Significant Accounting Policies | Note 1—Summary of Significant Accounting Policies (a) Business Benchmark Electronics, Inc. (the Company) is a Texas corporation that provides worldwide integrated electronic manufacturing services (EMS). The Company provides services to original equipment manufacturers (OEMs) of industrial control equipment (which includes equipment for the aerospace and defense industry), telecommunica tion equipment, computers and related products for business enterprises, medical devices, and testing and instrumentation products. The Company has manufacturing operations located in the United States and Mexico (the Americas) , Asia and Europe. (b) Princi ples of Consolidation The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) and include the financial statements of Benchmark Electronics, Inc. and its wholly owned and majority owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. (c) Cash and Cash Equivalents The Company considers all highly liquid debt instruments with an original maturity at the date of purchase of three months or less to be cash equivalents. Cash equivalents of $ 531.8 million and $ 381.6 million at December 31, 2016 and 2015 , respectively, consist ed primarily of money-market funds and time deposits with an initial term of le ss than three months. (d) Allowance for Doubtful Accounts Accounts receivable are recorded net of allowances for amounts not expected to be collected. In estimating the allowance, management considers a specific customer’s financial condition, payment his tory, and various information or disclosures by the customer or other publicly available information. Acco unts receivable are charged against the allowance after all reasonable efforts to collect the full amount (including litigation, where appropriate) ha ve been exhausted. During 2014 , the Company recorded a $ 2.7 million charge for provisions to accounts receivable associated with the bankruptcy filing of a former customer, GT Advance Technologies, on October 6, 2014. (e ) Inventories Inventories include material, labor and overhead and are stated at the lower of cost (principally first-in, first-out method) or market. (f ) Property, Plant and Equipment Property, plant and equipment are stated at cost. Depreciation is calculated on the straight-line method over the useful lives of the assets – 5 to 40 years for buildings and building improvements, 2 to 10 years for machinery and equipment, 2 to 10 years for furniture and fixtures and 2 to 5 years for vehicles. Leasehold improvements are amortized on the straight-line method over the shorter of the useful life of the improvement or the remainder of the lease term. (g ) Goodwill and Other Intangible Assets Goodwill represents the excess of purchase price over fair value of net assets acquired. Goodwill and intangible assets acquired in a business combination and determined to have an indefinite useful life are not amortized, but instead assessed for impairment at least annually. Intangible assets with estimable useful liv es are amortized over their respective estimated useful lives to their estimated residual values. (h ) Impairment of Long-Lived Assets and Goodwill Long-lived assets, such as property, plant, and equipment, and purchased intangibles subject to amortization , are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is evaluated by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the as set exceeds the estimated fair value of the asset. Assets to be disposed of would be separately disclosed and reported at the lower of the carrying amount or estimated fair value less costs to sell, and are no longer depreciated. The assets and liabilities of a disposed group classified as held for sale would be disclosed separately in the appropriate asset and liability sections of the consolidated balance sheet. Goodwill is tested for impairment on an annual basis, at a minimum, and whenever events and c hanges in circumstances suggest that the carrying amount may be impaired. Circumstances that may lead to the impairment of goodwill include unforeseen decreases in future performance or industry demand or the restructuring of our operations as a result of a change in our business strategy. A qualitative assessment is allowed to determine if goodwill is potentially impaired. Based on this qualitative assessment, if the Company determines that it is more likely than not that the reporting unit’s fair value is less than its carrying value, then it performs a two-step goodwill impairment test, otherwise no further analysis is required. In connection with its annual goodwill impairment assessments as of December 31, 2016 , 2015 and 2014 , the Company conc luded that goodwill was not impaired. (i ) Earnings Per Share Basic earnings per share is computed using the weighted-average number of shares outstanding. Diluted earnings per share is computed using the weighted-average number of shares outstanding adjusted for the incremental shares attributed to outstanding stock equivalents. Stock equivalents include common shares issuable upon the exercise of stock options and other equity instrume nts, and are computed using the treasury stock method. Under the treasury stock method, the exercise price of a share, the amount of compensation cost, if any, for future service that the Company has not yet recognized, and the amount of estimated tax bene fits that would be recorded in paid-in-capital, if any, when the option is exercised or the share vests are assumed to be used to repurchase shares in the current period. The following table sets forth the calculation of basic and diluted earnings per s hare. Year Ended December 31, (in thousands, except per share data) 2016 2015 2014 Net income $ 64,047 $ 95,401 $ 81,241 Denominator for basic earnings per share – weighted-average number of common shares outstanding during the period 49,298 51,573 53,538 Incremental common shares attributable to exercise of dilutive options 313 318 450 Incremental common shares attributable to outstanding restricted stock units 214 197 234 Denominator for diluted earnings per share 49,825 52,088 54,222 Basic earnings per share $ 1.30 $ 1.85 $ 1.52 Diluted earnings per share $ 1.29 $ 1.83 $ 1.50 Options to purchase 0.4 million, 1.3 million and 0. 7 million common shares in 2016 , 2015 and 2014 , respectively, were not included in the computation of diluted earnings per share because their effect would have been anti-dilutive. (j ) Revenue Recognition Revenue from the sale of manufactured products built to customer specifications and excess inventory is recognized when title and risk of ownership have passed, the price to the buyer is fixed or determinable and rec overability is reasonably assured, which generally is when the goods are shipped. Revenue from design, development and engineering services is recognized when the services are performed and collectibility is reasonably certain. Such services provided under fixed price contracts are accounted for using the percentage-of-completion method. The Company assumes no significant obligations after shipment as it typically warrants workmanship only. Therefore, the warranty provisions are generally not significant. ( k ) Income Taxes Income taxes are accounted for under the asset and liability method. Deferred income taxes are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and l iabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date. The Company records a valuation allowance to reduce its deferred tax assets to the amounts that are more likely than not to be realized. The Co mpany has considered the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in assessing the need for the valuation allowance. (l ) Stock-Based Compensation All share-based payments to employees, inc luding grants of employee stock options, are recognized in the financial statements based on their grant date fair values. The total compensation cost recognized for stock-based awards was $5.3 million, $7.7 million and $6.4 million for 2016 , 2015 and 2014 , respectively. The total income tax benefit recognized in the income statement for stock-based awards was $1.1 million, $3 . 1 million and $2.6 million for 2016 , 2015 and 2014 , respectively. The compens ation expense for stock-based awards includes an estimate for forfeitures and is recognized over the vesting period of the awards using the straight-line method. Cash flows from the tax benefits resulting from tax deductions in excess of the compensation c ost recognized for stock-based awards (excess tax benefits) are classified as cash flows from financing activities. Awards of restricted shares, restricted stock units and performance-based restricted stock units are valued at the closing market price of t he Company’s common shares on the date of grant. For performance-based restricted stock units, compensation expense is based on the probability that the performance goals will be achieved, which is monitored by management throughout the requisite service p eriod. When it becomes probable, based on the Company’s expectation of performance during the measurement period, that more or less than the previous estimate of the awarded shares will vest, an adjustment to stock-ba sed compensation expense is recognized as a change in accounting estimate. As of December 31, 2016 , the unrecognized compensation cost and remaining weighted-average amortization related to stock-based awards were as follows: Performance- based Restricted Restricted Stock Stock Stock (in thousands) Options Units Units (1) Unrecognized compensation cost $ 1,901 $ 8,967 $ 1,955 Remaining weighted-average amortization period 1.1 years 2.2 years 1.9 years (1) Based on the probable achievement of the performance goals identified in each award. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model. The weighted-average fair value per option granted during 2015 and 2014 was $8.76 and $9.91, respectively. No options were granted during 2016 . The weighted-average assumptions used to value the options granted during 2015 and 2014 were as follows: Year Ended December 31, (in thousands) 2015 2014 Options granted 289 378 Expected term of options 6.4 years 7.0 years Expected volatility 35% 39% Risk-free interest rate 1.886% 2.081% Dividend yield zero zero The expected term of the options represents the estimated period of time until exercise and is based on historical experience, giving consideration to the contractual terms, vesting schedules and expectations of future plan participant behavior. Separate groups of plan participants that have similar historical exercise behavior are considered separately for valuation purposes. Expected stock price volatility is based on the historical volatility of the Company’s common shares. The risk-free interest rate i s based on the U.S. Treasury zero-coupon rates in effect at the time of grant with an equivalent remaining term. The dividend yield reflects that the Company has not paid any cash dividends since inception and does not anticipate paying cash dividends in t he foreseeable future . The total cash received as a result of stock option exercises in 2016 , 2015 and 2014 was approximately $18.8 million, $2.0 million and $18 . 9 million, respectively. The actual tax benefit realized as a result of stock option exercises and the vesting of other share-based awards during 2016 , 2015 and 2014 was $3.7 million, $2.1 million and $2.9 million, respectively. For 2016 , 2015 and 2014 , the total intrinsic value of stock options exercised was $5.1 million, $0.7 million and $3.7 million, respectively. The Company awarded performance-based restricted stock units to employees during 2016 , 2015 and 2014 . The number of performan ce-based restricted stock units that will ultimately be earned will not be determined until the end of the corresponding performance periods, and may vary from as low as zero to as high as three times the target number depending on the level of achievement of certain performance goals. The level of achievement of these goals is based upon the audited financial results of the Company for the last full calendar year within the performance period. The performance goals consist of certain levels of achievement using the following financial metrics: revenue growth, operating margin expansion, and return on invested capital. If the performance goals are not met based on the Company’s financial results, the applicable performance-based restricted stock units will n ot vest and will be forfeited. Shares subject to forfeited performance-based restricted stock units will be available for issuance under the Company’s 2010 Omnibus Incentive Compensation Plan (the 2010 Plan). (m ) Use of Estimates Management of the Company has made a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities to prepare these financial statements in accordance with U.S. GAAP. On an ongoing basis, management evaluates these estimates, including those related to accounts receivable, inventories, income taxes, long-lived assets, stock-based compensation a nd contingencies and litigation . Actual results could differ from those estimates. (n ) Fair Values of Financi al Instruments Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. A three-tier fair value hierarchy of inputs is employed to determine fair value measurements. Level 1 inputs are quoted prices (unadjusted) in active markets for id entical assets and liabilities. Level 2 inputs are o bservable prices that are not quoted on active exchanges, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; and model-derived valuations whose inputs are observable or whose significan t value drivers are observable. Level 3 inputs are unobservable inputs employed for measuring the fair value of assets or liabilities. This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when deter mining fair value. The Company’s f inancial instruments include cash equivalents, accounts and other receivables, accoun ts payable, accrued liabilities and long-term debt and capital lease obligations. The Company believes that the carrying values of these instruments approximate their fair value. As of December 31, 2016 , all of the Company’s long-term investments were included in other assets and were recorded at fair value using Level 3 inputs. As of December 31, 2016 , there were no long-term invest ments measured at fair value using Level 1 or Level 2 inputs. All income generated from these investments is recorded as interest income . As of December 31, 2016 , the Company’s derivative instruments were recorded at fair value using Level 3 inputs. See Note 11. (o ) Foreign Currency For foreign subsidiaries using the local currency as their functional currency, assets and liabilities are translated at exchange rates in effect at the balance sheet date and income and expenses are translated at average exchange rates. The effects of these translation adjustments are reported in other comprehensive income. Exchange losses arising from transactions denominated in a currency other than the functional currency of the entity involved are included in o ther expense and totaled approximately $ 0 . 5 million, $ 2 .3 million and $ 1.3 million in 2016 , 2015 and 2014 , respectively. These amounts include the amount of gain (loss) recognized in income due to forward currency exchange contracts. (p ) Derivative Instruments All derivative instruments are recorded on the balance sheet at fair value. The Company uses derivative instruments to manage the variability of foreign currency obligations and interest rates . The Company does not enter into deriva tive arrangements for speculative purposes . Generally, if a derivative instrument is designated as a cash flow hedge, the change in the fair value of the derivative is recorded in other comprehensive income to the extent the derivative is effective, and re cognized in the consolidated statement of i ncome when the hedged item affects earnings. Changes in fair value of derivatives that are not designated as hedges are recorded in earnings. Cash receipts and cash payments related to derivative instruments are r ecorded in the same category as the cash flows from the items being hedged on the c onsolid ated s tatements of c ash f lows. (q ) Recently Enacted Accounting Principles In August 2016, the Financial Accounting Standards Board (FASB) issued a new accounting standards update, which seeks to reduce the existing diversity in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. This update is effective for fiscal years and interim periods beginning after Decembe r 15, 2017, with early adoption permitted. The Company is currently evaluating the impact that the adoption of this update will have on its consolidated financial statements. In June 2016, the FASB issued a new accounting standards update, which replaces the current incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. This update is effective for a nnual reporting periods beginning after December 15, 2019. The Company does not expect the implementation of this update to have a material impact on its consolidated financial position, results of operations or cash flows. In March 2016, the FASB issued a new accounting standard update intended to simplify several aspects of the accounting for share-based payment transactions . This update is effective for fiscal years beg inning after December 15, 2016, and the Company adopt ed it effective January 1, 2017. As a result, the Company elected to reverse compensation cost of any forfeited awards when they occur and will classify the cash flows resulting from remitting cash to the tax authorities for the payment of taxes on the vesting of share-based payment awar ds as a financing activity on the consolidated statement of cash flows. Changes to the statements of cash flows related to classification of excess tax benefits and employee taxes paid for share-based payment arrangements will be implemented on a retrospec tive basis . The adoption of this update did not have a material impact on the Company’s financial statements at the time of implementation . The amount of excess tax benefits or tax deficiencies in future periods will vary based on the stock price of th e Co mpany’s common stock in rel ation to the fair value of awards on grant date and the exercise behavior of the Company’s stock option holders. In February 2016, the FASB issued a new accounting standards update changing the accounting for leases and includi ng a requirement to record all leases on the consolidated balance sheet s as assets and liabilities. This update is effective for fiscal years beginning after December 15, 2018. The Company will adopt this update effective January 1, 2019. The adoption of t his standard will impact the Company’s consolidated balance sheet. The Company is currently evaluating the impact this standard will have on its consolidated financial statements and related disclosure s. In July 2015, the FASB issued an accounting standar ds update, which applies to inventory that is measured using first-in, first-out or average cost, with new guidance on simplifying the measurement of inventory. Inventory within the scope of this update is required to be measured at the lower of its cost o r net realizable value, with net realizable value being the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The update is effective prospectively for fiscal years an d interim periods beginning after December 15, 2016, with early adoption permitted. The adoption of this update by the Company effective January 1, 2017 did not have a material impact on the Company’s consolidated financial statements . In May 2014, the FA SB issued a new standard that will supersede most of the existing revenue recognition requirements in current U.S. GAAP. The new standard will require companies to recognize revenue in an amount reflecting the consideration to which they expect to be entit led in exchange for transferring goods or services to a customer. The new standard will also require significantly expanded disclosures , and is effective January 1, 2018. The new standard will permit the use of either the retrospective or cumulative effect transition method, with early application permitted for January 1, 2017. The Company plans to adopt the new guidance effective January 1, 2018. Under the new guidance, the Company anticipates that a majority of its sales from manufacturing activities will change to an over-time model. Under current guidance, the Company accounts for these under a point-in-time recognition model. Based on its analysis to date, the Company expects to adopt the new guidance under the retrospective approach. The Company is in the process of quanti fying the potential effects the new guidance will have on its consolidated financial statements, and believe s the adoption is likely to have a material impact on the timing of revenue recognition . The Company has determined that all o ther recently issued accounting standards will not have a material impact on its consolidated financial position, results of operations and cash flows, or do not apply to its operations. (r ) Reclassifications Certain reclassifications of prior period amounts have been made to conform to the current year presentation. In 2 016, the Company concluded it appropriate to classify amounts relating to the amortization of intangible assets separately . Previously, the Company had reported these amounts under the captions “cost of sales” and “selling, general and administrative expenses”. These reclassifications had no effect on previously reported net income. |