Concentration of Risk and Segment Data

9 Months Ended

May 31, 2020

Segment Reporting [Abstract]

Concentration of Risk and Segment Data

Concentration of Risk and Segment Data

Concentration of Risk

Sales of the Company’s products are concentrated among specific customers. During the nine months ended May 31, 2020, the Company’s five largest customers accounted for approximately 47% of its net revenue and 72 customers accounted for approximately 90% of its net revenue. Sales to these customers were reported in the Electronics Manufacturing Services (“EMS”) and Diversified Manufacturing Services (“DMS”) operating segments.

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

Segment Data

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. Segment income does not include amortization of intangibles, stock-based compensation expense and related charges, restructuring, severance and related charges, distressed customer charges, acquisition and integration charges, impairment on securities, loss on disposal of subsidiaries, settlement of receivables and related charges, impairment of notes receivable and related charges,

restructuring of securities loss, goodwill impairment charges, business interruption and impairment charges, net, income (loss) from discontinued operations, gain (loss) on sale of discontinued operations, other expense (excluding certain components of net periodic benefit cost), interest income, interest expense, income tax expense or adjustment for net income (loss) attributable to noncontrolling interests. Transactions between operating segments are generally recorded at amounts that approximate those at which we would transact with third parties.

The following table presents the Company’s revenues disaggregated by segment (in thousands):

	Three months ended
	May 31, 2020						May 31, 2019
	EMS		DMS		Total		EMS		DMS		Total
Timing of transfer
Point in time	$	963,512	$	1,380,477	$	2,343,989	$	699,825	$	1,156,213	$	1,856,038
Over time	2,949,416		1,042,237		3,991,653		3,288,664		990,900		4,279,564
Total	$	3,912,928	$	2,422,714	$	6,335,642	$	3,988,489	$	2,147,113	$	6,135,602

	Nine months ended
	May 31, 2020						May 31, 2019
	EMS		DMS		Total		EMS		DMS		Total
Timing of transfer
Point in time	$	3,340,992	$	4,391,837	$	7,732,829	$	1,957,349	$	4,722,696	$	6,680,045
Over time	8,819,442		3,414,152		12,233,594		9,338,970		2,689,852		12,028,822
Total	$	12,160,434	$	7,805,989	$	19,966,423	$	11,296,319	$	7,412,548	$	18,708,867

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

	Three months ended						Nine months ended
	May 31, 2020			May 31, 2019			May 31, 2020			May 31, 2019
Segment income and reconciliation of income before income tax
EMS	$	102,372		$	130,869		$	291,902		$	303,618
DMS	69,712			54,896			316,945			326,866
Total segment income	$	172,084		$	185,765		$	608,847		$	630,484
Reconciling items:
Amortization of intangibles	(13,178		)	(7,610		)	(42,895		)	(23,033		)
Stock-based compensation expense and related charges	(16,882		)	(14,506		)	(62,214		)	(47,452		)
Restructuring, severance and related charges	(69,150		)	(9,340		)	(144,005		)	(16,182		)
Distressed customer charge	—			—			(14,963		)	—
Business interruption and impairment charges, net(1)	(4,574		)	—			(4,574		)	2,860
Acquisition and integration charges	(6,119		)	(13,391		)	(30,005		)	(35,066		)
Impairment on securities	—			—			(12,205		)	—
Other expense (net of periodic benefit cost)	(8,399		)	(14,084		)	(32,673		)	(39,391		)
Interest income	1,864			6,758			13,144			15,897
Interest expense	(41,873		)	(50,514		)	(132,967		)	(139,326		)
Income before income tax	$	13,773		$	83,078		$	145,490		$	348,791

⁽¹⁾Charges for the three and nine months ended May 31, 2020, relate to a flood that impacted our facility in Huangpu, China. Charges, net of insurance proceeds of $2.9 million for the nine months ended May 31, 2019, relate to business interruption and asset impairment costs associated with damage from Hurricane Maria, which impacted our operations in Cayey, Puerto Rico.

As of May 31, 2020, the Company operated in 31 countries worldwide. Sales to unaffiliated customers are based on the Company 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):

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	Three months ended				Nine months ended
	May 31, 2020		May 31, 2019		May 31, 2020		May 31, 2019
External net revenue:
Singapore	$	1,470,283	$	1,324,901	$	4,717,568	$	5,232,505
Mexico	1,165,154		1,200,555		3,510,110		3,248,757
China	1,140,270		1,261,707		3,263,591		3,779,162
Malaysia	378,106		427,858		1,374,335		1,221,819
Vietnam	222,477		196,443		651,255		516,801
Other	908,906		892,812		2,966,952		2,690,987
Foreign source revenue	5,285,196		5,304,276		16,483,811		16,690,031
U.S.	1,050,446		831,326		3,482,612		2,018,836
Total	$	6,335,642	$	6,135,602	$	19,966,423	$	18,708,867

	May 31, 2020		August 31, 2019
Long-lived assets:
China	$	1,490,313	$	1,579,904
Mexico	393,079		418,641
Malaysia	223,618		154,386
Switzerland	219,290		158
Singapore	145,249		156,028
Taiwan	115,436		123,608
Vietnam	109,371		85,728
Hungary	100,568		85,809
Other	451,396		462,261
Long-lived assets related to foreign operations	3,248,320		3,066,523
U.S.	1,159,594		1,146,335
Total	$	4,407,914	$	4,212,858