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Concentration of Risk and Segment Data | 12 Months Ended
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Aug. 31, 2020
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 potential credit losses on trade receivables. Sales of the Company’s products are concentrated among specific customers. For fiscal year 2020, the Company’s five largest customers accounted for approximately 47% of its net revenue and 73 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 that 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 the customer, were as follows:
|  | Percentage of Net Revenue Fiscal Year Ended August 31, |  | Percentage of Accounts Receivable as of August 31,
|  | 2020 |  | 2019 |  | 2018 |  | 2020 |  | 2019
Apple, Inc.(1) |  | 20 | % |  | 22 | % |  | 28 | % |  | * |  | *
Amazon.com(2) |  | 11 | % |  | * |  |  | * |  |  | * |  | *
* Amount was less than 10% of total.
(1) | Sales to this customer were reported in the DMS operating segment.
(2) | Sales to this customer were reported primarily in the EMS 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 around 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 products at a quicker rate (i.e. cycle time) and in larger quantities and includes customers primarily in the automotive and transportation, capital equipment, cloud, computing and storage, defense and aerospace, industrial and energy, networking and telecommunications, print and retail, and smart home and appliances 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 edge devices and accessories, healthcare, mobility and packaging 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, acquisition and integration charges, loss on disposal of subsidiaries, settlement of receivables and related charges, impairment of notes receivable and related charges, loss on securities, 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. 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. As of September 1, 2020, certain customers have been realigned within the Company’s operating segments. As there have been no changes to how the Company’s CODM assesses operating performance and allocates resources, the Company’s operating segments which are the reporting segments continue to consist of the DMS and EMS segments. Beginning in fiscal year 2021, customers within the automotive and transportation and smart home and appliances industries will be presented within the DMS segment. Prior period disclosures will be restated to reflect the realignment. The following table presents the Company’s revenues disaggregated by segment (in thousands):
| Fiscal Year Ended August 31,
| 2020 |  | 2019
| EMS |  | DMS |  | Total |  | EMS |  | DMS |  | Total
Timing of transfer(1) |  |  |  |  |  |  |  |  |  |  |
Point in time | $ | 4,385,128 |  |  | $ | 6,045,986 |  |  | $ | 10,431,114 |  |  | $ | 2,877,082 |  |  | $ | 6,055,716 |  |  | $ | 8,932,798 |
Over time | 12,226,894 |  |  | 4,608,430 |  |  | 16,835,324 |  |  | 12,553,447 |  |  | 3,796,075 |  |  | 16,349,522 |
Total | $ | 16,612,022 |  |  | $ | 10,654,416 |  |  | $ | 27,266,438 |  |  | $ | 15,430,529 |  |  | $ | 9,851,791 |  |  | $ | 25,282,320 |
(1) | Effective September 1, 2018, the Company adopted ASU 2014-09, Revenue Recognition (Topic 606) using the modified retrospective method by applying the guidance to all open contracts upon adoption and recording a cumulative effect adjustment as of September 1, 2018, net of tax, of $42.6 million. No adjustments were made to prior periods.
The following tables set forth operating segment information (in thousands):
|  | Fiscal Year Ended August 31,
|  | 2020 |  | 2019 |  | 2018
Net revenue |  |  |  |  |  |
EMS |  | $ | 16,612,022 |  |  | $ | 15,430,529 |  |  | $ | 12,268,600 |
DMS |  | 10,654,416 |  |  | 9,851,791 |  |  | 9,826,816 |
|  | $ | 27,266,438 |  |  | $ | 25,282,320 |  |  | $ | 22,095,416 |
|  | Fiscal Year Ended August 31,
|  | 2020 |  | 2019 |  | 2018
Segment income and reconciliation of income before tax |  |  |  |  |  |
EMS |  | $ | 447,284 |  |  | $ | 480,047 |  |  | $ | 451,149 |
DMS |  | 416,769 |  |  | 396,564 |  |  | 316,998 |
Total segment income |  | $ | 864,053 |  |  | $ | 876,611 |  |  | $ | 768,147 |
Reconciling items: |  |  |  |  |  |
Amortization of intangibles |  | (55,544 | ) |  | (31,923 | ) |  | (38,490 | )
Stock-based compensation expense and related charges |  | (83,084 | ) |  | (61,346 | ) |  | (98,511 | )
Restructuring, severance and related charges |  | (156,586 | ) |  | (25,914 | ) |  | (36,902 | )
Distressed customer charges |  | (14,963 | ) |  | (6,235 | ) |  | (32,710 | )
Business interruption and impairment charges, net (1) |  | (5,785 | ) |  | 2,860 |  |  | (11,299 | )
Acquisition and integration charges |  | (32,167 | ) |  | (52,697 | ) |  | (8,082 | )
Loss on securities |  | (48,625 | ) |  | (29,632 | ) |  | — |
Other expense (net of periodic benefit cost) |  | (47,243 | ) |  | (53,750 | ) |  | (37,563 | )
Interest income |  | 14,559 |  |  | 21,460 |  |  | 17,813 |
Interest expense |  | (173,877 | ) |  | (188,730 | ) |  | (149,002 | )
Income before income tax |  | $ | 260,738 |  |  | $ | 450,704 |  |  | $ | 373,401 |
(1) | Charges for the fiscal year ended August 31, 2020, relate to a flood that impacted the Company’s facility in Huangpu, China. Charges, net of insurance proceeds of $2.9 million and $24.9 million, for the fiscal years ended August 31, 2019 and 2018, respectively, relate to business interruption and asset impairment costs associated with damage from Hurricane Maria, which impacted operations in Cayey, Puerto Rico. These charges are classified as a component of cost of revenue and selling, general and administrative expenses in the Consolidated Statements of Operations.
|  | August 31, 2020 |  | August 31, 2019
Total assets |  |  |  |
EMS |  | $ | 4,247,897 |  |  | $ | 4,353,465 |
DMS |  | 5,627,869 |  |  | 4,988,198 |
Other non-allocated assets |  | 4,521,650 |  |  | 3,628,812 |
|  | $ | 14,397,416 |  |  | $ | 12,970,475 |
The Company operates 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):
|  | Fiscal Year Ended August 31,
|  | 2020 |  | 2019 |  | 2018
External net revenue: |  |  |  |  |  |
Singapore |  | $ | 6,512,310 |  |  | $ | 6,718,495 |  |  | $ | 7,193,414 |
Mexico |  | 4,685,790 |  |  | 4,526,456 |  |  | 3,533,437 |
China |  | 4,583,089 |  |  | 4,958,462 |  |  | 4,585,355 |
Malaysia |  | 1,903,163 |  |  | 1,681,911 |  |  | 1,389,851 |
Vietnam |  | 921,083 |  |  | 750,367 |  |  | 552,709 |
Other |  | 3,912,536 |  |  | 3,548,062 |  |  | 2,995,956 |
Foreign source revenue |  | 22,517,971 |  |  | 22,183,753 |  |  | 20,250,722 |
U.S. |  | 4,748,467 |  |  | 3,098,567 |  |  | 1,844,694 |
Total |  | $ | 27,266,438 |  |  | $ | 25,282,320 |  |  | $ | 22,095,416 |
|  | August 31, 2020 |  | August 31, 2019
Long-lived assets: |  |  |  |
China |  | $ | 1,670,290 |  |  | $ | 1,579,904 |
Mexico |  | 375,902 |  |  | 418,641 |
Malaysia |  | 232,165 |  |  | 154,386 |
Switzerland |  | 218,851 |  |  | 158 |
Singapore |  | 141,659 |  |  | 156,028 |
Taiwan |  | 114,594 |  |  | 123,608 |
Vietnam |  | 107,857 |  |  | 85,728 |
Hungary |  | 101,437 |  |  | 85,809 |
Other |  | 501,453 |  |  | 462,261 |
Long-lived assets related to foreign operations |  | 3,464,208 |  |  | 3,066,523 |
U.S. |  | 1,107,827 |  |  | 1,146,335 |
Total |  | $ | 4,572,035 |  |  | $ | 4,212,858 |

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8924-108599 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8981-108599 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8721-108599 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9031-108599 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (f) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (e) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8844-108599 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9038-108599 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 22 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8736-108599 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9054-108599 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8657-108599 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8721-108599 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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