8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): February 7, 2017

ARROW ELECTRONICS, INC.

(Exact Name of Registrant as Specified in Charter)

NEW YORK	1-4482	11-1806155
(State or Other Jurisdiction	(Commission	(IRS Employer
of Incorporation)	File Number)	Identification No.)

9201 EAST DRY CREEK ROAD, CENTENNIAL, COLORADO  80112

(Address of Principal Executive Offices)

Registrant's telephone number, including area code: (303) 824-4000

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ]	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ]	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 20.14a-12)
[ ]	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ]	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION

On February 7, 2017, the Registrant issued a press release announcing its fourth quarter 2016 earnings.  A copy of the press release is attached hereto as an Exhibit (99.1).

On February 7, 2017, the Registrant also issued a press release containing a Fourth Quarter 2016 CFO commentary related to its fourth quarter 2016 earnings.  A copy of that press release is attached hereto as an Exhibit (99.2).

The information in this Current Report on Form 8-K and the Exhibit attached hereto is being furnished and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act") or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, regardless of any general incorporation language in such filing.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

(c)           EXHIBITS

99.1 Earnings press release dated February 7, 2017.

99.2 CFO commentary press release dated February 7,2017.

SIGNATURES

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 hereunto duly authorized.

	ARROW ELECTRONICS, INC.
Date:  February 7, 2017	By:  /s/ Gregory Tarpinian
	Name:  Gregory Tarpinian
	Title:  Senior Vice President

EXHIBIT INDEX

Exhibit	Description
99.1	Earnings press release issued by Arrow Electronics, Inc., dated February 7, 2017.
99.2	CFO commentary press release issued by Arrow Electronics, Inc., dated February 7, 2017.

EX-99.1

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

Exhibit 99.1

Arrow Electronics Reports Fourth-Quarter and Year-End 2016 Results

-- Record Full-Year Sales and Earnings Per Share --

-- Fourth-Quarter Earnings Per Share of $1.81; Non-GAAP Earnings Per Share of $2.00 --

CENTENNIAL, Colo.--(BUSINESS WIRE)-Feb. 7, 2017--Arrow Electronics, Inc. (NYSE:ARW) today reported fourth-quarter 2016 net income of $165 million, or $1.81 per share on a diluted basis, compared with net income of $158 million, or $1.69 per share on a diluted basis, in the fourth quarter of 2015. Excluding certain items¹, net income would have been $182 million, or $2.00 per share on a diluted basis, in the fourth quarter of 2016, compared with net income of $182 million, or $1.94 per share on a diluted basis, in the fourth quarter of 2015. Fourth-quarter sales of $6.44 billion decreased 5 percent from sales of $6.75 billion in the prior year. In the fourth quarter of 2016, changes in foreign currencies had negative impacts on growth of approximately $91 million or 1 percent on sales and $.04 or 2 percent on earnings per share on a diluted basis compared to the fourth quarter of 2015.

“Our digital transformation and IoT solutions spanning from sensor to sunset helped drive record full-year sales and earnings per share,” said Michael J. Long, chairman, president, and chief executive officer. “Our customers value our comprehensive portfolio of electronic components and embedded computing, datacenter, cloud, and reverse logistics solutions.”

Global components fourth-quarter sales of $4 billion grew 9 percent year over year. Fourth-quarter sales, as adjusted, grew 10 percent year over year. Americas components sales grew 4 percent year over year. Asia-Pacific components sales grew 22 percent year over year. Europe components sales declined 1 percent year over year. Sales in the region, as adjusted, grew 2 percent year over year. “Global components sales exceeded the high end of our expectations and were propelled by our investments in customer-facing sales and engineering resources,” said Mr. Long.

Global enterprise computing solutions fourth-quarter sales of $2.45 billion declined 21 percent year over year. Sales when compared to the fourth quarter of 2015 were unfavorably impacted by approximately $250 million due to a later calendar start to the fourth quarter of 2016, and by approximately $250 million from a decrease in hardware sales offset by an increase in software sales, which are recognized on a net basis. “Full-year 2016 global enterprise computing solutions operating income grew 4 percent year over year, and we believe this is the best measure of our business,” added Mr. Long.

FULL-YEAR RESULTS

Arrow’s net income for 2016 was $523 million, or $5.68 per share on a diluted basis, compared with net income of $498 million, or $5.20 per share on a diluted basis, in 2015. Excluding certain items¹, net income would have been $610 million, or $6.63 per share on a diluted basis, in 2016 compared with net income of $592 million, or $6.19 per share on a diluted basis, in 2015. In 2016, sales of $23.83 billion increased 2 percent from sales of $23.28 billion in 2015. In 2016, changes in foreign currencies had negative impacts on growth of approximately $202 million, or 1 percent on sales, and $.08, or 1 percent, on earnings per share on a diluted basis compared to 2015.

“We delivered record results in 2016, and our business is increasingly differentiated from the competition. We have a built a solid foundation for 2017 and into the future,” said Mr. Long.

“Cash flow from operations was $356 million in 2016 approximating our cash flow target,” said Chris Stansbury, senior vice president and chief financial officer. “In the fourth quarter we reduced net leverage and we returned approximately $49 million to shareholders through our stock repurchase program. In 2016 we returned approximately $200 million to shareholders through our stock repurchase program. We had approximately $520 million of remaining authorization under our share repurchase programs at the end of the year.”

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

GUIDANCE

“As we look to the first quarter, we believe that total sales will be between $5.375 billion and $5.775 billion, with global components sales between $3.775 billion and $3.975 billion, and global enterprise computing solutions sales between $1.6 billion and $1.8 billion. As a result of this outlook, we expect earnings per share on a diluted basis, to be in the range of $1.18 to $1.30, and earnings per share on a diluted basis, excluding any charges, to be in the range of $1.37 to $1.49 per share. Our guidance assumes an average tax rate in the range of 27 to 29 percent and average diluted shares outstanding are expected to be 91 million. We are expecting the average USD-to-Euro exchange rate for the first quarter to be approximately $1.07 to €1. We estimate changes in foreign currencies will have negative impacts on growth of approximately $70 million, or 1 percent on sales, and $.03, or 2 percent, on earnings per share on a diluted basis compared to the first quarter of 2016,” said Mr. Stansbury.

Please refer to the CFO commentary, which can be found at investor.arrow.com, as a supplement to the company’s earnings release.

Arrow Electronics (www.arrow.com) is a global provider of products, services and solutions to industrial and commercial users of electronic components and enterprise computing solutions. Arrow serves as a supply channel partner for more than 125,000 original equipment manufacturers, contract manufacturers and commercial customers through a global network of more than 465 locations serving over 90 countries.

Information Relating to Forward-Looking Statements

This press release includes forward-looking statements that are subject to numerous assumptions, risks, and uncertainties, which could cause actual results or facts to differ materially from such statements for a variety of reasons, including, but not limited to: industry conditions, the company's implementation of its new enterprise resource planning system, changes in product supply, pricing and customer demand, competition, other vagaries in the global components and global enterprise computing solutions markets, changes in relationships with key suppliers, increased profit margin pressure, the effects of additional actions taken to become more efficient or lower costs, risks related to the integration of acquired businesses, changes in legal and regulatory matters, and the company’s ability to generate additional cash flow. Forward-looking statements are those statements which are not statements of historical fact. These forward-looking statements can be identified by forward-looking words such as "expects," "anticipates," "intends," "plans," "may," "will," "believes," "seeks," "estimates," and similar expressions. Shareholders and other readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. The company undertakes no obligation to update publicly or revise any of the forward-looking statements.

For a further discussion of factors to consider in connection with these forward-looking statements, investors should refer to Item 1A Risk Factors of the company’s Annual Report on Form 10-K for the year ended Dec. 31, 2016.

Certain Non-GAAP Financial Information

In addition to disclosing financial results that are determined in accordance with accounting principles generally accepted in the United States (“GAAP”), the company also provides certain non-GAAP financial information relating to sales, operating income, net income attributable to shareholders, and net income per basic and diluted share. The company provides sales on a non-GAAP basis adjusted for the impact of changes in foreign currencies and the impact of acquisitions by adjusting the company's operating results for businesses acquired, including the amortization expense related to acquired intangible assets, as if the acquisitions had occurred at the beginning of the earliest period presented (referred to as "impact of acquisitions"). Operating income, net income attributable to shareholders, and net income per basic and diluted share are adjusted for certain charges, credits, gains, and losses that the company believes impact the comparability of its results of operations. These charges, credits, gains, and losses arise out of the company’s efficiency enhancement initiatives, acquisitions (including intangible assets amortization expense), loss on prepayment of debt, and (gain)/loss on investments. A reconciliation of the company’s non-GAAP financial information to GAAP is set forth in the tables below.

The company believes that such non-GAAP financial information is useful to investors to assist in assessing and understanding the company’s operating performance and underlying trends in the company’s business because management considers these items referred to above to be outside the company’s core operating results. This non-GAAP financial information is among the primary indicators management uses as a basis for evaluating the company’s financial and operating performance. In addition, the company’s Board of Directors may use this non-GAAP financial information in evaluating management performance and setting management compensation.

The presentation of this additional non-GAAP financial information is not meant to be considered in isolation or as a substitute for, or alternative to, sales, operating income, net income and net income per basic and diluted share determined in accordance with GAAP. Analysis of results and outlook on a non-GAAP basis should be used as a complement to, and in conjunction with, data presented in accordance with GAAP.

ARROW ELECTRONICS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except per share data)
(Unaudited)
	Quarter Ended				Year Ended
	December 31, 2016		December 31, 2015		December 31, 2016		December 31, 2015
Sales	$	6,442,891	$	6,751,342	$	23,825,261	$	23,282,020
Costs and expenses:
Cost of sales	5,619,543		5,912,376		20,681,062		20,246,770
Selling, general, and administrative expenses	518,329		529,089		2,052,863		1,986,249
Depreciation and amortization	37,679		37,900		159,195		155,754
Restructuring, integration, and other charges	12,441		17,666		73,602		68,765
	6,187,992		6,497,031		22,966,722		22,457,538
Operating income	254,899		254,311		858,539		824,482
Equity in earnings of affiliated companies	2,179		2,147		7,573		7,037
Gain on sale of investment	—		—		—		2,008
Loss on prepayment of debt	—		—		—		2,943
Interest and other financing expense, net	38,887		34,442		150,715		135,401
Other expense, net	—		1,500		—		3,000
Income before income taxes	218,191		220,516		715,397		692,183
Provision for income taxes	53,233		61,108		190,674		191,697
Consolidated net income	164,958		159,408		524,723		500,486
Noncontrolling interests	440		916		1,973		2,760
Net income attributable to shareholders	$	164,518	$	158,492	$	522,750	$	497,726
Net income per share:
Basic	1.84		1.71		5.75		5.26
Diluted	1.81		1.69		5.68		5.20
Weighted average shares outstanding:
Basic	89,596		92,731		90,960		94,608
Diluted	90,692		94,039		92,033		95,686

ARROW ELECTRONICS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands except par value)
	December 31, 2016			December 31, 2015
ASSETS
Current assets:
Cash and cash equivalents	$	534,320		$	273,090
Accounts receivable, net	6,746,687			6,161,418
Inventories, net	2,855,645			2,466,490
Other current assets	180,069			285,473
Total current assets	10,316,721			9,186,471
Property, plant, and equipment, at cost:
Land	23,456			23,547
Buildings and improvements	175,141			162,011
Machinery and equipment	1,297,657			1,250,115
	1,496,254			1,435,673
Less: Accumulated depreciation and amortization	(739,955		)	(735,495		)
Property, plant, and equipment, net	756,299			700,178
Investments in affiliated companies	88,401			73,376
Intangible assets, net	336,882			389,326
Goodwill	2,392,220			2,368,832
Other assets	315,843			303,747
Total assets	$	14,206,366		$	13,021,930
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	5,774,151		$	5,192,665
Accrued expenses	821,244			819,463
Short-term borrowings, including current portion of long-term debt	93,827			44,024
Total current liabilities	6,689,222			6,056,152
Long-term debt	2,696,334			2,380,575
Other liabilities	355,190			390,392
Equity:
Shareholders' equity:
Common stock, par value $1:
Authorized – 160,000 shares in both 2016 and 2015
Issued – 125,424 shares in both 2016 and 2015	125,424			125,424
Capital in excess of par value	1,112,114			1,107,314
Treasury stock (36,511 and 34,501 shares in 2016 and 2015, respectively), at cost	(1,637,476		)	(1,480,069		)
Retained earnings	5,197,230			4,674,480
Accumulated other comprehensive loss	(383,854		)	(284,706		)
Total shareholders' equity	4,413,438			4,142,443
Noncontrolling interests	52,182			52,368
Total equity	4,465,620			4,194,811
Total liabilities and equity	$	14,206,366		$	13,021,930

ARROW ELECTRONICS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
	Quarter Ended
	December 31, 2016			December 31, 2015
Cash flows from operating activities:
Consolidated net income	$	164,958		$	159,408
Adjustments to reconcile consolidated net income to net cash provided by operations:
Depreciation and amortization	37,679			37,900
Amortization of stock-based compensation	10,042			13,491
Equity in earnings of affiliated companies	(2,179		)	(2,147		)
Deferred income taxes	(2,061		)	(21,048		)
Excess tax benefits from stock-based compensation arrangements	(96		)	(48		)
Other	1,508			2,837
Change in assets and liabilities, net of effects of acquired businesses:
Accounts receivable	(972,399		)	(1,125,272		)
Inventories	(286,306		)	2,100
Accounts payable	1,095,530			1,352,100
Accrued expenses	149,935			128,867
Other assets and liabilities	23,443			(4,053		)
Net cash provided by operating activities	220,054			544,135
Cash flows from investing activities:
Purchase price adjustment (cash consideration paid for acquired businesses)	4,195			(1,821		)
Acquisition of property, plant, and equipment	(38,354		)	(41,744		)
Proceeds from sale of facilities	—			3,496
Net cash used for investing activities	(34,159		)	(40,069		)
Cash flows from financing activities:
Change in short-term and other borrowings	16,743			(42,576		)
Repayment of long-term bank borrowings, net	(7,000		)	(366,700		)
Proceeds from exercise of stock options	2,281			178
Excess tax benefits from stock-based compensation arrangements	96			48
Repurchases of common stock	(49,268		)	(149,833		)
Other	(190		)	(1,937		)
Net cash used for financing activities	(37,338		)	(560,820		)
Effect of exchange rate changes on cash	1,348			(6,900		)
Net increase (decrease) in cash and cash equivalents	149,905			(63,654		)
Cash and cash equivalents at beginning of period	384,415			336,744
Cash and cash equivalents at end of period	$	534,320		$	273,090

ARROW ELECTRONICS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
	Year Ended
	December 31, 2016			December 31, 2015
Cash flows from operating activities:
Consolidated net income	$	524,723		$	500,486
Adjustments to reconcile consolidated net income to net cash provided by operations:
Depreciation and amortization	159,195			155,754
Amortization of stock-based compensation	39,825			47,274
Equity in earnings of affiliated companies	(7,573		)	(7,037		)
Deferred income taxes	28,130			5,833
Gain on sale of investment	—			(2,008		)
Excess tax benefits from stock-based compensation arrangements	(5,049		)	(5,911		)
Other	5,972			10,894
Change in assets and liabilities, net of effects of acquired businesses:
Accounts receivable	(636,944		)	(68,990		)
Inventories	(403,980		)	(42,790		)
Accounts payable	582,165			33,398
Accrued expenses	47,020			56,139
Other assets and liabilities	22,322			(27,963		)
Net cash provided by operating activities	355,806			655,079
Cash flows from investing activities:
Cash consideration paid for acquired businesses	(64,751		)	(514,731		)
Acquisition of property, plant, and equipment	(164,695		)	(154,800		)
Proceeds from sale of facilities	—			3,496
Proceeds from sale of investment	—			2,008
Other	(12,000		)	—
Net cash used for investing activities	(241,446		)	(664,027		)
Cash flows from financing activities:
Change in short-term and other borrowings	48,684			(46,645		)
Proceeds from (repayment of) long-term bank borrowings, net	313,000			(128,000		)
Net proceeds from note offering	—			688,162
Redemption of notes	—			(254,313		)
Proceeds from exercise of stock options	18,967			14,900
Excess tax benefits from stock-based compensation arrangements	5,049			5,911
Repurchases of common stock	(216,446		)	(356,434		)
Other	(3,190		)	(7,768		)
Net cash provided by (used for) financing activities	166,064			(84,187		)
Effect of exchange rate changes on cash	(19,194		)	(34,130		)
Net increase (decrease) in cash and cash equivalents	261,230			(127,265		)
Cash and cash equivalents at beginning of period	273,090			400,355
Cash and cash equivalents at end of period	$	534,320		$	273,090

ARROW ELECTRONICS, INC.
NON-GAAP SALES RECONCILIATION
(In thousands)
(Unaudited)
	Quarter Ended
	December 31, 2016		December 31, 2015			% Change
Consolidated sales, as reported	$	6,442,891	$	6,751,342		(4.6	)%
Impact of changes in foreign currencies	—		(91,058		)
Impact of acquisitions	—		66,777
Consolidated sales, as adjusted	$	6,442,891	$	6,727,061		(4.2	)%
Global components sales, as reported	$	3,995,491	$	3,668,804		8.9	%
Impact of changes in foreign currencies	—		(26,949		)
Impact of acquisitions	—		4,850
Global components sales, as adjusted	$	3,995,491	$	3,646,705		9.6	%
Europe components sales, as reported	$	963,349	$	972,125		(0.9	)%
Impact of changes in foreign currencies	—		(28,341		)
Impact of acquisitions	—		143
Europe components sales, as adjusted	$	963,349	$	943,927		2.1	%
Asia components sales, as reported	$	1,487,816	$	1,215,242		22.4	%
Impact of changes in foreign currencies	—		786
Impact of acquisitions	—		—
Asia components sales, as adjusted	$	1,487,816	$	1,216,028		22.4	%
Global ECS sales, as reported	$	2,447,400	$	3,082,538		(20.6	)%
Impact of changes in foreign currencies	—		(64,108		)
Impact of acquisitions	—		61,927
Global ECS sales, as adjusted	$	2,447,400	$	3,080,357		(20.5	)%
Europe ECS sales, as reported	$	818,363	$	1,054,926		(22.4	)%
Impact of changes in foreign currencies	—		(70,254		)
Impact of acquisitions	—		—
Europe ECS sales, as adjusted	$	818,363	$	984,672		(16.9	)%
Americas ECS sales, as reported	$	1,629,037	$	2,027,612		(19.7	)%
Impact of changes in foreign currencies	—		6,145
Impact of acquisitions	—		61,927
Americas ECS sales, as adjusted	$	1,629,037	$	2,095,684		(22.3	)%

ARROW ELECTRONICS, INC.
NON-GAAP SALES RECONCILIATION
(In thousands)
(Unaudited)
	Year Ended
	December 31, 2016		December 31, 2015			% Change
Consolidated sales, as reported	$	23,825,261	$	23,282,020		2.3	%
Impact of changes in foreign currencies	—		(201,764		)
Impact of acquisitions	48,148		680,798
Consolidated sales, as adjusted	$	23,873,409	$	23,761,054		0.5	%
Global components sales, as reported	$	15,408,839	$	14,405,793		7.0	%
Impact of changes in foreign currencies	—		(79,175		)
Impact of acquisitions	9,711		338,553
Global components sales, as adjusted	$	15,418,550	$	14,665,171		5.1	%
Europe components sales, as reported	$	4,086,607	$	3,874,744		5.5	%
Impact of changes in foreign currencies	—		(52,718		)
Impact of acquisitions	—		104,634
Europe components sales, as adjusted	$	4,086,607	$	3,926,660		4.1	%
Asia components sales, as reported	$	5,400,429	$	4,720,210		14.4	%
Impact of changes in foreign currencies	—		(22,458		)
Impact of acquisitions	—		211,745
Asia components sales, as adjusted	$	5,400,429	$	4,909,497		10.0	%
Global ECS sales, as reported	$	8,416,422	$	8,876,227		(5.2	)%
Impact of changes in foreign currencies	—		(122,589		)
Impact of acquisitions	38,437		342,245
Global ECS sales, as adjusted	$	8,454,859	$	9,095,883		(7.0	)%
Europe ECS sales, as reported	$	2,686,078	$	2,913,995		(7.8	)%
Impact of changes in foreign currencies	—		(111,522		)
Impact of acquisitions	—		—
Europe ECS sales, as adjusted	$	2,686,078	$	2,802,473		(4.2	)%
Americas ECS sales, as reported	$	5,730,344	$	5,962,232		(3.9	)%
Impact of changes in foreign currencies	—		(11,067		)
Impact of acquisitions	38,437		342,245
Americas ECS sales, as adjusted	$	5,768,781	$	6,293,410		(8.3	)%

ARROW ELECTRONICS, INC.
NON-GAAP EARNINGS RECONCILIATION
(In thousands except per share data)
(Unaudited)
Three months ended December 31, 2016
	Reported GAAP measure			Intangible amortization expense		Restructuring & Integration charges		Other*		Non-GAAP measure
Operating income	$	254,899		$	13,634	$	12,441	$	—	$	280,974
Income before income taxes	218,191			13,634		12,441		—		244,266
Provision for income taxes	53,233			4,870		3,733		—		61,836
Consolidated net income	164,958			8,764		8,708		—		182,430
Noncontrolling interests	440			336		—		—		776
Net income attributable to shareholders	$	164,518		$	8,428	$	8,708	$	—	$	181,654
Net income per diluted share	1.81			0.09		0.10		—		2.00
Effective tax rate	24.4		%							25.3		%
Three months ended December 31, 2015
	Reported GAAP measure			Intangible amortization expense		Restructuring & Integration charges		Other*		Non-GAAP measure
Operating income	$	254,311		11,743		17,666		—		283,720
Income before income taxes	220,516			11,743		17,666		1,500		251,425
Provision for income taxes	61,108			2,206		4,467		579		68,360
Consolidated net income	159,408			9,537		13,199		921		183,065
Noncontrolling interests	916			—		—		—		916
Net income attributable to shareholders	$	158,492		9,537		13,199		921		182,149
Net income per diluted share	1.69			0.10		0.14		0.01		1.94
Effective tax rate	27.7		%							27.2		%
Year Ended December 31, 2016
	Reported GAAP measure			Intangible amortization expense		Restructuring & Integration charges		Other*		Non-GAAP measure
Operating income	$	858,539		54,886		73,602		—		987,027
Income before income taxes	715,397			54,886		73,602		—		843,885
Provision for income taxes	190,674			17,226		22,977		—		230,877
Consolidated net income	524,723			37,660		50,625		—		613,008
Noncontrolling interests	1,973			1,275		—		—		3,248
Net income attributable to shareholders	$	522,750		36,385		50,625		—		609,760
Net income per diluted share	5.68			0.40		0.55		—		6.63
Effective tax rate	26.7		%							27.4		%
Year Ended December 31, 2015
	Reported GAAP measure			Intangible amortization expense		Restructuring & Integration charges		Other*		Non-GAAP measure
Operating income	$	824,482		51,036		68,765		—		944,283
Income before income taxes	692,183			51,036		68,765		3,935		815,919
Provision for income taxes	191,697			9,780		17,461		1,952		220,890
Consolidated net income	500,486			41,256		51,304		1,983		595,029
Noncontrolling interests	2,760			—		—		—		2,760
Net income attributable to shareholders	$	497,726		41,256		51,304		1,983		592,269
Net income per diluted share	5.20			0.43		0.54		0.02		6.19
Effective tax rate	27.7		%							27.1		%
*Other includes gain/loss on sale of investments and loss on prepayment of debt.

ARROW ELECTRONICS, INC.
SEGMENT INFORMATION
(In thousands)
(Unaudited)
	Quarter Ended						Year Ended
	December 31, 2016			December 31, 2015			December 31, 2016			December 31, 2015
Sales:
Global components	$	3,995,491		$	3,668,804		$	15,408,839		$	14,405,793
Global ECS	2,447,400			3,082,538			8,416,422			8,876,227
Consolidated	$	6,442,891		$	6,751,342		$	23,825,261		$	23,282,020
Operating income (loss):
Global components	$	161,804		$	149,940		$	686,466		$	649,396
Global ECS	158,011			173,919			441,803			424,063
Corporate (a)	(64,916		)	(69,548		)	(269,730		)	(248,977		)
Consolidated	$	254,899		$	254,311		$	858,539		$	824,482

(a) Includes restructuring, integration, and other charges of $12.4 million and $73.6 million for the fourth quarter and Year Ended 2016 and $17.7 million and $68.8 million for the fourth quarter and Year Ended 2015, respectively.

NON-GAAP SEGMENT RECONCILIATION
	Quarter Ended				Year Ended
	December 31, 2016		December 31, 2015		December 31, 2016		December 31, 2015
Global components operating income, as reported	$	161,804	$	149,940	$	686,466	$	649,396
Intangible assets amortization expense	7,497		6,657		31,621		27,125
Global components operating income, as adjusted	$	169,301	$	156,597	$	718,087	$	676,521
Global ECS operating income, as reported	$	158,011	$	173,919	$	441,803	$	424,063
Intangible assets amortization expense	6,137		5,086		23,265		23,911
Global ECS operating income, as adjusted	$	164,148	$	179,005	$	465,068	$	447,974

Contact:            Steven O’Brien,

Vice President, Investor Relations

303-824-4544

Media Contact:        John Hourigan,

Vice President, Global Communications

303-824-4586

EX-99.2

Fourth Quarter 2016 investor.arrow.com CFO Commentary As reflected in our earnings release, there are a number of items that impact the comparability of our results with those in the trailing quarter and prior quarter of last year. The discussion of our results may exclude these items to give you a better sense of our operating results. As always, the operating information we provide to you should be used as a complement to GAAP numbers. For a complete reconciliation between our GAAP and non-GAAP results, please refer to our earnings release and the earnings reconciliation found at the end of this document. The following reported and adjusted information included in this CFO commentary is unaudited and should be read in conjunction with the company’s 2016 Annual Report on form 10-K as filed with the Securities and Exchange Commission Record 2016 earnings per share of $5.68 grew 9% Y/Y; record non-GAAP earnings per share of $6.63 grew 7% Y/Y.

investor.arrow.com Fourth-Quarter 2016 CFO Commentary 2 Fourth-Quarter Summary We completed an exceptional year in 2016 with record sales, gross profit, earnings per share and non-GAAP earnings per share. Fourth-quarter results were within our expectations despite unfavorable changes in foreign currencies that understated year-over-year growth rates and were not factored into our prior guidance ranges. We delivered record fourth-quarter earnings per share and non-GAAP earnings per share. Fourth-quarter 2016 global component sales grew 9% year over year and global components achieved record fourth-quarter sales and gross profit. Our investments in our digital platform, as well as sales and engineering resources accelerated our growth. Asia sales grew 22% year over year. Americas sales grew 4% year over year. Europe again delivered sales growth up 2% year over year adjusted for changes in foreign currencies, the 15th straight quarter of adjusted year-over-year growth. Global components operating income increased 8% year over year. Fourth-quarter enterprise computing solutions sales declined 21% year over year. Compared to the fourth quarter of 2015, sales were negatively impacted by approximately $250 million from the later start to the quarter, and $250 million from a greater mix of software and services sales accounted under a net basis. Applying these impacts, we estimate enterprise computing solutions sales would be down approximately 5% year over year. We believe operating income, on a multi-quarter basis, is the best measure of our enterprise computing solutions business. In 2016 enterprise computing solutions operating income increased 4% year over year and increased 5% year over year adjusted for changes in foreign currencies. We delivered record fourth- quarter earnings per share and non-GAAP earnings per share.

investor.arrow.com Fourth-Quarter 2016 CFO Commentary 3 P&L Highlights* Q4 2016 Y/Y Change Y/Y Change Adjusted for Acquisitions & Currency Q/Q Change Sales $6,443 (5)% (4)% 9% Gross Profit Margin 12.8% +40bps +30bps -20bps Operating Income $255 flat 1% 28% Operating Margin 4.0% +20bps +20bps +60bps Non-GAAP Operating Income $281 (1)% flat 19% Non-GAAP Operating Margin 4.4% +20bps +20bps +40bps Net Income $165 4% 5% 40% Diluted EPS $1.81 7% 9% 41% Non-GAAP Net Income $182 flat 1% 27% Non-GAAP Diluted EPS $2.00 3% 4% 29% Consolidated Overview Fourth Quarter 2016 $ in millions, except per share data; may reflect rounding • Fourth-quarter sales were $6.44 billion – Sales decreased 5% year over year and increased 9% quarter over quarter – Sales decreased 4% year over year adjusted for the impact of acquisitions and changes in foreign currencies • Consolidated gross profit margin was 12.8% – Gross profit margin increased 40 basis points year over year due to a greater mix of global components sales and higher enterprise computing solutions gross margins – Gross profit margin decreased 20 basis points quarter over quarter due principally to a greater mix of enterprise computing solutions sales • Operating income was $255 million – Flat year over year – Operating income increased 1% year over year adjusted for the impact of acquisitions and changes in foreign currencies – Operating expenses as a percentage of sales were 8.8%, up 10 basis points year over year

investor.arrow.com Fourth-Quarter 2016 CFO Commentary 4 • Non-GAAP operating income was $281 million – Decreased 1% year over year – Flat year over year adjusted for the impact of acquisitions and changes in foreign currencies – Non-GAAP operating expenses as a percentage of sales were 8.4%, up 20 basis points year over year as we continued to invest in growth initiatives • Effective tax rate for the quarter was 24.4% • Non-GAAP effective tax rate was 25.3% • Net income was $165 million – Increased 4% year over year – Increased 5% year over year adjusted for the impact of acquisitions and changes in foreign currencies • Earnings per share were $1.81 on a diluted basis – Increased 7% year over year – Increased 9% year over year adjusted for the impact of acquisitions and changes in foreign currencies • Non-GAAP net income was $182 million – Flat year over year – Increased 1% year over year adjusted for the impact of acquisitions and changes in foreign currencies • Non-GAAP earnings per share were $2.00 on a diluted basis – Increased 3% year over year – Increased 4% year over year adjusted for the impact of acquisitions and changes in foreign currencies A reconciliation of non-GAAP adjusted financial measures, including sales, as adjusted, operating income, as adjusted, net income attributable to shareholders, as adjusted, and net income per share, as adjusted, to GAAP financial measures is presented in the reconciliation tables included herein.

investor.arrow.com Fourth-Quarter 2016 CFO Commentary 5 Components Global • Sales increased 9% year over year • Lead times are in line with historical norms • Backlog increased year over year • Book-to-bill was 1.09, up from 1.05 in the fourth quarter of 2015 • Gross profit dollars increased 2% year over year • Gross margin decreased 100 basis points year over year – The decline was principally attributable to a higher relative contribution from the Asia region • Operating margin of 4% decreased 10 basis points year over year • Non-GAAP operating margin of 4.2% decreased 10 basis points year over year • Return on working capital declined 240 basis points year over year, due to investments in inventory for new supplier engagements and a successful deployment of part of our new ERP system in the Americas. Global components posted record fourth- quarter sales and gross profit. Non-GAAP Operating Income ($ in millions)

investor.arrow.com Fourth-Quarter 2016 CFO Commentary 6 Components Americas • Sales increased 4% year over year – Growth driven by our digital platform and reverse logistics – Growth in the lighting and aerospace & defense verticals year over year Americas components sales increased 4% year over year. Sales ($ in millions)

investor.arrow.com Fourth-Quarter 2016 CFO Commentary 7 Components Europe • Sales increased 2% year over year adjusted for the impact of changes in foreign currencies – Sales decreased 1% year over year as reported – Growth in the aerospace & defense, transportation, and lighting verticals year over year Europe components sales increased 2% year over year adjusted for changes in foreign currencies. Sales ($ in millions)

investor.arrow.com Fourth-Quarter 2016 CFO Commentary 8 Components Asia • Sales increased 22% year over year – Strong growth in the industrial power, wireless, and transportation verticals year over year Asia components sales increased 22% year over year. Sales ($ in millions)

investor.arrow.com Fourth-Quarter 2016 CFO Commentary 9 Enterprise Computing Solutions Global • Sales decreased 21% year over year – Sales growth was negatively impacted by approximately $250 million due to the later start of the fourth quarter of 2016 compared to the fourth quarter of 2015 – Sales growth was negatively impacted by approximately $250 million year over year due to the recognition of software and services sales on a net basis • Gross profit dollars decreased 7% year over year – Gross margin increased 180 basis points year over year • Operating margin of 6.5% increased 90 basis points year over year • Non-GAAP operating margin of 6.7% increased 90 basis points year over year • Return on working capital increased year over year for the 13th consecutive quarter Enterprise computing solutions posted record fourth-quarter operating margin. Non-GAAP Operating Income ($ in millions)

investor.arrow.com Fourth-Quarter 2016 CFO Commentary 10 Enterprise Computing Solutions Americas • Sales decreased 20% year over year – Sales decreased 22% year over year adjusted for acquisitions and changes in foreign currencies – Hardware sales, including servers, networking and storage declined year over year – Full-year 2016 operating income increased year over year ECS Americas operating income increased year over year in 2016. Sales ($ in millions)

investor.arrow.com Fourth-Quarter 2016 CFO Commentary 11 Enterprise Computing Solutions Europe • Sales decreased 17% year over year adjusted for the impact of acquisitions and changes in foreign currencies – Sales decreased 22% year over year as reported – Growth in security and virtualization software, and services year over year adjusted for the impact of acquisitions and changes in foreign currencies – Full-year 2016 operating income increased year over year ECS Europe operating income increased year over year in 2016. Sales ($ in millions)

investor.arrow.com Fourth-Quarter 2016 CFO Commentary 12 P&L Highlights* 2016 Y/Y Change Y/Y Change Adjusted for Acquisitions & Currency Sales $23,825 2% 0.5% Gross Profit Margin 13.2% +20bps +10bps Operating Income $859 4% 2% Operating Margin 3.6% +10bps +10bps Non-GAAP Operating Income $987 5% 3% Non-GAAP Operating Margin 4.1% flat +10bps Net Income $523 5% 4% Diluted EPS $5.68 9% 8% Non-GAAP Net Income $610 3% 2% Non-GAAP Diluted EPS $6.63 7% 6% Consolidated Overview Full- Year 2016 $ in millions, except per share data; may reflect rounding • 2016 sales were $23.8 billion – Sales increased 2% year over year – Adjusted for the impact of acquisitions and changes in foreign currencies, sales increased 0.5% year over year • Consolidated gross profit margin was 13.2% – Increased 20 basis points year over year principally due to higher enterprise computing solutions margins and an increased in global components within our mix • Operating income margin was 3.6%, up 10 basis points year over year – Operating expenses as a percentage of sales were 9.6%, up 10 basis points year over year • Non-GAAP operating income margin was 4.1%, flat year over year – Non-GAAP operating expenses as a percentage of sales were 9.1%, up 10 basis points year over year • Effective tax rate was 26.7% • Non-GAAP effective tax rate was 27.4% • Earnings per share on a diluted basis were $5.68 – Increased 9% year over year – Increased 8% year over year adjusted for acquisitions and changes in foreign currencies • Non-GAAP earnings per share on a diluted basis were $6.63 – Increased 7% year over year – Increased 6% year over year adjusted for acquisitions and changes in foreign currencies

investor.arrow.com Fourth-Quarter 2016 CFO Commentary 13 Cash Flow from Operations Cash flow from operating activities was $220 million in the quarter and was $356 million in 2016. Working Capital Working capital to sales was 14.9% in the quarter, up 210 basis points year over year. Working capital to sales was 15.4% in 2016, up 30 basis points year over year. Return on working capital was 29.4% in the quarter, down 370 basis points year over year. Return on working capital was 26.9% in 2016, up 10 basis points year over year. Return on Invested Capital Return on invested capital was 12.1% in the quarter and 10.5% for the full year, ahead of our weighted average cost of capital. Share Buyback We repurchased approximately $49 million of our stock. Total cash returned to shareholders over the last 12 months of approximately $200 million. Debt and Liquidity Net-debt-to-last-12-months EBITDA ratio is approximately 2.1x. Total liquidity of $2.8 billion when including cash of $534 million. We repurchased approximately $49 million of our stock in the fourth quarter, bringing total cash returned to shareholders in 2016 to approximately $200 million.

investor.arrow.com Fourth-Quarter 2016 CFO Commentary 14 Arrow Electronics Outlook Guidance We are expecting the average USD-to-Euro exchange rate for the first quarter of 2017 to be $1.07 to €1 compared to $1.10 to €1 in the first quarter of 2016. Assuming exchange rates remain unchanged for the remainder of the quarter, we expect changes in foreign currencies will negatively impact year-over-year sales growth by approximately $70 million, and year-over-year earnings per share growth by $.03. First-Quarter 2017 Guidance Consolidated Sales $5.375 billion to $5.775 billion Global Components $3.775 billion to $3.975 billion Global ECS $1.6 billion to $1.8 billion Diluted Earnings Per Share $1.18 to 1.30 Non-GAAP Diluted Earnings Per Share $1.37 to 1.49 * Assumes average diluted shares outstanding of 91 million and an average tax rate of 27 to 29 %.

investor.arrow.com Fourth-Quarter 2016 CFO Commentary 15 Risk Factors The discussion of the company’s business and operations should be read together with the risk factors contained in Item 1A of its 2016 Annual Report on Form 10-K, filed with the Securities and Exchange Commission, which describe various risks and uncertainties to which the company is or may become subject. If any of the described events occur, the company’s business, results of operations, financial condition, liquidity, or access to the capital markets could be materially adversely affected. Information Relating to Forward-Looking Statements This press release includes forward-looking statements that are subject to numerous assumptions, risks, and uncertainties, which could cause actual results or facts to differ materially from such statements for a variety of reasons, including, but not limited to: industry conditions, company’s implementation of its new enterprise resource planning system, changes in product supply, pricing and customer demand, competition, other vagaries in the global components and global enterprise computing solutions markets, changes in relationships with key suppliers, increased profit margin pressure, effects of additional actions taken to become more efficient or lower costs, risks related to the integration of acquired businesses, changes in legal and regulatory matters, and the company’s ability to generate additional cash flow. Forward-looking statements are those statements which are not statements of historical fact. These forward-looking statements can be identified by forward-looking words such as “expects,” “anticipates,” “intends,” “plans,” “may,” “will,” “believes,” “seeks,” “estimates,” and similar expressions. Shareholders and other readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. The company undertakes no obligation to update publicly or revise any of the forward-looking statements. For a further discussion of factors to consider in connection with these forward-looking statements, investors should refer to Item 1A Risk Factors of the company’s Annual Report on Form 10-K for the year ended December 31, 2016.

investor.arrow.com Fourth-Quarter 2016 CFO Commentary 16 In addition to disclosing financial results that are determined in accordance with accounting principles generally accepted in the United States (“GAAP”), the company also provides certain non- GAAP financial information relating to sales, operating income, net income attributable to shareholders, and net income per basic and diluted share. The company provides sales on a non-GAAP basis adjusted for the impact of changes in foreign currencies and the impact of acquisitions by adjusting the company’s operating results for businesses acquired, including the amortization expense related to acquired intangible assets, as if the acquisitions had occurred at the beginning of the earliest period presented (referred to as “impact of acquisitions”). Operating income, net income attributable to shareholders, and net income per basic and diluted share are adjusted for certain charges, credits, gains, and losses that the company believes impact the comparability of its results of operations. These charges, credits, gains, and losses arise out of the company’s efficiency enhancement initiatives, acquisitions (including intangible assets amortization expense), loss on prepayment of debt, and (gain)/loss on investments. A reconciliation of the company’s non-GAAP financial information to GAAP is set forth in the tables below. The company believes that such non-GAAP financial information is useful to investors to assist in assessing and understanding the company’s operating performance and underlying trends in the company’s business because management considers these items referred to above to be outside the company’s core operating results. This non-GAAP financial information is among the primary indicators management uses as a basis for evaluating the company’s financial and operating performance. In addition, the company’s Board of Directors may use this non-GAAP financial information in evaluating management performance and setting management compensation. The presentation of this additional non-GAAP financial information is not meant to be considered in isolation or as a substitute for, or alternative to, operating income, net income attributable to shareholders and net income per basic and diluted share determined in accordance with GAAP. Analysis of results and outlook on a non-GAAP basis should be used as a complement to, and in conjunction with, data presented in accordance with GAAP. Certain Non-GAAP Financial Information The company believes that such non-GAAP financial information is useful to investors to assist in assessing and understanding the company’s operating performance.

investor.arrow.com Fourth-Quarter 2016 CFO Commentary 17 Three months ended December 31, 2016 Reported GAAP measure Intangible amortization expense Restructuring & Integration charges Other* Non-GAAP measure Operating income $ 254,899 $ 13,634 $ 12,441 $ — $ 280,974 Income before income taxes 218,191 13,634 12,441 — 244,266 Provision for income taxes 53,233 4,870 3,733 — 61,836 Consolidated net income 164,958 8,764 8,708 — 182,430 Noncontrolling interests 440 336 — — 776 Net income attributable to shareholders $ 164,518 $ 8,428 $ 8,708 $ — $ 181,654 Net income per diluted share 1.81 0.09 0.10 — 2.00 Effective tax rate 24.4 % 25.3 % Three months ended December 31, 2015 Reported GAAP measure Intangible amortization expense Restructuring & Integration charges Other* Non-GAAP measure Operating income $ 254,311 11,743 17,666 — 283,720 Income before income taxes 220,516 11,743 17,666 1,500 251,425 Provision for income taxes 61,108 2,206 4,467 579 68,360 Consolidated net income 159,408 9,537 13,199 921 183,065 Noncontrolling interests 916 — — — 916 Net income attributable to shareholders $ 158,492 9,537 13,199 921 182,149 Net income per diluted share 1.69 0.10 0.14 0.01 1.94 Effective tax rate 27.7 % 27.2 % Three months ended October 1, 2016 Reported GAAP measure Intangible amortization expense Restructuring & Integration charges Other* Non-GAAP measure Operating income $ 198,684 13,893 24,267 — 236,844 Income before income taxes 162,766 13,893 24,267 — 200,926 Provision for income taxes 44,931 4,959 7,439 — 57,329 Consolidated net income 117,835 8,934 16,828 — 143,597 Noncontrolling interests 108 347 — — 455 Net income attributable to shareholders $ 117,727 8,587 16,828 — 143,142 Net income per diluted share 1.28 0.09 0.18 — 1.56 Effective tax rate 27.6 % 28.5 % *Other includes gain/loss on sale of investments and loss on prepayment of debt. **The sum of the components for diluted EPS, as adjusted may not agree to totals, as presented, due to rounding. Earnings Reconciliation ($ in thousands, except per share data)