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Item 8. Financial Statements and Supplementary Data

2023-11-16 compared with 2022-11-10 · 340 added, 323 removed, 655 unchanged (50% of the section changed)

Financial Statements and Supplementary Data

The information required by this item is included below and incorporated by reference from the financial statement schedule included in “Part IV-Item 15(a)(2)”.

The information required by this item is included below and incorporated by reference from the financial statement schedule included in “Part IV-Item 15(a)(2)” of this report.

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of Sanmina Corporation

To the Bo ard of Directors and Stockholders of Sanmina Corporation

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of Sanmina Corporation and its subsidiaries (the “Company”) as of October 1, 2022 and October 2, 2021, and the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows for each of the three years in the period ended October 1, 2022, including the related notes and financial statement schedule listed in the index appearing under Item 15(a)(2) (collectively referred to as the “consolidated financial statements”).

We also have audited the Company's internal control over financial reporting as of October 1, 2022, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of October 1, 2022 and October 2, 2021, and the results of its operations and its cash flows for each of the three years in the period ended October 1, 2022 in conformity with accounting principles generally accepted in the United States of America.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of October 1, 2022, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

We have audited the accompanying consolidated balance sheets of Sanmina Corporation and its subsidiaries (the “Company”) as of September 30, 2023 and October 1, 2022, and the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows for each of the three years in the period ended September 30, 2023, including the related notes and financial statement schedule listed in the index appearing under Item 15(a)(2) (collectively referred to as the “consolidated financial statements”).

We also have audited the Company's internal control over financial reporting as of September 30, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of September 30, 2023 and October 1, 2022, and the results of its operations and its cash flows for each of the three years in the period ended September 30, 2023 in conformity with accounting principles generally accepted in the United States of America.

Also in our opinion, the Company did not maintain, in all material respects, effective internal control over financial reporting as of September 30, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO because material weaknesses in internal control over financial reporting existed as of that date related to (i) inappropriate tone at the top in the control environment at one of the Company’s divisions, specifically division management did not sufficiently promote, monitor or enforce appropriate accounting policies and procedures, thereby resulting in inappropriate and unsupported adjustments to the quarterly contract cost estimate process;

(ii) the Company not maintaining a sufficient complement of finance personnel at the division with an appropriate level of expertise, knowledge and training in internal control over financial reporting commensurate with the Company’s financial reporting requirements;

and (iii) the division not designing and maintaining effective controls over the quarterly contract estimate review process, which led to the failure to timely and appropriately record adjustments to quarterly estimates.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.

The material weaknesses referred to above are described in Management's Report on Internal Control Over Financial Reporting appearing under Item 9A.

We considered these material weaknesses in determining the nature, timing, and extent of audit tests applied in our audit of the 2023 consolidated financial statements, and our opinion regarding the effectiveness of the Company’s internal control over financial reporting does not affect our opinion on those consolidated financial statements.

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control Over Financial Reporting appearing under Item 9A.

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in management's report referred to above.

Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits.

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Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.

on the assessed risk.

Our audits also included performing such other procedures as we considered necessary in the circumstances.

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Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Revenue Recognition - Cost-to-cost method for government contracts in the Defense and Aerospace division

As described in Notes 2 and 4 to the consolidated financial statements, revenues for the CPS segment were $1.5 billion for the year ended October 1, 2022, of which the defense and aerospace division represents a portion of the segment.

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Revenue Recognition using the Cost-to-cost Method for Government Contracts in the Defense and Aerospace Division

As described in Notes 2 and 4 to the consolidated financial statements, revenues for the CPS segment were $1.6 billion for the year ended September 30, 2023, of which the defense and aerospace division represents a portion of the segment.

The Company recognizes revenue for defense and aerospace government contracts on an over time basis using the cost-to-cost method (ratio of costs incurred to date to total estimated costs at completion), which management believes best depicts the transfer of control to the customer.

Recognition of revenue on government contracts requires the use of significant judgment with respect to estimated materials, labor, and subcontractor costs.

The principal considerations for our determination that performing procedures relating to revenue recognition - cost-to-cost method for government contracts in the defense and aerospace division is a critical audit matter are the significant judgment by management when determining the estimated costs for such contracts, which in turn led to a high degree of auditor judgment, subjectivity, and effort in performing procedures and in evaluating the audit evidence related to management’s determination of estimated materials, labor, and subcontractor costs.

Recognition of revenue on government contracts requires the use of significant judgments with respect to estimated materials, labor and subcontractor costs.

The principal considerations for our determination that performing procedures relating to revenue recognition using the cost-to-cost method for government contracts in the defense and aerospace division is a critical audit matter are (i) the significant judgment by management when developing the estimated costs for such contracts and (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and in evaluating the audit evidence related to management’s determination of estimated materials, labor, and subcontractor costs.

Also, as described in the “Opinions on the Financial Statements and Internal Control over Financial Reporting” section, material weaknesses were identified related to this matter.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to the revenue recognition process, including controls over the cost-to-cost method for government contracts in the defense and aerospace division.

These procedures also included, among others, (i) testing management’s process for determining the estimation of costs for a sample of defense and aerospace government contracts, (ii) testing the completeness and accuracy of underlying data used in the estimate, and (iii) evaluating the reasonableness of management’s determination of estimated materials, labor, and subcontractor costs.

Evaluating the reasonableness of the estimated materials, labor and subcontractor costs used involved assessing management’s ability to reasonably estimate costs for government contracts by assessing the nature and status of government contracts, performing retrospective reviews of government contract estimates and changes in estimates over time, and obtaining evidence to support estimated costs.

These procedures included, among others, (i) testing management’s process for developing the estimation of costs for a sample of defense and aerospace government contracts;

(ii) testing the completeness and accuracy of underlying data used in the estimate;

and (iii) evaluating the reasonableness of management’s determination of estimated materials, labor, and subcontractor costs.

Evaluating the reasonableness of management’s determination of the estimated materials, labor and subcontractor costs used involved (i) assessing management’s ability to reasonably estimate costs for government contracts by assessing the nature and status of government contracts;

(ii) performing retrospective reviews of government contract estimates and changes in estimates over time;

and (iii) obtaining evidence to support estimated costs.

Consolidation of Sanmina SCI India Private Limited (“SIPL”)

As described in Note 18 to the consolidated financial statements, the Company completed a joint venture transaction with Reliance Strategic Business Ventures Limited (“RSBVL”) to establish SIPL as a joint venture.

As a result of the transaction, RSBVL holds 50.1% of the outstanding shares of SIPL and the Company holds the remaining 49.9% of the outstanding shares of SIPL.

In connection with RSBVL’s investment, the Company and RSBVL entered into a management services contract

pursuant to which the Company has the unilateral ability to make the significant financial and operating decisions made in the ordinary course of SIPL’s business.

Management determined the voting interest model was applicable and concluded that, despite not having a majority ownership interest, the Company has a controlling financial interest in SIPL through the management services contract.

Because of this controlling financial interest, the Company consolidated SIPL.

In connection with the transaction close on October 3, 2022, the Company recognized a noncontrolling interest of $132 million and an increase in additional paid-in-capital of $84 million.

The principal considerations for our determination that performing procedures relating to the consolidation of SIPL is a critical audit matter are (i) the significant judgment by management in the assessment of whether the Company has a controlling financial interest in SIPL under the voting interest model, despite not having a majority ownership interest;

(ii) a high degree of auditor judgment and subjectivity in performing procedures and evaluating audit evidence related to management’s assessment of whether the Company has a controlling financial interest in SIPL based on the Company’s contractual rights under the joint venture and shareholders’ agreement and the management services contract;

and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to management's assessment of whether the Company has a controlling financial interest in SIPL under the voting interest model.

These procedures also included, among others, (i) reading the joint venture and shareholders’ agreement and the management services contract;

(ii) evaluating whether the contractual terms of the joint venture and shareholders’ agreement and the management service contract are consistent with management’s assessment of whether the Company has a controlling financial interest in SIPL;

and (iii) evaluating management’s determination that the Company has the unilateral ability to make the significant financial and operating decisions made in the ordinary course of SIPL’s business.

Professionals with specialized skill and knowledge were used to assist in evaluating the appropriateness of management's conclusion that the Company has a controlling financial interest in SIPL.

/s/ PricewaterhouseCoopers LLP

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CONSOLIDATED BALANCE SHEETS

September 30,

2023 October 1,

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Cash and cash equivalents $ 667,570 $ 529,857

Accounts receivable, net of allowances of approximately $ 8 million and $ 7 million as of October 1, 2022 and October 2, 2021, respectively

Accounts receivable, net of allowances of approximately $ 8 million as of September 30, 2023 and October 1, 2022, respectively

1,230,771 1,138,894

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Property, plant and equipment, net 632,836 575,170

Deferred income tax assets, net 198,588 235,117

Deferred income tax assets 177,597 209,554

Other 183,965 160,192

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Total long-term liabilities 522,011 544,570

Commitments and Contingencies (Note 10)

Commitments and contingencies

Stockholders' equity:

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Common stock, $ 0.01 par value, authorized 166,667 shares;

110,160 and 108,734 shares issued and 57,394 and 64,307 shares outstanding as of October 1, 2022 and October 2, 2021, respectively

Treasury stock, 52,766 and 44,427 shares as of October 1, 2022 and October 2, 2021, respectively, at cost

111,550 and 110,160 shares issued and 56,833 and 57,394 shares outstanding as of September 30, 2023 and October 1, 2022, respectively

Treasury stock, 54,718 and 52,766 shares as of September 30, 2023 and October 1, 2022, respectively, at cost

( 1,485,252 ) ( 1,378,159 )

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Accumulated deficit ( 2,930,008 ) ( 3,239,978 )

Noncontrolling interest 149,675 —

Total stockholders' equity 2,318,625 1,819,536

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CONSOLIDATED STATEMENTS OF INCOME

September 30,

2023 October 1,

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Restructuring and other 6,054 6,815 15,057

Goodwill impairment — — 6,609

Gain on sale of long-lived assets ( 4,610 ) — —

Total operating expenses 287,553 272,727 270,505

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Provision for income taxes 85,294 61,936 32,095

Net income $ 256,121 $ 268,998 $ 139,713

Net income per share:

Net income before noncontrolling interest 327,513 240,384 249,546

Net income attributable to noncontrolling interest 17,543 — —

Net income attributable to common shareholders $ 309,970 $ 240,384 $ 249,546

Net income attributable to common shareholders per share:

Basic $ 5.36 $ 3.92 $ 3.82

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

September 30,

2023 October 1,

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(In thousands)

Net income $ 256,121 $ 268,998 $ 139,713

Net income before noncontrolling interest $ 327,513 $ 240,384 $ 249,546

Other comprehensive income (loss), net of tax:

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Change in net unrealized amount 19,279 8,414 3,034

Amount reclassified into net income 10,003 4,863 1,332

Amount reclassified into net income before noncontrolling interest ( 13,964 ) 10,003 4,863

Defined benefit plans:

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Amortization of actuarial losses and transition cost 867 3,525 2,417

Total other comprehensive income (loss) $ 15,635 $ 5,804 $ ( 7,373 )

Comprehensive income $ 271,756 $ 274,802 $ 132,340

Total other comprehensive income (loss), net of tax 14,554 15,635 5,804

Comprehensive income before noncontrolling interest 342,067 256,019 255,350

Net income attributable to noncontrolling interest 17,543 — —

Comprehensive income attributable to common shareholders $ 324,524 $ 256,019 $ 255,350

See accompanying notes to the consolidated financial statements.

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Income Accumulated

Deficit Total

Deficit Noncontrolling Interest Total

(In thousands)

BALANCE AT SEPTEMBER 28, 2019

BALANCE AT OCTOBER 3, 2020

107,629 $ 6,301,537 ( 42,630 ) $ ( 983,143 ) $ 34,886 $ ( 3,729,908 ) $ — $ 1,623,372

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Repurchases of treasury stock — — ( 1,797 ) ( 64,059 ) — — — ( 64,059 )

Other comprehensive loss — — — — ( 7,373 ) — ( 7,373 )

Other comprehensive income — — — — 5,804 — — 5,804

Net income — — — — — 249,546 — 249,546

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Repurchases of treasury stock — ( 144 ) ( 8,339 ) ( 330,957 ) — — — ( 331,101 )

Other comprehensive loss — — — — 5,804 — 5,804

Other comprehensive income — — — — 15,635 — — 15,635

Net income — — — — — 240,384 — 240,384

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Other comprehensive income — — — — 14,554 — — 14,554

Sale of noncontrolling interest — 78,169 — — — — 132,132 210,301

Net income — — — — — 309,970 17,543 327,513

BALANCE AT OCTOBER 1, 2022

BALANCE AT SEPTEMBER 30, 2023

111,550 $ 6,513,331 ( 54,718 ) $ ( 1,485,252 ) $ 70,879 $ ( 2,930,008 ) $ 149,675 $ 2,318,625

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CONSOLIDATED STATEMENTS OF CASH FLOWS

September 30,

2023 October 1,

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CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES:

Net income $ 256,121 $ 268,998 $ 139,713

Adjustments to reconcile net income to cash provided by operating activities:

Net income before noncontrolling interest $ 327,513 $ 240,384 $ 249,546

Adjustments to reconcile net income before noncontrolling interest to cash provided by operating activities:

Depreciation and amortization 118,237 108,783 109,656

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Deferred income taxes 28,753 27,910 28,375

Impairment of goodwill and other assets 1,848 — 8,409

Loss (Gain) on sale of intellectual property

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Purchases of investments ( 2,500 ) ( 2,000 ) ( 2,705 )

Sale of investments — — 30,000

Cash paid for business acquisition, net of cash acquired

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Debt issuance costs — ( 3,263 ) —

Holdback paid in connection with previous business combination ( 8,558 ) — —

Proceeds from short-term borrowing 8,445 — —

Net proceeds from stock issuances 3,412 2,379 2,993

Repurchases of common stock ( 107,093 ) ( 331,101 ) ( 64,059 )

Proceeds from sale of noncontrolling interest 215,799 — —

Proceeds from collection of notes receivable — 500 2,500

Cash used in financing activities ( 314,299 ) ( 77,318 ) ( 210,280 )

Cash provided by (used in) financing activities 94,505 ( 314,299 ) ( 77,318 )

Effect of exchange rate changes 498 ( 4,510 ) ( 199 )

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Components include printed circuit boards, backplanes and backplane assemblies, cable assemblies, fabricated metal parts, precision machined parts, and plastic injected molded parts.

Products include memory solutions from our Viking Technology division;

high-performance storage platforms for hyperscale and enterprise solutions from our Viking Enterprise Solutions (VES) division;

optical, radio frequency (RF) and microelectronic (microE) design and manufacturing services from Advanced Microsystems Technologies;

defense and aerospace products from SCI Technology;

and cloud-based manufacturing execution software from the Company's 42Q division.

Products include optical, radio frequency and microelectronic design and manufacturing services from the Company’s Advanced Microsystems Technologies division;

multi-chip package memory solutions from the Company’s Viking Technology division;

high-performance storage platforms for hyperscale and enterprise solutions from the Company’s Viking Enterprise Solutions division;

defense and aerospace products, design, manufacturing, repair and refurbishment services from the Company’s SCI Technology, Inc.

(“SCI”) subsidiary;

and cloud-based smart manufacturing execution software from the Company’s 42Q division.

Services include design, engineering, and logistics and repair.

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Therefore, financial information for these operating segments is combined and presented in a single category entitled “Components, Products and Services”.

The accounting policies for each segment are the same as those disclosed by the Company for its consolidated financial statements.

Basis of Presentation

The Company operates on a 52 or 53 week year ending on the Saturday nearest September 30.

Fiscal 2022 and 2021 were each 52 weeks and fiscal 2020 was a 53-week year, with the extra week occurring during the fourth quarter of fiscal 2020.

Fiscal 2023, 2022 and 2021 were each a 52 week year.

All references to years relate to fiscal years unless otherwise noted.

Principles of Consolidation.

The consolidated financial statements include the Company's accounts and those of its subsidiaries.

All intercompany balances and transactions have been eliminated.

The consolidated financial statements include all accounts of the Company, its wholly-owned subsidiaries and subsidiaries in which the Company has a controlling financial interest.

All intra-company accounts and transactions have been eliminated.

Noncontrolling interest represents a noncontrolling investor’s interest in the results of operations of subsidiaries that the Company controls and consolidates.

Summary of Significant Accounting Policies

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The preparation of consolidated financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period.

Due to the COVID-19 pandemic, the global economy and financial markets were disrupted and there is a significant amount of uncertainty about the length and severity of the consequences caused by the pandemic.

The Company has considered information available to it as of the date of issuance of these financial statements and is not aware of any specific events or circumstances that would require an update to its estimates or judgments, or a revision to the carrying value of its assets or liabilities.

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determining the realizability of deferred tax assets;

and determining fair values of tangible and intangible assets for purposes of impairment tests.

determining fair values of tangible and intangible assets for purposes of impairment tests;

and estimating costs expected to be incurred to satisfy performance obligations under long-term contracts and variable consideration related to such contracts.

These estimates may change as new events occur and additional information becomes available.

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Financial Instruments and Concentration of Credit Risk.

Financial instruments consist primarily of cash and cash equivalents, accounts receivable, foreign currency forward contracts, interest rate swap agreements, accounts payable and debt obligations.

The fair value of these financial instruments approximates their carrying amount as of October 1, 2022 and

October 2, 2021 due to the nature or short maturity of these instruments, or because, in some cases, the instruments are recorded at fair value on the consolidated balance sheets.

Financial instruments consist primarily of cash and cash equivalents, accounts receivable, foreign currency forward contracts, interest rate swap agreements, accounts payable and debt

The fair value of these financial instruments approximates their carrying amount as of September 30, 2023 and October 1, 2022 due to the nature or short maturity of these instruments, or because, in some cases, the instruments are recorded at fair value on the consolidated balance sheets.

Cash and Cash Equivalents.

Cash and cash equivalents include cash on hand and on deposit and investments in highly liquid debt instruments with maturities of three months or less.

Cash and cash equivalents include cash on hand and on deposit and investments in highly liquid debt instruments with initial maturities of three months or less.

Accounts Receivable and Other Related Allowances.

The Company had allowances of approximately $ 8 million and $ 7 million as of October 1, 2022 and October 2, 2021, respectively, for uncollectible accounts, product returns and other net sales adjustments.

The Company had allowances of approximately $ 8 million as of September 30, 2023 and October 1, 2022, respectively, for uncollectible accounts, product returns and other net sales adjustments.

To establish the allowance for doubtful accounts, the Company estimates credit risk associated with accounts receivable by considering the creditworthiness of its customers, past experience, specific facts and circumstances, and the overall economic climate in industries that it serves.

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Accounts receivable balances sold are removed from the consolidated balance sheets and the related proceeds are reported as cash provided by operating activities in the consolidated statements of cash flows.

Inventories are stated at the lower of cost (first-in, first-out method) and net realizable value.

Inventories are stated at the lower of cost (based on standard cost, which approximates first-in, first-out method) and net realizable value.

Cost includes labor, materials and manufacturing overhead.

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dollars at exchange rates in effect at the balance sheet date and income and expenses are translated at average exchange rates.

The effects of these translation adjustments are reported in stockholders' equity as a component of accumulated other comprehensive income (“AOCI”).

The effects of these translation adjustments are reported in stockholder’ equity as a component of accumulated other comprehensive income (“AOCI”).

For all entities, remeasurement adjustments for non-functional currency monetary assets and liabilities are included in other income (expense), net in the accompanying consolidated statements of income.

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If a derivative is designated as a cash flow hedge, the Company excludes time value from its assessment of hedge effectiveness and recognizes the amount of time value in earnings over the life of the derivative.

Gains or losses on the derivative not caused by changes in time value are recorded in Accumulated Other Comprehensive Income (“AOCI”), a component of equity, and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings.

Gains or losses on the derivative not caused by changes in time value are recorded in AOCI, and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings.

If a derivative is designated as a fair value hedge, changes in the fair value of the derivative and of the item being hedged are recognized in earnings in the current period.

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Renewal options are considered in the measurement of the Company’s initial lease liability and corresponding right-of-use (“ROU”) asset only if it is reasonably certain that the Company will exercise such options.

Leases with lease terms of twelve months or less are not recorded on the Company's balance sheet.

Leases with a term of twelve months or less are not recorded on the Company’s balance sheet.

The Company’s lease liability and ROU assets represent the present value of future lease payments which are a combination of lease components and non-lease components such as maintenance and utilities.

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and sales of raw materials to customers whose requirements change after the Company has procured inventory to fulfill the customer’s forecasted demand.

For purposes of determining when to recognize revenue, and in what amount, the Company applies a 5-step model:

The Company determines the appropriate revenue to recognize by applying a 5-step model:

(1) identify the contract with a customer;

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and (5) recognize revenue when (or as) the Company satisfies a performance obligation.

Each of these steps may involve the use of significant judgments.

The Company recognizes revenue for the majority of its contracts on an over time basis.

This is due to the fact that 1) the Company does not have an alternative use for the end products it manufactures for its customers and has an enforceable right to payment, including a reasonable profit, for work-in-progress upon a customer’s cancellation of a contract for convenience or 2) the Company’s customer simultaneously receives and consumes the benefits provided by the Company’s services.

Each of these steps may involve the use of significant judgments, as discussed below.

Step 1 - Identify the contract with a customer

The Company generally enters into a master supply agreement (“MSA”) with its customers that provides the framework under which business will be conducted, and pursuant to which a customer will issue purchase orders or other binding documents to specify the quantity, price and delivery requirements for products or services the customer wishes to purchase.

The Company generally considers its contract with a customer to be a firm commitment, consisting of the combination of an MSA and a purchase order or any other similar binding document.

Step 2 - Identify the performance obligations in the contract

A performance obligation is a promised good or service that is material in the context of the contract and is both capable of being distinct (customer can benefit from the good or service on its own or together with other readily available resources) and distinct within the context of the contract (separately identifiable from other promises).

The Company reviews its contracts to identify promised goods or services and then evaluates such items to determine which of those items are performance obligations.

The majority of the Company’s contracts have a single performance obligation since the promise to transfer an individual good or service is not separately identifiable from other promises in the contract.

The Company’s performance obligations generally have an expected duration of one year or less.

Step 3 - Determine the transaction price

Contracts with customers may include certain forms of variable consideration such as early payment discounts, volume discounts and shared cost savings.

The Company includes an estimate of variable consideration when determining the transaction price and the appropriate amount of revenue to be recognized.

This estimate is limited to an amount which will not result in a significant reversal of revenue in a future period.

Factors considered in the Company’s estimate of variable consideration are the potential amount subject to these contract provisions, historical experience and other relevant facts and circumstances.

Step 4 - Allocate the transaction price to the performance obligations in the contract

A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied.

In the event that more than one performance obligation is identified in a contract, a portion of the transaction price is allocated to each performance obligation.

This allocation would generally be based on the relative standalone price of each performance obligation, which most often would represent the price at which the Company would sell similar goods or services separately.

S tep 5 - Recognize revenue when (or as) a performance obligation is satisfied

The Company is required to assess whether control of a product or services promised under a contract is transferred to the customer at a point-in-time or over time as the product is being manufactured or the services are being provided.

If the criteria in ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”), for recognizing revenue on an over time basis are not met, revenue must be recognized at the point-in-time determined by the Company at which its customer obtains control of a product or service.

The Company has determined that revenue for the majority of its contracts is required to be recognized on an over time basis.

This is primarily due to the fact that the Company does not have an alternative use for the end products it manufactures for its customers and has an enforceable right to payment, including a reasonable profit, for work-in-progress upon a customer's cancellation of a contract for convenience.

In certain circumstances, the Company recognizes over time because its customer simultaneously receives and consumes the benefits provided by the Company’s services or, the Company’s customer controls the end product as the Company performs manufacturing services (continuous transfer of control).

For these contracts, revenue is recognized on an over time basis using the cost-to-cost method (ratio of costs incurred to date to total estimated costs at completion) which the Company believes best depicts the transfer of control to the customer.

Revenue streams for which revenue is recognized on an over time basis include sales of vertically integrated manufacturing solutions (integrated manufacturing solutions and components);

global services (logistics and repair);

logistics and repair services;

design, development and engineering services;

and defense and aerospace programs.

Application of the cost-to-cost method for government contracts in the Company’s Defense and Aerospace division requires the use of significant judgments with respect to estimated materials, labor and subcontractor costs.

This division is an operating segment whose results are combined with eleven other operating segments and reported under Components, Products and Services (“CPS”) for segment reporting purposes.

In 2022, CPS revenue and gross profit were $ 1.5 billion and $ 194 million, respectively.

The Company updates its estimates of materials, labor and subcontractor costs on a quarterly basis.

These updated estimates are reviewed each quarter by a group of employees that includes representatives from numerous functions such as engineering, materials, contracts, manufacturing, program management, finance and senior management.

If a change in estimate is deemed necessary, the impact of the change is recognized in the period of change.

At least 95 % of the Company’s revenue is recognized on an over time basis, which is as products are manufactured or services are performed.

Because of this, and the fact that there is no work-in-process or finished goods inventory associated with contracts for which revenue is recognized on an over-time basis, 99 % or more of the Company’s inventory at the end of a given period is in the form of raw materials.

For contracts for which revenue is required to be recognized at a point-in-time, the Company recognizes revenue when it has transferred control of the related goods, which generally occurs upon shipment or delivery of the goods to the customer.

Revenue streams for which revenue is recognized at a point-in-time include Company-proprietary products and sales of raw materials.

Refer to Note 4 for further discussion.

Additionally, the Company evaluates whether contract modifications for claims have been approved and, if so, estimates the amount, if any, of variable consideration that can be included in the transaction price of the contract.

This division is an operating segment whose results are combined with thirteen other operating segments and reported under CPS for segment reporting purposes.

Estimates of materials, labor and subcontractor costs expected to be incurred to satisfy a performance obligation are updated on a quarterly basis.

These estimates consider costs incurred to date and estimated costs to be incurred over the remaining expected period of performance to satisfy a performance obligation.

Such estimates are reviewed each quarter by a group of employees that includes representatives from numerous functions such as engineering, materials, contracts, manufacturing, program management, finance and senior management.

If a change in estimate is deemed necessary, the impact of the change is recognized in the period of change.

Additionally, contract modifications for claims are assessed each quarter to determine whether the claims have been approved.

If it is determined that a claim has been approved, the amount of the claim, if any, that can be included in transaction price is estimated considering a number of factors such as the length of time expected to lapse until uncertainty about the claim has been resolved and the extent to which our experience with claims for similar contracts has predictive value.

Contract Assets

A contract asset is recognized when the Company has recognized revenue, but has not issued an invoice to its customer for payment.

Contract assets are classified separately on the consolidated balance sheets and transferred to accounts receivable when rights to payment become unconditional.

Because of the Company’s short manufacturing cycle times, the transfer from contract assets to accounts receivable generally occurs within the next fiscal quarter.

Taxes assessed by governmental authorities that are both imposed on and concurrent with a specific revenue-producing transaction, and are collected by the Company from a customer, are excluded from revenue.

Shipping and handling costs associated with outbound freight after control of a product has transferred to a customer are accounted for as fulfillment costs and are included in cost of sales.

The Company applies the following practical expedients or policy elections under ASC 606:

• The promised amount of consideration under a contract is not adjusted for the effects of a significant financing component because, at inception of a contract, the Company expects the period between when a good or service is transferred to a customer and when the customer pays for that good or service will generally be one year or less.

• The Company has elected to not disclose information about remaining performance obligations that have original expected durations of one year or less, which is substantially all of the Company’s remaining performance obligations.

• Incremental costs of obtaining a contract are not capitalized if the period over which such costs would be amortized to expense is less than one year.

Stock-based Compensation .

The Company recognizes stock-based compensation expense, net of estimated forfeitures, on as straight-line basis over the requisite service period of the award, which generally ranges from one year to four years and/or upon achievement of specified performance criteria.

The stock-based compensation expense for time-based and performance-based restricted stock awards are valued at the closing market price of the Company’s common stock on the date of grant.

During the requisite service period, performance-based restricted stock awards are monitored by management for probability of achievement of performance goals and if become probable, that more or less than the previous estimate of the awarded shares will vest, an adjustment to stock-based compensation expense will be recognized as a change in accounting estimate.

The Company recognizes stock-based compensation expense for market-based restricted stock units measured at fair value on the grant date using a Monte Carlo valuation model.

The stock-based compensation expense for awards with market conditions will be recognized over the requisite service periods regardless of whether the market conditions are satisfied.

Income taxes.

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Interest and penalties related to unrecognized tax benefits are recognized as a component of income tax expense.

Recent Accounting Pronouncement Adopted

In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848)”, which provides optional expedients and exceptions for applying U.S.

GAAP to contracts, hedging relationships and other transactions affected by reference rate reform.

The amendments are effective for all entities as of March 12, 2020 through December 31, 2022.

The Company adopted this ASU during the fourth quarter of 2022.

The impact of adoption was not material.

Balance Sheet and Income Statement Details

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Property, plant and equipment consisted of the following:

September 30,

2023 October 1,

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Other Income (Expense), net

The Company terminated its frozen U.S.

defined benefit plan (the “Plan”) effective July 3, 2022 and recorded a pension settlement charge of $ 2 million during the fourth quarter of 2022 which includes the reclassification of unrecognized pension losses from accumulated other comprehensive income to other income (expense), net on the consolidated statements of income.

Refer to Note 17 for discussion.

The Company recorded a loss on extinguishment of debt of $ 1 million during the fourth quarter of 2022, consisting of a write-off of unamortized debt issuance costs arising from the amendment and restatement of the Fourth Amended and Restated Loan Agreement, dated as of November 30, 2018.

Refer to Note 7 for discussion.

In 2021, the Company sold intellectual property for $ 15 million, of which $ 8 million has been received in cash.

In 2021, the Company sold intellectual property for $ 15 million in 2021, of which $ 8 million has been received in cash.

The sale of intellectual property was included in other income (expense), net on the consolidated statements of income.

During the fourth quarter of 2022, the Company concluded it expected to incur credit losses with the counterparty for the remaining $ 7 million due under the arrangement.

Accordingly, the Company recorded a charge of $ 7 million in other income (expense), net on the consolidated statements of income to establish an allowance for the expected credit loss.

During 2022, the Company expected to incur credit losses with the counterparty for the remaining $ 7 million due under the arrangement and consequently, recorded a charge of $ 7 million in other income (expense), net, on the consolidated statements of income to establish an allowance.

A foreign entity of the Company was substantially liquidated in 2021 and the Company reclassified $ 8 million of cumulative translation adjustments associated with this entity from accumulated other comprehensive income to other income (expense), net on the consolidated statements of income in 2021.

The Company received $ 16 million of cash in 2021 in connection with settlements of certain anti-trust class action matters.

Revenue Recognition

The Company is a leading global provider of integrated manufacturing solutions, components, products and repair, logistics and after-market services.

For purposes of determining when to recognize revenue, and in what amount, the Company applies a 5-step model:

(1) identify the contract with a customer;

(2) identify the performance obligations in the contract;

(3) determine the transaction price;

(4) allocate the transaction price to the performance obligations in the contract;

and (5) recognize revenue when (or as) the Company satisfies a performance obligation.

Each of these steps may involve the use of significant judgments, as discussed below.

Step 1 - Identify the contract with a customer

A contract is defined as an agreement between two parties that creates enforceable rights and obligations.

specify the quantity, price and delivery requirements for products or services the customer wishes to purchase.

The Company generally considers its contract with a customer to be a firm commitment, consisting of the combination of an MSA and a purchase order or any other similar binding document.

Step 2 - Identify the performance obligations in the contract

The Company reviews its contracts to identify promised goods or services and then evaluates such items to determine which of those items are performance obligations.

The Company’s performance obligations generally have an expected duration of one year or less.

Step 3 - Determine the transaction price

The Company’s contracts with its customers may include certain forms of variable consideration such as early payment discounts, volume discounts and shared cost savings.

The Company includes an estimate of variable consideration when determining the transaction price and the appropriate amount of revenue to be recognized.

This estimate is limited to an amount which will not result in a significant reversal of revenue in a future period.

Step 4 - Allocate the transaction price to the performance obligations in the contract

A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied.

In the event that more than one performance obligation is identified in a contract, the Company is required to allocate a portion of the transaction price to each performance obligation.

Step 5 - Recognize revenue when (or as) a performance obligation is satisfied

If the criteria in ASC 606 for recognizing revenue on an over time basis are not met, revenue must be recognized at the point-in-time determined by the Company at which its customer obtains control of a product or service.

The Company has determined that revenue for the majority of its contracts is required to be recognized on an over time basis.

This determination is based on the fact that 1) the Company does not have an alternative use for the end products it manufactures for its customers and has an enforceable right to payment, including a reasonable profit, for work-in-progress upon a customer’s cancellation of a contract for convenience or 2) the Company’s customer simultaneously receives and consumes the benefits provided by the Company’s services.

At least 95 % of the Company's revenue is recognized on an over time basis, which is as products are manufactured or services are performed.

This division is an operating segment whose results are combined with eleven other operating segments and reported under Components, Products and Services (“CPS”) for segment reporting purposes.

In 2022, CPS revenue and gross profit were $ 1.5 billion and $ 194 million, respectively.

The Company updates its estimates of materials, labor and subcontractor costs on a quarterly basis.

If a change in estimate is deemed necessary, the impact of the change is recognized in the period of change.

Contract Assets

A contract asset is recognized when the Company has recognized revenue, but has not issued an invoice to its customer for payment.

Contract assets are classified separately on the consolidated balance sheets and transferred to accounts receivable when rights to payment become unconditional.

Because of the Company’s short manufacturing cycle times, the transfer from contract assets to accounts receivable generally occurs within the next fiscal quarter.

Shipping and handling costs associated with outbound freight after control of a product has transferred to a customer are accounted for as fulfillment costs and are included in cost of sales.

The Company applies the following practical expedients or policy elections under ASC 606:

• Incremental costs of obtaining a contract are not capitalized if the period over which such costs would be amortized to expense is less than one year.

Disaggregation of revenue

In the following table, revenue is disaggregated by segment, market sector and geography.

The Company received $ 16 million of cash in 2021 in connection with settlements of certain anti-trust class action matters and recognized a gain in other income (expense), net on the consolidated statements of income.

The following table presents revenue disaggregated by segment, market sector and geography.

September 30,

2023 October 1,

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Total $ 8,935,048 $ 7,919,622 $ 6,738,356

Industrial, Medical, Defense and Aerospace, and Automotive $ 5,388,877 $ 4,744,088 $ 3,871,754

Communications Networks and Cloud Infrastructure $ 3,546,171 $ 3,175,534 $ 2,866,602

Industrial, Defense, Medical and Automotive 4,714,941 3,890,041 4,127,720

Total $ 8,935,048 $ 7,919,622 $ 6,738,356

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Total $ 8,935,048 $ 7,919,622 $ 6,738,356

Percentage of net sales represented by ten largest customers 48 % 49 % 53 %

Number of customers representing 10% or more of net sales 1 2 1

(1) Mexico represents approximately 65 % of the Americas revenue and the U.S.

represents approximately 35 %.

represents approximately 30 % as of September 30, 2023.

Financial Instruments

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Fair Value of Financial Instruments

The fair values of cash equivalents (generally 10 % or less of cash and cash equivalents), accounts receivable, accounts payable and short-term debt approximate carrying value due to the short-term duration of these instruments.

Additionally, the fair value of variable rate long-term debt approximates carrying value as of October 1, 2022.

The fair values of cash equivalents (representing 17 % of cash and cash equivalents), accounts receivable, accounts payable and short-term debt approximate carrying value due to the short-term duration of these instruments.

Additionally, the fair value of variable rate long-term debt approximates carrying value as of September 30, 2023.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The Company’s primary financial assets and financial liabilities measured at fair value on a recurring basis are deferred compensation plan assets and defined benefit plan assets, which are both measured using Level 1 inputs.

Deferred compensation plan assets were $ 37 million and $ 46 million as of October 1, 2022 and October 2, 2021, respectively.

Defined benefit plan assets were $ 17 million and $ 40 million as of October 1, 2022 and October 2, 2021, respectively.

See Note 17 “Employee Benefit Plans”.

Other financial assets and financial liabilities measured at fair value on a recurring basis include foreign exchange contracts and interest rate swaps, which are both measured using Level 2 inputs.

Foreign exchange contracts were not material as of October 1, 2022 or October 2, 2021 .

Interest rate swaps had a positive value of $ 6 million and a negative value of $ 19 million, as of October 1, 2022 and October 2, 2021, respectively.

Interest rate swaps are valued based on a discounted cash flow analysis that incorporates observable (Level 2) market inputs such as interest rate yield curves and credit spreads.

For currency contracts, Level 2 inputs include foreign currency spot and forward rates and interest rates at commonly quoted intervals.

Foreign exchange contracts were not material as of September 30, 2023 or October 1, 2022 .

Offsetting Derivative Assets and Liabilities

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The Company presents its derivative assets and derivative liabilities on a gross basis on the consolidated balance sheets.

The amount that the Company had the right to offset under these netting arrangements was not material as of October 1, 2022 or October 2, 2021 .

The amount that the Company had the right to offset under these netting arrangements was not material as of September 30, 2023 or October 1, 2022 .

Non-Financial Assets Measured at Fair Value on a Nonrecurring Basis

Other non-financial assets, such as intangible assets, goodwill and other long-lived assets, are measured at fair value as of the date such assets are acquired or in the period an impairment is recorded.

During 2020, commodity prices in the oil and gas market experienced a sharp decline due to a combination of an oversaturated supply and a decrease in demand caused by the COVID-19 pandemic.

This commodity price decline resulted in a negative impact to the projected cash flows of the Company’s oil and gas reporting unit that is part of the Company's Components, Products and Services (“CPS”) operating segment and, therefore, the Company performed a goodwill impairment test for this particular reporting unit.

The Company concluded that the fair value of the reporting unit was below its carrying value, resulting in a goodwill impairment charge of $ 7 million.

The fair value of the reporting unit was estimated based on the present value of future discounted cash flows.

The Company also recorded an impairment charge of $ 2 million in 2022 and 2020 for certain long-lived assets.

The Company recorded an impairment charge of $ 2 million in 2022 for certain long-lived assets.

Derivative Instruments

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Forward contracts on various foreign currencies are used to manage foreign currency risk associated with forecasted foreign currency transactions and certain monetary assets and liabilities denominated in non-functional currencies.

The Company's primary foreign currency cash flows are in certain Asian and European countries, Brazil, Israel and Mexico.

The Company had the following outstanding foreign currency forward contracts that were entered into to hedge foreign currency exposures:

October 1, 2022 October 2, 2021

The Company’s primary foreign currency cash flows are in Mexico, China and India.

The Company had the following outstanding foreign currency forward contracts to hedge foreign currency exposures:

September 30,

2023 October 1,

Derivatives Designated as Accounting Hedges:

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For derivative instruments that are designated and qualify as cash flow hedges, the Company excludes time value from its assessment of hedge effectiveness and recognizes the amount of time value in earnings over the life of the derivative instrument.

The amount of gain or loss recognized in Other Comprehensive Income on derivative instruments and the amount of gain or loss reclassified from AOCI into income were not material for any period presented herein.

The Company enters into short-term foreign currency forward contracts to hedge currency exposures associated with certain monetary assets and liabilities denominated in non-functional currencies.

The Company enters into short-term foreign currency forward contracts to hedge foreign currency exposures associated with certain monetary assets and liabilities denominated in non-functional currencies.

These contracts have maturities of up to two months and are not designated as accounting hedges.

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From an economic perspective, the objective of the Company’s hedging program is for gains and losses on forward contracts to substantially offset gains and losses on the underlying hedged items.

In addition to the contracts disclosed in the table above, the Company has numerous contracts that have been closed from an economic and financial accounting perspective and will settle early in the first month of the following quarter.

In addition to the contracts disclosed in the table above, the Company has numerous contracts that have been closed from an economic and financial accounting

perspective and will settle early in the first month of the following quarter.

Since these offsetting contracts do not expose the Company to risk of fluctuations in exchange rates, these contracts have been excluded from the above table.

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The Company enters into forward interest rate swap agreements with independent counterparties to partially hedge the variability in cash flows due to changes in Secured Overnight Financing Rate benchmark interest rate (“SOFR”) associated with anticipated variable rate borrowings.

These interest rate swaps have a maturity date of December 1, 2023 , and effectively convert the Company's variable interest rate obligations to fixed interest rate obligations.

These interest rate swaps have maturity dates of December 1, 2023 and September 27, 2027 and effectively convert a portion of the Company’s variable interest rate obligations to fixed interest rate obligations.

These swaps are accounted for as cash flow hedges under ASC Topic 815, Derivatives and Hedging .

Interest rate swaps with an aggregate notional amount of $ 350 million were outstanding as of October 1, 2022 and October 2, 2021.

The aggregate effective interest rate of these swaps as of October 1, 2022 was approximately 4.1 %.

Given the recent rise in interest rates and the likelihood of additional rate increases, these interest rate swaps had a positive value of $ 6 million as of October 1, 2022, of which the majority is included in prepaid expenses and other current assets and the remaining amount is included in other assets on the consolidated balance sheets.

Interest rate swaps with an aggregate notional amount of $ 650 million and $ 350 million were outstanding as of September 30, 2023 and October 1, 2022, respectively.

The aggregate effective interest rate of these swaps as of September 30, 2023 was approximately 4.4 %.

Interest rate swaps had a value of $ 12 million and $ 6 million as of September 30, 2023 and October 1, 2022, respectively.

As of September 30, 2023, $ 6 million was included in prepaid expenses and other current assets and $ 6 million was included in other assets on the consolidated balance sheets.

Financial Instruments and Concentration of Credit Risk

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One of the Company’s most significant credit risks is the ultimate realization of accounts receivable.

This risk is mitigated by ongoing credit evaluations of, and frequent contact with, the Company's customers, especially its most

significant customers, thus enabling it to monitor changes in business operations and respond accordingly.

This risk is mitigated by ongoing credit evaluations of, and frequent contact with, the Company’s customers, especially its most significant customers, thus enabling it to monitor changes in business operations and respond accordingly.

The Company generally does not require collateral for sales on credit.

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Foreign currency forward contracts and interest rate swaps are maintained with high quality counterparties to reduce the Company’s credit risk and are recorded on the Company’s balance sheets at fair value.

Nokia and Motorola each represented more than 10 % of the Company's net sales in 2022.

Nokia represented more than 10 % of the Company's net sales in 2021 and 2020.

Motorola represented 10 % or more of the Company's gross accounts receivable as of October 1, 2022 and Nokia represented 10 % or more of the Company's gross accounts receivable as of October 2, 2021.

Nokia represented 10 % or more of the Company's net sales in 2023 and 2021.

Nokia and Motorola each represented 10 % or more of the Company’s net sales in 2022.

No customer represented 10% or more of the Company’s gross accounts receivable as of September 30, 2023 and Motorola represented 10 % or more of the Company’s gross accounts receivable as of October 1, 2022.

Long-term debt consisted of the following:

September 30,

2023 October 1,

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Term Loan Due 2027, net of issuance costs $ 329,827 $ 346,737

Term loan due 2027, net of issuance costs 346,737 —

Current portion of long-term debt 17,500 18,750

Current portion of Term Loan Due 2027 17,500 17,500

Long-term debt $ 312,327 $ 329,237

Revolving Credit Facility.

On September 27, 2022 (the “Closing Date”), the Company entered into a Fifth Amended and Restated Credit Agreement (the “Credit Agreement”) that amended and restated the Company’s existing Fourth Amended and Restated Loan Agreement, dated as of November 30, 2018 (the “Existing Credit Agreement”) by, among other things:

(i) increasing the revolving commitments amount, (ii) providing for a term loan facility and (iii) replacing LIBOR with SOFR for purposes of determining the interest rate payable for borrowings under the Credit Agreement.

The Credit Agreement provides for an $ 800 million revolving credit facility and a $ 350 million secured term loan (“Term Loan Due 2027”).

Term Loan Due 2027 maturities by fiscal year are as follows:

September 30,

(In thousands)

2024 $ 13,125

On September 27, 2022 (the “Closing Date”), the Company entered into a Fifth Amended and Restated Credit Agreement (the “Credit Agreement”) that provides for a $ 800 million revolving credit facility and a $ 350 million secured term loan (“Term Loan Due 2027”).

Subject to the satisfaction of certain conditions, including obtaining additional commitments from existing and/or new lenders, the Company may increase the revolving commitment up to an additional $ 200 million.

Costs incurred in connection with the amendment of the Existing Credit Agreement of $ 3 million are classified as long-term debt and are being amortized to interest expense over the life of the Term Loan Due 2027 using the effective interest method.

The Term Loan Due 2027 was fully drawn on the Closing Date and the proceeds were used to repay the term loan outstanding under the Existing Credit Agreement.

Upon repayment, the Company recorded a loss on extinguishment of debt of $ 1 million consisting of a write-off of unamortized debt issuance costs of the Existing Credit Agreement.

Costs incurred in connection with Credit Agreement of $ 3 million are classified as long-term debt and are being amortized to interest expense over the life of the Term Loan Due 2027 using the effective interest method.

The Term Loan Due 2027 was fully drawn on the Closing Date and the proceeds were used to repay the term loan issued under the Company’s prior credit agreement.

Upon repayment, the Company recorded a loss on extinguishment of debt of $ 1 million consisting of a write-off of unamortized debt issuance costs under such prior agreement.

Loans under the Credit Agreement bear interest, at the Company’s option, at either the SOFR or a base rate, in each case plus a spread determined based on the Company’s credit rating.

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The Company is required to repay a portion of the principal amount of the Term Loan Due 2027 equal to 1.25 % of the principal in quarterly installments.

Maturities of the Term Loan Due 2027 as of October 1, 2022 by fiscal year are as follows:

(In Thousands)

2023 $ 17,500

On May 17, 2023, as a result of the Company’s failure to timely file its quarterly report on Form 10-Q for the quarter ended April 1, 2023, the Company was in technical default with respect to certain covenants within its Credit Agreement.

The Company filed its quarterly report on Form 10-Q for the quarter ended April 1, 2023 on May 22, 2023, which was within the stated cure period of 15 calendar days and ceased to be in default as of that time.

Certain of the Company’s domestic subsidiaries are guarantors in respect of the Credit Agreement.

The Company and the subsidiary guarantors’ obligations under the Credit Agreement are secured by a lien on substantially all of their respective assets (excluding real property), including cash, accounts receivable and the shares of certain Company subsidiaries, subject to certain exceptions.

As of October 1, 2022, no borrowings and $ 9 million of letters of credit were outstanding under the Credit Agreement, under which $ 791 million was available to borrow.

As of September 30, 2023, no borrowings and $ 13 million of letters of credit were outstanding under the Credit Agreement, under which $ 787 million was available to borrow.

There were no borrowings outstanding under the Credit Agreement as of October 1, 2022.

Foreign Short-term Borrowing Facilities .

As of October 1, 2022, certain foreign subsidiaries of the Company had a total of $ 70 million of short-term borrowing facilities available, under which no borrowings were outstanding.

These facilities expire at various dates through the second quarter of 2024 .

Short-term Borrowing Facilities

The Company had $ 8 million of short-term borrowings outstanding as of September 30, 2023.

Additionally, certain foreign subsidiaries of the Company had a total of $ 72 million of short-term borrowing facilities available, under which no borrowings were outstanding as of September 30, 2023.

These facilities expire at various dates through the first quarter of 2025 .

Debt Covenants

The Company's Credit Agreement requires the Company to comply with certain financial covenants, namely a maximum consolidated leverage ratio and a minimum interest coverage ratio, in both cases measured on the basis of a trailing 12 month look-back period.

The Credit Agreement requires the Company to comply with certain financial covenants, namely a maximum consolidated leverage ratio and a minimum interest coverage ratio, in both cases measured on the basis of a trailing 12 month look-back period.

In addition, the Company's debt agreements contain a number of restrictive covenants, including restrictions on incurring additional debt, making investments and other restricted payments, selling assets and paying dividends, subject to certain exceptions.

The Company was in compliance with these covenants as of October 1, 2022.

ROU assets and lease liabilities recorded in the consolidated balance sheet are as follows:

October 1, 2022 October 2,

Finally, the agreements also include covenants that require us to file quarterly and annual financial statements with the SEC on a timely basis.

The Company was in compliance with these covenants as of September 30, 2023.

ROU assets and lease liabilities recorded in the consolidated balance sheets are as follows:

September 30,

2023 October 1,

(In thousands)

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Lease expense and supplemental cash flow information related to operating leases are as follows:

2022 October 2,

September 30,

2023 October 1,

Operating lease expense (1) $ 23,978 $ 21,455 $ 20,670

2022 October 2,

(In thousands)

Operating lease expense (1) $ 35,347 $ 23,978 $ 21,455

Cash paid for operating lease liabilities $ 24,388 $ 19,249 $ 19,531

(1) Includes immaterial amounts of short term leases, variable lease costs and sublease income.

Future lease payments under non-cancelable operating leases as of October 1, 2022, by fiscal year, are as follows:

Future lease payments under non-cancelable operating leases as of September 30, 2023, by fiscal year, are as follows:

Operating Leases

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The Company does not service trade receivables sold under these other programs.

Under each of the programs noted above, the Company sells its entire interest in a trade receivable for 100 % of face value, less a discount.

For the years ended October 1, 2022 and October 2, 2021, the Company sold approximately $ 1.9 billion and approximately $ 0.5 billion, respectively, of accounts receivable under these programs.

Under each of the programs noted above, the Company sells its entire interest in a trade receivable for 100 % of face

value, less a discount.

For the years ended September 30, 2023 and October 1, 2022, the Company sold approximately $ 2.6 billion and approximately $ 1.9 billion, respectively, of accounts receivable under these programs.

Upon sale, these receivables are removed from the consolidated balance sheets and cash received is presented as cash provided by operating activities in the consolidated statements of cash flows.

Discounts on sold receivables were not material for any period presented.

As of October 1, 2022 and October 2, 2021, $ 194 million and $ 7 million, respectively, of accounts receivable sold under the RPA and subject to servicing by the Company remained outstanding and had not yet been collected.

Discounts on sold receivables were $ 19 million and $ 6 million for the years ended September 30, 2023 and October 1, 2022, respectively and were recorded in other income (expense), net, in the consolidated statements of income.

As of September 30, 2023 and October 1, 2022, $ 162 million and $ 194 million, respectively, of accounts receivable sold under the RPA and subject to servicing by the Company remained outstanding and had not yet been collected.

The Company’s sole risk with respect to receivables it services is with respect to commercial disputes regarding such receivables.

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To date, the Company has not been required to repurchase any receivable it has sold due to a commercial dispute.

Additionally, the Company is required to remit amounts collected as servicer under the RPA on a weekly basis to the financial institutions that purchased the receivables.

As of October 1, 2022 and October 2, 2021, $ 49 million and $ 18 million, respectively, had been collected but not yet remitted.

Additionally, the Company is required to remit amounts collected as a servicer under the RPA on a weekly basis to the financial institutions that purchased the receivables.

As of September 30, 2023 and October 1, 2022, $ 33 million and $ 49 million, respectively, had been collected but not yet remitted.

This amount is classified in accrued liabilities on the consolidated balance sheets.

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The Company records a contingent liability when it is probable that a loss has been incurred and the amount of loss is reasonably estimable in accordance with ASC Topic 450, Contingencies, or other applicable accounting standards.

As of October 1, 2022 and October 2, 2021, the Company had reserves of $ 38 million and $ 37 million, respectively for environmental matters, warranty, litigation and other contingencies (excluding reserves for uncertain tax positions), which the Company believes are adequate.

As of September 30, 2023 and October 1, 2022, the Company had reserves of $ 34 million and $ 38 million, respectively, for environmental matters, warranty, litigation and other contingencies (excluding reserves for uncertain tax positions), which the Company believes are adequate.

However, there can be no assurance that the Company’s reserves will be sufficient to settle these contingencies.

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The Company is subject to various federal, state, local and foreign laws and regulations and administrative orders concerning environmental protection, including those addressing the discharge of pollutants into the environment, the management and disposal of hazardous substances, the cleanup of contaminated sites, the materials used in products, and the recycling, treatment and disposal of hazardous waste.

As of October 1, 2022, the Company had been named in a lawsuit and several administrative orders alleging certain of its current and former sites contributed to groundwater contamination.

One such order demands that the Company and other alleged defendants remediate groundwater contamination at four landfills located in Northern California to which the Company may have sent wastewater in the past.

The Company is participating in a working group of other alleged defendants to better understand its potential exposure in this action and has reserved its estimated exposure for this matter as of October 1, 2022.

However, there can be no assurance that the Company's reserve will ultimately be sufficient.

As of September 30, 2023, the Company had been named in a lawsuit and several administrative orders alleging certain of its current and former sites contributed to groundwater contamination.

One such order demands that the Company and other alleged defendants fund continued post-closure care and remediation at four properly-permitted former hazardous waste landfills located in Northern California to which the Company may have sent wastewater in the past.

The Company is participating in a working group of a number of other alleged defendants in a settlement of this matter and has reserved its estimated exposure for this matter as of September 30, 2023, which amount is immaterial.

In June 2008, the Company was named by the Orange County Water District in a suit alleging that a predecessor company’s actions at a plant the Company sold in 1998 contributed to polluted groundwater managed by the plaintiff.

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The plaintiff appealed this dismissal and the Court of Appeal reversed the judgment in August 2017, remanding the case back to the Superior Court of California for trial.

The first phase of a multi-phase trial against the Company and several other defendants commenced in April 2021 and the submission of evidence concluded in May 2022.

On June 28, 2022, the Court issued a tentative ruling finding Sanmina and the other defendants liable for certain past investigation costs incurred by the plaintiff.

A final statement of decision in this phase of the trial is expected on or about the middle of calendar year 2023.

Based upon the Court’s tentative ruling, the Company believes a loss in this matter is probable and has recorded an estimated loss.

Subsequent trial phases to assess the Company’s and certain other defendants’ liability for the plaintiff’s future remediation and other costs, and the allocation of damages among the liable defendants, are anticipated to occur in 2024 and beyond.

The trial against the Company and several other defendants commenced in April 2021 and the submission of evidence concluded in May 2022.

On April 3, 2023, the Superior Court published a statement of decision finding the Company and other remaining defendants liable for certain past investigation costs incurred by the plaintiff.

The Company believes a loss in this matter is probable and has recorded its estimated loss as of September 30, 2023.

There will be subsequent proceedings to assess the Company’s and other defendants’ liability for the plaintiff’s future remediation and other costs, including attorneys’ fees.

It is probable that the Company will record additional losses in connection with this matter, and it is reasonably possible that the amount of such additional losses will be material.

However, at the current time, the Company is unable to estimate the amount of such additional losses or a range of losses.

The Company intends to continue defending the case vigorously and to seek appellate review of any adverse liability rulings or judgment at the appropriate time.

However, the Company is unable to estimate the amount of such additional losses or a range of losses.

The Company intends to continue defending the case vigorously and to seek appellate review at the appropriate time.

Other Matters

In October 2018, a contractor who had been retained by the Company through a third party temporary staffing agency filed a lawsuit against the Company in the Santa Clara County Superior Court on behalf of himself and all other similarly situated Company contractors and employees in California, alleging violations of California Labor Code provisions governing overtime, meal and rest periods, wages, wage statements and reimbursement of business expenses.

The complaint sought certification of a class of all non-exempt employees.

Although the Company continued to deny any wrongdoing, on November 19, 2020, the Company reached an agreement to resolve all claims, including claims under California’s Private Attorneys General Act of 2004 (the “Settlement”), which also resulted in the dismissal of a suit alleging substantially similar claims filed in the Santa Clara County Superior Court in June 2021.

The final amount of the judicially approved Settlement was approximately $ 4 million, and was paid during the first quarter of fiscal 2022.

In December 2019, the Company sued a former customer, Dialight plc (“Dialight”), in the United States District Court for the Southern District of New York to collect approximately $ 10 million in unpaid accounts receivable and net obsolete inventory obligations.

Later the same day, Dialight commenced its own action in the same court.

Dialight’s complaint, which asserts claims for fraudulent inducement, breach of contract, and gross negligence/willful misconduct, alleges that the Company fraudulently misrepresented its capabilities to induce Dialight to enter into a Manufacturing Services Agreement (the “Dialight MSA”), and then breached its obligations contained in the Dialight MSA relating to quality, on-time delivery and supply chain management.

Dialight seeks compensatory and punitive damages that it contends exceed $ 200 million, but which the Company believes are vastly overstated and are subject to a contractual limitation of liability that limits any Dialight recovery to less than $ 2 million.

Dialight’s complaint, which asserts claims for fraudulent inducement, breach of contract and willful misconduct, alleges that the Company fraudulently misrepresented its capabilities to induce Dialight to enter into a Manufacturing Services Agreement (the “Dialight MSA”), and then breached its obligations contained in the Dialight MSA relating to quality, on-time delivery and supply chain management.

Dialight seeks compensatory and punitive damages that it contends exceed $ 200 million, but the Company believes Dialight’s claimed damages are vastly overstated and are subject to a contractual limitation of liability that limits any Dialight recovery to less than $ 2 million.

In an Opinion and Order dated March 14, 2023, the District Court granted in part the Company’s motion for partial summary judgment and dismissed Dialight’s willful misconduct claim.

The Company continues to vigorously prosecute its claims against Dialight.

Further, the Company strongly disagrees with Dialight’s allegations and is defending against them vigorously.

Further, the Company strongly disagrees with Dialight’s allegations and is defending against Dialight’s remaining claims vigorously.

No trial date has been set in this matter.

In May 2023, the Company and its SCI subsidiary received Civil Investigative Demands (“CIDs”) from the United States Department of Justice (“DOJ") pursuant to the civil False Claims Act (“FCA”).

The stated purpose of the CIDs—a form of subpoena requiring responses to written interrogatories and the production of documents relating to certain contracts, projects, proposals and business activities of SCI going back to 2010—is to determine whether there is or has been a violation of the FCA with respect to the provision of products and services to the government.

These CIDs supplement several CIDs relating to the same subject matter served upon SCI and certain current and former SCI and Sanmina employees beginning in August 2020, pursuant to which SCI has been producing documents and information and the current and former employees have provided or will provide oral testimony.

To date, neither the Company nor SCI has been served with a complaint in this matter.

The Company has been, and is, cooperating with the DOJ and continues to produce documents and other information responsive to the CIDs.

The Company is unable to predict the ultimate outcome in this matter, although a loss currently is not considered to be probable or estimable.

On November 14, 2023, Gerardo Ramirez, an employee at the Company’s Newark, California plant, filed two lawsuits against the Company in the Alameda County Superior Court.

The first, a putative class action, alleges violations of various California Labor Code and Wage Order requirements, including provisions governing overtime, meal and rest periods, minimum wage requirements, payment of wages during employment and final wages, wage statements, payroll records, and reimbursement of business expenses.

The class action complaint seeks certification of a class of all current and former non-exempt employees who worked for the Company within the State of California at any time between November 14, 2019 and final judgment, as well as unspecified damages, penalties, restitution, attorneys’ fees, pre-judgment interest, and costs of suit.

The second action, a complaint under California’s Private Attorneys General Act of 2004 (“PAGA”) (Labor Code §§ 2698 et seq.), alleges substantially similar violations and seeks penalties individually and on behalf of the State of California and other “aggrieved employees,” along with attorneys’ fees and costs.

The Company intends to defend these cases vigorously.

For each of the pending matters noted above, the Company is unable to reasonably estimate a range of possible loss at this time.

In addition, from time to time, the Company may become involved in routine legal proceedings, demands, claims, threatened litigation and regulatory inquiries and investigations that arise in the normal course of our business.

The Company records liabilities for such matters when a loss becomes probable and the amount of loss can be reasonably estimated.

The ultimate outcome of any litigation is uncertain and unfavorable outcomes could have a negative impact on the Company’s results of operations and financial condition.

Restructuring and Other

Restructuring

1 unchanged sentence

The following table is a summary of restructuring costs:

October 1, 2022 October 2, 2021 October 3, 2020

September 30,

2023 October 1,

2022 October 2,

(In thousands)

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Total - All Plans $ 6,054 $ 11,425 $ 15,057

$ 11,425 $ 15,057 $ 26,783

On October 28, 2019, the Company adopted a Company-wide restructuring plan (“Q1 FY20 Plan”) under which the Company has incurred restructuring costs of approximately $ 31 million as of October 1, 2022.

These charges consist primarily of severance.

Substantially all cash payments have occurred and actions under this plan are complete.

On October 28, 2019, the Company adopted a Company-wide restructuring plan (“Q1 FY20 Plan”).

Substantially all cash payments have occurred and actions under this plan were completed.

Other plans include a number of plans for which costs are not expected to be material individually or in the aggregate.

The Company’s Integrated Manufacturing Solutions (“IMS”) segment incurred costs of $ 1 million and $ 9 million for the years ended October 1, 2022 and October 2, 2021, respectively.

The Company’s CPS segment incurred costs of $ 10 million and $ 5 million for the years ended October 1, 2022 and October 2, 2021, respectively.

In addition, the Company incurred costs of $ 1 million for the year ended October 2, 2021 for Corporate headcount reductions that were not allocated to the Company's IMS and CPS segments.

The Company had accrued liabilities of $ 6 million as of October 1, 2022 and October 2, 2021, for restructuring costs (exclusive of long-term environmental remediation liabilities).

The Company expects to incur restructuring costs, which could be material, in future periods primarily relating to vacant facilities and former sites for which the Company is or may be responsible for environmental remediation.

The Company’s IMS segment incurred costs of $ 4 million, $ 1 million and $ 9 million for 2023, 2022, and 2021, respectively.

The Company’s CPS segment incurred costs of $ 2 million, $ 10 million and $ 5 million for 2023, 2022, and 2021, respectively.

Accrued liabilities for restructuring costs are not material as of September 30, 2023 or October 1, 2022, (excludes environmental remediation liabilities which are disclosed in Note 10 “Contingencies”).

During the first quarter of 2022, the Company recognized a gain of $ 5 million primarily from the sale of a certain real property.

Domestic and foreign components of income before income taxes were as follows:

September 30,

2023 October 1,

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The provision for income taxes consists of the following:

September 30,

2023 October 1,

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The effective tax rates for 2023, 2022 and 2021 were lower than the expected U.S.

statutory rate of 21% primarily due to a $ 16 million and $ 43 million tax benefit, respectively, resulting from the release of a foreign tax reserves due to lapse of time and expiration of statutes of limitations.

The effective tax rate for 2020 is higher than the expected U.S.

statutory rate of 21% primarily due to foreign operations that are taxed at rates higher than the U.S.

statutory rate.

statutory rate of 21 % primarily due to a $ 12 million, $ 16 million and $ 43 million tax benefit, respectively, resulting from the release of certain foreign tax reserves due to lapse of time and expiration of statutes of limitations.

In connection with the sale of shares of Sanmina SCI India Private Limited ("SIPL") to Reliance Strategic Business Ventures Limited ("RSBVL") on October 3, 2022, the Company recognized tax expense of $ 6 million for the year ended September 30, 2023, which was allocated to additional paid-in-capital.

See Note 18 "Strategic Transactions".

The tax effects of temporary differences that give rise to significant portions of deferred tax assets and liabilities are as follows:

October 1, 2022 October 2, 2021

September 30,

2023 October 1,

(In thousands)

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Federal benefit of foreign operations 22,486 21,312

Derivatives and other impacts of OCI 838 7,637

Capitalized research and development 4,965 —

Lease deferred tax asset 16,987 15,018

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Lease deferred tax liability ( 16,671 ) ( 14,808 )

Other — ( 2,495 )

Net deferred tax assets $ 174,901 $ 205,179

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Significant judgment is required in assessing the Company’s ability to generate revenue, gross profit, operating income and jurisdictional taxable income in future periods.

The Company's valuation allowance as of October 1, 2022 relates primarily to foreign net operating losses, with the exception of $ 14 million related to U.S.

The Company’s valuation allowance as of September 30, 2023 relates primarily to foreign net operating losses, except for $ 14 million related to U.S.

state net operating losses.

The Company provides deferred tax liabilities for the tax consequences associated with the undistributed earnings that are expected to be repatriated to subsidiaries' parent unless the subsidiaries' earnings are considered indefinitely reinvested.

As of October 1, 2022, income taxes and foreign withholding taxes have not been provided for approximately $ 439 million of cumulative undistributed earnings of several non-U.S.

The Company provides deferred tax liabilities for the tax consequences associated with the undistributed earnings that are expected to be repatriated to the subsidiaries' parent unless the subsidiaries' earnings are considered indefinitely reinvested.

As of September 30, 2023, income taxes and foreign withholding taxes have not been provided for approximately $ 490 million of cumulative undistributed earnings of several non-U.S.

subsidiaries.

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Determination of the amount of unrecognized deferred tax liabilities on these undistributed earnings is not practicable.

As of October 1, 2022, the Company has cumulative net operating loss carryforwards for federal, state and foreign tax purposes of $ 292 million, $ 357 million and $ 465 million, respectively.

As of September 30, 2023, the Company has cumulative net operating loss carryforwards for federal, state and foreign tax purposes of $ 155 million, $ 337 million and $ 433 million, respectively.

The federal and state net operating loss carryforwards begin expiring in fiscal years 2028 and 2024, respectively, and expire at various dates through September 29, 2035 .

Certain foreign net operating losses start expiring in 2023.

Certain foreign net operating losses will begin expiring in 2024.

However, the majority of foreign net operating losses carryforward indefinitely.

As of October 1, 2022, the Company has federal tax credits of $ 21 million that expire between 2031 and 2042.

As of September 30, 2023, the Company has federal tax credits of $ 18 million that expire between 2031 and 2043.

There are certain restrictions on the utilization of net operating loss and tax credit carryforwards in the event of an “ownership change” as defined in the Internal Revenue Code.

1 unchanged sentence

Following is a reconciliation of the statutory federal tax rate to the Company's effective tax rate:

September 30,

2023 October 1,

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A reconciliation of the beginning and ending amount of total liabilities for unrecognized tax benefits, excluding accrued penalties and interest, is as follows:

September 30,

2023 October 1,

7 unchanged sentences

Balance, end of year $ 44,707 $ 53,552 $ 67,781

The Company had reserves of $ 11 million and $ 17 million as of October 1, 2022 and October 2, 2021, respectively, for the payment of interest and penalties relating to unrecognized tax benefits.

The Company had reserves of $ 8 million and $ 11 million as of September 30, 2023 and October 1, 2022, respectively, for the payment of interest and penalties relating to unrecognized tax benefits.

During 2023, the Company recognized an income tax benefit for interest and penalties of $ 4 million due to lapse of time and expiration of statutes of limitations compared to an income tax benefit of $ 3 million in 2022.

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In the normal course of business, the Company is subject to examination by taxing authorities throughout the world.

The Company is currently being audited by the Internal Revenue Service for tax years 2008 through 2010.

To the extent the final tax liabilities are different from the amounts accrued, this would result in an increase or decrease in net operating loss carryforwards which could materially impact tax expense.

The Company is currently being audited by the Internal Revenue Service (“IRS”) for fiscal years 2008 through 2010.

On September 26, 2023, the Company received a final Notice of Proposed Adjustment from the IRS related to a worthless stock deduction and disallowance of the resulting net operating loss carryforward in the 2009 fiscal year.

The Company disagrees with the IRS’s proposed adjustment and intends to vigorously contest this matter through the applicable IRS administrative and judicial procedures, as appropriate.

In the future, the Company expects to receive a Revenue Agent Report including the IRS’s calculation of the tax assessment related to this matter.

Although the final resolution of this proposed adjustment remains uncertain, the Company continues to believe that it is more likely than not the Company’s tax position will be sustained.

An unfavorable resolution of this matter could have a material, adverse impact on the Company’s Consolidated Financial

Additionally, the Company is being audited by various state tax agencies and certain foreign countries.

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In general, the Company is no longer subject to United States federal or state income tax examinations for years before 2003, and to foreign examinations for years prior to 2006 in its major foreign jurisdictions.

It is reasonably possible that the

balance of gross unrecognized tax benefits could decrease in the next 12 months by approximately $ 9 million related to payments, the resolution of audits and expiration of statutes of limitations.

It is reasonably possible that the balance of gross unrecognized tax benefits could decrease in the next 12 months by approximately $ 5 million related to payments, the resolution of audits and expiration of statutes of limitations.

In addition, there could be a corresponding decrease in accrued interest and penalties of approximately $ 2 million.

Earnings Per Share

Basic and diluted earnings per share amounts are calculated by dividing net income by the weighted average number of shares of common stock outstanding during the period, as follows:

Basic and diluted earnings per share amounts are calculated by dividing net income attributable to common shareholders by the weighted average number of shares of common stock outstanding during the period, as follows:

September 30,

2023 October 1,

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(In thousands, except per share amounts)

Net income $ 256,121 $ 268,998 $ 139,713

Net income attributable to common shareholders $ 309,970 $ 240,384 $ 249,546

Weighted average common shares outstanding 57,847 61,310 65,318

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Denominator for diluted earnings per share 59,815 63,117 67,084

Net income per share:

Net income attributable to common shareholders per share:

Basic $ 5.36 $ 3.92 $ 3.82

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On March 11, 2019, the Company's stockholders approved the Company’s 2019 Equity Incentive Plan (“2019 Plan”) and the reservation of 4 million shares of common stock for issuance thereunder, plus any shares subject to stock options or similar awards granted under the 2009 Plan that expire or otherwise terminate without having been exercised in full and shares issued pursuant to awards granted that are forfeited by the Company.

As of October 1, 2022, an aggregate of 7 million shares were authorized for future issuance under the Company's stock plans, of which 4 million of such shares were issuable upon exercise of outstanding options and delivery of shares upon vesting of restricted stock units and 3 million shares of common stock were available for future grant.

As of September 30, 2023, an aggregate of 6 million shares were authorized for future issuance under the Company’s stock plans, of which 3 million of such shares were issuable upon exercise of outstanding options and delivery of shares upon vesting of restricted stock units and 3 million shares of common stock were available for future grant.

Awards other than stock options reduce common stock available for grant by 1.36 shares for every share of common stock subject to such an award.

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Stock Repurchase Program

During 2022, 2021 and 2020, the Company repurchased 8.0 million shares, 1.5 million shares and 6.4 million shares of its common stock for $ 317 million, $ 54 million and $ 166 million (including commissions), respectively, under stock repurchase programs authorized by the Board of Directors.

During 2023, 2022 and 2021, the Company repurchased 1.6 million shares, 8.0 million shares and 1.5 million shares of its common stock for $ 84 million, $ 317 million and $ 54 million (including commissions), respectively, under stock repurchase programs authorized by the Company’s Board of Directors.

These programs have no expiration dates and the timing of repurchases will depend upon capital needs to support the growth of the Company’s business, market conditions and other factors.

Although stock repurchases are intended to increase stockholder value, purchases of shares reduce the Company’s liquidity.

As of October 1, 2022, an aggregate of $ 164 million remains available under these programs.

In addition to the repurchases discussed above, the Company repurchased 369,000 , 286,000 and 398,000 shares of its common stock during 2022, 2021, and 2020, respectively, in settlement of employee tax withholding obligations due upon the vesting of restricted stock units.

Inflation Reduction Act of 2022 was enacted on August 16, 2022 and imposes a 1% excise tax on corporate share repurchases effective January 1, 2023 and is excluded from the amount available under the stock repurchase programs.

The excise tax is recorded to equity and was not material as of September 30, 2023.

As of September 30, 2023, an aggregate of $ 279 million remains available under these programs.

In addition to the repurchases discussed above, the Company withheld 374,000 , 369,000 and 286,000 shares of its common stock during 2023, 2022, and 2021, respectively, in settlement of employee tax withholding obligations due upon the vesting of restricted stock units.

The Company paid $ 23 million, $ 14 million and $ 10 million, respectively, to applicable tax authorities in connection with these repurchases.

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Accumulated other comprehensive income, net of tax as applicable, consisted of the following:

September 30,

2023 October 1,

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Total $ 70,879 $ 56,325

During the third quarter of 2021, a foreign entity of the Company was substantially liquidated and the Company reclassified $ 8 million of cumulative translation adjustments associated with this entity from accumulated other comprehensive income to other income (expense), net in the consolidated statements of income.

During the fourth quarter of 2022, the Company reclassified $ 2 million of unrecognized pension losses from accumulated other comprehensive income to other income (expense), net in the consolidated statements of income.

There were no other significant reclassifications from accumulated other comprehensive income to the consolidated statements of income for any period presented.

Unrealized holding gain (loss) on derivative financial instruments includes losses from interest rate swap agreements with independent counterparties to partially hedge the variability in cash flows due to changes in the benchmark interest rate (SOFR) associated with anticipated variable rate borrowings.

These swaps are accounted for as cash flow hedges under ASC Topic 815, Derivatives and Hedging.

Interest rate swaps with an aggregate notional amount of $ 350 million were outstanding as of October 1, 2022 and October 2, 2021.

The aggregate effective interest rate of these swaps as of October 1, 2022 was approximately 4.1 % and was approximately 4.3 % as of October 2, 2021.

These interest rate swaps had a negative value of $ 19 million as of October 2, 2021, of which $ 9 million is included in accrued liabilities and the remaining amount is included in other long-term liabilities on the consolidated balance sheets.

Unrealized holding gain (loss) on derivative financial instruments includes gains or losses from interest rate swap agreements with independent counterparties to partially hedge the variability in cash flows due to changes in the benchmark interest rate (SOFR) associated with anticipated variable rate borrowings.

Interest rate swaps with an aggregate notional amount of $ 650 million and $ 350 million were outstanding as of September 30, 2023 and October 1, 2022, respectively.

Given the recent rise in interest rates and the likelihood of additional rate increases, these interest rate swaps had a positive value of $ 12 million and $ 6 million as of September 30, 2023 and October 1, 2022, respectively.

As of September 30, 2023, $ 6 million was included in prepaid expenses and other current assets and $ 6 million was included in other assets on the consolidated balance sheets.

Business Segment, Geographic and Customer Information

ASC Topic 280, Segment Reporting , establishes standards for reporting information about operating segments, products and services, geographic areas of operations and major customers.

Operating segments are defined as components of an enterprise for which separate financial information is available and evaluated regularly by the chief operating decision maker or decision making group in deciding how to allocate resources and in assessing performance.

The Company's operations are managed as two businesses:

1) Integrated Manufacturing Solutions (IMS).

IMS is a reportable segment consisting of printed circuit board assembly and test, high-level assembly and test and direct order fulfillment.

2) Components, Products and Services (CPS).

Components include printed circuit boards, backplanes and backplane assemblies, cable assemblies fabricated metal parts, precision machined parts, and plastic injected molded parts.

Products include memory solutions from our Viking Technology division;

high-performance storage platforms for hyperscale and enterprise solutions from our Viking Enterprise Solutions (VES) division;

optical, radio frequency (RF) and microelectronics (microE) design and manufacturing services from Advanced Microsystems Technologies;

defense and aerospace products from SCI Technology;

and cloud-based manufacturing execution software from the Company's 42Q division.

Services include design, engineering and logistics and repair.

The Company determined that it has only one reportable segment - IMS, which generated approximately 80 % of the Company's total revenue in 2022.

CPS consists of multiple operating segments which do not meet the quantitative threshold for being presented individually as reportable segments.

Therefore, financial information for these operating segments is combined and presented in a single category entitled “Components, Products and Services”.

The accounting policies for each segment are the same as those disclosed by the Company for its consolidated financial statements.

Intersegment sales consist primarily of sales of components from CPS to IMS.

The Company's chief operating decision making group is the Chief Executive Officer who allocates resources and assesses performance of operating segments based on a measure of revenue and gross profit that excludes items not directly related to the Company's ongoing business operations.

These items are typically either non-recurring or non-cash in nature.

Intersegment sales consist primarily of sales of components from CPS to IMS.

Segment information is as follows:

October 1, 2022 October 2, 2021 October 3, 2020

September 30,

2023 October 1,

2022 October 2,

(In thousands)

1 unchanged sentence

CPS 1,747,854 1,655,183 1,379,455

Intersegment revenue ( 149,167 ) ( 126,711 ) ( 138,522 )

Intersegment sales ( 141,457 ) ( 149,167 ) ( 126,711 )

Net Sales $ 8,935,048 $ 7,919,622 $ 6,738,356

3 unchanged sentences

Total 763,166 638,115 543,223

Unallocated items (1) ( 15,909 ) ( 16,782 ) ( 12,775 )

Unallocated corporate items (1) ( 19,955 ) ( 15,909 ) ( 16,782 )

Total $ 743,211 $ 622,206 $ 526,441

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(1) For purposes of evaluating segment performance, management excludes certain items from its measures of gross profit.

These items consist of stock-based compensation expense, amortization of intangible assets, charges or credits resulting from distressed customers and litigation settlements.

These items consist of stock-based compensation expense, amortization of intangible assets, charges or credits resulting from distressed customers, litigation settlements and investigation costs.

(2) Primarily related to selling, general and administration functions.

Segment assets, consisting of accounts receivable, inventories and fixed assets, are substantially proportional to segment sales.

Net sales by geographic segment, determined based on the country in which a product is manufactured were as follows:

2022 October 2,

2021 October 3,

(In thousands)

Americas (1) $ 3,719,496 $ 3,182,849 $ 3,450,527

APAC 3,007,904 2,517,963 2,514,005

EMEA 1,163,075 1,055,831 995,838

Total $ 7,890,475 $ 6,756,643 $ 6,960,370

(1) Mexico represents approximately 60 % of the Americas revenue and the U.S.

represents approximately 35 %.

Percentage of net sales represented by ten largest customers 48.7 % 52.7 % 55.5 %

Number of customers representing 10% or more of net sales 2 1 1

Property, plant and equipment, net by geographic segment is as follows:

September 30,

2023 October 1,

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Stock-based compensation expense was recognized as follows:

September 30,

2023 October 1,

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Total $ 50,402 $ 39,608 $ 34,976

The Company grants restricted stock units and restricted stock units with performance conditions (“PSUs”) to executive officers, directors and certain other employees.

The Company grants restricted stock units (“RSUs”) and restricted stock units with performance conditions (“PSUs”) to executive officers, directors and certain other employees.

These units vest over periods ranging from one year to four years and/or upon achievement of specified performance criteria, with associated compensation expense recognized ratably over the vesting period.

The Company grants shares for which vesting is contingent on cumulative non-GAAP earnings per share measured over three fiscal years.

If a minimum threshold is not achieved during the measurement period, the shares will be cancelled.

Generally, the Company’s PSUs vest contingent on achievement of cumulative non-GAAP earnings per share measured over three fiscal years.

If a minimum threshold is not achieved during the measurement period, the PSUs will be cancelled.

If a minimum threshold is achieved or exceeded, the number of shares of common stock that will be issued will range from 70 % to 130 % of the number of PSUs granted, depending on the extent of performance.

Additionally, the number of shares that vest may be adjusted up or down by up to 15 % based on the Company's total shareholder return relative to that of its peer group over this same period.

Activity with respect to the Company's restricted stock units and PSUs was as follows:

Activity with respect to the Company’s RSUs and PSUs was as follows:

Number of Shares Weighted Average Grant-Date Fair Value

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(In thousands) (In thousands)

Outstanding as of September 28, 2019

Outstanding as of October 3, 2020

2,568 29.67 1.23 71,571

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Vested/Forfeited/Cancelled ( 1,371 ) 36.45

Outstanding as of October 1, 2022

Outstanding as of September 30, 2023

2,881 45.07 1.14 150,547

Expected to vest as of October 1, 2022

Expected to vest as of September 30, 2023

2,607 44.63 1.08 136,192

The fair value of restricted stock units that vested during the year was $ 44 million for 2022, $ 32 million for 2021 and $ 43 million for 2020.

As of October 1, 2022, unrecognized compensation expense of $ 68 million is expected to be recognized over a weighted average period of 1.3 years.

The fair value of RSUs that vested during the year was $ 70 million for 2023, $ 44 million for 2022 and $ 32 million for 2021.

As of September 30, 2023, unrecognized compensation expense of $ 68 million is expected to be recognized over a weighted average period of 1.1 years.

Employee Benefit Plans

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Deferrals under this plan were immaterial.

Assets associated with these plans were $ 37 million and $ 46 million as of October 1, 2022 and October 2, 2021, respectively.

Liabilities associated with these plans were $ 37 million and $ 46 million as of October 1, 2022 and October 2, 2021, respectively.

Assets associated with these plans were $ 38 million and $ 37 million as of September 30, 2023 and October 1, 2022, respectively.

Liabilities associated with these plans were $ 38 million and $ 37 million as of September 30, 2023 and October 1, 2022, respectively.

These amounts are recorded in other non-current assets and other long-term liabilities on the consolidated balance sheets.

Defined benefit plans covering certain employees in the United States and Canada were frozen in 2001.

Employees who had not yet vested will continue to be credited with service until vesting occurs, but no additional benefits will accrue.

During the third quarter of 2022, the Board of Directors approved the termination of the Company's frozen U.S.

During 2022, the Board of Directors approved the termination of the Company's frozen U.S.

defined benefit plan (the “Plan”) effective July 3, 2022.

In connection with this termination, the Company purchased a group annuity contract for $ 6 million during the fourth quarter of 2022 that provides for the administration of future payments to eligible plan participants.

In addition, the Company recorded a pension settlement charge of $ 2 million during the fourth quarter of 2022, which includes the reclassification of unrecognized pension losses from accumulated other comprehensive income to other income (expense), net on the consolidated statements of income.

The Company also provides defined benefit pension plans in certain other countries.

In connection with this termination, the Company purchased a group annuity contract for $ 6 million during 2022 that provides for the administration of future payments to eligible plan participants.

In addition, the Company recorded a pension settlement charge of $ 2 million during 2022, which includes the reclassification of unrecognized pension losses from accumulated other comprehensive income to other income (expense), net on the consolidated statements of income.

The Company provides defined benefit pension plans in certain other countries.

The assumptions used for calculating the pension benefit obligations for non-U.S.

plans depend on the local economic environment and regulations.

The measurement date for the Company's defined benefit plans is October 1, 2022.

The funded status and plan assets for the defined benefit plans and amount reported on the consolidated balance sheets were as follows:

October 1, 2022 October 2, 2021 October 3, 2020

The measurement date for the Company's defined benefit plans is September 30, 2023.

The funded status and plan assets for the non-U.S defined benefit plans and amount reported on the consolidated balance sheets were as follows:

September 30,

2023 October 1,

(In thousands)

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These plans are managed consistent with regulations or market practices of the country in which the assets are invested.

As of October 1, 2022 there were no significant concentrations of credit risk related to pension plan assets.

As of September 30, 2023, there were no significant concentrations of credit risk related to pension plan assets.

All other amounts and assumptions were not material for any period presented herein.

1 unchanged sentence

India Joint Venture

On October 3, 2022 , subsequent to the end of the fourth quarter of 2022, the Company completed a joint venture transaction in which the Company entered into a Share Subscription and Purchase Agreement (the “SSPA”) and a Joint Venture and Shareholders’ Agreement (the “Shareholders’ Agreement”) with Reliance Strategic Business Ventures Limited (“RSBVL”), a wholly owned subsidiary of Reliance Industries Limited.

Pursuant to the SSPA and the Shareholder’ Agreement, the parties established Sanmina SCI India Private Limited (“SIPL”), the Company’s existing Indian manufacturing entity, as a joint venture to engage in manufacturing in India of telecommunications equipment, data center and internet equipment, medical equipment, clean technology equipment and other high-tech equipment.

As a result of the transaction, RSBVL acquired shares of SIPL for approximately $ 215 million of cash such that immediately after the closing of the transaction, RSBVL holds 50.1 % of the outstanding shares of SIPL and Sanmina holds the remaining 49.9 % of the outstanding shares of SIPL.

The amount received from RSBVL was based on preliminary calculations and is subject to adjustment based on final calculations.

Given the terms of the agreements entered into by the parties concerning management of the joint venture, the Company expects to continue to consolidate SIPL in future periods.

On October 3, 2022 (“Transaction Date”), the Company completed a joint venture transaction pursuant to a Share Subscription and Purchase Agreement (the “SSPA”) and a Joint Venture and Shareholders’ Agreement (the “Shareholders’ Agreement”) previously entered into with RSBVL, a wholly owned subsidiary of Reliance Industries Limited.

Pursuant to the SSPA and the Shareholders’ Agreement, the parties established SIPL, the Company’s existing Indian manufacturing entity, as a joint venture to engage in manufacturing in India of telecommunications equipment, data center and internet equipment, medical equipment, clean technology equipment and other high-tech equipment.

This partnership leverages the Company’s advanced manufacturing experience and RSBVL’s expertise and leadership in the Indian business ecosystem.

In addition to supporting the Company’s current customer base, the joint venture will create a state-of-the-art “Manufacturing Technology Center of Excellence” that will serve as an incubation center to support the product development and hardware start-up ecosystem in India, as well as promote research and innovation of leading-edge technologies.

As a result of the transaction, RSBVL acquired shares of SIPL for approximately $ 216 million of cash such that RSBVL holds 50.1 % of the outstanding shares of SIPL and the Company holds the remaining 49.9 % of the outstanding shares of SIPL.

In connection with RSBVL’s investment, the Company and RSBVL entered into a management services contract pursuant to which the Company has the unilateral ability to make the significant financial and operating decisions made in the ordinary course of SIPL’s business.

In accordance with ASC Topic 810, Consolidation (“ASC 810”), the Company is required to consolidate entities in which it has a controlling financial interest.

The Company determined the voting interest model was applicable under ASC 810 and concluded that, despite not having a majority ownership interest, the Company has a controlling financial interest in SIPL through the management services contract.

Therefore, the Company has, by contract, the unilateral ability to control the significant decisions made in the ordinary course of SIPL’s business.

Because the Company has a controlling financial interest in SIPL, it consolidates SIPL.

However, the Company periodically assesses whether any changes in facts and circumstances have occurred that could require the Company to deconsolidate SIPL.

The Company recognized a noncontrolling interest of $ 132 million and an increase in additional paid-in-capital of $ 84 million ($ 78 million, net of tax expense) in the consolidated financial statements in connection with the sale of shares of SIPL to RSBVL as of the Transaction Date.

SIPL’s cash and cash equivalents balance of $ 186 million as of September 30, 2023 is not available for general corporate purposes and must be retained in SIPL to fund its operations.

On April 6, 2021 , the Company purchased all of the outstanding stock of a European subsidiary of a multinational company in the industrial end market.

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The Company also entered into a master supply agreement with the seller in connection with this acquisition.

Total consideration paid in this acquisition was $ 38 million of cash, of which $ 29 million was paid upon closing and $ 9 million is due in April 2023 .

Total consideration paid in this acquisition was $ 38 million of cash, of which $ 29 million was paid upon closing and $ 9 million was paid in 2023.

The acquiree had $ 8 million of cash as of the acquisition date, resulting in a net cash outlay upon closing of $ 21 million.

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Goodwill and identifiable intangible assets are recorded in other non-current assets on the consolidated balance sheets.

Identifiable intangible assets are being amortized over four years .

Identifiable intangible assets were fully amortized as of September 30, 2023.

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

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-K

Item 8. Financial Statements and Supplementary Data