Discontinued Operations

6 Months Ended

Feb. 29, 2016

Discontinued Operations [Abstract]

Discontinued Operations

2. Discontinued Operations

On December 17, 2013, the Company announced that it entered into a stock purchase agreement with iQor Holdings, Inc. (“iQor”) for the sale of Jabil’s Aftermarket Services (“AMS”) business for consideration of $725.0 million, which consists of $675.0 million in cash and an aggregate liquidation preference value of $50.0 million in Senior Non-Convertible Cumulative Preferred Stock of iQor that accretes dividends at an annual rate of 8 percent and is redeemable in nine years or upon a change in control. The purchase price was finalized during fiscal year 2015 and was reduced by $100.2 million for cash, indebtedness, taxes, interest and certain working capital accounts of the Company’s AMS business. Also, as part of this transaction, the Company is subject to a limited covenant not to compete. On April 1, 2014, the Company completed the sale of the AMS business except for the Malaysian operations, for which the sale was completed on December 31, 2014. In connection with the AMS transaction, the Company entered into a transition services agreement effective April 1, 2014 to provide certain administrative services to facilitate the orderly transfer of the business operations to iQor. This agreement is not material and the continuing cash flows are not significant.

For all periods presented, the operating results associated with this business have been reclassified into loss from discontinued operations, net of tax in the Condensed Consolidated Statements of Operations. The following table provides a summary of AMS amounts included in discontinued operations (in thousands):

	Three months ended				Six months ended
	February 29,		February 28,		February 29,		February 28,
	2016		2015		2016		2015
Net revenue	$	―	$	3,634	$	―	$	14,624
Loss from discontinued operations, before tax	$	―		(4,571)	$	―		(3,707)
Income tax (benefit) expense		―		(9)		―		2
Loss from discontinued operations, net of tax	$	―	$	(4,562)	$	―	$	(3,709)
Loss on sale of discontinued operations, before tax	$	―	$	(372)	$	―	$	(1,982)
Income tax expense		―		575		―		575
Loss on sale of discontinued operations, net of tax	$	―	$	(947)	$	―	$	(2,557)
Discontinued operations, net of tax	$	―	$	(5,509)	$	―	$	(6,266)