EX-99.1 2 q42017pressreleaseexhibit9.htm EXHIBIT 99.1 Exhibit
ARROW ELECTRONICS. INC.
9201 E. DRY CREEKROAD
CENTENNIAL, CO 80112
303-824-4000
 
NEWS

Exhibit 99.1
Arrow Electronics Reports Fourth-Quarter and Year-End 2017 Results
-- Record Fourth-Quarter and Full-Year Sales and Operating Income --
-- Full-Year 2017 Sales Advanced $3 Billion Over Full-Year 2016 --
CENTENNIAL, Colo.--(BUSINESS WIRE)-Feb. 6, 2018--Arrow Electronics, Inc. (NYSE:ARW) today reported fourth-quarter 2017 sales of $7.63 billion, an increase of 18 percent from sales of $6.44 billion in the fourth quarter of 2016. Fourth-quarter net income of $54 million, or $0.60 per share on a diluted basis, compared with net income of $165 million, or $1.81 per share on a diluted basis, in the fourth quarter of 2016. Excluding certain items1, net income would have been $224 million, or $2.51 per share on a diluted basis, in the fourth quarter of 2017, compared with net income of $182 million, or $2.00 per share on a diluted basis, in the fourth quarter of 2016. In the fourth quarter of 2017, changes in foreign currencies had positive impacts on growth of approximately $190 million or 3 percent on sales and $0.09 or 5 percent on earnings per share on a diluted basis compared to the fourth quarter of 2016. In the fourth quarter of 2017 net income was negatively impacted by $125 million, or $1.40 per diluted share, related to U.S. tax legislation. In the fourth-quarter of 2017, net income, excluding certain items1, was positively impacted by $9 million, or $.10 per diluted share, due to tax reserve releases resulting in an effective tax rate that was below the low-end of our prior expected range.
“We are selling complete solutions enabling new entrant, mid-market, and large-scale customers to move quickly from idea to production. This is driving tremendous growth for our suppliers, and for Arrow, as evidenced by our record fourth quarter and full-year sales and operating income,” said Michael J. Long, chairman, president, and chief executive officer. “By making it easy for our customers and suppliers to capture growth, we have built unparalleled trust in the marketplace.”
Global components fourth-quarter sales of $4.94 billion grew 24 percent year over year. Fourth-quarter sales, as adjusted, grew 21 percent year over year. Americas components sales grew 25 percent year over year. Europe components sales grew 35 percent year over year. Sales in the region, as adjusted, grew 24 percent year over year. Asia-Pacific components sales grew 16 percent year over year. Sales in the region, as adjusted, grew 14 percent year over year. “Demand conditions remain strong around the world due to growing electronic content in the industrial and transportation end markets, and strong execution by our team,” said Mr. Long.
Global enterprise computing solutions fourth-quarter sales of $2.69 billion grew 10 percent year over year. Fourth-quarter sales, as adjusted, grew 6 percent year over year. Americas sales grew 5 percent year over year. Europe sales grew 19 percent year over year. Sales in the region, as adjusted, grew 8 percent year over year. “Fourth-quarter sales exceeded our expectation driven by new and expanded customer engagements, continued growth in our infrastructure software portfolio, and a return to growth for storage,” added Mr. Long.
FULL-YEAR RESULTS
Full-year 2017 sales of $26.81 billion increased 13 percent from sales of $23.83 billion in 2016. Net income for 2017 was $402 million, or $4.48 per share on a diluted basis, compared with net income of $523 million, or $5.68 per share on a diluted basis, in 2016. Excluding certain items1, net income would have been $679 million, or $7.56 per share on a diluted basis, in 2017 compared with net income of $610 million, or $6.63 per share on a diluted basis, in 2016. In 2017, changes in foreign currencies had positive impacts on growth of approximately $142 million, or 1 percent on sales, and $.07, or 1 percent, on earnings per share on a diluted basis compared to 2016.
“The investments we made to scale our business paid dividends in the fourth quarter. Operating income, excluding certain items1, grew 21 percent compared to 18 percent sales growth, and cash flow from operations was $123 million despite continued investment in working capital,” said Chris Stansbury, senior vice president and chief financial officer. “In the fourth quarter we reduced net leverage for the second quarter in a row, and we returned approximately $25 million to shareholders through our stock repurchase program. In 2017 we returned approximately $161 million to shareholders through our stock repurchase program. We had approximately $359 million of remaining authorization under our share repurchase programs at the end of the year.”







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

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GUIDANCE
“As we look to the first quarter, we believe that total sales will be between $6.4 billion and $6.8 billion, with global components sales between $4.7 billion and $4.9 billion, and global enterprise computing solutions sales between $1.7 billion and $1.9 billion. As a result of this outlook, we expect earnings per share on a diluted basis, to be in the range of $1.50 to $1.62, and earnings per share on a diluted basis, excluding any charges, to be in the range of $1.74 to $1.86 per share. Our guidance assumes an average tax rate in the range of 23.5 to 25.5 percent, down from our prior range of 27 to 29 percent due to U.S. tax legislation, and average diluted shares outstanding are expected to be 89 million. Our guidance assumes an increase in non-cash depreciation expense of $6 million related to the go-live on our Americas ERP system. We are expecting the average USD-to-Euro exchange rate for the first quarter to be approximately $1.22 to €1,” said Mr. Stansbury.
Please refer to the CFO commentary, which can be found at investor.arrow.com, as a supplement to the company’s earnings release.
Arrow Electronics (www.arrow.com) is a global provider of products, services and solutions to industrial and commercial users of electronic components and enterprise computing solutions. Arrow serves as a supply channel partner for more than 150,000 original equipment manufacturers, value-added resellers, contract manufacturers, and commercial customers through a global network. The company maintains over 300 sales facilities and 45 distribution and value-added centers, serving over 80 countries.
Information Relating to Forward-Looking Statements
This press release includes forward-looking statements that are subject to numerous assumptions, risks, and uncertainties, which could cause actual results or facts to differ materially from such statements for a variety of reasons, including, but not limited to: industry conditions, the company's implementation of its new enterprise resource planning system, changes in product supply, pricing and customer demand, competition, other vagaries in the global components and global enterprise computing solutions markets, changes in relationships with key suppliers, increased profit margin pressure, the effects of additional actions taken to become more efficient or lower costs, risks related to the integration of acquired businesses, changes in legal and regulatory matters, and the company’s ability to generate additional cash flow. Forward-looking statements are those statements which are not statements of historical fact. These forward-looking statements can be identified by forward-looking words such as "expects," "anticipates," "intends," "plans," "may," "will," "believes," "seeks," "estimates," and similar expressions. Shareholders and other readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. The company undertakes no obligation to update publicly or revise any of the forward-looking statements.
For a further discussion of factors to consider in connection with these forward-looking statements, investors should refer to Item 1A Risk Factors of the company’s Annual Report on Form 10-K for the year ended Dec. 31, 2017.
Certain Non-GAAP Financial Information
In addition to disclosing financial results that are determined in accordance with accounting principles generally accepted in the United States (“GAAP”), the company also provides certain non-GAAP financial information relating to sales, operating income, net income attributable to shareholders, and net income per basic and diluted share. The company provides sales on a non-GAAP basis adjusted for the impact of changes in foreign currencies and the impact of acquisitions by adjusting the company's operating results for businesses acquired, including the amortization expense related to acquired intangible assets, as if the acquisitions had occurred at the beginning of the earliest period presented (referred to as "impact of acquisitions"). Operating income, net income attributable to shareholders, and net income per basic and diluted share are adjusted for certain charges, credits, gains, and losses that the company believes impact the comparability of its results of operations. These charges, credits, gains, and losses arise out of the company’s efficiency enhancement initiatives, acquisitions (including intangible assets amortization expense), loss on extinguishment of debt, impairment of assets held for sale, (gain)/loss on investments, and impact of tax reform. A reconciliation of the company’s non-GAAP financial information to GAAP is set forth in the tables below.
The company believes that such non-GAAP financial information is useful to investors to assist in assessing and understanding the company’s operating performance and underlying trends in the company’s business because management considers these items referred to above to be outside the company’s core operating results. This non-GAAP financial information is among the primary indicators management uses as a basis for evaluating the company’s financial and operating performance. In addition, the company’s Board of Directors may use this non-GAAP financial information in evaluating management performance and setting management compensation.
The presentation of this additional non-GAAP financial information is not meant to be considered in isolation or as a substitute for, or alternative to, sales, operating income, net income and net income per basic and diluted share determined in accordance with GAAP. Analysis of results and outlook on a non-GAAP basis should be used as a complement to, and in conjunction with, data presented in accordance with GAAP.

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ARROW ELECTRONICS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except per share data)
 
 
 
 
 
 
Quarter Ended
 
Year Ended
 
December 31, 2017
 
December 31, 2016
 
December 31, 2017
 
December 31, 2016
 
(Unaudited)
 
(Unaudited)
 
 
 
 
Sales
$
7,633,870

 
$
6,442,891

 
$
26,812,508

 
$
23,825,261

Cost of sales
6,703,742

 
5,619,543

 
23,455,169

 
20,681,062

Gross profit
930,128

 
823,348

 
3,357,339

 
3,144,199

Operating expenses:
 
 
 
 
 
 
 
Selling, general, and administrative expenses
562,234

 
518,329

 
2,162,996

 
2,052,863

Depreciation and amortization
40,503

 
37,679

 
153,599

 
159,195

Impairment of assets held for sale
21,000

 
—

 
21,000

 
—

Restructuring, integration, and other charges
35,477

 
12,441

 
91,294

 
73,602

 
659,214

 
568,449

 
2,428,889

 
2,285,660

Operating income
270,914

 
254,899

 
928,450

 
858,539

Equity in earnings of affiliated companies
559

 
2,179

 
3,424

 
7,573

(Gain) loss on investment, net

(19
)
 
—

 
14,231

 
—

Loss on extinguishment of debt
—

 
—

 
59,545

 
—

Interest and other financing expense, net
43,631

 
38,887

 
163,810

 
150,715

Income before income taxes
227,861

 
218,191

 
694,288

 
715,397

Provision for income taxes
172,128

 
53,233

 
287,126

 
190,674

Consolidated net income
55,733

 
164,958

 
407,162

 
524,723

Noncontrolling interests
1,848

 
440

 
5,200

 
1,973

Net income attributable to shareholders
$
53,885

 
$
164,518

 
$
401,962

 
$
522,750

 
 
 
 
 
 
 
 
Net income per share:
 
 
 
 
 
 

Basic
0.61

 
1.84

 
4.53

 
5.75

Diluted
0.60

 
1.81

 
4.48

 
5.68

 
 
 
 
 
 
 
 
Weighted average shares outstanding:

 

 

 

Basic
88,120

 
89,596

 
88,681

 
90,960

Diluted
89,278

 
90,692

 
89,766

 
92,033


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ARROW ELECTRONICS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands except par value)
 
 
 
 
 
December 31, 2017
 
December 31, 2016
 
 
 
 
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
730,083

 
$
534,320

Accounts receivable, net
8,171,092

 
6,746,687

Inventories, net
3,302,518

 
2,855,645

Other current assets
214,066

 
180,069

Total current assets
12,417,759

 
10,316,721

Property, plant, and equipment, at cost:
 
 
 
Land
12,866

 
23,456

Buildings and improvements
160,664

 
175,141

Machinery and equipment
1,330,730

 
1,297,657

 
1,504,260

 
1,496,254

Less: Accumulated depreciation and amortization
(665,785
)
 
(739,955
)
Property, plant, and equipment, net
838,475

 
756,299

Investments in affiliated companies
88,347

 
88,401

Intangible assets, net
286,215

 
336,882

Goodwill
2,470,047

 
2,392,220

Other assets
361,966

 
315,843

Total assets
$
16,462,809

 
$
14,206,366

LIABILITIES AND EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
6,756,830

 
$
5,774,151

Accrued expenses
842,933

 
821,244

Short-term borrowings, including current portion of long-term debt
356,806

 
93,827

Total current liabilities
7,956,569

 
6,689,222

Long-term debt
2,933,045

 
2,696,334

Other liabilities
572,971

 
355,190

Equity:
 
 
 
Shareholders' equity:
 
 
 
Common stock, par value $1:
 
 
 
Authorized – 160,000 shares in both 2017 and 2016
 
 
 
Issued – 125,424 shares in both 2017 and 2016
125,424

 
125,424

Capital in excess of par value
1,114,167

 
1,112,114

Treasury stock (37,733 and 36,511 shares in 2017 and 2016, respectively), at cost
(1,762,239
)
 
(1,637,476
)
Retained earnings
5,599,192

 
5,197,230

Accumulated other comprehensive loss
(125,005
)
 
(383,854
)
Total shareholders' equity
4,951,539

 
4,413,438

Noncontrolling interests
48,685

 
52,182

Total equity
5,000,224

 
4,465,620

Total liabilities and equity
$
16,462,809

 
$
14,206,366


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ARROW ELECTRONICS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
 
 
 
Quarter Ended
 
December 31, 2017
 
December 31, 2016
Cash flows from operating activities:
 
 
 
Consolidated net income
$
55,733

 
$
164,958

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

 

Depreciation and amortization
40,503

 
37,679

Amortization of stock-based compensation
8,821

 
10,042

Equity in earnings of affiliated companies
(559
)
 
(2,179
)
Deferred income taxes
25,150

 
(2,061
)
Gain on investment
(19
)
 
—

Impairment of assets held for sale
21,000

 
—

Impairment of property, plant and equipment
4,761

 
—

Other
(1,711
)
 
1,508

Change in assets and liabilities, net of effects of acquired businesses:
 
 
 
Accounts receivable
(1,063,514
)
 
(972,399
)
Inventories
(124,015
)
 
(286,306
)
Accounts payable
930,406

 
1,095,530

Accrued expenses
37,972

 
149,935

Other assets and liabilities
188,250

 
22,260

Net cash provided by operating activities
122,778

 
218,967

 
 
 
 
Cash flows from investing activities:
 
 
 
Cash consideration paid for acquired businesses
—

 
4,195

Acquisition of property, plant, and equipment
(54,352
)
 
(38,354
)
Other
(3,147
)
 
—

Net cash used for investing activities
(57,499
)
 
(34,159
)
 
 
 
 
Cash flows from financing activities:
 
 
 
Change in short-term and other borrowings
(26,893
)
 
16,743

Proceeds from (repayment of) long-term bank borrowings, net
130,526

 
(7,000
)
Payments on note offering
(941
)
 
—

Redemption of notes
(3,001
)
 
—

Proceeds from exercise of stock options
772

 
2,281

Repurchases of common stock
(25,114
)
 
(49,268
)
Other
—

 
993

Net cash provided by (used for) financing activities
75,349

 
(36,251
)
Effect of exchange rate changes on cash
5,116

 
1,348

Net increase in cash and cash equivalents
145,744

 
149,905

Cash and cash equivalents at beginning of period
584,339

 
384,415

Cash and cash equivalents at end of period
$
730,083

 
$
534,320


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ARROW ELECTRONICS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
 
 
Year Ended
 
December 31, 2017
 
December 31, 2016
Cash flows from operating activities:
 
 
 
Consolidated net income
$
407,162

 
$
524,723

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

 

Depreciation and amortization
153,599

 
159,195

Amortization of stock-based compensation
39,122

 
39,825

Equity in earnings of affiliated companies
(3,424
)
 
(7,573
)
Loss on extinguishment of debt
59,545

 
—

Deferred income taxes
38,412

 
28,130

Loss on investment, net
14,231

 
—

Impairment of assets held for sale
21,000

 
—

Impairment of property, plant and equipment
4,761

 
—

Other
5,704

 
5,972

Change in assets and liabilities, net of effects of acquired businesses:
 
 
 
Accounts receivable
(1,122,598
)
 
(636,944
)
Inventories
(379,835
)
 
(403,980
)
Accounts payable
816,602

 
582,165

Accrued expenses
(3,838
)
 
47,020

Other assets and liabilities
74,114

 
21,139

Net cash provided by operating activities
124,557

 
359,672

 
 
 
 
Cash flows from investing activities:
 
 
 
Cash consideration paid for acquired businesses
(3,628
)
 
(64,751
)
Acquisition of property, plant, and equipment
(203,949
)
 
(164,695
)
Proceeds from sale of property, plant and equipment
24,433

 
—

Other
(5,614
)
 
(12,000
)
Net cash used for investing activities
(188,758
)
 
(241,446
)
 
 
 
 
Cash flows from financing activities:
 
 

Change in short-term and other borrowings
(41,316
)
 
48,684

Proceeds from long-term bank borrowings, net
47,760

 
313,000

Proceeds from note offering, net
986,203

 
—

Redemption of notes
(558,887
)
 
—

Proceeds from exercise of stock options
22,195

 
18,967

Repurchases of common stock
(174,239
)
 
(216,446
)
Purchase of shares from noncontrolling interest
(23,350
)
 
—

Other
(1,620
)
 
(2,007
)
Net cash provided by financing activities
256,746

 
162,198

Effect of exchange rate changes on cash
3,218

 
(19,194
)
Net increase in cash and cash equivalents
195,763

 
261,230

Cash and cash equivalents at beginning of period
534,320

 
273,090

Cash and cash equivalents at end of period
$
730,083

 
$
534,320


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ARROW ELECTRONICS, INC.
NON-GAAP SALES RECONCILIATION
(In thousands)
(Unaudited)
 
Quarter Ended
 
 
 
December 31, 2017
 
December 31, 2016
 
% Change
 
 
 
 
 
 
Consolidated sales, as reported
$
7,633,870

 
$
6,442,891

 
18.5
%
Impact of changes in foreign currencies
—

 
189,723

 
 
Impact of acquisitions
—

 
—

 
 
Consolidated sales, as adjusted
$
7,633,870

 
$
6,632,614

 
15.1
%
 
 
 
 
 
 
Global components sales, as reported
$
4,944,942

 
$
3,995,491

 
23.8
%
Impact of changes in foreign currencies
—

 
100,057

 
 
Impact of acquisitions
—

 
—

 
 
Global components sales, as adjusted
$
4,944,942

 
$
4,095,548

 
20.7
%
 
 
 
 
 
 
Europe components sales, as reported
$
1,296,143

 
$
963,349

 
34.5
%
Impact of changes in foreign currencies
—

 
84,946

 
 
Impact of acquisitions
—

 
—

 
 
Europe components sales, as adjusted
$
1,296,143

 
$
1,048,295

 
23.6
%
 
 
 
 
 
 
Asia components sales, as reported
$
1,718,973

 
$
1,487,816

 
15.5
%
Impact of changes in foreign currencies
—

 
14,655

 
 
Impact of acquisitions
—

 
—

 
 
Asia components sales, as adjusted
$
1,718,973

 
$
1,502,471

 
14.4
%
 
 
 
 
 
 
Global ECS sales, as reported
$
2,688,928

 
$
2,447,400

 
9.9
%
Impact of changes in foreign currencies
—

 
89,666

 
 
Impact of acquisitions
—

 
—

 
 
Global ECS sales, as adjusted
$
2,688,928

 
$
2,537,066

 
6.0
%
 
 
 
 
 
 
Europe ECS sales, as reported
$
970,875

 
$
818,363

 
18.6
%
Impact of changes in foreign currencies
—

 
81,665

 
 
Impact of acquisitions
—

 
—

 
 
Europe ECS sales, as adjusted
$
970,875

 
$
900,028

 
7.9
%
 
 
 
 
 
 
Americas ECS sales, as reported
$
1,718,053

 
$
1,629,037

 
5.5
%
Impact of changes in foreign currencies
—

 
8,001

 
 
Impact of acquisitions
—

 
—

 
 
Americas ECS sales, as adjusted
$
1,718,053

 
$
1,637,038

 
4.9
%

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ARROW ELECTRONICS, INC.
NON-GAAP SALES RECONCILIATION
(In thousands)
(Unaudited)
 
 
 
 
 
Year Ended
 
 
 
December 31, 2017
 
December 31, 2016
 
% Change
 
 
 
 
 
 
Consolidated sales, as reported
$
26,812,508

 
$
23,825,261

 
12.5
 %
Impact of changes in foreign currencies
—

 
142,485

 
 
Impact of acquisitions
—

 
48,148

 
 
Consolidated sales, as adjusted
$
26,812,508

 
$
24,015,894

 
11.6
 %
 
 
 
 
 
 
Global components sales, as reported
$
18,330,456

 
$
15,408,839

 
19.0
 %
Impact of changes in foreign currencies
—

 
86,902

 
 
Impact of acquisitions
—

 
9,711

 
 
Global components sales, as adjusted
$
18,330,456

 
$
15,505,452

 
18.2
 %
 
 
 
 
 
 
Europe components sales, as reported
$
4,868,862

 
$
4,086,607

 
19.1
 %
Impact of changes in foreign currencies
—

 
55,710

 
 
Impact of acquisitions
—

 
—

 
 
Europe components sales, as adjusted
$
4,868,862

 
$
4,142,317

 
17.5
 %
 
 
 
 
 
 
Asia components sales, as reported
$
6,451,209

 
$
5,400,429

 
19.5
 %
Impact of changes in foreign currencies
—

 
28,755

 
 
Impact of acquisitions
—

 
—

 
 
Asia components sales, as adjusted
$
6,451,209

 
$
5,429,184

 
18.8
 %
 
 
 
 
 
 
Global ECS sales, as reported
$
8,482,052

 
$
8,416,422

 
0.8
 %
Impact of changes in foreign currencies
—

 
55,583

 
 
Impact of acquisitions
—

 
38,437

 
 
Global ECS sales, as adjusted
$
8,482,052

 
$
8,510,442

 
(0.3
)%
 
 
 
 
 
 
Europe ECS sales, as reported
$
2,804,486

 
$
2,686,078

 
4.4
 %
Impact of changes in foreign currencies
—

 
37,373

 
 
Impact of acquisitions
—

 
—

 
 
Europe ECS sales, as adjusted
$
2,804,486

 
$
2,723,451

 
3.0
 %
 
 
 
 
 
 
Americas ECS sales, as reported
$
5,677,566

 
$
5,730,344

 
(0.9
)%
Impact of changes in foreign currencies
—

 
18,210

 
 
Impact of acquisitions
—

 
38,437

 
 
Americas ECS sales, as adjusted
$
5,677,566

 
$
5,786,991

 
(1.9
)%

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ARROW ELECTRONICS, INC.
NON-GAAP EARNINGS RECONCILIATION
(In thousands except per share data)
(Unaudited)
 
Three months ended December 31, 2017

Reported
GAAP
measure
 
Intangible
amortization
expense
 
Restructuring
& Integration
charges
 
Impact of the Tax Act
 
Other*
 
Non-GAAP
measure
Operating income
$
270,914

 
12,162

 
$
35,477

 
$
—

 
21,000

 
$
339,553

Income before income taxes
227,861

 
12,162

 
35,477

 
—

 
20,981

 
296,481

Provision for income taxes
172,128

 
4,321

 
10,954

 
(124,748
)
 
8,112

 
70,767

Consolidated net income
55,733

 
7,841

 
24,523

 
124,748

 
12,869

 
225,714

Noncontrolling interests
1,848

 
147

 
—

 
—

 
—

 
1,995

Net income attributable to shareholders
$
53,885

 
$
7,694

 
$
24,523

 
$
124,748

 
$
12,869

 
$
223,719

Net income per diluted share**
$
0.60

 
$
0.09

 
$
0.27

 
$
1.40

 
$
0.14

 
$
2.51

Effective tax rate
75.5
%
 

 

 
 
 

 
23.9
%
 
 
 
 
 
 
 
 
 
 
 
 
Three months ended December 31, 2016

Reported
GAAP
measure
 
Intangible
amortization
expense
 
Restructuring
& Integration
charges
 
Impact of the Tax Act
 
Other
 
Non-GAAP
measure
Operating income
$
254,899

 
13,634

 
$
12,441

 
$
—

 
—

 
$
280,974

Income before income taxes
218,191

 
13,634

 
12,441

 
—

 
—

 
244,266

Provision for income taxes
53,233

 
4,870

 
3,733

 
—

 
—

 
61,836

Consolidated net income
164,958

 
8,764

 
8,708

 
—

 
—

 
182,430

Noncontrolling interests
440

 
336

 
—

 
—

 
—

 
776

Net income attributable to shareholders
$
164,518

 
$
8,428

 
$
8,708

 
$
—

 
$
—

 
$
181,654

Net income per diluted share
$
1.81

 
$
0.09

 
$
0.10

 
$
—

 
$
—

 
$
2.00

Effective tax rate
24.4
%
 

 

 
 
 

 
25.3
%
 
 
 
 
 
 
 
 
 
 
 
 
Year Ended December 31, 2017

Reported
GAAP
measure
 
Intangible
amortization
expense
 
Restructuring
& Integration
charges
 
Impact of the Tax Act
 
Other*
 
Non-GAAP
measure
Operating income
$
928,450

 
$
50,071

 
$
91,294

 
$
—

 
$
21,000

 
$
1,090,815

Income before income taxes
694,288

 
50,071

 
91,294

 
—

 
94,776

 
930,429

Provision for income taxes
287,126

 
17,744

 
28,846

 
(124,748
)
 
36,578

 
245,546

Consolidated net income
407,162

 
32,327

 
62,448

 
124,748

 
58,198

 
684,883

Noncontrolling interests
5,200

 
701

 
—

 
—

 
—

 
5,901

Net income attributable to shareholders
$
401,962

 
$
31,626

 
$
62,448

 
$
124,748

 
$
58,198

 
$
678,982

Net income per diluted share**
$
4.48

 
$
0.35

 
$
0.70

 
$
1.39

 
$
0.65

 
$
7.56

Effective tax rate
41.4
%
 

 

 
 
 

 
26.4
%
 
 
 
 
 
 
 
 
 
 
 
 
Year Ended December 31, 2016

Reported
GAAP
measure
 
Intangible
amortization
expense
 
Restructuring
& Integration
charges
 
Impact of the Tax Act
 
Other
 
Non-GAAP
measure
Operating income
$
858,539

 
54,886

 
$
73,602

 
$
—

 
—

 
$
987,027

Income before income taxes
715,397

 
54,886

 
73,602

 
—

 
—

 
843,885

Provision for income taxes
190,674

 
17,226

 
22,977

 
—

 
—

 
230,877

Consolidated net income
524,723

 
37,660

 
50,625

 
—

 
—

 
613,008

Noncontrolling interests
1,973

 
1,275

 
—

 
—

 
—

 
3,248

Net income attributable to shareholders
$
522,750

 
$
36,385

 
$
50,625

 
$
—

 
$
—

 
$
609,760

Net income per diluted share
$
5.68

 
$
0.40

 
$
0.55

 
$
—

 
$
—

 
$
6.63

Effective tax rate
26.7
%
 

 

 
 
 

 
27.4
%
 
 
 
 
 
 
 
 
 
 
 
 
*Other includes gain/loss on investments, impairment of assets held for sale, 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.

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ARROW ELECTRONICS, INC.
SEGMENT INFORMATION
(In thousands)
(Unaudited)
 
 
 
 
 
Quarter Ended
 
Year Ended
 
December 31, 2017
 
December 31, 2016
 
December 31, 2017
 
December 31, 2016
Sales:
 
 
 
 
 
 
 
Global components
$
4,944,942

 
$
3,995,491

 
$
18,330,456

 
$
15,408,839

Global ECS
2,688,928

 
2,447,400

 
8,482,052

 
8,416,422

Consolidated
$
7,633,870

 
$
6,442,891

 
$
26,812,508

 
$
23,825,261

Operating income (loss):

 

 

 

Global components
$
217,337

 
$
161,804

 
$
801,027

 
$
686,466

Global ECS
162,702

 
158,011

 
445,081

 
441,803

Corporate (a)
(109,125
)
 
(64,916
)
 
(317,658
)
 
(269,730
)
Consolidated
$
270,914

 
$
254,899

 
$
928,450

 
$
858,539


(a)
Includes restructuring, integration, and other charges of $36.1 million and $91.3 million for the fourth quarter and year ended December 31, 2017 and $12.4 million and $73.6 million for the fourth quarter and year ended December 31, 2016, respectively.

NON-GAAP SEGMENT RECONCILIATION
 
 
 
 
 
Quarter Ended
 
Year Ended
 
December 31, 2017

December 31, 2016
 
December 31, 2017
 
December 31, 2016
Global components operating income, as reported
$
217,337

 
$
161,804

 
$
801,027

 
$
686,466

Intangible assets amortization expense
6,515

 
7,497

 
27,725

 
31,621

Global components operating income, as adjusted
$
223,852

 
$
169,301

 
$
828,752

 
$
718,087

Global ECS operating income, as reported
$
162,702

 
$
158,011

 
$
445,081

 
$
441,803

Intangible assets amortization expense
5,647

 
6,137

 
22,346

 
23,265

Global ECS operating income, as adjusted
$
168,349

 
$
164,148

 
$
467,427

 
$
465,068






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




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


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