EX-99.1 2 q42016pressreleaseexhibit9.htm EXHIBIT 99.1 Exhibit
ARROW ELECTRONICS. INC.
9201 E. DRY CREEKROAD
CENTENNIAL, CO 80112
303-824-4000
 
NEWS

Exhibit 99.1
Arrow Electronics Reports Fourth-Quarter and Year-End 2016 Results
-- Record Full-Year Sales and Earnings Per Share --
-- Fourth-Quarter Earnings Per Share of $1.81; Non-GAAP Earnings Per Share of $2.00 --
CENTENNIAL, Colo.--(BUSINESS WIRE)-Feb. 7, 2017--Arrow Electronics, Inc. (NYSE:ARW) today reported fourth-quarter 2016 net income of $165 million, or $1.81 per share on a diluted basis, compared with net income of $158 million, or $1.69 per share on a diluted basis, in the fourth quarter of 2015. Excluding certain items1, net income would have been $182 million, or $2.00 per share on a diluted basis, in the fourth quarter of 2016, compared with net income of $182 million, or $1.94 per share on a diluted basis, in the fourth quarter of 2015. Fourth-quarter sales of $6.44 billion decreased 5 percent from sales of $6.75 billion in the prior year. In the fourth quarter of 2016, changes in foreign currencies had negative impacts on growth of approximately $91 million or 1 percent on sales and $.04 or 2 percent on earnings per share on a diluted basis compared to the fourth quarter of 2015.
“Our digital transformation and IoT solutions spanning from sensor to sunset helped drive record full-year sales and earnings per share,” said Michael J. Long, chairman, president, and chief executive officer. “Our customers value our comprehensive portfolio of electronic components and embedded computing, datacenter, cloud, and reverse logistics solutions.”
Global components fourth-quarter sales of $4 billion grew 9 percent year over year. Fourth-quarter sales, as adjusted, grew 10 percent year over year. Americas components sales grew 4 percent year over year. Asia-Pacific components sales grew 22 percent year over year. Europe components sales declined 1 percent year over year. Sales in the region, as adjusted, grew 2 percent year over year. “Global components sales exceeded the high end of our expectations and were propelled by our investments in customer-facing sales and engineering resources,” said Mr. Long.
Global enterprise computing solutions fourth-quarter sales of $2.45 billion declined 21 percent year over year. Sales when compared to the fourth quarter of 2015 were unfavorably impacted by approximately $250 million due to a later calendar start to the fourth quarter of 2016, and by approximately $250 million from a decrease in hardware sales offset by an increase in software sales, which are recognized on a net basis. “Full-year 2016 global enterprise computing solutions operating income grew 4 percent year over year, and we believe this is the best measure of our business,” added Mr. Long.
FULL-YEAR RESULTS
Arrow’s net income for 2016 was $523 million, or $5.68 per share on a diluted basis, compared with net income of $498 million, or $5.20 per share on a diluted basis, in 2015. Excluding certain items1, net income would have been $610 million, or $6.63 per share on a diluted basis, in 2016 compared with net income of $592 million, or $6.19 per share on a diluted basis, in 2015. In 2016, sales of $23.83 billion increased 2 percent from sales of $23.28 billion in 2015. In 2016, changes in foreign currencies had negative impacts on growth of approximately $202 million, or 1 percent on sales, and $.08, or 1 percent, on earnings per share on a diluted basis compared to 2015.
“We delivered record results in 2016, and our business is increasingly differentiated from the competition. We have a built a solid foundation for 2017 and into the future,” said Mr. Long.
“Cash flow from operations was $356 million in 2016 approximating our cash flow target,” said Chris Stansbury, senior vice president and chief financial officer. “In the fourth quarter we reduced net leverage and we returned approximately $49 million to shareholders through our stock repurchase program. In 2016 we returned approximately $200 million to shareholders through our stock repurchase program. We had approximately $520 million of remaining authorization under our share repurchase programs at the end of the year.”







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.

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GUIDANCE
“As we look to the first quarter, we believe that total sales will be between $5.375 billion and $5.775 billion, with global components sales between $3.775 billion and $3.975 billion, and global enterprise computing solutions sales between $1.6 billion and $1.8 billion. As a result of this outlook, we expect earnings per share on a diluted basis, to be in the range of $1.18 to $1.30, and earnings per share on a diluted basis, excluding any charges, to be in the range of $1.37 to $1.49 per share. Our guidance assumes an average tax rate in the range of 27 to 29 percent and average diluted shares outstanding are expected to be 91 million. We are expecting the average USD-to-Euro exchange rate for the first quarter to be approximately $1.07 to €1. We estimate changes in foreign currencies will have negative impacts on growth of approximately $70 million, or 1 percent on sales, and $.03, or 2 percent, on earnings per share on a diluted basis compared to the first quarter of 2016,” 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 (www.arrow.com) is a global provider of products, services and solutions to industrial and commercial users of electronic components and enterprise computing solutions. Arrow serves as a supply channel partner for more than 125,000 original equipment manufacturers, contract manufacturers and commercial customers through a global network of more than 465 locations serving over 90 countries.
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, 2016.
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 on a non-GAAP basis adjusted for the impact of changes in foreign currencies and the impact of acquisitions by adjusting the company's operating results for businesses acquired, including the amortization expense related to acquired intangible assets, as if the acquisitions had occurred at the beginning of the earliest period presented (referred to as "impact of acquisitions"). Operating income, net income attributable to shareholders, and net income per basic and diluted share are adjusted for 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 (including intangible assets amortization expense), loss on prepayment of debt, and (gain)/loss on investments. 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.


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ARROW ELECTRONICS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except per share data)
(Unaudited)
 
 
 
 
 
Quarter Ended
 
Year Ended
 
December 31, 2016
 
December 31, 2015
 
December 31, 2016
 
December 31, 2015
 
 
 
 
 
 
 
 
Sales
$
6,442,891

 
$
6,751,342

 
$
23,825,261

 
$
23,282,020

Costs and expenses:

 

 
 
 
 
Cost of sales
5,619,543

 
5,912,376

 
20,681,062

 
20,246,770

Selling, general, and administrative expenses
518,329

 
529,089

 
2,052,863

 
1,986,249

Depreciation and amortization
37,679

 
37,900

 
159,195

 
155,754

Restructuring, integration, and other charges
12,441

 
17,666

 
73,602

 
68,765

 
6,187,992

 
6,497,031

 
22,966,722

 
22,457,538

Operating income
254,899

 
254,311

 
858,539

 
824,482

Equity in earnings of affiliated companies
2,179

 
2,147

 
7,573

 
7,037

Gain on sale of investment
—

 
—

 
—

 
2,008

Loss on prepayment of debt
—

 
—

 
—

 
2,943

Interest and other financing expense, net
38,887

 
34,442

 
150,715

 
135,401

Other expense, net
—

 
1,500

 
—

 
3,000

Income before income taxes
218,191

 
220,516

 
715,397

 
692,183

Provision for income taxes
53,233

 
61,108

 
190,674

 
191,697

Consolidated net income
164,958

 
159,408

 
524,723

 
500,486

Noncontrolling interests
440

 
916

 
1,973

 
2,760

Net income attributable to shareholders
$
164,518

 
$
158,492

 
$
522,750

 
$
497,726

 
 
 
 
 
 
 
 
Net income per share:
 
 
 
 
 
 

Basic
1.84

 
1.71

 
5.75

 
5.26

Diluted
1.81

 
1.69

 
5.68

 
5.20

 
 
 
 
 
 
 
 
Weighted average shares outstanding:

 

 

 

Basic
89,596

 
92,731

 
90,960

 
94,608

Diluted
90,692

 
94,039

 
92,033

 
95,686


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ARROW ELECTRONICS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands except par value)
 
 
 
 
 
December 31, 2016
 
December 31, 2015
 
 
 
 
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
534,320

 
$
273,090

Accounts receivable, net
6,746,687

 
6,161,418

Inventories, net
2,855,645

 
2,466,490

Other current assets
180,069

 
285,473

Total current assets
10,316,721

 
9,186,471

Property, plant, and equipment, at cost:
 
 

Land
23,456

 
23,547

Buildings and improvements
175,141

 
162,011

Machinery and equipment
1,297,657

 
1,250,115

 
1,496,254

 
1,435,673

Less: Accumulated depreciation and amortization
(739,955
)
 
(735,495
)
Property, plant, and equipment, net
756,299

 
700,178

Investments in affiliated companies
88,401

 
73,376

Intangible assets, net
336,882

 
389,326

Goodwill
2,392,220

 
2,368,832

Other assets
315,843

 
303,747

Total assets
$
14,206,366

 
$
13,021,930

LIABILITIES AND EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
5,774,151

 
$
5,192,665

Accrued expenses
821,244

 
819,463

Short-term borrowings, including current portion of long-term debt
93,827

 
44,024

Total current liabilities
6,689,222

 
6,056,152

Long-term debt
2,696,334

 
2,380,575

Other liabilities
355,190

 
390,392

Equity:
 
 

Shareholders' equity:
 
 

Common stock, par value $1:
 
 

Authorized – 160,000 shares in both 2016 and 2015
 
 

Issued – 125,424 shares in both 2016 and 2015
125,424

 
125,424

Capital in excess of par value
1,112,114

 
1,107,314

Treasury stock (36,511 and 34,501 shares in 2016 and 2015, respectively), at cost
(1,637,476
)
 
(1,480,069
)
Retained earnings
5,197,230

 
4,674,480

Accumulated other comprehensive loss
(383,854
)
 
(284,706
)
Total shareholders' equity
4,413,438

 
4,142,443

Noncontrolling interests
52,182

 
52,368

Total equity
4,465,620

 
4,194,811

Total liabilities and equity
$
14,206,366

 
$
13,021,930


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ARROW ELECTRONICS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
 
 
 
Quarter Ended
 
December 31, 2016
 
December 31, 2015
Cash flows from operating activities:
 
 
 
Consolidated net income
$
164,958

 
$
159,408

Adjustments to reconcile consolidated net income to net cash provided by operations:

 

Depreciation and amortization
37,679

 
37,900

Amortization of stock-based compensation
10,042

 
13,491

Equity in earnings of affiliated companies
(2,179
)
 
(2,147
)
Deferred income taxes
(2,061
)
 
(21,048
)
Excess tax benefits from stock-based compensation arrangements
(96
)
 
(48
)
Other
1,508

 
2,837

Change in assets and liabilities, net of effects of acquired businesses:
 
 
 
Accounts receivable
(972,399
)
 
(1,125,272
)
Inventories
(286,306
)
 
2,100

Accounts payable
1,095,530

 
1,352,100

Accrued expenses
149,935

 
128,867

Other assets and liabilities
23,443

 
(4,053
)
Net cash provided by operating activities
220,054

 
544,135

 
 
 
 
Cash flows from investing activities:
 
 
 
Purchase price adjustment (cash consideration paid for acquired businesses)
4,195

 
(1,821
)
Acquisition of property, plant, and equipment
(38,354
)
 
(41,744
)
Proceeds from sale of facilities
—

 
3,496

Net cash used for investing activities
(34,159
)
 
(40,069
)
 
 
 
 
Cash flows from financing activities:
 
 
 
Change in short-term and other borrowings
16,743

 
(42,576
)
Repayment of long-term bank borrowings, net
(7,000
)
 
(366,700
)
Proceeds from exercise of stock options
2,281

 
178

Excess tax benefits from stock-based compensation arrangements
96

 
48

Repurchases of common stock
(49,268
)
 
(149,833
)
Other
(190
)
 
(1,937
)
Net cash used for financing activities
(37,338
)
 
(560,820
)
Effect of exchange rate changes on cash
1,348

 
(6,900
)
Net increase (decrease) in cash and cash equivalents
149,905

 
(63,654
)
Cash and cash equivalents at beginning of period
384,415

 
336,744

Cash and cash equivalents at end of period
$
534,320

 
$
273,090


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ARROW ELECTRONICS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
 
 
Year Ended
 
December 31, 2016
 
December 31, 2015
Cash flows from operating activities:
 
 
 
Consolidated net income
$
524,723

 
$
500,486

Adjustments to reconcile consolidated net income to net cash provided by operations:

 

Depreciation and amortization
159,195

 
155,754

Amortization of stock-based compensation
39,825

 
47,274

Equity in earnings of affiliated companies
(7,573
)
 
(7,037
)
Deferred income taxes
28,130

 
5,833

Gain on sale of investment
—

 
(2,008
)
Excess tax benefits from stock-based compensation arrangements
(5,049
)
 
(5,911
)
Other
5,972

 
10,894

Change in assets and liabilities, net of effects of acquired businesses:
 
 
 
Accounts receivable
(636,944
)
 
(68,990
)
Inventories
(403,980
)
 
(42,790
)
Accounts payable
582,165

 
33,398

Accrued expenses
47,020

 
56,139

Other assets and liabilities
22,322

 
(27,963
)
Net cash provided by operating activities
355,806

 
655,079

 
 
 
 
Cash flows from investing activities:
 
 
 
Cash consideration paid for acquired businesses
(64,751
)
 
(514,731
)
Acquisition of property, plant, and equipment
(164,695
)
 
(154,800
)
Proceeds from sale of facilities
—

 
3,496

Proceeds from sale of investment
—

 
2,008

Other
(12,000
)
 
—

Net cash used for investing activities
(241,446
)
 
(664,027
)
 
 
 
 
Cash flows from financing activities:
 
 

Change in short-term and other borrowings
48,684

 
(46,645
)
Proceeds from (repayment of) long-term bank borrowings, net
313,000

 
(128,000
)
Net proceeds from note offering
—

 
688,162

Redemption of notes
—

 
(254,313
)
Proceeds from exercise of stock options
18,967

 
14,900

Excess tax benefits from stock-based compensation arrangements
5,049

 
5,911

Repurchases of common stock
(216,446
)
 
(356,434
)
Other
(3,190
)
 
(7,768
)
Net cash provided by (used for) financing activities
166,064

 
(84,187
)
Effect of exchange rate changes on cash
(19,194
)
 
(34,130
)
Net increase (decrease) in cash and cash equivalents
261,230

 
(127,265
)
Cash and cash equivalents at beginning of period
273,090

 
400,355

Cash and cash equivalents at end of period
$
534,320

 
$
273,090


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ARROW ELECTRONICS, INC.
NON-GAAP SALES RECONCILIATION
(In thousands)
(Unaudited)
 
Quarter Ended
 
 
 
December 31, 2016
 
December 31, 2015
 
% Change
 
 
 
 
 
 
Consolidated sales, as reported
$
6,442,891

 
$
6,751,342

 
(4.6
)%
Impact of changes in foreign currencies
—

 
(91,058
)
 
 
Impact of acquisitions
—

 
66,777

 
 
Consolidated sales, as adjusted
$
6,442,891

 
$
6,727,061

 
(4.2
)%
 
 
 
 
 
 
Global components sales, as reported
$
3,995,491

 
$
3,668,804

 
8.9
 %
Impact of changes in foreign currencies
—

 
(26,949
)
 
 
Impact of acquisitions
—

 
4,850

 
 
Global components sales, as adjusted
$
3,995,491

 
$
3,646,705

 
9.6
 %
 
 
 
 
 
 
Europe components sales, as reported
$
963,349

 
$
972,125

 
(0.9
)%
Impact of changes in foreign currencies
—

 
(28,341
)
 
 
Impact of acquisitions
—

 
143

 
 
Europe components sales, as adjusted
$
963,349

 
$
943,927

 
2.1
 %
 
 
 
 
 
 
Asia components sales, as reported
$
1,487,816

 
$
1,215,242

 
22.4
 %
Impact of changes in foreign currencies
—

 
786

 
 
Impact of acquisitions
—

 
—

 
 
Asia components sales, as adjusted
$
1,487,816

 
$
1,216,028

 
22.4
 %
 
 
 
 
 
 
Global ECS sales, as reported
$
2,447,400

 
$
3,082,538

 
(20.6
)%
Impact of changes in foreign currencies
—

 
(64,108
)
 
 
Impact of acquisitions
—

 
61,927

 
 
Global ECS sales, as adjusted
$
2,447,400

 
$
3,080,357

 
(20.5
)%
 
 
 
 
 
 
Europe ECS sales, as reported
$
818,363

 
$
1,054,926

 
(22.4
)%
Impact of changes in foreign currencies
—

 
(70,254
)
 
 
Impact of acquisitions
—

 
—

 
 
Europe ECS sales, as adjusted
$
818,363

 
$
984,672

 
(16.9
)%
 
 
 
 
 
 
Americas ECS sales, as reported
$
1,629,037

 
$
2,027,612

 
(19.7
)%
Impact of changes in foreign currencies
—

 
6,145

 
 
Impact of acquisitions
—

 
61,927

 
 
Americas ECS sales, as adjusted
$
1,629,037

 
$
2,095,684

 
(22.3
)%

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ARROW ELECTRONICS, INC.
NON-GAAP SALES RECONCILIATION
(In thousands)
(Unaudited)
 
 
 
 
 
Year Ended
 
 
 
December 31, 2016
 
December 31, 2015
 
% Change
 
 
 
 
 
 
Consolidated sales, as reported
$
23,825,261

 
$
23,282,020

 
2.3
 %
Impact of changes in foreign currencies
—

 
(201,764
)
 
 
Impact of acquisitions
48,148

 
680,798

 
 
Consolidated sales, as adjusted
$
23,873,409

 
$
23,761,054

 
0.5
 %
 
 
 
 
 
 
Global components sales, as reported
$
15,408,839

 
$
14,405,793

 
7.0
 %
Impact of changes in foreign currencies
—

 
(79,175
)
 
 
Impact of acquisitions
9,711

 
338,553

 
 
Global components sales, as adjusted
$
15,418,550

 
$
14,665,171

 
5.1
 %
 
 
 
 
 
 
Europe components sales, as reported
$
4,086,607

 
$
3,874,744

 
5.5
 %
Impact of changes in foreign currencies
—

 
(52,718
)
 
 
Impact of acquisitions
—

 
104,634

 
 
Europe components sales, as adjusted
$
4,086,607

 
$
3,926,660

 
4.1
 %
 
 
 
 
 
 
Asia components sales, as reported
$
5,400,429

 
$
4,720,210

 
14.4
 %
Impact of changes in foreign currencies
—

 
(22,458
)
 
 
Impact of acquisitions
—

 
211,745

 
 
Asia components sales, as adjusted
$
5,400,429

 
$
4,909,497

 
10.0
 %
 
 
 
 
 
 
Global ECS sales, as reported
$
8,416,422

 
$
8,876,227

 
(5.2
)%
Impact of changes in foreign currencies
—

 
(122,589
)
 
 
Impact of acquisitions
38,437

 
342,245

 
 
Global ECS sales, as adjusted
$
8,454,859

 
$
9,095,883

 
(7.0
)%
 
 
 
 
 
 
Europe ECS sales, as reported
$
2,686,078

 
$
2,913,995

 
(7.8
)%
Impact of changes in foreign currencies
—

 
(111,522
)
 
 
Impact of acquisitions
—

 
—

 
 
Europe ECS sales, as adjusted
$
2,686,078

 
$
2,802,473

 
(4.2
)%
 
 
 
 
 
 
Americas ECS sales, as reported
$
5,730,344

 
$
5,962,232

 
(3.9
)%
Impact of changes in foreign currencies
—

 
(11,067
)
 
 
Impact of acquisitions
38,437

 
342,245

 
 
Americas ECS sales, as adjusted
$
5,768,781

 
$
6,293,410

 
(8.3
)%

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ARROW ELECTRONICS, INC.
NON-GAAP EARNINGS RECONCILIATION
(In thousands except per share data)
(Unaudited)
 
Three months ended December 31, 2016

Reported
GAAP
measure

Intangible
amortization
expense

Restructuring
& Integration
charges

Other*

Non-GAAP
measure
Operating income
$
254,899


$
13,634


$
12,441


$
—


$
280,974

Income before income taxes
218,191


13,634


12,441


—


244,266

Provision for income taxes
53,233


4,870


3,733


—


61,836

Consolidated net income
164,958


8,764


8,708


—


182,430

Noncontrolling interests
440


336


—


—


776

Net income attributable to shareholders
$
164,518


$
8,428


$
8,708


$
—


$
181,654

Net income per diluted share
1.81


0.09


0.10


—


2.00

Effective tax rate
24.4
%







25.3
%
 
 
 
 
 
 
 
 
 
 
Three months ended December 31, 2015

Reported
GAAP
measure

Intangible
amortization
expense

Restructuring
& Integration
charges

Other*

Non-GAAP
measure
Operating income
$
254,311


11,743


17,666


—


283,720

Income before income taxes
220,516


11,743


17,666


1,500


251,425

Provision for income taxes
61,108


2,206


4,467


579


68,360

Consolidated net income
159,408


9,537


13,199


921


183,065

Noncontrolling interests
916


—


—


—


916

Net income attributable to shareholders
$
158,492


9,537


13,199


921


182,149

Net income per diluted share
1.69


0.10


0.14


0.01


1.94

Effective tax rate
27.7
%







27.2
%
 
 
 
 
 
 
 
 
 
 
Year Ended December 31, 2016

Reported
GAAP
measure

Intangible
amortization
expense

Restructuring
& Integration
charges

Other*

Non-GAAP
measure
Operating income
$
858,539


54,886


73,602


—


987,027

Income before income taxes
715,397


54,886


73,602


—


843,885

Provision for income taxes
190,674


17,226


22,977


—


230,877

Consolidated net income
524,723


37,660


50,625


—


613,008

Noncontrolling interests
1,973


1,275


—


—


3,248

Net income attributable to shareholders
$
522,750


36,385


50,625


—


609,760

Net income per diluted share
5.68


0.40


0.55


—


6.63

Effective tax rate
26.7
%







27.4
%
 
 
 
 
 
 
 
 
 
 
Year Ended December 31, 2015

Reported
GAAP
measure

Intangible
amortization
expense

Restructuring
& Integration
charges

Other*

Non-GAAP
measure
Operating income
$
824,482


51,036


68,765


—


944,283

Income before income taxes
692,183


51,036


68,765


3,935


815,919

Provision for income taxes
191,697


9,780


17,461


1,952


220,890

Consolidated net income
500,486


41,256


51,304


1,983


595,029

Noncontrolling interests
2,760


—


—


—


2,760

Net income attributable to shareholders
$
497,726


41,256


51,304


1,983


592,269

Net income per diluted share
5.20


0.43


0.54


0.02


6.19

Effective tax rate
27.7
%







27.1
%
 
 
 
 
 
 
 
 
 
 
*Other includes gain/loss on sale of investments and loss on prepayment of debt.

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ARROW ELECTRONICS, INC.
SEGMENT INFORMATION
(In thousands)
(Unaudited)
 
 
 
 
 
Quarter Ended
 
Year Ended
 
December 31, 2016
 
December 31, 2015
 
December 31, 2016
 
December 31, 2015
Sales:
 
 
 
 
 
 
 
Global components
$
3,995,491


$
3,668,804


$
15,408,839


$
14,405,793

Global ECS
2,447,400


3,082,538


8,416,422


8,876,227

Consolidated
$
6,442,891


$
6,751,342


$
23,825,261


$
23,282,020

Operating income (loss):







Global components
$
161,804


$
149,940


$
686,466


$
649,396

Global ECS
158,011


173,919


441,803


424,063

Corporate (a)
(64,916
)

(69,548
)

(269,730
)

(248,977
)
Consolidated
$
254,899


$
254,311


$
858,539


$
824,482


(a)
Includes restructuring, integration, and other charges of $12.4 million and $73.6 million for the fourth quarter and Year Ended 2016 and $17.7 million and $68.8 million for the fourth quarter and Year Ended 2015, respectively.

NON-GAAP SEGMENT RECONCILIATION
 
 
 
 
 
Quarter Ended
 
Year Ended
 
December 31, 2016

December 31, 2015
 
December 31, 2016

December 31, 2015
Global components operating income, as reported
$
161,804


$
149,940


$
686,466


$
649,396

Intangible assets amortization expense
7,497


6,657


31,621


27,125

Global components operating income, as adjusted
$
169,301


$
156,597


$
718,087


$
676,521

Global ECS operating income, as reported
$
158,011


$
173,919


$
441,803


$
424,063

Intangible assets amortization expense
6,137


5,086


23,265


23,911

Global ECS operating income, as adjusted
$
164,148


$
179,005


$
465,068


$
447,974






Contact:            Steven O’Brien,
Vice President, Investor Relations
303-824-4544




Media Contact:        John Hourigan,
Vice President, Global Communications
303-824-4586


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