Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Feb. 28, 2019 | Mar. 28, 2019 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Feb. 28, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | JBL | |
Entity Registrant Name | JABIL INC | |
Entity Central Index Key | 0000898293 | |
Current Fiscal Year End Date | --08-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Common Stock, Shares Outstanding | 152,878,329 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Feb. 28, 2019 | Aug. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 749,057 | $ 1,257,949 |
Accounts receivable, net of allowance for doubtful accounts of $14,456 as of February 28, 2019 and $15,181 as of August 31, 2018 | 2,543,615 | 1,693,268 |
Contract assets | 832,889 | 0 |
Inventories, net | 3,248,273 | 3,457,706 |
Prepaid expenses and other current assets | 532,223 | 1,141,000 |
Total current assets | 7,906,057 | 7,549,923 |
Property, plant and equipment, net of accumulated depreciation of $3,860,332 as of February 28, 2019 and $3,646,945 as of August 31, 2018 | 3,279,505 | 3,198,016 |
Goodwill | 627,296 | 627,745 |
Intangible assets, net of accumulated amortization of $321,965 as of February 28, 2019 and $307,178 as of August 31, 2018 | 274,439 | 279,131 |
Deferred income taxes | 194,015 | 218,252 |
Other assets | 195,282 | 172,574 |
Total assets | 12,476,594 | 12,045,641 |
Current liabilities: | ||
Current installments of notes payable and long-term debt | 175,186 | 25,197 |
Accounts payable | 4,900,070 | 4,942,932 |
Accrued expenses | 2,676,604 | 2,262,744 |
Total current liabilities | 7,751,860 | 7,230,873 |
Notes payable and long-term debt, less current installments | 2,482,387 | 2,493,502 |
Other liabilities | 132,882 | 94,617 |
Income tax liabilities | 133,066 | 148,884 |
Deferred income taxes | 117,547 | 114,385 |
Total liabilities | 10,617,742 | 10,082,261 |
Commitments and contingencies | ||
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; 259,739,745 and 257,130,145 shares issued and 152,878,329 and 164,588,172 shares outstanding as of February 28, 2019 and August 31, 2018, respectively | 260 | 257 |
Additional paid-in capital | 2,264,966 | 2,218,673 |
Retained earnings | 1,966,100 | 1,760,097 |
Accumulated other comprehensive loss | (13,253) | (19,399) |
Treasury stock at cost, 106,861,416 and 92,541,973 shares as of February 28, 2019 and August 31, 2018, respectively | (2,370,898) | (2,009,371) |
Total Jabil Inc. stockholders’ equity | 1,847,175 | 1,950,257 |
Noncontrolling interests | 11,677 | 13,123 |
Total equity | 1,858,852 | 1,963,380 |
Total liabilities and equity | $ 12,476,594 | $ 12,045,641 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Feb. 28, 2019 | Aug. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 14,456 | $ 15,181 |
Property, plant and equipment, accumulated depreciation | 3,860,332 | 3,646,945 |
Intangible assets, accumulated amortization | $ 321,965 | $ 307,178 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 259,739,745 | 257,130,145 |
Common stock, shares outstanding | 152,878,329 | 164,588,172 |
Treasury stock, shares | 106,861,416 | 92,541,973 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Feb. 28, 2019 | Feb. 28, 2018 | Feb. 28, 2019 | Feb. 28, 2018 | |
Income Statement [Abstract] | ||||
Net revenue | $ 6,066,990 | $ 5,301,101 | $ 12,573,265 | $ 10,886,633 |
Cost of revenue | 5,612,116 | 4,903,968 | 11,598,741 | 10,020,215 |
Gross profit | 454,874 | 397,133 | 974,524 | 866,418 |
Operating expenses: | ||||
Selling, general and administrative | 282,142 | 243,940 | 560,268 | 536,995 |
Research and development | 10,155 | 8,344 | 21,298 | 17,453 |
Amortization of intangibles | 7,777 | 9,890 | 15,423 | 19,869 |
Restructuring and related charges | 817 | 5,427 | 6,842 | 16,815 |
Operating income | 153,983 | 129,532 | 370,693 | 275,286 |
Other expense | 11,757 | 10,485 | 25,307 | 16,367 |
Interest income | (4,760) | (5,011) | (9,139) | (8,824) |
Interest expense | 46,160 | 37,796 | 88,812 | 74,042 |
Income before income tax | 100,826 | 86,262 | 265,713 | 193,701 |
Income tax expense | 33,219 | 48,734 | 74,032 | 92,254 |
Net income | 67,607 | 37,528 | 191,681 | 101,447 |
Net income attributable to noncontrolling interests, net of tax | 253 | 220 | 727 | 344 |
Net income attributable to Jabil Inc. | $ 67,354 | $ 37,308 | $ 190,954 | $ 101,103 |
Earnings per share attributable to the stockholders of Jabil Inc.: | ||||
Basic (in dollars per share) | $ 0.44 | $ 0.21 | $ 1.21 | $ 0.58 |
Diluted (in dollars per share) | $ 0.43 | $ 0.21 | $ 1.19 | $ 0.57 |
Weighted average shares outstanding: | ||||
Basic (in shares) | 154,725 | 174,635 | 158,160 | 175,792 |
Diluted (in shares) | 156,737 | 176,953 | 160,413 | 178,578 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Feb. 28, 2019 | Feb. 28, 2018 | Feb. 28, 2019 | Feb. 28, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 67,607 | $ 37,528 | $ 191,681 | $ 101,447 |
Other comprehensive income: | ||||
Change in foreign currency translation | 12,535 | 24,721 | 12,912 | 20,921 |
Change in derivative instruments: | ||||
Change in fair value of derivatives | 2,386 | 20,653 | (16,083) | 28,396 |
Adjustment for net (gains) losses realized and included in net income | 3,501 | (9,893) | 17,686 | (15,084) |
Total change in derivative instruments | 5,887 | 10,760 | 1,603 | 13,312 |
Unrealized gain (loss) on available for sale securities | 273 | (349) | (8,472) | (1,814) |
Actuarial gain (loss) | 0 | (8) | 103 | (431) |
Total other comprehensive income | 18,695 | 35,124 | 6,146 | 31,988 |
Comprehensive income | 86,302 | 72,652 | 197,827 | 133,435 |
Comprehensive income attributable to noncontrolling interests | 253 | 220 | 727 | 344 |
Comprehensive income attributable to Jabil Inc. | $ 86,049 | $ 72,432 | $ 197,100 | $ 133,091 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive (Loss) Income | Treasury Stock | Noncontrolling Interests |
Beginning Balance at Aug. 31, 2017 | $ 2,368,344 | $ 253 | $ 2,104,203 | $ 1,730,893 | $ 54,620 | $ (1,536,455) | $ 14,830 |
Shares issued under employee stock purchase plan | 1 | 12,838 | |||||
Vesting of restricted stock awards | 3 | (3) | |||||
Recognition of stock-based compensation | 59,726 | ||||||
Declared dividends | (29,624) | ||||||
Comprehensive income | 133,435 | 101,103 | 31,988 | 344 | |||
Purchases of treasury stock under employee stock plans | (22,343) | ||||||
Treasury shares purchased | (225,108) | ||||||
Acquisition of noncontrolling interests | 0 | ||||||
Disposition of noncontrolling interests | 0 | ||||||
Declared dividends to noncontrolling interests | (2,920) | ||||||
Foreign currency adjustments attributable to noncontrolling interests | (3) | ||||||
Ending Balance at Feb. 28, 2018 | 2,294,346 | 257 | 2,176,764 | 1,802,372 | 86,608 | (1,783,906) | 12,251 |
Beginning Balance at Nov. 30, 2017 | 2,344,692 | 256 | 2,149,173 | 1,779,335 | 51,484 | (1,650,509) | 14,953 |
Shares issued under employee stock purchase plan | 1 | 12,838 | |||||
Vesting of restricted stock awards | 0 | 0 | |||||
Recognition of stock-based compensation | 14,753 | ||||||
Declared dividends | (14,271) | ||||||
Comprehensive income | 72,652 | 37,308 | 35,124 | 220 | |||
Purchases of treasury stock under employee stock plans | (1,598) | ||||||
Treasury shares purchased | (131,799) | ||||||
Acquisition of noncontrolling interests | 0 | ||||||
Disposition of noncontrolling interests | 0 | ||||||
Declared dividends to noncontrolling interests | (2,920) | ||||||
Foreign currency adjustments attributable to noncontrolling interests | (2) | ||||||
Ending Balance at Feb. 28, 2018 | 2,294,346 | 257 | 2,176,764 | 1,802,372 | 86,608 | (1,783,906) | 12,251 |
Cumulative effect adjustment for adoption of new accounting standards | 40,855 | ||||||
Beginning Balance at Aug. 31, 2018 | 1,963,380 | 257 | 2,218,673 | 1,760,097 | (19,399) | (2,009,371) | 13,123 |
Shares issued under employee stock purchase plan | 1 | 14,587 | |||||
Vesting of restricted stock awards | 2 | (2) | |||||
Recognition of stock-based compensation | 31,708 | ||||||
Declared dividends | (25,806) | ||||||
Comprehensive income | 197,827 | 190,954 | 6,146 | 727 | |||
Purchases of treasury stock under employee stock plans | (11,204) | ||||||
Treasury shares purchased | (350,323) | ||||||
Acquisition of noncontrolling interests | 1,112 | ||||||
Disposition of noncontrolling interests | (1,785) | ||||||
Declared dividends to noncontrolling interests | (1,500) | ||||||
Foreign currency adjustments attributable to noncontrolling interests | 0 | ||||||
Ending Balance at Feb. 28, 2019 | 1,858,852 | 260 | 2,264,966 | 1,966,100 | (13,253) | (2,370,898) | 11,677 |
Cumulative effect adjustment for adoption of new accounting standards | 0 | ||||||
Beginning Balance at Nov. 30, 2018 | 1,905,513 | 259 | 2,235,827 | 1,911,451 | (31,948) | (2,223,673) | 13,597 |
Shares issued under employee stock purchase plan | 1 | 14,579 | |||||
Vesting of restricted stock awards | 0 | 0 | |||||
Recognition of stock-based compensation | 14,560 | ||||||
Declared dividends | (12,705) | ||||||
Comprehensive income | 86,302 | 67,354 | 18,695 | 253 | |||
Purchases of treasury stock under employee stock plans | (1,489) | ||||||
Treasury shares purchased | (145,736) | ||||||
Acquisition of noncontrolling interests | 1,112 | ||||||
Disposition of noncontrolling interests | (1,785) | ||||||
Declared dividends to noncontrolling interests | (1,500) | ||||||
Foreign currency adjustments attributable to noncontrolling interests | 0 | ||||||
Ending Balance at Feb. 28, 2019 | $ 1,858,852 | $ 260 | $ 2,264,966 | $ 1,966,100 | $ (13,253) | $ (2,370,898) | $ 11,677 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Feb. 28, 2019 | Feb. 28, 2018 | |
Cash flows provided by (used in) operating activities: | ||
Net income | $ 191,681 | $ 101,447 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 381,510 | 382,322 |
Restructuring and related charges | (3,212) | 9,263 |
Recognition of stock-based compensation expense and related charges | 32,946 | 59,938 |
Deferred income taxes | 23,921 | (24,535) |
Provision for allowance for doubtful accounts | 5,598 | 17,271 |
Other, net | 38,559 | (792) |
Change in operating assets and liabilities, exclusive of net assets acquired: | ||
Accounts receivable | (365,192) | (1,245,493) |
Contract assets | (815,144) | 0 |
Inventories | 225,036 | (418,307) |
Prepaid expenses and other current assets | (4,895) | (95,187) |
Other assets | (10,170) | (19,272) |
Accounts payable, accrued expenses and other liabilities | 407,127 | 369,346 |
Net cash provided by (used in) operating activities | 107,765 | (863,999) |
Cash flows (used in) provided by investing activities: | ||
Acquisition of property, plant and equipment | (537,140) | (544,401) |
Proceeds and advances from sale of property, plant and equipment | 144,968 | 236,316 |
Cash paid for business and intangible asset acquisitions, net of cash | (80,778) | (95,858) |
Cash receipts on sold receivables | 96,846 | 1,162,184 |
Other, net | (13,504) | (2,360) |
Net cash (used in) provided by investing activities | (389,608) | 755,881 |
Cash flows used in financing activities: | ||
Borrowings under debt agreements | 6,182,931 | 4,690,570 |
Payments toward debt agreements | (6,046,181) | (4,555,233) |
Payments to acquire treasury stock | (350,323) | (225,108) |
Dividends paid to stockholders | (27,422) | (30,431) |
Net proceeds from exercise of stock options and issuance of common stock under employee stock purchase plan | 14,587 | 12,838 |
Treasury stock minimum tax withholding related to vesting of restricted stock | (11,204) | (22,343) |
Other, net | (1,500) | (11,237) |
Net cash used in financing activities | (239,112) | (140,944) |
Effect of exchange rate changes on cash and cash equivalents | 12,063 | (61) |
Net decrease in cash and cash equivalents | (508,892) | (249,123) |
Cash and cash equivalents at beginning of period | 1,257,949 | 1,189,919 |
Cash and cash equivalents at end of period | $ 749,057 | $ 940,796 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Feb. 28, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | 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. Jabil Inc. (the “Company”) has made certain reclassification adjustments to conform prior periods’ Condensed Consolidated Financial Statements to the current presentation. 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 the Company for the fiscal year ended August 31, 2018 . Results for the six months ended February 28, 2019 are not necessarily an indication of the results that may be expected for the full fiscal year ending August 31, 2019 . |
Earnings Per Share and Dividend
Earnings Per Share and Dividends | 6 Months Ended |
Feb. 28, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share and Dividends | 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 unit awards (“restricted stock units”) and dilutive stock appreciation rights. 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 Six months ended February 28, 2019 February 28, 2018 February 28, 2019 February 28, 2018 Restricted stock units 1,348 2,476 1,348 2,354 Dividends The following table sets forth cash dividends declared by the Company to common stockholders during the six months ended February 28, 2019 and 2018 (in thousands, 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 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 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 |
Inventories
Inventories | 6 Months Ended |
Feb. 28, 2019 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories consist of the following (in thousands): February 28, 2019 August 31, 2018 Raw materials $ 2,424,324 $ 2,070,569 Work in process 467,496 788,742 Finished goods 422,910 659,335 Reserve for excess and obsolete inventory (66,457 ) (60,940 ) Inventories, net $ 3,248,273 $ 3,457,706 |
Accrued Expenses
Accrued Expenses | 6 Months Ended |
Feb. 28, 2019 | |
Accrued Liabilities, Current [Abstract] | |
Accrued Expenses | Accrued Expenses Accrued expenses consist of the following (in thousands): February 28, 2019 August 31, 2018 Contract liabilities $ 583,300 $ — Deferred income — 691,365 Accrued compensation and employee benefits 472,621 570,400 Other accrued expenses 1,620,683 1,000,979 Accrued expenses $ 2,676,604 $ 2,262,744 |
Stock-Based Compensation and Sh
Stock-Based Compensation and Shares Repurchases | 6 Months Ended |
Feb. 28, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation and Shares Repurchases | Stock-Based Compensation and Share Repurchases The Company recognized stock-based compensation expense within selling, general and administrative expense as follows (in thousands): Three months ended Six months ended February 28, 2019 February 28, 2018 February 28, 2019 February 28, 2018 Restricted stock units and stock appreciation rights $ 13,604 $ 12,952 $ 28,655 $ 56,459 Employee stock purchase plan 2,093 2,087 4,291 3,787 Other (1) — — — 7,538 Total $ 15,697 $ 15,039 $ 32,946 $ 67,784 (1) Represents a one-time cash-settled stock award that vested on November 30, 2017. As of February 28, 2019 , the shares available to be issued under the 2011 Stock Award and Incentive Plan were 11,933,647 . Restricted Stock Units Certain key employees have been granted time-based, performance-based and market-based 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 six months ended February 28, 2019 and 2018 , the Company awarded approximately 1.6 million and 1.4 million time-based restricted stock units, respectively, 0.4 million and 0.4 million performance-based restricted stock units, respectively and 0.4 million and 0.4 million market-based restricted stock units, respectively. The following represents the stock-based compensation information for the period indicated (in thousands): Six months ended February 28, 2019 Unrecognized stock-based compensation expense—restricted stock units $ 66,046 Remaining weighted-average period for restricted stock units expense 1.5 years Common Stock Outstanding The following represents the common stock outstanding for the periods indicated: Three months ended Six months ended February 28, 2019 February 28, 2018 February 28, 2019 February 28, 2018 Common stock outstanding: Beginning balances 157,986,896 176,305,660 164,588,172 177,727,653 Shares issued upon exercise of stock options 11,348 154 11,348 29,688 Shares issued under employee stock purchase plan 691,971 575,516 692,325 575,516 Vesting of restricted stock 219,764 220,022 1,905,927 2,694,147 Purchases of treasury stock under employee stock plans (57,389 ) (59,708 ) (464,836 ) (784,031 ) Treasury shares purchased (5,974,261 ) (4,978,414 ) (13,854,607 ) (8,179,743 ) Ending balances 152,878,329 172,063,230 152,878,329 172,063,230 Share Repurchases In June 2018, the Company’s Board of Directors authorized the repurchase of up to $350.0 million of the Company’s common stock (the “2018 Share Repurchase Program”). The 2018 Share Repurchase Program expires August 31, 2019. As of February 28, 2019 , 13.9 million shares had been repurchased for $350.0 million , which utilized the total amount authorized by the Board of Directors. |
Concentration of Risk and Segme
Concentration of Risk and Segment Data | 6 Months Ended |
Feb. 28, 2019 | |
Segment Reporting [Abstract] | |
Concentration of Risk and Segment Data | Concentration of Risk and Segment Data Concentration of Risk Sales of the Company’s products are concentrated among specific customers. During the six months ended February 28, 2019 , the Company’s five largest customers accounted for approximately 46% of its net revenue and 78 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. Segment income does not include amortization of intangibles, stock-based compensation expense and related charges, restructuring and related charges, distressed customer charges, acquisition and integration charges, loss on disposal of subsidiaries, settlement of receivables and related charges, impairment of notes receivable and related charges, goodwill impairment charges, business interruption and impairment charges, net, income (loss) from discontinued operations, gain (loss) on sale of discontinued operations, other expense, interest income, interest expense, income tax expense or adjustment for net income (loss) attributable to noncontrolling interests. 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 thousands): Three months ended Six months ended February 28, 2019 February 28, 2018 February 28, 2019 February 28, 2018 Net revenue EMS $ 3,804,727 $ 2,870,488 $ 7,307,830 $ 5,732,548 DMS 2,262,263 2,430,613 5,265,435 5,154,085 $ 6,066,990 $ 5,301,101 $ 12,573,265 $ 10,886,633 Segment income and reconciliation of income before income tax EMS $ 88,654 $ 95,283 $ 172,749 $ 180,993 DMS 102,405 83,313 271,970 224,823 Total segment income $ 191,059 $ 178,596 $ 444,719 $ 405,816 Reconciling items: Amortization of intangibles (7,777 ) (9,890 ) (15,423 ) (19,869 ) Distressed customer charge — (14,706 ) — (14,706 ) Stock-based compensation expense and related charges (15,697 ) (15,039 ) (32,946 ) (67,784 ) Restructuring and related charges (817 ) (5,427 ) (6,842 ) (16,815 ) Acquisition and integration charges (12,785 ) — (21,675 ) — Business interruption and impairment charges, net (1) — (4,002 ) 2,860 (11,356 ) Other expense (11,757 ) (10,485 ) (25,307 ) (16,367 ) Interest income 4,760 5,011 9,139 8,824 Interest expense (46,160 ) (37,796 ) (88,812 ) (74,042 ) Income before income tax $ 100,826 $ 86,262 $ 265,713 $ 193,701 (1) Charges, net of insurance proceeds of $6.1 million for the three months ended February 28, 2018, and $2.9 million and $16.4 million for the six months ended February 28, 2019 and 2018, respectively, relate to business interruption and asset impairment costs associated with damage from Hurricane Maria, which impacted our operations in Cayey, Puerto Rico. As of February 28, 2019 , the Company operated in 29 countries worldwide. Sales to unaffiliated customers are based on the Company’s 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 Six months ended February 28, 2019 February 28, 2018 February 28, 2019 February 28, 2018 Foreign source revenue 88.2 % 91.9 % 90.6 % 92.1 % |
Notes Payable and Long-Term Deb
Notes Payable and Long-Term Debt | 6 Months Ended |
Feb. 28, 2019 | |
Debt Disclosure [Abstract] | |
Notes Payable and Long-Term Debt | Notes Payable and Long-Term Debt Notes payable and long-term debt outstanding as of February 28, 2019 and August 31, 2018 are summarized below (in thousands): Maturity Date February 28, August 31, 5.625% Senior Notes Dec 15, 2020 $ 398,441 $ 397,995 4.700% Senior Notes Sep 15, 2022 497,678 497,350 4.900% Senior Notes Jul 14, 2023 298,935 298,814 3.950% Senior Notes Jan 12, 2028 494,516 494,208 Borrowings under credit facilities (1) Nov 8, 2022 and Aug 24, 2020 150,000 — Borrowings under loans Nov 8, 2022 and Aug 24, 2020 818,003 830,332 Total notes payable and long-term debt 2,657,573 2,518,699 Less current installments of notes payable and long-term debt 175,186 25,197 Notes payable and long-term debt, less current installments $ 2,482,387 $ 2,493,502 (1) As of February 28, 2019 , the Company has $2.2 billion in available unused borrowing capacity under its revolving credit facilities. 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 5.625% , 4.700% , 4.900% or 3.950% Senior Notes upon a change of control. As of February 28, 2019 and August 31, 2018 , the Company was in compliance with its debt covenants. Fair Value The estimated fair values of the Company’s publicly traded debt, including the 5.625% , 4.700% and 3.950% Senior Notes, were approximately $410.5 million , $508.0 million and $463.3 million , respectively, as of February 28, 2019 . The fair value estimates are based upon observable market data (Level 2 criteria). The estimated fair value of the Company’s private debt, the 4.900% Senior Notes, was approximately $304.6 million , as of February 28, 2019 . This fair value estimate is based on the Company’s indicative borrowing cost derived from discounted cash flows (Level 3 criteria). The carrying amounts of borrowings under credit facilities and under loans approximate fair value as interest rates on these instruments approximate current market rates. |
Trade Accounts Receivable Secur
Trade Accounts Receivable Securitization and Sale Programs | 6 Months Ended |
Feb. 28, 2019 | |
Transfers and Servicing [Abstract] | |
Trade Accounts Receivable Securitization and Sale Programs | Trade Accounts Receivable Securitization and Sale Programs 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 six months ended February 28, 2019 and 2018 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. Transfers of the receivables under the programs are accounted for 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 Update No. 2016-15 (“ASU 2016-15”) 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 for the six months ended February 28, 2019 , and $366.3 million and $1.1 billion for the three months and six months ended February 28, 2018 , respectively, obtained in exchange for securitized receivables are reported as non-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 February 28, 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, $197.0 million in receivables are pledged as collateral to the unaffiliated financial institution as of February 28, 2019. Following is a summary of the asset-backed securitization programs and key terms: Maximum Amount of (1) Expiration North American $ 390.0 November 22, 2021 Foreign $ 400.0 September 30, 2021 (1) Maximum amount available at any one time. In connection with the asset-backed securitization programs, the Company recognized the following (in millions): Three months ended Six months ended February 28, 2019 February 28, 2018 February 28, 2019 (4) February 28, 2018 Trade accounts receivable sold $ 1,078 $ 2,057 $ 1,828 $ 4,449 Cash proceeds received (1) $ 1,072 $ 1,507 $ 1,816 $ 3,895 Pre-tax losses on sale of receivables (2) $ 6 $ 3 $ 12 $ 7 Deferred purchase price receivables as of February 28 (3) $ — $ 547 $ — $ 547 (1) For the three months and six months ended February 28, 2019 and 2018 , the amount primarily represented proceeds from collections reinvested in revolving-period transfers. (2) Recorded to other expense within the Condensed Consolidated Statements of Operations. (3) Recorded initially at fair value as prepaid expenses and other current assets on the Condensed Consolidated Balance Sheets and are valued using unobservable inputs (Level 3 inputs), primarily discounted cash flows, and due to their credit quality and short-term maturity the fair values approximated book values. The unobservable inputs consist of estimated credit losses and estimated discount rates, which both have an immaterial impact on the fair value calculations. (4) 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. The asset-backed securitization programs require compliance with several covenants. The North American asset-based 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 February 28, 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 (1) Type of Expiration A $ 800.0 Uncommitted August 31, 2022 (2) B $ 150.0 Uncommitted November 30, 2019 (3) C 800.0 CNY Uncommitted June 30, 2019 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 $ 150.0 Uncommitted February 25, 2020 (8) (1) Maximum amount available at any one time. (2) Any party may elect to terminate the agreement upon 15 days prior notice. (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) The program will be automatically extended through August 10, 2023 unless either party provides 30 days notice of termination. (7) The program will be automatically extended through August 21, 2023 unless either party provides 30 days notice of termination. (8) The program will be automatically extended each year through February 23, 2024 unless either party provides 30 days notice of termination. In connection with the trade accounts receivable sale programs, the Company recognized the following (in millions): Three months ended Six months ended February 28, 2019 February 28, 2018 February 28, 2019 February 28, 2018 Trade accounts receivable sold $ 1,719 $ 1,640 $ 3,553 $ 2,734 Cash proceeds received $ 1,712 $ 1,636 $ 3,538 $ 2,728 Pre-tax losses on sale of receivables (1) $ 7 $ 4 $ 15 $ 6 (1) Recorded to other expense within the Condensed Consolidated Statement of Operations. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income | 6 Months Ended |
Feb. 28, 2019 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income | Accumulated Other Comprehensive Income The following table sets forth the changes in accumulated other comprehensive income (“AOCI”), net of tax, by component for the six months ended February 28, 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 income (loss) before reclassifications 12,912 (16,083 ) 103 — (8,472 ) (11,540 ) Amounts reclassified from AOCI — 17,686 — — — 17,686 Other comprehensive income (loss) (1) 12,912 1,603 103 — (8,472 ) 6,146 Balance as of February 28, 2019 $ 20,343 $ 9,719 $ (24,918 ) $ (643 ) $ (17,754 ) $ (13,253 ) (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 thousands): Three months ended Six months ended Comprehensive Income Components Financial Statement Line Item February 28, February 28, February 28, February 28, Unrealized (gains) losses on derivative instruments: Foreign exchange contracts Cost of revenue $ 3,931 $ (7,381 ) $ 18,546 $ (10,060 ) Interest rate contracts Interest expense (430 ) (2,512 ) (860 ) (5,024 ) Total amounts reclassified from AOCI (1)(2) $ 3,501 $ (9,893 ) $ 17,686 $ (15,084 ) (1) The Company expects to reclassify $5.9 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 28, 2019. The amounts for the three months and six months ended February 28, 2018, include a reduction to income tax expense related to derivative instruments of $3.5 million and $7.0 million , respectively. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Feb. 28, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies The Company is party to certain lawsuits in the ordinary course of business. The Company does not believe that these proceedings, individually or in the aggregate, will have a material adverse effect on the Company’s financial position, results of operations or cash flows. 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. If the IRS ultimately prevails in its positions, the Company’s income tax payment due for the fiscal years 2009 through 2011 and 2012 through 2014 would be approximately $28.6 million and $5.3 million , respectively, after utilization of tax loss carry forwards available through fiscal year 2014. Also, the IRS has proposed interest and penalties with respect to fiscal years 2009 through 2011. The IRS may make similar claims in future audits with respect to these types of transactions. At this time, anticipating the amount of any future IRS proposed adjustments, interest and penalties is not practicable. The Company disagrees with and intends to contest the proposed income tax payments assessed. As the final resolution of the proposed adjustments remains uncertain, the Company continues to provide for the uncertain tax positions based on the more likely than not standard. While the resolution of the issues may result in tax liabilities, interest and penalties, which may be significantly higher than the amounts accrued for these matters, management currently believes that the resolution will not have a material adverse effect on the Company’s financial position, results of operations or cash flows. However, there can be no assurance that management’s beliefs will be realized. |
Derivative Financial Instrument
Derivative Financial Instruments and Hedging Activities | 6 Months Ended |
Feb. 28, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments and Hedging Activities | 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 $251.7 million and $293.4 million as of February 28, 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 March 1, 2019 and November 30, 2019 . In addition to derivatives that are designated as hedging instruments and qualify for hedge accounting, the Company also enters into forward contracts to economically hedge transactional exposure associated with commitments arising from trade accounts receivable, trade accounts payable, fixed purchase obligations and intercompany transactions denominated in a currency other than the functional currency of the respective operating entity. The aggregate notional amount of these outstanding contracts as of February 28, 2019 and August 31, 2018 , was $3.9 billion and $3.4 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 February 28, 2019 and August 31, 2018 (in thousands): Fair Values of Derivative Instruments Asset Derivatives Liability Derivatives Balance Sheet Location Fair Value as of Fair Value as of Balance Sheet Location Fair Value as of Fair Value as of Derivatives designated as hedging instruments: Forward foreign exchange contracts Prepaid expenses and other current assets $ 6,560 $ 225 Accrued expenses $ 1,104 $ 13,364 Derivatives not designated as hedging instruments: Forward foreign exchange contracts Prepaid expenses and other current assets $ 24,422 $ 10,125 Accrued expenses $ 3,602 $ 46,171 (1) Classified as Level 2 in the fair-value hierarchy. 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 Gain on Derivatives Recognized in Net Income Amount of Gain Recognized in Net Income on Derivatives Three months ended Six months ended February 28, 2019 February 28, 2018 February 28, 2019 February 28, 2018 Forward foreign exchange contracts (1) Cost of revenue $ 49,794 $ 48,933 $ 42,808 $ 45,744 (1) For 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. During the three months and six months ended February 28, 2018 , the Company recognized $41.7 million and $35.5 million , respectively, 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. Cash Flow Hedges During the first quarter of fiscal year 2019, the Company entered into forward interest rate swap transactions to hedge the fixed interest rate payments for an anticipated debt issuance. The forward starting swaps have an aggregate notional amount of $200.0 million and have been designated as hedging instruments and accounted for as cash flow hedges. The forward starting swaps are scheduled to expire on December 15, 2020. If the anticipated debt issuance occurs before December 15, 2020, the contracts will be terminated simultaneously with the debt issuance. The contracts will be settled with the respective counterparties on a net basis at the time of termination or expiration. During the first quarter of fiscal year 2019, the Company entered into interest rate swap transactions to hedge the variable interest rate payments for the $500.0 million Term Loan Facility which expires on November 8, 2022 (the “2017 Term Loan Facility”). In connection with this transaction, 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 LIBOR. The interest rate swaps have an aggregate notional amount of $200.0 million and have been designated as hedging instruments and accounted for as cash flow hedges. The interest rate swaps were effective on October 11, 2018 and are scheduled to expire on August 31, 2020. The contracts will be settled with the respective counterparties on a net basis at each settlement date. During fiscal year 2018, the Company entered into interest rate swap transactions to hedge the variable interest rate payments for the $350.0 million Term Loan Facility which expires on August 24, 2020 (the “2018 Term Loan Facility”). In connection with this transaction, 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 three-month LIBOR. The interest rate swaps have an aggregate notional amount of $350.0 million and have been designated as hedging instruments and accounted for as cash flow hedges. The interest rate swaps were effective on August 24, 2018 and are scheduled to expire on August 24, 2020. The contracts will be settled with the respective counterparties on a net basis at each settlement date. During fiscal year 2016, the Company entered into interest rate swap transactions to hedge the variable interest rate payments for the 2017 Term Loan Facility. In connection with this transaction, 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 LIBOR. The interest rate swaps have an aggregate notional amount of $200.0 million and have been designated as hedging instruments and accounted for as cash flow hedges. The interest rate swaps were effective on September 30, 2016 and are scheduled to expire on June 30, 2019 . The contracts will be settled with the respective counterparties on a net basis at each settlement date. During fiscal year 2016, the Company entered into forward interest rate swap transactions to hedge the fixed interest rate payments for an anticipated debt issuance (the 3.950% Senior Notes). The swaps were accounted for as a cash flow hedge and had a notional amount of $200.0 million . Concurrently with the pricing of the 3.950% Senior Notes in the second quarter of fiscal year 2018, the Company settled the swaps. The fair value of the cash received for the swaps at settlement was $17.2 million . The effective portion of the swaps is recorded in the Company’s Consolidated Balance Sheets as a component of AOCI and is amortized as a reduction to interest expense in the Company’s Consolidated Statements of Operations through January 2028. |
Restructuring and Related Charg
Restructuring and Related Charges | 6 Months Ended |
Feb. 28, 2019 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Charges | Restructuring and Related Charges Following is a summary of the Company’s restructuring and related charges (in thousands): Three months ended Six months ended February 28, 2019 February 28, 2018 February 28, 2019 February 28, 2018 Employee severance and benefit costs $ 3,768 $ 2,012 $ 8,947 $ 5,989 Lease costs — 7 9 7 Asset write-off costs (3,396 ) 2,451 (3,212 ) 9,263 Other related costs 445 957 1,098 1,556 Total restructuring and related charges (1) $ 817 $ 5,427 $ 6,842 $ 16,815 (1) Includes $0.3 million and $2.1 million recorded in the EMS segment and $0.5 million and $3.3 million recorded in the DMS segment for the three months ended February 28, 2019 and 2018 , respectively. Includes $4.7 million and $8.0 million recorded in the EMS segment, $2.1 million and $7.9 million recorded to the DMS segment and $0.0 million and $0.9 million of non-allocated charges for the six months ended February 28, 2019 and 2018 , respectively. Except for asset write-off costs, all restructuring and related charges are cash costs. 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”). Upon completion of the 2017 Restructuring Plan, the Company expects to recognize approximately $195.0 million in restructuring and other related costs. The Company has incurred $187.1 million in costs-to-date as of February 28, 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 8,947 9 (3,212 ) 1,098 6,842 Asset write-off charge and other non-cash activity (240 ) — 3,212 (7 ) 2,965 Cash payments (17,804 ) (303 ) — (1,160 ) (19,267 ) Balance as of February 28, 2019 $ 9,034 $ 2,390 $ — $ 453 $ 11,877 |
Business Acquisitions
Business Acquisitions | 6 Months Ended |
Feb. 28, 2019 | |
Business Combinations [Abstract] | |
Business Acquisitions | Business Acquisitions Fiscal year 2019 During fiscal year 2019, 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, under the terms of the Framework Agreement, the Company completed the initial closing of its acquisition of certain assets of JJMD for approximately $80.8 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. Assets acquired of $97.8 million and liabilities assumed of $17.0 million were recorded at their estimated fair values as of the acquisition date. The two subsequent closings, which are subject to customary closing conditions, are expected to occur during the second half of fiscal year 2019 and 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. 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. |
New Accounting Guidance
New Accounting Guidance | 6 Months Ended |
Feb. 28, 2019 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
New Accounting Guidance | New Accounting Guidance Recently Adopted Accounting Guidance During fiscal year 2014, the Financial Accounting Standards Board (“FASB”) issued an accounting standard, which is a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. The accounting standard became effective for the Company in the first quarter of fiscal year 2019. The Company implemented changes to its processes, policies and internal controls to meet the impact of the new standard and disclosure requirements. Refer to Note 16 – “Revenue” to the Condensed Consolidated Financial Statements for further details. During fiscal year 2016, the FASB issued a new accounting standard to address certain aspects of recognition, measurement, presentation and disclosure of financial instruments. This guidance became effective for the Company in the first quarter of fiscal year 2019, and was applied prospectively by means of a cumulative-effect adjustment to the Consolidated Balance Sheet as of September 1, 2018 to equity investments that existed as of the date of adoption of the standard. 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 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 $1.2 billion for the six months ended February 28, 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 transfer of non-financial assets in contracts with non-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 has 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. In preparation for the adoption, the Company is implementing a new lease accounting system. The adoption of this standard will impact the Company’s Consolidated Balance Sheet. The Company is currently evaluating practical expedients and accounting policy elections, and assessing overall impacts this new standard will have on its Consolidated Financial Statements. During fiscal year 2016, the FASB issued an accounting standard, which replaces the existing incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. This guidance is effective for the Company beginning in the first quarter of fiscal year 2021 and early adoption is permitted beginning in the first quarter of fiscal year 2020. This guidance must be applied using a modified retrospective or prospective transition method, depending on the area covered by this accounting standard. The Company is currently assessing the impact this new standard may have on its Consolidated Financial Statements. 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. During fiscal year 2018, the FASB issued a new accounting standard which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. This guidance is effective for the Company beginning in the first quarter of fiscal year 2021, with early adoption permitted. The Company is currently assessing the impact this new standard may have on its Consolidated Financial Statements. Recently issued accounting guidance not discussed above is not applicable or did not have, or is not expected to have, a material impact to the Company. |
Income Taxes
Income Taxes | 6 Months Ended |
Feb. 28, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes 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”). During fiscal year 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 of $142.3 million for the fiscal year ended August 31, 2018. This net provisional expense was mainly comprised of $65.9 million related to the one-time transition tax inclusive of unrecognized tax benefits, $(10.5) million related to the re-measurement of the Company’s U.S. deferred tax attributes, and $85.0 million related to the foreign tax impact of a change in indefinite reinvestment assertion on certain earnings from the Company’s foreign subsidiaries. During the first quarter of fiscal year 2019, the Company recorded an income tax benefit of $13.3 million , inclusive of unrecognized tax benefits, associated with the Tax Act. The income tax benefit was mainly related to the one-time transition tax to adjust the amount previously recorded during the fiscal year ended August 31, 2018. The adjustment to the one-time transition tax for the three months ended November 30, 2018 was primarily related to further analysis of the Company’s utilization of foreign tax credits and applicable limitations. The calculation of the one-time transition tax is based upon estimates of post-1986 earnings and profits, applicable foreign tax credits and relevant limitations, utilization of U.S. federal net operating losses and tax credits and the amount of foreign earnings held in cash and non-cash assets. During the three months ended February 28, 2019, the Company made no material adjustments to the net income tax expense related to the Tax Act. The Company has determined the Tax Act impacts based on the analysis, interpretations and guidance available at this time and considers the accounting for the effects of the Tax Act complete under SAB 118. There may be future adjustments based on changes in interpretations of the Tax Act, legislative updates or final regulations under the Tax Act, changes in accounting standards for income taxes, or changes in estimates we have utilized to calculate the transitional impact. During the first quarter of fiscal year 2019, the Company elected to record the Global Intangible Low-Taxed Income effects as a period cost. As a result of the one-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 from 10-percent or more owned foreign corporations. During the fiscal year ended August 31, 2018, the Company recorded liabilities of $85.0 million from a change in the indefinite reinvestment assertion on certain earnings from its foreign subsidiaries, primarily associated with foreign withholding taxes that would be incurred upon such future remittances of cash. The Company intends to indefinitely reinvest the remaining earnings from the Company’s foreign subsidiaries for which a deferred tax liability has not already been recorded. The accumulated earnings are the most significant component of the basis differences which are indefinitely reinvested. The effective tax rate of 33.0% and 27.9% during the three months and six months ended February 28, 2019 , respectively, differed from the U.S. federal statutory rate of 21.0% 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 six months ended February 28, 2019 included adjustments to amounts previously recorded for the Tax Act. The effective tax rate of 56.5% and 47.6% during the three months and six months ended February 28, 2018 , respectively, differed from the blended U.S. federal statutory rate of 25.7% primarily due to the Tax Act, including the one-time transition tax and the re-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 a non-U.S. jurisdiction. Other primary drivers for the difference between the effective tax rate and the blended U.S. federal statutory rate of 25.7% during the three months and six months ended February 28, 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 six months ended February 28, 2018. |
Revenue
Revenue | 6 Months Ended |
Feb. 28, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Effective September 1, 2018, the Company adopted ASU 2014-09, 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 ASU 2014-09 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 (1) Differences primarily relate to the timing of revenue recognition for over time customers and certain balance sheet reclassifications. (2) Differences primarily relate to the timing of recognition and recovery of fulfillment costs and certain balance sheet reclassifications. (3) Included within accrued expenses on the Condensed Consolidated Balance Sheets. (4) Differences included in contract liabilities as of September 1, 2018. 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 our to-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 February 28, 2019 (in thousands): February 28, 2019 As reported Balance without the adoption of ASU 2014-09 Assets Contract assets (1) $ 832,889 $ — Inventories, net (1) $ 3,248,273 $ 3,943,077 Prepaid expenses and other current assets (1)(2) $ 532,223 $ 537,801 Deferred income taxes (1)(2) $ 194,015 $ 198,444 Liabilities Contract liabilities (2)(3) $ 583,300 $ — Deferred income (2)(3)(4) $ — $ 571,149 Other accrued expenses (3)(4) $ 1,620,683 $ 1,616,750 Deferred income taxes (1) $ 117,547 $ 113,426 Equity Retained earnings (1)(2) $ 1,966,100 $ 1,858,227 (1) Differences primarily relate to the timing of revenue recognition for over time customers and certain balance sheet reclassifications. (2) Differences primarily relate to the timing of recognition and recovery of fulfillment costs and certain balance sheet reclassifications. (3) Included within accrued expenses on the Condensed Consolidated Balance Sheets. (4) Differences included in contract liabilities as of September 1, 2018. 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 six months ended February 28, 2019 (in thousands): Three months ended Six months ended February 28, 2019 February 28, 2019 As reported Balance without the adoption of ASU 2014-09 As reported Balance without the adoption of ASU 2014-09 Net revenue (1) $ 6,066,990 $ 5,985,439 $ 12,573,265 $ 12,229,174 Cost of revenue (2) $ 5,612,116 $ 5,556,714 $ 11,598,741 $ 11,317,170 Operating income $ 153,983 $ 127,835 $ 370,693 $ 308,174 Income tax expense $ 33,219 $ 36,867 $ 74,032 $ 76,783 Net income $ 67,607 $ 37,811 $ 191,681 $ 126,411 (1) Differences primarily relate to the timing of revenue recognition for over-time customers and to the recovery of fulfillment costs. (2) Differences primarily relate to the timing of cost recognition for over-time customers and the recognition of fulfillment costs. The following table presents the Company’s revenues disaggregated by segment (in thousands): Three months ended Six months ended February 28, 2019 February 28, 2019 EMS DMS Total EMS DMS Total Timing of transfer Point in time $ 836,863 $ 1,464,832 $ 2,301,695 $ 1,257,524 $ 3,566,483 $ 4,824,007 Over time $ 2,967,864 $ 797,431 $ 3,765,295 $ 6,050,306 $ 1,698,952 $ 7,749,258 Total $ 3,804,727 $ 2,262,263 $ 6,066,990 $ 7,307,830 $ 5,265,435 $ 12,573,265 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 six months ended February 28, 2019 . Revenue recognized during the six months ended February 28, 2019 that was included in the contract liability balance as of September 1, 2018 was $267.0 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 from 1 - 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 February 28, 2019 , capitalized costs to fulfill are $51.1 million . Amortization of $19.9 million and no impairment costs related to fulfillments costs were recognized during the six months ended February 28, 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. |
New Accounting Guidance (Polici
New Accounting Guidance (Policies) | 6 Months Ended |
Feb. 28, 2019 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recently Issued Accounting Guidance | Recently Adopted Accounting Guidance During fiscal year 2014, the Financial Accounting Standards Board (“FASB”) issued an accounting standard, which is a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. The accounting standard became effective for the Company in the first quarter of fiscal year 2019. The Company implemented changes to its processes, policies and internal controls to meet the impact of the new standard and disclosure requirements. Refer to Note 16 – “Revenue” to the Condensed Consolidated Financial Statements for further details. During fiscal year 2016, the FASB issued a new accounting standard to address certain aspects of recognition, measurement, presentation and disclosure of financial instruments. This guidance became effective for the Company in the first quarter of fiscal year 2019, and was applied prospectively by means of a cumulative-effect adjustment to the Consolidated Balance Sheet as of September 1, 2018 to equity investments that existed as of the date of adoption of the standard. 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 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 $1.2 billion for the six months ended February 28, 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 transfer of non-financial assets in contracts with non-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 has 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. In preparation for the adoption, the Company is implementing a new lease accounting system. The adoption of this standard will impact the Company’s Consolidated Balance Sheet. The Company is currently evaluating practical expedients and accounting policy elections, and assessing overall impacts this new standard will have on its Consolidated Financial Statements. During fiscal year 2016, the FASB issued an accounting standard, which replaces the existing incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. This guidance is effective for the Company beginning in the first quarter of fiscal year 2021 and early adoption is permitted beginning in the first quarter of fiscal year 2020. This guidance must be applied using a modified retrospective or prospective transition method, depending on the area covered by this accounting standard. The Company is currently assessing the impact this new standard may have on its Consolidated Financial Statements. 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. During fiscal year 2018, the FASB issued a new accounting standard which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. This guidance is effective for the Company beginning in the first quarter of fiscal year 2021, with early adoption permitted. The Company is currently assessing the impact this new standard may have on its Consolidated Financial Statements. Recently issued accounting guidance not discussed above is not applicable or did not have, or is not expected to have, a material impact to the Company. |
Earnings Per Share and Divide_2
Earnings Per Share and Dividends (Tables) | 6 Months Ended |
Feb. 28, 2019 | |
Earnings Per Share [Abstract] | |
Dilutive shares outstanding not included in the computation of EPS | Potential shares of common stock not included in the computation of earnings per share because their effect would have been antidilutive or because the performance criterion was not met were as follows (in thousands): Three months ended Six months ended February 28, 2019 February 28, 2018 February 28, 2019 February 28, 2018 Restricted stock units 1,348 2,476 1,348 2,354 |
Cash dividends declared to common stockholders | The following table sets forth cash dividends declared by the Company to common stockholders during the six months ended February 28, 2019 and 2018 (in thousands, 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 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 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 |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Feb. 28, 2019 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories consist of the following (in thousands): February 28, 2019 August 31, 2018 Raw materials $ 2,424,324 $ 2,070,569 Work in process 467,496 788,742 Finished goods 422,910 659,335 Reserve for excess and obsolete inventory (66,457 ) (60,940 ) Inventories, net $ 3,248,273 $ 3,457,706 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 6 Months Ended |
Feb. 28, 2019 | |
Accrued Liabilities, Current [Abstract] | |
Schedule of Accrued Expenses | Accrued expenses consist of the following (in thousands): February 28, 2019 August 31, 2018 Contract liabilities $ 583,300 $ — Deferred income — 691,365 Accrued compensation and employee benefits 472,621 570,400 Other accrued expenses 1,620,683 1,000,979 Accrued expenses $ 2,676,604 $ 2,262,744 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Feb. 28, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Recognized stock-based compensation expense within selling, general and administrative expense | The Company recognized stock-based compensation expense within selling, general and administrative expense as follows (in thousands): Three months ended Six months ended February 28, 2019 February 28, 2018 February 28, 2019 February 28, 2018 Restricted stock units and stock appreciation rights $ 13,604 $ 12,952 $ 28,655 $ 56,459 Employee stock purchase plan 2,093 2,087 4,291 3,787 Other (1) — — — 7,538 Total $ 15,697 $ 15,039 $ 32,946 $ 67,784 (1) Represents a one-time cash-settled stock award that vested on November 30, 2017. |
Share-based compensation information | The following represents the stock-based compensation information for the period indicated (in thousands): Six months ended February 28, 2019 Unrecognized stock-based compensation expense—restricted stock units $ 66,046 Remaining weighted-average period for restricted stock units expense 1.5 years |
Schedule of common stock shares outstanding | The following represents the common stock outstanding for the periods indicated: Three months ended Six months ended February 28, 2019 February 28, 2018 February 28, 2019 February 28, 2018 Common stock outstanding: Beginning balances 157,986,896 176,305,660 164,588,172 177,727,653 Shares issued upon exercise of stock options 11,348 154 11,348 29,688 Shares issued under employee stock purchase plan 691,971 575,516 692,325 575,516 Vesting of restricted stock 219,764 220,022 1,905,927 2,694,147 Purchases of treasury stock under employee stock plans (57,389 ) (59,708 ) (464,836 ) (784,031 ) Treasury shares purchased (5,974,261 ) (4,978,414 ) (13,854,607 ) (8,179,743 ) Ending balances 152,878,329 172,063,230 152,878,329 172,063,230 |
Concentration of Risk and Seg_2
Concentration of Risk and Segment Data (Tables) | 6 Months Ended |
Feb. 28, 2019 | |
Segment Reporting [Abstract] | |
Reconciliation of revenue from segments to consolidated | The following table sets forth operating segment information (in thousands): Three months ended Six months ended February 28, 2019 February 28, 2018 February 28, 2019 February 28, 2018 Net revenue EMS $ 3,804,727 $ 2,870,488 $ 7,307,830 $ 5,732,548 DMS 2,262,263 2,430,613 5,265,435 5,154,085 $ 6,066,990 $ 5,301,101 $ 12,573,265 $ 10,886,633 Segment income and reconciliation of income before income tax EMS $ 88,654 $ 95,283 $ 172,749 $ 180,993 DMS 102,405 83,313 271,970 224,823 Total segment income $ 191,059 $ 178,596 $ 444,719 $ 405,816 Reconciling items: Amortization of intangibles (7,777 ) (9,890 ) (15,423 ) (19,869 ) Distressed customer charge — (14,706 ) — (14,706 ) Stock-based compensation expense and related charges (15,697 ) (15,039 ) (32,946 ) (67,784 ) Restructuring and related charges (817 ) (5,427 ) (6,842 ) (16,815 ) Acquisition and integration charges (12,785 ) — (21,675 ) — Business interruption and impairment charges, net (1) — (4,002 ) 2,860 (11,356 ) Other expense (11,757 ) (10,485 ) (25,307 ) (16,367 ) Interest income 4,760 5,011 9,139 8,824 Interest expense (46,160 ) (37,796 ) (88,812 ) (74,042 ) Income before income tax $ 100,826 $ 86,262 $ 265,713 $ 193,701 (1) Charges, net of insurance proceeds of $6.1 million for the three months ended February 28, 2018, and $2.9 million and $16.4 million for the six months ended February 28, 2019 and 2018, respectively, relate to business interruption and asset impairment costs associated with damage from Hurricane Maria, which impacted our operations in Cayey, Puerto Rico. |
Reconciliation of operating profit (loss) from segments to consolidated | The following table sets forth operating segment information (in thousands): Three months ended Six months ended February 28, 2019 February 28, 2018 February 28, 2019 February 28, 2018 Net revenue EMS $ 3,804,727 $ 2,870,488 $ 7,307,830 $ 5,732,548 DMS 2,262,263 2,430,613 5,265,435 5,154,085 $ 6,066,990 $ 5,301,101 $ 12,573,265 $ 10,886,633 Segment income and reconciliation of income before income tax EMS $ 88,654 $ 95,283 $ 172,749 $ 180,993 DMS 102,405 83,313 271,970 224,823 Total segment income $ 191,059 $ 178,596 $ 444,719 $ 405,816 Reconciling items: Amortization of intangibles (7,777 ) (9,890 ) (15,423 ) (19,869 ) Distressed customer charge — (14,706 ) — (14,706 ) Stock-based compensation expense and related charges (15,697 ) (15,039 ) (32,946 ) (67,784 ) Restructuring and related charges (817 ) (5,427 ) (6,842 ) (16,815 ) Acquisition and integration charges (12,785 ) — (21,675 ) — Business interruption and impairment charges, net (1) — (4,002 ) 2,860 (11,356 ) Other expense (11,757 ) (10,485 ) (25,307 ) (16,367 ) Interest income 4,760 5,011 9,139 8,824 Interest expense (46,160 ) (37,796 ) (88,812 ) (74,042 ) Income before income tax $ 100,826 $ 86,262 $ 265,713 $ 193,701 (1) Charges, net of insurance proceeds of $6.1 million for the three months ended February 28, 2018, and $2.9 million and $16.4 million for the six months ended February 28, 2019 and 2018, respectively, relate to business interruption and asset impairment costs associated with damage from Hurricane Maria, which impacted our operations in Cayey, Puerto Rico. |
Schedule of foreign source revenue | The following table sets forth, for the periods indicated, foreign source revenue expressed as a percentage of net revenue: Three months ended Six months ended February 28, 2019 February 28, 2018 February 28, 2019 February 28, 2018 Foreign source revenue 88.2 % 91.9 % 90.6 % 92.1 % |
Notes Payable and Long-Term D_2
Notes Payable and Long-Term Debt (Tables) | 6 Months Ended |
Feb. 28, 2019 | |
Debt Disclosure [Abstract] | |
Notes payable and long-term debt | Notes payable and long-term debt outstanding as of February 28, 2019 and August 31, 2018 are summarized below (in thousands): Maturity Date February 28, August 31, 5.625% Senior Notes Dec 15, 2020 $ 398,441 $ 397,995 4.700% Senior Notes Sep 15, 2022 497,678 497,350 4.900% Senior Notes Jul 14, 2023 298,935 298,814 3.950% Senior Notes Jan 12, 2028 494,516 494,208 Borrowings under credit facilities (1) Nov 8, 2022 and Aug 24, 2020 150,000 — Borrowings under loans Nov 8, 2022 and Aug 24, 2020 818,003 830,332 Total notes payable and long-term debt 2,657,573 2,518,699 Less current installments of notes payable and long-term debt 175,186 25,197 Notes payable and long-term debt, less current installments $ 2,482,387 $ 2,493,502 (1) As of February 28, 2019 , the Company has $2.2 billion in available unused borrowing capacity under its revolving credit |
Trade Accounts Receivable Sec_2
Trade Accounts Receivable Securitization and Sale Programs (Tables) | 6 Months Ended |
Feb. 28, 2019 | |
Transfers and Servicing [Abstract] | |
Asset-backed securitization programs and key terms | Following is a summary of the asset-backed securitization programs and key terms: Maximum Amount of (1) Expiration North American $ 390.0 November 22, 2021 Foreign $ 400.0 September 30, 2021 (1) Maximum amount available at any one time. |
Asset-backed securitization programs amounts recognized | In connection with the asset-backed securitization programs, the Company recognized the following (in millions): Three months ended Six months ended February 28, 2019 February 28, 2018 February 28, 2019 (4) February 28, 2018 Trade accounts receivable sold $ 1,078 $ 2,057 $ 1,828 $ 4,449 Cash proceeds received (1) $ 1,072 $ 1,507 $ 1,816 $ 3,895 Pre-tax losses on sale of receivables (2) $ 6 $ 3 $ 12 $ 7 Deferred purchase price receivables as of February 28 (3) $ — $ 547 $ — $ 547 (1) For the three months and six months ended February 28, 2019 and 2018 , the amount primarily represented proceeds from collections reinvested in revolving-period transfers. (2) Recorded to other expense within the Condensed Consolidated Statements of Operations. (3) Recorded initially at fair value as prepaid expenses and other current assets on the Condensed Consolidated Balance Sheets and are valued using unobservable inputs (Level 3 inputs), primarily discounted cash flows, and due to their credit quality and short-term maturity the fair values approximated book values. The unobservable inputs consist of estimated credit losses and estimated discount rates, which both have an immaterial impact on the fair value calculations. (4) 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. |
Trade accounts receivable sale programs key terms | 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 (1) Type of Expiration A $ 800.0 Uncommitted August 31, 2022 (2) B $ 150.0 Uncommitted November 30, 2019 (3) C 800.0 CNY Uncommitted June 30, 2019 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 $ 150.0 Uncommitted February 25, 2020 (8) (1) Maximum amount available at any one time. (2) Any party may elect to terminate the agreement upon 15 days prior notice. (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) The program will be automatically extended through August 10, 2023 unless either party provides 30 days notice of termination. (7) The program will be automatically extended through August 21, 2023 unless either party provides 30 days notice of termination. (8) The program will be automatically extended each year through February 23, 2024 unless either party provides 30 days notice of termination. |
Trade accounts receivable sale programs amounts recognized | In connection with the trade accounts receivable sale programs, the Company recognized the following (in millions): Three months ended Six months ended February 28, 2019 February 28, 2018 February 28, 2019 February 28, 2018 Trade accounts receivable sold $ 1,719 $ 1,640 $ 3,553 $ 2,734 Cash proceeds received $ 1,712 $ 1,636 $ 3,538 $ 2,728 Pre-tax losses on sale of receivables (1) $ 7 $ 4 $ 15 $ 6 (1) Recorded to other expense within the Condensed Consolidated Statement of Operations. |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Tables) | 6 Months Ended |
Feb. 28, 2019 | |
Equity [Abstract] | |
Summary of changes in accumulated other comprehensive income | The following table sets forth the changes in accumulated other comprehensive income (“AOCI”), net of tax, by component for the six months ended February 28, 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 income (loss) before reclassifications 12,912 (16,083 ) 103 — (8,472 ) (11,540 ) Amounts reclassified from AOCI — 17,686 — — — 17,686 Other comprehensive income (loss) (1) 12,912 1,603 103 — (8,472 ) 6,146 Balance as of February 28, 2019 $ 20,343 $ 9,719 $ (24,918 ) $ (643 ) $ (17,754 ) $ (13,253 ) (1) Amounts are net of tax, which are immaterial. |
Reclassification from AOCI | 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 Six months ended Comprehensive Income Components Financial Statement Line Item February 28, February 28, February 28, February 28, Unrealized (gains) losses on derivative instruments: Foreign exchange contracts Cost of revenue $ 3,931 $ (7,381 ) $ 18,546 $ (10,060 ) Interest rate contracts Interest expense (430 ) (2,512 ) (860 ) (5,024 ) Total amounts reclassified from AOCI (1)(2) $ 3,501 $ (9,893 ) $ 17,686 $ (15,084 ) (1) The Company expects to reclassify $5.9 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 28, 2019. The amounts for the three months and six months ended February 28, 2018, include a reduction to income tax expense related to derivative instruments of $3.5 million and $7.0 million , respectively. |
Derivative Financial Instrume_2
Derivative Financial Instruments and Hedging Activities (Tables) | 6 Months Ended |
Feb. 28, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Fair value of derivative instruments located on consolidated balance sheets | 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 February 28, 2019 and August 31, 2018 (in thousands): Fair Values of Derivative Instruments Asset Derivatives Liability Derivatives Balance Sheet Location Fair Value as of Fair Value as of Balance Sheet Location Fair Value as of Fair Value as of Derivatives designated as hedging instruments: Forward foreign exchange contracts Prepaid expenses and other current assets $ 6,560 $ 225 Accrued expenses $ 1,104 $ 13,364 Derivatives not designated as hedging instruments: Forward foreign exchange contracts Prepaid expenses and other current assets $ 24,422 $ 10,125 Accrued expenses $ 3,602 $ 46,171 (1) Classified as Level 2 in the fair-value hierarchy. |
Net gains from forward contracts recorded in consolidated statements of operations | 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 Gain on Derivatives Recognized in Net Income Amount of Gain Recognized in Net Income on Derivatives Three months ended Six months ended February 28, 2019 February 28, 2018 February 28, 2019 February 28, 2018 Forward foreign exchange contracts (1) Cost of revenue $ 49,794 $ 48,933 $ 42,808 $ 45,744 (1) For 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. During the three months and six months ended February 28, 2018 , the Company recognized $41.7 million and $35.5 million , respectively, of foreign currency losses in cost of revenue, which are offset by the gains from the forward foreign exchange contracts. |
Restructuring and Related Cha_2
Restructuring and Related Charges (Tables) | 6 Months Ended |
Feb. 28, 2019 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and related costs | Following is a summary of the Company’s restructuring and related charges (in thousands): Three months ended Six months ended February 28, 2019 February 28, 2018 February 28, 2019 February 28, 2018 Employee severance and benefit costs $ 3,768 $ 2,012 $ 8,947 $ 5,989 Lease costs — 7 9 7 Asset write-off costs (3,396 ) 2,451 (3,212 ) 9,263 Other related costs 445 957 1,098 1,556 Total restructuring and related charges (1) $ 817 $ 5,427 $ 6,842 $ 16,815 (1) Includes $0.3 million and $2.1 million recorded in the EMS segment and $0.5 million and $3.3 million recorded in the DMS segment for the three months ended February 28, 2019 and 2018 , respectively. Includes $4.7 million and $8.0 million recorded in the EMS segment, $2.1 million and $7.9 million recorded to the DMS segment and $0.0 million and $0.9 million of non-allocated charges for the six months ended February 28, 2019 and 2018 , respectively. Except for asset write-off costs, all restructuring and related charges are cash costs. |
Liability activity, primarily associated with 2017 restructuring plan | 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 8,947 9 (3,212 ) 1,098 6,842 Asset write-off charge and other non-cash activity (240 ) — 3,212 (7 ) 2,965 Cash payments (17,804 ) (303 ) — (1,160 ) (19,267 ) Balance as of February 28, 2019 $ 9,034 $ 2,390 $ — $ 453 $ 11,877 |
Revenue (Tables)
Revenue (Tables) | 6 Months Ended |
Feb. 28, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Effect of adoption of new revenue guidance | The following table presents the effect of the adoption of the new revenue guidance on the Condensed Consolidated Balance Sheets as of February 28, 2019 (in thousands): February 28, 2019 As reported Balance without the adoption of ASU 2014-09 Assets Contract assets (1) $ 832,889 $ — Inventories, net (1) $ 3,248,273 $ 3,943,077 Prepaid expenses and other current assets (1)(2) $ 532,223 $ 537,801 Deferred income taxes (1)(2) $ 194,015 $ 198,444 Liabilities Contract liabilities (2)(3) $ 583,300 $ — Deferred income (2)(3)(4) $ — $ 571,149 Other accrued expenses (3)(4) $ 1,620,683 $ 1,616,750 Deferred income taxes (1) $ 117,547 $ 113,426 Equity Retained earnings (1)(2) $ 1,966,100 $ 1,858,227 (1) Differences primarily relate to the timing of revenue recognition for over time customers and certain balance sheet reclassifications. (2) Differences primarily relate to the timing of recognition and recovery of fulfillment costs and certain balance sheet reclassifications. (3) Included within accrued expenses on the Condensed Consolidated Balance Sheets. (4) Differences included in contract liabilities as of September 1, 2018. 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 six months ended February 28, 2019 (in thousands): Three months ended Six months ended February 28, 2019 February 28, 2019 As reported Balance without the adoption of ASU 2014-09 As reported Balance without the adoption of ASU 2014-09 Net revenue (1) $ 6,066,990 $ 5,985,439 $ 12,573,265 $ 12,229,174 Cost of revenue (2) $ 5,612,116 $ 5,556,714 $ 11,598,741 $ 11,317,170 Operating income $ 153,983 $ 127,835 $ 370,693 $ 308,174 Income tax expense $ 33,219 $ 36,867 $ 74,032 $ 76,783 Net income $ 67,607 $ 37,811 $ 191,681 $ 126,411 (1) Differences primarily relate to the timing of revenue recognition for over-time customers and to the recovery of fulfillment costs. (2) Differences primarily relate to the timing of cost recognition for over-time customers and the recognition of fulfillment costs. 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 (1) Differences primarily relate to the timing of revenue recognition for over time customers and certain balance sheet reclassifications. (2) Differences primarily relate to the timing of recognition and recovery of fulfillment costs and certain balance sheet reclassifications. (3) Included within accrued expenses on the Condensed Consolidated Balance Sheets. (4) Differences included in contract liabilities as of September 1, 2018. |
Revenues disaggregated by segment | The following table presents the Company’s revenues disaggregated by segment (in thousands): Three months ended Six months ended February 28, 2019 February 28, 2019 EMS DMS Total EMS DMS Total Timing of transfer Point in time $ 836,863 $ 1,464,832 $ 2,301,695 $ 1,257,524 $ 3,566,483 $ 4,824,007 Over time $ 2,967,864 $ 797,431 $ 3,765,295 $ 6,050,306 $ 1,698,952 $ 7,749,258 Total $ 3,804,727 $ 2,262,263 $ 6,066,990 $ 7,307,830 $ 5,265,435 $ 12,573,265 |
Earnings Per Share and Divide_3
Earnings Per Share and Dividends - Earnings Per Share (Details) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Feb. 28, 2019 | Feb. 28, 2018 | Feb. 28, 2019 | Feb. 28, 2018 | |
Restricted stock units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Common shares excluded from computation of diluted earnings per share | 1,348 | 2,476 | 1,348 | 2,354 |
Earnings Per Share and Divide_4
Earnings Per Share and Dividends - Dividends (Details) - USD ($) $ / shares in Units, $ in Thousands | Feb. 28, 2019 | Feb. 28, 2018 |
Quarter One | ||
Dividends Payable [Line Items] | ||
Dividend per Share (in dollars per share) | $ 0.08 | $ 0.08 |
Total of Cash Dividends Declared | $ 13,226 | $ 14,588 |
Quarter Two [Member] | ||
Dividends Payable [Line Items] | ||
Dividend per Share (in dollars per share) | $ 0.08 | $ 0.08 |
Total of Cash Dividends Declared | $ 12,706 | $ 14,272 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Feb. 28, 2019 | Sep. 01, 2018 | Aug. 31, 2018 |
Inventory Disclosure [Abstract] | |||
Raw materials | $ 2,424,324 | $ 2,070,569 | |
Work in process | 467,496 | 788,742 | |
Finished goods | 422,910 | 659,335 | |
Reserve for excess and obsolete inventory | (66,457) | (60,940) | |
Inventories, net | $ 3,248,273 | $ 2,996,435 | $ 3,457,706 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Feb. 28, 2019 | Sep. 01, 2018 | Aug. 31, 2018 |
Accrued Liabilities, Current [Abstract] | |||
Contract liabilities | $ 583,300 | ||
Deferred income | 0 | $ 0 | $ 691,365 |
Accrued compensation and employee benefits | 472,621 | 570,400 | |
Other accrued expenses | 1,620,683 | $ 1,041,371 | 1,000,979 |
Accrued expenses | $ 2,676,604 | $ 2,262,744 |
Stock-Based Compensation and _2
Stock-Based Compensation and Shares Repurchases - Recognized Stock-Based Compensation Expense within Selling, General and Administrative Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Feb. 28, 2019 | Feb. 28, 2018 | Feb. 28, 2019 | Feb. 28, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||
Restricted stock units and stock appreciation rights | $ 13,604 | $ 12,952 | $ 28,655 | $ 56,459 |
Employee stock purchase plan | 2,093 | 2,087 | 4,291 | 3,787 |
Other | 0 | 0 | 0 | 7,538 |
Total | $ 15,697 | $ 15,039 | $ 32,946 | $ 67,784 |
Stock-Based Compensation and _3
Stock-Based Compensation and Shares Repurchases - Narrative (Details) - USD ($) | 6 Months Ended | ||
Feb. 28, 2019 | Feb. 28, 2018 | Jun. 30, 2018 | |
2018 Share Repurchase Program | |||
Schedule of Weighted Average Assumptions for Fair Values of Stock Options[Line Items] | |||
Share repurchase program, amount authorized (up to) | $ 350,000,000 | ||
Shares repurchased | 13,900,000 | ||
Shares repurchased, value | $ 350,000,000 | ||
Time-based restricted stock units | |||
Schedule of Weighted Average Assumptions for Fair Values of Stock Options[Line Items] | |||
Award vesting period | 3 years | ||
Restricted stock units awarded (in shares) | 1,600,000 | 1,400,000 | |
Performance-based restricted stock units | |||
Schedule of Weighted Average Assumptions for Fair Values of Stock Options[Line Items] | |||
Award vesting period | 3 years | ||
Restricted stock units awarded (in shares) | 400,000 | 400,000 | |
Performance-based restricted stock units | Maximum | |||
Schedule of Weighted Average Assumptions for Fair Values of Stock Options[Line Items] | |||
Award vesting percentage | 150.00% | ||
Market based restricted stock units | |||
Schedule of Weighted Average Assumptions for Fair Values of Stock Options[Line Items] | |||
Award vesting period | 3 years | ||
Award vesting percentage | 200.00% | ||
Restricted stock units awarded (in shares) | 400,000 | 400,000 | |
Plan 2011 | |||
Schedule of Weighted Average Assumptions for Fair Values of Stock Options[Line Items] | |||
Shares available for issuance under share based compensation plan | 11,933,647 |
Stock-Based Compensation and _4
Stock-Based Compensation and Shares Repurchases - Stock-Based Compensation Information (Details) $ in Thousands | 6 Months Ended |
Feb. 28, 2019USD ($) | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Unrecognized stock-based compensation expense—restricted stock units | $ 66,046 |
Remaining weighted-average period for restricted stock units expense | 1 year 6 months |
Stock-Based Compensation and _5
Stock-Based Compensation and Shares Repurchases - Common Stock Shares Outstanding (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Feb. 28, 2019 | Feb. 28, 2018 | Feb. 28, 2019 | Feb. 28, 2018 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning Balance (in shares) | 164,588,172 | |||
Ending Balance (in shares) | 152,878,329 | 152,878,329 | ||
Common Stock | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning Balance (in shares) | 157,986,896 | 176,305,660 | 164,588,172 | 177,727,653 |
Shares issued upon exercise of stock options (in shares) | 11,348 | 154 | 11,348 | 29,688 |
Shares issued under employee stock purchase plan (in shares) | 691,971 | 575,516 | 692,325 | 575,516 |
Vesting of restricted stock (in shares) | 219,764 | 220,022 | 1,905,927 | 2,694,147 |
Purchases of treasury stock under employee stock plans (in shares) | (57,389) | (59,708) | (464,836) | (784,031) |
Treasury shares purchased (in shares) | (5,974,261) | (4,978,414) | (13,854,607) | (8,179,743) |
Ending Balance (in shares) | 152,878,329 | 172,063,230 | 152,878,329 | 172,063,230 |
Concentration of Risk and Seg_3
Concentration of Risk and Segment Data - Narrative (Details) | 3 Months Ended | 6 Months Ended | ||
Feb. 28, 2019Country | Feb. 28, 2018 | Feb. 28, 2019CustomerCountry | Feb. 28, 2018 | |
Revenue, Major Customer [Line Items] | ||||
Number of operating countries | Country | 29 | 29 | ||
Net Revenue | Geographic Concentration Risk | Foreign | ||||
Revenue, Major Customer [Line Items] | ||||
Concentration risk, percentage | 88.20% | 91.90% | 90.60% | 92.10% |
Five Largest Customers That Account for a Percentage of Net Revenue | Net Revenue | Customer Concentration Risk | ||||
Revenue, Major Customer [Line Items] | ||||
Top customers that comprise revenue | 5 | |||
Concentration risk, percentage | 46.00% | |||
Group of Customers That Account for 90% of Net Revenue | Net Revenue | Customer Concentration Risk | ||||
Revenue, Major Customer [Line Items] | ||||
Top customers that comprise revenue | 78 | |||
Concentration risk, percentage | 90.00% |
Concentration of Risk and Seg_4
Concentration of Risk and Segment Data - Segment Revenue and Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Feb. 28, 2019 | Feb. 28, 2018 | Feb. 28, 2019 | Feb. 28, 2018 | |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Net revenue | $ 6,066,990 | $ 5,301,101 | $ 12,573,265 | $ 10,886,633 |
Reconciling items: | ||||
Amortization of intangibles | (7,777) | (9,890) | (15,423) | (19,869) |
Stock-based compensation expense and related charges | (15,697) | (15,039) | (32,946) | (67,784) |
Restructuring and related charges | (817) | (5,427) | (6,842) | (16,815) |
Other expense | (11,757) | (10,485) | (25,307) | (16,367) |
Interest income | 4,760 | 5,011 | 9,139 | 8,824 |
Interest expense | (46,160) | (37,796) | (88,812) | (74,042) |
Income before income tax | 100,826 | 86,262 | 265,713 | 193,701 |
Cayey, Puerto Rico | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Insurance recoveries | 6,100 | 2,900 | 16,400 | |
EMS | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Net revenue | 3,804,727 | 7,307,830 | ||
Reconciling items: | ||||
Restructuring and related charges | (300) | (2,100) | (4,700) | (8,000) |
DMS | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Net revenue | 2,262,263 | 5,265,435 | ||
Reconciling items: | ||||
Restructuring and related charges | (500) | (3,300) | (2,100) | (7,900) |
Operating Segments | ||||
Reconciling items: | ||||
Income before income tax | 191,059 | 178,596 | 444,719 | 405,816 |
Operating Segments | EMS | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Net revenue | 3,804,727 | 2,870,488 | 7,307,830 | 5,732,548 |
Reconciling items: | ||||
Income before income tax | 88,654 | 95,283 | 172,749 | 180,993 |
Operating Segments | DMS | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Net revenue | 2,262,263 | 2,430,613 | 5,265,435 | 5,154,085 |
Reconciling items: | ||||
Income before income tax | 102,405 | 83,313 | 271,970 | 224,823 |
Segment Reconciling Items | ||||
Reconciling items: | ||||
Distressed Customer Charges | 0 | 14,706 | 0 | 14,706 |
Stock-based compensation expense and related charges | (15,697) | (15,039) | (32,946) | (67,784) |
Acquisition and integration charges | (12,785) | 0 | (21,675) | 0 |
Business interruption and impairment charges, net(1) | $ 0 | $ (4,002) | $ 2,860 | $ (11,356) |
Notes Payable and Long-Term D_3
Notes Payable and Long-Term Debt - Amounts Outstanding (Details) - USD ($) $ in Thousands | Feb. 28, 2019 | Aug. 31, 2018 |
Debt Instrument [Line Items] | ||
Long-term debt | $ 2,657,573 | $ 2,518,699 |
Less current installments of notes payable and long-term debt | 175,186 | 25,197 |
Notes payable and long-term debt, less current installments | $ 2,482,387 | 2,493,502 |
Senior Notes | 5.625% Senior Notes | ||
Debt Instrument [Line Items] | ||
Senior Notes, stated interest rate | 5.625% | |
Long-term debt | $ 398,441 | 397,995 |
Senior Notes | 4.700% Senior Notes | ||
Debt Instrument [Line Items] | ||
Senior Notes, stated interest rate | 4.70% | |
Long-term debt | $ 497,678 | 497,350 |
Senior Notes | 4.900% Senior Notes | ||
Debt Instrument [Line Items] | ||
Senior Notes, stated interest rate | 4.90% | |
Long-term debt | $ 298,935 | 298,814 |
Senior Notes | 3.950% Senior Notes | ||
Debt Instrument [Line Items] | ||
Senior Notes, stated interest rate | 3.95% | |
Long-term debt | $ 494,516 | 494,208 |
Revolving Credit Facility | Line of Credit | Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Long-term debt | 150,000 | 0 |
Unused borrowing capacity | 2,200,000 | |
Term Loan Facility | Line of Credit | Term Loan Facility | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 818,003 | $ 830,332 |
Notes Payable and Long-Term D_4
Notes Payable and Long-Term Debt - Narrative (Details) - Senior Notes $ in Millions | Feb. 28, 2019USD ($) |
4.900% Senior Notes | |
Debt Instrument [Line Items] | |
Senior Notes, stated interest rate | 4.90% |
Estimated fair value of senior notes | $ 304.6 |
5.625% Senior Notes | |
Debt Instrument [Line Items] | |
Senior Notes, stated interest rate | 5.625% |
Estimated fair value of senior notes | $ 410.5 |
4.700% Senior Notes | |
Debt Instrument [Line Items] | |
Senior Notes, stated interest rate | 4.70% |
Estimated fair value of senior notes | $ 508 |
3.950% Senior Notes | |
Debt Instrument [Line Items] | |
Senior Notes, stated interest rate | 3.95% |
Estimated fair value of senior notes | $ 463.3 |
Trade Accounts Receivable Sec_3
Trade Accounts Receivable Securitization and Sale Programs - Narrative (Details) - USD ($) | Oct. 01, 2018 | Feb. 28, 2018 | Feb. 28, 2019 | Feb. 28, 2018 | Oct. 09, 2018 |
Transfers and Servicing [Abstract] | |||||
Beneficial interest obtained in exchange for securitized receivables | $ 366,300,000 | $ 162,200,000 | $ 1,100,000,000 | ||
North America | |||||
Securitization or Asset-backed Financing Arrangement, Financial Asset for which Transfer is Accounted as Sale [Line Items] | |||||
Receivables pledged as collateral | 197,000,000 | ||||
Asset-backed Securities | Foreign | |||||
Securitization or Asset-backed Financing Arrangement, Financial Asset for which Transfer is Accounted as Sale [Line Items] | |||||
Total accounts receivable sold, outstanding | $ 734,200,000 | ||||
Deferred purchase price receivables | 335,500,000 | ||||
Cash due upon the settlement of securitization transactions | 398,700,000 | ||||
Cash paid upon settlement of securitization transactions | 25,200,000 | ||||
Trade accounts receivable sold | $ 373,500,000 | ||||
Guarantee liability | $ 0 | ||||
Asset-backed Securities | North America | |||||
Securitization or Asset-backed Financing Arrangement, Financial Asset for which Transfer is Accounted as Sale [Line Items] | |||||
Total accounts receivable sold, outstanding | $ 500,000,000 | ||||
Deferred purchase price receivables | 300,000,000 | ||||
Cash due upon the settlement of securitization transactions | $ 200,000,000 |
Trade Accounts Receivable Sec_4
Trade Accounts Receivable Securitization and Sale Programs - Asset-Backed Securitization Programs and Key Terms (Details) $ in Millions | Feb. 28, 2019USD ($) |
North American | |
Trade Accounts Receivable Securitization and Sale Program [Line Items] | |
Maximum Amount of Net Cash Proceeds | $ 390 |
Foreign | |
Trade Accounts Receivable Securitization and Sale Program [Line Items] | |
Maximum Amount of Net Cash Proceeds | $ 400 |
Trade Accounts Receivable Sec_5
Trade Accounts Receivable Securitization and Sale Programs - Asset-Backed Securitization Programs Amounts Recognized (Details) - Asset-Backed Securitization Programs - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Feb. 28, 2019 | Nov. 26, 2018 | Feb. 28, 2018 | Feb. 28, 2019 | Feb. 28, 2018 | Nov. 30, 2018 | |
Trade Accounts Receivable Securitization and Sale Program [Line Items] | ||||||
Trade accounts receivable sold | $ 1,078 | $ 650.3 | $ 2,057 | $ 1,828 | $ 4,449 | |
Cash proceeds received | 1,072 | $ 488.1 | 1,507 | 1,816 | 3,895 | |
Pre-tax losses on sale of receivables | 6 | 3 | 12 | 7 | ||
Deferred purchase price receivables | $ 0 | $ 547 | $ 0 | $ 547 | ||
Net cash received in securitization transactions | $ 13.9 |
Trade Accounts Receivable Sec_6
Trade Accounts Receivable Securitization and Sale Programs - Trade Accounts Receivable Sale Programs Key Terms (Details) | 3 Months Ended | 6 Months Ended | |||
Feb. 28, 2018USD ($) | Feb. 28, 2019USD ($) | Feb. 28, 2018USD ($) | Feb. 28, 2019CNY (¥) | Feb. 28, 2019USD ($) | |
Trade Accounts Receivable Securitization and Sale Program [Line Items] | |||||
Beneficial interest obtained in exchange for securitized receivables | $ 366,300,000 | $ 162,200,000 | $ 1,100,000,000 | ||
A | |||||
Trade Accounts Receivable Securitization and Sale Program [Line Items] | |||||
Maximum Amount of Net Cash Proceeds | $ 800,000,000 | ||||
Notice period to cancel receivable sale agreements | 15 days | ||||
B | |||||
Trade Accounts Receivable Securitization and Sale Program [Line Items] | |||||
Maximum Amount of Net Cash Proceeds | 150,000,000 | ||||
Notice period to cancel receivable sale agreements | 10 days | ||||
C | |||||
Trade Accounts Receivable Securitization and Sale Program [Line Items] | |||||
Maximum Amount of Net Cash Proceeds | ¥ | ¥ 800,000,000 | ||||
D | |||||
Trade Accounts Receivable Securitization and Sale Program [Line Items] | |||||
Maximum Amount of Net Cash Proceeds | 100,000,000 | ||||
Notice period to cancel receivable sale agreements | 30 days | ||||
E | |||||
Trade Accounts Receivable Securitization and Sale Program [Line Items] | |||||
Maximum Amount of Net Cash Proceeds | 50,000,000 | ||||
F | |||||
Trade Accounts Receivable Securitization and Sale Program [Line Items] | |||||
Maximum Amount of Net Cash Proceeds | 150,000,000 | ||||
Threshold period to cancel trade accounts receivable sale agreement before automatic extension | 30 days | ||||
G | |||||
Trade Accounts Receivable Securitization and Sale Program [Line Items] | |||||
Maximum Amount of Net Cash Proceeds | 50,000,000 | ||||
Notice period to cancel receivable sale agreements | 15 days | ||||
H | |||||
Trade Accounts Receivable Securitization and Sale Program [Line Items] | |||||
Maximum Amount of Net Cash Proceeds | 100,000,000 | ||||
Threshold period to cancel trade accounts receivable sale agreement before automatic extension | 30 days | ||||
I | |||||
Trade Accounts Receivable Securitization and Sale Program [Line Items] | |||||
Maximum Amount of Net Cash Proceeds | 100,000,000 | ||||
Threshold period to cancel trade accounts receivable sale agreement before automatic extension | 30 days | ||||
J | |||||
Trade Accounts Receivable Securitization and Sale Program [Line Items] | |||||
Maximum Amount of Net Cash Proceeds | $ 150,000,000 | ||||
Threshold period to cancel trade accounts receivable sale agreement before automatic extension | 30 days |
Trade Accounts Receivable Sec_7
Trade Accounts Receivable Securitization and Sale Programs - Trade Accounts Receivable Sale Programs Amounts Recognized (Details) - Trade Accounts Receivable Sale Programs - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Feb. 28, 2019 | Feb. 28, 2018 | Feb. 28, 2019 | Feb. 28, 2018 | |
Trade Accounts Receivable Securitization and Sale Program [Line Items] | ||||
Trade accounts receivable sold | $ 1,719 | $ 1,640 | $ 3,553 | $ 2,734 |
Cash proceeds received | 1,712 | 1,636 | 3,538 | 2,728 |
Pre-tax losses on sale of receivables | $ 7 | $ 4 | $ 15 | $ 6 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income - Change in AOCI, Net of Tax (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Feb. 28, 2019 | Feb. 28, 2018 | Feb. 28, 2019 | Feb. 28, 2018 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning Balance | $ 1,905,513 | $ 2,344,692 | $ 1,963,380 | $ 2,368,344 |
Other comprehensive (loss) income before reclassifications | (11,540) | |||
Amounts reclassified from AOCI | 17,686 | |||
Total other comprehensive income | 18,695 | 35,124 | 6,146 | 31,988 |
Ending Balance | 1,858,852 | 2,294,346 | 1,858,852 | 2,294,346 |
Foreign Currency Translation Adjustment | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning Balance | 7,431 | |||
Other comprehensive (loss) income before reclassifications | 12,912 | |||
Amounts reclassified from AOCI | 0 | |||
Total other comprehensive income | 12,912 | |||
Ending Balance | 20,343 | 20,343 | ||
Derivative Instruments | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning Balance | 8,116 | |||
Other comprehensive (loss) income before reclassifications | (16,083) | |||
Amounts reclassified from AOCI | 17,686 | |||
Total other comprehensive income | 1,603 | |||
Ending Balance | 9,719 | 9,719 | ||
Actuarial (Loss) Gain | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning Balance | (25,021) | |||
Other comprehensive (loss) income before reclassifications | 103 | |||
Amounts reclassified from AOCI | 0 | |||
Total other comprehensive income | 103 | |||
Ending Balance | (24,918) | (24,918) | ||
Prior Service Cost | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning Balance | (643) | |||
Other comprehensive (loss) income before reclassifications | 0 | |||
Amounts reclassified from AOCI | 0 | |||
Total other comprehensive income | 0 | |||
Ending Balance | (643) | (643) | ||
Available for Sale Securities | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning Balance | (9,282) | |||
Other comprehensive (loss) income before reclassifications | (8,472) | |||
Amounts reclassified from AOCI | 0 | |||
Total other comprehensive income | (8,472) | |||
Ending Balance | (17,754) | (17,754) | ||
AOCI Attributable to Parent | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning Balance | (31,948) | 51,484 | (19,399) | 54,620 |
Ending Balance | $ (13,253) | $ 86,608 | $ (13,253) | $ 86,608 |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Income - Reclassification from AOCI (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Feb. 28, 2019 | Feb. 28, 2018 | Feb. 28, 2019 | Feb. 28, 2018 | Feb. 29, 2020 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | |||||
Cost of revenue | $ 5,612,116 | $ 4,903,968 | $ 11,598,741 | $ 10,020,215 | |
Interest expense | (46,160) | (37,796) | (88,812) | (74,042) | |
Total amounts | 100,826 | 86,262 | 265,713 | 193,701 | |
Income tax expense | 33,219 | 48,734 | 74,032 | 92,254 | |
Reclassification out of AOCI | Unrealized (gains) losses on derivative instruments: | |||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | |||||
Total amounts | 3,501 | (9,893) | 17,686 | (15,084) | |
Income tax expense | 3,500 | 7,000 | |||
Reclassification out of AOCI | Unrealized (gains) losses on derivative instruments: | Scenario, Forecast | |||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | |||||
Cost of revenue | $ 5,900 | ||||
Reclassification out of AOCI | Unrealized (gains) losses on derivative instruments: | Foreign exchange contracts | |||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | |||||
Cost of revenue | 3,931 | (7,381) | 18,546 | (10,060) | |
Reclassification out of AOCI | Unrealized (gains) losses on derivative instruments: | Interest rate contracts | |||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | |||||
Interest expense | $ (430) | $ (2,512) | $ (860) | $ (5,024) |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | Feb. 28, 2019USD ($) |
Fiscal Years 2009 Through 2011 | |
Loss Contingencies Line Items | |
Potential additional income tax payment due | $ 28.6 |
Fiscal Years 2012 through 2014 | |
Loss Contingencies Line Items | |
Potential additional income tax payment due | $ 5.3 |
Derivative Financial Instrume_3
Derivative Financial Instruments and Hedging Activities - Narrative (Details) - USD ($) | 3 Months Ended | ||||
Feb. 28, 2018 | Feb. 28, 2019 | Nov. 30, 2018 | Aug. 31, 2018 | Aug. 31, 2016 | |
Interest rate swaps | Cash flow hedging | |||||
Derivative [Line Items] | |||||
Aggregate notional amount | $ 200,000,000 | $ 350,000,000 | |||
Forward contracts | |||||
Derivative [Line Items] | |||||
Aggregate notional amount | $ 3,900,000,000 | $ 3,400,000,000 | |||
Forward contracts | Forward foreign exchange contracts | Cash flow hedging | |||||
Derivative [Line Items] | |||||
Aggregate notional amount | $ 251,700,000 | 293,400,000 | |||
Term Loan Facility | Cash flow hedging | |||||
Derivative [Line Items] | |||||
Aggregate notional amount | 200,000,000 | ||||
Anticipated debt issuance | Cash flow hedging | |||||
Derivative [Line Items] | |||||
Aggregate notional amount | $ 200,000,000 | ||||
Fair value of cash received for settlement of swaps | $ 17,200,000 | ||||
Senior Notes | 3.950% Senior Notes | |||||
Derivative [Line Items] | |||||
Senior Notes, stated interest rate | 3.95% | ||||
Term Loan Facility | Line of Credit | 2017 Term Loan Facility | |||||
Derivative [Line Items] | |||||
Maximum borrowing capacity | $ 500,000,000 | ||||
Term Loan Facility | Line of Credit | 2018 Term Loan Facility | |||||
Derivative [Line Items] | |||||
Maximum borrowing capacity | $ 350,000,000 |
Derivative Financial Instrume_4
Derivative Financial Instruments and Hedging Activities - Fair Value of Derivative Instruments Located on Consolidated Balance Sheets (Details) - Forward foreign exchange contracts - USD ($) $ in Thousands | Feb. 28, 2019 | Aug. 31, 2018 |
Designated as Hedging Instruments | Prepaid expenses and other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Forward foreign exchange contracts, Asset Derivatives | $ 6,560 | $ 225 |
Designated as Hedging Instruments | Accrued expenses | ||
Derivatives, Fair Value [Line Items] | ||
Forward foreign exchange contracts, Liability Derivatives | 1,104 | 13,364 |
Derivatives Not Designated as Hedging Instruments Under ASC 815 | Prepaid expenses and other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Forward foreign exchange contracts, Asset Derivatives | 24,422 | 10,125 |
Derivatives Not Designated as Hedging Instruments Under ASC 815 | Accrued expenses | ||
Derivatives, Fair Value [Line Items] | ||
Forward foreign exchange contracts, Liability Derivatives | $ 3,602 | $ 46,171 |
Derivative Financial Instrume_5
Derivative Financial Instruments and Hedging Activities - Fair Value of Derivative Instruments Recorded on Consolidated Statements of Operations (Details) - Cost of revenue - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Feb. 28, 2019 | Feb. 28, 2018 | Feb. 28, 2019 | Feb. 28, 2018 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Foreign currency losses | $ 57,100 | $ 41,700 | $ 52,600 | $ 35,500 |
Forward foreign exchange contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain Recognized in Net Income on Derivatives | $ 49,794 | $ 48,933 | $ 42,808 | $ 45,744 |
Restructuring and Related Cha_3
Restructuring and Related Charges - Restructuring and Related Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Feb. 28, 2019 | Feb. 28, 2018 | Feb. 28, 2019 | Feb. 28, 2018 | |
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and related charges | $ 817 | $ 5,427 | $ 6,842 | $ 16,815 |
Employee severance and benefit costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and related charges | 3,768 | 2,012 | 8,947 | 5,989 |
Lease costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and related charges | 0 | 7 | 9 | 7 |
Asset write-off costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and related charges | (3,396) | 2,451 | (3,212) | 9,263 |
Other related costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and related charges | 445 | 957 | 1,098 | 1,556 |
EMS | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and related charges | 300 | 2,100 | 4,700 | 8,000 |
DMS | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and related charges | $ 500 | $ 3,300 | 2,100 | 7,900 |
Corporate and Other [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and related charges | $ 0 | $ 900 |
Restructuring and Related Cha_4
Restructuring and Related Charges - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Feb. 28, 2019 | Feb. 28, 2018 | Feb. 28, 2019 | Feb. 28, 2018 | |
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and related charges | $ 817 | $ 5,427 | $ 6,842 | $ 16,815 |
2017 Restructuring Plan | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total pre-tax restructuring and other related costs expected to be recognized | 195,000 | 195,000 | ||
Restructuring related charges to date | 187,100 | 187,100 | ||
EMS | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and related charges | 300 | 2,100 | 4,700 | 8,000 |
DMS | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and related charges | $ 500 | $ 3,300 | 2,100 | 7,900 |
Corporate and Other [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and related charges | $ 0 | $ 900 |
Restructuring and Related Cha_5
Restructuring and Related Charges - Liability Activity, Primarily Associated with 2017 Restructuring Plan (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Feb. 28, 2019 | Feb. 28, 2018 | Feb. 28, 2019 | Feb. 28, 2018 | |
Restructuring Reserve [Roll Forward] | ||||
Liability, Beginning Balance | $ 21,337 | |||
Restructuring and related charges | $ 817 | $ 5,427 | 6,842 | $ 16,815 |
Asset write-off charge and other non-cash activity | 2,965 | |||
Cash payments | (19,267) | |||
Liability, Ending Balance | 11,877 | 11,877 | ||
Employee severance and benefit costs | ||||
Restructuring Reserve [Roll Forward] | ||||
Liability, Beginning Balance | 18,131 | |||
Restructuring and related charges | 3,768 | 2,012 | 8,947 | 5,989 |
Asset write-off charge and other non-cash activity | (240) | |||
Cash payments | (17,804) | |||
Liability, Ending Balance | 9,034 | 9,034 | ||
Lease costs | ||||
Restructuring Reserve [Roll Forward] | ||||
Liability, Beginning Balance | 2,684 | |||
Restructuring and related charges | 0 | 7 | 9 | 7 |
Asset write-off charge and other non-cash activity | 0 | |||
Cash payments | (303) | |||
Liability, Ending Balance | 2,390 | 2,390 | ||
Asset write-off costs | ||||
Restructuring Reserve [Roll Forward] | ||||
Liability, Beginning Balance | 0 | |||
Restructuring and related charges | (3,396) | $ 2,451 | (3,212) | $ 9,263 |
Asset write-off charge and other non-cash activity | 3,212 | |||
Cash payments | 0 | |||
Liability, Ending Balance | 0 | 0 | ||
Other Related Costs | ||||
Restructuring Reserve [Roll Forward] | ||||
Liability, Beginning Balance | 522 | |||
Restructuring and related charges | 1,098 | |||
Asset write-off charge and other non-cash activity | (7) | |||
Cash payments | (1,160) | |||
Liability, Ending Balance | $ 453 | $ 453 |
Business Acquisitions - Fiscal
Business Acquisitions - Fiscal 2019 (Details) - JJMD $ in Millions | Feb. 25, 2019USD ($) |
Business Acquisition [Line Items] | |
Amount of cash paid for business acquisitions | $ 80.8 |
Assets acquired | 97.8 |
Liabilities assumed | $ 17 |
Business Acquisitions - Fisca_2
Business Acquisitions - Fiscal 2018 (Details) - True-Tech $ in Millions | Sep. 01, 2017USD ($) |
Business Acquisition [Line Items] | |
Amount of cash paid for business acquisitions | $ 95.9 |
Assets acquired | 114.7 |
Intangible assets acquired | 25.9 |
Goodwill | 22.6 |
Liabilities assumed | $ 18.8 |
New Accounting Guidance (Detail
New Accounting Guidance (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Feb. 28, 2019 | Feb. 28, 2018 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Net cash provided by investing activities | $ (389,608) | $ 755,881 |
Net cash used in operating activities | (107,765) | 863,999 |
Accounting Standards Update 2016-15 [Member] | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Net cash provided by investing activities | 96,800 | 1,200,000 |
Net cash used in operating activities | $ 96,800 | $ 1,200,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Feb. 28, 2019 | Feb. 28, 2018 | Feb. 28, 2019 | Feb. 28, 2018 | Aug. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||||
Tax Cuts and Jobs Act, provisional income tax expense (benefit) | $ (13.3) | $ 142.3 | |||
Tax Cuts and Jobs Act, net provisional income tax expense | 65.9 | ||||
Tax Cuts and Jobs Act, re-measurement of U.S. deferred tax | (10.5) | ||||
Tax Cuts and Jobs Act, foreign tax impact of change in indefinite reinvestment assertion | $ 85 | ||||
U.S. federal statutory rate | 21.00% | 25.70% | |||
Effective tax rate | 33.00% | 56.50% | 27.90% | 47.60% | |
Tax Cuts and Jobs Act, provisional income tax expense | $ 30.9 | ||||
Reduction in unrecognized tax benefits for the period | $ 16.1 |
Revenue - Narrative (Details)
Revenue - Narrative (Details) $ in Millions | Sep. 01, 2018USD ($) |
ASU 2014-09 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |
Cumulative effect adjustment for adoption of new accounting standards | $ 42.6 |
Revenue - Summary of Cumulative
Revenue - Summary of Cumulative Effect Adjustment (Details) - USD ($) $ in Thousands | Feb. 28, 2019 | Sep. 01, 2018 | Aug. 31, 2018 |
Assets | |||
Contract assets | $ 832,889 | $ 591,616 | $ 0 |
Inventories, net | 3,248,273 | 2,996,435 | 3,457,706 |
Prepaid expenses and other current assets | 532,223 | 1,103,729 | 1,141,000 |
Deferred income taxes | 194,015 | 209,927 | 218,252 |
Liabilities | |||
Contract liabilities | 583,300 | 690,142 | |
Deferred income | 0 | 0 | 691,365 |
Other accrued expenses | 1,620,683 | 1,041,371 | 1,000,979 |
Deferred income taxes | 117,547 | 117,362 | 114,385 |
Equity | |||
Retained earnings | 1,966,100 | 1,802,699 | 1,760,097 |
Balance without the adoption of ASU 2014-09 | |||
Assets | |||
Contract assets | 0 | 0 | |
Inventories, net | 3,943,077 | 3,457,706 | |
Prepaid expenses and other current assets | 537,801 | 1,141,000 | |
Deferred income taxes | 198,444 | 218,252 | |
Liabilities | |||
Contract liabilities | 0 | 0 | |
Deferred income | 571,149 | 691,365 | |
Other accrued expenses | 1,616,750 | 1,000,979 | |
Deferred income taxes | 113,426 | 114,385 | |
Equity | |||
Retained earnings | $ 1,858,227 | $ 1,760,097 | |
Adjustments due to adoption of ASU 2014-09 | ASU 2014-09 | |||
Assets | |||
Contract assets | 591,616 | ||
Inventories, net | (461,271) | ||
Prepaid expenses and other current assets | (37,271) | ||
Deferred income taxes | (8,325) | ||
Liabilities | |||
Contract liabilities | 690,142 | ||
Deferred income | (691,365) | ||
Other accrued expenses | 40,392 | ||
Deferred income taxes | 2,977 | ||
Equity | |||
Retained earnings | $ 42,602 |
Revenue - Effect of New Revenue
Revenue - Effect of New Revenue Guidance, Impact on Income Statement (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Feb. 28, 2019 | Feb. 28, 2018 | Feb. 28, 2019 | Feb. 28, 2018 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Net revenue | $ 6,066,990 | $ 5,301,101 | $ 12,573,265 | $ 10,886,633 |
Cost of revenue | 5,612,116 | 4,903,968 | 11,598,741 | 10,020,215 |
Operating income | 153,983 | 129,532 | 370,693 | 275,286 |
Income tax expense | 33,219 | 48,734 | 74,032 | 92,254 |
Net income | 67,607 | $ 37,528 | 191,681 | $ 101,447 |
Balance without the adoption of ASU 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Net revenue | 5,985,439 | 12,229,174 | ||
Cost of revenue | 5,556,714 | 11,317,170 | ||
Operating income | 127,835 | 308,174 | ||
Income tax expense | 36,867 | 76,783 | ||
Net income | $ 37,811 | $ 126,411 |
Revenue - Effect of New Reven_2
Revenue - Effect of New Revenue Guidance, Impact on Balance Sheet (Details) - USD ($) $ in Thousands | Feb. 28, 2019 | Sep. 01, 2018 | Aug. 31, 2018 |
ASSETS | |||
Contract assets | $ 832,889 | $ 591,616 | $ 0 |
Inventories, net | 3,248,273 | 2,996,435 | 3,457,706 |
Prepaid expenses and other current assets | 532,223 | 1,103,729 | 1,141,000 |
Deferred income taxes | 194,015 | 209,927 | 218,252 |
Liabilities | |||
Contract liabilities | 583,300 | 690,142 | |
Deferred income | 0 | 0 | 691,365 |
Other accrued expenses | 1,620,683 | 1,041,371 | 1,000,979 |
Deferred income taxes | 117,547 | 117,362 | 114,385 |
Equity | |||
Retained earnings | 1,966,100 | $ 1,802,699 | 1,760,097 |
Balance without the adoption of ASU 2014-09 | |||
ASSETS | |||
Contract assets | 0 | 0 | |
Inventories, net | 3,943,077 | 3,457,706 | |
Prepaid expenses and other current assets | 537,801 | 1,141,000 | |
Deferred income taxes | 198,444 | 218,252 | |
Liabilities | |||
Contract liabilities | 0 | 0 | |
Deferred income | 571,149 | 691,365 | |
Other accrued expenses | 1,616,750 | 1,000,979 | |
Deferred income taxes | 113,426 | 114,385 | |
Equity | |||
Retained earnings | $ 1,858,227 | $ 1,760,097 |
Revenue - Revenues Disaggregate
Revenue - Revenues Disaggregated by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Feb. 28, 2019 | Feb. 28, 2018 | Feb. 28, 2019 | Feb. 28, 2018 | |
Disaggregation of Revenue [Line Items] | ||||
Net revenue | $ 6,066,990 | $ 5,301,101 | $ 12,573,265 | $ 10,886,633 |
Point in time | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | 2,301,695 | 4,824,007 | ||
Over time | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | 3,765,295 | 7,749,258 | ||
EMS | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | 3,804,727 | 7,307,830 | ||
EMS | Point in time | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | 836,863 | 1,257,524 | ||
EMS | Over time | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | 2,967,864 | 6,050,306 | ||
DMS | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | 2,262,263 | 5,265,435 | ||
DMS | Point in time | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | 1,464,832 | 3,566,483 | ||
DMS | Over time | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | $ 797,431 | $ 1,698,952 |
Revenue - Contract Balances (De
Revenue - Contract Balances (Details) | 6 Months Ended |
Feb. 28, 2019USD ($) | |
Revenue from Contract with Customer [Abstract] | |
Impairment costs on contract assets | $ 0 |
Revenue recognized during period that was included in contract liability balance | $ 267,000,000 |
Revenue - Fulfillment Costs (De
Revenue - Fulfillment Costs (Details) | 6 Months Ended |
Feb. 28, 2019USD ($) | |
Capitalized Contract Cost [Line Items] | |
Capitalized costs | $ 51,100,000 |
Amortization | 19,900,000 |
Impairment costs | $ 0 |
Minimum | |
Capitalized Contract Cost [Line Items] | |
Capitalized cost, amortization period | 1 year |
Maximum | |
Capitalized Contract Cost [Line Items] | |
Capitalized cost, amortization period | 3 years |