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Actionable news in ARW: ARROW ELECTRONICS Inc,

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

(a) The total carrying value of goodwill for all periods 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 ECS business segment.
Weighted-Average LifeGross Carrying AmountAccumulated AmortizationNet
Non-amortizable trade namesindefinite$101,000
$
$101,000
Customer relationships10 years476,656
(274,847)201,809
Developed technology5 years6,340
(2,973)3,367
Amortizable trade name5 years2,409
(1,200)1,209
$586,405
$(279,020)$307,385
Weighted-Average LifeGross Carrying AmountAccumulated AmortizationNet
Non-amortizable trade namesindefinite$101,000
$
$101,000
Customer relationships10 years476,176
(247,206)228,970
Developed technology5 years9,140
(4,435)4,705
Other intangible assets(b)6,721
(4,514)2,207
$593,037
$(256,155)$336,882
(b)Consists of non-competition agreements, sales backlog, and an amortizable trade name with useful lives ranging from two to five years.
September 30,
2017
December 31,
2016
Marubun/Arrow$68,179
$65,237
Other18,447
23,164
$86,626
$88,401
Quarter EndedNine Months Ended
September 30,
2017
October 1,
2016
September 30,
2017
October 1,
2016
Marubun/Arrow$1,886
$1,549
$5,168
$5,059
Other(670)(238)(2,303)335
$1,216
$1,311
$2,865
$5,394
September 30,
2017
December 31,
2016
Accounts receivable$7,124,677
$6,798,943
Allowances for doubtful accounts(54,048)(52,256)
Accounts receivable, net$7,070,629
$6,746,687
September 30,
2017
December 31,
2016
3.00% notes, due 2018$299,643
$
Other short-term borrowings80,565
93,827
$380,208
$93,827
September 30,
2017
December 31,
2016
Revolving credit facility $96,200
$
Asset securitization program255,000
460,000
6.875% senior debentures, due 2018
199,348
3.00% notes, due 2018
299,013
6.00% notes, due 2020208,928
299,183
5.125% notes, due 2021130,364
248,843
3.50% notes, due 2022346,330
345,776
4.50% notes, due 2023297,001
296,646
3.25% notes, due 2024492,846

4.00% notes, due 2025345,040
344,625
7.50% senior debentures, due 2027109,673
198,514
3.875% notes, due 2028493,449

Interest rate swaps designated as fair value hedges180
152
Other obligations with various interest rates and due dates27,949
4,234
$2,802,960
$2,696,334
September 30,
2017
December 31,
2016
6.875% senior debentures, due 2018$
$212,500
3.00% notes, due 2018301,500
303,500
6.00% notes, due 2020226,500
325,500
5.125% notes, due 2021140,500
265,500
3.50% notes, due 2022358,000
349,500
4.50% notes, due 2023318,500
305,500
3.25% notes, due 2024494,000

4.00% notes, due 2025357,500
345,000
7.50% senior debentures, due 2027136,500
238,000
3.875% notes, due 2028499,000

Level 1Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.
Level 2Quoted 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 3Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable.
Balance Sheet
Location
Level 1Level 2Level 3Total
Cash equivalentsOther assets$854
$
$
$854
Available-for-sale securitiesOther assets45,112


45,112
Interest rate swapsOther assets
180

180
Foreign exchange contractsOther current assets
6,809

6,809
Foreign exchange contractsAccrued expenses
(6,733)
(6,733)
Contingent considerationAccrued expenses

(3,100)(3,100)
$45,966
$256
$(3,100)$43,122
Balance Sheet
Location
Level 1Level 2Level 3Total
Cash equivalentsOther assets$2,660
$
$
$2,660
Available-for-sale securitiesOther assets37,915


37,915
Interest rate swapsOther assets
152

152
Foreign exchange contractsOther current assets
4,685

4,685
Foreign exchange contractsAccrued expenses
(3,444)
(3,444)
Contingent considerationAccrued expenses
/ Other liabilities


(4,027)(4,027)
$40,575
$1,393
$(4,027)$37,941
September 30, 2017December 31, 2016
MarubunMutual FundsMarubunMutual Funds
Cost basis$10,016
$17,743
$10,016
$18,097
Unrealized holding gain7,763
9,590
3,806
5,996
Fair value$17,779
$27,333
$13,822
$24,093
Quarter EndedNine Months Ended
September 30,
2017

October 1,
2016
September 30,
2017
October 1,
2016
Loss Recognized in Consolidated Net Income
Foreign exchange contracts$(4,283)$(2,394)$(15,445)$(1,873)
Interest rate swaps(210)(153)(532)(452)
Total$(4,493)$(2,547)$(15,977)$(2,325)
Loss Recognized in Other Comprehensive Income before reclassifications
Foreign exchange contracts$(374)$(55)$(1,241)$(588)
Interest rate swaps$(3,619)$
$(4,672)$
Quarter EndedNine Months Ended
September 30,
2017
October 1,
2016
September 30,
2017
October 1,
2016
Restructuring and integration charges - current period actions$12,050
$12,028
$34,296
$22,131
Restructuring and integration charges (credits) - actions taken in prior periods250
(487)6,348
3,474
Other charges3,596
12,726
15,173
35,556
$15,896
$24,267
$55,817
$61,161
PersonnelCostsFacilities CostsOtherTotal
Restructuring and integration charges$29,030
$4,222
$1,044
$34,296
Payments(14,203)(2,575)(834)(17,612)
Foreign currency translation868
83
20
971
Balance as of September 30, 2017$15,695
$1,730
$230
$17,655
Personnel CostsFacilities CostsOtherTotal
Balance as of December 31, 2016$11,694
$3,793
$316
$15,803
Restructuring and integration charges (credits)6,422
(472)(18)5,932
Payments(11,347)(2,688)(119)(14,154)
Foreign currency translation436
187
31
654
Balance as of September 30, 2017$7,205
$820
$210
$8,235
The accruals for personnel costs totaling $25,460 relate to the termination of personnel that have scheduled payouts of $20,918 in 2017, $3,917 in 2018, $601 in 2019, and $24 in 2020.
The accruals for facilities totaling $3,420 relate to vacated leased properties that have scheduled payments of $2,297 in 2017, $507 in 2018, $112 in 2019, $108 in 2020, $104 in 2021, and $292 thereafter.
Quarter EndedNine Months Ended
September 30,
2017
October 1,
2016
September 30,
2017
October 1,
2016
Net income attributable to shareholders$134,630
$117,727
$348,077
$358,232
Weighted-average shares outstanding - basic88,453
90,937
88,870
91,412
Net effect of various dilutive stock-based compensation awards1,087
1,001
1,066
1,075
Weighted-average shares outstanding - diluted89,540
91,938
89,936
92,487
Net income per share:

Basic$1.52
$1.29
$3.92
$3.92
Diluted (a)$1.50
$1.28
$3.87
$3.87
(a)Stock-based compensation awards for the issuance of 396 and 363 shares for the third quarter and first nine months of 2017 and 824 and 821 shares for the third quarter and first nine months2016, respectively, were excluded from the computation of net income per share on a diluted basis as their effect was anti-dilutive.
Quarter EndedNine Months Ended
September 30, 2017October 1, 2016September 30, 2017October 1, 2016
Foreign Currency Translation Adjustment and Other:
Other comprehensive income (loss) before reclassifications (a)$57,988
$15,822
$227,928
$35,610
Amounts reclassified into income(4,241)46
(6,888)1,137
Unrealized Gain (Loss) on Investment Securities, Net:
Other comprehensive income (loss) before reclassifications1,357
1,273
4,639
(2,408)
Amounts reclassified into income



Unrealized Gain (Loss) on Interest Rate Swaps Designated as Cash Flow Hedges, Net:
Other comprehensive loss before reclassifications(2,223)
(2,870)
Amounts reclassified into income130
94
327
278
Employee Benefit Plan Items, Net:
Other comprehensive income (loss) before reclassifications(51)25
(94)97
Amounts reclassified into income (loss)543
789
1,497
5,481
Net change in Accumulated other comprehensive income (loss)$53,503
$18,049
$224,539
$40,195
(a) Includes intra-entity foreign currency transactions that are of a long-term investment nature of $(11,193) and $(50,512) for the third quarter and first nine months of 2017 and $(9,273) and $(38,092) for the third quarter and first nine months of 2016, respectively.
Month of Board ApprovalDollar Value Approved for RepurchaseDollar Value of Shares RepurchasedApproximateDollar Value ofShares that MayYet bePurchasedUnder theProgram
September 2015$400,000
$400,000
$
December 2016400,000
16,081
383,919
Total$800,000
$416,081
$383,919
Quarter EndedNine Months Ended
September 30,
2017
October 1,
2016
September 30,
2017
October 1,
2016
Sales:
Global components$4,864,361
$3,904,447
$13,385,514
$11,413,348
Global ECS2,089,379
2,031,645
5,793,124
5,969,022
Consolidated$6,953,740
$5,936,092
$19,178,638
$17,382,370
Operating income (loss):

Global components$212,993
$175,507
$583,690
$524,662
Global ECS94,797
96,181
282,379
283,792
Corporate (a)(71,798)(73,004)(208,533)(204,814)
Consolidated$235,992
$198,684
$657,536
$603,640
(a)Includes restructuring, integration, and other charges of $15,896 and $55,817 for the third quarter and first nine months of 2017 and $24,267 and $61,161 for the third quarter and first nine months of 2016, respectively.
September 30,
2017
December 31,
2016
Global components$9,674,716
$8,360,926
Global ECS4,590,887
5,053,172
Corporate791,363
792,268
Consolidated$15,056,966
$14,206,366
Quarter EndedNine Months Ended
September 30,
2017
October 1,
2016
September 30,
2017
October 1,
2016
Americas (b)$3,217,537
$2,897,810
$8,829,813
$8,327,845
EMEA (c)1,886,440
1,548,067
5,406,330
4,990,973
Asia/Pacific1,849,763
1,490,215
4,942,495
4,063,552
Consolidated$6,953,740
$5,936,092
$19,178,638
$17,382,370
(b)Includes sales related to the United States of $2,959,857 and $8,060,819 for the third quarter and first nine months of 2017 and $2,677,954 and $7,665,313 for the third quarter and first nine months of 2016, respectively.
September 30,
2017
December 31,
2016
Americas (d)$671,668
$631,386
EMEA104,028
90,834
Asia/Pacific39,683
34,079
Consolidated$815,379
$756,299
(d)Includes net property, plant, and equipment related to the United States of $666,511 and $626,964 at September 30, 2017 and December 31, 2016, respectively.
Sales, income, or expense items as adjusted for the impact of changes in foreign currencies (referred to as "impact of changes in foreign currencies") and the impact of acquisitions by adjusting the company's operating 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 period presented (referred to as "impact of acquisitions");
Operating income as adjusted to exclude identifiable intangible asset amortization and restructuring, integration, and other charges; and
Quarter EndedNine Months Ended
September 30,
2017
October 1,
2016
% ChangeSeptember 30,
2017
October 1,
2016
% Change
Consolidated sales, as reported$6,954
$5,936
17.1%$19,179
$17,382
10.3 %
Impact of changes in foreign currencies
83

(47)
Impact of acquisitions
1

48
Consolidated sales, as adjusted$6,954
$6,020
15.5%$19,179
$17,383
10.3 %
Global components sales, as reported$4,864
$3,904
24.6%$13,386
$11,413
17.3 %
Impact of changes in foreign currencies
56

(13)
Impact of acquisitions
1

10
Global components sales, as adjusted$4,864
$3,961
22.8%$13,386
$11,410
17.3 %
Global ECS sales, as reported$2,089
$2,032
2.8%$5,793
$5,969
(2.9)%
Impact of changes in foreign currencies
27

(34)
Impact of acquisitions


38
Global ECS sales, as adjusted$2,089
$2,059
1.5%$5,793
$5,973
(3.0)%
Quarter EndedNine Months Ended
September 30,
2017
October 1,
2016
% ChangeSeptember 30,
2017
October 1,
2016
% Change
Consolidated gross profit, as reported$843
$773
9.1%$2,427
$2,321
4.6%
Impact of changes in foreign currencies
12

(9)
Impact of acquisitions
1

13

Consolidated gross profit, as adjusted$843
$786
7.3%$2,427
$2,325
4.4%
Consolidated gross profit as a percentage of sales, as reported12.1%13.0%(90) bps
12.7%13.4%(70) bps
Consolidated gross profit as a percentage of sales, as adjusted12.1%13.1%(100) bps
12.7%13.4%(70) bps
Quarter EndedNine Months Ended
September 30,
2017

October 1,
2016
% ChangeSeptember 30,
2017
October 1,
2016
% Change
Selling, general, and administrative expenses, as reported$553
$510
8.4 %$1,601
$1,535
4.3 %
Depreciation and amortization, as reported39
40
(4.0)%113
122
(6.9)%
Operating expenses, as reported*591

550
7.5 %1,714
1,656
3.5 %
Impact of changes in foreign currencies
8

(7)
Impact of acquisitions
1

9

Operating expenses, as adjusted*$591
$559
5.8 %$1,714
$1,658
3.4 %
Operating expenses as a percentage of sales, as reported8.5%9.3%(80) bps8.9%9.5%(60) bps
Operating expenses as a percentage of sales, as adjusted8.5%9.3%(80) bps
8.9%9.5%(60) bps
Quarter EndedNine Months Ended
September 30,
2017

October 1,
2016
% ChangeSeptember 30,
2017
October 1,
2016
%
Change
Consolidated operating income, as reported$236
$199
18.8%$658
$604
8.9%
Identifiable intangible asset amortization13
14
38
41
Restructuring, integration, and other charges16
24
56
61
Consolidated operating income, as adjusted*$265
$237
11.7%$751
$706
6.4%
Consolidated operating income as a percentage of sales, as reported3.4%3.3%10 bps
3.4%3.5%(10) bps
Consolidated operating income, as adjusted, as a percentage of sales, as reported3.8%4.0%(20) bps
3.9%4.1%(20) bps
Quarter EndedNine Months Ended
September 30,
2017
October 1,
2016
September 30,
2017
October 1,
2016
Net income attributable to shareholders, as reported$135
$118
$348
$358
Identifiable intangible asset amortization*12
13
37
40
Restructuring, integration, and other charges16
24
56
61
Loss on extinguishment of debt1

60

Loss on investment15

14

Tax effect of adjustments above(16)(12)(60)(31)
Net income attributable to shareholders, as adjusted$163
$143
$455
$428
During the second quarter of 2017, the company redeemed $200.0 million of the company's 6.875% senior debenture due June 2018 and refinanced $90.6 million of the 6.00% notes due April 2020, $119.1 million of the 5.125% notes due March 2021, and $89.6 million of the 7.50% notes due January 2027; and
Month of Board ApprovalDollar Value Approved for RepurchaseDollar Value of Shares RepurchasedApproximateDollar Value ofShares that MayYet bePurchasedUnder theProgram
September 2015$400,000
$400,000
$
December 2016400,000
16,081
383,919
Total$800,000
$416,081
$383,919
MonthTotalNumber ofSharesPurchased (a)AveragePrice Paidper ShareTotal Number ofSharesPurchased asPart of PubliclyAnnouncedProgram (b)ApproximateDollar Value ofShares that MayYet bePurchasedUnder thePrograms
July 2 through July 29, 2017
$

$408,913,216
July 30 through August 26, 2017173,548
75.84
171,500
395,919,107
August 27 through September 30, 2017157,864
77.92
154,090
383,919,118
Total331,412

325,590

(b)The difference between the "total number of shares purchased" and the "total number of shares purchased as part of publicly announced program" for the quarter ended September 30, 2017 is 5,822 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.

In connection with the Quarterly Report on Form 10-Q of Arrow Electronics, Inc. (the "company") for the quarter ended September 30, 2017 (the "Report"), I, Michael J. Long, Chairman, President, and Chief Executive Officer of the company, certify, pursuant to the requirements of Section 906, that, to the best of my knowledge:

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the company and will be retained by the company and furnished to the Securities and Exchange Commission or its staff upon request.


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