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    Arrow Electronics, Inc.

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    Arrow Electronics Reports Third-Quarter 2018 Results

    November 01, 2018

    -- Record Third-Quarter Sales, Gross Profit, Operating Income, and Earnings Per Share --

    -- Third-Quarter Cash Flow from Operations of $494 Million --

    CENTENNIAL, Colo.--(BUSINESS WIRE)-- Arrow Electronics, Inc. (NYSE:ARW) today reported third-quarter 2018 sales of $7.49 billion, an increase of 9 percent from sales of $6.86 billion in the third quarter of 2017. Third-quarter net income of $177 million, or $1.99 per share on a diluted basis, compared with net income of $134 million, or $1.50 per share on a diluted basis, in the third quarter of 2017. Excluding certain items1, net income would have been $193 million, or $2.18 per share on a diluted basis, in the third quarter of 2018, compared with net income of $161 million, or $1.80 per share on a diluted basis, in the third quarter of 2017. Excluding certain items1, net income increased 20 percent year over year, and earnings per share on a diluted basis increased 21 percent year over year.

    “Our investments in engineering and working capital are bearing fruit as evidenced by our results,” said Michael J. Long, chairman, president, and chief executive officer. “We are ahead of pace to deliver another record year in 2018.”

    Global components third-quarter sales of $5.38 billion increased 11 percent year over year. Americas components sales increased 13 percent year over year. Europe components sales increased 11 percent year over year. Sales in the region, as adjusted, increased 13 percent year over year. Asia-Pacific components sales increased 8 percent year over year. Global components third-quarter operating income increased 28 percent year over year.

    “This quarter we made significant advancements toward future high-growth opportunities in the areas of smart cities, edge computing, and artificial intelligence,” said Mr. Long. “These opportunities require all our capabilities across the enterprise to provide complete lifecycle solutions.”

    Global enterprise computing solutions third-quarter sales of $2.11 billion increased 6 percent year over year. Sales, as adjusted, increased 9 percent year over year. Americas enterprise computing solutions sales increased 7 percent year over year. Sales in the region, as adjusted, increased 13 percent year over year. Europe enterprise computing solutions sales increased 3 percent year over year. Sales in the region, as adjusted, increased 2 percent year over year. Global enterprise computing solutions third-quarter operating income decreased 13 percent year over year and decreased 15 percent year over year excluding amortization of intangibles expense. Global enterprise computing solutions operating expenses included $6 million of expense related to prior period sales taxes abroad.

    “Return on invested capital increased year over year for the fifth straight quarter. Third-quarter cash flow from operations was $494 million as our need to support growth through working capital investments moderated,” said Chris Stansbury, senior vice president and chief financial officer. “Our strong cash flow performance allowed us to reduce leverage during the quarter. We also remain committed to returning excess cash to shareholders. During the third quarter, we returned approximately $20 million to shareholders through our stock repurchase program. We had approximately $279 million of remaining authorization under our share repurchase program at the end of the third quarter.”

    NINE-MONTH RESULTS

    In the first nine months of 2018, Arrow’s sales of $21.76 billion increased 14 percent from sales of $19.02 billion in the first nine months of 2017. Net income for the first nine months of 2018 was $486 million, or $5.47 per share on a diluted basis, compared with net income of $349 million, or $3.88 per share on a diluted basis in the first nine months of 2017. Excluding certain items1, net income would have been $556 million, or $6.26 per share on a diluted basis, in the first nine months of 2018 compared with net income of $452 million, or $5.03 per share on a diluted basis, in the first nine months of 2017.

    1 A reconciliation of non-GAAP adjusted financial measures, including sales, as adjusted, operating income, as adjusted, net income attributable to shareholders, as adjusted, and net income per share, as adjusted, to GAAP financial measures is presented in the reconciliation tables included herein.

    GUIDANCE

    “As we look to the fourth quarter, we believe that total sales will be between $7.7 billion and $8.1 billion, with global components sales between $5.175 billion and $5.375 billion, and global enterprise computing solutions sales between $2.525 billion and $2.725 billion. As a result of this outlook, we expect earnings per share on a diluted basis to be in the range of $2.21 to $2.37, and earnings per share on a diluted basis, excluding certain items1, to be in the range of $2.46 to $2.62 per share. Our guidance assumes an average tax rate of 23.5 percent to 25.5 percent, and average diluted shares outstanding are expected to be approximately 88 million. Guidance is based on an average USD-to-Euro exchange rate for the fourth quarter of approximately $1.16 to €1. At the midpoints of our fourth-quarter guidance ranges, full-year 2018 sales would total approximately $29.66 billion, and would grow 12 percent compared to full-year 2017. Full-year 2018 earnings per share, on a diluted basis, excluding certain items1, would total approximately $8.80 and would grow 17 percent compared to full-year 2017,” said Mr. Stansbury.

    Please refer to the CFO commentary, which can be found at investor.arrow.com, as a supplement to the company’s earnings release.

    Arrow Electronics guides innovation forward for over 150,000 of the world’s leading manufacturers of technology used in homes, business and daily life. With 2017 sales of $26.6 billion, Arrow aggregates electronics and enterprise computing solutions for customers and suppliers in industrial and commercial markets. The company maintains a network of more than 345 locations serving over 80 countries. Learn more at FiveYearsOut.com.

    Information Relating to Forward-Looking Statements

    This press release includes forward-looking statements that are subject to numerous assumptions, risks, and uncertainties, which could cause actual results or facts to differ materially from such statements for a variety of reasons, including, but not limited to: industry conditions, the company's implementation of its new enterprise resource planning system, changes in product supply, pricing and customer demand, competition, other vagaries in the global components and global enterprise computing solutions markets, changes in relationships with key suppliers, increased profit margin pressure, the effects of additional actions taken to become more efficient or lower costs, risks related to the integration of acquired businesses, changes in legal and regulatory matters, and the company’s ability to generate additional cash flow. Forward-looking statements are those statements which are not statements of historical fact. These forward-looking statements can be identified by forward-looking words such as "expects," "anticipates," "intends," "plans," "may," "will," "believes," "seeks," "estimates," and similar expressions. Shareholders and other readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. The company undertakes no obligation to update publicly or revise any of the forward-looking statements.

    For a further discussion of factors to consider in connection with these forward-looking statements, investors should refer to Item 1A Risk Factors of the company’s Annual Report on Form 10-K for the year ended Dec. 31, 2017.

    Certain Non-GAAP Financial Information

    In addition to disclosing financial results that are determined in accordance with accounting principles generally accepted in the United States (“GAAP”), the company also provides certain non-GAAP financial information relating to sales, operating income, net income attributable to shareholders, and net income per basic and diluted share. The company provides sales, income, or expense on a non-GAAP basis adjusted for the impact of changes in foreign currencies and the impact of acquisitions/dispositions by adjusting the company's operating results, including the amortization expense related to acquired/disposed intangible assets, as if the acquisitions/dispositions had occurred at the beginning of the earliest period presented (referred to as "impact of acquisitions" and "impact of dispositions"). Operating income, net income attributable to shareholders, and net income per basic and diluted share are adjusted to exclude identifiable intangible amortization, restructuring, integration, and other charges, and certain charges, credits, gains, and losses that the company believes impact the comparability of its results of operations. These charges, credits, gains, and losses arise out of the company’s efficiency enhancement initiatives, acquisitions/dispositions (including intangible assets amortization expense), and financing activities. A reconciliation of the company’s non-GAAP financial information to GAAP is set forth in the tables below.

    The company believes that such non-GAAP financial information is useful to investors to assist in assessing and understanding the company’s operating performance and underlying trends in the company’s business because management considers these items referred to above to be outside the company’s core operating results. This non-GAAP financial information is among the primary indicators management uses as a basis for evaluating the company’s financial and operating performance. In addition, the company’s Board of Directors may use this non-GAAP financial information in evaluating management performance and setting management compensation.

    The presentation of this additional non-GAAP financial information is not meant to be considered in isolation or as a substitute for, or alternative to, sales, operating income, net income and net income per basic and diluted share determined in accordance with GAAP. Analysis of results and outlook on a non-GAAP basis should be used as a complement to, and in conjunction with, data presented in accordance with GAAP.

     
    ARROW ELECTRONICS, INC.
    CONSOLIDATED STATEMENTS OF OPERATIONS
    (In thousands except per share data)
    (Unaudited)
                           
    Quarter Ended Nine Months Ended
    September 29, 2018     September 30, 2017 September 29, 2018     September 30, 2017
    (Adjusted) (Adjusted)
    Sales $ 7,490,445 $ 6,856,108 $ 21,758,586 $ 19,015,114
    Cost of sales 6,566,667   6,013,541   19,033,044   16,587,326  
    Gross profit 923,778   842,567   2,725,542   2,427,788  
    Operating expenses:
    Selling, general, and administrative expenses 575,751 552,656 1,719,108 1,599,963
    Depreciation and amortization 45,532 38,574 139,201 113,096
    Loss on disposition of businesses, net 2,042 — 3,604 —
    Restructuring, integration, and other charges 10,143   15,896   50,497   55,817  
    633,468   607,126   1,912,410   1,768,876  
    Operating income 290,310 235,441 813,132 658,912
    Equity in earnings (losses) of affiliated companies (652 ) 1,216 (808 ) 2,865
    Gain (loss) on investments, net 1,070 (13,029 ) (3,945 ) (8,784 )
    Loss on extinguishment of debt — 786 — 59,545
    Employee benefit plan expense 1,296 1,850 3,784 5,547
    Interest and other financing expense, net 54,205   40,111   160,187   120,898  
    Income before income taxes 235,227 180,881 644,408 467,003
    Provision for income taxes 57,054   45,972   155,325   115,128  
    Consolidated net income 178,173 134,909 489,083 351,875
    Noncontrolling interests 1,640   845   3,541   3,352  
    Net income attributable to shareholders $ 176,533   $ 134,064   $ 485,542   $ 348,523  
     
    Net income per share:
    Basic $ 2.02   $ 1.52   $ 5.53   $ 3.92  
    Diluted $ 1.99   $ 1.50   $ 5.47   $ 3.88  
     
    Weighted-average shares outstanding:
    Basic 87,602 88,453 87,785 88,870
    Diluted 88,608 89,540 88,759 89,936
     
     
    ARROW ELECTRONICS, INC.
    CONSOLIDATED BALANCE SHEETS
    (In thousands except par value)
    (Unaudited)
           
    September 29, 2018 December 31, 2017
    (Adjusted)
    ASSETS
    Current assets:
    Cash and cash equivalents $ 474,191 $ 730,083
    Accounts receivable, net 8,229,791 8,125,588
    Inventories 3,722,808 3,302,518
    Other current assets 292,641   256,028  

    Total current assets

    		12,719,431   12,414,217  
    Property, plant, and equipment, at cost:
    Land 13,168 12,866
    Buildings and improvements 159,754 160,664
    Machinery and equipment 1,415,619   1,330,730  
    1,588,541 1,504,260
    Less: Accumulated depreciation and amortization (749,978 ) (665,785 )
    Property, plant, and equipment, net 838,563   838,475  
    Investments in affiliated companies 85,175 88,347
    Intangible assets, net 313,472 286,215
    Goodwill 2,659,335 2,470,047
    Other assets 362,049   361,966  
    Total assets $ 16,978,025   $ 16,459,267  
    LIABILITIES AND EQUITY
    Current liabilities:
    Accounts payable $ 6,886,217 $ 6,756,830
    Accrued expenses 797,088 841,675
    Short-term borrowings, including current portion of long-term debt 158,153   356,806  
    Total current liabilities 7,841,458   7,955,311  
    Long-term debt 3,352,128 2,933,045
    Other liabilities 482,397 572,971
    Commitments and contingencies
    Equity:
    Shareholders' equity:
    Common stock, par value $1:
    Authorized - 160,000 shares in both 2018 and 2017, respectively
    Issued - 125,424 shares in both 2018 and 2017, respectively 125,424 125,424
    Capital in excess of par value 1,129,345 1,114,167
    Treasury stock (38,251 and 37,733 shares in 2018 and 2017, respectively), at cost (1,824,373 ) (1,762,239 )
    Retained earnings 6,104,682 5,596,786
    Accumulated other comprehensive loss (283,051 ) (124,883 )
    Total shareholders' equity 5,252,027 4,949,255
    Noncontrolling interests 50,015   48,685  
    Total equity 5,302,042   4,997,940  
    Total liabilities and equity $ 16,978,025   $ 16,459,267  
     
     
    ARROW ELECTRONICS, INC.
    CONSOLIDATED STATEMENTS OF CASH FLOWS
    (In thousands)
    (Unaudited)
     
      Quarter Ended
    September 29, 2018     September 30, 2017
    Cash flows from operating activities: (Adjusted)
    Consolidated net income $ 178,173 $ 134,909
    Adjustments to reconcile consolidated net income to net cash used for operations:
    Depreciation and amortization 45,532 38,574
    Amortization of stock-based compensation 12,442 8,910
    Equity in (earnings) losses of affiliated companies 652 (1,216 )
    Loss on extinguishment of debt — 786
    Deferred income taxes 5,063 1,437
    Gain (loss) on investments, net (1,070 ) 10,254
    Other 4,053 1,457
    Change in assets and liabilities, net of effects of acquired and disposed businesses:
    Accounts receivable (180,770 ) (445,515 )
    Inventories 43,867 (111,181 )
    Accounts payable 412,422 487,904
    Accrued expenses 15,693 48,065
    Other assets and liabilities (41,652 ) (39,495 )

    Net cash provided by operating activities

    		494,405   134,889  
     
    Cash flows from investing activities:
    Cash consideration paid for acquired businesses, net of cash acquired — (1,094 )
    Proceeds from disposition of businesses (2,278 ) —
    Acquisition of property, plant, and equipment (38,346 ) (47,691 )
    Other (3,000 ) 533  
    Net cash used for investing activities (43,624 ) (48,252 )
     
    Cash flows from financing activities:
    Change in short-term and other borrowings 44,545 (54,697 )
    Repayment of long-term bank borrowings, net (338,579 ) (324,584 )
    Proceeds from note offerings, net — 492,519
    Redemption of notes — 2,214
    Proceeds from exercise of stock options 1,934 726
    Repurchases of common stock (20,622 ) (25,462 )
    Other (1,018 ) (675 )
    Net cash provided by (used for) financing activities (313,740 ) 90,041  
    Effect of exchange rate changes on cash 6,631   (12,257 )
    Net increase in cash and cash equivalents 143,672 164,421
    Cash and cash equivalents at beginning of period 330,519   419,918  
    Cash and cash equivalents at end of period $ 474,191   $ 584,339  
     
     
    ARROW ELECTRONICS, INC.
    CONSOLIDATED STATEMENTS OF CASH FLOWS
    (In thousands)
    (Unaudited)
     
      Nine Months Ended
    September 29, 2018     September 30, 2017
    Cash flows from operating activities: (Adjusted)
    Consolidated net income $ 489,083 $ 351,875
    Adjustments to reconcile consolidated net income to net cash provided by operations:
    Depreciation and amortization 139,201 113,096
    Amortization of stock-based compensation 38,104 30,301
    Equity in (earnings) losses of affiliated companies 808 (2,865 )
    Loss on extinguishment of debt — 59,545
    Deferred income taxes 17,769 13,262
    Loss on investments, net 3,945 9,504
    Other 9,660 7,415
    Change in assets and liabilities, net of effects of acquired and disposed businesses:
    Accounts receivable (254,417 ) (26,286 )
    Inventories (456,050 ) (261,126 )
    Accounts payable 171,697 (113,804 )
    Accrued expenses 15,177 (42,267 )
    Other assets and liabilities (165,421 ) (136,871 )
    Net cash provided by operating activities 9,556   1,779  
     
    Cash flows from investing activities:
    Cash consideration paid for acquired businesses, net of cash acquired (331,563 ) (3,628 )
    Proceeds from disposition of businesses 32,013 —
    Acquisition of property, plant, and equipment (104,897 ) (149,597 )
    Proceeds from sale of property, plant, and equipment — 24,433
    Other (11,000 ) (2,467 )
    Net cash used for investing activities (415,447 ) (131,259 )
     

    Cash flows from financing activities:

    Change in short-term and other borrowings 104,158 (14,423 )
    Proceeds from (repayments of) long-term bank borrowings, net 420,755 (82,766 )
    Proceeds from note offerings, net — 987,144
    Redemption of notes (300,000 ) (555,886 )
    Proceeds from exercise of stock options 7,919 21,423
    Repurchases of common stock (93,173 ) (149,125 )
    Purchase of shares from noncontrolling interest — (23,350 )
    Other (1,174 ) (1,620 )
    Net cash provided by financing activities 138,485   181,397  
    Effect of exchange rate changes on cash 11,514   (1,898 )
    Net increase (decrease) in cash and cash equivalents (255,892 ) 50,019
    Cash and cash equivalents at beginning of period 730,083   534,320  
    Cash and cash equivalents at end of period $ 474,191   $ 584,339  
     
     
    ARROW ELECTRONICS, INC.
    NON-GAAP SALES RECONCILIATION
    (In thousands)
    (Unaudited)
        Quarter Ended    
    September 29, 2018     September 30, 2017 % Change
    (Adjusted)
    Consolidated sales, as reported $ 7,490,445 $ 6,856,108 9.3 %
    Impact of changes in foreign currencies — (50,425 )
    Impact of acquisitions — 35,540
    Impact of dispositions —   (56,277 )
    Consolidated sales, as adjusted $ 7,490,445   $ 6,784,946   10.4 %
     
    Global components sales, as reported $ 5,381,078 $ 4,864,361 10.6 %
    Impact of changes in foreign currencies — (32,310 )
    Impact of acquisitions —   21,475  
    Global components sales, as adjusted $ 5,381,078   $ 4,853,526   10.9 %
     
    Americas Components sales, as reported $ 2,060,920 $ 1,816,772 13.4 %
    Impact of changes in foreign currencies — (3,585 )
    Impact of acquisitions —   21,475  
    Americas Components sales, as adjusted $ 2,060,920   $ 1,834,662   12.3 %
     
    Europe components sales, as reported $ 1,399,435 $ 1,262,048 10.9 %
    Impact of changes in foreign currencies — (24,379 )
    Impact of acquisitions —   —  
    Europe components sales, as adjusted $ 1,399,435   $ 1,237,669   13.1 %
     
    Asia components sales, as reported $ 1,920,723 $ 1,785,541 7.6 %
    Impact of changes in foreign currencies — (4,346 )
    Impact of acquisitions —   —  
    Asia components sales, as adjusted $ 1,920,723   $ 1,781,195   7.8 %
     
    Global ECS sales, as reported $ 2,109,367 $ 1,991,747 5.9 %
    Impact of changes in foreign currencies — (18,115 )
    Impact of acquisitions — 14,065
    Impact of dispositions —   (56,277 )
    Global ECS sales, as adjusted $ 2,109,367   $ 1,931,420   9.2 %
     
    Europe ECS sales, as reported $ 651,648 $ 634,038 2.8 %
    Impact of changes in foreign currencies — (6,577 )
    Impact of acquisitions — 14,065
    Impact of dispositions —   (1,001 )
    Europe ECS sales, as adjusted $ 651,648   $ 640,525   1.7 %
     
    Americas ECS sales, as reported $ 1,457,719 $ 1,357,709 7.4 %
    Impact of changes in foreign currencies — (11,538 )
    Impact of acquisitions — —
    Impact of dispositions —   (55,276 )
    Americas ECS sales, as adjusted $ 1,457,719   $ 1,290,895   12.9 %
     
     
    ARROW ELECTRONICS, INC.
    NON-GAAP SALES RECONCILIATION
    (In thousands)
    (Unaudited)
        Nine Months Ended    
    September 29, 2018     September 30, 2017 % Change
    (Adjusted)
    Consolidated sales, as reported $ 21,758,586 $ 19,015,114 14.4 %
    Impact of changes in foreign currencies — 358,294
    Impact of acquisitions — 110,752
    Impact of dispositions (27,493 ) (171,563 )
    Consolidated sales, as adjusted $ 21,731,093   $ 19,312,597   12.5 %
     
    Global components sales, as reported $ 15,595,374 $ 13,385,514 16.5 %
    Impact of changes in foreign currencies — 233,172
    Impact of acquisitions —   63,475  
    Global components sales, as adjusted $ 15,595,374   $ 13,682,161   14.0 %
     
    Americas Components sales, as reported $ 5,795,500 $ 5,080,558 14.1 %
    Impact of changes in foreign currencies — (2,997 )
    Impact of acquisitions —   63,475  
    Americas Components sales, as adjusted $ 5,795,500   $ 5,141,036   12.7 %
     
    Europe components sales, as reported $ 4,325,793 $ 3,572,720 21.1 %
    Impact of changes in foreign currencies — 211,822
    Impact of acquisitions —   —  
    Europe components sales, as adjusted $ 4,325,793   $ 3,784,542   14.3 %
     
    Asia components sales, as reported $ 5,474,081 $ 4,732,236 15.7 %
    Impact of changes in foreign currencies — 24,347
    Impact of acquisitions —   —  
    Asia components sales, as adjusted $ 5,474,081   $ 4,756,583   15.1 %
     
    Global ECS sales, as reported $ 6,163,212 $ 5,629,600 9.5 %
    Impact of changes in foreign currencies — 125,122
    Impact of acquisitions — 47,277
    Impact of dispositions (27,493 ) (171,563 )
    Global ECS sales, as adjusted $ 6,135,719   $ 5,630,436   9.0 %
     
    Europe ECS sales, as reported $ 2,123,048 $ 1,870,003 13.5 %
    Impact of changes in foreign currencies — 129,234
    Impact of acquisitions — 47,277
    Impact of dispositions —   (2,883 )
    Europe ECS sales, as adjusted $ 2,123,048   $ 2,043,631   3.9 %
     
    Americas ECS sales, as reported $ 4,040,164 $ 3,759,597 7.5 %
    Impact of changes in foreign currencies — (4,112 )
    Impact of acquisitions — —
    Impact of dispositions (27,493 ) (168,680 )
    Americas ECS sales, as adjusted $ 4,012,671   $ 3,586,805   11.9 %
     
     
    ARROW ELECTRONICS, INC.
    NON-GAAP EARNINGS RECONCILIATION
    (In thousands except per share data)
    (Unaudited)
     
    Three months ended September 29, 2018
        Reported
    GAAP
    measure     		    Intangible
    amortization
    expense     		    Restructuring
    & Integration
    charges     		    Other*     Non-GAAP
    measure
    Operating income $ 290,310 $ 11,620 $ 10,143 $ 2,042 $ 314,115
    Income before income taxes 235,227 11,620 10,143 972 257,962
    Provision for income taxes 57,054 3,206 2,561 240 63,061
    Consolidated net income 178,173 8,414 7,582 732 194,901
    Noncontrolling interests 1,640 145 — — 1,785
    Net income attributable to shareholders $ 176,533 $ 8,269 $ 7,582 $ 732 $ 193,116
    Net income per diluted share $ 1.99 $ 0.09 $ 0.09 $ 0.01 $ 2.18
    Effective tax rate 24.3 % 24.4 %
                                   
    Three months ended September 30, 2017 (Adjusted)
    Reported
    GAAP
    measure     		Intangible
    amortization
    expense     		Restructuring
    & Integration
    charges     		Other** Non-GAAP
    measure
    Operating income 235,441 12,645 15,896 — 263,982
    Income before income taxes 180,881 12,645 15,896 13,815 223,237
    Provision for income taxes 45,972 4,474 5,319 5,328 61,093
    Consolidated net income 134,909 8,171 10,577 8,487 162,144
    Noncontrolling interests 845 146 — — 991
    Net income attributable to shareholders $ 134,064 8,025 10,577 8,487 161,153
    Net income per diluted share $ 1.50 $ 0.09 $ 0.12 $ 0.09 $ 1.80
    Effective tax rate 25.4 % 27.4 %
                                   
    Nine months ended September 29, 2018
    Reported
    GAAP
    measure     		Intangible
    amortization
    expense     		Restructuring
    & Integration
    charges     		Other* Non-GAAP
    measure
    Operating income $ 813,132 37,095 50,497 3,604 904,328
    Income before income taxes 644,408 37,095 50,497 7,549 739,549
    Provision for income taxes 155,325 10,021 12,785 1,653 179,784
    Consolidated net income 489,083 27,074 37,712 5,896 559,765
    Noncontrolling interests 3,541 447 — — 3,988
    Net income attributable to shareholders $ 485,542 26,627 37,712 5,896 555,777
    Net income per diluted share 5.47 0.30 0.42 0.07 6.26
    Effective tax rate 24.1 % 24.3 %
                                   
    Nine months ended September 30, 2017 (Adjusted)
    Reported
    GAAP
    measure     		Intangible
    amortization
    expense     		Restructuring
    & Integration
    charges     		Other** Non-GAAP
    measure
    Operating income $ 658,912 37,909 55,817 — 752,638
    Income before income taxes 467,003 37,909 55,817 68,329 629,058
    Provision for income taxes 115,128 13,423 17,892 26,357 172,800
    Consolidated net income 351,875 24,486 37,925 41,972 456,258
    Noncontrolling interests 3,352 554 — — 3,906
    Net income attributable to shareholders $ 348,523 23,932 37,925 41,972 452,352
    Net income per diluted share *** 3.88 0.27 0.42 0.47 5.03
    Effective tax rate 24.7 % 27.5 %
                                   
    * Other includes loss on disposition of businesses and gain (loss) on investments, net.
    ** Other includes gain (loss) on investments, net and loss on extinguishment of debt.
    *** The sum of the components for diluted EPS, as adjusted may not agree to totals, as presented, due to rounding.
     
     
    ARROW ELECTRONICS, INC.
    SEGMENT INFORMATION
    (In thousands)
    (Unaudited)
               
    Quarter Ended Nine Months Ended
    September 29, 2018     September 30, 2017 September 29, 2018     September 30, 2017
    Sales: (Adjusted) (Adjusted)
    Global components $ 5,381,078 $ 4,864,361 $ 15,595,374 $ 13,385,514
    Global ECS 2,109,367   1,991,747   6,163,212   5,629,600  
    Consolidated $ 7,490,445   $ 6,856,108   $ 21,758,586   $ 19,015,114  
    Operating income (loss):
    Global components $ 271,939 $ 212,993 $ 755,325 $ 583,690
    Global ECS 82,187 94,005 275,410 282,955
    Corporate (a) (63,816 ) (71,557 ) (217,603 ) (207,733 )
    Consolidated $ 290,310   $ 235,441   $ 813,132   $ 658,912  
    (a)   Includes restructuring, integration, and other charges of $10.1 million and $50.5 million for the third quarter and first nine months of 2018, and $15.9 million and $55.8 million for the third quarter and first nine months of 2017, respectively. Also included in the third quarter and first nine months of 2018 was a net loss on the disposition of businesses of $2.0 million and $3.6 million, respectively.
     
    NON-GAAP SEGMENT RECONCILIATION
               
    Quarter Ended Nine Months Ended
    September 29, 2018     September 30, 2017 September 29, 2018     September 30, 2017
    (Adjusted) (Adjusted)
    Global components operating income, as reported $ 271,939 $ 212,993 $ 755,325 $ 583,690
    Intangible assets amortization expense 8,706   6,984   25,999   21,210
    Global components operating income, as adjusted $ 280,645   $ 219,977   $ 781,324   $ 604,900
    Global ECS operating income, as reported $ 82,187 $ 94,005 $ 275,410 $ 282,955
    Intangible assets amortization expense 2,914   5,661   11,096   16,699
    Global ECS operating income, as adjusted $ 85,101   $ 99,666   $ 286,506   $ 299,654

    Arrow Electronics, Inc.
    Steven O’Brien,
    Vice President, Investor Relations
    303-824-4544
    or
    Media Contact:
    John Hourigan,
    Vice President, Global Communications
    303-824-4586

    Source: Arrow Electronics, Inc.

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