ARROW ELECTRONICS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

(Unaudited)

Quarter Ended Nine Months Ended
September 30,
2017 October 1,
2016 September 30,
2017 October 1,
2016
Consolidated net income $ 135,475
$ 117,835
$ 351,429
$ 359,765
Other comprehensive income:
Foreign currency translation adjustment and other 54,951
16,336
225,431
38,005
Unrealized gain (loss) on investment securities, net 1,357
1,273
4,639
(2,408 )
Unrealized gain (loss) on interest rate swaps designated as cash flow hedges, net (2,093 ) 94
(2,543 ) 278
Employee benefit plan items, net 492
814
1,403
5,578
Other comprehensive income 54,707
18,517
228,930
41,453
Comprehensive income 190,182
136,352
580,359
401,218
Less: Comprehensive income attributable to noncontrolling interests 2,049
576
7,743
2,791
Comprehensive income attributable to shareholders $ 188,133
$ 135,776
$ 572,616
$ 398,427


	Quarter Ended
	April 1, 2023		April 2, 2022
Consolidated net income	$	275,325	$	365,996
Other comprehensive income (loss):

Foreign currency translation adjustment and other, net of taxes	11,285		(49,910)
Unrealized loss on foreign exchange contracts designated as net investment hedges, net of taxes	(433)		(575)
Unrealized gain (loss) on interest rate swaps designated as cash flow hedges, net of taxes	(3,709)		8,205
Employee benefit plan items, net of taxes	(272)		99
Other comprehensive income (loss)	6,871		(42,181)
Comprehensive income	282,196		323,815
Less: Comprehensive income attributable to noncontrolling interests	4,652		378
Comprehensive income attributable to shareholders	$	277,544	$	323,437

See accompanying notes.

Index

ARROW ELECTRONICS, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands except par value)

(Unaudited)


	September 30, 2017			December 31, 2016
	(Unaudited)							April 1, 2023		December 31, 2022
ASSETS							ASSETS
Current assets:							Current assets:
Cash and cash equivalents	$	584,339		$	534,320		Cash and cash equivalents	$	205,554	$	176,915
Accounts receivable, net	7,070,629			6,746,687			Accounts receivable, net	10,655,863		12,322,717
Inventories	3,168,769			2,855,645			Inventories	5,525,782		5,319,369
Other current assets	215,431			180,069			Other current assets	479,650		521,339
Total current assets	11,039,168			10,316,721			Total current assets	16,866,849		18,340,340
Property, plant, and equipment, at cost:							Property, plant, and equipment, at cost:
Land	12,852			23,456			Land	5,691		5,691
Buildings and improvements	158,865			175,141			Buildings and improvements	185,790		184,211
Machinery and equipment	1,306,891			1,297,657			Machinery and equipment	1,602,073		1,583,661
	1,478,608			1,496,254				1,793,554		1,773,563
Less: Accumulated depreciation and amortization	(663,229		)	(739,955		)	Less: Accumulated depreciation and amortization	(1,214,103)		(1,177,107)
Property, plant, and equipment, net	815,379			756,299			Property, plant, and equipment, net	579,451		596,456
Investments in affiliated companies	86,626			88,401			Investments in affiliated companies	59,682		65,112
Intangible assets, net	307,385			336,882			Intangible assets, net	151,221		159,137
Goodwill	2,470,576			2,392,220			Goodwill	2,036,077		2,027,626
Other assets	337,832			315,843			Other assets	583,252		574,511
Total assets	$	15,056,966		$	14,206,366		Total assets	$	20,276,532	$	21,763,182
LIABILITIES AND EQUITY							LIABILITIES AND EQUITY
Current liabilities:							Current liabilities:
Accounts payable	$	5,799,723		$	5,774,151		Accounts payable	$	8,976,296	$	10,460,419
Accrued expenses	799,066			821,244			Accrued expenses	1,269,536		1,339,302
Short-term borrowings, including current portion of long-term debt	380,208			93,827			Short-term borrowings, including current portion of long-term debt	144,264		589,883
Total current liabilities	6,978,997			6,689,222			Total current liabilities	10,390,096		12,389,604
Long-term debt	2,802,960			2,696,334			Long-term debt	3,719,056		3,182,964
Other liabilities	349,717			355,190			Other liabilities	567,200		579,261
Commitments and contingencies (Note L)

Equity:							Equity:
Shareholders' equity:
Shareholders’ equity:							Shareholders’ equity:
Common stock, par value $1:							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
Authorized - 160,000 shares in both 2023 and 2022							Authorized - 160,000 shares in both 2023 and 2022
Issued - 125,424 shares in both 2023 and 2022							Issued - 125,424 shares in both 2023 and 2022	125,424		125,424
Capital in excess of par value	1,107,125			1,112,114			Capital in excess of par value	1,203,134		1,208,708
Treasury stock (37,463 and 36,511 shares in 2017 and 2016, respectively), at cost	(1,739,473		)	(1,637,476		)
Treasury stock (68,426 and 66,175 shares in 2023 and 2022, respectively), at cost							Treasury stock (68,426 and 66,175 shares in 2023 and 2022, respectively), at cost	(4,925,140)		(4,637,345)
Retained earnings	5,545,307			5,197,230			Retained earnings	9,488,582		9,214,832
Accumulated other comprehensive loss	(159,315		)	(383,854		)	Accumulated other comprehensive loss	(361,468)		(365,262)
Total shareholders' equity	4,879,068			4,413,438
Total shareholders’ equity							Total shareholders’ equity	5,530,532		5,546,357
Noncontrolling interests	46,224			52,182			Noncontrolling interests	69,648		64,996
Total equity	4,925,292			4,465,620			Total equity	5,600,180		5,611,353
Total liabilities and equity	$	15,056,966		$	14,206,366		Total liabilities and equity	$	20,276,532	$	21,763,182

See accompanying notes.

Index

ARROW ELECTRONICS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)


	Quarter Ended
	April 1, 2023		April 2, 2022
Cash flows from operating activities:
Consolidated net income	$	275,325	$	365,996
Adjustments to reconcile consolidated net income to net cash provided by (used for) operations:
Depreciation and amortization	46,679		48,305
Amortization of stock-based compensation	19,497		17,351
Equity in (earnings) losses of affiliated companies	80		(843)
Deferred income taxes	(7,530)		1,352




Gain on investments, net	(10,311)		(2,011)
Other	1,321		686
Change in assets and liabilities:
Accounts receivable, net	1,701,889		430,710
Inventories	(199,521)		(460,902)
Accounts payable	(1,504,701)		(477,825)
Accrued expenses	(132,316)		(43,641)
Other assets and liabilities	33,392		(79,426)
Net cash provided by (used for) operating activities	223,804		(200,248)
Cash flows from investing activities:
Acquisition of property, plant, and equipment	(20,114)		(19,270)

Proceeds from collections of notes receivable	142		20,169
Proceeds from settlement of net investment hedge	10,725		—

Net cash provided by (used for) investing activities	(9,247)		899
Cash flows from financing activities:
Change in short-term and other borrowings	(146,050)		(14,293)
Proceeds from long-term bank borrowings, net	34,360		845,000
Net proceeds from note offering	498,600		—
Redemption of notes	(300,000)		(350,000)
Proceeds from exercise of stock options	5,934		11,302
Repurchases of common stock	(303,801)		(264,431)


Net cash provided by (used for) financing activities	(210,957)		227,578
Effect of exchange rate changes on cash	25,039		(7,632)
Net increase in cash and cash equivalents	28,639		20,597
Cash and cash equivalents at beginning of period	176,915		222,194
Cash and cash equivalents at end of period	$	205,554	$	242,791

Nine Months Ended
September 30,
2017 October 1,
2016
Cash flows from operating activities:
Consolidated net income $ 351,429

$ 359,765
Adjustments to reconcile consolidated net income to net cash provided by operations:

Depreciation and amortization 113,096

121,516
Amortization of stock-based compensation 30,301

29,783
Equity in earnings of affiliated companies (2,865 )
(5,394 )
Loss on extinguishment of debt 59,545

—
Deferred income taxes 13,262

30,191
Loss on investments, net 14,250
—
Other 7,415

4,464
Change in assets and liabilities, net of effects of acquired businesses:

Accounts receivable (59,084 )
335,455
Inventories (255,820 )
(117,674 )
Accounts payable (113,804 )
(513,365 )
Accrued expenses (41,810 )
(102,915 )
Other assets and liabilities (114,136 )
(1,121 )
Net cash provided by operating activities 1,779

140,705
Cash flows from investing activities:
Cash consideration paid for acquired businesses (3,628 )
(68,946 )
Acquisition of property, plant, and equipment (149,597 )
(126,341 )
Proceeds from sale of property, plant, and equipment 24,433

—
Other (2,467 )
(12,000 )
Net cash used for investing activities (131,259 )
(207,287 )
Cash flows from financing activities:
Change in short-term and other borrowings (14,423 )
31,941
Proceeds from (repayments of) long-term bank borrowings, net (82,766 )
320,000
Proceeds from note offerings, net 987,144

—
Redemption of notes (555,886 )
—
Proceeds from exercise of stock options 21,423

16,686
Repurchases of common stock (149,125 )
(167,178 )
Purchase of shares from noncontrolling interest (23,350 )
—
Other (1,620 )
(3,000 )
Net cash provided by financing activities 181,397

198,449
Effect of exchange rate changes on cash (1,898 )
(20,542 )
Net increase in cash and cash equivalents 50,019

111,325
Cash and cash equivalents at beginning of period 534,320

273,090
Cash and cash equivalents at end of period $ 584,339

$ 384,415

See accompanying notes.

Index

ARROW ELECTRONICS, INC.

CONSOLIDATED STATEMENTS OF EQUITY

(In thousands)

(Unaudited)


	Common Stock at Par Value		Capital in Excess of Par Value		Treasury Stock		Retained Earnings		Accumulated Other Comprehensive Loss		Noncontrolling Interests		Total
Balance at December 31, 2022	$	125,424	$	1,208,708	$	(4,637,345)	$	9,214,832	$	(365,262)	$	64,996	$	5,611,353
Consolidated net income	—		—		—		273,750		—		1,575		275,325
Other comprehensive income	—		—		—		—		3,794		3,077		6,871
Amortization of stock-based compensation	—		19,497		—		—		—		—		19,497
Shares issued for stock-based compensation awards	—		(25,071)		31,005		—		—		—		5,934
Repurchases of common stock	—		—		(318,800)		—		—		—		(318,800)

Balance at April 1, 2023	$	125,424	$	1,203,134	$	(4,925,140)	$	9,488,582	$	(361,468)	$	69,648	$	5,600,180


	Common Stock at Par Value		Capital in Excess of Par Value		Treasury Stock		Retained Earnings		Accumulated Other Comprehensive Loss		Noncontrolling Interests		Total
Balance at December 31, 2021	$	125,424	$	1,189,845	$	(3,629,265)	$	7,787,948	$	(191,657)	$	58,551	$	5,340,846

Consolidated net income	—		—		—		364,749		—		1,247		365,996
Other comprehensive loss	—		—		—		—		(41,312)		(869)		(42,181)
Amortization of stock-based compensation	—		17,351		—		—		—		—		17,351
Shares issued for stock-based compensation awards	—		(20,601)		31,903		—		—		—		11,302
Repurchases of common stock	—		—		(264,431)		—		—		—		(264,431)

Balance at April 2, 2022	$	125,424	$	1,186,595	$	(3,861,793)	$	8,152,697	$	(232,969)	$	58,929	$	5,428,883

See accompanying notes.

Index

ARROW ELECTRONICS, INC.

NOTES TO CONSOLIDATED FINANCIALSTATEMENTS

~~(Dollars in thousands except per share data)~~

(Unaudited)

Note A – Basis of Presentation

The accompanying consolidated financial statements of Arrow Electronics, Inc. (the "company") were prepared in accordance with accounting principles generally accepted in the United States ("GAAP") and reflect all adjustments of a normal recurring nature, which are, in the opinion of management, necessary for a fair presentation of the consolidated financial position and results of operations at, and for the periods presented. The consolidated results of operations for the interim periods are not necessarily indicative of results for the full year.

These consolidated financial statements do not include all of the information or notes necessary for a complete presentation and, accordingly, should be read in conjunction with the ~~company's~~company’s audited consolidated financial statements and accompanying notes for the year ended December 31, ~~2016,~~2022, as filed in the ~~company's~~company’s Annual Report on Form 10-K.

Quarter End

The company operates on a quarterly calendar that closes on the Saturday closest to the end of the calendar ~~quarter.~~quarter, except for the fourth quarter, which closes on December 31, 2023.

~~Reclassification~~

~~Certain prior period amounts were reclassified to conform to the current period presentation. These reclassifications did not have a material impact on previously reported amounts.~~

Note B – Impact of Recently Issued Accounting Standards

In ~~August 2017,~~September 2022, the Financial Accounting Standards Board ~~(“FASB”~~("FASB") issued Accounting Standards Update ("ASU") No. ~~2017-12,~~ ~~Derivatives and Hedging~~ ~~(Topic 815) ("~~2022-04, Liabilities—Supplier Finance Programs (Subtopic 405-50) Disclosure of Supplier Finance Program Obligations ("ASU No. ~~2017-12"~~2022-04"). ASU No. ~~2017-12 simplifies certain aspects of hedge accounting and results~~2022-04 requires that a buyer in a ~~more accurate portrayal~~supplier finance program disclose sufficient information about the program to allow a user of financial statements to understand the ~~economics of an entity’s risk management activities in its financial statements. ASU No. 2017-12 is effective for~~program’s nature, activity during the ~~company in the first quarter of 2019, with early adoption permitted,~~period, and ~~is to be applied on a modified retrospective basis. The company is currently evaluating the~~ potential ~~effects of adopting the provisions of ASU No. 2017-12.~~

~~In May 2017, the FASB issued Accounting Standards Update No. 2017-09,~~ ~~Compensation - Stock Compensation~~ ~~(Topic 718) ("ASU No. 2017-09"). ASU No. 2017-09 clarifies which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718.~~magnitude. Effective ~~April 2, 2017,~~January 1, 2023 the company adopted the provisions of ASU No. ~~2017-09 on a prospective basis. The adoption of the provisions of ASU No. 2017-09 did not materially impact the company's consolidated financial position or results of operations.~~

~~In March 2017, the FASB issued Accounting Standards Update No. 2017-07,~~ ~~Compensation - Retirement Benefits~~ (Topic 715) ("ASU No. 2017-07"). ASU No. 2017-07 requires that the service cost component of pension expense be included in the same line item as other compensation costs arising from services rendered by employees, with the other components of pension expense being classified outside of a subtotal of income from operations. ASU No. 2017-07 is effective for the company in the first quarter of 2018 and is to be applied retrospectively for the presentation requirements and prospectively for the capitalization of the service cost component requirements. The adoption of the provisions of ASU No. 2017-07 is not expected to have a material impact on the company's consolidated financial position or results of operations.

~~In January 2017, the FASB issued Accounting Standards Update No. 2017-04,~~ ~~Intangibles - Goodwill and Other~~ (Topic 350) ("ASU No. 2017-04"). ASU No. 2017-04 eliminates step 2 from the annual goodwill impairment test. Effective January 1, 2017, the company adopted the provisions of ASU No. 2017-04 on a prospective basis. The adoption of the provisions of ASU No. 2017-04 would not materially impact the company's consolidated financial position or results of operations unless step 1 of the annual goodwill impairment test fails.

~~In October 2016, the FASB issued Accounting Standards Update No. 2016-16,~~ ~~Income Taxes - Intra-Entity Transfers of Assets Other Than Inventory~~ (Topic 740) ("ASU No. 2016-16"). ASU No. 2016-16 clarifies the accounting for the current and deferred income taxes for an intra-entity transfer of an asset other than inventory. Effective April 2, 2017, the company adopted the provisions

~~ARROW ELECTRONICS, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Dollars in thousands except per share data)~~

~~(Unaudited)~~

of ASU No. 2016-16 on a modified retrospective basis. The adoption of the provisions of ASU No. 2016-16 did not materially impact the company's consolidated financial position or results of operations.

~~In August 2016, the FASB issued Accounting Standards Update No. 2016-15,~~ ~~Statement of Cash Flows~~ (Topic 230) ("ASU No. 2016-15"). ASU No. 2016-15 addresses how certain cash receipts and cash payments are presented and classified in the statement of cash flows. Effective January 1, 2017, the company adopted the provisions of ASU No. 2016-152022-04 on a retrospective basis. ~~The adoption of the provisions of ASU No. 2016-15 did not materially impact the company's consolidated financial position or results of operations.~~

~~In June 2016, the FASB issued Accounting Standards Update No. 2016-13,~~ ~~Financial Instruments - Credit Losses~~ (Topic 326) ("ASU No. 2016-13"). ASU No. 2016-13 revises the methodology for measuring credit losses on financial instruments and the timing of when such losses are recorded. ASU No. 2016-13 is effective forAs a result, the company ~~in the first quarter of 2020, with early adoption permitted,~~disclosed key terms and isamounts outstanding under its supplier finance programs (refer to ~~be applied using a modified retrospective approach. The company is currently evaluating the potential effects of adopting the provisions of ASU No. 2016-13.~~Note F Supplier Finance Programs).

~~In March 2016, the FASB issued Accounting Standards Update No. 2016-09,~~ ~~Stock Compensation - Improvements to Employee Share-Based Payment Accounting~~ (Topic 718) ("ASU No. 2016-09"). ASU No. 2016-09 revises the accounting treatment for excess tax benefits, minimum statutory tax withholding requirements, and forfeitures related to share-based awards. Effective January 1, 2017, the company adopted the recognition of excess tax benefits and tax deficiencies on a prospective basis and reclassified excess tax benefits in the consolidated statements of cash flows on a retrospective basis. The company elected to continue to estimate forfeitures expected to occur to determine the amount of compensation cost to be recognized in each period. The adoption of the provisions of ASU No. 2016-09 did not materially impact the company's consolidated financial position or results of operations.

~~In February 2016, the FASB issued Accounting Standards Update No. 2016-02,~~ ~~Leases~~ (Topic 842) ("ASU No. 2016-02"). ASU No. 2016-02 requires the entity to recognize the assets and liabilities for the rights and obligations created by leased assets. Leases will be classified as either finance or operating, with classification affecting expense recognition in the income statement. ASU No. 2016-02 is effective for the company in the first quarter of 2019, with early adoption permitted, and is to be applied using a modified retrospective approach. While the company continues to evaluate the effects of adopting the provisions of ASU No. 2016-02, the company expects most existing operating lease commitments will be recognized as operating lease liabilities and right-of-use assets upon adoption.

~~In January 2016, the FASB issued Accounting Standards Update No. 2016-01,~~ ~~Financial Instruments - Recognition and Measurement of Financial Assets and Financial Liabilities~~ (Topic 825) ("ASU No. 2016-01"). ASU No. 2016-01 revises the classification and measurement of investments in certain equity investments and the presentation of certain fair value changes for certain financial liabilities measured at fair value. ASU No. 2016-01 requires the change in fair value of many equity investments to be recognized in net income. ASU No. 2016-01 is effective for the company in the first quarter of 2018, with early adoption permitted, and is to be applied prospectively. The company is currently evaluating the potential effects of adopting the provisions of ASU No. 2016-01.

~~In May 2014, the FASB issued Accounting Standards Update No. 2014-09,~~ ~~Revenue from Contracts with Customers~~ (Topic 606) ("ASU No. 2014-09"). ASU No. 2014-09 supersedes all existing revenue recognition guidance. Under ASU No. 2014-09, an entity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU No. 2014-09 is effective for the company in the first quarter of 2018, with early adoption permitted in the first quarter of 2017. ASU No. 2014-09 allows for either full retrospective or modified retrospective adoption. In March, April, May, and December 2016, the FASB issued ASU No. 2016-08, ~~Revenue from Contracts with Customers: Principal versus Agent Considerations (Reporting Revenue Gross versus Net)~~ ~~("ASU No. 2016-08"); ASU No. 2016-10,~~ ~~Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing~~ ~~("ASU No. 2016-10"); ASU No. 2016-12,~~ ~~Revenue from Contracts with Customers: Narrow-Scope Improvements and Practical Expedients~~ ~~("ASU No. 2016-12"); and ASU No. 2016-19,~~ ~~Technical Corrections and Improvements~~ ("ASU No. 2016-19"), respectively. ASU No. 2016-08, ASU No. 2016-10, ASU No. 2016-12, and ASU No. 2016-19 provide supplemental adoption guidance and clarification to ASU No. 2014-09, and must be adopted concurrently with the adoption of ASU No. 2014-09. The company is currently evaluating the potential effects of adopting the provisions of ASU No. 2014-09, ASU No. 2016-08, ASU No. 2016-10, ASU No. 2016-12, and ASU No. 2016-19.

~~ARROW ELECTRONICS, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Dollars in thousands except per share data)~~

~~(Unaudited)~~

In 2014, the company established an implementation team (“team”) and engaged external advisers to develop a multi-phase plan to assess the company’s business and contracts, as well as any changes to processes or systems to adopt the requirements of the new revenue standard. The team has updated the assessment for new ASU updates and for newly acquired businesses. The team is in the process of finalizing its conclusions on several aspects of the standard including principal versus agent considerations, identification of performance obligations, and the determination of when control of goods and services transfers to the company’s customers. Additionally, the team is in the process of evaluating the impact of the expanded disclosure requirements.

Note C ~~– Acquisitions~~

~~2017 Acquisitions~~

During the first nine months of 2017, the company acquired an additional 11.9% of the noncontrolling interest common shares of Data Modul AG for $23,350, increasing the company's ownership interest in Data Modul to 69.2%. The impact of this acquisition was not material to the company's consolidated financial position or results of operations.

~~2016 Acquisitions~~

During 2016, the company completed three acquisitions for $63,869, net of cash acquired. The impact of these acquisitions was not material to the company's consolidated financial position or results of operations. The pro forma impact of the 2016 acquisitions on the consolidated results of operations of the company for the first nine months of 2016, as though the acquisitions occurred on January 1, 2016, was also not material.

~~Note D~~ – Goodwill and Intangible Assets

Goodwill represents the excess of the cost of an acquisition over the fair value of the net assets acquired. The company tests goodwill and other indefinite-lived intangible assets for impairment annually as of the first day of the fourth quarter, or more frequently if indicators of potential impairment exist.

Goodwill of companies acquired, allocated to the ~~company's~~company’s business segments, is as follows:

Global
Components
Global ECS Total
Balance as of December 31, 2016 (a) $ 1,239,741
$ 1,152,479
$ 2,392,220
Acquisitions and related adjustments (102 ) 6,251
6,149
Foreign currency translation adjustment 17,451
54,756
72,207
Balance as of September 30, 2017 (a) $ 1,257,090
$ 1,213,486
$ 2,470,576


(thousands)	Global Components		Global ECS		Total
Balance as of December 31, 2022 (a)	$	873,003	$	1,154,623	$	2,027,626

Foreign currency translation adjustment	1,047		7,404		8,451
Balance as of April 1, 2023 (a)	$	874,050	$	1,162,027	$	2,036,077


~~(a)~~	~~The total carrying value of goodwill for all periods in the table above is reflected net of~~ ~~$1,018,780~~ ~~of accumulated impairment charges, of which~~ ~~$716,925~~ ~~was recorded in the global components business segment and~~ ~~$301,855~~ ~~was recorded in the global ECS business segment.~~

(a) The total carrying value of goodwill as of April 1, 2023 and December 31, 2022 in the table above is reflected net of $1.6 billion of accumulated impairment charges, of which $1.3 billion was recorded in the global components business segment and $301.9 million was recorded in the global enterprise computing solutions ("ECS") business segment.

Intangible assets, net, are comprised of the following as of ~~September 30, 2017~~:April 1, 2023:


(thousands)	Gross Carrying Amount		Accumulated Amortization		Net
Customer relationships	$	268,389	$	(150,254)	$	118,135
Amortizable trade name	74,027		(40,941)		33,086
	$	342,416	$	(191,195)	$	151,221

Weighted-Average Life Gross Carrying Amount Accumulated Amortization Net
Non-amortizable trade names indefinite $ 101,000
$ —
$ 101,000
Customer relationships 10 years 476,656
(274,847 ) 201,809
Developed technology 5 years 6,340
(2,973 ) 3,367
Amortizable trade name 5 years 2,409
(1,200 ) 1,209
$ 586,405
$ (279,020 ) $ 307,385

Ind e x

ARROW ELECTRONICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~(Dollars in thousands except per share data)~~(Unaudited)

~~(Unaudited)~~

Intangible assets, net, are comprised of the following as of December 31, ~~2016:~~

2022:

Weighted-Average Life Gross Carrying Amount Accumulated Amortization Net
Non-amortizable trade names indefinite $ 101,000
$ —
$ 101,000
Customer relationships 10 years 476,176
(247,206 ) 228,970
Developed technology 5 years 9,140
(4,435 ) 4,705
Other intangible assets (b) 6,721
(4,514 ) 2,207
$ 593,037
$ (256,155 ) $ 336,882


(thousands)	Gross Carrying Amount		Accumulated Amortization		Net

Customer relationships	$	268,180	$	(144,655)	$	123,525
Amortizable trade name	74,011		(38,399)		35,612

	$	342,191	$	(183,054)	$	159,137


~~(b)~~	~~Consists of non-competition agreements, sales backlog, and an amortizable trade name with useful lives ranging from two to five years.~~

During the ~~third quarters~~first quarter of ~~2017~~2023 and ~~2016,~~2022, the company recorded amortization expense related to identifiable intangible assets of ~~$12,645~~$8.0 million and ~~$13,893,~~$9.0 million, respectively.

~~During the first nine months of 2017 and 2016, the company recorded amortization expense related to identifiable intangible assets of $37,909 and $41,252, respectively.~~

Note ED – Investments in Affiliated Companies

The company owns a 50% interest in ~~several~~two joint ventures with Marubun Corporation (collectively "Marubun/Arrow") and ~~several interests ranging from 43% to~~a 50% interest in one other joint ~~ventures and equity method investments.~~venture. These investments are accounted for using the equity method.

The following table presents the ~~company's~~company’s investment in affiliated companies:


(thousands)	April 1, 2023		December 31, 2022
Marubun/Arrow	$	48,810	$	54,292
Other	10,872		10,820
	$	59,682	$	65,112

September 30,
2017 December 31,
2016
Marubun/Arrow $ 68,179
$ 65,237
Other 18,447
23,164
$ 86,626
$ 88,401

The equity in earnings (losses) of affiliated companies consists of the following:


	Quarter Ended
(thousands)	April 1, 2023		April 2, 2022
Marubun/Arrow	$	(397)	$	794
Other	317		49
	$	(80)	$	843

Quarter Ended Nine Months Ended
September 30,
2017 October 1,
2016 September 30,
2017 October 1,
2016
Marubun/Arrow $ 1,886
$ 1,549
$ 5,168
$ 5,059
Other (670 ) (238 ) (2,303 ) 335
$ 1,216
$ 1,311
$ 2,865
$ 5,394

Under the terms of various joint venture agreements, the company is required to pay its pro-rata share of the ~~third party~~third-party debt of the joint ventures in the event that the joint ventures are unable to meet their obligations. ~~At September 30, 2017, the company's pro-rata share of this debt was approximately $850.~~ There were no outstanding borrowings under the ~~third party~~third-party debt agreements of the joint ventures as of April 1, 2023 and December 31, ~~2016. The company believes there is sufficient equity in each~~2022.

Note E – Accounts Receivable

Accounts receivable, net, consists of the ~~joint ventures to meet the obligations.~~ following:


(thousands)	April 1, 2023		December 31, 2022
Accounts receivable	$	10,759,556	$	12,416,114
Allowances for doubtful accounts	(103,693)		(93,397)
Accounts receivable, net	$	10,655,863	$	12,322,717

Ind e x

ARROW ELECTRONICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~(Dollars~~(Unaudited)

Changes in ~~thousands except per share data)~~

~~(Unaudited)~~

~~Note F – Accounts Receivable~~

~~Accounts receivable, net,~~the allowance for doubtful accounts consists of the following:


	Quarter Ended
(thousands)	April 1, 2023		April 2, 2022
Balance at beginning of period	$	93,397	$	75,901

Charged to income	14,991		13,768
Translation adjustments	388		190
Writeoffs	(5,083)		(2,676)
Balance at end of period	$	103,693	$	87,183

September 30,
2017 December 31,
2016
Accounts receivable $ 7,124,677
$ 6,798,943
Allowances for doubtful accounts (54,048 ) (52,256 )
Accounts receivable, net $ 7,070,629
$ 6,746,687

The company ~~maintains allowances for doubtful accounts for estimated losses resulting from~~monitors the ~~inability~~current credit condition of its customers in estimating the expected credit losses and has not experienced significant changes in customers’ payment trends or significant deterioration in customers’ credit risk as of April 1, 2023.

The company has an EMEA asset securitization program under which it continuously sells its interest in designated pools of trade accounts receivable of certain of its subsidiaries in EMEA, at a discount, to ~~make required payments.~~a special purpose entity, which in turn sells certain of the receivables to unaffiliated financial institutions and conduits administered by such unaffiliated financial institutions ("unaffiliated financial institutions") on a monthly basis. The ~~allowances for doubtful~~company may sell up to €600.0 million under the EMEA asset securitization program, which matures in December 2025, subject to extension in accordance with its terms. In January 2023, the company amended a provision in the EMEA asset securitization program to update certain financial ratios. The program is conducted through Arrow EMEA Funding Corp B.V., an entity structured to be bankruptcy remote. The company is deemed the primary beneficiary of Arrow EMEA Funding Corp B.V. as the company has both the power to direct the activities that most significantly impact the entity’s economic performance and the obligation to absorb losses or the right to receive the benefits that could potentially be significant to the entity from the transfer of the trade accounts receivable into the special purpose entity. Accordingly, Arrow EMEA Funding Corp B.V. is included in the company’s consolidated financial statements.

Sales of accounts receivable to unaffiliated financial institutions under the EMEA asset securitization program:


	Quarter Ended
(thousands)	April 1, 2023		April 2, 2022
EMEA asset securitization, sales of accounts receivable	$	817,833	$	569,216

Receivables sold to unaffiliated financial institutions under the program are ~~determined using a combination~~excluded from “Accounts receivable, net” on the company’s consolidated balance sheets, and cash receipts are reflected as cash provided by operating activities on the consolidated statements of ~~factors, including the length of time~~cash flows. The purchase price is paid in cash when the receivables are ~~outstanding,~~sold. Certain unsold receivables held by Arrow EMEA Funding Corp B.V. are pledged as collateral to unaffiliated financial institutions. These unsold receivables are included in “Accounts receivable, net” in the ~~current business environment, and historical experience.~~ company’s consolidated balance sheets.

The company ~~also has notes~~continues servicing the receivables ~~with~~which were sold and in exchange receives a servicing fee under the program. The company does not record a servicing asset or liability on the company’s consolidated balance sheets as the company estimates that the fee it receives to service these receivables approximates the fair market compensation to provide the servicing activities.

Other amounts related to the EMEA asset securitization program:





(thousands)	April 1, 2023		December 31, 2022
Receivables sold to unaffiliated financial institutions that were uncollected	$	644,539	$	628,930
Collateralized accounts receivable held by Arrow EMEA funding Corp B.V.	1,028,748		932,243

Any accounts receivable held by Arrow EMEA Funding Corp B.V. would likely not be available to other creditors of the company in the event of bankruptcy or insolvency proceedings if there are outstanding balances under the EMEA asset

Ind e x

ARROW ELECTRONICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

securitization program. The assets of the special purpose entity cannot be used by the company for general corporate purposes. Additionally, the financial obligations of Arrow EMEA Funding Corp B.V. to the unaffiliated financial institutions under the program are limited to the assets it owns and there is no recourse to Arrow Electronics, Inc. for receivables that are uncollectible as a result of the insolvency or the inability to pay of the account debtors.

The EMEA asset securitization program includes terms and conditions that limit the incurrence of additional borrowings and require that certain ~~customers.~~financial ratios be maintained at designated levels. As of ~~September 30, 2017~~April 1, 2023, the company was in compliance with all such financial covenants.

Note F – Supplier Finance Programs

At the request of certain of the company’s suppliers, the company has entered into agreements (“supplier finance programs”) with third-party finance providers, which facilitate the participating suppliers’ ability to sell their receivables from the company to the third-party financial institutions, at the sole discretion of the suppliers. For agreeing to participate in these programs, the company seeks to secure improved standard payment terms with its suppliers. The company is not involved in negotiating terms of the arrangements between its suppliers and the financial institutions, and has no economic interest in a supplier’s decision to enter into these agreements, or sell receivables from the company. The company's rights and obligations to its suppliers, including amounts due, are not impacted by suppliers’ decisions to sell amounts under the arrangements. However, the company agrees to make all payments to the third-party financial institutions, and the company’s right to offset balances due from suppliers against payment obligations is restricted by the agreements for those payment obligations that have been sold by suppliers. As of April 1, 2023, and December 31, ~~2016,~~2022, the company ~~has one customer with a combined note~~had $971.0 million and ~~accounts receivable~~$1.5 billion, respectively, in obligations outstanding under these programs included in "Accounts payable" in the company’s consolidated balance sheets and all activity related to the obligations is presented within operating activities on the consolidated statements of approximately $27,850 and $20,000, respectively. The customer became delinquent on its repayment of the note during the fourth quarter of 2016. The company believes that it will recover all amounts due; however, it is possible that it could incur a loss.cash flows.

Note G – Debt

Short-term borrowings, including current portion of long-term debt, ~~consists~~consist of the following:


(thousands)	April 1, 2023		December 31, 2022
4.50% notes, due March 2023	$	—	$	299,895

Uncommitted lines of credit	—		78,000
Commercial paper	119,980		173,407
Other short-term borrowings	24,284		38,581
	$	144,264	$	589,883

September 30,
2017 December 31,
2016
3.00% notes, due 2018 $ 299,643
$ —
Other short-term borrowings 80,565
93,827
$ 380,208
$ 93,827

Other short-term borrowings are primarily utilized to support working capital requirements. The weighted-average interest rate on these borrowings was ~~2.7%~~3.84% and ~~2.4%~~1.98% at ~~September 30, 2017~~April 1, 2023 and December 31, ~~2016,~~2022, respectively.

~~Long-term debt consists~~The company has $200.0 million in uncommitted lines of credit as of April 1, 2023. There were no outstanding borrowings under the ~~following:~~uncommitted lines of credit at April 1, 2023 and $78.0 million in outstanding borrowings under the uncommitted lines of credit at December 31, 2022, respectively. These borrowings were provided on a short-term basis and the maturity is agreed upon between the company and the lender. The uncommitted lines of credit had a weighted-average effective interest rate of 5.41% and 5.22% at April 1, 2023 and December 31, 2022, respectively. In May 2023, the company increased the borrowing capacity on its uncommitted lines of credit from $200.0 million to $500.0 million.

The company has a commercial paper program, and the maximum aggregate balance of commercial paper outstanding may not exceed the borrowing capacity of $1.2 billion. Amounts outstanding under the commercial paper program are backstopped by available commitments under the company’s revolving credit facility. The company had $120.0 million in outstanding borrowings under this program at April 1, 2023 and $173.4 million in outstanding borrowings at December 31, 2022. The commercial paper program had an effective interest rate of 5.90% and 5.15% at April 1, 2023 and December 31, 2022, respectively.

September 30,
2017 December 31,
2016
Revolving credit facility $ 96,200
$ —
Asset securitization program 255,000
460,000
6.875% senior debentures, due 2018 —
199,348
3.00% notes, due 2018 —
299,013
6.00% notes, due 2020 208,928
299,183
5.125% notes, due 2021 130,364
248,843
3.50% notes, due 2022 346,330
345,776
4.50% notes, due 2023 297,001
296,646
3.25% notes, due 2024 492,846
—
4.00% notes, due 2025 345,040
344,625
7.50% senior debentures, due 2027 109,673
198,514
3.875% notes, due 2028 493,449
—
Interest rate swaps designated as fair value hedges 180
152
Other obligations with various interest rates and due dates 27,949
4,234
$ 2,802,960
$ 2,696,334

Ind e x

ARROW ELECTRONICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~(Dollars in thousands except per share data)~~(Unaudited)

~~(Unaudited)~~

Long-term debt consists of the following:


(thousands)	April 1, 2023		December 31, 2022
Revolving credit facility	$	15,000	$	—
North American asset securitization program	1,255,000		1,235,000


3.25% notes, due 2024	498,394		498,122
4.00% notes, due 2025	348,521		348,344
6.125% notes, due 2026	496,916		—
7.50% senior debentures, due 2027	110,123		110,103
3.875% notes, due 2028	496,608		496,448
2.95% notes, due 2032	497,196		494,522
Other obligations with various interest rates and due dates	1,298		425
	$	3,719,056	$	3,182,964

The 7.50% senior debentures are not redeemable prior to their maturity. The ~~3.00%~~6.125% notes ~~6.00% notes, 5.125% notes, 3.50% notes, 4.50% notes, 3.25% notes, 4.00% notes, and 3.875% notes,~~have a call option which allows for redemption at par, without penalty, on or after March 1, 2024. All other notes may be called at the option of the company subject to ~~"make whole"~~“make whole” clauses.

The estimated fair market value of long-term debt, using quoted market prices, is as follows:


(thousands)	April 1, 2023		December 31, 2022





3.25% notes, due 2024	$	486,500	$	481,500
4.00% notes, due 2025	340,000		338,000
6.125% notes, due 2026	501,500		—
7.50% senior debentures, due 2027	118,500		116,500
3.875% notes, due 2028	475,500		456,000
2.95% notes, due 2032	420,500		395,500

September 30,
2017 December 31,
2016
6.875% senior debentures, due 2018 $ —
$ 212,500
3.00% notes, due 2018 301,500
303,500
6.00% notes, due 2020 226,500
325,500
5.125% notes, due 2021 140,500
265,500
3.50% notes, due 2022 358,000
349,500
4.50% notes, due 2023 318,500
305,500
3.25% notes, due 2024 494,000
—
4.00% notes, due 2025 357,500
345,000
7.50% senior debentures, due 2027 136,500
238,000
3.875% notes, due 2028 499,000
—

The carrying amount of the ~~company's~~company’s other short-term borrowings, ~~in various countries,~~uncommitted lines of credit, revolving credit facility, North American asset securitization program, commercial paper, and other obligations approximate their fair value.

The company has a ~~$1,800,000~~$2.0 billion revolving credit facility maturing in ~~December 2021. This~~September 2026. The facility may be used by the company for general corporate purposes including working capital in the ordinary course of business, letters of credit, repayment, prepayment or purchase of long-term indebtedness, acquisitions, and as support for the company's commercial paper program, as applicable. Interest on borrowings under the revolving credit facility is calculated using a base rate or a ~~euro currency~~secured overnight financing rate ("SOFR"), plus a spread ~~(1.18%~~(1.08% at ~~September 30, 2017)~~April 1, 2023), which is based on the company's credit ratings, plus a credit spread adjustment of 0.10% or an effective interest rate of ~~2.36%~~5.88% at ~~September 30, 2017.~~April 1, 2023. The facility fee, which is based on the ~~company's~~company’s credit ratings, was ~~.20%~~0.175% of the total borrowing capacity at ~~September 30, 2017.~~April 1, 2023. The company had ~~$96,200~~$15.0 million in outstanding borrowings under the revolving credit facility at ~~September 30, 2017. The company had~~April 1, 2023, and no outstanding borrowings under the revolving credit facility at December 31, ~~2016.~~2022.

The company has a commercial paper program and the maximum aggregate balance of commercial paper outstanding may not exceed the borrowing capacity of $1,200,000. The company had no outstanding borrowings under this program at September 30, 2017 and December 31, 2016. The program had an effective interest rate of 1.74% for the third quarter of 2017.

~~The company has an~~North American asset securitization program collateralized by accounts receivable of certain of its subsidiaries. The company may borrow up to ~~$910,000~~$1.5 billion under the ~~asset securitization~~ program which matures in September ~~2019.~~2025. The ~~asset securitization~~ program is conducted through Arrow Electronics Funding Corporation ~~("AFC"~~(“AFC”), a wholly-owned, bankruptcy remote subsidiary. The North American asset securitization program does not qualify for ~~true~~ sale treatment. Accordingly, the accounts receivable and related debt obligation remain on the ~~company's~~company’s consolidated balance sheets. Interest on borrowings is calculated using a base rate ~~or a commercial paper rate~~ plus a spread ~~(.40%~~(0.40% at ~~September 30, 2017), which is based on the company's~~April 1, 2023) plus a credit ~~ratings,~~spread adjustment of 0.10% or an effective interest rate of ~~1.73%~~5.30% at ~~September 30, 2017.~~April 1, 2023. The facility fee is ~~.40%.~~0.40% of the total borrowing capacity.

~~At September 30, 2017 and December 31, 2016, the~~The company had ~~$255,000~~$1.3 billion and ~~$460,000, respectively,~~$1.2 billion in outstanding borrowings under the North American asset securitization program at April 1, 2023 and December 31, 2022, respectively, which was included in ~~"Long-term debt"~~“Long-term debt” in the ~~company's~~ company’s

Ind e x

ARROW ELECTRONICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

consolidated balance sheets. Total collateralized accounts receivable of approximately ~~$2,187,751~~$2.8 billion and ~~$2,045,464, respectively,~~$3.1 billion were held by AFC and were included in ~~"Accounts~~“Accounts receivable, ~~net"~~net” in the ~~company's~~company’s consolidated balance ~~sheets.~~sheets at April 1, 2023 and December 31, 2022, respectively. Any accounts receivable held by AFC would likely not be available to other creditors of the company in the event of bankruptcy or insolvency proceedings of the company before repayment of any outstanding borrowings under the North American asset securitization program.

Both the revolving credit facility and North American asset securitization program include terms and conditions that limit the incurrence of additional borrowings and require that certain financial ratios be maintained at designated levels. ~~The~~As of April 1, 2023, the company was in compliance with all such financial covenants.

~~ARROW ELECTRONICS, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Dollars in thousands except per share data)~~

~~(Unaudited)~~

~~covenants as of September 30, 2017 and is currently not aware of any events that would cause non-compliance with any covenants in the future.~~

~~The company has a $100,000 uncommitted line of credit. The company had no outstanding borrowings under the uncommitted line of credit at September 30, 2017 and December 31, 2016.~~

During ~~June 2017,~~the first quarter of 2023, the company completed the sale of ~~$500,000~~$500.0 million principal amount of ~~3.875%~~6.125% notes due in ~~2028.~~March 2026. The ~~net proceeds of the offering of $494,625 were used to redeem the company's 6.875% senior debenture due June 2018 and refinance~~notes have a ~~portion of the company’s 6.00% notes due April 2020, 5.125% notes due~~call option which allows for redemption at par, without penalty, on or after March ~~2021, and 7.50% notes due January 2027. The company recorded a loss on extinguishment of debt of $59,545 in the first nine months of 2017.~~

~~During September 2017, the company completed the sale of $500,000 principal amount of 3.25% notes due in~~1, 2024. The net proceeds of the offering of ~~$493,810 are expected to be~~$498.6 million were used to ~~redeem~~repay the ~~company's debt obligations~~$300.0 million principal amount of its 4.50% notes due March 2023 and for general corporate purposes. On the issuance date, the company entered into an interest rate swap, which effectively converts the 6.125% notes to a floating rate based on daily compounding SOFR + 0.508%. Refer to Note H for additional information.

During March 2023, the company repaid $300.0 million principal amount of its 4.50% notes due March 2023.

During February 2022, the company repaid $350.0 million principal amount of its 3.50% notes due April 2022.

Interest and dividend income of $14.3 million and $4.5 million for the first quarter of 2023 and 2022, respectively were recorded in "Interest and other financing expense, ~~net, includes interest and dividend income~~net" within the company's consolidated statements of $8,121 and $23,487 for the third quarter and first nine months of 2017, respectively. Interest and other financing expense, net, includes interest and dividend income of $5,040 and $13,626 for the third quarter and first nine months of 2016, respectively.operations.

Note H – Financial Instruments Measured at Fair Value

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The company utilizes a fair value hierarchy, which maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. The fair value hierarchy has three levels of inputs that may be used to measure fair value:


~~Level 1~~	~~Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.~~


~~Level 2~~	~~Quoted prices in markets that are not active; or other inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability.~~


~~Level 3~~	~~Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable.~~

Level 1 Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

Level 2 Quoted prices in markets that are not active; or other inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability.

Level 3 Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable.

Ind e x

ARROW ELECTRONICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The following table presents assets ~~(liabilities)~~ measured at fair value on a recurring basis at ~~September 30, 2017~~:April 1, 2023:


(thousands)	Balance Sheet Location	Level 1		Level 2		Level 3		Total
Cash equivalents (a)	Cash and cash equivalents	$	7,951	$	—	$	—	$	7,951
Equity investments (b)	Other assets	56,031		—		—		56,031
Interest rate swaps designated as cash flow hedges	Other assets	—		50,225		—		50,225

Interest rate swap designated as fair value hedge	Other assets	—		2,742		—		2,742
Foreign exchange contracts designated as net investment hedges	Other assets	—		51,716		—		51,716



		$	63,982	$	104,683	$	—	$	168,665

Balance Sheet
Location Level 1 Level 2 Level 3 Total
Cash equivalents Other assets $ 854
$ —
$ —
$ 854
Available-for-sale securities Other assets 45,112
—
—
45,112
Interest rate swaps Other assets —
180
—
180
Foreign exchange contracts Other current assets —
6,809
—
6,809
Foreign exchange contracts Accrued expenses —
(6,733 ) —
(6,733 )
Contingent consideration Accrued expenses —
—
(3,100 ) (3,100 )
$ 45,966
$ 256
$ (3,100 ) $ 43,122

~~ARROW ELECTRONICS, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Dollars in thousands except per share data)~~

~~(Unaudited)~~

The following table presents assets ~~(liabilities)~~ measured at fair value on a recurring basis at December 31, ~~2016~~:2022:


(thousands)	Balance Sheet Location	Level 1		Level 2		Level 3		Total
Cash equivalents (a)	Cash and cash equivalents/ other assets	$	6,596	$	—	$	—	$	6,596
Equity investments (b)	Other assets	50,614		—		—		50,614

Interest rate swaps designated as cash flow hedges	Other assets	—		55,942		—		55,942
Foreign exchange contracts designated as net investment hedges	Other assets /other current assets	—		60,962		—		60,962



		$	57,210	$	116,904	$	—	$	174,114

Balance Sheet
Location Level 1 Level 2 Level 3 Total
Cash equivalents Other assets $ 2,660
$ —
$ —
$ 2,660
Available-for-sale securities Other assets 37,915
—
—
37,915
Interest rate swaps Other assets —
152
—
152
Foreign exchange contracts Other current assets —
4,685
—
4,685
Foreign exchange contracts Accrued expenses —
(3,444 ) —
(3,444 )
Contingent consideration Accrued expenses
/ Other liabilities —
—
(4,027 ) (4,027 )
$ 40,575
$ 1,393
$ (4,027 ) $ 37,941

(a) Cash equivalents include highly liquid investments with an original maturity of less than three months.

(b) The company has an 8.4% equity ownership interest in Marubun Corporation and a portfolio of mutual funds with quoted market prices. The company recorded an unrealized gain (loss) of $8.5 million and $(5.7) million for the first quarter of 2023 and 2022, respectively, on equity securities held at the end of the quarter.

Assets and liabilities that are measured at fair value on a nonrecurring basis relate primarily to goodwill and identifiable intangible assets ~~(see~~(refer to Note ~~C and D)~~C). The company tests these assets for impairment if indicators of potential impairment exist or at least annually if ~~indefinite lived.~~ indefinite-lived.

~~During the first nine months of 2017 and 2016, there were no transfers of assets (liabilities) measured at fair value between the three levels of the fair value hierarchy.~~

~~Available-For-Sale Securities~~

The company has an 8.4% equity ownership interest in Marubun Corporation ("Marubun") and a portfolio of mutual funds with quoted market prices, all of which are accounted for as available-for-sale securities.

~~The fair value of the company's available-for-sale securities is as follows:~~

September 30, 2017 December 31, 2016
Marubun Mutual Funds Marubun Mutual Funds
Cost basis $ 10,016
$ 17,743
$ 10,016
$ 18,097
Unrealized holding gain 7,763
9,590
3,806
5,996
Fair value $ 17,779
$ 27,333
$ 13,822
$ 24,093

~~The unrealized holding gains on these investments are included in "Accumulated other comprehensive loss" in the shareholders' equity section in the company's consolidated balance sheets.~~

Derivative Instruments

The company uses various financial instruments, including derivative instruments, for purposes other than trading. Certain derivative instruments are designated at inception as hedges and measured for effectiveness both at inception and on an ongoing basis. Derivative instruments not designated as hedges are marked-to-market each reporting period with any unrealized gains or losses recognized in earnings.

Interest Rate Swaps

The company manages the risk of variability in interest rates of future expected debt issuances by entering into various forward-starting interest rate swaps, designated as cash flow hedges. Changes in fair value of interest rate swaps designated as cash flow hedges are recorded in the shareholders’ equity section in the company’s consolidated balance sheets in “Accumulated other comprehensive loss” and will be reclassified into income over the life of the anticipated debt issuance or in the period the hedged forecasted cash flows are deemed no longer probable to occur. Reclassified gains and losses are recorded within the line item “Interest and other financing expense, net” in the consolidated statements of operations. The fair value of interest rate swaps is estimated using a discounted cash flow analysis on the expected cash flows of each derivative based on observable inputs, including interest rate curves and credit spreads.

Ind e x

ARROW ELECTRONICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

At April 1, 2023 and December 31, 2022, the company had the following outstanding interest rate swaps designated as cash flow hedges:

Trade Date

Maturity Date

Notional Amount (thousands)

Weighted-Average Interest Rate

Date Range of Forecasted Transaction

April 2020

December 2024

$300,000

0.97%

Jan 2023 - Dec 2025

The company occasionally enters into interest rate swap transactions that convert certain fixed-rate debt to variable-rate debt ~~or variable-rate debt to fixed-rate debt~~ in

order to manage its targeted mix of fixed- and floating-rate debt. ~~The~~During the first quarter of 2023, the company ~~uses the hypothetical derivative method~~entered into an interest rate swap designated as a fair value hedge intended to ~~assess the effectiveness~~hedge a portion of its interest rate ~~swaps designated as~~exposure by converting the fixed rate on the company's $500.0 million 6.125% notes due in March 2026, to a floating interest rate based on the benchmark SOFR swap rate. For qualifying interest rate fair value hedges, gains or losses on ~~a quarterly basis. The effective portion of the change~~derivatives are included in “Interest and other financing expense, net” in the ~~fair value~~consolidated statements of ~~interest rate swaps designated as fair value hedges is recorded as a change to the carrying value of the related hedged debt, and the effective portion of the~~operations. The change in fair value of ~~interest rate swaps designated~~the hedged item attributable to the risk being hedged is reported as ~~cash flow hedges~~an adjustment to its carrying value and is ~~recorded~~also included in the shareholders' equity section in the company's consolidated balance sheets in "Accumulated other comprehensive loss." The ineffective portion of the interest rate swaps, if any, is recorded in "Interest“Interest and other financing expense, ~~net"~~net”. When a derivative is no longer designated as a hedge, any remaining difference between the carrying value and par value of the hedged item is amortized in “Interest and other financing expense, net” over the ~~company's consolidated statements~~remaining life of ~~operations.~~ the hedged item using the effective interest method. The counterparty to the interest rate swap has the option to cancel the swaps after one year, without penalty.

As of ~~September 30, 2017 and December 31, 2016, all outstanding interest rate swaps were designated as fair value hedges.~~

~~ARROW ELECTRONICS, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Dollars in thousands except per share data)~~

~~(Unaudited)~~

~~The terms of our~~April 1, 2023, the company had one outstanding interest rate swap ~~contracts at September 30, 2017~~designated as a fair value hedge, the terms of which are as follows:

Trade Date

Maturity Date

Notional Amount (thousands)

Interest Rate due from Counterparty

Interest Rate due to Counterparty

February 2023

March 2026

$500,000

6.125%

SOFR + 0.508%

Maturity Date Notional Amount Interest rate due from counterparty Interest rate due to counterparty
April 2020 50,000 6.000% 6 mo. USD LIBOR + 3.896%

Foreign Exchange Contracts

The company’s foreign currency exposure relates primarily to international transactions where the currency collected from customers can be different from the currency used to purchase the product. The company’s primary exposures to such transactions ~~in its foreign operations~~ are denominated ~~primarily~~ in the following currencies: Euro, Indian Rupee, and Chinese ~~Renminbi, British Pound, Taiwan Dollar, and Australian Dollar.~~Renminbi. The company enters into foreign exchange forward, option, or swap contracts (collectively, the ~~"foreign~~“foreign exchange ~~contracts"~~contracts”) ~~to mitigate the impact of changes in foreign currency exchange rates. These contracts are executed~~ to facilitate the hedging of foreign currency exposures resulting from inventory purchases and sales and mitigate the impact of changes in foreign currency exchange rates related to these transactions. Foreign exchange contracts generally have terms of no more than six months. ~~Gains or losses on designated contracts are deferred and recognized when the underlying future purchase or sale is recognized or when the corresponding asset or liability is revalued.~~ The company does not enter into foreign exchange contracts for trading purposes. The risk of loss on a foreign exchange contract is the risk of nonperformance by the counterparties, which the company minimizes by limiting its counterparties to major financial institutions. The fair value of the foreign exchange contracts ~~are~~is estimated using ~~market quotes.~~foreign currency spot rates and forward rates quotes by third-party financial institutions. The notional amount of the foreign exchange contracts inclusive of foreign exchange contracts designated as a net investment hedge at ~~September 30, 2017~~April 1, 2023 and December 31, ~~2016~~2022 was ~~$447,484~~$1.2 billion and ~~$460,233,~~$1.3 billion, respectively.

Gains and losses related to non-designated foreign currency exchange contracts are recorded in "Cost of sales" in the ~~company's~~company’s consolidated statements of operations. Gains and losses related to ~~designated~~ foreign currency exchange contracts designated as cash flow hedges are recorded in "Cost of ~~sales",~~sales," "Selling, general, and administrative ~~expenses",~~expenses," and "Interest and other financing expense, net" based upon the nature of the underlying hedged transaction, in the ~~company's~~company’s consolidated statements of ~~operations~~operations. Gains or losses on these contracts are deferred and recognized when the underlying future purchase or sale is recognized or when the corresponding asset or liability is revalued, and were not material to the financial statements for the ~~third~~periods presented.

Ind e x

ARROW ELECTRONICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The following foreign exchange contracts were designated as net investment hedges:

Notional Amount (thousands)

Maturity Date

April 1, 2023

December 31, 2022

March 2023

EUR

—

EUR

50,000

September 2024

EUR

50,000

EUR

50,000

April 2025

EUR

100,000

EUR

100,000

January 2028

EUR

100,000

EUR

100,000

Total

EUR

250,000

EUR

300,000

The contracts above have been designated as a net investment hedge which is in place to hedge a portion of the company’s net investment in subsidiaries with euro-denominated net assets. The change in the fair value of derivatives designated as net investment hedges are recorded in “foreign currency translation adjustment” (“CTA”) within “Accumulated other comprehensive loss” in the company’s consolidated balance sheets. Amounts excluded from the assessment of hedge effectiveness are included in “Interest and other financing expense, net” in the company’s consolidated statements of operations.

During the first quarter of 2023, a foreign exchange contract designated as a net investment hedge matured and ~~first nine months~~the company received $10.7 million, which is reported in the “cash flow from investing activities” section of ~~2017 and 2016.~~the consolidated statements of cash flows.

The effects of derivative instruments on the ~~company's~~company’s consolidated statements of operations and other comprehensive income are as follows:


	Income Statement Line	Quarter Ended
(thousands)		April 1, 2023		April 2, 2022
Gain (Loss) Recognized in Income
Foreign exchange contracts, net investment hedge (a)	Interest Expense	$	2,048	$	2,201
Interest rate swaps, cash flow hedge	Interest Expense	(839)		(868)
Interest rate swap, fair value hedge (b)	Interest Expense	2,742		—
Total		$	3,951	$	1,333
Gain (Loss) Recognized in Other Comprehensive Income before reclassifications, net of tax
Foreign exchange contracts, net investment hedge (c)		$	1,125	$	1,094
Interest rate swaps, cash flow hedge		(4,347)		7,547
Total		$	(3,222)	$	8,641

Quarter Ended Nine Months Ended
September 30,
2017
October 1,
2016 September 30,
2017 October 1,
2016
Loss Recognized in Consolidated Net Income
Foreign exchange contracts $ (4,283 ) $ (2,394 ) $ (15,445 ) $ (1,873 )
Interest rate swaps (210 ) (153 ) (532 ) (452 )
Total $ (4,493 ) $ (2,547 ) $ (15,977 ) $ (2,325 )
Loss Recognized in Other Comprehensive Income before reclassifications
Foreign exchange contracts $ (374 ) $ (55 ) $ (1,241 ) $ (588 )
Interest rate swaps $ (3,619 ) $ —
$ (4,672 ) $ —

(a)Represents derivative amounts excluded from the assessment of effectiveness for the net investment hedges reclassified from CTA to “Interest and other financing expenses, net”.

(b)The cumulative amount of fair value hedging adjustments to the carrying value of hedged debt instruments totaled a loss of $2.5 million for the first quarter of 2023.

(c)Includes derivative losses of $1.7 million and $5.0 million for the first quarter of 2023 and 2022, respectively, which were excluded from the assessment of effectiveness for the net investment hedges and recognized in other comprehensive income, net of tax.

Other

The carrying amount of ~~cash~~“cash and cash ~~equivalents, accounts~~equivalents”, “accounts receivable, ~~net,~~net”, and ~~accounts payable~~“accounts payable” approximate their fair value due to the short maturities of these financial instruments.

Ind e x

ARROW ELECTRONICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~(Dollars in thousands except per share data)~~(Unaudited)

~~(Unaudited)~~

Note I ~~– Restructuring, Integration, and Other Charges~~

~~The following table presents the components of the restructuring, integration, and other charges:~~

Quarter Ended Nine Months Ended
September 30,
2017 October 1,
2016 September 30,
2017 October 1,
2016
Restructuring and integration charges - current period actions $ 12,050
$ 12,028
$ 34,296
$ 22,131
Restructuring and integration charges (credits) - actions taken in prior periods 250
(487 ) 6,348
3,474
Other charges 3,596
12,726
15,173
35,556
$ 15,896
$ 24,267
$ 55,817
$ 61,161

~~2017~~ ~~Restructuring and Integration Charges~~

~~The following table presents the components of the 2017 restructuring and integration charges and activity in the related restructuring and integration accrual for the first nine months of 2017:~~

Personnel
Costs
Facilities Costs Other Total
Restructuring and integration charges $ 29,030
$ 4,222
$ 1,044
$ 34,296
Payments (14,203 ) (2,575 ) (834 ) (17,612 )
Foreign currency translation 868
83
20
971
Balance as of September 30, 2017 $ 15,695
$ 1,730
$ 230
$ 17,655

These restructuring initiatives are due to the company's continued efforts to lower cost and drive operational efficiency. Integration costs are primarily related to the integration of acquired businesses within the company's pre-existing business and the consolidation of certain operations.

~~2016~~ ~~Restructuring and Integration Charges~~

~~The following table presents the activity in the restructuring and integration accrual for the first nine months of 2017 related to restructuring and integration actions taken in 2016:~~

Personnel
Costs
Facilities Costs Other Total
Balance as of December 31, 2016 $ 11,694
$ 3,793
$ 316
$ 15,803
Restructuring and integration charges (credits) 6,422
(472 ) (18 ) 5,932
Payments (11,347 ) (2,688 ) (119 ) (14,154 )
Foreign currency translation 436
187
31
654
Balance as of September 30, 2017 $ 7,205
$ 820
$ 210
$ 8,235

~~Restructuring and Integration Accruals Related to Actions Taken Prior to~~ ~~2016~~

Included in restructuring, integration, and other charges for the first nine months of 2017 are restructuring and integration charges of $416 related to restructuring and integration actions taken prior to 2016. The restructuring and integration charge (credits) includes adjustments to personnel costs of $773, facilities costs of $(337), and other costs of $(20). The restructuring and integration accruals at September 30, 2017 related to actions taken prior to 2016 of $3,558 include accruals for personnel costs of $2,560, accruals for facilities costs of $870, and accruals for other costs of $128.

~~ARROW ELECTRONICS, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Dollars in thousands except per share data)~~

~~(Unaudited)~~

~~Restructuring and Integration Accrual Summary~~

~~The restructuring and integration accruals aggregate to $29,448 at September 30, 2017, all of which are expected to be spent in cash, and are expected to be utilized as follows:~~

~~The accruals for personnel costs totaling $25,460 relate to the termination of personnel that have scheduled payouts of $20,918 in 2017, $3,917 in 2018, $601 in 2019, and $24 in 2020.~~

The accruals for facilities totaling $3,420 relate to vacated leased properties that have scheduled payments of $2,297 in 2017, $507 in 2018, $112 in 2019, $108 in 2020, $104 in 2021, and $292 thereafter.

~~Other accruals of $568 are expected to be spent within one year.~~

~~Other Charges~~

Included in restructuring, integration, and other charges for the third quarter and first nine months of 2017 are other expenses of $3,596 and $15,173, respectively. The other charge include acquisition related charges for the third quarter and first nine months of 2017 of $559 and $4,562, respectively, related to contingent consideration for acquisitions completed in prior years which were conditional upon the financial performance of the acquired companies and the continued employment of the selling shareholders, as well as professional and other fees directly related to recent acquisition activity. In the third quarter and first nine months of 2017, the company recorded a net loss on real estate transactions of $319 and $3,131, respectively, and incurred an additional expense of $65 and $2,013, respectively, to increase its accrual for the Wyle Laboratories ("Wyle") environmental obligation (see Note L).

Included in restructuring, integration, and other charges for the third quarter and first nine months of 2016 are other expenses of $12,726 and $35,556, respectively. Included in these other charges for the third quarter and first nine months of 2016 are expenses related to a fraud loss that the company recorded, net of insurance recoveries, of $507 and $4,449, respectively. The charges for the third quarter and first nine months of 2016 of $2,679 and $7,645, respectively, related to contingent consideration for acquisitions completed in prior years which were conditional upon the financial performance of the acquired companies and the continued employment of the selling shareholders, as well as professional and other fees directly related to recent acquisition activity. In the third quarter and first nine months of 2016, the company released a $2,376 legal reserve related to the Tekelec Matter and incurred an additional expense of $11,744 to increase its accrual for the Wyle environmental obligation (see Note L). During 2016, the company adopted an amendment to its Wyle defined benefit plan and incurred a settlement expense of $12,211 during the third quarter and first nine months of 2016.

In January 2016, the company determined that it was the target of criminal fraud by persons impersonating a company executive, which resulted in unauthorized transfers of cash from a company account in Europe to outside bank accounts in Asia. Legal actions by the company and law enforcement are ongoing. The information gathered by the company indicates that this was an isolated event not associated with a security breach or loss of data. Additionally, no officers or employees of the company were involved in the fraud.

~~Note J~~ – Net Income per Share

The following table presents the computation of net income per share on a basic and diluted ~~basis (shares in thousands):~~basis:


	Quarter Ended
(thousands except per share data)	April 1, 2023		April 2, 2022
Net income attributable to shareholders	$	273,750	$	364,749
Weighted-average shares outstanding - basic	58,731		67,840
Net effect of various dilutive stock-based compensation awards	748		909
Weighted-average shares outstanding - diluted	59,479		68,749
Net income per share:
Basic	$	4.66	$	5.38
Diluted (a)	$	4.60	$	5.31

Quarter Ended Nine Months Ended
September 30,
2017 October 1,
2016 September 30,
2017 October 1,
2016
Net income attributable to shareholders $ 134,630
$ 117,727
$ 348,077
$ 358,232
Weighted-average shares outstanding - basic 88,453
90,937
88,870
91,412
Net effect of various dilutive stock-based compensation awards 1,087
1,001
1,066
1,075
Weighted-average shares outstanding - diluted 89,540
91,938
89,936
92,487
Net income per share:

Basic $ 1.52
$ 1.29
$ 3.92
$ 3.92
Diluted (a) $ 1.50
$ 1.28
$ 3.87
$ 3.87

~~ARROW ELECTRONICS, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Dollars in thousands except~~(a)Stock-based compensation awards for the issuance of 127.6 thousand and 86.0 thousand shares for the first quarter of 2023 and 2022, respectively, were excluded from the computation of net income per share ~~data)~~on a diluted basis as their effect was anti-dilutive.

~~(Unaudited)~~


~~(a)~~	Stock-based compensation awards for the issuance of 396 and 363 shares for the third quarter and first nine months of 2017 and 824 and 821 shares for the third quarter and first nine months 2016, respectively, were excluded from the computation of net income per share on a diluted basis as their effect was anti-dilutive.

Note KJ – ~~Shareholders'~~Shareholders’ Equity

Accumulated Other Comprehensive Income (Loss)

The following table presents the changes in Accumulated other comprehensive income (loss), excluding noncontrolling interests:


													Quarter Ended
(thousands)												(thousands)	April 1, 2023		April 2, 2022
Foreign Currency Translation Adjustment and Other:												Foreign Currency Translation Adjustment and Other:
Other comprehensive income (loss) before reclassifications (a)												Other comprehensive income (loss) before reclassifications (a)	$	8,008	$	(48,700)
Amounts reclassified into income												Amounts reclassified into income	200		(341)
Unrealized Gain on Foreign Exchange Contracts Designated as Net Investment Hedges, Net:												Unrealized Gain on Foreign Exchange Contracts Designated as Net Investment Hedges, Net:
Other comprehensive income before reclassifications (b)												Other comprehensive income before reclassifications (b)	1,125		1,094
Amounts reclassified into income												Amounts reclassified into income	(1,558)		(1,669)
Unrealized Gain (Loss) on Interest Rate Swaps Designated as Cash Flow Hedges, Net:												Unrealized Gain (Loss) on Interest Rate Swaps Designated as Cash Flow Hedges, Net:
Other comprehensive income (loss) before reclassifications (b)												Other comprehensive income (loss) before reclassifications (b)	(4,347)		7,547
Amounts reclassified into income												Amounts reclassified into income	638		658
Employee Benefit Plan Items, Net:												Employee Benefit Plan Items, Net:

Amounts reclassified into income												Amounts reclassified into income	(272)		99

Net change in Accumulated other comprehensive income (loss)												Net change in Accumulated other comprehensive income (loss)	$	3,794	$	(41,312)

	Quarter Ended					Nine Months Ended
	September 30, 2017			October 1, 2016		September 30, 2017			October 1, 2016
Foreign Currency Translation Adjustment and Other:
Other comprehensive income (loss) before reclassifications (a)	$	57,988		$	15,822	$	227,928		$	35,610
Amounts reclassified into income	(4,241		)	46		(6,888		)	1,137
Unrealized Gain (Loss) on Investment Securities, Net:
Other comprehensive income (loss) before reclassifications	1,357			1,273		4,639			(2,408		)
Amounts reclassified into income	—			—		—			—
Unrealized Gain (Loss) on Interest Rate Swaps Designated as Cash Flow Hedges, Net:
Other comprehensive loss before reclassifications	(2,223		)	—		(2,870		)	—
Amounts reclassified into income	130			94		327			278
Employee Benefit Plan Items, Net:
Other comprehensive income (loss) before reclassifications	(51		)	25		(94		)	97
Amounts reclassified into income (loss)	543			789		1,497			5,481
Net change in Accumulated other comprehensive income (loss)	$	53,503		$	18,049	$	224,539		$	40,195


~~(a)~~	Includes intra-entity foreign currency transactions that are of a long-term investment nature of $(11,193) and $(50,512) for the third quarter and first nine months of 2017 and $(9,273) and $(38,092) for the third quarter and first nine months of 2016, respectively.

~~Share-Repurchase Program~~(a) Foreign currency translation adjustment includes intra-entity foreign currency transactions that are of a long-term investment nature of $5.6 million and $(8.3) million for the first quarter of 2023 and 2022, respectively.

(b) For additional information related to net investment hedges and interest rate swaps refer to Note H.

~~The following table shows the company's Board of Directors (the "Board") approved share-repurchase programs as of September 30, 2017:~~

Month of Board Approval Dollar Value Approved for Repurchase Dollar Value of Shares Repurchased
Approximate
Dollar Value of
Shares that May
Yet be
Purchased
Under the
Program
September 2015 $ 400,000
$ 400,000
$ —
December 2016 400,000
16,081
383,919
Total $ 800,000
$ 416,081
$ 383,919

Ind e x

ARROW ELECTRONICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~(Dollars~~(Unaudited)

Common Stock Outstanding Activity

The following table sets forth the activity in ~~thousands except per share data)~~the number of shares outstanding:


(thousands)	Common Stock Issued	Treasury Stock	Common Stock Outstanding
Common stock outstanding at December 31, 2022	125,424	66,175	59,249
Shares issued for stock-based compensation awards	—	(313)	313
Repurchases of common stock	—	2,564	(2,564)
Common stock outstanding at April 1, 2023	125,424	68,426	56,998


(thousands)	Common Stock Issued	Treasury Stock	Common Stock Outstanding
Common stock outstanding at December 31, 2021	125,424	57,358	68,066
Shares issued for stock-based compensation awards	—	(385)	385
Repurchases of common stock	—	2,015	(2,015)
Common stock outstanding at April 2, 2022	125,424	58,988	66,436

Share-Repurchase Program

The following table shows the company’s Board of Directors (the “Board”) approved share-repurchase programs as of April 1, 2023:


Share-Repurchase Details by Month of Board Approval (thousands)	Dollar Value Approved for Repurchase		Dollar Value of Shares Repurchased		Approximate Dollar Value of Shares that May Yet be Purchased Under the Program
July 2021	$	600,000	$	600,000	$	—
December 2021	600,000		600,000		—
September 2022	600,000		571,503		28,497
January 2023	1,000,000		—		1,000,000
Total	$	2,800,000	$	1,771,503	$	1,028,497

The company repurchased 2.6 million shares of common stock for $300.2 million and 2.0 million shares of common stock for $250.0 million in the first quarter of 2023 and 2022, respectively, under the company's share-repurchase program. On January 31, 2023, the company's Board of Directors approved a $1.0 billion increase to the company's share-repurchase program. As of April 1, 2023, approximately $1.0 billion remained available for repurchase under the program. The company's share-repurchase program does not have an expiration date.

Ind e x

ARROW ELECTRONICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note LK – Contingencies

Environmental Matters

In connection with the purchase of Wyle Electronics ("Wyle") in August 2000, the company acquired certain of the then outstanding obligations of Wyle, including Wyle's indemnification obligations to the purchasers of its Wyle Laboratories division for environmental ~~clean-up~~clean up costs associated with any then existing contamination or violation of environmental regulations. Under the terms of the company's purchase of Wyle from the sellers, the sellers agreed to indemnify the company for certain costs associated with the Wyle environmental obligations, among other things. In 2012, the company entered into a settlement agreement with the sellers, pursuant to which the sellers paid ~~$110,000~~$110.0 million and the company released the sellers from their indemnification obligation. As part of the settlement agreement the company accepted responsibility for any potential subsequent costs incurred related to the Wyle matters. The company is aware of two Wyle Laboratories facilities (in Huntsville, Alabama (the "Huntsville Site") and Norco, ~~California)~~California (the "Norco Site")) at which contaminated soil and groundwater was identified and will require environmental remediation. In addition, the company was named as a defendant in several lawsuits related to the Norco facility and a third site in El Segundo, California which have now been settled to the satisfaction of the parties.

The company expects ~~these environmental~~the liabilities associated with such ongoing remediation to be resolved over an extended period of time. Costs are recorded for environmental matters when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated. Accruals for environmental liabilities are adjusted periodically as facts and circumstances change, assessment and remediation efforts progress, or as additional technical or legal information becomes available. Environmental liabilities are difficult to assess and estimate due to various unknown factors such as the timing and extent of remediation, improvements in remediation technologies, and the extent to which environmental laws and regulations may change in the future. Accordingly, the company cannot presently ~~fully~~ estimate the ultimate potential costs related to these sites until such time as a substantial portion of the investigation at the sites is completed and remedial action plans are developed and, in some instances, implemented. To the extent that future environmental costs exceed amounts currently accrued by the company, net income would be adversely impacted and such impact could be material.

Accruals for environmental liabilities are included in ~~"Accrued expenses"~~“Accrued expenses” and ~~"Other liabilities"~~“Other liabilities” in the ~~company's~~company’s consolidated balance sheets. The company has determined that there is no amount within the environmental liability range that is a better estimate than any other amount, and therefore has recorded the accruals at the minimum amount of the ranges.

As successor-in-interest to Wyle, the company is the beneficiary of various Wyle insurance policies that covered liabilities arising out of operations at Norco and Huntsville. To date, the company has recovered approximately ~~$37,000~~$47.0 million from certain insurance carriers relating to environmental ~~clean-up~~clean up matters at the Norco ~~site.~~and Huntsville sites. The company ~~is considering the best way to pursue its potential claims~~filed suit against two insurers regarding liabilities arising out of operations at ~~Huntsville.~~Huntsville and reached a confidential settlement with one of the insurers in 2020. The resolution of ~~these matters~~this matter against the remaining insurer will likely take several years. The company has not recorded a receivable for any potential future insurance recoveries related to the Norco and Huntsville environmental matters, as the realization of the claims for recovery are not deemed probable at this time. The company believes the settlement amount together with potential recoveries from various insurance policies covering environmental remediation and related litigation will be sufficient to cover any potential future costs related to the Wyle acquisition; however, it is possible unexpected costs beyond those anticipated could occur.

Environmental Matters - Huntsville

In February 2015, the company and the Alabama Department of Environmental Management ~~("ADEM"~~(“ADEM”) finalized and executed a consent decree in connection with the Huntsville ~~Alabama site.~~Site. Characterization of the extent of contaminated soil and groundwater ~~continues at~~is complete and has been approved by ADEM. Health-risk evaluations and a Corrective Action Development Plan were approved by ADEM in 2018, opening the ~~site. Under the direction~~way for pilot testing of ~~the ADEM, approximately $5,900 was~~on-site remediation in late 2019. Pilot testing is currently underway with annual application of bioremediation reagents, semi-annual groundwater monitoring, as well as data collection to direct future bioremediation injections. Approximately $8.2 million has been spent to ~~date. The pace of the ongoing remedial investigations, project management,~~date, and ~~regulatory oversight is likely to increase somewhat and, though the complete scope of the activities is not yet known,~~ the company currently ~~estimates~~anticipates no additional ~~investigative and related expenditures at the site~~investigative-related expenditures. The cost of ~~approximately $300 to $600. The nature and scope of both feasibility studies and~~ subsequent remediation at the site ~~has not yet been determined, but assuming the outcome includes source control and certain other measures, the cost~~ is estimated to be between ~~$4,400~~$2.1 million and ~~$10,000.~~$10.0 million.

Despite the amount of work undertaken and planned to date, the company is unable to estimate any potential costs in addition to those discussed above, because the complete scope of the work is not yet known, and, accordingly, the associated costs have yet to be determined.

Ind e x

ARROW ELECTRONICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~(Dollars in thousands except per share data)~~(Unaudited)

~~(Unaudited)~~

Environmental Matters - Norco

In October 2003, the company entered into a consent decree with Wyle Laboratories and the California Department of Toxic Substance Control ~~(the "DTSC"~~(“DTSC”) in connection with the Norco ~~site. In April 2005,~~Site. Subsequent to the decree, a Remedial Investigation Work Plan was approved by DTSC ~~that provided for site-wide characterization of known~~in April 2005, the required investigations were performed, and ~~potential environmental issues. Investigations performed in connection with this work plan and a series of subsequent technical memoranda continued until the filing of~~ a final Remedial Investigation Report was submitted early in 2008. ~~Work is under way pertaining to the remediation of contaminated groundwater at certain areas on the Norco site and of soil gas in a limited area immediately adjacent to the site.~~ In 2008, a hydraulic containment system (“HCS”) was installed as an interim remedial measure to capture and treat groundwater before it moves into the adjacent ~~offsite~~off-site area. In September 2013, the DTSC approved the final Remedial Action Plan ~~("RAP"~~(“RAP”) for actions in five on-site areas and ~~work is currently progressing under~~one off-site area. As of 2018, the ~~RAP. The approval~~remediation measures described in the RAP had been implemented and were being monitored. A Five Year Review (“FYR”) of the ~~RAP includes the potential for additional~~HCS submitted to DTSC in December 2016 found that while significant progress was made in on-site and off-site groundwater remediation, ~~action after the five year review of the hydraulic containment system if the review finds that~~ contaminants ~~have~~were not ~~been~~ sufficiently reduced in a key off-site area identified in the ~~offsite area.~~RAP. This exception triggered the need for additional off-site remediation that began in 2018 and was completed in mid-2019. Routine progress monitoring of groundwater and soil gas continue on-site and off-site.

Approximately ~~$55,800~~$81.0 million was spent to date on remediation, project management, regulatory oversight, and investigative and feasibility study activities. The company currently estimates that ~~these~~remediation, project management, regulatory oversight, and investigative activities will continue and give rise to an additional ~~$19,000~~$6.0 million to ~~$29,800.~~$17.0 million in costs. Project management and regulatory oversight include costs incurred by project consultants for project management and costs billed by DTSC to provide regulatory oversight.

Despite the amount of work undertaken and planned to date, the company is unable to estimate any potential costs in addition to those discussed above because the complete scope of the work under the RAP is not yet known, and, accordingly, the associated costs have yet to be determined.

Other

From time to time, in the normal course of business, the company may become liable with respect to other pending and threatened litigation, environmental, regulatory, labor, product, and tax matters. While such matters are subject to inherent uncertainties, it is not currently anticipated that any such matters will materially impact the ~~company's~~company’s consolidated financial position, liquidity, or results of operations.

Note ML – Segment and Geographic Information

The company is a global provider of products, services, and solutions to industrial and commercial users of electronic components and enterprise computing solutions. The company has one of the world's broadest portfolios of product offerings available from leading electronic components and enterprise computing solutions suppliers, coupled with a range of services, solutions and tools that enables its suppliers to distribute their technologies and help its industrial and commercial customers to source, build upon, and leverage these technologies to grow their businesses, reduce their time to market, and enhance their overall competitiveness. The company is a trusted partner in a complex value chain and is uniquely positioned through its electronics components and IT content portfolios to increase value for stakeholders.

The company has two business segments, the global components business segment and the global enterprise computing solutions (“ECS”) business segment. The company's global components business segment, enabled by a comprehensive range of value-added capabilities and services, markets and distributes electronic components to original equipment manufacturers ("OEMs") and contract manufacturers ~~through its global components business segment and provides enterprise computing solutions to value-added resellers through its~~("CMs"). The company's global ECS business ~~segment.~~segment is a leading value-added provider of comprehensive computing solutions and services. Global ECS' portfolio of computing solutions includes datacenter, cloud, security, and analytics solutions. Global ECS brings broad market access, extensive supplier relationships, scale, and resources to help its value-added resellers ("VARs") and managed service providers ("MSPs") meet the needs of their end-users. As a result of the company's philosophy of maximizing operating efficiencies through the centralization of certain functions, selected fixed assets and related depreciation, as well as borrowings, are not directly attributable to the individual operating segments and are included in the corporate business segment.

~~Sales and operating income (loss), by segment, are as follows:~~

Quarter Ended Nine Months Ended
September 30,
2017 October 1,
2016 September 30,
2017 October 1,
2016
Sales:
Global components $ 4,864,361
$ 3,904,447
$ 13,385,514
$ 11,413,348
Global ECS 2,089,379
2,031,645
5,793,124
5,969,022
Consolidated $ 6,953,740
$ 5,936,092
$ 19,178,638
$ 17,382,370
Operating income (loss):

Global components $ 212,993
$ 175,507
$ 583,690
$ 524,662
Global ECS 94,797
96,181
282,379
283,792
Corporate (a) (71,798 ) (73,004 ) (208,533 ) (204,814 )
Consolidated $ 235,992
$ 198,684
$ 657,536
$ 603,640

Ind e x

ARROW ELECTRONICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~(Dollars in thousands except per share data)~~(Unaudited)

~~(Unaudited)~~


~~(a)~~	Includes restructuring, integration, and other charges of $15,896 and $55,817 for the third quarter and first nine months of 2017 and $24,267 and $61,161 for the third quarter and first nine months of 2016, respectively.

~~Total assets,~~Sales, by segment ~~are as follows:~~

September 30,
2017 December 31,
2016
Global components $ 9,674,716
$ 8,360,926
Global ECS 4,590,887
5,053,172
Corporate 791,363
792,268
Consolidated $ 15,056,966
$ 14,206,366

~~Sales,~~ by geographic area, are as follows:


	Quarter Ended
(thousands)	April 1, 2023		April 2, 2022
Components:
Americas	$	2,233,453	$	2,340,543
EMEA	2,246,145		1,927,003
Asia/Pacific	2,376,195		2,931,529
Global components	$	6,855,793	$	7,199,075

ECS:
Americas	$	998,114	$	1,047,849
EMEA	882,521		827,201
Global ECS	$	1,880,635	$	1,875,050
Consolidated	$	8,736,428	$	9,074,125

Quarter Ended Nine Months Ended
September 30,
2017 October 1,
2016 September 30,
2017 October 1,
2016
Americas (b) $ 3,217,537
$ 2,897,810
$ 8,829,813
$ 8,327,845
EMEA (c) 1,886,440
1,548,067
5,406,330
4,990,973
Asia/Pacific 1,849,763
1,490,215
4,942,495
4,063,552
Consolidated $ 6,953,740
$ 5,936,092
$ 19,178,638
$ 17,382,370


~~(b)~~	Includes sales related to the United States of $2,959,857 and $8,060,819 for the third quarter and first nine months of 2017 and $2,677,954 and $7,665,313 for the third quarter and first nine months of 2016, respectively.


~~(c)~~	~~Defined as Europe, the Middle East, and Africa.~~

~~Net property, plant, and equipment,~~Operating income (loss), by ~~geographic area, is~~segment, are as follows:


	Quarter Ended
(thousands)	April 1, 2023		April 2, 2022
Operating income (loss):
Global components	$	417,539	$	499,342
Global ECS	81,099		85,798
Corporate (a)	(76,486)		(74,764)
Consolidated	$	422,152	$	510,376

September 30,
2017 December 31,
2016
Americas (d) $ 671,668
$ 631,386
EMEA 104,028
90,834
Asia/Pacific 39,683
34,079
Consolidated $ 815,379
$ 756,299


~~(d)~~	~~Includes net property, plant, and equipment related to the United States of $666,511 and $626,964 at September 30, 2017 and December 31, 2016, respectively.~~

~~Note N – Subsequent Event~~

~~In October 2017,~~(a)Corporate operating income (loss) includes restructuring, integration, and other charges of $2.6 million and $4.9 million for the company entered into a settlement for a portion of its Wyle defined benefit plan. Participants will receive benefits through an insurance annuity contract. The company expects to recognize a settlement expense during the fourthfirst quarter of ~~2017.~~2023 and 2022, respectively.

Index


~~Item 2.~~	~~Management's Discussion and Analysis of Financial Condition and Results of Operations~~

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Information Relating to Forward-Looking Statements

This report includes "forward-looking statements," as the term is defined under the federal securities laws. 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. 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: unfavorable economic conditions; disruptions or inefficiencies in the supply chain, including any potential adverse effects of the ongoing global COVID-19 pandemic; political instability; impacts of military conflict, including 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; the effects of natural or man-made catastrophic events; 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 this 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 discloses certain non-GAAP financial information, including:

•Non-GAAP sales and non-GAAP gross profit (referred to as "sales on a constant currency basis" and "gross profit on a constant currency basis") excludes the impact of changes in foreign currencies by retranslating prior period results at current period foreign exchange rates.

•Non-GAAP operating expenses excludes restructuring, integration, and other charges, identifiable intangible asset amortization and the impact of changes in foreign currencies.

•Non-GAAP operating income excludes identifiable intangible asset amortization, and restructuring, integration, and other charges.

•Non-GAAP effective tax rate and non-GAAP net income attributable to shareholders exclude identifiable intangible asset amortization, restructuring, integration, and other charges, and gains on investments, net.

For a discussion of what is included within "Restructuring, integration, and other charges" and "Gains on investments, net" refer to the similarly captioned sections of this item below. 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-term 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, and in conjunction with, data presented in accordance with GAAP. Reconciliations of non-GAAP financial measures to the most directly comparable reported GAAP financial measures are included within this MD&A.

Overview

~~Arrow Electronics, Inc. (the "company")~~The company is a global provider of products, services, and solutions to industrial and commercial users of electronic components and enterprise computing solutions. The company has one of the ~~world’s~~world's broadest portfolios of product offerings available from leading electronic components and enterprise computing solutions suppliers, coupled with a range of services, solutions and tools that enables its suppliers to distribute their technologies and help its industrial and commercial customers ~~introduce innovative products,~~to source, build upon, and leverage these technologies to grow their businesses, reduce their time to market, and enhance their overall competitiveness. The company is a trusted partner in a complex value chain and is uniquely positioned through its electronics components and IT content portfolios to increase value for stakeholders. The company has two business segments, the global components business segment and the global ~~enterprise computing solutions ("ECS")~~ECS business segment. The ~~company~~company's global components business segment, enabled by a comprehensive range of value-added capabilities and services, markets and distributes electronic components to original equipment manufacturers

Index

("OEMs") and contract manufacturers ~~through its global components business segment and provides enterprise computing solutions to value-added resellers through its~~("CMs"). The company's global ECS business ~~segment.~~segment is a leading value-added provider of comprehensive computing solutions and services. Global ECS' portfolio of computing solutions includes datacenter, cloud, security, and analytics solutions. Global ECS brings broad market access, extensive supplier relationships, scale, and resources to help its value-added resellers ("VARs") and managed service providers ("MSPs") meet the needs of their end-users. For the first ~~nine months~~quarter of ~~2017,~~2023, approximately ~~70%~~78% and 22% of the ~~company's~~company’s sales were from the global components business ~~segment~~ and ~~approximately 30% of the company's sales were from~~ the global ECS business, ~~segment.~~respectively.

The company's strategic initiatives include the following:

•Offering a variety of value-added demand creation services in the global components business, including design, engineering, global marketing and integration services to promote the future sale of suppliers’ products, which generally lead to longer and more profitable relationships with its suppliers and customers.

•Continuing to develop global supply chain service offerings such as procurement, logistics, warehousing, and insights from data analytics.

•Enabling customer cloud solutions through the global ECS business' cloud marketplace and management platform, ArrowSphere, which helps VARs and MSPs to manage, differentiate, and scale their cloud businesses while providing the business intelligence that IT solution providers need to drive growth.

The company's financial objectives are to grow sales faster than the market, increase the markets served, grow profits faster than sales, generate earnings per share growth in excess of competitors’ earnings per share growth and market expectations, grow earnings per share at a rate that provides the capital necessary to support the company’s business strategy, allocate and deploy capital effectively so that return on invested capital exceeds the company’s cost of capital, and increase return on invested capital. To achieve its objectives, the company seeks to capture significant opportunities to grow across products, markets, and geographies. To supplement its organic growth strategy, the company continually evaluates strategic acquisitions to broaden its product and value-added service offerings, increase its market penetration, ~~and/or~~and expand its geographic reach.

Executive Summary

Consolidated sales for the ~~third~~first quarter ~~and first nine months~~ of ~~2017 increased~~2023 decreased by ~~17.1% and 10.3%~~3.7%, ~~respectively,~~ compared with the year-earlier period. The ~~increase~~decrease for the ~~third~~first quarter of ~~2017~~2023 was driven by ~~an increase~~a 4.8% decrease in the global components business segment ~~sales of 24.6% and an increase in the~~sales. The global ECS business segment sales ~~of 2.8%. The increase~~were flat compared with the year-earlier period. Consolidated sales on a constant currency basis decreased 1.5% for the first ~~nine months~~quarter of 2017 was driven by an increase in the global components business segment sales of 17.3% offset by a decrease in the global ECS business segment sales of 2.9%. Adjusted for the change in foreign currencies and acquisitions, consolidated sales increased 15.5% and 10.3% for the third quarter and first nine months, respectively, of 20172023 compared with the year-earlier period.

~~Net~~The company reported net income attributable to shareholders ~~increased to $134.6 million and decreased to $348.1~~of $273.8 million in the ~~third~~first quarter ~~and first nine months~~ of ~~2017, respectively,~~2023 compared ~~to $117.7 million and $358.2~~with $364.7 million in the year-earlier ~~periods. The following items impacted the comparability of the company's results:~~

~~Thirdquarters of2017 and 2016:~~

~~loss on extinguishment of debt of $0.8 million in 2017;~~

~~restructuring, integration, and other charges of $15.9 million in 2017 and $24.3 million in 2016;~~

~~identifiable intangible asset amortization of $12.6 million in 2017 and $13.9 million in 2016; and~~

~~loss on investment, net, of $15.0 million in 2017~~

~~First nine months~~of~~2017 and 2016:~~

~~loss on extinguishment of debt of $59.5 million in 2017;~~

~~restructuring, integration, and other charges of $55.8 million in 2017 and $61.2 million in 2016;~~

~~identifiable intangible asset amortization of $37.9 million in 2017 and $41.3 million in 2016; and~~

~~loss on investment,net, of $14.3 million in 2017~~

~~Excluding the aforementioned items,~~period. Non-GAAP net income attributable to shareholders for the ~~third~~first quarter ~~and first nine months~~ of ~~2017 increased to $162.9~~2023 was $273.6 million, ~~and $455.3 million, respectively,~~ compared with ~~$143.1 million and $428.1~~$373.5 million in the year-earlier ~~periods.~~period. Non-GAAP net income attributable to shareholders is adjusted for the following items:

First quarters of 2023 and 2022:

~~Certain Non-GAAP Financial Information~~

•restructuring, integration, and other charges of $2.6 million in 2023 and $4.9 million in 2022;

~~In addition~~•identifiable intangible asset amortization of $8.0 million in 2023 and $9.0 million in 2022; and

•net gain on investments of $10.3 million in 2023 and $2.0 million in 2022.

During the first quarter of 2023, changes in foreign currencies reduced sales by approximately $202.8 million, operating income by $11.7 million and earnings per share on a diluted basis by $0.13 compared to ~~disclosing financial results~~the first quarter of 2022.

Significant trends impacting the business:

Below is a discussion of significant trends impacting the business. See discussion regarding the impacts of these and other risks included in Item 1A, Risk Factors, within the company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022.

Supply chain constraints and components shortages

Shortage market conditions began normalizing during the third quarter of 2022 and have continued to do so during the first quarter of 2023. While prices for many products have remained elevated, prices for products that ~~are determined~~were most severely impacted by shortage market conditions have decreased, bringing profit margins on these products more in ~~accordance~~line with ~~accounting principles generally accepted~~historic norms as supply improves.

Index

•Supply chain constraints and shortages in electronics components markets have significantly impacted the company’s global operations through rapid price changes, extended lead times, unpredictability in supply, and constantly changing supply and demand imbalances.

•During 2022, the company’s global components business segment reported record sales and profitability primarily due to rising prices and growth in value-added services.

•During the first quarter of 2023, operating margins in the ~~United States ("GAAP"),~~global components business decreased 80 bps relative to the year-earlier period, and decreased 40 bps relative to the fourth quarter of 2022.

•While there is ongoing uncertainty, management currently expects long-term profitability will remain above its historic levels after the remaining shortage market conditions resolve.

Constraints in supply were a headwind for growth in the company’s global ECS business throughout 2022, particularly for hardware sales and large, complex IT projects that rely on hardware. The company believes the backlog of demand for these products and services remains an opportunity for this business as supply improves.

Due to the evolving nature and uncertainty of the impacts discussed above, the company ~~also discloses certain non-GAAP~~believes the results and financial ~~information, including:~~condition discussed for the periods presented herein may not be indicative of future operating results and trends. Management is actively monitoring the impact of changes in supply and demand, as well as supply chain logistical issues, including impacts related to COVID-19, on its financial condition, liquidity, operations, suppliers, customers, industry, and workforce. The extent to which these issues will continue to impact the company’s results will depend primarily on future developments, including the severity and duration of the current conditions, and the impact of actions taken and that will be taken to address supply chain constraints and continued changes in customer demand, among others. These future developments are highly uncertain and cannot be predicted with confidence.

~~Sales, income, or expense items~~Impacts of changing foreign currency exchange rates

As a large global organization, the company’s consolidated results of operations and financial position are impacted by changes in foreign currency exchange rates through the translation of the company's international financial statements into U.S. dollars. The company's non-U.S. dollar results of operations are negatively impacted during periods when the U.S. dollar strengthens and positively impacted during periods when the U.S. dollar weakens. During the first quarter of 2023, the U.S. dollar strengthened against most other currencies, relative to the first quarter of 2022, and as ~~adjusted for~~a result, changes in foreign currencies reduced earnings per share on a diluted basis by $0.13. During the first quarter of 2023, the impact of changes in foreign currencies ~~(referred~~related mainly to ~~as "impact of~~the Euro, Chinese Renminbi, Japanese Yen, and British Pound. These exposures may change over time and changes in foreign ~~currencies") and~~currency exchange rates could materially impact the ~~impact of acquisitions by adjusting~~company’s financial results in 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");future.

~~Operating income as adjusted to exclude identifiable intangible asset amortization and restructuring, integration, and other charges; and~~

Net income attributable to shareholders as adjusted to exclude identifiable intangible asset amortization, restructuring, integration, loss on extinguishment of debt, loss on investment, and other charges.

Management believes that providing this additional information is useful to the reader to better assess and understand the company's operating performance, especially when comparing results with previous periods, primarily because management typically monitors the business adjusted for these items in addition to GAAP results. However, analysis of results on a non-GAAP basis should be used as a complement to, and in conjunction with, data presented in accordance with GAAP.

Sales

Substantially all of the ~~company's~~company’s sales are made on an order-by-order basis, rather than through long-term sales contracts. As such, the nature of the ~~company's~~company’s business does not provide for the visibility of material forward-looking information from its customers and suppliers beyond a few months.

Following is an analysis of consolidated net sales, ~~by reportable segment (in millions):~~

Quarter Ended Nine Months Ended
September 30,
2017 October 1,
2016
%
Change
September 30,
2017 October 1,
2016
%
Change
Consolidated sales, as reported $ 6,954
$ 5,936
17.1 % $ 19,179
$ 17,382
10.3 %
Impact of changes in foreign currencies —
83
—
(47 )
Impact of acquisitions —
1
—
48

Consolidated sales, as adjusted $ 6,954
$ 6,020
15.5 % $ 19,179
$ 17,383
10.3 %

Global components sales, as reported $ 4,864
$ 3,904
24.6 % $ 13,386
$ 11,413
17.3 %
Impact of changes in foreign currencies —
56
—
(13 )
Impact of acquisitions —
1
—
10

Global components sales, as adjusted $ 4,864
$ 3,961
22.8 % $ 13,386
$ 11,410
17.3 %

Global ECS sales, as reported $ 2,089
$ 2,032
2.8 % $ 5,793
$ 5,969
(2.9 )%
Impact of changes in foreign currencies —
27
—
(34 )
Impact of acquisitions —
—
—
38

Global ECS sales, as adjusted $ 2,089
$ 2,059
1.5 % $ 5,793
$ 5,973
(3.0 )%

~~Consolidated~~and net sales for the third quarter and first nine months of 2017 increased by $1.02 billion, or 17.1%, and $1.80 billion, or 10.3%, respectively, compared with the year-earlier period. The increase for the third quarter of 2017 was driven by an increase in global componentscompany's two business segment sales of $959.9 million, or 24.6%, and an increase in global ECS business segment sales of $57.7 million, or 2.8%. The increase for the first nine months of 2017 was driven by an increase in global components business segment sales of $1.97 billion, or 17.3%, offset by a decrease in global ECS business segment sales of $175.9 million, or 2.9%. Adjusted for the impact of changes in foreign currencies and acquisitions, consolidated sales increased 15.5% and 10.3% for the third quarter and first nine months of 2017, respectively, compared with the year-earlier periods.segments:


	Quarter Ended
(millions)	April 1, 2023		April 2, 2022		% Change
Consolidated sales, as reported	$	8,736	$	9,074	(3.7)%
Impact of changes in foreign currencies	—		(203)


Consolidated sales, constant currency	$	8,736	$	8,871	(1.5)%

Global components sales, as reported	$	6,856	$	7,199	(4.8)%
Impact of changes in foreign currencies	—		(146)


Global components sales, constant currency	$	6,856	$	7,053	(2.8)%

Global ECS sales, as reported	$	1,881	$	1,875	flat
Impact of changes in foreign currencies	—		(57)


Global ECS sales, constant currency	$	1,881	$	1,818	3.4%

In the global components business segment, sales for the third quarter and first nine months of 2017 increased $959.9 million, or 24.6%, and $1.97 billion, or 17.3%, respectively, compared with the year-earlier periods, with over 20% sales growth across all regions for the third quarter of 2017. The increase for the third quarter and the first nine months is attributable to suppliers awarding additional business to the company. Adjusted for the impact of changes in foreign currencies and acquisitions, the company's global components business segment sales increased by 22.8% and 17.3% for the third quarter and first nine months of 2017, respectively, compared with the year-earlier periods.

In the global ECS business segment, sales for the third quarter and first nine months of 2017 increased $57.7 million, or 2.8%, and decreased $175.9 million, or 2.9%, respectively, compared with the year-earlier period. The increase for third quarter sales relates primarily to the increased demand in the EMEA region. The decrease for first nine months relates primarily to decreased demand in the Americas regions. Adjusted for the impact of changes in foreign currencies and acquisitions, the company's global ECS business segment sales increased 1.5% and decreased 3.0% for the third quarter and first nine months of 2017, respectively, compared with year-earlier periods.

~~Gross Profit~~

~~Following is an analysis of gross profit (in millions):~~

Quarter Ended Nine Months Ended
September 30,
2017 October 1,
2016 % Change September 30,
2017 October 1,
2016 % Change
Consolidated gross profit, as reported $ 843
$ 773
9.1 % $ 2,427
$ 2,321
4.6 %
Impact of changes in foreign currencies —
12
—
(9 )
Impact of acquisitions —
1
—
13

Consolidated gross profit, as adjusted $ 843
$ 786
7.3 % $ 2,427
$ 2,325
4.4 %
Consolidated gross profit as a percentage of sales, as reported 12.1 % 13.0 % (90) bps
12.7 % 13.4 % (70) bps
Consolidated gross profit as a percentage of sales, as adjusted 12.1 % 13.1 % (100) bps
12.7 % 13.4 % (70) bps

The company recorded gross profit of $843.4 million and $2.43 billion in the third quarter and first nine months of 2017, respectively, compared with $773.2 million and $2.32 billion in the year-earlier periods. The increase in gross profit was primarily due to increased demand and supplier awards in the components business. Gross profit margins in the third quarter and first nine months of 2017 decreased by approximately 90 bps and 70 bps, respectively, compared with the year-earlier periods primarily due to an increase in lower margin distribution services.

~~Selling, General, and Administrative Expenses and Depreciation and Amortization~~

~~Following is an analysis of operating expenses (in millions):~~

Quarter Ended Nine Months Ended
September 30,
2017
October 1,
2016
%
Change
September 30,
2017 October 1,
2016
%
Change
Selling, general, and administrative expenses, as reported $ 553
$ 510
8.4 % $ 1,601
$ 1,535
4.3 %
Depreciation and amortization, as reported 39
40
(4.0 )% 113
122
(6.9 )%
Operating expenses, as reported* 591

550
7.5 % 1,714
1,656
3.5 %
Impact of changes in foreign currencies —
8
—
(7 )
Impact of acquisitions —
1
—
9

Operating expenses, as adjusted* $ 591
$ 559
5.8 % $ 1,714
$ 1,658
3.4 %
Operating expenses as a percentage of sales, as reported 8.5 % 9.3 % (80) bps 8.9 % 9.5 % (60) bps
Operating expenses as a percentage of sales, as adjusted 8.5 % 9.3 % (80) bps
8.9 % 9.5 % (60) bps

* The sum of the components for ~~consolidated operating expenses~~sales, as reported, and ~~as adjusted~~sales on a constant currency basis may not agree to totals, as presented, due to rounding.

~~Selling, general,~~

Index

First quarter 2023 global components sales decreased compared to the year-earlier period primarily due to lower demand in certain markets and ~~administrative expenses increased by $42.9 million, or 8.4%, and $66.2 million, or 4.3%,~~continued normalization of shortage market activity (see discussion above). Sales in the ~~third~~Asia/Pacific region decreased 18.9% due to softer demand and lower volumes in most verticals, and sales in the Americas region decreased by 4.6% mainly due to normalization of shortage market conditions. This was partially offset by 16.6% growth in sales for the EMEA region due to an increase in most major verticals, particularly industrial and defense.

Sales from the global ECS business remained flat in the first quarter of 2023 relative to the year-earlier period. Sales in the EMEA region grew by 6.7% due to strong demand in all technology categories, particularly software, and ~~first nine months~~helped by improved supply in hardware. These results were largely offset by a 4.8% decrease in sales in the Americas region due to softer demand across most technologies.

Gross Profit

Following is an analysis of ~~2017, respectively,~~the company's consolidated gross profit:


	Quarter Ended
(millions)	April 1, 2023			April 2, 2022			% Change
Gross profit, as reported	$	1,114		$	1,208		(7.8)%
Impact of changes in foreign currencies	—			(27)



Gross profit, constant currency	$	1,114		$	1,181		(5.7)%
Gross profit as a percentage of sales, as reported	12.7		%	13.3		%	(60) bps
Gross profit as a percentage of sales, constant currency	12.7		%	13.3		%	(60) bps

The sum of the components for gross profit on a ~~sales increase~~constant currency basis may not agree to totals, as presented, due to rounding.

The decrease in gross profit margins during the first quarter of ~~17.1% and 10.3%~~2023, compared with the year-earlier ~~periods. Selling, general,~~period, related primarily to normalization of shortage market conditions in the Americas region of the global components business. The decrease was partially offset by higher margins in the EMEA region of both the global components and ~~administrative~~global ECS businesses due to product mix shifting towards higher margin products. Global components supply chain services offerings continued to have a positive impact on gross margins.

Operating Expenses

Following is an analysis of the company's consolidated operating expenses:


	Quarter Ended
(millions)	April 1, 2023			April 2, 2022			% Change
Operating expenses, as reported	$	692		$	697		(0.8)%
Identifiable intangible asset amortization	(8)			(9)
Restructuring, integration, and other charges	(3)			(5)
Impact of changes in foreign currencies	—			(15)
Non-GAAP operating expenses	$	681		$	668		1.9%
Operating expenses as a percentage of sales	7.9		%	7.7		%	20 bps
Non-GAAP operating expenses as a percentage of sales, constant currency	7.8		%	7.5		%	30 bps

The sum of the components for non-GAAP operating expenses may not agree to totals, as presented, due to rounding.

The increase in operating expense as a percentage of sales ~~were 8.0% and 8.3% for the third quarter and first nine months of 2017, respectively, compared with 8.6% and 8.8%~~ in the ~~year-earlier periods.~~

~~Depreciation and amortization expense as a percentage~~first quarter of operating expenses was 6.5% and 6.6% for the third quarter and first nine months of 2017, respectively, compared with 7.3% in both of the prior year periods. Included in depreciation and amortization expense is identifiable intangible asset amortization of $12.6 million and $37.9 million for the third quarter and first nine months of 2017, respectively, compared2023, relative to ~~$13.9 million and $41.3 million in~~ the year-earlier ~~periods.~~period, relates primarily to lower operating leverage when sales are lower.

Adjusted for the impact of changes in foreign currencies and acquisitions, operating expenses increased 5.8% and 3.4% for the third quarter and first nine months of 2017, respectively, compared with the year-earlier periods.

Index

Restructuring, Integration, and Other Charges

Restructuring initiatives ~~relate~~and integration costs are due to the company's continued efforts to lower ~~cost and~~costs, drive operational ~~efficiency.Integration costs are primarily related to the integration of~~efficiency, integrate acquired businesses, ~~within the company's pre-existing business~~ and ~~the consolidation of~~consolidate certain ~~operations.~~

~~2017~~ ~~Charges~~

operations, as necessary. The company recorded restructuring, integration, and other charges of ~~$15.9~~$2.6 million and ~~$55.8~~$4.9 million for the ~~third~~first quarter of 2023 and ~~first nine months of 2017,~~2022, respectively. For the third quarter and first nine months of 2017, restructuring and integration charges of $12.1 million and $34.3 million, respectively, related to initiatives taken by the company during 2017 to improve operating efficiencies and $0.6 million and $4.6 million, respectively, of acquisition-related expenses. In the third quarter and first nine months of 2017, the company recorded a net loss on real estate transactions of $0.3 million and $3.1 million, respectively, and incurred an additional expense of $0.1 million and $2.0 million, respectively, to increase its accrual for the Wyle environmental obligation.

~~The restructuring and integration charge of $12.1 million and $34.3 million for the third quarter and first nine months of 2017,~~

respectively, includes personnel costs of $10.4 million and $29.0 million. Also included therein for both the third quarter and first nine months of 2017, respectively, are facilities costs of $1.3 million and $4.2 million and other costs of $0.4 million and $1.0 million.

~~2016~~ ~~Charges~~

The company recorded restructuring, integration, and other charges of $24.3 million and $61.2 million for the third quarter and first nine months of 2016, respectively. For the third quarter and first nine months of 2016, restructuring and integration charges of $12.0 million and $22.1 million, respectively, related to initiatives taken by the company to improve operating efficiencies. For the first nine months of 2016, the company recorded a fraud loss, net of insurance recoveries, of $4.4 million. Also included in the third quarter and first nine months of 2016 are acquisition-related expenses of $2.7 million and $7.6 million, respectively, and a pension settlement charge of $12.2 million for both the third quarter and first nine months of 2016. In the third quarter and first nine months of 2016, the company released a $2.4 million legal reserve related to the Tekelec Matter and incurred an additional expense of $11.7 million to increase its accrual for the Wyle environmental obligation.

The restructuring and integration charge of $12.0 million and $22.1 million for the third quarter and first nine months of 2016, respectively, includes personnel costs of $10.5 million and $18.0 million. Also included therein for both the third quarter and first nine months of 2016 are facilities costs of $0.7 million and $3.2 million, and other costs of $0.9 million and $1.0 million, respectively.

As of ~~September 30, 2017,~~April 1, 2023, the company does not anticipate there will be any material adjustments relating to the aforementioned restructuring and integration plans.

Operating Income

Following is an analysis of the company's consolidated operating income, and operating income for the company's two business segments:


	Quarter Ended
(millions)	April 1, 2023			April 2, 2022			% Change
Consolidated operating income, as reported	$	422		$	510		(17.3)%
Identifiable intangible asset amortization	8			9
Restructuring, integration, and other charges	3			5
Non-GAAP consolidated operating income	$	433		$	524		(17.5)%
Consolidated operating income as a percentage of sales	4.8		%	5.6		%	(80) bps
Non-GAAP consolidated operating income as a percentage of sales	5.0		%	5.8		%	(80) bps

Global components operating income, as reported	$	418		$	499		(16.4)%
Identifiable intangible asset amortization	7			7

Non-GAAP global components operating income	$	424		$	506		(16.2)%
Global components operating income as a percentage of sales	6.1		%	6.9		%	(80) bps
Non-GAAP global components operating income as a percentage of sales	6.2		%	7.0		%	(80) bps

Global ECS operating income, as reported	$	81		$	86		(5.5)%
Identifiable intangible asset amortization	1			2

Non-GAAP global ECS operating income	$	82		$	88		(6.4)%
Global ECS operating income as a percentage of sales	4.3		%	4.6		%	(30) bps
Non-GAAP global ECS operating income as a percentage of sales	4.4		%	4.7		%	(30) bps

The sum of the components of consolidated operating income do not agree to totals, as presented, due to operating income for the corporate segment not included in the table above. Refer to Note ~~I, "Restructuring, Integration,~~L "Segment and ~~Other Charges,"~~Geographic Information” of the Notes to the Consolidated Financial Statements for further ~~discussion of the company's restructuring and integration activities.~~discussion.

~~Operating Income~~

~~Following is an analysis of~~The decrease in operating income ~~(in millions):~~

Quarter Ended Nine Months Ended
September 30,
2017
October 1,
2016
%
Change
September 30,
2017 October 1,
2016 %
Change
Consolidated operating income, as reported $ 236
$ 199
18.8 % $ 658
$ 604
8.9 %
Identifiable intangible asset amortization 13
14
38
41

Restructuring, integration, and other charges 16
24
56
61

Consolidated operating income, as adjusted* $ 265
$ 237
11.7 % $ 751
$ 706
6.4 %
Consolidated operating income as a percentage of sales, as reported 3.4 % 3.3 % 10 bps
3.4 % 3.5 % (10) bps
Consolidated operating income, as adjusted, as a percentage of sales, as reported 3.8 % 4.0 % (20) bps
3.9 % 4.1 % (20) bps

* The sum of the components for consolidated operating income, as adjusted, may not agree to totals, as presented, due to rounding.

The company recorded operating income of $236.0 million, or 3.4% of sales, and $657.5 million, or 3.4% of sales, in the third quarter and first nine months of 2017, respectively, compared with operating income of $198.7 million, or 3.3% of sales, and $603.6 million, or 3.5% of sales, in the year-earlier periods. Excluding identifiable intangible asset amortization and restructuring, integration, and other charges, operating income, as adjusted, was $264.5 million, or 3.8% of sales, and $751.3 million, or 3.9% of sales, in the third quarter and first nine months of 2017, respectively, compared with operating income, as adjusted, of $236.8 million, or 4.0% of sales, and $706.1 million, or 4.1% of sales, in the year-earlier periods. Operating income, as adjusted, increased 11.7% and 6.4 % for the third quarter and first nine months of 2017, respectively, compared with the year-earlier periods, on a sales increase of 17.1% and 10.3%, respectively, compared with the year-earlier periods. Operating income, as adjusted as a percentage of sales ~~decreased 20 bps~~ for ~~both~~first quarter of 2023 relates primarily to decreases in gross profit margins discussed above. During the ~~third~~first quarter ~~and first nine months~~ of ~~2017, respectively,~~2023, changes in foreign currencies reduced operating income by $11.7 million when compared ~~with~~to the year-earlier ~~periods, due~~period.

Gain on Investments, Net

During the first quarter of 2023 and 2022, the company recorded a gain of $10.3 million and $2.0 million, respectively, which are primarily related to ~~increased sales~~changes in ~~low margin global components businesses~~fair value of assets related to the Arrow SERP pension plan, which consist primarily of life insurance policies and ~~decreased demand~~mutual fund assets, as well as changes in the ~~global ECS business, largely offset by~~fair value of the company's ~~ability~~investment in Marubun Corporation, refer to ~~efficiently manage operating costs.~~Note H "Financial Instruments Measured at Fair Value".

Interest and Other Financing Expense, Net

The company recorded net interest and other financing expense of ~~$39.7 million and $120.2~~$79.7 million for the ~~third~~first quarter ~~and first nine months~~ of ~~2017, respectively,~~2023 compared with ~~$37.2 million and $111.8~~$34.0 million in the year-earlier ~~periods.~~period. The increase for the

~~third~~ first quarter ~~and first nine months~~ of ~~2017 was~~2023 primarily ~~due~~relates to higher ~~average debt outstanding and an increase in variable~~ interest rates ~~offset partially by increased interest income.~~on outstanding borrowings and floating rate credit facilities, and higher average daily borrowings. Refer to the section below titled "Liquidity and Capital Resources" for more information on changes in borrowings.

Index

~~Other~~

~~During the third quarter and first nine months of 2017, the company recorded a loss on investment of $15.0 million related to a full impairment of a cost method investment.~~

Income Tax

Income taxes for the interim periods presented have been included in the accompanying consolidated financial statements on the basis of an estimated annual effective tax rate. The determination of the consolidated provision for income taxes requires management to make certain judgments and estimates. Changes in the estimated level of annual pre-tax earnings, tax laws, and changes resulting from tax audits can affect the overall effective income tax rate, which impacts the level of income tax expense and net income. Judgments and estimates related to the company’s projections and assumptions are inherently ~~uncertain;~~uncertain, therefore, actual results could differ from projections.

~~For~~Following is an analysis of the ~~third quarter and first nine months~~company's consolidated effective income tax rate:


	Quarter Ended
	April 1, 2023		April 2, 2022
Effective income tax rate	21.8	%	23.5	%
Identifiable intangible asset amortization	0.1	%	—	%
Restructuring, integration, and other charges	0.1	%	—	%
Gain on investments, net	(0.1)	%	—	%





Non-GAAP effective income tax rate	21.8	%	23.5	%

The sum of ~~2017,~~ the ~~company recorded a provision~~components for non-GAAP effective income ~~taxes of $46.2 million, an effective~~ tax rate of 25.4%, and $115.0 million, an effective tax rate of 24.7%, respectively. The company's provision for income taxes and effective tax rate for the third quarter and first nine months of 2017 were impacted by the previously discussed restructuring, integration, and other charges including, among other things, identifiable intangible asset amortization, loss on extinguishment of debt, and loss on sale of investment. Excluding the impact of the aforementioned items, the company's effective tax rate for the third quarter and first nine months of 2017 was 27.5% and 27.6%, respectively. may not agree to totals, as presented, due to rounding.

For the third quarter and first nine months of 2016, the company recorded a provision for income taxes of $44.9 million, an effective tax rate of 27.6% and $137.4 million, an effective tax rate of 27.6%, respectively. The company's provision for income taxes and effective tax rate for the third quarter and first nine months of 2016 were impacted by the previously discussed restructuring, integration, and other charges and identifiable intangible asset amortization. Excluding the impact of the aforementioned items, the company's effective tax rate for the third quarter and first nine months of 2016 was 28.5% and 28.2%, respectively.

The company’s effective tax rate deviates from the statutory U.S. federal income tax rate mainly due to the mix of foreign taxing jurisdictions in which the company operates and where its foreign subsidiaries generate taxable ~~income.~~income, among other things. The ~~decrease~~change in the effective tax rate from ~~27.6%~~23.5% for the ~~third~~first quarter of ~~2016~~2022 to ~~25.4%~~21.8% for the ~~third~~first quarter of ~~2017~~2023, is primarily driven by ~~an increase~~changes in the mix of tax jurisdictions where taxable income ~~in lower tax jurisdictions~~is generated and discrete ~~items.~~items, such as stock-based compensation, changes in valuation allowances, and liabilities for uncertain tax positions.

Net Income Attributable to Shareholders

Following is an analysis of the company's consolidated net income attributable to ~~shareholders (in millions):~~shareholders:


														Quarter Ended
(millions)													(millions)	April 1, 2023		April 2, 2022
Net income attributable to shareholders, as reported													Net income attributable to shareholders, as reported	$	274	$	365
Identifiable intangible asset amortization*													Identifiable intangible asset amortization*	8		9
Restructuring, integration, and other charges													Restructuring, integration, and other charges	3		5

Gain on investments, net													Gain on investments, net	(10)		(2)

	Quarter Ended						Nine Months Ended
	September 30, 2017			October 1, 2016			September 30, 2017			October 1, 2016
Net income attributable to shareholders, as reported	$	135		$	118		$	348		$	358
Identifiable intangible asset amortization*	12			13			37			40
Restructuring, integration, and other charges	16			24			56			61
Loss on extinguishment of debt	1			—			60			—
Loss on investment	15			—			14			—

Tax effect of adjustments above	(16		)	(12		)	(60		)	(31		)	Tax effect of adjustments above	—		(3)
Net income attributable to shareholders, as adjusted	$	163		$	143		$	455		$	428

Non-GAAP net income attributable to shareholders													Non-GAAP net income attributable to shareholders	$	274	$	373

* Identifiable intangible asset amortization ~~does not include~~also excludes amortization related to the noncontrolling ~~interest~~

interest.

The ~~company recorded~~sum of the components for non-GAAP net income attributable to shareholders ~~of $134.6 million and $348.1 million~~may not agree to totals, as presented, due to rounding.

The decrease in ~~the third quarter and first nine months of 2017, respectively, compared with $117.7 million and $358.2 million in the year-earlier periods. Net~~net income attributable to shareholders ~~as adjusted, was $162.9 million and $455.3 million for the third quarter and first nine months of 2017, respectively, compared with $143.1 million and $428.1 million~~ in the first quarter of 2023 relates primarily to decreased sales, gross margins, and higher interest expense, as discussed above. In the first quarter of 2023, changes in foreign currencies reduced net income by approximately $8.4 million when compared to the year-earlier ~~periods.~~period.

Liquidity and Capital Resources

At September 30, 2017 and December 31, 2016, the company had cash and cash equivalents of $584.3 million and $534.3 million, respectively, of which $319.5 million and $320.0 million, respectively, were held outside the United States. Liquidity is affected by many factors, some of which are based on normal ongoing operations of the company's business and some of which arise from fluctuations related to global economics and markets. Cash balances are generated and held in many locations throughout the world. It is the company's current intent to permanently reinvest these funds outside the United States and its current plans do not demonstrate a need to repatriate them to fund its United States operations. If these funds were needed for the company's operations in the United States, it would be required to record and pay significant United States income taxes to repatriate these funds. Additionally, local government regulations may restrict the company's ability to move cash balances to meet cash needs under certain circumstances. The company currently does not expect such regulations and restrictions to impact its ability to make acquisitions or to pay vendors and conduct operations throughout the global organization.

During the first nine months of 2017, the net amount of cash provided by the company's operating activities was $1.8 million, the net amount of cash used for investing activities was $131.3 million, and the net amount of cash provided by financing activities was $181.4 million. The effect of exchange rate changes on cash was a decrease of $1.9 million.

During the first nine months of 2016, the net amount of cash provided by the company's operating activities was $140.7 million, the net amount of cash used for investing activities was $207.3 million, and the net amount of cash provided by financing activities was $198.4 million. The effect of exchange rate changes on cash was a decrease of $20.5 million.

~~Cash Flows from Operating Activities~~

The company maintains a significant investment in accounts receivable and inventories. As a percentage of total assets, accounts receivable and inventories were approximately 68.0% at September 30, 2017 and 67.6% at December 31, 2016.

The net amount of cash provided by the company's operating activities during the first nine months of 2017 was $1.8 million and was primarily due to an an increase in earnings from operations adjusted for non-cash items, offset, in part, by an increase in working capital.

The net amount of cash provided by the company's operating activities during the first nine months of 2016 was $140.7 million and was primarily due to earnings from operations, adjusted for non-cash items, offset, in part, by an increase in working capital to support the increase in sales.

Working capital as a percentage of sales, which the company defines as accounts receivable, net, plus inventory, net, less accounts payable, divided by annualized sales, was 17.4% in the third quarter of 2017 compared with 16.3% in the third quarter of 2016.

~~Cash Flows from Investing Activities~~

The net amount of cash used for investing activities during the first nine months of 2017 was $131.3 million. The use of cash from investing activities included $149.6 million for capital expenditures. The sources of cash from investing activities included $24.4 million of proceeds from the sale of buildings. Included in capital expenditures for the first nine months of 2017 is $44.6 million related to the company's global enterprise resource planning ("ERP") initiative.

The net amount of cash used for investing activities during the first nine months of 2016 was $207.3 million. The uses of cash from investing activities included $68.9 million of cash consideration paid, net of cash acquired, for the acquisition of three businesses and $126.3 million for capital expenditures. Included in capital expenditures for the third quarter of 2016 is $45.6 million related to the company's global ERP initiative.

~~Cash Flows from Financing Activities~~

The net amount of cash provided by financing activities during the first nine months of 2017 was $181.4 million. The uses of cash from financing activities included $555.9 million of payments for the redemption of notes, $149.1 million of repurchases of common stock, $14.4 million and $82.8 million of net payments from short-term and long-term bank borrowings, respectively, and $23.4 million of payments to acquire additional shares of Data Modul AG. The sources of cash from financing activities during the third quarter of 2017 were $987.1 million of net proceeds from note offerings and $21.4 million of proceeds from the exercise of stock options.

The net amount of cash provided by financing activities during the first nine months of 2016 was $198.4 million. The uses of cash from financing activities included $167.2 million of repurchases of common stock and $3.0 million of other acquisition related payments. The sources of cash from financing activities during the third quarter of 2016 were $31.9 million and $320.0 million of net proceeds from short-term and long-term bank borrowings, respectively, and $16.7 million of proceeds from the exercise of stock options.

The company has a $1.8 billion revolving credit facility, maturing in December 2021. This facility may be used by the company for general corporate purposes including working capital in the ordinary course of business, letters of credit, repayment, prepayment or purchase of long-term indebtedness, acquisitions, and as support for the company's commercial paper program, as applicable. Interest on borrowings under the revolving credit facility is calculated using a base rate or a euro currency rate plus a spread (1.18% at September 30, 2017), which is based on the company's credit ratings, or an effective interest rate of 2.36% at September 30, 2017. The facility fee, which is based on the company's credit ratings, was .20% at September 30, 2017. The company had $96.2 million in outstanding borrowings under the revolving credit facility at September 30, 2017. There were no outstanding borrowings under the revolving credit facility at December 31, 2016. During the first nine months of 2017 and 2016, the average daily balance outstanding under the revolving credit facility was $18.9 million and $6.8 million, respectively.

The company has a commercial paper program and the maximum aggregate balance of commercial paper outstanding may not exceed the borrowing capacity of $1.2 billion. The company had no outstanding borrowings under this program at September 30, 2017 and December 31, 2016. During the first nine months of 2017 and 2016, the average daily balance outstanding under the commercial paper program was $613.5 million and $261.4 million, respectively.

The company has an asset securitization program collateralized by accounts receivable of certain of its subsidiaries. The company may borrow up to $910.0 million under the asset securitization program, which matures in September 2019. The asset securitization program is conducted through Arrow Electronics Funding Corporation, a wholly-owned, bankruptcy remote subsidiary. The asset securitization program does not qualify for sale treatment. Accordingly, the accounts receivable and related debt obligation remain on the company's consolidated balance sheets. Interest on borrowings is calculated using a base rate or a commercial paper rate plus a spread (.40% at September 30, 2017), which is based on the company's credit ratings, or an effective interest rate of 1.73% at September 30, 2017. The facility fee is .40%. The company had $255.0 million and $460.0 million in outstanding borrowings under the asset securitization program at September 30, 2017 and December 31, 2016, respectively. During the first nine months of 2017 and 2016, the average daily balance outstanding under the asset securitization program was $714.7 million and $616.8 million, respectively.

Both the revolving credit facility and asset securitization program include terms and conditions that limit the incurrence of additional borrowings and require that certain financial ratios be maintained at designated levels. The company was in compliance with all covenants as of September 30, 2017 and is currently not aware of any events that would cause non-compliance with any covenants in the future.

The company has a $100.0 million uncommitted line of credit. The company had no outstanding borrowings under the uncommitted line of credit at September 30, 2017 and December 31, 2016. During the first nine months of 2017 and 2016, the average daily balance outstanding under the uncommitted line of credit was $6.8 million and $27.9 million, respectively.

During June 2017, the company completed the sale of $500.0 million principal amount of 3.875% notes due in 2028. The net proceeds of the offering of $494.6 million were used to redeem the company's 6.875% senior debenture due June 2018 and refinance a portion of the company’s 6.00% notes due April 2020, 5.125% notes due March 2021, and 7.50% notes due January 2027. The company recorded a loss on extinguishment of debt of $59.5 million in the first nine months of 2017.

During September 2017, the company completed the sale of $500.0 million principal amount of 3.25% notes due in 2024. The net proceeds of the offering of $493.8 million are expected to be used to redeem the company's debt obligations and for general corporate purposes.

In the normal course of business, certain of the company’s subsidiaries have agreements to sell, without recourse, selected trade receivables to financial institutions. The company does not retain financial or legal interests in these receivables, and, accordingly, they are accounted for as sales of the related receivables and the receivables are removed from the company’s consolidated balance sheets. Financing costs related to these transactions were not material and are included in "Interest and other financing expense, net" in the company’s consolidated statements of operations.

The company filed a shelf registration statement with the Securities and Exchange Commission in September 2015, as amended in June 2017, registering debt securities, preferred stock, common stock, and warrants of Arrow Electronics, Inc. that may be issued by the company from time to time. As set forth in the shelf registration statement, the net proceeds from the sale of the offered

securities may be used by the company for general corporate purposes, including repayment of borrowings, working capital, capital expenditures, acquisitions, and stock repurchases, or for such other purposes as may be specified in the applicable prospectus supplement.

Management believes that the ~~company's~~company’s current cash availability, its current borrowing capacity under its revolving credit facility and asset securitization ~~program,~~programs, and its expected ability to generate future operating cash flows ~~and the company's access to capital markets~~ are sufficient to meet its projected cash flow needs for the next 12 months and the foreseeable future. The company's current committed and undrawn liquidity stands at over $2.1 billion in addition to $205.6 million of cash on hand at April 1, 2023. The company also may issue debt or equity securities in the future and management believes the company will have adequate access to the capital markets, if needed. The company continually evaluates its liquidity requirements and would seek to amend its existing borrowing capacity or access the financial markets as deemed necessary.

Index

The company’s principal sources of liquidity are existing cash and cash equivalents, cash generated from operations and cash provided by its revolving credit facilities and debt. The company's principal uses of liquidity include cash used in operations, investments to grow working capital, scheduled interest and principal payments on its borrowings, and the return of cash to shareholders through share repurchases.

The following table presents selected financial information related to liquidity:




(millions)	April 1, 2023		December 31, 2022		Change
Working capital	$	7,205	$	7,182	$	23
Cash and cash equivalents	206		177		29
Short-term debt	144		590		(446)
Long-term debt	3,719		3,183		536

Working Capital

The company maintains a significant investment in working capital which the company defines as accounts receivable, net, plus inventories less accounts payable. The change in working capital during the first quarter of 2023, was primarily attributable to increases in inventories offset partially by lower accounts receivable.

Working capital as a percentage of sales, which is defined as working capital divided by annualized quarterly sales, increased to 20.6% for the first three months of 2023, compared to 17.0% in the year-earlier period. The increase was primarily due to lower sales and higher inventory, largely due to higher prices. Growth in inventory is contributing to higher levels of debt on the company's consolidated balance sheets.

Cash and Cash Equivalents

Cash equivalents consist of highly liquid investments, which are readily convertible into cash, with original maturities of three months or less. At April 1, 2023 and December 31, 2022, the company had cash and cash equivalents of $205.6 million and $176.9 million, respectively, of which $198.7 million and $160.8 million, respectively, were held outside the United States.

The company has $3.6 billion of undistributed earnings of its foreign subsidiaries which it deems indefinitely reinvested, and recognizes that it may be subject to additional foreign taxes and U.S. state income taxes, if it reverses its indefinite reinvestment assertion on these foreign earnings. The company has $2.1 billion of foreign earnings that are not deemed permanently reinvested and are available for distribution in future periods as of April 1, 2023.

Revolving Credit Facilities and Debt

The following table summarizes the company’s credit facilities by category:


	Borrowing Capacity		Outstanding Borrowings				Average Daily Balance Outstanding
							Quarter Ended
(millions)			April 1, 2023		December 31, 2022		April 1, 2023		April 2, 2022
North American asset securitization program	$	1,500	$	1,255	$	1,235	$	1,291	$	682
Revolving credit facility	2,000		15		—		274		12
Commercial paper program (a)	1,200		120		173		762		342
Uncommitted lines of credit	200		—		78		11		5

(a) Amounts outstanding under the commercial paper program are backstopped by available commitments under the company’s revolving credit facility.

The company also has an EMEA asset securitization program under which it continuously sells its interest in designated pools of trade accounts receivables of certain of its subsidiaries in the EMEA region. Receivables sold under the program are excluded from “Accounts receivable, net” and no corresponding liability is recorded on the company’s consolidated balance sheets. During the first three months of 2023 and 2022, the average daily balance outstanding under the EMEA asset securitization program was

Index

$636.4 million and $449.5 million, respectively. Refer to Note E “Accounts Receivable” of the Notes to the Consolidated Financial Statements for further discussion.

The following table summarizes recent events impacting the company's capital resources:

(millions)

Activity

Date

Notional Amount

4.50% notes, due March 2023

Repaid

March 2023

300

6.125% notes, due March 2026 (a)

Issued

March 2023

500

3.50% notes, due April 2022

Repaid

February 2022

350

North American asset securitization program

Increase in Capacity

September 2022

250

EMEA asset securitization program

Increase in Capacity

September 2022

€

200

(a) Upon issuance of the 6.125% notes due March 2026, the company entered into an interest rate swap, which effectively converts the 6.125% notes to floating rate notes based on SOFR + 0.508%.

Refer to Note G, “Debt” of the Notes to the Consolidated Financial Statements for further discussion of the company’s short-term and long-term debt and available financing.

Cash Flows

The following table summarizes the company’s cash flows by category for the periods presented:



(millions)	April 1, 2023		April 2, 2022		Change
Net cash provided by (used for) operating activities	$	224	$	(200)	$	424
Net cash provided by (used for) investing activities	(9)		1		(10)
Net cash provided by (used for) financing activities	(211)		228		(439)

Cash Flows from Operating Activities

The net amount of cash provided by the company’s operating activities during the first quarter of 2023 was $223.8 million and the net amount of cash used for the company's operating activities during the first quarter of 2022 was $200.2 million. The change in cash provided by operating activities during 2023, compared to the year-earlier period, related primarily to the company's historical counter-cyclical cash flow as the company generates cash flow in periods of decreased demand growth.

Cash Flows from Investing Activities

The net amount of cash used for investing activities during the first quarter of 2023 was $9.2 million while the net amount of cash provided by investing activities in the first quarter of 2022 was $0.9 million. The change in cash used for investing activities related primarily to a decrease in proceeds from notes receivable, offset partially by settlement proceeds from derivative contracts.

Cash Flows from Financing Activities

The net amount of cash used for financing activities was $211.0 million during the first quarter of 2023 compared to $227.6 million provided by financing activities in the year-earlier period. The change in cash used for financing activities related primarily to a decrease in proceeds from long-term bank borrowings offset by proceeds from notes issued in the first quarter of 2023.

Capital Expenditures

Capital expenditures for the first quarter of 2023 and 2022 were $20.1 million and $19.3 million, respectively. The company expects capital expenditures to be approximately $80.0 million for fiscal year 2023.

Share-Repurchase Program

The company repurchased 2.6 million shares of common stock for $300.2 million and 2.0 million shares of common stock for $250.0 million in the first quarter of 2023 and 2022, respectively. On January 31, 2023, the company's Board of Directors approved a $1.0 billion increase to the company's share-repurchase program. As of April 1, 2023, approximately $1.0 billion

Index

remained available for repurchase. The share-repurchase authorization does not have an expiration date and the pace of the repurchase activity will depend on factors such as the company’s working capital needs, cash requirements for acquisitions, debt repayment obligations or repurchases of debt, share price, and economic and market conditions. The share-repurchase program may be accelerated, suspended, delayed or discontinued at any time subject to the approval of the company’s Board of Directors.

Contractual Obligations

The company has contractual obligations for short-term and long-term debt, interest on short-term and long-term debt, ~~capital leases, operating leases,~~ purchase obligations, and ~~certain other long-term liabilities~~operating leases that ~~were~~are summarized in ~~a table~~the section titled “Contractual Obligations” in Part II, Item 7, Management's Discussion and Analysis of ~~Contractual Obligations~~Financial Condition and Results of Operations in the ~~company's~~company’s Annual Report on Form 10-K for the year ended December 31, ~~2016. Since December 31, 2016,~~2022.

Refer to the section above titled “Revolving Credit Facilities and Debt” for updates to our short-term and long-term debt obligations. Refer to Note H, "Financial Instruments Measured at Fair Value" of the Notes to Consolidated Financial Statements for further discussion on hedging activities. As of April 1, 2023, there were no other material changes to the contractual obligations of the ~~company outside the ordinary course of the company’s business, except as follows:~~company.

~~During the second quarter of 2017, the company completed the sale of $500.0 million principal amount of 3.875% notes due in 2028;~~

During the second quarter of 2017, the company redeemed $200.0 million of the company's 6.875% senior debenture due June 2018 and refinanced $90.6 million of the 6.00% notes due April 2020, $119.1 million of the 5.125% notes due March 2021, and $89.6 million of the 7.50% notes due January 2027; and

~~During the third quarter of 2017, the company completed the sale of $500.0 million principal amount of 3.25% notes due in 2024.~~

~~Share-Repurchase Programs~~

~~The following table shows the company's Board approved share-repurchase programs as of September 30, 2017 (in thousands):~~

~~Off-Balance Sheet Arrangements~~

~~The company has no off-balance sheet financing or unconsolidated special purpose entities.~~

Critical Accounting ~~Policies and~~ Estimates

The ~~company's~~company’s consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires the company to make significant estimates and judgments that affect the reported amounts of assets, liabilities, revenues, and expenses and related disclosure of contingent assets and liabilities. The company evaluates its estimates on an ongoing basis. The company bases its estimates on historical experience and on various other assumptions that are believed reasonable under the circumstances; the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

There ~~were~~have been no significant changes to our critical accounting estimates during the first ~~nine~~three months of ~~2017~~2023. Refer to the ~~items disclosed as Critical~~section titled “Critical Accounting ~~Policies and Estimates~~Estimates” in Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of ~~Operations~~Operation's, in the ~~company's~~company’s Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2022.

Impact of Recently Issued Accounting Standards

See Note B, "Impact of Recently Issued Accounting Standards" of the Notes to Consolidated Financial Statements for a full description of recent accounting pronouncements, including the anticipated dates of adoption and the effects on the ~~company's~~company’s consolidated financial position and results of operations.

~~Information Relating to Forward-Looking Statements~~

This report 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 ECS 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.


~~Item 3.~~	~~Quantitative and Qualitative Disclosures About Market Risk~~

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There were no material changes in market risk for changes in foreign currency exchange rates and interest rates from the information provided in Item 7A – Quantitative and Qualitative Disclosures About Market Risk in the ~~company's~~company’s Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2022.


~~Item 4.~~	~~Controls and Procedures~~

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

The company’s management, under the supervision and with the participation of the company’s Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the effectiveness of the design and operation of the company’s disclosure controls and procedures as of ~~September 30, 2017~~April 1, 2023 (the ~~"Evaluation"~~“Evaluation”). Based upon the Evaluation, the company’s Chief Executive Officer and Chief Financial Officer concluded that the company’s disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934) ~~are effective.~~were effective as of April 1, 2023.

Changes in Internal Control over Financial Reporting

There ~~was~~were no ~~change~~changes in the ~~company's~~company’s internal control over financial reporting ~~that occurred~~ during the ~~company's~~company’s most recent fiscal quarter that ~~has~~ materially affected, or isare reasonably likely to materially affect, the ~~company's~~company’s internal control over financial reporting.

Index

PART II. OTHER INFORMATION


~~Item 1A.~~	~~Risk Factors~~

Item 1. Legal Proceedings

The Information set forth in Note K "Contingencies" in Notes to Consolidated Financial Statements in Item 1 Part I of this Report, is incorporated herein by reference.

Item 1A. Risk Factors

There ~~were~~have been no material changes to the ~~company's~~company’s risk factors asfrom those discussed in Item 1A - Risk Factors in the ~~company's~~company’s Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2022.


~~Item 2.~~	~~Unregistered Sales of Equity Securities and Use of Proceeds~~

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

~~In September 2015 and December 2016, the company's Board approved a repurchase of up to $400 million of the company's common stock.~~

The following table shows the share-repurchase activity for the quarter ended ~~September 30, 2017~~:April 1, 2023:


(thousands except share and per share data)	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Program	Approximate Dollar Value of Shares that May Yet be Purchased Under the Programs (a)
January 1 through January 28, 2023	800,389	$	112.44	800,389	$	1,238,746
January 29 through February 25, 2023	246,891	123.54		246,891	1,208,245
February 26 through April 1, 2023	1,516,630	118.52		1,516,630	1,028,497
Total	2,563,910			2,563,910

(a)On January 31, 2023, the company's Board of Directors approved a $1.0 billion increase to the company's share-repurchase program. The company's share-repurchase program does not have an expiration date. As of April 1, 2023, the total authorized dollar value of shares available for repurchase was $2.8 billion of which $1.8 billion has been utilized, while the $1.0 billion in the table represents the remaining amount available for repurchase under the program.

Month
Total
Number of
Shares
Purchased (a)

Average
Price Paid
per Share

Total Number of
Shares
Purchased as
Part of Publicly
Announced
Program (b)

Approximate
Dollar Value of
Shares that May
Yet be
Purchased
Under the
Programs
July 2 through July 29, 2017 —
$ —
—
$ 408,913,216
July 30 through August 26, 2017 173,548
75.84
171,500
395,919,107
August 27 through September 30, 2017 157,864
77.92
154,090
383,919,118
Total 331,412

325,590

Index


~~(a)~~	Includes share repurchases under the Share-Repurchase Program and those associated with shares withheld from employees for stock-based awards, as permitted by the Omnibus Incentive Plan, in order to satisfy the required tax withholding obligations.

~~(b)~~

The difference between the "total number of shares purchased" and the "total number of shares purchased as part of publicly announced program" for the quarter ended September 30, 2017 is 5,822 shares, which relate to shares withheld from employees for stock-based awards, as permitted by the Omnibus Incentive Plan, in order to satisfy the required tax withholding obligations. The purchase of these shares were not made pursuant to any publicly announced repurchase plan.

Item 6. Exhibits

~~Item 6.~~Exhibit
Number

~~Exhibits~~

Exhibit

~~Exhibit~~

~~Number~~

~~Exhibit~~

4(a)

Fourth Supplemental Indenture, dated as of March 1, 2023, by and between the Company and US Bank National Association, as Trustee, incorporated by reference to Exhibit 4.2 to the company's Current Report on Form 8-K dated March 1, 2023 , Commission File No. 1-4482).

4(b)*

Fifth Supplemental Indenture, dated as of March 1, 2023, by and between the Company and U.S. Bank Trust Company, National Association, as Trustee.

4(c)*

First Amendment to Fourth Amended and Restated Credit Agreement, dated as of February 14, 2023, by and among Arrow Electronics, Inc., and certain of its subsidiaries as borrowers, the lenders party thereto, and JPMorgan Chase Bank, N.A., as administrative agent.

4(d)*

Amendment No. 4 to Receivables Transfer Agreement, dated as of January 27, 2023, by and among Arrow EMEA Funding Corp B.V., as the SPV, BNP Paribas, as administrative agent and a purchaser agent, ING Belgium S.A./N.V., as a purchaser agent, U.S. Bank Trustees Limited, as the security trustee, Elavon Financial Services DAC, as paying agent, and Arrow Electronics, Inc.

31(i)(A)*

Certification of Chief Executive Officer ~~Pursuant~~pursuant to Rule 13A-14(a)/15d-14(a) of the Securities and Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

~~31(ii)~~31(i )(B)*

Certification of Chief Financial Officer ~~Pursuant~~pursuant to Rule 13A-14(a)/15d-14(a) of the Securities and Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32(i)**

Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of ~~2002.~~2002.

32(ii)**

Certification of Chief Financial Officer ~~Pursuant~~pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

~~101.INS~~101*

Inline XBRL ~~Instance Document.~~Document Set for the condensed consolidated financial statements and accompanying notes in Part I, Item 1, "Financial Statements" of this Quarterly Report on Form 10-Q.

~~101.SCH~~104*

Cover Page Interactive Data File (formatted as Inline XBRL ~~Taxonomy Extension Schema Document.~~

and contained in Exhibit 101).

~~101.CAL~~

~~XBRL Taxonomy Extension Calculation Linkbase Document.~~

~~101.LAB~~

~~XBRL Taxonomy Extension Label Linkbase Document.~~

~~101.PRE~~

~~XBRL Taxonomy Extension Presentation Linkbase Documents.~~

~~101.DEF~~

~~XBRL Taxonomy Definition Linkbase Document.~~

* : Filed herewith.

** : Furnished herewith.

Index

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

ARROW ELECTRONICS, INC.

Date:

May 4, 2023

By:

/s/ Rajesh K. Agrawal

Rajesh K. Agrawal

Senior Vice President and Chief Financial Officer

~~ARROW ELECTRONICS, INC.~~

~~Date:~~

~~November 2, 2017~~

~~By:~~

~~/s/ Chris D. Stansbury~~

~~Chris D. Stansbury~~

~~Senior Vice President and Chief Financial Officer~~

3633


x☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


o☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934




Part I.	Financial Information

	Item 1.	Financial Statements
		Consolidated Statements of Operations	3
		Consolidated Statements of Comprehensive Income	4
		Consolidated Balance Sheets	5
		Consolidated Statements of Cash Flows	6
		Consolidated Statements of Equity	7
		Notes to Consolidated Financial Statements	78

	Item 2.	~~Management's~~Management’s Discussion and Analysis of Financial Condition and Results of Operations	22

	Item 3.	Quantitative and Qualitative Disclosures about Market Risk	3230

	Item 4.	Controls and Procedures	3330

Part II.	Other Information

	Item 1A.	Risk Factors	3431

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3431



	Item 6.	Exhibits	3532

Signature			3633



	Weighted-Average Life	Gross Carrying Amount		Accumulated Amortization			Net
Non-amortizable trade names	indefinite	$	101,000	$	—		$	101,000
Customer relationships	10 years	476,656		(274,847		)	201,809
Developed technology	5 years	6,340		(2,973		)	3,367
Amortizable trade name	5 years	2,409		(1,200		)	1,209
		$	586,405	$	(279,020	)	$	307,385



	September 30, 2017		December 31, 2016
3.00% notes, due 2018	$	299,643	$	—
Other short-term borrowings	80,565		93,827
	$	380,208	$	93,827



	September 30, 2017		December 31, 2016
6.875% senior debentures, due 2018	$	—	$	212,500
3.00% notes, due 2018	301,500		303,500
6.00% notes, due 2020	226,500		325,500
5.125% notes, due 2021	140,500		265,500
3.50% notes, due 2022	358,000		349,500
4.50% notes, due 2023	318,500		305,500
3.25% notes, due 2024	494,000		—
4.00% notes, due 2025	357,500		345,000
7.50% senior debentures, due 2027	136,500		238,000
3.875% notes, due 2028	499,000		—



	September 30, 2017				December 31, 2016
	Marubun		Mutual Funds		Marubun		Mutual Funds
Cost basis	$	10,016	$	17,743	$	10,016	$	18,097
Unrealized holding gain	7,763		9,590		3,806		5,996
Fair value	$	17,779	$	27,333	$	13,822	$	24,093



	Personnel Costs			Facilities Costs			Other			Total
Restructuring and integration charges	$	29,030		$	4,222		$	1,044		$	34,296
Payments	(14,203		)	(2,575		)	(834		)	(17,612		)
Foreign currency translation	868			83			20			971
Balance as of September 30, 2017	$	15,695		$	1,730		$	230		$	17,655



Month of Board Approval	Dollar Value Approved for Repurchase		Dollar Value of Shares Repurchased		Approximate Dollar Value of Shares that May Yet be Purchased Under the Program
September 2015	$	400,000	$	400,000	$	—
December 2016	400,000		16,081		383,919
Total	$	800,000	$	416,081	$	383,919



	September 30, 2017		December 31, 2016
Americas (d)	$	671,668	$	631,386
EMEA	104,028		90,834
Asia/Pacific	39,683		34,079
Consolidated	$	815,379	$	756,299


(303)			824-4000



Month	Total Number of Shares Purchased (a)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Program (b)	Approximate Dollar Value of Shares that May Yet be Purchased Under the Programs
July 2 through July 29, 2017	—	$	—	—	$	408,913,216
July 30 through August 26, 2017	173,548	75.84		171,500	395,919,107
August 27 through September 30, 2017	157,864	77.92		154,090	383,919,118
Total	331,412			325,590