities, will be
sufficient to fund our operations through at least the next twelve months.

Future liquidity needs will depend on fluctuations in levels of inventory,
accounts receivable and accounts payable, the timing of capital expenditures for
new equipment, the extent to which we utilize operating leases for new
facilities and equipment, and the levels of shipments and changes in the volume
of customer orders.

We maintain global paying service agreements with several financial
institutions. Under these agreements, the financial institutions act as our
paying agents with respect to accounts payable due to our suppliers who elect to
participate in the program. The agreements allow our suppliers to sell their
receivables to one of the participating financial institutions at the discretion
of both parties on terms that are negotiated between the supplier and the
respective financial institution. Our obligations to our suppliers, including
the amounts due and scheduled payment dates, are not impacted by our suppliers'
decisions to sell their receivables under this program. During fiscal years
ended March 31, 2022 and 2021, the cumulative payments due to suppliers
participating in the programs amounted to approximately $1.3 billion and $1.0
billion, respectively. Pursuant to their agreement with one of the financial
institutions, certain suppliers may elect to be paid early at their discretion.
We are not always notified when our suppliers sell receivables under these
programs. The available capacity under these programs can vary based on the
number of investors and/or financial institutions participating in these
programs at any point in time.

In addition, we maintain various uncommitted short-term financing facilities
including but not limited to a commercial paper program, and a revolving sale
and repurchase of subordinated notes established under the securitization
facility, under which there were no borrowings outstanding as of March 31, 2022.

Historically, we have funded operations from cash and cash equivalents generated
from operations, proceeds from public offerings of debt securities, bank debt
and lease financings. We also have the ability to sell a designated pool of
trade receivables under ABS programs and sell certain trade receivables, which
are in addition to the trade receivables sold in connection with these
securitization agreements. We may enter into debt and equity financings, sales
of accounts receivable and lease transactions to fund acquisitions and
anticipated growth as needed.

During fiscal year 2022, no accounts receivable had been sold under our ABS
programs and we received approximately $1.6 billion from other sales of
receivables under our factoring program. During fiscal years 2021, we received
approximately $0.6 billion from transfers of receivables under our ABS programs,
and $0.8 billion from other sales of receivables. As of March 31, 2022 and 2021,
the outstanding balance on receivables sold for cash was $0.6 billion and $0.2
billion, respectively, under our accounts receivable factoring programs, which
were removed from accounts receivable balances in our consolidated balance
sheets.

Historically we have been successful in refinancing and extending the maturity
dates on our term loans and credit facilities. In January 2021, we entered into
a $2.0 billion credit agreement which matures in January 2026 and consists of a
$2.0 billion revolving credit facility with a sub-limit of $360 million
available for swing line loans, and a sub-limit of $175 million available for
the issuance of letters of credit.

The sale or issuance of equity or convertible debt securities could result in
dilution to current shareholders. Further, we may issue debt securities that
have rights and privileges senior to those of holders of ordinary shares, and
the terms of this debt could impose restrictions on operations and could
increase debt service obligations. This increased indebtedness could limit our
flexibility as a result of debt service requirements and restrictive covenants,
potentially affect our credit ratings, and may limit our ability to access
additional capital or execute our business strategy. Any downgrades in credit
ratings could adversely affect our ability to borrow as a result of more
restrictive borrowing terms. We continue to assess our capital structure and
evaluate the merits of redeploying available cash to reduce existing debt or
repurchase ordinary shares.

Under our current share repurchase program, our Board of Directors authorized
repurchases of our outstanding ordinary shares for up to $1 billion in
accordance with the share purchase mandate approved by our shareholders at the
date of the most recent Annual General Meeting which was held on August 4, 2021.
During fiscal year 2022, we paid $686 million to repurchase shares under the
current and prior repurchase plans at an average price of $17.97 per share. As
of March 31, 2022, shares in the aggregate amount of $496 million were available
to be repurchased under the current plan.

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OBLIGATIONS AND CONTRACTUAL COMMITMENTS

Bank borrowings and long-term debt are as follows:

                                                                As of March 31,
                                                               2022         2021
                                                                 (In millions)

5.000% Notes due February 2023                              $    500      $ 

500

Term loan due April 2024 – TIBOR 3 months plus 0.43% 273

305

4.750% Notes due June 2025                                       598        

598

3.750% Notes due February 2026                                   690          694
4.875% Notes due June 2029                                       659          661
4.875% Notes due May 2030                                        690          694
Euro Term Loans                                                  389          168
3.600% HUF Bonds due December 2031                               301            -
India Facilities                                                  84          133
Other                                                             31           51
Debt issuance costs                                              (18)         (21)
                                                               4,197        3,783
Current portion, net of debt issuance costs                     (949)        (268)
Non-current portion                                         $  3,248      $ 3,515



Refer to the discussion in note 9 to the consolidated financial statements in
Item 8, "Financial Statements and Supplementary Data" for further details of our
debt obligations.

In addition. we have leased certain of our property and equipment under finance
lease commitments, and certain of our facilities and equipment under operating
lease commitments. Future payments due under our debt including finance leases
and related interest obligations and operating leases are as follows (amounts
may not sum due to rounding):

                                                           Less Than                                                       Greater Than
                                         Total              1 Year             1 - 3 Years           4 - 5 Years             5 Years
                                                                                 (In millions)
Contractual Obligations:

Bank borrowings, long-term debt and
finance lease obligations:
Bank borrowings and long-term debt    $   4,215          $      950          $        326          $      1,288          $       1,651
Finance leases                                4                   2                     2                     -                      -
Interest on long-term debt
obligations                                 744                 153                   264                   154                    173
Operating leases, net of subleases          765                 148                   232                   156                    229
Restructuring costs                          43                  42                     1                     -                      -

Total contractual obligations $5,771 $1,295

$825 $1,598 $2,053



We have excluded $282 million of liabilities for unrecognized tax benefits from
the contractual obligations table as we cannot make a reasonably reliable
estimate of the periodic settlements with the respective taxing authorities. See
note 15, "Income Taxes" to the consolidated financial statements in Item 8,
"Financial Statements and Supplementary Data" for further details.

We also have outstanding firm purchase orders with certain suppliers for the
purchase of inventory, which are not included in the table above. The majority
of the purchase obligations are generally short-term in nature. As of March 31,
2022, our purchase obligations over one year were approximately $0.9 billion. We
generally do not enter into non-cancelable purchase orders for materials until
we receive a corresponding purchase commitment from our customer. Our purchase
obligations can fluctuate significantly from period to period and can materially
impact our future operating asset and liability balances, and our future working
capital requirements. We intend to use our existing cash balances, together with
anticipated cash flows from operations to fund our existing and future
contractual obligations.

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On February 1, 2022, we sold Series A Preferred Units, representing a 16.67%
interest in Nextracker, to TPG Rise and received proceeds of $487.5 million, net
of $12.5 million in transaction costs. Because the Series A Preferred Units are
redeemable upon the occurrence of conditions not solely within the control of
Flex, we classified the redeemable noncontrolling interest as temporary equity
on our consolidated balance sheets.

At TPG Rise's election, we are required to repurchase all of the outstanding
Series A Preferred Units at their liquidation preference, which shall include
all contributed but unreturned capital plus accrued but unpaid dividends, at the
earlier of certain change in control events and February 2, 2028. Additionally,
if Nextracker has not completed a qualified initial public offering prior to
February 2, 2027, then TPG Rise may cause us to repurchase all of the
outstanding Series A Preferred Units at their fair market value. We do not
believe that it is probable as of March 31, 2022, that the noncontrolling
interest will become redeemable given the anticipated Qualified Public Offering
of Nextracker. See note 7, "Redeemable Noncontrolling Interest" to the
consolidated financial statements in Item 8, "Financial Statements and
Supplementary Data" for further details.

RECENT ACCOUNTING PRONOUNCEMENTS

Refer to Note 2 to the Consolidated Financial Statements under Section 8 “Financial Statements and Supplementary Data” for recent accounting pronouncements.

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