CASESTUDY

How Jabil, Inc. Developed a Closed-Loop Process that Helped Identify and Manage FX Exposures

EXECUTIVE SUMMARYJabil, Inc. (Jabil) achieved double-digit growth by strategically building new customer relationships, entering new

markets, expanding services and forging new global operations in key worldwide locations. A natural byproduct of this

growth is exposure to volatility in foreign currencies.

In the past, even with a single instance of SAP, the independent operation of each manufacturing facility made it difficult

for Jabil’s financial risk management treasury team to accurately identify and effectively mitigate the underlying sources

of FX exposure at the enterprise level. To address the issue, Jabil replaced its spreadsheet-intensive FX management

process with a solution that includes FiREapps for Balance Sheet for full lifecycle FX exposure management and FXall

for trade execution.

The new closed-loop process leverages Jabil’s SAP ERP system to provide complete and timely data for analysis of net

balance sheet exposures. Treasury can now gain visibility into global balance sheet exposures in as little as 10 minutes

any day of the week, as opposed to spending a full day once a month working with the spreadsheets from each site.

The accounting and reporting for derivatives is centralized and automated with FiREapps for Balance Sheet, enabling

treasury and accounting to focus on the financial impact of hedging rather than spending time with time-consuming,

manual processes and spreadsheets. In addition, the solution enables period-over-period analysis that reveals trends

and issues, and post-trade data is cycled back into FiREapps for Balance Sheet and the ERP system to help treasury

continuously improve forecast accuracy, hedge effectiveness and compliance.

FiREapps | Jabil, Inc. Case Study | 2 of 10Copyright © 2018 Rim Tec Inc. All rights reserved. 042618

JABIL, INC. OVERVIEWINDUSTRY: Global manufacturing

BUSINESS LANDSCAPE: 60 sites in 27 countries

ERP ENVIRONMENT: SAP

ANNUAL REVENUE: $19 billion SOLUTION: FiREapps for Balance SheetTM

“Treasury can now gain visibility into global balance sheet exposures in as little as 10 minutes any day of the week, as opposed to spending a full day once a month working with the spreadsheets from each site.”

Site controllers needed to be able to view and verify that account balances were accurate based on their

deep understanding of business operations, local conditions and accounting practices.

The financial risk management team needed a global integrated solution to consolidate net balance

sheet exposures that needed to be hedged.

Time-zone related delays needed to be eliminated in order to lean the process and optimize

hedge results.

The company needed to ensure that the process was auditable, in compliance with company policy as

well as aligned with global regulatory requirements.

TO ENSURE THE SUCCESS OF THE NEW STRATEGY:

JABIL’S CHALLENGESNamed one the “World’s Most Admired Companies” by Fortune Magazine in 2016 and 2017, Jabil is known for its

commitment to innovation and Lean Six Sigma principles. Each business unit has the agility to anticipate and react to

fast-changing local, regional and global market conditions.

For Jabil’s financial risk management team, a decentralized operational environment made it very difficult to gain an

enterprise-level view of the company’s total balance sheet exposure to currency volatility. The spreadsheets submitted

by site controllers each month often contained data manually pulled from the SAP ERP system, which hindered the

efficiency and effectiveness of local site management and the corporate hedging program.

Adding to the challenge, the team made a strategic decision to transition from a transactional currency hedging

approach to a net balance sheet hedging approach.

Copyright © 2018 Rim Tec Inc. All rights reserved.

“For Jabil’s financial risk management team, a decentralized operational environment made it very difficult to gain an enterprise-level view of the company’s total balance sheet exposure to currency volatility.”

FiREapps | Jabil, Inc. Case Study | 3 of 10

Copyright © 2018 Rim Tec Inc. All rights reserved.

JABIL’S SOLUTIONJabil’s FX management solution incorporates the cloud-based FiREapps for Balance Sheet exposure management

platform with the Capella trade management and derivative accounting system, and leverages the company’s existing

investments in SAP and the FXall trading platform.

In keeping with Jabil’s focus on continuous process improvement, treasury tackled the problem by first working with

the site controllers to implement a closed-loop process for identifying, analyzing and managing global FX exposures,

and preparing compliant derivative accounting. “Our systematic process takes us from exposure data gathering all the

way through journal entries and formal disclosures in the financial statement,” says Luis Montiel, Jabil’s CFO. “It gives us

complete exposure visibility and control over the transaction flow from end to end.”

“FiREapps for Balance Sheet is a powerful platform for organizations that have struggled with manually pulling data

from their ERP systems. The ability to automatically extract data and aggregate information in one place is very useful

in helping us understand our non-functional exposures so we can mitigate risk. You can’t do that as easily with a custom

in-house solution,” says Montiel.

The workflow enables controlled and auditable collaboration between treasury and site controllers to improve FX

management accuracy, efficiency and speed.

“Our systematic process ... gives us complete exposure visibility and control over the transaction flow from end to end.”

Exposure AnalyticsCCY Analytics Pivot Analysis Visualizations Integration Service

ExposureData

Flexible Web-Based Presentation

FinData Forecast FinData FinData Hedges Rates

Exposure Data Sources

Balance Sheet Actuals[ FiREapps Extract Tools ]

Other Databases & Systems

Summary Hedge Data

Liquidity Provider

Forecasts to be Hedged

Hedge Journal Entries

FiREapps | Jabil, Inc. Case Study | 4 of 10

AUTOMATED DATA CAPTUREOn a daily basis, FiREapps for Balance Sheet automatically aggregates, harmonizes and validates current and historical

balance sheet data from SAP, providing clear visibility into current balance sheet exposures with no need for input from

site controllers.

AUTOMATED EXPOSURE DEFINITION & CALCULATIONFiREapps for Balance Sheet applies Jabil’s business rules and various input parameters to accurately define and

calculate net balance sheet exposure for each site.

EXPOSURE DATA INTEGRITY ANALYTICSThe solution embraces and extends the work treasury and site controllers had already done to improve the quality of the

underlying multi-currency accounting data in SAP. FiREapps for Balance Sheet exposure data integrity analytics and the

ability to dynamically capture new sites and accounts as they are added further improve the completeness and accuracy

of the information available for analysis. If a site adds a new currency or a new account, the solution dynamically aligns

with the new environment, eliminating blind spots and giving treasury the visibility it needs to understand the company’s

total exposure at any given point in time.

FLEXIBLE EXPOSURE ANALYTICSFiREapps for Balance Sheet provides detailed and summary-level views of balance sheet exposure across all currency

pairs in near real time, making it much easier for business units around the world to verify balances and spot and fix

accounting discrepancies and errors before they become serious problems.

Treasury can easily understand the underlying non-functional currency account balances that are creating exposure

with the local business units and examine the company’s exposure by currency pair at the corporate or entity level.

BALANCE SHEET HEDGE RECOMMENDATIONSFiREapps for Balance Sheet calculates and displays recommended hedges based on various input parameters defined

by Jabil. After treasury and the site controllers review, modify if necessary and approve the recommendations, the

system evaluates the trades and, according to policy, allocates them to the owning internal counterparty before they

are entered into FXall for execution.

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Copyright © 2018 Rim Tec Inc. All rights reserved.

CRITICAL DOWNSTREAM PROCESSINGThe solution generates exposure information that is “pushed” to FXall, combined with the cash flow hedge trades and

then “pulled” into the derivative management and accounting module — all without overburdening Jabil’s treasury staff,

site controllers or IT resources.

DERIVATIVE MANAGEMENT & ACCOUNTINGFiREapps for Balance Sheet with Capella provides centralized visibility and segregation of duties, as well as technical

accounting intelligence that enables Jabil to enforce complex accounting rules around the globe, satisfy all financial

and reporting requirements (including adherence to the latest compliance requirements) and implement a global control

structure to support their use of derivative instruments.

Closing the loop, validated and confirmed deals are sent from Capella back into FiREapps for use in monthly reporting,

historical analysis and future hedging decisions. Accounting entries are also directed into Jabil’s ERP environment for

financial statement accounting and reporting purposes.

CASH FLOW HEDGE ACCOUNTING COMPLIANCEBeyond the key role of supporting Jabil’s balance sheet exposure management program, the solution also plays an

important role in Jabil’s cash flow hedging program by automatically generating inception documentation when cash

flow hedges are loaded in the system. Effectiveness-testing requirements are satisfied with the link into the Capella

Regression Library. At month-end, the system automatically calculates the derivatives’ fair value, determines what

effective amounts should be recorded to OCI and identifies any measureable ineffectiveness. Each site receives its own

set of journal entries in its functional currency.

FiREapps | Jabil, Inc. Case Study | 6 of 10

“…The [FiREapps] solution also plays an important role in Jabil’s cash flow hedging program by automatically generating the inception documentation when cash flow hedges are loaded into the system.”

“FiREapps for Balance Sheet with Capella ... enables Jabil to enforce complex accounting rules around the globe.”

Copyright © 2018 Rim Tec Inc. All rights reserved. FiREapps | Jabil, Inc. Case Study | 7 of 10

JABIL’S RESULTSWith the new FX management process and supporting technology in place, Jabil has struck an effective and efficient

balance between meeting the specific needs of each site and providing the visibility and control required to manage FX

risk globally.

The adaptive program leverages existing IT investments and accounting best practices while accommodating growth

and enabling treasury to respond quickly to changes in business conditions, ERP systems, currency markets and

risk tolerances.

Management of both the balance sheet and cash flow hedge programs are now streamlined, while preserving entity-

level trade and accounting information. Having FiREapps for Balance Sheet and Capella situated as a receiver of

executed trades from FXall helps Jabil meet the U.S. GAAP requirements for valuations, accounting and disclosures.

FINANCIAL STATEMENT REPORTINGA technical accounting team monitors and interacts with Big 4 Accounting Firms, the FASB, the IASB and the SEC to

capture and codify changes in the current guidance in a flexible and easy-to-use application. FiREapps for Balance Sheet

provides a consolidated view of the disclosure tables (both position and performance) and market risk disclosures

(sensitivity analysis) with no intervention from the sites.

A number of standard reports are available to reconcile the related balance sheet accounts and help Jabil understand the

period-end impact of the hedge program. A report-writer is also available if a customized report is needed. This allows

Jabil’s corporate treasury group to leverage the solution within their decentralized exposure management structure and

meet their reporting deadlines, closing the loop on the entire process.

Gain a consolidated view of disclosure tables and market risk disclosures

Understand the period-end impact of their hedge program

Meet reporting deadlines

FiREappsENABLESJABIL TO:

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SINCE IMPLEMENTING THE NEW AUTOMATED PROCESS

Reduced time to FX exposure visibility from a full day to less than 10 minutes with automated data extraction from SAP into FiREapps.

Increased the frequency of exposure analysis from monthly to weekly with on-demand analytics.

Gained visibility into consolidated global exposures, enabling efficient distributed entity-level signoffs with consolidated oversight at the corporate level. Reducing the review time significantly.

Improved forecasts and hedge results using historical period-over-period analytics to identify trends and adjust hedge actions accordingly.

Improved collaboration with site controllers using FiREapps for Balance Sheet decision engines, trade netting and smart trade recommendations.

Established compliant balance sheet and cash flow hedge accounting programs that provide visibility, automation and control using the rules-based accounting solution with a robust segregation-of-duties framework.

Simplified the financial statement reporting process with the support of Hedge Trackers’ expert technical accounting staff while ensuring adherence to U.S. and International Accounting Standards.

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LOOKING AHEADThe FiREapps and HedgeTrackers team is working collaboratively with Jabil to explore further automation options. As

the only cloud-based FX solution for full lifecycle exposure management, FiREapps for Balance Sheet with Capella can

provide integrated, straight-through processing for Jabil’s balance sheet and cash flow hedge accounting programs,

including seamless interoperability with liquidity providers, ERP systems and planning systems.

“The partnership with FiREapps and Hedge Trackers has provided dynamic and sustainable solutions for Jabil. It has

also enabled my team to enhance their partnerships with the business across Jabil and be more advisory and strategic

on FX risk management,” says Sergio Cadavid, Jabil’s SVP and Corporate Treasurer.

Exposure AnalyticsCCY Analytics Pivot Analysis Visualizations Integration Service

ExposureData

Flexible Web-Based Presentation

FinData Forecast FinData FinData Hedges Rates

Exposure Data Sources

Balance Sheet Actuals[ FiREapps Extract Tools ]

Other Databases & Systems

Summary Hedge Data

Liquidity Provider

Forecasts to be Hedged

Hedge Journal Entries

“The partnership with FiREapps and Hedge Trackers has provided dynamic and sustainable solutions for Jabil.”

FiREapps | Jabil, Inc. Case Study | 10 of 10

FiREapps is the leading provider of corporate currency analytics and FX exposure management technologies.

Established in 2006, FiREapps developed the first solution to automate foreign exchange exposure management

for multinational companies. Through a combination of software solutions and expert analysis, FiREapps helps

companies ensure they’re accurately measuring and managing their FX exposures. Numerous Fortune 500

companies rely on FiREapps technology to help them reduce FX risk and increase efficiency every day.

FiREapps is headquartered in Scottsdale, Arizona, with offices in Portland, London and Frankfurt.

NEXT STEPSIf your organization continues to manage currency risk manually – or has no FX program in place, find out how your

company can benefit by transitioning to a fully automated currency risk management program.

Copyright © 2018 Rim Tec Inc. All rights reserved. 042618