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

Good afternoon and welcome to Avnet's second quarter fiscal year 2010 financial update. If you are listening by telephone today and have not accessed the slides that accompany this presentation, please go to our website www.ir.avnet.com and click on the icon announcing today's event. As we provide the highlights for our second quarter fiscal 2010, please note that we have excluded impairment charges and restructuring, integration and other items from the current and prior year periods in the accompanying presentation and slides. When discussing pro forma sales, or organic growth, prior periods are adjusted to include acquisitions. In addition, when we refer to the impact of foreign currency we mean the impact due to the change in foreign currency exchange rates when translating Avnet’s non-US dollar based financial statement into US dollars. And finally when addressing working capital, return on capital, return on working capital and operating income drop through, those definitions are included in the non-GAAP section of the presentation. 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 of 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 are set forth in Avnet's filings with the SEC. In just a few moments, Roy Vallee, Avnet's Chairman and CEO will provide Avnet's second quarter fiscal year 2010 highlights. Following Roy, Ray Sadowski, Chief Financial Officer of Avnet will review the company's financial performance during the quarter and provide third quarter fiscal 2010 guidance. At the conclusion of Ray's remarks, Roy will wrap up with closing comments after which a Q&A will follow. Since we have a larger number of analysts who cover the company, I would ask that you limit yourself to one question and if we have time at the end of the call, we will take any follow-up questions. Also here to take any questions you may have related to Avnet's business operations are Rick Hamada, Avnet's Chief Operating Officer, Harley Feldberg, President of Electronics Marketing, and Phil Gallagher, President Technology Solutions. With that, let me introduce Mr. Roy Vallee to discuss Avnet's second quarter fiscal 2010 business highlights.

Thank you Vincent, and hello everyone. Thank you all for taking the time to be with us and for your interest in Avnet. The second quarter of fiscal 2010 provided further evidence that the recovery in the technology markets we serve is gaining momentum. As a result of a strong close in December, revenue exceeded our expectations at both operating groups as we delivered better than normal seasonal growth for the second quarter in a row. Importantly both operating groups also improved gross profit margins sequentially following several quarters of declines, thereby providing further evidence that business conditions are strengthening. As we mentioned on our last call due to our 52-53 week fiscal calendar, our results for the September quarter included a 14th week as compared with the typical 13 weeks. After adjusting for the extra week in the September quarter revenue growth accelerated to 22.8% sequentially in the December quarter as compared with 4.6% growth in the September quarter. As a result of the strong revenue performance in the December quarter our year over year revenue growth rate turned positive at both operating groups for the first time since the first quarter of fiscal 2009. This acceleration of growth at TS in parallel with EM indicates that end demand is growing as the macroeconomic recovery ensues, while inventories throughout the supply chain appear to be lean and well managed. The operating leverage in our financial model was evident this quarter as operating income grew nearly five times faster than revenue sequentially. The benefits of our cost reductions propelled sequential operating income drop through to over 100%. Strong top line growth and continued expense control combined to drive operating income margin up 90 basis points sequentially. Turning the balance sheet, we had another very strong performance as both operating groups…

Thank you Roy and hello everyone. Let’s start with a review of electronics market, in second quarter fiscal 2010 EM revenue of $2.52 billion was up 11% year over year on a reported basis and up 7.4% adjusted to exclude the impact of foreign currency. Pro forma revenue after adjusting for the impact of acquisitions and foreign currency was up 1.7% year over year. Sales in the Americas region were down 8.6% on a reported basis. For the EMEA region sales were up 11.8% year over year on a reported basis, and up 0.9% after adjusting for the impact of foreign currency. On a pro forma basis EMEA sales were down 1.1% year over year and after adjusting for the impact of foreign currency pro forma sales were down 10.8%. And finally for EM’s Asia region sales were up 35% as compared with the prior year and up 28.6% on a pro forma basis. On a sequential basis EM sales were up 3.3% and after adjusting for the extra week of sales in the September quarter of roughly $150 million, sales were up 11.2%, well above normal seasonality. Additionally bookings continue to be strong with book to bill ratios above 1.1 to 1. In the December technology solutions sales of $2.32 billion were up 15.8% year over year on a reported basis and up 12.9% adjusted for the impact of foreign currency. After adjusting for the impact of acquisitions and foreign currency pro forma revenue was up 12.2% year over year. At a regional level revenue in the Americas was up 11.7% year over year. In EMEA reported revenues were up 4.3% over the prior year quarter and down 3.6% when you exclude the impact of changes in foreign currency. Sales in the Asia region were up 136.5% as compared…

Thanks Raymond, in summary the second quarter of fiscal 2010 provided further evidence that the economic recovery is gaining momentum and spreading beyond Asia. While EM grew a healthy 11% sequentially this quarter TS’s business grew seasonally faster at 38% excluding the extra week in sales for the September quarter. This TS performance indicates that EM’s recovery is being fueled by rising end demand and not just inventory restocking. While the rate of future improvement remains uncertain positive sequential growth in the western regions at EM and a robust quarter for IT spending are encouraging signs as the current up cycle unfolds. Similar to the last up cycle our results are demonstrating the leverage we’ve built into our model as growth returns and the benefits of our cost reduction initiatives become apparent. In the December quarter we delivered gross profit drop through greater than 100% and grew operating income nearly five times faster than revenues. Working capital velocity continues at record levels and return on working capital is approaching our targeted levels. Throughout the Avnet portfolio we’re seeing consistent improvement as our value based management discipline drives our focus on profitable growth. Our counter cyclical balance sheet has not only provided liquidity to weather the credit driven downturn but is now providing the flexibility to fund new growth initiatives. Whether it is organic growth initiatives or value creating M&A there are many opportunities to expand into new geographies and product categories that can accelerate our growth and leverage our scale and scope advantages globally. Just as we managed our business through the last cycle we will leverage growth during this recovery to strengthen our market position and optimize our financial performance. With that let’s open up the lines for Q&A.

(Operator Instructions) Your first question comes from the line of Steven Fox – Calyon Securities Steven Fox – Calyon Securities : Can you talk a little bit about the TS business, you commented that you’re looking for more than normal seasonal declines in Q1 but what are you seeing that makes you think that there’s not more cyclical powers at work here that would make your business be stronger in Q1 into Q2.

What we know is that the sequential growth in December was greater than normal. In fact it really occurred in the back half of 2009. After a couple of quarters of below normal seasonality we ended up with a couple of quarters of above normal and a very strong surge in December. So the conclusion that we’re drawing which I’ll admit is subjective in nature is that budget dollars that weren’t spent in the early part of the calendar year ultimately got spent before we ended the year thereby distorting the size of the December quarter. We do believe that IT budgets in 2010 will be higher than 2009. however you asked the question what are we seeing, the reality is that January typically gets off to a slow start in IT and we’re not actually seeing anything that would either prove or disprove that, we just don’t know much from an actual orders and sales perspective based on the first three weeks of January. So we’re basing our guidance on what we believe was an inflated December, we’re trying to normalize that and then provide normal seasonal off of that slightly lower base line. Steven Fox – Calyon Securities : And then if you just extend that out to the full year, you mentioned that you’re looking for growth in IT, how would you describe what type of year your customers may be talking about or is it too early to talk about visibility into the full year.

Our view on that is that there seems to be a consensus of industry experts that are saying numbers like middle single-digits, 4 or 5 or 6% growth for the overall IT market. Obviously we’re going to try to outperform that by focusing on our growth areas like emerging geographies, our solutions practices, that sort of thing. But I think we’re expecting an IT market that grows in the mid single-digits in 2010. And you know me pretty well, if I had to bet the over under on that one I’d bet the over based on what I perceive to be pent up demand coupled with available liquidity.

Your next question comes from the line of Ananda Baruah – Brean Murray, Carret Ananda Baruah – Brean Murray, Carret : Revenue upside to the quarter at least relative to my model margin upside and you made comments I believe that gross profit dollar drop through was greater than 100% so just interested in getting your perspective, I know previously you made comments around expecting 100% incremental gross profit dollar drop through for a period of time, do you now think that the leverage can be a little bit better than what you thought it was before or maybe you’re seeing that leverage at work a little bit earlier than what you thought before.

I think that part of what happens when these cycles turn is that we have a phenomenon where we have been taking cost actions that are rolling into the expense numbers and they tend to be sort of winding down as revenue grows and thereby creating this greater than 100% phenomenon. What I can tell, two comments, one is what actually happens now going forward is going to depend on things like the rate of growth that we experience and perhaps even more importantly the mix of where that growth comes from. Those are the things that will have the biggest influences on driving how much drop through or how much operating leverage we have. The other point I wanted to make and what I can tell you is that the way we manage the business is by group and by region, we have targeted financial models, and the amount of reinvestment that they’re allowed to make is a function of how that business unit is performing relative to our targets. So no change there, this is the way we’ve been running the business. It’s the way we ran it through the 2003 through 2008 up cycle and it’s the way we’re going to run it through the 2009 to whatever up cycle that apparently has begun. Ananda Baruah – Brean Murray, Carret : Just if I could get your take, I believe, the [inaudible] deal is closed, and I believe that Oracle made some comments about the way they’re going to go to market with the Sun technology, so is there any update on your thinking relative to what the business impact might be to you.

As you might imagine we’ve been in heavy dialogue with them and why don’t I turn it over to Phil and I’ll let him take the lead and then either Rick or I might chime in at the end.

First off, out of the gates just want to let everyone know we’ve certainly been very well engaged with the Oracle Sun leadership team, and we’re actually at the conference yesterday with them and Rick and myself just had a call this morning with their executive team again so we’re very aligned and very understanding as to where they’re going. And direct to your question, do we think this would have a material impact in the near future and we do not believe so at all. As a matter of fact some of it out of the dialogue there could be some opportunity for us as well from a value distribution standpoint. It stated that in the press and reinforced it again this morning in a call that they’re actually going to be further committed to a two tier channel strategy and further rationalizing their current distribution base across the world and with Avnet so strategic value solution distribution approach and our geographic coverage, we’ll work certainly closer with the Oracle Sun team to be sure it has minimal impact as they transition minimal impact to Avnet. As a matter of fact it will be a growth opportunity going forward.

I would just add on the direct coverage commentary that you’ve been hearing about, our assessment is that what Oracle is really planning to do here is probably bring their model more in line with what is the mainstream enterprise coverage model and that as far as direct revenue shifts or impacts it would be the fulfillment type revenues in the large enterprise account that would be in question at this point.

And to just add one thing, that revenue stream, we’re not exactly sure how to quantify it at this point but by definition that would be the lowest margin portion of our formerly Sun now Oracle revenue stream. And there are other changes that they’re making that are going to provide us with some interesting upsides such as no longer will they deal directly with resellers, all will be required to buy from distributors and on a global level they are looking to consolidate the number of distributors they work with. So I think at this point our view is that its not a material change in our relationship. There actually are pluses and minuses and of course we’ll learn more over the coming weeks and months as the whole integration unfolds.

Your next question comes from the line of f Sherri Scribner – Deutsche Bank Sherri Scribner – Deutsche Bank: You mentioned it a little bit in the prepared remarks but I was hoping you could talk a little bit about inventory levels, inventory ticked up by, it makes sense that that would pick up with strong revenue performance this quarter but what’s built into that number in terms of, have we gotten back to normal levels of inventory do you think in the channel and what did you see in terms of component shortages this quarter.

Are we comfortable with the inventory levels, do we think inventory levels are fairly stable in the channel overall and I think the answer is yes. Lead times have not changed dramatically from last time we spoke. They are still extended but we don’t see strong movement in either direction, they’re pretty stable and consistent with where we have been. The inventory increase that you referred in December was really aimed at fueling our revenues in March and we continue to focus really on the two issues we discuss each quarter which are our velocity metrics which continue to improve even with the growth and our aging metrics which have actually never been better. So we’re very comfortable with our inventory and we continue to invest to fuel our future revenues.

There was a question about product shortages as well but let me just comment, this may sound like the obvious but inventory at Avnet and throughout the supply chain is really driven by two things from my perspective, one is unit volume growth and the other one is the extension of product lead times. Both of which are happening as we speak so its our belief that inventories in dollar terms are growing not only in our shop but in essence throughout the supply chain however they’re growing at a rate that is slower than sales growth and as a result you’re still seeing very strong and in many cases sort of record level inventory turns and overall working capital velocity as we just reported in our quarter. So that causes us to be quite comfortable coupled with no evidence of customer cancellations or reschedule activity, no evidence of double ordering. So clearly inventories are expanding but they appear to be well managed in that expansion.

I think that again similar to lead times we’re not seeing any dramatic change in shortages. If you look at unit shipments for example in the industry for December including our own unit shipments they really are quite strong. So our suppliers are providing us with considerable product, considerable units, and that’s quite frankly what’s fueling the additional growth and the strong revenue results in December. Sherri Scribner – Deutsche Bank: I just have another question in terms of the M&A outlook are you starting to see more attractive M&A candidates right now, has pricing become more attractive, or what would you say on that front.

I would say this, one of the old sayings in M&A is you’ve got to have a willing buyer and a willing seller. And during the downturn I guess I would describe Avnet as a reluctant buyer meaning that we were concerned about forecasts, we were concerned about the availability of capital in the event that we used ours, and as a result we have increased our hurdle rates and in essence limited the amount of activity that we were willing to get involved in. So now if you fast forward we’re actually quite comfortable with capital markets. We believe that we could replace our cash if need be. Therefore we are interested in making investments. We are thinking about a more normalized 12.5% hurdle rate these days as opposed to the elevated 14 that we had during the challenging economic times. So in terms of the willing buyer I would say Avnet is more willing today then it had been say six to 12 months ago. On the seller side there are still substantial strategic competitive pressures in distribution and they tend to favor global scale and scope. So as a result of that there are lots of opportunities and we have increased our pipelines and our activity rate I would describe as resumed at a fairly high level. As far as pricing however, this upturn in technology both on the IT side as well as the component side has people believing that there are better days ahead and so with a little less pressure in terms of availability of capital coupled with more positive outlooks I would say the price expectations of the sellers are also going up. So we will maintain our disciplined approach. We will not do deals that don’t generate appropriate returns and all that said, I’m reasonably comfortable that our M&A activity will be picking up over the next few quarters compared to the past few.

Your next question comes from the line of Craig Hettenbach – Goldman Sachs Craig Hettenbach – Goldman Sachs: Post a series of cost cutting actions over the last year can you just talk about the pace of OpEx growth relative to sales growth as demand recovers and then maybe just starting with the March quarter split between gross margin and OpEx.

So clearly as business recovers you’ll start to see some movement up in expenses. However we still have a fair amount of leverage in our business and I guess the way I would answer the question is to go back and talk about our drop through that we’ve mentioned a number of times and the earlier stages in a recovery as we are today, that drop through again meaning the incremental GP dollars that will flow to the bottom line, are certainly going to be higher than lower. And I think there was a question earlier today about our drop through sequentially being greater than 100% and if you look at it from a year over year perspective a little bit different story because operating income is declining but as you move forward I guess either way I would answer the question is to characterize drop through as being pretty high numbers early in the recovery, maybe in the 80, 90% range. It could be different depending upon the business group. So therefore again you’ll see expenses start to move up to some extent on a go forward basis. If you’re looking at the March quarter specifically we’re probably talking about at this stage flattish to slightly up expenses by a few million dollars based upon the revenues that we see today. Obviously if they’re higher revenues that will bring [inaudible] cost, if its lower revenues some of variable cost might come down but that’s roughly what we’re planning for at this particular point in time.

I’d like to throw out strategic response on top of the sort of analytic response, we are well aware that this is a recovery phase and that the, many of the economies around the world including the US economy are being fueled by stimulus and that at some point that stimulus needs to be withdrawn and the question is what will be the growth left in the real economy. And so as I think about expense growth here over the next couple of quarters I would encourage you to think about first of all the immediate impact of higher volume and how that effects things like our variable compensation as well as things like just transportation costs, with more packages and boxes moving around. In addition to that we are finding areas of our business such as our warehouses where we simply need to add staff in order to support the actual transaction volume. So obviously we’re taking those actions to ensure we maintain high service levels, and also maintain our employee engagement through the up cycle because our folks are working pretty hard. In terms of actual new investments in strategic initiatives we’re going to continue to be prudent. I would say it won’t be zero but we’re not going to go full throttle ahead until we feel like the economy is sitting on solid ground and able to grow independent of the stimulus packages that are out there. So yes, there will be variable costs associated with volume, there will be some incremental expense to support that volume and then there’ll be selected investments in organic growth activities but we’ll be relatively cautious until we feel better about the overall economic environment. Craig Hettenbach – Goldman Sachs: On the strategy front, when we think about gross margin what are you seeing out there today in terms of demand creation and new products and how should we think about that as the recovery unfolds.

From a semiconductor perspective or a component perspective we’re actually, this is one of the, the answer to your question is one of the things that fuels our optimism looking into calendar 2010 and that is one of the realities of our business is that our investments and our activity and our work load from a design perspective over the last year really did not diminish. So we continue to keep our technical people in place. We continue to do all the work. But the rewards of production design wins for obvious reasons were minimal looking specifically let’s say at calendar 2009. As we’re just concluding this week our global technical tour that was alluded to in the prepared remarks X-fest, we couldn’t be more upbeat and excited about the opportunities for all that work to turn into increased revenues, increased design wins, looking forward. Much of that if you think about where we’re looking for growth connected to an overall improvement in the industrial account base. So we see very good future for us in design win. We stayed again committed to it all through the difficult period and we think we will bare the fruits of that work in an improving environment especially with the west improving.

And a quick follow-up our suppliers have continued to value that activity and have continued to maintain the full gross profit margins in that segment of our activity. The contention we have in our suppliers typically revolves around margins relating to fulfillment activities and not the design win activities. So as that grows that should have a beneficial impact on our margins.

Your next question comes from the line of William Stein – Credit Suisse William Stein – Credit Suisse: Can you remind us please whether there are any restructuring benefits that continue to flow in the model in March and beyond or was December the last quarter of that.

We’re essentially done with our restructuring charges for the most part virtually all complete by the end of September quarter, a little bit more occurred in the December quarter as well as some integration but effectively we are finished with our restructuring. William Stein – Credit Suisse: And then perhaps you can comment on demand trends within some of the end markets, clearly we know that your end markets are broadly the industrial base at least in North America, any further granularity on the end market demand, some stronger or weaker then others would be helpful.

Its going to sound like a copout but it really is the actuality and that is we saw growth, we saw encouragement especially in the design area all through the December quarter. So I can’t really give you an area that jumps out. Automotive is a good example where we saw some encouraging signs in both Europe and in Asia. But clearly across the broad industrial, its hard to single a market because it is so broad. But maybe a better way to ask the question, were there any areas that don’t appear to be participating and there really weren’t when we look at our December results. Its really pretty much across the board. William Stein – Credit Suisse: And what about March relative to what you’d normally expect the trends to be, any standouts either stronger or weaker.

No, I think the riddle that we think about is our growth was really quite exciting through the end of December in Asia, extremely exciting, driven by a lot of the markets that you would typically think of, obviously digital consumer but also industrial and as I said even automotive. So our breadth of coverage in Asia is getting much stronger. And one of the variables that we think about is as usual what impact will Chinese New Year have in the quarter and will that explosive strength continue into the March quarter. Short of that we see what looks like a much more predictable and typical March in the west.

Your next question comes from the line of Brian Alexander – Raymond James Brian Alexander – Raymond James: The operating margins implied in the March guidance suggest flat sequential trends despite some positive mix shifts such as greater mix of EM, greater mix of Americas and Europe within EM and just the overall benefits of a cyclical recovery, and historically its not uncommon to see March operating margins up versus December even though TS falls off seasonally, so could you just talk about the margin trends by segment for the March quarter and what are the factors limited margin expansion sequentially.

I think simply put if we talk about EM versus TS for a minute, EM operating margin will be up significantly on a sequential basis. Sort of well above 50 basis points of improvement sequentially and that is due to the point you’re making, typically we have growth in the west and contraction in the east and then on top of that we’re expecting margin expansion within the regions themselves. So we’re going to have nice operating expansion at EM. Then at TS we’re coming off of a 3.8% performance in the December quarter on a significant number so there is a decline projected at TS in operating margin even though there is an expectation for expanded gross margin there. And that decline in operating margin is specifically attributable to volume. Its just volume. So the biggest issue in the numbers relative to our historical patterns are simply the size of the TS business relative to EM compared to prior periods. I’d only add to that within the EM leverage bear in mind that Asia is becoming a much bigger part of the total specifically, that’s been a secular trend of course, but specifically just in the last three, four quarters Asia has grown dramatically as a percentage of EM’s total. So those are the two things that are happening. On a group and region basis, we’re very happy with the revenue and the operating leverage that we’re getting through the P&Ls. Brian Alexander – Raymond James: On the corporate overhead line why was that amount I think it was more than you thought, $18 million I thought we were thinking it would be $13 or $14 million, is that related to bonus accruals or has there been some reclassification of expenses from the segments to overhead.

It’s a number of different items and if you go back I guess a little bit in history, you’ve probably seen that the run rate of corporate expense has been about $18 million or so. Last year down significantly for two primary reasons, one level of executive compensation down from prior periods, not only from a cash compensation perspective but also from a stock perspective as well. In addition to that last year not only having its lower level of expenses as I think we’ve pointed out a year ago also some reversals of accruals from prior years related to stock compensation just to compensate for the magnitude of the downturn in business. So if you look at what we ran last year essentially which was in that $13, $14 million quarter, its more of an anomaly then anything else just because of the low level of business. Now as you fast forward today, business is better so compensation levels from an incentive compensation both in cash and equity are up by a fair amount and that’s accounting for most of the year over year increase that you’re seeing in expenses. In addition to that within corporate specifically we’ve had some increases in professional fees year over year and in addition to that I’ll point out globally which also some of which is included in corporate but also a little bit in the business units as well, is the fact that under the new accounting rules we are expensing some M&A related cost that previously would have been capitalized. Again not a huge number in the grand scheme of things that’s why we didn’t point it out anywhere but on a consolidated basis I believe we expensed about $1.5 million in M&A related expenses just because of new accounting rules that we would not have had in the past. Again not all of that in corporate, just a little bit there so it’s a combination of those I guess three factors that I pointed out overall causing the number to be higher. Brian Alexander – Raymond James: And this the right baseline to model off of.

Yes this will be the right baseline, it may trend up a little bit so I’m looking at a baseline in the $16 to $18 million range on a go forward basis so back to what it was, if you go back to the 2008 timeframe.

Based on what we know today its likely to be down sequential closer to the $16 number but it would depend for example on M&A activity and the expensing of these professional fees.

Your next question comes from the line of Matt Sheerin – Thomas Weisel Partners Matt Sheerin – Thomas Weisel Partners: So I want to get back to the issue of inventories, you said that inventory was up I think 10% in the quarter how much was up in component inventory.

Essentially all of it.

I want to say, so TS inventory globally was up $7 million. The rest was EM. Matt Sheerin – Thomas Weisel Partners: And as you’ve built the inventory is it across the board or are you basically building inventory on components where lead times are stretching so you’re building that buffer because you basically have to get orders in with the suppliers.

I guess one additional color point I’d make to Roy’s comment on the inventory is that the bulk of what we purchased was in Asia. So the majority of the increase was EM and a good portion of it was Asia. And to answer your specific question on the purpose, clearly if we had our druthers we’d buy even more of long lead time product because obviously that affords us a margin opportunity. But I think it really is primarily from a strategy perspective all around raising our pipelines in support of overall improvement in the business.

And I would just, I know this is a little bit redundant, I apologize for that but, we manage inventory from the bottom up. Its handled at a transaction level by location, by day, by SKU, and there’s two drivers, increased units, and extended lead time. And our team is constantly using our tools and managing against those two parameters so I would say to your question yes it is influenced by lead time but its also influenced by higher units. Matt Sheerin – Thomas Weisel Partners: And do you expect your inventory in the March quarter to be up at a similar rate as the sales increase or higher.

I think following the pattern that we have established we expect it to be up but probably not as rapidly as sales. Matt Sheerin – Thomas Weisel Partners: So on a [days] basis it should be pretty much in line.

I would say we should be flat to improved on a velocity or days basis. I would agree, flat would be the high end. Matt Sheerin – Thomas Weisel Partners: And just following up on one of the questions on your mix of business within components and as it relates to gross margin because you’re still down 100 to 150 basis points give or take on gross margin because of the mix, greater sales in Asia, weaker sales in Europe, smaller customers and then also there was some pricing competition so how much do you think you can get back given that Asia in all likelihood will continue to be the greater percentage of the pie even as Europe and North America come back.

It’s a bit of a moving target, so I want to give a general comment and the reason is it depends on what baseline you’re measuring it against but if it use your metric of 100 to 150 basis points I tend to see it as about two thirds market pressure, competitiveness and one third regional mix. So if you take the regional mix aside because I think as Roy said earlier we’re very proud of the job the team is doing in managing the combination of inventory and working capital velocity as Raymond showed to operating income. So if you focus on the portion of it that is really primarily driven by competitive pressures, the way we tend to think about it is the biggest driver to improvement there clearly will be continued improvement and growth in our broad industrial base primarily in the west. And as I think we’ve said in the opening remarks we saw encouraging signs in December, we continue to believe that trend will be positive through March. So that’s as far as I want to predict going out. But was also talked about the impact of demand creation energies and how all the design activity turning to production wins will impact our gross margin and another piece we haven’t actually talked about in awhile, was one of the areas that was hit the hardest for us through the downturn was actually our ability to make upside margin on commodity purchases. And that is a difficult thing to do when everything is zero lead time. So as lead times extend we see opportunities to place purchases and make upside income so those are the areas that we, that give us the belief that that portion of the margin that is not mix related is recoverable and we think we will over the next number of quarters.

Its difficult to forecast the mix part of the equation although what I would say is that we expect the rate of change in terms of our shift to Asia to revert back to the pre-recession rate. It was accelerated during the downturn because Asia performed better on a relative basis to our western regions. If you exclude that we still expect to regain most if not all of our margin on a by region basis. In terms of timeframe I’d say give us three to five quarters to get it fully recovered with progress being made hopefully in each quarter.

Your next question comes from the line of Jim Suva – Citi Jim Suva – Citi : Regarding I believe your operating margin goals for the company wide is about 4 to 4.5% operating margin goal and can you help me understand first of all (a) does that include more Asia business coming in which is lower margin which I assume it does since it’s a long-term goal you have and (b) do we look at we can actually get that in the next year or two or is that kind of a stretched goal to be reaching out that far to be getting something closer to a 4% since its literally been only just over a year when you were actually getting in that range.

First of all you’re correct, 4 to 4.5% is the enterprise operating margin business model. Secondly at the time we communicated that which was only last December we were talking about that as a three year goal. What’s happening is the recovery is taking place sooner or more aggressively than we would have anticipated at that time. So today I would say perhaps it’s a two year kind of a goal depending on how long this rate of recovery or strengthening in the market sustains itself. And yes it did include the organic Asia growth but no we do not include any potential M&A that could skew it either one way or the other depending on the geography of that M&A. Jim Suva – Citi : Can you just let us know for there’s this line in your income statement called other income and expense items which has been moving around a fair amount over the past few quarters, what to expect for that going forward as well as now that you’re restructuring is pretty much over for SG&A obviously some of it is going to have to grow with sales a little bit but what type of SG&A level should we be expecting.

So first on the other income line, generally speaking when we kind of look at that line and forecast it we forecast it to be zero. What’s in there typically is interest income which in this marketplace as you know is relatively small, and then foreign currency gains and losses which unfortunately we’ve had more losses than gains recently which have somewhat offset the small interest income we’ve had and obviously cost of hedging and things like that are thrown in there. So typically unfortunately it does move up and down as currency is volatile but that’s the main driver to that particular number there and this quarter we had a one-time gain on the sale of an asset as we pointed out of $5 million so that’s on a separate line item in the financial statement so that’s something that’s just unusual and unpredictable. So that line shouldn’t be more than plus or minus $1 or $2 million per quarter unless something unusual happens. In terms of SG&A we would expect as I mentioned earlier, restructuring for the most part is finished so as we move forward as business starts to improve you would expect to see SG&A move up again for a variety of different reasons, one just to support the growth in business and as we’ve talked about we manage expenses in a number of different ways but primarily through drop through. And so expectations for drop through in the early part of the recovery will be fairly high and that again depending upon the region, 60, 70, 80% in some cases more than that so maybe averaging it at the Avnet level roughly in that 70% range from a drop through perspective. And in addition to that as Roy mentioned earlier, there may be some opportunities from a strategic perspective of making further investments in the business to facilitate organic growth and as you know in our business investment in organic growth means more expense dollars. And so as we move forward there certainly could be some incremental expenses associated with those initiatives and that would of course depend upon what the environment is like as we move forward.

Your next question comes from the line of Brendan Furlong – Miller Tabak Brendan Furlong – Miller Tabak : Question on the EM side just curious why Europe continues to be so much than your US component business, why Europe seems better and US is lagging or whatever way you want to approach it.

I don’t think we would describe it that way. I think we would say to you that our Europe business typically runs higher margin than our Americas business however in terms of down cycle and the recovery our Americas business started improving in the September quarter, our Europe business has lagged a bit. We had pretty good bookings in the December quarter and we’re expecting a good revenue sequential performance out of Europe and nice operating leverage on that. But I would describe to you our Europe business has been lagging our Americas business for the last couple of quarters here. Brendan Furlong – Miller Tabak : I’m not talking about the margins, I’m just looking at the revenue on a year over year basis if you look at it on a reported basis—

I think that’s all about currency. We run the region of course in Euros and so I think when you look at the reported results its typically about currency and then keep an eye on M&A. We had a transaction at the beginning of last calendar year called Abacus which is benefiting our European results. Brendan Furlong – Miller Tabak : And then you kind of approached this or you alluded to this in TS in terms of two very strong unseasonal quarters and now we’ve had three if you include the upcoming March quarter three unseasonal EM quarters, I’m just curious what your take is on seasonality after that. You said TS is probably going to be your factoring in some little bit of give back in TS, what do you think in EM and if you look at it as you approach it on your classic bullwhip as you’ve talked about in the past, what do you think about it.

We think the supply chain has pretty much normalized at this point and therefore we think that the EM piece which underperformed the end markets for a few quarters is now over performing the end markets for a few quarters and then we’re, as you get into that June quarter and possibly beyond it is more likely that we’re going to see those two businesses move in sync and growth is going to be largely dependent upon what happens from a macroeconomic point of view.

Your next question comes from the line of Amitabh Passi – UBS Amitabh Passi – UBS : I just wanted to clarify one point, I think you had a slide or in your prepared comments you talked about sequential improvements in gross margin in both your segments yet I think at the enterprise level gross margin was down. So I just wanted to make sure I wasn’t missing something, if you maybe just clarify that comment.

You are 100% correct. We had sequential improvement at both operating groups but the very strong growth at TS caused the enterprise margin to be down sequential by five basis points. Amitabh Passi – UBS : And the just wondering if there’s any update or any incremental insight around the Cisco UCS opportunity you announced back in December.

Actually the latest update is positive. We’ve launched the Cisco business unit. We’ve set up a separate business unit within the TS Americas organization. We’ve named a leader, Chris Swan, who is a seasoned veteran in the industry. And he’s currently building his strategy, building his structure, and working day in day out with the Cisco business unit team to go after the market. So basically they hired us to be a valued solutions distributor so its going to take some time for us to build those solutions and create that demand so the revenue this quarter negligible, but over time as we build the solutions and drive that demand creation we see some positive in the calendar year. Amitabh Passi – UBS : Historically when you’ve talked about M&A you’ve talked about it in the context of geographies or in the context of your two major segments I was just wondering in terms of market adjacencies are you able to add any comments in terms of what other areas are kind of interesting. You recently acquired Specter, that seems to get you into this imbedded antennae space, one of your big competitors acquired a company that gets them into aerospace and defense, so just curious how you’re looking at maybe some alternative markets and just any additional insights there.

So we are looking at adjacent markets however as I think about our M&A pipeline all but one opportunity would be within our EM and TS businesses in various geographies and we have one opportunity that would be more along the lines of an adjacent market. So we are looking at adjacencies but not anticipating significant activity there. Most of the activity in calendar 2010 will be within our two groups.

Your next question comes from the line of Shawn Harrison – Longbow Research Shawn Harrison – Longbow Research: When looking at TS it looks like the EBIT margins, the operating profit margin was within the targeted range provided at the analyst day even though it looks like gross margins were maybe down 60 basis points year over year, I guess the question is is there upside now to that range given the performance in the quarter and if so, where would the upside come from in terms of gross margins as well as EBIT margins.

I’m looking at your year over year, you’re probably not too far off due mainly to our growth in Asia. But bear in mind the December operating margin is clearly benefited by the seasonal pattern. And so as we talked a little bit earlier on the call there’s going to be a contraction in that margin in the March, June, and September quarters and then a reload next December. So I think we’re still looking at let’s say calendar 2010 or fiscal 2011 trying to get TS globally performing at the lower end of that range on a rolling four quarter basis. Each December quarter we would expect to get into the range and possibly even above and the rolling four quarter number we’re going to need one to two years to get there on a consistent basis. Shawn Harrison – Longbow Research: In the upside there, still lies more with EMEA versus any other region.

Well so look our Americas region is performing very well. Mix does move the margin around a little bit, mix of business, but from a margin and return point of view its performing very well and in fact, literally above that range. EMEA is the business where we are working on both our operational and our financial performance and trying to build scale so yes, there is significant upside there. But now as of the December quarter we have a business in Asia that’s clocking $900 million heading for a billion here in the not too distant future and we’re running that business at just slightly positive operating income because we’re investing heavily on an organic basis in places like China, and India. So as we, as the rate of growth in our Asia business slows, we will begin to harvest the profits and that region will come up also. So that’s why I hesitated on your statement, yes EMEA progress will help the TS enterprise margin but so will the, I guess I’d describe as the maturation of Asia as we being to harvest profits there. Shawn Harrison – Longbow Research: And then it looks like we should witness a pretty good release of cash flow from operations in the March quarter is that correct but you may burn cash a slight amount for the full fiscal year.

For the full fiscal year I still think we’ll generate cash, again the fiscal year ending in June just based on what we’ve done in the first half of the fiscal year. As we move forward for the balance of the year expectations I guess for the March quarter probably not going to be robust cash generation mainly because we’ll obviously have cash generation from a TS perspective as the business slows down from a seasonal perspective but then you’ll see some working capital investments in EM as their quarter move forward so when you pull all that together I would expect cash from operations to be flattish, could be slightly up or slightly down, but nothing significant at this point in time.

And the drivers, there’s two things that are going to drive that, one is the rate of growth so we do, you know that we took a billion of working capital out as the revenue declined. We’re going to have to put most of that back as the revenue grows so depending upon how fast it grows that will determine the impact on cash flow. The other thing that drives it of course is how big are the retained earnings on that revenue and what drives that is what’s the mix. Where’s the revenue coming from. So depending on rate of growth and mix of business that will ultimately drive our cash flow meanwhile we’re going to run the company based on return on capital and continuing to focus on improving both our operating margins and our working capital velocity.

Your final question comes from the line of Scott Craig – Bank of America Scott Craig – Bank of America : Did you give a rough book to bill number by region or anything like that and then secondly on the operating profit in Asia for TS how much longer do you run that at let’s call it roughly around break-even before you start to get higher levels of profitability over there.

What we’re saying on the EM book to bill ratio is that for the second quarter in a row we had a book to bill that was above 1.1 to 1. It was actually up sequentially and really the only reason why we don’t want to give a specific number is that book to bill ratios are interesting animals and we just don’t want too much reaction to that number. But it was I would call it robust for the second quarter in a row and actually up sequentially.

If I could add, in each region.

In each region. On the investment rate, the variable there us is the rate of organic growth. If the rate of growth stays very high we’re going to want to continue to invest and double down so to speak, and then the way we think about organic investments is as the rate of growth slows, another way to say that is, as our business matures, then we will increase the harvest and the profitability that we pull out of the region.

There are no additional questions at this time; I would like to turn it back over to management for any additional or closing comments.

Thank you for participating in our earnings call today. As we conclude we will scroll through 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 is available on our website and can be accessed and downloadable in PDF form.

Thanks everybody.