AVX Corporation

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended March 31, 2017

 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF

1934

For the transition period from _________ to__________

Commission File Number: 1-7201

Delaware
(State or other jurisdiction of incorporation or organization)

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

(Exact name of registrant as specified in its charter)

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

29644
(Zip Code)

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

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

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

Name of each exchange on which registered
New York Stock Exchange

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

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

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days. Yes  No 

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

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller
reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller
reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer
Non-accelerated filer


 (Do not check if a smaller reporting company)

Accelerated filer
Smaller reporting company
Emerging growth company





If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  No 

Based on the closing sales price of $13.79 on September 30, 2016, the last business day of the registrant's most recently completed
second fiscal quarter, the aggregate market value of the common stock held by non-affiliates of the registrant as of that date was
$629,207,803.

As of May 16, 2017, there were 168,108,862 shares of the registrant’s common stock, par value $.01 per share, outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s definitive proxy statement for the 2017 Annual Meeting of Stockholders, which will be filed within 120
days of March 31, 2017, are incorporated by reference into Part III.

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TABLE OF CONTENTS

Business
Risk Factors
Unresolved Staff Comments
Properties
Legal Proceedings
Mine Safety Disclosures

Part I

Item 1.
Item 1A.
Item 1B.
Item 2.
Item 3.
Item 4.

Part II

Item 5.

Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities
Selected Financial Data
Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 6.
Item 7.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Financial Statements and Supplementary Data
Item 8.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Item 9.
Controls and Procedures
Item 9A.
Item 9B. Other Information

Part III

Item 10.
Item 11.
Item 12.
Item 13.
Item 14.

Part IV

Item 15.
Signatures

Directors, Executive Officers and Corporate Governance
Executive Compensation
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Certain Relationships and Related Transactions, and Director Independence
Principal Accounting Fees and Services

Exhibits and Financial Statement Schedules

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Cautionary Statement Pursuant to Safe Harbor Provisions of the Private Securities

Litigation Reform Act of 1995

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

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Item 1.

Business

General

PART I

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

Our passive electronic component products include ceramic and tantalum capacitors, film capacitors, varistors, filters, and
other components manufactured in our facilities throughout the world and passive components manufactured by Kyocera
Corporation of Japan (“Kyocera”), a public company and our majority stockholder which owns approximately 73% of our
outstanding common stock, and other manufacturing suppliers. We also manufacture and sell electronic connectors and inter-
connect systems, and distribute and sell certain electronic connectors manufactured by Kyocera and others.

We are organized by product line with five main product groups: Ceramic Components, Tantalum Components, Advanced
Components, Interconnect, and Kyocera Electronic Devices (“KED Resale”). Our reportable segments are based on the types
of products from which we generate revenues and how management assesses performance and makes operating decisions related
to these products. We have three reportable segments: Passive Components, KED Resale, and Interconnect. The product groups
of Ceramic Components, Advanced Components and Tantalum Components have been aggregated into the Passive
Components reportable segment. Segment revenue and profit information is presented in Note 15 to the consolidated financial
statements. The Passive Components segment consists primarily of surface mount and leaded ceramic capacitors, RF thick and
thin film components, surface mount and leaded tantalum capacitors, surface mount and leaded film capacitors, ceramic and
film power capacitors, super capacitors, EMI filters (bolt in and surface mount), thick and thin film packages of multiple passive
integrated components, varistors, thermistors, inductors, and resistive products manufactured by, or for, AVX. The KED Resale
segment consists primarily of ceramic capacitors, frequency control devices, SAW devices, sensor products, RF modules,
actuators, acoustic devices, and connectors produced by Kyocera and resold by AVX. The Interconnect segment consists
primarily of AVX Interconnect automotive, telecommunications, and memory connectors manufactured, by or for, AVX. In
addition, we have a corporate administration group consisting of finance, legal, environmental health and safety (“EHS”), and
other administrative activities.

Our customers are multi-national original equipment manufacturers, or OEMs,

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

We sell our products to customers in a broad array of industries, such as telecommunications, information technology
instrumentation, transportation, energy

hardware, automotive electronics, medical devices and instrumentation,
harvesting, defense and aerospace electronic systems, and consumer electronics.

industrial

Our principal strategic advantages include:

Creating Technology Leadership. We have research and development locations in the United States, United Kingdom, Czech
Republic, France, Israel, Malaysia, and Japan, although a certain level of innovation occurs at every one of our manufacturing
sites. We developed numerous new products and product extensions during fiscal 2017. These new products add to the broad
product line we offer to our customers. Due to our broad product offering, none of our products individually represents a
material portion of our revenues. Our scientists and design engineers are working to develop product solutions to the challenges
facing our customers as consumers and businesses demand more advanced electronic solutions to manage their everyday lives
and businesses. Our engineers are continually working to enhance our manufacturing processes to improve capability, capacity,
and yield, while reducing manufacturing costs.

Providing a Broad Product Line. We believe that the breadth and quality of our product line and our ability to respond quickly
to our customers’ design and delivery requirements make us the provider of choice for our multi-national customer base. We
differentiate ourselves by providing our customers with a substantially complete line of passive component solutions. This broad
array of products allows our customers to streamline their purchasing and supply organization.

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Maintaining the Lowest Cost, Highest Quality Manufacturing Organization. We have invested approximately $141 million over
the past three fiscal years to upgrade and enhance our worldwide manufacturing capabilities with respect to the manufacture of
ceramic, tantalum, and advanced components as well as Interconnect devices. In order to reduce the cost of production, our
strategy has included the transfer to and expansion of manufacturing operations in countries such as El Salvador, Malaysia,
Mexico, China and the Czech Republic.

Globally Coordinating our Marketing, Distribution, and Manufacturing Facilities. We believe that our global presence is an
important competitive advantage as it allows us to provide quality products on a timely basis to our multi-national customers.
We provide enhanced services and responsiveness to our customers by maintaining significant manufacturing operations in
locations where we market the majority of our products. Our 20 manufacturing facilities are located in 11 different countries
around the world. As our customers continue to expand their global production capabilities, we are ideally situated to meet their
design and supply requirements.

Products

We offer an extensive line of passive components. Passive components do not require power to operate. Passive
components adjust and regulate voltage and current, store energy, and filter frequencies. Sales of Passive Components
represented approximately 67% of our net sales in fiscal 2017. KDP and KCD Resale represented approximately 22%, and
Interconnect products, together with KCP Resale Connectors, represented approximately 11% of our net sales in fiscal 2017.
The table below presents revenues for fiscal 2015, 2016 and 2017 by product group. Financial information concerning our
Passive Components, KED Resale, and Interconnect segments is set forth in Note 15 to the consolidated financial statements
elsewhere herein.

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

Total Passive Components

Interconnect
KCP Resale Connectors
KDP and KCD Resale
Total KED Resale
Total Revenue

Passive Components

2015

Fiscal Year Ended March 31,
2016

2017

$

$

202,719
355,974
359,315
918,008
134,610
70,741
229,869
300,610
1,353,228

$

$

176,502
311,888
333,693
822,083
111,609
23,751
238,086
261,837
1,195,529

$

$

188,568
314,723
372,279
875,570
118,163
30,027
288,901
318,928
1,312,661

We manufacture and resell a full line of multi-layered ceramic and tantalum electrolytic capacitors in many different sizes
and configurations. Our strategic focus on the growing use of passive components is reflected in our investment of
approximately $109 million in facilities and equipment used to manufacture passive components during the past three fiscal
years. Passive components accounted for approximately 67% of our net sales in fiscal 2017. We believe that sales of passive
components will continue to expand in 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
applications requiring low to medium capacitance values. However, with current capacitance range extensions, we are seeing
more demand for higher capacitance (“High CV”) products that increase the demand for products we sell. Capacitance is the
measure of the capacitor's ability to store electric energy. Generally, ceramic capacitors are more cost-effective at lower
capacitance values, and tantalum capacitors are more cost-effective at medium capacitance values. The net sales of tantalum and
ceramic capacitors accounted for approximately 57% of our passive component net sales in fiscal 2017.

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We also offer a broad line of advanced passive component products to fill the special needs of our customers. Our family
of advanced passive components includes film capacitors, high energy/voltage power capacitors, and varistors. Our advanced
product engineers work with some customers’ in-house technical staffs to design and manufacture customized products to meet
the specifications of particular applications. The manufacture of custom products permits us, through our research and
development activities, to make technological advances, provide customers with design solutions to fit their needs, gain a
marketing inroad with customers with respect to our complete product line, and, in some cases, develop products that can be
sold to additional customers in the future. Sales of advanced products accounted for approximately 43% of passive component
net sales in fiscal 2017.

Interconnect

We manufacture and resell high-quality electronic connectors and interconnect systems for use in various industries. Our
product lines include a variety of industry-standard connectors as well as products designed specifically for our customers' unique
applications. An expanding portion of the electronics market for AVX Interconnect products is the automotive market, with
applications throughout a vehicle, including engine control, transmission control, audio, brakes, and stability and safety control
systems. We produce fine pitch connectors used in portable devices such as smart phones, other cell phones, notebook
computers, tablets, GPS, and other hand held devices. In addition, we offer specialty connectors designed to address customer
specific applications across a wide range of products and end markets, including the expanding LED, LCD, and medical devices
and hardware markets. We have invested approximately $28 million in facilities and equipment over the past three years, as we
continue to focus on new product development and enhancement of production capabilities for our Interconnect business.
Sales of Interconnect products, including KCP Resale connector products, accounted for approximately 11% of net sales in
fiscal 2017. Approximately 20% of combined Interconnect and KCP Resale Connector net sales in fiscal 2017 consisted of
connectors manufactured by Kyocera. Kyocera notified AVX in February 2014 of its intent, effective April 1, 2015 to market
its connector products in Asia using Kyocera’s sales force rather than continuing to have AVX resell such products in Asia.
AVX’s sales of Kyocera connector products in Asia were $1.1 million for the fiscal year ended March 31, 2016. 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 Related Transactions.”

KED Resale

We have a non-exclusive license to distribute and sell select Kyocera-manufactured electronic component and connector
products to our customers in certain geographical regions outside of Japan. The Kyocera KDP, KCP and KCD electronic
components we market and sell include ceramic capacitors, RF modules, frequency control devices, SAW devices, sensor
products, actuators, and acoustic devices. Sales of these products accounted for approximately 24% of net sales in fiscal 2017.
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 Related Transactions.”

AVX and Kyocera – Resale Sales Channel Changes

Kyocera notified AVX pursuant to the Products Supply and Distribution Agreement in December 2016 of its intent,
effective January 1, 2018, to market its manufactured passive and interconnect products globally using Kyocera’s sales force
rather than continuing to have AVX resell such products in the Americas, Europe and Asia. Kyocera will pay commissions to
AVX on sales by Kyocera, in the applicable territories, of products designed into customer applications by AVX prior to January
1, 2018 of 2.0% in calendar year 2018, 1.5% in calendar year 2019, and 1.0% in calendar year 2020. Sales of Kyocera resale
products by AVX were $318.9 million and related operating profit was $17.1 million for the fiscal year ended March 31, 2017.

AVX notified Kyocera pursuant to the Products Supply and Distribution Agreement in February 2017 of its intent, effective
April 1, 2018, to market its manufactured products in Japan using AVX’s sales force rather than continuing to have Kyocera
resell such products in this territory. AVX will pay commissions to Kyocera on sales by AVX, in the applicable territory, of
products designed into customer applications by Kyocera prior to April 1, 2018 of 2.0% in fiscal year 2019, 1.5% in fiscal year
2020, and 1.0% in fiscal year 2021. Sales of AVX resale products by Kyocera were $25.9 million for the fiscal year ended March
31, 2017.

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Marketing, Sales, and Distribution

We place a high priority on solving customers’ electronic component design challenges and responding to their needs. In
order to better serve our customers, we frequently designate teams consisting of marketing, field application engineering,
research and development, and manufacturing personnel to work with customers to design and manufacture products to suit
their specific requirements. We expense costs related to these activities as incurred.

Approximately 29%, 27%, and 44% of our net sales for fiscal 2017 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
statements elsewhere herein. The section “Risk Factors,” contained herein, provides a discussion of risks associated with our
foreign operations.

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

Our customers use our products in a wide variety of applications. In order to maximize opportunities, our engineering and
sales teams maintain close relationships with OEM, EMS, and electronic component distributor customers. Our largest
customers may vary from year to year, and no customer has a long-term commitment to purchase our products. During the
fiscal years ended March 31, 2015, March 31, 2016 and March 31, 2017, no single customer accounted for more than 10% of
our sales. As of March 31, 2016 and March 31, 2017, one customer represented 13% and 12%, respectively, of the Company’s
accounts receivable balance. Because we are a supplier to several significant manufacturers in the broad-based electronic devices
industries and because of the cyclical nature of these industries, the significance of any one customer can vary from one period
to the next.

We also have qualified products under various specifications approved and monitored by the United States Defense
Electronic Supply Center (“DSCC”) and European Space Agency (“ESA”), and approved under certain foreign military
specifications.

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

We had a backlog of orders of approximately $228 million at March 31, 2015, $224 million at March 31, 2016, and $280
million at March 31, 2017. Firm orders, primarily with delivery dates within six months of order placement, are included in
backlog. Many of our customers encounter uncertain and changing demand for their products. Customer-provided forecasts of
product usage and anticipated usage of inventory at consignment locations are not included in backlog. If demand falls below
customers’ forecasts, or if customers do not effectively control their inventory, they may cancel or reschedule their planned
shipments that are included in our backlog, in many instances without any penalty. Backlog fluctuates from year to year due, in
part, to changes in customer inventory levels, changes to consignment inventory arrangements, order patterns, and product
delivery lead times in the industry. Accordingly, the backlog outstanding at any point in time is not necessarily indicative of the
level of business expected in any ensuing period since many orders are placed and delivered within the same period. In addition,
the increased use of vendor-managed inventory and similar consignment type arrangements tend to limit the significance of
backlog as future use and sale of such inventory is not typically reflected in backlog.

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Research, Development, and Engineering

Our emphasis on research and development is evidenced by the fact that most of our manufactured products and
manufacturing processes have been designed and developed by our own engineers and scientists. Our research and development
activities are carried out at facilities located in the United States, United Kingdom, Czech Republic, France, Israel, Malaysia, and
Japan, although a certain level of innovation occurs at every one of our manufacturing sites.

Our research and development effort and our operational-level engineering effort place a priority on the design and
development of product extensions, innovative new products, and improved manufacturing processes as well as engineering
advances in existing product lines and manufacturing operations. Other areas of emphasis include material synthesis and the
integration of passive components for applications requiring reduced size and lower manufacturing costs associated with circuit
board assembly. Research, development, and engineering expenditures were approximately $25 million, $28 million, and $31
million during fiscal 2015, 2016, and 2017, respectively. The level of such spending can fluctuate as new products are transferred
to full-scale production and process enhancements are implemented.

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

Raw Materials

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 costs of these materials are subject
to significant price fluctuation. In some cases, raw materials cost increases may be offset by selling price increases, productivity
improvements, and cost savings programs.

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

Although most materials incorporated in our products are available from a number of sources, certain materials are available
only from a relatively limited number of suppliers. Historically, we had a policy of not using tantalum sourced from the
Democratic Republic of Congo (“DRC”), or any other area in which insurgents or similar groups benefit from the sale of
minerals. As a key participant in Solutions for Hope, AVX was the first in its industry to validate a “closed tantalum pipe”
process from the mine site to the customer. Furthermore, the “closed pipe” was validated under the Conflict-Free Smelter
program in accordance with the principles of the Dodd-Frank legislation and the current Organization for Economic
Cooperation and Development (“OECD”) guidelines. During 2016 and in the spirit of continuous improvement envisioned and
enshrined by the OECD Due Diligence guidance, AVX continues to improve supply chain sustainability and reduce compliance
cost by field-testing a new alternate traceability platform (“BSP”) and proof of concept of a geological science technique for
mineral matching (Geological Passporting) in region. The result of the BSP pilot demonstrated that a new cost model is possible
using technology for the reporting, analysis, chain of custody and Geo Passporting for validation. Please refer to the Solutions
for Hope website for more information.

Since December 2011, AVX has only sourced tantalum powder and wire used in its tantalum capacitors from smelters that
are compliant with the EICC/GeSI conflict-free smelter program. In 2012, AVX began using Validated Conflict-Free Tantalum,
which comes from verified sources in the DRC and surrounding countries.

Our continued efforts affirm our commitment to supply conflict-free minerals to our customers and to comply fully with

the OECD guidelines and United States Securities and Exchange Commission (“SEC”) regulations.

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Competition

Markets for our products are highly competitive. We encounter aggressive and able competition in our various product lines
from both domestic and foreign manufacturers. Competitive factors in the markets include product quality and reliability,
breadth of product line, customer service, technological innovation, global production presence, timely delivery, and price. We
believe we are competitively positioned on each of these factors. The breadth of our product offering enables us to strengthen
our market position by providing customers with one of the broadest selections of passive electronic components and
interconnect products available from any one source. Our major competitors for passive electronic components include Murata
Manufacturing Co. Ltd., TDK Corporation, Kemet Corporation, Yageo Corporation, Taiyo Yuden Co. Ltd., Samsung
Electronics, and Vishay Intertechnology, Inc. Our major competitors for certain electronic interconnect products include TE
Connectivity, Amphenol Corporation, Molex Incorporated, and Delphi Connection Systems. Many other companies produce
products in the markets in which we compete.

Employees

As of March 31, 2017, we employed approximately 10,800 full-time employees. Approximately 1,370 of these employees
are employed in the United States, of which, approximately 220 are covered by collective-bargaining arrangements. In addition,
some foreign employees are members of trade and government-affiliated unions. Our relationship with our employee union
groups is generally good. However, no assurance can be given that, in response to changing social and economic conditions and
our actions, labor unrest or strikes will not occur.

Environmental Matters

We are subject to federal, state, and local laws and regulations concerning the environment in the United States and to the
environmental laws and regulations of the other countries in which we operate. These regulations include limitations on
discharges into air and water; remediation requirements; chemical use and handling restrictions; pollution control requirements;
waste minimization considerations; and hazardous materials transportation, treatment, and disposal restrictions. If we fail to
comply with any of the applicable environmental regulations, we may be subject to fines, suspension of production, alteration
of our manufacturing processes, sales limitations, and criminal and civil liabilities. Existing or future regulations could require us
to procure expensive pollution abatement or remediation equipment, to modify product designs, or to incur expenses to comply
with environmental regulations. Any failure to control the use, disposal, or storage, or to adequately restrict the discharge of
hazardous substances, could subject us to future liabilities and could have a material adverse effect on our business. Based on
our periodic reviews of the operating policies and practices at all of our facilities, we believe that our operations are currently in
compliance with applicable environmental laws and regulations.

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

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

On October 10, 2012, the EPA, the United States, and the Commonwealth of Massachusetts and AVX announced that they
had reached a financial settlement with respect to the EPA’s ongoing clean-up of the New Bedford Harbor in the
Commonwealth of Massachusetts (the “harbor”). Under the terms of the settlement, AVX was obligated to pay $366.3 million,
plus interest computed from August 1, 2012, in three installments over a two-year period for use by the EPA and the
Commonwealth to complete the clean-up of the harbor. On May 26, 2015, we prepaid the third and final settlement installment
of $122.1 million, plus interest of $1.1 million.

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On June 3, 2010, AVX entered into an agreement with the EPA and the City of New Bedford, pursuant to which AVX is
required to perform environmental remediation at a site referred to as the “Aerovox Site” (the “Site”), located in New Bedford,
Massachusetts. AVX has substantially completed its obligations pursuant to such agreement with the EPA and the City of New
Bedford with respect to the satisfaction of AVX’s federal law requirements. Agreements with the state regulatory authorities are
not concluded yet but are likely to include additional groundwater and soil remediation. We have a remaining accrual of $15.1
million at March 31, 2017, representing our estimate, including a $3.6 million charge in the current fiscal year, of the potential
liability related to the remaining performance of environmental remediation actions at the Site and neighboring properties using
certain assumptions regarding the plan of remediation. Since additional sampling and analysis may cause the state regulatory
authority, the Massachusetts Department of Environmental Protection, to require a more extensive and costly plan of
remediation, until all parties agree and remediation is complete, we cannot be certain there will be no additional cost relating to
the Site.

We had total reserves of approximately $16.8 million and $19.2 million at March 31, 2016 and March 31, 2017, respectively,
related to various environmental matters and sites, including those discussed above. These reserves are classified in the
Consolidated Balance Sheets as $7.4 million and $3.9 million in accrued expenses at March 31, 2016 and March 31, 2017,
respectively, and $9.4 million and $15.3 million in other non-current liabilities at March 31, 2016 and March 31, 2017,
respectively. The amounts recorded for identified environmental liabilities are based on estimates. Periodically we review
amounts recorded and adjust them to reflect additional legal and technical information that becomes available. Uncertainties
about the status of laws, regulations, regulatory actions, technology, and information related to individual sites make it difficult
to develop an estimate of the reasonably possible aggregate environmental remediation exposure. Accordingly, these costs could
differ from our current estimates.

On April 19, 2016, the Canadian Ministry of the Environment and Climate Change (the “MoE”) issued a Director’s Order
naming AVX, and others, as responsible parties with respect to a location in Hamilton, Ontario that was at one time the site of
operations of Aerovox Canada, a former subsidiary of Aerovox Corporation, a predecessor of AVX. This Director’s Order
follows a draft order issued on November 4, 2015. AVX has taken the position that any liability of Aerovox Canada for such
site under the laws of Canada cannot be imposed on AVX. At present, it is unclear whether the MoE will seek to enforce such
Canadian order against AVX, and whether, in the event it does so, AVX will have any liability under applicable law. AVX intends
to contest any such course of action that may be taken by the MoE.

We also operate, or did at one time, 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. A separate
account receivable is recorded for any indemnified costs. Our environmental reserves are not discounted and do not reflect any
possible future insurance recoveries, which are not expected to be significant, but do reflect a reasonable estimate of cost sharing
at multiple party sites or indemnification of our liability by a third party.

We are not involved in any pending or threatened environmental proceedings that would require curtailment of our
operations. We continually expend funds to ensure that our facilities comply with applicable environmental regulations. While
we believe that we are in compliance with applicable environmental laws, we cannot accurately predict future developments and
do not necessarily have knowledge of all past occurrences on sites that we currently occupy. New environmental regulations
may be enacted and we cannot determine the modifications, if any, in our operations that any such future regulations might
require, or the cost of compliance with such regulations. Moreover, the risk of environmental liability and remediation costs is
inherent in the nature of our business and, therefore, there can be no assurance that material environmental costs, including
remediation costs, will not arise in the future.

Company Information and Website

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

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

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

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

Officer, Controllers and Financial Managers

• Corporate Governance Guidelines
• Audit Committee Charter
• Compensation Committee Charter
•
• Contact the Board – Whistleblower and Ethics Hotline Procedures

Special Advisory Committee Charter

To review these documents, go to our website and select “About,” followed by “Corporate Information,” and then

“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 bylaws. Each officer holds office until the next annual appointment of officers or until a successor has been duly appointed
and qualified, or until the officer’s death or resignation, or until the officer has otherwise been removed in accordance with our
bylaws. The following table provides certain information regarding the current executive officers of the Company:

Name
John Sarvis ............................
John Lawing..........................
Kurt P. Cummings...............
Evan Slavitt...........................
Kathleen M. Kelly................
Keith Thomas.......................
Peter Venuto.........................
S. Willing King .....................

Age
67
66
61
59
63
62
64
54

Position
Chief Executive Officer and President
Senior Vice President and Chief Technology Officer
Executive Vice President, Chief Financial Officer, and Treasurer
Senior Vice President, General Counsel, and Secretary
Senior Vice President of Human Resources
Senior Vice President of Corporate Development
Senior Vice President of Sales
Senior Vice President of Tantalum Products

John Sarvis

Chief Executive Officer and President since April 2015. Chairman of the Board since 2016. Vice President of Ceramic Products
from 2005 to 2015. Divisional Vice President – Ceramics Division from 1998 to 2005. Prior to 1998, held various Marketing
and Operational positions. Employed by the Company since 1973.

John Lawing

Senior Vice President and Chief Technology Officer since 2015. Vice President and Chief Technology Officer from April 2014
to 2015. President and Chief Operating Officer from 2013 to March 2014. Vice President of Advanced Products from 2005 to
April 2013. Divisional Vice President of Advanced Products from 2002 to 2005 and Divisional Vice President of Leaded
Products
in Engineering, Technical, Operational, and Plant
from 1997 to 2002. Prior
management. Employed by the Company since 1981.

to 1997, held positions

Kurt P. Cummings

Executive Vice President since 2016. Chief Financial Officer and Treasurer since 2000. Senior Vice President from 2015 to 2016.
Vice President from 2000 to 2015. Secretary from 1997 to 2016. Corporate Controller from 1992 to 2000. Prior to 1992,
Partner with Deloitte & Touche LLP.

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Evan Slavitt
Senior Vice President, General Counsel and Secretary since 2016. Vice President of Business and Legal Affairs from 2007 to
2016. Trial lawyer in private practice in Massachusetts from 1987 to 2006. Assistant United States Attorney for the District of
Massachusetts from 1983 to 1987. Trial Attorney with the Antitrust Division of the U.S. Department of Justice from 1981 to
1983.

Kathleen M. Kelly

Senior Vice President of Human Resources since 2015. Vice President of Human Resources from 2010 to 2015. Vice President
of Administration from 2007 to 2010. Prior to the acquisition of American Technical Ceramics by the Company in 2007, served
as Vice President – Administration and as Corporate Secretary of American Technical Ceramics from November 1989.

Keith Thomas

Senior Vice President of Corporate Development since 2016. Senior Vice President of Kyocera Electronic Devices from 2015
to 2016. President of Kyocera Electronic Devices from 2004 to 2016. Vice President of Kyocera Developed Products from
2001 to 2004. Divisional Vice President of Kyocera Developed Products from 1992 to 2001. Employed by the Company since
1980.

Peter Venuto

Senior Vice President of Sales since 2015. Vice President of Sales from 2009 to 2015. Vice President of North American and
European Sales from 2004 to 2009. Vice President of North American Sales from 2001 to 2004. Divisional Vice President of
Strategic Accounts from 1998 to 2000. Director of Strategic Accounts from 1990 to 1997. Director of Business Development
from 1987 to 1989. Employed by the Company since 1987.

S. Willing King

Senior Vice President of Tantalum Products since 2015. Vice President of Tantalum Products from 2013 to 2015. Deputy
General Manager of Tantalum Products from 2012 to 2013. Vice President of Product Marketing from 2004 to 2012. Director
of Product Marketing from 2000 to 2004. Prior to 2000, held positions in Technical Service, Sales, and Marketing. Employed by
the Company since 1984.

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 us or on our behalf, may contain “forward-looking” information within the meaning of the Private Securities Litigation
Reform Act of 1995. Such statements involve a number of risks, uncertainties, and contingencies, many of which are beyond
our control, which may cause actual results, performance, or achievements to differ materially from those anticipated.

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

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

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

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

Our industry is intensely competitive, and prices for existing products tend to decrease over their life cycle. To remain

competitive, we must achieve continuous cost reductions through process and material improvements. We must also be in a
position to minimize our customers’ inventory financing costs and to meet their other goals for supply chain management. In
addition, as a result of our efforts to streamline manufacturing and logistics operations and to enhance operations in lower
operating cost regions we have incurred restructuring costs in the past and are likely to incur restructuring costs in the future in
response to competitive pressures. If we are unsuccessful in implementing restructuring or other cost reduction plans, we may
experience disruptions in our operations and incur higher ongoing costs, which may adversely affect our sales levels, financial
condition, and operating results.

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

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

Our global operations subject us to many different and complex laws and rules

Due to our global operations, we are subject to many laws governing international relations (including but not limited to the
Foreign Corrupt Practices Act and the U.S. Export Administration Act); which prohibit improper payments to government
officials and restrict where and how we can do business, what information or products we can supply to certain countries, and
what information we can provide to a non-U.S. government. Although we have procedures and policies in place that should
mitigate the risk of violations of these laws, there is no guarantee that they will be sufficiently effective. If, and when we acquire
new businesses we may not be able to ensure that the pre-existing controls and procedures meant to prevent violations of the
rules and laws were effective, and we may not be able to implement effective controls and procedures to prevent violations
quickly enough when integrating newly acquired businesses. Acquisitions of new businesses in new foreign jurisdictions may
also subject us to new regulations and laws, and we may face difficulties ensuring compliance with these new requirements.

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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.
Competitors include large, diversified companies, some of which have substantial assets and financial resources, as well as
medium to small companies. There can be no assurance that additional competitors will not enter into our existing markets, nor
can there be any assurance that we will be able to compete successfully against existing or new competition.

We may not have adequate facilities to satisfy future increases in demand for our products

Our business is cyclical and in periods of a rising economy, we may experience intense demand for our products. During
such periods, we may have difficulty expanding our manufacturing to satisfy demand. Factors that could limit such expansion
include delays in procurement of manufacturing equipment, shortages of skilled personnel, and physical constraints on expansion
of our facilities. If we are unable to meet our customers' requirements and our competitors sufficiently expand production, we
could lose customers and/or market share. These losses could have an adverse effect on our financial condition and results of
operations. Also, capacity that we add during upturns in the business cycle may result in excess capacity during periods when
demand for our products recedes, resulting in inefficient use of capital which could also adversely affect us.

If we are unable to attract and retain qualified personnel, especially our design and technical personnel, we may not
be able to execute our business strategy effectively.

Our future success depends on our ability to retain, attract and motivate qualified personnel, including our management,
sales and marketing, finance, and especially our design and technical personnel. As the source of our technological and product
innovations, our design and technical personnel represent a significant asset. Any inability to retain, attract or motivate such
personnel could have a material adverse effect on our business and results of operations.

We must continue to develop new products and technology to remain competitive

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

In addition to our own research and development initiatives, we may invest in technology start-up enterprises, in which we
may acquire a controlling or non-controlling interest but whose technology would be available to be commercialized by us.
There are numerous risks in investments of this nature, including the limited operating history of such start-up entities, their
need for capital, their limited or absence of production experience, as well as the risk that their technologies may prove ineffective
or fail to gain acceptance in the marketplace. There can be no assurance that our current and future investments in start-up
enterprises will prove successful.

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 market prices. Our
results of operations may be adversely affected if we have difficulty obtaining these raw materials, our key suppliers experience
financial difficulties, the quality of available raw materials deteriorates, or there are significant price increases for these raw

- 15 -

materials. For example, the prices for tantalum, platinum, silver, nickel, gold, copper, palladium, and other raw materials that we
use in the manufacture of our products are subject to fluctuation and have experienced significant variability in the past. Our
inability to recover increased costs through increased sales prices could have an adverse impact on our results of operations. For
periods in which the prices for these raw materials rise, we may be unable to pass on the increased cost to our customers, which
would result in decreased sales margins for the products in which they are used. For periods in which sales margins are declining,
we may be required, as has occurred in the past, to write down our inventory carrying cost of these raw materials and products.
Depending on the extent of the difference between market price and our carrying cost, the write-down could have a significant
adverse effect on our results of operations.

We resell products manufactured by Kyocera, as well as other component and interconnect product manufacturers. Should
these manufacturers experience difficulties supplying the products that we resell, or such suppliers use other channels to market
their products (see “Business; Products” in Item 1 elsewhere in this Form 10-K for additional information regarding changes in
Kyocera sales channels), 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,
without limitation, that sales can be negatively impacted on a short-term basis because of changes in distributor inventory levels;
these changes may be unrelated to the purchasing trends by the end customer. In the past, we have gone through cycles of
inventory correction as distributors increase or decrease their supply chain inventories based upon their anticipated market needs
and economic conditions.

Our backlog is subject to customer cancellation

We generally do not obtain firm,

long-term purchase commitments from our customers. Uncertain economic and
geopolitical conditions have resulted in, and may continue to result in, some of our customers delaying the delivery of products
that we manufacture for them and placing purchase orders for lower volumes of products than previously anticipated. Many of
the orders that comprise our backlog may be canceled by our customers without penalty. Our customers may on occasion, order
components from multiple sources to ensure timely delivery when delivery lead times are particularly long and product delivery
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 that will ultimately be made. Our results of operations could be adversely impacted if customers cancel a material
portion of orders in our backlog.

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

From time to time, we may make strategic acquisitions of other companies or businesses as we believe such acquisitions can
help to position us to take advantage of growth opportunities. Such acquisitions could introduce significant risks and
uncertainties, including risks related to integrating the acquired businesses and achieving benefits from the acquisitions. More
particularly, risks and uncertainties of an acquisition strategy could include: (1) difficulties in integrating newly-acquired
businesses and operations in an efficient and effective manner; (2) challenges in achieving strategic objectives, cost savings, and
other benefits from acquisitions; (3) risk that markets do not evolve as anticipated and that the technologies acquired do not
prove to be those needed to be successful in those markets; (4) potential loss of key employees of the acquired businesses; (5)
risk of diverting the attention of senior management from our operations; (6) risks of entering new markets in which we have
limited experience; (7) risks associated with integrating financial reporting and internal control systems; (8) difficulties in
expanding information technology systems and other business processes to accommodate the acquired businesses; (9) future
impairments of goodwill and other intangible assets of an acquired business; (10) unanticipated legal and regulatory issues in the
jurisdictions of the acquired business; (11) liabilities for activities of the acquired businesses, including environmental, tax, and
other known and unknown liabilities; and (12) additional costs related to plant closures, employee terminations, etc. could be
incurred to create operating inefficiencies for AVX and a newly acquired entity.

- 16 -

Changes in our environmental liability and compliance obligations may adversely affect our operations or financial
condition

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

Changes in regulatory compliance obligations may adversely affect our operations

The Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank” Act), signed into law on July 21,
2010, includes Section 1502, which required the SEC to adopt additional disclosure requirements related to the source of certain
“conflict minerals” for issuers for which such “conflict minerals” are necessary to the functionality or production of a product
manufactured, or contracted to be manufactured, by that issuer. The SEC issued a final rule on August 22, 2012. The minerals
covered by the rules are commonly referred to as “3TG” and include tin, tantalum, tungsten, and gold. We use many of these
materials in our production processes. The rule requires companies to perform due diligence, disclose, and report whether or
not such minerals originate from the DRC and adjoining countries. In addition, we will incur additional costs to comply with
the disclosure requirements, including costs related to determining the source of any of the relevant minerals and metals used in
our products. Global supply chains are complicated with multiple layers and suppliers between the mine and the final product.

Historically, and prior to our participation in “Solutions for Hope,” we had a policy of not using tantalum sourced from the
DRC or any other area in which insurgents or similar groups benefit from the sale of minerals. We continue to conduct extensive
supply chain investigations to reduce risk and support supply chain sustainability in the region using the OECD guiding
principles. AVX was the first in its industry to validate a “closed tantalum pipe” process, assuring all tantalum products contain
only tantalum from smelters that have been independently verified under the Conflict Free Smelter program in accordance with
the principles of the Dodd-Frank legislation and the current OECD guidelines.

Since December 2011, AVX has only sourced tantalum powder and wire used in its tantalum capacitors from smelters that
are compliant with the EICC/GeSI conflict-free smelter program. In 2012, AVX began using Validated Conflict-Free Tantalum,
which comes from verified sources in the DRC and surrounding countries. During 2016 and in the spirit of continuous
improvement envisioned and enshrined by the OECD Due Diligence guidance, AVX continues to improve supply chain
sustainability and reduce compliance cost by field-testing a new alternate traceability platform (“BSP”) and proof of concept of
a geological science technique for mineral matching (Geological Passporting) in the region. The result of the BSP pilot
demonstrated that a new cost model is possible using technology for the reporting, analysis, chain of custody and Geo
Passporting for validation. Please refer to the Solutions for Hope website for more information.

Our continued efforts affirm our commitment to supply conflict-free minerals to our customers and to comply fully with
the OECD guidelines and SEC regulations. The implementation of Rule 1502 has not had a material adverse effect on our ability
to source raw materials or manufacture products containing the “3TG” metals. We filed our most recent Form SD with the
SEC on May 27, 2016.

- 17 -

We use significant amounts of electrical energy and processed ores in our production processes. Although its status is
uncertain, the Kyoto Protocol is an international agreement that purports to set binding targets for signatory industrialized
countries for reducing greenhouse gas emissions. Further, a number of governments or governmental bodies have introduced
or are contemplating legislative and regulatory change in response to the potential impacts of climate change that would limit
and reduce greenhouse gas emissions. Any significant, sustained increase in energy costs could result in increases in our capital
expenditures, operating expenses, and costs of important raw materials resulting in an adverse effect on our results of operations
and financial condition.

The potential physical impacts of climate change on our operations are highly uncertain, and will be particular to the
geographic circumstances. These effects may adversely influence the cost, production, and financial performance of our
operations.

Brexit adds additional uncertainty in one of our key markets

On June 23, 2016, the United Kingdom (U.K.) held a referendum in which voters approved an exit from the E.U., commonly
referred to as “Brexit” and the U.K. Prime Minister has delivered a notice of withdrawal to the E.U. As a result, the British
government will negotiate the terms of the U.K.’s future relationship with the E.U. Although it is unknown what those terms
will be, it is possible that there will be greater restrictions on imports and exports between the U.K. and E.U. countries and
increased regulatory complexities. These changes may adversely affect our operations and financial results.

Our results may be negatively affected by foreign currency exchange rates

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

A significant portion of our cash, cash equivalents, and short-term investments are held by our foreign subsidiaries

We generate a significant amount of cash and profits at our foreign subsidiaries. We expect that cash and profits generated
by our foreign subsidiaries will continue to be reinvested indefinitely. However, liquidity requirements could necessitate transfers
of existing cash balances between our subsidiaries or to the United States that may be subject to restrictions or result in
unfavorable tax or earnings consequences. Approximately 86% of our cash and investment securities are held by our foreign
subsidiaries. While we intend to use cash held outside the United States to fund our international operations and growth, if we
encounter a significant need for liquidity domestically or at a particular location that we cannot fulfill through other internal or
external sources, we may experience unfavorable tax and earnings consequences due to cash transfers. These adverse
consequences would occur, for example, if the transfer of cash into the United States is taxed and no offsetting foreign tax credit
is available to offset the U.S. tax liability, resulting in lower earnings. We do not provide for U.S. taxes on the undistributed
earnings of foreign subsidiaries that are considered to be reinvested indefinitely.

- 18 -

Our operating results may be adversely affected by foreign operations

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

Our products are subject to stringent specifications and operating tolerances

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

Our ability to maintain our competitiveness depends, in part, on our maintaining the proprietorship of our technology

We will protect our proprietary rights as long as our proprietary technologies are maintained as trade secrets or are covered
by recognized patents. We properly apply for, and will continue to apply for, patents covering our technologies. Each patent
application may not result in a successful patent issuance. Competitors may develop similar, alternative, or new technologies,
which reduce the positive impact of our patents. In addition, competitors may challenge our patents, as has happened in the
past, or seek to invalidate them, or operate in certain countries who do not recognize our legal patent rights. The protection of
intellectual property involves multiple legal and factual issues, which makes the process difficult and potentially expensive.

We will vigorously defend our patent and intellectual property rights and may be involved in future litigation alleging our
infringement of such rights from others. We will seek multiple remedies to resolve these claims, including the normal practice
of the offering or purchasing of licenses in an acceptable manner. An unfavorable outcome regarding these rights could have an
adverse effect on our business and 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-term
investments, future declines in the market values of such investments could have an adverse effect on our financial condition
and operating results. Given the global nature of our business, we have investments both domestically and internationally.
Additionally, a portion of our overall investment portfolio includes investment securities in the financial sector. If the issuers of
such investments default on their obligations or their credit ratings are negatively impacted by liquidity, credit deterioration or
losses, poor financial results, or other factors, the value of our cash equivalents, short-term investments, and long-term
investments could decline and have an adverse effect on our financial condition and operating results. In addition, our ability to
find investments that are both safe and liquid and that provide a reasonable return may be impaired. This could result in lower
interest income and/or higher other-than-temporary impairments.

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

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

- 19 -

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

Returns on pension and retirement plan assets and interest rate changes could affect our operating results

The funding position of our defined benefit pension plans is influenced by the performance of the financial markets, and
the discount rate used to calculate our pension obligations for funding and expense purposes. In the past, declines in the financial
markets have negatively affected the value of the assets in our defined benefit pension plans. In addition, lower discount rates
for actuarial purposes may result in increased pension contributions and expense.

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

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

As part of the process of preparing our consolidated financial statements, we are required to estimate our tax assets and
liabilities in each of the jurisdictions in which we operate. This process involves management estimating the actual current tax
liabilities together with assessing temporary differences resulting from different treatment of items for tax and accounting
purposes. These differences result in deferred tax assets and liabilities that are included within our consolidated balance sheet.

We assess the likelihood that our deferred tax assets will be recoverable as a result of future taxable income and, to the

extent we believe that recovery is not 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,
primarily consisting of certain net operating losses carried forward before they expire. The valuation allowances are based on
our estimates of future taxable income over the periods that our deferred tax assets will be recoverable.

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

If we are unable to generate sufficient future taxable income in certain jurisdictions, or if there is a significant change in the
actual tax rates or the time period within which the underlying temporary differences become taxable or deductible, we could
be required to increase our valuation allowances resulting in an increase in our effective tax rate and have an adverse impact on
future operating results.

- 20 -

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

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

Third-party service providers, such as distributors, subcontractors, and vendors have access to certain portions of our
sensitive data. In the event that these service providers do not appropriately protect our data, the result could be a security
breach or loss of our data. Any such loss of data by our third-party service providers could have a material adverse impact on
our business and results of operations.

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

We are also in the process of converting certain information technology networks and systems and consolidating certain
global systems. If such projects fail, or if unexpected technical difficulties arise, our operations and financial systems could be
adversely affected. Further, we could incur additional costs or require additional technical support to resolve such difficulties.

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

The following factors beyond our control could adversely affect 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 affect
our production capabilities or our customers.

Unforeseen interruptions to our business with our significant customers and suppliers resulting from labor strikes,
financial instabilities, computer malfunctions, environmental disruptions, natural disasters, inventory excesses or other
unforeseen events or circumstances.

We operate in a continually changing business environment and new factors emerge from time to time. Other unknown and
unpredictable factors also could have either adverse or positive effects on our future results of operations or financial condition.

Item 1B. Unresolved Staff Comments

None.

- 21 -

Item 2.

Properties

Our fixed assets include manufacturing plants, warehouses, and machinery and equipment. In many instances, the machinery
and equipment have been manufactured to our specifications and/or have special adaptations. Our plants, warehouses,
machinery, and equipment are in good operating condition and are well maintained. Substantially all of our facilities are in regular
use. We consider the present level of fixed assets, along with planned capital expenditures, as suitable and adequate for our
operations in the current business environment. Our capital expenditures for plant and equipment were $26.6 million in fiscal
2015, $48.1 million in fiscal 2016 and $66.3 million in fiscal 2017.

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

AVX manufactures products worldwide to support the Commercial, Automotive, Aerospace and Medical markets. The
appropriate ISO standard based on market requirements are in place and include but are not limited to ISO9001, AS9100 and
ISO13485.

Virtually all of our manufacturing, research and development, and warehousing facilities could at any time be involved in
the manufacturing, sale, or distribution of passive components (“PC”), interconnect products (“CP”) or resale products (“RP”).
The following is a list of our facilities and related information.

Location
UNITED STATES

Fountain Inn, SC
Myrtle Beach, SC

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

NON U.S.
Tianjin, China
San Salvador, El Salvador
Saint-Apollinaire, France
Lanskroun, Czech Republic
Lanskroun, Czech Republic
Uherske Hradiste, Czech Republic
Uherske Hradiste, Czech Republic
Bzenec, Czech Republic
Penang, Malaysia
Coleraine, N. Ireland
Betzdorf, Germany
Betzdorf, Germany
Juarez, Mexico
Jerusalem, Israel
Adogawa, Japan
Hong Kong
Hong Kong

Approximate
Square
Footage

Type of
Interest

Description
of Use

370,000
150,000

113,000
100,000
73,600
72,000
71,000
25,000

520,000
420,000
322,000
542,000
75,000
336,000
80,000
200,000
190,000
185,000
111,000
157,000
218,000
88,000
206,000
30,000
21,000

Owned
Owned

Owned
Owned
Owned
Owned
Owned
Leased

Headquarters/Manufacturing/Warehouse/Research –
PC, CP, RP
Manufacturing — PC

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

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

Owned
Owned
Leased
Owned
Leased
Owned
Leased Warehouse — PC, CP, RP
Owned
Owned
Owned
Owned
Leased
Owned
Leased
Owned
Owned Warehouse — PC, CP, RP
Leased Warehouse/Office – PC, CP, RP

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

- 22 -

In addition to the foregoing, we lease a number of sales offices throughout the world. We do not anticipate difficulty in

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 certain

environmental clean-up sites.

On April 25, 2013, 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. AVX Corporation. This case alleged that certain AVX products infringe
on one or more of six Greatbatch patents. On January 26, 2016, the jury returned a verdict in favor of the plaintiff in the first
phase of a segmented trial and found damages to Greatbatch in the amount of $37.5 million. AVX is reviewing this initial verdict,
consulting with its legal advisors on what action AVX may take in response, and continuing to litigate the rest of the case.

On September 2, 2014, a subsidiary of AVX, American Technical Ceramics (“ATC”), was named as a defendant in a patent
infringement case filed in the United States District Court of the District of Delaware captioned Presidio Components, Inc. v.
American Technical Ceramics Corp. This case alleged that certain ATC products infringe on a Presidio patent. On April 18, 2016,
the jury returned a verdict in favor of the plaintiff and found damages to Presidio in the amount of $2.2 million. On August 17,
2016, the court issued a permanent injunction prohibiting ATC from manufacturing or selling the related products after
November 16, 2016 and awarded Presidio damages related to ATC’s sale of such products from February 21, 2016 through
November 16, 2016. Subsequently, on October 21, 2016, the Federal Circuit Court granted AVX’s request for a stay of the
permanent injunction whereby AVX was allowed to continue to sell the disputed product until March 17, 2017 to anyone who
was a customer prior to June 17, 2016. Any sales subsequent to November 16, 2016 pursuant to the stay of the permanent
injunction are subject to court mandated intellectual property damages for each product sold. Accordingly, in addition to the
$2.2 million jury verdict award above, we recorded during fiscal year 2017 an estimated reserve for damages on all pre- and post-
verdict sales of product subject to that litigation in the event that the verdict withstands future challenges. As of March 31, 2017,
we have reserved $34.9 million related to the pre- and post-verdict sales of such product. On September 1, 2016 we filed an
appeal with the Federal Circuit to appeal this verdict.

As of March 31, 2017, we had total reserves of $74.6 million with respect to the two intellectual property cases discussed
above. The amounts recorded are based on estimated outcomes. Amounts recorded are reviewed periodically and adjusted to
reflect additional information that becomes available. Accordingly, these costs could differ from our current estimates.

During calendar year 2014, AVX was named as a co-defendant in a series of cases filed in the United States and in the
Canadian provinces of Quebec, Ontario, British Columbia, Saskatchewan and Manitoba alleging violations of United States,
state and Canadian antitrust laws and asserting that AVX and numerous other companies were participants in alleged price-
fixing in the capacitor market. The cases in the United States were consolidated into the Northern District of California on
October 2, 2014. Some plaintiffs have broken off from the United States class action and filed actions on their own. These cases
are still at their initial stages. AVX believes it has meritorious defenses and intends to vigorously defend the cases.

We are involved in other disputes and legal proceedings arising in the normal course of business. While we cannot predict
the outcome of these other disputes or proceedings, we believe, based upon a review with legal counsel, that none of these
disputes or proceedings will have a material impact on our financial position, results of operations, comprehensive income (loss),
or cash flows. However, we cannot be certain of the eventual outcome in these or other matters that may arise and their potential
impact on our financial position, results of operations, comprehensive income (loss), or cash flows.

Item 4. Mine Safety Disclosures

Not applicable.

- 23 -

PART II

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

Issuer Purchases of Equity Securities

Market for Common Stock

Our common stock is listed on the New York Stock Exchange and trades under the symbol “AVX.” At May 16, 2017, there
were 196 holders of record of the Company's common stock. In addition, there were numerous beneficial holders of the
common stock, representing persons whose stock is held in nominee or “street name” accounts through brokers. The following
table presents the high and low sale prices for our common stock on the New York Stock Exchange and the dividends declared
per common share for each quarter for the fiscal years ended March 31, 2016 and March 31, 2017. On May 24, 2017, our Board
of Directors declared a $0.11 dividend per share of common stock with respect to the quarter ended March 31, 2017. Future
dividends, if any, will be determined by the Company’s Board of Directors and may depend on the Company’s future profitability
and anticipated operating cash requirements.

First Quarter
Second Quarter
Third Quarter
Fourth Quarter

Common Stock Price Range

2016

2017

High

Low

High

Low

$

$

14.96
13.67
14.32
12.68

$

13.42
12.00
11.96
10.43

$

14.24
14.14
16.07
16.65

11.77
13.04
13.58
15.38

Dividends Declared
Per Share

2016

2017

$

$

0.105
0.105
0.105
0.105

0.105
0.110
0.110
-

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

The American Stock Transfer and Trust Company, LLC
6201 15th Avenue
Brooklyn, NY 11219
1-800-937-5449

Stock Performance Graph

The following chart shows, from the end of fiscal year 2012 to the end of fiscal year 2017, changes in the value of $100
invested in each of the Company’s common stock, Standard & Poor’s 500 Composite Index, and a peer group consisting of
three companies whose businesses are representative of our business segments. The companies in the peer group are Kemet
Corporation and Vishay Intertechnology, Inc. Fairchild Semiconductor International, Inc. was dropped from the peer group
since it was acquired by another company and delisted in 2016.

- 24 -

AVX - NYSE
S & P 500
Peer Group

3/31/12

$
$
$

100
100
100

$
$
$

Cumulative Total Return
3/31/13

3/31/14

3/31/15

3/31/16

3/31/17

92
114
103

$
$
$

105
139
111

$
$
$

117
157
102

$
$
$

107
159
88

$
$
$

143
187
142

Purchases of Equity Securities by the Issuer

On October 17, 2007, the Board of Directors of the Company authorized the repurchase of up to 5,000,000 shares of our
common stock from time to time on the open market. The repurchased shares are held as treasury stock and are available for
general corporate purposes. As of March 31, 2017, there were 3,067,074 shares that may yet be repurchased under this program.

- 25 -

Item 6.

Selected Financial Data

The following table sets forth selected consolidated financial data for AVX for the five fiscal years ended March 31, 2017.
The selected consolidated financial data for the five fiscal years ended March 31, 2017 are derived from AVX’s audited
consolidated financial statements. The consolidated financial data set forth below should be read in conjunction with AVX’s
consolidated financial statements and the notes thereto and “Management’s Discussion and Analysis of Financial Condition and
Results of Operations” included elsewhere in this Form 10-K.

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

OPERATING RESULTS DATA:
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Legal and environmental charges
Profit (loss) from operations
Interest income
Other, net
Income (loss) before income taxes
Provision for (benefit from) income taxes
Net income (loss)

Income (loss) per share:

Basic
Diluted

Weighted average common shares outstanding:

Basic
Diluted

Cash dividends declared per common share

BALANCE SHEET DATA:
Working capital
Total assets
Stockholders' equity

OTHER DATA:
Capital expenditures
Research, development and engineering
expenses

2013

$ 1,414,400
1,150,630
263,770
117,365
266,250
(119,845)
7,021
(498)
(113,322)
(49,010)
(64,312)

$

Fiscal Year Ended March 31,
2015

2014

2016

$ 1,442,604
1,163,770
278,834
119,670
-
159,164
4,899
(706)
163,357
36,320
127,037

$

$ 1,353,228
1,024,659
328,569
115,820
-
212,749
4,554
1,296
218,599
(7,272)
225,871

$

$ 1,195,529
906,460
289,069
119,767
45,318
123,984
5,003
3,165
132,152
30,617
101,535

$

2017

$ 1,312,661
1,027,906
284,755
117,598
3,600
163,557
7,381
4,011
174,949
49,164
125,785

$

$
$

$

(0.38)
(0.38)

169,124
169,124
0.31

$
$

$

0.75
0.75

168,473
168,658
0.37

$
$

$

1.34
1.34

168,148
168,402
0.41

$
$

$

0.61
0.60

167,797
167,961
0.42

$
$

$

0.75
0.75

167,506
167,837
0.33

2013

2014

As of March 31,
2015

2016

2017

$ 1,614,656
2,601,995
1,972,930

$ 1,606,789
2,384,988
2,047,685

$ 1,478,243
2,459,015
2,131,963

$ 1,506,589
2,409,819
2,177,106

$ 1,620,337
2,477,413
2,216,479

2013

Fiscal Year Ended March 31,
2015

2014

2016

2017

$

43,705
26,240

$

26,805
26,240

$

26,599
25,390

$

48,103
28,300

$

66,288
30,946

- 26 -

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

Overview

AVX Corporation is a leading worldwide manufacturer, supplier, and reseller 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 all types 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, Tantalum Components, Advanced Components, Interconnect, and Kyocera Electronic Devices.
These product lines are organized into three reportable segments: Passive Components, Interconnect, and KED Resale.

Consolidated revenues for the fiscal year ended March 31, 2017 were $1,312.7 million with net income of $125.8 million
compared to consolidated revenues of $1,195.5 million with net income of $101.5 million for the fiscal year ended March 31,
2016. During fiscal 2017, we saw an increase in sales due to a number of factors, including, higher volumes across all of our
product groups: Ceramic Components, Interconnect, and KED Resale products, resulting from improved global market
conditions reflective of higher overall demand, primarily in the automotive, cellular telecommunications, and industrial markets.
In addition, approximately $6.3 million of this increase in revenues is partially a result of the currency fluctuations throughout
the year which we believe may have been influenced by the announcement of the vote on the Referendum of the United
Kingdom’s (U.K.) Membership of the European Union (E.U.) (referred to as “Brexit”) as well as the impact of other geopolitical
issues which have resulted in a stronger Japanese Yen against the U.S. Dollar and weaker European currencies against the U.S.
Dollar.

Profit from operations for the fiscal year ended March 31, 2017 includes post judgment charges of $34.9 million related to
previously disclosed intellectual property damages awards resulting from litigation with respect to a patent infringement case
filed in the United States District Court for the District of Delaware by Presidio Components, Inc. (“Presidio”). Net sales for
the fiscal year ended March 31, 2017 includes $21.4 million from increased sales prices related to the affected products which
have the effect of partially offsetting the effect of court awarded damages on all pre- and post-verdict sales of the product subject
to the intellectual property damages awards, resulting in a net impact on profit from operations of $13.5 million for the current
fiscal year.

Additionally, profit from operations for the fiscal year ended March 31, 2017 reflects a charge of $3.6 million related to

estimated environmental remediation costs resulting from legacy environmental issues at an inactive property.

Profit from operations for the fiscal year ended March 31, 2016 reflects charges of $45.3 million, of which $37.8 million is
related to amounts awarded in patent infringement cases and $7.5 million is related to the settlement of certain litigation involving
legacy environmental issues.

In fiscal 2017, we generated $195.0 million of cash from operating activities. We used cash generated from operations to
fund $28.3 million of general working capital requirements and $66.3 million of property and equipment purchases. We enhanced
shareholder value as we spent $4.8 million to repurchase shares of our common stock on the market and paid dividends of $72.0
million during fiscal year 2017. Our financial position remains strong with approximately $1.1 billion of cash, cash equivalents,
and securities investments and no borrowings as of March 31, 2017.

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

- 27 -

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

Outlook

Near-Term:

With uncertain global geopolitical and economic conditions, it is difficult to quantify expectations for fiscal 2018. Near-term
results for us will depend on the impact of the overall global geopolitical and economic conditions and their impact on
telecommunications,
information technology hardware, automotive, consumer electronics, and other electronic markets.
Looking ahead, visibility is low and forecasting is a challenge in this uncertain and volatile market. We expect to see typical sales
price pressure in the markets we serve due to competitive activity. In response to anticipated market conditions, we expect to
continue to focus on cost management and product line rationalization to maximize earnings potential. We also continue to
focus on process improvements and enhanced production capabilities in conjunction with our focus on the sales of value-added
electronic components to support today’s advanced electronic devices. If current global geopolitical and economic conditions
worsen, the overall impact on our customers as well as end user demand for electronic products could have a significant adverse
impact on our near-term results.

Kyocera notified AVX pursuant to the Products Supply and Distribution Agreement in December 2016 of its intent,
effective January 1, 2018, to market its manufactured passive and interconnect products globally using Kyocera’s sales force
rather than continuing to have AVX resell such products in the Americas, Europe and Asia. Kyocera will pay commissions to
AVX on sales by Kyocera, in the applicable territories, of products designed into customer applications by AVX prior to January
1, 2018 of 2.0% in calendar year 2018, 1.5% in calendar year 2019, and 1.0% in calendar year 2020. Sales of Kyocera resale
products were $318.9 million and related operating profit was $17.1 million for the fiscal year ended March 31, 2017.

AVX notified Kyocera pursuant to the Products Supply and Distribution Agreement in February 2017 of its intent, effective
April 1, 2018, to market its manufactured products in Japan using AVX’s sales force rather than continuing to have Kyocera
resell such products in this territory. AVX will pay commissions to Kyocera on sales by AVX, in the applicable territory, of
products designed into customer applications by Kyocera prior to April 1, 2018 of 2.0% in fiscal year 2019, 1.5% in fiscal year
2020, and 1.0% in fiscal year 2021. Sales of AVX resale products by Kyocera were $25.9 million for the fiscal year ended March
31, 2017.

Long-Term:

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

- 28 -

Results of Operations

Year Ended March 31, 2017 compared to Year Ended March 31, 2016

Net sales for the fiscal year ended March 31, 2017 were $1,312.7 million compared to $1,195.5 million for the fiscal year

ended March 31, 2016.

The table below represents product group revenues for the fiscal years ended March 31, 2015, 2016, and 2017.

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

Total Passive Components

Interconnect
KCP Resale Connectors
KDP and KCD Resale
Total KED Resale
Total Revenue

2015

Fiscal Year Ended March 31,
2016

2017

$

$

202,719
355,974
359,315
918,008
134,610
70,741
229,869
300,610
1,353,228

$

$

176,502
311,888
333,693
822,083
111,609
23,751
238,086
261,837
1,195,529

$

$

188,568
314,723
372,279
875,570
118,163
30,027
288,901
318,928
1,312,661

Passive Component sales were $875.6 million for the fiscal year ended March 31, 2017 compared to $822.1 million during
the fiscal year ended March 31, 2016. The sales increase in Passive Components product sales was driven by increased volume
across all of our electronic component groups as a result of improved global market conditions compared to the same period
last year. Our Ceramic Components sales improvement is primarily due to increased activity in the cellular telecommunications
and automotive markets in addition to our focus on the sale of higher value capacitance components. Much of the sales increase
in our Advanced Components was primarily attributable to the accelerated sales, including $21.4 million from increased sales
prices, of certain advanced ceramic capacitors at the request of our customers. These advanced ceramic capacitors were the
subject of intellectual property litigation discussed below. The increase in sales of our Tantalum Components is primarily driven
by increased demand in the telecommunications and industrial markets.

Total connector sales, including AVX Interconnect products and KCP Resale Connectors, were $148.2 million in the fiscal
year ended March 31, 2017 compared to $135.4 million during the fiscal year ended March 31, 2016. This increase is attributable
to increased demand in the U.S. and European automotive and industrial markets.

KDP and KCD Resale sales were $288.9 million for the fiscal year ended March 31, 2017 compared to $238.1 million
during the fiscal year ended March 31, 2016. This increase is primarily attributable to higher demand from our cellular device
customers, in addition to a favorable currency impact on reported revenues when compared to the same period last year as the
Japanese Yen strengthened against the U.S. Dollar.

Our sales to independent electronic distributors represented 44.5% of total net sales for the fiscal year ended March 31,
2017, compared to 45.0% for fiscal year ended March 31, 2016. Overall, distributor sales increased when compared to the same
period last year as distributors increased order activity and inventory intake during the year. This increase is reflective of the
distributors’ customer demand, a more balanced inventory pipeline and steadily improving market conditions. Our sales to
distributor customers involve specific ship and debit and stock rotation programs for which sales allowances are recorded as
reductions in sales. As a result of the increased distributors’ customer demand and a more balanced inventory pipeline, such
allowance charges decreased to $25.5 million, or 4.4% of gross sales to distributor customers, for the fiscal year ended March
31, 2017 compared to $29.4 million, or 5.5% of gross sales to distributor customers, for the fiscal year ended March 31, 2016.
Applications under such programs for fiscal years ended March 31, 2017 and 2016 were approximately $24.9 million and $31.5
million, respectively.

Geographically, compared to the prior fiscal year, regional sales as a percentage of total sales for the fiscal year ended March
31, 2017 remained relatively consistent in all regions. Sales in Asia increased to 44.1% of total sales, while sales in the Americas

- 29 -

decreased slightly to 29.1% and sales in Europe decreased to 26.8% of total sales. This compares to 41.6%, 30.0%, and 28.4%
of total sales for the Asian, American, and European regions in the prior year, respectively. As a result of the movement of the
U.S. dollar against certain foreign currencies, reported sales for the fiscal year ended March 31, 2017 were favorably impacted
by approximately $6.3 million when compared to the prior year.

Gross profit margin in the fiscal year ended March 31, 2017 decreased to 21.7% of sales, or $284.8 million, compared to a
gross profit margin of 24.2% of sales, or $289.1 million, in the fiscal year ended March 31, 2016. This overall decrease in dollars
and percent is primarily attributable to charges of $34.9 million related to sales of those advanced ceramic capacitors subject to
the intellectual property litigation discussed above, partially offset by $21.4 million from increased sales prices related to the
affected products. In addition, for the fiscal year ended March 31, 2017, the currency impact of the movement of the U.S. dollar
against certain foreign currencies unfavorably impacted our gross profit by approximately $3.0 million when compared to the
same period last year.

Selling, general, and administrative expenses for the fiscal year ended March 31, 2017 were $117.6 million, or 9.0% of net
sales, compared to $119.8 million, or 10.0% of net sales, for the fiscal year ended March 31, 2016. The overall decrease in these
expenses is primarily due to lower litigation costs partially offset by higher selling expenses resulting from the increase in sales
for the fiscal year ended March 31, 2017 when compared to the fiscal year ended March 31, 2016.

On September 2, 2014, a subsidiary of AVX, American Technical Ceramics (“ATC”), was named as a defendant in a patent
infringement case filed in the United States District Court of the District of Delaware captioned Presidio Components, Inc. v.
American Technical Ceramics Corp. This case alleged that certain ATC products infringe on a Presidio patent. On April 18, 2016,
the jury returned a verdict in favor of the plaintiff and found damages to Presidio in the amount of $2.2 million. On August 17,
2016, the court issued a permanent injunction prohibiting ATC from manufacturing or selling the related products after
November 16, 2016 and awarded Presidio damages related to ATC’s sale of such products from February 21, 2016 through
November 16, 2016. Subsequently, on October 21, 2016, the Federal Circuit Court granted AVX’s request for a stay of the
permanent injunction whereby AVX was allowed to continue to sell the disputed product until March 17, 2017 to anyone who
was a customer prior to June 17, 2016. Any sales subsequent to November 16, 2016 pursuant to the stay of the permanent
injunction are subject to court mandated intellectual property damages for each product sold. Accordingly, in addition to the
$2.2 million jury verdict award above, we recorded during fiscal year 2017 an estimated reserve for damages on all pre- and post-
verdict sales of product subject to that litigation in the event that the verdict withstands future challenges. As of March 31, 2017,
we have reserved $34.9 million related to the pre- and post-verdict sales of such product. On September 1, 2016, we filed an
appeal with the Federal Circuit to appeal this verdict.

Additionally, on January 26, 2016, in a patent infringement case filed in the United States District Court for the District of
Delaware captioned Greatbatch, Inc. v. AVX Corporation, the jury returned a verdict in favor of the plaintiff and found damages
to the plaintiff in the amount of $37.5 million, which was recorded in fiscal 2016. In addition, during the fiscal year ended March
31, 2017, we accrued a $3.6 million estimated charge related to new environmental remediation activities related to a legacy
environmental issue at a site referred to as the “Aerovox Site,” located in New Bedford, Massachusetts.

Profit from operations for the fiscal year ended March 31, 2017 increased $39.6 million to $163.6 million compared to

$124.0 million for the fiscal year ended March 31, 2016. This increase is a result of the factors above.

Other income increased $3.2 million to $11.4 million in fiscal 2017 compared to $8.2 million in fiscal 2016. This increase is
primarily attributable to foreign exchange gains resulting from currency fluctuations during the period in addition to a gain on
the sale of an idle facility of $1.6 million.

The tax rate for the fiscal year ended March 31, 2017 was 28.1% compared to 23.2% for the fiscal year ended March 31,
2016. For the fiscal year ended March 31, 2017, compared to the fiscal year ended March 31, 2016, the increase in the tax rate is
caused principally by an increase in our U.S. taxable income and an adverse U.S. federal audit adjustment, partially offset by
increased U.S. foreign tax credits and the release of the valuation allowance against deferred tax assets at a Japanese subsidiary.
Excluding discrete items, the tax rate for the fiscal year ended March 31, 2017 is 27.8% compared to 26.5% for the fiscal year
ended March 31, 2016.

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As a result of the factors discussed above, net income for the fiscal year ended March 31, 2017 was $125.8 million compared

to $101.5 million for the fiscal year ended March 31, 2016.

Year Ended March 31, 2016 Compared to Year Ended March 31, 2015

Net sales for the fiscal year ended March 31, 2016 were $1,195.5 million compared to $1,353.2 million for the fiscal year

ended March 31, 2015.

The table below represents product group revenues for the fiscal years ended March 31, 2014, 2015, and 2016.

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

Total Passive Components

Interconnect
KCP Resale Connectors
KDP and KCD Resale
Total KED Resale
Total Revenue

Fiscal Year Ended March 31,
2015

2014

2016

193,978
394,119
357,900
945,997
138,879
64,680
293,048
357,728
1,442,604

$

$

202,719
355,974
359,315
918,008
134,610
70,741
229,869
300,610
1,353,228

$

$

176,502
311,888
333,693
822,083
111,609
23,751
238,086
261,837
1,195,529

$

$

Passive Component sales were $822.1 million for the fiscal year ended March 31, 2016 compared to $918.0 million during
the fiscal year ended March 31, 2015. The sales decrease in Passive Components reflects a lower overall market demand across
most of our product market segments related to soft global economic conditions, the unfavorable impact on reported sales of
currency exchange as the U.S. dollar strengthened against certain foreign currencies and our focus on the sale of value added
and higher capacitance components with higher margin opportunities and lower sales volumes rather than higher volume
commodity components when compared to the fiscal year ended March 31, 2015. Lower sales is also reflective of our customers’
cautious inventory management programs during the fiscal year ended March 31, 2016.

Total connector sales, including AVX Interconnect products and KCP Resale Connectors, were $135.4 million in the fiscal
year ended March 31, 2016 compared to $205.4 million during the fiscal year ended March 31, 2015. This decrease was primarily
attributable to Kyocera’s decision to utilize their sales force rather than continuing to have AVX resell their connector products
in Asia. Kyocera notified AVX in February 2014 of its intent, effective April 1, 2015, to market its connector products in Asia
using Kyocera’s sales force rather than continuing to have AVX resell such products in Asia. Sales of Kyocera manufactured
connector products in Asia were $1.1 million and $47.5 million with operating profit of $0.4 million and $1.9 million for the
fiscal years ended March 31, 2016 and March 31, 2015, respectively. For more information regarding AVX’s relationship with
Kyocera, see “Relationship with Kyocera and Related Transactions” below. In addition, there was a negative impact on reported
sales resulting from the strength of the U.S. dollar when compared to the Japanese Yen and the Euro, partially offset by improved
volumes to our automotive customers.

KDP and KCD Resale sales were $238.1 million for the fiscal year ended March 31, 2016 compared to $229.9 million during
the fiscal year ended March 31, 2015. This increase is primarily attributable to higher demand from our telecommunications and
cellular device customers in the fiscal year ended March 31, 2016 partially offset by the unfavorable impact on reported sales of
the stronger U.S. dollar when compared to the Japanese Yen.

Our sales to independent electronic distributors represented 45.0% of total net sales for the fiscal year ended March 31,
2016, compared to 45.7% for fiscal year ended March 31, 2015. Overall, distributor activity as a percentage of sales decreased
slightly when compared to the same period in the prior year reflective of their cautious inventory management programs. Our
sales to distributor customers may involve specific ship and debit and stock rotation programs for which sales allowances are
recorded as reductions in sales. Such allowance charges decreased to $29.4 million, or 5.5% of gross sales to distributor
customers, for the fiscal year ended March 31, 2016 compared to $33.6 million, or 5.4% of gross sales to distributor customers,
for the fiscal year ended March 31, 2015. Applications under such programs for fiscal years ended March 31, 2016 and 2015
were approximately $31.5 million and $34.4 million, respectively.

- 31 -

Geographically, compared to the prior fiscal year, regional sales as a percentage of total sales for the fiscal year ended March
31, 2016 increased slightly in the Americas while decreasing slightly in Europe. Generally, all three geographic regions faced
similar market conditions. Our Asian market sales were impacted Kyocera’s aforementioned decision to utilize their sales force
rather than continuing to have AVX resell Kyocera manufactured connector products in this region. Sales in Asia remained
41.6% of total sales, while sales in the Americas increased slightly to 30.0% and sales in Europe decreased slightly to 28.4% of
total sales. This compares to 41.6%, 29.7%, and 28.7% of total sales for the Asian, American, and European regions in the prior
year, respectively. As a result of the strength of the U.S. dollar against certain foreign currencies, reported sales for the year
ended March 31, 2016 were unfavorably impacted by approximately $51 million when compared to the prior year.

Gross profit margin in the fiscal year ended March 31, 2016 decreased slightly to 24.2% of sales, or $289.1 million, compared
to a gross profit margin of 24.3% of sales, or $328.6 million, in the fiscal year ended March 31, 2015. This overall decrease in
dollars and percentage is primarily a result of lower sales volumes and lower selling prices reflective of soft demand in the global
marketplace when compared to the same period last year. The impact on gross margin due to lower selling prices was partially
offset by our focus on the sale of value added and higher capacitance passive components with better margin opportunities than
higher volume commodity components. Gross profit also benefited from lower manufacturing and overhead costs due to our
focus on cost control and manufacturing efficiencies. In addition, the currency impact of a stronger U.S. dollar against certain
foreign currencies favorably impacted costs by approximately $59 million when compared to the same period last year.

Selling, general, and administrative expenses for the fiscal year ended March 31, 2016 were $119.8 million, or 10.0% of net
sales, compared to $115.8 million, or 8.6% of net sales, for the fiscal year ended March 31, 2015. The overall increase in selling,
general and administrative expenses is primarily due to higher legal advisory fees partially offset by lower selling expenses as a
result of lower sales for the fiscal year ended March 31, 2016 compared to the fiscal year ended March 31, 2015.

During the fiscal ended March 31, 2016, we recorded estimated litigation and settlement charges of $45.3 million related to
the outcome of certain litigation and remediation challenges involving legacy environmental issues and intellectual property
litigation. Effective September 30, 2015, a Settlement Agreement and Mutual Release (“Settlement Agreement”) was entered
into with the City of New Bedford in settlement of the following two cases: DaRosa v. City of New Bedford and City of New Bedford,
et al v. AVX Corporation both arising from contamination at certain property sites in the City of New Bedford. In accordance
with the Settlement Agreement, AVX paid the sum of $6.5 million to the City of New Bedford in October 2015. Additionally,
on January 26, 2016, in a patent infringement case filed in the United States District Court for the District of Delaware captioned
Greatbatch, Inc. v. AVX Corporation, the jury returned a verdict in favor of the plaintiff and found damages to the plaintiff in the
amount of $37.5 million. Also, during the fourth quarter of the fiscal year ended March 31, 2016, we accrued a $1.3 million
estimated charge related to a new environmental remediation demand related to a legacy environmental issue and a $0.4 million
charge related to a recent jury finding with respect to an intellectual property lawsuit filed in the United States District Court for
the District of Delaware captioned Presidio Components, Inc. v. American Technical Ceramics Corp.

Profit from operations for the fiscal year ended March 31, 2016 decreased $88.8 million to $124.0 million compared to

$212.8 million for the fiscal year ended March 31, 2015. This decrease is a result of the factors above.

Other income increased $2.3 million to $8.2 million in fiscal 2016 compared to $5.9 million in fiscal 2015. This increase is
primarily attributable to higher interest income resulting from an increase in the overall average balance of our cash and
investments during fiscal 2016 when compared to fiscal 2015 and foreign currency exchange gains.

The tax rate for the fiscal year ended March 31, 2016 was a tax rate of 23.2% compared to a tax benefit of (3.3%) for the
fiscal year ended March 31, 2015. For fiscal 2016, the rate of 23.2% is impacted by a reduction of income tax reserves related to
the expiration of statutory periods with regard to certain income tax positions of approximately $4.4 million. Excluding such
discrete items recorded during the fiscal year ended March 31, 2016, the effective tax rate would have been 26.5%. The tax rate
for fiscal 2015 was impacted by net income tax benefits of $70.3 million primarily attributable to the reversal of valuation
allowances of $50.0 million related to the forecasted future utilization of net operating loss carryforwards (“NOL’s”) in our
European operations and net tax benefits of $17.5 million primarily due to the U.S. tax benefits related to the restructuring of
certain foreign subsidiaries. Excluding such discrete items recorded during the fiscal year ended March 31, 2015, the effective
tax rate would have been 28.9%.

The gross NOL’s related to the $50.0 million reversal of valuation allowances in the fiscal year ended March 31, 2015 were
$149.9 million. The related tax benefits upon utilization of the NOL’s are un-expiring, however they are subject to annual
utilization limitations. The realization of tax benefits due to the utilization of these NOL’s could take an extended period of time
to realize and are contingent upon the foreign subsidiary’s continuing profitability.

- 32 -

As a result of the factors discussed above, net income for the fiscal year ended March 31, 2016 was $101.5 million compared

to a $225.9 million for the fiscal year ended March 31, 2015.

Financial Condition

Liquidity and Capital Resources

Our liquidity needs arise primarily from working capital requirements, dividends, and capital expenditures. Historically, we
have satisfied our liquidity requirements through funds from operations, investment income from cash and investments in
securities, and cash on hand. As of March 31, 2017, we had a current ratio of 8.5 to 1, $1.1 billion of cash, cash equivalents, and
investments in securities, $2,216.5 million of stockholders' equity and no borrowings.

As of March 31, 2017, we had cash, cash equivalents, and short-term investments in securities of $1.1 billion, of which
$957.2 million was held outside the U.S. Liquidity is subject to many factors, such as normal business operations as well as
general economic, financial, competitive, legislative, and regulatory factors that are beyond our control. Cash balances generated
and held in foreign locations are used for their on-going working capital, capital expenditure needs, and to support regional
acquisitions. These balances are currently expected to be permanently reinvested outside the U.S. If these funds were needed
for general corporate purposes in the U.S., we would incur significant income taxes to repatriate to the U.S. cash held in foreign
locations. In addition, local government regulations may restrict our ability to move funds among various locations under certain
circumstances. Management does not believe such restrictions would limit our ability to pursue our intended business strategies.

Net cash provided by operating activities was $195.0 million for the fiscal year ended March 31, 2017, compared to cash
provided by operations of $166.4 million for the fiscal year ended March 31, 2016 and cash provided by operations of $197.6
million for the fiscal year ended March 31, 2015.

Purchases of property and equipment totaled $66.3 million in fiscal 2017, $48.1 million in fiscal 2016, and $26.6 million in
fiscal 2015. The increase in expenditures during fiscal 2017 were primarily made in connection with strategic building expansion
and equipment purchase activities in our Fountain Inn operations and our plants in Mexico, Malaysia and the Czech Republic.
We expect to continue to make strategic capital investments in our Passive Component and Interconnect product lines and
estimate that we will incur capital expenditures of approximately $50 million in fiscal 2018. The actual amount of capital
expenditures will depend upon the outlook for end market demand and timing of capital projects.

Historically, our funding has been internally generated through operations, investment income from cash, cash equivalents,
and investments in securities and cash on hand. We have assessed the condition of our financial resources and our current
business and believe that, based on our financial condition as of March 31, 2017, cash on hand and cash expected to be generated
from operating activities and investment income from cash, cash equivalents, and investments in securities will be sufficient to
satisfy our anticipated financing needs for working capital, capital expenditures, environmental clean-up costs, expenses related
to ongoing litigation, pension plan funding, research, development, and engineering expenses, and dividend payments or stock
repurchases to be made during the upcoming year. While changes in customer demand have an impact on our future cash
requirements, changes in those requirements are mitigated by our ability to adjust manufacturing capabilities to meet increases
or decreases in customer demand. In addition, potential acquisitions, depending upon their size, could require us to utilize our
current cash resources, or use external borrowings. We do not anticipate any significant changes in our ability to generate cash
flows or meet our liquidity needs in the foreseeable future.

In fiscal 2017, 2016, and 2015, dividends of $72.0 million, $70.5 million, and $67.3 million, respectively, were paid to

stockholders.

On October 17, 2007, the Board of Directors of the Company authorized the repurchase of up to 5,000,000 shares of our
common stock. We purchased 356,364 shares at a cost of $4.8 million during fiscal 2017, 761,145 shares at a cost of $10.2
million during fiscal 2016, and 524,806 shares at a cost of $7.2 million during fiscal 2015. The repurchased shares are held as
treasury stock and are available for general corporate purposes. As of March 31, 2017, there were 3,067,074 shares that may yet
be repurchased under this program.

At March 31, 2017, we had contractual obligations for the construction of plants and acquisition of equipment aggregating

approximately $29.0 million.

- 33 -

We make contributions to our U.S. and foreign defined benefit plans as required under various pension funding regulations.
Contributions are based on a percentage of pensionable wages or requirements necessary to satisfy long-term funding
obligations. We made contributions of $3.0 million to our U.S. and $6.6 million to our foreign defined benefit plans during the
fiscal year ended March 31, 2017. We expect to make contributions of approximately $6.2 million for our foreign defined benefits
plans for the fiscal year ending March 31, 2018. We do not anticipate making contributions to the U.S. plans in fiscal 2018. We
have unfunded actuarially computed pension liabilities of approximately $10.1 million related to these defined benefit pension
plans as of March 31, 2017.

During the fiscal year ended March 31, 2017, we made contributions of $4.4 million to Company sponsored retirement
savings plans. Our contributions are partially based on employee contributions as a percentage of their salaries. Certain of our
contributions to these savings plans are discretionary and are determined by the Board of Directors each year. We expect that
our contributions for the fiscal year ending March 31, 2018 will be approximately $4.4 million.

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

commitments under non-cancelable operating leases as of March 31, 2017, were approximately $18.7 million.

Occasionally we enter into delivery contracts with selected suppliers for certain metals used in our production processes.

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

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

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

On June 3, 2010, AVX entered into an agreement with the EPA and the City of New Bedford, pursuant to which AVX is
required to perform environmental remediation at a site referred to as the “Aerovox Site” (the “Site”), located in New Bedford,
Massachusetts. AVX has substantially completed its obligations pursuant to such agreement with the EPA and the City of New
Bedford with respect to the satisfaction of AVX’s federal law requirements. Agreements with the state regulatory authorities are
not concluded yet but are likely to include additional groundwater and soil remediation. We have a remaining accrual of $15.1
million at March 31, 2017, representing our estimate, including a $3.6 million charge in the current fiscal year, of the potential
liability related to the remaining performance of environmental remediation actions at the Site and neighboring properties using
certain assumptions regarding the plan of remediation. Since additional sampling and analysis may cause the state regulatory
authority, the Massachusetts Department of Environmental Protection, to require a more extensive and costly plan of
remediation, until all parties agree and remediation is complete, we cannot be certain there will be no additional cost relating to
the Site.

We had total reserves of approximately $16.8 million and $19.2 million at March 31, 2016 and March 31, 2017, respectively,
related to various environmental matters and sites, including those discussed above. These reserves are classified in the
Consolidated Balance Sheets as $7.4 million and $3.9 million in accrued expenses at March 31, 2016 and March 31, 2017,
respectively, and $9.4 million and $15.3 million in other non-current liabilities at March 31, 2016 and March 31, 2017,
respectively. The amounts recorded for identified environmental liabilities are based on estimates. Periodically we review
amounts recorded and adjust them to reflect additional legal and technical information that becomes available. Uncertainties
about the status of laws, regulations, regulatory actions, technology, and information related to individual sites make it difficult
to develop an estimate of the reasonably possible aggregate environmental remediation exposure. Accordingly, these costs could
differ from our current estimates.

- 34 -

On April 19, 2016, the Canadian Ministry of the Environment and Climate Change (the “MoE”) issued a Director’s Order
naming AVX Corporation, and others, as responsible parties with respect to a location in Hamilton, Ontario that was at one
time the site of operations of Aerovox Canada, a former subsidiary of Aerovox Corporation, a predecessor of AVX. This
Director’s Order follows a draft order issued on November 4, 2015. AVX has taken the position that any liability of Aerovox
Canada for such site under the laws of Canada cannot be imposed on AVX. At present, it is unclear whether the MoE will seek
to enforce such Canadian order against AVX, and whether, in the event it does so, AVX will have any liability under applicable
law. AVX intends to contest any such course of action that may be taken by the MoE.

We also operate, or did at one time, 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. A separate
account receivable is recorded for any indemnified costs. Our environmental reserves are not discounted and do not reflect any
possible future insurance recoveries, which are not expected to be significant, but do reflect a reasonable estimate of cost sharing
at multiple party sites or indemnification of our liability by a third party.

On April 25, 2013, 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. AVX Corporation. This case alleged that certain AVX products infringe
on one or more of six Greatbatch patents. On January 26, 2016, the jury returned a verdict in favor of the plaintiff in the first
phase of a segmented trial and found damages to Greatbatch in the amount of $37.5 million. AVX is reviewing this initial verdict,
consulting with its legal advisors on what action AVX may take in response, and continuing to litigate the rest of the case.

On September 2, 2014, a subsidiary of AVX, American Technical Ceramics (“ATC”), was named as a defendant in a patent
infringement case filed in the United States District Court of the District of Delaware captioned Presidio Components, Inc. v.
American Technical Ceramics Corp. This case alleged that certain ATC products infringe on a Presidio patent. On April 18, 2016,
the jury returned a verdict in favor of the plaintiff and found damages to Presidio in the amount of $2.2 million. On August 17,
2016, the court issued a permanent injunction prohibiting ATC from manufacturing or selling the related products after
November 16, 2016 and awarded Presidio damages related to ATC’s sale of such products from February 21, 2016 through
November 16, 2016. Subsequently, on October 21, 2016, the Federal Circuit Court granted AVX’s request for a stay of the
permanent injunction whereby AVX was allowed to continue to sell the disputed product until March 17, 2017 to anyone who
was a customer prior to June 17, 2016. Any sales subsequent to November 16, 2016 pursuant to the stay of the permanent
injunction are subject to court mandated intellectual property damages for each product sold. Accordingly, in addition to the
$2.2 million jury verdict award above, we recorded during fiscal year 2017 an estimated reserve for damages on all pre- and post-
verdict sales of product subject to that litigation in the event that the verdict withstands future challenges. As of March 31, 2017,
we have reserved $34.9 million related to the pre- and post-verdict sales of such product. On September 1, 2016, we filed an
appeal with the Federal Circuit to appeal this verdict.

As of March 31, 2017, we had total reserves of $74.6 million with respect to the two intellectual property cases discussed
above. The amounts recorded are based on estimated outcomes. Amounts recorded are reviewed periodically and adjusted to
reflect additional information that becomes available. Accordingly, these costs could differ from our current estimates.

During calendar year 2014, AVX was named as a co-defendant in a series of cases filed in the United States and in the
Canadian provinces of Quebec, Ontario, British Columbia, Saskatchewan and Manitoba alleging violations of United States,
state and Canadian antitrust laws and asserting that AVX and numerous other companies were participants in alleged price-
fixing in the capacitor market. The cases in the United States were consolidated into the Northern District of California on
October 2, 2014. Some plaintiffs have broken off from the United States class action and filed actions on their own. These cases
are still at their initial stages. AVX believes it has meritorious defenses and intends to vigorously defend the cases.

We are involved in other disputes and legal proceedings arising in the normal course of business. While we cannot predict
the outcome of these other disputes and proceedings, we believe, based upon a review with legal counsel, that none of these
disputes or proceedings will have a material impact on our financial position, results of operations, comprehensive income (loss),
or cash flows. However, we cannot be certain of the eventual outcome in these or other matters that may arise and their potential
impact on our financial position, results of operations, comprehensive income (loss), or cash flows.

- 35 -

Disclosures about Contractual Obligations and Commitments

The Company has the following contractual obligations and commitments as of March 31, 2017 as noted below.

Contractual Obligations (in thousands)
Operating Leases
Plant and Equipment

Total

FY 2018

FY 2019 -
FY 2020

FY 2021 -
FY 2022

$
$

18,717
28,979

$
$

4,647
28,941

$
$

7,674
38

$
$

6,330
-

Thereafter
66
$
-
$

During the fiscal year ended March 31, 2017, we made contributions of $4.4 million to our Company sponsored retirement
savings plans. Our contributions are partially based on employee contributions as a percentage of their salaries. Certain
contributions by us are discretionary and are determined by the Board of Directors each year. We expect that our contributions
for the fiscal year ending March 31, 2018 will be approximately $4.4 million.

During the fiscal year ended March 31, 2017, we made contributions of $3.0 million and $6.6 million to our U.S. and
international defined benefit plans, respectively. Contributions are based on a percentage of pensionable wages or requirements
necessary to satisfy funding obligations. We expect to make contributions of approximately $6.2 million for our international
defined benefit plans for the fiscal year ending March 31, 2018. We do not anticipate making contributions to the U.S. plans in
fiscal 2018.

Occasionally we enter into delivery contracts with selected suppliers for certain metals used in our production processes.
The delivery contracts represent routine purchase orders for delivery within three months and payment is due upon receipt. As
of March 31, 2017, we had no material outstanding purchase commitments.

We have a $1.9 million liability recorded at March 31, 2017 related to our uncertain tax positions. Due to the nature of the
underlying liabilities and the extended time often needed to resolve income tax uncertainties, we cannot reasonably estimate the
amount or timing of cash payments that may be required to settle these liabilities beyond 2017. For additional information, refer
to Note 9.

Critical Accounting Policies and Estimates

“Management’s Discussion and Analysis of Financial Condition and Results of Operations” is based upon our consolidated
financial statements and the notes thereto, which have been prepared in accordance with generally accepted accounting principles
in the United States. The preparation of these financial statements requires management to make estimates, judgments, and
assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues and expenses during the reported periods.

On an ongoing basis, management evaluates its estimates and judgments, including those related to revenue recognition,
warranties, inventories, pensions, income taxes, and contingencies. Management bases its estimates, judgments, and assumptions
on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of
which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from
other sources. While we base our estimates and assumptions on our knowledge of current events and actions that we may
undertake in the future, there can be no assurance that actual results will not differ from these estimates and assumptions. On
an ongoing basis, we evaluate our accounting policies and disclosure practices. In management’s opinion, the critical accounting
policies and estimates, as defined below, are more complex in nature and require a higher degree of judgment than the remainder
of our accounting policies described in Note 1 to our consolidated financial statements elsewhere herein.

- 36 -

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, or sales occur when the customers pull inventory
from consignment locations. 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, or used by, the customer in accordance with the terms of an
agreement of sale, there is a fixed or determinable selling price, title and risk of loss have been transferred, and collectability is
reasonably assured. We evaluate gross versus net presentation on revenues from products purchased and resold in accordance
with the revenue recognition criteria outlined in FASB ASC 605-45, Principal Agent Considerations. Based on the evaluation
with our resale arrangements with Kyocera and others, including consideration of the primary indicators set forth in ASC 605-
45-45, we record revenue related to products purchased and resold on a gross basis. Estimates used in determining sales
allowance programs described below are subject to the volatilities of the market place. This includes, but is not limited to,
changes in economic conditions, sales pricing, product demand, inventory levels in the supply chain, technology, and other
variables that might result in adjustments to our estimates. Accordingly, there can be no assurance that actual results will not
differ from the estimates recorded.

Returns

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

Distribution Programs

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

Distributor Stock Rotation Program

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

- 37 -

Distributor Ship-from-Stock and Debit Program

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

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 (net realizable value). We value inventory at its market value where there is evidence that the utility of goods
will be less than cost and that such write-down should occur in the current period. Accordingly, at the end of each period, we
evaluate our inventory and adjust to net realizable value the carrying value and excess quantities. We review and adjust the
carrying value of our inventories based on historical usage, customer forecasts received from marketing and sales personnel,
customer backlog, certain date code restrictions, technology changes, demand increases and decreases, market directional shifts,
and obsolescence and aging.

Income Taxes

As part of the process of preparing our consolidated financial statements, we are required to estimate our tax assets and
liabilities in each of the jurisdictions in which we operate. This process involves management estimating the actual current tax
exposure together with assessing temporary differences resulting from different treatment of items for tax and accounting
purposes. These differences result in deferred tax assets and liabilities that are included within our consolidated balance sheets.
We assess the likelihood that our deferred tax assets will be recoverable based on all available evidence, both positive and
negative. To the extent we believe that recovery 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,
primarily consisting of certain net operating losses carried forward before they expire. The valuation allowance is based on our
estimates of future taxable income over the periods that our deferred tax assets will be recoverable. We continue to evaluate
countries where we have a valuation allowance on our deferred tax assets due to historical operating losses and when such
positive evidence outweighs negative evidence, we will release such valuation allowance as appropriate.

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

- 38 -

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

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

Pension Assumptions

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

Environmental Compliance

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

therefore,

- 39 -

Recent Accounting Pronouncements

In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers.” This guidance modifies how
an entity will determine the measurement of revenue and timing of when it is recognized. The guidance provides for a five-step
approach in applying the standard: 1) identifying the contract with the customer, 2) identifying separate performance obligations
in the contract, 3) determining the transaction price, 4) allocating the transaction price to separate performance obligations, and
5) recognizing the revenue when the performance obligation has been satisfied. The new guidance requires enhanced disclosures
for the nature, amount, timing, and uncertainty of revenue that is being recognized. The guidance is effective for public
companies for interim and annual reporting periods beginning after December 15, 2017. Early adoption is permitted for periods
beginning after December 15, 2016. Companies may use either a full retrospective or a modified retrospective approach to adopt
ASU 2014-09. We are currently in the assessment phase of implementing this standard. We have reviewed, and are continuing
to review, our global customer contracts to identify performance obligations and the associated transaction price and timing of
revenue recognition in accordance with ASU 2014-09. As we continue our analysis of the impact on our consolidated financial
statements and related disclosures, we will evaluate and determine the appropriate adoption methodology. We have not yet
quantified and, accordingly, are not able to make a reasonable estimate of the impact of the new revenue standard on our
consolidated financial statements at this time.

In February 2016, FASB issued ASU 2016-02, “Leases.” This guidance changes the inclusion of certain right-of-use assets
and the associated lease liabilities to be included in a statement of financial position. The classification criteria maintains the
distinction between finance leases and operating leases. Regarding financial leases, lessees are required to 1) recognize a right-
of-use asset and a lease liability, initially measured at the present value of the lease payments, in the statement of financial
position, 2) recognize interest on the lease liability separate from the amortization of the right-of-use asset in the statement of
comprehensive income, and 3) classify repayments of the principal portion of the lease liability within financing activities and
payments of interest on the lease liability and variable lease payments within operating activities in the statement of cash flows.
Regarding operating leases, lessees are required to 1) recognize a right-of-use asset and a lease liability, initially measured at the
present value of the lease payments, in the statement of financial position, 2) recognize a single lease cost, calculated so that the
cost of the lease is allocated over the lease term on a generally straight-line basis, and 3) classify all cash payments within operating
activities in the statement of cash flows. This guidance is effective for public companies for interim and annual reporting periods
beginning after December 15, 2018. Early adoption is permitted. Based on work performed to date, including a review of the
language and structure in our current lease and rental agreements, management does not anticipate the adoption of ASU 2016-
02 to have a material impact on our consolidated financial statements.

In March 2016, the FASB issued ASU 2016-09, “Compensation — Stock Compensation.” The standard is intended to
simplify several areas of accounting for share-based compensation arrangements, including the income tax impact, classification
on the statement of cash flows and forfeitures. The guidance is effective for public companies for annual reporting periods
beginning after December 15, 2016, and interim periods within those annual periods. Management does not expect the adoption
of ASU 2016-09 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 or that no material effect is expected on our consolidated financial statements as a result of future adoption.

Relationship with Kyocera and Related Transactions

Kyocera is the majority stockholder of AVX. As of May 16, 2017, Kyocera owned beneficially and of record 121,800,000

shares of AVX common stock, representing approximately 73% of our outstanding shares.

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

Our business includes transactions with Kyocera. Such transactions involve the purchase of resale inventories, raw materials,
supplies and equipment, the sale of products for resale, raw materials, supplies and equipment, the payment of dividends,
subcontracting activities, and commissions. See Note 14 to our consolidated financial statements elsewhere herein for more
information on the related party transactions.

- 40 -

Kyocera notified AVX pursuant to the Products Supply and Distribution Agreement in December 2016 of its intent,
effective January 1, 2018, to market its manufactured passive and interconnect products globally using Kyocera’s sales force
rather than continuing to have AVX resell such products in the Americas, Europe and Asia. Kyocera will pay commissions to
AVX on sales by Kyocera, in the applicable territories, of products designed into customer applications by AVX prior to January
1, 2018 of 2.0% in calendar year 2018, 1.5% in calendar year 2019, and 1.0% in calendar year 2020. Sales of Kyocera resale
products by AVX were $318,928 and related operating profit was $17,076 for the fiscal year ended March 31, 2017.

AVX notified Kyocera pursuant to the Products Supply and Distribution Agreement in February 2017 of its intent, effective
April 1, 2018, to market its manufactured products in Japan using AVX’s sales force rather than continuing to have Kyocera
resell such products in this territory. AVX will pay commissions to Kyocera on sales by AVX, in the applicable territory, of
products designed into customer applications by Kyocera prior to April 1, 2018 of 2.0% in fiscal year 2019, 1.5% in fiscal year
2020, and 1.0% in fiscal year 2021. Sales of AVX resale products by Kyocera were $25,908 for the fiscal year ended March 31,
2017.

The exchange of information with Kyocera relating to the development and manufacture of multi-layer ceramic capacitors
and various other ceramic products benefits AVX. AVX and Kyocera have executed several agreements that govern the
foregoing transactions and which are described below.

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

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

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

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

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

- 41 -

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Foreign Currency

We are exposed to foreign currency exchange risk with respect to our sales, profits, and assets and liabilities denominated
in currencies other than the U.S. dollar. Although we use financial instruments to hedge certain foreign currency risks, we are
not fully protected against foreign currency fluctuations and our reported results of operations could be affected by changes in
foreign currency exchange rates. International revenues and expenses transacted by our foreign subsidiaries may be denominated
in local currency. See Note 13 to the consolidated financial statements elsewhere herein for further discussion of derivative
financial instruments.

For fiscal 2017, our exposure to foreign currency exchange risk was estimated using a sensitivity analysis, which illustrates a
hypothetical change in the average foreign currency exchange rates used during the year. Actual changes in foreign currency
exchange rates may differ from this hypothetical change. Based on a hypothetical increase or decrease of 10% in the exchange
rates, assuming no hedging against foreign currency rate changes, we would have incurred an additional foreign currency gain
or loss of approximately $47.7 million in fiscal 2017.

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.

Tantalum powder and wire are principal materials used in the manufacture of tantalum capacitor products. The tantalum
required to manufacture our products has generally been available in sufficient quantity. The limited number of tantalum material
suppliers has led to higher prices during periods of increased demand.

Item 8. Financial Statements and Supplementary Data

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

Independent Registered Public Accounting Firm thereon, are presented beginning on page 47 of this report:

Consolidated Balance Sheets, March 31, 2016 and 2017
Consolidated Statements of Operations, Years Ended March 31, 2015, 2016, and 2017
Consolidated Statements of Comprehensive Income (Loss), Years Ended March 31, 2015, 2016, and 2017
Consolidated Statements of Stockholders’ Equity, Years Ended March 31, 2015, 2016, and 2017
Consolidated Statements of Cash Flows, Years Ended March 31, 2015, 2016, and 2017
Notes to Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm

48
49
50
51
52
53
81

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

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

Item 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

- 42 -

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), that are designed to ensure that information required to be disclosed in the Company’s reports under the Exchange Act is
recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such
information is accumulated and communicated to management, including the Company’s Chief Executive Officer (“CEO”) and
Chief Financial Officer (“CFO”), as appropriate, to allow timely decisions regarding required disclosure.

In connection with the preparation of this Annual Report on Form 10-K, as of March 31, 2017, an evaluation was performed
including the CEO and CFO, of the
under the supervision and with the participation of the Company’s management,
effectiveness of the Company’s disclosure controls and procedures. Based on the evaluation, the Company’s CEO and CFO
concluded that the Company’s disclosure controls and procedures were effective as of March 31, 2017 to ensure that information
required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed,
summarized, and reported, within the time periods specified in the SEC’s rules and forms and is accumulated and communicated
to the Company’s management, including the CEO and CFO, or persons performing similar functions, as appropriate, to allow
timely decisions regarding required disclosures.

Management’s Report on Internal Control over Financial Reporting

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

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

The Company’s management assessed the effectiveness of the Company’s internal control over financial reporting as of
March 31, 2017. In making its assessment, the Company’s management used the criteria set forth by the Committee of
Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework (2013). Based on the results of
this assessment, management, including the CEO and CFO, has concluded that the Company’s internal control over financial
reporting was effective as of the end of its fiscal year ended March 31, 2017.

PricewaterhouseCoopers LLP, our independent registered public accounting firm, has issued an attestation report on the
Company’s internal control over financial reporting as of March 31, 2017, as stated in their report, which appears in this Form
10-K.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during our most recently completed
fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial
reporting.

- 43 -

Item 9B. Other Information

None.

Item 10. Directors, Executive Officers, and Corporate Governance

PART III

Information required by this item with respect to our directors, the committees of the Board of Directors, corporate
governance and compliance by our directors, executive officers, and certain beneficial owners of our common stock with Section
16(a) of the Exchange Act is provided by incorporation by reference to information under the captions entitled “Proposal I
Election of Directors,” “Board of Directors – Governance,” “Board of Directors – Meetings Held and Committees,” and
“Section 16(a) Beneficial Ownership Reporting Compliance” in the Company's definitive proxy statement for the 2017 Annual
Meeting of Stockholders (the “Proxy Statement”) and perhaps elsewhere therein. Information required by this item relating to
our executive officers also appears in Item 1 of Part I of this Form 10-K under the caption “Executive Officers of the
Registrant.”

Code of Business Conduct and Ethics

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

Item 11. Executive Compensation

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

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters

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

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

The information required by this item is provided by incorporation by reference to information under the caption
“Relationship with Kyocera and Related Transactions” and “Board of Directors – Governance” in the Proxy Statement and
perhaps elsewhere therein.

- 44 -

Item 14. Principal Accounting Fees and Services

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

Item 15.

Exhibits and Financial Statement Schedules

PART IV

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

Statements at Item 8 of this report.

(b) Exhibits:

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

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

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

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

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

10.1 Products Supply and Distribution Agreement by and between Kyocera Corporation and AVX Corporation
(incorporated by reference to Exhibit 10.4 to the Annual Report on Form 10-K of the Company for the year ended
March 31, 2000).

*10.2 AVX Nonqualified Supplemental Retirement Plan Amended and Restated effective January 1, 2008 (the AVX
Corporation SERP was merged into this plan effective January 1, 2005) (incorporated by reference to Exhibit 10.4 to
the Annual Report on Form10-K of the Company for the year ended March 31, 2009).

*10.3 Amendment to AVX Nonqualified Supplemental Retirement Plan, effective December 15, 2014. (incorporated by
reference to Exhibit 10.4 to the Annual Report on Form10-K of the Company for the year ended March 31, 2015).

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

10.1 to the Quarterly Report on Form 10-Q of the Company for the quarter ended June 30, 2008).

*10.5 AVX Corporation 2004 Non-Employee Directors’ Stock Option Plan as amended through July 28, 2008
(incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q of the Company for the quarter
ended June 30, 2008).

*10.6 Form of Notice of Grant of Stock Options and Option Agreement for awards pursuant to AVX Corporation 2004
Stock Option Plan and AVX Corporation 2004 Non-Employee Directors’ Stock Option Plan (incorporated by
reference to Exhibit 10.8 to the Annual Report on Form 10-K of the Company for the year ended March 31, 2013).

10.7 Machinery and Equipment Purchase Agreement by and between Kyocera Corporation and AVX Corporation
(incorporated by reference to Exhibit 10.14 to the Annual Report on Form 10-K of the Company for the year ended
March 31, 2005).

10.8 Materials Supply Agreement by and between Kyocera Corporation and AVX Corporation (incorporated by reference
to Exhibit 10.15 to the Annual Report on Form 10-K of the Company for the year ended March 31, 2005).

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

10.10 Form of Director and Officer Indemnification Agreement (incorporated by reference to Exhibit 10.16 to the Annual

- 45 -

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

10.11 Supplemental Consent Decree with Defendant AVX Corporation containing agreement among the Company, the
United States Environmental Protection Agency and the Commonwealth of Massachusetts, dated October 10, 2012
(incorporated by reference to Exhibit 99.2 to Current Report on Form 8-K of the Company filed with the Securities
and Exchange Commission on October 11, 2012).

*10.12 AVX Corporation 2014 Stock Option Plan (incorporated by reference to Exhibit 10.17 of the Annual Report on

Form 10K/A of the Company for the year ended March 31, 2013).

*10.13 AVX Corporation 2014 Non-Employee Directors’ Stock Option Plan as amended May 12, 2016 (incorporated by
reference to Exhibit 10.13 of the Annual Report on Form 10-K of the Company for the year ended March 31, 2016).

*10.14 Form of Notice of Grant of Stock Options and Option Agreement for awards pursuant to AVX Corporation 2014
Stock Option Plan and AVX Corporation 2014 Non-Employee Directors’ Stock Option Plan (incorporated by
reference to Exhibit 10.19 of the Annual Report on Form 10-K of the Company for the year ended March 31, 2014).

*10.15 AVX Corporation 2014 Restricted Stock Unit Plan (incorporated by reference to Exhibit 99.1 of Form S-8 filed with

the Securities and Exchange Commission on August 6, 2014.)

*10.16 AVX Corporation 2014 Management Incentive Plan (incorporated by reference to Exhibit 10.19 of the Annual

Report on Form 10-K of the Company for the year ended March 31, 2015).

*10.17 Form of Notice of Grant of Restricted Stock Units for awards pursuant to AVX Corporation 2014 Restricted Stock

Unit Plan (incorporated by reference to Exhibit 10.2 of the Quarterly Report on Form 10-Q of the Company for
the period ended June 30, 2016).

10.18 Technology Disclosure Agreement, effective as of October 7, 2016, between the Company and Kyocera

Corporation (incorporated by reference to Exhibit 10.1 of the Quarterly Report on Form 10-Q of the Company for
the period ended December 31, 2016).

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 Sarvis

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

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

2002 - John Sarvis and Kurt P. Cummings

* Agreement relates to executive compensation.

- 46 -

SIGNATURES

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

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

AVX Corporation

by: /s/ Michael E. Hufnagel
MICHAEL E. HUFNAGEL
Vice President of Corporate Finance
Dated: May 19, 2017

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

/s/ John Sarvis
John Sarvis

Title

Chairman of the Board, Chief Executive Officer and President
(Principal Executive Officer)

/s/ Kurt P. Cummings
Kurt P. Cummings

Executive Vice President, Chief Financial Officer,
Treasurer
(Principal Financial Officer)

/s/ Michael E. Hufnagel
Michael E. Hufnagel

Vice President of Corporate Finance
(Principal Accounting Officer)

Koichi Kano

*

*

Tetsuo Kuba

*
Goro Yamaguchi
*
Tatsumi Maeda
*

Shoichi Aoki

*

Donald B. Christiansen

*
David DeCenzo
*

Joseph Stach

Director

Director

Director

Director

Director

Director

Director

Director

* by: /s/ Kurt P. Cummings

KURT P. CUMMINGS, Attorney-in-Fact for each of the persons indicated.

Date

May 19, 2017

May 19, 2017

May 19, 2017

May 19, 2017

May 19, 2017

May 19, 2017

May 19, 2017

May 19, 2017

May 19, 2017

May 19, 2017

May 19, 2017

- 47 -

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

Assets
Current assets:

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

Total current assets

Long-term investments in securities
Property and equipment, net
Goodwill
Intangible assets, net
Deferred income taxes
Other assets

Total Assets
Liabilities and Stockholders' Equity
Current liabilities:

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

Total current liabilities

Pensions
Deferred income taxes
Other liabilities

Total non-current liabilities

Total Liabilities

Commitments and contingencies (Note 12)

Stockholders' Equity:

Preferred stock, par value $.01 per share:
Authorized, 20,000 shares; None issued and outstanding
Common stock, par value $.01 per share:
Authorized, 300,000 shares; issued, 176,369 shares; outstanding, 167,492

and 167,930 shares for 2016 and 2017, respectively

Additional paid-in capital
Retained earnings
Accumulated other comprehensive (loss)
Treasury stock, at cost,
8,876 and 8,439 shares for 2016 and 2017, respectively

Total Stockholders' Equity

Total Liabilities and Stockholders' Equity

As of March 31,

2016

2017

$

$

$

$

$

$

454,208
494,594
162,453
6,219
484,268
51,400
33,749
1,686,891
85,577
217,998
213,051
57,554
130,786
17,962
2,409,819

42,150
36,018
3,772
32,408
65,954
180,302
20,585
7,142
24,684
52,411
232,713

-

1,764

354,186
1,979,512
(44,368)
(113,988)

578,634
528,748
176,730
10,074
474,128
34,287
33,803
1,836,404
-
239,951
213,051
53,650
124,589
9,768
2,477,413

43,778
36,663
3,944
32,980
98,702
216,067
12,663
957
31,247
44,867
260,934

-

1,764

357,203
2,033,285
(67,163)
(108,610)

2,177,106
2,409,819

$

$

2,216,479
2,477,413

See accompanying notes to consolidated financial statements.

- 48 -

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

Net sales
Cost of sales
Gross profit

Selling, general and administrative expenses
Legal and environmental charges
Profit from operations
Other income:

Interest income
Other, net

Income before income taxes
Provision for (benefit from) income taxes
Net income

Income per share:

Basic
Diluted

Dividends declared
Weighted average common shares outstanding:

Basic
Diluted

$

$

$
$

$

2015

$

Fiscal Year Ended March 31,
2016
1,195,529
906,460
289,069
119,767
45,318
123,984

1,353,228
1,024,659
328,569
115,820
-
212,749

$

4,554
1,296
218,599
(7,272)
225,871

1.34
1.34

0.41

168,148
168,402

$

$
$

$

5,003
3,165
132,152
30,617
101,535

0.61
0.60

0.42

167,797
167,961

$

$
$

$

2017
1,312,661
1,027,906
284,755
117,598
3,600
163,557

7,381
4,011
174,949
49,164
125,785

0.75
0.75

0.33

167,506
167,837

See accompanying notes to consolidated financial statements.

- 49 -

AVX Corporation and Subsidiaries
Consolidated Statements of Comprehensive Income
(in thousands)

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

Foreign currency translation adjustment
Foreign currency cash flow hedges adjustment
Pension liabilities adjustment
Other post-employment obligations

Other comprehensive income (loss), net of income taxes
Comprehensive income

$

Fiscal Year Ended March 31,
2016

2015

2017

$

225,871

$

101,535

$

125,785

(64,734)
(2)
(7,494)
(2,561)
(74,791)
151,080

$

14,330
2
8,209
(244)
22,297
123,832

$

(14,674)
183
(7,527)
(777)
(22,795)
102,990

See accompanying notes to consolidated financial statements.

- 50 -

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

Balance at March 31, 2014
Net income
Other comprehensive

loss, net of income taxes

Dividends of $0.41 per share
Stock-based

compensation expense

Stock option activity
Tax benefit of stock
option exercises

Treasury stock purchased

Balance at March 31, 2015
Net income
Other comprehensive

income, net of income taxes
Dividends of $0.42 per share
Stock-based

compensation expense

Stock option activity
Tax benefit of stock
option exercises

Treasury stock purchased

Balance at March 31, 2016
Net income
Other comprehensive

loss, net of income taxes
Dividends of $0.43 per share
Stock-based

compensation expense

Stock option activity
Tax benefit of stock
option exercises

Treasury stock purchased

Balance at March 31, 2017

Common Stock

Amount

Number
Of
Shares
168,221 $ 1,764 $ (103,769) $ 351,708 $ 1,789,856
225,871

Retained
Earnings

Treasury
Stock

-

-

-

-

Additional
Paid-In
Capital

Accumulated
Other
Comprehensive
Income (Loss)
$

Total

8,126 $ 2,047,685
225,871

-

-
-

-
-

-
-

-
-

-
(67,251)

(74,791)
-

(74,791)
(67,251)

-
-

1,456
5,676

-
-

474
(7,157)
(66,665) $ 2,131,963
101,535

-

22,297
-

22,297
(70,499)

-
-

1,229
708

-
-

58
(10,185)
(44,368) $ 2,177,106
125,785

-

(22,795)
-

(22,795)
(72,012)

-
-

2,327
10,118

-
-

782
(4,833)
(67,163) $ 2,216,479

$

$

$

-
-

1,456
(642)

-
495
-
-
(525)

-
6,318
-
-
-
-
(7,157)
168,191 $ 1,764 $ (104,608) $ 352,996 $ 1,948,476
101,535

474
-

-
-

-
-

-

-

-

-

-
-

-
62

-
-

-
-

-
-

-
805

-
-

-
(70,499)

1,229
(97)

-
-

-
-

-
(761)

-
-
-
(10,185)
167,492 $ 1,764 $ (113,988) $ 354,186 $ 1,979,512
125,785

58
-

-

-

-

-

-
-

-
794

-
-

-
-

-
-

-
-

-
(72,012)

-
10,211

2,327
(93)

-
-

-
(356)

-
-
-
(4,833)
167,930 $ 1,764 $ (108,610) $ 357,203 $ 2,033,285

782
-

-
-

See accompanying notes to consolidated financial statements.

- 51 -

AVX Corporation and Subsidiaries
Consolidated Statements of Cash Flows

(in thousands)

Fiscal Year Ended March 31,
2016

2017

2015

OPERATING ACTIVITIES:
Net income
Adjustment to reconcile net income to net cash from operating activities:

Depreciation and amortization
Stock-based compensation expense
Deferred income taxes
Gain (loss) on disposal of property, plant & equipment, net of retirements

Changes in operating assets and liabilities:

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

Net cash provided by (used in) operating activities

INVESTING ACTIVITIES:
Purchases of property and equipment
Purchases of investment securities
Redemptions of investment securities
Proceeds from property, plant & equipment dispositions

Net cash provided by (used in) investing activities

FINANCING ACTIVITIES:
Dividends paid
Purchase of treasury stock
Proceeds from exercise of stock options
Excess tax benefit from stock-based payment arrangements

Net cash used in financing activities
Effect of exchange rate changes on cash
Increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

$

225,871

$

101,535

$

125,785

42,214
1,456
(58,387)
42

18,773
(3,005)
115,401
3,336
(23,939)
(124,173)
197,589

(26,599)
(1,064,254)
886,656
88
(204,109)

(67,251)
(7,157)
5,676
474
(68,258)
(4,291)
(79,069)
460,674
381,605

$

$

38,951
1,229
26,722
87

20,578
55,482
(77,494)
(591)
8,429
(8,487)
166,441

(48,103)
(771,178)
803,470
1,084
(14,727)

(70,499)
(10,185)
708
58
(79,918)
807
72,603
381,605
454,208

42,687
2,327
(2,175)
(1,894)

(18,116)
6,798
33,447
(39,272)
13,219
32,205
195,011

(66,288)
(1,449,298)
1,500,586
11,266
(3,734)

(72,012)
(4,833)
10,118
782
(65,945)
(906)
124,426
454,208
578,634

$

See accompanying notes to consolidated financial statements.

- 52 -

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

1. Summary of Significant Accounting Policies:

General:

AVX Corporation is a leading worldwide manufacturer, supplier and reseller of a broad line of passive electronic
components and interconnect products. The consolidated financial statements of AVX Corporation (“AVX” or “the Company”)
include all accounts of the Company and its subsidiaries. All significant intercompany transactions and accounts have been
eliminated.

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

31, 2017, Kyocera owned approximately 73% of our outstanding shares of common stock.

Use of Estimates:

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

Cash Equivalents and Investments in Securities:

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

equivalents.

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

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 at market value where there is evidence that the utility of goods will be less
than cost and that such write-down should occur in the current period. Accordingly, at the end of each period, we evaluate our
inventory and adjust to net realizable value. We review and adjust the carrying value of our inventories based on historical usage,
customer forecasts received from marketing and sales personnel, customer backlog, certain date code restrictions, technology
changes, demand increases and decreases, market directional shifts, and obsolescence and aging.

Property and Equipment:

Property and equipment are recorded at cost. Machinery and equipment are generally depreciated on the double-declining
balance method. Buildings are depreciated on the straight-line method. The estimated useful
lives used for computing
depreciation are as follows: buildings and improvements – 10 to 31.5 years, machinery and equipment – 3 to 10 years.
Depreciation expense was $37,073, $33,918 and $37,493 for the fiscal years ended March 31, 2015, 2016 and 2017, respectively.

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

- 53 -

The cost of maintenance and repairs is charged to expense as incurred. Upon disposal or retirement, the cost and
accumulated depreciation of assets are eliminated from the respective accounts. Any gain or loss is reflected in our results of
operations.

Goodwill and Acquired Intangible Assets:

We do not amortize goodwill. We test goodwill for impairment annually or whenever conditions indicate that such
impairment could exist. The carrying value of goodwill is evaluated in relation to the operating performance and estimated future
discounted cash flows of the related reporting unit. If the sum of the discounted cash flows 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 impairment analysis indicated that there was no related impairment for the fiscal years ended
March 31, 2015, 2016, or 2017.

We have determined that our intangible assets have finite useful lives. Intangible assets are amortized on a straight-line basis
over their estimated useful lives. Amortization expense was $5,141, $5,033, and $5,194 for the fiscal years ended March 31, 2015,
2016, and 2017, respectively.

March 31, 2016

March 31, 2017

Gross Carrying
Amount

Accumulated
Amortization

Gross Carrying
Amount

Accumulated
Amortization

Amortized intangible assets:
Customer relationships
Developed technology and other
Trade name and trademarks

Total

$

$

51,000
13,231
34,000
98,231

$

$

(24,083)
(11,494)
(5,100)
(40,677)

$

$

51,000
14,521
34,000
99,521

$

$

(26,917)
(12,153)
(6,800)
(45,870)

The estimated future annual amortization expense for intangible assets is as follows:

Fiscal Year ended March 31,
2018
2019
2020
2021
2022
Thereafter

$

Estimated Amortization Expense

5,178
5,101
5,056
4,902
4,742
28,671

- 54 -

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

Income Taxes:

As part of the process of preparing our consolidated financial statements, we are required to estimate our tax assets and
liabilities in each of the jurisdictions in which we operate. This process involves management estimating the actual current tax
exposure together with assessing temporary differences resulting from different treatment of items for tax and accounting
purposes. These differences result in deferred tax assets and liabilities that are included within our consolidated balance sheets.
We assess the likelihood that our deferred tax assets will be recoverable based on all available evidence, both positive and
negative. To the extent we believe that recovery 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,
primarily consisting of certain net operating losses carried forward before they expire. The valuation allowance is based on our
estimates of future taxable income over the periods that our deferred tax assets will be recoverable. We continue to evaluate
countries where we have a valuation allowance on our deferred tax assets due to historical operating losses and when such
positive evidence outweighs negative evidence we will release such valuation allowance as appropriate.

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

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

Foreign Currency Activity:

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

- 55 -

Derivative Financial Instruments:

Derivative instruments are reported on the consolidated balance sheets at their fair values. The accounting for changes in
fair value depends upon the purpose of the derivative instrument and whether it is designated and qualifies for hedge accounting.
For instruments designated as accounting hedges, the effective portion of gains or losses is reported in other comprehensive
income (loss) and is reclassified 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 losses recognized in other income or expense.

We use financial instruments such as forward exchange contracts to hedge a portion, but not all, of our firm commitments
denominated in foreign currencies. The purpose of our foreign currency management is to minimize the effect of exchange rate
changes on actual cash flows from foreign currency denominated transactions. See Note 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 the customer
in accordance with the terms of an agreement of sale, there is a fixed or determinable selling price, title and risk of loss have
been transferred, and collectability is reasonably assured. We evaluate gross versus net presentation on revenues from products
purchased and resold in accordance with the revenue recognition criteria outlined in FASB ASC 605-45, Principal Agent
Considerations. Based on the evaluation with our resale arrangements with Kyocera, including consideration of the primary
indicators set forth in ASC 605-45-45, we record revenue related to products purchased and resold on a gross basis. Estimates
used in determining sales allowance programs described below are subject to the volatilities of the marketplace. This includes,
but is not limited to, changes in economic conditions, pricing changes, product demand, inventory levels in the supply chain,
the effects of technological change, and other variables that might result in changes to our estimates. Accordingly, there can be
no assurance that actual results will not differ from those estimates.

Accounts Receivable

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

Returns

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

Distribution Programs

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

- 56 -

Distributor Stock Rotation Program

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

Distributor Ship-from-Stock and Debit Program

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

Research, Development, and Engineering:

Research, development, and engineering expenditures are expensed when incurred. Research and development expenses are
included in selling, general, and administrative expenses and were $11,951, $13,683, and $16,493 for the fiscal years ended March
31, 2015, 2016, and 2017, respectively. Engineering expenses are included in cost of sales and were $13,439, $14,616, and $14,453
for the fiscal years ended March 31, 2015, 2016, and 2017, respectively.

Stock-Based Compensation:

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

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

use the closing fair market value of the Company’s common stock on the grant date to determine the fair value of restricted
stock units (“RSU”) at the grant date. See Note 11 for assumptions used.

Treasury Stock:

Our Board of Directors has approved stock repurchase authorizations in 2005 and 2007 whereby up to 10,000 shares of
common stock can be purchased from time to time at the discretion of management. Accordingly, 525 shares were purchased
during the fiscal year ended March 31, 2015, 761 shares were purchased during the fiscal year ended March 31, 2016, and 356
shares were purchased during the fiscal year ended March 31, 2017. As of March 31, 2017, we had in treasury 8,439 common
shares at a cost of $108,610. There are 3,067 shares that may yet be purchased under the 2007 authorization.

- 57 -

Commitments and Contingencies:

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

New Accounting Standards:

In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers.” This guidance modifies how
an entity will determine the measurement of revenue and timing of when it is recognized. The guidance provides for a five-step
approach in applying the standard: 1) identifying the contract with the customer, 2) identifying separate performance obligations
in the contract, 3) determining the transaction price, 4) allocating the transaction price to separate performance obligations, and
5) recognizing the revenue when the performance obligation has been satisfied. The new guidance requires enhanced disclosures
for the nature, amount, timing, and uncertainty of revenue that is being recognized. The guidance is effective for public
companies for interim and annual reporting periods beginning after December 15, 2017. Early adoption is permitted for periods
beginning after December 15, 2016. Companies may use either a full retrospective or a modified retrospective approach to adopt
ASU 2014-09. We are currently in the assessment phase of implementing this standard. We have reviewed, and are continuing
to review, our global customer contracts to identify performance obligations and the associated transaction price and timing of
revenue recognition in accordance with ASU 2014-09. As we continue our analysis of the impact on our consolidated financial
statements and related disclosures, we will evaluate and determine the appropriate adoption methodology. We have not yet
quantified and accordingly, are not able to make a reasonable estimate of the impact of the new revenue standard on our
consolidated financial statements at this time.

In February 2016, FASB issued ASU 2016-02, “Leases.” This guidance changes the inclusion of certain right-of-use assets
and the associated lease liabilities to be included in a statement of financial position. The classification criteria maintains the
distinction between finance leases and operating leases. Regarding financial leases, lessees are required to 1) recognize a right-
of-use asset and a lease liability, initially measured at the present value of the lease payments, in the statement of financial
position, 2) recognize interest on the lease liability separate from the amortization of the right-of-use asset in the statement of
comprehensive income, and 3) classify repayments of the principal portion of the lease liability within financing activities and
payments of interest on the lease liability and variable lease payments within operating activities in the statement of cash flows.
Regarding operating leases, lessees are required to 1) recognize a right-of-use asset and a lease liability, initially measured at the
present value of the lease payments, in the statement of financial position, 2) recognize a single lease cost, calculated so that the
cost of the lease is allocated over the lease term on a generally straight-line basis, and 3) classify all cash payments within operating
activities in the statement of cash flows. This guidance is effective for public companies for interim and annual reporting periods
beginning after December 15, 2018. Early adoption is permitted. Based on work performed to date, including a review of the
language and structure in our current lease and rental agreements, management does not anticipate the adoption of ASU 2016-
02 to have a material impact on our consolidated financial statements.

In March 2016, the FASB issued ASU 2016-09, “Compensation – Stock Compensation.” The standard is intended to
simplify several areas of accounting for share-based compensation arrangements, including the income tax impact, classification
on the statement of cash flows and forfeitures. The guidance is effective for public companies for annual reporting periods
beginning after December 15, 2016, and interim periods within those annual periods. Management does not expect the adoption
of ASU 2016-09 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 or that 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 stock
outstanding for the period. Diluted earnings per share are computed by dividing net earnings by the sum of (a) the weighted
average number of shares of common stock outstanding during the period and (b) the dilutive effect of potential common stock
equivalents during the period. Stock options and unvested service-based RSU awards make up the common stock equivalents
and are computed using the treasury stock method.

- 58 -

The table below represents the basic and diluted earnings per share, calculated using the weighted average number of shares

of common stock and potential common stock equivalents outstanding for the years ended March 31, 2015, 2016, and 2017:

Fiscal Year Ended March 31,
2016

2015

2017

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

Effect of stock options

Weighted Average Shares used in Computing Diluted EPS (1)
Diluted earnings per share

$

$

$

225,871

168,148
1.34

168,148
254
168,402
1.34

$

$

$

101,535

167,797
0.61

167,797
164
167,961
0.60

$

$

$

125,785

167,506
0.75

167,506
331
167,837
0.75

(1) Common stock equivalents not included in the computation of diluted earnings per share because the impact would have been anti-
dilutive were 2,309 shares, 2,974 shares, and 1,381 shares for the fiscal years ended March 31, 2015, 2016, and 2017, respectively.

3. Comprehensive Income:

Comprehensive income (loss) includes the following components:

Foreign currency translation adjustment
Foreign currency cash flow hedges adjustment
Pension liability adjustment
Other post-employment obligations

Fiscal Year Ended March 31,

2015

2016

2017

Pre-tax

Net of
Tax

$ (64,734) $ (64,734) $

10
(9,930)
(2,561)

(2)
(7,494)
(2,561)

Pre-tax
14,330
29
11,077
(244)

$

Net of
Tax
14,330
2
8,209
(244)

Pre-tax

Net of
Tax

$ (14,674) $ (14,674)
183
(7,527)
(777)

205
(10,155)
(777)

Other comprehensive income (loss)

$ (77,215) $ (74,791) $

25,192

$

22,297

$ (25,401) $ (22,795)

The accumulated balance of comprehensive income (loss) is as follows:

Foreign currency translation adjustment
Foreign currency cash flow hedges adjustment
Pension liability adjustment
Other post-employment obligations

Accumulated other comprehensive income (loss)

4. Fair Value:

Fair Value Hierarchy:

As of March 31,

2016

2017

$

$

$

344
184
(42,091)
(2,805)

(44,368)

$

(14,330)
367
(49,618)
(3,582)

(67,163)

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

- 59 -

 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

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

 Level 3: Unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or

liability.

During the fiscal years ended March 31, 2015, 2016, and 2017, there have been no transfers of assets between the levels within
the fair value hierarchy.

Assets measured at fair value on a recurring basis:

Assets held in the non-qualified deferred compensation
program(1)

Foreign currency derivatives(2)

Total

Liabilities measured at fair value on a recurring basis:

Obligation related to assets held in the non-qualified
deferred compensation program(1)
Foreign currency derivatives(2)

Total

Assets measured at fair value on a recurring basis:

Assets held in the non-qualified deferred compensation
program(1)

Foreign currency derivatives(2)

Total

Based on

Quoted prices Other

Fair Value at
March 31, 2016

in active
markets
(Level 1)

observable Unobservable

inputs
(Level 2)

inputs
(Level 3)

$

$

$

$

$

$

4,961

1,409
6,370

$

$

3,710 $

-

3,710 $

1,251

1,409
2,660

$

$

-

-
-

Based on

Quoted prices Other

Fair Value at
March 31, 2016

in active
markets
(Level 1)

observable Unobservable

inputs
(Level 2)

inputs
(Level 3)

4,961 $
1,350
6,311 $

3,710 $

-

3,710 $

1,251
1,350
2,601

$

$

-
-
-

Based on

Quoted prices Other

Fair Value at
March 31, 2017

in active
markets
(Level 1)

observable Unobservable

inputs
(Level 2)

inputs
(Level 3)

6,082 $

1,492
7,574 $

4,810 $

-

4,810 $

1,272

1,492
2,764

$

$

-

-
-

- 60 -

Based on

Quoted prices Other

Fair Value at
March 31, 2017

in active
markets
(Level 1)

observable Unobservable

inputs
(Level 2)

inputs
(Level 3)

Liabilities measured at fair value on a recurring basis:

Obligation related to assets held in the non-qualified
deferred compensation program(1)

Foreign currency derivatives(2)

Total

$

$

6,082 $

886
6,968 $

4,810 $

-

4,810 $

1,272

886
2,158

$

$

-

-
-

(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
assets are 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 assets in the March 31, 2016 and 2017 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

and derivatives.

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. The funds in the non-qualified deferred compensation program are valued based on the number of shares in the funds
using a price per share traded in an active market.

Investments are considered impaired when a decline in fair value is judged to be other-than-temporary. If the cost of an
investment exceeds its fair value, among other factors, we evaluate general market conditions, the duration and extent to which
the fair value is less than cost, our intent and ability to hold the investment, and whether or not we expect to recover the security’s
entire amortized cost. Once a decline in fair value is determined to be other-than-temporary, an impairment charge is recorded
and a new cost basis in the investment is established.

Derivatives

We primarily use forward contracts, with maturities generally less than four months, designated as cash flow hedges to
protect against the foreign currency exchange rate risks inherent in forecasted transactions related to purchase commitments
and sales, denominated in various currencies. We also use derivatives not designated as hedging instruments to hedge foreign
currency balance sheet exposures. These derivatives are used to offset currency changes in the fair value of the hedged assets
and liabilities. Fair values for all of our derivative financial instruments are valued by adjusting the market spot rate by forward
points, based on the date of the contract. The spot rates and forward points used are an average rate from an actively traded
market. At March 31, 2016 and 2017, all of our forward contracts have been designated as Level 2 measurements.

- 61 -

5. Accounts Receivable:

Trade
Less:

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

Total allowances

Fiscal Year Ended March 31,
2017
2016

183,871

$

423
14,314
6,681
21,418
162,453

$

198,491

1,285
14,853
5,623
21,761
176,730

$

$

Charges related to allowances for doubtful accounts are charged to selling, general, and administrative expenses. Charges
related to stock rotation, ship from stock and debit, sales returns, and sales discounts are reported as deductions from revenue.

Allowances for doubtful accounts:
Beginning Balance
Charges
Applications
Ending Balance

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

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

6. Inventories:

Finished goods
Work in process
Raw materials and supplies

Fiscal Year Ended March 31,
2016

2017

2015

410
704
(455)
659

$

$

659
112
(348)
423

$

$

423
785
77
1,285

Fiscal Year Ended March 31,
2016

2017

2015

17,138
33,634
(34,394)
-
16,378

$

$

16,378
29,432
(31,496)
-
14,314

$

$

14,314
25,470
(24,931)
-
14,853

Fiscal Year Ended March 31,
2016

2017

2015

6,356
20,524
(20,468)
(226)
6,186

$

$

6,186
21,736
(21,271)
30
6,681

$

$

6,681
13,831
(14,841)
(48)
5,623

$

$

$

$

$

$

Fiscal Year Ended March 31,
2017
2016

$

$

85,617
101,436
297,215
484,268

$

$

92,563
107,392
274,173
474,128

- 62 -

7. Property and Equipment:

Land
Buildings and improvements
Machinery and equipment
Construction in progress

Accumulated depreciation

Fiscal Year Ended March 31,
2017
2016

$

$

34,358
313,812
1,144,246
20,835
1,513,251
(1,295,253)
217,998

$

$

32,839
307,098
1,150,999
38,315
1,529,251
(1,289,300)
239,951

8. Financial Instruments and Investments in Securities:

Our financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents,
securities investments, and trade accounts receivable. We place our cash and cash equivalents with high credit quality institutions.
At times, such investments may be in excess of the Federal Deposit Insurance Corporation insurance limit. Concentrations of
credit risk with respect to trade accounts receivable are limited due to the large number of entities comprising our customer base
and their dispersion across many different industries and countries. As of March 31, 2017, we believe that our credit risk exposure
is not significant.

At March 31, 2016 and 2017 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 securities investments is recorded as interest income.

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

Short-term investments:

Corporate bonds
Time deposits

Long-term investments:

Corporate bonds

As of March 31, 2016

Gross
Unrealized
Gains

Gross
Unrealized
Losses

Estimated Fair
Value

-
296

39
335

$

$

$

-
-

(28)
(28)

$

-
494,890

85,588
580,478

Cost

$

$

-
494,594

$

85,577
580,171

$

- 63 -

Short-term investments:

Corporate bonds
Time deposits

Long-term investments:

Corporate bonds

As of March 31, 2017

Gross
Unrealized
Gains

Gross
Unrealized
Losses

-
148

-
148

$

$

Estimated Fair
Value

(1)
-

-
(1)

$

$

10,119
518,776

-
528,895

Cost

$

$

10,120
518,628

-
528,748

$

$

The amortized cost and estimated fair value of held-to-maturity investments at March 31, 2017, by contractual maturity, are
shown below. 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 2 inputs in the fair value hierarchy. Actual maturities may differ from contractual maturities because issuers
may have the right to call or prepay obligations without call or prepayment penalties.

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

Total

Held-to-Maturity

Amortized Cost
528,748
$
-
528,748

$

Estimated Fair
Value

$

$

528,895
-
528,895

9. Income Taxes:

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

Domestic
Foreign

Fiscal Year Ended March 31,
2016

2015

2017

$

$

114,333
104,266
218,599

$

$

39,713
92,439
132,152

$

$

75,659
99,290
174,949

- 64 -

The provision for (benefit from) income taxes consisted of:

Current:

Federal/State
Foreign

Deferred:

Federal/State
Foreign

Fiscal Year Ended March 31,
2016

2015

2017

$

$

27,620
22,189
49,809

(5,684)
(51,397)
(57,081)
(7,272)

$

$

(11,117)
15,028
3,911

23,903
2,803
26,706
30,617

$

$

33,220
18,494
51,714

1,725
(4,275)
(2,550)
49,164

Deferred taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for

financial reporting purposes and the amounts used for income tax purposes.

As of March 31,

2016

2017

Non-current:

Assets

Liabilities

Assets

Liabilities

Sales and receivable allowances
Inventory reserves
Depreciation and amortization
Pension obligations
Accrued expenses
Other, net
Net operating loss and tax credit carry forwards

Sub total

Less: valuation allowances

Total Non-current

$

$

8,692
16,430
9,351
15,551
31,316
4,069
80,035
165,444
(26,034)
139,410

$

$

11
380
6,254
8,797
264
60
-
15,766
-
15,766

$

$

9,112
13,532
8,486
8,643
35,157
2,417
70,360
147,707
(13,933)
133,774

$

$

22
1,256
4,790
2,826
875
373
-
10,142
-
10,142

Assets, net of valuation allowances
Liabilities

Net deferred income tax assets

Valuation allowance beginning balance
Charged to income tax provision
Additions
Releases
Translation and other
Valuation allowance ending balance

As of March 31,

2016

2017

$

$

139,410
(15,766)
123,644

$

$

133,774
(10,142)
123,632

2015

As of March 31,
2016

2017

98,801
(1,910)
-
(50,111)
(19,573)
27,207

$

$

$

$

- 65 -

27,207
413
-
(2,730)
1,144
26,034

$

$

26,034
(1,128)
-
(7,413)
(3,560)
13,933

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

U.S. Federal statutory rate
Increase (decrease) in tax rate resulting from:
State income taxes, net of federal benefit
Effect of foreign operations
Change in valuation allowance
Deemed dividends from subsidiaries
Deduction for domestic production activities
Utilization of foreign tax credits
Branch accounting restructuring
Change in uncertain tax positions
Adjustment made by taxing authorities
Adjustment of prior year balances
Other, net

Effective tax rate

Fiscal Year Ended March 31,
2016
35.0%

0.4
(8.7)
0.5
2.9
-
(2.4)
-
(2.6)
-
-
(1.9)
23.2%

2015
35.0%

0.6
(6.0)
(22.4)
1.8
(1.3)
(1.2)
(6.5)
(0.6)
-
-
(2.7)
-3.3%

2017
35.0%

0.5
(8.3)
(5.0)
6.3
(1.7)
(3.9)
-
(0.8)
3.3
1.7
1.0
28.1%

At March 31, 2017, certain of our foreign subsidiaries in Brazil, France, Germany, Israel, China, and Japan had tax net
operating loss carry forwards totaling approximately $194,400 of which most had no expiration date. There is a greater likelihood
of not realizing the future tax benefits of these net operating losses and other deductible temporary differences in Brazil, Israel,
and China since these losses and other deductible temporary differences must be used to offset future taxable income of those
subsidiaries, which cannot be assured, and are not available to offset taxable income of other subsidiaries located in those
countries. Accordingly, we have recorded valuation allowances related to the net deferred tax assets in these jurisdictions.
Valuation allowances decreased $(71,583), $(1,173), and $(12,101) during the years ended March 31, 2015, 2016, and 2017,
respectively, as a result of changes in the net operating losses of the subsidiaries or as a result of changes in foreign currency
exchange rates in the countries mentioned above.

The decrease in valuation allowance during the year ended March 31, 2017 was also due to the reversal of valuation
allowances of $5,530 related to the future utilization of NOLs totaling $15,878 at a Japanese subsidiary. The related tax benefits
upon utilization of the Japanese NOLs expire eight years after they are generated, and they are not subject to annual utilization
limitations. The realization of tax benefits due to the utilization of these NOLs could take an extended period of time to realize
and are dependent upon the Japanese subsidiary’s continuing profitability, and some could expire prior to utilization.

The decrease in valuation allowance during the year ended March 31, 2015 was also due to the reversal of valuation
allowances of $49,969 related to the future utilization of NOLs totaling $149,922 at a French subsidiary. The related tax benefits
upon utilization of the French NOLs do not expire; however, they are subject to annual utilization limitations. The realization
of tax benefits due to the utilization of these NOLs could take an extended period of time to realize and are dependent upon
the French subsidiary’s continuing profitability.

Currently, we expect that cash and profits generated by our foreign subsidiaries will continue to be reinvested indefinitely.
We do not provide for U.S. taxes on the undistributed earnings of foreign subsidiaries which are considered to be reinvested
indefinitely. Total undistributed earnings which would be subject to U.S. income tax if remitted were approximately $993,000
and $1,035,000 as of March 31, 2016 and 2017, respectively. The amount of U.S. taxes on such undistributed earnings as of
March 31, 2016 and 2017 would have been $176,491 and $201,802 respectively.

Income taxes paid totaled $56,389, $22,919 and $55,642 during the years ended March 31, 2015, 2016 and 2017, respectively.

We do not expect that the balances with respect to our uncertain tax positions will significantly increase or decrease within
the next 12 months. For our more significant locations, we are subject to income tax examinations for the tax years 2013 and
forward in the United States, 2013 and forward in Germany, 2011 and forward in Hong Kong, and 2011 and forward in the
United Kingdom.

- 66 -

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

Balance at March 31, 2014

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

Balance at March 31, 2015

Additions for tax positions of prior years
Additions for tax positions in current period
Reductions for tax positions of prior years
Reductions due to expiration of statutory periods

Balance at March 31, 2016

Reductions for tax positions of prior years
Reductions due to expiration of statutory periods
Reductions due to settlements with taxing authorities

Balance at March 31, 2017

$

$

$

$

8,083
564
257
(55)
(1,687)
(386)
6,776
10
228
(30)
(3,585)
3,399
(89)
(895)
(478)
1,937

We recognize interest and penalties related to uncertain tax positions in interest expense. As of March 31, 2016 and 2017,
we had accrued interest related to uncertain tax positions of $535 and $340, respectively. During the year ended March 31, 2016
and 2017, we recognized a $(708) reduction in interest expense and a $(195) reduction in interest expense, respectively, due to
the expirations of statutory periods.

The amount of unrecognized tax benefits recorded on our balance sheet that, if recognized, would affect the effective tax
rate is approximately $3,399 and $1,937 at March 31, 2016 and 2017, respectively. This amount excludes the accrual for estimated
interest discussed above.

10. Employee Retirement Plans:

Pension Plans:

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

We recognize the overfunded or underfunded status of our defined benefit postretirement plans as an asset or liability in
our statement of financial position and recognize changes in that funded status in the year in which the changes occur through
comprehensive income. The adjustment to our pension liability due to the change in the funded status of our plans resulted in
a decrease in recorded net pension liabilities by $13,884 during the fiscal year ended March 31, 2016, and an increase in recorded
net pension liabilities by $1,069 during the fiscal year ended March 31, 2017.

- 67 -

The change in the benefit obligation and plan assets of the U.S. and international defined benefit plans for 2016 and 2017

were as follows:

Change in benefit obligation:

Benefit obligation at beginning of year

Service cost
Interest cost
Plan participants' contributions
Actuarial loss (gain)
Benefits paid
Benefit obligation acquired during the year
Foreign currency exchange rate changes

Benefit obligation at end of year

Change in plan assets:

Fair value of plan assets at beginning of year

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

Funded status

Fiscal Year Ended March 31,

U.S. Plans

2016

2017

International Plans
2017
2016

$

$

$

$

45,243
197
1,539
-
(1,213)
(2,786)
-
-
42,980

37,716
(1,598)
793
-
(2,786)
-
34,125
(8,855)

$

$

$

$

42,980
168
1,457
-
(2,443)
(3,537)
-
-
38,625

34,125
3,100
3,001
-
(3,537)
-
36,689
(1,936)

$

$

$

$

176,939
988
5,173
24
(15,668)
(7,114)
683
(4,408)
156,617

161,520
(1,170)
7,868
24
(7,114)
(4,718)
156,410
(207)

$

$

$

$

156,617
902
4,310
7
32,882
(6,029)
-
(18,768)
169,921

156,410
24,432
6,934
7
(6,029)
(20,028)
161,726
(8,195)

The combined accumulated benefit obligation at March 31, 2016 and 2017 was $199,597 and $208,546 respectively.

At March 31, 2017, the accumulated benefit obligation exceeded the fair value of the assets for all of the U.S. defined

benefit plans and all but one of the international defined benefit plans.

Our assumptions used in determining the pension assets and liabilities were as follows:

Assumptions:
Discount rates
Increase in compensation

As of March 31,

2016

0.5-3.5%
3.4%

2017

0.1-3.8%
-

The following table shows changes in accumulated comprehensive income, excluding the effect of income taxes, related to
amounts recognized in other comprehensive income during fiscal 2016 and 2017 and amounts reclassified to the statement of
operations as a component of net periodic pension cost during fiscal 2016 and 2017.

- 68 -

Beginning balance
Net loss (gain) incurred during the year
Amortization of net actuarial gain (loss)
Amortization of prior service cost
Foreign currency exchange rate changes

Fiscal Year Ended March 31,

U.S. Plans

International Plans

2016

2017

2016

2017

$

$

16,993
2,498
(1,582)
-
-
17,909

$

$

17,909
(3,762)
(1,824)
-
-
12,323

$

$

49,620
(7,934)
(2,157)
257
(1,597)
38,189

$

$

38,189
14,248
(1,241)
-
(4,995)
46,201

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

comprehensive income (loss) at March 31, 2016 and 2017 are as follows:

Unrecognized net actuarial loss
Unamortized prior service cost

Fiscal Year Ended March 31,

U.S. Plans

International Plans

2016 (1)

2017 (2)

2016 (1)

2017 (2)

$

$

11,474
-
11,474

$

$

7,895
-
7,895

$

$

30,104
-
30,104

$

$

36,549
-
36,549

(1) Amounts in the above table as of March 31, 2016 are net of $6,435 and $8,088 tax benefit for the U.S. and International
Plans, respectively.

(2) Amounts in the above table as of March 31, 2017 are net of $4,428 and $9,652 tax benefit for the U.S. and International
Plans, respectively.

The March 31, 2017 balance of unrecognized net actuarial losses expected to be amortized in fiscal 2018 is $1,551 for the

U.S. Plans and $1,780 for the International Plans, respectively.

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

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

Fiscal Year Ended March 31,
2016

2015

2017

$

$

1,175
8,361
(10,137)
-
2,689
2,088

$

$

1,177
6,939
(8,677)
-
3,740
3,179

$

$

1,102
5,997
(7,579)
-
3,142
2,662

Our assumptions used in determining the net periodic pension expense were as follows:

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

As of March 31,

2015

2016

2017

1.0-4.5%
3.9%
1.4-7.3%

0.5-3.6%
3.4%
1.4-7.3%

0.1-3.6%
3.4%
1.4-4.2%

- 69 -

The pension expense is calculated based upon a number of actuarial assumptions established annually for each plan year,
detailed in the table above, including discount rate, rate of increase in future compensation levels, and expected long-term rate
of return on plan assets. To determine the discount rate, we apply the expected cash flows from each individual pension plan to
specific yield curves at the plan’s measurement date and determine a level equivalent yield that may be unique to each plan. On
that basis, the range of discount rates remained constant from March 31, 2016 to March 31, 2017.

The fair value of pension assets at March 31, 2016 and 2017 was determined using:

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

Cash
Pooled Separate Accounts
Guaranteed Deposit Account

International Defined Benefit Plan Assets:

Cash
Depository Account
Pooled Separate Accounts

Total

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

Cash
Pooled Separate Accounts
Guaranteed Deposit Account

International Defined Benefit Plan Assets:

Cash
Depository Account
Pooled Separate Accounts

Total

Quoted prices
in active
markets
(Level 1)

Fair Value at
March 31, 2016

Based on
Other

observable Unobservable

inputs
(Level 2)

inputs
(Level 3)

$

$

$

159
26,552
7,414

159 $
-
-

-
26,552
7,414

381
7,810
148,219
190,535

381
7,810
-

$

8,350 $

-
-
148,219
182,185

$

$

-
-
-

-
-
-
-

Quoted prices
in active
markets
(Level 1)

Fair Value at
March 31, 2017

Based on
Other

observable Unobservable

inputs
(Level 2)

inputs
(Level 3)

$

$

$

166
29,046
7,477

166 $
-
-

-
29,046
7,477

608
7,897
153,222
198,416

608
7,897
-

$

8,671 $

-
-
153,222
189,745

$

$

-
-
-

-
-
-
-

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

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

- 70 -

Valuation of Investments

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

The expected long-term rate of return on plan assets assumption is based upon actual historical returns and future
expectations for returns for each asset class. These expected results were adjusted for payment of reasonable expenses from plan
assets. Our long-term strategy is for target allocation of 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, 2016 and 2017, by asset category are as follows:

Asset Category
Equity securities
Debt securities
Other
Total

As of March 31, 2016

As of March 31, 2017

U.S. Plans
57%
21%
22%
100%

International
Plans
45%
50%
5%
100%

U.S. Plans
59%
20%
21%
100%

International
Plans
38%
57%
5%
100%

We make contributions to our defined benefit plans as required under various pension funding regulations. We expect to

make contributions of approximately $6,200 to the international plans in fiscal 2018 based on current actuarial computations.

Estimated future benefit payments are as follows:

Fiscal Year ended March 31,
2018
2019
2020
2021
2022
2023-2027

Savings Plans:

$

U.S. Plans

International Plans

$

2,132
2,202
2,292
2,381
2,439
12,979

5,794
5,893
5,991
6,093
6,198
32,483

We sponsor retirement savings plans, which allow eligible employees to defer part of their annual compensation. Certain
contributions by us are discretionary and are determined by our Board of Directors each year. Our contributions to the savings
plans in the United States for the fiscal years ended March 31, 2015, 2016 and 2017 were approximately $4,000, $4,222, and
$4,367, respectively.

We also sponsor a nonqualified deferred compensation program, which permits certain employees to annually elect to defer
a portion of their compensation until retirement. A portion of the deferral is subject to a matching contribution by us. The
employees select among various investment alternatives, which are the same as are available under the retirement savings plans,
with the investments held in a separate trust. The value of the participants’ balances fluctuate based on the performance of the
investments. The market value of the trust at March 31, 2016 and 2017 of $4,961 and $6,082, respectively, is included as an asset
and a liability in our accompanying balance sheet because the trust’s assets are both assets of the Company and a liability as they
are available to general creditors in certain circumstances.

- 71 -

11. Stock-Based Compensation:

Under the 2014 RSU Plan, we may grant restricted stock units of up to an aggregate of 3,000 units. Each unit converts to
one share of the Company’s stock at the time of vesting. The fair value of RSU awards is determined at the closing market price
of the Company’s common stock at the date of grant. There were no awards granted from this plan for the year ended March
31, 2016. Restricted stock activity during the year ended March 31, 2017 is as follows:

Non-vested at April 1, 2016
Granted
Vested
Cancelled and forfeited
Non-vested at March 31, 2017

Number of Shares

Weighted-Average Grant
Date Fair Value per Share

266
-
7
259

13.36
-
13.36
13.36

Performance-based awards vest one year after the grant date. Service-based awards vest as to one-third annually with the
requisite service periods beginning on the grant date. Awards are amortized over their respective grade-vesting periods. The total
unrecognized compensation costs related to unvested stock awards expected to be recognized over the vesting period,
approximately three years, was $661 at March 31, 2017.

We have four fixed stock option plans. Under the 2004 Stock Option Plan, as amended, we may grant options to employees
for the purchase of up to an aggregate of 10,000 shares of common stock. Under the 2004 Non-Employee Directors’ Stock
Option Plan, as amended, we may grant options for the purchase of up to an aggregate of 1,000 shares of common stock. No
awards were made under these two plans after August 1, 2013. Under the 2014 Stock Option Plan, we can grant options to
employees for the purchase of up to an aggregate of 10,000 shares of common stock. Under the 2014 Non-Employee Directors’
Stock Option Plan, as amended, we can 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 the market price of our stock on the date
of grant and an option’s maximum term is 10 years. Options granted under the 2004 Stock Option Plan and the 2014 Stock
Option Plan vest as to 25% annually and options granted under the 2004 Non-Employee Directors’ Stock Option Plan and the
2014 Non-Employee Director’s Stock Option Plan vest as to one-third annually. Requisite service periods related to all plans
begin on the grant date. As of March 31, 2017, there were 13,915 shares of common stock available for future 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 of
Shares

Average Price
(a)

Average Life
(years) (b)

Aggregate
Intrinsic Value
-
-
2,149
485
7,952

$

$

-
-
-
-
4.32

3.39

$

6,339

Outstanding at March 31, 2016
Options granted
Options exercised
Options cancelled/forfeited
Outstanding at March 31, 2017

Exercisable at March 31, 2017

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

3,942
-
(794)
(429)
2,719

2,111

$

$

$

13.63
-
12.75
15.13
13.65

13.63

- 72 -

The total aggregate intrinsic value of options exercised is $1,376, $170, and $2,149 for fiscal years ended March 31, 2015,

2016, and 2017, respectively.

Unvested share activity under our stock option plans for the year ended March 31, 2017 is summarized as follows:

Unvested balance at March 31, 2016
Options granted
Options cancelled/forfeited
Options vested
Unvested balance at March 31, 2017

Number of
Shares

1,057
-
(41)
(408)
608

$

$

Weighted
Average Grant-
Date Fair
Value

2.49
-
2.53
2.44
2.52

The total unrecognized compensation costs related to unvested option awards expected to be recognized over the vesting
period, approximately four years, was $844 and $984 as of March 31, 2016 and 2017, respectively. The total aggregate fair value
of options vested is $1,894, $951, and $994 for fiscal years ended March 31, 2015, 2016, and 2017, respectively.

The weighted average estimated fair value of our stock options granted at grant date market prices was $2.75, $2.49, and
$2.52 per option during fiscal years ended March 31, 2015, 2016, and 2017, respectively. The consolidated statement of
operations includes $1,512, net of $815 of tax benefit, in stock-based compensation expense for fiscal 2017.

Our weighted average fair value is estimated at the date of grant using a Black-Scholes-Merton option-pricing model. We
estimated volatility by considering our historical stock volatility. We calculated the dividend yield based on historical dividends
paid. We have estimated forfeitures in determining the weighted average fair value calculation. The forfeiture rate used for the
fiscal year ended March 31, 2017 was 8.0%. No stock options were granted during fiscal 2017. The following are significant
weighted average assumptions used for estimating the fair value of options issued under our stock option plans:

Expected life (years)
Interest rate
Volatility
Dividend yield

2015
Grants
6
2.0%
27%
2.9%

2016
Grants
6
1.5%
24%
2.9%

2017
Grants
-
-
-
-

12. Commitments and Contingencies:

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

minimum lease commitments under non-cancelable operating leases as of March 31, 2017, were as follows:

Fiscal Year ended March 31,
2018
2019
2020
2021
2022
Thereafter

$

4,647
4,021
3,653
3,201
3,129
-

- 73 -

Rental expense for operating leases was $6,759, $6,352, and $5,919 for the fiscal years ended March 31, 2015, 2016, and

2017, respectively.

Occasionally we enter into delivery contracts with selected suppliers for certain metals used in our production processes.
The delivery contracts represent routine purchase orders for delivery within three months and payment is due upon receipt. As
of March 31, 2017, we had no significant outstanding purchase commitments.

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

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

On June 3, 2010, AVX entered into an agreement with the EPA and the City of New Bedford, pursuant to which AVX is
required to perform environmental remediation at a site referred to as the “Aerovox Site” (the “Site”), located in New Bedford,
Massachusetts. AVX has substantially completed its obligations pursuant to such agreement with the EPA and the City of New
Bedford with respect to the satisfaction of AVX’s federal law requirements. Agreements with the state regulatory authorities are
not concluded yet but are likely to include additional groundwater and soil remediation. We have a remaining accrual of $15,093
at March 31, 2017, representing our estimate, including a $3,600 charge in the current fiscal year, of the potential liability related
to the remaining performance of environmental remediation actions at the Site and neighboring properties using certain
assumptions regarding the plan of remediation. Since additional sampling and analysis may cause the state regulatory authority,
the Massachusetts Department of Environmental Protection, to require a more extensive and costly plan of remediation, until
all parties agree and remediation is complete, we cannot be certain there will be no additional cost relating to the Site.

We had total reserves of approximately $16,809 and $19,181 at March 31, 2016 and 2017, respectively, related to various
environmental matters and sites, including those discussed above. These reserves are classified in the Consolidated Balance
Sheets as $7,409 and $3,892 in accrued expenses at March 31, 2016 and March 31, 2017, respectively, and $9,400 and $15,289 in
other non-current liabilities at March 31, 2016 and March 31, 2017, respectively. The amounts recorded for identified
environmental liabilities are based on estimates. Periodically we review amounts recorded and adjust them to reflect additional
legal and technical information that becomes available. Uncertainties about the status of laws, regulations, regulatory actions,
technology, and information related to individual sites make it difficult to develop an estimate of the reasonably possible
aggregate environmental remediation exposure. Accordingly, these costs could differ from our current estimates.

On April 19, 2016, the Canadian Ministry of the Environment and Climate Change (the “MoE”) issued a Director’s Order
naming AVX Corporation, and others, as responsible parties with respect to a location in Hamilton, Ontario that was at one
time the site of operations of Aerovox Canada, a former subsidiary of Aerovox Corporation, a predecessor of AVX. This
Director’s Order follows a draft order issued on November 4, 2015. AVX has taken the position that any liability of Aerovox
Canada for such site under the laws of Canada cannot be imposed on AVX. At present, it is unclear whether the MoE will seek
to enforce such Canadian order against AVX, and whether, in the event it does so, AVX will have any liability under applicable
law. AVX intends to contest any such course of action that may be taken by the MoE.

- 74 -

We also operate, or did at one time, 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. A separate
account receivable is recorded for any indemnified costs. Our environmental reserves are not discounted and do not reflect any
possible future insurance recoveries, which are not expected to be significant, but do reflect a reasonable estimate of cost sharing
at multiple party sites or indemnification of our liability by a third party.

On April 25, 2013, 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. AVX Corporation. This case alleged that certain AVX products infringe
on one or more of six Greatbatch patents. On January 26, 2016, the jury returned a verdict in favor of the plaintiff in the first
phase of a segmented trial and found damages to Greatbatch in the amount of $37,500. AVX is reviewing this initial verdict,
consulting with its legal advisors on what action AVX may take in response, and continuing to litigate the rest of the case.

On September 2, 2014, a subsidiary of AVX, American Technical Ceramics (“ATC”), was named as a defendant in a patent
infringement case filed in the United States District Court of the District of Delaware captioned Presidio Components, Inc. v.
American Technical Ceramics Corp. This case alleged that certain ATC products infringe on a Presidio patent. On April 18, 2016,
the jury returned a verdict in favor of the plaintiff and found damages to Presidio in the amount of $2,168. On August 17, 2016,
the court issued a permanent injunction prohibiting ATC from manufacturing or selling the related products after November
16, 2016 and awarded Presidio damages related to ATC’s sale of such products from February 21, 2016 through November 16,
2016. Subsequently, on October 21, 2016, the Federal Circuit Court granted AVX’s request for a stay of the permanent injunction
whereby AVX was allowed to continue to sell the disputed product until March 17, 2017 to anyone who was a customer prior
to June 17, 2016. Any sales subsequent to November 16, 2016 pursuant to the stay of the permanent injunction are subject to
court mandated intellectual property damages for each product sold. Accordingly, in addition to the $2,168 jury verdict award
above, we recorded during fiscal year 2017 an estimated reserve for damages on all pre- and post-verdict sales of product subject
to that litigation in the event that the verdict withstands future challenges. As of March 31, 2017, we have reserved $34,891
related to the pre- and post-verdict sales of such product. On September 1, 2016, we filed an appeal with the Federal Circuit to
appeal this verdict.

As of March 31, 2017, we had total reserves of $74,559 with respect to the two intellectual property cases discussed above.
The amounts recorded are based on estimated outcomes. Amounts recorded are reviewed periodically and adjusted to reflect
additional information that becomes available. Accordingly, these costs could differ from our current estimates.

During calendar year 2014, AVX was named as a co-defendant in a series of cases filed in the United States and in the
Canadian provinces of Quebec, Ontario, British Columbia, Saskatchewan and Manitoba alleging violations of United States,
state and Canadian antitrust laws and asserting that AVX and numerous other companies were participants in alleged price-
fixing in the capacitor market. The cases in the United States were consolidated into the Northern District of California on
October 2, 2014. Some plaintiffs have broken off from the United States class action and filed actions on their own. These cases
are still at their initial stages. AVX believes it has meritorious defenses and intends to vigorously defend the cases.

We are involved in other disputes, warranty, and legal proceedings arising in the normal course of business. While we cannot
predict the outcome of these other disputes and proceedings, we believe, based upon a review with legal counsel, that none of
these disputes or proceedings will have a material impact on our financial position, results of operations, comprehensive income
(loss), or cash flows. However, we cannot be certain of the eventual outcome in these or other matters that may arise and their
potential impact on our financial position, results of operations, comprehensive income (loss), or cash flows.

13. Derivative Financial Instruments:

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

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

The effectiveness of the cash flow hedges is determined by comparing the cumulative change in the fair value of the hedge
contract with the cumulative change in the fair value of the hedged transaction, both of which are based on forward rates. The
effective portion of the gain or loss on these cash flow hedges is initially recorded in accumulated other comprehensive income
(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, 2016 and 2017, respectively, we had the following forward contracts that were entered
into to hedge against the volatility of foreign currency exchange rates for certain forecasted sales and purchases.

March 31, 2016

Fair Value of Derivative Instruments

Asset Derivatives

Liability Derivatives

Balance Sheet
Caption

Fair Value

Balance Sheet
Caption

Fair Value

Foreign exchange contracts

Prepaid and other

$

1,125

Accrued expenses

$

869

March 31, 2017

Fair Value of Derivative Instruments

Asset Derivatives

Liability Derivatives

Balance Sheet
Caption

Fair Value

Balance Sheet
Caption

Fair Value

Foreign exchange contracts

Prepaid and other

$

1,151

Accrued expenses

$

690

For these derivatives designated as hedging instruments, during fiscal 2015, 2016, and 2017, net pre-tax gains (losses) of
$(2,133), $40, and $1,095, respectively, were recognized in other comprehensive income (loss). In addition, during fiscal 2015,
2016, and 2017, net pretax gains (losses) of $(11,040), $(773), and $3,355, respectively, were reclassified from accumulated other
comprehensive income (loss) into cost of sales (for hedging purchases), and net pre-tax gains of $8,725, $807 and $1,710,
respectively, were reclassified from accumulated other comprehensive income (loss) into sales (for hedging sales) in the
accompanying statement of operations.

Derivatives not designated as hedging instruments consist primarily of forwards used to hedge foreign currency balance
sheet exposures representing hedging instruments used to offset foreign currency changes in the fair values of the underlying
assets and liabilities. The gains and losses on these foreign currency forward contracts are recognized in other income and
expense in the same period as the remeasurement gain and loss of the related foreign currency denominated assets and liabilities
and thus naturally offset these gains and losses. At March 31, 2016 and 2017, we had the following forward contracts that were
entered into to hedge against these exposures.

March 31, 2016

Fair Value of Derivative Instruments

Asset Derivatives

Liability Derivatives

Balance Sheet
Caption

Fair Value

Balance Sheet
Caption

Fair Value

Foreign exchange contracts

Prepaid and other

$

284

Accrued expenses

$

481

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March 31, 2017

Fair Value of Derivative Instruments

Asset Derivatives

Liability Derivatives

Balance Sheet
Caption

Fair Value

Balance Sheet
Caption

Fair Value

Foreign exchange contracts

Prepaid and other

$

341

Accrued expenses

$

196

For these derivatives not designated as hedging instruments during fiscal 2015, 2016, and 2017, gains/(losses) of $(4,392),
$(818), and $460, respectively, were recognized in other expense, which partially offset the $4,035, $1,231 and $($2,059) in
exchange gains/(losses), respectively, that were recognized in other income in the accompanying statement of operations.

At March 31, 2016 and 2017, we had outstanding foreign exchange contracts with notional amounts totaling $204,372 and

$193,156, respectively, denominated primarily in Euros, Czech Korunas, British Pounds, and Japanese Yen.

14. Transactions With Affiliate:

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

Sales:

Product and equipment sales to affiliates

Purchases:

Fiscal Year Ended March 31,
2016
2015

2017

$

28,723

$

22,230

$

30,303

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

272,679

233,637

303,793

Other:

Dividends paid

48,720

51,156

52,983

Kyocera notified AVX pursuant to the Products Supply and Distribution Agreement in December 2016 of its intent, effective
January 1, 2018, to market its manufactured passive and interconnect products globally using Kyocera’s sales force rather than
continuing to have AVX resell such products in the Americas, Europe and Asia. Sales of Kyocera resale products by AVX were
$318,928 and related operating profit was $17,076 for the fiscal year ended March 31, 2017.

AVX notified Kyocera pursuant to the Products Supply and Distribution Agreement in February 2017 of its intent, effective
April 1, 2018, to market its manufactured products in Japan using AVX’s sales force rather than continuing to have Kyocera
resell such products in this territory. Sales of AVX resale products by Kyocera were $25,908 for the fiscal year ended March 31,
2017.

Kyocera notified AVX in February 2014 of its intent, effective April 1, 2015, to market its connector products in Asia using
Kyocera’s sales force rather than continuing to have AVX resell such products in Asia. Sales of Kyocera connector products in
Asia were $47,513 and $1,148 with operating profit of $1,944, and $363 for the fiscal years ended March 31, 2015 and 2016,
respectively.

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15. Segment and Geographic Information:

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

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

The tables below present information about reported segments:

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

Total Passive Components

Interconnect
KCP Resale Connectors
KDP and KCD Resale
Total KED Resale
Total Revenue

Operating profit (loss):
Passive components
Interconnect
KED Resale
Corporate activities

Total

2015

Fiscal Year Ended March 31,
2016

2017

$

$

202,719
355,974
359,315
918,008
134,610
70,741
229,869
300,610
1,353,228

$

$

176,502
311,888
333,693
822,083
111,609
23,751
238,086
261,837
1,195,529

$

$

188,568
314,723
372,279
875,570
118,163
30,027
288,901
318,928
1,312,661

2015

Fiscal Year Ended March 31,
2016

2017

$

$

217,706
28,072
21,010
(54,039)
212,749

$

$

198,268
19,954
16,764
(111,002)
123,984

$

$

190,007
16,437
17,076
(59,963)
163,557

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Depreciation and amortization:

Passive components
Interconnect
KED Resale
Corporate activities

Total

Assets:

Passive components
Interconnect
KED Resale
Cash, A/R and S/T and L/T investments
Goodwill - Passive components
Goodwill - Interconnect
Corporate activities

Total

Capital expenditures:
Passive components
Interconnect
KED Resale
Corporate activities

Total

2015

Fiscal Year Ended March 31,
2016

2017

29,394
5,921
104
6,795
42,214

$

$

$

$

28,460
5,300
83
5,108
38,951

$

$

27,543
5,093
16
10,035
42,687

As of March 31,

2016

2017

618,642
49,646
30,179
1,203,051
202,774
10,277
295,250
2,409,819

$

$

573,519
56,295
35,164
1,294,129
202,774
10,277
305,255
2,477,413

2015

Fiscal Year Ended March 31,
2016

2017

21,452
4,899
4
244
26,599

$

$

36,400
9,237
29
2,437
48,103

$

$

50,982
14,054
1
1,251
66,288

$

$

$

$

During the fiscal years ended March 31, 2017 and March 31, 2016, no customers accounted for more than 10% of our sales.
As of March 31, 2017 and March 31, 2016, one customer represented 12% and 13%, respectively, of our accounts receivable
balance.

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

physical location of long-lived assets. Substantially all of the sales in the Americas region were generated in the United States.

Net sales:
Americas
Europe
Asia
Total

Property, plant and equipment, net:

Americas
Europe
Asia
Total

2015

Fiscal Year Ended March 31,
2016

2017

$

$

$

$

402,209
388,747
562,272
1,353,228

81,787
68,442
49,613
199,842

$

$

$

$

358,372
339,768
497,389
1,195,529

91,674
77,619
48,705
217,998

$

$

$

$

381,695
352,064
578,902
1,312,661

110,235
77,981
51,735
239,951

1.

16. Summary of Quarterly Financial Information (Unaudited):

Quarterly financial information for the fiscal years ended March 31, 2016 and 2017 is as follows:

First Quarter

Second Quarter

$

$

$

2016
300,516
77,174
35,629
0.21
0.21

Third Quarter

$

2016
287,047
66,043
5,374
0.03
0.03

2017
314,823
69,863
29,889
0.18
0.18

2017
340,799
79,391
35,519
0.21
0.21

$

$

2016
304,361
71,776
27,867
0.17
0.17

$

2017
327,461
61,799
26,520
0.16
0.16

Fourth Quarter

2016
303,605
74,076
32,665
0.19
0.19

$

2017
329,578
73,702
33,857
0.20
0.20

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

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

17. Subsequent Events

We have evaluated events for the period between the balance sheet date and the issuance of the consolidated financial
statements and determined that there were no subsequent events or transactions requiring recognition or disclosure in the
consolidated financial statements.

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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, stockholders’ equity and cash flows present fairly, in all material respects, the financial position of
AVX Corporation and its subsidiaries at March 31, 2017, and March 31, 2016, and the results of their operations and their
cash flows for each of the three years in the period ended March 31, 2017, in conformity with accounting principles
generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects,
effective internal control over financial reporting as of March 31, 2017, based on criteria established in Internal Control -
Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission
(COSO). The Company's management is responsible for these financial statements, for maintaining effective internal
control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting,
included in Management’s Report on Internal Control over Financial Reporting appearing under Item 9A. Our
responsibility is to express opinions on these financial statements and on the Company's internal control over financial
reporting based on our integrated audits. We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free of material misstatement and whether
effective internal control over financial reporting was maintained in all material respects. Our audits of the financial
statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates made by management, and evaluating the
overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an
understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing
and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also
included performing such other procedures as we considered necessary in the circumstances. We believe that our audits
provide a reasonable basis for our opinions.

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

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

/s/ PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP
Nashville, Tennessee
May 19, 2017

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