What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-01-09 compared with 2023-06-30 · 156 added, 117 removed, 187 unchanged (59% of the section changed)

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We currently depend, and expect to continue to depend for the foreseeable future, upon a relatively small number of customers for a significant percentage of our net revenue, which in turn depends upon their growth, viability and financial stability.

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, 86.9% and 85.6%, of net revenue from our international operations for the three months and nine months ended May 31, 2023, respectively.

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

We derived a substantial majority, 86.4% of net revenue from our international operations for the three months ended November 30, 2023.

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

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Our EMS segment is a high volume business that produces product at a quicker rate (i.e.

cycle time) and in larger quantities and includes customers primarily in the 5G, wireless and cloud, digital print and retail, industrial and semi-cap, and networking and storage industries.

cycle time) and in larger quantities and includes customers primarily in the 5G, wireless and cloud, digital print and retail, industrial and semi-capital equipment, and networking and storage industries.

Our DMS segment is focused on providing engineering solutions, with an emphasis on material sciences, technologies and healthcare.

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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, 2023 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, 2023 contained herein.

The COVID-19 pandemic has had, and continues to have, significant impacts in countries where we operate.

Travel and business operation restrictions arising from governmental virus containment efforts have continued to impact our operations in Asia during this fiscal year.

Certain of our suppliers continue to experience supply chain constraints, including difficulty sourcing materials necessary to fulfill customer production requirements and challenges in transporting completed products to our end customers.

"Management's Discussion and Analysis of Financial Condition and Results of Operations" section as of November 30, 2023 contained herein.

Summary of Results

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November 30, 2022

Operating income

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February 28, 2023

November 30, 2023 (1)

August 31, 2023 (1)

November 30, 2022

Sales cycle (2)

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Days in accounts payable (6)

(1) The calculation of these key performance indicators includes assets and liabilities held for sale for the three months ended November 30, 2023 and August 31, 2023, respectively.

(2) The sales cycle is calculated as the sum of days in accounts receivable and days in inventory, less the days in accounts payable;

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(4) 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, 2023, the decrease in days in accounts receivable from the prior sequential quarter was primarily due to the timing of collections.

During the three months ended May 31, 2023, the increase in days in accounts receivable from the three months ended May 31, 2022, was primarily due to higher sales and the timing of collections.

During the three months ended November 30, 2023, the increase in days in accounts receivable from the prior sequential quarter was primarily due to the timing of collections.

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

During the three months ended May 31, 2023, the decrease in days in inventory from the prior sequential quarter was primarily driven by increased sales activity during the quarter resulting in a higher consumption of inventory and improved working capital management.

During the three months ended November 30, 2023, the decrease in days in inventory from the prior sequential quarter was primarily driven by higher consumption of inventory to support sales during the quarter and improved working capital management.

(6) 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, 2023, the decrease in days in accounts payable from the prior sequential quarter was primarily due to a decrease in material purchases and timing of cash payments during the quarter.

During the three months ended May 31, 2023, the decrease in days in accounts payable from the three months ended May 31, 2022, was primarily due to cash payments and timing of purchases during the quarter.

During the three months ended November 30, 2023, the decrease in days in accounts payable from the three months ended November 30, 2022, was primarily due to cash payments and timing of purchases during the quarter.

Critical Accounting Policies and Estimates

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(dollars in millions)

Net revenue increased during the three months ended May 31, 2023, compared to the three months ended May 31, 2022.

Specifically, the DMS segment net revenue increased 13% due to:

(i) an 11% increase in revenues from existing customers within our automotive and transportation business, and (ii) a 5% increase in revenues from existing customers within our healthcare and packaging business.

The increase is partially offset by a 3% decrease in revenues from existing customers within our connected devices business.

The EMS segment net revenue decreased 8% primarily due to a decrease in revenues from existing customers within our 5G, wireless and cloud business, which began transitioning to a customer-controlled consignment model in fiscal year 2023.

Net revenue increased during the nine months ended May 31, 2023, compared to the nine months ended May 31, 2022.

Specifically, the DMS segment net revenue increased 10% due to:

(i) a 8% increase in revenues from existing customers within our automotive and transportation business, (ii) a 4% increase in revenues from existing customers within our healthcare and packaging business, and (iii) a 1% increase in revenues from existing customers within our mobility business.

The increase is partially offset by a 3% decrease in revenues from existing customers within our connected devices business.

The EMS segment net revenue increased 5% due to:

(i) a 3% increase in revenues from existing customers within our industrial and capital equipment business, and (ii) a 2% increase in revenues from existing customers within our digital print and retail business.

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November 30, 2022

Net revenue decreased during the three months ended November 30, 2023, compared to the three months ended November 30, 2022.

Specifically, the EMS segment net revenue decreased 21% primarily due to:

(i) a 12% decrease in revenues from existing customers within our 5G, wireless and cloud business, which continued transitioning to a customer-controlled consignment model in fiscal year 2024, (ii) a 7% decrease in revenues from existing customers within our digital print and retail business, and (iii) a 2% decrease in revenues from existing customers within our industrial and semi-capital equipment business.

The DMS segment net revenue decreased 6% due to:

(i) a 5% decrease in revenues from existing customers within our connected devices business and (ii) a 3% decrease from existing customers within our mobility business.

The decrease is partially offset by a 2% increase in revenues from existing customers within our automotive and transportation business.

On September 26, 2023, we announced the signing of a definitive agreement to divest our mobility business to an affiliate of BYD Electronic (International) Company Limited (“BYDE”) in a cash transaction valued at approximately $2.2 billion.

On December 29, 2023, the closing date, we completed the sale.

See Note 15 – “Business Acquisitions and Divestitures” to the Consolidated Financial Statements for additional information.

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

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

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Foreign source revenue

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(dollars in millions)

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Percent of net revenue

Gross profit as a percentage of net revenue increased for the three months ended May 31, 2023, compared to the three months ended May 31, 2022, primarily due to product mix and improved profitability across various businesses.

Gross profit as a percentage of net revenue remained relatively consistent for the nine months ended May 31, 2023, compared to the nine months ended May 31, 2022.

Gross profit as a percentage of net revenue increased for the three months ended November 30, 2023, compared to the three months ended November 30, 2022, primarily due to product mix, improved profitability across various businesses, and depreciation and amortization for long-lived assets no longer being recorded while these assets are classified as held for sale.

Selling, General and Administrative

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(in millions)

November 30, 2023

November 30, 2022

Selling, general and administrative

Selling, general and administrative expenses increased during the three months ended May 31, 2023, compared to the three months ended May 31, 2022.

The increase is primarily due to:

(i) $15 million due to higher salary and salary related expenses and (ii) $6 million of indirect taxes.

Selling, general and administrative expenses increased during the nine months ended May 31, 2023, compared to the nine months ended May 31, 2022.

The increase is primarily due to:

(i) $13 million due to higher salary and salary related expenses, (ii) $13 million 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, (iii) $8 million for higher travel-related costs, and (iv) $6 million of indirect taxes.

Selling, general and administrative expenses decreased during the three months ended November 30, 2023, compared to the three months ended November 30, 2022.

The decrease is primarily due to a $6 million decrease in salary and salary related expenses.

Research and Development

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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, 2023, compared to the three months and nine months ended May 31, 2022.

Research and development expenses remained consistent as a percentage of net revenue during the three months ended November 30, 2023, compared to the three months ended November 30, 2022.

Amortization of Intangibles

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Amortization of intangibles

Amortization of intangibles remained relatively consistent during the three months and nine months ended May 31, 2023, compared to the three months and nine months ended May 31, 2022.

Amortization of intangibles remained relatively consistent during the three months ended November 30, 2023, compared to the three months ended November 30, 2022.

Restructuring, Severance and Related Charges

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Restructuring, severance and related charges

Restructuring, severance and related charges increased during the nine months ended May 31, 2023, compared to the nine months ended May 31, 2022 primarily related to a headcount reduction to further optimize our business activities during the three months ended November 30, 2022.

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.

Other Expense (Income)

Restructuring, severance and related charges increased during the three months ended November 30, 2023, compared to the three months ended November 30, 2022, primarily related to the 2024 Restructuring Plan.

2024 Restructuring Plan

On September 26, 2023, our Board of Directors approved a restructuring plan to (i) realign our cost base for stranded costs associated with the sale and realignment of our mobility business and (ii) optimize our global footprint.

This action includes headcount reductions across our Selling, General and Administrative (“SG&A”) cost base and capacity realignment (the “2024 Restructuring Plan”).

The 2024 Restructuring Plan reflects our intention only and restructuring decisions, and the timing of such decisions, at certain locations, are still subject to consultation with our employees and their representatives.

Based on the analysis done to date, we currently expect to recognize approximately $300 million in pre-tax restructuring and other related costs over the course of our 2024 fiscal year.

The charges relating to the 2024 Restructuring Plan are currently expected to result in net cash expenditures of approximately $200 million that will be payable over the course of our fiscal years 2024 and 2025.

The exact timing of these charges and cash outflows, as well as the estimated cost ranges by category type, have not been finalized.

This information will be subject to the finalization of timetables for the transition of functions, consultation with employees and their representatives as well as the statutory severance requirements of the jurisdictions impacted, and the amount and timing of the actual charges may vary due to a variety of factors.

Our estimates for the charges discussed above exclude any potential income tax effects.

See Note 12 – “Restructuring, Severance and Related Charges” to the Condensed Consolidated Financial Statements for further discussion of restructuring, severance and related charges.

Costs from the Divestiture of Businesses

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Other expense (income)

The change in other expense (income) during the three months ended May 31, 2023, compared to the three months ended May 31, 2022, is primarily due to an increase in fees associated with the securitization programs and higher interest rates for the trade accounts receivable sales programs.

The change in other expense (income) during the nine months ended May 31, 2023, compared to the nine months ended May 31, 2022, is primarily due to:

(i) $48 million related to an increase in fees associated with the securitization programs and higher utilization of and higher interest rates for the trade accounts receivable programs and (ii) $10 million, primarily related to higher net periodic benefit costs.

The change is partially offset by a $6 million decrease in other expense.

Interest Income

(in millions)

November 30, 2023

November 30, 2022

Costs from the divestiture of businesses

Costs from the divestiture of businesses increased during the three months ended November 30, 2023, related to transaction costs incurred from the planned divestiture of our mobility business.

Other Expense

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Interest income

Interest income increased during the three months and nine months ended May 31, 2023, compared to the three months and nine months ended May 31, 2022, primarily due to higher interest rates on and higher cash balances.

Interest Expense

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November 30, 2023

November 30, 2022

Other expense

The change in other expense during the three months ended November 30, 2023, compared to the three months ended November 30, 2022, is primarily due to an increase in fees due to higher interest rates on our trade accounts receivable sales programs and global asset-backed securitization programs.

Interest Expense, Net

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Interest expense

Interest expense increased during the three months ended May 31, 2023, compared to the three months ended May 31, 2022, primarily due to higher interest rates on our commercial paper program, credit facilities, and other borrowings.

Interest expense increased during the nine months ended May 31, 2023, compared to the nine months ended May 31, 2022, primarily due to higher borrowings and higher interest rates on our commercial paper program, credit facilities, and other borrowings.

(in millions)

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November 30, 2022

Interest expense, net

Interest expense, net remained relatively consistent during the three months ended November 30, 2023, compared to the three months ended November 30, 2022.

Income Tax Expense

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Effective income tax rate

The effective income tax rate increased for the three months and nine months ended May 31, 2023, compared to the three months and nine months ended May 31, 2022, primarily due to a change in the jurisdictional mix of earnings, partially offset by a $17 million income tax expense during the three months and nine 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, 2023, compared to the three months ended November 30, 2022, primarily due to:

(i) a change in the jurisdictional mix of earnings, driven in part by restructuring charges, (ii) a $19 million income tax benefit for the reversal of a non-U.S.

unrecognized tax benefit due to audit closure for the three months ended November 30, 2023, and (iii) an $11 million income tax benefit for the reversal of a portion of the U.S.

valuation allowance related to an acquisition for the three months ended November 30, 2023.

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.

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.

We determine 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, we utilize 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.

We may adjust the normalized core tax rate during the year for material impacts from new tax legislation or material changes to our operations.

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

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Operating income (U.S.

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Net periodic benefit cost (2)

Costs from the divestiture of businesses

Adjustments to operating income

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Adjustments to operating income

Loss on debt extinguishment

Net periodic benefit cost (2)

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GAAP and Non-GAAP)

(1) Recorded during the nine months ended May 31, 2023, related to headcount reduction to further optimize our business activities.

(1) Charges recorded during the three months ended November 30, 2023, related to the 2024 Restructuring Plan.

Charges 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.

(3) Tax adjustments for the three months ended November 30, 2023, were partially driven by an income tax benefit for the reversal of a non-U.S.

unrecognized tax benefit due to audit closure.

Adjusted Free Cash Flow

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Net cash provided by operating activities (U.S.

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Adjusted free cash flow (Non-GAAP)

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

(1) Certain customers co-invest in 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.

Acquisitions and Divestitures

On November 1, 2023, we completed the acquisition of ProcureAbility Inc.

(“ProcureAbility”) for approximately $60 million in cash.

ProcureAbility is a procurement services provider specializing in technology-enabled advisory, managed services, digital, staffing, and recruiting solutions.

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

Assets acquired of $86 million, including $40 million in intangible assets and $38 million in goodwill, and liabilities assumed of $25 million were recorded at their estimated fair values as of the acquisition date.

The allocation of the purchase price is considered preliminary pending final valuation for the Company.

The excess of the purchase price over the fair value of the acquired assets and assumed liabilities was recorded to goodwill and was fully allocated to the DMS segment.

The majority of the goodwill is currently not expected to be deductible for income tax purposes.

The results of operations were

included in our condensed consolidated financial results beginning on November 1, 2023.

Pro forma information has not been provided as the acquisition of ProcureAbility is not deemed to be significant.

We announced on September 26, 2023 that, through our indirect subsidiary, Jabil Circuit (Singapore) Pte.

Ltd., a Singapore private limited company (“Singapore Seller”), we agreed to sell to an affiliate of BYD Electronic (International) Co.

Ltd., a Hong Kong limited liability company (“Purchaser” or “BYDE”), our product manufacturing business in Chengdu, including our supporting component manufacturing in Wuxi (the “Business”) for cash consideration of approximately $2.2 billion, subject to certain customary purchase price adjustments.

On December 29, 2023, the closing date, we completed the sale.

As of November 30, 2023, and August 31, 2023, the assets and liabilities of the Business were classified as held for sale and the carrying value is less than the estimated fair value less cost to sell and, thus, no adjustment to the carrying value of the disposal group is necessary.

For the three months ended November 30, 2023, depreciation and amortization expense for long-lived assets are not recorded while these assets are classified as held for sale.

The divestiture did not meet the criteria to be reported as discontinued operations and we continued to report the operating results for the Business in our Condensed Consolidated Statement of Operations in the DMS segment until the Closing Date.

Refer to Note 15 – “Business Acquisitions and Divestitures” to the Condensed Consolidated Financial Statements for discussion.

Liquidity and Capital Resources

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Cash and Cash Equivalents

As of May 31, 2023, we had approximately $1.5 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, 2023 could be repatriated to the United States without potential tax expense.

As of November 30, 2023, we had approximately $1.6 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, 2023 could be repatriated to the United States without potential tax expense.

Notes Payable and Credit Facilities

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4.250% Senior Notes

5.450% Senior Notes

facilities (1)

Balance as of August 31, 2023

Balance as of May 31, 2023

Balance as of November 30, 2023

Maturity Date

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$3.8 billion (1)

(1) On April 13, 2023, we issued $300 million of publicly registered 5.450% Senior Notes due 2029 (the “5.450% Senior Notes”).

We intend to use the net proceeds for general corporate purposes, including, together with available cash, repayment of the $300 million aggregate principal amount of our 4.900% Senior Notes due in July 2023.

(2) On February 10, 2023, we entered into an amendment (the “Amendment”) to our senior unsecured credit agreement dated as of January 22, 2020 (as amended, the “Credit Facility”).

The Amendment, among other things, (i) instituted certain amendments to the sustainability-linked adjustments to the interest rates applicable to borrowings under the three-year revolving credit facility (the “Three-Year Revolving Credit Facility”) and the five-year revolving credit facility (the “Five-Year Revolving Credit Facility”), (ii) established customary SOFR, CDOR, EURIBOR and TIBOR provisions, which replaced the LIBOR provisions set forth in the existing agreement, and (iii) extended the termination date of the Three-Year Revolving Credit Facility to January 22, 2025, and of the Five-Year Revolving Credit Facility to January 22, 2027.

(3) As of May 31, 2023, we had $3.9 billion in available unused borrowing capacity under our revolving credit facilities.

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.

(1) As of November 30, 2023, 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 February 10, 2023 (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.

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

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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, 2023 and August 31, 2022, we were in compliance with our debt covenants.

As of November 30, 2023 and August 31, 2023, we were in compliance with our debt covenants.

Refer to Note 4 – “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 global asset-backed securitization program recognized during the three months and nine months ended May 31, 2023 and 2022 were not material.

Servicing fees related to the global asset-backed securitization program recognized during the three months ended November 30, 2023 and 2022 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, 2023.

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, 2023, we sold $1.0 billion and $3.1 billion, respectively, of trade accounts receivable and we received cash proceeds of $1.0 billion and $3.0 billion, respectively.

As of May 31, 2023, we had no available liquidity under our global asset-backed securitization program.

During the three months ended November 30, 2023, we sold $1.0 billion of trade accounts receivable and we received cash proceeds of $1.0 billion.

As of November 30, 2023, 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, 2023 and August 31, 2022, we were in compliance with all covenants under our global asset-backed securitization program.

As of November 30, 2023 and August 31, 2023, we were in compliance with all covenants under our global asset-backed securitization program.

Refer to Note 5 – “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, 2023, 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, (iii) maximum amount available of 100 million CHF under one trade accounts receivable sale program, and (iv) maximum amount available of 8.1 billion INR under one trade accounts receivable sale program.

The trade accounts receivable sale programs expire on various dates through 2028.

During the three months and nine months ended May 31, 2023, we sold $2.6 billion and $9.0 billion, respectively, of trade accounts receivable under these programs and we received cash proceeds of $2.6 billion and $9.0 billion, respectively.

As of May 31, 2023, we had up to $1.0 billion in available liquidity under our trade accounts receivable sale programs.

As of November 30, 2023, we may elect to sell receivables and the unaffiliated financial institutions may elect to purchase specific accounts receivable at any one time, at a discount, on an ongoing basis up to a:

(i) maximum aggregate amount available of $2.3 billion under nine trade accounts receivable sale programs, (ii) maximum amount available of 100 million CHF under one trade accounts receivable sale program, and (iii) maximum amount available of 8.1 billion INR under one trade accounts receivable sale program.

The trade accounts receivable sale programs either expire on various dates through 2028 or do not have expiration dates and may be terminated upon election of the Company or the unaffiliated financial institutions.

During the three months ended November 30, 2023, we sold $2.0 billion of trade accounts receivable under these programs and we received cash proceeds of $2.0 billion.

As of November 30, 2023, we had up to $1.4 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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November 30, 2022

Net cash provided by operating activities

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Effect of exchange rate changes on cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

Net decrease in cash and cash equivalents

Operating Activities

Net cash provided by operating activities during the nine months ended May 31, 2023, was primarily due to non-cash expenses and net income and a decrease in accounts receivable, inventories, and contract assets.

The net cash provided by operating activities was partially offset by a decrease in accounts payable, accrued expenses and other liabilities and an increase in prepaid expenses and other current assets.

The decrease in accounts receivable is primarily driven by the timing of collections.

The decrease in inventories is primarily due to higher consumption of inventories to support sales during the quarter.

The decrease in contract assets is primarily due to timing of revenue recognition for over time customers.

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

Net cash provided by operating activities during the three months ended November 30, 2023, was primarily due to a decrease in non-cash expenses, net income, inventories, and an increase in accounts payable, accrued expenses and other liabilities.

Net cash provided by operating activities was partially offset by an increase in accounts receivable, in prepaid expenses and other current assets, and in contract assets.

The decrease in inventories is primarily due to higher consumption of inventory to support sales during the quarter and improved working capital management.

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 the timing of collections.

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

The increase in contract assets is primarily due to timing of revenue recognition for the over time customers.

Investing Activities

Net cash used in investing activities during the nine months ended May 31, 2023 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, 2023 consisted primarily of capital expenditures, principally to support ongoing business in the DMS and EMS segments and the acquisition of ProcureAbility, partially offset by proceeds from the planned divestiture of our mobility business and 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, 2023 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, 2023 was primarily due to (i) the repurchase of our common stock under our share repurchase authorization, (ii) payments for debt agreements (iii) treasury stock minimum tax withholding related to vesting of restricted stock, and (iv) dividend payments.

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

Capital Expenditures

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

For Fiscal Year 2024, we anticipate our net capital expenditures to be in the range of 2.2 percent to 2.5 percent of net revenue.

Upon closing of the Company’s sale of its mobility business, we anticipate our longer-term net capital expenditures to be in the range of 2.0 to 2.3 percent of net revenue.

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

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

As of May 31, 2023, 2.2 million shares had been repurchased for $179 million, excluding excise tax, and $821 million remains available under the 2023 Share Repurchase Program.

As of August 31, 2023, 2.7 million shares had been repurchased for $224 million, excluding excise tax.

In September 2023, the Board of Directors amended and increased the 2023 Share Repurchase Program to allow for the repurchase of up to $2.5 billion of our common stock.

As part of the 2023 Share Repurchase Program, we entered into an accelerated share repurchase (“ASR”) agreement with a bank in September 2023 to repurchase $500 million

of our common stock.

During the first quarter of 2024, the ASR transaction was completed, and 3.9 million shares were delivered under the ASR agreement at an average price of $128.61.

The final number of shares delivered upon settlement of the ASR agreement was determined based on a discount to the volume weighted average price of our common stock during the term of the agreement.

As of November 30, 2023, 3.9 million shares had been repurchased for $500 million, excluding excise tax, and $2.0 billion remains available under the 2023 Share Repurchase Program approved in September 2023.

Contractual Obligations

As of the date of this report, other than the borrowings on the 5.450% 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, 2022, to our contractual obligations and commitments and the related cash requirements.

As of the date of this report, there were no material changes outside the ordinary course of business, since August 31, 2023, to our contractual obligations and commitments and the related cash requirements.

Quantitative and Qualitative Disclosures About Market Risk

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Item 2. Management’s Discussion and Analysis