☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
INC
.Delaware | 38-1886260 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
(727)
Title of each class | Trading symbol(s) | Name of each exchange on which registered |
Common Stock, $0.001 par value per share | JBL | New York Stock Exchange |
Large accelerated filer | ☒ | Accelerated filer | ☐ | |||
Non-accelerated filer | ☐ | Smaller reporting company | ☐ | |||
Emerging growth company | ☐ |
Securities registered pursuant to Section 12(b) of the Act:
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Item 1. | |||||||||
Condensed Consolidated Balance Sheets as of | |||||||||
Item 2. | |||||||||
Item 3. | |||||||||
Item 4. | |||||||||
Part II – Other Information | |||||||||
Item 1. | |||||||||
Item 1A. | |||||||||
Item 2. | |||||||||
Item 3. | |||||||||
Item 4. | |||||||||
Item 5. | |||||||||
Item 6. | |||||||||
May 31, 2019 (Unaudited) | August 31, 2018 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 694,086 | $ | 1,257,949 | ||||
Accounts receivable, net of allowance for doubtful accounts of $16,951 as of May 31, 2019 and $15,181 as of August 31, 2018 | 2,696,599 | 1,693,268 | ||||||
Contract assets | 899,482 | — | ||||||
Inventories, net | 3,159,369 | 3,457,706 | ||||||
Prepaid expenses and other current assets | 524,833 | 1,141,000 | ||||||
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Total current assets | 7,974,369 | 7,549,923 | ||||||
Property, plant and equipment, net of accumulated depreciation of $3,993,635 as of May 31, 2019 and $3,646,945 as of August 31, 2018 | 3,335,837 | 3,198,016 | ||||||
Goodwill | 624,474 | 627,745 | ||||||
Intangible assets, net of accumulated amortization of $329,189 as of May 31, 2019 and $307,178 as of August 31, 2018 | 266,205 | 279,131 | ||||||
Deferred income taxes | 202,556 | 218,252 | ||||||
Other assets | 205,336 | 172,574 | ||||||
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Total assets | $ | 12,608,777 | $ | 12,045,641 | ||||
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LIABILITIES AND EQUITY | ||||||||
Current liabilities: | ||||||||
Current installments of notes payable and long-term debt | $ | 454,830 | $ | 25,197 | ||||
Accounts payable | 4,826,333 | 4,942,932 | ||||||
Accrued expenses | 2,586,052 | 2,262,744 | ||||||
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Total current liabilities | 7,867,215 | 7,230,873 | ||||||
Notes payable and long-term debt, less current installments | 2,476,842 | 2,493,502 | ||||||
Other liabilities | 145,750 | 94,617 | ||||||
Income tax liabilities | 136,400 | 148,884 | ||||||
Deferred income taxes | 115,370 | 114,385 | ||||||
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Total liabilities | 10,741,577 | 10,082,261 | ||||||
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Commitments and contingencies | ||||||||
Equity: | ||||||||
Jabil Inc. stockholders’ equity: | ||||||||
Preferred stock, $0.001 par value, authorized 10,000,000 shares; no shares issued and no shares outstanding | — | — | ||||||
Common stock, $0.001 par value, authorized 500,000,000 shares; 259,812,625 and 257,130,145 shares issued and 152,926,887 and 164,588,172 shares outstanding as of May 31, 2019 and August 31, 2018, respectively | 260 | 257 | ||||||
Additionalpaid-in capital | 2,279,409 | 2,218,673 | ||||||
Retained earnings | 1,996,901 | 1,760,097 | ||||||
Accumulated other comprehensive loss | (50,005 | ) | (19,399 | ) | ||||
Treasury stock at cost, 106,885,738 and 92,541,973 shares as of May 31, 2019 and August 31, 2018, respectively | (2,371,592 | ) | (2,009,371 | ) | ||||
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Total Jabil Inc. stockholders’ equity | 1,854,973 | 1,950,257 | ||||||
Noncontrolling interests | 12,227 | 13,123 | ||||||
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Total equity | 1,867,200 | 1,963,380 | ||||||
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Total liabilities and equity | $ | 12,608,777 | $ | 12,045,641 | ||||
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February 29, 2020 (Unaudited) | August 31, 2019 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 696,745 | $ | 1,163,343 | |||
Accounts receivable, net of allowance for doubtful accounts of $30,191 as of February 29, 2020 and $17,221 as of August 31, 2019 | 2,314,055 | 2,745,226 | |||||
Contract assets | 1,057,656 | 911,940 | |||||
Inventories, net | 3,339,890 | 3,023,003 | |||||
Prepaid expenses and other current assets | 569,493 | 501,573 | |||||
Total current assets | 7,977,839 | 8,345,085 | |||||
Property, plant and equipment, net of accumulated depreciation of $4,344,338 as of February 29, 2020 and $4,110,496 as of August 31, 2019 | 3,462,038 | 3,333,750 | |||||
Operating lease right-of-use asset | 373,413 | — | |||||
Goodwill | 700,597 | 622,255 | |||||
Intangible assets, net of accumulated amortization of $367,299 as of February 29, 2020 and $337,841 as of August 31, 2019 | 234,977 | 256,853 | |||||
Deferred income taxes | 194,468 | 198,827 | |||||
Other assets | 196,346 | 213,705 | |||||
Total assets | $ | 13,139,678 | $ | 12,970,475 | |||
LIABILITIES AND EQUITY | |||||||
Current liabilities: | |||||||
Current installments of notes payable and long-term debt | $ | 637,841 | $ | 375,181 | |||
Accounts payable | 4,652,138 | 5,166,780 | |||||
Accrued expenses | 3,015,129 | 2,990,144 | |||||
Current operating lease liabilities | 100,033 | — | |||||
Total current liabilities | 8,405,141 | 8,532,105 | |||||
Notes payable and long-term debt, less current installments | 2,086,359 | 2,121,284 | |||||
Other liabilities | 315,875 | 163,821 | |||||
Non-current operating lease liabilities | 311,879 | — | |||||
Income tax liabilities | 143,161 | 136,689 | |||||
Deferred income taxes | 118,123 | 115,818 | |||||
Total liabilities | 11,380,538 | 11,069,717 | |||||
Commitments and contingencies | |||||||
Equity: | |||||||
Jabil Inc. stockholders’ equity: | |||||||
Preferred stock, $0.001 par value, authorized 10,000,000 shares; no shares issued and no shares outstanding | — | — | |||||
Common stock, $0.001 par value, authorized 500,000,000 shares; 263,299,124 and 260,406,796 shares issued and 151,407,526 and 153,520,380 shares outstanding as of February 29, 2020 and August 31, 2019, respectively | 263 | 260 | |||||
Additional paid-in capital | 2,363,839 | 2,304,552 | |||||
Retained earnings | 2,048,954 | 2,037,037 | |||||
Accumulated other comprehensive loss | (102,943 | ) | (82,794 | ) | |||
Treasury stock at cost, 111,891,598 and 106,886,416 shares as of February 29, 2020 and August 31, 2019, respectively | (2,563,282 | ) | (2,371,612 | ) | |||
Total Jabil Inc. stockholders’ equity | 1,746,831 | 1,887,443 | |||||
Noncontrolling interests | 12,309 | 13,315 | |||||
Total equity | 1,759,140 | 1,900,758 | |||||
Total liabilities and equity | $ | 13,139,678 | $ | 12,970,475 |
Three months ended | Nine months ended | |||||||||||||||
May 31, 2019 | May 31, 2018 | May 31, 2019 | May 31, 2018 | |||||||||||||
Net revenue | $ | 6,135,602 | $ | 5,436,952 | $ | 18,708,867 | $ | 16,323,585 | ||||||||
Cost of revenue | 5,691,803 | 5,038,725 | 17,290,544 | 15,058,940 | ||||||||||||
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Gross profit | 443,799 | 398,227 | 1,418,323 | 1,264,645 | ||||||||||||
Operating expenses: | ||||||||||||||||
Selling, general and administrative | 274,482 | 252,487 | 834,750 | 789,482 | ||||||||||||
Research and development | 11,449 | 10,082 | 32,747 | 27,535 | ||||||||||||
Amortization of intangibles | 7,610 | 10,040 | 23,033 | 29,909 | ||||||||||||
Restructuring and related charges | 9,340 | 12,647 | 16,182 | 29,462 | ||||||||||||
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Operating income | 140,918 | 112,971 | 511,611 | 388,257 | ||||||||||||
Other expense | 14,084 | 10,139 | 39,391 | 26,506 | ||||||||||||
Interest income | (6,758 | ) | (4,499 | ) | (15,897 | ) | (13,323 | ) | ||||||||
Interest expense | 50,514 | 36,178 | 139,326 | 110,220 | ||||||||||||
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Income before income tax | 83,078 | 71,153 | 348,791 | 264,854 | ||||||||||||
Income tax expense | 39,046 | 28,451 | 113,078 | 120,705 | ||||||||||||
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Net income | 44,032 | 42,702 | 235,713 | 144,149 | ||||||||||||
Net income attributable to noncontrolling interests, net of tax | 550 | 161 | 1,277 | 505 | ||||||||||||
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Net income attributable to Jabil Inc. | $ | 43,482 | $ | 42,541 | $ | 234,436 | $ | 143,644 | ||||||||
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Earnings per share attributable to the stockholders of Jabil Inc.: | ||||||||||||||||
Basic | $ | 0.28 | $ | 0.25 | $ | 1.50 | $ | 0.83 | ||||||||
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Diluted | $ | 0.28 | $ | 0.25 | $ | 1.47 | $ | 0.81 | ||||||||
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Weighted average shares outstanding: | ||||||||||||||||
Basic | 152,889 | 170,514 | 156,384 | 174,013 | ||||||||||||
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Diluted | 155,678 | 173,279 | 159,036 | 176,997 | ||||||||||||
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Three months ended | Six months ended | ||||||||||||||
February 29, 2020 | February 28, 2019 | February 29, 2020 | February 28, 2019 | ||||||||||||
Net revenue | $ | 6,125,083 | $ | 6,066,990 | $ | 13,630,781 | $ | 12,573,265 | |||||||
Cost of revenue | 5,694,958 | 5,612,116 | 12,646,817 | 11,598,741 | |||||||||||
Gross profit | 430,125 | 454,874 | 983,964 | 974,524 | |||||||||||
Operating expenses: | |||||||||||||||
Selling, general and administrative | 285,024 | 282,142 | 613,923 | 560,268 | |||||||||||
Research and development | 11,290 | 10,155 | 22,060 | 21,298 | |||||||||||
Amortization of intangibles | 13,577 | 7,777 | 29,717 | 15,423 | |||||||||||
Restructuring and related charges | 29,604 | 817 | 74,855 | 6,842 | |||||||||||
Operating income | 90,630 | 153,983 | 243,409 | 370,693 | |||||||||||
Impairment on securities | 12,205 | — | 12,205 | — | |||||||||||
Other expense | 8,501 | 11,757 | 19,673 | 25,307 | |||||||||||
Interest income | (5,336 | ) | (4,760 | ) | (11,280 | ) | (9,139 | ) | |||||||
Interest expense | 46,183 | 46,160 | 91,094 | 88,812 | |||||||||||
Income before income tax | 29,077 | 100,826 | 131,717 | 265,713 | |||||||||||
Income tax expense | 31,658 | 33,219 | 93,584 | 74,032 | |||||||||||
Net (loss) income | (2,581 | ) | 67,607 | 38,133 | 191,681 | ||||||||||
Net income attributable to noncontrolling interests, net of tax | 702 | 253 | 994 | 727 | |||||||||||
Net (loss) income attributable to Jabil Inc. | $ | (3,283 | ) | $ | 67,354 | $ | 37,139 | $ | 190,954 | ||||||
(Loss) earnings per share attributable to the stockholders of Jabil Inc.: | |||||||||||||||
Basic | $ | (0.02 | ) | $ | 0.44 | $ | 0.24 | $ | 1.21 | ||||||
Diluted | $ | (0.02 | ) | $ | 0.43 | $ | 0.24 | $ | 1.19 | ||||||
Weighted average shares outstanding: | |||||||||||||||
Basic | 152,058 | 154,725 | 152,579 | 158,160 | |||||||||||
Diluted | 152,058 | 156,737 | 156,171 | 160,413 |
Three months ended | Nine months ended | |||||||||||||||
May 31, 2019 | May 31, 2018 | May 31, 2019 | May 31, 2018 | |||||||||||||
Net income | $ | 44,032 | $ | 42,702 | $ | 235,713 | $ | 144,149 | ||||||||
Other comprehensive loss: | ||||||||||||||||
Change in foreign currency translation | (18,548 | ) | (40,640 | ) | (5,636 | ) | (19,720 | ) | ||||||||
Change in derivative instruments: | ||||||||||||||||
Change in fair value of derivatives | (20,179 | ) | (5,944 | ) | (36,262 | ) | 22,453 | |||||||||
Adjustment for net (gains) losses realized and included in net income | (1,728 | ) | (13,890 | ) | 15,958 | (28,974 | ) | |||||||||
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Total change in derivative instruments | (21,907 | ) | (19,834 | ) | (20,304 | ) | (6,521 | ) | ||||||||
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Unrealized gain (loss) on available for sale securities | 3,703 | (202 | ) | (4,769 | ) | (2,016 | ) | |||||||||
Actuarial gain (loss) | — | — | 103 | (431 | ) | |||||||||||
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Total other comprehensive loss | (36,752 | ) | (60,676 | ) | (30,606 | ) | (28,688 | ) | ||||||||
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Comprehensive income (loss) | $ | 7,280 | $ | (17,974 | ) | $ | 205,107 | $ | 115,461 | |||||||
Comprehensive income attributable to noncontrolling interests | 550 | 161 | 1,277 | 505 | ||||||||||||
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Comprehensive income (loss) attributable to Jabil Inc. | $ | 6,730 | $ | (18,135 | ) | $ | 203,830 | $ | 114,956 | |||||||
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Three months ended | Six months ended | ||||||||||||||
February 29, 2020 | February 28, 2019 | February 29, 2020 | February 28, 2019 | ||||||||||||
Net (loss) income | $ | (2,581 | ) | $ | 67,607 | $ | 38,133 | $ | 191,681 | ||||||
Other comprehensive (loss) income: | |||||||||||||||
Change in foreign currency translation | (10,346 | ) | 12,535 | (10,875 | ) | 12,912 | |||||||||
Change in derivative instruments: | |||||||||||||||
Change in fair value of derivatives | (9,474 | ) | 2,386 | 1,471 | (16,083 | ) | |||||||||
Adjustment for net (gains) losses realized and included in net income | (3,548 | ) | 3,501 | 3,335 | 17,686 | ||||||||||
Total change in derivative instruments | (13,022 | ) | 5,887 | 4,806 | 1,603 | ||||||||||
Unrealized (loss) gain on available for sale securities | (5,253 | ) | 273 | (14,080 | ) | (8,472 | ) | ||||||||
Actuarial gain | — | — | — | 103 | |||||||||||
Total other comprehensive (loss) income | (28,621 | ) | 18,695 | (20,149 | ) | 6,146 | |||||||||
Comprehensive (loss) income | $ | (31,202 | ) | $ | 86,302 | $ | 17,984 | $ | 197,827 | ||||||
Comprehensive income attributable to noncontrolling interests | 702 | 253 | 994 | 727 | |||||||||||
Comprehensive (loss) income attributable to Jabil Inc. | $ | (31,904 | ) | $ | 86,049 | $ | 16,990 | $ | 197,100 |
Three months ended | Nine months ended | |||||||||||||||
May 31, 2019 | May 31, 2018 | May 31, 2019 | May 31, 2018 | |||||||||||||
Total stockholders’ equity, beginning balances | $ | 1,858,852 | $ | 2,294,346 | $ | 1,963,380 | $ | 2,368,344 | ||||||||
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Common stock: | ||||||||||||||||
Beginning balances | 260 | 257 | 257 | 253 | ||||||||||||
Shares issued under employee stock purchase plan | — | — | 1 | 1 | ||||||||||||
Vesting of restricted stock | — | — | 2 | 3 | ||||||||||||
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Ending balances | 260 | 257 | 260 | 257 | ||||||||||||
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Additionalpaid-in capital: | ||||||||||||||||
Beginning balances | 2,264,966 | 2,176,764 | 2,218,673 | 2,104,203 | ||||||||||||
Shares issued under employee stock purchase plan | (5 | ) | 6 | 14,582 | 12,844 | |||||||||||
Vesting of restricted stock | — | — | (2 | ) | (3 | ) | ||||||||||
Recognition of stock-based compensation | 14,448 | 14,636 | 46,156 | 74,362 | ||||||||||||
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Ending balances | 2,279,409 | 2,191,406 | 2,279,409 | 2,191,406 | ||||||||||||
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Retained earnings: | ||||||||||||||||
Beginning balances | 1,966,100 | 1,802,372 | 1,760,097 | 1,730,893 | ||||||||||||
Declared dividends | (12,681 | ) | (13,992 | ) | (38,487 | ) | (43,616 | ) | ||||||||
Cumulative effect adjustment for adoption of new accounting standards | — | — | 40,855 | — | ||||||||||||
Net income attributable to Jabil Inc. | 43,482 | 42,541 | 234,436 | 143,644 | ||||||||||||
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Ending balances | 1,996,901 | 1,830,921 | 1,996,901 | 1,830,921 | ||||||||||||
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Accumulated other comprehensive (loss) income: | ||||||||||||||||
Beginning balances | (13,253 | ) | 86,608 | (19,399 | ) | 54,620 | ||||||||||
Other comprehensive loss | (36,752 | ) | (60,676 | ) | (30,606 | ) | (28,688 | ) | ||||||||
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Ending balances | (50,005 | ) | 25,932 | (50,005 | ) | 25,932 | ||||||||||
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Treasury stock: | ||||||||||||||||
Beginning balances | (2,370,898 | ) | (1,783,906 | ) | (2,009,371 | ) | (1,536,455 | ) | ||||||||
Purchases of treasury stock under employee stock plans | (694 | ) | (183 | ) | (11,898 | ) | (22,526 | ) | ||||||||
Treasury shares purchased | — | (91,286 | ) | (350,323 | ) | (316,394 | ) | |||||||||
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Ending balances | (2,371,592 | ) | (1,875,375 | ) | (2,371,592 | ) | (1,875,375 | ) | ||||||||
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Noncontrolling interests: | ||||||||||||||||
Beginning balances | 11,677 | 12,251 | 13,123 | 14,830 | ||||||||||||
Net income attributable to noncontrolling interests | 550 | 161 | 1,277 | 505 | ||||||||||||
Acquisition of noncontrolling interests | — | — | 1,112 | — | ||||||||||||
Disposition of noncontrolling interests | — | — | (1,785 | ) | — | |||||||||||
Declared dividends to noncontrolling interests | — | — | (1,500 | ) | (2,920 | ) | ||||||||||
Foreign currency adjustments attributable to noncontrolling interests | — | 5 | — | 2 | ||||||||||||
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Ending balances | 12,227 | 12,417 | 12,227 | 12,417 | ||||||||||||
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Total stockholders’ equity, ending balances | $ | 1,867,200 | $ | 2,185,558 | $ | 1,867,200 | $ | 2,185,558 | ||||||||
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Three months ended | Six months ended | ||||||||||||||
February 29, 2020 | February 28, 2019 | February 29, 2020 | February 28, 2019 | ||||||||||||
Total stockholders' equity, beginning balances | $ | 1,849,293 | $ | 1,905,513 | $ | 1,900,758 | $ | 1,963,380 | |||||||
Common stock: | |||||||||||||||
Beginning balances | 262 | 259 | 260 | 257 | |||||||||||
Shares issued under employee stock purchase plan | 1 | 1 | 1 | 1 | |||||||||||
Vesting of restricted stock | — | — | 2 | 2 | |||||||||||
Ending balances | 263 | 260 | 263 | 260 | |||||||||||
Additional paid-in capital: | |||||||||||||||
Beginning balances | 2,332,307 | 2,235,827 | 2,304,552 | 2,218,673 | |||||||||||
Shares issued under employee stock purchase plan | 16,179 | 14,579 | 16,179 | 14,587 | |||||||||||
Vesting of restricted stock | — | — | (2 | ) | (2 | ) | |||||||||
Recognition of stock-based compensation | 15,353 | 14,560 | 43,110 | 31,708 | |||||||||||
Ending balances | 2,363,839 | 2,264,966 | 2,363,839 | 2,264,966 | |||||||||||
Retained earnings: | |||||||||||||||
Beginning balances | 2,064,758 | 1,911,451 | 2,037,037 | 1,760,097 | |||||||||||
Declared dividends | (12,521 | ) | (12,705 | ) | (25,222 | ) | (25,806 | ) | |||||||
Cumulative effect adjustment for adoption of new accounting standards | — | — | — | 40,855 | |||||||||||
Net (loss) income attributable to Jabil Inc. | (3,283 | ) | 67,354 | 37,139 | 190,954 | ||||||||||
Ending balances | 2,048,954 | 1,966,100 | 2,048,954 | 1,966,100 | |||||||||||
Accumulated other comprehensive loss: | |||||||||||||||
Beginning balances | (74,322 | ) | (31,948 | ) | (82,794 | ) | (19,399 | ) | |||||||
Other comprehensive (loss) income | (28,621 | ) | 18,695 | (20,149 | ) | 6,146 | |||||||||
Ending balances | (102,943 | ) | (13,253 | ) | (102,943 | ) | (13,253 | ) | |||||||
Treasury stock: | |||||||||||||||
Beginning balances | (2,487,319 | ) | (2,223,673 | ) | (2,371,612 | ) | (2,009,371 | ) | |||||||
Purchases of treasury stock under employee stock plans | (3,693 | ) | (1,489 | ) | (23,010 | ) | (11,204 | ) | |||||||
Treasury shares purchased | (72,270 | ) | (145,736 | ) | (168,660 | ) | (350,323 | ) | |||||||
Ending balances | (2,563,282 | ) | (2,370,898 | ) | (2,563,282 | ) | (2,370,898 | ) | |||||||
Noncontrolling interests: | |||||||||||||||
Beginning balances | 13,607 | 13,597 | 13,315 | 13,123 | |||||||||||
Net income attributable to noncontrolling interests | 702 | 253 | 994 | 727 | |||||||||||
Acquisition of noncontrolling interests | — | 1,112 | — | 1,112 | |||||||||||
Disposition of noncontrolling interests | — | (1,785 | ) | — | (1,785 | ) | |||||||||
Declared dividends to noncontrolling interests | (2,000 | ) | (1,500 | ) | (2,000 | ) | (1,500 | ) | |||||||
Ending balances | 12,309 | 11,677 | 12,309 | 11,677 | |||||||||||
Total stockholders' equity, ending balances | $ | 1,759,140 | $ | 1,858,852 | $ | 1,759,140 | $ | 1,858,852 |
Nine months ended | ||||||||
May 31, 2019 | May 31, 2018 | |||||||
Cash flows provided by (used in) operating activities: | ||||||||
Net income | $ | 235,713 | $ | 144,149 | ||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||||||||
Depreciation and amortization | 574,922 | 583,646 | ||||||
Restructuring and related charges | (3,555 | ) | 14,838 | |||||
Recognition of stock-based compensation expense and related charges | 47,452 | 74,977 | ||||||
Deferred income taxes | 14,008 | (39,762 | ) | |||||
Provision for allowance for doubtful accounts | 10,734 | 20,577 | ||||||
Other, net | 34,204 | (4,059 | ) | |||||
Change in operating assets and liabilities, exclusive of net assets acquired: | ||||||||
Accounts receivable | (528,597 | ) | (1,692,208 | ) | ||||
Contract assets | (865,408 | ) | — | |||||
Inventories | 349,252 | (379,658 | ) | |||||
Prepaid expenses and other current assets | 6,910 | (98,160 | ) | |||||
Other assets | (16,700 | ) | (21,542 | ) | ||||
Accounts payable, accrued expenses and other liabilities | 253,721 | 20,897 | ||||||
|
|
|
| |||||
Net cash provided by (used in) operating activities | 112,656 | (1,376,305 | ) | |||||
|
|
|
| |||||
Cash flows (used in) provided by investing activities: | ||||||||
Acquisition of property, plant and equipment | (789,226 | ) | (819,167 | ) | ||||
Proceeds and advances from sale of property, plant and equipment | 167,653 | 246,370 | ||||||
Cash paid for business and intangible asset acquisitions, net of cash | (153,239 | ) | (109,664 | ) | ||||
Cash receipts on sold receivables | 96,846 | 1,571,156 | ||||||
Other, net | (26,129 | ) | (2,360 | ) | ||||
|
|
|
| |||||
Net cash (used in) provided by investing activities | (704,095 | ) | 886,335 | |||||
|
|
|
| |||||
Cash flows provided by (used in) financing activities: | ||||||||
Borrowings under debt agreements | 9,482,468 | 6,847,756 | ||||||
Payments toward debt agreements | (9,073,684 | ) | (6,472,728 | ) | ||||
Payments to acquire treasury stock | (350,323 | ) | (316,394 | ) | ||||
Dividends paid to stockholders | (39,736 | ) | (44,274 | ) | ||||
Net proceeds from exercise of stock options and issuance of common stock under employee stock purchase plan | 14,582 | 12,844 | ||||||
Treasury stock minimum tax withholding related to vesting of restricted stock | (11,898 | ) | (22,526 | ) | ||||
Other, net | (1,500 | ) | (11,876 | ) | ||||
|
|
|
| |||||
Net cash provided by (used in) financing activities | 19,909 | (7,198 | ) | |||||
|
|
|
| |||||
Effect of exchange rate changes on cash and cash equivalents | 7,667 | (15,259 | ) | |||||
|
|
|
| |||||
Net decrease in cash and cash equivalents | (563,863 | ) | (512,427 | ) | ||||
Cash and cash equivalents at beginning of period | 1,257,949 | 1,189,919 | ||||||
|
|
|
| |||||
Cash and cash equivalents at end of period | $ | 694,086 | $ | 677,492 | ||||
|
|
|
|
Six months ended | |||||||
February 29, 2020 | February 28, 2019 | ||||||
Cash flows provided by operating activities: | |||||||
Net income | $ | 38,133 | $ | 191,681 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 402,347 | 381,510 | |||||
Restructuring and related charges | 33,061 | (3,212 | ) | ||||
Recognition of stock-based compensation expense and related charges | 45,332 | 32,946 | |||||
Deferred income taxes | 3,087 | 23,921 | |||||
Provision for allowance for doubtful accounts | 10,185 | 5,598 | |||||
Other, net | 13,838 | 38,559 | |||||
Change in operating assets and liabilities, exclusive of net assets acquired: | |||||||
Accounts receivable | 424,971 | (365,192 | ) | ||||
Contract assets | (63,302 | ) | (815,144 | ) | |||
Inventories | (279,664 | ) | 225,036 | ||||
Prepaid expenses and other current assets | (62,881 | ) | (4,895 | ) | |||
Other assets | (8,438 | ) | (10,170 | ) | |||
Accounts payable, accrued expenses and other liabilities | (472,503 | ) | 407,127 | ||||
Net cash provided by operating activities | 84,166 | 107,765 | |||||
Cash flows used in investing activities: | |||||||
Acquisition of property, plant and equipment | (448,765 | ) | (537,140 | ) | |||
Proceeds and advances from sale of property, plant and equipment | 36,624 | 144,968 | |||||
Cash paid for business and intangible asset acquisitions, net of cash | (141,195 | ) | (80,778 | ) | |||
Cash receipts on sold receivables | — | 96,846 | |||||
Other, net | (2,013 | ) | (13,504 | ) | |||
Net cash used in investing activities | (555,349 | ) | (389,608 | ) | |||
Cash flows provided by (used in) financing activities: | |||||||
Borrowings under debt agreements | 5,063,358 | 6,182,931 | |||||
Payments toward debt agreements | (4,835,697 | ) | (6,046,181 | ) | |||
Payments to acquire treasury stock | (168,660 | ) | (350,323 | ) | |||
Dividends paid to stockholders | (26,280 | ) | (27,422 | ) | |||
Net proceeds from exercise of stock options and issuance of common stock under employee stock purchase plan | 16,179 | 14,587 | |||||
Treasury stock minimum tax withholding related to vesting of restricted stock | (23,010 | ) | (11,204 | ) | |||
Other, net | (11,617 | ) | (1,500 | ) | |||
Net cash provided by (used in) financing activities | 14,273 | (239,112 | ) | ||||
Effect of exchange rate changes on cash and cash equivalents | (9,688 | ) | 12,063 | ||||
Net decrease in cash and cash equivalents | (466,598 | ) | (508,892 | ) | |||
Cash and cash equivalents at beginning of period | 1,163,343 | 1,257,949 | |||||
Cash and cash equivalents at end of period | $ | 696,745 | $ | 749,057 |
2020.
Earnings Per Share
Trade Accounts Receivable Sale Programs
Potential shares of common stocktrade accounts receivable sale programs are excluded from accounts receivable on the computationCondensed Consolidated Balance Sheets and are reflected as cash provided by operating activities on the Condensed Consolidated Statements of diluted earnings per share when their effect would be antidilutive. Performance-based restricted stock units are considered dilutive when the related performance criteria have been met assuming the endCash Flows.
Three months ended | Nine months ended | |||||||||||||||
May 31, 2019 | May 31, 2018 | May 31, 2019 | May 31, 2018 | |||||||||||||
Restricted stock units | 1,345 | 2,129 | 1,338 | 2,136 |
Dividends
The following table sets forth cash dividends declared bytrade accounts receivable sale programs with unaffiliated financial institutions where the Company may elect to common stockholders duringsell receivables and the nine months ended May 31, 2019 and 2018unaffiliated financial institution may elect to purchase, at a discount, on an ongoing basis:
Program | Maximum Amount (in millions)(1) | Type of Facility | Expiration Date | |||||
A | $ | 500.0 | Uncommitted | December 5, 2020(2) | ||||
B | $ | 150.0 | Uncommitted | November 30, 2020(3) | ||||
C | 800.0 | CNY | Uncommitted | June 30, 2020 | ||||
D | $ | 150.0 | Uncommitted | May 4, 2023(4) | ||||
E | $ | 50.0 | Uncommitted | August 25, 2020 | ||||
F | $ | 150.0 | Uncommitted | January 25, 2021(5) | ||||
G | $ | 50.0 | Uncommitted | February 23, 2023(6) | ||||
H | $ | 100.0 | Uncommitted | August 10, 2020(7) | ||||
I | $ | 100.0 | Uncommitted | July 21, 2020(8) | ||||
J | $ | 650.0 | Uncommitted | December 4, 2020(9) | ||||
K | $ | 110.0 | Uncommitted | April 11, 2020(10) | ||||
L | 100.0 | CHF | Uncommitted | December 5, 2020(2) |
(1) | Maximum amount available at any one time. |
(2) | The program will be automatically extended each year through December 5, 2025 unless either party provides 30 days notice of termination. |
(3) | The program will automatically extend for one year at each expiration date unless either party provides 10 days notice of termination. |
(4) | Any party may elect to terminate the agreement upon 30 days prior notice. |
(5) | The program will be automatically extended through January 25, 2023 unless either party provides 30 days notice of termination. |
(6) | Any party may elect to terminate the agreement upon 15 days prior notice. |
(7) | The program will be automatically extended through August 10, 2023 unless either party provides 30 days notice of termination. |
(8) | The program will be automatically extended through August 21, 2023 unless either party provides 30 days notice of termination. |
(9) | The program will be automatically extended each year through December 5, 2024 unless either party provides 30 days notice of termination. |
(10) | The program will be automatically extended each year through April 11, 2025 unless either party provides 30 days notice of termination. |
Dividend Declaration Date | Dividend per Share | Total of Cash Dividends Declared | Date of Record for Dividend Payment | Dividend Cash Payment Date | ||||||||||||||||
Fiscal Year 2019: | October 18, 2018 | $ | 0.08 | $ | 13,226 | November 15, 2018 | December 3, 2018 | |||||||||||||
January 24, 2019 | $ | 0.08 | $ | 12,706 | February 15, 2019 | March 1, 2019 | ||||||||||||||
April 18, 2019 | $ | 0.08 | $ | 12,681 | May 15, 2019 | June 3, 2019 | ||||||||||||||
Fiscal Year 2018: | October 19, 2017 | $ | 0.08 | $ | 14,588 | November 15, 2017 | December 1, 2017 | |||||||||||||
January 25, 2018 | $ | 0.08 | $ | 14,272 | February 15, 2018 | March 1, 2018 | ||||||||||||||
April 19, 2018 | $ | 0.08 | $ | 13,991 | May 15, 2018 | June 1, 2018 |
Three months ended | Six months ended | ||||||||||||||
February 29, 2020 | February 28, 2019 | February 29, 2020 | February 28, 2019 | ||||||||||||
Trade accounts receivable sold | $ | 2,201 | $ | 1,719 | $ | 4,163 | $ | 3,553 | |||||||
Cash proceeds received | $ | 2,196 | $ | 1,712 | $ | 4,153 | $ | 3,538 | |||||||
Pre-tax losses on sale of receivables(1) | $ | 5 | $ | 7 | $ | 10 | $ | 15 |
(1) | Recorded to other expense within the Condensed Consolidated Statement of Operations. |
May 31, 2019 | August 31, 2018 | |||||||
Raw materials | $ | 2,388,902 | $ | 2,070,569 | ||||
Work in process | 501,168 | 788,742 | ||||||
Finished goods | 333,224 | 659,335 | ||||||
Reserve for excess and obsolete inventory | (63,925 | ) | (60,940 | ) | ||||
|
|
|
| |||||
Inventories, net | $ | 3,159,369 | $ | 3,457,706 | ||||
|
|
|
|
February 29, 2020 | August 31, 2019 | ||||||
Raw materials | $ | 2,482,072 | $ | 2,310,081 | |||
Work in process | 462,549 | 468,217 | |||||
Finished goods | 455,295 | 314,258 | |||||
Reserve for excess and obsolete inventory | (60,026 | ) | (69,553 | ) | |||
Inventories, net | $ | 3,339,890 | $ | 3,023,003 |
Financial Statement Line Item | February 29, 2020 | |||||
Assets | ||||||
Operating lease assets (1) | Operating lease right-of-use assets | $ | 373,413 | |||
Finance lease assets (2) | Property, plant and equipment, net | 151,401 | ||||
Total lease assets | $ | 524,814 | ||||
Liabilities | ||||||
Current | ||||||
Operating lease liabilities | Current operating lease liabilities | $ | 100,033 | |||
Finance lease liabilities | Accrued expenses | 6,906 | ||||
Non-current | ||||||
Operating lease liabilities | Non-current operating lease liabilities | 311,879 | ||||
Finance lease liabilities | Other liabilities | 156,798 | ||||
Total lease liabilities | $ | 575,616 |
(1) | Net of accumulated amortization of $49.2 million. |
(2) | Net of accumulated amortization of $9.6 million. |
Three months ended | Six months ended | ||||||
February 29, 2020 | February 29, 2020 | ||||||
Operating lease cost | $ | 27,810 | $ | 55,546 | |||
Finance lease cost | |||||||
Amortization of leased assets | 1,445 | 2,581 | |||||
Interest on lease liabilities | 1,254 | 2,443 | |||||
Other | 1,655 | 4,183 | |||||
Net lease cost(1) | $ | 32,164 | $ | 64,753 |
(1) | Lease costs are primarily recognized in cost of revenue. |
February 29, 2020 | ||||
Weighted-average remaining lease term | Weighted-average discount rate | |||
Operating leases | 5.5 years | 3.22 | % | |
Finance leases | 6.3 years | 4.31 | % |
Six months ended | |||
February 29, 2020 | |||
Cash paid for amounts included in the measurement of lease liabilities: | |||
Operating cash flows for operating leases(1) | $ | 55,592 | |
Operating cash flows for finance leases(1) | 2,443 | ||
Financing activities for finance leases(2) | 2,808 | ||
Non-cash right-of-use assets obtained in exchange for new lease liabilities: | |||
Operating leases | 34,213 | ||
Finance leases | 111,591 |
(1) | Included in accounts payable, accrued expenses and other liabilities in Operating Activities of the Company's Condensed Consolidated Statements of Cash Flows. |
(2) | Included in payments toward debt agreements in Financing Activities of the Company's Condensed Consolidated Statements of Cash Flows. |
Twelve months ended February 29, | Operating Leases(1) | Finance Leases | Total | ||||||||
2020 | $ | 110,692 | $ | 11,849 | $ | 122,541 | |||||
2021 | 89,479 | 12,375 | 101,854 | ||||||||
2022 | 69,928 | 11,744 | 81,672 | ||||||||
2023 | 53,400 | 11,879 | 65,279 | ||||||||
2024 | 41,472 | 15,644 | 57,116 | ||||||||
Thereafter | 92,529 | 128,763 | 221,292 | ||||||||
Total minimum lease payments | $ | 457,500 | $ | 192,254 | $ | 649,754 | |||||
Less: Interest | (45,588 | ) | (28,550 | ) | (74,138 | ) | |||||
Present value of lease liabilities | $ | 411,912 | $ | 163,704 | $ | 575,616 |
(1) | Excludes $28.2 million of payments related to leases signed but not yet commenced. Additionally, certain leases signed but not yet commenced contain residual value guarantees and purchase options not deemed probable. |
Fiscal Year Ending August 31, | Amount | ||
2020 | $ | 118,312 | |
2021 | 102,915 | ||
2022 | 84,729 | ||
2023 | 63,206 | ||
2024 | 51,091 | ||
Thereafter | 182,932 | ||
Total minimum lease payments | $ | 603,185 |
Maturity Date | February 29, 2020 | August 31, 2019 | ||||||||
5.625% Senior Notes | Dec 15, 2020 | $ | 399,332 | $ | 398,886 | |||||
4.700% Senior Notes | Sep 15, 2022 | 498,332 | 498,004 | |||||||
4.900% Senior Notes | Jul 14, 2023 | 299,178 | 299,057 | |||||||
3.950% Senior Notes | Jan 12, 2028 | 495,132 | 494,825 | |||||||
3.600% Senior Notes(1) | Jan 15, 2030 | 494,470 | — | |||||||
Borrowings under credit facilities(2)(3) | Jan 22, 2023 and Jan 22, 2025 | — | — | |||||||
Borrowings under commercial paper program(4) | (4) | 237,661 | — | |||||||
Borrowings under loans(2) | Jan 22, 2025 | 300,095 | 805,693 | |||||||
Total notes payable and long-term debt | 2,724,200 | 2,496,465 | ||||||||
Less current installments of notes payable and long-term debt | 637,841 | 375,181 | ||||||||
Notes payable and long-term debt, less current installments | $ | 2,086,359 | $ | 2,121,284 |
(1) | On January 15, 2020, the Company issued $500.0 million of publicly registered 3.600% Senior Notes due 2030 (the “3.600% Senior Notes”). The net proceeds from the offering were used for the repayment of term loan indebtedness. |
(2) | On January 22, 2020, the Company entered into a senior unsecured credit agreement which provides for: (i) a Revolving Credit Facility in the initial amount of $2.7 billion, of which $700.0 million expires on January 22, 2023 and $2.0 billion expires on January 22, 2025 and (ii) a $300.0 million Term Loan Facility which expires on January 22, 2025, (collectively the “Credit Facility”). Interest and fees on the Credit Facility advances are based on the Company’s non-credit enhanced long-term senior unsecured debt rating as determined by Standard & Poor’s Ratings Service, Moody’s Investors Service and Fitch Ratings. In connection with the Company’s entry into the Credit Facility, the Company terminated the Company’s amended and restated five-year credit agreement dated November 8, 2017 and the credit agreement dated August 24, 2018. |
(3) | As of February 29, 2020, the Company has $3.1 billion in available unused borrowing capacity under its revolving credit facilities, net of outstanding commercial paper borrowings. |
(4) | The Company has a borrowing capacity of up to $1.8 billion under its commercial paper program. The revolving credit facility supports commercial paper outstanding, if any. As of February 29, 2020, the outstanding commercial paper has maturities of 90 days or less. During the three months ended February 29, 2020, the interest rates on the commercial paper program ranged from 2.0% to 2.6%. |
Maximum Amount of Net Cash Proceeds (in millions)(1)(2) | Expiration Date | ||||
North American | $ | 390.0 | November 22, 2021 | ||
Foreign | $ | 400.0 | September 30, 2021 |
(1) | Maximum amount available at any one time. |
(2) | As of February 29, 2020, the Company had up to $76.3 million in available liquidity under its asset-backed securitization programs. |
Three months ended | Six months ended | ||||||||||||||
February 29, 2020 | February 28, 2019 | February 29, 2020 | February 28, 2019(3) | ||||||||||||
Trade accounts receivable sold | $ | 1,095 | $ | 1,078 | $ | 2,257 | $ | 1,828 | |||||||
Cash proceeds received(1) | $ | 1,089 | $ | 1,072 | $ | 2,245 | $ | 1,816 | |||||||
Pre-tax losses on sale of receivables(2) | $ | 6 | $ | 6 | $ | 12 | $ | 12 |
(1) | The amounts primarily represent proceeds from collections reinvested in revolving-period transfers. |
(2) | Recorded to other expense within the Condensed Consolidated Statements of Operations. |
(3) | Excludes $650.3 million of trade accounts receivable sold, $488.1 million of cash and $13.9 million of net cash received prior to the amendment of the foreign asset-backed securitization program and under the previous North American asset-backed securitization program which occurred during the first quarter of fiscal year 2019. |
May 31, 2019 | August 31, 2018 | |||||||
Contract liabilities | $ | 544,831 | $ | — | ||||
Deferred income | — | 691,365 | ||||||
Accrued compensation and employee benefits | 549,598 | 570,400 | ||||||
Other accrued expenses | 1,491,623 | 1,000,979 | ||||||
|
|
|
| |||||
Accrued expenses | $ | 2,586,052 | $ | 2,262,744 | ||||
|
|
|
|
5. Stock-Based Compensation
February 29, 2020 | August 31, 2019 | ||||||
Contract liabilities(1) | $ | 495,314 | $ | 511,329 | |||
Accrued compensation and employee benefits | 532,312 | 600,907 | |||||
Other accrued expenses | 1,987,503 | 1,877,908 | |||||
Accrued expenses | $ | 3,015,129 | $ | 2,990,144 |
(1) | Revenue recognized during the six months ended February 29, 2020 and February 28, 2019 that was included in the contract liability balance as of September 1, 2019 and 2018 was $201.1 million and $267.0 million, respectively. |
Other Employee Benefits
Three months ended | Six months ended | ||||||||||||||
February 29, 2020 | February 28, 2019 | February 29, 2020 | February 28, 2019 | ||||||||||||
Service cost (1) | $ | 6,638 | $ | 289 | $ | 11,101 | $ | 584 | |||||||
Interest cost (2) | 809 | 870 | 1,572 | 1,755 | |||||||||||
Expected long-term return on plan assets (2) | (3,789 | ) | (1,330 | ) | (6,575 | ) | (2,682 | ) | |||||||
Recognized actuarial loss (2) | 226 | 205 | 449 | 413 | |||||||||||
Amortization of prior service credit (2) | (11 | ) | (11 | ) | (22 | ) | (23 | ) | |||||||
Net periodic benefit cost | $ | 3,873 | $ | 23 | $ | 6,525 | $ | 47 |
(1) | Service cost is recognized in cost of revenue in the Condensed Consolidated Statement of Operations. |
(2) | Components are recognized in other expense in the Condensed Consolidated Statement of Operations. |
September 30, 2019 | |||
Ending projected benefit obligation | $ | (404,297 | ) |
Ending fair value of plan assets | $ | 330,793 | |
Unfunded status | $ | (73,504 | ) |
Fiscal Year Ended August 31, | Amount | ||
2020 | $ | 24,698 | |
2021 | 21,698 | ||
2022 | 20,098 | ||
2023 | 18,398 | ||
2024 | 17,298 | ||
2025 through 2029 | 82,992 |
September 30, 2019 | |||
Projected benefit obligation | $ | (404,297 | ) |
Accumulated benefit obligation | $ | (394,427 | ) |
Fair value of plan assets | $ | 330,793 |
Derivatives Not Designated as Hedging Instruments Under ASC 815 | Location of Gain on Derivatives Recognized in Net Income | Amount of Gain Recognized in Net Income on Derivatives | ||||||||||||||||
Three months ended | Six months ended | |||||||||||||||||
February 29, 2020 | February 28, 2019 | February 29, 2020 | February 28, 2019 | |||||||||||||||
Forward foreign exchange contracts(1) | Cost of revenue | $ | 6,801 | $ | 49,794 | $ | 33,518 | $ | 42,808 |
(1) | For the three months and six months ended February 29, 2020, the Company recognized $7.6 million and $36.4 million, respectively, of foreign currency losses in cost of revenue, which are offset by the gains from the forward foreign exchange contracts. During the three months and six months ended February 28, 2019, the Company recognized $57.1 million and $52.6 million, respectively, of foreign currency losses in cost of revenue, which are offset by the gains from the forward foreign exchange contracts. |
Interest Rate Swap Summary | Hedged Interest Rate Payments | Aggregate Notional Amount (in millions) | Effective Date | Expiration Date (1) | ||||||
Forward Interest Rate Swap | ||||||||||
Anticipated Debt Issuance | Fixed | $ | 200.0 | Oct 22, 2018 | Dec 15, 2020 | (2) | ||||
Interest Rate Swaps | ||||||||||
Debt obligations | Variable | $ | 550.0 | Aug 24, 2018 and Oct 11, 2018 | Aug 24, 2020 and Aug 31, 2020 | (3) |
(1) | The contracts will be settled with the respective counterparties on a net basis at the expiration date for the forward interest rate swap and at each settlement date for the interest rate swaps. |
(2) | If the anticipated debt issuance occurs before December 15, 2020, the contracts will be terminated simultaneously with the debt issuance. |
(3) | The Company pays interest based upon a fixed rate as agreed upon with the respective counterparties and receives variable rate interest payments based on the one-month and three-month LIBOR for borrowings under the Credit Facility and certain other debt obligations. Of the amount hedged, $350.0 million expires on August 24, 2020 and $200.0 million expires on August 31, 2020. |
Foreign Currency Translation Adjustment | Derivative Instruments | Actuarial Loss | Prior Service Cost | Available for Sale Securities | Total | ||||||||||||||||||
Balance as of August 31, 2019 | $ | (14,298 | ) | $ | (39,398 | ) | $ | (28,033 | ) | $ | (608 | ) | $ | (457 | ) | (82,794 | ) | ||||||
Other comprehensive (loss) income before reclassifications | (10,875 | ) | 1,471 | — | — | (14,080 | ) | (23,484 | ) | ||||||||||||||
Amounts reclassified from AOCI | — | 3,335 | — | — | — | 3,335 | |||||||||||||||||
Other comprehensive (loss) income(1) | (10,875 | ) | 4,806 | — | — | (14,080 | ) | (20,149 | ) | ||||||||||||||
Balance as of February 29, 2020 | $ | (25,173 | ) | $ | (34,592 | ) | $ | (28,033 | ) | $ | (608 | ) | $ | (14,537 | ) | $ | (102,943 | ) |
(1) | Amounts are net of tax, which are immaterial. |
Three months ended | Six months ended | |||||||||||||||||
Comprehensive Income Components | Financial Statement Line Item | February 29, 2020 | February 28, 2019 | February 29, 2020 | February 28, 2019 | |||||||||||||
Realized losses (gains) on derivative instruments:(1) | ||||||||||||||||||
Foreign exchange contracts | Cost of revenue | $ | (3,117 | ) | $ | 3,931 | $ | 4,197 | $ | 18,546 | ||||||||
Interest rate contracts | Interest expense | (431 | ) | (430 | ) | (862 | ) | (860 | ) | |||||||||
Total amounts reclassified from AOCI(2) | $ | (3,548 | ) | $ | 3,501 | $ | 3,335 | $ | 17,686 |
(1) | The Company expects to reclassify $3.4 million into earnings during the next twelve months, which will primarily be classified as a component of cost of revenue. |
(2) | Amounts are net of tax, which are immaterial for the three months and six months ended February 29, 2020 and February 28, 2019. |
Three months ended | Nine months ended | |||||||||||||||
May 31, 2019 | May 31, 2018 | May 31, 2019 | May 31, 2018 | |||||||||||||
Restricted stock units and stock appreciation rights | $ | 12,592 | $ | 13,457 | $ | 41,247 | $ | 69,916 | ||||||||
Employee stock purchase plan | 1,914 | 1,581 | 6,205 | 5,368 | ||||||||||||
Other(1) | — | — | — | 7,538 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 14,506 | $ | 15,038 | $ | 47,452 | $ | 82,822 | ||||||||
|
|
|
|
|
|
|
|
|
Three months ended | Six months ended | ||||||||||||||
February 29, 2020 | February 28, 2019 | February 29, 2020 | February 28, 2019 | ||||||||||||
Restricted stock units | $ | 12,301 | $ | 13,604 | $ | 40,484 | $ | 28,655 | |||||||
Employee stock purchase plan | 2,808 | 2,093 | 4,848 | 4,291 | |||||||||||
Total | $ | 15,109 | $ | 15,697 | $ | 45,332 | $ | 32,946 |
10,502,993.
The following represents the stock-based compensation information for the period indicated (in thousands):
Nine months ended | ||||
May 31, 2019 | ||||
Unrecognized stock-based compensation expense—restricted stock units | $ | 53,987 | ||
Remaining weighted-average period for restricted stock units expense | 1.4 years |
Six months ended | |||
February 29, 2020 | |||
Unrecognized stock-based compensation expense—restricted stock units | $ | 67,606 | |
Remaining weighted-average period for restricted stock units expense | 1.5 years |
Three months ended | Nine months ended | |||||||||||||||
May 31, 2019 | May 31, 2018 | May 31, 2019 | May 31, 2018 | |||||||||||||
Common stock outstanding: | ||||||||||||||||
Beginning balances | 152,878,329 | 172,063,230 | 164,588,172 | 177,727,653 | ||||||||||||
Shares issued upon exercise of stock options | — | — | 11,348 | 29,688 | ||||||||||||
Shares issued under employee stock purchase plan | (215 | ) | 261 | 692,110 | 575,777 | |||||||||||
Vesting of restricted stock | 73,095 | 24,232 | 1,979,022 | 2,718,379 | ||||||||||||
Purchases of treasury stock under employee stock plans | (24,322 | ) | (6,567 | ) | (489,158 | ) | (790,598 | ) | ||||||||
Treasury shares purchased(1) | — | (3,281,412 | ) | (13,854,607 | ) | (11,461,155 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
Ending balances | 152,926,887 | 168,799,744 | 152,926,887 | 168,799,744 | ||||||||||||
|
|
|
|
|
|
|
|
Three months ended | Six months ended | ||||||||||
February 29, 2020 | February 28, 2019 | February 29, 2020 | February 28, 2019 | ||||||||
Common stock outstanding: | |||||||||||
Beginning balances | 152,300,356 | 157,986,896 | 153,520,380 | 164,588,172 | |||||||
Shares issued upon exercise of stock options | 43,069 | 11,348 | 56,999 | 11,348 | |||||||
Shares issued under employee stock purchase plan | 595,717 | 691,971 | 595,717 | 692,325 | |||||||
Vesting of restricted stock | 322,872 | 219,764 | 2,239,612 | 1,905,927 | |||||||
Purchases of treasury stock under employee stock plans | (86,706 | ) | (57,389 | ) | (617,123 | ) | (464,836 | ) | |||
Treasury shares purchased(1) | (1,767,782 | ) | (5,974,261 | ) | (4,388,059 | ) | (13,854,607 | ) | |||
Ending balances | 151,407,526 | 152,878,329 | 151,407,526 | 152,878,329 |
(1) | In |
6.
The following table presents the Company’s revenues disaggregated by segment (in thousands):
Three months ended | |||||||||||||||||||||||
February 29, 2020 | February 28, 2019 | ||||||||||||||||||||||
EMS | DMS | Total | EMS | DMS | Total | ||||||||||||||||||
Timing of transfer | |||||||||||||||||||||||
Point in time | $ | 986,570 | $ | 1,141,881 | $ | 2,128,451 | $ | 836,863 | $ | 1,464,832 | $ | 2,301,695 | |||||||||||
Over time | 2,843,384 | 1,153,248 | 3,996,632 | 2,967,864 | 797,431 | 3,765,295 | |||||||||||||||||
Total | $ | 3,829,954 | $ | 2,295,129 | $ | 6,125,083 | $ | 3,804,727 | $ | 2,262,263 | $ | 6,066,990 |
Six months ended | |||||||||||||||||||||||
February 29, 2020 | February 28, 2019 | ||||||||||||||||||||||
EMS | DMS | Total | EMS | DMS | Total | ||||||||||||||||||
Timing of transfer | |||||||||||||||||||||||
Point in time | $ | 2,377,480 | $ | 3,011,360 | $ | 5,388,840 | $ | 1,257,524 | $ | 3,566,483 | $ | 4,824,007 | |||||||||||
Over time | 5,870,026 | 2,371,915 | 8,241,941 | 6,050,306 | 1,698,952 | 7,749,258 | |||||||||||||||||
Total | $ | 8,247,506 | $ | 5,383,275 | $ | 13,630,781 | $ | 7,307,830 | $ | 5,265,435 | $ | 12,573,265 |
Three months ended | Nine months ended | |||||||||||||||
May 31, 2019 | May 31, 2018 | May 31, 2019 | May 31, 2018 | |||||||||||||
Net revenue | ||||||||||||||||
EMS | $ | 3,988,489 | $ | 3,161,626 | $ | 11,296,319 | $ | 8,894,174 | ||||||||
DMS | 2,147,113 | 2,275,326 | 7,412,548 | 7,429,411 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 6,135,602 | $ | 5,436,952 | $ | 18,708,867 | $ | 16,323,585 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Segment income and reconciliation of income before income tax | ||||||||||||||||
EMS | $ | 130,869 | $ | 121,563 | $ | 303,618 | $ | 302,556 | ||||||||
DMS | 54,896 | 28,499 | 326,866 | 253,322 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total segment income | $ | 185,765 | $ | 150,062 | $ | 630,484 | $ | 555,878 | ||||||||
Reconciling items: | ||||||||||||||||
Amortization of intangibles | (7,610 | ) | (10,040 | ) | (23,033 | ) | (29,909 | ) | ||||||||
Stock-based compensation expense and related charges | (14,506 | ) | (15,038 | ) | (47,452 | ) | (82,822 | ) | ||||||||
Restructuring and related charges | (9,340 | ) | (12,647 | ) | (16,182 | ) | (29,462 | ) | ||||||||
Distressed customer charge | — | — | — | (14,706 | ) | |||||||||||
Business interruption and impairment charges, net(1) | — | 634 | 2,860 | (10,722 | ) | |||||||||||
Acquisition and integration charges | (13,391 | ) | — | (35,066 | ) | — | ||||||||||
Other expense | (14,084 | ) | (10,139 | ) | (39,391 | ) | (26,506 | ) | ||||||||
Interest income | 6,758 | 4,499 | 15,897 | 13,323 | ||||||||||||
Interest expense | (50,514 | ) | (36,178 | ) | (139,326 | ) | (110,220 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Income before income tax | $ | 83,078 | $ | 71,153 | $ | 348,791 | $ | 264,854 | ||||||||
|
|
|
|
|
|
|
|
Three months ended | Six months ended | ||||||||||||||
February 29, 2020 | February 28, 2019 | February 29, 2020 | February 28, 2019 | ||||||||||||
Segment income and reconciliation of income before income tax | |||||||||||||||
EMS | $ | 84,829 | $ | 88,654 | $ | 189,529 | $ | 172,749 | |||||||
DMS | 74,619 | 102,405 | 247,234 | 271,970 | |||||||||||
Total segment income | $ | 159,448 | $ | 191,059 | $ | 436,763 | $ | 444,719 | |||||||
Reconciling items: | |||||||||||||||
Amortization of intangibles | (13,577 | ) | (7,777 | ) | (29,717 | ) | (15,423 | ) | |||||||
Stock-based compensation expense and related charges | (15,109 | ) | (15,697 | ) | (45,332 | ) | (32,946 | ) | |||||||
Restructuring and related charges | (29,604 | ) | (817 | ) | (74,855 | ) | (6,842 | ) | |||||||
Distressed customer charge | — | — | (14,963 | ) | — | ||||||||||
Business interruption and impairment charges, net(1) | — | — | — | 2,860 | |||||||||||
Acquisition and integration charges | (7,752 | ) | (12,785 | ) | (23,886 | ) | (21,675 | ) | |||||||
Impairment on securities | (12,205 | ) | — | (12,205 | ) | — | |||||||||
Other expense (net of periodic benefit cost) | (11,277 | ) | (11,757 | ) | (24,274 | ) | (25,307 | ) | |||||||
Interest income | 5,336 | 4,760 | 11,280 | 9,139 | |||||||||||
Interest expense | (46,183 | ) | (46,160 | ) | (91,094 | ) | (88,812 | ) | |||||||
Income before income tax | $ | 29,077 | $ | 100,826 | $ | 131,717 | $ | 265,713 |
|
The following tables set forth external net revenue, net of intercompany eliminations, and long-lived asset information where individual countries represent a material portion of the total (in thousands):
Three months ended | Six months ended | ||||||||||||||
February 29, 2020 | February 28, 2019 | February 29, 2020 | February 28, 2019 | ||||||||||||
External net revenue: | |||||||||||||||
Singapore | $ | 1,216,369 | $ | 1,588,931 | $ | 3,247,285 | $ | 3,907,604 | |||||||
Mexico | 1,153,619 | 1,052,781 | 2,344,957 | 2,048,202 | |||||||||||
China | 968,386 | 1,199,016 | 2,123,321 | 2,517,454 | |||||||||||
Malaysia | 505,424 | 414,433 | 996,230 | 793,961 | |||||||||||
Ireland | 181,790 | 205,480 | 435,875 | 281,199 | |||||||||||
Other | 1,035,235 | 891,648 | 2,050,948 | 1,837,335 | |||||||||||
Foreign source revenue | 5,060,823 | 5,352,289 | 11,198,616 | 11,385,755 | |||||||||||
U.S. | 1,064,260 | 714,701 | 2,432,165 | 1,187,510 | |||||||||||
Total | $ | 6,125,083 | $ | 6,066,990 | $ | 13,630,781 | $ | 12,573,265 |
February 29, 2020 | August 31, 2019 | |||||||
Long-lived assets: | ||||||||
China | $ | 1,488,548 | $ | 1,579,904 | ||||
Mexico | 404,896 | 418,641 | ||||||
Switzerland | 217,065 | 158 | ||||||
Malaysia | 208,576 | 154,386 | ||||||
Singapore | 148,583 | 156,028 | ||||||
Taiwan | 118,315 | 123,608 | ||||||
Hungary | 99,435 | 85,809 | ||||||
Vietnam | 93,495 | 85,728 | ||||||
Other | 470,688 | 462,261 | ||||||
Long-lived assets related to foreign operations | 3,249,601 | 3,066,523 | ||||||
U.S. | 1,148,011 | 1,146,335 | ||||||
Total | $ | 4,397,612 | $ | 4,212,858 |
Three months ended | Six months ended | ||||||||||||||
February 29, 2020(2) | February 28, 2019(3) | February 29, 2020(2) | February 28, 2019(3) | ||||||||||||
Employee severance and benefit costs | $ | 8,012 | $ | 3,768 | $ | 26,793 | $ | 8,947 | |||||||
Lease costs | 6,229 | — | 6,468 | 9 | |||||||||||
Asset write-off costs | 9,109 | (3,396 | ) | 25,425 | (3,212 | ) | |||||||||
Other costs | 6,254 | 445 | 16,169 | 1,098 | |||||||||||
Total restructuring and related charges(1) | $ | 29,604 | $ | 817 | $ | 74,855 | $ | 6,842 |
(1) | Includes $14.7 million and $0.3 million recorded in the EMS segment, $14.5 million and $0.5 million recorded in the DMS segment and $0.4 million and $0.0 million of non-allocated charges for the three months ended February 29, 2020 and February 28, 2019, respectively. Includes $32.1 million and $4.7 million recorded in the EMS segment, $39.7 million and $2.1 million recorded in the DMS segment and $3.1 million and $0.0 million of non-allocated charges for |
(2) | Primarily relates to the 2020 Restructuring Plan. |
(3) | Primarily relates to the 2017 Restructuring Plan. |
Employee Severance and Benefit Costs | Lease Costs | Asset Write-off Costs | Other Related Costs | Total | |||||||||||||||
Balance as of August 31, 2019(1) | $ | 3,162 | $ | 1,980 | $ | — | $ | 789 | $ | 5,931 | |||||||||
Restructuring related charges | 26,793 | 6,468 | 25,425 | 450 | 59,136 | ||||||||||||||
Asset write-off charge and other non-cash activity | (95 | ) | (5,637 | ) | (25,425 | ) | 2 | (31,155 | ) | ||||||||||
Cash payments | (16,415 | ) | (278 | ) | — | (577 | ) | (17,270 | ) | ||||||||||
Balance as of February 29, 2020 | $ | 13,445 | $ | 2,533 | $ | — | $ | 664 | $ | 16,642 |
(1) | Balance as of August 31, 2019 primarily relates to the 2017 Restructuring Plan. |
Three months ended | Six months ended | ||||||||||
February 29, 2020 | February 28, 2019 | February 29, 2020 | February 28, 2019 | ||||||||
U.S. federal statutory income tax rate | 21.0 | % | 21.0 | % | 21.0 | % | 21.0 | % | |||
Effective income tax rate | 108.9 | % | 33.0 | % | 71.0 | % | 27.9 | % |
Three months ended | Six months ended | ||||||||||
February 29, 2020 | February 28, 2019 | February 29, 2020 | February 28, 2019 | ||||||||
Restricted stock units | 4,499 | 1,348 | 1,035 | 1,348 | |||||||
Employee stock purchase plan | 164 | — | — | — | |||||||
Stock appreciation rights | 28 | — | — | — |
Dividend Declaration Date | Dividend per Share | Total of Cash Dividends Declared | Date of Record for Dividend Payment | Dividend Cash Payment Date | |||||||||
Fiscal Year 2020: | October 17, 2019 | $ | 0.08 | $ | 12,647 | November 15, 2019 | December 2, 2019 | ||||||
January 23, 2020 | $ | 0.08 | $ | 12,517 | February 14, 2020 | March 4, 2020 | |||||||
Fiscal Year 2019: | October 18, 2018 | $ | 0.08 | $ | 13,226 | November 15, 2018 | December 3, 2018 | ||||||
January 24, 2019 | $ | 0.08 | $ | 12,706 | February 15, 2019 | March 1, 2019 |
Three months ended | Nine months ended | |||||||||||||||
May 31, 2019 | May 31, 2018 | May 31, 2019 | May 31, 2018 | |||||||||||||
Foreign source revenue | 86.5 | % | 91.2 | % | 89.2 | % | 91.8 | % |
7. Notes Payable$172.3 million and Long-Term Debt
Notes payable and long-term debt outstandingtotal liabilities assumed of $6.1 million were recorded at their estimated fair values as of May 31,the acquisition dates.
Maturity Date | May 31, 2019 | August 31, 2018 | ||||||||||
5.625% Senior Notes | Dec 15, 2020 | $ | 398,663 | $ | 397,995 | |||||||
4.700% Senior Notes | Sep 15, 2022 | 497,841 | 497,350 | |||||||||
4.900% Senior Notes | Jul 14, 2023 | 298,996 | 298,814 | |||||||||
3.950% Senior Notes | Jan 12, 2028 | 494,670 | 494,208 | |||||||||
Borrowings under credit facilities(1) | Nov 8, 2022 and Aug 24, 2020 | 429,648 | — | |||||||||
Borrowings under loans | Nov 8, 2022 and Aug 24, 2020 | 811,854 | 830,332 | |||||||||
|
|
|
| |||||||||
Total notes payable and long-term debt | 2,931,672 | 2,518,699 | ||||||||||
Less current installments of notes payable and long-term debt | 454,830 | 25,197 | ||||||||||
|
|
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| |||||||||
Notes payable and long-term debt, less current installments | $ | 2,476,842 | $ | 2,493,502 | ||||||||
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|
Debt Covenants
Borrowings under the Company’s debt agreements areterms of the Framework Agreement, the Company completed the third closing of its acquisition of certain assets of JJMD. The preliminary aggregate purchase price paid for the third closing was approximately $111.8 million in cash, which remains subject to various covenants that limitcertain post-closing adjustments based on conditions within the Company’s ability to: incur additional indebtedness, sellFramework Agreement. For the third closing, total assets effect mergersacquired of $199.7 million, including $83.2 million in contract assets, $35.1 million in inventory and certain transactions,$70.4 million in goodwill, and effect certain transactions with subsidiaries and affiliates. In addition,total liabilities assumed of $87.9 million, including $73.5 million of pension obligations, were recorded at their estimated fair values as of the revolving credit facilitiesacquisition date. There were no intangible assets identified in this acquisition and the 4.900% Senior Notes contain debt leverage and interest coverage covenants.goodwill is primarily attributable to the assembled workforce. The majority of the goodwill is currently not expected to be deductible for income tax purposes.
Fair Value
The estimated fair values of the assets and liabilities related to the second and third closings of these business combinations. The preliminary estimates and measurements are, therefore, subject to change during the measurement period for assets acquired, liabilities assumed and tax adjustments. The results of operations
(in thousands) | Fair Value Hierarchy | February 29, 2020 | August 31, 2019 | |||||||
Assets: | ||||||||||
Cash and cash equivalents: | ||||||||||
Cash equivalents | Level 1 | (1) | $ | 35,925 | $ | 27,804 | ||||
Prepaid expenses and other current assets: | ||||||||||
Short-term investments | Level 1 | 16,652 | 14,088 | |||||||
Forward foreign exchange contracts: | ||||||||||
Derivatives designated as hedging instruments (Note 9) | Level 2 | (2) | 2,730 | 904 | ||||||
Derivatives not designated as hedging instruments (Note 9) | Level 2 | (2) | 13,726 | 6,878 | ||||||
Other assets: | ||||||||||
Senior Non-Convertible Preferred Stock | Level 3 | (3) | 20,900 | 33,102 | ||||||
Liabilities: | ||||||||||
Accrued expenses: | ||||||||||
Forward foreign exchange contracts: | ||||||||||
Derivatives designated as hedging instruments (Note 9) | Level 2 | (2) | $ | 5,061 | $ | 15,999 | ||||
Derivatives not designated as hedging instruments (Note 9) | Level 2 | (2) | 15,474 | 55,391 | ||||||
Interest rate swaps: | ||||||||||
Derivatives designated as hedging instruments (Note 9) | Level 2 | (4) | 4,020 | 5,918 | ||||||
Other liabilities: | ||||||||||
Forward interest rate swaps: | ||||||||||
Derivatives designated as hedging instruments (Note 9) | Level 2 | (4) | 41,304 | 35,045 |
(1) | Consist of investments that are readily convertible to cash with original maturities of 90 days or less. |
(2) | The Company’s forward foreign exchange contracts are measured on a recurring basis at fair value, based on foreign currency spot rates and forward rates quoted by banks or foreign currency dealers. |
(3) | The Senior Non-Convertible Preferred Stock is valued each reporting period using unobservable inputs based on a discounted cash flow model and is classified as an available for sale debt security with any unrealized loss recorded to AOCI. As of February 29, 2020 and August 31, 2019, the unobservable inputs have an immaterial impact on the fair value calculation. |
(4) | Fair value measurements are based on the contractual terms of the derivatives and use observable market-based inputs. The interest rate swaps are valued using a discounted cash flow analysis on the expected cash flows of each derivative using observable inputs including interest rate curves and credit spreads. |
February 29, 2020 | August 31, 2019 | |||||||
(in thousands) | Carrying Amount | Carrying Amount | ||||||
Assets held for sale (1) | $ | 30,120 | $ | — |
(1) | The fair value of assets held for sale exceeds the carrying value. As a result, 0 impairment has been recorded for assets held for sale as of February 29, 2020. |
8. Trade Accounts Receivable Securitization
The Company regularly sells designated pools of trade accounts receivable under a foreign asset-backed securitization program, a North American asset-back securitization program and uncommitted trade accounts receivable sale programs (collectively referred to herein as the “programs”). The Company continues servicing the receivables sold and in exchange receives a servicing fee under each of the programs. Servicing fees related to each of the programs recognized during the three months and nine months ended May 31, 2019 and 2018 were not material. The Company does not record a servicing asset or liability on the Condensed Consolidated Balance Sheets aslong-term debt is carried at amortized cost; however, the Company estimates that the fee it receives to service these receivables approximates the fair market compensation to providevalues of notes payable and long-term debt for disclosure purposes. The following table presents the servicing activities.
Transferscarrying amounts and fair values of the receivables under the programs are accounted forCompany's notes payable and long-term debt, by hierarchy level as sales and, accordingly, net receivables sold under the programs are excluded from accounts receivable on the Condensed Consolidated Balance Sheets and are reflected as cash provided by operating activities on the Condensed Consolidated Statements of Cash Flows. The adoption of Accounting Standards UpdateNo. 2016-15 (“ASU2016-15”) described in Note 14, New Accounting Guidance, resulted in a reclassification of cash flows from operating activities to investing activities in the Company’s Condensed Consolidated Statement of Cash Flows for cash receipts related to collections on the deferred purchase price receivable (i.e. beneficial interest) on asset-backed securitization transactions. In addition, the beneficial interest of $162.2 million and $1.5 billion for the nine months ended May 31, 2019 and 2018, respectively, obtained in exchange for securitized receivables are reported asnon-cash investing activities.
Asset-Backed Securitization Programs
The Company continuously sells designated pools of trade accounts receivable under its foreign asset-backed securitization program to a special purpose entity, which in turn sells certain of the receivables to an unaffiliated financial institution and a conduit administered by an unaffiliated financial institution on a monthly basis. Effective October 1, 2018, the foreign asset-backed securitization program terms were amended and the program was extended to September 30, 2021. In connection with this amendment, there is no longer a deferred purchase price receivable for the foreign asset-backed securitization program as the entire purchase price is paid in cash when the receivables are sold.
As of October 1, 2018, approximately $734.2 million of accounts receivable sold under the foreign asset-backed securitization program was exchanged for the outstanding deferred purchase price receivable of $335.5 million. The remaining amount due to the financial institution of $398.7 million was subsequently settled for $25.2 million of cash and $373.5 million of trade accounts receivable sold to the financial institution. The previously sold trade accounts receivable were recorded at fair market value. Prior to the amendment, any portion of the purchase price for the receivables not paid in cash upon the sale occurring was recorded as a deferred purchase price receivable, which was paid from available cash as payments on the receivables were collected. The foreign asset-backed securitization program contains a guarantee of payment by the special purpose entity, in an amount equal to approximately the net cash proceeds under the program. No liability has been recorded for obligations under the guarantee as of May 31, 2019.
The special purpose entity in the foreign asset-backed securitization program is a separate bankruptcy-remote entity whose assets would be first available to satisfy the creditor claims of the unaffiliated financial institution. The Company is deemed the primary beneficiary of this special purpose entity as the Company has both the power to direct the activities of the entity that most significantly impact the entity’s economic performance and the obligation to absorb losses or the right to receive the benefits that could potentially be significant to the entity from the transfer of the trade accounts receivable into the special purpose entity. Accordingly, the special purpose entity associated with the foreign asset-backed securitization program is included in the Company’s Condensed Consolidated Financial Statements.
The North American asset-backed securitization program was terminated on October 9, 2018 and as of this date approximately $500.0 million of accounts receivable sold under the program was exchanged for the outstanding deferred purchase price receivable of $300.0 million and $200.0 million of cash. The previously sold trade accounts receivable were recorded at fair market value.
On November 27, 2018, the Company entered into a new North American asset-backed securitization program. The Company continuously sells designated pools of trade accounts receivable under its new North American asset-backed securitization program to a special purpose entity, which in turn sells certain of the receivables to conduits administered by unaffiliated financial institutions on a monthly basis. The special purpose entity in the North American asset-backed securitization program is a wholly-owned subsidiary of the Company and is included in the Company’s Condensed Consolidated Financial Statements. There is no longer a deferred purchase price receivable for the North American asset-backed securitization program as the entire purchase price is paid in cash when the receivables are sold. Additionally, $204.4 million in receivables are pledged as collateral to the unaffiliated financial institution as of May 31, 2019.
Following is a summary of the asset-backed securitization programs and key terms:
Maximum Amount of Net Cash Proceeds (in millions)(1) | Expiration Date | |||||||
North American | $ | 390.0 | November 22, 2021 | |||||
Foreign | $ | 400.0 | September 30, 2021 |
February 29, 2020 | August 31, 2019 | |||||||||||||||||
(in thousands) | Fair Value Hierarchy | Carrying Amount | Fair Value | Carrying Amount | Fair Value | |||||||||||||
Notes payable and long-term debt: (Note 5) | ||||||||||||||||||
5.625% Senior Notes | Level 2 | (1) | $ | 399,332 | $ | 409,692 | $ | 398,886 | $ | 416,000 | ||||||||
4.700% Senior Notes | Level 2 | (1) | 498,332 | 535,370 | 498,004 | 525,890 | ||||||||||||
4.900% Senior Notes | Level 3 | (2) | 299,178 | 326,619 | 299,057 | 318,704 | ||||||||||||
3.950% Senior Notes | Level 2 | (1) | 495,132 | 539,835 | 494,825 | 509,845 | ||||||||||||
3.600% Senior Notes | Level 2 | (1) | 494,470 | 510,905 | — | — |
(1) |
|
In connection with the asset-backed securitization programs, the Company recognized the following (in millions):
Three months ended | Nine months ended | |||||||||||||||
May 31, 2019 | May 31, 2018 | May 31, 2019(4) | May 31, 2018 | |||||||||||||
Trade accounts receivable sold | $ | 1,036 | $ | 1,913 | $ | 2,864 | $ | 6,362 | ||||||||
Cash proceeds received(1) | $ | 1,029 | $ | 1,379 | $ | 2,845 | $ | 5,821 | ||||||||
Pre-tax losses on sale of receivables(2) | $ | 7 | $ | 4 | $ | 19 | $ | 11 | ||||||||
Deferred purchase price receivables as of May 31(3) | $ | — | $ | 530 | $ | — | $ | 530 |
|
(2) |
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|
|
The asset-backed securitization programs require compliance with several covenants. The North American asset-backed securitization program covenants include compliance with the interest ratio and debt to EBITDA ratio of the Credit Facility. The foreign asset-backed securitization program covenants include limitations on certain corporate actions such as mergers and consolidations. As of May 31, 2019 and August 31, 2018, the Company was in compliance with all covenants under the asset-backed securitization programs.
Trade Accounts Receivable Sale Programs
The following is a summary of the trade accounts receivable sale programs with unaffiliated financial institutions where the Company may elect to sell receivables and the unaffiliated financial institution may elect to purchase, at a discount, on an ongoing basis:
Program | Maximum Amount (in millions)(1) | Type of Facility | Expiration Date | |||||||||||
A | $ | 800.0 | Uncommitted | August 31, 2022(2) | ||||||||||
B | $ | 150.0 | Uncommitted | November 30, 2019(3) | ||||||||||
C | 800.0 | CNY | Uncommitted | June 30, 2020 | ||||||||||
D | $ | 100.0 | Uncommitted | May 4, 2023(4) | ||||||||||
E | $ | 50.0 | Uncommitted | August 25, 2019 | ||||||||||
F | $ | 150.0 | Uncommitted | January 25, 2020(5) | ||||||||||
G | $ | 50.0 | Uncommitted | February 23, 2023(2) | ||||||||||
H | $ | 100.0 | Uncommitted | August 10, 2019(6) | ||||||||||
I | $ | 100.0 | Uncommitted | July 21, 2019(7) | ||||||||||
J | $ | 740.0 | Uncommitted | February 28, 2020(8) | ||||||||||
K | $ | 110.0 | Uncommitted | April 11, 2020(9) |
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In connection with the trade accounts receivable sale programs, the Company recognized the following (in millions):
Three months ended | Nine months ended | |||||||||||||||
May 31, 2019 | May 31, 2018 | May 31, 2019 | May 31, 2018 | |||||||||||||
Trade accounts receivable sold | $ | 1,548 | $ | 1,301 | $ | 5,101 | $ | 4,035 | ||||||||
Cash proceeds received | $ | 1,541 | $ | 1,296 | $ | 5,079 | $ | 4,025 | ||||||||
Pre-tax losses on sale of receivables(1) | $ | 7 | $ | 5 | $ | 22 | $ | 10 |
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9. Accumulated Other Comprehensive Income
The following table sets forth the changes in accumulated other comprehensive income (“AOCI”), net of tax, by component for the nine months ended May 31, 2019 (in thousands):
Foreign Currency Translation Adjustment | Derivative Instruments | Actuarial (Loss) Gain | Prior Service Cost | Available for Sale Securities | Total | |||||||||||||||||||
Balance as of August 31, 2018 | $ | 7,431 | $ | 8,116 | $ | (25,021 | ) | $ | (643 | ) | $ | (9,282 | ) | (19,399 | ) | |||||||||
Other comprehensive (loss) income before reclassifications | (5,636 | ) | (36,262 | ) | 103 | — | (4,769 | ) | (46,564 | ) | ||||||||||||||
Amounts reclassified from AOCI | — | 15,958 | — | — | — | 15,958 | ||||||||||||||||||
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Other comprehensive (loss) income(1) | (5,636 | ) | (20,304 | ) | 103 | — | (4,769 | ) | (30,606 | ) | ||||||||||||||
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Balance as of May 31, 2019 | $ | 1,795 | $ | (12,188 | ) | $ | (24,918 | ) | $ | (643 | ) | $ | (14,051 | ) | $ | (50,005 | ) | |||||||
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The following table sets forth the amounts reclassified from AOCI into the Condensed Consolidated Statements of Operations, and the associated financial statement line item, net of tax, for the periods indicated (in thousands):
Three months ended | Nine months ended | |||||||||||||||||||
Comprehensive Income Components | Financial Statement Line Item | May 31, 2019 | May 31, 2018 | May 31, 2019 | May 31, 2018 | |||||||||||||||
Unrealized losses (gains) on derivative instruments: | ||||||||||||||||||||
Foreign exchange contracts | Cost of revenue | $ | (1,298 | ) | $ | (10,459 | ) | $ | 17,248 | $ | (20,519 | ) | ||||||||
Interest rate contracts | Interest expense | (430 | ) | (3,431 | ) | (1,290 | ) | (8,455 | ) | |||||||||||
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Total amounts reclassified from AOCI(1)(2) | $ | (1,728 | ) | $ | (13,890 | ) | $ | 15,958 | $ | (28,974 | ) | |||||||||
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10.
The Internal Revenue Service (“IRS”) completed its field examination of the Company’s tax returns for fiscal years 2009 through 2011 and issued a Revenue Agent’s Report (“RAR”) on May 27, 2015, which was updated on June 22, 2016. The IRS completed its field examination of the Company’s tax returns for fiscal years 2012 through 2014 and issued an RAR on April 19, 2017. The proposed adjustments in the RAR from both examination periods relate primarily to U.S. taxation of
certain intercompany transactions. On May 8, 2019, the tax return audits for fiscal years 2009 through 2014 were effectively settled when the Company agreed to the IRS Office of Appeals’ Form870-AD (Offer to Waive Restrictions on Assessment and Collection of Tax Deficiency and to Accept Overassessment) adjustments, which were substantially lower than the initial RAR proposed adjustments. The settlement did not have a material effect on the Company’s financial position, results of operations, or cash flows and no additional tax liabilities were recorded.
11. Derivative Financial Instruments and Hedging Activities
The Company is directly and indirectly affected by changes in certain market conditions. These changes in market conditions may adversely impact the Company’s financial performance and are referred to as market risks. The Company, where deemed appropriate, uses derivatives as risk management tools to mitigate the potential impact of certain market risks. The primary market risks managed by the Company through the use of derivative instruments are foreign currency risk and interest rate risk.
Foreign Currency Risk Management
Forward contracts are put in place to manage the foreign currency risk associated with the anticipated foreign currency denominated revenues and expenses. A hedging relationship existed with an aggregate notional amount outstanding of $135.9 million and $293.4 million as of May 31, 2019 and August 31, 2018, respectively. The related forward foreign exchange contracts have been designated as hedging instruments and are accounted for as cash flow hedges. The forward foreign exchange contract transactions will effectively lock in the value of anticipated foreign currency denominated revenues and expenses against foreign currency fluctuations. The anticipated foreign currency denominated revenues and expenses being hedged are expected to occur between June 1, 2019 and February 29, 2020.
In addition to derivatives that are designated as hedging instruments and qualify for hedge accounting, the Company also enters into forward contracts to economically hedge transactional exposure associated with commitments arising from trade accounts receivable, trade accounts payable, fixed purchase obligations and intercompany transactions denominated in a currency other than the functional currency of the respective operating entity. The aggregate notional amount of these outstanding contracts as of May 31, 2019 and August 31, 2018, was $2.1 billion and $2.3 billion, respectively.
The following table presents the fair values of the Company’s derivative instruments recorded in the Condensed Consolidated Balance Sheets utilized for foreign currency risk management purposes as of May 31, 2019 and August 31, 2018 (in thousands):
Fair Values of Derivative Instruments | ||||||||||||||||||||
Asset Derivatives | Liability Derivatives | |||||||||||||||||||
Balance Sheet Location | Fair Value as of May 31, 2019(1) | Fair Value as of August 31, 2018(1) | Balance Sheet Location | Fair Value as of May 31, 2019(1) | Fair Value as of August 31, 2018(1) | |||||||||||||||
Derivatives designated as hedging instruments: | ||||||||||||||||||||
Forward foreign exchange contracts | Prepaid expenses and other current assets | $ | 644 | $ | 225 | Accrued expenses | $ | 3,853 | $ | 13,364 | ||||||||||
Derivatives not designated as hedging instruments: | ||||||||||||||||||||
Forward foreign exchange contracts | Prepaid expenses and other current assets | $ | 5,216 | $ | 10,125 | Accrued expenses | $ | 26,851 | $ | 46,171 |
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The Company’s forward foreign exchange contracts are measured on a recurring basis at fair value, based on foreign currency spot rates and forward rates quoted by banks or foreign currency dealers.
The gains and losses recognized in earnings due to hedge ineffectiveness and the amount excluded from effectiveness testing were not material for all periods presented and are included as components of net revenue, cost of revenue and selling, general and administrative expense, which are the same line items in which the hedged items are recorded.
The following table presents the net gains from forward contracts recorded in the Condensed Consolidated Statements of Operations for the periods indicated (in thousands):
Derivatives Not Designated as Hedging Instruments Under ASC 815 | Location of (Loss) Gain | Amount of (Loss) Gain Recognized in Net Income on Derivatives | ||||||||||||||||
Three months ended | Nine months ended | |||||||||||||||||
May 31, 2019 | May 31, 2018 | May 31, 2019 | May 31, 2018 | |||||||||||||||
Forward foreign exchange contracts(1) | Cost of revenue | $ | (33,476 | ) | $ | (19,785 | ) | $ | 9,332 | $ | 25,959 |
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Interest Rate Risk Management
The Company periodically enters into interest rate swaps to manage interest rate risk associated with the Company’s borrowings.
Cash Flow Hedges
The following table presents the interest rate swaps outstanding as of May 31, 2019, which have been designated as hedging instruments and accounted for as cash flow hedges:
Interest Rate Swap Summary | Hedged Interest Rate Payments | Aggregate Notional Amount (in millions) | Effective Date | Expiration Date (1) | ||||||||||||
Forward Interest Rate Swap | ||||||||||||||||
Anticipated Debt Issuance | Fixed | $ | 200.0 | October 22, 2018 | December 15, 2020 | (2) | ||||||||||
Interest Rate Swaps(3) | ||||||||||||||||
2017 Term Loan Facility | Variable | $ | 200.0 | September 30, 2016 | June 30, 2019 | |||||||||||
2017 Term Loan Facility | Variable | $ | 200.0 | October 11, 2018 | August 31, 2020 | |||||||||||
2018 Term Loan Facility | Variable | $ | 350.0 | August 24, 2018 | August 24, 2020 |
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12. Restructuring and Related Charges
Following is a summary of the Company’s restructuring and related charges (in thousands):
Three months ended | Nine months ended | |||||||||||||||
May 31, 2019 | May 31, 2018 | May 31, 2019 | May 31, 2018 | |||||||||||||
Employee severance and benefit costs | $ | 6,513 | $ | 5,058 | $ | 15,460 | $ | 11,048 | ||||||||
Lease costs | (50 | ) | 1,589 | (41 | ) | 1,596 | ||||||||||
Assetwrite-off costs | (343 | ) | 5,575 | (3,555 | ) | 14,838 | ||||||||||
Other costs | 3,220 | 425 | 4,318 | 1,980 | ||||||||||||
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Total restructuring and related charges(1) | $ | 9,340 | $ | 12,647 | $ | 16,182 | $ | 29,462 | ||||||||
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2017 Restructuring Plan
On September 15, 2016, the Company’s Board of Directors formally approved a restructuring plan to better align the Company’s global capacity and administrative support infrastructure to further optimize organizational effectiveness. This action includes headcount reductions across the Company’s selling, general and administrative cost base and capacity realignment in higher cost locations (the “2017 Restructuring Plan”).
The 2017 Restructuring Plan, totaling $195.0 million in restructuring and other related costs, is substantially complete as of May 31, 2019.
The table below summarizes the Company’s liability activity, primarily associated with the 2017 Restructuring Plan
(in thousands):
Employee Severance and Benefit Costs | Lease Costs | Asset Write-off Costs | Other Related Costs | Total | ||||||||||||||||
Balance as of August 31, 2018 | $ | 18,131 | $ | 2,684 | $ | — | $ | 522 | $ | 21,337 | ||||||||||
Restructuring related charges | 15,460 | (41 | ) | (3,555 | ) | 1,469 | 13,333 | |||||||||||||
Assetwrite-off charge and othernon-cash activity | (331 | ) | — | 3,555 | (14 | ) | 3,210 | |||||||||||||
Cash payments | (23,811 | ) | (450 | ) | — | (1,275 | ) | (25,536 | ) | |||||||||||
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Balance as of May 31, 2019 | $ | 9,449 | $ | 2,193 | $ | — | $ | 702 | $ | 12,344 | ||||||||||
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13. Business Acquisitions
Fiscal year 2019
During fiscal year 2018, the Company and Johnson & Johnson Medical Devices Companies (“JJMD”) entered into a Framework Agreement to form a strategic collaboration and expand its existing relationship. The strategic collaboration expands the Company’s medical device manufacturing portfolio, diversification and capabilities.
On February 25, 2019 and April 29, 2019, under the terms of the Framework Agreement, the Company completed the initial closing and second closing, respectively, of its acquisition of certain assets of JJMD. The preliminary aggregate purchase price paid for both the initial closing and second closing was approximately $153.2 million in cash, which remains subject to certain post-closing adjustments. The acquisition of the JJMD assets has been accounted for as a business combination using the acquisition method of accounting. Total assets acquired of $163.6 million and total liabilities assumed of $10.4 million were recorded at their estimated fair values as of the acquisition dates. The final closings, which are subject to customary closing conditions, are expected to occur during fiscal year 2020.
The Company is currently evaluating the fair values of the assets and liabilities related to this business combination. The preliminary estimates and measurements are, therefore, subject to change during the measurement period for assets acquired, liabilities assumed and tax adjustments. The results of operations were included in the Company’s condensed consolidated financial results beginning on February 25, 2019 for the initial closing and April 29, 2019 for the second closing. The Company believes it is impracticable to provide pro forma information for the acquisition of the JJMD assets.
Fiscal year 2018
Acquisition
On September 1, 2017, the Company completed the acquisition of True-Tech Corporation (“True-Tech”) for approximately $95.9 million in cash. True-Tech is a manufacturer specializing in aerospace, semiconductor and medical machined components.
The acquisition of True-Tech assets was accounted for as a business combination using the acquisition method of accounting. Assets acquired of $114.7 million, including $25.9 million in intangible assets and $22.6 million in goodwill, and liabilities assumed of $18.8 million were recorded at their estimated fair values as of the acquisition date. The excess of the
purchase price over the fair value of the acquired assets and assumed liabilities was recorded to goodwill and was fully allocated to the EMS segment. The majority of the goodwill is currently expected to be deductible for income tax purposes. The results of operations were included in the Company’s condensed consolidated financial results beginning on September 1, 2017. Pro forma information has not been provided as the acquisition of True-Tech is not deemed to be significant.
14.19. New Accounting Guidance
During fiscal year 2016, the FASB issued a new accounting standard to address the presentation of certain transactions within the statement of cash flows with the objective of reducing the existing diversity in practice. This standard was adopted on September 1, 2018 on a retrospective basis and resulted in a reclassification of cash flows from operating activities to investing activities in the Company’s Consolidated Statement of Cash Flows for cash receipts related to collections on the deferred purchase price receivable on asset-backed securitization transactions. The increase in cash flow from investing activities and the corresponding decrease to cash flow from operating activities upon adoption of the standard was $96.8 million and $1.6 billion for the nine months ended May 31, 2019 and 2018, respectively.
During fiscal year 2017, the FASB issued a new accounting standard to improve the accounting for the income tax consequences of intra-entity transfers of assets other than inventory. The new standard eliminates the exception for an intra-entity transfer of an asset other than inventory and requires an entity to recognize the income tax consequences when the transfer occurs. This guidance became effective for the Company beginning in the first quarter of fiscal year 2019. This guidance was adopted on a modified retrospective basis and an immaterial cumulative-effect adjustment was recorded, which reduced retained earnings as of September 1, 2018.
During fiscal year 2017, the FASB issued a new accounting standard which clarifies the scope of accounting for asset derecognition and adds further guidance for recognizing gains and losses from the transferof non-financial assets in contracts withnon-customers. This guidance became effective for the Company beginning in the first quarter of fiscal year 2019 coincident with the new revenue recognition guidance. The adoption of this standard did not have a material impact on the Company’s Consolidated Financial Statements; however, the impact on future periods will depend on the facts and circumstances of future transactions.
During fiscal year 2017, the FASB issued a new accounting standard to improve the presentation of net periodic pension benefit cost. The Company adopted the standard on September 1, 2018 on a retrospective basis which results in reclassifications for the service cost component of net periodic benefit cost from selling, general and administrative expense to cost of revenue and for the other components from selling, general and administrative expense to other expense. Prior periods have not been reclassified due to immateriality.
During the second quarter of fiscal year 2018, the Securities and Exchange Commission (“SEC”) staff issued Staff Accounting Bulletin No. 118,Income Tax Accounting Implications of the Tax Cut and Jobs Act (“SAB 118”), which provides guidance on accounting for the tax effects of the Tax Cuts and Jobs Act of 2017 (“Tax Act”). SAB 118 provides a measurement period that should not extend beyond one year from the Tax Act enactment date for companies to complete the accounting under ASC 740. In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the Tax Act for which the accounting under ASC 740 is complete. To the extent that a company’s accounting for certain income tax effects of the Tax Act is incomplete, but it is able to determine a reasonable estimate, it must record a provisional estimate in its financial statements. If a company cannot determine a provisional estimate to be included in the financial statements, it should continue to apply ASC 740 on the basis of the provisions of the tax laws that were in effect immediately before the enactment of the Tax Act. The Company applied SAB 118 and provided required disclosures in Note 15—“Income Taxes.”
Recently Issued Accounting Guidance
During fiscal year 2016, the FASB issued a new accounting standard revising lease accounting. The new guidance requires organizations to recognize lease assets and lease liabilities on the Consolidated Balance Sheet and disclose key information regarding leasing arrangements. This guidance is effective for the Company beginning in the first quarter of fiscal year 2020. Early application of the new standard is permitted and the standard must be adopted using a modified retrospective approach. The Company intends to elect the package of practical expedients offered, which allows entities to not reassess: i) whether any contracts prior to the adoption date are or contain leases, ii) lease classification, and iii) whether capitalized initial direct costs continue to meet the definition of initial direct costs under the new guidance. In preparation for the adoption, the Company is implementing a new lease accounting system. While the Company is currently evaluating accounting policy elections and assessing overall impacts this new standard will have on its Consolidated Financial Statements, the new guidance is expected to have a material impact on the consolidated balance sheets upon adoption, primarily due to the recognition ofright-of-use assets and operating lease liabilities.
During fiscal year 2017, the FASB issued a new accounting standard to improve the financial reporting of hedging relationships to better portray the economic results of an entity’s risk management activities by simplifying the application of hedge accounting and improving the related disclosures in its financial statements. This guidance is effective for the Company beginning in the first quarter of fiscal year 2020, with early adoption permitted. The guidance must be applied using a modified retrospective approach. The adoption of this standard is not expected to have a material impact on the Company’s Consolidated Financial Statements; however, the impact on future periods will depend on the facts and circumstances of future transactions.
15. Income Taxes
Tax Act
On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Act. The Tax Act reduced the corporate tax rate, limited or eliminated certain tax deductions, and changed the taxation of foreign earnings of U.S. multinational companies. The enacted changes include a mandatory income inclusion of the historically untaxed foreign earnings of a U.S. company’s foreign subsidiaries and will effectively tax such income at reduced tax rates (“transition tax”). As a result of theone-time transition tax, the Company will have a substantial amount of previously taxed earnings that can be distributed to the U.S. without additional U.S. taxation. Additionally, the Tax Act provides for a 100% dividends received deduction for dividends received by U.S. corporations from10-percent or more owned foreign corporations. During the fiscal year ended August 31, 2018, the Company made reasonable estimates related to certain impacts of the Tax Act and, in accordance with SAB 118, recorded a net provisional income tax expense (benefit). In the second quarter of fiscal year 2019, the Company completed its accounting for the effects of the Tax Act under SAB 118 based on the analysis, interpretations and guidance available at that time. There may be future adjustments based on changes in interpretations, legislative updates or final regulations under the Tax Act, changes in accounting standards for income taxes, or changes in estimates the Company utilized to calculate the transitional impact. During the first quarter of fiscal year 2019, the Company elected to record the Global IntangibleLow-Taxed Income effects as a period cost.
The following table summarizes the tax expense (benefit) related to the Tax Act recognized during the SAB 118 measurement period (in millions):
One-time transition tax, inclusive of unrecognized tax benefits(1) | Re-measurement of the Company’s U.S. deferred tax attributes | Change in indefinite reinvestment assertion(2) | Other | Income tax expense (benefit) | ||||||||||||||||
Provisional income tax expense (benefit)—recognized in fiscal year 2018 | $ | 65.9 | $ | (10.5 | ) | $ | 85.0 | $ | 1.9 | $ | 142.3 | |||||||||
Income tax expense (benefit) adjustment—recognized in fiscal year 2019 | $ | (14.9 | ) | $ | 1.6 | $ | — | $ | — | $ | (13.3 | ) | ||||||||
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Income tax expense (benefit) related to the Tax Act through November 30, 2018 | $ | 51.0 | $ | (8.9 | ) | $ | 85.0 | $ | 1.9 | $ | 129.0 | |||||||||
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Effective Income Tax Rate
The U.S. federal statutory income tax rate and the Company’s effective income tax rate are as follows:
Three months ended | Nine months ended | |||||||||||||||
May 31, 2019 | May 31, 2018 | May 31, 2019 | May 31, 2018 | |||||||||||||
U.S. federal statutory income tax rate | 21.0 | % | 25.7 | % | 21.0 | % | 25.7 | % | ||||||||
Effective income tax rate | 47.0 | % | 40.0 | % | 32.4 | % | 45.6 | % |
The effective tax rate during the three months and nine months ended May 31, 2019, differed from the U.S. federal statutory rate primarily due to: (i) losses in tax jurisdictions with existing valuation allowances; and (ii) tax incentives granted to sites in Brazil, China, Malaysia, Singapore and Vietnam. In addition, the nine months ended May 31, 2019 included adjustments to amounts previously recorded for the Tax Act.
The effective tax rate differed from the blended U.S. federal statutory rate during the nine months ended May 31, 2018 primarily due to the Tax Act, including theone-time mandatory deemed repatriation tax and there-measurement of the Company’s U.S. deferred tax attributes of $30.9 million, partially offset by a reduction in unrecognized tax benefits of $16.1 million for the lapse of statute in anon-U.S. jurisdiction. Other primary drivers for the difference between the effective tax rate and the blended U.S. federal statutory rate during the three months and nine months ended May 31, 2018 are: (i) tax incentives granted to sites in Brazil, China, Malaysia, Singapore and Vietnam; and (ii) losses in tax jurisdictions with existing valuation allowances, including losses from stock-based compensation for the nine months ended May 31, 2018.
16. Revenue
Effective September 1, 2018, the Company adopted ASU2014-09, Revenue Recognition (Topic 606). The new standard is a comprehensive new revenue recognition model that requires the Company to recognize revenue in a manner which depicts the transfer of goods or services to its customers at an amount that reflects the consideration the Company expects to receive in exchange for those goods or services.
Prior to the adoption of the new standard, the Company recognized substantially all of its revenue from contracts with customers at a point in time, which was generally when the goods were shipped to or received by the customer, title and risk of ownership had passed, the price to the buyer was fixed or determinable and collectability was reasonably assured (net of estimated returns). Under the new standard, the Company will recognize revenue over time for the majority of its contracts with customers which will result in revenue for those customers being recognized earlier than under the previous guidance. Revenue for all other contracts with customers will continue to be recognized at a point in time, similar to recognition prior to the adoption of the standard.
Additionally, the new standard impacts the Company’s accounting for certain fulfillment costs, which include upfront costs to prepare for manufacturing activities that are expected to be recovered. Under the new standard, such upfront costs will be recognized as an asset and amortized on a systematic basis consistent with the pattern of the transfer of control of the products or services to which to the asset relates.
The Company adopted ASU2014-09 using the modified retrospective method by applying the guidance to all open contracts upon adoption and recorded a cumulative effect adjustment as of September 1, 2018, net of tax, of $42.6 million. No adjustments have been made to prior periods. Following is a summary of the cumulative effect adjustment (in thousands):
Balance as of August 31, 2018 | Adjustments due to adoption of ASU 2014-09 | Balance as of September 1, 2018 | ||||||||||
Assets | ||||||||||||
Contract assets(1) | $ | — | $ | 591,616 | $ | 591,616 | ||||||
Inventories, net (1) | $ | 3,457,706 | $ | (461,271 | ) | $ | 2,996,435 | |||||
Prepaid expenses and other current assets (1)(2) | $ | 1,141,000 | $ | (37,271 | ) | $ | 1,103,729 | |||||
Deferred income taxes(1)(2) | $ | 218,252 | $ | (8,325 | ) | $ | 209,927 | |||||
Liabilities | ||||||||||||
Contract liabilities(2)(3) | $ | — | $ | 690,142 | $ | 690,142 | ||||||
Deferred income(2)(3)(4) | $ | 691,365 | $ | (691,365 | ) | $ | — | |||||
Other accrued expenses(3)(4) | $ | 1,000,979 | $ | 40,392 | $ | 1,041,371 | ||||||
Deferred income taxes(1) | $ | 114,385 | $ | 2,977 | $ | 117,362 | ||||||
Equity | ||||||||||||
Retained earnings (1)(2) | $ | 1,760,097 | $ | 42,602 | $ | 1,802,699 |
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Significant Judgments
The Company is one of the leading providers of worldwide manufacturing services and solutions. The Company provides comprehensive electronics design, production and product management services to companies in various industries and end markets. The Company derives substantially all of its revenue from production and product management services (collectively referred to as “manufacturing services”), which encompasses the act of producing tangible products that are built to customer specifications, which are then provided to the customer.
The Company generally enters into manufacturing service contracts with its customers that provide the framework under which business will be conducted and customer purchase orders will be received for specific quantities and with predominantly fixed pricing. As a result, the Company considers its contract with a customer to be the combination of the manufacturing service contract and the purchase order, or any agreements or other similar documents.
The majority of our manufacturing service contracts relate to manufactured products which have no alternative use and for which the Company has an enforceable right to payment for the work completed to date. As a result, revenue is recognized over time when or as the Company transfers control of the promised products or services (known as performance obligations) to its customers. For certain other contracts with customers that do not meet the over time revenue recognition criteria, transfer of control occurs at a point in time which generally occurs upon delivery and transfer of risk and title to the customer.
Most of our contracts have a single performance obligation as the promise to transfer the individual manufactured product or service is capable of being distinct and is distinct within the context of the contract. For the majority of customers, performance obligations are satisfied over time based on the continuous transfer of control as manufacturing services are performed and are generally completed in less than one year.
The Company also derives revenue to a lesser extent from electronic design services to certain customers. Revenue from electronic design services is generally recognized over time as the services are performed.
For the Company’s over time customers, it believes the measure of progress which best depicts the transfer of control is based on costs incurred to date, relative to total estimated cost at completion (i.e., an input method). This method is a faithful depiction of the transfer of goods or services because it results in the recognition of revenue on the basis of ourto-date efforts in the satisfaction of a performance obligation relative to the total expected efforts in the satisfaction of the performance obligation. The Company believes that the use of an input method best depicts the transfer of control to the customer, which occurs as we incur costs on our contracts. The transaction price of each performance obligation is generally based upon the contractual stand-alone selling price of the product or service.
Certain contracts with customers include variable consideration, such as rebates, discounts, or returns. The Company recognizes estimates of this variable consideration that are not expected to result in a significant revenue reversal in the future, primarily based on the most likely level of consideration to be paid to the customer under the specific terms of the underlying programs.
Taxes collected from the Company’s customers and remitted to governmental authorities are presented within the Company’s Consolidated Statement of Operations on a net basis and are excluded from the transaction price. The Company has elected to account for shipping and handling activities related to contracts with customers as costs to fulfill the promise to transfer the goods. Accordingly, the Company records customer payments of shipping and handling costs as a component of net revenue, and classifies such costs as a component of cost of revenue.
The following table presents the effect of the adoption of the new revenue guidance on the Condensed Consolidated Balance Sheets as of May 31, 2019 (in thousands):
May 31, 2019 | ||||||||
As reported | Balance without the adoption of ASU2014-09 | |||||||
Assets | ||||||||
Contract assets (1) | $ | 899,482 | $ | — | ||||
Inventories, net(1) | $ | 3,159,369 | $ | 3,901,192 | ||||
Prepaid expenses and other current assets(1)(2) | $ | 524,833 | $ | 523,866 | ||||
Deferred income taxes(1) | $ | 202,556 | $ | 207,752 | ||||
Liabilities | ||||||||
Contract liabilities(2)(3) | $ | 544,831 | $ | — | ||||
Deferred income(2)(3)(4) | $ | — | $ | 544,012 | ||||
Other accrued expenses (3)(4) | $ | 1,491,623 | $ | 1,486,706 | ||||
Deferred income taxes(1) | $ | 115,370 | $ | 110,984 | ||||
Equity | ||||||||
Retained earnings(1)(2) | $ | 1,996,901 | $ | 1,853,592 |
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The following table presents the effect of the adoption of the new revenue guidance on the Consolidated Statement of Operations for the three months and nine months ended May 31, 2019 (in thousands):
Three months ended | Nine months ended | |||||||||||||||
May 31, 2019 | May 31, 2019 | |||||||||||||||
As reported | Balance without the adoption of ASU2014-09 | As reported | Balance without the adoption of ASU2014-09 | |||||||||||||
Net revenue(1) | $ | 6,135,602 | $ | 6,072,984 | $ | 18,708,867 | $ | 18,302,187 | ||||||||
Cost of revenue(2) | $ | 5,691,803 | $ | 5,665,654 | $ | 17,290,544 | $ | 16,982,850 | ||||||||
Operating income | $ | 140,918 | $ | 104,449 | $ | 511,611 | $ | 412,625 | ||||||||
Income tax expense | $ | 39,046 | $ | 38,015 | $ | 113,078 | $ | 114,798 | ||||||||
Net income | $ | 44,032 | $ | 8,594 | $ | 235,713 | $ | 135,007 |
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The following table presents the Company’s revenues disaggregated by segment (in thousands):
Three months ended | Nine months ended | |||||||||||||||||||||||
May 31, 2019 | May 31, 2019 | |||||||||||||||||||||||
EMS | DMS | Total | EMS | DMS | Total | |||||||||||||||||||
Timing of transfer | ||||||||||||||||||||||||
Point in time | $ | 699,825 | $ | 1,156,213 | $ | 1,856,038 | $ | 1,957,349 | $ | 4,722,696 | $ | 6,680,045 | ||||||||||||
Over time | $ | 3,288,664 | $ | 990,900 | $ | 4,279,564 | $ | 9,338,970 | $ | 2,689,852 | $ | 12,028,822 | ||||||||||||
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Total | $ | 3,988,489 | $ | 2,147,113 | $ | 6,135,602 | $ | 11,296,319 | $ | 7,412,548 | $ | 18,708,867 | ||||||||||||
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Contract Balances
Timing of revenue recognition may differ from the timing of invoicing to customers. The Company records an asset when revenue is recognized prior to invoicing a customer (“contract assets”) while a liability is recognized when a customer pays an invoice prior to the Company transferring control of the goods or services (“contract liabilities”). Amounts recognized as contract assets are generally transferred to receivables in the succeeding quarter due to the short-term nature of the manufacturing cycle. Contract assets are classified separately on the Condensed Consolidated Balance Sheets and transferred to receivables when right to payment becomes unconditional.
The Company reviews contract assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable after considering factors such as the age of the balances and the financial stability of the customer. No impairment costs related to contract assets were recognized during the three months and nine months ended May 31, 2019.
Revenue recognized during the nine months ended May 31, 2019 that was included in the contract liability balance as of September 1, 2018 was $350.9 million.
Fulfillment Costs
The Company capitalizes costs incurred to fulfill its contracts that i) relate directly to the contract or anticipated contracts, ii) are expected to generate or enhance the Company’s resources that will be used to satisfy the performance obligation under the contract, and iii) are expected to be recovered through revenue generated from the contract. Prior to the adoption of the new guidance, unless explicit reimbursement contracts existed, these costs were expensed as incurred. Capitalized fulfillment costs are amortized to cost of revenue as the Company satisfies the related performance obligations under the contract with approximate lives ranging from1-3 years. These costs, which are included in prepaid expenses and other current assets and other assets on the Consolidated Balance Sheets, generally represent upfront costs incurred to prepare for manufacturing activities.
The Company assesses the capitalized fulfillment costs for impairment at the end of each reporting period. The Company will recognize an impairment loss to the extent the carrying amount of the capitalized costs exceeds the recoverable amount. Recoverability is assessed by considering the capitalized fulfillment costs in relation to the forecasted profitability of the related manufacturing performance obligations. As of May 31, 2019, capitalized costs to fulfill are $74.4 million. Amortization of fulfillment costs was $9.8 million and $29.7 million, respectively, for the three months and nine months ended May 31, 2019. No impairments related to fulfillments costs were recognized during the three months and nine months ended May 31, 2019.
Remaining Performance Obligations
The Company applied the practical expedient and did not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less.
JABIL INC. AND SUBSIDIARIES
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the scope and duration of the COVID-19 outbreak and its impact on global economic systems, our employees, sites, operations, customers, and supply chain, managing growth effectively; our dependence on a limited number of customers; competitive challenges affecting our customers; managing rapid declines in customer demand and other related customer challenges that may occur; changes in technology; the occurrence of, success and expected financial results from, product ramps; competition; our ability to maintain and improve costs, quality and delivery for our customers; retaining key personnel; our ability to purchase components efficiently and reliance on a limited number of suppliers for critical components; risks associated with international sales and operations; our ability to achieve expected profitability from acquisitions; risk arising from our restructuring activities; performance in the markets in which we operate; and adverse changes in political conditions, in the U.S. and internationally, including, among others, adverse changes in tax laws and rates and our ability to estimate and manage their impact. For a further list and description of various risks, factors and uncertainties that could cause future results or events to differ materially from those expressed or implied in our forward-looking statements, see the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections contained in our Annual Report on Form10-K for the fiscal year ended August 31, 2018,2019, any subsequent reports on Form10-Q and Form8-K, and other filings we make with the Securities and Exchange Commission (“SEC”). Given these risks and uncertainties, the reader should not place undue reliance on these forward-looking statements.
Valeo S.A.
Three months ended | Nine months ended | |||||||||||||||
May 31, 2019 | May 31, 2018 | May 31, 2019 | May 31, 2018 | |||||||||||||
Net revenue | $ | 6,135,602 | $ | 5,436,952 | $ | 18,708,867 | $ | 16,323,585 | ||||||||
Gross profit | $ | 443,799 | $ | 398,227 | $ | 1,418,323 | $ | 1,264,645 | ||||||||
Operating income | $ | 140,918 | $ | 112,971 | $ | 511,611 | $ | 388,257 | ||||||||
Net income attributable to Jabil Inc. | $ | 43,482 | $ | 42,541 | $ | 234,436 | $ | 143,644 | ||||||||
Earnings per share—basic | $ | 0.28 | $ | 0.25 | $ | 1.50 | $ | 0.83 | ||||||||
Earnings per share—diluted | $ | 0.28 | $ | 0.25 | $ | 1.47 | $ | 0.81 |
Three months ended | Six months ended | ||||||||||||||
February 29, 2020 | February 28, 2019 | February 29, 2020 | February 28, 2019 | ||||||||||||
Net revenue | $ | 6,125,083 | $ | 6,066,990 | $ | 13,630,781 | $ | 12,573,265 | |||||||
Gross profit | $ | 430,125 | $ | 454,874 | $ | 983,964 | $ | 974,524 | |||||||
Operating income | $ | 90,630 | $ | 153,983 | $ | 243,409 | $ | 370,693 | |||||||
Net (loss) income attributable to Jabil Inc. | $ | (3,283 | ) | $ | 67,354 | $ | 37,139 | $ | 190,954 | ||||||
(Loss) earnings per share—basic | $ | (0.02 | ) | $ | 0.44 | $ | 0.24 | $ | 1.21 | ||||||
(Loss) earnings per share—diluted | $ | (0.02 | ) | $ | 0.43 | $ | 0.24 | $ | 1.19 |
Three months ended | |||||||||||||||||||
February 29, 2020 | November 30, 2019 | August 31, 2019 | May 31, 2019 | ||||||||||||||||
Sales cycle(1) | 30 days | 23 days | 19 days | 27 days | |||||||||||||||
Inventory turns (annualized)(2) | 5 turns | 6 turns | 6 turns | 6 turns | |||||||||||||||
Days in accounts receivable(3) | 43 days | 38 days | |||||||||||||||||
Days in inventory(4) | 58 days | 64 days | |||||||||||||||||
Days in accounts payable(5) | 74 days | 77 days | 77 days | 76 days |
(1) | The sales cycle is calculated as the sum of days in accounts receivable and days in inventory, less the days in accounts payable; accordingly, the variance in the sales cycle quarter over quarter is a direct result of changes in these indicators. |
(2) |
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(3) | Days in accounts receivable is calculated as accounts receivable, net, divided by net revenue multiplied by 90 days. During the three months ended |
the timing of collections in the second quarter. During the three months ended November 30, |
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(5) | Days in accounts payable |
Revenue Recognition
Effective September 1, 2018, our revenue recognition accounting policies changed in conjunction with the adoption of the new revenue recognition standard. Upon adoption, we recognize revenue over time as manufacturing services are completed for the majority of our contracts with customers, which results in revenue being recognized earlier than under the previous guidance. Revenue for all other contracts with customers will be recognized at a point in time, upon transfer of control of the product to the customer, which is effectively no change to our historical accounting. For further discussion of the new revenue recognition standard, refer to Note 16 — “Revenue” to the Condensed Consolidated Financial Statements.
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(dollars in millions) | May 31, 2019 | May 31, 2018 | Change | May 31, 2019 | May 31, 2018 | Change | ||||||||||||||||||
Net revenue | $ | 6,135.6 | $ | 5,437.0 | 12.9 | % | $ | 18,708.9 | $ | 16,323.6 | 14.6 | % |
Three months ended | Six months ended | ||||||||||||||||||||
(dollars in millions) | February 29, 2020 | February 28, 2019 | Change | February 29, 2020 | February 28, 2019 | Change | |||||||||||||||
Net revenue | $ | 6,125.1 | $ | 6,067.0 | 1.0 | % | $ | 13,630.8 | $ | 12,573.3 | 8.4 | % |
Net revenue increased during the nine months ended May 31, 2019, compared to the nine months ended May 31, 2018. Specifically, the EMS segment revenues increased 27% primarily due to (i) a 9% increase in revenues from customers within our networking and telecommunications business, (ii) a 9% increase in revenues from new customers within our cloud business, (iii) a 9% increase in revenues from existing customers within our industrial and energy business and (iv) a 5% increase in revenues from existing customers within our print and retail business.packaging businesses. The increase is partially offset by a 5% decrease from existing customers within our computing and storage business and capital equipment business. DMS segment revenues remained consistent due to a 6% increase in revenues from existing customers in our healthcare business. The increase is offset by a 6%12% decrease in revenue from customers within our mobility businessand edge devices and accessories businesses due to: (i) our ability to meet customer demand, which was greatly diminished as a resultCOVID-19 containment efforts were implemented in China during the second quarter of fiscal year 2020 and (ii) decreased end user product demand.
Effective September 1, 2018, our revenue recognition accounting policies changeddemand and end market dynamics in conjunction with the adoptionfirst quarter of the new revenue recognition standard. Upon adoption, we recognize revenue over time as manufacturing services are completed for the majority of our contracts with customers, which results in revenue being recognized earlier than under the previous guidance. Revenue for all other contracts with customers will be recognized at a point in time, upon transfer of control of the product to the customer, which is effectively no change to our historical accounting. For further discussion of the new revenue recognition standard, refer to Note 16 — “Revenue” to the Condensed Consolidated Financial Statements.
fiscal year 2020.
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May 31, 2019 | May 31, 2018 | May 31, 2019 | May 31, 2018 | |||||||||||||
EMS | 65 | % | 58 | % | 60 | % | 54 | % | ||||||||
DMS | 35 | % | 42 | % | 40 | % | 46 | % | ||||||||
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Total | 100 | % | 100 | % | 100 | % | 100 | % | ||||||||
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February 29, 2020 | February 28, 2019 | February 29, 2020 | February 28, 2019 | ||||||||
EMS | 63 | % | 63 | % | 61 | % | 58 | % | |||
DMS | 37 | % | 37 | % | 39 | % | 42 | % | |||
Total | 100 | % | 100 | % | 100 | % | 100 | % |
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May 31, 2019 | May 31, 2018 | May 31, 2019 | May 31, 2018 | |||||||||||||
Foreign source revenue | 86.5 | % | 91.2 | % | 89.2 | % | 91.8 | % |
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February 29, 2020 | February 28, 2019 | February 29, 2020 | February 28, 2019 | ||||||||
Foreign source revenue | 82.6 | % | 88.2 | % | 82.2 | % | 90.6 | % |
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(dollars in millions) | May 31, 2019 | May 31, 2018 | May 31, 2019 | May 31, 2018 | ||||||||||||
Gross profit | $ | 443.8 | $ | 398.2 | $ | 1,418.3 | $ | 1,264.6 | ||||||||
Percent of net revenue | 7.2 | % | 7.3 | % | 7.6 | % | 7.7 | % |
For the three months and nine months ended May 31, 2019, gross
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(dollars in millions) | February 29, 2020 | February 28, 2019 | February 29, 2020 | February 28, 2019 | |||||||||||
Gross profit | $ | 430.1 | $ | 454.9 | $ | 984.0 | $ | 974.5 | |||||||
Percent of net revenue | 7.0 | % | 7.5 | % | 7.2 | % | 7.8 | % |
Three months ended | Nine months ended | |||||||||||||||||||||||
(dollars in millions) | May 31, 2019 | May 31, 2018 | Change | May 31, 2019 | May 31, 2018 | Change | ||||||||||||||||||
Selling, general and administrative | $ | 274.5 | $ | 252.5 | $ | 22.0 | $ | 834.8 | $ | 789.5 | $ | 45.3 |
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(dollars in millions) | February 29, 2020 | February 28, 2019 | Change | February 29, 2020 | February 28, 2019 | Change | |||||||||||||||||
Selling, general and administrative | $ | 285.0 | $ | 282.1 | $ | 2.9 | $ | 613.9 | $ | 560.3 | $ | 53.6 |
Selling, general and administrative expenses increased during the nine months ended May 31, 2019, compared to the nine months ended May 31, 2018. The increase is predominantly due to (i) a $42.6$2.2 million increase in salary and salary related expenses and other costs primarily to support new business growth and development and (ii) $35.1our strategic collaboration with a healthcare company. The increase is partially offset by (i) a $5.0 million decrease in acquisition and integration charges related to our strategic collaboration with a healthcare company.company and (ii) a $0.6 million decrease in stock-based compensation expense.
healthcare company.
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(dollars in millions) | May 31, 2019 | May 31, 2018 | May 31, 2019 | May 31, 2018 | ||||||||||||
Research and development | $ | 11.4 | $ | 10.1 | $ | 32.7 | $ | 27.5 | ||||||||
Percent of net revenue | 0.2 | % | 0.2 | % | 0.2 | % | 0.2 | % |
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(dollars in millions) | February 29, 2020 | February 28, 2019 | February 29, 2020 | February 28, 2019 | |||||||||||
Research and development | $ | 11.3 | $ | 10.2 | $ | 22.1 | $ | 21.3 | |||||||
Percent of net revenue | 0.2 | % | 0.2 | % | 0.2 | % | 0.2 | % |
February 28, 2019.
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(dollars in millions) | May 31, 2019 | May 31, 2018 | Change | May 31, 2019 | May 31, 2018 | Change | ||||||||||||||||||
Amortization of intangibles | $ | 7.6 | $ | 10.0 | $ | (2.4 | ) | $ | 23.0 | $ | 29.9 | $ | (6.9 | ) |
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(dollars in millions) | February 29, 2020 | February 28, 2019 | Change | February 29, 2020 | February 28, 2019 | Change | |||||||||||||||||
Amortization of intangibles | $ | 13.6 | $ | 7.8 | $ | 5.8 | $ | 29.7 | $ | 15.4 | $ | 14.3 |
2019 as a result of our decision to rebrand. As such, this trade name was assigned a four-year estimated useful life and is being amortized on an accelerated basis.
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May 31, 2019 | May 31, 2018 | May 31, 2019 | May 31, 2018 | |||||||||||||
Employee severance and benefit costs | $ | 6.5 | $ | 5.0 | $ | 15.5 | $ | 11.1 | ||||||||
Lease costs | (0.1 | ) | 1.6 | (0.1 | ) | 1.6 | ||||||||||
Assetwrite-off costs | (0.3 | ) | 5.6 | (3.5 | ) | 14.8 | ||||||||||
Other costs | 3.2 | 0.4 | 4.3 | 2.0 | ||||||||||||
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Total restructuring and related charges(1) | $ | 9.3 | $ | 12.6 | $ | 16.2 | $ | 29.5 | ||||||||
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Three months ended | Six months ended | ||||||||||||||
February 29, 2020(2) | February 28, 2019(3) | February 29, 2020(2) | February 28, 2019(3) | ||||||||||||
Employee severance and benefit costs | $ | 8.0 | $ | 3.8 | $ | 26.8 | $ | 8.9 | |||||||
Lease costs | 6.2 | — | 6.5 | — | |||||||||||
Asset write-off costs | 9.1 | (3.4 | ) | 25.4 | (3.2 | ) | |||||||||
Other costs | 6.3 | 0.4 | 16.2 | 1.1 | |||||||||||
Total restructuring and related charges(1) | $ | 29.6 | $ | 0.8 | $ | 74.9 | $ | 6.8 |
(1) | Includes |
The approximately $40.0 million. We expect cost savings of $25.0 million during fiscal year 2020. Other expensePrimarily relates to the 2020 Restructuring Plan. Primarily relates to the 2017 Restructuring Plan. 15, 2016,20, 2019, our Board of Directors formally approved a restructuring plan to better alignrealign our global capacity and administrative support infrastructure, particularly in our mobility footprint in China, in order to further optimize organizational effectiveness. This action includes headcount reductions across our selling, general and administrative cost base and capacity realignment in higher cost locations (the “2017“2020 Restructuring Plan”).20172020 Restructuring Plan totaling $195.0reflects our intention only and restructuring decisions, and the timing of such decisions, at certain locations are still subject to consultation with our employees and their representatives.substantially complete asexpected to yield annualized cost savings beginning in fiscal year 2021 of May 31, 2019.1213 – “Restructuring and Related Charges” to the Condensed Consolidated Financial Statements for further discussion of restructuring and related charges for the 20172020 Restructuring Plan. Three months ended Six months ended (dollars in millions) February 29, 2020 February 28, 2019 Change February 29, 2020 February 28, 2019 Change Impairment on securities $ 12.2 $ — $ 12.2 $ 12.2 $ — $ 12.2 Three months ended Nine months ended (dollars in millions) May 31,
2019 May 31,
2018 Change May 31,
2019 May 31,
2018 Change $ 14.1 $ 10.1 $ 4.0 $ 39.4 $ 26.5 $ 12.9 Three months ended Six months ended (dollars in millions) February 29, 2020 February 28, 2019 Change February 29, 2020 February 28, 2019 Change Other expense $ 8.5 $ 11.8 $ (3.3 ) $ 19.7 $ 25.3 $ (5.6 ) increaseddecreased for the three months ended May 31, 2019,February 29, 2020, compared to the three months ended May 31, 2018,February 28, 2019, primarily due to: (i) $2.3 million related to $6.1 million of additionala decrease in fees associated with the utilization of the foreign and North American asset-backed securitization programs and trade accounts receivable sales programs. This increaseprograms and (ii) $2.6 million related to lower net periodic benefit costs. The decrease was partially offset by $2.1$1.6 million of other expense.increaseddecreased for the ninesix months ended May 31, 2019,February 29, 2020, compared to the ninesix months ended May 31, 2018,February 28, 2019, primarily due to: (i) $20.6$4.6 million related to a decrease in fees associated with the utilization of additionalthe trade accounts receivable sales programs and fees incurred for the amendment of the foreign asset-backed securitization program and the new North American asset-backed securitization program in fiscal year 2019 and an increase in fees associated with the utilization of the asset-backed securitization programs and trade accounts receivable sales programs.(ii) $4.3 million related to lower net periodic benefit costs. The increasedecrease was partially offset by (i) $5.1$3.3 million of other expense and (ii) $2.6 million of costs incurredexpense. Three months ended Six months ended (dollars in millions) February 29, 2020 February 28, 2019 Change February 29, 2020 February 28, 2019 Change Interest income $ 5.3 $ 4.8 $ 0.5 $ 11.3 $ 9.1 $ 2.2 ninethree months ended May 31, 2018, as a result ofFebruary 29, 2020, compared to the early redemption of the 8.250% Senior Notes due 2018.three months ended February 28, 2019.
Interest Income
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(dollars in millions) | May 31, 2019 | May 31, 2018 | Change | May 31, 2019 | May 31, 2018 | Change | ||||||||||||||||||
Interest income | $ | 6.8 | $ | 4.5 | $ | 2.3 | $ | 15.9 | $ | 13.3 | $ | 2.6 |
Interest income increased during the three months and ninesix months ended May 31, 2019,February 29, 2020, compared to the three months and ninesix months ended May 31, 2018,February 28, 2019, due to increased cash equivalents (investments that are readily convertible to cash with maturity dates of 90 days or less).
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(dollars in millions) | May 31, 2019 | May 31, 2018 | Change | May 31, 2019 | May 31, 2018 | Change | ||||||||||||||||||
Interest expense | $ | 50.5 | $ | 36.2 | $ | 14.3 | $ | 139.3 | $ | 110.2 | $ | 29.1 |
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(dollars in millions) | February 29, 2020 | February 28, 2019 | Change | February 29, 2020 | February 28, 2019 | Change | |||||||||||||||||
Interest expense | $ | 46.2 | $ | 46.2 | $ | — | $ | 91.1 | $ | 88.8 | $ | 2.3 |
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May 31, 2019 | May 31, 2018 | Change | May 31, 2019 | May 31, 2018 | Change | |||||||||||||||||||
Effective tax rate | 47.0 | % | 40.0 | % | 7.0 | % | 32.4 | % | 45.6 | % | (13.2 | )% |
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February 29, 2020 | February 28, 2019 | Change | February 29, 2020 | February 28, 2019 | Change | ||||||||||||
Effective income tax rate | 108.9 | % | 33.0 | % | 75.9 | % | 71.0 | % | 27.9 | % | 43.1 | % |
The effective tax rate decreased for the ninethree months and six months ended May 31, 2019, comparedFebruary 29, 2020, driven in part by increased restructuring charges with minimal related tax benefit; and (ii)
We are reporting “core” operating income, “core” earnings and “core” return on invested capitaladjusted free cash flow to provide investors with an additional method for assessing operating income and earnings, by presenting what we believe are our “core” manufacturing operations. A significant portion (based on the respective values) of the items that are excluded for purposes of calculating “core” operating income and “core” earnings also impacted certain balance sheet assets, resulting in a portion of an asset being written off without a corresponding recovery of cash we may have previously spent with respect to the asset. In the case of restructuring and related charges, we may make associated cash payments in the future. In addition, although, for purposes of calculating “core” operating income and “core” earnings, we exclude stock-based compensation expense (which we anticipate continuing to incur in the future) because it is anon-cash expense, the associated stock issued may result in an increase in our outstanding shares of stock, which may result in the dilution of our stockholders’ ownership interest. We encourage you to consider these matters when evaluating the utility of thesenon-GAAP financial measures.
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(in thousands, except for per share data) | May 31, 2019 | May 31, 2018 | May 31, 2019 | May 31, 2018 | ||||||||||||
Operating income (U.S. GAAP) | $ | 140,918 | $ | 112,971 | $ | 511,611 | $ | 388,257 | ||||||||
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Amortization of intangibles | 7,610 | 10,040 | 23,033 | 29,909 | ||||||||||||
Stock-based compensation expense and related charges | 14,506 | 15,038 | 47,452 | 82,822 | ||||||||||||
Restructuring and related charges | 9,340 | 12,647 | 16,182 | 29,462 | ||||||||||||
Distressed customer charge(1) | — | — | — | 14,706 | ||||||||||||
Business interruption and impairment charges, net(2) | — | (634 | ) | (2,860 | ) | 10,722 | ||||||||||
Acquisition and integration charges(3) | 13,391 | — | 35,066 | — | ||||||||||||
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Adjustments to operating income | 44,847 | 37,091 | 118,873 | 167,621 | ||||||||||||
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Core operating income(Non-GAAP) | $ | 185,765 | $ | 150,062 | $ | 630,484 | $ | 555,878 | ||||||||
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Net income attributable to Jabil Inc. (U.S. GAAP) | $ | 43,482 | $ | 42,541 | $ | 234,436 | $ | 143,644 | ||||||||
Adjustments to operating income | 44,847 | 37,091 | 118,873 | 167,621 | ||||||||||||
Adjustments for taxes(4) | 125 | (16 | ) | (17,837 | ) | 29,037 | ||||||||||
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Core earnings(Non-GAAP) | $ | 88,454 | $ | 79,616 | $ | 335,472 | $ | 340,302 | ||||||||
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Diluted earnings per share (U.S. GAAP) | $ | 0.28 | $ | 0.25 | $ | 1.47 | $ | 0.81 | ||||||||
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Diluted core earnings per share(Non-GAAP) | $ | 0.57 | $ | 0.46 | $ | 2.11 | $ | 1.92 | ||||||||
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Diluted weighted average shares outstanding used in the calculation of earnings per share (U.S. GAAP andNon-GAAP) | 155,678 | 173,279 | 159,036 | 176,997 | ||||||||||||
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(in thousands, except for per share data) | February 29, 2020 | February 28, 2019 | February 29, 2020 | February 28, 2019 | |||||||||||
Operating income (U.S. GAAP) | $ | 90,630 | $ | 153,983 | $ | 243,409 | $ | 370,693 | |||||||
Amortization of intangibles | 13,577 | 7,777 | 29,717 | 15,423 | |||||||||||
Stock-based compensation expense and related charges | 15,109 | 15,697 | 45,332 | 32,946 | |||||||||||
Restructuring and related charges | 29,604 | 817 | 74,855 | 6,842 | |||||||||||
Distressed customer charge (1) | — | — | 14,963 | — | |||||||||||
Net periodic benefit cost (2) | 2,776 | — | 4,601 | — | |||||||||||
Business interruption and impairment charges, net(3) | — | — | — | (2,860 | ) | ||||||||||
Acquisition and integration charges(4) | 7,752 | 12,785 | 23,886 | 21,675 | |||||||||||
Adjustments to operating income | 68,818 | 37,076 | 193,354 | 74,026 | |||||||||||
Core operating income (Non-GAAP) | $ | 159,448 | $ | 191,059 | $ | 436,763 | $ | 444,719 | |||||||
Net (loss) income attributable to Jabil Inc. (U.S. GAAP) | $ | (3,283 | ) | $ | 67,354 | $ | 37,139 | $ | 190,954 | ||||||
Adjustments to operating income | 68,818 | 37,076 | 193,354 | 74,026 | |||||||||||
Impairment on securities | 12,205 | — | 12,205 | — | |||||||||||
Net periodic benefit cost(2) | (2,776 | ) | — | (4,601 | ) | — | |||||||||
Adjustments for taxes(5) | 3,091 | (4,219 | ) | 3,588 | (17,962 | ) | |||||||||
Core earnings (Non-GAAP) | $ | 78,055 | $ | 100,211 | $ | 241,685 | $ | 247,018 | |||||||
Diluted (loss) earnings per share (U.S. GAAP) | $ | (0.02 | ) | $ | 0.43 | $ | 0.24 | $ | 1.19 | ||||||
Diluted core earnings per share (Non-GAAP) | $ | 0.50 | $ | 0.64 | $ | 1.55 | $ | 1.54 | |||||||
Diluted weighted average shares outstanding (U.S. GAAP) | 152,058 | 156,737 | 156,171 | 160,413 | |||||||||||
Diluted weighted average shares outstanding (Non-GAAP) | 155,714 | 156,737 | 156,171 | 160,413 |
(1) | Charges relate to |
(2) | Following the adoption of Accounting Standards Update 2017-07, Compensation - Retirement Benefits (Topic 715) (“ASU 2017-07”), pension service cost is recognized in cost of revenue and all other components of net periodic benefit cost, including return on plan assets, are presented in other expense. We are reclassifying the pension components in other expense to core operating income as we assess operating performance, inclusive of all components of net periodic benefit cost, with the related revenue. There is no impact to core earnings or diluted core earnings per share for this adjustment. |
(3) | Charges, net of insurance proceeds of |
(4) | Charges related to our strategic collaboration with Johnson & Johnson Medical Devices Companies (“JJMD”). |
(5) | The |
Six months ended | |||||||
(in thousands) | February 29, 2020 | February 28, 2019(1) | |||||
Net cash provided by operating activities (U.S. GAAP) | $ | 84,166 | $ | 107,765 | |||
Cash receipts on sold receivables | — | 96,846 | |||||
Acquisition of property, plant and equipment | (448,765 | ) | (537,140 | ) | |||
Proceeds and advances from sale of property, plant and equipment | 36,624 | 144,968 | |||||
Adjusted free cash flow (Non-GAAP) | $ | (327,975 | ) | $ | (187,561 | ) |
Three months ended | ||||||||
(in thousands) | May 31, 2019 | May 31, 2018 | ||||||
Numerator: | ||||||||
Operating income (U.S. GAAP) | $ | 140,918 | $ | 112,971 | ||||
Tax effect (1) | (42,490 | ) | (30,717 | ) | ||||
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After-tax operating income | 98,428 | 82,254 | ||||||
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Annualizedafter-tax operating income | $ | 393,712 | $ | 329,016 | ||||
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Core operating income(Non-GAAP) | $ | 185,765 | $ | 150,062 | ||||
Tax effect (2) | (41,150 | ) | (29,951 | ) | ||||
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After-tax core operating income | 144,615 | 120,111 | ||||||
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Annualizedafter-tax core operating income | $ | 578,460 | $ | 480,444 | ||||
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Denominator: | ||||||||
Average total Jabil Inc. stockholders’ equity (3) | $ | 1,851,074 | $ | 2,227,618 | ||||
Average notes payable and long-term debt, less current installments (3) | 2,479,615 | 2,152,478 | ||||||
Average current installments of notes payable and long-term debt (3) | 315,008 | 149,024 | ||||||
Average cash and cash equivalents (3) | (721,572 | ) | (809,144 | ) | ||||
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Net invested capital base | $ | 3,924,125 | $ | 3,719,976 | ||||
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Return on Invested Capital (U.S. GAAP) | 10.0 | % | 8.8 | % | ||||
Adjustments noted above | 4.7 | % | 4.1 | % | ||||
Core Return on Invested Capital(Non-GAAP) | 14.7 | % | 12.9 | % |
(1) |
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be deductible for income tax purposes.
matures, respectively, may create challenges in doing so, such as incurring a higher cost of capital.
As a result of the Tax Act and after theone-time transition tax on our historically untaxed foreign earnings, the cash and cash equivalents held by our foreign subsidiaries will no longer be subject to U.S. federal income tax consequences upon subsequent repatriation to the United States. As a result, most Most of our cash and cash equivalents as of May 31, 2019February 29, 2020 could be repatriated to the United States without potential tax consequences.
(in thousands) | 5.625% Senior Notes | 4.700% Senior Notes | 4.900% Senior Notes | 3.950% Senior Notes | Borrowings under revolving credit facilities(1) | Borrowings under loans | Total notes payable and credit facilities | |||||||||||||||||||||
Balance as of August 31, 2018 | $ | 397,995 | $ | 497,350 | $ | 298,814 | $ | 494,208 | $ | — | $ | 830,332 | $ | 2,518,699 | ||||||||||||||
Borrowings | — | — | — | — | 9,482,468 | — | 9,482,468 | |||||||||||||||||||||
Payments | — | — | — | — | (9,052,402 | ) | (18,885 | ) | (9,071,287 | ) | ||||||||||||||||||
Other | 668 | 491 | 182 | 462 | (418 | ) | 407 | 1,792 | ||||||||||||||||||||
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Balance as of May 31, 2019 | $ | 398,663 | $ | 497,841 | $ | 298,996 | $ | 494,670 | $ | 429,648 | $ | 811,854 | $ | 2,931,672 | ||||||||||||||
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Maturity Date | Dec 15, 2020 | Sep 15, 2022 | Jul 14, 2023 | Jan 12, 2028 | | Nov 8, 2022 and Aug 24, 2020 | (1) | | Nov 8, 2022 and Aug 24, 2020 | | ||||||||||||||||||
Original Facility/Maximum Capacity | $ | 400.0 million | $ | 500.0 million | $ | 300.0 million | $ | 500.0 million | $ | 2.4 billion | (1) | $ | 851.7 million |
(in thousands) | 5.625% Senior Notes | 4.700% Senior Notes | 4.900% Senior Notes | 3.950% Senior Notes | 3.600% Senior Notes(1) | Borrowings under revolving credit facilities(2)(3) | Borrowings under commercial paper program(4) | Borrowings under loans(2) | Total notes payable and credit facilities | ||||||||||||||||||||||||||
Balance as of August 31, 2019 | $ | 398,886 | $ | 498,004 | $ | 299,057 | $ | 494,825 | $ | — | $ | — | $ | — | $ | 805,693 | $ | 2,496,465 | |||||||||||||||||
Borrowings | — | — | — | — | 499,165 | 4,026,532 | 237,661 | 300,000 | 5,063,358 | ||||||||||||||||||||||||||
Payments | — | — | — | — | — | (4,026,532 | ) | — | (806,356 | ) | (4,832,888 | ) | |||||||||||||||||||||||
Other | 446 | 328 | 121 | 307 | (4,695 | ) | — | — | 758 | (2,735 | ) | ||||||||||||||||||||||||
Balance as of February 29, 2020 | $ | 399,332 | $ | 498,332 | $ | 299,178 | $ | 495,132 | $ | 494,470 | $ | — | $ | 237,661 | $ | 300,095 | $ | 2,724,200 | |||||||||||||||||
Maturity Date | Dec 15, 2020 | Sep 15, 2022 | Jul 14, 2023 | Jan 12, 2028 | Jan 15, 2030 | Jan 22, 2023 and Jan 22, 2025(2)(3) | (4) | Jan 22, 2025(2) | |||||||||||||||||||||||||||
Original Facility/ Maximum Capacity | $400.0 million | $500.0 million | $300.0 million | $500.0 million | $500.0 million | $3.3 billion(2)(3) | (4) | $301.7 million(2) |
(1) | On January 15, 2020, we issued $500.0 million of publicly registered 3.600% Senior Notes due 2030 (the “3.600% Senior Notes”). The net proceeds from the offering were used for the repayment of term loan indebtedness. |
(2) | On January 22, 2020, we entered into a senior unsecured credit agreement which provides for: (i) a Revolving Credit Facility in the initial amount of $2.7 billion, of which $700.0 million expires on January 22, 2023 and $2.0 billion expires on January 22, 2025 and (ii) a $300.0 million Term Loan Facility which expires on January 22, 2025, (collectively the “Credit Facility”). Interest and fees on the Credit Facility advances are based on our non-credit enhanced long-term senior unsecured debt rating as determined by Standard & Poor’s Ratings Service, Moody’s Investors Service and Fitch Ratings. In connection with our entry into the Credit Facility, we terminated our amended and restated five-year credit agreement dated November 8, 2017 and the credit agreement dated August 24, 2018. |
(3) | As of |
(4) | We have a borrowing capacity of up to $1.8 billion under our commercial paper program. The revolving credit facility supports commercial paper outstanding, if any. As of February 29, 2020, the outstanding commercial paper has maturities of 90 days or less. During the three months ended February 29, 2020, the interest rates on the commercial paper program ranged from 2.0% to 2.6%. |
Asset-Backed Securitization and Trade Accounts Receivable Sale Programs
As of October 1, 2018, approximately $734.2 million of accounts receivable sold under the foreign asset-backed securitization program was exchanged for the outstanding deferred purchase price receivable of $335.5 million. The remaining amount due to the financial institution of $398.7 million was subsequently settled for $25.2 million of cash and $373.5 million of trade accounts receivable sold to the financial institution. Prior to the amendment, any portion of the purchase price for the receivables not paid in cash upon the sale occurring was recorded as a deferred purchase price receivable, which was paid from available cash as payments on the receivables were collected. The foreign asset-backed securitization program contains a guarantee of payment by the special purpose entity, in an amount approximately equal to approximately the net cash proceeds under the program. No liability has been recorded for obligations under the guarantee as of May 31, 2019.
The North American asset-backed securitization program was terminated on October 9, 2018 and asFebruary 29, 2020.
On November 27, 2018, we entered into a new North American asset-backed securitization program. We continuously sell designated pools of trade accounts receivable under our new North American asset-backed securitization program to a special purpose entity, which in turn sells certain of the receivables to conduits administered by unaffiliated financial institutions on a monthly basis. There is no longer a deferred purchase price receivable for the North American asset-backed securitization program as the entire purchase price is paid in cash when the receivables are sold. Additionally, $204.4 million of receivables are pledged as collateral to the unaffiliated financial institution as of May 31, 2019.
February 29, 2020.
Maximum Amount of Net Cash Proceeds (in millions)(1) | Expiration Date | |||||||
North American | $ | 390.0 | November 22, 2021 | |||||
Foreign | $ | 400.0 | September 30, 2021 |
Maximum Amount of Net Cash Proceeds (in millions)(1) | Expiration Date | ||||
North American | $ | 390.0 | November 22, 2021 | ||
Foreign | $ | 400.0 | September 30, 2021 |
(1) | Maximum amount available at any one time. |
Program | Maximum Amount (in millions)(1) | Type of Facility | Expiration Date | |||||||||||
A | $ | 800.0 | Uncommitted | August 31, 2022(2) | ||||||||||
B | $ | 150.0 | Uncommitted | November 30, 2019(3) | ||||||||||
C | 800.0 | CNY | Uncommitted | June 30, 2020 | ||||||||||
D | $ | 100.0 | Uncommitted | May 4, 2023(4) | ||||||||||
E | $ | 50.0 | Uncommitted | August 25, 2019 | ||||||||||
F | $ | 150.0 | Uncommitted | January 25, 2020(5) | ||||||||||
G | $ | 50.0 | Uncommitted | February 23, 2023(2) | ||||||||||
H | $ | 100.0 | Uncommitted | August 10, 2019(6) | ||||||||||
I | $ | 100.0 | Uncommitted | July 21, 2019(7) | ||||||||||
J | $ | 740.0 | Uncommitted | February 28, 2020(8) | ||||||||||
K | $ | 110.0 | Uncommitted | April 11, 2020(9) |
Program | Maximum Amount (in millions)(1) | Type of Facility | Expiration Date | |||||
A | $ | 500.0 | Uncommitted | December 5, 2020(2) | ||||
B | $ | 150.0 | Uncommitted | November 30, 2020(3) | ||||
C | 800.0 | CNY | Uncommitted | June 30, 2020 | ||||
D | $ | 150.0 | Uncommitted | May 4, 2023(4) | ||||
E | $ | 50.0 | Uncommitted | August 25, 2020 | ||||
F | $ | 150.0 | Uncommitted | January 25, 2021(5) | ||||
G | $ | 50.0 | Uncommitted | February 23, 2023(6) | ||||
H | $ | 100.0 | Uncommitted | August 10, 2020(7) | ||||
I | $ | 100.0 | Uncommitted | July 21, 2020(8) | ||||
J | $ | 650.0 | Uncommitted | December 4, 2020(9) | ||||
K | $ | 110.0 | Uncommitted | April 11, 2020(10) | ||||
L | 100.0 | CHF | Uncommitted | December 5, 2020(2) |
(1) | Maximum amount available at any one time. |
(2) |
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(3) | The program will automatically extend for one year at each expiration date unless either party provides 10 days notice of termination. |
(4) | Any party may elect to terminate the agreement upon 30 days prior notice. |
(5) | The program will be automatically extended through January 25, 2023 unless either party provides 30 days notice of termination. |
(6) | Any party may elect to terminate the agreement upon 15 days prior notice. |
(7) | The program will be automatically extended through August 10, 2023 unless either party provides 30 days notice of termination. |
(8) | The program will be automatically extended through August 21, 2023 unless either party provides 30 days notice of termination. |
(9) | The program will be automatically extended each year through |
(10) | The program will be automatically extended each year through April 11, 2025 unless either party provides 30 days notice of termination. |
For fiscal year 2019, we anticipate
Nine months ended | ||||||||
May 31, 2019 | May 31, 2018 | |||||||
Net cash provided by (used in) operating activities | $ | 112,656 | $ | (1,376,305 | ) | |||
Net cash (used in) provided by investing activities | (704,095 | ) | 886,335 | |||||
Net cash provided by (used in) financing activities | 19,909 | (7,198 | ) | |||||
Effect of exchange rate changes on cash and cash equivalents | 7,667 | (15,259 | ) | |||||
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Net decrease in cash and cash equivalents | $ | (563,863 | ) | $ | (512,427 | ) | ||
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Six months ended | |||||||
February 29, 2020 | February 28, 2019 | ||||||
Net cash provided by operating activities | $ | 84,166 | $ | 107,765 | |||
Net cash used in investing activities | (555,349 | ) | (389,608 | ) | |||
Net cash provided by (used in) financing activities | 14,273 | (239,112 | ) | ||||
Effect of exchange rate changes on cash and cash equivalents | (9,688 | ) | 12,063 | ||||
Net decrease in cash and cash equivalents | $ | (466,598 | ) | $ | (508,892 | ) |
due to an increase in value added tax receivables.
equipment.
Payments due by period (in thousands) | |||||||||||||||||||
Total | Less than 1 year | 1-3 years | 3-5 years | After 5 years | |||||||||||||||
Pension and postretirement contributions and payments(1) | $ | 10,599 | $ | 10,599 | $ | — | $ | — | $ | — | |||||||||
Finance lease obligations(2) | $ | 114,275 | $ | 5,904 | $ | 12,972 | $ | 13,102 | $ | 82,297 |
(1) | Represents the estimated company contributions to the funded Switzerland plan during fiscal year 2020. These future payments are not recorded on the Condensed Consolidated Balance Sheets but will be recorded as incurred. Refer to Note 8 - Postretirement and other Employee Benefits for further discussion of the assumed postretirement benefit obligation. |
(2) | The amount payable after five years includes $75.1 million in purchase requirements at the end of the respective leases. |
performance and global economic conditions.
Period | Total Number of Shares Purchased(1) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Program | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (in thousands) | ||||||||||||
March 1, 2019 - March 31, 2019 | — | $ | — | — | $ | — | ||||||||||
April 1, 2019 - April 30, 2019 | 5,126 | $ | 31.14 | — | $ | — | ||||||||||
May 1, 2019 - May 31, 2019 | 19,196 | $ | 27.83 | — | $ | — | ||||||||||
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Total | 24,322 | $ | 28.53 | — |
Period | Total Number of Shares Purchased(1) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Program(2) | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (in thousands) | |||||||||
December 1, 2019 - December 31, 2019 | 262,232 | $ | 40.76 | 259,169 | $ | 493,047 | |||||||
January 1, 2020 - January 31, 2020 | 818,272 | $ | 41.97 | 734,757 | $ | 462,272 | |||||||
February 1, 2020 - February 29, 2020 | 773,984 | $ | 39.97 | 773,856 | $ | 431,341 | |||||||
Total | 1,854,488 | $ | 40.96 | 1,767,782 |
(1) | The purchases include amounts that are attributable to shares surrendered to us by employees to satisfy, in connection with the vesting of restricted stock unit awards and the exercise of stock appreciation rights, their tax withholding obligations. |
(2) | In September 2019, our Board of Directors authorized the repurchase of up to $600.0 million of our common stock as publicly announced in a press release on September 24, 2019 (the “2020 Share Repurchase Program”). |
Incorporated by Reference Herein | |||||||||||||
Exhibit No. | Description | Form | Exhibit | Filing Date/Period End Date | |||||||||
3.1 | 10-Q | 3.1 | 5/31/2017 | ||||||||||
3.2 | 10-Q | 3.2 | 5/31/2017 | ||||||||||
4.1 | Form of Certificate for Shares of the Registrant’s Common Stock. (P) | S-1 | 3/17/1993 | ||||||||||
4.2 | 8-K | 4.2 | 1/17/2008 | ||||||||||
4.3 | 8-K | 4.1 | 8/12/2009 | ||||||||||
4.4 | 8-K | 4.1 | 11/2/2010 | ||||||||||
4.5 | 8-K | 4.1 | 8/6/2012 | ||||||||||
4.6 | 8-K | 4.1 | 1/17/2018 | ||||||||||
4.7 | 8-K | 4.1 | 1/15/2020 | ||||||||||
4.8 | 8-K | 4.3 | 8/12/2009 | ||||||||||
4.9 | 8-K | 4.3 | 11/2/2010 | ||||||||||
4.10 | 8-K | 4.3 | 8/6/2012 | ||||||||||
4.11 | 8-K | 4.1 | 1/17/2018 | ||||||||||
4.12 | 8-K | 4.1 | 1/15/2020 | ||||||||||
10.1 | 8-K | 10.1 | 1/28/2020 | ||||||||||
31.1* | |||||||||||||
31.2* | |||||||||||||
32.1* | |||||||||||||
32.2* | |||||||||||||
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101 | The following financial information from Jabil’s Quarterly Report on Form 10-Q for the quarterly period ended February 29, 2020, formatted in Inline XBRL: (i) Condensed Consolidated Balance Sheets as of February 29, 2020 and August 31, 2019, (ii) Condensed Consolidated Statements of Operations for the three months and six months ended February 29, 2020 and February 28, 2019, (iii) Condensed Consolidated Statements of Comprehensive Income for the three months and six months ended February 29, 2020 and February 28, 2019, (iv) Condensed Consolidated Statements of Stockholders’ Equity for the three months and six months ended February 29, 2020 and February 28, 2019, (v) Condensed Consolidated Statements of Cash Flows for the six months ended February 29, 2020 and February 28, 2019 and (vi) the Notes to Condensed Consolidated Financial Statements. | ||||||||||||
104 | Cover Page Interactive Data File - Embedded within the inline XBRL Document | ||||||||||||
* | Filed or furnished herewith |
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JABIL INC. Registrant | ||||||
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Date: | By: | /s/ MARK T. MONDELLO | ||||
Mark T. Mondello Chief Executive Officer | ||||||
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Date: | By: | /s/ MICHAEL DASTOOR | ||||
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Michael Dastoor Chief Financial Officer |
40