Please stand by. Our presentation will now begin. I would now like to turn the floor over to Vince Keenan, Avnet's Vice President of Investor Relations.

Good morning, and welcome to Avnet's Third Quarter Fiscal Year 2017 Business and Financial Update. As a result of the sale of Technology Solutions business which was completed in February 2017, Avnet reports the TS business as a discontinued operation and prior periods have been adjusted for comparability. As we provide the highlights for our third quarter fiscal year 2017, please note that in the accompanying remarks we have excluded certain items, including intangible asset amortization expense, restructuring, integration and other items, and certain discrete income tax adjustments from all periods covered in our non-GAAP results. When we refer to constant currency or the impact of foreign currency, we mean the impact due to the change in foreign currency exchange rates when translating Avnet's non-U.S. dollar-based financial statements into U.S. dollars. When we refer to organic sales, we have adjusted the prior period to include the impact of acquisitions. In addition, when addressing return on capital employed, return on working capital and working capital velocity, the definitions are included in the non-GAAP section of our press release. Before we get started with the presentation from Avnet management, I would like to review Avnet's Safe Harbor statement. This call contains certain forward-looking statements, which are statements addressing future financial and operating results of Avnet. There are several factors that could cause actual results to differ materially from those described in the forward-looking statements. More detailed information about these and other factors is set forth in Avnet's filings with the Securities and Exchange Commission. In just a few moments, Bill Amelio, Avnet's CEO, will provide an update on the quarterly highlights as well as address our decision to move to a global ERP system. Following Bill, our Chief Financial Officer, Kevin Moriarty, will review key financial metrics including additional color on our fourth quarter fiscal 2017 and full-year fiscal 2018 guidance. At the conclusion of Kevin's remarks, a Q&A will follow. With that, let me introduce Mr. Bill Amelio to discuss Avnet's third quarter fiscal 2017 business highlights.

Thank you, Vince and hello, everyone. Thank you for taking the time to be with us and your interest in Avnet. At the end of February, we concluded the sale of Technology Solutions business to Tech Data Corporation for $2. billion (sic) [$2.4 billion] of cash and approximately $250 million of Tech Data's stock. This transaction marks a significant strategic step in our transformation, as we focus our energies and our expertise on being the best component and solutions partner for our customers and our suppliers. When you consider the sale of TS combined with the additions of Premier Farnell, Hackster.io, Avnet is developing unparalleled capabilities in helping our customers move from idea to product and from product to market. With over 6,000 engineers within our design communities and over 2 million customers globally, Avnet is positioned at the sweet spot of the industry, able to offer tailored solutions to small, medium and large customers in ways only Avnet can. This capability provides suppliers with access to the largest number and broadest range of customers in the world. Our revenue growth for the quarter came in at the high-end of our seasonal norm, driven by continued excellent performance in EMEA and from Premier Farnell. Of note, our digital revenue for the quarter reached a healthy $700 million annual run rate, as our digital investments continue to pave the way for increased customer flexibility and opportunity. Our digital strategy is one of the key components of our transformation, and we are already seeing positive results from these efforts. In terms of profitability for the quarter, we saw a similar pattern with margins and operating income improvements driven by strong contributions from Premier Farnell with continued strength in EMEA. In just a moment, Kevin will provide more details and color on our…

Thank you, Bill and hello, everyone. As I walk through my comments, I will be referencing the slides on the webcast. Starting with slide 7, in our fiscal third quarter, revenue grew 10.6% year-over-year in constant currency to $4.4 billion and organic revenue increased 1.8% in constant currency. Organic revenue grew 3.4% sequentially in constant currency, which is just above our seasonal range of minus 1% to plus 3% in our March quarter. As Bill noted earlier, our EMEA region delivered above seasonal sequential growth of 16.2% in constant currency and was up 12.3% year-over-year, representing the fifteenth consecutive quarter of year-over-year growth. Premier Farnell exceeded our expectations and delivered double-digit operating margins, which was a key contributor to our digital revenue reaching a $700 million annual run rate. Gross profit margin increased 142 basis points year-over-year due to the addition of Premier Farnell and increased 46 basis points sequentially as a result of the geographic mix shift to the higher-margin Western region. Adjusted operating income grew 4.8% sequentially, driven by the strength in EMEA and a full quarter of Premier Farnell results. Adjusted operating income dollars grew 6.8% year-over-year and operating income margin declined 7 basis points from the year-ago quarter as the positive impact of Premier Farnell was offset by a significant decline in the Americas region due to lower gross profit margin and higher expenses related to our ERP deployment. Our gross profit margin in the Americas region declined due to supplier program changes, a higher mix of fulfillment revenue, and inefficiencies related to our ERP deployment. Adjusted earnings per share of $0.88 increased $0.07 from the year-ago quarter, primarily due to the increase in operating income related to the addition of Premier Farnell in the current quarter. Transitioning now to slide 8 on our outlook for…

In closing, I want to be clear. We're disappointed that our financial performance will be negatively impacted in near term, and we're committed to working hard for our customers, suppliers and our shareholders. These decisions are never easy, but they're necessary to position the company for success in the future. I want to thank all of our employees for their tireless effort, for stepping up and being part of this solution. We're acutely focused on meeting the Americas customer and supplier needs, as we focus through our ERP issues, and we will provide as much support to the team as required to ensure their access. We are committed to additional cost rationalization that we announced today and we'll do everything in our control to accelerate meaningful progress. And it's important to keep in perspective that seeds we planted as part of the transformation strategy are, in fact, bearing fruit. We'll continue to move core growth-oriented projects into implementation stage, that will produce increasing benefits as we move through fiscal 2018. Combining Premier Farnell and Avnet has resulted in a truly unique distribution model with clear, differentiated offerings that put us at the forefront of the digital transformation that is impacting technology supply chain today. Going forward, we'll remain transparent in our communications and provide updates on our growth plans and our progress towards our financial commitments. Given the magnitude of today's news and our focus on the task at hand, we've decided to postpone our Investor Day scheduled for May 24 to a later date. It's our goal at that point to be able to provide more detail on the initiatives that we've introduced today, as well as a meaningful progress update, so we can present a clearer picture of how we have come so far and where we're headed. Despite the new challenges, we are more convinced than ever that we have the right strategy, a unique value proposition that spans the entire product life cycle, and the best team in the industry to drive future success. We sincerely appreciate your attention, and thank you for your interest in Avnet. With that, let's open up the lines for Q&A. Operator?

Thank you. At this time, we will be conducting a question and answer session. Our first question comes from the line of Param Singh of Merrill Lynch. Please proceed with your question.

Hi. Thank you for taking my question. So, first of all, wanted to talk about the top line here. I understand the $1 billion in loss from vendor movement to competitors. What was the geographic exposure of the different losses? I mean, was it mostly U.S. or was it also in Europe? And then, what was the driver for the organic growth in EMEA? Then I have some follow-ups here.

Sure. Param, Hi, it's Kevin. I'll start with the last part of your question. In Europe, we've built a very strong presence in auto, industrial, medical equipment end markets, and those are really the real markets for us. Obviously, other verticals as well, but those are the ones really performing well. As I look at your first question, it primarily would be in our Western regions of Europe and the Americas.

Recall we're still rolling off the high-volume fulfillment business that – we'll lap that in the June quarter in Asia.

Okay. And then, it's good to see Phil back at the company. What initiatives is he bringing that's going to be different from what – in his prior role at Avnet when he was on the components side and then versus what Gerry was doing?

Yeah, one of the key reasons that I asked Phil to come back is, one, to be a part of this new transformation that we're doing. Secondly was the unique ecosystem that we're developing with Hackster, Premier Farnell and Avnet, there's no better person that could help stitch that together and build the kind of relationships we need across the industry to make it successful. And Phil's primary focus, of course, will be to drive commercial success and build tight relationships with both customers and suppliers.

Okay. And then, moving on to your ERP implementation, maybe I wasn't clear on the cost that'll actually be recognized in the P&L, so maybe you could highlight for me what would be the actual cost recognition on a non-GAAP basis. And then what additional inventory would you expect to hold while that ERP implementation is going to take place?

Let me take the second question and I'll pass the first question to Kevin. Second question, we're not intending to have any more inventory. In fact, we will continue to improve our working capital position going forward.

Yeah, and Param, from an operating expense standpoint, we expect to continue to have, on an ongoing basis in the Americas, approximately $3 million to $4 million of expense per quarter as we work through the next fiscal year, and in addition, expect to incur $1.2 million of expense on the global system as we work through the fiscal year. And again, that's a per quarter amount. And then as it relates to the depreciation, on a quarterly basis, we'll be recognizing approximately $5 million, which is just the normal depreciation expense on the system. In addition, we will be pro forma-ing out approximately $17 million to $20 million per quarter related to the accelerated depreciation.

Okay. And then lastly, just to try to understand correctly, basically all the benefit that you're getting from a higher mix of digital and Premier Farnell is mostly being offset by the overall revenue loss and the stranded cost that you have from, A, from Tech Data sale, and then, B, because of the losses of share to competitors on the component side, core side?

Well, the majority of it's because of supplier line card losses as we stated, the $1 billion of revenue, and the corresponding gross profit that goes with it.

And what buyback expectations do you have near term? Is that part of the $3 to $3.50 guide? I know you did some already and you're talking to 126 million in shares, but anything in addition that's part of the $500 million that you have left, (30:59) guide?

Param, the guidance for next year that we provided today does not include any additional share buyback, but clearly, as we look forward, we're going to see how things settle. And we're going to sustain our previously committed comments on being disciplined in our approach, but clearly as it comes back to book value and as we look forward, I mean clearly it's under serious consideration for us to continue to invest in our stock.

Yeah. There's no question. We've got approval to invest more, and as Kevin pointed out, we'll do it in disciplined fashion and we'll be as aggressive as we can.

Thank you. I'll get back in line.

Our next question comes from the line of Adrienne Colby of Deutsche Bank. Please proceed with your question.

Question, in your press release, you had commented that Premier Farnell's operating margins exceeded 10%, which suggests a sequential stepdown in your core EM operating margins in the quarter and a level that is well below 4%. Although it sounds like the effects of the supplier losses and the changes to the supplier program are ahead of you, so just hoping you could address what's driving some of that erosion and how we should be thinking about operating margins in the core business going forward?

I'll give some color or commentary and then Kevin will give some more specifics. Clearly, we've already started to see the impact of some of the supplier consolidation this quarter and most notably in the Americas regions, because, the mix of supplier issues happens not smooth across every region, and so, therefore, we saw more of a hit in the Americas region as well as ongoing issues we've had with the challenges with Eval (32:46), our ERP system.

And as Bill certainly points out, primarily, if you look at the commentary I provided in the script, there was an impact beginning in the March quarter. It does accelerate as we move forward. And then as we think about the gross profit percent in the neighborhood of say 30 to 40 basis points sequential impact as we move forward here in terms of the core business.

Thank you. Our next question comes from the line of Matt Sheerin of Stifel. Please proceed with your question. Matthew Sheerin - Stifel, Nicolaus & Co., Inc.: Yes, thanks. I'll try to keep just to two questions here. So, when we look at the $1 billion of revenue going away from the vendor relationships, what's the timing of that? Does that start rolling off next quarter or into the September quarter? And in terms of the gross margin impact you just talked about, is that all related to those vendors, because their mix perhaps was higher and helped your margin, or are there also issues with existing suppliers where you're continuing the relationships, but the mix of that business is changing because of the changes of the relationships?

Hey, Matt, it's Kevin. I'll take the first question. Some impact as we worked through the fourth quarter, but it clearly accelerates as we get into our September quarter on the loss from the suppliers and that's the way to be thinking about it.

With regard to the second question, I think it's fair to say, across the board, we've been working with all of our suppliers. And it has been in a slow growth environment that we've been living with for several years and we're started, of course, to see our way out of it, because our book-to-bills are improving. However, there's been margin squeezes with some of our existing vendors that we had to work through as well and take the corresponding cost out to maintain our margins. And that's why it'll wake us a bit of time this year to get ourselves right-sized again and that's why we announced some additional cost reductions. Matthew Sheerin - Stifel, Nicolaus & Co., Inc.: Okay. And then on the cost reduction program, what's the sort of the dollar amount that you're looking to take out when you add it all up between the Premier Farnell synergies, lowering the head count or resources that support the product lines that are going away, as well as the corporate overhead associated with the Tech Data business that you just sold.

Matt, I would range it in the neighborhood of – in aggregate, of our operating expense, around 4% to 6% as we look forward. Matthew Sheerin - Stifel, Nicolaus & Co., Inc.: 4% to 6%, and that's over the course of the next year or so? Or...

Yeah. Over the next of the course year, and for some of the Premier Farnell expenses that we've referenced in the past, some of that will slip into fiscal year 2019, just given the international aspects of it. But for the most part, that's what we're planning on is that roughly 4% to 6% of operating expense cost out. Matthew Sheerin - Stifel, Nicolaus & Co., Inc.: All right. Thanks so much.

You're welcome.

Our next question comes from the line of Adam Tindle of Raymond James. Please proceed with your question. Adam Tindle - Raymond James & Associates, Inc.: Okay. Thanks and good afternoon. Just want to start on revenue with the question there on the fiscal 2018 revenue guide, Bill, it'd be helpful for us to understand why these customer losses occurred, and are there any more customer losses beyond the $1 billion we've seen so far. And then secondly, what gives you confidence that the core business will grow kind of mid-single digits organically during an ERP transition phase? Just I have a follow-up after that.

Yeah. First of all, I think you mean suppliers, not customers, right? Adam Tindle - Raymond James & Associates, Inc.: Yes.

Okay. Well, we spend a lot of time with all our top suppliers and got validation that we've got solid relationships with them. We don't see any more on the horizon, but in any business, there's always some level of risk, and I can't predict with 100% certainty that there is never an issue out there. But, however, we touched every one of them more than once in the past quarter. And one of the reasons I brought Phil on board is to, in fact, solidify that relationship even tighter. Adam Tindle - Raymond James & Associates, Inc.: Okay.

(37:24) revenue growth.

Our next question comes from the line of William Stein of SunTrust. Please proceed with your question.

Thanks for taking my questions. Bill, it's sort of a magnification of the last question. We're pretty widely aware, I think, of ADI and more recently maybe Cypress, and a change in policy from TI. I'm sort of struggling with trying to understand what's causing this trend. Is there any link between this issue on one hand and the ERP issue? Or is it independent from that? And is there any chance that this trend could reverse and somehow you get some of these losses back? And you already answered why you think that it's not going to continue, because you've spoken to the suppliers, but maybe you can answer the other two parts of that, please?

Yeah. I kind of put it in this perspective. If you think about and you view all the customers on a continuum, the largest customers to smallest customers, most suppliers view that and put a line somewhere and say, some of the accounts, the bigger ones, are the accounts that always go direct and the other ones are for distribution. It's typically the way it works. And in growth times, what you see occurring is that line moves out, moves closer to the axis, meaning that there's less direct customers, because it's harder to keep up with the growth of your existing customers. When we're resuming the growth, that line moves out of it to the right and into an exaggerated case to what we've seen happen with TI, where they've essentially taken all their accounts direct and gone into a fulfillment model and used digital as a way to get after some of the smaller – their smaller customers. We have validated with literally all of our suppliers the need for continued demand creation. So, I don't believe that's a trend that will happen in the long-term. In fact, we've seen a lot of suppliers come to us and demand even more help with respect to demand creation, as we're starting to see growth come back in this industry again. So, we're pretty confident about that. With respect to some specifics with some suppliers, let's take an example like ADI, they wanted to get an ability to be able to have additional margin go their direction. So, one of the ways to do that is consolidate to one distributor. In their case, they had already been in an acquisition with Linear Tech, which was a 100% with our competitor and was a much easier move for them to do a consolidation away from us versus to us. Now, on the flip side, take a look at Broadcom, we've had a fantastic relationship with Broadcom. In fact, we're seeing more TAM to DTAM come our way. I think I've announced that on – at several calls that we've seen a significant amount more than we had expected and we still see some upside with respect to that relationship. And I think that this is one of these things that happen in the industry, that there is ebbs and flows and we'll see suppliers go either direction. And I'm confident that we'll continue to make announcements like we made with Xilinx just recently, where we've expanded our relationship with Xilinx and we added EBD to that line and gave them access to our European markets. So I'm pretty confident that you'll see more improvements here as we move forward.

Okay. Thank you.

Our next question comes from the line of Shawn Harrison of Longbow Research. Please proceed with your question.

Hi. If I do the math right and you get to a run rate approximating $1 of EPS exiting next fiscal year, it implies an EBIT margin in the low-4% range, which is lower than I would have thought even with all the moves. And so, I guess, the question I have is two-fold. Number one, what is the target long-term EBIT margin for the business after you take the cost out and ERP and everything else? And second, do you have an ROIC goal associated with that, because I can't believe that at a 4% EBIT margin, you're earning an appropriate spread on your cost of capital?

Shawn, it's Kevin. I think what I would point to, it's for the businesses themselves or legacy EM core business as we look at it. Clearly, we're still thinking in the neighborhood of 5% to 5.5%. Now, obviously, we're going to work on the cost structure to ensure that that happens as well as some things Bill referenced earlier. What you have to factor in is the ongoing corporate cost as well in terms of how to get to the total. So, as we look at it, somewhere in the neighborhood of 3.5% to 4.5% is all-in what we would be thinking as we look longer term to address it. In terms of return on capital, our goal is clearly to achieve our weighted average cost of capital. So, as we look forward, based on some of the internal things we are working on, we would look to be somewhere between 11% exiting next fiscal year, and then as we kind of move forward, we're going to look to strive to be back to the 12% to 12.5% range over the next two to three years.

I'm sorry, Kevin. I was confused on the 3.5% to 4% EBIT margin post-corporate cost, because I think corporate cost are running 50 bps a quarter, correct? And so, you'd be well above 4%? I'm missing the math there on how we bridge.

No. I'm sorry. I was providing the net number including corporate cost.

So you're thinking long-term, you're at 4% EBIT margin?

That's what we're striving to be, yes.

Okay. Second, just in terms of total ERP cost, if we go back either starting with what you've done globally, then the North America program and then everything going forward, if you could separate those two buckets, what are both of those going to cost you in terms of to-date and then go-forward in terms of just total dollars of spend?

Well, we in past quarters talked about $3 million to $4 million a quarter to keep up with the current system. We had planned to have that roll off in June, and given some of the developments that have occurred and our decision now to move to a global ERP system, that $3 million to $4 million will continue until we sunset the Eval (44:03) system in 24 months. On top of the capital expenditure that we'll be doing with the new global ERP system, you can assume about a $1 million to $2 million additional expense that we'll have in the numbers until we have that implemented.

What was the cost, though, to implement the ERP system in North America that isn't working in terms of the CapEx?

Approximately $150 million.

All right. And that's being written off now with the accelerated depreciation (44:34)?

Yes.

Okay. Thank you.

Our next question comes from the line of Steven Fox of Cross Research. Please proceed with your question.

Thanks. Good morning. Just looking at some of the flow charts you've provided, it looks like you're targeting a roughly 4% organic sales growth into your next fiscal year. So I was just curious, one, if you could dive into how you get to that type of organic growth a little bit more. And then secondly, I think if I heard right, that's before considering Premier Farnell's organic growth. So if you can give us some color on what type of organic growth we could expect from Premier Farnell, that would also be helpful. Thanks.

Sure. Hey, Steve, it's Kevin. So when you look at our served components TAM end market for the next fiscal year as well as certain initiatives that we have ongoing, the broader market is looking to grow approximately 4.5% to 5%. So, we have tempered that as we think about next year. Specifically, when you look at the verticals where we performed well in, let's say the western regions and globally, specifically in the areas of automotive, industrial, medical equipment, as well as now the broadening aspects on Integrated Solutions and other areas where we are really dedicating specific resources, that gives us confidence to the midpoint of the range that I shared today.

And then, in terms of just Premier Farnell, what type of organic growth would that be if it was standalone?

I think in the neighborhood of – probably similar in the neighborhood of 3% to 4%, would be a way to think about it.

Okay. And then just one quick follow-up. On one hand, you're talking about some more success with Xilinx in terms of utilizing your programming capabilities in Europe, on the other hand it seems like maybe there's some stranded programming capacity now in the U.S., in Phoenix. I'm not sure if that's correct, but can you just sort of talk about how that capacity maybe gets reallocated over the next 12 months? Thank you very much.

Well, no, there's no stranded programming capability and we're fully utilized and we're running our capacity. So we (47:01) Xilinx in the front line cards in the Americas and it continues to be a line card in the Americas.

Great. That's really helpful to know. Thank you.

Our next question comes from the line of Mark Delaney of Goldman Sachs. Please proceed with your question. Mark Delaney - Goldman Sachs & Co.: Yes. Good afternoon. Thanks very much for taking the questions. I do have two questions. The first question is to help us better understand the $1.09 to $1.25 EPS impact from issues related to suppliers. Maybe you can just help us understand how much is related to the $1 billion of revenue loss and how much is pricing. And on pricing, can you just give us a sense of the breadth of suppliers that are seeing more favorable pricing? Is it just TI or some of your other larger suppliers getting better pricing terms as they come up for renewal, like Xilinx just renewed? I'm just curious if you could just help us understand, you know, again, the breadth of semi suppliers seeing better pricing? And then I have a follow-up question too. Thanks.

Sure, Matt, it's Kevin. I would say it's roughly split 75%/25%. So 75% from the loss revenue, and then, say, 25% tied to supplier programmatic changes. Mark Delaney - Goldman Sachs & Co.: And on the breadth of customers getting better pricing, is it just TI or has that spread to other people, again, like a Xilinx or other large suppliers?

Yeah, I would say there were programmatic changes with many of the suppliers, but the biggest impact, of course, was with supply line losses like ADI, Cypress, and the like. So that's the – gives a bigger impact. Mark Delaney - Goldman Sachs & Co.: Okay. That's helpful. And then for my second question, I just don't understand how you guys are thinking about valuation in terms of when you would step in for buybacks. I know gross book value which is, I think, between $40 and $41. I mean, if that's historically a level the company has thought about for doing more buybacks? Just with the lower guidance, I think ROE, just by my quick math at this point, is something like 7% or 8% in fiscal 2018 and below the cost of equity. So something like the tangible book value in that kind of $28, $29 range, is that a metric we should – that you guys are going to now look at more closely? Or is gross book value still a level that you guys are thinking of?

We're going to be consistent with our past approach and look at all the respective metrics, Mark, be it around the book, tangible book, as well as just what we think from a DCF standpoint. Mark Delaney - Goldman Sachs & Co.: Thank you.

Our next question comes from the line of Jim Suva of Citi. Please proceed with your question.

Thank you very much. A quick clarification, then I'll ask my question, maybe even right now. Did you say you will be building inventory into the ERP change? Or your ERP system will allow you to continue without building inventory? And then my question is, on these program shifts from your suppliers, did you have a chance to negotiate on price and margins or was it basically a done deal? Because the magnitude of loss was so big, we would think that your company would want to be able to have a discussion or was the discussion done? Because on one hand, you talk about great firm relationships; on the other hand, losing $1 billion of sales, there's nothing to laugh about. You've really got to wonder about the relationships. So kind of help us better understand about how that all happened.

Okay. On your first question on inventory, yeah, the point we made was or point I made was that we won't need to be doing a big buildup of inventory, because we're using a – the approach that we've used over in Europe or we've done a pretty seamless implementation of SAP and as well as in Asia. So we have had big successful implementation with SAP and we've done it without adding any inventory and that's what we'll do as we roll out the global strategy. So we have an opportunity to do it either in a big bang or a slower roll out, and we have chosen to do a slower roll out branch by branch as we go across the Americas in the future. With respect to the second question, I'd say it was a mix. Those were – a couple that I say was surprises to the company, and others where we were in deep negotiations with the suppliers and we did win the bake-off.

Okay. Thank you very much.

There are no further questions over the audio portion of the conference. I would now like to turn the conference back over to management for closing remarks.

Yes, this is Kevin Moriarty and I just want to clarify something I made a comment related to a question from Shawn. We are targeting 4% to 4.5%. We honestly need to do more work before we update all the targets. I misspoke, and that is something that I should've not. So that was my mistake, and we are targeting 4% to 4.5%.

Thank you for participating in our earnings call today. Our third quarter fiscal 2017 earnings press release and related CFO commentary can be accessed in downloadable PDF format on our website www.IR.abnet.com under the quarterly results section. Thank you.

This concludes today's conference. Thank you for your participation. You may disconnect your lines at this time. Have a wonderful rest of your day.