EX-99.1 2 q42018pressreleaseexhibit9.htm EXHIBIT 99.1

ARROW ELECTRONICS. INC. 9201 E. DRY CREEK ROAD CENTENNIAL, CO 80112 303-824-4000 |  | NEWS

Exhibit 99.1
Arrow Electronics Reports Fourth-Quarter and Year-End 2018 Results
-- Record Fourth-Quarter and Full-Year Sales, Gross Profit and Operating Income --
-- Full-Year 2018 Sales Advanced $3 Billion Over Full-Year 2017 --
CENTENNIAL, Colo.--(BUSINESS WIRE)-Feb. 7, 2019--Arrow Electronics, Inc. (NYSE:ARW) today reported fourth-quarter 2018 sales of $7.92 billion, an increase of 5 percent from sales of $7.54 billion in the fourth quarter of 2017. Fourth-quarter net income of $231 million, or $2.63 per share on a diluted basis, compared with net income of $54 million, or $.60 per share on a diluted basis, in the fourth quarter of 2017. Excluding certain items 1, net income would have been $225 million, or $2.57 per share on a diluted basis, in the fourth quarter of 2018, compared with net income of $222 million, or $2.49 per share on a diluted basis, in the fourth quarter of 2017. In the fourth quarter of 2018, changes in foreign currencies had negative impacts on growth of approximately $107 million or 2 percent on sales and $.06 or 3 percent on earnings per share on a diluted basis compared to the fourth quarter of 2017.
“We are helping customers create, make, and manage their electronic products at unmatched scale. This is driving tremendous growth for our suppliers, and for Arrow, as evidenced by our second consecutive year of growing sales by more than $3 billion,” said Michael J. Long, chairman, president, and chief executive officer. “We are proud to be enabling next-generation technologies and products that are making our world better.”
Global components fourth-quarter sales of $5.26 billion increased 6 percent year over year. Americas components sales increased 5 percent year over year. Europe components sales increased 9 percent year over year. Sales in the region, as adjusted, increased 13 percent year over year. Asia-Pacific components sales increased 7 percent year over year. “We are well-aligned to the long-term trends of growing electronic content in key end markets such as transportation, industrial, and aerospace and defense,” said Mr. Long.
Global enterprise computing solutions fourth-quarter sales of $2.66 billion increased 2 percent year over year. Global enterprise computing solutions sales, as adjusted, increased 6 percent year over year. Americas sales increased 4 percent year over year. Sales in the region, as adjusted, increased 9 percent year over year. Europe sales decreased 1 percent year over year. Sales in the region, as adjusted, were flat year over year. “We have positioned the company to lead the edge computing paradigm with our leading software, hardware, and security capabilities,” added Mr. Long.
FULL-YEAR RESULTS
Full-year 2018 sales of $29.68 billion increased 12 percent from sales of $26.55 billion in 2017. Net income for 2018 was $716 million, or $8.10 per share on a diluted basis, compared with net income of $402 million, or $4.48 per share on a diluted basis, in 2017. Excluding certain items 1, net income would have been $781 million, or $8.83 per share on a diluted basis, in 2018 compared with net income of $674 million, or $7.51 per share on a diluted basis, in 2017. In 2018, changes in foreign currencies had positive impacts on growth of approximately $252 million, or 1 percent on sales, and $.06, or 1 percent, on earnings per share on a diluted basis compared to 2017.
“We executed well in 2018, and continue to see good returns on our organic investments. Operating income, excluding certain items 1, increased 16 percent compared to a 12 percent increase in sales. Fourth-quarter cash flow from operations was $263 million as our business model generates substantial cash in lower growth environments,” said Chris Stansbury, senior vice president and chief financial officer. “In the fourth quarter, we reduced leverage, and we returned approximately $150 million to shareholders through our stock repurchase program. With the recent authorization of an additional $600 million of repurchases, we had approximately $729 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.

GUIDANCE
“As we look to the first quarter, we believe that total sales will be between $6.775 billion and $7.175 billion, with global components sales between $4.975 billion and $5.175 billion, and global enterprise computing solutions sales between $1.8 billion and $2.0 billion. As a result of this outlook, we expect earnings per share on a diluted basis, to be in the range of $1.61 to $1.73, and earnings per share on a diluted basis, excluding certain items 1, to be in the range of $1.84 to $1.96 per share. Our guidance assumes an average tax rate at the high end of the long-term range of 23.5 to 25.5 percent, and average diluted shares outstanding of 87 million. We are expecting interest expense will total approximately $58 million. We are expecting the average USD-to-Euro exchange rate for the first quarter to be approximately $1.14 to €1. We estimate changes in foreign currencies will have a negative impact on growth of approximately $160 million, or 2 percent on sales, and $.08, or 4 percent, on earnings per share on a diluted basis compared to the first quarter of 2018,” 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 200,000 leading technology manufacturers and service providers. With 2018 sales of $30 billion, Arrow develops technology solutions that improve business and daily life. 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 December 31, 2018.
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/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), the impact of tax reform, 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)
| Quarter Ended |  | Year Ended
| December 31, 2018 |  | December 31, 2017 |  | December 31, 2018 |  | December 31, 2017
| (Unaudited) |  | (Unaudited / Adjusted) |  |  |  | (Adjusted)
Sales | $ | 7,918,182 |  |  | $ | 7,539,449 |  |  | $ | 29,676,768 |  |  | $ | 26,554,563 |
Cost of sales | 6,942,812 |  |  | 6,610,269 |  |  | 25,975,856 |  |  | 23,197,595 |
Gross profit | 975,370 |  |  | 929,180 |  |  | 3,700,912 |  |  | 3,356,968 |
Operating expenses: |  |  |  |  |  |  |
Selling, general, and administrative expenses | 583,943 |  |  | 562,082 |  |  | 2,303,051 |  |  | 2,162,045 |
Depreciation and amortization | 47,183 |  |  | 40,503 |  |  | 186,384 |  |  | 153,599 |
Loss on disposition of businesses, net | — |  |  | 21,000 |  |  | 3,604 |  |  | 21,000 |
Restructuring, integration, and other charges | 9,864 |  |  | 18,771 |  |  | 60,361 |  |  | 74,588 |
| 640,990 |  |  | 642,356 |  |  | 2,553,400 |  |  | 2,411,232 |
Operating income | 334,380 |  |  | 286,824 |  |  | 1,147,512 |  |  | 945,736 |
Equity in earnings (losses) of affiliated companies | (1,524 | ) |  | 559 |  |  | (2,332 | ) |  | 3,424 |
Gain (loss) on investments, net | (10,221 | ) |  | 2,207 |  |  | (14,166 | ) |  | (6,577 | )
Loss on extinguishment of debt | — |  |  | — |  |  | — |  |  | 59,545 |
Employee benefit plan expense | 3,086 |  |  | 18,322 |  |  | 6,870 |  |  | 23,869 |
Interest and other financing expense, net | 54,584 |  |  | 44,354 |  |  | 214,771 |  |  | 165,252 |
Income before income taxes | 264,965 |  |  | 226,914 |  |  | 909,373 |  |  | 693,917 |
Provision for income taxes | 32,474 |  |  | 171,413 |  |  | 187,799 |  |  | 286,541 |
Consolidated net income | 232,491 |  |  | 55,501 |  |  | 721,574 |  |  | 407,376 |
Noncontrolling interests | 1,838 |  |  | 1,848 |  |  | 5,379 |  |  | 5,200 |
Net income attributable to shareholders | $ | 230,653 |  |  | $ | 53,653 |  |  | $ | 716,195 |  |  | $ | 402,176 |
Net income per share: |  |  |  |  |  |  |
Basic | $ | 2.66 |  |  | $ | 0.61 |  |  | $ | 8.19 |  |  | $ | 4.54 |
Diluted | $ | 2.63 |  |  | $ | 0.60 |  |  | $ | 8.10 |  |  | $ | 4.48 |
Weighted average shares outstanding: |  |  |  |  |  |  |
Basic | 86,559 |  |  | 88,120 |  |  | 87,476 |  |  | 88,681 |
Diluted | 87,561 |  |  | 89,278 |  |  | 88,444 |  |  | 89,766 |

ARROW ELECTRONICS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands except par value)
| December 31, 2018 |  | December 31, 2017
|  |  | (Adjusted)
ASSETS |  |  |
Current assets: |  |  |
Cash and cash equivalents | $ | 509,327 |  |  | $ | 730,083 |
Accounts receivable, net | 8,945,463 |  |  | 8,125,588 |
Inventories | 3,878,678 |  |  | 3,302,518 |
Other current assets | 274,832 |  |  | 256,028 |
Total current assets | 13,608,300 |  |  | 12,414,217 |
Property, plant, and equipment, at cost: |  |  |
Land | 7,882 |  |  | 12,866 |
Buildings and improvements | 158,712 |  |  | 160,664 |
Machinery and equipment | 1,425,933 |  |  | 1,330,730 |
| 1,592,527 |  |  | 1,504,260 |
Less: Accumulated depreciation and amortization | (767,827 | ) |  | (665,785 | )
Property, plant, and equipment, net | 824,700 |  |  | 838,475 |
Investments in affiliated companies | 83,693 |  |  | 88,347 |
Intangible assets, net | 372,644 |  |  | 286,215 |
Goodwill | 2,624,690 |  |  | 2,470,047 |
Other assets | 270,418 |  |  | 361,966 |
Total assets | $ | 17,784,445 |  |  | $ | 16,459,267 |
LIABILITIES AND EQUITY |  |  |
Current liabilities: |  |  |
Accounts payable | $ | 7,631,879 |  |  | $ | 6,756,830 |
Accrued expenses | 912,292 |  |  | 841,675 |
Short-term borrowings, including current portion of long-term debt | 246,257 |  |  | 356,806 |
Total current liabilities | 8,790,428 |  |  | 7,955,311 |
Long-term debt | 3,239,115 |  |  | 2,933,045 |
Other liabilities | 378,536 |  |  | 572,971 |
Equity: |  |  |
Shareholders' equity: |  |  |
Common stock, par value $1: |  |  |
Authorized – 160,000 shares in both 2018 and 2017 |  |  |
Issued – 125,424 shares in both 2018 and 2017 | 125,424 |  |  | 125,424 |
Capital in excess of par value | 1,135,934 |  |  | 1,114,167 |
Treasury stock (40,233 and 37,733 shares in 2018 and 2017, respectively), at cost | (1,972,254 | ) |  | (1,762,239 | )
Retained earnings | 6,335,335 |  |  | 5,596,786 |
Accumulated other comprehensive loss | (299,449 | ) |  | (124,883 | )
Total shareholders' equity | 5,324,990 |  |  | 4,949,255 |
Noncontrolling interests | 51,376 |  |  | 48,685 |
Total equity | 5,376,366 |  |  | 4,997,940 |
Total liabilities and equity | $ | 17,784,445 |  |  | $ | 16,459,267 |

ARROW ELECTRONICS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
| Quarter Ended
| December 31, 2018 |  | December 31, 2017
Cash flows from operating activities: |  |  |
Consolidated net income | $ | 232,491 |  |  | $ | 55,501 |
Adjustments to reconcile consolidated net income to net cash provided by operations: |  |  |
Depreciation and amortization | 47,183 |  |  | 40,503 |
Amortization of stock-based compensation | 8,134 |  |  | 8,821 |
Equity in (earnings) losses of affiliated companies | 1,524 |  |  | (559 | )
Deferred income taxes | (16,533 | ) |  | 25,150 |
(Gain) loss on investment, net | 10,221 |  |  | (1,484 | )
Loss on disposition of businesses, net | — |  |  | 21,000 |
Other | 3,142 |  |  | 3,051 |
Change in assets and liabilities, net of effects of acquired and disposed businesses: |  |  |
Accounts receivable | (752,891 | ) |  | (1,052,808 | )
Inventories | (162,825 | ) |  | (118,709 | )
Accounts payable | 764,726 |  |  | 930,406 |
Accrued expenses | 96,946 |  |  | 37,254 |
Other assets and liabilities | 31,016 |  |  | 174,652 |
Net cash provided by operating activities | 263,134 |  |  | 122,778 |
Cash flows from investing activities: |  |  |
Acquisition of property, plant, and equipment | (30,439 | ) |  | (54,352 | )
Proceeds from sale of property, plant, and equipment | 5,421 |  |  | — |
Cash paid for customer relationship intangible asset | (20,000 | ) |  | — |
Other | (2,500 | ) |  | (3,147 | )
Net cash used for investing activities | (47,518 | ) |  | (57,499 | )
Cash flows from financing activities: |  |  |
Change in short-term and other borrowings | 88,034 |  |  | (26,893 | )
Proceeds from (repayment of) long-term bank borrowings, net | (114,120 | ) |  | 130,526 |
Proceeds from exercise of stock options | 900 |  |  | 772 |
Repurchases of common stock | (150,132 | ) |  | (25,114 | )
Other | — |  |  | (3,942 | )
Net cash provided by (used for) financing activities | (175,318 | ) |  | 75,349 |
Effect of exchange rate changes on cash | (5,162 | ) |  | 5,116 |
Net increase in cash and cash equivalents | 35,136 |  |  | 145,744 |
Cash and cash equivalents at beginning of period | 474,191 |  |  | 584,339 |
Cash and cash equivalents at end of period | $ | 509,327 |  |  | $ | 730,083 |

ARROW ELECTRONICS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
| Year Ended
| December 31, 2018 |  | December 31, 2017
Cash flows from operating activities: |  |  |
Consolidated net income | $ | 721,574 |  |  | $ | 407,376 |
Adjustments to reconcile consolidated net income to net cash provided by operations: |  |  |
Depreciation and amortization | 186,384 |  |  | 153,599 |
Amortization of stock-based compensation | 46,238 |  |  | 39,122 |
Equity in (earnings) losses of affiliated companies | 2,332 |  |  | (3,424 | )
Loss on extinguishment of debt | — |  |  | 59,545 |
Deferred income taxes | 1,236 |  |  | 38,412 |
(Gain) loss on investment, net | 14,166 |  |  | 8,020 |
Loss on disposition of businesses, net | 3,604 |  |  | 21,000 |
Impairment of property, plant and equipment | — |  |  | 4,761 |
Other | 9,198 |  |  | 5,705 |
Change in assets and liabilities, net of effects of acquired and disposed businesses: |  |  |
Accounts receivable | (1,007,308 | ) |  | (1,079,094 | )
Inventories | (618,875 | ) |  | (379,835 | )
Accounts payable | 936,423 |  |  | 816,602 |
Accrued expenses | 112,123 |  |  | (5,013 | )
Other assets and liabilities | (134,405 | ) |  | 37,781 |
Net cash provided by operating activities | 272,690 |  |  | 124,557 |
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 | (135,336 | ) |  | (203,949 | )
Proceeds from sale of property, plant and equipment | 5,421 |  |  | 24,433 |
Cash paid for customer relationship intangible asset | (20,000 | ) |  | — |
Other | (13,500 | ) |  | (5,614 | )
Net cash used for investing activities | (462,965 | ) |  | (188,758 | )
Cash flows from financing activities: |  |  |
Change in short-term and other borrowings | 192,192 |  |  | (41,316 | )
Proceeds from long-term bank borrowings, net | 306,635 |  |  | 47,760 |
Proceeds from note offering, net | — |  |  | 986,203 |
Redemption of notes | (300,000 | ) |  | (558,887 | )
Proceeds from exercise of stock options | 8,819 |  |  | 22,195 |
Repurchases of common stock | (243,305 | ) |  | (174,239 | )
Purchase of shares from noncontrolling interest | — |  |  | (23,350 | )
Other | (1,174 | ) |  | (1,620 | )
Net cash provided by (used for) financing activities | (36,833 | ) |  | 256,746 |
Effect of exchange rate changes on cash | 6,352 |  |  | 3,218 |
Net increase (decrease) in cash and cash equivalents | (220,756 | ) |  | 195,763 |
Cash and cash equivalents at beginning of period | 730,083 |  |  | 534,320 |
Cash and cash equivalents at end of period | $ | 509,327 |  |  | $ | 730,083 |

ARROW ELECTRONICS, INC.
NON-GAAP SALES RECONCILIATION
(In thousands)
(Unaudited)
| Quarter Ended |  |
| December 31, 2018 |  | December 31, 2017 |  | % Change
Consolidated sales, as reported | $ | 7,918,182 |  |  | $ | 7,539,449 |  |  | 5.0 | %
Impact of changes in foreign currencies | — |  |  | (106,649 | ) |  |
Impact of acquisitions | — |  |  | 47,020 |  |  |
Impact of dispositions | — |  |  | (58,282 | ) |  |
Consolidated sales, as adjusted | $ | 7,918,182 |  |  | $ | 7,421,538 |  |  | 6.7 | %
Global components sales, as reported | $ | 5,261,477 |  |  | $ | 4,944,942 |  |  | 6.4 | %
Impact of changes in foreign currencies | — |  |  | (58,957 | ) |  |
Impact of acquisitions | — |  |  | 21,314 |  |  |
Global components sales, as adjusted | $ | 5,261,477 |  |  | $ | 4,907,299 |  |  | 7.2 | %
Americas components sales, as reported | $ | 2,021,033 |  |  | $ | 1,929,827 |  |  | 4.7 | %
Impact of changes in foreign currencies | — |  |  | (3,536 | ) |  |
Impact of acquisitions | — |  |  | 21,314 |  |  |
Americas components sales, as adjusted | $ | 2,021,033 |  |  | $ | 1,947,605 |  |  | 3.8 | %
Europe components sales, as reported | $ | 1,407,429 |  |  | $ | 1,296,142 |  |  | 8.6 | %
Impact of changes in foreign currencies | — |  |  | (47,249 | ) |  |
Impact of acquisitions | — |  |  | — |  |  |
Europe components sales, as adjusted | $ | 1,407,429 |  |  | $ | 1,248,893 |  |  | 12.7 | %
Asia components sales, as reported | $ | 1,833,015 |  |  | $ | 1,718,973 |  |  | 6.6 | %
Impact of changes in foreign currencies | — |  |  | (8,172 | ) |  |
Impact of acquisitions | — |  |  | — |  |  |
Asia components sales, as adjusted | $ | 1,833,015 |  |  | $ | 1,710,801 |  |  | 7.1 | %
Global ECS sales, as reported | $ | 2,656,705 |  |  | $ | 2,594,507 |  |  | 2.4 | %
Impact of changes in foreign currencies | — |  |  | (47,692 | ) |  |
Impact of acquisitions | — |  |  | 25,706 |  |  |
Impact of dispositions | — |  |  | (58,282 | ) |  |
Global ECS sales, as adjusted | $ | 2,656,705 |  |  | $ | 2,514,239 |  |  | 5.7 | %
Europe ECS sales, as reported | $ | 954,343 |  |  | $ | 965,216 |  |  | (1.1 | )%
Impact of changes in foreign currencies | — |  |  | (33,786 | ) |  |
Impact of acquisitions | — |  |  | 25,706 |  |  |
Impact of dispositions | — |  |  | (1,108 | ) |  |
Europe ECS sales, as adjusted | $ | 954,343 |  |  | $ | 956,028 |  |  | (0.2 | )%
Americas ECS sales, as reported | $ | 1,702,362 |  |  | $ | 1,629,291 |  |  | 4.5 | %
Impact of changes in foreign currencies | — |  |  | (13,906 | ) |  |
Impact of acquisitions | — |  |  | — |  |  |
Impact of dispositions | — |  |  | (57,174 | ) |  |
Americas ECS sales, as adjusted | $ | 1,702,362 |  |  | $ | 1,558,211 |  |  | 9.3 | %

ARROW ELECTRONICS, INC.
NON-GAAP SALES RECONCILIATION
(In thousands)
(Unaudited)
| Year Ended |  |
| December 31, 2018 |  | December 31, 2017 |  | % Change
Consolidated sales, as reported | $ | 29,676,768 |  |  | $ | 26,554,563 |  |  | 11.8 | %
Impact of changes in foreign currencies | — |  |  | 251,644 |  |  |
Impact of acquisitions | — |  |  | 157,772 |  |  |
Impact of dispositions | (27,493 | ) |  | (229,845 | ) |  |
Consolidated sales, as adjusted | $ | 29,649,275 |  |  | $ | 26,734,134 |  |  | 10.9 | %
Global components sales, as reported | $ | 20,856,851 |  |  | $ | 18,330,456 |  |  | 13.8 | %
Impact of changes in foreign currencies | — |  |  | 174,214 |  |  |
Impact of acquisitions | — |  |  | 84,789 |  |  |
Global components sales, as adjusted | $ | 20,856,851 |  |  | $ | 18,589,459 |  |  | 12.2 | %
Americas components sales, as reported | $ | 7,816,533 |  |  | $ | 7,010,385 |  |  | 11.5 | %
Impact of changes in foreign currencies | — |  |  | (6,533 | ) |  |
Impact of acquisitions | — |  |  | 84,789 |  |  |
Americas components sales, as adjusted | $ | 7,816,533 |  |  | $ | 7,088,641 |  |  | 10.3 | %
Europe components sales, as reported | $ | 5,733,222 |  |  | $ | 4,868,862 |  |  | 17.8 | %
Impact of changes in foreign currencies | — |  |  | 164,573 |  |  |
Impact of acquisitions | — |  |  | — |  |  |
Europe components sales, as adjusted | $ | 5,733,222 |  |  | $ | 5,033,435 |  |  | 13.9 | %
Asia components sales, as reported | $ | 7,307,096 |  |  | $ | 6,451,209 |  |  | 13.3 | %
Impact of changes in foreign currencies | — |  |  | 16,174 |  |  |
Impact of acquisitions | — |  |  | — |  |  |
Asia components sales, as adjusted | $ | 7,307,096 |  |  | $ | 6,467,383 |  |  | 13.0 | %
Global ECS sales, as reported | $ | 8,819,917 |  |  | $ | 8,224,107 |  |  | 7.2 | %
Impact of changes in foreign currencies | — |  |  | 77,430 |  |  |
Impact of acquisitions | — |  |  | 72,983 |  |  |
Impact of dispositions | (27,493 | ) |  | (229,845 | ) |  |
Global ECS sales, as adjusted | $ | 8,792,424 |  |  | $ | 8,144,675 |  |  | 8.0 | %
Europe ECS sales, as reported | $ | 3,077,391 |  |  | $ | 2,835,219 |  |  | 8.5 | %
Impact of changes in foreign currencies | — |  |  | 95,447 |  |  |
Impact of acquisitions | — |  |  | 72,983 |  |  |
Impact of dispositions | — |  |  | (3,991 | ) |  |
Europe ECS sales, as adjusted | $ | 3,077,391 |  |  | $ | 2,999,658 |  |  | 2.6 | %
Americas ECS sales, as reported | $ | 5,742,526 |  |  | $ | 5,388,888 |  |  | 6.6 | %
Impact of changes in foreign currencies | — |  |  | (18,017 | ) |  |
Impact of acquisitions | — |  |  | — |  |  |
Impact of dispositions | (27,493 | ) |  | (225,854 | ) |  |
Americas ECS sales, as adjusted | $ | 5,715,033 |  |  | $ | 5,145,017 |  |  | 11.1 | %

ARROW ELECTRONICS, INC.
NON-GAAP EARNINGS RECONCILIATION
(In thousands except per share data)
(Unaudited)
Three months ended December 31, 2018
| Reported GAAP measure |  | Intangible amortization expense |  | Restructuring & Integration charges |  | Impact of the Tax Act |  | Other* |  | Non-GAAP measure
Operating income | $ | 334,380 |  |  | 12,261 |  |  | $ | 9,864 |  |  | $ | — |  |  | — |  |  | $ | 356,505 |
Income before income taxes | 264,965 |  |  | 12,261 |  |  | 9,864 |  |  | — |  |  | 11,886 |  |  | 298,976 |
Provision for income taxes | 32,474 |  |  | 3,437 |  |  | 4,514 |  |  | 28,323 |  |  | 3,025 |  |  | 71,773 |
Consolidated net income | 232,491 |  |  | 8,824 |  |  | 5,350 |  |  | (28,323 | ) |  | 8,861 |  |  | 227,203 |
Noncontrolling interests | 1,838 |  |  | 142 |  |  | — |  |  | — |  |  | — |  |  | 1,980 |
Net income attributable to shareholders | $ | 230,653 |  |  | $ | 8,682 |  |  | $ | 5,350 |  |  | $ | (28,323 | ) |  | $ | 8,861 |  |  | $ | 225,223 |
Net income per diluted share | $ | 2.63 |  |  | $ | 0.10 |  |  | $ | 0.06 |  |  | $ | (0.32 | ) |  | $ | 0.10 |  |  | $ | 2.57 |
Effective tax rate | 12.3 | % |  |  |  |  |  |  |  |  |  | 24.0 | %
Three months ended December 31, 2017 (Adjusted)
| Reported GAAP measure |  | Intangible amortization expense |  | Restructuring & Integration charges |  | Impact of the Tax Act |  | Other** |  | Non-GAAP measure
Operating income | $ | 286,824 |  |  | 12,162 |  |  | $ | 18,771 |  |  | $ | — |  |  | 21,000 |  |  | $ | 338,757 |
Income before income taxes | 226,914 |  |  | 12,162 |  |  | 18,771 |  |  | — |  |  | 35,499 |  |  | 293,346 |
Provision for income taxes | 171,413 |  |  | 4,321 |  |  | 4,509 |  |  | (124,748 | ) |  | 13,713 |  |  | 69,208 |
Consolidated net income | 55,501 |  |  | 7,841 |  |  | 14,262 |  |  | 124,748 |  |  | 21,786 |  |  | 224,138 |
Noncontrolling interests | 1,848 |  |  | 147 |  |  | — |  |  | — |  |  | — |  |  | 1,995 |
Net income attributable to shareholders | $ | 53,653 |  |  | $ | 7,694 |  |  | $ | 14,262 |  |  | $ | 124,748 |  |  | $ | 21,786 |  |  | $ | 222,143 |
Net income per diluted share | $ | 0.60 |  |  | $ | 0.09 |  |  | $ | 0.16 |  |  | $ | 1.40 |  |  | $ | 0.24 |  |  | $ | 2.49 |
Effective tax rate | 75.5 | % |  |  |  |  |  |  |  |  |  | 23.6 | %
Year Ended December 31, 2018
| Reported GAAP measure |  | Intangible amortization expense |  | Restructuring & Integration charges |  | Impact of the Tax Act |  | Other** |  | Non-GAAP measure
Operating income | $ | 1,147,512 |  |  | $ | 49,356 |  |  | $ | 60,361 |  |  | $ | — |  |  | $ | 3,604 |  |  | $ | 1,260,833 |
Income before income taxes | 909,373 |  |  | 49,356 |  |  | 60,361 |  |  | — |  |  | 19,435 |  |  | 1,038,525 |
Provision for income taxes | 187,799 |  |  | 13,458 |  |  | 17,299 |  |  | 28,323 |  |  | 4,678 |  |  | 251,557 |
Consolidated net income | 721,574 |  |  | 35,898 |  |  | 43,062 |  |  | (28,323 | ) |  | 14,757 |  |  | 786,968 |
Noncontrolling interests | 5,379 |  |  | 589 |  |  | — |  |  | — |  |  | — |  |  | 5,968 |
Net income attributable to shareholders | $ | 716,195 |  |  | $ | 35,309 |  |  | $ | 43,062 |  |  | $ | (28,323 | ) |  | $ | 14,757 |  |  | $ | 781,000 |
Net income per diluted share**** | $ | 8.10 |  |  | $ | 0.40 |  |  | $ | 0.49 |  |  | $ | (0.32 | ) |  | $ | 0.17 |  |  | $ | 8.83 |
Effective tax rate | 20.7 | % |  |  |  |  |  |  |  |  |  | 24.2 | %
Year Ended December 31, 2017 (Adjusted)
| Reported GAAP measure |  | Intangible amortization expense |  | Restructuring & Integration charges |  | Impact of the Tax Act |  | Other*** |  | Non-GAAP measure
Operating income | $ | 945,736 |  |  | 50,071 |  |  | $ | 74,588 |  |  | $ | — |  |  | 21,000 |  |  | $ | 1,091,395 |
Income before income taxes | 693,917 |  |  | 50,071 |  |  | 74,588 |  |  | — |  |  | 103,828 |  |  | 922,404 |
Provision for income taxes | 286,541 |  |  | 17,744 |  |  | 22,401 |  |  | (124,748 | ) |  | 40,070 |  |  | 242,008 |
Consolidated net income | 407,376 |  |  | 32,327 |  |  | 52,187 |  |  | 124,748 |  |  | 63,758 |  |  | 680,396 |
Noncontrolling interests | 5,200 |  |  | 701 |  |  | — |  |  | — |  |  | — |  |  | 5,901 |
Net income attributable to shareholders | $ | 402,176 |  |  | $ | 31,626 |  |  | $ | 52,187 |  |  | $ | 124,748 |  |  | $ | 63,758 |  |  | $ | 674,495 |
Net income per diluted share | $ | 4.48 |  |  | $ | 0.35 |  |  | $ | 0.58 |  |  | $ | 1.39 |  |  | $ | 0.71 |  |  | $ | 7.51 |
Effective tax rate | 41.3 | % |  |  |  |  |  |  |  |  |  | 26.2 | %
*Other includes gain/loss on investments, net, and pension settlement. **Other includes gain/loss on investments, net, pension settlement, and loss on disposition of businesses, net. ***Other includes gain/loss on investments, net, pension settlement, loss on disposition of businesses, 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 |  | Year Ended
| December 31, 2018 |  | December 31, 2017 |  | December 31, 2018 |  | December 31, 2017
Sales: |  |  |  |  |  |  |
Global components | $ | 5,261,477 |  |  | $ | 4,944,942 |  |  | $ | 20,856,851 |  |  | $ | 18,330,456 |
Global ECS | 2,656,705 |  |  | 2,594,507 |  |  | 8,819,917 |  |  | 8,224,107 |
Consolidated | $ | 7,918,182 |  |  | $ | 7,539,449 |  |  | $ | 29,676,768 |  |  | $ | 26,554,563 |
Operating income (loss): |  |  |  |  |  |  |
Global components | $ | 252,313 |  |  | $ | 217,337 |  |  | $ | 1,007,638 |  |  | $ | 801,027 |
Global ECS | 152,195 |  |  | 161,755 |  |  | 427,605 |  |  | 444,710 |
Corporate (a) | (70,128 | ) |  | (92,268 | ) |  | (287,731 | ) |  | (300,001 | )
Consolidated | $ | 334,380 |  |  | $ | 286,824 |  |  | $ | 1,147,512 |  |  | $ | 945,736 |

(a) | Includes restructuring, integration, and other charges of $9.9 million and $60.4 million for the fourth quarter and year ended December 31, 2018 and $18.8 million and $74.6 million for the fourth quarter and year ended December 31, 2017, respectively.

NON-GAAP SEGMENT RECONCILIATION
| Quarter Ended |  | Year Ended
| December 31, 2018 |  | December 31, 2017 |  | December 31, 2018 |  | December 31, 2017
Global components operating income, as reported | $ | 252,313 |  |  | $ | 217,337 |  |  | $ | 1,007,638 |  |  | $ | 801,027 |
Intangible assets amortization expense | 9,368 |  |  | 6,515 |  |  | 35,367 |  |  | 27,725 |
Global components operating income, as adjusted | $ | 261,681 |  |  | $ | 223,852 |  |  | $ | 1,043,005 |  |  | $ | 828,752 |
Global ECS operating income, as reported | $ | 152,195 |  |  | $ | 161,755 |  |  | $ | 427,605 |  |  | $ | 444,710 |
Intangible assets amortization expense | 2,893 |  |  | 5,647 |  |  | 13,989 |  |  | 22,346 |
Global ECS operating income, as adjusted | $ | 155,088 |  |  | $ | 167,402 |  |  | $ | 441,594 |  |  | $ | 467,056 |

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