Concentration of Risk and Segment Data

9 Months Ended

May 31, 2011

Concentration of Risk and Segment Data [Abstract]

Concentration of Risk and Segment Data

Note 5. Concentration of Risk and Segment Data

a. Concentration of Risk

     The Company operates in 24 countries worldwide. Sales to unaffiliated customers are based on the Company’s location that provides the comprehensive electronics design, production and product management services. The following table sets forth external net revenue, net of intercompany eliminations, and long-lived asset information where individual countries represent a material portion of the total (in thousands):

	Three months ended				Nine months ended
	May 31,		May 31,		May 31,		May 31,
	2011		2010		2011		2010
External net revenue:
Mexico	$	944,212	$	906,408	$	2,903,047	$	2,465,588
China		833,104		568,882		2,428,246		1,706,632
United States		601,659		541,154		1,746,466		1,479,988
Hungary		526,022		340,856		1,365,038		862,959
Malaysia		298,788		329,131		855,336		828,972
Singapore		285,334		9,054		648,944		13,380
Other		738,569		760,093		2,291,455		2,190,959
	$	4,227,688	$	3,455,578	$	12,238,532	$	9,548,478

	May 31,		August 31,
	2011		2010
Long-lived assets:
China	$	542,334	$	483,181
United States		260,088		255,108
Mexico		197,919		212,409
Poland		126,306		98,395
Taiwan		118,885		110,237
Malaysia		118,104		102,700
Other		358,850		321,930
	$	1,722,486	$	1,583,960

     Total foreign source net revenue represented 85.8% and 85.7% of net revenue for the three months and nine months ended May 31, 2011, respectively, compared to 84.3% and 84.5% for the three months and nine months ended May 31, 2010, respectively.

     Sales of the Company’s products are concentrated among specific customers. For the nine months ended May 31, 2011, the Company’s five largest customers accounted for approximately 48% of its net revenue and 48 customers accounted for approximately 90% of its net revenue. Sales to the above customers were reported in the Diversified Manufacturing Services (“DMS”), Enterprise & Infrastructure (“E&I”) and High Velocity Systems (“HVS”) segments.

     Production levels for the DMS and HVS segments are subject to seasonal influences. The Company may realize greater net revenue during its first fiscal quarter due to higher demand for consumer related products manufactured in the DMS and HVS segments during the holiday selling season. Therefore, quarterly results should not be relied upon as necessarily being indicative of results for the entire fiscal year.

b. Segment Data

     Operating segments are defined as components of an enterprise that engage in business activities from which it may earn revenues and incur expenses; for which separate financial information is available; and whose operating results are regularly reviewed by the chief operating decision maker to assess the performance of the individual segment and make decisions about resources to be allocated to the segment.

     The Company derives its revenue from providing comprehensive electronics design, production and product management services. Management, including the Chief Executive Officer, the Chief Financial Officer and the Chief Operating Officer evaluates performance and allocates resources on a segment basis. Prior to the first quarter of fiscal year 2011, the Company managed its business based on three segments, Electronic Manufacturing Services, Consumer and Aftermarket Services. On September 1, 2010, the Company reorganized its reporting structure to align with the chief operating decision maker’s management of resource allocation and performance assessment. Accordingly, the Company’s operating segments now consist of three segments — DMS, E&I and HVS. All prior period disclosures below have been restated to reflect this change.

     Net revenue for the operating segments is attributed to the segment in which the service is performed. An operating segment’s performance is evaluated based on its pre-tax operating contribution, or segment income. Segment income is defined as net revenue less cost of revenue, segment selling, general and administrative expenses, segment research and development expenses and an allocation of corporate manufacturing expenses and selling, general and administrative expenses, and does not include stock-based compensation expense, amortization of intangibles, restructuring and impairment charges, settlement of receivables and related charges, loss on disposal of subsidiaries, other expense, interest income, interest expense, income tax expense or adjustment for net income attributable to noncontrolling interests. Total segment assets are defined as trade accounts receivable, inventories, net customer-related machinery and equipment, intangible assets net of accumulated amortization and goodwill. All other non-segment assets are reviewed on a global basis by management.

     The following table sets forth operating segment information (in thousands):

	Three months ended				Nine months ended
	May 31,		May 31,		May 31,		May 31,
	2011		2010		2011		2010
Net revenue
DMS	$	1,532,902	$	1,064,315	$	4,328,907	$	2,968,920
E&I		1,382,633		1,197,479		3,783,550		3,138,725
HVS		1,312,153		1,193,784		4,126,075		3,440,833
	$	4,227,688	$	3,455,578	$	12,238,532	$	9,548,478

Segment income and reconciliation of
income before income tax

	Three months ended				Nine months ended
	May 31,		May 31,		May 31,		May 31,
	2011		2010		2011		2010
DMS	$	94,338	$	61,107	$	275,522	$	160,489
E&I		54,052		56,795		163,410		133,601
HVS		29,383		13,959		89,096		39,847
Total segment income		177,773		131,861		528,028		333,937
Reconciling items:
Stock-based compensation expense		20,053		27,487		59,854		67,980
Amortization of intangibles		5,187		6,206		16,821		19,954
Restructuring and impairment charges		—		1,635		628		5,705

	Three months ended						Nine months ended
	May 31,			May 31,			May 31,			May 31,
	2011			2010			2011			2010
Settlement of receivables and related charges		—			—			13,607			—
Loss on disposal of subsidiaries		—			—			23,944			15,722
Other expense		1,771			960			2,418			3,123
Interest income		(897	)		(626	)		(2,486	)		(2,177	)
Interest expense		25,149			19,503			73,088			59,649
Income before income tax	$	126,510		$	76,696		$	340,154		$	163,981

	May 31,		August 31,
	2011		2010
Total assets
DMS	$	2,331,431	$	2,194,998
E&I		1,291,140		1,033,910
HVS		1,154,217		1,469,476
Other non-allocated assets		2,178,780		1,669,363
	$	6,955,568	$	6,367,747