Restructuring and Related Charges

9 Months Ended

May 31, 2017

Restructuring and Related Charges [Abstract]

Restructuring and Related Charges

12. Restructuring and Related Charges

a. 2017 Restructuring Plan

In conjunction with the restructuring plan that was approved by the Company’s Board of Directors on September 15, 2016 (the “2017 Restructuring Plan”), the Company charged $31.4 million and $108.9 million of restructuring and related charges to the Condensed Consolidated Statement of Operations during the three months and nine months endedMay 31,2017, respectively. The 2017 Restructuring Plan is intended to better align the Company’s global capacity and administrative support infrastructure in order to further optimize organizational effectiveness. This action includes headcount reductions across the Company’s Selling, General and Administrative cost base and capacity realignment in higher cost locations. The restructuring and related charges during the three months and nine months endedMay 31,2017 include cash costs of $17.3 million and $43.3 million related to employee severance and benefit costs, respectively, $1.2 million and $5.6 million related to lease costs, respectively, $1.1 million and $1.4 million of other related costs, respectively, as well as non-cash costs related to asset write-off costs of $11.8 million and $58.6 million, respectively.

The Company currently expects to recognize approximately $195.0 million in pre-tax restructuring and other related costs over the course of the Company’s fiscal years 2017 and 2018 under the 2017 Restructuring Plan. The restructuring and related charges are expected to include $55.0 million to $75.0 million of employee severance and benefit costs; $110.0 million to $130.0 million of asset write-off costs; and $10.0 million of contract termination costs and other related costs.Since the inception of the 2017 Restructuring Plan, a total of $108.9 million of restructuring and related costs have been recognized. Of the $108.9 million recognized to date, $19.1 million was allocated to the EMS segment, $65.9 million was allocated to the DMS segment and $23.9 million was not allocated to a segment. The remaining $86.1 million of the restructuring and related costs expected to be recognized reflects the Company’s intention only and restructuring decisions, and the timing of such decisions, at certain plants are still subject to the finalization of timetables for the transition of functions and consultation with the Company’s employees and their representatives.

The tables below set forth the significant components and activity in the 2017 Restructuring Plan during the three months and nine months endedMay 31,2017 (in thousands):

2017 Restructuring Plan – Three Months Ended May 31, 2017
			Restructuring		Asset Write-off
	Liability Balance at		Related		Charge and Other		Cash		Liability Balance at
	February 28, 2017		Charges		Non-Cash Activity		Payments		May 31, 2017
Employee severance and benefit costs	$	10,337	$	17,328	$	20	$	(5,085)	$	22,600
Lease costs		3,572		1,151		26		(1,049)		3,700
Asset write-off costs		―		11,838		(11,838)		―		―
Other related costs		50		1,082		―		(518)		614
Total	$	13,959	$	31,399	$	(11,792)	$	(6,652)	$	26,914

2017 Restructuring Plan – Nine Months Ended May 31, 2017
			Restructuring		Asset Write-off
	Liability Balance at		Related		Charge and Other		Cash		Liability Balance at
	August 31,2016		Charges		Non-Cash Activity		Payments		May 31, 2017
Employee severance and benefit costs	$	―	$	43,314	$	20	$	(20,734)	$	22,600
Lease costs		―		5,600		26		(1,926)		3,700
Asset write-off costs		―		58,543		(58,543)		―		―
Other related costs		―		1,421		―		(807)		614
Total	$	―	$	108,878	$	(58,497)	$	(23,467)	$	26,914

The tables below set forth the significant components and activity in the 2017 Restructuring Plan by reportable segment during the three months and nine months endedMay 31,2017 (in thousands):

2017 Restructuring Plan – Three Months Ended May 31, 2017
				Restructuring		Asset Write-off
		Liability Balance at		Related		Charge and Other		Cash		Liability Balance at
		February 28, 2017		Charges		Non-Cash Activity		Payments		May 31, 2017
	EMS	$	471	$	11,061	$	(1,819)	$	(1,624)	$	8,089
	DMS		3,639		17,836		(10,188)		(2,334)		8,953
	Other		9,849		2,502		215		(2,694)		9,872
	Total	$	13,959	$	31,399	$	(11,792)	$	(6,652)	$	26,914

2017 Restructuring Plan – Nine Months Ended May 31, 2017
				Restructuring		Asset Write-off
		Liability Balance at		Related		Charge and Other		Cash		Liability Balance at
		August 31, 2016		Charges		Non-Cash Activity		Payments		May 31, 2017
	EMS	$	―	$	19,118	$	(8,542)	$	(2,487)	$	8,089
	DMS		―		65,842		(49,937)		(6,952)		8,953
	Other		―		23,918		(18)		(14,028)		9,872
	Total	$	―	$	108,878	$	(58,497)	$	(23,467)	$	26,914

b. 2013 Restructuring Plan

In conjunction with the restructuring plan that was approved by the Company’s Board of Directors in fiscal year 2013 (the “2013 Restructuring Plan”), the Company charged $1.3 million and $4.7 million of restructuring and related charges to the Condensed Consolidated Statement of Operations during the three months and nine months endedMay 31,2017, respectively, compared to $4.5 million and $8.3 million during the three months and nine months endedMay 31,2016, respectively. The 2013 Restructuring Plan is intended to better align the Company’s manufacturing capacity in certain geographies and to reduce the Company’s worldwide workforce in order to reduce operating expenses. The restructuring and related charges during the three months and nine months endedMay 31,2017 include cash costs of $0.8 million and $3.4 million related to employee severance and benefit costs, respectively, and $0.5 million and $1.2 million of other related costs, respectively, as well as non-cash costs related to asset write-off costs of $0.0 million and $0.1 million, respectively. The restructuring and related charges during the three months and nine months endedMay 31,2016 include cash costs of $4.2 million and $7.7 million related to employee severance and benefit costs, respectively, and $0.3 million and $0.6 million of other related costs, respectively.

The Company currently expects to recognize approximately $179.0 million in pre-tax restructuring and other related costs over the course of the Company’s fiscal years 2013 through 2018 under the 2013 Restructuring Plan. Since the inception of the 2013 Restructuring Plan, a total of $166.5 million of restructuring and related costs have been recognized. Of the $166.5 million recognized to date, $128.8 million was allocated to the EMS segment, $28.8 million was allocated to the DMS segment and $8.9 million was not allocated to a segment. A majority of the total restructuring costs are related to employee severance and benefit arrangements. The charges related to the 2013 Restructuring Plan, excluding asset write-off costs, are currently expected to result in cash expenditures of approximately $157.4 million that have been or will be payable over the course of the Company’s fiscal years 2013 through 2018. The remaining $12.5 million of the restructuring and related costs expected to be recognized reflects the Company’s intention only and restructuring decisions, and the timing of such decisions, at certain plants are still subject to the finalization of timetables for the transition of functions and consultation with the Company’s employees and their representatives.

The tables below set forth the significant components and activity in the 2013 Restructuring Plan during the three months and nine months endedMay 31,2017 and 2016 (in thousands):

2013 Restructuring Plan – Three Months Ended May 31, 2017
			Restructuring		Asset Write-off
	Liability Balance at		Related		Charge and Other		Cash		Liability Balance at
	February 28, 2017		Charges		Non-Cash Activity		Payments		May 31, 2017
Employee severance and benefit costs	$	11,756	$	843	$	400	$	(6,875)	$	6,124
Lease costs		21		―		―		―		21
Other related costs		829		458		51		(449)		889
Total	$	12,606	$	1,301	$	451	$	(7,324)	$	7,034

2013 Restructuring Plan – Nine Months Ended May 31, 2017
			Restructuring		Asset Write-off
	Liability Balance at		Related		Charge and Other		Cash		Liability Balance at
	August 31, 2016		Charges		Non-Cash Activity		Payments		May 31, 2017
Employee severance and benefit costs	$	17,266	$	3,340	$	(322)	$	(14,160)	$	6,124
Lease costs		21		―		―		―		21
Asset write-off costs		―		70		(70)		―		―
Other related costs		740		1,241		16		(1,108)		889
Total	$	18,027	$	4,651	$	(376)	$	(15,268)	$	7,034

2013 Restructuring Plan – Three Months Ended May 31, 2016
			Restructuring		Asset Write-off
	Liability Balance at		Related		Charge and Other		Cash		Liability Balance at
	February 29, 2016		Charges		Non-Cash Activity		Payments		May 31, 2016
Employee severance and benefit costs	$	18,115	$	4,197	$	407	$	(3,234)	$	19,485
Lease costs		64		(43)		―		―		21
Other related costs		871		306		22		(310)		889
Total	$	19,050	$	4,460	$	429	$	(3,544)	$	20,395

2013 Restructuring Plan – Nine Months Ended May 31, 2016
			Restructuring		Asset Write-off
	Liability Balance at		Related		Charge and Other		Cash		Liability Balance at
	August 31, 2015		Charges		Non-Cash Activity		Payments		May 31, 2016
Employee severance and benefit costs	$	30,047	$	7,743	$	(404)	$	(17,901)	$	19,485
Lease costs		64		(43)		―		―		21
Other related costs		846		649		―		(606)		889
Total	$	30,957	$	8,349	$	(404)	$	(18,507)	$	20,395

The tables below set forth the significant components and activity in the 2013 Restructuring Plan by reportable segment during the three months and nine months endedMay 31,2017 and 2016 (in thousands):

2013 Restructuring Plan – Three Months Ended May 31, 2017
				Restructuring		Asset Write-off
		Liability Balance at		Related		Charge and Other		Cash		Liability Balance at
		February 28, 2017		Charges		Non-Cash Activity		Payments		May 31, 2017
	EMS	$	12,169	$	1,371	$	438	$	(7,309)	$	6,669
	DMS		437		(70)		13		(15)		365
	Total	$	12,606	$	1,301	$	451	$	(7,324)	$	7,034

2013 Restructuring Plan – Nine Months Ended May 31, 2017
				Restructuring		Asset Write-off
		Liability Balance at		Related		Charge and Other		Cash		Liability Balance at
		August 31, 2016		Charges		Non-Cash Activity		Payments		May 31, 2017
	EMS	$	17,338		4,651		(306)		(15,014)	$	6,669
	DMS		689		―		(70)		(254)		365
	Total	$	18,027	$	4,651	$	(376)	$	(15,268)	$	7,034

2013 Restructuring Plan – Three Months Ended May 31, 2016
				Restructuring		Asset Write-off
		Liability Balance at		Related		Charge and Other		Cash		Liability Balance at
		February 29, 2016		Charges		Non-Cash Activity		Payments		May 31, 2016
	EMS	$	17,115	$	4,460	$	429	$	(2,858)	$	19,146
	DMS		1,935		―		―		(686)		1,249
	Total	$	19,050	$	4,460	$	429	$	(3,544)	$	20,395

2013 Restructuring Plan – Nine Months Ended May 31, 2016
				Restructuring		Asset Write-off
		Liability Balance at		Related		Charge and Other		Cash		Liability Balance at
		August 31, 2015		Charges		Non-Cash Activity		Payments		May 31, 2016
	EMS	$	28,834	$	7,454	$	(395)	$	(16,747)	$	19,146
	DMS		1,960		1,014		(9)		(1,716)		1,249
	Other		163		(119)		―		(44)		―
	Total	$	30,957	$	8,349	$	(404)	$	(18,507)	$	20,395