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Concentration of Risk and Segment Data
 12 Months Ended
Aug. 31, 2016
Concentration of Risk and Segment Data [Abstract]  
Concentration of Risk and Segment Data

13. Concentration of Risk and Segment Data

a. Concentration of Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and trade receivables. The Company maintains cash and cash equivalents with various domestic and foreign financial institutions. Deposits held with the financial institutions may exceed the amount of insurance provided on such deposits, but may generally be redeemed upon demand. The Company performs periodic evaluations of the relative credit standing of the financial institutions and attempts to limit exposure with any one institution. With respect to trade receivables, the Company performs ongoing credit evaluations of its customers and generally does not require collateral. The Company maintains an allowance for potential credit losses on trade receivables.

Sales of the Company’s products are concentrated among specific customers. For fiscal year 2016, the Company’s five largest customers accounted for approximately 49% of its net revenue and 85 customers accounted for approximately 90% of its net revenue. As the Company is a provider of electronic manufacturing services and solutions and products are built based on customer specifications, it is impracticable to provide revenues from external customers for each product and service. Sales to the following customers who accounted for 10% or more of the Company’s net revenues, expressed as a percentage of consolidated net revenue, and the percentage of accounts receivable for each customer, were as follows:

Percentage of Net RevenuePercentage of Accounts Receivable
Fiscal Year Ended August 31,Fiscal Year Ended August 31,
20162015201420162015
Apple, Inc.24%24%18%*%19%
*Amount was less than 10% of total.

Sales to the above customer were reported in the DMS operating segment.

The Company procures components from a broad group of suppliers. Almost all of the products manufactured by the Company require one or more components that are available from only a single source.

b. Segment Data

Operating segments are defined as components of an enterprise that engage in business activities from which they 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. The chief operating decision maker evaluates performance and allocates resources on a segment basis. The Company’s operating segments consist of two segments – EMS and DMS, which are also the Company’s reportable segments. The EMS segment is focused around leveraging IT, supply chain design and engineering, technologies largely centered on core electronics, sharing of the Company’s large scale manufacturing infrastructure and the ability to serve a broad range of end markets. The EMS segment includes customers primarily in the automotive, capital equipment, computing and storage, digital home, industrial and energy, networking and telecommunications, point of sale and printing industries. The DMS segment is focused on providing engineering solutions and a focus on material sciences and technologies. The DMS segment includes customers primarily in the consumer lifestyles and wearable technologies, defense and aerospace, emerging growth, healthcare, mobility and packaging industries.

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. The AMS business was included in the DMS segment, and the results of operations of this business are classified as discontinued operations for all periods presented. See Note 2 – “Discontinued Operations” for further details.

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 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, other expense, interest income, interest expense, income tax expense or adjustment for net income (loss) attributable to noncontrolling interests. Total segment assets are defined as accounts receivable, inventories, net customer-related property, plant and equipment, intangible assets net of accumulated amortization and goodwill. All other non-segment assets are reviewed on a global basis by management. Transactions between operating segments are generally recorded at amounts that approximate those at which we would transact with third parties.

The following table sets forth operating segment information (in thousands):
Fiscal Year Ended August 31,
201620152014
Net revenue
EMS$11,029,132$10,777,810$10,638,588
DMS7,323,9547,121,3865,123,558
$18,353,086$17,899,196$15,762,146

Fiscal Year Ended August 31,
201620152014
Segment income and reconciliation of income before tax
EMS$373,732$297,097$242,181
DMS256,588372,912103,188
Total segment income$630,320$670,009$345,369
Reconciling items:
Amortization of intangibles (37,121)(24,449)(23,857)
Stock-based compensation expense and related charges(58,997)(62,563)(8,994)
Restructuring and related charges (11,369)(33,066)(85,369)
Distressed customer charges――(15,113)
Loss on disposal of subsidiaries ――(7,962)
Acquisition costs and certain purchase accounting
adjustments ―5,480―
Other expense (8,380)(5,627)(7,637)
Interest income 9,1289,9533,741
Interest expense (136,536)(128,091)(128,055)
Income from continuing operations before tax$387,045$431,646$72,123

August 31, 2016August 31, 2015
Total assets
EMS$2,615,237$2,865,172
DMS5,012,7984,241,699
Other non-allocated assets2,694,6422,484,729
$10,322,677$9,591,600

The Company operates in 28 countries worldwide. Sales to unaffiliated customers are based on the Company’s location that maintains the customer relationship and transacts the external sale. The following tables set 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):

Fiscal Year Ended August 31,
201620152014
External net revenue:
Singapore$4,983,711$5,053,864$2,935,212
China3,873,2123,941,7143,614,174
Mexico3,043,6092,555,5022,475,393
U.S.1,709,3912,142,6912,444,305
Hungary1,130,466912,669902,058
Malaysia1,113,4561,247,8971,299,543
Other2,499,2412,044,8592,091,461
$18,353,086$17,899,196$15,762,146

August, 31
20162015
Long-lived assets:
China$2,031,634$1,676,630
U.S.992,575946,238
Singapore235,11562,468
Mexico185,146173,188
Taiwan149,200135,316
Hungary106,48195,084
Spain72,64374,354
Malaysia63,84468,467
Poland52,72252,129
Other334,246266,377
$4,223,606$3,550,251

Total foreign source revenue was approximately $16.6 billion, $15.8 billion and $13.3 billion for fiscal years 2016, 2015 and 2014, respectively. Total long-lived assets related to the Company’s foreign operations were approximately $3.2 billion and $2.6 billion at August 31, 2016 and 2015, respectively.