19. SUPPLEMENTAL GUARANTOR AND NON-GUARANTOR CONSOLIDATED FINANCIAL STATEMENTS

On February 20, 2013, the Company issued two tranches of Notes of $500 million each, which mature on February 15, 2020 and February 15, 2023, respectively, in a private offering pursuant to Rule 144A and Regulation S under the Securities Act. These notes are senior unsecured obligations and were issued by Flextronics International Limited ("Parent"), and are guaranteed, fully and unconditionally, jointly and severally, on an unsecured basis, by certain of the Company's 100% owned subsidiaries (the "guarantor subsidiaries"). These subsidiary guarantees will terminate upon 1) a sale or other disposition of the guarantor or the sale or disposition of all or substantially all the assets of the guarantor (other than to Flextronics or a subsidiary); 2) such guarantor ceasing to be a guarantor or a borrower under the Company's Term Loan Agreement and the Revolving Line of Credit; 3) defeasance or discharge of the Notes, as provided in the Notes indenture; or 4) if at any time the notes are rated investment grade.

In lieu of providing separate financial statements for the Guarantors, the Company has included the accompanying condensed consolidated financial statements, which are presented using the equity method of accounting. The principal elimination entries relate to investment in subsidiaries and intercompany balances and transactions, including transactions with the Company's non-guarantor subsidiaries.

Condensed Consolidating Balance Sheets as of March 31, 2013

	Parent		Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Eliminations			Consolidated

	(in thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	740,515	$	82,900		$	763,672	$	—		$	1,587,087
Accounts receivable		—		458,617			1,653,379		—			2,111,996
Inventories		—		1,063,627			1,658,873		—			2,722,500
Inter company receivable		4,440,955		4,726,673			6,490,274		(15,657,902	)		—
Other current assets		6,182		178,585			1,165,051		—			1,349,818

Total current assets		5,187,652		6,510,402			11,731,249		(15,657,902	)		7,771,401
Property and equipment, net		—		328,621			1,845,967		—			2,174,588
Goodwill and other intangible assets, net		1,075		40,626			301,851		—			343,552
Other assets		2,498,080		105,136			4,902,815		(7,204,017	)		302,014
Investment in subsidiaries		4,127,384		(1,956,014	)		16,994,616		(19,165,986	)		—

Total assets	$	11,814,191	$	5,028,771		$	35,776,498	$	(42,027,905	)	$	10,591,555

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Bank borrowings and current portion of long-term debt	$	416,594	$	60		$	—	$	—		$	416,654
Accounts payable		—		1,077,723			2,627,574		—			3,705,297
Accrued payroll		—		86,073			265,610		—			351,683
Inter company payable		4,963,615		6,093,606			4,600,681		(15,657,902	)		—
Other current liabilities		32,440		424,599			1,242,112		—			1,699,151

Total current liabilities		5,412,649		7,682,061			8,735,977		(15,657,902	)		6,172,785
Long term liabilities		4,154,784		2,488,279			2,732,966		(7,204,017	)		2,172,012
Shareholders' equity		2,246,758		(5,141,569	)		24,307,555		(19,165,986	)		2,246,758

Total liabilities and shareholders' equity	$	11,814,191	$	5,028,771		$	35,776,498	$	(42,027,905	)	$	10,591,555

Condensed Consolidating Balance Sheets as of March 31, 2012

	Parent		Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Eliminations			Consolidated

	(in thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	649,252	$	47,865		$	821,212	$	—		$	1,518,329
Accounts receivable		—		899,146			1,694,683		—			2,593,829
Inventories		—		1,384,193			1,916,598		—			3,300,791
Inter company receivable		3,304,798		4,260,557			6,120,995		(13,686,350	)		—
Current assets of discontinued operations		—		—			21,642		—			21,642
Other current assets		861		167,969			931,129		—			1,099,959

Total current assets		3,954,911		6,759,730			11,506,259		(13,686,350	)		8,534,550
Property and equipment, net		—		250,179			1,826,263		—			2,076,442
Goodwill and other intangible assets, net		1,375		28,880			129,669		—			159,924
Long-term assets of discontinued operations		—		—			41,417		—			41,417
Other assets		2,751,324		123,028			4,905,592		(7,558,473	)		221,471
Investment in subsidiaries		4,311,902		(2,422,600	)		12,355,622		(14,244,924	)		—

Total assets	$	11,019,512	$	4,739,217		$	30,764,822	$	(35,489,747	)	$	11,033,804

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Bank borrowings and current portion of long-term debt	$	36,340	$	3,000		$	—	$	—		$	39,340
Accounts payable		—		1,334,745			2,960,128		—			4,294,873
Accrued payroll		—		84,510			260,827		—			345,337
Current liabilities of discontinued operations		—		—			24,854		—			24,854
Inter company payable		4,177,361		5,543,119			3,965,870		(13,686,350	)		—
Other current liabilities		22,137		638,982			922,662		—			1,583,781

Total current liabilities		4,235,838		7,604,356			8,134,341		(13,686,350	)		6,288,185
Long term liabilities		4,499,695		2,693,242			2,827,176		(7,558,473	)		2,461,640
Shareholders' equity		2,283,979		(5,558,381	)		19,803,305		(14,244,924	)		2,283,979

Total liabilities and shareholders' equity	$	11,019,512	$	4,739,217		$	30,764,822	$	(35,489,747	)	$	11,033,804

Condensed Consolidating Statements of Operations for Fiscal Year Ended March 31, 2013

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated

	(in thousands)
Net sales	$	—		$	14,630,979		$	17,768,884		$	(8,830,388	)	$	23,569,475
Cost of sales		—			13,162,397			17,855,384			(8,830,388	)		22,187,393
Restructuring charges		—			20,366			195,468			—			215,834

Gross profit (loss)		—			1,448,216			(281,968	)		—			1,166,248
Selling, general and administrative expenses		—			199,934			605,301			—			805,235
Intangible amortization		300			7,840			21,389			—			29,529
Restructuring charges		—			1,556			10,044			—			11,600
Interest and other expense (income), net		(1,179,545	)		699,459			471,155			—			(8,931	)

Income (loss) from continuing operations before income taxes		1,179,245			539,427			(1,389,857	)		—			328,815
Provision for income taxes		—			1,708			24,605			—			26,313
Equity in earnings in subsidiaries		(902,194	)		(371,682	)		586,084			687,792			—

Income from continuing operations		277,051			166,037			(828,378	)		687,792			302,502
Loss from discontinued operations, net of tax		—			—			(25,451	)		—			(25,451	)

Net income (loss)	$	277,051		$	166,037		$	(853,829	)	$	687,792		$	277,051

Condensed Consolidating Statements of Operations for Fiscal Year Ended March 31, 2012

	Parent			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated

	(in thousands)
Net sales	$	—		$	18,852,902	$	22,012,300		$	(11,522,173	)	$	29,343,029
Cost of sales		—			17,395,532		21,951,720			(11,522,173	)		27,825,079

Gross profit		—			1,457,370		60,580			—			1,517,950
Selling, general and administrative expenses		—			203,673		673,891			—			877,564
Intangible amortization		2,550			11,559		35,463			—			49,572
Interest and other expense (income), net		(442,563	)		1,079,398		(620,751	)		—			16,084

Income (loss) from continuing operations before income taxes		440,013			162,740		(28,023	)		—			574,730
Provision for income taxes		—			1,633		52,327			—			53,960
Equity in earnings in subsidiaries		48,752			13,171		360,673			(422,596	)		—

Income from continuing operations		488,765			174,278		280,323			(422,596	)		520,770
Loss from discontinued operations, net of tax		—			—		(32,005	)		—			(32,005	)

Net income (loss)	$	488,765		$	174,278	$	248,318		$	(422,596	)	$	488,765

Condensed Consolidating Statements of Operations for Fiscal Year Ended March 31, 2011

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated

	(in thousands)
Net sales	$	—		$	18,257,141		$	20,757,338		$	(10,571,846	)	$	28,442,633
Cost of sales		—			16,869,570			20,561,564			(10,571,846	)		26,859,288

Gross profit		—			1,387,571			195,774			—			1,583,345
Selling, general and administrative expenses		—			206,314			595,458			—			801,772
Intangible amortization		2,500			19,218			44,470			—			66,188
Interest and other expense (income), net		(40,425	)		974,117			(852,617	)		—			81,075

Income from continuing operations before income taxes		37,925			187,922			408,463			—			634,310
Provision for income taxes		—			4,638			17,411			—			22,049
Equity in earnings in subsidiaries		558,294			(56,348	)		352,163			(854,109	)		—

Income from continuing operations		596,219			126,936			743,215			(854,109	)		612,261
Loss from discontinued operations, net of tax		—			—			(16,042	)		—			(16,042	)

Net income (loss)	$	596,219		$	126,936		$	727,173		$	(854,109	)	$	596,219

Condensed Consolidating Statements of Comprehensive Income for Fiscal Year Ended March 31, 2013

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated

	(in thousands)
Net income (loss)	$	277,051		$	166,037		$	(853,829	)	$	687,792		$	277,051
Other comprehensive income (loss):
Foreign currency translation adjustments, net of zero tax		(16,289	)		6,866			10,377			(17,243	)		(16,289	)
Unrealized loss on derivative instruments and other, net of zero tax		(20,755	)		(21,084	)		(20,755	)		41,839			(20,755	)

Comprehensive income (loss)	$	240,007		$	151,819		$	(864,207	)	$	712,388		$	240,007

Condensed Consolidating Statements of Comprehensive Income for Fiscal Year Ended March 31, 2012

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated

	(in thousands)
Net income (loss)	$	488,765		$	174,278		$	248,318		$	(422,596	)	$	488,765
Other comprehensive income (loss):
Foreign currency translation adjustments, net of zero tax		(53,616	)		41,913			755			(42,668	)		(53,616	)
Unrealized loss on derivative instruments and other, net of zero tax		(7,575	)		(943	)		(7,575	)		8,518			(7,575	)

Comprehensive income (loss)	$	427,574		$	215,248		$	241,498		$	(456,746	)	$	427,574

Condensed Consolidating Statements of Comprehensive Income for Fiscal Year Ended March 31, 2011

	Parent		Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated

	(in thousands)
Net income (loss)	$	596,219	$	126,936	$	727,173		$	(854,109	)	$	596,219
Other comprehensive income (loss):
Foreign currency translation adjustments, net of zero tax		12,883		22,367		(26,035	)		3,668			12,883
Unrealized gain on derivative instruments and other, net of zero tax		23,276		7,632		13,075			(20,707	)		23,276

Comprehensive income (loss)	$	632,378	$	156,935	$	714,213		$	(871,148	)	$	632,378

Condensed Consolidating Statements of Cash Flows for Fiscal Year Ended March 31, 2013

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated

	(In thousands)
Net cash provided by (used in) operating activities	$	1,136,875		$	588,299		$	(608,973	)	$	(771	)		1,115,430

Cash flows from investing activities:
Purchases of property and equipment, net of proceeds from disposal		—			(134,819	)		(300,750	)		241			(435,328	)
Acquisition of businesses, net of cash acquired		—			(20,150	)		(163,947	)		—			(184,097	)
Proceeds from divestitures of operations, net		—			—			22,585			—			22,585
Investing cash flows from (to) affiliates		(1,528,819	)		(134,715	)		3,468,696			(1,805,162	)		—
Other investing activities		—			6,412			(106,771	)		—			(100,359	)

Net cash provided by (used in) investing activities		(1,528,819	)		(283,272	)		2,919,813			(1,804,921	)		(697,199	)

Cash flows from financing activities:
Proceeds from bank borrowings and long-term debt		1,250,000			151			62			—			1,250,213
Repayments of bank borrowings and long-term debt		(379,399	)		(3,876	)		(8,584	)		—			(391,859	)
Payments for early repurchase of long-term debt		(756,855	)		(243,145	)		—						(1,000,000	)
Payments for repurchases of ordinary shares		(322,040	)		—			—			—			(322,040	)
Proceeds from exercise of stock options		22,257			—			—			—			22,257
Financing cash flows from (to) affiliates		693,185			(18,006	)		(2,480,871	)		1,805,692			—
Other financing activities		—			—			101,851			—			101,851

Net cash provided by (used in) financing activities		507,148			(264,876	)		(2,387,542	)		1,805,692			(339,578	)

Effect of exchange rates on cash		(23,941	)		(5,116	)		19,162			—			(9,895	)

Net change in cash and cash equivalents		91,263			35,035			(57,540	)		—			68,758

Cash and cash equivalents, beginning of year		649,252			47,865			821,212			—			1,518,329

Cash and cash equivalents, end of year	$	740,515		$	82,900		$	763,672		$	—		$	1,587,087

Condensed Consolidating Statements of Cash Flows for Fiscal Year Ended March 31, 2012

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated

	(In thousands)
Net cash provided by (used in) operating activities	$	412,529		$	(190,136	)	$	594,251		$	(12,376	)	$	804,268

Cash flows from investing activities:
Purchases of property and equipment, net of proceeds from disposal		—			(67,425	)		(320,300	)		(279	)		(388,004	)
Acquisition of businesses, net of cash acquired		—			(70,831	)		(21,426	)		—			(92,257	)
Proceeds from divestitures of operations, net		—			—			1,398			—			1,398
Investing cash flows from (to) affiliates		363,716			294,368			1,029,464			(1,687,548	)		—
Other investing activities		(1,500	)		4,626			(5,627	)		—			(2,501	)

Net cash provided by (used in) investing activities		362,216			160,738			683,509			(1,687,827	)		(481,364	)

Cash flows from financing activities:
Proceeds from bank borrowings and long-term debt		2,827,875			—			5,829			—			2,833,704
Repayments of bank borrowings and long-term debt		(2,383,596	)		(3,503	)		(2,022	)		—			(2,389,121	)
Payments for early repurchase of long-term debt		(480,000	)		—			—			—			(480,000	)
Payments for repurchases of ordinary shares		(509,800	)		—			—			—			(509,800	)
Proceeds from exercise of stock options		23,055			—			—			—			23,055
Financing cash flows from (to) affiliates		(112,398	)		16,789			(1,604,594	)		1,700,203			—

Net cash provided by (used in) financing activities		(634,864	)		13,286			(1,600,787	)		1,700,203			(522,162	)

Effect of exchange rates on cash		(55,416	)		(2,877	)		27,409			—			(30,884	)

Net change in cash and cash equivalents		84,465			(18,989	)		(295,618	)		—			(230,142	)

Cash and cash equivalents, beginning of year		564,787			66,854			1,116,830			—			1,748,471

Cash and cash equivalents, end of year	$	649,252		$	47,865		$	821,212		$	—		$	1,518,329

Condensed Consolidating Statements of Cash Flows for Fiscal Year Ended March 31, 2011

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated

	(In thousands)
Net cash provided by (used in) operating activities	$	106,672		$	19,730		$	721,985		$	8,957			857,344

Cash flows from investing activities:
Purchases of property and equipment, net of proceeds from disposal		—			(46,358	)		(347,421	)		(90	)		(393,869	)
Acquisition of businesses, net of cash acquired		—			—			(16,966	)		—			(16,966	)
Proceeds from divestitures of operations, net		—			—			625			—			625
Investing cash flows from (to) affiliates		734,710			(18,151	)		(4,191,785	)		3,475,226			—
Other investing activities		—			(1,877	)		(1,154	)		—			(3,031	)

Net cash provided by (used in) investing activities		734,710			(66,386	)		(4,556,701	)		3,475,136			(413,241	)

Cash flows from financing activities:
Proceeds from bank borrowings and long-term debt		3,471,370			—			124			—			3,471,494
Repayments of bank borrowings and long-term debt		(3,196,937	)		(3,571	)		(220,086	)		—			(3,420,594	)
Payments for early repurchase of long-term debt		(308,466	)		—			(7,029	)		—			(315,495	)
Payments for repurchases of ordinary shares		(400,400	)		—			—			—			(400,400	)
Proceeds from exercise of stock options		23,299			—			—			—			23,299
Financing cash flows from (to) affiliates		(472,891	)		(123,929	)		4,080,913			(3,484,093	)		—

Net cash provided by (used in) financing activities		(884,025	)		(127,500	)		3,853,922			(3,484,093	)		(641,696	)

Effect of exchange rates on cash		32,358			3,381			(17,231	)		—			18,508

Net change in cash and cash equivalents		(10,285	)		(170,775	)		1,975			—			(179,085	)

Cash and cash equivalents, beginning of year		575,072			237,629			1,114,855			—			1,927,556

Cash and cash equivalents, end of year	$	564,787		$	66,854		$	1,116,830		$	—		$	1,748,471