UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d)
of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) June 15, 2016
Jabil Circuit, Inc.
(Exact name of registrant as specified in its charter)
Delaware | 001-14063 | 38-1886260 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
10560 Dr. Martin Luther King, Jr. Street North, St. Petersburg, Florida 33716
(Address of principal executive offices) (Zip Code)
Registrants telephone number, including area code (727) 577-9749
N/A
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 Results of Operations and Financial Condition.
On June 15, 2016, Jabil Circuit, Inc. (the Company) issued a press release announcing its results of operations for the third fiscal quarter ended May 31, 2016. A copy of the press release is furnished as Exhibit 99.1 hereto and is incorporated herein by reference.
The information furnished herewith pursuant to Item 2.02 of this Current Report, including Exhibit 99.1, shall not be deemed to be filed for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), or otherwise subject to the liabilities of that section. The information in this Current Report shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date of this Current Report, regardless of any general incorporation language in the filing.
Item 9.01. Financial Statements and Exhibits.
(d) | Exhibits |
The following exhibit is furnished herewith:
Exhibit No. |
Description | |
99.1 | Press Release dated June 15, 2016. |
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
JABIL CIRCUIT, INC. | ||||||
(Registrant) | ||||||
June 15, 2016 | By: | /s/ FORBES I.J. ALEXANDER | ||||
Forbes I.J. Alexander | ||||||
Chief Financial Officer |
EXHIBIT INDEX
Exhibit No. |
Description | |
99.1 | Press Release dated June 15, 2016. |
Exhibit 99.1
Jabil Posts Third Quarter Results
Company Announces Two-Year Capital Allocation Framework
St. Petersburg, FL June 15, 2016. Today Jabil Circuit, Inc. (NYSE: JBL), reported preliminary, unaudited financial results for its third quarter of fiscal year 2016, including third quarter net revenue of $4.3 billion.
U.S. GAAP (as defined below) operating income for the third quarter was $59.6 million and U.S. GAAP net diluted earnings per share was $0.03. Core operating income (as defined below) was $87.2 million and core diluted earnings per share (as defined below) was $0.17.
Our Electronics Manufacturing Services business performed ahead of plan supported by near-perfect execution during the quarter, said CEO Mark Mondello. However as expected, our third quarter results also reflected a soft environment within our mobility business. These challenges will continue to negatively impact our Diversified Manufacturing Services business for the balance of our fiscal year, he added.
Fiscal Year 2016 Fourth Quarter Guidance: |
||
Net revenue |
$4.15 billion to $4.35 billion | |
U.S. GAAP operating income |
$60 million to $92 million | |
U.S. GAAP net diluted (loss) earnings per share |
($0.02) to $0.19 per diluted share | |
Core operating income |
$95 million to $125 million | |
Core diluted earnings per share |
$0.15 to $0.35 per diluted share | |
Diversified Manufacturing Services |
Decrease net revenue 20 percent year-on-year | |
Electronics Manufacturing Services |
Consistent net revenue year-on-year | |
Total company |
Decrease net revenue 9 percent year-on-year |
(U.S. GAAP net diluted earnings per share for the fourth quarter of fiscal year 2016 are currently estimated to include $0.05 per share for amortization of intangibles, $0.09 per share for stock-based compensation expense and related charges and $0.03 to $0.02 per share for restructuring and related charges.)
Management updated the fiscal year 2016 revenue outlook to approximately $18.2 billion; U.S. GAAP net diluted earnings per share outlook to approximately $1.20 and core diluted earnings per share outlook to approximately $1.85.
Capital Allocation Outlook
As part of a framework to increase capital returns to shareholders over the next two fiscal years, Jabils Board of Directors authorized a $400 million share repurchase program. The overarching capital allocation framework is designed to return approximately 40% of cash flows from operations through dividends and share repurchases over the next two years, not to exceed $1 billion in total.
This framework announced today reflects our confidence in our ability to generate in excess of $2 billion of cash flows from operations over the next two fiscal years, said CFO Forbes I.J. Alexander. Moving ahead, we remain confident in our ability to effectively leverage our asset base, maintain relationships with both new and existing customers and grow earnings per share, he added.
Definitions: U.S. GAAP means U.S. generally accepted accounting principles. Jabil defines core operating income as U.S. GAAP operating income before amortization of intangibles, stock-based compensation expense and related charges, restructuring and related charges, distressed customer charges, acquisition costs and certain purchase accounting adjustments, loss on disposal of subsidiaries, settlement of receivables and related charges, impairment of notes receivable and related charges and goodwill impairment charges. Jabil defines core earnings as U.S. GAAP net income before amortization of intangibles, stock-based compensation expense and related charges, restructuring and related charges, distressed customer charges, acquisition costs and certain purchase accounting adjustments, loss on disposal of subsidiaries, settlement of receivables and related charges, impairment of notes receivable and related charges, goodwill impairment charges, 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. Jabil defines core diluted earnings per share as core earnings divided by the weighted average number of outstanding diluted shares as determined under U.S. GAAP. Jabil calculates its core return on invested capital by annualizing its after-tax core operating income for its most recently ended quarter and dividing that by a two quarter average of its net invested capital base. Jabil reports core operating income, core earnings, core diluted and basic earnings per share and core return on invested capital to provide investors an additional method for assessing operating income, earnings, diluted earnings per share and return on invested capital from what it believes are its core manufacturing operations. See the accompanying reconciliation of Jabils core operating income to its U.S. GAAP operating income, its calculation of core earnings and core diluted earnings per share to its U.S. GAAP net income and U.S. GAAP earnings per share, its calculation of core return on invested capital and additional information in the supplemental information.
Forward Looking Statements: This news release includes forward-looking statements, which are statements that are not historical facts, including statements that relate to our share repurchase program including the amount of shares to be repurchased and timing of such repurchases; the Companys updated capital allocation framework; and our projected fiscal year 2016 fourth-quarter and full-year financial performance including assumptions regarding our effective tax rate. The statements in this news release are based on current expectations, forecasts and assumptions involving risks and uncertainties that could cause actual outcomes and results to differ materially from our current expectations. Such factors include, but are not limited to, our determination as we finalize our financial results for our third quarter of fiscal year 2016 that our financial results and conditions differ from our current preliminary unaudited numbers set forth herein; unexpected, adverse seasonal impacts on demand; performance of the markets in which we operate; changes in macroeconomic conditions; expected financial results from, product ramps; managing rapid declines in customer demand and other related customer challenges that may occur; and our dependence on a limited number of large customers. Additional factors that could cause such differences can be found in our Form 10-K for the year ended August 31, 2015, Form 10-Q for the quarters ended November 30, 2015, and February 29, 2016 and in our other SEC filings. We assume no obligation to update these forward-looking statements.
Supplemental Information: The financial results disclosed in this release include certain measures calculated and presented in accordance with U.S. GAAP. In addition to the U.S. GAAP financial measures, Jabil provides supplemental, non-U.S. GAAP financial measures to facilitate evaluation of Jabils core operating performance. The non-U.S. GAAP financial measures disclosed in this release exclude certain amounts that are included in the most directly comparable U.S. GAAP measures. The non-U.S. GAAP or core financial measures disclosed in this release do not have standard meanings and may vary from the non-U.S. GAAP financial measures used by other companies. Management believes core financial measures (which exclude the effects of the amortization of intangibles, stock-based compensation expense and related charges, restructuring and related charges, distressed customer charges, acquisition costs and certain purchase accounting adjustments, loss on disposal of subsidiaries, settlement of receivables and related charges, impairment of notes receivable and related charges, goodwill impairment charges, 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) are a useful measure that facilitates evaluating the past and future performance of Jabils ongoing operations on a comparable basis. Jabil reports core operating income, core return on invested capital, core earnings and core diluted and basic earnings per share to provide investors an additional method for assessing operating income, earnings and earnings per share from what it believes are its core manufacturing operations. Among other uses, management uses non-U.S. GAAP financial measures as a factor in determining certain employee performance when determining incentive compensation. Included in this release are Condensed Consolidated Statements of Operations as well as a reconciliation of the disclosed core financial measures to the most directly comparable U.S. GAAP financial measures.
Company Conference Call Information: Jabil will hold a conference call to discuss its third quarter results and fiscal 2016 outlook today at 4:30 p.m. ET live on the Internet at http://www.jabil.com. The call will be recorded and archived on the web at http://www.jabil.com. A taped replay of the conference call will also be available June 15, 2016 at approximately 7:30 p.m. ET through midnight on June 22, 2016. To access the replay, call (855) 859-2056 from within the United States, or (404) 537-3406 outside the United States. The pass code is: 19885929. An archived webcast of the conference call will be available at http://www.jabil.com/investors/.
About Jabil
Jabil is a product solutions company providing comprehensive electronics design, production and product management services to global electronics and technology companies. Offering complete product supply chain management from facilities in 28 countries, Jabil provides comprehensive, individualized-focused solutions to customers in a broad range of industries. Jabil common stock is traded on the New York Stock Exchange under the symbol, JBL. Further information is available on Jabils website: jabil.com.
Company Contacts:
Beth Walters
Senior Vice President, Investor Relations & Communications
(727) 803-3511
beth_walters@jabil.com
Adam Berry
Senior Director, Investor Relations
(727) 803-5772
adam_berry@jabil.com
JABIL CIRCUIT, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
May 31, 2016 (Unaudited) |
August 31, 2015 |
|||||||
ASSETS | ||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 886,991 | $ | 913,963 | ||||
Accounts receivable, net |
1,296,924 | 1,467,247 | ||||||
Inventories |
2,292,350 | 2,507,264 | ||||||
Prepaid expenses and other current assets |
1,056,461 | 898,790 | ||||||
Deferred income taxes |
| 79,045 | ||||||
|
|
|
|
|||||
Total current assets |
5,532,726 | 5,866,309 | ||||||
Property, plant and equipment, net |
3,218,141 | 2,804,333 | ||||||
Goodwill and intangible assets, net |
893,615 | 745,918 | ||||||
Deferred income taxes |
150,836 | 85,169 | ||||||
Other assets |
110,756 | 101,478 | ||||||
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|
|
|
|||||
Total assets |
$ | 9,906,074 | $ | 9,603,207 | ||||
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|
|||||
LIABILITIES AND EQUITY | ||||||||
Current liabilities: |
||||||||
Current installments of notes payable, long-term debt and capital lease obligations |
$ | 359,885 | $ | 323,833 | ||||
Accounts payable |
3,191,304 | 3,663,264 | ||||||
Accrued expenses |
1,836,475 | 1,685,589 | ||||||
Deferred income taxes |
| 2,455 | ||||||
|
|
|
|
|||||
Total current liabilities |
5,387,664 | 5,675,141 | ||||||
Notes payable, long-term debt and capital lease obligations, less current installments |
1,791,028 | 1,346,558 | ||||||
Other liabilities |
68,275 | 67,951 | ||||||
Income tax liabilities |
91,071 | 96,379 | ||||||
Deferred income taxes |
56,779 | 82,167 | ||||||
|
|
|
|
|||||
Total liabilities |
7,394,817 | 7,268,196 | ||||||
|
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|
|||||
Commitments and contingencies |
||||||||
Equity: |
||||||||
Jabil Circuit, Inc. stockholders equity: |
||||||||
Preferred stock |
| | ||||||
Common stock |
249 | 247 | ||||||
Additional paid-in capital |
2,024,526 | 1,955,104 | ||||||
Retained earnings |
1,637,392 | 1,468,910 | ||||||
Accumulated other comprehensive loss |
(46,107 | ) | (50,854 | ) | ||||
Treasury stock, at cost |
(1,123,608 | ) | (1,058,551 | ) | ||||
|
|
|
|
|||||
Total Jabil Circuit, Inc. stockholders equity |
2,492,452 | 2,314,856 | ||||||
Noncontrolling interests |
18,805 | 20,155 | ||||||
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|
|
|
|||||
Total equity |
2,511,257 | 2,335,011 | ||||||
|
|
|
|
|||||
Total liabilities and equity |
$ | 9,906,074 | $ | 9,603,207 | ||||
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|
JABIL CIRCUIT, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except for per share data)
(Unaudited)
Three months ended | Nine months ended | |||||||||||||||
May 31, | May 31, | May 31, | May 31, | |||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Net revenue |
$ | 4,310,752 | $ | 4,358,641 | $ | 13,922,323 | $ | 13,218,382 | ||||||||
Cost of revenue |
3,989,665 | 3,982,804 | 12,718,268 | 12,091,739 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Gross profit |
321,087 | 375,837 | 1,204,055 | 1,126,643 | ||||||||||||
Operating expenses: |
||||||||||||||||
Selling, general and administrative |
239,646 | 228,476 | 716,097 | 653,183 | ||||||||||||
Research and development |
7,675 | 6,997 | 24,431 | 19,502 | ||||||||||||
Amortization of intangibles |
9,711 | 5,724 | 26,150 | 17,097 | ||||||||||||
Restructuring and related charges |
4,460 | (782 | ) | 8,349 | 31,833 | |||||||||||
|
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|
|||||||||
Operating income |
59,595 | 135,422 | 429,028 | 405,028 | ||||||||||||
Interest and other, net |
35,322 | 31,041 | 102,202 | 94,670 | ||||||||||||
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|
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Income from continuing operations before tax |
24,273 | 104,381 | 326,826 | 310,358 | ||||||||||||
Income tax expense |
18,434 | 32,124 | 110,639 | 107,186 | ||||||||||||
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Income from continuing operations, net of tax |
5,839 | 72,257 | 216,187 | 203,172 | ||||||||||||
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Discontinued operations: |
||||||||||||||||
Loss from discontinued operations, net of tax |
| (1,514 | ) | | (5,224 | ) | ||||||||||
Gain (loss) on sale of discontinued operations, net of tax |
| 1,681 | | (875 | ) | |||||||||||
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Discontinued operations, net of tax |
| 167 | | (6,099 | ) | |||||||||||
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|
|||||||||
Net income |
5,839 | 72,424 | 216,187 | 197,073 | ||||||||||||
Net income attributable to noncontrolling interests, net of tax |
626 | 221 | 159 | 756 | ||||||||||||
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Net income attributable to Jabil Circuit, Inc. |
$ | 5,213 | $ | 72,203 | $ | 216,028 | $ | 196,317 | ||||||||
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Earnings per share attributable to the stockholders of Jabil Circuit, Inc.: |
||||||||||||||||
Basic: |
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Income from continuing operations, net of tax |
$ | 0.03 | $ | 0.37 | $ | 1.13 | $ | 1.05 | ||||||||
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Discontinued operations, net of tax |
$ | 0.00 | $ | 0.00 | $ | 0.00 | $ | (0.03 | ) | |||||||
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Net income |
$ | 0.03 | $ | 0.37 | $ | 1.13 | $ | 1.01 | ||||||||
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Diluted: |
||||||||||||||||
Income from continuing operations, net of tax |
$ | 0.03 | $ | 0.37 | $ | 1.12 | $ | 1.03 | ||||||||
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Discontinued operations, net of tax |
$ | 0.00 | $ | 0.00 | $ | 0.00 | $ | (0.03 | ) | |||||||
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Net income |
$ | 0.03 | $ | 0.37 | $ | 1.12 | $ | 1.00 | ||||||||
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Weighted average shares outstanding: |
||||||||||||||||
Basic |
191,206 | 193,785 | 190,841 | 193,617 | ||||||||||||
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Diluted |
193,069 | 196,304 | 193,058 | 195,793 | ||||||||||||
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JABIL CIRCUIT, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
Nine months ended | ||||||||
May 31, | May 31, | |||||||
2016 | 2015 | |||||||
Cash flows from operating activities: |
||||||||
Net income |
$ | 216,187 | $ | 197,073 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
Depreciation and amortization |
512,972 | 385,136 | ||||||
Restructuring and related charges |
| 4,567 | ||||||
Provision for allowance for doubtful accounts |
240 | 8,193 | ||||||
Recognition of stock-based compensation expense and related charges |
58,505 | 53,101 | ||||||
Deferred income taxes |
(24,403 | ) | (14,143 | ) | ||||
Loss on sale of property, plant and equipment |
13,229 | 10,045 | ||||||
Other, net |
5,906 | 9,856 | ||||||
Change in operating assets and liabilities, exclusive of net assets acquired: |
||||||||
Accounts receivable |
180,830 | (43,982 | ) | |||||
Inventories |
229,187 | (253,579 | ) | |||||
Prepaid expenses and other current assets |
(131,682 | ) | 37,687 | |||||
Other assets |
(7,466 | ) | 14,417 | |||||
Accounts payable, accrued expenses and other liabilities |
(565,558 | ) | 474,550 | |||||
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|
|||||
Net cash provided by operating activities |
487,947 | 882,921 | ||||||
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|
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Cash flows from investing activities: |
||||||||
Proceeds from sale of discontinued operations, net of cash |
| 9,663 | ||||||
Acquisition of property, plant and equipment |
(668,505 | ) | (735,459 | ) | ||||
Proceeds from sale of property, plant and equipment |
18,710 | 13,187 | ||||||
Cash paid for business and intangible asset acquisitions, net of cash |
(206,039 | ) | (78,007 | ) | ||||
Issuance of notes receivable |
(29,300 | ) | | |||||
Other, net |
(5,250 | ) | (6,645 | ) | ||||
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|
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Net cash used in investing activities |
(890,384 | ) | (797,261 | ) | ||||
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Cash flows from financing activities: |
||||||||
Borrowings under debt agreements |
4,748,060 | 4,723,083 | ||||||
Payments toward debt agreements |
(4,268,839 | ) | (4,731,894 | ) | ||||
Payments to acquire treasury stock |
(54,567 | ) | (40,040 | ) | ||||
Dividends paid to stockholders |
(47,122 | ) | (47,623 | ) | ||||
Net proceeds from exercise of stock options and issuance of common stock under employee stock purchase plan |
10,660 | 9,004 | ||||||
Treasury stock minimum tax withholding related to vesting of restricted stock |
(10,490 | ) | (7,536 | ) | ||||
Other, net |
(1,696 | ) | (99 | ) | ||||
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|
|
|
|||||
Net cash provided by (used in) financing activities |
376,006 | (95,105 | ) | |||||
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|
|||||
Effect of exchange rate changes on cash and cash equivalents |
(541 | ) | (28,010 | ) | ||||
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|
|||||
Net decrease in cash and cash equivalents |
(26,972 | ) | (37,455 | ) | ||||
Cash and cash equivalents at beginning of period |
913,963 | 1,000,249 | ||||||
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|
|
|
|||||
Cash and cash equivalents at end of period |
$ | 886,991 | $ | 962,794 | ||||
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JABIL CIRCUIT, INC. AND SUBSIDIARIES
SUPPLEMENTAL DATA
RECONCILIATION OF U.S. GAAP FINANCIAL RESULTS TO NON-U.S. GAAP MEASURES
(in thousands, except for per share data)
(Unaudited)
Three months ended | Nine months ended | |||||||||||||||
May 31, | May 31, | May 31, | May 31, | |||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Operating income (U.S. GAAP) |
$ | 59,595 | $ | 135,422 | $ | 429,028 | $ | 405,028 | ||||||||
Amortization of intangibles |
9,711 | 5,724 | 26,150 | 17,097 | ||||||||||||
Stock-based compensation expense and related charges |
13,445 | 20,094 | 58,505 | 53,106 | ||||||||||||
Restructuring and related charges |
4,460 | (782 | ) | 8,349 | 31,833 | |||||||||||
|
|
|
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|
|
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|
|||||||||
Core operating income (Non-U.S. GAAP) |
$ | 87,211 | $ | 160,458 | $ | 522,032 | $ | 507,064 | ||||||||
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Net income attributable to Jabil Circuit, Inc. (U.S. GAAP) |
$ | 5,213 | $ | 72,203 | $ | 216,028 | $ | 196,317 | ||||||||
Amortization of intangibles, net of tax |
8,959 | 5,528 | 24,066 | 16,893 | ||||||||||||
Stock-based compensation expense and related charges, net of tax |
13,321 | 19,949 | 57,738 | 52,471 | ||||||||||||
Restructuring and related charges, net of tax |
4,470 | (1,029 | ) | 8,358 | 31,172 | |||||||||||
Loss from discontinued operations, net of tax |
| 1,514 | | 5,224 | ||||||||||||
(Gain) loss on sale of discontinued operations, net of tax |
| (1,681 | ) | | 875 | |||||||||||
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Core earnings (Non-U.S. GAAP) |
$ | 31,963 | $ | 96,484 | $ | 306,190 | $ | 302,952 | ||||||||
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Net earnings per share (U.S. GAAP): |
||||||||||||||||
Basic |
$ | 0.03 | $ | 0.37 | $ | 1.13 | $ | 1.01 | ||||||||
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Diluted |
$ | 0.03 | $ | 0.37 | $ | 1.12 | $ | 1.00 | ||||||||
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|||||||||
Core earnings per share (Non-U.S. GAAP): |
||||||||||||||||
Basic |
$ | 0.17 | $ | 0.50 | $ | 1.60 | $ | 1.56 | ||||||||
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Diluted |
$ | 0.17 | $ | 0.49 | $ | 1.59 | $ | 1.55 | ||||||||
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Weighted average shares outstanding used in the calculations of earnings per share (U.S. GAAP and Non-U.S. GAAP): |
||||||||||||||||
Basic |
191,206 | 193,785 | 190,841 | 193,617 | ||||||||||||
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Diluted |
193,069 | 196,304 | 193,058 | 195,793 | ||||||||||||
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JABIL CIRCUIT, INC. AND SUBSIDIARIES
SUPPLEMENTAL DATA
RECONCILIATION OF U.S. GAAP FINANCIAL RESULTS TO NON-U.S. GAAP MEASURES
(in thousands)
(Unaudited)
CALCULATION OF RETURN ON INVESTED CAPITAL
AND CORE RETURN ON INVESTED CAPITAL
The Company calculates: (1) its Return on Invested Capital by annualizing its after-tax U.S. GAAP operating income for its most recently-ended quarter and dividing that by the average of its net invested capital asset base and (2) its Core Return on Invested Capital by annualizing its after-tax non-U.S. GAAP core operating income for its most recently-ended quarter and dividing that by the average net invested capital asset base.
The Company calculates: (1) its after-tax U.S. GAAP operating income by subtracting a certain tax effect (the calculation of which is explained below) from its U.S. GAAP operating income and (2) its after-tax non-U.S. GAAP core operating income as its non-U.S. GAAP core operating income less a certain tax effect (the calculation of which is explained below). See elsewhere in this earnings release for a reconciliation of the Companys non-U.S. GAAP core operating income to its U.S. GAAP operating income.
The Company calculates its average net invested capital asset base as the sum of the averages (the calculations of which are explained below) of its stockholders equity, current and non-current portions of its notes payable, long-term debt and capital lease obligations less the average (the calculation of which is explained below) of its cash and cash equivalents.
The following table reconciles (1) Return on Invested Capital, as calculated using after-tax U.S. GAAP operating income to (2) Core Return on Invested Capital, as calculated using after-tax non-U.S. GAAP core operating income:
Three months ended | ||||||||
May 31, | May 31, | |||||||
2016 | 2015 | |||||||
Numerator: |
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Operating income (U.S. GAAP) |
$ | 59,595 | $ | 135,422 | ||||
Tax effect(1) |
(18,516 | ) | (31,830 | ) | ||||
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After-tax operating income |
41,079 | 103,592 | ||||||
x4 | x4 | |||||||
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Annualized after-tax operating income |
$ | 164,316 | $ | 414,368 | ||||
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Core operating income (Non-U.S. GAAP) |
$ | 87,211 | $ | 160,458 | ||||
Tax effect(2) |
(19,340 | ) | (32,471 | ) | ||||
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After-tax core operating income |
67,871 | 127,987 | ||||||
x4 | x4 | |||||||
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Annualized after-tax core operating income |
$ | 271,484 | $ | 511,948 | ||||
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Denominator: |
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Average total Jabil Circuit, Inc. stockholders equity(3) |
$ | 2,479,722 | $ | 2,278,112 | ||||
Average notes payable, long-term debt and capital lease obligations, less current installments(3) |
1,801,124 | 1,661,320 | ||||||
Average current installments of notes payable, long-term debt and capital lease obligations(3) |
449,089 | 11,312 | ||||||
Average cash and cash equivalents(3) |
(885,104 | ) | (964,604 | ) | ||||
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Net invested capital asset base |
$ | 3,844,831 | $ | 2,986,140 | ||||
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Return on Invested Capital (U.S. GAAP) |
4.3 | % | 13.9 | % | ||||
Adjustments noted above |
2.8 | % | 3.2 | % | ||||
Core Return on Invested Capital (Non-U.S. GAAP) |
7.1 | % | 17.1 | % |
(1) | This amount is calculated by adding the amount of income taxes attributable to its operating income (U.S. GAAP) and its interest expense. |
(2) | This amount is calculated by adding the amount of income taxes attributable to its core operating income (Non-U.S. GAAP) and its interest expense. |
(3) | The average is based on the addition of the account balance at the end of the most recently-ended quarter to the account balance at the end of the prior quarter and dividing by two. |
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