EX-99.1 2 q32022pressreleaseex991.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 Third-Quarter 2022 Results
-- Record Sales, Gross Profit, Operating Income, and Earnings Per Share --
-- Third-Quarter Earnings Per Share of $5.27; Non-GAAP Earnings Per Share of $5.45 --
CENTENNIAL, Colo.--(BUSINESS WIRE)- Nov. 3, 2022--Arrow Electronics, Inc. (NYSE:ARW) today reported third-quarter 2022 sales of $9.27 billion, an increase of 9 percent year over year, and an increase of 14 percent year over year on a constant currency basis 1. Third-quarter net income was $342 million, or $5.27 per share on a diluted basis, compared with net income of $290 million, or $4.00 per share on a diluted basis, in the third quarter of 2021. Non-GAAP net income 1 was $354 million, or $5.45 per share on a diluted basis, in the third quarter of 2022, compared with non-GAAP net income of $293 million, or $4.04 per share on a diluted basis, in the third quarter of 2021. In the third quarter of 2022, changes in foreign currencies reduced growth by approximately $380 million on sales and $0.17 on earnings per share on a diluted basis compared to the third quarter of 2021.
“I am pleased to report that this was our best third quarter ever. This is a product of strong performance by both our global components and global enterprise computing solutions businesses,” said Sean Kerins, president and chief executive officer. “The dedication and focused execution by our team helped us deliver strong quarterly sales, gross profit, operating income, and earnings per share while facing market conditions that remain challenging.”
Global components third-quarter sales of $7.30 billion reflected an increase of 10 percent year over year, and an increase of 15 percent year over year on a constant currency basis. Asia-Pacific components third-quarter sales decreased 3 percent year over year. Americas components third-quarter sales increased 21 percent year over year. Europe components third-quarter sales increased 21 percent year over year, and increased 41 percent year over year on a constant currency basis. Global components third-quarter operating income was $495 million, and third-quarter non-GAAP operating income was $501 million.
“Demand for electronic components and associated design, engineering, and supply chain services remained strong. While supply is improving modestly, it is still insufficient to support the backlog that has built over prior quarters. Customer service and support remains our priority and our teams continue to work tirelessly to support the deliveries needed by our customers,” said Mr. Kerins.
Global enterprise computing solutions ("ECS") third-quarter sales of $1.97 billion reflected an increase of 4 percent year over year, and an increase of 10 percent year over year on a constant currency basis. Europe enterprise computing solutions third-quarter sales increased 7 percent year over year, and increased 25 percent year over year on a constant currency basis. Americas enterprise computing solutions third-quarter sales increased 3 percent year over year. Global enterprise computing solutions third-quarter operating income was $84 million, and third-quarter non-GAAP operating income was $86 million.
“Global demand for more complex, enterprise IT content was healthy, and while supply constraints persist, we saw some benefit from our historically high backlog. We continue to see strength in cloud and software adoption. We are well positioned for the transition to IT-as-a-Service,” said Mr. Kerins.
“With strong profitability and effective balance sheet management, we continue to generate attractive returns on invested capital,” said Raj Agrawal, senior vice president and chief financial officer. “We delivered on our commitment to return cash to shareholders while also maintaining strong leverage ratios. We repurchased $259 million of shares in the third quarter of 2022, which is the most capital we have ever returned in a single quarter. Our current repurchase authorization stands at $629 million.”
1 A reconciliation of non-GAAP financial measures, including sales, gross profit, operating income, net income attributable to shareholders, and net income per share, to GAAP financial measures is presented in the reconciliation tables included herein.

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FOURTH-QUARTER 2022 OUTLOOK
•Consolidated sales of $8.95 billion to $9.55 billion, with global components sales of $6.80 billion to $7.10 billion, and global enterprise computing solutions sales of $2.15 billion to $2.45 billion
•Net income per share on a diluted basis of $5.44 to $5.64, and non-GAAP net income per share on a diluted basis of $5.60 to $5.80
•Average tax rate of approximately 23.5 percent compared to the long-term range of 23 to 25 percent
•Average diluted shares outstanding of 62 million
•Interest expense of approximately $62 million
•Expecting the average USD-to-Euro exchange rate for the fourth quarter of 2022 to be $0.98 to €1 compared to $1.14 to €1 in the fourth quarter of 2021
•Changes in foreign currencies to reduce year over year growth in sales by $420 million and earnings per share on a diluted basis by $0.25 compared to the fourth quarter of 2021
•Changes in foreign currencies to reduce quarter over quarter growth in sales by $100 million and earnings per share on a diluted basis by $0.07 compared to the third quarter of 2022
•On a constant currency basis, our fourth quarter guidance implies a sequential growth rate range of down 2% to down 6% for global components and up 11% to 26% for global enterprise computing solutions, when compared to the third-quarter of 2022

Fourth-Quarter 2022 GAAP to non-GAAP Outlook Reconciliation
NON-GAAP SALES RECONCILIATION
| Quarter Ended |  |  |  | Quarter Ended |  |
(in billions) | December 31, 2022 |  | December 31, 2021 |  | % Change |  | December 31, 2022 |  | October 1, 2022 |  | % Change
Global components sales, GAAP | $6.80 – $7.10 |  | $ | 6.68 |  |  | 2% - 6% |  | $6.80 – $7.10 |  | $ | 7.30 |  |  | (7%) - (3%)
Impact of changes in foreign currencies | — |  |  | (0.28) |  |  |  |  | — |  |  | (0.07) |  |  |
Global components sales, constant currency | $6.80 – $7.10 |  | $ | 6.40 |  |  | 6% - 11% |  | $6.80 – $7.10 |  | $ | 7.23 |  |  | (6%) - (2%)
Global ECS sales, GAAP | $2.15 – $2.45 |  | $ | 2.34 |  |  | (8%) - 5% |  | $2.15 – $2.45 |  | $ | 1.97 |  |  | 9% - 24%
Impact of changes in foreign currencies | — |  |  | (0.14) |  |  |  |  | — |  |  | (0.03) |  |  |
Global ECS sales, constant currency | $2.15 – $2.45 |  | $ | 2.20 |  |  | (2%) - 11% |  | $2.15 – $2.45 |  | $ | 1.94 |  |  | 11% - 26%

NON-GAAP EARNINGS RECONCILIATION
| Reported GAAP measure | Intangible amortization expense | Restructuring & integration charges | Non-GAAP measure
Net income per diluted share | $5.44 to $5.64 | $0.10 | $0.06 | $5.60 to $5.80

Please refer to the CFO commentary, which can be found at investor.arrow.com, as a supplement to the company’s earnings release. The company uses its website as a tool to disclose important information about the company and comply with its disclosure obligations under Regulation Fair Disclosure.
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.

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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 fourth 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: disruptions or inefficiencies in the supply chain, including any potential adverse effects of the ongoing global COVID-19 pandemic, impacts of the conflict in Ukraine, industry conditions, changes in product supply, pricing and customer demand, competition, other vagaries in the global components and the global enterprise computing solutions (“ECS”) markets, deteriorating economic conditions, including economic recession, inflation, tax rates, foreign currency exchange rates, or the availability of capital, changes in relationships with key suppliers, increased profit margin pressure, changes in legal and regulatory matters, non-compliance with certain regulations, such as export, antitrust, 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 most recent Quarterly Report on Form 10-Q and the company's most recent Annual Report on Form 10-K, as well as in other filings the company makes 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 The company provides non-GAAP sales, gross profit, operating income, income before income taxes, provision for income taxes, consolidated net income, noncontrolling interests, net income attributable to shareholders, effective tax rate and net income per share on a diluted basis, which are non-GAAP measures adjusted for the impact of changes in foreign currencies (referred to as "changes in foreign currencies" or "on a constant currency basis") by re-translating prior-period results at current period foreign exchange rates, identifiable intangible asset amortization, restructuring, integration, and other charges, pension settlement loss and net gains and losses on investments. Management believes that providing this additional information is useful to the reader to better assess and understand the company’s operating performance and future prospects in the same manner as management, especially when comparing results with previous periods. Management typically monitors the business as adjusted for these items, in addition to GAAP results, to understand and compare operating results across accounting periods, for internal budgeting purposes, for short- and long-term operating plans, and to evaluate the company's financial performance. However, analysis of results on a non-GAAP basis should be used as a complement to, in conjunction with, and not as a substitute for, 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 |  | Nine Months Ended
| October 1, 2022 |  | October 2, 2021 |  | October 1, 2022 |  | October 2, 2021
Sales | $ | 9,266,432 |  |  | $ | 8,512,391 |  |  | $ | 27,801,399 |  |  | $ | 25,460,941 |
Cost of sales | 8,079,520 |  |  | 7,436,619 |  |  | 24,170,769 |  |  | 22,454,954 |
Gross profit | 1,186,912 |  |  | 1,075,772 |  |  | 3,630,630 |  |  | 3,005,987 |
Operating expenses: |  |  |  |  |  |  |
Selling, general, and administrative expenses | 634,353 |  |  | 625,883 |  |  | 1,931,918 |  |  | 1,802,534 |
Depreciation and amortization | 46,230 |  |  | 48,054 |  |  | 141,787 |  |  | 146,924 |
Restructuring, integration, and other charges (credits) | 3,635 |  |  | (3,030) |  |  | 11,027 |  |  | 11,639 |
| 684,218 |  |  | 670,907 |  |  | 2,084,732 |  |  | 1,961,097 |
Operating income | 502,694 |  |  | 404,865 |  |  | 1,545,898 |  |  | 1,044,890 |
Equity in earnings of affiliated companies | 1,718 |  |  | 1,151 |  |  | 4,726 |  |  | 2,185 |
Gain (loss) on investments, net | (3,480) |  |  | 1,386 |  |  | (11,213) |  |  | 10,905 |
Employee benefit plan expense, net | (890) |  |  | (1,256) |  |  | (2,614) |  |  | (3,924) |
Interest and other financing expense, net | (50,936) |  |  | (32,667) |  |  | (123,427) |  |  | (97,008) |
Income before income taxes | 449,106 |  |  | 373,479 |  |  | 1,413,370 |  |  | 957,048 |
Provision for income taxes | 105,500 |  |  | 82,929 |  |  | 332,273 |  |  | 218,068 |
Consolidated net income | 343,606 |  |  | 290,550 |  |  | 1,081,097 |  |  | 738,980 |
Noncontrolling interests | 1,207 |  |  | 523 |  |  | 3,615 |  |  | 1,991 |
Net income attributable to shareholders | $ | 342,399 |  |  | $ | 290,027 |  |  | $ | 1,077,482 |  |  | $ | 736,989 |
Net income per share: |  |  |  |  |  |  |
Basic | $ | 5.33 |  |  | $ | 4.05 |  |  | $ | 16.31 |  |  | $ | 10.04 |
Diluted | $ | 5.27 |  |  | $ | 4.00 |  |  | $ | 16.12 |  |  | $ | 9.92 |
Weighted-average shares outstanding: |  |  |  |  |  |  |
Basic | 64,228 |  |  | 71,671 |  |  | 66,055 |  |  | 73,426 |
Diluted | 64,979 |  |  | 72,571 |  |  | 66,845 |  |  | 74,313 |

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ARROW ELECTRONICS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands except par value)
(Unaudited)
| October 1, 2022 |  | December 31, 2021
ASSETS |  |  |
Current assets: |  |  |
Cash and cash equivalents | $ | 333,985 |  |  | $ | 222,194 |
Accounts receivable, net | 11,218,611 |  |  | 11,123,946 |
Inventories | 5,083,378 |  |  | 4,201,965 |
Other current assets | 495,145 |  |  | 345,218 |
Total current assets | 17,131,119 |  |  | 15,893,323 |
Property, plant, and equipment, at cost: |  |  |
Land | 5,691 |  |  | 5,736 |
Buildings and improvements | 184,091 |  |  | 186,097 |
Machinery and equipment | 1,544,457 |  |  | 1,523,919 |
| 1,734,239 |  |  | 1,715,752 |
Less: Accumulated depreciation and amortization | (1,138,372) |  |  | (1,032,941) |
Property, plant, and equipment, net | 595,867 |  |  | 682,811 |
Investments in affiliated companies | 66,358 |  |  | 63,695 |
Intangible assets, net | 166,388 |  |  | 195,029 |
Goodwill | 1,979,233 |  |  | 2,080,371 |
Other assets | 566,764 |  |  | 620,311 |
Total assets | $ | 20,505,729 |  |  | $ | 19,535,540 |
LIABILITIES AND EQUITY |  |  |
Current liabilities: |  |  |
Accounts payable | $ | 9,540,449 |  |  | $ | 9,617,084 |
Accrued expenses | 1,273,097 |  |  | 1,326,386 |
Short-term borrowings, including current portion of long-term debt | 604,521 |  |  | 382,619 |
Total current liabilities | 11,418,067 |  |  | 11,326,089 |
Long-term debt | 3,187,025 |  |  | 2,244,443 |
Other liabilities | 597,951 |  |  | 624,162 |
Equity: |  |  |
Shareholders’ equity: |  |  |
Common stock, par value $1: |  |  |
Authorized - 160,000 shares in both 2022 and 2021 |  |  |
Issued - 125,424 shares in both 2022 and 2021 | 125,424 |  |  | 125,424 |
Capital in excess of par value | 1,201,185 |  |  | 1,189,845 |
Treasury stock (63,324 and 57,358 shares in 2022 and 2021, respectively), at cost | (4,338,414) |  |  | (3,629,265) |
Retained earnings | 8,865,430 |  |  | 7,787,948 |
Accumulated other comprehensive loss | (607,878) |  |  | (191,657) |
Total shareholders’ equity | 5,245,747 |  |  | 5,282,295 |
Noncontrolling interests | 56,939 |  |  | 58,551 |
Total equity | 5,302,686 |  |  | 5,340,846 |
Total liabilities and equity | $ | 20,505,729 |  |  | $ | 19,535,540 |

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ARROW ELECTRONICS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
| Quarter Ended
| October 1, 2022 |  | October 2, 2021
Cash flows from operating activities: |  |  |
Consolidated net income | $ | 343,606 |  |  | $ | 290,550 |
Adjustments to reconcile consolidated net income to net cash provided by (used for) operations: |  |  |
Depreciation and amortization | 46,230 |  |  | 48,054 |
Amortization of stock-based compensation | 3,773 |  |  | 7,639 |
Equity in earnings of affiliated companies | (1,718) |  |  | (1,151) |
Deferred income taxes | 8,152 |  |  | (2,715) |
Loss (gain) on investments, net | 3,480 |  |  | (1,301) |
Other | 307 |  |  | 1,539 |
Change in assets and liabilities: |  |  |
Accounts receivable, net | (594,767) |  |  | (545,314) |
Inventories | (255,871) |  |  | (211,554) |
Accounts payable | 482,061 |  |  | 413,992 |
Accrued expenses | 132,636 |  |  | 91,481 |
Other assets and liabilities | (26,823) |  |  | 23,026 |
Net cash provided by (used for) operating activities | 141,066 |  |  | 114,246 |
Cash flows from investing activities: |  |  |
Acquisition of property, plant, and equipment | (18,536) |  |  | (21,176) |
Proceeds from collections of notes receivable | 263 |  |  | 373 |
Net cash used for investing activities | (18,273) |  |  | (20,803) |
Cash flows from financing activities: |  |  |
Change in short-term and other borrowings | (19,506) |  |  | (1,155) |
Proceeds (payments) from long-term bank borrowings, net | 328,268 |  |  | 154,994 |
Proceeds from exercise of stock options | 762 |  |  | 3,621 |
Repurchases of common stock | (241,291) |  |  | (250,221) |
Net cash provided by (used for) financing activities | 68,233 |  |  | (92,761) |
Effect of exchange rate changes on cash | (82,637) |  |  | (28,820) |
Net increase (decrease) in cash and cash equivalents | 108,389 |  |  | (28,138) |
Cash and cash equivalents at beginning of period | 225,596 |  |  | 244,070 |
Cash and cash equivalents at end of period | $ | 333,985 |  |  | $ | 215,932 |

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ARROW ELECTRONICS, INC. |
CONSOLIDATED STATEMENTS OF CASH FLOWS |
(In thousands) |
(Unaudited) |
| Nine Months Ended |
| October 1, 2022 |  | October 2, 2021 |
Cash flows from operating activities: |  |  |  |
Consolidated net income | $ | 1,081,097 |  |  | $ | 738,980 |  |
Adjustments to reconcile consolidated net income to net cash provided by (used for) operations: |  |  |  |
Depreciation and amortization | 141,787 |  |  | 146,924 |  |
Amortization of stock-based compensation | 35,009 |  |  | 29,606 |  |
Equity in earnings of affiliated companies | (4,726) |  |  | (2,185) |  |
Deferred income taxes | 1,468 |  |  | 9,354 |  |
Loss (gain) on investments, net | 11,213 |  |  | (10,820) |  |
Other | 2,673 |  |  | 7,672 |  |
Change in assets and liabilities: |  |  |  |
Accounts receivable, net | (628,974) |  |  | (262,272) |  |
Inventories | (1,011,763) |  |  | (581,766) |  |
Accounts payable | 166,602 |  |  | 136,329 |  |
Accrued expenses | 192,759 |  |  | 174,583 |  |
Other assets and liabilities | (128,909) |  |  | 4,685 |  |
Net cash provided by (used for) operating activities | (141,764) |  |  | 391,090 |  |
Cash flows from investing activities: |  |  |  |
Acquisition of property, plant, and equipment | (54,780) |  |  | (62,285) |  |
Proceeds from sale of property, plant, and equipment | — |  |  | 22,171 |  |
Proceeds from collections of notes receivable | 20,805 |  |  | 373 |  |
Net cash used for investing activities | (33,975) |  |  | (39,741) |  |
Cash flows from financing activities: |  |  |  |
Change in short-term and other borrowings | 276,516 |  |  | (15,986) |  |
Proceeds from long-term bank borrowings, net | 1,238,268 |  |  | 289,235 |  |
Redemption of notes | (350,000) |  |  | (130,860) |  |
Proceeds from exercise of stock options | 16,434 |  |  | 44,938 |  |
Repurchases of common stock | (725,254) |  |  | (661,548) |  |
Other | (137) |  |  | (159) |  |
Net cash provided by (used for) financing activities | 455,827 |  |  | (474,380) |  |
Effect of exchange rate changes on cash | (168,297) |  |  | (34,652) |  |
Net increase (decrease) in cash and cash equivalents | 111,791 |  |  | (157,683) |  |
Cash and cash equivalents at beginning of period | 222,194 |  |  | 373,615 |  |
Cash and cash equivalents at end of period | $ | 333,985 |  |  | $ | 215,932 |  |

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ARROW ELECTRONICS, INC.
NON-GAAP SALES RECONCILIATION
(In thousands)
(Unaudited)
| Quarter Ended |  |
| October 1, 2022 |  | October 2, 2021 |  | % Change
Consolidated sales, as reported | $ | 9,266,432 |  |  | $ | 8,512,391 |  |  | 8.9 | %
Impact of changes in foreign currencies | — |  |  | (379,717) |  |  |
Consolidated sales, constant currency | $ | 9,266,432 |  |  | $ | 8,132,674 |  |  | 13.9 | %
Global components sales, as reported | $ | 7,300,347 |  |  | $ | 6,623,926 |  |  | 10.2 | %
Impact of changes in foreign currencies | — |  |  | (273,237) |  |  |
Global components sales, constant currency | $ | 7,300,347 |  |  | $ | 6,350,689 |  |  | 15.0 | %
Americas components sales, as reported | $ | 2,445,647 |  |  | $ | 2,018,551 |  |  | 21.2 | %
Impact of changes in foreign currencies | — |  |  | (3,252) |  |  |
Americas components sales, constant currency | $ | 2,445,647 |  |  | $ | 2,015,299 |  |  | 21.4 | %
Asia components sales, as reported | $ | 2,918,873 |  |  | $ | 3,009,390 |  |  | (3.0) | %
Impact of changes in foreign currencies | — |  |  | (45,046) |  |  |
Asia components sales, constant currency | $ | 2,918,873 |  |  | $ | 2,964,344 |  |  | (1.5) | %
Europe components sales, as reported | $ | 1,935,827 |  |  | $ | 1,595,985 |  |  | 21.3 | %
Impact of changes in foreign currencies | — |  |  | (224,939) |  |  |
Europe components sales, constant currency | $ | 1,935,827 |  |  | $ | 1,371,046 |  |  | 41.2 | %
Global ECS sales, as reported | $ | 1,966,085 |  |  | $ | 1,888,465 |  |  | 4.1 | %
Impact of changes in foreign currencies | — |  |  | (106,480) |  |  |
Global ECS sales, constant currency | $ | 1,966,085 |  |  | $ | 1,781,985 |  |  | 10.3 | %
Americas ECS sales, as reported | $ | 1,234,158 |  |  | $ | 1,203,663 |  |  | 2.5 | %
Impact of changes in foreign currencies | — |  |  | (5,696) |  |  |
Americas ECS sales, constant currency | $ | 1,234,158 |  |  | $ | 1,197,967 |  |  | 3.0 | %
Europe ECS sales, as reported | $ | 731,927 |  |  | $ | 684,802 |  |  | 6.9 | %
Impact of changes in foreign currencies | — |  |  | (100,784) |  |  |
Europe ECS sales, constant currency | $ | 731,927 |  |  | $ | 584,018 |  |  | 25.3 | %

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ARROW ELECTRONICS, INC.
NON-GAAP SALES RECONCILIATION
(In thousands)
(Unaudited)
| Nine Months Ended |  |
| October 1, 2022 |  | October 2, 2021 |  | % Change
Consolidated sales, as reported | $ | 27,801,399 |  |  | $ | 25,460,941 |  |  | 9.2 | %
Impact of changes in foreign currencies | — |  |  | (821,785) |  |  |
Consolidated sales, constant currency | $ | 27,801,399 |  |  | $ | 24,639,156 |  |  | 12.8 | %
Global components sales, as reported | $ | 21,960,974 |  |  | $ | 19,677,940 |  |  | 11.6 | %
Impact of changes in foreign currencies | — |  |  | (565,254) |  |  |
Global components sales, constant currency | $ | 21,960,974 |  |  | $ | 19,112,686 |  |  | 14.9 | %
Americas components sales, as reported | $ | 7,265,552 |  |  | $ | 5,690,480 |  |  | 27.7 | %
Impact of changes in foreign currencies | — |  |  | (5,974) |  |  |
Americas components sales, constant currency | $ | 7,265,552 |  |  | $ | 5,684,506 |  |  | 27.8 | %
Asia components sales, as reported | $ | 9,024,188 |  |  | $ | 9,332,211 |  |  | (3.3) | %
Impact of changes in foreign currencies | — |  |  | (69,024) |  |  |
Asia components sales, constant currency | $ | 9,024,188 |  |  | $ | 9,263,187 |  |  | (2.6) | %
Europe components sales, as reported | $ | 5,671,234 |  |  | $ | 4,655,249 |  |  | 21.8 | %
Impact of changes in foreign currencies | — |  |  | (490,256) |  |  |
Europe components sales, constant currency | $ | 5,671,234 |  |  | $ | 4,164,993 |  |  | 36.2 | %
Global ECS sales, as reported | $ | 5,840,425 |  |  | $ | 5,783,001 |  |  | 1.0 | %
Impact of changes in foreign currencies | — |  |  | (256,531) |  |  |
Global ECS sales, constant currency | $ | 5,840,425 |  |  | $ | 5,526,470 |  |  | 5.7 | %
Americas ECS sales, as reported | $ | 3,442,803 |  |  | $ | 3,522,356 |  |  | (2.3) | %
Impact of changes in foreign currencies | — |  |  | (15,459) |  |  |
Americas ECS sales, constant currency | $ | 3,442,803 |  |  | $ | 3,506,897 |  |  | (1.8) | %
Europe ECS sales, as reported | $ | 2,397,622 |  |  | $ | 2,260,645 |  |  | 6.1 | %
Impact of changes in foreign currencies | — |  |  | (241,072) |  |  |
Europe ECS sales, constant currency | $ | 2,397,622 |  |  | $ | 2,019,573 |  |  | 18.7 | %

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ARROW ELECTRONICS, INC.
NON-GAAP EARNINGS RECONCILIATION
(In thousands except per share data)
(Unaudited)
Three months ended October 1, 2022
| Reported GAAP measure |  | Intangible amortization expense |  | Restructuring & Integration charges |  |  |  |  |  | Other(1) |  | Non-GAAP measure
Sales | $ | 9,266,432 |  |  | $ | — |  |  | $ | — |  |  |  |  |  |  | $ | — |  |  | $ | 9,266,432 |
Gross Profit | 1,186,912 |  |  | — |  |  | — |  |  |  |  |  |  | — |  |  | 1,186,912 |
Operating income | 502,694 |  |  | 8,674 |  |  | 3,635 |  |  |  |  |  |  | — |  |  | 515,003 |
Income before income taxes | 449,106 |  |  | 8,674 |  |  | 3,635 |  |  |  |  |  |  | 3,480 |  |  | 464,895 |
Provision for income taxes | 105,500 |  |  | 2,219 |  |  | 892 |  |  |  |  |  |  | 841 |  |  | 109,452 |
Consolidated net income | 343,606 |  |  | 6,455 |  |  | 2,743 |  |  |  |  |  |  | 2,639 |  |  | 355,443 |
Noncontrolling interests | 1,207 |  |  | 125 |  |  | — |  |  |  |  |  |  | — |  |  | 1,332 |
Net income attributable to shareholders | $ | 342,399 |  |  | $ | 6,330 |  |  | $ | 2,743 |  |  |  |  |  |  | $ | 2,639 |  |  | $ | 354,111 |
Net income per diluted share (3) | $ | 5.27 |  |  | $ | 0.10 |  |  | $ | 0.04 |  |  |  |  |  |  | $ | 0.04 |  |  | $ | 5.45 |
Effective tax rate (4) | 23.5 | % |  |  |  |  |  |  |  |  |  |  |  | 23.5 | %
Three months ended October 2, 2021
| Reported GAAP measure |  | Intangible amortization expense |  | Restructuring & Integration charges (credits) |  |  |  |  |  | Other(1) |  | Non-GAAP measure
Sales | $ | 8,512,391 |  |  | $ | — |  |  | $ | — |  |  |  |  |  |  | $ | — |  |  | $ | 8,512,391 |
Gross Profit | 1,075,772 |  |  | — |  |  | — |  |  |  |  |  |  | — |  |  | 1,075,772 |
Operating income | 404,865 |  |  | 9,202 |  |  | (3,030) |  |  |  |  |  |  | — |  |  | 411,037 |
Income before income taxes | 373,479 |  |  | 9,202 |  |  | (3,030) |  |  |  |  |  |  | (1,386) |  |  | 378,265 |
Provision for income taxes | 82,929 |  |  | 2,353 |  |  | (689) |  |  |  |  |  |  | (334) |  |  | 84,259 |
Consolidated net income | 290,550 |  |  | 6,849 |  |  | (2,341) |  |  |  |  |  |  | (1,052) |  |  | 294,006 |
Noncontrolling interests | 523 |  |  | 147 |  |  | — |  |  |  |  |  |  | — |  |  | 670 |
Net income attributable to shareholders | $ | 290,027 |  |  | $ | 6,702 |  |  | $ | (2,341) |  |  |  |  |  |  | $ | (1,052) |  |  | $ | 293,336 |
Net income per diluted share (3) | $ | 4.00 |  |  | $ | 0.09 |  |  | $ | (0.03) |  |  |  |  |  |  | $ | (0.01) |  |  | $ | 4.04 |
Effective tax rate (4) | 22.2 | % |  |  |  |  |  |  |  |  |  |  |  | 22.3 | %

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ARROW ELECTRONICS, INC.
NON-GAAP EARNINGS RECONCILIATION
(In thousands except per share data)
(Unaudited)
Nine months ended October 1, 2022
| Reported GAAP measure |  | Intangible amortization expense |  | Restructuring & Integration charges |  |  |  |  |  | Other(1) |  | Non-GAAP measure
Sales | $ | 27,801,399 |  |  | $ | — |  |  | $ | — |  |  |  |  |  |  | $ | — |  |  | $ | 27,801,399 |
Gross Profit | 3,630,630 |  |  | — |  |  | — |  |  |  |  |  |  | — |  |  | 3,630,630 |
Operating income | 1,545,898 |  |  | 26,522 |  |  | 11,027 |  |  |  |  |  |  | — |  |  | 1,583,447 |
Income before income taxes | 1,413,370 |  |  | 26,522 |  |  | 11,027 |  |  |  |  |  |  | 11,213 |  |  | 1,462,132 |
Provision for income taxes | 332,273 |  |  | 6,792 |  |  | 2,459 |  |  |  |  |  |  | 2,711 |  |  | 344,235 |
Consolidated net income | 1,081,097 |  |  | 19,730 |  |  | 8,568 |  |  |  |  |  |  | 8,502 |  |  | 1,117,897 |
Noncontrolling interests | 3,615 |  |  | 398 |  |  | — |  |  |  |  |  |  | — |  |  | 4,013 |
Net income attributable to shareholders | $ | 1,077,482 |  |  | $ | 19,332 |  |  | $ | 8,568 |  |  |  |  |  |  | $ | 8,502 |  |  | $ | 1,113,884 |
Net income per diluted share (3) | $ | 16.12 |  |  | $ | 0.29 |  |  | $ | 0.13 |  |  |  |  |  |  | $ | 0.13 |  |  | $ | 16.66 |
Effective tax rate (4) | 23.5 | % |  |  |  |  |  |  |  |  |  |  |  | 23.5 | %
Nine months ended October 2, 2021
| Reported GAAP measure |  | Intangible amortization expense |  | Restructuring & Integration charges(5) |  |  |  |  |  | Other(2) |  | Non-GAAP measure
Sales | $ | 25,460,941 |  |  | $ | — |  |  | $ | — |  |  |  |  |  |  | $ | — |  |  | $ | 25,460,941 |
Gross Profit | 3,005,987 |  |  | — |  |  | — |  |  |  |  |  |  | — |  |  | 3,005,987 |
Operating income | 1,044,890 |  |  | 27,844 |  |  | 11,639 |  |  |  |  |  |  | — |  |  | 1,084,373 |
Income before income taxes | 957,048 |  |  | 27,844 |  |  | 11,639 |  |  |  |  |  |  | (10,724) |  |  | 985,807 |
Provision for income taxes | 218,068 |  |  | 7,120 |  |  | 2,565 |  |  |  |  |  |  | (2,581) |  |  | 225,172 |
Consolidated net income | 738,980 |  |  | 20,724 |  |  | 9,074 |  |  |  |  |  |  | (8,143) |  |  | 760,635 |
Noncontrolling interests | 1,991 |  |  | 447 |  |  | — |  |  |  |  |  |  | — |  |  | 2,438 |
Net income attributable to shareholders | $ | 736,989 |  |  | $ | 20,277 |  |  | $ | 9,074 |  |  |  |  |  |  | $ | (8,143) |  |  | $ | 758,197 |
Net income per diluted share (3) | $ | 9.92 |  |  | $ | 0.27 |  |  | $ | 0.12 |  |  |  |  |  |  | $ | (0.11) |  |  | $ | 10.20 |
Effective tax rate (4) | 22.8 | % |  |  |  |  |  |  |  |  |  |  |  | 22.8 | %
(1) Other includes (gain) loss on investments, net.
(2) Other includes gain on investments, net and pension settlement loss.
(3) The sum of the components for diluted EPS, as adjusted may not agree to totals, as presented, due to rounding.
(4) The items as shown in this table, represent the reconciling items for the tax rate as reported by GAAP measure and as a non-GAAP measure.
(5) Restructuring & Integration charges include impairment related to various long-lived assets.

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ARROW ELECTRONICS, INC.
SEGMENT INFORMATION
(In thousands)
(Unaudited)
| Quarter Ended |  | Nine Months Ended
| October 1, 2022 |  | October 2, 2021 |  | October 1, 2022 |  | October 2, 2021
Sales: |  |  |  |  |  |  |
Global components | $ | 7,300,347 |  |  | $ | 6,623,926 |  |  | $ | 21,960,974 |  |  | $ | 19,677,940 |
Global ECS | 1,966,085 |  |  | 1,888,465 |  |  | 5,840,425 |  |  | 5,783,001 |
Consolidated | $ | 9,266,432 |  |  | $ | 8,512,391 |  |  | $ | 27,801,399 |  |  | $ | 25,460,941 |
Operating income (loss): |  |  |  |  |  |  |
Global components (a) | $ | 494,587 |  |  | $ | 385,353 |  |  | $ | 1,518,423 |  |  | $ | 1,001,772 |
Global ECS | 83,976 |  |  | 76,793 |  |  | 253,744 |  |  | 235,251 |
Corporate (b) | (75,869) |  |  | (57,281) |  |  | (226,269) |  |  | (192,133) |
Consolidated | $ | 502,694 |  |  | $ | 404,865 |  |  | $ | 1,545,898 |  |  | $ | 1,044,890 |

(a)Global components operating income includes $12.5 million related to proceeds from legal settlements for the first nine months of 2021. Global components operating income for the first nine months of 2021 includes $4.5 million in restructuring, integration, and other charges.
(b)Corporate operating income includes restructuring, integration, and other charges (credits) of $3.6 million and $11.0 million for the third quarter and first nine months of 2022, respectively, and $(3.0) million and $7.2 million for the third quarter and first nine months of 2021, respectively.

NON-GAAP SEGMENT RECONCILIATION
| Quarter Ended |  | Nine Months Ended
| October 1, 2022 |  | October 2, 2021 |  | October 1, 2022 |  | October 2, 2021
Global components operating income, as reported | $ | 494,587 |  |  | $ | 385,353 |  |  | $ | 1,518,423 |  |  | $ | 1,001,772 |
Intangible assets amortization expense | 6,691 |  |  | 6,974 |  |  | 20,303 |  |  | 20,973 |
Restructuring, integration, and other charges | — |  |  | — |  |  | — |  |  | 4,482 |
Global components non-GAAP operating income | $ | 501,278 |  |  | $ | 392,327 |  |  | $ | 1,538,726 |  |  | $ | 1,027,227 |
Global ECS operating income, as reported | $ | 83,976 |  |  | $ | 76,793 |  |  | $ | 253,744 |  |  | $ | 235,251 |
Intangible assets amortization expense | 1,983 |  |  | 2,228 |  |  | 6,219 |  |  | 6,871 |
Global ECS non-GAAP operating income | $ | 85,959 |  |  | $ | 79,021 |  |  | $ | 259,963 |  |  | $ | 242,122 |

Contact: Richard Seidlitz,
Vice President, Principal Accounting Officer
303-305-4936
Media Contact: John Hourigan,
Vice President, Global Communications
303-824-4586

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