What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2020-10-22 compared with 2019-10-22 · 819 added, 1351 removed, 729 unchanged (75% of the section changed)

1 unchanged sentence

(a) Evaluation of Disclosure Controls and Procedures

We carried out an evaluation required by Rules 13a-15 and

15d-15 under the Exchange Act (the Evaluation), under the supervision and with the participation of our Chief Executive Officer (CEO) and Chief Financial Officer (CFO), of

the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15 and 15d-15 under the Exchange Act as of August 31, 2019.

Evaluation, our CEO and CFO concluded that the design and operation of our disclosure controls were effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is (i) recorded,

processed, summarized and reported within the time periods specified in SEC rules and forms, and (ii) accumulated and communicated to our senior management, including our CEO and CFO, to allow timely decisions regarding required disclosure.

We carried out an evaluation required by Rules 13a-15 and 15d-15 under the Exchange Act (the “Evaluation”), under the supervision and with the participation of our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15 and 15d-15 under the Exchange Act as of August 31, 2020 .

Based on the Evaluation, our CEO and CFO concluded that the design and operation of our disclosure controls were effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (ii) accumulated and communicated to our senior management, including our CEO and CFO, to allow timely decisions regarding required disclosure.

(b) Management’s Report on Internal Control over Financial Reporting

We assessed the effectiveness of our internal control over financial reporting as of August 31, 2020 .

Managements report on internal

control over financial reporting as of August 31, 2019 is incorporated herein at Item 15.

Ernst & Young LLP, our independent registered public accounting firm, issued an audit report on the effectiveness of our internal control

over financial reporting as of August 31, 2019, which is incorporated herein at Item 15.

Our management, including our CEO and

CFO, does not expect that our internal control over financial reporting will prevent all errors and all fraud.

A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of

the control system are met.

Management’s report on internal control over financial reporting as of August 31, 2020 is incorporated herein at Item 15.

Ernst & Young LLP, our independent registered public accounting firm, issued an audit report on the effectiveness of our internal control over financial reporting as of August 31, 2020 , which is incorporated herein at Item 15.

Our management, including our CEO and CFO, does not expect that our internal control over financial reporting will prevent all errors and all fraud.

A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.

Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs.

Because of the inherent limitations in all

control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.

These inherent limitations include the realities that judgments in

decision-making can be faulty, and that breakdowns can occur because of simple error or mistake.

Additionally, controls may be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the

The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and

there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions;

over time, a control may become inadequate because of changes in conditions, or the degree of compliance with the policies or

procedures may deteriorate.

Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.

These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake.

Additionally, controls may be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control.

The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions;

over time, a control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.

Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

Notwithstanding the foregoing limitations on the effectiveness of controls, we have reached the conclusions set forth in Managements

report on internal control over financial reporting as of August 31, 2019.

The SECs general guidance permits the exclusion of

an assessment of the effectiveness of a registrants controls and procedures as they relate to its internal control over financial reporting for an acquired business during the first year following such acquisition if, among other circumstances

and factors, there is not an adequate amount of time between the acquisition date and the date of assessment.

On February 25, 2019 and April 29, 2019, we completed the initial closing and second closing, respectively, of our acquisition of

certain assets of Johnson & Johnson Medical Devices Companies (JJMD).

In accordance with the SEC guidance, the scope of our evaluation of internal controls over financial reporting as of August 31, 2019 did not include the

internal control over financial reporting of these acquired operations.

Assets acquired from JJMD represent 1.8% of our total consolidated assets at August 31, 2019.

Net revenue generated by JJMD subsequent to the dates of acquisition

represents 1.3% of our consolidated net revenue for the fiscal year ended August 31, 2019.

Notwithstanding the foregoing limitations on the effectiveness of controls, we have reached the conclusions set forth in Management’s report on internal control over financial reporting as of August 31, 2020 .

The SEC’s general guidance permits the exclusion of an assessment of the effectiveness of a registrant’s controls and procedures as they relate to its internal control over financial reporting for an acquired business during the first year following such acquisition if, among other circumstances and factors, there is not an adequate amount of time between the acquisition date and the date of assessment.

On September 30, 2019, we completed the third closing of our acquisition of certain assets of Johnson & Johnson Medical Devices Companies (“JJMD”).

In accordance with the SEC guidance, the scope of our evaluation of internal controls over financial reporting as of August 31, 2020 did not include the internal control over financial reporting of these acquired operations.

Assets acquired from JJMD during the third closing represent 2.1% of our total consolidated assets at August 31, 2020 .

Net revenue generated by these assets subsequent to the date of acquisition represents 1.9% of our consolidated net revenue for the fiscal year ended August 31, 2020 .

We continue to evaluate internal controls over financial reporting for these acquired operations.

From the acquisition dates to August 31, 2019, the

processes and systems of the acquired operations did not significantly impact our internal control over financial reporting.

Control over Financial Reporting

For our fiscal quarter ended August 31, 2019, we did not identify any modifications to our

internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

From the acquisition date to August 31, 2020 , the processes and systems of the acquired operations did not significantly impact our internal control over financial reporting.

For our fiscal quarter ended August 31, 2020 , we did not identify any modifications to our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Other Information

Directors, Executive Officers and Corporate Governance

Information regarding our executive officers is included in Item 1 of Part I of this Report under the heading Information about our

Executive Officers.

The other information required by this item is incorporated by reference to the information set forth under the

captions Election of Directors, Beneficial Ownership Delinquent Section 16(a) Reports and Corporate Governance and Board of Directors in our Proxy Statement for the Annual Meeting of

Stockholders to be filed with the SEC within 120 days after the end of our fiscal year ended August

31, 2019 (Proxy Statement).

Information regarding our executive officers is included in Item 1 of Part I of this Report under the heading “Information about our Executive Officers.”

The other information required by this item is incorporated by reference to the information set forth under the captions “Election of Directors”, “Beneficial Ownership – Delinquent Section 16(a) Reports”, “Corporate Governance”, “Board of Directors” and “Audit Committee Matters” in our Proxy Statement for the Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of our fiscal year ended August 31, 2020 (“Proxy Statement”).

Executive Compensation

The information required by this item is incorporated by reference to the information set forth under the captions Compensation Matters

Compensation Discussion and Analysis, Board of Directors Director Compensation, Corporate Governance Compensation Committee Interlocks and Insider Participation in our Proxy Statement.

The information required by this item is incorporated by reference to the information set forth under the captions “Compensation Matters”, “Board of Directors – Director Compensation” and “Corporate Governance – Compensation Committee Interlocks and Insider Participation” in our Proxy Statement.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The information required by this item is incorporated by reference to the information set forth under the captions Beneficial Ownership

Share Ownership by Principal Stockholders and Management and Compensation Matters Equity Compensation Plan Information in our Proxy Statement.

The information required by this item is incorporated by reference to the information set forth under the captions “Beneficial Ownership – Share Ownership by Principal Stockholders and Management” and “Compensation Matters – Equity Compensation Plan Information” in our Proxy Statement.

Certain Relationships and Related Transactions, and Director Independence

The information required by this item is incorporated by reference to the information set forth under the captions Corporate Governance

Related Party Transactions Certain Related Party Transactions, Corporate Governance Determinations of Director Independence in our Proxy Statement.

The information required by this item is incorporated by reference to the information set forth under the captions “Corporate Governance – Related Party Transactions – Certain Related Party Transactions”, “Corporate Governance –Determinations of Director Independence” in our Proxy Statement.

Principal Accounting Fees and Services

The information required by this item is incorporated by reference to the information set forth under the captions Audit Committee

Matters Principal Accounting Fees and Services, Policy on Audit Committee Pre-Approval of Audit, Audit-Related and Permissible Non-Audit

Services and Ratification of Appointment of Independent Registered Public Accounting Firm in our Proxy Statement.

The information required by this item is incorporated by reference to the information set forth under the captions “Audit Committee Matters – Principal Accounting Fees and Services”, “– Policy on Audit Committee Pre-Approval of Audit, Audit-Related and Permissible Non-Audit Services” and “Ratification of Appointment of Independent Registered Public Accounting Firm” in our Proxy Statement.

Exhibits and Financial Statement Schedules

1 unchanged sentence

Financial Statements.

Our consolidated financial statements, and related notes thereto, with the

independent registered public accounting firm reports thereon are included in Part IV of this report on the pages indicated by the Index to Consolidated Financial Statements and Schedule.

Our consolidated financial statements, and related notes thereto, with the independent registered public accounting firm reports thereon are included in Part IV of this report on the pages indicated by the Index to Consolidated Financial Statements and Schedule.

Financial Statement Schedule.

Our financial statement schedule is included in Part IV of this report on

the page indicated by the Index to Consolidated Financial Statements and Schedule.

Our financial statement schedule is included in Part IV of this report on the page indicated by the Index to Consolidated Financial Statements and Schedule.

This financial statement schedule should be read in conjunction with our consolidated financial statements, and related notes thereto.

Schedules not listed in the Index to Consolidated Financial Statements and Schedule have been omitted because they are not applicable, not

required, or the information required to be set forth therein is included in the consolidated financial statements or notes thereto.

Schedules not listed in the Index to Consolidated Financial Statements and Schedule have been omitted because they are not applicable, not required, or the information required to be set forth therein is included in the consolidated financial statements or notes thereto.

See Item 15(b) below.

The following exhibits are included as part of, or incorporated by reference into, this

The following exhibits are included as part of, or incorporated by reference into, this Report.

Incorporated by Reference Herein

Filing Date/ Period End

Registrant’s Certificate of Incorporation, as amended.

1 unchanged sentence

Form of Certificate for Shares of the Registrant’s Common Stock.

Indenture, dated January

16, 2008, with respect to Senior Debt Securities of the Registrant, between the Registrant and The Bank of New York Mellon Trust Company, N.A.

Indenture, dated January 16, 2008, with respect to Senior Debt Securities of the Registrant, between the Registrant and The Bank of New York Mellon Trust Company, N.A.

(formerly known as The Bank of New York Trust Company, N.A.), as trustee.

Form of 5.625% Registered Senior Notes issued on November 2, 2010

Form of 4.700% Registered Senior Notes issued on August 3, 2012

Officers Certificate of the Registrant pursuant to the Indenture, dated November 2, 2010

Officers’ Certificate of the Registrant pursuant to the Indenture, dated August 3, 2012.

Officers’ Certificate, dated as of January 17, 2018, establishing the 3.950% Senior Notes due 2028.

Officers’ Certificate, dated as of January 15, 2020, establishing the 3.600% Senior Notes due 2030.

Officers’ Certificate, dated as of July 13, 2020, establishing the 3.000% Senior Notes due 2031.

Description of Jabil Securities

1 unchanged sentence

Form of Indemnification Agreement between the Registrant and its Officers and Directors.

Jabil 2002 Stock Incentive Plan.

Form of Jabil Circuit, Inc.

2002 Stock Incentive Plan Stock Option Agreement (prior form).

Form of Jabil Circuit, Inc.

2002 Stock Incentive Plan-French Subplan Stock Option Agreement (prior form).

Form of Jabil Circuit, Inc.

2002 Stock Incentive Plan-UK Subplan CSOP Option Certificate (prior form).

Form of Jabil Circuit, Inc.

2002 Stock Incentive Plan-UK Subplan Stock Option Agreement (prior form).

Form of Jabil Circuit, Inc.

Restricted Stock Award Agreement (prior form).

Form of Jabil Circuit, Inc.

Time-Based Restricted Stock Award Agreement (prior form).

Form of Jabil Circuit, Inc.

Performance-Based Restricted Stock Award Agreement (prior form).

Form of Stock Appreciation Right Agreement (prior form).

Addendum to the Terms and Conditions of the Jabil Circuit, Inc.

2002 Stock Incentive Plan for Grantees Resident in France.

Schedule to the Jabil Circuit, Inc.

2002 Stock Incentive Plan for Grantees Resident in the United Kingdom.

Jabil 2011 Stock Award and Incentive Plan, as Amended and Restated.

25 unchanged sentences

Restricted Stock Unit Award Agreement (TBRSU-DIR)

Form of Jabil Inc.

Restricted Stock Unit Award Agreement (PBRSU EPS - Executive-EU).

Form of Jabil Inc.

Restricted Stock Unit Award Agreement (PBRSU EPS - Executive - Non-EU).

Form of Jabil Inc.

Restricted Stock Unit Award Agreement (PBRSU TSR - ONEU).

Form of Jabil Inc.

Restricted Stock Unit Award Agreement (PBRSU TSR - OEU).

Form of Jabil Inc.

Restricted Stock Unit Award Agreement (TBRSU-ONEU).

Form of Jabil Inc.

Restricted Stock Unit Award Agreement (TBRSU-OEU).

Form of Jabil Inc.

Restricted Stock Unit Award Agreement (TBRSU-DIR).

Executive Deferred Compensation Plan.

Amended and Restated Five Year Credit Agreement dated as of July

6, 2015, amoung the Registraint;

the intial lenders named therein;

Credit Agreement dated as of January 22, 2020 among Jabil Inc.;

the initial lenders named in the Agreement;

Citibank, N.A., as administrative agent;

1 unchanged sentence

and Bank of America, N.A., as co-syndication agents;

BNP Paribas, Mizuho Bank,

Ltd., and The Bank of Nova Scotia as documentation agents;

and Citigroup Global Markets Inc., JPMorgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, BNP Paribas Securities Corp., Mizuho Bank, Ltd.

and The Bank of Nova

Credit Agreement dated as of August

24, 2018 among Jabil Inc.;

the initial lenders named in the Agreement;

Mizuho Bank, Ltd., as administrative agent;

and Mizuho Bank, Ltd., MUFG Bank, Ltd.

and Sumitomo Mitsui Banking Corporation, as joint lead arrangers and joint bookrunners.

BNP Paribas, Mizuho Bank, Ltd., MUFG Bank, Ltd.

and Sumitomo Mitsui Banking Corporation, as documentation agents;

and Citibank, N.A., JPMorgan Chase Bank, N.A., BofA Securities, Inc., BNP Paribas Securities Corp., Mizuho Bank, Ltd., MUFG Bank, Ltd., and Sumitomo Mitsui BankingCorporation, as joint lead arrangers and joint bookrunners.

Credit Agreement dated as of April 24, 2020 among Jabil Inc.;

the initial lenders named in the Credit Agreement;

Mizuho Bank, Ltd.

(“Mizuho”), as administrative agent;

BNP Paribas and Sumitomo Mitsui Banking Corporation (“SMBC”), as co-syndication agents;

Credit Agricole Corporate and Investment Bank, MUFG Union Bank, N.A.

Bank National Association as Documentation Agents;

and Mizuho, BNP Paribas Securities Corp.

and SMBC as joint lead arrangers and joint bookrunners.

List of Subsidiaries.

5 unchanged sentences

Section 1350 Certification by the Chief Financial Officer of the Registrant.

Interactive data files pursuant to Rule 405 of Regulation S-T:

The following financial information from Jabil’s Annual Report on Form 10-K for the fiscal period ended August 31, 2020, formatted in Inline XBRL:

(i) Consolidated Balance Sheets as of August 31, 2020 and August 31, 2019;

(ii) Consolidated Statement of

Operations for the fiscal years ended August 31, 2019, 2018 and 2017;

(ii) Consolidated Statement of Operations for the fiscal years ended August 31, 2020, 2019 and 2018;

(iii) Consolidated Statements of Comprehensive Income for the fiscal years ended August 31, 2020, 2019 and 2018;

(iv) Consolidated Statements of Comprehensive

Stockholders Equity for the fiscal years ended August 31, 2019, 2018 and 2017;

(iv) Consolidated Statements of Comprehensive Stockholders’ Equity for the fiscal years ended August 31, 2020, 2019 and 2018;

(v) Consolidated Statements of Cash Flows for the fiscal years ended August 31, 2020, 2019 and 2018;

and (vi) Notes to Consolidated Financial

and (vi) Notes to Consolidated Financial Statements.

Cover Page Interactive Data File - Embedded within the inline XBRL Document.

Indicates management compensatory plan, contract of arrangement.

Filed or furnished herewith.

XBRL (Extensible Business Reporting Language) Filed Electronically with this report.

Certain instruments with respect to long-term debt of the Company and its consolidated subsidiaries are not filed herewith pursuant to

Item 601(b)(4)(iii) of Regulation S-K since the total amount of securities authorized under each such instrument does not exceed 10% of the total assets of the Company and its subsidiaries on a

consolidated basis.

Certain instruments with respect to long-term debt of the Company and its consolidated subsidiaries are not filed herewith pursuant to Item 601(b)(4)(iii) of Regulation S-K since the total amount of securities authorized under each such instrument does not exceed 10% of the total assets of the Company and its subsidiaries on a consolidated basis.

The Company agrees to furnish a copy of any such instrument to the SEC upon request.

3 unchanged sentences

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULE

Managements Report on Internal Control over Financial

Reports of Independent Registered Public Accounting Firm (Ernst

Management’s Report on Internal Control over Financial Reporting

Reports of Independent Registered Public Accounting Firm (Ernst & Young LLP)

Consolidated Financial Statements:

Consolidated Balance Sheets – August 31, 2020 and 2019

Consolidated Statements of Operations Fiscal years ended August

31, 2019, 2018, and 2017

Consolidated Statements of Comprehensive Income Fiscal years ended August 31,

2019, 2018, and 2017

Consolidated Statements of Stockholders Equity Fiscal years ended

August 31, 2019, 2018, and 2017

Consolidated Statements of Cash Flows Fiscal years ended August

31, 2019, 2018 and 2017

Consolidated Statements of Operations – Fiscal years ended August 31, 2020, 2019, and 2018

Consolidated Statements of Comprehensive Income – Fiscal years ended August 31, 2020, 2019, and 2018

Consolidated Statements of Stockholders’ Equity – Fiscal years ended August 31, 2020, 2019, and 2018

Consolidated Statements of Cash Flows – Fiscal years ended August 31, 2020, 2019 and 2018

Notes to Consolidated Financial Statements

1 unchanged sentence

Schedule II – Valuation and Qualifying Accounts

MANAGEMENTS REPORT ON INTERNAL CONTROL OVER FINANCIAL

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Management of Jabil Inc.

(the Company) is responsible for establishing and maintaining adequate internal

control over financial reporting as defined in Rule13a-15(f) of the Securities Exchange Act of 1934, as amended.

(the “Company”) is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule13a-15(f) of the Securities Exchange Act of 1934, as amended.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of

any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Under the supervision of and with the participation of the Chief Executive Officer and the Chief Financial Officer, the Companys

management conducted an assessment of the effectiveness of the Companys internal control over financial reporting as of August 31, 2019.

Management based this assessment on the framework as established in Internal Control

Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Managements assessment included an evaluation of the design of the Companys internal control over financial reporting

and testing of the effectiveness of its internal control over financial reporting.

Based on this assessment, management has concluded

that, as of August 31, 2019, the Company maintained effective internal control over financial reporting.

Ernst & Young LLP,

the Companys independent registered public accounting firm, issued an audit report on the effectiveness of the Companys internal control over financial reporting which follows this report.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Under the supervision of and with the participation of the Chief Executive Officer and the Chief Financial Officer, the Company’s management conducted an assessment of the effectiveness of the Company’s internal control over financial reporting as of August 31, 2020 .

Management based this assessment on the framework as established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Management’s assessment included an evaluation of the design of the Company’s internal control over financial reporting and testing of the effectiveness of its internal control over financial reporting.

On September 30, 2019, we completed the third closing of our acquisition of certain assets of Johnson & Johnson Medical Devices Companies (“JJMD”).

Assets acquired from JJMD during the third closing represent 2.1% of our total consolidated assets at August 31, 2020.

Net revenue generated by these assets subsequent to the date of acquisition represents 1.9% of our

consolidated net revenue for the fiscal year ended August 31, 2020.

We continue to evaluate internal controls over financial reporting for these acquired operations.

From the acquisition date to August 31, 2020, the processes and systems of the acquired operations did not significantly impact our internal control over financial reporting.

Based on this assessment, management has concluded that, as of August 31, 2020 , the Company maintained effective internal control over financial reporting.

Ernst & Young LLP, the Company’s independent registered public accounting firm, issued an audit report on the effectiveness of the Company’s internal control over financial reporting which follows this report.

October 22, 2020

2 unchanged sentences

Opinion on Internal Control over Financial Reporting

have audited Jabil Inc.

and subsidiaries internal control over financial reporting as of August 31, 2019, based on criteria established in Internal ControlIntegrated Framework issued by the Committee of Sponsoring Organizations of

the Treadway Commission (2013 framework) (the COSO criteria).

We have audited Jabil Inc.

and subsidiaries’ internal control over financial reporting as of August 31, 2020 , based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).

In our opinion, Jabil Inc.

and subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as of August 31, 2019, based on

the COSO criteria.

As indicated in the accompanying Managements Report on Internal Control over Financial Reporting, managements

assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of the operations acquired from Johnson & Johnson Medical Devices Companies (JJMD), which are included in

the 2019 consolidated financial statements of the Company and constituted 1.8% of consolidated total assets as of August 31, 2019 and 1.3% of consolidated net revenue for the year then ended.

Our audit of internal control over financial

reporting of the Company also did not include an evaluation of the internal control over financial reporting of the operations acquired from JJMD.

also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of August 31,

2019 and 2018, and the related consolidated statements of operations, comprehensive income, stockholders equity and cash flows for each of the three years in the period ended August 31, 2019, and the related notes and financial statement

schedule listed in the Index at Item 15(a), and our report dated October 22, 2019 expressed an unqualified opinion thereon.

and subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as of August 31, 2020 , based on the COSO criteria.

As indicated in the accompanying Management’s Report on Internal Control over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of the operations acquired in the third closing of the Company’s acquisition of certain assets of Johnson & Johnson Medical Devices Companies (JJMD), which are included in the 2020 consolidated financial statements of the Company and constituted 2.1% of consolidated total assets as of August 31, 2020 and 1.9% of consolidated net revenue for the year then ended.

Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of the operations acquired in the third closing of the Company’s acquisition of certain assets of JJMD.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of August 31, 2020 and 2019 , and the related consolidated statements of operations, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended August 31, 2020 , and the related notes and financial statement schedule listed in the Index at Item 15(a), and our report dated October 22, 2020 expressed an unqualified opinion thereon.

Basis for Opinion

The Companys management is responsible for maintaining effective internal control over financial reporting and for its assessment of the

effectiveness of internal control over financial reporting included in the accompanying Managements Report on Internal Control over Financial Reporting.

Our responsibility is to express an opinion on the Companys internal control over

financial reporting based on our audit.

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting.

Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and

regulations of the Securities and Exchange Commission and the PCAOB.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and

evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A companys internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial

reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A companys internal control over financial reporting includes those policies and procedures that

(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as

necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors

of the company;

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of

effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ ERNST & YOUNG LLP

4 unchanged sentences

Opinion on the Financial Statements

We have audited the

accompanying consolidated balance sheets of Jabil Inc.

and subsidiaries (the Company) as of August 31, 2019 and 2018, the related consolidated statements of operations, comprehensive income, stockholders equity and cash flows for each of

the three years in the period ended August 31, 2019, and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the consolidated financial statements).

In our opinion, the

consolidated financial statements present fairly, in all material respects, the financial position of the Company at August 31, 2019 and 2018, and the results of its operations and its cash flows for each of the three years in the period ended

August 31, 2019, in conformity with U.S.

We have audited the accompanying consolidated balance sheets of Jabil Inc.

and subsidiaries (the Company) as of August 31, 2020 and 2019 , the related consolidated statements of operations, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended August 31, 2020 , and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at August 31, 2020 and 2019 , and the results of its operations and its cash flows for each of the three years in the period ended August 31, 2020 , in conformity with U.S.

generally accepted accounting principles.

We also have audited, in accordance with the standards of the

Public Company Accounting Oversight Board (United States) (PCAOB), the Companys internal control over financial reporting as of August 31, 2019, based on criteria established in Internal Control-Integrated Framework issued by the

Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated October 22, 2019 expressed an unqualified opinion thereon.

Adoption of New Accounting Standards

As discussed in

Note 18 to the consolidated financial statements, the Company changed its method of accounting for revenue from contracts with customers and certain fulfillment costs in 2019 due to the adoption of ASU

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of August 31, 2020 , based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated October 22, 2020 expressed an unqualified opinion thereon.

Adoption of New Accounting Standard

As discussed in Note 13 to the consolidated financial statements, the Company changed its method of accounting for revenue from contracts with customers and certain fulfillment costs in 2019 due to the adoption of ASU No.

2014-09, Revenue from Contracts with Customers (Topic 606) .

See below for discussion of our related critical audit matter.

As discussed in Note 2 to the consolidated financial statements, the Company changed its classification of cash receipts on the deferred purchase price

receivable on asset-backed securitization transactions in 2019 due to the adoption of ASU No.

2016-15, Statement of Cash Flows (Topic 230):

Classification of Certain Cash Receipts and Cash Payments.

Basis for Opinion

These financial statements are the

responsibility of the Companys management.

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be independent

with respect to the Company in accordance with the U.S.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable

assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to

error or fraud, and performing procedures that respond to those risks.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the

accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters

communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to

the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole,

and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Adoption of ASU No.

2014-09, Revenue from Contracts with Customers

Description of the Matter

As more fully described above and in Note 18 to the consolidated financial statements, effective September 1, 2018, the Company adopted ASU No.

2014-09, Revenue from Contracts with Customers , on a modified retrospective basis, which resulted in a $43 million transition adjustment to increase retained earnings.

Auditing the Companys implementation of the new revenue standard was challenging

due to the judgment in applying the new standard regarding whether performance obligations within the Companys contracts with customers are satisfied over time or at a point in time.

More specifically, applying the criteria within the new

standard for determining the timing of satisfaction of performance obligations, such as whether an enforceable right to payment for performance completed to date exists, was complex.

How We Addressed the Matter in Our Audit

We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Companys implementation

of the new revenue standard.

We tested controls over managements contract reviews, including controls over the application of the new standard to contracts to assess whether performance obligations are satisfied over time or at a point in

To test the Companys implementation of the new revenue standard, our

audit procedures included, among others, assessing whether the Companys new accounting policy complies with the new standard, evaluating the terms of the Companys contracts with customers and evaluating managements application of

the new standard to the Companys contracts.

More specifically, we inspected the terms of a sample of the Companys contracts and evaluated managements determination of whether performance obligations are satisfied over time or at a

point in time based on the criteria within the new standard.

We also tested the data and assumptions used in the computation of the Companys transition adjustment.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Uncertain Tax Positions

Description of the Matter

As disclosed in Note 4 to the consolidated financial statements, the Company operates in a complex multinational tax environment and is

subject to laws and regulations in various jurisdictions regarding intercompany transactions.

Uncertain tax positions may arise from interpretations and judgments made by the Company in the application of the relevant laws, regulations and tax

The Company uses significant judgment in (1) determining whether the technical merits of tax positions for certain intercompany transactions are more-likely-than-not to be sustained and

(2) measuring the related amount of tax benefit that qualifies for recognition.

Auditing the tax positions related to certain intercompany transactions was challenging because the recognition and measurement of the tax positions is highly

judgmental and is based on interpretations of laws, regulations and tax rulings.

As disclosed in Note 15 to the consolidated financial statements, the Company operates in a complex multinational tax environment and is subject to laws and regulations in various jurisdictions regarding intercompany transactions.

Uncertain tax positions may arise from interpretations and judgments made by the Company in the application of the relevant laws, regulations and tax rulings.

The Company uses significant judgment in (1) determining whether the technical merits of tax positions for certain intercompany transactions are more-likely-than-not to be sustained and (2) measuring the related amount of tax benefit that qualifies for recognition.

Auditing the tax positions related to certain intercompany transactions was challenging because the recognition and measurement of the tax positions is highly judgmental and is based on interpretations of laws, regulations and tax rulings.

How We Addressed the Matter in Our Audit

We tested controls over the Companys process to assess the technical merits of tax positions related to certain intercompany

transactions and also tested controls over the Companys process to determine the application of the relevant laws, regulations and tax rulings, including managements process to recognize and measure the related tax positions.

In testing the recognition and measurement criteria, we involved tax professionals to

assist in assessing the technical merits of the Companys tax positions.

In addition, we used our knowledge of and experience with the application of domestic and international income tax laws by the relevant tax authorities to evaluate the

Companys accounting for those tax positions.

We also assessed the Companys assumptions and data used to measure the amount of tax benefit that qualifies for recognition, and tested the accuracy of the calculations.

Lastly, we evaluated

the Companys income tax disclosures included in Note 4 in relation to the Companys uncertain tax positions.

We tested controls over the Company’s process to assess the technical merits of tax positions related to certain intercompany transactions and also tested controls over the Company’s process to determine the application of the relevant laws, regulations and tax rulings, including management’s process to recognize and measure the related tax positions.

In testing the recognition and measurement criteria, we involved tax professionals to assist in assessing the technical merits of the Company’s tax positions.

In addition, we used our knowledge of and experience with the application of domestic and international income tax laws by the relevant tax authorities to evaluate the Company’s accounting for those tax positions.

We also assessed the Company’s assumptions and data used to measure the amount of tax benefit that qualifies for recognition, and tested the clerical accuracy of the calculations.

Lastly, we evaluated the Company’s income tax disclosures included in Note 15 in relation to the Company’s uncertain tax positions.

/s/ ERNST & YOUNG LLP

5 unchanged sentences

(in thousands, except for share data)

August 31, 2020

August 31, 2019

Current assets:

6 unchanged sentences

Property, plant and equipment, net of accumulated depreciation

Operating lease right-of-use asset

Intangible assets, net of accumulated amortization

5 unchanged sentences

Accrued expenses

Current operating lease liabilities

Total current liabilities

1 unchanged sentence

Other liabilities

Non-current operating lease liabilities

Income tax liabilities

4 unchanged sentences

Preferred stock, $0.001 par value, authorized 10,000,000 shares;

no shares issued and

no shares issued and outstanding

Common stock, $0.001 par value, authorized 500,000,000 shares;

260,406,796 and 257,130,145 shares

issued and 153,520,380 and 164,588,172 shares outstanding at August 31, 2019 and August 31, 2018, respectively

263,830,270 and 260,406,796 shares issued and 150,330,358 and 153,520,380 shares outstanding at August 31, 2020 and August 31, 2019, respectively

Additional paid-in capital

1 unchanged sentence

Accumulated other comprehensive loss

Treasury stock at cost, 106,886,416 and 92,541,973 shares as of August 31, 2019 and

August 31, 2018, respectively

Treasury stock at cost, 113,499,912 and 106,886,416 shares as of August 31, 2020 and August 31, 2019, respectively

Total Jabil Inc.

12 unchanged sentences

Amortization of intangibles

Restructuring and related charges

Loss on disposal of subsidiaries

Restructuring, severance and related charges

Operating income

Restructuring of securities loss

Loss on securities

Other expense

3 unchanged sentences

Income tax expense

Net income (loss) attributable to noncontrolling interests, net of tax

Net income attributable to noncontrolling interests, net of tax

Net income attributable to Jabil Inc.

16 unchanged sentences

Total change in available for sale securities

Actuarial (loss) gain

Prior service credit (cost)

Total other comprehensive (loss) income

Actuarial gain (loss)

Prior service (cost) credit

Total other comprehensive income (loss)

Comprehensive income

Comprehensive income (loss) attributable to noncontrolling interests

Comprehensive income attributable to noncontrolling interests

Comprehensive income attributable to Jabil Inc.

22 unchanged sentences

Ending balances

Accumulated other comprehensive (loss) income:

Accumulated other comprehensive loss:

Beginning balances

Other comprehensive (loss) income

Other comprehensive income (loss)

Ending balances

6 unchanged sentences

Beginning balances

Net income (loss) attributable to noncontrolling interests

Net income attributable to noncontrolling interests

Acquisition of noncontrolling interests

Purchase of noncontrolling interests

Disposition of noncontrolling interests

9 unchanged sentences

Cash flows provided by (used in) operating activities:

Adjustments to reconcile net income to net cash provided by (used in) operating

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

Depreciation and amortization

2 unchanged sentences

Deferred income taxes

Provision for allowance for doubtful accounts

Restructuring of securities loss

Loss (gain) on sale of property, plant and equipment

Provision for allowance for doubtful accounts and notes receivable

Loss on securities

Change in operating assets and liabilities, exclusive of net assets acquired:

15 unchanged sentences

Dividends paid to stockholders

Net proceeds from exercise of stock options and issuance of common stock under employee stock

purchase plan

Net proceeds from exercise of stock options and issuance of common stock under employee stock purchase plan

Treasury stock minimum tax withholding related to vesting of restricted stock

1 unchanged sentence

Effect of exchange rate changes on cash and cash equivalents

Net (decrease) increase in cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents at beginning of period

7 unchanged sentences

Description of Business and Summary of Significant Accounting Policies

(together with its subsidiaries, herein referred to as the Company) is one of the leading providers of manufacturing

services and solutions.

(together with its subsidiaries, herein referred to as the “Company”) is one of the leading providers of manufacturing services and solutions.

The Company provides comprehensive electronics design, production and product management services to companies in various industries and end markets.

The Companys services combine a highly automated, continuous flow

manufacturing approach with advanced electronic design and design for manufacturability technologies.

The Company’s services combine a highly automated, continuous flow manufacturing approach with advanced electronic design and design for manufacturability technologies.

The Company is headquartered in St.

4 unchanged sentences

All significant intercompany balances and transactions have been eliminated in preparing the consolidated financial statements.

The Company has made certain reclassification adjustments to conform prior periods Consolidated Financial

Statements and Notes to the Consolidated Financial Statements to the current presentation.

The Company has made certain reclassification adjustments to conform prior periods’ Consolidated Financial Statements and Notes to the Consolidated Financial Statements to the current presentation.

Use of Accounting Estimates

Management is required to make estimates and assumptions during the preparation of the consolidated financial statements and accompanying notes

in conformity with U.S.

Management is required to make estimates and assumptions during the preparation of the consolidated financial statements and accompanying notes in conformity with U.S.

generally accepted accounting principles (“U.S.

These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the dates of

the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.

These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the dates of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.

Actual results could differ materially from these estimates and assumptions.

Cash and Cash Equivalents

equivalents consist of investments that are readily convertible to cash with original maturities of 90 days or less.

Cash equivalents consist of investments that are readily convertible to cash with original maturities of 90 days or less.

Accounts Receivable

Accounts receivable consist of trade receivables and other miscellaneous receivables.

The Company maintains an allowance for

doubtful accounts for estimated losses resulting from the inability of its customers to make required payments.

The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments.

Bad debts are charged to this allowance after all attempts to collect the balance are exhausted.

Allowances of $17.2 million and

$15.2 million were recorded as of August 31, 2019 and 2018, respectively.

Allowances of $ 25.8 million and $ 17.2 million were recorded as of August 31, 2020 and 2019 , respectively.

As the financial condition and circumstances of the Company’s customers change, adjustments to the allowance for doubtful accounts are made as necessary.

Contract Balances

revenue recognition may differ from the timing of invoicing to customers.

The Company records an asset when revenue is recognized prior to invoicing a customer (contract assets) while a liability is recognized when a customer pays an

invoice prior to the Company transferring control of the goods or services (contract liabilities).

Amounts recognized as contract assets are generally transferred to receivables in the succeeding quarter due to the short-term nature of

the manufacturing cycle.

Timing of revenue recognition may differ from the timing of invoicing to customers.

The Company records an asset when revenue is recognized prior to invoicing a customer (“contract assets”) while a liability is recognized when a customer pays an invoice prior to the Company transferring control of the goods or services (“contract liabilities”).

Amounts recognized as contract assets are generally transferred to receivables in the succeeding quarter due to the short-term nature of the manufacturing cycle.

Contract assets are classified separately on the Consolidated Balance Sheets and transferred to receivables when right to payment becomes unconditional.

The Company reviews contract assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset

may not be recoverable after considering factors such as the age of the balances and the financial stability of the customer.

The Company reviews contract assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable after considering factors such as the age of the balances and the financial stability of the customer.

Inventories are stated at the lower of cost (on a first in, first out (FIFO) basis) and net realizable value.

Inventory is valued

based on current and forecasted usage, customer inventory-related contractual obligations and other lower of cost and net realizable value considerations.

If actual market conditions or customer product demands are less favorable than those

projected, additional valuation adjustments may be necessary.

Inventory is valued based on current and forecasted usage, customer inventory-related contractual obligations and other lower of cost and net realizable value considerations.

If actual market conditions or customer product demands are less favorable than those projected, additional valuation adjustments may be necessary.

Fulfillment Costs

The Company capitalizes costs incurred to fulfill its contracts that i) relate directly to the contract or anticipated contracts, ii) are

expected to generate or enhance the Companys resources that will be used to satisfy the performance obligation under the contract, and iii) are expected to be recovered through revenue generated from the contract.

Capitalized fulfillment costs

are amortized to cost of revenue as the Company satisfies the related performance obligations under the contract with approximate lives ranging from 1-3 years.

These costs, which are included in prepaid

expenses and other current assets and other assets on the Consolidated Balance Sheets, generally represent upfront costs incurred to prepare for manufacturing activities.

The Company capitalizes costs incurred to fulfill its contracts that i) relate directly to the contract or anticipated contracts, ii) are expected to generate or enhance the Company’s resources that will be used to satisfy the performance obligation under the contract, and iii) are expected to be recovered through revenue generated from the contract.

Capitalized fulfillment costs are amortized to cost of revenue as the Company satisfies the related performance obligations under the contract with approximate lives ranging from 1 year to 3 years .

These costs, which are included in prepaid expenses and other current assets and other assets on the Consolidated Balance Sheets, generally represent upfront costs incurred to prepare for manufacturing activities.

The Company assesses the capitalized fulfillment costs for impairment at the end of each reporting period.

The Company will recognize an

impairment loss to the extent the carrying amount of the capitalized costs exceeds the recoverable amount.

Recoverability is assessed by considering the capitalized fulfillment costs in relation to the forecasted profitability of the related

manufacturing performance obligations.

The Company will recognize an impairment loss to the extent the carrying amount of the capitalized costs exceeds the recoverable amount.

Recoverability is assessed by considering the capitalized fulfillment costs in relation to the forecasted profitability of the related manufacturing performance obligations.

As of August 31, 2020 and 2019, capitalized costs to fulfill were $ 85.3 million and $ 67.1 million , respectively.

Amortization of fulfillment cost were $ 56.6 million and $ 48.6 million during the fiscal years ended August 31, 2020 and 2019, respectively.

Immaterial or no impairments for fulfillments costs were recognized during the fiscal years ended August 31, 2020 and 2019, respectively.

Property, Plant and Equipment, net

Property, plant and equipment is capitalized at cost and depreciated using the straight-line depreciation method over the estimated useful

lives of the respective assets.

Property, plant and equipment is capitalized at cost and depreciated using the straight-line depreciation method over the estimated useful lives of the respective assets.

Estimated useful lives for major classes of depreciable assets are as follows:

8 unchanged sentences

Transportation equipment

Certain equipment held under capital leases is classified as property, plant and equipment and the related

obligation is recorded as accrued expenses and other liabilities on the Consolidated Balance Sheets.

Amortization of assets held under capital leases is included in depreciation expense in the Consolidated Statements of Operations.

Maintenance and

repairs are expensed as incurred.

The cost and related accumulated depreciation of assets sold or retired is removed from the accounts and any resulting gain or loss is reflected in the Consolidated Statements of Operations as a component of

operating income.

Maintenance and repairs are expensed as incurred.

Effective September 1, 2019, the Company’s lease accounting policies changed in conjunction with the adoption of Accounting Standards Update No.

2016-02 (“ASU 2016-02”), Leases (Topic 842).

For further discussion, refer to Note 5 —“Leases” to the Consolidated Financial Statements.

The Company elected to apply the package of practical expedients, which among other things, allows entities to maintain the historical lease classification for existing leases.

The Company has lease agreements that contain both lease and non-lease components.

For lease agreements entered into or reassessed after the adoption of ASU 2016-02, the Company has elected the practical expedient to combine lease and non-lease components for building and real estate leases.

The Company primarily has leases for buildings and real estate with lease terms ranging from 1 year to 36 years .

Leases for other classes of assets are not significant.

For any leases with an initial term in excess of 12 months, the Company determines whether an arrangement is a lease at contract inception by evaluating if the contract conveys the right to use and control the specific property or equipment.

Certain lease agreements contain purchase or renewal options.

These options are included in the lease term when it is reasonably certain that the Company will exercise that option.

Generally, the Company's lease agreements do not contain material residual value guarantees or material restrictive covenants.

Right-of-use assets represent the right to use an underlying asset for the lease term and lease liabilities represent an obligation to make lease payments arising from the lease.

Right-of-use assets and lease liabilities are recognized based on the present value of future lease payments over the lease term at the lease commencement date.

When determining the present value of future payment, the Company uses the incremental borrowing rate when the implicit rate is not readily determinable.

Any payment deemed probable under residual value guarantees is included in lease payments.

Any variable payments, other than those that depend on an index or rate, are excluded from right-of-use assets and lease liabilities.

Leases with an initial term of 12 months or less are not recorded as right-of-use assets and lease liabilities in the Consolidated Balance Sheet.

Lease expense for these leases is recognized on a straight-line basis over the lease term.

Certain equipment and buildings held under finance leases are classified as property, plant and equipment and the related obligation is recorded as accrued expenses and other liabilities on the Consolidated Balance Sheets.

Amortization of assets held under finance leases is included in depreciation expense in the Consolidated Statements of Operations.

Goodwill and Other Intangible Assets

The Company accounts for goodwill in a business combination as the excess of the cost over the fair value of net assets acquired and is

assigned to the reporting unit in which the acquired business will operate.

The Company tests goodwill and indefinite-lived intangible assets for impairment during the fourth quarter of each fiscal year or whenever events or changes in circumstances

indicate the carrying amount may not be recoverable.

The recoverability of goodwill is measured at the reporting unit level by comparing

the reporting units carrying amount, including goodwill, to the fair value of the reporting unit.

The Company determines the fair value of its reporting units based on an average weighting of both projected discounted future results and the

use of comparative market multiples.

The Company accounts for goodwill in a business combination as the excess of the cost over the fair value of net assets acquired and is assigned to the reporting unit in which the acquired business will operate.

The Company tests goodwill and indefinite-lived intangible assets for impairment during the fourth quarter of each fiscal year or whenever events or changes in circumstances indicate the carrying amount may not be recoverable.

The 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.

The Company may elect to perform a qualitative assessment to determine whether it is more likely than not that a reporting unit is impaired.

If the qualitative assessment is not performed or if the Company determines that it is not more likely than not that the fair value of the reporting unit exceeds the carrying value, the Company determines the fair value of its reporting units based on an average weighting of both projected discounted future results and the use of comparative market multiples.

If the carrying amount of the reporting unit exceeds its fair value, goodwill is considered impaired and a second step is performed to measure the amount of loss, if any.

The recoverability of indefinite-lived intangible assets is measured by comparing the carrying amount to the fair value.

determines the fair value of its indefinite-lived intangible assets principally based on a variation of the income approach, known as the relief from royalty method.

If the carrying amount of the indefinite-lived intangible asset exceeds its fair

value, the indefinite-lived intangible asset is considered impaired.

Business combinations can also result in other intangible assets

being recognized.

The Company may elect to perform a qualitative assessment to determine whether it is more likely than not that an indefinite-lived intangible is impaired.

If the qualitative assessment is not performed or if the Company determines that it is not more likely than not that the fair value of an indefinite-lived intangible exceeds the carrying value, the Company determines the fair value principally based on a variation of the income approach, known as the relief from royalty method.

If the carrying amount of the indefinite-lived intangible asset exceeds its fair value, the indefinite-lived intangible asset is considered impaired.

Business combinations can also result in other intangible assets being recognized.

Finite-lived intangible assets are amortized on either a straight-line or accelerated basis over their estimated useful life and include contractual agreements and customer relationships, tradenames and intellectual property.

significant residual values are estimated for the amortizable intangible assets.

No significant residual values are estimated for the amortizable intangible assets.

Long-lived Assets

Long-lived assets, such as property, plant and equipment, and finite-lived intangible assets, are reviewed for impairment whenever events or

changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable.

Recoverability of the asset or asset group is measured by comparing its carrying amount to the undiscounted future net cash flows the asset

is expected to generate.

value, which is generally determined as the present value of estimated future cash flows or as the appraised value.

Long-lived assets, such as property, plant and equipment, and finite-lived intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable.

Recoverability of the asset or asset group is measured by comparing its carrying amount to the undiscounted future net cash flows the asset is expected to generate.

If the carrying amount of an asset or asset group is not recoverable, the Company recognizes an impairment loss based on the excess of the carrying amount of the long-lived asset or asset group over its respective fair value, which is generally determined as the present value of estimated future cash flows or as the appraised value.

Derivative Instruments

All derivative instruments are recorded gross on the Consolidated Balance Sheets at their respective fair values.

The accounting

for changes in the fair value of a derivative instrument depends on the intended use and designation of the derivative instrument.

For derivative instruments that are designated and qualify as a fair value hedge, the gain or loss on the derivative

and the offsetting gain or loss on the hedged item attributable to the hedged risk are recognized in current earnings.

For derivative instruments that are designated and qualify as a cash flow hedge, the effective portion of the gain or loss on the

derivative instrument is initially reported as a component of accumulated other comprehensive income (AOCI), net of tax, and is subsequently reclassified into the line item within the Consolidated Statements of Operations in which the

hedged items are recorded in the same period in which the hedged item affects earnings.

The accounting for changes in the fair value of a derivative instrument depends on the intended use and designation of the derivative instrument.

For derivative instruments that are designated and qualify as a fair value hedge, the gain or loss on the derivative and the offsetting gain or loss on the hedged item attributable to the hedged risk are recognized in current earnings.

For derivative instruments that are designated and qualify as a cash flow hedge, the effective portion of the gain or loss on the derivative instrument is initially reported as a component of accumulated other comprehensive income (“AOCI”), net of tax, and is subsequently reclassified into the line item within the Consolidated Statements of Operations in which the hedged items are recorded in the same period in which the hedged item affects earnings.

The ineffective portion of the gain or loss is recognized immediately in current earnings.

For derivative instruments that are not designated as hedging

instruments, gains and losses from changes in fair values are recognized in earnings.

Cash receipts and cash payments related to derivative instruments are recorded in the same category as the cash flows from the items being hedged on the

Consolidated Statements of Cash Flows.

For derivative instruments that are not designated as hedging instruments, gains and losses from changes in fair values are recognized in earnings.

Cash receipts and cash payments related to derivative instruments are recorded in the same category as the cash flows from the items being hedged on the Consolidated Statements of Cash Flows.

Accumulated Other Comprehensive Income

The following table sets forth the changes in AOCI, net of tax, by component during the fiscal year ended August 31, 2020 (in thousands):

Service (Cost)

Balance as of August 31, 2019

1 unchanged sentence

Amounts reclassified from AOCI

Other comprehensive (loss)

Other comprehensive (loss) income (1)

Balance as of August 31, 2020

Amounts are net of tax, which are immaterial.

The following table sets forth the amounts reclassified from AOCI into the Consolidated

Statements of Operations, and the associated financial statement line item, net of tax, for the periods indicated (in thousands):

Actuarial (loss) gain is net of tax of $( 12.0 ) million .

Amounts for other components of AOCI are net of tax, which are immaterial.

The following table sets forth the amounts reclassified from AOCI into the Consolidated Statements of Operations, and the associated financial statement line item, net of tax, for the periods indicated (in thousands):

Fiscal Year Ended August 31,

Comprehensive Income Components

Financial Statement Line

Foreign currency translation adjustment

Operating income

Realized losses (gains) on derivative

Financial Statement Line Item

Realized losses (gains) on derivative instruments:

Foreign exchange contracts

2 unchanged sentences

Interest expense

Actuarial loss

Actuarial (gain) loss

Prior service credit

Available for sale securities

Total amounts reclassified from

Loss on securities

Total amounts reclassified from AOCI (3)

The Company expects to reclassify $ 4.7 million into earnings during the next twelve months, which will primarily be classified as a component of cost of revenue.

Amounts are included in the computation of net periodic benefit pension cost.

Refer to Note 9

Postretirement and Other Employee Benefits for additional information.

The portions of AOCI reclassified into earnings during the fiscal years ended August 31, 2019 and 2017 for

available for sale securities were due to a restructuring of securities loss and an other than temporary impairments on securities, respectively, and were recorded to restructuring of securities loss and other expense, respectively.

The Company expects to reclassify $17.0 million into earnings during the next twelve months, which will

primarily be classified as a component of cost of revenue.

Refer to Note 10 – “Postretirement and Other Employee Benefits” for additional information.

Amounts are net of tax, which are immaterial for the fiscal years ended August 31, 2020 and 2019 .

amount for the fiscal year ended August 31, 2018 includes a reduction to income tax expense related to derivative instruments of $14.8 million.

The amount for the fiscal year ended August 31, 2018 includes a reduction to income tax expense related to derivative instruments of $ 14.8 million .

Foreign Currency Transactions

the Companys foreign subsidiaries that use a currency other than the U.S.

dollar as their functional currency, the assets and liabilities are translated at exchange rates in effect at the balance sheet date, and revenues and expenses are

translated at the average exchange rate for the period.

For the Company’s foreign subsidiaries that use a currency other than the U.S.

dollar as their functional currency, the assets and liabilities are translated at exchange rates in effect at the balance sheet date, and revenues and expenses are translated at the average exchange rate for the period.

The effects of these translation adjustments are reported in accumulated other comprehensive income.

Gains and losses arising from transactions denominated in a currency other than the

functional currency of the entity involved are included in operating income.

Gains and losses arising from transactions denominated in a currency other than the functional currency of the entity involved are included in operating income.

Revenue Recognition

Effective September 1, 2018, the Companys revenue recognition accounting policies changed in conjunction with the adoption of ASU 2014-09, Revenue Recognition (Topic 606).

For further discussion, refer to Note 18Revenue to the Consolidated Financial Statements.

The Company provides comprehensive electronics design, production and product management services to companies in various industries and end

The Company derives substantially all of its revenue from production and product management services (collectively referred to as manufacturing services), which encompasses the act of producing tangible products that are built

to customer specifications, which are then provided to the customer.

The Company generally enters into manufacturing service contracts

with its customers that provide the framework under which business will be conducted and customer purchase orders will be received for specific quantities and with predominantly fixed pricing.

As a result, the Company considers its contract with a

customer to be the combination of the manufacturing service contract and the purchase order, or any agreements or other similar documents.

The majority of the Companys manufacturing service contracts relate to manufactured products which have no alternative use and for which

the Company has an enforceable right to payment for the work completed to date.

As a result, revenue is recognized over time when or as the Company transfers control of the promised products or services (known as performance obligations) to its

The Company provides comprehensive electronics design, production and product management services to companies in various industries and end markets.

The Company derives substantially all of its revenue from production and product management services (collectively referred to as “manufacturing services”), which encompasses the act of producing tangible products that are built to customer specifications, which are then provided to the customer.

The Company generally enters into manufacturing service contracts with its customers that provide the framework under which business will be conducted and customer purchase orders will be received for specific quantities and with predominantly fixed pricing.

As a result, the Company considers its contract with a customer to be the combination of the manufacturing service contract and the purchase order, or any agreements or other similar documents.

The majority of the Company's manufacturing service contracts relate to manufactured products which have no alternative use and for which the Company has an enforceable right to payment for the work completed to date.

As a result, revenue is recognized over time when or as the Company transfers control of the promised products or services (known as performance obligations) to its customers.

For certain other contracts with customers that do not meet the over time revenue recognition criteria, transfer of control occurs at a point in time which generally occurs upon delivery and transfer of risk and title to the customer.

Most of the Companys contracts have a single performance obligation as the promise to transfer the individual manufactured product

or service is capable of being distinct and is distinct within the context of the contract.

For the majority of customers, performance obligations are satisfied over time based on the continuous transfer of control as manufacturing services are

performed and are generally completed in less than one year.

The Company also derives revenue to a lesser extent from electronic design services to

certain customers.

Most of the Company's contracts have a single performance obligation as the promise to transfer the individual manufactured product or service is capable of being distinct and is distinct within the context of the contract.

For the majority of customers, performance obligations are satisfied over time based on the continuous transfer of control as manufacturing services are performed and are generally completed in less than one year.

The Company also derives revenue to a lesser extent from electronic design services to certain customers.

Revenue from electronic design services is generally recognized over time as the services are performed.

Companys over time customers, it believes the measure of progress which best depicts the transfer of control is based on costs incurred to date, relative to total estimated cost at completion (i.e., an input method).

This method is a faithful

depiction of the transfer of goods or services because it results in the recognition of revenue on the basis of the Companys to-date efforts in the satisfaction of a performance obligation relative to

the total expected efforts in the satisfaction of the performance obligation.

For the Company’s over time customers, it believes the measure of progress which best depicts the transfer of control is based on costs incurred to date, relative to total estimated cost at completion (i.e., an input method).

This method is a faithful depiction of the transfer of goods or services because it results in the recognition of revenue on the basis of the Company's to-date efforts in the satisfaction of a performance obligation relative to the total expected efforts in the satisfaction of the performance obligation.

The Company believes that the use of an input method best depicts the transfer of control to the customer, which occurs as the Company incurs costs on its contracts.

transaction price of each performance obligation is generally based upon the contractual stand-alone selling price of the product or service.

Certain contracts with customers include variable consideration, such as rebates, discounts, or returns.

The Company recognizes estimates of

this variable consideration that are not expected to result in a significant revenue reversal in the future, primarily based on the most likely level of consideration to be paid to the customer under the specific terms of the underlying programs.

Taxes collected from the Companys customers and remitted to governmental authorities are presented within the Companys

Consolidated Statement of Operations on a net basis and are excluded from the transaction price.

The Company has elected to account for shipping and handling activities related to contracts with customers as costs to fulfill the promise to transfer

The transaction price of each performance obligation is generally based upon the contractual stand-alone selling price of the product or service.

Certain contracts with customers include variable consideration, such as periodic cost of materials adjustments, rebates, discounts, or returns.

The Company recognizes estimates of this variable consideration that are not expected to result in a significant revenue reversal in the future, primarily based on the most likely level of consideration to be paid to the customer under the specific terms of the underlying programs.

Taxes collected from the Company’s customers and remitted to governmental authorities are presented within the Company’s Consolidated Statement of Operations on a net basis and are excluded from the transaction price.

The Company has elected to account for shipping and handling activities related to contracts with customers as costs to fulfill the promise to transfer the goods.

Accordingly, the Company records customer payments of shipping and handling costs as a component of net revenue, and classifies such costs as a component of cost of revenue.

Stock-Based Compensation

Company recognizes stock-based compensation expense, reduced for estimated forfeitures, on a straight-line basis over the requisite service period of the award, which is generally the vesting period for outstanding stock awards.

The stock-based compensation expense for time-based and performance-based restricted stock unit awards (restricted stock units) is

measured at fair value on the date of grant based on the number of shares expected to vest and the quoted market price of the Companys common stock.

For restricted stock units with performance conditions, stock-based compensation expense is

originally based on the number of shares that would vest if the Company achieved 100% of the performance goal, which is the intended outcome at the grant date.

Throughout the requisite service period, management monitors the probability of

achievement of the performance condition.

If it becomes probable, based on the Companys performance, that more or less than the current estimate of the awarded shares will vest, an adjustment to stock-based compensation expense will be

recognized as a change in accounting estimate in the period that such probability changes.

The stock-based compensation expense for

market-based restricted stock units is measured at fair value on the date of grant.

The market conditions are considered in the grant date fair value using a Monte Carlo valuation model, which utilizes multiple input variables to determine the

probability of the Company achieving the specified market conditions.

Stock-based compensation expense related to an award with a market condition will be recognized over the requisite service period regardless of whether the market condition is

satisfied, provided that the requisite service period has been completed.

The Company currently expects to satisfy share-based awards

with registered shares available to be issued.

See Note 11 Stockholders Equity for further discussion of

stock-based compensation expense.

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement

carrying amounts of existing assets and liabilities and their respective tax basis.

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are

expected to be recovered or settled.

The Company recognizes stock-based compensation expense, reduced for estimated forfeitures, on a straight-line basis over the requisite service period of the award, which is generally the vesting period for outstanding stock awards.

The stock-based compensation expense for time-based and performance-based restricted stock unit awards (“restricted stock units”) is measured at fair value on the date of grant based on the number of shares expected to vest and the quoted market price of the Company’s common stock.

For restricted stock units with performance conditions, stock-based compensation expense is originally based on the number of shares that would vest if the Company achieved 100% of the performance goal, which is the intended outcome at the grant date.

Throughout the requisite service period, management monitors the probability of achievement of the performance condition.

If it becomes probable, based on the Company’s performance, that more or less than the current estimate of the awarded shares will vest, an adjustment to stock-based compensation expense will be recognized as a change in accounting estimate in the period that such probability changes.

The stock-based compensation expense for market-based restricted stock units is measured at fair value on the date of grant.

The market conditions are considered in the grant date fair value using a Monte Carlo valuation model, which utilizes multiple input variables to determine the probability of the Company achieving the specified market conditions.

Stock-based compensation expense related to an award with a market condition will be recognized over the requisite service period regardless of whether the market condition is satisfied, provided that the requisite service period has been completed.

The Company currently expects to satisfy share-based awards with registered shares available to be issued.

See Note 12 – “Stockholders’ Equity” for further discussion of stock-based compensation expense.

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis.

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

The effect on deferred tax assets and liabilities of a change in the tax rate is recognized in income in the period that includes the enactment date of the rate change.

The Company records a valuation allowance

to reduce its deferred tax assets to the amount that is more likely than not to be realized.

The Company records a valuation allowance to reduce its deferred tax assets to the amount that is more likely than not to be realized.

The Company considers future taxable income and ongoing feasible tax planning strategies in assessing the need for the valuation allowance.

The Company applies the incremental cash tax savings approach when analyzing the impact Global Intangible Low-Taxed Income (“GILTI”) could have on its U.S.

valuation allowance.

The incremental cash tax savings approach considers the realizable benefit of a net operating loss and deferred tax assets by comparing the incremental cash taxes in the calculation of GILTI with and without the net operating loss and other DTAs.

Earnings Per Share

The Company calculates its basic earnings per share by dividing net income attributable to Jabil Inc.

by the weighted average number of shares

of common stock outstanding during the period.

by the weighted average number of shares of common stock outstanding during the period.

The Company’s diluted earnings per share is calculated in a similar manner, but includes the effect of dilutive securities.

The difference between the weighted average number of basic shares

outstanding and the weighted average number of diluted shares outstanding is primarily due to dilutive unvested restricted stock units and dilutive stock appreciation rights.

The difference between the weighted average number of basic shares outstanding and the weighted average number of diluted shares outstanding is primarily due to dilutive unvested restricted stock units and dilutive stock appreciation rights.

Potential shares of common stock are excluded from the computation of diluted earnings per share when their effect would be antidilutive.

Performance-based restricted stock units are considered dilutive when the related performance criterion have been met assuming the end of the reporting period represents the end of the performance period.

All potential shares of common stock are

antidilutive in periods of net loss.

Potential shares of common stock not included in the computation of earnings per share because their effect would have been antidilutive or because the performance criterion was not met were as follows (in

All potential shares of common stock are antidilutive in periods of net loss.

Fiscal Year Ended August 31,

Stock appreciation rights

Restricted stock units

1 unchanged sentence

Fair value is categorized in one of three levels based on the lowest level of significant input used.

Level 1 quoted market prices

in active markets for identical assets and liabilities;

Level 1 – quoted market prices in active markets for identical assets and liabilities;

Level 2 – inputs other than quoted market prices included in Level 1 that are observable for the asset or liability, either directly or indirectly;

and Level 3

unobservable inputs for the asset or liability.

Trade Accounts Receivable Securitization and Sale Programs

The Company regularly sells designated pools of trade accounts receivable under a foreign asset-backed securitization program, a North American

asset-backed securitization program and uncommitted trade accounts receivable sale programs (collectively referred to herein as the programs).

The Company continues servicing the receivables sold and in exchange receives a servicing fee

under each of the programs.

Servicing fees related to each of the programs recognized during the fiscal years ended August 31, 2019, 2018 and 2017 were not material.

The Company does not record a servicing asset or liability on the Consolidated

Balance Sheets as the Company estimates that the fee it receives to service these receivables approximates the fair market compensation to provide the servicing activities.

Transfers of the receivables under the programs are accounted for as sales and, accordingly, net receivables sold under the programs are

excluded from accounts receivable on the Consolidated Balance Sheets and are reflected as cash provided by operating activities on the Consolidated Statements of Cash Flows.

The adoption of Accounting Standards Update

2016-15 (ASU 2016-15) described in Note 17, New Accounting Guidance, resulted in a reclassification of cash flows from operating activities to

investing activities for all periods presented in the Companys Consolidated Statement of Cash Flows for cash receipts related to collections on the deferred purchase price receivable (i.e.

beneficial interest) on asset-backed securitization

transactions.

In addition, the beneficial interest of $162.2 million, $2.0 billion, and $2.8 billion for the fiscal years ended August 31, 2019, 2018, and 2017, respectively, obtained in exchange for securitized receivables are

reported as non-cash investing activities.

Asset-Backed Securitization Programs

The Company continuously sells designated pools of trade accounts receivable, at a discount, under its foreign asset-backed securitization

program to a special purpose entity, which in turn sells certain of the receivables to an unaffiliated financial institution and a conduit administered by an unaffiliated financial institution on a monthly basis.

Effective October 1, 2018, the

foreign asset-backed securitization program terms were amended and the program was extended to September 30, 2021.

In connection with this amendment, there is no longer a deferred purchase price receivable for the foreign asset-backed

securitization program as the entire purchase price is paid in cash when the receivables are sold.

As of October 1, 2018, approximately $734.2 million of accounts receivable sold

under the foreign asset-backed securitization program was exchanged for the outstanding deferred purchase price receivable of $335.5 million.

The remaining amount due to the financial institution of $398.7 million was subsequently settled

for $25.2 million of cash and $373.5 million of trade accounts receivable sold to the financial institution.

The previously sold trade accounts receivable were recorded at fair market value.

Prior to the amendment, any portion of the

purchase price for the receivables not paid in cash upon the sale occurring was recorded as a deferred purchase price receivable, which was paid from available cash as payments on the receivables were collected.

The amended foreign asset-backed

securitization program contains a guarantee of payment by the special purpose entity, in an amount equal to approximately the net cash proceeds under the program.

No liability has been recorded for obligations under the guarantee as of

August 31, 2019.

The special purpose entity in the foreign asset-backed securitization program is a separate bankruptcy-remote

entity whose assets would be first available to satisfy the creditor claims of the unaffiliated financial institution.

The Company is deemed the primary beneficiary of this special purpose entity as the Company has both the power to direct the

activities of the entity that most significantly impact the entitys economic performance and the obligation to absorb losses or the right to receive the benefits that could potentially be significant to the entity from the transfer of the

trade accounts receivable into the special purpose entity.

Accordingly, the special purpose entity associated with the foreign asset-backed securitization program is included in the Companys Consolidated Financial Statements.

The North American asset-backed securitization program was terminated on October 9, 2018 and as of this date approximately

$500.0 million of accounts receivable sold under the program was exchanged for the outstanding deferred purchase price receivable of $300.0 million and $200.0 million of cash.

The previously sold trade accounts receivable were

recorded at fair market value.

On November 27, 2018, the Company entered into a new North American asset-backed securitization

The Company continuously sells designated pools of trade accounts receivable, at a discount, under its new North American asset-backed securitization program to a special purpose entity, which in turn sells certain of the receivables

to conduits administered by unaffiliated financial institutions on a monthly basis.

The special purpose entity in the North American asset-backed securitization program is a wholly-owned subsidiary of the Company and is included in the

Companys Consolidated Financial Statements.

There is no longer a deferred purchase price receivable for the North American asset-backed securitization program as the entire purchase price is paid in cash when the receivables are sold.

Additionally, certain unsold receivables covering the maximum amount of net cash proceeds available under the program are pledged as collateral to the unaffiliated financial institution as of August 31, 2019.

Following is a summary of the asset-backed securitization programs and key terms:

Maximum Amount of

Net Cash Proceeds (in

millions) (1)

North American

November 22, 2021

September 30, 2021

Maximum amount available at any one time.

In connection with the asset-backed securitization programs, the Company recognized the following (in millions):

Fiscal Year Ended August 31,

Trade accounts receivable sold

Cash proceeds received (1)

Pre-tax losses on sale of receivables (2)

Deferred purchase price receivables as of August 31

The amounts primarily represent proceeds from collections reinvested in revolving-period transfers.

Recorded to other expense within the Consolidated Statements of Operations.

Excludes $650.3 million of trade accounts receivable sold, $488.1 million of cash and

$13.9 million of net cash received prior to the amendment of the foreign asset-backed securitization program and under the previous North American asset-backed securitization program.

The asset-backed securitization programs require compliance with several covenants.

The North American asset-backed securitization program

covenants include compliance with the interest ratio and debt to EBITDA ratio of the five-year unsecured credit facility amended as of November 8, 2017 (the 2017 Credit Facility).

The foreign asset-backed securitization program

covenants include limitations on certain corporate actions such as mergers and consolidations.

As of August 31, 2019 and 2018, the Company was in compliance with all covenants under the asset-backed securitization programs.

and Level 3 – unobservable inputs for the asset or liability.

Trade Accounts Receivable Sale Programs

Following is a summary of the trade accounts receivable sale programs with unaffiliated financial institutions where the Company may elect to

sell receivables and the unaffiliated financial institution may elect to purchase, at a discount, on an ongoing basis:

Amount (in millions) (1)

August 31, 2022

The Company regularly sells designated pools of high credit quality trade accounts receivable under uncommitted trade accounts receivable sale programs to unaffiliated financial institutions without recourse.

As these accounts receivable are sold without recourse, the Company does not retain the associated risks following the transfer of such accounts receivable to the respective financial institutions.

The Company continues servicing the receivables sold and in exchange receives a servicing fee under each of the trade accounts receivable sale programs.

Servicing fees related to each of the trade accounts receivable sale programs recognized during the fiscal years ended August 31, 2020 , 2019 and 2018 were not material.

The Company does not record a servicing asset or liability on the Consolidated Balance Sheets as the Company estimates that the fee it receives to service these receivables approximates the fair market compensation to provide the servicing activities.

Transfers of the receivables under the trade accounts receivable sale programs are accounted for as sales and, accordingly, net receivables sold under the trade accounts receivable sale programs are excluded from accounts receivable on the Consolidated Balance Sheets and are reflected as cash provided by operating activities on the Consolidated Statements of Cash Flows.

The following is a summary of the trade accounts receivable sale programs with unaffiliated financial institutions where the Company may elect to sell receivables and the unaffiliated financial institution may elect to purchase, at a discount, on an ongoing basis:

(in millions) (1)

December 5, 2020

November 30, 2020

June 30, 2020

August 31, 2023

3 unchanged sentences

July 21, 2021

February 28, 2020

December 4, 2020

April 11, 2021

Maximum amount available at any one time.

December 5, 2020

Maximum amount of trade accounts receivable that may be sold under a facility at any one time.

The program will be automatically extended through December 5, 2025 unless either party provides 30 days ’ notice of termination.

The program will automatically extend for one year at each expiration date unless either party provides 10 days ’ notice of termination.

Any party may elect to terminate the agreement upon 30 days ’ prior notice.

The program will automatically extend for one year at each expiration date unless either party provides 10 days

notice of termination.

The program will be automatically extended through January 25, 2023 unless either party provides 30 days ’ notice of termination.

Any party may elect to terminate the agreement upon 15 days ’ prior notice.

The program will be automatically extended through January 25, 2023 unless either party provides 30 days

notice of termination.

The program will be automatically extended through August 10, 2023 unless either party provides 30 days

notice of termination.

The program will be automatically extended through August 21, 2023 unless either party provides 30 days

notice of termination.

The program will be automatically extended through February 28, 2024 unless either party provides 90 days

notice of termination.

The program will be automatically extended each year through April 11, 2025 unless either party provides

30 days notice of termination.

In connection with the trade accounts receivable sale programs, the Company recognized

the following (in millions):

The program will be automatically extended through August 10, 2023 unless either party provides 30 days ’ notice of termination.

The program will be automatically extended through August 21, 2023 unless either party provides 30 days ’ notice of termination.

The program will be automatically extended through December 5, 2024 unless either party provides 30 days ’ notice of termination.

The program will be automatically extended each year through April 11, 2025 unless either party provides 30 days ’ notice of termination.

In connection with the trade accounts receivable sale programs, the Company recognized the following (in millions):

Fiscal Year Ended August 31,

11 unchanged sentences

Inventories, net

Provision for Income Taxes

(loss) before income tax expense is summarized below (in thousands):

Fiscal Year Ended August 31,

Includes the elimination of intercompany foreign dividends paid to the U.S.

Income tax expense (benefit) is summarized below (in thousands):

Fiscal Year Ended August 31,

Domestic federal

Domestic state

Total current

Domestic federal

Domestic state

Total deferred

Total income tax expense

Reconciliation of the U.S.

federal statutory income tax rate to the Companys effective

income tax rate is summarized below:

Fiscal Year Ended August 31,

federal statutory income tax rate

State income taxes, net of federal tax benefit

Impact of foreign tax rates (1)(2)

Permanent impact of non-deductible cost

Income tax credits (1)

Changes in tax rates on deferred tax assets and liabilities (3)

One-time transition tax related to the Tax Act (4)

Indefinite reinvestment assertion

Valuation allowance (5)

Non-deductible equity compensation

Impact of intercompany charges and

dividends (6)

Reclassification of stranded tax effects in AOCI

Global Intangible Low-Taxed Income (7)

Effective income tax rate

The Company has been granted tax incentives for various subsidiaries in Brazil, China, Malaysia, Poland,

Singapore and Vietnam, which expire at various dates through fiscal year 2031 and are subject to certain conditions with which the Company expects to comply.

These tax incentives resulted in a tax benefit of approximately $67.3 million ($0.43

per basic share), $52.1 million ($0.30 per basic share) and $38.6 million ($0.22 per basic share) during the fiscal years ended August 31, 2019, 2018 and 2017, respectively.

For the fiscal years ended August 31, 2019 and 2018, the decrease in the impact of foreign tax rates was

primarily due to a decrease in the U.S.

federal statutory income tax rate due to the Tax Act.

For the fiscal year ended August 31, 2018, the increase in the changes in tax rates on deferred tax assets

and liabilities was primarily due to the Tax Act, excluding the impact of the enacted rate change on the U.S.

valuation allowance.

The indefinite reinvestment assertion impact for the fiscal year ended August 31, 2018 is related to the

Tax Act as further discussed below.

The valuation allowance change for the fiscal years ended August 31, 2019 and 2018 was primarily due to

utilization of domestic federal net operating losses and tax credits against the one-time transition tax and the change in enacted tax rate applied to U.S.

deferred tax assets and liabilities for the fiscal

year ended August 31, 2018.

The increase for the fiscal year ended August 31, 2019 was partially offset by an income tax benefit of $17.5 million for the reversal of a U.S.

valuation allowance due to an intangible asset

reclassification from indefinite-life to finite-life.

For the fiscal year ended August 31, 2018, the decrease in the impact of intercompany charges and

dividends was due to a change in the U.S.

taxation of foreign dividends as a result of the Tax Act.

GILTI applied beginning in the fiscal year ended August 31, 2019 and primarily related to the utilization

of current year U.S.

federal operating losses.

On December 22, 2017, the U.S.

government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act of 2017

The Tax Act reduced the corporate tax rate, limited or eliminated certain tax deductions, introduced Global Intangible Low-Taxed Income (GILTI) as a newly defined category of

foreign subsidiary income which is taxable to U.S.

shareholders each year, and changed the taxation of foreign earnings of U.S.

multinational companies.

The enacted changes included a mandatory income inclusion of the historically untaxed foreign

earnings of a U.S.

companys foreign subsidiaries and effectively taxed such income at reduced tax rates (transition tax).

As a result of the one-time transition tax, the Company has a

substantial amount of previously taxed earnings that can be distributed to the U.S.

without additional U.S.

Additionally, the Tax Act provides for a 100% dividends received deduction for dividends received by U.S.

corporations from 10-percent or more owned foreign corporations.

During the fiscal year ended August 31, 2018, the Company made reasonable estimates related to certain impacts of the Tax Act and, in accordance with Staff

Accounting Bulletin No.

118, Income Tax Accounting Implications of the Tax Cut and Jobs Act (SAB 118), recorded a net provisional income tax expense (benefit).

During the fiscal year ended August 31, 2019, the Company

completed its accounting for the effects of the Tax Act under SAB 118 based on the analysis, interpretations and guidance available at that time.

During the first quarter of fiscal year 2019, the Company elected to record the GILTI effects as a

The following table summarizes the tax expense (benefit) related to the Tax Act recognized

during the SAB 118 measurement period (in millions):

transition tax,

unrecognized tax

Re-measurement

of the Companys

assertion (2)

expense (benefit)

Provisional income tax expense (benefit) recognized in fiscal year 2018

Income tax (benefit) expense adjustment recognized in fiscal year 2019

Income tax expense (benefit) related to the Tax Act

The calculation of the one-time transition tax is based upon post-1986

earnings and profits, applicable foreign tax credits and relevant limitations, utilization of U.S.

federal net operating losses and tax credits and the amount of foreign earnings held in cash and non-cash

The adjustments during the fiscal year ended August 31, 2019 were primarily related to further analysis of the Companys utilization of foreign tax credits and applicable limitations.

The liability recorded for a change in the indefinite reinvestment assertion on certain earnings from the

Companys foreign subsidiaries is primarily associated with foreign withholding taxes that would be incurred upon such future remittances of cash.

Deferred Tax Assets and Liabilities

Significant components of the deferred tax assets and liabilities are summarized below (in thousands):

Fiscal Year Ended August 31,

Deferred tax assets:

Net operating loss carry forward

Compensated absences

Accrued expenses

Property, plant and equipment, principally due to differences in depreciation and

Domestic federal and state tax credits

Foreign jurisdiction tax credits

Equity compensation Domestic

Equity compensation Foreign

Domestic federal interest carry forward

Cash flow hedges

Unrecognized capital loss carry forward

Revenue recognition

Total deferred tax assets before valuation allowances

Less valuation allowances

Net deferred tax assets

Deferred tax liabilities:

Unremitted earnings of foreign subsidiaries

Intangible assets

Total deferred tax liabilities

Net deferred tax assets

Based on the Companys historical operating income, projection of future taxable

income, scheduled reversal of taxable temporary differences, and tax planning strategies, management believes that it is more likely than not that the Company will realize the benefit of its deferred tax assets, net of valuation allowances recorded.

The net increase in the total valuation allowance for the fiscal year ended August 31, 2019 is primarily related to the increase of a net operating loss carry forward due to a release of a non-U.S.

unrecognized tax benefit and the increase of deferred tax assets in sites with existing valuation allowances.

The decrease in domestic federal and state tax credits is primarily related to the utilization of tax credits against the one-time transition tax.

As of August 31, 2019, the Company intends to indefinitely reinvest the

remaining earnings from its foreign subsidiaries for which a deferred tax liability has not already been recorded.

The accumulated earnings are the most significant component of the basis difference which is indefinitely reinvested.

August 31, 2019, the indefinitely reinvested earnings in foreign subsidiaries upon which taxes had not been provided were approximately $1.9 billion.

The estimated amount of the unrecognized deferred tax liability on these reinvested

earnings was approximately $0.2 billion.

Tax Carryforwards

The amount and expiration dates of income tax net operating loss carryforwards and tax credit carryforwards, which are available to reduce

future taxes, if any, as of August 31, 2019 are as follows:

(dollars in thousands)

Last Fiscal Year of Expiration

Income tax net operating loss

carryforwards:

Domestic state

2039 or indefinite

Tax credit carryforwards:

Domestic federal

Domestic state

2027 or indefinite

Net of unrecognized tax benefits.

Calculated based on the deferral method and includes foreign investment tax credits.

Unrecognized Tax Benefits

Reconciliation of the unrecognized tax benefits is summarized below (in thousands):

Fiscal Year Ended August 31,

Beginning balance

Additions for tax positions of prior years

Reductions for tax positions of prior

Additions for tax positions related to current

Cash settlements

Reductions from lapses in statutes of limitations

Reductions from settlements with taxing

authorities (3)

Foreign exchange rate adjustment

Ending balance

Unrecognized tax benefits that would affect the effective tax rate (if recognized)

The reductions for tax positions of prior years for the fiscal year ended August 31, 2019 are primarily

related to a non-U.S.

taxing authority ruling related to certain non-U.S.

net operating loss carry forwards, offset with a valuation allowance and the impacts of the Tax

The additions for the fiscal years ended August 31, 2019 and 2018 are primarily related to the impacts of

the Tax Act and taxation of certain intercompany transactions.

The additions for the fiscal year ended August 31, 2017 are primarily related to certain non-U.S.

net operating loss carry forwards,

previously offset with a valuation allowance, that can no longer be recognized due to an internal restructuring.

The reductions from settlements with taxing authorities for the fiscal year ended August 31, 2019 are

primarily related to the settlement of a U.S.

The Company recognizes interest and penalties related to unrecognized tax benefits in income

The Companys accrued interest and penalties were approximately $18.9 million and $20.4 million as of August 31, 2019 and 2018, respectively.

The Company recognized interest and penalties of approximately $(1.5)

million, $(6.7) million and $5.2 million during the fiscal years ended August 31, 2019, 2018 and 2017, respectively.

reasonably possible that the August 31, 2019 unrecognized tax benefits could decrease during the next 12 months by $5.8 million, primarily related to a state settlement.

The Company is no longer subject to U.S.

federal tax examinations for fiscal years before August 31, 2015.

In major non-U.S.

and state jurisdictions, the Company is no longer subject to income tax examinations for fiscal years before August 31, 2009.

The Internal Revenue Service (IRS) completed its field examination of the Companys tax returns for fiscal years 2009 through

2011 and issued a Revenue Agents Report (RAR) on May 27, 2015, which was updated on June 22, 2016.

The IRS completed its field examination of the Companys tax returns for fiscal years 2012 through 2014 and issued an

RAR on April 19, 2017.

The proposed adjustments in the RAR from both examination periods relate primarily to U.S.

taxation of certain intercompany transactions.

On May 8, 2019, the tax return audits for fiscal years 2009 through 2014 were

effectively settled when the Company agreed to the IRS Office of Appeals Form 870-AD (Offer to Waive Restrictions on Assessment and Collection of Tax Deficiency and to Accept Overassessment) adjustments,

which were substantially lower than the initial RAR proposed adjustments.

The settlement did not have a material effect on the Companys financial position, results of operations, or cash flows and no additional tax liabilities were recorded.

Property, Plant and Equipment

Property, plant and equipment consists of the following (in thousands):

August 31, 2020

August 31, 2019

Land and improvements

10 unchanged sentences

Maintenance and repair expense

As of August 31, 2019 and 2018, the Company had $235.2 million and $253.6 million,

respectively, included in accounts payable for the acquisition of property, plant and equipment, which is considered a non-cash investing activity in the Consolidated Statements of Cash Flows.

As of August 31, 2020 and 2019 , the Company had $ 422.4 million and $ 235.2 million , respectively, included in accounts payable for the acquisition of property, plant and equipment, which is considered a non-cash investing activity in the Consolidated Statements of Cash Flows.

Effective September 1, 2019, the Company adopted Accounting Standards Update No.

2016-02 (“ASU 2016-02”), Leases (Topic 842) using the modified retrospective approach and also elected to apply the package of practical expedients, which among other things, allows entities to maintain the historical lease classification for existing leases.

The Company has lease agreements that contain both lease and non-lease components.

Upon adoption of ASU 2016-02, the Company recorded $ 414.6 million and $ 437.5 million of right-of-use assets and lease liabilities, respectively, related to its existing operating lease portfolio.

The accounting for the Company's finance leases remained substantially unchanged and balances were not significant on the adoption date.

The adoption of this standard did not have a material impact on the Consolidated Statements of Operations or the Consolidated Statements of Cash Flows.

The following table sets forth the amount of lease assets and lease liabilities included on the Company's Consolidated Balance Sheets, as of the period indicated (in thousands):

Financial Statement Line Item

August 31, 2020

Operating lease assets (1)

Operating lease right-of-use assets

Finance lease assets (2)

Property, plant and equipment, net

Total lease assets

Operating lease liabilities

Current operating lease liabilities

Finance lease liabilities

Accrued expenses

Operating lease liabilities

Non-current operating lease liabilities

Finance lease liabilities

Other liabilities

Total lease liabilities

Net of accumulated amortization of $ 96.2 million .

Net of accumulated amortization of $ 12.8 million .

The following table is a summary of expenses related to leases included on the Company's Consolidated Statements of Operations, for the periods indicated (in thousands):

Fiscal Year Ended August 31,

Operating lease cost

Finance lease cost

Amortization of leased assets

Interest on lease liabilities

Net lease cost (1)

Lease costs are primarily recognized in cost of revenue.

The following table is a summary of the weighted-average remaining lease terms and weighted-average discount rates of the Company's leases, as of the period indicated:

August 31, 2020

Weighted-average remaining lease term

Weighted-average discount rate

Operating leases

Finance leases

The following table sets forth other supplemental information related to the Company's lease portfolio (in thousands):

Fiscal Year Ended August 31,

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows for operating leases (1)

Operating cash flows for finance leases (1)

Financing activities for finance leases (2)

Non-cash right-of-use assets obtained in exchange for new lease liabilities:

Operating leases

Finance leases

Included in accounts payable, accrued expenses and other liabilities in Operating Activities of the Company's Consolidated Statements of Cash Flows.

Included in payments toward debt agreements in Financing Activities of the Company's Consolidated Statements of Cash Flows.

The future minimum lease payments under operating and finance leases as of August 31, 2020 were as follows (in thousands):

Fiscal Year Ending August 31,

Operating Leases (1)

Finance Leases

Total minimum lease payments

Present value of lease liabilities

Excludes $ 137.8 million of payments related to leases signed but not yet commenced.

Additionally, certain leases signed but not yet commenced contain residual value guarantees and purchase options not deemed probable.

As disclosed in the Company’s Form 10-K for the fiscal year ended August 31, 2019, the future minimum lease payments of non-cancelable operating leases prior to the adoption of ASU 2016-02 were as follows (in thousands):

Fiscal Year Ending August 31,

Total minimum lease payments

Total operating lease expense prior to the adoption of ASU 2016-02 was approximately $ 125.4 million and $ 130.2 million for fiscal years 2019 and 2018, respectively.

Goodwill and Other Intangible Assets

The Company completed its annual impairment test for goodwill and indefinite-lived intangible assets during the fourth quarter of fiscal year

2019 and determined the fair values of the reporting units and the indefinite-lived intangible assets were in excess of the carrying values and that no impairment existed as of the date of the impairment test.

The following table presents the changes in goodwill allocated to the Companys reportable segments, Electronics Manufacturing Services

(EMS) and Diversified Manufacturing Services (DMS), during the fiscal years ended August 31, 2019 and 2018 (in thousands):

The Company completed its annual impairment test for goodwill and indefinite-lived intangible assets during the fourth quarter of fiscal year 2020 and determined the fair values of the reporting units and the indefinite-lived intangible assets were in excess of the carrying values and that no impairment existed as of the date of the impairment test.

The following table presents the changes in goodwill allocated to the Company’s reportable segments, Electronics Manufacturing Services (“EMS”) and Diversified Manufacturing Services (“DMS”), during the fiscal years ended August 31, 2020 and 2019 (in thousands):

Balance as of August 31, 2018

Acquisitions and adjustments (1)

Change in foreign currency exchange rates

Balance as of August 31, 2019

Acquisitions and adjustments

Change in foreign currency exchange rates

Balance as of August 31, 2020

Includes $8.2 million of goodwill reallocated between DMS and EMS during fiscal year 2018.

The following table is a summary of the Companys gross goodwill balances and accumulated impairments as of the

periods indicated (in thousands):

The following table is a summary of the Company’s gross goodwill balances and accumulated impairments as of the periods indicated (in thousands):

August 31, 2020

August 31, 2019

The following table presents the Companys total purchased intangible assets as of August 31, 2019

and 2018 (in thousands):

The following table presents the Company’s total purchased intangible assets as of August 31, 2020 and 2019 (in thousands):

August 31, 2020

5 unchanged sentences

Total intangible assets

In the fourth quarter of fiscal year 2019, the Company made a strategic decision that the indefinite-lived

trade name of $72.5 million acquired during the acquisition of Nypro would be phased out over the next four years.

In connection with a strategic shift to further diversify our portfolio, focus on innovation and technology within the

Companys healthcare business and as a result of the strategic collaboration with a certain medical device company, management decided to implement a rebranding initiative to Jabil Healthcare.

Management believes the name change better

leverages the Jabil brand and the full range of services available to its customers.

As a result of the decision to rebrand, the Company

determined the indefinite-lived trade name should no longer be classified as an indefinite-lived intangible asset.

Accordingly, prior to reclassifying the trade name to a finite-lived intangible asset, the Company tested it for impairment and

determined the fair value of the asset exceeded the carrying value.

As such, this trade name was assigned a four-year estimated useful life and will be amortized on an accelerated basis.

Intangible asset amortization for fiscal years 2019, 2018 and 2017 was approximately

$31.9 million, $38.5 million and $35.5 million, respectively.

Intangible asset amortization for fiscal years 2020 , 2019 and 2018 was approximately $ 55.5 million , $ 31.9 million and $ 38.5 million , respectively.

The estimated future amortization expense is as follows (in thousands):

Fiscal Year Ended August 31,

Accrued Expenses

Accrued expenses consist of the following (in thousands):

August 31, 2019

August 31, 2018

Contract liabilities

Deferred income

Accrued compensation and employee benefits

Obligation associated with securitization programs

Other accrued expenses

Accrued expenses

Notes Payable and Long-Term Debt

7 unchanged sentences

3.950% Senior Notes (1)(2)

Borrowings under credit

facilities (4)(5)(6)

Nov 8, 2022 and

3.600% Senior Notes (1)(2)(3)

3.000% Senior Notes (1)(2)(4)

Borrowings under credit facilities (5)(6)(7)

Apr 23, 2021, Jan 22, 2023 and Jan 22, 2025

Borrowings under loans (5)

Nov 8, 2022 and

Total notes payable and long-term debt

1 unchanged sentence

Notes payable and long-term debt, less current installments

The notes are carried at the principal amount of each note, less any unamortized discount and unamortized debt

issuance costs.

The Senior Notes are the Companys senior unsecured obligations and rank equally with all other existing

and future senior unsecured debt obligations.

During the fiscal year ended August 31, 2018, the Company issued $500.0 million of publicly

registered 3.950% Senior Notes due 2028 (the 3.950% Senior Notes).

The net proceeds from the offering were used for general corporate purposes, including to redeem $400.0 million of the Companys outstanding 8.250% Senior Notes

due 2018 and pay related costs and a make-whole premium.

On November 8, 2017, the Company entered into an amended and restated senior unsecured five-year credit

agreement to support the continued growth of the business.

In addition, the revolving credit facility supports commercial paper outstanding, if any.

The credit agreement provides for:

(i) a Revolving Credit Facility in the initial amount of

$1.8 billion, which may, subject to the lenders discretion, potentially be increased up to $2.3 billion (the 2017 Revolving Credit Facility) and (ii) a $500.0 million Term Loan Facility (the 2017 Term Loan

Facility), collectively the 2017 Credit Facility. The 2017 Credit Facility expires on November 8, 2022.

The 2017 Revolving Credit Facility is subject to two whole or partial one-year

extensions, at the lenders discretion.

Interest and fees on the 2017 Credit Facility advances are based on the Companys non-credit enhanced long-term senior unsecured debt rating as determined by

Standard & Poors Ratings Service, Moodys Investors Service and Fitch Ratings.

During the fiscal year ended August 31, 2019, the interest rates on the 2017 Revolving

Credit Facility ranged from 3.1% to 5.7% and the 2017 Term Loan Facility ranged from 3.5% to 3.9%.

Interest is charged at a rate equal to (a) for the 2017 Revolving Credit Facility, either 0.000% to 0.575% above the base rate or 0.975% to

1.575% above the Eurocurrency rate and (b) for the 2017 Term Loan Facility, either 0.125% to 0.875% above the base rate or 1.125% to 1.875% above the Eurocurrency rate.

The notes are carried at the principal amount of each note, less any unamortized discount and unamortized debt issuance costs.

The Senior Notes are the Company’s senior unsecured obligations and rank equally with all other existing and future senior unsecured debt obligations.

On January 15, 2020, the Company issued $ 500.0 million of publicly registered 3.600 % Senior Notes due 2030 (the “ 3.600 % Senior Notes”).

The net proceeds from the offering were used for the repayment of term loan indebtedness.

On July 13, 2020, the Company issued $ 600.0 million of publicly registered 3.000 % Senior Notes due 2031 (the “ 3.000 % Senior Notes”).

The net proceeds from the offering were used for general corporate purposes, including to redeem the $ 400.0 million aggregate principal amount of the Company’s 5.625 % Senior Notes due 2020 and pay the applicable “make-whole” premium.

On January 22, 2020, the Company entered into a senior unsecured credit agreement which provides for:

(i) a Revolving Credit Facility in the initial amount of $ 2.7 billion , of which $ 700.0 million expires on January 22, 2023 and $ 2.0 billion expires on January 22, 2025 and (ii) a $ 300.0 million Term Loan Facility which expires on January 22, 2025, (collectively the “Credit Facility”).

Interest and fees on the Credit Facility advances are based on the Company’s non-credit enhanced long-term senior unsecured debt rating as determined by Standard & Poor’s Ratings Service, Moody’s Investors Service and Fitch Ratings.

In connection with the Company’s entry into the Credit Facility, the Company terminated the Company’s amended and restated five-year credit agreement dated November 8, 2017 and the credit agreement dated August 24, 2018.

During the fiscal year ended August 31, 2020 , the interest rates on the Revolving Credit Facility ranged from 1.2 % to 4.3 % and the Term Loan Facility ranged from 1.6 % to 2.9 % .

Interest is charged at a rate equal to (a) for the Revolving Credit Facility, either 0.000 % to 0.450 % above the base rate or 0.975 % to 1.450 % above the Eurocurrency rate and (b) for the Term Loan Facility, either 0.125 % to 0.750 % above the base rate or 1.125 % to 1.750 % above the Eurocurrency rate.

The base rate represents the greatest of:

(i) Citibank, N.A.s

prime rate, (ii) 0.50% above the federal funds rate, and (iii) 1.0% above one-month LIBOR, but not less than zero.

The Eurocurrency rate represents adjusted LIBOR or adjusted CDOR, as applicable, for

the applicable interest period, but not less than zero.

(i) Citibank, N.A.’s prime rate, (ii) 0.50 % above the federal funds rate, and (iii) 1.0 % above one-month LIBOR, but not less than zero.

The Eurocurrency rate represents adjusted LIBOR or adjusted CDOR, as applicable, for the applicable interest period, but not less than zero.

Fees include a facility fee based on the revolving credit commitments of the lenders and a letter of credit fee based on the amount of outstanding letters of credit.

On August 24, 2018, the Company entered into a senior unsecured

two-year credit agreement to support the continued growth of the business.

The credit agreement provides for:

(i) a Revolving Credit Facility in the initial amount of $150.0 million (the 2018

Revolving Credit Facility) and (ii) a $350.0 million Term Loan Facility (the 2018 Term Loan Facility), collectively the 2018 Credit Facility. The 2018 Credit Facility expires on August 24, 2020.

During the fiscal year ended August 31, 2019, the interest rates on the 2018 Revolving Credit Facility ranged from

3.1% to 3.4% and the 2018 Term Loan Facility ranged from 3.3% to 3.8%.

Interest is charged at a rate equal to (a) for the 2018 Revolving Credit Facility, either the base rate or 0.9750% above the Eurocurrency rate and (b) for the 2018 Term

Loan Facility, either 0.125% above the base rate or 1.125% above the Eurocurrency rate.

Additionally, the Company’s foreign subsidiaries had various additional credit facilities that finance their future growth and any corresponding working capital needs.

On April 24, 2020, the Company entered into an unsecured 364 -day revolving credit agreement up to an initial aggregate amount of $ 375.0 million , which was increased to $ 425.0 million on May 29, 2020 (the “ 364 -Day Revolving Credit Agreement”).

The 364 -Day Revolving Credit Agreement expires on April 23, 2021.

Interest and fees on the 364 -Day Revolving Credit Agreement advances are based on the Company’s non-credit enhanced long-term senior unsecured debt rating as determined by Standard & Poor’s Ratings Service, Moody’s Investors Service and Fitch Ratings.

As of August 31, 2020 , no draws were made on the 364 -Day Revolving Credit Agreement.

Interest is charged at a rate equal to either (i) 0.450 % , 0.525 % or 0.800 % above the base rate or (ii) 1.450 % , 1.525 % or 1.800 % above the Eurodollar rate.

The base rate represents the greatest of:

(i) Mizuho Bank, Ltd.s prime rate, (ii) 0.50% above the federal funds rate, and (iii) 1.0% above one-month LIBOR, but not less than zero.

The Eurocurrency rate represents adjusted LIBOR for the applicable interest period, but not less than zero.

Fees include a facility fee based on the revolving credit

commitments of the lenders.

Additionally, the Companys foreign subsidiaries had various additional credit facilities that finance

their future growth and any corresponding working capital needs.

As of August 31, 2019, the Company has $2.6 billion, in

available unused borrowing capacity under its revolving credit facilities.

On August 15, 2019, the Company entered into a commercial paper program with a borrowing capacity of up to

$1.8 billion.

The Company intends to use the net proceeds from the commercial paper to support more efficient financing terms.

The revolving credit facility supports commercial paper outstanding, if any.

As of August 31, 2019, no

commercial paper had been issued.

In the ordinary course of business, the Company has letters of credit and surety

bonds with banks and insurance companies outstanding of $119.1 million as of August 31, 2019.

(i) Mizuho’s base rate, (ii) 0.50 % above the federal funds rate, and (iii) 1.0 % above one-month LIBOR, subject to a floor of 0.75 % .

The Eurodollar rate represents adjusted LIBOR for the applicable interest period, subject to a floor of 0.75 % .

Fees include a facility fee based on the revolving credit commitments of the lenders.

As of August 31, 2020 , the Company has $ 3.7 billion in available unused borrowing capacity under its revolving credit facilities.

The Revolving Credit Facility under the Credit Facility acts as the back-up facility for commercial paper outstanding, if any.

The Company has a borrowing capacity of up to $ 1.8 billion under its commercial paper program.

In the ordinary course of business, the Company has letters of credit and surety bonds with banks and insurance companies outstanding of $ 120.3 million as of August 31, 2020 .

Unused letters of credit were $ 94.0 million as of August 31, 2020 .

Letters of credit and surety bonds are generally available for draw

down in the event the Company does not perform.

Letters of credit and surety bonds are generally available for draw down in the event the Company does not perform.

Debt Maturities

3 unchanged sentences

Borrowings under the Company’s debt agreements are subject to various covenants that limit the Company’s ability to:

incur additional

indebtedness, sell assets, effect mergers and certain transactions, and effect certain transactions with subsidiaries and affiliates.

In addition, the 2017 and 2018 Revolving Credit Facilities and the 4.900% Senior Notes contain debt leverage and

interest coverage covenants.

incur additional indebtedness, sell assets, effect mergers and certain transactions, and effect certain transactions with subsidiaries and affiliates.

In addition, the revolving credit facilities and the 4.900 % Senior Notes contain debt leverage and interest coverage covenants.

The Company is also subject to certain covenants requiring the Company to offer to repurchase the 4.700 % , 4.900 % , 3.950 % , 3.600 % or 3.000 % Senior Notes upon a change of control.

As of August 31, 2019 and 2018, the Company

was in compliance with its debt covenants.

Refer to Note 16 Fair Value Measurements for the estimated fair values of the Companys notes payable and long-term

As of August 31, 2020 and 2019 , the Company was in compliance with its debt covenants.

Refer to Note 17 – “Fair Value Measurements” for the estimated fair values of the Company’s notes payable and long-term debt.

Asset-Backed Securitization Programs

The Company continuously sells designated pools of trade accounts receivable, at a discount, under its foreign asset-backed securitization program and its North American asset-backed securitization program to special purpose entities, which in turn sell certain of the receivables under the foreign program to an unaffiliated financial institution and a conduit administered by an unaffiliated financial institution and certain of the receivables under the North American program to conduits administered by an unaffiliated financial institution on a monthly basis.

The Company continues servicing the receivables sold and in exchange receives a servicing fee under each of the asset-backed securitization programs.

Servicing fees related to each of the asset-backed securitization programs recognized during the fiscal years ended August 31, 2020 , 2019 and 2018 were not material.

Transfers of the receivables under the asset-backed securitization programs are accounted for as sales and, accordingly, net receivables sold under the asset-backed securitization programs are excluded from accounts receivable on the Consolidated Balance Sheets and are reflected as cash provided by operating activities on the Consolidated Statements of Cash Flows.

The special purpose entity in the foreign asset-backed securitization program is a separate bankruptcy-remote entity whose assets would be first available to satisfy the creditor claims of the unaffiliated financial institution.

The Company is deemed the primary beneficiary of this special purpose entity as the Company has both the power to direct the activities of the entity that most significantly impact the entity’s economic performance and the obligation to absorb losses or the right to receive the benefits that could potentially be significant to the entity from the transfer of the trade accounts receivable into the special purpose entity.

Accordingly, the special purpose entity associated with the foreign asset-backed securitization program is included in the Company’s Consolidated Financial Statements.

As of August 31, 2020 , the special purpose entity has liabilities for which creditors do not have recourse to the general credit of the Company (primary beneficiary).

The liabilities cannot exceed the maximum amount of net cash proceeds under the foreign asset-backed securitization program.

The foreign asset-backed securitization program contains a guarantee of payment by the special purpose entity, in an amount approximately equal to the net cash proceeds under the program.

No liability has been recorded for obligations under the guarantee as of August 31, 2020 .

The special purpose entity in the North American asset-backed securitization program is a wholly-owned subsidiary of the Company and is included in the Company’s Consolidated Financial Statements.

Certain unsold receivables covering the maximum amount of net cash proceeds available under the North American asset-backed securitization program are pledged as collateral to the unaffiliated financial institution as of August 31, 2020 .

Following is a summary of the asset-backed securitization programs and key terms:

Maximum Amount of

Net Cash Proceeds (in millions) (1)(2)

North American

November 22, 2021

September 30, 2021

Maximum amount available at any one time.

As of August 31, 2020 , the Company had up to $ 49.0 million in available liquidity under its asset-backed securitization programs.

In connection with the asset-backed securitization programs, the Company recognized the following (in millions):

Fiscal Year Ended August 31,

Trade accounts receivable sold

Cash proceeds received (1)

Pre-tax losses on sale of receivables (2)

Deferred purchase price receivables as of August 31

The amounts primarily represent proceeds from collections reinvested in revolving-period transfers.

Recorded to other expense within the Consolidated Statements of Operations.

Excludes $ 650.3 million of trade accounts receivable sold, $ 488.1 million of cash and $ 13.9 million of net cash received prior to the amendment of the foreign asset-backed securitization program and under the previous North American asset-backed securitization program which occurred during the first quarter of fiscal year 2019.

The asset-backed securitization programs require compliance with several covenants.

The North American asset-backed securitization program covenants include compliance with the interest ratio and debt to EBITDA ratio of the five-year unsecured credit facility entered into on January 22, 2020 (the “Credit Facility”).

The foreign asset-backed securitization program covenants include limitations on certain corporate actions such as mergers and consolidations.

As of August 31, 2020 and 2019 , the Company was in compliance with all covenants under the asset-backed securitization programs.

Accrued Expenses

Accrued expenses consist of the following (in thousands):

August 31, 2020

August 31, 2019

Contract liabilities (1)

Accrued compensation and employee benefits

Obligation associated with securitization programs

Other accrued expenses

Accrued expenses

Revenue recognized during the fiscal years ended August 31, 2020 and 2019 that was included in the contract liability balance as of August 31, 2019 and September 1, 2018 was $ 308.1 million and $ 404.0 million , respectively.

Postretirement and Other Employee Benefits

Postretirement Benefits

Company has a qualified defined benefit pension plan for employees of Jabil Circuit UK Limited (the UK plan).

The UK plan, which is closed to new participants, provides benefits based on average employee earnings over a three-year

service period preceding retirement and length of employee service.

The Companys policy is to contribute amounts sufficient to meet minimum funding requirements as set forth in UK employee benefit and tax laws plus such additional amounts as

are deemed appropriate by the Company.

Additionally, as a result of acquiring various other operations in Europe, Asia and Mexico the

Company assumed both qualified and unfunded nonqualified retirement benefits covering eligible employees who meet age and service requirements (the other plans).

The UK plan and other plans are collectively referred to herein as the plans.

The Company has a qualified defined benefit pension plan for employees of Jabil Circuit UK Limited (the “UK plan”).

The UK plan, which is closed to new participants, provides benefits based on average employee earnings over a three -year service period preceding retirement and length of employee service.

The Company’s policy is to contribute amounts sufficient to meet minimum funding requirements as set forth in UK employee benefit and tax laws plus such additional amounts as are deemed appropriate by the Company.

As a result of the third closing of the JJMD acquisition, the Company assumed a pension obligation for employees in Switzerland (the “Switzerland plan”).

The Switzerland plan, which is a qualified defined benefit pension plan, provides benefits based on average employee earnings over an approximately 8 years service period preceding retirement and length of employee service.

The Company’s policy is to contribute amounts sufficient to meet minimum funding requirements as set forth in Switzerland employee benefit and tax laws plus such additional amounts as are deemed appropriate by the Company.

Additionally, as a result of acquiring various other operations in Europe, Asia and Mexico the Company assumed both qualified and unfunded nonqualified retirement benefits covering eligible employees who meet age and service requirements (the “other plans”).

The UK plan, Switzerland plan and other plans are collectively referred to herein as the “plans.”

Benefit Obligation and Plan Assets

The benefit obligations and plan assets, changes to the benefit obligation and plan assets and the funded status of the plans as of and for the

fiscal years ended August 31 are as follows (in thousands):

The benefit obligations and plan assets, changes to the benefit obligation and plan assets and the funded status of the plans as of and for the fiscal years ended August 31 are as follows (in thousands):

Fiscal Year Ended August 31,

Change in projected benefit obligation

1 unchanged sentence

Interest cost

Actuarial loss (gain)

Curtailments gain

Actuarial (gain) loss

Settlements paid from plan assets (1)

Total benefits paid

5 unchanged sentences

Actual return on plan assets

Settlements paid from plan assets (1)

Employer contributions

7 unchanged sentences

Accrued benefit liability, noncurrent

Accumulated other comprehensive

Actuarial loss, before tax

Accumulated other comprehensive loss (2)

Actuarial (gain) loss, before tax

Prior service cost, before tax

The Company anticipates amortizing $0.8 million and $0.0 million, before tax, of net actuarial loss

and prior service costs balances, respectively, to net periodic cost in fiscal year 2020.

The settlements recognized during fiscal year 2020 relate primarily to the Switzerland plan.

The Company anticipates amortizing $ 5.1 million and $ 0.0 million , before tax, of net actuarial gain and prior service costs balances, respectively, to net periodic cost in fiscal year 2021 .

Net Periodic Benefit Cost

The following table provides information about the net periodic benefit cost for the plans for fiscal years 2020 , 2019 and 2018 (in thousands):

Fiscal Year Ended August 31,

Interest cost

Expected long-term return on plan assets

Recognized actuarial loss

Recognized actuarial (gain) loss

Amortization of prior service credit

1 unchanged sentence

Net periodic benefit cost

On September 1, 2018, the Company adopted a new accounting standard, which changes the presentation of

net periodic benefit cost in the Consolidated Statements of Operation.

The Company adopted the standard on a retrospective basis which results in reclassifications for the service cost component of net periodic benefit cost from selling, general and

administrative expense to cost of revenue and for the other components from selling, general and administrative expense to other expense.

Prior periods have not been reclassified due to immateriality.

Weighted-average

actuarial assumptions used to determine net periodic benefit cost and projected benefit obligation for the plans for the fiscal years 2019, 2018 and 2017 were as follows:

Weighted-average actuarial assumptions used to determine net periodic benefit cost and projected benefit obligation for the plans for the fiscal years 2020 , 2019 and 2018 were as follows:

Fiscal Year Ended August 31,

Net periodic benefit cost:

Expected long-term return on plan

Expected long-term return on plan assets (1)

Rate of compensation increase

4 unchanged sentences

Discount rate (2)

The expected return on plan assets assumption used in calculating net periodic benefit cost is based on

historical return experience and estimates of future long-term performance with consideration to the expected investment mix of the plan.

The discount rate is used to state expected cash flows relating to future benefits at a present value on the

measurement date.

The expected return on plan assets assumption used in calculating net periodic benefit cost is based on historical return experience and estimates of future long-term performance with consideration to the expected investment mix of the plan.

The discount rate is used to state expected cash flows relating to future benefits at a present value on the measurement date.

This rate represents the market rate for high-quality fixed income investments whose timing would match the cash outflow of retirement benefits.

Other assumptions include demographic factors such as retirement, mortality and

The Company has adopted an investment policy for a majority of plan assets, which was set by plan trustees who have the responsibility for

making investment decisions related to the plan assets.

Other assumptions include demographic factors such as retirement, mortality and turnover.

The Company has adopted an investment policy for a majority of plan assets, which was set by plan trustees who have the responsibility for making investment decisions related to the plan assets.

The plan trustees oversee the investment allocation, including selecting professional investment managers and setting strategic targets.

The investment objectives for the assets are (1) to

acquire suitable assets that hold the appropriate liquidity in order to generate income and capital growth that, along with new contributions, will meet the cost of current and future benefits under the plan, (2) to limit the risk of the plan

assets from failing to meet the plan liabilities over the long-term and (3) to minimize the long-term costs under the plan by maximizing the return on the plan assets.

Investment policies and strategies governing the assets of the plans are designed to achieve

investment objectives with prudent risk parameters.

The investment objectives for the assets are (1) to acquire suitable assets that hold the appropriate liquidity in order to generate income and capital growth that, along with new contributions, will meet the cost of current and future benefits under the plan, (2) to limit the risk of the plan assets from failing to meet the plan liabilities over the long-term and (3) to minimize the long-term costs under the plan by maximizing the return on the plan assets.

Investment policies and strategies governing the assets of the plans are designed to achieve investment objectives with prudent risk parameters.

Risk management practices include the use of external investment managers;

the maintenance of a portfolio diversified by asset class, investment approach and security holdings;

and the maintenance

of sufficient liquidity to meet benefit obligations as they come due.

and the maintenance of sufficient liquidity to meet benefit obligations as they come due.

Within the equity securities class, the investment policy provides for investments in a broad range of publicly traded securities including both domestic and international stocks.

Within the debt securities class, the investment policy provides for investments in corporate bonds as well as fixed and variable interest debt instruments.

The Company currently expects to achieve a target mix of 35% equity and 65% debt securities

in fiscal year 2020.

The Company currently expects to achieve a target mix of 35 % equity and 65 % debt securities in fiscal year 2021 .

The fair values of the plan assets held by the Company by asset category are as follows (in thousands):

12 unchanged sentences

Carrying value approximates fair value.

Investments in equity securities by companies incorporated, listed or domiciled in developed and/or emerging

market countries.

Investments in global equity securities, corporate bonds, government securities and government bonds are valued

using the quoted prices of securities with similar characteristics.

Consist of an insurance contract that guarantees the payment of the funded pension entitlements, as well as

provides a profit share to the Company.

Investments in equity securities by companies incorporated, listed or domiciled in developed and/or emerging market countries.

Investments in global equity securities, corporate bonds, government securities and government bonds are valued using the quoted prices of securities with similar characteristics.

Consist of an insurance contract that guarantees the payment of the funded pension entitlements, as well as provides a profit share to the Company.

The profit share in this contract is not based on actual investments, but, instead on a notional investment portfolio that is expected to return a pre-defined rate.

Insurance contract assets are recorded at fair value and is determined based on the cash surrender value of the insured benefits which is the present value of the guaranteed funded benefits.

Insurance contracts are valued using unobservable inputs

(Level 3 inputs), primarily by discounting expected future cash flows relating to benefits paid from a notional investment portfolio in order to determine the cash surrender value of the policy.

The unobservable inputs consist of estimated future

benefits to be paid throughout the duration of the policy and estimated discount rates, which both have an immaterial impact on the fair value estimate of the contract.

Insurance contracts are valued using unobservable inputs (Level 3 inputs), primarily by discounting expected future cash flows relating to benefits paid from a notional investment portfolio in order to determine the cash surrender value of the policy.

The unobservable inputs consist of estimated future benefits to be paid throughout the duration of the policy and estimated discount rates, which both have an immaterial impact on the fair value estimate of the contract.

Accumulated Benefit Obligation

The following table provides information for the plans with an accumulated benefit obligation for fiscal years 2020 and 2019 (in thousands):

August 31, 2020

August 31, 2019

Projected benefit obligation

6 unchanged sentences

Profit Sharing, 401(k) Plan and Defined Contribution Plans

The Company provides retirement benefits to its domestic employees who have completed a 30-day period

of service through a 401(k) plan that provides a matching contribution by the Company.

The Company provides retirement benefits to its domestic employees who have completed a 30-day period of service through a 401(k) plan that provides a matching contribution by the Company.

The Company also has defined contribution benefit plans for certain of its international employees.

The Company contributed approximately $49.0 million,

$40.5 million and $33.6 million for defined contribution plans for the fiscal years ended August 31, 2019, 2018 and 2017, respectively.

Commitments and Contingencies

Lease Agreements

The Company leases certain facilities under non-cancelable operating leases.

agreements may contain lease escalation clauses and purchase or renewal options.

The Company recognizes scheduled lease escalation clauses over the course of the applicable lease term on a straight-line basis in the Consolidated Statements of

The future minimum lease payments under non-cancelable operating leases as of August 31, 2019 were as follows (in thousands):

Fiscal Year Ending August 31,

Total minimum lease payments

Total operating lease expense was approximately $125.4 million, $130.2 million and

$117.2 million for fiscal years 2019, 2018 and 2017, respectively.

Legal Proceedings

The Company is party to certain lawsuits in the ordinary course of business.

The Company does not believe that these proceedings, individually

or in the aggregate, will have a material adverse effect on the Companys financial position, results of operations or cash flows.

The Company contributed approximately $ 56.1 million , $ 49.0 million and $ 40.5 million for defined contribution plans for the fiscal years ended August 31, 2020 , 2019 and 2018 , respectively.

Derivative Financial Instruments and Hedging Activities

The Company is directly and indirectly affected by changes in certain market conditions.

These changes in market conditions may adversely impact the Company’s financial performance and are referred to as market risks.

The Company, where deemed appropriate, uses derivatives as risk management tools to mitigate the potential impact of certain market risks.

The primary market risks managed by the Company through the use of derivative instruments are foreign currency risk and interest rate risk.

Foreign Currency Risk Management

Forward contracts are put in place to manage the foreign currency risk associated with the anticipated foreign currency denominated revenues and expenses.

A hedging relationship existed with an aggregate notional amount outstanding of $ 355.2 million and $ 334.1 million as of August 31, 2020 and 2019 , respectively.

The related forward foreign exchange contracts have been designated as hedging instruments and are accounted for as cash flow hedges.

The forward foreign exchange contract transactions will effectively lock in the value of anticipated foreign currency denominated revenues and expenses against foreign currency fluctuations.

The anticipated foreign currency denominated revenues and expenses being hedged are expected to occur between September 1, 2020 and August 31, 2021 .

In addition to derivatives that are designated as hedging instruments and qualify for hedge accounting, the Company also enters into forward contracts to economically hedge transactional exposure associated with commitments arising from trade accounts receivable, trade accounts payable, fixed purchase obligations and intercompany transactions denominated in a currency other than the functional currency of the respective operating entity.

The aggregate notional amount of these outstanding contracts as of August 31, 2020 and 2019 , was $ 2.9 billion and $ 2.5 billion , respectively.

Refer to Note 17 – “Fair Value Measurements” for the fair values and classification of the Company’s derivative instruments.

The gains and losses recognized in earnings due to hedge ineffectiveness and the amount excluded from effectiveness testing were not material for all periods presented and are included as components of net revenue, cost of revenue and selling, general and administrative expense, which are the same line items in which the hedged items are recorded.

The following table presents the net gains (losses) from forward contracts recorded in the Consolidated Statements of Operations for the periods indicated (in thousands):

Derivatives Not Designated as Hedging Instruments Under ASC 815

Location of Gain (Loss) on Derivatives Recognized in Net Income

Amount of Gain (Loss) Recognized in Net Income on Derivatives

Fiscal Year Ended August 31,

Forward foreign exchange contracts (1)

Cost of revenue

For the fiscal year ended August 31, 2020 , the Company recognized $ 47.4 million of foreign currency losses in cost of revenue, which are offset by the gains from the forward foreign exchange contracts.

For the fiscal years ended August 31, 2019 and 2018 , the Company recognized $ 14.9 million and $ 36.7 million , respectively, of foreign currency gains in cost of revenue, which are offset by the losses from the forward foreign exchange contracts.

Interest Rate Risk Management

The Company periodically enters into interest rate swaps to manage interest rate risk associated with the Company’s borrowings.

Cash Flow Hedges

Contemporaneously with the issuance of our 3.000 % Notes in July 2020, the Company amended interest rate swap agreements with a notional value of $ 200.0 million , with mandatory termination dates from August 15, 2020 to February 15, 2022 and de-designated the interest rate swaps as cash flow hedges (the “2020 Extended Interest Rate Swaps”).

No ineffectiveness was recognized in earnings upon the termination of the cash flow hedges.

In addition, the Company entered into interest rate swaps to offset future exposures of fluctuations in the fair value of the 2020 Extended Interest Rate Swaps (the “Offsetting Interest Rate Swaps”).

The change in the fair value of the 2020 Extended Interest Rate Swaps and the Offsetting Interest Rate Swaps will be recorded in the Consolidated Statements of Income through the maturity date as an adjustment to interest expense.

Stockholders’ Equity

The Company recognized stock-based compensation expense within selling, general and administrative expense

as follows (in thousands):

The Company recognized stock-based compensation expense within selling, general and administrative expense as follows (in thousands):

Fiscal Year Ended August 31,

1 unchanged sentence

Employee stock purchase plan

For the fiscal year ended August 31, 2018, represents a one-time

cash-settled stock award that vested on November 30, 2017.

As a result of a modification, 0.8 million awards vested during fiscal year 2018, which resulted in approximately $ 24.9 million of stock-based compensation expense recognized during the fiscal year ended August 31, 2018.

For the fiscal year ended August 31, 2018, represents a one-time cash-settled stock award that vested on November 30, 2017.

Equity Compensation Plan

The 2011 Stock Award and Incentive Plan (the 2011 Plan) provides for the grant of restricted stock awards, restricted stock unit

awards and other stock-based awards.

The 2011 Stock Award and Incentive Plan (the “2011 Plan”) provides for the grant of restricted stock awards, restricted stock unit awards and other stock-based awards.

The maximum aggregate number of shares that may be subject to awards under the 2011 Plan is 23,300,000 .

2 unchanged sentences

Balance as of August 31, 2019

Restricted stock units granted, net of

forfeitures (1)

SARS canceled

Restricted stock units granted, net of forfeitures (1)

Balance as of August 31, 2020

Represents the maximum number of shares that can be issued based on the achievement of certain performance

Represents the maximum number of shares that can be issued based on the achievement of certain performance criteria.

Stock Appreciation Rights (“SARS”)

3 unchanged sentences

Outstanding as of August 31, 2019

SARS canceled

SARS exercised

2 unchanged sentences

Certain key employees have been granted time-based, performance-based and market-based restricted stock units.

The time-based restricted stock

units granted generally vest on a graded vesting schedule over three years.

The performance-based restricted stock units generally vest on a cliff vesting schedule over three years and up to a maximum of 150%, depending on the specified performance

condition and the level of achievement obtained.

The time-based restricted stock units granted generally vest on a graded vesting schedule over three years .

The performance-based restricted stock units generally vest on a cliff vesting schedule over three years and up to a maximum of 150 % , depending on the specified performance condition and the level of achievement obtained.

The performance-based restricted stock units have a vesting condition that is based upon the Company’s cumulative adjusted core earnings per share during the performance period.

The market-based

restricted stock units generally vest on a cliff vesting schedule over three years and up to a maximum of 200%, depending on the specified performance condition and the level of achievement obtained.

The market-based restricted stock units have a

vesting condition that is tied to the Companys total shareholder return based on the Companys stock performance in relation to the companies in the Standard and Poors (S&P) Super Composite Technology Hardware and Equipment

Index excluding the Company.

On October 6, 2017, the Companys Compensation Committee approved the modification of vesting

criteria for certain performance-based restricted stock units granted in fiscal year 2015.

As a result of the modification, 0.8 million awards vested during the first quarter of fiscal year 2018, which resulted in approximately

$24.9 million of stock-based compensation expense recognized.

The following table summarizes restricted stock units activity from August 31, 2018

through August 31, 2019:

The market-based restricted stock units generally vest on a cliff vesting schedule over three years and up to a maximum of 200 % , depending on the specified performance condition and the level of achievement obtained.

The market-based restricted stock units have a vesting condition that is tied to the Company’s total shareholder return based on the Company’s stock performance in relation to the companies in the Standard and Poor’s (S&P) Super Composite Technology Hardware and Equipment Index excluding the Company.

The following table summarizes restricted stock units activity from August 31, 2019 through August 31, 2020 :

Outstanding as of August 31, 2019

4 unchanged sentences

Outstanding as of August 31, 2020

For those shares granted that are based on the achievement of certain performance criteria, the amount

represents the maximum number of shares that can vest.

During the fiscal year ended August 31, 2019, the Company awarded approximately 1.6 million time-based restricted stock units, 0.4 million performance-based restricted stock units

and 0.4 million market-based restricted stock units based on target performance criteria.

The following table

represents the restricted stock units and SARS stock-based compensation information for the periods indicated (in thousands):

For those shares granted that are based on the achievement of certain performance criteria, the amount represents the maximum number of shares that can vest.

During the fiscal year ended August 31, 2020 , the Company awarded approximately 1.2 million time-based restricted stock units, 0.3 million performance-based restricted stock units and 0.3 million market-based restricted stock units based on target performance criteria.

The following table represents the restricted stock units and SARS stock-based compensation information for the periods indicated (in thousands):

Fiscal Year Ended August 31,

1 unchanged sentence

Fair value of restricted stock units vested

Tax benefit for stock compensation

Tax benefit for stock compensation expense (1)

Unrecognized stock-based compensation expense — restricted stock units

2 unchanged sentences

Employee Stock Purchase Plan

maximum aggregate number of shares that are available for issuance under the 2011 Employee Stock Purchase Plan (the ESPP) is 12,000,000.

The maximum aggregate number of shares that are available for issuance under the 2011 Employee Stock Purchase Plan (the “ESPP”) is 12,000,000 .

Employees are eligible to participate in the ESPP after 90 days of employment with the Company.

The ESPP permits eligible employees to

purchase common stock through payroll deductions, which may not exceed 10% of an employees compensation, as defined in the ESPP, at a price equal to 85% of the fair value of the common stock at the beginning or end of the offering period,

whichever is lower.

The ESPP permits eligible employees to purchase common stock through payroll deductions, which may not exceed 10 % of an employee’s compensation, as defined in the ESPP, at a price equal to 85 % of the fair value of the common stock at the beginning or end of the offering period, whichever is lower.

The ESPP is intended to qualify under Section 423 of the Internal Revenue Code.

As of August 31, 2020 , 2,290,167 shares remained available for issue under the 2011 ESPP.

The fair value of shares issued under the ESPP was estimated on the commencement date of each offering period using the Black-Scholes option

pricing model.

The fair value of shares issued under the ESPP was estimated on the commencement date of each offering period using the Black-Scholes option pricing model.

The following weighted-average assumptions were used in the model for each respective period:

4 unchanged sentences

Expected life

The expected volatility was estimated using the historical volatility derived from the Companys common

The following table sets forth certain information relating to the Companys cash dividends declared to common stockholders during fiscal

years 2019 and 2018:

The expected volatility was estimated using the historical volatility derived from the Company’s common stock.

The following table sets forth certain information relating to the Company’s cash dividends declared to common stockholders during fiscal years 2020 and 2019 :

Declaration Date

26 unchanged sentences

September 3, 2019

Share Repurchases

In September 2019, the Companys Board of Directors (the Board) authorized the repurchase of up to $600.0 million of the

Companys common stock as part of a two-year capital allocation framework (the 2020 Share Repurchase Program).

From September 24, 2019 through October 14, 2019, the Company

repurchased 874,475 shares, utilizing a total of $30.8 million of the $600.0 million authorized by the Board.

Common Stock Outstanding

9 unchanged sentences

Ending balances

During fiscal years 2018, 2017 and 2016, the Companys Board of Directors authorized the repurchase of

$350.0 million, $450.0 million and $400.0 million, respectively, of the Companys common stock under share repurchase programs, which were repurchased during fiscal years 2019, 2018 and 2017, respectively.

During fiscal years 2018 and 2017, the Company’s Board of Directors (“the Board”) authorized the repurchase of $ 350.0 million and $ 450.0 million , respectively, of the Company’s common stock under share repurchase programs, which were repurchased during fiscal years 2019 and 2018, respectively.

In September 2019, the Board authorized the repurchase of up to $ 600.0 million of the Company’s common stock as part of a two -year capital allocation framework (“the 2020 Share Repurchase Program”).

As of August 31, 2020 , 6.0 million shares had been repurchased for $ 213.9 million and $ 386.1 million remains available under the 2020 Share Repurchase Program.

Concentration of Risk and Segment Data

Concentration of Risk

instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and trade receivables.

The Company maintains cash and cash equivalents with various domestic and foreign financial

institutions.

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and trade receivables.

The Company maintains cash and cash equivalents with various domestic and foreign financial institutions.

Deposits held with the financial institutions may exceed the amount of insurance provided on such deposits, but may generally be redeemed upon demand.

The Company performs periodic evaluations of the relative credit standing of the

financial institutions and attempts to limit exposure with any one institution.

The Company performs periodic evaluations of the relative credit standing of the financial institutions and attempts to limit exposure with any one institution.

For trade receivables, the Company performs ongoing credit evaluations of its customers and generally does not require collateral.

The Company maintains an allowance for

potential credit losses on trade receivables.

The Company maintains an allowance for potential credit losses on trade receivables.

Sales of the Company’s products are concentrated among specific customers.

year 2019, the Companys five largest customers accounted for approximately 42% of its net revenue and 85 customers accounted for approximately 90% of its net revenue.

As the Company is a provider of manufacturing services and solutions and

products are built based on customer specifications, it is impracticable to provide revenues from external customers for each product and service.

Sales to the following customer that accounted for 10% or more of the Companys net revenues,

expressed as a percentage of consolidated net revenue, and the percentage of accounts receivable for the customer, were as follows:

For fiscal year 2020 , the Company’s five largest customers accounted for approximately 47 % of its net revenue and 73 customers accounted for approximately 90 % of its net revenue.

As the Company is a provider of manufacturing services and solutions and products are built based on customer specifications, it is impracticable to provide revenues from external customers for each product and service.

Sales to the following customer that accounted for 10% or more of the Company’s net revenues, expressed as a percentage of consolidated net revenue, and the percentage of accounts receivable for the customer, were as follows:

Percentage of Net Revenue

2 unchanged sentences

as of August 31,

Amazon.com (2)

* Amount was less than 10% of total.

Sales to this customer were reported in the DMS operating segment.

Sales to this customer were reported primarily in the EMS operating segment.

The Company procures components from a broad group of suppliers.

Some of the products manufactured by the Company require one or more

components that are available from only a single source.

Operating segments are defined as components of an enterprise that engage in business activities from which they may earn revenues and incur

Some of the products manufactured by the Company require one or more components that are available from only a single source.

Operating segments are defined as components of an enterprise that engage in business activities from which they may earn revenues and incur expenses;

for which separate financial information is available;

and whose operating results are regularly reviewed by the chief operating decision maker to assess the performance of the individual segment and make decisions about resources to be

allocated to the segment.

The Company derives its revenue from providing comprehensive electronics design, production and product

management services.

The chief operating decision maker evaluates performance and allocates resources on a segment basis.

The Companys operating segments consist of two segments EMS and DMS, which are also the Companys reportable

and whose operating results are regularly reviewed by the chief operating decision maker (“CODM”) to assess the performance of the individual segment and make decisions about resources to be allocated to the segment.

The Company derives its revenue from providing comprehensive electronics design, production and product management services.

The CODM evaluates performance and allocates resources on a segment basis.

The Company’s operating segments consist of two segments – EMS and DMS, which are also the Company’s reportable segments.

The segments are organized based on the economic profiles of the services performed, including manufacturing capabilities, market strategy, margins, return on capital and risk profiles.

The EMS segment is focused around leveraging IT, supply chain design and engineering, technologies largely centered on core electronics,

utilizing the Companys large scale manufacturing infrastructure and the ability to serve a broad range of end markets.

The EMS segment is focused around leveraging IT, supply chain design and engineering, technologies largely centered on core electronics, utilizing the Company’s large scale manufacturing infrastructure and the ability to serve a broad range of end markets.

The EMS segment is a high volume business that produces products at a quicker rate (i.e.

cycle time) and in larger

quantities and includes customers primarily in the automotive and transportation, capital equipment, cloud, computing and storage, defense and aerospace, industrial and energy, networking and telecommunications, print and retail, and smart home and

appliances industries.

The DMS segment is focused on providing engineering solutions, with an emphasis on material sciences, technologies

and healthcare.

cycle time) and in larger quantities and includes customers primarily in the automotive and transportation, capital equipment, cloud, computing and storage, defense and aerospace, industrial and energy, networking and telecommunications, print and retail, and smart home and appliances industries.

The DMS segment is focused on providing engineering solutions, with an emphasis on material sciences, technologies and healthcare.

The DMS segment includes customers primarily in the edge devices and accessories, healthcare, mobility and packaging industries.

Net revenue for the operating segments is attributed to the segment in which the service is performed.

An operating segments performance

is evaluated based on its pre-tax operating contribution, or segment income.

Segment income is defined as net revenue less cost of revenue, segment selling, general and administrative expenses, segment

research and development expenses and an allocation of corporate manufacturing expenses and selling, general and administrative expenses.

Segment income does not include amortization of intangibles, stock-based compensation expense and related

charges, restructuring and related charges, distressed customer charges, acquisition and integration charges, loss on disposal of subsidiaries, settlement of receivables and related charges, impairment of notes receivable and related charges,

restructuring of securities loss, goodwill impairment charges, business interruption and impairment charges, net, income (loss) from discontinued operations, gain (loss) on sale of discontinued operations, other expense, interest income, interest

expense, income tax expense or adjustment for net income (loss) attributable to noncontrolling interests.

Total segment assets are

defined as accounts receivable, inventories, net, customer-related property, plant and equipment, intangible assets net of accumulated amortization and goodwill.

All other non-segment assets are reviewed on a

global basis by management.

An operating segment’s performance is evaluated based on its pre-tax operating contribution, or segment income.

Segment income is defined as net revenue less cost of revenue, segment selling, general and administrative expenses, segment research and development expenses and an allocation of corporate manufacturing expenses and selling, general and administrative expenses.

Segment income does not include amortization of intangibles, stock-based compensation expense and related charges, restructuring, severance and related charges, distressed customer charges, acquisition and integration charges, loss on disposal of subsidiaries, settlement of receivables and related charges, impairment of notes receivable and related charges, loss on securities, goodwill impairment charges, business interruption and impairment charges, net, income (loss) from discontinued operations, gain (loss) on sale of discontinued operations, other expense (excluding certain components of net periodic benefit cost), interest income, interest expense, income tax expense or adjustment for net income (loss) attributable to noncontrolling interests.

Total segment assets are defined as accounts receivable, inventories, net, customer-related property, plant and equipment, intangible assets net of accumulated amortization and goodwill.

All other non-segment assets are reviewed on a global basis by management.

Transactions between operating segments are generally recorded at amounts that approximate those at which we would transact with third parties.

As of September 1, 2020, certain customers have been realigned within the Company’s operating segments.

As there have been no changes to how the Company’s CODM assesses operating performance and allocates resources, the Company’s operating segments which are the reporting segments continue to consist of the DMS and EMS segments.

Beginning in fiscal year 2021, customers within the automotive and transportation and smart home and appliances industries will be presented within the DMS segment.

Prior period disclosures will be restated to reflect the realignment.

The following table presents the Company’s revenues disaggregated by segment (in thousands):

Fiscal Year Ended August 31,

Timing of transfer (1)

Point in time

Effective September 1, 2018, the Company adopted ASU 2014-09, Revenue Recognition (Topic 606) using the modified retrospective method by applying the guidance to all open contracts upon adoption and recording a cumulative effect adjustment as of September 1, 2018, net of tax, of $ 42.6 million .

No adjustments were made to prior periods.

The following tables set forth operating segment information (in thousands):

6 unchanged sentences

Stock-based compensation expense and related charges

Restructuring and related charges

Restructuring, severance and related charges

Distressed customer charges

1 unchanged sentence

Acquisition and integration charges

Loss on disposal of subsidiaries

Restructuring of securities loss

Other expense

Loss on securities

Other expense (net of periodic benefit cost)

Interest income

1 unchanged sentence

Income before income tax

Charges, net of insurance proceeds of $2.9 million and $24.9 million, for the fiscal years ended

August 31, 2019 and 2018, respectively, relate to business interruption and asset impairment costs associated with damage from Hurricane Maria, which impacted operations in Cayey, Puerto Rico, which is classified as a component of cost of

revenue and selling, general and administrative expenses in the Consolidated Statements of Operations.

Charges for the fiscal year ended August 31, 2020 , relate to a flood that impacted the Company’s facility in Huangpu, China.

Charges, net of insurance proceeds of $ 2.9 million and $ 24.9 million , for the fiscal years ended August 31, 2019 and 2018 , respectively, relate to business interruption and asset impairment costs associated with damage from Hurricane Maria, which impacted operations in Cayey, Puerto Rico.

These charges are classified as a component of cost of revenue and selling, general and administrative expenses in the Consolidated Statements of Operations.

August 31, 2020

2 unchanged sentences

The Company operates in 31 countries worldwide.

Sales to unaffiliated customers are based on

the Company location that maintains the customer relationship and transacts the external sale.

The following tables set forth external net revenue, net of intercompany eliminations, and long-lived asset information where individual countries

represent a material portion of the total (in thousands):

Sales to unaffiliated customers are based on the Company location that maintains the customer relationship and transacts the external sale.

The following tables set forth external net revenue, net of intercompany eliminations, and long-lived asset information where individual countries represent a material portion of the total (in thousands):

Fiscal Year Ended August 31,

1 unchanged sentence

Foreign source revenue

Long-lived assets:

Long-lived assets related to foreign operations

Derivative Financial Instruments and Hedging Activities

The Company is directly and indirectly affected by changes in certain market conditions.

These changes in market conditions may adversely

impact the Companys financial performance and are referred to as market risks.

The Company, where deemed appropriate, uses derivatives as risk management tools to mitigate the potential impact of certain market risks.

The primary market risks

managed by the Company through the use of derivative instruments are foreign currency risk and interest rate risk.

Foreign Currency Risk Management

Forward contracts are put in place to manage the foreign currency risk associated with the anticipated foreign currency

denominated revenues and expenses.

A hedging relationship existed with an aggregate notional amount outstanding of $334.1 million and $293.4 million as of August 31, 2019 and 2018, respectively.

The related forward foreign exchange

contracts have been designated as hedging instruments and are accounted for as cash flow hedges.

The forward foreign exchange contract transactions will effectively lock in the value of anticipated foreign currency denominated revenues and expenses

against foreign currency fluctuations.

The anticipated foreign currency denominated revenues and expenses being hedged are expected to occur between September 3, 2019 and August 31, 2020.

In addition to derivatives that are designated as hedging instruments and qualify for hedge accounting, the Company also enters into forward

contracts to economically hedge transactional exposure associated with commitments arising from trade accounts receivable, trade accounts payable, fixed purchase obligations and intercompany transactions denominated in a currency other than the

functional currency of the respective operating entity.

The aggregate notional amount of these outstanding contracts as of August 31, 2019 and 2018, was $2.5 billion and $2.3 billion, respectively.

Refer to Note 16 Fair Value Measurements for the fair values and

classification of the Companys derivative instruments.

The gains and losses recognized in earnings due to hedge ineffectiveness and

the amount excluded from effectiveness testing were not material for all periods presented and are included as components of net revenue, cost of revenue and selling, general and administrative expense, which are the same line items in which the

hedged items are recorded.

The following table presents the net losses from forward contracts recorded in the Consolidated Statements of

Operations for the periods indicated (in thousands):

Location of Loss on

Fiscal Year Ended August 31

Derivatives Recognized

Derivatives Not Designated as Hedging Instruments Under ASC

in Net Income

Amount of Loss Recognized in Net Income on Derivatives

Forward foreign exchange

contracts (1)

Cost of revenue

For the fiscal years ended August 31, 2019, 2018, and 2017, the Company recognized $14.9 million,

$36.7 million, and $90.3 million, respectively, of foreign currency gains in cost of revenue, which are offset by the losses from the forward foreign exchange contracts.

Interest Rate Risk Management

Company periodically enters into interest rate swaps to manage interest rate risk associated with the Companys borrowings.

Cash Flow Hedges

The following table presents the interest rate swaps outstanding as of August 31, 2019, which have been designated as hedging

instruments and accounted for as cash flow hedges:

Interest Rate Swap Summary

Hedged Interest

Rate Payments

Aggregate Notional

Amount (in millions)

Effective Date

Expiration Date (1)

Forward Interest Rate Swap

Anticipated Debt Issuance

October 22, 2018

December 15, 2020

Interest Rate Swaps (3)

2017 Term Loan Facility

October 11, 2018

August 31, 2020

2018 Term Loan Facility

August 31, 2019

August 24, 2020

The contracts will be settled with the respective counterparties on a net basis at the expiration date for the

forward interest rate swap and at each settlement date for the interest rate swaps.

If the anticipated debt issuance occurs before December 15, 2020, the contracts will be terminated

simultaneously with the debt issuance.

The Company pays interest based upon a fixed rate as agreed upon with the respective counterparties and

receives variable rate interest payments based on the one-month LIBOR for the 2017 Term Loan Facility and the three-month LIBOR for the 2018 Term Loan Facility.

Restructuring and Related Charges

Following is a summary of the Companys restructuring and related charges (in thousands):

Long-lived assets:

Long-lived assets related to foreign operations

Restructuring, Severance and Related Charges

Following is a summary of the Company’s restructuring, severance and related charges (in thousands):

Fiscal Year Ended August 31,

1 unchanged sentence

Asset write-off costs

Total restructuring and related

Includes $21.5 million, $16.3 million and $51.3 million recorded in the EMS segment,

$2.6 million, $16.6 million and $82.4 million recorded in the DMS segment and $1.8 million, $4.0 million and $26.7 million of non-allocated charges for the fiscal years ended

August 31, 2019, 2018 and 2017, respectively.

Except for asset write-off costs, all restructuring and related charges are cash settled.

Fiscal year ended August 31, 2017, includes expenses related to the 2017 and 2013 Restructuring Plans.

2017 Restructuring Plan

On September 15, 2016, the Companys Board of Directors formally approved a restructuring plan to better align the Companys

global capacity and administrative support infrastructure to further optimize organizational effectiveness.

This action includes headcount reductions across the Companys selling, general and administrative cost base and capacity realignment in

higher cost locations (the 2017 Restructuring Plan).

The 2017 Restructuring Plan, totaling $195.0 million in

restructuring and other related costs, is complete as of August 31, 2019.

The table below sets forth the cumulative restructuring

and related charges incurred through August 31, 2019 for the 2017 Restructuring Plan (in thousands):

Total restructuring, severance and related charges (1)

Includes $ 61.9 million , $ 21.5 million and $ 16.3 million recorded in the EMS segment, $ 75.6 million , $ 2.6 million and $ 16.6 million recorded in the DMS segment and $ 19.1 million , $ 1.8 million and $ 4.0 million of non-allocated charges for the fiscal years ended August 31, 2020 , 2019 and 2018 , respectively.

Except for asset write-off costs, all restructuring, severance and related charges are cash settled.

As the Company continues to optimize its cost structure and improve operational efficiencies, $ 56.6 million of employee severance and benefit costs was incurred in connection with a reduction in the worldwide workforce during the fiscal year ended August 31, 2020 .

The remaining amount primarily relates to the 2020 Restructuring Plan.

The Company’s liability associated with the worldwide workforce reduction is $ 35.8 million as of August 31, 2020 .

Primarily relates to the 2017 Restructuring Plan, which was complete as of August 31, 2019.

2020 Restructuring Plan

Employee severance and benefit costs

Asset write-off costs

Other related costs

Total restructuring and related charges

Includes $62.3 million allocated to the EMS segment, $101.6 million allocated to the DMS segment and

$30.7 million of unallocated costs.

The tables below summarize the Companys liability activity, primarily associated with

the 2017 Restructuring Plan (in thousands):

On September 20, 2019, the Company’s Board of Directors formally approved a restructuring plan to realign the Company’s global capacity support infrastructure, particularly in the Company’s mobility footprint in China, in order to optimize organizational effectiveness.

This action includes headcount reductions and capacity realignment (the “2020 Restructuring Plan”).

The 2020 Restructuring Plan reflects the Company’s intention only and restructuring decisions, and the timing of such decisions, at certain locations are still subject to consultation with the Company’s employees and their representatives.

Upon completion of the 2020 Restructuring Plan, the Company expects to recognize approximately $ 85.0 million in restructuring and other related costs.

The Company incurred $ 76.9 million of costs during fiscal year 2020 and anticipates incurring the remaining costs during fiscal year 2021 for employee severance and benefit costs, asset write-off costs, and other related costs.

The tables below summarize the Company’s liability activity (in thousands):

Employee Severance

11 unchanged sentences

Balance as of August 31, 2020 (2)

2020 Restructuring Plan

On September 20, 2019, the Companys Board of Directors formally approved a restructuring plan to realign the Companys global

capacity support infrastructure, particularly in the Companys mobility footprint in China, in order to optimize organizational effectiveness.

This action includes headcount reductions and capacity realignment (the 2020 Restructuring

The 2020 Restructuring Plan reflects the Companys intention only and restructuring decisions, and the timing of such decisions, at certain locations are still subject to consultation with the Companys employees and their

representatives.

The Company currently expects to recognize approximately $85.0 million in

pre-tax restructuring and other related costs primarily over the course of the Companys fiscal year 2020.

This information will be subject to the finalization of timetables for the transition of

functions, consultation with employees and their representatives as well as the statutory severance requirements of the particular jurisdictions impacted, and the amount and timing of the actual charges may vary due to a variety of factors.

Companys estimates for the charges discussed above exclude any potential income tax effects.

Balance as of August 31, 2019 primarily relates to the 2017 Restructuring Plan.

Balance as of August 31, 2020 primarily relates to the 2020 Restructuring Plan.

Provision for Income Taxes

Income (loss) before income tax expense is summarized below (in thousands):

Fiscal Year Ended August 31,

Includes the elimination of intercompany foreign dividends paid to the U.S.

Income tax expense (benefit) is summarized below (in thousands):

Fiscal Year Ended August 31,

Domestic - federal

Domestic - state

Total current

Domestic - federal

Domestic - state

Total deferred

Total income tax expense

Reconciliation of the U.S.

federal statutory income tax rate to the Company’s effective income tax rate is summarized below:

Fiscal Year Ended August 31,

federal statutory income tax rate

State income taxes, net of federal tax benefit

Impact of foreign tax rates (1)(2)

Permanent impact of non-deductible cost

Income tax credits (1)

Changes in tax rates on deferred tax assets and liabilities (3)

One-time transition tax related to the Tax Act (4)

Indefinite reinvestment assertion impact (5)

Valuation allowance (6)

Non-deductible equity compensation

Impact of intercompany charges and dividends

Reclassification of stranded tax effects in AOCI

Global Intangible Low-Taxed Income (7)

Effective income tax rate

The Company has been granted tax incentives for various subsidiaries in Brazil, China, Malaysia, Singapore and Vietnam, which expire at various dates through fiscal year 2031 and are subject to certain conditions with which the Company expects to comply.

These tax incentives resulted in a tax benefit of approximately $ 42.6 million ( $ 0.28 per basic share), $ 67.3 million ( $ 0.43 per basic share) and $ 52.1 million ( $ 0.30 per basic share) during the fiscal years ended August 31, 2020 , 2019 and 2018 , respectively.

For the fiscal year ended August 31, 2020 , the decrease in the impact of foreign tax rates was primarily related to decreased income in low tax rate jurisdictions.

For the fiscal year ended August 31, 2019 , the decrease in the impact of foreign tax rates was primarily due to a decrease in the U.S.

federal statutory income tax rate due to the Tax Act.

For the fiscal year ended August 31, 2020 , the increase in the changes in tax rates on deferred tax assets and liabilities was primarily due to the re-measurement of deferred tax assets related to an extension of a non-U.S.

tax incentive of $ 21.2 million .

For the fiscal year ended August 31, 2018 , the changes in tax rates on deferred tax assets and liabilities included changes related to the Tax Act, excluding the impact of the enacted rate change on the U.S.

valuation allowance.

The one-time transition tax impact for the fiscal year ended August 31, 2018 was due to the comprehensive tax legislation enacted on December 22, 2017, commonly referred to as the Tax Cuts and Jobs Act of 2017 (“Tax Act”).

The enacted changes included a mandatory income inclusion of the historically untaxed foreign earnings of a U.S.

company’s foreign subsidiaries and effectively taxed such income at reduced tax rates (“transition tax”).

The calculation of the one-time transition tax is based upon post-1986 earnings and profits, applicable foreign tax credits

and relevant limitations, utilization of U.S.

federal net operating losses and tax credits and the amount of foreign earnings held in cash and non-cash assets.

As a result of the Tax Act, the Company made a change to the indefinite reinvestment assertion for the fiscal year ended August 31, 2018 resulting in foreign withholding taxes that would be incurred upon such future remittances of cash.

The valuation allowance change for the fiscal year ended August 31, 2020 was primarily due to the increase in deferred tax assets for sites with existing valuation allowances.

The valuation allowance change for the fiscal years ended August 31, 2019 and 2018 was primarily due to utilization of domestic federal net operating losses and tax credits against the one-time transition tax and the change in enacted tax rate applied to U.S.

deferred tax assets and liabilities for the fiscal year ended August 31, 2018 .

The increase for the fiscal year ended August 31, 2019 was partially offset by an income tax benefit of $ 17.5 million for the reversal of a U.S.

valuation allowance due to an intangible asset reclassification from indefinite-life to finite-life.

GILTI, a newly defined category of foreign subsidiary income which is taxable to U.S.

shareholders each year, applied beginning in the fiscal year ended August 31, 2019 and primarily results in the utilization of current year U.S.

federal operating losses.

The Company records the effects of GILTI as a period cost.

Deferred Tax Assets and Liabilities

Significant components of the deferred tax assets and liabilities are summarized below (in thousands):

Fiscal Year Ended August 31,

Deferred tax assets:

Net operating loss carryforwards

Compensated absences

Accrued expenses

Property, plant and equipment, principally due to differences in depreciation and amortization

Domestic tax credits

Foreign jurisdiction tax credits

Equity compensation

Domestic interest carryforwards

Cash flow hedges

Capital loss carryforwards

Revenue recognition

Operating lease liabilities

Total deferred tax assets before valuation allowances

Less valuation allowances

Net deferred tax assets

Deferred tax liabilities:

Unremitted earnings of foreign subsidiaries

Intangible assets

Operating lease assets

Total deferred tax liabilities

Net deferred tax assets

Based on the Company’s historical operating income, projection of future taxable income, scheduled reversal of taxable temporary differences, and tax planning strategies, management believes that it is more likely than not that the Company will realize the benefit of its deferred tax assets, net of valuation allowances recorded.

As of August 31, 2020 , the Company intends to indefinitely reinvest the remaining earnings from its foreign subsidiaries for which a deferred tax liability has not already been recorded.

The accumulated earnings are the most significant component

of the basis difference which is indefinitely reinvested.

As of August 31, 2020 , the indefinitely reinvested earnings in foreign subsidiaries upon which taxes had not been provided were approximately $ 2.4 billion .

The estimated amount of the unrecognized deferred tax liability on these reinvested earnings was approximately $ 0.2 billion .

Tax Carryforwards

The amount and expiration dates of income tax net operating loss carryforwards, tax credit carryforwards, and tax capital loss carryforwards, which are available to reduce future taxes, if any, as of August 31, 2020 are as follows:

(dollars in thousands)

Last Fiscal Year of Expiration

Income tax net operating loss carryforwards:

Domestic - state

2040 or indefinite

2030 or indefinite

Tax credit carryforwards:

Domestic - federal

Domestic - state

2027 or indefinite

Tax capital loss carryforwards:

Domestic - federal

Net of unrecognized tax benefits.

Calculated based on the deferral method and includes foreign investment tax credits.

The tax capital loss carryforwards were primarily from an impairment of an investment that was deemed worthless for tax purposes.

Unrecognized Tax Benefits

Reconciliation of the unrecognized tax benefits is summarized below (in thousands):

Fiscal Year Ended August 31,

Beginning balance

Additions for tax positions of prior years

Reductions for tax positions of prior years (1)

Additions for tax positions related to current year (2)

Cash settlements

Reductions from lapses in statutes of limitations

Reductions from non-cash settlements with taxing authorities (3)

Foreign exchange rate adjustment

Ending balance

Unrecognized tax benefits that would affect the effective tax rate (if recognized)

The reductions for tax positions of prior years for the fiscal year ended August 31, 2019 are primarily related to a non-U.S.

taxing authority ruling related to certain non-U.S.

net operating loss carryforwards, offset with a valuation allowance and the impacts of the Tax Act.

The additions for the fiscal years ended August 31, 2020 are primarily related to taxation of certain intercompany transactions.

The additions for the fiscal years ended August 31, 2019 and 2018 are primarily related to the impacts of the Tax Act and taxation of certain intercompany transactions.

The reductions from settlements with taxing authorities for the fiscal year ended August 31, 2019 are primarily related to the settlement of a U.S.

The Company recognizes interest and penalties related to unrecognized tax benefits in income tax expense.

The Company’s accrued interest and penalties were approximately $ 22.8 million and $ 18.9 million as of August 31, 2020 and 2019 ,

respectively.

The Company recognized interest and penalties of approximately $ 3.9 million , $( 1.5 ) million and $( 6.7 ) million during the fiscal years ended August 31, 2020 , 2019 and 2018 , respectively.

It is reasonably possible that the August 31, 2020 unrecognized tax benefits could decrease during the next 12 months by $ 4.9 million , primarily related to a taxing authority agreement associated with intercompany transactions.

The Company is no longer subject to U.S.

federal tax examinations for fiscal years before August 31, 2015.

In major non-U.S.

and state jurisdictions, the Company is no longer subject to income tax examinations for fiscal years before August 31, 2010 and August 31, 2009, respectively.

Business Acquisitions

Fiscal year 2019

During fiscal year 2018, the Company and Johnson & Johnson Medical Devices Companies (JJMD) entered into a Framework

Agreement to form a strategic collaboration and expand its existing relationship.

Fiscal years 2019 and 2020

During fiscal year 2018, the Company and Johnson & Johnson Medical Devices Companies (“JJMD”) entered into a Framework Agreement to form a strategic collaboration and expand its existing relationship.

The strategic collaboration expands the Company’s medical device manufacturing portfolio, diversification and capabilities.

On February 25, 2019 and April 29, 2019, under the terms of the Framework Agreement, the Company completed the initial closing and

second closing, respectively, of its acquisition of certain assets of JJMD.

The preliminary aggregate purchase price paid for both the initial closing and second closing was approximately $153.2 million in cash, which remains subject to certain

post-closing adjustments.

The acquisition of the JJMD assets has been accounted for as a business combination using the acquisition method of accounting.

Total assets acquired of $167.6 million and total liabilities assumed of

$14.4 million were recorded at their estimated fair values as of the acquisition dates.

The final closing, which is subject to customary closing conditions, is expected to occur during fiscal year 2020.

The Company is currently evaluating the fair values of the assets and liabilities related to this business combination.

The preliminary

estimates and measurements are, therefore, subject to change during the measurement period for assets acquired, liabilities assumed and tax adjustments.

The results of operations were included in the Companys consolidated financial results

beginning on February 25, 2019 for the initial closing and April 29, 2019 for the second closing.

The Company believes it is impracticable to provide pro forma information for the acquisition of the JJMD assets.

On September 30, 2019 the Company completed the third closing of its acquisition of certain assets of JJMD for a cash payment of

$117.1 million, primarily for inventory and the assumption of certain employee liabilities.

The purchase price for the third closing is subject to certain post-closing adjustments based on conditions within the Framework Agreement.

On February 25, 2019 and April 29, 2019, under the terms of the Framework Agreement, the Company completed the initial and second closings, respectively, of its acquisition of certain assets of JJMD.

The aggregate purchase price paid for the initial and second closings was approximately $ 167.4 million in cash.

For the initial and second closings, total assets acquired of $ 173.5 million and total liabilities assumed of $ 6.1 million were recorded at their estimated fair values as of the acquisition dates.

On September 30, 2019, under the terms of the Framework Agreement, the Company completed the third closing of its acquisition of certain assets of JJMD.

The aggregate purchase price paid for the third closing was approximately $ 113.1 million in cash.

For the third closing, total assets acquired of $ 196.2 million , including $ 80.7 million in contract assets, $ 34.0 million in inventory and $ 56.0 million in goodwill, and total liabilities assumed of $ 83.1 million , including $ 73.5 million of pension obligations, were recorded at their estimated fair values as of the acquisition date.

There were no intangible assets identified in this acquisition and the goodwill is primarily attributable to the assembled workforce.

The majority of the goodwill is currently not expected to be deductible for income tax purposes.

The acquisitions of the JJMD assets have been accounted for as separate business combinations for each closing using the acquisition method of accounting.

The results of operations were included in the Company’s consolidated financial results beginning on February 25, 2019 for the initial closing, April 29, 2019 for the second closing and September 30, 2019 for the third closing.

The Company believes it is impracticable to provide pro forma information for the acquisitions of the JJMD assets.

Fiscal year 2018

On September 1, 2017,

the Company completed the acquisition of True-Tech Corporation (True-Tech) for approximately $95.9 million in cash.

On September 1, 2017 , the Company completed the acquisition of True-Tech Corporation (“True-Tech”) for approximately $ 95.9 million in cash.

True-Tech is a manufacturer specializing in aerospace, semiconductor and medical machined components.

The acquisition of True-Tech assets was accounted for as a business combination using the acquisition method of accounting.

Assets acquired of

$114.7 million, including $25.9 million in intangible assets and $22.6 million in goodwill, and liabilities assumed of $18.8 million were recorded at their estimated fair values as of the acquisition date.

The excess of the

purchase price over the fair value of the acquired assets and assumed liabilities was recorded to goodwill and was fully allocated to the EMS segment.

Assets acquired of $ 114.7 million , including $ 25.9 million in intangible assets and $ 22.6 million in goodwill, and liabilities assumed of $ 18.8 million were recorded at their estimated fair values as of the acquisition date.

The excess of the purchase price over the fair value of the acquired assets and assumed liabilities was recorded to goodwill and was fully allocated to the EMS segment.

The majority of the goodwill is currently expected to be deductible for income tax purposes.

results of operations were included in the Companys consolidated financial results beginning on September 1, 2017.

The results of operations were included in the Company’s consolidated financial results beginning on September 1, 2017.

Pro forma information has not been provided as the acquisition of True-Tech is not deemed to be significant.

Fiscal year 2017

On March 1, 2017, the Company completed the acquisition of Lewis Engineering, which was not deemed to be significant.

business expanded the Companys capabilities in precision machining, manufacturing and design engineering.

The aggregate purchase price of the acquisition totaled approximately $31.4 million in cash.

The acquisition was accounted for as a business combination using the acquisition method of accounting.

Assets acquired of $32.3 million,

including $8.2 million in goodwill and $14.6 million in intangible assets, and liabilities assumed of $0.9 million were recorded at their estimated fair values as of the acquisition date.

The excess of the purchase price over the fair

value of the acquired assets and assumed liabilities of $8.2 million was recorded to goodwill and was fully allocated to the DMS segment.

The majority of the goodwill is currently expected to be deductible for income tax purposes.

expensed transaction costs in connection with the acquisition of approximately $0.8 million during the fiscal year ended August 31, 2017.

The results of operations of the acquired business were included in the Companys consolidated

financial results beginning on the date of the acquisition.

Pro forma information has not been provided as the acquisition is not deemed to be significant.

Fair Value Measurements

Fair Value Measurements on a Recurring Basis

The following table presents the fair value of the Companys financial assets and liabilities measured at fair value by hierarchy level on

a recurring basis as of the periods indicated:

The following table presents the fair value of the Company's financial assets and liabilities measured at fair value by hierarchy level on a recurring basis as of the periods indicated:

(in thousands)

Fair Value Hierarchy

August 31, 2020

4 unchanged sentences

Short-term investments

Deferred purchase price receivables (Note

Forward foreign exchange contracts:

9 unchanged sentences

Derivatives designated as hedging instruments (Note 11)

Derivatives not designated as hedging instruments (Note 11)

Extended interest rate swap not designated as a hedging instrument (Note 11)

Other liabilities:

Forward interest rate swaps:

Interest rate swap:

Derivatives designated as hedging instruments (Note 11)

Derivatives not designated as hedging instruments (Note 11)

Extended interest rate swap not designated as a hedging instrument (Note 11)

Consist of investments that are readily convertible to cash with original maturities of 90 days or less.

Recorded initially at fair value using unobservable inputs, determined primarily using discounted cash flows,

and due to its credit quality and short-term maturity, the fair value approximated book values.

The unobservable inputs consist of estimated credit losses and estimated discount rates, which both have an immaterial impact on the fair value

The Companys forward foreign exchange contracts are measured on a recurring basis at fair value, based on

foreign currency spot rates and forward rates quoted by banks or foreign currency dealers.

During the fourth quarter of fiscal year 2019, the Company exchanged its investment in the Senior Non-Convertible Preferred Stock of iQor Holdings, Inc.

(iQor) in association with iQors previously announced sale of its international logistics and product service assets.

restructuring, the Senior Non-Convertible Preferred Stock had a face value of $50.0 million, accumulated dividends at an annual rate of 8 percent and was redeemable on March 31, 2023 or upon a

change in control.

The restructured Senior Non-Convertible Preferred Stock has a face value of $55.0 million and is redeemable at iQors option or upon change of control for $55.0 million until

December 31, 2023, $65.0 million during calendar year 2024 and is mandatorily redeemable for $75.0 million on April 1, 2025.

As a result of the restructuring, the Company recognized a restructuring of securities loss of $29.6 million, which primarily consisted of

a credit loss.

The credit loss was estimated utilizing a probability-weighted discounted cash flow model incorporating the concessions and modifications made as part of the restructuring, discounted at the loans effective interest rate.

Senior Non-Convertible Preferred Stock is valued each reporting period using unobservable inputs based on a discounted cash flow model and is classified as an available for sale debt security with any

unrealized loss recorded to AOCI.

As of August 31, 2019, the unobservable inputs have an immaterial impact on the fair value calculation.

As of August 31, 2019, the amortized cost basis approximates fair value.

Fair value measurements are based on the contractual terms of the derivatives and use observable market-based

The Company’s forward foreign exchange contracts are measured on a recurring basis at fair value, based on foreign currency spot rates and forward rates quoted by banks or foreign currency dealers.

During the fourth quarter of fiscal year 2020, the Company recognized an impairment on its investment in the Senior Non-Convertible Preferred Stock of iQor Holdings, Inc.

(“iQor”) in connection with iQor’s bankruptcy filing.

The Company does not expect to recover any of the investment value and recognized the entire remaining investment of $ 36.4 million as a loss on securities.

Fair value measurements are based on the contractual terms of the derivatives and use observable market-based inputs.

The interest rate swaps are valued using a discounted cash flow analysis on the expected cash flows of each derivative using observable inputs including interest rate curves and credit spreads.

The 2020 Extended Interest Rate Swaps are considered a hybrid instrument and the Company elected the fair value option for reporting.

Fair value measurements are based on the contractual terms of the contract and use observable market-based inputs.

The interest rate swaps are valued using a discounted cash flow analysis on the expected cash flows using observable inputs including interest rate curves and credit spreads.

Assets Held for Sale

The following table presents the assets held for sale (in thousands):

August 31, 2020

August 31, 2019

(in thousands)

Carrying Amount

Assets held for sale (1)

The fair value of assets held for sale exceeds the carrying value for $ 30.1 million of assets held for sale.

For $ 37.3 million of assets held for sale, the carrying value approximates the fair value with the asset value measured using Level 2 inputs.

Fair Value of Financial Instruments

The carrying amounts of cash and cash equivalents, trade accounts receivable, prepaid expenses and other current assets, accounts payable and

accrued expenses approximate fair value because of the short-term nature of these financial instruments.

The carrying amounts of borrowings under credit facilities and under loans approximates fair value as interest rates on these instruments

approximates current market rates.

The carrying amounts of cash and cash equivalents, trade accounts receivable, prepaid expenses and other current assets, accounts payable and accrued expenses approximate fair value because of the short-term nature of these financial instruments.

The carrying amounts of borrowings under credit facilities and under loans approximates fair value as interest rates on these instruments approximates current market rates.

Notes payable and long-term debt is carried at amortized cost;

however, the Company

estimates the fair value of notes payable and long-term debt for disclosure purposes.

The following table presents the carrying amounts and fair values of the Companys notes payable and long-term debt, by hierarchy level as of the periods

however, the Company estimates the fair value of notes payable and long-term debt for disclosure purposes.

The following table presents the carrying amounts and fair values of the Company's notes payable and long-term debt, by hierarchy level as of the periods indicated:

August 31, 2020

1 unchanged sentence

(in thousands)

Fair Value Hierarchy

Carrying Amount

Notes payable and long-term debt:

3 unchanged sentences

3.950% Senior Notes

3.600% Senior Notes

3.000% Senior Notes

The fair value estimates are based upon observable market data.

This fair value estimate is based on the Companys indicative borrowing cost derived from discounted cash

Refer to Note 9 Postretirement and Other Employee Benefits for disclosure surrounding the

fair value of the Companys pension plan assets.

This fair value estimate is based on the Company’s indicative borrowing cost derived from discounted cash flows.

Refer to Note 10 - “Postretirement and Other Employee Benefits” for disclosure surrounding the fair value of the Company’s pension plan assets.

Commitments and Contingencies

Lease Agreements

The Company primarily has leases for buildings and real estate with lease terms ranging from 1 year to 36 years .

Refer to Note 5 – “Leases” for the future minimum lease payments under operating and finance leases as of August 31, 2020 .

Legal Proceedings

The Company is party to certain lawsuits in the ordinary course of business.

The Company does not believe that these proceedings, individually or in the aggregate, will have a material adverse effect on the Company’s financial position, results of operations or cash flows.

New Accounting Guidance

Recently Adopted Accounting Guidance

During fiscal year 2014, the Financial Accounting Standards Board (FASB) issued an accounting standard, which is a comprehensive

new revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services.

accounting standard became effective for the Company in the first quarter of fiscal year 2019.

The Company implemented changes to its processes, policies and internal controls to meet the impact of the new standard and disclosure requirements.

to Note 18 Revenue to the Consolidated Financial Statements for further details.

During fiscal year 2016, the FASB

issued a new accounting standard to address certain aspects of recognition, measurement, presentation and disclosure of financial instruments.

This guidance became effective for the Company in the first quarter of fiscal year 2019, and was applied

prospectively by means of a cumulative-effect adjustment to the Consolidated Balance Sheet as of September 1, 2018 to equity investments that existed as of the date of adoption of the standard.

The adoption of this standard did not have a

material impact on the Companys Consolidated Financial Statements;

however, the impact on future periods will depend on the facts and circumstances of future transactions.

During fiscal year 2016, the FASB issued a new accounting standard to address the presentation of certain transactions within the statement of

cash flows with the objective of reducing the existing diversity in practice.

This standard was adopted on September 1, 2018 on a retrospective basis and resulted in a reclassification of cash flows from operating activities to investing

activities in the Companys Consolidated Statement of Cash Flows for cash receipts related to collections on the deferred purchase price receivable (i.e.

beneficial interest) on asset-backed securitization transactions.

The increase in cash

flow from investing activities and the corresponding decrease to cash flow from operating activities upon adoption of the standard was $96.8 million, $2.0 billion, and $2.7 billion for the fiscal years ended August 31, 2019, 2018

and 2017, respectively.

During fiscal year 2017, the FASB issued a new accounting standard to improve the accounting for the income tax

consequences of intra-entity transfers of assets other than inventory.

The new standard eliminates the exception for an intra-entity transfer of an asset other than inventory and requires an entity to recognize the income tax consequences when the

transfer occurs.

This guidance became effective for the Company beginning in the first quarter of fiscal year 2019.

This guidance was adopted on a modified retrospective basis and an immaterial cumulative-effect adjustment was recorded, which

reduced retained earnings as of September 1, 2018.

During fiscal year 2017, the FASB issued a new accounting standard which

clarifies the scope of accounting for asset derecognition and adds further guidance for recognizing gains and losses from the transfer of non-financial assets in contracts with non-customers.

This guidance became effective for the Company beginning in the first quarter of fiscal year 2019 coincident with the new revenue recognition guidance.

The adoption of this standard did not have a

material impact on the Companys Consolidated Financial Statements;

however, the impact on future periods will depend on the facts and circumstances of future transactions.

During the second quarter of fiscal year 2018, the Securities and Exchange Commission

(SEC) staff issued SAB 118, which provides guidance on accounting for the tax effects of the Tax Act.

SAB 118 provides a measurement period that should not extend beyond one year from the Tax Act enactment date for companies to

complete the accounting under ASC 740.

In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the Tax Act for which the accounting under ASC 740 is complete.

To the extent that a companys accounting for

certain income tax effects of the Tax Act is incomplete, but it is able to determine a reasonable estimate, it must record a provisional estimate in its financial statements.

If a company cannot determine a provisional estimate to be included in the

financial statements, it should continue to apply ASC 740 on the basis of the provisions of the tax laws that were in effect immediately before the enactment of the Tax Act.

The Company applied SAB 118 and provided required disclosures in Note

4 Income Taxes.

During fiscal year 2016, the FASB issued a new accounting standard revising lease accounting, which requires the Company to recognize right-of-use assets and lease liabilities on the Consolidated Balance Sheet and disclose key information regarding leasing arrangements.

The accounting standard became effective for the Company in fiscal year 2020.

Refer to Note 5 - “Leases” to the Consolidated Financial Statements for further details.

During fiscal year 2017, the FASB issued a new accounting standard to improve the financial reporting of hedging relationships to better portray the economic results of an entity’s risk management activities by simplifying the application of hedge accounting and improving the related disclosures in its financial statements.

This guidance became effective for the Company beginning in fiscal year 2020.

The guidance was applied using a modified retrospective approach.

The adoption of this standard did not have a material impact on the Company’s Consolidated Financial Statements.

Recently Issued Accounting Guidance

During fiscal year 2016, the FASB issued a new accounting standard revising lease accounting.

The new guidance requires organizations to

recognize lease assets and lease liabilities on the Consolidated Balance Sheet and disclose key information regarding leasing arrangements.

This guidance is effective for the Company beginning in the first quarter of fiscal year 2020.

must be adopted using a modified retrospective approach.

The Company intends to elect the package of practical expedients offered, which allows entities to not reassess:

i) whether any contracts prior to the adoption date are or contain leases,

ii) lease classification, and iii) whether capitalized initial direct costs continue to meet the definition of initial direct costs under the new guidance.

In preparation for the adoption, the Company is implementing a new lease accounting system.

Upon adoption, the Company expects to recognize right-of-use assets and lease liabilities, respectively, in the range of approximately $350.0 million to

$500.0 million.

The Company is continuing to assess implementation of changes to its processes, policies and internal controls to meet the requirements of the new standard.

The adoption of this standard is not expected to have a material impact

on the Consolidated Statements of Operations or the Consolidated Statements of Cash Flows.

During fiscal year 2016, the FASB issued an

accounting standard, which replaces the existing incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit

loss estimates.

This guidance is effective for the Company beginning in the first quarter of fiscal year 2021.

This guidance must be applied using a modified retrospective or prospective transition method, depending on the area covered by this

accounting standard.

The Company is currently assessing the impact this new standard may have on its Consolidated Financial Statements.

During fiscal year 2017, the FASB issued a new accounting standard to improve the financial reporting of hedging relationships to better

portray the economic results of an entitys risk management activities by simplifying the application of hedge accounting and improving the related disclosures in its financial statements.

This guidance is effective for the Company beginning in

the first quarter of fiscal year 2020, with early adoption permitted.

The guidance must be applied using a modified retrospective approach.

The adoption of this standard is not expected to have a material impact on the Companys Consolidated

Financial Statements;

however, the impact on future periods will depend on the facts and circumstances of future transactions.

fiscal year 2018, the FASB issued a new accounting standard which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs

incurred to develop or obtain internal-use software.

During fiscal year 2016, the FASB issued an accounting standard, which replaces the existing incurred loss impairment model with an expected credit loss model and requires a financial asset measured at amortized cost to be presented at the net

amount expected to be collected.

This guidance is effective for the Company beginning in the first quarter of fiscal year 2021.

The Company is currently assessing the impact this new

standard may have on its Consolidated Financial Statements.

Recently issued accounting guidance not discussed above is not applicable or

did not have, or is not expected to have, a material impact to the Company.

Effective September 1, 2018, the Company adopted ASU 2014-09, Revenue Recognition (Topic 606).

new standard is a comprehensive new revenue recognition model that requires the Company to recognize revenue in a manner which depicts the transfer of goods or services to its customers at an amount that reflects the consideration the Company

expects to receive in exchange for those goods or services.

Prior to the adoption of the new standard, the Company recognized

substantially all of its revenue from contracts with customers at a point in time, which was generally when the goods were shipped to or received by the customer, title and risk of ownership had passed, the price to the buyer was fixed or

determinable and collectability was reasonably assured (net of

estimated returns).

Under the new standard, the Company recognizes revenue over time for the majority of its contracts with customers which results in revenue for those customers being recognized

earlier than under the previous guidance.

Revenue for all other contracts with customers continues to be recognized at a point in time, similar to recognition prior to the adoption of the standard.

Additionally, the new standard impacts the Companys accounting for certain fulfillment costs, which include upfront costs to prepare for

manufacturing activities that are expected to be recovered.

Under the new standard, such upfront costs are recognized as an asset and amortized on a systematic basis consistent with the pattern of the transfer of control of the products or services

to which to the asset relates.

The Company adopted ASU 2014-09 using the modified retrospective

method by applying the guidance to all open contracts upon adoption and recorded a cumulative effect adjustment as of September 1, 2018, net of tax, of $42.6 million.

No adjustments have been made to prior periods.

Following is a summary

of the cumulative effect adjustment (in thousands):

Balance as of

August 31, 2018

Adjustments due to

adoption of ASU 2014-09

Balance as of

September 1, 2018

Contract assets (1)

Inventories, net (1)

Prepaid expenses and other current

assets (1)(2)

Deferred income taxes (1)(2)

Contract liabilities (2)(3)

Deferred income (2)(3)(4)

Other accrued expenses (3)(4)

Deferred income taxes (1)

Retained earnings (1)(2)

Differences primarily relate to the timing of revenue recognition for over time customers and certain balance

sheet reclassifications.

Differences primarily relate to the timing of recognition and recovery of fulfillment costs and certain balance

sheet reclassifications.

Included within accrued expenses on the Consolidated Balance Sheets.

Differences included in contract liabilities as of September 1, 2018.

The following table presents the effect of the adoption of the new revenue guidance on the

Consolidated Balance Sheets as of August 31, 2019 (in thousands):

August 31, 2019

Balance without the adoption of

Contract assets (1)

Inventories, net (1)

Prepaid expenses and other current

assets (1)(2)

Deferred income taxes (1)

Contract liabilities (2)(3)

Deferred income (2)(3)(4)

Other accrued expenses (3)(4)

Deferred income taxes (1)

Retained earnings (1)(2)

Differences primarily relate to the timing of revenue recognition for over time customers and certain balance

sheet reclassifications.

Differences primarily relate to the timing of recognition and recovery of fulfillment costs and certain balance

sheet reclassifications.

Included within accrued expenses on the Consolidated Balance Sheets.

Differences included in contract liabilities as of September 1, 2018.

The following table presents the effect of the adoption of the new revenue guidance on the Consolidated Statement of Operations for the fiscal

year ended August 31, 2019 (in thousands):

Fiscal Year Ended

August 31, 2019

Balance without the adoption

of ASU 2014-09

Net revenue (1)

Cost of revenue (2)

Operating income

Income tax expense

Differences primarily relate to the timing of revenue recognition for over-time customers and to the recovery

of fulfillment costs.

Differences primarily relate to the timing of cost recognition for over-time customers and the recognition of

fulfillment costs.

The following table presents the Companys revenues disaggregated by segment (in

Fiscal Year Ended

August 31, 2019

Timing of transfer

Point in time

Contract Balances

No impairment costs related to contract assets were recognized during the fiscal year ended August 31, 2019.

Revenue recognized during the

fiscal year ended August 31, 2019 that was included in the contract liability balance as of September 1, 2018 was $404.0 million.

Fulfillment Costs

August 31, 2019, capitalized costs to fulfill are $67.1 million.

Amortization of fulfillment cost was $48.6 million during the fiscal year ended August 31, 2019.

No impairments related to fulfillments costs were recognized during

the fiscal year ended August 31, 2019.

Remaining Performance Obligations

The Company applied the practical expedient and did not disclose the value of unsatisfied performance obligations for contracts with an

original expected length of one year or less.

This guidance must be applied using a modified retrospective or prospective transition method, depending on the area covered by this accounting standard.

The adoption of this standard does not have a material impact on its Consolidated Financial Statements.

During fiscal year 2018, the FASB issued a new accounting standard which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software.

This guidance will be applied prospectively and is effective for the Company beginning in the first quarter of fiscal year 2021.

The Company does not expect this new standard to have a material impact on its Consolidated Financial Statements.

During the third quarter of fiscal year 2020, the FASB issued a new accounting standard which provides guidance in accounting for contracts, hedging relationships, and other transactions that reference U.S.

dollar LIBOR or another reference rate expected to be discontinued because of reference rate reform.

The amendments in this update are elective and were effective for the Company immediately upon issuance.

The Company is currently assessing the impact of the transition from U.S.

dollar LIBOR to alternative reference rates but does not expect this new standard to have a material impact on its Consolidated Financial Statements.

Recently issued accounting guidance not discussed above is not applicable or did not have, or is not expected to have, a material impact to the Company.

Form 10-K Summary

Not applicable.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to

be signed on its behalf by the undersigned, thereunto duly authorized.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Chief Executive Officer

2 unchanged sentences

KNOW ALL THESE PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Mark T.

Mondello and Michael

Dastoor and each of them, jointly and severally, his or her attorneys-in-fact, each with full power of substitution, for him or her in any and all capacities, to sign

any and all amendments to this Annual Report on Form 10-K, and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying

and confirming all that each said attorneys-in-fact or his substitute or substitutes, may do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of

the registrant and in the capacities and on the dates indicated:

Mondello and Michael Dastoor and each of them, jointly and severally, his or her attorneys-in-fact, each with full power of substitution, for him or her in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that each said attorneys-in-fact or his substitute or substitutes, may do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:

/s/ T IMOTHY L.

8 unchanged sentences

/s/ M ICHAEL D ASTOOR

Michael Dastoor

Chief Financial Officer (Principal

1 unchanged sentence

October 22, 2020

Michael Dastoor

/s/ A NOUSHEH A NSARI

Anousheh Ansari

October 22, 2020

Anousheh Ansari

/s/ M ARTHA F.

1 unchanged sentence

/s/ C HRISTOPHER S .

Christopher S.

October 22, 2020

Christopher S.

October 22, 2020

24 unchanged sentences

Fiscal year ended August 31, 2018

to Other Accounts

End of Period

3 unchanged sentences

Fiscal year ended August 31, 2018

During the fiscal years ended August 31, 2019, 2018 and 2017, the additions charged to costs and expenses

primarily relate to the increase of deferred tax assets for sites with existing valuation allowances.

During the fiscal year ended August 31, 2019, the additions charged to other accounts primarily relate to

the increase of net operating loss carry forwards due to the release of a non-U.S.

unrecognized tax benefit.

During the fiscal year ended August 31, 2017, the reductions charged to other accounts

primarily relate to the decrease of net operating loss carry forwards due to non-U.S.

unrecognized tax benefits and a non-U.S.

During the fiscal years ended August 31, 2019 and 2018, the reductions charged to costs and expenses

primarily relate to the decrease of U.S.

net operating loss carry forwards and tax credits due to utilization against the one-time transition tax as a result of the Tax Act.

During the fiscal year ended

August 31, 2019, an additional reduction charged to costs and expenses relates to the $17.5 million income tax benefit for the reversal of a U.S.

valuation allowance due to an intangible asset reclassification from indefinite-life to

During the fiscal year ended August 31, 2017, the reductions charged to costs and expenses primarily relate to the release of certain non-U.S.

valuation allowances.

See accompanying report of independent registered public accounting firm.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures