JABIL INC. Overview
We are one of the leading providers of worldwide manufacturing services and solutions. We provide comprehensive electronics design, production and product management services to companies in various industries and end markets. Our services enable our customers to reduce manufacturing costs, improve supply-chain management, reduce inventory obsolescence, lower transportation costs and reduce product fulfillment time. Our manufacturing and supply chain management services and solutions include innovation, design, planning, fabrication and assembly, delivery and managing the flow of resources and products. We derive substantially all of our revenue from production and product management services (collectively referred to as "manufacturing services"), which encompass the act of producing tangible components that are built to customer specifications and are then provided to the customer. We serve our customers primarily through dedicated business units that combine highly automated, continuous flow manufacturing with advanced electronic design and design for manufacturability. We depend, and expect to continue to depend, upon a relatively small number of customers for a significant percentage of our net revenue, which in turn depends upon their growth, viability and financial stability. Based on net revenue, for the three months endedNovember 30, 2019 , our largest customers include Amazon.com, Inc., Apple, Inc., Cisco Systems, Inc., GoPro, Inc., Hewlett-Packard Company, Ingenico Group, Johnson and Johnson,LM Ericsson Telephone Company , NetApp, Inc. and SolarEdge Technologies Inc.. We conduct our operations in facilities that are located worldwide, including but not limited to,China ,Ireland ,Malaysia ,Mexico ,Singapore andthe United States . We derived a substantial majority, 81.8% of net revenue from our international operations for the three months endedNovember 30, 2019 . Our global manufacturing production sites allow customers to manufacture products simultaneously in the optimal locations for their products. Our global presence is key to assessing and executing on our business opportunities. We have two reporting segments: Electronics Manufacturing Services ("EMS") and Diversified Manufacturing Services ("DMS"), which are organized based on the economic profiles of the services performed, including manufacturing capabilities, market strategy, margins, return on capital and risk profiles. Our EMS segment is focused around leveraging IT, supply chain design and engineering, technologies largely centered on core electronics, utilizing our large scale manufacturing infrastructure and our ability to serve a broad range of end markets. Our EMS segment is a high volume business that produces product at a quicker rate (i.e. cycle time) and in larger quantities and includes customers primarily in the automotive and transportation, capital equipment, cloud, computing and storage, defense and aerospace, industrial and energy, networking and telecommunications, print and retail, and smart home and appliances industries. Our DMS segment is focused on providing engineering solutions, with an emphasis on material sciences, technologies and healthcare. Our DMS includes customers primarily in the edge devices and accessories, healthcare, mobility and packaging industries. We monitor the current economic environment and its potential impact on both the customers we serve as well as our end-markets and closely manage our costs and capital resources so that we can respond appropriately as circumstances change. Summary of Results The following table sets forth, for the three months endedNovember 30, 2019 and 2018, certain key operating results and other financial information (in thousands, except per share data): Three months ended November 30, 2019 November 30, 2018 Net revenue $ 7,505,698 $ 6,506,275 Gross profit $ 553,839 $ 519,650 Operating income $ 152,779 $ 216,710 Net income attributable to Jabil Inc. $ 40,422 $ 123,600 Earnings per share-basic $ 0.26 $ 0.77 Earnings per share-diluted $ 0.26 $ 0.76 Key Performance Indicators 24
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Management regularly reviews financial and non-financial performance indicators
to assess the Company's operating results. The following table sets forth, for
the quarterly periods indicated, certain of management's key financial
performance indicators:
Three months ended
November 30, 2019 August 31, 2019 May 31, 2019 February 28, 2019
Sales cycle(1) 23 days 19 days 27 days 25 days
Inventory turns (annualized)(2) 6 turns 6 turns 6 turns 6 turns
Days in accounts receivable(3) 43 days 38 days 39 days 38 days
Days in inventory(2)(4) 57 days 58 days 64 days 65 days
Days in accounts payable(5) 77 days 77 days 76 days 78 days
(1) The sales cycle is calculated as the sum of days in accounts receivable and
days in inventory, less the days in accounts payable; accordingly, the
variance in the sales cycle quarter over quarter is a direct result of
changes in these indicators.
(2) Inventory turns and days in inventory are calculated based on inventory and
contract asset balances.
(3) During the three months ended November 30, 2019 , the increase in days inaccounts receivable from the prior sequential quarter was primarily due to
an increase in accounts receivable, primarily driven by higher sales and
timing of collections.
(4) During the three months ended August 31, 2019 , the decrease in days ininventory from the prior sequential quarter was primarily due to increased
sales activity during the quarter.
(5) During the three months ended May 31, 2019 , the decrease in days in
accounts payable from the prior sequential quarter was primarily due totiming of purchases and cash payments for purchases during the quarter.
Critical Accounting Policies and Estimates The preparation of our Condensed Consolidated Financial Statements and related disclosures in conformity withU.S. generally accepted accounting principles ("U.S. GAAP") requires management to make estimates and judgments that affect our reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. On an on-going basis, we evaluate our estimates and assumptions based upon historical experience and various other factors and circumstances. Management believes that our estimates and assumptions are reasonable under the circumstances; however, actual results may vary from these estimates and assumptions under different future circumstances. For further discussion of our significant accounting policies, refer to Note 1 - "Description of Business and Summary of Significant Accounting Policies" to the Consolidated Financial Statements and "Management's Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies and Estimates" in our Annual Report on Form 10-K for the fiscal year endedAugust 31, 2019 . Recent Accounting Pronouncements See Note 18 - "New Accounting Guidance" to the Condensed Consolidated Financial Statements for a discussion of recent accounting guidance. Results of OperationsNet Revenue Generally, we assess revenue on a global customer basis regardless of whether the growth is associated with organic growth or as a result of an acquisition. Accordingly, we do not differentiate or separately report revenue increases generated by acquisitions as opposed to existing business. In addition, the added cost structures associated with our acquisitions have historically been relatively insignificant when compared to our overall cost structure. The distribution of revenue across our segments has fluctuated, and will continue to fluctuate, as a result of numerous factors, including the following: fluctuations in customer demand; efforts to diversify certain portions of our business; business growth from new and existing customers; specific product performance; and any potential termination, or substantial winding down, of significant customer relationships. Three months ended (dollars in millions) November 30, 2019 November 30, 2018 Change Net revenue $ 7,505.7 $ 6,506.3 15.4 % 25
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Table of Contents Net revenue increased during the three months endedNovember 30, 2019 , compared to the three months endedNovember 30, 2018 . Specifically, the EMS segment revenues increased 26% primarily due to (i) a 27% increase in revenues from existing customers within our cloud business, (ii) a 3% increase in revenues from existing customers within our print and retail business, (iii) a 2% increase in revenues from existing customers within our automotive and transportation business and (iv) a 2% increase in revenues spread across various industries within the EMS segment. The increase is partially offset by (i) a 6% decrease from existing customers within our networking and telecommunications business and (ii) a 2% decrease from existing customers within our computing and storage business and our capital equipment business, which we expect to remain weak into the second half of calendar year 2020. DMS segment revenues increased 3% due to a 12% increase in revenues from new and existing customers in our healthcare and packaging businesses. The increase is partially offset by a 9% decrease in revenue from customers within our mobility and edge devices and accessories businesses as a result of decreased end user product demand and end market dynamics. The following table sets forth, for the periods indicated, revenue by segment expressed as a percentage of net revenue: Three months ended November 30, 2019 November 30, 2018 EMS 59 % 54 % DMS 41 % 46 % Total 100 % 100 %
The following table sets forth, for the periods indicated, foreign source revenue expressed as a percentage of net revenue:
Three months ended
November 30, 2019 November 30, 2018
Foreign source revenue 81.8 % 92.7 %
Gross Profit
Three months ended
(dollars in millions)
$ 553.8 $ 519.7
Percent of net revenue 7.4 % 8.0 %
For the three months ended November 30, 2019 , gross profit for our EMS segment
decreased as a percent of net revenue due to product mix and continued weakness
in the capital equipment business. This decrease was partially offset by an
increase in gross profit as a percent of net revenue in our DMS segment due to
improved profitability across the various businesses.
Selling, General and Administrative
Three months ended
(dollars in millions) November 30, 2019 November 30, 2018 Change
Selling, general and administrative $ 328.9 $
278.1
Selling, general and administrative expenses increased during the three months endedNovember 30, 2019 , compared to the three months endedNovember 30, 2018 . The increase is predominantly due to (i) a$30.6 million increase in salary and salary related expenses and other costs primarily to support new business growth and development and our strategic collaboration with a healthcare company, (ii) a$7.2 million increase in acquisition and integration charges related to our strategic collaboration with a healthcare company and (iii) a$13.0 million increase in stock-based compensation expense primarily driven by an appreciation in our stock price during the three months endedNovember 30, 2019 . Research and Development 26
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Three months ended
(dollars in millions)
10.8 $ 11.1
Percent of net revenue 0.1 % 0.2 %
Research and development expenses remained relatively consistent as a percentage
of net revenue during the three months ended November 30, 2019 , compared to the
three months ended November 30, 2018 .
Amortization of Intangibles
Three months ended
(dollars in millions)
$ 7.6 $ 8.5
Amortization of intangibles increased during the three months ended November 30,
2019 , compared to the three months ended November 30, 2018 , primarily driven by
amortization related to the Nypro trade name, which was reclassified to a
definite-lived intangible asset during the fourth quarter of fiscal year 2019 as
a result of our decision to rebrand. As such, this trade name was assigned a
four-year estimated useful life and is being amortized on an accelerated basis.
Restructuring and Related Charges
Following is a summary of the Company's restructuring and related charges (in
millions):
Three months ended
November 30,
2019(2) November 30, 2018(3)
Employee severance and benefit costs $ 18.8 $ 5.2
Lease costs 0.3 -
Asset write-off costs 16.3 0.2
Other costs 9.9 0.6
Total restructuring and related charges(1) $ 45.3 $ 6.0
(1) Includes
million and
all restructuring and related charges are cash costs.
(2) Primarily relates to the 2020 Restructuring Plan.
(3) Primarily relates to the 2017 Restructuring Plan.
2020 Restructuring Plan OnSeptember 20, 2019 , our Board of Directors formally approved a restructuring plan to realign our global capacity support infrastructure, particularly in our mobility footprint inChina , in order to optimize organizational effectiveness. This action includes headcount reductions and capacity realignment (the "2020 Restructuring Plan"). The 2020 Restructuring Plan reflects our intention only and restructuring decisions, and the timing of such decisions, at certain locations are still subject to consultation with our employees and their representatives. We currently expect to recognize approximately$85.0 million in pre-tax restructuring and other related costs primarily over the course of our fiscal year 2020. The charges relating to the 2020 Restructuring Plan are currently expected to result in cash expenditures in the range of approximately$30.0 million to$40.0 million that will be payable over the course of our fiscal years 2020 and 2021. The exact timing of these charges and cash outflows, as well as the estimated cost ranges by category type, have not been finalized. This information will be subject to the finalization of timetables for the transition of functions, consultation with employees and their representatives as well as the statutory severance requirements of the particular jurisdictions impacted, and the amount and timing of the actual charges may vary due to a variety of factors. Our estimates for the charges discussed above exclude any potential income tax effects. The 2020 Restructuring Plan, once complete, is expected to yield annualized cost savings beginning in fiscal year 2021 of approximately$40.0 million . We expect cost savings of$25.0 million during fiscal year 2020. 27
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See Note 12 - "Restructuring and Related Charges" to the Condensed Consolidated
Financial Statements for further discussion of restructuring and related charges
for the 2020 Restructuring Plan.
Other Expense
Three months ended
(dollars in millions)
$ 13.6 $ (2.4 )
Other expense decreased for the three months ended November 30, 2019 , compared
to the three months ended November 30, 2018 , primarily due to: (i) $2.3 million
related to a decrease in fees associated with the utilization of the trade
accounts receivable sales programs and fees incurred for the amendment of the
foreign asset-backed securitization program and the new North American
asset-backed securitization program in fiscal year 2019 and (ii) $1.7 million
related to lower net periodic benefit costs. The decrease was partially offset
by $1.6 million of other expense.
Interest Income
Three months ended
(dollars in millions)
$ 4.4 $ 1.5 Interest income remained relatively consistent during the three months ended
Three months ended
(dollars in millions)
$ 42.7 $ 2.2 Interest expense increased during the three months ended
Three months ended
November 30, 2019 November 30, 2018 Change
Effective income tax rate 60.3 % 24.8 % 35.5 %
The effective income tax rate increased for the three months ended November 30,
2019 , compared to the three months ended November 30, 2018 , primarily due to:
(i) $13.3 million of tax benefit for the three months ended November 30, 2018
related to the Tax Cuts and Jobs Act of 2017 (the "Tax Act") adjustments and
(ii) increased restructuring charges with minimal related tax benefit for the
three months ended November 30, 2019 .
Non-GAAP (Core) Financial Measures
The following discussion and analysis of our financial condition and results of
operations include certain non-GAAP financial measures as identified in the
reconciliations below. The non-GAAP financial measures disclosed herein do not
have standard meaning and may vary from the non-GAAP financial measures used by
other companies or how we may calculate those measures in other instances from
time to time. Non-GAAP financial measures should not be considered a substitute
for, or superior to, measures of financial performance prepared in accordance
with U.S. GAAP. Also, our "core" financial measures should not be construed as
an inference by us that our future results will be unaffected by those items
that are excluded from our "core" financial measures.
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Management believes that the non-GAAP "core" financial measures set forth below are useful to facilitate evaluating the past and future performance of our ongoing manufacturing operations over multiple periods on a comparable basis by excluding the effects of the 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, other than temporary impairment on securities, restructuring of securities loss, income (loss) from discontinued operations, gain (loss) on sale of discontinued operations and certain other expenses, net of tax and certain deferred tax valuation allowance charges. Among other uses, management uses non-GAAP "core" financial measures to make operating decisions, assess business performance and as a factor in determining certain employee performance when evaluating incentive compensation. We determine the tax effect of the items excluded from "core" earnings and "core" diluted earnings per share based upon evaluation of the statutory tax treatment and the applicable tax rate of the jurisdiction in which the pre-tax items were incurred, and for which realization of the resulting tax benefit, if any, is expected. In certain jurisdictions where we do not expect to realize a tax benefit (due to existing tax incentives or a history of operating losses or other factors resulting in a valuation allowance related to deferred tax assets), a reduced or 0% tax rate is applied. We are reporting "core" operating income, "core" earnings and adjusted free cash flow to provide investors with an additional method for assessing operating income and earnings, by presenting what we believe are our "core" manufacturing operations. A significant portion (based on the respective values) of the items that are excluded for purposes of calculating "core" operating income and "core" earnings also impacted certain balance sheet assets, resulting in a portion of an asset being written off without a corresponding recovery of cash we may have previously spent with respect to the asset. In the case of restructuring and related charges, we may make associated cash payments in the future. In addition, although, for purposes of calculating "core" operating income and "core" earnings, we exclude stock-based compensation expense (which we anticipate continuing to incur in the future) because it is a non-cash expense, the associated stock issued may result in an increase in our outstanding shares of stock, which may result in the dilution of our stockholders' ownership interest. We encourage you to consider these matters when evaluating the utility of these non-GAAP financial measures. Adjusted free cash flow is defined as net cash provided by (used in) operating activities plus cash receipts on sold receivables less net capital expenditures (acquisition of property, plant and equipment less proceeds and advances from the sale of property, plant and equipment). We report adjusted free cash flow as we believe this non-GAAP financial measure is useful to investors in measuring our ability to generate cash internally and fund future growth and to provide a return to shareholders. Included in the tables below are reconciliations of the non-GAAP financial measures to the most directly comparableU.S. GAAP financial measures as provided in our Condensed Consolidated Financial Statements: Reconciliation ofU.S. GAAP Financial Results to Non-GAAP Measures 29
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Three months ended
(in thousands, except for per share data) November 30, 2019 November 30, 2018
Operating income (U.S. GAAP) $ 152,779 $ 216,710
Amortization of intangibles 16,140 7,646
Stock-based compensation expense and related charges 30,223 17,249
Restructuring and related charges 45,251 6,025
Distressed customer charge (1) 14,963 -
Net periodic benefit cost (2) 1,825 -
Business interruption and impairment charges, net(3) - (2,860 )
Acquisition and integration charges(4) 16,134 8,890
Adjustments to operating income 124,536 36,950
Core operating income (Non-GAAP) $ 277,315 $ 253,660
Net income attributable to Jabil Inc. (U.S. GAAP) $ 40,422 $ 123,600
Adjustments to operating income 124,536 36,950
Net periodic benefit cost(2) (1,825 ) -
Adjustments for taxes(5) 497 (13,743 )
Core earnings (Non-GAAP) $ 163,630 $ 146,807
Diluted earnings per share (U.S. GAAP) $ 0.26 $ 0.76
Diluted core earnings per share (Non-GAAP) $ 1.05 $ 0.90
Diluted weighted average shares outstanding used in
the calculation of earnings per share (
156,462 163,670
(1) Charges relate to accounts receivable and inventory charges for certain
distressed customers primarily in the renewable energy sector.
(2) Following the adoption of Accounting Standards Update 2017-07, Compensation
- Retirement Benefits (Topic 715) ("ASU 2017-07"), pension service cost is
recognized in cost of revenue and all other components of net periodic
benefit cost, including return on plan assets, are presented in other
expense. We are reclassifying the pension components in other expense to
core operating income as we assess operating performance, inclusive of all
components of net periodic benefit cost, with the related revenue. There is
no impact to core earnings or diluted core earnings per share for this
adjustment.
(3) Charges, net of insurance proceeds of
ended November 30, 2018 , relate to business interruptions and asset
impairment costs associated with damage from Hurricane Maria, which
impacted our operations in Cayey, Puerto Rico .
(4) Charges related to our strategic collaboration with Johnson & Johnson
Medical Devices Companies ("JJMD").
(5) The three months ended
tax benefit for the effects of the Tax Act.
Adjusted Free Cash Flow
Three months ended
(in thousands) November 30, 2019
$ 20,944 $ (91,693 )
Cash receipts on sold receivables - 96,846
Acquisition of property, plant and equipment (230,393 ) (231,513 )
Proceeds and advances from sale of property, plant and equipment
23,209 10,227
Adjusted free cash flow (Non-GAAP) $ (186,240 ) $ (216,133 )
(1) In fiscal year 2019, the adoption of Accounting Standards Update ("ASU")
2016-15, "Classification of Certain Cash Receipts and Cash Payments"
resulted in a reclassification of cash flows from operating activities to
investing activities for cash receipts for the deferred purchase price
receivable on asset-backed securitization transactions. The adoption of
this standard does not reflect a change in the underlying business oractivities. The effects of this change are applied retrospectively to all
prior periods.
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Acquisitions and Expansion
During fiscal year 2018, the Company and Johnson & Johnson Medical Devices
Companies ("JJMD") entered into a Framework Agreement to form a strategic
collaboration and expand our existing relationship. The strategic collaboration
expands our medical device manufacturing portfolio, diversification and
capabilities.
On February 25, 2019 and April 29, 2019 , under the terms of the Framework
Agreement, we completed the initial and second closings, respectively, of our
acquisition of certain assets of JJMD. The preliminary aggregate purchase price
paid for the initial and second closings was approximately $163.1 million in
cash, which remains subject to certain post-closing adjustments. For the initial
and second closings, total assets acquired of $169.4 million and total
liabilities assumed of $6.3 million were recorded at their estimated fair values
as of the acquisition dates.
On September 30, 2019 , under the terms of the Framework Agreement, we completed
the third closing of our acquisition of certain assets of JJMD. The preliminary
aggregate purchase price paid for the third closing was approximately $106.9
million in cash, which remains subject to certain post-closing adjustments based
on conditions within the Framework Agreement. For the third closing, total
assets acquired of $185.0 million , including $83.2 million in contract assets,
$35.1 million in inventory and $55.7 million in goodwill, and total liabilities
assumed of $78.1 million , including $58.8 million of pension obligations, were
recorded at their estimated fair values as of the acquisition dates. There were
no intangible assets identified in this acquisition and the goodwill is
primarily attributable to the assembled workforce. The majority of the goodwill
is currently not expected to be deductible for income tax purposes.
The acquisition of the JJMD assets have been accounted for as separate business
combinations for each closing using the acquisition method of accounting. We are
currently evaluating the fair values of the assets and liabilities related to
these business combinations. The preliminary estimates and measurements are,
therefore, subject to change during the measurement period for assets acquired,
liabilities assumed and tax adjustments. The results of operations were included
in our consolidated financial results beginning on February 25, 2019 for the
initial closing, April 29, 2019 for the second closing and September 30, 2019
for the third closing. We believe it is impracticable to provide pro forma
information for the acquisition of the JJMD assets.
Liquidity and Capital Resources
We believe that our level of liquidity sources, which includes available
borrowings under our revolving credit facilities and commercial paper program,
additional proceeds available under our asset-backed securitization programs and
under our uncommitted trade accounts receivable sale programs, cash on hand,
funds provided by operations and the access to the capital markets, will be
adequate to fund our capital expenditures, the payment of any declared quarterly
dividends, approved share repurchase programs, any potential acquisitions and
our working capital requirements for the next 12 months. We continue to assess
our capital structure and evaluate the merits of redeploying available cash to
reduce existing debt or repurchase common stock.
Cash and Cash Equivalents
As of November 30, 2019 , we had approximately $719.8 million in cash and cash
equivalents. As our growth remains predominantly outside of the United States , a
significant portion of such cash and cash equivalents are held by our foreign
subsidiaries. Most of our cash and cash equivalents as of November 30, 2019
could be repatriated to the United States without potential tax consequences.
Notes Payable and Credit Facilities
Following is a summary of principal debt payments and debt issuance for our
notes payable and credit facilities:
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Borrowings Total notes
under payable
5.625% 4.700% 4.900% 3.950% revolving Borrowings and
Senior Senior Senior Senior credit under credit
(in thousands) Notes Notes Notes Notes facilities(1) loans facilities
Balance as of August 31, 2019$ 398,886 $ 498,004 $ 299,057 $ 494,825 $ -$ 805,693 $ 2,496,465 Borrowings - - - - 1,779,801 - 1,779,801 Payments - - - - (1,779,801 ) (6,321 ) (1,786,122 ) Other 223 165 61 153 - 149 751 Balance as of November 30, 2019$ 399,109 $ 498,169 $ 299,118 $ 494,978 $ -$ 799,521 $ 2,490,895 Nov 8, 2022 and Aug 24, Nov 8, 2022 and Aug Maturity Date Dec 15, 2020 Sep 15, 2022 Jul 14, 2023 Jan 12, 2028 2020(1) 24, 2020 Original Facility/
Maximum Capacity
$500.0 million $2.6 billion (1)$851.7 million
(1) As of
capacity under our revolving credit facilities. The revolving credit
facility supports commercial paper outstanding, if any. We have a borrowing
capacity of up to
We have a shelf registration statement with theSEC registering the potential sale of an indeterminate amount of debt and equity securities in the future to augment our liquidity and capital resources. Our Senior Notes and our credit facilities contain various financial and nonfinancial covenants. A violation of these covenants could negatively impact our liquidity by restricting our ability to borrow under the notes payable and credit facilities and potentially causing acceleration of amounts due under these notes payable and credit facilities. As ofNovember 30, 2019 , we were in compliance with our debt covenants. Refer to Note 5 - "Notes Payable and Long-Term Debt" to the Condensed Consolidated Financial Statements for further details. Asset-Backed Securitization and Trade Accounts Receivable Sale Programs Asset-Backed Securitization Programs We continuously sell designated pools of trade accounts receivable, at a discount, under our foreign asset-backed securitization program and our North American asset-backed securitization program to special purpose entities, which in turn sell certain of the foreign asset-backed receivables to an unaffiliated financial institution and a conduit administered by an unaffiliated financial institution and certain of the North American asset-backed receivables to conduits administered by an unaffiliated financial institution on a monthly basis. The foreign asset-backed securitization program contains a guarantee of payment by the special purpose entity, in an amount approximately equal to the net cash proceeds under the program. No liability has been recorded for obligations under the guarantee as ofNovember 30, 2019 . Certain unsold receivables covering the maximum amount of net cash proceeds available under the North American asset-backed securitization program are pledged as collateral to the unaffiliated financial institution as ofNovember 30, 2019 . Following is a summary of our asset-backed securitization programs and key terms: Maximum Amount of Expiration Net Cash Proceeds (in millions)(1) Date North American $ 390.0 November 22, 2021 Foreign $ 400.0 September 30, 2021 (1) Maximum amount available at any one time. In connection with our asset-backed securitization programs, during the three months endedNovember 30, 2019 , we sold$1.2 billion of trade accounts receivable and we received cash proceeds of$1.2 billion . As ofNovember 30, 2019 , we had up to$4.0 million in available liquidity under our asset-backed securitization programs. 32
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Our asset-backed securitization programs contain various financial and nonfinancial covenants. As ofNovember 30, 2019 andAugust 31, 2019 , we were in compliance with all covenants under our asset-backed securitization programs. Refer to Note 2 - "Trade Accounts Receivable Securitization and Sale Programs" to the Condensed Consolidated Financial Statements for further details on the programs. Trade Accounts Receivable Sale Programs Following is a summary of the trade accounts receivable sale programs with unaffiliated financial institutions. Under the programs we may elect to sell receivables and the unaffiliated financial institutions may elect to purchase, at a discount, on an ongoing basis: Maximum Amount Type of Expiration Program (10) (in millions)(1) Facility Date A $ 800.0 Uncommitted August 31, 2022(2) B $ 150.0 Uncommitted November 30, 2020(3) C800.0 CNY Uncommitted June 30, 2020 D $ 150.0 Uncommitted May 4, 2023(4) E $ 50.0 Uncommitted August 25, 2020 F $ 150.0 Uncommitted January 25, 2020(5) G $ 50.0 Uncommitted February 23, 2023(2) H $ 100.0 Uncommitted August 10, 2020(6) I $ 100.0 Uncommitted July 21, 2020(7) J $ 740.0 Uncommitted February 28, 2020(8) K $ 110.0 Uncommitted April 11, 2020(9) (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
either party provides 30 days notice of termination.
(6) The program will be automatically extended through
either party provides 30 days notice of termination.
(7) The program will be automatically extended through
either party provides 30 days notice of termination.
(8) As of the date of this filing, program J is no longer being utilized as it
has been replaced with a new
for details).
(9) The program will be automatically extended each year through
unless either party provides 30 days notice of termination.
(10) We entered into two new trade accounts receivable sale programs on December
5, 2019 with maximum amounts of
respectively.
During the three months endedNovember 30, 2019 , we sold$2.0 billion of trade accounts receivable under these programs and we received cash proceeds of$2.0 billion . As ofNovember 30, 2019 , we had up to$1.4 billion in available liquidity under our trade accounts receivable sale programs. Capital Expenditures For fiscal year 2020, we anticipate our net capital expenditures will be approximately$800.0 million . Our capital expenditures will support ongoing maintenance in our DMS and EMS segments and investments in new markets. The amount of actual capital expenditures may be affected by general economic, financial, competitive, legislative and regulatory factors, among other things. Cash Flows The following table sets forth selected consolidated cash flow information (in thousands): 33
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Three months ended
November 30, 2019 November 30, 2018
Net cash provided by (used in) operating activities $ 20,944 $ (91,693 )
Net cash used in investing activities (325,730 ) (131,252 )
Net cash used in financing activities (136,880 ) (235,460 )
Effect of exchange rate changes on cash and cash
equivalents (1,835 ) 4,865
Net decrease in cash and cash equivalents $ (443,501 ) Operating Activities Net cash provided by operating activities during the three months endedNovember 30, 2019 was primarily due to non-cash expenses and an increase in accounts payable, accrued expenses and other liabilities, partially offset by increased accounts receivable, inventories and contract assets. The increase in accounts payable, accrued expenses and other liabilities is primarily due to an increase in materials purchases due to increased demand in the cloud business, the timing of purchases and cash payments as well as an increase due to the timing of collections on accounts receivable sale programs. The increase in accounts receivable is primarily driven by higher sales and the timing of collections. The increase in inventories supports expected sales levels in the second quarter of fiscal year 2020 and also is due to increased demand. The increase in contract assets primarily due to the timing of revenue recognition for over time customers. Investing Activities Net cash used in investing activities during the three months endedNovember 30, 2019 consisted primarily of capital expenditures principally to support ongoing business in the DMS and EMS segments and expenditures for assets acquired in connection with the third closing of the acquisition of certain assets of JJMD, partially offset by proceeds and advances from the sale of property, plant and equipment. Financing Activities Net cash used in financing activities during the three months endedNovember 30, 2019 was primarily due to: (i) payments for debt agreements, (ii) the repurchase of our common stock and (iii) dividend payments. Net cash used in financing activities was partially offset by borrowings under debt agreements. Contractual Obligations As of the date of this report, there were no material changes, other than those disclosed below, outside the ordinary course of business, sinceAugust 31, 2019 to our contractual obligations and commitments. In connection with the third closing of the acquisition of certain assets of JJMD, we assumed additional contractual obligations related to postretirement benefit plans and executed certain financing leases. The following table provides details of these assumed obligations: Payments due by period (in thousands) Less than 1 After 5 Total year 1-3 years 3-5 years years Pension and postretirement contributions and payments(1)$ 10,599 $ 10,599 $ - $ - $ - Finance lease obligations(2)$ 114,275 $ 5,904 $ 12,972 $ 13,102 $ 82,297
(1) Represents the estimated company contributions to the funded
plan during fiscal year 2020. These future payments are not recorded on
the Condensed Consolidated Balance Sheets but will be recorded as
incurred. Refer to Note 7 - Postretirement and other Employee Benefits for
further discussion of the assumed postretirement benefit obligation.
(2) The amount payable after five years includes
requirements at the end of the respective leases.
Dividends and Share Repurchases
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We currently expect to continue to declare and pay regular quarterly dividends of an amount similar to our past declarations. However, the declaration and payment of future dividends are discretionary and will be subject to determination by our Board of Directors each quarter following its review of our financial performance. InSeptember 2019 , the Board of Directors authorized the repurchase of up to$600.0 million of our common stock as a part of a two-year capital allocation framework (the "2020 Share Repurchase Program"). As ofNovember 30, 2019 , 2.6 million shares had been repurchased for$96.4 million and$503.6 million remains available under the 2020 Share Repurchase Program. 35
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