What changed in this filing

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Item 1. Financial Statements

2021-01-08 compared with 2020-06-29 · 202 added, 342 removed, 456 unchanged (54% of the section changed)

3 unchanged sentences

(in thousands, except for share data)

November 30, 2020

August 31, 2020

Current assets:

Cash and cash equivalents

Accounts receivable, net of allowance for doubtful accounts of $32,239 as of May 31, 2020 and $17,221 as of August 31, 2019

Accounts receivable, net of allowance for doubtful accounts of $ 24,479 as of November 30, 2020 and $ 25,827 as of August 31, 2020

Contract assets

2 unchanged sentences

Total current assets

Property, plant and equipment, net of accumulated depreciation of $4,452,228 as of May 31, 2020 and $4,110,496 as of August 31, 2019

Property, plant and equipment, net of accumulated depreciation of $ 4,676,152 as of November 30, 2020 and $ 4,525,758 as of August 31, 2020

Operating lease right-of-use asset

Intangible assets, net of accumulated amortization of $380,850 as of May 31, 2020 and $337,841 as of August 31, 2019

Intangible assets, net of accumulated amortization of $ 406,694 as of November 30, 2020 and $ 395,074 as of August 31, 2020

Deferred income taxes

17 unchanged sentences

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

263,312,358 and 260,406,796 shares issued and 150,574,036 and 153,520,380 shares outstanding as of May 31, 2020 and August 31, 2019, respectively

266,047,352 and 263,830,270 shares issued and 150,471,570 and 150,330,358 shares outstanding as of November 30, 2020 and August 31, 2020, respectively

Additional paid-in capital

1 unchanged sentence

Accumulated other comprehensive loss

Treasury stock at cost, 112,738,322 and 106,886,416 shares as of May 31, 2020 and August 31, 2019, respectively

Treasury stock at cost, 115,575,782 and 113,499,912 shares as of November 30, 2020 and August 31, 2020, respectively

( 2,680,860 )

( 2,609,250 )

Total Jabil Inc.

7 unchanged sentences

Three months ended

Nine months ended

November 30, 2020

November 30, 2019

Cost of revenue

5 unchanged sentences

Operating income

Impairment on securities

Other expense

Other (income) expense

Interest income

2 unchanged sentences

Income tax expense

Net (loss) income

Net income attributable to noncontrolling interests, net of tax

Net (loss) income attributable to Jabil Inc.

(Loss) earnings per share attributable to the stockholders of Jabil Inc.:

Net income attributable to Jabil Inc.

Earnings per share attributable to the stockholders of Jabil Inc.:

Weighted average shares outstanding:

4 unchanged sentences

Three months ended

Nine months ended

Net (loss) income

Other comprehensive (loss) income:

November 30, 2020

November 30, 2019

Other comprehensive income (loss):

Change in foreign currency translation

1 unchanged sentence

Change in fair value of derivatives

Adjustment for net losses (gains) realized and included in net income

Adjustment for net (gains) losses realized and included in net income

Total change in derivative instruments

Unrealized (loss) gain on available for sale securities

Actuarial gain

Total other comprehensive (loss) income

Comprehensive (loss) income

Unrealized loss on available for sale securities

Actuarial loss

Total other comprehensive income

Comprehensive income

Comprehensive income attributable to noncontrolling interests

Comprehensive (loss) income attributable to Jabil Inc.

Comprehensive income attributable to Jabil Inc.

See accompanying notes to Condensed Consolidated Financial Statements.

3 unchanged sentences

Three months ended

Nine months ended

November 30, 2020

November 30, 2019

Total stockholders' equity, beginning balances

1 unchanged sentence

Beginning balances

Shares issued under employee stock purchase plan

Vesting of restricted stock

2 unchanged sentences

Beginning balances

Shares issued under employee stock purchase plan

Vesting of restricted stock

4 unchanged sentences

Declared dividends

Cumulative effect adjustment for adoption of new accounting standards

Net (loss) income attributable to Jabil Inc.

Net income attributable to Jabil Inc.

Ending balances

1 unchanged sentence

Beginning balances

Other comprehensive loss

Other comprehensive income

Ending balances

1 unchanged sentence

Beginning balances

( 2,609,250 )

( 2,371,612 )

Purchases of treasury stock under employee stock plans

1 unchanged sentence

Ending balances

( 2,680,860 )

( 2,487,319 )

Noncontrolling interests:

1 unchanged sentence

Net income attributable to noncontrolling interests

Acquisition of noncontrolling interests

Disposition of noncontrolling interests

Declared dividends to noncontrolling interests

Ending balances

4 unchanged sentences

(in thousands)

Nine months ended

Three months ended

November 30, 2020

November 30, 2019

Cash flows provided by operating activities:

Net (loss) income

Adjustments to reconcile net income to net cash provided by operating activities:

14 unchanged sentences

Cash paid for business and intangible asset acquisitions, net of cash

Cash receipts on sold receivables

Net cash used in investing activities

Cash flows (used in) provided by financing activities:

Cash flows used in financing activities:

Borrowings under debt agreements

Payments toward debt agreements

( 1,787,243 )

Payments to acquire treasury stock

Dividends paid to stockholders

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

Net cash (used in) provided by financing activities

Net cash used in financing activities

Effect of exchange rate changes on cash and cash equivalents

12 unchanged sentences

In the opinion of management, all adjustments (consisting of normal recurring accruals) necessary to present fairly the information set forth therein have been included.

The accompanying unaudited Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and footnotes included in the Annual Report on Form 10-K of the Company for the fiscal year ended August 31, 2019 .

Results for the nine months ended May 31, 2020 are not necessarily an indication of the results that may be expected for the full fiscal year ending August 31, 2020 .

(the “Company”) for the fiscal year ended August 31, 2020.

Results for the three months ended November 30, 2020 are not necessarily an indication of the results that may be expected for the full fiscal year ending August 31, 2021.

The full impact on the Company’s business and results of operations related to COVID-19 depends on future developments and cannot be fully predicted.

5 unchanged sentences

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 three months and nine months ended May 31, 2020 and 2019 were not material.

Servicing fees related to each of the trade accounts receivable sale programs recognized during the three months ended November 30, 2020 and 2019 were not material.

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

4 unchanged sentences

November 30, 2021

June 30, 2020

May 4, 2023 (4)

August 31, 2023

May 4, 2023 (3)

January 25, 2021 (4)

6 unchanged sentences

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

The program will be automatically extended each year 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.

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

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

3 unchanged sentences

(7) 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 each year 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.

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

(9) The program will be automatically extended 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):

Three months ended

Nine months ended

November 30, 2020

November 30, 2019

Trade accounts receivable sold

3 unchanged sentences

Inventories consist of the following (in thousands):

November 30, 2020

August 31, 2020

4 unchanged sentences

Inventories, net

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.

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.

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 Condensed Consolidated Balance Sheets, as of the period indicated (in thousands):

Financial Statement Line Item

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 $ 72.3 million .

Net of accumulated amortization of $ 11.0 million .

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

Three months ended

Nine months ended

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:

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):

Nine months ended

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 Condensed Consolidated Statements of Cash Flows.

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

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

Twelve months ended May 31,

Operating Leases (1)

Finance Leases

Total minimum lease payments

Present value of lease liabilities

Excludes $ 43.4 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 , $ 130.2 million and $ 117.2 million for fiscal years 2019, 2018 and 2017, respectively.

Notes Payable and Long-Term Debt

Notes payable and long-term debt outstanding as of May 31, 2020 and August 31, 2019 are summarized below (in thousands):

Notes payable and long-term debt outstanding as of November 30, 2020 and August 31, 2020 are summarized below (in thousands):

Maturity Date

November 30, 2020

August 31, 2020

4.700 % Senior Notes

9 unchanged sentences

Notes payable and long-term debt, less current installments

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 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 nine months ended May 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 3.5 % .

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.

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 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 May 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’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 May 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.

(1) As of November 30, 2020, the Company has $ 3.8 billion in available unused borrowing capacity under its revolving credit facilities.

The Revolving Credit Facility under the five-year unsecured credit facility entered into on January 22, 2020 (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.

4 unchanged sentences

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 May 31, 2020 and August 31, 2019 , the Company was in compliance with its debt covenants.

As of November 30, 2020 and August 31, 2020, the Company was in compliance with its debt covenants.

Refer to Note 16 – “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 foreign asset-backed receivables to an unaffiliated financial institution and a conduit administered by an unaffiliated financial institution and certain of the North American asset-backed receivables to conduits administered by an unaffiliated financial institution on a monthly basis.

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 three months and nine months ended May 31, 2020 and 2019 were not material.

Servicing fees related to each of the asset-backed securitization programs recognized during the three months ended November 30, 2020 and 2019 were not material.

1 unchanged sentence

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.

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 Condensed Consolidated Financial Statements.

As of May 31, 2020 , the special purpose entity has liabilities for which creditors do not have recourse to the general credit of the Company (primary beneficiary).

As of November 30, 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 May 31, 2020 .

No liability has been recorded for obligations under the guarantee as of November 30, 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 Condensed 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 May 31, 2020 .

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

5 unchanged sentences

(1) Maximum amount available at any one time.

As of May 31, 2020 , the Company had up to $ 136.6 million in available liquidity under its asset-backed securitization programs.

(2) As of November 30, 2020, the Company had up to $ 6.3 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):

Three months ended

Nine months ended

May 31, 2019 (3)

November 30, 2020

November 30, 2019

Trade accounts receivable sold

3 unchanged sentences

(2) Recorded to other expense within the Condensed 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 North American asset-backed securitization program covenants include compliance with the interest ratio and debt to EBITDA ratio of the Credit Facility.

The foreign asset-backed securitization program covenants include limitations on certain corporate actions such as mergers and consolidations.

As of May 31, 2020 and August 31, 2019 , the Company was in compliance with all covenants under the asset-backed securitization programs.

As of November 30, 2020 and August 31, 2020, the Company was in compliance with all covenants under the asset-backed securitization programs.

Accrued Expenses

Accrued expenses consist of the following (in thousands):

November 30, 2020

August 31, 2020

3 unchanged sentences

Accrued expenses

Revenue recognized during the nine months ended May 31, 2020 and 2019 that was included in the contract liability balance as of September 1, 2019 and 2018 was $ 260.9 million and $ 350.9 million , respectively.

(1) Revenue recognized during the three months ended November 30, 2020 and 2019 that was included in the contract liability balance as of August 31, 2020 and 2019 was $ 170.3 million and $ 101.4 million, respectively.

Postretirement and Other Employee Benefits

Postretirement Benefits

Net Periodic Benefit Cost

The following table provides information about the net periodic benefit cost for all plans for the three months and nine months ended May 31, 2020 and 2019 (in thousands):

The following table provides information about the net periodic benefit cost for all plans for the three months ended November 30, 2020 and 2019 (in thousands):

Three months ended

Nine months ended

November 30, 2020

November 30, 2019

Service cost (1)

1 unchanged sentence

Expected long-term return on plan assets (2)

Recognized actuarial loss (2)

Recognized actuarial (gain) loss (2)

Amortization of actuarial gain (2)

Amortization of prior service credit (2)

2 unchanged sentences

(2) Components are recognized in other expense in the Condensed Consolidated Statement of Operations.

Acquired Plan

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.

The following tables provide information only related to the Switzerland plan as of the acquisition date, September 30, 2019, and are preliminary estimates.

Benefit Obligation and Plan Assets

The benefit obligations, plan assets and the funded status of the Switzerland plan as of September 30, 2019 are as follows (in thousands):

September 30, 2019

Ending projected benefit obligation

Ending fair value of plan assets

Unfunded status

The Company expects to make cash contributions between $ 9.9 million and $ 12.1 million to its Switzerland pension plan during fiscal year 2020 .

The estimated future benefit payments, which reflect expected future service, are as follows (in thousands):

Fiscal Year Ended August 31,

2025 through 2029

Accumulated Benefit Obligation

The following table provides information for the Switzerland plan with an accumulated benefit obligation as of September 30, 2019 (in thousands):

September 30, 2019

Projected benefit obligation

Accumulated benefit obligation

Fair value of plan assets

Derivative Financial Instruments and Hedging Activities

5 unchanged sentences

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 $ 389.7 million and $ 334.1 million as of May 31, 2020 and August 31, 2019 , respectively.

A hedging relationship existed with an aggregate notional amount outstanding of $ 1.0 billion and $ 355.2 million as of November 30, 2020 and August 31, 2020, 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 June 1, 2020 and May 31, 2021 .

The anticipated foreign currency denominated revenues and expenses being hedged are expected to occur between December 1, 2020 and November 30, 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 May 31, 2020 and August 31, 2019 , was $ 2.6 billion and $ 2.5 billion , respectively.

The aggregate notional amount of these outstanding contracts as of November 30, 2020 and August 31, 2020, was $ 3.5 billion and $ 2.9 billion, respectively.

Refer to Note 16 – “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 losses and gains from forward contracts recorded in the Condensed Consolidated Statements of Operations for the periods indicated (in thousands):

The following table presents the gains from forward contracts recorded in the Condensed Consolidated Statements of Operations for the periods indicated (in thousands):

Derivatives Not Designated as Hedging Instruments Under ASC 815

Location of (Loss) Gain on Derivatives Recognized in Net Income

Amount of (Loss) Gain Recognized in Net Income on Derivatives

Location of Gain on Derivatives Recognized in Net Income

Amount of Gain Recognized in Net Income on Derivatives

Three months ended

Nine months ended

November 30, 2020

November 30, 2019

Forward foreign exchange contracts (1)

Cost of revenue

For the three months and nine months ended May 31, 2020 , the Company recognized $ 36.9 million and $ 0.4 million , respectively, of foreign currency gains in cost of revenue, which are offset by the losses from the forward foreign exchange contracts.

During the three months ended May 31, 2019 , the Company recognized $ 28.3 million of foreign currency gains in cost of revenue, which are offset by the losses from the forward foreign exchange contracts.

During the nine months ended May 31, 2019 , the Company recognized $ 24.3 million of foreign currency losses in cost of revenue, which are offset by the gains from the forward foreign exchange contracts.

(1) During the three months ended November 30, 2020 and 2019, the Company recognized $ 72.9 million and $ 28.9 million, respectively, of foreign currency losses in cost of revenue, which are offset by the gains from the forward foreign exchange contracts.

Interest Rate Risk Management

1 unchanged sentence

Cash Flow Hedges

The following table presents the interest rate swaps outstanding as of May 31, 2020 , which have been designated as hedging instruments and accounted for as cash flow hedges:

The following table presents the interest rate swaps outstanding as of November 30, 2020, which have been designated as hedging instruments and accounted for as cash flow hedges:

Interest Rate Swap Summary

5 unchanged sentences

Anticipated Debt Issuance

Interest Rate Swaps

Debt obligations

Aug 24, 2018 and

Aug 24, 2020 and Aug 31, 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 and three-month LIBOR for borrowings under the Credit Facility and certain other debt obligations.

Of the amount hedged, $ 350.0 million expires on August 24, 2020 and $ 200.0 million expires on August 31, 2020.

November 2, 2020

July 31, 2024

(1) The contracts will be settled with the respective counterparties on a net basis at the expiration date for the forward interest rate swap.

(2) If the anticipated debt issuance occurs before July 31, 2024, the contracts will be terminated simultaneously with the debt issuance.

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 (the “2020 Extended Interest Rate Swaps”).

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”).

Accumulated Other Comprehensive Income

The following table sets forth the changes in accumulated other comprehensive (loss) income (“AOCI”), net of tax, by component for the nine months ended May 31, 2020 (in thousands):

Available for

Sale Securities

The following table sets forth the changes in accumulated other comprehensive income (loss) (“AOCI”), net of tax, by component for the three months ended November 30, 2020 (in thousands):

Balance as of August 31, 2020

Other comprehensive (loss) income before reclassifications

Other comprehensive income (loss) before reclassifications

Amounts reclassified from AOCI

Other comprehensive (loss) income (1)

Balance as of May 31, 2020

Other comprehensive income (loss) (1)

Balance as of November 30, 2020

(1) Amounts are net of tax, which are immaterial.

1 unchanged sentence

Three months ended

Nine months ended

Comprehensive Income Components

Financial Statement Line Item

Realized losses (gains) on derivative instruments:

November 30, 2020

November 30, 2019

Realized (gains) losses on derivative instruments:

Foreign exchange contracts

4 unchanged sentences

(1) The Company expects to reclassify $ 14.5 million into earnings during the next twelve months, which will primarily be classified as a component of cost of revenue.

Amounts are net of tax, which are immaterial for the three months and nine months ended May 31, 2020 and 2019 .

(2) Amounts are net of tax, which are immaterial for the three months ended November 30, 2020 and 2019.

Stockholders’ Equity

1 unchanged sentence

Three months ended

Nine months ended

November 30, 2020

November 30, 2019

Restricted stock units

Employee stock purchase plan

As of May 31, 2020 , the shares available to be issued under the 2011 Stock Award and Incentive Plan were 10,519,566 .

On October 15, 2020, the Company’s Board of Directors approved the proposed 2021 Equity Incentive Plan (the “2021 Plan”).

The 2021 Plan will replace the Company’s 2011 Stock Award and Incentive Plan, which terminated on October 21, 2020.

The proposed 2021 Plan will be voted on during the annual meeting of shareholders to be held on January 21, 2021.

Restricted Stock Units

5 unchanged sentences

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.

During the nine months ended May 31, 2020 and 2019 , the Company awarded approximately 1.1 million and 1.6 million time-based restricted stock units, respectively, 0.3 million and 0.4 million performance-based restricted stock units, respectively and 0.3 million and 0.4 million market-based restricted stock units, respectively.

The following represents the stock-based compensation information for the period indicated (in thousands):

Nine months ended

During both the three months ended November 30, 2020 and 2019, the Company awarded approximately 1.1 million time-based restricted stock units, 0.3 million performance-based restricted stock units and 0.3 million market-based restricted stock units, respectively.

The following represents the stock-based compensation information as of the period indicated (in thousands):

November 30, 2020

Unrecognized stock-based compensation expense—restricted stock units

3 unchanged sentences

Three months ended

Nine months ended

November 30, 2020

November 30, 2019

Common stock outstanding:

1 unchanged sentence

Shares issued upon exercise of stock options

Shares issued under employee stock purchase plan

Vesting of restricted stock

1 unchanged sentence

Treasury shares purchased (1)

( 1,474,464 )

( 2,620,277 )

Ending balances

(1) In September 2019, the Company’s Board of Directors 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 May 31, 2020 , 5.2 million shares had been repurchased for $ 188.9 million and $ 411.1 million remains available under the 2020 Share Repurchase Program.

As of November 30, 2020, 7.5 million shares had been repurchased for $ 263.9 million and $ 336.1 million remains available under the 2020 Share Repurchase Program.

Concentration of Risk and Segment Data

1 unchanged sentence

Sales of the Company’s products are concentrated among specific customers.

During the nine months ended May 31, 2020 , the Company’s five largest customers accounted for approximately 47 % of its net revenue and 72 customers accounted for approximately 90 % of its net revenue.

During the three months ended November 30, 2020, the Company’s five largest customers accounted for approximately 50 % of its net revenue and 68 customers accounted for approximately 90 % of its net revenue.

Sales to these customers were reported in the Electronics Manufacturing Services (“EMS”) and Diversified Manufacturing Services (“DMS”) operating segments.

4 unchanged sentences

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.

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 (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.

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, impairment on securities, 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 (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.

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 chief operating decision maker 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.

Customers within the automotive and transportation and smart home and appliances industries are now presented within the DMS segment.

Prior period disclosures are restated to reflect the realignment.

The following table presents the Company’s revenues disaggregated by segment (in thousands):

Three months ended

Timing of transfer

Point in time

Nine months ended

November 30, 2020

November 30, 2019

Timing of transfer

Point in time

The following table sets forth operating segment information (in thousands):

The following tables set forth operating segment information (in thousands):

Three months ended

Nine months ended

November 30, 2020

November 30, 2019

Segment income and reconciliation of income before income tax

5 unchanged sentences

Distressed customer charge

Business interruption and impairment charges, net (1)

Acquisition and integration charges

Impairment on securities

Other expense (net of periodic benefit cost)

2 unchanged sentences

Income before income tax

(1) Charges for the three and nine months ended May 31, 2020, relate to a flood that impacted our facility in Huangpu, China.

Charges, net of insurance proceeds of $ 2.9 million for the nine months ended May 31, 2019 , relate to business interruption and asset impairment costs associated with damage from Hurricane Maria, which impacted our operations in Cayey, Puerto Rico.

As of May 31, 2020 , the Company operated in 31 countries worldwide.

November 30, 2020

August 31, 2020

Other non-allocated assets

As of November 30, 2020, the Company operated 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):

The following table sets forth, for the periods indicated, foreign source revenue expressed as a percentage of net revenue:

Three months ended

Nine months ended

External net revenue:

November 30, 2020

November 30, 2019

Foreign source revenue

August 31, 2019

Long-lived assets:

Long-lived assets related to foreign operations

Restructuring, Severance and Related Charges

1 unchanged sentence

Three months ended

Nine months ended

May 31, 2020 (2)

May 31, 2019 (3)

May 31, 2020 (2)

May 31, 2019 (3)

November 30, 2020

November 30, 2019

Employee severance and benefit costs

1 unchanged sentence

Total restructuring, severance and related charges (1)

Includes $ 23.7 million and $ 7.6 million recorded in the EMS segment, $ 29.3 million and $ 0.0 million recorded in the DMS segment and $ 16.2 million and $ 1.7 million of non-allocated charges for the three months ended May 31, 2020 and 2019 , respectively.

Includes $ 55.8 million and $ 12.3 million recorded in the EMS segment, $ 69.0 million and $ 2.1 million recorded in the DMS segment and $ 19.2 million and $ 1.8 million of non-allocated charges for the nine months

ended May 31, 2020 and 2019 , respectively.

(1) Primarily relates to the 2020 Restructuring Plan, and includes $( 3.0 ) million and $ 17.4 million recorded in the EMS segment, $ 1.0 million and $ 25.2 million recorded in the DMS segment and $ 0.3 million and $ 2.7 million of non-allocated charges for the three months ended November 30, 2020 and 2019, respectively.

Except for asset write-off costs, all restructuring, severance and related charges are cash costs.

As the Company continues to optimize its cost structure and improve operational efficiencies, $ 52.3 million of employee severance and benefit costs was incurred in connection with a reduction in the worldwide workforce during the three and nine months ended May 31, 2020.

The Company’s liability associated with the worldwide workforce reduction is $ 50.9 million as of May 31, 2020.

The remaining amount primarily relates to the 2020 Restructuring Plan.

Primarily relates to the 2017 Restructuring Plan.

2020 Restructuring Plan

2 unchanged sentences

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.

The Company expects to recognize approximately $ 85.0 million in pre-tax restructuring and other related costs over the course of the Company’s 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.

The Company’s estimates for the charges discussed above exclude any potential income tax effects.

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 table below summarizes the Company’s liability activity, primarily associated with the 2020 Restructuring Plan

8 unchanged sentences

Cash payments

Balance as of May 31, 2020

Balance as of August 31, 2019 primarily relates to the 2017 Restructuring Plan.

Balance as of November 30, 2020

The Company’s liability associated with the worldwide workforce reduction is $ 27.5 million as of November 30, 2020.

Effective Income Tax Rate

1 unchanged sentence

Three months ended

Nine months ended

November 30, 2020

November 30, 2019

federal statutory income tax rate

Effective income tax rate

The effective income tax rate increased for the three months and nine months ended May 31, 2020 , compared to the three months and nine months ended May 31, 2019 , primarily due to:

(i) decreased income for the three months and nine months ended May 31, 2020, driven in part by increased restructuring charges with minimal related tax benefit;

(ii) a $ 21.2 million income tax expense associated with the re-measurement of deferred tax assets related to an extension of a non-U.S.

tax incentive recorded during the three months ended May 31, 2020;

and (iii) adjustments related to the Tax Cuts and Jobs Act of 2017 (the “Tax Act”) for the nine months ended May 31, 2019, including a $ 13.3 million income tax benefit recorded during the three months ended November 30, 2018.

The effective tax rate differed from the U.S.

federal statutory rate of 21.0% during the three months and nine months ended May 31, 2020 and 2019 , primarily due to:

(i) losses in tax jurisdictions with existing valuation allowances;

incentives granted to sites in Brazil, China, Malaysia, Singapore and Vietnam;

(iii) a $ 21.2 million income tax expense associated with the re-measurement of deferred tax assets related to an extension of a non-U.S.

tax incentive recorded during the three months ended May 31, 2020;

and (iv) adjustments to amounts previously recorded for the Tax Act for the nine months ended May 31, 2019 .

The effective income tax rate decreased for the three months ended November 30, 2020, compared to the three months ended November 30, 2019, primarily due to increased income for the three months ended November 30, 2020, driven in part by decreased restructuring charges in tax jurisdictions with minimal related income tax benefit.

The effective income tax rate differed from the U.S.

federal statutory income tax rate of 21.0% during the three months ended November 30, 2020 and 2019, primarily due to:

(i) losses in tax jurisdictions with existing valuation allowances and (ii) tax incentives granted to sites in Brazil, China, Malaysia, Singapore and Vietnam.

Earnings Per Share and Dividends

4 unchanged sentences

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 criteria have been met assuming the end of the reporting period represents the end of the performance period.

Performance-based restricted stock units are considered dilutive when the related performance criteria

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.

1 unchanged sentence

Three months ended

Nine months ended

November 30, 2020

November 30, 2019

Restricted stock units

Employee stock purchase plan

Stock appreciation rights

The following table sets forth cash dividends declared by the Company to common stockholders during the nine months ended May 31, 2020 and 2019 (in thousands, except for per share data):

The following table sets forth cash dividends declared by the Company to common stockholders during the three months ended November 30, 2020 and 2019 (in thousands, except for per share data):

Declaration Date

7 unchanged sentences

December 2, 2020

January 23, 2020

February 14, 2020

March 4, 2020

April 15, 2020

Fiscal Year 2020:

2 unchanged sentences

December 2, 2019

January 24, 2019

February 15, 2019

March 1, 2019

April 18, 2019

Business Acquisitions

1 unchanged sentence

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 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 preliminary aggregate purchase price paid for the third closing was approximately $ 111.8 million in cash, which remains subject to certain post-closing adjustments based on conditions within the Framework

For the third closing, total assets acquired of $ 199.7 million , including $ 83.2 million in contract assets, $ 35.1 million in inventory and $ 70.4 million in goodwill, and total liabilities assumed of $ 87.9 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 acquisition of the JJMD assets have been accounted for as separate business combinations for each closing using the acquisition method of accounting.

The Company is currently evaluating the fair values of the assets and liabilities related to the third closing of these business combinations.

On October 26, 2020, under the terms of the Framework Agreement, the Company completed the fourth closing of its acquisition of certain assets of JJMD.

The preliminary aggregate purchase price paid for the fourth closing was approximately $ 18.4 million in cash, which remains subject to certain post-closing adjustments based on conditions within the Framework Agreement.

Total assets acquired of $ 30.6 million and total liabilities assumed of $ 12.2 million were recorded at their estimated fair values as of the acquisition date.

The acquisition of the JJMD assets was accounted for as a business combination using the acquisition method of accounting.

The Company is currently evaluating the fair value of the assets and liabilities related to the fourth closing.

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 Company’s condensed 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 results of operations were included in the Company’s condensed consolidated financial results beginning on October 26, 2020 for the fourth closing.

The Company believes it is impracticable to provide pro forma information for the acquisition of the JJMD assets.

4 unchanged sentences

Fair Value Hierarchy

November 30, 2020

August 31, 2020

6 unchanged sentences

Derivatives not designated as hedging instruments (Note 8)

Other assets:

Senior Non-Convertible Preferred Stock

Accrued expenses:

3 unchanged sentences

Interest rate swaps:

Derivatives designated as hedging instruments (Note 9)

Forward interest rate swaps:

Derivatives designated as hedging instruments (Note 9)

Derivatives not designated as hedging instruments (Note 8)

Extended interest rate swap not designated as a hedging instrument (Note 8)

Other liabilities:

Interest rate swaps:

Derivatives not designated as hedging instruments (Note 8)

Extended interest rate swap not designated as a hedging instrument (Note 8)

Forward interest rate swaps:

2 unchanged sentences

(2) 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.

The 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 May 31, 2020 and August 31, 2019 , the unobservable inputs have an immaterial impact on the fair value calculation.

(3) 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.

(4) 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 of 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):

November 30, 2020

August 31, 2020

3 unchanged sentences

Assets held for sale (1)

The fair value of assets held for sale exceeds the carrying value.

As a result, no impairment has been recorded for assets held for sale as of May 31, 2020 .

(1) The fair value of assets held for sale exceeds the carrying value for $ 30.1 million of assets held for sale.

For $ 36.1 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

4 unchanged sentences

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:

November 30, 2020

August 31, 2020

11 unchanged sentences

(2) This fair value estimate is based on the Company’s indicative borrowing cost derived from discounted cash flows.

Refer to Note 8 - “Postretirement and Other Employee Benefits” for disclosure surrounding the fair value of the Company’s pension plan assets.

Commitments and Contingencies

3 unchanged sentences

Recently Adopted Accounting Guidance

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 the first quarter of fiscal year 2020.

Refer to Note 4 - “Leases” to the Condensed 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 the first quarter of fiscal year 2020.

The guidance was applied using a modified retrospective approach.

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.

The Company adopted the guidance during the first quarter of fiscal year 2021.

The adoption of this standard did not have a material impact on the Company’s Consolidated Financial Statements.

however, the impact on future periods will depend on the facts and circumstances of future transactions.

Recently Issued Accounting Guidance

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 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 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.

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.

The adoption of this standard did not have a material impact on the Company’s Consolidated Financial Statements.

Recently Issued Accounting Guidance

Recently issued accounting guidance is not applicable or did not have, or is not expected to have, a material impact to the Company.

AND SUBSIDIARIES

References in this report to “the Company,” “Jabil,” “we,” “our,” or “us” mean Jabil Inc.

together with its subsidiaries, except where the context otherwise requires.

This Quarterly Report on Form 10-Q contains certain statements that are, or may be deemed to be, forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

These forward-looking statements (such as when we describe what “will,” “may,” or “should” occur, what we “plan,” “intend,” “estimate,” “believe,” “expect” or “anticipate” will occur, and other similar statements).We make certain assumptions when making forward-looking statements, any of which could prove inaccurate, including assumptions about our future operating results and business plans.

Therefore, we can give no assurance that the results implied by these forward-looking statements will be realized.

Furthermore, the inclusion of forward-looking information should not be regarded as a representation by the Company or any other person that future events, plans or expectations contemplated by the Company will be achieved.

The following important factors, among others, could affect future results and events, causing those results and events to differ materially from those expressed or implied in our forward-looking statements:

the scope and duration of the COVID-19 pandemic and its impact on global economic systems, our employees, sites, operations, customers, and supply chain, managing growth effectively;

This Quarterly Report on Form 10-Q contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, that involve risks and uncertainties.

Many of the forward-looking statements are located in Item 2 of this Form 10-Q under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Forward-looking statements provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact.

Forward-looking statements can also be identified by words such as “future,” “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “will,” “would,” “should,” “could,” “can,” “may,” and similar terms.

Forward-looking statements are not guarantees of future performance and the Company’s actual results may differ significantly from the results discussed in the forward-looking statements.

Achievement of anticipated results is subject to substantial risks, uncertainties and inaccurate assumptions.

Should known or unknown risks or uncertainties materialize, or should underlying assumptions prove inaccurate, actual results could vary materially from past results and those anticipated, estimated or projected.

You should bear this in mind as you consider forward-looking statements, and you are cautioned not to put undue reliance on forward-looking statements.

We undertake no obligation to publicly update forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law or by the rules and regulations of the SEC.

You are advised, however, to consult any further disclosures we make on related subjects.

Factors that might cause such differences include, but are not limited to, those discussed in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the year ended August 31, 2020 such as, the scope and duration of the COVID-19 outbreak and its impact on our operations, sites, customers and supply chain;

managing growth effectively;

our dependence on a limited number of customers;

competitive challenges affecting our customers;

managing rapid declines in customer demand and other related customer challenges that may occur;

managing rapid declines or increases in customer demand and other related customer challenges that may occur;

risks arising from relationships with emerging companies;

changes in technology;

the occurrence of, success and expected financial results from, product ramps;

our ability to maintain and improve costs, quality and delivery for our customers;

our ability to introduce new business models or programs requiring implementation of new competencies;

transportation issues;

our ability to maintain our engineering, technological and manufacturing expertise;

retaining key personnel;

3 unchanged sentences

risk arising from our restructuring activities;

performance in the markets in which we operate;

and adverse changes in political conditions, in the U.S.

and internationally, including, among others, adverse changes in tax laws and rates and our ability to estimate and manage their impact.

For a further list and description of various risks, factors and uncertainties that could cause future results or events to differ materially from those expressed or implied in our forward-looking statements, see the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections contained in our Annual Report on Form 10-K for the fiscal year ended August 31, 2019 , any subsequent reports on Form 10-Q and Form 8-K, and other filings we make with the Securities and Exchange Commission (“SEC”).

Given these risks and uncertainties, the reader should not place undue reliance on these forward-looking statements.

All forward-looking statements included in this Quarterly Report on Form 10-Q are made only as of the date of this Quarterly Report on Form 10-Q, and we do not undertake any obligation to publicly update or correct any forward-looking statements to reflect events or circumstances that subsequently occur, or of which we hereafter become aware.

You should read this document completely and with the understanding that our actual future results or events may be materially different from what we expect.

All forward-looking statements attributable to us are expressly qualified by these cautionary statements.

issues involving our information systems, including security issues;

regulatory risks (including the expense of complying, or failing to comply, with applicable regulations;

risk arising from design or manufacturing defects;

and intellectual property risk);

financial risks (including customers or suppliers who become financially troubled;

turmoil in financial markets;

credit rating risks;

risks of exposure to debt;

currency fluctuations;

energy prices;

and asset impairment);

changes in financial accounting standards or policies;

and risk of natural disaster, climate change or other global events.

References in this report to “the Company,” “Jabil,” “we,” “our,” or “us” mean Jabil Inc.

together with its subsidiaries, except where the context otherwise requires.

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-Q

Item 1. Financial Statements