10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended April 2, 2016

Commission File #1-4224

AVNET, INC.

Incorporated in New York

IRS Employer Identification No. 11-1890605

2211 South 47th Street, Phoenix, Arizona 85034

(480) 643-2000

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ☑	Accelerated filer ☐	Non-accelerated filer ☐	Smaller Reporting Company ☐
		(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

As of April 21, 2016, the total number of shares outstanding of the registrant’s Common Stock was 128,515,224 shares, net of treasury shares.

AVNET, INC. AND SUBSIDIARIES

INDEX

	Page No.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets at April 2, 2016 and June 27, 2015	2
Consolidated Statements of Operations for the third quarters and nine months ended April 2, 2016 and March 28, 2015	3
Consolidated Statements of Comprehensive Income for the third quarters and nine months ended April 2, 2016 and March 28, 2015	4
Consolidated Statements of Cash Flows for the nine months ended April 2, 2016 and March 28, 2015	5
Notes to Consolidated Financial Statements	6
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3. Quantitative and Qualitative Disclosures About Market Risk	26
Item 4. Controls and Procedures	27
PART II. OTHER INFORMATION	27
Item 1. Legal Proceedings	27
Item 1A. Risk Factors	28
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	30
Item 6. Exhibits	31
Signature Page	32

1

PART I

FINANCIAL INFORMATION

Item 1.Financial Statements

AVNET, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)

	April 2,		June 27,
	2016		2015
	(Thousands, except share
	amounts)
ASSETS
Current assets:
Cash and cash equivalents	$	1,036,485	$	932,553
Receivables, less allowances of $69,969 and $80,721, respectively		4,874,179		5,054,307
Inventories		2,826,858		2,482,183
Prepaid and other current assets		200,579		173,030
Total current assets		8,938,101		8,642,073
Property, plant and equipment, net		610,747		568,779
Goodwill		1,295,406		1,278,756
Intangible assets, net		86,989		99,731
Other assets		194,217		210,614
Total assets	$	11,125,460	$	10,799,953
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Short-term debt	$	706,742	$	331,115
Accounts payable		3,297,981		3,338,052
Accrued expenses and other		559,697		603,129
Total current liabilities		4,564,420		4,272,296
Long-term debt		1,610,539		1,646,501
Other liabilities		190,300		196,135
Total liabilities		6,365,259		6,114,932
Commitments and contingencies (Note 6)
Shareholders’ equity:
Common stock $1.00 par; authorized 300,000,000 shares; issued 128,542,843 shares and 135,496,472 shares, respectively		128,543		135,496
Additional paid-in capital		1,442,947		1,408,422
Retained earnings		3,602,702		3,582,599
Accumulated other comprehensive loss		(413,671)		(441,038)
Treasury stock at cost, 28,641 shares and 31,901 shares, respectively		(320)		(458)
Total shareholders’ equity		4,760,201		4,685,021
Total liabilities and shareholders’ equity	$	11,125,460	$	10,799,953

See notes to consolidated financial statements. 

2

AVNET, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Third Quarters Ended				Nine Months Ended
	April 2,		March 28,		April 2,		March 28,
	2016		2015		2016		2015
	(Thousands, except per share amounts)
Sales	$	6,174,716	$	6,736,860	$	19,992,467	$	21,128,326
Cost of sales		5,437,888		5,962,506		17,685,995		18,721,003
Gross profit		736,828		774,354		2,306,472		2,407,323
Selling, general and administrative expenses		539,038		555,148		1,628,425		1,713,056
Restructuring, integration and other expenses		16,172		15,494		63,352		47,071
Operating income		181,618		203,712		614,695		647,196
Other income (expense), net		2,200		(8,945)		(10,138)		(15,963)
Interest expense		(23,281)		(23,871)		(69,306)		(71,936)
Income before income taxes		160,537		170,896		535,251		559,297
Income tax expense		37,078		49,367		125,526		146,117
Net income	$	123,459	$	121,529	$	409,725	$	413,180
Earnings per share:
Basic	$	0.95	$	0.89	$	3.11	$	3.02
Diluted	$	0.94	$	0.88	$	3.05	$	2.97
Shares used to compute earnings per share:
Basic		129,811		136,046		131,834		136,965
Diluted		131,650		137,721		134,298		139,181
Cash dividends paid per common share	$	0.17	$	0.16	$	0.51	$	0.48

See notes to consolidated financial statements.

3

AVNET, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

	Third Quarters Ended				Nine Months Ended
	April 2,		March 28,		April 2,		March 28,
	2016		2015		2016		2015
	(Thousands)
Net income	$	123,459	$	121,529	$	409,725	$	413,180
Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustments and other		129,872		(270,518)		20,987		(634,554)
Pension adjustments, net		2,156		1,785		6,380		5,354
Total comprehensive income (loss)	$	255,487	$	(147,204)	$	437,092	$	(216,020)

See notes to consolidated financial statements.

4

AVNET, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Nine Months Ended
	April 2,		March 28,
	2016		2015
	(Thousands)
Cash flows from operating activities:
Net income	$	409,725	$	413,180
Non-cash and other reconciling items:
Depreciation		71,112		70,919
Amortization		21,183		32,630
Deferred income taxes		3,963		29,500
Stock-based compensation		47,724		48,890
Other, net		43,665		57,766
Changes in (net of effects from businesses acquired):
Receivables		181,723		(186,037)
Inventories		(319,865)		(89,994)
Accounts payable		(74,510)		118,449
Accrued expenses and other, net		(87,593)		(210,751)
Net cash flows provided by operating activities		297,127		284,552
Cash flows from financing activities:
Issuance of notes, net of issuance costs		542,043		—
Repayment of notes		(250,000)		—
Borrowings (repayments) under accounts receivable securitization program, net		(400,000)		110,000
Borrowings (repayments) of bank and revolving debt, net		448,468		(96,372)
Repurchases of common stock (Note 9)		(334,177)		(147,606)
Dividends paid on common stock		(66,944)		(65,602)
Other, net		(12,028)		(13,993)
Net cash flows used for financing activities		(72,638)		(213,573)
Cash flows from investing activities:
Purchases of property, plant and equipment		(111,070)		(133,422)
Acquisitions of businesses, net of cash acquired (Note 2)		(19,675)		—
Other, net		8,436		(8,765)
Net cash flows used for investing activities		(122,309)		(142,187)
Effect of currency exchange rate changes on cash and cash equivalents		1,752		(54,295)
Cash and cash equivalents:
— increase (decrease)		103,932		(125,503)
— at beginning of period		932,553		928,971
— at end of period	$	1,036,485	$	803,468

See notes to consolidated financial statements.

5

AVNET, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Basis of presentation and new accounting pronouncements

In the opinion of management, the accompanying unaudited interim consolidated financial statements contain all adjustments necessary to present fairly Avnet, Inc.'s and its consolidated subsidiaries' (the “Company” or “Avnet”) financial position, results of operations, comprehensive income (loss) and cash flows. All such adjustments are of a normal recurring nature.

The preparation of financial statements in accordance with generally accepted accounting principles ("GAAP") requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements. Actual results may differ from these estimates.

Interim results of operations are not necessarily indicative of the results to be expected for the full fiscal year. The information included in this Form 10-Q should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 27, 2015.

Fiscal year

The Company operates on a “52/53 week” fiscal year and fiscal 2016 contains 53 weeks compared to 52 weeks in fiscal 2015. As a result, the first nine months of fiscal 2016 contained 40 weeks compared to the first nine months of fiscal 2015, which contained 39 weeks.

New accounting pronouncements

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2016-02, Leases (Topic 842) (“ASU 2016-02”). The update requires a lessee to recognize assets and liabilities on the consolidated balance sheets for leases with lease terms greater than 12 months. ASU 2016-02 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted. Accordingly, the update will be effective for the Company beginning in the first quarter of fiscal 2020, using a modified retrospective approach. The Company is currently evaluating the impact of the adoption of ASU 2016-02 on its consolidated financial statements. 

In November 2015, the FASB issued Accounting Standards Update No. 2015-17, Income Taxes (Topic 740):  Balance Sheet Classification of Deferred Taxes (“ASU 2015-17”), to simplify the presentation of deferred income taxes by requiring deferred tax liabilities and assets be classified as noncurrent in a classified balance sheet. The planned early adoption of this update at the end of fiscal 2016 is not expected to have a material impact on the Company’s financial statements.

In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), to supersede nearly all existing revenue recognition guidance under GAAP. The core principles of ASU 2014-09 are to recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. Application of the requirements of ASU 2014-09 may require more judgment and estimates within the revenue recognition process compared to existing GAAP. In July 2015, the FASB approved a one-year delay in the effective date of ASU 2014-09, which makes the effective date for the Company the first quarter of fiscal 2019. The Company may adopt the requirements of ASU 2014-09 using either of two acceptable adoption methods: (i) retrospective adoption to each prior reporting period presented with the option to elect certain practical expedients as defined within ASU 2014-09; or (ii) adoption with the cumulative effect of initially applying ASU 2014-09 recognized at the date of initial application and providing certain additional disclosures as defined within ASU 2014-09. The Company is currently evaluating the impact of the future adoption of ASU 2014-09 on its consolidated financial statements, including the method of adoption to be used.

6

AVNET, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Recently adopted accounting pronouncements

In September 2015, the FASB issued Accounting Standards Update 2015-16, Business Combinations (Topic 805):Simplifying the Accounting for Measurement-Period Adjustments. The update requires that an acquiror recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined, including the cumulative effect of the change in provisional amount as if the accounting had been completed at the acquisition date. The Company early adopted this update in the first quarter of fiscal 2016, with no impact to its consolidated financial statements. 

2. Acquisitions

During the second quarter of fiscal 2016, the Company acquired two businesses with aggregated annualized sales of approximately $120.0 million for an aggregate purchase price of $36.4 million. The Company paid cash of $19.7 million, net of cash acquired, for such acquisitions in the second quarter of fiscal 2016. The Company has not disclosed the pro-forma impact of the fiscal 2016 acquisitions, as such impact was not material to the Company’s consolidated financial position or results of operations.

During the third quarter of fiscal 2016, there were no material measurement period adjustments for the fiscal 2016 acquisitions.

3. Goodwill and intangible assets

Goodwill

The following table presents the change in goodwill by reportable segment for the nine months ended April 2, 2016. All of the accumulated impairment was recognized in fiscal 2009.

	Electronics		Technology
	Marketing		Solutions		Total
	(Thousands)
Gross goodwill	$	1,684,216	$	974,274	$	2,658,490
Accumulated impairment		(1,045,110)		(334,624)		(1,379,734)
Carrying value at June 27, 2015		639,106		639,650		1,278,756
Additions		—		24,591		24,591
Adjustments		—		—		—
Foreign currency translation		(9,395)		1,454		(7,941)
Carrying value at April 2, 2016	$	629,711	$	665,695	$	1,295,406
Gross goodwill	$	1,674,821	$	1,000,319	$	2,675,140
Accumulated impairment		(1,045,110)		(334,624)		(1,379,734)
Carrying value at April 2, 2016	$	629,711	$	665,695	$	1,295,406

The goodwill additions are a result of businesses acquired in the second quarter of fiscal 2016.

In accordance with ASC 350, the Company does not amortize goodwill, but instead tests goodwill for impairment at least annually in the fourth fiscal quarter. The Company determined there was no goodwill impairment at any of its reporting units as a result of the fiscal 2015 goodwill impairment testing. As a result of the fiscal 2015 goodwill impairment testing, two reporting units (TS Asia and TS EMEA) had estimated fair values that were not substantially in excess of the carrying value of such reporting units. The Company evaluates each quarter if facts and circumstances indicate that it is more likely than not that the fair value of a reporting unit that has goodwill is less than its carrying value, which would require the Company to perform an interim goodwill impairment test. Indicators the Company

7

AVNET, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

evaluates to determine whether an interim goodwill impairment test is necessary include, but are not limited to (i) a sustained decrease in share price or market capitalization, (ii) changes in the macroeconomic or industry environments and (iii) the financial performance of its reporting units. During the third quarter of fiscal 2016, the Company concluded that an interim goodwill impairment test was not necessary. 

In assessing goodwill for impairment, the Company is required to make significant assumptions, judgments and estimates including evaluating whether facts and circumstances indicate that an interim goodwill impairment test is necessary. These assumptions, judgments and estimates may change in the future based upon market conditions or other events and could result in a goodwill impairment. The Company continues to evaluate each quarter those indicators that may require an interim goodwill impairment test. 

Intangible Assets

The following table presents the Company’s acquired intangible assets at April 2, 2016, and June 27, 2015, respectively. These intangible assets have a weighted average remaining useful life of approximately 4 years.

	April 2, 2016						June 27, 2015
	Acquired		Accumulated		Net Book		Acquired		Accumulated		Net Book
	Amount		Amortization		Value		Amount		Amortization		Value
	(Thousands)
Customer related	$	278,448	$	(202,575)	$	75,873	$	276,921	$	(190,593)	$	86,328
Trade name		4,973		(2,649)		2,324		6,240		(3,792)		2,448
Other		12,699		(3,907)		8,792		12,309		(1,354)		10,955
	$	296,120	$	(209,131)	$	86,989	$	295,470	$	(195,739)	$	99,731

Intangible asset amortization expense was $6.9 million and $10.6 million for the third quarters of fiscal 2016 and 2015, respectively, and $21.2 million and $32.6 million for the first nine months of fiscal 2016 and 2015, respectively. The following table presents the estimated future amortization expense for the remainder of fiscal 2016, the next five fiscal years and thereafter (in thousands):

Fiscal Year
Remainder of fiscal 2016		7,457
2017		25,091
2018		17,010
2019		13,525
2020		11,710
2021		7,261
Thereafter		4,935
Total	$	86,989

8

AVNET, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

4. Debt

Short-term debt consists of the following (in thousands):

	April 2, 2016		June 27, 2015		April 2, 2016		June 27, 2015
	Interest Rate				Carrying Balance
Bank credit facilities and other	4.74	%	5.54	%	$	156,742	$	81,115
Accounts receivable securitization program	0.90	%	—			250,000		—
Notes due September 2015	—		6.00	%		—		250,000
Notes due September 2016	6.63	%	—			300,000		—
Short-term debt					$	706,742	$	331,115

Bank credit facilities and other consists primarily of various committed and uncommitted lines of credit and other forms of bank debt with financial institutions utilized primarily to support the working capital requirements of the Company including its foreign operations.

In August 2014, the Company amended and extended its accounts receivable securitization program (the “Program”) with a group of financial institutions to allow the Company to transfer, on an ongoing revolving basis, an undivided interest in a designated pool of trade accounts receivable, to provide security or collateral for borrowings up to a maximum of $900.0 million. The Program does not qualify for off balance sheet accounting treatment and any borrowings under the Program are recorded as debt in the consolidated balance sheets. Under the Program, the Company legally sells and isolates certain U.S. trade accounts receivable into a wholly owned and consolidated bankruptcy remote special purpose entity. Such receivables, which are recorded within “Receivables” in the consolidated balance sheets, totaled $1.44 billion and $1.41 billion at April 2, 2016, and June 27, 2015, respectively. The Program contains certain covenants relating to the quality of the receivables sold. The Program also requires the Company to maintain certain minimum interest coverage and leverage ratios, which the Company was in compliance with as of April 2, 2016, and June 27, 2015. The Program has a two-year term that expires in August 2016 and as a result is considered short-term debt as of April 2, 2016. Interest on borrowings is calculated using a base rate or a commercial paper rate plus a spread of 0.38%. The facility fee is 0.38%.

In September 2015, the Company redeemed the $250.0 million of outstanding 6.00% Notes due September 2015, upon their maturity.

9

AVNET, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Long-term debt consists of the following (in thousands):

	April 2, 2016		June 27, 2015		April 2, 2016		June 27, 2015
	Interest Rate				Carrying Balance
Revolving credit facilities:
Accounts receivable securitization program	—		0.59	%	$	—	$	650,000
Credit Facility	1.86	%	1.45	%		422,236		50,000
Notes due:
September 2016	—		6.63	%		—		300,000
June 2020	5.88	%	5.88	%		300,000		300,000
December 2022	4.88	%	4.88	%		350,000		350,000
April 2026	4.63	%	—	%		550,000		—
Other long-term debt	2.51	%	2.06	%		1,201		1,828
Long-term debt before discount and debt issuance costs						1,623,437		1,651,828
Discount and debt issuance costs						(12,898)		(5,327)
Long-term debt					$	1,610,539	$	1,646,501

In March 2016, the Company issued $550.0 million of 4.625% Notes due April 2026 (“4.625% Notes”). The Company received proceeds of $546.0 million from the offering, net of discounts and incurred $4.5 million in underwriting fees and other debt issuance costs. The 4.625% Notes rank equally in right of payment with all existing and future senior unsecured debt of Avnet and interest will be payable semi-annually each year on April 15 and October 15.

The Company has a five-year $1.25 billion senior unsecured revolving credit facility (the “Credit Facility”) with a syndicate of banks, consisting of revolving credit facilities and the issuance of up to $150.0 million of letters of credit, which expires in July 2019. Subject to certain conditions, the Credit Facility may be increased up to $1.5 billion. Under the Credit Facility, the Company may select from various interest rate options, currencies and maturities. The Credit Facility contains certain covenants including various limitations on debt incurrence, share repurchases, dividends, investments and capital expenditures. The Credit Facility also includes financial covenants requiring the Company to maintain minimum interest coverage and leverage ratios, which the Company was in compliance with as of April 2, 2016 and June 27, 2015. As of April 2, 2016, and June 27, 2015, there were $4.9 million and $1.9 million, respectively, in letters of credit issued under the Credit Facility.

As of April 2, 2016, the carrying value and fair value of the Company’s total debt was $2.32 billion and $2.38 billion, respectively. At June 27, 2015, the carrying value and fair value of the Company's total debt was $1.98 billion and $2.04 billion, respectively. Fair value was estimated primarily based upon quoted market prices.

5. Derivative financial instruments

Many of the Company’s subsidiaries purchase and sell products in currencies other than their functional currencies. This subjects the Company to the risks associated with fluctuations in foreign currency exchange rates. The Company reduces this risk by utilizing natural hedging (i.e., offsetting receivables and payables in the same foreign currency) as well as by creating offsetting positions through the use of derivative financial instruments, primarily forward foreign currency exchange contracts typically with maturities of less than sixty days (“economic hedges”). The Company continues to have exposure to foreign currency risks to the extent they are not hedged. The Company adjusts any economic hedges to fair value through the consolidated statements of operations primarily within “other income (expense), net.” Therefore, the changes in valuation of the underlying items being economically hedged are offset by the changes in fair value of the forward foreign currency exchange contracts. The fair value of forward foreign currency exchange contracts, which are based upon Level 2 criteria under the ASC 820 fair value hierarchy, are classified in the captions “other current assets” or “accrued expenses and other,” as applicable, in the accompanying consolidated balance

10

AVNET, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

sheets as of April 2, 2016, and June 27, 2015, and were not material. The Company’s master netting and other similar arrangements with various financial institutions related to derivative financial instruments allow for the right of offset. Avnet’s policy is to present derivative financial instruments with the same counterparty as either a net asset or liability when the right of offset exists. The Company did not have material net gains or losses related to forward foreign currency exchange contracts in the third quarters and first nine months of fiscal 2016 and 2015, which are recorded as a component of “other income (expense), net” in the consolidated statements of operations.

The Company generally does not hedge its investments in its foreign operations. The Company does not enter into derivative financial instruments for trading or speculative purposes and monitors the financial stability and credit standing of its counterparties.

6. Commitments and contingencies

From time to time, the Company may become a party to, or be otherwise involved in various lawsuits, claims, investigations and other legal proceedings arising in the ordinary course of conducting its business. While litigation is subject to inherent uncertainties, management does not anticipate that any such matters will have a material adverse effect on the Company’s financial condition, liquidity or results of operations.

The Company also is currently subject to various pending and potential legal matters and investigations relating to compliance with governmental laws and regulations, including import/export, environmental, anticorruption and competition. For certain of these matters it is not possible to determine the ultimate outcome, and the Company cannot reasonably estimate the maximum potential exposure or the range of possible loss for such matters due primarily to being in the preliminary stages of the related proceedings and investigations. The Company currently believes that the resolution of such matters will not have a material adverse effect on the Company’s financial position or liquidity, but could possibly be material to its results of operations in any one reporting period.

As of April 2, 2016, and June 27, 2015, the Company has aggregate estimated liabilities of $21.3 million and $17.2 million, respectively, classified within accrued expenses and other for such compliance-related matters that were reasonably estimable as of such dates. Of these amounts, $10.0 million relates to a contingent liability for potential unpaid import duties associated with the acquisition of Bell Microproducts Inc. for estimated duties, interest and penalties that may be imposed from an ongoing compliance audit by Customs and Border Protection.

7. Income taxes

The Company’s effective tax rate on its income before income taxes was 23.1% in the third quarter of fiscal 2016 as compared with 28.9% in the third quarter of fiscal 2015. During the third quarter of fiscal 2016, the Company’s effective tax rate was favorably impacted primarily by (i) the mix of income in lower tax jurisdictions and (ii) the release of reserves related to the expiration of statutes of limitation. During the third quarter of fiscal 2015, the Company’s effective tax rate was favorably impacted primarily by (i) the mix of income in lower tax jurisdictions partially offset by (ii) an increase due to the write-off of a deferred tax asset.

For the first nine months of fiscal 2016 and 2015, the Company’s effective tax rate was 23.5% and 26.1%, respectively. The effective tax rate for the first nine months of fiscal 2016 was favorably impacted primarily by (i) the mix of income in lower tax jurisdictions, (ii) the release of valuation allowances against deferred tax assets that were determined to be realizable and (iii) the release of reserves related to audit settlements and the expiration of statutes of limitation. The effective tax rate for the first nine months of fiscal 2015 was favorably impacted by (i) the mix of income in lower tax jurisdictions and (ii) the release of reserves, primarily related to the formal deregistration of a foreign branch and the settlement of an audit in a foreign jurisdiction.

The Company applies the guidance in ASC 740, which requires management to use its judgment for the appropriate weighting of all available evidence when assessing the need for the establishment or the release of valuation

11

AVNET, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

allowances. As part of this analysis, the Company examines all available evidence on a jurisdiction by jurisdiction basis and weighs the positive and negative evidence when determining the need for full or partial valuation allowances. The evidence considered for each jurisdiction includes, among other items: (i) the historic levels of income or losses over a range of time periods, which may extend beyond the most recent three fiscal years depending upon the historical volatility of income in an individual jurisdiction; (ii) expectations and risks associated with underlying estimates of future taxable income, including considering the historical trend of down-cycles in the semiconductor and related industries; (iii) jurisdictional specific limitations on the utilization of deferred tax assets including when such assets expire; and (iv) prudent and feasible tax planning strategies.

The Company continues to evaluate the need for the valuation allowances against its deferred tax assets and will adjust valuation allowances as appropriate, which, if adjusted, could result in a significant decrease or increase to the effective tax rate in the period of the adjustment.

8. Pension plan

The Company has a noncontributory defined benefit pension plan (the “Plan”) for which the components of net periodic pension costs were as follows:

	Third Quarters Ended				Nine Months Ended
	April 2,		March 28,		April 2,		March 28,
	2016		2015		2016		2015
	(Thousands)
Service cost	$	9,935	$	9,873	$	30,356	$	29,619
Interest cost		5,328		4,449		15,984		13,347
Expected return on plan assets		(10,071)		(9,055)		(30,213)		(27,165)
Recognized net actuarial loss		3,183		3,251		9,549		9,753
Amortization of prior service credits		(393)		(393)		(1,179)		(1,179)
Net periodic pension cost	$	7,982	$	8,125	$	24,497	$	24,375

The Company made contributions to the Plan of $30.0 million during the first nine months of fiscal 2016. The Company expects to make an additional contribution to the Plan of $10.0 million in the fourth quarter of fiscal 2016.

The Plan meets the definition of a defined benefit plan and as a result, the Company must apply ASC 715 pension accounting to the Plan. The Plan itself, however, is a cash balance plan that is similar in nature to a defined contribution plan in that a participant's benefit is defined in terms of a stated account balance. A cash balance plan provides the Company with the benefit of applying any earnings on the Plan’s investments beyond the fixed return provided to participants, toward the Company’s future cash funding obligations.

Amounts reclassified out of accumulated other comprehensive income (loss), net of tax, to operating expenses during the third quarters and first nine months of fiscal 2016 and fiscal 2015 were not material and substantially all related to net periodic pension costs including recognition of actuarial losses and amortization of prior service credits.

9. Shareholders' equity

Share repurchase program

In August 2015, the Company’s Board of Directors amended the Company’s existing share repurchase program to authorize the repurchase of up to $1.25 billion of common stock in the open market or through privately negotiated transactions. The timing and actual number of shares purchased will depend on a variety of factors such as share price, corporate and regulatory requirements, and prevailing market conditions. During the third quarter of fiscal 2016, the

12

AVNET, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Company repurchased 3.7 million shares under this program at an average market price of $39.73 per share for a total cost of $145.7 million. During the first nine months of fiscal 2016, the Company repurchased 8.1 million shares under this program at an average price of $40.88 per share for a total cost of $330.8 million. Since the beginning of the repurchase program through the end of the third quarter of fiscal 2016, the Company has repurchased 30.2 million shares at an aggregate cost of $1.03 billion, and $221.7 million remains available for future repurchases.

Common stock dividend

In February 2016, the Company’s Board of Directors approved a dividend of $0.17 per common share and dividend payments of $21.9 million were made in March 2016.

10. Earnings per share

	Third Quarters Ended				Nine Months Ended
	April 2,		March 28,		April 2,		March 28,
	2016		2015		2016		2015
	(Thousands, except per share data)
Numerator:
Net income	$	123,459	$	121,529	$	409,725	$	413,180
Denominator:
Weighted average common shares for basic earnings per share		129,811		136,046		131,834		136,965
Net effect of dilutive stock options, restricted stock units and performance share units		1,839		1,675		2,464		2,216
Weighted average common shares for diluted earnings per share		131,650		137,721		134,298		139,181
Basic earnings per share	$	0.95	$	0.89	$	3.11	$	3.02
Diluted earnings per share	$	0.94	$	0.88	$	3.05	$	2.97
Stock options excluded from earnings per share calculation due to anti-dilutive effect		422		—		378		—

11. Additional cash flow information

Interest and income taxes paid in the nine months ended April 2, 2016, and March 28, 2015 were as follows:

	Nine Months Ended
	April 2,		March 28,
	2016		2015
	(Thousands)
Interest	$	80,313	$	80,478
Income taxes	$	85,323	$	122,056

The Company includes book overdrafts as part of accounts payable on its consolidated balance sheets and reflects changes in such balances as part of cash flows from operating activities in its consolidated statements of cash flows.

Non-cash investing activities related to purchases of property, plant and equipment that have been accrued, but not paid for, were $15.2 million and $40.0 million as of April 2, 2016, and March 28, 2015, respectively.

13

AVNET, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Included in cash and cash equivalents as of April 2, 2016, was $44.8 million of cash equivalents, which was primarily comprised of overnight time deposits whose fair value was determined using Level 1 measurements under the ASC 820 fair value hierarchy.

12. Segment information

Electronics Marketing (“EM”) and Technology Solutions (“TS”) are the Company's reportable segments (“operating groups”). EM markets and sells semiconductors and interconnect, passive and electromechanical devices and embedded products to a diverse customer base serving many end-markets. TS focuses on the value-added distribution of enterprise computing servers and systems, software, storage, services and complex solutions from the world’s foremost technology manufacturers and software developers. TS also provides the latest hard disk drives, microprocessor, motherboard and DRAM module technologies to manufacturers of general-purpose computers and system builders.

	Third Quarters Ended				Nine Months Ended
	April 2,		March 28,		April 2,		March 28,
	2016		2015		2016		2015
	(Thousands)
Sales:
Electronics Marketing	$	4,041,527	$	4,219,528	$	12,627,543	$	13,028,812
Technology Solutions		2,133,189		2,517,332		7,364,924		8,099,514
	$	6,174,716	$	6,736,860	$	19,992,467	$	21,128,326
Operating income (expense):
Electronics Marketing	$	183,271	$	197,287	$	570,286	$	591,447
Technology Solutions		55,498		68,098		247,136		248,072
Corporate		(33,546)		(34,992)		(116,530)		(110,805)
		205,223		230,393		700,892		728,714
Restructuring, integration and other expenses (Note 13)		(16,172)		(15,494)		(63,352)		(47,071)
Amortization of acquired intangible assets and other		(7,433)		(11,187)		(22,845)		(34,447)
	$	181,618	$	203,712	$	614,695	$	647,196
Sales, by geographic area:
Americas (1)	$	2,433,904	$	2,677,745	$	7,958,408	$	8,376,754
EMEA (2)		1,946,575		1,969,069		5,897,243		6,006,500
Asia/Pacific (3)		1,794,237		2,090,046		6,136,816		6,745,072
	$	6,174,716	$	6,736,860	$	19,992,467	$	21,128,326

(1)Includes sales from the United States of $2.20 billion and $2.39 billion for the quarters ended April 2, 2016, and March 28, 2015, respectively. Includes sales from the United States of $7.20 billion and $7.45 billion for the first nine months of fiscal 2016 and 2015, respectively.

(2)Includes sales from Germany and the United Kingdom of $749.4 million and $294.2 million, respectively, for the quarter ended April 2, 2016, and $2.31 billion and $975.3 million, respectively, for the first nine months of fiscal 2016. Includes sales from Germany and the United Kingdom of $688.7 million and $372.3 million, respectively, for the quarter ended March 28, 2015, and $2.22 billion and $1.12 billion, respectively, for the first nine months of fiscal 2015.

(3)Includes sales from China (including Hong Kong) and Taiwan of $627.1 million and $586.6 million, respectively, for the quarter ended April 2, 2016, and $2.05 billion and $2.27 billion, respectively, for the first nine months of fiscal 2016. Includes sales from China (including Hong Kong) and Taiwan of $667.5 million and $802.2 million, respectively, for the quarter ended March 28, 2015, and $2.13 billion and $2.62 billion, respectively, for the first

14

AVNET, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

nine months of fiscal 2015.

	April 2,		June 27,
	2016		2015
	(Thousands)
Assets:
Electronics Marketing	$	6,669,914	$	6,497,714
Technology Solutions		3,742,670		3,608,953
Corporate		712,876		693,286
	$	11,125,460	$	10,799,953
Property, plant, and equipment, net, by geographic area:
Americas (1)	$	400,969	$	358,063
EMEA (2)		179,850		182,311
Asia/Pacific		29,928		28,405
	$	610,747	$	568,779

(1)Includes property, plant and equipment, net, of $391.1 million and $352.2 million as of April 2, 2016, and June 27, 2015, respectively, in the United States.

(2)Includes property, plant and equipment, net, of $75.4 million and $73.1 million in Germany and Belgium, respectively, as of April 2, 2016, and $74.2 million and $74.7 million in Germany and Belgium, respectively, as of June 27, 2015.

13. Restructuring, integration and other expenses

Fiscal 2016

During the third quarter and first nine months of fiscal 2016, the Company took certain actions in an effort to reduce future operating expenses, including the continuation of the restructuring activities started in the fourth quarter of fiscal 2015. These actions include activities related to the Avnet Advantage initiative, which is focused on creating long-term operational efficiencies. In addition, the Company incurred integration and other costs as discussed further below.  The following table presents the restructuring, integration and other expenses recorded during the third quarter and first nine months of fiscal 2016:

	Quarter Ended		Nine Months Ended
	April 2, 2016		April 2, 2016
	(Thousands, except per share data)
Restructuring expenses	$	7,874	$	39,350
Integration costs		4,331		8,824
Other costs		4,614		16,749
Changes in estimates for prior year restructuring liabilities		(647)		(1,571)
Restructuring, integration and other expenses before tax	$	16,172	$	63,352
Restructuring, integration and other expenses after tax	$	10,804	$	42,029
Restructuring, integration and other expenses per share on a diluted basis	$	0.08	$	0.31

15

AVNET, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The activity related to the restructuring liabilities established and other associated expenses incurred during fiscal 2016 is presented in the following table:

			Facility			Asset
	Severance		Exit Costs		Impairments		Other		Total
	(Thousands)
Fiscal 2016 restructuring expenses	$	32,670	$	4,863	$	1,014	$	803	$	39,350
Cash payments		(23,735)		(2,058)		—		(267)		(26,060)
Non-cash amounts		—		479		(1,014)		(378)		(913)
Other, principally foreign currency translation		150		(57)		—		62		155
Balance at April 2, 2016	$	9,085	$	3,227	$	—	$	220	$	12,532

Severance expense recorded in the first nine months of fiscal 2016 related to the reduction of approximately 560 employees, primarily in operations, sales and business support functions, in connection with cost reduction actions taken in both operating groups including the impact of a voluntary retirement program in the United States. Facility exit costs primarily consist of liabilities for remaining lease obligations for exited facilities. Asset impairments relate to the impairment of property, plant and equipment as a result of the underlying restructuring actions taken in fiscal 2016. Other restructuring costs related primarily to other miscellaneous restructuring and exit costs. Of the $39.4 million in restructuring expenses recorded during the first nine months of fiscal 2016, $22.0 million related to EM and $17.4 million related to TS. The Company expects the majority of the remaining severance and facility exit costs to be paid by the end of fiscal 2016.

Integration costs are primarily related to the integration of acquired businesses, the integration of certain regional and global businesses, the integration of significant information technology systems and incremental costs incurred as part of the consolidation, relocation and closure of warehouse and office facilities. Integration costs include certain consulting costs for significant new information technology systems and business operation integration assistance, facility moving costs, legal fees, travel, meeting, training, marketing and communication costs that are specifically and incrementally incurred as a result of such integration activities. Also included in integration costs are incremental salary costs specific to integration, consolidation and closure activities. Other costs consists primarily of professional fees incurred for acquisitions, costs incurred for businesses divested or closed in current or prior periods, any ongoing facilities operating costs associated with the consolidation, relocation and closure of facilities once such facilities have been vacated or substantially vacated, and other miscellaneous costs that relate to restructuring, integration and other expenses. Included in other costs during the first nine months of fiscal 2016 was $4.3 million of expense associated with Avnet’s estimated environmental remediation obligations related to certain legacy manufacturing operations that were divested several decades ago and $5.2 million of legal expenses related to lawsuits associated with operations of an acquired business prior to Avnet’s acquisition. The remaining integration and other costs in the first nine months of fiscal 2016 were comprised of many different costs, none of which were individually material.

16

AVNET, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Fiscal 2015

During fiscal 2015, the Company incurred restructuring expenses related to various restructuring actions intended to achieve planned synergies from acquired businesses and to reduce future operating expenses. The following table presents the activity during the first nine months of fiscal 2016 related to the remaining restructuring liabilities established during fiscal 2015:

			Facility
	Severance		Exit Costs		Other		Total
	(Thousands)
Balance at June 27, 2015	$	11,256	$	3,210	$	—	$	14,466
Cash payments		(9,526)		(958)		—		(10,484)
Changes in estimates, net		(1,772)		(254)		—		(2,026)
Non-cash amounts		—		—		—		—
Other, principally foreign currency translation		2,821		(63)		—		2,758
Balance at April 2, 2016	$	2,779	$	1,935	$	—	$	4,714

As of April 2, 2016, the Company expects the majority of the remaining severance and facility exit cost liabilities to be paid by the end of fiscal 2016.

Fiscal 2014 and prior

As of June 27, 2015, there were $11.8 million of restructuring liabilities remaining related to restructuring actions taken in fiscal years 2014 and prior, the majority of which relates to facility exit costs. The remaining balance for such historical restructuring actions as of April 2, 2016, was $4.8 million, which is expected to be paid by the end of fiscal 2016.

17

Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations

For a description of the Company’s critical accounting policies and an understanding of the significant factors that influenced the Company’s performance during the quarter ended April 2, 2016, this Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) should be read in conjunction with the consolidated financial statements, including the related notes, appearing in Item 1 of this Report, as well as the Company’s Annual Report on Form 10-K for the fiscal year ended June 27, 2015. The Company operates on a “52/53 week” fiscal year, and as a result, the first nine months of fiscal 2016 contained 40 weeks and the first nine months of fiscal 2015 contained 39 weeks. This extra week, which occurred in the first quarter of fiscal 2016, impacts the year-over-year analysis for the first nine months of fiscal 2016 in this MD&A.

There are references to the impact of foreign currency translation in the discussion of the Company’s results of operations. When the U.S. Dollar strengthens and the stronger exchange rates of the current year are used to translate the results of operations of Avnet’s subsidiaries denominated in foreign currencies, the resulting impact is a decrease in U.S. Dollars of reported results. Conversely, when the U.S. Dollar weakens and the weaker exchange rates of the current year are used to translate the results of operations of Avnet’s subsidiaries denominated in foreign currencies, the resulting impact is an increase in U.S. Dollars of reported results. In the discussion that follows, results excluding this impact, primarily for subsidiaries in Europe, the Middle East and Africa (“EMEA”) and Asia/Pacific, are referred to as “excluding the translation impact of changes in foreign currency exchange rates” or “constant currency.”

In addition to disclosing financial results that are determined in accordance with generally accepted accounting principles in the U.S. (“GAAP”), the Company also discloses certain non-GAAP financial information, including:

· Sales, income or expense items excluding the translation impact of changes in foreign currency exchange rates by adjusting the exchange rates used in current periods to be consistent with the exchange rates in effect during prior comparable year-over-year periods, as discussed above.

· Sales adjusted for certain items that impact the year-over-year analysis, which includes the impact of more than insignificant acquisitions or divestitures by adjusting Avnet’s prior periods to include the sales of acquired businesses or exclude the sales of divested businesses as if the acquisitions or divestitures had occurred at the beginning of the earliest period presented. In addition, fiscal 2016 sales are adjusted for the estimated impact of the extra week of sales in the first quarter of fiscal 2016 due to it being a 14-week quarter, as discussed above. Sales taking into account these adjustments are referred to as “organic sales.”

· Operating income excluding (i) restructuring, integration and other expenses (see Restructuring, Integration and Other Expenses in this MD&A) and (ii) amortization of acquired intangible assets and other. Operating income excluding such amounts is referred to as “adjusted operating income.”

The reconciliation of operating income to adjusted operating income is presented in the following table:

	Third Quarters Ended				Nine Months Ended
	April 2,		March 28,		April 2,		March 28,
	2016		2015		2016		2015
	(Thousands)
Operating income	$	181,618	$	203,712	$	614,695	$	647,196
Restructuring, integration and other expenses		16,172		15,494		63,352		47,071
Amortization of acquired intangible assets and other		7,433		11,187		22,845		34,447
Adjusted operating income	$	205,223	$	230,393	$	700,892	$	728,714

Management believes that providing this additional information is useful to financial statement readers to better assess and understand operating performance, especially when comparing results with prior periods or forecasting performance for future periods, primarily because management typically monitors the business both including and excluding these adjustments to GAAP results. Management also uses these non-GAAP measures to establish operational

18

goals and, in many cases, for measuring performance for compensation purposes. However, any analysis of results on a non-GAAP basis should be used as a complement to, and in conjunction with, results presented in accordance with GAAP.

OVERVIEW

Organization

Avnet, Inc., incorporated in New York in 1955, together with its consolidated subsidiaries (the “Company” or “Avnet”), is a global value-added distributor of electronic components, enterprise computer and storage products and software, IT solutions and services and embedded subsystems. Avnet creates a vital link in the technology supply chain that connects the world’s leading electronic component and computer product manufacturers and software developers with a global customer base of original equipment manufacturers, electronic manufacturing services providers, original design manufacturers, systems integrators, independent software vendors and value-added resellers. Avnet distributes electronic components, computer products and software, as received from its suppliers or through a customized solution, and offers assembly and other value-added services. In addition, Avnet provides engineering design, materials management and logistics services, system integration and configuration and supply chain services customized to meet specific requirements of both customers and suppliers.

Avnet’s two operating groups, — EM and TS, have operations in each of the three major economic regions of the world: the Americas; EMEA; and Asia/Pacific, consisting of Asia, Australia and New Zealand (“Asia”). A summary of each operating group is provided in Note 12, “Segment information” to the Company's consolidated financial statements included in this Quarterly Report on Form 10-Q.

Results of Operations

Executive Summary

Sales for the third quarter of fiscal 2016 were $6.17 billion, as compared to the third quarter of fiscal 2015 sales of $6.74 billion. The decrease in year-over-year reported sales of $562.1 million was the result of a $178.0 million decrease at EM and a $384.1 million decrease at TS. Sales decreased 6.9% year over year in constant currency as the result of a 3.3% decrease at EM and a 12.9% decrease at TS.

Gross profit margin of 11.9% increased 44 basis points compared to the third quarter of fiscal 2015 as a result of gross profit margin improvements at both EM and TS.

Operating income margin was 2.9% in the third quarter of fiscal 2016 as compared with 3.0% in the third quarter of fiscal 2015. Adjusted operating income margin was 3.3% in the third quarter of fiscal 2016 as compared to 3.4% in the third quarter of fiscal 2015. EM operating income margin decreased 15 basis points year over year to 4.5% and TS operating income margin decreased 11 basis points year over year to 2.6%. These decreases were primarily due to decreases in sales, partially offset by increases in gross profit margin and decreases in operating expenses.

During the third quarter of fiscal 2016, the Company generated $212.9 million of cash from operating activities compared to $60.1 million of cash from operating activities in the third quarter of fiscal 2015.

19

Sales

The following tables present the reconciliation of reported sales to organic sales for the third quarters and first nine months of fiscal 2016 and fiscal 2015.

	Third Quarter Ended		Nine Months Ended
					Acquisitions/
	As Reported and		As		Divestitures (1)/
	Organic Sales -		Reported -		Estimated		Organic Sales -
	Fiscal 2016		Fiscal 2016		Extra Week (2)		Fiscal 2016
	(Dollars in thousands)
Avnet, Inc.	$	6,174,716	$	19,992,467	$	(464,098)	$	19,528,369
EM		4,041,527		12,627,543		(300,000)		12,327,543
TS		2,133,189		7,364,924		(164,098)		7,200,826
EM
Americas	$	1,192,695	$	3,583,065	$	(82,000)	$	3,501,065
EMEA		1,330,751		3,798,262		(92,000)		3,706,262
Asia		1,518,081		5,246,216		(126,000)		5,120,216
TS
Americas	$	1,241,209	$	4,375,343	$	(123,112)	$	4,252,231
EMEA		615,824		2,098,981		(17,986)		2,080,995
Asia		276,156		890,600		(23,000)		867,600

	Third Quarter Ended						Nine Months Ended
	As						As
	Reported -		Acquisitions/		Organic Sales -		Reported -		Acquisitions/		Organic Sales -
	Fiscal 2015		Divestitures (1)		Fiscal 2015		Fiscal 2015		Divestitures (1)		Fiscal 2015
	(Dollars in thousands)
Avnet, Inc.	$	6,736,860	$	21,246	$	6,758,106	$	21,128,326	$	94,110	$	21,222,436
EM		4,219,528		—		4,219,528		13,028,812		—		13,028,812
TS		2,517,332		21,246		2,538,578		8,099,514		94,110		8,193,624
EM
Americas	$	1,237,213	$	—	$	1,237,213	$	3,652,114	$	—	$	3,652,114
EMEA		1,251,873		—		1,251,873		3,759,678		—		3,759,678
Asia		1,730,442		—		1,730,442		5,617,020		—		5,617,020
TS
Americas	$	1,440,532	$	6,630	$	1,447,162	$	4,724,640	$	17,425	$	4,742,065
EMEA		717,196		14,616		731,812		2,246,822		76,685		2,323,507
Asia		359,604		—		359,604		1,128,052		—		1,128,052

⁽¹⁾ Includes the following second quarter of fiscal 2016 acquisitions:

· Orchestra Service Gmbh acquired November 2015 in the TS EMEA Region

· ExitCertified Corporation acquired January 2016 in the TS Americas Region

⁽²⁾ The impact of the additional week of sales in the first quarter of fiscal 2016 is estimated

20

The table below provides the year-over-year comparison of reported third quarter sales for Avnet and the EM and TS operating groups to organic sales to allow readers to better understand and assess the Company’s sales performance by operating group and region.

					Sales						Organic
					As Reported						Sales
	Sales		Sales		Year-Year %		Organic		Organic		Year-Year %
	As Reported		As Reported		Change in		Sales		Sales		Change in
	Q3-Fiscal		Year-Year		Constant		Q3-Fiscal		Year-Year		Constant
	2016		% Change		Currency		2016		% Change		Currency
	(Dollars in thousands)
Avnet, Inc.	$	6,174,716	(8.3)	%	(6.9)	%	$	6,174,716	(8.6)	%	(7.2)	%
EM		4,041,527	(4.2)		(3.3)			4,041,527	(4.2)		(3.3)
TS		2,133,189	(15.3)		(12.9)			2,133,189	(16.0)		(13.6)
EM
Americas	$	1,192,695	(3.6)	%	—		$	1,192,695	(3.6)	%	—
EMEA		1,330,751	6.3		9.4	%		1,330,751	6.3		9.4	%
Asia/Pacific		1,518,081	(12.3)		(12.3)			1,518,081	(12.3)		(12.3)
TS
Americas	$	1,241,209	(13.8)	%	—		$	1,241,209	(14.2)	%	—
EMEA		615,824	(14.1)		(10.8)	%		615,824	(15.9)		(12.6)	%
Asia/Pacific		276,156	(23.2)		(19.2)			276,156	(23.2)		(19.2)

Avnet sales for the third quarter of fiscal 2016 were $6.17 billion, a decrease of 8.3%, or $562.1 million, from the third quarter of fiscal 2015 sales of $6.74 billion with both EM and TS contributing toward this decline. Avnet sales in constant currency decreased 6.9% and organic sales in constant currency decreased 7.2% year over year.

EM sales of $4.04 billion in the third quarter of fiscal 2016 decreased 4.2% from the third quarter of fiscal 2015 sales of $4.22 billion and EM sales in constant currency decreased 3.3% year over year. On a regional basis, sales decreased 3.6% in the Americas region. Sales in constant currency increased 9.4% in EMEA primarily due to strong demand across the region. Sales decreased 12.3% in Asia primarily as a result of a lower level of high-volume supply chain engagements year over year.

TS sales of $2.13 billion in the third quarter of fiscal 2016 decreased 15.3% from the third quarter of fiscal 2015 sales of $2.52 billion. TS sales in constant currency decreased 12.9% and organic sales in constant currency declined 13.6% year over year. Sales in the Americas region decreased 13.8% year over year. Sales in EMEA decreased 14.1% and organic sales in constant currency decreased 12.6%. Sales in Asia decreased 23.2% and 19.2% in constant currency. Each of these decreases in sales was primarily due to lower overall demand for certain legacy datacenter products and from the impact of changes in product mix.  At a product level, declines in servers, storage and software were partially offset by increases in networking and services.

Avnet sales for the first nine months of fiscal 2016 were $19.99 billion, a decrease of 5.4% as compared to sales of $21.13 billion for the first nine months of fiscal 2015. EM sales of $12.63 billion for the first nine months of fiscal 2016 decreased 3.1% as compared to the first nine months of fiscal 2015 sales of $13.03 billion. TS sales of $7.36 billion for the first nine months of fiscal 2016 decreased 9.1% as compared to the first nine months of fiscal 2015 sales of $8.10 billion.

Gross Profit and Gross Profit Margins

Avnet gross profit for the third quarter of fiscal 2016 was $736.8 million, a decrease of $37.5 million, or 4.8%, from the third quarter of fiscal 2015 gross profit of $774.4 million, due to declines in sales at both EM and TS. Avnet gross profit margin of 11.9% increased 44 basis points from the third quarter of fiscal 2015. EM gross profit margin increased from the third quarter of fiscal 2015 primarily due to a lower level of high-volume supply chain engagements

21

resulting in an increase in gross profit margin in the Asia region, partially offset by a decrease in the EMEA region. TS gross profit margin increased year over year primarily as a result of increases across all three regions primarily as a result of portfolio management and product mix difference between years.

Avnet gross profit and gross profit margins were $2.31 billion and 11.5%, respectively, for the first nine months of fiscal 2016 as compared with $2.41 billion and 11.4%, respectively for the first nine months of fiscal 2015. The decrease in gross profit was driven by lower sales at both EM and TS. Gross profit margin increased 15 basis points year over year as improvements at TS were offset by declines at EM.

Selling, General and Administrative Expenses

Selling, general and administrative expenses (“SG&A expenses”) were $539.0 million in the third quarter of fiscal 2016, a decrease of $16.1 million, or 2.9%, from the third quarter of fiscal 2015. The year-over-year decrease in SG&A expenses was primarily due to reductions at both EM and TS as a result of changes in foreign currency exchange rates between years, and the impact of prior restructuring actions partially offset by an increase in SG&A expenses for acquisitions and other costs, including employee merit compensation increases that took place in January 2016.  

Metrics that management monitors with respect to its operating expenses are SG&A expenses as a percentage of sales and as a percentage of gross profit. In the third quarter of fiscal 2016, SG&A expenses as a percentage of sales were 8.7% and as a percentage of gross profit were 73.2% as compared with 8.2% and 71.7%, respectively, in the third quarter of fiscal 2015. SG&A expenses, excluding amortization of acquired intangibles, as a percentage of gross profit was 72.2% in the third quarter of fiscal 2016 as compared to 70.3% in the third quarter of fiscal 2015. SG&A expense as a percentage of gross profit at EM increased 145 basis points year over year primarily due to lower sales, partially offset by lower SG&A expenses. SG&A expense as a percentage of gross profit at TS increased 327 basis points year over year, primarily as a result of lower sales, partially offset by lower SG&A expenses.

SG&A expenses for the first nine months of fiscal 2016 were $1.63 billion, or 8.1% of Avnet sales, as compared with $1.71 billion, or 8.1% of Avnet sales, in the first nine months of fiscal 2015. SG&A expenses were 70.6% of gross profit in the first nine months of 2016 as compared with 71.2% in the first nine months of fiscal 2015.  SG&A expenses for the first nine months of fiscal 2016, excluding amortization of acquired intangibles, as a percentage of gross profit were 69.6% as compared with 69.7% for the first nine months of fiscal 2015. The decrease in SG&A expenses was primarily due to reductions at both EM and TS as a result of changes in foreign currency exchange rates between years, and the impact of prior restructuring actions partially offset by an increase in SG&A expenses for acquisitions and other costs.

Restructuring, Integration and Other Expenses

During the third quarter of fiscal 2016, the Company incurred restructuring expenses related to certain actions intended to reduce future operating expenses. These actions include activities related to the Avnet Advantage initiative, which is focused on creating long-term operational efficiencies. In addition, the Company incurred integration and other costs primarily associated with the integration of acquired businesses, the integration of certain global and regional businesses, the integration of significant information technology systems and other costs associated with the acquisition of and the closure or divestiture of certain businesses. As a result, the Company recorded restructuring, integration and other expenses of $16.2 million during the third quarter of fiscal 2016. The Company recorded $7.9 million of restructuring costs and expects to realize approximately $12.0 million in incremental annualized operating cost savings once such restructuring actions are completed. The incremental annualized cost savings are expected to benefit EM by approximately $5.0 million and TS by approximately $7.0 million. The Company also incurred integration costs of $4.3 million, other costs of $4.6 million and a net reversal of $0.6 million for changes in estimates for costs associated with prior year restructuring actions. The after tax impact of restructuring, integration, and other expenses was $10.8 million and $0.08 per share on a diluted basis for the third quarter of fiscal 2016.

During the first nine months of fiscal 2016, the Company incurred restructuring, integration and other expenses of $63.3 million, including restructuring costs of $39.4 million, integration costs of $8.8 million, other costs of $16.7 million and a net reversal for changes in estimates for costs associated with previous restructuring actions of $1.6

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million. The after tax impact of restructuring, integration and other expenses for the first nine months of fiscal 2016 was $42.0 million and $0.31 per share on a diluted basis. The Company expects to realize approximately $40.0 million in incremental annualized cost savings as a result of restructuring actions taken in the first nine months of fiscal 2016 once such restructuring actions are completed. The incremental annualized cost savings are expected to benefit EM by approximately $17.0 million and TS by approximately $23.0 million.

Comparatively, in the third quarter of fiscal 2015, restructuring, integration and other expenses were $15.5 million. The after tax impact of restructuring, integration, and other expenses was $12.0 million and $0.09 per share on a diluted basis.

In the first nine months of fiscal 2015, restructuring, integration and other expenses were $47.1 million. The after tax impact of restructuring, integration and other expenses for the first nine months of fiscal 2015 was $35.4 million and $0.25 per share on a diluted basis.

See Note 13, “Restructuring, integration and other expenses” to the Company's consolidated financial statements included in this Quarterly Report on Form 10-Q for additional information related to restructuring, integration and other expenses.

Operating Income

During the third quarter of fiscal 2016, the Company generated operating income of $181.6 million, representing a 10.8% decrease compared to the third quarter of fiscal 2015 operating income of $203.7 million. Adjusted operating income was $205.2 million, or 3.3% of sales, in the third quarter of fiscal 2016 as compared with $230.4 million, or 3.4% of sales, in the third quarter of fiscal 2015. EM operating income of $183.3 million decreased $14.0 million, or 7.1% year over year and operating income margin decreased 15 basis points to 4.5% from 4.7%. TS operating income of $55.5 million decreased $12.6 million, or 18.5% year over year and operating income margin decreased 11 basis points to 2.6% from 2.7%. These decreases in operating income margin were primarily due to lower sales partially offset by increases in gross profit margin and lower operating expenses.

Operating income for the first nine months of fiscal 2016 was $614.7 million, or 3.1% of Avnet sales, as compared with $647.2 million, or 3.1% of Avnet sales for the first nine months of fiscal 2015. Adjusted operating income for the first nine months of fiscal 2016 was $700.9 million, or 3.5% of Avnet sales, as compared with $728.7 million, or 3.4% of Avnet sales for the first nine months of fiscal 2015.

Interest Expense and Other Income (Expense), Net

Interest expense in the third quarter of fiscal 2016 was $23.3 million, a decrease of $0.6 million or 2.5%, as compared with interest expense of $23.9 million in the third quarter of fiscal 2015. Interest expense in the first nine months of fiscal 2016 was $69.3 million, a decrease of $2.6 million or 3.7%, as compared with interest expense of $71.9 million in the first nine months of fiscal 2015. The decrease in interest expense in the third quarter and first nine months of fiscal 2016 was primarily related to the repayment at maturity of the $250.0 million 6.00% Notes in September 2015 and a corresponding lower average borrowing rate, partially offset by an increase in average borrowings during the third quarter of 2016.

During the third quarter of fiscal 2016, the Company had $2.2 million of other income as compared with $8.9 million of other expense in the third quarter of fiscal 2015. During the first nine months of fiscal 2016, the Company had $10.1 million of other expenses as compared with $16.0 million of other expenses in the first nine months of fiscal 2015. The decrease in other expense in the third quarter and first nine months of fiscal 2016 is primarily attributable to the greater strengthening of the U.S. Dollar relative to foreign currencies in fiscal 2015 compared to fiscal 2016 and the corresponding higher costs incurred to purchase forward foreign currency exchange contracts in order to economically hedge such foreign currency exposures.

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Income Tax Expense

The Company’s effective tax rate on its income before income taxes was 23.1% in the third quarter of fiscal 2016 as compared with 28.9% in the third quarter of fiscal 2015. During the third quarter of fiscal 2016, the Company’s effective tax rate was favorably impacted primarily by (i) the mix of income in lower tax jurisdictions and (ii) the release of reserves related to the expiration of statutes of limitation. During the third quarter of fiscal 2015, the Company’s effective tax rate was favorably impacted primarily by (i) the mix of income in lower tax jurisdictions partially offset by (ii) an increase due to the write-off of a deferred tax asset.

For the first nine months of fiscal 2016 and 2015, the Company’s effective tax rate was 23.5% and 26.1%, respectively. The effective tax rate for the first nine months of fiscal 2016 was favorably impacted primarily by (i) the mix of income in lower tax jurisdictions, (ii) the release of valuation allowances against deferred tax assets that were determined to be realizable and (iii) the release of reserves related to audit settlements and the expiration of statutes of limitation. The effective tax rate for the first nine months of fiscal 2015 was favorably impacted by (i) the mix of income in lower tax rate jurisdictions and (ii) the release of reserves, primarily related to the formal deregistration of a foreign branch and the settlement of an audit in a foreign jurisdiction.

See Note 7, “Income taxes” to the Company’s consolidated financial statements included in this Quarterly Report on Form 10-Q for additional information on the Company's effective tax rate.

Net Income

As a result of the factors described in the preceding sections of this MD&A, the Company’s net income for the third quarter of fiscal 2016 was $123.5 million, or $0.94 per share on a diluted basis, as compared with $121.5 million, or $0.88 per share on a diluted basis, in the third quarter of fiscal 2015. 

As a result of the factors described in the preceding sections of this MD&A, the Company’s net income for the first nine months of fiscal 2016 was $409.7 million, or $3.05 per share on a diluted basis, as compared with $413.2 million, or $2.97 per share on a diluted basis, in the first nine months of fiscal 2015.

LIQUIDITY AND CAPITAL RESOURCES

Cash Flow

Cash Flow from Operating Activities

During the first nine months of fiscal 2016, the Company generated $297.1 million of cash from its operating activities compared to a cash generation of $284.6 million in the first nine months of fiscal 2015. These operating cash flows are comprised of: (i) cash flow generated from net income, adjusted for the impact of non-cash and other items, which includes depreciation and amortization expenses, deferred income taxes, stock-based compensation expense and other non-cash items (including provisions for doubtful accounts and periodic pension costs) and (ii) cash flows used for, or generated from, working capital and other, excluding cash and cash equivalents. Cash used for working capital and other was $300.2 million during the first nine months of fiscal 2016, including an increase in inventories of $319.9 million, decreases in accounts payable of $74.5 million and accrued expenses and other of $87.6 million, partially offset by a decrease in accounts receivable of $181.7 million. Comparatively, cash used for working capital and other was $368.3 million during the first nine months of fiscal 2015, including increases in inventories of $90.0 million, accounts receivable of $186.0 million and a decrease in accrued expenses and other of $210.8 million, partially offset by an increase in accounts payable of $118.4 million.

Cash Flow from Financing Activities

During the first nine months of fiscal 2016, the Company received net proceeds of $542.0 million as a result of the issuance of $550.0 million of 4.625% Notes due April 2026 and $448.5 million from borrowings of bank and other debt. During the first nine months of fiscal 2016, the Company repaid upon maturity the $250 million of 6.00% Notes due

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September 2015 and made net repayments of $400.0 million under the Company's accounts receivable securitization program. During the first nine months of fiscal 2016, the Company paid dividends on common stock of $66.9 million and repurchased $334.2 million of common stock.

During the first nine months of fiscal 2015, the Company received net proceeds of $110.0 million under the Company's accounts receivable securitization program and made net repayments of $96.4 million for bank and other debt. During the first nine months of fiscal 2015, the Company paid dividends on common stock of $65.6 million and repurchased $147.6 million of common stock.

Cash Flow from Investing Activities

During the first nine months of fiscal 2016, the Company used $19.7 million of cash for acquisitions, net of cash acquired, and used $111.1 million for capital expenditures primarily related to information system development costs, computer hardware and software purchases and facilities costs. Additionally, the Company received proceeds of $8.4 million from other investing activities.

During the first nine months of fiscal 2015, the Company used $133.4 million for capital expenditures and $8.8 million for other investing activities.

Contractual Obligations

For a detailed description of the Company’s long-term debt and lease commitments for the next five years and thereafter, see Long-Term Contractual Obligations appearing in Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended June 27, 2015. With the exception of the Company’s debt transactions discussed herein, there are no material changes to this information outside of normal borrowings and repayments of long-term debt and operating lease payments. The Company does not currently have any material uncancellable commitments for capital expenditures or inventory purchases.

Financing Transactions

See Note 4, “Debt” to the Company’s consolidated financial statements included in this Quarterly Report on Form 10-Q for additional information on financing transactions including the Credit Facility, the Program and the outstanding Notes as of April 2, 2016. The Company was in compliance with all covenants under the Credit Facility and the Program as of April 2, 2016.

The Company has several lines of credit and other forms of bank debt in the U.S. and various foreign locations to fund the short-term working capital, foreign exchange, overdraft and letter of credit needs of its wholly owned subsidiaries primarily in EMEA and Asia. Avnet generally guarantees its subsidiaries’ obligations under such debt facilities.

Liquidity

The Company held cash and cash equivalents of $1,036.5 million as of April 2, 2016, of which $966.8 million was held outside the United States. As of June 27, 2015, the Company held cash and cash equivalents of $932.6 million, of which $855.8 million was held outside of the United States.

As of the end of the third quarter of fiscal 2016, the Company had a combined total borrowing capacity of $2.15 billion under the Credit Facility and the Program. There were $422.2 million in borrowings outstanding and $4.9 million in letters of credit issued under the Credit Facility and $250.0 million in borrowings outstanding under the Program, resulting in approximately $1.47 billion of total availability as of April 2, 2016. Availability under the Program is subject to the Company having sufficient eligible trade accounts receivable to support desired borrowings. During the third quarter and first nine months of fiscal 2016, the Company had an average daily balance outstanding of approximately $446.8 million and $353.0 million, respectively, under the Credit Facility and approximately $751.2 million and $738.9 million, respectively, under the Program. During the third quarter and first nine months of fiscal 2015, the Company had

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an average daily balance outstanding of approximately $85.0 million and $50.0 million, respectively, under the Credit Facility and approximately $834.0 million and $793.0 million, respectively, under the Program. The Company expects to use cash on hand and available borrowing capacity in order to repay the $300.0 million of 6.63% Notes due September 2016. The Company expects to renew or replace the Program on similar terms, subject to market conditions, before its maturity in August 2016. 

During periods of weakening demand in the electronic components and enterprise computer solutions industry, the Company typically generates cash from operating activities. Conversely, the Company is more likely to use operating cash flows for working capital requirements during periods of higher growth. During the third quarter of fiscal 2016, the Company generated $212.9 million from operating activities. The Company generated $596.5 million from operating activities over the trailing four fiscal quarters ended April 2, 2016.

Liquidity is subject to many factors, such as normal business operations as well as general economic, financial, competitive, legislative, and regulatory factors that are beyond the Company’s control. Cash balances generated and held in foreign locations are used for ongoing working capital, capital expenditure needs and to support acquisitions. These balances are currently expected to be permanently reinvested outside the United States. If these funds were needed for general corporate use in the United States, the Company would incur significant income taxes to repatriate cash held in foreign locations. In addition, local government regulations may restrict the Company’s ability to move funds among various locations under certain circumstances. Management does not believe such restrictions would limit the Company’s ability to pursue its intended business strategy. Management believes that Avnet’s available borrowing capacity, its current cash on hand and the Company’s expected ability to generate operating cash flows in the future will be sufficient to meet its future liquidity needs. The Company also may issue debt or equity securities in the future and management believes the Company will have adequate access to the capital markets, if needed.

During the first nine months of fiscal 2016, the Company utilized $19.7 million of cash, net of cash acquired, for acquisitions. The Company has made, and expects to continue to make, strategic investments through acquisition activity to the extent the investments strengthen Avnet’s competitive position and meet management’s return on capital thresholds.

In addition to continuing to make investments in acquisitions, as of April 2, 2016, the Company may repurchase up to an aggregate of $221.7 million of shares of the Company’s common stock through a $1.25 billion share repurchase program approved by the Board of Directors. The Company may repurchase stock from time to time at the discretion of management, subject to strategic considerations, market conditions and other factors. The Company may terminate or limit the share repurchase program at any time without prior notice. The timing and actual number of shares repurchased will depend on a variety of factors such as share price, corporate and regulatory requirements, and prevailing market conditions. Since the beginning of the repurchase program through the end of the third quarter of fiscal 2016, the Company has repurchased 30.2 million shares of stock at an aggregate cost of $1.03 billion. Shares repurchased were retired. Additionally, the Company currently expects to pay quarterly cash dividends on shares of its common stock, subject to approval of the Board of Directors. During the third quarter of fiscal 2016, the Board of Directors approved a dividend of $0.17 per share, which resulted in $21.9 million of dividend payments during the quarter.

Recently Issued Accounting Pronouncements

See Note 1, “Basis of presentation and new accounting pronouncements” to the Company's consolidated financial statements included in this Quarterly Report on Form 10-Q for a description of recently issued accounting pronouncements.

Item 3.Quantitative and Qualitative Disclosures About Market Risk

The Company seeks to reduce earnings and cash flow volatility associated with changes in foreign currency exchange rates by entering into financial arrangements that are intended to provide an economic hedge against all or a portion of the risks associated with such volatility. The Company continues to have exposure to such risks to the extent they are not economically hedged.

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See Item 7A, Quantitative and Qualitative Disclosures About Market Risk, in the Company’s Annual Report on Form 10-K for the fiscal year ended June 27, 2015, for further discussion of market risks associated with foreign currency exchange rates and interest rates. Avnet’s exposure to such risks has not changed materially since June 27, 2015, as the Company continues to economically hedge the majority of its foreign currency exchange exposures. Thus, any increase or decrease in fair value of the Company’s forward foreign currency exchange contracts is generally offset by an opposite effect on the related hedged position. For interest rate risk, the Company continues to maintain a combination of fixed and variable rate debts to mitigate the exposure to fluctuation in market interest rates.

See Liquidity and Capital Resources — Financing Transactions appearing in Item 2 of this Form 10-Q for further discussion of the Company’s financing transactions and capital structure. As of April 2, 2016, 75% of the Company’s debt bears interest at a fixed rate and 25% of the Company’s debt bears interest at variable rates. Therefore, a hypothetical 1.0% (100 basis points) increase in interest rates would result in a $1.4 million decrease in income before income taxes in the Company’s consolidated statement of operations for the third quarter of fiscal 2016.

Item 4.Controls and Procedures

The Company’s management, including its Chief Executive Officer and Chief Financial Officer, have evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)) as of the end of the reporting period covered by this Quarterly Report on Form 10-Q. Based on such evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this Quarterly Report on Form 10-Q, the Company’s disclosure controls and procedures are effective such that material information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified by the Securities and Exchange Commission’s rules and forms and is accumulated and communicated to management, including the Company’s principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

During the third quarter of fiscal 2016, there were no changes to the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Subsequent to the third quarter of fiscal 2016, the Company implemented a new ERP system to support the EM Americas region. This implementation has resulted in changes to certain internal controls over financial reporting. The Company performed pre-implementation procedures and is in the process of performing post-implementation procedures to ensure the effectiveness of internal controls over financial reporting as a result of such implementation.

PART II

OTHER INFORMATION

Item 1.Legal Proceedings

As a result primarily of certain former manufacturing operations, Avnet has incurred and may have future liability under various federal, state and local environmental laws and regulations, including those governing pollution and exposure to, and the handling, storage and disposal of, hazardous substances. For example, under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (“CERCLA”) and similar state laws, Avnet is and may be liable for the costs of cleaning up environmental contamination on or from certain of its current or former properties, and at off-site locations where the Company disposed of wastes in the past. Such laws may impose joint and several liability. Typically, however, the costs for clean up at such sites are allocated among potentially responsible parties based upon each party’s relative contribution to the contamination, and other factors.

Pursuant to SEC regulations, including but not limited to Item 103 of Regulation S-K, the Company regularly assesses the status of and developments in pending environmental and other compliance related legal proceedings to determine whether any such proceedings should be identified specifically in this discussion of legal proceedings, and has

27

concluded that no particular pending legal proceeding requires public disclosure. Based on the information known to date, management believes that the Company has appropriately accrued in its consolidated financial statements for its share of the estimable costs of environmental and other compliance related matters.

The Company is also party to various other lawsuits, claims, investigations and other legal proceedings arising from time to time in the normal course of business. While litigation is subject to inherent uncertainties, management currently believes that the ultimate outcome of these proceedings, individually and in the aggregate, will not have a material adverse effect on the Company’s financial position, liquidity or results of operations.

Item 1A.Risk Factors

This Quarterly Report on Form 10-Q (“Quarterly Report”) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended, with respect to the financial condition, results of operations and business of the Company. You can find many of these statements by looking for words like “believes,” “plans,” “expects,” “anticipates,” “should,” “will,” “may,” “estimates” or similar expressions in this Quarterly Report or in documents incorporated by reference in this Quarterly Report. These forward-looking statements are subject to numerous assumptions, risks and uncertainties. You should understand that the following important factors, in addition to those discussed elsewhere in this Quarterly Report and in the Company’s Annual Report on Form 10-K for the fiscal year ended June 27, 2015, could affect the Company’s future results of operations, and could cause those results or other outcomes to differ materially from those expressed or implied in the forward-looking statements:

· the effect of global economic conditions, including the current global economic uncertainty;

· competitive pressures among distributors of electronic components and computer products;

· an industry down-cycle in semiconductors, IT hardware or software products;

· relationships with key suppliers and allocations of products by suppliers;

· risks relating to the Company's international sales and operations, including risks relating to the ability to repatriate cash, foreign currency fluctuations, duties and taxes, and compliance with international and U.S. laws;

· risks relating to acquisitions and investments;

· adverse effects on the Company's supply chain, shipping costs, third-party service providers, customers and suppliers, including as a result of issues caused by natural and weather-related disasters;

· risks related to cyber attacks and the Company's information systems;

· general economic and business conditions (domestic and foreign) affecting Avnet's financial performance and, indirectly, Avnet's credit ratings, debt covenant compliance, and liquidity and access to financing; and

· legislative or regulatory changes affecting Avnet’s businesses.

Any forward-looking statement speaks only as of the date on which that statement is made. Except as required by law, the Company assumes no obligation to update any forward-looking statement to reflect events or circumstances that occur after the date on which the statement is made.

The discussion of Avnet’s business and operations should be read together with the risk factors contained in Item 1A of its Annual Report on Form 10-K for the fiscal year ended June 27, 2015, which describe various risks and uncertainties to which the Company is or may become subject. These risks and uncertainties have the potential to affect Avnet’s business, financial condition, results of operations, cash flows, strategies or prospects in a material and adverse

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manner. As of April 2, 2016, there have been no material changes to the risk factors set forth in the Company’s Annual Report on Form 10-K for the fiscal year ended June 27, 2015.

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Item 2.Unregistered Sales of Equity Securities and Use of Proceeds

The Company’s Board of Directors has approved the repurchase of up to $1.25 billion of the Company’s common stock under the Company’s share repurchase program. The following table includes the Company’s monthly purchases of the Company’s common stock during the third quarter of fiscal 2016, under the share repurchase program, which is part of a publicly announced plan.

				Total Number of	Approximate Dollar
	Total	Average		Shares Purchased	Value of Shares That
	Number	Price		as Part of Publicly	May Yet Be
	of Shares	Paid per		Announced Plans	Purchased under the
Period	Purchased	Share		or Programs	Plans or Programs
January	1,862,544	$	39.00	1,862,544	$	294,809,000
February	1,393,632	$	39.93	1,393,632	$	239,168,000
March	412,521	$	42.35	412,521	$	221,699,000

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Item 6.Exhibits

Exhibit
Number	Exhibit
4.1	Form of Officers’ Certificate setting forth the terms of the 4.625% Notes due 2026 (incorporated herein by reference to the Company’s Current Report on Form 8-K dated March 22, 2016, Exhibit 4.1).
10.1*	Amendment No. 8 dated as of March 16, 2016, to the Second Amended and Restated Receivables Purchase Agreement.
31.1*	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**	Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**	Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*	XBRL Instance Document.
101.SCH*	XBRL Taxonomy Extension Schema Document.
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document.
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document.
101.LAB*	XBRL Taxonomy Extension Label Linkbase Document.
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document.

*

Filed herewith.

**

Furnished herewith. The information in these exhibits shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to liability under that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such filing.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

AVNET, INC. (Registrant)
By:	/s/ KEVIN MORIARTY
	Kevin Moriarty
	Senior Vice President and Chief Financial Officer

Date: April 28, 2016

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EX-10.1

AMENDMENT NO.8 TO
SECOND AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT

This Amendment No. 8 to Second Amended and Restated Receivables Purchase Agreement (this “Amendment”) is dated as of March 16, 2016,  among Avnet Receivables Corporation, a Delaware corporation (“Seller”), Avnet, Inc., a New York corporation (“Avnet”), as initial Servicer (the Servicer together with Seller, the “Seller Parties” and each a “Seller Party”), each of the entities party hereto identified as a “Financial Institution” (together with any of their respective successors and assigns hereunder, the “Financial Institutions”), each of the entities party hereto identified as a “Company” (together with any of their respective successors and assigns hereunder, the “Companies”) and JPMorgan Chase Bank, N.A. (successor by merger to Bank One, NA (Main Office Chicago)), as agent for the Purchasers or any successor agent hereunder (together with its successors and assigns hereunder, the “Agent”), amending the Second Amended and Restated Receivables Purchase Agreement, dated as of August 26, 2010, as amended by Amendment No. 1 thereto, dated as of December 28, 2010, Amendment No. 2 thereto, dated as of August 25, 2011, Amendment No. 3 thereto, dated as of March 7, 2012, Amendment No. 4 thereto, dated as of August 23, 2012, Amendment No. 5 thereto, dated as of August 22, 2013, Amendment No. 6 thereto, dated as of August 21, 2014, and Amendment No. 7 thereto, dated as of May 22, 2015,each among the Seller Parties, the Financial Institutions party thereto, the Companies party thereto, and the Agent (the “Original Agreement,” and as further amended, modified or supplemented from time to time, the “Receivables Purchase Agreement”). 

RECITALS

The parties hereto are the current parties to the Original Agreement and they now desire to amend the Original Agreement, subject to the terms and conditions hereof, as more particularly described herein.

AGREEMENT

NOW, THEREFORE, in consideration of the premises, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

Section 1. Definitions Used Herein.  Capitalized terms used herein and not otherwise defined herein shall have the respective meanings set forth for such terms in, or incorporated by reference into, the Original Agreement.

Section 2. Amendment.  Subject to the terms and conditions set forth herein, the Original Agreement is hereby amended as follows:

(a) Section 7.1(p) of the Original Agreement is hereby deleted in its entirety and replaced with the following:

“(p)General Ledger and Certain Receivables.  Such Seller Party shall maintain its consolidated general accounting ledger such that all indebtedness and other obligations owed to Originator or in which Originator has a security interest or other interest arising in connection with the sale of merchandise or the rendering of services by Originator and sold to Seller are recorded as part of general ledger category “company code 0100,” “company code 1001” or “company code US10”; provided however, that from and after December 28, 2010 indebtedness or other obligations owed to Originator or in which

Amendment No. 8to

Avnet Receivables Purchase Agreement

Originator has a security interest or other interest arising in connection with the sale of merchandise or the rendering of services by the business previously conducted by businesses acquired by Originator in an Excluded Acquisition shall not be recorded as part of general ledger category “company code 0100,” “company code 1001” or “company code US10”  until such time, if any, as such indebtedness or other obligations are originated, serviced and collected in a manner substantially similar to the Receivables.”

(b) The definition of “Excluded Receivable” in Exhibit I to the Original Agreement is hereby deleted in its entirety and replaced with the following:

““Excluded Receivable”means all indebtedness and other obligations owed to Originator or in which Originator has a security interest or other interest (including, without limitation, any indebtedness, obligation or interest constituting an account, chattel paper, instrument or general intangible) arising in connection with the sale of merchandise or the rendering of services by Originator and further includes, without limitation, the obligation to pay any Finance Charges with respect thereto, which, in any case:

(i) the account debtor for which is Sirius Computer Solutions, Inc. and such indebtedness or other obligation was originated after May 22, 2015; or

(ii) both (a) arises in connection with the sale of merchandise or the rendering of services by the business previously conducted by any businesses acquired by Originator in an Excluded Acquisition and (b) is not recorded or maintained in Avnet’s consolidated general ledger accounting records as part of general ledger category “company code 0100,”“company code 1001” or “company code US10” (other than any Receivables previously coded under “company code 0100,”“company code 1001”or “company code US10”  that have been coded under any other category without the Agent’s prior written consent). 

Indebtedness and other rights and obligations arising from any one transaction, including, without limitation, indebtedness and other rights and obligations represented by an individual invoice, shall constitute an Excluded Receivable separate from an Excluded Receivable consisting of the indebtedness and other rights and obligations arising from any other transaction; provided, that any indebtedness, rights or obligations referred to in the immediately preceding sentence shall be an Excluded Receivable regardless of whether the account debtor or Seller treats such indebtedness, rights or obligations as a separate payment obligation.”

Section 3. Conditions to Effectiveness of Amendment.  This Amendment shall become effective as of the date hereof, upon the satisfaction of the conditions precedent that:

(a) Amendment.  The Agent and each Seller Party shall have received, on or before the date hereof, executed counterparts of this Amendment, duly executed by each of the parties hereto.

(b) Representations and Warranties.  As of the date hereof, both before and after giving effect to this Amendment, all of the representations and warranties of each Seller Party contained in the Original Agreement and in each other Transaction Document shall be true and correct in all material respects as though made on the date hereof (and by its execution hereof, each Seller Party shall be deemed to have represented and warranted such); it being understood that any specific occurrence or

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occurrences constituting breaches of any representation or warranty, to the extent waived in writing by the Financial Institutions and the Companies, ceased to constitute any such breach (solely with respect to such specific occurrence or occurrences) from and after the date of such waiver.

(c) No Amortization Event or Potential Amortization Event.  As of the date hereof, both before and after giving effect to this Amendment, no Amortization Event or Potential Amortization Event shall have occurred andbe continuing (and by its execution hereof, each Seller Party shall be deemed to have represented and warranted such); it being understood that any specific occurrence or occurrences constituting Amortization Events or Potential Amortization Events, to the extent waived in writing by the Financial Institutions and the Companies, ceased to constitute Amortization Events or Potential Amortization Events (solely with respect to such specific occurrence or occurrences) from and after the date of such waiver.

Section 4. Miscellaneous.

(a) Effect; Ratification.  The amendment set forth herein is effective solely for the purposes set forth herein and shall be limited precisely as written, and shall not be deemed (i) to be a consent to, or an acknowledgment of, any amendment, waiver or modification of any other term or condition of the Original Agreement or of any other instrument or agreement referred to therein or (ii) to prejudice any right or remedy which the Agent, any Company or Financial Institution (or any of their respective assigns) may now have or may have in the future under or in connection with the Receivables Purchase Agreement, as amended hereby, or any other instrument or agreement referred to therein.  Each reference in the Receivables Purchase Agreement to “this Agreement,”“herein,”“hereof” and words of like import and each reference in the other Transaction Documents to the Original Agreement or to the “Receivables Purchase Agreement”shall mean the Original Agreement as amended hereby.  This Amendment shall be construed in connection with and as part of the Receivables Purchase Agreement and all terms, conditions, representations, warranties, covenants and agreements set forth in the Receivables Purchase Agreement and each other instrument or agreement referred to therein, except as herein amended, are hereby ratified and confirmed and shall remain in full force and effect.

(b) Transaction Documents.  This Amendment is a Transaction Document executed pursuant to the Receivables Purchase Agreement and shall be construed, administered and applied in accordance with the terms and provisions thereof.

(c) Costs, Fees and Expenses.  Seller agrees to reimburse the Agent and each Purchaser and its assigns upon demand for all reasonable and documented out-of-pocket costs, fees and expenses in connection with the preparation, execution and delivery of this Amendment (including the reasonable fees and expenses of counsel to the Agent).

(d) Counterparts.  This Amendment may be executed in any number of counterparts, each such counterpart constituting an original and all of which when taken together shall constitute one and the same instrument.

(e) Severability.  Any provision contained in this Amendment which is held to be inoperative, unenforceable or invalid in any jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable or invalid without affecting the remaining provisions of this Amendment in that jurisdiction or the operation, enforceability or validity of such provision in any other jurisdiction.

(f) GOVERNING LAW.  THIS AMENDMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK EXCLUDING CHOICE-OF-LAW PRINCIPLES OF THE LAW OF SUCH STATE THAT WOULD

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REQUIRE THE APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN SUCH STATE.

(g) WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AMENDMENT, ANY DOCUMENT EXECUTED BY ORIGINATOR PURSUANT TO THIS AMENDMENT OR THE RELATIONSHIP ESTABLISHED HEREUNDER OR THEREUNDER.

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed and delivered by their respective duly authorized officers as of the date first written above.

AVNET RECEIVABLES CORPORATION,
as Seller
By:	______________________________________
Name:	Kevin Moriarty
Title:	President
AVNET, INC., as Servicer
By:	______________________________________
Name:	Erin Lewin
Title:	Senior Vice President and General Counsel

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Amendment No. 8to

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Commitment:  $153,000,000	CHARIOT FUNDING LLC,
	as a Company and as a Financial Institution
	By:	JPMorgan Chase Bank, N.A.,
		its Attorney-in-Fact
	By:	______________________________________
	Name:
	Title:
	JPMORGAN CHASE BANK, N.A.,
	as Agent
	By:	______________________________________
	Name:
	Title:

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Amendment No. 8to

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	LIBERTY STREET FUNDING LLC,
	as a Company
	By:	______________________________________
	Name:
	Title:
Commitment:  $153,000,000	THE BANK OF NOVA SCOTIA,
	as a Financial Institution
	By:	______________________________________
	Name:
	Title:

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Amendment No. 8to

Avnet Receivables Purchase Agreement

	VICTORY RECEIVABLES CORPORATION,
	as a Company
	By:	_____________________________________
	Name:
	Title:
Commitment:  $127,500,000	THE BANK OF TOKYO-MITSUBISHI UFJ, LTD.,
	NEW YORK BRANCH, as a Financial Institution
	By:	_____________________________________
	Name:
	Title:

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Amendment No. 8to

Avnet Receivables Purchase Agreement

	PNC BANK, NATIONAL ASSOCIATION,
	as a Company
	By:	______________________________________
	Name:
	Title:
Commitment:  $125,000,000	PNC BANK, NATIONAL ASSOCIATION,
	as a Financial Institution
	By:	______________________________________
	Name:
	Title:

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Amendment No. 8to

Avnet Receivables Purchase Agreement

	BRANCH BANKING AND TRUST COMPANY,
	as a Company
	By:	______________________________________
	Name:
	Title:
Commitment:  $75,000,000	BRANCH BANKING AND TRUST COMPANY,
	as a Financial Institution
	By:	______________________________________
	Name:
	Title:

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Amendment No. 8to

Avnet Receivables Purchase Agreement

	WELLS FARGO BANK, NATIONAL ASSOCIATION,
	as a Company
	By:	______________________________________
	Name:
	Title:
Commitment:  $150,000,000	WELLS FARGO BANK, NATIONAL ASSOCIATION,
	as a Financial Institution
	By:	______________________________________
	Name:
	Title:

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Amendment No. 8to

Avnet Receivables Purchase Agreement

	Manhattan Asset Funding
	Company LLC, as a Company
	By:	MAF Receivables Corp., its member
	By:	______________________________________
	Name:
	Title:
	SMBC NIKKO SECURITIES AMERICA, INC.,
	as agent for the SMBC Company
	By:	______________________________________
	Name:
	Title:
Commitment:  $127,500,000	Sumitomo Mitsui Banking Corporation, as a Financial Institution
	By:	______________________________________
	Name:
	Title:

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EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Richard Hamada, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Avnet, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as such term is defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing equivalent functions):

a. all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: April 28, 2016

/s/ RICHARD HAMADA

Richard Hamada

Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, Kevin Moriarty, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Avnet, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as such term is defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing equivalent functions):

a. all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: April28, 2016

/s/ KEVIN MORIARTY

Kevin Moriarty

Chief Financial Officer

EX-32.1

Exhibit 32.1

Certification Pursuant to 18 U.S.C. Section 1350

(as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002)

In connection with the Quarterly Report on Form 10-Q for the period ended April2, 2016 (the “Report”), I, Richard Hamada, Chief Executive Officer of Avnet, Inc., (the “Company”) hereby certify that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: April28, 2016

/s/ RICHARD HAMADA

Richard Hamada

Chief Executive Officer

EX-32.2

Exhibit 32.2

Certification Pursuant to 18 U.S.C. Section 1350

(as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002)

In connection with the Quarterly Report on Form 10-Q for the period ended April2, 2016 (the “Report”), I, Kevin Moriarty, Chief Financial Officer of Avnet, Inc., (the “Company”) hereby certify that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: April 28, 2016

/s/ KEVIN MORIARTY

Kevin Moriarty

Chief Financial Officer

XML

Document and Entity Information Document - shares	9 Months Ended
	Apr. 02, 2016	Apr. 21, 2016
Document and Entity Information [Abstract]
Entity Registrant Name	AVNET INC
Entity Central Index Key	0000008858
Document Type	10-Q
Document Period End Date	Apr. 02, 2016
Current Fiscal Year End Date	--07-02
Amendment Flag	false
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q3
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		128,515,224

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Apr. 02, 2016	Jun. 27, 2015
Current assets:
Cash and cash equivalents	$ 1,036,485	$ 932,553
Receivables, less allowances of $69,969 and $80,721, respectively	4,874,179	5,054,307
Inventories	2,826,858	2,482,183
Prepaid and other current assets	200,579	173,030
Total current assets	8,938,101	8,642,073
Property, plant and equipment, net	610,747	568,779
Goodwill	1,295,406	1,278,756
Intangible assets, net	86,989	99,731
Other assets	194,217	210,614
Total assets	11,125,460	10,799,953
Current liabilities:
Short-term debt	706,742	331,115
Accounts payable	3,297,981	3,338,052
Accrued expenses and other	559,697	603,129
Total current liabilities	4,564,420	4,272,296
Long-term debt	1,610,539	1,646,501
Other liabilities	190,300	196,135
Total liabilities	$ 6,365,259	$ 6,114,932
Commitments and contingencies (Note 6)
Shareholders' equity:
Common stock $1.00 par; authorized 300,000,000 shares; issued 128,542,843 and 135,496,472 shares, respectively	$ 128,543	$ 135,496
Additional paid-in capital	1,442,947	1,408,422
Retained earnings	3,602,702	3,582,599
Accumulated other comprehensive loss	(413,671)	(441,038)
Treasury stock at cost, 28,641 and 31,901 shares, respectively	(320)	(458)
Total shareholders' equity	4,760,201	4,685,021
Total liabilities and shareholders' equity	$ 11,125,460	$ 10,799,953

XML

Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands	Apr. 02, 2016	Jun. 27, 2015
Current assets:
Allowance for doubtful accounts receivable, current (in dollars)	$ 69,969	$ 80,721
Stockholders' equity:
Common stock, par value (in dollars per share)	$ 1.00	$ 1.00
Common stock, shares authorized	300,000,000	300,000,000
Common stock, shares, issued	128,542,843	135,496,472
Treasury Stock, shares	28,641	31,901

XML

Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Apr. 02, 2016	Mar. 28, 2015	Apr. 02, 2016	Mar. 28, 2015
Income Statement [Abstract]
Sales	$ 6,174,716	$ 6,736,860	$ 19,992,467	$ 21,128,326
Cost of sales	5,437,888	5,962,506	17,685,995	18,721,003
Gross profit	736,828	774,354	2,306,472	2,407,323
Selling, general and administrative expenses	539,038	555,148	1,628,425	1,713,056
Restructuring, integration and other expenses	16,172	15,494	63,352	47,071
Operating income	181,618	203,712	614,695	647,196
Other income (expense), net	2,200	(8,945)	(10,138)	(15,963)
Interest expense	(23,281)	(23,871)	(69,306)	(71,936)
Income before income taxes	160,537	170,896	535,251	559,297
Income tax expense	37,078	49,367	125,526	146,117
Net income	$ 123,459	$ 121,529	$ 409,725	$ 413,180
Earnings per share:
Basic	$ 0.95	$ 0.89	$ 3.11	$ 3.02
Diluted	$ 0.94	$ 0.88	$ 3.05	$ 2.97
Shares used to compute earnings per share:
Basic	129,811	136,046	131,834	136,965
Diluted	131,650	137,721	134,298	139,181
Cash dividends paid per common share	$ 0.17	$ 0.16	$ 0.51	$ 0.48

XML

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Apr. 02, 2016	Mar. 28, 2015	Apr. 02, 2016	Mar. 28, 2015
Statement of Comprehensive Income [Abstract]
Net income	$ 123,459	$ 121,529	$ 409,725	$ 413,180
Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustments and other	129,872	(270,518)	20,987	(634,554)
Pension adjustments, net	2,156	1,785	6,380	5,354
Total comprehensive income (loss)	$ 255,487	$ (147,204)	$ 437,092	$ (216,020)

XML

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Apr. 02, 2016	Mar. 28, 2015
Cash flows from operating activities:
Net income	$ 409,725	$ 413,180
Non-cash and other reconciling items:
Depreciation	71,112	70,919
Amortization	21,183	32,630
Deferred income taxes	3,963	29,500
Stock-based compensation	47,724	48,890
Other, net	43,665	57,766
Changes in (net of effects from businesses acquired):
Receivables	181,723	(186,037)
Inventories	(319,865)	(89,994)
Accounts payable	(74,510)	118,449
Accrued expenses and other, net	(87,593)	(210,751)
Net cash flows provided by operating activities	297,127	284,552
Cash flows from financing activities:
Issuance of notes, net of issuance costs	542,043
Repayment of notes	(250,000)
Borrowings (repayments) under accounts receivable securitization program, net	(400,000)	110,000
Borrowings (repayments) of bank and revolving debt, net	448,468	(96,372)
Repurchases of common stock (Note 9)	(334,177)	(147,606)
Dividends paid on common stock	(66,944)	(65,602)
Other, net	(12,028)	(13,993)
Net cash flows used for financing activities	(72,638)	(213,573)
Cash flows from investing activities:
Purchases of property, plant and equipment	(111,070)	(133,422)
Acquisitions of businesses, net of cash acquired (Note 2)	(19,675)
Other, net	8,436	(8,765)
Net cash flows used for investing activities	(122,309)	(142,187)
Effect of currency exchange rate changes on cash and cash equivalents	1,752	(54,295)
Cash and cash equivalents:
- increase (decrease)	103,932	(125,503)
- at beginning of period	932,553	928,971
- at end of period	$ 1,036,485	$ 803,468

XML

Basis of presentation and new accounting pronouncements

9 Months Ended

Apr. 02, 2016

Basis of presentation and new accounting pronouncements

Basis of presentation and new accounting pronouncements

1. Basis of presentation and new accounting pronouncements

In the opinion of management, the accompanying unaudited interim consolidated financial statements contain all adjustments necessary to present fairly Avnet, Inc.'s and its consolidated subsidiaries' (the “Company” or “Avnet”) financial position, results of operations, comprehensive income (loss) and cash flows. All such adjustments are of a normal recurring nature.

The preparation of financial statements in accordance with generally accepted accounting principles ("GAAP") requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements. Actual results may differ from these estimates.

Interim results of operations are not necessarily indicative of the results to be expected for the full fiscal year. The information included in this Form 10-Q should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 27, 2015.

Fiscal year

The Company operates on a “52/53 week” fiscal year and fiscal 2016 contains 53 weeks compared to 52 weeks in fiscal 2015. As a result, the first nine months of fiscal 2016 contained 40 weeks compared to the first nine months of fiscal 2015, which contained 39 weeks.

New accounting pronouncements

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2016-02, Leases (Topic 842) (“ASU 2016-02”). The update requires a lessee to recognize assets and liabilities on the consolidated balance sheets for leases with lease terms greater than 12 months. ASU 2016-02 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted. Accordingly, the update will be effective for the Company beginning in the first quarter of fiscal 2020, using a modified retrospective approach. The Company is currently evaluating the impact of the adoption of ASU 2016-02 on its consolidated financial statements. 

In November 2015, the FASB issued Accounting Standards Update No. 2015-17, Income Taxes (Topic 740):  Balance Sheet Classification of Deferred Taxes (“ASU 2015-17”), to simplify the presentation of deferred income taxes by requiring deferred tax liabilities and assets be classified as noncurrent in a classified balance sheet. The planned early adoption of this update at the end of fiscal 2016 is not expected to have a material impact on the Company’s financial statements.

In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), to supersede nearly all existing revenue recognition guidance under GAAP. The core principles of ASU 2014-09 are to recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. Application of the requirements of ASU 2014-09 may require more judgment and estimates within the revenue recognition process compared to existing GAAP. In July 2015, the FASB approved a one-year delay in the effective date of ASU 2014-09, which makes the effective date for the Company the first quarter of fiscal 2019. The Company may adopt the requirements of ASU 2014-09 using either of two acceptable adoption methods: (i) retrospective adoption to each prior reporting period presented with the option to elect certain practical expedients as defined within ASU 2014-09; or (ii) adoption with the cumulative effect of initially applying ASU 2014-09 recognized at the date of initial application and providing certain additional disclosures as defined within ASU 2014-09. The Company is currently evaluating the impact of the future adoption of ASU 2014-09 on its consolidated financial statements, including the method of adoption to be used.

Recently adopted accounting pronouncements

In September 2015, the FASB issued Accounting Standards Update 2015-16, Business Combinations (Topic 805):Simplifying the Accounting for Measurement-Period Adjustments. The update requires that an acquiror recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined, including the cumulative effect of the change in provisional amount as if the accounting had been completed at the acquisition date. The Company early adopted this update in the first quarter of fiscal 2016, with no impact to its consolidated financial statements. 

XML

Acquisitions and divestitures

9 Months Ended

Apr. 02, 2016

Acquisitions

Acquisitions and divestitures

2. Acquisitions

During the second quarter of fiscal 2016, the Company acquired two businesses with aggregated annualized sales of approximately $120.0 million for an aggregate purchase price of $36.4 million. The Company paid cash of $19.7 million, net of cash acquired, for such acquisitions in the second quarter of fiscal 2016. The Company has not disclosed the pro-forma impact of the fiscal 2016 acquisitions, as such impact was not material to the Company’s consolidated financial position or results of operations.

During the third quarter of fiscal 2016, there were no material measurement period adjustments for the fiscal 2016 acquisitions.

XML

Goodwill and intangible assets

9 Months Ended

Apr. 02, 2016

Goodwill and intangible assets

Goodwill and intangible assets

3. Goodwill and intangible assets

Goodwill

The following table presents the change in goodwill by reportable segment for the nine months ended April 2, 2016. All of the accumulated impairment was recognized in fiscal 2009.

	Electronics		Technology
	Marketing		Solutions		Total
	(Thousands)
Gross goodwill	$	1,684,216	$	974,274	$	2,658,490
Accumulated impairment		(1,045,110)		(334,624)		(1,379,734)
Carrying value at June 27, 2015		639,106		639,650		1,278,756
Additions		—		24,591		24,591
Adjustments		—		—		—
Foreign currency translation		(9,395)		1,454		(7,941)
Carrying value at April 2, 2016	$	629,711	$	665,695	$	1,295,406
Gross goodwill	$	1,674,821	$	1,000,319	$	2,675,140
Accumulated impairment		(1,045,110)		(334,624)		(1,379,734)
Carrying value at April 2, 2016	$	629,711	$	665,695	$	1,295,406

The goodwill additions are a result of businesses acquired in the second quarter of fiscal 2016.

In accordance with ASC 350, the Company does not amortize goodwill, but instead tests goodwill for impairment at least annually in the fourth fiscal quarter. The Company determined there was no goodwill impairment at any of its reporting units as a result of the fiscal 2015 goodwill impairment testing. As a result of the fiscal 2015 goodwill impairment testing, two reporting units (TS Asia and TS EMEA) had estimated fair values that were not substantially in excess of the carrying value of such reporting units. The Company evaluates each quarter if facts and circumstances indicate that it is more likely than not that the fair value of a reporting unit that has goodwill is less than its carrying value, which would require the Company to perform an interim goodwill impairment test. Indicators the Company evaluates to determine whether an interim goodwill impairment test is necessary include, but are not limited to (i) a sustained decrease in share price or market capitalization, (ii) changes in the macroeconomic or industry environments and (iii) the financial performance of its reporting units. During the third quarter of fiscal 2016, the Company concluded that an interim goodwill impairment test was not necessary. 

In assessing goodwill for impairment, the Company is required to make significant assumptions, judgments and estimates including evaluating whether facts and circumstances indicate that an interim goodwill impairment test is necessary. These assumptions, judgments and estimates may change in the future based upon market conditions or other events and could result in a goodwill impairment. The Company continues to evaluate each quarter those indicators that may require an interim goodwill impairment test. 

Intangible Assets

The following table presents the Company’s acquired intangible assets at April 2, 2016, and June 27, 2015, respectively. These intangible assets have a weighted average remaining useful life of approximately 4 years.

	April 2, 2016						June 27, 2015
	Acquired		Accumulated		Net Book		Acquired		Accumulated		Net Book
	Amount		Amortization		Value		Amount		Amortization		Value
	(Thousands)
Customer related	$	278,448	$	(202,575)	$	75,873	$	276,921	$	(190,593)	$	86,328
Trade name		4,973		(2,649)		2,324		6,240		(3,792)		2,448
Other		12,699		(3,907)		8,792		12,309		(1,354)		10,955
	$	296,120	$	(209,131)	$	86,989	$	295,470	$	(195,739)	$	99,731

Intangible asset amortization expense was $6.9 million and $10.6 million for the third quarters of fiscal 2016 and 2015, respectively, and $21.2 million and $32.6 million for the first nine months of fiscal 2016 and 2015, respectively. The following table presents the estimated future amortization expense for the remainder of fiscal 2016, the next five fiscal years and thereafter (in thousands):

Fiscal Year
Remainder of fiscal 2016		7,457
2017		25,091
2018		17,010
2019		13,525
2020		11,710
2021		7,261
Thereafter		4,935
Total	$	86,989

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Debt

9 Months Ended

Apr. 02, 2016

Debt

Debt

4. Debt

Short-term debt consists of the following (in thousands):

	April 2, 2016		June 27, 2015		April 2, 2016		June 27, 2015
	Interest Rate				Carrying Balance
Bank credit facilities and other	4.74	%	5.54	%	$	156,742	$	81,115
Accounts receivable securitization program	0.90	%	—			250,000		—
Notes due September 2015	—		6.00	%		—		250,000
Notes due September 2016	6.63	%	—			300,000		—
Short-term debt					$	706,742	$	331,115

Bank credit facilities and other consists primarily of various committed and uncommitted lines of credit and other forms of bank debt with financial institutions utilized primarily to support the working capital requirements of the Company including its foreign operations.

In August 2014, the Company amended and extended its accounts receivable securitization program (the “Program”) with a group of financial institutions to allow the Company to transfer, on an ongoing revolving basis, an undivided interest in a designated pool of trade accounts receivable, to provide security or collateral for borrowings up to a maximum of $900.0 million. The Program does not qualify for off balance sheet accounting treatment and any borrowings under the Program are recorded as debt in the consolidated balance sheets. Under the Program, the Company legally sells and isolates certain U.S. trade accounts receivable into a wholly owned and consolidated bankruptcy remote special purpose entity. Such receivables, which are recorded within “Receivables” in the consolidated balance sheets, totaled $1.44 billion and $1.41 billion at April 2, 2016, and June 27, 2015, respectively. The Program contains certain covenants relating to the quality of the receivables sold. The Program also requires the Company to maintain certain minimum interest coverage and leverage ratios, which the Company was in compliance with as of April 2, 2016, and June 27, 2015. The Program has a two-year term that expires in August 2016 and as a result is considered short-term debt as of April 2, 2016. Interest on borrowings is calculated using a base rate or a commercial paper rate plus a spread of 0.38%. The facility fee is 0.38%.

In September 2015, the Company redeemed the $250.0 million of outstanding 6.00% Notes due September 2015, upon their maturity.

Long-term debt consists of the following (in thousands):

	April 2, 2016		June 27, 2015		April 2, 2016		June 27, 2015
	Interest Rate				Carrying Balance
Revolving credit facilities:
Accounts receivable securitization program	—		0.59	%	$	—	$	650,000
Credit Facility	1.86	%	1.45	%		422,236		50,000
Notes due:
September 2016	—		6.63	%		—		300,000
June 2020	5.88	%	5.88	%		300,000		300,000
December 2022	4.88	%	4.88	%		350,000		350,000
April 2026	4.63	%	—	%		550,000		—
Other long-term debt	2.51	%	2.06	%		1,201		1,828
Long-term debt before discount and debt issuance costs						1,623,437		1,651,828
Discount and debt issuance costs						(12,898)		(5,327)
Long-term debt					$	1,610,539	$	1,646,501

In March 2016, the Company issued $550.0 million of 4.625% Notes due April 2026 (“4.625% Notes”). The Company received proceeds of $546.0 million from the offering, net of discounts and incurred $4.5 million in underwriting fees and other debt issuance costs. The 4.625% Notes rank equally in right of payment with all existing and future senior unsecured debt of Avnet and interest will be payable semi-annually each year on April 15 and October 15.

The Company has a five-year $1.25 billion senior unsecured revolving credit facility (the “Credit Facility”) with a syndicate of banks, consisting of revolving credit facilities and the issuance of up to $150.0 million of letters of credit, which expires in July 2019. Subject to certain conditions, the Credit Facility may be increased up to $1.5 billion. Under the Credit Facility, the Company may select from various interest rate options, currencies and maturities. The Credit Facility contains certain covenants including various limitations on debt incurrence, share repurchases, dividends, investments and capital expenditures. The Credit Facility also includes financial covenants requiring the Company to maintain minimum interest coverage and leverage ratios, which the Company was in compliance with as of April 2, 2016 and June 27, 2015. As of April 2, 2016, and June 27, 2015, there were $4.9 million and $1.9 million, respectively, in letters of credit issued under the Credit Facility.

As of April 2, 2016, the carrying value and fair value of the Company’s total debt was $2.32 billion and $2.38 billion, respectively. At June 27, 2015, the carrying value and fair value of the Company's total debt was $1.98 billion and $2.04 billion, respectively. Fair value was estimated primarily based upon quoted market prices.

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Derivative financial instruments

9 Months Ended

Apr. 02, 2016

Derivative financial instruments

Derivative financial instruments

5. Derivative financial instruments

Many of the Company’s subsidiaries purchase and sell products in currencies other than their functional currencies. This subjects the Company to the risks associated with fluctuations in foreign currency exchange rates. The Company reduces this risk by utilizing natural hedging (i.e., offsetting receivables and payables in the same foreign currency) as well as by creating offsetting positions through the use of derivative financial instruments, primarily forward foreign currency exchange contracts typically with maturities of less than sixty days (“economic hedges”). The Company continues to have exposure to foreign currency risks to the extent they are not hedged. The Company adjusts any economic hedges to fair value through the consolidated statements of operations primarily within “other income (expense), net.” Therefore, the changes in valuation of the underlying items being economically hedged are offset by the changes in fair value of the forward foreign currency exchange contracts. The fair value of forward foreign currency exchange contracts, which are based upon Level 2 criteria under the ASC 820 fair value hierarchy, are classified in the captions “other current assets” or “accrued expenses and other,” as applicable, in the accompanying consolidated balance sheets as of April 2, 2016, and June 27, 2015, and were not material. The Company’s master netting and other similar arrangements with various financial institutions related to derivative financial instruments allow for the right of offset. Avnet’s policy is to present derivative financial instruments with the same counterparty as either a net asset or liability when the right of offset exists. The Company did not have material net gains or losses related to forward foreign currency exchange contracts in the third quarters and first nine months of fiscal 2016 and 2015, which are recorded as a component of “other income (expense), net” in the consolidated statements of operations.

The Company generally does not hedge its investments in its foreign operations. The Company does not enter into derivative financial instruments for trading or speculative purposes and monitors the financial stability and credit standing of its counterparties.

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Commitments and contingencies

9 Months Ended

Apr. 02, 2016

Commitments and contingencies

Commitments and contingencies

6. Commitments and contingencies

From time to time, the Company may become a party to, or be otherwise involved in various lawsuits, claims, investigations and other legal proceedings arising in the ordinary course of conducting its business. While litigation is subject to inherent uncertainties, management does not anticipate that any such matters will have a material adverse effect on the Company’s financial condition, liquidity or results of operations.

The Company also is currently subject to various pending and potential legal matters and investigations relating to compliance with governmental laws and regulations, including import/export, environmental, anticorruption and competition. For certain of these matters it is not possible to determine the ultimate outcome, and the Company cannot reasonably estimate the maximum potential exposure or the range of possible loss for such matters due primarily to being in the preliminary stages of the related proceedings and investigations. The Company currently believes that the resolution of such matters will not have a material adverse effect on the Company’s financial position or liquidity, but could possibly be material to its results of operations in any one reporting period.

As of April 2, 2016, and June 27, 2015, the Company has aggregate estimated liabilities of $21.3 million and $17.2 million, respectively, classified within accrued expenses and other for such compliance-related matters that were reasonably estimable as of such dates. Of these amounts,  $10.0 million relates to a contingent liability for potential unpaid import duties associated with the acquisition of Bell Microproducts Inc. for estimated duties, interest and penalties that may be imposed from an ongoing compliance audit by Customs and Border Protection.

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Income taxes

9 Months Ended

Apr. 02, 2016

Income taxes

Income taxes

7. Income taxes

The Company’s effective tax rate on its income before income taxes was 23.1% in the third quarter of fiscal 2016 as compared with 28.9% in the third quarter of fiscal 2015. During the third quarter of fiscal 2016, the Company’s effective tax rate was favorably impacted primarily by (i) the mix of income in lower tax jurisdictions and (ii) the release of reserves related to the expiration of statutes of limitation. During the third quarter of fiscal 2015, the Company’s effective tax rate was favorably impacted primarily by (i) the mix of income in lower tax jurisdictions partially offset by (ii) an increase due to the write-off of a deferred tax asset.

For the first nine months of fiscal 2016 and 2015, the Company’s effective tax rate was 23.5% and 26.1%, respectively. The effective tax rate for the first nine months of fiscal 2016 was favorably impacted primarily by (i) the mix of income in lower tax jurisdictions, (ii) the release of valuation allowances against deferred tax assets that were determined to be realizable and (iii) the release of reserves related to audit settlements and the expiration of statutes of limitation. The effective tax rate for the first nine months of fiscal 2015 was favorably impacted by (i) the mix of income in lower tax jurisdictions and (ii) the release of reserves, primarily related to the formal deregistration of a foreign branch and the settlement of an audit in a foreign jurisdiction.

The Company applies the guidance in ASC 740, which requires management to use its judgment for the appropriate weighting of all available evidence when assessing the need for the establishment or the release of valuation allowances. As part of this analysis, the Company examines all available evidence on a jurisdiction by jurisdiction basis and weighs the positive and negative evidence when determining the need for full or partial valuation allowances. The evidence considered for each jurisdiction includes, among other items: (i) the historic levels of income or losses over a range of time periods, which may extend beyond the most recent three fiscal years depending upon the historical volatility of income in an individual jurisdiction; (ii) expectations and risks associated with underlying estimates of future taxable income, including considering the historical trend of down-cycles in the semiconductor and related industries; (iii) jurisdictional specific limitations on the utilization of deferred tax assets including when such assets expire; and (iv) prudent and feasible tax planning strategies.

The Company continues to evaluate the need for the valuation allowances against its deferred tax assets and will adjust valuation allowances as appropriate, which, if adjusted, could result in a significant decrease or increase to the effective tax rate in the period of the adjustment.

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Pension and retirement plan

9 Months Ended

Apr. 02, 2016

Pension and retirement plan

Pension and retirement plans

8. Pension plan

The Company has a noncontributory defined benefit pension plan (the “Plan”) for which the components of net periodic pension costs were as follows:

	Third Quarters Ended				Nine Months Ended
	April 2,		March 28,		April 2,		March 28,
	2016		2015		2016		2015
	(Thousands)
Service cost	$	9,935	$	9,873	$	30,356	$	29,619
Interest cost		5,328		4,449		15,984		13,347
Expected return on plan assets		(10,071)		(9,055)		(30,213)		(27,165)
Recognized net actuarial loss		3,183		3,251		9,549		9,753
Amortization of prior service credits		(393)		(393)		(1,179)		(1,179)
Net periodic pension cost	$	7,982	$	8,125	$	24,497	$	24,375

The Company made contributions to the Plan of $30.0 million during the first nine months of fiscal 2016. The Company expects to make an additional contribution to the Plan of $10.0 million in the fourth quarter of fiscal 2016.

The Plan meets the definition of a defined benefit plan and as a result, the Company must apply ASC 715 pension accounting to the Plan. The Plan itself, however, is a cash balance plan that is similar in nature to a defined contribution plan in that a participant's benefit is defined in terms of a stated account balance. A cash balance plan provides the Company with the benefit of applying any earnings on the Plan’s investments beyond the fixed return provided to participants, toward the Company’s future cash funding obligations.

Amounts reclassified out of accumulated other comprehensive income (loss), net of tax, to operating expenses during the third quarters and first nine months of fiscal 2016 and fiscal 2015 were not material and substantially all related to net periodic pension costs including recognition of actuarial losses and amortization of prior service credits.

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Shareholders' equity

9 Months Ended

Apr. 02, 2016

Shareholders' equity

Shareholders' equity

9. Shareholders' equity

Share repurchase program

In August 2015, the Company’s Board of Directors amended the Company’s existing share repurchase program to authorize the repurchase of up to $1.25 billion of common stock in the open market or through privately negotiated transactions. The timing and actual number of shares purchased will depend on a variety of factors such as share price, corporate and regulatory requirements, and prevailing market conditions. During the third quarter of fiscal 2016, the Company repurchased 3.7 million shares under this program at an average market price of $39.73 per share for a total cost of $145.7 million. During the first nine months of fiscal 2016, the Company repurchased 8.1 million shares under this program at an average price of $40.88 per share for a total cost of $330.8million. Since the beginning of the repurchase program through the end of the third quarter of fiscal 2016, the Company has repurchased 30.2 million shares at an aggregate cost of $1.03 billion, and $221.7 million remains available for future repurchases.

Common stock dividend

In February 2016, the Company’s Board of Directors approved a dividend of $0.17 per common share and dividend payments of $21.9 million were made in March 2016.

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Earnings per share

9 Months Ended

Apr. 02, 2016

Earnings per share

Earnings per share

10. Earnings per share

	Third Quarters Ended				Nine Months Ended
	April 2,		March 28,		April 2,		March 28,
	2016		2015		2016		2015
	(Thousands, except per share data)
Numerator:
Net income	$	123,459	$	121,529	$	409,725	$	413,180
Denominator:
Weighted average common shares for basic earnings per share		129,811		136,046		131,834		136,965
Net effect of dilutive stock options, restricted stock units and performance share units		1,839		1,675		2,464		2,216
Weighted average common shares for diluted earnings per share		131,650		137,721		134,298		139,181
Basic earnings per share	$	0.95	$	0.89	$	3.11	$	3.02
Diluted earnings per share	$	0.94	$	0.88	$	3.05	$	2.97
Stock options excluded from earnings per share calculation due to anti-dilutive effect		422		—		378		—

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Additional cash flow information

9 Months Ended

Apr. 02, 2016

Additional cash flow information

Additional cash flow information

11. Additional cash flow information

Interest and income taxes paid in the nine months ended April 2, 2016, and March 28, 2015 were as follows:

	Nine Months Ended
	April 2,		March 28,
	2016		2015
	(Thousands)
Interest	$	80,313	$	80,478
Income taxes	$	85,323	$	122,056

The Company includes book overdrafts as part of accounts payable on its consolidated balance sheets and reflects changes in such balances as part of cash flows from operating activities in its consolidated statements of cash flows.

Non-cash investing activities related to purchases of property, plant and equipment that have been accrued, but not paid for, were $15.2 million and $40.0 million as of April 2, 2016, and March 28, 2015, respectively.

Included in cash and cash equivalents as of April 2, 2016, was $44.8 million of cash equivalents, which was primarily comprised of overnight time deposits whose fair value was determined using Level 1 measurements under the ASC 820 fair value hierarchy.

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Segment information

9 Months Ended

Apr. 02, 2016

Segment information

Segment information

12. Segment information

Electronics Marketing (“EM”) and Technology Solutions (“TS”) are the Company's reportable segments (“operating groups”). EM markets and sells semiconductors and interconnect, passive and electromechanical devices and embedded products to a diverse customer base serving many end-markets. TS focuses on the value-added distribution of enterprise computing servers and systems, software, storage, services and complex solutions from the world’s foremost technology manufacturers and software developers. TS also provides the latest hard disk drives, microprocessor, motherboard and DRAM module technologies to manufacturers of general-purpose computers and system builders.

	Third Quarters Ended				Nine Months Ended
	April 2,		March 28,		April 2,		March 28,
	2016		2015		2016		2015
	(Thousands)
Sales:
Electronics Marketing	$	4,041,527	$	4,219,528	$	12,627,543	$	13,028,812
Technology Solutions		2,133,189		2,517,332		7,364,924		8,099,514
	$	6,174,716	$	6,736,860	$	19,992,467	$	21,128,326
Operating income (expense):
Electronics Marketing	$	183,271	$	197,287	$	570,286	$	591,447
Technology Solutions		55,498		68,098		247,136		248,072
Corporate		(33,546)		(34,992)		(116,530)		(110,805)
		205,223		230,393		700,892		728,714
Restructuring, integration and other expenses (Note 13)		(16,172)		(15,494)		(63,352)		(47,071)
Amortization of acquired intangible assets and other		(7,433)		(11,187)		(22,845)		(34,447)
	$	181,618	$	203,712	$	614,695	$	647,196
Sales, by geographic area:
Americas (1)	$	2,433,904	$	2,677,745	$	7,958,408	$	8,376,754
EMEA (2)		1,946,575		1,969,069		5,897,243		6,006,500
Asia/Pacific (3)		1,794,237		2,090,046		6,136,816		6,745,072
	$	6,174,716	$	6,736,860	$	19,992,467	$	21,128,326

(1)Includes sales from the United States of $2.20billion and $2.39 billion for the quarters ended April 2, 2016, and March 28, 2015, respectively. Includes sales from the United States of $7.20 billion and $7.45 billion for the first nine months of fiscal 2016 and 2015, respectively.

(2)Includes sales from Germany and the United Kingdom of $749.4 million and $294.2 million, respectively, for the quarter ended April 2, 2016, and $2.31 billion and $975.3 million, respectively, for the first nine months of fiscal 2016. Includes sales from Germany and the United Kingdom of $688.7 million and $372.3 million, respectively, for the quarter ended March 28, 2015, and $2.22 billion and $1.12 billion, respectively, for the first nine months of fiscal 2015.

(3)Includes sales from China (including Hong Kong) and Taiwan of $627.1 million and $586.6 million, respectively, for the quarter ended April 2, 2016, and $2.05 billion and $2.27 billion, respectively, for the first nine months of fiscal 2016. Includes sales from China (including Hong Kong) and Taiwan of $667.5 million and $802.2 million, respectively, for the quarter ended March 28, 2015, and $2.13 billion and $2.62 billion, respectively, for the first nine months of fiscal 2015.

	April 2,		June 27,
	2016		2015
	(Thousands)
Assets:
Electronics Marketing	$	6,669,914	$	6,497,714
Technology Solutions		3,742,670		3,608,953
Corporate		712,876		693,286
	$	11,125,460	$	10,799,953
Property, plant, and equipment, net, by geographic area:
Americas (1)	$	400,969	$	358,063
EMEA (2)		179,850		182,311
Asia/Pacific		29,928		28,405
	$	610,747	$	568,779

(1)Includes property, plant and equipment, net, of $391.1 million and $352.2 million as of April 2, 2016, and June 27, 2015, respectively, in the United States.

(2)Includes property, plant and equipment, net, of $75.4 million and $73.1 million in Germany and Belgium, respectively, as of April 2, 2016, and $74.2 million and $74.7 million in Germany and Belgium, respectively, as of June 27, 2015.

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Restructuring, integration and other expenses

9 Months Ended

Apr. 02, 2016

Restructuring, integration and other expenses

Restructuring, integration and other expenses

13. Restructuring, integration and other expenses

Fiscal 2016

During the third quarter and first nine months of fiscal 2016, the Company took certain actions in an effort to reduce future operating expenses, including the continuation of the restructuring activities started in the fourth quarter of fiscal 2015. These actions include activities related to the Avnet Advantage initiative, which is focused on creating long-term operational efficiencies. In addition, the Company incurred integration and other costs as discussed further below.  The following table presents the restructuring, integration and other expenses recorded during the third quarter and first nine months of fiscal 2016:

	Quarter Ended		Nine Months Ended
	April 2, 2016		April 2, 2016
	(Thousands, except per share data)
Restructuring expenses	$	7,874	$	39,350
Integration costs		4,331		8,824
Other costs		4,614		16,749
Changes in estimates for prior year restructuring liabilities		(647)		(1,571)
Restructuring, integration and other expenses before tax	$	16,172	$	63,352
Restructuring, integration and other expenses after tax	$	10,804	$	42,029
Restructuring, integration and other expenses per share on a diluted basis	$	0.08	$	0.31

The activity related to the restructuring liabilities established and other associated expenses incurred during fiscal 2016 is presented in the following table:

			Facility			Asset
	Severance		Exit Costs		Impairments		Other		Total
	(Thousands)
Fiscal 2016 restructuring expenses	$	32,670	$	4,863	$	1,014	$	803	$	39,350
Cash payments		(23,735)		(2,058)		—		(267)		(26,060)
Non-cash amounts		—		479		(1,014)		(378)		(913)
Other, principally foreign currency translation		150		(57)		—		62		155
Balance at April 2, 2016	$	9,085	$	3,227	$	—	$	220	$	12,532

Severance expense recorded in the first nine months of fiscal 2016 related to the reduction of approximately 560 employees, primarily in operations, sales and business support functions, in connection with cost reduction actions taken in both operating groups including the impact of a voluntary retirement program in the United States. Facility exit costs primarily consist of liabilities for remaining lease obligations for exited facilities. Asset impairments relate to the impairment of property, plant and equipment as a result of the underlying restructuring actions taken in fiscal 2016. Other restructuring costs related primarily to other miscellaneous restructuring and exit costs. Of the $39.4 million in restructuring expenses recorded during the first nine months of fiscal 2016, $22.0 million related to EM and $17.4 million related to TS. The Company expects the majority of the remaining severance and facility exit costs to be paid by the end of fiscal 2016.

Integration costs are primarily related to the integration of acquired businesses, the integration of certain regional and global businesses, the integration of significant information technology systems and incremental costs incurred as part of the consolidation, relocation and closure of warehouse and office facilities. Integration costs include certain consulting costs for significant new information technology systems and business operation integration assistance, facility moving costs, legal fees, travel, meeting, training, marketing and communication costs that are specifically and incrementally incurred as a result of such integration activities. Also included in integration costs are incremental salary costs specific to integration, consolidation and closure activities. Other costs consists primarily of professional fees incurred for acquisitions, costs incurred for businesses divested or closed in current or prior periods, any ongoing facilities operating costs associated with the consolidation, relocation and closure of facilities once such facilities have been vacated or substantially vacated, and other miscellaneous costs that relate to restructuring, integration and other expenses. Included in other costs during the first nine months of fiscal 2016 was $4.3 million of expense associated with Avnet’s estimated environmental remediation obligations related to certain legacy manufacturing operations that were divested several decades ago and $5.2 million of legal expenses related to lawsuits associated with operations of an acquired business prior to Avnet’s acquisition. The remaining integration and other costs in the first nine months of fiscal 2016 were comprised of many different costs, none of which were individually material.

Fiscal 2015

During fiscal 2015, the Company incurred restructuring expenses related to various restructuring actions intended to achieve planned synergies from acquired businesses and to reduce future operating expenses. The following table presents the activity during the first nine months of fiscal 2016 related to the remaining restructuring liabilities established during fiscal 2015:

			Facility
	Severance		Exit Costs		Other		Total
	(Thousands)
Balance at June 27, 2015	$	11,256	$	3,210	$	—	$	14,466
Cash payments		(9,526)		(958)		—		(10,484)
Changes in estimates, net		(1,772)		(254)		—		(2,026)
Non-cash amounts		—		—		—		—
Other, principally foreign currency translation		2,821		(63)		—		2,758
Balance at April 2, 2016	$	2,779	$	1,935	$	—	$	4,714

As of April 2, 2016, the Company expects the majority of the remaining severance and facility exit cost liabilities to be paid by the end of fiscal 2016.

Fiscal 2014 and prior

As of June 27, 2015, there were $11.8 million of restructuring liabilities remaining related to restructuring actions taken in fiscal years 2014 and prior, the majority of which relates to facility exit costs. The remaining balance for such historical restructuring actions as of April 2, 2016, was $4.8 million, which is expected to be paid by the end of fiscal 2016.

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Basis of presentation and new accounting pronouncements (Policies)

9 Months Ended

Apr. 02, 2016

Basis of presentation and new accounting pronouncements

Basis of presentation

In the opinion of management, the accompanying unaudited interim consolidated financial statements contain all adjustments necessary to present fairly Avnet, Inc.'s and its consolidated subsidiaries' (the “Company” or “Avnet”) financial position, results of operations, comprehensive income (loss) and cash flows. All such adjustments are of a normal recurring nature.

The preparation of financial statements in accordance with generally accepted accounting principles ("GAAP") requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements. Actual results may differ from these estimates.

Interim results of operations are not necessarily indicative of the results to be expected for the full fiscal year. The information included in this Form 10-Q should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 27, 2015.

Fiscal year

Fiscal year

The Company operates on a “52/53 week” fiscal year and fiscal 2016 contains 53 weeks compared to 52 weeks in fiscal 2015. As a result, the first nine months of fiscal 2016 contained 40 weeks compared to the first nine months of fiscal 2015, which contained 39 weeks.

New accounting pronouncements

New accounting pronouncements

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2016-02, Leases (Topic 842) (“ASU 2016-02”). The update requires a lessee to recognize assets and liabilities on the consolidated balance sheets for leases with lease terms greater than 12 months. ASU 2016-02 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted. Accordingly, the update will be effective for the Company beginning in the first quarter of fiscal 2020, using a modified retrospective approach. The Company is currently evaluating the impact of the adoption of ASU 2016-02 on its consolidated financial statements. 

In November 2015, the FASB issued Accounting Standards Update No. 2015-17, Income Taxes (Topic 740):  Balance Sheet Classification of Deferred Taxes (“ASU 2015-17”), to simplify the presentation of deferred income taxes by requiring deferred tax liabilities and assets be classified as noncurrent in a classified balance sheet. The planned early adoption of this update at the end of fiscal 2016 is not expected to have a material impact on the Company’s financial statements.

In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), to supersede nearly all existing revenue recognition guidance under GAAP. The core principles of ASU 2014-09 are to recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. Application of the requirements of ASU 2014-09 may require more judgment and estimates within the revenue recognition process compared to existing GAAP. In July 2015, the FASB approved a one-year delay in the effective date of ASU 2014-09, which makes the effective date for the Company the first quarter of fiscal 2019. The Company may adopt the requirements of ASU 2014-09 using either of two acceptable adoption methods: (i) retrospective adoption to each prior reporting period presented with the option to elect certain practical expedients as defined within ASU 2014-09; or (ii) adoption with the cumulative effect of initially applying ASU 2014-09 recognized at the date of initial application and providing certain additional disclosures as defined within ASU 2014-09. The Company is currently evaluating the impact of the future adoption of ASU 2014-09 on its consolidated financial statements, including the method of adoption to be used.

Recently adopted accounting pronouncements

In September 2015, the FASB issued Accounting Standards Update 2015-16, Business Combinations (Topic 805):Simplifying the Accounting for Measurement-Period Adjustments. The update requires that an acquiror recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined, including the cumulative effect of the change in provisional amount as if the accounting had been completed at the acquisition date. The Company early adopted this update in the first quarter of fiscal 2016, with no impact to its consolidated financial statements. 

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Goodwill and intangible assets (Tables)

9 Months Ended

Apr. 02, 2016

Goodwill and intangible assets

Change in goodwill balances by reportable segment

	Electronics		Technology
	Marketing		Solutions		Total
	(Thousands)
Gross goodwill	$	1,684,216	$	974,274	$	2,658,490
Accumulated impairment		(1,045,110)		(334,624)		(1,379,734)
Carrying value at June 27, 2015		639,106		639,650		1,278,756
Additions		—		24,591		24,591
Adjustments		—		—		—
Foreign currency translation		(9,395)		1,454		(7,941)
Carrying value at April 2, 2016	$	629,711	$	665,695	$	1,295,406
Gross goodwill	$	1,674,821	$	1,000,319	$	2,675,140
Accumulated impairment		(1,045,110)		(334,624)		(1,379,734)
Carrying value at April 2, 2016	$	629,711	$	665,695	$	1,295,406

Company's identifiable acquired intangible assets

	April 2, 2016						June 27, 2015
	Acquired		Accumulated		Net Book		Acquired		Accumulated		Net Book
	Amount		Amortization		Value		Amount		Amortization		Value
	(Thousands)
Customer related	$	278,448	$	(202,575)	$	75,873	$	276,921	$	(190,593)	$	86,328
Trade name		4,973		(2,649)		2,324		6,240		(3,792)		2,448
Other		12,699		(3,907)		8,792		12,309		(1,354)		10,955
	$	296,120	$	(209,131)	$	86,989	$	295,470	$	(195,739)	$	99,731

Estimated future amortization expense

The following table presents the estimated future amortization expense for the remainder of fiscal 2016, the next five fiscal years and thereafter (in thousands):

Fiscal Year
Remainder of fiscal 2016		7,457
2017		25,091
2018		17,010
2019		13,525
2020		11,710
2021		7,261
Thereafter		4,935
Total	$	86,989

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Debt (Tables)

9 Months Ended

Apr. 02, 2016

Debt

Short-term debt

Short-term debt consists of the following (in thousands):

	April 2, 2016		June 27, 2015		April 2, 2016		June 27, 2015
	Interest Rate				Carrying Balance
Bank credit facilities and other	4.74	%	5.54	%	$	156,742	$	81,115
Accounts receivable securitization program	0.90	%	—			250,000		—
Notes due September 2015	—		6.00	%		—		250,000
Notes due September 2016	6.63	%	—			300,000		—
Short-term debt					$	706,742	$	331,115

Long-term debt

Long-term debt consists of the following (in thousands):

	April 2, 2016		June 27, 2015		April 2, 2016		June 27, 2015
	Interest Rate				Carrying Balance
Revolving credit facilities:
Accounts receivable securitization program	—		0.59	%	$	—	$	650,000
Credit Facility	1.86	%	1.45	%		422,236		50,000
Notes due:
September 2016	—		6.63	%		—		300,000
June 2020	5.88	%	5.88	%		300,000		300,000
December 2022	4.88	%	4.88	%		350,000		350,000
April 2026	4.63	%	—	%		550,000		—
Other long-term debt	2.51	%	2.06	%		1,201		1,828
Long-term debt before discount and debt issuance costs						1,623,437		1,651,828
Discount and debt issuance costs						(12,898)		(5,327)
Long-term debt					$	1,610,539	$	1,646,501

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Pension and retirement plans (Tables)

9 Months Ended

Apr. 02, 2016

Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract]

Components of net periodic pension costs

	Third Quarters Ended				Nine Months Ended
	April 2,		March 28,		April 2,		March 28,
	2016		2015		2016		2015
	(Thousands)
Service cost	$	9,935	$	9,873	$	30,356	$	29,619
Interest cost		5,328		4,449		15,984		13,347
Expected return on plan assets		(10,071)		(9,055)		(30,213)		(27,165)
Recognized net actuarial loss		3,183		3,251		9,549		9,753
Amortization of prior service credits		(393)		(393)		(1,179)		(1,179)
Net periodic pension cost	$	7,982	$	8,125	$	24,497	$	24,375

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Earnings per share (Tables)

9 Months Ended

Apr. 02, 2016

Earnings per share

Basic and diluted earnings per share calculation

	Third Quarters Ended				Nine Months Ended
	April 2,		March 28,		April 2,		March 28,
	2016		2015		2016		2015
	(Thousands, except per share data)
Numerator:
Net income	$	123,459	$	121,529	$	409,725	$	413,180
Denominator:
Weighted average common shares for basic earnings per share		129,811		136,046		131,834		136,965
Net effect of dilutive stock options, restricted stock units and performance share units		1,839		1,675		2,464		2,216
Weighted average common shares for diluted earnings per share		131,650		137,721		134,298		139,181
Basic earnings per share	$	0.95	$	0.89	$	3.11	$	3.02
Diluted earnings per share	$	0.94	$	0.88	$	3.05	$	2.97
Stock options excluded from earnings per share calculation due to anti-dilutive effect		422		—		378		—

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Additional cash flow information (Tables)

9 Months Ended

Apr. 02, 2016

Additional cash flow information

Interest and income taxes paid

	Nine Months Ended
	April 2,		March 28,
	2016		2015
	(Thousands)
Interest	$	80,313	$	80,478
Income taxes	$	85,323	$	122,056

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Segment information (Tables)

9 Months Ended

Apr. 02, 2016

Segment information

Table of the Company's segments and the related financial information for each

	Third Quarters Ended				Nine Months Ended
	April 2,		March 28,		April 2,		March 28,
	2016		2015		2016		2015
	(Thousands)
Sales:
Electronics Marketing	$	4,041,527	$	4,219,528	$	12,627,543	$	13,028,812
Technology Solutions		2,133,189		2,517,332		7,364,924		8,099,514
	$	6,174,716	$	6,736,860	$	19,992,467	$	21,128,326
Operating income (expense):
Electronics Marketing	$	183,271	$	197,287	$	570,286	$	591,447
Technology Solutions		55,498		68,098		247,136		248,072
Corporate		(33,546)		(34,992)		(116,530)		(110,805)
		205,223		230,393		700,892		728,714
Restructuring, integration and other expenses (Note 13)		(16,172)		(15,494)		(63,352)		(47,071)
Amortization of acquired intangible assets and other		(7,433)		(11,187)		(22,845)		(34,447)
	$	181,618	$	203,712	$	614,695	$	647,196
Sales, by geographic area:
Americas (1)	$	2,433,904	$	2,677,745	$	7,958,408	$	8,376,754
EMEA (2)		1,946,575		1,969,069		5,897,243		6,006,500
Asia/Pacific (3)		1,794,237		2,090,046		6,136,816		6,745,072
	$	6,174,716	$	6,736,860	$	19,992,467	$	21,128,326

(1)Includes sales from the United States of $2.20billion and $2.39 billion for the quarters ended April 2, 2016, and March 28, 2015, respectively. Includes sales from the United States of $7.20 billion and $7.45 billion for the first nine months of fiscal 2016 and 2015, respectively.

(2)Includes sales from Germany and the United Kingdom of $749.4 million and $294.2 million, respectively, for the quarter ended April 2, 2016, and $2.31 billion and $975.3 million, respectively, for the first nine months of fiscal 2016. Includes sales from Germany and the United Kingdom of $688.7 million and $372.3 million, respectively, for the quarter ended March 28, 2015, and $2.22 billion and $1.12 billion, respectively, for the first nine months of fiscal 2015.

(3)Includes sales from China (including Hong Kong) and Taiwan of $627.1 million and $586.6 million, respectively, for the quarter ended April 2, 2016, and $2.05 billion and $2.27 billion, respectively, for the first nine months of fiscal 2016. Includes sales from China (including Hong Kong) and Taiwan of $667.5 million and $802.2 million, respectively, for the quarter ended March 28, 2015, and $2.13 billion and $2.62 billion, respectively, for the first nine months of fiscal 2015.

Table of Assets by reportable segment and long-lived assets by geographic area

	April 2,		June 27,
	2016		2015
	(Thousands)
Assets:
Electronics Marketing	$	6,669,914	$	6,497,714
Technology Solutions		3,742,670		3,608,953
Corporate		712,876		693,286
	$	11,125,460	$	10,799,953
Property, plant, and equipment, net, by geographic area:
Americas (1)	$	400,969	$	358,063
EMEA (2)		179,850		182,311
Asia/Pacific		29,928		28,405
	$	610,747	$	568,779

(1)Includes property, plant and equipment, net, of $391.1 million and $352.2 million as of April 2, 2016, and June 27, 2015, respectively, in the United States.

(2)Includes property, plant and equipment, net, of $75.4 million and $73.1 million in Germany and Belgium, respectively, as of April 2, 2016, and $74.2 million and $74.7 million in Germany and Belgium, respectively, as of June 27, 2015.

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Restructuring, integration and other expenses (Tables)

9 Months Ended

Apr. 02, 2016

Restructuring Cost and Reserve [Line Items]

Table presenting the restructuring, integration and other expenses incurred

	Quarter Ended		Nine Months Ended
	April 2, 2016		April 2, 2016
	(Thousands, except per share data)
Restructuring expenses	$	7,874	$	39,350
Integration costs		4,331		8,824
Other costs		4,614		16,749
Changes in estimates for prior year restructuring liabilities		(647)		(1,571)
Restructuring, integration and other expenses before tax	$	16,172	$	63,352
Restructuring, integration and other expenses after tax	$	10,804	$	42,029
Restructuring, integration and other expenses per share on a diluted basis	$	0.08	$	0.31

Fiscal Year 2016 Restructuring Liabilities

Restructuring Cost and Reserve [Line Items]

Activity related to the restructuring reserves

			Facility			Asset
	Severance		Exit Costs		Impairments		Other		Total
	(Thousands)
Fiscal 2016 restructuring expenses	$	32,670	$	4,863	$	1,014	$	803	$	39,350
Cash payments		(23,735)		(2,058)		—		(267)		(26,060)
Non-cash amounts		—		479		(1,014)		(378)		(913)
Other, principally foreign currency translation		150		(57)		—		62		155
Balance at April 2, 2016	$	9,085	$	3,227	$	—	$	220	$	12,532

Fiscal Year 2015 restructuring liabilites

Restructuring Cost and Reserve [Line Items]

Activity related to the restructuring reserves

			Facility
	Severance		Exit Costs		Other		Total
	(Thousands)
Balance at June 27, 2015	$	11,256	$	3,210	$	—	$	14,466
Cash payments		(9,526)		(958)		—		(10,484)
Changes in estimates, net		(1,772)		(254)		—		(2,026)
Non-cash amounts		—		—		—		—
Other, principally foreign currency translation		2,821		(63)		—		2,758
Balance at April 2, 2016	$	2,779	$	1,935	$	—	$	4,714

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Acquisitions (Details) $ in Thousands	3 Months Ended	9 Months Ended
	Jan. 02, 2016 USD ($) item	Apr. 02, 2016 USD ($)
Acquisitions
Number of businesses acquired | item	2
Business acquisition, aggregate annualized revenue of acquired businesses	$ 120,000
Acquisitions of operations and investments, net of cash acquired		$ 19,675
Contingent consideration
Total consideration	$ 36,400

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Goodwill and intangible assets (Details) - USD ($) $ in Thousands	9 Months Ended
	Apr. 02, 2016	Jun. 27, 2015
Carrying amount of goodwill, by reportable segment
Carrying value	$ 1,278,756
Additions	24,591
Foreign currency translation	(7,941)
Carrying value	1,295,406
Gross Goodwill	2,675,140	$ 2,658,490
Accumulated Impairment	(1,379,734)	(1,379,734)
Electronics Marketing
Carrying amount of goodwill, by reportable segment
Carrying value	639,106
Foreign currency translation	(9,395)
Carrying value	629,711
Gross Goodwill	1,674,821	1,684,216
Accumulated Impairment	(1,045,110)	(1,045,110)
Technology Solutions
Carrying amount of goodwill, by reportable segment
Carrying value	639,650
Additions	24,591
Foreign currency translation	1,454
Carrying value	665,695
Gross Goodwill	1,000,319	974,274
Accumulated Impairment	$ (334,624)	$ (334,624)

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Goodwill and intangible assets Intangible Assets (Details) - USD ($) $ in Thousands	Apr. 02, 2016	Jun. 27, 2015
Finite-Lived Intangible Assets [Line Items]
Gross Acquired Amount	$ 296,120	$ 295,470
Accumulated Amortization	(209,131)	(195,739)
Net Book Value	86,989	99,731
Customer Related [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Acquired Amount	278,448	276,921
Accumulated Amortization	(202,575)	(190,593)
Net Book Value	75,873	86,328
Trade Names [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Acquired Amount	4,973	6,240
Accumulated Amortization	(2,649)	(3,792)
Net Book Value	2,324	2,448
Other [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Acquired Amount	12,699	12,309
Accumulated Amortization	(3,907)	(1,354)
Net Book Value	$ 8,792	$ 10,955

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Goodwill and intangible assets (Estimated Future Amortization Expense) (Details) - USD ($) $ in Thousands	Apr. 02, 2016	Jun. 27, 2015
Fiscal Year:
Remainder of fiscal 2016	$ 7,457
2017	25,091
2018	17,010
2019	13,525
2020	11,710
2021	7,261
Thereafter	4,935
Net Book Value	$ 86,989	$ 99,731

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Goodwill and intangible assets Textuals (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Apr. 02, 2016	Mar. 28, 2015	Apr. 02, 2016	Mar. 28, 2015
Goodwill and intangible assets
Weighted average life of intangible assets			4 years
Intangible asset amortization expense	$ 6,900	$ 10,600	$ 21,183	$ 32,630

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Debt - short-term debt (Details) - USD ($) $ in Thousands	Apr. 02, 2016	Jun. 27, 2015
Components of short-term debt
Debt, Current, Total	$ 706,742	$ 331,115
Bank credit facilities and other
Components of short-term debt
Short-term Debt, Weighted Average Interest Rate	4.74%	5.54%
Short-term borrowings	$ 156,742	$ 81,115
Accounts receivable securitization program
Components of short-term debt
Current portion of long-term debt, stated interest rate	0.90%
Current portion of long-term debt	$ 250,000
Notes Due September 2015
Components of short-term debt
Current portion of long-term debt, stated interest rate		6.00%
Short-term borrowings		$ 250,000
Notes Due September 2016
Components of short-term debt
Current portion of long-term debt, stated interest rate	6.63%
Current portion of long-term debt	$ 300,000

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Debt - long-term debt (Details) - USD ($) $ in Thousands	Apr. 02, 2016	Jun. 27, 2015
Debt Instrument [Line Items]
Long-term debt before discount and debt issuance costs	$ 1,623,437	$ 1,651,828
Discount and debt issuance costs	(12,898)	(5,327)
Long-term debt	$ 1,610,539	$ 1,646,501
Accounts receivable securitization program
Debt Instrument [Line Items]
Long-term debt, stated interest rate	0.90%
Notes Due September 2016
Debt Instrument [Line Items]
Long-term debt, stated interest rate	6.63%
Revolving credit facilities
Debt Instrument [Line Items]
Long-term Debt, Weighted Average Interest Rate	1.86%	1.45%
Long-term debt before discount and debt issuance costs	$ 422,236	$ 50,000
Revolving credit facilities | Accounts receivable securitization program
Debt Instrument [Line Items]
Long-term Debt, Weighted Average Interest Rate		0.59%
Long-term debt before discount and debt issuance costs		$ 650,000
Notes due | Notes Due September 2016
Debt Instrument [Line Items]
Long-term debt, stated interest rate		6.63%
Long-term debt before discount and debt issuance costs		$ 300,000
Notes due | Notes Due June 2020
Debt Instrument [Line Items]
Long-term debt, stated interest rate	5.88%	5.88%
Long-term debt before discount and debt issuance costs	$ 300,000	$ 300,000
Notes due | Notes Due December 2022
Debt Instrument [Line Items]
Long-term debt, stated interest rate	4.88%	4.88%
Long-term debt before discount and debt issuance costs	$ 350,000	$ 350,000
Notes due | Notes Due April 2026
Debt Instrument [Line Items]
Long-term debt, stated interest rate	4.625%
Long-term debt before discount and debt issuance costs	$ 550,000
Other long-term debt
Debt Instrument [Line Items]
Long-term Debt, Weighted Average Interest Rate	2.51%	2.06%
Long-term debt before discount and debt issuance costs	$ 1,201	$ 1,828

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Debt (Textuals) (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Apr. 02, 2016	Apr. 02, 2016	Jun. 27, 2015
Debt Instrument [Line Items]
Repayments of Unsecured Debt		$ 250,000
Company's total debt
Total carrying value	$ 2,320,000	2,320,000	$ 1,980,000
Total fair value	2,380,000	2,380,000	2,040,000
Revolving credit facilities
Debt Instrument [Line Items]
Maximum borrowing amount	1,250,000	$ 1,250,000
Term		5 years
Line of credit facility contingent increase to maximum borrowing capacity	1,500,000	$ 1,500,000
Letter of Credit
Debt Instrument [Line Items]
Maximum borrowing amount	150,000	150,000
Letters of credit outstanding, amount	$ 4,900	$ 4,900	1,900
Accounts receivable securitization program
Debt Instrument [Line Items]
Long-term debt, stated interest rate	0.90%	0.90%
Accounts receivable securitization program | Revolving credit facilities
Debt Instrument [Line Items]
Maximum borrowing amount	$ 900,000	$ 900,000
Receivables Owned by Special Purpose Entity	$ 1,440,000	$ 1,440,000	$ 1,410,000
Term		2 years
Program facility fee		0.38%
Accounts receivable securitization program | Base Rate or Commercial Paper [Member] | Revolving credit facilities
Debt Instrument [Line Items]
Spread over base rate		0.38%
Notes Due September 2015
Debt Instrument [Line Items]
Long-term debt, stated interest rate			6.00%
Notes due | Notes Due April 2026
Debt Instrument [Line Items]
Long-term debt, stated interest rate	4.625%	4.625%
Proceeds from Issuance of Debt, net of discounts	$ 546,000
Underwriting fees and other debt issuance costs	$ 4,500

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Derivative financial instruments Textuals (Details)	9 Months Ended
	Apr. 02, 2016
Maximum | Foreign Exchange Contracts
Derivatives, Fair Value [Line Items]
Maximum maturity of foreign exchange contracts (less than 60 days)	60 days

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Commitments and contingencies (Textuals) (Details) - USD ($) $ in Millions	Apr. 02, 2016	Jun. 27, 2015
Loss Contingency, Estimate [Abstract]
Potential exposure, maximum	$ 21.3	$ 17.2
Bell
Loss Contingency, Estimate [Abstract]
Contingent liability recognized	$ 10.0

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Income taxes textuals (Details)	3 Months Ended		9 Months Ended
	Apr. 02, 2016	Mar. 28, 2015	Apr. 02, 2016	Mar. 28, 2015
Income taxes
Effective tax rate	23.10%	28.90%	23.50%	26.10%

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Pension and retirement plans (Periodic Pension Cost) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Apr. 02, 2016	Mar. 28, 2015	Apr. 02, 2016	Mar. 28, 2015
Components of net periodic pension costs
Service cost	$ 9,935	$ 9,873	$ 30,356	$ 29,619
Interest cost	5,328	4,449	15,984	13,347
Expected return on plan assets	(10,071)	(9,055)	(30,213)	(27,165)
Recognized net actuarial loss	3,183	3,251	9,549	9,753
Amortization of prior service credit	(393)	(393)	(1,179)	(1,179)
Net periodic pension cost	$ 7,982	$ 8,125	$ 24,497	$ 24,375

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Pension and retirement plan (Textuals) (Details) - USD ($) $ in Millions	3 Months Ended	9 Months Ended
	Apr. 02, 2016	Apr. 02, 2016
Pension and retirement plan
Defined benefit plans, estimated future employer contributions each remaining quarter of current fiscal year	$ 10.0
Current year-to-date contributions		$ 30.0

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Shareholders' equity (Share repurchase program textuals) (Details) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions	3 Months Ended		9 Months Ended
	Apr. 02, 2016	Mar. 28, 2015	Apr. 02, 2016	Mar. 28, 2015
Shareholders' equity
Authorized repurchase of common stock under Share Repurchase Program	$ 1,250,000		$ 1,250,000
Shares repurchased during period (in shares)	3.7		8.1
Average market price per shares repurchased during period (in dollars per share)	$ 39.73		$ 40.88
Cost of repurchase	$ 145,700		$ 330,800
Aggregate number of shares repurchased since inception (in shares)	30.2		30.2
Aggregate cost of shares repurchased since inception	$ 1,030,000		$ 1,030,000
Remaining authorized repurchase amount	$ 221,700		$ 221,700
Cash dividends paid per common share	$ 0.17	$ 0.16	$ 0.51	$ 0.48
Dividends paid on common stock	$ 21,900		$ 66,944	$ 65,602

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Earnings per share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Apr. 02, 2016	Mar. 28, 2015	Apr. 02, 2016	Mar. 28, 2015
Numerator:
Net income	$ 123,459	$ 121,529	$ 409,725	$ 413,180
Denominator:
Weighted average common shares for basic earnings per share	129,811	136,046	131,834	136,965
Net effect of dilutive stock option, restricted stock units and performance share units	1,839	1,675	2,464	2,216
Weighted average common shares for diluted earnings per share	131,650	137,721	134,298	139,181
Basic earnings per share	$ 0.95	$ 0.89	$ 3.11	$ 3.02
Diluted earnings per share	$ 0.94	$ 0.88	$ 3.05	$ 2.97
Antidilutive shares	422		378

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Additional cash flow information (Details) - USD ($) $ in Thousands	9 Months Ended
	Apr. 02, 2016	Mar. 28, 2015
Interest and income taxes paid
Interest paid	$ 80,313	$ 80,478
Income taxes paid	85,323	122,056
Purchase of property, plant and equipment accrued but not paid	15,200	$ 40,000
Level 1
Interest and income taxes paid
Cash equivalents	$ 44,800

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Segment information (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Apr. 02, 2016	Mar. 28, 2015	Apr. 02, 2016	Mar. 28, 2015	Jun. 27, 2015
Sales, by segment
Sales	$ 6,174,716	$ 6,736,860	$ 19,992,467	$ 21,128,326
Operating income (expense):
Operating income (expense) before restructuring charges, integration, amortization of acquired intangible assets, and other	205,223	230,393	700,892	728,714
Restructuring, integration and other expenses (Note 13)	(16,172)	(15,494)	(63,352)	(47,071)
Amortization of acquired intangible assets and other	(7,433)	(11,187)	(22,845)	(34,447)
Operating income	181,618	203,712	614,695	647,196
Assets:
Assets	11,125,460		11,125,460		$ 10,799,953
Property, plant and equipment, net, by geographic area
Property, plant and equipment, net	610,747		610,747		568,779
Americas
Sales, by segment
Sales	2,433,904	2,677,745	7,958,408	8,376,754
Property, plant and equipment, net, by geographic area
Property, plant and equipment, net	400,969		400,969		358,063
United States
Sales, by segment
Sales	2,200,000	2,390,000	7,200,000	7,450,000
Property, plant and equipment, net, by geographic area
Property, plant and equipment, net	391,100		391,100		352,200
EMEA
Sales, by segment
Sales	1,946,575	1,969,069	5,897,243	6,006,500
Property, plant and equipment, net, by geographic area
Property, plant and equipment, net	179,850		179,850		182,311
Germany
Sales, by segment
Sales	749,400	688,700	2,310,000	2,220,000
Property, plant and equipment, net, by geographic area
Property, plant and equipment, net	75,400		75,400		74,200
United Kingdom
Sales, by segment
Sales	294,200	372,300	975,300	1,120,000
Belgium
Property, plant and equipment, net, by geographic area
Property, plant and equipment, net	73,100		73,100		74,700
Asia Pacific
Sales, by segment
Sales	1,794,237	2,090,046	6,136,816	6,745,072
Property, plant and equipment, net, by geographic area
Property, plant and equipment, net	29,928		29,928		28,405
China (including Hong Kong)
Sales, by segment
Sales	627,100	667,500	2,050,000	2,130,000
Taiwan
Sales, by segment
Sales	586,600	802,200	2,270,000	2,620,000
Corporate
Operating income (expense):
Operating income (expense) before restructuring charges, integration, amortization of acquired intangible assets, and other	(33,546)	(34,992)	(116,530)	(110,805)
Assets:
Assets	712,876		712,876		693,286
Electronics Marketing
Sales, by segment
Sales	4,041,527	4,219,528	12,627,543	13,028,812
Electronics Marketing | Segment
Operating income (expense):
Operating income (expense) before restructuring charges, integration, amortization of acquired intangible assets, and other	183,271	197,287	570,286	591,447
Assets:
Assets	6,669,914		6,669,914		6,497,714
Technology Solutions
Sales, by segment
Sales	2,133,189	2,517,332	7,364,924	8,099,514
Technology Solutions | Segment
Operating income (expense):
Operating income (expense) before restructuring charges, integration, amortization of acquired intangible assets, and other	55,498	$ 68,098	247,136	$ 248,072
Assets:
Assets	$ 3,742,670		$ 3,742,670		$ 3,608,953

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Restructuring, integration and other expenses (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Apr. 02, 2016	Mar. 28, 2015	Apr. 02, 2016	Mar. 28, 2015
Charges related to the acquisition and integration activities [Abstract]
Restructuring, integration and other expenses before tax	$ 16,172	$ 15,494	$ 63,352	$ 47,071
Fiscal 2016 [Member]
Charges related to the acquisition and integration activities [Abstract]
Restructuring expenses	7,874		39,350
Integration costs	4,331		8,824
Other costs	4,614		16,749
Changes in estimates for prior restructuring liabilities	(647)		(1,571)
Restructuring, integration and other expenses before tax	16,172		63,352
Restructuring, integration and other expenses after tax	$ 10,804		$ 42,029
Restructuring, integration and other expenses per share on a diluted basis (in dollars per share)	$ 0.08		$ 0.31

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Restructuring, integration and other expenses (Details) $ in Thousands	9 Months Ended
	Apr. 02, 2016 USD ($)
Fiscal Year 2016 Restructuring Liabilities
Activity related to the restructuring reserves
Restructuring expenses	$ 39,350
Cash payments	(26,060)
Non-cash amounts	(913)
Other, principally foreign currency translation	155
Ending Balance	12,532
Fiscal Year 2015 restructuring liabilites
Activity related to the restructuring reserves
Beginning Balance	14,466
Cash payments	(10,484)
Changes in estimates, net	2,026
Other, principally foreign currency translation	2,758
Ending Balance	4,714
Fiscal Year 2014 And Prior Restructuring Liabilities
Activity related to the restructuring reserves
Beginning Balance	11,800
Ending Balance	4,800
Employee Severance | Fiscal Year 2016 Restructuring Liabilities
Activity related to the restructuring reserves
Restructuring expenses	32,670
Cash payments	(23,735)
Other, principally foreign currency translation	150
Ending Balance	9,085
Employee Severance | Fiscal Year 2015 restructuring liabilites
Activity related to the restructuring reserves
Beginning Balance	11,256
Cash payments	(9,526)
Changes in estimates, net	1,772
Other, principally foreign currency translation	2,821
Ending Balance	2,779
Facility Closing | Fiscal Year 2016 Restructuring Liabilities
Activity related to the restructuring reserves
Restructuring expenses	4,863
Cash payments	(2,058)
Non-cash amounts	479
Other, principally foreign currency translation	(57)
Ending Balance	3,227
Facility Closing | Fiscal Year 2015 restructuring liabilites
Activity related to the restructuring reserves
Beginning Balance	3,210
Cash payments	(958)
Changes in estimates, net	254
Other, principally foreign currency translation	(63)
Ending Balance	1,935
Asset Impairments | Fiscal Year 2016 Restructuring Liabilities
Activity related to the restructuring reserves
Restructuring expenses	1,014
Non-cash amounts	(1,014)
Other Restructuring | Fiscal Year 2016 Restructuring Liabilities
Activity related to the restructuring reserves
Restructuring expenses	803
Cash payments	(267)
Non-cash amounts	(378)
Other, principally foreign currency translation	62
Ending Balance	$ 220

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Restructuring, integration and other expenses (Textuals) (Details) $ in Thousands	9 Months Ended
	Apr. 02, 2016 USD ($) employee	Jun. 27, 2015 USD ($)
Fiscal Year 2016 Restructuring Liabilities
Restructuring Cost and Reserve [Line Items]
Fiscal 2016 restructuring expenses	$ 39,350
Restructuring Reserve	12,532
Environmental remediation expense	4,300
Legal fees	5,200
Fiscal Year 2016 Restructuring Liabilities | EM
Restructuring Cost and Reserve [Line Items]
Fiscal 2016 restructuring expenses	22,000
Fiscal Year 2016 Restructuring Liabilities | TS
Restructuring Cost and Reserve [Line Items]
Fiscal 2016 restructuring expenses	$ 17,400
Fiscal Year 2016 Restructuring Liabilities | Minimum
Restructuring Cost and Reserve [Line Items]
Number of employee reductions under Severance charges | employee	560
Fiscal Year 2015 restructuring liabilites
Restructuring Cost and Reserve [Line Items]
Restructuring Reserve	$ 4,714	$ 14,466
Fiscal Year 2014 And Prior Restructuring Liabilities
Restructuring Cost and Reserve [Line Items]
Restructuring Reserve	$ 4,800	$ 11,800