UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

For the quarterly period ended March ~~31, 2018~~30, 2019

For the transition period from to

Commission file number 1-4482

ARROW ELECTRONICS ~~INC.~~INC

(Exact name of registrant as specified in its charter)

(Registrant's telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Large accelerated filer x

Non-accelerated filer o ~~(do not check if a smaller reporting company)~~

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

ARROW ELECTRONICS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands except per share data)

(Unaudited)


	Quarter Ended
	March 31, 2018			April 1, 2017		Quarter Ended
				(Adjusted)		March 30, 2019			March 31, 2018
Sales	$	6,875,613		$	5,736,780	$	7,155,991		$	6,875,613
Cost of sales	6,006,669			4,975,583		6,294,303			6,006,669
Gross profit	868,944			761,197		861,688			868,944
Operating expenses:
Selling, general, and administrative expenses	562,969			515,526		556,076			562,969
Depreciation and amortization	47,247			37,141		47,526			47,247
Loss on disposition of businesses, net	1,562			—		866			1,562
Restructuring, integration, and other charges	21,171			15,505		11,660			21,171
	632,949			568,172		616,128			632,949
Operating income	235,995			193,025		245,560			235,995
Equity in earnings (losses) of affiliated companies	(673		)	925
Equity in losses of affiliated companies						(1,467		)	(673		)
Gain (loss) on investments, net	(2,452		)	1,982		5,348			(2,452		)
Post-retirement expense	1,231			1,800
Employee benefit plan expense						1,139			1,231
Interest and other financing expense, net	45,179			38,249		51,981			45,179
Income before income taxes	186,460			155,883		196,321			186,460
Provision for income taxes	46,590			39,564		53,907			46,590
Consolidated net income	139,870			116,319		142,414			139,870
Noncontrolling interests	776			1,582		1,679			776
Net income attributable to shareholders	$	139,094		$	114,737	$	140,735		$	139,094
Net income per share:
Basic	$	1.58		$	1.29	$	1.65		$	1.58
Diluted	$	1.56		$	1.27	$	1.63		$	1.56
Weighted-average shares outstanding:
Basic	87,955			89,262		85,400			87,955
Diluted	89,035			90,541		86,319			89,035

See accompanying notes.

ARROW ELECTRONICS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

(Unaudited)


	Quarter Ended
	March 31, 2018		April 1, 2017		Quarter Ended
			(Adjusted)		March 30, 2019		March 31, 2018
Consolidated net income	$	139,870	$	116,319	$	142,414	$	139,870
Other comprehensive income:
Foreign currency translation adjustment and other	44,969		36,833		4,442		44,969
Unrealized gain on investment securities, net	—		1,728
Unrealized gain on interest rate swaps designated as cash flow hedges, net	228		97
Employee benefit plan items, net	282		406
Unrealized gain on foreign exchange contracts designated as net investment hedges, net of taxes					5,533		—
Unrealized gain on interest rate swaps designated as cash flow hedges, net of taxes					240		228
Employee benefit plan items, net of taxes					319		282
Other comprehensive income	45,479		39,064		10,534		45,479
Comprehensive income	185,349		155,383		152,948		185,349
Less: Comprehensive income attributable to noncontrolling interests	523		2,169		1,031		523
Comprehensive income attributable to shareholders	$	184,826	$	153,214	$	151,917	$	184,826

See accompanying notes.

ARROW ELECTRONICS, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands except par value)

(Unaudited)


	March 31, 2018			December 31, 2017
				(Adjusted)			March 30, 2019			December 31, 2018
ASSETS
Current assets:
Cash and cash equivalents	$	548,644		$	730,083		$	351,899		$	509,327
Accounts receivable, net	7,378,453			8,125,588			7,902,516			8,945,463
Inventories	3,572,714			3,302,518			3,734,905			3,878,678
Other current assets	267,402			256,028			264,564			274,832
Total current assets	11,767,213			12,414,217			12,253,884			13,608,300
Property, plant, and equipment, at cost:
Land	13,288			12,866			7,845			7,882
Buildings and improvements	163,901			160,664			157,326			158,712
Machinery and equipment	1,362,693			1,330,730			1,428,758			1,425,933
	1,539,882			1,504,260			1,593,929			1,592,527
Less: Accumulated depreciation and amortization	(690,015		)	(665,785		)	(774,325		)	(767,827		)
Property, plant, and equipment, net	849,867			838,475			819,604			824,700
Investments in affiliated companies	88,166			88,347			85,296			83,693
Intangible assets, net	348,378			286,215			369,291			372,644
Goodwill	2,703,542			2,470,047			2,632,451			2,624,690
Other assets	367,639			361,966			670,226			270,418
Total assets	$	16,124,805		$	16,459,267		$	16,830,752		$	17,784,445
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	6,110,752		$	6,756,830		$	6,034,457		$	7,631,879
Accrued expenses	806,122			841,675			860,982			912,292
Short-term borrowings, including current portion of long-term debt	38,220			356,806			138,686			246,257
Total current liabilities	6,955,094			7,955,311			7,034,125			8,790,428
Long-term debt	3,533,050			2,933,045			3,575,891			3,239,115
Other liabilities	487,847			572,971			719,326			378,536
Commitments and contingencies (Note M)
Commitments and contingencies (Note N)
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
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	1,105,108			1,114,167			1,128,757			1,135,934
Treasury stock (37,804 and 37,733 shares in 2018 and 2017, respectively), at cost	(1,787,653		)	(1,762,239		)
Treasury stock (40,251 and 40,233 shares in 2019 and 2018, respectively), at cost							(1,992,981		)	(1,972,254		)
Retained earnings	5,758,234			5,596,786			6,476,070			6,335,335
Accumulated other comprehensive loss	(101,505		)	(124,883		)	(288,267		)	(299,449		)
Total shareholders' equity	5,099,608			4,949,255			5,449,003			5,324,990
Noncontrolling interests	49,206			48,685			52,407			51,376
Total equity	5,148,814			4,997,940			5,501,410			5,376,366
Total liabilities and equity	$	16,124,805		$	16,459,267		$	16,830,752		$	17,784,445

See accompanying notes.

ARROW ELECTRONICS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)


	Three Months Ended
	March 31, 2018			April 1, 2017			Three Months Ended
				(Adjusted)			March 30, 2019			March 31, 2018
Cash flows from operating activities:
Consolidated net income	$	139,870		$	116,319		$	142,414		$	139,870
Adjustments to reconcile consolidated net income to net cash used for operations:
Depreciation and amortization	47,247			37,141			47,526			47,247
Amortization of stock-based compensation	12,994			11,575			19,090			13,043
Equity in (earnings) losses of affiliated companies	673			(925		)
Equity in losses of affiliated companies							1,467			673
Deferred income taxes	(2,818		)	13,938			6,968			(2,818		)
(Gain) loss on investments, net							(5,348		)	2,452
Other	5,917			1,445			5,575			3,465
Change in assets and liabilities, net of effects of acquired and disposed businesses:
Accounts receivable	789,843			948,621			949,989			789,843
Inventories	(260,620		)	(38,185		)	134,402			(260,620		)
Accounts payable	(691,818		)	(982,355		)	(1,540,008		)	(691,818		)
Accrued expenses	(22,087		)	(93,865		)	(50,292		)	(22,087		)
Other assets and liabilities	(94,278		)	(34,599		)	(40,782		)	(94,327		)
Net cash used for operating activities	(75,077		)	(20,890		)	(328,999		)	(75,077		)
Cash flows from investing activities:
Cash consideration paid for acquired businesses	(331,467		)	—
Cash consideration paid for acquired businesses, net of cash acquired							—			(331,467		)
Proceeds from disposition of businesses	34,291			—			—			34,291
Acquisition of property, plant, and equipment	(34,735		)	(62,118		)	(33,815		)	(34,735		)
Proceeds from sale of property, plant, and equipment	—			7,886
Other	(4,500		)	—			2,940			(4,500		)
Net cash used for investing activities	(336,411		)	(54,232		)	(30,875		)	(336,411		)
Cash flows from financing activities:
Change in short-term and other borrowings	(18,382		)	76,402			(107,244		)	(18,387		)
Proceeds from long-term bank borrowings, net	601,386			62,500			335,023			601,386
Redemption of notes	(300,000		)	—			—			(300,000		)
Proceeds from exercise of stock options	4,992			17,259			6,931			4,997
Repurchases of common stock	(52,513		)	(68,847		)	(53,925		)	(52,513		)
Purchase of shares from noncontrolling interest	—			(23,350		)
Net cash provided by financing activities	235,483			63,964			180,785			235,483
Effect of exchange rate changes on cash	(5,434		)	(1,600		)	21,661			(5,434		)
Net decrease in cash and cash equivalents	(181,439		)	(12,758		)	(157,428		)	(181,439		)
Cash and cash equivalents at beginning of period	730,083			534,320			509,327			730,083
Cash and cash equivalents at end of period	$	548,644		$	521,562		$	351,899		$	548,644

See accompanying notes.

ARROW ELECTRONICS, INC.

CONSOLIDATED STATEMENTS OF EQUITY

(In thousands)

(Unaudited)



	Common Stock at Par Value		Capital in Excess of Par Value			Treasury Stock			Retained Earnings		Accumulated Other Comprehensive 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



	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

See accompanying notes.

ARROW ELECTRONICS, INC.

NOTES TO CONSOLIDATED FINANCIALSTATEMENTS

(Dollars in thousands except per share data)

(Unaudited)

Note A – Basis of Presentation

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

These consolidated financial statements do not include all of the information or notes necessary for a complete presentation and, accordingly, should be read in conjunction with the company's audited consolidated financial statements and accompanying notes for the year ended December 31, ~~2017,~~2018, as filed in the company's Annual Report on Form 10-K.

Quarter End

The company operates on a quarterly calendar that closes on the Saturday closest to the end of the calendar quarter.

Reclassification

Certain prior period amounts were reclassified to conform to the current period ~~presentation (See Note B).~~presentation. These reclassifications ~~are included in the footnote tables for the quarter ended March 31, 2018.~~did not have a material impact on previously reported amounts.

Note B – Impact of Recently Issued Accounting Standards

In ~~February~~August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. ~~2018-02,~~ ~~Income Statement - Reporting Comprehensive Income~~ ~~(Topic 220)~~2018-15, Intangibles—Goodwill and Other— Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract (a consensus of the FASB Emerging Issues Task Force) ("ASU No. ~~2018-02"~~2018-15"). ASU No. ~~2018-02 provides financial statement preparers with an option to reclassify stranded tax effects within accumulated other comprehensive income to retained earnings~~2018-15 aligns the requirements for capitalizing implementation costs incurred in ~~each period~~a hosting arrangement that is ~~impacted by U.S. federal government tax legislation enacted in 2017 (the "Tax Act"). Effective January 1, 2018,~~a service contract with the requirements for capitalizing implementation costs incurred to develop internal-use software. ASU No. 2018-15 is effective for the company ~~adopted~~in the first quarter of 2020, with early adoption permitted, and is to be applied either retrospectively or prospectively. The company is currently evaluating the potential effects of adopting the provisions of ASU No. ~~2018-02 on a prospective basis as an adjustment~~2018-15. The adoption is not expected to ~~retained earnings of $4,116.~~be material to the consolidated financial statements.

In August 2017, the FASB issued Accounting Standards Update No. 2017-12, Derivatives and Hedging (Topic 815) ("ASU No. 2017-12"). ASU No. 2017-12 simplifies certain aspects of hedge accounting and results in a more accurate portrayal of the economics of an entity’s risk management activities in its financial statements. ASU No. 2017-12 is effective for the company in the first quarter of 2019, with early adoption permitted, and is to be applied on a modified retrospective basis. The company is currently evaluating the potential effects of adopting the provisions of ASU No. 2017-12.

~~In March 2017, the FASB issued Accounting Standards Update No. 2017-07,~~ ~~Compensation - Retirement Benefits~~ (Topic 715) ("ASU No. 2017-07"). ASU No. 2017-07 requires that the service cost component of pension expense be included in the same line item as other compensation costs arising from services rendered by employees, with the other components of pension expense being classified outside of a subtotal of income from operations. EffectiveOn January 1, ~~2018,~~2019, the company adopted the provisions of ASU No. ~~2017-07~~2017-12 on a modified retrospective ~~basis for~~basis. The adoption of the ~~presentation requirements.~~provisions of ASU No. 2017-12 did not materially impact the company's consolidated financial position or results of operations.

In June 2016, the FASB issued Accounting Standards Update No. 2016-13, Financial Instruments - Credit Losses (Topic 326) ("ASU No. 2016-13"). ASU No. 2016-13 revises the methodology for measuring credit losses on financial instruments and the timing of when such losses are recorded. In November 2018, the FASB issued ASU No. 2018-19, Codification Improvements to Topic 326, Financial Instruments-Credit Losses, and in April 2019, the FASB issued ASU No. 2019-04, Codification Improvements to Topic 326, Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments. These ASU's provide supplemental guidance and clarification to ASU No. 2016-13 and must be adopted concurrently with the adoption of ASU No. 2016-13, cumulatively referred to as “Topic 326.” Topic 326 is effective for the company in the first quarter of 2020, with early adoption permitted, and is to be applied using a modified retrospective approach. The company is currently evaluating the potential effects of adopting the provisions of ~~ASU No. 2016-13.~~Topic 326.

In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases ~~(Topic~~(Topic 842) ("("ASU No. 2016-02"). ASU No. 2016-02 requires the entity to recognize the assets and liabilities for the rights and obligations created by leased assets. Leases will be classified as either finance or operating, with classification affecting expense recognition in the income statement. In July 2018 the FASB issued ASU No. ~~2016-02 is effective for~~2018-10, Codification Improvements to Topic 842, Leases, and ASU No. 2018-11, Leases (Topic 842) Targeted Improvements. In March 2019, the ~~company in the first quarter of 2019, with early adoption permitted, and is~~FASB issued ASU No. 2019-01 Codification Improvements to ~~be applied using a modified retrospective approach. While the company continues to evaluate the effects of adopting the provisions of ASU No.~~Topic 842, Leases.

ARROW ELECTRONICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands except per share data)

(Unaudited)

~~2016-02, the company expects most existing operating lease commitments will be recognized as operating lease liabilities and right-of-use assets upon adoption.~~

~~In January 2016, the FASB issued Accounting Standards Update No. 2016-01,~~ ~~Financial Instruments - Recognition and Measurement of Financial Assets and Financial Liabilities~~ (Topic 825) ("ASU No. 2016-01"). ASU No. 2016-01 revises the classification and measurement of investments in certain equity investments and the presentation of certain fair value changes for certain financial liabilities measured at fair value. ASU No. 2016-01 requires the change in fair value of many equity investments to be recognized in net income. Effective January 1, 2018, the company adopted the provisions of ASU No. 2016-01 on a prospective basis as an adjustment to retained earnings of $18,238.

~~In May 2014, the FASB issued Accounting Standards Update No. 2014-09,~~ ~~Revenue from Contracts with Customers~~ (Topic 606) ("ASU No. 2014-09"). ASU No. 2014-09 supersedes all existing revenue recognition guidance. Under ASU No. 2014-09, an entity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In March, April, May, and December 2016, the FASB issued ASU No. 2016-08, ~~Revenue from Contracts with Customers: Principal versus Agent Considerations~~ (~~Reporting Revenue Gross versus Net)~~ ~~("ASU No. 2016-08"); ASU No. 2016-10,~~ ~~Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing~~ ~~("ASU No. 2016-10"); ASU No. 2016-12,~~ ~~Revenue from Contracts with Customers: Narrow-Scope Improvements and Practical Expedients~~ ~~("ASU No. 2016-12"); and ASU No. 2016-19,~~ ~~Technical Corrections and Improvements~~ ~~("ASU No. 2016-19"), respectively. ASU No. 2016-08, ASU No. 2016-10, ASU No. 2016-12, and ASU No. 2016-19~~These ASU's provide supplemental adoption guidance and clarification to ASU No. ~~2014-09,~~2016-02, and must be adopted concurrently with the adoption of ASU No. ~~2014-09,~~2016-02, cumulatively referred to as ~~"Topic 606"~~“Topic 842”.

On January 1, ~~2018,~~2019, the company adopted Topic ~~606~~842 applying the ~~full retrospective method. The primary impact of~~optional transition method, which allows an entity to apply the new standard at the adoption ~~relates~~date with a cumulative effect adjustment to the ~~application~~opening balance of ~~gross versus net indicators and~~retained earnings in the ~~determination~~period of ~~whether goods and services are distinct.~~adoption. In addition, the company ~~is deferring certain revenue due~~elected a package of practical expedients and the short-term lease exception outlined in Topic 842. The company also implemented internal controls and key systems to enable the ~~determination~~preparation of ~~when transfer~~financial information on adoption. As a result of ~~control occurs. The deferrals are expected to be~~adopting Topic 842, the company recognized ~~within a year of the transaction date.~~

~~The following table presents the effect of the adoption of Topic 606, ASU No. 2017-07,~~assets and ~~other prior period reclassifications.~~

Quarter Ended April 1, 2017
As Previously Reported Adjustments** Adjusted for New Standards
Sales $ 5,759,552

$ (22,772 )
$ 5,736,780
Cost of sales 4,999,665

(24,082 )
4,975,583
Gross profit 759,887

1,310

761,197
Operating expenses:

Selling, general, and administrative expenses 515,519

7

515,526
Depreciation and amortization 37,141

—

37,141
Restructuring, integration, and other charges 15,505

—

15,505
568,165

7

568,172
Operating income 191,722

1,303

193,025
Equity in earnings of affiliated companies 925

—

925
Gain (loss) on investments, net —

1,982

1,982
Post-retirement expense —

1,800

1,800
Interest and other financing expense, net 38,073

176

38,249
Income before income taxes 154,574

1,309

155,883
Provision for income taxes 39,224

340

39,564
Consolidated net income 115,350

969

116,319
Noncontrolling interests 1,582

—

1,582
Net income attributable to shareholders $ 113,768

$ 969

$ 114,737
Net income per share:
Basic* $ 1.27

$ 0.01

$ 1.29
Diluted* $ 1.26

$ 0.01

$ 1.27

* The sum of the as previously reported and as adjusted may not agree to totals, as presented, due to rounding.

** Topic 606 impacted sales and cost of sales. ASU 2017-07 and other reclassifications impacted operating and non-operating expenses.

~~ARROW ELECTRONICS, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

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

~~(Unaudited)~~

~~The following table presents the effect of the adoption of Topic 606, ASU No. 2017-07, and other prior period reclassifications for 2017.~~

First Quarter Second Quarter Third Quarter Fourth Quarter Year to Date
As Previously Reported Adjusted for New Standards As Previously Reported Adjusted for New Standards As Previously Reported Adjusted for New Standards As Previously Reported Adjusted for New Standards As Previously Reported Adjusted for New Standards
2017
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
$ 26,812,508
$ 26,554,563
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
23,455,169
23,197,595
Operating income 191,722
193,025
229,822
230,446
235,992
235,441
270,914
286,824
928,450
945,736
Net income attributable to shareholders $ 113,768
$ 114,737
$ 99,679
$ 99,722
$ 134,630
$ 134,064
$ 53,885
$ 53,653
$ 401,962
$ 402,176

~~Operating income~~liabilities for the ~~fourth quarter of 2017 was impacted~~rights and obligations created by ~~a reclassification of pension settlement expense of $16,706 due~~operating leases, refer to ~~the implementation of ASU No. 2017-07. The settlement expense was moved to "post-retirement expense", which is classified as non-operating on the statement of operations.~~Note L.

Note C – Significant Accounting Policies

Except for the changes below, no material changes have been made to the company's significant accounting policies disclosed in Note 1, Summary of Significant Accounting Policies, in its Annual Report on Form 10-K, filed on February ~~6, 2018,~~7, 2019, for the year ended December 31, ~~2017.~~2018.

~~Revenue Recognition~~Leases

~~Revenue is recognized~~The company determines if a contract contains a lease at inception based on whether it conveys the ~~point at which~~right to control the use of an identified asset. Substantially all of the ~~underlying goods or services~~company's leases are transferred to the customer, which included determining whether goods and services are distinct and separate performance obligations, which may require significant judgment. Satisfaction of the company’s performance obligations occur upon the transfer of control of goods or services, either from the company’s facilities or directly from suppliers to customers.classified as operating leases. The company ~~considers customer purchase orders, which~~has determined that operating lease right-of-use assets will be recorded to "Other assets" and lease liabilities will be recorded to "Other liabilities" and "Accrued expenses" in ~~some cases~~the consolidated balance sheets. Lease expense will be recorded to "Selling, general, and administrative expenses" in the consolidated statements of operations. Operating lease payments will be recorded to "Operating cash flows" in the consolidated statements of cash flows.

Operating lease right-of-use assets and lease liabilities are ~~governed by master agreements, to be~~recognized based on the ~~contracts with a customer. All revenue~~net present value of future minimum lease payments over the lease term starting on the commencement date. The company generally is ~~generated from contracts with customers.~~

~~In determining the transaction price, the company evaluates whether the price is subject to refund or adjustment~~not able to determine the ~~net consideration~~rate implicit in its leases and, as such, will apply an incremental borrowing rate based on the company’s cost of borrowing for the relevant terms of each lease. Lease expense for minimum lease payments are recognized on a straight-line basis over the lease term. Lease terms may include an option to ~~which~~extend or terminate a lease if it is reasonably certain that the company ~~expects~~will exercise such options. The company has elected the practical expedient to ~~receive. The amount~~not separate lease components from non-lease components, and also has elected not to record a right-of-use asset or lease liability for leases which, at inception, have a term of consideration received and revenue recognized by the company vary due to contractually defined incentives and return rights that are held by customers. These adjustments are made in the same period as the underlying transactions.

~~Investments~~

~~The change in fair value of equity investments, for which the company does not possess the ability to exercise significant influence,~~twelve months or less. Variable lease payments are recognized in ~~net income. The fair value of these equity investments are based upon readily determinable fair values (Note I).~~the period in which the obligation for those payments is incurred.

Note D – Acquisitions

2018 Acquisitions

~~On January 8,~~In 2018, the company acquired eInfochips for a purchase price of ~~$327,532,~~$327,628, which included $14,769 of cash acquired. eInfochips services customers at every phase of technology deployment, including custom hardware and software, and new Internet of Things based business models. eInfochips is recorded in the company's global components business segment.

~~Since the date of the acquisition, eInfochips sales of $19,586 were included in the company's consolidated results of operations.~~

ARROW ELECTRONICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands except per share data)

(Unaudited)

The purchase price allocation is preliminary and subject to adjustment based on our final assessment of fair value of the acquired assets and liabilities. The items with the highest likelihood of changing upon finalization of the valuation include goodwill, intangibles, and deferred taxes.

The following table summarizes the ~~preliminary~~ allocation of the net consideration paid to the fair value of the assets acquired and liabilities assumed for the eInfochips acquisition:



Accounts receivable, net	$	13,670
Inventories	1,512
Property, plant, and equipment	3,485
Other assets	46,488
Identifiable intangible assets	128,000
Goodwill	197,126
Accounts payable	(520		)
Accrued expenses	(33,836		)
Deferred tax liability	(41,474		)
Other liabilities	(1,592		)
Cash consideration paid, net of cash acquired	$	312,859

Accounts receivable, net $ 14,162
Inventories 1,512
Property, plant, and equipment 8,114
Other assets 24,021
Identifiable intangible assets 71,710
Goodwill 202,267
Accounts payable (517 )
Accrued expenses (6,909 )
Other liabilities (1,597 )
Cash consideration paid, net of cash acquired $ 312,763

In connection with the eInfochips acquisition, the company allocated ~~$71,710~~$109,000 and $19,000 to customer relationships and trade name with a ~~weighted-average~~ life of ~~9 years.~~15 years and 10 years, respectively.

The goodwill related to the eInfochips acquisition represents the expected synergies from combining operations and was recorded in the company's global components business ~~segment.~~segment and is not tax deductible.

During ~~the first quarter of~~ 2018, the company completed one additional acquisition with a purchase price of approximately $18,704, net of cash acquired. The impact of this acquisition was not material to the company's consolidated financial position or results of operations.

The following table summarizes the company's unaudited consolidated results of operations for the first quarter of 2017, as well as the unaudited pro forma consolidated results of operations of the company, as though the 2018 acquisitions occurred on January 1, 2017:

As Reported Pro Forma
Sales $ 5,736,780
$ 5,774,079
Net income attributable to shareholders 114,737
115,222
Net income per share:
Basic $ 1.29
$ 1.29
Diluted $ 1.27
$ 1.27

~~2017 Acquisitions~~

During 2017, the company acquired an additional 11.9% of the noncontrolling interest common shares of Data Modul AG for $23,350, increasing the company's ownership interest in Data Modul to 69.2%. The impact of this acquisition was not material to the company's consolidated financial position or results of operations. In addition, the company completed two acquisitions for $3.628, net of cash acquired. The impact of these acquisitions was not material to the company's consolidated financial position or results of operations. The pro forma impact of the 2017 acquisitions on the consolidated results of operations of the company for 2017, as though the acquisitions occurred on January 1, 2017, was also not material.

Note E – Goodwill and Intangible Assets

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

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



	Global Components		Global ECS			Total
Balance as of December 31, 2018 (a)	$	1,437,501	$	1,187,189		$	2,624,690
Dispositions and related adjustments	—		(1,386		)	(1,386		)
Foreign currency translation adjustment	15,869		(6,722		)	9,147
Balance as of March 30, 2019 (a)	$	1,453,370	$	1,179,081		$	2,632,451


(a)	The total carrying value of goodwill as of March 30, 2019 and 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.

ARROW ELECTRONICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands except per share data)

(Unaudited)

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

Global
Components
Global ECS Total
Balance as of December 31, 2017 (a) $ 1,264,869
$ 1,205,178
$ 2,470,047
Acquisitions and related adjustments 202,267
14,201
216,468
Foreign currency translation adjustment 4,565
12,462
17,027
Balance as of March 31, 2018 (a) $ 1,471,701
$ 1,231,841
$ 2,703,542


~~(a)~~	The total carrying value of goodwill for all periods in the table above is reflected net of $1,026,702 of accumulated impairment charges, of which $716,925 was recorded in the global components business segment and $309,777 was recorded in the global ECS business segment.

Intangible assets, net, are comprised of the following as of March ~~31, 2018~~30, 2019:



	Weighted-Average Life	Gross Carrying Amount		Accumulated Amortization			Net
Non-amortizable trade names	indefinite	$	101,000	$	—		$	101,000
Customer relationships	11 years	482,084		(232,649		)	249,435
Developed technology	5 years	6,340		(4,596		)	1,744
Amortizable trade name	9 years	21,407		(4,295		)	17,112
		$	610,831	$	(241,540	)	$	369,291

Weighted-Average Life Gross Carrying Amount Accumulated Amortization Net
Non-amortizable trade names indefinite $ 101,000
$ —
$ 101,000
Customer relationships 10 years 454,492
(211,062 ) 243,430
Developed technology 5 years 6,340
(3,360 ) 2,980
Amortizable trade name 5 years 2,409
(1,441 ) 968
$ 564,241
$ (215,863 ) $ 348,378

Intangible assets, net, are comprised of the following as of December 31, ~~2017:~~2018:



	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

Weighted-Average Life Gross Carrying Amount Accumulated Amortization Net
Non-amortizable trade names indefinite $ 101,000
$ —
$ 101,000
Customer relationships 10 years 440,167
(259,337 ) 180,830
Developed technology 5 years 6,340
(3,043 ) 3,297
Amortizable trade name 5 years 2,409
(1,321 ) 1,088
$ 549,916
$ (263,701 ) $ 286,215

During the first quarter of ~~2018~~2019 and ~~2017,~~2018, the company recorded amortization expense related to identifiable intangible assets of ~~$13,520~~$11,930 and ~~$12,900,~~$13,520, respectively.

Note F – Investments in Affiliated Companies

The company owns a 50% interest in several joint ventures with Marubun Corporation (collectively "Marubun/Arrow") and several interests ranging from ~~43%~~19% to 50% in other joint ventures and equity method investments. These investments are accounted for using the equity method.

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



	March 30, 2019		December 31, 2018
Marubun/Arrow	$	75,107	$	73,253
Other	10,189		10,440
	$	85,296	$	83,693

March 31,
2018 December 31,
2017
Marubun/Arrow $ 71,337
$ 70,167
Other 16,829
18,180
$ 88,166
$ 88,347

~~ARROW ELECTRONICS, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

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

~~(Unaudited)~~

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



	Quarter Ended
	March 30, 2019			March 31, 2018
Marubun/Arrow	$	1,226		$	1,091
Other	(2,693		)	(1,764		)
	$	(1,467	)	$	(673	)

Quarter Ended
March 31,
2018 April 1,
2017
Marubun/Arrow $ 1,091
$ 1,665
Other (1,764 ) (740 )
$ (673 ) $ 925

Under the terms of various joint venture agreements, the company is required to pay its pro-rata share of the third party debt of the joint ventures in the event that the joint ventures are unable to meet their obligations. At March 30, 2019, the company's pro-rata share of this debt was approximately $6,100. At December 31, 2018, the company's pro-rata share of this debt was approximately ~~$2,770. There were no outstanding borrowings under the third party debt agreements of the joint ventures as of December 31, 2017.~~$2,860. The company believes there is sufficient equity in each of the joint ventures to meet the obligations.

ARROW ELECTRONICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands except per share data)

(Unaudited)

Note G – Accounts Receivable

Accounts receivable, net, consists of the following:



	March 30, 2019			December 31, 2018
Accounts receivable	$	7,962,977		$	9,021,051
Allowances for doubtful accounts	(60,461		)	(75,588		)
	$	7,902,516		$	8,945,463

March 31,
2018 December 31,
2017
Accounts receivable $ 7,438,017
$ 8,181,879
Allowances for doubtful accounts (59,564 ) (56,291 )
$ 7,378,453
$ 8,125,588

The company maintains allowances for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. The allowances for doubtful accounts are determined using a combination of factors, including the length of time the receivables are outstanding, the current business environment, and historical experience. The company also has notes receivables with certain ~~customers. As of March 31, 2018 and December 31, 2017,~~customers, which are included in "Accounts receivable, net" in the ~~company has one customer with a combined note and accounts receivable~~company's consolidated balance of approximately $24,200 and $24,600, respectively. The customer became delinquent on its repayment of the note during the fourth quarter of 2016. The company believes that it has adequately reserved for potential losses; however, it is possible that it could incur a loss in excess of the reserve.sheets.

Note H – Debt

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



	March 30, 2019		December 31, 2018
Borrowings on lines of credit	$	—	$	180,000
Commercial paper	74,836		—
Other short-term borrowings	63,850		66,257
	$	138,686	$	246,257

March 31,
2018 December 31,
2017
3.00% notes, due 2018 $ —
$ 299,857
Other short-term borrowings 38,220
56,949
$ 38,220
$ 356,806

Other short-term borrowings are primarily utilized to support working capital requirements. The weighted-average interest rate on these borrowings was ~~4.0%~~2.96% and ~~2.6%~~2.49% at March ~~31, 2018~~30, 2019 and December 31, ~~2017,~~2018, respectively.

The company has $200,000 in uncommitted lines of credit. There were no outstanding borrowings under the uncommitted lines of credit at March 30, 2019. There were $180,000 of outstanding borrowings under the uncommitted lines of credit at December 31, 2018. These borrowings were provided on a short-term basis and the maturity is agreed upon between the company and the lender. The lines had a weighted average effective interest rate of 3.49% and 3.39% at March 30, 2019 and December 31, 2018, respectively.

The company has a commercial paper program and the maximum aggregate balance of commercial paper outstanding may not exceed the borrowing capacity of $1,200,000. The company had $74,836 in outstanding borrowings under this program at March 30, 2019 and no outstanding borrowings at December 31, 2018. The program had a weighted average effective interest rate of 2.98% and 2.93% at March 30, 2019 and December 31, 2018, respectively.

ARROW ELECTRONICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands except per share data)

(Unaudited)

Long-term debt consists of the following:



	March 30, 2019		December 31, 2018
Revolving credit facility	$	55,000	$	—
Asset securitization program	1,090,000		810,000
6.00% notes, due 2020	209,191		209,147
5.125% notes, due 2021	130,582		130,546
3.50% notes, due 2022	347,485		347,288
4.50% notes, due 2023	297,751		297,622
3.25% notes, due 2024	494,327		494,091
4.00% notes, due 2025	345,911		345,762
7.50% senior debentures, due 2027	109,796		109,776
3.875% notes, due 2028	494,231		494,095
Other obligations with various interest rates and due dates	1,617		788
	$	3,575,891	$	3,239,115

March 31,
2018 December 31,
2017
Revolving credit facility $ 281,500
$ —
Asset securitization program 810,000
490,000
6.00% notes, due 2020 209,015
208,971
5.125% notes, due 2021 130,436
130,400
3.50% notes, due 2022 346,708
346,518
4.50% notes, due 2023 297,245
297,122
3.25% notes, due 2024 493,389
493,161
4.00% notes, due 2025 345,325
345,182
7.50% senior debentures, due 2027 109,714
109,694
3.875% notes, due 2028 493,694
493,563
Other obligations with various interest rates and due dates 16,024
18,434
$ 3,533,050
$ 2,933,045

The 7.50% senior debentures are not redeemable prior to their maturity. All other notes may be called at the option of the company subject to "make whole" clauses.

The estimated fair market value, using quoted market prices, is as follows:



	March 30, 2019	December 31, 2018
6.00% notes, due 2020	214,500	214,500
5.125% notes, due 2021	135,500	134,500
3.50% notes, due 2022	353,000	345,000
4.50% notes, due 2023	311,500	303,500
3.25% notes, due 2024	484,500	467,000
4.00% notes, due 2025	351,000	340,500
7.50% senior debentures, due 2027	130,000	128,000
3.875% notes, due 2028	484,000	458,500

March 31,
2018 December 31,
2017
3.00% notes, due 2018 $ —
$ 300,500
6.00% notes, due 2020 220,500
224,000
5.125% notes, due 2021 137,000
139,000
3.50% notes, due 2022 349,000
355,000
4.50% notes, due 2023 309,500
315,500
3.25% notes, due 2024 479,000
491,000
4.00% notes, due 2025 348,500
356,500
7.50% senior debentures, due 2027 134,000
138,500
3.875% notes, due 2028 485,500
501,000

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

The company has a ~~$1,800,000~~$2,000,000 revolving credit facility maturing in December ~~2021.~~2023. This facility may be used by the company for general corporate purposes including working capital in the ordinary course of business, letters of credit, repayment, prepayment or purchase of long-term indebtedness, acquisitions, and as support for the company's commercial paper program, as applicable. Interest on borrowings under the revolving credit facility is calculated using a base rate or a ~~euro currency~~Eurocurrency rate plus a spread (1.18% at March ~~31, 2018)~~30, 2019), which is based on the company's credit ratings, or an effective interest rate of ~~2.87%~~3.56% at March ~~31, 2018.~~30, 2019. The facility fee, which is based on the company's credit ratings, was .20% of the total borrowing capacity at March ~~31, 2018.~~30, 2019. The company had ~~$281,500~~$55,000 in outstanding borrowings under the revolving credit facility at March ~~31, 2018.~~30, 2019. The company had no outstanding borrowings under the revolving credit facility at December 31, ~~2017.~~

The company has a commercial paper program and the maximum aggregate balance of commercial paper outstanding may not exceed the borrowing capacity of $1,200,000. The company had no outstanding borrowings under this program at March 31, 2018 and December 31, 2017. The program had an effective interest rate of 2.17% for the first quarter of 2018.

~~ARROW ELECTRONICS, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

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

~~(Unaudited)~~

The company has an asset securitization program collateralized by accounts receivable of certain of its subsidiaries. The company may borrow up to ~~$910,000~~$1,200,000 under the asset securitization program, which matures in ~~September 2019.~~June 2021. The asset securitization program is conducted through Arrow Electronics Funding Corporation ("AFC"), a wholly-owned, bankruptcy remote subsidiary. The asset securitization program does not qualify for true sale treatment. Accordingly, the accounts receivable and related debt obligation remain on the company's consolidated balance sheets. Interest on borrowings is calculated using a base rate ~~or a commercial paper rate~~ plus a spread (.40% at March ~~31, 2018)~~30, 2019), ~~which is based on the company's credit ratings,~~ or an effective interest rate of ~~2.27%~~2.94% at March ~~31, 2018.~~30, 2019. The facility fee is .40%. of the total borrowing capacity.

ARROW ELECTRONICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands except per share data)

(Unaudited)

At March ~~31, 2018~~30, 2019 and December 31, ~~2017,~~2018, the company had ~~$810,000~~$1,090,000 and ~~$490,000,~~$810,000, respectively, in outstanding borrowings under the asset securitization program, which was included in "Long-term debt" in the company's consolidated balance sheets. Total collateralized accounts receivable of approximately ~~$2,109,500~~$2,436,800 and ~~$2,270,500,~~$2,754,400, respectively, were held by AFC and were included in "Accounts receivable, net" in the company's consolidated balance sheets. Any accounts receivable held by AFC would likely not be available to other creditors of the company in the event of bankruptcy or insolvency proceedings before repayment of any outstanding borrowings under the asset securitization program.

Both the revolving credit facility and asset securitization program include terms and conditions that limit the incurrence of additional borrowings and require that certain financial ratios be maintained at designated levels. The company was in compliance with all covenants as of March ~~31, 2018~~30, 2019 and is currently not aware of any events that would cause non-compliance with any covenants in the future.

~~The company has a $100,000 uncommitted line of credit. The company had no outstanding borrowings under the uncommitted line of credit at March 31, 2018 and December 31, 2017.~~

During ~~March~~ 2018, the company redeemed $300,000 principal amount of its 3.00% notes due March 2018.

~~During June 2017,~~In the ~~company completed the sale~~normal course of ~~$500,000 principal amount of 3.875% notes due in 2028. The net proceeds of the offering of $494,625 were used to redeem the company's 6.875% senior debenture due June 2018 and refinance a portion~~business, certain of the company’s ~~6.00% notes due April 2020, 5.125% notes due March 2021, and 7.50% notes due January 2027.~~subsidiaries have agreements to sell, without recourse, selected trade receivables to financial institutions. The company ~~recorded a loss on extinguishment~~does not retain financial or legal interests in these receivables, and, accordingly they are accounted for as sales of ~~debt of $59,545~~the related receivables and the receivables are removed from the company’s consolidated balance sheets. Financing costs related to these transactions were not material and are included in "Interest and other financing expense, net" in the ~~second quarter~~company’s consolidated statements of ~~2017.~~operations.

During September 2017, the company completed the sale of $500,000 principal amount of 3.25% notes due in 2024. The net proceeds of the offering of $493,810 were used to redeem the company's debt obligations and for general corporate purposes.

Interest and other financing expense, net, includes interest and dividend income of ~~$9,255~~$14,045 and ~~$7,926~~$9,255 for the first quarter of 2019 and 2018, ~~and 2017,~~ respectively.

ARROW ELECTRONICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands except per share data)

(Unaudited)

Note I – Financial Instruments Measured at Fair Value

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


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


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


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

~~ARROW ELECTRONICS, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

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

~~(Unaudited)~~

The following table presents assets (liabilities) measured at fair value on a recurring basis at March ~~31, 2018~~:30, 2019:


	Balance Sheet Location	Level 1		Level 2			Level 3			Total			Balance Sheet Location	Level 1		Level 2			Level 3		Total
Cash equivalents (a)	Cash and cash equivalents/ other assets	$	16,279	$	—		$	—		$	16,279		Cash and cash equivalents/ other assets	$	21,738	$	—		$	—	$	21,738
Equity investments (b)	Other assets	50,079		—			—			50,079			Other assets	42,753		—			—		42,753
Interest rate swaps	Other liabilities	—		(645		)	—			(645		)	Other liabilities	—		(557		)	—		(557		)
Foreign exchange contracts	Other current assets	—		7,641			—			7,641			Other current assets	—		12,925			—		12,925
Foreign exchange contracts	Accrued expenses	—		(3,276		)	—			(3,276		)	Accrued expenses	—		(998		)	—		(998		)
Contingent consideration	Accrued expenses	—		—			(3,214		)	(3,214		)
		$	66,358	$	3,720		$	(3,214	)	$	66,864			$	64,491	$	11,370		$	—	$	75,861



	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

Cash and cash equivalents/

Derivative Instruments

ARROW ELECTRONICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands except per share data)

(Unaudited)

~~ARROW ELECTRONICS, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

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

~~(Unaudited)~~

Foreign Exchange Contracts



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

ARROW ELECTRONICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands except per share data)

(Unaudited)

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



	Quarter Ended
	March 30, 2019			March 31, 2018
Gain (Loss) Recognized in Income
Foreign exchange contracts	$	3,489		$	(5,742	)
Interest rate swaps	(319		)	(303		)
Total	$	3,170		$	(6,045	)
Gain (Loss) Recognized in Other Comprehensive Income before reclassifications, net of tax
Foreign exchange contracts	$	5,953		$	(1,078	)

Quarter Ended
March 31,
2018
April 1,
2017
Loss Recognized in Consolidated Net Income
Foreign exchange contracts $ (5,742 ) $ (8,939 )
Interest rate swaps (303 ) (158 )
Total $ (6,045 ) $ (9,097 )
Gain (Loss) Recognized in Other Comprehensive Income before reclassifications
Foreign exchange contracts $ (1,078 ) $ 176

~~ARROW ELECTRONICS, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

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

~~(Unaudited)~~

Note J – Restructuring, Integration, and Other Charges

Restructuring initiatives are due to the company's continued efforts to lower cost and drive operational efficiency. Integration costs are primarily related to the integration of acquired businesses within the company's pre-existing business and the consolidation of certain operations. The following table presents the components of the restructuring, integration, and other charges:



	Quarter Ended
	March 30, 2019			March 31, 2018
Restructuring and integration charges - current period actions	$	3,007		$	11,432
Restructuring and integration charges - actions taken in prior periods	(61		)	1,349
Other charges	8,714			8,390
	$	11,660		$	21,171

Quarter Ended
March 31,
2018 April 1,
2017
Restructuring and integration charges - current period actions $ 11,432
$ 7,983
Restructuring and integration charges - actions taken in prior periods 1,349
2,102
Other charges 8,390
5,420
$ 21,171
$ 15,505

~~2018~~ ~~Restructuring and Integration Charges~~

~~The following table presents the components of the 2018 restructuring and integration charges and activity in the related restructuring and integration accrual for the first quarter of 2018:~~

Personnel
Costs
Facilities Costs Other Total
Restructuring and integration charges $ 4,497
$ 6,818
$ 117
$ 11,432
Payments (1,349 ) (130 ) —
(1,479 )
Foreign currency translation (9 ) 11
—
2
Balance as of March 31, 2018 $ 3,139
$ 6,699
$ 117
$ 9,955

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

~~The following table presents the activity in the restructuring and integration accrual for the first quarter of 2018 related to restructuring and integration actions taken in 2017:~~

Personnel
Costs
Facilities Costs Other Total
Balance as of December 31, 2017 $ 15,276
$ 4,874
$ 100
$ 20,250
Restructuring and integration charges 765
484
8
1,257
Payments (5,868 ) (497 ) —
(6,365 )
Foreign currency translation 246
161
5
412
Balance as of March 31, 2018 $ 10,419
$ 5,022
$ 113
$ 15,554

~~Restructuring and Integration Accruals Related to Actions Taken Prior to~~ ~~2017~~

Included in restructuring, integration, and other charges for the first quarter of 2018 are restructuring and integration charges of $92 related to restructuring and integration actions taken prior to 2017. The restructuring and integration charge (credits) includes adjustments to personnel costs of $(1,078) and facilities costs of $1,170. The restructuring and integration accruals at March 31, 2018 related to actions taken prior to 2017 of $9,033 include accruals for personnel costs of $7,173, accruals for facilities costs of $1,713, and accruals for other costs of $147.

Restructuring and Integration Accrual Summary

The restructuring and integration ~~accruals aggregate to $34,542~~accrual was $10,802 and $25,829 at March 30, 2019 and December 31, 2018, respectively. A transition adjustment of $9,968 was recorded on January 1, 2019 to reclassify restructuring and integration accruals for facilities costs by adjusting the related lease right-of-use assets recorded upon adoption of ASU No. 2016-02, Topic 842. During the three months ended, March 30, 2019, the company made $6,735 of payments related to restructuring and integration accruals. Substantially all amounts accrued at March 30, 2019 relate to the termination of ~~which~~personnel and are expected to be spent in cash ~~and are expected to be utilized as follows:~~within one year.

ARROW ELECTRONICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands except per share data)

(Unaudited)

~~The accruals for personnel costs totaling $20,731 relate to the termination of personnel that have scheduled payouts of $15,942 in 2018, $3,527 in 2019, $1,211 in 2020, and $51 in 2021.~~

The accruals for facilities totaling $13,434 relate to vacated leased properties that have scheduled payments of $5,084 in 2018, $2,990 in 2019, $2,445 in 2020, $819 in 2021, $710 in 2022, and $1,386 thereafter.

~~Other accruals of $377 are expected to be spent within one year.~~

Other Charges

Included in restructuring, integration, and other charges for the first quarter of 2019 are other expenses of $8,714. The following items were included in other charges and credits recorded to restructuring, integration, and other charges for the three months ended March 30, 2019:

acquisition-related charges for the first quarter of $1,022 related to professional and other fees directly related to recent acquisition activity as well as contingent consideration for acquisitions completed in prior years.

$5,559 in charges related to relocation and other centralization efforts to maximize operating efficiencies.

Included in restructuring, integration, and other charges for the first quarter of 2018 are other expenses of $8,390. ~~Included in these expenses are acquisition-related~~The following items represent other charges and credits recorded to restructuring, integration, and other charges for the three months ended March 31, 2018:

acquisition related charges for the first quarter of $6,154 related to contingent consideration for acquisitions completed in prior years which were conditional upon the financial performance of the acquired companies and the continued employment of the selling shareholders, as well as professional and other fees directly related to recent acquisition ~~activity.~~

Included in restructuring, integration, and other charges for the first quarter of 2017 are other expenses of $5,420. Included in these expenses are acquisition-related charges of $2,679 consisting of charges related toactivity as well as contingent consideration for acquisitions completed in prior years which were conditional upon the financial performance of the acquired companies and the continued employment of the selling shareholders, as well as professional and other fees directly related to recent acquisition activity.years.

Note K – Net Income per Share

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



	Quarter Ended
	March 30, 2019		March 31, 2018
Net income attributable to shareholders	$	140,735	$	139,094
Weighted-average shares outstanding - basic	85,400		87,955
Net effect of various dilutive stock-based compensation awards	919		1,080
Weighted-average shares outstanding - diluted	86,319		89,035
Net income per share:
Basic	$	1.65	$	1.58
Diluted (a)	$	1.63	$	1.56

Quarter Ended
March 31,
2018 April 1,
2017
Net income attributable to shareholders $ 139,094
$ 114,737
Weighted-average shares outstanding - basic 87,955
89,262
Net effect of various dilutive stock-based compensation awards 1,080
1,279
Weighted-average shares outstanding - diluted 89,035
90,541
Net income per share:

Basic $ 1.58
$ 1.29
Diluted (a) $ 1.56
$ 1.27


(a)	Stock-based compensation awards for the issuance of 903 and 415 ~~and 244~~shares for the first quarter of ~~2018~~2019 and ~~2017,~~2018, respectively, were excluded from the computation of net income per share on a diluted basis as their effect was anti-dilutive.

ARROW ELECTRONICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands except per share data)

(Unaudited)

Note L - Lease Commitments

ARROW ELECTRONICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands except per share data)

(Unaudited)

Note M – Shareholders' Equity

Accumulated Other Comprehensive Income (Loss)

Share-Repurchase Program

The following table shows the company's Board of Directors (the "Board") approved share-repurchase programs as of March ~~31, 2018:~~30, 2019:



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	$	311,395	$	88,605
December 2018	600,000		—		600,000
Total	$	1,000,000	$	311,395	$	688,605

ARROW ELECTRONICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands except per share data)

(Unaudited)

Note MN – Contingencies

Environmental Matters

~~ARROW ELECTRONICS, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

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

~~(Unaudited)~~

Environmental Matters - Huntsville

ARROW ELECTRONICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands except per share data)

(Unaudited)

Environmental Matters - Norco

~~ARROW ELECTRONICS, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

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

~~(Unaudited)~~

ARROW ELECTRONICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands except per share data)

(Unaudited)

Note NO – Segment and Geographic Information

ARROW ELECTRONICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands except per share data)

(Unaudited)



	March 30, 2019		December 31, 2018
Global components	$	11,479,107	$	11,425,579
Global ECS	4,567,305		5,632,102
Corporate	784,340		726,764
Consolidated	$	16,830,752	$	17,784,445



	March 30, 2019		December 31, 2018
Americas (d)	$	659,608	$	673,228
EMEA	119,105		110,996
Asia/Pacific	40,891		40,476
Consolidated	$	819,604	$	824,700

March 31,
2018 December 31,
2017
Americas (d) $ 694,312
$ 688,637
EMEA 112,028
108,232
Asia/Pacific 43,527
41,606
Consolidated $ 849,867
$ 838,475


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

Overview

Arrow Electronics, Inc. (the "company") is a global provider of products, services, and solutions to industrial and commercial users of electronic components and enterprise computing solutions. The company has one of the world’s broadest portfolios of product offerings available from leading electronic components and enterprise computing solutions suppliers, coupled with a range of services, solutions, and tools that help industrial and commercial customers introduce innovative products, reduce their time to market, and enhance their overall competitiveness. The company has two business segments, the global components business segment and the global enterprise computing solutions ("ECS") business segment. The company distributes electronic components to original equipment manufacturers ("OEMs") and contract manufacturers ("CMs") through its global components business segment and provides enterprise computing solutions to value-added resellers ("VARs") and managed service providers ("MSPs") through its global ECS business segment. For the first quarter of ~~2018,~~2019, approximately ~~72%~~73% of the company's sales were from the global components business segment and approximately ~~28%~~27% of the company's sales were from the global ECS business segment.

The company's financial objectives are to grow sales faster than the market, increase the markets served, grow profits faster than sales, and increase return on invested capital. To achieve its objectives, the company seeks to capture significant opportunities to grow across products, markets, and geographies. To supplement its organic growth strategy, the company continually evaluates strategic acquisitions to broaden its product and value-added service offerings, increase its market penetration, and expand its geographic reach.

Executive Summary

Consolidated sales for the first quarter of ~~2018~~2019 increased by ~~19.9%~~4.1% compared with the year-earlier period. The increase for the first quarter of ~~2018~~2019 was driven by ana increase in the global components business segment sales of ~~21.5%~~5.3% and ana increase in the global ECS business segment sales of ~~16.0%~~0.9%. Adjusted for the change in foreign currencies ~~acquisitions,~~ and dispositions consolidated sales increased ~~14.4%~~7.6% for the first quarter of ~~2018~~2019 compared with the year-earlier period.

Net income attributable to shareholders increased to ~~$139.1~~$140.7 million in the first quarter of ~~2018~~2019 compared to ~~$114.7~~$139.1 million in the year-earlier period. The following items impacted the comparability of the company's results:

restructuring, integration, and other charges of $11.7 million in 2019 and $21.2 million in 2018;

identifiable intangible asset amortization of $11.9 million in 2019 and $13.5 million in 2018;

net gain on investments of $5.3 million in 2019 and net loss on investments of $2.5 million in 2018;

loss on disposition of businesses, net, of $0.9 million in 2019 and $1.6 million in 2018;

~~restructuring, integration, and other charges of $21.2 million in 2018 and $15.5 million in 2017;~~

~~identifiable intangible asset amortization of $13.5 million in 2018 and $12.9 million in 2017;~~ and


•	Impact of U.S. tax reform of $3.5 million in 2019.

~~gain (loss) on investments, net, of $(2.5) million in 2018 and $2.0 million in 2017~~

Excluding the aforementioned items, net income attributable to shareholders for the first quarter of ~~2018 increased~~2019 decreased to ~~$167.7~~$158.5 million compared with ~~$132.1~~$167.7 million in the year-earlier period.

Certain Non-GAAP Financial Information

In addition to disclosing financial results that are determined in accordance with accounting principles generally accepted in the United States ("GAAP"), the company also discloses certain non-GAAP financial information, including:

Sales, income, or expense items as adjusted for the impact of changes in foreign currencies (referred to as "impact of changes in foreign currencies")~~, the impact of acquisitions~~ by ~~adjusting the company's operating~~re-translating prior period results ~~for businesses acquired, including the amortization expense related to acquired intangible assets, as if the acquisitions had occurred~~ at ~~the beginning of the earliest~~current period ~~presented (referred to as "impact of acquisitions"),~~foreign exchange rates and 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 "impact of dispositions");

Operating income as adjusted to exclude identifiable intangible asset amortization, restructuring, integration, and other charges, and loss on disposition of businesses, net; and

Net income attributable to shareholders as adjusted to exclude identifiable intangible asset amortization, restructuring, integration, and other charges, loss on disposition of businesses, net, ~~and~~ gain (loss) on investments, ~~net.~~net, and the impact of U.S. tax reform.

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

Sales

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

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


	Quarter Ended								Quarter Ended
	March 31, 2018			April 1, 2017			% Change		March 30, 2019			March 31, 2018			% Change

Consolidated sales, as reported	$	6,876		$	5,737		19.9	%	$	7,156		$	6,876		4.1	%
Impact of changes in foreign currencies	—			269					—			(197		)
Impact of acquisitions	—			37
Impact of dispositions	(27		)	(58		)			(11		)	(41		)
Consolidated sales, as adjusted*	$	6,848		$	5,985		14.4	%
Consolidated sales, as adjusted									$	7,145		$	6,638		7.6	%

Global components sales, as reported	$	4,930		$	4,059		21.5	%	$	5,192		$	4,930		5.3	%
Impact of changes in foreign currencies	—			175					—			(130		)
Impact of acquisitions	—			21
Impact of dispositions	—			—
Global components sales, as adjusted*	$	4,930		$	4,254		15.9	%
Global components sales, as adjusted									$	5,192		$	4,800		8.2	%

Global ECS sales, as reported	$	1,946		$	1,678		16.0	%	$	1,964		$	1,946		0.9	%
Impact of changes in foreign currencies	—			94					—			(67		)
Impact of acquisitions	—			17
Impact of dispositions	(27		)	(58		)			(11		)	(41		)
Global ECS sales, as adjusted*	$	1,918		$	1,731		10.8	%
Global ECS sales, as adjusted									$	1,953		$	1,838		6.3	%

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

* The sum of the components for ~~consolidated sales~~gross profit as reported and as adjusted may not agree to totals, as presented, due to rounding.

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

Selling, General, and Administrative Expenses and Depreciation and Amortization

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

Restructuring, Integration, and Other Charges

~~2018~~2019 Charges

~~2017~~ ~~Charges~~

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

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

Gain (Loss) on Investments, Net

Interest and Other Financing Expense, Net

~~During the first quarter of 2018, the company recorded a net loss on disposition of businesses of $1.6 million related to the sale of two non-strategic businesses.~~

~~During the first quarter of 2018 and 2017, the company recorded a loss of $2.5 million and gain of $2.0 million related to changes in fair value of certain investments, respectively.~~

Net Income Attributable to Shareholders

Following is an analysis of net income attributable to shareholders (in millions):

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

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

Liquidity and Capital Resources

Cash Flows from Operating Activities

Working capital as a percentage of sales, which the company defines as accounts receivable, net, plus inventory, net, less accounts payable, divided by annualized sales, was 19.6% in the first quarter of 2019 compared with 17.6% in the first quarter of ~~2018 compared with 17.1% in the first quarter of 2017.~~2018.

Cash Flows from Investing Activities

Cash Flows from Financing Activities

Contractual Obligations

Share-Repurchase Programs

The following table shows the company's Board approved share-repurchase programs as of March ~~31, 2018~~30, 2019 (in thousands):

Off-Balance Sheet Arrangements

Critical Accounting Policies and Estimates

Impact of Recently Issued Accounting Standards

See Note B and Note C of the Notes to Consolidated Financial Statements for a full description of recent accounting pronouncements, including the anticipated dates of adoption and the effects on the company's consolidated financial position and results of operations.

Information Relating to Forward-Looking Statements

Evaluation of Disclosure Controls and Procedures

Changes in Internal Control over Financial Reporting

PART II. OTHER INFORMATION


Item 1A.	Risk Factors

There were no material changes to the company's risk factors as discussed in Item 1A - Risk Factors in the company's Annual Report on Form 10-K for the year ended December 31, ~~2017.~~2018.


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

The following table shows the share-repurchase activity for the quarter ended March ~~31, 2018~~30, 2019:

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
January 1 through January 27, 2018 12,772
$ 82.30
12,772
$ 357,870,314
January 28 through February 24, 2018 492,587
80.11
342,457
330,639,137
February 25 through March 31, 2018 145,736
82.34
145,736
318,639,054
Total 651,095

500,965



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
January 1 through January 26, 2019	235,276	$	72.25	235,276	$	711,613
January 27 through February 23, 2019	339,126	80.84		170,749	697,966
February 24 through March 30, 2019	118,308	80.39		116,373	688,605
Total	692,710			522,398


(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 March ~~31, 2018~~30, 2019 is ~~150,130~~170,312 shares, which relate to shares withheld from employees for stock-based awards, as permitted by the Omnibus Incentive Plan, in order to satisfy the required tax withholding obligations. The purchase of these shares were not made pursuant to any publicly announced repurchase plan.


Item 6.	Exhibits



Exhibit Number		Exhibit

31(i)		Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31(ii)		Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32(i)		Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32(ii)		Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

10(a)		Form of Performance Stock Unit Award Agreement under the Arrow Electronics, ~~Savings~~Inc. 2004 Omnibus Incentive Plan as(as amended ~~and restated effective January 1, 2018.~~through February 17, 2015).

~~101.INS~~ 10(b)		~~XBRL Instance Document.~~ Form of Restricted Stock Unit Award Agreement under the Arrow Electronics, Inc. 2004 Omnibus Incentive Plan (as amended through February 17, 2015).

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.

SIGNATURE

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



		ARROW ELECTRONICS, INC.

Date:	May ~~3, 2018~~2, 2019	By:	/s/ Chris D. Stansbury
			Chris D. Stansbury
			Senior Vice President and Chief Financial Officer



New York	11-1806155
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification Number)

9201 East Dry Creek Road, Centennial, Colorado	80112
(Address of principal executive offices)	(Zip Code)



Large accelerated filer x	Accelerated filer o
Non-accelerated filer o ~~(do not check if a smaller reporting company)~~	Smaller reporting company o
	Emerging growth company o



	March 30, 2019
Operating Leases
Right-of-use asset	$	349,077

Lease liability - current	68,603
Lease liability - non-current	302,283
Total operating lease liabilities	$	370,886



	March 30, 2019
2019	$	75,827
2020	76,035
2021	59,166
2022	46,851
2023	37,177
Thereafter	160,022
Total lease payments	455,078
Less imputed interest	(84,192		)
Total	$	370,886



	March 30, 2019
Supplemental Cash Flow Information
Cash paid for amounts included in the measurement of operating lease liabilities:	$	37,513
Right-of-use assets obtained in exchange for operating lease obligations:	35,573

Operating Lease Term and Discount Rate
Weighted average remaining lease term in years	8
Weighted average discount rate	5.2		%


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


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




Part I.	Financial Information

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

	Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	2425

	Item 3.	Quantitative and Qualitative Disclosures about Market Risk	33

	Item 4.	Controls and Procedures	33

Part II.	Other Information

	Item 1A.	Risk Factors	34

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	34

	Item 6.	Exhibits	35

Signature			36



	Quarter Ended April 1, 2017
	As Previously Reported		Adjustments**			Adjusted for New Standards
Sales	$	5,759,552	$	(22,772	)	$	5,736,780
Cost of sales	4,999,665		(24,082		)	4,975,583
Gross profit	759,887		1,310			761,197
Operating expenses:
Selling, general, and administrative expenses	515,519		7			515,526
Depreciation and amortization	37,141		—			37,141
Restructuring, integration, and other charges	15,505		—			15,505
	568,165		7			568,172
Operating income	191,722		1,303			193,025
Equity in earnings of affiliated companies	925		—			925
Gain (loss) on investments, net	—		1,982			1,982
Post-retirement expense	—		1,800			1,800
Interest and other financing expense, net	38,073		176			38,249
Income before income taxes	154,574		1,309			155,883
Provision for income taxes	39,224		340			39,564
Consolidated net income	115,350		969			116,319
Noncontrolling interests	1,582		—			1,582
Net income attributable to shareholders	$	113,768	$	969		$	114,737
Net income per share:
Basic*	$	1.27	$	0.01		$	1.29
Diluted*	$	1.26	$	0.01		$	1.27



	First Quarter				Second Quarter				Third Quarter				Fourth Quarter				Year to Date
	As Previously Reported		Adjusted for New Standards		As Previously Reported		Adjusted for New Standards		As Previously Reported		Adjusted for New Standards		As Previously Reported		Adjusted for New Standards		As Previously Reported		Adjusted for New Standards
2017
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	$	26,812,508	$	26,554,563
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		23,455,169		23,197,595
Operating income	191,722		193,025		229,822		230,446		235,992		235,441		270,914		286,824		928,450		945,736
Net income attributable to shareholders	$	113,768	$	114,737	$	99,679	$	99,722	$	134,630	$	134,064	$	53,885	$	53,653	$	401,962	$	402,176



Accounts receivable, net	$	14,162
Inventories	1,512
Property, plant, and equipment	8,114
Other assets	24,021
Identifiable intangible assets	71,710
Goodwill	202,267
Accounts payable	(517		)
Accrued expenses	(6,909		)
Other liabilities	(1,597		)
Cash consideration paid, net of cash acquired	$	312,763




	As Reported		Pro Forma
Sales	$	5,736,780	$	5,774,079
Net income attributable to shareholders	114,737		115,222
Net income per share:
Basic	$	1.29	$	1.29
Diluted	$	1.27	$	1.27



	March 31, 2018		December 31, 2017
3.00% notes, due 2018	$	—	$	299,857
Other short-term borrowings	38,220		56,949
	$	38,220	$	356,806


(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.



	Personnel Costs			Facilities Costs			Other		Total
Restructuring and integration charges	$	4,497		$	6,818		$	117	$	11,432
Payments	(1,349		)	(130		)	—		(1,479		)
Foreign currency translation	(9		)	11			—		2
Balance as of March 31, 2018	$	3,139		$	6,699		$	117	$	9,955


(a)	Includes intra-entity foreign currency transactions that are of a long-term investment nature of ~~$11,924~~$9,859 and ~~$7,290~~$(11,924) for the first quarter of ~~2018~~2019 and ~~2017,~~2018, respectively.


(b)	Amounts relate to unrealized gains and losses on investments and stranded tax effects reclassified from ~~accumulated~~"Accumulated other comprehensive ~~income~~income" to ~~retained earnings~~"Retained earnings" in accordance with ASU No. 2018-02 and ASU No. ~~2016-01 (Note B).~~2016-01.


(b)	Includes sales related to the United States of ~~$2,649,668~~$2,782,035 and ~~$2,342,128~~$2,649,668 for the first quarter of ~~2018~~2019 and ~~2017,~~2018, respectively.


(c)	Includes restructuring, integration, and other charges of ~~$21,171~~$11,660 and ~~$15,505~~$21,171 for the first quarter of 2019 and 2018, respectively. Also included in the first quarter of 2019 and ~~2017, respectively, as well as~~2018 was a net loss on the disposition of businesses of $866 and $1,562, ~~for the first quarter of 2018.~~respectively.


(d)	Includes net property, plant, and equipment related to the United States of ~~$689,953~~$656,736 and ~~$683,988~~$670,201 at March ~~31, 2018~~30, 2019 and December 31, ~~2017,~~2018, respectively.

Maturity Date

Notional Amount

Interest rate due from counterparty

Interest rate due to counterparty

April 2020

6 mo. USD LIBOR + 3.896%