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TableofContents
TSsalesof$10.58billionforfiscal2015decreased3.4%fromfiscal2014salesof$10.96billion.Salesremainedflatyear
overyearinconstantcurrency.Ontheregionalbasis,salesintheAmericasregionincreased2.3%.InEMEA,salesinconstant
currency decreased 1.4%. Asia sales decreased 13.6% year over year, which was primarily due to double digit declines in
computingcomponents.
Gross Profit and Gross Profit Margins
Grossprofitinfiscal2016was$3.04billion,adecreaseof$155.6million,or4.9%,fromfiscal2015.Grossprofitdecreased
3.3%yearoveryearonanorganicbasisinconstantcurrencyprimarilyresultingfromdecreasesinsalesatbothoperatinggroups.
Grossprofitmarginof11.6%increased16basispointsyearoveryearprimarilyasaresultofincreasesatTSduetoproductmix
differencebetweenyears.
Grossprofitinfiscal2015was$3.19billion,adecreaseof$32.6million,or1.0%,fromfiscal2014andanincreaseof3.3%
yearoveryearonanorganicbasisinconstantcurrency.Grossprofitmarginof11.4%decreased30basispointsyearoveryear.
EMgrossprofitmargindecreasedyearoveryearprimarilyrelatedtotheabovementionedgeographicmixshifttowardsAsia,the
weakerEuroadverselyimpactingthecontributiontogrossprofitmarginfromthehighermarginEMEAregionandfromdeclines
inAsiafrom an increase inselect highvolume supplychain engagements,whichwerepartially offset byan increase ingross
profit margin in EMEA. TS gross profit margindecreased slightly year over year, with improvements in the EMEA and Asia
regionsbeingoffsetbyadeclineintheAmericas.
Selling, General and Administrative Expenses
Selling,general and administrative expenses (“SG&Aexpenses”)were$2.17 billion infiscal2016,adecrease of $104.1
million,or4.6%,fromfiscal2015.Theyear-over-yeardecreaseinSG&AexpenseswasprimarilyduetoreductionsatbothEM
and TS as a result of changes in foreign currency exchange rates between years, and the impact of prior restructuring actions
partially offset by an increase in SG&A expenses for acquisitions and other costs, including employee merit compensation
increasesthattookplaceinJanuary2016.Infiscal2016,SG&Aexpensesasapercentageofsaleswere8.3%andasapercentage
ofgrossprofitwere71.5%ascomparedwith8.1%and71.2%,respectively,infiscal2015.SG&Aexpensesasapercentageof
gross profit at EM increased 147 basis points year over year due primarily to lower sales, partially offset by lower SG&A
expensesdueprimarilytothebenefitsofrecentrestructuringandcostsavingsactions.SG&Aexpensesasapercentageofgross
profit at TS decreased 64 basis points from fiscal 2015 due primarily to the benefits of recent restructuring and cost savings
actionsandimprovementsingrossprofitmargininallthreeregions.
SG&Aexpenseswere$2.27billioninfiscal2015, adecreaseof $66.5million,or2.8%,fromfiscal2014. Thisdecrease
consistedprimarilyofdecreasesduetotheimpactofdifferencesinforeigncurrencyexchangeratesbetweenthefiscalyearsand
decreasesduetopriorrestructuringactions.Thesedecreaseswerepartiallyoffsetbyincreasesduetofiscal2014acquisitionsand
increasestofundorganic growthandother costs.Infiscal2015,SG&Aexpensesasapercentageofsaleswere8.1%andasa
percentage of gross profit were 71.2% as compared with 8.5% and 72.6%, respectively, in fiscal 2014. SG&A expenses as a
percentageofgrossprofitatEMdecreased197basispointsyearoveryeardueprimarilytothebenefitsofrecentrestructuring
andcostsavingsactionsandfromanincreaseingrossprofitduetoincreasedsales,partiallyoffsetbyincreasesassociatedwith
fiscal2014acquisitionsandincreasestofundorganicgrowthandothercosts.SG&Aexpensesasapercentageofgrossprofitat
TSdecreased224basispoints from fiscal 2014 due primarily tothe benefits ofrecent restructuringandcostssavingsactions,
partiallyoffsetbythedecreaseingrossprofitandincreasestofundorganicgrowthandothercosts.
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