EX-99.1 2 q42021pressreleaseex991.htm EX-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 Full-Year 2021 Results
-- Record Fourth-Quarter and Full-Year Sales, Gross Profit, Operating Income, and Earnings Per Share --
-- Fourth-Quarter Earnings Per Share of $5.26; Non-GAAP Earnings Per Share of $5.37 --
CENTENNIAL, Colo.--(BUSINESS WIRE)-Feb. 3, 2022--Arrow Electronics, Inc. (NYSE:ARW) today reported fourth-quarter 2021 sales of $9.02 billion, an increase of 7 percent from sales of $8.45 billion in the fourth quarter of 2020. Fourth-quarter 2021 net income was $371 million, or $5.26 per share on a diluted basis, compared with net income of $236 million, or $3.08 per share on a diluted basis, in the fourth quarter of 2020.
Fourth-quarter 2021 non-GAAP 1 sales increased 8 percent from 2020. Non-GAAP net income 1 was $379 million, or $5.37 per share on a diluted basis, in the fourth quarter of 2021, compared with non-GAAP net income of $243 million, or $3.17 per share on a diluted basis, in the fourth quarter of 2020. In the fourth quarter of 2021, changes in foreign currencies had negative impacts on growth of approximately $73 million on sales and $.07 on earnings per share on a diluted basis compared to the fourth quarter of 2020.
“Our fourth quarter and full year results demonstrate how we are leveraging Arrow’s extensive experience, deep industry knowledge, and expertise in design, engineering, and supply chain to help customers manage through the current market challenges. Arrow is uniquely positioned in the market and customers new and old are increasingly turning to our team, enabling us to build on our relationships and do even more business,” said Michael J. Long, chairman, president, and chief executive officer. “Our organization has worked hard to capture these tremendous opportunities and deliver full-year earnings per share that were more than 75 percent higher than our previous record year.”
Global components fourth-quarter sales of $6.68 billion increased 13 percent year over year. Non-GAAP sales increased 14 percent year over year. Americas components sales increased 32 percent year over year. Asia-Pacific components sales were flat year over year. Europe components sales increased 17 percent year over year. Non-GAAP sales in the region increased 21 percent year over year. Global components fourth-quarter operating income was $430 million. Fourth-quarter non-GAAP operating income was $437 million.
“Our past investments in Arrow’s sales, engineering and supply chain services combined with the current, favorable pricing environment are proving effective for global components,” continued Mr. Long. “As a result of our focused execution, global components delivered the highest margin levels in decades.”
Global enterprise computing solutions fourth-quarter sales of $2.34 billion decreased 8 percent year over year. Non-GAAP sales decreased 6 percent year over year. Europe enterprise computing solutions sales decreased 6 percent year over year. Non-GAAP sales in the region decreased 3 percent year over year. Americas enterprise computing sales decreased 9 percent year over year. Global enterprise computing solutions fourth-quarter operating income was $155 million. Fourth-quarter non-GAAP operating income was $157 million.
“Global enterprise computing solutions is poised for continued success in 2022 as the need for a trusted partner to help customers navigate IT complexity and security has never been greater,” said Mr. Long.
FULL-YEAR RESULTS
Full-year 2021 sales of $34.48 billion increased 20 percent from sales of $28.67 billion in 2020. Net income for 2021 was $1.11 billion, or $15.10 per share on a diluted basis, compared with net income of $584 million, or $7.43 per share on a diluted basis, in 2020.
Full-year 2021 non-GAAP sales increased 19 percent year over year. Non-GAAP net income was $1.14 billion, or $15.50 per share on a diluted basis, in 2021 compared with non-GAAP net income of $610 million, or $7.75 per share on a diluted basis, in 2020. In 2021, changes in foreign currencies had positive impacts on growth of approximately $403 million on sales, and $.14 on earnings per share on a diluted basis compared to 2020.
“We delivered on our commitment to return cash to shareholders while reducing leverage ratios, having returned approximately $250 million through Arrow’s stock repurchase program during the fourth quarter and approximately $900 million throughout 2021, the most we have ever returned in a single year,” said Chris Stansbury, senior vice president and chief financial officer. “These repurchases reflect our confidence in the business and Arrow’s growth potential. With return on invested capital and return on working capital each at record levels, we are pleased to utilize our cash to further enhance shareholder value.”
1 A reconciliation of non-GAAP financial measures, including sales, sales for each segment and in each region, gross profit, operating income, income before income taxes, provision for income taxes, net income, net income attributable to shareholders, and net income per share, to GAAP financial measures is presented in the reconciliation tables included herein.

|  | 1

FIRST-QUARTER 2022 OUTLOOK
•Consolidated sales of $8.35 billion to $8.95 billion, with global components sales of $6.675 billion to $6.975 billion, and global enterprise computing solutions sales of $1.675 billion to $1.975 billion
•Net income per share on a diluted basis of $4.32 to $4.48, and non-GAAP net income per share on a diluted basis 1 of $4.44 to $4.60
•Average tax rate of approximately 23.5% percent compared to the long-term range of 23 to 25 percent
•Average diluted shares outstanding of 69 million
•Interest expense of approximately $35 million
•Expecting average USD-to-Euro exchange rate of $1.13 to €1; changes in foreign currencies to decrease sales by approximately $160 million, and earnings per share on a diluted basis by $.10 compared to the first quarter of 2021

First-Quarter 2022 Outlook
| Reported GAAP measure | Intangible amortization expense | Restructuring & integration charges | Non-GAAP measure
Net income per diluted share | $4.32 to $4.48 | $.10 | $.02 | $4.44 to $4.60

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 220,000 leading technology manufacturers and service providers. With 2021 sales of $34 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, as the term is defined under the federal securities laws, including but not limited to statements regarding: Arrow’s future financial performance, including its outlook on financial results for the first quarter of fiscal 2022, such as sales, net income per diluted share, non-GAAP net income per diluted share, average tax rate, average diluted shares outstanding, interest expense, average USD-to-Euro exchange rate, impact to sales due to changes in foreign currencies, intangible amortization expense per diluted share, restructuring & integration charges per diluted share, and expectation regarding market demand. These forward-looking statements 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: potential adverse effects of the ongoing global COVID-19 coronavirus pandemic, including actions taken to contain or treat COVID-19, industry conditions, 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, foreign currency fluctuation, changes in legal and regulatory matters, non-compliance with certain regulations, such as export, anti-trust, and anti-corruption laws, foreign tax and other loss contingencies, and the company's ability to generate cash flow. For a further discussion of these and other factors that could cause the company’s future results to differ materially from any forward-looking statements, see the section entitled “Risk Factors” in the company's reports on Form 10-K and Form 10-Q and subsequent filings made with the Securities and Exchange Commission. 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.
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, gross profit, operating income, income before income taxes, provision for income taxes, net income, and net income per basic and diluted share.
The company provides non-GAAP sales, gross profit, operating income, income before income taxes, provision for income taxes, net income, net income per share on a diluted basis, effective tax rate, which are non-GAAP measures adjusted for the impact of changes in foreign currencies (referred to as "changes in foreign currencies") by re-translating prior period results at current period foreign exchange rates, the impact of notes receivable reserves and recoveries related to the AFS business (referred to as “AFS notes receivable reserves and recoveries”), identifiable intangible asset amortization, restructuring, integration, and other charges, impairments of long-lived assets, impact of the wind down of the company’s personal computer and mobility asset disposition business (referred to as “wind down”), gains and losses on investments, the impact of certain tax adjustments, and pension settlement gains and losses.
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.

|  | 2

The presentation of 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.
A reconciliation of the company’s non-GAAP financial information to GAAP is set forth in the tables below.

|  | 3

ARROW ELECTRONICS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except per share data)
| Quarter Ended |  | Year Ended
| December 31, 2021 |  | December 31, 2020 |  | December 31, 2021 |  | December 31, 2020
| (Unaudited) |  | (Unaudited) |  |  |  |
Sales | $ | 9,016,077 |  |  | $ | 8,454,192 |  |  | $ | 34,477,018 |  |  | $ | 28,673,363 |
Cost of sales | 7,819,699 |  |  | 7,530,506 |  |  | 30,274,653 |  |  | 25,482,233 |
Gross profit | 1,196,378 |  |  | 923,686 |  |  | 4,202,365 |  |  | 3,191,130 |
Operating expenses: |  |  |  |  |  |  |
Selling, general, and administrative expenses | 632,496 |  |  | 547,530 |  |  | 2,435,030 |  |  | 2,087,050 |
Depreciation and amortization | 48,196 |  |  | 48,404 |  |  | 195,120 |  |  | 189,058 |
Impairments | — |  |  | — |  |  | 4,482 |  |  | 7,223 |
Restructuring, integration, and other charges | 3,754 |  |  | 6,340 |  |  | 10,911 |  |  | 13,288 |
| 684,446 |  |  | 602,274 |  |  | 2,645,543 |  |  | 2,296,619 |
Operating income | 511,932 |  |  | 321,412 |  |  | 1,556,822 |  |  | 894,511 |
Equity in earnings (losses) of affiliated companies | 1,323 |  |  | (839) |  |  | 3,508 |  |  | (531) |
Gain on investments, net | 2,046 |  |  | 8,531 |  |  | 12,951 |  |  | 5,348 |
Employee benefit plan expense, net | (1,256) |  |  | (1,172) |  |  | (5,180) |  |  | (2,859) |
Interest and other financing expense, net | (34,719) |  |  | (31,614) |  |  | (131,727) |  |  | (137,210) |
Income before income taxes | 479,326 |  |  | 296,318 |  |  | 1,436,374 |  |  | 759,259 |
Provision for income taxes | 107,838 |  |  | 59,342 |  |  | 325,906 |  |  | 172,795 |
Consolidated net income | 371,488 |  |  | 236,976 |  |  | 1,110,468 |  |  | 586,464 |
Noncontrolling interests | 280 |  |  | 905 |  |  | 2,271 |  |  | 2,026 |
Net income attributable to shareholders | $ | 371,208 |  |  | $ | 236,071 |  |  | $ | 1,108,197 |  |  | $ | 584,438 |
Net income per share: |  |  |  |  |  |  |
Basic | $ | 5.34 |  |  | $ | 3.12 |  |  | $ | 15.29 |  |  | $ | 7.49 |
Diluted | $ | 5.26 |  |  | $ | 3.08 |  |  | $ | 15.10 |  |  | $ | 7.43 |
Weighted average shares outstanding: |  |  |  |  |  |  |
Basic | 69,556 |  |  | 75,701 |  |  | 72,472 |  |  | 77,992 |
Diluted | 70,550 |  |  | 76,574 |  |  | 73,385 |  |  | 78,635 |

|  | 4

ARROW ELECTRONICS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands except par value)
| December 31, 2021 |  | December 31, 2020
ASSETS |  |  |
Current assets: |  |  |
Cash and cash equivalents | $ | 222,194 |  |  | $ | 373,615 |
Accounts receivable, net | 11,123,946 |  |  | 9,205,343 |
Inventories | 4,201,965 |  |  | 3,287,308 |
Other current assets | 345,218 |  |  | 286,633 |
Total current assets | 15,893,323 |  |  | 13,152,899 |
Property, plant, and equipment, at cost: |  |  |
Land | 5,736 |  |  | 7,940 |
Buildings and improvements | 186,097 |  |  | 207,614 |
Machinery and equipment | 1,523,919 |  |  | 1,553,371 |
| 1,715,752 |  |  | 1,768,925 |
Less: Accumulated depreciation and amortization | (1,032,941) |  |  | (969,320) |
Property, plant, and equipment, net | 682,811 |  |  | 799,605 |
Investments in affiliated companies | 63,695 |  |  | 76,358 |
Intangible assets, net | 195,029 |  |  | 233,819 |
Goodwill | 2,080,371 |  |  | 2,115,469 |
Other assets | 620,311 |  |  | 675,761 |
Total assets | $ | 19,535,540 |  |  | $ | 17,053,911 |
LIABILITIES AND EQUITY |  |  |
Current liabilities: |  |  |
Accounts payable | $ | 9,617,084 |  |  | $ | 7,937,889 |
Accrued expenses | 1,326,386 |  |  | 1,034,361 |
Short-term borrowings, including current portion of long-term debt | 382,619 |  |  | 158,633 |
Total current liabilities | 11,326,089 |  |  | 9,130,883 |
Long-term debt | 2,244,443 |  |  | 2,097,940 |
Other liabilities | 624,162 |  |  | 676,136 |
Equity: |  |  |
Shareholders' equity: |  |  |
Common stock, par value $1: |  |  |
Authorized – 160,000 shares in both 2021 and 2020 |  |  |
Issued – 125,424 shares in both 2021 and 2020 | 125,424 |  |  | 125,424 |
Capital in excess of par value | 1,189,845 |  |  | 1,165,850 |
Treasury stock (57,358 and 50,581 shares in 2021 and 2020, respectively), at cost | (3,629,265) |  |  | (2,776,821) |
Retained earnings | 7,787,948 |  |  | 6,679,751 |
Accumulated other comprehensive loss | (191,657) |  |  | (104,885) |
Total shareholders' equity | 5,282,295 |  |  | 5,089,319 |
Noncontrolling interests | 58,551 |  |  | 59,633 |
Total equity | 5,340,846 |  |  | 5,148,952 |
Total liabilities and equity | $ | 19,535,540 |  |  | $ | 17,053,911 |

|  | 5

ARROW ELECTRONICS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
| Quarter Ended
| December 31, 2021 |  | December 31, 2020
Cash flows from operating activities: |  |  |
Consolidated net income | $ | 371,488 |  |  | $ | 236,976 |
Adjustments to reconcile consolidated net income to net cash provided by operations: |  |  |
Depreciation and amortization | 48,196 |  |  | 48,404 |
Amortization of stock-based compensation | 6,511 |  |  | 6,686 |
Equity in (earnings) losses of affiliated companies | (1,323) |  |  | 839 |
Deferred income taxes | 15,395 |  |  | (9,263) |
Gain on investments, net | (2,013) |  |  | (8,531) |
Other | 757 |  |  | 1,016 |
Change in assets and liabilities, net of effects of acquired and disposed businesses: |  |  |
Accounts receivable, net | (1,846,887) |  |  | (1,074,997) |
Inventories | (378,839) |  |  | (16,248) |
Accounts payable | 1,630,583 |  |  | 988,883 |
Accrued expenses | 217,358 |  |  | 57,330 |
Other assets and liabilities | (33,333) |  |  | (31,089) |
Net cash provided by operating activities | 27,893 |  |  | 200,006 |
Cash flows from investing activities: |  |  |
Acquisition of property, plant, and equipment | (20,766) |  |  | (34,030) |
Other | 389 |  |  | (627) |
Net cash used for investing activities | (20,377) |  |  | (34,657) |
Cash flows from financing activities: |  |  |
Change in short-term and other borrowings | 28,924 |  |  | (8,862) |
Repayment of long-term bank borrowings, net | (289,922) |  |  | (135) |
Net proceeds from note offerings | 495,134 |  |  | — |
Proceeds from exercise of stock options | 2,044 |  |  | 15,074 |
Repurchases of common stock | (250,000) |  |  | (98,985) |
Settlement of forward-starting interest rate swap | 24,896 |  |  | — |
Net cash provided by (used for) financing activities | 11,076 |  |  | (92,908) |
Effect of exchange rate changes on cash | (12,330) |  |  | 74,155 |
Net increase in cash and cash equivalents | 6,262 |  |  | 146,596 |
Cash and cash equivalents at beginning of period | 215,932 |  |  | 227,019 |
Cash and cash equivalents at end of period | $ | 222,194 |  |  | $ | 373,615 |

|  | 6

ARROW ELECTRONICS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
| Year Ended
| December 31, 2021 |  | December 31, 2020
Cash flows from operating activities: |  |  |
Consolidated net income (loss) | $ | 1,110,468 |  |  | $ | 586,464 |
Adjustments to reconcile consolidated net income to net cash provided by operations: |  |  |
Depreciation and amortization | 195,120 |  |  | 189,058 |
Amortization of stock-based compensation | 36,117 |  |  | 35,288 |
Equity in (earnings) losses of affiliated companies | (3,508) |  |  | 531 |
Deferred income taxes | 24,749 |  |  | 29,713 |
Impairments | 4,482 |  |  | 7,223 |
Gain on investments, net | (12,833) |  |  | (5,333) |
Other | 3,947 |  |  | 5,059 |
Change in assets and liabilities, net of effects of acquired and disposed businesses: |  |  |
Accounts receivable, net | (2,109,159) |  |  | (541,427) |
Inventories | (960,605) |  |  | 244,325 |
Accounts payable | 1,766,912 |  |  | 760,883 |
Accrued expenses | 391,941 |  |  | 86,484 |
Other assets and liabilities | (28,648) |  |  | (38,425) |
Net cash provided by operating activities | 418,983 |  |  | 1,359,843 |
Cash flows from investing activities: |  |  |
Acquisition of property, plant, and equipment | (83,051) |  |  | (123,585) |
Proceeds from sale of property, plant, and equipment | 22,171 |  |  | — |
Cash paid for customer relationship intangible asset | — |  |  | (713) |
Other | 762 |  |  | (14,496) |
Net cash used for investing activities | (60,118) |  |  | (138,794) |
Cash flows from financing activities: |  |  |
Change in short-term and other borrowings | 12,938 |  |  | (95,017) |
Repayments of long-term bank borrowings, net | (687) |  |  | (411,497) |
Redemption of notes | (130,860) |  |  | (209,366) |
Net proceeds from note offering | 495,134 |  |  | — |
Proceeds from exercise of stock options | 46,982 |  |  | 21,037 |
Repurchases of common stock | (911,548) |  |  | (483,735) |
Settlement of forward-starting interest rate swap | 24,896 |  |  | (48,378) |
Other | (159) |  |  | (141) |
Net cash used for financing activities | (463,304) |  |  | (1,227,097) |
Effect of exchange rate changes on cash | (46,982) |  |  | 79,560 |
Net increase (decrease) in cash and cash equivalents | (151,421) |  |  | 73,512 |
Cash and cash equivalents at beginning of year | 373,615 |  |  | 300,103 |
Cash and cash equivalents at end of year | $ | 222,194 |  |  | $ | 373,615 |

|  | 7

ARROW ELECTRONICS, INC.
NON-GAAP SALES RECONCILIATION
(In thousands)
(Unaudited)
| Quarter Ended |  |
| December 31, 2021 |  | December 31, 2020 |  | % Change
Consolidated sales, as reported | $ | 9,016,077 |  |  | $ | 8,454,192 |  |  | 6.6 | %
Impact of changes in foreign currencies | — |  |  | (73,179) |  |  |
Non-GAAP consolidated sales | $ | 9,016,077 |  |  | $ | 8,381,013 |  |  | 7.6 | %
Global components sales, as reported | $ | 6,679,577 |  |  | $ | 5,923,094 |  |  | 12.8 | %
Impact of changes in foreign currencies | — |  |  | (37,035) |  |  |
Non-GAAP global components sales | $ | 6,679,577 |  |  | $ | 5,886,059 |  |  | 13.5 | %
Americas components sales, as reported | $ | 2,137,386 |  |  | $ | 1,625,458 |  |  | 31.5 | %
Impact of changes in foreign currencies | — |  |  | (821) |  |  |
Non-GAAP Americas components sales | $ | 2,137,386 |  |  | $ | 1,624,637 |  |  | 31.6 | %
Asia components sales, as reported | $ | 2,948,594 |  |  | $ | 2,935,181 |  |  | 0.5 | %
Impact of changes in foreign currencies | — |  |  | 5,886 |  |  |
Non-GAAP Asia components sales | $ | 2,948,594 |  |  | $ | 2,941,067 |  |  | 0.3 | %
Europe components sales, as reported | $ | 1,593,597 |  |  | $ | 1,362,455 |  |  | 17.0 | %
Impact of changes in foreign currencies | — |  |  | (42,100) |  |  |
Non-GAAP Europe components sales | $ | 1,593,597 |  |  | $ | 1,320,355 |  |  | 20.7 | %
Global ECS sales, as reported | $ | 2,336,500 |  |  | $ | 2,531,098 |  |  | (7.7) | %
Impact of changes in foreign currencies | — |  |  | (36,144) |  |  |
Non-GAAP global ECS sales | $ | 2,336,500 |  |  | $ | 2,494,954 |  |  | (6.4) | %
Americas ECS sales, as reported | $ | 1,356,598 |  |  | $ | 1,483,637 |  |  | (8.6) | %
Impact of changes in foreign currencies | — |  |  | 4,320 |  |  |
Non-GAAP Americas ECS sales | $ | 1,356,598 |  |  | $ | 1,487,957 |  |  | (8.8) | %
Europe ECS sales, as reported | $ | 979,902 |  |  | $ | 1,047,461 |  |  | (6.4) | %
Impact of changes in foreign currencies | — |  |  | (40,464) |  |  |
Non-GAAP Europe ECS sales | $ | 979,902 |  |  | $ | 1,006,997 |  |  | (2.7) | %

|  | 8

ARROW ELECTRONICS, INC.
NON-GAAP SALES RECONCILIATION
(In thousands)
(Unaudited)
| Year Ended |  |
| December 31, 2021 |  | December 31, 2020 |  | % Change
Consolidated sales, as reported | $ | 34,477,018 |  |  | $ | 28,673,363 |  |  | 20.2 | %
Impact of changes in foreign currencies | — |  |  | 403,039 |  |  |
Non-GAAP consolidated sales | $ | 34,477,018 |  |  | $ | 29,076,402 |  |  | 18.6 | %
Global components sales, as reported | $ | 26,357,517 |  |  | $ | 20,502,687 |  |  | 28.6 | %
Impact of changes in foreign currencies | — |  |  | 261,066 |  |  |
Non-GAAP global components sales | $ | 26,357,517 |  |  | $ | 20,763,753 |  |  | 26.9 | %
Americas components sales, as reported | $ | 7,827,866 |  |  | $ | 6,183,119 |  |  | 26.6 | %
Impact of changes in foreign currencies | — |  |  | (396) |  |  |
Non-GAAP Americas components sales | $ | 7,827,866 |  |  | $ | 6,182,723 |  |  | 26.6 | %
Asia components sales, as reported | $ | 12,280,805 |  |  | $ | 9,332,034 |  |  | 31.6 | %
Impact of changes in foreign currencies | — |  |  | 65,991 |  |  |
Non-GAAP Asia components sales | $ | 12,280,805 |  |  | $ | 9,398,025 |  |  | 30.7 | %
Europe components sales, as reported | $ | 6,248,846 |  |  | $ | 4,987,534 |  |  | 25.3 | %
Impact of changes in foreign currencies | — |  |  | 195,471 |  |  |
Non-GAAP Europe components sales | $ | 6,248,846 |  |  | $ | 5,183,005 |  |  | 20.6 | %
Global ECS sales, as reported | $ | 8,119,501 |  |  | $ | 8,170,676 |  |  | (0.6) | %
Impact of changes in foreign currencies | — |  |  | 141,973 |  |  |
Non-GAAP global ECS sales | $ | 8,119,501 |  |  | $ | 8,312,649 |  |  | (2.3) | %
Americas ECS sales, as reported | $ | 4,878,954 |  |  | $ | 5,109,372 |  |  | (4.5) | %
Impact of changes in foreign currencies | — |  |  | 41,974 |  |  |
Non-GAAP Americas ECS sales | $ | 4,878,954 |  |  | $ | 5,151,346 |  |  | (5.3) | %
Europe ECS sales, as reported | $ | 3,240,547 |  |  | $ | 3,061,304 |  |  | 5.9 | %
Impact of changes in foreign currencies | — |  |  | 99,999 |  |  |
Non-GAAP Europe ECS sales | $ | 3,240,547 |  |  | $ | 3,161,303 |  |  | 2.5 | %

|  | 9

ARROW ELECTRONICS, INC.
NON-GAAP EARNINGS RECONCILIATION
(In thousands except per share data)
(Unaudited)
Three months ended December 31, 2021
| Reported GAAP measure | Intangible amortization expense | Restructuring & Integration charges | AFS Reserves & Recoveries |  |  | Impact of Wind Down |  | Other(1) | Non-GAAP measure
Sales | $ | 9,016,077 | $ | — |  | $ | — |  | $ | — |  |  |  | $ | — |  |  | $ | — |  | $ | 9,016,077
Gross Profit | 1,196,378 | — |  | — |  | — |  |  |  | — |  |  | — |  | 1,196,378
Operating income | 511,932 | 9,086 |  | 3,754 |  | — |  |  |  | — |  |  | — |  | 524,772
Income before income taxes | 479,326 | 9,086 |  | 3,754 |  | — |  |  |  | — |  |  | (2,046) |  | 490,120
Provision for income taxes | 107,838 | 2,337 |  | 854 |  | — |  |  |  | — |  |  | (492) |  | 110,537
Consolidated net income | 371,488 | 6,749 |  | 2,900 |  | — |  |  |  | — |  |  | (1,554) |  | 379,583
Noncontrolling interests | 280 | 143 |  | — |  | — |  |  |  | — |  |  | — |  | 423
Net income attributable to shareholders | $ | 371,208 | $ | 6,606 |  | $ | 2,900 |  | $ | — |  |  |  | $ | — |  |  | $ | (1,554) |  | $ | 379,160
Net income per diluted share(4) | $ | 5.26 | $ | 0.09 |  | $ | 0.04 |  | $ | — |  |  |  | $ | — |  |  | $ | (0.02) |  | $ | 5.37
Effective tax rate | 22.5% |  |  |  |  |  |  |  |  | 22.6%
Three months ended December 31, 2020
| Reported GAAP measure | Intangible amortization expense | Restructuring & Integration charges | AFS Reserves & Recoveries |  |  | Impact of Wind Down |  | Other(1) | Non-GAAP measure
Sales | $ | 8,454,192 | $ | — |  | $ | — |  | $ | — |  |  |  | $ | — |  |  | $ | — |  | $ | 8,454,192
Gross Profit | 923,686 | — |  | — |  | — |  |  |  | (33) |  |  | — |  | 923,653
Operating income | 321,412 | 9,376 |  | 6,340 |  | (840) |  |  |  | (417) |  |  | — |  | 335,871
Income before income taxes | 296,318 | 9,376 |  | 6,340 |  | (840) |  |  |  | (412) |  |  | (8,531) |  | 302,251
Provision for income taxes | 59,342 | 2,405 |  | (918) |  | (201) |  |  |  | 102 |  |  | (2,053) |  | 58,677
Consolidated net income | 236,976 | 6,971 |  | 7,258 |  | (639) |  |  |  | (514) |  |  | (6,478) |  | 243,574
Noncontrolling interests | 905 | 148 |  | — |  | — |  |  |  | — |  |  | — |  | 1,053
Net income attributable to shareholders | $ | 236,071 | $ | 6,823 |  | $ | 7,258 |  | $ | (639) |  |  |  | $ | (514) |  |  | $ | (6,478) |  | $ | 242,521
Net income per diluted share(4) | $ | 3.08 | $ | 0.09 |  | $ | 0.09 |  | $ | (0.01) |  |  |  | $ | (0.01) |  |  | $ | (0.08) |  | $ | 3.17
Effective tax rate | 20.0% |  |  |  |  |  |  |  |  | 19.4%

|  | 10

ARROW ELECTRONICS, INC.
NON-GAAP EARNINGS RECONCILIATION
(In thousands except per share data)
(Unaudited)
Year ended December 31, 2021
| Reported GAAP measure | Intangible amortization expense | Restructuring & Integration charges | AFS Reserves & Recoveries |  | Impairments | Impact of Wind Down | Non-recurring tax items | Other(3) | Non-GAAP measure
Sales | $ | 34,477,018 |  | $ | — |  | $ | — |  | $ | — |  |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | 34,477,018 |
Gross Profit | 4,202,365 |  | — |  | — |  | — |  |  | — |  | — |  | — |  | — |  | 4,202,365 |
Operating income | 1,556,822 |  | 36,930 |  | 10,911 |  | — |  |  | 4,482 |  | — |  | — |  | — |  | 1,609,145 |
Income before income taxes | 1,436,374 |  | 36,930 |  | 10,911 |  | — |  |  | 4,482 |  | — |  | — |  | (12,770) |  | 1,475,927 |
Provision for income taxes | 325,906 |  | 9,457 |  | 2,341 |  | — |  |  | 1,078 |  | — |  | — |  | (3,073) |  | 335,709 |
Consolidated net income | 1,110,468 |  | 27,473 |  | 8,570 |  | — |  |  | 3,404 |  | — |  | — |  | (9,697) |  | 1,140,218 |
Noncontrolling interests | 2,271 |  | 590 |  | — |  | — |  |  | — |  | — |  | — |  | — |  | 2,861 |
Net income attributable to shareholders | $ | 1,108,197 |  | $ | 26,883 |  | $ | 8,570 |  | $ | — |  |  | $ | 3,404 |  | $ | — |  | $ | — |  | $ | (9,697) |  | $ | 1,137,357 |
Net income per diluted share(4) | $ | 15.10 |  | $ | 0.37 |  | $ | 0.12 |  | $ | — |  |  | $ | 0.05 |  | $ | — |  | $ | — |  | $ | 0.13 |  | $ | 15.50 |
Effective tax rate | 22.7 | % |  |  |  |  |  |  |  |  | 22.7 | %
Year ended December 31, 2020
| Reported GAAP measure | Intangible amortization expense | Restructuring & Integration charges | AFS Reserves & Recoveries |  | Impairments | Impact of Wind Down | Non-recurring tax items(2) | Other(3) | Non-GAAP measure
Sales | $ | 28,673,363 |  | $ | — |  | $ | — |  | $ | — |  |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | 28,673,363 |
Gross Profit | 3,191,130 |  | — |  | — |  | — |  |  | — |  | (11,204) |  | — |  | — |  | 3,179,926 |
Operating income | 894,511 |  | 38,417 |  | 13,288 |  | (1,796) |  |  | 7,223 |  | (14,728) |  | — |  | — |  | 936,915 |
Income (loss) before income taxes | 759,259 |  | 38,417 |  | 13,288 |  | (1,796) |  |  | 7,223 |  | (14,704) |  | — |  | (7,117) |  | 794,570 |
Provision for income taxes | 172,795 |  | 9,866 |  | 1,301 |  | (432) |  |  | 2,356 |  | (3,143) |  | 1,272 |  | (1,717) |  | 182,298 |
Consolidated net income (loss) | 586,464 |  | 28,551 |  | 11,987 |  | (1,364) |  |  | 4,867 |  | (11,561) |  | (1,272) |  | (5,400) |  | 612,272 |
Noncontrolling interests | 2,026 |  | 568 |  | — |  | — |  |  | — |  | — |  | — |  | — |  | 2,594 |
Net income (loss) attributable to shareholders | $ | 584,438 |  | $ | 27,983 |  | $ | 11,987 |  | $ | (1,364) |  |  | $ | 4,867 |  | $ | (11,561) |  | $ | (1,272) |  | $ | (5,400) |  | $ | 609,678
Net income (loss) per diluted share(4) | $ | 7.43 |  | $ | 0.36 |  | $ | 0.15 |  | $ | (0.02) |  |  | $ | 0.06 |  | $ | (0.15) |  | $ | 0.02 |  | $ | (0.07) |  | $ | 7.75 |
Effective tax rate | 22.8 | % |  |  |  |  |  |  |  |  | 22.9 | %
(1) Other includes gain on investments, net.
(2) Includes income tax (expense) benefit related to legislation changes and other non-recurring tax adjustments.
(3) Other includes gain on investments, net and pension settlement gain.
(4) In all periods presented the sum of the components for non-GAAP diluted EPS may not agree to totals, as presented, due to rounding.

|  | 11

ARROW ELECTRONICS, INC.
SEGMENT INFORMATION
(In thousands)
(Unaudited)
| Quarter Ended |  | Year Ended
| December 31, 2021 |  | December 31, 2020 |  | December 31, 2021 |  | December 31, 2020
Sales: |  |  |  |  |  |  |
Global components | $ | 6,679,577 |  |  | $ | 5,923,094 |  |  | $ | 26,357,517 |  |  | $ | 20,502,687 |
Global ECS | 2,336,500 |  |  | 2,531,098 |  |  | 8,119,501 |  |  | 8,170,676 |
Consolidated | $ | 9,016,077 |  |  | $ | 8,454,192 |  |  | $ | 34,477,018 |  |  | $ | 28,673,363 |
Operating income (loss): |  |  |  |  |  |  |
Global components (a) | $ | 430,415 |  |  | $ | 230,127 |  |  | $ | 1,432,187 |  |  | $ | 780,333 |
Global ECS (b) | 154,852 |  |  | 155,880 |  |  | 390,103 |  |  | 353,763 |
Corporate (c) | (73,335) |  |  | (64,595) |  |  | (265,468) |  |  | (239,585) |
Consolidated | $ | 511,932 |  |  | $ | 321,412 |  |  | $ | 1,556,822 |  |  | $ | 894,511 |

(a)Global components operating income for the years 2021 and 2020 includes $12.5 million and $2.4 million, respectively, related to proceeds from legal settlements.
(b)Global ECS operating income for 2020 includes reserves and other adjustments of approximately $29.9 million primarily related to foreign tax and other loss contingencies for the year ended. These reserves are principally associated with transactional taxes on activity from several prior years, not significant to any one year.
(c)Corporate operating income includes restructuring, integration, and other charges of $3.8 million and $10.9 million for the fourth quarter and year ended December 31, 2021, respectively, and $6.3 million and $13.3 million for the fourth quarter and year ended December 31, 2020, respectively. Also included are impairment charges of $2.3 million related to various long-lived assets for the year ended December 31, 2021.

NON-GAAP SEGMENT RECONCILIATION
| Quarter Ended |  | Year Ended
| December 31, 2021 |  | December 31, 2020 |  | December 31, 2021 |  | December 31, 2020
Global components operating income (loss), as reported | $ | 430,415 |  |  | $ | 230,127 |  |  | $ | 1,432,187 |  |  | $ | 780,333 |
Intangible assets amortization expense (a) | 6,942 |  |  | 7,011 |  |  | 27,915 |  |  | 28,664 |
Impairments (a) | — |  |  | — |  |  | 4,482 |  |  | — |
Impact of wind-down (a) | — |  |  | (417) |  |  | — |  |  | (14,728) |
AFS notes receivable reserve (recoveries) and inventory write-downs | — |  |  | (840) |  |  | — |  |  | (1,796) |
Global components non-GAAP operating income | $ | 437,357 |  |  | $ | 235,881 |  |  | $ | 1,464,584 |  |  | $ | 792,473 |
Global ECS operating income, as reported | $ | 154,852 |  |  | $ | 155,880 |  |  | $ | 390,103 |  |  | $ | 353,763 |
Intangible assets amortization expense | 2,144 |  |  | 2,365 |  |  | 9,015 |  |  | 9,753 |
Impairments | — |  |  | — |  |  | — |  |  | 4,918 |
Global ECS non-GAAP operating income | $ | 156,996 |  |  | $ | 158,245 |  |  | $ | 399,118 |  |  | $ | 368,434 |

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

|  | 12