Segment information

6 Months Ended

Dec. 31, 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.

In alignment with Avnet’s goal to build a global embedded solutions business, the Company transferred a portion of its embedded computing solutions operations 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 $46.5 million and $103.7 million related to such transferred operations reported in the TS operating group in the second quarter and first six months of fiscal 2016 have been reflected in the consolidated statements of operations and 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 December 31, 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.

	Second Quarters Ended				Six Months Ended
	December 31,		January 2,		December 31,		January 2,
	2016		2016		2016		2016
	(Thousands)
Sales:
Electronics Marketing (continuing operations)	$	4,273,559	$	4,161,082	$	8,391,663	$	8,689,667
Technology Solutions (discontinued operations)		2,453,262		2,686,975		4,375,464		5,128,084
Operating income (expense):
Electronics Marketing (continuing operations)	$	190,679	$	176,266	$	375,730	$	389,297
Technology Solutions (discontinued operations)		103,231		115,102		147,382		189,640
Corporate - continuing operations		(26,220)		(23,794)		(49,820)		(55,852)
Corporate - discontinued operations		(14,379)		(12,316)		(26,879)		(27,416)
Held for sale depreciation elimination - discontinued operations		6,819		—		6,819		—
		260,130		255,258		453,232		495,669
Restructuring, integration and other expenses - continuing operations		(30,400)		(14,083)		(59,869)		(26,601)
Restructuring, integration and other expenses - discontinued operations		(3,316)		(7,139)		(7,540)		(20,579)
Amortization of acquired intangible assets and other - continuing operations		(9,829)		(2,272)		(12,207)		(5,120)
Amortization of acquired intangible assets and other - discontinued operations		—		(5,649)		(4,493)		(10,292)
Less: TS discontinued operations		(92,355)		(89,998)		(115,379)		(130,369)
Operating Income	$	124,230	$	136,117		253,744		302,708
Sales, by geographic area:
Americas (1)	$	2,675,995	$	2,750,560	$	5,025,339	$	5,524,503
EMEA (2)		2,134,740		1,935,449		3,980,290		3,950,668
Asia/Pacific (3)		1,916,086		2,162,048		3,761,498		4,342,580
Less: TS discontinued operations	$	(2,453,262)	$	(2,686,975)	$	(4,375,464)	$	(5,128,084)
Sales	$	4,273,559	$	4,161,082	$	8,391,663	$	8,689,667

(1)Includes sales from the United States of $2.42 billion and $2.48 billion for the second quarters ended December 31, 2016, and January 2, 2016, respectively. Includes sales from the United States of $4.55 billion and $4.99 billion for the first six months of fiscal 2017 and 2016, respectively.

(2)Includes sales from Germany and the United Kingdom of $845.7 million and $389.8 million, respectively, for the second quarter ended December 31, 2016, and $1.61 billion and $644.6 million, respectively, for the first six months of fiscal 2017. Includes sales from Germany and the United Kingdom of $760.6 million and $340.5 million, respectively, for the second quarter ended January 2, 2016, and $1.56 billion and $681.1 million, respectively, for the first six months of fiscal 2016.

(3)Includes sales from China (including Hong Kong) and Taiwan of $638.6 million and $597.1 million, respectively, for the second quarter ended December 31, 2016, and $1.31 billion and $1.19 billion, respectively, for the first six months of fiscal 2017. Includes sales from China (including Hong Kong) and Taiwan of $703.9 million and $864.0 million, respectively, for the second quarter ended January 2, 2016, and $1.42 billion and $1.69 billion, respectively, for the first six months of fiscal 2016.

	December 31,		July 2,
	2016		2016
	(Thousands)
Assets:
Electronics Marketing	$	8,334,410	$	7,170,499
Technology Solutions		4,053,487		3,460,538
Corporate		868,098		608,768
Assets	$	13,255,995	$	11,239,805
Property, plant, and equipment, net, by geographic area:
Americas (1)	$	464,390	$	404,992
EMEA (2)		215,974		178,123
Asia/Pacific		37,183		29,543
Less: TS discontinued operations		(152,439)		(159,449)
Property, plant, and equipment, net,	$	565,108	$	453,209

(1)Includes property, plant and equipment, net, of $448.1 million and $395.0 million as of December 31, 2016, and July 2, 2016, respectively, in the United States.

(2)Includes property, plant and equipment, net, of $78.3 million and $63.5 million in Germany and Belgium, respectively, as of December 31, 2016, and $76.4 million and $69.8 million in Germany and Belgium, respectively, as of July 2, 2016.