Avnet 2014 Annual Report Download - page 26

other restructuring expenses. Integration costs and other costs primarily associated with acquisitions were $9.4 million and $17.2 million
,
respectively. The Company also recorded a benefit of $3.3 million
for changes in estimates for restructuring liabilities established in prior years.
The after tax impact of restructuring, integration and other expenses was $53.0 million and $0.35 per share on a diluted basis.
See Note 17, "Restructuring, integration and other expenses" to the Company's consolidated financial statements included in this Annual
Report on Form 10-K for additional information related to restructuring, integration and other expenses.
Operating Income
During fiscal 2014 , the Company had operating income of $789.9 million , representing a 26.2%
increase as compared with fiscal 2013
operating income of $626.0 million . Consolidated operating income margin was 2.9% as compared with 2.5%
in fiscal 2013. Both years
included restructuring, integration and other expenses and the amortization of intangible assets. Excluding these amounts from both years,
adjusted operating income was $931.3 million , or 3.4% of sales, in fiscal 2014 representing a 15.3% increase as compared with $807.9 million
,
or 3.2% of sales, in fiscal 2013. EM operating income of $747.9 million increased 17.7%
year over year, led by EM EMEA with higher sales
and operating income compared to fiscal 2013, and with all EM regions delivering increased operating income in comparison to fiscal 2013.
EM's operating income margin increased 31 basis points year over year to 4.5%
. The increase in EM operating income margin was primarily
due to increases at EM Americas and EM Asia due primarily to a combination of reduced operating expenses as a result of recent restructuring
and cost reduction initiatives as well as improved operating leverage, partially offset by increases in operating expenses at EM EMEA from a
recent acquisition, from which all synergies have not yet been realized. TS operating income of $317.8 million increased 6.2%
year over year
and operating income margin remained essentially flat at 2.9%
, with improvements at TS Asia being offset by declines in the western regions.
Corporate net operating expenses were $134.4 million in fiscal 2014 as compared with $126.9 million in fiscal 2013 .
During fiscal 2013 , the Company generated operating income of $626.0 million , down 29.2% , as compared with $884.2 million
in fiscal
2012. Consolidated operating income margin was 2.5% as compared with 3.4%
in fiscal 2012. Both years included restructuring, integration and
other expenses and the amortization of intangible assets. Excluding these amounts from both years, adjusted operating income was
$807.9
million , or 3.2% of sales, in fiscal 2013 as compared with $985.5 million , or 3.8% of sales, in fiscal 2012. EM operating income of
$635.6
million was down 16.3% year over year and operating income margin decreased 88 basis points year over year to 4.2%
. The decline in EM
operating income margin was primarily due to lower gross profit margin as previously mentioned, which resulted in lower operating income in
the western regions, offset partially by the benefits of restructuring and cost reduction actions taken. TS operating income of
$299.1 million
decreased 11.7% year over year and operating income margin decreased 26 basis points to 2.9%
due primarily to the effects of the decline in
sales, as previously described and, to a lesser extent, the effects of recent acquisitions. Corporate operating expenses were $126.9 million
in
fiscal 2013 as compared with $112.9 million in fiscal 2012 .
Interest Expense
Interest expense for fiscal 2014 was $104.8 million , a decrease of $2.8 million , or 2.6% , compared with fiscal 2013
. The decrease in
interest expense was primarily due to the repayment at maturity of $300.0 million of 5.875% Notes at the end of the third quarter of fiscal 2014
and a corresponding lower average borrowing rate. This decrease was partially offset by higher average outstanding debt during fiscal
2014
compared to fiscal 2013 .
Interest expense for fiscal 2013 was $107.7 million , an increase of $16.8 million , or 18.5%
, compared with fiscal 2012. The increase in
interest expense was primarily due to a higher average debt in fiscal 2013, which was impacted by the $350.0 million of 4.875% Notes issued
during the second quarter of fiscal 2013.
See Financing Transactions for further discussion of the Company's outstanding debt.
Other Income (Expense), net
During fiscal 2014 , the Company recognized $6.1 million of other expense as compared with $0.1 million
in fiscal 2013. The increase in
other expense in fiscal 2014 is primarily is attributable to fiscal 2013 benefiting from a realized gain on the sale of marketable securities and to a
lesser extent higher interest income compared to fiscal 2013. Fiscal 2014 and fiscal 2013 had similar amounts of net foreign currency exchange
losses and both years were impacted by the devaluation of the Venezuelan currency.
During fiscal 2013 , the Company recognized $0.1 million of other expense as compared with other expense of $5.4 million
in fiscal 2012.
The decrease in other expense was primarily attributable to lower foreign currency exchange losses in fiscal 2013
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