What changed in this filing

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Item 2. Management’s Discussion and Analysis

2023-01-06 compared with 2022-07-01 · 102 added, 109 removed, 197 unchanged (52% of the section changed)

8 unchanged sentences

We conduct our operations in facilities that are located worldwide, including but not limited to, China, Ireland, Malaysia, Mexico, Singapore and the United States.

We derived a substantial majority, 82.6% and 83.7%, of net revenue from our international operations for the three months and nine months ended May 31, 2022, respectively.

We derived a substantial majority, 85.7% of net revenue from our international operations for the three months ended November 30, 2022.

Our global manufacturing production sites allow customers to manufacture products simultaneously in the optimal locations for their products.

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"Management's Discussion and Analysis of Financial Condition and Results of Operations" section contained in our Annual Report on Form 10-K for the fiscal year ended August 31, 2022 for further discussion of the items disclosed in Item 2.

"Management's Discussion and Analysis of Financial Condition and Results of Operations" section as of May 31, 2022 contained herein.

"Management's Discussion and Analysis of Financial Condition and Results of Operations" section as of November 30, 2022 contained herein.

The COVID-19 pandemic, which began to impact us in January 2020, has continued to affect our business and the businesses of our customers and suppliers.

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Three months ended

Nine months ended

November 30, 2022

November 30, 2021

Operating income

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Three months ended

February 28, 2022

November 30, 2022

August 31, 2022

November 30, 2021

Sales cycle (1)

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(3) Days in accounts receivable is calculated as accounts receivable, net, divided by net revenue multiplied by 90 days.

During the three months ended May 31, 2022, the decrease in days in accounts receivable from the prior sequential quarter and the three months ended May 31, 2021, was primarily due to timing of collections.

(4) Days in inventory is calculated as inventory and contract assets divided by cost of revenue multiplied by 90 days.

During the three months ended May 31, 2022, the increase in days in inventory from the three months ended May 31, 2021 was primarily due to higher raw material balances due to supply chain constraints.

During the three months ended November 30, 2022, the increase in days in inventory from the three months ended November 30, 2021 was primarily due to higher raw material balances due to supply chain constraints.

(5) Days in accounts payable is calculated as accounts payable divided by cost of revenue multiplied by 90 days.

During the three months ended May 31, 2022, the decrease in days in accounts payable from the prior sequential quarter was primarily due to timing of purchases and cash payments during the quarter.

During the three months ended November 30, 2022, the decrease in days in accounts payable from the prior sequential quarter and the three months ended November 30, 2021, was primarily due to timing of purchases and cash payments during the quarter.

Critical Accounting Policies and Estimates

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Nine months ended

(dollars in millions)

Net revenue increased during the three months ended May 31, 2022, compared to the three months ended May 31, 2021.

Specifically, the EMS segment net revenue increased 23% due to:

(i) a 10% increase in revenues from existing customers within our 5G, wireless and cloud business, (ii) a 5% increase in revenues from existing customers within our networking and storage business, (iii) a 4% increase in revenues from existing customers within our digital print and retail business, and (iv) a 4% increase in revenues from existing customers within our industrial and capital equipment business.

The DMS segment net revenue increased 7% due to:

(i) a 5% increase in revenues from existing customers within our automotive and transportation business, and (ii) a 2% increase in revenues from existing customers within our healthcare and packaging business.

Net revenue increased during the nine months ended May 31, 2022, compared to the nine months ended May 31, 2021.

November 30, 2022

November 30, 2021

Net revenue increased during the three months ended November 30, 2022, compared to the three months ended November 30, 2021.

Specifically, the EMS segment net revenue increased 18% due to:

(i) a 8% increase in revenues from existing customers within our 5G, wireless and cloud business, (ii) a 4% increase in revenues from existing customers within our industrial and capital equipment business, and (iii) a 4% increase in revenues from existing customers within our digital print and retail business.

(i) a 5% increase in revenues from existing customers within our 5G, wireless and cloud business, (ii) a 5% increase in revenues from existing customers within our digital print and retail business, (iii) a 4% increase in revenues from existing customers within our networking and storage business, and (iv) a 4% increase in revenues from existing customers within our industrial and capital equipment business.

The DMS segment net revenue increased 8% due to:

(i) a 7% increase in revenues from existing customers within our automotive and transportation business, and (ii) a 3% increase in revenues from existing customers within our healthcare and packaging business.

The increase is partially offset by (i) a 1% decrease in revenues from existing customer within our mobility business and (ii) a 1% decrease in revenues from existing customers within our connected devices business.

We expect an additional $300 million in components that we procure and integrate for our cloud business will shift from a purchase and resale model to a customer-controlled consignment service model for a total of $800 million during fiscal year 2023.

As a result of this continued transition, revenue associated with these components are shown on a net basis and as a result, we expect higher gross margins and lower cash used in this business.

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

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November 30, 2022

November 30, 2021

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

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November 30, 2022

November 30, 2021

Foreign source revenue

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(dollars in millions)

November 30, 2022

November 30, 2021

Percent of net revenue

Gross profit as a percentage of net revenue decreased 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 product mix.

Gross profit as a percentage of net revenue decreased for the three months ended November 30, 2022, compared to the three months ended November 30, 2021, primarily due to product mix.

Selling, General and Administrative

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(dollars in millions)

November 30, 2022

November 30, 2021

Selling, general and administrative

Selling, general and administrative expenses decreased during the three months ended May 31, 2022, compared to the three months ended May 31, 2021.

The decrease is primarily due to lower salary and salary related expenses.

Selling, general and administrative expenses decreased during the nine months ended May 31, 2022, compared to the nine months ended May 31, 2021.

The decrease is primarily due to:

(i) a $30 million decrease due to lower salary and salary related expenses, (ii) a $9 million decrease in stock-based compensation expense due to certain one-time awards granted during the second quarter of fiscal year 2021 and higher anticipated achievement levels during the nine months ended May 31, 2021 for certain performance-based stock awards, and (iii) a $4 million decrease in acquisition and integration charges related to our strategic collaboration with a healthcare company.

Selling, general and administrative expenses increased during the three months ended November 30, 2022, compared to the three months ended November 30, 2021.

The increase is primarily due to a $7 million increase in stock-based compensation expense due to higher anticipated achievement levels for certain performance-based stock awards and awards granted during the three months ended November 30, 2022.

Research and Development

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(dollars in millions)

November 30, 2022

November 30, 2021

Research and development

Percent of net revenue

Research and development expenses remained consistent as a percentage of net revenue during the three months and nine months ended May 31, 2022, compared to the three months and nine months ended May 31, 2021.

Research and development expenses remained consistent as a percentage of net revenue during the three months ended November 30, 2022, compared to the three months ended November 30, 2021.

Amortization of Intangibles

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(dollars in millions)

November 30, 2022

November 30, 2021

Amortization of intangibles

Amortization of intangibles decreased during the three months and nine months ended May 31, 2022, compared to the three months and nine months ended May 31, 2021, primarily driven by reduced amortization related to the Nypro trade name.

Amortization of intangibles remained consistent during the three months ended November 30, 2022, compared to the three months ended November 30, 2021.

Restructuring, Severance and Related Charges

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(dollars in millions)

November 30, 2022

November 30, 2021

Restructuring, severance and related charges

Restructuring, severance and related charges decreased during the three months and nine months ended May 31, 2022, compared to the three months and nine months ended May 31, 2021 as the 2020 Restructuring Plan was complete as of August 31, 2021.

Loss on Debt Extinguishment

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Loss on debt extinguishment

Loss on debt extinguishment is due to the “make-whole” premium incurred during the three months ended May 31, 2022, for the redemption of the 4.700% Senior Notes due 2022.

Gain on Securities

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Gain on securities

Gain on securities is due to cash proceeds received in connection with the sale of an investment during the three months ended May 31, 2021.

Other Expense (Income)

Restructuring, severance and related charges during the three months ended November 30, 2022, primarily relates to headcount reduction to further optimize our business activities.

Other Expense

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(dollars in millions)

Other expense (income)

The change in other expense (income) during the three months ended May 31, 2022, compared to the three months ended May 31, 2021, is primarily due to an increase in fees associated with higher utilization of the trade accounts receivable sales programs.

The change in other expense (income) during the nine months ended May 31, 2022, compared to the nine months ended May 31, 2021, is primarily due to:

(i) $6 million arising from an increase in other expense and (ii) $3 million related to an increase in fees associated with higher utilization of the trade accounts receivable sales programs.

The change is partially offset by $4 million related to lower net periodic benefit costs.

November 30, 2022

November 30, 2021

Other expense

The change in other expense during the three months ended November 30, 2022, compared to the three months ended November 30, 2021, is primarily due to higher interest rates and an increase in fees associated with higher utilization of the trade accounts receivable sales programs.

Interest Income

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(dollars in millions)

November 30, 2022

November 30, 2021

Interest income

Interest income remained relatively consistent during the three months and nine months May 31, 2022, compared to the three months and nine months ended May 31, 2021.

Interest income increased during the three months November 30, 2022, compared to the three months ended November 30, 2021, primarily due to higher interest rates on cash equivalents (investments that are readily convertible to cash with maturity dates of 90 days or less).

Interest Expense

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November 30, 2022

November 30, 2021

Interest expense

Interest expense increased during 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 higher interest rates and higher borrowings on our credit facilities and commercial paper program.

Additionally, the increase is due to higher borrowings on our senior notes.

Interest expense increased during the three months ended November 30, 2022, compared to the three months ended November 30, 2021, primarily due to higher interest rates on our credit facilities and commercial paper program.

Income Tax Expense

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November 30, 2021

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.

Non-GAAP (Core) Financial Measures

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Also, our “core” financial measures should not be construed as an indication by us that our future results will be unaffected by those items that are excluded from our “core” financial measures.

Management believes that the non-GAAP “core” financial measures set forth below are useful to facilitate evaluating the past and future performance of our ongoing manufacturing operations over multiple periods on a comparable basis by excluding the effects of the amortization of intangibles, stock-based compensation expense and related charges, restructuring, severance and related charges, distressed customer charges, acquisition and integration charges, loss on disposal of subsidiaries, settlement of receivables and related charges, impairment of notes receivable and related charges, goodwill impairment charges, business interruption and impairment charges, net, loss on debt extinguishment, (gain) loss on securities, income (loss) from discontinued operations, gain (loss) on sale of discontinued operations and certain other expenses, net of tax and certain deferred tax valuation allowance charges.

Among other uses, management uses non-GAAP “core” financial measures to make operating decisions, assess business performance and as a factor in determining certain employee performance when evaluating incentive compensation.

We determine the tax effect of the items excluded from “core” earnings and “core” diluted earnings per share based upon evaluation of the statutory tax treatment and the applicable tax rate of the jurisdiction in which the pre-tax items were incurred, and for which realization of the resulting tax benefit, if any, is expected.

In certain jurisdictions where we do not expect to realize a tax benefit (due to existing tax incentives or a history of operating losses or other factors resulting in a valuation allowance related to deferred tax assets), a reduced or 0% tax rate is applied.

For fiscal year 2023, the Company adopted an annual normalized tax rate (“normalized core tax rate”) for the computation of the non-GAAP (core) income tax provision to provide better consistency across reporting periods.

In estimating the normalized core tax rate annually, the Company utilizes a full-year financial projection of core earnings that considers the mix of earnings across tax jurisdictions, existing tax positions, and other significant tax matters.

The Company may adjust the normalized core tax rate during the year for material impacts from new tax legislation or material changes to the Company’s operations.

Prior to fiscal year 2023, the Company determined the tax effect of the items included and excluded from core earnings quarterly.

Included in the tables below are reconciliations of the non-GAAP financial measures to the most directly comparable U.S.

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(in millions, except for per share data)

November 30, 2022

November 30, 2021

Operating income (U.S.

3 unchanged sentences

Net periodic benefit cost (2)

Business interruption and impairment charges, net

Acquisition and integration charges (2)

Adjustments to operating income

2 unchanged sentences

Adjustments to operating income

Loss on debt extinguishment (3)

Gain on securities

Net periodic benefit cost (2)

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GAAP and Non-GAAP)

(1) Recorded during the three months ended November 30, 2022, related to headcount reduction to further optimize our business activities.

(2) We are reclassifying the pension components in other expense to core operating income as we assess operating performance, inclusive of all components of net periodic benefit cost, with the related revenue.

There is no impact to core earnings or diluted core earnings per share for this adjustment.

(2) Charges related to our strategic collaboration with Johnson & Johnson Medical Devices Companies (“JJMD”).

(3) Charges related to the redemption of our 4.700% Senior Notes due 2022.

Adjusted Free Cash Flow

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(in millions)

Net cash provided by operating activities (U.S.

Acquisition of property, plant and equipment

Proceeds and advances from sale of property, plant and equipment

November 30, 2022

November 30, 2021

Net cash provided by (used in) operating activities (U.S.

Acquisition of property, plant and equipment (“PP&E”) (1)

Proceeds and advances from sale of PP&E (1)

Adjusted free cash flow (Non-GAAP)

(1) Certain customers co-invest in property, plant and equipment (“PP&E”) with us.

As we acquire PP&E, we recognize the cash payments in acquisition of PP&E.

When our customers reimburse us and obtain control, we recognized the cash receipts in proceeds and advances from the sale of PP&E.

Liquidity and Capital Resources

We believe that our level of liquidity sources, which includes available borrowings under our revolving credit facilities and commercial paper program, additional proceeds available under our global asset-backed securitization program and under our uncommitted trade accounts receivable sale programs, cash on hand, cash flows provided by operating activities and access to the capital markets, will be adequate to fund our cash requirements, including capital expenditures, the payment of any declared quarterly dividends, any share repurchases under the approved program, any potential acquisitions and our working capital requirements for the next 12 months and beyond.

We believe that our level of liquidity sources, which includes cash on hand, available borrowings under our revolving credit facilities and commercial paper program, additional proceeds available under our global asset-backed securitization program and under our uncommitted trade accounts receivable sale programs, cash flows provided by operating activities and access to the capital markets, will be adequate to fund our capital expenditures, the payment of any declared quarterly dividends, any share repurchases under the approved programs, any potential acquisitions, our working capital requirements and our contractual obligations for the next 12 months and beyond.

We continue to assess our capital structure and evaluate the merits of redeploying available cash.

Cash and Cash Equivalents

As of May 31, 2022, we had approximately $1.1 billion in cash and cash equivalents, of which a significant portion was held by our foreign subsidiaries.

Most of our foreign cash and cash equivalents as of May 31, 2022 could be repatriated to the United States without potential tax expense.

As of November 30, 2022, we had approximately $1.2 billion in cash and cash equivalents, of which a significant portion was held by our foreign subsidiaries.

Most of our foreign cash and cash equivalents as of November 30, 2022 could be repatriated to the United States without potential tax expense.

Notes Payable and Credit Facilities

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Balance as of August 31, 2022

Balance as of May 31, 2022

Balance as of November 30, 2022

Maturity Date

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$3.8 billion (1)

(1) On May 4, 2022, we 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 our 4.700% Senior Notes due in 2022 and pay the applicable “make-whole” premium and accrued interest.

In addition, we intend to allocate an amount equal to the net proceeds from this offering to finance or refinance eligible expenditures under our new green financing framework.

(2) As of May 31, 2022, we had $3.8 billion in available unused borrowing capacity under our revolving credit facilities.

(1) As of November 30, 2022, we had $3.8 billion in available unused borrowing capacity under our 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.

We have a borrowing capacity of up to $3.2 billion under our commercial paper program, which was increased from $1.8 billion on February 18, 2022.

Borrowings with an original maturity of 90 days or less are recorded net within the Condensed Consolidated Statement of Cash Flows, and have been excluded from the table above.

We have a borrowing capacity of up to $3.2 billion under our commercial paper program.

Commercial paper borrowings with an original maturity of 90 days or less are recorded net within the Condensed Consolidated Statement of Cash Flows, and have been excluded from the table above.

We have a shelf registration statement with the SEC registering the potential sale of an indeterminate amount of debt and equity securities in the future to augment our liquidity and capital resources.

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A violation of these covenants could negatively impact our liquidity by restricting our ability to borrow under the notes payable and credit facilities and potentially causing acceleration of amounts due under these notes payable and credit facilities.

As of May 31, 2022 and August 31, 2021, we were in compliance with our debt covenants.

As of November 30, 2022 and August 31, 2022, we were in compliance with our debt covenants.

Refer to Note 5 – “Notes Payable and Long-Term Debt” to the Condensed Consolidated Financial Statements for further details.

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We continue servicing the receivables sold and in exchange receive 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.

We do not record a servicing asset or liability on the Condensed Consolidated Balance Sheets as we estimate that the fee we receive to service these receivables approximates the fair market compensation to provide the servicing activities.

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

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, 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.

During the three months and nine months ended May 31, 2022, we sold $1.0 billion and $3.0 billion, respectively, of trade accounts receivable and we received cash proceeds of $1.0 billion and $3.0 billion, respectively.

As of May 31, 2022, we had no available liquidity under our global asset-backed securitization program.

During the three months ended November 30, 2022, we sold $1.1 billion of trade accounts receivable and we received cash proceeds of $1.1 billion.

As of November 30, 2022, we had no available liquidity under our global asset-backed securitization program.

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, we were in compliance with all covenants under our global asset-backed securitization program.

As of November 30, 2022 and August 31, 2022, we were in

compliance with all covenants under our global asset-backed securitization program.

Refer to Note 6 – “Asset-Backed Securitization Program” to the Condensed Consolidated Financial Statements for further details on the program.

Trade Accounts Receivable Sale Programs

As of May 31, 2022, we may elect to sell receivables and the unaffiliated financ ial 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, we may elect to sell receivables and the unaffiliated financ ial 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.

During the three months and nine months ended May 31, 2022, we sold $2.6 billion and $6.5 billion, respectively, of trade accounts receivable under these programs and we received cash proceeds of $2.6 billion and $6.5 billion, respectively.

As of May 31, 2022, we had up to $905 million in available liquidity under our trade accounts receivable sale programs.

Capital Expenditures

For Fiscal Year 2022, we anticipate our net capital expenditures will be approximately $850 million.

In general, our c apital expenditures support ongoing maintenance in our DMS and EMS segments and investments in capabilities and targeted end markets.

The amount of actual capital expenditures may be affected by general economic, financial, competitive, legislative and regulatory factors, among other things.

During the three months ended November 30, 2022, we sold $3.5 billion of trade accounts receivable under these programs and we received cash proceeds of $3.5 billion.

As of November 30, 2022, we had up to $1.1 billion in available liquidity under our trade accounts receivable sale programs.

The following table sets forth selected consolidated cash flow information (in millions):

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Net cash provided by operating activities

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November 30, 2022

November 30, 2021

Net cash provided by (used in) operating activities

Net cash used in investing activities

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Operating Activities

Net cash provided by operating activities during the nine months ended May 31, 2022, was primarily due to net income and non-cash expenses and an increase in accounts payable, accrued expenses and other liabilities;

partially offset by:

an increase in inventories, contract assets, prepaid expenses and other current assets and accounts receivable.

Net cash provided by operating activities during the three months ended November 30, 2022, was primarily due to non-cash expenses and net income and an increase in accounts payable, accrued expenses and other liabilities.

These increases were partially offset by an increase in accounts receivable, inventories, contract assets, and prepaid expenses and other current assets.

The increase in accounts payable, accrued expenses and other liabilities is primarily due to the timing of purchases and cash payments.

The increase in accounts receivable is primarily driven by higher sales and the timing of collections.

The increase in inventories is primarily due to higher raw material balances due to supply chain constraints.

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The increase in prepaid expenses and other current assets is primarily due to the timing of payments.

The increase in accounts receivable is primarily driven by higher sales and the timing of collections.

Investing Activities

Net cash used in investing activities during the nine months ended May 31, 2022 consisted primarily of capital expenditures, principally to support ongoing business in the DMS and EMS segments, partially offset by proceeds and advances from the sale of property, plant and equipment.

Net cash used in investing activities during the three months ended November 30, 2022 consisted primarily of capital expenditures, principally to support ongoing business in the DMS and EMS segments, partially offset by proceeds and advances from the sale of property, plant and equipment.

Financing Activities

Net cash used in financing activities during the nine months ended May 31, 2022 was primarily due to (i) payments for debt agreements, (ii) the repurchase of our common stock under our share repurchase authorization, (iii) the purchase of treasury stock under employee stock plans, and (iv) dividend payments.

Net cash used in financing activities during the three months ended November 30, 2022 was primarily due to (i) payments for debt agreements, (ii) the repurchase of our common stock under our share repurchase authorization, (iii) the purchase of treasury stock under employee stock plans, and (iv) dividend payments.

Net cash used in financing activities was partially offset by borrowings under debt agreements.

Contractual Obligations

As of the date of this report, other than the borrowings on the 4.250% Senior Notes, (see Note 5 – “Notes Payable and Long-Term Debt” to the Condensed Consolidated Financial Statements) and the new operating and finance leases, (see Note 4 – “Leases” to the Condensed Consolidated Financial Statements), there were no material changes outside the ordinary course of business, since August 31, 2021 to our contractual obligations and commitments and the related cash requirements.

Capital Expenditures

For Fiscal Year 2023, we anticipate our net capital expenditures will be approximately $875 million.

In general, our capital expenditures support ongoing maintenance in our DMS and EMS segments and investments in capabilities and targeted end markets.

The amount of actual capital expenditures may be affected by general economic, financial, competitive, legislative and regulatory factors, among other things.

Dividends and Share Repurchases

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In July 2021, the Board of Directors approved an authorization for the repurchase of up to $1.0 billion of our 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.

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.

Contractual Obligations

As of the date of this report, other than the new operating and finance leases, (see Note 4 – “Leases” to the Condensed Consolidated Financial Statements), there were no material changes outside the ordinary course of business, since August 31, 2022 to our contractual obligations and commitments and the related cash requirements.

Quantitative and Qualitative Disclosures About Market Risk

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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 2. Management’s Discussion and Analysis