AVX Corporation
Annual Report 2014

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, 2014 [ ] 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 of this 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 $13.13 on September 30, 2013, the last business day of the registrant's most recently completedsecond fiscal quarter, the aggregate market value of the common stock held by non‑affiliates of the registrant as of that date was$613,503,228. As of May 15, 2014, there were 168,228,905 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 2014 Annual Meeting of Stockholders, which will be filed within 120 daysof March 31, 2014, are incorporated by reference into Part III. 2 TABLE OF CONTENTSPart I PageItem 1.Business4 Item 1A.Risk Factors12 Item 1B.Unresolved Staff Comments 18 Item 2.Properties 19 Item 3.Legal Proceedings 20 Item 4.Mine Safety Disclosures 20 Part IIItem 5.Market for the Registrant's Common Equity, Related Stockholder Matters and IssuerPurchases of Equity Securities20 Item 6.Selected Financial Data22 Item 7.Management's Discussion and Analysis of Financial Condition and Results of Operations 24 Item 7A.Quantitative and Qualitative Disclosures About Market Risk36 Item 8.Financial Statements and Supplementary Data37 Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure37 Item 9A.Controls and Procedures 37 Item 9B.Other Information38 Part IIIItem 10.Directors, Executive Officers and Corporate Governance38 Item 11.Executive Compensation 39 Item 12.Security Ownership of Certain Beneficial Owners and Management and Related StockholderMatters39 Item 13.Certain Relationships and Related Transactions, and Director Independence39 Item 14.Principal Accounting Fees and Services 39 Part IVItem 15.Exhibits and Financial Statement Schedules39 Signatures 42 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, interconnect devices, and related products. Virtually all types of electronicdevices use our passive component products to store, filter, or regulate electric energy. Our passive electronic component products include ceramic and tantalum capacitors, film capacitors, varistors, filters, and 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, and othermanufacturing suppliers. We also manufacture and sell electronic connectors and inter-connect systems and distribute and sell certainelectronic connectors manufactured by Kyocera. We are organized by product line with five main product groups. Our reportable segments are based on the types of products 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 automotive, telecom, and memory connectorsmanufactured by AVX. In addition, we have a corporate administration group consisting of finance, legal, EHS, 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, transportation, energy harvesting, defense andaerospace electronic systems, and consumer electronics. Our principal strategic advantages include: Creating Technology Leadership. We have research and development locations in the United States, United Kingdom, CzechRepublic, France, Israel, and Japan. We developed numerous new products and product extensions during fiscal 2014 and won severalawards that recognize our technology leadership. These new products add to the broad product line we offer to our customers. Due to our broadproduct offering, none of our products individually represent a material portion of our revenues. Our scientists are working to develop product solutions to the challenges facing our customers as consumers and businesses demand moreadvanced electronic solutions to manage their everyday lives and businesses. Our engineers are continually working to enhance ourmanufacturing processes to improve capability, capacity, and yield, while continuing to reduce manufacturing costs. Providing a Broad Product Line. We believe that the breadth and quality of our product line and our ability to quickly respond 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 substantially complete passive component solutions. This broad array of products allowsour 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 El Salvador, Malaysia, Mexico, China, 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 66% of our net sales in fiscal2014. KDP and KCD Resale represented approximately 20%, and Interconnect products, including KCP Resale Connectors, representedapproximately 14% of our net sales in fiscal 2014. The table below presents revenues for fiscal 2012, 2013 and 2014 by productgroup. Financial information concerning our Passive Components, KED Resale, and Interconnect segments is set forth in Note 15 to theconsolidated financial statements elsewhere herein. Fiscal Year Ended March 31,Sales revenue (in thousands)201220132014Ceramic Components$179,984 $173,315 $193,978 Tantalum Components393,468 330,209 394,119 Advanced Components378,843 346,543 357,900 Total Passive Components952,295 850,067 945,997 KDP and KCD Resale410,419 377,707 293,048 KCP Resale Connectors54,765 61,809 64,680 Total KED Resale465,184 439,516 357,728 Interconnect127,775 124,817 138,879 Total Revenue$1,545,254 $1,414,400 $1,442,604 Passive Components We manufacture and resell a full line of multi-layered ceramic and solid tantalum capacitors in many different sizes andconfigurations. Our strategic focus on the growing use of passive components is reflected in our investment of approximately $81million in facilities and equipment used to manufacture passive components during the past three fiscal years. We also added passivecomponent manufacturing capacity with the February 2013 acquisition of the Tantalum Components division of Nichicon Corporation (“the worldwide electronics market because technological advances have been constantly expanding the number and type of applications for these products. Tantalum and Ceramic components are commonly used in conjunction with integrated circuits and are best suited for 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 62% of our passive component netsales in fiscal 2014. 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 and manufacture customized products to meet the specifications of particularapplications. The manufacture of custom products permits us, through our research and development activities, to make technologicaladvances, provide customers with design solutions to fit their needs, gain a marketing inroad with customers with respect to ourcomplete product line, and, in some cases, develop products that can be sold to additional customers in the future. Sales of advancedproducts accounted for approximately 38% of passive component net sales in fiscal 2014. 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 25% of net sales in fiscal 2014. For additional information regarding the Company’s relationship with Kyocera see“Management’s Discussion and Analysis of Financial Condition and Results of Operations – Relationship with Kyocera and RelatedTransactions.” Interconnect We manufacture and resell high-quality electronic connectors and interconnect systems for use in various industries. Our productlines include a variety of industry-standard connectors as well as products designed specifically for our customers' uniqueapplications. An expanding portion of the electronics market for AVX Interconnect products is the automotive market, with applicationsthroughout a vehicle, including engine control, transmission control, audio, brakes, and stability and safety control systems. We producefine pitch connectors used in portable devices such as smart phones, other cell phones, notebook computers, tablets, GPS, and other handheld devices. In addition, we offer specialty connectors designed to address customer specific applications across a wide range ofproducts and end markets, including the expanding LED and LCD markets. We have invested approximately $28 million in facilities,tooling, and equipment over the past three years, as we continue to focus on new product development and enhancement of productioncapabilities for our Interconnect business. Sales of Interconnect products, including KCP Resale connector products, accounted forapproximately 14% of net sales in fiscal 2014. Approximately 32% of combined Interconnect and KCP Resale Connector net sales infiscal 2014 consisted of connectors manufactured by Kyocera. Marketing, Sales, and Distribution We place a high priority on solving customers’ electronic component design challenges and responding to their needs. To better 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%, 26%, and 46% of our net sales for fiscal 2014 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 these independent manufacturers’ representatives and independent electronic component distributors. We believethat this 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. In order to maximize our opportunities, ourengineering and sales teams maintain close relationships with OEM, EMS, and electronic component distributor customers. Our largestcustomers may vary from year to year, and no customer has a long-term commitment to purchase our products. During the fiscal yearended March 31, 2014, no single customer accounted for more than 10% of our sales. One customer comprised 13% of sales for the fiscalyear ended March 31, 2013. No single customer accounted for more than 10% of sales during the year ended March 31, 2012. As of March31, 2014, one customer represented 15% of the Company’s accounts receivable balance. No single customer accounted for more than10% of the Company’s accounts receivable as of March 31, 2013. Because we are a supplier to several significant manufacturers in thebroad based electronic devices industries and because of the cyclical nature of these industries, the significance of any one customer canvary 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 $236 million at March 31, 2012, $247 million at March 31, 2013 and $270 million atMarch 31, 2014. 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 planned shipments that are included in our backlog, in manyinstances without any penalty. Backlog fluctuates from year to year due, in part, to changes in customer inventory levels, changes toconsignment inventory arrangements, order patterns, and product delivery lead times in the industry. Accordingly, the backlog outstandingat any point in time is not necessarily indicative of the level of business to be expected in any ensuing period since many orders are placed anddelivered within the same period. In addition, the increased use of vendor managed inventory and similar consignment type arrangementstend to limit the significance of backlog as future use and sale 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 ofproduct extensions, innovative new products and improved manufacturing processes as well as engineering advances in existing productlines and manufacturing operations. Other areas of emphasis include material synthesis and the integration of passive components forapplications requiring reduced size and lower manufacturing costs associated with board assembly. Research, development, andengineering expenditures were approximately $26 million, $30 million, and $26 million during fiscal 2012, 2013, and 2014, respectively. Thelevel of such spending can fluctuate as new products are transferred to full scale production and process enhancements are implemented. We own United States patents as well as corresponding patents in various other countries, and also have patent 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 are available onlyhad a policy of notusing 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 conductedextensive supply chain investigations relating to tantalum and are a participant in “Solutions for Hope”, which is a program designed toensure that tantalum sourced from the DRC does not derive from conflict areas. “Solutions for Hope” incorporates the independently-validated Conflict-Free Smelter program. As a result, AVX was the first in its industry to validate a “closed tantalum pipe” process,assuring all tantalum products contain only conflict-free tantalum in accordance with the principles of the Dodd-Frank legislation and thecurrent Organisation for 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 pricefluctuation. In some cases, increases in the cost of raw materials may be offset by selling price increases, productivity improvement, andcost 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 interconnect products available from any onesource. Our major competitors for passive electronic components include: Murata Manufacturing Company Ltd., TDK Corporation,KEMET Corporation, Yageo Corporation, Taiyo Yuden Co. Ltd., Samsung Electro-Mechanics, and Vishay Intertechnology, Inc. Our majorcompetitors for certain electronic interconnect products include: Tyco Electronics, Amphenol Corporation, Molex Incorporated, FCIElectronics, and Erni Electronics. There are many other companies that produce products in the markets in which we compete. Employees As of March 31, 2014, we employed approximately 10,900 full-time employees. Approximately 1,500 of these employees are employedin the United States, of which, approximately 300 are covered by collective-bargaining arrangements. In addition, some foreignemployees are members of trade and government-affiliated unions. Our relationship with our employee union groups is generallygood. However, no assurance can be given that, in response to changing social and economic conditions and our actions, labor unrest orstrikes 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 futureat all of our facilities, we believe that our operations are currently in substantial compliance, in all material respects, with all applicableenvironmental laws and regulations and that the cost of continuing compliance will not have a material effect on our financial conditionor 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 or such state statutes authorize joint and several liability,the EPA or state regulatory authorities could seek to recover all clean-up costs from any one of the PRPs at a site despite theinvolvement of other PRPs. At certain sites, financially responsible PRPs other than AVX also are, or have been, involved in siteinvestigation and clean-up activities. We believe that liability resulting from these sites will be apportioned between AVX and otherPRPs. To resolve our liability at the sites at which we have been named a PRP, we have entered into various administrative orders andconsent 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 $66.0 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 UnitedStates and the Commonwealth of Massachusetts, subject to reopener provisions, including a reopener if certain remediation costs for the site exceed $130.5 million. On April 18, 2012, the EPA issued a Unilateral Administrative Order (“UAO”) directing us to perform certain remedial actions forthe harbor clean-up pursuant to the reopener provisions. 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. Under the terms of the settlement, AVX was obligated to pay $366.3 million, plusinterest computed from August 1, 2012, in three installments over a two-year period for use by the EPA and the Commonwealth tocomplete the clean-up of the harbor. The settlement also required the EPA to withdraw the UAO, which was done. The United StatesDistrict Court approved the settlement and entered the Supplemental CD on September 19, 2013. On October 18, 2013, we paid theinitial settlement installment of $133.4 million, plus accrued interest on the entire settlement amount through that date. On March 26,2014, we prepaid the second settlement installment of $110.8 million, plus accrued interest on the remaining settlement amount throughthat date. We had reserves of approximately $380.6 million and $135.4 million at March 31, 2013 and 2014, respectively, related to the variousenvironmental matters. These reserves are classified in the consolidated balance sheets as $147.7 million and $4.4 million in accruedexpenses at March 31, 2013 and 2014, respectively, and $232.9 million and $131.0 million in other non-current liabilities at March 31, 2013and March 31, 2014, respectively. The amount recorded for identified liabilities is based on estimates. Amounts recorded are reviewedperiodically and adjusted to reflect additional legal and technical information when it becomes available. Also, uncertainties about thestatus of laws, regulations, regulatory actions, technology, and information related to individual sites make it difficult to develop anestimate of the reasonably possible aggregate environmental remediation exposure. Accordingly, these costs could differ from ourcurrent estimates. 9 On November 27, 2007, a suit was filed in South Carolina State Court by individuals as a class action pending with respect toproperty adjacent to our Myrtle Beach, South Carolina factory claiming property values have been negatively impacted by allegedmigration of certain pollutants from our property. We intend to defend vigorously the claims asserted in this lawsuit. At this stage ofthe litigation, there has not been a determination as to the nature of the liability or the amount, if any, of damages. Based on ourestimate of potential outcomes, we have accrued $1.0 million with respect to this case as of March 31, 2014. On March 1, 2010, AVX was named as a third party defendant in a case filed in Massachusetts Superior Court captioned DaRosa v. City ofNew Bedford. This case relates to a former disposal site in the City of New Bedford located at Parker Street. The City asserts that AVX,among others, contributed to that site. We intend to defend vigorously the claims that have been asserted in this lawsuit. In light of theforegoing, we are not able to estimate any amount of loss or range of loss. No accrual for costs has been recorded and the potentialthis time. AVX has received a demand for approximately $11.0 million from the City of New Bedford arising from contamination at the City’s New 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 orrange of loss. No accrual for costs has been recorded and the potential impact of this demand 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 such environmental matters at certain sites,regulatory agencies in those jurisdictions may require us to address such issues. Once it becomes probable that we will incur costs in connection with remediation of a site and such costs can be reasonably estimated, we establish reserves or adjust our reserves for our projected share of these costs. 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 Room by calling the SEC at 1-800-SEC-0330. Also, the SEC maintains an Internet website that contains reports, proxy and information statements, and other information regarding issuers, including us, that file electronically with the SEC. The public can obtain any documents that wefile 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 click “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: NameAgePositionJohn S. Gilbertson.................70 Chief Executive OfficerJohn Lawing......................... 63 Vice President, Chief Technology OfficerKurt P. Cummings................. 58 Vice President, Chief Financial Officer, Treasurer andSecretaryKathleen Kelly..................... 60 Vice President of Human ResourcesJohn Sarvis........................... 64 Vice President of Ceramic ProductsKeith Thomas....................... 59 Vice President, President of Kyocera Electronic DevicesPeter Venuto......................... 61 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 Vice President, Chief Technology Officer since April 2014. President and Chief Operating Officer from 2013 to March 2014. VicePresident of Advanced Products from 2005 to April 2013. Divisional Vice President of Advanced Products from 2002 to 2005 andDivisional 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. 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. 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. 11 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 – sometimesmaterially different – than we presently anticipate. Discussion about the important operational risks that our businesses encounter canalso be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in thisForm 10-K. We wish to caution the reader that the following important risk factors and those factors described elsewhere in this reportor other documents that we file or furnish to the SEC could cause our actual results to differ materially from those stated in forward-looking statements contained in this document and elsewhere. Below, we have described our current view of certain important strategicrisks. These risks are not presented in order of importance or probability of occurrence. Our reactions to material future developmentsas well as our competitors’ reactions to those developments will impact our future results. We operate in a cyclical business, which could result in significant fluctuations in demand for our products Cyclical changes in our customers’ businesses have resulted in, and may in the future result in, significant fluctuations in demand forour products, selling prices, and our resulting profitability. Most of our customers operate in cyclical industries. Their requirements forpassive components and interconnect products fluctuate significantly as a result of changes in general economic conditions and otherfactors. During periods of increasing demand they typically seek to increase their inventory of our products to avoid productionbottlenecks. When demand for their products peaks and begins to decline, as has happened in the past, they tend to reduce or cancelorders for our products while they use up accumulated inventory. Business cycles vary somewhat in different geographical regions andcustomer industries. Significant fluctuations in sales of our products impact our unit manufacturing costs and impact our profitability bymaking it more difficult for us to predict our production, raw materials, and shipping needs. Changes in demand mix, needed technologies,and end-use markets may adversely affect our ability to match our products, inventory, and capacity to meet customer demand and 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. 12 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 regions, 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 implementing restructuringor other cost reduction plans, we may experience disruptions in our operations and incur higher ongoing costs, which may adversely affectour 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 ourcost countries. 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 technology, product quality, price, sales terms, customer service, and delivery time. Competitorsinclude large, 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. We must continue to develop new 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 meet 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. 13 Our operating results are sensitive to raw material and resale product 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 experienced significant variability in the past. Our inability torecover costs through increased sales prices could have an adverse impact on our results of operations. For periods in which the pricesfor these raw materials rise, we may be unable to pass on the increased cost to our customers, which would result in decreased marginsfor the products in which they are used. For periods in which margins are declining, we may be required, as has occurred in the past, towrite down our inventory carrying cost of these raw materials. Depending on the extent of the difference between market price and ourcarrying cost, the write-down could have an adverse effect on our results of operations. From time to time there have been short-term market shortages of raw materials. While these shortages have not historically adversely affected our ability to increase production of products, they have historically resulted in higher raw material costs for us. There can be no assurance that any of these marketshortages in the future would not adversely affect our ability to increase production, particularly during periods of growing demand for our products. We resell products manufactured by Kyocera, as well as other component and interconnect product manufacturers. Should thesemanufacturers experience difficulties in supplying the products that we resell, or such suppliers use other channels to market theirproducts, we could experience lower sales which could have an adverse effect on our results of operations. 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 and productdelivery is a concern. They may cancel orders when business is weak and inventories are excessive, a situation that we have experienced during periods of economic slowdown. Therefore, we cannot be certain that the amount of our backlog does not exceed the level of sales thatwill ultimately be made. Our results of operations could be adversely impacted if customers cancel a material portion of orders in ourbacklog. 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 toposition us to take advantage of growth opportunities. Such acquisitions could introduce significant risks and uncertainties, includingrisks related to integrating the acquired businesses and achieving benefits from the acquisitions. More particularly, risks anduncertainties of an acquisition strategy could include: (1) difficulties in integrating newly-acquired businesses and operations in anefficient and effective manner; (2) challenges in achieving strategic objectives, cost savings, and other benefits from acquisitions; (3)risk that our markets do not evolve as anticipated and that the technologies acquired do not prove to be those needed to be successful inthose markets; (4) potential loss of key employees of the acquired businesses; (5) risk of diverting the attention of senior managementfrom our operations; (6) risks of entering new markets in which we have limited experience; (7) risks associated with integratingfinancial reporting and internal control systems; (8) difficulties in expanding information technology systems and other businessprocesses to accommodate the acquired businesses; and (9) future impairments of goodwill and other intangible assets of an acquiredbusiness. 14 Changes in our environmental liability and compliance obligations may adversely impact our operations or financial condition 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 or financial condition. In addition, more stringent environmental regulations may be enacted in thefuture, and we cannot presently determine the modifications, if any, in our operations that any such future regulations might require, orthe cost of compliance with these regulations. In order to resolve liabilities at various sites, we have entered into variousadministrative orders and consent decrees, some of which may be, under certain conditions, reopened or subject to renegotiation. See“Environmental Matters” in Item 1 elsewhere in this Form 10-K for additional information. 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 production of a product manufactured, or contracted to bemanufactured, by that issuer. A final rule was issued by the SEC on August 22, 2012. The metals covered by the rules are commonlyreferred to as “3TG” and include tin, tantalum, tungsten, and gold. We use many of these materials in our production processes. The rulerequires companies to perform due diligence, disclose, and report whether or not such minerals originate from the DRC and adjoiningcountries. However, the implementation of these new requirements could adversely affect the sourcing, availability, and pricing of suchminerals if they are found to be used in the manufacture of our products. In addition, we will incur additional costs to comply with thedisclosure requirements, including costs related to determining the source of any of the relevant minerals and metals used in ourproducts. Global supply chains are complicated with multiple layers and suppliers 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 finance or benefit armed groups in the DRC or adjoining countries. “Solutions for Hope” incorporatesthe independently-validated Conflict-Free Smelter program. As a result, AVX was the first in its industry to validate a “closed tantalumpipe” process, assuring all tantalum products contain only conflict-free tantalum in accordance with the principles of the Dodd-Franklegislation and the current 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 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. 15 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 legislativeand regulatory change in response to the potential impacts of climate change including pending U.S. legislation that, if enacted, would limit and reduce greenhouse gasemissions through a “cap and trade” system of allowances and credits, among other provisions. There is also current and emerging regulation in other countries in which we or our customers operate, such as the mandatoryrenewable energy target in Australia. Any significant, sustained increase in energy costs could result in increases in our capitalexpenditures, operating expenses, and costs of important raw materials resulting in an adverse effect on our results of operations andfinancial 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 stockholder’s equity. 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 law changes, 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. Our products are subject to stringent specifications and operating tolerances All of our products are built to specifications and tested by us for adherence to such specifications before shipment to customers. We warrant that our products will meet such specifications. In the past, we have not incurred significant warranty claims. However, we have seenan increasing trend in the marketplace for claims related to end market product application failures or end-user recall or damage claimsrelated 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 investment securities in the financial sector. If the issuers of such investmentsdefault on their obligations or their credit ratings are negatively impacted by liquidity, credit deterioration or losses, financial results, orother factors, the value of our cash equivalents, short-term investments, and long-term investments could decline and have an adverseeffect on 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. 16 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, and the discount rate used tocalculate our pension obligations for funding and expense purposes. In the past, declines in the financial markets have negativelyimpacted the value of the assets in our defined benefit pension plans. In addition, lower bond yields may reduce our discount rates,resulting in increased pension contributions and expense. Funding obligations are determined under government regulations and measured each year based on the value of the assets 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 financial 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. 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. 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 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. 17 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 70% 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. Many of the information technologysystems used by the Company globally have been in place for many years and not all hardware and software may be currently supportedby vendors. These information technology systems may be susceptible to damage, disruptions, or shutdowns due to failures during theprocess of upgrading or replacing software, databases or components thereof, power outages, hardware failures, computer viruses,attacks by computer hackers, telecommunication failures, user errors, or catastrophic events. If our information technology systemssuffer severe damage, disruption, or shutdown and our business continuity plans do not effectively resolve the issues in a timely manner, our product sales, financial condition, and results ofoperations may be materially and adversely affected, and we could experience delays in reporting our financial results. In addition, if we are unable to prevent security breaches, we may suffer financial and reputational damage or penalties because 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. 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 affecting 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, laborstrikes, 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.18 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 capitalexpenditures, as suitable and adequate for our operations in the current business environment. Our capital expenditures for plant andequipment were $49.2 million in fiscal 2012, $43.7 million in fiscal 2013 and $26.8 million in fiscal 2014. 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, aset of fundamental quality system standards developed by the International Organization for Standardization. Some of our facilities arealso qualified and registered under the more stringent QS 9000, a comprehensive quality system for continuous improvement developed bythe 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. LocationApproximateSquareFootageType ofInterestDescriptionof UseUNITED STATESFountain Inn, SC300,000 OwnedHeadquarters/Manufacturing/Warehouse – PCMyrtle Beach, SC308,000 OwnedManufacturing/Research — PC 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 OwnedManufacturing — PC Sun Valley, CA25,000 Leased Manufacturing — PCColorado Springs, CO15,000 Owned Manufacturing — PC NON U.S.Tianjin, China520,000 Owned Manufacturing — PC San Salvador, El Salvador420,000 Owned Manufacturing — PCSaint-Apollinaire, France322,000 Leased Manufacturing/Research — PC Lanskroun, Czech Republic500,000 Owned Manufacturing/Warehouse/Research — PCLanskroun, Czech Republic70,000 Leased Manufacturing/Warehouse — PCUherske Hradiste, CzechRepublic470,000 Owned Manufacturing — PCUherske Hradiste, CzechRepublic139,000 LeasedWarehouse — PCBzenec, Czech Republic194,000 OwnedManufacturing — CPPenang, Malaysia190,000 OwnedManufacturing — PCColeraine, N. Ireland185,000 OwnedManufacturing/Research — PCBetzdorf, Germany111,000 OwnedManufacturing — CPJuarez, Mexico116,000 Owned Manufacturing — PC — CPJerusalem, Israel88,000 Leased Manufacturing/Research — PCAdogawa, Japan206,000 Owned Manufacturing/Research — PCHong Kong30,000 Owned Warehouse — PC — CPHong Kong21,000 Leased Warehouse/Office – PC – CP 19 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 if necessary. 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. On March 1, 2010, AVX was named as a defendant in a patent infringement case filed in the United States District Court for the District of Delaware captioned Greatbatch, Inc. v. AVXCorporation. This case alleges that certain AVX products infringe on one or more of the six Greatbatch patents. We intend to defendvigorously the claims that have been asserted in this lawsuit. In light of the foregoing, we are not able to estimate any amount of lossor range of loss. No accrual for costs has been recorded and the potential impact of this case on our financial position, results ofoperations, comprehensive income (loss), and cash flows cannot be determined at this time. 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 Market for Common Stock Our common stock is listed on the New York Stock Exchange and trades under the symbol “AVX.” At May 12, 2014, there were323 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, 2013 and March 31, 2014. On May 16, 2014, our Board of Directors declared a $0.095 dividend pershare of common stock with respect to the quarter ended March 31, 2014. 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 RangeDividends Declared 20132014Per Share HighLowHighLow20132014First Quarter$13.36 $10.32 $12.26 $11.16 $0.0750 $0.0875 Second Quarter10.85 9.32 13.51 12.04 0.0750 0.0875 Third Quarter10.91 9.20 14.09 12.90 0.0750 0.0950 Fourth Quarter12.05 10.80 13.76 12.57 0.0875 0.0950 20 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 2009 to the end of fiscal year 2014, 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 3/31/093/31/103/31/113/31/123/31/133/31/14AVX - NYSE$100 $159 $169 $153 $141 $161 S & P 500$100 $150 $173 $188 $214 $264 Peer Group$100 $221 $388 $267 $264 $307 Purchases of Equity Securities by the Issuer The following table provides information regarding purchases by the Company, during the fourth quarter ended March 31, 2014, ofequity securities that are registered pursuant to Section 12 of the Exchange Act: PeriodTotal Number ofShares Purchased(1)Average Price PaidPer ShareTotal Number of SharesPurchased as Part ofPublicly Announced Plans orPrograms (1)Maximum Number of Sharesthat may yet be PurchasedUnder the Plans or Programs(1)1/1/14 - 1/31/1453,100 $12.99 53,100 4,775,389 2/1/14 - 2/28/1466,000 12.76 66,000 4,709,389 3/1/14 - 3/31/14 - - -4,709,389 Total119,100 $12.86 119,100 4,709,389 (1)On October 17, 2007, the Board of Directors of the Company authorized the repurchase of 5,000,000 shares of our commonstock from time to time in the open market. The repurchased shares are held as treasury stock and are available for generalcorporate purposes. Item 6.Selected Financial Data The following table sets forth selected consolidated financial data for AVX for the five fiscal years ended March 31, 2014. Theselected consolidated financial data for the five fiscal years ended March 31, 2014 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.22  Selected Financial Data(in thousands, except per share data) Fiscal Year Ended March 31, 20102011201220132014OPERATING RESULTS DATA:Net sales$1,304,966 $1,653,176 $1,545,254 $1,414,400 $1,442,604 Cost of sales1,027,368 1,195,790 1,153,295 1,150,630 1,163,770 Vendor settlement(5,000) - - - -Restructuring charges4,397 - - - -Gross profit278,201 457,386 391,959 263,770 278,834 Selling, general and administrative expenses108,527 123,887 116,408 117,365 119,670 Environmental charges -8,575 100,000 266,250 -Restructuring charges2,509 - - - -Other operating income(3,519) - - - -Profit (loss) from operations170,684 324,924 175,551 (119,845)159,164 Interest income7,120 6,569 6,798 7,021 4,899 Interest expense(111) -(707)(2,262)(2,432)Other, net(1,336)2,766 (1,737)1,764 1,726 Income (loss) before income taxes176,357 334,259 179,905 (113,322)163,357 Provision for (benefit from) income taxes33,499 90,256 27,100 (49,010)36,320 Net income (loss)$142,858 $244,003 $152,805 $(64,312)$127,037 Income (loss) per share:Basic$0.84 $1.44 $0.90 $(0.38)$0.75 Diluted$0.84 $1.43 $0.90 $(0.38)$0.75 Weighted average common shares outstanding:Basic170,247 170,025 169,886 169,124 168,473 Diluted170,274 170,390 170,134 169,124 168,658 Cash dividends declared per common share$0.16 $0.19 $0.28 $0.31 $0.37 As of March 31,20102011201220132014BALANCE SHEET DATA:Working capital$1,123,085 $1,366,450 $1,430,072 $1,614,656 $1,606,789 Total assets2,051,492 2,319,482 2,468,012 2,601,995 2,384,988 Stockholders' equity1,801,007 2,039,417 2,120,753 1,972,930 2,047,685 Fiscal Year Ended March 31, 20102011201220132014OTHER DATA:Capital expenditures$28,888 $27,470 $49,201 $43,705 $26,805 Research, development and engineering expenses24,667 23,683 26,328 30,467 26,240 23  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 and interconnect products. Electronic components and connector products manufactured or resold by AVX are used in virtually alltypes of electronic products, including those in telecommunications, automotive, transportation, energy harvesting, consumer electronics,military/aerospace, medical, computer, and industrial markets. We have five main product groups: Ceramic Components, TantalumComponents, Advanced Components, Interconnect Products, and Kyocera Electronic Devices. These product lines are organized into threereportable segments: Passive Components, Interconnect, and KED Resale. Consolidated revenues for the fiscal year ended March 31, 2014 were $1,442.6 million with net income of $127.0 million compared toconsolidated revenues of $1,414.4 million with a net loss of $64.3 million for the fiscal year ended March 31, 2013. During fiscal 2014we saw an increase in volumes across most of the markets we serve, primarily in automotive, aerospace, networking and componentsales related to higher end smart phones and tablet devices, compared to fiscal 2013. This trend reflected an improved global demand forcommercial and consumer electronic products and our customers’ efforts to bring inventory levels in line with demand. Our electronicdistributor customers generally increased their level of inventory throughout the fiscal year to meet increased demand. Overall salesprices for our commodity component products declined during 2013 as lower immediate delivery demand in the marketplace led to increasedsales price pressure compared to the prior year. Gross margins improved slightly when compared to the prior year, primarily attributableto an improved product mix of higher added value components coupled with a lower proportion of commodity and KED Resale productspartially offset by lower selling prices. We continued to proactively take actions to improve our production efficiencies and tightlycontrol our spending to help offset utility and material cost increases and unfavorable sales price pressure. In fiscal 2014, we used $70.6 million of cash to fund operating activities. We used cash generated from operations to pay $246million of environmental liabilities and other general working capital requirements. In addition, to enhance shareholder value, werepurchased shares of our common stock and paid increased dividends during fiscal year 2014. Our financial position remains strongwith $899 million of cash, cash equivalents, and securities investments and no borrowings as of March 31, 2014. 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 on value-added advanced products and interconnect solutions to serve this expanding market. We are also focused on controlling and reducingcosts 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 these strategies 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. 24 Outlook Near-Term: With continuing uncertain global geopolitical and economic conditions, it is difficult to quantify expectations for fiscal 2015. 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. Kyocera gave notice to AVX in February, 2014 of its intent, effective April 1, 2015 to market its connector products in Asia usingKyocera’s sales force rather than continuing to have AVX resell such products in Asia. Sales of Kyocera connector products in Asia wereapproximately $44 million with operating profit of approximately $3 million for the fiscal year ended March 31, 2014. For moreinformation regarding AVX’s relationship with Kyocera, see “Relationship with Kyocera and Related Transactions” below. Long-Term: Although there is uncertainty and caution in the near-term market as a result of the current global geopolitical and economicconditions, we continue to see opportunities for long-term growth and profitability improvement due to: (a) a projected increase in thelong-term worldwide demand for more sophisticated electronic devices, which require electronic components such as the ones we sell, (b)cost reductions and improvements in our production processes, and (c) opportunities for growth in our Advanced Component andInterconnect product lines due to advances in component design and our production capabilities. We have fostered our financial health andthe strength of our balance sheet. We remain confident that our strategies will enable our continued long-term success. Results of Operations Year Ended March 31, 2014 compared to Year Ended March 31, 2013 Net sales for the fiscal year ended March 31, 2014 were $1,442.6 million compared to $1,414.4 million for the fiscal year ended March31, 2013. The table below represents product group revenues for the fiscal years ended March 31, 2012, 2013, and 2014. Fiscal Year Ended March 31,Sales revenue (in thousands)201220132014Ceramic Components$179,984 $173,315 $193,978 Tantalum Components393,468 330,209 394,119 Advanced Components378,843 346,543 357,900 Total Passive Components952,295 850,067 945,997 KDP and KCD Resale410,419 377,707 293,048 KCP Resale Connectors54,765 61,809 64,680 Total KED Resale465,184 439,516 357,728 Interconnect127,775 124,817 138,879 Total Revenue$1,545,254 $1,414,400 $1,442,604 25 Passive Component sales were $946.0 million for the fiscal year ended March 31, 2014 compared to $850.1 million during the fiscalyear ended March 31, 2013. The sales increase in Passive Components reflects the demand increase for electronics across global marketsas customers increased inventory levels in response to increased spending by consumers and manufacturers when compared to last year,particularly in the automotive sector and component sales related to higher-end smart phones, tablet devices and telecommunicationshardware. The impact of the Asia Tantalum acquisition, which was completed in February 2013, accounted for $52.6 million of increasedsales of our tantalum products. The increase in sales of Ceramic Components reflects a higher volume of unit sales resulting partiallyfrom an increase in the sale of higher capacitance components compared to the prior fiscal year, partially offset by lower selling prices. KDP and KCD Resale sales were $293.0 million for the fiscal year ended March 31, 2014 compared to $377.7 million during the fiscalyear ended March 31, 2013. When compared to the prior year, the decrease during the fiscal year ended March 31, 2014 is primarilyattributable to lower sales to telecommunications and computer manufacturers as they changed design specifications and managed supplychain inventory levels in response to consumer demand trends and new product introduction cycles. Total connector sales, including AVX Interconnect products and KCP Resale Connectors, were $203.6 million in the fiscal year endedMarch 31, 2014 compared to $186.6 million during the fiscal year ended March 31, 2013. 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 42.1% of total net sales for the fiscal year ended March 31, 2014,compared to 38.8% for fiscal year ended March 31, 2013. Overall, distributor activity increased when compared to the same period in theprior year reflective of their end customer demand improvements. Our sales to distributor customers may involve specific ship and debitand stock rotation programs for which sales allowances are recorded as reductions in sales. Such allowance charges increased to $40.7million, or 6.7% of gross sales to distributor customers, for the fiscal year ended March 31, 2014 compared to $34.3 million, or 6.3% ofgross sales to distributor customers, for the fiscal year ended March 31, 2013, reflecting increased pricing pressure in the marketplace. Applications under such programs for fiscal years ended March 31, 2014 and 2013 were approximately $38.3 million and $33.9 million,respectively. Geographically, compared to the fiscal year ended March 31, 2013, sales increased in the Americas and Europe while Asia saw aslight decrease. The Asian market sales reflect the lower KED Resale product sales in the telecommunications markets. Sales in Asiadecreased to 45.7% of total sales while sales in the Americas increased to 28.0% and sales in Europe increased to 26.3% of total sales,respectively. This compares to 47.5%, 27.6%, and 24.9% of total sales for the Asian, American, and European regions in the prior year, wereunfavorably impacted by approximately $22.3 million when compared to the prior year. Gross profit margin in the fiscal year ended March 31, 2014 increased to 19.3% of sales, or $278.8 million, compared to a grossprofit margin of 18.6% of sales, or $263.8 million, in the fiscal year ended March 31, 2013. This overall increase is primarilyattributable to an improved product mix of higher margin components coupled with a lower proportion of commodity and KED Resaleproducts partially offset by lower selling prices. When compared to the prior fiscal year, costs were favorably impacted by approximately$40.0 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, 2014 were $119.7 million, or 8.3% of net sales,compared to $117.4 million, or 8.3% of net sales, for the fiscal year ended March 31, 2013. The overall increase in selling, general andadministrative expenses reflects the impact of higher sales volumes when compared to prior 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 $26.2 million and $30.5 millionin fiscal 2014 and 2013, respectively. Research and development costs included therein increased in fiscal 2014 to $10.5 million compared to$7.2 million in fiscal 2013. Engineering expenses decreased $7.6 million to $15.7 million in fiscal 2014 compared to $23.3 million in fiscal2013 as we decreased activity related to production moves when compared to the prior year. Profit (loss) from operations for the fiscal year ended March 31, 2014 increased $279.0 million to $159.2 million compared to$(119.8) million for the fiscal year ended March 31, 2013. This increase 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. SeeNote 12 to our consolidated financial statements elsewhere herein and “Environmental Matters” in Item 1 for further discussion relatedto this environmental charge. 26 Other income decreased $2.3 million to $4.2 million in fiscal 2014 compared to $6.5 million in fiscal 2013. This decrease is primarilyattributable to lower interest income resulting from lower effective interest rates and a decrease in the balance of our cash andinvestments.The effective tax rate for the fiscal year ended March 31, 2014 was 22.2% compared to an effective tax rate of 43.2% for the fiscalyear ended March 31, 2013. The lower effective rate for fiscal 2014 is primarily due to a favorable impact of approximately $6.6 millionrelating to the release of certain reserves for uncertain tax positions due to the expiration of tax periods allowed for the audit of certainprior year income tax returns and one-time adjustments of approximately $4.5 million related to prior period income tax accruals. Excluding such discrete items recorded during the fiscal year, the effective tax rate would have been 29.9%. For fiscal 2013, the highereffective rate is primarily due to the effects of the environmental charge recognized in fiscal 2013 related to the New Bedford HarborSuperfund Site in Massachusetts and the loss of a U.S. federal tax deduction for fiscal 2013 due to annual taxable incomelimitations. Excluding such discrete items recorded during the fiscal year, the effective tax rate would have been 30.6%.As a result of the factors discussed above, net income for the fiscal year ended March 31, 2014 was $127.0 million compared to a netloss of $(64.3) million for the fiscal year ended March 31, 2013. 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. Fiscal Year Ended March 31,Sales revenue (in thousands)201120122013Ceramic Components$211,998 $179,984 $173,315 Tantalum Components419,792 393,468 330,209 Advanced Components410,110 378,843 346,543 Total Passive Components1,041,900 952,295 850,067 KDP and KKC Resale440,050 410,419 377,707 KEC Resale Connectors66,088 54,765 61,809 Total KED Resale506,138 465,184 439,516 Interconnect105,138 127,775 124,817 Total Revenue$1,653,176 $1,545,254 $1,414,400 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 prior year. Funding for global “green energy” products also decreased compared to prior year, which primarily impacted theAdvanced Components product lines. The decrease in sales of Tantalum Components was the result of lower sales unit volume in addition to lower average selling prices reflective of increased market competition and reduced concerns about product availability. Compared to the same period in the prioryear, we saw lower sales in most of the markets we serve, with the exception of automotive, aerospace, networking, and componentsales 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 the same period in the prior year, the decrease during the fiscal year ended March 31, 2013 isprimarily attributable to a decrease in unit sales volume, particularly in the Asian and European regions due to lower demand for suchcircuit and crystal devices in 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. 27 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 the same period in theprior year. This was primarily a result of continued uncertainty in the global markets and cautious inventory management by ourdistributors. Our sales to distributor customers may involve specific ship and debit and stock rotation programs for which salesallowances are recorded as reductions in sales. Such allowance charges increased to $34.3 million, or 6.3% of gross sales to distributorcustomers, for the fiscal year ended March 31, 2013 compared to $29.6 million, or 4.8% of gross sales to distributor customers, for thefiscal year ended March 31, 2012, reflecting the increased pricing pressure resulting from lower demand in the marketplace. Applicationsunder such programs for fiscal years 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 in the prior year, respectively. As a result of the strength of the U.S. dollar against certainforeign currencies, sales for the year ended March 31, 2013 were unfavorably impacted by approximately $24.5 million when compared tothe prior year. 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 the prior year. These higher costs were partially offset by our emphasis on spending controls and costreductions in light of the weaker global demand for electronic component parts. When compared to the prior fiscal year, costs werefavorably impacted 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 the prior 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 to $23.3 million in fiscal 2013 compared to $18.6 million in fiscal2012. 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 and “Environmental Matters” in Item 1 forfurther discussion related to these environmental 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 a net loss of $(64.3)million compared to net income of $152.8 million for the fiscal year ended March 31, 2012. 28 Financial Condition Liquidity and Capital Resources Our liquidity needs arise primarily from working capital requirements, dividends, capital expenditures, and acquisitions. Historically,we have satisfied our liquidity requirements through funds from operations and investment income from cash and investments insecurities. As of March 31, 2014, we had a current ratio of 10.9 to 1, $899.3 million of cash, cash equivalents, and investments insecurities, $2,047.7 million of stockholders' equity and no borrowings. As of March 31, 2014, we had cash, cash equivalents, and short-term and long-term investments in securities of $899.3 million, ofwhich $632.4 million was held outside the U.S. Liquidity is subject to many factors, such as normal business operations as well asgeneral economic, financial, competitive, legislative, and regulatory factors that are beyond our control. Cash balances generated and heldin foreign locations are used for on-going working capital, capital expenditure needs, and to support acquisitions. These balances arecurrently 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 regulationsmay restrict our ability to move funds among various locations under certain circumstances. Management does not believe suchrestrictions would limit our ability to pursue our intended business strategies. Net cash used in operating activities was $70.6 million for the fiscal year ended March 31, 2014, compared to cash provided byoperations of $194.8 million for the fiscal year ended March 31, 2013 and $148.4 million for the fiscal year ended March 31, 2012. Duringthe fiscal year, we made two installment payments with respect to the settlement, approved by the United States District court onsettlement installment of $133.4 million, plus accruedinterest on the remaining settlement amount on March 26, 2014. Purchases of property and equipment totaled $26.8 million in fiscal 2014, $43.7 million in fiscal 2013, and $49.2 million in fiscal2012. 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 $30 million in fiscal 2015. The actual amount of capital expenditures will depend upon the outlook for endmarket demand. On February 6, 2013, we acquired Asia Tantalum for a net of $81.2 million in cash. Asia Tantalum designs, develops,manufactures and markets tantalum electronic components. Asia Tantalum’s products are used in a broad range of commercialapplications. The acquisition enhances our leadership position in the passive electronic component industry and provides furtheropportunities for expansion in the Asian region and tantalum 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 markets on our current business and believe that,based on our financial condition as of March 31, 2014, cash on hand and cash expected to be generated from operating activities andinvestment income from cash, cash equivalents, and investments in securities will be sufficient to satisfy our anticipated financing needsfor working capital, capital expenditures, environmental clean-up costs, pension plan funding, research, development, and engineeringexpenses, and dividend payments or stock repurchases to be made during the upcoming year. While changes in customer demand have animpact on our future cash requirements, changes in those requirements are mitigated by our ability to adjust manufacturing capabilities tomeet increases or decreases in customer demand. We do not anticipate any significant changes in our ability to generate cash flows ormeet our liquidity needs in the foreseeable future. In fiscal 2012, 2013, and 2014, dividends of $44.2 million, $50.8 million, and $60.3 million, respectively, were paid to stockholders. On October 17, 2007, the Board of Directors of the Company authorized the repurchase of 5,000,000 shares of our commonstock. As of March 31, 2014, there were 4,709,389 shares that may yet be repurchased under this program. We purchased 625,068 shares at a cost of $8.4 million during fiscal 2012, 983,608 shares at a cost of $10.6 million during fiscal2013, and 799,066 shares at a cost of $10.3 million during fiscal 2014. The repurchased shares are held as treasury stock and areavailable for general corporate purposes. 29 At March 31, 2014, we had contractual obligations for the acquisition or construction of plant and equipment aggregatingapproximately $9.2 million. We make contributions to our U.S. and international defined benefit plans as required under various pension funding regulations. Contributions are based on a percentage of pensionable wages or requirements necessary to satisfy funding obligations. We madecontributions of $9.1 million to our international defined benefit plans during the fiscal year ended March 31, 2014 and estimate that wewill make contributions of approximately $9.2 million during the fiscal year ending March 31, 2015. We have unfunded actuariallycomputed pension liabilities of approximately $18.8 million related to these defined benefit pension plans as of March 31, 2014. 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, 2014, were approximately $28.8 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. 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 or such state statutes authorize joint and several liability,the EPA or state regulatory authorities could seek to recover all clean-up costs from any one of the PRPs at a site despite theinvolvement of other PRPs. At certain sites, financially responsible PRPs other than AVX also are, or have been, involved in siteinvestigation and clean-up activities. We believe that liability resulting from these sites will be apportioned between AVX and otherPRPs. To resolve our liability at the sites at which we have been named a PRP, we have entered into various administrative orders andconsent 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 $66.0 million, plus interest, toward the environmental conditions at, and remediation of, New Bedford Harbor in the Commonwealth of Massachusetts (“the harbor”) in settlement with theUnited States and the Commonwealth of Massachusetts, subject to reopener provisions, including a reopener if certain remediation costs for the site exceed $130.5 million. On April 18, 2012, the EPA issued a Unilateral Administrative Order (“UAO”) directing us to perform certain remedial actions forthe harbor clean-up pursuant to the reopener provisions. 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. Under the terms of the settlement, AVX was obligated to pay $366,250, plus interestcomputed from August 1, 2012, in three installments over a two-year period for use by the EPA and the Commonwealth to complete theclean-up of the harbor. The settlement also required the EPA to withdraw the UAO, which was done. The United States District Courtapproved the settlement and entered the Supplemental CD on September 19, 2013. On October 18, 2013, we paid the initial settlementinstallment of $133.4 million, plus accrued interest on the entire settlement amount through that date. On March 26, 2014, we prepaid asecond settlement installment of $110.8 million, plus accrued interest on the remaining settlement amount through that date. 30 There is a class action pending with respect to property adjacent to our Myrtle Beach, South Carolina factory claiming propertyvalues have been negatively impacted by alleged migration of certain pollutants from our property. We intend to defend vigorously theclaims asserted in this lawsuit. At this stage of the litigation, there has not been a determination as to the nature of the liability or theamount, if any, of damages. Based on our estimate of potential outcomes, we have accrued $1.0 million with respect to this case as ofMarch 31, 2014. On March 1, 2010, AVX was named as a third party defendant in a case filed in Massachusetts Superior Court captioned DaRosa v. City ofNew Bedford. This case relates to a former disposal site in the City of New Bedford located at Parker Street. The City asserts that AVX,among others, contributed to that site. We intend to defend vigorously the claims that have been asserted in this lawsuit. In light of theforegoing, we are not able to estimate any amount of loss or range of loss. No accrual for costs has been recorded and the potentialthis time. AVX has received a demand for approximately $11.0 million, from the City of New Bedford arising from contamination at the City’s New 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 orrange of loss. No accrual for costs has been recorded and the potential impact of this demand on our financial position, results of operations, comprehensive income(loss), and cash flows cannot be determined at this time. During fiscal 2014, AVX was named as a defendant in a patent infringement case filed in the United States District Court for theDistrict of Delaware captioned Greatbatch, Inc. v. AVX Corporation. This case alleges that certain AVX products infringe on one or moreof six Greatbatch patents. We intend to defend vigorously the claims that have been asserted in this lawsuit. In light of the foregoing, we arenot able to estimate any amount of loss or range of loss. No accrual for costs has been recorded and the potential impact of this case on our financial position,results of operations, 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 such environmental matters at certain sites,regulatory agencies in those jurisdictions may require us to address such issues. Once it becomes probable that we will incur costs in connection with remediation of a site and such costs can be reasonably estimated, we establish reserves or adjust our reserves for our projected share of these costs. 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. Disclosures about Contractual Obligations and Commitments The Company has the following contractual obligations and commitments as of March 31, 2014 as noted below. FY 2016 -FY 2018 -Contractual Obligations (in thousands)TotalFY 2015FY 2017FY 2019 ThereafterOperating Leases$28,799 $6,119 $9,358 $7,971 $5,351 Plant and Equipment$9,214 $9,032 $180 $2 $ - As discussed in Note 8 to our consolidated financial statements elsewhere herein, the amount of unrecognized tax benefits recordedin our balance sheet at March 31, 2014 was $8.1 million. We are unable to reasonably estimate in which future periods these amountswill be ultimately settled. During the fiscal year ended March 31, 2014, we made contributions of $4.7 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, 2015 will be approximately the same as in fiscal 2014. 31 During the fiscal year ended March 31, 2014 we made contributions of $9.1 million to our international defined benefitplans. Contributions are based on a percentage of pensionable wages or requirements necessary to satisfy funding obligations. Weexpect to make contributions of approximately $9.2 million for our international defined benefit plans for the fiscal year ending March31, 2015. 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 31,2014, we had no material outstanding purchase commitments. Critical Accounting Policies and Estimates “Management’s Discussion and Analysis of Financial Condition and Results of Operations” is based upon our 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 or our suppliers for adherence to such specification before shipment to customers. We ship products to customers based upon firm orders. Shipping and handlingsales allowance programs described below are subject to the volatilities of the market place. This includes, but is not limited to, changes in economic conditions, pricing changes, product demand, inventory levels in the supply chain, the effects of technological change, and other variables that might result in changes to our estimates. Accordingly, there can be 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 historical trends, current pricing and volume information, other market specificinformation, and input from sales, marketing, and other key management personnel. The amount accrued reflects the return of value ofthe customer’s inventory. These procedures require the exercise of significant judgments. We believe that these procedures enable us tomake reliable estimates of future returns. Our actual results have historically approximated our estimates. When the product isreturned 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. program. 32 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. Inventories We determine the cost of raw materials, work in process, and finished goods inventories by the first-in, first-out (“FIFO”)method. Manufactured inventory costs include material, labor, and manufacturing overhead. Inventories are valued at the lower of costor market (net realizable value). We value inventory at its market value where there is evidence that the utility of goods will be lessthan 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 inventoriesbased on historical usage, customer forecasts received from marketing and sales personnel, customer backlog, certain date coderestrictions, technology changes, demand increases and decreases, market directional shifts, and obsolescence and aging. 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 based on all available evidence, both positive and negative. To the extent we believe thatrecovery is not more likely than 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 our estimates offuture taxable income over the periods that our deferred tax assets will be recoverable. We continue to evaluate countries where we havea valuation allowance on our deferred tax assets due to historical operating losses and when such positive evidence outweighs negativeevidence we will release such valuation allowance as appropriate. 33 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 specific yieldcurves 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. 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. 34 Recent Accounting Pronouncements In July 2012, the FASB issued ASU 2012-02, which is intended to reduce complexity and costs by allowing an entity the option to makea qualitative evaluation about the likelihood of impairment of indefinite-lived intangibles assets to determine whether it should performa detailed 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 adopted the ASU effectiveApril 1, 2013. The adoption did not 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 is required to present, either parenthetically on the face of the financialstatements or in the notes thereto, significant amounts reclassified from each component of accumulated other comprehensive income andthe income statement line items affected by such reclassifications. The standard is effective for annual periods, and interim periodswithin those periods, beginning after December 15, 2012. We adopted the ASU effective April 1, 2013. The adoption did not have amaterial impact on our financial statements, as the ASU increases disclosure requirements but does not affect the recognition ormeasurement of amounts in the financial statements. In July 2013, the FASB issued ASU No. 2013-11, “Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When aNet Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists.” This topic provides guidance on whetheran unrecognized tax benefit should be presented as a reduction to a deferred tax asset or as a separate liability. This topic is for annualand interim periods beginning after December 15, 2013, with early adoption allowed. Adoption of this guidance is not expected to have asignificant impact on the determination or reporting of the Company’s financial results. In April 2014, the FASB issued changes to the criteria for determining which disposals are required to be presented as discontinuedoperations. The changes require a disposal of a component of an entity or a group of components of an entity to be reported indiscontinued operations if the disposal represents a strategic shift that has, or will have, a major effect on an entity’s operations andfinancial results when any of the following occurs: (i) the component of an entity or group of components of an entity meets the criteriato be classified as held for sale, (ii) the component of an entity or group or components of an entity is disposed of by sale, or (iii) thecomponent of an entity or group of components of an entity is disposed of other than by sale. The amendments apply on a prospectivebasis to disposals of components of an entity that occur within annual periods beginning on or after December 15, 2014 and interimperiods within those years, with early adoption permitted. The implementation of the amended accounting guidance on January 1, 2015 isnot expected to have a material impact on our consolidated financial statements. Relationship with Kyocera and Related Transactions Kyocera is the majority stockholder of AVX. As of May 12, 2014, 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. Kyocera gave notice to AVX in February, 2014 of its intent, effective April 1, 2015 to market its connector products in Asia usingKyocera’s sales force rather than continuing to have AVX resell such products in Asia. Sales of Kyocera connector products in Asia wereapproximately $44 million with operating profit of approximately $3 million for the fiscal year ended March 31, 2014. 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. 35 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 tothose procedures, the Special Advisory Committee must determine that, in its judgment, the terms thereof are equivalent to those to whichan 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. 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 2014, 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 $7.7million in fiscal 2014. 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. 36 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, 2013 and 2014 43Consolidated Statements of Operations, Years Ended March 31, 2012, 2013, and 2014 44Consolidated Statements of Comprehensive Income (Loss), Years Ended March 31, 2012, 2013, and 2014 45Consolidated Statements of Stockholders’ Equity, Years Ended March 31, 2012, 2013, and 2014 46Consolidated Statements of Cash Flows, Years Ended March 31, 2012, 2013, and 2014 47Notes to Consolidated Financial Statements 48Report of Independent Registered Public Accounting Firm 78 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 Exchange Act), thatare designed to ensure that information required to be disclosed in the Company’s reports under the Exchange Act is recorded, processed,summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated andcommunicated to management, including the Company’s Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), asappropriate, to allow timely decisions regarding required disclosure. In connection with the preparation of this Annual Report on Form 10-K, as of March 31, 2014, 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, 2014 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. 37 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’sBthe 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 31,2014. 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 (1992). Based on the results of this assessment, management,including the CEO and CFO, has concluded that the Company’s internal control over financial reporting was effective as of the end ofits fiscal year ended March 31, 2014. 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, 2014, as stated in their report, which appears in this Form 10-K. Changes in Internal Control over Financial Reporting There were no changes in our internal control over financial reporting that occurred during our most recently completed fiscal 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 andis 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 2014 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”. 38 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 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.39 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).*10.2 Amended 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).*10.5Agreement between AVX Corporation and John S. Gilbertson dated December 19, 2008 (incorporated by reference to Exhibit10.10 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 10.1 to theQuarterly Report on Form 10-Q of the Company for the quarter ended June 30, 2008).*10.7AVX Corporation 2004 Non-Employee Directors’ Stock Option Plan as amended through July 28, 2008 (incorporated byreference to Exhibit 10.2 to the Quarterly Report on Form 10-Q of the Company for the quarter ended June 30, 2008).*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 (incorporated by reference to Exhibit10.8 to the Annual Report on Form 10-K of the Company for the year ended March 31, 2013).*10.9AVX Corporation 2009 Management Incentive Plan (incorporated by reference to Exhibit 10.1 to the Quarterly Report onForm 10-Q of the Company for the quarter ended June 30, 2009).10.10 Machinery and Equipment Purchase Agreement by and between Kyocera Corporation and AVX Corporation (incorporated 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).40 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 Agreement (incorporated by reference to Exhibit 10.16 to the Annual Reporton Form 10-K of 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 of the Company filed with the Securities and ExchangeCommission on October 11, 2012).*10.17AVX Corporation 2014 Stock Option Plan (incorporated by reference to Exhibit 10.17 of the Annual Report on Form 10K/Aof the Company for the year ended March 31, 2013).*10.18AVX Corporation 2014 Non-Employee Directors’ Stock Option Plan (incorporated by reference to Exhibit 10.18 of theAnnual Report on Form 10K/A of the Company for the year ended March 31, 2013)..*10.19Form of Notice of Grant of Stock Options and Option Agreement for awards pursuant to AVX Corporation 2014 StockOption Plan and AVX 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 SIGNATURES 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 21, 2014 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 21, 2014* John S. Gilbertson Chairman of the Board and Chief Executive OfficerMay 21, 2014* Tetsuo Kuba DirectorMay 21, 2014* Goro Yamaguchi DirectorMay 21, 2014* Tatsumi Maeda DirectorMay 21, 2014* Shoichi Aoki DirectorMay 21, 2014* Donald B. Christiansen DirectorMay 21, 2014* David DeCenzo DirectorMay 21, 2014* Joseph Stach DirectorMay 21, 2014 * by: /s/ Kurt P. Cummings KURT P. CUMMINGS, Attorney‑in‑Fact for each of the persons indicated 42 AVX Corporation and SubsidiariesConsolidated Balance Sheets(in thousands, except per share data) As of March 31, 20132014AssetsCurrent assets:Cash and cash equivalents$486,724 $460,674 Short-term investments in securities560,364 413,615 Accounts receivable - trade, net200,147 206,417 Accounts receivable - affiliates1,884 2,028 Inventories559,074 550,518 Income taxes receivable15,060 71,346 Deferred income taxes81,316 31,896 Prepaid and other40,964 32,229 Total current assets1,945,533 1,768,723 Long-term investments in securities15,576 25,000 Property and equipment:Land41,635 43,325 Buildings and improvements348,028 348,168 Machinery and equipment1,219,657 1,233,914 Construction in progress18,344 11,389 1,627,664 1,636,796 Accumulated depreciation(1,369,400)(1,401,071) 258,264 235,725 Goodwill199,372 213,051 Intangible assets, net73,832 67,735 Deferred income taxes - non-current100,915 65,524 Other assets8,503 9,230 Total Assets$2,601,995 $2,384,988 Liabilities and Stockholders' EquityCurrent liabilities:Accounts payable - trade$49,104 $49,576 Accounts payable - affiliates66,083 45,058 Income taxes payable1,434 2,956 Deferred income taxes1,067 952 Accrued payroll and benefits40,661 38,867 Accrued expenses172,528 24,525 Total current liabilities330,877 161,934 Pensions35,945 18,267 Deferred income taxes - non-current3,510 5,453 Other liabilities258,733 151,649 Total non-current liabilities298,188 175,369 Total Liabilities629,065 337,303 Commitments and contingencies (Note 12)Stockholders' Equity:Preferred stock, par value $.01 per share: - -Authorized, 20,000 shares; None issued and outstandingCommon stock, par value $.01 per share:1,764 1,764 Authorized, 300,000 shares; issued, 176,368 shares; outstanding, 168,633 and 168,221 shares for 2013 and 2014, respectivelyAdditional paid-in capital350,791 351,708 Retained earnings1,723,070 1,789,856 Accumulated other comprehensive income (loss)(4,331)8,126 Treasury stock, at cost,(98,364)(103,769)7,735 and 8,148 shares for 2013 and 2014, respectivelyTotal Stockholders' Equity1,972,930 2,047,685 Total Liabilities and Stockholders' Equity$2,601,995 $2,384,988 See accompanying notes to consolidated financial statements.43  AVX Corporation and SubsidiariesConsolidated Statements of Operations(in thousands, except per share data) Fiscal Year Ended March 31, 201220132014Net sales$1,545,254 $1,414,400 $1,442,604 Cost of sales1,153,295 1,150,630 1,163,770 Gross profit391,959 263,770 278,834 Selling, general and administrative expenses116,408 117,365 119,670 Environmental charges100,000 266,250 -Profit (loss) from operations175,551 (119,845)159,164 Other income (expense):Interest income6,798 7,021 4,899 Interest expense(707)(2,262)(2,432)Other, net(1,737)1,764 1,726 Income (loss) before income taxes179,905 (113,322)163,357 Provision for (benefit from) income taxes27,100 (49,010)36,320 Net income (loss)$152,805 $(64,312)$127,037 Income (loss) per share:Basic$0.90 $(0.38)$0.75 Diluted$0.90 $(0.38)$0.75 Dividends declared$0.2800 $0.3125 $0.3650 Weighted average common shares outstanding:Basic169,886 169,124 168,473 Diluted170,134 169,124 168,658 See accompanying notes to consolidated financial statements.44 AVX Corporation and SubsidiariesConsolidated Statements of Comprehensive Income (Loss)(in thousands) Fiscal Year Ended March 31, 201220132014Net income (loss)$152,805 $(64,312)$127,037 Other comprehensive income (loss), net of income taxes:Foreign currency translation adjustment(13,382)(10,249)4,670 Foreign currency cash flow hedges adjustment(726)356 933 Pension liabilities adjustment(7,617)(13,801)6,854 Unrealized loss on available-for-sale securities(86) - -Other comprehensive income (loss), net of income taxes(21,811)(23,694)12,457 Comprehensive income (loss)$130,994 $(88,006)$139,494 See accompanying notes to consolidated financial statements.45 AVX Corporation and SubsidiariesConsolidated Statements of Stockholders’ Equity(in thousands, except per share data) Accumulated Common StockAdditionalOther NumberTreasuryPaid-InRetainedComprehensive OfSharesAmountStockCapitalEarningsIncome (Loss)TotalBALANCE AT MARCH 31, 2011170,142 $1,764 $(80,692)$347,664 $1,729,507 $41,174 $2,039,417 Net income - - - -152,805 -152,805 Other comprehensiveloss, net of income taxes - - - - -(21,811)(21,811)Dividends of $0.28 per share(44,172)(44,172)Stock-basedcompensation expense - - -1,816 - -1,816 Stock option activity84 -1,098 (101) - -997 Tax benefit of stockoption exercises - - -95 - -95 Treasury stock purchased(625) -(8,394) - - -(8,394)BALANCE AT MARCH 31, 2012169,601 $1,764 $(87,988)$349,474 $1,838,140 $19,363 $2,120,753 Net loss - - - -(64,312) -(64,312)Other comprehensiveloss, net of income taxes - - - - -(23,694)(23,694)Dividends of $0.30 per share - - - -(50,758) -(50,758)Stock-basedcompensation expense - - -1,358 - -1,358 Stock option activity16 -204 (49) - -155 Tax benefit of stockoption exercises - - -8 - -8 Treasury stock purchased(984) -(10,580) - - -(10,580)BALANCE AT MARCH 31, 2013168,633 $1,764 $(98,364)$350,791 $1,723,070 $(4,331)$1,972,930 Net income - - - -127,037 -127,037 Other comprehensiveincome, net of income taxes - - - - -12,457 12,457 Dividends of $0.37 per share - - - -(60,251) -(60,251)Stock-basedcompensation expense - - -1,363 - -1,363 Stock option activity387 -4,915 (672) - -4,243 Tax benefit of stockoption exercises - - -226 - -226 Treasury stock purchased(799) -(10,320) - - -(10,320)BALANCE AT MARCH 31, 2014168,221 $1,764 $(103,769)$351,708 $1,789,856 $8,126 $2,047,685 See accompanying notes to consolidated financial statements.46 AVX Corporation and SubsidiariesConsolidated Statements of Cash Flows (in thousands) Fiscal Year Ended March 31, 201220132014OPERATING ACTIVITIES:Net income (loss)$152,805 $(64,312)$127,037 Adjustment to reconcile net income (loss) to net cash from operating activities:Depreciation and amortization46,890 46,871 50,209 Stock-based compensation expense1,816 1,358 1,363 Deferred income taxes(56,456)(76,408)70,726 Loss on available-for-sale securities572 - -Loss on disposal of property, plant & equipment, net of retirements648 219 174 Changes in operating assets and liabilities:Accounts receivable25,730 14,625 (7,639)Inventories(74,007)17,586 9,778 Accounts payable and accrued expenses55,232 45,224 (169,535)Income taxes2,759 (12,433)1,165 Other assets(7,757)887 (42,535)Other liabilities190 221,178 (111,380)Net cash provided by (used in) operating activities148,422 194,795 (70,637)INVESTING ACTIVITIES:Purchases of property and equipment(49,201)(43,705)(26,805)Purchase of business, net of cash acquired -(79,608)(1,600)Sales of available-for-sale securities5,686 - -Purchases of investment securities(1,162,317)(675,394)(663,816)Redemptions of investment securities1,125,616 755,610 801,542 Proceeds from property, plant & equipment dispositions -1,851 795 Other investing activities(127)(170) -Net cash provided by (used in) investing activities(80,343)(41,416)110,116 FINANCING ACTIVITIES:Dividends paid(44,172)(50,758)(60,251)Purchase of treasury stock(8,394)(10,580)(10,320)Proceeds from exercise of stock options997 155 4,243 Excess tax benefit from stock-based payment arrangements95 8 226 Net cash used in financing activities(51,474)(61,175)(66,102)Effect of exchange rate changes on cash(671)(764)573 Increase (decrease) in cash and cash equivalents15,934 91,440 (26,050)Cash and cash equivalents at beginning of period379,350 395,284 486,724 Cash and cash equivalents at end of period$395,284 $486,724 $460,674 See accompanying notes to consolidated financial statements.47 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 and interconnect products. Our consolidated financial statements of AVX Corporation (“AVX” or “the Company”) include all accounts of the Company and its subsidiaries. All significantintercompany 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, 2014,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. Out of Period Adjustments During fiscal 2014, we determined there was an error in the calculation of deferred taxes on intangible assets pursuant to theacquisition of American Technical Ceramics (“ATC”) Corporation in September of 2007. Accordingly, in fiscal 2014, we recorded an out–of-period adjustment related to the calculation of deferred taxes relative to the fair values of intangible assets at that date resulting inan increase of $12,240 to deferred income tax liabilities and a corresponding increase to goodwill. The change in goodwill would not haveresulted in an impairment in a prior period. Management performed an evaluation under Staff Accounting Bulletin No. 108 and concludedthe effect of the adjustment was immaterial to the current year and prior years’ financial statements as there was no impact on priorincome statements, cash flows, or retained earnings and the adjustment was immaterial to our consolidated balance sheets. During fiscal 2014, we determined there was an error in the calculation of deferred taxes primarily related to property, plant andequipment. As a result, in fiscal 2014, we recorded an increase in deferred tax assets of $4,428 with a corresponding decrease in incometax expense. Management performed an evaluation under Staff Accounting Bulletin No. 108 and concluded the effect of the adjustmentwas immaterial to the current year and prior years’ financial statements. Certain reclassifications have been made in the prior periods consolidated financial statements to conform to the current periodpresentation. 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. 48 Inventories: We determine the cost of raw materials, work in process, and finished goods inventories by the first-in, first-out (“FIFO”) method. Manufactured inventory costs include material, labor, and manufacturing overhead. Inventories are valued at the lower of cost or market (realizable value) and are valued atmarket value where there is evidence that the utility of goods will be less than cost and that such write-down should occur in the current period. Accordingly, at the end of each period, we evaluate our inventory and adjust to net realizable value. We review and adjust the carrying value of our inventories based on historicalusage, 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. 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 as follows:buildings and improvements – 10 to 31.5 years, machinery and equipment – 3 to 10 years. Depreciation expense was $42,499, $42,480and $43,731 for the fiscal years ended March 31, 2012, 2013 and 2014, 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. 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 annually or wheneverconditions indicate that such impairment could exist. The carrying value of goodwill and indefinite-lived intangible assets are evaluated inrelation to the operating performance and estimated future discounted cash flows of the related reporting unit. If the sum of thediscounted 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, 2012, 2013, or2014. During the year ended March 31, 2013, goodwill increased due to the Asia Tantalum acquisition described in Note 9 to theconsolidated financial statements and the effects of foreign currency translation. During the year ended March 31, 2014, goodwillincreased due to the final purchase accounting adjustments of the Asia Tantalum acquisition, as well as an increase of $12,240 for anout-of-period adjustment (described above) and the effects of foreign currency translation. We have determined that our intangible assets have finite useful lives. Intangible assets are amortized on a straight-line basisover their estimated useful lives. Amortization expense was $4,391, $4,391, and $6,478 for the fiscal years ended March 31, 2012,2013, and 2014, respectively. March 31, 2013March 31, 2014 Gross CarryingAmountAccumulatedAmortizationGross CarryingAmountAccumulatedAmortizationAmortized intangible assets:Customer relationships$51,000 $(15,583)$51,000 $(18,417)Developed technology and other12,848 (8,433)13,231 (10,379)Trade name and trademarks34,000 -34,000 (1,700)Total$97,848 $(24,016)$98,231 $(30,496) 49  The estimated future annual amortization expense for intangible assets is as follows:Fiscal Year endedMarch 31,EstimatedAmortizationExpense2015$5,144 20165,032 20175,032 20184,963 20194,886 Thereafter42,679 Pension Assumptions: Pension benefit obligations and the related effects on our results of operations are calculated using actuarial models. Two critical assumptions, discount rate and expected rate of return on plan assets, are important elements of plan expense and/or liability measurement. We evaluate these assumptions at leastannually. The discount rate enables us to state expected future cash flows at a present value on the measurement date. To determine the discount rate, we apply the expected cash flows from each individual pension plan to specific yield curves at the plan’s measurement date and determine a level equivalent yield unique toeach plan. A lower discount rate increases the present value of benefit obligations and increases pension expense. To determine the expected long-term rate of return on pension plan assets, we consider the current and expected asset allocations, as well as historical and expected returns on various categories of plan assets. Otherassumptions involve demographic factors such as retirement, mortality, and turnover. These assumptions are evaluated at least annually and are updated to reflect our experience. Actual results in any given year will often differ from actuarial assumptions because of economic and other factors. In such cases, thedifferences between actual results and actuarial assumptions are amortized over future periods. Income Taxes: As part of the process of preparing the consolidated financial statements, we are required to estimate tax assets and liabilities 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 based 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. 50 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 foreign currencies. The purpose of our foreign currency management is to minimize the effect of exchange rate changes on actual cash flows from foreign currencydenominated transactions. See Note 13 for further discussion of derivative financial instruments. Revenue Recognition and Accounts Receivable: All products are built to specification and tested by AVX or our suppliers for adherence to such specification before shipment to customers. We ship products to customers based upon firm orders. Shipping and handling costs are included in cost of sales. We recognize revenue when the sales process is complete. This occurs when products are shipped to thecustomer in accordance with the terms of an agreement of sale, there is a fixed or determinable selling price, title and risk of loss have been transferred, and collectability is reasonably assured. Estimates used in determining sales allowance programs described below are subject to the volatilities of the marketplace. This includes, but is not limited to, changes ineconomic conditions, pricing changes, product demand, inventory levels in the supply chain, the effects of technological change, and other variables that might result in changes to our estimates. Accordingly, there can be no assurance that actual results will not differ from those estimates. Accounts Receivable We maintain an allowance for doubtful accounts for estimated losses resulting from the inability of our customers to make 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. 51 Distribution Programs A portion of our sales are to independent electronic component distributor customers, which are subject to various distributor sales programs. We report provisions for distributor allowances in connection with such sales programs as a reduction in revenue and report distributor allowances in the balance sheet as areduction in accounts receivable. For the distribution programs described below, we do not track the individual units that are recorded against specific products sold from distributor inventories, which would allow us to directly compare revenue reduction for credits recorded during any period with credits ultimately awardedin respect of products sold during that period. Nevertheless, we believe that we have an adequate basis to assess the reasonableness and reliability of our estimates for each program. Distributor Stock Rotation Program Stock rotation is a program whereby distributor customers are allowed to return for credit qualified inventory, semi-annually, equal 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. 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 cover current and future distributor activity for a specific part for sale totheir customer. At the time we record sales to the distributors, we provide an allowance for the estimated future distributor activity related to such sales since it is probable that such sales to distributors will result in ship and debit activity. We record an estimated sales allowance based on sales during the period, credits issuedto distributors, distributor inventory levels, historical trends, market conditions, pricing trends we see in our direct sales activity with original equipment manufacturers and other customers, and input from sales, marketing, and other key management personnel. These procedures require the exercise of significantjudgments. We believe that these procedures enable us to make reliable estimates of future credits under the ship and debit 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. 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 $7,716, $7,150, and $10,514 for the fiscal years ended March 31, 2012, 2013, and2014, respectively. Engineering expenses are included in cost of sales and selling, general, and administrative expenses as follows: Fiscal Year Ended March 31, 201220132014Engineering expense:Cost of sales$18,156 $22,876 $15,726 Selling, general, and administrative expense456 441 -Total engineering expense$18,612 $23,317 $15,726 52 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 have 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, 625 shares were purchased during the fiscal year ended March31, 2012, 984 shares were purchased during the fiscal year ended March 31, 2013, and 799 shares were purchased during the fiscal yearended March 31, 2014. We purchased 119 shares of common stock during the fourth quarter of the fiscal year ended March 31, 2014. Asof March 31, 2014, we had in treasury 8,148 common shares at a cost of $103,769. There are 4,709 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 andthe amount of loss can be reasonably estimated. When a range of loss can be estimated, we accrue the most likely amount. In the eventthat 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 July 2012, the FASB issued ASU 2012-02, which is intended to reduce complexity and costs by allowing an entity the option to makea qualitative evaluation about the likelihood of impairment of indefinite-lived intangibles assets to determine whether it should performa detailed 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 adopted the ASU effectiveApril 1, 2013. The adoption did not 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 is required to present, either parenthetically on the face of the financialstatements or in the notes thereto, significant amounts reclassified from each component of accumulated other comprehensive income andthe income statement line items affected by such reclassifications. The standard is effective for annual periods, and interim periodswithin those periods, beginning after December 15, 2012. We adopted the ASU effective April 1, 2013. The adoption did not have amaterial impact on our financial statements, as the ASU increases disclosure requirements but does not affect the recognition ormeasurement of amounts in the financial statements. In July 2013, the FASB issued ASU No. 2013-11, “Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When aNet Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists.” This topic provides guidance on whetheran unrecognized tax benefit should be presented as a reduction to a deferred tax asset or as a separate liability. This topic is for annualand interim periods beginning after December 15, 2013, with early adoption allowed. Adoption of this guidance is not expected to have asignificant impact on the determination or reporting of the Company’s financial results. 53 In April 2014, the FASB issued changes to the criteria for determining which disposals are required to be presented as discontinuedoperations. The changes require a disposal of a component of an entity or a group of components of an entity to be reported indiscontinued operations if the disposal represents a strategic shift that has, or will have, a major effect on an entity’s operations andfinancial results when any of the following occurs: (i) the component of an entity or group of components of an entity meets the criteriato be classified as held for sale, (ii) the component of an entity or group or components of an entity is disposed of by sale, or (iii) thecomponent of an entity or group of components of an entity is disposed of other than by sale. The amendments apply on a prospectivebasis to disposals of components of an entity that occur within annual periods beginning on or after December 15, 2014 and interimperiods within those years, with early adoption permitted. The implementation of the amended accounting guidance on January 1, 2015 isnot expected to have a material impact on our consolidated 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, 2012, 2013, and 2014: Fiscal Year Ended March 31, 201220132014Net income (loss)$152,805 $(64,312)$127,037 Computation of Basic EPS:Weighted Average Shares Outstanding used in Computing Basic EPS169,886 169,124 168,473 Basic earnings (loss) per share$0.90 $(0.38)$0.75 Computation of Diluted EPS:Weighted Average Shares Outstanding used in Computing Basic EPS169,886 169,124 168,473 Effect of stock options248 -185 Weighted Average Shares used in Computing Diluted EPS 170,134 169,124 168,658 Diluted income (loss) per share$0.90 $(0.38)$0.75 (1) Common stock equivalents not included in the computation of diluted earnings per share because the impact would have been anti-dilutive were2,761 shares, 3,847 shares, and 2,942 shares for the fiscal years ended March 31, 2012, 2013, and 2014, respectively. In addition, 50 shares ofcommon stock equivalents that would have been dilutive if we had income were excluded from the computation of diluted earnings per share due tothe Company’s net loss position for the fiscal year ended March 31, 2013.54 (1) 3. Comprehensive Income: Comprehensive income (loss) includes the following components: Fiscal Year Ended March 31, 201220132014 Pre-taxNet of TaxPre-taxNet of TaxPre-taxNet of TaxForeign currency translation adjustment$(13,382)$(13,382)$(10,249)$(10,249)$4,670 $4,670 Foreign currency cash flow hedges adjustment(1,008)(726)413 356 1,149 933 Pension liability adjustment(10,579)(7,617)(18,600)(13,801)9,791 6,854 Unrealized (loss) on available-for-sale securities(119)(86) - - - -Other comprehensive income (loss)$(25,088)$(21,811)$(28,436)$(23,694)$15,610 $12,457 The accumulated balance of comprehensive income (loss) is as follows: As of March 31, 20132014Foreign currency translation adjustment$46,078 $50,748 Foreign currency cash flow hedges adjustment(749)184 Pension liability adjustment(49,660)(42,806)Accumulated other comprehensive income (loss)$(4,331)$8,126 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.55  During the fiscal years ended March 31, 2012, 2013, and 2014, there have been no transfers of assets between the levels within the fairvalue hierarchy. Based on QuotedpricesOther in activeobservableUnobservable Fair Value atmarketsinputsinputs 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$7,043 $7,043 $ -$ -Foreign currency derivatives1,168 -1,168 -Total$8,211 $7,043 $1,168 $ - Based on QuotedpricesOther in activeobservableUnobservable Fair Value atmarketsinputsinputs 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-qualified deferredcompensation program$7,043 $7,043 $ -$ -Foreign currency derivatives2,446 -2,446 -Total$9,489 $7,043 $2,446 $ - Based on QuotedpricesOther in activeobservableUnobservable Fair Value atmarketsinputsinputs March 31, 2014(Level 1)(Level 2)(Level 3)Assets measured at fair value on a recurring basis:Assets held in the non-qualified deferred compensationprogram$7,915 $7,915 $ -$ -Foreign currency derivatives564 -564 -Total$8,479 $7,915 $564 $ - 56 (1)(2)(1)(2)(1)(2) Based on QuotedpricesOther in activeobservableUnobservable Fair Value atmarketsinputsinputs March 31, 2014(Level 1)(Level 2)(Level 3)Liabilities measured at fair value on a recurring basis:Obligation related to assets held in the non-qualified deferredcompensation program$7,915 $7,915 $ -$ -Foreign currency derivatives433 -433 -Total$8,348 $7,915 $433 $ - (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 prepaid and other and accrued expenses in the March 31, 2013 and2014 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 derivatives classified 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. 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, 2013 and 2014, all ofour forward contracts have been designated as Level 2 measurements.57 (1)(2) 5. Accounts Receivable: Fiscal Year Ended March 31, 20132014Trade$221,109 $230,321 Less:Allowances for doubtful accounts705 410 Ship from stock and debit and stock rotation14,771 17,138 Sales returns and discounts5,486 6,356 Total allowances20,962 23,904 $200,147 $206,417 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. Fiscal Year Ended March 31, 201220132014Allowances for doubtful accounts:Beginning Balance$686 $720 $705 Charges(52)127 43 Applications86 (142)(338)Ending Balance$720 $705 $410 Fiscal Year Ended March 31, 201220132014Ship from stock and debit and stock rotation:Beginning Balance$13,340 $14,327 $14,771 Charges29,592 34,305 40,676 Applications(28,812)(33,861)(38,309)Translation and other207 - -Ending Balance$14,327 $14,771 $17,138 Fiscal Year Ended March 31, 201220132014Sales returns and discounts:Beginning Balance$7,954 $7,179 $5,486 Charges21,512 18,477 22,608 Applications(22,080)(20,129)(21,782)Translation and other(207)(41)44 Ending Balance$7,179 $5,486 $6,356 58  6. Inventories: Fiscal Year Ended March 31, 20132014Finished goods$119,793 $109,053 Work in process107,641 109,315 Raw materials and supplies331,640 332,150 $559,074 $550,518 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, 2014, we believe that our credit risk exposure is not significant. At March 31, 2013 and 2014 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. Investments in held-to-maturity securities, recorded at amortized cost, were as follows: As of March 31, 2013 CostGross UnrealizedGainsGross UnrealizedLossesEstimated FairValueShort-term investments:Commercial paper$85,788 $ -$(69)$85,719 Corporate bonds81,089 213 (4)81,298 Time deposits393,487 335 -393,822 Long-term investments:Corporate bonds15,576 100 -15,676 $575,940 $648 $(73)$576,515 59  As of March 31, 2014 CostGrossUnrealizedGainsGross UnrealizedLossesEstimated FairValueShort-term investments:Commercial Paper$ -$ -$ -$ -Corporate bonds40,838 75 -40,913 Time deposits372,777 245 -373,022 Long-term investments:Corporate bonds25,000 13 -25,013 $438,615 $333 $ -$438,948 The amortized cost and estimated fair value of held-to-maturity investments at March 31, 2014, 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 CostEstimated Fair ValueDue in one year or less$413,615 $413,935 Due after one year through five years25,000 25,013 Total$438,615 $438,948 8. Income Taxes: For financial reporting purposes, income (loss) before income taxes includes the following components: Fiscal Year Ended March 31, 201220132014Domestic$1,463 $(192,584)$83,837 Foreign178,442 79,262 79,520 $179,905 $(113,322)$163,357 60 The provision for (benefit from) income taxes consisted of: Fiscal Year Ended March 31, 201220132014Current:Federal/State$33,166 $19,116 $(53,100)Foreign43,471 9,712 18,325 76,637 28,828 (34,775)Deferred:Federal/State(52,093)(81,632)72,028 Foreign2,556 3,794 (933) (49,537)(77,838)71,095 $27,100 $(49,010)$36,320 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: As of March 31, 20132014Current:AssetsLiabilitiesAssetsLiabilitiesSales and receivable allowances$8,070 $ -$8,387 $50 Inventory reserves11,348 955 14,530 1,320 Accrued expenses and other65,058 217 13,286 112 Sub total84,476 1,172 36,203 1,482 Less: valuation allowances(3,055) -(3,780) -Total Current$81,421 $1,172 $32,423 $1,482 As of March 31, 20132014Non-current:AssetsLiabilitiesAssetsLiabilitiesDepreciation and amortization$13,576 $16,167 $11,768 $19,072 Pension obligations17,970 6,686 14,944 7,824 Accrued expenses86,500 -50,303 -Other, net2,799 261 3,017 36 Net operating loss and tax credit carry forwards88,160 -101,995 -Sub total209,005 23,114 182,027 26,932 Less: valuation allowances(88,486) -(95,021) -Total Non-current$120,519 $23,114 $87,006 $26,932 Aggregate deferred income tax amounts are summarized below: As of March 31, 20132014Assets, net of valuation allowances$201,940 $119,429 Liabilities(24,286)(28,414)Net deferred income tax assets$177,654 $91,015 61  Amounts included in our consolidated balance sheets: As of March 31, 20132014Current assets$81,316 $31,896 Current liabilities(1,067)(952)Noncurrent assets100,915 65,524 Noncurrent liabilities(3,510)(5,453)Net deferred income tax assets$177,654 $91,015 Reconciliation between the U.S. Federal statutory income tax rate and our effective rate for income tax is as follows: Fiscal Year Ended March 31, 201220132014U.S. Federal statutory rate35.0%35.0%35.0%Increase (decrease) in tax rate resulting from:State income taxes, net of federal benefit(0.7)1.40.6Effect of foreign operations(11.8)10.1(7.6)Change in valuation allowance(0.8)0.10.9Foreign branch losses not subject to recapture(0.9) - -Deemed dividends from subsidiaries3.6(4.6)2.8Deduction for domestic production activities(1.5)2.4 -Change in state effective rate on deferred items, net -(1.6) -Utilization of foreign tax credits(3.4)2.6(1.7)Change in uncertain tax positions - -(3.8)Adjustment of prior year balances - -(2.3)Other, net(4.4)(2.2)(1.7)Effective tax rate15.1%43.2%22.2% At March 31, 2014, certain of our foreign subsidiaries in Brazil, France, Germany, Israel, Taiwan, China, and Japan had tax netoperating loss carry forwards totaling approximately $285,184 of which most had no expiration date. This includes $47,303 of acquirednet operating losses related to the acquisition of Asia Tantalum, described in Note 9. There is a greater likelihood of not realizing thefuture tax benefits of these net operating losses and other deductible temporary differences in Brazil, France, Israel, Taiwan, China, andJapan since these losses and other deductible temporary differences must be used to offset future taxable income of those subsidiaries,which cannot be assured, and are not available to offset taxable income of other subsidiaries located in those countries. Accordingly, wehave recorded valuation allowances related to the net deferred tax assets in these jurisdictions. Valuation allowances increased(decreased) $(6,727), $18,761, and $7,250 during the years ended March 31, 2012, 2013, and 2014, respectively, as a result of changes inthe net operating losses of the subsidiaries in the countries mentioned above. The change in the year ended March 31, 2013 includes anincrease of $18,666 related to the net operating loss carry forwards acquired in the Asia 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, 2013 and 2014 would have been$166,747 and $180,960, respectively.62 Income taxes paid totaled $91,709, $43,120 and $27,514 during the years ended March 31, 2012, 2013 and 2014, 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 2010 and forward in theUnited States, 2010 and forward in Germany, 2007 and forward in Hong Kong, and 2008 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, 2011$12,513 Additions for tax positions of prior years2,633 Reductions for tax positions of prior years(1,990)Balance at March 31, 2012$13,156 Additions for tax positions of prior years1,068 Additions for tax positions in current period400 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 Additions for tax positions of prior years615 Additions for tax positions in current period75 Reductions for tax positions of prior years(1,124)Reductions due to expiration of statutes(5,521)Reductions due to settlements with taxing authorities(164)Balance at March 31, 2014$8,083 We recognize interest and penalties related to uncertain tax positions in interest expense. As of March 31, 2013 and 2014, we had, respectively. During the year ended March 31, 2013and 2014, we recognized $315 and $(471), respectively, in interest and penalties. The amount of unrecognized tax benefits recorded on our balance sheet that, if recognized, would affect the effective tax rate isapproximately $14,202 and $8,083 at March 31, 2013 and 2014, respectively. This amount excludes the accrual for estimated interestdiscussed above. 9. Acquisitions On February 6, 2013, we acquired by merger all of the outstanding capital stock of the Tantalum Components Division of NichiconCorporation. (“Asia Tantalum”) for $79,608, net, in cash. Asia Tantalum designs, develops, manufactures and markets tantalumelectronic components. Asia Tantalum’s products are used in a broad range of commercial applications. The acquisition enhances ourleadership position in the passive electronic component industry and provides further opportunities for expansion in the Asian region andtantalum component manufacturing efficiencies. We have 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. During fiscal year 2014, we paid an additional $1,600 to settle the working capital adjustment provisions of the purchase agreement,resulting in an increase in goodwill during fiscal year 2014. The allocation of the purchase price was prepared based on fair values at the acquisition date, as shown in the table below. Theresults of operations for Asia Tantalum are included in the accompanying consolidated statements of operations since the acquisitiondate.63  Assets Acquired and Liabilities AssumedAccounts receivable$7,756 Inventory15,100 Other current assets and liabilities(8,528)Working capital14,328 Property and equipment30,680 Pension liability(1,912)Total identified assets and liabilities43,096 Purchase price, less cash acquired81,208 Goodwill$38,112 For our segment reporting, Asia Tantalum is reported in the Tantalum Products group within the Passive Componentssegment. 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. 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 $11,621 during the fiscal year ended March 31, 2013, and a decrease in recorded pension liabilities by $17,646 duringthe fiscal year ended March 31, 2014. 64 The change in the benefit obligation and plan assets of the U.S. and international defined benefit plans for 2013 and 2014 were asfollows: Fiscal Year Ended March 31, U.S. PlansInternational Plans 2013201420132014Change in benefit obligation:Benefit obligation at beginning of year$37,711 $40,315 $130,533 $162,691 Service cost434 466 501 1,017 Interest cost1,651 1,560 6,067 6,902 Plan participants' contributions - -86 85 Actuarial loss (gain)2,383 (1,181)26,071 (8,008)Benefits paid(1,864)(1,878)(4,976)(6,660)Benefit obligation acquired during the year - -10,288 -Foreign currency exchange rate changes - -(5,879)13,548 Benefit obligation at end of year$40,315 $39,282 $162,691 $169,575 Change in plan assets:Fair value of plan assets at beginning of year$34,173 $34,922 $111,157 $131,637 Actual return on assets2,613 3,014 14,190 8,660 Employer contributions - -7,882 9,126 Plan participants' contributions - -86 85 Benefits paid(1,864)(1,878)(4,976)(6,660)Plan assets acquired during the year - -8,392 -Foreign currency exchange rate changes - -(5,094)11,150 Fair value of plan assets at end of year34,922 36,058 131,637 153,998 Funded status$(5,393)$(3,224)$(31,054)$(15,577) The accumulated benefit obligation at March 31, 2013 and 2014 was $202,639 and $208,767, respectively. At March 31, 2014, 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. Our assumptions used in determining the pension assets and liabilities were as follows: As of March 31, 20132014Assumptions:Discount rates1.0-4.2%1.0-4.5%Increase in compensation3.9%3.9% The following table shows changes in accumulated comprehensive income, excluding the effect of income taxes, related to amountsrecognized in other comprehensive income during fiscal 2013 and 2014 and amounts reclassified to the statement of operations as acomponent of net periodic pension cost during fiscal 2013 and 2014.65  Fiscal Year Ended March 31, U.S. PlansInternational Plans 2013201420132014Beginning balance$13,069 $14,104 $38,230 $52,703 Net loss (gain) incurred during the year1,921 (2,015)18,050 (9,826)Amortization of net loss (gain)(879)(1,136)(1,684)(2,613)Amortization of prior service cost(7) - - -Foreign currency exchange - -(1,893)5,197 $14,104 $10,953 $52,703 $45,461 Amounts that have not yet been recognized as components of net periodic pension cost (as a component of accumulatedcomprehensive income (loss) at March 31, 2013 and 2014) are as follows: Fiscal Year Ended March 31, U.S. PlansInternational Plans 2013 (1)2014 (2)2013 (1)2014 (2)Unrecognized net actuarial loss$9,027 $6,996 $40,533 $35,775 Unamortized prior service cost - - - - $9,027 $6,996 $40,533 $35,775 (1) 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. (2) Amounts in the above table as of March 31, 2014 are net of $3,957 and $9,686 tax benefit for the U.S. Plans and for theInternational Plans, respectively. The March 31, 2014 balance of unrecognized net actuarial losses expected to be amortized in fiscal 2015 is $838 for the U.S. Plansand $1,944 for the International Plans, respectively. Net pension cost related to these pension plans includes the following components: Fiscal Year Ended March 31, 201220132014Service cost$855 $954 $1,473 Interest cost8,224 7,957 8,176 Expected return on plan assets(8,629)(8,333)(9,022)Amortization of prior service cost10 7 -Recognized actuarial loss1,785 2,563 3,749 Net periodic pension cost$2,245 $3,148 $4,376 Our assumptions used in determining the net periodic pension expense were as follows: As of March 31, 201220132014Assumptions:Discount rates4.6 - 5.5%1.0-5.0%1.0-4.2%Increase in compensation4.0%3.8%3.9%Expected long-term rate of return on plan assets6.4 - 7.3%1.4-7.3%1.4-7.3% 66  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 0.20% from March 31, 2013 to March 31, 2014. The fair value of pension assets at March 31, 2013 and 2014 was determined using: Based on Quoted pricesOther in activeobservableUnobservable Fair Value atmarketsinputsinputs 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 Accounts31,406 -31,406 -Guaranteed Deposit Account3,373 -3,373 - International Defined Benefit Plan Assets:Cash341 341 - -Depository Account8,453 8,453 - -Pooled Separate Accounts122,843 -122,843 -Total$166,559 $8,937 $157,622 $ - Based on Quoted pricesOther in activeobservableUnobservable Fair Value atmarketsinputsinputs March 31, 2014(Level 1)(Level 2)(Level 3)Assets measured at fair value on a recurring basis:U.S. Defined Benefit Plan Assets:Cash$147 $147 $ -$ -Pooled Separate Accounts32,806 -32,806 -Guaranteed Deposit Account3,105 -3,105 - International Defined Benefit Plan Assets:Cash689 689 - -Depository Account8,389 8,389 - -Pooled Separate Accounts144,920 -144,920 -Total$190,056 $9,225 $180,831 $ - 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. 67 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 50% equity and 50% fixed income for our U.S. defined benefit plans and 45% equity and 55%fixed income for our international defined benefit plans. Our pension plans’ weighted average asset allocations at March 31, 2013 and 2014, by asset category are as follows: As of March 31, 2013As of March 31, 2014Asset CategoryU.S. PlansInternationalPlansU.S. PlansInternationalPlansEquity securities51%43%51%43%Debt securities39%50%40%51%Other10%7%9%6% Total100%100%100%100% We make contributions to our defined benefit plans as required under various pension funding regulations. We expect to make tomake contributions of approximately $9,154 to the international plans in fiscal 2015 based on current actuarial computations. Estimated future benefit payments are as follows: Fiscal Year ended March 31,U.S. PlansInternational Plans2015$1,901 $6,418 20161,944 6,568 20172,039 6,722 20182,127 6,876 20192,251 7,033 2020-202412,369 37,497 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, 2012, 2013 and 2014 were approximately $4,492, $4,145, and $4,074,respectively. 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 theinvestments. The market value of the trust at March 31, 2013 and 2014 of $7,043 and $7,915, respectively, is included as an asset and aliability in our accompanying balance sheet because the trust’s assets are both assets of the Company and also a liability as they areavailable to general creditors in certain circumstances. 68 11. Stock Based Compensation: We have six 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 toan aggregate of 10,000 shares of common stock. Under the 2004 Non‑Employee Directors’ Stock Option Plan, as amended, we may grantoptions for the purchase of up to an aggregate of 1,000 shares of common stock. In July of 2013, the Board and the Company’sshareholders approved the adoption of the 2014 Stock Option Plan, under which we could grant options to employees for the purchase ofup to an aggregate of 10,000 shares of common stock as well as the 2014 Non-Employee Directors’ Stock Option Plan, under which wecould grant options to our directors for the purchase of up to an aggregate of 1,000 shares of common stock. Under all plans, the exercise price of each option shall not be less than themarket price of our stock on the date of grant and an option’s maximum term is 10 years. Options granted under the 1995 Stock Option Plan, 2004 Stock Option Plan, and the 2014 StockOption Plan vest as to 25% annually and options granted under the Non-Employee Directors’ Stock Option Plan, 2004 Non‑EmployeeDirectors’ Stock Option Plan, and the 2014 Non-Employee Director’s Stock Option Plan vest as to one-third annually. Requisite serviceperiods related to all plans begin on the grant date. As of March 31, 2014, there were 11,291 shares of common stock available forfuture issuance under all of the plans, consisting of options available to be granted and options currently outstanding. Activity under our stock option plans is summarized as follows: Number ofSharesAverage Price(a)Average Life(years) (b)AggregateIntrinsic ValueOutstanding at March 31, 20134,247 $13.40 - -Options granted575 11.50 - -Options exercised(387)10.97 -$654 Options cancelled/forfeited(264)13.85 -145 Outstanding at March 31, 20144,171 $13.34 5.10 $3,613 Exercisable at March 31, 20142,898 $13.90 3.71 $1,801 (a)Weighted-average exercise price(b)Weighted-average contractual life remaining The total aggregate intrinsic value of options exercised is $305, $27, and $654 for fiscal years ended March 31, 2012, 2013, and 2014,respectively. Unvested share activity under our stock option plans for the year ended March 31, 2014 is summarized as follows: Number ofSharesWeightedAverage Grant-Date Fair ValueUnvested balance at March 31, 20131,253 $2.61 Options granted575 2.25 Options forfeited(38)2.60 Options vested(517)2.64 Unvested balance at March 31, 20141,273 $2.44 69 The total unrecognized compensation costs related to unvested awards expected to be recognized over the vesting period,approximately four years, was $911 and $842 as of March 31, 2013 and 2014, respectively. The total aggregate fair value of optionsvested is $1,850, $1,552, and $1,365 for fiscal years ended March 31, 2012, 2013, and 2014, respectively. The weighted average estimated fair value of our stock options granted at grant date market prices was $3.03, $2.09, and $2.25 peroption during fiscal years ended March 31, 2012, 2013, and 2014, respectively. The consolidated statement of operations includes $886,net of $477 of tax benefit, in stock-based compensation expense for fiscal 2014. 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, 2014 was 7.1%. The following are significant weighted average assumptions used for estimating the fair value of options issuedunder our stock option plans: 201220132014 GrantsGrantsGrantsExpected life (years)666Interest rate1.8%1.0%1.0%Volatility23%28%29%Dividend yield1.5%2.8%3.1% 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, 2014, were as follows: Fiscal Year ended March 31,2015$6,119 20165,189 20174,169 20184,037 20193,934 Thereafter5,351 Rental expense for operating leases was $7,663, $7,382, and $7,333 for the fiscal years ended March 31, 2012, 2013, and 2014,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 31,2014, 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 or such state statutes authorize joint and several liability,the EPA or state regulatory authorities could seek to recover all clean-up costs from any one of the PRPs at a site despite theinvolvement of other PRPs. At certain sites, financially responsible PRPs other than AVX also are, or have been, involved in siteinvestigation and clean-up activities. We believe that liability resulting from these sites will be apportioned between AVX and otherPRPs. 70 To resolve our liability at the sites at which we have been named a PRP, we have entered into various administrative orders andconsent 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 $66,000, plus interest, toward the environmental conditions at, and remediationof, New Bedford Harbor in the Commonwealth of Massachusetts (“the harbor”) in settlement with the United States and theCommonwealth of Massachusetts, subject to reopener provisions, including a reopener if certain remediation costs for the site exceed$130,500. On April 18, 2012, the EPA issued a Unilateral Administrative Order (“UAO”) directing us to perform certain remedial actions forthe harbor clean-up pursuant to the reopener provisions. 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. Under the terms of the settlement, AVX was obligated to pay $366,250, plus interestcomputed from August 1, 2012, in three installments over a two-year period for use by the EPA and the Commonwealth to complete theclean-up of the harbor. The settlement also required the EPA to withdraw the UAO. The United States District Court approved thesettlement and entered the Supplemental CD on September 19, 2013. On October 18, 2013, we paid the initial settlement installment of$133,350, plus accrued interest of $3,954. On March 26, 2014, we prepaid a second settlement installment of $110,817, plus accruedinterest of $822 on the remaining settlement amount through that date. We had reserves of approximately $380,611 and $135,336 at March 31, 2013 and 2014, respectively, related to the variousenvironmental matters. These reserves are classified in the consolidated balance sheets as $147,711 and $4,353 in accrued expenses atMarch 31, 2013 and 2014, respectively, and $232,900 and $130,983 in other non-current liabilities at March 31, 2013 and March 31, 2014,respectively. The amount recorded for identified liabilities is based on estimates. Amounts recorded are reviewed periodically and adjustedto reflect additional legal and technical information when it 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 reasonablypossible aggregate environmental remediation exposure. Accordingly, these costs could differ from our current estimates. There is a class action 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. We intend to defend vigorously the claimsasserted in this lawsuit. At this stage of the litigation, there has not been a determination as to the nature of the liability or theamount, if any, of damages. Based on our estimate of potential outcomes, we have accrued $1,000 with respect to this case as of March31, 2014. On March 1, 2010, AVX was named as a third party defendant in a case filed in Massachusetts Superior Court captioned DaRosa v. City ofNew Bedford. This case relates to a former disposal site in the City of New Bedford located at Parker Street. The City asserts that AVX,among others, contributed to that site. We intend to defend vigorously the claims that have been asserted in this lawsuit. In light of theforegoing, we are not able to estimate any amount of loss or range of loss. No accrual for costs has been recorded and the potentialthis time. In fiscal 2014, AVX was named as a defendant in a patent infringement case filed in the United States District Court for the Districtof Delaware captioned Greatbatch, Inc. v AVX Corporation. This case alleges that certain AVX products infringe on one or more of sixs lawsuit. In light of the foregoing, we are not able to estimate any amount of loss orrange of loss. No accrual for costs has been recorded and the potential impact of this case on our financial position, results of operations, comprehensive income (loss) and cash flows cannot be determined at this time. 71 AVX has received a demand for approximately $11,000 from the City of New Bedford arising from contamination at the City’s NewBedford Railyard. AVX believes it has meritorious defenses and intends to defend vigorously the demand. In light of the foregoing, weare 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 such environmental matters at certain sites,regulatory agencies in those jurisdictions may require us to address such issues. Once it becomes probable that we will incur costs in connection with remediation of a site and such costs can be reasonably estimated, we establish reserves or adjust our reserves for our projected share of these costs. 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: and losses on the forward contracts used to hedge them, thereby reducing volatility of earnings or protecting fair values of assets and liabilities. We do not enter into any trading or speculative positions with regard to derivative instruments. We primarily use forward contracts, with maturities less than four months, designated as cash flow hedges to protect against 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, 2013 and 2014, respectively, the Company had the following forward contractsthat were entered into to hedge against the volatility of foreign currency exchange rates for certain forecasted sales and purchases. March 31, 2013Fair Value of Derivative Instruments Asset DerivativesLiability Derivatives Balance Sheet CaptionFair ValueBalance SheetCaptionFair Value Foreign exchange contractsPrepaid and other$1,117 Accrued expenses$2,050 March 31, 2014Fair Value of Derivative Instruments Asset DerivativesLiability Derivatives Balance Sheet CaptionFair ValueBalance SheetCaptionFair Value Foreign exchange contractsPrepaid and other$548 Accrued expenses$332 72 For these derivatives designated as hedging instruments, during fiscal 2012, 2013, and 2014, net pre-tax gains (losses) of $(527),$(4,432), and $(3,576), respectively, were recognized in other comprehensive income (loss). In addition, during fiscal 2012, 2013, and 2014,net pretax gains (losses) of $502, $(7,448), and $(5,140), respectively, were reclassified from accumulated other comprehensive income(loss) into cost of sales (for hedging purchases), and a net pre-tax loss of $95 and net pre-tax gains of $2,971 and $509, respectively,were reclassified from accumulated other comprehensive income (loss) into sales (for hedging sales) in the accompanying statement ofoperations. 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, 2013 and 2014, we had the following forward contracts that were entered into to hedge againstthese exposures. March 31, 2013Fair Value of Derivative Instruments Asset DerivativesLiability Derivatives Balance Sheet CaptionFair ValueBalance SheetCaptionFair Value Foreign exchange contractsPrepaid and other$51 Accrued expenses$396 March 31, 2014Fair Value of Derivative Instruments Asset DerivativesLiability Derivatives Balance Sheet CaptionFair ValueBalance SheetCaptionFair Value Foreign exchange contractsPrepaid and other$16 Accrued expenses$101 For these derivatives not designated as hedging instruments during fiscal 2012, 2013, and 2014, gains (losses) of $2,608, $(227), and$(3,462), respectively, were recognized in other expense, which offset the approximately $(4,289), $1,022 and $4,035 in exchange gains(losses), respectively, that were recognized in other income in the accompanying statement of operations. At March 31, 2013 and 2014, we had outstanding foreign exchange contracts with notional amounts totaling $187,670 and $202,865,respectively, denominated primarily in euros, Czech korunas, British pounds, and Japanese yen. 73 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. Fiscal Year Ended March 31, 201220132014Sales:Product and equipment sales to affiliates$8,501 $12,804 $20,530 Purchases:Purchases of resale inventories, raw materials, supplies, equipment, andservices431,181 419,472 322,570 Other:Dividends paid34,104 36,540 43,544 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 resistive productsmanufactured by us or purchased from other manufacturers for resale. The KED Resale segment consists primarily of ceramiccapacitors, frequency control devices, SAW devices, sensor products, RF modules, actuators, acoustic devices, and connectors produced byKyocera and resold by AVX. The Interconnect segment consists primarily of Elco automotive, telecom, and memory connectorsmanufactured by AVX Interconnect or purchased from other manufacturers for resale. Sales and operating results from these reportablesegments are shown in the tables below. In addition, we have a corporate administration group consisting of finance, legal, EHS, andadministrative activities. 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. 74 The tables below present information about reported segments: Fiscal Year Ended March 31,Sales revenue (in thousands)201220132014Ceramic Components$179,984 $173,315 $193,978 Tantalum Components393,468 330,209 394,119 Advanced Components378,843 346,543 357,900 Total Passive Components952,295 850,067 945,997 KDP and KCD Resale410,419 377,707 293,048 KCP Resale Connectors54,765 61,809 64,680 Total KED Resale465,184 439,516 357,728 Interconnect127,775 124,817 138,879 Total Revenue$1,545,254 $1,414,400 $1,442,604 Fiscal Year Ended March 31, 201220132014Operating profit (loss):Passive components$275,947 $145,870 $165,441 KED Resale15,669 17,659 18,074 Interconnect25,081 25,042 27,689 Corporate activities(141,146)(308,416)(52,040)Total$175,551 $(119,845)$159,164 Fiscal Year Ended March 31, 201220132014Depreciation and amortization:Passive components$35,616 $34,317 $32,662 KED Resale332 272 169 Interconnect4,072 5,885 6,863 Corporate activities6,870 6,397 10,515 Total$46,890 $46,871 $50,209 As of March 31, 20132014Assets:Passive components$768,965 $744,821 KED Resale52,058 43,872 Interconnect59,278 51,012 Cash, A/R and S/T and L/T investments1,264,695 1,107,734 Goodwill - Passive components189,095 202,774 Goodwill - Interconnect10,277 10,277 Corporate activities257,627 224,498 Total$2,601,995 $2,384,988 75  Fiscal Year Ended March 31, 201220132014Capital expenditures:Passive components$29,664 $29,029 $22,764 KED Resale13 30 114 Interconnect11,761 12,598 3,269 Corporate activities7,763 2,048 658 Total$49,201 $43,705 $26,805 During the fiscal year ended March 31, 2014, no customers accounted for more than 10% of the Company’s sales. One customeraccounted for 13% of net sales during the fiscal year ended March 31, 2013. No single customer has accounted for more than 10% of netsales during the fiscal year ended March 31, 2012. As of March 31, 2014, one customer represented 15% of the Company’s accountsreceivable balance. No single customer accounted for more than 10% of the Company’s accounts receivable balance as of March 31,2013. 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. Fiscal Year Ended March 31, 201220132014Net sales:Americas$429,079 $390,152 $404,446 Europe422,613 351,603 379,183 Asia693,562 672,645 658,975 Total$1,545,254 $1,414,400 $1,442,604 Property, plant and equipment, net:Americas$107,378 $103,177 $89,086 Europe100,255 98,279 92,430 Asia28,855 56,808 54,209 Total$236,488 $258,264 $235,725 1. 76 16. Summary of Quarterly Financial Information (Unaudited): Quarterly financial information for the fiscal years ended March 31, 2013 and 2014 is as follows: First QuarterSecond Quarter 2013201420132014Net sales$353,154 $369,379 $360,823 $375,785 Gross profit68,957 68,271 68,925 71,525 Net income (loss)(136,784)27,657 28,037 28,816 Basic earnings (loss) per share(0.81)0.16 0.17 0.17 Diluted earnings (loss) per share(0.81)0.16 0.17 0.17 Third QuarterFourth Quarter 2013201420132014Net sales$339,875 $346,211 $360,548 $351,229 Gross profit62,417 67,766 63,471 71,272 Net income (loss)19,864 31,434 24,571 39,130 Basic earnings (loss) per share0.12 0.19 0.15 0.23 Diluted earnings (loss) per share0.12 0.19 0.15 0.23 The loss in the first quarter of fiscal 2013 includes a charge of $266,250 related to the New Bedford Harbor Superfund site, asdiscussed in Note 12. 17. Subsequent Events: On May 16, 2014, our Board of Directors declared a $0.095 dividend per share of common stock for the quarter ended March 31,2014. The dividend will be paid to stockholders of record on June 6, 2014 and will be disbursed on June 20, 2014. 77 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, 2014 and March 31, 2013, and the results of their operations and their cash flows for each of the three years inthe period ended March 31, 2014 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, 2014, basedon criteria established in Internal Control - Integrated Framework (1992) issued by the Committee of Sponsoring Organizations ofthe Treadway Commission (COSO). The Company's management is responsible for these financial statements, for maintaining effectiveinternal control 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 21, 201478EXHIBIT 10.19 Date [Employee Name][Address][City, State Zip Code] Dear [ ]:Pursuant to the terms and conditions of the AVX Corporation 2014 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:[ ]GrantPrice:$[ ]Total Cost toExercise:$[ ]Expiration Date:[ ]Vesting Schedule:25% per year for 4 years[ ] on xx/xx/xx[ ] on xx/xx/xx[ ] on xx/xx/xx[ ] on xx/xx/xx Date [Employee Name][Address][City, State Zip Code]Dear [ ]:Pursuant to the terms and conditions of the AVX Corporation 2014 Stock Option Plan (the 'Plan'), you have beengranted a Non-Qualified Stock Option to purchase [ ] shares of stock as outlined below. Granted To:[ ] Grant Date:[ ]Granted:[ ]GrantPrice:$[ ]Total Cost toExercise:$[ ]Expiration Date:[ ]Vesting Schedule:Special Vesting[ ] on xx/xx/xx[ ] on xx/xx/xx[ ] on xx/xx/xx Pursuant to the terms and conditions of the Plan, you have been granted an Incentive Stock Option to purchase[ ] shares of stock as outlined below. Granted To:[ ] Grant Date:[ ]Granted:[ ]GrantPrice:$[ ]Total Cost toExercise:$[ ]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, 2014, 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)  CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM We hereby consent to the incorporation by reference in the Registration Statements on Form S-8(Nos. 33-98094, 33-98114, 333-02808, 333-37201, 333-00890, 333-85561, 333-103611,333-127362, 333-152744,333-177816 and 333-193804) of AVX Corporation of our reportdated May 21, 2014 relating to the financial statements and the effectiveness of internal controlover financial reporting, which appears in this Form 10-K. /s/ PricewaterhouseCoopers LLPPricewaterhouseCoopers LLPAtlanta, GeorgiaMay 21, 2014 1LEGAL01/13179800v2 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 Hollirae 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, 2014 (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)AVX Corporation 1995 Stock Option Plan, (ii) AVX Corporation Non-Employee Directors'Stock Option Plan, (iii) AVX Corporation Retirement Plan, (iv) AVX Corporation Non-qualifiedSupplemental Retirement Plan, (v) AFGWU Local 1028 401(K) Retirement Plan forEmployees of AVX Corporation in Raleigh, North Carolina, (vi) AVX Corporation 401(K)Plan (vii) ELCO Corporation, U.S.A. Salaried Employees Retirement Plan, (viii) AVX PensionPlan for Bargaining Unit and Hourly Employees, (ix) AVX Corporation 2004 Stock OptionPlan, (x) AVX Corporation 2004 Non-Employee Director’s Stock Option Plan, (xi) AVXCorporation 2014 Stock Option Plan, (xii) AVX Corporation 2014 Non-Employee Directors’Stock Option Plan, and in each case, to execute and deliver any agreements, instruments,certificates or other documents which such person shall deem necessary or proper inconnection with the filing of any such Registration Statement or the Annual Report, includingany amendments or supplements thereto, and generally to act for and in the name of theundersigned with respect to any such filing as fully as could the undersigned if then personallypresent 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 capacityas an officer and/or director of AVX Corporation (the "Company"), Forms 3, 4 and 5 inaccordance with Section 16(a) of the Securities Exchange Act of 1934 and the rulesthereunder; (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 United States Securities and Exchange Commission and any stockexchange or similar authority, and LEGAL01/13106487v3 (c) take any other action of any type whatsoever in connection with theforegoing which, in the opinion of such attorney-in-fact, may be of benefit to, in 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 conditions as suchattorney-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 doand perform any and every act and thing whatsoever requisite, necessary, or proper to be donein the exercise of any of the rights and powers herein granted, as fully to all intents andpurposes as the undersigned might or could do if personally present, with full power ofsubstitution or revocation, hereby ratifying and confirming all that such attorney-in-fact, orsuch attorney-in-fact, or such attorney-in-fact's substitute or substitutes, shall lawfully do orcause to be done by virtue of this power of attorney and the rights and powers hereingranted. The undersigned acknowledges the foregoing attorneys-in-fact, in serving in suchcapacity at the request of the undersigned, are not assuming, nor is the Company assuming, anyof the undersigned's responsibilities to comply with Section 16 of the Securities Exchange Actof 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 October 23, 2013KAZUO INAMORI /s/ John S. Gilbertson Director October 23, 2013JOHN S. GILBERTSON /s/ Tetsuo KubaDirectorOctober 23, 2013TETSUO KUBA - 2 -LEGAL01/13106487v3 /s/ Goro YamaguchiDirectorOctober 23, 2013GORO YAMAGUCHI /s/ Tatsumi Maeda Director October 23, 2013TATSUMI MAEDA /s/ Shoichi Aoki Director October 23, 2013SHOICHI AOKI /s/ Donald Christiansen Director October 23, 2013DONALDCHRISTIANSEN /s/ Joseph Stach Director October 23, 2013JOSEPH STACH /s/ David Decenzo Director October 23, 2013DAVID DECENZO - 3 -LEGAL01/13106487v3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 boardof directors (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 20, 2014 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 boardof directors (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 20, 2014 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 20, 2014 /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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