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): May 3, 2018

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 240.14a-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))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION

On May 3, 2018, the Registrant issued a press release announcing its first quarter 2018 earnings.  A copy of the press release is attached hereto as an Exhibit (99.1).

On May 3, 2018, the Registrant also issued a press release containing a first quarter 2018 CFO commentary related to its first quarter 2018 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

(d)           EXHIBITS

99.1 Earnings press release dated May 3, 2018.

99.2 CFO commentary press release dated May 3, 2018.

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:	May 3, 2018	By:	/s/ Gregory Tarpinian
		Name:	Gregory Tarpinian
		Title:	Secretary and Chief Legal Officer

EXHIBIT INDEX

Exhibit	Description
99.1	Earnings press release issued by Arrow Electronics, Inc., dated May 3, 2018.
99.2	CFO commentary press release issued by Arrow Electronics, Inc., dated May 3, 2018.

EX-99.1

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

Exhibit 99.1

Arrow Electronics Reports First-Quarter 2018 Results

-- Record First-Quarter Sales, Gross Profit, Operating Income, and Earnings per Share --

-- First-Quarter Earnings Per Share of $1.56; Non-GAAP Earnings Per Share of $1.88 --

CENTENNIAL, Colo.--(BUSINESS WIRE)-May 3, 2018--Arrow Electronics, Inc. (NYSE:ARW) today reported first-quarter 2018 sales of $6.88 billion, an increase of 20 percent from sales of $5.74 billion in the first quarter of 2017. First-quarter net income of $139 million, or $1.56 per share on a diluted basis, compared with net income of $115 million, or $1.27 per share on a diluted basis, in the first quarter of 2017. Excluding certain items¹, net income would have been $168 million, or $1.88 per share on a diluted basis, in the first quarter of 2018, compared with net income of $132 million, or $1.46 per share on a diluted basis, in the first quarter of 2017. Excluding certain items¹, net income increased 27 percent year over year, and earnings per share on a diluted basis increased 29 percent year over year.

“We continue to expand our line card, our services, and the solutions we bring to the marketplace to capitalize on the exciting growth opportunities from IoT, industrial automation, and smart cities, homes, and vehicles,” said Michael J. Long, chairman, president, and chief executive officer. “We are delivering differentiated performance as evidenced by our fifth straight quarter of record results.”

Global components first-quarter sales of $4.93 billion increased 21 percent year over year. First-quarter sales, as adjusted, increased 16 percent year over year. Americas components sales increased 15 percent year over year. Sales in the region, as adjusted, increased 13 percent year over year. Asia-Pacific components sales increased 20 percent year over year. Europe components sales increased 32 percent year over year. Sales in the region, as adjusted, increased 16 percent year over year. Global components first-quarter operating income increased 32 percent year over year. “As we expected, we are capturing strong leverage on our growing sales,” said Mr. Long.

Global enterprise computing solutions first-quarter sales of $1.95 billion increased 16 percent year over year. First-quarter sales, as adjusted, increased 11 percent year over year. Americas enterprise computing solutions sales increased 9 percent year over year. Sales in the region, as adjusted, increased 12 percent year over year. Europe enterprise computing solutions sales increased 29 percent year over year. Sales in the region, as adjusted, increased 9 percent year over year. Global enterprise computing solutions first-quarter operating income grew 2 percent year over year and grew 1 percent year over year excluding amortization of intangibles expense. The divestiture of the systems integration business on March 2, 2018 resulted in an approximately $2 million unfavorable operating income comparison to the first quarter of 2017.

“Value-added resellers and managed service providers are moving their businesses to Arrow due to our leadership in newer technologies, including cloud, security, and software-defined data center solutions,” added Mr. Long.

“Return on invested capital increased year over year for the third straight quarter. First-quarter cash flow from operations was a seasonally negative $75 million. We expect the substantial investments we made to support our rapid growth, and our disciplined approach to working capital management, to drive further improvements in returns and cash flow in the coming quarters,” said Chris Stansbury, senior vice president and chief financial officer. “We remain committed to returning excess cash to shareholders. During the first quarter, we returned approximately $40 million to shareholders through our stock repurchase program. We had approximately $319 million of remaining authorization under our share repurchase program at the end of the first quarter.”

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 second quarter, we believe that total sales will be between $7 billion and $7.4 billion, with global components sales between $5 billion and $5.2 billion, and global enterprise computing solutions sales between $2 billion and $2.2 billion. As a result of this outlook, we expect earnings per share on a diluted basis, to be in the range of $1.78 to $1.90, and earnings per share on a diluted basis, excluding certain items¹, to be in the range of $2.08 to $2.20 per share. Our guidance assumes interest expense will be approximately $48 million. Our guidance also assumes an average tax rate of 23.5 percent to 25.5 percent and average diluted shares outstanding are expected to be approximately 89 million. We are expecting the average USD-to-Euro exchange rate for the second quarter to be approximately $1.23 to €1,” said Mr. Stansbury.

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

Arrow Electronics (www.arrow.com) is a global provider of products, services and solutions to industrial and commercial users of electronic components and enterprise computing solutions. Arrow serves as a supply channel partner for more than 150,000 original equipment manufacturers, value-added resellers, contract manufacturers, and commercial customers through a global network. The company maintains over 300 sales facilities and 45 distribution and value-added centers, serving over 80 countries.

Information Relating to Forward-Looking Statements

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

For a further discussion of factors to consider in connection with these forward-looking statements, investors should refer to Item 1A Risk Factors of the company’s Annual Report on Form 10-K for the year ended Dec. 31, 2017.

Certain Non-GAAP Financial Information

In addition to disclosing financial results that are determined in accordance with accounting principles generally accepted in the United States (“GAAP”), the company also provides certain non-GAAP financial information relating to sales, operating income, net income attributable to shareholders, and net income per basic and diluted share. The company provides sales, income, or expense on a non-GAAP basis adjusted for the impact of changes in foreign currencies and the impact of acquisitions/dispositions by adjusting the company's operating results, including the amortization expense related to acquired/disposed intangible assets, as if the acquisitions/dispositions had occurred at the beginning of the earliest period presented (referred to as "impact of acquisitions" and "impact of dispositions"). Operating income, net income attributable to shareholders, and net income per basic and diluted share are adjusted to exclude identifiable intangible amortization, restructuring, integration, and other charges, and 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/dispositions (including intangible assets amortization expense), and financing activities. 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
	March 31, 2018			April 1, 2017
				(adjusted)
Sales	$	6,875,613		$	5,736,780
Cost of sales	6,006,669			4,975,583
Gross profit	868,944			761,197
Operating expenses:
Selling, general, and administrative expenses	562,969			515,526
Depreciation and amortization	47,247			37,141
Loss on disposition of businesses, net	1,562			—
Restructuring, integration, and other charges	21,171			15,505
	632,949			568,172
Operating income	235,995			193,025
Equity in earnings (losses) of affiliated companies	(673		)	925
Gain (loss) on investments, net	(2,452		)	1,982
Post-retirement expense	1,231			1,800
Interest and other financing expense, net	45,179			38,249
Income before income taxes	186,460			155,883
Provision for income taxes	46,590			39,564
Consolidated net income	139,870			116,319
Noncontrolling interests	776			1,582
Net income attributable to shareholders	$	139,094		$	114,737
Net income per share:
Basic	$	1.58		$	1.29
Diluted	$	1.56		$	1.27
Weighted-average shares outstanding:
Basic	87,955			89,262
Diluted	89,035			90,541

ARROW ELECTRONICS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands except par value)
(Unaudited)
	March 31, 2018			December 31, 2017
				(adjusted)
ASSETS
Current assets:
Cash and cash equivalents	$	548,644		$	730,083
Accounts receivable, net	7,378,453			8,125,588
Inventories	3,572,714			3,302,518
Other current assets	267,402			256,028
Total current assets	11,767,213			12,414,217
Property, plant, and equipment, at cost:
Land	13,288			12,866
Buildings and improvements	163,901			160,664
Machinery and equipment	1,362,693			1,330,730
	1,539,882			1,504,260
Less: Accumulated depreciation and amortization	(690,015		)	(665,785		)
Property, plant, and equipment, net	849,867			838,475
Investments in affiliated companies	88,166			88,347
Intangible assets, net	348,378			286,215
Goodwill	2,703,542			2,470,047
Other assets	367,639			361,966
Total assets	$	16,124,805		$	16,459,267
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	6,110,752		$	6,756,830
Accrued expenses	806,122			841,675
Short-term borrowings, including current portion of long-term debt	38,220			356,806
Total current liabilities	6,955,094			7,955,311
Long-term debt	3,533,050			2,933,045
Other liabilities	487,847			572,971
Commitments and contingencies
Equity:
Shareholders' equity:
Common stock, par value $1:
Authorized - 160,000 shares in both 2018 and 2017
Issued - 125,424 shares in both 2018 and 2017	125,424			125,424
Capital in excess of par value	1,105,108			1,114,167
Treasury stock (37,804 and 37,733 shares in 2018 and 2017, respectively), at cost	(1,787,653		)	(1,762,239		)
Retained earnings	5,758,234			5,596,786
Accumulated other comprehensive loss	(101,505		)	(124,883		)
Total shareholders' equity	5,099,608			4,949,255
Noncontrolling interests	49,206			48,685
Total equity	5,148,814			4,997,940
Total liabilities and equity	$	16,124,805		$	16,459,267

ARROW ELECTRONICS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
	Quarter Ended
		March 31, 2018			April 1, 2017
Cash flows from operating activities:					(adjusted)
Consolidated net income		$	139,870		$	116,319
Adjustments to reconcile consolidated net income to net cash used for operations:
Depreciation and amortization		47,247			37,141
Amortization of stock-based compensation		12,994			11,575
Equity in (earnings) losses of affiliated companies		673			(925		)
Deferred income taxes		(2,818		)	13,938
Other		5,917			1,445
Change in assets and liabilities, net of effects of acquired and disposed businesses:
Accounts receivable		789,843			948,621
Inventories		(260,620		)	(38,185		)
Accounts payable		(691,818		)	(982,355		)
Accrued expenses		(22,087		)	(93,865		)
Other assets and liabilities		(94,278		)	(34,599		)
Net cash used for operating activities		(75,077		)	(20,890		)
Cash flows from investing activities:
Cash consideration paid for acquired businesses		(331,467		)	—
Proceeds from disposition of businesses		34,291			—
Acquisition of property, plant, and equipment		(34,735		)	(62,118		)
Proceeds from sale of property, plant, and equipment		—			7,886
Other		(4,500		)	—
Net cash used for investing activities		(336,411		)	(54,232		)
Cash flows from financing activities:
Change in short-term and other borrowings		(18,382		)	76,402
Proceeds from long-term bank borrowings, net		601,386			62,500
Redemption of notes		(300,000		)	—
Proceeds from exercise of stock options		4,992			17,259
Repurchases of common stock		(52,513		)	(68,847		)
Purchase of shares from noncontrolling interest		—			(23,350		)
Net cash provided by financing activities		235,483			63,964
Effect of exchange rate changes on cash		(5,434		)	(1,600		)
Net decrease in cash and cash equivalents		(181,439		)	(12,758		)
Cash and cash equivalents at beginning of period		730,083			534,320
Cash and cash equivalents at end of period		$	548,644		$	521,562

ARROW ELECTRONICS, INC.
NON-GAAP SALES RECONCILIATION
(In thousands)
(Unaudited)
	Quarter Ended
	March 31, 2018			April 1, 2017			% Change
				(adjusted)
Consolidated sales, as reported	$	6,875,613		$	5,736,780		19.9	%
Impact of changes in foreign currencies	—			268,779
Impact of acquisitions	—			37,298
Impact of dispositions	(27,493		)	(57,907		)
Consolidated sales, as adjusted	$	6,848,120		$	5,984,950		14.4	%
Global components sales, as reported	$	4,929,932		$	4,058,803		21.5	%
Impact of changes in foreign currencies	—			175,038
Impact of acquisitions	—			20,588
Global components sales, as adjusted	$	4,929,932		$	4,254,429		15.9	%
Americas Components sales, as reported	$	1,796,698		$	1,563,545		14.9	%
Impact of changes in foreign currencies	—			8,118
Impact of acquisitions	—			20,588
Americas Components sales, as adjusted	$	1,796,698		$	1,592,251		12.8	%
Europe components sales, as reported	$	1,478,386		$	1,118,279		32.2	%
Impact of changes in foreign currencies	—			157,602
Europe components sales, as adjusted	$	1,478,386		$	1,275,881		15.9	%
Asia components sales, as reported	$	1,654,848		$	1,376,979		20.2	%
Impact of changes in foreign currencies	—			9,318
Asia components sales, as adjusted	$	1,654,848		$	1,386,297		19.4	%
Global ECS sales, as reported	$	1,945,681		$	1,677,977		16.0	%
Impact of changes in foreign currencies	—			93,741
Impact of acquisitions	—			16,710
Impact of dispositions	(27,493		)	(57,907		)
Global ECS sales, as adjusted	$	1,918,188		$	1,730,521		10.8	%
Europe ECS sales, as reported	$	750,270		$	583,334		28.6	%
Impact of changes in foreign currencies	—			87,855
Impact of acquisitions	—			16,710
Impact of dispositions	—			(889		)
Europe ECS sales, as adjusted	$	750,270		$	687,010		9.2	%
Americas ECS sales, as reported	$	1,195,411		$	1,094,643		9.2	%
Impact of changes in foreign currencies	—			5,886
Impact of dispositions	(27,493		)	(57,018		)
Americas ECS sales, as adjusted	$	1,167,918		$	1,043,511		11.9	%

ARROW ELECTRONICS, INC.
NON-GAAP EARNINGS RECONCILIATION
(In thousands except per share data)
(Unaudited)
Three months ended March 31, 2018
	Reported GAAP measure			Intangible amortization expense		Restructuring & Integration charges		Other*			Non-GAAP measure
Operating income	$	235,995		$	13,520	$	21,171	$	1,562		$	272,248
Income before income taxes	186,460			13,520		21,171		4,014			225,165
Provision for income taxes	46,590			3,604		5,535		782			56,511
Consolidated net income	139,870			9,916		15,636		3,232			168,654
Noncontrolling interests	776			153		—		—			929
Net income attributable to shareholders	$	139,094		$	9,763	$	15,636	$	3,232		$	167,725
Net income per diluted share	$	1.56		$	0.11	$	0.18	$	0.04		$	1.88
Effective tax rate	25.0		%								25.1		%
Three months ended April 1, 2017 (adjusted)
	Reported GAAP measure			Intangible amortization expense		Restructuring & Integration charges		Other**			Non-GAAP measure
Operating income	193,025			12,900		15,505		—			221,430
Income before income taxes	155,883			12,900		15,505		(1,982		)	182,306
Provision for income taxes	39,564			4,561		4,997		(765		)	48,357
Consolidated net income	116,319			8,339		10,508		(1,217		)	133,949
Noncontrolling interests	1,582			251		—		—			1,833
Net income attributable to shareholders	$	114,737		8,088		10,508		(1,217		)	132,116
Net income per diluted share	$	1.27		$	0.09	$	0.12	$	(0.01	)	$	1.46
Effective tax rate	25.4		%								26.5		%
* Other includes loss on disposition of businesses and gain (loss) on investments, net.
** Other includes gain (loss) on investments, net.

ARROW ELECTRONICS, INC.
SEGMENT INFORMATION
(In thousands)
(Unaudited)
	Quarter Ended
	March 31, 2018			April 1, 2017
Sales:				(adjusted)
Global components	$	4,929,932		$	4,058,803
Global ECS	1,945,681			1,677,977
Consolidated	$	6,875,613		$	5,736,780
Operating income (loss):
Global components	$	229,546		$	173,533
Global ECS	83,806			82,189
Corporate (a)	(77,357		)	(62,697		)
Consolidated	$	235,995		$	193,025

(a) Includes restructuring, integration, and other charges of $21.2 million and$15.5 million for the first quarter of 2018and2017, respectively, as well as a net loss on the disposition of businesses of $1.6 million for the first quarter of 2018.

NON-GAAP SEGMENT RECONCILIATION
	Quarter Ended
	March 31, 2018		April 1, 2017
			(adjusted)
Global components operating income, as reported	$	229,546	$	173,533
Intangible assets amortization expense	8,599		7,399
Global components operating income, as adjusted	$	238,145	$	180,932
Global ECS operating income, as reported	$	83,806	$	82,189
Intangible assets amortization expense	4,921		5,501
Global ECS operating income, as adjusted	$	88,727	$	87,690

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

1investor.arrow.com First Quarter 2018 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 Form 10-Q for the quarterly period ended March 31, 2018, and the Annual Report on form 10-K as filed with the Securities and Exchange Commission. First-quarter 2018 diluted earnings per share increased 23% year over year; non GAAP diluted earnings per share increased 29% year over year.

First-Quarter 2018 CFO Commentary 2investor.arrow.com First-Quarter Summary Continued strong growth momentum for our business drove record first-quarter sales, gross profit, operating income, and earnings per share. First-quarter sales were above the high end of our expectation on strong demand for electronic components and IT solutions. First-quarter gross profit, operating income, and earnings per share year-over-year growth accelerated compared to the fourth quarter of 2017. Record first-quarter global components sales exceeded our expectation. First- quarter global component sales increased 21% year over year. Asia sales increased 20% year over year driven by our investments in sales and engineering resources. Europe sales increased 32% year over year and increased 16% year over year adjusted for changes in foreign currencies, the 20th straight quarter of adjusted year-over-year growth. Americas sales increased 15% year over year with digital sales the principal driver. Global components delivered healthy leverage as operating income increased 32% year over year. First-quarter enterprise computing solutions sales increased 16% year over year and were above our expectation. Europe sales increased 29% year over year and increased 9% year over year adjusted for an acquisition, a divestiture, and changes in foreign currencies. Americas sales increased 9% year over year and increased 12% adjusted for a divestiture and changes in foreign currencies. First-quarter enterprise computing solutions operating income increased 2% year over year and non-GAAP operating income increased 1% year over year. Operating income would have increased 4% year over year adjusted for the systems integration business divestiture that was not reflected in prior guidance. Please note, prior period figures have been adjusted for new accounting standards. Continued strong growth resulted in record first-quarter sales, gross profit, operating income, and earnings per share.

First-Quarter 2018 CFO Commentary 3investor.arrow.com P&L Highlights* Q1 2018 Y/Y Change Y/Y Change Adjusted for Acquisitions, Dispositions, & Currency Q/Q Change Sales $6,876 20% 14% (9)% Gross Profit Margin 12.6% -70 bps -70 bps 30 bps Operating Income $236 22% 14% (18)% Operating Margin 3.4% flat flat -40 bps Non-GAAP Operating Income $272 23% 14% (20)% Non-GAAP Operating Margin 4.0% 10 bps flat -50 bps Net Income $139 21% 14% 159% Diluted EPS $1.56 23% 15% 160% Non-GAAP Net Income $168 27% 18% (20)% Non-GAAP Diluted EPS $1.88 29% 20% (19)% Consolidated Overview First Quarter 2018 $ in millions, except per share data; may reflect rounding. Prior periods adjusted for new accounting standards. • Consolidated sales were $6.88 billion – Above the high end of our prior expectation of $6.4- $6.8 billion • Consolidated gross profit margin was 12.6% – Decreased 70 basis points points year over year due to enterprise computing solutions business mix, and global components business mix in Asia and Europe – Increased 30 basis points quarter over quarter due to higher global components margins in all regions and a larger contribution from global components relative to enterprise computing solutions • Operating income margin was 3.4% and non-GAAP operating income margin was 4.0% – Operating expenses as a percentage of sales were 8.9%, down 70 basis points year over year – Non-GAAP operating expenses as a percentage of sales were 8.7%, down 70 basis points year over year – The decline in operating expense as a percentage of sales reflects the operational efficiencies we achieved to align our costs to our business mix • Interest and other expense, net was $45 million – Increased $7 million year over year due to higher debt balances and higher interest rates on floating- rate debt

First-Quarter 2018 CFO Commentary 4investor.arrow.com • Effective tax rate for the quarter was 25.0%, and non- GAAP effective tax rate was 25.1% – Non-GAAP effective tax rate was above the midpoint of our longer term range of 23.5-25.5% • Diluted shares outstanding were 89 million – In-line with our prior expectation of 89 million • Diluted earnings per share were $1.56 – In line with our prior expectation of $1.50 - 1.62 • Non-GAAP diluted earnings per share were $1.88 – Above the high end of our prior expectation of $1.74 - 1.86 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.

First-Quarter 2018 CFO Commentary 5investor.arrow.com $240 $220 $200 $180 $160 $140 $120 Q1-'17 Q2-'17 Q3-'17 Q4-'17 Q1-'18 $181 $204 $220 $224 $238 Components Global • Sales increased 21% year over year – Increased 16% year over year adjusted for acquisitions and changes in foreign currencies • Lead times extended • Backlog increased significantly year over year • Book-to-bill was 1.22, up from 1.14 in the first quarter of 2017 • Cancellation rates remain within normal ranges • Operating margin of 4.7% increased 40 basis points year over year • Non-GAAP operating margin of 4.8% increased 40 basis points year over year – Margin increased in all three regions led by Europe • Return on working capital increased 110 basis points year over year due to growing returns on working capital investments Global components posted record first- quarter sales and operating income. Non-GAAP Operating Income ($ in millions)

First-Quarter 2018 CFO Commentary 6investor.arrow.com $2,200 $2,000 $1,800 $1,600 $1,400 $1,200 $1,000 Q1-'17 Q2-'17 Q3-'17 Q4-'17 Q1-'18 $1,564 $1,700 $1,817 $1,930 $1,797 Components Americas • Sales increased 15% year over year – Sales increased 13% adjusted for acquisitions and changes in foreign currencies – Record first-quarter sales – Strong growth in digital sales – Strong growth in the aerospace & defense, consumer, data processing, and transportation verticals year over year – Growth in the alternative energy and medical devices verticals, and from large supply chain customers Americas components sales increased 15% year over year. Sales ($ in millions)

First-Quarter 2018 CFO Commentary 7investor.arrow.com $1,500 $1,400 $1,300 $1,200 $1,100 $1,000 Q1-'17 Q2-'17 Q3-'17 Q4-'17 Q1-'18 $1,118 $1,192 $1,262 $1,296 $1,478 Components Europe • Sales increased 32% year over year – Sales increased 16% year over year adjusted for changes in foreign currencies – Record first-quarter sales – Strong growth in core components distribution and increasing contribution from digital sales – Strong growth in the aerospace and defense, lighting, and transportation verticals year over year, and from large supply chain customers Europe components sales increased 32% year over year. Sales ($ in millions)

First-Quarter 2018 CFO Commentary 8investor.arrow.com $1,800 $1,700 $1,600 $1,500 $1,400 $1,300 $1,200 Q1-'17 Q2-'17 Q3-'17 Q4-'17 Q1-'18 $1,377 $1,570 $1,786 $1,719 $1,655 Components Asia • Sales increased 20% year over year – Sales increased 19% adjusted for changes in foreign currencies – Record first-quarter sales – Strong growth in core components – Strong growth in the IoT and transportation verticals year over year, and from large supply chain customers Asia components sales increased 20% year over year. Sales ($ in millions)

First-Quarter 2018 CFO Commentary 9investor.arrow.com $180 $160 $140 $120 $100 $80 $60 Q1-'17 Q2-'17 Q3-'17 Q4-'17 Q1-'18 $88 $112 $100 $167 $89 Enterprise Computing Solutions Global • Sales increased 16% year over year – Sales increased 11% year over year adjusted for changes in foreign currencies, an acquisition and two divestitures • Billings increased at a double-digit rate year over year adjusted for changes in foreign currencies • Operating margin of 4.3% decreased 60 basis points year over year • Non-GAAP operating margin of 4.6% decreased 70 basis points year over year – The decrease was due to product and customer mix in the Americas region • Return on working capital continues to excel • Prior periods adjusted for new accounting standards Enterprise computing solutions posted record first-quarter sales and operating income. Non-GAAP Operating Income ($ in millions)

First-Quarter 2018 CFO Commentary 10investor.arrow.com $1,900 $1,700 $1,500 $1,300 $1,100 $900 Q1-'17 Q2-'17 Q3-'17 Q4-'17 Q1-'18 $1,095 $1,307 $1,358 $1,629 $1,195 Enterprise Computing Solutions Americas • Sales increased 12% year over year adjusted for the divestiture of the systems integration business and changes in foreign currencies – Sales increased 9% year over year as reported – Record first-quarter sales – Strong growth in storage, and in infrastructure software across the portfolio led by virtualization – Growth in services – Proprietary servers and networking decreased year over year • Prior periods adjusted for new accounting standards ECS Americas sales increased 12% year over year adjusted for divestiture of the systems integration business and changes in foreign currencies. Sales ($ in millions)

First-Quarter 2018 CFO Commentary 11investor.arrow.com $1,000 $900 $800 $700 $600 $500 $400 Q1-'17 Q2-'17 Q3-'17 Q4-'17 Q1-'18 $583 $653 $634 $965 $750 Enterprise Computing Solutions Europe • Sales increased 29% year over year – Sales increased 9% year over year adjusted for changes in foreign currencies, a small acquisition, and a small divestiture – Record first-quarter sales – Strong growth in industry standard servers, storage, and services – Strong growth in infrastructure software across the portfolio led by virtualization – Proprietary servers and networking decreased year over year • Prior periods adjusted for new accounting standards ECS Europe sales increased 29% year over year. Sales ($ in millions)

First-Quarter 2018 CFO Commentary 12investor.arrow.com Cash Flow from Operations Cash flow from operating activities was negative $75 million in the quarter. Working Capital Working capital to sales was 17.6% in the quarter, up 40 basis points year over year. Return on working capital was 22.5% in the quarter, flat year over year. Return on Invested Capital Return on invested capital was 10.1% in the quarter, up 100 basis points year over year, and ahead of our weighted average cost of capital. Share Buyback We repurchased approximately 0.5 million shares of our stock for $40 million. Total cash returned to shareholders over the last 12 months was approximately $145 million. Debt and Liquidity Net-debt-to-last-12-months EBITDA ratio is approximately 2.4x. Total liquidity of $2.2 billion when including cash of $549 million. We repurchased approximately $40 million of our stock in the first quarter.

First-Quarter 2018 CFO Commentary 13investor.arrow.com Arrow Electronics Outlook Guidance We are expecting the average USD-to-Euro exchange rate for the second quarter of 2018 to be $1.23 to €1 compared with $1.10 to €1 in the second quarter of 2017. We are expecting interest expense will total approximately $48 million. Second-Quarter 2018 Guidance Consolidated Sales $7 billion to $7.4 billion Global Components $5 billion to $5.2 billion Global ECS $2 billion to $2.2 billion Diluted Earnings Per Share1 $1.78 to 1.90 Non-GAAP Diluted Earnings Per Share1 $2.08 to 2.20 1 Assumes average diluted shares outstanding of 89 million, an average tax rate of 23.5 to 25.5%.

First-Quarter 2018 CFO Commentary 14investor.arrow.com 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 2017 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, 2017.

First-Quarter 2018 CFO Commentary 15investor.arrow.com 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. 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, income, or expense on a non-GAAP basis adjusted for the impact of changes in foreign currencies and the impact of acquisitions/ dispositions by adjusting the company’s operating results for businesses acquired/disposed, including the amortization expense related to intangible assets, as if the acquisitions/dispositions had occurred at the beginning of the earliest period presented (referred to as “impact of acquisitions” and "impact of dispositions"). Operating income, net income attributable to shareholders, and net income per basic and diluted share are adjusted to exclude identifiable intangible amortization, restructuring, integration, and other charges, and 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/ dispositions (including intangible assets amortization expense), and financing activities. A reconciliation of the company’s non-GAAP financial information to GAAP is set forth in the tables herein. 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.

First-Quarter 2018 CFO Commentary 16investor.arrow.com Three months ended March 31, 2018 Reported GAAP measure Intangible amortization expense Restructuring & Integration charges Impact of the Tax Act Other* Non-GAAP measure Operating income $ 235,995 $ 13,520 $ 21,171 $ — $ 1,562 $ 272,248 Income before income taxes 186,460 13,520 21,171 — 4,014 225,165 Provision for income taxes 46,590 3,604 5,535 — 782 56,511 Consolidated net income 139,870 9,916 15,636 — 3,232 168,654 Noncontrolling interests 776 153 — — — 929 Net income attributable to shareholders $ 139,094 $ 9,763 $ 15,636 $ — $ 3,232 $ 167,725 Net income per diluted share**** $ 1.56 $ 0.11 $ 0.18 $ — $ 0.04 $ 1.88 Effective tax rate 25.0% 25.1% Three months ended April 1, 2017 (adjusted) Reported GAAP measure Intangible amortization expense Restructuring & Integration charges Impact of the Tax Act Other ** Non-GAAP measure Operating income $ 193,025 $ 12,900 $ 15,505 $ — $ — $ 221,430 Income before income taxes 155,883 12,900 15,505 — (1,982) 182,306 Provision for income taxes 39,564 4,561 4,997 — (765) 48,357 Consolidated net income 116,319 8,339 10,508 — (1,217) 133,949 Noncontrolling interests 1,582 251 — — — 1,833 Net income attributable to shareholders $ 114,737 $ 8,088 $ 10,508 $ — $ (1,217) $ 132,116 Net income per diluted share**** $ 1.27 $ 0.09 $ 0.12 $ — $ (0.01) $ 1.46 Effective tax rate 25.4% 26.5% Three months ended December 31, 2017 (adjusted) Reported GAAP measure Intangible amortization expense Restructuring & Integration charges Impact of the Tax Act Other*** Non-GAAP measure Operating income $ 286,824 $ 12,162 $ 18,771 $ — $ 21,000 $ 338,757 Income before income taxes 226,914 12,162 18,771 — 35,499 293,346 Provision for income taxes 171,413 4,321 4,509 (124,748) 13,713 69,208 Consolidated net income 55,501 7,841 14,262 124,748 21,786 224,138 Noncontrolling interests 1,848 147 — — — 1,995 Net income attributable to shareholders $ 53,653 $ 7,694 $ 14,262 $ 124,748 $ 21,786 $ 222,143 Net income per diluted share $ 0.60 $ 0.09 $ 0.16 $ 1.40 $ 0.24 $ 2.49 Effective tax rate 75.5% 23.6% *Other includes loss on disposition of businesses and gain (loss) on investments. **Other includes gain (loss) on investments. ***Other includes gain (loss) on investments, impairment of assets held for sale, and loss on extinguishment of debt. ****The sum of the components for diluted EPS, as adjusted, may not agree to totals, as presented, due to rounding. Earnings Reconciliation ($ in thousands, except per share data)

First-Quarter 2018 CFO Commentary 17investor.arrow.com Effect of Adopted Accounting Standards ($ in thousands, except per share data) Fiscal Year 2017 First Quarter Second Quarter Third Quarter Fourth Quarter ** As Reported Adjusted for New Standards As Reported Adjusted for New Standards As Reported Adjusted for New Standards As Reported Adjusted for New Standards Sales $ 5,759,552 $ 5,736,780 $ 6,465,346 $ 6,422,226 $ 6,953,740 $ 6,856,108 $ 7,633,870 $ 7,539,449 Cost of sales 4,999,665 4,975,583 5,641,380 5,598,202 6,110,382 6,013,541 6,703,742 6,610,269 Operating income 191,722 193,025 229,822 230,446 235,992 235,441 270,914 286,824 Net income attributable to shareholders 113,768 114,737 99,679 99,722 134,630 134,064 53,885 53,653 Diluted EPS* $ 1.26 $ 1.27 $ 1.11 $ 1.11 $ 1.50 $ 1.50 $ 0.60 $ 0.60 Non-GAAP operating income $ 220,127 $ 221,430 $ 266,602 $ 267,226 $ 264,533 $ 263,982 $ 339,553 $ 338,757 Non-GAAP net income 132,364 132,116 159,970 159,083 162,929 161,153 223,719 222,143 Non-GAAP diluted EPS $ 1.46 $ 1.46 $ 1.78 $ 1.77 $ 1.82 $ 1.80 $ 2.51 $ 2.49 Year to Date 2017 Year to Date 2016 As Reported Adjusted for New Standards As Reported Adjusted for New Standards Sales $ 26,812,508 $ 26,554,563 $ 23,825,261 $ 23,487,872 Cost of sales 23,455,169 23,197,595 20,681,062 20,343,550 Operating income 928,450 945,736 858,539 876,826 Net income attributable to shareholders 401,962 402,176 522,750 522,815 Diluted EPS $ 4.48 $ 4.48 $ 5.68 $ 5.68 Non-GAAP operating income $ 1,090,815 $ 1,091,395 $ 987,027 $ 993,103 Non-GAAP net income 678,982 674,495 609,760 608,046 Non-GAAP diluted EPS $ 7.56 $ 7.51 $ 6.63 $ 6.61 * Quarterly net income per share is calculated using the weighted-average shares outstanding during each quarterly period, while net income per share for the full year is calculated using the weighted-average shares outstanding during the year. Therefore, the sum of the net income per share for each of the four quarters may not equal the net income per share for the full year. ** Operating income for the fourth quarter of 2017 was impacted by a reclassification of pension settlement expense for $16,706 due to the implementation of 2017-07. The settlement expense was moved to "post-retirement expense", which is classified as non-operating on the statement of operations.