AVX Corporation Annual Report 2012

FY2012 Annual Report · AVX Corporation

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549
FORM 10-K

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended March 31, 2012

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________ to__________
Commission File Number: 1-7201

Delaware
(State or other jurisdiction of incorporation or organization)

33-0379007
(I.R.S. employer identification number)

(Exact name of registrant as specified in its charter)

1 AVX Boulevard Fountain Inn, South Carolina
(Address of principal executive offices)

29644
(Zip Code)

(864) 967-2150
(Registrant's telephone number, including area code)

Securities registered Pursuant to Section 12(b) of the Act:

Title of each class
Common Stock, $.01 par value per share

Name of each exchange on which registered
New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [ X ] No [ ]

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Securities Act.
Yes [ ] No [X]

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 the preceding 12 months (or for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days. Yes [ X ] No [ ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such files). Yes [ X ] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [ X ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer or a smaller
reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2
of the Exchange Act.
Large accelerated filer
Non-accelerated filer
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

Accelerated filer
Smaller reporting company

(Do not check if a smaller reporting company)

[X]
[ ]

[ ]
[ ]

Based on the closing sales price of $11.87 on September 30, 2011, the last business day of the registrant's most recently completed second fiscal
quarter, the aggregate market value of the common stock held by non-affiliates of the registrant as of that date was $570,703,511.

As of May 4, 2012, there were 169,600,329 shares of the registrant’s common stock, par value $.01 per share, outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s definitive proxy statement for the 2012 Annual Meeting of Stockholders, which will be filed within 120
days of March 31, 2012, are incorporated by reference into Part III.

TABLE OF CONTENTS

Part I

Page

3
Item 1. Business. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 1A. Risk Factors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Item 1B. Unresolved Staff Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Item 2. Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Item 3. Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
18
Item 4. Mine Safety Disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part II

Item 5. Market for the Registrant's Common Equity, Related Stockholder Matters

and Issuer Purchases of Equity Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 6.
Selected Financial Data. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations . . . . . . . . . .
Item 7A. Quantitative and Qualitative Disclosures About Market Risk. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 8. Financial Statements and Supplementary Data. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. . . . . . . . . .
Item 9A. Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 9B. Other Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

18
21
22
33
33
34
34
34

Part III

Item 10. Directors, Executive Officers and Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
35
Item 11. Executive Compensation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Item 12. Security Ownership of Certain Beneficial Owners and Management and

Item 13. Certain Relationships and Related Transactions, and Director Independence . . . . . . . . . . . . . . . . . . . . .
Item 14. Principal Accounting Fees and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Related Stockholder Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
35
35

Part IV

Item 15. Exhibits and Financial Statement Schedules. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Signatures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

36
37

Cautionary Statement Pursuant to Safe Harbor Provisions of the Private Securities
Litigation Reform Act of 1995

The following discussion and analysis should be read in conjunction with the consolidated financial statements, including the notes
thereto, appearing elsewhere herein. Statements in this Annual Report on Form 10-K that reflect projections or expectations of future
financial or economic performance of AVX Corporation, and statements of the Company's plans and objectives for future operations,
including those contained in "Business", “Risk Factors”, "Management's Discussion and Analysis of Financial Condition and Results of
Operations", and "Quantitative and Qualitative Disclosures about Market Risk", or relating to the Company's outlook for overall volume
and pricing trends, end market demands, cost reduction strategies and their anticipated results, and expectations for research,
development and capital expenditures, are "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933,
as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Words such as "expects", "anticipates",
"approximates", "believes", "estimates", "intends" and "hopes" and variations of such words and similar expressions are intended to
identify such forward-looking statements. No assurance can be given that actual results or events will not differ materially from those
projected, estimated, assumed or anticipated in any such forward-looking statements. Important factors that could result in such
differences, in addition to the other factors noted with such forward-looking statements and in “Risk Factors” in this Annual Report on
Form 10-K, include: general economic conditions in the Company's market, including inflation, recession, interest rates and other
economic factors; casualty to or other disruption of the Company's facilities and equipment; potential environmental liabilities; and other
factors that generally affect the business of manufacturing and supplying electronic components and related products. Forward looking
statements are intended to speak only as of the date they are made and AVX Corporation does not undertake to update or revise any
forward-looking statement contained in this Annual Report on Form 10-K to reflect new events or circumstances unless and to the extent
required by applicable law.

Item 1.

Business

General

PART I

AVX Corporation (together with its consolidated subsidiaries, "AVX" or the "Company") is a leading worldwide manufacturer and
supplier of a broad line of passive electronic components and related products. Virtually all types of electronic devices use our passive
component products to store, filter or regulate electric energy.

Our passive electronic component products include ceramic and tantalum capacitors, film capacitors, varistors, filters and other
components manufactured in our facilities throughout the world and passive components manufactured by Kyocera Corporation of
Japan ("Kyocera"), a public company and our majority stockholder which owns approximately 72% of our outstanding common stock.
We also manufacture and sell electronic connectors and inter-connect systems and distribute and sell certain electronic connectors
manufactured by Kyocera.

We are organized by product line with five main product groups. Our reportable segments are based on the types of products from
which we generate revenues. We have three reportable segments: Passive Components, Kyocera Electronic Devices ("KED Resale") and
Interconnect. The product groups of Ceramic Components, Advanced Components and Tantalum Components have been aggregated
into the Passive Component reportable segment. Segment revenue and profit information is presented in Note 14 to the consolidated
financial statements. The Passive Components segment consists primarily of surface mount and leaded ceramic capacitors, RF thick and
thin film components, tantalum capacitors, film capacitors, ceramic and film power capacitors, super capacitors, EMI filters, thick and
thin film packages, varistors, thermistors, inductors and resistive products. The KED Resale segment consists primarily of ceramic
capacitors, frequency control devices, SAW devices, sensor products, RF modules, actuators, acoustic devices and connectors produced
by Kyocera, and resold by AVX. The Interconnect segment consists primarily of AVX Interconnect (formerly Elco) automotive, telecom
and memory connectors manufactured by AVX. In addition, we have a corporate administration group consisting of finance and
administrative activities and a separate research and development group.

Our customers are multi-national original equipment manufacturers, or OEMs, independent electronic component distributors and
electronic manufacturing service providers, or EMSs. We market our products through our own direct sales force and independent
manufacturers' representatives, based upon market characteristics and demands. We coordinate our sales, marketing and manufacturing
organizations by strategic customer account and globally by region.

We sell our products to customers in a broad array of industries, such as telecommunications, information technology hardware,
automotive electronics, medical devices and instrumentation, industrial instrumentation, defense and aerospace electronic systems and
consumer electronics.

Our principal strategic advantages include:

Creating Technology Leadership. We have research and development locations in the United States, United Kingdom, Czech Republic,
France and Israel. We developed numerous new products and product extensions during fiscal 2012 and won several awards that
recognize our technology leadership. These new products add to the broad product line we offer to our customers. Due to our broad
product offering, none of our products individually represent a material portion of our revenues. Our scientists are working to develop
product solutions to the challenges facing our customers as consumers and business demand more advanced electronic solutions to
manage their everyday lives and businesses. Our engineers are continually working to enhance our manufacturing processes to improve
capability, capacity and yield, while continuing to reduce manufacturing costs.

Providing a Broad Product Line. We believe that the breadth and quality of our product line and our ability to quickly respond to our
customers' design and delivery requirements make us the provider of choice for our multi-national customer base. We differentiate
ourselves by providing our customers with a substantially complete passive component solution. We market five families of products:
ceramic products, tantalum products, advanced products, Kyocera manufactured passive products and interconnect devices. This broad
array allows our customers to streamline their purchasing and supply organization.

Maintaining the Lowest Cost, Highest Quality Manufacturing Organization. We have invested approximately $106 million over the past three
fiscal years to upgrade and enhance our worldwide manufacturing capabilities, with respect to the manufacture of ceramic, tantalum and
advanced components as well as connector devices. In order to continually reduce the cost of production, our strategy has included the
transfer to and expansion of manufacturing operations in countries such as China, El Salvador, Malaysia, Mexico and the Czech Republic.

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Globally Coordinating our Marketing, Distribution and Manufacturing Facilities. We believe that our global presence is an important
competitive advantage as it allows us to provide quality products on a timely basis to our multi-national customers. We provide enhanced
services and responsiveness to our customers by maintaining significant manufacturing operations in locations where we market the
majority of our products. Our 18 manufacturing facilities are located in 10 different countries around the world. As our customers
continue to expand their global production capabilities, we are ideally situated to meet their design and supply requirements.

Products

We offer an extensive line of passive components designed to provide our customers with "one-stop shopping" for substantially all of
their passive component needs. Passive components do not require power to operate. These components adjust and regulate voltage and
current, store energy and filter frequencies. Sales of Passive Components represented approximately 62% of our net sales in fiscal 2012.
KDP and KKC Resale represented approximately 26%, and Interconnect products, including KEC Resale Connectors, represented
approximately 12% of our net sales in fiscal 2012. The table below presents revenues for fiscal 2010, 2011 and 2012 by product group.
Financial information concerning our Passive Components, KED Resale and Interconnect segments is set forth in Note 14 to the
consolidated financial statements elsewhere herein.

Sales revenue (in thousands)
Ceramic Components
Tantalum Components
Advanced Components

Total Passive Components

KDP and KKC Resale
KEC Resale Connectors
Total KED Resale

Interconnect

Total Revenue

Passive Components

2010
155,059
280,991
369,811
805,861
338,701
73,973
412,674
86,431
1,304,966

Years Ended March 31,
2011
211,998
419,792
410,110
1,041,900
440,050
66,088
506,138
105,138
1,653,176

2012
179,984
393,468
378,843
952,295
410,419
54,765
465,184
127,775
1,545,254

We manufacture a full line of multi-layered ceramic and solid tantalum capacitors in many different sizes and configurations. Our
strategic focus on the growing use of passive components is reflected in our investment of approximately $81.0 million in facilities and
equipment used to manufacture passive components during the past three fiscal years. We believe that sales of passive components will
continue to be among the most rapidly growing in the worldwide capacitor market because technological advances have been constantly
expanding the number and type of applications for these products.

Tantalum and Ceramic components are commonly used in conjunction with integrated circuits and are best suited for applications
requiring low to medium capacitance values. Capacitance is the measure of the capacitor's ability to store electric energy. Generally,
ceramic capacitors are more cost-effective at lower capacitance values, and tantalum capacitors are more cost-effective at medium
capacitance values. The net sales of tantalum and ceramic capacitors accounted for approximately 60% of our passive component net
sales in fiscal 2012.

We also offer a line of advanced passive component products to fill the special needs of our customers. Our family of passive
components also includes film capacitors, high energy/voltage power capacitors and varistors. Our advanced products engineers work
with some customers' in-house technical staffs to design, produce, and manufacture customized products to meet the specifications of
particular applications. The manufacture of custom products permits us, through our research and development activities, to make
technological advances, provide customers with design solutions to fit their needs, gain a marketing inroad with the customer with respect
to our complete product line, and, in some cases, develop products that can be sold to additional customers in the future. Sales of
advanced products accounted for approximately 40% of passive component net sales in fiscal 2012.

KED Resale

We have a non-exclusive license to distribute and sell certain Kyocera manufactured electronic component and connector products to
certain customers and in certain territories outside of Japan. Our distribution and sale of certain Kyocera products broadens our range of
products and further facilitates our ability to offer "one-stop shopping" for our customers' electronic components needs. The Kyocera

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KDP and KKC electronic components we sell include ceramic capacitors, RF modules, frequency control devices, SAW devices, sensor
products, actuators, and acoustic devices. Resale product sales also include connectors manufactured by Kyocera. Sales of these products
accounted for approximately 30% of net sales in fiscal 2012.

Interconnect

We manufacture and sell high-quality electronic connectors and interconnect systems for use in the telecommunications, information
technology hardware, automotive electronics, medical device, defense and aerospace industries. Our product lines include a variety of
industry-standard connectors as well as products designed specifically for our customers' unique applications. An expanding portion of
the electronics market for AVX Interconnect products is the automotive market with applications throughout a vehicle including engine
control, transmission control, audio, brakes, and the quickly evolving stability and safety control system. We produce fine pitch
connectors used in portable devices such as smart phones, other cell phones, notebook computers, GPS, and other hand held devices. In
addition, we offer specialty connectors designed to address customer specific applications across a wide range of products and end
markets. We have invested approximately $15.2 million in facilities and equipment over the past three years as we continue to focus on
new product development and enhancement of production capabilities for our Interconnect business. Sales of Interconnect products,
including KEC Resale connector products, accounted for approximately 12% of net sales in fiscal 2012. Approximately 30% of combined
Interconnect and KEC Resale Connector net sales in fiscal 2012 consisted of connectors manufactured by Kyocera.

Marketing, Sales and Distribution

We place a high priority on solving customers' electronic component design challenges and responding to their needs. To better
serve our customers we frequently designate teams consisting of marketing, research and development and manufacturing personnel to
work with customers to design and manufacture products to suit their specific requirements. Costs related to these activities are expensed
as incurred.

Approximately 28%, 27% and 45% of our net sales for fiscal 2012 were to our customers in the Americas, Europe and Asia,
respectively. Financial information for these geographic regions is set forth in Note 14 to our consolidated financial statements elsewhere
herein. A discussion of risks associated with our foreign operations can be found in “Risk Factors” herein.

Our products are marketed worldwide by our own dedicated direct sales personnel that serve our major OEM and EMS customers.
We also have a large network of independent electronic component distributors and independent manufacturers' representatives who sell
our products throughout the world. We have regional sales and design application personnel in strategic locations to provide technical
and sales support for independent manufacturers' representatives and independent electronic component distributors. We believe that
this combination of sales channels provides a high level of market penetration and efficient coverage of our customers on a cost-effective
basis.

Our products are used in a wide variety of applications by numerous customers. Our products are sold directly to OEMs, EMSs and
through manufacturing representatives and independent electronic component distributors. In order to maximize our sales opportunities,
our engineering and sales teams maintain close relationships with OEM, EMS and electronic component distributor customers. Our
largest customers vary from year to year, and no customer has a long-term commitment to purchase our products. No single customer
has accounted for more than 10% of net sales in the fiscal years ended March 31, 2010, 2011 and 2012. Because we are a supplier to
several significant manufacturers in the broad based electronic devices industries and because of the cyclical nature of these industries, the
significance of any one customer can vary from one period to the next.

We also have qualified products under various specifications approved and monitored by the United States Defense Electronic

Supply Center (DSCC) and European Space Agency (ESA), and approved under certain foreign military specifications.

Typically, independent electronic component distributors handle a wide variety of products and fill orders for many customers. The
sales terms under non-exclusive agreements with independent electronic component distributors may vary by distributor, and by
geographic region. In the United States, Europe and Asia, such agreements may include stock rotation and ship-from-stock and debit
(“ship and debit”) programs. Stock rotation is a program whereby distributors are allowed to return for credit qualified inventory, semi-
annually, equal to a certain percentage, primarily limited to 5%, of the previous six months net sales. In the United States, we may use a
ship and debit program under which pricing adjustments may be granted by us to assist distributors in meeting competitive prices in the
marketplace on sales to their end customers. Ship and debit programs require a request from the distributor for a pricing adjustment for a
specific part for a sale to the distributor’s end customer from the distributor’s stock. In addition, certain agreements with distributors may
include special incentive discounts based on amount of product ordered or shipped. Our agreements with independent electronic
component distributors generally also require that we repurchase qualified inventory from the distributor in the event that we terminate

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the distributor agreement or discontinue a product offering.

We had a backlog of orders of approximately $292 million at March 31, 2010, $350 million at March 31, 2011 and $236 million at
March 31, 2012. Firm orders, primarily with delivery dates within six months of order placement, are included in backlog. Many of our
customers encounter uncertain and changing demand for their products. Customer provided forecasts of product usage and anticipated
usage of inventory at consignment locations are not included in backlog. If demand falls below customers’ forecasts, or if customers do
not effectively control their inventory, they may cancel or reschedule their shipments that are included in our backlog, in many instances
without any penalty. Backlog fluctuates from year to year due, in part, to changes in customer inventory levels, changes to consignment
inventory arrangements, order patterns and product delivery lead times in the industry. Accordingly, the backlog outstanding at any time
is not necessarily indicative of the level of business to be expected in any ensuing period since many orders are placed and delivered
within the same period. In addition, the increased use of vendor managed inventory and similar consignment type arrangements tend to
limit the significance of backlog as orders from these arrangements are not typically reflected in backlog.

Research, Development and Engineering

Our emphasis on research and development is evidenced by the fact that most of our manufactured products and manufacturing processes
have been designed and developed by our own engineers and scientists. We coordinate our research and development activities from our facility
at Headquarters with staff at other facilities located in the United States, United Kingdom, Czech Republic, Israel and France.

Our research and development effort and also operational level engineering effort place a priority on the design and development of
innovative products and manufacturing processes and engineering advances in existing product lines and manufacturing operations.
Other areas of emphasis include material synthesis and the integration of passive components for applications requiring reduced size and
lower manufacturing costs associated with board assembly. Research, development and engineering expenditures were approximately $25
million, $24 million and $26 million during fiscal 2010, 2011 and 2012, respectively. The level of such spending can fluctuate as new
products are transferred to full scale production and process enhancements are implemented.

We own United States patents as well as corresponding patents in various other countries, and also have patent applications pending,
although patents are not in the aggregate material to the successful operation of our business. For discussion regarding our license
arrangement with Kyocera, see "Management's Discussion and Analysis of Financial Condition and Results of Operations – Relationship
with Kyocera and Related Transactions."

Raw Materials

Although most materials incorporated in our products are available from a number of sources, certain materials (particularly tantalum
from Australia and Brazil and palladium from Russia and South Africa) are available only from a relatively limited number of suppliers.
For the past ten years, we have had a policy of not using tantalum sourced from the Democratic Republic of Congo (DRC) or any other
area in which insurgents or similar groups benefit from the sale of minerals. We have conducted extensive supply chain investigations
relating to tantalum and are a participant in “Solutions for Hope,” designed to ensure that tantalum sourced from the DRC does not
derive from conflict areas. “Solutions for Hope” incorporates the independently-validated Conflict-Free Smelter program. The pilot
initiative will be evaluated to verify that the closed pipe supply chain is reliable, sustainable and expandable, and will allow the DRC to
return as a supplier of responsibly-sourced minerals to the tantalum industry.

The costs of our products are influenced by a wide variety of raw materials, including tantalum and other metals such as platinum,
palladium, silver, nickel, gold and copper used in our manufacturing processes. The cost of these materials is subject to price fluctuation
and many have risen significantly during the past few years. In general, increases in the cost of raw materials may be offset by selling price
increases, productivity improvement and cost savings programs, but that is not always the case.

We are a major consumer of the world’s annual production of tantalum. Tantalum powder and wire are principal materials used in
the manufacture of tantalum capacitor products. These materials are purchased from suppliers in various parts of the world at prices that
are subject to periodic adjustment and variations in the market. The tantalum required to manufacture our products has generally been
available in sufficient quantity. The limited number of tantalum material suppliers that process tantalum ore into capacitor grade tantalum
powder has led to higher prices during periods of increased demand.

Competition

Markets for our products are highly competitive. We encounter aggressive and able competition in our various product lines from
both domestic and foreign manufacturers. Competitive factors in the markets include product quality and reliability, breadth of product

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line, customer service, technological innovation, global production presence, timely delivery and price. We believe we are competitively
positioned on each of these factors. The breadth of our product offering enables us to strengthen our market position by providing
customers with one of the broadest selections of passive electronic components and connector products available from any one source.
Our major competitors for passive electronic components are Murata Manufacturing Company Ltd, TDK Corporation, KEMET
Corporation, NEC Corporation, Yageo Corporation, Taiyo Yuden Co. Ltd., Samsung Electro-Mechanics and Vishay Intertechnology,
Inc. Our major competitors for certain electronic connector products are Tyco Electronics, Amphenol, Molex Incorporated, FCI and
Erni Electronics. There are many other companies that produce products in the markets in which we compete.

Employees

As of March 31, 2012, we employed approximately 10,800 full-time employees. Approximately 1,500 of these employees are
employed in the United States. Of the employees located in the United States, approximately 400 are covered by collective-bargaining
arrangements. In addition, some foreign employees are members of trade and government-affiliated unions. Our relationship with our
employee union groups is generally good. However, no assurance can be given that, in response to changing economic conditions and
the Company’s actions, labor unrest or strikes will not occur.

Environmental Matters

We are subject to federal, state and local laws and regulations concerning the environment in the United States and to the
environmental laws and regulations of the other countries in which we operate. These regulations include limitations on discharges into
air and water; remediation requirements; chemical use and handling restrictions; pollution control requirements; waste minimization
considerations; and hazardous materials transportation, treatment and disposal restrictions. If we fail to comply with any of the applicable
environmental regulations we may be subject to fines, suspension of production, alteration of our manufacturing processes, sales
limitations, and criminal and civil liabilities. Existing or future regulations could require us to procure expensive pollution abatement or
remediation equipment, to modify product designs or to incur expenses to comply with environmental regulations. Any failure to control
the use, disposal or storage, or adequately restrict the discharge of hazardous substances could subject us to future liabilities and could
have a material adverse effect on our business. Based on our periodic reviews of the operating policies and practices at all of our facilities,
we believe that our operations are currently in substantial compliance, in all material respects, with all applicable environmental laws and
regulations and that the cost of continuing compliance will not have a material effect on our financial condition or results of operations.

We have been identified by the United States Environmental Protection Agency ("EPA"), state governmental agencies or other
private parties as a potentially responsible party ("PRP") under the Comprehensive Environmental Response, Compensation and Liability
Act ("CERCLA") or equivalent state or local laws for clean-up and response costs associated with certain sites at which remediation is
required with respect to prior contamination. Because CERCLA has generally been construed to authorize joint and several liability, the
EPA could seek to recover all clean-up costs from any one of the PRPs at a site despite the involvement of other PRPs. At certain sites,
financially responsible PRPs other than AVX also are, or have been, involved in site investigation and clean-up activities. We believe that
liability resulting from these sites will be apportioned between AVX and other PRPs.

To resolve our liability at the sites at which the Company has been named a PRP, we have entered into various administrative orders
and consent decrees with federal and state regulatory agencies governing the timing and nature of investigation and remediation As is
customary, the orders and decrees regarding sites where the PRPs are not themselves implementing the chosen remedy contain provisions
allowing the EPA to reopen the agreement and seek additional amounts from settling PRPs in the event that certain contingencies occur,
such as the discovery of significant new information about site conditions during clean-up.

On June 2, 2006, we received a “Confirmation of Potential Liability; Demand and Notice of Decision Not to Use Special Notice
Procedures” dated May 31, 2006 from the EPA with regard to $1.6 million (subsequently reduced to $0.9 million) of past costs, as well as
future costs for environmental remediation, related to the purported release of hazardous substances at an abandoned facility referred to
as the “Aerovox Facility” (the “Facility”), located at 740 Belleville Avenue, New Bedford, Massachusetts. Aerovox Corporation, a
predecessor of AVX, sold this Facility to an unrelated third party in 1973. A subsequent unrelated owner, Aerovox Inc., the last
manufacturer to own and operate in the Facility, filed for bankruptcy in 2001 and abandoned the Facility. AVX has substantially
completed its obligations under agreements between the EPA, the City of New Bedford and AVX. Work pursuant to an agreement with
the state regulatory authorities is expected to begin shortly, and is likely to include soil and groundwater remediation. Based on our own
estimate of remediation costs, we have accrued an estimate of the potential liability related to performance of such environmental
remediation actions at the Facility; however, until remediation is complete, we cannot be certain there will be no additional costs.

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Commonwealth of Massachusetts, subject to reopener provisions, including a reopener if certain remediation costs for the site exceed
$130.5 million. In 2007, we received notification from the EPA and the Department of Justice indicating that the United States was
preparing to exercise the cost reopener. In March 2011, the EPA issued the Fourth Explanation of Significant Differences (“ESD #4”)
that explains the planned changes to the existing remedial action plan for the harbor to include the use of a confined aquatic disposal
(“CAD”) cell, along with interim off-site transportation and disposal of certain contaminated dredge spoils, and the continued use of
long-term on-site storage for other contaminated dredge spoils. ESD #4 provides future cost estimates under the new remedial action
plan (in addition to costs incurred to date) ranging from $362 million to $401 million, net present value, based on certain criteria included
in the ESD #4. The EPA has indicated that remediation costs through December 31, 2011 were approximately $456 million, not all of
which are subject to the reopener provisions.

On April 18, 2012, the EPA issued to the Company a Unilateral Administrative Order (“UAO”) directing the Company to perform
the Remedial Design, the Remedial Action and Operation and Maintenance for the harbor cleanup. The effective date set forth in the
UAO is June 18, 2012, pursuant to which the Company has until June 25, 2012 to inform the EPA if it intends to comply with the UAO.

We have not received complete documentation of past response costs from the EPA and therefore have not yet completed an
investigation of the monies spent or available defenses in light of these notifications and indications. We have also not yet determined
whether the Company can avoid responsibility for all, or some portion, of these past or future costs because the remediation method has
changed over time and costs can be appropriately apportioned to parties other than the Company. We anticipate further discussions with
the U.S. Department of Justice, the EPA, and the Commonwealth of Massachusetts in the first half of our fiscal year 2013.

We are continuing to assess the UAO as well as potential defenses and other actions with respect to the site. However, in light of the
foregoing, we consider it to be probable and reasonably estimable that we will incur cost within a range of approximately $100 million to
$730 million, with no amount within that range representing a more likely outcome until such time as we complete our investigation with
regard to monies spent, available defenses and other matters. We recognize liabilities for environmental exposures when analysis indicates
that is both probable that a liability has been incurred and the amount of loss can be reasonably estimated. When a range of loss can be
estimated, we accrue the most likely amount. In the event that no amount in the range of probable loss is considered most likely, the
minimum loss in the range is accrued. Accordingly, we have recorded a charge for the fourth quarter and year ended March 31, 2012 of
$100 million with respect to this matter.

We currently have remaining reserves of approximately $115.9 million at March 31, 2012 related to the various environmental matters
discussed above. The amount recorded for identified contingent liabilities is based on estimates. Amounts recorded are reviewed
periodically and adjusted to reflect additional legal and technical information that becomes available. The uncertainties about the status of
laws, regulations, regulatory actions, technology and information related to individual sites make it difficult to develop an estimate of the
reasonably possible aggregate environmental remediation exposure; therefore these costs could differ from our current estimates.

During fiscal 2010, AVX was named as a third party defendant in a case filed in Massachusetts Superior Court captioned DaRosa v.
City of New Bedford. This case relates to a former disposal site in the City of New Bedford located at Parker Street. The City asserts that
AVX, among others, contributed to that site. We intend to defend vigorously the claims that have been asserted in these lawsuits. In light
of the foregoing, we are not able to estimate any amount of loss or range of loss. No accrual for costs has been recorded and the potential
impact of this case on our financial position, results of operations, and cash flows cannot be determined at this time.

There are two suits pending with respect to property adjacent to our Myrtle Beach, South Carolina factory claiming property values
have been negatively impacted by alleged migration of certain pollutants from our property. On November 27, 2007, a suit was filed in
the South Carolina State Court by certain individuals as a class action. Another suit is a commercial suit filed on January 16, 2008 in
South Carolina State Court. Both of these suits are pending. We intend to defend vigorously the claims that have been asserted in these
two lawsuits. At this stage of the litigation, there has not been a determination as to responsible parties or the amount, if any, of damages.
In light of the foregoing, we are not able to estimate any amount of loss or range of loss. No accrual for costs has been recorded and the
potential impact of these cases on our financial position, results of operations, and cash flows cannot be determined at this time.

We also operate on sites that may have potential future environmental issues as a result of activities at sites during AVX’s long history of
manufacturing operations or prior to the start of operations by AVX. Even though we may have rights of indemnity for such environmental
matters at certain sites, regulatory agencies in those jurisdictions may require us to address such issues. Once it becomes probable that we will
incur costs in connection with remediation of a site and such costs can be reasonably estimated, we establish reserves or adjust our reserves for
our projected share of these costs. A separate account receivable is recorded for any indemnified costs.

We are not involved in any pending or threatened proceedings that would require curtailment of our operations. We continually
expend funds to ensure that our facilities comply with applicable environmental regulations. While we believe that we are in material
compliance with applicable environmental laws, we cannot accurately predict future developments and do not necessarily have knowledge

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of all past occurrences on sites that we currently occupy. More stringent environmental regulations may be enacted in the future, and we
cannot determine the modifications, if any, in our operations that any such future regulations might require, or the cost of compliance
with such regulations. Moreover, the risk of environmental liability and remediation costs is inherent in the nature of our business and,
therefore, there can be no assurance that material environmental costs, including remediation costs, will not arise in the future.

Company Information and Website

We file annual, quarterly, and current reports, proxy statements, and other documents with the Securities and Exchange Commission
("SEC") under the Securities Exchange Act of 1934 (the “Exchange Act”). The public may read and copy any materials that we file with
the SEC at the SEC's Public Reference Room at 100 F Street, NE, Washington, DC 20549. The public may obtain information on the
operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. Also, the SEC maintains an Internet website that
contains reports, proxy and information statements, and other information regarding issuers, including us, that file electronically with the
SEC. The public can obtain any documents that we file with the SEC at http://www.sec.gov.

In addition, our Company website can be found on the Internet at www.avx.com. Copies of each of our filings with the SEC on
Form 10-K, Form 10-Q and Form 8-K, and all amendments to those reports, can be viewed and downloaded free of charge as soon as
reasonably practicable after the reports and amendments are electronically filed with or furnished to the SEC. To view the reports from
our website, go to “Corporate Information,” then “Investor Relations,” then “Financial Reports.”

The following corporate governance related documents are also available free on our website:

• Code of Business Conduct and Ethics
• Code of Business Conduct and Ethics Supplement Applicable to the Chief Executive Officer, Chief Financial Officer,

Controllers and Financial Managers
• Corporate Governance Guidelines
• Audit Committee Charter
• Compensation Committee Charter
• Equity Compensation Committee Charter
• Special Advisory Committee Charter
• Contact the Board – Whistleblower and Ethics Hotline Procedures

To review these documents, go to our website, click on “Corporate Information,” then on “Corporate Governance.”

Executive Officers of the Registrant

Our executive officers are elected annually by our Board of Directors or, in some cases, appointed in accordance with our bylaws and
each officer holds office until the next annual election of officers or until a successor has been duly elected and qualified, or until the
officer's death or resignation, or until the officer has otherwise been removed in accordance with our bylaws. The following table
provides certain information regarding the current executive officers of the Company:

Name
John S. Gilbertson................

Age
68

Position
Chief Executive Officer and President

Peter Venuto .........................
Carl L. Eggerding .................
Kurt P. Cummings ...............
Keith Thomas.......................
Peter Collis ............................
John Sarvis.............................
John Lawing ..........................
Kathleen Kelly ......................

59
62
56
58
60
62
61
58

Vice President of Sales
Vice President, Chief Technology Officer
Vice President, Chief Financial Officer, Treasurer and Secretary
Vice President, President of Kyocera Electronic Devices
Vice President of Tantalum Products
Vice President of Ceramic Products
Vice President of Advanced Products
Vice President of Human Resources

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John S. Gilbertson

Chief Executive Officer since 2001. President since 1997. Chief Operating Officer from 1994 until 2001 and a member of the Board
since 1990. Executive Vice President from 1992 to 1997, Senior Vice President from 1990 to 1992 and employed by the Company since
1981. Managing Director of Kyocera since 1999. Director of Kyocera since 1995. Member of the Board of Directors of Kyocera
International, Inc., a United States subsidiary of Kyocera, since 2001.

Peter Venuto

Vice President of Sales since 2009. Vice President of North American and European Sales from 2004 to 2009. Vice President of North
American Sales from 2001 to 2004. Divisional Vice President of Strategic Accounts from 1998 until 2000. Director of Strategic Accounts
from 1990 until 1997. Director of Business Development from 1987 until 1989. Employed by the Company since 1987.

Carl L. Eggerding

Vice President, Chief Technology Officer since 2000. Vice President of Technology from 1997 to 2000. Employed by the Company
since 1996. Prior to 1996, employed by IBM as Director of Development for Organic Packaging Technology.

Kurt P. Cummings

Vice President, Chief Financial Officer, and Treasurer since 2000. Secretary since 1997. Corporate Controller from 1992 to 2000. Prior
to 1992, Partner with Deloitte & Touche LLP.

Keith Thomas

Vice President since 2001. President of Kyocera Electronic Devices since 2004. Vice President of Kyocera Developed Products from
2001 to 2004. Divisional Vice President of Kyocera Developed Products from 1992 until 2001. Employed by the Company since 1980.

Peter Collis

Vice President of Tantalum Products since 2001. Plant Manager of Paignton facility from 1998 to 2001. Engineering Manager from 1997
to 1998. Plant Manager of Lanskroun facility from 1996 to 1997. Employed by the Company since 1968.

John Sarvis

Vice President of Ceramic Products since 2005. Divisional Vice President – Ceramics Division from 1998 to 2005. Prior to 1998,
held various Marketing and Operational positions. Employed by the Company since 1973.

John Lawing

Vice President of Advanced Products since 2005. Divisional Vice President of Advanced Products from 2002 to 2005 and Divisional Vice
President of Leaded Products from 1997 to 2002. Prior to 1997, held positions in Engineering, Technical, Operational and Plant
management. Employed by the Company since 1981.

Kathleen Kelly

Vice President of Human Resources since 2010. Prior to the acquisition of American Technical Ceramics by the Company in 2007, served
as Vice President – Administration and as Corporate Secretary of American Technical Ceramics from November 1989.

- 10 -

Item 1A. Risk Factors

From time to time, information provided by us, including, but not limited to statements in this report, or other statements made by or
on our behalf, may contain “forward-looking” information within the meaning of the Private Securities Litigation Reform Act of 1995.
Such statements involve a number of risks, uncertainties and contingencies, many of which are beyond our control, which may cause
actual results, performance or achievements to differ materially from those anticipated.

Our businesses routinely encounter and address risks, some of which will cause our future results to be different – sometimes
materially different – than we presently anticipate. Discussion about the important operational risks that our businesses encounter can
also be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this
Form 10-K. We wish to caution the reader that the following important risk factors and those factors described elsewhere in this report
or other documents that we file or furnish to the Securities and Exchange Commission, could cause our actual results to differ materially
from those stated in forward-looking statements contained in this document and elsewhere. Below, we have described our current view
of certain important strategic risks. These risks are not presented in order of importance or probability of occurrence. Our reactions to
material future developments as well as our competitors’ reactions to those developments will impact our future results.

We operate in a cyclical business which could result in significant fluctuations in demand for our products

Cyclical changes in our customers’ businesses have resulted in, and may in the future result in, significant fluctuations in demand for
our products, our unit costs and our profitability. Most of our customers are in cyclical industries. Their requirements for passive
components and connectors fluctuate significantly as a result of changes in general economic conditions and other factors. During
periods of increasing demand they typically seek to increase their inventory of our products to avoid production bottlenecks. When
demand for their products peaks and begins to decline, as has happened in the past, they tend to reduce or cancel orders for our products
while they use up accumulated stocks. Business cycles vary somewhat in different geographical regions and customer industries.
Significant fluctuations in sales of our products impact our unit manufacturing costs and impact our profitability by making it more
difficult for us to predict our production, raw materials and shipping needs. Changes in demand mix, needed technologies and end-use
markets may adversely affect our ability to match our products, inventory and capacity to meet customer demand and could adversely
affect our operating results and financial condition. We are also vulnerable to general economic events or trends beyond our control, and
our sales and profits may suffer in periods of weak demand.

We must consistently reduce costs to remain competitive and to combat downward price trends

To remain competitive and to combat the impact of potential downward price trends we must consistently reduce the total costs of
our products. Our industry is intensely competitive, and prices for existing products tend to decrease over their life cycle. To remain
competitive, we must achieve continuous cost reductions through process and material improvements. We must also be in a position to
minimize our customers’ inventory financing costs and to meet their other goals for supply chain management. In addition, as a result of
our efforts to streamline manufacturing, logistics operations and enhance operations in low cost labor markets, we have incurred
restructuring costs in the past and could incur restructuring costs in the future in response to changes in global economic and market
conditions. If we are unsuccessful in implementing restructuring or other cost reduction plans, we may experience disruptions in our
operations and incur higher ongoing costs, which may adversely affect our business, financial condition and operating results.

We attempt to improve profitability by operating in countries in which manufacturing costs are lower; but the shift of
operations to these regions may entail considerable expense

Our strategy is aimed at achieving significant production cost savings through the transfer to and expansion of manufacturing
operations in countries with lower productions costs, such as the Czech Republic, Malaysia, Mexico, China and El Salvador. During this
process, we may experience under-utilization of certain plants and factories in higher-cost regions and capacity constraints in plants and
factories located in lower-cost regions. This under-utilization may result initially in production inefficiencies and higher costs. These costs
also include those associated with compensation in connection with work force reductions and plant closings in the higher-cost regions,
and start-up expenses, equipment relocation costs, manufacturing and construction delays, and increased depreciation costs in connection
with the initiation or expansion of production in lower-cost regions. In addition, as we implement transfers of certain of our operations,
we may experience strikes or other types of unrest as a result of lay-offs or termination of our employees in higher-cost countries.

Due to our global operations, we are subject to many laws governing international relations (including but not limited to the Foreign
Corrupt Practices Act and the U.S. Export Administration Act), which prohibit improper payments to government officials and restrict

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where and how we can do business, what information or products we can supply to certain countries, and what information we can
provide to a non-U.S. government. Although we have procedures and policies in place that should mitigate the risk of violations of these
laws, there is no guarantee that they will be sufficiently effective. If and when we acquire new businesses we may not be able to ensure
that the pre-existing controls and procedures meant to prevent violations of the rules and laws were effective and we may not be able to
implement effective controls and procedures to prevent violations quickly enough when integrating newly acquired businesses.

We encounter competition in substantially all areas of our business

We compete primarily on the basis of engineering, product quality, price, customer service, and delivery time. Competitors include
large, diversified companies, some of which have substantial assets and financial resources, as well as medium to small companies. There
can be no assurance that additional competitors will not enter into our existing markets, nor can there be any assurance that we will be
able to compete successfully against existing or new competition.

We must continue to develop innovative products to remain competitive

Most of the fundamental technologies used in the passive components industry have been available for a long time. The market is
nonetheless typified by rapid changes in product designs and technological advantages allowing for better performance and/or lower cost.
New applications are frequently found for existing technologies, and new technologies occasionally replace existing technologies for some
applications or open up new business opportunities in other areas of application. Successful innovation is critical for maintaining
profitability in the face of potential erosion of selling prices for existing products. To combat downward selling price pressure for our
products and to meet market requirements, we must continue to develop innovative products and production techniques. Sustaining and
improving our profitability depends a great deal on our ability to develop new products quickly and successfully to customer
specifications. Non-customized commodity products are especially vulnerable to price pressure, but customized products have also
experienced price pressure in recent years. We have traditionally combated downward pricing trends in part by offering products with
new technologies or applications that offer our customers advantages over older products. We also seek to maintain profitability by
developing products to our customers’ specifications that are not readily available from competitors. Developing and marketing these
products requires start-up costs that may not be recouped if those new products or production techniques are not successful. There are
numerous risks inherent in this process, including the risks that we will be unable to anticipate the direction of technological change or
that we will be unable to develop and market new products and applications in a timely fashion to satisfy customer demands. If this
occurs, we could lose customers and experience adverse effects on our results of operations.

Our operating results are sensitive to raw material availability, quality and cost

Many of our products require the use of raw materials that are available from only a limited number of regions around the world, are
available from only a limited number of suppliers or may be subject to significant fluctuations in market prices. Our results of operations
may be adversely affected if we have difficulty obtaining these raw materials, our key suppliers experience financial difficulties, the quality
of available raw materials deteriorates, or there are significant price increases for these raw materials. For example, the prices for
tantalum, platinum, silver, nickel, gold, copper, palladium and other raw materials that we use in the manufacture of our products, are
subject to fluctuation and have risen significantly in the past. Our inability to recover costs through increased sales prices could have an
adverse impact on our results of operations. For periods in which the prices for these raw materials rise, we may be unable to pass on the
increased cost to our customers which would result in decreased margins for the products in which they are used. For periods in which
margins are declining, we may be required, as has occurred in the past, to write down our inventory carrying cost of these raw materials.
Depending on the extent of the difference between market price and our carrying cost, the write-down could have an adverse effect on
our results of operations.

From time to time there have been short-term market shortages of raw materials. While these shortages have not historically
adversely affected our ability to increase production of products, they have historically resulted in higher raw material costs for us. There
can be no assurance that any of these market shortages in the future would not adversely affect our ability to increase production,
particularly during periods of growing demand for our products.

Our sales to distribution sales channel customers may fluctuate

Selling products to our customers in the electronic component distribution sales channel has associated risks, including, without
limitation, that sales can be negatively impacted on a short-term basis as a result of changes in distributor inventory levels; these changes
may be unrelated to the purchasing trends by the end customer. In the past, we have gone through cycles of inventory correction as
distributors increase or decrease their supply chain inventories based upon their anticipated market needs and economic conditions.

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Our backlog is subject to customer cancellation

We generally do not obtain firm, long-term purchase commitments from our customers. Uncertain economic and geopolitical conditions
have resulted in, and may continue to result in some of our customers delaying the delivery of products that we manufacture for them and
placing purchase orders for lower volumes of products than previously anticipated. Many of the orders that comprise our backlog may be
canceled by our customers without penalty. Our customers may on occasion order components from multiple sources to ensure timely delivery
when delivery lead times are particularly long. They may cancel orders when business is weak and inventories are excessive, a situation that we
have experienced during periods of economic slowdown. Therefore, we cannot be certain that the amount of our backlog does not exceed the
level of orders that will ultimately be delivered. Our results of operations could be adversely impacted if customers cancel a material portion of
orders in our backlog.

Our growth strategy may include growth through acquisitions, which may involve significant risks

We may, from time to time, make strategic acquisitions of other companies or businesses as we believe such acquisitions can help to
position us to take advantage of growth opportunities. Such acquisitions could introduce significant risks and uncertainties, including risks
related to integrating the acquired businesses and achieving benefits from the acquisitions. More particularly, risks and uncertainties of an
acquisition strategy could include: (1) difficulties in integrating newly-acquired businesses and operations in an efficient and effective manner; (2)
challenges in achieving strategic objectives, cost savings and other benefits from acquisitions; (3) risk that our markets do not evolve as
anticipated and that the technologies acquired do not prove to be those needed to be successful in those markets; (4) potential loss of key
employees of the acquired businesses; (5) risk of diverting the attention of senior management from our operations; (6) risks of entering new
markets in which we have limited experience; (7) risks associated with integrating financial reporting and internal control systems; (8) difficulties
in expanding information technology systems and other business processes to accommodate the acquired businesses; and (9) future
impairments of goodwill and other intangible assets of an acquired business.

Changes in our environmental liability and compliance obligations may adversely impact our operations

Our manufacturing operations, products and/or product packaging are subject to environmental laws and regulations governing air
emissions, wastewater discharges, the handling, disposal and remediation of hazardous substances, wastes and certain chemicals used or
generated in our manufacturing process, employee health and safety, labeling or other notifications with respect to the content or other aspects
of our processes, products or packaging, restrictions on the use of certain materials in or on design aspects of our products or product
packaging, and responsibility for disposal of products or product packaging. We also operate on sites that may have potential future
environmental issues as a result of activities at sites during the long history of manufacturing operations of AVX or its corporate predecessor, or
prior to the start of operations by AVX. Even though we may have rights of indemnity for such environmental matters at certain sites,
regulatory agencies in those jurisdictions may require us to address such issues. We establish reserves for specifically identified potential
environmental liabilities when the liabilities are probable and can be reasonably estimated. Nevertheless, there can be no assurance we will not
be obligated to address environmental matters that could have an adverse impact on our operations. In addition, more stringent environmental
regulations may be enacted in the future, and we cannot presently determine the modifications, if any, in our operations that any such future
regulations might require, or the cost of compliance with these regulations. In order to resolve liabilities at various sites, we have entered into
various administrative orders and consent decrees, some of which may be, under certain conditions, reopened or subject to renegotiation. See
“Environmental Matters” in Item 1 elsewhere in this Form 10-K for additional information, including, in particular, information the Company’s
potential liability for remediation costs relating to the New Bedford Harbor in the commonwealth of Massachusetts.

Changes in regulatory and environmental compliance obligations of critical suppliers may adversely impact our operations

The Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank” Act), signed into law on July 21, 2010, includes
Section 1502, which requires the SEC to adopt additional disclosure requirements related to the source of certain “conflict minerals” for issuers
for which such “conflict minerals” are necessary to the functionality or product manufactured, or contracted to be manufactured, by that issuer.
The metals covered by the proposed rules, promulgated on December 15, 2010, are commonly referred to as “3TG” and include tin, tantalum,
tungsten and gold. We use many of these materials in our production processes. If the final rules are adopted as proposed, in order to be able to
accurately report our compliance with section 1502, we may have to perform supply chain due diligence, third party verification and possibly
private sector audits on the sources of these metals down to the mine of origin. Global supply chains are complicated with multiple layers and
supplies between the mine and the final product. Accordingly, we would incur significant cost related to the compliance process. While the
impact of Section 1502 on our business is uncertain at this time, we could potentially have difficulty in procuring needed materials and in
satisfying the final disclosure requirements when finalized by the SEC.

For the past ten years we have had a policy of not using tantalum sourced from the Democratic Republic of Congo (“DRC”) or any other
area in which insurgents or similar groups benefit from the sale of minerals. Additionally, AVX has already conducted extensive supply chain
investigation relating to tantalum and is a participant in the “Solutions for Hope” program, which is designed to ensure that tantalum sourced
from the DRC does not derive from conflict areas. Based on a closed-pipe supply chain that operates in accordance with the due diligence

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guidance for responsible sourcing from areas of weak governance, “Solutions for Hope” incorporates the independently-validated Conflict-Free
Smelter program. The pilot initiative will be evaluated to verify that the closed pipe supply chain is reliable, sustainable and expandable, and will
allow the DRC to return as a supplier of responsibly-sourced minerals to the tantalum industry.

We use significant amounts of electrical energy and processed ores in our production process. Although its status is uncertain, the Kyoto
Protocol is an international agreement that purports to set binding targets for signatory industrialized countries for reducing greenhouse gas
emissions. Further, a number of governments or governmental bodies have introduced or are contemplating legislative and regulatory change in
response to the potential impacts of climate change including pending U.S. legislation that if enacted, would limit and reduce greenhouse gas
emissions through a “cap and trade” system of allowances and credits, among other provisions. There is also current and emerging regulation
in other countries in which we or our customers operate, such as the mandatory renewable energy target in Australia. Any significant, sustained
increase in energy costs could result in increases in our capital expenditures, operating expenses, and costs of important raw materials resulting
in an adverse effect on our results of operations and financial condition.

The potential physical impacts of climate change on the company’s operations are highly uncertain, and will be particular to the geographic

circumstances. These effects may adversely impact the cost, production and financial performance of our operations.

Our results may be negatively affected by foreign currency exchange rates

We conduct business in several international currencies through our worldwide operations, and as a result, are subject to foreign exchange
exposure due to changes in exchange rates of the various currencies. Volatility in exchange rates can positively or negatively affect our sales,
gross margins and retained earnings. In order to minimize the effects of movements in currency exchange rates, we enter into forward exchange
contracts to hedge external and intercompany foreign currency transactions. In addition, we attempt to minimize currency exposure risk by
producing our products in the same country or region in which the products are sold, thereby generating revenues and incurring expenses in the
same currency. There can be no assurance that our approach will be successful, especially in the event of a significant and sudden decline in the
value of any of the international currencies of our worldwide operations. We do not engage in purchasing forward exchange contracts for
speculative purposes.

Our operating results may be adversely affected by foreign operations

We have significant international operations and our operating results and financial condition could be adversely affected by economic,
political, health, regulatory and other circumstances existing in foreign countries in which we operate. International manufacturing and sales are
subject to inherent risks, including production disruption by employee union or works council actions, changes in local economic or political
conditions, the imposition of currency exchange restrictions, unexpected changes in regulatory environments, potentially adverse tax
consequences and the exchange rate risk discussed above. Further, we have operations, suppliers, and customers in countries that are in the
Pacific Basin which may be more susceptible to certain natural disasters, including earthquakes, tsunamis and typhoons. Although we have
operations around the world, a significant natural event could disrupt supply or production or significantly affect the market for some or all of
our products. There can be no assurance that these factors will not have an adverse impact on our production capabilities or otherwise
adversely affect our business and operating results.

We receive government grants from some countries in which we operate. These grants are intended to promote employment and are
generally conditioned on the recipient maintaining certain employment levels. To the extent the number of employees falls below the prescribed
employment levels, we could be required to refund all or a portion of the grants received.

Our products are subject to stringent specifications and operating tolerances

All of our products are built to specifications and tested by us for adherence to such specifications before shipment to customers. We
warrant that our products will meet such specifications. In the past, we have not incurred significant warranty claims. However, we have seen an
increasing trend in the marketplace for claims related to end market product application failures or end-user recall or damage claims related to
product defects which could result in future claims that have an adverse impact on our results of operations.

Fluctuations in the market values of our investment portfolio could adversely affect our financial condition and operating
results

Although we have not recognized any material losses related to our cash equivalents, short-term investments, available for sale securities, or
long-term investments, future declines in the market values of such investments could have an adverse effect on our financial condition and
operating results. Given the global nature of our business, we have investments both domestically and internationally. Additionally, a portion of
our overall investment portfolio includes investments in the financial sector. If the issuers of such investments default on their obligations or
their credit ratings are negatively impacted by liquidity, credit deterioration or losses, financial results, or other factors, the value of our cash
equivalents, short-term investments, available for sale securities and long-term investments could decline and have an adverse effect on our

- 14 -

financial condition and operating results. In addition, our ability to find investments that are both safe and liquid and that provide a reasonable
return may be impaired. This could result in lower interest income and/or higher other-than-temporary impairments.

Credit risk on our accounts receivable could adversely affect our financial condition and operating results

Our outstanding trade receivables are not covered by collateral or credit insurance. While we have procedures to monitor and limit
exposure to credit risk on our trade receivables, there can be no assurance such procedures will effectively limit our credit risk and avoid
losses, which could have an adverse effect on our financial condition and operating results.

Counterparty non-performance to derivative transactions could adversely affect our financial condition and operating results

We evaluate the credit qualities of potential counterparties to derivative transactions and only enter into agreements with those
deemed to have minimal credit risk at the time the agreements are executed. Our foreign exchange hedge portfolio is diversified across
several credit line banks. We carefully monitor the amount of exposure we have with any given bank. We also periodically monitor
changes to counterparty credit quality as well as our concentration of credit exposure to individual counterparties. We do not hold or
issue derivative financial instruments for trading or speculative purposes. A credit crisis could have an impact on our hedging contracts if
our counterparties are forced to file for bankruptcy or are otherwise unable to perform their obligations. If we are required to terminate
hedging contracts prior to their scheduled settlement dates, we may be required to recognize losses. In some cases, we have master netting
agreements that help reduce the risk of counterparty exposures.

Returns on pension and retirement plan assets and interest rate changes could affect our earnings in future periods

The funding position of our pension plans is impacted by the performance of the financial markets, particularly the equity markets,
and the discount rate used to calculate our pension obligations for funding and expense purposes. In the past, declines in the financial
markets have negatively impacted the value of the assets in our defined benefit pension plans. In addition, lower bond yields may reduce
our discount rates, resulting in increased pension contributions and expense.

Funding obligations are determined under government regulations and measured each year based on the value of the assets and
liabilities on a specific date. If the financial markets do not provide the long-term returns that are expected, we could be required to make
larger contributions. The equity markets can be, and in the recent past have been, very volatile, and therefore our estimate of future
contribution requirements can change in relatively short periods of time. In a low interest rate environment, the likelihood of higher
contributions in the future increases.

We may not generate sufficient future taxable income, which may require additional deferred tax assets valuation allowances

As part of the process of preparing our consolidated financial statements, we are required to estimate our tax assets and liabilities in
each of the jurisdictions in which we operate. This process involves management estimating the actual current tax exposure together with
assessing temporary differences resulting from different treatment of items for tax and accounting purposes. These differences result in
deferred tax assets and liabilities that are included within our consolidated balance sheets. We assess the likelihood that our deferred tax
assets will be recoverable as a result of future taxable income and, to the extent we believe that recovery is not likely, we establish a
valuation allowance.

We also record a provision for certain international, federal and state tax contingencies based on the likelihood of obligation, when
needed. In the normal course of business, we are subject to challenges from U.S. and non-U.S. tax authorities regarding the amount of
taxes due. These challenges may result in adjustments of the timing or amount of taxable income or deductions or the allocation of
income among tax jurisdictions. Further, during the ordinary course of business, other changing facts and circumstances may impact our
ability to utilize tax benefits as well as the estimated taxes to be paid in future periods. In the event that actual results differ from our
estimates, we may need to adjust tax accounts and related payments, which could materially impact our financial condition and results of
operations.

If we are unable to generate sufficient future taxable income in certain jurisdictions, or if there is a significant change in the actual tax
rates or the time period within which the underlying temporary differences become taxable or deductible, we could be required to increase

- 15 -

our valuation allowances against our deferred tax assets resulting in an increase in our effective tax rate and an adverse impact on future
operating results.

Liquidity requirements could necessitate transfers of existing cash balances between our subsidiaries which may be subject to
restrictions or cause unfavorable tax or earnings consequences

A significant portion of our cash and investment securities are held by international subsidiaries. While we intend to use a significant
amount of the cash held overseas to fund our international operations and growth, if we encounter a significant need for liquidity
domestically or at a particular location that we cannot fulfill through other internal or external sources, we may experience unfavorable tax
and earnings consequences due to cash transfers. These adverse consequences would occur, for example, if the transfer of cash into the
United States is taxed and no offsetting foreign tax credit is available to offset the U.S. tax liability, resulting in lower earnings.

We are increasingly dependent on information technology, and if we are unable to protect against service interruptions,
data corruption, cyber-based attacks or network security breaches, our operations could be disrupted

We rely on information technology networks and systems, including the internet, to process, transmit and store electronic and
financial information, to manage a variety of business processes and activities, and to comply with regulatory, legal and tax requirements.
We also depend on our information technology infrastructure for digital marketing and sales activities and for electronic communications
among our locations, personnel, customers and suppliers around the world. These information technology systems may be susceptible to
damage, disruptions or shutdowns due to failures during the process of upgrading or replacing software, databases or components
thereof, power outages, hardware failures, computer viruses, attacks by computer hackers, telecommunication failures, user errors or
catastrophic events. If our information technology systems suffer severe damage, disruption or shutdown and our business continuity
plans do not effectively resolve the issues in a timely manner, our product sales, financial condition and results of operations may be
materially and adversely affected, and we could experience delays in reporting our financial results.

In addition, if we are unable to prevent security breaches, we may suffer financial and reputational damage or penalties because of the
unauthorized disclosure of confidential information belonging to us or to our customers or suppliers. In addition, the disclosure of non-
public sensitive information through external media channels could lead to the loss of intellectual property or damage our reputation and
brand image.

Changes in global geopolitical and general economic conditions and other factors beyond our control may adversely impact
our business

The following factors beyond our control could adversely impact our business:

•

A global economic slowdown in any one, or all, of our markets.

Rapid escalation of the cost of regulatory compliance and litigation.

Unexpected government policies and regulations affecting us or our significant customers’ sales or production facilities.

Unforeseen regional conflicts or actions, including but not limited to armed conflict and trade wars that could impact us, or our
customers’ production capabilities.

Unforeseen interruptions to our business with our significant customers and suppliers resulting from but not limited to, strikes,
financial instabilities, computer malfunctions, environmental disruptions, natural disasters, or inventory excesses.

We operate in a continually changing business environment and new factors emerge from time to time. Other unknown and

unpredictable factors also could have either adverse or positive effects on our future results of operations or financial condition.

Item 1B. Unresolved Staff Comments

None.

Item 2.

Properties

Our fixed assets include certain plants and warehouses and a substantial quantity of machinery and equipment, most of which is general

- 16 -

purpose machinery and equipment using tools and fixtures and in many instances have automatic control features and special adaptations. Our
plants, warehouses, machinery and equipment are in good operating condition and are well maintained. Substantially all of our facilities are in
regular use. We consider the present level of fixed assets along with planned capital expenditures as suitable and adequate for our operations in
the current business environment. Our capital expenditures for plant and equipment were $28.9 million in fiscal 2010, $27.5 million in fiscal
2011 and $49.2 million in fiscal 2012.

We believe that our facilities are suitable and adequate for the business conducted therein and are being appropriately utilized for their
intended purposes. Utilization of the facilities varies based on demand for the products. We continuously review our anticipated requirements
for facilities and, based on that review, may from time to time acquire or lease additional facilities and/or dispose of existing facilities.

We conduct manufacturing operations throughout the world. Most of our operations are certified to the ISO 9000 quality standard, a set of
fundamental quality system standards developed by the International Organization for Standardization. Some of our facilities are also qualified
and registered under the more stringent QS 9000, a comprehensive quality system for continuous improvement developed by the U.S.
automotive industry.

Virtually all of our manufacturing, research and development and warehousing facilities could at any time be involved in the
manufacturing, sale or distribution of passive components (“PC”) and interconnect products (“CP”). The following is a list of our
facilities, their approximate square footage, whether they are leased or owned and a description of their use.

Location
UNITED STATES
Fountain Inn, SC
Myrtle Beach, SC

Olean, NY
Jacksonville, FL
Huntington Station, NY
Biddeford, ME
Conway, SC
Sun Valley, CA
Colorado Springs, CO

NON U.S.
Tianjin, China
San Salvador, El Salvador
Saint-Apollinaire, France
Lanskroun, Czech Republic
Lanskroun, Czech Republic
Uherske Hradiste, Czech Republic

Uherske Hradiste, Czech Republic
Penang, Malaysia
Coleraine, N. Ireland
Betzdorf, Germany
Juarez, Mexico
Jerusalem, Israel
Hong Kong

Approximate
Square
Footage

Type of
Interest

Description
of Use

300,000
500,000

113,000
100,000
94,000
72,000
71,000
25,000
15,000

520,000
420,000
322,000
500,000
70,000
470,000

139,000
190,000
185,000
111,000
116,000
88,000
30,000

Owned
Owned

Owned
Owned
Owned
Owned
Owned
Leased
Owned

Owned
Owned
Leased
Owned
Leased
Owned

Headquarters/Manufacturing/Warehouse
Manufacturing/Warehouse/Research — PC — CP

Manufacturing — PC
Manufacturing — PC
Manufacturing/Research— PC
Manufacturing — PC
Manufacturing/Office — PC
Manufacturing — PC
Manufacturing — PC

Manufacturing — PC
Manufacturing — PC
Manufacturing/Research — PC
Manufacturing/Warehouse/Research — PC
Manufacturing/Warehouse — PC
Manufacturing — PC — CP

Manufacturing/Warehouse — CP — PC
Leased
Manufacturing — PC
Owned
Manufacturing/Research — PC
Owned
Manufacturing — CP
Owned
Manufacturing — PC — CP
Owned
Leased
Manufacturing/Research — PC
Owned Warehouse/Office — PC — CP

In addition to the foregoing, we own and lease a number of sales offices throughout the world. In the opinion of management, our
properties and equipment generally are in good operating condition and are adequate for our present needs. We do not anticipate
difficulty in renewing existing leases as they expire or in finding alternative facilities.

Item 3.

Legal Proceedings

There are two pending suits filed against the Company relating to the contamination alleged to have migrated off-site from the Myrtle
Beach facility. One suit was filed in the South Carolina State Court on November 27, 2007 by certain individuals as a class action which is
still in the discovery phase. The other suit is a commercial suit filed on January 16, 2008, currently pending in South Carolina State Court,

- 17 -

by John H. Nance and JDS Development of Myrtle Beach, Inc. We intend to defend vigorously the claims that have been asserted in
these two lawsuits. At this stage of the litigation, there has not been a determination as to the amount, if any, of damages. Accordingly,
the potential impact of the lawsuits on our financial position, results of operations, and cash flows cannot be determined at this time.

During fiscal 2011, AVX was named as a third party defendant in a case filed in Massachusetts Superior Court captioned DaRosa v.
City of New Bedford. This case relates to a former disposal site in the City of New Bedford located at Parker Street. The City asserts that
AVX contributed to that site. We intend to defend vigorously the claims that have been asserted in this lawsuit. At this stage of the
litigation, there has not been a determination as to responsible parties or the amount, if any, of damages. Accordingly, the potential
impact of the case on our financial position, results of operations, and cash flows cannot be determined at this time.

During fiscal 2012, AVX received a demand relating to contamination of a rail yard located in New Bedford, Massachusetts. AVX has
denied liability and is seeking additional information concerning the nature of the contamination, the assertion of liability, the possible
remediation, and the other potentially responsible parties. Accordingly, the potential impact of the site on our financial position, results of
operations, and cash flows cannot be determined at this time.

See “Environmental Matters” in Item 1 elsewhere in this Form 10-K for a discussion of our involvement as a PRP at certain

environmental clean-up sites.

We are involved in disputes and legal proceedings arising in the normal course of business. While we cannot predict the outcome of
these proceedings, we believe, based upon a review with legal counsel, that none of these proceedings will have a material impact on our
financial position, results of operations, or cash flows. However, we cannot be certain if the eventual outcome and any adverse result in
these or other matters that may arise from time to time may harm our financial position, results of operations, or cash flows.

Item 4. Mine Safety Disclosures

Not applicable.

PART II

Item 5. Market for the Registrant's Common Equity, Related Stockholder Matters and

Issuer Purchases of Equity Securities

Market for Common Stock

Our common stock is listed on the New York Stock Exchange and trades under the symbol "AVX." At May 4, 2011, there were
approximately 376 holders of record of the Company's common stock. In addition, there were numerous beneficial holders of the
common stock, representing persons whose stock is held in nominee or "street name" accounts through brokers. The following table
presents the high and low sale prices for our common stock on the New York Stock Exchange and the dividends declared per common
share for each quarter for the fiscal years ended March 31, 2011 and March 31, 2012. On May 8, 2012, our Board of Directors declared a
$0.075 dividend per share of common stock with respect to the quarter ended March 31, 2012. Future dividends, if any, will be
determined by the Company’s Board of Directors and may depend on the Company's future profitability and anticipated operating cash
requirements.

First Quarter
Second Quarter
Third Quarter
Fourth Quarter

Common Stock Price Range

2011

High

15.56
14.43
15.80
16.24

2012

Low

12.82
12.16
13.67
14.68

High

16.48
15.66
13.95
13.85

Low

14.35
11.10
11.45
12.65

Dividends Declared
Per Share

2011
0.0450
0.0450
0.0450
0.0550

2012
0.0550
0.0750
0.0750
0.0750

The name, address and phone number of our stock transfer agent and registrar is:

The American Stock Transfer and Trust Company
59 Maiden Lane, Plaza Level
New York, New York 10038

1-800-937-5449

- 18 -

Stock Performance Graph

The following chart shows, from the end of fiscal year 2007 to the end of fiscal year 2012, changes in the value of $100 invested in
each of the Company’s common stock, Standard & Poor’s 500 Composite Index and a peer group consisting of three companies whose
businesses are representative of our business segments. The companies in the peer group are: Kemet Corporation, Vishay
Intertechnology, Inc. and EPCOS AG.

COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*

$140

$120

$100

$80

$60

$40

$20

$0
Mar-07

Mar-08

Mar-09

Mar-10

Mar-11

Mar-12

AVX Corporation

S&P 500

Peer Group

*Based on initial investment of $100 invested on March 31, 2007 in stock or index, including reinvestment of
dividends. Fiscal year ending March 31.

AVX -NYSE
S & P 500
Peer Group

Cumulative Total Return

3/31/07
100
100
100

$
$
$

3/31/08
85
95
62

$
$
$

3/31/09
61
59
20

$
$
$

3/31/10
97
88
62

$
$
$

3/31/11
104
102
125

$
$
$

3/31/12
94
110
84

$
$
$

Purchases of Equity Securities by the Issuer

The following table provides information regarding purchases by the Company, during the fourth quarter ended March 31, 2012, of

equity securities that are registered pursuant to Section 12 of the Exchange Act:

- 19 -

Purchases of Equity Securities by the Issuer

The following table provides information regarding purchases by the Company, during the fourth quarter ended March 31, 2012, of

equity securities that are registered pursuant to Section 12 of the Exchange Act:

Period
1/1/12 - 1/31/12
2/1/12 - 2/28/12
3/1/12 - 3/31/12

Total

Total Number of
Shares Purchased
(1)

20,000
119,650
14,100
153,750

Average Price
Paid Per Share
13.20
$
13.46
13.38
13.45

Total Number of Shares
Purchased as Part of
Publicly Announced Plans
or Programs (1)

20,000
119,650
14,100
153,750

Maximum Number of
Shares that may yet be
Purchased Under the Plans
or Programs (1)

6,625,813
6,506,163
6,492,063
6,492,063

(1) Our Board of Directors have approved stock repurchase authorizations whereby up to 15,000,000 shares of common stock

could be purchased from time to time at the discretion of management.

- 20 -

Item 6.

Selected Financial Data

The following table sets forth selected consolidated financial data for AVX for the five fiscal years ended March 31, 2012. The
selected consolidated financial data for the five fiscal years ended March 31, 2012 are derived from AVX's audited consolidated financial
statements. The consolidated financial data set forth below should be read in conjunction with AVX's consolidated financial statements
and the notes thereto and "Management's Discussion and Analysis of Financial Condition and Results of Operations" included elsewhere
in this Form 10-K.

Selected Financial Data
(in thousands, except per share data)

Years Ended March 31,
Operating Results Data:
Net sales
Cost of sales
Vendor settlement
Restructuring charges
Gross profit
Selling, general and administrative expenses
Environmental charges
Restructuring charges
In-process research and development charge
Other operating income
Profit from operations
Interest income
Interest expense
Other, net
Income before income taxes
Provision for income taxes

Net income
Income per share:
Basic
Diluted
Weighted average common shares outstanding:
Basic
Diluted

Cash dividends declared per common share

As of March 31,
Balance Sheet Data:
Working capital
Total assets
Stockholders' equity

Years Ended March 31,

Other Data:

Capital expenditures

$
$

2008

2009

2010

2011

2012

1,619,275
1,328,491
-
2,421
288,363
126,848
-
-
390
-
161,125
43,226
(456)
(530)
203,365
53,892

149,473

0.87
0.87

$
$

1,389,613
1,158,196
-
15,123
216,294
121,897
18,200
3,504
-
(4,051)
76,744
21,112
(139)
(578)
97,139
16,293

80,846

0.47
0.47

$
$

1,304,966
1,027,368
(5,000)
4,397
278,201
108,527
-
2,509
-
(3,519)
170,684
7,120
(111)
(1,336)
176,357
33,499

142,858

0.84
0.84

$
$

1,653,176
1,195,790
-
-
457,386
123,887
8,575
-
-
-
324,924
6,569
-
2,766
334,259
90,256

244,003

1.44
1.43

$
$

1,545,254
1,153,295
-
-
391,959
116,408
100,000
-
-
-
175,551
6,798
(707)
(1,737)
179,905
27,100

152,805

0.90
0.90

171,487
172,065

170,616
170,689

170,247
170,274

170,025
170,390

169,886
170,134

0.16

0.19

0.28

2008

2009

2010

2011

2012

1,156,689 $
2,109,078
1,829,351

983,102 $

1,872,529
1,669,753

1,123,085 $
2,051,492
1,801,007

1,366,450 $
2,319,482
2,039,417

1,430,072
2,468,012
2,120,753

2008

2009

2010

2011

2012

70,886 $

44,205 $

28,888 $

27,470 $

49,201

26,328

Research, development and engineering expenses

35,465

31,477

24,667

23,683

- 21 -

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

Overview

AVX Corporation is a leading worldwide manufacturer and supplier of a broad line of passive electronic components and interconnect
products. Electronic components and connector products manufactured by AVX are used in virtually all types of electronic products, including
those in consumer electronics, telecommunications, automotive military/aerospace, medical, computer and industrial markets. The Company
has five main product groups: Ceramic Components, Tantalum Components, Advanced Components, Interconnect Products and Kyocera
Electronic Devices. These product lines are organized into three reportable segments: Passive Components, Interconnect and KED Resale.

Consolidated revenues for the fiscal year ended March 31, 2012 were $1,545.3 million with net income of $152.8 million compared to
consolidated revenues of $1,653.2 million with net income of $244.0 million for the fiscal year ended March 31, 2011. During fiscal 2012 we saw
stronger demand in the first half of the fiscal year compared to fiscal 2011 as a result of our customers’ concerns about product availability that
arose after the earthquake and tsunami in Japan. After the strong demand in the first half of the current fiscal year, supply chain inventory
availability concerns eased throughout the second half of fiscal 2012 following both the earthquake in Japan and later, Thailand floods, as
customers worked down existing order backlog and inventories and replenished inventories only as needed due to shortened component
delivery lead times. Overall sales prices for our commodity component products declined during the second half of the year as lower immediate
delivery demand in the marketplace led to increased sales price pressure. Gross margins declined from the higher gross margins in fiscal 2011
primarily due to higher energy and material costs as well as lower selling prices. We continued to proactively take actions to manage our
production efficiencies and tightly control our spending to help offset these higher costs and unfavorable sales prices pressure. We also
recorded a $100 million environmental charge as an estimate of related to environmental issues at the New Bedford Harbor Superfund Site in
Massachusetts.

In fiscal 2012, we generated operating cash flows of $148.4 million. We used cash generated from operations for strategic purchases of
certain raw materials, thereby improving our competitive position, and to fund capital expenditures, fund other working capital needs,
repurchase shares of our common stock, which are held as treasury stock, and pay increased dividends. We have approximately $1.1 billion of
cash, cash equivalents and securities investments and no debt as of March 31, 2012.

We remain committed to investing in new products and improvements to our production processes as well as continued investment in
research, development and engineering in order to provide our customers with new generations of passive component and interconnect product
solutions. We are currently producing more sophisticated electronic component parts necessitated by the breadth and increase in functionality
of the electronic devices and increased electronic content in products such as smart phones, tablets, ultrabooks, netbooks, automobiles and
renewable energy products that are manufactured by our customers. As a result, we have continued our focus on value-added advanced
products and interconnect solutions to serve this expanding market. We are also focused on controlling and reducing costs to accommodate
market forces and offset rising costs of energy and raw materials. We do this by investing in automated manufacturing technologies, enhancing
manufacturing materials and efficiencies and rationalizing our production capabilities around the world. We believe that this philosophy will
enable us to adapt quickly and benefit as market conditions change and provide shareholder value.

In addition, we may, from time to time, consider strategic acquisitions of other companies or businesses in order to expand our product
offerings or otherwise improve our market position. We evaluate potential acquisitions in order to position ourselves to take advantage of
profitable growth opportunities.

Outlook

Near-Term:

With unpredictable global geopolitical and economic conditions, we are uncertain what to expect in fiscal 2013. Near-term results for us will
depend on the impact of the overall global geopolitical and economic conditions and their impact on telecommunications, information
technology hardware, automotive, consumer electronics and other electronic markets. Looking ahead, visibility is low and forecasting is a
challenge in this uncertain and volatile market. We expect to see typical pricing pressure in the markets we serve as electronic component
product supply comes more in balance with demand. In response to anticipated market conditions, we expect to continue to focus on cost
management and product line rationalization to maximize earnings potential. We also continue to focus on process improvements and
enhanced production capabilities in conjunction with our focus on the sales of value-added electronic components to support today’s advanced
electronic devices. If current global geopolitical and economic conditions worsen, the overall impact on our customers as well as end user
demand for electronic products could have a significant adverse impact on our near-term results.

- 22 -

Long-Term:

Although there is uncertainty in the near-term market as a result of the current global geopolitical and economic conditions, we continue to
see opportunities for long-term growth and profitability improvement due to: (a) a projected increase in the long-term worldwide demand for
more sophisticated electronic devices, which require electronic components such as the ones we sell, (b) cost reductions and improvements in
our production processes and (c) opportunities for growth in our Advanced Component and Interconnect product lines due to advances in
component design and our production capabilities. We have fostered our financial health and the strength of our balance sheet. We remain
confident that our strategies will enable our continued long-term success.

Results of Operations

Year Ended March 31, 2012 compared to Year Ended March 31, 2011

Net sales for the fiscal year ended March 31, 2012 were $1,545.3 million compared to $1,653.2 million for the fiscal year ended March

31, 2011.

The table below represents product group revenues for the fiscal years ended March 31, 2010, 2011 and 2012.

Sales revenue (in thousands)
Ceramic Components
Tantalum Components
Advanced Components

Total Passive Components

KDP and KKC Resale
KEC Resale Connectors
Total KED Resale

Interconnect

Total Revenue

2010
155,059
280,991
369,811
805,861
338,701
73,973
412,674
86,431
1,304,966

Years Ended March 31,
2011
211,998
419,792
410,110
1,041,900
440,050
66,088
506,138
105,138
1,653,176

2012
179,984
393,468
378,843
952,295
410,419
54,765
465,184
127,775
1,545,254

Passive Component sales were $952.3 million for the fiscal year ended March 31, 2012 compared to $1,041.9 million during the fiscal
year ended March 31, 2011. The sales decrease in Passive Components reflects the supply chain inventory correction discussed above, as
well as overall lower demand for electronics across global markets as both consumers and manufacturers decreased spending as a result of
global economic uncertainty when compared to the fiscal year ended March 31, 2011. Compared to the same period last year, we saw
lower sales in most of the markets we serve, particularly in the industrial, alternative energy, medical and consumer markets. Those
declines were partially offset by higher demand in the automotive market.

KDP and KKC Resale sales were $410.4 million for the fiscal year ended March 31, 2012 compared to $440.1 million during the
fiscal year ended March 31, 2011. When compared to the same period last year, the decrease during the fiscal year ended March 31, 2012
is primarily attributable to the supply chain inventory correction mentioned above, a decrease in unit sales volume in the Asian region due
to lower end user demand, particularly in the consumer market, and a shift in Kyocera’s mobile phone division purchasing to procure
components directly in Asia from other Kyocera affiliates.

Total Interconnect product sales, including AVX manufactured and KEC Resale Connectors, were $182.5 million in the fiscal year
ended March 31, 2012 compared to $171.2 million during the fiscal year ended March 31, 2011. This increase was primarily attributable to
an increased demand in European and Asian regional automotive sectors reflective of the increased electronic content in today’s
automobiles.

Our sales to independent electronic distributors represented 38% of total net sales for the fiscal year ended March 31, 2012,
compared to 42% for fiscal year ended March 31, 2011. This decrease in sales is a result of distributors reducing purchases to realign
inventory balances in light of expected demand. Our sales to distributor customers involve specific ship and debit and stock rotation
programs for which sales allowances are recorded as reductions in sales. Such allowance charges were $29.6 million, or 4.8% of gross
sales to distributor customers, for the fiscal year ended March 31, 2012 and $32.8 million, or 4.5% of gross sales to distributor customers,
for the fiscal year ended March 31, 2011. Applications under such programs for fiscal years ended March 31, 2012 and 2011 were
approximately $28.8 million and $31.4 million, respectively.

- 23 -

Geographically, compared to the fiscal year ended March 31, 2011, sales for the fiscal year ended March 31, 2012 increased 1% (to
45%) in Asia and 2% (to 27.0%) in Europe, offset by a decline of 3% in the Americas (to 28%), reflective of higher demand in the Asia
region and the relative strength of the automotive markets in Europe. As a result of the weakness of the U.S. dollar against certain foreign
currencies, sales for the year ended March 31, 2012 were favorably impacted by approximately $47.8 million when compared to the prior
year.

Gross profit margin in the fiscal year ended March 31, 2012 decreased to 25.4% of sales or $392.0 million compared to a gross profit
margin of 27.7% of sales or $457.4 million in the fiscal year ended March 31, 2011. This overall decrease is primarily attributable to lower
sales, increased costs for materials and energy, as well as modest product sales price declines. In addition, when compared to the prior
fiscal year, costs were unfavorably impacted by approximately $65.2 million due to the weakness of the U.S. dollar against certain foreign
currencies.

Selling, general and administrative expenses for the fiscal year ended March 31, 2012 were $116.4 million, or 7.5% of net sales,
compared to $123.9 million, or 7.5% of net sales, for the fiscal year ended March 31, 2011. The decrease in selling, general and
administrative expenses was primarily due to lower selling expenses resulting from lower sales and cost control measures which were
implemented throughout the fiscal year.

Research, development and engineering expenditures, which encompass the personnel and related expenses devoted to developing
new products and maintaining existing products, processes and technical innovations, were approximately $26.3 million and $23.7 million
in fiscal 2012 and 2011, respectively. Research and development costs included therein increased in fiscal 2012 to $7.7 million compared
to $7.4 million in fiscal 2011. Engineering expenses increased $2.3 million to $18.6 million in fiscal 2012 compared to $16.3 million in
fiscal 2011.

Profit from operations for the fiscal year ended March 31, 2012 decreased $149.3 million to $175.6 million compared to $324.9
million for the fiscal year ended March 31, 2011. This decrease is a result of the factors above, and the recognition of a $100 million
environmental charge related to environmental issues at the New Bedford Harbor Superfund Site in Massachusetts. During the fiscal year
ended March 31, 2011 we recognized $8.6 million for environmental and legal related charges related to the implementation of certain
environmental remediation actions in the U.S. See Note 11 to our consolidated financial statements elsewhere herein for further
discussion related to these environmental charges.

Other income decreased $5.0 million to $4.4 million in fiscal 2012 compared to $9.3 million in fiscal 2011. This decrease is
attributable to lower net foreign currency gains, partially offset by a slight increase in interest income of approximately $0.2 million
resulting from higher investment income on higher investment balances when compared to the prior fiscal year.

The effective tax rate for the fiscal year ended March 31, 2012 was 15.1% compared to an effective tax rate of 27.0% for the fiscal
year ended March 31, 2011. This lower effective tax rate is primarily due to $11.5 million of one-time income tax benefits primarily
attributable to the utilization of U.S foreign tax credits relating to our South American and European operations in addition to the
reversal of certain U.S. state income tax valuation allowances during the fourth quarter of the current fiscal year. The effective tax rate was
also favorably impacted by the $37.5 million tax benefit related to the environmental charge discussed above. Excluding the one-time
income tax benefits and the tax benefit related to the environmental charge, the effective tax rate for the fiscal year ended March 31, 2012
was 27.2%.

As a result of the factors discussed above, net income for the fiscal year ended March 31, 2012 was $152.8 million compared to

$244.0 million for the fiscal year ended March 31, 2011.

- 24 -

Year Ended March 31, 2011 Compared to Year Ended March 31, 2010

Net sales for the fiscal year ended March 31, 2011 were $1,653.2 million compared to $1,305.0 million for the fiscal year ended March

31, 2010.

The table below represents product group revenues for the fiscal years ended March 31, 2009, 2010, and 2011.

Sales revenue (in thousands)
Ceramic Components
Tantalum Components
Advanced Components

Total Passive Components

KDP and KKC Resale
KEC Resale Connectors
Total KED Resale

Interconnect

Total Revenue

2009
165,740
268,326
434,039
868,105
354,258
76,209
430,467
91,041
1,389,613

Years Ended March 31,
2010
155,059
280,991
369,811
805,861
338,701
73,973
412,674
86,431
1,304,966

2011
211,998
419,792
410,110
1,041,900
440,050
66,088
506,138
105,138
1,653,176

Passive Component sales were $1,041.9 million for the fiscal year ended March 31, 2011 compared to $805.9 million during the fiscal year
ended March 31, 2010. The sales increase in Passive Components reflects the overall improvement in global markets in all regions and virtually
all markets and sales channels that began during the second half of fiscal 2010 and continued throughout fiscal 2011. The increase in sales of
Ceramic Components reflects an increase in the volume of unit sales and favorable pricing environment resulting from increased demand due to
the improved global economy and resulting increased demand for electronic components. The increase in sales of Tantalum Components is the
result of increased demand and a favorable pricing environment for these components as customers increased purchases in response to the
improved economic conditions. Increased revenues from Advanced Components reflect the higher demand resulting from the improved global
economy and resulting end user demand for electronic component products and concurrent demand for increased functionality in electronic
products such as smart phones, tablets and automobiles.

KDP and KKC Resale sales were $440.1 million for the fiscal year ended March 31, 2011 compared to $338.7 million during the fiscal year
ended March 31, 2010. When compared to fiscal 2010, the increase during fiscal 2011 is primarily attributable to an increase in KDP unit sales
volume due to higher end user demand, particularly in the telecommunications market, resulting from the improvement in global economic
conditions.

Total Interconnect product sales, including AVX manufactured and KEC Resale Connectors, were $171.2 million in the fiscal year ended
March 31, 2011 compared to $160.4 million during the fiscal year ended March 31, 2010. This increase was primarily attributable to increases in
the automotive and telecommunications based product sectors as a result of the improved global economy.

Our sales to independent electronic distributors represented 42% of total net sales for the fiscal year ended March 31, 2011, compared to
39% for fiscal year ended March 31, 2010. Our sales to distributor customers involve specific ship and debit and stock rotation programs for
which sales allowances are recorded as reductions in sales. Such allowance charges were $32.8 million, or 4.5% of gross sales to distributor
customers, for the fiscal year ended March 31, 2011 and $29.5 million, or 5.5% of gross sales to distributor customers, for the fiscal year ended
March 31, 2010. Applications under such programs for fiscal years ended March 31, 2011 and 2010 were approximately $32.8 million and $ 29.7
million, respectively.

Geographically, compared to the fiscal year ended March 31, 2010, sales for the fiscal year ended March 31, 2011 were 25% in Europe, 31%
in the Americas and 44% in Asia. The movement of the U.S. dollar against certain foreign currencies resulted in an unfavorable impact on sales
for the year ended March 31, 2011 of approximately $18.1 million when compared to the prior year.

Gross profit in the fiscal year ended March 31, 2011 increased to 27.7% of sales or $457.4 million compared to a gross profit margin of
21.3% of sales or $278.2 million in the fiscal year ended March 31, 2010. This increase is primarily a result of the increased demand for higher
margin value added products, particularly for Tantalum Components, due to end user demand for increased functionality and electronic content
increases in end user products such as automobiles, smart phones, tablets, hybrid and electric cars and renewable energy products and concerns
about component availability. This increased demand for higher margin value added products in conjunction with improved operating
efficiencies and disciplined cost management resulted in higher margins throughout fiscal 2011. During the fiscal year ended March 31, 2011,
benefits from higher production volumes and lower operating costs were partially offset by higher raw materials and energy cost. During the

- 25 -

fiscal year ended March 31, 2010 we incurred restructuring charges of $4.4 million related to headcount reductions and other charges including
those related to facility closures as we realigned production capabilities and reduced operating costs. There were no restructuring charges for the
year ended March 31, 2011. During the fiscal year ended March 31, 2010, we also recorded a $5.0 million reduction in cost of sales related to a
vendor settlement. In addition, during fiscal 2011 when compared to the prior year, there was a favorable impact on costs of approximately
$22.3 million due to currency movement of the U.S. dollar against certain foreign currencies.

Selling, general and administrative expenses for the fiscal year ended March 31, 2011 were $123.9 million, or 7.5% of net sales, compared to
$108.5 million, or 8.3% of net sales, for the fiscal year ended March 31, 2010. The increase in selling, general and administrative expenses was
primarily due to higher selling expenses resulting from higher sales. During the fiscal year ended March 31, 2010, we recorded $2.5 million of
restructuring charges primarily related to headcount reductions to reduce ongoing selling, general and administrative expenses.

Research, development and engineering expenditures, which encompass the personnel and related expenses devoted to developing new
products and maintaining existing products, processes and technical innovations, were approximately $23.7 million and $24.7 million in fiscal
2011 and 2010, respectively. Research and development costs included therein increased in fiscal 2011 to $7.4 million compared to $6.8 million
in fiscal 2010. Engineering expenses decreased $1.5 million to $16.3 million in fiscal 2011 compared to $17.8 million in fiscal 2010.

Profit from operations for the fiscal year ended March 31, 2011 increased $154.2 million to $324.9 million compared to $170.7 million for
the fiscal year ended March 31, 2010. In addition to the factors discussed above, during the fiscal year ended March 31, 2011 we recognized $8.6
million for environmental and related legal charges related to the implementation of certain environmental remediation actions in the U.S. Gains
of $3.5 million resulting from the sale of excess corporate assets are included in other operating income for the fiscal year ended March 31,
2010.

Other income increased $3.6 million to $9.3 million in fiscal 2011 compared to $5.7 million in fiscal 2010. This increase is attributable to net
foreign currency gains of approximately $1.7 million in fiscal 2011 compared to net foreign currency losses of $1.6 million in fiscal 2010,
partially offset by a decrease in interest income of approximately $0.6 million resulting from lower return rates on investment balances when
compared to the prior fiscal year. Included in other income for the fiscal year ended March 31, 2010 are impairment charges related to the
decline in market value of certain available-for-sale securities of $0.4 million.

The effective tax rate for the fiscal year ended March 31, 2011 was 27.0% compared to an effective tax rate of 19.0% for the fiscal year
ended March 31, 2010. This higher effective tax rate is primarily due to the decrease in the amount of deferred tax liabilities associated with
certain of our foreign branch losses taken as deductions in prior years’ U.S. tax returns no longer subject to U.S. income tax recapture
regulations. In March 2007, the Internal Revenue Service enacted a change in tax regulations that reduced the U.S. income tax recapture period
for such foreign branch losses from 15 to 5 years. As a result, $3.6 million of recapture expired in the current fiscal year compared to $16.6
million during the fiscal year ended March 31, 2010. In addition, the effective tax rate increased due to the increase in pre-tax income in higher
tax rate jurisdictions when compared to the same period last year, partially offset by a one-time tax benefit of $2.2 million attributable to an
increase in available U.S. foreign tax credits relating to one of our European operations. We estimate a further reduction in deferred tax
liabilities of $3.2 million during the fiscal year ending March 31, 2012 as the recapture period related to foreign branch losses deducted in certain
prior years expire.

As a result of the factors discussed above, net income for the fiscal year ended March 31, 2011 was $244.0 million compared to $142.9

million for the fiscal year ended March 31, 2010.

Financial Condition

Liquidity and Capital Resources

Our liquidity needs arise primarily from working capital requirements, dividends, capital expenditures and acquisitions. Historically, the
Company has satisfied its liquidity requirements through funds from operations and investment income from cash and investments in securities.
As of March 31, 2012, we had a current ratio of 5.8 to 1, $1,051.5 million of cash, cash equivalents and investments in securities, $2,120.8
million of stockholders' equity and no debt.

As of March 31, 2012, we had cash, cash equivalents and short-term and long-term investments in securities of $1,051.5 million, of which
$469.6 million was held outside the U.S. Liquidity is subject to many factors, such as normal business operations as well as general economic,
financial, competitive, legislative, and regulatory factors that are beyond our control. Cash balances generated and held in foreign locations are
used for on-going working capital, capital expenditure needs and to support acquisitions. These balances are currently expected to be
permanently reinvested outside the U.S. If these funds were needed for general corporate purposes in the U.S., we would incur significant
income taxes to repatriate to the U.S. cash held in foreign locations. In addition, local government regulations may restrict our ability to move
funds among various locations under certain circumstances. Management does not believe such restrictions would limit our ability to pursue the
Company’s intended business strategy.

- 26 -

Net cash from operating activities was $148.4 million for the fiscal year ended March 31, 2012, compared to $152.1 million for the fiscal

year ended March 31, 2011 and $200.5 million for the fiscal year ended March 31, 2010.

Purchases of property and equipment were $49.2 million in fiscal 2012, $27.5 million in fiscal 2011 and $28.9 million in fiscal 2010.
Expenditures primarily related to expanding the production capabilities of the passive component and connector product lines, expanding
production capacity in lower cost regions, as well as the implementation of improved manufacturing processes. We continue to make strategic
capital investments in our advanced and specialty passive component and interconnect products and expect to incur capital expenditures of
approximately $50 million in fiscal 2013. The actual amount of capital expenditures will depend upon the outlook for end market demand.

Our funding is internally generated through operations and investment income from cash and investments in securities. We have assessed
the condition of the current global credit market on our current business and believe that based on the financial condition of the Company as of
March 31, 2012, that cash on hand and cash expected to be generated from operating activities and investment income from cash and
investments in securities will be sufficient to satisfy our anticipated financing needs for working capital, capital expenditures, environmental
clean-up costs, pension plan funding, research, development and engineering expenses and any dividend payments or stock repurchases to be
made during the upcoming year. While changes in customer demand have an impact on our future cash requirements, changes in those
requirements are mitigated by our ability to adjust manufacturing capabilities to meet increases or decreases in customer demand. Additionally,
we do not anticipate any significant changes in our ability to generate or meet our liquidity needs in the long-term.

In fiscal 2010, 2011 and 2012, dividends of $27.2 million, $32.3 million and $44.2 million, respectively, were paid to stockholders.

On October 19, 2005, the Board of Directors of the Company authorized the repurchase of 5,000,000 shares of our common stock. On
October 17, 2007, the Board of Directors of the Company authorized the repurchase of an additional 5,000,000 shares of our common stock.
As of March 31, 2012, there were 6,492,063 shares that may yet be repurchased under this program.

We purchased 321,969 shares at a cost of $3.7 million during fiscal 2010, 445,528 shares at a cost of $6.2 million during fiscal 2011 and
625,068 shares at a cost of $8.4 million during fiscal 2012. The repurchased shares are held as treasury stock and are available for general
corporate purposes.

At March 31, 2012, we had contractual obligations for the acquisition or construction of plant and equipment aggregating approximately

$1.4 million.

We make contributions to our U.S. and international defined benefit plans as required under various pension funding regulations. We made
contributions of $8.2 million to our international defined benefit plans during the year ended March 31, 2012 and estimate that we will make
contributions of approximately $7.7 million during the fiscal year ending March 31, 2013. We have unfunded actuarially computed pension
liabilities of approximately $22.9 million related to these defined benefit pension plans as of March 31, 2012.

We are a lessee under long-term operating leases primarily for office space, plant and equipment. Future minimum lease commitments

under non-cancelable operating leases as of March 31, 2012, were approximately $25.7 million.

From time to time we enter into delivery contracts with selected suppliers for certain metals used in our production processes. The delivery

contracts represent routine purchase orders for delivery within three months and payment is due upon receipt.

We are involved in disputes, warranty and legal proceedings arising in the normal course of business. While we cannot predict the outcome
of these proceedings, we believe, based upon our review with legal counsel, that none of these proceedings will have a material impact on our
financial position, results of operations, or cash flows. However, we cannot be certain if the eventual outcome and any adverse result in these or
other matters that may arise from time to time may harm our financial position, results of operations, or cash flows.

On June 2, 2006, we received a “Confirmation of Potential Liability; Demand and Notice of Decision Not to Use Special Notice
Procedures” dated May 31, 2006 from the EPA with regard to $1.6 million (subsequently reduced to $0.9 million) of past costs, as well as future
costs for environmental remediation, related to the purported release of hazardous substances at an abandoned facility referred to as the
“Aerovox Facility” (the “Facility”), located at 740 Belleville Avenue, New Bedford, Massachusetts. Aerovox Corporation, a predecessor of
AVX, sold this Facility to an unrelated third party in 1973. A subsequent unrelated owner, Aerovox Inc., the last manufacturer to own and
operate in the Facility, filed for bankruptcy in 2001 and abandoned the Facility. AVX has substantially completed its obligations under
agreements between the EPA, the City of New Bedford and AVX. Work pursuant to an agreement with the state regulatory authorities is
expected to begin shortly, and is likely to include soil and groundwater remediation. Based on our own estimate of remediation costs, we have
accrued an estimate of the potential liability related to performance of such environmental remediation actions at the Facility; however, until
remediation is complete, we cannot be certain there will be no additional costs.

In 1991, in connection with a consent decree, we paid $66 million, plus interest, toward the environmental conditions at, and remediation

- 27 -

of, New Bedford Harbor in the Commonwealth of Massachusetts (“the harbor”) in settlement with the United States and the Commonwealth
of Massachusetts, subject to reopener provisions, including a reopener if certain remediation costs for the site exceed $130.5 million. In 2007,
we received notification from the EPA and the Department of Justice indicating that the United States was preparing to exercise the cost
reopener. In March 2011, the EPA issued the Fourth Explanation of Significant Differences (“ESD #4”) that explains the planned changes to
the existing remedial action plan for the harbor to include the use of a confined aquatic disposal (“CAD”) cell, along with interim off-site
transportation and disposal of certain contaminated dredge spoils, and the continued use of long-term on-site storage for other contaminated
dredge spoils. ESD #4 provides future cost estimates under the new remedial action plan (in addition to costs incurred to date) ranging from
$362 million to $401 million, net present value, based on certain criteria included in the ESD #4. The EPA has indicated that remediation costs
through December 31, 2011 were approximately $456 million, not all of which are subject to the reopener provisions.

On April 18, 2012, the EPA issued to the Company a Unilateral Administrative Order (“UAO”) directing the Company to perform the
Remedial Design, the Remedial Action and Operation and Maintenance for the harbor cleanup. The effective date set forth in the UAO is June
18, 2012, pursuant to which the Company has until June 25, 2012 to inform the EPA if it intends to comply with the UAO.

We have not received complete documentation of past response costs from the EPA and therefore have not yet completed an investigation
of the monies spent or available defenses in light of these notifications and indications. We have also not yet determined whether the Company
can avoid responsibility for all, or some portion, of these past or future costs because the remediation method has changed over time and costs
can be appropriately apportioned to parties other than the Company. We anticipate further discussions with the U.S. Department of Justice, the
EPA, and the Commonwealth of Massachusetts in the first half of our fiscal year 2013.

We are continuing to assess the UAO as well as potential defenses and other actions with respect to the site. However, in light of the
foregoing, we consider it to be probable and reasonably estimable that we will incur cost within a range of approximately $100 million to $730
million, with no amount within that range representing a more likely outcome until such time as we complete our investigation with regard to
monies spent, available defenses and other matters. We recognize liabilities for environmental exposures when analysis indicates that is both
probable that a liability has been incurred and the amount of loss can be reasonably estimated. When a range of loss can be estimated, we
accrue the most likely amount. In the event that no amount in the range of probable loss is considered most likely, the minimum loss in the
range is accrued. Accordingly, we have recorded a charge for the fourth quarter and year ended March 31, 2012 of $100 million with respect to
this matter.

We have been named as a potentially responsible party in state and federal administrative proceedings seeking contribution for costs
associated with the correction and remediation of environmental conditions at various waste disposal and operating sites. In addition, we
operate on sites that may have potential future environmental issues as a result of activities at sites during AVX’s long history of manufacturing
operations or prior to the start of operations by AVX. Even though we may have rights of indemnity for such environmental matters at certain
sites, regulatory agencies in those jurisdictions may require us to address such issues. Once it becomes probable that we will incur costs in
connection with remediation of a site and such costs can be reasonably estimated, we establish reserves or adjust our reserves for our projected
share of these costs. A separate account receivable is recorded for any indemnified costs. Our environmental reserves are not discounted and
do reflect any possible future insurance recoveries, which are not expected to be significant, but do reflect a reasonable estimate of cost sharing
at multiple party sites or indemnification of our liability by a third party.

We currently have environmental reserves for current and estimated future remediation and compliance costs of approximately $115.9
million at March 31, 2012. The amount recorded for identified contingent liabilities is based on estimates. Amounts recorded are reviewed
periodically and adjusted to reflect additional legal and technical information that becomes available. The uncertainties about the status of laws,
regulations, regulatory actions, technology and information related to individual sites make it difficult to develop an estimate of the reasonably
possible aggregate environmental remediation exposure; therefore these costs could differ from our current estimates.

Disclosures about Contractual Obligations and Commitments

The Company has the following contractual obligations and commitments as of March 31, 2012 as noted below.

Contractual Obligations (in thousands)
Operating Leases
Plant and Equipment

Total
25,728
1,384

FY 2013
6,041
1,384

$
$

FY 2014 -
FY 2015
9,236
-

FY 2016 -
FY 2017
7,969
-

$
$

Thereafter
2,482
-

$
$

As discussed in Note 8 to our consolidated financial statements elsewhere herein, the amount of unrecognized tax benefits recorded in the
Company’s balance sheet at March 31, 2012 was $12.0 million. The Company is unable to reasonably estimate in which future periods these
amounts will be ultimately settled.

- 28 -

During the fiscal year ended March 31, 2012, we made contributions of $4.5 million to Company sponsored retirement savings plans. Our
contributions are partially based on employee contributions as a percentage of their salaries. Certain contributions by the Company are
discretionary and are determined by the Board of Directors each year. We expect that our contributions for the year ending March 31, 2013 will
be approximately the same as in fiscal 2012.

During the fiscal year ended March 31, 2012, we made no contributions to our U.S. defined benefit plans, due to their fully funded status at
the end of the prior year and $8.2 million to our international defined benefit plans. These contributions are based on a percentage of
pensionable wages or to satisfy funding requirements. We expect that our contributions for the fiscal year ending March 31, 2013 will be none
for our U.S. defined benefit plans and approximately $7.7 million for our international defined benefit plans.

We have an employment agreement with our Chief Executive Officer which provides for salary continuance equivalent to his most recent

base salary as a full-time employee during a two-year advisory period upon retirement from the Company.

From time to time we enter into delivery contracts with selected suppliers for certain metals used in our production processes. The delivery
contracts represent routine purchase orders for delivery within three months and payment is due upon receipt. As of March 31, 2012, we had
no material outstanding purchase commitments.

Critical Accounting Policies and Estimates

"Management's Discussion and Analysis of Financial Condition and Results of Operations" is based upon our consolidated financial
statements and the notes thereto, which have been prepared in accordance with generally accepted accounting principles in the United States.
The preparation of these financial statements requires management to make estimates, judgments and assumptions that affect the reported
amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reported periods. On an ongoing basis, management evaluates its estimates and judgments,
including those related to revenue recognition, warranties, inventories, pensions, income taxes and contingencies. Management bases its
estimates, judgments and assumptions on historical experience and on various other factors that are believed to be reasonable under the
circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily
apparent from other sources. While our estimates and assumptions are based on our knowledge of current events and actions we may
undertake in the future, there can be no assurance that actual results will not differ from these estimates and assumptions. On an ongoing basis,
we evaluate our accounting policies and disclosure practices. In management's opinion, the critical accounting policies and estimates, as defined
below, are more complex in nature and require a higher degree of judgment than the remainder of our accounting policies described in Note 1
to our consolidated financial statements elsewhere herein.

Revenue Recognition

All of our products are built to specification and tested by us for adherence to such specification before shipment to customers. We ship
products to customers based upon firm orders. Shipping and handling costs are included in cost of sales. We recognize revenue when the sales
process is complete. This occurs when products are shipped to the customer in accordance with the terms of an agreement of sale, there is a
fixed or determinable selling price, title and risk of loss have been transferred and collectability is reasonably assured. Estimates used in
determining sales allowance programs described below are subject to the volatilities of the market place. This includes, but is not limited to,
changes in economic conditions, pricing changes, product demand, inventory levels in the supply chain, the effects of technological change, and
other variables that might result in changes to our estimates. Accordingly, there can be no assurance that actual results will not differ from
those estimates.

Returns

Sales revenue and cost of sales reported in the income statement are reduced to reflect estimated returns. We record an estimated sales
allowance for returns at the time of sale based on using historical trends, current pricing and volume information, other market specific
information and input from sales, marketing and other key management. The amount accrued reflects the return of value of the customer’s
inventory. These procedures require the exercise of significant judgments. We believe that these procedures enable us to make reliable
estimates of future returns. Our actual results approximate our estimates. When the product is returned and verified, the customer is given
credit against their accounts receivable.

Distribution Programs

A portion of our sales are to independent electronic component distributors which are subject to various distributor sales programs. We
report provisions for distributor allowances in connection with such sales programs as a reduction in revenue and report distributor allowances
in the balance sheet as a reduction in accounts receivable. For the distribution programs described below, we do not track the individual units
that we record against specific products sold from distributor inventories, which would allow us to directly compare revenue reduction for

- 29 -

credits recorded during any period with credits ultimately awarded in respect of products sold during that period. Nevertheless, we believe that
we have an adequate basis to assess the reasonableness and reliability of our estimates for each program.

Distributor Stock Rotation Program

Stock rotation is a program whereby distributors are allowed to return for credit qualified inventory, semi-annually, equal to a certain
percentage, primarily limited to 5% of the previous six months net sales. We record an estimated sales allowance for stock rotation at the time
of sale based on a percentage of distributor sales using historical trends, current pricing and volume information, other market specific
information and input from sales, marketing and other key management. These procedures require the exercise of significant judgment. We
believe that these procedures enable us to make reliable estimates of future returns under the stock rotation program. Our actual results
approximate our estimates. When the product is returned and verified, the distributor is given credit against their accounts receivable.

Distributor Ship-from-Stock and Debit Program

Ship-from-Stock and Debit ("ship and debit") is a program designed to assist distributor customers in meeting competitive prices in the
marketplace on sales to their end customers. Ship and debit programs require a request from the distributor for a pricing adjustment for a
specific part for a sale to the distributor’s end customer from the distributor’s stock. Ship and debit authorizations may cover current and
future distributor activity for a specific part for sale to their customer. At the time we record sales to the distributors, we provide an allowance
for the estimated future distributor activity related to such sales since it is probable that such sales to distributors will result in ship and debit
activity. We record an estimated sales allowance based on sales during the period, credits issued to distributors, distributor inventory levels,
historical trends, market conditions, pricing trends we see in our direct sales activity with original equipment manufacturers and other
customers, and input from sales, marketing and other key management. These procedures require the exercise of significant judgment. We
believe that these procedures enable us to make reliable estimates of future credits under the ship and debit program. Our actual results
approximate our estimates. At the time the distributor ships the part from stock, the distributor debits us for the authorized pricing adjustment.

Special Incentive Programs

We may offer special incentive discounts based on amount of product ordered or shipped. At the time we record sales under these
agreements, we provide an allowance for the discounts on the sales for which the customer is eligible to take. The customer then debits us for
the authorized discount amount.

Warranty

All of our products are built to specifications and tested by us for adherence to such specifications before shipment to customers. We
warrant that our products will meet such specifications. We accrue for product warranties when it is probable that customers will make claims
under warranties relating to products that have been sold and a reasonable estimate of costs can be made. The amount accrued represents the
direct costs of replacement and other potential costs resulting from product not meeting specifications above and beyond the return value of
the customer’s affected product purchases. Historically valid warranty claims, which are a result of products not meeting specifications, have
been immaterial to our results of operations. However, there is no guarantee that warranty claims in the future will not increase, or be material
to results of operations, as a result of manufacturing defects, end market product application failures or end user recall or damage claims.

Inventories

We determine the cost of raw materials, work in process and finished goods inventories by the first-in, first-out ("FIFO") method.
Inventory costs include material, labor and manufacturing overhead. Inventories are valued at the lower of cost or market (net realizable value).
We value inventory at its market value where there is evidence that the utility of goods will be less than cost and that such write-down should
occur in the current period. Accordingly, at the end of each period, we evaluate our inventory and adjust to net realizable value the carrying
value and excess quantities. We review and adjust the carrying value of our inventories based on historical usage, customer forecasts received
from the marketing and sales personnel, customer backlog, certain date code restrictions, technology changes, demand increases and decreases,
market directional shifts, and obsolescence and aging.

Income Taxes

- 30 -

assets and liabilities that are included within our consolidated balance sheets. We assess the likelihood that our deferred tax assets will be
recoverable as a result of future taxable income and, to the extent we believe that recovery is not likely, we establish a valuation allowance.

We have recorded valuation allowances due to uncertainties related to our ability to realize some of our deferred tax assets, primarily
consisting of certain net operating losses carried forward before they expire. The valuation allowance is based on our estimates of future taxable
income over the periods that our deferred tax assets will be recoverable. We continue to evaluate countries where we have a valuation allowance
on our deferred tax assets due to historical operating losses and when such positive evidence outweighs negative evidence we will release such
valuation allowance as appropriate.

We also record a provision for certain international, federal and state tax contingencies based on the likelihood of obligation, when needed.
In the normal course of business, we are subject to challenges from U.S. and non-U.S. tax authorities regarding the amount of taxes due. These
challenges may result in adjustments of the timing or amount of taxable income or deductions or the allocation of income among tax
jurisdictions. Further, during the ordinary course of business, other changing facts and circumstances may impact our ability to utilize tax
benefits as well as the estimated taxes to be paid in future periods. We believe that any potential tax exposures have been sufficiently provided
for in the consolidated financial statements. In the event that actual results differ from these estimates, we may need to adjust tax accounts and
related payments, which could materially impact our financial condition and results of operations.

We account for uncertainty in income taxes recognized in our financial statements. We recognize in our financial statements, the impact of
a tax position, if that position would “more likely than not” be sustained on audit, based on the technical merits of the position. Accruals for
estimated interest and penalties are recorded as a component of interest expense.

We record deferred tax liabilities for temporary differences associated with deductions for foreign branch losses claimed by us in our U.S.
income tax returns, as these deductions are subject to recapture provisions in the U.S. income tax code. When the recapture period expires for
these deductions, the liabilities are removed and the tax benefit is recognized in the income tax provision.

Pension Assumptions

Pension benefit obligations and the related effects on operations are calculated using actuarial models. Two critical assumptions, discount
rate and expected rate of return on plan assets, are important elements of plan expense and/or liability measurement. We evaluate these
assumptions at least annually. The discount rate enables us to state expected future cash flows at a present value on the measurement date. To
determine the discount rate, we apply the expected cash flows from each individual pension plan to specific yield curves at the plan’s
measurement date and determine a level equivalent yield that may be unique to each plan. A lower discount rate increases the present value of
benefit obligations and increases pension expense. To determine the expected long-term rate of return on pension plan assets, we consider the
current and expected asset allocations, as well as historical and expected returns on various categories of plan assets. Other assumptions involve
demographic factors such as retirement, mortality and turnover. These assumptions are evaluated periodically and are updated to reflect our
experience. Actual results in any given year will often differ from actuarial assumptions because of economic and other factors. In such cases,
the differences between actual results and actuarial assumptions are amortized over future periods.

Environmental Matters

We are subject to federal, state and local laws and regulations concerning the environment in the United States and to the environmental
laws and regulations of the other countries in which we operate. Based on our periodic review of the operating policies and practices at all of
our facilities, we believe that our operations are currently in substantial compliance, in all material respects, with all applicable environmental
laws and regulations. Regarding sites identified by the EPA at which remediation is required, our ultimate liability in connection with
environmental claims will depend on many factors, including our volumetric share of non-environmentally safe waste, the total cost of
remediation and the financial viability of other companies having liability. Additionally, we operate on sites that may have potential future
environmental issues as a result of activities at sites during the long history of manufacturing operations by AVX or its corporate predecessor or
prior to the start of operations by AVX. Even though we may have rights of indemnity for such environmental matters at certain sites,
regulatory agencies in those jurisdictions may require us to address such issues. We recognize liabilities for environmental exposures when
analysis indicates that is both probable that a liability has been incurred and the amount of loss can be reasonably estimated. When a range of
loss can be estimated, we accrue the most likely amount. In the event that no amount in the range of probable loss is considered most likely,
the minimum loss in the range is accrued. Amounts recorded are reviewed periodically and adjusted to reflect additional legal and technical
information that becomes available. The uncertainties about the status of laws, regulations, regulatory actions, technology and information
related to individual sites make it difficult to develop an estimate of the reasonably possible aggregate environmental remediation exposure,
therefore these costs could differ from our current estimates. Our environmental reserves are not discounted and do not reflect any possible
future insurance recoveries, which are not expected to be significant, but do reflect a reasonable estimate of cost sharing at multiple party sites
or indemnification of our liability by a third party.

- 31 -

Recent Accounting Pronouncements

In January 2010, the Financial Accounting Standards Board (“FASB”) updated the accounting guidance related to fair value measurements
disclosures. The updated guidance (i) requires separate disclosure of significant transfers out of Levels 1 and 2 fair value measurements, (ii)
requires disclosure of Level 3 fair value measurements activity on a gross basis, (iii) clarifies existing disaggregation requirements, and (iv)
clarifies existing input and valuation technique disclosure requirements. The updated guidance is effective for interim and annual reporting
periods beginning after December 15, 2009, except for the Level 3 fair value measurement disclosure requirements, which are effective for fiscal
years beginning after December 15, 2010. As of April 1, 2011, we have adopted all aspects of the guidance which has had no effect on our
financial position, results of operations, or cash flows and the adoption of the remaining guidance is not expected to have any effect on our
financial position, results of operations, or cash flows.

In June 2011, the FASB issued amendments to existing standards for reporting comprehensive income. Accounting Standards Update
(ASU) 2011-05 rescinds the requirement to present a Consolidated Statement of Changes in Shareholders’ Equity and introduces a new
statement, the Consolidated Statement of Comprehensive Income. The new statement begins with net income and adds or deducts other
recognized changes in assets and liabilities that are not included in net earnings under GAAP. The amendments are effective for our first quarter
of fiscal year 2013 financial statements. The amendments affect only the display of those components of equity categorized as other
comprehensive income and do not change existing recognition and measurement requirements that determine net earnings.

In September 2011, the FASB issued an ASU which intended to reduce complexity and costs by allowing an entity the option to make a
qualitative evaluation about the likelihood of goodwill impairment to determine whether it should calculate the fair value of a reporting unit.
The ASU also expands upon the examples of events and circumstances that an entity should consider between annual impairment tests in
determining whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. The ASU is effective for
fiscal years beginning after December 15, 2011, with early adoption permitted. We currently believe there will be no material impact on our
consolidated financial statements upon adoption.

In December 2011, the FASB issued ASU 2011-12, which effectively defers the changes in ASU 2011-05 that relate to the presentation of
reclassification out of accumulated other comprehensive income. All other requirements of ASU 2011-05 are not affected by this update. We
are required to adopt the provision of this ASU in the first quarter of fiscal year 2013. We do not believe the adoption will have a material
impact on our Consolidated Financial Statements.

Relationship with Kyocera and Related Transactions

Kyocera is the majority stockholder of AVX. As of May 4, 2012, Kyocera owned beneficially and of record 121,800,000 shares of common

stock, representing approximately 72% of our outstanding shares.

From January 1990 through August 15, 1995, AVX was wholly owned by Kyocera. On August 15, 1995, Kyocera sold 22.9%, or
39,300,000 shares of AVX's common stock, and AVX sold an additional 4,400,000 shares of common stock, in a public offering. In February
2000, Kyocera sold an additional 10,500,000 shares of its AVX common stock.

Our business includes transactions with Kyocera. Such transactions involve the purchase of resale inventories, raw materials, supplies, and
equipment, the sale of products for resale, raw materials, supplies and equipment, the payment of dividends, subcontracting activities and
commissions. See Note 13 to our consolidated financial statements elsewhere herein for more information on the related party transactions.

One principal strategic advantage for AVX is our ability to produce a broad product offering to our customers. The inclusion of products
manufactured by Kyocera in that product offering is a significant component of this advantage. In addition, the exchange of information with
Kyocera relating to the development and manufacture of multi-layer ceramic capacitors and various other ceramic products benefits AVX. An
adverse change in our relationship with Kyocera could have a negative impact on our results of operations. AVX and Kyocera have executed
several agreements which govern the foregoing transactions and which are described below.

The Special Advisory Committee of our Board, comprised of our independent directors (currently Messrs. Stach, DeCenzo, and
Christiansen), reviews and approves any significant agreements between AVX and Kyocera and any significant transactions between AVX and
Kyocera not covered by such agreements. The committee is also responsible for reviewing and approving any agreements and transactions
between AVX and any other related party that are or may be within the scope of applicable rules, regulations and guidance of the New York
Stock Exchange and Item 404 of Regulation S-K, if they arise. The Special Advisory Committee operates under a written charter which sets
forth the policies and procedures for such approvals. In approving any such agreement or transaction pursuant to those procedures, the Special
Advisory Committee must determine that, in its judgment, the terms thereof are equivalent to those to which an independent unrelated party
would agree at arm’s-length or are otherwise in the best interests of the Company and its stockholders generally. Each of the agreements
described below contains provisions requiring that the terms of any transaction under such agreement be equivalent to those to which an
independent unrelated party would agree at arm's-length.

- 32 -

Products Supply and Distribution Agreement. Pursuant to the Products Supply and Distribution Agreement (the "Distribution Agreement") (i)
AVX will act as the non-exclusive distributor of certain Kyocera-manufactured products to certain customers in certain territories outside of
Japan and (ii) Kyocera will act as the non-exclusive distributor of certain AVX-manufactured products within Japan. The Distribution
Agreement has a term of one year, with automatic one-year renewals, subject to the right of termination by either party at the end of the then
current term upon at least three months prior written notice.

Disclosure and Option to License Agreement. Pursuant to the Disclosure and Option to License Agreement (the "License Agreement"), AVX and
Kyocera exchange confidential information relating to the development and manufacture of multi-layered ceramic capacitors and various other
ceramic products, as well as the license of technologies in certain circumstances. The License Agreement has a term of one year with automatic
one-year renewals, subject to the right of termination by either party at the end of the then current term upon at least six months prior written
notice.

Materials Supply Agreement. Pursuant to the Materials Supply Agreement (the "Supply Agreement"), AVX and Kyocera will from time to time
supply the other party with certain raw and semi-processed materials used in the manufacture of capacitors and other electronic components.
The Supply Agreement has a term of one year, with automatic one-year renewals, subject to the right of termination by either party at the end of
the then current term upon at least six months prior written notice.

Machinery and Equipment Purchase Agreement. Pursuant to the Machinery and Equipment Purchase Agreement (the "Machinery Purchase
Agreement"), AVX and Kyocera will, from time to time, design and manufacture for the other party certain equipment and machinery of a
proprietary and confidential nature used in the manufacture of capacitors and other electronic components. The Machinery Purchase
Agreement has a term of one year, with automatic one-year renewals, subject to the right of termination by either party at the end of the then
current term upon at least six months prior written notice.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Foreign Currency

We are exposed to foreign currency exchange risk with respect to our sales, profits and assets and liabilities denominated in currencies other
than the U.S. dollar. Although we use financial instruments to hedge certain foreign currency risks, we are not fully protected against foreign
currency fluctuations and our reported results of operations could be affected by changes in foreign currency exchange rates. International
revenues and expenses transacted by our foreign subsidiaries may be denominated in local currency. See Note 12 to the consolidated financial
statements elsewhere herein for further discussion of derivative financial instruments.

For fiscal 2012, our exposure to foreign currency exchange risk was estimated using a sensitivity analysis, which illustrates a hypothetical
change in the average foreign currency exchange rates used during the year. Actual changes in foreign currency exchange rates may differ from
this hypothetical change. Based on a hypothetical increase or decrease of 10% in the exchange rates, assuming no hedging against foreign
currency rate changes, we would have incurred a foreign currency gain or loss of approximately $17.5 million in fiscal 2012.

Materials

We are at risk to fluctuations in prices for commodities used to manufacture our products, primarily tantalum, palladium, platinum, silver,

nickel, gold and copper. Prices for many of these metals have fluctuated significantly during the past year.

Tantalum powder and wire are principal materials used in the manufacture of tantalum capacitor products. These materials may be
purchased under contracts with suppliers from various parts of the world at prices that are subject to periodic adjustment and variations in the
market. The tantalum required to manufacture our products has generally been available in sufficient quantity. The limited number of tantalum
material suppliers has led to higher prices during periods of increased demand.

Item 8. Financial Statements and Supplementary Data

The following consolidated financial statements of the Company and its subsidiaries, together with the Report of Independent

Registered Public Accounting Firm thereon, are presented beginning on page 38 of this report:

Consolidated Balance Sheets, March 31, 2011 and 2012
Consolidated Statements of Operations, Years Ended March 31, 2010, 2011 and 2012
Consolidated Statements of Stockholders' Equity, Years Ended March 31, 2010, 2011 and 2012
Consolidated Statements of Cash Flows, Years Ended March 31, 2010, 2011 and 2012
Notes to Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm

Page
38
39
40
41
42
69

- 33 -

All financial statement schedules are omitted because of the absence of the conditions under which they are required or because the

information required is shown in the consolidated financial statements or notes thereto.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act
of 1934, as amended (“the Exchange Act”)), that are designed to ensure that information required to be disclosed in the Company’s reports
under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and
that such information is accumulated and communicated to management, including the Company’s Chief Executive Officer (“CEO”) and Chief
Financial Officer (“CFO”), as appropriate, to allow timely decisions regarding required disclosure.

In connection with the preparation of this Annual Report on Form 10-K, as of March 31, 2012, an evaluation was performed under the
supervision and with the participation of the Company’s management, including the CEO and CFO, of the effectiveness of the Company’s
disclosure controls and procedures. Based on the evaluation, the Company’s CEO and CFO concluded that the Company’s disclosure controls
and procedures were effective as of March 31, 2012 to ensure that information required to be disclosed by the Company in the reports that it
files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules
and forms and is accumulated and communicated to the Company’s management, including the CEO and CFO, or persons performing similar
functions, as appropriate to allow timely decisions regarding required disclosures.

Management’s Report on Internal Control over Financial Reporting

The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting.
Internal control over financial reporting is defined in Rules 13a-15(f) and 15d-15(f) promulgated under the Exchange Act as a process designed
by, or under the supervision of, the Company’s principal executive and principal financial officers and effected by the Company’s Board of
Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and
procedures that (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions
of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only
in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or
timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial
statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of
any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions,
or that the degree of compliance with the policies or procedures may deteriorate.

The Company’s management assessed the effectiveness of the Company’s internal control over financial reporting as of March 31, 2012. In
making its assessment, the Company’s management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway
Commission in Internal Control-Integrated Framework. Based on the results of this assessment, management, including the CEO and CFO, has
concluded that the Company’s internal control over financial reporting was effective as of the end of its fiscal year ended March 31, 2012.

PricewaterhouseCoopers LLP, our independent registered public accounting firm, has issued an attestation report on the Company’s

internal control over financial reporting as of March 31, 2012, as stated in their report which appears in this Form 10-K.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during our most recently completed fiscal

quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information

None

- 34 -

Item 10. Directors, Executive Officers and Corporate Governance

PART III

Information required by this item with respect to our directors, the committees of the Board of Directors, corporate governance and
compliance by our directors, executive officers and certain beneficial owners of our common stock with Section 16(a) of the Exchange
Act is provided by incorporation by reference to information under the captions entitled "Proposal I Election of Directors", "Board of
Directors – Governance", "Board of Directors – Meetings Held and Committees" and "Section 16(a) Beneficial Ownership Reporting
Compliance" in the Company's definitive proxy statement for the 2012 Annual Meeting of Stockholders (the "Proxy Statement") and
perhaps elsewhere therein. Information required by this item relating to our executive officers also appears in Item 1 of Part I of this
Form 10-K under the caption "Executive Officers of the Registrant".

Code of Business Conduct and Ethics

As discussed above in “Company Information and Website” in Item 1 of Part I of this Annual Report on Form 10-K, our Code of
Business Conduct and Ethics and the Code of Business Conduct and Ethic Supplement Applicable to the Chief Executive Officer, Chief
Financial Officer, Controllers and Financial Managers have been posted on our website. We will post on our website any amendments to,
or waivers from, a provision of the Code of Business Conduct and Ethics or the Supplement Applicable to the Chief Executive Officer,
Chief Financial Officer, Controllers and Financial Managers that applies to our principal executive officer, principal financial officer,
principal accounting officer or controller or persons performing similar functions, and that relates to any of the following: (i) honest and
ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;
(ii) full, fair, accurate, timely, and understandable disclosure in reports and documents that we file with, or submit to, the SEC and in
other public communications made by us; (iii) compliance with applicable governmental laws, rules and regulations; (iv) the prompt
internal reporting of violations of the code to an appropriate person or persons identified in the code; or (v) accountability for adherence
to the code.

Item 11. Executive Compensation

The information required by this item is provided by incorporation by reference to information under the captions entitled “Director
Compensation”, “Compensation Committee Interlocks and Insider Participation”, “Compensation Committee and Equity Compensation
Committee Report”, “Compensation Discussion and Analysis”, and “Executive Compensation” in the Proxy Statement and perhaps
elsewhere therein.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related

Stockholder Matters

The information required by this item is provided by incorporation by reference to information under the captions entitled
"Ownership of Securities by Directors, Director Nominees and Executive Officers", "Security Ownership of Certain Beneficial Owners"
and "Equity Compensation Plan Information" in the Proxy Statement and perhaps elsewhere therein.

Item 13. Certain Relationships and Related Transactions, and Director Independence

The information required by this item is provided by incorporation by reference to information under the caption "Relationship with

Kyocera and Related Transactions" and “Board of Directors – Governance” in the Proxy Statement and perhaps elsewhere therein.

Item 14. Principal Accounting Fees and Services

The information required by this item is provided by incorporation by reference to information under the caption entitled "Report of
the Audit Committee – Principal Independent Registered Public Accounting Firm Fees" in the Proxy Statement and perhaps elsewhere
therein.

- 35 -

PART IV

Item 15. Exhibits and Financial Statement Schedules

(a) Financial Statements and Financial Statement Schedules - See Index to Consolidated Financial

Statements at Item 8 of this report.

(b) Exhibits:

As indicated below, certain of the exhibits to this report are hereby incorporated by reference from other documents on
file with the Securities and Exchange Commission with which they are filed.

3.1 Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to Registration Statement on Form S-1

(File No. 33-94310) of the Company (the "Form S-1")).

3.2 By-laws of AVX Corporation as Amended and Restated May 7, 2012 (incorporated by reference to Exhibit 3.2 of the

Current Report on Form 8-K filed with the Securities and Exchange Commission on May 11, 2012).

*10.1 Amended AVX Corporation 1995 Stock Option Plan as amended through October 24, 2000 (incorporated by reference

to Exhibit 10.11 to the Quarterly Report on Form 10-Q of the Company for the quarter ended December 31, 2000).

*10.2 Amended Non-Employee Directors' Stock Option Plan as amended through February 4, 2003 (incorporated by reference
to Exhibit 10.1 to the Quarterly Report on Form 10-Q of the Company for the quarter ended December 31, 2002).

10.3 Products Supply and Distribution Agreement by and between Kyocera Corporation and AVX Corporation (incorporated

by reference to Exhibit 10.4 to the Annual Report on Form 10-K of the Company for the year ended March 31, 2000).

*10.4 AVX Nonqualified Supplemental Retirement Plan Amended and Restated effective January 1, 2008 (the AVX

Corporation SERP was merged into this plan effective January 1, 2005) (incorporated by reference to Exhibit 10.4 to the
Annual Report on Form10-K of the Company for the year ended March 31, 2009).

*10.5 Employment Agreement between AVX Corporation and John S. Gilbertson dated December 19, 2008 (incorporated by
reference to Exhibit 10.10 to the Quarterly Report on Form 10-Q of the Company for the quarter ended December 31,
2008).

*10.6 AVX Corporation 2004 Stock Option Plan as amended through July 23, 2008 (incorporated by reference to Exhibit

10.11 to the Annual Report on Form 10-K of the Company for the year ended March 31, 2004).

*10.7 AVX Corporation 2004 Non-Employee Directors' Stock Option Plan as amended through July 28, 2008 (incorporated
by reference to Exhibit 10.12 to the Annual Report on Form 10-K of the Company for the year ended March 31, 2004).

*10.8 Form of Notice of Grant of Stock Options and Option Agreement for awards pursuant to AVX Corporation 2004 Stock

Option Plan and AVX Corporation 2004 Non-Employee Directors’ Stock Option Plan (incorporated by reference to
Exhibit 10.1 to the Quarterly Report on Form 10-Q of the Company for the quarterly period ended June 30, 2005).

*10.9 AVX Corporation Management Incentive Plan (incorporated by reference to Exhibit 10.1 to the Quarterly Report on

Form 10-Q of the Company for the quarter ended June 30, 2009).

10.10 Machinery and Equipment Purchase Agreement by and between Kyocera Corporation and AVX Corporation

(incorporated by reference to Exhibit 10.14 to the Annual Report on Form 10-K of the Company for the year ended
March 31, 2005).

10.11 Materials Supply Agreement by and between Kyocera Corporation and AVX Corporation (incorporated by reference to

Exhibit 10.15 to the Annual Report on Form 10-K of the Company for the year ended March 31, 2005).

10.12 Agreement and Plan of Merger, dated as of June 15, 2007, by and among AVX Corporation, Admiral Byrd Acquisition
Sub, Inc. and American Technical Ceramics Corp. (incorporated by reference to Exhibit 2 to the Schedule 13D filed by
the Company with the Securities and Exchange Commission on June 25, 2007).

10.13

Disclosure and Option to License Agreement effective as of April 1, 2008 by and between Kyocera Corporation and
AVX Corporation. (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of the Company filed
with the Securities and Exchange Commission on March 25, 2008).

10.14 Form of Relocation Agreement (incorporated by reference to Exhibit 10.15 to the Annual Report on Form 10-K of the

Company for the year ended March 31, 2010).

- 36 -

10.15 Form of Director and Officer Indemnification (incorporated by reference to Exhibit 10.16 to the Annual Report on

Form 10-K of the Company for year ended March 31, 2010).

21.1 Subsidiaries of the Registrant.

23.1 Consent of PricewaterhouseCoopers LLP.

24.1 Power of Attorney.

31.1 Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer – John S. Gilbertson

31.2 Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer – Kurt P. Cummings

32.1 Certification Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

- John S. Gilbertson and Kurt P. Cummings

* Agreement relates to executive compensation.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report

to be signed on its behalf by the undersigned, thereunto duly authorized.

AVX Corporation

by: /s/ Kurt P. Cummings
KURT P. CUMMINGS
Vice President, Chief Financial Officer, Treasurer and
Secretary
Dated: May 25, 2012

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on

behalf of the registrant and in the capacities and on the dates indicated.

Signature

*
Kazuo Inamori
*

John S. Gilbertson

Donald B. Christiansen

*
Kensuke Itoh
*

Makoto Kawamura

Rodney N. Lanthorne

*
Joseph Stach
*

David DeCenzo

*
Tetsuo Kuba
*

Tatsumi Maeda

Title

Chairman Emeritus of the Board

Chairman of the Board, Chief Executive Officer and
President

Director

Date

May 25, 2012

* by: /s/ Kurt P. Cummings
KURT P. CUMMINGS, Attorney-in-Fact for each of the persons indicated

- 37 -

AVX Corporation and Subsidiaries
Consolidated Balance Sheets
(in thousands, except per share data)

Assets
Current assets:

Cash and cash equivalents
Short-term investments in securities
Available-for-sale securities
Accounts receivable - trade, net
Accounts receivable - affiliates
Inventories
Income taxes receivable
Deferred income taxes
Prepaid and other

Total current assets

Long-term investments in securities
Long-term available-for-sale securities
Property and equipment:

Land
Buildings and improvements
Machinery and equipment
Construction in progress

Accumulated depreciation

Goodwill
Intangible assets, net
Deferred income taxes - non-current
Other assets

Total Assets

Liabilities and Stockholders' Equity

Current liabilities:

Accounts payable - trade
Accounts payable - affiliates
Income taxes payable
Deferred income taxes
Accrued payroll and benefits
Accrued expenses

Total current liabilities

Pensions
Deferred income taxes - non-current
Other liabilities

Total non-current liabilities

Total Liabilities

Commitments and contingencies (Note 11)

Stockholders' Equity:

Preferred stock, par value $.01 per share:

Authorized, 20,000 shares; None issued and outstanding

Common stock, par value $.01 per share:

Authorized, 300,000 shares; issued, 176,368 shares; outstanding, 170,142

and 169,601 shares for 2011 and 2012, respectively

Additional paid-in capital
Retained earnings
Accumulated other comprehensive income
Treasury stock, at cost,

6,227 and 6,768 shares for 2011 and 2012, respectively

Total Stockholders' Equity

Total Liabilities and Stockholders' Equity

March 31,

2011

2012

379,350
398,914
2,747
227,642
6,141
496,495

-
39,355
51,471
1,602,115
220,835
4,490

29,241
313,581
1,105,983
13,897
1,462,702
(1,227,043)
235,659
162,532
82,612
1,651
9,588
2,319,482

46,255
86,378
10,452
-
43,221
49,359
235,665
18,028
-
26,372
44,400
280,065

395,284
418,133
-
206,170
1,883
566,117
14,988
85,787
38,783
1,727,145
238,112
-

34,290
311,038
1,081,098
23,555
1,449,981
(1,213,493)
236,488
162,707
78,221
14,493
10,846
2,468,012

43,719
60,078
13,815
547
38,333
140,581
297,073
22,337
2,270
25,579
50,186
347,259

1,764

347,664
1,729,507
41,174

349,474
1,838,140
19,363

(80,692)

(87,988)

2,039,417
2,319,482

2,120,753
2,468,012

See accompanying notes to consolidated financial statements.

- 38 -

AVX Corporation and Subsidiaries
Consolidated Statements of Operations
(in thousands, except per share data)

Years Ended March 31,

2010

2011

2012

Net sales

Cost of sales

Vendor settlement

Restructuring charges

Gross profit

Selling, general and administrative expenses

Environmental charges

Restructuring charges

Other operating income

Profit from operations

Other income (expense):

Interest income

Interest expense

Other, net

Income before income taxes

Provision for income taxes

Net income

Income per share:

Basic

Diluted

Dividends declared

Weighted average common shares outstanding:

Basic

Diluted

1,304,966

1,653,176

1,545,254

1,027,368

1,195,790

1,153,295

(5,000)

4,397

278,201

108,527

2,509

(3,519)

457,386

123,887

8,575

391,959

116,408

100,000

170,684

324,924

175,551

7,120

(111)

(1,336)

176,357

33,499

6,569

2,766

334,259

90,256

6,798

(707)

(1,737)

179,905

27,100

142,858

244,003

152,805

0.84

0.165

1.44

1.43

0.190

0.90

0.280

170,247

170,274

170,025

170,390

169,886

170,134

See accompanying notes to consolidated financial statements.

- 39 -

Balance, March 31, 2009

Net income
Other comprehensive

income, net of income taxes

Dividends of $0.16

per share
Stock-based

compensation expense

Stock option activity
Tax benefit of stock
option exercises

Treasury stock purchased
Balance, March 31, 2010

Net income
Other comprehensive

loss, net of income taxes

Dividends of $0.19

per share
Stock-based

compensation expense

Stock option activity
Tax benefit of stock
option exercises

Treasury stock purchased
Balance, March 31, 2011

Net income
Other comprehensive

income, net of income taxes

Dividends of $0.26

per share
Stock-based

compensation expense

Stock option activity
Tax benefit of stock
option exercises

Treasury stock purchased
Balance, March 31, 2012

AVX Corporation and Subsidiaries
Consolidated Statements of Stockholders' Equity
(in thousands, except per share data)

Common Stock

Number
Of Shares Amount
$1,764
170,384

Treasury
Stock
(77,552)

Additional
Paid-In
Capital
$343,275

Retained
Earnings
$1,402,202

Accumulated
Other
Comprehensive
Income
$

Total
$1,669,753

Comprehensive
Income
(126,440)

-
12

-
-

-
151

2,040
(18)

-
(322)
170,074

-
-
$1,764

-
(3,736)
(81,137)

-
$345,305

142,858

17,193

(27,242)

-
-

$1,517,818

-
-

(27,242)

2,040
133

-
-
17,257

8
(3,736)
$1,801,007

160,051

244,003

23,917

-
6,638

2,475
(632)

-
-

(32,314)

-
-

(32,314)

2,475
6,006

-
(445)
170,142

-
-
1,764

-
(6,193)
(80,692)

516
-
347,664

-
-
1,729,507

-
-
41,174

516
(6,193)
2,039,417

267,920

-
513

-
-

-
84

-
-

152,805

(21,811)

-
1,098

1,816
(101)

-
-

(44,172)

-
-

(44,172)

1,816
997

-
(625)
169,601

-
-
1,764

-
(8,394)
(87,988)

95
-
349,474

-
-
1,838,140

-
-
19,363

95
(8,394)
2,120,753

130,994

See accompanying notes to consolidated financial statements.

- 40 -

AVX Corporation and Subsidiaries
Consolidated Statements of Cash Flows

(in thousands)

Years Ended March 31,

Operating Activities:
Net income
Adjustment to reconcile net income to net cash from operating activities:

Depreciation and amortization
Stock-based compensation expense
Deferred income taxes
(Gain) Loss on available-for-sale securities
(Gain) Loss on sale of property, plant & equipment, net of retirements

Changes in operating assets and liabilities:

Accounts receivable
Inventories
Accounts payable and accrued expenses
Income taxes
Other assets
Other liabilities

Net cash provided by operating activities

Investing Activities:

Purchases of property and equipment
Sales of available-for-sale securities
Purchases of investment securities
Redemptions of investment securities
Proceeds from property, plant & equipment dispositions
Contingent consideration for a prior acquisition
Other investing activities

Net cash (used in) investing activities

Financing Activities:

Dividends paid
Purchase of treasury stock
Proceeds from exercise of stock options
Excess tax benefit from stock-based payment arrangements
Other financing activities

Net cash (used in) financing activities

Effect of exchange rate on cash

Increase (Decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

2010

2011

2012

142,858

244,003

152,805

58,173
2,040
(8,419)
362
(2,546)

(47,462)
14,788
25,868
16,390
(10,156)
8,558
200,454

(28,888)
29,006
(943,231)
659,523
6,050
(63)
(870)
(278,473)

(27,242)
(3,736)
133
8
1,732
(29,105)

389

(106,735)
522,709
415,974

47,619
2,475
8,492
55
594

(37,792)
(135,223)
41,640
3,220
(10,108)
(12,880)
152,095

(27,470)
8,374
(923,482)
785,337
7

-
(120)
(157,354)

(32,314)
(6,193)
6,006
516
-
(31,985)

620

(36,624)
415,974
379,350

46,890
1,816
(56,456)
572
648

25,730
(74,007)
55,232
2,759
(7,757)
190
148,422

(49,201)
5,686
(1,162,317)
1,125,616

-
-
(127)
(80,343)

(44,172)
(8,394)
997
95
-
(51,474)

(671)

15,934
379,350
395,284

See accompanying notes to consolidated financial statements.

- 41 -

AVX Corporation and Subsidiaries
Notes to Consolidated Financial Statements
(in thousands, except per share data)

1. Summary of Significant Accounting Policies:

General:

AVX Corporation is a leading worldwide manufacturer and supplier of a broad line of passive electronic components and interconnect
products. Our consolidated financial statements of AVX Corporation include all accounts and subsidiaries. All significant intercompany
transactions and accounts have been eliminated.

From January 1990 through August 15, 1995, we were wholly owned by Kyocera Corporation ("Kyocera"). As of March 31, 2012, Kyocera

owned approximately 72% of our outstanding shares of common stock.

Use of Estimates:

The consolidated financial statements are prepared on the basis of generally accepted accounting principles. The preparation of these
financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities and the disclosure of
contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported
periods. We base our estimates and judgments on historical experience and on various other factors that are believed to be reasonable under
the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily
apparent from other sources. There can be no assurance that actual results will not differ from those estimates. On an ongoing basis, we
evaluate our accounting policies and disclosure practices.

Cash Equivalents and Investments in Securities:

We consider all highly liquid investments purchased with an original maturity of three months (90 days) or less to be cash equivalents.

Our short-term and long-term investment securities are accounted for as held-to-maturity securities and are carried at amortized cost. We
have the ability and intent to hold these investments until maturity. All income generated from the held-to-maturity securities investments are
recorded as interest income.

Available-for-sale securities are classified as either current or long-term investments based on their underlying expected cash flows and are
recorded at fair market value. Any unrealized holding gains and losses resulting from these securities are reported, net of tax, as a separate
component of shareholders' equity until realized. Realized gains and losses and declines in value judged to be other than temporary, if any, are
included in our results of operations.

Inventories:

We determine the cost of raw materials, work in process and finished goods inventories by the first-in, first-out ("FIFO") method.
Inventory costs include material, labor and manufacturing overhead. Inventories are valued at the lower of cost or market (realizable value) and
are valued at market value where there is evidence that the utility of goods will be less than cost and that such write-down should occur in the
current period. Accordingly, at the end of each period, we evaluate our inventory and adjust to net realizable value. We review and adjust the
carrying value of our inventories based on historical usage, customer forecasts received from the marketing and sales personnel, customer
backlog, certain date code restrictions, technology changes, demand increases and decreases, market directional shifts, and obsolescence and
aging.

Property and Equipment:

Property and equipment are recorded at cost. Machinery and equipment are generally depreciated on the double-declining balance method.
Buildings are depreciated on the straight-line method. The estimated useful lives used for computing depreciation are as follows: buildings and
improvements – 10 to 31.5 years, and machinery and equipment – 3 to 10 years. Depreciation expense was $53,798, $43,220 and $42,499 for
the fiscal years ended March 31, 2010, 2011 and 2012, respectively.

We review long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of any such
assets may not be recoverable. If the sum of the undiscounted cash flows is less than the carrying value of the related assets, we recognize an
impairment loss, measured as the amount by which the carrying value exceeds the fair value of the assets.

- 42 -

The cost of maintenance and repairs is charged to expense as incurred. Upon disposal or retirement, the cost and accumulated depreciation

of assets are eliminated from the respective accounts. Any gain or loss is reflected in our results of operations.

Goodwill and Acquired Intangible Assets:

We do not amortize goodwill and indefinite-lived intangible assets, but test these assets for impairment at least annually or whenever
conditions indicate that such impairment could exist. The carrying value of goodwill and indefinite-lived intangible assets are evaluated in
relation to the operating performance and estimated future discounted cash flows of the related reporting unit. If the sum of the discounted
cash flows (excluding interest) is less than the carrying value of the related assets, we recognize an impairment loss, measured as the amount by
which the carrying value exceeds the fair value of the assets. The estimate of cash flow is based upon, among other things, certain assumptions
about expected future operating performance. Our annual goodwill and indefinite-lived intangible assets impairment analysis indicated that
there was no related impairment for the fiscal years ended March 31, 2010, 2011 or 2012.

We have determined that certain intangible assets have finite useful lives. These assets are being amortized on a straight-line basis over their
estimated useful lives. Amortization expense was $4,375, 4,399 and $4,391 for the fiscal years ended March 31, 2010, 2011 and 2012,
respectively.

March 31, 2011

March 31, 2012

Gross Carrying
Amount

Accumulated
Amortization

Gross Carrying
Amount

Accumulated
Amortization

Amortized intangible assets
Customer relationships
Developed technology and other

Total

51,000
12,848
63,848

(9,917)
(5,319)
(15,236)

51,000
12,848
63,848

(12,750)
(6,877)
(19,627)

The estimated amortization expense for the next five years is $4,391, $4,183, $3,653, $3,332 and $3,332 for the fiscal years ended

March 31, 2013, 2014, 2015, 2016 and 2017, respectively.

Gross Carrying Amount

March 31, 2011

March 31, 2012

$
$

34,000
34,000

$
$

34,000
34,000

Unamortized intangible assets

Trade name and trademarks

Total

Pension Assumptions:

Pension benefit obligations and the related effects on operations are calculated using actuarial models. Two critical assumptions, discount
rate and expected rate of return on plan assets, are important elements of plan expense and/or liability measurement. We evaluate these
assumptions at least annually. The discount rate enables us to state expected future cash flows at a present value on the measurement date. To
determine the discount rate, we apply the expected cash flows from each individual pension plan to specific yield curves at the plan’s
measurement date and determine a level equivalent yield unique to each plan. A lower discount rate increases the present value of benefit
obligations and increases pension expense. To determine the expected long-term rate of return on pension plan assets, we consider the current
and expected asset allocations, as well as historical and expected returns on various categories of plan assets. Other assumptions involve
demographic factors such as retirement, mortality and turnover. These assumptions are evaluated at least annually and are updated to reflect
our experience. Actual results in any given year will often differ from actuarial assumptions because of economic and other factors. In such
cases, the differences between actual results and actuarial assumptions are amortized over future periods.

Income Taxes:

As part of the process of preparing the consolidated financial statements, we are required to estimate tax assets and liabilities in each of the
jurisdictions in which we operate. This process involves estimating the actual current tax exposure together with assessing temporary
differences resulting from different treatment of items for tax and accounting purposes. These differences result in deferred tax assets and
liabilities that are included within the consolidated balance sheets. We assess the likelihood that deferred tax assets will be recoverable as a result
of future taxable income and, to the extent management believes that recovery is not likely, we establish a valuation allowance.

- 43 -

We also record a provision for certain international, federal and state tax contingencies based on the likelihood of obligation, when needed.
In the normal course of business, we are subject to challenges from U.S. and non-U.S. tax authorities regarding the amount of taxes due. These
challenges may result in adjustments of the timing or amount of taxable income or deductions or the allocation of income among tax
jurisdictions. Further, during the ordinary course of business, other changing facts and circumstances may impact our ability to utilize tax
benefits as well as the estimated taxes to be paid in future periods. We believe that any potential tax exposures have been sufficiently provided
for in the consolidated financial statements. In the event that actual results differ from these estimates, we may need to adjust tax accounts and
related payments, which could materially impact our financial condition and results of operations.

We record deferred tax liabilities for temporary differences associated with deductions for foreign branch losses claimed by us in our
U.S. income tax returns, as these deductions are subject to recapture provisions in the U.S. income tax code. When the recapture period
expires for these deductions, the tax benefit is recognized in the income tax provision.

Foreign Currency Activity:

Assets and liabilities of foreign subsidiaries, where functional currencies are their local currencies, are translated into U.S. dollars at the
exchange rate in effect at the balance sheet date. Operating accounts are translated at an average rate of exchange for the respective accounting
periods. Translation adjustments result from the process of translating foreign currency financial statements into U.S. dollars and are reported
separately as a component of accumulated other comprehensive income. Transaction gains and losses reflected in the functional currencies are
charged to income at the time of the transaction.

Derivative Financial Instruments:

Derivative instruments are reported on the consolidated balance sheets at their fair values. The accounting for changes in fair value
depends upon the purpose of the derivative instrument and whether it is designated and qualifies for hedge accounting. For instruments
designated as hedges, unrealized gains or losses are reported in other comprehensive income and when realized, are reported in our results of
operations. Any contracts that do not qualify as hedges, for accounting purposes, are marked to market with the resulting gains and losses
recognized in other income or expense.

We use financial instruments such as forward exchange contracts to hedge a portion, but not all, of our firm commitments denominated in
foreign currencies. The purpose of our foreign currency management is to minimize the effect of exchange rate changes on actual cash flows
from foreign currency denominated transactions. See Note 12 for further discussion of derivative financial instruments.

Revenue Recognition and Accounts Receivable:

All products are built to specification and tested by AVX for adherence to such specification before shipment to customers. We ship
products to customers based upon firm orders. Shipping and handling costs are included in cost of sales. We recognize revenue when the sales
process is complete. This occurs when products are shipped to the customer in accordance with the terms of an agreement of sale, there is a
fixed or determinable selling price, title and risk of loss have been transferred and collectability is reasonably assured. Estimates used in
determining sales allowance programs described below are subject to the volatilities of the market place. This includes, but is not limited to,
changes in economic conditions, pricing changes, product demand, inventory levels in the supply chain, the effects of technological change, and
other variables that might result in changes to our estimates. Accordingly, there can be no assurance that actual results will not differ from
those estimates.

Accounts Receivable

We maintain an allowance for doubtful accounts for estimated losses resulting from the inability of our customers to make required
payments. The allowance is determined through an analysis of the aging of accounts receivable and assessments of risk that are based on
historical trends and an evaluation of the impact of current and projected economic conditions. We evaluate the past-due status of trade
receivables based on contractual terms of sale. If the financial condition of our customers were to deteriorate, resulting in an impairment of
their ability to make payments, additional allowances may be required.

- 44 -

Returns

Sales revenue and cost of sales reported in the statement of operations are reduced to reflect estimated returns. We record an
estimated sales allowance for returns at the time of sale based on using historical trends, current pricing and volume information, other
market specific information and input from sales, marketing and other key management. The amount accrued reflects the return of value
of the customer’s inventory. These procedures require the exercise of significant judgments. We believe that these procedures enable us
to make reliable estimates of future returns. Our actual results approximate our estimates. When the product is returned and verified, the
customer is given credit against their accounts receivable.

Distribution Programs

A portion of our sales are to independent electronic component distributor customers, which are subject to various distributor sales
programs. We report provisions for distributor allowances in connection with such sales programs as a reduction in revenue and report
distributor allowances in the balance sheet as a reduction in accounts receivable. For the distribution programs described below, we do
not track the individual units that are recorded against specific products sold from distributor inventories, which would allow us to
directly compare revenue reduction for credits recorded during any period with credits ultimately awarded in respect of products sold
during that period. Nevertheless, we believe that we have an adequate basis to assess the reasonableness and reliability of our estimates
for each program.

Distributor Stock Rotation Program

Stock rotation is a program whereby distributor customers are allowed to return for credit qualified inventory, semi-annually, equal to
a certain percentage, primarily limited to 5% of the previous six months net sales. We record an estimated sales allowance for stock
rotation at the time of sale based on a percentage of distributor sales using historical trends, current pricing and volume information,
other market specific information and input from sales, marketing and other key management. These procedures require the exercise of
significant judgments. We believe that these procedures enable us to make reliable estimates of future returns under the stock rotation
program. Our actual results approximate our estimates. When the product is returned and verified, the distributor is given credit against
their accounts receivable.

Distributor Ship-from-Stock and Debit Program

Ship-from-Stock and Debit ("ship and debit") is a program designed to assist distributor customers in meeting competitive prices in
the marketplace on sales to their end customers. Ship and debit programs require a request from the distributor for a pricing adjustment
for a specific part for a sale to the distributor’s end customer from the distributor’s stock. Ship and debit authorizations may cover
current and future distributor activity for a specific part for sale to their customer. At the time we record sales to the distributors, we
provide an allowance for the estimated future distributor activity related to such sales since it is probable that such sales to distributors
will result in ship and debit activity. We record an estimated sales allowance based on sales during the period, credits issued to
distributors, distributor inventory levels, historical trends, market conditions, pricing trends we see in our direct sales activity with original
equipment manufacturers and other customers, and input from sales, marketing and other key management. These procedures require
the exercise of significant judgments. We believe that these procedures enable us to make reliable estimates of future credits under the
ship and debit program. Our actual results approximate our estimates. At the time the distributor ships the part from stock, the
distributor debits us for the authorized pricing adjustment.

Special Incentive Programs

Warranty:

All of our products are built to specifications and tested by us for adherence to such specifications before shipment to customers.
We warrant that our products will meet such specifications. We accrue for product warranties when it is probable that customers will
make claims under warranties relating to products that have been sold and a reasonable estimate of costs can be made. The amount
accrued represents the direct costs of replacement and other potential costs resulting from product not meeting specifications above and
beyond the return value of the customer’s affected product purchases. Historically valid warranty claims, which are a result of products
not meeting specifications, have been immaterial to our results of operations. However, there is no guarantee that warranty claims in the
future will not increase, or be material to results of operations, as a result of manufacturing defects, end market product application

- 45 -

failures or end user recall or damage claims.

Grants:

We receive employment and research grants from various non-U.S. governmental agencies, which are recognized in our results of
operations in the period in which the related expenditures are incurred. Capital grants for the acquisition of equipment are recorded as
reductions of the related equipment cost and reduce future depreciation expense. The grants are generally subject to certain conditions
and non-compliance with such conditions could result in repayment of grants.

Research, Development and Engineering:

Research, development and engineering expenditures are expensed when incurred. Research and development expenses are included
in selling, general and administrative expenses and were $6,831, $7,392, and $7,716 for the fiscal years ended March 31, 2010, 2011, and
2012, respectively. Engineering expenses are included in cost of sales and selling, general, and administrative expenses as follows:

Engineering expense:
Cost of sales
Selling general and administrative expense

Total engineering expense

Stock-Based Compensation:

Years Ended March 31,
2011

2010

2012

17,200
636
17,836

15,774
517
16,291

18,156
456
18,612

We recognize compensation cost resulting from all share-based payment transactions in the financial statements. The amount of
compensation cost is measured based on the grant-date fair value for the share-based payment issued. Our policy is to grant stock
options with an exercise price equal to our stock price on the date of grant. Compensation cost is recognized over the vesting period of
the award.

We use the Black-Scholes-Merton option-pricing model to determine the fair value of options at the grant date. See Note 10 for

assumptions used.

Treasury Stock:

Our Board of Directors has approved stock repurchase authorizations whereby up to 15,000 shares of common stock could be
purchased from time to time at the discretion of management. Accordingly, 322 shares were purchased during the fiscal year ended
March 31, 2010, 445 shares were purchased during the fiscal year ended March 31, 2011 and 625 shares were purchased during the fiscal
year ended March 31, 2012. We purchased 154 shares of common stock during the fourth quarter of the fiscal year ended March 31,
2012. As of March 31, 2012, we had in treasury 6,768 common shares at a cost of $87,988. There are 6,492 shares that may yet be
purchased under this program.

Commitments and Contingencies:

Liabilities for loss contingencies are recorded when analysis indicates that it is both probable that a liability has been incurred and the
amount of loss can be reasonably estimated. When a range of loss can be estimated, we accrue the most likely amount. In the event that
no amount in the range of probable loss is considered most likely, the minimum loss in the range is accrued. Amounts recorded are
reviewed periodically and adjusted to reflect additional legal and technical information that becomes available. Legal costs are accrued as
incurred.

New Accounting Standards:

In January 2010, the Financial Accounting Standards Board (“FASB”) updated the accounting guidance related to fair value
measurements disclosures. The updated guidance (i) requires separate disclosure of significant transfers out of Levels 1 and 2 fair value
measurements, (ii) requires disclosure of Level 3 fair value measurements activity on a gross basis, (iii) clarifies existing disaggregation
requirements, and (iv) clarifies existing input and valuation technique disclosure requirements. The updated guidance is effective for
interim and annual reporting periods beginning after December 15, 2009, except for the Level 3 fair value measurement disclosure
requirements, which are effective for fiscal years beginning after December 15, 2010. As of April 1, 2011, we have adopted all aspects of

- 46 -

the guidance which has had no effect on our financial position, results of operations, or cash flows and the adoption of the remaining
guidance is not expected to have any effect on our financial position, results of operations, or cash flows.

In June 2011, the FASB issued amendments to existing standards for reporting comprehensive income. Accounting Standards
Update (ASU) 2011-05 rescinds the requirement to present a Consolidated Statement of Changes in Shareholders’ Equity and introduces
a new statement, the Consolidated Statement of Comprehensive Income. The new statement begins with net income and adds or deducts
other recognized changes in assets and liabilities that are not included in net earnings under GAAP. The amendments are effective for our
first quarter of fiscal year 2013 financial statements. The amendments affect only the display of those components of equity categorized
as other comprehensive income and do not change existing recognition and measurement requirements that determine net earnings.

In December 2011, the FASB issued ASU 2011-12, which effectively defers the changes in ASU 2011-05 that relate to the
presentation of reclassification out of accumulated other comprehensive income. All other requirements of ASU 2011-05 are not affected
by this update. We are required to adopt the provision of this ASU in the first quarter of fiscal year 2013. We do not believe the adoption
will have a material impact on our Consolidated Financial Statements.

2. Earnings Per Share:

Basic earnings per share are computed by dividing net earnings by the weighted average number of shares of common stock
outstanding for the period. Diluted earnings per share are computed by dividing net earnings by the sum of (a) the weighted average
number of shares of common stock outstanding during the period and (b) the dilutive effect of potential common stock equivalents
during the period. Stock options are the only common stock equivalents and are computed using the treasury stock method.

The table below represents the basic and diluted weighted average number of shares of common stock and potential common stock

equivalents outstanding for the years ended March 31, 2010, 2011 and 2012:

Net Income
Computation of Basic EPS:

Weighted Average Shares Outstanding used in Computing Basic EPS
Basic earnings per share
Computation of Diluted EPS:

Weighted Average Shares Outstanding
Effect of stock options
Shares used in Computing Diluted EPS
Diluted Income per share

(1)

2010

2011

2012

142,858

244,003

152,805

170,247
0.84

170,247
27
170,274
0.84

170,025
1.44

170,025
365
170,390
1.43

169,886
0.90

169,886
248
170,134
0.90

(1) Common stock equivalents, not included in the computation of diluted earnings per share because the impact would have been anti-dilutive, were
6,240 shares, 2,601 shares and 2,761 shares for the fiscal years ended March 31, 2010, 2011 and 2012, respectively.

- 47 -

3. Comprehensive Income:

Comprehensive income includes the following components:

Net income
Other comprehensive income (loss), net of income taxes:

Pension liability and other savings plan liability adjustment
Foreign currency translation adjustment
Foreign currency cash flow hedges
Unrealized gain (loss) on available-for-sale securities

Comprehensive income (loss)

The accumulated balance of comprehensive income is as follows:

Years Ended March 31,
2011
244,003

2010
142,858

(2,215)
16,564
314
2,530
160,051

1,146
21,993
369
409
267,920

2012
152,805

(7,617)
(13,382)
(726)
(86)
130,994

Pension liability and other savings plan liability adjustment
Foreign currency translation adjustment
Foreign currency cash flow hedges
Unrealized gain (loss) on available-for-sale securities
Balance at end of period

4. Fair Value:

Fair Value Hierarchy:

2010
$ (29,388)
47,716
(748)
(323)
17,257

Years Ended March 31,
2011
$ (28,242)
69,709
(379)
86
$ 41,174

2012
$ (35,859)
56,327
(1,105)
-
19,363

The fair value framework requires the categorization of assets and liabilities into three levels based upon the assumptions (inputs)
used to value the assets or liabilities. Level 1 provides the most reliable measure of fair value, whereas Level 3 generally requires significant
management judgment. The three levels are defined as follows:

(cid:2) Level 1: Unadjusted quoted prices in active markets for identical assets and liabilities.

(cid:2) Level 2: Observable inputs other than those included in Level 1. For example, quoted prices for similar assets or liabilities in

active markets or quoted prices for identical assets or liabilities in inactive markets.

(cid:2) Level 3: Unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability.

Based on

Quoted
prices in
active
markets
(Level 1)

Other
observable
inputs
(Level 2)

Unobservable
inputs
(Level 3)

Fair Value at
March 31, 2011

2,747
4,490

$
12
-

2,305
3,783

430
707

8,730

1,538
17,505

-
8,742

1,538
7,626

-
1,137

Assets measured at fair value on a recurring basis:
Available-for-sale investment securities - short-term
Available-for-sale investment securities - long-term

Assets held in the non-qualified deferred compensation program

(1)

Foreign currency derivatives

(2)

Total

- 48 -

Liabilities measured at fair value on a recurring basis:

Obligation related to assets held in the non-qualified deferred
compensation program

(1)

Foreign currency derivatives

(2)

Total

Assets measured at fair value on a recurring basis:
Available-for-sale investment securities - short-term
Available-for-sale investment securities - long-term

Assets held in the non-qualified deferred compensation program

(1)

Foreign currency derivatives

(2)

Total

Liabilities measured at fair value on a recurring basis:

Obligation related to assets held in the non-qualified deferred
compensation program

(1)

Foreign currency derivatives

(2)

Total

Based on

Quoted
prices in
active
markets
(Level 1)

Other
observable
inputs
(Level 2)

Unobservable
inputs
(Level 3)

Fair Value at
March 31, 2011

8,730

$
-

1,851
10,581

-
8,730

1,851
1,851

-
$
-

Based on

Quoted
prices in
active
markets
(Level 1)

Other
observable
inputs
(Level 2)

Unobservable
inputs
(Level 3)

Fair Value at
March 31, 2012

$
-
-

9,150

1,760
10,910

-
9,150

1,760
1,760

-
$
-

Based on

Quoted
prices in
active
markets
(Level 1)

Other
observable
inputs
(Level 2)

Unobservable
inputs
(Level 3)

Fair Value at
March 31, 2012

9,150

$
-

3,541
12,691

-
9,150

3,541
3,541

-
$
-

(1) The market value of the assets held in the trust for the non-qualified deferred compensation program is included as an asset and a liability of the trust’s assets
and are available to general creditors in the event of our insolvency.

(2) Foreign currency derivatives in the form of forward contracts are included in accrued expenses in the March 31, 2011 and 2012 consolidated balance sheets.
Unrealized gains and losses on derivatives classified as cash flow hedges are recorded in other comprehensive income. Realized gains and losses on derivatives
classified as cash flow hedges and gains and losses on derivatives not designated as hedges are recorded in other income (expense).

- 49 -

The following table presents additional information about Level 3 assets measured at fair value on a recurring basis for the fiscal

years ended March 31, 2011 and March 31, 2012.

Available-for-sale marketable securities

Year Ended March 31,
2012

2011

Balance, beginning of period
Net realized and unrealized gains (losses) included in earnings
Net unrealized gains (losses) included in comprehensive income
Settlements
Transfers in and/or out of Level 3, net
Balance, end of period

Valuation Techniques:

351
(111)
(37)
-
934
1,137

1,137
-
-
(1,137)
-
$
-

The following describes valuation techniques used to appropriately value our available-for-sale securities and derivatives.

Investment Securities

Assets valued using Level 1 inputs in the table above represent assets from our non-qualified deferred compensation program. The
funds in the non-qualified deferred compensation program are valued based on the number of shares in the funds using a price per share
traded in an active market.

Assets valued using Level 2 inputs in the table above represent a portfolio including, foreign bonds, corporate bonds, asset backed
obligations and mortgage-backed securities. Valuation inputs used include benchmark yields, reported trades, broker and dealer quotes,
issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data.

Assets valued using Level 3 inputs in the table above represent a portfolio including corporate bonds, asset backed obligations and
mortgage-backed securities. Unobservable inputs for valuation are management’s assessments based on a third party pricing vendor using
valuation inputs described above for Level 2, adjusted based on the best economic and industry information available in the
circumstances.

Investments are considered to be impaired when a decline in fair value is judged to be other-than-temporary. If the cost of an
investment exceeds its fair value, among other factors, we evaluated general market conditions, the duration and extent to which the fair
value is less than cost, and our intent and ability to hold the investment. Once a decline in fair value is determined to be other-than-
temporary, an impairment charge is recorded and a new cost basis in the investment is established.

Derivatives

We primarily use forward contracts, with maturities generally less than four months, designated as cash flow hedges to protect against
the foreign currency exchange rate risks inherent in forecasted transactions related to purchase commitments and sales, denominated in
various currencies. We also use derivatives not designated as hedging instruments to hedge foreign currency balance sheet exposures.
These derivatives are used to offset currency changes in the fair value of the hedged assets and liabilities. Fair values for all of our
derivative financial instruments are valued by adjusting the market spot rate by forward points, based on the date of the contract. The
spot rates and forward points used are an average rate from an actively traded market. At March 31, 2011 and 2012, all of our forward
contracts have been designated as Level 2 measurements.

- 50 -

5. Accounts Receivable:

Accounts receivable at March 31 consisted of:

Trade
Less:

Allowances for doubtful accounts
Ship from stock and debit and stock rotation
Sales returns and discounts
Total allowances

2011
249,622

686
13,340
7,954
21,980
227,642

2012
228,396

720
14,327
7,179
22,226
206,170

Charges related to allowances for doubtful accounts are charged to selling, general and administrative expenses. Charges related to

sales returns and discounts and distributor sales programs are reported as deductions from revenue.

Activity for the fiscal years ended March 31,
Allowances for doubtful accounts:
Beginning Balance
Charges
Applications
Translation and other
Ending Balance

Ship from stock and debit and stock rotation:
Beginning Balance
Charges
Applications
Translation and other
Ending Balance

Sales returns and discounts:
Beginning Balance
Charges
Applications
Translation and other
Ending Balance

6. Inventories:
Inventories at March 31 consisted of:
Finished goods
Work in process
Raw materials and supplies

2010

2011

2012

947
(196)
(199)
11
563

12,169
29,544
(29,749)
-
11,964

6,922
17,790
(18,030)
(1)
6,681

563
521
(398)
-
686

11,964
32,778
(31,402)
-
13,340

6,681
29,223
(27,956)
6
7,954

686
(52)
86

-
720

13,340
29,592
(28,812)
207
14,327

7,954
21,512
(22,080)
(207)
7,179

2011
120,723
92,680
283,092
496,495

2012
118,916
101,923
345,278
566,117

- 51 -

7. Financial Instruments and Investments in Securities:

Our financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents, securities
investments and trade accounts receivable. We place our cash and cash equivalents with high credit quality institutions. At times, such
investments may be in excess of the Federal Deposit Insurance Corporation insurance limit. Concentrations of credit risk with respect to trade
accounts receivable are limited due to the large number of entities comprising our customer base and their dispersion across many different
industries and countries. As of March 31, 2012, we believe that our credit risk exposure is not significant.

At March 31, 2011 and 2012 investments in debt securities and time deposits held by us were classified either as available-for-sale or held-

to-maturity.

Available-for-sale investments are securities are classified as either current or long-term assets based on their underlying expected cash
flows and are being recorded at fair market value. Any unrealized holding gains and losses resulting from these securities are reported, net of tax
as a separate component of shareholders' equity until realized. Realized gains and losses and declines in value judged to be other than
temporary, if any, are included in the results of operations and are determined by specific identification of securities. During the fiscal year
ended March 31, 2012, the Company has recorded no other-than-temporary impairment charges or net unrealized gains to other comprehensive
income related to these securities. See Notes 3 and 4 for additional disclosures related to these available-for-sale securities.

Investments in held-to-maturity securities, recorded at amortized cost were as follows at March 31:

Short-term investments:

U.S. government and agency securities
Corporate bonds
Time deposits

Long-term investments:

Corporate bonds
U.S. government and agency securities

Short-term investments:
Commercial paper
Corporate bonds
Time deposits

Long-term investments:

Corporate bonds
U.S. government and agency securities

2011

Gross
Unrealized
Gains

Gross
Unrealized
Losses

Estimated
Fair Value

19
39
1

-
59
118

2012

-
-
-

(21)
(978)
(999)

20,019
44,006
334,948

20,822
199,073
618,868

Gross
Unrealized
Gains

Gross
Unrealized
Losses

Estimated
Fair Value

-
138
-

229
164
531

(2)

-
-

(72)
(154)
(228)

6,798
40,776
370,695

68,218
170,061
656,548

Cost

20,000
43,967
334,947

20,843
199,992
619,749

Cost

6,800
40,638
370,695

68,061
170,051
656,245

The amortized cost and estimated fair value of held-to-maturity investments at March 31, 2012, by contractual maturity, are shown
below. Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations without
call or prepayment penalties.

Due in one year or less
Due after one year through five years

Total

Held-to-Maturity

Amortized
Cost

Estimated
Fair Value

418,133
238,112
656,245

418,269
238,279
656,548

- 52 -

8. Income Taxes:

For financial reporting purposes, income before income taxes includes the following components:

Years Ended March 31,
Domestic
Foreign

2010

56,826
119,531
176,357

2011
123,112
211,147
334,259

2012

1,463
178,442
179,905

The provision for income taxes consisted of:

Years Ended March 31,
Current:

Federal/State
Foreign

Deferred:

Federal/State
Foreign

2010

2011

2012

$ 30,647
11,271
41,918

$ 52,114
40,819
92,933

$ 33,166
43,471
76,637

(21,211)
12,792
(8,419)
$ 33,499

(11,217)
8,540
(2,677)
$ 90,256

(52,093)
2,556
(49,537)
$ 27,100

Deferred taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for income tax purposes. Significant components of our deferred tax assets and liabilities are as
follows:

March 31,
Current:

Sales and receivable allowances
Inventory reserves
Utilization of foreign tax credits
Accrued expenses and other

Sub total

Less valuation allowances

Total Current

March 31,
Non-current:

Tax over book depreciation / amortization
Deduction of foreign branch losses
Pension obligations
Other, net
Net operating loss and tax credit carry forwards

Sub total

Less valuation allowances

Total Non-current

2011

2012

Assets

Liabilities

Assets

Liabilities

-
20

86
106
-
106

9,122
9,868
-
24,878
43,868
(4,407)
39,461

2011

Assets

18,138
-
10,620
7,134
84,669
120,561
(77,893)
42,668

Liabilities
24,184
10,236
-
6,597
-
41,017
-
41,017

-
381
8,686
-
9,067
-
9,067

8,916
11,765
20,552
56,294
97,527
(3,220)
94,307

2012

Assets

18,498
-
15,431
8,630
77,001
119,560
(69,561)
49,999

Liabilities
20,790
9,401
-
7,585
-
37,776
-
37,776

- 53 -

Aggregate deferred income tax amounts are summarized below:

March 31,
Assets
Liabilities

Net deferred income tax assets

Amounts included in our Consolidated Balance Sheets:

March 31,

Current assets
Current liabilities
Noncurrent assets
Noncurrent liabilities

Net deferred income tax assets

2011

82,129
(41,123)
41,006

2011

39,355
-
1,651
-
41,006

2012
144,306
(46,843)
97,463

2012

85,787
(547)
14,493
(2,270)
97,463

Reconciliation between the U.S. Federal statutory income tax rate and our effective rate for income tax is as follows:

U.S. Federal statutory rate
Increase (decrease) in tax rate resulting from:
State income taxes, net of federal benefit
Effect of foreign operations
Change in valuation allowance
Foreign branch losses not subject to recapture
Utilization of foreign tax credits
Other, net
Effective tax rate

2010
35.0%

0.9
(8.1)
(2.2)
(9.4)

2.8
19.0%

Years Ended March 31,
2011
35.0%

0.8
(8.2)
0.9
(1.1)

(0.4)
27.0%

2012
35.0%

(0.7)
(11.8)
(0.8)
(0.9)
(3.4)
(2.3)
15.1%

At March 31, 2012, certain of our foreign subsidiaries in Brazil, France, Germany, Israel and Taiwan had tax net operating loss carry
forwards totaling approximately $224,403 of which most had no expiration date. There is a greater likelihood of not realizing the future tax
benefits of these net operating losses and other deductible temporary differences in Brazil, France, Israel and Taiwan since these losses and
other deductible temporary differences must be used to offset future taxable income of those subsidiaries, which cannot be assured, and are not
available to offset taxable income of other subsidiaries located in those countries. Accordingly, we have recorded valuation allowances related
to the net deferred tax assets in these jurisdictions. Valuation allowances increased $3,049 and decreased $6,727 during the years ended March
31, 2011 and 2012, respectively, as a result of changes in the net operating losses of the subsidiaries in the countries mentioned above.

We have recorded deferred tax liabilities of $10,236 and $9,401 at March 31, 2011 and 2012, respectively, for temporary differences
associated with deductions for foreign branch losses claimed by us in our U.S. income tax returns that are subject to U.S. recapture regulations.

The provision for income taxes in the current fiscal year was favorably impacted by a reduction of $1,575 of deferred tax liabilities resulting
from certain of our foreign branch losses taken as deductions for U.S. income tax purposes no longer being subject to the U.S. income tax
recapture regulations. In March 2007, the Internal Revenue Service enacted a change in the tax regulations that reduced the U.S. income tax
recapture period on such foreign branch losses from 15 years to 5 years. We estimate no further reduction in deferred tax liabilities due to
foreign losses, as the recapture period related to foreign branch losses deducted in certain prior years has expired.

At the present time, we expect that cash and profits generated by a majority of our foreign subsidiaries will continue to be reinvested
indefinitely. We do not provide for U.S. taxes on the undistributed earnings of foreign subsidiaries which are considered to be reinvested
indefinitely. The amount of U.S. taxes on such undistributed earnings as of March 31, 2011 and 2012 would have been $142,616 and $142,902,
respectively.

Income taxes paid totaled $31,181, $81,505 and $91,709 during the years ended March 31, 2010, 2011 and 2012, respectively.

We do not expect that the balances with respect to our uncertain tax positions will significantly increase or decrease within the next 12
months. For our more significant locations, we are subject to income tax examinations for the years 2009 and forward in the United States,
2009 and forward in Germany, 2006 and forward in Hong Kong, and 2006 and forward in the United Kingdom.

- 54 -

A reconciliation of the beginning and ending balance for liabilities associated with uncertain tax positions is as follows:

Balance at March 31, 2009

Additions for tax positions of prior years
Reductions for tax positions of prior years

Balance at March 31, 2010

Additions for tax positions of prior years
Reductions for tax positions of prior years

Balance at March 31, 2011

Additions for tax positions of prior years
Additions for tax positions in current period
Reductions for tax positions of prior years
Reductions due to expiration of statutes
Reductions due to settlements with taxing authorities

Balance at March 31, 2012

5,101
7,554
(50)
12,605
2,825
(2,917)
12,513
2,223
410
(838)
(186)
(966)
13,156

We recognize interest and penalties related to uncertain tax positions in interest expense. As of March 31, 2011 and 2012, we had
accrued interest and penalties related to uncertain tax positions of $534 and $1,311, respectively. During the year ended March 31, 2011
and 2012, we recognized zero and $707, respectively, in interest and penalties.

The amount of unrecognized tax benefits recorded on our balance sheet that if recognized would affect the effective tax rate, is
approximately $12,513 and $13,156 at March 31, 2011 and 2012, respectively. This amount excludes the accrual for estimated interest and
penalties discussed above.

9. Employee Retirement Plans:

Pension Plans:

We sponsor various defined benefit pension plans covering certain employees. Pension benefits provided to certain U.S. employees
covered under collective bargaining agreements are based on a flat benefit formula. Effective December 31, 1995, we froze benefit
accruals under our domestic non-contributory defined benefit pension plan for a significant portion of the employees covered under
collective bargaining agreements. Our pension plans for certain international employees provides for benefits based on a percentage of
final pay. Our funding policy is to contribute amounts sufficient to meet minimum funding requirements as set forth in employee benefit
and tax laws.

We recognize the overfunded or underfunded status of our defined benefit postretirement plans as an asset or liability in our
statement of financial position and recognize changes in that funded status in the year in which the changes occur through comprehensive
income. The adjustment to our pension liability is due to the change in the funded status of our plans was to decrease recorded pension
liabilities by $13,942 during the fiscal year ended March 31, 2011, and to increase recorded pension liabilities by $4,369 during the fiscal
year ended March 31, 2012.

- 55 -

The change in the benefit obligation and plan assets of the U.S. and international defined benefit plans for 2011 and 2012 were

as follows:

Change in benefit obligation:

Benefit obligation at beginning of year

Service cost
Interest cost
Plan participants' contributions
Actuarial (gain)/loss
Benefits paid
Curtailment
Foreign currency exchange rate changes

Benefit obligation at end of year

Change in plan assets:

Fair value of plan assets at beginning of year

Actual return on assets
Employer contributions
Plan participants' contributions
Benefits paid
Foreign currency exchange rate changes
Fair value of plan assets at end of year

Funded status

Years Ended March 31,

U.S. Plans

International Plans

2011

2012

2011

2012

31,340
451
1,744
-
707
(1,687)
-
-
32,555

26,872
3,274
6,198
-
(1,687)
-
34,657
2,102

32,555
365
1,735
-
4,839
(1,783)
-
-
37,711

34,657
1,299
-
-
(1,783)
-
34,173
(3,538)

114,315
502
6,635
132
(992)
(6,259)
-
7,664
121,997

86,296
6,811
8,544
132
(6,259)
5,826
101,350
(20,647)

121,997
488
6,452
121
8,352
(5,026)
-
(1,851)
130,533

101,350
7,731
8,203
121
(5,026)
(1,222)
111,157
(19,376)

The accumulated benefit obligation at March 31, 2011 and 2012 was $154,552 and $168,244, respectively.

At March 31, 2012, the accumulated benefit obligation exceeded the fair value of the assets for all of the U.S. defined benefit

and international defined benefit plans.

The Company's assumptions used in determining the pension assets and liabilities were as follows:

Assumptions:
Discount rates
Increase in compensation

March 31,

2011

2012

5.15-5.75%
4.00%

4.00-5.00%
3.80%

The following table shows changes in accumulated comprehensive income, excluding the effect of income taxes, related to amounts
recognized in other comprehensive income during fiscal 2012 and amounts reclassified to the statement of operations as a component of
net periodic pension cost during fiscal 2012.

Beginning balance
Net (gain) loss incurred during the year
Amortization of net loss
Amortization of prior service cost
Exchange

Years Ended March 31,

U.S. Plans

2011

2012

International Plans
2011

2012

8,485
(447)
(431)
(10)
-
7,597

7,597
5,809
(327)
(10)
-
13,069

33,835
(1,931)
(1,620)
-
2,667
32,951

32,951
7,134
(1,458)
-
(397)
38,230

- 56 -

Amounts that have not yet been recognized as components of net periodic pension cost (as a component of accumulated

comprehensive income at March 31, 2012) are as follows:

Unrecognized net actuarial loss
Unamortized prior service cost

Years Ended March 31,

U.S. Plans

2011 (1)
4,731
17
4,748

2012 (2)
8,526
17
8,543

International Plans

2011 (1)

2012 (2)

23,725
-
23,725

27,326
-
27,326

(1) Amounts in the above table as of March 31, 2011 are net of $2,849 and $9,226 tax benefit for the U.S. Plans and for the
International Plans, respectively.

(2) Amounts in the above table as of March 31, 2012 are net of $4,526 and $10,904 tax benefit for the U.S. Plans and for the
International Plans, respectively.

The March 31, 2012 balance of unrecognized net actuarial losses expected to be amortized in fiscal 2013 is $858 for the U.S.
Plans and $1,700 for the International Plans, respectively. The March 31, 2012 balance of unamortized prior service cost expected to
be amortized in fiscal 2013 is $7 for the U.S. Plans.

Net pension cost related to these pension plans includes the following components:

Service cost
Interest cost
Expected return on plan assets
Amortization of prior service cost
Recognized actuarial loss
Net periodic pension cost

2010

876
8,119
(6,130)
10
2,029
4,904

Years Ended March 31,
2011

937
8,151
(7,968)
10
2,051
3,181

2012

855
8,224
(8,629)
10
1,785
2,245

The Company's assumptions used in determining the net periodic pension expense were as follows:
March 31,
2011

2010

Assumptions:
Discount rates
Increase in compensation
Expected long-term rate of return on plan assets

5.20 - 7.25%
4.00%
6.50 - 7.50%

5.05 - 5.75%
4.25%
6.50 - 7.25%

2012

4.60 - 5.50%
4.00%
6.40 - 7.25%

The pension expense is calculated based upon a number of actuarial assumptions established annually for each plan year, detailed in
the table above including discount rate, rate of increase in future compensation levels and expected long-term rate of return on plan
assets. To determine the discount rate, we apply the expected cash flows from each individual pension plan to specific yield curves at the
plan’s measurement date and determine a level equivalent yield that may be unique to each plan. On that basis, the range of discount rates
decreased 0.25% from March 31, 2011 to March 31, 2012.

- 57 -

The fair value of pension assets at March 31, 2011 and 2012 was determined using:

Based on

Quoted prices
in active
markets
(Level 1)

Other
observable
inputs
(Level 2)

Unobservable
inputs
(Level 3)

Fair Value at
March 31, 2011

128
31,178
3,351

128
-
-

$
-
31,178
3,351

$
-
-
-

478
100,872
136,007

478
-
606

-
100,872
135,401

-
-
$
-

Based on

Quoted prices
in active
markets
(Level 1)

Other
observable
inputs
(Level 2)

Unobservable
inputs
(Level 3)

Fair Value at
March 31, 2012

138
30,843
3,192

138
-
-

-
$
30,843
3,192

-
$
-
-

361
110,796
145,330

361
-
499

-
110,796
144,831

-
-
$
-

Assets measured at fair value on a recurring basis:
U.S. Defined Benefit Plan Assets:

Cash
Pooled Separate Accounts
Guaranteed Deposit Account

International Defined Benefit Plan Assets:

Cash
Pooled Separate Accounts

Total

Assets measured at fair value on a recurring basis:
U.S. Defined Benefit Plan Assets:

Cash
Pooled Separate Accounts
Guaranteed Deposit Account

International Defined Benefit Plan Assets:

Cash
Pooled Separate Accounts

Total

Assets valued using Level 1 inputs in the table above are cash.

Assets valued using Level 2 inputs in the table above are investments held in pooled separate accounts and a guaranteed deposit account.

See discussion in the “Valuation of Investments” section below.

Valuation of Investments

Our investments are held in Pooled Separate Accounts and a Guaranteed Deposit Account. Investments held in the Pooled Separate
Accounts are based on the fair value of the underlying securities within the fund, which represent the net asset value, a practical expedient to fair
value, of the units held by the pension plan at year-end. Those assets held in the Guaranteed Deposit Account are valued at the contract value
of the account which approximates fair value. The contract value represents contributions plus accumulated interest at the contract rate, less
benefits paid to participants, contract administration fees and other direct expenses.

The expected long-term rate of return on plan assets assumption is based upon actual historical returns and future expectations for returns
for each asset class. These expected results were adjusted for payment of reasonable expenses from plan assets. Our long-term strategy is for
target allocation of 40% equity and 60% fixed income for our U.S. defined benefit plans and 60% equity and 40% fixed income for our
international defined benefit plans.

- 58 -

The Company's pension plans' weighted average asset allocations at March 31, 2011 and 2012, by asset category are as follows:

Asset Category
Equity securities
Debt securities
Other
Total

March 31, 2011

March 31, 2012

U.S. Plans
51%
39%
10%
100%

International
Plans
50%
50%
0%
100%

U.S. Plans
52%
39%
9%
100%

International
Plans
50%
50%
0%
100%

We make contributions to our defined benefit plans as required under various pension funding regulations. Accordingly, we
expect to make contributions of approximately $7,722 to the international plans and none to the U.S. plans in fiscal 2013 based on
current actuarial computations.

Estimated future benefit payments are as follows:

Years ended March 31,
2013
2014
2015
2016
2017
2018-2022

Savings Plans:

U.S. Plans
1,701
1,749
1,867
1,974
2,092
12,188

International
Plans

5,020
5,326
5,647
5,990
6,360
38,179

We sponsor retirement savings plans, which allow eligible employees to defer part of their annual compensation. Certain
contributions by us are discretionary and are determined by our Board of Directors each year. Our contributions to the savings plans in
the United States and Europe for the fiscal years ended March 31, 2010, 2011 and 2012 were approximately $5,836, $5,507 and $4,492,
respectively.

In addition, we sponsor a nonqualified deferred compensation program, which permits certain employees to annually elect to defer a
portion of their compensation until retirement. A portion of the deferral is subject to a matching contribution by us. The employees
select among various investment alternatives, which are the same as available under the retirement savings plans, with the investments
held in a separate trust. The value of the participant's balance fluctuates based on the performance of the investments. The market value
of the trust at March 31, 2011 and 2012 of $8,730 and $9,150, respectively, is included as an asset and a liability in our accompanying
balance sheet because the trust’s assets are available to our general creditors in the event of our insolvency.

10. Stock Based Compensation:

We have four fixed stock option plans. Under the 1995 Stock Option Plan, as amended, we could grant options to employees for the
purchase of up to an aggregate of 9,300 shares of common stock. Under the Non-Employee Directors' Stock Option Plan, as amended,
we could grant options for the purchase of up to an aggregate of 650 shares of common stock. No awards were made under these two
plans after August 1, 2005. Under the 2004 Stock Option Plan, as amended, we may grant options to employees for the purchase of up
to an aggregate of 10,000 shares of common stock. Under the 2004 Non-Employee Directors' Stock Option Plan, as amended, we may
grant options for the purchase of up to an aggregate of 1,000 shares of common stock. Under all plans, the exercise price of each option
shall not be less than the market price of our stock on the date of grant and an option's maximum term is 10 years. Options granted
under the 1995 Stock Option Plan and the 2004 Stock Option Plan vest as to 25% annually and options granted under the Non-
Employee Directors' Stock Option Plan and the 2004 Non-Employee Directors' Stock Option Plan vest as to one third annually.
Requisite service periods related to all plans begin on the grant date. As of March 31, 2012, there were 12,303 shares of common stock
available for future issuance under all of the plans, consisting of options available to be granted and options currently outstanding.

- 59 -

Activity under our stock option plans is summarized as follows:

Number of
Shares

Average Price
(a)

Average Life
(years) (b)

Aggregated
Intrinsic
Value

3,955
530
(84)
(57)
4,344

3,043

14.08
14.54
11.80
19.43
14.12

14.49

-
-
-
-
5.06

3.69

-
-
305
-
2,944

2,034

Outstanding at March 31, 2011
Options granted
Options exercised
Options cancelled/forfeited
Outstanding at March 31, 2012

Exercisable at March 31, 2012

(a) Weighted-average exercise price
(b) Weighted-average contractual life remaining

The total aggregate intrinsic value of options exercised is $23, $1,753 and $305 for fiscal years ended March 31, 2010, 2011 and 2012,

respectively.

Unvested share activity under our stock options plans for the year ended March 31, 2012 is summarized as follows:

Unvested balance at March 31, 2011
Options granted
Options forfeited
Options vested
Unvested balance at March 31, 2012

Number of
Shares

1,295
530
(11)
(513)
1,301

Weighted
Average
Grant-Date
Fair Value
3.22
3.03
3.01
3.61
2.99

The total unrecognized compensation costs related to unvested awards expected to be recognized over the vesting period, approximately
four years, was $1,714 and $1,157 as of March 31, 2011 and 2012, respectively. The total aggregate fair value of options vested is $2,752, $2,239
and $1,850 for fiscal years ended March 31, 2010, 2011 and 2012, respectively.

The weighted average estimated fair value of our stock options granted at grant date market prices was $2.18, $3.29 and $3.03 per option
during fiscal years ended March 31, 2010, 2011 and 2012, respectively. The consolidated statement of operations includes $1,180, net of $636 of
tax benefit, in stock-based compensation expense for fiscal 2012.

Our weighted average fair value is estimated at the date of grant using a Black-Scholes-Merton option-pricing model. We estimated
volatility by considering our historical stock volatility. We calculated the dividend yield based on historical dividends paid. We have estimated
forfeitures in determining the weighted average fair value calculation. The forfeiture rate used for the fiscal year ended March 31, 2012 was
6.9%. The following are significant weighted average assumptions used for estimating the fair value of options issued under our stock option
plans:

Expected life (years)
Interest rate
Volatility
Dividend yield

2010
Grants
5
2.4%
27%
1.7%

2011
Grants
5
2.3%
27%
1.3%

2012
Grants
6
1.8%
23%
1.5%

Options exercised under our stock option plans are issued from our treasury shares. As of March 31, 2012, we have 6,492 shares that may
yet be purchased under repurchase programs authorized by the Board of Directors. We purchased 445 shares at a cost of $6,193 during fiscal
2011 and 625 shares at a cost of $8,394 during fiscal 2012 which are held as treasury stock and available for general corporate purposes.

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11. Commitments and Contingencies:

We are a lessee under long-term operating leases primarily for office space, plant and equipment. Future minimum lease

commitments under non-cancelable operating leases as of March 31, 2012, were as follows:

Years ended March 31,
2013
2014
2015
2016
2017
Thereafter

6,041
5,005
4,231
3,979
3,990
2,482

Rental expense for operating leases was $7,412, $6,922 and $7,663 for the fiscal years ended March 31, 2010, 2011 and 2012, respectively.

From time to time we enter into delivery contracts with selected suppliers for certain metals used in our production processes. The
delivery contracts represent routine purchase orders for delivery within three months and payment is due upon receipt. As of March 31,
2012, we had no significant outstanding purchase commitments.

To resolve our liability at the sites at which the Company has been named a PRP, we have entered into various administrative orders
and consent decrees with federal and state regulatory agencies governing the timing and nature of investigation and remediation. As is
customary, the orders and decrees regarding sites where the PRPs are not themselves implementing the chosen remedy contain provisions
allowing the EPA to reopen the agreement and seek additional amounts from settling PRPs in the event that certain contingencies occur,
such as the discovery of significant new information about site conditions.

In 1991, in connection with a consent decree, we paid $66 million, plus interest, toward the environmental conditions at, and
remediation of, New Bedford Harbor in the Commonwealth of Massachusetts (“the harbor”) in settlement with the United States and the
Commonwealth of Massachusetts, subject to reopener provisions, including a reopener if certain remediation costs for the site exceed
$130.5 million. In 2007, we received notification from the EPA and the Department of Justice indicating that the United States was
preparing to exercise the cost reopener. In March 2011, the EPA issued the Fourth Explanation of Significant Differences (“ESD #4”)
that explains the planned changes to the existing remedial action plan for the harbor to include the use of a confined aquatic disposal
(“CAD”) cell, along with interim off-site transportation and disposal of certain contaminated dredge spoils, and the continued use of
long-term on-site storage for other contaminated dredge spoils. ESD #4 provides future cost estimates under the new remedial action
plan (in addition to costs incurred to date) ranging from $362 million to $401 million, net present value, based on certain criteria included
in the ESD #4. The EPA has indicated that remediation costs through December 31, 2011 were approximately $456 million, not all of
which are subject to the reopener provisions.

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During fiscal 2010, AVX was named as a third party defendant in a case filed in Massachusetts Superior Court captioned DaRosa v.
City of New Bedford. This case relates to a former disposal site in the City of New Bedford located at Parker Street. The City asserts
that AVX, among others, contributed to that site. We intend to defend vigorously the claims that have been asserted in these lawsuits. In
light of the foregoing, we are not able to estimate any amount of loss or range of loss. No accrual for costs has been recorded and the
potential impact of this case on our financial position, results of operations, and cash flows cannot be determined at this time.

We are involved in disputes, warranty, and legal proceedings arising in the normal course of business. While we cannot predict the
outcome of these disputes and proceedings, management believes, based upon a review with legal counsel, that none of these proceedings
will have a material impact on our financial position, results of operations, or cash flows.

We have an employment agreement with our Chief Executive Officer which provides for salary continuance equivalent to his most

recent base salary as a full-time employee during a two-year advisory period upon retirement.

12. Derivative Financial Instruments:

We are exposed to foreign currency exchange rate fluctuations in the normal course of business. We use derivative instruments
(forward contracts) to hedge certain foreign currency exposures as part of the risk management strategy. The objective is to offset gains
and losses resulting from these exposures with gains and losses on the forward contracts used to hedge them, thereby reducing volatility
of earnings or protecting fair values of assets and liabilities. We do not enter into any trading or speculative positions with regard to
derivative instruments.

We primarily use forward contracts, with maturities less than four months, designated as cash flow hedges to protect against the
foreign currency exchange rate risks inherent in our forecasted transactions related to purchase commitments and sales, denominated in
various currencies. These derivative instruments are designated and qualify as cash flow hedges.

The effectiveness of the cash flow hedges is determined by comparing the cumulative change in the fair value of the hedge contract
with the cumulative change in the fair value of the hedged transaction, both of which are based on forward rates. The effective portion of
the gain or loss on these cash flow hedges is initially recorded in accumulated other comprehensive income as a separate component of

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stockholders' equity. Once the hedged transaction is recognized, the gain or loss is recognized in our statement of operations. At March
31, 2010, 2011 and 2012, respectively, the Company had the following forward contracts that were entered into to hedge against the
volatility of foreign currency exchange rates for certain forecasted sales and purchases.

March 31, 2010

Fair Value of Derivative Instruments

Asset Derivatives

Liability Derivatives

Balance
Sheet
Caption

Fair
Value

Balance
Sheet
Caption

Fair
Value

Foreign exchange contracts

Prepaid and other

856

Accrued expenses

1,795

March 31, 2011

Fair Value of Derivative Instruments

Asset Derivatives

Liability Derivatives

Balance
Sheet
Caption

Fair
Value

Balance
Sheet
Caption

Fair
Value

Foreign exchange contracts

Prepaid and other

876

Accrued expenses

1,409

March 31, 2012

Fair Value of Derivative Instruments

Asset Derivatives

Liability Derivatives

Balance
Sheet
Caption

Fair
Value

Balance
Sheet
Caption

Fair
Value

Foreign exchange contracts

Prepaid and other

1,646

Accrued expenses

2,992

For these derivatives designated as hedging instruments, during fiscal 2010, 2011 and 2012, net pretax gains of $3,555, $6,267 and net loss
of $527, respectively, were recognized in other comprehensive income. In addition, during fiscal 2010, 2011 and 2012 net pretax gains of $3,914,
$7,740 and $502, respectively, were reclassified from accumulated other comprehensive income into cost of sales (for hedging purchases), and
net pre tax losses of $521, $2,034 and net gain of $95, respectively, were reclassified from accumulated other comprehensive income into sales
(for hedging sales) in the accompanying Statement of Operations. During fiscal 2010, 2011 or 2012, we discontinued an immaterial amount of
cash flow hedges for which it was probable that a forecasted transaction would not occur.

Derivatives not designated as hedging instruments consist primarily of forwards used to hedge foreign currency balance sheet exposures
representing hedging instruments used to offset foreign currency changes in the fair values of the underlying assets and liabilities. The gains and
losses on these foreign currency forward contracts are recognized in other income and expense in the same period as the remeasurement gain
and loss of the related foreign currency denominated assets and liabilities and thus naturally offset these gains and losses. At March 31, 2010,
2011 and 2012, we had the following forward contracts that were entered into to hedge against these exposures.

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March 31, 2010

Fair Value of Derivative Instruments

Asset Derivatives

Liability Derivatives

Balance
Sheet
Caption

Fair
Value

Balance
Sheet
Caption

Fair
Value

Foreign exchange contracts

Prepaid and other

Accrued expenses

March 31, 2011

Fair Value of Derivative Instruments

Asset Derivatives

Liability Derivatives

Balance
Sheet
Caption

Fair
Value

Balance
Sheet
Caption

Fair
Value

Foreign exchange contracts

Prepaid and other

662

Accrued expenses

443

March 31, 2012

Fair Value of Derivative Instruments

Asset Derivatives

Liability Derivatives

Balance
Sheet
Caption

Fair
Value

Balance
Sheet
Caption

Fair
Value

Foreign exchange contracts

Prepaid and other

114

Accrued expenses

549

For these derivatives not designated as hedging instruments during fiscal 2010, 2011 and 2012, gains of $408, $2,757 and $2,608,
respectively, were recognized in other expense which substantially offset the approximately $1,100, $4,240 and $4,289 in exchange losses,
respectively, that were recognized in other income in the accompanying Statement of Operations.

At March 31, 2010, 2011 and 2012, we had outstanding foreign exchange contracts with notional amounts totaling $219,687,

$274,083 and $228,206, respectively, denominated primarily in euros, Czech korunas, British pounds and Japanese yen.

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13. Transactions With Affiliate:

Our business includes certain transactions with our parent company, Kyocera, that are governed by agreements between the parties
that define the sales terms, including pricing for the products. The nature and amounts of transactions with Kyocera are included in the
table below.

2010

Years Ended March 31,
2011

2012

Sales:

Product and equipment sales to affiliates
Subcontracting activities

Purchases:

Purchases of resale inventories, raw materials, supplies,
equipment and services

Other:

Dividends paid

26,985
-

28,077
-

8,501
-

287,531

19,488

505,976

23,142

431,181

34,104

The revenues from products sold to Kyocera decreased in fiscal 2012 when compared to previous years as a result of Kyocera

procuring components for its mobile handset division directly in Asia from other Kyocera affiliates.

In previous years, Kyocera incurred additional taxes imposed by the Japan tax authorities related to earnings of some of its overseas
affiliates, including AVX. We assisted Kyocera in working with various international tax authorities to obtain relief from this effective
double taxation. During fiscal 2011, we assisted Kyocera in arranging for approximately $6.0 million of tax refunds from a country where
we operate. We incurred no cost and received no benefit from the assistance we provided to Kyocera.

14. Segment and Geographic Information:

Our operating segments are based on the types of products from which we generate revenues. We are organized into a product line
organization with five main product groups and three reportable segments: Passive Components, KED Resale and Interconnect. The product
groups of Ceramic, Advanced and Tantalum have been aggregated into the Passive Component reportable segment in accordance with the
aggregation criteria and quantitative thresholds. The aggregation criteria consist of similar economic characteristics, products and services,
production processes, customer classes and distribution channels. The Passive Components segment consists primarily of surface mount and
leaded ceramic capacitors, RF thick and thin film components, tantalum capacitors, film capacitors, ceramic and film power capacitors, super
capacitors, EMI filters, thick and thin film packages, varistors, thermistors, inductors and resistive products. The KED Resale segment consists
primarily of ceramic capacitors, frequency control devices, SAW devices, sensor products, RF modules, actuators, acoustic devices and
connectors produced by Kyocera, and resold by AVX. The Interconnect segment consists primarily of Elco automotive, telecom and memory
connectors manufactured by AVX. Sales and operating results from these reportable segments are shown in the tables below. In addition, we
have a corporate administration group consisting of finance and administrative activities and a separate Research and Development group.

We evaluate performance of our segments based upon sales and operating profit. There are no intersegment revenues. We allocate the
costs of shared resources between segments based on each segment's usage of the shared resources. Cash, accounts receivable, investments in
securities and certain other assets, which are centrally managed, are not readily allocable to operating segments.

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The tables below present information about reported segments for the years ended March 31,

Sales revenue (in thousands)
Ceramic Components
Tantalum Components
Advanced Components

Total Passive Components

KDP and KKC Resale
KEC Resale Connectors
Total KED Resale

Interconnect

Total Revenue

Operating profit:

Passive components
KED Resale
Interconnect
Research & development
Corporate administration

Total

Depreciation and amortization:

Passive components
KED Resale
Interconnect
Research & development
Corporate administration

Total

Assets:

Passive components
KED Resale
Interconnect
Research & development
Cash, A/R and S/T and L/T investments
Goodwill - Passive components
Goodwill - Connectors
Corporate administration

Total

Capital expenditures:

Passive components
KED Resale
Interconnect
Research & development
Corporate administration

Total

2010
155,059
280,991
369,811
805,861
338,701
73,973
412,674
86,431
1,304,966

2010

175,790
26,453
9,167
(6,831)
(33,895)
170,684

2010

47,774
453
4,397
761
4,788
58,173

2010

525,631
38,264
39,512
5,136
1,196,777
152,124
10,277
83,771
2,051,492

2010

26,986
98
1,669
89
46
28,888

Years Ended March 31,
2011
211,998
419,792
410,110
1,041,900
440,050
66,088
506,138
105,138
1,653,176

2011

333,901
29,010
19,525
(7,392)
(50,120)
324,924

2011

41,008
433
3,524
541
2,113
47,619

2011

703,602
63,706
44,315
5,337
1,239,426
152,255
10,277
100,564
2,319,482

2011

24,301
64
1,783
1,176
146
27,470

2012
179,984
393,468
378,843
952,295
410,419
54,765
465,184
127,775
1,545,254

2012

275,947
15,669
25,081
(7,716)
(133,430)
175,551

2012

35,616
332
4,072
1,208
5,662
46,890

2012

760,121
47,506
55,001
6,493
1,259,582
152,429
10,277
176,603
2,468,012

2012

29,664
13
11,761
803
6,960
49,201

No single customer has accounted for more than 10% of net sales or accounts receivable in the fiscal years ended March 31,

2010, 2011 or 2012.

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The following geographic data is based upon net sales generated by operations located within that geographic area and long lived

assets based upon physical location.

Net sales:

Americas
Europe
Asia
Total

Property, plant and equipment, net:

Americas
Europe
Asia
Total

2010

403,348
309,486
592,132
1,304,966

122,312
92,924
31,793
247,029

Years Ended March 31,
2011

516,243
405,231
731,702
1,653,176

107,226
97,763
30,670
235,659

2012

429,079
422,613
693,562
1,545,254

107,378
100,255
28,855
236,488

15. Summary of Quarterly Financial Information (Unaudited):

Quarterly financial information for the fiscal years ended March 31, 2011 and 2012 is as follows:

First Quarter

Second Quarter

Net sales
Gross profit
Net income
Basic earnings per share
Diluted earnings per share

2011
396,537
102,652
52,300
0.31
0.31

2012
436,422
124,659
67,599
0.40
0.40

Third Quarter

2011
405,862
114,597
60,552
0.36
0.36

2012
340,865
78,332
36,871
0.22
0.22

2011
430,639
122,372
67,891
0.40
0.40

2012
404,767
110,818
61,919
0.36
0.36

Fourth Quarter

2011
420,138
117,765
63,260
0.37
0.37

2012
363,200
78,150
(13,584)
(0.08)
(0.08)

Results for the quarter ended March 31, 2011 include environmental remediation and legal costs of $8,575 and $2,236 one-time
income tax benefit attributable to an increase in available U.S. foreign tax credits relating to one of our European operations.

Results for the three and twelve months ended March 31, 2012 include $11,528 of one-time income tax benefits primarily
attributable to the utilization of U.S. foreign tax credits relating to the Company’s South American and European operations and the
reversal of certain state income tax valuation allowances.

Results for the quarter ended March 31, 2012 include environmental charges of $100,000 related to the New Bedford harbor site, as
discussed in Note 11.

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16. Subsequent Events:

On April 18, 2012, the EPA issued to the Company a Unilateral Administrative Order (“UAO”) directing the Company to perform
the Remedial Design, the Remedial Action and Operation and Maintenance for the harbor clean-up. The effective date set forth in the
UAO is June 18, 2012, the Company has until June 25, 2012 to inform the EPA if it intends to comply with the UAO.

On May 8, 2012, our Board of Directors declared a $0.075 dividend per share of common stock for the quarter ended March 31,

2012. The dividend will be paid to stockholders of record on June 1, 2012 and will be disbursed on June 15, 2012.

- 68 -

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of AVX Corporation

In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of operations, stockholders'
equity and cash flows present fairly, in all material respects, the financial position of AVX Corporation and its subsidiaries at March
31, 2012 and March 31, 2011, and the results of their operations and their cash flows for each of the three years in the period ended
March 31, 2012 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion,
the Company maintained, in all material respects, effective internal control over financial reporting as of March 31, 2012, based on
criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO). The Company's management is responsible for these financial statements, for maintaining effective internal
control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in
Management's Report on Internal Control over Financial Reporting. Our responsibility is to express opinions on these financial
statements and on the Company's internal control over financial reporting based on our integrated audits. We conducted our audits
in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material
misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of
the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall
financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of
internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and
operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as
we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted
accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain
to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of
the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being
made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance
regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a
material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because
of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

PricewaterhouseCoopers LLP
Atlanta, Georgia
May 24, 2012

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