What changed in this filing

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Item 1. Financial Statements

2024-04-05 compared with 2024-01-09 · 263 added, 187 removed, 423 unchanged (52% of the section changed)

3 unchanged sentences

(in millions, except for share data)

November 30, 2023

August 31, 2023

February 29, 2024

(Unaudited) August 31, 2023

Current assets:

6 unchanged sentences

Total current assets 12,470 14,730

Property, plant and equipment, net of accumulated depreciation of $ 4,612 as of November 30, 2023 and $ 4,512 as of August 31, 2023

Property, plant and equipment, net of accumulated depreciation of $ 4,655 as of February 29, 2024 and $ 4,512 as of August 31, 2023

Operating lease right-of-use asset 363 367

Goodwill 656 621

Intangible assets, net of accumulated amortization 167 142

Deferred income taxes 131 159

Other assets 291 268

Total assets $ 17,123 $ 19,424

LIABILITIES AND EQUITY

17 unchanged sentences

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

275,716,586 and 273,949,811 shares issued and 128,647,431 and 131,294,422 shares outstanding as of November 30, 2023 and August 31, 2023, respectively

276,057,643 and 273,949,811 shares issued and 122,440,607 and 131,294,422 shares outstanding as of February 29, 2024 and August 31, 2023, respectively

Additional paid-in capital 2,877 2,795

1 unchanged sentence

Accumulated other comprehensive loss

Treasury stock at cost, 147,069,155 and 142,655,389 shares as of November 30, 2023 and August 31, 2023, respectively

( 17 ) ( 17 )

Treasury stock at cost, 153,617,036 and 142,655,389 shares as of February 29, 2024 and August 31, 2023, respectively

( 5,714 ) ( 4,324 )

Total Jabil Inc.

1 unchanged sentence

Noncontrolling interests — 1

Total equity 2,658 2,867

Total liabilities and equity $ 17,123 $ 19,424

3 unchanged sentences

(in millions, except for per share data)

Three months ended

November 30, 2023

November 30, 2022

Three months ended Six months ended

February 29, 2024 February 28, 2023 February 29, 2024 February 28, 2023

Net revenue $ 6,767 $ 8,134 $ 15,154 $ 17,769

Cost of revenue 6,137 7,473 13,749 16,365

Gross profit 630 661 1,405 1,404

Operating expenses:

3 unchanged sentences

Restructuring, severance and related charges 70 — 197 45

Costs from the divestiture of businesses

Gain from the divestiture of businesses ( 944 ) — ( 944 ) —

Acquisition and divestiture related charges 46 — 61 —

Operating income 1,131 359 1,434 721

3 unchanged sentences

Income tax expense 135 80 176 156

Net income 927 207 1,121 430

Net income attributable to noncontrolling interests, net of tax — — — —

Net income attributable to Jabil Inc.

$ 927 $ 207 $ 1,121 $ 430

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

Basic $ 7.41 $ 1.55 $ 8.80 $ 3.21

Diluted $ 7.31 $ 1.52 $ 8.66 $ 3.14

Weighted average shares outstanding:

Basic 125.2 133.6 127.4 134.2

Diluted 126.9 136.3 129.5 137.1

See accompanying notes to Condensed Consolidated Financial Statements.

2 unchanged sentences

(in millions)

Three months ended

November 30, 2023

November 30, 2022

Other comprehensive income (loss):

Three months ended Six months ended

February 29, 2024 February 28, 2023 February 29, 2024 February 28, 2023

Net income $ 927 $ 207 $ 1,121 $ 430

Other comprehensive (loss) income:

Change in foreign currency translation ( 7 ) 14 ( 7 ) 18

1 unchanged sentence

Change in fair value of derivatives ( 1 ) 18 ( 4 ) ( 7 )

Adjustment for net losses realized and included in net income

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

( 2 ) 1 14 44

Total change in derivative instruments ( 3 ) 19 10 37

Actuarial loss

( 2 ) ( 2 ) ( 5 ) ( 5 )

Prior service credit

Total other comprehensive income

Total other comprehensive (loss) income ( 11 ) 31 — 51

Comprehensive income $ 916 $ 238 $ 1,121 $ 481

1 unchanged sentence

Comprehensive income attributable to Jabil Inc.

$ 916 $ 238 $ 1,121 $ 481

See accompanying notes to Condensed Consolidated Financial Statements.

2 unchanged sentences

(in millions)

Three months ended

November 30, 2023

November 30, 2022

Three months ended Six months ended

February 29, 2024 February 28, 2023 February 29, 2024 February 28, 2023

Total stockholders' equity, beginning balances

$ 2,536 $ 2,530 $ 2,867 $ 2,452

Common stock:

1 unchanged sentence

Beginning balances

2,827 2,696 2,795 2,655

Shares issued under employee stock purchase plan

Purchase of noncontrolling interest ( 2 ) — ( 2 ) —

Treasury shares purchased — — ( 13 ) —

1 unchanged sentence

Ending balances

2,877 2,742 2,877 2,742

Retained earnings:

Beginning balances

4,595 3,849 4,412 3,638

Declared dividends

( 10 ) ( 10 ) ( 21 ) ( 22 )

Net income attributable to Jabil Inc.

927 207 1,121 430

Ending balances

Accumulated other comprehensive loss:

5,512 4,046 5,512 4,046

Accumulated other comprehensive (loss) income:

Beginning balances

Total other comprehensive income

( 6 ) ( 22 ) ( 17 ) ( 42 )

Total other comprehensive (loss) income

( 11 ) 31 — 51

Ending balances

( 17 ) 9 ( 17 ) 9

Treasury stock:

Beginning balances

( 4,881 ) ( 3,994 ) ( 4,324 ) ( 3,800 )

Purchases of treasury stock under employee stock plans

— ( 3 ) ( 67 ) ( 36 )

Treasury shares purchased

( 825 ) ( 127 ) ( 1,312 ) ( 288 )

Excise taxes related to treasury shares purchased ( 8 ) — ( 11 ) —

Ending balances

( 5,714 ) ( 4,124 ) ( 5,714 ) ( 4,124 )

Noncontrolling interests:

1 unchanged sentence

Net income attributable to noncontrolling interests

Purchase of noncontrolling interest ( 1 ) — ( 1 ) —

Ending balances

Total stockholders' equity, ending balances

$ 2,658 $ 2,674 $ 2,658 $ 2,674

See accompanying notes to Condensed Consolidated Financial Statements.

2 unchanged sentences

(in millions)

Three months ended

November 30, 2023

November 30, 2022

Six months ended

February 29, 2024 February 28, 2023

Cash flows provided by operating activities:

Net income $ 1,121 $ 430

Depreciation, amortization, and other, net 356 514

Gain from the divestiture of businesses ( 944 ) —

Change in operating assets and liabilities, exclusive of net assets acquired 133 ( 364 )

Net cash provided by operating activities

Cash flows used in investing activities:

Cash flows provided by (used in) investing activities:

Acquisition of property, plant and equipment ( 554 ) ( 637 )

1 unchanged sentence

Cash paid for business and intangible asset acquisitions, net of cash ( 93 ) —

Proceeds from the divestiture of businesses

Net cash used in investing activities

Proceeds from the divestiture of businesses, net of cash 2,108 —

Other, net ( 12 ) ( 16 )

Net cash provided by (used in) investing activities

1,558 ( 484 )

Cash flows used in financing activities:

3 unchanged sentences

Dividends paid to stockholders ( 22 ) ( 23 )

Net proceeds from exercise of stock options and issuance of common stock under employee stock purchase plan 31 27

Treasury stock minimum tax withholding related to vesting of restricted stock ( 67 ) ( 36 )

Other, net ( 5 ) ( 2 )

Net cash used in financing activities

( 1,455 ) ( 371 )

Effect of exchange rate changes on cash and cash equivalents ( 7 ) ( 3 )

Net decrease in cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents at beginning of period 1,804 1,478

12 unchanged sentences

(the “Company”) for the fiscal year ended August 31, 2023.

Results for the three months ended November 30, 2023 are not necessarily an indication of the results that may be expected for the full fiscal year ending August 31, 2024.

Results for the six months ended February 29, 2024 are not necessarily an indication of the results that may be expected for the full fiscal year ending August 31, 2024.

Trade Accounts Receivable Sale Programs

1 unchanged sentence

As these accounts receivable are sold without recourse, the Company does not retain the associated risks following the transfer of such accounts receivable to the respective financial institutions.

As of November 30, 2023, the Company 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.

As of February 29, 2024, the Company 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 $ 2.1 billion under nine trade accounts receivable sale programs, (ii) maximum amount available of 100 million CHF under one trade accounts receivable sale program, (iii) maximum amount available of 8.1 billion INR under one trade accounts receivable sale program, and (iv) maximum amount available of 1.4 billion CNY 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.

In April 2024, the Company terminated its $ 700 million trade accounts receivable sale program which was set to expire on December 5, 2025 and entered into a new trade accounts receivable sale program with a maximum amount available of $ 200 million.

The Company continues servicing the receivables sold and in exchange receives a servicing fee under each of the trade accounts receivable sale programs.

Servicing fees related to the trade accounts receivable sale programs recognized during the three months ended November 30, 2023 and 2022 were not material.

Servicing fees related to the trade accounts receivable sale programs recognized during the three months and six months ended February 29, 2024 and February 28, 2023 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.

In connection with the trade accounts receivable sale programs, the Company recognized the following (in millions):

Three months ended

November 30, 2023

November 30, 2022

Three months ended Six months ended

February 29, 2024 February 28, 2023 February 29, 2024 February 28, 2023

Trade accounts receivable sold (1)

$ 1,818 $ 2,922 $ 3,854 $ 6,450

Cash proceeds received $ 1,809 $ 2,914 $ 3,834 $ 6,432

Pre-tax losses on sale of receivables (2)

$ 9 $ 8 $ 20 $ 18

(1) Receivables sold are excluded from accounts receivable on the Condensed Consolidated Balance Sheets and are reflected as cash provided by operating activities on the Condensed Consolidated Statements of Cash Flows.

1 unchanged sentence

Inventories consist of the following (in millions):

November 30, 2023

August 31, 2023

February 29, 2024 August 31, 2023 (1)

Raw materials $ 4,445 $ 4,804

3 unchanged sentences

Inventories, net $ 4,821 $ 5,206

(1) Excludes $ 354 million and $ 559 million of inventories, net classified as held for sale as of November 30, 2023 and August 31, 2023, respectively.

(1) Excludes $ 559 million of inventories, net classified as held for sale as of August 31, 2023.

See Note 15 – “Business Acquisitions and Divestitures” for additional information.

Notes Payable and Long-Term Debt

Notes payable and long-term debt outstanding as of November 30, 2023 and August 31, 2023 are summarized below (in millions):

Maturity Date

November 30, 2023

August 31, 2023

Notes payable and long-term debt outstanding as of February 29, 2024 and August 31, 2023 are summarized below (in millions):

Maturity Date February 29, 2024 August 31, 2023

3.950 % Senior Notes

Jan 12, 2028 498 497

3.600 % Senior Notes

Jan 15, 2030 497 496

3.000 % Senior Notes

Jan 15, 2031 593 593

1.700 % Senior Notes

Apr 15, 2026 498 498

4.250 % Senior Notes

May 15, 2027 496 495

5.450 % Senior Notes

Feb 1, 2029 296 296

Borrowings under credit facilities (1)(2)

Jan 22, 2026 and Jan 22, 2028 — —

Borrowings under loans

Borrowings under loans Jul 31, 2026 — —

Total notes payable and long-term debt 2,878 2,875

1 unchanged sentence

Notes payable and long-term debt, less current installments

(1) As of November 30, 2023, 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 February 10, 2023 (the “Credit Facility”) acts as the back-up facility for commercial paper outstanding, if any.

$ 2,878 $ 2,875

(1) On February 23, 2024, the Company entered into an amendment (the “Amendment”) to its 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 Company’s three-year revolving credit facility (the “ Three-Year Revolving Credit Facility”) and the Company’s five-year revolving credit facility (the “ Five-Year Revolving Credit Facility”) and (ii) extended the termination date of the Three-Year Revolving Credit Facility (with respect to the available commitments of the extending lenders) to January 22, 2026, and of the Five-Year Revolving Credit Facility (with respect to the available commitments of the extending lenders) to January 22, 2028, in each case subject to an additional one-year extension at the option of the Company.

(2) As of February 29, 2024, the Company has $ 3.9 billion in available unused borrowing capacity under its revolving credit facilities.

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.

4 unchanged sentences

The Company is also subject to certain covenants requiring the Company to offer to repurchase the 3.950 %, 3.600 %, 3.000 %, 1.700 %, 4.250 % or 5.450 % Senior Notes upon a change of control.

As of November 30, 2023 and August 31, 2023, the Company was in compliance with its debt covenants.

As of February 29, 2024 and August 31, 2023, 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.

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 global asset-backed securitization program recognized during the three months ended November 30, 2023 and 2022 were not material.

Servicing fees related to the global asset-backed securitization program recognized during the three months and six months ended February 29, 2024 and February 28, 2023 were not material.

The special purpose entity in the global asset-backed securitization program is a wholly-owned subsidiary of the Company and is included in the Company’s Condensed Consolidated Financial Statements.

Certain unsold receivables covering up to the maximum amount of net cash proceeds available under the domestic, or U.S., portion of the global asset-backed securitization program are pledged as collateral to the unaffiliated financial institution as of November 30, 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.

As of November 30, 2023, the Company had no available liquidity under its global asset-backed securitization program.

The global asset-backed securitization program expires on November 25, 2024.

Effective February 20, 2024, the terms of the global asset-backed securitization program were amended to increase the maximum amount of net cash proceeds available at any one time from $ 600 million to $ 700 million.

As of February 29, 2024, the Company had up to $ 15 million in available liquidity under its global asset-backed securitization program.

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

Three months ended

November 30, 2023

November 30, 2022

Three months ended Six months ended

February 29, 2024 February 28, 2023 February 29, 2024 February 28, 2023

Trade accounts receivable sold (1)

$ 968 $ 998 $ 1,957 $ 2,064

Cash proceeds received (2)

$ 955 $ 989 $ 1,934 $ 2,047

Pre-tax losses on sale of receivables (3)

$ 13 $ 9 $ 23 $ 17

2 unchanged sentences

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

As of November 30, 2023 and August 31, 2023, the Company was in compliance with all covenants under the global asset-backed securitization program.

As of February 29, 2024 and August 31, 2023, 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, 2023

August 31, 2023

February 29, 2024 August 31, 2023 (2)

Inventory deposits $ 1,699 $ 1,839

3 unchanged sentences

Accrued expenses $ 5,548 $ 5,515

(1) Revenue recognized during the three months ended November 30, 2023 and 2022 that was included in the contract liability balance as of August 31, 2023 and 2022 was $ 161 million and $ 139 million , respectively.

(2) Excludes $ 304 million and $ 364 million of accrued expenses classified as held for sale as of November 30, 2023 and August 31, 2023, respectively.

(1) Revenue recognized during the three months and six months ended February 29, 2024 that was included in the contract liability balance as of August 31, 2023 was $ 114 million and $ 275 million, respectively.

Revenue recognized during the three months and six months ended February 28, 2023 that was included in the contract liability balance as of August 31, 2022 was $ 115 million and $ 254 million, respectively.

(2) Excludes $ 364 million of accrued expenses classified as held for sale as of August 31, 2023.

See Note 15 – “Business Acquisitions and Divestitures” for additional information.

1 unchanged sentence

Net Periodic Benefit Cost

The following table provides information about the net periodic benefit cost for all plans for the three months ended November 30, 2023 and 2022 (in millions):

Three months ended

November 30, 2023

November 30, 2022

The following table provides information about the net periodic benefit cost for all plans for the three months and six months ended February 29, 2024 and February 28, 2023 (in millions):

Three months ended Six months ended

February 29, 2024 February 28, 2023 February 29, 2024 February 28, 2023

Service cost (1)

$ 5 $ 4 $ 10 $ 8

Interest cost (2)

Expected long-term return on plan assets (2)

( 5 ) ( 3 ) ( 9 ) ( 8 )

Recognized actuarial gain (2)

( 1 ) ( 2 ) ( 3 ) ( 4 )

Amortization of actuarial gain (2)(3)

( 1 ) ( 2 ) ( 2 ) ( 3 )

Amortization of prior service cost (2)

12 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 $ 153 million and $ 491 million as of November 30, 2023 and August 31, 2023, respectively.

A hedging relationship existed with an aggregate notional amount outstanding of $ 167 million and $ 491 million as of February 29, 2024 and August 31, 2023, respectively.

The related forward foreign exchange contracts have been designated as hedging instruments and are accounted for as cash flow hedges.

The forward foreign exchange contract transactions will effectively lock in the value of anticipated foreign currency denominated revenues and expenses against foreign currency fluctuations.

The anticipated foreign currency denominated revenues and expenses being hedged are expected to occur between December 1, 2023 and August 31, 2024.

The anticipated foreign currency denominated revenues and expenses being hedged are expected to occur between March 1, 2024 and November 30, 2024.

In addition to derivatives that are designated as hedging instruments and qualify for hedge accounting, the Company also enters into forward contracts to economically hedge transactional exposure associated with commitments arising from trade accounts receivable, trade accounts payable, fixed purchase obligations and intercompany transactions denominated in a currency other than the functional currency of the respective operating entity.

The aggregate notional amount of these outstanding contracts as of November 30, 2023 and August 31, 2023, was $ 4.3 billion and $ 4.0 billion, respectively.

The aggregate notional amount of these outstanding contracts as of February 29, 2024 and August 31, 2023, was $ 2.4 billion and $ 4.0 billion, respectively.

The gains and losses on cash flow hedges 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.

1 unchanged sentence

The maturity dates and aggregate notional amount outstanding of net investment hedges are as follows (in millions):

Maturity date

November 30, 2023

August 31, 2023

Maturity date February 29, 2024 August 31, 2023

September 2023 $ — $ 34

October 2023 — 96

January 2024 — 96

April 2024 103 68

July 2024 178 102

October 2024 96 —

Total $ 377 $ 396

The gains and losses on net investment hedges are included in change in foreign currency translation 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.

1 unchanged sentence

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

Derivatives Not Designated as Hedging Instruments Under ASC 815

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

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

Three months ended

November 30, 2023

November 30, 2022

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):

Derivatives Not Designated as Hedging Instruments Under ASC 815 Location of (Loss) Gain on Derivatives Recognized in Net Income Amount of (Loss) Gain Recognized in Net Income on Derivatives

Three months ended Six months ended

February 29, 2024 February 28, 2023 February 29, 2024 February 28, 2023

Forward foreign exchange contracts (1)

Cost of revenue $ ( 11 ) $ 30 $ 7 $ ( 16 )

(1) For the three months ended November 30, 2023, the Company recognized $ 38 million of foreign currency losses in cost of revenue, which are offset by the gains from the forward foreign exchange contracts.

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.

(1) For the three months ended February 29, 2024, the Company recognized $ 3 million of foreign currency gains in cost of revenue, which are offset by the losses from the forward foreign exchange contracts.

For the six months ended February 29, 2024, the Company recognized $ 35 million of foreign currency losses in cost of revenue, which are offset by the gains from the forward foreign exchange contracts.

For the three months ended February 28, 2023, the Company recognized $ 53 million of foreign currency losses in cost of revenue, which are offset by the gains from the forward foreign exchange contracts.

For the six months ended February 28, 2023, the Company recognized $ 4 million of foreign currency losses in cost of revenue, in addition to losses from the forward foreign exchange contracts.

Interest Rate Risk Management

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

As of November 30, 2023, there are no outstanding interest rate swaps.

As of February 29, 2024, there are no outstanding interest rate swaps.

Accumulated Other Comprehensive Income

The following table sets forth the changes in AOCI, net of tax, by component for the three months ended November 30, 2023 (in millions):

The following table sets forth the changes in AOCI, net of tax, by component for the six months ended February 29, 2024 (in millions):

Foreign Currency

Translation Adjustment

Net Investment Hedges

Actuarial Gain (Loss)

Prior Service (Cost) Credit

Translation Adjustment Net Investment Hedges Derivative

Instruments Actuarial Gain (Loss) Prior Service (Cost) Credit Total

Balance as of August 31, 2023

Other comprehensive income (loss) before reclassifications

$ ( 59 ) $ ( 4 ) $ 14 $ 46 $ ( 14 ) $ ( 17 )

Other comprehensive loss before reclassifications ( 1 ) — ( 4 ) — — ( 5 )

Amounts reclassified from AOCI ( 2 ) ( 4 ) 14 ( 5 ) 2 5

Other comprehensive income (loss) (1)

Balance as of November 30, 2023

Other comprehensive (loss) income (1)

( 3 ) ( 4 ) 10 ( 5 ) 2 —

Balance as of February 29, 2024

$ ( 62 ) $ ( 8 ) $ 24 $ 41 $ ( 12 ) $ ( 17 )

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

The following table sets forth the amounts reclassified from AOCI into the Condensed Consolidated Statements of Operations, and the associated financial statement line item, net of tax, for the periods indicated (in millions):

Three months ended

Comprehensive Income Components

Financial Statement Line Item

November 30, 2023

November 30, 2022

Realized losses (gains) on derivative instruments:

Foreign exchange contracts

Cost of revenue

Interest rate contracts

Interest expense, net

Three months ended Six months ended

Comprehensive Income Components Financial Statement Line Item February 29, 2024 February 28, 2023 February 29, 2024 February 28, 2023

Realized gains on foreign currency translation Gain from the divestiture of businesses $ ( 2 ) $ — $ ( 2 ) $ —

Realized gains on net investment hedges Gain from the divestiture of businesses ( 4 ) — ( 4 ) —

Realized (gains) losses on derivative instruments:

Foreign exchange contracts Cost of revenue ( 2 ) 1 15 44

Interest rate contracts Interest expense, net — — ( 1 ) —

Realized (gains) losses on pension and postretirement plans:

Actuarial gains

( 2 ) ( 4 ) ( 5 ) ( 7 )

Prior service costs

Total amounts reclassified from AOCI (3)

$ ( 9 ) $ ( 2 ) $ 5 $ 39

(1) The Company expects to reclassify $ 2 million into earnings during the next twelve months, which will primarily be classified as a component of cost of revenue.

1 unchanged sentence

Refer to Note 7 – “Postretirement and Other Employee Benefits” for additional information.

(3) Amounts are net of tax, which are immaterial for the three months ended November 30, 2023 and 2022.

(3) Amounts are net of tax, which are immaterial for the three months and six months ended February 29, 2024 and February 28, 2023.

Stockholders’ Equity

The Company recognized stock-based compensation expense within selling, general and administrative expense as follows (in millions):

Three months ended

November 30, 2023

November 30, 2022

Three months ended Six months ended

February 29, 2024 February 28, 2023 February 29, 2024 February 28, 2023

Restricted stock units

$ 18 $ 16 $ 60 $ 54

Employee stock purchase plan 5 4 9 8

As of November 30, 2023 , the shares available to be issued under t he 2021 Equity Incentive Plan were 7,738,300 .

Total $ 23 $ 20 $ 69 $ 62

As of February 29, 2024 , the shares available to be issued under t he 2021 Equity Incentive Plan were 7,813,996 .

Restricted Stock Units

5 unchanged sentences

The market-based restricted stock units have a vesting condition that is tied to the Company’s total shareholder return based on the Company’s stock performance in relation to the companies in the Standard and Poor’s (S&P) Super Composite Technology Hardware and Equipment Index excluding the Company.

During the three months ended November 30, 2023 and 2022, the Company awarded approximately 0.4 million and 0.9 million time-based restricted stock units, respectively, 0.1 million and 0.2 million performance-based restricted stock units, respectively, and 0.1 million and 0.2 million market-based restricted stock units, respectively.

During the six months ended February 29, 2024 and February 28, 2023, the Company awarded approximately 0.4 million and 0.9 million time-based restricted stock units, respectively, 0.1 million and 0.2 million performance-based restricted stock units, respectively, and 0.1 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, 2023

February 29, 2024

Unrecognized stock-based compensation expense – restricted stock units $ 67

Remaining weighted-average period for restricted stock units expense

Remaining weighted-average period for restricted stock units expense 1.5 years

Common Stock Outstanding

The following represents the common stock outstanding for the periods indicated:

Three months ended

November 30, 2023

November 30, 2022

Three months ended Six months ended

February 29, 2024 February 28, 2023 February 29, 2024 February 28, 2023

Common stock outstanding:

Beginning balances

128,647,431 134,231,300 131,294,422 135,493,980

Shares issued under employee stock purchase plan

338,316 629,336 338,316 629,336

Vesting of restricted stock

2,741 148,718 1,769,516 2,010,396

Purchases of treasury stock under employee stock plans

Treasury shares purchased (1)(2)

( 795 ) ( 47,242 ) ( 526,823 ) ( 570,649 )

Treasury shares purchased (1)(2)

( 6,547,086 ) ( 1,723,744 ) ( 10,434,824 ) ( 4,324,695 )

Ending balances

122,440,607 133,238,368 122,440,607 133,238,368

(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”).

3 unchanged sentences

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 the Company’s common stock.

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

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

As of February 29, 2024, 10.4 million shares had been repurchased for $ 1.3 billion, excluding excise tax, and $ 1.2 billion remains available under the amended 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 three months ended November 30, 2023, the Company’s five largest customers accounted for approximately 44 % of its net revenue and 76 customers accounted for approximately 90 % of its net revenue.

During the six months ended February 29, 2024, the Company’s five largest customers accounted for approximately 39 % of its net revenue and 82 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.

The DMS segment included the results of the Company’s mobility business prior to the closing of its sale on December 29, 2023.

The Company procures components from a broad group of suppliers.

6 unchanged sentences

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

Three months ended

November 30, 2023

November 30, 2022

Three months ended Six months ended

February 29, 2024 February 28, 2023 February 29, 2024 February 28, 2023

Segment income and reconciliation of income before income tax

EMS $ 145 $ 205 $ 310 $ 403

DMS 193 186 527 449

Total segment income $ 338 $ 391 $ 837 $ 852

3 unchanged sentences

Restructuring, severance and related charges ( 70 ) — ( 197 ) ( 45 )

Costs from the divestiture of businesses

Gain from the divestiture of businesses 944 — 944 —

Acquisition and divestiture related charges ( 46 ) — ( 61 ) —

Other expense (net of periodic benefit cost) ( 25 ) ( 20 ) ( 48 ) ( 39 )

3 unchanged sentences

Three months ended

November 30, 2023

November 30, 2022

February 29, 2024 February 28, 2023

EMS DMS Total EMS DMS Total

Timing of transfer

Point in time $ 1,206 $ 773 $ 1,979 $ 1,267 $ 1,416 $ 2,683

Over time 2,125 2,663 4,788 2,784 2,667 5,451

Total $ 3,331 $ 3,436 $ 6,767 $ 4,051 $ 4,083 $ 8,134

Six months ended

February 29, 2024 February 28, 2023

EMS DMS Total EMS DMS Total

Timing of transfer

Point in time $ 2,301 $ 2,787 $ 5,088 $ 2,805 $ 3,696 $ 6,501

Over time 4,622 5,444 10,066 5,792 5,476 11,268

Total $ 6,923 $ 8,231 $ 15,154 $ 8,597 $ 9,172 $ 17,769

The Company operates in more than 30 countries worldwide.

1 unchanged sentence

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

Three months ended

November 30, 2023

November 30, 2022

Three months ended Six months ended

February 29, 2024 February 28, 2023 February 29, 2024 February 28, 2023

Foreign source revenue 82.5 % 84.0 % 84.7 % 85.0 %

1 unchanged sentence

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

Three months ended

November 30, 2023

November 30, 2022

Three months ended Six months ended

February 29, 2024 (1)

February 28, 2023 (2)

February 29, 2024 (1)

February 28, 2023 (2)

Employee severance and benefit costs $ 28 $ ( 4 ) $ 123 $ 36

Lease costs 1 — 1 —

Asset write-off costs 33 4 55 5

Other costs 8 — 18 4

Total restructuring, severance and related charges (3)

(1) Charges for the three months ended November 30, 2023, related to the 2024 Restructuring Plan and included $ 29 million recorded in the EMS segment, $ 79 million recorded in the DMS segment and $ 19 million of non-allocated charges.

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

$ 70 $ — $ 197 $ 45

(1) Primarily relates to the 2024 Restructuring Plan.

(2) Primarily relates to headcount reduction to further optimize the Company’s business activities.

(3) Includes $ 11 million and $ 0 million recorded in the EMS segment, $ 35 million and $ 0 million recorded in the DMS segment and $ 24 million and $ 0 million of non-allocated charges for the three months ended February 29, 2024 and February 28, 2023, respectively.

Includes $ 40 million and $ 4 million recorded in the EMS segment, $ 114 million and $ 33 million recorded in the DMS segment and $ 43 million and $ 8 million of non-allocated charges for the six months ended February 29, 2024 and February 28, 2023, respectively.

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

4 unchanged sentences

The Company currently expects to recognize approximately $ 300 million in pre-tax restructuring and other related costs over the course of the Company’s 2024 fiscal year.

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.

The restructuring and other related charges are expected to include $ 150 million to $ 180 million of employee severance and benefit costs;

$ 80 million to $ 120 million of asset write-off costs;

and $ 30 million to $ 40 million of contract termination costs and other related costs.

The amount and timing of the actual charges may vary due to a variety of factors, including the finalization of timetables for the transition of functions, consultation with employees and their representatives, as well as the impact of jurisdictional statutory severance requirements.

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

The table below summarizes the Company’s liability activity, primarily associated with the 2024 Restructuring Plan (in millions):

and Benefit Costs

Asset Write-off Costs

Other Related Costs

and Benefit Costs Lease Costs Asset Write-off Costs Other Related Costs Total

Balance as of August 31, 2023

$ — $ — $ — $ — $ —

Restructuring related charges 123 1 55 18 197

1 unchanged sentence

Cash payments ( 57 ) ( 1 ) — ( 4 ) ( 62 )

Balance as of November 30, 2023

Balance as of February 29, 2024

$ 66 $ — $ — $ 9 $ 75

Effective Income Tax Rate

federal statutory income tax rate and the Company's effective income tax rate are as follows:

Three months ended

November 30, 2023

November 30, 2022

Three months ended Six months ended

February 29, 2024 February 28, 2023 February 29, 2024 February 28, 2023

federal statutory income tax rate 21.0 % 21.0 % 21.0 % 21.0 %

Effective income tax rate 12.7 % 27.6 % 13.6 % 26.6 %

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.

The effective income tax rate differed for the three months and six months ended February 29, 2024, compared to the three months and six months ended February 28, 2023, primarily due to:

(i) a change in the jurisdictional mix of earnings, driven in part by restructuring charges and (ii) the gain from the divestiture of the mobility business and corresponding $ 58 million of income tax expense during the three months ended February 29, 2024.

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

federal statutory income tax rate of 21.0% during the three months ended November 30, 2023 and 2022, primarily due to:

(i) the jurisdictional mix of earnings, (ii) losses in tax jurisdictions with existing valuation allowances, (iii) tax incentives granted to sites in China, Malaysia, Singapore and Vietnam, (iv) a $ 19 million income tax benefit associated with the reversal of a non-U.S.

unrecognized tax benefit due to audit closure for the three months ended November 30, 2023, and (v) 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 .

federal statutory income tax rate of 21.0% during the three months and six months ended February 29, 2024 and February 28, 2023, primarily due to:

(i) the jurisdictional mix of earnings, (ii) losses in tax jurisdictions with existing valuation allowances, (iii) tax incentives granted to sites in China, Malaysia, Singapore and Vietnam, and (iv) the gain from the divestiture of the mobility business and corresponding $ 58 million of income tax expense during the three months ended February 29, 2024.

Earnings Per Share and Dividends

7 unchanged sentences

Potential shares of common stock not included in the computation of earnings per share because their effect would have been antidilutive or because the performance criterion was not met were as follows (in thousands):

Three months ended

November 30, 2023

November 30, 2022

Three months ended Six months ended

February 29, 2024 February 28, 2023 February 29, 2024 February 28, 2023

Restricted stock units 293.5 363.7 309.5 363.7

The following table sets forth cash dividends declared by the Company to common stockholders during the three months ended November 30, 2023 and 2022 (in millions, except for per share data):

Declaration Date

Total of Cash

Date of Record for

Dividend Payment

Dividend Cash

The following table sets forth cash dividends declared by the Company to common stockholders during the six months ended February 29, 2024 and February 28, 2023 (in millions, except for per share data):

Declaration Date Dividend

per Share Total of Cash

Declared Date of Record for

Dividend Payment Dividend Cash

Fiscal Year 2024:

October 19, 2023

November 15, 2023

December 4, 2023

October 19, 2023 $ 0.08 $ 11 November 15, 2023 December 4, 2023

January 25, 2024 $ 0.08 $ 10 February 15, 2024 March 4, 2024

Fiscal Year 2023:

October 20, 2022

November 15, 2022

December 2, 2022

October 20, 2022 $ 0.08 $ 12 November 15, 2022 December 2, 2022

January 26, 2023 $ 0.08 $ 10 February 15, 2023 March 2, 2023

Business Acquisitions and Divestitures

2 unchanged sentences

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.

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

Assets acquired of $ 87 million, including $ 40 million in intangible assets and $ 38 million in goodwill, and liabilities assumed of $ 26 million were recorded at their estimated fair values as of the acquisition date.

2 unchanged sentences

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

The results of operations were

included in the Company’s condensed consolidated financial results beginning on November 1, 2023.

The results of operations were included in the Company’s 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.

2 unchanged sentences

Ltd., a Hong Kong limited liability company (“Purchaser” or “BYDE”), its product manufacturing business in Chengdu, including its 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”), the Company 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.

As of August 31, 2023, the Company determined the Business met the criteria to be classified as held for sale.

Accordingly, the Company presented the assets and liabilities of the Business as held for sale in the Condensed Consolidated Balance Sheets as of November 30, 2023 and August 31, 2023.

Assets and liabilities classified as held for sale had a carrying value less than the estimated fair value less cost to sell and, thus, no adjustment to the carrying value of the disposal group was necessary.

Depreciation and amortization expense for long-lived assets was not recorded for the period in which these assets were classified as held for sale.

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

Following is a summary of the carrying amounts of the major classes of assets and liabilities that were classified as held for sale (in millions):

November 30, 2023

August 31, 2023

Assets held for sale:

Accounts receivable, net of allowance for credit losses

Inventories, net of reserve for excess and obsolete inventory

Prepaid expenses and other current assets

Property, plant and equipment, net of accumulated depreciation

Operating lease right-of-use asset

Deferred income taxes

Liabilities held for sale:

Accounts payable

Accrued expenses

Non-current operating lease liabilities

On December 29, 2023 (the “Closing Date”), the Company completed the sale.

As a result of the transaction, the Company derecognized net assets of approximately $ 1.2 billion, and recorded a pre-tax gain of $ 944 million, subject to certain post-closing adjustments that are expected to be finalized in the third quarter of fiscal year 2024.

In addition, the Company agreed to indemnify the Purchaser from certain liabilities that may arise post-close that relate to periods prior to the Closing Date.

The Company incurred transaction and disposal costs in connection with the sale of approximately $ 46 million and $ 61 million during the three months and six months ended February 29, 2024, respectively, which are included in continuing operations in the Company’s Condensed Consolidated Statement of Operations.

The Company performs a goodwill impairment analysis on an annual basis and whenever events or changes in circumstances indicate that the carrying value may not be recoverable.

In connection with the preparation of the Company’s financial statements for the quarter ended February 29, 2024, the Company completed an impairment analysis for goodwill recorded within the reporting unit impacted by the divestiture of the Business.

The quantitative assessment was used, and the Company determined that it is more likely than not that the fair value of the impacted reporting unit is in excess of the carrying value and that no impairment existed subsequent to the closing of the Business.

The Company allocated goodwill to the disposal group based on the relative fair value of the Business as compared to the impacted reporting unit.

In the second quarter of fiscal year 2024 and in connection with the divestiture of the Business, the Company made a strategic decision that the indefinite-lived (“Green Point”) trade name of $ 51 million acquired during the acquisition of Green Point should no longer be classified as an indefinite-lived intangible asset.

Accordingly, prior to reclassifying the trade name to a finite-lived intangible asset, the Company completed a quantitative assessment for impairment and determined the fair value of the asset exceeded the carrying value.

As such, the trade name was assigned a two-year estimated useful life and is being amortized on a straight-line basis as of the Closing Date.

Fair Value Measurements

1 unchanged sentence

The following table presents the fair value of the Company's financial assets and liabilities measured at fair value by hierarchy level on a recurring basis as of the periods indicated (in millions):

Fair Value Hierarchy

November 30, 2023

August 31, 2023

Fair Value Hierarchy February 29, 2024 August 31, 2023

Cash and cash equivalents:

Cash equivalents Level 1 (1)

Prepaid expenses and other current assets:

Short-term investments

Short-term investments Level 1 26 25

Forward foreign exchange contracts:

9 unchanged sentences

Derivatives designated as hedging instruments (Note 8)

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

(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.

1 unchanged sentence

The carrying amounts of cash and cash equivalents, trade accounts receivable, prepaid expenses and other current assets, accounts payable and accrued expenses approximate fair value because of the short-term nature of these financial instruments.

The carrying amounts of borrowings under credit facilities and under loans approximates fair value as interest rates on these instruments approximates current market rates.

The carrying amounts of borrowings under credit facilities and under loans approximate fair value as interest rates on these instruments approximate current market rates.

Notes payable and long-term debt is carried at amortized cost;

1 unchanged sentence

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, 2023

August 31, 2023

Fair Value Hierarchy

Carrying Amount

February 29, 2024 August 31, 2023

Fair Value Hierarchy Carrying Amount Fair Value Carrying Amount Fair Value

Notes payable and long-term debt:

3.950 % Senior Notes

$ 498 $ 473 $ 497 $ 468

3.600 % Senior Notes

$ 497 $ 451 $ 496 $ 448

3.000 % Senior Notes

$ 593 $ 512 $ 593 $ 502

1.700 % Senior Notes

$ 498 $ 463 $ 498 $ 452

4.250 % Senior Notes

$ 496 $ 483 $ 495 $ 478

5.450 % Senior Notes

$ 296 $ 300 $ 296 $ 297

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

48 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