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8-K - 8-K - JABIL INCd37695d8k.htm

Exhibit 99.1

 

LOGO

Jabil Delivers Solid Fourth Quarter & Fiscal Year 2015 Results

Company Exceeds Expectations and Raises Outlook for Fiscal 2016

St. Petersburg, FL – September 24, 2015... Today Jabil Circuit, Inc. (NYSE: JBL), announced preliminary, unaudited financial results for its fourth quarter and full fiscal year, ended August 31, 2015. The company reported fourth quarter net revenue of $4.7 billion and fiscal year net revenue of $17.9 billion.

“I am extremely pleased with our fiscal 2015 results and in particular the financial strength demonstrated as we exited the year. We exceeded nearly every financial target provided at the outset of the year, culminating with core earnings per share of $2.07 and free cash flow of approximately $300 million,” said Mark T. Mondello, Chief Executive Officer. “Our strong cash generation provided us the financial flexibility to complete a number of strategic acquisitions, aggressively re-invest in the business and return approximately $150 million to shareholders via dividend and share repurchases,” he added.

Fiscal 2015 Financial Highlights

 

    Total Company revenue of $17.9 billion, an increase of 14% year-over-year.

o Diversified Manufacturing Services revenue: $7.1 billion, an increase of 39% year-over-year.

o Electronics Manufacturing Services revenue: $10.8 billion, an increase of 1% year-over-year.

 

    Generated $1.24 billion in cash flow from operations.

 

    Returned approximately $150 million to shareholders via dividend and share repurchases.

For the fourth quarter of fiscal year 2015, U.S. generally accepted accounting principles (U.S. GAAP) operating income was $150.4 million and U.S. GAAP net diluted earnings per share was $0.45. For fiscal year 2015, U.S. GAAP operating income was $555.4 million and U.S. GAAP net diluted earnings per share was $1.45.

For the fourth quarter of fiscal year 2015, core operating income (as defined below) was $162.9 million and core diluted earnings per share (as defined below) was $0.53. For fiscal year 2015, core operating income (as defined below) was $670.0 million and core diluted earnings per share (as defined below) was $2.07.

Jabil’s two reporting segments delivered the following revenue results for the company’s fourth fiscal quarter:

 

    Diversified Manufacturing Services: $1.9 billion.

 

    Electronics Manufacturing Services: $2.8 billion.

(Definitions used: “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 Jabil’s 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 (loss) and U.S. GAAP earnings (loss) per share, its calculation of core return on invested capital and additional information in the supplemental information.)

 

Quarterly Results

   Q4 2015    Q4 2014

Net revenue

   $4.7 billion    $4.1 billion

U.S. GAAP operating income

   $150.4 million    $46.6 million

U.S. GAAP net income (loss)

   $87.7 million    $(26.2) million

U.S. GAAP net diluted earnings (loss) per share

   $0.45    $(0.13)

U.S. GAAP return on invested capital

   15.9%    1.5%

Core operating income

   $162.9 million    $79.5 million

Core earnings

   $103.2 million    $10.2 million

Core diluted earnings per share

   $0.53    $0.05

Core return on invested capital

   17.6%    5.8%

Fiscal Year Results

   Fiscal Year 2015    Fiscal Year 2014

Net revenue

   $17.9 billion    $15.8 billion

U.S. GAAP operating income

   $555.4 million    $204.1 million

U.S. GAAP net income

   $284.0 million    $241.3 million

U.S. GAAP net diluted earnings per share

   $1.45    $1.19

U.S. GAAP return on invested capital

   14.0%    4.1%

Core operating income

   $670.0 million    $345.4 million

Core earnings

   $406.2 million    $108.1 million

Core diluted earnings per share

   $2.07    $0.53

Core return on invested capital

   17.8%    7.8%

Business Outlook

“Our team is positioned for another solid year in fiscal 2016,” said Mark T. Mondello, Chief Executive Officer. “Jabil’s strong first quarter guidance can be directly attributed to the commitment of our employees, the exceptional brands we serve and a focused pursuit of our growth strategy,” he added. Management anticipates fiscal year 2016 revenue of approximately $20 billion and core diluted earnings per share of $2.60.

First Quarter of Fiscal Year 2016 Guidance

•  Net revenue    $5.1 billion to $5.3 billion
•  U.S. GAAP operating income    $188 million to $232 million
•  U.S. GAAP net diluted earnings per share    $0.56 to $0.74 per diluted share
•  Core operating income    $220 million to $260 million
•  Core diluted earnings per share    $0.72 to $0.88 per diluted share
•  Diversified Manufacturing Services    Increase revenue 33% percent year-over-year
•  Electronics Manufacturing Services    Consistent revenue year-over-year

(U.S. GAAP net diluted earnings per share for the first quarter of fiscal year 2016 are currently estimated to include $0.03 per share for amortization of intangibles, $0.10 per share for stock-based compensation expense and related charges and $0.03 to $0.01 per share for restructuring and related charges.)


FORWARD LOOKING STATEMENTS: This news release contains forward-looking statements, including those regarding our anticipated financial results for our fourth quarter of fiscal year 2015 and full fiscal year 2015; our positioning for future financial performance in fiscal 2016; our delivery of revenue growth and core earnings per share for fiscal 2016; our currently expected fiscal year 2016 net revenue (including that of our segments), core and U.S. GAAP operating income, core and U.S. GAAP diluted earnings per share results and the components thereof. 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. These risks and uncertainties include, but are not limited to: our determination as we finalize our financial results for our fourth quarter of fiscal year 2015 and our full fiscal year 2015 that our financial results and conditions differ from our current preliminary unaudited numbers set forth herein; fluctuations in our stock’s market price; fluctuations in operating results and cash flows; unexpected, adverse seasonal impacts on demand; changes in macroeconomic conditions, both in the U.S. and internationally; the occurrence of, success and expected financial results from, product ramps; our financial performance during and after the current economic conditions; our ability to maintain and improve costs, quality and delivery for our customers; risks and costs inherent in litigation; whether our realignment of our capacity will adversely affect our cost structure, ability to service customers and labor relations; our ability to take advantage of perceived benefits of offering customers vertically integrated services; changes in technology; competition; anticipated growth for us and our industry that may not occur; managing rapid growth; managing rapid declines in customer demand and other related customer challenges that may occur; our ability to successfully consummate acquisitions and divestitures; managing the integration of businesses we acquire; risks associated with international sales and operations; retaining key personnel; our dependence on a limited number of large customers; business and competitive factors generally affecting the engineering manufacturing services industry, our customers and our business; other factors that we may not have currently identified or quantified; and other risks, relevant factors and uncertainties identified in our Annual Report on Form 10-K for the fiscal year ended August 31, 2014, subsequent Reports on Forms 10-Q and 8-K and our other securities filings. Jabil disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

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 Jabil’s 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 Jabil’s 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. 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 the earnings for the fourth quarter and full fiscal year, ended August 31, 2015, 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 September 24, 2015 at approximately 7:30 p.m. ET through midnight on October 1, 2015. 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: 16275444. An archived webcast of the conference call will be available at http://www.jabil.com/investors/.


About Jabil

Jabil is an electronic 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 27 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 Jabil’s website: jabil.com.

Investor & Media Contact:

Beth Walters

Senior Vice President, Investor Relations & Communications

Jabil Circuit, Inc.

(727) 803-3511

beth_walters@jabil.com


JABIL CIRCUIT, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

 

     August 31,
2015
(Unaudited)
    August 31,
2014
 

ASSETS

    

Current assets:

    

Cash and cash equivalents

   $ 913,963      $ 1,000,249   

Accounts receivable, net

     1,467,247        1,208,516   

Inventories

     2,507,264        2,008,077   

Prepaid expenses and other current assets

     898,790        1,057,562   

Deferred income taxes

     79,045        64,944   

Assets of discontinued operations

     —          19,669   
  

 

 

   

 

 

 

Total current assets

     5,866,309        5,359,017   

Property, plant and equipment, net

     2,804,333        2,271,705   

Goodwill and intangible assets, net

     745,918        627,700   

Deferred income taxes

     85,169        92,702   

Other assets

     101,478        128,622   
  

 

 

   

 

 

 

Total assets

   $ 9,603,207      $ 8,479,746   
  

 

 

   

 

 

 

LIABILITIES AND EQUITY

    

Current liabilities:

    

Current installments of notes payable, long-term debt and capital lease obligations

   $ 323,833      $ 12,960   

Accounts payable

     3,663,264        3,060,814   

Accrued expenses

     1,685,589        1,235,106   

Deferred income taxes

     2,455        5,094   

Liabilities of discontinued operations

     —          7,123   
  

 

 

   

 

 

 

Total current liabilities

     5,675,141        4,321,097   

Notes payable, long-term debt and capital lease obligations, less current installments

     1,346,558        1,669,585   

Other liabilities

     67,951        79,471   

Income tax liabilities

     96,379        87,555   

Deferred income taxes

     82,167        61,670   
  

 

 

   

 

 

 

Total liabilities

     7,268,196        6,219,378   
  

 

 

   

 

 

 

Commitments and contingencies

    

Equity:

    

Jabil Circuit, Inc. stockholders’ equity:

    

Preferred stock

     —          —     

Common stock

     247        244   

Additional paid-in capital

     1,955,104        1,874,219   

Retained earnings

     1,468,910        1,245,772   

Accumulated other comprehensive (loss) income

     (50,854     86,962   

Treasury stock, at cost

     (1,058,551     (965,369
  

 

 

   

 

 

 

Total Jabil Circuit, Inc. stockholders’ equity

     2,314,856        2,241,828   

Noncontrolling interests

     20,155        18,540   
  

 

 

   

 

 

 

Total equity

     2,335,011        2,260,368   
  

 

 

   

 

 

 

Total liabilities and equity

   $ 9,603,207      $ 8,479,746   
  

 

 

   

 

 

 


JABIL CIRCUIT, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except for per share data)

(Unaudited)

 

     Three months ended     Fiscal year ended  
     August 31,
2015
    August 31,
2014
    August 31,
2015
    August 31,
2014
 

Net revenue

   $ 4,680,813      $ 4,056,245      $ 17,899,196      $ 15,762,146   

Cost of revenue

     4,304,239        3,793,993        16,395,978        14,736,543   
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     376,574        262,252        1,503,218        1,025,603   

Operating expenses:

        

Selling, general and administrative

     209,465        177,934        862,647        675,730   

Research and development

     8,142        7,224        27,645        28,611   

Amortization of intangibles

     7,352        5,677        24,449        23,857   

Restructuring and related charges

     1,232        19,717        33,066        85,369   

Loss on disposal of subsidiaries

     —          5,057        —          7,962   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

     150,383        46,643        555,411        204,074   

Interest and other, net

     29,095        32,243        123,765        131,951   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income from continuing operations before tax

     121,288        14,400        431,646        72,123   

Income tax expense

     30,276        32,788        137,461        73,711   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) from continuing operations, net of tax

     91,012        (18,388     294,185        (1,588
  

 

 

   

 

 

   

 

 

   

 

 

 

Discontinued operations:

        

(Loss) income from discontinued operations, net of tax

     (2,473     (961     (7,698     20,554   

(Loss) gain on sale of discontinued operations, net of tax

     —          (6,243     (875     223,299   
  

 

 

   

 

 

   

 

 

   

 

 

 

Discontinued operations, net of tax

     (2,473     (7,204     (8,573     243,853   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

     88,539        (25,592     285,612        242,265   

Net income attributable to noncontrolling interests, net of tax

     837        605        1,593        952   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) attributable to Jabil Circuit, Inc.

   $ 87,702      $ (26,197   $ 284,019      $ 241,313   
  

 

 

   

 

 

   

 

 

   

 

 

 

Earnings per share attributable to the stockholders of Jabil Circuit, Inc.:

        

Basic:

        

Income (loss) from continuing operations, net of tax

   $ 0.47      $ (0.10   $ 1.51      $ (0.01
  

 

 

   

 

 

   

 

 

   

 

 

 

Discontinued operations, net of tax

   $ (0.01   $ (0.04   $ (0.04   $ 1.20   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

   $ 0.45      $ (0.13   $ 1.47      $ 1.19   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted:

        

Income (loss) from continuing operations, net of tax

   $ 0.46      $ (0.10   $ 1.49      $ (0.01
  

 

 

   

 

 

   

 

 

   

 

 

 

Discontinued operations, net of tax

   $ (0.01   $ (0.04   $ (0.04   $ 1.20   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

   $ 0.45      $ (0.13   $ 1.45      $ 1.19   
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average shares outstanding:

        

Basic

     193,904        198,053        193,689        202,497   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

     196,351        198,053        196,005        202,497   
  

 

 

   

 

 

   

 

 

   

 

 

 


JABIL CIRCUIT, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(Unaudited)

 

     Fiscal year ended  
     August 31,
2015
    August 31,
2014
 

Cash flows from operating activities:

    

Net income

   $ 285,612      $ 242,265   

Adjustments to reconcile net income to net cash provided by operating activities:

    

Depreciation and amortization

     529,176        487,278   

Gain on sale of discontinued operations

     —          (230,878

Restructuring and related charges

     4,445        42,534   

Provision for allowance for doubtful accounts

     9,752        16,268   

Recognition of stock-based compensation expense and related charges

     62,560        10,624   

Deferred income taxes

     (10,912     (38,971

Excess tax benefit related to stock awards

     (246     (782

Loss on disposal of subsidiaries

     —          7,962   

Loss (gain) on sale of property, plant and equipment

     12,316        (1,773

Other, net

     659        8,689   

Change in operating assets and liabilities, exclusive of net assets acquired:

    

Accounts receivable

     (292,706     (116,458

Inventories

     (483,071     160,790   

Prepaid expenses and other current assets

     113,012        73,492   

Other assets

     25,034        6,552   

Accounts payable, accrued expenses and other liabilities

     984,651        (168,735
  

 

 

   

 

 

 

Net cash provided by operating activities

     1,240,282        498,857   
  

 

 

   

 

 

 

Cash flows from investing activities:

    

Cash paid for business and intangible asset acquisitions, net of cash

     (177,632     —     

Proceeds from sale of discontinued operations and subsidiaries, net of cash

     10,191        531,189   

Acquisition of property, plant and equipment

     (963,145     (624,060

Proceeds from sale of property, plant and equipment

     15,784        161,138   

Investments in non-marketable equity securities

     (11,939     (3,600

Other, net

     5,294        (4,000
  

 

 

   

 

 

 

Net cash (used in) provided by investing activities

     (1,121,447     60,667   
  

 

 

   

 

 

 

Cash flows from financing activities:

    

Borrowings under debt agreements

     5,966,937        6,175,953   

Payments toward debt agreements

     (5,988,232     (6,400,089

Payments to acquire treasury stock

     (85,576     (260,274

Dividends paid to stockholders

     (63,138     (68,211

Net proceeds from exercise of stock options and issuance of common stock under employee stock purchase plan

     18,062        15,771   

Treasury stock minimum tax withholding related to vesting of restricted stock

     (7,606     (34,312

Cash paid to purchase noncontrolling interest

     (345     (1,720

Excess tax benefit related to stock awards

     246        782   

Other, net

     (2,897     (4,719
  

 

 

   

 

 

 

Net cash used in financing activities

     (162,549     (576,819
  

 

 

   

 

 

 

Effect of exchange rate changes on cash and cash equivalents

     (42,572     6,171   
  

 

 

   

 

 

 

Net decrease in cash and cash equivalents

     (86,286     (11,124

Cash and cash equivalents at beginning of period

     1,000,249        1,011,373   
  

 

 

   

 

 

 

Cash and cash equivalents at end of period

   $ 913,963      $ 1,000,249   
  

 

 

   

 

 

 


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     Fiscal year ended  
     August 31,
2015
    August 31,
2014
    August 31,
2015
    August 31,
2014
 

Operating income (U.S. GAAP)

   $ 150,383      $ 46,643      $ 555,411      $ 204,074   

Amortization of intangibles

     7,352        5,677        24,449        23,857   

Stock-based compensation expense and related charges

     9,459        2,367        62,563        8,994   

Restructuring and related charges

     1,232        19,717        33,066        85,369   

Distressed customer charges

     —          —          —          15,113   

Acquisition costs and certain purchase accounting adjustments

     (5,480     —          (5,480     —     

Loss on disposal of subsidiaries

     —          5,057        —          7,962   
  

 

 

   

 

 

   

 

 

   

 

 

 

Core operating income (Non-U.S. GAAP)

   $ 162,946      $ 79,461      $ 670,009      $ 345,369   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) attributable to Jabil Circuit, Inc. (U.S. GAAP)

   $ 87,702      $ (26,197   $ 284,019      $ 241,313   

Amortization of intangibles, net of tax

     7,032        5,644        23,925        20,728   

Stock-based compensation expense and related charges, net of tax

     10,443        2,019        62,914        7,903   

Restructuring and related charges, net of tax

     1,048        17,449        32,219        72,892   

Distressed customer charges, net of tax

     —          (991     —          10,243   

Acquisition costs and certain purchase accounting adjustments, net of tax

     (5,480     —          (5,480     (9,064

Loss on disposal of subsidiaries, net of tax

     —          5,057        —          7,962   

Loss (income) from discontinued operations, net of tax

     2,473        961        7,698        (20,554

Loss (gain) on sale of discontinued operations, net of tax

     —          6,243        875        (223,299
  

 

 

   

 

 

   

 

 

   

 

 

 

Core earnings (Non-U.S. GAAP)

   $ 103,218      $ 10,185      $ 406,170      $ 108,124   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net earnings (loss) per share (U.S. GAAP):

        

Basic

   $ 0.45      $ (0.13   $ 1.47      $ 1.19   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ 0.45      $ (0.13   $ 1.45      $ 1.19   
  

 

 

   

 

 

   

 

 

   

 

 

 

Core earnings per share (Non-U.S. GAAP):

        

Basic

   $ 0.53      $ 0.05      $ 2.10      $ 0.53   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ 0.53      $ 0.05      $ 2.07      $ 0.53   
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average shares outstanding used in the calculations of earnings per share (U.S. GAAP):

        

Basic

     193,904        198,053        193,689        202,497   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

     196,351        198,053        196,005        202,497   
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average shares outstanding used in the calculations of earnings per share (Non-U.S. GAAP):

        

Basic

     193,904        198,053        193,689        202,497   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

     196,351        199,967        196,005        204,269   
  

 

 

   

 

 

   

 

 

   

 

 

 


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 Company’s 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
    Twelve
months
ended
 
     August 31,
2015
    August 31,
2015
 

Numerator:

    

Operating income (U.S. GAAP)

   $ 150,383      $ 555,411   

Tax effect(1)

     (29,498     (136,083
  

 

 

   

 

 

 

After-tax operating income

     120,885        419,328   
     x4        x1   
  

 

 

   

 

 

 

Annualized after-tax operating income

   $ 483,540      $ 419,328   
  

 

 

   

 

 

 

Core operating income (Non-U.S. GAAP)

   $ 162,946      $ 670,009   

Tax effect(2)

     (29,103     (137,385
  

 

 

   

 

 

 

After-tax core operating income

     133,843        532,624   
     x4        x1   
  

 

 

   

 

 

 

Annualized after-tax core operating income

   $ 535,372      $ 532,624   
  

 

 

   

 

 

 

Denominator:

    

Average total Jabil Circuit, Inc. stockholders’ equity(3)

   $ 2,313,258      $ 2,278,342   

Average notes payable, long-term debt and capital lease obligations, less current installments(3)

     1,503,210        1,508,072   

Average current installments of notes payable, long-term debt and capital lease obligations(3)

     167,599        168,396   

Average cash and cash equivalents(3)

     (938,378     (957,106
  

 

 

   

 

 

 

Net invested capital asset base

   $ 3,045,689      $ 2,997,704   
  

 

 

   

 

 

 

Return on Invested Capital (U.S. GAAP)

     15.9     14.0

Adjustments noted above

     1.7     3.8

Core Return on Invested Capital (Non-U.S. GAAP)

     17.6     17.8


 

(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 for the three months ended August 31, 2015 and dividing by two. The average is based on the addition of the account balance at the end of the most recently-ended fiscal year to the account balance at the end of the prior fiscal year for the twelve months ended August 31, 2015 and dividing by two.