What changed in this filing

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Item 1. Financial Statements

2023-01-06 compared with 2022-07-01 · 123 added, 137 removed, 436 unchanged (37% of the section changed)

3 unchanged sentences

(in millions, except for share data)

November 30, 2022

August 31, 2022

1 unchanged sentence

Cash and cash equivalents

Accounts receivable, net of allowance for doubtful accounts

Accounts receivable, net of allowance for credit losses

Contract assets

2 unchanged sentences

Total current assets

Property, plant and equipment, net of accumulated depreciation of $ 5,482 as of May 31, 2022 and $ 5,033 as of August 31, 2021

Property, plant and equipment, net of accumulated depreciation of $ 5,812 as of November 30, 2022 and $ 5,624 as of August 31, 2022

Operating lease right-of-use asset

Intangible assets, net of accumulated amortization of $ 464 as of May 31, 2022 and $ 442 as of August 31, 2021

Intangible assets, net of accumulated amortization of $ 480 as of November 30, 2022 and $ 471 as of August 31, 2022

Deferred income taxes

17 unchanged sentences

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

270,407,585 and 267,418,092 shares issued and 138,851,189 and 144,496,077 shares outstanding as of May 31, 2022 and August 31, 2021, respectively

272,753,393 and 270,891,715 shares issued and 134,231,300 and 135,493,980 shares outstanding as of November 30, 2022 and August 31, 2022, respectively

Additional paid-in capital

1 unchanged sentence

Accumulated other comprehensive loss

Treasury stock at cost, 131,556,396 and 122,922,015 shares as of May 31, 2022 and August 31, 2021, respectively

Treasury stock at cost, 138,522,093 and 135,397,735 shares as of November 30, 2022 and August 31, 2022, respectively

Total Jabil Inc.

7 unchanged sentences

Three months ended

Nine months ended

November 30, 2022

November 30, 2021

Cost of revenue

5 unchanged sentences

Operating income

Loss on debt extinguishment

Gain on securities

Other expense (income)

Other expense

Interest income

11 unchanged sentences

Three months ended

Nine months ended

Other comprehensive income:

November 30, 2022

November 30, 2021

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 losses realized and included in net income

Total change in derivative instruments

1 unchanged sentence

Prior service credit

Total other comprehensive income

Total other comprehensive income (loss)

Comprehensive income

6 unchanged sentences

Three months ended

Nine months ended

November 30, 2022

November 30, 2021

Total stockholders' equity, beginning balances

2 unchanged sentences

Beginning balances

Shares issued under employee stock purchase plan

Purchase of noncontrolling interest

Recognition of stock-based compensation

5 unchanged sentences

Ending balances

Accumulated other comprehensive (loss) income:

Accumulated other comprehensive loss:

Beginning balances

Other comprehensive income

Other comprehensive income (loss)

Ending balances

7 unchanged sentences

Net income attributable to noncontrolling interests

Purchase of noncontrolling interest

Declared dividends to noncontrolling interests

Ending balances

4 unchanged sentences

(in millions)

Nine months ended

Cash flows provided by operating activities:

Three months ended

November 30, 2022

November 30, 2021

Cash flows provided by (used in) operating activities:

Depreciation, amortization, and other, net

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

Net cash provided by operating activities

Net cash provided by (used in) operating activities

Cash flows used in investing activities:

1 unchanged sentence

Proceeds and advances from sale of property, plant and equipment

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

Net cash used in investing activities

4 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

14 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 “Company”) has made certain reclassification adjustments to conform prior periods’ Condensed Consolidated Financial Statements to the current presentation.

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 Jabil Inc.

(the “Company”) for the fiscal year ended August 31, 2022.

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

Results for the three months ended November 30, 2022 are not necessarily an indication of the results that may be expected for the full fiscal year ending August 31, 2023.

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 May 31, 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.

As of November 30, 2022, the Company may elect to sell receivables and the unaffiliated financial institutions may elect to purchase specific accounts receivable at any one time up to a:

(i) maximum aggregate amount available of $ 2.0 billion under eight 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.

The trade accounts receivable sale programs expire on various dates through 2025.

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 and nine months ended May 31, 2022 and 2021 were not material.

Servicing fees related to the trade accounts receivable sale programs recognized during the three months ended November 30, 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

Nine months ended

November 30, 2022

November 30, 2021

Trade accounts receivable sold (1)

4 unchanged sentences

Inventories consist of the following (in millions):

November 30, 2022

August 31, 2022

5 unchanged sentences

During fiscal year 2023, the Company entered into new operating and finance leases.

The future minimum lease payments under these new leases as of May 31, 2022 were as follows (in millions):

The future minimum lease payments under these new leases as of November 30, 2022 were as follows (in millions):

Payments due by period

5 unchanged sentences

Notes Payable and Long-Term Debt

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

Notes payable and long-term debt outstanding as of November 30, 2022 and August 31, 2022 are summarized below (in millions):

Maturity Date

November 30, 2022

August 31, 2022

5 unchanged sentences

4.250 % Senior Notes

4.250 % Senior Notes (1)

Borrowings under credit facilities (1)

4 unchanged sentences

Notes payable and long-term debt, less current installments

(1) On May 4, 2022, the Company issued $ 500 million of registered 4.250 % Senior Notes due 2027 (the “Green Bonds” or the “ 4.250 % Senior Notes”).

On May 31, 2022, the net proceeds from the offering were used to redeem the Company’s 4.700 % Senior Notes due in 2022 and pay the applicable “make-whole” premium and accrued interest.

In addition, the Company intends to allocate an amount equal to the net proceeds from this offering to finance or refinance eligible expenditures under the Company’s new green financing framework.

(2) As of May 31, 2022, the Company has $ 3.8 billion in available unused borrowing capacity under its revolving credit facilities.

(1) As of November 30, 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 $ 3.2 billion under its commercial paper program, which was increased from $ 1.8 billion on February 18, 2022.

The Company has a borrowing capacity of up to $ 3.2 billion under its commercial paper program.

Debt Covenants

3 unchanged sentences

The Company is also subject to certain covenants requiring the Company to offer to repurchase the 4.900 %, 3.950 %, 3.600 %, 3.000 %, 1.700 % or 4.250 % Senior Notes upon a change of control.

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

As of November 30, 2022 and August 31, 2022, 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.

1 unchanged sentence

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.

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

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 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 and nine months ended May 31, 2022 and 2021 were not material.

Servicing fees related to the global asset-backed securitization program recognized during the three months ended November 30, 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 May 31, 2022.

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 May 31, 2022, the Company had no available liquidity under its global asset-backed securitization program.

As of November 30, 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

Nine months ended

May 31, 2021 (4)

November 30, 2022

November 30, 2021

Trade accounts receivable sold (1)

4 unchanged sentences

(3) Recorded to other expense within the Condensed Consolidated Statements of Operations.

(4) Activity includes the foreign asset-backed securitization program which terminated on June 28, 2021.

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

As of November 30, 2022 and August 31, 2022, 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, 2022

August 31, 2022

4 unchanged sentences

Accrued expenses

(1) Revenue recognized during the nine months ended May 31, 2022 and 2021 that was included in the contract liability balance as of August 31, 2021 and 2020 was $ 269 million and $ 306 million , respectively.

(1) Revenue recognized during the three months ended November 30, 2022 and 2021 that was included in the contract liability balance as of August 31, 2022 and 2021 was $ 139 million and $ 98 million , respectively.

Postretirement and Other Employee Benefits

Net Periodic Benefit Cost

The following table provides information about the net periodic benefit cost (credit) for all plans for the three months and nine months ended May 31, 2022 and 2021 (in millions):

The following table provides information about the net periodic benefit cost for all plans for the three months ended November 30, 2022 and 2021 (in millions):

Three months ended

Nine months ended

November 30, 2022

November 30, 2021

Service cost (1)

4 unchanged sentences

Amortization of prior service cost (2)

Net periodic benefit cost (credit)

Net periodic benefit cost

(1) Service cost is recognized in cost of revenue in the Condensed Consolidated Statement of Operations.

10 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 May 31, 2022 and August 31, 2021, respectively.

A hedging relationship existed with an aggregate notional amount outstanding of $ 1.1 billion and $ 1.4 billion as of November 30, 2022 and August 31, 2022, 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, 2022 and May 31, 2023.

The anticipated foreign currency denominated revenues and expenses being hedged are expected to occur between December 1, 2022 and November 30, 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 May 31, 2022 and August 31, 2021, was $ 3.1 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 aggregate notional amount of these outstanding contracts as of November 30, 2022 and August 31, 2022, was $ 3.5 billion and $ 3.4 billion, respectively.

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.

In addition, the Company has entered into forward foreign currency exchange contracts to hedge a portion of its net investment in foreign currency denominated operations, which are designated as net investment hedges.

The net investment hedges have an aggregate notional amount outstanding of $ 0.1 billion and $ 0.0 billion as of November 30, 2022 and August 31, 2022, respectively, and are expected to mature in August 2023.

The effective portion of the gain or loss on net investment hedges is reported in OCI to offset the change in the carrying value of the net investment being hedged until the complete or substantially complete liquidation of the hedged foreign operation.

The excluded components for the net investment hedges are not material and are recognized in interest expense.

Refer to Note 16 – “Fair Value Measurements” for the fair values and classification of the Company’s derivative instruments.

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

3 unchanged sentences

Three months ended

Nine months ended

November 30, 2022

November 30, 2021

Forward foreign exchange contracts (1)

Cost of revenue

(1) For the three months and nine months ended May 31, 2022, the Company recognized $ 64 million and $ 27 million, respectively, of foreign currency gains in cost of revenue, which are offset by the losses from the forward foreign exchange contracts.

For the three months and nine months ended May 31, 2021, the Company recognized $ 22 million and $ 121 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 ended November 30, 2022, the Company recognized $ 49 million of foreign currency gains in cost of revenue, which are offset by the losses from the forward foreign exchange contracts.

For the three months ended November 30, 2021, the Company recognized $ 27 million 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, 2022, which have been designated as hedging instruments and are accounted for as cash flow hedges:

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

Interest Rate Swap Summary

Hedged Interest Rate Payments

Aggregate Notional Amount (in millions)

Aggregate Notional Amount

Effective Date

3 unchanged sentences

July 31, 2024

Anticipated Debt Issuance

August 8, 2022

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 the 4.250 % Senior Notes, in April 2022 the Company settled cash flow hedges with an aggregate notional amount of $ 250 million and $ 170 million, with effective dates of November 2020 and March 2022, respectively.

The cash received for the cash flow hedges at settlement was $ 46 million.

The settled cash flow hedges are recorded in the Condensed Consolidated Balance Sheets as a component of accumulated other comprehensive income (“AOCI”) and are amortized to interest expense in the Condensed Consolidated Statements of Operations.

Contemporaneously with the issuance of the 3.000 % Senior Notes in July 2020, the Company amended interest rate swap agreements with a notional amount of $ 200 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”).

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 AOCI, net of tax, by component for the nine months ended May 31, 2022 (in millions):

The following table sets forth the changes in AOCI, net of tax, by component for the three months ended November 30, 2022 (in millions):

Service (Cost) Credit

Balance as of August 31, 2022

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, 2022

Other comprehensive income (loss) (1)

Balance as of November 30, 2022

(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, 2022

November 30, 2021

Realized losses on derivative instruments:

Foreign exchange contracts

6 unchanged sentences

(1) The Company expects to reclassify $ 16 million into earnings during the next twelve months, which will primarily be classified as a component of cost of revenue.

(2) Amounts are included in the computation of net periodic benefit cost (credit).

(2) Amounts are included in the computation of net periodic benefit cost.

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 and nine months ended May 31, 2022 and 2021.

(3) Amounts are net of tax, which are immaterial for the three months ended November 30, 2022 and 2021.

Stockholders’ Equity

1 unchanged sentence

Three months ended

Nine months ended

November 30, 2022

November 30, 2021

Restricted stock units

Employee stock purchase plan

As of May 31, 2022, the shares available to be issued under the 2021 Equity Incentive Plan w ere 9,940,536 .

As of November 30, 2022, the shares available to be issued under the 2021 Equity Incentive Plan w ere 8,394,608 .

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 nine months ended May 31, 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.

During the three months ended November 30, 2022 and 2021, the Company awarded approximately 0.9 million and 0.7 million time-based restricted stock units, respectively, 0.2 million and 0.2 million performance-based restricted stock units, respectively, and 0.2 million and 0.2 million market-based restricted stock units, respectively.

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

November 30, 2022

Unrecognized stock-based compensation expense—restricted stock units

3 unchanged sentences

Three months ended

Nine months ended

November 30, 2022

November 30, 2021

Common stock outstanding:

Beginning balances

Shares issued upon exercise of stock options

Shares issued under employee stock purchase plan

Vesting of restricted stock

3 unchanged sentences

( 2,064,985 )

( 7,930,341 )

( 5,913,969 )

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 May 31, 2022, 8.6 million shares had been repurchased for $ 517 million and $ 483 million remains available under the 2022 Share Repurchase Program.

As of November 30, 2022, 15.0 million shares had been repurchased for $ 898 million and $ 102 million remains available under the 2022 Share Repurchase Program.

(2) In September 2022, the Board of Directors approved an authorization for the repurchase of up to $ 1.0 billion of the Company’s common stock (the “2023 Share Repurchase Program”).

As of November 30, 2022, no shares had been repurchased under the 2023 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, 2022, the Company’s five largest customers accounted for approximately 45 % of its net revenue and 79 customers accounted for approximately 90 % of its net revenue.

During the three months ended November 30, 2022, the Company’s five largest customers accounted for approximately 47 % of its net revenue and 75 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

Nine months ended

November 30, 2022

November 30, 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

Loss on debt extinguishment

Gain on securities

Other expense (net of periodic benefit cost)

4 unchanged sentences

Three months ended

Timing of transfer

Point in time

Nine months ended

November 30, 2022

November 30, 2021

Timing of transfer

4 unchanged sentences

Three months ended

Nine months ended

November 30, 2022

November 30, 2021

Foreign source revenue

Restructuring, Severance and Related Charges

Following is a summary of the Company’s restructuring, severance and related charges (in millions):

Three months ended

November 30, 2022 (1)

November 30, 2021

Employee severance and benefit costs

Asset write-off costs

Total restructuring, severance and related charges (2)

(1) Primarily relates to headcount reduction to further optimize the Company’s business activities and includes $ 4 million recorded in the EMS segment, $ 33 million recorded in the DMS segment and $ 8 million of non-allocated charges for the three months ended November 30, 2022.

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

(2) The restructuring liability is $ 54 million as of November 30, 2022, which primarily relates to employee severance and benefit costs incurred in fiscal year 2022 and the three months ended November 30, 2022.

We expect the majority of the severance to be paid during fiscal year 2023.

Effective Income Tax Rate

1 unchanged sentence

Three months ended

Nine months ended

November 30, 2022

November 30, 2021

federal statutory income tax rate

Effective income tax rate

The effective income tax rate differed for the three months and nine months ended May 31, 2022, compared to the three months and nine months ended May 31, 2021, primarily due to:

(i) decreased losses in tax jurisdictions with existing valuation allowances for the three months and nine months ended May 31, 2022 and (ii) a $ 17 million income tax expense during the three months ended May 31, 2022 for an unrecognized tax benefit related to the taxation of certain prior year intercompany transactions.

The effective income tax rate differed for the three months ended November 30, 2022, compared to the three months ended November 30, 2021, primarily due to increased losses in tax jurisdictions with minimal related income tax benefit, driven in part by restructuring charges, for the three months ended November 30, 2022.

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

federal statutory income tax rate of 21.0% during the three months and nine months ended May 31, 2022 and 2021, primarily due to:

(i) losses in tax jurisdictions with existing valuation allowances, (ii) tax incentives granted to sites in China, Malaysia, Singapore and Vietnam, and (iii) a $ 17 million income tax expense during the three months ended May 31, 2022 for an unrecognized tax benefit related to the taxation of certain prior year intercompany transactions.

federal statutory income tax rate of 21.0% during the three months ended November 30, 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.

Earnings Per Share and Dividends

8 unchanged sentences

Three months ended

Nine months ended

November 30, 2022

November 30, 2021

Restricted stock units

The following table sets forth cash dividends declared by the Company to common stockholders during the nine months ended May 31, 2022 and 2021 (in millions, 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, 2022 and 2021 (in millions, except for per share data):

Declaration Date

7 unchanged sentences

December 2, 2022

January 20, 2022

February 15, 2022

March 2, 2022

April 21, 2022

Fiscal Year 2022:

2 unchanged sentences

December 1, 2021

January 21, 2021

February 15, 2021

March 2, 2021

April 22, 2021

Fair Value Measurements

2 unchanged sentences

Fair Value Hierarchy

November 30, 2022

August 31, 2022

13 unchanged sentences

Derivatives not designated as hedging instruments (Note 9)

Interest rate swaps:

Derivatives not designated as hedging instruments (Note 9)

Extended interest rate swap not designated as a hedging instrument (Note 9)

Other liabilities:

Forward interest rate swap:

Derivatives designated as hedging instruments (Note 9)

(1) Consist of investments that are readily convertible to cash with original maturities of 90 days or less.

(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.

(2) The Company’s forward foreign exchange contracts, including cash flow hedges and net investment hedges 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.

(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 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 (in millions):

August 31, 2021

Carrying Amount

Assets held for sale (1)

(1) During the nine months ended May 31, 2022, the Company sold assets held for sale with a carrying value of $ 61 million.

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 (in millions):

November 30, 2022

August 31, 2022

9 unchanged sentences

4.250 % Senior Notes

(1) The fair value estimates are based upon observable market data.

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

(2) The fair value estimates are based upon observable market data.

Commitments and Contingencies

15 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 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;

our dependence on a limited number of customers;

competitive challenges affecting our customers;

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, 2022 such as, scheduling production, managing growth and capital expenditures and maximizing the efficiency of our manufacturing capacity effectively;

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

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

our dependence on a limited number of customers;

our ability to purchase components efficiently and reliance on a limited number of suppliers for critical components;

risks arising from relationships with emerging companies;

changes in technology;

changes in technology and competition in our industry;

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

2 unchanged sentences

retaining key personnel;

our ability to purchase components efficiently and reliance on a limited number of suppliers for critical components;

risks associated with international sales and operations;

energy price increases or shortages;

our ability to achieve expected profitability from acquisitions;

9 unchanged sentences

currency fluctuations;

energy prices;

and asset impairment);

4 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