Concentration of Risk and Segment Data

12 Months Ended

Aug. 31, 2024

Segment Reporting [Abstract]

Concentration of Risk and Segment Data

Concentration of Risk and Segment Data

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. For trade receivables, the Company performs ongoing credit evaluations of its customers and generally does not require collateral. The Company maintains an allowance for expected credit losses on trade receivables.

Sales of the Company’s products are concentrated among specific customers. For fiscal year 2024, the Company’s five largest customers accounted for approximately 36% of its net revenue and 88 customers accounted for approximately 90% of its net revenue. As the Company is a provider of 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 customer accounted for 10% or more of the Company’s net revenues, expressed as a percentage of consolidated net revenue:

	Percentage of Net Revenue Fiscal Year Ended August 31,
	2024		2023		2022
Apple, Inc.(1)	11	%	17	%	19	%

(1)Sales to this customer were reported in the DMS operating segment.

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

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 (“CODM”) 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 CODM 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 segments are organized based on the economic profiles of the services performed, including manufacturing capabilities, market strategy, margins, return on capital, and risk profiles.

The EMS segment is focused on leveraging IT, supply chain design and engineering, technologies largely centered on core electronics, utilizing the Company’s large scale manufacturing infrastructure and the ability to serve a broad range of end markets. The EMS segment is a high-volume business that produces product at a quicker rate (i.e. cycle time) and in larger quantities and includes customers primarily in the 5G, wireless and cloud, digital print and retail, industrial and semi-capital equipment, and networking and storage industries.

The DMS segment is focused on providing engineering solutions, with an emphasis on material sciences, technologies and healthcare. The DMS segment includes customers primarily in the automotive and transportation, connected devices, and healthcare and packaging industries. The DMS segment included the results of the Mobility Business prior to the closing of its sale on December 29, 2023.

Beginning September 1, 2024, the Company reorganized its internal structure to focus on speed, precision, and solutions and as a result of the organizational realignment, the Company will report its business in the following three segments: Regulated Industries, Intelligent Infrastructure, and Connected Living and Digital Commerce. The Regulated Industries segment is focused on regulated markets and includes revenues from customers primarily in the automotive and transportation, healthcare and packaging, and renewable energy infrastructure industries. The Intelligent Infrastructure segment is focused on the modern digital ecosystem including artificial intelligence (“AI”) infrastructure and includes revenues from customers primarily in the capital equipment, cloud and data center infrastructure, and networking and communications industries. The Connected Living and Digital Commerce segment is focused on digitalization and automation, including warehouse automation and robotics, and includes revenues from customers primarily in the connected living and digital commerce industries.

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, loss on disposal of subsidiaries, settlement of receivables and related charges, impairment of notes receivable and related charges, goodwill impairment charges, business interruption and impairment charges, net, gain from the divestiture of businesses, acquisition and divestiture related charges, loss on debt extinguishment, (gain) loss on securities, income (loss) from discontinued operations, gain (loss) on sale of discontinued operations, other expense (excluding certain components of net periodic benefit cost), interest expense, net, income tax expense, or adjustment for net income (loss) attributable to noncontrolling interests.

Total segment assets are defined as accounts receivable, contract assets, 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 presents the Company’s revenues disaggregated by segment (in millions):

	Fiscal Year Ended August 31,
	2024						2023						2022
	EMS		DMS		Total		EMS		DMS		Total		EMS		DMS		Total
Timing of transfer
Point in time	$	4,502	$	3,908	$	8,410	$	5,094	$	6,453	$	11,547	$	6,112	$	6,818	$	12,930
Over time	9,303		11,170		20,473		11,655		11,500		23,155		10,625		9,923		20,548
Total	$	13,805	$	15,078	$	28,883	$	16,749	$	17,953	$	34,702	$	16,737	$	16,741	$	33,478

The following tables set forth operating segment information (in millions):

	Fiscal Year Ended August 31,
	2024		2023		2022
Segment income and reconciliation of income before income tax
EMS	$	719	$	837	$	727
DMS	869		896		816
Total segment income	$	1,588	$	1,733	$	1,543
Reconciling items:
Amortization of intangibles	(40)		(33)		(34)
Stock-based compensation expense and related charges	(89)		(95)		(81)
Restructuring, severance and related charges(1)	(296)		(57)		(18)
Business interruption and impairment charges, net(2)	(16)		—		—
Gain from the divestiture of businesses(3)	942		—		—
Acquisition and divestiture related charges(3)	(70)		—		—
Loss on debt extinguishment	—		—		(4)
Other expense (net of periodic benefit cost)	(95)		(80)		(29)
Interest expense, net	(173)		(206)		(146)
Income before income tax	$	1,751	$	1,262	$	1,231

(1)Charges recorded during the fiscal year ended August 31, 2024, related to the 2024 Restructuring Plan. Charges recorded during the fiscal year ended August 31, 2023, related to headcount reduction to further optimize the Company’s business activities.

(2)Charges recorded during the fiscal year August 31, 2024, related to costs associated with product quality liabilities, which is classified as a component of cost of revenue and selling, general and administrative expenses in the Consolidated Statements of Operations.

(3)The Company completed the divestiture of its Mobility Business and recorded a pre-tax gain of $942 million, subject to certain post-closing adjustments that are still being finalized. The Company incurred $70 million of acquisition and

divestiture related charges during the fiscal year ended August 31, 2024, primarily related to the divestiture of its Mobility Business.

	August 31, 2024		August 31, 2023
Total assets:
EMS	$	4,384	$	4,859
DMS	6,387		6,802
Assets held for sale(1)	—		1,929
Other non-allocated assets	6,580		5,834
Total	$	17,351	$	19,424

(1)Assets held for sale as of August 31, 2023 were reported in the DMS operating segment.

The Company operates in more than 30 countries worldwide. For geographical reporting, sales to unaffiliated customers are attributed to the Company location that maintains the customer relationship and transacts the external sale. Long-lived assets consist of property, plant and equipment, net and right-of-use assets and are attributed to the Company location in which they are located. The following tables set forth net revenue and long-lived asset information where individual countries accounted for 10% or more of the total, for the periods indicated (in millions):

	At and For the Fiscal Year Ended August 31,
	2024				2023				2022
	Net Revenue		Long-Lived Assets		Net Revenue		Long-Lived Assets		Net Revenue		Long-Lived Assets
Mexico	$	5,872	$	647	$	6,083	$	670	$	5,630	$	594
China(1)	4,810		736		5,868		865		5,272		1,956
Singapore(2)	4,486		*		7,385		*		7,916		*
Malaysia	*		352		*		*		*		*
Other	8,668		1,074		10,431		1,338		9,271		1,272
Total Foreign	23,836		2,809		29,767		2,873		28,089		3,822
U.S.	5,047		575		4,935		631		5,389		632
Total	$	28,883	$	3,384	$	34,702	$	3,504	$	33,478	$	4,454

*  Amount was less than 10% of total.

(1)Excludes long-lived assets of $836 million classified as held for sale as of August 31, 2023. See Note 17 – “Business Acquisitions and Divestitures” for additional information.

(2)Decrease in net revenue for the fiscal year ended August 31, 2024, is driven by the divestiture of the Mobility Business. See Note 17 – “Business Acquisitions and Divestitures” for additional information.