I would like to turn the floor over to Vince Keenan, Avnet's Vice President and Director of Investor Relations.

Good afternoon, and welcome to Avnet's first quarter fiscal 2008 corporate update. If you are listening by telephone today and if not accessed the slides that accompanies this presentation, please go to our website, www.ir.avnet.com, and click on the icon announcing today's event. In addition to disclosing financial results that are determined in accordance with Generally Accepted Accounting Principles, or GAAP, the company also discloses non-GAAP results of operations that exclude certain items. Reconciliation of the Company's analysis of results to GAAP can be found on the Form 8-K filed with the SEC today, in several of the slides in this presentation and on Avnet's Investor Relations website. As mentioned on our last call, in connection with the acquisition of Access Distribution and reflecting recent industry trends, the Company started recording sales and supplier service contracts on a net revenue basis rather than on a gross basis effective in the third quarter of fiscal 2007. With the change... while the change reduced technology solution sales and cost of sales in the second half of fiscal '07 and the first quarter of fiscal 2008, it has no impact on operating income, net income, cash flow, or the balance sheet, thereby positively impacting margins. As we provide the highlights for our first quarter fiscal 2008. Please note that we have excluded debt extinguishment cost from the prior period in the accompanying slides in order to facilitate comparison with current periods. Additionally, in discussing pro forma sales, prior periods are adjusted to include acquisitions as well as reflect the revenue change from gross to net for the sales/supplier service contracts. Before we get started with the presentation from Avnet management, I would like to review Avnet's Safe Harbor Statement. This presentation contains certain forward-looking statements, which are statements addressing future financial and operating results for Avnet. Listed on this slide are several factors that could cause actual results to differ materially from those described in the forward-looking statements. More detailed information about these and other factors is set forth in Avnet's filings with the Securities & Exchange Commission. In just a few moments, Roy Vallee, Avnet's Chairman and CEO, will provide Avnet's first quarter fiscal year 2008 highlights. Following Roy, Ray Sadowski, Chief Financial Officer of Avnet, will review the Company's financial performance during the quarter. At the conclusion of Ray's remarks, Roy will wrap up with additional comments and provide second quarter fiscal 2008 guidance after which a Q&A will follow. Also here today to take any questions you may have related to Avnet's business operations is Rick Hamada, Avnet's Chief Operating Officer; Harley Feldberg, President of Electronics Marketing; and John Paget, President for Technology Solutions. With that, let me introduce Mr. Roy Vallee to discuss Avnet's first quarter fiscal 2008 business highlights.

Thank you, Vince, and hello, everyone. Thank you all for taking the time to be with us and for your interest in Avnet. The September quarter was another example of how our broad revenue base and focus on return on capital continue to contribute to the positive momentum in our financial performance. Even though we experienced some weakness in the America's, better than expected growth in Asia, and our VBM culture allowed us to meet our targets for revenue and operating income. On top of that, we realized another $0.02 per share as a result of a lower tax rate, and higher other income than expected. Starting with the enterprise highlights for the first quarter of fiscal 2008, let's begin with the bottom line where net income of $105.5 million grew 31% year-over-year, excluding debt extinguishment cost that negatively impacted the prior year's first quarter or 2.5 times faster than revenue. Earnings per diluted share reached a first quarter record of $0.69, up 25% over the prior year, again excluding the debt extinguishment cost in the prior year quarter. GAAP earnings per share increased $0.25 or 57% as compared with the first quarter of fiscal 2007. This performance was driven by a combination of strong execution of our value based management initiatives by our global team bolstered by value creating acquisitions. Our VBM initiatives continued to have a positive impact on our key financial metrics, despite modest organic growth. With an acquisition strategy that creates shareholder value, we were able to augment our organic growth activities and deliver another quarter where EPS grew significant faster than revenue year-over-year. With our co-operations continuously improving, and more acquisition revenue to be added in the current quarter, we are optimistic that we can continue to grow faster than our end markets and consistently…

Thank you, Roy and hello everyone. Let's begin with a review of our operating results for the first quarter fiscal 2008 as compared with the prior year quarter. Please note that we have included a reconciliation to GAAP net income at the bottom of the slide to account for the debt extinguishment cost in the first quarter of fiscal 2007. As previously mentioned, beginning in the March quarter of fiscal 2007, our method of recording revenue related to the sales of supplier service contracts has been adjusted to record those contracts on a net basis rather than on a gross basis. On this slide, Q1 of fiscal 2008 reflects that new method while the first quarter of fiscal 2007 remains as reported. In the September of 2007 quarter, sales of $4.1 billion were up 12.3% in reported dollars and 9.8% in constant dollars, as compared with the year ago quarter. Organic revenue growth adjusted for the change in our method of recording revenue related to the sales of supplier service contracts and the impact of acquisitions was up 2.3% over the year ago quarter and was essentially flat when adjusted to exclude the impact of changes in foreign currency exchange rates. Clearly our M&A activity is allowing us to continue to deliver double digit top line growth in a slower industry growth environment. Gross profit of $526.5 million was up $58.1 million or 12.4% as compared with the first quarter of fiscal 2007, due primarily to the impact of acquisitions and the year-over-year weakening of the U.S. dollar against the euro. While year-over-year gross profit margin was up 20 basis points at EM, and 53 basis points at TS, the Avnet's gross profit margin was essentially flat due to a regional shift to Asia in EM that Roy mentioned earlier,…

Thank you Ray. Looking forward to Avnet's second quarter of fiscal year 2008, we expect normal seasonality at both operating groups. With sales in EM to be in the range of $2.4 billion to $2.5 billion, and sales for TS could be between $2.05 billion and $2.15 billion. Therefore, Avnet's consolidated sales should be in the range of $4.45 billion to $4.65 billion for the second quarter of fiscal 2008. Management expects second quarter of fiscal '08 earnings to be in the range of $0.83 to $0.87 per share, up 24% to 30% as compared with last year's second quarter. The above EPS guidance does not include the amortization of intangibles or integration charges related to the acquisitions that have closed or will close here in the December quarter. So with that, let's open up the lines for Q&A. Darcy? Question And Answer

[Operator Instructions]. Our first question will be coming from Jim Suva of Citigroup.

Great. Thank you very much. Can you guys talk a little bit about the competitive environment, increased competitions in such as one of your largest competitors, the other day announced that there has been increased competition, increased pricing, and can you talk about that landscape that you're seeing?

Yes. Hi Jim, it's Roy. I think that was related predominantly to the components business. Right?

Yes.

Okay. So Harley, why don't you take that one? Harley Feldberg - Corporate Vice President and President of Avnet Electronics Marketing/Global: Sure, Roy. Thanks. Hi, Jim. Yes, I'm not sure I could categorize the quarter as reflecting increased competitive pressures. Obviously we're in a very competitive environment and have been for some time but nothing we saw really jumped out at us and said we are in any heightened increased competitive environment. As a matter of fact we were encouraged by the fact that we were able to raise our gross margins year-on-year in actually every major region.

Okay and then as a quick follow up. When we look at SG&A, how should we kind of be looking at that, it went up a little bit this quarter, was that due to kind of year end some adjustments to salaries, annual type increases and what should we look for December going forward? Harley Feldberg - Corporate Vice President and President of Avnet Electronics Marketing/Global: Jim, first of all, yes, we do in fact handle our merit pay, annual increases here in the first quarter of the fiscal year. That's part of the equation. I think M&A is another part of the equation. I think what you should look for going forward is continued improvements in the expenses as a percent of overall gross margin and as Ray pointed out in his comments, where that metric improved year-on-year, it did move in the wrong direction sequentially which is actually typical for us from a seasonal point of view. The expectations would be that we would move back in the right direction again here in the December quarter and on through the next couple of quarters.

Okay. Thank you. Harley Feldberg - Corporate Vice President and President of Avnet Electronics Marketing/Global: You're welcome.

Our next question will come from Matt Sheerin from Thomas Weisel Partners.

Yes, thanks. Just want to get back to your comment about the competitive environment and components. You talked about EMS are being a little bit weaker and U.S. being a little bit weaker. Vallee and Harley could you just give us your views about where do you think we are in the cycle and sort of looking out a couple of quarters as much as you can because I know visibility is limited, but where do you think we are headed in terms of this semiconductor cycle.

So Matt, this is Roy. I will take the macro and see if Harley would like to add anything here. From our perspective the last semiconductor, I will say so called downturn concluded in the March quarter where we had year-on-year growth rates for the quarter of about 1 euro. We have been improving since then and we are forecasting in the December result to improve again but the interesting thing Matt is that... depending how you think about it... that's two or three quarters into the global cycle improvement and we are talking about our mid-single digit growth year-on-year. So I think that either this cycle is going to be longer than the last couple, meaning it will stretch out well into calendar 2008, or the growth rates overall are just lower than what pretty much all of us in the industry are expecting. So this is a... we are in a gradually recovering environment, buts it's the slowest rate of improvement that I have seen in the industry up cycle. Harley Feldberg - Corporate Vice President and President of Avnet Electronics Marketing/Global: Matt, if I could just in addition to what Roy said, your comments specifically on EMS. One of the things that I have been observing with EMS is that's it's actually becoming less valuable for me to look at our global EMS business in the aggregate, because there are clearly are some better doing, far better than others. When you net all that together as Roy said in his opening remarks, minus a customer we chose to exit, our business is pretty flat there. It's really pretty flat. With that said, some are doing quite well, others are doing less well. And we think that's probably going to continue in a pretty steady state in the foreseeable future.

Okay. Are there other big customers where you may not get certain returns or margin metrics that you also may walk away from some business?

Hey Matt. This is Roy again. Across both of our groups, this is something that we've been doing. I guess in a manner of speaking, you could say that it's connected to our overall value based management initiatives, in the sense that we really look not only at the profitability of the customer, but all the way down to return on capital by customer including return on capital by vendor. So I think that the answer to your question is this is something that we have been doing for an extended period of time. There was one particular account that just came to a head this last quarter. There is not a lot of additional accounts to deal with. We are well down that road.

Okay. And then my last question. This has to do with inventory. You talked about inventories being up may be a little bit more then you liked. Just talk about your strategy here on inventory. I know you have talked in the past about may be opportunistically building. Sounds like you think we are at bottom of the cycle. And so whether we... what should we be looking for going forward here?

So again I think that... let me qualify the question by saying that typically when we talk about inventory, its components related.

Yes.

Yes, so its EM related. So Harley why don't you take that one. Where do you se your inventory going here in the next quarter or two. Harley Feldberg - Corporate Vice President and President of Avnet Electronics Marketing/Global: Well Matt, indeed you are correct. We are very... we are always interested in making opportunistic buys that we think can improve either our profitability, or our market share. So we will continue to do that. As we said in the opening remarks, the inventory was... well came in a bit higher than we would have liked. So we will adjust that in the December quarter. But I do want to reiterate, we want to continue to use inventory as a strategy to grow our business.

And Matt, I would ask you to continue to look at, in fact all of you, please look at velocity as opposed to inventory dollars, because obviously as the business grows in places like Asia, it will need more inventory to fuel that growth. But our consistent focus is on improving the velocity or the productivity of that inventory investment. Harley Feldberg - Corporate Vice President and President of Avnet Electronics Marketing/Global: Which indeed Roy, it was the case in every region year-on-year.

Right.

Okay, thanks a lot.

You are welcome.

Thank you. Our next question will come from Brian Alexander of Raymond James.

Good afternoon. Just to follow-up on the margin question from earlier. Your operating margins Roy in the EM business were down, I think about 60-basis points sequentially, your overall gross margins on a consolidated basis were down I think 15 sequentially, on higher EM mix, so favorable mix shift, gross margins down. So if I look within EM, my guess is that your operating margins were down sequentially in probably all of your geographies. I guess I'm trying to tie those two together, you already answered the question about competitive pressures not intensifying during the quarter, so I'm just wondering why the 60 basis points sequential decline in EM operating margins, what caused that, was it gross margin related and if not what was it?

Brian if you recall, for... just look back at your notes, we had a particularly profitable quarter in the June quarter in Europe, and in fact it has actually becomes somewhat of a seasonal pattern for us, but last June was particularly strong and so we have commented on that last quarter. If you look at EM's gross margin globally, it was down sequential, however, it was essentially flat in both America and in Asia, where as it was down in Europe, which was fully expected. So what we saw was very much what we thought was going to happen, may be the one exception is that our revenue in the America's region was lighter than we thought and our revenue in the Asia region was greater than we thought, so there was a little more distortion to the margins driven by next than what we had anticipated.

Okay, so you're not seeing anything, obviously you mentioned from a competitive stand point, you are not seeing anything from a supplier or a customer stand point that is causing any variance from your expectations in terms of overall gross and operating margin within the components business?

Not at all.

No.

No.

And then just as a follow up question, on the revenue guidance for the December quarter in TS, if I just try to look at apples-to-apples excluding some of the acquisitions that are coming into the fold here. It looks like you are guiding up maybe 20% sequentially for revenue for TS which I think historically you have done closer to 30, so I am not sure if you have seen a change in the demand environment or if you are just being conservative or if my numbers are wrong?

As usual your numbers are not wrong. And there is a few maybe anomalies relative to our past seasonality and I will let John speak to that.

Hey Brian, how are you doing?

Hey John.

Let's talk about a few things that might be just a little bit different than you are used to seeing in the fourth quarter for TS, and I think there are about four of them that we hadn't talked about. First and foremost, this is not Sun's year end, and so we have the Sun phenomenon with the year end being in June, so you will see a little bit different cycle there. Secondly, we have Magirus in our... on our revenue guidance at about a $150 million, but more importantly we have a little bit of a timing situation, so normally you would expect to see us do roughly in the past about $200 million on the last day of December. We don't know exactly how much that is about our last day of the year, actually comes one day sooner than the last day for most of our vendors, or majority of our vendors. So we have a roughly some... a little bit of flow that is going to flow into our third quarter versus in our second quarter. And also I will like you to remember that this is first time you will see December where we have gross to net phenomenon going on as well. So the way I calculate it, it's roughly about 30% sequential increase and roughly 34% year-over-year growth.

Okay, thank you very much.

You got it.

Our next question will come from Thomas Dinges with J.P. Morgan.

Hi, John just to follow-up on that last question, but in a kind of more high level picture and Roy you are probably going to comment on this as well. You guys are obviously in the emphasis on a small mid tier enterprise and touching a lot of different verticals, I was hoping you could just comment right now about kind of the way that the overall customer base is feeling going into the fourth quarter, because obviously we have heard at least so far on a vendor call or two, about some hesitation at the end of September and maybe a little bit of trepidation as you move into December. I know, based on where your guidance says, what you guys are thinking numbers wise, I am just wondering more qualitatively kind of what the customer base is feeling like right now and then I have a quick follow-up.

Okay, Tom why don't we let John take the lead on that one and I may provide some color, we will see.

Sure Tom, I have spent a good part of the last 30 days out in the field, left all over the world but interfacing with the buyers and really trying to understand where they are from that perspective and what I am getting back from our customer community, is in fact they are seeing their quote in activity on an increase in this month. A little bit of rollover from September, but generally speaking, it looks like we are going to have a very basic seasonality cycle for this quarter. We would not anticipate having a great deal of difficulty here.

So, Tom its Roy. We have been probing our customers regarding the credit crunch and the impact on financial institution end customers and the feedback we are getting is that that is not a factor for them and the pipelines are actually quite active and as John said, this feels like we are going into a very normal seasonal December quarter.

Okay and then a quick one for Ray on the payables that you mentioned that was just purely timing and obviously with the inventory being up. I may answer my own question here but, is it fair to say that may be you guys have pre-positioned some inventory in sort of the July, August period which obviously creates the invoice and then as it didn't shift, has your payment come due and you are not translating that off the inventory line.

I mean there may be some of that. But I think if you look at the magnitude of the difference. On the inventory from a cash perspective, I know the number right on top of my head was about $40 million for the quarter and yet you are looking at payables of couple of $100 million. So, there is no doubt, somehow what you mentioned Tom but its more just timing of winning voices come due this quarter versus last quarter and so the way we like to look at it, is more on a rolling four quarter basis. That's the reason we highlight rolling four quarters only because if you look at the level of our overall working capital I think, I may have mentioned on prior calls. One days worth of business is $175 million. So it's a whole host of items in this particular quarter driven mainly by payables and just when periods cut off this quarter versus the prior quarter.

Okay.

And over the long-term it will smooth itself out and that's why again we try to emphasis more cash flow generation on a rolling four quarter basis.

Okay. That helps, thank you.

Hey Tom, its Roy. Our expectations for the current quarter are no material changes in working capital overall. It's likely that EM will come down a bit. TS will move up a bit. In aggregate we don't think there will be substantial change in working capital and so we should resume positive cash flow generation here in the December quarter.

Okay, thanks.

Sure.

Our next question will come from Steven Fox with Merrill Lynch.

Hi, good afternoon.

Hi, Steve.

Hi, question on Asia first of all, it looks like its coming up towards the same scale as Europe. You have highlighted the growth in the past being driven by the consumer mainly but if also and you talked about it eventually looking like your typical distribution make up, where do you think it is, what's going to be driving it over next year, will you be able to see more industrial customers coming to have mix or is it still going to be basically driven by consumer end markets?

Well let's see. Steve, I want to say that today our business in Asia is a little more than half indigenous customers and a little less than half multinational EMS companies. Okay?

Okay.

The indigenous customers for the most part, are in the digital consumer business. Now as the markets grow, there will be more indigenous infrastructure kinds of customers, most notably for example in telecom and we are starting to see that sort of industrial CapEx kind of manufacturing emerge in Asia but it is still a relatively small part of our total. In addition to that, you got this international EMS business which is predominantly end equipment that becomes corporate CapEx, heavy comps and high-end IT related. So now as you try to project... you really have to project a couple of things. One is what happens to consumer spending versus corporate spending out over the next year or two. And I am in the camp that says corporate spending should start to accelerate relative to consumer spending, but that's that. It's very difficult to say. So I think if you put it all together, you look at our Asia business I think our mix in Asia is likely to look a lot like it looks today over the next one to two years. I don't think that the change in the nature of the indigenous account base will take place very rapidly.

Roy, if I could add one additional point to that. Hi Steven.

Hi.

I think one other thing that is going to be interesting to watch is we are seeing the expansion today of the second and third tier EMS community in Asia and that set I would look at differently when I would look at the global EMS. So as we mentioned earlier global EMS for us is flattish I would say, pretty stable. That other tier that I mentioned is growing significantly. The growth is difficult to bucket because it is indeed EMS but it is coming from a different tier of customer, some of which are indigenous to Asia and Japan others which are indigenous to the West. What is important I think in our future analysis to consider is the evolution of that third customer bucket as well.

Yes. That's very helpful.

And Steve's its right. Let me answer it one more way. Thinking about it from a business model perspective, so first of all because of the indigenous growth in the local GDP's there and because of the concept of global manufacturing, I think it is quite predictable that the growth rate in Asia for components will continue to exceed the global growth rates. So they will be the faster growing regions. As we look at our business model, our expectations are that gross margins are going to be relatively stable. As we mentioned on the call they were up slightly year-on-year and essentially flat sequentially. We think that the gross margins will be relatively stable and then similar to the balance of our model, expenses becomes scalable as we grow our business in that region. We're now on our way to $3 billion of top line and if that number continues to grow, expenses as a percent of sales or GP should fall and margins should expand. And that coupled with maybe a little bit more improvement and asset velocity and we're at our targeted return on capital.

That's helpful. It sounds like an important trend to watch the next year or two.

Yes.

And then just lastly, real quick question for Ray on the SG&A. I might have missed this but relative to the dollars of SG&A, you just had it in Q1, what are you targeting for Q2 roughly?

I'm sorry, say that question again.

The dollars of SG&A spend; it was like $361 million in Q1, how is that going to look in Q2 more specifically? What kind of spend in dollars?

It will trend up a little bit. I would say right now, under 10 million bucks, just due to the significant growth in business that you'll see sequentially.

Great. Thank you.

And Steve, just a little bit of color. Some of those corporate expenses including stock based compensation will be down sequential and then of course we'll have higher revenues and therefore some costs associated with that and then M&A.

Excellent. Thanks.

You're welcome.

Thank you, our next question will come from Harry Blount of Lehman Brothers.

Hi guys. Just coming back to the visibility and this is probably more on the component side. You guys have touched on it on a couple of different ways but I want to press on it one more time given some of the guidance we have seen from some of the individual players. I think you said in the prepared remarks that the book-to-bill ratio was a little bit less than one on a global basis, and if you look at that plus some of your other indicators like the lead times and cancellation rates, where are you guys getting the visibility and comfort that this will be a normal seasonality, that you won't see a slow down?

I'll give you one data point that may or may not answer your question and that is, this is hard from a components perspective. Everyone of our regions finished the September quarter with a better book-to-bill from a positive book-to-bill than at September quarter a year ago, and so that's one of the elements that we look at when we think about our forecast going into December.

And Harry, the cancellation rates at least here in America actually went down for some reason in the quarter. They've been very-very stable, so I think that's a not a story. Product lead times are pretty stable which is why the book-to-bill is hanging out right around one in a very-very tight range. And of course we looked at bottoms up and tops down forecast. So if the question is, are we 100% confident in the forecast, I'd say no, visibility is still pretty limited but we think that we should be somewhere between flat and down 3% or 4% sequential.

Okay, then also, related to your comments about APEC almost in the ROCE target, historically you guys have started freeing up additional dollars for investment when regions hit the ROCE targets. Can you may be comment a little bit on that as to when those dollars might be freed up and how you expect to deploy them?

Yeah, it turns out Harry that and I think we've commented on this before, I'm not sure if it's done on a conference call or not, but we have in Asia, we have been allowing our 50% drop through approach even though they have not been at the return hurdle rate because of the high rate of growth there and concern over missing from a positional point of view in the marketplace. So we don't see much change in the way we are managing the operating leverage in our components business in Asia despite the fact that it's now approaching our ROCE target.

Okay, last question was, we heard from your competitor that they did not see the normal pickup in the month of September from Europe on the component side of equation, I was wondering if you had the same experience over in that area, so I am looking for more linearity within the past quarter?

When we look at the quarter in total and September as part of the quarter, our performance in Europe was really pretty consistent with what we had projected and pretty consistent with normal seasonality and we see pretty much the same going into the current quarter.

Okay, thanks.

You're welcome.

Our next question will come from Jeff Blackhorn [ph] with Banc of America Securities.

Hi good afternoon.

Hi Jeff.

Hi guys. I am wondering if, can you talk about in your release you mentioned organic revenue growth of 2.3%, year-on-year and to get a better feel of how the acquisitions have performed for Avnet, is there anyway you could give us an organic growth rate for operating income. I know Ray mentioned it was 14% year-on-year including the on an overall basis, but what would that be if you backed out the acquisitions?

Hey Jeff I don't, I think if we could calculate it we would be happy to share it. But what happens is as you know we are integrating all of these acquisitions and ability to track what's happening with the expenses and the operating income on a current year basis and to separate the acquisition impact from our organic activity, I think is close to impossible.

Right, fair enough. Maybe another way to look at it, do you think based on... I am sure you have some way to separate at least the top line, if you look at the top line has the performance of the acquisitions been in line with your expectations or has it been a little bit below?

I think we are pretty happy overall. I would share with you on the last 12 months, the biggest acquisition has been the Access deal and I would say we have been... we are slightly under our expectations from a revenue point of view but we are slightly over our expectations from profitability point-of-view. And then in aggregate, I would say we're very pleased with our contributions from the M&A activity. No negative surprises.

Okay, and to follow-up on that point, well actually just getting back to what John was talking about earlier on the seasonality, so for sure... well, you are confident that you are going to see some positive seasonality in the fourth quarter, but what happens given the Magirus addition, what happens in the March quarter, what kind of sequential decline might be modeled, is it kind of equivalent to 20% to 30% that maybe we have seen historically or has that changed?

It... there might and I want to underline that word, might be an anomaly this year Jeff. So I would say start with normal, but one of the points that John made is that December 31, this year falls on a Monday. Our business the way our calendar operates we close on Saturday. So to the extent that there is revenue generated on Monday that will be part of our Q3 as opposed to part of our Q2 and we have taken that in to consideration in the forecast that we have provided.

Okay.

Other than that, I start with normal seasonality and then depending on how much business gets done on that Monday that could actually have a beneficial impact to Q3 of this fiscal year.

Okay. Thanks and one last question. On the acquisition front, given that this has been critical period of overall growth and your organic growth is more or less flattish both September and as well for December quarter, how is the pipeline looking for you? Is it more competitive, what's the pricing like?

Our pipeline continues to be active. We still have... its not much changed from last quarter. We have opportunities in both operating groups. We have opportunities in all three regions. They are more, as you might imagine... there is more opportunities to do smaller transactions. There are much fewer opportunities to do larger transactions. So overall, I continue to be optimistic that we will continue to be able to conduct and announce and integrate acquisitions over the course of the fiscal year.

Okay. Good luck guys. Thanks.

Thank you.

And the next question will come from Carter Shoop with Deutsche Bank.

Hi guys. A couple of questions, I will start of with Harley when we talk about the overall environment for EM, can you maybe categorize a couple of sub segments within that market, were there are any particular markets or sub markets that are performing better or worse than expectations that really jumped out of there? Harley Feldberg - Corporate Vice President and President of Avnet Electronics Marketing/Global: Sorry, you're referring to end-markets or regions?

More on the end markets side so kind of product categories where capacitors, or connectors, or Analog Semis, particularly better or worse than expected. Some commentary about that will be helpful. Harley Feldberg - Corporate Vice President and President of Avnet Electronics Marketing/Global: Sure. Overall a pretty predictable quarter, from a semiconductor perceptive nothing jumps out at me that was dramatic. We saw some enhanced flash opportunities in Asia as you would guess with the holiday build up. But that was pretty predictable. Analog continued to be quite strong force in the quarter. The one area that really spiked for us and was a very positive experience is we did see double digit growth and IP&E. And that was a very pleasant surprise and no doubt that contributed to our gross margin performance.

Is that a sequential or year-over-year comment. Harley Feldberg - Corporate Vice President and President of Avnet Electronics Marketing/Global: Both.

Okay. Harley Feldberg - Corporate Vice President and President of Avnet Electronics Marketing/Global: Excuse me, double digit year-on-year, high single digit sequentially.

Great, one more for you, Harley here, in regards to the inventory is there a way to break out what the inventory build was for EM versus TS on a sequential basis. Harley Feldberg - Corporate Vice President and President of Avnet Electronics Marketing/Global: Yes, for EM the inventory build was approximately $90 million.

Great, thank you. For John, can we talk a little bit about how the two tier distribution model might have a little bit different end-market exposure relative to your customer base. So, when we think about the slow down we have seen on Wall Street and how that impacted some companies like IBM or Sun, can you talk about how maybe you guys are little bit less exposed to that if you guys are.

I think because we have a broad portfolio we're significant in Sun, HP, IBM, storage [ph] and so forth. I think there is certainly an opportunity for us to feel less spiky if you would depending upon how the vendors participate, and certainly because there is different year ends for each one of those manufacturers as well. I think we are... in fact spikiness is certainly mitigated for the most part.

And I guess when we think about the end markets that you guys are servicing, I think a lot of people talk about the financial markets being roughly a fifth to a quarter of the actual demand for your customers. Now would you guys have a little bit less exposure to the financial services based on your model how you are servicing more the middle tier and lower tier customers in regards to the size?

I think that's absolutely correct. We certainly see a less of an impact there. Much of the financial community that we are talking about is served on a direct basis versus a distribution basis as well.

That's helpful. Ray you might have mentioned this already. Why other income was up so much and what the outlook is for the next quarter?

Yes, other income I guess was up year-over-year. Three primary reasons, one interest income so keep in mind we have been generating a significant amount of cash and so interest income has moved up, and will continue to move up, as we continue to generate cash other than to the extent we may use some for M&A activity. We also had a relatively nominal currency gain this quarter that goes below the line, but that compares to a more significant loss a year ago. And then we have an investment. You may recall, we sold the business, so I guess about a year-and a half ago, and we maintained an equity interest in that business. And so part of the income from that investment is in there as well. And I would say as we go forward into Q2, we would expect that number to be roughly the same as what it was in Q1, I don't see anything dramatically different at this point in time. Currency is always something that is difficult to forecast and based upon the size or activities, it is moving up or down, its expected to some extent but overall the number should be relatively flat on a sequential basis.

Okay, great. Last question, in regards to the acquisition pipeline and your outlook for making acquisitions over the next two years I think we have historically talked a little bit about consolidating the European IT hardware markets and selectively trying to find interesting opportunities in the Asian IT hardware market. Is that the top two priorities for you or are we are starting to open up, speaking a little bit and look for other opportunities outside of those two markets?

Well Carter. This is Roy. Those two... both remain high priorities for us. I also believe that when you start thinking about the next two years there will be some opportunities to consolidate the EM market in Asia and then in addition remember we have this toe hold in Japan and its our expectation that we will be able to conduct some additional transactions there. And then as I mentioned earlier, smaller deals like the two IP&E transactions we have announced in Europe, we will continue to do that as well and in TS we've got opportunities, EM what I would describe as high growth emerging market segment that we are also looking at. Those tend to be smaller as well. So, there is actually, by group, by region an acquisition profile that we looked for.

Great. Thank you.

You are welcome.

Ladies and gentlemen, I know we are running late but we have one more question, we are going to try to squeeze in.

Last question will be coming from... a follow up by Matt Sheerin.

Actually the question was asked and answered regarding the other income. Thanks a lot.

Okay, we got it Matt.

As we conclude today's quarterly analyst call, we will now scroll through the slide mentioned at the beginning of our webcast that contains the non-GAAP to GAAP reconciliation of results presented during our presentation, along with a further description of certain charges that are excluded from our non-GAAP results. This entire slide presentation, including the GAAP financial reconciliations can be accessed in downloadable PDF format at our website. We would like to thank you for your participation in our quarterly update today. If you have any questions or feedback regarding the materials presented, please contact the Avnet Investor Relations Department by phone or email. Thank you.

Thanks, everybody.

Ladies and gentlemen thank you very much for your participation in today's audio conference. That will conclude it for the day. You may disconnect your lines and have a good day. Thank you.