Document and Entity Information
Document and Entity Information Document - USD ($) | 12 Months Ended | ||
Jul. 01, 2017 | Jul. 28, 2017 | Dec. 30, 2016 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | AVNET INC | ||
Entity Central Index Key | 8,858 | ||
Document Type | 10-K | ||
Document Period End Date | Jul. 1, 2017 | ||
Current Fiscal Year End Date | --07-01 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 6,069,247,576 | ||
Entity Common Stock, Shares Outstanding | 123,063,587 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jul. 01, 2017 | Jul. 02, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 836,384 | $ 1,031,478 |
Marketable securities | 281,326 | |
Receivables, less allowances of $47,272 and $27,448, respectively | 3,337,624 | 2,769,906 |
Inventories | 2,824,709 | 2,559,921 |
Prepaid and other current assets | 253,765 | 73,786 |
Current assets of discontinued operations | 2,568,882 | |
Total current assets | 7,533,808 | 9,003,973 |
Property, plant and equipment, net | 519,575 | 453,209 |
Goodwill | 1,148,347 | 621,852 |
Intangible assets, net | 277,291 | 22,571 |
Other assets | 220,568 | 239,133 |
Non-current assets of discontinued operations | 899,067 | |
Total assets | 9,699,589 | 11,239,805 |
Current liabilities: | ||
Short-term debt | 50,113 | 1,152,599 |
Accounts payable | 1,861,635 | 1,590,777 |
Accrued expenses and other | 542,023 | 394,888 |
Current liabilities of discontinued operations | 1,804,229 | |
Total current liabilities | 2,453,771 | 4,942,493 |
Long-term debt | 1,729,212 | 1,339,204 |
Other liabilities | 334,538 | 223,053 |
Non-current liabilities of discontinued operations | 43,769 | |
Total liabilities | 4,517,521 | 6,548,519 |
Commitments and contingencies (Note 12 and Note 14) | ||
Shareholders' equity: | ||
Common stock $1.00 par; authorized 300,000,000 shares; issued 123,080,952 shares and 127,377,466 shares, respectively | 123,081 | 127,377 |
Additional paid-in capital | 1,503,490 | 1,452,413 |
Retained earnings | 3,799,363 | 3,632,271 |
Accumulated other comprehensive loss | (243,866) | (520,775) |
Total shareholders' equity | 5,182,068 | 4,691,286 |
Total liabilities and shareholders' equity | $ 9,699,589 | $ 11,239,805 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Jul. 01, 2017 | Jul. 02, 2016 |
Current assets: | ||
Allowance for doubtful accounts receivable, current (in dollars) | $ 47,272 | $ 27,448 |
Stockholders' equity: | ||
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common stock, shares, issued | 123,080,952 | 127,377,466 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Jul. 01, 2017 | Jul. 02, 2016 | Jun. 27, 2015 | |
Income Statement [Abstract] | |||
Sales | $ 17,439,963 | $ 16,740,597 | $ 17,655,319 |
Cost of sales | 15,070,521 | 14,662,651 | 15,445,184 |
Gross profit | 2,369,442 | 2,077,946 | 2,210,135 |
Selling, general and administrative expenses | 1,770,627 | 1,460,273 | 1,515,141 |
Restructuring Integration And Other Charges | 137,415 | 44,761 | 41,848 |
Operating income | 461,400 | 572,912 | 653,146 |
Other (expense) income, net | (44,305) | (2,963) | 5,445 |
Interest expense | (106,691) | (91,936) | (87,080) |
Income from continuing operations before income taxes | 310,404 | 478,013 | 571,511 |
Income tax expense | 47,053 | 87,104 | 86,136 |
Income from continuing operations, net of tax | 263,351 | 390,909 | 485,375 |
Income from discontinued operations, net of tax | 39,571 | 115,622 | 86,538 |
Gain on sale of discontinued operations, net of tax | 222,356 | ||
Income from discontinued operations, net of tax | 261,927 | 115,622 | 86,538 |
Net income | $ 525,278 | $ 506,531 | $ 571,913 |
Earnings per share: | |||
Basic earnings per share-continuing operations | $ 2.07 | $ 2.99 | $ 3.55 |
Basic earnings per share-discontinued operations | 2.06 | 0.88 | 0.63 |
Basic earnings per share | 4.13 | 3.87 | 4.18 |
Diluted earnings per share-continuing operations | 2.05 | 2.93 | 3.50 |
Diluted earnings per share-discontinued operations | 2.03 | 0.87 | 0.62 |
Diluted earnings per share | $ 4.08 | $ 3.80 | $ 4.12 |
Shares used to compute earnings per share: | |||
Basic | 127,032 | 130,858 | 136,688 |
Diluted | 128,651 | 133,173 | 138,791 |
Cash dividends paid per common share | $ 0.70 | $ 0.68 | $ 0.64 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 01, 2017 | Jul. 02, 2016 | Jun. 27, 2015 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 525,278 | $ 506,531 | $ 571,913 |
Other comprehensive income (loss), net of tax: | |||
Foreign currency translation adjustments and other | 94,116 | (45,355) | (561,022) |
Recognized translation loss and other from divestiture (Note 3) | 181,465 | ||
Pension adjustments, net | 1,328 | (34,382) | (19,528) |
Total comprehensive income (loss) | $ 802,187 | $ 426,794 | $ (8,637) |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Retained Earnings | AOCI Attributable to Parent [Member] | Total |
Stockholders' Equity Attributable to Parent, Beginning Balance at Jun. 28, 2014 | $ 138,286 | $ 1,354,988 | $ 3,257,407 | $ 139,512 | $ 4,890,193 |
Shares issued Beginning Balance at Jun. 28, 2014 | 138,286,000 | ||||
Net income | 571,913 | 571,913 | |||
Translation adjustments | (561,022) | (561,022) | |||
Pension liability adjustment, net of tax of $1,181, $21,356 and $7,540 respectively | (19,528) | (19,528) | |||
Cash dividends | (87,330) | (87,330) | |||
Repurchases of common stock | $ (4,001) | (159,391) | (163,392) | ||
Repurchase of common stock (in shares) | (4,001,000) | ||||
Stock-based compensation, including related tax benefits of $4,370 | $ 1,211 | 52,976 | 54,187 | ||
Stock-based compensation, included related tax benefits of $4,370 (in shares) | 1,211,000 | ||||
Shares issued Ending Balance at Jun. 27, 2015 | 135,496,000 | ||||
Stockholders' Equity Attributable to Parent, Ending Balance at Jun. 27, 2015 | $ 135,496 | 1,407,964 | 3,582,599 | (441,038) | 4,685,021 |
Net income | 506,531 | 506,531 | |||
Translation adjustments | (45,355) | (45,355) | |||
Pension liability adjustment, net of tax of $1,181, $21,356 and $7,540 respectively | (34,382) | (34,382) | |||
Cash dividends | (88,594) | (88,594) | |||
Repurchases of common stock | $ (9,270) | (368,265) | (377,535) | ||
Repurchase of common stock (in shares) | (9,270,000) | ||||
Stock-based compensation, including related tax benefits of $4,370 | $ 1,151 | 44,449 | $ 45,600 | ||
Stock-based compensation, included related tax benefits of $4,370 (in shares) | 1,151,000 | ||||
Shares issued Ending Balance at Jul. 02, 2016 | 127,377,000 | 127,377,466 | |||
Stockholders' Equity Attributable to Parent, Ending Balance at Jul. 02, 2016 | $ 127,377 | 1,452,413 | 3,632,271 | (520,775) | $ 4,691,286 |
Net income | 525,278 | 525,278 | |||
Translation adjustments | 94,116 | ||||
Translation adjustments and other | 275,581 | 275,581 | |||
Pension liability adjustment, net of tax of $1,181, $21,356 and $7,540 respectively | 1,328 | 1,328 | |||
Cash dividends | (88,657) | (88,657) | |||
Repurchases of common stock | $ (6,355) | (269,529) | (275,884) | ||
Repurchase of common stock (in shares) | (6,355,000) | ||||
Stock-based compensation, including related tax benefits of $4,370 | $ 2,059 | 51,077 | $ 53,136 | ||
Stock-based compensation, included related tax benefits of $4,370 (in shares) | 2,059,000 | ||||
Shares issued Ending Balance at Jul. 01, 2017 | 123,081,000 | 123,080,952 | |||
Stockholders' Equity Attributable to Parent, Ending Balance at Jul. 01, 2017 | $ 123,081 | $ 1,503,490 | $ 3,799,363 | $ (243,866) | $ 5,182,068 |
Consolidated Statements of Sha7
Consolidated Statements of Shareholders' Equity (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 01, 2017 | Jul. 02, 2016 | Jun. 27, 2015 | |
Statement of Stockholders' Equity [Abstract] | |||
Tax on pension liability adjustment | $ 1,181 | $ 21,356 | $ 7,540 |
Related tax benefits on stock-based compensation | $ 4,370 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 01, 2017 | Jul. 02, 2016 | Jun. 27, 2015 | |
Cash flows from operating activities: | |||
Net income | $ 525,278 | $ 506,531 | $ 571,913 |
Less: Income from discontinued operations, net of tax | 261,927 | 115,622 | 86,538 |
Income from continuing operations | 263,351 | 390,909 | 485,375 |
Non-cash and other reconciling items: | |||
Depreciation | 101,407 | 70,344 | 66,436 |
Amortization | 53,953 | 9,246 | 15,755 |
Deferred income taxes | (17,705) | 107,598 | 8,697 |
Stock-based compensation | 47,686 | 56,908 | 62,006 |
Other, net | 29,104 | 29,379 | 55,964 |
Changes in (net of effects from businesses acquired): | |||
Receivables | (371,820) | 191,209 | (247,645) |
Inventories | 84,408 | (416,644) | (78,339) |
Accounts payable | 163,604 | (326,217) | 117,513 |
Accrued expenses and other, net | (132,941) | (161,607) | (167,907) |
Net cash flows provided (used) by operating activities - continuing operations | 221,047 | (48,875) | 317,855 |
Net cash flows (used) provided by operating activities - discontinued operations | (589,738) | 273,190 | 266,028 |
Net cash flows (used) provided by operating activities | (368,691) | 224,315 | 583,883 |
Cash flows from financing activities: | |||
Issuance of notes, net of issuance costs | 296,374 | 541,500 | |
Repayment of notes | (530,800) | (250,000) | |
Borrowings (repayments) under accounts receivable securitization, net | (588,000) | 79,996 | 34,362 |
Borrowings (repayment) of senior unsecured credit facility, net | (50,029) | 101,200 | 38,000 |
Borrowings (repayments) under bank credit facilities and other debt, net | 27,877 | 18,695 | (108,486) |
Borrowings of term loans | 530,756 | ||
Repayments of term loans | (511,358) | ||
Repurchases of common stock | (275,884) | (380,943) | (159,984) |
Dividends paid on common stock | (88,657) | (88,594) | (87,330) |
Other, net | (1,870) | (11,448) | (13,502) |
Net cash flows (used) provided by financing activities - continuing operations | (1,191,591) | 10,406 | (296,940) |
Net cash flows provided (used) by financing activities - discontinued operations | 3,447 | 22,949 | (44,048) |
Net cash flows (used) provided by financing activities | (1,188,144) | 33,355 | (340,988) |
Cash flows from investing activities: | |||
Purchases of property, plant and equipment | (120,397) | (137,375) | (133,356) |
Acquisitions of businesses, net of cash acquired (Note 2) | (802,744) | ||
Other, net | 18,656 | 15,574 | (11,705) |
Net cash flows used for investing activities - continuing operations | (904,485) | (121,801) | (145,061) |
Net cash flows provided (used) by investing activities - discontinued operations | 2,242,959 | (30,712) | (41,282) |
Net cash flows provided (used) by investing activities | 1,338,474 | (152,513) | (186,343) |
Effect of currency exchange rate changes on cash and cash equivalents | 23,267 | (6,232) | (52,970) |
Cash and cash equivalents: | |||
Net change in cash and cash equivalents | (195,094) | 98,925 | 3,582 |
Cash and cash equivalents at beginning of period | 1,031,478 | 932,553 | 928,971 |
Cash and cash equivalents at end of period | $ 836,384 | $ 1,031,478 | $ 932,553 |
Summary of significant accounti
Summary of significant accounting policies | 12 Months Ended |
Jul. 01, 2017 | |
Summary of significant accounting policies | |
Summary of significant accounting policies | 1. Summary of significant accounting policie Basis of presentation — The accompanying consolidated financial statements include the accounts of Avnet, Inc. and all of its majority-owned and controlled subsidiaries (the “Company” or “Avnet”). All intercompany and intracompany accounts and transactions have been eliminated. Unless indicated otherwise, the information in the Notes to the consolidated financial statements relates to the Company's continuing operations and does not include the results of discontinued operations. Reclassifications — Certain prior period amounts have been reclassified to conform to the current-period presentation including the presentation of discontinued operations. Fiscal year — The Company operates on a “52/53 week” fiscal year, which ends on the Saturday closest to June 30th. Fiscal 2017 and 2015 contain 52 weeks compared to 53 weeks in fiscal 2016. Unless otherwise noted, all references to “fiscal” or any other “year” shall mean the Company’s fiscal year. Management estimates — The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities, reported amounts of sales and expenses and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements. Actual results could differ materially from those estimates. Cash and cash equivalents — The Company considers all highly liquid investments with an original maturity of three months or less including money market funds to be cash equivalents. Inventories — Inventories, comprised principally of finished goods, are stated at the lower of cost or net realizable value, whichever is lower. The Company regularly reviews the cost of inventory against its estimated net realizable value, considering historical experience and any contractual rights of return, stock rotations, obsolescence allowances or price protections provided by the Company’s suppliers, and records a lower of cost or net realizable value write-down if any inventories have a cost in excess of their estimated net realizable value. The Company does not incorporate any non-contractual protections when estimating the net realizable value of its inventories. Depreciation, amortization and useful lives — The Company reports property, plant and equipment at cost, less accumulated depreciation. Cost includes the price paid to acquire or construct the assets, required installation costs, interest capitalized during the construction period, and any expenditure that substantially adds to the value of or substantially extends the useful life of an existing asset. Additionally, the Company capitalizes qualified costs related to software obtained or developed for internal use. Software obtained for internal use has generally been enterprise-level business operations, logistics and finance software that is customized to meet the Company’s specific operational requirements. The Company begins depreciation and amortization (“depreciation”) for property, plant and equipment when an asset is both in the location and condition for its intended use. Property, plant, and equipment is depreciated using the straight-line method over its estimated useful lives. The estimated useful lives for property, plant, and equipment are typically as follows: buildings — 30 years; machinery, fixtures and equipment — 2-10 years; information technology hardware and software — 2-10 years; and leasehold improvements — over the applicable minimum lease term or economic useful life if shorter. The Company amortizes intangible assets acquired in business combinations using the straight-line method over the estimated economic useful lives of the intangible assets from the date of acquisition, which is generally between 5-10 years. Long-lived assets impairment — Long-lived assets, including property, plant and equipment and intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. For purposes of recognition and measurement of an impairment loss, long-lived assets are grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities (“asset group”). An impairment is recognized when the estimated undiscounted cash flows expected to result from the use of the asset group and its eventual disposition is less than its carrying amount. An impairment is measured as the amount by which an asset group’s carrying value exceeds its estimated fair value. The Company considers a long-lived asset to be abandoned when it has ceased use of such abandoned asset and if the Company has no intent to use or repurpose the asset in the future. The Company continually evaluates the carrying value and the remaining economic useful life of long-lived assets and will adjust the carrying value and remaining useful life if and when appropriate. Goodwill — Goodwill represents the excess of the purchase price of acquired businesses over the estimated fair value assigned to the individual assets acquired and liabilities assumed. The Company does not amortize goodwill, but instead tests goodwill for impairment at least annually in the fourth quarter and, if necessary, records any impairment resulting from such goodwill impairment testing as a component of operating expenses. Impairment testing is performed at the reporting unit level, and the Company had four reporting units as of the fiscal 2017 annual goodwill impairment testing date defined as each of the three regions (Americas, EMEA, and Asia Pacific) within the Company’s Electronic Components operating segment and the Premier Farnell operating segment. The Company will perform an interim impairment test between required annual tests 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. In performing goodwill impairment testing, the Company may first make a qualitative assessment of whether it is more-likely-than-not that a reporting unit’s fair value is less than its carrying value. If the qualitative assessment indicates it is more-likely-than-not that a reporting unit’s fair value is not greater than its carrying value, the Company must perform a quantitative impairment test. The Company defines the fair value of a reporting unit as the price that would be received to sell the reporting unit as a whole in an orderly transaction between market participants as of the impairment test date. To determine the fair value of a reporting unit, the Company primarily uses the income approach methodology of valuation, which includes the discounted cash flow method, and the market approach methodology of valuation, which considers values of comparable businesses to estimate the fair value of the Company’s reporting units. Significant management judgment is required when estimating the fair value of the Company’s reporting units from a market participant perspective including the forecasting of future operating results, the discount rates and expected future growth rates used in the discounted cash flow method of valuation, and in the selection of comparable businesses and related market multiples that are used in the market approach. If the estimated fair value of a reporting unit exceeds the carrying value assigned to that reporting unit, goodwill is not impaired. If the estimated fair value of a reporting unit is less than the carrying value assigned to that reporting unit, then a goodwill impairment loss is measured based on such difference. Foreign currency translation — The assets and liabilities of foreign operations are translated into U.S. Dollars at the exchange rates in effect at the balance sheet date, with the related translation adjustments reported as a separate component of shareholders’ equity and comprehensive income. Results of operations are translated using the average exchange rates prevailing throughout the period. Transactions denominated in currencies other than the functional currency of the Avnet subsidiaries that are party to the transactions are remeasured at exchange rates in effect at the balance sheet date or upon settlement of the transaction. Gains and losses from such remeasurements are recorded in the consolidated statements of operations as a component of “other (expense) income, net.” Income taxes — The Company follows the asset and liability method of accounting for income taxes. Deferred income tax assets and liabilities are recognized for the estimated future tax impact of differences between the consolidated financial statement carrying amounts of assets and liabilities and their respective tax bases. Deferred income tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred income tax assets and liabilities of a change in tax rates is recognized within income tax expense in the period in which the new rate is enacted. Based upon historical and estimated levels of future taxable income and analysis of other key factors, the Company may increase or decrease a valuation allowance against its deferred tax assets, as deemed necessary, to state such assets at their estimated net realizable value. The Company establishes contingent liabilities for potentially unfavorable outcomes of positions taken on certain tax matters. These liabilities are based on management’s assessment of whether a tax benefit is more likely than not to be sustained upon examination by the relevant tax authorities. There may be differences between the estimated and actual outcomes of these matters that may result in future changes in estimates to such unrecognized tax benefits. To the extent such changes in estimates are required; the Company’s effective tax rate may potentially fluctuate as a result. In accordance with the Company’s accounting policies, accrued interest and penalties related to unrecognized tax benefits are recorded as a component of income tax expense. Self-insurance — In the U.S., the Company is primarily self-insured for medical, workers’ compensation, and general, product and automobile liability costs; however, the Company also has stop-loss insurance policies in place to limit the Company’s exposure to individual and aggregate claims made. Liabilities for these programs are estimated based upon outstanding claims and claims estimated to be incurred but not yet reported based upon historical loss experience. These estimates are subject to variability due to changes in trends of losses for outstanding claims and incurred but not reported claims, including external factors such as the number of and cost of claims, benefit level changes and claim settlement patterns. Revenue recognition — Revenue from the sale of products or services is recognized when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the sales price is fixed or determinable and collectability is reasonably assured. Generally, these criteria are met upon either shipment or delivery to customers, depending upon the sales terms. In addition, the Company has certain contractual relationships with its customers and suppliers whereby Avnet assumes an agency relationship in the sales transaction primarily related to the performance of fulfillment logistics services to deliver product for which the Company is not the primary obligor. In such agency arrangements, the Company recognizes the net fee associated with serving as an agent within sales with no associated cost of sales. Revenues are recorded net of discounts, customer rebates and estimated returns. Provisions are made for discounts and customer rebates, which are primarily timing or volume specific, and are estimated based on historical trends and anticipated customer buying patterns. Provisions for returns and other sales adjustments are estimated based on historical sales returns experience, credit memo experience and other known factors. Vendor allowances and consideration — Consideration received from suppliers for price protection, product rebates, marketing/promotional activities, or any other programs are recorded when earned under the terms and conditions of such supplier programs as adjustments to product costs or selling, general and administrative expenses depending upon the nature and contractual requirements related to the consideration received. Some of these supplier programs require management to make estimates and may extend over one or more reporting periods. Comprehensive income — Comprehensive income (loss) represents net income for the year adjusted for certain changes in shareholders’ equity. Accumulated comprehensive income items impacting comprehensive income (loss) includes foreign currency translation and the impact of the Company’s pension liability adjustments, net of tax. Stock-based compensation — The Company measures stock-based payments at fair value and generally recognizes the associated operating expense in the consolidated statement of operations over the requisite service period (see Note 13). A stock-based payment is considered vested for accounting expense attribution purposes when the employee’s retention of the award is no longer contingent on providing continued service. Accordingly, the Company recognizes all stock-based compensation expense for awards granted to retirement eligible employees over the period from the grant date to the date retirement eligibility is achieved, if less than the stated requisite service period. The expense attribution approach for retirement eligible employees does not affect the overall amount of compensation expense recognized, but instead accelerates the recognition of expense. Restructuring and exit activities — The determination of when the Company accrues for involuntary termination benefits under restructuring plans depends on whether the termination benefits are provided under an on-going benefit arrangement or under a one-time benefit arrangement. The Company accounts for on-going benefit arrangements in accordance with ASC 712 Nonretirement Postemployment Benefits and accounts for one-time benefit arrangements in accordance with ASC 420 Exit or Disposal Cost Obligations . If applicable, the Company records such costs into operating expense over the terminated employee’s future service period beyond any minimum retention period. Other costs associated with restructuring or exit activities may include contract termination costs including operating leases and impairments of long-lived assets, which are expensed in accordance with ASC 420 and ASC 360 Exit or Disposal Cost Obligations and Property, Plant and Equipment , respectively. Business combinations — The Company accounts for business acquisitions using the acquisition method of accounting and records any identifiable definite-lived intangible assets separate from goodwill. Intangible assets are recorded at their fair value based on estimates as of the date of acquisition. Goodwill is recorded as the residual amount of the purchase price consideration less the fair value assigned to the individual identifiable assets acquired and liabilities assumed as of the date of acquisition. Contingent consideration, which represents an obligation of the acquirer to transfer additional assets or equity interests to the former owner as part of the purchase price if specified future events occur or conditions are met, is accounted for at the acquisition date fair value either as a liability or as equity depending on the terms of the acquisition agreement. Concentration of credit risk — Financial instruments that potentially subject the Company to a concentration of credit risk principally consist of cash and cash equivalents, marketable securities and trade accounts receivable. The Company invests its excess cash primarily in overnight time deposits and institutional money market funds with highly rated financial institutions. To reduce credit risk, management performs ongoing credit evaluations of its customers’ financial condition and, in some instances, has obtained credit insurance coverage to reduce such risk. The Company maintains reserves for potential credit losses from customers, but has not historically experienced material losses related to individual customers or groups of customers in any particular end market or geographic area. Fair value — The Company measures financial assets and liabilities at fair value based upon an exit price, representing the amount that would be received from the sale of an asset or paid to transfer a liability, in an orderly transaction between market participants. ASC 820, Fair Value Measurements , requires inputs used in valuation techniques for measuring fair value on a recurring or non-recurring basis be assigned to a hierarchical level as follows: Level 1 are observable inputs that reflect quoted prices for identical assets or liabilities in active markets. Level 2 are observable market-based inputs or unobservable inputs that are corroborated by market data and Level 3 are unobservable inputs that are not corroborated by market data. During fiscal 2017, 2016, and 2015, there were no transfers of assets measured at fair value between the three levels of the fair value hierarchy. The carrying amounts of the Company’s financial instruments, including cash and cash equivalents, receivables and accounts payable approximate their fair values at July 1, 2017 due to the short-term nature of these assets and liabilities. At July 1, 2017, and July 2, 2016, the Company had $208.3 million and $8.7 million, respectively, of cash equivalents that were measured at fair value based upon Level 1 criteria. The Company’s investments in marketable securities were also measured at fair value based upon Level 1 criteria. See Note 8 for discussion of the fair value of the Company’s long-term debt and Note 11 for a discussion of the fair value of the Company’s pension plan assets. Derivative financial instruments — See Note 4 for discussion of the Company’s accounting policies related to derivative financial instruments. Marketable securities — The Company determines the classification of investments in marketable securities at the time of acquisition and reevaluates such designation at each reporting period. The Company has classified its investment in marketable securities as trading with any realized or unrealized changes in fair value being classified within other (expense) income, net in the consolidated statements of operations. See Note 3 for further discussion about marketable securities. Accounts receivable securitization — The Company has an accounts receivable securitization program whereby the Company sells certain receivables and retains a subordinated interest and servicing rights to those receivables. The securitization program does not qualify for off balance sheet sales accounting and is accounted for as a secured financing as discussed further in Note 8. Recently adopted accounting pronouncements — In January 2017, the FASB issued Accounting Standards Update 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (“ASU 2017-04”). The amendments in ASU 2017-04 simplify the subsequent measurement of goodwill by eliminating “step two” from the quantitative goodwill impairment test. Under the new guidance, an entity performs its annual, or interim, goodwill impairment test by comparing the estimated fair value of a reporting unit with its carrying amount and recognizes an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s estimated fair value, not to exceed the carrying amount of goodwill allocated to the reporting unit. Additionally, an entity should consider income tax effects from any tax-deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. An entity will continue to have the option to perform a qualitative assessment to determine if a quantitative impairment test is necessary. The same one-step impairment test will be applied to goodwill at all reporting units, even those with zero or negative carrying amounts. Entities will be required to disclose the amount of goodwill at reporting units with zero or negative carrying amounts. ASU 2017-04 is effective for annual reporting periods, including interim periods within those periods, beginning after December 15, 2019, with early adoption permitted. The Company has early adopted this standard during the fourth quarter of fiscal 2017 in connection with its required annual goodwill impairment test, which did not have an impact on its consolidated financial statements. In August 2016, the FASB issued Accounting Standards Update No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”). The update provides guidance for eight specific cash flow classification issues with respect to how certain cash receipts and cash payments are presented and classified within the statement of cash flows in an effort to reduce existing diversity in practice. The standard is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. ASU 2016-15 should be applied using a retrospective transition method to each period presented. The Company early adopted ASU 2016-15 during fiscal 2017, which had no impact on its consolidated statements of cash flows. |
Acquisitions
Acquisitions | 12 Months Ended |
Jul. 01, 2017 | |
Acquisitions | |
Acquisitions | 2. Acquisitions Fiscal 2017 Acquisitions Premier Farnell On October 17, 2016, the Company acquired all of the outstanding shares of Premier Farnell Plc (“PF”), a global distributor of electronic components and related products delivering engineering solutions to the electronic system design community utilizing multi-channel sales and marketing resources. The cash consideration paid for the PF acquisition was approximately $841 million, which consisted of £1.85 per share of PF common stock. Additionally, Avnet assumed $242.8 million of debt at fair value. The PF business and the goodwill acquired is being integrated into Avnet’s continuing operations and is considered a reportable segment at the end of fiscal 2017. In connection with the acquisition of PF, the Company incurred certain acquisition related costs during fiscal 2017, including approximately $19.0 million of acquisition related professional fees and closing costs included within restructuring, integration and other expenses, and approximately $45.0 million of expenses within other (expense) income, net for acquisition financing related fees including foreign currency economic hedging costs and bridge financing commitment fees. Since the date of acquisition, PF contributed approximately $22.0 million of income from continuing operations during fiscal 2017. Preliminary allocation of purchase price The Company has not yet completed its evaluation and determination of certain assets and liabilities acquired, primarily (i) the final valuation of software and technology related amortizable intangible assets acquired; and (ii) the final assessment and valuation of certain income tax accounts. During the fourth quarter of fiscal 2017, the Company updated its estimated acquisition date fair values for assets acquired and liabilities assumed, the most significant of which resulted in a decrease in goodwill of $21.1 million, a decrease in property, plant and equipment of $3.6 million, a decrease in inventories of $6.6 million, a decrease in accounts payable, accrued liabilities and other current liabilities of $21.2 million and a decrease in other long-term liabilities of $10.1 million. The Company expects the final valuations and assessments will be completed by the first quarter of fiscal 2018, which may result in adjustments to the preliminary values included in the following table: Preliminary Acquisition Method Values (Thousands) Cash $ 46,354 Trade and other receivables, net 187,303 Inventories 328,037 Property, plant and equipment 52,621 Intangible assets 295,112 Total identifiable assets acquired $ 909,427 Accounts payable, accrued liabilities and other current liabilities $ 160,724 Short-term debt 242,814 Other long-term liabilities 140,431 Total identifiable liabilities acquired $ 543,969 Net identifiable assets acquired 365,458 Goodwill 475,862 Net assets acquired $ 841,320 Trade receivables of $160.4 million were recorded at estimated fair value amounts; however, adjustments to acquired amounts were not significant as book value approximated fair value due to the short-term nature of trade receivables. Approximately $10.0 million of goodwill associated with the PF acquisition is expected to be deductible for tax purposes. Pro forma and historical results (Unaudited) Unaudited pro forma information from continuing operations is presented as if the acquisition of PF occurred at the beginning of fiscal 2016. The pro forma information presented below does not purport to present what actual results would have been had the acquisition in fact occurred at the beginning of fiscal 2016, nor does the information project results for any future period. Years Ended July 1, July 2, 2017 2016 (Millions, except per share data) Pro forma sales (unaudited) $ 17,818 $ 18,102 Pro forma net income (unaudited) 297 398 Pro forma net income per fully diluted share (unaudited) 2.31 2.99 Pro forma results from continuing operations exclude any benefits that may result from the acquisition due to synergies derived from sales opportunities and the elimination of any duplicative costs. Pro forma results exclude results of discontinued operations and restructuring, acquisition and divestiture related expenses incurred by PF in their historical results of operations and include amortization expense associated with identifiable intangible assets related to the Company’s acquisition of PF. Pro forma results also exclude interest expense related to acquired long-term debt that was repaid in connection with the acquisition, and other expense related to historical divestiture and debt redemption losses. Since the date of acquisition through the end of fiscal 2017, PF generated sales of $965.9 million. During November 2016, the Company acquired Hackster, Inc. (“Hackster”), a start-up online community of engineers, makers and hobbyists. The purchase price of Hackster was not material to the Company’s consolidated financial statements. |
Discontinued operations
Discontinued operations | 12 Months Ended |
Jul. 01, 2017 | |
Discontinued Operations and Disposal Groups | |
Discontinued operations | 3. Discontinued operations and gain on sale of discontinued operations In February 2017, the Company completed the sale of its Technology Solutions operating group (“TS” or the “TS Business”) to Tech Data Corporation (the “Buyer”), for approximately $2.86 billion in a combination of $2.61 billion in cash including estimated closing adjustments discussed further below and 2.8 million shares of the Buyer valued at $247.2 million at closing. The TS Business has been classified as a discontinued operation in the consolidated financial statements for all periods presented as the sale of the TS Business represented a strategic shift to Avnet. In connection with the closing of the TS sale, the Company recognized a gain on sale of discontinued operations, net of tax of $222.4 million. Included in the measurement of the gain were estimates for the income taxes due on the gain and the additional cash consideration expected from the Buyer related to a closing date net working capital sales price adjustment. The Company is finalizing such net working capital sales price adjustment with the Buyer as provided for in the sales agreement. The Company has included its estimated amount due from the Buyer for the closing date net working capital sales price adjustment as the principal component of the $253.8 million of prepaid and other current assets as of July 1, 2017. The final net working capital sales price adjustment, as determined through the established process outlined in the sales agreement, may be materially different from the Company’s estimate. The impact of any probable changes in the net working capital adjustment will be recorded as an adjustment to the gain on sale from discontinued operations in the period such change occurs. Additionally, the income taxes associated with the gain will be impacted by the final geographic allocation of the sales price, which must be agreed to with the Buyer as required in the sales agreement and may be materially different from the Company’s estimates. The impact of any changes in estimated income taxes on the gain will be recorded as an adjustment to the gain on sale from discontinued operations in the period such change in estimate occurs. The Company expects the net working capital sales price adjustment and the income tax on the gain to be finalized by the end of fiscal 2018. The Buyer shares received by the Company are recorded within “Marketable securities” on the Company’s Consolidated Balance Sheets. The Company has classified these shares as trading securities in accordance with ASC 320 due to management having the intent to trade the securities. During fiscal 2017, the Company recorded $34.1 million of unrealized gains on the shares due to changes in fair value between the closing date and July 1, 2017, which are recorded in “Other (expense) income, net” on the Consolidated Statements of Operations using Level 1 quoted active market prices. The definitive sales agreement includes time based contractual restrictions from the closing date related to the Company’s sale of Buyer shares including a 6-month restriction for 50 percent of the shares and a 12-month restriction for the remaining 50 percent. During the fourth quarter of fiscal 2017, the Company entered into economic hedges for the shares during the contractual restriction periods through the purchase of derivative financial instruments, which economically fixes the amount that will be realized upon the sale of the shares at approximately $247 million. The changes in fair value related to such economic share price hedge are also recorded within other (expense) income, net and offset changes in fair value of the underlying shares. In connection with the sale of the TS Business, the Company entered into a Transition Services Agreement (“TSA”), pursuant to which the Buyer will pay the Company to provide certain information technology, distribution, facilities, finance and human resources related services for various periods of time depending upon the services not to exceed approximately two years from the closing date. Expenses incurred by the Company to provide such services under the TSA are classified within selling, general and administrative expenses and amounts billed to the Buyer to provide such services are classified as a reduction of such expenses. At the end of fiscal 2017, the Buyer had initiated the termination of several TSA services and substantially all TSA services are expected to be terminated by the end of fiscal 2018. Financial results of the TS Business through the closing date are presented as “Income from discontinued operations, net of tax” and “Gain on sale of discontinued operations, net of tax” on the Consolidated Statements of Operations. Included within the gain on sale is $181.5 million of expense reclassified out of accumulated comprehensive income primarily related to TS Business cumulative translation adjustments. The assets and liabilities of the TS Business are presented as “Current assets of discontinued operations”, “Non-current assets of discontinued operations”, “Current liabilities of discontinued operations” and “Non-current liabilities of discontinued operations” on the July 2, 2016, Consolidated Balance Sheet. Cash flows associated with the TS Business, including the cash proceeds from its sale are reported as discontinued operations in the consolidated statements of cash flows for all periods presented. Summarized results of discontinued operations for fiscal 2017, fiscal 2016 and fiscal 2015, are as follows: Years Ended July 1, July 2, June 27, 2017 2016 2015 (Thousands) Sales $ 5,432,140 $ 9,478,682 $ 10,269,338 Cost of sales 4,883,945 8,519,117 9,286,353 Gross profit 548,195 959,565 982,985 Selling, general and administrative expenses 430,003 710,251 759,501 Restructuring, integration and other expenses 7,280 34,557 48,957 Operating income 110,912 214,757 174,527 Interest and other expense, net (24,291) (22,261) (33,073) Income from discontinued operations before income taxes 86,621 192,496 141,454 Income tax expense 47,050 76,874 54,916 Income from discontinued operations, net of taxes 39,571 115,622 86,538 Gain on sale of discontinued operations, net of taxes 222,356 — — Income from discontinued operations, net of taxes $ 261,927 $ 115,622 $ 86,538 Included within selling, general and administrative expenses of discontinued operations was $34.9 million, $47.3 million and $48.9 million of corporate expenses specific to or benefiting the TS Business for fiscal 2017, fiscal 2016, and fiscal 2015, respectively. Corporate costs related to general overhead were not allocated to the TS Business. Subsequent to the first quarter of fiscal 2017, depreciation and amortization of the TS Business long-lived assets ceased due to the TS Business being classified as held for sale. Summarized assets and liabilities of the TS Business as of July 2, 2016, are as follows: July 2, 2016 (Thousands) Receivables, less allowances of $39,356 $ 2,205,213 Inventories 296,310 Prepaid and other current assets 67,359 Total current assets of discontinued operations 2,568,882 Property, plant and equipment, net 159,449 Goodwill 659,368 Intangible assets, net 55,826 Other assets 24,424 Total assets of discontinued operations $ 3,467,949 Accounts payable $ 1,643,004 Accrued expenses and other 161,225 Total current liabilities of discontinued operations 1,804,229 Other Long-term liabilities 43,769 Total liabilities of discontinued operations $ 1,847,998 |
Derivative financial instrument
Derivative financial instruments | 12 Months Ended |
Jul. 01, 2017 | |
Derivative financial instruments | |
Derivative financial instruments | 4. 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 exchange contracts typically with maturities of less than 60 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 (expense) income, net.” Therefore, the changes in valuation of the underlying items being economically hedged are classified in the same consolidated statements of operations line item as the changes in fair value of the forward foreign 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 July 1, 2017, and July 2, 2016. The Company’s master netting and other similar arrangements with various financial institutions related to derivative financial instruments allow for the right of offset. The Company’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 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. The Company’s foreign currency exposure relates primarily to international transactions where the currency collected from customers can be different from the currency used to purchase from suppliers. The Company’s foreign operations transactions are denominated primarily in the following currencies: U.S. Dollar, Euro, British Pound, Japanese Yen, Chinese Yuan and Taiwan Dollar. The Company also, to a lesser extent, has foreign operations transactions primarily in Canadian, other European and Asian foreign currencies. The fair values of derivative financial instruments in the Company’s consolidated balance sheets are as follows: July 1, July 2, 2017 2016 (Thousands) Forward foreign currency exchange contracts not receiving hedge accounting treatment recorded in: Other current assets $ 7,297 $ 9,681 Accrued expenses 4,142 6,369 In addition to amounts included in the above table, there was $34.0 million of accrued expenses related to a derivative financial instrument used to economically hedge the fair value changes in marketable securities discussed further in Note 3 The amount recorded to other (expense) income, net related to derivative financial instruments are as follows: Years Ended July 1, July 2, June 27, 2017 2016 2015 (Thousands) Net derivative financial instrument (loss) gain $ (8,624) $ 274 $ (3,139) Excluded from the above table is approximately $35.0 million of derivative financial instrument losses in other (expenses) income, net, that are associated with foreign currency derivative financial instruments purchased to economically hedge the British Pound purchase price of the PF acquisition as discussed in Note 2 and approximately $34.0 million of derivative financial instrument losses in other (expenses) income, net, that economically hedge the unrealized gain from marketable securities, which is also classified within other (expenses) income, net, as discussed further in Note 3. The Company’s outstanding economic hedges had average maturities of 56 days and 55 days as of July 1, 2017, and July 2, 2016, respectively. Under the Company’s economic hedging policies, gains and losses on the derivative financial instruments are classified within the same line item in the consolidated statements of operations and as the underlying assets or liabilities being economically hedged. |
Shareholders' equity
Shareholders' equity | 12 Months Ended |
Jul. 01, 2017 | |
Shareholders' equity | |
Shareholders' equity | 5. Shareholders’ equity Accumulated comprehensive income (loss) The following table includes the balances within accumulated other comprehensive (loss) income: July 1, July 2, June 27, 2017 2016 2015 (Thousands) Accumulated translation adjustments and other $ (86,647) $ (362,228) $ (316,873) Accumulated pension liability adjustments, net of income taxes (157,219) (158,547) (124,165) Total accumulated other comprehensive (loss) income $ (243,866) $ (520,775) $ (441,038) Amounts reclassified out of accumulated comprehensive income (loss), net of tax, to operating expenses and discontinued operations during fiscal 2017, 2016 and 2015 substantially all related to net periodic pension costs as discussed further in Note 11 and cumulative translation adjustment from the sale of the TS Business discussed further in Note 3. Share repurchase program In February 2017, the Company’s Board of Directors amended the Company’s existing share repurchase program to authorize the repurchase of up to $1.75 billion of common stock in the open market or through privately negotiated transactions. 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. During fiscal 2017, the Company repurchased 6.4 million shares under this program at an average market price of $43.41 per share for a total cost of $275.9 million . Repurchased shares were retired. Since the beginning of the repurchase program through the end of fiscal 2017, the Company has repurchased 37.7 million shares at an aggregate cost of $1.35 billion , and $399.1 million remains available for future repurchases under the share repurchase program. Common stock dividend During fiscal 2017, the Company paid dividends of $0.70 per common share and $88.7 million in total. |
Property plant and equipment, n
Property plant and equipment, net | 12 Months Ended |
Jul. 01, 2017 | |
Property plant and equipment, net | |
Property, plant and equipment, net | 6. Property, plant and equipment, net Property, plant and equipment are recorded at cost and consist of the following: July 1, 2017 July 2, 2016 (Thousands) Buildings $ 136,846 $ 70,882 Machinery, fixtures and equipment 215,155 218,203 Information technology hardware and software 630,352 607,969 Leasehold improvements 99,208 129,156 Depreciable property, plant and equipment, gross 1,081,561 1,026,210 Accumulated depreciation (667,700) (665,055) Depreciable property, plant and equipment, net 413,861 361,155 Land 41,627 37,492 Construction in progress 64,087 54,562 Property, plant and equipment, net $ 519,575 $ 453,209 Depreciation expense related to property, plant and equipment was $101.4 million, $70.3 million and $66.4 million in fiscal 2017, 2016 and 2015, respectively. Interest expense capitalized during fiscal 2017, 2016 and 2015 was not material. During the fourth quarter of fiscal 2017, the Company decided to implement a new global Enterprise Resource Planning (“ERP”) system. As a result of this decision, the estimated useful life of its existing ERP system in the Americas has been reduced to 24 months. Included as a component of restructuring, integration and other expenses was $16.0 million of accelerated depreciation expense as a result of such change in estimated useful life. |
Goodwill and long-lived assets
Goodwill and long-lived assets | 12 Months Ended |
Jul. 01, 2017 | |
Goodwill and long-lived assets | |
Goodwill and long-lived assets | 7. Goodwill and intangible assets The following table presents the change in goodwill balances by reportable segment for fiscal year 2017. All of the accumulated impairment was recognized in fiscal 2009. Electronic Premier Components Farnell Total (Thousands) Gross goodwill $ 1,666,962 $ — $ 1,666,962 Accumulated impairment (1,045,110) — (1,045,110) Carrying value at July 2, 2016 621,852 — 621,852 Acquisitions 12,818 475,862 488,680 Foreign currency translation 378 37,437 37,815 Carrying value at July 1, 2017 $ 635,048 $ 513,299 $ 1,148,347 Gross goodwill $ 1,680,158 $ 513,299 $ 2,193,457 Accumulated impairment (1,045,110) — (1,045,110) Carrying value at July 1, 2017 $ 635,048 $ 513,299 $ 1,148,347 Based upon the Company’s annual impairment tests performed in the fourth quarters of fiscal 2017, 2016 and 2015, there was no impairment of goodwill in the respective fiscal years. The goodwill impairment testing requirements and related assumptions used are described further in Note 1. The following table presents the Company’s acquired identifiable intangible assets: July 1, 2017 July 2, 2016 Acquired Accumulated Net Book Acquired Accumulated Net Book Amount Amortization Value Amount Amortization Value (Thousands) Customer related $ 277,865 $ (79,578) $ 198,287 $ 47,980 $ (34,515) $ 13,465 Trade name 46,915 (6,720) 40,195 3,746 (2,718) 1,028 Technology and other 50,369 (11,560) 38,809 12,356 (4,278) 8,078 $ 375,149 $ (97,858) $ 277,291 $ 64,082 $ (41,511) $ 22,571 Intangible asset amortization expense was $54.0 million, $9.2 million and $15.8 million for fiscal 2017, 2016 and 2015, respectively. Intangible assets have a weighted average remaining useful life of approximately 4 years as of July 1, 2017. The following table presents the estimated future amortization expense for the next five fiscal years and thereafter (in thousands): Fiscal Year 2018 77,884 2019 75,887 2020 74,164 2021 35,118 2022 10,834 Thereafter 3,404 Total $ 277,291 |
Debt
Debt | 12 Months Ended |
Jul. 01, 2017 | |
Debt | |
Debt | 8. Debt Short-term debt consists of the following: July 1, 2017 July 2, 2016 July 1, 2017 July 2, 2016 Interest Rate Carrying Balance Bank credit facilities and other 2.27 % 4.62 % $ 50,113 $ 122,599 Accounts receivable securitization program — 0.93 % — 730,000 Notes due September 2016 — 6.63 % — 300,000 Short-term debt $ 50,113 $ 1,152,599 Bank credit facilities and other consist 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 connection with the PF acquisition, discussed further in Note 2, the Company assumed debt including private placement notes, which the Company planned to repay in connection with the acquisition. During fiscal 2017, the Company paid $230.8 million to redeem the assumed private placement notes. The repayments were made with the proceeds from the issuance of $300 million 3.75% Notes due December 2021, discussed further below. Long-term debt consists of the following: July 1, 2017 July 2, 2016 July 1, 2017 July 2, 2016 Interest Rate Carrying Balance Revolving credit facilities: Accounts receivable securitization program 1.53 % — $ 142,000 $ — Credit Facility 2.77 % 1.72 % 99,970 150,000 Notes due: June 2020 5.88 % 5.88 % 300,000 300,000 December 2021 3.75 % — 300,000 — December 2022 4.88 % 4.88 % 350,000 350,000 April 2026 4.63 % 4.63 % 550,000 550,000 Other long-term debt 1.36 % 1.92 % 642 1,551 Long-term debt before discount and debt issuance costs 1,742,612 1,351,551 Discount and debt issuance costs - unamortized (13,400) (12,347) Long-term debt $ 1,729,212 $ 1,339,204 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 $1.50 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 rations, which the Company was in compliance with as of July 1, 2017. At July 1, 2017, and July 2, 2016, there were $3.1 million and $5.6 million, respectively, in letters of credit issued under the Credit Facility. In December 2016, the Company issued $300.0 million of 3.75% Notes due December 2021 (the “3.75% Notes”). The Company received proceeds of $296.4 million from the offering, net of discounts and debt issuance costs. The 3.75% 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 June 1 and December 1. The Notes included in the above table including the 3.75% Notes are all publicly registered debt, which do not contain any financial covenants. In February 2017, the Company amended and reduced 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 $400.0 million compared to $800.0 million before the amendment. 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 $807.5 million and $1.46 billion at July 1, 2017, and July 2, 2016, 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 financial ratios, which the Company was in compliance with as of July 1, 2017. The Program has a two-year term that expires in August 2018 and as a result is considered long-term debt as of July 1, 2017. There were $142.0 million in borrowings outstanding under the Program as of July 1, 2017, and $730.0 million as of July 2, 2016. Interest on borrowings is calculated using a base rate or a commercial paper rate plus a spread of 0.40%. The facility fee is 0.40%. In October 2016, certain foreign subsidiaries of the Company (the “Borrowers”) borrowed €479 million under a Senior Unsecured Term Loan Credit Agreement (the “Term Loan”) entered into with a group of banks. The Term Loan had a maturity date of October 17, 2019. The proceeds from borrowings under the Term Loan were used to finance a portion of the cash consideration and any fees and expenses related to the Company’s acquisition of PF discussed further in Note 2. In March 2017, the Company repaid in full all outstanding amounts due under the Term Loan with a portion of the proceeds from the sale of the TS Business. Aggregate debt maturities for the next five fiscal years and thereafter are as follows (in thousands): 2018 $ 50,113 2019 242,234 2020 300,292 2021 80 2022 300,006 Thereafter 900,000 Subtotal 1,792,725 Discount and debt issuance costs - unamortized (13,400) Total debt $ 1,779,325 At July 1, 2017, the carrying value and fair value of the Company’s debt was $1.78 billion and $1.85 billion, respectively. At July 2, 2016, the carrying value and fair value of the Company’s debt was $2.49 billion and $2.59 billion, respectively. For the Notes, fair value was estimated based upon quoted market prices and for other debt instruments fair value approximates carrying value due to the market based variable nature of the interest rates on those obligations. |
Accrued expenses and other
Accrued expenses and other | 12 Months Ended |
Jul. 01, 2017 | |
Accrued expenses and other | |
Accrued expenses and other | . Accrued expenses and other Accrued expenses and other consist of the following: July 1, 2017 July 2, 2016 (Thousands) Accrued salaries and benefits $ 205,979 $ 208,624 Accrued operating costs 104,747 47,562 Accrued interest and banking costs 47,481 22,125 Accrued restructuring costs 16,996 15,499 Accrued income taxes 61,552 32,976 Accrued property, plant and equipment 6,491 12,801 Accrued other 98,777 55,301 Total accrued expenses and other $ 542,023 $ 394,888 |
Income taxes
Income taxes | 12 Months Ended |
Jul. 01, 2017 | |
Income taxes | |
Income taxes | 10. Income taxes The components of income tax expense (“tax provision”) are included in the table below. The tax provision for deferred income taxes results from temporary differences arising primarily from net operating losses, inventories valuation, receivables valuation, certain accrued amounts and depreciation and amortization, net of any changes to valuation allowances. Years Ended July 1, 2017 July 2, 2016 June 27, 2015 (Thousands) Current: Federal $ (45,351) $ (16,934) $ 5,497 State and local 4,209 (33) (1,959) Foreign 106,441 92,033 60,082 Total current taxes 65,299 75,066 63,620 Deferred: Federal (30,025) 5,573 39,905 State and local (3,934) 1,351 6,774 Foreign 15,713 5,114 (24,163) Total deferred taxes (18,246) 12,038 22,516 Income tax expense $ 47,053 $ 87,104 $ 86,136 The tax provision is computed based upon income before income taxes from continuing operations from both U.S. and foreign operations. U.S. (loss) income before income taxes from continuing operations was $ ( 174.3) million, $(2.7) million and $85.8 million, in fiscal 2017, 2016 and 2015, respectively, and foreign income before income taxes from continuing operations was $484.7 million, $480.7 million and $485.7 million in fiscal 2017, 2016 and 2015, respectively. See further discussion related to income tax expense for discontinued operations in Note 3. Reconciliations of the federal statutory tax rate to the effective tax rates are as follows: Years Ended July 1, 2017 July 2, 2016 June 27, 2015 U.S. federal statutory rate 35.0 % 35.0 % 35.0 % State and local income taxes, net of federal benefit (1.7) 0.3 0.8 Foreign tax rates, net of valuation allowances (23.5) (12.7) (11.1) Establishment/(release) of valuation allowance, net of U.S. tax expense 1.3 (1.7) (9.0) Change in contingency reserves 3.6 (2.5) 0.9 Tax audit settlements 0.1 (0.7) (2.9) Other, net 0.4 0.5 1.4 Effective tax rate - continuing operations 15.2 % 18.2 % 15.1 % Foreign tax rates represents the impact of the difference between foreign and U.S. federal statutory rates applied to foreign income or loss and also includes the impact of valuation allowances established against the Company’s otherwise realizable foreign deferred tax assets, which are primarily net operating loss carry-forwards. Avnet’s effective tax rate on income before income taxes from continuing operations was 15.2% in fiscal 2017 as compared with an effective tax rate of 18.2% in fiscal 2016. Included in the fiscal 2017 effective tax rate is a net tax benefit of $73 million related to the mix of income in lower tax jurisdictions. The fiscal 2017 effective tax rate is lower than the fiscal 2016 effective tax rate due to the aforementioned favorable mix of income, partially offset by tax expense from the establishment of valuation allowances and reserves in fiscal 2017 as compared with the tax benefit from the valuation allowances released in fiscal 2016. The Company applies the guidance in ASC 740 Income Taxes , which requires management to use its judgment to 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 and types 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 risk associated with underlying estimates of future taxable income, including considering the historical trend of down-cycles in the Company’s served 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. As of the end of fiscal 2015, the Company released the remaining valuation allowance against significant net deferred tax assets related to a legal entity in EMEA. Due to the profitability for this entity and the projections for the future, management concluded a full release of the valuation allowance was appropriate in fiscal 2015. No provision for U.S. income taxes has been made for approximately $3.33 billion of cumulative unremitted earnings of foreign subsidiaries at July 1, 2017, because those earnings are expected to be permanently reinvested outside the U.S. A hypothetical calculation of the deferred tax liability, assuming those earnings were remitted, is not practicable. Foreign cash balances are generally used for ongoing working capital and capital expenditure needs and to support acquisitions, and are permanently reinvested outside the United States. If these funds were needed for general corporate use in the United States, the Company may incur significant income taxes. The significant components of deferred tax assets and liabilities, included in “other assets” and “other liabilities” on the consolidated balance sheets, are as follows: July 1, July 2, 2017 2016 (Thousands) Deferred tax assets: Federal, state and foreign net operating loss carry-forwards $ 269,576 $ 94,892 Inventories valuation 30,330 20,635 Receivables valuation 9,209 9,188 Various accrued liabilities and other 46,922 35,929 356,037 160,644 Less — valuation allowances (241,687) (63,694) 114,350 96,950 Deferred tax liabilities: Depreciation and amortization of property, plant and equipment (152,101) (99,154) Net deferred tax liabilities $ (37,751) $ (2,204) In addition to net deferred tax liabilities, the Company also has $90.4 million and $98.2 million of income tax related deferred charges included as a component of “other assets” in the consolidated balance sheets as of July 1, 2017, and July 2, 2016, respectively that are the result of a fiscal 2016 business restructuring in EMEA. The change in valuation allowances in fiscal 2017 from fiscal 2016 was primarily due to a net increase of $173.5 million as a result of the acquisition of PF and other tax attributes recorded for which the Company does not expect to realize a benefit. As of July 1, 2017, the Company had foreign net operating and capital loss carry-forwards of approximately $1.07 billion, of which $17.3 million will expire during fiscal 2018 and 2019, substantially all of which have full valuation allowances, $61.2 million have expiration dates ranging from fiscal 2020 to 2037, and the remaining $986.3 million have no expiration date. The carrying value of the Company’s foreign net operating and capital loss carry-forwards is dependent upon the Company’s ability to generate sufficient future taxable income in certain foreign tax jurisdictions. In addition, the Company considers historic levels and types of income or losses, expectations and risk associated with estimates of future taxable income and ongoing prudent and feasible tax planning strategies in assessing the need for valuation allowances. Estimated liabilities for unrecognized tax benefits are included in “accrued expenses and other” and “other liabilities” on the consolidated balance sheets. These contingent liabilities relate to various tax matters that result from uncertainties in the application of complex income tax regulations in the numerous jurisdictions in which the Company operates. The change in such liabilities during fiscal 2017 was primarily due to the acquisition of PF and recognition of newly identified unrecognized tax benefits as presented in the following table. As of July 1, 2017, unrecognized tax benefits were $106.8 million. The estimated liability for unrecognized tax benefits included accrued interest expense and penalties of $15.3 million and $13.9 million, net of applicable state tax benefits, as of the end of fiscal 2017 and 2016, respectively. Reconciliations of the beginning and ending liability balances for unrecognized tax benefits are as follows: July 1, 2017 July 2, 2016 (Thousands) Balance at beginning of year $ 58,830 $ 60,433 Additions for tax positions taken in prior periods, including interest 10,476 3,496 Reductions for tax positions taken in prior periods, including interest (5,656) (6,349) Additions for tax positions taken in current period 13,659 7,577 Reductions related to settlements with taxing authorities (203) (725) Reductions related to the lapse of applicable statutes of limitations (5,790) (13,188) Adjustments related to foreign currency translation 2,772 (212) Activity of discontinued operations 10,864 7,798 Additions from acquisitions 21,834 — Balance at end of year $ 106,786 $ 58,830 The evaluation of income tax positions requires management to estimate the ability of the Company to sustain its position and estimate the final benefit to the Company. To the extent that these estimates do not reflect the actual outcome there could be an impact on the consolidated financial statements in the period in which the position is settled, the applicable statutes of limitations expire or new information becomes available as the impact of these events are recognized in the period in which they occur. It is difficult to estimate the period in which the amount of a tax position will change as settlement may include administrative and legal proceedings whose timing the Company cannot control. The effects of settling tax positions with tax authorities and statute expirations may significantly impact the estimate for unrecognized tax benefits. Within the next twelve months, the Company estimates that approximately $23.5 million of these liabilities for unrecognized tax benefits will be settled by the expiration of the statutes of limitations or through agreement with the tax authorities for tax positions related to valuation matters and positions related to acquired entities. The expected cash payment related to the settlement of these contingencies is approximately $8.4 million . The Company conducts business globally and consequently files income tax returns in numerous jurisdictions including those listed in the following table. It is also routinely subject to audit in these and other countries. The Company is no longer subject to audit in its major jurisdictions for periods prior to fiscal 2008. The years remaining subject to audit, by major jurisdiction, are as follows: Jurisdiction Fiscal Year United States (Federal and state) 2013 - 2017 Taiwan 2012 - 2017 Hong Kong 2011 - 2017 Germany 2010 - 2017 Singapore 2008 - 2017 Belgium 2014 - 2017 United Kingdom 2009 - 2017 In connection with the sale of the TS Business during fiscal 2017, several legal entities were sold to the Buyer and post-closing tax obligations are the responsibility of the Buyer. Under the terms of the sale agreement, the Company still maintains responsibility for certain pre-closing taxes including any amounts that arise from audits or other judgments received from tax authorities. The Company believes that its current estimates related to tax reserves and unrecognized tax benefits related to the TS Business are reasonable, but future changes in facts and circumstances could results in significant changes in estimates that impact tax expense from discontinued operations in the period of change. |
Pension and retirement plan
Pension and retirement plan | 12 Months Ended |
Jul. 01, 2017 | |
Pension and retirement plan | |
Pension and retirement plans | 11. Pension and retirement plans Pension Plan The Company’s noncontributory defined benefit pension plan (the “Plan”) covers substantially all U.S. employees excluding U.S. employees of the acquired PF business. 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. Employees are eligible to participate in the Plan following the first year of service during which they worked at least 1,000 hours. The Plan provides defined benefits pursuant to a cash balance feature whereby a participant accumulates a benefit based upon a percentage of current salary, which varies with age, and interest credits. The Company uses its fiscal year end as the measurement date for determining pension expense and benefit obligations for each fiscal year. The Company also acquired a closed noncontributory defined benefit pension plan in the U.S. in connection with the PF acquisition (the “PF Plan”). The disclosures below include the Plan and the PF Plan from the date of acquisition (collectively, the “Plans”), but do not include the pension plans of certain non-U.S. subsidiaries and other defined benefit plans, which are not considered material. The following table outlines changes in benefit obligations, plan assets and the funded status of the Plans as of the end of fiscal 2017 and 2016: July 1, July 2, 2017 2016 (Thousands) Changes in benefit obligations: Benefit obligations at beginning of year $ 588,511 $ 513,406 Acquired benefit obligations 165,046 — Service cost 29,623 39,740 Interest cost 19,323 21,310 Actuarial loss 15,686 41,799 Benefits paid (46,121) (27,744) Benefit obligations at end of year $ 772,068 $ 588,511 Changes in plan assets: Fair value of plan assets at beginning of year $ 516,089 $ 484,408 Acquired plan assets 144,238 — Actual return on plan assets 51,409 19,425 Benefits paid (46,121) (27,744) Contributions 33,750 40,000 Fair value of plan assets at end of year $ 699,365 $ 516,089 Funded status of the plan recognized as a non-current liability $ (72,703) $ (72,422) Amounts recognized in accumulated other comprehensive income: Unrecognized net actuarial losses $ 234,863 $ 235,747 Unamortized prior service credits (691) (2,903) $ 234,172 $ 232,844 Other changes in plan assets and benefit obligations recognized in other comprehensive income: Net actuarial gain $ 9,744 $ 62,659 Amortization of net actuarial losses (14,440) (12,731) Amortization of prior service credits 1,573 1,573 Curtailment recognition of prior service credit 614 — $ (2,509) $ 51,501 Included in accumulated other comprehensive income at July 1, 2017, is a before tax expense of $234.9 million of net actuarial losses that have not yet been recognized in net periodic pension cost, of which $15.0 million is expected to be recognized as a component of net periodic pension cost during fiscal 2018. Also included is a before tax net benefit of $0.7 million of prior service credits that have not yet been recognized in net periodic pension costs, of which $1.6 million is expected to be recognized as a component of net periodic pension costs during fiscal 2018. In connection with the sale of the TS Business, a significant number of former employees became terminated vested employees under the Plan. If the aggregate amount of former employee withdrawals from their Plan balances reach a certain threshold during a fiscal year, then a settlement charge would be required under ASC 715 pension accounting in the period that such aggregate withdrawals exceed the threshold. Assumptions used to calculate actuarial present values of benefit obligations are as follows: 2017 2016 Discount rate 3.8 % 3.4 % The discount rate selected by the Company for the Plan reflects the current rate at which the underlying liability could be settled at the measurement date as of July 1, 2017. The estimated discount rate in fiscal 2017 and fiscal 2016 was based on the spot yield curve approach, which applies the individual spot rates from a highly rated bond yield curve to each future year’s estimated cash flows. Assumptions used to determine net benefit costs are as follows: 2017 2016 Discount rate 3.3 % 4.3 % Expected return on plan assets 8.0 % 8.3 % Components of net periodic pension cost from continuing and discontinued operations during the last three fiscal years are as follows: Years Ended July 1, July 2, June 27, 2017 2016 2015 (Thousands) Service cost $ 29,623 $ 39,740 $ 39,492 Interest cost 19,323 21,310 17,797 Expected return on plan assets (49,279) (40,285) (36,221) Amortization of prior service credits (1,573) (1,573) (1,573) Recognized net actuarial loss 14,440 12,731 13,007 Curtailment recognition of prior service credit (614) — — Net periodic pension cost $ 11,920 $ 31,923 $ 32,502 The Company made $33.8 million and $40.0 million of contributions in fiscal 2017 and fiscal 2016, respectively and expects to make approximately $16.0 million of contributions in fiscal 2018. Benefit payments are expected to be paid to Plan participants as follows for the next five fiscal years and the aggregate for the five years thereafter (in thousands): 2018 $ 59,643 2019 63,666 2020 39,692 2021 41,288 2022 45,886 2023 through 2027 262,946 The Plan’s assets are held in trust and were allocated as follows as of the measurement date at the end of fiscal 2017 and 2016: 2017 2016 Equity securities 50 % 60 % Fixed income debt securities 50 % 40 % Cash and cash equivalents — % — % The general investment objectives of the Plan are to maximize returns through a diversified investment portfolio in order to earn annualized returns that meet the long-term cost of funding the Plans pension obligations while maintaining reasonable and prudent levels of risk. The target rate of return on the Plans assets is currently 8.0%, which represents the average rate of earnings expected on the funds invested or to be invested to provide for the benefits included in the benefit obligation based upon the targeted investment allocations. This assumption has been determined by combining expectations regarding future rates of return for the investment portfolio along with the historical and expected distribution of investments by asset class and the historical rates of return for each of those asset classes. The mix of equity securities is typically diversified to obtain a blend of domestic and international investments covering multiple industries. The Plan’s assets do not include any material investments in Avnet common stock. The Plans investments in debt securities are also diversified across both public and private fixed income securities with varying maturities. As of July 1, 2017, the Company’s target allocation for the Plans investment portfolio is for equity securities, both domestic and international, to represent approximately 60% of the portfolio. The majority of the remaining portfolio of investments is to be invested in fixed income debt securities with various maturities. The following table sets forth the fair value of the Plans investments as of July 1, 2017 : Level 1 Level 2 Level 3 Total (Thousands) Cash and cash equivalents $ 1,481 $ — $ — $ 1,481 Equities: U.S. common stocks — 221,003 — 221,003 International common stocks — 117,392 — 117,392 Fixed Income: U.S. government agencies — 105,227 — 105,227 International government agencies — 14,366 — 14,366 U.S. and international corporate bonds — 214,024 — 214,024 Other — 25,872 — 25,872 Total $ 1,481 $ 697,884 $ — $ 699,365 The following table sets forth the fair value of the Plan’s investments as of July 2, 2016: Level 1 Level 2 Level 3 Total (Thousands) Cash and cash equivalents $ 497 $ — $ — $ 497 Equities: U.S. common stocks — 204,125 — 204,125 International common stocks — 102,193 — 102,193 Fixed Income: U.S. government agencies — 76,991 — 76,991 U.S. corporate bonds — 112,262 — 112,262 Other — 20,021 — 20,021 Total $ 497 $ 515,592 $ — $ 516,089 The fair value of the Plan’s investments in equity and fixed income investments are stated at unit value, or the equivalent of net asset value, which is a practical expedient for estimating the fair values of those investments. Each of these investments may be redeemed daily without notice and there were no material unfunded commitments as of July 1, 2017 . The fixed income investments provide a steady return with medium volatility and assist with capital preservation and income generation. The equity investments have higher expected volatility and return than the fixed income investments. |
Operating leases
Operating leases | 12 Months Ended |
Jul. 01, 2017 | |
Operating leases | |
Operating leases | 12. Operating leases The Company leases many of its operating facilities and is also committed under lease agreements for transportation and operating equipment. Rent expense charged to operating expenses during the last three fiscal years is as follows: Years Ended July 1, July 2, June 27, 2017 2016 2015 (Thousands) Rent expense under operating leases $ 71,814 $ 66,702 $ 72,713 The aggregate future minimum operating lease commitments, principally for office and warehouse space, in fiscal 2018 through 2022 and thereafter, are as follows (in thousands): 2018 $ 66,513 2019 52,434 2020 40,956 2021 31,487 2022 26,821 Thereafter 68,735 Total $ 286,946 |
Stock-based compensation
Stock-based compensation | 12 Months Ended |
Jul. 01, 2017 | |
Stock-based compensation | |
Stock-based compensation | 13. Stock-based compensation The Company measures all stock-based payments at fair value and recognizes related expense within operating expenses in the consolidated statements of operations over the requisite service period (generally the vesting period). During fiscal 2017, 2016, and 2015, the Company recorded stock-based compensation expense of $53.9 million, $56.9 million, and $62.0 million, respectively, for all forms of stock-based compensation awards. Included in the fiscal 2017 expense was $6.2 million of stock-based compensation related to discontinued operations and the divestiture of the TS discussed further in Note 3. Stock plan At July 1, 2017, the Company had 10.6 million shares of common stock reserved for stock-based payments, which consisted of 2.7 million shares for unvested or unexercised stock options, 6.2 million shares available for stock-based awards under plans approved by shareholders, 1.5 million shares for restricted stock units and performance share units granted but not yet vested, and 0.2 million shares available for future purchases under the Company’s Employee Stock Purchase Plan. Stock options Service based stock option grants have a contractual life of ten years, vest in 25% increments on each anniversary of the grant date, commencing with the first anniversary, and require an exercise price of 100% of the fair market value of common stock at the date of grant. Stock-based compensation expense associated with all stock options during fiscal 2017, 2016 and 2015 was $5.8 million, $4.2 million and $3.6 million, respectively. The fair value of stock options is estimated as of the date of grant using the Black-Scholes model based on the assumptions in the following table. The assumption for the expected term is based on evaluations of historical and expected future employee exercise behavior. The risk-free interest rate is based on U.S. Treasury rates as of the date of grant with maturity dates approximately equal to the expected term at the grant date. The historical volatility of Avnet’s common stock is used as the basis for the volatility assumption. The Company estimates dividend yield based upon expectations of future dividends compared to the market value of the Company’s stock as of the grant date. Years Ended July 1, July 2, June 27, 2017 2016 2015 Expected term (years) 6.0 6.0 6.0 Risk-free interest rate 1.9 % 1.7 % 1.9 % Weighted average volatility 27.9 % 29.7 % 31.6 % Dividend yield 1.5 % 1.9 % 1.8 % The following is a summary of the changes in outstanding options for fiscal 2017: Weighted Weighted Average Average Remaining Shares Exercise Price Contractual Life Outstanding at July 2, 2016 2,325,397 $ 34.61 66 Months Granted 1,516,430 45.50 113 Months Exercised (817,598) 31.85 34 Months Forfeited or expired (309,723) 43.58 46 Months Outstanding at July 1, 2017 2,714,506 $ 40.51 82 Months Exercisable at July 1, 2017 1,035,743 $ 33.38 51 Months The weighted-average grant-date fair values of stock options granted during fiscal 2017, 2016 and 2015 were $9.46, $10.69 and $11.68, respectively. At July 1, 2017, the aggregate intrinsic value of all outstanding stock option awards was $6.2 million and all exercisable stock option awards was $6.2 million. The following is a summary of the changes in non-vested stock options for the fiscal year 2017: Weighted Average Grant-Date Shares Fair Value Non-vested stock options at July 2, 2016 919,151 $ 11.20 Granted 1,516,430 9.46 Vested (561,403) 5.92 Forfeited (195,415) 9.81 Non-vested stock options at July 1, 2017 1,678,763 $ 11.56 As of July 1, 2017, there was $8.9 million of total unrecognized compensation cost related to stock options, which is expected to be recognized over a weighted-average period of 2.1 years. The total fair value of stock options vested, as of the vesting dates, during fiscal 2017, 2016 and 2015 were $3.3 million, $4.6 million and $4.0 million, respectively. Cash received from stock option exercises during fiscal 2017, 2016, and 2015 totaled $25.2 million, $0.8 million, and $2.6 million, respectively. The impact of these cash receipts is included in “Other, net” within financing activities in the accompanying consolidated statements of cash flows. Restricted stock units Delivery of restricted stock units, and the associated compensation expense, is recognized over the vesting period and is generally subject to the employee’s continued service to the Company, except for employees who are retirement eligible under the terms of the restricted stock units. As of July 1, 2017, 1.0 million shares previously awarded have not yet vested. Stock-based compensation expense associated with restricted stock units was $42.4 million, $43.9 million and $50.5 million for fiscal years 2017, 2016 and 2015, respectively. The following is a summary of the changes in non-vested restricted stock units during fiscal 2017: Weighted Average Grant-Date Shares Fair Value Non-vested restricted stock units at July 2, 2016 1,720,219 $ 39.12 Granted 1,082,795 40.70 Vested (1,408,706) 38.77 Forfeited (378,280) $ 40.09 Non-vested restricted stock units at July 1, 2017 1,016,028 $ 40.93 As of July 1, 2017, there was $19.9 million of total unrecognized compensation expense related to non-vested restricted stock units, which is expected to be recognized over a weighted-average period of 2.1 years. The total fair value of restricted stock units vested during fiscal 2017, 2016 and 2015 was $54.6 million, $42.5 million and $36.2 million, respectively. Performance share units Certain eligible employees, including Avnet’s executive officers, may receive a portion of their long-term stock-based compensation through the performance share program, which allows for the vesting of shares based upon achievement of certain market and performance-based criteria (“Performance Share Program”). The Performance Share Program provides for the vesting to each grantee of a number of shares of Avnet’s common stock at the end of a three-year performance period based upon the Company’s achievement of certain performance goals established by the Compensation Committee of the Board of Directors for each Performance Share Program three-year performance period. The performance goals consist of a combination of measures including economic profit, return on capital employed and total shareholder return. During each of fiscal 2017, 2016 and 2015, the Company granted 0.2 million performance share units. The actual amount of performance share units vested at the end of each three-year period is measured based upon the actual level of achievement of the defined performance goals and can range from 0% to 200% of the award grant. During fiscal 2017, 2016 and 2015, the Company recognized stock-based compensation expense associated with the Performance Share Program of $4.6 million, $7.6 million and $6.8 million, respectively. |
Commitments and contingencies
Commitments and contingencies | 12 Months Ended |
Jul. 01, 2017 | |
Commitments and contingencies | |
Commitments and contingencies | 14. 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 is also currently subject to various pending and potential legal matters and investigations relating to compliance with governmental laws and regulations, including import/export and environmental matters. 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 early 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. A s of July 1, 2017 and July 2, 2016, the Company had aggregate estimated liabilities of $14.2 million and $20.2 million, respectively, classified within accrued expenses and other for such compliance-related matters that were reasonably estimable as of such dates. |
Earnings per share
Earnings per share | 12 Months Ended |
Jul. 01, 2017 | |
Earnings per share | |
Earnings per share | 15. Earnings per share Years Ended July 1, July 2, June 27, 2017 2016 2015 (Thousands, except per share data) Numerator: Income from continuing operations 263,351 390,909 485,375 Income from discontinued operations $ 261,927 $ 115,622 $ 86,538 Net income 525,278 506,531 571,913 Denominator: Weighted average common shares for basic earnings per share 127,032 130,858 136,688 Net effect of dilutive stock based compensation awards 1,619 2,315 2,103 Weighted average common shares for diluted earnings per share 128,651 133,173 138,791 Basic earnings per share - continuing operations 2.07 2.99 3.55 Basic earnings per share - discontinued operations 2.06 0.88 0.63 Basic earnings per share $ 4.13 $ 3.87 $ 4.18 Diluted earnings per share - continuing operations 2.05 2.93 3.50 Diluted earnings per share - discontinued operations 2.03 0.87 0.62 Diluted earnings per share $ 4.08 $ 3.80 $ 4.12 Stock options excluded from earnings per share calculation due to anti-dilutive effect 1,038 378 — |
Additional cash flow informatio
Additional cash flow information | 12 Months Ended |
Jul. 01, 2017 | |
Additional cash flow information | |
Additional cash flow information | 16. Additional cash flow information The “Other, net” component of non-cash and other reconciling items within operating activities from continuing operations in the consolidated statements of cash flows consisted of the following during the last three fiscal years: July 1, July 2, June 27, 2017 2016 2015 (Thousands) Provision for doubtful accounts receivable $ 10,741 $ 7,776 $ 11,558 Periodic pension cost 10,071 23,386 23,544 Other, net 8,292 (1,783) 20,862 Total $ 29,104 $ 29,379 $ 55,964 Interest and income taxes paid for continuing and discontinued operations during the last three fiscal years were as follows: Years Ended July 1, July 2, June 27, 2017 2016 2015 (Thousands) Interest $ 116,085 $ 119,941 $ 113,476 Income taxes (1) 413,482 92,993 125,403 (1) Fiscal 2017 includes certain tax payments related to the gain on sale of discontinued operations. 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 $6.5 million, $12.8 million and $8.3 million as of July 1, 2017, July 2, 2016, and June 27, 2015, respectively. |
Segment information
Segment information | 12 Months Ended |
Jul. 01, 2017 | |
Segment information | |
Segment information | 17. Segment information Prior to the sale of the TS Business, the Company’s reportable segments were the Electronics Marketing and Technology Solutions operating groups. As a result of the sale of the TS Business and the acquisition of Premier Farnell, during the fourth quarter of fiscal 2017, the Company changed its reportable segments to the Electronic Components (“EC”) and Premier Farnell (“PF”) operating groups. EC markets and sells semiconductors and interconnect, passive and electromechanical devices and integrated components to a diverse customer base serving many end-markets. PF distributes electronic components and related products to the electronic system design community utilizing multi-channel sales and marketing resources. Years Ended July 1, July 2, June 27, 2017 2016 2015 (Millions) Sales: Electronic Components $ 16,474.1 $ 16,740.6 $ 17,655.3 Premier Farnell 965.9 — — $ 17,440.0 $ 16,740.6 $ 17,655.3 Operating income (loss): Electronic Components $ 661.0 $ 728.7 $ 832.6 Premier Farnell 99.8 — — 760.8 728.7 832.6 Corporate (1) (107.5) (101.2) (119.6) Restructuring, integration and other expenses (Note 18) (137.4) (44.8) (41.8) Amortization of acquired intangible assets and other (54.5) (9.8) (18.1) $ 461.4 $ 572.9 $ 653.1 Assets: Electronic Components $ 7,126.0 $ 7,163.1 $ 6,706.1 Premier Farnell 1,489.6 — — Corporate (1) 1,084.0 608.8 693.3 Discontinued operations — 3,467.9 3,400.6 $ 9,699.6 $ 11,239.8 $ 10,800.0 Capital expenditures: Electronic Components $ 81.6 $ 100.9 $ 100.1 Premier Farnell 15.7 — — Corporate (1) 23.1 36.5 33.3 $ 120.4 $ 137.4 $ 133.4 Depreciation & amortization expense: Electronic Components $ 64.4 $ 44.9 $ 45.2 Premier Farnell 53.7 — — Corporate (1) 37.3 34.7 37.0 $ 155.4 $ 79.6 $ 82.2 Sales, by geographic area: Americas (2) $ 5,163.9 $ 4,801.3 $ 5,154.5 EMEA (3) 5,912.9 5,103.0 5,053.0 Asia/Pacific (4) 6,363.2 6,836.3 7,447.8 $ 17,440.0 $ 16,740.6 $ 17,655.3 Property, plant and equipment, net, by geographic area: Americas (5) $ 296.1 $ 303.3 $ 240.0 EMEA (6) 186.1 129.6 129.8 Asia/Pacific 37.4 20.3 19.8 $ 519.6 $ 453.2 $ 389.6 (1) Corporate is not a reportable segment and represents certain centrally incurred overhead expenses and assets that are not included in the EC and PF measures of profitability or assets. Corporate amounts represent a reconciling item between segment measures and total Company amounts reported in the consolidated financial statements. (2) Includes sales in the United States of $4.80 billion, $ 4.48 billion and $4.79 billion for fiscal 2017, 2016 and 2015, respectively. (3) Includes sales in Germany and the United Kingdom of $2.29 billion and $589.8 million, respectively, for fiscal 2017. Includes sales in Germany and the United Kingdom of $2.13 billion and $378.1 million, respectively, for fiscal 2016. Includes sales in Germany and the United Kingdom of $2.10 billion and $412.8 million, respectively, for fiscal 2015. (4) Includes sales of $2.18 billion, $2.45 billion and $928.4 million in Taiwan, China (including Hong Kong) and Singapore, respectively, for fiscal 2017. Includes sales of $2.86 billion, $2.44 billion and $903.0 million in Taiwan, China (including Hong Kong) and Singapore, respectively, for fiscal 2016. Includes sales of $3.42 billion, $2.43 billion and $951.9 million in Taiwan, China (including Hong Kong) and Singapore, respectively, for fiscal 2015. (5) Includes property, plant and equipment, net, of $289.1 million, $297.1 million and $237.0 million in the United States for fiscal 2017, 2016 and 2015, respectively. (6) Includes property, plant and equipment, net, of $85.6 million, $52.1 million and $39.8 million in Germany, UK and Belgium, respectively, for fiscal 2017. Fiscal 2016 includes property, plant and equipment, net, of $72.5 million in Germany and $40.0 million in Belgium. Fiscal 2015 includes property, plant and equipment, net, of $70.2 million in Germany and $41.1 million in Belgium. Listed in the table below are the Company’s major product categories and the related sales for each of the past three fiscal years: Years Ended July 1, July 2, June 27, 2017 2016 2015 (Millions) Semiconductors $ 13,537.9 $ 13,978.0 $ 14,886.3 Interconnect, passive & electromechanical (IP&E) 3,397.9 2,539.9 2,594.7 Other 504.2 222.7 174.3 $ 17,440.0 $ 16,740.6 $ 17,655.3 |
Restructuring expenses
Restructuring expenses | 12 Months Ended |
Jul. 01, 2017 | |
Restructuring expenses | |
Restructuring expenses | 18. Restructuring expenses Fiscal 2017 During fiscal 2017, the Company took certain actions in an effort to integrate acquisitions and to reduce future operating expenses. Restructuring expenses are included as a component of restructuring, integration and other expenses in the consolidated statements of operations. The activity related to the restructuring liabilities from continuing operations established during fiscal 2017 is presented in the following table: Facility Asset Severance Exit Costs Impairments Other Total (Thousands) Fiscal 2017 restructuring expenses $ 36,073 $ 668 $ 3,478 $ 1,500 $ 41,719 Cash payments (20,118) (596) — (1,500) (22,214) Non-cash amounts (3,939) — (3,478) — (7,417) Other, principally foreign currency translation 170 4 — — 174 Balance at July 1, 2017 $ 12,186 $ 76 $ — $ — $ 12,262 Severance expense recorded in fiscal 2017 related to the reduction, or planned reduction, of over 350 employees, primarily in executive management, operations, sales and business support functions. Facility exit costs primarily consist of liabilities for remaining lease obligations for exited facilities. Asset impairments relate to the impairment of long-lived assets as a result of the underlying restructuring activities. Other restructuring costs related primarily to other miscellaneous restructuring and exit costs. The Company expects the majority of the remaining amounts to be paid by the end of fiscal 2018. Of the $41.7 million in restructuring expenses recorded during fiscal 2017, $28.4 million related to EC, $3.0 million related to PF and $10.3 million related to Corporate executive and business support functions Fiscal 2016 During fiscal 2016, the Company incurred restructuring expenses related to various restructuring actions intended to reduce future operating expenses. The fiscal 2017 activity related to the restructuring liabilities from continuing operations established during fiscal 2016 is presented in the following table: Facility Severance Exit Costs Other Total (Thousands) Balance at July 2, 2016 $ 9,854 $ 1,130 $ 3 $ 10,987 Cash payments (5,742) (289) (3) (6,034) Changes in estimates, net (1,574) (550) — (2,124) Non-cash amounts — — — — Other, principally foreign currency translation (37) (1) — (38) Balance at July 1, 2017 $ 2,501 $ 290 $ — $ 2,791 As of July 1, 2017, management expects the majority of the remaining severance, and facility exit liabilities related to fiscal 2016 restructuring actions to be utilized by the end of fiscal 2018. Fiscal 2015 and prior As of July 2, 2016, there was $4.5 million of restructuring liabilities remaining related to restructuring actions taken in fiscal years 2015 and prior, the majority of which relates to facility exit costs. The remaining balance for such historical restructuring liabilities as of July 1, 2017 was $1.9 million, which is expected to be paid by the end of fiscal 2018. |
Valuation And Qualifying Acccou
Valuation And Qualifying Acccounts | 12 Months Ended |
Jul. 01, 2017 | |
Valuation and Qualifying Accounts | |
Valuation and Qualifying Accounts | SCHEDULE II AVNET, INC. AND SUBSIDIARIES VALUATION AND QUALIFYING ACCOUNTS Years Ended July 1, 2017, July 2, 2016, and June 27, 2015 Balance at Charged to Charged to Balance at Beginning of Expense Other End of Account Description Period (Income) Accounts Deductions Period (Thousands) Fiscal 2017 Allowance for doubtful accounts $ 27,448 $ 10,741 $ 14,361 (a) $ (5,278) (b) $ 47,272 Valuation allowance on tax loss carry-forwards 63,694 4,477 (c) 173,516 (d) — 241,687 Fiscal 2016 Allowance for doubtful accounts 35,629 $ 7,776 $ — $ (15,957) (b) 27,448 Valuation allowance on tax loss carry-forwards 60,834 (412) (e) 3,272 (f) — 63,694 Fiscal 2015 Allowance for doubtful accounts 34,912 11,558 — (10,841) (b) 35,629 Valuation allowance on tax loss carry-forwards 126,441 (43,178) (g) (22,429) (h) — 60,834 (a) Amount relates to increases to the allowance for doubtful accounts from acquisition and divestiture activity and such amounts were not charged to other accounts (b) Uncollectible receivables written off. (c) Primarily related to an increase of $8.8 million due to the establishment of valuation allowances and a reduction of $4.0 million due to a release in valuation allowances. (d) Primarily related to the acquisition of PF and other tax attributes recorded for which the Company does not expect to realize a benefit. (e) Represents a reduction primarily due to the release of a valuation allowance. (f) Primarily related to impact of foreign currency exchange rates on valuation allowances previously established in various foreign jurisdictions. (g) Represents a reduction primarily due to the release of a valuation allowance in EMEA, of which $56.5 million impacted the effective tax rate offset by $8.6 million, which impacted deferred taxes associated with the release of the valuation allowance. (h) Primarily related to rate changes on valuation allowances previously established in various foreign jurisdictions. |
Summary of significant accoun28
Summary of significant accounting policies (Policies) | 12 Months Ended |
Jul. 01, 2017 | |
Summary of significant accounting policies | |
Basis of presentation | Basis of presentation — The accompanying consolidated financial statements include the accounts of Avnet, Inc. and all of its majority-owned and controlled subsidiaries (the “Company” or “Avnet”). All intercompany and intracompany accounts and transactions have been eliminated. Unless indicated otherwise, the information in the Notes to the consolidated financial statements relates to the Company's continuing operations and does not include the results of discontinued operations. |
Reclassifications | Reclassifications — Certain prior period amounts have been reclassified to conform to the current-period presentation including the presentation of discontinued operations. |
Fiscal year | Fiscal year — The Company operates on a “52/53 week” fiscal year, which ends on the Saturday closest to June 30th. Fiscal 2017 and 2015 contain 52 weeks compared to 53 weeks in fiscal 2016. Unless otherwise noted, all references to “fiscal” or any other “year” shall mean the Company’s fiscal year. |
Management estimates | Management estimates — The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities, reported amounts of sales and expenses and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements. Actual results could differ materially from those estimates. |
Cash and cash equivalents | Cash and cash equivalents — The Company considers all highly liquid investments with an original maturity of three months or less including money market funds to be cash equivalents. |
Inventories | Inventories — Inventories, comprised principally of finished goods, are stated at the lower of cost or net realizable value, whichever is lower. The Company regularly reviews the cost of inventory against its estimated net realizable value, considering historical experience and any contractual rights of return, stock rotations, obsolescence allowances or price protections provided by the Company’s suppliers, and records a lower of cost or net realizable value write-down if any inventories have a cost in excess of their estimated net realizable value. The Company does not incorporate any non-contractual protections when estimating the net realizable value of its inventories. |
Depreciation and amortization | Depreciation, amortization and useful lives — The Company reports property, plant and equipment at cost, less accumulated depreciation. Cost includes the price paid to acquire or construct the assets, required installation costs, interest capitalized during the construction period, and any expenditure that substantially adds to the value of or substantially extends the useful life of an existing asset. Additionally, the Company capitalizes qualified costs related to software obtained or developed for internal use. Software obtained for internal use has generally been enterprise-level business operations, logistics and finance software that is customized to meet the Company’s specific operational requirements. The Company begins depreciation and amortization (“depreciation”) for property, plant and equipment when an asset is both in the location and condition for its intended use. Property, plant, and equipment is depreciated using the straight-line method over its estimated useful lives. The estimated useful lives for property, plant, and equipment are typically as follows: buildings — 30 years; machinery, fixtures and equipment — 2-10 years; information technology hardware and software — 2-10 years; and leasehold improvements — over the applicable minimum lease term or economic useful life if shorter. The Company amortizes intangible assets acquired in business combinations using the straight-line method over the estimated economic useful lives of the intangible assets from the date of acquisition, which is generally between 5-10 years. |
Long-lived assets | Long-lived assets impairment — Long-lived assets, including property, plant and equipment and intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. For purposes of recognition and measurement of an impairment loss, long-lived assets are grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities (“asset group”). An impairment is recognized when the estimated undiscounted cash flows expected to result from the use of the asset group and its eventual disposition is less than its carrying amount. An impairment is measured as the amount by which an asset group’s carrying value exceeds its estimated fair value. The Company considers a long-lived asset to be abandoned when it has ceased use of such abandoned asset and if the Company has no intent to use or repurpose the asset in the future. The Company continually evaluates the carrying value and the remaining economic useful life of long-lived assets and will adjust the carrying value and remaining useful life if and when appropriate. |
Goodwill | Goodwill — Goodwill represents the excess of the purchase price of acquired businesses over the estimated fair value assigned to the individual assets acquired and liabilities assumed. The Company does not amortize goodwill, but instead tests goodwill for impairment at least annually in the fourth quarter and, if necessary, records any impairment resulting from such goodwill impairment testing as a component of operating expenses. Impairment testing is performed at the reporting unit level, and the Company had four reporting units as of the fiscal 2017 annual goodwill impairment testing date defined as each of the three regions (Americas, EMEA, and Asia Pacific) within the Company’s Electronic Components operating segment and the Premier Farnell operating segment. The Company will perform an interim impairment test between required annual tests 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. In performing goodwill impairment testing, the Company may first make a qualitative assessment of whether it is more-likely-than-not that a reporting unit’s fair value is less than its carrying value. If the qualitative assessment indicates it is more-likely-than-not that a reporting unit’s fair value is not greater than its carrying value, the Company must perform a quantitative impairment test. The Company defines the fair value of a reporting unit as the price that would be received to sell the reporting unit as a whole in an orderly transaction between market participants as of the impairment test date. To determine the fair value of a reporting unit, the Company primarily uses the income approach methodology of valuation, which includes the discounted cash flow method, and the market approach methodology of valuation, which considers values of comparable businesses to estimate the fair value of the Company’s reporting units. Significant management judgment is required when estimating the fair value of the Company’s reporting units from a market participant perspective including the forecasting of future operating results, the discount rates and expected future growth rates used in the discounted cash flow method of valuation, and in the selection of comparable businesses and related market multiples that are used in the market approach. If the estimated fair value of a reporting unit exceeds the carrying value assigned to that reporting unit, goodwill is not impaired. If the estimated fair value of a reporting unit is less than the carrying value assigned to that reporting unit, then a goodwill impairment loss is measured based on such difference. |
Foreign currency translation | Foreign currency translation — The assets and liabilities of foreign operations are translated into U.S. Dollars at the exchange rates in effect at the balance sheet date, with the related translation adjustments reported as a separate component of shareholders’ equity and comprehensive income. Results of operations are translated using the average exchange rates prevailing throughout the period. Transactions denominated in currencies other than the functional currency of the Avnet subsidiaries that are party to the transactions are remeasured at exchange rates in effect at the balance sheet date or upon settlement of the transaction. Gains and losses from such remeasurements are recorded in the consolidated statements of operations as a component of “other (expense) income, net.” |
Income taxes | Income taxes — The Company follows the asset and liability method of accounting for income taxes. Deferred income tax assets and liabilities are recognized for the estimated future tax impact of differences between the consolidated financial statement carrying amounts of assets and liabilities and their respective tax bases. Deferred income tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred income tax assets and liabilities of a change in tax rates is recognized within income tax expense in the period in which the new rate is enacted. Based upon historical and estimated levels of future taxable income and analysis of other key factors, the Company may increase or decrease a valuation allowance against its deferred tax assets, as deemed necessary, to state such assets at their estimated net realizable value. The Company establishes contingent liabilities for potentially unfavorable outcomes of positions taken on certain tax matters. These liabilities are based on management’s assessment of whether a tax benefit is more likely than not to be sustained upon examination by the relevant tax authorities. There may be differences between the estimated and actual outcomes of these matters that may result in future changes in estimates to such unrecognized tax benefits. To the extent such changes in estimates are required; the Company’s effective tax rate may potentially fluctuate as a result. In accordance with the Company’s accounting policies, accrued interest and penalties related to unrecognized tax benefits are recorded as a component of income tax expense. |
Self-insurance | Self-insurance — In the U.S., the Company is primarily self-insured for medical, workers’ compensation, and general, product and automobile liability costs; however, the Company also has stop-loss insurance policies in place to limit the Company’s exposure to individual and aggregate claims made. Liabilities for these programs are estimated based upon outstanding claims and claims estimated to be incurred but not yet reported based upon historical loss experience. These estimates are subject to variability due to changes in trends of losses for outstanding claims and incurred but not reported claims, including external factors such as the number of and cost of claims, benefit level changes and claim settlement patterns. |
Revenue recognition | Revenue recognition — Revenue from the sale of products or services is recognized when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the sales price is fixed or determinable and collectability is reasonably assured. Generally, these criteria are met upon either shipment or delivery to customers, depending upon the sales terms. In addition, the Company has certain contractual relationships with its customers and suppliers whereby Avnet assumes an agency relationship in the sales transaction primarily related to the performance of fulfillment logistics services to deliver product for which the Company is not the primary obligor. In such agency arrangements, the Company recognizes the net fee associated with serving as an agent within sales with no associated cost of sales. Revenues are recorded net of discounts, customer rebates and estimated returns. Provisions are made for discounts and customer rebates, which are primarily timing or volume specific, and are estimated based on historical trends and anticipated customer buying patterns. Provisions for returns and other sales adjustments are estimated based on historical sales returns experience, credit memo experience and other known factors. |
Vendor allowances and consideration | Vendor allowances and consideration — Consideration received from suppliers for price protection, product rebates, marketing/promotional activities, or any other programs are recorded when earned under the terms and conditions of such supplier programs as adjustments to product costs or selling, general and administrative expenses depending upon the nature and contractual requirements related to the consideration received. Some of these supplier programs require management to make estimates and may extend over one or more reporting periods. |
Comprehensive income | Comprehensive income — Comprehensive income (loss) represents net income for the year adjusted for certain changes in shareholders’ equity. Accumulated comprehensive income items impacting comprehensive income (loss) includes foreign currency translation and the impact of the Company’s pension liability adjustments, net of tax. |
Share-based compensation | Stock-based compensation — The Company measures stock-based payments at fair value and generally recognizes the associated operating expense in the consolidated statement of operations over the requisite service period (see Note 13). A stock-based payment is considered vested for accounting expense attribution purposes when the employee’s retention of the award is no longer contingent on providing continued service. Accordingly, the Company recognizes all stock-based compensation expense for awards granted to retirement eligible employees over the period from the grant date to the date retirement eligibility is achieved, if less than the stated requisite service period. The expense attribution approach for retirement eligible employees does not affect the overall amount of compensation expense recognized, but instead accelerates the recognition of expense. |
Restructuring and exit activities | Restructuring and exit activities — The determination of when the Company accrues for involuntary termination benefits under restructuring plans depends on whether the termination benefits are provided under an on-going benefit arrangement or under a one-time benefit arrangement. The Company accounts for on-going benefit arrangements in accordance with ASC 712 Nonretirement Postemployment Benefits and accounts for one-time benefit arrangements in accordance with ASC 420 Exit or Disposal Cost Obligations . If applicable, the Company records such costs into operating expense over the terminated employee’s future service period beyond any minimum retention period. Other costs associated with restructuring or exit activities may include contract termination costs including operating leases and impairments of long-lived assets, which are expensed in accordance with ASC 420 and ASC 360 Exit or Disposal Cost Obligations and Property, Plant and Equipment , respectively. |
Business Combinations | Business combinations — The Company accounts for business acquisitions using the acquisition method of accounting and records any identifiable definite-lived intangible assets separate from goodwill. Intangible assets are recorded at their fair value based on estimates as of the date of acquisition. Goodwill is recorded as the residual amount of the purchase price consideration less the fair value assigned to the individual identifiable assets acquired and liabilities assumed as of the date of acquisition. Contingent consideration, which represents an obligation of the acquirer to transfer additional assets or equity interests to the former owner as part of the purchase price if specified future events occur or conditions are met, is accounted for at the acquisition date fair value either as a liability or as equity depending on the terms of the acquisition agreement. |
Concentration of credit risk | Concentration of credit risk — Financial instruments that potentially subject the Company to a concentration of credit risk principally consist of cash and cash equivalents, marketable securities and trade accounts receivable. The Company invests its excess cash primarily in overnight time deposits and institutional money market funds with highly rated financial institutions. To reduce credit risk, management performs ongoing credit evaluations of its customers’ financial condition and, in some instances, has obtained credit insurance coverage to reduce such risk. The Company maintains reserves for potential credit losses from customers, but has not historically experienced material losses related to individual customers or groups of customers in any particular end market or geographic area. |
Fair value of financial instruments | Fair value — The Company measures financial assets and liabilities at fair value based upon an exit price, representing the amount that would be received from the sale of an asset or paid to transfer a liability, in an orderly transaction between market participants. ASC 820, Fair Value Measurements , requires inputs used in valuation techniques for measuring fair value on a recurring or non-recurring basis be assigned to a hierarchical level as follows: Level 1 are observable inputs that reflect quoted prices for identical assets or liabilities in active markets. Level 2 are observable market-based inputs or unobservable inputs that are corroborated by market data and Level 3 are unobservable inputs that are not corroborated by market data. During fiscal 2017, 2016, and 2015, there were no transfers of assets measured at fair value between the three levels of the fair value hierarchy. The carrying amounts of the Company’s financial instruments, including cash and cash equivalents, receivables and accounts payable approximate their fair values at July 1, 2017 due to the short-term nature of these assets and liabilities. At July 1, 2017, and July 2, 2016, the Company had $208.3 million and $8.7 million, respectively, of cash equivalents that were measured at fair value based upon Level 1 criteria. The Company’s investments in marketable securities were also measured at fair value based upon Level 1 criteria. See Note 8 for discussion of the fair value of the Company’s long-term debt and Note 11 for a discussion of the fair value of the Company’s pension plan assets. |
Derivative financial instruments | Derivative financial instruments — See Note 4 for discussion of the Company’s accounting policies related to derivative financial instruments |
Marketable securities | Marketable securities — The Company determines the classification of investments in marketable securities at the time of acquisition and reevaluates such designation at each reporting period. The Company has classified its investment in marketable securities as trading with any realized or unrealized changes in fair value being classified within other (expense) income, net in the consolidated statements of operations. See Note 3 for further discussion about marketable securities. |
Accounts receivable securitization | Accounts receivable securitization — The Company has an accounts receivable securitization program whereby the Company sells certain receivables and retains a subordinated interest and servicing rights to those receivables. The securitization program does not qualify for off balance sheet sales accounting and is accounted for as a secured financing as discussed further in Note 8. |
Recently adopted accounting pronouncements | Recently adopted accounting pronouncements — In January 2017, the FASB issued Accounting Standards Update 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (“ASU 2017-04”). The amendments in ASU 2017-04 simplify the subsequent measurement of goodwill by eliminating “step two” from the quantitative goodwill impairment test. Under the new guidance, an entity performs its annual, or interim, goodwill impairment test by comparing the estimated fair value of a reporting unit with its carrying amount and recognizes an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s estimated fair value, not to exceed the carrying amount of goodwill allocated to the reporting unit. Additionally, an entity should consider income tax effects from any tax-deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. An entity will continue to have the option to perform a qualitative assessment to determine if a quantitative impairment test is necessary. The same one-step impairment test will be applied to goodwill at all reporting units, even those with zero or negative carrying amounts. Entities will be required to disclose the amount of goodwill at reporting units with zero or negative carrying amounts. ASU 2017-04 is effective for annual reporting periods, including interim periods within those periods, beginning after December 15, 2019, with early adoption permitted. The Company has early adopted this standard during the fourth quarter of fiscal 2017 in connection with its required annual goodwill impairment test, which did not have an impact on its consolidated financial statements. In August 2016, the FASB issued Accounting Standards Update No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”). The update provides guidance for eight specific cash flow classification issues with respect to how certain cash receipts and cash payments are presented and classified within the statement of cash flows in an effort to reduce existing diversity in practice. The standard is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. ASU 2016-15 should be applied using a retrospective transition method to each period presented. The Company early adopted ASU 2016-15 during fiscal 2017, which had no impact on its consolidated statements of cash flows. |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Jul. 01, 2017 | |
Acquisitions | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | Preliminary Acquisition Method Values (Thousands) Cash $ 46,354 Trade and other receivables, net 187,303 Inventories 328,037 Property, plant and equipment 52,621 Intangible assets 295,112 Total identifiable assets acquired $ 909,427 Accounts payable, accrued liabilities and other current liabilities $ 160,724 Short-term debt 242,814 Other long-term liabilities 140,431 Total identifiable liabilities acquired $ 543,969 Net identifiable assets acquired 365,458 Goodwill 475,862 Net assets acquired $ 841,320 |
Schedule of pro forma and historical results | Years Ended July 1, July 2, 2017 2016 (Millions, except per share data) Pro forma sales (unaudited) $ 17,818 $ 18,102 Pro forma net income (unaudited) 297 398 Pro forma net income per fully diluted share (unaudited) 2.31 2.99 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 12 Months Ended |
Jul. 01, 2017 | |
Discontinued Operations and Disposal Groups | |
Schedule of assets and liabilities classified as held for sale | July 2, 2016 (Thousands) Receivables, less allowances of $39,356 $ 2,205,213 Inventories 296,310 Prepaid and other current assets 67,359 Total current assets of discontinued operations 2,568,882 Property, plant and equipment, net 159,449 Goodwill 659,368 Intangible assets, net 55,826 Other assets 24,424 Total assets of discontinued operations $ 3,467,949 Accounts payable $ 1,643,004 Accrued expenses and other 161,225 Total current liabilities of discontinued operations 1,804,229 Other Long-term liabilities 43,769 Total liabilities of discontinued operations $ 1,847,998 |
Schedule of summarized results of discontinued operations | Years Ended July 1, July 2, June 27, 2017 2016 2015 (Thousands) Sales $ 5,432,140 $ 9,478,682 $ 10,269,338 Cost of sales 4,883,945 8,519,117 9,286,353 Gross profit 548,195 959,565 982,985 Selling, general and administrative expenses 430,003 710,251 759,501 Restructuring, integration and other expenses 7,280 34,557 48,957 Operating income 110,912 214,757 174,527 Interest and other expense, net (24,291) (22,261) (33,073) Income from discontinued operations before income taxes 86,621 192,496 141,454 Income tax expense 47,050 76,874 54,916 Income from discontinued operations, net of taxes 39,571 115,622 86,538 Gain on sale of discontinued operations, net of taxes 222,356 — — Income from discontinued operations, net of taxes $ 261,927 $ 115,622 $ 86,538 |
Derivative financial instrume31
Derivative financial instruments (Tables) | 12 Months Ended |
Jul. 01, 2017 | |
Derivative financial instruments | |
Schedule of derivative instruments in the balance sheet | July 1, July 2, 2017 2016 (Thousands) Forward foreign currency exchange contracts not receiving hedge accounting treatment recorded in: Other current assets $ 7,297 $ 9,681 Accrued expenses 4,142 6,369 |
Schedule of gain (loss) on derivatives | Years Ended July 1, July 2, June 27, 2017 2016 2015 (Thousands) Net derivative financial instrument (loss) gain $ (8,624) $ 274 $ (3,139) |
Shareholders' equity (Tables)
Shareholders' equity (Tables) | 12 Months Ended |
Jul. 01, 2017 | |
Shareholders' equity | |
Schedule of Accumulated Other Comprehensive Income (Loss) | July 1, July 2, June 27, 2017 2016 2015 (Thousands) Accumulated translation adjustments and other $ (86,647) $ (362,228) $ (316,873) Accumulated pension liability adjustments, net of income taxes (157,219) (158,547) (124,165) Total accumulated other comprehensive (loss) income $ (243,866) $ (520,775) $ (441,038) |
Property plant and equipment,33
Property plant and equipment, net (Tables) | 12 Months Ended |
Jul. 01, 2017 | |
Property plant and equipment, net | |
Summary of Property, plant and equipment | July 1, 2017 July 2, 2016 (Thousands) Buildings $ 136,846 $ 70,882 Machinery, fixtures and equipment 215,155 218,203 Information technology hardware and software 630,352 607,969 Leasehold improvements 99,208 129,156 Depreciable property, plant and equipment, gross 1,081,561 1,026,210 Accumulated depreciation (667,700) (665,055) Depreciable property, plant and equipment, net 413,861 361,155 Land 41,627 37,492 Construction in progress 64,087 54,562 Property, plant and equipment, net $ 519,575 $ 453,209 |
Goodwill and long-lived assets
Goodwill and long-lived assets (Tables) | 12 Months Ended |
Jul. 01, 2017 | |
Goodwill and long-lived assets | |
Change in goodwill balances by reportable segment | Electronic Premier Components Farnell Total (Thousands) Gross goodwill $ 1,666,962 $ — $ 1,666,962 Accumulated impairment (1,045,110) — (1,045,110) Carrying value at July 2, 2016 621,852 — 621,852 Acquisitions 12,818 475,862 488,680 Foreign currency translation 378 37,437 37,815 Carrying value at July 1, 2017 $ 635,048 $ 513,299 $ 1,148,347 Gross goodwill $ 1,680,158 $ 513,299 $ 2,193,457 Accumulated impairment (1,045,110) — (1,045,110) Carrying value at July 1, 2017 $ 635,048 $ 513,299 $ 1,148,347 |
Company's identifiable acquired intangible assets | July 1, 2017 July 2, 2016 Acquired Accumulated Net Book Acquired Accumulated Net Book Amount Amortization Value Amount Amortization Value (Thousands) Customer related $ 277,865 $ (79,578) $ 198,287 $ 47,980 $ (34,515) $ 13,465 Trade name 46,915 (6,720) 40,195 3,746 (2,718) 1,028 Technology and other 50,369 (11,560) 38,809 12,356 (4,278) 8,078 $ 375,149 $ (97,858) $ 277,291 $ 64,082 $ (41,511) $ 22,571 |
Estimated future amortization expense | Fiscal Year 2018 77,884 2019 75,887 2020 74,164 2021 35,118 2022 10,834 Thereafter 3,404 Total $ 277,291 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Jul. 01, 2017 | |
Debt | |
Short-term debt | July 1, 2017 July 2, 2016 July 1, 2017 July 2, 2016 Interest Rate Carrying Balance Bank credit facilities and other 2.27 % 4.62 % $ 50,113 $ 122,599 Accounts receivable securitization program — 0.93 % — 730,000 Notes due September 2016 — 6.63 % — 300,000 Short-term debt $ 50,113 $ 1,152,599 |
Long-term debt | July 1, 2017 July 2, 2016 July 1, 2017 July 2, 2016 Interest Rate Carrying Balance Revolving credit facilities: Accounts receivable securitization program 1.53 % — $ 142,000 $ — Credit Facility 2.77 % 1.72 % 99,970 150,000 Notes due: June 2020 5.88 % 5.88 % 300,000 300,000 December 2021 3.75 % — 300,000 — December 2022 4.88 % 4.88 % 350,000 350,000 April 2026 4.63 % 4.63 % 550,000 550,000 Other long-term debt 1.36 % 1.92 % 642 1,551 Long-term debt before discount and debt issuance costs 1,742,612 1,351,551 Discount and debt issuance costs - unamortized (13,400) (12,347) Long-term debt $ 1,729,212 $ 1,339,204 |
Aggregate debt maturities | Aggregate debt maturities for the next five fiscal years and thereafter are as follows (in thousands): 2018 $ 50,113 2019 242,234 2020 300,292 2021 80 2022 300,006 Thereafter 900,000 Subtotal 1,792,725 Discount and debt issuance costs - unamortized (13,400) Total debt $ 1,779,325 |
Accrued expenses and other (Tab
Accrued expenses and other (Tables) | 12 Months Ended |
Jul. 01, 2017 | |
Accrued expenses and other | |
Schedule of accrued expenses and other | July 1, 2017 July 2, 2016 (Thousands) Accrued salaries and benefits $ 205,979 $ 208,624 Accrued operating costs 104,747 47,562 Accrued interest and banking costs 47,481 22,125 Accrued restructuring costs 16,996 15,499 Accrued income taxes 61,552 32,976 Accrued property, plant and equipment 6,491 12,801 Accrued other 98,777 55,301 Total accrued expenses and other $ 542,023 $ 394,888 |
Income taxes (Tables)
Income taxes (Tables) | 12 Months Ended |
Jul. 01, 2017 | |
Income taxes | |
Components of income tax expense ("tax provision") | Years Ended July 1, 2017 July 2, 2016 June 27, 2015 (Thousands) Current: Federal $ (45,351) $ (16,934) $ 5,497 State and local 4,209 (33) (1,959) Foreign 106,441 92,033 60,082 Total current taxes 65,299 75,066 63,620 Deferred: Federal (30,025) 5,573 39,905 State and local (3,934) 1,351 6,774 Foreign 15,713 5,114 (24,163) Total deferred taxes (18,246) 12,038 22,516 Income tax expense $ 47,053 $ 87,104 $ 86,136 |
Reconciliations of the federal statutory tax rate to the effective tax rates | Years Ended July 1, 2017 July 2, 2016 June 27, 2015 U.S. federal statutory rate 35.0 % 35.0 % 35.0 % State and local income taxes, net of federal benefit (1.7) 0.3 0.8 Foreign tax rates, net of valuation allowances (23.5) (12.7) (11.1) Establishment/(release) of valuation allowance, net of U.S. tax expense 1.3 (1.7) (9.0) Change in contingency reserves 3.6 (2.5) 0.9 Tax audit settlements 0.1 (0.7) (2.9) Other, net 0.4 0.5 1.4 Effective tax rate - continuing operations 15.2 % 18.2 % 15.1 % |
Components of deferred tax assets and liabilities | July 1, July 2, 2017 2016 (Thousands) Deferred tax assets: Federal, state and foreign net operating loss carry-forwards $ 269,576 $ 94,892 Inventories valuation 30,330 20,635 Receivables valuation 9,209 9,188 Various accrued liabilities and other 46,922 35,929 356,037 160,644 Less — valuation allowances (241,687) (63,694) 114,350 96,950 Deferred tax liabilities: Depreciation and amortization of property, plant and equipment (152,101) (99,154) Net deferred tax liabilities $ (37,751) $ (2,204) |
Reconciliation of the beginning and ending liability balances for unrecognized tax benefits | July 1, 2017 July 2, 2016 (Thousands) Balance at beginning of year $ 58,830 $ 60,433 Additions for tax positions taken in prior periods, including interest 10,476 3,496 Reductions for tax positions taken in prior periods, including interest (5,656) (6,349) Additions for tax positions taken in current period 13,659 7,577 Reductions related to settlements with taxing authorities (203) (725) Reductions related to the lapse of applicable statutes of limitations (5,790) (13,188) Adjustments related to foreign currency translation 2,772 (212) Activity of discontinued operations 10,864 7,798 Additions from acquisitions 21,834 — Balance at end of year $ 106,786 $ 58,830 |
Years remaining subject to audit, by major jurisdiction | Jurisdiction Fiscal Year United States (Federal and state) 2013 - 2017 Taiwan 2012 - 2017 Hong Kong 2011 - 2017 Germany 2010 - 2017 Singapore 2008 - 2017 Belgium 2014 - 2017 United Kingdom 2009 - 2017 |
Pension and retirement plans (T
Pension and retirement plans (Tables) | 12 Months Ended |
Jul. 01, 2017 | |
Defined Benefit Plan Disclosure [Line Items] | |
Table outlining changes in benefit obligations, plan assets and the funded status of the Plan | July 1, July 2, 2017 2016 (Thousands) Changes in benefit obligations: Benefit obligations at beginning of year $ 588,511 $ 513,406 Acquired benefit obligations 165,046 — Service cost 29,623 39,740 Interest cost 19,323 21,310 Actuarial loss 15,686 41,799 Benefits paid (46,121) (27,744) Benefit obligations at end of year $ 772,068 $ 588,511 Changes in plan assets: Fair value of plan assets at beginning of year $ 516,089 $ 484,408 Acquired plan assets 144,238 — Actual return on plan assets 51,409 19,425 Benefits paid (46,121) (27,744) Contributions 33,750 40,000 Fair value of plan assets at end of year $ 699,365 $ 516,089 Funded status of the plan recognized as a non-current liability $ (72,703) $ (72,422) Amounts recognized in accumulated other comprehensive income: Unrecognized net actuarial losses $ 234,863 $ 235,747 Unamortized prior service credits (691) (2,903) $ 234,172 $ 232,844 Other changes in plan assets and benefit obligations recognized in other comprehensive income: Net actuarial gain $ 9,744 $ 62,659 Amortization of net actuarial losses (14,440) (12,731) Amortization of prior service credits 1,573 1,573 Curtailment recognition of prior service credit 614 — $ (2,509) $ 51,501 |
Weighted average assumptions used to calculate actuarial present values of benefit obligations | 2017 2016 Discount rate 3.8 % 3.4 % |
Weighted average assumptions used to determine net benefit costs | 2017 2016 Discount rate 3.3 % 4.3 % Expected return on plan assets 8.0 % 8.3 % |
Components of net periodic pension costs | Years Ended July 1, July 2, June 27, 2017 2016 2015 (Thousands) Service cost $ 29,623 $ 39,740 $ 39,492 Interest cost 19,323 21,310 17,797 Expected return on plan assets (49,279) (40,285) (36,221) Amortization of prior service credits (1,573) (1,573) (1,573) Recognized net actuarial loss 14,440 12,731 13,007 Curtailment recognition of prior service credit (614) — — Net periodic pension cost $ 11,920 $ 31,923 $ 32,502 |
Benefit payments expected to be paid to Plan participants | Benefit payments are expected to be paid to Plan participants as follows for the next five fiscal years and the aggregate for the five years thereafter (in thousands): 2018 $ 59,643 2019 63,666 2020 39,692 2021 41,288 2022 45,886 2023 through 2027 262,946 |
Plan's assets allocation | 2017 2016 Equity securities 50 % 60 % Fixed income debt securities 50 % 40 % Cash and cash equivalents — % — % |
Pension Plan | |
Defined Benefit Plan Disclosure [Line Items] | |
Fair value of Plan investments | The following table sets forth the fair value of the Plans investments as of July 1, 2017 : Level 1 Level 2 Level 3 Total (Thousands) Cash and cash equivalents $ 1,481 $ — $ — $ 1,481 Equities: U.S. common stocks — 221,003 — 221,003 International common stocks — 117,392 — 117,392 Fixed Income: U.S. government agencies — 105,227 — 105,227 International government agencies — 14,366 — 14,366 U.S. and international corporate bonds — 214,024 — 214,024 Other — 25,872 — 25,872 Total $ 1,481 $ 697,884 $ — $ 699,365 The following table sets forth the fair value of the Plan’s investments as of July 2, 2016: Level 1 Level 2 Level 3 Total (Thousands) Cash and cash equivalents $ 497 $ — $ — $ 497 Equities: U.S. common stocks — 204,125 — 204,125 International common stocks — 102,193 — 102,193 Fixed Income: U.S. government agencies — 76,991 — 76,991 U.S. corporate bonds — 112,262 — 112,262 Other — 20,021 — 20,021 Total $ 497 $ 515,592 $ — $ 516,089 |
Operating leases (Tables)
Operating leases (Tables) | 12 Months Ended |
Jul. 01, 2017 | |
Leases [Abstract] | |
Rent expense charged to operations | Years Ended July 1, July 2, June 27, 2017 2016 2015 (Thousands) Rent expense under operating leases $ 71,814 $ 66,702 $ 72,713 |
Minimum operating lease commitments principally for buildings | The aggregate future minimum operating lease commitments, principally for office and warehouse space, in fiscal 2018 through 2022 and thereafter, are as follows (in thousands): 2018 $ 66,513 2019 52,434 2020 40,956 2021 31,487 2022 26,821 Thereafter 68,735 Total $ 286,946 |
Stock-based compensation (Table
Stock-based compensation (Tables) | 12 Months Ended |
Jul. 01, 2017 | |
Stock-based compensation | |
Summary of the assumptions used to estimate the fair value of stock options | Years Ended July 1, July 2, June 27, 2017 2016 2015 Expected term (years) 6.0 6.0 6.0 Risk-free interest rate 1.9 % 1.7 % 1.9 % Weighted average volatility 27.9 % 29.7 % 31.6 % Dividend yield 1.5 % 1.9 % 1.8 % |
Summary of the changes in outstanding options | Weighted Weighted Average Average Remaining Shares Exercise Price Contractual Life Outstanding at July 2, 2016 2,325,397 $ 34.61 66 Months Granted 1,516,430 45.50 113 Months Exercised (817,598) 31.85 34 Months Forfeited or expired (309,723) 43.58 46 Months Outstanding at July 1, 2017 2,714,506 $ 40.51 82 Months Exercisable at July 1, 2017 1,035,743 $ 33.38 51 Months |
Summary of the changes in non-vested stock options | Weighted Average Grant-Date Shares Fair Value Non-vested stock options at July 2, 2016 919,151 $ 11.20 Granted 1,516,430 9.46 Vested (561,403) 5.92 Forfeited (195,415) 9.81 Non-vested stock options at July 1, 2017 1,678,763 $ 11.56 |
Summary of the changes in non-vested restricted incentive shares | Weighted Average Grant-Date Shares Fair Value Non-vested restricted stock units at July 2, 2016 1,720,219 $ 39.12 Granted 1,082,795 40.70 Vested (1,408,706) 38.77 Forfeited (378,280) $ 40.09 Non-vested restricted stock units at July 1, 2017 1,016,028 $ 40.93 |
Earnings per share (Tables)
Earnings per share (Tables) | 12 Months Ended |
Jul. 01, 2017 | |
Earnings per share | |
Basic and diluted earnings per share calculation | Years Ended July 1, July 2, June 27, 2017 2016 2015 (Thousands, except per share data) Numerator: Income from continuing operations 263,351 390,909 485,375 Income from discontinued operations $ 261,927 $ 115,622 $ 86,538 Net income 525,278 506,531 571,913 Denominator: Weighted average common shares for basic earnings per share 127,032 130,858 136,688 Net effect of dilutive stock based compensation awards 1,619 2,315 2,103 Weighted average common shares for diluted earnings per share 128,651 133,173 138,791 Basic earnings per share - continuing operations 2.07 2.99 3.55 Basic earnings per share - discontinued operations 2.06 0.88 0.63 Basic earnings per share $ 4.13 $ 3.87 $ 4.18 Diluted earnings per share - continuing operations 2.05 2.93 3.50 Diluted earnings per share - discontinued operations 2.03 0.87 0.62 Diluted earnings per share $ 4.08 $ 3.80 $ 4.12 Stock options excluded from earnings per share calculation due to anti-dilutive effect 1,038 378 — |
Additional cash flow informat42
Additional cash flow information (Tables) | 12 Months Ended |
Jul. 01, 2017 | |
Additional cash flow information | |
Noncash and other reconciling items within operating activities | July 1, July 2, June 27, 2017 2016 2015 (Thousands) Provision for doubtful accounts receivable $ 10,741 $ 7,776 $ 11,558 Periodic pension cost 10,071 23,386 23,544 Other, net 8,292 (1,783) 20,862 Total $ 29,104 $ 29,379 $ 55,964 |
Interest and income taxes paid | Years Ended July 1, July 2, June 27, 2017 2016 2015 (Thousands) Interest $ 116,085 $ 119,941 $ 113,476 Income taxes (1) 413,482 92,993 125,403 Fiscal 2017 includes certain tax payments related to the gain on sale of discontinued operations. |
Segment information (Tables)
Segment information (Tables) | 12 Months Ended |
Jul. 01, 2017 | |
Segment information | |
Table of the Company's segments and the related financial information for each | Years Ended July 1, July 2, June 27, 2017 2016 2015 (Millions) Sales: Electronic Components $ 16,474.1 $ 16,740.6 $ 17,655.3 Premier Farnell 965.9 — — $ 17,440.0 $ 16,740.6 $ 17,655.3 Operating income (loss): Electronic Components $ 661.0 $ 728.7 $ 832.6 Premier Farnell 99.8 — — 760.8 728.7 832.6 Corporate (1) (107.5) (101.2) (119.6) Restructuring, integration and other expenses (Note 18) (137.4) (44.8) (41.8) Amortization of acquired intangible assets and other (54.5) (9.8) (18.1) $ 461.4 $ 572.9 $ 653.1 Assets: Electronic Components $ 7,126.0 $ 7,163.1 $ 6,706.1 Premier Farnell 1,489.6 — — Corporate (1) 1,084.0 608.8 693.3 Discontinued operations — 3,467.9 3,400.6 $ 9,699.6 $ 11,239.8 $ 10,800.0 Capital expenditures: Electronic Components $ 81.6 $ 100.9 $ 100.1 Premier Farnell 15.7 — — Corporate (1) 23.1 36.5 33.3 $ 120.4 $ 137.4 $ 133.4 Depreciation & amortization expense: Electronic Components $ 64.4 $ 44.9 $ 45.2 Premier Farnell 53.7 — — Corporate (1) 37.3 34.7 37.0 $ 155.4 $ 79.6 $ 82.2 Sales, by geographic area: Americas (2) $ 5,163.9 $ 4,801.3 $ 5,154.5 EMEA (3) 5,912.9 5,103.0 5,053.0 Asia/Pacific (4) 6,363.2 6,836.3 7,447.8 $ 17,440.0 $ 16,740.6 $ 17,655.3 Property, plant and equipment, net, by geographic area: Americas (5) $ 296.1 $ 303.3 $ 240.0 EMEA (6) 186.1 129.6 129.8 Asia/Pacific 37.4 20.3 19.8 $ 519.6 $ 453.2 $ 389.6 (1) Corporate is not a reportable segment and represents certain centrally incurred overhead expenses and assets that are not included in the EC and PF measures of profitability or assets. Corporate amounts represent a reconciling item between segment measures and total Company amounts reported in the consolidated financial statements. (2) Includes sales in the United States of $4.80 billion, $ 4.48 billion and $4.79 billion for fiscal 2017, 2016 and 2015, respectively. (3) Includes sales in Germany and the United Kingdom of $2.29 billion and $589.8 million, respectively, for fiscal 2017. Includes sales in Germany and the United Kingdom of $2.13 billion and $378.1 million, respectively, for fiscal 2016. Includes sales in Germany and the United Kingdom of $2.10 billion and $412.8 million, respectively, for fiscal 2015. (4) Includes sales of $2.18 billion, $2.45 billion and $928.4 million in Taiwan, China (including Hong Kong) and Singapore, respectively, for fiscal 2017. Includes sales of $2.86 billion, $2.44 billion and $903.0 million in Taiwan, China (including Hong Kong) and Singapore, respectively, for fiscal 2016. Includes sales of $3.42 billion, $2.43 billion and $951.9 million in Taiwan, China (including Hong Kong) and Singapore, respectively, for fiscal 2015. (5) Includes property, plant and equipment, net, of $289.1 million, $297.1 million and $237.0 million in the United States for fiscal 2017, 2016 and 2015, respectively. (6) Includes property, plant and equipment, net, of $85.6 million, $52.1 million and $39.8 million in Germany, UK and Belgium, respectively, for fiscal 2017. Fiscal 2016 includes property, plant and equipment, net, of $72.5 million in Germany and $40.0 million in Belgium. Fiscal 2015 includes property, plant and equipment, net, of $70.2 million in Germany and $41.1 million in Belgium. |
Table of the Company's major product categories and the related sales for each | Years Ended July 1, July 2, June 27, 2017 2016 2015 (Millions) Semiconductors $ 13,537.9 $ 13,978.0 $ 14,886.3 Interconnect, passive & electromechanical (IP&E) 3,397.9 2,539.9 2,594.7 Other 504.2 222.7 174.3 $ 17,440.0 $ 16,740.6 $ 17,655.3 |
Restructuring expenses (Tables)
Restructuring expenses (Tables) | 12 Months Ended |
Jul. 01, 2017 | |
Fiscal Year 2017 Restructuring Liabilities | |
Restructuring Cost and Reserve [Line Items] | |
Activity related to the restructuring reserves | Facility Asset Severance Exit Costs Impairments Other Total (Thousands) Fiscal 2017 restructuring expenses $ 36,073 $ 668 $ 3,478 $ 1,500 $ 41,719 Cash payments (20,118) (596) — (1,500) (22,214) Non-cash amounts (3,939) — (3,478) — (7,417) Other, principally foreign currency translation 170 4 — — 174 Balance at July 1, 2017 $ 12,186 $ 76 $ — $ — $ 12,262 |
Fiscal Year 2016 Restructuring Liabilities | |
Restructuring Cost and Reserve [Line Items] | |
Activity related to the restructuring reserves | Facility Severance Exit Costs Other Total (Thousands) Balance at July 2, 2016 $ 9,854 $ 1,130 $ 3 $ 10,987 Cash payments (5,742) (289) (3) (6,034) Changes in estimates, net (1,574) (550) — (2,124) Non-cash amounts — — — — Other, principally foreign currency translation (37) (1) — (38) Balance at July 1, 2017 $ 2,501 $ 290 $ — $ 2,791 |
Summary of significant accoun45
Summary of significant accounting policies (Details) $ in Millions | 12 Months Ended | ||
Jul. 01, 2017USD ($)item | Jul. 02, 2016USD ($) | Jun. 27, 2015USD ($) | |
Property, Plant and Equipment [Line Items] | |||
Fiscal year | 364 days | 371 days | 364 days |
Number of reporting units | item | 4 | ||
number of regions | item | 3 | ||
Fair value assets transfers level 1 to level 2 | $ 0 | $ 0 | $ 0 |
Fair value assets transfers level 2 to level 1 | 0 | 0 | 0 |
Fair value assets transfers into and out of level 3, net | $ 0 | 0 | $ 0 |
Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Intangible asset, useful life | 5 years | ||
Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Intangible asset, useful life | 10 years | ||
Level 1 | |||
Property, Plant and Equipment [Line Items] | |||
Fair value of Cash equivalents recorded based upon level 1 | $ 208.3 | $ 8.7 | |
Building | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 30 years | ||
Machinery Fixtures And Equipment | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 10 years | ||
Machinery Fixtures And Equipment | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 2 years | ||
Information Technology Hardware and Software | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 10 years | ||
Information Technology Hardware and Software | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 2 years |
Acquisitions (PF Acquisition) (
Acquisitions (PF Acquisition) (Details) $ in Thousands | Oct. 17, 2016USD ($) | Jul. 01, 2017USD ($) | Jul. 01, 2017USD ($) | Jul. 02, 2016USD ($) | Jun. 27, 2015USD ($) | Oct. 17, 2016£ / shares | Oct. 17, 2016USD ($) |
Business Acquisition [Line Items] | |||||||
Operating income | $ 461,400 | $ 572,912 | $ 653,146 | ||||
Assets Acquired and Liabilities Assumed | |||||||
Cash | $ 46,354 | ||||||
Trade and other receivable, net | 187,303 | ||||||
Inventories | 328,037 | ||||||
Property, plant and equipment | 52,621 | ||||||
Intangible assets | 295,112 | ||||||
Total identifiable assets acquired | 909,427 | ||||||
Accounts payable, accrued liabilities and other current liabilities | 160,724 | ||||||
Short-term debt | 242,814 | ||||||
Other long-term liabilities | 140,431 | ||||||
Total identifiable liabilities assumed | (543,969) | ||||||
Net identifiable assets acquired | 365,458 | ||||||
Goodwill | $ 1,148,347 | 1,148,347 | $ 621,852 | 475,862 | |||
Net assets acquired | 841,320 | ||||||
PF | |||||||
Business Acquisition [Line Items] | |||||||
Business acquisition revenue | 965,900 | ||||||
Cash consideration paid | $ 841,000 | ||||||
Business Acquisition, Share Price | £ / shares | £ 1.85 | ||||||
debt assumed | 242,800 | ||||||
Allocation of purchase price adjustment to goodwill | 21,100 | ||||||
Allocation of purchase price adjustment to property, plant and equipment | 3,600 | ||||||
Allocation of purchase price adjustment to inventory | 6,600 | ||||||
Allocation of purchase price adjustment to other long-term liabilities | 10,100 | ||||||
Allocation of purchase price adjustment to accounts payable, accrued liabilities and other current liabilities | $ 21,200 | ||||||
PF | |||||||
Business Acquisition [Line Items] | |||||||
Operating income | 22,000 | ||||||
Assets Acquired and Liabilities Assumed | |||||||
Trade receivables | 160,400 | ||||||
Goodwill acquired expected to be tax deductible | $ 10,000 | ||||||
PF | Restructuring Integration And Other Expenses | |||||||
Business Acquisition [Line Items] | |||||||
Acquisition costs | 19,000 | ||||||
PF | Foreign Currency Economic Hedging Costs | |||||||
Business Acquisition [Line Items] | |||||||
Acquisition costs | $ 45,000 |
Acquisitions (PF Acquisition Pr
Acquisitions (PF Acquisition Pro Forma) (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |
Jul. 01, 2017 | Jul. 02, 2016 | |
Pro Forma Results For Years Ended | ||
Pro forma sales (unaudited) | $ 17,818 | $ 18,102 |
Pro forma net income (unaudited) | $ 297 | $ 398 |
Pro forma net income per fully diluted share (unaudited) | $ 2.31 | $ 2.99 |
Discontinued Operations - Consi
Discontinued Operations - Consideration (Details) - USD ($) $ in Thousands, shares in Millions | 1 Months Ended | 12 Months Ended | |
Feb. 25, 2017 | Jul. 01, 2017 | Jul. 02, 2016 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Gain on sale of discontinued operation | $ 222,356 | ||
Prepaid and other current assets | 253,765 | $ 73,786 | |
Gain on sale reclassified out of accumulated comprehensive income | (181,465) | ||
First trading securities sales restriction (in months) | 6 months | ||
Sales restriction percentage | 50.00% | ||
Second trading securities sales restriction (in months) | 12 months | ||
Disposal Group, Held-for-sale, Not Discontinued Operations | TS Business | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Consideration in sale of business | $ 2,860,000 | ||
Cash consideration in sale of business | $ 2,610,000 | ||
Shares consideration in sale of business | 2.8 | ||
Value of shares received as consideration in sale of business | $ 247,200 | ||
Gain on sale of discontinued operation | 222,356 | ||
Disposal Group, Held-for-sale, Not Discontinued Operations | TS Business | Other Operating Income (Expense) | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Trading Securities, Unrealized Holding Gain | $ 34,100 |
Discontinued Operations - Econo
Discontinued Operations - Economic Hedge (Details) - USD ($) $ in Millions | 1 Months Ended | |
Feb. 25, 2017 | Jul. 01, 2017 | |
Maximum | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Business sale length of contract for certain services | 2 years | |
Equity Contract | Designated as Hedging Instrument | Fair Value Hedging | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative, Notional Amount | $ 247 |
Discontinued Operations - Opera
Discontinued Operations - Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 01, 2017 | Jul. 02, 2016 | Jun. 27, 2015 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Income from discontinued operations, net of tax | $ 39,571 | $ 115,622 | $ 86,538 |
Gain on sale of discontinued operations, net of tax | 222,356 | ||
Net income from discontinued operations | 261,927 | 115,622 | 86,538 |
Disposal Group, Held-for-sale, Not Discontinued Operations | TS Business | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Revenues discontinued operations | 5,432,140 | 9,478,682 | 10,269,338 |
Cost of sales | 4,883,945 | 8,519,117 | 9,286,353 |
Gross profit | 548,195 | 959,565 | 982,985 |
Selling, general and administrative expenses | 430,003 | 710,251 | 759,501 |
Restructuring, integration and other expenses | 7,280 | 34,557 | 48,957 |
Operating income | 110,912 | 214,757 | 174,527 |
Interest and other expense, net | (24,291) | (22,261) | (33,073) |
Income from discontinued operations before income taxes | 86,621 | 192,496 | 141,454 |
Income tax expense discontinued operations | 47,050 | 76,874 | 54,916 |
Income from discontinued operations, net of tax | 39,571 | 115,622 | 86,538 |
Gain on sale of discontinued operations, net of tax | 222,356 | ||
Net income from discontinued operations | 261,927 | 115,622 | 86,538 |
Disposal Group, Held-for-sale, Not Discontinued Operations | TS Business | Selling, General and Administrative Expenses | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Corporate expenses | $ 34,900 | $ 47,300 | $ 48,900 |
Discontinued Operations - Asset
Discontinued Operations - Assets and Liabilities (Details) - USD ($) $ in Thousands | Jul. 02, 2016 | Jun. 27, 2015 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Total current assets of discontinued operations | $ 2,568,882 | |
Total current liabilities of discontinued operations | 1,804,229 | |
Disposal Group, Held-for-sale, Not Discontinued Operations | TS Business | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Receivables, less allowances of $39,356 | 2,205,213 | |
Allowance for doubtful accounts receivable | 39,356 | |
Inventories | 296,310 | |
Prepaid and other current assets | 67,359 | |
Total current assets of discontinued operations | 2,568,882 | |
Property, plant and equipment, net | 159,449 | |
Goodwill | 659,368 | |
Intangible assets, net | 55,826 | |
Other assets | 24,424 | |
Total assets of discontinued operations | 3,467,949 | $ 3,400,600 |
Accounts payable | 1,643,004 | |
Accrued expenses and other | 161,225 | |
Total current liabilities of discontinued operations | 1,804,229 | |
Other long-term liabilities | 43,769 | |
Total liabilities of discontinued operations | $ 1,847,998 |
Derivative financial instrume52
Derivative financial instruments Textuals (Details) - USD ($) | 12 Months Ended | |
Jul. 01, 2017 | Jul. 02, 2016 | |
Derivatives, Fair Value [Line Items] | ||
Forward exchange contracts, maximum maturities | 60 days | |
Not Designated as Hedging Instrument | Foreign Exchange Forward | Other Current Assets | ||
Derivative fair value | ||
Derivative assets fair value | $ 7,297,000 | $ 9,681,000 |
Not Designated as Hedging Instrument | Foreign Exchange Forward | Accrued Expenses | ||
Derivative fair value | ||
Derivative liabilities fair value | 4,142,000 | $ 6,369,000 |
Not Designated as Hedging Instrument | Equity securities | Foreign Exchange Forward | Accrued Expenses | ||
Derivative fair value | ||
Derivative liabilities fair value | $ 34,000,000 |
Derivative financial instrume53
Derivative financial instruments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 01, 2017 | Jul. 02, 2016 | Jun. 27, 2015 | |
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative, Gain (Loss) on Derivative, Net | $ (8,624) | $ 274 | $ (3,139) |
Foreign Exchange Forward | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Average length of time of Foreign exchange contracts | 56 days | 55 days | |
Other expenses, net | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative, Gain (Loss) on Derivative, Net | $ (35,000) | ||
Equity securities | Other expenses, net | Not Designated as Hedging Instrument | Foreign Exchange Forward | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative, Gain (Loss) on Derivative, Net | $ (34,000) |
Shareholders' equity (Details)
Shareholders' equity (Details) - USD ($) $ in Thousands | Jul. 01, 2017 | Jul. 02, 2016 | Jun. 27, 2015 |
Illustration of accumulated balances of comprehensive income | |||
Accumulated translation adjustments and other | $ (86,647) | $ (362,228) | $ (316,873) |
Accumulated pension liability adjustments, net of income taxes | (157,219) | (158,547) | (124,165) |
Total accumulated other comprehensive (loss) income | $ (243,866) | $ (520,775) | $ (441,038) |
Shareholders' equity (Share rep
Shareholders' equity (Share repurchase program textuals) (Details) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions | 12 Months Ended | |||
Jul. 01, 2017 | Jul. 02, 2016 | Jun. 27, 2015 | Feb. 15, 2017 | |
Shareholders' equity | ||||
Authorized repurchase of common stock under Share Repurchase Program | $ 1,750,000 | |||
Shares repurchased during period (in shares) | 6.4 | |||
Stock Repurchased And Retired During Period Price Per Share | $ 43.41 | |||
Cost of repurchase | $ 275,900 | |||
Aggregate number of shares repurchased since inception (in shares) | 37.7 | |||
Aggregate cost of shares repurchased since inception | $ 1,350,000 | |||
Remaining authorized repurchase amount | $ 399,100 | |||
Cash dividends paid per common share | $ 0.70 | $ 0.68 | $ 0.64 | |
Dividends paid on common stock | $ 88,657 | $ 88,594 | $ 87,330 |
Property plant and equipment,56
Property plant and equipment, net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 01, 2017 | Jul. 02, 2016 | Jun. 27, 2015 | |
Summary of Property, plant and equipment | |||
Depreciable property, plant and equipment, gross | $ 1,081,561 | $ 1,026,210 | |
Accumulated depreciation | (667,700) | (665,055) | |
Total Property, plant and equipment, net | 519,575 | 453,209 | $ 389,600 |
Depreciable property, plant and equipment, net | 413,861 | 361,155 | |
Land | 41,627 | 37,492 | |
Construction in progress | 64,087 | 54,562 | |
Depreciation and amortization expense | 101,407 | 70,344 | $ 66,436 |
Building | |||
Summary of Property, plant and equipment | |||
Depreciable property, plant and equipment, gross | 136,846 | 70,882 | |
Machinery Fixtures And Equipment | |||
Summary of Property, plant and equipment | |||
Depreciable property, plant and equipment, gross | 215,155 | 218,203 | |
Information Technology Hardware and Software | |||
Summary of Property, plant and equipment | |||
Depreciable property, plant and equipment, gross | 630,352 | 607,969 | |
Leasehold Improvements | |||
Summary of Property, plant and equipment | |||
Depreciable property, plant and equipment, gross | $ 99,208 | $ 129,156 |
Property plant and equipment -
Property plant and equipment - New ERP System (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Jul. 01, 2017 | Jul. 02, 2016 | Jun. 27, 2015 | |
Change in Accounting Estimate [Line Items] | |||
Property, plant and equipment, net | $ 519,575 | $ 453,209 | $ 389,600 |
ERP System | Restructuring Integration And Other Expenses | |||
Change in Accounting Estimate [Line Items] | |||
Accelerated depreciation | $ 16,000 | ||
Service Life | ERP System | |||
Change in Accounting Estimate [Line Items] | |||
Useful life | 24 months |
Goodwill and long-lived asset58
Goodwill and long-lived assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jul. 01, 2017 | Jul. 02, 2016 | |
Carrying amount of goodwill, by reportable segment | ||
Carrying value | $ 621,852 | |
Acquisitions | 488,680 | |
Foreign currency translation | 37,815 | |
Carrying value | 1,148,347 | |
Gross Goodwill | 2,193,457 | $ 1,666,962 |
Accumulated Impairment | (1,045,110) | (1,045,110) |
Electronic Components | ||
Carrying amount of goodwill, by reportable segment | ||
Carrying value | 621,852 | |
Acquisitions | 12,818 | |
Foreign currency translation | 378 | |
Carrying value | 635,048 | |
Gross Goodwill | 1,680,158 | 1,666,962 |
Accumulated Impairment | (1,045,110) | $ (1,045,110) |
Premier Farnell | ||
Carrying amount of goodwill, by reportable segment | ||
Acquisitions | 475,862 | |
Foreign currency translation | 37,437 | |
Carrying value | 513,299 | |
Gross Goodwill | $ 513,299 |
Goodwill and long-lived asset59
Goodwill and long-lived assets Intangible Assets (Details) - USD ($) $ in Thousands | Jul. 01, 2017 | Jul. 02, 2016 |
Finite-Lived Intangible Assets [Line Items] | ||
Acquired amount | $ 375,149 | $ 64,082 |
Accumulated Amortization | (97,858) | (41,511) |
Net Book Value | 277,291 | 22,571 |
Customer related | ||
Finite-Lived Intangible Assets [Line Items] | ||
Acquired amount | 277,865 | 47,980 |
Accumulated Amortization | (79,578) | (34,515) |
Net Book Value | 198,287 | 13,465 |
Trade name | ||
Finite-Lived Intangible Assets [Line Items] | ||
Acquired amount | 46,915 | 3,746 |
Accumulated Amortization | (6,720) | (2,718) |
Net Book Value | 40,195 | 1,028 |
Other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Acquired amount | 50,369 | 12,356 |
Accumulated Amortization | (11,560) | (4,278) |
Net Book Value | $ 38,809 | $ 8,078 |
Goodwill and long-lived asset60
Goodwill and long-lived assets (Estimated Future Amortization Expense) (Details) - USD ($) $ in Thousands | Jul. 01, 2017 | Jul. 02, 2016 |
Fiscal Year: | ||
2,018 | $ 77,884 | |
2,019 | 75,887 | |
2,020 | 74,164 | |
2,021 | 35,118 | |
2,022 | 10,834 | |
Thereafter | 3,404 | |
Net Book Value | $ 277,291 | $ 22,571 |
Goodwill and long-lived asset61
Goodwill and long-lived assets Textuals (Details) $ in Thousands | 12 Months Ended | ||
Jul. 01, 2017USD ($)item | Jul. 02, 2016USD ($) | Jun. 27, 2015USD ($) | |
Goodwill and long-lived assets | |||
Impairment of goodwill | $ 0 | $ 0 | $ 0 |
Number of reporting units | item | 4 | ||
Weighted average life of intangible assets | 4 years | ||
Intangible asset amortization expense | $ 53,953 | $ 9,246 | $ 15,755 |
Debt - short-term debt (Details
Debt - short-term debt (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jul. 01, 2017 | Jul. 02, 2016 | |
Components of short-term debt | ||
Debt, Current, Total | $ 50,113 | $ 1,152,599 |
Repayment of notes | $ 530,800 | $ 250,000 |
Bank credit facilities and other | ||
Components of short-term debt | ||
Short-term Debt, Weighted Average Interest Rate | 2.27% | 4.62% |
Short-term borrowings | $ 50,113 | $ 122,599 |
Accounts receivable securitization program | ||
Components of short-term debt | ||
stated interest rate | 0.93% | |
Current portion of long-term debt | $ 730,000 | |
Notes Due September 2016 | ||
Components of short-term debt | ||
stated interest rate | 6.63% | |
Short-term borrowings | $ 300,000 | |
Private Placement Notes | ||
Components of short-term debt | ||
Repayment of notes | $ 230,800 |
Debt - long-term debt (Details)
Debt - long-term debt (Details) - USD ($) $ in Thousands | Jul. 01, 2017 | Dec. 31, 2016 | Jul. 02, 2016 |
Debt Instrument [Line Items] | |||
Long-term debt before discount and debt issuance costs | $ 1,742,612 | $ 1,351,551 | |
Discount and debt issuance costs - unamortized | (13,400) | (12,347) | |
Long-term debt | $ 1,729,212 | $ 1,339,204 | |
Accounts receivable securitization program | |||
Debt Instrument [Line Items] | |||
Long-term debt, stated interest rate | 0.93% | ||
Notes Due September 2016 | |||
Debt Instrument [Line Items] | |||
Long-term debt, stated interest rate | 6.63% | ||
Notes Due December 2021 | |||
Debt Instrument [Line Items] | |||
Long-term debt, stated interest rate | 3.75% | ||
Revolving credit facilities | |||
Debt Instrument [Line Items] | |||
Long-term Debt, Weighted Average Interest Rate | 2.77% | 1.72% | |
Long-term debt before discount and debt issuance costs | $ 99,970 | $ 150,000 | |
Revolving credit facilities | Accounts receivable securitization program | |||
Debt Instrument [Line Items] | |||
Long-term Debt, Weighted Average Interest Rate | 1.53% | ||
Long-term debt before discount and debt issuance costs | $ 142,000 | ||
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 2021 | |||
Debt Instrument [Line Items] | |||
Long-term debt, stated interest rate | 3.75% | ||
Long-term debt before discount and debt issuance costs | $ 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 | 4.63% | 4.63% | |
Long-term debt before discount and debt issuance costs | $ 550,000 | $ 550,000 | |
Other long-term debt | |||
Debt Instrument [Line Items] | |||
Long-term Debt, Weighted Average Interest Rate | 1.36% | 1.92% | |
Long-term debt before discount and debt issuance costs | $ 642 | $ 1,551 |
Debt (Textuals) (Details)
Debt (Textuals) (Details) $ in Thousands, £ in Millions | Oct. 31, 2016GBP (£) | Jul. 01, 2017USD ($) | Jul. 02, 2016USD ($) | Dec. 31, 2016USD ($) |
Debt Instrument [Line Items] | ||||
Issuance of notes, net of issuance costs | $ 296,374 | $ 541,500 | ||
Accounts Receivable from Securitization | 807,500 | 1,460,000 | ||
Borrowings of term loans | 530,756 | |||
Company's total debt | ||||
Debt, Long-term and Short-term, Combined Amount | 1,779,325 | 2,490,000 | ||
Total fair value | $ 1,850,000 | 2,590,000 | ||
Base Rate or Commercial Paper | ||||
Debt Instrument [Line Items] | ||||
Spread over base rate | 0.40% | |||
Notes Due December 2021 | ||||
Debt Instrument [Line Items] | ||||
Debt instrument face amount | $ 300,000 | |||
Long-term debt, stated interest rate | 3.75% | |||
Bank credit facilities and other | ||||
Debt Instrument [Line Items] | ||||
Short-term borrowings | $ 50,113 | $ 122,599 | ||
Accounts receivable securitization program | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, stated interest rate | 0.93% | |||
Certain Foreign Subsidiaries | ||||
Debt Instrument [Line Items] | ||||
Borrowings of term loans | £ | £ 479 | |||
Revolving credit facilities | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing amount | $ 1,250,000 | |||
Term | 5 years | |||
Line of credit facility contingent increase to maximum borrowing capacity | $ 1,500,000 | |||
Letter of Credit | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing amount | 150,000 | |||
Letters of credit outstanding, amount | $ 3,100 | $ 5,600 | ||
Notes due | Notes Due December 2021 | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, stated interest rate | 3.75% | |||
Notes due | Notes Due April 2026 | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, stated interest rate | 4.63% | 4.63% |
Debt - Accounts Receivable Secu
Debt - Accounts Receivable Securitization Program (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jul. 01, 2017 | Jan. 31, 2017 | Jul. 02, 2016 | |
Accounts receivable securitization program maximum borrowing amount | $ 400 | $ 800 | |
Receivables Owned by Special Purpose Entity | $ 807.5 | $ 1,460 | |
Accounts receivable securitization program loan term | 2 years | ||
Accounts receivable securitization program, borrowings outstanding | $ 142 | $ 730 | |
Base Rate | |||
Program facility fee | 0.40% |
Debt (Maturity Schedule) (Detai
Debt (Maturity Schedule) (Details) - USD ($) $ in Thousands | Jul. 01, 2017 | Jul. 02, 2016 |
Debt | ||
2,018 | $ 50,113 | |
2,019 | 242,234 | |
2,020 | 300,292 | |
2,021 | 80 | |
2,022 | 300,006 | |
Thereafter | 900,000 | |
Subtotal | 1,792,725 | |
Discount on debt issuance costs - unamortized | (13,400) | |
Total debt | $ 1,779,325 | $ 2,490,000 |
Accrued expenses and other (Det
Accrued expenses and other (Details) - USD ($) $ in Thousands | Jul. 01, 2017 | Jul. 02, 2016 |
Accrued expenses and other | ||
Accrued salaries and benefits | $ 205,979 | $ 208,624 |
Accrued operating costs | 104,747 | 47,562 |
Accrued interest and banking costs | 47,481 | 22,125 |
Accrued restructuring costs | 16,996 | 15,499 |
Accrued income taxes | 61,552 | 32,976 |
Accrued property, plant and equipment | 6,491 | 12,801 |
Accrued other | 98,777 | 55,301 |
Total accrued expenses and other | $ 542,023 | $ 394,888 |
Income taxes (Provision for Inc
Income taxes (Provision for Income Taxes) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 01, 2017 | Jul. 02, 2016 | Jun. 27, 2015 | |
Current: | |||
Federal | $ (45,351) | $ (16,934) | $ 5,497 |
State and Local | 4,209 | (33) | (1,959) |
Foreign | 106,441 | 92,033 | 60,082 |
Total current taxes | 65,299 | 75,066 | 63,620 |
Deferred: | |||
Federal | (30,025) | 5,573 | 39,905 |
State and Local | (3,934) | 1,351 | 6,774 |
Foreign | 15,713 | 5,114 | (24,163) |
Total deferred taxes | (18,246) | 12,038 | 22,516 |
Income tax expense | $ 47,053 | $ 87,104 | $ 86,136 |
Income taxes (Effective Tax Rat
Income taxes (Effective Tax Rate) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jul. 01, 2017 | Jul. 02, 2016 | Jun. 27, 2015 | |
Reconciliation between federal statutory tax rate and effective tax rate | |||
U.S. federal statutory rate | 35.00% | 35.00% | 35.00% |
State and local income taxes, net of federal benefit | (1.70%) | 0.30% | 0.80% |
Foreign tax rates, net of valuation allowances | (23.50%) | (12.70%) | (11.10%) |
Establishment/(release) of valuation allowance, net of U.S. tax expense | 1.30% | (1.70%) | (9.00%) |
Change in contingency reserves | 3.60% | (2.50%) | 0.90% |
Tax audit settlements | 0.10% | (0.70%) | (2.90%) |
Other, net | 0.40% | 0.50% | 1.40% |
Effective Income Tax Rate - continuing operations | 15.20% | 18.20% | 15.10% |
Tax benefit due to lower tax jurisdictions | $ (73) |
Income taxes (Deferred Assets a
Income taxes (Deferred Assets and Liabilities) (Details) - USD ($) $ in Thousands | Jul. 01, 2017 | Jul. 02, 2016 |
Deferred tax assets: | ||
Federal, state and foreign net operating loss carry-forwards | $ 269,576 | $ 94,892 |
Inventories valuation | 30,330 | 20,635 |
Receivables valuation | 9,209 | 9,188 |
Various accrued liabilities and other | 46,922 | 35,929 |
Deferred tax assets, gross | 356,037 | 160,644 |
Less - valuation allowance | (241,687) | (63,694) |
Deferred tax assets, net | 114,350 | 96,950 |
Deferred tax liabilities: | ||
Depreciation and amortization of property, plant and equipment | (152,101) | (99,154) |
Net deferred tax liabilities | $ (37,751) | $ (2,204) |
Income taxes (Unrecognized Tax
Income taxes (Unrecognized Tax Benefits) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jul. 01, 2017 | Jul. 02, 2016 | |
Reconciliation of the beginning and ending accrual balance for unrecognized tax benefits | ||
Balance at beginning of year | $ 58,830 | $ 60,433 |
Additions for tax positions taken in prior periods, including interest | 10,476 | 3,496 |
Reductions for tax positions taken in prior periods, including interest | (5,656) | (6,349) |
Additions for tax positions taken in current period | 13,659 | 7,577 |
Reductions related to settlements with taxing authorities | (203) | (725) |
Reductions related to the lapse of applicable statutes of limitations | (5,790) | (13,188) |
Adjustments related to foreign currency translation | 2,772 | (212) |
Avtivity of discontinued operations | 10,864 | 7,798 |
Additions from acquisitions | 21,834 | |
Balance at end of year | $ 106,786 | $ 58,830 |
Income taxes - Textuals (Detail
Income taxes - Textuals (Details) - USD ($) | 12 Months Ended | ||
Jul. 01, 2017 | Jul. 02, 2016 | Jun. 27, 2015 | |
Income Tax [Line Items] | |||
Income (loss) before income taxes, Domestic | $ (174,300,000) | $ (2,700,000) | $ 85,800,000 |
Income (loss) before income taxes, Foreign | $ 484,700,000 | $ 480,700,000 | $ 485,700,000 |
Effective tax rate | 15.20% | 18.20% | 15.10% |
Deferred tax assets | $ 114,350,000 | $ 96,950,000 | |
Reduction in deferred tax valuation allowance | 8,800,000 | $ 56,500,000 | |
Valuation allowance impacted effective tax rate | 4,000,000 | 8,600,000 | |
Increase in valuation allowance for newly acquired companies and companies with a history of losses | 173,500,000 | ||
Net operating loss carry forward | 1,070,000,000 | ||
Operating loss carry forward, subject to expiration | 17,300,000 | ||
Deferred tax assets operating loss carry forwards expiring in next three years and after | 61,200,000 | ||
Operating loss carry forward, not subject to expiration | 986,300,000 | ||
Unrecognized tax benefits | 106,786,000 | 58,830,000 | $ 60,433,000 |
Accrued interest expense and penalties | 15,300,000 | 13,900,000 | |
Tax contingencies settled | 23,500,000 | ||
Expected cash payment for settlement | 8,400,000 | ||
Provision for income taxes on unremitted earnings of foreign subsidiaries | 0 | ||
Cumulative unremitted earnings of foreign subsidiaries | 3,330,000,000 | ||
Fiscal Year 2016 Restructuring Liabilities | EMEA | Other Noncurrent Assets. | |||
Income Tax [Line Items] | |||
Deferred tax assets | $ 90,400,000 | $ 98,200,000 |
Pension and retirement plans (P
Pension and retirement plans (Pension Plans) (Details) - Pension Plan - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 01, 2017 | Jul. 02, 2016 | Jun. 27, 2015 | |
Changes in benefit obligations: | |||
Benefit obligations at beginning of year | $ 588,511 | $ 513,406 | |
Acquired benefit obligations | 165,046 | ||
Service cost | 29,623 | 39,740 | $ 39,492 |
Interest cost | 19,323 | 21,310 | 17,797 |
Actuarial loss | 15,686 | 41,799 | |
Benefits paid | (46,121) | (27,744) | |
Benefit obligations at end of year | 772,068 | 588,511 | 513,406 |
Change in plan assets: | |||
Fair value of plan assets at beginning of year | 516,089 | 484,408 | |
Acquired plan assets | 144,238 | ||
Actual return on plan assets | 51,409 | 19,425 | |
Benefits paid | (46,121) | (27,744) | |
Contributions | 33,750 | 40,000 | |
Fair value of plan assets at end of year | 699,365 | 516,089 | $ 484,408 |
Funded status of the plan recognized as a non-current liability | (72,703) | (72,422) | |
Amounts recognized in accumulated other comprehensive income: | |||
Unrecognized net actuarial losses | 234,863 | 235,747 | |
Unamortized prior service credits | (691) | (2,903) | |
Amount recognized in accumulated other comprehensive income | 234,172 | 232,844 | |
Other changes in plan assets and benefit obligations recognized in other comprehensive income: | |||
Net actuarial gain | 9,744 | 62,659 | |
Amortization of net actuarial losses | (14,440) | (12,731) | |
Amortization of prior service credits | 1,573 | 1,573 | |
Curtailment recognition of prior service credit | 614 | ||
Other changes in plan assets and benefit obligations recognized in other comprehensive income | $ (2,509) | $ 51,501 | |
Weighted average assumptions used to calculate actuarial present values of benefit obligations | |||
Discount rate | 3.80% | 3.40% | |
Weighted average assumptions used to determine net benefit costs | |||
Discount rate | 3.30% | 4.30% | |
Expected return on plan assets | 8.00% | 8.30% |
Pension and retirement plans 74
Pension and retirement plans (Periodic Pension Cost) (Details) - Pension Plan - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 01, 2017 | Jul. 02, 2016 | Jun. 27, 2015 | |
Components of net periodic pension costs | |||
Service cost | $ 29,623 | $ 39,740 | $ 39,492 |
Interest cost | 19,323 | 21,310 | 17,797 |
Expected return on plan assets | (49,279) | (40,285) | (36,221) |
Amortization of prior service credits | (1,573) | (1,573) | (1,573) |
Recognized net actuarial loss | 14,440 | 12,731 | 13,007 |
Curtailment recognition of prior service credit | (614) | ||
Net periodic pension cost | $ 11,920 | $ 31,923 | $ 32,502 |
Pension and retirement plans (B
Pension and retirement plans (Benefit Payments) (Details) - Pension Plan $ in Thousands | Jul. 01, 2017USD ($) |
Defined Benefit Plan, Expected Future Benefit Payments, Fiscal Year Maturity [Abstract] | |
2,018 | $ 59,643 |
2,019 | 63,666 |
2,020 | 39,692 |
2,021 | 41,288 |
2,022 | 45,886 |
2023 through 2027 | $ 262,946 |
Pension and retirement plans 76
Pension and retirement plans (Plan Asset Allocations) (Details) - Pension Plan | Jul. 01, 2017 | Jul. 02, 2016 |
Equity securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Actual plan asset allocations | 50.00% | 60.00% |
Fixed income debt securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Actual plan asset allocations | 50.00% | 40.00% |
Pension and retirement plans (F
Pension and retirement plans (Fair Value) (Details) - USD ($) $ in Thousands | Jul. 01, 2017 | Jul. 02, 2016 | Jun. 27, 2015 |
Pension Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 699,365 | $ 516,089 | $ 484,408 |
Estimate of Fair Value Measurement | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 699,365 | ||
Estimate of Fair Value Measurement | Pension Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 516,089 | ||
Estimate of Fair Value Measurement | Cash and cash equivalents | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 1,481 | ||
Estimate of Fair Value Measurement | Cash and cash equivalents | Pension Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 497 | ||
Estimate of Fair Value Measurement | U.S. common stocks [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 221,003 | ||
Estimate of Fair Value Measurement | U.S. common stocks [Member] | Pension Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 204,125 | ||
Estimate of Fair Value Measurement | International common stocks [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 117,392 | ||
Estimate of Fair Value Measurement | International common stocks [Member] | Pension Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 102,193 | ||
Estimate of Fair Value Measurement | U.S. government agencies [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 105,227 | ||
Estimate of Fair Value Measurement | U.S. government agencies [Member] | Pension Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 76,991 | ||
Estimate of Fair Value Measurement | Foreign Government Debt Securities [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 14,366 | ||
Estimate of Fair Value Measurement | U.S. corporate bonds [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 214,024 | ||
Estimate of Fair Value Measurement | U.S. corporate bonds [Member] | Pension Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 112,262 | ||
Estimate of Fair Value Measurement | Other Debt Obligations [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 25,872 | ||
Estimate of Fair Value Measurement | Other Debt Obligations [Member] | Pension Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 20,021 | ||
Level 1 | Pension Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 1,481 | 497 | |
Level 1 | Cash and cash equivalents | Pension Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 1,481 | 497 | |
Level 2 | Pension Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 697,884 | 515,592 | |
Level 2 | U.S. common stocks [Member] | Pension Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 221,003 | 204,125 | |
Level 2 | International common stocks [Member] | Pension Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 117,392 | 102,193 | |
Level 2 | U.S. government agencies [Member] | Pension Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 105,227 | 76,991 | |
Level 2 | Foreign Government Debt Securities [Member] | Pension Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 14,366 | ||
Level 2 | U.S. corporate bonds [Member] | Pension Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 214,024 | 112,262 | |
Level 2 | Other Debt Obligations [Member] | Pension Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 25,872 | $ 20,021 |
Pension and Retirement Plans -
Pension and Retirement Plans - Textuals (Details) $ in Thousands | Jul. 02, 2017USD ($) | Jul. 01, 2017USD ($)item | Jul. 02, 2016USD ($) |
Defined Benefit Plan Disclosure [Line Items] | |||
The minimum hours that must be worked in a year, in order that the employee becomes eligible to join the pension plan in the following year. | item | 1,000 | ||
Pension Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Unrecognized net actuarial losses, pre-tax | $ 234,863 | $ 235,747 | |
Unrecognized actuarial losses expected to be recognized in net periodic pension cost during following year | 15,000 | ||
Unrecognized prior service credit, pre-tax | 691 | 2,903 | |
Unrecognized prior service credit Expected to be recognized net periodic pension cost during following year | 1,600 | ||
Contributions | $ 33,750 | $ 40,000 | |
Pension Plan | Forecast | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plans, estimated future employer contributions each remaining quarter of current fiscal year | $ 16,000 | ||
Equity securities | Pension Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Target allocation percentage of investments equity securities | 60.00% |
Operating leases (Details)
Operating leases (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 01, 2017 | Jul. 02, 2016 | Jun. 27, 2015 | |
Operating leases | |||
Rent expense under operating leases | $ 71,814 | $ 66,702 | $ 72,713 |
Operating leases (Operating Lea
Operating leases (Operating Lease Commitments) (Details) $ in Thousands | Jul. 01, 2017USD ($) |
Minimum operating lease commitments, principally for buildings | |
2,018 | $ 66,513 |
2,019 | 52,434 |
2,020 | 40,956 |
2,021 | 31,487 |
2,022 | 26,821 |
Thereafter | 68,735 |
Total | $ 286,946 |
Stock-based compensation (Fair
Stock-based compensation (Fair Value Assumptions) (Details) | 12 Months Ended | ||
Jul. 01, 2017 | Jul. 02, 2016 | Jun. 27, 2015 | |
Volatility assumption on the basis of Avnet's Stock | |||
Expected term (years) | 6 years | 6 years | 6 years |
Risk-free interest rate | 1.90% | 1.70% | 1.90% |
Weighted average volatility | 27.90% | 29.70% | 31.60% |
Dividend yield | 1.50% | 1.90% | 1.80% |
Stock-based compensation (Optio
Stock-based compensation (Options Outstanding) (Details) - $ / shares | 12 Months Ended | |
Jul. 01, 2017 | Jul. 02, 2016 | |
Shares | ||
Beginning balance | 2,325,397 | |
Granted | 1,516,430 | |
Exercised | (817,598) | |
Forfeited or expired | (309,723) | |
Ending balance | 2,714,506 | 2,325,397 |
Exercisable at June 27, 2015 | 1,035,743 | |
Weighted Average Exercise Price | ||
Beginning balance | $ 34.61 | |
Granted | 45.50 | |
Exercised | 31.85 | |
Forfeited or expired | 43.58 | |
Ending balance | 40.51 | $ 34.61 |
Exercisable at June 28, 2014 | $ 33.38 | |
Weighted Average Remaining Contractual Life | ||
Granted | 113 months | |
Exercised | 34 months | |
Forfeited or expired | 46 months | |
outstanding Balance | 82 months | 66 months |
Exercisable | 51 months |
Stock-based compensation (Non v
Stock-based compensation (Non vested) (Details) - $ / shares | 12 Months Ended | ||
Jul. 01, 2017 | Jul. 02, 2016 | Jun. 27, 2015 | |
Shares | |||
Beginning balance | 919,151 | ||
Granted | 1,516,430 | ||
Vested | (561,403) | ||
Forfeited | (195,415) | ||
Ending balance | 1,678,763 | 919,151 | |
Weighted Average Grant-Date Fair Value | |||
Beginning balance | $ 11.20 | ||
Granted | 9.46 | $ 10.69 | $ 11.68 |
Vested | 5.92 | ||
Forfeited | 9.81 | ||
Ending balance | $ 11.56 | $ 11.20 |
Stock-based compensation (Non-V
Stock-based compensation (Non-Vested restricted Incentive Shares) (Details) - Restricted incentive shares | 12 Months Ended |
Jul. 01, 2017$ / sharesshares | |
Shares | |
Beginning balance | shares | 1,720,219 |
Granted | shares | 1,082,795 |
Vested | shares | (1,408,706) |
Forfeited | shares | (378,280) |
Ending balance | shares | 1,016,028 |
Weighted Average Grant-Date Fair Value | |
Beginning balance | $ / shares | $ 39.12 |
Granted | $ / shares | 40.70 |
Vested | $ / shares | 38.77 |
Forfeited | $ / shares | 40.09 |
Ending balance | $ / shares | $ 40.93 |
Stock-based compensation (Textu
Stock-based compensation (Textuals) (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Jul. 01, 2017 | Jul. 02, 2016 | Jun. 27, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense | $ 53.9 | $ 56.9 | $ 62 |
Discontinued operations share-based compensation | $ 6.2 | ||
Common stock of shares reserved for stock option and stock incentive plans | 10,600,000 | ||
Stock options granted but not yet vested and vested but not yet exercised | 2,714,506 | 2,325,397 | |
Employee Stock Purchase Plan, number of shares available for future award | 200,000 | ||
Contractual life of stock option grants | 10 years | ||
Percentage vesting increment on each anniversary of the grant date | 25.00% | ||
Exercise price as a percentage of share fair market value at date of grant | 100.00% | ||
Granted | $ 9.46 | $ 10.69 | $ 11.68 |
Intrinsic values of share options outstanding | $ 6.2 | ||
Intrinsic values of share options exercisable | 6.2 | ||
Total fair value of shares vested | 3.3 | $ 4.6 | $ 4 |
Cash received from exercise of stock options | $ 25.2 | 0.8 | 2.6 |
Performance shares vesting range, minimum | 0.00% | ||
Performance shares vesting range, maximum | 200.00% | ||
Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense | $ 5.8 | 4.2 | 3.6 |
Shares available for grant | 2,700,000 | ||
Total unrecognized compensation cost related to non vested awards | $ 8.9 | ||
Weighted average period for expected recognition of compensation cost | 2 years 1 month 6 days | ||
Stock Based Award | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares available for grant | 6,200,000 | ||
Restricted incentive shares | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense | $ 42.4 | 43.9 | 50.5 |
Total unrecognized compensation cost related to non vested awards | $ 19.9 | ||
Weighted average period for expected recognition of compensation cost | 2 years 1 month 6 days | ||
Granted, but not yet vested | 1,000,000 | ||
Fair value of shares vested | $ 54.6 | 42.5 | 36.2 |
Performance shares granted | 1,082,795 | ||
Performance shares | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense | $ 4.6 | $ 7.6 | $ 6.8 |
Shares available for grant | 1,500,000 | ||
Vesting period | 3 years | ||
Performance shares granted | 200,000 | 200,000 | 200,000 |
Commitments and contingencies (
Commitments and contingencies (Textuals) (Details) - USD ($) $ in Millions | Jul. 01, 2017 | Jul. 02, 2016 |
Loss Contingency, Estimate [Abstract] | ||
Estimate of possible loss | $ 14.2 | $ 20.2 |
Earnings per share (Details)
Earnings per share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Jul. 01, 2017 | Jul. 02, 2016 | Jun. 27, 2015 | |
Numerator: | |||
Income from continuing operations | $ 263,351 | $ 390,909 | $ 485,375 |
Income from discontinued operations | 261,927 | 115,622 | 86,538 |
Net income | $ 525,278 | $ 506,531 | $ 571,913 |
Denominator: | |||
Weighted average common shares for basic earnings per share | 127,032 | 130,858 | 136,688 |
Net effect of dilutive stock based compensation awards | 1,619 | 2,315 | 2,103 |
Weighted average common shares for diluted earnings per share | 128,651 | 133,173 | 138,791 |
Basic earnings per share-continuing operations | $ 2.07 | $ 2.99 | $ 3.55 |
Basic earnings per share-discontinued operations | 2.06 | 0.88 | 0.63 |
Basic earnings per share | 4.13 | 3.87 | 4.18 |
Diluted earnings per share-continuing operations | 2.05 | 2.93 | 3.50 |
Diluted earnings per share-discontinued operations | 2.03 | 0.87 | 0.62 |
Diluted earnings per share | $ 4.08 | $ 3.80 | $ 4.12 |
Stock options excluded from earnings per share calculation due to antidilutive effect | 1,038 | 378 |
Additional cash flow informat88
Additional cash flow information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 01, 2017 | Jul. 02, 2016 | Jun. 27, 2015 | |
Other non-cash and reconciling items | |||
Provision for doubtful accounts receivable | $ 10,741 | $ 7,776 | $ 11,558 |
Periodic pension cost | 10,071 | 23,386 | 23,544 |
Other, net | 8,292 | (1,783) | 20,862 |
Total | 29,104 | 29,379 | 55,964 |
Interest and income taxes paid | |||
Interest | 116,085 | 119,941 | 113,476 |
Income taxes | 413,482 | 92,993 | 125,403 |
Accrued property, plant and equipment not paid | $ 6,500 | $ 12,800 | $ 8,300 |
Segment information (Details)
Segment information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 01, 2017 | Jul. 02, 2016 | Jun. 27, 2015 | |
Sales, by segment | |||
Sales | $ 17,439,963 | $ 16,740,597 | $ 17,655,319 |
Operating income (expense): | |||
Operating income (expense) before restructuring charges, integration, amortization of acquired intangible assets, and other | 760,800 | 728,700 | 832,600 |
Restructuring, integration and other expenses (Note 14) | (137,415) | (44,761) | (41,848) |
Amortization of acquired intangible assets and other | (54,500) | (9,800) | (18,100) |
Operating income | 461,400 | 572,912 | 653,146 |
Assets: | |||
Assets | 9,699,589 | 11,239,805 | 10,800,000 |
Capital expenditures: | |||
Purchases of property, plant and equipment | 120,397 | 137,375 | 133,356 |
Depreciation & amortization expense: | |||
Depreciation and amortization expense | 155,400 | 79,600 | 82,200 |
Corporate | |||
Operating income (expense): | |||
Operating income (expense) before restructuring charges, integration, amortization of acquired intangible assets, and other | (107,500) | (101,200) | (119,600) |
Assets: | |||
Assets | 1,084,000 | 608,800 | 693,300 |
Capital expenditures: | |||
Purchases of property, plant and equipment | 23,100 | 36,500 | 33,300 |
Depreciation & amortization expense: | |||
Depreciation and amortization expense | 37,300 | 34,700 | 37,000 |
Electronic Components | |||
Sales, by segment | |||
Sales | 16,474,100 | 16,740,600 | 17,655,300 |
Capital expenditures: | |||
Purchases of property, plant and equipment | 81,600 | 100,900 | 100,100 |
Depreciation & amortization expense: | |||
Depreciation and amortization expense | 64,400 | 44,900 | 45,200 |
Electronic Components | Segment | |||
Operating income (expense): | |||
Operating income (expense) before restructuring charges, integration, amortization of acquired intangible assets, and other | 661,000 | 728,700 | 832,600 |
Assets: | |||
Assets | 7,126,000 | 7,163,100 | 6,706,100 |
Premier Farnell | |||
Sales, by segment | |||
Sales | 965,900 | ||
Capital expenditures: | |||
Purchases of property, plant and equipment | 15,700 | ||
Depreciation & amortization expense: | |||
Depreciation and amortization expense | 53,700 | ||
Premier Farnell | Segment | |||
Operating income (expense): | |||
Operating income (expense) before restructuring charges, integration, amortization of acquired intangible assets, and other | 99,800 | ||
Assets: | |||
Assets | $ 1,489,600 | ||
Disposal Group, Held-for-sale, Not Discontinued Operations | TS Business | |||
Assets: | |||
Assets of discontinued operations | $ 3,467,949 | $ 3,400,600 |
Segment information (Sales, by
Segment information (Sales, by geographic area) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 01, 2017 | Jul. 02, 2016 | Jun. 27, 2015 | |
Sales, by geographic area: | |||
Sales | $ 17,439,963 | $ 16,740,597 | $ 17,655,319 |
Americas | |||
Sales, by geographic area: | |||
Sales | 5,163,900 | 4,801,300 | 5,154,500 |
United States | |||
Sales, by geographic area: | |||
Sales | 4,800,000 | 4,480,000 | 4,790,000 |
EMEA | |||
Sales, by geographic area: | |||
Sales | 5,912,900 | 5,103,000 | 5,053,000 |
Germany | |||
Sales, by geographic area: | |||
Sales | 2,290,000 | 2,130,000 | 2,100,000 |
United Kingdom | |||
Sales, by geographic area: | |||
Sales | 589,800 | 378,100 | 412,800 |
Asia Pacific | |||
Sales, by geographic area: | |||
Sales | 6,363,200 | 6,836,300 | 7,447,800 |
Taiwan | |||
Sales, by geographic area: | |||
Sales | 2,180,000 | 2,860,000 | 3,420,000 |
China (including Hong Kong) | |||
Sales, by geographic area: | |||
Sales | 2,450,000 | 2,440,000 | 2,430,000 |
SINGAPORE | |||
Sales, by geographic area: | |||
Sales | $ 928,400 | $ 903,000 | $ 951,900 |
Segment information (Property,
Segment information (Property, plant and equipment, net, by geographic area) (Details) - USD ($) $ in Thousands | Jul. 01, 2017 | Jul. 02, 2016 | Jun. 27, 2015 |
Property, plant and equipment, net, by geographic area | |||
Property, plant and equipment, net | $ 519,575 | $ 453,209 | $ 389,600 |
Americas | |||
Property, plant and equipment, net, by geographic area | |||
Property, plant and equipment, net | 296,100 | 303,300 | 240,000 |
United States | |||
Property, plant and equipment, net, by geographic area | |||
Property, plant and equipment, net | 289,100 | 297,100 | 237,000 |
EMEA | |||
Property, plant and equipment, net, by geographic area | |||
Property, plant and equipment, net | 186,100 | 129,600 | 129,800 |
Germany | |||
Property, plant and equipment, net, by geographic area | |||
Property, plant and equipment, net | 85,600 | 72,500 | 70,200 |
United Kingdom | |||
Property, plant and equipment, net, by geographic area | |||
Property, plant and equipment, net | 52,100 | ||
Belgium | |||
Property, plant and equipment, net, by geographic area | |||
Property, plant and equipment, net | 39,800 | 40,000 | 41,100 |
Asia Pacific | |||
Property, plant and equipment, net, by geographic area | |||
Property, plant and equipment, net | $ 37,400 | $ 20,300 | $ 19,800 |
Segment information (Sales) (De
Segment information (Sales) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 01, 2017 | Jul. 02, 2016 | Jun. 27, 2015 | |
Sales by major product categories | |||
Sales | $ 17,439,963 | $ 16,740,597 | $ 17,655,319 |
Semiconductors | |||
Sales by major product categories | |||
Sales | 13,537,900 | 13,978,000 | 14,886,300 |
IP&E | |||
Sales by major product categories | |||
Sales | 3,397,900 | 2,539,900 | 2,594,700 |
Other | |||
Sales by major product categories | |||
Sales | $ 504,200 | $ 222,700 | $ 174,300 |
Restructuring expenses (Details
Restructuring expenses (Details) $ in Thousands | 12 Months Ended |
Jul. 01, 2017USD ($) | |
Fiscal Year 2017 Restructuring Liabilities | |
Activity related to the restructuring reserves | |
Restructuring expenses | $ 41,719 |
Cash payments | (22,214) |
Non-cash amounts | (7,417) |
Other, principally foreign currency translation | 174 |
Ending Balance | 12,262 |
Fiscal Year 2016 Restructuring Liabilities | |
Activity related to the restructuring reserves | |
Beginning Balance | 10,987 |
Cash payments | (6,034) |
Changes in estimates, net | (2,124) |
Other, principally foreign currency translation | (38) |
Ending Balance | 2,791 |
Fiscal Year 2015 And Prior Restructuring Liabilities | |
Activity related to the restructuring reserves | |
Beginning Balance | 4,500 |
Ending Balance | 1,900 |
Employee Severance | Fiscal Year 2017 Restructuring Liabilities | |
Activity related to the restructuring reserves | |
Restructuring expenses | 36,073 |
Cash payments | (20,118) |
Non-cash amounts | (3,939) |
Other, principally foreign currency translation | 170 |
Ending Balance | 12,186 |
Employee Severance | Fiscal Year 2016 Restructuring Liabilities | |
Activity related to the restructuring reserves | |
Beginning Balance | 9,854 |
Cash payments | (5,742) |
Changes in estimates, net | (1,574) |
Other, principally foreign currency translation | (37) |
Ending Balance | 2,501 |
Facility Closing | Fiscal Year 2017 Restructuring Liabilities | |
Activity related to the restructuring reserves | |
Restructuring expenses | 668 |
Cash payments | (596) |
Other, principally foreign currency translation | 4 |
Ending Balance | 76 |
Facility Closing | Fiscal Year 2016 Restructuring Liabilities | |
Activity related to the restructuring reserves | |
Beginning Balance | 1,130 |
Cash payments | (289) |
Changes in estimates, net | (550) |
Other, principally foreign currency translation | (1) |
Ending Balance | 290 |
Asset Impairments | Fiscal Year 2017 Restructuring Liabilities | |
Activity related to the restructuring reserves | |
Restructuring expenses | 3,478 |
Non-cash amounts | (3,478) |
Other Restructuring | Fiscal Year 2017 Restructuring Liabilities | |
Activity related to the restructuring reserves | |
Restructuring expenses | 1,500 |
Cash payments | (1,500) |
Other Restructuring | Fiscal Year 2016 Restructuring Liabilities | |
Activity related to the restructuring reserves | |
Beginning Balance | 3 |
Cash payments | $ (3) |
Restructuring expenses (Textual
Restructuring expenses (Textuals) (Details) $ in Thousands | 12 Months Ended | |
Jul. 01, 2017USD ($)employee | Jul. 02, 2016USD ($) | |
Electronic Components | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring expenses | $ 28,400 | |
Premier Farnell | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring expenses | 3,000 | |
Business Support | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring expenses | $ 10,300 | |
Fiscal Year 2017 Restructuring Liabilities | ||
Restructuring Cost and Reserve [Line Items] | ||
Number of employee reductions under Severance charges | employee | 350 | |
Restructuring expenses | $ 41,719 | |
Restructuring Reserve | 12,262 | |
Fiscal Year 2016 Restructuring Liabilities | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring Reserve | 2,791 | $ 10,987 |
Fiscal Year 2015 And Prior Restructuring Liabilities | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring Reserve | $ 1,900 | $ 4,500 |
Restructuring expenses (Detai95
Restructuring expenses (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 01, 2017 | Jul. 02, 2016 | Jun. 27, 2015 | |
Charges related to the acquisition and integration activities [Abstract] | |||
Restructuring, integration and other expenses before tax | $ 137,415 | $ 44,761 | $ 41,848 |
Fiscal Year 2017 Restructuring Liabilities | |||
Charges related to the acquisition and integration activities [Abstract] | |||
Restructuring expenses | $ 41,719 |
Valuation And Qualifying Accc96
Valuation And Qualifying Acccounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 01, 2017 | Jul. 02, 2016 | Jun. 27, 2015 | |
Charged to expense (income), Income from reduction in valuation allowance | |||
Reduction in deferred tax valuation allowance | $ 8,800 | $ 56,500 | |
Valuation allowance impacted effective tax rate | 4,000 | 8,600 | |
Allowance for Doubtful Accounts | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Period | 27,448 | $ 35,629 | 34,912 |
Charged to Expense (Income) | 10,741 | 7,776 | 11,558 |
Charged to Other Accounts | 14,361 | ||
Deductions | (5,278) | (15,957) | (10,841) |
Balance at End of Period | 47,272 | 27,448 | 35,629 |
Valuation Allowance, Operating Loss Carryforwards [Member] | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Period | 63,694 | 60,834 | 126,441 |
Charged to Expense (Income) | 4,477 | (412) | (43,178) |
Charged to Other Accounts | 173,516 | 3,272 | (22,429) |
Balance at End of Period | $ 241,687 | $ 63,694 | $ 60,834 |