JABIL INC
For the period ended Feb 29, 2024. Filed Apr 5, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Feb 29, 2024 · Filed Apr 5, 2024
JBL$239.09+1.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2023-11-30; filed 2024-01-09.
0001193125-24-004852
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-02-29; filed 2024-04-05.
0001628280-24-014951
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 104 previous paragraphs and 117 current paragraphs.
71 unchanged; 32 reworded; 11 added; 0 removed; 1 previous and 3 current paragraphs rearranged.
Tables are not compared: 19 previous and 20 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (11)
Current report
On December 29, 2023 (the “Closing Date”), we completed the sale of our product manufacturing business in Chengdu, including its supporting component manufacturing in Wuxi (the “Business”) for pre-tax cash proceeds of approximately $2.2 billion, subject to certain post-closing adjustments. The sale of the Business represented the divestiture of our mobility business.
Current report
Selling, general and administrative expenses increased during the six months ended February 29, 2024, compared to the six months ended February 28, 2023. The increase is primarily due to a $13 million increase in salary and salary related expenses.
Current report
In the second quarter of fiscal year 2024, we completed the divestiture of our mobility business. As a result of the transaction, we recorded a pre-tax gain of $944 million, subject to certain post-closing adjustments that are expected to be finalized in the third quarter of fiscal year 2024.
Current report
Acquisition and Divestiture Related Charges
Current report
Interest expense, net decreased during the three months and six months ended February 29, 2024, compared to the three months and six months ended February 28, 2023, primarily due to lower borrowings on our credit facilities and commercial paper program.
Current report
(3)We completed the divestiture of our mobility business and recorded a pre-tax gain of $944 million, subject to certain post-closing adjustments that are expected to be finalized in the third quarter of fiscal year 2024. We incurred transaction and disposal costs in connection with the sale of approximately $46 million and $61 million during the three months and six months ended February 29, 2024, respectively.
Current report
On December 29, 2023, the Closing Date, we completed the sale. As a result of the transaction, we derecognized net assets of approximately $1.2 billion, and recorded a pre-tax gain of $944 million, subject to post-closing adjustments, subject to certain post-closing adjustments that are expected to be finalized in the third quarter of fiscal year 2024. In addition, we agreed to indemnify the Purchaser from certain liabilities that may arise post-close that relate to periods prior to the Closing Date. We incurred transaction and disposal costs in connection with the sale of approximately $46 million and $61 million during the three months and six months ended February 29, 2024, respectively, which are included in continuing operations in the Condensed Consolidated Statement of Operations.
Current report
We perform a goodwill impairment analysis on an annual basis and whenever events or changes in circumstances indicate that the carrying value may not be recoverable. In connection with the preparation of the Company’s financial statements for the quarter ended February 29, 2024, we completed an impairment analysis for goodwill recorded within the reporting unit impacted by the divestiture of the Business. The quantitative assessment was used, and we determined that it is more likely than not that the fair value of the impacted reporting unit is in excess of the carrying value and that no impairment existed subsequent to the closing of the Business. We allocated goodwill to the disposal group based on the relative fair value of the Business as compared to the impacted reporting unit.
Current report
In the second quarter of fiscal year 2024 and in connection with the divestiture of the Business, we made a strategic decision that the indefinite-lived (“Green Point”) trade name of $51 million acquired during the acquisition of Green Point should no longer be classified as an indefinite-lived intangible asset. Accordingly, prior to reclassifying the trade name to a finite-lived intangible asset, we completed a quantitative assessment for impairment and determined the fair value of the asset exceeded the carrying value. As such, the trade name was assigned a two-year estimated useful life and is being amortized on a straight-line basis as of the Closing Date.
Current report
(1)On February 23, 2024, we entered into an amendment (the “Amendment”) to our senior unsecured credit agreement dated as of January 22, 2020 (as amended, the “Credit Facility”). The Amendment, among other things, (i) instituted certain amendments to the sustainability-linked adjustments to the interest rates applicable to borrowings under the three-year revolving credit facility (the “Three-Year Revolving Credit Facility”) and the five-year revolving credit facility (the “Five-Year Revolving Credit Facility”) and (ii) extended the termination date of the Three-Year Revolving Credit Facility (with respect to the available commitments of the extending lenders) to January 22, 2026, and of the Five-Year Revolving Credit Facility (with respect to the available commitments of the extending lenders) to January 22, 2028, in each case subject to an additional one-year extension at the option of the Company.
Current report
In April 2024, we terminated our $700 million trade accounts receivable sale program which was set to expire on December 5, 2025 and entered into a new trade accounts receivable sale program with a maximum amount available of $200 million.
Reworded paragraphs (32)
Previous wording
We conduct our operations in facilities that are located worldwide, including but not limited to, China, India, Malaysia, Mexico, Singapore and the United States. We derived a substantial majority, 86.4% of net revenue from our international operations for the three months ended November 30, 2023. Our global manufacturing production sites allow customers to manufacture products simultaneously in the optimal locations for their products. Our global presence is key to assessing and executing on our business opportunities.
Current wording
We conduct our operations in facilities that are located worldwide, including but not limited to, China, India, Malaysia, Mexico, Singapore and the United States. We derived a substantial majority, 82.5% and 84.7%, of net revenue from our international operations for the three months and six months ended February 29, 2024, respectively. Our global manufacturing production sites allow customers to manufacture products simultaneously in the optimal locations for their products. Our global presence is key to assessing and executing on our business opportunities.
Previous wording
(1)The calculation of these key performance indicators includes assets and liabilities held for sale for the three months ended November 30, 2023 and August 31, 2023, respectively.
Current wording
(1)The calculation of these key performance indicators includes assets and liabilities held for sale for the three months ended November 30, 2023.
Previous wording
(4)Days in accounts receivable is calculated as accounts receivable, net, divided by net revenue multiplied by 90 days. During the three months ended November 30, 2023, the increase in days in accounts receivable from the prior sequential quarter was primarily due to the timing of collections.
Current wording
(4)Days in accounts receivable is calculated as accounts receivable, net, divided by net revenue multiplied by 90 days. During the three months ended February 29, 2024, the decrease in days in accounts receivable from the prior sequential quarter and the three months ended February 28, 2023, was primarily due to the timing of collections.
Previous wording
(5)Days in inventory is calculated as inventories, net and contract assets divided by cost of revenue multiplied by 90 days. During the three months ended November 30, 2023, the decrease in days in inventory from the prior sequential quarter was primarily driven by higher consumption of inventory to support sales during the quarter and improved working capital management.
Current wording
(5)Days in inventory is calculated as inventories, net and contract assets divided by cost of revenue multiplied by 90 days. During the three months ended February 29, 2024, the increase in days in inventory from the prior sequential quarter was primarily driven by the timing of sales. During the three months ended February 29, 2024, the decrease in days in inventory from the three months ended February 28, 2023, was primarily driven by improved working capital management.
Previous wording
(6)Days in accounts payable is calculated as accounts payable divided by cost of revenue multiplied by 90 days. During the three months ended November 30, 2023, the decrease in days in accounts payable from the three months ended November 30, 2022, was primarily due to cash payments and timing of purchases during the quarter.
Current wording
(6)Days in accounts payable is calculated as accounts payable divided by cost of revenue multiplied by 90 days. During the three months ended February 29, 2024, the decrease in days in accounts payable from the prior sequential quarter was primarily due to timing of purchases and cash payments during the quarter. During the three months ended February 29, 2024, the decrease in days in accounts payable from the three months ended February 28, 2023, was primarily driven by improved working capital management.
Previous wording
Net revenue decreased during the three months ended November 30, 2023, compared to the three months ended November 30, 2022. Specifically, the EMS segment net revenue decreased 21% primarily due to: (i) a 12% decrease in revenues from existing customers within our 5G, wireless and cloud business, which continued transitioning to a customer-controlled consignment model in fiscal year 2024, (ii) a 7% decrease in revenues from existing customers within our digital print and retail business, and (iii) a 2% decrease in revenues from existing customers within our industrial and semi-capital equipment business. The DMS segment net revenue decreased 6% due to: (i) a 5% decrease in revenues from existing customers within our connected devices business and (ii) a 3% decrease from existing customers within our mobility business. The decrease is partially offset by a 2% increase in revenues from existing customers within our automotive and transportation business.
Current wording
Net revenue decreased during the three months ended February 29, 2024, compared to the three months ended February 28, 2023. Specifically, the EMS segment net revenue decreased 18% primarily due to: (i) a 12% decrease in revenues from existing customers primarily within our 5G and wireless business, and the continued transitioning to a customer-controlled consignment model in our cloud business during fiscal year 2024, (ii) a 5% decrease in revenues from existing customers within our digital print and retail business, and (iii) a 4% decrease in revenues from existing customers within our industrial and semi-capital equipment business. The decrease is partially offset by a 3% increase in revenues from existing customers within our networking and storage business. The DMS segment net revenue decreased 16% due to: (i) a 17% decrease primarily driven by the divestiture of our mobility business and (ii) a 2% decrease in revenues from existing customers within our connected devices business. The decrease is partially offset by a 3% increase in revenues from existing customers within our automotive and transportation business.
Previous wording
On September 26, 2023, we announced the signing of a definitive agreement to divest our mobility business to an affiliate of BYD Electronic (International) Company Limited (“BYDE”) in a cash transaction valued at approximately $2.2 billion. On December 29, 2023, the closing date, we completed the sale. See Note 15 – “Business Acquisitions and Divestitures” to the Consolidated Financial Statements for additional information.
Current wording
On September 26, 2023, we announced the signing of a definitive agreement to divest our mobility business to an affiliate of BYD Electronic (International) Company Limited (“BYDE”) in a cash transaction valued at approximately $2.2 billion, subject to certain customary purchase price adjustments. On December 29, 2023, the Closing Date, we completed the sale. See Note 15 – “Business Acquisitions and Divestitures” to the Consolidated Financial Statements for additional information.
Previous wording
Gross profit as a percentage of net revenue increased for the three months ended November 30, 2023, compared to the three months ended November 30, 2022, primarily due to product mix, improved profitability across various businesses, and depreciation and amortization for long-lived assets no longer being recorded while these assets are classified as held for sale.
Current wording
Gross profit as a percentage of net revenue increased for the three months and six months ended February 29, 2024, compared to the three months and six months ended February 28, 2023, primarily due to depreciation and amortization for long-lived assets related to the mobility divestiture no longer being recorded while these assets were classified as held for sale and product mix.
Previous wording
Selling, general and administrative expenses decreased during the three months ended November 30, 2023, compared to the three months ended November 30, 2022. The decrease is primarily due to a $6 million decrease in salary and salary related expenses.
Current wording
Selling, general and administrative expenses increased during the three months ended February 29, 2024, compared to the three months ended February 28, 2023. The increase is primarily due to a $19 million increase in salary and salary related expenses.
Previous wording
Research and development expenses remained consistent as a percentage of net revenue during the three months ended November 30, 2023, compared to the three months ended November 30, 2022.
Current wording
Research and development expenses remained consistent as a percentage of net revenue during the three months and six months ended February 29, 2024, compared to the three months and six months ended February 28, 2023.
Previous wording
Amortization of intangibles remained relatively consistent during the three months ended November 30, 2023, compared to the three months ended November 30, 2022.
Current wording
Amortization of intangibles remained relatively consistent during the three months and six months ended February 29, 2024, compared to the three months and six months ended February 28, 2023.
Previous wording
Restructuring, severance and related charges increased during the three months ended November 30, 2023, compared to the three months ended November 30, 2022, primarily related to the 2024 Restructuring Plan.
Current wording
Restructuring, severance and related charges increased during the three months and six months ended February 29, 2024, compared to the three months and six months ended February 28, 2023, primarily due to charges related to the 2024 Restructuring Plan.
Previous wording
Based on the analysis done to date, we currently expect to recognize approximately $300 million in pre-tax restructuring and other related costs over the course of our 2024 fiscal year. The charges relating to the 2024 Restructuring Plan are currently expected to result in net cash expenditures of approximately $200 million that will be payable over the course of our fiscal years 2024 and 2025. The exact timing of these charges and cash outflows, as well as the estimated cost ranges by category type, have not been finalized. This information will be subject to the finalization of timetables for the transition of functions, consultation with employees and their representatives as well as the statutory severance requirements of the jurisdictions impacted, and the amount and timing of the actual charges may vary due to a variety of factors. Our estimates for the charges discussed above exclude any potential income tax effects.
Current wording
Based on the analysis done to date, we currently expect to recognize approximately $300 million in pre-tax restructuring and other related costs over the course of our 2024 fiscal year. The restructuring and other related charges are expected to include $150 million to $180 million of employee severance and benefit costs; $80 million to $120 million of asset write-off costs; and $30 million to $40 million of contract termination costs and other related costs. The charges relating to the 2024 Restructuring Plan are currently expected to result in net cash expenditures of approximately $200 million that will be payable over the course of our fiscal years 2024 and 2025. The exact timing of these charges and cash outflows, as well as the estimated cost ranges by category type, have not been finalized. The amount and timing of the actual charges may vary due to a variety of factors, including the finalization of timetables for the transition of functions, consultation with employees and their representatives, as well as the impact of jurisdictional statutory severance requirements. Our estimates for the charges discussed above exclude any potential income tax effects.
Previous wording
Costs from the Divestiture of Businesses
Current wording
Gain from the Divestiture of Businesses
Previous wording
Costs from the divestiture of businesses increased during the three months ended November 30, 2023, related to transaction costs incurred from the planned divestiture of our mobility business.
Current wording
Acquisition and divestiture related charges increased during the three months and six months ended February 29, 2024, related to transaction and disposal costs incurred in connection with the divestiture of our mobility business.
Previous wording
The change in other expense during the three months ended November 30, 2023, compared to the three months ended November 30, 2022, is primarily due to an increase in fees due to higher interest rates on our trade accounts receivable sales programs and global asset-backed securitization programs.
Current wording
The change in other expense during the three months and six months February 29, 2024, compared to the three months and six months February 28, 2023, is primarily due to an increase in fees due to higher interest rates on our trade accounts receivable sales programs and global asset-backed securitization programs.
Previous wording
The effective income tax rate differed for the three months ended November 30, 2023, compared to the three months ended November 30, 2022, primarily due to: (i) a change in the jurisdictional mix of earnings, driven in part by restructuring charges, (ii) a $19 million income tax benefit for the reversal of a non-U.S. unrecognized tax benefit due to audit closure for the three months ended November 30, 2023, and (iii) an $11 million income tax benefit for the reversal of a portion of the U.S. valuation allowance related to an acquisition for the three months ended November 30, 2023.
Current wording
The effective income tax rate differed for the three months and six months ended February 29, 2024, compared to the three months and six months ended February 28, 2023, primarily due to: (i) a change in the jurisdictional mix of earnings, driven in part by restructuring charges and (ii) the gain from the divestiture of the mobility business and corresponding $58 million of income tax expense during the three months ended February 29, 2024.
Previous wording
(1)Charges recorded during the three months ended November 30, 2023, related to the 2024 Restructuring Plan. Charges recorded during the three months ended November 30, 2022, related to headcount reduction to further optimize our business activities.
Current wording
(1)Charges recorded during the three months and six months ended February 29, 2024, related to the 2024 Restructuring Plan. Charges recorded during the three months and six months ended February 28, 2023, related to headcount reduction to further optimize our business activities.
Previous wording
(3)Tax adjustments for the three months ended November 30, 2023, were partially driven by an income tax benefit for the reversal of a non-U.S. unrecognized tax benefit due to audit closure.
Current wording
(4)Tax adjustments for the three months and six months ended February 29, 2024, were partially driven by an income tax expense associated with the divestiture of the mobility business.
Previous wording
The acquisition of ProcureAbility assets was accounted for as a business combination using the acquisition method of accounting. Assets acquired of $86 million, including $40 million in intangible assets and $38 million in goodwill, and liabilities assumed of $25 million were recorded at their estimated fair values as of the acquisition date. The allocation of the purchase price is considered preliminary pending final valuation for the Company. The excess of the purchase price over the fair value of the acquired assets and assumed liabilities was recorded to goodwill and was fully allocated to the DMS segment. The majority of the goodwill is currently not expected to be deductible for income tax purposes. The results of operations were included in our condensed consolidated financial results beginning on November 1, 2023. Pro forma information has not been provided as the acquisition of ProcureAbility is not deemed to be significant.
Current wording
The acquisition of ProcureAbility was accounted for as a business combination using the acquisition method of accounting. Assets acquired of $87 million, including $40 million in intangible assets and $38 million in goodwill, and liabilities assumed of $26 million were recorded at their estimated fair values as of the acquisition date. The excess of the purchase price over the fair value of the acquired assets and assumed liabilities was recorded to goodwill and was fully allocated to the DMS segment. The majority of the goodwill is currently not expected to be deductible for income tax purposes. The results of operations were included in our condensed consolidated financial results beginning on November 1, 2023. Pro forma information has not been provided as the acquisition of ProcureAbility is not deemed to be significant.
Previous wording
We announced on September 26, 2023 that, through our indirect subsidiary, Jabil Circuit (Singapore) Pte. Ltd., a Singapore private limited company (“Singapore Seller”), we agreed to sell to an affiliate of BYD Electronic (International) Co. Ltd., a Hong Kong limited liability company (“Purchaser” or “BYDE”), our product manufacturing business in Chengdu, including our supporting component manufacturing in Wuxi (the “Business”) for cash consideration of approximately $2.2 billion, subject to certain customary purchase price adjustments. On December 29, 2023, the closing date, we completed the sale.
Current wording
We announced on September 26, 2023 that, through our indirect subsidiary, Jabil Circuit (Singapore) Pte. Ltd., a Singapore private limited company (“Singapore Seller”), we agreed to sell to an affiliate of BYD Electronic (International) Co. Ltd., a Hong Kong limited liability company (“Purchaser” or “BYDE”), our product manufacturing business in Chengdu, including our supporting component manufacturing in Wuxi (the “Business”) for cash consideration of approximately $2.2 billion, subject to certain customary purchase price adjustments.
Previous wording
As of November 30, 2023, and August 31, 2023, the assets and liabilities of the Business were classified as held for sale and the carrying value is less than the estimated fair value less cost to sell and, thus, no adjustment to the carrying value of the disposal group is necessary. For the three months ended November 30, 2023, depreciation and amortization expense for long-lived assets are not recorded while these assets are classified as held for sale. The divestiture did not meet the criteria to be reported as discontinued operations and we continued to report the operating results for the Business in our Condensed Consolidated Statement of Operations in the DMS segment until the Closing Date.
Current wording
As of August 31, 2023, we determined the Business met the criteria to be classified as held for sale. Accordingly, we presented the assets and liabilities of the Business as held for sale in the Consolidated Balance Sheets as of November 30, 2023 and August 31, 2023. Asset and liabilities classified as held for sale had a carrying value less than the estimated fair value less cost to sell and, thus, no adjustment to the carrying value of the disposal group was necessary. Depreciation and amortization expense for long-lived assets was not recorded for the period in which these assets were classified as held for sale. The divestiture did not meet the criteria to be reported as discontinued operations and we continued to report the operating results for the Business in the Condensed Consolidated Statement of Operations in the DMS segment until the Closing Date.
Previous wording
As of November 30, 2023, we had approximately $1.6 billion in cash and cash equivalents, of which a significant portion was held by our foreign subsidiaries. Most of our foreign cash and cash equivalents as of November 30, 2023 could be repatriated to the United States without potential tax expense.
Current wording
As of February 29, 2024, we had approximately $2.6 billion in cash and cash equivalents, of which a significant portion was held by our foreign subsidiaries. Most of our foreign cash and cash equivalents as of February 29, 2024 could be repatriated to the United States without potential tax expense.
Previous wording
(1)As of November 30, 2023, we had $3.8 billion in available unused borrowing capacity under our revolving credit facilities. The senior unsecured credit agreement dated as of January 22, 2020 and amended on February 10, 2023 (the “Credit Facility”) acts as the back-up facility for commercial paper outstanding, if any. We have a borrowing capacity of up to $3.2 billion under our commercial paper program. Commercial paper borrowings with an original maturity of 90 days or less are recorded net within the Condensed Consolidated Statements of Cash Flows, and have been excluded from the table above.
Current wording
(2)As of February 29, 2024, we had $3.9 billion in available unused borrowing capacity under our revolving credit facilities. The Credit Facility acts as the back-up facility for commercial paper outstanding, if any. We have a borrowing capacity of up to $3.2 billion under our commercial paper program. Commercial paper borrowings with an original maturity of 90 days or less are recorded net within the Condensed Consolidated Statements of Cash Flows, and have been excluded from the table above.
Previous wording
We continue servicing the receivables sold and in exchange receive a servicing fee under the global asset-backed securitization program. Servicing fees related to the global asset-backed securitization program recognized during the three months ended November 30, 2023 and 2022 were not material. We do not record a servicing asset or liability on the Condensed Consolidated Balance Sheets as we estimate that the fee we receive to service these receivables approximates the fair market compensation to provide the servicing activities.
Current wording
We continue servicing the receivables sold and in exchange receive a servicing fee under the global asset-backed securitization program. Servicing fees related to the global asset-backed securitization program recognized during the three months and six months ended February 29, 2024 and February 28, 2023 were not material. We do not record a servicing asset or liability on the Condensed Consolidated Balance Sheets as we estimate that the fee we receive to service these receivables approximates the fair market compensation to provide the servicing activities.
Previous wording
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. During the three months ended November 30, 2023, we sold $1.0 billion of trade accounts receivable and we received cash proceeds of $1.0 billion. As of November 30, 2023, we had no available liquidity under our global asset-backed securitization program.
Current wording
The global asset-backed securitization program expires on November 25, 2024. Effective February 20, 2024, the terms of the global asset-backed securitization program were amended to increase the maximum amount of net cash proceeds available at any one time from $600 million to $700 million. During the three months and six months ended February 29, 2024, we sold $1.0 billion and $2.0 billion, respectively, of trade accounts receivable and we received cash proceeds of $1.0 billion and $1.9 billion, respectively. As of February 29, 2024, we had up to $15 million in available liquidity under our global asset-backed securitization program.
Previous wording
As of November 30, 2023, we may elect to sell receivables and the unaffiliated financial institutions may elect to purchase specific accounts receivable at any one time, at a discount, on an ongoing basis up to a: (i) maximum aggregate amount available of $2.3 billion under nine trade accounts receivable sale programs, (ii) maximum amount available of 100 million CHF under one trade accounts receivable sale program, and (iii) maximum amount available of 8.1 billion INR under one trade accounts receivable sale program. The trade accounts receivable sale programs either expire on various dates through 2028 or do not have expiration dates and may be terminated upon election of the Company or the unaffiliated financial institutions.
Current wording
As of February 29, 2024, we may elect to sell receivables and the unaffiliated financial institutions may elect to purchase specific accounts receivable at any one time, at a discount, on an ongoing basis up to a: (i) maximum aggregate amount available of $2.1 billion under nine trade accounts receivable sale programs, (ii) maximum amount available of 100 million CHF under one trade accounts receivable sale program, (iii) maximum amount available of 8.1 billion INR under one trade accounts receivable sale program, and (iv) maximum amount available of 1.4 billion CNY under one trade accounts receivable sale program. The trade accounts receivable sale programs either expire on various dates through 2028 or do not have expiration dates and may be terminated upon election of the Company or the unaffiliated financial institutions.
Previous wording
During the three months ended November 30, 2023, we sold $2.0 billion of trade accounts receivable under these programs and we received cash proceeds of $2.0 billion. As of November 30, 2023, we had up to $1.4 billion in available liquidity under our trade accounts receivable sale programs.
Current wording
During the three months and six months ended February 29, 2024, we sold $1.8 billion and $3.9 billion, respectively, of trade accounts receivable under these programs and we received cash proceeds of $1.8 billion and $3.8 billion, respectively. As of February 29, 2024, we had up to $1.0 billion in available liquidity under our trade accounts receivable sale programs.
Previous wording
Net cash provided by operating activities during the three months ended November 30, 2023, was primarily due to a decrease in non-cash expenses, net income, inventories, and an increase in accounts payable, accrued expenses and other liabilities. Net cash provided by operating activities was partially offset by an increase in accounts receivable, in prepaid expenses and other current assets, and in contract assets. The decrease in inventories is primarily due to higher consumption of inventory to support sales during the quarter and improved working capital management. The increase in accounts payable, accrued expenses and other liabilities is primarily due to the timing of purchases and cash payments. The increase in accounts receivable is primarily driven by the timing of collections. The increase in prepaid expenses and other current assets is primarily due to the timing of payments. The increase in contract assets is primarily due to timing of revenue recognition for the over time customers.
Current wording
Net cash provided by operating activities during the six months ended February 29, 2024, was primarily due to a decrease in accounts receivable and inventories and non-cash expenses and net income. Net cash provided by operating activities was partially offset by a decrease in accounts payable, accrued expense and other liabilities and an increase in prepaid expenses and other current assets, and in contract assets. The decrease in accounts receivable is primarily driven by the timing of collections. The decrease in inventories is primarily due to higher consumption of inventory to support sales and improved working capital management. The decrease in accounts payable, accrued expenses and other liabilities is primarily due to the timing of purchases and cash payments. The increase in prepaid expenses and other current assets is primarily due to the timing of payments. The increase in contract assets is primarily due to timing of revenue recognition for the over time customers.
Previous wording
Net cash used in investing activities during the three months ended November 30, 2023 consisted primarily of capital expenditures, principally to support ongoing business in the DMS and EMS segments and the acquisition of ProcureAbility, partially offset by proceeds from the planned divestiture of our mobility business and proceeds and advances from the sale of property, plant and equipment.
Current wording
Net cash provided by investing activities during the six months ended February 29, 2024 consisted primarily of proceeds from the divestiture of our mobility business and proceeds and advances from the sale of property, plant and equipment, partially offset by capital expenditures, principally to support ongoing business in the DMS and EMS segments and the acquisition of ProcureAbility and certain assets of Motorola Solutions Video Manufacturing.
Previous wording
Net cash used in financing activities during the three months ended November 30, 2023 was primarily due to (i) the repurchase of our common stock under our share repurchase authorization, (ii) payments for debt agreements (iii) treasury stock minimum tax withholding related to vesting of restricted stock, and (iv) dividend payments. Net cash used in financing activities was partially offset by borrowings under debt agreements.
Current wording
Net cash used in financing activities during the six months ended February 29, 2024 was primarily due to (i) payments for debt agreements, (ii) the repurchase of our common stock under our share repurchase authorization, (iii) treasury stock minimum tax withholding related to vesting of restricted stock, and (iv) dividend payments. Net cash used in financing activities was partially offset by (i) borrowings under debt agreements and (ii) net proceeds from the exercise of stock options and issuance of common stock under the employee stock purchase plan.
Previous wording
In September 2022, the Board of Directors approved an authorization for the repurchase of up to $1.0 billion of our common stock (the “2023 Share Repurchase Program”). As of August 31, 2023, 2.7 million shares had been repurchased for $224 million, excluding excise tax. In September 2023, the Board of Directors amended and increased the 2023 Share Repurchase Program to allow for the repurchase of up to $2.5 billion of our common stock. As part of the 2023 Share Repurchase Program, we entered into an accelerated share repurchase (“ASR”) agreement with a bank in September 2023 to repurchase $500 million of our common stock. During the first quarter of 2024, the ASR transaction was completed, and 3.9 million shares were delivered under the ASR agreement at an average price of $128.61. The final number of shares delivered upon settlement of the ASR agreement was determined based on a discount to the volume weighted average price of our common stock during the term of the agreement. As of November 30, 2023, 3.9 million shares had been repurchased for $500 million, excluding excise tax, and $2.0 billion remains available under the 2023 Share Repurchase Program approved in September 2023.
Current wording
In September 2022, the Board of Directors approved an authorization for the repurchase of up to $1.0 billion of our common stock (the “2023 Share Repurchase Program”). As of August 31, 2023, 2.7 million shares had been repurchased for $224 million, excluding excise tax. In September 2023, the Board of Directors amended and increased the 2023 Share Repurchase Program to allow for the repurchase of up to $2.5 billion of our common stock. As part of the amended 2023 Share Repurchase Program, we entered into an accelerated share repurchase (“ASR”) agreement with a bank in September 2023 to repurchase $500 million of our common stock. During the first quarter of 2024, the ASR transaction was completed, and 3.9 million shares were delivered under the ASR agreement at an average price of $128.61. The final number of shares delivered upon settlement of the ASR agreement was determined based on a discount to the volume weighted average price of our common stock during the term of the agreement. As of February 29, 2024, 10.4 million shares had been repurchased for $1.3 billion, excluding excise tax, and $1.2 billion remains available under the amended 2023 Share Repurchase Program.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
Net revenue decreased during the six months ended February 29, 2024, compared to the six months ended February 28, 2023. Specifically, the EMS segment net revenue decreased 20% primarily due to: (i) a 12% decrease in revenues from existing customers within our 5G, wireless and cloud business, primarily driven by the continued transitioning to a customer-controlled consignment model in our cloud business during fiscal year 2024, (ii) a 6% decrease in revenues from existing customers within our digital print and retail business, and (iii) a 3% decrease in revenues from existing customers within our industrial and semi-capital equipment business. The decrease is partially offset by a 1% increase in revenues from existing customers within our networking and storage business. The DMS segment net revenue decreased 10% due to: (i) a 9% decrease primarily driven by the divestiture of our mobility business and (ii) a 4% decrease in revenues from existing customers within our connected devices business. The decrease is partially offset by a 3% increase in revenues from existing customers within our automotive and transportation business.
Current report — wording carried from elsewhere
See Note 15 – “Business Acquisitions and Divestitures” to the Condensed Consolidated Financial Statements for additional information.
Current report — wording carried from elsewhere
See Note 15 – “Business Acquisitions and Divestitures” to the Condensed Consolidated Financial Statements for additional information.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Interest expense, net remained relatively consistent during the three months ended November 30, 2023, compared to the three months ended November 30, 2022.