Avnet, Inc. (AVT) 2024年年度報告「NYSE」.pdf

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1、Table of ContentsUNITED STATES SECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549Form 10-KANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended June 29,2024orTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF

2、1934For the transition period from to Commission file number 1-4224Avnet,Inc.(Exact name of registrant as specified in its charter)New York(State or other jurisdiction of incorporation or organization)11-1890605(I.R.S.Employer Identification No.)2211 South 47th Street,Phoenix,Arizona(Address of prin

3、cipal executive offices)85034(Zip Code)Registrants telephone number,including area code(480)643-2000Securities registered pursuant to Section 12(b)of the Act:Title of Each Class Trading Symbol Name of Each Exchange on Which registered:Common stock,par value$1.00 per share AVT Nasdaq Global Select Ma

4、rketSecurities registered pursuant to Section 12(g)of the Act:NoneIndicate by check mark if the registrant is a well-known seasoned issuer,as defined in Rule 405 of the Securities Act.Yes No Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15

5、(d)of the Act.Yes No Indicate by check mark whether the registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of the Securities Exchange Act of 1934 during thepreceding 12 months(or for such shorter period that the registrant was required to file such reports),and(2)has been

6、subject to such filing requirements for the past 90 days.Yes No Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-Tduring the preceding 12 months(or for such shorter period that the reg

7、istrant was required to submit such files).Yes No Indicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,a smaller reporting company,or an emerging growthcompany.See the definitions of“large accelerated filer,”“accelerated filer”,“smal

8、ler reporting company”and“emerging growth company”in Rule 12b-2 of the Exchange Act.Large Accelerated Filer Accelerated Filer Non-accelerated Filer Smaller Reporting Company Emerging Growth Company If an emerging growth company,indicate by check mark if the registrant has elected not to use the exte

9、nded transition period for complying with any new or revisedfinancial accounting standards provided pursuant to Section 13(a)of the Exchange Act.Indicate by check mark whether the registrant has filed a report on and attestation to its managements assessment of the effectiveness of its internal cont

10、rol over financialreporting under Section 404(b)of the Sarbanes-Oxley Act(15 U.S.C.7262(b)by the registered public accounting firm that prepared or issued its audit report.If securities are registered pursuant to Section 12(b)of the Act,indicate by check mark whether the financial statements of the

11、registrant included in the filing reflect thecorrection of an error to previously issued financial statements Indicate by check mark whether any of those error corrections are restatements that require a recovery analysis of incentive-based compensation received by any of theregistrants executive of

12、ficers during the relevant recovery period pursuant to Section 240.10D-1(b).Indicate by check mark whether the registrant is a shell company(as defined in Rule 12b-2 of the Exchange Act).Yes No The aggregate market value(approximate)of the registrants common equity held by non-affiliates based on th

13、e closing price of a share of the registrants common stockfor Nasdaq Global Select Market composite transactions on December 29,2023(the last business day of the registrants most recently completed second fiscal quarter)was$4,483,722,802.As of August 2,2024,the total number of shares outstanding of

14、the registrants Common Stock was 88,112,466 shares,net of treasury shares.DOCUMENTS INCORPORATED BY REFERENCEPortions of the registrants definitive proxy statement(to be filed pursuant to Reg.14A)relating to the Annual Meeting of Shareholders anticipated to be held on November 22,2024,are incorporat

15、ed herein by reference in Part III of this Report.Table of Contents2TABLE OF CONTENTS PagePART IItem 1.Business3Item 1A.Risk Factors8Item 1B.Unresolved Staff Comments17Item 1C.Cybersecurity17Item 2.Properties19Item 3.Legal Proceedings19Item 4.Mine Safety Disclosures19PART IIItem 5.Market for Registr

16、ants Common Equity,Related Stockholder Matters and Issuer Purchases of Equity Securities20Item 6.Reserved22Item 7.Managements Discussion and Analysis of Financial Condition and Results of Operations22Item 7A.Quantitative and Qualitative Disclosures About Market Risk31Item 8.Financial Statements and

17、Supplementary Data33Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure67Item 9A.Controls and Procedures67Item 9B.Other Information67Item 9C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections67PART IIIItem 10.Directors,Executive Officers and C

18、orporate Governance68Item 11.Executive Compensation68Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters68Item 13.Certain Relationships and Related Transactions,and Director Independence68Item 14.Principal Accounting Fees and Services68PART IVItem 1

19、5.Exhibits and Financial Statement Schedules68Item 16.Form 10-K Summary72Signature Page74Table of Contents3PART IItem 1.BusinessAvnet,Inc.and its consolidated subsidiaries(collectively,the“Company”or“Avnet”),is a leading global electroniccomponent technology distributor and solutions provider that h

20、as served customers evolving needs for more than acentury.Founded in 1921,the Company works with electronic component manufacturers(suppliers)in every majorelectronic component segment to serve customers in more than 140 countries.Avnet serves a wide range of customers:from startups and mid-sized bu

21、sinesses to enterprise-level originalequipment manufacturers(“OEMs”),electronic manufacturing services(“EMS”)providers,and original designmanufacturers(“ODMs”).Organizational StructureAvnet has two primary operating groups Electronic Components(“EC”)and Farnell(“Farnell”).Both operatinggroups have o

22、perations in each of the three major economic regions of the world:(i)the Americas,(ii)Europe,MiddleEast,and Africa(“EMEA”)and(iii)Asia/Pacific(“Asia”).Each operating group has its own management team,whomanage various functions within each operating group.Each operating group also has distinct fina

23、ncial reporting to theexecutive level,which informs operating decisions,strategic planning,and resource allocation for the Company as a whole.Regional divisions(“business units”)within each operating group serve primarily as sales and marketing units tostreamline sales efforts and enhance each opera

24、ting groups ability to work with its customers and suppliers,generallyalong more specific geographies or product lines.However,each business unit relies heavily on support services from theoperating groups,as well as centralized support at the corporate level.A description of each operating group is

25、 presented below.Further financial information by operating group isprovided in Note 16“Segment information”to the consolidated financial statements appearing in Item 8 of this AnnualReport on Form 10-K.Electronic ComponentsAvnets EC operating group primarily supports high and medium-volume customer

26、s.It markets,sells,and distributeselectronic components from many of the worlds leading electronic component manufacturers,including semiconductors,IP&E components(interconnect,passive and electromechanical components),and other integrated and embeddedcomponents.EC serves a variety of markets rangin

27、g from industrial to automotive to defense and aerospace.It offers an array ofcustomer support options throughout the entire product lifecycle,including both turnkey and customized design,supplychain,programming,logistics,and post-sales services.Within the EC operating group for 2024,net sales of ap

28、proximately 85%consist of semiconductor products,approximately 14%consist of interconnect,passive,and electromechanical components,and approximately 1%consist ofcomputers.Design Chain SolutionsEC offers design chain support that provides engineers with a host of technical design solutions,which help

29、s ECsupport a broad range of customers seeking complex products and technologies.With access to a suite of design tools andengineering support,customers can get product specifications along with evaluation kits and reference designs thatTable of Contents4enable a broad range of applications from any

30、 point in the design cycle.EC also offers engineering and technical resourcesdeployed globally to support product design,bill of materials development,and technical education and training.Byutilizing ECs design chain support,customers can optimize their component selection and accelerate their time

31、to market.ECs extensive electronic component offerings provides customers access to a diverse range of products from a completespectrum of suppliers.Supply Chain SolutionsECs supply chain solutions provide procurement support and warehousing and logistics services to OEMs,EMSproviders,and electronic

32、 component manufacturers,enabling them to optimize supply chains on a local,regional,or globalbasis.ECs internal competencies in supply chain,global warehousing and logistics,information technology,and assetmanagement,combined with its global footprint and extensive supplier relationships,allows EC

33、to develop supply chainsolutions that provide for a deeper level of engagement with its customers.These customers can manage their supplychains to meet the demands of a competitive global environment without a commensurate investment in physical assets,systems,and personnel.With supply chain plannin

34、g tools and a variety of electronic component management solutions,ECprovides various solutions that meet a customers requirements and minimize supply chain risk in a variety of scenarios.Embedded and Integrated SolutionsEC provides embedded solutions,including technical design and integration and a

35、ssembly of embedded products,systems,and solutions for a variety of end markets,including industrial and healthcare.EC also provides embedded displaysolutions,including touch and passive displays.In addition,EC develops and produces standard board and industrialsubsystems and application-specific de

36、vices that enable it to produce specialized systems tailored to specific customerrequirements.EC serves OEMs that require embedded systems and solutions,including engineering,product prototyping,integration,and other value-added services in the medical,telecommunications,industrial,and digital editi

37、ng markets.EC also provides integrated solutions and services for software companies that bring their intellectual property tomarket via hardware solutions,including custom-built servers.FarnellAvnets Farnell operating group primarily supports lower-volume customers that need electronic components q

38、uicklyto develop,prototype,and test their products.It distributes a comprehensive portfolio of kits,tools,electronic components,industrial automation components,and test and measurement products to both engineers and entrepreneurs,primarilythrough an e-commerce channel.Farnell also distributes new p

39、roduct introductions for its suppliers across their variousproduct categories.Within the Farnell operating group for 2024,net sales of approximately 16%consists of semiconductor products,approximately 45%consists of interconnect,passive,and electromechanical components,approximately 5%consists ofsin

40、gle-board computers,and approximately 34%consists of other products and services,including test and measurementand maintenance,repair,and operations products.Major ProductsOne of Avnets competitive strengths is the breadth and quality of the suppliers whose products it distributes.Products from one

41、supplier were approximately 10%of consolidated sales during fiscal years 2024 and 2023,and noTable of Contents5single supplier exceeded 10%of consolidated sales during fiscal year 2022.Listed in the table below are the major productcategories and the Companys approximate sales of each during the pas

42、t three fiscal years.“Other”consists primarily oftest and measurement and maintenance,repair,and operations(MRO)products.Years Ended June 29,July 1,July 2,202420232022(Millions)Semiconductors$19,030.3$21,366.5$18,380.2Interconnect,passive&electromechanical(IP&E)3,745.9 4,150.6 4,639.1Computers 382.8

43、 520.8 663.2Other 598.1 499.0 628.2Sales$23,757.1$26,536.9$24,310.7Competition&MarketsThe electronic components industry is competitive.The Companys major competitors include:Arrow Electronics,Future Electronics,World Peace Group,and WT Microelectronics for EC;Mouser Electronics,Digi-Key Electronics

44、,andRS Components for Farnell.There are also certain smaller,specialized competitors who generally focus on particularsectors or on narrower geographic locations,markets,or products.As a result of these factors,Avnets pricing and productselection and availability must remain competitive.A key compet

45、itive factor in the electronic component distribution industry is the need to carry a sufficient amountand selection of inventory to meet customers demand and various delivery requirements.To minimize its exposure relatedto inventory on hand,the Company purchases most of its products pursuant to fra

46、nchised distribution agreements,whichtypically provide certain protections for product obsolescence and price erosion.These agreements are generally cancelableupon 30 to 180 days notice and,in most cases,provide for or require inventory return privileges upon cancellation.Inaddition,the Company enha

47、nces its competitive position by offering a variety of value-added services,which are tailoredto individual customer specifications and business needs,such as design support,point of use replenishment,labelling,testing,assembly,programming,supply chain management,and materials management.A competiti

48、ve advantage is the breadth of the Companys supplier product line card.Because of the number ofAvnets suppliers,many customers can simplify their procurement process and can make all or substantially all of theirrequired electronic component purchases from Avnet,rather than purchasing from several d

49、ifferent parties.SeasonalityHistorically,Avnets business has not been materially impacted by seasonality,except for an impact on consolidatedresults from shifts in geographic sales trends from Asia in the first half of a fiscal year to the Americas and EMEA regionsin the second half of a fiscal year

50、,which impact gross profit and operating income margins as a result of such seasonalgeographic sales mix changes.Human CapitalThe Company values its employees and recognizes their significant contributions to the Companys success.Its corevalues of integrity,customer focus,ownership,teamwork,and incl

51、usiveness provide a foundation for its culture and arekey expectations of employees.The Companys culture and commitment to its employees are vital to attracting,motivating,and retaining exceptional talent.Consequently,the Company invests in its global workforce to driveTable of Contents6diversity an

52、d inclusion;provide fair and competitive pay and benefits;foster employee development;promote employeeshealth and safety;and understand employees experiences and identify opportunities to improve.Additional information regarding the Companys Human Capital programs,initiatives,and metrics can be foun

53、d onits website,including in its Sustainability Reports accessible on its website.The Sustainability Reports and otherinformation contained on the Companys website are not incorporated by reference into this Annual Report.Number of EmployeesAs of June 29,2024,the Companys global workforce totaled ap

54、proximately 15,462 employees across 48 countries.Broken down by geographic region,approximately 4,294 employees are in the Americas,6,494 employees are in EMEA,and 4,674 employees are in Asia.Compensation,Benefits and WellnessThe Company strives to pay all its employees competitively and fairly,with

55、out regard to gender,race,or otherpersonal characteristics.The Company sets pay ranges based on market data and considers an employees role,experience,tenure,job location,and job performance.The Company periodically reviews its compensation practices,both in terms ofits overall workforce and individ

56、ual employees,to help ensure that pay remains competitive and fair.The Company offers an array of benefits that support employees well-being.Through its THRIVE program,theCompany offers resources covering(1)physical and mental health,fitness,and well-being;(2)professional growth,skills,and developme

57、nt;(3)total rewards,retirement planning and money management;and(4)community connections,networks,and social interests.Development and TrainingThe Company provides career development training and opportunities to help employees reach their potential.Theperformance management process provides ongoing

58、 performance,goals,and development discussions between employeesand their leaders.Learning and development resources include mentoring programs and internal and external trainings,which cover a variety of technical,business,interpersonal,and leadership topics.Additionally,certain programs areavailab

59、le for leaders to develop skills in effective goal setting,coaching,feedback,and development.Talent and successionplanning activities are conducted for the Companys executive officers at least annually and periodically for other seniorleaders.Health and SafetyThe Company strives to create workspaces

60、 and practices that foster a safe and secure work environment.In fiscal2024,continued progress was made with implementing the multi-year plan to improve alignment and consistency ofmanagement systems,policies,and procedures;provide comprehensive health and safety training to employees relevant tothe

61、ir specific work functions;drive continual improvement processes with a focus on identified risks;and increase ISOcertifications at operational sites.As of June 29,2024,the Company has 26 operational sites,of which eight are certified toISO 45001 and 17 are certified to ISO 14001.Diversity,Equity,an

62、d Inclusion(“DEI”)The Companys DEI vision is(i)an employee population that reflects the diverse communities in which they live,work,and do business,and(ii)a culture that seeks out varying perspectives,which allows the best ideas to come to light.The Company is committed to making employment decision

63、s based on merit and the needs of the Companys business,Table of Contents7while ensuring equal employment opportunities for all applicants and employees regardless of race,gender,national origin,or other protected characteristic.The Companys Global DEI Council,a global cross-functional team of leade

64、rs,overseesinclusion efforts.The council meets regularly and engages with colleagues across the Company to connect DEI initiativesto the Companys broader business strategy.The Companys Equal Opportunity,Diversity,and Inclusion Policy actively promotes DEI in the Companys talentmanagement practices.T

65、he Companys commitment to diversity is evidenced by the makeup of its Board of Directors,which as of June 29,2024,was 30%women and 50%racially and ethnically diverse(including Middle Eastern origin).Inaddition,for fiscal years 2021 through 2024,executives annual incentive compensation included non-f

66、inancialperformance goals that consist in part on DEI.The Companys employee-led Employee Resource Groups(ERGs)provide a forum for employees to communicateand exchange ideas,build a network of relationships across the Company,and support each other in personal and careerdevelopment.The Companys eight

67、 ERGs support the following communities:women,Asian and Pacific Islanders,Blacks,Hispanic and Latinos,U.S.veterans,LGBTQ+,later career employees;and environmental and sustainabilitycauses.Employee EngagementThe Company engages with its employees and encourages open and direct feedback through employ

68、ee engagementsurveys.Through such surveys,the Company regularly collects feedback to better understand its employees experiencesand identify opportunities to improve the work environment,increase employee satisfaction,and strengthen its culture.Infiscal 2024,the Company conducted its regular global

69、employee engagement survey and achieved a participation rate of71.6%,an increase over fiscal 2023.Available InformationThe Company files its annual report on Form 10-K,quarterly reports on Form 10-Q,Current Reports on Form 8-K,proxy statements,and other documents(including registration statements)wi

70、th the U.S.Securities and ExchangeCommission(“SEC”)under the Securities Exchange Act of 1934 or the Securities Act of 1933,as applicable.TheCompanys SEC filings are available to the public on the SECs website at http:/www.sec.gov and through The NasdaqGlobal Select Market(“Nasdaq”),165 Broadway,New

71、York,New York 10006,on which the Companys common stock islisted.A copy of any of the Companys filings with the SEC,or any of the agreements or other documents that constituteexhibits to those filings,can be obtained by request directed to the Company at the following address and telephonenumber:Avne

72、t,Inc.2211 South 47th StreetPhoenix,Arizona 85034(480)643-2000Attention:Corporate SecretaryThe Company also makes these filings available,free of charge,through its website(see“Avnet Website”below).Table of Contents8Avnet WebsiteIn addition to the information about the Company contained in this Repo

73、rt,extensive information about the Companycan be found at http:/,including information about its management team,products and services,andcorporate governance practices.The corporate governance information on the Companys website includes the current version of the CompanysCorporate Governance Guide

74、lines,the Code of Conduct,and the charters for each of the committees of its Board ofDirectors.Waivers granted to directors and executive officers under the Code of Conduct,if any,will be posted in this areaof the website.These documents can be accessed at versions can be obtained,freeof charge,by w

75、riting to the Company at the address listed above in“Available Information.”The Companys filings with the SEC,as well as Section 16 filings made by any of the Companys executive officersor directors with respect to the Companys common stock,are available on the Companys website( soon as reasonably p

76、racticable after the filing is electronically filed with,or furnished to,theSEC.These details about the Companys website and its content are only for information.The contents of the Companyswebsite are not,nor shall they be deemed to be,incorporated by reference in this Report.Item 1A.Risk FactorsFo

77、rward-Looking Statements and Risk FactorsThis Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933,asamended(“Securities Act”),and Section 21E of the Securities Exchange Act of 1934,as amended(the“Exchange Act”)with respect to the financial condi

78、tion,results of operations,and business of Avnet.These statements are generallyidentified by words like“believes,”“plans,”“projects,”“expects,”“anticipates,”“should,”“will,”“may,”“estimates,”orsimilar expressions.Forward-looking statements are subject to numerous assumptions,risks,and uncertainties,

79、and actualresults and other outcomes could differ materially from those expressed or implied in the forward-looking statements.Anyforward-looking statement speaks only as of the date on which that statement is made.Except as required by law,theCompany does not undertake any obligation to update any

80、forward-looking statements to reflect events or circumstancesthat occur after the date on which the statement is made.Risks and uncertainties that may cause actual results to differ materially from those contained in the forward-lookingstatements include the risk factors discussed below as well as r

81、isks and uncertainties not presently known to the Companyor that management does not currently consider material.Such factors make the Companys operating results for futureperiods difficult to predict and,therefore,prior results do not necessarily indicate results in future periods.Some of therisks

82、disclosed below may have already occurred,but not to a degree that management considers material unless otherwisenoted.Any of the below factors,or any other factors discussed elsewhere in this Report,may have an adverse effect on theCompanys financial condition,operating results,prospects,and liquid

83、ity.Similarly,the price of the Companys commonstock is subject to volatility due to fluctuations in general market conditions;actual financial results that do not meet theCompanys or the investment communitys expectations;changes in the Companys or the investment communitysexpectations for the Compa

84、nys future results,dividends,or share repurchases;and other factors,many of which arebeyond the Companys control.Table of Contents9Business and Operations RisksChanges in customer needs and consumption modelsChanges in customer product demands and consumption models may cause a decline in the Compan

85、ys billings,which would have a negative impact on the Companys financial results.Changes in technology(such as artificialintelligence)could reduce the types or quantity of services that customers require from the Company.While the Companyattempts to identify changes in market conditions as soon as p

86、ossible,the dynamics of the industries in which it operatesmake it difficult to predict and timely react to such changes,including those relating to product capacity and lead times.Also,future downturns,inflation,or supply chain challenges,including in the semiconductor,embedded solutions,maintenanc

87、e,and test and measurement industries,could adversely affect the Companys relationships with its customers,operating results,and profitability.Specifically,the semiconductor industry experiences periodic fluctuations in product supply and demand(oftenassociated with changes in economic conditions,te

88、chnology,and manufacturing capacity)and suppliers may notadequately predict or meet customer demand.Geopolitical uncertainty(including from military conflicts,health-relatedcrises,and international trade disputes)have led,and may continue to lead,to shortages,extended lead times,andunpredictability

89、in the supply of certain semiconductors and other electronic components.In reaction,customers may overorder to ensure sufficient inventory,which,when the shortage lessens,may result in order cancellations and decreases.Incases where customers have non-cancellable/non-returnable orders,customers may

90、not be able or willing to carry out theterms of the orders.The Companys prices to customers depend on many factors,including product availability,suppliercosts,and competitive pressures.In fiscal 2024 and 2023,pricing to customers increased due to higher costs fromsuppliers,as well as higher freight

91、 and other costs.However,the Company may not be able to maintain higher prices tocustomers in the future.As product becomes more available,customer and competitive pressures may lower prices tocustomers,which could reduce the Companys margins.In addition,the Company may be unable to increase prices

92、tocustomers to offset higher internal costs,which could also reduce margins.During fiscal 2024,2023,and 2022,sales ofsemiconductors represented approximately 80%,81%,and 76%of the Companys consolidated sales,respectively,and theCompanys sales closely follow the strength or weakness of the semiconduc

93、tor industry.These conditions make it moredifficult to manage the Companys business and predict future performance.Disruptions to key supplier and customer relationshipsOne of the Companys competitive strengths is the breadth and quality of the suppliers whose products the Companydistributes.For fis

94、cal 2024,one supplier accounted for approximately 10%of the Companys consolidated billings.TheCompanys contracts with its suppliers vary in duration and are generally terminable by either party at will upon notice.The Companys suppliers may terminate or significantly reduce their volume of business

95、with the Company because of aproduct shortage,an unwillingness to do business with the Company,changes in strategy,or otherwise.Shortages of products or loss of a supplier may negatively affect the Companys business and relationships with itscustomers,as customers depend on the Companys timely deliv

96、ery of technology hardware and software from theindustrys leading suppliers.In addition,shifts in suppliers strategies,or performance and delivery issues,may negativelyaffect the Companys financial results.These conditions make it more difficult to manage the Companys business andpredict future perf

97、ormance.The competitive landscape has also experienced consolidation among suppliers and capacityconstraints,which could negatively impact the Companys profitability and customer base.Further,if key suppliers modify the terms of their contracts(including terms regarding price protection,rights ofret

98、urn,order cancellation rights,delivery commitments,rebates,or other terms that protect or enhance the Companysgross margins),it could negatively affect the Companys results of operations,financial condition,or liquidity.Due torecent global shortages of semiconductors,some suppliers have increased th

99、e amount of non-cancellable/non-returnableTable of Contents10orders,which limited the Companys ability to adjust down its inventory levels.The Company may attempt to limitassociated risks by passing such terms on to its customers,but this may not be possible.Risks related to international operations

100、During fiscal 2024,2023,and 2022 approximately 77%,76%and 77%,respectively,of the Companys sales camefrom its operations outside the United States.The Companys operations are subject to a variety of risks that are specific tointernational operations,including,but not limited to,the following:potenti

101、al restrictions on the Companys ability to repatriate funds from its foreign subsidiaries;foreign currency and interest rate fluctuations;non-compliance with foreign and domestic data privacy regulations,business licensing requirements,environmental regulations,and anti-corruption laws,the failure o

102、f which could result in severe penalties,including monetary fines and criminal proceedings;non-compliance with foreign and domestic import and export regulations and adoption or expansion of traderestrictions,including technology transfer restrictions,additional license,permit or authorization requi

103、rementsfor shipments,specific company sanctions,new and higher duties,tariffs or surcharges,or other import/exportcontrols;complex and changing tax laws and regulations;regulatory requirements and prohibitions that differ between jurisdictions;economic and political instability,terrorism,military co

104、nflicts,or civil unrest;fluctuations in freight costs(both inbound and outbound),limitations on shipping and receiving capacity,andother disruptions in the transportation and shipping infrastructure;natural disasters(including due to climate change),pandemics,and other public health crises;differing

105、 employment practices and labor issues;andnon-compliance with local laws.In addition to the cost of compliance,the potential criminal penalties for violations of import or export regulations andanti-corruption laws,by the Company or its third-party agents,create heightened risks for the Companys int

106、ernationaloperations.If a regulatory body determines that the Company has violated such laws,the Company could be fined significantsums,incur sizable legal defense costs,have its import or export capabilities restricted or denied,or have its inventoriesseized,which could have a material and adverse

107、effect on the Companys business.Additionally,allegations that the Companyhas violated any such regulations may negatively impact the Companys reputation,which may result in customers orsuppliers being unwilling to do business with the Company.While the Company has adopted measures and controls desig

108、nedto ensure compliance with these laws,these measures may not be adequate,and the Company may be materially andadversely impacted in the event of an actual or alleged violation.Tariffs,trade restrictions,sanctions,or changes in trade policies may adversely affect the Companys sales andprofitability

109、.For example,various governments imposed trade measures applicable to China and Hong Kong.The UnitedStates,European Union,United Kingdom,and others initiated a variety of trade measures and other restrictions against Russiain response to the Russian-Ukraine conflict.In response,the Chinese and Russi

110、an governments initiated trade measuresagainst various countries and covering a variety of products.These actions have resulted in losses;increased costs,which theCompany may not be able to pass on to customers;shortages of materials and electronic components;Table of Contents11increased cyber secur

111、ity attacks;credit market disruptions;and inflation.In addition,increased operational expenses incurredin minimizing the number of products subject to tariffs could adversely affect the Companys operating profits.Thesemeasures have not yet had a material impact,but future actions or escalations that

112、 affect trade relations could materially affectthe Companys sales and results of operations.The Company transacts sales,pays expenses,owns assets,and incurs liabilities in countries using currencies other thanthe U.S.Dollar.Because the Companys consolidated financial statements are presented in U.S.

113、Dollars,the Company musttranslate such activities and amounts into U.S.Dollars at exchange rates in effect during each reporting period.Therefore,increases or decreases in the exchange rates between the U.S.Dollar and other currencies affect the Companys reportedamounts of sales,operating income,and

114、 assets and liabilities denominated in foreign currencies.In addition,unexpected anddramatic changes in foreign currency exchange rates may negatively affect the Companys earnings from those markets.While the Company may use derivative financial instruments to reduce its net exposure,foreign currenc

115、y exchange ratefluctuations may materially affect the Companys financial results.Further,foreign currency instability and disruptions in thecredit and capital markets may increase credit risks for some of the Companys customers and may impair its customersability to repay existing obligations.Intern

116、al information systems failuresThe Company depends on its information systems to facilitate its day-to-day operations and to produce timely,accurate,and reliable information on financial and operational results.Currently,the Companys global operations are tracked withmultiple information systems,inc

117、luding systems from acquired businesses,some of which are subject to ongoing IT projectsdesigned to streamline or optimize the Companys systems.These IT projects are extremely complex,in part because of wideranging processes,use of on-premise and cloud environments,the Companys business operations,a

118、nd changes in informationtechnology.The Company may not always succeed at these efforts.Implementation or integration difficulties may adverselyaffect the Companys ability to complete business transactions and ensure accurate recording and reporting of financial data.In addition,IT projects may not

119、achieve the expected efficiencies and cost savings,which could negatively impact theCompanys financial results.A failure of any of these information systems(including due to power losses,computer andtelecommunications failures,cyber security incidents,or manmade or natural disasters),or material dif

120、ficulties in upgradingthese information systems,could have an adverse effect on the Companys business,internal controls,and reportingobligations under federal securities laws.Due to the Companys increased online sales,system interruptions and delays that make its websites and servicesunavailable or

121、slow to respond may reduce the attractiveness of its products and services to its customers.If the Company isunable to continually improve the efficiency of its systems,it could cause systems interruptions or delays and adversely affectthe Companys operating results.Logistics disruptionsThe Companys

122、 global logistics services are operated through specialized and centralized distribution centers aroundthe globe,some of which are outsourced.The Company also depends almost entirely on third-party transportation serviceproviders to deliver products to its customers.A major interruption or disruptio

123、n in service at one or more of itsdistribution centers for any reason,or significant disruptions of services from the Companys third-party transportationproviders,could cause a delay in expected cost savings or an increase in expenses,which may not be possible to pass on tocustomers.Such disruptions

124、 could result from risks related to information technology,data security,or any of the GeneralRisk Factors,as discussed herein.In addition,as the Company continues to increase capacity at various distributioncenters,it may experience operational challenges,increased costs,decreased efficiency,and cu

125、stomer delivery delays andfailures.Such operational challenges could have an adverse impact on the Companys business partners,and on theCompanys business,operations,financial performance,and reputation.Table of Contents12Data security and privacy threatsThreats to the Companys data and information t

126、echnology systems(including cybersecurity attacks such as phishingand ransomware)are becoming more frequent and sophisticated,including through the use of artificial intelligence andmachine learning.Threat actors have successfully breached the Companys systems and processes in various ways,andsuch c

127、ybersecurity breaches expose the Company to significant potential liability and reputational harm.Cybersecurityattacks have not yet materially impacted the Companys data(including data about customers,suppliers,and employees)orthe Companys operations,financial condition,or data security,but future a

128、ttacks could have a material impact.Threatactors,including sophisticated nation-state actors,seek unauthorized access to intellectual property,or confidential orproprietary information regarding the Company,its customers,its business partners,or its employees,and may target theCompanys systems for e

129、spionage,intellectual property theft,or disruption of operations.They deploy malicious softwareprograms that exploit security vulnerabilities,including ransomware designed to encrypt the Companys files so an attackermay demand a ransom for restored access.They also seek to misdirect money,sabotage d

130、ata and systems,takeover internalprocesses,and induce employees or other system users to disclose sensitive information,including login credentials.Inaddition,some Company employees continue to work from home on a full-time or hybrid basis,which increases theCompanys vulnerability to cyber and other

131、 information technology risks.Further,the Companys business partners andservice providers(such as suppliers,customers,and hosted solution providers)pose a security risk because their ownsecurity systems or infrastructure may become compromised.The Company seeks to protect and secure its systems and

132、information,prevent,and detect evolving threats,andrespond to threats as they occur.Measures taken include implementing and enhancing information security controls such asenterprise-wide firewalls,intrusion detection,endpoint protection,email security,disaster recovery,vulnerabilitymanagement,and cy

133、bersecurity training for employees to enhance awareness of general security best practices,financialfraud,and phishing.Despite these efforts,the Company may not always be successful.Threat actors frequently changetheir techniques and technology(such as implementing artificial intelligence)and,conseq

134、uently,the Company may notalways promptly detect the existence or scope of a security breach.As these types of threats grow and evolve,theCompany may make further investments to protect its data and information technology infrastructure,which may impactthe Companys profitability.The Companys insuran

135、ce coverage for protecting against cyber attacks may not be sufficientto cover all possible claims,and the Company may suffer losses that could have a material adverse effect on its business.As a global enterprise,the Company may be negatively impacted by existing and proposed laws and regulations,a

136、s well asgovernment policies and practices,related to cybersecurity,data privacy,data localization,and data protection.Failure tocomply with such requirements could have an adverse effect on the Companys reputation,business,financial condition,and results of operations,as well as subject the Company

137、 to significant fines,litigation losses,third-party damages,andother liabilities.Financial RisksInventory value declineThe electronic components and integrated products industries are subject to technological change,new and enhancedproducts,changes in customer needs,and changes in industry standards

138、 and regulatory requirements,which can cause theCompanys inventory to decline in value or become obsolete.Regardless of the general economic environment,prices maydecline due to a decrease in demand or an oversupply of products,which may increase the risk of declines in inventoryvalue.Many of the Co

139、mpanys suppliers offer certain protections from the loss in value of inventory(such as priceprotection and limited rights of return),but such policies may not fully compensate for the loss.Also,suppliers may nothonor such agreements,some of which are subject to supplier discretion.In addition,most C

140、ompany sales are madepursuant to individual purchase orders,rather than through long-term sales contracts.Where there are contracts,suchcontracts are generally terminable at will upon notice.Unforeseen product developments,Table of Contents13inventory value declines,or customer cancellations may adv

141、ersely affect the Companys business,results of operations,financial condition,or liquidity.Accounts receivable defaultsAccounts receivable are a significant portion of the Companys working capital.If entities responsible for asignificant amount of accounts receivable cease doing business,direct thei

142、r business elsewhere,fail to pay,or delaypayment,the Companys business,results of operations,financial condition,or liquidity could be adversely affected.Aneconomic or industry downturn could adversely affect the Companys ability to collect receivables,which could result inlonger payment cycles,incr

143、eased collection costs,and defaults exceeding managements expectations.A significantdeterioration in the Companys ability to collect accounts receivable in the United States could impact the cost oravailability of financing under its accounts receivable securitization program.Liquidity and capital r

144、esources constraintsThe Companys ability to satisfy its cash needs and implement its capital allocation strategy depends on its ability togenerate cash from operations and to access the financial markets,both of which are subject to general economic,financial,competitive,legislative,regulatory,and o

145、ther factors that are beyond the Companys control.In addition to cash on hand,the Company relies on external financing to help satisfy its cash needs.However,various factors affect external financing,including general market conditions,interest rate fluctuations,and the Companys debt ratings and ope

146、rating results.Consequently,external financing may not be available on acceptable terms or at all.An increase in the Companys debt ordeterioration of its operating results may cause a reduction in its debt ratings.Any such reduction could negatively impactthe Companys ability to obtain additional fi

147、nancing or renew existing financing,and could result in reduced credit limits,increased financing expenses,and additional restrictions and covenants.A reduction in its current debt rating may alsonegatively impact the Companys working capital and impair its relationship with its customers and suppli

148、ers.As of June 29,2024,the Company had debt outstanding with financial institutions under various notes,securedborrowings,and committed and uncommitted lines of credit.The Company needs cash to pay debt principal and interest,and for general corporate purposes,such as funding its ongoing working cap

149、ital and capital expenditure needs.Undercertain of its credit facilities,the applicable interest rate and costs are based in part on the Companys current debt rating.Ifits debt rating is reduced,higher interest rates and increased costs would result.Any material increase in the Companysfinancing cos

150、ts or loss of access to cost-effective financing could have an adverse effect on its profitability,results ofoperations,and cash flows.Under some of its credit facilities,the Company is required to maintain a maximum leverage ratio and pass certainfinancial tests.If the Company increases its level o

151、f debt or its operating results deteriorate,it may fail to meet thisfinancial ratio or pass these tests,which may result in an event of default.In such an event,lenders may accelerate paymentand the Company may be unable to continue to utilize these facilities.If the Company is unable to utilize the

152、se facilities oris required to repay debt earlier than management expected,it may not have sufficient cash available to make interestpayments,to repay indebtedness,or for general corporate needs.General economic or business conditions,both domestic and foreign,may be less favorable than managementex

153、pects and could adversely impact the Companys sales or its ability to collect receivables from its customers,which mayimpact access to the Companys accounts receivable securitization program.Table of Contents14Financing covenants and restrictions may limit management discretionThe agreements governi

154、ng the Companys financing,including its credit facility,accounts receivable securitizationprogram,and the indentures governing the Companys outstanding notes,contain various covenants and restrictions that,incertain circumstances,limit the Companys ability,and the ability of certain subsidiaries,to:

155、grant liens on assets;make restricted payments(including,under certain circumstances,paying dividends on,redeeming,orrepurchasing common stock);make certain investments;merge,consolidate,or transfer all,or substantially all,of the Companys assets;incur additional debt;orengage in certain transaction

156、s with affiliates.As a result of these covenants and restrictions,the Company may be limited in the future in how it conducts itsbusiness and may be unable to raise additional debt,repurchase common stock,pay a dividend,compete effectively,ormake further investments.Tax law changes and complianceAs

157、a multinational corporation,the Company is subject to the tax laws and regulations of the United States and manyforeign jurisdictions.From time to time,governments enact or revise tax laws and regulations,which are further subject tointerpretations,guidance,amendments,and technical corrections from

158、international,federal,and state tax authorities.Suchchanges to tax law may adversely affect the Companys cash flow,costs of share buybacks,and effective tax rate,includingthrough decreases in allowable deductions and higher tax rates.Many countries are adopting provisions to align their internationa

159、l tax rules with the Base Erosion and Profit ShiftingProject,led by the Organisation for Economic Co-operation and Development(“OECD”)and supported by the UnitedStates.The project aims to standardize and modernize global corporate tax policy,including tax rate increases and a 15%global minimum corpo

160、rate tax rate that would apply to companies with revenue over a set threshold.The project isexpected to impact the Companys taxes in fiscal year 2025.Furthermore,many countries are independently evaluatingtheir corporate tax policy,which could result in tax legislation and enforcement that adversely

161、 impacts the Companys taxprovision and value of deferred assets and liabilities.The tax laws and regulations of the various countries where the Company has operations are extremely complex andsubject to varying interpretations.The Company believes that its historical tax positions are sound and cons

162、istent withapplicable law,and that it has adequately reserved for taxes.However,taxing authorities may challenge such positions andthe Company may not be successful in defending against any such challenges.The Companys future income tax expensecould be adversely affected by changes in the mix of ear

163、nings in countries with differing statutory tax rates,changes in thevaluation of deferred tax assets,and liabilities and changes to its operating structure.Constraints on internal controlsEffective internal controls are necessary for the Company to provide reliable financial reports,safeguard its as

164、sets,and prevent and detect fraud.If the Company cannot do so,its brand and operating results could be harmed.Internalcontrols over financial reporting are intended to prevent and detect material misstatements in its financial reporting andmaterial fraudulent activity,but are limited by human error,

165、circumventing or overriding controls,and fraud.As a result,Table of Contents15the Company may not identify all material activity or all immaterial activity that could aggregate into a materialmisstatement.Therefore,even effective internal controls cannot guarantee that financial statements are wholl

166、y accurate orprevent all fraud and loss of assets.Management continually evaluates the effectiveness of the design and operation of theCompanys internal controls.However,if the Company fails to maintain the adequacy of its internal controls,including anyfailure to implement required new or improved

167、internal controls,or if the Company experiences difficulties in theirimplementation,the Companys business and operating results could be harmed.Additionally,the Company may besubject to sanctions or investigations by regulatory authorities,or the Company could fail to meet its reporting obligations,

168、all of which could have an adverse effect on its business or the market price of the Companys securities.Acquisition expected benefits shortfallThe Company has made,and expects to make,strategic acquisitions or investments globally to further its strategicobjectives and support key business initiati

169、ves.Acquisitions and investments involve risks and uncertainties,some ofwhich may differ from those associated with the Companys historical operations.Examples include risks relating toexpanding into emerging markets and business areas,adding additional product lines and services,impacting existingc

170、ustomer and supplier relationships,incurring costs or liabilities associated with the companies acquired,incurringpotential impairment charges on acquired goodwill and other intangible assets,and diverting managements attention fromexisting operations and initiatives.As a result,the Companys profita

171、bility may be negatively impacted.In addition,theCompany may not successfully integrate the acquired businesses,or the integration may be more difficult,costly,or time-consuming than anticipated.Further,any litigation involving the potential acquisition or acquired entity may increaseexpenses associ

172、ated with the acquisition,cause a delay in completing the acquisition,or impact the ability to integrate theacquired entity,all of which may impact the Companys profitability.The Company may experience disruptions that could,depending on the size of the acquisition,have an adverse effect on its busi

173、ness,especially where an acquisition target mayhave pre-existing regulatory issues or deficiencies,or material weaknesses in internal controls over financial reporting.Furthermore,the Company may not realize all benefits anticipated from its acquisitions,which could adversely affect theCompanys fina

174、ncial performance.Legal and Regulatory RisksLegal proceedings costs and damagesFrom time to time,the Company may become involved in legal proceedings,including government investigations,that arise out of the ordinary conduct of the Companys business,including matters involving intellectual property

175、rights,commercial matters,merger-related matters,product liability,and other actions.Legal proceedings could result insubstantial costs and diversion of managements efforts and other resources,and could have an adverse effect on theCompanys operations and business reputation.The Company may be oblig

176、ated to indemnify and defend its customers ifthe products or services that the Company sells are alleged to infringe any third partys intellectual property rights.TheCompany may not be able to obtain supplier indemnification for itself and its customers against such claims,or suchindemnification may

177、 not fully protect the Company and its customers against such claims.Also,the Company is exposedto potential liability for technology and products that it develops for which it has no indemnification protections.If aninfringement claim against the Company is successful,the Company may be required to

178、 pay damages or seek royalty orlicense arrangements,which may not be available on commercially reasonable terms.The Company may have to stopselling certain products or services,which could affect its ability to compete effectively.In addition,the Companysexpanding business activities may include the

179、 assembly or manufacture of electronic component products and systems.Product defects,whether caused by a design,assembly,manufacture or component failure or error,or manufacturingprocesses not in compliance with applicable statutory and regulatory requirements,may result in product liability claims

180、,Table of Contents16product recalls,fines,and penalties.Product liability risks could be particularly significant with respect to aerospace,automotive,and medical applications because of the risk of serious harm to users of such products.Environmental regulations non-complianceThe Company is subject

181、 to various federal,state,local,and foreign laws and regulations addressing environmentaland other impacts from industrial processes,waste disposal,carbon emissions,use of hazardous materials in products andoperations,recycling products,and other related matters.While the Company strives to fully co

182、mply with all applicableregulations,certain of these regulations impose liability without fault.Additionally,the Company may be held responsiblefor the prior activities of an entity it acquired.Failure to comply with these regulations could result in substantial costs,fines,and civil or criminal san

183、ctions,aswell as third-party claims for property damage or personal injury.Future environmental laws and regulations,includingdisclosure requirements,may become more stringent over time,imposing greater compliance costs,and increasing risks,penalties and reputational harm associated with violations.

184、Customers,suppliers,investors,and regulatory agencies in various jurisdictions globally are increasingly requestingor requiring disclosure and action regarding the Companys supply chain due-diligence and environmental,social,andgovernance practices.Such increased expectations and regulations may inc

185、rease compliance costs and result in reputationaldamage and loss of business if the Company is perceived to have not met such expectations.General Risk FactorsNegative impacts of economic or geopolitical uncertainty,or a health crisis,on operations and financial resultsEconomic weakness and geopolit

186、ical uncertainty(including from military conflicts and international trade disputes),as well as health-related crises(including pandemics and epidemics),have resulted,and may result in the future,in avariety of adverse impacts on the Company and its customers and suppliers.Such adverse impacts inclu

187、de decreased sales,margins,and earnings;increased logistics costs;demand uncertainty;constrained workforce participation;global supplychain disruptions;and logistics and distribution system disruptions.Such crises and uncertainties could also result in,orheighten the risks of,customer bankruptcies,c

188、ustomer delayed or defaulted payments,delays in product deliveries,financial market disruption and volatility,and other risk factors described in the Companys Annual Report.As a result,theCompany may need to impair assets(including goodwill,intangible assets,and other long-lived assets),implementres

189、tructuring actions,and reduce expenses in response to decreased sales or margins.The Company may not be able to adequately adjust its cost structure in a timely fashion,which may adversely impactits profitability.Uncertainty about economic conditions may increase foreign currency volatility,which ma

190、y negativelyimpact the Companys results.Economic weakness and geopolitical uncertainty also make it more difficult for theCompany to manage inventory levels(including when customers decrease orders,cancel existing orders,or are unable tofulfill their obligations under non-cancelable/non-return order

191、s)and collect customer receivables,which may result inprovisions to create reserves,write-offs,reduced access to liquidity,higher financing costs,and increased pressure on cashflows.An increase in or prolonged period of inflation could affect the Companys profitability and cash flows,due to higherwa

192、ges,higher operating expenses,higher financing costs,and higher supplier prices.Inflation may also adversely affectforeign exchange rates.The Company may be unable to pass along such higher costs to its customers,which may result inlower gross profit margins.In addition,inflation may adversely affec

193、t customers financing costs,cash flows,andprofitability,which could adversely impact their operations and the Companys ability to offer credit and collectreceivables.Table of Contents17CompetitionThe market for the Companys products and services is very competitive and subject to technological advan

194、ces(including artificial intelligence),new competitors,non-traditional competitors,and changes in industry standards.TheCompany competes with other global and regional distributors,as well as some of the Companys own suppliers thatmaintain direct sales efforts.In addition,as the Company expands its

195、offerings and geographies,the Company mayencounter increased competition from current or new competitors.The Companys failure to maintain and enhance itscompetitive position could adversely affect its business and prospects.Furthermore,the Companys efforts to compete inthe marketplace could cause de

196、terioration of gross profit margins and,thus,overall profitability.The size of the Companys competitors varies across market sectors,as do the resources the Company has allocatedto the sectors and geographic areas in which it does business.Therefore,some competitors may have greater resources or amo

197、re extensive customer or supplier base in some market sectors and geographic areas.As a result,the Company may notbe able to effectively compete in certain markets,which could impact the Companys profitability and prospects.Employee retention and hiring constraintsIdentifying,hiring,training,develop

198、ing,and retaining qualified and engaged employees is critical to the Companyssuccess,and competition for experienced employees in the Companys industry can be intense.Restrictions on immigrationor changes in immigration laws,including visa restrictions,may limit the Companys acquisition of key talen

199、t,includingtalent with diverse experience,background,ability,and perspectives.Changing demographics and labor work force trendsmay result in a loss of knowledge and skills as experienced workers leave the Company.In addition,as globalopportunities and industry demands shift,and as the Company expand

200、s its offerings,the Company may encounterchallenges in realigning,training,and hiring skilled personnel.Through organizational design activities,the Companyperiodically eliminates positions due to restructurings or other reasons,which may risk the Companys brand reputation asan employer of choice an

201、d negatively impact the Companys ability to hire and retain qualified personnel.Also,positioneliminations may negatively impact the morale of employees who are not terminated,which could result in work stoppagesor slowdowns,particularly where employees are represented by unions or works councils.If

202、these circumstances occur,theCompanys business,financial condition,and results of operations could be seriously harmed.Item 1B.Unresolved Staff CommentsNot applicable.Item 1C.CybersecurityThe Company recognizes the importance of assessing,identifying,and managing material risks associated withcybers

203、ecurity threats,as defined in Item 106(a)of Regulation S-K.These risks include operational risks;intellectualproperty theft;fraud;extortion;harm to employees or customers;legal risks,including violations of privacy or dataprotection laws;and reputational risks.The Company has implemented several cyb

204、ersecurity processes,technologies,andcontrols to aid in its efforts.The Companys Global Cybersecurity&Compliance(GC&C)team maintains a comprehensive cybersecurityprogram that includes policies,procedures,and standards to govern the safe processing,storage,and transmission of data.GC&C team members h

205、ave extensive knowledge and experience regarding cybersecurity and the Companys informationtechnology systems.The GC&C team leader reports directly to the Companys Chief Information Officer.Thecybersecurity program was developed using practices anchored on the National Institute of Standards and Tec

206、hnology(NIST)Cyber Security Framework(CSF)and seeks to align to the additional cybersecurity measures ofTable of Contents18NIST 800-171 and ISO27001.Cybersecurity controls are governed by Avnets Global Information Security Policy(GISP).The Company has processes for overseeing and identifying cyberse

207、curity threats,vulnerabilities,and controlsassociated with third-party service providers,including evaluating providers(i)cybersecurity ratings,(ii)publicdisclosures related to cybersecurity,(iii)cybersecurity questionnaire responses,and(iv)cybersecurity and IT certifications.The Company provides qu

208、arterly updates to,and receives oversight from,the Audit Committee on the Companyscybersecurity program,cybersecurity incidents,and the cybersecurity threat landscape.Responsible members ofmanagement provide updates to the Companys senior executive team regarding all cybersecurity incidents,thecyber

209、security program,and the threat landscape.The Companys enterprise risk management program(ERM)considers cybersecurity risks(including likelihood,potential severity,and mitigation)alongside other enterprise-wide risks as part of its overall ERM process.The GC&Cteam administers an IT risk management p

210、rogram that identifies and assesses cybersecurity risks.Its assessments areshared with the Companys enterprise risk management council(ERM Council).The GC&C team applies an incident response procedure.Among other things,the team appropriately escalates someincidents in real-time,depending on the inc

211、idents potential impact and scope.Further,the GC&C team regularlycollaborates with other departmentssuch as legal,corporate security,and human resourceswhen assessing,identifying,and managing cybersecurity incidents.The Company also retains external cybersecurity response consultants to assistintern

212、al resources as needed.The Company regularly tests the effectiveness of its security program through internal audit and externalassessments.The Company makes investments for continual improvements in risk and vulnerability mitigation,includingongoing monitoring,network and system updates,and employe

213、e cybersecurity awareness training.The Companys cybersecurity assessments and auditing include:Regular penetration tests conducted by external consultants;Regular maturity assessments conducted by external consultants;Quarterly self-assessments of internal cybersecurity capabilities;andOngoing inter

214、nal audits of cybersecurity systems and practices.The Companys employee communication and training program includes:Annual tabletop exercises performed with its executive team;Annual tabletop exercises with its cybersecurity incident response team;Annually distributing the Global Information Securit

215、y Policy(GISP)to all employees;New hire and biennial computer-based training on data privacy and cybersecurity for all employees,with in-person training for high-risk positions;Cybersecurity awareness training videos available to employees and updated quarterly;Phishing simulations conducted with em

216、ployees monthly;andNewsletters distributed to all employees on relevant cybersecurity threats.Table of Contents19Please refer to Item 1.A,Risk Factors(Data security and privacy threats)for a discussion of whether cybersecuritythreats have or will materially affect the Company,as well as the potentia

217、l impact on the Companys operations andfinancial condition.Item 2.PropertiesThe Company owns and leases approximately 2.0 million and 4.0 million square feet of space,respectively,of whichapproximately 25%is in the United States.The following table summarizes certain of the Companys key facilities:A

218、pproximate Leased Squareor LocationFootageOwnedPrimary Use Bernburg.Germany 680,000OwnedEC warehousing and value-added operations currently under constructionChandler,Arizona 400,000Owned EC warehousing and value-added operationsTongeren,Belgium 390,000Owned EC warehousing and value-added operations

219、Leeds,United Kingdom 360,000LeasedFarnell warehousing and value-added operationsPoing,Germany 300,000Owned EC warehousing and value-added operationsChandler,Arizona 230,000Leased EC warehousing,integration and value-added operationsGaffney,South Carolina 220,000OwnedFarnell warehousingHong Kong,Chin

220、a 210,000Leased EC warehousingPhoenix,Arizona 180,000LeasedCorporate and EC Americas headquartersTaipei,Taiwan 33,000LeasedEC warehousingSee Note 5,“Property,plant and equipment,net”and Note 11,“Leases”to the Companys consolidated financialstatements included in Item 8 of this Annual Report on Form

221、10-K for additional information on the Companys properties.Item 3.Legal ProceedingsPursuant to SEC regulations,including but not limited to Item 103 of Regulation S-K,the Company regularlyassesses the status of and developments in pending environmental and other legal proceedings to determine whethe

222、r anysuch proceedings should be identified specifically in this discussion of legal proceedings,and has concluded that noparticular pending legal proceeding requires public disclosure.Based on the information known to date,managementbelieves that the Company has appropriately accrued in its consolid

223、ated financial statements for its share of the estimablecosts of environmental and other legal proceedings.The Company is also currently subject to various pending and potential legal matters and investigations relating tocompliance with governmental laws and regulations,including import/export and

224、environmental matters.The Companycurrently believes that the resolution of such matters will not have a material adverse effect on the Companys financialposition or liquidity,but could possibly be material to its results of operations in any single reporting period.Item 4.Mine Safety DisclosuresNot

225、applicable.Table of Contents20PART IIItem 5.Market for Registrants Common Equity,Related Stockholder Matters and Issuer Purchases of EquitySecuritiesMarket InformationThe Companys common stock is listed on the Nasdaq Global Select Market under the symbol AVT.DividendsThe declaration and payment of f

226、uture dividends will be at the discretion of the Board of Directors and will bedependent upon the Companys financial condition,results of operations,capital requirements,and other factors the Boardof Directors considers relevant.In addition,certain of the Companys debt facilities may restrict the de

227、claration andpayment of dividends,depending upon the Companys then current compliance with certain covenants.Record HoldersAs of August 2,2024,there were 1,309 registered holders of record of Avnets common stock.Stock Performance Graphs and Cumulative Total ReturnsThe graph below matches the cumulat

228、ive 5-year total return of holders of Avnets common stock with(i)thecumulative total returns of the Nasdaq Composite Index and(ii)a customized peer group of five companies(Agilysys Inc.,Arrow Electronics Inc.,Insight Enterprises Inc.,Scansource Inc.,and TD Synnex Corporation).The graph assumes that

229、thevalue of the investment in Avnets common stock,in each index,and in the peer group(including reinvestment ofdividends)was$100 on 6/29/2019 and tracks it through 6/29/2024.Table of Contents21 6/29/2019 6/27/2020 7/3/2021 7/2/2022 7/1/2023 6/29/2024 Avnet,Inc.$100$58.93$92.88$100.49$123.19$128.95Na

230、sdaq Composite 100 123.12 186.10 142.44 178.08 230.80Peer Group 100 97.85 195.13 173.37 213.64 248.09The stock price performance included in this graph is not necessarily indicative of future stock price performance.Issuer Purchases of Equity SecuritiesThe Companys Board of Directors has approved th

231、e repurchase plan of up to an aggregate of$600 million ofcommon stock.The following table includes the Companys monthly purchases of the Companys common stock,excluding excise tax,during the fourth quarter of fiscal 2024,under the share repurchase program,which is part of publiclyannounced plans.Tab

232、le of Contents22 Total Number of Approximate Dollar TotalAverage Shares Purchased Value of Shares That NumberPrice as Part of Publicly May Yet Be of SharesPaid per Announced Plans Purchased under the PeriodPurchased Share or Programs Plans or Programs March 31 April 27$232,484,000April 28 May 25 560

233、,000$53.17 560,000$202,707,000May 26 June 29 920,000$53.23 920,000$153,734,000Item 6.ReservedItem 7.Managements Discussion and Analysis of Financial Condition and Results of OperationsFor a description of the Companys critical accounting policies and an understanding of Avnet and the significantfact

234、ors that influenced the Companys performance during the past three fiscal years,the following discussion should beread in conjunction with the description of the business appearing in Item 1 of this Report and the consolidated financialstatements,including the related notes and schedule,and other in

235、formation appearing in Item 8 of this Report.Discussionsof fiscal 2022 items and year-to-year comparisons between fiscal years 2023 and 2022 are not included in this Form 10-Kand can be found in“Managements Discussion and Analysis of Financial Condition and Results of Operations”in Part II,Item 7 of

236、 the Companys Annual Report on Form 10-K for the fiscal year ended July 1,2023.The Company operates on a“52/53 week”fiscal year.Fiscal years 2024,2023 and 2022 each contained 52 weeks.The discussion of the Companys results of operations includes references to the impact of foreign currencytranslatio

237、n.When the U.S.Dollar strengthens and the stronger exchange rates are used to translate the results of operationsof Avnets subsidiaries denominated in foreign currencies,the result is a decrease in U.S.Dollars of reported results.Conversely,when the U.S.Dollar weakens,the weaker exchange rates resul

238、t in an increase in U.S.Dollars of reportedresults.In the discussion that follows,results excluding this impact,primarily for subsidiaries in EMEA and Asia,arereferred to as“constant currency.”In addition to disclosing financial results that are determined in accordance with generally accepted accou

239、ntingprinciples in the U.S.(“GAAP”),the Company also discloses certain non-GAAP financial information,including:“Adjusted operating income,”which is operating income excluding(i)restructuring,integration and otherexpenses,(ii)Russian-Ukraine conflict related expenses,and(iii)amortization of acquired

240、 intangible assets.The following table provides a reconciliation of operating income to adjusted operating income:Years Ended June 29,July 1,July 2,202420232022(Thousands)Operating income$844,367$1,186,800$939,011Restructuring,integration and other expenses 52,550 28,038 5,272Russian-Ukraine conflic

241、t related expenses 26,261Amortization of acquired intangible assets 3,130 6,053 15,038Adjusted operating income$900,047$1,220,891$985,582Management believes that providing this additional information is useful to financial statement users to better assessand understand operating performance,especial

242、ly when comparing results with prior periods or forecasting performancefor future periods,primarily because management typically monitors the business both including and excluding theseadjustments to GAAP results.Management also uses these non-GAAP measures to establish operationalTable of Contents2

243、3goals and,in many cases,for measuring performance for compensation purposes.However,any analysis of results on anon-GAAP basis should be used as a complement to,and in conjunction with,results presented in accordance with GAAP.Industry outlookThe global electronic components market has a history of

244、 cyclical downturns followed by periods of increaseddemand.Beginning in the second half of calendar year 2023,the industry began to experience a downturn marked by adecrease in sales due to a combination of elevated customer inventory levels and lower underlying demand for electroniccomponents.As a

245、result,the Company has seen elevated inventory levels and decreased sales,resulting in lower operatingincome.The duration of the current downturn is uncertain.The Company expects sales in the first quarter of fiscal 2025 tobe flat to 5%lower than fourth quarter of fiscal 2024 sales,which will negati

246、vely impact operating income and dilutedearnings per share.Results of OperationsYears EndedJune 29,2024July 1,2023VarianceVariance%($in millions,unless otherwise stated)Sales$23,757$26,537$(2,780)(10.5)%Gross profit 2,766 3,182(416)(13.1)%Selling,general and administrative expenses 1,870 1,967(98)(5

247、.0)%Restructuring,integration,and other expenses 53 28 25 87.4%Operating income 844 1,187(342)(28.9)%Adjusted operating income 900 1,221(321)(26.3)%Other(expense)income,net(16)10(26)(258.8)%Interest and other financing expenses,net(283)(251)(32)12.8%Gain on legal settlements and other 86 37 49 133.5

248、%Income tax expense 134 212(78)(37.0)%Net income 499 771(272)(35.3)%Diluted earnings per share 5.43 8.26(2.83)(34.3)%Other MetricsGross profit margin 11.6%12.0%(35)bps(0.4)%Operating income margin 3.6%4.5%(92)bps(0.9)%Adjusted operating income margin 3.8%4.6%(81)bps(0.8)%Effective tax rate 21.1%21.6

249、%(45)bps(0.5)%Table of Contents24SalesAnalysis of Sales:By Operating Group and GeographyThe table below provides sales decline rates for fiscal 2024 as compared to fiscal 2023 as reported and on a constantcurrency basis by geographic region and operating group.SalesYear-Year%Years EndedSalesChange i

250、n June 29,%ofJuly 1,%ofYear-Year%Constant2024 Total 2023Total ChangeCurrency(Dollars in millions)Sales by Operating Group:EC$22,160.0 93.3%$24,802.6 93.5%(10.7)%(11.0)%Farnell 1,597.1 6.7 1,734.3 6.5(7.9)(9.3)Total Avnet$23,757.1$26,536.9(10.5)(10.9)Sales by Geographic Region:Americas$5,919.2 24.9%$

251、6,807.7 25.7%(13.1)%(13.1)%EMEA 8,395.0 35.3 9,229.4 34.8(9.0)(11.4)Asia 9,442.9 39.8 10,499.8 39.5(10.1)(9.0)Total Avnet$23,757.1$26,536.9Avnets sales for fiscal 2024 were$23.76 billion,a decrease of$2.78 billion,or 10.5%,from fiscal 2023 sales of$26.54 billion.Sales in constant currency decreased

252、10.9%year over year,reflecting a reduction in sales volume primarilydue to the on-going market downturn occurring across the electronic components industry and,to a lesser extent,anunfavorable product mix of lower priced electronic components.EC sales in fiscal 2024 were$22.16 billion,representing a

253、 10.7%decrease over fiscal 2023 sales of$24.80 billion.EC sales decreased 11.0%year over year in constant currency.The decrease in EC sales is primarily due to sales volumedecreases across all three regions due to the market downturn in the electronic components industry and,to a lesser extent,an un

254、favorable product mix of lower-priced electronic components.Average selling prices of electronic components at ECremained relatively stable between fiscal 2024 and fiscal 2023.Farnell sales in fiscal 2024 were$1.60 billion,a decrease of$137.2 million or 7.9%,from fiscal 2023 sales of$1.73billion.The

255、 year-over-year decrease in sales was primarily a result of lower demand,including lower demand for on-the-board electronic components,partially offset by increases in availability and demand for single-board computers.Gross ProfitThe Companys gross profit is primarily affected by sales volume and g

256、eographic sales mix.Gross profit in fiscal2024 was$2.77 billion,a decrease of$415.7 million,or 13.1%,from fiscal 2023 gross profit of$3.18 billion primarily dueto lower sales volumes,as described above.Gross profit margin decreased to 11.6%in fiscal 2024 or 35 basis points fromfiscal 2023 gross prof

257、it margin of 12.0%.The decrease in gross profit margin is primarily due to an increase in product mixto lower margin electronic components.Sales in the higher margin western regions represented approximately 60%of salesin both fiscal 2024 and fiscal 2023.Table of Contents25EC gross profit margin dec

258、reased year over year largely due to an increase in product mix to lower margin electroniccomponents.Average selling prices of electronic components at EC remained relatively stable between fiscal 2024 andfiscal 2023.Farnell gross profit margin decreased year over year,primarily due to lower sales o

259、f higher margin on-the-boardelectronic components and the unwinding of component shortage pricing premiums for on-the-board electroniccomponents in fiscal 2024.Selling,General and Administrative ExpensesSelling,general and administrative expenses(“SG&A expenses”)in fiscal 2024 were$1.87 billion,a de

260、crease of$97.8 million,or 5.0%,from fiscal 2023.The year-over-year decrease in SG&A expenses was primarily due to decreasesin variable operating expenses associated with the decrease in sales volumes discussed above and to a lesser extent theimpact of restructuring actions,partially offset by increa

261、ses in costs due to inflation and the impact of changes in foreigncurrency translation rates.Metrics that management monitors with respect to its operating expenses are SG&A expenses as a percentage ofsales and as a percentage of gross profit.In fiscal 2024,SG&A expenses as a percentage of sales wer

262、e 7.9%and as apercentage of gross profit were 67.6%,as compared with 7.4%and 61.8%,respectively,in fiscal 2023.The increases inSG&A expenses as a percentage of sales and gross profit resulted primarily from the decreases in sales and gross profitwithout a proportional reduction in SG&A expenses,resu

263、lting in lower operating leverage.Restructuring,Integration and Other ExpensesDuring fiscal 2024,the Company implemented a plan to reduce SG&A expenses at Farnell and deliver approximately$60 million in annual expense reductions.Additionally,the Company began expense reduction initiatives within EC

264、andfor corporate expenses,which are expected to yield additional annual cost savings of approximately$50 million whencompleted.As such,the Company recorded$39.5 million for restructuring costs in fiscal 2024 primarily related toseverance and other employee-related expenses associated with the reduct

265、ion,or planned reduction,of approximately 600employees across the Company.The Company also incurred integration,and other expenses of$13.1 million.Integrationexpenses of$13.1 million related to the Companys consolidation of several smaller warehouses predominantly related toFarnell,and other expense

266、s of$5.5 million related to certain costs associated with potential M&A activity that did not leadto a transaction.Additionally,the Company recorded a benefit of$5.5 million,primarily related to environmentalremediation reserves after entering into a favorable consent decree with a state agency for

267、a certain environmental cleanupmatter.The after-tax impact of restructuring,integration,and other expenses were$39.6 million and$0.43 per share on adiluted basis.During fiscal 2023 the Company recorded restructuring,integration,and other expenses of$28.0 million,whichincludes$17.4 million for restru

268、cturing costs,consisting of$16.1 million for severance,$0.5 million for facility exit costs,and$0.8 million for asset impairments.See Note 17,“Restructuring expenses”to the Companys consolidated financial statements included in Item 8 of thisAnnual Report on Form 10-K for additional information rela

269、ted to restructuring expenses.Operating IncomeOperating income for fiscal 2024 was$844.4 million,a decrease of$342.4 million or 28.9%,from fiscal 2023operating income of$1.19 billion.Operating income margin was 3.6%in fiscal 2024 compared to 4.5%in fiscal 2023.Table of Contents26Adjusted operating i

270、ncome for fiscal 2024 was$900.0 million,a decrease of$320.8 million or 26.3%,from fiscal 2023adjusted operating income of$1.22 billion.Adjusted operating income margin was 3.8%in fiscal 2024 compared to 4.6%in fiscal 2023.The decreases in operating income and operating income margin are primarily du

271、e to the decrease in grossprofit primarily from lower sales without a proportionate decrease in SG&A expenses,as discussed above.Additionally,the Company incurred higher restructuring,integration,and other expenses during fiscal 2024 compared to such expensesin fiscal 2023.EC operating income decrea

272、sed 19.7%to$947.6 million,and EC operating income margin decreased 48 basis pointsto 4.3%in fiscal 2024,with all three regions contributing to the decrease.Farnell operating income decreased 60.8%to$64.8 million in fiscal 2024 and Farnell operating income margin decreased 548 basis points to 4.1%in

273、fiscal 2024.Thedecreases in operating income and operating income margin in both operating groups are due to the decrease in gross profitprimarily from lower sales and gross margin without a proportionate decrease in SG&A expenses.Interest and Other Financing Expenses,Net and Other(Expense)Income,Ne

274、tInterest and other financing expenses for fiscal 2024 was$282.9 million,an increase of$32.0 million,or 12.8%,compared with interest and other financing expenses of$250.9 million in fiscal 2023.The increase in interest and otherfinancing expenses in fiscal 2024 compared to fiscal 2023 is a result of

275、 higher outstanding borrowings and increases inaverage borrowing rates.The Company had other expenses of$15.7 million in fiscal 2024,compared to other income of$9.9 million in fiscal2023.The increase in other expenses is primarily due to foreign currency translation losses.Gain on Legal Settlements

276、and OtherDuring fiscal 2024 and fiscal 2023,the Company recorded a gain on legal settlements and other of$86.5 million and$74.4 million,respectively,in connection with the settlement of claims filed against certain manufacturers of capacitors.Infiscal 2023,the Company settled a portion of its pensio

277、n liability related to certain retirees and terminated vestedemployees in the Companys U.S.pension plan as part of a de-risking strategy and recognized non-cash settlement expenseof$37.4 million.See Note 13,“Commitments and contingencies”to the Companys consolidated financial statementsincluded in I

278、tem 8 of this Annual Report on Form 10-K for additional information related to the gain on legal settlements.Income TaxIncome tax expenses were$133.6 million in fiscal 2024,reflecting an effective tax rate of 21.1%as compared toincome tax expenses of$212.0 million in fiscal 2023,reflecting an effect

279、ive tax rate of 21.6%.The decrease in theeffective tax rate in fiscal 2024 as compared to fiscal 2023 was primarily due to the mix of income in lower tax foreignjurisdictions,partially offset by increases to unrecognized tax benefit reserves,net of settlements.See Note 9,“Income taxes”to the Company

280、s consolidated financial statements included in Item 8 of this AnnualReport on Form 10-K for further discussion on the effective tax rate.Net IncomeAs a result of the factors described in the preceding sections of this MD&A,the Companys net income in fiscal 2024was$498.7 million,or earnings per shar

281、e on a diluted basis of$5.43,compared with fiscal 2023 net income of$770.8million,or earnings per share on a diluted basis of$8.26.Table of Contents27Liquidity and Capital ResourcesCash FlowsOperating ActivitiesNet cash provided by operating activities was$690.0 million during fiscal 2024,compared t

282、o net cash used byoperating activities of$713.7 million during fiscal 2023.The$1.40 billion increase in net cash provided by operatingactivities year over year is primarily due to improvements in cash used for working capital and other as working capitallevels have reduced as a result of declines in

283、 sales,offset by lower cash provided by net income.Cash generated byworking capital and other was$11.2 million during fiscal 2024,compared to cash used for working capital of$1.68 billionduring fiscal 2023,with the difference attributable primarily to cash used for inventories.During fiscal 2024,the

284、 Companyused less cash for inventories as less inventory was purchased due to inventory levels already being elevated and becauseof lower sales.The Company also had decreases in accounts receivable due to lower sales when compared to the prior year.The Company received$90.7 million of cash from lega

285、l settlements during fiscal 2024 as compared to$69.9 million ofcash received from legal settlements during fiscal 2023.Financing ActivitiesNet repayments of debt totaled$156.5 million during fiscal 2024,including the repayment of$140.7 million underthe Securitization Program,and$43.3 million under t

286、he Credit Facility,offset by net proceeds of$27.5 million for otherdebt.This compares to$1.39 billion of net borrowing during fiscal 2023.The Company paid cash dividends toshareholders of$1.24 per share,or$112.0 million,during fiscal 2024 as compared to$1.16 per share,or$106.3 million,during fiscal

287、2023.The Company has repurchased$162.7 million of common stock under the share repurchase plan duringfiscal 2024 compared to$221.7 million during fiscal 2023.Investing ActivitiesThe Companys purchases of property,plant and equipment increased during fiscal 2024 by$31.8 million,whencompared to fiscal

288、 2023,primarily due to a distribution center investment in EMEA.During fiscal 2023,the Companyused$16.9 million for other investing activities.Financing TransactionsThe Company uses a variety of financing arrangements,both short-term and long-term,to fund its operations inaddition to historical cash

289、 generated from operating activities.The Company also uses several funding sources to avoidbecoming overly dependent on one financing source,and to lower overall funding costs.These financing arrangementsinclude public debt(“Notes”),short-term and long-term bank loans,a revolving credit facility(the

290、“Credit Facility”),andan accounts receivable securitization program(the“Securitization Program”).The Company has various lines of credit,financing arrangements,and other forms of bank debt in the U.S.andvarious foreign locations to fund the short-term working capital,foreign exchange,overdraft,capit

291、al expenditure,and letterof credit needs of its wholly owned subsidiaries.Outstanding borrowings under such forms of debt at the end of fiscal 2024was$100.4 million.As an alternative form of liquidity outside of the United States,the Company sells certain of its trade accountsreceivable on a non-rec

292、ourse basis to financial institutions pursuant to factoring agreements.The Company accounts forthese transactions as sales of receivables and presents cash proceeds as cash provided by operating activities in theTable of Contents28consolidated statements of cash flows.Factoring fees for the sales of

293、 trade accounts receivable are classified within“Interest and other financing expenses,net”of the consolidated financial statements.See Note 7,“Debt”to the Companys consolidated financial statements included in Item 8 of this Annual Report onForm 10-K for additional information on financing transact

294、ions including the Credit Facility,the Securitization Programand the outstanding Notes as of June 29,2024.Covenants and ConditionsThe Companys Credit Facility contains certain covenants with various limitations on debt incurrence,sharerepurchases,dividends,investments and capital expenditures,and al

295、so includes financial covenant requiring the Companyto maintain a leverage ratio below a certain threshold.The Company was in compliance with all such covenants as of June29,2024.The Companys Securitization Program contains certain covenants relating to the quality of the receivables sold.Ifthese co

296、nditions are not met,the Company may not be able to borrow any additional funds and the financial institutionsmay consider this an amortization event,as defined in the Securitization Program agreements,which would permit thefinancial institutions to liquidate the accounts receivables sold to cover a

297、ny outstanding borrowings.Circumstances thatcould affect the Companys ability to meet the required covenants and conditions of the Securitization Program include theCompanys ongoing profitability and various other economic,market,and industry factors.The Company was incompliance with all such covena

298、nts as of June 29,2024.Management does not believe that the covenants under the Credit Facility or Securitization Program limit theCompanys ability to pursue its intended business strategy or its future financing needs.See Liquidity below for further discussion of the Companys availability under the

299、se various facilities.LiquidityThe Company held cash and cash equivalents of$310.9 million as of June 29,2024,of which$179.6 million washeld outside the United States.As of July 1,2023,the Company held cash and cash equivalents of$288.2 million,of which$194.5 million was held outside of the United S

300、tates.During periods of weakening demand in the electronic components industry,the Company typically generates cashfrom operating activities.Conversely,the Company will use cash for working capital requirements during periods of highergrowth.The Company generated$690.0 million in cash flows for oper

301、ating activities during the fiscal year ended June 29,2024.Liquidity is subject to many factors,such as normal business operations and general economic,financial,competitive,legislative,and regulatory factors that are beyond the Companys control.Cash balances held in foreignlocations that cannot be

302、remitted back to the U.S.in a tax efficient manner are generally used for ongoing working capital,including the need to purchase inventories,capital expenditures and other foreign business needs.In addition,localgovernment regulations may restrict the Companys ability to move funds among various loc

303、ations under certaincircumstances.Management does not believe such restrictions would limit the Companys ability to pursue its intendedbusiness strategy.As of June 29,2024,there were$745.5 million of borrowings outstanding under the Credit Facility and$0.9 millionin letters of credit issued,and$415.

304、1 million outstanding under the Securitization Program.During fiscal 2024,Table of Contents29the Company had an average daily balance outstanding under the Credit Facility of approximately$1.17 billion and$596.7million under the Securitization Program.As of June 29,2024,the combined availability und

305、er the Credit Facility and theSecuritization Program was$844.5 million.Availability under the Securitization Program is subject to the Company havingsufficient eligible trade accounts receivable in the United States to support desired borrowings.The Company has the following contractual obligations

306、outstanding as of June 29,2024(in millions):Payments due by period Less thanMore thanContractual ObligationsTotal1 year1-3 years3-5 years5 years Long-term debt obligations(1)$2,910.9$492.7$550.0$1,245.5$622.7Interest expense on long-term debt obligations(2)493.9 134.9 211.0 78.2 69.8Operating lease

307、obligations(3)266.8 60.0 81.0 41.8 84.0(1)Includes amounts due within one year and excludes unamortized discount and issuance costs on debt.(2)Represents interest expense due on debt by using fixed interest rates for fixed rate debt and assuming the same interestrate at the end of fiscal 2024 for va

308、riable rate debt.(3)Excludes imputed interest on operating lease liabilities.The Company purchases inventories in the normal course of business throughout the year through the issuance ofpurchase orders to suppliers.During fiscal 2024,the Companys cost of sales,substantially all of which related to

309、theunderlying purchase of inventories was$21.0 billion and the Company had$5.5 billion of inventories as of June 29,2024.The Company expects to continue to purchase sufficient inventory to meet its customers demands in fiscal year 2025,some of which relates to outstanding purchase orders at the end

310、of fiscal 2024.Outstanding purchase orders with suppliersmay be non-cancellable/non-returnable at the point such orders are issued,or may become non-cancellable at some point inthe future,typically within 30 days to 90 days from the requested delivery date of inventories.At June 29,2024,the Company

311、had an estimated liability for income tax contingencies of$130.3 million,which isnot included in the above table.No cash payments associated with the settlement of these liabilities are expected to be paidwithin the next 12 months.The settlement period for the remaining amount of the unrecognized ta

312、x benefits,includingrelated accrued interest and penalties,cannot be determined,and therefore was not included in the table.As of June 29,2024,the Company may repurchase up to an aggregate of$153.7 million of shares of the Companyscommon stock through the share repurchase program approved by the Boa

313、rd of Directors.The Company may repurchasestock from time to time at the discretion of management,subject to strategic considerations,market conditions includingshare price and other factors.The Company may terminate or limit the share repurchase program at any time without priornotice.During fiscal

314、 2024,the Company repurchased$164.8 million of common stock.The Company has historically paid quarterly cash dividends on shares of its common stock,and future dividends aresubject to approval by the Board of Directors.During the fourth quarter of fiscal 2024,the Board of Directors approved adividen

315、d of$0.31 per share,which resulted in$27.8 million of dividend payments during the quarter.The Company continually monitors and reviews its liquidity position and funding needs.Management believes thatthe Companys ability to generate operating cash flows through the liquidation of working capital in

316、 the future andavailable borrowing capacity,including capacity for the non-recourse sale of trade accounts receivable,will be sufficient tomeet its future liquidity needs.Additionally,the Company believes that it has sufficient access to additional liquidity fromthe capital markets if necessary.Tabl

317、e of Contents30Critical Accounting PoliciesThe Companys consolidated financial statements have been prepared in accordance with GAAP.The preparation ofthese consolidated financial statements requires the Company to make estimates and assumptions that affect the reportedamounts of assets,liabilities,

318、sales and expenses.These estimates and assumptions are based upon the Companyscontinual evaluation of available information,including historical results and anticipated future events.Actual results maydiffer materially from these estimates.The Securities and Exchange Commission defines critical acco

319、unting policies as those that are,in managementsview,most important to the portrayal of the Companys financial condition and results of operations and that requiresignificant judgments and estimates.Management believes the Companys most critical accounting policies at the end offiscal 2024 relate to

320、 the valuation of inventories and accounting for income taxes.Valuation of InventoriesInventories are recorded at the lower of cost or estimated net realizable value.Inventory cost includes the purchaseprice of finished goods and any freight cost incurred to receive the inventory into the Companys d

321、istribution centers.TheCompanys inventories include electronic components sold into changing,cyclical,and competitive markets,so inventoriesmay decline in market value or become obsolete.The Company regularly evaluates inventories for expected customer demand,obsolescence,current market prices,and o

322、ther factors that may render inventories less marketable.Write-downs are recorded so that inventories reflect theestimated net realizable value and take into account the Companys contractual provisions with its suppliers,which mayprovide certain protections to the Company for product obsolescence an

323、d price erosion in the form of rights of return,stockrotation rights,obsolescence allowances,industry specific supplier rebate programs and price protections.Because of thelarge number of products and suppliers and the complexity of managing the process around price protections,supplierrebate progra

324、ms and stock rotations,estimates are made regarding the net realizable value of inventories.Additionally,assumptions about future demand and market conditions,as well as decisions to discontinue certain product lines,impactthe evaluation of whether to write-down inventories.If future demand changes

325、or actual market conditions are lessfavorable than assumed,then management evaluates whether additional write-downs of inventories are required.In anycase,actual net realizable values could be different from those currently estimated.Accounting for Income TaxesManagements judgment is required in det

326、ermining income tax expense,unrecognized tax benefit liabilities,deferredtax assets and liabilities,and valuation allowances recorded against net deferred tax assets.Recovering net deferred taxassets depends on the Companys ability to generate sufficient future taxable income in certain jurisdiction

327、s.In addition,when assessing the need for valuation allowances,the Company considers historic levels and types of income,expectationsand risk associated with estimates of future taxable income,and ongoing prudent and feasible tax planning strategies.If theCompany determines that it cannot realize al

328、l or part of its deferred tax assets in the future,it may record additionalvaluation allowances against the deferred tax assets with a corresponding increase to income tax expense in the period suchdetermination is made.Similarly,if the Company determines that it can realize all or part of its defer

329、red tax assets that havean associated valuation allowance established,the Company may release a valuation allowance with a correspondingbenefit to income tax expense in the period such determination is made.The Company establishes contingent liabilities for potentially unfavorable outcomes of positi

330、ons taken on certain taxmatters.These liabilities are based on managements assessment of whether a tax benefit is more likely than not to besustained upon examination by tax authorities.The anticipated and actual outcomes of these matters may differ,whichTable of Contents31may result in changes in e

331、stimates to such unrecognized tax benefit liabilities.To the extent such changes in estimates arenecessary,the Companys effective tax rate may fluctuate.In accordance with the Companys accounting policy,accruedinterest and penalties related to unrecognized tax benefits are recorded as a component of

332、 income tax expense.In determining the Companys income tax expense,management considers current tax regulations in the numerousjurisdictions in which it operates,including the impact of tax law and regulation changes in the jurisdictions the Companyoperates in.The Company exercises judgment for inte

333、rpretation and application of such current tax regulations.Changes tosuch tax regulations or disagreements with the Companys interpretation or application by tax authorities in any of theCompanys major jurisdictions may have a significant impact on the Companys income tax expense.See Note 9,“Income taxes”to the Companys consolidated financial statements included in Item 8 of this AnnualReport on F