SEGMENT REPORTING

3 Months Ended

Jun. 26, 2020

Segment Reporting [Abstract]

SEGMENT REPORTING

SEGMENT REPORTING

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

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

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

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

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

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

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

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

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

The determination of the FAS and FRS segments is based on several factors, including the nature of products and services, the nature of production processes, customer base, delivery channels and similar economic characteristics.

An operating segment's performance is evaluated based on its pre-tax operating contribution, or segment income. Segment income is defined as net sales less cost of sales, and segment selling, general and administrative expenses, and does not include amortization of intangibles, stock-based compensation, customer related asset impairment charges, restructuring charges, legal and other, interest and other, net.

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

	Three-Month Periods Ended
	June 26, 2020		June 28, 2019
	(In thousands)
Net sales:
Flex Agility Solutions	$	2,912,030	$	3,908,176
Flex Reliability Solutions	2,241,303		2,267,763
	$	5,153,333	$	6,175,939
Segment income and reconciliation of income before tax:
Flex Agility Solutions	$	71,807	$	108,958
Flex Reliability Solutions	114,737		129,994
Corporate and Other	(23,672)		(31,092)
Total segment income	162,872		207,860
Reconciling items:
Intangible amortization	15,176		17,082
Stock-based compensation	12,769		15,227
Customer related asset impairments	(76)		483
Restructuring charges (Note 15)	9,682		56,192
Legal and other (1)	27,681		1,610
Interest and other, net	30,257		53,157
Income before income taxes	$	67,383	$	64,109

(1)Legal and other during the three-month period ended June 26, 2020 consists of costs not directly related to core business results and may include matters relating to commercial disputes, government regulatory and compliance, intellectual property, antitrust, tax, employment or shareholder issues, product liability claims and other issues on a global basis. During the first quarter of fiscal year 2021, the Company accrued for certain loss contingencies where losses are considered probable and estimable.

Corporate and other primarily includes corporate services costs that are not included in the CODM's assessment of the performance of each of the identified reporting segments.

The Company provides an overall platform of assets and services, which the segments utilize for the benefit of their various customers. The shared assets and services are contained within the Company's global manufacturing and design operations and include manufacturing and design facilities. Most of the underlying manufacturing and design assets are co-mingled on the operating campuses and are compatible across segments and highly interchangeable throughout the platform. Given the highly interchangeable nature of the assets, they are not separately identified by segments nor reported by segment to the Company's CODM.