Segment information

3 Months Ended

Oct. 01, 2016

Segment information

Segment information

13. 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.

At the beginning of fiscal 2017, in alignment with Avnet’s goal to build a global embedded solutions business, the Company transferred a portion of its embedded computing solutions business to EM from TS. As a result of this change, sales, operating income and assets previously reported in the TS operating group in fiscal 2016 will be included within the EM operating group in fiscal 2017. The Company does not view the amount of sales, operating income, or assets of such transferred operations to be a material change to the composition of its operating groups for financial reporting purposes. Sales of approximately $129.4 million related to such transferred operations reported in the TS operating group in the first quarter of fiscal 2016 have been reflected within EM in the tables below for comparability between fiscal years. The transfer of such operations between operating groups did not impact the determination of the Company’s operating groups or its previously reported consolidated financial results.

As discussed further in Note 3, the Company entered into a definitive agreement to sell the TS operating group during the first quarter of fiscal 2017.  Although the TS operating group is classified as a discontinued operation in this Quarterly Report on Form 10-Q, the Company still owns and operates the TS operating group.  As a result, the Company has not changed its reportable segments or its historical measures of segment results and profitability as of October 1, 2016.  In connection with the planned sale and discontinued operation classification of the TS operating group, the Company has included the estimated Corporate expenses specific to or benefiting the TS operating group as a component of discontinued operations.

	First Quarters Ended
	October 1,		October 3,
	2016		2015
	(Thousands)
Sales:
Electronics Marketing (continuing operations)	$	4,173,405	$	4,600,802
Technology Solutions (discontinued operations)		1,866,901		2,368,892
Operating income (expense):
Electronics Marketing (continuing operations)	$	186,528	$	213,031
Technology Solutions (discontinued operations)		42,674		74,538
Corporate - continuing operations		(23,600)		(32,058)
Corporate - discontinued operations		(12,500)		(15,100)
		193,102		240,411
Restructuring, integration and other expenses - continuing operations		(29,469)		(12,518)
Restructuring, integration and other expenses - discontinued operations		(4,224)		(13,440)
Amortization of acquired intangible assets and other - continuing operations		(2,378)		(2,848)
Amortization of acquired intangible assets and other - discontinued operations		(4,493)		(4,643)
Less: TS discontinued operations		(21,547)		(36,975)
Operating Income	$	130,991	$	169,987
Sales, by geographic area:
Americas (1)	$	2,349,343	$	2,773,943
EMEA (2)		1,845,550		2,015,219
Asia/Pacific (3)		1,845,413		2,180,532
Less: TS discontinued operations		1,866,901		2,368,892
Sales	$	4,173,405	$	4,600,802

(1)Includes sales from the United States of $2.14 billion and $2.52 billion for the quarters ended October 1, 2016, and October 3, 2015, respectively.

(2)Includes sales from Germany and the United Kingdom of $762.2 million and $254.7 million, respectively, for the quarter ended October 1, 2016. Includes sales from Germany and the United Kingdom of $800.6 million and $340.6 million, respectively, for the quarter ended October 3, 2015.

(3)Includes sales from China (including Hong Kong) and Taiwan of $668.7 million and $589.5 million, respectively, for the quarter ended October 1, 2016. Includes sales from China (including Hong Kong) and Taiwan of $714.5 million and $822.1 million, respectively, for the quarter ended October 3, 2015.

	October 1,		July 2,
	2016		2016
	(Thousands)
Assets:
Electronics Marketing	$	7,037,730	$	7,234,008
Technology Solutions		3,131,587		3,397,029
Corporate		876,806		608,768
Assets	$	11,046,123	$	11,239,805
Property, plant, and equipment, net, by geographic area:
Americas (1)	$	414,141	$	404,992
EMEA (2)		179,624		178,123
Asia/Pacific		30,750		29,543
Less: TS discontinued operations		153,194		159,449
Property, plant, and equipment, net,	$	471,321	$	453,209

(1)Includes property, plant and equipment, net, of $404.3 million and $395.0 million as of October 1, 2016, and July 2, 2016, respectively, in the United States.

(2)Includes property, plant and equipment, net, of $79.6 million and $69.4 million in Germany and Belgium, respectively, as of October 1, 2016, and $76.4 million and $69.8 million in Germany and Belgium, respectively, as of July 2, 2016.