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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549 
FORM 10-Q
(Mark One)
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended November 30, 2022
or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                     
Commission File Number: 001-14063
jbl-20221130_g1.jpg
JABIL INC.
(Exact name of registrant as specified in its charter)
Delaware   38-1886260
(State or other jurisdiction of
incorporation or organization)		   (I.R.S. Employer
Identification No.)
10800 Roosevelt Boulevard North, St. Petersburg, Florida 33716
(Address of principal executive offices) (Zip Code)
(727) 577-9749
(Registrant’s telephone number, including area code) 
Securities registered pursuant to Section 12(b) of the Act:
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
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☒ Accelerated filer ☐
Non-accelerated filer
☐  
 Smaller reporting company ☐
Emerging growth company ☐
1

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒
As of December 30, 2022, there were 133,275,064 shares of the registrant’s Common Stock outstanding.
2
JABIL INC. AND SUBSIDIARIES INDEX
Item 1.
Item 2.
Item 3.
Item 4.
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.


PART I—FINANCIAL INFORMATION
Item 1. Financial Statements
JABIL INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions, except for share data)
November 30, 2022
(Unaudited)		 August 31, 2022
ASSETS
Current assets:
Cash and cash equivalents $ 1,217  $ 1,478 
Accounts receivable, net of allowance for credit losses 4,498  3,995 
Contract assets 1,282  1,196 
Inventories, net 6,429  6,128 
Prepaid expenses and other current assets 1,252  1,111 
Total current assets 14,678  13,908 
Property, plant and equipment, net of accumulated depreciation of $5,812 as of November 30, 2022 and $5,624 as of August 31, 2022
 3,928  3,954 
Operating lease right-of-use asset 524  500 
Goodwill 708  704 
Intangible assets, net of accumulated amortization of $480 as of November 30, 2022 and $471 as of August 31, 2022
 150  158 
Deferred income taxes 208  199 
Other assets 310  294 
Total assets $ 20,506  $ 19,717 
LIABILITIES AND EQUITY
Current liabilities:
Current installments of notes payable and long-term debt $ 300  $ 300 
Accounts payable 8,042  8,006 
Accrued expenses 5,901  5,272 
Current operating lease liabilities 129  119 
Total current liabilities 14,372  13,697 
Notes payable and long-term debt, less current installments 2,576  2,575 
Other liabilities 292  272 
Non-current operating lease liabilities 421  417 
Income tax liabilities 196  182 
Deferred income taxes 119  122 
Total liabilities 17,976  17,265 
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; 272,753,393 and 270,891,715 shares issued and 134,231,300 and 135,493,980 shares outstanding as of November 30, 2022 and August 31, 2022, respectively
 —  — 
Additional paid-in capital 2,696  2,655 
Retained earnings 3,849  3,638 
Accumulated other comprehensive loss (22) (42)
Treasury stock at cost, 138,522,093 and 135,397,735 shares as of November 30, 2022 and August 31, 2022, respectively
 (3,994) (3,800)
Total Jabil Inc. stockholders’ equity 2,529  2,451 
Noncontrolling interests 1  1 
Total equity 2,530  2,452 
Total liabilities and equity $ 20,506  $ 19,717 
See accompanying notes to Condensed Consolidated Financial Statements.
1
JABIL INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except for per share data)
(Unaudited)
  Three months ended
  November 30, 2022 November 30, 2021
Net revenue $ 9,635  $ 8,567 
Cost of revenue 8,892  7,892 
Gross profit 743  675 
Operating expenses:
Selling, general and administrative 319  308 
Research and development 9  9 
Amortization of intangibles 8  8 
Restructuring, severance and related charges 45  — 
Operating income 362  350 
Other expense 15  1 
Interest income (13) (1)
Interest expense 61  33 
Income before income tax 299  317 
Income tax expense 76  76 
Net income 223  241 
Net income attributable to noncontrolling interests, net of tax —  — 
Net income attributable to Jabil Inc. $ 223  $ 241 
Earnings per share attributable to the stockholders of Jabil Inc.:
Basic $ 1.65  $ 1.68 
Diluted $ 1.61  $ 1.63 
Weighted average shares outstanding:
Basic 134.8  144.1 
Diluted 138.0  147.7 
See accompanying notes to Condensed Consolidated Financial Statements.
2
JABIL INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in millions)
(Unaudited)
  Three months ended
  November 30, 2022 November 30, 2021
Net income $ 223  $ 241 
Other comprehensive income (loss):
Change in foreign currency translation 4  (27)
Change in derivative instruments:
Change in fair value of derivatives (25) 6 
Adjustment for net losses realized and included in net income 43  2 
Total change in derivative instruments 18  8 
Actuarial loss (3) (5)
Prior service credit 1  1 
Total other comprehensive income (loss) 20  (23)
Comprehensive income $ 243  $ 218 
Comprehensive income attributable to noncontrolling interests —  — 
Comprehensive income attributable to Jabil Inc. $ 243  $ 218 
See accompanying notes to Condensed Consolidated Financial Statements.
3
JABIL INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(in millions)
(Unaudited)
Three months ended
November 30, 2022 November 30, 2021
Total stockholders' equity, beginning balances
 $ 2,452  $ 2,137 
Common stock:
 —  — 
Additional paid-in capital:
Beginning balances
 2,655  2,533 
Recognition of stock-based compensation
 41  34 
Ending balances
 2,696  2,567 
Retained earnings:
Beginning balances
 3,638  2,688 
Declared dividends
 (12) (12)
Net income attributable to Jabil Inc. 223  241 
Ending balances
 3,849  2,917 
Accumulated other comprehensive loss:
Beginning balances
 (42) (25)
Other comprehensive income (loss) 20  (23)
Ending balances
 (22) (48)
Treasury stock:
Beginning balances
 (3,800) (3,060)
Purchases of treasury stock under employee stock plans
 (33) (43)
Treasury shares purchased
 (161) (127)
Ending balances
 (3,994) (3,230)
Noncontrolling interests:
Beginning balances
 1  1 
Net income attributable to noncontrolling interests
 —  — 
Ending balances
 1  1 
Total stockholders' equity, ending balances
 $ 2,530  $ 2,207 

See accompanying notes to Condensed Consolidated Financial Statements.
4
JABIL INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
(Unaudited)
 
  Three months ended
  November 30, 2022 November 30, 2021
Cash flows provided by (used in) operating activities:
Net income $ 223  $ 241 
Depreciation, amortization, and other, net 263  269 
Change in operating assets and liabilities, exclusive of net assets acquired (320) (556)
Net cash provided by (used in) operating activities 166  (46)
Cash flows used in investing activities:
Acquisition of property, plant and equipment (314) (281)
Proceeds and advances from sale of property, plant and equipment 150  208 
Other, net (12) — 
Net cash used in investing activities (176) (73)
Cash flows used in financing activities:
Borrowings under debt agreements 1,026  550 
Payments toward debt agreements (1,061) (574)
Payments to acquire treasury stock (161) (127)
Dividends paid to stockholders (12) (14)
Treasury stock minimum tax withholding related to vesting of restricted stock (33) (43)
Net cash used in financing activities (241) (208)
Effect of exchange rate changes on cash and cash equivalents (10) (11)
Net decrease in cash and cash equivalents (261) (338)
Cash and cash equivalents at beginning of period 1,478  1,567 
Cash and cash equivalents at end of period $ 1,217  $ 1,229 
See accompanying notes to Condensed Consolidated Financial Statements.
5
JABIL INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Basis of Presentation
The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) necessary to present fairly the information set forth therein have been included. The accompanying unaudited Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and footnotes included in the Annual Report on Form 10-K of Jabil Inc. (the “Company”) for the fiscal year ended August 31, 2022. Results for the three months ended November 30, 2022 are not necessarily an indication of the results that may be expected for the full fiscal year ending August 31, 2023.
2. Trade Accounts Receivable Sale Programs
The Company regularly sells designated pools of high credit quality trade accounts receivable, at a discount, under uncommitted trade accounts receivable sale programs to unaffiliated financial institutions without recourse. As these accounts receivable are sold without recourse, the Company does not retain the associated risks following the transfer of such accounts receivable to the respective financial institutions.
As of November 30, 2022, the Company may elect to sell receivables and the unaffiliated financial institutions may elect to purchase specific accounts receivable at any one time up to a: (i) maximum aggregate amount available of $2.0 billion under eight trade accounts receivable sale programs, (ii) maximum amount available of 400 million CNY under one trade accounts receivable sale program and (iii) maximum amount available of 100 million CHF under one trade accounts receivable sale program. The trade accounts receivable sale programs expire on various dates through 2025.
The Company continues servicing the receivables sold and in exchange receives a servicing fee under each of the trade accounts receivable sale programs. Servicing fees related to the trade accounts receivable sale programs recognized during the three months ended November 30, 2022 and 2021 were not material. The Company does not record a servicing asset or liability on the Condensed Consolidated Balance Sheets as the Company estimates that the fee it receives to service these receivables approximates the fair market compensation to provide the servicing activities.
In connection with the trade accounts receivable sale programs, the Company recognized the following (in millions):
  Three months ended
  November 30, 2022 November 30, 2021
Trade accounts receivable sold(1)
 $ 3,528  $ 1,968 
Cash proceeds received $ 3,518  $ 1,967 
Pre-tax losses on sale of receivables(2)
 $ 10  $ 1 
(1)Receivables sold are excluded from accounts receivable on the Condensed Consolidated Balance Sheets and are reflected as cash provided by operating activities on the Condensed Consolidated Statements of Cash Flows.
(2)Recorded to other expense within the Condensed Consolidated Statement of Operations.
3. Inventories
Inventories consist of the following (in millions):
November 30, 2022 August 31, 2022
Raw materials $ 5,446  $ 4,918 
Work in process 546  687 
Finished goods 517  605 
Reserve for excess and obsolete inventory (80) (82)
Inventories, net $ 6,429  $ 6,128 
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4. Leases
During fiscal year 2023, the Company entered into new operating and finance leases. The future minimum lease payments under these new leases as of November 30, 2022 were as follows (in millions):
Payments due by period
Total Less than 1
year		 1-3 years 3-5 years After 5 years
Operating lease obligations(1)
 $ 57  $ 15  $ 23  $ 14  $ 5 
Finance lease obligations(1)
 $ 71  $ 45  $ 24  $ 2  $ — 
(1)Excludes $64 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.
5. Notes Payable and Long-Term Debt
Notes payable and long-term debt outstanding as of November 30, 2022 and August 31, 2022 are summarized below (in millions): 
Maturity Date November 30, 2022 August 31, 2022
4.900% Senior Notes
 Jul 14, 2023 $ 300  $ 300 
3.950% Senior Notes
 Jan 12, 2028 497  497 
3.600% Senior Notes
 Jan 15, 2030 496  496 
3.000% Senior Notes
 Jan 15, 2031 592  592 
1.700% Senior Notes
 Apr 15, 2026 497  497 
4.250% Senior Notes
 May 15, 2027 494  493 
Borrowings under credit facilities(1)
 Jan 22, 2024 and Jan 22, 2026 —  — 
Borrowings under loans Jul 31, 2026 —  — 
Total notes payable and long-term debt 2,876  2,875 
Less current installments of notes payable and long-term debt
 300  300 
Notes payable and long-term debt, less current installments
 $ 2,576  $ 2,575 
(1)As of November 30, 2022, the Company has $3.8 billion in available unused borrowing capacity under its revolving credit facilities. The senior unsecured credit agreement dated as of January 22, 2020 and amended on April 28, 2021 (the “Credit Facility”) acts as the back-up facility for commercial paper outstanding, if any. The Company has a borrowing capacity of up to $3.2 billion under its commercial paper program.
Debt Covenants
Borrowings under the Company’s debt agreements are subject to various covenants that limit the Company’s ability to: incur additional indebtedness, sell assets, effect mergers and certain transactions, and effect certain transactions with subsidiaries and affiliates. In addition, the revolving credit facilities and the 4.900% Senior Notes contain debt leverage and interest coverage covenants. The Company is also subject to certain covenants requiring the Company to offer to repurchase the 4.900%, 3.950%, 3.600%, 3.000%, 1.700% or 4.250% Senior Notes upon a change of control. As of November 30, 2022 and August 31, 2022, the Company was in compliance with its debt covenants.
Fair Value
Refer to Note 16 – “Fair Value Measurements” for the estimated fair values of the Company’s notes payable and long-term debt.
6. Asset-Backed Securitization Program
Certain Jabil entities participating in the global asset-backed securitization program continuously sell designated pools of trade accounts receivable to a special purpose entity, which in turn sells certain of the receivables at a discount to conduits administered by an unaffiliated financial institution on a monthly basis. In addition, a foreign entity participating in the global
7
asset-backed securitization program sells certain receivables at a discount to conduits administered by an unaffiliated financial institution on a daily basis.
The Company continues servicing the receivables sold and in exchange receives a servicing fee under the global asset-backed securitization program. Servicing fees related to the global asset-backed securitization program recognized during the three months ended November 30, 2022 and 2021 were not material. The Company does not record a servicing asset or liability on the Condensed Consolidated Balance Sheets as the Company estimates that the fee it receives to service these receivables approximates the fair market compensation to provide the servicing activities.
The special purpose entity in the global asset-backed securitization program is a wholly-owned subsidiary of the Company and is included in the Company’s Condensed Consolidated Financial Statements. Certain unsold receivables covering up to the maximum amount of net cash proceeds available under the domestic, or U.S., portion of the global asset-backed securitization program are pledged as collateral to the unaffiliated financial institution as of November 30, 2022.
The global asset-backed securitization program expires on November 25, 2024 and the maximum amount of net cash proceeds available at any one time is $600 million. As of November 30, 2022, the Company had no available liquidity under its global asset-backed securitization program.
In connection with the asset-backed securitization programs, the Company recognized the following (in millions):
Three months ended
November 30, 2022 November 30, 2021
Trade accounts receivable sold(1)
 $ 1,066  $ 1,032 
Cash proceeds received(2)
 $ 1,058  $ 1,030 
Pre-tax losses on sale of receivables(3)
 $ 8  $ 2 
(1)Receivables sold are excluded from accounts receivable on the Condensed Consolidated Balance Sheets and are reflected as cash provided by operating activities on the Condensed Consolidated Statements of Cash Flows.
(2)The amounts primarily represent proceeds from collections reinvested in revolving-period transfers.
(3)Recorded to other expense within the Condensed Consolidated Statements of Operations.
The global asset-backed securitization program requires compliance with several covenants including compliance with the interest ratio and debt to EBITDA ratio of the Credit Facility. As of November 30, 2022 and August 31, 2022, the Company was in compliance with all covenants under the global asset-backed securitization program.

7. Accrued Expenses
Accrued expenses consist of the following (in millions):
November 30, 2022 August 31, 2022
Inventory deposits $ 1,690  $ 1,586 
Contract liabilities(1)
 1,070  796 
Accrued compensation and employee benefits 798  806 
Other accrued expenses 2,343  2,084 
Accrued expenses $ 5,901  $ 5,272 
(1)Revenue recognized during the three months ended November 30, 2022 and 2021 that was included in the contract liability balance as of August 31, 2022 and 2021 was $139 million and $98 million, respectively.
8. Postretirement and Other Employee Benefits
Net Periodic Benefit Cost
The following table provides information about the net periodic benefit cost for all plans for the three months ended November 30, 2022 and 2021 (in millions):

8
  Three months ended
  November 30, 2022 November 30, 2021
Service cost(1)
 $ 4  $ 6 
Interest cost(2)
 3  1 
Expected long-term return on plan assets(2)
 (5) (4)
Recognized actuarial gain(2)
 (2) (3)
Amortization of actuarial gain(2)(3)
 (1) (2)
Amortization of prior service cost(2)
 1  1 
Net periodic benefit cost $ —  $ (1)
(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.
(3)Actuarial gains and losses are amortized using a corridor approach. The gain/loss corridor is equal to 10 percent of the greater of the projected benefit obligation and the fair value of plan assets. Gains and losses in excess of the corridor are generally amortized over the average future working lifetime of the plan participants.
9. 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 $1.1 billion and $1.4 billion as of November 30, 2022 and August 31, 2022, respectively. The related forward foreign exchange contracts have been designated as hedging instruments and are accounted for as cash flow hedges. The forward foreign exchange contract transactions will effectively lock in the value of anticipated foreign currency denominated revenues and expenses against foreign currency fluctuations. The anticipated foreign currency denominated revenues and expenses being hedged are expected to occur between December 1, 2022 and November 30, 2023.
In addition to derivatives that are designated as hedging instruments and qualify for hedge accounting, the Company also enters into forward contracts to economically hedge transactional exposure associated with commitments arising from trade accounts receivable, trade accounts payable, fixed purchase obligations and intercompany transactions denominated in a currency other than the functional currency of the respective operating entity. The aggregate notional amount of these outstanding contracts as of November 30, 2022 and August 31, 2022, was $3.5 billion and $3.4 billion, respectively.
The gains and losses recognized in earnings due to amounts excluded from effectiveness testing were not material for all periods presented and are included as components of net revenue, cost of revenue and selling, general and administrative expense, which are the same line items in which the hedged items are recorded.
In addition, the Company has entered into forward foreign currency exchange contracts to hedge a portion of its net investment in foreign currency denominated operations, which are designated as net investment hedges. The net investment hedges have an aggregate notional amount outstanding of $0.1 billion and $0.0 billion as of November 30, 2022 and August 31, 2022, respectively, and are expected to mature in August 2023. The effective portion of the gain or loss on net investment hedges is reported in OCI to offset the change in the carrying value of the net investment being hedged until the complete or substantially complete liquidation of the hedged foreign operation. The excluded components for the net investment hedges are not material and are recognized in interest expense.
Refer to Note 16 – “Fair Value Measurements” for the fair values and classification of the Company’s derivative instruments.
The following table presents the net (losses) gains from forward contracts recorded in the Condensed Consolidated Statements of Operations for the periods indicated (in millions):
9
Derivatives Not Designated as Hedging Instruments Under ASC 815 Location of (Loss) Gain on Derivatives Recognized in Net Income Amount of (Loss) Gain Recognized in Net Income on Derivatives
Three months ended
November 30, 2022 November 30, 2021
Forward foreign exchange contracts(1)
 Cost of revenue $ (46) $ 38 
(1)For the three months ended November 30, 2022, the Company recognized $49 million of foreign currency gains in cost of revenue, which are offset by the losses from the forward foreign exchange contracts. For the three months ended November 30, 2021, the Company recognized $27 million of foreign currency losses in cost of revenue, which are offset by the gains from the forward foreign exchange contracts.
Interest Rate Risk Management
The Company periodically enters into interest rate swaps to manage interest rate risk associated with the Company’s borrowings or anticipated debt issuances.
Cash Flow Hedges
The following table presents the interest rate swaps outstanding as of November 30, 2022, which have been designated as hedging instruments and are accounted for as cash flow hedges (in millions):
Interest Rate Swap Summary Hedged Interest Rate Payments Aggregate Notional Amount Effective Date Expiration Date
Forward Interest Rate Swap
Anticipated Debt Issuance Fixed $ 150  May 24, 2021 July 31, 2024
(1)(2)
Anticipated Debt Issuance Fixed $ 100  August 8, 2022 July 31, 2024
(1)(2)
(1)The contracts will be settled with the respective counterparties on a net basis at the expiration date for the forward interest rate swap.
(2)If the anticipated debt issuance occurs before July 31, 2024, the contracts will be terminated simultaneously with the debt issuance.
10. Accumulated Other Comprehensive Income
The following table sets forth the changes in AOCI, net of tax, by component for the three months ended November 30, 2022 (in millions):
Foreign
Currency
Translation
Adjustment		 Derivative
Instruments		 Actuarial
Gain (Loss)		 Prior
Service (Cost) Credit		 Total
Balance as of August 31, 2022
 $ (88) $ (3) $ 65  $ (16) $ (42)
Other comprehensive income (loss) before reclassifications 4  (25) —  —  (21)
Amounts reclassified from AOCI —  43  (3) 1  41 
Other comprehensive income (loss)(1)
 4  18  (3) 1  20 
Balance as of November 30, 2022
 $ (84) $ 15  $ 62  $ (15) $ (22)
(1)Amounts are net of tax, which are immaterial.

The following table sets forth the amounts reclassified from AOCI into the Condensed Consolidated Statements of Operations, and the associated financial statement line item, net of tax, for the periods indicated (in millions):
10
  Three months ended
Comprehensive Income Components Financial Statement Line Item November 30, 2022 November 30, 2021
Realized losses on derivative instruments:(1)
Foreign exchange contracts Cost of revenue $ 43  $ 1 
Interest rate contracts Interest expense —  1 
Actuarial gain
(2)
 (3) (5)
Prior service cost
(2)
 1  1 
Total amounts reclassified from AOCI(3)
 $ 41  $ (2)
(1)The Company expects to reclassify $16 million into earnings during the next twelve months, which will primarily be classified as a component of cost of revenue.
(2)Amounts are included in the computation of net periodic benefit cost. Refer to Note 8 – “Postretirement and Other Employee Benefits” for additional information.
(3)Amounts are net of tax, which are immaterial for the three months ended November 30, 2022 and 2021.
11. Stockholders’ Equity
The Company recognized stock-based compensation expense within selling, general and administrative expense as follows (in millions):
  Three months ended
  November 30, 2022 November 30, 2021
Restricted stock units
 $ 38  $ 32 
Employee stock purchase plan 4  3 
Total $ 42  $ 35 
As of November 30, 2022, the shares available to be issued under the 2021 Equity Incentive Plan were 8,394,608.
Restricted Stock Units
Certain key employees have been granted time-based, performance-based and market-based restricted stock unit awards (“restricted stock units”). The time-based restricted stock units generally vest on a graded vesting schedule over three years. The performance-based restricted stock units generally vest on a cliff vesting schedule over three years and up to a maximum of 150%, depending on the specified performance condition and the level of achievement obtained. The performance-based restricted stock units have a vesting condition that is based upon the Company’s cumulative adjusted core earnings per share during the performance period. The market-based restricted stock units generally vest on a cliff vesting schedule over three years and up to a maximum of 200%, depending on the specified performance condition and the level of achievement obtained. The market-based restricted stock units have a vesting condition that is tied to the Company’s total shareholder return based on the Company’s stock performance in relation to the companies in the Standard and Poor’s (S&P) Super Composite Technology Hardware and Equipment Index excluding the Company. During the three months ended November 30, 2022 and 2021, the Company awarded approximately 0.9 million and 0.7 million time-based restricted stock units, respectively, 0.2 million and 0.2 million performance-based restricted stock units, respectively, and 0.2 million and 0.2 million market-based restricted stock units, respectively.
The following represents the stock-based compensation information as of the period indicated (in millions):
  November 30, 2022
Unrecognized stock-based compensation expense—restricted stock units $ 79 
Remaining weighted-average period for restricted stock units expense 1.5 years
Common Stock Outstanding
11
The following represents the common stock outstanding for the periods indicated:
Three months ended
November 30, 2022 November 30, 2021
Common stock outstanding:
Beginning balances
 135,493,980  144,496,077 
Vesting of restricted stock
 1,861,678  2,425,472 
Purchases of treasury stock under employee stock plans
 (523,407) (690,555)
Treasury shares purchased(1)(2)
 (2,600,951) (2,064,985)
Ending balances
 134,231,300  144,166,009 
(1)In July 2021, the Board of Directors approved an authorization for the repurchase of up to $1.0 billion of the Company’s common stock (the “2022 Share Repurchase Program”). As of November 30, 2022, 15.0 million shares had been repurchased for $898 million and $102 million remains available under the 2022 Share Repurchase Program.
(2)In September 2022, the Board of Directors approved an authorization for the repurchase of up to $1.0 billion of the Company’s common stock (the “2023 Share Repurchase Program”). As of November 30, 2022, no shares had been repurchased under the 2023 Share Repurchase Program.
12. Concentration of Risk and Segment Data
Concentration of Risk
Sales of the Company’s products are concentrated among specific customers. During the three months ended November 30, 2022, the Company’s five largest customers accounted for approximately 47% of its net revenue and 75 customers accounted for approximately 90% of its net revenue. Sales to these customers were reported in the Electronics Manufacturing Services (“EMS”) and Diversified Manufacturing Services (“DMS”) operating segments.
The Company procures components from a broad group of suppliers. Some of the products manufactured by the Company require one or more components that are available from only a single source.
Segment Data
Net revenue for the operating segments is attributed to the segment in which the service is performed. An operating segment’s performance is evaluated based on its pre-tax operating contribution, or segment income. Segment income is defined as net revenue less cost of revenue, segment selling, general and administrative expenses, segment research and development expenses and an allocation of corporate manufacturing expenses and selling, general and administrative expenses. Certain items are excluded from the calculation of segment income. Transactions between operating segments are generally recorded at amounts that approximate those at which we would transact with third parties.
The following table sets forth operating segment information (in millions):
  Three months ended
  November 30, 2022 November 30, 2021
Segment income and reconciliation of income before income tax
EMS $ 198  $ 147 
DMS 263  253 
Total segment income $ 461  $ 400 
Reconciling items:
Amortization of intangibles (8) (8)
Stock-based compensation expense and related charges (42) (35)
Restructuring, severance and related charges (45) — 
Other expense (net of periodic benefit cost) (19) (8)
Interest income 13  1 
Interest expense (61) (33)
Income before income tax $ 299  $ 317 
 
The following table presents the Company’s revenues disaggregated by segment (in millions):
12
Three months ended
November 30, 2022 November 30, 2021
EMS DMS Total EMS DMS Total
Timing of transfer
Point in time $ 1,538  $ 2,280  $ 3,818  $ 1,407  $ 2,370  $ 3,777 
Over time 3,008  2,809  5,817  2,451  2,339  4,790 
Total $ 4,546  $ 5,089  $ 9,635  $ 3,858  $ 4,709  $ 8,567 


The Company operates in more than 30 countries worldwide. Sales to unaffiliated customers are based on the Company location that maintains the customer relationship and transacts the external sale. The following table sets forth, for the periods indicated, foreign source revenue expressed as a percentage of net revenue:
Three months ended
  November 30, 2022 November 30, 2021
Foreign source revenue 85.7  % 84.8  %
13. Restructuring, Severance and Related Charges
Following is a summary of the Company’s restructuring, severance and related charges (in millions):
  Three months ended
 
November 30, 2022(1)
 November 30, 2021
Employee severance and benefit costs $ 40  $ 1 
Lease costs —  (1)
Asset write-off costs 1  — 
Other costs 4  — 
Total restructuring, severance and related charges(2)
 $ 45  $ — 
(1)Primarily relates to headcount reduction to further optimize the Company’s business activities and includes $4 million recorded in the EMS segment, $33 million recorded in the DMS segment and $8 million of non-allocated charges for the three months ended November 30, 2022. Except for asset write-off costs, all restructuring, severance and related charges are cash costs.
(2)The restructuring liability is $54 million as of November 30, 2022, which primarily relates to employee severance and benefit costs incurred in fiscal year 2022 and the three months ended November 30, 2022. We expect the majority of the severance to be paid during fiscal year 2023.
14. Income Taxes
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
November 30, 2022 November 30, 2021
U.S. federal statutory income tax rate 21.0  % 21.0  %
Effective income tax rate 25.6  % 23.9  %
The effective income tax rate differed for the three months ended November 30, 2022, compared to the three months ended November 30, 2021, primarily due to increased losses in tax jurisdictions with minimal related income tax benefit, driven in part by restructuring charges, for the three months ended November 30, 2022.
The effective income tax rate differed from the U.S. federal statutory income tax rate of 21.0% during the three months ended November 30, 2022 and 2021, primarily due to: (i) losses in tax jurisdictions with existing valuation allowances and (ii) tax incentives granted to sites in China, Malaysia, Singapore and Vietnam.
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15. Earnings Per Share and Dividends
Earnings Per Share
The Company calculates its basic earnings per share by dividing net income attributable to the Company by the weighted average number of common shares outstanding during the period. The Company’s diluted earnings per share is calculated in a similar manner, but includes the effect of dilutive securities. The difference between the weighted average number of basic shares outstanding and the weighted average number of diluted shares outstanding is primarily due to dilutive unvested restricted stock units.
Potential shares of common stock are excluded from the computation 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 end of the reporting period represents the end of the performance period. All potential shares of common stock are antidilutive in periods of net loss. Potential shares of common stock not included in the computation of earnings per share because their effect would have been antidilutive or because the performance criterion was not met were as follows (in thousands):
  Three months ended
  November 30, 2022 November 30, 2021
Restricted stock units 365.9  575.8 
Dividends
The following table sets forth cash dividends declared by the Company to common stockholders during the three months ended November 30, 2022 and 2021 (in millions, except for per share data):
Dividend
Declaration Date		 Dividend
per Share		 Total of Cash
Dividends
Declared		 Date of Record for
Dividend Payment		 Dividend Cash
Payment Date
Fiscal Year 2023: October 20, 2022 $ 0.08  $ 12  November 15, 2022 December 2, 2022
Fiscal Year 2022: October 21, 2021 $ 0.08  $ 12  November 15, 2021 December 1, 2021
16. Fair Value Measurements
Fair Value Measurements on a Recurring Basis
The following table presents the fair value of the Company's financial assets and liabilities measured at fair value by hierarchy level on a recurring basis as of the periods indicated (in millions):    
Fair Value Hierarchy November 30, 2022 August 31, 2022
Assets:
Cash and cash equivalents:
Cash equivalents Level 1
(1)
 $ 8  $ 14 
Prepaid expenses and other current assets:
Short-term investments Level 1 22  16 
Forward foreign exchange contracts:
Derivatives designated as hedging instruments (Note 9)
 Level 2
(2)
 12  3 
Derivatives not designated as hedging instruments (Note 9)
 Level 2
(2)
 29  13 
Other assets:
Forward interest rate swap:
Derivatives designated as hedging instruments (Note 9)
 Level 2
(3)
 19  13 
Liabilities:
Accrued expenses:
Forward foreign exchange contracts:
Derivatives designated as hedging instruments (Note 9)
 Level 2
(2)
 $ 31  $ 32 
Derivatives not designated as hedging instruments (Note 9)
 Level 2
(2)
 60  76 
(1)Consist of investments that are readily convertible to cash with original maturities of 90 days or less.
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(2)The Company’s forward foreign exchange contracts, including cash flow hedges and net investment hedges are measured on a recurring basis at fair value, based on foreign currency spot rates and forward rates quoted by banks or foreign currency dealers.
(3)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.
Fair Value of Financial Instruments
The carrying amounts of cash and cash equivalents, trade accounts receivable, prepaid expenses and other current assets, accounts payable and accrued expenses approximate fair value because of the short-term nature of these financial instruments. The carrying amounts of borrowings under credit facilities and under loans approximates fair value as interest rates on these instruments approximates current market rates.
Notes payable and long-term debt is carried at amortized cost; however, the Company estimates the fair values of notes payable and long-term debt for disclosure purposes. The following table presents the carrying amounts and fair values of the Company's notes payable and long-term debt, by hierarchy level as of the periods indicated (in millions):
November 30, 2022 August 31, 2022
Fair Value Hierarchy Carrying Amount Fair Value Carrying Amount Fair Value
Notes payable and long-term debt: (Note 5)
4.900% Senior Notes
Level 3
(1)
 $ 300  $ 299  $ 300  $ 300 
3.950% Senior Notes
Level 2
(2)
 $ 497  $ 471  $ 497  $ 471 
3.600% Senior Notes
 Level 2
(2)
 $ 496  $ 448  $ 496  $ 440 
3.000% Senior Notes
 Level 2
(2)
 $ 592  $ 498  $ 592  $ 500 
1.700% Senior Notes
 Level 2
(2)
 $ 497  $ 445  $ 497  $ 446 
4.250% Senior Notes
 Level 2
(2)
 $ 494  $ 479  $ 493  $ 483 
(1)This fair value estimate is based on the Company’s indicative borrowing cost derived from discounted cash flows.
(2)The fair value estimates are based upon observable market data.
17. Commitments and Contingencies