What changed in this filing

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Item 1. Financial Statements

2024-07-09 compared with 2024-04-05 · 111 added, 100 removed, 586 unchanged (26% of the section changed)

3 unchanged sentences

(in millions, except for share data)

February 29, 2024

(Unaudited) August 31, 2023

7 unchanged sentences

Total current assets 12,893 14,730

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

Property, plant and equipment, net of accumulated depreciation of $ 4,668 as of May 31, 2024 and $ 4,512 as of August 31, 2023

Operating lease right-of-use asset 366 367

23 unchanged sentences

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

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

276,079,193 and 273,949,811 shares issued and 118,720,679 and 131,294,422 shares outstanding as of May 31, 2024 and August 31, 2023, respectively

Additional paid-in capital 2,881 2,795

2 unchanged sentences

( 18 ) ( 17 )

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

Treasury stock at cost, 157,358,514 and 142,655,389 shares as of May 31, 2024 and August 31, 2023, respectively

( 6,219 ) ( 4,324 )

8 unchanged sentences

(in millions, except for per share data)

Three months ended Six months ended

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

Three months ended Nine months ended

May 31, 2024 May 31, 2023 May 31, 2024 May 31, 2023

Net revenue $ 6,765 $ 8,475 $ 21,919 $ 26,244

27 unchanged sentences

(in millions)

Three months ended Six months ended

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

Three months ended Nine months ended

May 31, 2024 May 31, 2023 May 31, 2024 May 31, 2023

Net income $ 129 $ 233 $ 1,250 $ 663

Other comprehensive (loss) income:

Other comprehensive income (loss):

Change in foreign currency translation 1 3 ( 6 ) 21

16 unchanged sentences

(in millions)

Three months ended Six months ended

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

Three months ended Nine months ended

May 31, 2024 May 31, 2023 May 31, 2024 May 31, 2023

Total stockholders' equity, beginning balances

47 unchanged sentences

(in millions)

Six months ended

February 29, 2024 February 28, 2023

Nine months ended

May 31, 2024 May 31, 2023

Cash flows provided by operating activities:

23 unchanged sentences

Effect of exchange rate changes on cash and cash equivalents ( 6 ) ( 4 )

Net increase (decrease) in cash and cash equivalents

Net increase 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 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.

Results for the nine months ended May 31, 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 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:

As of May 31, 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 $ 1.9 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 1.9 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 and six months ended February 29, 2024 and February 28, 2023 were not material.

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

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 Six months ended

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

Three months ended Nine months ended

May 31, 2024 May 31, 2023 May 31, 2024 May 31, 2023

Trade accounts receivable sold (1)

6 unchanged sentences

Inventories consist of the following (in millions):

February 29, 2024 August 31, 2023 (1)

May 31, 2024 August 31, 2023 (1)

Raw materials $ 4,104 $ 4,804

6 unchanged sentences

Notes Payable and Long-Term Debt

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

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

Maturity Date May 31, 2024 August 31, 2023

3.950 % Senior Notes

19 unchanged sentences

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.

(2) As of May 31, 2024, the Company has $ 4.0 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.

5 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 February 29, 2024 and August 31, 2023, the Company was in compliance with its debt covenants.

As of May 31, 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.

2 unchanged sentences

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 and six months ended February 29, 2024 and February 28, 2023 were not material.

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

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 February 29, 2024.

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 Six months ended

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

As of May 31, 2024, the Company had no available liquidity under its global asset-backed securitization program.

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

Three months ended Nine months ended

May 31, 2024 May 31, 2023 May 31, 2024 May 31, 2023

Trade accounts receivable sold (1)

8 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 February 29, 2024 and August 31, 2023, the Company was in compliance with all covenants under the global asset-backed securitization program.

As of May 31, 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):

February 29, 2024 August 31, 2023 (2)

May 31, 2024 August 31, 2023 (2)

Inventory deposits $ 1,564 $ 1,839

3 unchanged sentences

Accrued expenses $ 5,929 $ 5,515

(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.

(1) Revenue recognized during the three months and nine months ended May 31, 2024 that was included in the contract liability balance as of August 31, 2023 was $ 116 million and $ 391 million, respectively.

Revenue recognized during the three months and nine months ended May 31, 2023 that was included in the contract liability balance as of August 31, 2022 was $ 99 million and $ 353 million, respectively.

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

2 unchanged sentences

Net Periodic Benefit Cost

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

The following table provides information about the net periodic benefit cost for all plans for the three months and nine months ended May 31, 2024 and 2023 (in millions):

Three months ended Nine months ended

May 31, 2024 May 31, 2023 May 31, 2024 May 31, 2023

Service cost (1)

21 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 $ 167 million and $ 491 million as of February 29, 2024 and August 31, 2023, respectively.

A hedging relationship existed with an aggregate notional amount outstanding of $ 283 million and $ 491 million as of May 31, 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 March 1, 2024 and November 30, 2024.

The anticipated foreign currency denominated revenues and expenses being hedged are expected to occur between June 1, 2024 and May 31, 2025.

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 February 29, 2024 and August 31, 2023, was $ 2.4 billion and $ 4.0 billion, respectively.

The aggregate notional amount of these outstanding contracts as of May 31, 2024 and August 31, 2023, was $ 2.5 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 February 29, 2024 August 31, 2023

Maturity date May 31, 2024 August 31, 2023

September 2023 $ — $ 34

4 unchanged sentences

October 2024 115 —

January 2025 101 —

Total $ 392 $ 396

2 unchanged sentences

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

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

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

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 Nine months ended

May 31, 2024 May 31, 2023 May 31, 2024 May 31, 2023

Forward foreign exchange contracts (1)

Cost of revenue $ — $ ( 41 ) $ 7 $ ( 57 )

(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.

(1) For the three months and nine months ended May 31, 2024, the Company recognized $ 1 million and $ 36 million, respectively, of foreign currency losses in cost of revenue, which are offset by the gains from the forward foreign exchange contracts.

For the three months and nine months ended May 31, 2023, the Company recognized $ 24 million and $ 20 million, respectively, of foreign currency gains in cost of revenue, which are offset by the 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 February 29, 2024, there are no outstanding interest rate swaps.

As of May 31, 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 six months ended February 29, 2024 (in millions):

The following table sets forth the changes in AOCI, net of tax, by component for the nine months ended May 31, 2024 (in millions):

Foreign Currency

3 unchanged sentences

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

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

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

Amounts reclassified from AOCI ( 2 ) ( 4 ) 13 ( 7 ) 3 3

1 unchanged sentence

( 7 ) 1 9 ( 7 ) 3 ( 1 )

Balance as of February 29, 2024

Balance as of May 31, 2024

$ ( 66 ) $ ( 3 ) $ 23 $ 39 $ ( 11 ) $ ( 18 )

1 unchanged sentence

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 Six months ended

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

Three months ended Nine months ended

Comprehensive Income Components Financial Statement Line Item May 31, 2024 May 31, 2023 May 31, 2024 May 31, 2023

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

12 unchanged sentences

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 and six months ended February 29, 2024 and February 28, 2023.

(3) Amounts are net of tax, which are immaterial for the three months and nine months ended May 31, 2024 and 2023.

Stockholders’ Equity

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

Three months ended Six months ended

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

Three months ended Nine months ended

May 31, 2024 May 31, 2023 May 31, 2024 May 31, 2023

Restricted stock units (1)

2 unchanged sentences

Total $ 3 $ 18 $ 72 $ 80

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

(1) During the three months ended May 31, 2024, the Company recorded a $ 13 million reversal to stock-based compensation expense primarily due to forfeitures of time-based, performance-based and market-based restricted stock awards.

As of May 31, 2024 , the shares available to be issued under t he 2021 Equity Incentive Plan were 8,059,728 .

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 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.

During the nine months ended May 31, 2024 and 2023, the Company awarded approximately 0.5 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):

February 29, 2024

Unrecognized stock-based compensation expense – restricted stock units $ 55

2 unchanged sentences

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

Three months ended Six months ended

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

Three months ended Nine months ended

May 31, 2024 May 31, 2023 May 31, 2024 May 31, 2023

Common stock outstanding:

19 unchanged sentences

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 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.

As of May 31, 2024, 14.2 million shares had been repurchased for $ 1.8 billion, excluding excise tax, and $ 676 million remains available under the amended 2023 Share Repurchase Program.

In June 2024, as part of the amended 2023 Share Repurchase Program, the Company repurchased $ 121 million, excluding excise tax, and entered into ASR agreements to repurchase an additional $ 555 million, excluding excise tax, of the Company’s common stock.

Under the ASR agreements, the Company made payments of $ 555 million to participating financial institutions and received an initial delivery of shares of common stock.

The delivery of any remaining shares will occur at the final settlement of the transactions under the ASR agreements.

Concentration of Risk and Segment Data

1 unchanged sentence

Sales of the Company’s products are concentrated among specific customers.

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.

During the nine months ended May 31, 2024, the Company’s five largest customers accounted for approximately 37 % of its net revenue and 86 customers accounted for approximately 90 % of its net revenue.

Sales to these customers were reported in the Electronics Manufacturing Services (“EMS”) and Diversified Manufacturing Services (“DMS”) operating segments.

8 unchanged sentences

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

Three months ended Six months ended

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

Three months ended Nine months ended

May 31, 2024 May 31, 2023 May 31, 2024 May 31, 2023

Segment income and reconciliation of income before income tax

6 unchanged sentences

Restructuring, severance and related charges (1)

( 55 ) — ( 252 ) ( 45 )

Business interruption and impairment charges, net (2)

( 14 ) — ( 14 ) —

Gain from the divestiture of businesses (3)

Acquisition and divestiture related charges (3)

( 3 ) — ( 64 ) —

Other expense (net of periodic benefit cost) ( 24 ) ( 22 ) ( 72 ) ( 61 )

1 unchanged sentence

Income before income tax $ 201 $ 306 $ 1,498 $ 892

(1) Charges recorded during the three months and nine months ended May 31, 2024, related to the 2024 Restructuring Plan.

Charges recorded during the nine months ended May 31, 2023, related to headcount reduction to further optimize the Company’s business activities.

(2) Charges recorded during the three months and nine months ended May 31, 2024, related to costs associated with product quality liabilities, which is classified as a component of cost of revenue and selling, general and administrative expenses in the Condensed Consolidated Statements of Operations.

(3) The Company completed the divestiture of its mobility business and recorded a pre-tax gain of $ 944 million, subject to certain post-closing adjustments that are still being finalized.

The Company incurred transaction and disposal costs in connection with the sale of approximately $ 64 million during the nine months ended May 31, 2024.

The following table presents the Company’s revenues disaggregated by segment (in millions):

Three months ended

February 29, 2024 February 28, 2023

May 31, 2024 May 31, 2023

EMS DMS Total EMS DMS Total

3 unchanged sentences

Total $ 3,397 $ 3,368 $ 6,765 $ 4,130 $ 4,345 $ 8,475

Six months ended

February 29, 2024 February 28, 2023

Nine months ended

May 31, 2024 May 31, 2023

EMS DMS Total EMS DMS Total

6 unchanged sentences

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

Three months ended Six months ended

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

Three months ended Nine months ended

May 31, 2024 (1)

May 31, 2023 May 31, 2024 (1)

Foreign source revenue 80.5 % 86.9 % 83.4 % 85.6 %

(1) Decrease from prior periods is driven by the divestiture of the mobility business during the three months ended February 29, 2024.

Restructuring, Severance and Related Charges

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

Three months ended Six months ended

February 29, 2024 (1)

February 28, 2023 (2)

February 29, 2024 (1)

February 28, 2023 (2)

Three months ended Nine months ended

May 31, 2024 (1)

May 31, 2023 (2)

May 31, 2024 (1)

May 31, 2023 (2)

Employee severance and benefit costs $ 33 $ — $ 156 $ 36

6 unchanged sentences

(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.

(3) Includes $ 23 million and $ 0 million recorded in the EMS segment, $ 15 million and $ 0 million recorded in the DMS segment and $ 17 million and $ 0 million of non-allocated charges for the three months ended May 31, 2024 and 2023, respectively.

Includes $ 63 million and $ 4 million recorded in the EMS segment, $ 129 million and $ 33 million recorded in the DMS segment and $ 60 million and $ 8 million of non-allocated charges for the nine months ended May 31, 2024 and 2023, respectively.

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

16 unchanged sentences

Cash payments ( 91 ) ( 1 ) — ( 9 ) ( 101 )

Balance as of February 29, 2024

Balance as of May 31, 2024

$ 67 $ 1 $ — $ 8 $ 76

1 unchanged sentence

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

Three months ended Six months ended

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

Three months ended Nine months ended

May 31, 2024 May 31, 2023 May 31, 2024 May 31, 2023

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

Effective income tax rate 35.7 % 24.0 % 16.6 % 25.7 %

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 for the three months and nine months ended May 31, 2024, compared to the three months and nine months ended May 31, 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 the corresponding $ 58 million of income tax expense recorded 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 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.

federal statutory income tax rate of 21.0% during the three months and nine months ended May 31, 2024 and 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 the corresponding $ 58 million of income tax expense recorded during the three months ended February 29, 2024.

Earnings Per Share and Dividends

2 unchanged sentences

The Company’s diluted earnings per share is calculated in a similar manner, but includes the effect of dilutive securities.

The difference between the weighted average number of basic shares outstanding and the weighted average number of diluted shares outstanding is primarily due to dilutive unvested restricted stock units.

The difference between the weighted average number of basic

shares outstanding and the weighted average number of diluted shares outstanding is primarily due to dilutive unvested restricted stock units.

Potential shares of common stock are excluded from the computation of diluted earnings per share when their effect would be antidilutive.

2 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 Six months ended

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

Three months ended Nine months ended

May 31, 2024 May 31, 2023 May 31, 2024 May 31, 2023

Restricted stock units 261.9 361.2 278.0 361.2

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):

The following table sets forth cash dividends declared by the Company to common stockholders during the nine months ended May 31, 2024 and 2023 (in millions, except for per share data):

Declaration Date Dividend

5 unchanged sentences

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

April 17, 2024 $ 0.08 $ 9 May 15, 2024 June 4, 2024

Fiscal Year 2023:

1 unchanged sentence

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

April 20, 2023 $ 0.08 $ 11 May 15, 2023 June 2, 2023

Business Acquisitions and Divestitures

4 unchanged sentences

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.

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

The preliminary estimates and measurements are subject to change during the measurement period for assets acquired, liabilities assumed and tax adjustments.

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.

11 unchanged sentences

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 incurred transaction and disposal costs in connection with the sale of approximately $ 64 million during the nine months ended May 31, 2024, 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.

2 unchanged sentences

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.

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 valued at $ 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.

3 unchanged sentences

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 February 29, 2024 August 31, 2023

Fair Value Hierarchy May 31, 2024 August 31, 2023

Cash and cash equivalents:

21 unchanged sentences

The following table presents the carrying amounts and fair values of the Company's notes payable and long-term debt, by hierarchy level as of the periods indicated (in millions):

February 29, 2024 August 31, 2023

May 31, 2024 August 31, 2023

Fair Value Hierarchy Carrying Amount Fair Value Carrying Amount Fair Value

62 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