What changed in this filing

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Item 1. Financial Statements

2022-04-01 compared with 2022-01-07 · 158 added, 94 removed, 476 unchanged (35% of the section changed)

3 unchanged sentences

(in millions, except for share data)

November 30, 2021

February 28, 2022

August 31, 2021

6 unchanged sentences

Total current assets

Property, plant and equipment, net of accumulated depreciation of $ 5,189 as of November 30, 2021 and $ 5,033 as of August 31, 2021

Property, plant and equipment, net of accumulated depreciation of $ 5,328 as of February 28, 2022 and $ 5,033 as of August 31, 2021

Operating lease right-of-use asset

Intangible assets, net of accumulated amortization of $ 449 as of November 30, 2021 and $ 442 as of August 31, 2021

Intangible assets, net of accumulated amortization of $ 457 as of February 28, 2022 and $ 442 as of August 31, 2021

Deferred income taxes

17 unchanged sentences

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

269,843,564 and 267,418,092 shares issued and 144,166,009 and 144,496,077 shares outstanding as of November 30, 2021 and August 31, 2021, respectively

270,392,290 and 267,418,092 shares issued and 142,392,135 and 144,496,077 shares outstanding as of February 28, 2022 and August 31, 2021, respectively

Additional paid-in capital

1 unchanged sentence

Accumulated other comprehensive loss

Treasury stock at cost, 125,677,555 and 122,922,015 shares as of November 30, 2021 and August 31, 2021, respectively

Treasury stock at cost, 128,000,155 and 122,922,015 shares as of February 28, 2022 and August 31, 2021, respectively

Total Jabil Inc.

7 unchanged sentences

Three months ended

November 30, 2021

November 30, 2020

Six months ended

February 28, 2022

February 28, 2021

February 28, 2022

February 28, 2021

Cost of revenue

5 unchanged sentences

Operating income

Other expense (income)

Interest income

11 unchanged sentences

Three months ended

November 30, 2021

November 30, 2020

Other comprehensive (loss) income:

Six months ended

February 28, 2022

February 28, 2021

February 28, 2022

February 28, 2021

Other comprehensive income:

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 realized and included in net income

Total change in derivative instruments

1 unchanged sentence

Prior service credit

Total other comprehensive (loss) income

Total other comprehensive income

Comprehensive income

6 unchanged sentences

Three months ended

November 30, 2021

November 30, 2020

Six months ended

February 28, 2022

February 28, 2021

February 28, 2022

February 28, 2021

Total stockholders' equity, beginning balances

2 unchanged sentences

Beginning balances

Shares issued under employee stock purchase plan

Recognition of stock-based compensation

17 unchanged sentences

Net income attributable to noncontrolling interests

Declared dividends to noncontrolling interests

Ending balances

4 unchanged sentences

(in millions)

Three months ended

November 30, 2021

November 30, 2020

Cash flows (used in) provided by operating activities:

Six months ended

February 28, 2022

February 28, 2021

Cash flows provided by operating activities:

Depreciation, amortization, and other, net

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

Net cash (used in) provided by operating activities

Net cash provided by operating activities

Cash flows used in investing activities:

8 unchanged sentences

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

17 unchanged sentences

(the “Company”) for the fiscal year ended August 31, 2021.

Results for the three months ended November 30, 2021 are not necessarily an indication of the results that may be expected for the full fiscal year ending August 31, 2022.

Results for the six months ended February 28, 2022 are not necessarily an indication of the results that may be expected for the full fiscal year ending August 31, 2022.

Trade Accounts Receivable Sale Programs

1 unchanged sentence

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.

As of November 30, 2021, the Company may elect to sell receivables and the unaffiliated financial institution may elect to purchase specific accounts receivable at any one time up to a:

As of February 28, 2022, the Company may elect to sell receivables and the unaffiliated financial institution may elect to purchase specific accounts receivable at any one time up to a:

(i) maximum aggregate amount available of $ 2.0 billion under nine trade accounts receivable sale programs, (ii) maximum amount available of 400 million CNY under one trade accounts receivable sale program and (iii) maximum amount available of 100 million CHF under one trade accounts receivable sale program.

1 unchanged sentence

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 the trade accounts receivable sale programs recognized during the three months ended November 30, 2021 and 2020 were not material.

Servicing fees related to the trade accounts receivable sale programs recognized during the three months and six months ended February 28, 2022 and 2021 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.

1 unchanged sentence

Three months ended

November 30, 2021

November 30, 2020

Six months ended

February 28, 2022

February 28, 2021

February 28, 2022

February 28, 2021

Trade accounts receivable sold (1)

4 unchanged sentences

Inventories consist of the following (in millions):

November 30, 2021

February 28, 2022

August 31, 2021

5 unchanged sentences

During fiscal year 2022, the Company entered into new operating and finance leases.

The future minimum lease payments under these new leases as of November 30, 2021 were as follows (in millions):

The future minimum lease payments under these new leases as of February 28, 2022 were as follows (in millions):

Payments due by period (in millions)

5 unchanged sentences

Notes Payable and Long-Term Debt

Notes payable and long-term debt outstanding as of November 30, 2021 and August 31, 2021 are summarized below (in millions):

Notes payable and long-term debt outstanding as of February 28, 2022 and August 31, 2021 are summarized below (in millions):

Maturity Date

November 30, 2021

February 28, 2022

August 31, 2021

11 unchanged sentences

Notes payable and long-term debt, less current installments

(1) As of November 30, 2021, the Company has $ 3.8 billion in available unused borrowing capacity under its revolving credit facilities.

(1) As of February 28, 2022, the Company has $ 3.8 billion in available unused borrowing capacity under its revolving credit facilities.

The senior unsecured credit agreement dated as of January 22, 2020 and amended on April 28, 2021 (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.

The Company has a borrowing capacity of up to $ 3.2 billion under its commercial paper program, which was increased from $ 1.8 billion on February 18, 2022.

Debt Covenants

3 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 %, 3.000 % or 1.700 % Senior Notes upon a change of control.

As of November 30, 2021 and August 31, 2021, the Company was in compliance with its debt covenants.

As of February 28, 2022 and August 31, 2021, the Company was in compliance with its debt covenants.

Refer to Note 15 – “Fair Value Measurements” for the estimated fair values of the Company’s notes payable and long-term debt.

Asset-Backed Securitization Program

Certain Jabil entities participating in the global asset-backed securitization program continuously sell designated pools of trade accounts receivable to a special purpose entity, which in turn sells certain of the receivables at a discount to conduits administered by an unaffiliated financial institution on a monthly basis.

In addition, a foreign entity participating in the global

asset-backed securitization program sells certain receivables at a discount to conduits administered by an unaffiliated financial institution on a daily basis.

administered by an unaffiliated financial institution on a monthly basis.

In addition, a foreign entity participating in the global asset-backed securitization program sells certain receivables at a discount to conduits administered by an unaffiliated financial institution on a daily basis.

The Company terminated the foreign asset-backed securitization program on June 28, 2021.

The Company continues servicing the receivables sold and in exchange receives a servicing fee under the global asset-backed securitization program.

Servicing fees related to the asset-backed securitization programs recognized during the three months ended November 30, 2021 and 2020 were not material.

Servicing fees related to the asset-backed securitization programs recognized during the three months and six months ended February 28, 2022 and 2021 were not material.

The special purpose entity in the global 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 up to the maximum amount of net cash proceeds available under the domestic, or U.S., portion of the global asset-backed securitization program are pledged as collateral to the unaffiliated financial institution as of November 30, 2021.

The global asset-backed securitization program expires on November 25, 2024 and the maximum amount of net cash proceeds available at any one time is $ 600 million.

As of November 30, 2021, the Company had no available liquidity under its global asset-backed securitization program.

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

As of February 28, 2022, the Company had no available liquidity under its global asset-backed securitization program.

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

Three months ended

November 30, 2021

November 30, 2020 (4)

Six months ended

February 28, 2022

February 28, 2021 (4)

February 28, 2022

February 28, 2021 (4)

Trade accounts receivable sold (1)

6 unchanged sentences

The global asset-backed securitization program requires compliance with several covenants including compliance with the interest ratio and debt to EBITDA ratio of the Credit Facility.

As of November 30, 2021 and August 31, 2021, the Company was in compliance with all covenants under the global asset-backed securitization program.

As of February 28, 2022 and August 31, 2021, the Company was in compliance with all covenants under the global asset-backed securitization program.

Accrued Expenses

Accrued expenses consist of the following (in millions):

November 30, 2021

February 28, 2022

August 31, 2021

4 unchanged sentences

Accrued expenses

(1) Revenue recognized during the three months ended November 30, 2021 and 2020 that was included in the contract liability balance as of August 31, 2021 and 2020 was $ 98 million and $ 170 million , respectively.

(1) Revenue recognized during the six months ended February 28, 2022 and 2021 that was included in the contract liability balance as of August 31, 2021 and 2020 was $ 196 million and $ 233 million , respectively.

Postretirement and Other Employee Benefits

Net Periodic Benefit Cost

The following table provides information about the net periodic benefit cost for all plans for the three months ended November 30, 2021 and 2020 (in millions):

The following table provides information about the net periodic benefit cost for all plans for the three months and six months ended February 28, 2022 and 2021 (in millions):

Three months ended

November 30, 2021

November 30, 2020

Six months ended

February 28, 2022

February 28, 2021

February 28, 2022

February 28, 2021

Service cost (1)

17 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 $ 1.3 billion and $ 1.5 billion as of November 30, 2021 and August 31, 2021, respectively.

A hedging relationship existed with an aggregate notional amount outstanding of $ 1.2 billion and $ 1.5 billion as of February 28, 2022 and August 31, 2021, 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 December 1, 2021 and November 30, 2022.

The anticipated foreign currency denominated revenues and expenses being hedged are expected to occur between March 1, 2022 and February 28, 2023.

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 November 30, 2021 and August 31, 2021, was $ 3.5 billion and $ 3.6 billion, respectively.

The aggregate notional amount of these outstanding contracts as of February 28, 2022 and August 31, 2021, was $ 3.0 billion and $ 3.6 billion, respectively.

Refer to Note 15 – “Fair Value Measurements” for the fair values and classification of the Company’s derivative instruments.

The gains and losses recognized in earnings due to 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 gains and losses recognized in earnings due to amounts 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 gains from forward contracts recorded in the Condensed Consolidated Statements of Operations for the periods indicated (in millions):

3 unchanged sentences

Three months ended

November 30, 2021

November 30, 2020

Six months ended

February 28, 2022

February 28, 2021

February 28, 2022

February 28, 2021

Forward foreign exchange contracts (1)

Cost of revenue

(1) For the three months ended November 30, 2021 and 2020, the Company recognized $ 27 million and $ 73 million, respectively, of foreign currency losses in cost of revenue, which are offset by the gains from the forward foreign exchange contracts.

(1) For the three months and six months ended February 28, 2022, the Company recognized $ 9 million and $ 37 million, respectively, of foreign currency losses in cost of revenue, which are offset by the gains from the forward foreign exchange contracts.

For the three months and six months ended February 28, 2021, the Company recognized $ 26

million and $ 99 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

The Company periodically enters into interest rate swaps to manage interest rate risk associated with the Company’s borrowings.

The Company periodically enters into interest rate swaps to manage interest rate risk associated with the Company’s borrowings or anticipated debt issuances.

Cash Flow Hedges

The following table presents the interest rate swaps outstanding as of November 30, 2021, 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 February 28, 2022, which have been designated as hedging instruments and are accounted for as cash flow hedges:

Interest Rate Swap Summary

9 unchanged sentences

July 31, 2024

(1) During March 2022, the Company entered into new cash flow hedges.

These cash flow hedges have an aggregate notional amount totaling $ 170 million and are related to an anticipated debt issuance.

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

2 unchanged sentences

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 fair value of the 2020 Extended Interest Rate Swaps and Offsetting Interest Rate Swaps is recorded in the Consolidated Statements of Income through the maturity date as an adjustment to interest expense.

The change in fair value of the 2020 Extended Interest Rate Swaps and Offsetting Interest Rate Swaps was recorded in the Condensed Consolidated Statements of Operations through the maturity date of February 15, 2022, as an adjustment to interest expense.

Accumulated Other Comprehensive Income

The following table sets forth the changes in accumulated other comprehensive income (“AOCI”), net of tax, by component for the three months ended November 30, 2021 (in millions):

The following table sets forth the changes in accumulated other comprehensive income (“AOCI”), net of tax, by component for the six months ended February 28, 2022 (in millions):

Service (Cost) Credit

3 unchanged sentences

Other comprehensive (loss) income (1)

Balance as of November 30, 2021

Balance as of February 28, 2022

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

1 unchanged sentence

Three months ended

Six months ended

Comprehensive Income Components

Financial Statement Line Item

November 30, 2021

November 30, 2020

Realized losses (gains) on derivative instruments:

February 28, 2022

February 28, 2021

February 28, 2022

February 28, 2021

Realized (gains) losses on derivative instruments:

Foreign exchange contracts

8 unchanged sentences

Refer to Note 8 – “Postretirement and Other Employee Benefits” for additional information.

(3) Amounts are net of tax, which are immaterial for the three months ended November 30, 2021 and 2020.

(3) Amounts are net of tax, which are immaterial for the three months and six months ended February 28, 2022 and 2021.

Stockholders’ Equity

1 unchanged sentence

Three months ended

November 30, 2021

November 30, 2020

Six months ended

February 28, 2022

February 28, 2021

February 28, 2022

February 28, 2021

Restricted stock units

Employee stock purchase plan

As of November 30, 2021, the shares available to be issued under the 2021 Equity Incentive Plan w ere 9,852,269 .

As of February 28, 2022, the shares available to be issued under the 2021 Equity Incentive Plan w ere 9,894,144 .

Restricted Stock Units

5 unchanged sentences

The market-based restricted stock units ha ve 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 three months ended November 30, 2021 and 2020, the Company awarded approximately 0.7 million and 1.1 million time-based restricted stock units, respectively, 0.2 million and 0.3 million performance-based restricted stock units, respectively, and 0.2 million and 0.3 million market-based restricted stock units, respectively.

During the six months ended February 28, 2022 and 2021, the Company awarded approximately 0.7 million and 1.2 million time-based restricted stock units, respectively, 0.2 million and 0.4 million performance-based restricted stock units, respectively, and 0.2 million and 0.3 million market-based restricted stock units, respectively.

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

November 30, 2021

February 28, 2022

Unrecognized stock-based compensation expense—restricted stock units

3 unchanged sentences

Three months ended

November 30, 2021

November 30, 2020

Six months ended

February 28, 2022

February 28, 2021

February 28, 2022

February 28, 2021

Common stock outstanding:

Beginning balances

Shares issued under employee stock purchase plan

Vesting of restricted stock

3 unchanged sentences

( 1,891,798 )

( 4,377,866 )

( 3,366,262 )

Ending balances

(1) In July 2021, the Board of Directors approved an authorization for the repurchase of up to $ 1.0 billion of the Company’s common stock (the “2022 Share Repurchase Program”).

As of November 30, 2021, 2.8 million shares had been repurchased for $ 169 million and $ 831 million remains available under the 2022 Share Repurchase Program.

As of February 28, 2022, 5.1 million shares had been repurchased for $ 314 million and $ 686 million remains available under the 2022 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 three months ended November 30, 2021, the Company’s five largest customers accounted for approximately 49 % of its net revenue and 74 customers accounted for approximately 90 % of its net revenue.

During the six months ended February 28, 2022, the Company’s five largest customers accounted for approximately 47 % of its net revenue and 78 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.

8 unchanged sentences

Three months ended

November 30, 2021

November 30, 2020

Six months ended

February 28, 2022

February 28, 2021

February 28, 2022

February 28, 2021

Segment income and reconciliation of income before income tax

4 unchanged sentences

Restructuring, severance and related charges

Business interruption and impairment charges, net

Acquisition and integration charges

5 unchanged sentences

Three months ended

November 30, 2021

November 30, 2020

February 28, 2022

February 28, 2021

Timing of transfer

Point in time

Six months ended

February 28, 2022

February 28, 2021

Timing of transfer

Point in time

The Company operates in more than 30 countries worldwide.

2 unchanged sentences

Three months ended

November 30, 2021

November 30, 2020

Six months ended

February 28, 2022

February 28, 2021

February 28, 2022

February 28, 2021

Foreign source revenue

2 unchanged sentences

Three months ended

November 30, 2021

November 30, 2020

Six months ended

February 28, 2022

February 28, 2021

February 28, 2022

February 28, 2021

federal statutory income tax rate

Effective income tax rate

The effective income tax rate decreased for the three months ended November 30, 2021, compared to the three months ended November 30, 2020, primarily due to decreased losses in tax jurisdictions with existing valuation allowances for the three months ended November 30, 2021.

The effective income tax rate decreased for the three months and six months ended February 28, 2022, compared to the three months and six months ended February 28, 2021, primarily due to decreased losses in tax jurisdictions with existing valuation allowances for the three months and six months ended February 28, 2022.

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, 2021 and 2020, primarily due to:

federal statutory income tax rate of 21.0% during the three months and six months ended February 28, 2022 and 2021, primarily due to:

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

9 unchanged sentences

Three months ended

November 30, 2021

November 30, 2020

Six months ended

February 28, 2022

February 28, 2021

February 28, 2022

February 28, 2021

Restricted stock units

The following table sets forth cash dividends declared by the Company to common stockholders during the three months ended November 30, 2021 and 2020 (in millions, except for per share data):

Employee stock purchase plan

The following table sets forth cash dividends declared by the Company to common stockholders during the six months ended February 28, 2022 and 2021 (in millions, except for per share data):

Declaration Date

7 unchanged sentences

December 1, 2021

January 20, 2022

February 15, 2022

March 2, 2022

Fiscal Year 2021:

2 unchanged sentences

December 2, 2020

January 21, 2021

February 15, 2021

March 2, 2021

Fair Value Measurements

3 unchanged sentences

Fair Value Hierarchy

November 30, 2021

February 28, 2022

August 31, 2021

23 unchanged sentences

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.

(4) The 2020 Extended Interest Rate Swaps were considered a hybrid instrument and the Company elected the fair value option for reporting.

Fair value measurements were based on the contractual terms of the contract and used observable market-based inputs.

The interest rate swaps were 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:

November 30, 2021

February 28, 2022

August 31, 2021

3 unchanged sentences

Assets held for sale (1)

(1) The fair value of assets held for sale exceeds the carrying value for $ 30 million of assets held for sale.

For $ 31 million of assets held for sale, the carrying value approximates the fair value with the asset value measured using Level 2 inputs.

(1) During the three months ended February 28, 2022, the Company sold assets held for sale with a carrying value of $ 30 million.

As of February 28, 2022 and August 31, 2021, the carrying value of $ 31 million of assets held for sale approximates the fair value with the asset values 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, 2021

February 28, 2022

August 31, 2021

29 unchanged sentences

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, 2021 such as, the scope and duration of the COVID-19 outbreak and its impact on our operations, sites, customers and supply chain;

Factors that might cause such differences include, but are not limited to, those discussed in Part II, Item 1A to this Quarterly Report on Form 10-Q and in Part 1, Item 1A of the Company’s Annual Report on Form 10-K for the year ended August 31, 2021 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;

28 unchanged sentences

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