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Concentration of Risk and Segment Data | 9 Months Ended
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May 31, 2024
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, 2024, the Company’s five largest customers accounted for approximately 37% of its net revenue and 86 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 DMS segment included the results of the Company’s mobility business prior to the closing of its sale on December 29, 2023. 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. Certain items are excluded from the calculation of segment income. 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 millions):
| Three months ended |  | Nine months ended
| May 31, 2024 |  | May 31, 2023 |  | May 31, 2024 |  | May 31, 2023
Segment income and reconciliation of income before income tax |  |  |  |  |  |  |
EMS | $ | 195 |  |  | $ | 226 |  |  | $ | 505 |  |  | $ | 629 |
DMS | 155 |  |  | 178 |  |  | 682 |  |  | 627 |
Total segment income | $ | 350 |  |  | $ | 404 |  |  | $ | 1,187 |  |  | $ | 1,256 |
Reconciling items: |  |  |  |  |  |  |
Amortization of intangibles | (12) |  |  | (7) |  |  | (27) |  |  | (24) |
Stock-based compensation expense and related charges | (3) |  |  | (18) |  |  | (72) |  |  | (80) |
Restructuring, severance and related charges(1) | (55) |  |  | — |  |  | (252) |  |  | (45) |
Business interruption and impairment charges, net(2) | (14) |  |  | — |  |  | (14) |  |  | — |
Gain from the divestiture of businesses(3) | — |  |  | — |  |  | 944 |  |  | — |
Acquisition and divestiture related charges(3) | (3) |  |  | — |  |  | (64) |  |  | — |
Other expense (net of periodic benefit cost) | (24) |  |  | (22) |  |  | (72) |  |  | (61) |
Interest expense, net | (38) |  |  | (51) |  |  | (132) |  |  | (154) |
Income before income tax | $ | 201 |  |  | $ | 306 |  |  | $ | 1,498 |  |  | $ | 892 |
(1)Charges recorded during the three months and nine months ended May 31, 2024, related to the 2024 Restructuring Plan. Charges recorded during the nine months ended May 31, 2023, related to headcount reduction to further optimize the Company’s business activities. (2)Charges recorded during the three months and nine months ended May 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 Condensed Consolidated Statements of Operations. (3)The Company completed the divestiture of its mobility business and recorded a pre-tax gain of $944 million, subject to certain post-closing adjustments that are still being finalized. The Company incurred transaction and disposal costs in connection with the sale of approximately $64 million during the nine months ended May 31, 2024. The following table presents the Company’s revenues disaggregated by segment (in millions):
| Three months ended
| May 31, 2024 |  | May 31, 2023
| EMS |  | DMS |  | Total |  | EMS |  | DMS |  | Total
Timing of transfer |  |  |  |  |  |  |  |  |  |  |
Point in time | $ | 1,172 |  |  | $ | 559 |  |  | $ | 1,731 |  |  | $ | 1,120 |  |  | $ | 1,351 |  |  | $ | 2,471 |
Over time | 2,225 |  |  | 2,809 |  |  | 5,034 |  |  | 3,010 |  |  | 2,994 |  |  | 6,004 |
Total | $ | 3,397 |  |  | $ | 3,368 |  |  | $ | 6,765 |  |  | $ | 4,130 |  |  | $ | 4,345 |  |  | $ | 8,475 |
| Nine months ended
| May 31, 2024 |  | May 31, 2023
| EMS |  | DMS |  | Total |  | EMS |  | DMS |  | Total
Timing of transfer |  |  |  |  |  |  |  |  |  |  |
Point in time | $ | 3,473 |  |  | $ | 3,346 |  |  | $ | 6,819 |  |  | $ | 3,925 |  |  | $ | 5,047 |  |  | $ | 8,972 |
Over time | 6,847 |  |  | 8,253 |  |  | 15,100 |  |  | 8,802 |  |  | 8,470 |  |  | 17,272 |
Total | $ | 10,320 |  |  | $ | 11,599 |  |  | $ | 21,919 |  |  | $ | 12,727 |  |  | $ | 13,517 |  |  | $ | 26,244 |
The Company operates in more than 30 countries worldwide. Sales to unaffiliated customers are based on the Company location that maintains the customer relationship and transacts the external sale. The following table sets forth, for the periods indicated, foreign source revenue expressed as a percentage of net revenue:
| Three months ended |  | Nine months ended
| May 31, 2024(1) |  | May 31, 2023 |  | May 31, 2024(1) |  | May 31, 2023
Foreign source revenue | 80.5 | % |  | 86.9 | % |  | 83.4 | % |  | 85.6 | %
(1)Decrease from prior periods is driven by the divestiture of the mobility business during the three months ended February 29, 2024.

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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/exampleRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 48 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482785/280-10-55-48 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards 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