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, a smaller reporting company, or an emerging growth company.  See the definitions of "large accelerated filer," "accelerated filer," "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 87,172,14484,721,190 shares of Common Stock outstanding as of October 30, 2018.April 29, 2019.

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.

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

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 third quarter and nine months ended September 29, 2018.did not have a material impact on previously reported amounts.

These ASU's provide supplemental adoption guidance and clarification to ASU No. 2016-02, and must be adopted concurrently with the adoption of ASU No. 2016-02, cumulatively referred to as “Topic 842”.

On January 1, 2019, the company adopted Topic 842 is effective forapplying the company in the first quarter of 2019, with early adoption permitted, and is to be applied using either a modified retrospective approach, or an optional transition method, which allows an entity to apply the new standard at the adoption date with a cumulative-effectcumulative effect adjustment to the opening balance of retained earnings in the period of adoption.

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 is recognizedThe company determines if a contract contains a lease at inception based on whether it conveys the point at whichright to control the use of an identified asset. Substantially all of the underlying goods or servicescompany'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, whichhas 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 are governed by master agreements,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 contracts with a customer. All revenue is generated from contracts with customers.consolidated statements of cash flows.

In determiningOperating lease right-of-use assets and lease liabilities are recognized based on the transaction price,net present value of future minimum lease payments over the lease term starting on the commencement date. The company evaluates whether the pricegenerally is subject to refund or adjustmentnot able to determine the net considerationrate 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 whichextend or terminate a lease if it is reasonably certain that the company expectswill exercise such options. The company has elected the practical expedient to receive. The amountnot 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.

On January 8,In 2018, the company acquired eInfochips for a purchase price of $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.

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:

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 and is not tax deductible.

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 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:

The equity in earnings (losses) 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 September 29,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 $4,900. 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. 

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, which are included in "Accounts receivable, net" in the company's consolidated balance sheets.  One such customer, with a combined note and accounts receivable balance of approximately $24,252 and $24,600 as of September 29, 2018 and December 31, 2017, respectively, 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.

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, 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 currencyEurocurrency rate plus a spread (1.18% at September 29, 2018)March 30, 2019), which is based on the company's credit ratings, or an effective interest rate of 2.17%3.56% at September 29, 2018.March 30, 2019. The facility fee, which is based on the company's credit ratings, was .20% of the total borrowing capacity at September 29, 2018.March 30, 2019. The company had $92,500$55,000 in outstanding borrowings under the revolving credit facility at September 29, 2018.March 30, 2019. The company had no outstanding borrowings under the revolving credit facility at December 31, 2017.

The company has an asset securitization program collateralized by accounts receivable of certain of its subsidiaries. In June 2018,The company may borrow up to $1,200,000 under the company amended its asset securitization program, and, among other things, increased its borrowing capacity from $910,000 to $1,200,000 and extended its term to mature towhich matures in 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 plus a spread (.40% at September 29, 2018)March 30, 2019), or an effective interest rate of 2.62%2.94% at September 29, 2018.March 30, 2019. The facility fee is .40% of the total borrowing capacity.

At September 29, 2018March 30, 2019 and December 31, 2017,2018, the company had $830,000$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 $2,574,100$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 September 29, 2018March 30, 2019 and is currently not aware of any events that would cause non-compliance with any covenants in the future.  

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 salenormal 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

Interest and other financing expense, net, includes interest and dividend income of $12,986$14,045 and $33,543$9,255 for the thirdfirst quarter of 2019 and first nine months of 2018, respectively. Interest and other financing expense, net, includes interest and dividend income of $7,758 and $22,768 for the third quarter and first nine months of 2017, 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:

The following table presents assets (liabilities) measured at fair value on a recurring basis at December 31, 2017:2018:

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

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 the change in the fair value of interest rate swaps designated as fair value hedges is recorded as a change to the carrying value of the related hedged debt, and the effective portion of the change in fair value of interest rate swaps designated as cash flow hedges is recorded in the shareholders' equity section in the company's consolidated balance sheets in "Accumulated other comprehensive income." The ineffective portion of the interest rate swaps, if any, is recorded in "Interest and other financing expense, net" in the company's consolidated statements of operations. As of September 29, 2018March 30, 2019 and December 31, 2017,2018, all outstanding interest rate swaps were designated as fair value hedges.

The terms of our outstanding interest rate swap contracts at September 29, 2018March 30, 2019 are as 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, British Pound, Indian Rupee, Chinese Renminbi, British Pound, Canadian Dollar, Israeli Shekel, and Australian Dollar.Chinese Renminbi. 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.rates related to these transactions.  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 September 29, 2018March 30, 2019 and December 31, 20172018 was $469,426$867,361 and $504,084,$607,747, respectively.

Gains and losses related to non-designated foreign currency exchange contracts are recorded in "Cost of sales" in the company's consolidated statements of operations. Gains and losses related to designated foreign currency exchange contracts designated as cash flow hedges are recorded in "Cost of sales," "Selling, general, and administrative expenses," and "Interest and other financing expense, net" based upon the nature of the underlying hedged transaction, in the company's consolidated statements of operations and were not material for the thirdfirst quarter of 2019 and 2018.

During the first nine monthsquarter of 20182019, the company entered into a series of foreign exchange contracts to sell Euro and 2017.buy United States Dollars, with various maturity dates as noted in the table below.