AVX Corporation
Annual Report 2013

Plain-text annual report

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549 FORM 10-K[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended March 31, 2013 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from _________ to__________ Commission File Number: 1-7201(Exact name of registrant as specified in its charter) Delaware 33‑0379007(State or other jurisdiction of incorporation or organization) (I.R.S. employer identification number) 1 AVX Boulevard Fountain Inn, South Carolina 29644(Address of principal executive offices) (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 className of each exchange on which registeredCommon Stock, $.01 par value per shareNew 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 SecuritiesExchange 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 InteractiveData File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for suchshorter 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 becontained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III ofthis Form 10‑K or any amendment to this Form 10‑K. [ ] Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer or a smallerreporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of theExchange Act.Large accelerated filer[ ] Accelerated filer[X]Non-accelerated filer[ ](Do not check if a smaller reporting company)Smaller reporting company[ ]Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X] Based on the closing sales price of $9.59 on September 30, 2012, the last business day of the registrant's most recently completed secondfiscal quarter, the aggregate market value of the common stock held by non‑affiliates of the registrant as of that date was$453,333,886. As of May 20, 2013, there were 168,553,221 shares of the registrant’s common stock, par value $.01 per share, outstanding. DOCUMENTS INCORPORATED BY REFERENCEPortions of the registrant’s definitive proxy statement for the 2013 Annual Meeting of Stockholders, which will be filed within 120 daysof March 31, 2013, are incorporated by reference into Part III. EXPLANATORY NOTEThis Annual Report on Form 10-K/A constitutes Amendment No. 1 (“the Amendment”) to AVX Corporation’s Annual Report on Form10-K for the year ended March 31, 2013, which was originally filed with the Securities and Exchange Commission on May 22, 2013 (“theOriginal Filing”). This Amendment is being filed solely to include the interactive data file in the filing package, which was omitted fromthe Original Filing. Except as described above, no other changes have been made to the Original Filing. For the convenience of the reader, this Form 10-K/Asets forth the Original Filing in its entirety.2 TABLE OF CONTENTS Part I PageItem 1.Business4Item 1A.Risk Factors12Item 1B.Unresolved Staff Comments 19Item 2.Properties 19Item 3.Legal Proceedings 20Item 4.Mine Safety Disclosures 20Part II Item 5.Market for the Registrant's Common Equity, Related Stockholder Matters and IssuerPurchases of Equity Securities20 Item 6.Selected Financial Data24 Item 7.Management's Discussion and Analysis of Financial Condition and Results of Operations 25 Item 7A.Quantitative and Qualitative Disclosures About Market Risk36 Item 8.Financial Statements and Supplementary Data38 Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure38 Item 9A.Controls and Procedures 39 Item 9B.Other Information40 Part III Item 10.Directors, Executive Officers and Corporate Governance40 Item 11.Executive Compensation 40 Item 12.Security Ownership of Certain Beneficial Owners and Management and Related StockholderMatters40 Item 13.Certain Relationships and Related Transactions, and Director Independence40 Item 14.Principal Accounting Fees and Services 40 Part IV Item 15.Exhibits and Financial Statement Schedules40 Signatures 44 Cautionary Statement Pursuant to Safe Harbor Provisions of the Private SecuritiesLitigation Reform Act of 1995The following discussion and analysis should be read in conjunction with the consolidated financial statements, including the notesthereto, appearing elsewhere herein. Statements in this Annual Report on Form 10-K that reflect projections or expectations of futurefinancial 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 Resultsof Operations”, and “Quantitative and Qualitative Disclosures about Market Risk”, or relating to the Company’s outlook for overallvolume 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 of1933, 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 intendedto identify such forward-looking statements. No assurance can be given that actual results or events will not differ materially fromthose projected, estimated, assumed, or anticipated in any such forward-looking statements. Important factors that could result in suchdifferences, in addition to the other factors noted with such forward-looking statements and in “Risk Factors” in this Annual Report onForm 10-K, include: general economic conditions in the Company's market, including inflation, recession, interest rates, and other economicfactors; casualty to or other disruption of the Company's facilities and equipment; potential environmental liabilities; and other factorsthat generally affect the business of manufacturing and supplying electronic components and related products. Forward lookingstatements are intended to speak only as of the date they are made and AVX Corporation does not undertake to update or revise anyforward-looking statement contained in this Annual Report on Form 10-K to reflect new events or circumstances unless and to the extentrequired by applicable law.3 PART I Item 1.Business General AVX Corporation (together with its consolidated subsidiaries, “AVX” or the “Company”) is a leading worldwide manufacturer andsupplier of a broad line of passive electronic components and related products. Virtually all types of electronic devices use our passivecomponent products to store, filter, or regulate electric energy. Our passive electronic component products include ceramic and tantalum capacitors, film capacitors, varistors, filters, and othercomponents 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 alsomanufacture and sell electronic connectors and inter-connect systems and distribute and sell certain electronic connectors manufactured byKyocera. We are organized by product line with five main product groups. Our reportable segments are based on the types of products fromwhich 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 aggregatedinto the Passive Components reportable segment. Segment revenue and profit information is presented in Note 15 to the consolidatedfinancial statements. The Passive Components segment consists primarily of surface mount and leaded ceramic capacitors, RF thick andthin film components, surface mount and leaded tantalum capacitors, surface mount and leaded film capacitors, ceramic and film powercapacitors, super capacitors, EMI filters (bolt in and surface mount), thick and thin film packages of multiple passive integratedcomponents, 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 Kyoceraand resold by AVX. The Interconnect segment consists primarily of AVX Interconnect (formerly Elco) automotive, telecom, and memoryconnectors manufactured by AVX. In addition, we have a corporate administration group consisting of finance and administrativeactivities. Our customers are multi-national original equipment manufacturers, or OEMs, independent electronic component distributors, andelectronic manufacturing service providers, or EMSs. We market our products through our own direct sales force and independentmanufacturers' representatives, based upon market characteristics and demands. We coordinate our sales, marketing, and manufacturingorganizations 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, andconsumer electronics. Our principal strategic advantages include: Creating Technology Leadership. We have research and development locations in the United States, United Kingdom, CzechRepublic, France, Israel, and Japan. We developed numerous new products and product extensions during fiscal 2013 and won severalawards that recognize our technology leadership. These new products add to the broad product line we offer to our customers. Due to ourbroad product offering, none of our products individually represent a material portion of our revenues. Our scientists are working todevelop product solutions to the challenges facing our customers as consumers and business demand more advanced electronic solutionsto manage their everyday lives and businesses. Our engineers are continually working to enhance our manufacturing processes toimprove 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 toour customers’ design and delivery requirements make us the provider of choice for our multi-national customer base. We differentiateourselves 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 broadarray allows our customers to streamline their purchasing and supply organization. 4 Maintaining the Lowest Cost, Highest Quality Manufacturing Organization. We have invested approximately $120 million over thepast 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 Interconnect devices. In order to continually reduce the cost of production, our strategyhas included the transfer to and expansion of manufacturing operations in countries such as China, El Salvador, Malaysia, Mexico, andthe Czech Republic. Globally Coordinating our Marketing, Distribution, and Manufacturing Facilities. We believe that our global presence is animportant competitive advantage as it allows us to provide quality products on a timely basis to our multi-national customers. Weprovide enhanced services and responsiveness to our customers by maintaining significant manufacturing operations in locations wherewe market the majority of our products. Our 21 manufacturing facilities are located in 11 different countries around the world. As ourcustomers 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 allof their passive component needs. Passive components do not require power to operate. These components adjust and regulate voltageand current, store energy, and filter frequencies. Sales of Passive Components represented approximately 60% of our net sales in fiscal2013. KDP and KCD Resale represented approximately 27%, and Interconnect products, including KEC Resale Connectors, representedapproximately 13% of our net sales in fiscal 2013. The table below presents revenues for fiscal 2011, 2012 and 2013 by productgroup. Financial information concerning our Passive Components, KED Resale, and Interconnect segments is set forth in Note 15 tothe consolidated financial statements elsewhere herein. Years Ended March 31,Sales revenue (in thousands) 2011 2012 2013Ceramic Components $211,998 $179,984 $173,315 Tantalum Components 419,792 393,468 330,209 Advanced Components 410,110 378,843 346,543 Total Passive Components 1,041,900 952,295 850,067 KDP and KCD Resale 440,050 410,419 377,707 KEC Resale Connectors 66,088 54,765 61,809 Total KED Resale 506,138 465,184 439,516 Interconnect 105,138 127,775 124,817 Total Revenue $1,653,176 $1,545,254 $1,414,400 Passive Components We manufacture a full line of multi-layered ceramic and solid tantalum capacitors in many different sizes and configurations. Ourstrategic focus on the growing use of passive components is reflected in our investment of approximately $83 million in facilities andequipment used to manufacture passive components during the past three fiscal years. We also added two passive componentmanufacturing sites with the recent acquisition of the Tantalum Components division of Nichicon Corporation (“Nichicon Tantalum”) inFebruary, 2013 for $86 million. We believe that sales of passive components will continue to be among the most rapidly growing in theworldwide capacitor market because technological advances have been constantly expanding the number and type of applications forthese products. Tantalum and Ceramic components are commonly used in conjunction with integrated circuits and are best suited for applicationsrequiring 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 mediumcapacitance values. The net sales of tantalum and ceramic capacitors accounted for approximately 59% of our passive component netsales in fiscal 2013. 5 We also offer a line of advanced passive component products to fill the special needs of our customers. Our family of passivecomponents also includes film capacitors, high energy/voltage power capacitors, and varistors. Our advanced products engineers workwith some customers’ in-house technical staffs to design, produce, and manufacture customized products to meet the specifications ofparticular applications. The manufacture of custom products permits us, through our research and development activities, to maketechnological advances, provide customers with design solutions to fit their needs, gain a marketing inroad with the customer withrespect to our complete product line, and, in some cases, develop products that can be sold to additional customers in the future. Sales ofadvanced products accounted for approximately 41% of passive component net sales in fiscal 2013. 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 ofcertain 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 KDP andKCD 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 accountedfor approximately 31% of net sales in fiscal 2013. Interconnect We manufacture and sell high-quality electronic connectors and interconnect systems for use in the automotive, telecommunications,information technology hardware, 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 theelectronics market for AVX Interconnect products is the automotive market, with applications throughout a vehicle, including enginecontrol, transmission control, audio, brakes, and the quickly evolving stability and safety control system. We produce fine pitchconnectors used in portable devices such as smart phones, other cell phones, notebook computers, GPS, and other hand held devices. Inaddition, we offer specialty connectors designed to address customer specific applications across a wide range of products and endmarkets, including the expanding LCD market. We have invested approximately $26 million in facilities and equipment over the pastthree years, as we continue to focus on new product development and enhancement of production capabilities for our Interconnectbusiness. Sales of Interconnect products, including KEC Resale connector products, accounted for approximately 13% of net sales infiscal 2013. Approximately 33% of combined Interconnect and KEC Resale Connector net sales in fiscal 2013 consisted of connectorsmanufactured 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 serveour customers we frequently designate teams consisting of marketing, field application engineering, research and development, andmanufacturing personnel to work with customers to design and manufacture products to suit their specific requirements. Costs related tothese activities are expensed as incurred. Approximately 28%, 25%, and 47% of our net sales for fiscal 2013 were to our customers in the Americas, Europe, and Asia,respectively. Financial information for these geographic regions is set forth in Note 15 to our consolidated financial statementselsewhere 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 sellour products throughout the world. We have regional sales and design application personnel in strategic locations to provide technicaland sales support for independent manufacturers’ representatives and independent electronic component distributors. We believe thatthis combination of sales channels provides a high level of market penetration and efficient coverage of our customers on a cost-effective basis. 6 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 salesopportunities, our engineering and sales teams maintain close relationships with OEM, EMS, and electronic component distributorcustomers. Our largest customers may vary from year to year, and no customer has a long-term commitment to purchase our products. During the year ended March 31, 2013, one customer comprised 13% of the Company’s sales for the period. No customer accounted for more than 10% of sales during the years ended March 31, 2011 or 2012. Furthermore, no single customer accounted for more than 10% of the Company’s accounts receivable as of March 31, 2011, 2012, or2013. Because we are a supplier to several significant manufacturers in the broad based electronic devices industries and because of thecyclical 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 ElectronicSupply 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. Thesales terms under non-exclusive agreements with independent electronic component distributors may vary by distributor, and bygeographic 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 aship and debit program under which pricing adjustments may be granted by us to assist distributors in meeting competitive prices in themarketplace on sales to their end customers. Ship and debit programs require a request from the distributor for a pricing adjustment for aspecific part for a sale to the distributor’s end customer from the distributor’s stock. In addition, certain agreements with distributorsmay include special incentive discounts based on amount of product ordered or shipped. Our agreements with independent electroniccomponent distributors generally also require that we repurchase qualified inventory from the distributor in the event that we terminatethe distributor agreement or discontinue a product offering. We had a backlog of orders of approximately $350 million at March 31, 2011, $236 million at March 31, 2012 and $247 million atMarch 31, 2013. Firm orders, primarily with delivery dates within six months of order placement, are included in backlog. Many of ourcustomers encounter uncertain and changing demand for their products. Customer provided forecasts of product usage and anticipatedusage of inventory at consignment locations are not included in backlog. If demand falls below customers’ forecasts, or if customers donot effectively control their inventory, they may cancel or reschedule their shipments that are included in our backlog, in many instanceswithout any penalty. Backlog fluctuates from year to year due, in part, to changes in customer inventory levels, changes to consignmentinventory arrangements, order patterns, and product delivery lead times in the industry. Accordingly, the backlog outstanding at any time isnot necessarily indicative of the level of business to be expected in any ensuing period since many orders are placed and delivered withinthe same period. In addition, the increased use of vendor managed inventory and similar consignment type arrangements tend to limit thesignificance of backlog as future use of such inventory is 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 manufacturingprocesses have been designed and developed by our own engineers and scientists. Our research and development activities are carriedout at facilities located in the United States, United Kingdom, Czech Republic, France, Israel, and Japan. Our research and development effort and our operational level engineering effort place a priority on the design and development ofinnovative products and manufacturing processes as well as engineering advances in existing product lines and manufacturingoperations. Other areas of emphasis include material synthesis and the integration of passive components for applications requiringreduced size and lower manufacturing costs associated with board assembly. Research, development, and engineering expenditures wereapproximately $24 million, $26 million, and $30 million during fiscal 2011, 2012, and 2013, respectively. The level of such spending canfluctuate 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 applicationspending, although patents are not in the aggregate material to the successful operation of our business. For discussion regarding ourlicense arrangement with Kyocera, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations –Relationship with Kyocera and Related Transactions.” 7 Raw Materials Although most materials incorporated in our products are available from a number of sources, certain materials (particularlytantalum from Australia and Brazil) are available only from a relatively limited number of suppliers. For the ten years prior to ourparticipation in “Solutions for Hope”, we 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 chaininvestigations relating to tantalum and are a participant in “Solutions for Hope”, which is a program designed to ensure that tantalumsourced from the DRC does not derive from conflict areas. “Solutions for Hope” incorporates the independently-validated Conflict-FreeSmelter program. As a result, AVX is the first in its industry to validate a “closed tantalum pipe” process, assuring all tantalumproducts contain only conflict-free tantalum in accordance with the principles of the Dodd-Frank legislation and the current Organisationfor Economic Cooperation and Development (“OECD”) guidelines. Since December 2011, AVX has only sourced tantalum powder and wire used in its tantalum capacitors from smelters that arecompliant with the EICC/GeSI conflict-free smelter program. In 2013, AVX began using Validated Conflict-Free Tantalum, which comesfrom verified sources in the DRC and surrounding countries. Our participation in “Solutions for Hope” is intended to affirm our commitment to supply conflict-free minerals to our customers andto fully comply with the OECD guidelines and United States Securities and Exchange Commission (“SEC”) regulations. Some of ourmajor OEM customers and automotive suppliers have joined us in the “Solutions for Hope” project. 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 fluctuationand many have risen significantly during the past few years. In some cases, increases in the cost of raw materials may be offset byselling 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 themanufacture of tantalum capacitor products. These materials are purchased from suppliers in various parts of the world at prices thatare subject to periodic adjustment and variations in the market. The tantalum required to manufacture our products has generally beenavailable in sufficient quantity. The limited number of tantalum material suppliers that process tantalum ore into capacitor gradetantalum powder has led to higher prices during periods of increased demand and/or limited mining output. Competition Markets for our products are highly competitive. We encounter aggressive and able competition in our various product lines fromboth domestic and foreign manufacturers. Competitive factors in the markets include product quality and reliability, breadth of productline, customer service, technological innovation, global production presence, timely delivery, and price. We believe we are competitivelypositioned on each of these factors. The breadth of our product offering enables us to strengthen our market position by providingcustomers 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, KEMETCorporation, Yageo Corporation, Taiyo Yuden Co. Ltd., Samsung Electro-Mechanics, and Vishay Intertechnology, Inc. Our majorcompetitors for certain electronic connector products are Tyco Electronics, Amphenol Corporation, Molex Incorporated, FCI Electronics,and Erni Electronics. There are many other companies that produce products in the markets in which we compete. Employees As of March 31, 2013, we employed approximately 10,700 full-time employees. Approximately 1,500 of these employees are employedin the United States. Of the employees located in the United States, approximately 300 are covered by collective-bargainingarrangements. In addition, some foreign employees are members of trade and government-affiliated unions. Our relationship with ouremployee union groups is generally good. However, no assurance can be given that, in response to changing economic conditions and theCompany’s actions, labor unrest or strikes will not occur. 8 Environmental Matters We are subject to federal, state, and local laws and regulations concerning the environment in the United States and to theenvironmental laws and regulations of the other countries in which we operate. These regulations include limitations on discharges intoair and water; remediation requirements; chemical use and handling restrictions; pollution control requirements; waste minimizationconsiderations; and hazardous materials transportation, treatment, and disposal restrictions. If we fail to comply with any of theapplicable 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 pollutionabatement or remediation equipment, to modify product designs, or to incur expenses to comply with environmental regulations. Anyfailure to control the use, disposal, or storage, or adequately restrict the discharge of hazardous substances could subject us to futureliabilities and could have a material adverse effect on our business. Based on our periodic reviews of the operating policies andpractices at all of our facilities, we believe that our operations are currently in substantial compliance, in all material respects, with allapplicable environmental laws and regulations and that the cost of continuing compliance will not have a material effect on our financialcondition or results of operations. We have been identified by the United States Environmental Protection Agency (“EPA”), state governmental agencies, or otherprivate parties as a potentially responsible party (“PRP”) under the Comprehensive Environmental Response, Compensation andLiability Act (“CERCLA”) or equivalent state or local laws for clean-up and response costs associated with certain sites at whichremediation is required with respect to prior contamination. Because CERCLA has generally been construed to authorize joint andseveral liability, the EPA could seek to recover all clean-up costs from any one of the PRPs at a site despite the involvement of otherPRPs. At certain sites, financially responsible PRPs other than AVX also are, or have been, involved in site investigation and clean-upactivities. 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 ordersand consent decrees with federal and state regulatory agencies governing the timing and nature of investigation and remediation As iscustomary, the orders and decrees regarding sites where the PRPs are not themselves implementing the chosen remedy contain provisionsallowing 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. 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 toreopener provisions, including a reopener if certain remediation costs for the site exceed $130.5 million. On April 18, 2012, the EPA issued to the Company a Unilateral Administrative Order (“UAO”) directing the Company to performthe Remedial Design, the Remedial Action, and Operation and Maintenance, as set forth in the UAO, for the harbor cleanup, pursuant tothe reopener provisions. The effective date set forth in the UAO was June 18, 2012 (and subsequently extended to July 1, 2013),pursuant to which the Company had to inform the EPA if it intended to comply with the UAO. On October 10, 2012, the EPA, the United States, and the Commonwealth of Massachusetts and AVX announced that they hadreached a financial settlement with respect to the EPA’s ongoing clean-up of the harbor. That agreement is contained in a SupplementalConsent Decree that modifies certain provisions of the 1992 Consent Decree, including elimination of the governments’ right to invokethe clean-up reopener provisions in the future. In accordance with the settlement, AVX will pay $366.3 million, plus interest computedfrom August 1, 2012, in three installments over a two-year period for use by the EPA and the Commonwealth to complete the clean-up ofthe harbor, and the EPA will withdraw the UAO. The settlement requires approval by the United States District Court before becomingfinal. The timing of any such approval is uncertain. The Company has recorded a liability for the full amount of the proposedsettlement. There are two suits pending with respect to property adjacent to our Myrtle Beach, South Carolina factory claiming property valueshave been negatively impacted by alleged migration of certain pollutants from our property. On November 27, 2007, a suit was filed inthe South Carolina State Court by certain individuals as a class action. Another suit is a commercial suit filed on January 16, 2008 inSouth Carolina State Court. We intend to defend vigorously the claims that have been asserted in these two lawsuits. At this stage ofthe litigation, there has not been a determination as to responsible parties or the amount, if any, of damages. Based on our estimate ofpotential outcomes, we have accrued approximately $0.3 million with respect to these cases as of March 31, 2013. 9 We currently have remaining reserves of approximately $380.6 million at March 31, 2013 related to the various environmentalmatters discussed above. These reserves are classified in the consolidated balance sheets as $147.7 million in accrued expenses and$232.9 million in other non-current liabilities at March 31, 2013. The amount recorded for identified contingent liabilities is based onestimates. Amounts recorded are reviewed periodically and adjusted to reflect additional legal and technical information that becomesavailable. Also, uncertainties about the status of laws, regulations, regulatory actions, technology, and information related to individualsites 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 assertsthat 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 andcomprehensive income (loss), and cash flows cannot bedetermined at this time. AVX has received a demand for approximately $11.0 million from the City of New Bedford arising from contamination at the City’sNew Bedford Railyard. AVX believes it has meritorious defenses and intends to defend vigorously the demand. 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 thisdemand on our financial position, results of operations, comprehensive income (loss), and cash flows cannot be determined at this time. We also operate on other 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 suchenvironmental 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 asite and such costs can be reasonably estimated, we establish reserves or adjust our reserves for our projected share of these costs. Aseparate 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 continuallyexpend funds to ensure that our facilities comply with applicable environmental regulations. While we believe that we are in materialcompliance with applicable environmental laws, we cannot accurately predict future developments and do not necessarily have knowledgeof all past occurrences on sites that we currently occupy. More stringent environmental regulations may be enacted in the future and we cannotdetermine 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 environmentalcosts, 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 SEC under the Securities Exchange Actof 1934 (the “Exchange Act”). The public may read and copy any materials that we file with the SEC at the SEC’s Public ReferenceRoom at 100 F Street, NE, Washington, DC 20549. The public may obtain information on the operation of the Public Reference Roomby calling the SEC at 1-800-SEC-0330. Also, the SEC maintains an Internet website that contains reports, proxy and informationstatements, and other information regarding issuers, including us, that file electronically with the SEC. The public can obtain anydocuments 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 onForm 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 asreasonably practicable after the reports and amendments are electronically filed with or furnished to the SEC. To view the reports fromour website, go to “Corporate Information”, then “Investor Relations”, then “Financial Reports”. 10 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·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 appointed annually by our Board of Directors or, in some cases, appointed in accordance with our bylawsand each officer holds office until the next annual appointment of officers or until a successor has been duly appointed and qualified, oruntil the officer’s death or resignation, or until the officer has otherwise been removed in accordance with our bylaws. The followingtable provides certain information regarding the current executive officers of the Company: Name Age PositionJohn S. Gilbertson................. 69 Chief Executive OfficerJohn Lawing.............................. 62 President and Chief Operating OfficerPeter Collis................................ 61 Vice President of Tantalum ProductsKurt P. Cummings................. 57 Vice President, Chief Financial Officer, Treasurer andSecretaryCarl L. Eggerding.................... 63 Vice President, Chief Technology OfficerKathleen Kelly.......................... 59 Vice President of Human ResourcesJohn Sarvis............................... 63 Vice President of Ceramic ProductsKeith Thomas........................... 58 Vice President, President of Kyocera Electronic DevicesPeter Venuto............................. 60 Vice President of Sales John S. Gilbertson Chief Executive Officer since 2001. President from 1997 to 2013. Chief Operating Officer from 1994 until 2001 and a member of theBoard since 1990. Executive Vice President from 1992 to 1997, Senior Vice President from 1990 to 1992 and employed by the Companysince 1981. Managing Director of Kyocera since 1999. Director of Kyocera since 1995. Member of the Board of Directors of KyoceraInternational, Inc., a United States subsidiary of Kyocera, since 2001. John Lawing President and Chief Operating Officer since April 1, 2013. Vice President of Advanced Products from 2005 to April 2013. Divisional VicePresident 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. Peter Collis to 1998. Plant Manager of Lanskroun facility from 1996 to 1997. Employed by the Company since 1968. Kurt P. Cummings Vice President, Chief Financial Officer, and Treasurer since 2000. Secretary since 1997. Corporate Controller from 1992 to 2000. Prior to1992, Partner with Deloitte & Touche LLP. 11 Carl L. Eggerding Vice President, Chief Technology Officer since 2000. Vice President of Technology from 1997 to 2000. Employed by the Company since1996. Prior to 1996, employed by IBM as Director of Development for Organic Packaging Technology. Kathleen Kelly Vice President of Human Resources since 2010. Prior to the acquisition of American Technical Ceramics by the Company in 2007, servedas Vice President – Administration and as Corporate Secretary of American Technical Ceramics from November, 1989. John Sarvis Vice President of Ceramic Products since 2005. Divisional Vice President – Ceramics Division from 1998 to 2005. Prior to 1998, heldvarious Marketing and Operational positions. Employed by the Company since 1973. Keith Thomas Vice President since 2001. President of Kyocera Electronic Devices since 2004. Vice President of Kyocera Developed Products from 2001 to2004. Divisional Vice President of Kyocera Developed Products from 1992 until 2001. Employed by the Company since 1980. Peter Venuto Vice President of Sales since 2009. Vice President of North American and European Sales from 2004 to 2009. Vice President of NorthAmerican Sales from 2001 to 2004. Divisional Vice President of Strategic Accounts from 1998 until 2000. Director of Strategic Accountsfrom 1990 until 1997. Director of Business Development from 1987 until 1989. Employed by the Company since 1987. 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 oron our behalf, may contain “forward-looking” information within the meaning of the Private Securities Litigation Reform Act of1995. Such statements involve a number of risks, uncertainties, and contingencies, many of which are beyond our control, which maycause 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 andAnalysis 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 SEC could cause ouractual results to differ materially from those stated in forward-looking statements contained in this document and elsewhere. Below, wehave described our current view of certain important strategic risks. These risks are not presented in order of importance or probabilityof occurrence. Our reactions to material future developments as well as our competitors’ reactions to those developments will impact ourfuture results. 12 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 forour products, our unit costs, and our profitability. Most of our customers are in cyclical industries. Their requirements for passivecomponents and connectors fluctuate significantly as a result of changes in general economic conditions and other factors. Duringperiods of increasing demand they typically seek to increase their inventory of our products to avoid production bottlenecks. Whendemand for their products peaks and begins to decline, as has happened in the past, they tend to reduce or cancel orders for our productswhile they use up accumulated stocks. Business cycles vary somewhat in different geographical regions and customerindustries. Significant fluctuations in sales of our products impact our unit manufacturing costs and impact our profitability by makingit more difficult for us to predict our production, raw materials, and shipping needs. Changes in demand mix, needed technologies, andend-use markets may adversely affect our ability to match our products, inventory, and capacity to meet customer demand and couldadversely affect our operating results and financial condition. We are also vulnerable to general economic events or trends beyond ourcontrol, 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 costreductions 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 and logisticsoperations and to enhance operations in lower cost markets, we have incurred restructuring costs in the past and could incur restructuringcosts in the future in response to changes in global economic and market conditions. If we are unsuccessful in implementingrestructuring or other cost reduction plans, we may experience disruptions in our operations and incur higher ongoing costs, which mayadversely 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 tothese regions may entail considerable expense Our strategy is aimed at achieving significant production cost savings through the transfer to and expansion of manufacturingoperations in countries with lower productions costs, such as the Czech Republic, Malaysia, Mexico, China, and El Salvador. During thisprocess, we may experience under-utilization of certain plants and factories in higher-cost regions and capacity constraints in plants andfactories located in lower-cost regions. This under-utilization may result initially in production inefficiencies and higher costs. Thesecosts also include those associated with compensation in connection with work force reductions and plant closings in the higher-costregions, and start-up expenses, equipment relocation costs, manufacturing and construction delays, and increased depreciation costs inconnection with the initiation or expansion of production in lower-cost regions. In addition, as we implement transfers of certain of ouroperations, we may experience strikes or other types of unrest as a result of lay-offs or termination of our employees in higher-costcountries. Due to our global operations, we are subject to many laws governing international relations (including but not limited to the ForeignCorrupt Practices Act and the U.S. Export Administration Act), which prohibit improper payments to government officials and restrictwhere and how we can do business, what information or products we can supply to certain countries, and what information we canlaws, there is no guarantee that they will be sufficiently effective. If and when we acquire new businesses we may not be able toensure that the pre-existing controls and procedures meant to prevent violations of the rules and laws were effective and we may not beable 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 includelarge, diversified companies, some of which have substantial assets and financial resources, as well as medium to smallcompanies. There can be no assurance that additional competitors will not enter into our existing markets, nor can there be anyassurance that we will be able to compete successfully against existing or new competition. 13 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 isnonetheless typified by rapid changes in product designs and technological advantages allowing for better performance and/or lowercost. New applications are frequently found for existing technologies, and new technologies occasionally replace existing technologiesfor some applications or open up new business opportunities in other areas of application. Successful innovation is critical formaintaining profitability in the face of potential erosion of selling prices for existing products. To combat downward selling pricepressure for our products and to meet market requirements, we must continue to develop innovative products and productiontechniques. Sustaining and improving our profitability depends a great deal on our ability to develop new products quickly andsuccessfully to customer specifications. Non-customized commodity products are especially vulnerable to price pressure, but customizedproducts have also experienced price pressure in recent years. We have traditionally combated downward pricing trends in part byoffering products with new technologies or applications that offer our customers advantages over older products. We also seek tomaintain profitability by developing products to our customers’ specifications that are not readily available fromcompetitors. Developing and marketing these products requires start-up costs that may not be recouped if those new products orproduction techniques are not successful. There are numerous risks inherent in this process, including the risks that we will be unable toanticipate the direction of technological change or that we will be unable to develop and market new products and applications in a timelyfashion to satisfy customer demands. If this occurs, we could lose customers and experience adverse effects on our results ofoperations. 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 marketprices. Our results of operations may be adversely affected if we have difficulty obtaining these raw materials, our key suppliersexperience financial difficulties, the quality of available raw materials deteriorates, or there are significant price increases for these rawmaterials. For example, the prices for tantalum, platinum, silver, nickel, gold, copper, palladium, and other raw materials that we use inthe manufacture of our products are subject to fluctuation and have risen significantly in the past. Our inability to recover costs throughincreased sales prices could have an adverse impact on our results of operations. For periods in which the prices for these raw materialsrise, we may be unable to pass on the increased cost to our customers, which would result in decreased margins for the products in whichthey are used. For periods in which margins are declining, we may be required, as has occurred in the past, to write down our inventorycarrying 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 historicallyadversely affected our ability to increase production of products, they have historically resulted in higher raw material costs forus. There can be no assurance that any of these market shortages in the future would not adversely affect our ability to increaseproduction, 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, withoutlimitation, that sales can be negatively impacted on a short-term basis as a result of changes in distributor inventory levels; thesechanges may be unrelated to the purchasing trends by the end customer. In the past, we have gone through cycles of inventory correctionas distributors increase or decrease their supply chain inventories based upon their anticipated market needs and economic conditions. 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 thedelivery of products that we manufacture for them and placing purchase orders for lower volumes of products than previouslyanticipated. Many of the orders that comprise our backlog may be canceled by our customers without penalty. Our customers may, onoccasion, order components from multiple sources to ensure timely delivery when delivery lead times are particularly long. They may cancelorders when business is weak and inventories are excessive, a situation that we have experienced during periods of economicslowdown. Therefore, we cannot be certain that the amount of our backlog does not exceed the level of orders that will ultimately bedelivered. Our results of operations could be adversely impacted if customers cancel a material portion of orders in our backlog. 14 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 acquiredbusinesses 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, andother benefits from acquisitions; (3) risk that our markets do not evolve as anticipated and that the technologies acquired do not proveto be those needed to be successful in those markets; (4) potential loss of key employees of the acquired businesses; (5) risk ofdiverting the attention of senior management from our operations; (6) risks of entering new markets in which we have limitedexperience; (7) risks associated with integrating financial reporting and internal control systems; (8) difficulties in expanding informationtechnology systems and other business processes to accommodate the acquired businesses; and (9) future impairments of goodwill andother 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 airemissions; wastewater discharges; the handling, disposal, and remediation of hazardous substances, wastes, and certain chemicals usedor generated in our manufacturing process; employee health and safety; labeling or other notifications with respect to the content or otheraspects of our processes, products, or packaging; restrictions on the use of certain materials in or on design aspects of our products orproduct packaging; and responsibility for disposal of products or product packaging. We also operate on sites that may have potentialfuture environmental issues as a result of activities at sites during the long history of manufacturing operations of AVX or itscorporate predecessor, or prior to the start of operations by AVX. Even though we may have rights of indemnity for such environmentalmatters at certain sites, regulatory agencies in those jurisdictions may require us to address such issues. We establish reserves forspecifically identified potential environmental liabilities when the liabilities are probable and can be reasonablyestimated. Nevertheless, there can be no assurance we will not be obligated to address environmental matters that could have anadverse impact on our operations. In addition, more stringent environmental regulations may be enacted in the future, and we cannotpresently determine the modifications, if any, in our operations that any such future regulations might require, or the cost of compliancewith these regulations. In order to resolve liabilities at various sites, we have entered into various administrative orders and consentdecrees, some of which may be, under certain conditions, reopened or subject to renegotiation. See “Environmental Matters” in Item 1elsewhere in this Form 10-K for additional information, including, in particular, information concerning the Company’s liability forremediation costs related to the New Bedford Harbor Superfund site. 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, includesSection 1502, which requires the SEC to adopt additional disclosure requirements related to the source of certain “conflict minerals” forissuers for which such “conflict minerals” are necessary to the functionality or product manufactured, or contracted to be manufactured,by that issuer. A final rule was issued by the SEC on August 22, 2012. The metals covered by the rules are commonly referred to as“3TG” and include tin, tantalum, tungsten, and gold. We use many of these materials in our production processes. The rule will requirecompanies to perform due diligence, disclose, and report whether or not such minerals originate from the DRC and adjoining countries. Wewill have to assess whether such minerals are used in the manufacture of our products. However, the implementation of these newrequirements could adversely affect the sourcing, availability, and pricing of such minerals if they are found to be used in themanufacture of our products. In addition, we will incur additional costs to comply with the disclosure requirements, including costs relatedto determining the source of any of the relevant minerals and metals used in our products. Global supply chains are complicated withmultiple layers and supplies between the mine and the final product. For the ten years prior to our participation in “Solutions for Hope”, we had a policy of not using tantalum sourced from the DRC orany other area in which insurgents or similar groups benefit from the sale of minerals. We have conducted extensive supply chaininvestigations relating to tantalum and are a participant in “Solutions for Hope”, which is a program designed to ensure that tantalumsourced from the DRC does not derive from conflict areas. “Solutions for Hope” incorporates the independently-validated Conflict-FreeSmelter program. As a result, AVX is the first in its industry to validate a “closed tantalum pipe” process, assuring all tantalumproducts contain only conflict-free tantalum in accordance with the principles of the Dodd-Frank legislation and the current OECDguidelines. 15 Since December 2011, AVX has only sourced tantalum powder and wire used in its tantalum capacitors from smelters that arecompliant with the EICC/GeSI conflict-free smelter program. In 2013, AVX began using Validated Conflict-Free Tantalum, which comesfrom verified sources in the DRC and surrounding countries. Our participation in “Solutions for Hope” is intended to affirm our commitment to supply conflict-free minerals to our customers andto fully comply with the OECD guidelines and SEC regulations. At this time, we do not expect the implementation of Rule 1502 willhave a material adverse effect on our ability to source raw materials or manufacture products containing the “3TG” metals. We use significant amounts of electrical energy and processed ores in our production process. Although its status is uncertain, theKyoto Protocol is an international agreement that purports to set binding targets for signatory industrialized countries for reducinggreenhouse gas emissions. Further, a number of governments or governmental bodies have introduced or are contemplating legislative if enacted, would limitand reduce greenhouse gas emissions through a “cap and trade” system of allowances and credits, among other provisions. There isalso current and emerging regulation in other countries in which we or our customers operate, such as the mandatory renewable energytarget in Australia. Any significant, sustained increase in energy costs could result in increases in our capital expenditures, operatingexpenses, 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 thegeographic 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 foreignexchange exposure due to changes in exchange rates of the various currencies. Volatility in exchange rates can positively or negativelyaffect our sales, gross margins, and retained earnings. In order to minimize the effects of movements in currency exchange rates, weenter into forward exchange contracts to hedge external and intercompany foreign currency transactions. In addition, we attempt tominimize currency exposure risk by producing our products in the same country or region in which the products are sold, thereby generatingrevenues and incurring expenses in the same currency. There can be no assurance that our approach will be successful, especially in theevent of a significant and sudden decline in the value of any of the international currencies of our worldwide operations. We do notengage 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 byeconomic, political, health, regulatory, and other circumstances existing in foreign countries in which we operate. Internationalmanufacturing 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 regulatoryenvironments, 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, includingearthquakes, tsunamis, and typhoons. Although we have operations around the world, a significant natural event could disrupt supplyor production or significantly affect the market for some or all of our products. There can be no assurance that these factors will nothave 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 aregenerally conditioned on the recipient maintaining certain employment levels. To the extent the number of employees falls below theprescribed employment levels, we could be required to refund all or a portion of the grants received. 16 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, wehave seen an increasing trend in the marketplace for claims related to end market product application failures or end-user recall or damageclaims 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, or long-terminvestments, future declines in the market values of such investments could have an adverse effect on our financial condition andoperating results. Given the global nature of our business, we have investments both domestically and internationally. Additionally, aportion of our overall investment portfolio includes investments in the financial sector. If the issuers of such investments default ontheir obligations or their credit ratings are negatively impacted by liquidity, credit deterioration or losses, financial results, or otherfactors, the value of our cash equivalents, short-term investments, and long-term investments could decline and have an adverse effecton our financial condition and operating results. In addition, our ability to find investments that are both safe and liquid and thatprovide 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 limitexposure to credit risk on our trade receivables, there can be no assurance such procedures will effectively limit our credit risk and avoidlosses, 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 quality of potential counterparties to derivative transactions and only enter into agreements with thosedeemed to have minimal credit risk at the time the agreements are executed. Our foreign exchange hedge portfolio is diversified acrossseveral credit line banks. We carefully monitor the amount of exposure we have with any given bank. We also periodically monitorchanges to counterparty credit quality as well as our concentration of credit exposure to individual counterparties. We do not hold or issuederivative financial instruments for trading or speculative purposes. A credit crisis could have an impact on our hedging contracts if ourcounterparties are forced to file for bankruptcy or are otherwise unable to perform their obligations. If we are required to terminatehedging contracts prior to their scheduled settlement dates, we may be required to recognize losses. In some cases, we have masternetting 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 financialmarkets have negatively impacted the value of the assets in our defined benefit pension plans. In addition, lower bond yields may reduceour 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 andliabilities on a specific date. If the financial markets do not provide the long-term returns that are expected, we could be required to makelarger contributions. The equity markets can be, and in the recent past have been, very volatile, and therefore our estimate of futurecontribution requirements can change in relatively short periods of time. In a low interest rate environment, the likelihood of highercontributions in the future increases. 17 We may not generate sufficient future taxable income, which may require additional valuation allowances against our deferred taxassets As part of the process of preparing our consolidated financial statements, we are required to estimate our tax assets and liabilitiesin each of the jurisdictions in which we operate. This process involves management estimating the actual current tax exposure togetherwith assessing temporary differences resulting from different treatment of items for tax and accounting purposes. These differencesresult in deferred tax assets and liabilities that are included within our consolidated balance sheets. We assess the likelihood that ourdeferred tax assets will be recoverable as a result of future taxable income and, to the extent we believe that recovery is not more likelythan not, we establish a valuation allowance. consisting of certain net operating losses carried forward before they expire. The valuation allowances are based on our estimates offuture taxable income over the periods that our deferred tax assets will be recoverable. We also record a provision for certain international, federal, and state tax contingencies based on the likelihood of obligation, whenneeded. In the normal course of business, we are subject to challenges from U.S. and non-U.S. tax authorities regarding the amount oftaxes due. These challenges may result in adjustments of the timing or amount of taxable income or deductions or the allocation ofincome among tax jurisdictions. Further, during the ordinary course of business, other changing facts and circumstances may impact ourability to utilize tax benefits as well as the estimated taxes to be paid in future periods. In the event that actual results differ from ourestimates, we may need to adjust tax accounts and related payments, which could materially impact our financial condition and results ofoperations. If we are unable to generate sufficient future taxable income in certain jurisdictions, or if there is a significant change in the actualtax rates or the time period within which the underlying temporary differences become taxable or deductible, we could be required toincrease our valuation allowances against our deferred tax assets resulting in an increase in our effective tax rate and an adverse impacton future operating results. Liquidity requirements could necessitate transfers of existing cash balances between our subsidiaries which may be subject torestrictions or cause unfavorable tax or earnings consequences Approximately 55% of our cash and investment securities are held by international subsidiaries. While we intend to use cash heldoverseas to fund our international operations and growth, if we encounter a significant need for liquidity domestically or at a particularlocation that we cannot fulfill through other internal or external sources, we may experience unfavorable tax and earnings consequencesdue to cash transfers. These adverse consequences would occur, for example, if the transfer of cash into the United States is taxed andno 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, datacorruption, 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 andfinancial information; to manage a variety of business processes and activities; and to comply with regulatory, legal, and taxrequirements. We also depend on our information technology infrastructure for digital marketing and sales activities and for electroniccommunications among our locations, personnel, customers, and suppliers around the world. These information technology systems may be susceptible to damage, disruptions, orshutdowns 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 ourinformation technology systems suffer severe damage, disruption, or shutdown and our business continuity plans do not effectivelyresolve the issues in a timely manner, our product sales, financial condition, and results of operations may be materially and adverselyaffected, 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 ofthe unauthorized disclosure of confidential information belonging to us or to our customers or suppliers. In addition, the disclosure ofnon-public sensitive information through external media channels could lead to the loss of intellectual property or damage our reputationand brand image. 18 Changes in global geopolitical and general economic conditions and other factors beyond our control may adversely impact ourbusiness 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 ourcustomers’ 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 andunpredictable 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 isgeneral purpose machinery and equipment, using tools and fixtures. In many instances the machinery and equipment have automaticcontrol features and special adaptations. Our plants, warehouses, machinery, and equipment are in good operating condition and are wellmaintained. Substantially all of our facilities are in regular use. We consider the present level of fixed assets, along with planned capital expenditures, assuitable and adequate for our operations in the current business environment. Our capital expenditures for plant and equipment were$27.5 million in fiscal 2011, $49.2 million in fiscal 2012 and $43.7 million in fiscal 2013. We believe that our facilities are suitable and adequate for the business conducted therein and are being appropriately utilized fortheir intended purposes. Utilization of the facilities varies based on demand for the products. We continuously review our anticipatedrequirements for facilities and, based on that review, may from time to time acquire or lease additional facilities and/or dispose ofexisting 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 themore 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 themanufacturing, sale, or distribution of passive components (“PC”) and interconnect products (“CP”). The following is a list of ourfacilities, their approximate square footage, whether they are leased or owned, and a description of their use. 19  LocationApproximateSquareFootage Type ofInterest Descriptionof UseUNITED STATES Fountain Inn, SC300,000 Owned Headquarters/Manufacturing/WarehouseMyrtle Beach, SC308,000 Owned Manufacturing/Warehouse/Research — PC — CP Olean, NY113,000 Owned Manufacturing — PCJacksonville, FL100,000 Owned Manufacturing — PCHuntington Station, NY94,000 Owned Manufacturing/Research— PCBiddeford, ME72,000 Owned Manufacturing — PCConway, SC71,000 Owned Manufacturing/Office — PC Sun Valley, CA25,000 Leased Manufacturing — PCColorado Springs, CO15,000 Owned Manufacturing — PC NON U.S. Tianjin, China520,000 Owned Manufacturing — PC Tianjin, China355,000 Owned Manufacturing — PCSan Salvador, El Salvador420,000 Owned Manufacturing — PCSaint-Apollinaire, France322,000 Leased Manufacturing/Research — PCLanskroun, Czech Republic500,000 Owned Manufacturing/Warehouse/Research — PCLanskroun, Czech Republic70,000 Leased Manufacturing/Warehouse — PCUherske Hradiste, CzechRepublic470,000 Owned Manufacturing — PC — CPUherske Hradiste, CzechRepublic139,000 Leased Manufacturing/Warehouse — CP — PCBzenec, Czech Republic194,000 Owned Manufacturing — CPPenang, Malaysia190,000 Owned Manufacturing — PCColeraine, N. Ireland185,000 Owned Manufacturing/Research — PCBetzdorf, Germany111,000 Owned Manufacturing — CPJuarez, Mexico116,000 Owned Manufacturing — PC — CPJerusalem, Israel88,000 Leased Manufacturing/Research — PCAdogawa, Japan206,000 Owned Manufacturing — PCHong Kong30,000 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, ourproperties and equipment generally are in good operating condition and are adequate for our present needs. We do not anticipate difficultyin renewing existing leases as they expire or in finding alternative facilities. Item 3.Legal Proceedings See “Environmental Matters” in Item 1 elsewhere in this Form 10-K for a discussion of our involvement as a PRP at certainenvironmental clean-up sites and certain pending lawsuits involving other environmental disputes. We are involved in disputes and legal proceedings arising in the normal course of business. While we cannot predict the outcome ofthese proceedings, we believe, based upon a review with legal counsel, that none of these proceedings will have a material impact on ourfinancial position, results of operations, comprehensive income (loss), or cash flows. However, we cannot be certain if the eventualoutcome, and any adverse result in these or other matters that may arise from time to time, may harm our financial position, results ofoperations, comprehensive income (loss), or cash flows. Item 4.Mine Safety Disclosures Not applicable.PART II Item 5.Market for the Registrant’s Common Equity, Related Stockholder Matters andIssuer Purchases of Equity Securities 20 Market for Common Stock Our common stock is listed on the New York Stock Exchange and trades under the symbol “AVX.” At May 13, 2013, there were354 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 highand low sale prices for our common stock on the New York Stock Exchange and the dividends declared per common share for each quarterfor the fiscal years ended March 31, 2012 and March 31, 2013. On May 8, 2013, our Board of Directors declared a $0.0875 dividend pershare of common stock with respect to the quarter ended March 31, 2013. Future dividends, if any, will be determined by the Company’sBoard of Directors and may depend on the Company’s future profitability and anticipated operating cash requirements. Common Stock Price Range Dividends Declared 2012 2013 Per Share High Low High Low 2012 2013First Quarter $16.48 $14.35 $13.36 $10.32 $0.0550 $0.0750 Second Quarter 15.66 11.10 10.85 9.32 0.0750 0.0750 Third Quarter 13.95 11.45 10.91 9.20 0.0750 0.0750 Fourth Quarter 13.85 12.65 12.05 10.80 0.0750 0.0875 The name, address, and phone number of our stock transfer agent and registrar is: The American Stock Transfer and Trust Company59 Maiden Lane, Plaza LevelNew York, New York 100381-800-937-5449 Stock Performance Graph The following chart shows, from the end of fiscal year 2008 to the end of fiscal year 2013, changes in the value of $100 invested ineach of the Company’s common stock, Standard & Poor’s 500 Composite Index, and a peer group consisting of three companies whosebusinesses are representative of our business segments. The companies in the peer group are: Kemet Corporation, VishayIntertechnology, Inc., and International Rectifier Corp. 21  Cumulative Total Return 3/31/08 3/31/09 3/31/10 3/31/11 3/31/12 3/31/13AVX -NYSE $100 $72 $114 $122 $110 $102 S & P 500 $100 $62 $93 $107 $116 $133 Peer Group $100 $46 $102 $180 $123 $122 Purchases of Equity Securities by the Issuer The following table provides information regarding purchases by the Company, during the fourth quarter ended March 31, 2013, ofequity securities that are registered pursuant to Section 12 of the Exchange Act:22  Period Total Number ofShares Purchased(1) (2) Average Price PaidPer Share Total Number of SharesPurchased as Part ofPublicly Announced Plans orPrograms (1) (2) Maximum Number of Sharesthat may yet be PurchasedUnder the Plans or Programs(1) (2)1/1/13 - 1/31/13 7,700 $10.97 7,700 5,777,155 2/1/13 - 2/28/13 117,000 11.73 117,000 5,660,155 3/1/13 - 3/31/13 151,700 11.83 151,700 5,508,455 Total 276,400 $11.76 276,400 5,508,455 (1)On October 19, 2005, the Board of Directors of the Company authorized the repurchase of 5,000,000 shares of our common stock from time to time in the open market. The repurchased shares are held as treasury stock and are available for general corporate purposes.(2)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 from time to time in the open market. The repurchased shares are held as treasury stock and are available for general corporate purposes. 23  Item 6.Selected Financial Data The following table sets forth selected consolidated financial data for AVX for the five fiscal years ended March 31, 2013. Theselected consolidated financial data for the five fiscal years ended March 31, 2013 are derived from AVX’s audited consolidated financialstatements. The consolidated financial data set forth below should be read in conjunction with AVX’s consolidated financial statementsand the notes thereto and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” includedelsewhere in this Form 10-K. Selected Financial Data(in thousands, except per share data) Years Ended March 31, 2009 2010 2011 2012 2013Operating Results Data: Net sales $1,389,613 $1,304,966 $1,653,176 $1,545,254 $1,414,400 Cost of sales 1,158,196 1,027,368 1,195,790 1,153,295 1,150,630 Vendor settlement - (5,000) - - -Restructuring charges 15,123 4,397 - - -Gross profit 216,294 278,201 457,386 391,959 263,770 Selling, general and administrative expenses 121,897 108,527 123,887 116,408 117,365 Environmental charges 18,200 - 8,575 100,000 266,250 Restructuring charges 3,504 2,509 - - -Other operating income (4,051) (3,519) - - -Profit (loss) from operations 76,744 170,684 324,924 175,551 (119,845)Interest income 21,112 7,120 6,569 6,798 7,021 Interest expense (139) (111) - (707) (2,262)Other, net (578) (1,336) 2,766 (1,737) 1,764 Income (loss) before income taxes 97,139 176,357 334,259 179,905 (113,322)Provision for (benefit from) income taxes 16,293 33,499 90,256 27,100 (49,010)Net income (loss) $80,846 $142,858 $244,003 $152,805 $(64,312) Income (loss) per share: Basic $0.47 $0.84 $1.44 $0.90 $(0.38)Diluted $0.47 $0.84 $1.43 $0.90 $(0.38)Weighted average common shares outstanding: Basic 170,616 170,247 170,025 169,886 169,124 Diluted 170,689 170,274 170,390 170,134 169,124 Cash dividends declared per common share $0.16 $0.16 $0.19 $0.28 $0.31 As of March 31, 2009 2010 2011 2012 2013Balance Sheet Data: Working capital $983,102 $1,123,085 $1,366,450 $1,430,072 $1,614,656 Total assets 1,872,529 2,051,492 2,319,482 2,468,012 2,601,995 Stockholders' equity 1,669,753 1,801,007 2,039,417 2,120,753 1,972,930 Years Ended March 31, 2009 2010 2011 2012 2013Other Data: Capital expenditures $44,205 $28,888 $27,470 $49,201 $43,705 Research, development and engineering expenses 31,477 24,667 23,683 26,328 30,467 24  Item 7.Management’s Discussion and Analysis of Financial Condition and Results ofOperations Overview AVX Corporation is a leading worldwide manufacturer and supplier of a broad line of passive electronic components andinterconnect products. Electronic components and connector products manufactured by AVX are used in virtually all types of electronicproducts, including those in telecommunications, automotive, consumer electronics, military/aerospace, medical, computer, and industrialmarkets. The Company has five main product groups: Ceramic Components, Tantalum Components, Advanced Components, InterconnectProducts, 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, 2013 were $1,414.4 million with a net loss of $64.3 million compared toconsolidated revenues of $1,545.3 million with net income of $152.8 million for the fiscal year ended March 31, 2012. During fiscal 2013we saw declining volumes across most of the markets we serve, with the exception of automotive, aerospace, networking andcomponent sales related to higher end smart phones and tablet devices, compared to fiscal 2012. This trend reflected weaker globaldemand for commercial and consumer electronic products and our customers’ efforts to manage inventory levels as a result of the overallmarket unpredictability in light of uncertain global economic conditions when compared to the same period last year. Our electronicdistributor customers generally reduced their level of inventory throughout the fiscal year. Overall sales prices for our commoditycomponent products declined during 2013 as lower immediate delivery demand in the marketplace led to increased sales price pressurecompared to the prior year. Gross margins declined when compared to the prior year, primarily due to higher energy and material costs aswell as lower selling prices. We continued to proactively take actions to manage our production efficiencies and tightly control ourspending to help offset these higher costs and unfavorable sales price pressure. We also recorded a $266.3 million environmental chargerelated to environmental issues at the New Bedford Harbor Superfund Site in Massachusetts, which resulted in the reported net loss for2013. In fiscal 2013, we generated operating cash flows of $194.8 million. We used cash generated from operations to fund capitalexpenditures, the $86 million acquisition of Nichicon Tantalum, and general working capital requirements. In addition, to enhanceshareholder value, we repurchased shares of our common stock and paid increased dividends during fiscal year 2013. Our financialposition remains strong with approximately $1.1 billion of cash, cash equivalents, and securities investments and no debt as of March31, 2013. We remain committed to investing in new products and improvements to our production processes as well as continued investment inresearch, development, and engineering in order to provide our customers with new generations of passive component and interconnectproduct solutions. We are currently producing more sophisticated electronic component parts necessitated by the breadth and increase infunctionality 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 onvalue-added advanced products and interconnect solutions to serve this expanding market. We are also focused on controlling andreducing costs to accommodate market forces and offset rising costs of energy and materials. We do this by investing in automatedmanufacturing technologies, enhancing manufacturing materials and efficiencies, and rationalizing our production capabilities around theworld. We believe that this philosophy will enable us to adapt quickly and benefit as market conditions change and provide shareholdervalue. In addition, we may, from time to time, consider strategic acquisitions of other companies or businesses in order to expand ourproduct offerings or otherwise improve our market position. We evaluate potential acquisitions in order to position ourselves to takeadvantage of profitable growth opportunities. 25 Outlook Near-Term: With uncertain global geopolitical and economic conditions, it is difficult to quantify expectations for the early part of fiscal2014. Near-term results for us will depend on the impact of the overall global geopolitical and economic conditions and their impact ontelecommunications, 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 themarkets we serve due to competitive activity. In response to anticipated market conditions, we expect to continue to focus on costmanagement and product line rationalization to maximize earnings potential. We also continue to focus on process improvements andenhanced production capabilities in conjunction with our focus on the sales of value-added electronic components to support today’sadvanced electronic devices. If current global geopolitical and economic conditions worsen, the overall impact on our customers as well asend user demand for electronic products could have a significant adverse impact on our near-term results. Long-Term: Although there is uncertainty in the near-term market as a result of the current global geopolitical and economic conditions, wecontinue to see opportunities for long-term growth and profitability improvement due to: (a) a projected increase in the long-termworldwide demand for more sophisticated electronic devices, which require electronic components such as the ones we sell, (b) costreductions and improvements in our production processes, and (c) opportunities for growth in our Advanced Component and Interconnectproduct lines due to advances in component design and our production capabilities. We have fostered our financial health and thestrength of our balance sheet. We remain confident that our strategies will enable our continued long-term success. Results of Operations Year Ended March 31, 2013 compared to Year Ended March 31, 2012 Net sales for the fiscal year ended March 31, 2013 were $1,414.4 million compared to $1,545.3 million for the fiscal year ended March31, 2012. The table below represents product group revenues for the fiscal years ended March 31, 2011, 2012, and 2013. Years Ended March 31,Sales revenue (in thousands) 2011 2012 2013Ceramic Components $211,998 $179,984 $173,315 Tantalum Components 419,792 393,468 330,209 Advanced Components 410,110 378,843 346,543 Total Passive Components 1,041,900 952,295 850,067 KDP and KCD Resale 440,050 410,419 377,707 KCP Resale Connectors 66,088 54,765 61,809 Total KED Resale 506,138 465,184 439,516 Interconnect 105,138 127,775 124,817 Total Revenue $1,653,176 $1,545,254 $1,414,400 26 Passive Component sales were $850.1 million for the fiscal year ended March 31, 2013 compared to $952.3 million during the fiscalyear ended March 31, 2012. The sales decrease in Passive Components reflects the overall weaker demand for electronics across globalmarkets as customers remained cautious and reduced or limited inventory levels in response to decreased spending by consumers andmanufacturers when compared to last year. Funding for global “green energy” products also decreased compared to last year, whichprimarily impacted the Advanced Components product lines. The decrease in sales of Tantalum Components was the result of lowersales unit volume in addition to lower average selling prices reflective of increased market competition and reduced concerns aboutproduct availability. Compared to the same period last year, we saw lower sales in most of the markets we serve, with the exception ofautomotive, aerospace, networking, and component sales related to higher end smart phones and tablet devices. KDP and KCD Resale sales were $377.7 million for the fiscal year ended March 31, 2013 compared to $410.4 million during the fiscalyear ended March 31, 2012. When compared to last year, the decrease during the fiscal year ended March 31, 2013 is primarily attributableto a decrease in unit sales volume, particularly in the Asian and European regions due to lower demand for such circuit and crystal devicesin the telecommunications and consumers markets. Total connector sales, including AVX Interconnect products and KCP Resale Connectors, were $186.6 million in the fiscal year endedMarch 31, 2013 compared to $182.5 million during the fiscal year ended March 31, 2012. This increase was primarily attributable to anincreased demand in the automotive sector reflective of the increased electronic content in today’s automobiles. Our sales to independent electronic distributors represented 38.8% of total net sales for the fiscal year ended March 31, 2013,compared to 38.0% for fiscal year ended March 31, 2012. Overall distributor inventories declined when compared to last year. This is aresult of continued uncertainty in the global markets and cautious inventory management by our distributors. Our sales to distributorcustomers may involve specific ship and debit and stock rotation programs for which sales allowances are recorded as reductions insales. Such allowance charges increased to $34.3 million, or 6.3% of gross sales to distributor customers, for the fiscal year endedMarch 31, 2013 compared to $29.6 million, or 4.8% of gross sales to distributor customers, for the fiscal year ended March 31, 2012,reflecting the increased pricing pressure resulting from lower demand in the marketplace. Applications under such programs for fiscalyears ended March 31, 2013 and 2012 were approximately $33.9 million and $28.8 million, respectively. Geographically, compared to the fiscal year ended March 31, 2012, sales decreased in all regions, tracking the overall globalmacroeconomic conditions. Sales in the Asian market increased to 47.5% of total sales while sales in the Americas decreased to 27.6%and sales in Europe decreased to 24.9% of total sales, respectively. This compares to 44.9%, 27.8%, and 27.3% of total sales for theAsian, American, and European regions last year, respectively. As a result of the strength of the U.S. dollar against certain foreigncurrencies, sales for the year ended March 31, 2013 were unfavorably impacted by approximately $24.5 million when compared to the prioryear. Gross profit margin in the fiscal year ended March 31, 2013 decreased to 18.6% of sales or $263.8 million compared to a grossprofit margin of 25.4% of sales or $392.0 million in the fiscal year ended March 31, 2012. This overall decrease is primarily attributableto lower sales and lower selling prices, particularly for Passive Components products, reflective of the weaker demand in the globalmarketplace and resulting market pricing pressure. In addition, lower production and higher energy and material costs negatively impactedmargins when compared to last year. These higher costs were partially offset by our emphasis on spending controls and cost reductionsin light of the weaker global demand for electronic component parts. When compared to the prior fiscal year, costs were favorablyimpacted by approximately $23.3 million due to the strength of the U.S. dollar against certain foreign currencies. Selling, general, and administrative expenses for the fiscal year ended March 31, 2013 were $117.4 million, or 8.3% of net sales,compared to $116.4 million, or 7.5% of net sales, for the fiscal year ended March 31, 2012. The overall increase in selling, general andadministrative expenses as a percentage of sales reflects the impact of lower sales volumes when compared to last year. Research, development, and engineering expenditures, which encompass the personnel and related expenses devoted to developingnew products and maintaining existing products, processes, and technical innovations, were approximately $30.5 million and $26.3million in fiscal 2013 and 2012, respectively. Research and development costs included therein decreased in fiscal 2013 to $7.2 millioncompared to $7.7 million in fiscal 2012. Engineering expenses increased $4.7 million to $23.3 million in fiscal 2013 compared to $18.6million in fiscal 2012. 27 Profit (loss) from operations for the fiscal year ended March 31, 2013 decreased $295.4 million to $(119.8) million compared to$175.6 million for the fiscal year ended March 31, 2012. This decrease is a result of the factors above, and the recognition of a $266.3million environmental charge in 2013 related to remediation issues at the New Bedford Harbor Superfund Site in Massachusetts. Duringthe fiscal year ended March 31, 2012 we recognized a $100.0 million charge for remediation issues related to the New Bedford HarborSuperfund Site. See Note 12 to our consolidated financial statements elsewhere herein for further discussion related to theseenvironmental charges. Other income increased $2.1 million to $6.5 million in fiscal 2013 compared to $4.4 million in fiscal 2012. This increase is attributableto higher net foreign currency gains, partially offset by an increase in interest expense resulting from accrued interest associated with theproposed settlement of the New Bedford Harbor Superfund Site remediation issues referred to above. The effective tax rate for the fiscal year ended March 31, 2013 was 43.2% compared to an effective tax rate of 15.1% for the fiscalyear ended March 31, 2012. This higher effective tax rate is primarily due to one-time income tax benefits primarily attributable to theutilization of U.S foreign tax credits relating to our South American and European operations recognized in fiscal 2012. The change in theeffective tax rate was also attributable to the tax benefit related to the New Bedford Harbor environmental charges recognized duringeach period. Excluding the one-time income tax benefits and the tax benefit related to the environmental charges, the effective tax ratefor the fiscal year ended March 31, 2013 was 30.6% compared to 27.2% for the fiscal year ended March 31, 2012. As a result of the factors discussed above, net income (loss) for the fiscal year ended March 31, 2013 was $(64.3) million comparedto $152.8 million for the fiscal year ended March 31, 2012. 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 March31, 2011. The table below represents product group revenues for the fiscal years ended March 31, 2010, 2011, and 2012. Years Ended March 31,Sales revenue (in thousands) 2010 2011 2012Ceramic Components $155,059 $211,998 $179,984 Tantalum Components 280,991 419,792 393,468 Advanced Components 369,811 410,110 378,843 Total Passive Components 805,861 1,041,900 952,295 KDP and KCD Resale 338,701 440,050 410,419 KCP Resale Connectors 73,973 66,088 54,765 Total KED Resale 412,674 506,138 465,184 Interconnect 86,431 105,138 127,775 Total Revenue $1,304,966 $1,653,176 $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 fiscalyear ended March 31, 2011. The sales decrease in Passive Components reflects the supply chain inventory correction discussed above, aswell as overall lower demand for electronics across global markets as both consumers and manufacturers decreased spending as a resultof global economic uncertainty when compared to the fiscal year ended March 31, 2011. Compared to the same period last year, we sawlower sales in most of the markets we serve, particularly in the industrial, alternative energy, medical, and consumer markets. Thosedeclines were partially offset by higher demand in the automotive market. 28 KDP and KCD Resale sales were $410.4 million for the fiscal year ended March 31, 2012 compared to $440.1 million during the fiscalyear ended March 31, 2011. When compared to the same period last year, the decrease during the fiscal year ended March 31, 2012 isprimarily attributable to the supply chain inventory correction mentioned above, a decrease in unit sales volume in the Asian region dueto lower end user demand, particularly in the consumer market, and a shift in Kyocera’s mobile phone division purchasing to procurecomponents directly in Asia from other Kyocera affiliates. Total connector sales, including AVX Interconnect products and KCP Resale Connectors, were $182.5 million in the fiscal year endedMarch 31, 2012 compared to $171.2 million during the fiscal year ended March 31, 2011. This increase was primarily attributable to anincreased 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 realigninventory balances in light of expected demand. Our sales to distributor customers involve specific ship and debit and stock rotationprograms for which sales allowances are recorded as reductions in sales. Such allowance charges were $29.6 million, or 4.8% of grosssales to distributor customers, for the fiscal year ended March 31, 2012 and $32.8 million, or 4.5% of gross sales to distributorcustomers, for the fiscal year ended March 31, 2011. Applications under such programs for fiscal years ended March 31, 2012 and 2011were approximately $28.8 million and $31.4 million, respectively. Geographically, compared to the fiscal year ended March 31, 2011, sales for the fiscal year ended March 31, 2012 increased 1% (to45%) in Asia and 2% (to 27%) in Europe, offset by a decline of 3% in the Americas (to 28%), reflective of higher demand in the Asiaregion and the relative strength of the automotive markets in Europe. As a result of the weakness of the U.S. dollar against certainforeign currencies, sales for the year ended March 31, 2012 were favorably impacted by approximately $47.8 million when compared to theprior 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 profitmargin of 27.7% of sales or $457.4 million in the fiscal year ended March 31, 2011. This overall decrease is primarily attributable tolower sales, increased costs for materials and energy, as well as modest product sales price declines. In addition, when compared to theprior fiscal year, costs were unfavorably impacted by approximately $65.2 million due to the weakness of the U.S. dollar against certainforeign 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, andadministrative expenses was primarily due to lower selling expenses resulting from lower sales and cost control measures which wereimplemented throughout the fiscal year. Research, development, and engineering expenditures, which encompass the personnel and related expenses devoted to developingnew products and maintaining existing products, processes, and technical innovations, were approximately $26.3 million and $23.7million in fiscal 2012 and 2011, respectively. Research and development costs included therein increased in fiscal 2012 to $7.7 millioncompared to $7.4 million in fiscal 2011. Engineering expenses increased $2.3 million to $18.6 million in fiscal 2012 compared to $16.3million 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 millionfor the fiscal year ended March 31, 2011. This decrease is a result of the factors above, and the recognition of a $100.0 millionenvironmental charge related to environmental issues at the New Bedford Harbor Superfund Site in Massachusetts. During the fiscalyear ended March 31, 2011 we recognized $8.6 million for environmental and legal charges related to the implementation of certainenvironmental remediation actions in the U.S. See Note 11 to our consolidated financial statements elsewhere herein for furtherdiscussion related to these environmental charges. Other income decreased $5.0 million to $4.3 million in fiscal 2012 compared to $9.3 million in fiscal 2011. This decrease isattributable to lower net foreign currency gains, partially offset by a slight increase in interest income of approximately $0.2 millionresulting from higher investment income on higher investment balances when compared to the prior fiscal year. 29 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 fiscalyear ended March 31, 2011. This lower effective tax rate is primarily due to $11.5 million of one-time income tax benefits primarilyattributable to the utilization of U.S foreign tax credits relating to our South American and European operations in addition to thereversal of certain U.S. state income tax valuation allowances during the fourth quarter of the current fiscal year. The effective tax ratewas 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 $244.0million for the fiscal year ended March 31, 2011. 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 insecurities. As of March 31, 2013 we had a current ratio of 5.9 to 1, $1,062.7 million of cash, cash equivalents, and investments insecurities, $1,972.9 million of stockholders' equity and no debt. As of March 31, 2013, we had cash, cash equivalents, and short-term and long-term investments in securities of $1,062.7 million, ofwhich $583.2 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 foron-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. Net cash from operating activities was $194.8 million for the fiscal year ended March 31, 2013, compared to $148.4 million for thefiscal year ended March 31, 2012 and $152.1 million for the fiscal year ended March 31, 2011. Purchases of property and equipment totaled $43.7 million in fiscal 2013, $49.2 million in fiscal 2012, and $27.5 million in fiscal 2011.Expenditures primarily related to expanding the production capabilities of the passive component and interconnect product lines,expanding production capacity in lower cost regions, as well as the implementation of improved manufacturing processes. We continue tomake strategic capital investments in our advanced and specialty passive component and interconnect products and expect to incur capitalexpenditures of approximately $40 million in fiscal 2014. The actual amount of capital expenditures will depend upon the outlook for endmarket demand. On February 6, 2013, the Company acquired Nichicon Tantalum for $86.0 million in cash. Nichicon Tantalum designs, develops,manufactures and markets tantalum electronic components. Nichicon Tantalum’s products are used in a broad range of commercialapplications. Nichicon Tantalum has manufacturing facilities located in Adogawa, Japan and Tianjin, China. The acquisition enhancesour leadership position in the passive electronic component industry and provides further opportunities for expansion in the Asian regionand tantalum component manufacturing efficiencies. The majority of our funding is internally generated through operations and investment income from cash, cash equivalents, andinvestments 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, 2013, cash on hand and cash expected to be generated from operatingactivities and investment income from cash, cash equivalents, and investments in securities will be sufficient to satisfy our anticipatedfinancing needs for working capital, capital expenditures, funding the New Bedford Harbor proposed settlement, other environmentalclean-up costs, pension plan funding, research, development, and engineering expenses, future acquisitions of businesses, and dividendpayments or stock repurchases to be made during the upcoming year. While changes in customer demand have an impact on our futurecash requirements, changes in those requirements are mitigated by our ability to adjust manufacturing capabilities to meet increases ordecreases in customer demand. We do not anticipate any significant changes in our ability to generate cash flows or meet our liquidityneeds in the long-term. 30 In fiscal 2011, 2012, and 2013, dividends of $32.3 million, $44.2 million, and $50.8 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 31,2013, there were 5,508,455 shares that may yet be repurchased under this program. We purchased 445,528 shares at a cost of $6.2 million during fiscal 2011, 625,068 shares at a cost of $8.4 million during fiscal2012, and 983,608 shares at a cost of $10.6 million during fiscal 2013. The repurchased shares are held as treasury stock and areavailable for general corporate purposes. At March 31, 2013, we had contractual obligations for the acquisition or construction of plant and equipment aggregatingapproximately $2.3 million. We make contributions to our U.S. and international defined benefit plans as required under various pension fundingregulations. We made contributions of $7.9 million to our international defined benefit plans during the year ended March 31, 2013 andestimate that we will make contributions of approximately $8.1 million during the fiscal year ending March 31, 2014. We have unfundedactuarially computed pension liabilities of approximately $36.4 million related to these defined benefit pension plans as of March 31,2013.when computing future benefit obligations. We are a lessee under long‑term operating leases primarily for office space, plant, and equipment. Future minimum lease commitmentsunder non‑cancelable operating leases as of March 31, 2013, were approximately $34.4 million. From time to time we enter into delivery contracts with selected suppliers for certain metals used in our production processes. Thedelivery 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 theoutcome of these proceedings, we believe, based upon our review with legal counsel, that none of these proceedings will have a materialimpact on our financial position, results of operations, comprehensive income (loss), or cash flows. However, we cannot be certain ifthe 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, comprehensive income (loss), or cash flows. 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 toreopener provisions, including a reopener if certain remediation costs for the site exceed $130.5 million. On April 18, 2012, the EPA issued to the Company a Unilateral Administrative Order (“UAO”) directing the Company to performthe Remedial Design, the Remedial Action, and Operation and Maintenance, as set forth in the UAO, for the harbor cleanup, pursuant tothe reopener provisions. The effective date set forth in the UAO was June 18, 2012 (and subsequently extended to July 1, 2013),pursuant to which the Company had to inform the EPA if it intended to comply with the UAO. On October 10, 2012, the EPA, the United States, and the Commonwealth of Massachusetts and AVX announced that they hadreached a financial settlement with respect to the EPA’s ongoing clean-up of the harbor. That agreement is contained in a SupplementalConsent Decree that modifies certain provisions of the 1992 Consent Decree, including elimination of the governments’ right to invokethe clean-up reopener provisions in the future. In accordance with the settlement, AVX will pay $366.3 million, plus interest computedfrom August 1, 2012, in three installments over a two-year period for use by the EPA and the Commonwealth to complete the clean-up ofthe harbor, and the EPA will withdraw the UAO. The settlement requires approval by the United States District Court before becomingfinal. The timing of any such approval is uncertain. The Company has recorded a liability for the full amount of the proposedsettlement. 31 There are two suits pending with respect to property adjacent to our Myrtle Beach, South Carolina factory claiming property valueshave been negatively impacted by alleged migration of certain pollutants from our property. On November 27, 2007, a suit was filed inthe South Carolina State Court by certain individuals as a class action. Another suit is a commercial suit filed on January 16, 2008 inSouth Carolina State Court. We intend to defend vigorously the claims that have been asserted in these two lawsuits. At this stage ofthe litigation, there has not been a determination as to responsible parties or the amount, if any, of damages. Based on our estimate ofpotential outcomes, we have accrued approximately $0.3 million with respect to these cases as of March 31, 2013. We currently have remaining reserves of approximately $380.6 million at March 31, 2013 related to the various environmentalmatters discussed above. These reserves are classified in the consolidated balance sheets as $147.7 million in accrued expenses and$232.9 million in other non-current liabilities at March 31, 2013. The amount recorded for identified contingent liabilities is based on estimates. Amounts recorded arereviewed periodically and adjusted to reflect additional legal and technical information that becomes available. Also, 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 coulddiffer from our current estimates. 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 futureenvironmental 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 suchissues. 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 arenot 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. Disclosures about Contractual Obligations and Commitments The Company has the following contractual obligations and commitments as of March 31, 2013 as noted below. FY 2015 - FY 2017 - Contractual Obligations (in thousands) Total FY 2014 FY 2016 FY 2018 ThereafterOperating Leases $34,411 $6,642 $12,014 $9,490 $6,265 Plant and Equipment $2,251 $2,251 $ - $ - $ - As discussed in Note 8 to our consolidated financial statements elsewhere herein, the amount of unrecognized tax benefits recordedin the Company’s balance sheet at March 31, 2013 was $14.2 million. The Company is unable to reasonably estimate in which futureperiods these amounts will be ultimately settled. During the fiscal year ended March 31, 2013, we made contributions of $4.1 million to Company sponsored retirement savingsplans. Our contributions are partially based on employee contributions as a percentage of their salaries. Certain contributions by theCompany are discretionary and are determined by the Board of Directors each year. We expect that our contributions for the year endingMarch 31, 2014 will be approximately the same as in fiscal 2013. During the fiscal year ended March 31, 2013, we made no contributions to our U.S. defined benefit plans, due to their funded statusat the end of the prior year and $7.9 million to our international defined benefit plans. These contributions are based on a percentage ofpensionable wages or to satisfy funding requirements. We expect that our contributions for the fiscal year ending March 31, 2014 willbe none for our U.S. defined benefit plans and approximately $8.1 million for our international defined benefit plans. From time to time we enter into delivery contracts with selected suppliers for certain metals used in our production processes. Thedelivery contracts represent routine purchase orders for delivery within three months and payment is due upon receipt. As of March 31,2013, we had no material outstanding purchase commitments. 32 Critical Accounting Policies and Estimates “Management’s Discussion and Analysis of Financial Condition and Results of Operations” is based upon our consolidatedfinancial statements and the notes thereto, which have been prepared in accordance with generally accepted accounting principles in theUnited States. The preparation of these financial statements requires management to make estimates, judgments, and assumptions thataffect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financialstatements 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 onhistorical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which formthe basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from othersources. While our estimates and assumptions are based on our knowledge of current events and actions we may undertake in thefuture, there can be no assurance that actual results will not differ from these estimates and assumptions. On an ongoing basis, weevaluate our accounting policies and disclosure practices. In management’s opinion, the critical accounting policies and estimates, asdefined below, are more complex in nature and require a higher degree of judgment than the remainder of our accounting policies describedin 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. Weship products to customers based upon firm orders. Shipping and handling costs are included in cost of sales. We recognize revenuewhen the sales process is complete. This occurs when products are shipped to the customer in accordance with the terms of an agreementof sale, there is a fixed or determinable selling price, title and risk of loss have been transferred, and collectability is reasonablyassured. Estimates used in determining sales allowance programs described below are subject to the volatilities of the marketplace. This includes, but is not limited to, changes in economic conditions, pricing changes, product demand, inventory levels in the supplychain, the effects of technological change, and other variables that might result in changes to our estimates. Accordingly, there can be noassurance 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 estimatedsales allowance for returns at the time of sale based on using historical trends, current pricing and volume information, other marketspecific information, and input from sales, marketing, and other key management personnel. The amount accrued reflects the return ofvalue of the customer’s inventory. These procedures require the exercise of significant judgments. We believe that these proceduresenable us to make reliable estimates of future returns. Our actual results have historically approximated our estimates. When theproduct 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 salesprograms. We report provisions for distributor allowances in connection with such sales programs as a reduction in revenue and reportdistributor allowances in the balance sheet as a reduction in accounts receivable. For the distribution programs described below, we donot track the individual units that we record against specific products sold from distributor inventories, which would allow us to directlycompare revenue reduction for credits recorded during any period with credits ultimately awarded in respect of products sold during thatperiod. Nevertheless, we believe that we have an adequate basis to assess the reasonableness and reliability of our estimates for eachprogram. 33 Distributor Stock Rotation Program Stock rotation is a program whereby distributors are allowed to return for credit qualified inventory, semi-annually, equal to a certainpercentage, primarily limited to 5% of the previous six months net sales. We record an estimated sales allowance for stock rotation atthe time of sale based on a percentage of distributor sales using historical trends, current pricing and volume information, other marketspecific information, and input from sales, marketing, and other key management personnel. These procedures require the exercise ofsignificant judgment. We believe that these procedures enable us to make reliable estimates of future returns under the stock rotationprogram. Our actual results have historically approximated our estimates. When the product is returned and verified, the distributor isgiven 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 inthe marketplace on sales to their end customers. Ship and debit programs require a request from the distributor for a pricing adjustmentfor a specific part for a sale to the distributor’s end customer from the distributor’s stock. Ship and debit authorizations may covercurrent and future distributor activity for a specific part for sale to their customer. At the time we record sales to the distributors, weprovide an allowance for the estimated future distributor activity related to such sales since it is probable that such sales to distributorswill result in ship and debit activity. We record an estimated sales allowance based on sales during the period, credits issued todistributors, distributor inventory levels, historical trends, market conditions, pricing trends we see in our direct sales activity withoriginal equipment manufacturers and other customers, and input from sales, marketing, and other key management personnel. Theseprocedures require the exercise of significant judgment. We believe that these procedures enable us to make reliable estimates of futurecredits under the ship and debit program. Our actual results have historically approximated our estimates. At the time the distributorships 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 theseagreements, we provide an allowance for the discounts on the sales for which the customer is eligible to take. The customer then debitsus 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 tocustomers. We warrant that our products will meet such specifications. We accrue for product warranties when it is probable thatcustomers will make claims under warranties relating to products that have been sold and a reasonable estimate of costs can bemade. The amount accrued represents the direct costs of replacement and other potential costs resulting from product not meetingspecifications 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 noguarantee that warranty claims in the future will not increase, or be material to results of operations, as a result of manufacturingdefects, 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 costsinclude 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 inventoryand 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 marketing and sales personnel, customer backlog, certain date code restrictions, technology changes, demand increases and decreases, market directional shifts,and obsolescence and aging. 34 Income Taxes As part of the process of preparing our consolidated financial statements, we are required to estimate our tax assets and liabilitiesin each of the jurisdictions in which we operate. This process involves management estimating the actual current tax exposure togetherwith assessing temporary differences resulting from different treatment of items for tax and accounting purposes. These differencesresult in deferred tax assets and liabilities that are included within our consolidated balance sheets. We assess the likelihood that ourdeferred tax assets will be recoverable bed on all available evidence, both positive and negative. To the extent we believe that recoveryis not more likely than not, we establish a valuation allowance. consisting of certain net operating losses carried forward before they expire. The valuation allowance is based on our estimates offuture taxable income over the periods that our deferred tax assets will be recoverable. We continue to evaluate countries where wehave a valuation allowance on our deferred tax assets due to historical operating losses and when such positive evidence outweighsnegative 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, whenneeded. In the normal course of business, we are subject to challenges from U.S. and non-U.S. tax authorities regarding the amount oftaxes due. These challenges may result in adjustments of the timing or amount of taxable income or deductions or the allocation ofincome among tax jurisdictions. Further, during the ordinary course of business, other changing facts and circumstances may impact ourability to utilize tax benefits as well as the estimated taxes to be paid in future periods. We believe that any potential tax exposureshave 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 theimpact of a tax position, if that position would “more likely than not” be sustained on audit, based on the technical merits of theposition. 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 ourU.S. income tax returns, as these deductions are subject to recapture provisions in the U.S. income tax code. When the recapture periodexpires 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. Weevaluate these assumptions at least annually. The discount rate enables us to state expected future cash flows at a present value onthe measurement date. To determine the discount rate, we apply the expected cash flows from each individual pension plan to specificyield curves at the plan’s measurement date and determine a level equivalent yield that may be unique to each plan. A lower discount rateincreases the present value of benefit obligations and increases pension expense. To determine the expected long-term rate of return onpension plan assets, we consider the current and expected asset allocations, as well as historical and expected returns on variouscategories of plan assets. Other assumptions involve demographic factors such as retirement, mortality, and turnover. Theseassumptions are evaluated periodically and are updated to reflect our experience. Actual results in any given year will often differ fromactuarial assumptions because of economic and other factors. In such cases, the differences between actual results and actuarialassumptions are amortized over future periods. 35 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 thatour 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 volumetricshare 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 itscorporate 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 isboth 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. Amountsrecorded 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 possibleaggregate 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 partysites or indemnification of our liability by a third party. Recent Accounting Pronouncements In June 2011, the FASB issued amendments to existing standards for reporting comprehensive income. Accounting Standards Update(ASU) 2011-05 revises the manner in which companies present comprehensive income. Under ASU 2011-05, companies may presentcomprehensive income, which is net income adjusted for the components of other comprehensive income, either in a single, continuousstatement of comprehensive income or by using two separate but consecutive statements. Regardless of the alternative chosen,companies must display adjustments for items reclassified from other comprehensive income into net income within the presentation ofboth net income and other comprehensive income. ASU 2011-05 requires retrospective application. The amendments were adopted by theCompany effective April 1, 2012. The adoption affects only the display of those components of equity categorized as othercomprehensive income and does not change existing recognition and measurement requirements that determine net earnings. The Companyhas elected to present two separate but consecutive statements. In September 2011, the FASB issued ASU 2011-08, which intended to reduce complexity and costs by allowing an entity the option tomake a qualitative evaluation about the likelihood of goodwill impairment to determine whether it should calculate the fair value of areporting unit. The ASU also expands upon the examples of events and circumstances that an entity should consider between annualimpairment tests in determining whether it is more likely than not that the fair value of a reporting unit is less than its carryingamount. The ASU is effective for fiscal years beginning after December 15, 2011, with early adoption permitted. We adopted the ASUeffective April 1, 2012. The adoption did not have any material impact on our consolidated financial statements. In December 2011, the FASB issued ASU 2011-12, which effectively defers the changes in ASU 2011-05 that relate to thepresentation of reclassification out of accumulated other comprehensive income. All other requirements of ASU 2011-05 are not affectedby this update. We adopted the ASU effective April 1, 2012. The adoption did not have any material impact on our consolidated financialstatements. 36 In July 2012, the FASB issued ASU 2012-02, which intended to reduce complexity and costs by allowing an entity the option to make aqualitative evaluation about the likelihood of impairment of indefinite-lived intangibles assets to determine whether it should perform adetailed annual impairment test to support the value of indefinite-lived intangible assets. The ASU is effective for fiscal years andinterim periods within those years beginning after September 15, 2012, with early adoption permitted. We will adopt the ASU effectiveApril 1, 2013. The adoption is not expected to have any material impact on our consolidated financial statements. In February 2013, the FASB issued ASU 2013-02, which is intended to improve the reporting of reclassifications out of accumulatedother comprehensive income. Among other things, an entity would be required to present, either parenthetically on the face of thefinancial statements or in the notes thereto, significant amounts reclassified from each component of accumulated other comprehensiveincome and the income statement line items affected by such reclassifications. The standard is effective for annual periods, and interimperiods within those periods, beginning after December 15, 2012. We will adopt the ASU during the first quarter of fiscal year 2014. Wedo not expect the adoption to have a material impact on our financial statements, as the ASU increases disclosure requirements but doesnot affect the recognition or measurement of amounts in the financial statements. Relationship with Kyocera and Related Transactions Kyocera is the majority stockholder of AVX. As of May 13, 2013, Kyocera owned beneficially and of record 121,800,000 shares ofcommon 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%, or39,300,000 shares of AVX's common stock, and AVX sold an additional 4,400,000 shares of common stock, in a public offering. InFebruary 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 Note14 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 ofproducts manufactured by Kyocera in that product offering is a significant component of this advantage. In addition, the exchange ofinformation with Kyocera relating to the development and manufacture of multi-layer ceramic capacitors and various other ceramicproducts benefits AVX. An adverse change in our relationship with Kyocera could have a negative impact on our results ofoperations. AVX and Kyocera have executed several agreements that 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, andChristiansen), reviews and approves any significant agreements between AVX and Kyocera and any significant transactions betweenAVX and Kyocera not covered by such agreements. The committee is also responsible for reviewing and approving any agreements andtransactions between AVX and any other related party that are or may be within the scope of applicable rules, regulations and guidancecharter which sets forth the policies and procedures for such approvals. In approving any such agreement or transaction pursuant toan independent unrelated party would agree at arm’s-length or are otherwise in the best interests of the Company and its stockholdersgenerally. Each of the agreements described below contains provisions requiring that the terms of any transaction under such agreementbe equivalent to those to which an independent unrelated party would agree at arm's-length. Products Supply and Distribution Agreement. Pursuant to the Products Supply and Distribution Agreement (the “DistributionAgreement”) (i) AVX will act as the non-exclusive distributor of certain Kyocera-manufactured products to certain customers in certainterritories outside of Japan and (ii) Kyocera will act as the non-exclusive distributor of certain AVX-manufactured products withinJapan. The Distribution Agreement has a term of one year, with automatic one-year renewals, subject to the right of termination byeither party at the end of the then current term upon at least three months prior written notice. 37 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 andvarious other ceramic products, as well as the license of technologies in certain circumstances. The License Agreement has a term of onesix months prior written notice. Materials Supply Agreement. Pursuant to the Materials Supply Agreement (the “Supply Agreement”), AVX and Kyocera will, from timeto time, supply the other party with certain raw and semi-processed materials used in the manufacture of capacitors and other electroniccomponents. The Supply Agreement has a term of one year, with automatic one-year renewals, subject to the right of termination byeither 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 PurchaseAgreement”), AVX and Kyocera will, from time to time, design and manufacture for the other party certain equipment and machinery of aproprietary and confidential nature used in the manufacture of capacitors and other electronic components. The Machinery PurchaseAgreement has a term of one year, with automatic one-year renewals, subject to the right of termination by either party at the end of thethen 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 incurrencies other than the U.S. dollar. Although we use financial instruments to hedge certain foreign currency risks, we are not fullyprotected against foreign currency fluctuations and our reported results of operations could be affected by changes in foreign currencyexchange rates. International revenues and expenses transacted by our foreign subsidiaries may be denominated in local currency. SeeNote 13 to the consolidated financial statements elsewhere herein for further discussion of derivative financial instruments. For fiscal 2013, our exposure to foreign currency exchange risk was estimated using a sensitivity analysis, which illustrates ahypothetical change in the average foreign currency exchange rates used during the year. Actual changes in foreign currency exchangerates may differ from this hypothetical change. Based on a hypothetical increase or decrease of 10% in the exchange rates, assuming nohedging against foreign currency rate changes, we would have incurred an additional foreign currency gain or loss of approximately $16.4million in fiscal 2013. 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. The tantalum required tomanufacture our products has generally been available in sufficient quantity. The limited number of tantalum material suppliers has ledto 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 IndependentRegistered Public Accounting Firm thereon, are presented beginning on page 43 of this report: Consolidated Balance Sheets, March 31, 2012 and 2013 45Consolidated Statements of Operations, Years Ended March 31, 2011, 2012, and 2013 46Consolidated Statements of Comprehensive Income (Loss), Years Ended March 31, 2011, 2012, and 2013 47Consolidated Statements of Stockholders’ Equity, Years Ended March 31, 2011, 2012, and 2013 48Consolidated Statements of Cash Flows, Years Ended March 31, 2011, 2012, and 2013 49Notes to Consolidated Financial Statements 50Report of Independent Registered Public Accounting Firm 79 38  All financial statement schedules are omitted because of the absence of the conditions under which they are required or because theinformation 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 SecuritiesExchange Act of 1934, as amended (“the Exchange Act”)), that are designed to ensure that information required to be disclosed in theCompany’s reports under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’srules and forms, and that such information is accumulated and communicated to management, including the Company’s Chief ExecutiveOfficer (“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, 2013, an evaluation was performed underthe supervision and with the participation of the Company’s management, including the CEO and CFO, of the effectiveness of theCompany’s disclosure controls and procedures. Based on the evaluation, the Company’s CEO and CFO concluded that the Company’sdisclosure controls and procedures were effective as of March 31, 2013 to ensure that information required to be disclosed by theCompany in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported, within the timeperiods specified in the SEC’s rules and forms and is accumulated and communicated to the Company’s management, including the CEOand 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 processdesigned by, or under the supervision of, the Company’s principal executive and principal financial officers and effected by the Company’sBoard of Directors, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includesthose policies and procedures that (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts andexpenditures 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 theCompany’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 ofchanges 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 31,2013. In making its assessment, the Company’s management used the criteria set forth by the Committee of Sponsoring Organizationsof the Treadway Commission in Internal Control-Integrated Framework. Based on the results of this assessment, management, includingthe CEO and CFO, has concluded that the Company’s internal control over financial reporting was effective as of the end of its fiscalyear ended March 31, 2013. PricewaterhouseCoopers LLP, our independent registered public accounting firm, has issued an attestation report on the Company’sinternal control over financial reporting as of March 31, 2013, as stated in their report, which appears in this Form 10-K. 39 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 quarterthat have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Item 9B.Other Information None PART III Item 10.Directors, Executive Officers, and Corporate Governance Information required by this item with respect to our directors, the committees of the Board of Directors, corporate governance andcompliance by our directors, executive officers, and certain beneficial owners of our common stock with Section 16(a) of the ExchangeAct is provided by incorporation by reference to information under the captions entitled “Proposal I Election of Directors”, “Board ofDirectors – Governance”, “Board of Directors – Meetings Held and Committees” and “Section 16(a) Beneficial Ownership ReportingCompliance” in the Company's definitive proxy statement for the 2013 Annual Meeting of Stockholders (the “Proxy Statement”) andperhaps elsewhere therein. Information required by this item relating to our executive officers also appears in Item 1 of Part I of thisForm 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 ofBusiness Conduct and Ethics Supplement Applicable to the Chief Executive Officer, Chief Financial Officer, Controllers and FinancialManagers have been posted on our website. We will post on our website any amendments to, or waivers from, a provision of the Codeof Business Conduct and Ethics or the Supplement Applicable to the Chief Executive Officer, Chief Financial Officer, Controllers andFinancial Managers that applies to our principal executive officer, principal financial officer, principal accounting officer, or controller, orpersons 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 thecode; 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 “DirectorCompensation”, “Compensation Committee Interlocks and Insider Participation”, “Compensation Committee Report”, “CompensationDiscussion and Analysis”, and “Executive Compensation” in the Proxy Statement and perhaps elsewhere therein. Item 12.Security Ownership of Certain Beneficial Owners and Management and RelatedStockholder 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 BeneficialOwners” and “Equity Compensation Plan Information” in the Proxy Statement and perhaps elsewhere therein. Item 13.Certain Relationships and Related Transactions, and Director Independence 40 The information required by this item is provided by incorporation by reference to information under the caption “Relationship withKyocera 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 ofthe Audit Committee – Principal Independent Registered Public Accounting Firm Fees” in the Proxy Statement and perhaps elsewheretherein.PART IV Item 15.Exhibits and Financial Statement Schedules (a)Financial Statements and Financial Statement Schedules ‑ See Index to Consolidated FinancialStatements 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 filewith 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 (FileNo. 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 CurrentReport on Form 8-K filed with the Securities and Exchange Commission on May 11, 2012).*10.1Amended AVX Corporation 1995 Stock Option Plan as amended through October 24, 2000 (incorporated by reference toExhibit 10.11 to the Quarterly Report on Form 10-Q of the Company for the quarter ended December 31, 2000).*10.2Amended Non‑Employee Directors’ Stock Option Plan as amended through February 4, 2003 (incorporated by reference toExhibit 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 byreference to Exhibit 10.4 to the Annual Report on Form 10-K of the Company for the year ended March 31, 2000).*10.4AVX Nonqualified Supplemental Retirement Plan Amended and Restated effective January 1, 2008 (the AVX CorporationSERP was merged into this plan effective January 1, 2005) (incorporated by reference to Exhibit 10.4 to the Annual Reporton Form10-K of the Company for the year ended March 31, 2009).*10.5Employment Agreement between AVX Corporation and John S. Gilbertson dated December 19, 2008 (incorporated byreference to Exhibit 10.10 to the Quarterly Report on Form 10-Q of the Company for the quarter ended December 31, 2008).*10.6AVX Corporation 2004 Stock Option Plan as amended through July 23, 2008 (incorporated by reference to Exhibit 10.11 tothe Annual Report on Form 10-K of the Company for the year ended March 31, 2004).*10.7AVX Corporation 2004 Non-Employee Directors’ Stock Option Plan as amended through July 28, 2008 (incorporated byreference to Exhibit 10.12 to the Annual Report on Form 10-K of the Company for the year ended March 31, 2004).*10.8Form of Notice of Grant of Stock Options and Option Agreement for awards pursuant to AVX Corporation 2004 StockOption Plan and AVX Corporation 2004 Non-Employee Directors’ Stock Option Plan*10.9AVX Corporation Management Incentive Plan (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form10-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 byreference 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 toExhibit 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 Companywith 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 AVXCorporation. (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of the Company filed with theSecurities 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 theCompany for the year ended March 31, 2010).10.15 Form of Director and Officer Indemnification (incorporated by reference to Exhibit 10.16 to the Annual Report on Form 10-Kof the Company for year ended March 31, 2010). 10.16 Supplemental Consent Decree with Defendant AVX Corporation containing agreement among the Company, the UnitedStates Environmental Protection Agency and the Commonwealth of Massachusetts, dated October 10, 2012 (incorporated byreference to Exhibit 99.2 to Current Report on Form 8-K, filed October 11, 2012).*10.17AVX Corporation 2014 Stock Option Plan.*10.18AVX Corporation 2014 Non-Employee Directors’ Stock Option Plan.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. Gilbertson31.2 Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer – Kurt P. Cummings32.1 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.41 42  43 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused thisreport to be signed on its behalf by the undersigned, thereunto duly authorized. AVX Corporationby: /s/ Kurt P. CummingsKURT P. CUMMINGSVice President, Chief Financial Officer, Treasurer and SecretaryDated: May 22, 2013 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 TitleDate* Kazuo Inamori Chairman Emeritus of the BoardMay 22, 2013* John S. Gilbertson Chairman of the Board and Chief Executive OfficerMay 22, 2013* Tetsuo Kuba DirectorMay 22, 2013* Makoto Kawamura DirectorMay 22, 2013* Shoichi Aoki DirectorMay 22, 2013* Donald B. Christiansen DirectorMay 22, 2013* David DeCenzo DirectorMay 22, 2013* Tatsumi Maeda DirectorMay 22, 2013* Joseph Stach DirectorMay 22, 2013 * by: /s/ Kurt P. Cummings KURT P. CUMMINGS, Attorney‑in‑Fact for each of the persons indicated 44 AVX Corporation and SubsidiariesConsolidated Balance Sheets(in thousands, except per share data) March 31,Assets 2012 2013Current assets: Cash and cash equivalents $395,284 $486,724 Short-term investments in securities 418,133 560,364 Accounts receivable - trade, net 206,170 200,147 Accounts receivable - affiliates 1,883 1,884 Inventories 566,117 559,074 Income taxes receivable 14,988 15,060 Deferred income taxes 85,787 81,316 Prepaid and other 38,783 40,964 Total current assets 1,727,145 1,945,533 Long-term investments in securities 238,112 15,576 Property and equipment: Land 34,290 41,635 Buildings and improvements 311,038 348,028 Machinery and equipment 1,081,098 1,219,657 Construction in progress 23,555 18,344 1,449,981 1,627,664 Accumulated depreciation (1,213,493) (1,369,400) 236,488 258,264 Goodwill 162,707 199,372 Intangible assets, net 78,221 73,832 Deferred income taxes - non-current 14,493 100,915 Other assets 10,846 8,503 Total Assets $2,468,012 $2,601,995 Liabilities and Stockholders' Equity Current liabilities: Accounts payable - trade $43,719 $49,104 Accounts payable - affiliates 60,078 66,083 Income taxes payable 13,815 1,434 Deferred income taxes 547 1,067 Accrued payroll and benefits 38,333 40,661 Accrued expenses 140,581 172,528 Total current liabilities 297,073 330,877 Pensions 22,337 35,945 Deferred income taxes - non-current 2,270 3,510 Other liabilities 25,579 258,733 Total non-current liabilities 50,186 298,188 Total Liabilities 347,259 629,065 Commitments and contingencies (Note 12) Stockholders' Equity: Preferred stock, par value $.01 per share: - -Authorized, 20,000 shares; None issued and outstanding Common stock, par value $.01 per share: 1,764 1,764 Authorized, 300,000 shares; issued, 176,368 shares; outstanding, 169,601 and 168,633 shares for 2012 and 2013, respectively Additional paid-in capital 349,474 350,791 Retained earnings 1,838,140 1,723,070 Accumulated other comprehensive income (loss) 19,363 (4,331)Treasury stock, at cost, (87,988) (98,364)6,768 and 7,735 shares for 2012 and 2013, respectively Total Stockholders' Equity 2,120,753 1,972,930 Total Liabilities and Stockholders' Equity $2,468,012 $2,601,995 See accompanying notes to consolidated financial statements.45  AVX Corporation and SubsidiariesConsolidated Statements of Operations(in thousands, except per share data) Years Ended March 31, 2011 2012 2013Net sales $1,653,176 $1,545,254 $1,414,400 Cost of sales 1,195,790 1,153,295 1,150,630 Gross profit 457,386 391,959 263,770 Selling, general and administrative expenses 123,887 116,408 117,365 Environmental charges 8,575 100,000 266,250 Profit (loss) from operations 324,924 175,551 (119,845)Other income (expense): Interest income 6,569 6,798 7,021 Interest expense - (707) (2,262)Other, net 2,766 (1,737) 1,764 Income (loss) before income taxes 334,259 179,905 (113,322)Provision for (benefit from) income taxes 90,256 27,100 (49,010)Net income (loss) $244,003 $152,805 $(64,312) Income (loss) per share: Basic $1.44 $0.90 $(0.38)Diluted $1.43 $0.90 $(0.38) Dividends declared $0.1900 $0.2800 $0.3125 Weighted average common shares outstanding: Basic 170,025 169,886 169,124 Diluted 170,390 170,134 169,124 See accompanying notes to consolidated financial statements.46 AVX Corporation and SubsidiariesConsolidated Statements of Comprehensive Income (Loss)(in thousands) Years Ended March 31, 2011 2012 2013Net income (loss) $244,003 $152,805 $(64,312)Other comprehensive income (loss), net of income taxes Foreign currency translation adjustment 21,993 (13,382) (10,249)Foreign currency cash flow hedges adjustment 369 (726) 356 Pension liability adjustment 1,146 (7,617) (13,801)Unrealized gain (loss) on available-for-sale securities 409 (86) -Other comprehensive income (loss), net of income taxes 23,917 (21,811) (23,694)Comprehensive income (loss) $267,920 $130,994 $(88,006) See accompanying notes to consolidated financial statements.47 AVX Corporation and SubsidiariesConsolidated Statements of Stockholders’ Equity(in thousands, except per share data) Accumulated Common Stock Additional Other Number Treasury Paid-In Retained Comprehensive Of Shares Amount Stock Capital Earnings Income (Loss) TotalBalance, March 31, 2010 170,074 $1,764 $(81,137) $345,305 $1,517,818 $17,257 $1,801,007 Net income - - - - 244,003 - 244,003 Other comprehensive income, net of income taxes - - - - - 23,917 23,917 Dividends of $0.19 per share - - - - (32,314) - (32,314)Stock-based compensation expense - - - 2,475 - - 2,475 Stock option activity 513 - 6,638 (632) - - 6,006 Tax benefit of stock option exercises - - - 516 - - 516 Treasury stock purchased (445) - (6,193) - - - (6,193)Balance, March 31, 2011 170,142 $1,764 $(80,692) $347,664 $1,729,507 $41,174 $2,039,417 Net income - - - - 152,805 - 152,805 Other comprehensive loss, net of income taxes - - - - - (21,811) (21,811)Dividends of $0.28 per share - - - - (44,172) - (44,172)Stock-based compensation expense - - - 1,816 - - 1,816 Stock option activity 84 - 1,098 (101) - - 997 Tax benefit of stock option exercises - - - 95 - - 95 Treasury stock purchased (625) - (8,394) - - - (8,394)Balance, March 31, 2012 169,601 $1,764 $(87,988) $349,474 $1,838,140 $19,363 $2,120,753 Net loss - - - - (64,312) - (64,312)Other comprehensive loss, net of income taxes - - - - - (23,694) (23,694)Dividends of $0.30 per share - - - - (50,758) - (50,758)Stock-based compensation expense - - - 1,358 - - 1,358 Stock option activity 16 - 204 (49) - - 155 Tax benefit of stock option exercises - - - 8 - - 8 Treasury stock purchased (984) - (10,580) - - - (10,580)Balance, March 31, 2013 168,633 $1,764 $(98,364) $350,791 $1,723,070 $(4,331) $1,972,930 See accompanying notes to consolidated financial statements.48 AVX Corporation and SubsidiariesConsolidated Statements of Cash Flows (in thousands) Years Ended March 31, 2011 2012 2013Operating Activities: Net income (loss) $244,003 $152,805 $(64,312)Adjustment to reconcile net income (loss) to net cash from operating activities: Depreciation and amortization 47,619 46,890 46,871 Stock-based compensation expense 2,475 1,816 1,358 Deferred income taxes 8,492 (56,456) (76,408)Loss on available-for-sale securities 55 572 -Loss on disposal of property, plant & equipment, net of retirements 594 648 219 Changes in operating assets and liabilities: Accounts receivable (37,792) 25,730 14,625 Inventories (135,223) (74,007) 17,586 Accounts payable and accrued expenses 41,640 55,232 45,224 Income taxes 3,220 2,759 (12,433)Other assets (10,108) (7,757) 887 Other liabilities (12,880) 190 221,178 Net cash provided by operating activities 152,095 148,422 194,795 Investing Activities: Purchases of property and equipment (27,470) (49,201) (43,705)Purchase of business, net of cash acquired - - (79,608)Sales of available-for-sale securities 8,374 5,686 -Purchases of investment securities (923,482) (1,162,317) (675,394)Redemptions of investment securities 785,337 1,125,616 755,610 Proceeds from property, plant & equipment dispositions 7 - 1,851 Other investing activities (120) (127) (170)Net cash used in investing activities (157,354) (80,343) (41,416)Financing Activities: Dividends paid (32,314) (44,172) (50,758)Purchase of treasury stock (6,193) (8,394) (10,580)Proceeds from exercise of stock options 6,006 997 155 Excess tax benefit from stock-based payment arrangements 516 95 8 Net cash used in financing activities (31,985) (51,474) (61,175)Effect of exchange rate changes on cash 620 (671) (764)Increase (decrease) in cash and cash equivalents (36,624) 15,934 91,440 Cash and cash equivalents at beginning of period 415,974 379,350 395,284 Cash and cash equivalents at end of period $379,350 $395,284 $486,724 See accompanying notes to consolidated financial statements.49 AVX Corporation and SubsidiariesNotes 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 andinterconnect products. Our consolidated financial statements of AVX Corporation (“AVX” or “the Company”) include all accounts ofthe Company and its 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, 2013,Kyocera owned approximately 72% of our outstanding shares of common stock. Use of Estimates: The consolidated financial statements are prepared on the basis of U.S. generally accepted accounting principles. The preparation ofthese financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities andthe disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues andexpenses during the reported periods. We base our estimates and judgments on historical experience and on various other factors thatare believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carryingvalues of assets and liabilities that are not readily apparent from other sources. There can be no assurance that actual results will notdiffer 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 cashequivalents. 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 securitiesinvestments are recorded as interest income. 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 suchwrite-down should occur in the current period. Accordingly, at the end of each period, we evaluate our inventory and adjust to netrealizable value. We review and adjust the carrying value of our inventories based on historical usage, customer forecasts receivedfrom marketing and sales personnel, customer backlog, certain date code restrictions, technology changes, demand increases anddecreases, 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 balancemethod. Buildings are depreciated on the straight‑line method. The estimated useful lives used for computing depreciation are asfollows: buildings and improvements – 10 to 31.5 years, machinery and equipment – 3 to 10 years. Depreciation expense was $43,220, $42,499 and $42,480 for the fiscal years ended March 31, 2011, 2012 and 2013, respectively. We review long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of anysuch assets may not be recoverable. If the sum of the undiscounted cash flows is less than the carrying value of the related assets, werecognize an impairment loss, measured as the amount by which the carrying value exceeds the fair value of the assets. 50 The cost of maintenance and repairs is charged to expense as incurred. Upon disposal or retirement, the cost and accumulateddepreciation 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 orwhenever conditions indicate that such impairment could exist. The carrying value of goodwill and indefinite-lived intangible assets arethe 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-livedintangible assets impairment analysis indicated that there was no related impairment for the fiscal years ended March 31, 2011, 2012, or2013. During the year ended March 31, 2012, goodwill increased by an immaterial amount due the effects of foreign currencytranslation. During the year ended March 31, 2013, goodwill increased due to the Nichicon Tantalum acquisition described in Note 9 tothe consolidated financial statements and by an immaterial amount due to the effects of foreign currency translation. We have determined that certain intangible assets have finite useful lives. These assets are being amortized on a straight-linebasis over their estimated useful lives. Amortization expense was $4,399, 4,391, and $4,391 for the fiscal years ended March 31,2011, 2012, and 2013, respectively. March 31, 2012 March 31, 2013 Gross CarryingAmount AccumulatedAmortization Gross CarryingAmount AccumulatedAmortizationAmortized intangible assets Customer relationships $51,000 $(12,750) $51,000 $(15,583)Developed technology and other 12,848 (6,877) 12,848 (8,433)Total $63,848 $(19,627) $63,848 $(24,016) The estimated amortization expense is $4,183, $3,653, $3,332, $3,332, and $3,263 for the fiscal years ended March 31, 2014, 2015,2016, 2017, and 2018, respectively. Gross Carrying Amount March 31, 2012 March 31, 2013Unamortized intangible assets Trade name and trademarks $34,000 $34,000 Total $34,000 $34,000 Pension Assumptions: Pension benefit obligations and the related effects on our results of operations are calculated using actuarial models. Two criticalassumptions, discount rate and expected rate of return on plan assets, are important elements of plan expense and/or liabilitymeasurement. We evaluate these assumptions at least annually. The discount rate enables us to state expected future cash flows at apresent value on the measurement date. To determine the discount rate, we apply the expected cash flows from each individual pensionplan 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 presentvalue 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 ashistorical and expected returns on various categories of plan assets. Other assumptions involve demographic factors such asretirement, mortality, and turnover. These assumptions are evaluated at least annually and are updated to reflect our experience. Actualresults in any given year will often differ from actuarial assumptions because of economic and other factors. In such cases, thedifferences between actual results and actuarial assumptions are amortized over future periods. 51 Income Taxes: As part of the process of preparing the consolidated financial statements, we are required to estimate tax assets and liabilities ineach of the jurisdictions in which we operate. This process involves estimating the actual current tax exposure together with assessingtemporary differences resulting from different treatment of items for tax and accounting purposes. These differences result in deferredtax assets and liabilities that are included within the consolidated balance sheets. We assess the likelihood that our deferred tax assetswill be recoverable bed on all available evidence, both positive and negative. To the extent we believe that recovery is not more likelythan not, 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, primarilyconsisting of certain net operating losses carried forward before they expire. The valuation allowance is based on estimates of futuretaxable income over the periods that deferred tax assets will be recoverable. We also record a provision for certain international, federal, and state tax contingencies based on the likelihood of obligation, whenneeded. In the normal course of business, we are subject to challenges from U.S. and non-U.S. tax authorities regarding the amount oftaxes due. These challenges may result in adjustments of the timing or amount of taxable income or deductions or the allocation ofincome among tax jurisdictions. Further, during the ordinary course of business, other changing facts and circumstances may impact ourability to utilize tax benefits as well as the estimated taxes to be paid in future periods. We believe that any potential tax exposureshave 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 theimpact of a tax position, if that position would “more likely than not” be sustained on audit, based on the technical merits of theposition. 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 ourU.S. income tax returns, as these deductions are subject to recapture provisions in the U.S. income tax code. When the recapture periodexpires 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 atthe exchange rate in effect at the balance sheet date. Operating accounts are translated at an average rate of exchange for therespective accounting periods. Translation adjustments result from the process of translating foreign currency financial statements intoU.S. dollars and are reported separately as a component of accumulated other comprehensive income (loss). Transaction gains and lossesreflected in the functional currencies are reported in our results of operations 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 fairvalue depends upon the purpose of the derivative instrument and whether it is designated and qualifies for hedge accounting. Forinstruments designated as hedges, the effective portion of gains or losses is reported in other comprehensive income (loss) and isreclassified into the statement of operations in the same period during which the hedged transaction affects our results of operations. Any contracts that do not qualify as hedges, for accounting purposes, are marked to market with the resulting gains and lossesrecognized 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 foreigncurrencies. The purpose of our foreign currency management is to minimize the effect of exchange rate changes on actual cash flows from foreigncurrency denominated transactions. See Note 13 for further discussion of derivative financial instruments. 52 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 shipproducts to customers based upon firm orders. Shipping and handling costs are included in cost of sales. We recognize revenue when thesales 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 reasonablyassured. Estimates used in determining sales allowance programs described below are subject to the volatilities of themarketplace. This includes, but is not limited to, changes in economic conditions, pricing changes, product demand, inventory levels in thesupply chain, the effects of technological change, and other variables that might result in changes to our estimates. Accordingly, therecan 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 requiredpayments. The allowance is determined through an analysis of the aging of accounts receivable and assessments of risk that are basedon historical trends and an evaluation of the impact of current and projected economic conditions. We evaluate the past-due status oftrade receivables based on contractual terms of sale. If the financial condition of our customers were to deteriorate, resulting in animpairment of their ability to make payments, additional allowances may be required. Returns Sales revenue and cost of sales reported in the statement of operations are reduced to reflect estimated returns. We record anestimated sales allowance for returns at the time of sale based on historical trends, current pricing and volume information, other marketspecific information, and input from sales, marketing, and other key management personnel. The amount accrued reflects the return ofvalue of the customer’s inventory. These procedures require the exercise of significant judgments. We believe that these proceduresenable us to make reliable estimates of future returns. Our actual results have historically approximated our estimates. When theproduct 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 salesprograms. We report provisions for distributor allowances in connection with such sales programs as a reduction in revenue and reportdistributor allowances in the balance sheet as a reduction in accounts receivable. For the distribution programs described below, we donot track the individual units that are recorded against specific products sold from distributor inventories, which would allow us todirectly compare revenue reduction for credits recorded during any period with credits ultimately awarded in respect of products sold duringthat period. Nevertheless, we believe that we have an adequate basis to assess the reasonableness and reliability of our estimates foreach program. Distributor Stock Rotation Program Stock rotation is a program whereby distributor customers are allowed to return for credit qualified inventory, semi-annually, equal toa certain percentage, primarily limited to 5% of the previous six months net sales. We record an estimated sales allowance for stockrotation 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 personnel. These procedures require theexercise of significant judgments. We believe that these procedures enable us to make reliable estimates of future returns under thestock rotation program. Our actual results have historically approximated our estimates. When the product is returned and verified, thedistributor is given credit against their accounts receivable. 53 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 inthe marketplace on sales to their end customers. Ship and debit programs require a request from the distributor for a pricing adjustmentfor a specific part for a sale to the distributor’s end customer from the distributor’s stock. Ship and debit authorizations may covercurrent and future distributor activity for a specific part for sale to their customer. At the time we record sales to the distributors, weprovide an allowance for the estimated future distributor activity related to such sales since it is probable that such sales to distributorswill result in ship and debit activity. We record an estimated sales allowance based on sales during the period, credits issued todistributors, distributor inventory levels, historical trends, market conditions, pricing trends we see in our direct sales activity withoriginal equipment manufacturers and other customers, and input from sales, marketing, and other key management personnel. These proceduresrequire the exercise of significant judgments. We believe that these procedures enable us to make reliable estimates of future credits under the ship anddebit program. Our actual results have historically approximated 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 theseagreements, we provide an allowance for the discounts on the sales for which the customer is eligible. The customer then debits us forthe 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 willmake claims under warranties relating to products that have been sold and a reasonable estimate of costs can be made. The amountaccrued represents the direct costs of replacement and other potential costs resulting from product not meeting specifications above andbeyond the return value of the customer’s affected product purchases. Historically, valid warranty claims, which are a result of productsnot meeting specifications, have been immaterial to our results of operations. However, there is no guarantee that warranty claims inthe future will not increase, or be material to results of operations, as a result of manufacturing defects, end market product applicationfailures, 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 ofoperations 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 certainconditions 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 inselling, general, and administrative expenses and were $7,392, $7,716, and $7,150 for the fiscal years ended March 31, 2011, 2012, and2013, respectively. Engineering expenses are included in cost of sales and selling, general, and administrative expenses as follows: Years Ended March 31, 2011 2012 2013Engineering expense: Cost of sales $15,774 $18,156 $22,876 Selling, general, and administrative expense 517 456 441 Total engineering expense $16,291 $18,612 $23,317 54 Stock‑Based Compensation: We recognize compensation cost resulting from all share-based payment transactions in the financial statements. The amount ofcompensation cost is measured based on the grant-date fair value for the share-based payment issued. Our policy is to grant stockoptions with an exercise price equal to our stock price on the date of grant. Compensation cost is recognized over the vesting period ofthe award. We use the Black-Scholes-Merton option-pricing model to determine the fair value of options at the grant date. See Note 11 forassumptions used. Treasury Stock: Our Board of Directors has approved stock repurchase authorizations whereby up to 10,000 shares of common stock could bepurchased from time to time at the discretion of management. Accordingly, 445 shares were purchased during the fiscal year ended March31, 2011, 625 shares were purchased during the fiscal year ended March 31, 2012, and 984 shares were purchased during the fiscal yearended March 31, 2013. We purchased 276 shares of common stock during the fourth quarter of the fiscal year ended March 31, 2013. Asof March 31, 2013, we had in treasury 7,735 common shares at a cost of $98,364. There are 5,508 shares that may yet be purchasedunder 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 andthat no amount in the range of probable loss is considered most likely, the minimum loss in the range is accrued. Amounts recorded arereviewed periodically and adjusted to reflect additional legal and technical information that becomes available. Legal costs are expensedas incurred. New Accounting Standards: In June 2011, the FASB issued amendments to existing standards for reporting comprehensive income. Accounting Standards Update(ASU) 2011-05 revises the manner in which companies present comprehensive income. Under ASU 2011-05, companies may presentcomprehensive income, which is net income adjusted for the components of other comprehensive income, either in a single, continuousstatement of comprehensive income or by using two separate but consecutive statements. Regardless of the alternative chosen,companies must display adjustments for items reclassified from other comprehensive income into net income within the presentation ofboth net income and other comprehensive income. ASU 2011-05 requires retrospective application. The amendments were adopted by theCompany effective April 1, 2012. The adoption affects only the display of those components of equity categorized as othercomprehensive income and does not change existing recognition and measurement requirements that determine net earnings. The Companyhas elected to present two separate but consecutive statements. 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 aboutthe 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 eventsand 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 reportingunit is less than its carrying amount. The ASU is effective for fiscal years beginning after December 15, 2011, with early adoption permitted. We adopted the ASUeffective April 1, 2012. The adoption did not have any material impact on our consolidated financial statements. In December 2011, the FASB issued ASU 2011-12, which effectively defers the changes in ASU 2011-05 that relate to thepresentation of reclassification out of accumulated other comprehensive income. All other requirements of ASU 2011-05 are not affectedby this update. We adopted the ASU effective April 1, 2012. The adoption did not have any material impact on our consolidated financialstatements. In July 2012, the FASB issued ASU 2012-02, which intended to reduce complexity and costs by allowing an entity the option to make aqualitative evaluation about the likelihood of impairment of indefinite-lived intangibles assets to determine whether it should perform adetailed annual impairment test to support the value of indefinite-lived intangible assets. The ASU is effective for fiscal years andinterim periods within those years beginning after September 15, 2012, with early adoption permitted. We will adopt the ASU effectiveApril 1, 2013. The adoption is not expected to have any material impact on our consolidated financial statements. 55 In February 2013, the FASB issued ASU 2013-02, which is intended to improve the reporting of reclassifications out of accumulatedother comprehensive income. Among other things, an entity would be required to present, either parenthetically on the face of thefinancial statements or in the notes thereto, significant amounts reclassified from each component of accumulated other comprehensiveincome and the income statement line items affected by such reclassifications. The standard is effective for annual periods, and interimperiods within those periods, beginning after December 15, 2012. We will adopt the ASU during the first quarter of fiscal year 2014. Wedo not expect the adoption to have a material impact on our financial statements, as the ASU increases disclosure requirements but doesnot affect the recognition or measurement of amounts in the financial statements. We have reviewed other newly issued accounting pronouncements and concluded that they are either not applicable to our business orthat no material effect is expected on our consolidated financial statements as a result of future adoption. 2.Earnings Per Share: Basic earnings per share are computed by dividing net earnings by the weighted average number of shares of common stockoutstanding for the period. Diluted earnings per share are computed by dividing net earnings by the sum of (a) the weighted averagethe 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 stockequivalents outstanding for the years ended March 31, 2011, 2012, and 2013: Years Ended March 31, 2011 2012 2013Net income (loss) $244,003 $152,805 $(64,312)Computation of Basic EPS: Weighted Average Shares Outstanding used in Computing Basic EPS 170,025 169,886 169,124 Basic earnings (loss) per share $1.44 $0.90 $(0.38)Computation of Diluted EPS: Weighted Average Shares Outstanding used in Computing Basic EPS 170,025 169,886 169,124 Effect of stock options 365 248 -Weighted Average Shares used in Computing Diluted EPS (1) 170,390 170,134 169,124 Diluted income (loss) per share $1.43 $0.90 $(0.38) (1) Common stock equivalents not included in the computation of diluted earnings per share because the impact would have been anti-dilutive were2,601 shares, 2,761 shares, and 3,847 shares for the fiscal years ended March 31, 2011, 2012, and 2013, respectively. In addition, 50 shares ofcommon stock equivalents that would have been dilutive if we had income were excluded from the computation of diluted earnings per share due tothe Company’s net loss position for the fiscal year ended March 31, 2013. 3.Comprehensive Income: Comprehensive income (loss) includes the following components: Years Ended March 31, 2011 2012 2013 Pre-tax Net of Tax Pre-tax Net of Tax Pre-tax Net of TaxForeign currency translation adjustment$21,993 $21,993 $(13,382) $(13,382) $(10,249) $(10,249)Foreign currency cash flow hedges adjustment 513 369 (1,008) (726) 413 356 Pension liability adjustment 1,592 1,146 (10,579) (7,617) (18,600) (13,801)Unrealized gain (loss) on available-for-salesecurities 568 409 (119) (86) - -Other comprehensive income (loss)$24,666 $23,917 $(25,088) $(21,811) $(28,436) $(23,694) 56 The accumulated balance of comprehensive income (loss) is as follows: As of March 31, 2011 2012 2013Foreign currency translation adjustment$69,709 $56,327 $46,078 Foreign currency cash flow hedges adjustment (379) (1,105) (749)Pension liability adjustment (28,242) (35,859) (49,660)Unrealized gain on available-for-sale securities 86 - -Accumulated other comprehensive income (loss)$41,174 $19,363 $(4,331) 4.Fair Value:Fair Value Hierarchy: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 requiressignificant management judgment. The three levels are defined as follows: §Level 1: Unadjusted quoted prices in active markets for identical assets and liabilities. §Level 2: Observable inputs other than those included in Level 1. For example, quoted prices for similar assets or liabilities inactive markets or quoted prices for identical assets or liabilities in inactive markets. §Level 3: Unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability. During the fiscal years ended March 31, 2011, 2012, and 2013, there have been no transfers of assets between the levels within the fairvalue hierarchy. Based on Quoted prices Other in active observable Unobservable Fair Value at markets inputs inputs March 31, 2012 (Level 1) (Level 2) (Level 3)Assets measured at fair value on a recurring basis: Assets held in the non-qualified deferred compensationprogram(1) $9,150 $9,150 $ - $ -Foreign currency derivatives(2) 1,760 - 1,760 -Total $10,910 $9,150 $1,760 $ - 57  Based on Quoted prices Other in active observable Unobservable Fair Value at markets inputs inputs March 31, 2012 (Level 1) (Level 2) (Level 3)Liabilities measured at fair value on a recurring basis: Obligation related to assets held in the non-qualifieddeferred compensation program(1) $9,150 $9,150 $ - $ -Foreign currency derivatives(2) 3,541 - 3,541 -Total $12,691 $9,150 $3,541 $ - Based on Quoted prices Other in active observable Unobservable Fair Value at markets inputs inputs March 31, 2013 (Level 1) (Level 2) (Level 3)Assets measured at fair value on a recurring basis: Assets held in the non-qualified deferred compensationprogram(1) $7,043 $7,043 $ - $ -Foreign currency derivatives(2) 1,168 - 1,168 -Total $8,211 $7,043 $1,168 $ - Based on Quoted prices Other in active observable Unobservable Fair Value at markets inputs inputs March 31, 2013 (Level 1) (Level 2) (Level 3)Liabilities measured at fair value on a recurring basis: Obligation related to assets held in the non-qualifieddeferred compensation program(1) $7,043 $7,043 $ - $ -Foreign currency derivatives(2) 2,446 - 2,446 -Total $9,489 $7,043 $2,446 $ - (1) The market value of the assets held in the trust for the non-qualified deferred compensation program is included as an asset and as a liability as the trust’s assetsare both assets of the Company and also a liability as they are available to general creditors in certain circumstances. (2) Foreign currency derivatives in the form of forward contracts are included in accrued expenses in the March 31, 2012 and 2013 consolidated balance sheets.Unrealized gains and losses on derivatives classified as cash flow hedges are recorded in other comprehensive income (loss). Realized gains and losses on derivativesclassified as cash flow hedges and gains and losses on derivatives not designated as hedges are recorded in other income. Valuation Techniques: The following describes valuation techniques used to value our assets held in the non-qualified deferred compensation plan andderivatives. 58 Assets held in the non-qualified deferred compensation plan Assets valued using Level 1 inputs in the table above represent assets from our non-qualified deferred compensation program. Thefunds in the non-qualified deferred compensation program are valued based on the number of shares in the funds using a price per sharetraded in an active market. Investments are considered to be impaired when a decline in fair value is judged to be other-than-temporary. If the cost of aninvestment exceeds its fair value, among other factors, we evaluate general market conditions, the duration and extent to which the fairvalue is less than cost, our intent and ability to hold the investment, and whether or not we expect to recover the security’s entireamortized cost. Once a decline in fair value is determined to be other-than-temporary, an impairment charge is recorded and a new costbasis in the investment is established. Derivatives We primarily use forward contracts, with maturities generally less than four months, designated as cash flow hedges to protectagainst 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 balancesheet exposures. These derivatives are used to offset currency changes in the fair value of the hedged assets and liabilities. Fair valuesfor all of our derivative financial instruments are valued by adjusting the market spot rate by forward points, based on the date of thecontract. The spot rates and forward points used are an average rate from an actively traded market. At March 31, 2012 and 2013, all ofour forward contracts have been designated as Level 2 measurements. 5.Accounts Receivable: Years Ended March 31, 2012 2013Trade $228,396 $221,109 Less: Allowances for doubtful accounts 720 705 Ship from stock and debit and stock rotation 14,327 14,771 Sales returns and discounts 7,179 5,486 Total allowances 22,226 20,962 $206,170 $200,147 Charges related to allowances for doubtful accounts are charged to selling, general, and administrative expenses. Charges related tostock rotation, ship from stock and debit, sales returns, and sales discounts are reported as deductions from revenue. Years Ended March 31, 2011 2012 2013Allowances for doubtful accounts: Beginning Balance $563 $686 $720 Charges 521 (52) 127 Applications (398) 86 (142)Ending Balance $686 $720 $705 59  Years Ended March 31, 2011 2012 2013Ship from stock and debit and stock rotation: Beginning Balance $11,964 $13,340 $14,327 Charges 32,778 29,592 34,305 Applications (31,402) (28,812) (33,861)Translation and other - 207 -Ending Balance $13,340 $14,327 $14,771 Years Ended March 31, 2011 2012 2013Sales returns and discounts: Beginning Balance $6,681 $7,954 $7,179 Charges 29,223 21,512 18,477 Applications (27,956) (22,080) (20,129)Translation and other 6 (207) (41)Ending Balance $7,954 $7,179 $5,486 6.Inventories: Years Ended March 31, 2012 2013Finished goods $118,916 $119,793 Work in process 101,923 107,641 Raw materials and supplies 345,278 331,640 $566,117 $559,074 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, securitiesinvestments, 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 ofcredit 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. Asof March 31, 2013, we believe that our credit risk exposure is not significant. At March 31, 2012 and 2013 we classified investments in debt securities and time deposits as held-to-maturity securities. Our long-term and short-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 securitiesinvestments is recorded as interest income. 60 Investments in held-to-maturity securities, recorded at amortized cost, were as follows: March 31, 2012 Cost Gross UnrealizedGains Gross UnrealizedLosses Estimated FairValueShort-term investments: Commercial paper $6,800 $ - $(2) $6,798 Corporate bonds 40,638 138 - 40,776 Time deposits 370,695 - - 370,695 Long-term investments: Corporate bonds 68,061 229 (72) 68,218 U.S. government and agency securities 170,051 164 (154) 170,061 $656,245 $531 $(228) $656,548 March 31, 2013 Cost Gross UnrealizedGains Gross UnrealizedLosses Estimated FairValueShort-term investments: Commercial Paper $85,788 $ - $(69) $85,719 Corporate bonds 81,089 213 (4) 81,298 Time deposits 393,487 335 - 393,822 Long-term investments: Corporate bonds 15,576 100 - 15,676 $575,940 $648 $(73) $576,515 The amortized cost and estimated fair value of held-to-maturity investments at March 31, 2013, by contractual maturity, are shownbelow. The estimated fair value of these investments are based on valuation inputs that include benchmark yields, reported trades,broker and dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, and reference data, which are Level 2inputs in the fair value hierarchy. Actual maturities may differ from contractual maturities because issuers may have the right to call orprepay obligations without call or prepayment penalties. Held-to-Maturity Amortized Cost Estimated Fair ValueDue in one year or less $560,364 $560,839 Due after one year through five years 15,576 15,676 Total $575,940 $576,515 61 8.Income Taxes: For financial reporting purposes, income (loss) before income taxes includes the following components: Years Ended March 31, 2011 2012 2013Domestic $123,112 $1,463 $(192,584)Foreign 211,147 178,442 79,262 $334,259 $179,905 $(113,322) The provision for (benefit from) income taxes consisted of: Years Ended March 31, 2011 2012 2013Current: Federal/State $52,114 $33,166 $19,116 Foreign 40,819 43,471 9,712 92,933 76,637 28,828 Deferred: Federal/State (11,217) (52,093) (81,632)Foreign 8,540 2,556 3,794 (2,677) (49,537) (77,838) $90,256 $27,100 $(49,010) Deferred taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities forfinancial reporting purposes and the amounts used for income tax purposes. Significant components of our deferred tax assets andliabilities are as follows: March 31, 2012 2013Current: Assets Liabilities Assets LiabilitiesSales and receivable allowances $8,916 $ - $8,070 $ -Inventory reserves 11,765 381 14,416 4,022 Utilization of foreign tax credits 20,552 8,686 - -Accrued expenses and other 56,294 - 66,111 1,270 Sub total 97,527 9,067 88,597 5,292 Less: valuation allowances (3,220) - (3,056) -Total Current $94,307 $9,067 $85,541 $5,292 62  March 31, 2012 2013Non-current: Assets Liabilities Assets LiabilitiesDepreciation / amortization $18,498 $30,191 $9,291 $16,167 Pension obligations 15,431 - 17,958 -Accrued expenses - - 83,864 -Other, net 8,630 7,585 9,620 6,835 Net operating loss and tax credit carry forwards 77,001 - 88,160 -Sub total 119,560 37,776 208,893 23,002 Less: valuation allowances (69,561) - (88,486) -Total Non-current $49,999 $37,776 $120,407 $23,002 Aggregate deferred income tax amounts are summarized below: March 31, 2012 2013Assets, net of valuation allowances $144,306 $205,948 Liabilities (46,843) (28,294)Net deferred income tax assets $97,463 $177,654 Amounts included in our consolidated balance sheets: March 31, 2012 2013Current assets $85,787 $81,316 Current liabilities (547) (1,067)Noncurrent assets 14,493 100,915 Noncurrent liabilities (2,270) (3,510)Net deferred income tax assets $97,463 $177,654 Reconciliation between the U.S. Federal statutory income tax rate and our effective rate for income tax is as follows: Years Ended March 31, 2011 2012 2013U.S. Federal statutory rate35.0% 35.0% 35.0%Increase (decrease) in tax rate resulting from: State income taxes, net of federal benefit0.8 (0.7) 1.4Effect of foreign operations(8.2) (11.8) 10.1Change in valuation allowance0.9 (0.8) 0.1Foreign branch losses not subject to recapture(1.1) (0.9) -Deemed dividends from subsidiaries2.8 3.6 (4.6)Deduction for domestic production activities(1.1) (1.5) 2.4Change in state effective rate on deferred items, net - - (1.6)Utilization of foreign tax credits - (3.4) 2.6Other, net(2.1) (4.4) (2.2)Effective tax rate27.0% 15.1% 43.2% 63 At March 31, 2013, certain of our foreign subsidiaries in Brazil, France, Germany, Israel, and Taiwan had tax net operating losscarry forwards totaling approximately $263,582 of which most had no expiration date. This includes $47,303 of acquired net operatinglosses related to the acquisition of Nichicon Tantalum, described in Note 9. There is a greater likelihood of not realizing the future taxbenefits of these net operating losses and other deductible temporary differences in Brazil, France, Israel, and Taiwan since these lossesand 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 valuationallowances related to the net deferred tax assets in these jurisdictions. Valuation allowances increased (decreased) $3,049, $(6,727),and $44,222 during the years ended March 31, 2011, 2012, and 2013, respectively, as a result of changes in the net operating losses of theelated to thenet operating loss carry forwards acquired in the Nichicon Tantalum acquisition described in Note 9. The provision for income taxes in fiscal year 2012 was favorably impacted by a reduction of $1,575 of deferred tax liabilitiesresulting 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 theU.S. income tax recapture period on such foreign branch losses from 15 years to 5 years. At the present time, we expect that cash and profits generated by a majority of our foreign subsidiaries will continue to bereinvested indefinitely. We do not provide for U.S. taxes on the undistributed earnings of foreign subsidiaries which are considered to bereinvested indefinitely. The amount of U.S. taxes on such undistributed earnings as of March 31, 2012 and 2013 would have been$142,902 and $166,747, respectively.Income taxes paid totaled $81,505, $91,709 and $43,120 during the years ended March 31, 2011, 2012 and 2013, respectively. We do not expect that the balances with respect to our uncertain tax positions will significantly increase or decrease within the next12 months. For our more significant locations, we are subject to income tax examinations for the tax years 2009 and forward in theUnited States, 2009 and forward in Germany, 2006 and forward in Hong Kong, and 2007 and forward in the United Kingdom. A reconciliation of the beginning and ending balance for liabilities associated with uncertain tax positions is as follows: Balance at March 31, 2010$12,605 Additions for tax positions of prior years 2,825 Reductions for tax positions of prior years (2,917)Balance at March 31, 2011$12,513 Additions for tax positions of prior years 2,223 Additions for tax positions in current period 410 Reductions for tax positions of prior years (838)Reductions due to expiration of statutes (186)Reductions due to settlements with taxing authorities (966)Balance at March 31, 2012$13,156 Additions for tax positions of prior years 1,068 Additions for tax positions in current period 400 Reductions for tax positions of prior years (12)Reductions due to expiration of statutes (38)Reductions due to settlements with taxing authorities (372)Balance at March 31, 2013$14,202 We recognize interest and penalties related to uncertain tax positions in interest expense. As of March 31, 2012 and 2013, we hadaccrued interest and penalties related to uncertain tax positions of $1,311 and $1,626, respectively. During the year ended March 31, 2012and 2013, we recognized $707 and $315, respectively, in interest and penalties. 64 The amount of unrecognized tax benefits recorded on our balance sheet that, if recognized, would affect the effective tax rate isapproximately $13,156 and $14,202 at March 31, 2012 and 2013, respectively. This amount excludes the accrual for estimated interestdiscussed above. 9.Acquisitions On February 6, 2013, the Company acquired by merger all of the outstanding capital stock of the Tantalum Components Division ofNichicon Corporation. (“Nichicon Tantalum”) for $86,000 in cash. Nichicon Tantalum designs, develops, manufactures and marketstantalum electronic components. Nichicon Tantalum’s products are used in a broad range of commercial applications. Nichicon Tantalumhas manufacturing facilities located in Adogawa, Japan and Tianjin, China. The acquisition enhances our leadership position in thepassive electronic component industry and provides further opportunities for expansion in the Asian region and tantalum componentmanufacturing efficiencies. The Company has used the acquisition method of accounting to record the transaction in accordance with FASB Accounting StandardsCodification Topic 805, “Business Combinations”. In accordance with the purchase method, the purchase price is allocated to the assetsacquired and liabilities assumed based on their estimated fair values with the excess being allocated to goodwill. Factors thatcontributed to the recognition of goodwill include expected synergies and the trained workforce. The goodwill is not deductible for taxpurposes. As of March 31, 2013, the allocation of the purchase price was prepared based on estimates of fair values, as shown in the tablebelow. The purchase price allocation of assets and liabilities is preliminary and subject to change as we await the completion of the fairvalue appraisal of certain personal and real tangible assets as well as certain intangible assets. The results of operations for Nichicon Tantalum are included in the accompanyingconsolidated statement of operations since the acquisition date. Assets Acquired and Liabilities Assumed Accounts receivable $7,756 Inventory 15,100 Other current assets and liabilities (2,136)Working capital 20,720 Property and equipment 30,680 Pension liability (1,912)Total identified assets and liabilities 49,488 Purchase price 86,000 Goodwill $36,512 For the Company’s segment reporting, Nichicon Tantalum will be reported in the Tantalum product group within the PassiveComponents segment. Goodwill associated with the acquisition has been allocated to the Tantalum Products reporting unit. Had this acquisition occurred as of the beginning of the periods presented in these consolidated financial statements, the pro formastatements of operations would not be materially different than the consolidated statements of operations presented. 10.Employee Retirement Plans: Pension Plans: We sponsor various defined benefit pension plans covering certain employees. Pension benefits provided to certain U.S. employeescovered under collective bargaining agreements are based on a flat benefit formula. Effective December 31, 1995, we froze benefitaccruals under our domestic non‑contributory defined benefit pension plan for a significant portion of the employees covered undercollective bargaining agreements. Our pension plans for certain international employees provide for benefits based on a percentage offinal pay. Our funding policy is to contribute amounts sufficient to meet minimum funding requirements as set forth in employee benefitand tax laws. 65 We recognize the overfunded or underfunded status of our defined benefit postretirement plans as an asset or liability in ourincome. The adjustment to our pension liability due to the change in the funded status of our plans resulted in an increase in recordedpension liabilities by $4,369 during the fiscal year ended March 31, 2012, and an increase in recorded pension liabilities by $11,621 duringthe fiscal year ended March 31, 2013. The change in the benefit obligation and plan assets of the U.S. and international defined benefit plans for 2012 and 2013 were asfollows: Years Ended March 31, U.S. Plans International Plans 2012 2013 2012 2013Change in benefit obligation: Benefit obligation at beginning of year $32,555 $37,711 $121,997 $130,533 Service cost 365 434 488 501 Interest cost 1,735 1,651 6,452 6,067 Plan participants' contributions - - 121 86 Actuarial loss 4,839 2,383 8,352 26,071 Benefits paid (1,783) (1,864) (5,026) (4,976)Benefit obligation acquired during the year - - - 10,288 Foreign currency exchange rate changes - - (1,851) (5,879)Benefit obligation at end of year $37,711 $40,315 $130,533 $162,691 Change in plan assets: Fair value of plan assets at beginning of year $34,657 $34,173 $101,350 $111,157 Actual return on assets 1,299 2,613 7,731 14,190 Employer contributions - - 8,203 7,882 Plan participants' contributions - - 121 86 Benefits paid (1,783) (1,864) (5,026) (4,976)Plan assets acquired during the year - - - 8,392 Foreign currency exchange rate changes - - (1,222) (5,094)Fair value of plan assets at end of year 34,173 34,922 111,157 131,637 Funded status $(3,538) $(5,393) $(19,376) $(31,054) The accumulated benefit obligation at March 31, 2012 and 2013 was $167,901 and $202,639, respectively. At March 31, 2013, the accumulated benefit obligation exceeded the fair value of the assets for all of the U.S. defined benefit and allbut one of the international defined benefit plans. The Company’s assumptions used in determining the pension assets and liabilities were as follows: March 31, 2012 2013Assumptions: Discount rates 4.00-5.00% 1.00-4.20%Increase in compensation 3.80% 3.90% The following table shows changes in accumulated comprehensive income, excluding the effect of income taxes, related to amountsrecognized in other comprehensive income during fiscal 2012 and 2013 and amounts reclassified to the statement of operations as acomponent of net periodic pension cost during fiscal 2012 and 2013.66  Years Ended March 31, U.S. Plans International Plans 2012 2013 2012 2013Beginning balance $7,597 $13,069 $32,951 $38,230 Net loss incurred during the year 5,809 1,921 7,134 18,050 Amortization of net loss (327) (879) (1,458) (1,684)Amortization of prior service cost (10) (7) - -Exchange - - (397) (1,893) $13,069 $14,104 $38,230 $52,703 Amounts that have not yet been recognized as components of net periodic pension cost (as a component of accumulatedcomprehensive income (loss) at March 31, 2012 and 2013) are as follows: Years Ended March 31, U.S. Plans International Plans 2012 (1) 2013 (2) 2012 (1) 2013 (2)Unrecognized net actuarial loss $8,526 $9,027 $27,326 $40,533 Unamortized prior service cost 17 - - - $8,543 $9,027 $27,326 $40,533 (1) 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 theInternational Plans, respectively. (2) Amounts in the above table as of March 31, 2013 are net of $5,077 and $12,170 tax benefit for the U.S. Plans and for theInternational Plans, respectively. The March 31, 2013 balance of unrecognized net actuarial losses expected to be amortized in fiscal 2014 is $1,143 for the U.S. Plansand $2,590 for the International Plans, respectively. Net pension cost related to these pension plans includes the following components: Years Ended March 31, 2011 2012 2013Service cost $937 $855 $954 Interest cost 8,151 8,224 7,957 Expected return on plan assets (7,968) (8,629) (8,333)Amortization of prior service cost 10 10 7 Recognized actuarial loss 2,051 1,785 2,563 Net periodic pension cost $3,181 $2,245 $3,148 The Company's assumptions used in determining the net periodic pension expense were as follows: March 31, 2011 2012 2013Assumptions: Discount rates 5.05 - 5.75% 4.60 - 5.50% 1.00-5.00%Increase in compensation 4.25% 4.00% 3.80%Expected long-term rate of return on plan assets 6.50 - 7.25% 6.40 - 7.25% 1.35-7.25% 67  The pension expense is calculated based upon a number of actuarial assumptions established annually for each plan year, detailed inthe table above, including discount rate, rate of increase in future compensation levels, and expected long-term rate of return on planassets. To determine the discount rate, we apply the expected cash flows from each individual pension plan to specific yield curves at theplan’s measurement date and determine a level equivalent yield that may be unique to each plan. On that basis, the range of discountrates decreased 0.50% from March 31, 2012 to March 31, 2013. The fair value of pension assets at March 31, 2012 and 2013 was determined using: Based on Quoted prices Other in active observable Unobservable Fair Value at markets inputs inputs March 31, 2012 (Level 1) (Level 2) (Level 3)Assets measured at fair value on a recurring basis: U.S. Defined Benefit Plan Assets: Cash $138 $138 $ - $ -Pooled Separate Accounts 30,843 - 30,843 -Guaranteed Deposit Account 3,192 - 3,192 - International Defined Benefit Plan Assets: Cash 361 361 - -Pooled Separate Accounts 110,796 - 110,796 -Total $145,330 $499 $144,831 $ - Based on Quoted prices Other in active observable Unobservable Fair Value at markets inputs inputs March 31, 2013 (Level 1) (Level 2) (Level 3)Assets measured at fair value on a recurring basis: U.S. Defined Benefit Plan Assets: Cash $143 $143 $ - $ -Pooled Separate Accounts 31,406 - 31,406 -Guaranteed Deposit Account 3,373 - 3,373 - International Defined Benefit Plan Assets: Cash 341 341 - -Depository Account 8,453 8,453 Pooled Separate Accounts 122,843 - 122,843 -Total $166,559 $8,937 $157,622 $ - Assets valued using Level 1 inputs in the table above are cash and an interest-bearing depository account. Assets valued using Level 2 inputs in the table above are investments held in pooled separate accounts and a guaranteed depositaccount. See discussion in the “Valuation of Investments” section below. 68 Valuation of Investments Our investments are held in a Depository Account, Pooled Separate Accounts, and a Guaranteed Deposit Account. Assets held inthe Depository Account are cash and cash equivalents. Investments held in the Pooled Separate Accounts are based on the fair value ofthe underlying securities within the fund, which represent the net asset value, a practical expedient to fair value, of the units held by thepension plan at year-end. Those assets held in the Guaranteed Deposit Account are valued at the contract value of the account, whichapproximates fair value. The contract value represents contributions plus accumulated interest at the contract rate, less benefits paid toparticipants, 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 forreturns 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. The Company’s pension plans’ weighted average asset allocations at March 31, 2012 and 2013, by asset category are as follows: March 31, 2012 March 31, 2013Asset Category U.S. Plans InternationalPlans U.S. Plans InternationalPlansEquity securities 52% 50% 51% 43%Debt securities 39% 50% 39% 50%Other 9% 0% 10% 7% Total 100% 100% 100% 100% We make contributions to our defined benefit plans as required under various pension funding regulations. Accordingly, we expect tomake contributions of approximately $8,071 to the international plans and none to the U.S. plans in fiscal 2014 based on currentactuarial computations. Estimated future benefit payments are as follows: Years ended March 31, U.S. Plans International Plans2014 $1,806 $5,264 2015 1,884 5,408 2016 1,963 5,568 2017 2,077 5,730 2018 2,175 5,891 2019-2023 12,527 31,965 Savings Plans: We sponsor retirement savings plans, which allow eligible employees to defer part of their annual compensation. Certaincontributions by us are discretionary and are determined by our Board of Directors each year. Our contributions to the savings plans inthe United States and Europe for the fiscal years ended March 31, 2011, 2012 and 2013 were approximately $5,507, $4,492, and $4,145,respectively. 69 In addition, we sponsor a nonqualified deferred compensation program, which permits certain employees to annually elect to defer aportion of their compensation until retirement. A portion of the deferral is subject to a matching contribution by us. The employeesselect among various investment alternatives, which are the same as are available under the retirement savings plans, with theinvestments held in a separate trust. The value of the participants’ balances fluctuate based on the performance of the investments. The market value of the trust at March 31, 2012 and 2013 of $9,150 and $7,043, respectively, is included as an asset and a liability in ouraccompanying balance sheet because the trust’s assets are both assets of the Company and also a liability as they are available togeneral creditors in certain circumstances. 11.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 thepurchase 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 twoplans 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. Underall 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’smaximum term is 10 years. Options granted under the 1995 Stock Option Plan and the 2004 Stock Option Plan vest as to 25% annuallyand options granted under the Non-Employee Directors’ Stock Option Plan and the 2004 Non‑Employee Directors’ Stock Option Planvest as to one-third annually. Requisite service periods related to all plans begin on the grant date. As of March 31, 2013, there were11,741 shares of common stock available for future issuance under all of the plans, consisting of options available to be granted andoptions currently outstanding. Activity under our stock option plans is summarized as follows: Number ofShares Average Price(a) Average Life(years) (b) AggregateIntrinsic ValueOutstanding at March 31, 2012 4,344 $14.12 - -Options granted 538 10.79 - -Options exercised (16) 9.71 - $27 Options cancelled/forfeited (619) 16.24 - 132 Outstanding at March 31, 2013 4,247 $13.40 5.10 $1,759 Exercisable at March 31, 2013 2,994 $13.83 3.79 $916 (a)Weighted-average exercise price(b)Weighted-average contractual life remaining The total aggregate intrinsic value of options exercised is $1,753, $305, and $27 for fiscal years ended March 31, 2011, 2012, and2013, respectively. 70 Unvested share activity under our stock options plans for the year ended March 31, 2013 is summarized as follows: Number ofShares WeightedAverage Grant-Date Fair ValueUnvested balance at March 31, 2012 1,301 $2.99 Options granted 538 2.09 Options forfeited (68) 2.79 Options vested (518) 3.00 Unvested balance at March 31, 2013 1,253 $2.61 The total unrecognized compensation costs related to unvested awards expected to be recognized over the vesting period,approximately four years, was $1,157 and $911 as of March 31, 2012 and 2013, respectively. The total aggregate fair value of optionsvested is $2,239, $1,850, and $1,552 for fiscal years ended March 31, 2011, 2012, and 2013, respectively. The weighted average estimated fair value of our stock options granted at grant date market prices was $3.29, $3.03, and $2.09 peroption during fiscal years ended March 31, 2011, 2012, and 2013, respectively. The consolidated statement of operations includes $889,net of $478 of tax benefit, in stock-based compensation expense for fiscal 2013. Our weighted average fair value is estimated at the date of grant using a Black-Scholes-Merton option-pricing model. We estimatedvolatility by considering our historical stock volatility. We calculated the dividend yield based on historical dividends paid. We haveestimated forfeitures in determining the weighted average fair value calculation. The forfeiture rate used for the fiscal year ended March31, 2013 was 7.1%. The following are significant weighted average assumptions used for estimating the fair value of options issuedunder our stock option plans: 2011 2012 2013 Grants Grants GrantsExpected life (years) 5 6 6Interest rate 2.3% 1.8% 1.0%Volatility 27% 23% 28%Dividend yield 1.3% 1.5% 2.8% Options exercised under our stock option plans are issued from our treasury shares. As of March 31, 2013, we have 5,508 sharesthat may yet be purchased under repurchase programs authorized by the Board of Directors. We purchased 625 shares at a cost of$8,394 during fiscal 2012 and 984 shares at a cost of $10,580 during fiscal 2013, which are held as treasury stock and available forgeneral corporate purposes. 12.Commitments and Contingencies: We are a lessee under long‑term operating leases primarily for office space, plant and equipment. Future minimum lease commitmentsunder non‑cancelable operating leases as of March 31, 2013, were as follows: Years ended March 31, 2014$6,642 2015 6,447 2016 5,567 2017 4,829 2018 4,661 Thereafter 6,265 71 Rental expense for operating leases was $6,922, $7,663, and $7,382 for the fiscal years ended March 31, 2011, 2012, and 2013,respectively. From time to time we enter into delivery contracts with selected suppliers for certain metals used in our production processes. Thedelivery contracts represent routine purchase orders for delivery within three months and payment is due upon receipt. As of March 31,2013, we had no significant outstanding purchase commitments. We have been identified by the United States Environmental Protection Agency (“EPA”), state governmental agencies or otherprivate parties as a potentially responsible party (“PRP”) under the Comprehensive Environmental Response, Compensation andLiability Act (“CERCLA”) or equivalent state or local laws for clean-up and response costs associated with certain sites at whichremediation is required with respect to prior contamination. Because CERCLA has generally been construed to authorize joint andseveral liability, the EPA could seek to recover all clean-up costs from any one of the PRPs at a site despite the involvement of otherPRPs. At certain sites, financially responsible PRPs other than AVX also are, or have been, involved in site investigation and clean-upactivities. 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 ordersand consent decrees with federal and state regulatory agencies governing the timing and nature of investigation and remediation. As iscustomary, the orders and decrees regarding sites where the PRPs are not themselves implementing the chosen remedy contain provisionsallowing 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 toreopener provisions, including a reopener if certain remediation costs for the site exceed $130.5 million. On April 18, 2012, the EPA issued to the Company a Unilateral Administrative Order (“UAO”) directing the Company to performthe Remedial Design, the Remedial Action, and Operation and Maintenance, as set forth in the UAO, for the harbor cleanup, pursuant tothe reopener provisions. The effective date set forth in the UAO was June 18, 2012 (and subsequently extended to July 1, 2013),pursuant to which the Company had to inform the EPA if it intended to comply with the UAO. On October 10, 2012, the EPA, the United States, and the Commonwealth of Massachusetts and AVX announced that they hadreached a financial settlement with respect to the EPA’s ongoing clean-up of the harbor. That agreement is contained in a SupplementalConsent Decree that modifies certain provisions of the 1992 Consent Decree, including elimination of the governments’ right to invokethe clean-up reopener provisions in the future. In accordance with the settlement, AVX will pay $366.3 million, plus interest computedfrom August 1, 2012, in three installments over a two-year period for use by the EPA and the Commonwealth to complete the clean-up ofthe harbor, and the EPA will withdraw the UAO. The settlement requires approval by the United States District Court before becomingfinal. The timing of any such approval is uncertain. The Company has recorded a liability for the full amount of the proposedsettlement, resulting in charges of $100.0 million and $266.3 million in the years ended March 31, 2012 and 2013, respectively. There are two suits pending with respect to property adjacent to our Myrtle Beach, South Carolina factory claiming property valueshave been negatively impacted by alleged migration of certain pollutants from our property. On November 27, 2007, a suit was filed inthe South Carolina State Court by certain individuals as a class action. Another suit is a commercial suit filed on January 16, 2008 inSouth Carolina State Court. We intend to defend vigorously the claims that have been asserted in these two lawsuits. At this stage ofthe litigation, there has not been a determination as to responsible parties or the amount, if any, of damages. Based on our estimate ofpotential outcomes, we have accrued approximately $0.3 million with respect to these cases as of March 31, 2013. We had reserves of approximately $115.9 million and $380.6 million at March 31, 2012 and 2013, respectively, related to the variousenvironmental matters discussed above. These reserves are classified in the consolidated balance sheets as $115.9 million and $147.7million in accrued expenses at March 31, 2012 and 2013, respectively, and $232.9 million in other non-current liabilities at March 31,2013. The amount recorded for identified contingent liabilities is based on estimates. Amounts recorded are reviewed periodically andadjusted to reflect additional legal and technical information that becomes available. Also, uncertainties about the status of laws,regulations, regulatory actions, technology, and information related to individual sites make it difficult to develop an estimate of thereasonably possible aggregate environmental remediation exposure. Therefore, these costs could differ from our current estimates. 72 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 assertsthat 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 anddetermined at this time. AVX has received a demand for approximately $11.0 million from the City of New Bedford arising from contamination at the City’sNew Bedford Railyard. AVX believes it has meritorious defenses and intends to defend vigorously the demand. 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 thisdemand on our financial position, results of operations, comprehensive income (loss), and cash flows cannot be determined at this time. We also operate on other 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 suchenvironmental 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 ofthese costs. A separate account receivable is recorded for any indemnified costs. We are involved in disputes, warranty, and legal proceedings arising in the normal course of business. While we cannot predict theoutcome of these disputes and proceedings, management believes, based upon a review with legal counsel, that none of theseproceedings will have a material impact on our financial position, results of operations, comprehensive income (loss), or cash flows. 13.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 offsetgains and losses resulting from these exposures with gains and losses on the forward contracts used to hedge them, thereby reducingvolatility of earnings or protecting fair values of assets and liabilities. We do not enter into any trading or speculative positions withregard to derivative instruments. We primarily use forward contracts, with maturities less than four months, designated as cash flow hedges to protect against theforeign currency exchange rate risks inherent in our forecasted transactions related to purchase commitments and sales denominated invarious 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 flowhedges is initially recorded in accumulated other comprehensive income (loss) as a separate component of stockholders’ equity. Once the hedged transaction is recognized, the gain or loss is recognized in our results of operations. At March 31, 2012 and 2013, respectively, theCompany had the following forward contracts that were entered into to hedge against the volatility of foreign currency exchange ratesfor certain forecasted sales and purchases. March 31, 2012 Fair Value of Derivative Instruments Asset Derivatives Liability Derivatives Balance Sheet Caption Fair Value Balance SheetCaption Fair Value Foreign exchange contractsPrepaid and other $1,646 Accrued expenses $2,992 73 March 31, 2013 Fair Value of Derivative Instruments Asset Derivatives Liability Derivatives Balance Sheet Caption Fair Value Balance SheetCaption Fair Value Foreign exchange contractsPrepaid and other $1,117 Accrued expenses $2,050 For these derivatives designated as hedging instruments, during fiscal 2011, 2012, and 2013, net pre-tax gains (losses) of $6,267, $(527), and $(4,432), respectively, were recognized in other comprehensive income (loss). In addition, during fiscal 2011, 2012, and 2013,net pretax gains (losses) of $7,740, $502, and $(7,448), respectively, were reclassified from accumulated other comprehensive income(loss) into cost of sales (for hedging purchases), and a net pre-tax loss of $2,034 and net pre-tax gains of $95 and $2,971, respectively,were reclassified from accumulated other comprehensive income (loss) into sales (for hedging sales) in the accompanying statement ofoperations. During fiscal 2011, 2012, and 2013, we discontinued an immaterial amount of cash flow hedges for which it was probablethat a forecasted transaction would not occur. Derivatives not designated as hedging instruments consist primarily of forwards used to hedge foreign currency balance sheetexposures representing hedging instruments used to offset foreign currency changes in the fair values of the underlying assets andliabilities. The gains and losses on these foreign currency forward contracts are recognized in other income and expense in the sameperiod as the remeasurement gain and loss of the related foreign currency denominated assets and liabilities and thus naturally offsetthese gains and losses. At March 31, 2012 and 2013, we had the following forward contracts that were entered into to hedge againstthese exposures. March 31, 2012 Fair Value of Derivative Instruments Asset Derivatives Liability Derivatives Balance Sheet Caption Fair Value Balance SheetCaption Fair Value Foreign exchange contractsPrepaid and other $114 Accrued expenses $549 March 31, 2013 Fair Value of Derivative Instruments Asset Derivatives Liability Derivatives Balance Sheet Caption Fair Value Balance SheetCaption Fair Value Foreign exchange contractsPrepaid and other $51 Accrued expenses $396 For these derivatives not designated as hedging instruments during fiscal 2011, 2012, and 2013, gains (losses) of $2,757, $2,608,and $(227), respectively, were recognized in other expense, which offset the approximately $(4,240), $(4,289) and $1,022 in exchangegains (losses), respectively, that were recognized in other income in the accompanying statement of operations. At March 31, 2012 and 2013, we had outstanding foreign exchange contracts with notional amounts totaling $228,206 and $187,670,respectively, denominated primarily in euros, Czech korunas, British pounds, and Japanese yen. 74 14.Transactions With Affiliate: Our business includes certain transactions with our parent company, Kyocera, that are governed by agreements between the partiesthat define the sales terms, including pricing for the products. The nature and amounts of transactions with Kyocera are included in thetable below. Years Ended March 31, 2011 2012 2013Sales: Product and equipment sales to affiliates $28,077 $8,501 $12,804 Purchases: Purchases of resale inventories, raw materials, supplies, equipment, andservices 505,976 431,181 419,472 Other: Dividends paid 23,142 34,104 36,540 The revenues from products sold to Kyocera decreased in fiscal 2012 and 2013 when compared to fiscal 2011 as a result of Kyoceraprocuring 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 itsoverseas affiliates, including AVX. We assisted Kyocera in working with various international tax authorities to obtain relief from thiseffective double taxation. During fiscal 2011, we assisted Kyocera in arranging for approximately $6.0 million of tax refunds from acountry where we operate. We incurred no cost and received no benefit from the assistance we provided to Kyocera. 15.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 lineorganization with five main product groups and three reportable segments: Passive Components, KED Resale, and Interconnect. Theproduct groups of Ceramic, Advanced, and Tantalum have been aggregated into the Passive Components reportable segment inaccordance 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 consistsprimarily of surface mount and leaded ceramic capacitors, RF thick and thin film components, surface mount and leaded tantalumcapacitors, surface mount and leaded film capacitors, ceramic and film power capacitors, super capacitors, EMI filters (bolt in and surfacemount), thick and thin film packages of multiple passive integrated components, varistors, thermistors, inductors, and resistiveproducts. 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 consistsprimarily of Elco automotive, telecom, and memory connectors manufactured by AVX Interconnect. Sales and operating results from thesereportable segments are shown in the tables below. In addition, we have a corporate administration group consisting of finance andadministrative 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 allocatethe 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. 75 The tables below present information about reported segments: Years Ended March 31,Sales revenue (in thousands) 2011 2012 2013Ceramic Components $211,998 $179,984 $173,315 Tantalum Components 419,792 393,468 330,209 Advanced Components 410,110 378,843 346,543 Total Passive Components 1,041,900 952,295 850,067 KDP and KCD Resale 440,050 410,419 377,707 KCP Resale Connectors 66,088 54,765 61,809 Total KED Resale 506,138 465,184 439,516 Interconnect 105,138 127,775 124,817 Total Revenue $1,653,176 $1,545,254 $1,414,400 Years Ended March 31, 2011 2012 2013Operating profit (loss): Passive components$333,901 $275,947 $145,870 KED Resale 29,010 15,669 17,659 Interconnect 19,525 25,081 25,042 Research & development (7,392) (7,716) (7,591)Corporate administration (50,120) (133,430) (300,825)Total$324,924 $175,551 $(119,845) Years Ended March 31, 2011 2012 2013Depreciation and amortization: Passive components$41,008 $35,616 $34,317 KED Resale 433 332 272 Interconnect 3,524 4,072 5,885 Research & development 541 1,208 1,212 Corporate administration 2,113 5,662 5,185 Total$47,619 $46,890 $46,871 76  As of March 31, 2011 2012 2013Assets: Passive components$703,602 $760,121 $768,965 KED Resale 63,706 47,506 52,058 Interconnect 44,315 55,001 59,278 Research & development 5,337 6,493 6,089 Cash, A/R and S/T and L/T investments 1,239,426 1,259,582 1,264,695 Goodwill - Passive components 152,255 152,429 189,095 Goodwill - Connectors 10,277 10,277 10,277 Corporate administration 100,564 176,603 251,538 Total$2,319,482 $2,468,012 $2,601,995 Years Ended March 31, 2011 2012 2013Capital expenditures: Passive components$24,301 $29,664 $29,029 KED Resale 64 13 30 Interconnect 1,783 11,761 12,598 Research & development 1,176 803 807 Corporate administration 146 6,960 1,241 Total$27,470 $49,201 $43,705 One customer accounted for 13% of net sales during the fiscal year ended March 31, 2013. No single customer has accounted formore than 10% of net sales during the fiscal years ended March 31, 2011 or 2012 or accounts receivable in the fiscal years ended March31, 2011, 2012, or 2013. The following geographic data is based upon net sales generated by operations located within that geographic area and the physicallocation of long-lived assets. Substantially all of the sales in the Americas region were generated in the United States. Years Ended March 31, 2011 2012 2013Net sales: Americas $516,243 $429,079 $390,152 Europe 405,231 422,613 351,603 Asia 731,702 693,562 672,645 Total $1,653,176 $1,545,254 $1,414,400 Property, plant and equipment, net: Americas $107,226 $107,378 $103,177 Europe 97,763 100,255 98,279 Asia 30,670 28,855 56,808 Total $235,659 $236,488 $258,264 77 16.Summary of Quarterly Financial Information (Unaudited): Quarterly financial information for the fiscal years ended March 31, 2012 and 2013 is as follows: First Quarter Second Quarter 2012 2013 2012 2013Net sales $436,422 $353,154 $404,767 $360,823 Gross profit 124,659 68,957 110,818 68,925 Net income (loss) 67,599 (136,784) 61,919 28,037 Basic earnings (loss) per share 0.40 (0.81) 0.36 0.17 Diluted earnings (loss) per share 0.40 (0.81) 0.36 0.17 Third Quarter Fourth Quarter 2012 2013 2012 2013Net sales $340,865 $339,875 $363,200 $360,548 Gross profit 78,332 62,417 78,150 63,471 Net income (loss) 36,871 19,864 (13,584) 24,571 Basic earnings (loss) per share 0.22 0.12 (0.08) 0.15 Diluted earnings (loss) per share 0.22 0.12 (0.08) 0.15 Results for the three and twelve months ended March 31, 2012 include $11,528 of one-time income tax benefits primarily attributable tothe utilization of U.S. foreign tax credits relating to the Company’s South American and European operations and the reversal of certainstate income tax valuation allowances. Results for the quarters ended March 31, 2012 and June 30, 2012, respectively, include environmental charges of $100,000 and $266,250related to the New Bedford Harbor Superfund site, as discussed in Note 12. 17.Subsequent Events: On May 8, 2013, our Board of Directors declared a $0.0875 dividend per share of common stock for the quarter ended March 31,2013. The dividend will be paid to stockholders of record on May 31, 2013 and will be disbursed on June 14, 2013. 78 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, comprehensive income(loss), stockholders' equity and cash flows present fairly, in all material respects, the financial position of AVX Corporation and itssubsidiaries at March 31, 2013 and March 31, 2012, and the results of their operations and their cash flows for each of the three years inthe period ended March 31, 2013 in conformity with accounting principles generally accepted in the United States of America. Also in ouropinion, the Company maintained, in all material respects, effective internal control over financial reporting as of March 31, 2013, basedon criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of theTreadway Commission (COSO). The Company's management is responsible for these financial statements, for maintaining effective internalcontrol over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included inManagement's Report on Internal Control over Financial Reporting. Our responsibility is to express opinions on these financial statementsand on the Company's internal control over financial reporting based on our integrated audits. We conducted our audits in accordancewith the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and performthe audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effectiveinternal 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 andsignificant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control overfinancial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a materialweakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our auditsalso included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide areasonable basis for our opinions. A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability offinancial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accountingprinciples. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenanceof records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) providereasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generallyaccepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizationsof management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection ofunauthorized 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 ofany evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes inconditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/PricewaterhouseCoopers LLP PricewaterhouseCoopers LLPAtlanta, GeorgiaMay 22, 201379 EXHIBIT 10.17 AVX CORPORATION2014 STOCK OPTION PLAN 1. Adoption and Purpose. The Company hereby adopts this Plan providing for the granting of stockoptions to selected employees of the Company and its Subsidiaries. The general purpose of the Plan isto promote the interests of the Company and its Subsidiaries by providing to their employees incentivesto continue and increase their efforts with respect to, and remain in the employ of, the Company and itsSubsidiaries. Options granted under the Plan may be "incentive stock options" within the meaning of Section 422 ofthe Code or "nonqualified stock options", and the specific type of option granted shall be designated bythe Committee upon grant. 2. Administration. The Plan will be administered by the Compensation Committee of the Board ofDirectors (the "Committee"), or, at the discretion of the Board from time to time, the Plan may beadministered by the Board. It is intended that at least two of the directors appointed to serve on theCommittee shall qualify as (a) "outside directors" within the meaning of Section 162(m) of the Codeand the regulations thereunder and (b) "Non-Employee Directors" within the meaning of Rule 16b-3(b)(3)(i) promulgated under the Exchange Act and that any such members of the Committee who donot so qualify shall abstain from participating in any decision to make or administer stock options that aremade to participants who at the time of consideration for such stock option are, or who are anticipated tobecome, either (i) a "covered employee", as defined in Code Section 162(m)(3) or (ii) a person subjectto the short-swing profit rules of Section 16 of the Exchange Act. However, the mere fact that aCommittee member shall fail to qualify under either of the foregoing requirements or shall fail toabstain from such action shall not invalidate any award made by the Committee which award isotherwise validly made under the Plan. To the extent the Board has reserved any authority andresponsibility or during any time that the Board is acting as administrator of the Plan, it shall have all thepowers of the Committee hereunder, and any reference herein to the Committee (other than in thisSection 2) shall include the Board. Subject to the express provisions of the Plan, the Committee shall have plenary authority, in itsdiscretion, to administer the Plan and to exercise all powers and authority either specifically granted to itunder the Plan or necessary and advisable in the administration of the Plan, including without limitationthe authority to interpret the Plan; to prescribe, amend and rescind rules and regulations relating to thePlan; to determine the terms of all options granted under the Plan (which need not be identical), thepurchase price of the shares covered by each option, the individuals to whom and the time or times atwhich options shall be granted, whether an option shall be an incentive stock option or a nonqualifiedstock option, when an option can be exercised and whether in whole or in installments, and the numberof shares covered by each option; and to make all other necessary or advisable determinations withrespect to the Plan. The determination of the Committee on such matters shall be conclusive. 1 The Plan shall be governed by and construed in accordance with the laws of Delaware. To the extentpermitted under Delaware law, the Board or the Committee may expressly delegate to any individual orgroup of individuals some or all of the Committee's authority to grant awards under this Plan, exceptthat no delegation of its duties and responsibilities may be made with respect to awards to any participantwho is, or who is anticipated to be become, either (i) a "covered employee", as defined in Code Section162(m)(3) or (ii) a person subject to the short-swing profit rules of Section 16 of the ExchangeAct. The acts of such delegates shall be treated hereunder as acts of the Committee, and such delegatesshall report to the Committee regarding the delegated duties and responsibilities. 3. Participants. The Committee shall from time to time select the Corporate Officers and keyemployees of the Company and its Subsidiaries to whom options are to be granted, and who will, uponsuch grant, become participants in the Plan. 4. Shares Subject to Plan. The Committee may not grant options under the Plan for more than10,000,000 shares of Common Stock, subject to any adjustment as provided in Section 13hereof. Shares to be optioned and sold may be made available from either authorized but unissuedCommon Stock, Common Stock held by the Company in its treasury, or Common Stock purchased onthe open market. Shares that by reason of the expiration of an option or otherwise are no longer subjectto purchase pursuant to an option granted under the Plan will again be available for issuance under thePlan. 5. Limitation on Number of Options. The aggregate Fair Market Value (determined as of the time anincentive stock option is granted) of the stock with respect to which incentive stock options granted toan employee under the Plan are exercisable for the first time during any calendar year may not exceed$100,000, or such limit as may be amended in the Code. To the extent that this dollar limitation isexceeded, the excess options shall be deemed to be non-qualified stock options. Notwithstanding any provision in the Plan to the contrary (but subject to adjustment as provided inSection 13), the maximum number of shares of Common Stock with respect to one or more optionsthat may be granted during any one calendar year under the Plan to any one participant shall be1,000,000. 6. Grant of Options. All options under the Plan shall be granted by the Committee or such persondelegated by the Committee pursuant to Section 2. The Committee or such delegate shall determinethe number of shares of Common Stock to be offered from time to time by grant of options toemployees who are participants of the Plan (it being understood that more than one option may begranted to the same employee). Notification of the grant of an option shall be issued to the participants.Such notification shall include the vesting schedule, the term of the option and any additional rules orexercise rights specific to the grant. The grant of an option to an employee shall not be deemed either toentitle the employee to, or to disqualify the employee from, participation in any other grant of optionsunder the Plan. 2 7. Option Price. The purchase price per share of the Common Stock for any option granted under thePlan shall be determined by the Committee, but shall not be less than 100% of the Fair Market Valueper share of the Common Stock at the time the option is granted. Notwithstanding the foregoing, noincentive stock option shall be granted to an employee who, at the time of such grant, is a Ten PercentShareholder unless the option price per share is at least 110% of the Fair Market Value per share of theCommon Stock subject to the incentive stock option at the time the option is granted. 8. Option Period. The option period will begin on the date the option is granted, which will be the datethe Committee authorizes the option. No option may terminate later than the day prior to the tenthanniversary of the date the option is granted; provided, however, that an incentive stock option grantedto an employee who, at the time of such grant, is a Ten Percent Shareholder shall not be exercisableafter the expiration of five years after the date of grant. The Committee may provide for the exerciseof options in installments and upon such terms, conditions and restrictions as it may determine. 9. Exercisability of Options. The Committee shall prescribe the installments, if any, in which anoption granted under the Plan shall become vested and exercisable. On the last date worked by any participant, whether due to voluntarily termination or his employmentwith the Company or Subsidiary is terminated for Cause, neither the Company, the Parent nor anySubsidiary shall have any further obligation to the participant hereunder, and the options (whether ornot vested) shall immediately terminate in full. In the event a participant's employment is terminated by the Company for any reason other than forCause, options may be exercised, to the extent vested and exercisable as of the last date worked by theparticipant, by the participant in accordance with its terms but in no event beyond the earlier of (x) 90days after the last date worked by the participant, unless such period is extended in the discretion of theCommittee, or (y) the scheduled expiration of such options. 10. Payment; Method of Exercise. Payment shall be made in cash or in shares of Common Stockalready owned by the holder of the option (valued at Fair Market Value on the date of exercise) or partlyin cash and partly in such shares; provided, however, that if shares are used to pay the exercise price ofan option, such shares must have been held by the participant for at least such period of time, if any, asnecessary to avoid variable accounting for the option. The Committee, in its sole discretion, mayauthorize additional methods by which the exercise price of an option may be paid (including "cashlessexercise" arrangements), and by which shares of Common Stock shall be delivered or deemed to bedelivered to participants. No shares may be issued until full payment of the purchase price thereforehas been made, and a participant will have none of the rights of a stockholder until shares are issued tohim. Options shall be exercised by notice to the Company. Such notice shall state that the holder of theoption elects to exercise the option, the number of shares in respect of which it is being exercised andthe manner of payment for such shares or cashless exercise and shall be accompanied by payment ofthe full purchase price of such shares. 3 11. Withholding Taxes. The Company or any Parent or Subsidiary shall have the authority and theright to deduct or withhold, or require a participant to remit to the Company, an amount sufficient tosatisfy federal, state, and local taxes (including the participant's FICA obligation) required by law to bewithheld with respect to any exercise, lapse of restriction or other taxable event arising as a result of thePlan. If shares of Common Stock are surrendered to the Company to satisfy withholding obligations inexcess of the minimum withholding obligation, such shares must have been held by the participant asfully vested shares for such period of time, if any, as necessary to avoid variable accounting for theoption. With respect to withholding required upon any taxable event under the Plan, the Committeemay require or permit that any such withholding requirement be satisfied, in whole or in part, bywithholding from the option shares of Common Stock having a Fair Market Value on the date ofwithholding equal to the minimum amount (and not any greater amount) required to be withheld for taxpurposes, all in accordance with such procedures as the Committee may establish. 12. Rights in the Event of Death, Retirement or Incapacity. If a participant's employment is terminateddue to death, Retirement or Incapacity prior to the termination of his or her right to exercise an option inaccordance with the provisions of his or her stock option without having fully exercised the option, thenthe total number of shares of Common Stock then underlying the option shall thereupon becomeexercisable. In the event of Retirement, such exercisable options may only be exercised prior to theearlier of (x) 5 years after the last date worked by the participant, or (y) the scheduled expiration ofsuch options. In the event of a termination of a participant's employment due to death or Incapacity, or aparticipant's death following his or her termination of employment during the period in which his or heroption remains exercisable, then notwithstanding the foregoing, such option may be exercised to theextent the option could have been exercised by the participant, by the participant's estate or by theperson who acquired the right to exercise the option by bequest or inheritance only during the periodwithin one year after the last date worked by the participant, but in no event beyond the originalexpiration date of the option. 13. Effect of Certain Changes. (a) If there is any change in the number of outstanding shares of Common Stock by reason of any stockdividend, stock split, recapitalization, combination, exchange of shares, merger, consolidation,liquidation, split-up, spin-off or other similar change in capitalization, any distribution to commonshareholders, including a rights offering, other than cash dividends, or any like change, then thenumber of shares of Common Stock available for grant under Section 4, the authorization limits inSection 5, the number of such shares covered by outstanding options, and the price per share of suchoptions shall be proportionately adjusted by the Committee to reflect such change or distribution;provided, however, that any fractional shares resulting from such adjustment shall be eliminated. Without limiting the foregoing, in the event of a subdivision of the outstanding shares of CommonStock (stock-split), a declaration of a dividend payable in shares of Common Stock, or a combination orconsolidation of the outstanding shares of Common Stock into a lesser number of shares, theauthorization limits under Sections 4 and 5 shall automatically be adjusted proportionately, and theshares of Common Stock then subject to each option shall automatically be adjusted proportionatelywithout any change in the aggregate purchase price therefor.4  (b) In the event of a change in the Common Stock of the Company as presently constituted, the sharesresulting from any such change shall be deemed to be the Common Stock within the meaning of thePlan. (c) In the event of a reorganization, recapitalization, merger, consolidation, acquisition of property orstock, extraordinary dividend or distribution, separation or liquidation of the Company, or any otherevent similarly affecting the Company, the Board or the Committee shall have the right, but not theobligation, notwithstanding anything to the contrary in this Plan, to provide that outstanding optionsgranted under this Plan shall (i) be canceled in respect of a cash payment or the payment of securities orproperty, or any combination thereof, with a per share value determined by the Board in good faith to beequal to the value received by the stockholders of the Company in such event in the respect of eachshare of Common Stock, with appropriate deductions of exercise prices, or (ii) be assumed by anotherparty to a transaction or otherwise be equitably converted or substituted in connection with suchtransaction. (d) To the extent that the foregoing adjustments relate to stock or securities of the Company, suchadjustments shall be made by the Committee, whose determination in that respect shall be final, bindingand conclusive. The Committee's determination need not be uniform and may be different for differentparticipants whether or not such participants are similarly situated. 14. Nonexclusive Plan. Neither the adoption of the Plan by the Board nor the submission of the Plan tothe stockholders of the Company for approval shall be construed as creating any limitations on thepower of the Board to adopt such other incentive arrangements as it may deem desirable, including,without limitation, the granting of stock options otherwise than under the Plan, and such arrangementsmay be either generally applicable or applicable only in specific cases. 15. Assignability. Nonqualified options may be transferred by gift to any member of the optionee'simmediate family or to a trust for the benefit of one or more of such immediate family members, andnonqualified and incentive stock options may be transferred by the laws of descent anddistribution. Incentive stock options are otherwise non-transferable. During an optionee's lifetime,options granted to an optionee may be exercised only by such optionee or by his or her guardian or legalrepresentative unless the option has been transferred in accordance with the preceding sentence, inwhich case, it shall be exercisable only by such transferee. For purposes of this Section 15, immediatefamily shall mean the optionee's spouse, children and grandchildren. 5 16. Amendment or Discontinuance. The Plan may be amended or discontinued by the Board withoutthe approval of the stockholders of the Company, except that stockholder approval shall be required forany amendment that would (a) materially increase (except as provided in Section 13 hereof) themaximum number of shares of Common Stock for which options may be granted under the Plan, (b)materially expand the class of employees eligible to participate in the Plan, (c) expand the types ofawards available under the Plan, (d) otherwise materially increase the benefits to participants under thePlan, or (e) otherwise constitute a material change requiring stockholder approval under applicable laws,policies or regulations or the applicable listing or other requirements of the principal stock exchange orthe NASDAQ National Market on which the Common Stock is then listed or traded. 17. Options Previously Granted. At any time and from time to time, the Committee may amend,modify or terminate any outstanding option without approval of the participant; provided, however: (a) Such amendment, modification or termination shall not, without the participant's consent, reduceor diminish the value of such option determined as if the option had been exercised on the date of suchamendment or termination (with the per-share value of an option for this purpose being calculated asthe excess, if any, of the Fair Market Value as of the date of such amendment or termination over theexercise price of such option); (b) The original term of an option may not be extended without the prior approval of the stockholdersof the Company; (c) Except as otherwise provided in Section 13, the exercise price of an option may not be reduced,directly or indirectly, without the prior approval of the stockholders of the Company; and (d) No termination, amendment, or modification of the Plan shall adversely affect any optionpreviously granted under the Plan, without the written consent of the participant affected thereby. Anoutstanding option shall not be deemed to be "adversely affected" by a Plan amendment if suchamendment would not reduce or diminish the value of such option determined as if the option had beenexercised on the date of such amendment (with the per-share value of an option for this purpose beingcalculated as the excess, if any, of the Fair Market Value as of the date of such amendment over theexercise price of such option). 18. Effect of Plan. Neither the adoption of the Plan nor any action of the Board or Committee shall bedeemed to give any Corporate Officer or employee any right to be granted an option to purchaseCommon Stock or any other rights except as may be evidenced in a valid resolution, action, or minutesof the Committee (or of such person delegated by the Committee pursuant to Section 2), or by a stockoption agreement or notice, or any amendment thereto, duly authorized by the Board or Committee (orby such person delegated by the Committee pursuant to Section 2) and executed on behalf of theCompany, and then only to the extent and on the terms and conditions expressly set forth therein. 6 19. Term. Unless sooner terminated by action of the Board, this Plan will terminate on August 1,2024. The Committee may not grant options under the Plan after that date, but options granted beforethat date will continue to be effective in accordance with their terms. No incentive stock option may begranted pursuant to the Plan after the day immediately prior to the tenth anniversary of the date thePlan was adopted by the Board, or the termination of the Plan, if earlier. 20. Effectiveness; Approval of Stockholders. The Plan shall take effect upon its adoption by theBoard, but its effectiveness and the exercise of any options shall be subject to the approval of theholders of a majority of the voting shares of the Company, which approval must occur within twelvemonths after the date on which the Plan is adopted by the Board. 21. Definitions. For the purpose of this Plan, unless the context requires otherwise, the followingterms shall have the meanings indicated: (a) "Board" means the Board of Directors of the Company. (b) "Cause" means the commission of an act of dishonesty, gross incompetency or intentional orwillful misconduct, which act occurs in the course of participant's performance of his duties as anemployee. (c) "Code" means the Internal Revenue Code of 1986, as amended. (d) "Common Stock" means the Common Stock which the Company is currently authorized to issueor may in the future is authorized to issue (as long as the Common Stock varies from that currentlyauthorized, if at all, only in amount of par value). (e) "Company" means AVX Corporation, a Delaware corporation. (f) "Exchange Act" means the Securities Exchange Act of 1934, as from time to time amended. (g) "Fair Market Value" means the closing price of a share of Common Stock on the date of grant (or, ifnot a trading day, on the last preceding trading day) as reported on the New York Stock ExchangeComposite Transactions Tape or, if not listed on the New York Stock Exchange, the principal stockexchange or the NASDAQ National Market on which the Common Stock is then listed or traded;provided, however, that if the Common Stock is not so listed or traded then the Fair Market Value shallbe determined in good faith by the Committee. 7 (h) "Incapacity" means any material physical, mental or other disability rendering the participantincapable of substantially performing his services hereunder that is not cured within 180 days of thefirst occurrence of such incapacity. If the determination of Incapacity relates to an incentive stockoption, "Incapacity" means Permanent and Total Disability, as defined in Section 22(e)(3) of theCode. In the event of any dispute between the Company and the participant as to whether theparticipant is incapacitated as defined herein, the determination of whether the participant is soincapacitated shall be made by an independent physician selected by the Company's Board of Directorsand the decision of such physician shall be binding upon the Company and the participant. (i) "Parent" means any corporation in an unbroken chain of corporations ending with the Company if, atthe time of granting of the option, each of the corporations other than the Company owns stockpossessing 50% or more of the total combined voting power of all classes of stock in one of the othercorporations in the chain. (j) "Plan" means this AVX Corporation 2014 Stock Option Plan as amended from time to time. (k) “Retirement” means, with respect to any participant, the participant's retirement as an employee ofthe Company on or after reaching age 65, or as otherwise provided under a participant's terms ofemployment governed by a separate agreement. (l) "Subsidiary" means any corporation in an unbroken chain of corporations beginning with theCompany if, at the time of the granting of the option, each of the corporations other than the lastcorporation in the unbroken chain owns stock possessing 50% or more of the total combined votingpower of all classes of stock in one of the other corporations in the chain. The "Subsidiaries" meansmore than one of any such corporations. (m) "Ten Percent Shareholder" means an individual who owns (or is treated as owning under Section424(d) of the Code) stock possessing more than 10% of the total combined voting power of all classes ofstock of the Company or any Subsidiary. 8 EXHIBIT 10.18 AVX CORPORATION2014 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN 1. Adoption and Purpose. The AVX Corporation (the "Company") hereby adopts the 2014 AVXCorporation Non-Employee Directors' Stock Option Plan (the "Plan") to secure for the Company andits stockholders the benefits of the incentive inherent in increased common stock ownership by themembers of the Board of Directors (the "Board") of the Company who are not employees of theCompany or any of its subsidiaries (a "Non-Employee Director"). 2. Administration. The Plan shall be administered by the Board. The Plan shall be governed by andconstrued in accordance with the laws of Delaware. The Board shall have all the powers vested in it bythe terms of the Plan, such powers to include authority (within the limitations described herein) toprescribe the form of the agreement embodying awards of stock options made under the Plan (the"Options") and the power to determine the restrictions, if any, on the ability of participants to earn-outand to dispose of any stock issued in connection with the exercise of any Options granted pursuant to thePlan. The Board shall, subject to the provisions of the Plan, have the power to interpret the Plan and toprescribe, amend and rescind rules and regulations for the administration of the Plan as it may deemdesirable. Any decisions of the Board in the administration of the Plan, as described herein, shall befinal and conclusive. The Board may authorize any one or more of their number (each, a "Director") orthe Secretary or any other Corporate Officer of the Company to execute and deliver documents onbehalf of the Board. The Board hereby authorizes the Secretary to execute and deliver all documentsto be delivered by the Board pursuant to the Plan. No member of the Board shall be liable for anythingdone or omitted to be done by such member or by any other member of the Board in connection withthe Plan, except for such member's own willful misconduct or as expressly provided by statute. 3. Shares Subject to Plan. The stock which may be issued and sold under the Plan will be theCommon Stock (par value $0.01 per share) of the Company. The total amount of stock for whichOptions may be granted under the Plan shall not exceed 1,000,000 shares of Common Stock, subject toadjustment as provided in Section 6 below. The stock to be issued may be either authorized andunissued shares, shares held by the Company in its treasury, or Common Stock purchased on the openmarket. Shares that by reason of the expiration of an option or otherwise are no longer subject topurchase pursuant to an Option granted under the Plan may be reoffered under the Plan. 4. Participants. Each Non-Employee Director shall be eligible to receive an Option in accordance withSection 5 below. 5. Terms and Conditions of Options. Each Option granted under the Plan shall comply with thefollowing terms and conditions: 1 (a) The Option exercise price shall be the "Fair Market Value" of the Common Stock shares subject tosuch Option on the date the Option is granted, which shall be the closing sales prices of a share ofCommon Stock on the date of grant (or, if not a trading day, on the last preceding trading day) asreported on the New York Stock Exchange Composite Transactions Tape or, if not listed on the NewYork Stock Exchange, the principal stock exchange or the NASDAQ National Market on which theCommon Stock is then listed or traded; provided, however, that if the Common Stock is not so listed ortraded then the Fair Market Value shall be determined in good faith by the Board. (b) Each new Non-Employee Director elected on the date of an Annual Meeting of Stockholders ofthe Company shall automatically receive an Option for 15,000 shares of Common Stock as of the firstday of the month following such annual meeting. Each Non-Employee Director who has been re-elected as a Non-Employee Director shall automatically receive an additional Option for 15,000 sharesof Common Stock in the year in which the third anniversary of his or her latest option grant occursprovided that he/she has been re-elected as a Non-Employee Director in such year. Such Option shallbe granted as of the first day of the month following the Annual Meeting of Stockholders of theCompany in such year. (c) Each Non-Employee Director may also be granted Options from time to time upon prior approvalby the full Board. (d) No Option or any part of an Option shall be exercisable: (i) after the expiration of ten years from the date the Option was granted, (ii) unless notice of the exercise is delivered to the Company specifying the number of shares to bepurchased and payment in full is made for the shares of Common Stock being acquired thereunder atthe time of exercise; such payment shall be made (A) in cash or by check, (B) by tendering to the Company Common Stock shares owned by the person exercising the Optionand having a Fair Market Value equal to the cash exercise price applicable to such Option, it beingunderstood that the Board shall determine acceptable methods for tendering Common Stock shares andmay impose such conditions on the use of Common Stock shares to exercise Options as it deemsappropriate, or (C) by a combination of cash or check and Common Stock shares as aforesaid; or (D) by additional methods as may be authorized by the Board in it sole discretion (including "cashlessexercise" arrangements); and 2 (iii) unless the person exercising the Option has been, at all times during the period beginning with thedate of grant of the Option and ending on the date of such exercise, a Director of the Company, exceptthat if such person shall cease to be such a Director by reason of Retirement (as defined below),Incapacity (as defined below) or death while holding an Option that has not expired and has not beenfully exercised, such person, or in the case of death, the executors, administrators, or distributees, asthe case may be, may at any time after the date such person ceased to be such a Director (but in noevent after the Option has expired under the provisions of subparagraph 5(d)(i) above) exercise theOption (to the extent exercisable by the Director on the date he ceased to be a Director) with respect toany shares of Common Stock as to which such person has not exercised the Option on the date theperson ceased to be such a Director. If any person who has ceased to be a Director for any reason other than death, shall die holding anOption that has not expired and has not been fully exercised, such person's executors, administrators, ordistributees, as the case may be, may exercise the Option (to the extent vested and exercisable by thedecedent on his date of death) provided that in no event may the Option be exercised after it has expiredpursuant to subparagraph 5(d)(i). In the event any Option is exercised by the executors, administrators, legatees, or distributees of theestate of a deceased optionee, the Company shall be under no obligation to issue stock thereunder unlessand until the Company is satisfied that the person or persons exercising the Option are the dulyappointed legal representatives of the deceased optionee's estate or the proper legatees or distributeesthereof. (e) One-third of the total number of shares of Common Stock covered by all Options shall becomeexercisable beginning with the first anniversary date of the grant of the Option; thereafter an additionalone-third of the total number of shares of Common Stock covered by the Option shall becomeexercisable on each subsequent anniversary date of the grant of the Option until on the thirdanniversary date of the grant of the Option the total number of shares of Common Stock covered bythe Option shall become exercisable. In the event the Non-Employee Director ceases to be a Directorby reason of Retirement, Incapacity or death, the total number of shares of Common Stock covered bythe Option shall thereupon become exercisable. Such exercisable options must be exercised prior to theearlier of (i) one year after the date of such Retirement, Incapacity or death and (ii) the date of theiroriginal expiration. (f) Options granted to a person shall automatically be forfeited by such person if such person shallcease to be a Director for reasons other than Retirement, Incapacity or death. (g) As used in this Section 5, the term "Retirement" means the termination of a Director's service onthe Board pursuant to (i) resignation from the Board upon reaching retirement age or (ii) otherwiseresigning or not standing for reelection with the approval of the Board; provided, however, that"Retirement" shall not include any termination of service resulting from an act of (i) fraud orintentional misrepresentation or (ii) embezzlement, misappropriation or conversion of assets oropportunities of the Company or any direct or indirect majority-owned subsidiary of the Company, bysuch Director. The determination of whether termination results from any such act shall be made bythe Board, whose determination shall be conclusive. 3 (h) As used in this Section 5, the term "Incapacity" means any material physical, mental or otherdisability rendering the Director incapable of substantially performing his or her services hereunder thatis not cured within 180 days of the first occurrence of such incapacity. In the event of any disputebetween the Company and the Director as to whether he or she is incapacitated as defined herein, thedetermination of whether the Director is so incapacitated shall be made by an independent physicianselected by the Board and the decision of such physician shall be binding upon the Company and theDirector. Notification of the grant of an option shall be issued to the Director. Such notification shall include thevesting schedule, the term of the option and any additional rules or exercise rights specific to the grant. 6. Adjustment in the Event of Certain Changes in Stock. (a) If there is any change in the number of outstanding shares of Common Stock by reason of any stockdividend, stock split, recapitalization, combination, exchange of shares, merger, consolidation,liquidation, split-up, spin-off or other similar change in capitalization, any distribution to commonstockholders, including a rights offering, other than cash dividends, or any like change, then thenumber of shares of Common Stock available for options, the number of such shares covered byoutstanding options, and the price per share of such options shall be proportionately adjusted by theBoard to reflect such change or distribution; provided, however, that any fractional shares resultingfrom such adjustment shall be eliminated. Without limiting the foregoing, in the event of a subdivisionof the outstanding shares of Common Stock (stock-split), a declaration of a dividend payable in shares ofCommon Stock, or a combination or consolidation of the outstanding shares of Common Stock into alesser number of shares, the authorization limit under Section 3 and the award amounts under Section5 shall automatically be adjusted proportionately, and the shares of Common Stock then subject to eachoption shall automatically be adjusted proportionately without any change in the aggregate purchaseprice therefor. (b) In the event of change in the Common Stock of the Company as presently constituted, the sharesresulting from any such change shall be deemed to be the Common Stock within the meaning of thePlan. 4 (c) In the event of a reorganization, recapitalization, merger, consolidation, acquisition of property orstock, extraordinary dividend or distribution (other than as covered by Section 6(a) hereof), separationor liquidation of the Company, or any other event similarly affecting the Company, the Board shallhave the right, but not the obligation, notwithstanding anything to the contrary in this Plan, to providethat outstanding options granted under this Plan shall (i) be canceled in respect of a cash payment or thepayment of securities or property, or any combination thereof, with a per share value determined by theBoard in good faith to be equal to the value received by the stockholders of the Company in such eventin the respect of each share of Common Stock, with appropriate deductions of exercise prices, or (ii) beadjusted to represent options to receive cash, securities, property, or any combination thereof, with a pershare value determined by the Board in good faith to be equal to the value received by the stockholdersof the Company in such event in respect of each share of Common Stock, at such exercise prices as theBoard in its discretion may determine is appropriate. (d) To the extent that the foregoing adjustments relate to stock or securities of the Company, suchadjustments shall be made by the Board, whose determination in that respect shall be final, binding andconclusive. 7. Nonexclusive Plan. Neither the adoption of the Plan by the Board nor the submission of the Plan tothe stockholders of the Company for approval shall be construed as creating any limitations on thepower of the Board to adopt such other incentive arrangements as it may deem desirable, including,without limitation, the granting of stock options otherwise than under the Plan, and such arrangementsmay be either generally applicable or applicable only in specific cases. 8. Nonassignability. Options may be transferred by gift to any member of the optionee's immediatefamily or to a trust for the benefit of one or more of such immediate family members, by the laws ofdescent and distribution, or as otherwise permitted by the Board. During a Director's lifetime, optionsgranted to a Director may be exercised only by the Director or by his or her guardian or legalrepresentative or his or her permitted transferee. 9. Amendment or Discontinuance. The Plan may be amended or discontinued by the Board withoutthe approval of the stockholders of the Company, except that stockholder approval shall be required forany amendment that would (a) materially increase (except as provided in Section 6 hereof) themaximum number of shares of Common Stock for which Options may be granted under the Plan, (b)materially expand the class of persons eligible to participate in the Plan, (c) expand the types of awardsavailable under the Plan, (d) otherwise materially increase the benefits to participants under the Plan, or(e) otherwise constitute a material change requiring stockholder approval under applicable laws, policiesor regulations or the applicable listing or other requirements of the principal stock exchange or theNASDAQ National Market on which the Common Stock is then listed or traded. 10. Options Previously Granted. At any time and from time to time, the Board may amend, modify orterminate any outstanding Option without approval of the optionee; provided, however: 5 (a) Such amendment, modification or termination shall not, without the optionee's consent, reduce ordiminish the value of such Option determined as if the Option had been exercised on the date of suchamendment or termination (with the per-share value of an Option for this purpose being calculated asthe excess, if any, of the Fair Market Value as of the date of such amendment or termination over theexercise price of such Option); (b) The original term of an Option may not be extended without the prior approval of the stockholdersof the Company; (c) Except as otherwise provided in Section 6, the exercise price of an Option may not be reduced,directly or indirectly, without the prior approval of the stockholders of the Company; and (d) No termination, amendment, or modification of the Plan shall adversely affect any Optionpreviously granted under the Plan, without the written consent of the optionee affected thereby. Anoutstanding option shall not be deemed to be "adversely affected" by a Plan amendment if suchamendment would not reduce or diminish the value of such Option determined as if the Option hadbeen exercised on the date of such amendment (with the per-share value of an Option for this purposebeing calculated as the excess, if any, of the Fair Market Value as of the date of such amendment overthe exercise price of such Option). 11. Effect of Plan. Neither the adoption of the Plan nor any action of the Board shall be deemed to giveany Non-Employee Director any right to be granted an option to purchase Common Stock or any otherrights except as may be evidenced in a valid resolution, action, or minutes of the Committee, or by astock option agreement or notice, or any amendment thereto, duly authorized by the Board andexecuted on behalf of the Company, and then only to the extent and on the terms and conditionsexpressly set forth therein. 12. Term. Unless sooner terminated by action of the Board, this Plan will terminate on August 1,2024. The Board may not grant Options under the Plan after that date, but Options granted before thatdate will continue to be effective in accordance with their terms. 13. Effectiveness; Approval of Stockholders. The Plan shall take effect upon its adoption by theBoard, but its effectiveness and the exercise of any options shall be subject to the approval of theholders of a majority of the voting shares of the Company, which approval must occur within twelvemonths after the date on which the Plan is adopted by the Board. 6 14. Withholding Taxes. The Company shall have the authority and the right to deduct or withhold, orrequire an optionee to remit to the Company, an amount sufficient to satisfy federal, state, and localtaxes required by law to be withheld with respect to any exercise, lapse of restriction or other taxableevent arising as a result of the Plan. If shares of Common Stock are surrendered to the Company tosatisfy withholding obligations in excess of the minimum withholding obligation, such shares must havebeen held by the participant as fully vested shares for such period of time, if any, as necessary to avoidvariable accounting for the option. With respect to withholding required upon any taxable event underthe Plan, the Board may require or permit that any such withholding requirement be satisfied, in wholeor in part, by withholding from the option shares of Common Stock having a Fair Market Value on thedate of withholding equal to the minimum amount (and not any greater amount) required to be withheldfor tax purposes, all in accordance with such procedures as the Board may establish.7  EXHIBIT 10.8 Date [Employee Name][Address][City, State Zip Code] Dear [ ]:Pursuant to the terms and conditions of the AVX Corporation 2004 Stock Option Plan (the 'Plan'), you have beengranted an Incentive Stock Option to purchase [ ] shares of stock as outlined below. Granted To: [ ] Grant Date: [ ]Granted: [ ]Grant Price:$[ ] Total Cost to Exercise: $[ ]Expiration Date: [ ]Vesting Schedule: 25% per year for 4 years[ ] on xx/xx/xx[ ] on xx/xx/xx[ ] on xx/xx/xx[ ] on xx/xx/xx  Date [Employee Name][Address][City, State Zip Code]Dear [ ]:Pursuant to the terms and conditions of the AVX Corporation 2004 Stock Option Plan (the 'Plan'), you have beengranted a Non-Qualified Stock Option to purchase [ ] shares of stock as outlined below. Granted To: [ ] Grant Date: [ ]Granted: [ ]Grant Price:$[ ] Total Cost to Exercise: $[ ]Expiration Date: [ ]Vesting Schedule: Special Vesting[ ] on xx/xx/xx[ ] on xx/xx/xx[ ] on xx/xx/xx Pursuant to the terms and conditions of the Plan, you have been granted an Incentive Stock Option to purchase[ ] shares of stock as outlined below. Granted To: [ ] Grant Date: [ ]Granted: [ ]Grant Price:$[ ] Total Cost to Exercise: $[ ]Expiration Date: [ ]Vesting Schedule: Special Vesting[ ] on xx/xx/xx[ ] on xx/xx/xx[ ] on xx/xx/xx EXHIBIT 21.1 AVX CORPORATIONSUBSIDIARIES OF THE REGISTRANT As of March 31, 2013, active significant subsidiaries, all 100% owned directly or indirectly, consist of thefollowing: 1.AVX Corporation (Delaware)2.AVX Tantalum Corporation (Delaware)3.AVX Filters Corporation (Delaware)4.Elco USA, Inc. (Delaware)5.Avio Excelente, S.A. DE C.V. (Mexico)6.AVX Industries. Pte. Ltd. (Singapore)7.AVX Components DA Amazonia Ltda. (Brazil)8.AVX Israel Limited (Israel)9.AVX Limited (United Kingdom)10.AVX Czech Republic s.r.o. (Czech Republic)11.TPC - SAS (France)12.Elco Europe GmbH (Germany)13.AVX/Kyocera Pt. Ltd. (Singapore)14.TPC (Malaysia) Sdn. Bhd. (Malaysia)15.AVX Electronics (Tianjin) Co. Ltd. (China)16.AVX/Kyocera Asia Ltd. (Hong Kong)17.Kyocera Electronic Devices, LLC (Delaware)18.American Technical Ceramics Corp (New York)19.American Technical Ceramics (Florida), Inc.20.AVX Tantalum Asia Corporation (Japan)21.AVX Tantalum (Tianjin) Co., Ltd. (China)  EXHIBIT 23.1 CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (Nos. 33-98094, 33-98114, 333-02808, 333-37201, 333-00890, 333-85561, 333-103611, 333-127362, 333-152744 and 333-177816) of AVX Corporation of our reportdated May 21, 2013 relating to the financial statements and the effectiveness of internalcontrol over financial reporting, which appears in the Form 10-K. /s/PricewaterhouseCoopers LLP PricewaterhouseCoopers LLPAtlanta, GeorgiaMay 21, 20131LEGAL01/13179800v2EXHIBIT 24.1 AVX CORPORATION POWER OF ATTORNEY Each of the undersigned directors and officers of AVX Corporation, a Delaware corporation(the “Corporation”), hereby severally constitutes and appoints Kurt Cummings, MichaelHufnagel, and Holly Olson, each of them signing singly, to be his Attorney-in-Fact with fullpower of substitution to act in his name on his behalf to sign and to file with the Securities andExchange Commission (1) under the Securities Exchange Act of 1934, the Corporation'sAnnual Report on Form 10-K for the fiscal year ended March 31, 2013 (the “Annual Report”)and (2) under the Securities Act of 1933, Registration Statements on Form S-8 or otherappropriate Forms which incorporate by reference the Annual Report (each a “RegistrationStatement”), and any and all amendments to any such Registration Statement, for shares of theCorporation's Common Stock, $.01 par value, and other interests therein issuable, under eachof the following employee benefit plans as the same may be amended from time to time, (i) theAVX Corporation Retirement Plan, (ii) the AVX Corporation 1995 Stock Option Plan, (iii) theAVX Corporation Non-Employee Directors' Stock Option Plan, (iv) the AVX Corporation 2004Stock Option Plan, (v) the AVX Corporation 2004 Non-Employee Director’s Stock OptionPlan, (vi) the AFGWU Local 1028 401(k) Retirement Plan for Employees of AVX Corporationin Raleigh, North Carolina, (vii) the AVX Corporation SERP, (viii) the AVX CorporationNonqualified Supplemental Retirement Plan, and (ix) the AVX Corporation 401(k) Plan forHourly Paid Employees at Myrtle Beach and Conway Plants, and in each case, to execute anddeliver any agreements, instruments, certificates or other documents which such person shalldeem necessary or proper in connection with the filing of any such Registration Statement orthe Annual Report, including any amendments or supplements thereto, and generally to act forand in the name of the undersigned with respect to any such filing as fully as could theundersigned if then personally present and acting. In addition, to act in his name on his behalf to: (a) execute for and on behalf of the undersigned in the undersigned's capacity asan officer and/or director of the Corporation or otherwise, Forms 3, 4 and 5 in accordance withSection 16(a) of the Securities Exchange Act of 1934 and the rules thereunder; (b) do and perform any and all acts for and on behalf of the undersigned whichmay be necessary or desirable to complete and execute any such Form 3, 4 or 5 and timely filesuch form with the Securities and Exchange Commission and any stock exchange or similarauthority; and  (c) take any other action of any type whatsoever in connection with the foregoingwhich, in the opinion of such attorney-in-fact, may be of benefit to or in the interest of theundersigned, it being understood that the documents executed by such attorney-in-fact onbehalf of the undersigned pursuant to this Power of Attorney shall be on such terms andconditions as such attorney-in-fact may approve in such attorney-in-fact's discretion. The undersigned hereby grants to each such attorney-in-fact full power and authority to do andperform any and every act and thing whatsoever requisite, necessary, or proper to be done inthe exercise of any of the rights and powers herein granted, as fully to all intents and purposesas the undersigned might or could do if personally present, with full power of substitution orrevocation, hereby ratifying and confirming all that such attorney-in-fact, or such attorney-in-fact's substitute or substitutes, shall lawfully do or cause to be done by virtue of this Power ofAttorney and the rights and powers herein granted. The undersigned acknowledges theforegoing attorneys-in-fact, in serving in such capacity at the request of the undersigned, arenot assuming, nor is the Corporation assuming, any of the undersigned's responsibilities tocomply with Section 16 of the Securities Exchange Act of 1934. This Power of Attorney shall remain in full force and effect unless earlier revoked by theundersigned in a signed writing delivered to the foregoing attorneys-in-fact. IN WITNESS WHERE OF, the undersigned has executed this Power of Attorney on the dateset opposite his respective name. SIGNATURE TITLE DATE /s/Kazuo Inamori Director May 21, 2013KAZUO INAMORI /s/John S. Gilbertson Director May 21, 2013JOHN S. GILBERTSON /s/Tetsuo Kuba Director May 21, 2013TETSUO KUBA /s/Makoto Kawamura Director May 21, 2013MAKOTO KAWAMURA /s/Shoichi Aoki Director May 21, 2013SHOICHI AOKI /s/Donald Christiansen Director May 21, 2013DONALD CHRISTIANSEN /s/David Decenzo Director May 21, 2013DAVID DECENZO /s/Tatsumi Maeda Director May 21, 2013TATSUMI MAEDA  /s/Joseph Stach Director May 21, 2013JOSEPH STACH - 2 -  - 3 -EXHIBIT 31.1CERTIFICATIONS I, John S. Gilbertson, certify that: 1.I have reviewed this annual report on Form 10-K of AVX Corporation; 2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state amaterial fact necessary to make the statements made, in light of the circumstances under which suchstatements were made, not misleading with respect to the period covered by this report; 3.Based on my knowledge, the financial statements, and other financial information included in this report,fairly present in all material respects the financial condition, results of operations and cash flows of theregistrant as of, and for, the periods presented in this report; 4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosurecontrols and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controlover financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant andhave: a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures tobe designed under our supervision, to ensure that material information relating to the registrant, includingits consolidated subsidiaries, is made known to us by others within those entities, particularly during theperiod in which this report is being prepared; b.Designed such internal control over financial reporting, or caused such internal control over financialreporting to be designed under our supervision, to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles; c.Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in thisreport our conclusions about the effectiveness of the disclosure controls and procedures, as of the endof the period covered by this report based on such evaluation; and d.Disclosed in this report any change in the registrant's internal control over financial reporting thatoccurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the caseof an annual report) that has materially affected, or is reasonably likely to materially affect, theregistrant's internal control over financial reporting; and 5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internalcontrol over financial reporting, to the registrant's auditors and the audit committee of the registrant's board ofdirectors (or persons performing the equivalent functions): a.All significant deficiencies and material weaknesses in the design or operation of internal control overfinancial reporting which are reasonably likely to adversely affect the registrant's ability to record,process, summarize and report financial information; and b.Any fraud, whether or not material, that involves management or other employees who have a significantrole in the registrant's internal control over financial reporting. /s/John S. GilbertsonDate: May 21, 2013 John S. Gilbertson Chief Executive Officer A signed original of this written statement required by Section 302 of the Sarbanes-Oxley Act of 2002 has beenprovided to AVX Corporation and will be retained by AVX Corporation and furnished to the Securities andExchange Commission or its staff upon request.EXHIBIT 31.2CERTIFICATIONS I, Kurt P. Cummings, certify that: 1.I have reviewed this annual report on Form 10-K of AVX Corporation; 2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state amaterial fact necessary to make the statements made, in light of the circumstances under which suchstatements were made, not misleading with respect to the period covered by this report; 3.Based on my knowledge, the financial statements, and other financial information included in this report,fairly present in all material respects the financial condition, results of operations and cash flows of theregistrant as of, and for, the periods presented in this report; 4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosurecontrols and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controlover financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant andhave: a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures tobe designed under our supervision, to ensure that material information relating to the registrant, includingits consolidated subsidiaries, is made known to us by others within those entities, particularly during theperiod in which this report is being prepared; b.Designed such internal control over financial reporting, or caused such internal control over financialreporting to be designed under our supervision, to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles; c.Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in thisreport our conclusions about the effectiveness of the disclosure controls and procedures, as of the endof the period covered by this report based on such evaluation; and d.Disclosed in this report any change in the registrant's internal control over financial reporting thatoccurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the caseof an annual report) that has materially affected, or is reasonably likely to materially affect, theregistrant's internal control over financial reporting; and 5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internalcontrol over financial reporting, to the registrant's auditors and the audit committee of the registrant's board ofdirectors (or persons performing the equivalent functions): a.All significant deficiencies and material weaknesses in the design or operation of internal control overfinancial reporting which are reasonably likely to adversely affect the registrant's ability to record,process, summarize and report financial information; and b.Any fraud, whether or not material, that involves management or other employees who have a significantrole in the registrant's internal control over financial reporting. /s/Kurt P. CummingsDate: May 21, 2013 Kurt P. Cummings Vice President, Chief Financial Officer,Treasurer and Secretary A signed original of this written statement required by Section 302 of the Sarbanes-Oxley Act of 2002 has beenprovided to AVX Corporation and will be retained by AVX Corporation and furnished to the Securities andExchange Commission or its staff upon request.- 1 - EXHIBIT 32.1 CERTIFICATION PURSUANT TO18 U.S.C. SECTION 1350,AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Annual Report of AVX Corporation (the "Registrant") on Form 10-K for the periodending March 31, 2013 as filed with the Securities and Exchange Commission on the date hereof (the“Report”), we, John S. Gilbertson and Kurt P. Cummings, Chief Executive Officer and Chief FinancialOfficer, respectively, of the Registrant, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that to our knowledge: (1)The Report fully complies with the requirements of section 13(a) or 15(d) of the SecuritiesExchange Act of 1934; and (2)The information contained in the Report fairly presents, in all material respects, the results ofoperations and financial condition of the Registrant. Date:May 21, 2013 /s/John S. GilbertsonJohn S. GilbertsonChief Executive Officer /s/ Kurt P. CummingsKurt P. CummingsChief Financial Officer A signed original of this written statement required by Section 906, or other document authenticating,acknowledging, or otherwise adopting the signature that appears in typed form within the electronic versionof this written statement required by Section 906, has been provided to AVX Corporation and will beretained by AVX Corporation and furnished to the Securities and Exchange Commission or its staff uponrequest.

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