Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company.  See the definitions of "large accelerated filer," "accelerated filer," and "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act:

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

There were 91,265,98788,842,730 shares of Common Stock outstanding as of July 29, 2016.May 1, 2017.

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, 2015,2016, as filed in the company's Annual Report on Form 10-K.

The company operates on a quarterly calendar that closes on the Saturday closest to the end of the calendar quarter, except for the third quarter of 2015, which closed on September 26, 2015.quarter.

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

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.

During the first six months of 2016, the company completed twothree acquisitions for $44,591,$63,869, net of cash acquired. The impact of these acquisitions was not material to the company's consolidated financial position or results of operations. The pro forma impact of the 2016 acquisitions on the consolidated results of operations of the company for the first sixthree months of 2016, and 2015 as though the acquisitions occurred on January 1, 2016, was also not material.

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.

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

The equity in earnings of affiliated companies consists of the following:

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 July 2, 2016,April 1, 2017, the company's pro-rata share of this debt was approximately $1,250.$740. The company believes that there is sufficient equity in each of the joint ventures to meet their obligations. 

Accounts receivable, net, consists of the following:

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 April 1, 2017,  the company has one customer with a combined note and accounts receivable balance of approximately $19,500.  The customer became delinquent on its repayment of the note during the fourth quarter of 2016. The company believes that it will recover all amounts due; however, it is possible that it could incur a loss.

Other short-term borrowings of $111,259 and $44,024, respectively, wereare primarily utilized to support the working capital requirements. The weighted-average interest rate on these borrowings was .94%2.6% and 3.30%2.4% at July 2, 2016April 1, 2017 and December 31, 2015,2016, respectively.

Long-term debt consists of the following:

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

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

The company has an asset securitization program collateralized by accounts receivable of certain of its subsidiaries. The company may borrow up to $900,000$910,000 under the asset securitization program, which matures in March 2017. The outstanding borrowings have been classified as long-term debt as of July 2, 2016 based on the company’s intent and ability to refinance on a long-term basis by borrowing funds under the revolving credit facility or through refinancing the existing asset securitization program on a long-term basis.September 2019. The asset securitization program is conducted through Arrow Electronics Funding Corporation ("AFC"), a wholly-

At July 2, 2016April 1, 2017 and December 31, 2015,2016, the company had $335,000$480,000 and $75,000,$460,000, 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 $1,729,000$1,681,144 and $1,871,831,$2,045,464, 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 July 2, 2016April 1, 2017 and is currently not aware of any events that would cause non-compliance with any covenants in the future.  

The company has a $100,000 uncommitted line of credit. There were no outstanding borrowings under the uncommitted line of credit at July 2, 2016April 1, 2017 and December 31, 2015.2016.

Interest and other financing expense, net, includes interest and dividend income of $1,376$7,926 and $3,390 for$4,667for the second quarterfirst quarters of 2017 and first six months of 2016, respectively. Interest and other financing expense, net, includes interest and dividend income of $1,489 and $2,462 for the second quarter and first six months of 2015, respectively.

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:

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

During the first six monthsquarter of 20162017 and 2015,2016, there were no transfers of assets (liabilities) measured at fair value between the three levels of the fair value hierarchy.

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

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

The fair value of these investments are included in "Other assets" in the company's consolidated balance sheets, and the related unrealized holding gains or losses on these investments are included in "Accumulated other comprehensive loss" in the shareholders' equity section in the company's consolidated balance sheets.

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

The company occasionally enters into interest rate swap transactions that convert certain fixed-rate debt to variable-rate debt or variable-rate debt to fixed-rate debt in order to manage its targeted mix of fixed- and floating-rate debt. The company uses the hypothetical derivative method to assess the effectiveness of its interest rate swaps designated as fair value hedges on a quarterly basis. The effective portion of

In April 2014, the company entered into anThe terms of our outstanding interest rate swap with a notional amount of $50,000. The swap modifies the company's interest rate exposure by effectively converting a portion of the fixed 6.00% notes to a floating rate, based on the six-month U.S. dollar LIBOR plus a spread (an effective interest rate of 4.88%contracts at July 2, 2016), through its maturity. The swap is classifiedApril 1, 2017 are as a fair value hedge and had a fair value of $1,758 at July 2, 2016.follows:

The company’s foreign currency exposure relates primarily to international transactions where the currency collected from customers can be different from the currency used to purchase the product. The company’s transactions in its foreign operations are denominated primarily in the following currencies: Euro, Chinese Renminbi, British pound, Taiwan Dollar, and Australian Dollar. The company enters into foreign exchange forward, option, or swap contracts (collectively, the "foreign exchange contracts") to mitigate the impact of changes in foreign currency exchange rates.  These contracts are executed to facilitate the hedging of foreign currency exposures resulting from inventory purchases and sales and generally have terms of no more than six months. Gains or losses on these contracts are deferred and recognized when the underlying future purchase or sale is recognized or when the corresponding asset or liability is revalued. The company does not enter into foreign exchange contracts for trading purposes. The risk of loss on a foreign exchange contract is the risk of nonperformance by the counterparties, which the company minimizes by limiting its counterparties to major financial institutions.  The fair value of the foreign exchange contracts are estimated using market quotes.  The notional amount of the foreign exchange contracts at July 2, 2016 and December 31, 2015 was $367,332 and $382,025, respectively.

market quotes. The fair valuesnotional amount of derivative instrumentsthe foreign exchange contracts at April 1, 2017 and December 31, 2016 was $601,068 and $460,233, respectively.

Gains and losses related to non-designated foreign currency exchange contracts are recorded in "Cost of sales" in the company's consolidated balance sheetsstatements of operations. Gains and losses related to designated foreign currency exchange contracts are as follows:recorded in "Selling, general, and administrative expenses" and "Interest and other financing expense, net" in the company's consolidated statements of operations and were not material for the first quarters of 2017 and 2016.

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

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

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

In summary, theThe restructuring and integration accruals aggregate $16,132to $20,772 at July 2, 2016,April 1, 2017, all of which are expected to be spent in cash, and are expected to be utilized as follows:

Included in restructuring, integration, and other charges for the secondfirst quarter and first six months of 20162017 are fraud loss, acquisition-related, and other expenses of $6,616 and $22,830, respectively. The company determined that it was the target$5,420. Included in these expenses are acquisition-related expenses of criminal fraud by persons impersonating a company executive, which resulted in unauthorized transfers$2,679 consisting of cash from a company account in Europe to outside bank accounts in Asia in January 2016.  An independent investigation and legal actions by the company and law enforcement are ongoing.  To date, the information gathered by the company indicates that this is an isolated event not associated with a security breach or loss of data.  Additionally, no officers or employees of the company were involved in the fraud. During the first six months of 2016, the Company recorded a fraud loss, net of insurance recoveries, of $3,942. During the second quarter of 2016, the company recorded a credit of $9,253, which included insurance recoveries and incremental expenses related to the fraud loss. Included within “Other current assets” is approximately $29,000 of cash frozen in outside bank accounts that the company believes is probable of recovery. The charges for the second quarter and first six months of 2016 of $3,334 and $4,956, respectively, related to contingent consideration for acquisitions completed in prior years which were conditional upon the financial performance of the acquired companies and the continued employment of the selling shareholders, as well as professional and other fees directly related to recent acquisition activity. During 2016, the company adopted an amendment to its Wyle defined benefit plan and incurred a settlement expense of $12,211 during the second quarter of 2016.

Included in restructuring, integration, and other charges for the secondfirst quarter and first six months of 20152016 are other expenses of $16,214. Included in these expenses is a fraud loss of $13,195 and acquisition-related expenses of $7,004 and $13,480, respectively, consisting of charges$1,624 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.

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