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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Arrow Electronics Inc | NYSE:ARW | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
2.25 | 1.80% | 127.14 | 127.94 | 125.72 | 125.84 | 617,535 | 23:57:32 |
☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
New York
|
|
11-1806155
|
|
|
|
(State or other jurisdiction of
|
|
(I.R.S. Employer
|
|
|
|
incorporation or organization)
|
|
Identification Number)
|
|
|
|
|
|
|
|
|
|
9201 East Dry Creek Road
|
|
80112
|
|
|
|
Centennial
|
CO
|
|
(Zip Code)
|
|
|
(Address of principal executive offices)
|
|
|
|
(303)
|
824-4000
|
Title of each class
|
|
Trading Symbol(s)
|
|
Name of the exchange on which registered
|
Common Stock, $1 par value
|
|
ARW
|
|
New York Stock Exchange
|
Large accelerated filer
|
☒
|
|
Accelerated filer
|
☐
|
Non-accelerated filer
|
☐
|
|
Smaller reporting company
|
☐
|
|
|
|
Emerging growth company
|
☐
|
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|||
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|||
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|
|||
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|
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|||
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|||
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|
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|
|||
|
|
|
|
|
|||
|
|
|
|
|
|||
|
|
|
|
|
|
|
Quarter Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
September 28,
2019 |
|
September 29,
2018 |
|
September 28,
2019 |
|
September 29,
2018 |
||||||||
Sales
|
|
$
|
7,078,118
|
|
|
$
|
7,490,445
|
|
|
$
|
21,578,657
|
|
|
$
|
21,758,586
|
|
Cost of sales
|
|
6,279,277
|
|
|
6,566,667
|
|
|
19,103,219
|
|
|
19,033,044
|
|
||||
Gross profit
|
|
798,841
|
|
|
923,778
|
|
|
2,475,438
|
|
|
2,725,542
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
|
||||||||
Selling, general, and administrative expenses
|
|
522,446
|
|
|
575,751
|
|
|
1,677,734
|
|
|
1,719,108
|
|
||||
Depreciation and amortization
|
|
45,231
|
|
|
45,532
|
|
|
139,739
|
|
|
139,201
|
|
||||
Loss on disposition of businesses, net (Note D)
|
|
14,573
|
|
|
2,042
|
|
|
15,439
|
|
|
3,604
|
|
||||
Impairments (Notes D and E)
|
|
253
|
|
|
—
|
|
|
698,246
|
|
|
—
|
|
||||
Restructuring, integration, and other charges
|
|
43,120
|
|
|
10,143
|
|
|
74,692
|
|
|
50,497
|
|
||||
|
|
625,623
|
|
|
633,468
|
|
|
2,605,850
|
|
|
1,912,410
|
|
||||
Operating income (loss)
|
|
173,218
|
|
|
290,310
|
|
|
(130,412
|
)
|
|
813,132
|
|
||||
Equity in losses of affiliated companies
|
|
(1,070
|
)
|
|
(652
|
)
|
|
(2,155
|
)
|
|
(808
|
)
|
||||
Gain (loss) on investments, net
|
|
1,126
|
|
|
1,070
|
|
|
7,864
|
|
|
(3,945
|
)
|
||||
Employee benefit plan expense
|
|
(1,071
|
)
|
|
(1,296
|
)
|
|
(3,349
|
)
|
|
(3,784
|
)
|
||||
Interest and other financing expense, net
|
|
(49,882
|
)
|
|
(54,205
|
)
|
|
(153,426
|
)
|
|
(160,187
|
)
|
||||
Income (loss) before income taxes
|
|
122,321
|
|
|
235,227
|
|
|
(281,478
|
)
|
|
644,408
|
|
||||
Provision for income taxes
|
|
29,340
|
|
|
57,054
|
|
|
30,878
|
|
|
155,325
|
|
||||
Consolidated net income (loss)
|
|
92,981
|
|
|
178,173
|
|
|
(312,356
|
)
|
|
489,083
|
|
||||
Noncontrolling interests
|
|
850
|
|
|
1,640
|
|
|
3,744
|
|
|
3,541
|
|
||||
Net income (loss) attributable to shareholders
|
|
$
|
92,131
|
|
|
$
|
176,533
|
|
|
$
|
(316,100
|
)
|
|
$
|
485,542
|
|
Net income (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
||||||
Basic
|
|
$
|
1.11
|
|
|
$
|
2.02
|
|
|
$
|
(3.75
|
)
|
|
$
|
5.53
|
|
Diluted
|
|
$
|
1.10
|
|
|
$
|
1.99
|
|
|
$
|
(3.75
|
)
|
|
$
|
5.47
|
|
Weighted-average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
||||||
Basic
|
|
82,711
|
|
|
87,602
|
|
|
84,246
|
|
|
87,785
|
|
||||
Diluted
|
|
83,397
|
|
|
88,608
|
|
|
84,246
|
|
|
88,759
|
|
|
|
Quarter Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
September 28,
2019 |
|
September 29,
2018 |
|
September 28,
2019 |
|
September 29,
2018 |
||||||||
Consolidated net income (loss)
|
|
$
|
92,981
|
|
|
$
|
178,173
|
|
|
$
|
(312,356
|
)
|
|
$
|
489,083
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustment and other
|
|
(82,809
|
)
|
|
(38,008
|
)
|
|
(62,346
|
)
|
|
(139,846
|
)
|
||||
Unrealized gain on foreign exchange contracts designated as net investment hedges, net of taxes
|
|
11,389
|
|
|
—
|
|
|
15,495
|
|
|
—
|
|
||||
Unrealized gain (loss) on interest rate swaps designated as cash flow hedges, net of taxes
|
|
(9,114
|
)
|
|
234
|
|
|
(15,480
|
)
|
|
693
|
|
||||
Employee benefit plan items, net of taxes
|
|
45
|
|
|
389
|
|
|
449
|
|
|
1,284
|
|
||||
Other comprehensive loss
|
|
(80,489
|
)
|
|
(37,385
|
)
|
|
(61,882
|
)
|
|
(137,869
|
)
|
||||
Comprehensive income (loss)
|
|
12,492
|
|
|
140,788
|
|
|
(374,238
|
)
|
|
351,214
|
|
||||
Less: Comprehensive income (loss) attributable to noncontrolling interests
|
|
(562
|
)
|
|
1,497
|
|
|
2,199
|
|
|
1,486
|
|
||||
Comprehensive income (loss) attributable to shareholders
|
|
$
|
13,054
|
|
|
$
|
139,291
|
|
|
$
|
(376,437
|
)
|
|
$
|
349,728
|
|
|
|
September 28,
2019 |
|
December 31,
2018 |
||||
ASSETS
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
262,254
|
|
|
$
|
509,327
|
|
Accounts receivable, net
|
|
7,841,851
|
|
|
8,945,463
|
|
||
Inventories
|
|
3,503,481
|
|
|
3,878,678
|
|
||
Other current assets
|
|
232,062
|
|
|
274,832
|
|
||
Total current assets
|
|
11,839,648
|
|
|
13,608,300
|
|
||
Property, plant, and equipment, at cost:
|
|
|
|
|
|
|
||
Land
|
|
7,746
|
|
|
7,882
|
|
||
Buildings and improvements
|
|
164,544
|
|
|
158,712
|
|
||
Machinery and equipment
|
|
1,438,600
|
|
|
1,425,933
|
|
||
|
|
1,610,890
|
|
|
1,592,527
|
|
||
Less: Accumulated depreciation and amortization
|
|
(805,626
|
)
|
|
(767,827
|
)
|
||
Property, plant, and equipment, net
|
|
805,264
|
|
|
824,700
|
|
||
Investments in affiliated companies
|
|
85,399
|
|
|
83,693
|
|
||
Intangible assets, net
|
|
277,720
|
|
|
372,644
|
|
||
Goodwill
|
|
2,041,073
|
|
|
2,624,690
|
|
||
Other assets
|
|
640,607
|
|
|
270,418
|
|
||
Total assets
|
|
$
|
15,689,711
|
|
|
$
|
17,784,445
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
|
||
Accounts payable
|
|
$
|
6,181,408
|
|
|
$
|
7,631,879
|
|
Accrued expenses
|
|
833,390
|
|
|
912,292
|
|
||
Short-term borrowings, including current portion of long-term debt
|
|
356,843
|
|
|
246,257
|
|
||
Total current liabilities
|
|
7,371,641
|
|
|
8,790,428
|
|
||
Long-term debt
|
|
2,942,293
|
|
|
3,239,115
|
|
||
Other liabilities
|
|
631,530
|
|
|
378,536
|
|
||
Commitments and contingencies (Note N)
|
|
|
|
|
|
|
||
Equity:
|
|
|
|
|
|
|
||
Shareholders’ equity:
|
|
|
|
|
|
|
||
Common stock, par value $1:
|
|
|
|
|
|
|
||
Authorized - 160,000 shares in both 2019 and 2018, respectively
|
|
|
|
|
|
|
||
Issued - 125,424 shares in both 2019 and 2018, respectively
|
|
125,424
|
|
|
125,424
|
|
||
Capital in excess of par value
|
|
1,143,830
|
|
|
1,135,934
|
|
||
Treasury stock (43,660 and 40,233 shares in 2019 and 2018, respectively), at cost
|
|
(2,237,884
|
)
|
|
(1,972,254
|
)
|
||
Retained earnings
|
|
6,019,235
|
|
|
6,335,335
|
|
||
Accumulated other comprehensive loss
|
|
(359,786
|
)
|
|
(299,449
|
)
|
||
Total shareholders’ equity
|
|
4,690,819
|
|
|
5,324,990
|
|
||
Noncontrolling interests
|
|
53,428
|
|
|
51,376
|
|
||
Total equity
|
|
4,744,247
|
|
|
5,376,366
|
|
||
Total liabilities and equity
|
|
$
|
15,689,711
|
|
|
$
|
17,784,445
|
|
|
|
Nine Months Ended
|
||||||
|
|
September 28,
2019 |
|
September 29,
2018 |
||||
Cash flows from operating activities:
|
|
|
|
|
||||
Consolidated net income (loss)
|
|
$
|
(312,356
|
)
|
|
$
|
489,083
|
|
Adjustments to reconcile consolidated net income (loss) to net cash provided by operations:
|
|
|
|
|
||||
Depreciation and amortization
|
|
139,739
|
|
|
139,201
|
|
||
Amortization of stock-based compensation
|
|
34,749
|
|
|
38,104
|
|
||
Equity in losses of affiliated companies
|
|
2,155
|
|
|
808
|
|
||
Deferred income taxes
|
|
(65,484
|
)
|
|
17,769
|
|
||
Impairments
|
|
698,246
|
|
|
—
|
|
||
Loss on disposition of businesses, net
|
|
15,439
|
|
|
3,604
|
|
||
(Gain) loss on investments, net
|
|
(7,622
|
)
|
|
3,945
|
|
||
Other
|
|
10,814
|
|
|
6,056
|
|
||
Change in assets and liabilities, net of effects of acquired and disposed businesses:
|
|
|
|
|
||||
Accounts receivable
|
|
916,908
|
|
|
(254,417
|
)
|
||
Inventories
|
|
342,610
|
|
|
(456,050
|
)
|
||
Accounts payable
|
|
(1,349,189
|
)
|
|
171,697
|
|
||
Accrued expenses
|
|
(71,124
|
)
|
|
15,177
|
|
||
Other assets and liabilities
|
|
8,308
|
|
|
(165,421
|
)
|
||
Net cash provided by operating activities
|
|
363,193
|
|
|
9,556
|
|
||
Cash flows from investing activities:
|
|
|
|
|
|
|
||
Cash consideration paid for acquired businesses, net of cash acquired
|
|
—
|
|
|
(331,563
|
)
|
||
Proceeds from (cash paid on) disposition of a businesses
|
|
(1,325
|
)
|
|
32,013
|
|
||
Acquisition of property, plant, and equipment
|
|
(113,080
|
)
|
|
(104,897
|
)
|
||
Other
|
|
(5,555
|
)
|
|
(11,000
|
)
|
||
Net cash used for investing activities
|
|
(119,960
|
)
|
|
(415,447
|
)
|
||
Cash flows from financing activities:
|
|
|
|
|
||||
Change in short-term and other borrowings
|
|
(93,129
|
)
|
|
104,158
|
|
||
Proceeds from (repayments of) long-term bank borrowings, net
|
|
(96,960
|
)
|
|
420,755
|
|
||
Redemption of notes
|
|
—
|
|
|
(300,000
|
)
|
||
Proceeds from exercise of stock options
|
|
11,710
|
|
|
7,919
|
|
||
Repurchases of common stock
|
|
(304,194
|
)
|
|
(93,173
|
)
|
||
Other
|
|
(147
|
)
|
|
(1,174
|
)
|
||
Net cash provided by (used for) financing activities
|
|
(482,720
|
)
|
|
138,485
|
|
||
Effect of exchange rate changes on cash
|
|
(7,586
|
)
|
|
11,514
|
|
||
Net decrease in cash and cash equivalents
|
|
(247,073
|
)
|
|
(255,892
|
)
|
||
Cash and cash equivalents at beginning of period
|
|
509,327
|
|
|
730,083
|
|
||
Cash and cash equivalents at end of period
|
|
$
|
262,254
|
|
|
$
|
474,191
|
|
|
Common Stock at Par Value
|
|
Capital in Excess of Par Value
|
|
Treasury Stock
|
|
Retained Earnings
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Noncontrolling Interests
|
|
Total
|
||||||||||||||
Balance at December 31, 2018
|
$
|
125,424
|
|
|
$
|
1,135,934
|
|
|
$
|
(1,972,254
|
)
|
|
$
|
6,335,335
|
|
|
$
|
(299,449
|
)
|
|
$
|
51,376
|
|
|
$
|
5,376,366
|
|
Consolidated net income
|
—
|
|
|
—
|
|
|
—
|
|
|
140,735
|
|
|
—
|
|
|
1,679
|
|
|
142,414
|
|
|||||||
Other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,182
|
|
|
(648
|
)
|
|
10,534
|
|
|||||||
Amortization of stock-based compensation
|
—
|
|
|
19,090
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19,090
|
|
|||||||
Shares issued for stock-based compensation awards
|
—
|
|
|
(26,267
|
)
|
|
33,198
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,931
|
|
|||||||
Repurchases of common stock
|
—
|
|
|
—
|
|
|
(53,925
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(53,925
|
)
|
|||||||
Balance at March 30, 2019
|
$
|
125,424
|
|
|
$
|
1,128,757
|
|
|
$
|
(1,992,981
|
)
|
|
$
|
6,476,070
|
|
|
$
|
(288,267
|
)
|
|
$
|
52,407
|
|
|
$
|
5,501,410
|
|
Consolidated net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
(548,966
|
)
|
|
—
|
|
|
1,215
|
|
|
(547,751
|
)
|
|||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,558
|
|
|
515
|
|
|
8,073
|
|
|||||||
Amortization of stock-based compensation
|
—
|
|
|
8,539
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,539
|
|
|||||||
Shares issued for stock-based compensation awards
|
—
|
|
|
(647
|
)
|
|
3,340
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,693
|
|
|||||||
Repurchases of common stock
|
—
|
|
|
—
|
|
|
(150,102
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(150,102
|
)
|
|||||||
Distributions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(147
|
)
|
|
(147
|
)
|
|||||||
Balance at June 29, 2019
|
$
|
125,424
|
|
|
$
|
1,136,649
|
|
|
$
|
(2,139,743
|
)
|
|
$
|
5,927,104
|
|
|
$
|
(280,709
|
)
|
|
$
|
53,990
|
|
|
$
|
4,822,715
|
|
Consolidated net income
|
—
|
|
|
—
|
|
|
—
|
|
|
92,131
|
|
|
—
|
|
|
850
|
|
|
92,981
|
|
|||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(79,077
|
)
|
|
(1,412
|
)
|
|
(80,489
|
)
|
|||||||
Amortization of stock-based compensation
|
—
|
|
|
7,120
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,120
|
|
|||||||
Shares issued for stock-based compensation awards
|
—
|
|
|
61
|
|
|
2,026
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,087
|
|
|||||||
Repurchases of common stock
|
—
|
|
|
—
|
|
|
(100,167
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(100,167
|
)
|
|||||||
Balance at September 28, 2019
|
$
|
125,424
|
|
|
$
|
1,143,830
|
|
|
$
|
(2,237,884
|
)
|
|
$
|
6,019,235
|
|
|
$
|
(359,786
|
)
|
|
$
|
53,428
|
|
|
$
|
4,744,247
|
|
|
Common Stock at Par Value
|
|
Capital in Excess of Par Value
|
|
Treasury Stock
|
|
Retained Earnings
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Noncontrolling Interests
|
|
Total
|
||||||||||||||
Balance at December 31, 2017
|
$
|
125,424
|
|
|
$
|
1,114,167
|
|
|
$
|
(1,762,239
|
)
|
|
$
|
5,596,786
|
|
|
$
|
(124,883
|
)
|
|
$
|
48,685
|
|
|
$
|
4,997,940
|
|
Effect of new accounting principles
|
—
|
|
|
—
|
|
|
—
|
|
|
22,354
|
|
|
(22,354
|
)
|
|
—
|
|
|
—
|
|
|||||||
Consolidated net income
|
—
|
|
|
—
|
|
|
—
|
|
|
139,094
|
|
|
—
|
|
|
776
|
|
|
139,870
|
|
|||||||
Other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
45,732
|
|
|
(255
|
)
|
|
45,477
|
|
|||||||
Amortization of stock-based compensation
|
—
|
|
|
13,043
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,043
|
|
|||||||
Shares issued for stock-based compensation awards
|
—
|
|
|
(22,102
|
)
|
|
27,099
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,997
|
|
|||||||
Repurchases of common stock
|
—
|
|
|
—
|
|
|
(52,513
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(52,513
|
)
|
|||||||
Balance at March 31, 2018
|
$
|
125,424
|
|
|
$
|
1,105,108
|
|
|
$
|
(1,787,653
|
)
|
|
$
|
5,758,234
|
|
|
$
|
(101,505
|
)
|
|
$
|
49,206
|
|
|
$
|
5,148,814
|
|
Consolidated net income
|
—
|
|
|
—
|
|
|
—
|
|
|
169,915
|
|
|
—
|
|
|
1,125
|
|
|
171,040
|
|
|||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(144,304
|
)
|
|
(1,658
|
)
|
|
(145,962
|
)
|
|||||||
Amortization of stock-based compensation
|
—
|
|
|
12,619
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,619
|
|
|||||||
Shares issued for stock-based compensation awards
|
—
|
|
|
(338
|
)
|
|
1,329
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
991
|
|
|||||||
Repurchases of common stock
|
—
|
|
|
—
|
|
|
(20,038
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(20,038
|
)
|
|||||||
Distributions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(157
|
)
|
|
(157
|
)
|
|||||||
Balance at June 30, 2018
|
$
|
125,424
|
|
|
$
|
1,117,389
|
|
|
$
|
(1,806,362
|
)
|
|
$
|
5,928,149
|
|
|
$
|
(245,809
|
)
|
|
$
|
48,516
|
|
|
$
|
5,167,307
|
|
Consolidated net income
|
—
|
|
|
—
|
|
|
—
|
|
|
176,533
|
|
|
—
|
|
|
1,640
|
|
|
178,173
|
|
|||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(37,242
|
)
|
|
(141
|
)
|
|
(37,383
|
)
|
|||||||
Amortization of stock-based compensation
|
—
|
|
|
12,632
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,632
|
|
|||||||
Shares issued for stock-based compensation awards
|
—
|
|
|
(676
|
)
|
|
2,611
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,935
|
|
|||||||
Repurchases of common stock
|
—
|
|
|
—
|
|
|
(20,622
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(20,622
|
)
|
|||||||
Balance at September 29, 2018
|
$
|
125,424
|
|
|
$
|
1,129,345
|
|
|
$
|
(1,824,373
|
)
|
|
$
|
6,104,682
|
|
|
$
|
(283,051
|
)
|
|
$
|
50,015
|
|
|
$
|
5,302,042
|
|
|
|
Global
Components
|
|
Global ECS
|
|
Total
|
||||||
Balance as of December 31, 2018 (a)
|
|
$
|
1,437,501
|
|
|
$
|
1,187,189
|
|
|
$
|
2,624,690
|
|
Impairments and dispositions
|
|
(570,175
|
)
|
|
(1,386
|
)
|
|
(571,561
|
)
|
|||
Foreign currency translation adjustment
|
|
10,673
|
|
|
(22,729
|
)
|
|
(12,056
|
)
|
|||
Balance as of September 28, 2019 (b)
|
|
$
|
877,999
|
|
|
$
|
1,163,074
|
|
|
$
|
2,041,073
|
|
(a)
|
The total carrying value of goodwill as of December 31, 2018 in the table above is reflected net of $1,018,780 of accumulated impairment charges, of which $716,925 was recorded in the global components business segment and $301,855 was recorded in the global enterprise computing solutions (“ECS”) business segment.
|
(b)
|
The total carrying value of goodwill as of September 28, 2019 in the table above is reflected net of $1,588,955 of accumulated impairment charges, of which $1,287,100 was recorded in the global components business segment and $301,855 was recorded in the ECS business segment.
|
|
|
Weighted-Average Life
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net
|
||||||
Customer relationships
|
|
10 years
|
|
$
|
426,564
|
|
|
$
|
(217,736
|
)
|
|
$
|
208,828
|
|
Amortizable trade name
|
|
8 years
|
|
76,407
|
|
|
(7,515
|
)
|
|
68,892
|
|
|||
|
|
|
|
$
|
502,971
|
|
|
$
|
(225,251
|
)
|
|
$
|
277,720
|
|
|
|
Weighted-Average Life
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net
|
||||||
Non-amortizable trade names
|
|
indefinite
|
|
$
|
101,000
|
|
|
$
|
—
|
|
|
$
|
101,000
|
|
Customer relationships
|
|
11 years
|
|
475,050
|
|
|
(221,822
|
)
|
|
253,228
|
|
|||
Developed technology
|
|
5 years
|
|
6,340
|
|
|
(4,311
|
)
|
|
2,029
|
|
|||
Amortizable trade name
|
|
9 years
|
|
19,940
|
|
|
(3,553
|
)
|
|
16,387
|
|
|||
|
|
|
|
$
|
602,330
|
|
|
$
|
(229,686
|
)
|
|
$
|
372,644
|
|
|
|
September 28,
2019 |
|
December 31,
2018 |
||||
Marubun/Arrow
|
|
$
|
75,455
|
|
|
$
|
73,253
|
|
Other
|
|
9,944
|
|
|
10,440
|
|
||
|
|
$
|
85,399
|
|
|
$
|
83,693
|
|
|
|
Quarter Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
September 28,
2019 |
|
September 29,
2018 |
|
September 28,
2019 |
|
September 29,
2018 |
||||||||
Marubun/Arrow
|
|
$
|
160
|
|
|
$
|
1,983
|
|
|
$
|
1,613
|
|
|
$
|
4,557
|
|
Other
|
|
(1,230
|
)
|
|
(2,635
|
)
|
|
(3,768
|
)
|
|
(5,365
|
)
|
||||
|
|
$
|
(1,070
|
)
|
|
$
|
(652
|
)
|
|
$
|
(2,155
|
)
|
|
$
|
(808
|
)
|
|
|
September 28,
2019 |
|
December 31,
2018 |
||||
Accounts receivable
|
|
$
|
7,906,758
|
|
|
$
|
9,021,051
|
|
Allowances for doubtful accounts
|
|
(64,907
|
)
|
|
(75,588
|
)
|
||
|
|
$
|
7,841,851
|
|
|
$
|
8,945,463
|
|
|
|
September 28,
2019 |
|
December 31,
2018 |
||||
6.00% notes, due 2020
|
|
$
|
209,278
|
|
|
$
|
—
|
|
Borrowings on lines of credit
|
|
75,000
|
|
|
180,000
|
|
||
Other short-term borrowings
|
|
72,565
|
|
|
66,257
|
|
||
|
|
$
|
356,843
|
|
|
$
|
246,257
|
|
|
|
September 28,
2019 |
|
December 31,
2018 |
||||
Revolving credit facility
|
|
$
|
35,000
|
|
|
$
|
—
|
|
Asset securitization program
|
|
680,000
|
|
|
810,000
|
|
||
6.00% notes, due 2020
|
|
—
|
|
|
209,147
|
|
||
5.125% notes, due 2021
|
|
130,655
|
|
|
130,546
|
|
||
3.50% notes, due 2022
|
|
347,885
|
|
|
347,288
|
|
||
4.50% notes, due 2023
|
|
298,014
|
|
|
297,622
|
|
||
3.25% notes, due 2024
|
|
494,803
|
|
|
494,091
|
|
||
4.00% notes, due 2025
|
|
346,214
|
|
|
345,762
|
|
||
7.50% senior debentures, due 2027
|
|
109,837
|
|
|
109,776
|
|
||
3.875% notes, due 2028
|
|
494,507
|
|
|
494,095
|
|
||
Other obligations with various interest rates and due dates
|
|
5,378
|
|
|
788
|
|
||
|
|
$
|
2,942,293
|
|
|
$
|
3,239,115
|
|
|
|
September 28,
2019 |
|
December 31,
2018 |
||||
6.00% notes, due 2020
|
|
$
|
213,000
|
|
|
$
|
214,500
|
|
5.125% notes, due 2021
|
|
135,000
|
|
|
134,500
|
|
||
3.50% notes, due 2022
|
|
357,500
|
|
|
345,000
|
|
||
4.50% notes, due 2023
|
|
315,500
|
|
|
303,500
|
|
||
3.25% notes, due 2024
|
|
508,000
|
|
|
467,000
|
|
||
4.00% notes, due 2025
|
|
364,000
|
|
|
340,500
|
|
||
7.50% senior debentures, due 2027
|
|
136,000
|
|
|
128,000
|
|
||
3.875% notes, due 2028
|
|
512,500
|
|
|
458,500
|
|
Level 1
|
Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.
|
Level 2
|
Quoted prices in markets that are not active; or other inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability.
|
Level 3
|
Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable.
|
|
|
Balance Sheet
Location |
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Cash equivalents (a)
|
|
Cash and cash equivalents/
other assets
|
|
$
|
19,847
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
19,847
|
|
Equity investments (b)
|
|
Other assets
|
|
43,071
|
|
|
—
|
|
|
—
|
|
|
43,071
|
|
||||
Interest rate swaps
|
|
Other liabilities
|
|
—
|
|
|
(21,534
|
)
|
|
—
|
|
|
(21,534
|
)
|
||||
Foreign exchange contracts
|
|
Other current assets/
other assets
|
|
—
|
|
|
30,533
|
|
|
—
|
|
|
30,533
|
|
||||
Foreign exchange contracts
|
|
Accrued expenses
|
|
—
|
|
|
(1,431
|
)
|
|
—
|
|
|
(1,431
|
)
|
||||
|
|
|
|
$
|
62,918
|
|
|
$
|
7,568
|
|
|
$
|
—
|
|
|
$
|
70,486
|
|
|
|
Balance Sheet
Location |
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Cash equivalents (a)
|
|
Cash and cash equivalents/
other assets
|
|
$
|
22,883
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
22,883
|
|
Equity investments (b)
|
|
Other assets
|
|
38,045
|
|
|
—
|
|
|
—
|
|
|
38,045
|
|
||||
Interest rate swaps
|
|
Other liabilities
|
|
—
|
|
|
(589
|
)
|
|
—
|
|
|
(589
|
)
|
||||
Foreign exchange contracts
|
|
Other current assets
|
|
—
|
|
|
4,163
|
|
|
—
|
|
|
4,163
|
|
||||
Foreign exchange contracts
|
|
Accrued expenses
|
|
—
|
|
|
(2,384
|
)
|
|
—
|
|
|
(2,384
|
)
|
||||
|
|
|
|
$
|
60,928
|
|
|
$
|
1,190
|
|
|
$
|
—
|
|
|
$
|
62,118
|
|
(a)
|
Cash equivalents include highly liquid investments with an original maturity of less than three months.
|
(b)
|
The company has an 8.4% equity ownership interest in Marubun Corporation and a portfolio of mutual funds with quoted market prices. The company recorded an unrealized gain of $378 and $2,220 for the third quarter and nine months ended September 28, 2019, respectively, on equity securities held at the end of the quarter. The company recorded an unrealized gain of $272 and an unrealized loss of $6,971 for the third quarter and nine months ended September 29, 2018, respectively, on equity securities held at the end of the quarter.
|
Maturity Date
|
|
Notional Amount
|
|
Interest rate due from counterparty
|
|
Interest rate due to counterparty
|
April 2020
|
|
50,000
|
|
6.000%
|
|
6 mo. USD LIBOR + 3.896%
|
Maturity Date
|
|
Notional Amount
|
March 2023
|
|
EUR 50,000
|
September 2024
|
|
EUR 50,000
|
April 2025
|
|
EUR 100,000
|
January 2028
|
|
EUR 100,000
|
Total
|
|
EUR 300,000
|
|
|
Quarter Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
September 28,
2019 |
|
September 29,
2018 |
|
September 28,
2019 |
|
September 29,
2018 |
||||||||
Gain (Loss) Recognized in Income
|
|
|
|
|
|
|
|
|
||||||||
Foreign exchange contracts
|
|
$
|
7,642
|
|
|
$
|
3,565
|
|
|
$
|
11,905
|
|
|
$
|
4,083
|
|
Interest rate swaps
|
|
(327
|
)
|
|
(311
|
)
|
|
(968
|
)
|
|
(922
|
)
|
||||
Total
|
|
$
|
7,315
|
|
|
$
|
3,254
|
|
|
$
|
10,937
|
|
|
$
|
3,161
|
|
Gain (Loss) Recognized in Other Comprehensive Loss before reclassifications, net of tax
|
|
|
|
|
|
|
|
|
||||||||
Foreign exchange contracts
|
|
$
|
13,248
|
|
|
$
|
(1,212
|
)
|
|
$
|
20,495
|
|
|
$
|
(2,348
|
)
|
Interest rate swaps
|
|
(9,360
|
)
|
|
—
|
|
|
(16,209
|
)
|
|
—
|
|
||||
Total
|
|
$
|
3,888
|
|
|
$
|
(1,212
|
)
|
|
$
|
4,286
|
|
|
$
|
(2,348
|
)
|
|
|
Quarter Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
September 28,
2019 |
|
September 29,
2018 |
|
September 28,
2019 |
|
September 29,
2018 |
||||||||
Restructuring and integration charges - current period actions
|
|
$
|
12,484
|
|
|
$
|
4,102
|
|
|
$
|
20,562
|
|
|
$
|
24,332
|
|
Restructuring and integration charges (credits) - actions taken in prior periods
|
|
(174
|
)
|
|
1,172
|
|
|
1,189
|
|
|
5,452
|
|
||||
Other charges
|
|
30,810
|
|
|
4,869
|
|
|
52,941
|
|
|
20,713
|
|
||||
|
|
$
|
43,120
|
|
|
$
|
10,143
|
|
|
$
|
74,692
|
|
|
$
|
50,497
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
•
|
acquisition-related charges for the third quarter and first nine months of $442 and $1,687, respectively, related to professional and other fees directly related to recent acquisition activity as well as contingent consideration for acquisitions completed in prior years;
|
•
|
relocation and other charges (credits) associated with centralization efforts to maximize operating efficiencies for the third quarter and first nine months of $(1,039) and $7,694, respectively; and
|
•
|
personnel charges for the third quarter and first nine months of $30,906 related to the operating expense reduction program previously disclosed in Item 2.02 Form 8-K filed on July 15, 2019. The company expects to incur $24,100 of additional cash charges for personnel and contract termination costs through the first half of 2020. The accrual related to the operating expense reduction program was $22,424 at September 28, 2019, and all accrued amounts are expected to be paid within one year.
|
•
|
acquisition related charges for the third quarter and first nine months of $1,422 and $8,960, respectively, related to professional and other fees directly related to recent acquisition activity as well as contingent consideration for acquisitions completed in prior years.
|
|
|
Quarter Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
September 28,
2019 |
|
September 29,
2018 |
|
September 28,
2019 |
|
September 29,
2018 |
||||||||
Net income (loss) attributable to shareholders
|
|
$
|
92,131
|
|
|
$
|
176,533
|
|
|
$
|
(316,100
|
)
|
|
$
|
485,542
|
|
Weighted-average shares outstanding - basic
|
|
82,711
|
|
|
87,602
|
|
|
84,246
|
|
|
87,785
|
|
||||
Net effect of various dilutive stock-based compensation awards
|
|
686
|
|
|
1,006
|
|
|
—
|
|
|
974
|
|
||||
Weighted-average shares outstanding - diluted
|
|
83,397
|
|
|
88,608
|
|
|
84,246
|
|
|
88,759
|
|
||||
Net income (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
||||||
Basic
|
|
$
|
1.11
|
|
|
$
|
2.02
|
|
|
$
|
(3.75
|
)
|
|
$
|
5.53
|
|
Diluted (a)
|
|
$
|
1.10
|
|
|
$
|
1.99
|
|
|
$
|
(3.75
|
)
|
|
$
|
5.47
|
|
(a)
|
As the company reported a net loss attributable to shareholders for the first nine months of 2019, basic and diluted net loss per share attributable to shareholders are the same and stock-based compensation awards for the issuance of 1,886 shares were excluded from the computation of net income per share on a diluted basis as their effect was anti-dilutive. Stock-based compensation awards for the issuance of 1,086 shares for the third quarter of 2019, and 582 and 540 shares for the third quarter and first nine months of 2018, respectively, were excluded from the computation of net income per share on a diluted basis as their effect was anti-dilutive.
|
|
|
|
|
|
September 28, 2019
|
||
Operating Leases
|
|
|
||
Right-of-use asset
|
|
$
|
294,722
|
|
|
|
|
||
Lease liability - current
|
|
59,997
|
|
|
Lease liability - non-current
|
|
278,191
|
|
|
Total operating lease liabilities
|
|
$
|
338,188
|
|
|
|
September 28, 2019
|
||
2019
|
|
$
|
31,117
|
|
2020
|
|
79,814
|
|
|
2021
|
|
63,428
|
|
|
2022
|
|
49,874
|
|
|
2023
|
|
39,302
|
|
|
Thereafter
|
|
167,937
|
|
|
Total lease payments
|
|
431,472
|
|
|
Less: imputed interest
|
|
(93,284
|
)
|
|
Total
|
|
$
|
338,188
|
|
|
|
|
|
|
Quarter Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
September 28,
2019 |
|
September 29,
2018 |
|
September 28,
2019 |
|
September 29,
2018 |
||||||||
Foreign Currency Translation Adjustment and Other:
|
|
|
|
|
|
|
|
|
||||||||
Other comprehensive loss before reclassifications (a)
|
|
$
|
(97,605
|
)
|
|
$
|
(37,858
|
)
|
|
$
|
(76,769
|
)
|
|
$
|
(137,661
|
)
|
Amounts reclassified into income
|
|
16,208
|
|
|
(7
|
)
|
|
15,968
|
|
|
(130
|
)
|
||||
Unrealized Gain (Loss) on Foreign Exchange Contracts Designated as Net Investment Hedges, Net:
|
|
|
|
|
|
|
|
|
||||||||
Other comprehensive income before reclassifications
|
|
13,249
|
|
|
—
|
|
|
20,065
|
|
|
—
|
|
||||
Amounts reclassified into income
|
|
(1,860
|
)
|
|
—
|
|
|
(4,570
|
)
|
|
—
|
|
||||
Unrealized Gain (Loss) on Interest Rate Swaps Designated as Cash Flow Hedges, Net:
|
|
|
|
|
|
|
|
|
||||||||
Other comprehensive loss before reclassifications
|
|
(9,360
|
)
|
|
—
|
|
|
(16,209
|
)
|
|
—
|
|
||||
Amounts reclassified into income
|
|
246
|
|
|
234
|
|
|
729
|
|
|
693
|
|
||||
Employee Benefit Plan Items, Net:
|
|
|
|
|
|
|
|
|
||||||||
Amounts reclassified into income
|
|
45
|
|
|
389
|
|
|
449
|
|
|
1,284
|
|
||||
Other:
|
|
|
|
|
|
|
|
|
||||||||
Retained earnings adjustment (b)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(22,354
|
)
|
||||
Net change in Accumulated other comprehensive loss
|
|
$
|
(79,077
|
)
|
|
$
|
(37,242
|
)
|
|
$
|
(60,337
|
)
|
|
$
|
(158,168
|
)
|
(a)
|
Includes intra-entity foreign currency transactions that are of a long-term investment nature of $(7,251) and $(8,032) for the third quarter and first nine months of 2019 and $508 and $3,358 for the third quarter and first nine months of 2018, respectively.
|
(b)
|
Amounts relate to unrealized gains and losses on investments and stranded tax effects reclassified from “Accumulated other comprehensive loss” to “Retained earnings” in accordance with ASU No. 2018-02 and ASU No. 2016-01.
|
Month of Board Approval
|
|
Dollar Value Approved for Repurchase
|
|
Dollar Value of Shares Repurchased
|
|
Approximate
Dollar Value of
Shares that May
Yet be
Purchased
Under the
Program
|
||||||
December 2016
|
|
$
|
400,000
|
|
|
$
|
400,000
|
|
|
$
|
—
|
|
December 2018
|
|
600,000
|
|
|
161,463
|
|
|
438,537
|
|
|||
Total
|
|
$
|
1,000,000
|
|
|
$
|
561,463
|
|
|
$
|
438,537
|
|
|
|
Quarter Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
September 28,
2019 |
|
September 29,
2018 |
|
September 28,
2019 |
|
September 29,
2018 |
||||||||
Components:
|
|
|
|
|
|
|
|
|
||||||||
Americas
|
|
$
|
1,738,710
|
|
|
$
|
2,060,920
|
|
|
$
|
5,522,538
|
|
|
$
|
5,795,500
|
|
EMEA (a)
|
|
1,304,109
|
|
|
1,399,435
|
|
|
4,223,363
|
|
|
4,325,793
|
|
||||
Asia/Pacific
|
|
2,006,061
|
|
|
1,920,723
|
|
|
5,765,841
|
|
|
5,474,081
|
|
||||
Global components
|
|
$
|
5,048,880
|
|
|
$
|
5,381,078
|
|
|
$
|
15,511,742
|
|
|
$
|
15,595,374
|
|
|
|
|
|
|
|
|
|
|
||||||||
ECS:
|
|
|
|
|
|
|
|
|
||||||||
Americas
|
|
$
|
1,418,914
|
|
|
$
|
1,457,719
|
|
|
$
|
3,992,277
|
|
|
$
|
4,040,164
|
|
EMEA (a)
|
|
610,324
|
|
|
651,648
|
|
|
2,074,638
|
|
|
2,123,048
|
|
||||
Global ECS
|
|
$
|
2,029,238
|
|
|
$
|
2,109,367
|
|
|
$
|
6,066,915
|
|
|
$
|
6,163,212
|
|
Consolidated (b)
|
|
$
|
7,078,118
|
|
|
$
|
7,490,445
|
|
|
$
|
21,578,657
|
|
|
$
|
21,758,586
|
|
(a)
|
Defined as Europe, the Middle East, and Africa.
|
(b)
|
Includes sales related to the United States of $2,875,687 and $8,560,115 for the third quarter and first nine months of 2019 and $3,181,227 and $8,799,364 for the third quarter and first nine months of 2018, respectively.
|
|
|
Quarter Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
September 28,
2019 |
|
September 29,
2018 |
|
September 28,
2019 |
|
September 29,
2018 |
||||||||
Operating income (loss):
|
|
|
|
|
|
|
|
|
|
|
||||||
Global components (c)
|
|
$
|
171,591
|
|
|
$
|
271,939
|
|
|
$
|
(159,993
|
)
|
|
$
|
755,325
|
|
Global ECS
|
|
92,375
|
|
|
82,187
|
|
|
277,481
|
|
|
275,410
|
|
||||
Corporate (d)
|
|
(90,748
|
)
|
|
(63,816
|
)
|
|
(247,900
|
)
|
|
(217,603
|
)
|
||||
Consolidated
|
|
$
|
173,218
|
|
|
$
|
290,310
|
|
|
$
|
(130,412
|
)
|
|
$
|
813,132
|
|
(c)
|
Global components operating income includes impairments of $253 and $698,246 for the third quarter and first nine months of 2019, respectively. Also included are non-recurring charges of $1,101 and $21,215 in the third quarter and first nine months of 2019, respectively, related to a subset of inventory held by its digital business and a non-recurring charge (credit) of $(664) and $15,187 in the third quarter and first nine months of 2019, respectively, related to the receivables and inventory of its financing solutions business. The company has made the decision to narrow its digital inventory offerings and will no longer provide notes to its components customers. Also included are restructuring, integration, and other charges of $12,034 and a loss on disposition of businesses, net, of $14,573 for the third quarter and first nine months of 2019.
|
(d)
|
Includes restructuring, integration, and other charges of $31,086 and $62,658 for the third quarter and first nine months of 2019 and $10,143 and $50,497 for the third quarter and first nine months of 2018, respectively. Also includes a loss on disposition of businesses of $866 for the first nine months of 2019.
|
|
|
September 28,
2019 |
|
December 31,
2018 |
||||
Global components
|
|
$
|
10,447,811
|
|
|
$
|
11,425,579
|
|
Global ECS
|
|
4,518,883
|
|
|
5,632,102
|
|
||
Corporate
|
|
723,017
|
|
|
726,764
|
|
||
Consolidated
|
|
$
|
15,689,711
|
|
|
$
|
17,784,445
|
|
|
|
September 28,
2019 |
|
December 31,
2018 |
||||
Americas (e)
|
|
$
|
614,722
|
|
|
$
|
673,228
|
|
EMEA
|
|
138,564
|
|
|
110,996
|
|
||
Asia/Pacific
|
|
51,978
|
|
|
40,476
|
|
||
Consolidated
|
|
$
|
805,264
|
|
|
$
|
824,700
|
|
(e)
|
Includes net property, plant, and equipment related to the United States of $612,258 and $670,201 at September 28, 2019 and December 31, 2018, respectively.
|
|
|
Quarter Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
September 28,
2019 |
|
September 29,
2018 |
|
September 28,
2019 |
|
September 29,
2018 |
||||||||
Provision (benefit) at statutory tax rate
|
|
$
|
25,687
|
|
|
$
|
49,398
|
|
|
$
|
(59,110
|
)
|
|
$
|
135,326
|
|
State taxes, net of federal benefit
|
|
(1,030
|
)
|
|
4,255
|
|
|
(8,534
|
)
|
|
12,238
|
|
||||
International effective tax rate differential
|
|
4,774
|
|
|
1,574
|
|
|
12,991
|
|
|
4,372
|
|
||||
U.S. tax (benefit) on foreign earnings
|
|
(6,860
|
)
|
|
2,001
|
|
|
3,020
|
|
|
10,213
|
|
||||
Changes in tax accruals
|
|
2,954
|
|
|
(3,234
|
)
|
|
3,874
|
|
|
(1,941
|
)
|
||||
Tax credits
|
|
1,834
|
|
|
(2,486
|
)
|
|
(2,167
|
)
|
|
(6,223
|
)
|
||||
Non-deductible portion of impairment of goodwill
|
|
—
|
|
|
—
|
|
|
76,153
|
|
|
—
|
|
||||
Tax Act’s impact on deferred taxes (a)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,340
|
)
|
||||
Other
|
|
1,981
|
|
|
5,546
|
|
|
4,651
|
|
|
5,680
|
|
||||
Provision for income taxes
|
|
$
|
29,340
|
|
|
$
|
57,054
|
|
|
$
|
30,878
|
|
|
$
|
155,325
|
|
(a)
|
Tax benefit related to the net change in deferred tax liabilities stemming from the U.S. federal government enacting tax legislation reducing the U.S. federal tax rate from 35% to 21%.
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
•
|
impairments of $0.7 million in 2019;
|
•
|
losses from wind down of business of $36.8 million in 2019 and $0.6 million in 2018;
|
•
|
Digital inventory write-downs, net of $1.1 million in 2019;
|
•
|
AFS notes receivables and inventory recoveries of $0.7 million in 2019;
|
•
|
restructuring, integration, and other charges (excluding the impact of wind down) of $31.1 million in 2019 and $9.6 million in 2018;
|
•
|
identifiable intangible asset amortization (excluding the impact of wind down) of $10.3 million in 2019 and $8.8 million in 2018;
|
•
|
net gain on investments of $1.1 million in 2019 and $1.1 million in 2018; and
|
•
|
loss on disposition of businesses, net, of $2.0 million in 2018.
|
•
|
goodwill and other impairments of $623.8 million in 2019;
|
•
|
losses from wind down of business of $151.4 million and $15.6 million in 2018;
|
•
|
Digital inventory write-downs, net of $21.2 million in 2019;
|
•
|
AFS notes receivables reserves and inventory write-downs, net of $15.2 million in 2019;
|
•
|
restructuring, integration, and other charges (excluding the impact of wind down) of $62.1 million in 2019 and $38.2 million in 2018;
|
•
|
identifiable intangible asset amortization (excluding the impact of wind down) of $28.1 million in 2019 and $28.7 million in 2018;
|
•
|
impact of U.S. tax reform of $3.5 million in 2019;
|
•
|
net gain on investments of $7.9 million in 2019 and net loss on investments of $3.9 million in 2018; and
|
•
|
loss on disposition of businesses, net, of $0.9 million in 2019 and $3.6 million in 2018.
|
•
|
Sales, gross profit, and operating expenses as adjusted for the impact of changes in foreign currencies (referred to as changes in foreign currencies) by re-translating prior period results at current period foreign exchange rates, the impact of dispositions by adjusting the company’s operating results for businesses disposed, as if the dispositions had occurred at the beginning of the earliest period presented (referred to as dispositions), the impact of the company’s personal computer and mobility asset disposition business (referred to as wind down), the impact of inventory write-downs related to the digital business (referred to as “digital inventory write-downs and recoveries”), and the impact of the notes receivable reserves and inventory write-downs related to the AFS business (referred to as “AFS notes receivable reserves and credits” and “AFS inventory write-downs and recoveries,” respectively).
|
•
|
Operating income as adjusted to exclude identifiable intangible asset amortization, restructuring, integration, and other charges, and loss on disposition of businesses, net, AFS notes receivable reserves and credits and inventory write-downs and recoveries, digital inventory write-downs and recoveries, the impact of non-cash charges related to goodwill, trade names, and property, plant and equipment, and the impact of wind down.
|
•
|
Net income attributable to shareholders as adjusted to exclude identifiable intangible asset amortization, restructuring, integration, and other charges, and loss on disposition of businesses, net, AFS notes receivable reserves and credits and inventory write-downs and recoveries, digital inventory write-downs and recoveries, the impact of non-cash charges related to goodwill, trade names, and property, plant, and equipment, the impact of wind down, and the impact of U.S. tax reform.
|
|
Quarter Ended
|
|
|
|
Nine Months Ended
|
|
|
||||||||||||||
|
September 28,
2019 |
|
September 29,
2018 |
|
%
Change
|
|
September 28,
2019 |
|
September 29,
2018 |
|
%
Change
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Consolidated sales, as reported*
|
$
|
7,078
|
|
|
$
|
7,490
|
|
|
(5.5
|
)%
|
|
$
|
21,579
|
|
|
$
|
21,759
|
|
|
(0.8
|
)%
|
Impact of changes in foreign currencies
|
—
|
|
|
(103
|
)
|
|
|
|
—
|
|
|
(448
|
)
|
|
|
||||||
Impact of dispositions and wind down
|
(60
|
)
|
|
(116
|
)
|
|
|
|
(232
|
)
|
|
(378
|
)
|
|
|
||||||
Consolidated sales, as adjusted*
|
$
|
7,018
|
|
|
$
|
7,271
|
|
|
(3.5
|
)%
|
|
$
|
21,346
|
|
|
$
|
20,933
|
|
|
2.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Global components sales, as reported*
|
$
|
5,049
|
|
|
$
|
5,381
|
|
|
(6.2
|
)%
|
|
$
|
15,512
|
|
|
$
|
15,595
|
|
|
(0.5
|
)%
|
Impact of changes in foreign currencies
|
—
|
|
|
(68
|
)
|
|
|
|
—
|
|
|
(297
|
)
|
|
|
||||||
Impact of dispositions and wind down
|
(60
|
)
|
|
(105
|
)
|
|
|
|
(221
|
)
|
|
(313
|
)
|
|
|
||||||
Global components sales, as adjusted
|
$
|
4,989
|
|
|
$
|
5,208
|
|
|
(4.2
|
)%
|
|
$
|
15,291
|
|
|
$
|
14,985
|
|
|
2.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Global ECS sales, as reported*
|
$
|
2,029
|
|
|
$
|
2,109
|
|
|
(3.8
|
)%
|
|
$
|
6,067
|
|
|
$
|
6,163
|
|
|
(1.6
|
)%
|
Impact of changes in foreign currencies
|
—
|
|
|
(36
|
)
|
|
|
|
—
|
|
|
(151
|
)
|
|
|
||||||
Impact of dispositions
|
—
|
|
|
(11
|
)
|
|
|
|
(11
|
)
|
|
(65
|
)
|
|
|
||||||
Global ECS sales, as adjusted
|
$
|
2,029
|
|
|
$
|
2,062
|
|
|
(1.6
|
)%
|
|
$
|
6,056
|
|
|
$
|
5,947
|
|
|
1.8
|
%
|
|
Quarter Ended
|
|
|
|
Nine Months Ended
|
|
|
||||||||||||
|
September 28,
2019 |
|
September 29,
2018 |
|
% Change
|
|
September 28,
2019 |
|
September 29,
2018 |
|
% Change
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Consolidated gross profit, as reported
|
$
|
799
|
|
|
$
|
924
|
|
|
(13.5)%
|
|
$
|
2,475
|
|
|
$
|
2,726
|
|
|
(9.2)%
|
Impact of changes in foreign currencies
|
—
|
|
|
(15
|
)
|
|
|
|
—
|
|
|
(66
|
)
|
|
|
||||
Impact of dispositions and wind down
|
(4
|
)
|
|
(19
|
)
|
|
|
|
(8
|
)
|
|
(65
|
)
|
|
|
||||
Digital and AFS inventory write-downs and credits
|
1
|
|
|
—
|
|
|
|
|
23
|
|
|
—
|
|
|
|
||||
Consolidated gross profit, as adjusted*
|
$
|
796
|
|
|
$
|
890
|
|
|
(10.5)%
|
|
$
|
2,490
|
|
|
$
|
2,594
|
|
|
(4.0)%
|
Consolidated gross profit as a percentage of sales, as reported
|
11.3
|
%
|
|
12.3
|
%
|
|
(100) bps
|
|
11.5
|
%
|
|
12.5
|
%
|
|
(100) bps
|
||||
Consolidated gross profit as a percentage of sales, as adjusted
|
11.3
|
%
|
|
12.2
|
%
|
|
(90) bps
|
|
11.7
|
%
|
|
12.4
|
%
|
|
(70) bps
|
|
Quarter Ended
|
|
|
|
Nine Months Ended
|
|
|
||||||||||||
|
September 28,
2019 |
|
September 29,
2018 |
|
%
Change
|
|
September 28,
2019 |
|
September 29,
2018 |
|
%
Change
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Selling, general, and administrative expenses, as reported
|
$
|
522
|
|
|
$
|
576
|
|
|
(9.3)%
|
|
$
|
1,678
|
|
|
$
|
1,719
|
|
|
(2.4)%
|
Depreciation and amortization, as reported
|
45
|
|
|
46
|
|
|
(0.7)%
|
|
140
|
|
|
139
|
|
|
flat
|
||||
Operating expenses, as reported*
|
$
|
568
|
|
|
$
|
621
|
|
|
(8.6)%
|
|
$
|
1,817
|
|
|
$
|
1,858
|
|
|
(2.2)%
|
Impact of changes in foreign currencies
|
—
|
|
|
(9
|
)
|
|
|
|
—
|
|
|
(43
|
)
|
|
|
||||
Impact of dispositions and wind down
|
(14
|
)
|
|
(19
|
)
|
|
|
|
(58
|
)
|
|
(69
|
)
|
|
|
||||
AFS notes receivable (reserves) and credits
|
1
|
|
|
—
|
|
|
|
|
(13
|
)
|
|
—
|
|
|
|
||||
Operating expenses, as adjusted*
|
$
|
554
|
|
|
$
|
593
|
|
|
(6.5)%
|
|
$
|
1,746
|
|
|
$
|
1,746
|
|
|
flat
|
Operating expenses as a percentage of sales, as reported
|
8.0
|
%
|
|
8.3
|
%
|
|
(30) bps
|
|
8.4
|
%
|
|
8.5
|
%
|
|
(10) bps
|
||||
Operating expenses as a percentage of sales, as adjusted
|
7.9
|
%
|
|
8.2
|
%
|
|
(30) bps
|
|
8.2
|
%
|
|
8.3
|
%
|
|
(10) bps
|
|
Quarter Ended
|
|
|
|
Nine Months Ended
|
|
|
||||||||||||
|
September 28,
2019 |
|
September 29,
2018 |
|
%
Change
|
|
September 28,
2019 |
|
September 29,
2018 |
|
%
Change |
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Consolidated operating income (loss), as reported
|
$
|
173
|
|
|
$
|
290
|
|
|
(40.3)%
|
|
$
|
(130
|
)
|
|
$
|
813
|
|
|
(116.0)%
|
Identifiable intangible asset amortization**
|
10
|
|
|
9
|
|
|
|
|
28
|
|
|
29
|
|
|
|
||||
Restructuring, integration, and other charges**
|
31
|
|
|
10
|
|
|
|
|
62
|
|
|
38
|
|
|
|
||||
Loss on disposition of businesses, net**
|
—
|
|
|
2
|
|
|
|
|
1
|
|
|
4
|
|
|
|
||||
AFS notes receivable reserve and inventory write-downs (credits)
|
(1
|
)
|
|
—
|
|
|
|
|
15
|
|
|
—
|
|
|
|
||||
Digital inventory write-downs
|
1
|
|
|
—
|
|
|
|
|
21
|
|
|
—
|
|
|
|
||||
Goodwill and other impairments**
|
1
|
|
|
—
|
|
|
|
|
624
|
|
|
—
|
|
|
|
||||
Impact of wind down**
|
37
|
|
|
1
|
|
|
|
|
151
|
|
|
15
|
|
|
|
||||
Consolidated operating income, as adjusted*
|
$
|
253
|
|
|
$
|
311
|
|
|
(18.9)%
|
|
$
|
772
|
|
|
$
|
899
|
|
|
(14.1)%
|
Consolidated operating income as a percentage of sales, as reported
|
2.4
|
%
|
|
3.9
|
%
|
|
(150) bps
|
|
(0.6
|
)%
|
|
3.7
|
%
|
|
(430) bps
|
||||
Consolidated operating income, as adjusted, as a percentage of sales, as reported
|
3.6
|
%
|
|
4.2
|
%
|
|
(60) bps
|
|
3.6
|
%
|
|
4.1
|
%
|
|
(50) bps
|
|
Quarter Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 28,
2019 |
|
September 29,
2018 |
|
September 28,
2019 |
|
September 29,
2018 |
||||||||
|
|
|
|
|
|
|
|
||||||||
Net income (loss) attributable to shareholders, as reported
|
$
|
92
|
|
|
$
|
177
|
|
|
$
|
(316
|
)
|
|
$
|
486
|
|
Identifiable intangible asset amortization**
|
10
|
|
|
9
|
|
|
27
|
|
|
28
|
|
||||
Restructuring, integration, and other charges**
|
31
|
|
|
10
|
|
|
62
|
|
|
38
|
|
||||
Loss on disposition of businesses, net**
|
—
|
|
|
2
|
|
|
1
|
|
|
4
|
|
||||
(Gain) loss on investments, net
|
(1
|
)
|
|
(1
|
)
|
|
(8
|
)
|
|
4
|
|
||||
AFS notes receivable reserves and inventory write-downs (credits)
|
(1
|
)
|
|
—
|
|
|
15
|
|
|
—
|
|
||||
Digital inventory write-downs and credits
|
1
|
|
|
—
|
|
|
21
|
|
|
—
|
|
||||
Goodwill and other impairments**
|
1
|
|
|
—
|
|
|
624
|
|
|
—
|
|
||||
Impact of wind-down**
|
37
|
|
|
1
|
|
|
151
|
|
|
16
|
|
||||
Tax effect of adjustments above
|
(15
|
)
|
|
(5
|
)
|
|
(126
|
)
|
|
(24
|
)
|
||||
Impact of U.S. tax reform
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
||||
Net income attributable to shareholders, as adjusted *
|
$
|
155
|
|
|
$
|
191
|
|
|
$
|
455
|
|
|
$
|
551
|
|
Month of Board Approval
|
|
Dollar Value Approved for Repurchase
|
|
Dollar Value of Shares Repurchased
|
|
Approximate
Dollar Value of
Shares that May
Yet be
Purchased
Under the
Program
|
||||||
December 2016
|
|
$
|
400,000
|
|
|
$
|
400,000
|
|
|
$
|
—
|
|
December 2018
|
|
600,000
|
|
|
161,463
|
|
|
438,537
|
|
|||
Total
|
|
$
|
1,000,000
|
|
|
$
|
561,463
|
|
|
$
|
438,537
|
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Item 4.
|
Controls and Procedures
|
Item 1A.
|
Risk Factors
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
Month
|
|
Total
Number of
Shares
Purchased (a)
|
|
Average
Price Paid
per Share
|
|
Total Number of
Shares
Purchased as
Part of Publicly
Announced
Program (b)
|
|
Approximate
Dollar Value of
Shares that May
Yet be
Purchased
Under the
Programs
|
||||||
June 30 through July 27, 2019
|
|
602,722
|
|
|
$
|
69.35
|
|
|
602,722
|
|
|
$
|
496,740
|
|
July 28 through August 24, 2019
|
|
314,105
|
|
|
70.39
|
|
|
311,905
|
|
|
474,789
|
|
||
August 25 through September 28, 2019
|
|
499,463
|
|
|
72.60
|
|
|
499,345
|
|
|
438,537
|
|
||
Total
|
|
1,416,290
|
|
|
|
|
|
1,413,972
|
|
|
|
|
(a)
|
Includes share repurchases under the Share-Repurchase Program and those associated with shares withheld from employees for stock-based awards, as permitted by the Omnibus Incentive Plan, in order to satisfy the required tax withholding obligations.
|
(b)
|
The difference between the “total number of shares purchased” and the “total number of shares purchased as part of publicly announced program” for the quarter ended September 28, 2019 is 2,318 shares, which relate to shares withheld from employees for stock-based awards, as permitted by the Omnibus Incentive Plan, in order to satisfy the required tax withholding obligations. The purchase of these shares were not made pursuant to any publicly announced repurchase plan.
|
Item 5.
|
Other Information
|
Item 6.
|
Exhibits
|
Exhibit
Number
|
|
Exhibit
|
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document.
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document.
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Documents.
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Definition Linkbase Document.
|
|
|
|
ARROW ELECTRONICS, INC.
|
|
|
|
|
|
|
Date:
|
November 7, 2019
|
|
By:
|
/s/ Chris D. Stansbury
|
|
|
|
|
Chris D. Stansbury
|
|
|
|
|
Senior Vice President and Chief Financial Officer
|
1 Year Arrow Electronics Chart |
1 Month Arrow Electronics Chart |
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