8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) January 31, 2006

FLEXTRONICS INTERNATIONAL LTD.

(Exact name of registrant as specified in its charter)

Singapore	0-23354	Not Applicable
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)
One Marina Boulevard, # 28-00, Singapore		018989
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (65) 6890-7188

Not Applicable

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEMS TO BE INCLUDED IN THE REPORT

Item 2.02. Results of Operations and Financial Condition

On January 31, 2006, Flextronics International Ltd. (the “Company”) issued a press release announcing its results for the third fiscal quarter ended December 31, 2005. A copy of the press release is attached as Exhibit 99.1 to this report.

The press release includes non-GAAP operating results. Non-GAAP operating results are not based on any standardized methodology prescribed by U.S. generally accepted accounting principles (“GAAP”) and are not necessarily comparable to similar measures presented by other companies. Non-GAAP operating results should not be considered in isolation or as a substitute for operating results prepared in accordance with GAAP. The Company has provided a reconciliation of non-GAAP operating results to GAAP operating results in the schedules to the attached press release.

Management uses non-GAAP operating results as a performance measure and furnishes the information in order to provide investors with additional information to analyze the Company’s operating results and facilitate period-to-period comparisons. Non-GAAP operating results exclude after-tax intangibles amortization, restructuring and other charges. In addition, because the Company has historically reported non-GAAP operating results to the investment community, the Company believes the inclusion of non-GAAP numbers provides consistency in its financial reporting.

Item 9.01. Financial Statements and Exhibits

Exhibit

99.1 Press Release, dated January 31, 2006, issued by Flextronics International Ltd.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Flextronics International Ltd.
Date: January 31, 2006	By:	/s/ Thomas J. Smach
		Thomas J. Smach
		Chief Financial Officer

EX-99.1

Exhibit 99.1

Press Release	2 Changi South Lane Singapore 486123	Tel: +65.6299.8888

Flextronics contacts:

Thomas J. Smach

Chief Financial Officer

+1.408.576.7722

investor_relations@flextronics.com

Renee Brotherton

Senior Director of Corporate Marketing

+1.408.576.7189

renee.brotherton@flextronics.com

FLEXTRONICS ANNOUNCES THIRD QUARTER RESULTS

Singapore, January 31, 2006 – Flextronics (NASDAQ: FLEX) today announced results for its third quarter ended December 31, 2005 as follows:

	Three Months Ended December 31,				Nine Months Ended December 31,
	2005		2004		2005		2004
(USD in millions, except EPS)
Net sales	$	4,187	$	4,277	$	11,969	$	12,295
GAAP net income	$	42	$	99	$	98	$	266
Net income, excluding intangible amortization, restructuring and other charges (1)	$	118	$	116	$	319	$	293
Diluted GAAP EPS	$	0.07	$	0.17	$	0.16	$	0.46
Diluted EPS, excluding intangible amortization, restructuring and other charges (1)	$	0.20	$	0.20	$	0.53	$	0.50

⁽¹⁾ The non-GAAP financial measures disclosed in this press release exclude certain amounts that are included in the most directly comparable measures under Generally Accepted Accounting Principles (“GAAP”). Non-GAAP results exclude after-tax intangible amortization, gains and losses from divestitures, restructuring and other charges. The Company recorded intangible amortization expense of $11.7 million and $40.9 million during the three- and nine-month periods ended December 31, 2005, respectively, and $9.2 million and $26.5 million during the three- and nine-month periods ended December 31, 2004, respectively. Further, the Company’s equity in earnings of unconsolidated subsidiaries included $2.3 million of intangible amortization during the quarter ended December 31, 2005. The Company also recorded pre-tax restructuring charges of $68.7 million and $151.7 million during the three- and nine-month periods ended December 31, 2005, respectively, and $30.7 million and $87.8 million during the three- and nine-month periods ended December 31, 2004, respectively, which were primarily related to the closures and consolidations of various manufacturing facilities. Further, the Company recognized $7.7 million and $7.6 million in executive separation costs during the quarters ended December 31, 2005 and 2004, respectively. During the quarter ended December 31, 2005, the Company also reversed a $15.0 million bad debt provision previously recorded in the quarter ended September 30, 2005 for accounts receivable from Delphi, which filed for bankruptcy in October 2005, as these receivables were collected during the quarter ended December 31, 2005. Final sale price adjustments related to the divestiture of the Network Services division resulted in a pre-tax loss of $3.1 million for the quarter ended December 31, 2005, and the divestiture of the Semiconductor and Network Services divisions resulted in a pre-tax gain of $67.6 million for the nine months ended December 31, 2005. In addition, during the three- and nine-month periods ended December 31, 2004, the Company recorded a $29.3 million gain from the liquidation of certain international entities, and a $6.8 million loss for the other than temporary impairment of its investments in certain non-publicly traded companies. The tax impacts related to all of these items and other non-operational tax adjustments amounted to a tax benefit of $2.0 million and tax expense of $86.2 million during the three- and nine-month periods ended December 31, 2005, respectively, and a tax benefit of $7.3 million and $71.9 million during the three- and nine-month periods ended December 31, 2004, respectively. The reconciliation of non-GAAP results to GAAP results is illustrated in Schedules I and II attached to this press release.

Press Release	2 Changi South Lane Singapore 486123	Tel: +65.6299.8888

Quarterly Results

Net revenue for the third quarter ended December 31, 2005 was $4.2 billion compared to $4.3 billion in the year ago quarter. Excluding revenues of $228 million in the third quarter ended December 31, 2004 from the Semiconductor and Network Services divisions that were divested by Flextronics in the September 2005 quarter, revenue grew 3% on a year-over-year basis in the third quarter ended December 31, 2005.

Excluding intangible amortization, restructuring and other charges, net income for the third quarter ended December 31, 2005 increased 2% to $118 million, or $0.20 per diluted share, compared with $116 million, or $0.20 per diluted share, in the year ago quarter. After-tax amortization, restructuring and other charges amounted to $76 million in the third quarter ended December 31, 2005, compared to $18 million in the year ago quarter. As a result, GAAP net income amounted to $42 million, or $0.07 earnings per diluted share, in the third quarter ended December 31, 2005, as compared to GAAP net income of $99 million, or $0.17 per diluted share, in the year ago quarter.

The Company ended the quarter with $1.1 billion in cash and $427 million in net debt. The Company has reduced its total debt by $79 million and $225 million in the three- and nine-month periods ended December 31, 2005, respectively. Cash flow from operations generated $214 million and $647 million in the three- and nine-month periods ended December 31, 2005, respectively.

With regard to the December 2005 quarter operating results, Mike McNamara, Chief Executive Officer of Flextronics stated, “We are extremely pleased with our working capital management and cash flows for the quarter. To this end, we are pleased that we were able to reduce our cash conversion cycle to a record low 8 days from 16 days in the previous sequential quarter.”

McNamara concluded by saying, “We have enhanced our revenue growth strategy by organizing our Company into a focused market segment approach that is designed to bring more value and innovation to our customers, improve our competitiveness and to increase our market share with our customers. We have added senior executives to lead each one of our seven market segments and believe this focused approach, combined with strategic investments in design capabilities, component technologies and low cost manufacturing capacity will accelerate our future growth in revenue and return on invested capital.”

Update on Nortel Transaction

The transfer of Nortel’s manufacturing operation in Calgary has been rescheduled from the March 2006 quarter to the June 2006 quarter to allow for the completion of several major information systems changes that will simplify and improve the quality of the transition as well as its operations after the transition.

Guidance

Management provided guidance for earnings per diluted share (excluding amortization, restructuring and other charges) of $0.15 to $0.16 on revenues of $3.5 billion to $3.7 billion for the March 2006 quarter. This guidance reflects the delay in transferring the Nortel operations in Calgary to Flextronics.

Quarterly GAAP earnings per diluted share are expected to be lower than the guidance provided herein by approximately $0.02 per diluted share reflecting quarterly amortization expense and by approximately $0.01 to $0.06 per diluted share reflecting restructuring and other charges.

Press Release	2 Changi South Lane Singapore 486123	Tel: +65.6299.8888

2004 Award Plan for New Employees

On January 23, 2006, the Company granted options from its 2004 Award Plan for New Employees to purchase an aggregate of 646,750 ordinary shares to employees of recently acquired companies and other new employees. The options have an exercise price of $10.53 (equal to the closing price of our ordinary shares on January 23, 2006 as quoted on the NASDAQ National Market), will expire 10 years after the date of grant (or following termination of employment, if earlier), and will become exercisable over four years, with the first 25% becoming exercisable on the first anniversary of the date of grant and the remainder becoming exercisable in equal monthly installments thereafter.

Conference Call and Web Cast

A conference call hosted by Flextronics’ management will be held today at 1:30 p.m. PDT to discuss the Company’s financial results and its outlook. This call will be broadcast via the Internet and may be accessed by logging on to the Company’s website at www.flextronics.com. Additional information in the form of a slide presentation that summarizes the quarterly results may also be found on the Company’s site. A replay of the broadcast will remain available on the Company’s website after the call.

Minimum requirements to listen to the broadcast are Microsoft Windows Media Player software (free download at http://www.microsoft.com/windows/windowsmedia/download/default.asp) and at least a 28.8 Kbps bandwidth connection to the Internet.

About Flextronics

Headquartered in Singapore (Singapore Reg. No. 199002645H), Flextronics is a leading Electronics Manufacturing Services (EMS) provider focused on delivering complete design, engineering and manufacturing services to aerospace, automotive, computing, consumer digital, industrial, infrastructure, medical and mobile OEMs. With fiscal year 2005 revenues of USD$15.9 billion, Flextronics helps customers design, build, ship, and service electronics products through a network of facilities in over 30 countries on five continents. This global presence provides design and engineering solutions that are combined with core electronics manufacturing and logistics services, and vertically integrated with components technologies, to optimize customer operations by lowering costs and reducing time to market. For more information, please visit www.flextronics.com.

# # #

This press release contains forward-looking statements within the meaning of federal securities laws. These forward-looking statements include statements related to revenue growth, anticipated benefits from our strategic investments in design capabilities and component technologies, and our working capital management and cash flows. These forward-looking statements involve risks and uncertainties that could cause the actual results to differ materially from those anticipated by these forward-looking statements. These risks include our dependence on industries that continually produce technologically advanced projects with short life cycles; our ability to respond to changes in economic trends and to fluctuations in demand for customers’ products and the short-term nature of our customers’ commitments; the challenges of effectively managing our operations; not obtaining new customer programs, or that if we do obtain them, the risk that they may not contribute to our revenue or profitability as expected or at all; the challenges of integrating acquired companies and assets; our dependence on a small number of customers for the majority of our sales and our reliance on strategic relationships with major customers; the impact on our margins and profitability resulting from substantial investments and start-up and integration costs in our components, design and ODM capabilities, including production difficulties, especially with new products; competition in our industry; changes in government regulations and tax laws; our exposure to potential litigation relating to intellectual property rights, product warranty and product liability; the challenges of international operations; the effects of customer bankruptcies; potential impairment of our intangible assets and the other risks described under “Business – Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our most recent Annual Report on Form 10-K and in our quarterly reports on Form 10-Q

Press Release	2 Changi South Lane Singapore 486123	Tel: +65.6299.8888

and current reports on Form 8-K, filed with the SEC. The forward-looking statements in this press release are based on current expectations and Flextronics assumes no obligation to update these forward-looking statements. Investors are cautioned not to place undue reliance on these forward-looking statements.

SCHEDULE 1

FLEXTRONICS INTERNATIONAL LTD. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

	Three Months Ended December 31, 2005									Three Months Ended December 31, 2004
	Non-GAAP (1)			Required Adjustments			GAAP			Non-GAAP (1)		Required Adjustments			GAAP
Net sales	$	4,186,891					$	4,186,891		$	4,276,614				$	4,276,614
Cost of sales		3,927,459						3,927,459			3,976,832					3,976,832
Restructuring and other charges		—			63,115			63,115			—		24,076			24,076
Gross profit		259,432			(63,115	)		196,317			299,782		(24,076	)		275,706
Selling, general and administrative expenses		124,816			(15,000	)		109,816			143,330					143,330
Restructuring and other charges (income)		—			13,147			13,147			—		14,192			14,192
Operating income		134,616			(61,262	)		73,354			156,452		(38,268	)		118,184
Intangible amortization		—			11,693			11,693			—		9,201			9,201
Interest and other expense, net		20,367			2,325			22,692			27,240		(22,515	)		4,725
Loss on divestiture of operations		—			3,126			3,126			—					—
Income before income taxes		114,249			(78,406	)		35,843			129,212		(24,954	)		104,258
Provision for (benefit from) income taxes		(4,161	)		(1,950	)		(6,111	)		12,922		(7,347	)		5,575
Net income	$	118,410		$	(76,456	)	$	41,954		$	116,290	$	(17,607	)	$	98,683
Earnings per share:
Basic	$	0.21					$	0.07		$	0.21				$	0.18
Diluted	$	0.20					$	0.07		$	0.20				$	0.17
Shares used in computing per share amounts:
Basic		574,635						574,635			562,200					562,200
Diluted		599,761						599,761			594,081					594,081

⁽¹⁾ The non-GAAP financial measures exclude certain amounts that are included in the most directly comparable measures under Generally Accepted Accounting Principles (“GAAP”). Non-GAAP results exclude after-tax intangible amortization, gains and losses from divestitures, restructuring and other charges. The Company recorded intangible amortization expense of $11.7 million and $9.2 million during the quarters ended December 31, 2005 and 2004, respectively. Further, the Company’s equity in earnings of unconsolidated subsidiaries included $2.3 million of intangible amortization during the quarter ended December 31, 2005. The Company also recorded pre-tax restructuring charges of $68.7 million and $30.7 million during the quarters ended December 31, 2005 and 2004, respectively, which were primarily related to the closures and consolidations of various manufacturing facilities. Further, the Company recognized $7.7 million and $7.6 million in executive separation costs during the quarters ended December 31, 2005 and 2004, respectively. During the quarter ended December 31, 2005, the Company also reversed a $15.0 million bad debt provision previously recorded in the quarter ended September 30, 2005 for accounts receivable from Delphi, which filed for bankruptcy in October 2005, as these receivables were collected during the quarter ended December 31, 2005. Final sale price adjustments related to the divestiture of the Network Services division resulted in a pre-tax loss of $3.1 million for the quarter ended December 31, 2005. In addition, during quarter ended December 31, 2004, the Company recorded a $29.3 million gain from the liquidation of certain international entities, and a $6.8 million loss for the other than temporary impairment of its investments in certain non-publicly traded companies. The tax impacts related to all of these items and other non-operational tax adjustments amounted to a tax benefit of $2.0 million and $7.3 million in the quarters ended December 31, 2005 and 2004, respectively.

Press Release	2 Changi South Lane Singapore 486123	Tel: +65.6299.8888

SCHEDULE II

FLEXTRONICS INTERNATIONAL LTD. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

	Nine Months Ended December 31, 2005								Nine Months Ended December 31, 2004
	Non-GAAP (2)		Required Adjustments			GAAP			Non-GAAP (2)		Required Adjustments			GAAP
Net sales	$	11,968,653				$	11,968,653		$	12,295,311				$	12,295,311
Cost of sales		11,167,801					11,167,801			11,477,733					11,477,733
Restructuring and other charges		—		129,150			129,150			—		70,771			70,771
Gross profit		800,852		(129,150	)		671,702			817,578		(70,771	)		746,807
Selling, general and administrative expenses		404,582					404,582			423,948					423,948
Restructuring and other charges		—		30,147			30,147			—		24,587			24,587
Operating income		396,270		(159,297	)		236,973			393,630		(95,358	)		298,272
Intangible amortization		—		40,943			40,943			—		26,545			26,545
Interest and other expense, net		69,402		2,325			71,727			67,955		(22,515	)		45,440
Gain on divestiture of operations		—		(67,569	)		(67,569	)		—					—
Income before income taxes		326,868		(134,996	)		191,872			325,675		(99,388	)		226,287
Provision for (benefit from) income taxes		7,494		86,164			93,658			32,568		(71,908	)		(39,340	)
Net income	$	319,374	$	(221,160	)	$	98,214		$	293,107	$	(27,480	)	$	265,627
Earnings per share:
Basic	$	0.56				$	0.17		$	0.53				$	0.48
Diluted	$	0.53				$	0.16		$	0.50				$	0.46
Shares used in computing per share amounts:
Basic		572,112					572,112			548,234					548,234
Diluted		600,068					600,068			581,433					581,433

⁽²⁾ The non-GAAP financial measures exclude certain amounts that are included in the most directly comparable measures under Generally Accepted Accounting Principles (“GAAP”). Non-GAAP results exclude after-tax intangible amortization, gains and losses from divestitures, restructuring and other charges. The Company recorded intangible amortization expense of $40.9 million and $26.5 million during the nine months ended December 31, 2005 and 2004, respectively. Further, the Company’s equity in earnings of unconsolidated subsidiaries included $2.3 million of intangible amortization during the nine months ended December 31, 2005. The Company also recorded pre-tax restructuring charges of $151.7 million and $87.8 million during the nine months ended December 31, 2005 and 2004, respectively, which were primarily related to the closures and consolidations of various manufacturing facilities. Further, the Company recognized $7.7 million and $7.6 million in executive separation costs during the nine months ended December 31, 2005 and 2004, respectively. The divestiture of the Semiconductor and Network Services division resulted in a pre-tax gain of $67.6 million for the nine months ended December 31, 2005. In addition, during nine months ended December 31, 2004, the Company recorded a $29.3 million gain from the liquidation of certain international entities, and a $6.8 million loss for the other than temporary impairment of its investments in certain non-publicly traded companies. The tax impacts related to all of these items and other non-operational tax adjustments amounted to a tax benefit of $86.2 million and $71.9 million in the nine months ended December 31, 2005 and 2004, respectively.

Press Release	2 Changi South Lane Singapore 486123	Tel: +65.6299.8888

SCHEDULE III

FLEXTRONICS INTERNATIONAL LTD. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

	December 31, 2005		March 31, 2005
ASSETS
Current Assets:
Cash and cash equivalents	$	1,083,637	$	869,258
Accounts receivable, net		1,615,900		1,842,010
Inventories		1,659,050		1,518,866
Deferred income taxes		11,161		12,117
Other current assets		622,812		544,914
Total current assets		4,992,560		4,787,165
Property and equipment, net		1,600,999		1,704,516
Deferred income taxes		599,647		684,952
Goodwill and other intangibles, net		3,270,977		3,502,189
Other assets		466,847		328,750
Total assets	$	10,931,030	$	11,007,572
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Bank borrowings, current portion of long-term debt and capital lease obligations	$	10,469	$	26,166
Accounts payable		2,872,527		2,523,269
Other current liabilities		1,102,502		1,330,759
Total current liabilities		3,985,498		3,880,194
Long-term debt, net of current portion:
Zero Coupon Convertible Junior Subordinated Notes due 2008		195,000		200,000
1 % Convertible Subordinated Notes due 2010		500,000		500,000
6 1/2 % Senior Subordinated Notes due 2013		399,650		399,650
6 1/4 % Senior Subordinate Notes due 2014		396,366		490,270
Other long-term debt and capital lease obligations		9,536		119,650
Other liabilities		131,185		193,760
Total shareholders’ equity		5,313,795		5,224,048
Total liabilities and shareholders’ equity	$	10,931,030	$	11,007,572