01131db88ea963cd5ab67a4acbf043f9b35260d64cc7ac84d89b59c87ec62779

fc8303bf8134770a3e1acd144782bb9c0e022021505392f6dc57f5d184f5ef19

1c51b9127be2c8d03d097a767f64e653072631d7899c600a4c4430f6a87f4b12

Sales (USD, thousands)

Cost of Sales (USD, thousands)

Gross Profit (USD, thousands)

Selling, General, and Administrative Expenses (USD, thousands)

Depreciation and Amortization (USD, thousands)

Restructuring, Integration, and Other Expenses (USD, thousands)

Operating Expenses (USD, thousands)

Operating Income (USD, thousands)

Equity in Earnings (Losses) of Affiliated Companies (USD, thousands)

(Loss) Gain on Investments, Net (USD, thousands)

Employee Benefit Plan Expense, Net (USD, thousands)

Interest and Other Financing Expense, Net (USD, thousands)

Income Before Income Taxes (USD, thousands)

Provision for Income Taxes (USD, thousands)

Consolidated Net Income (USD, thousands)

Noncontrolling Interests (USD, thousands)

Net Income Attributable to Shareholders (USD, thousands)

ee576409bfce1289704d91adc61f6245cf178816f4ab26fd9cc326cd60d7d030

Amortization of Stock-Based Compensation (USD, thousands)

Equity in Earnings of Affiliated Companies (USD, thousands)

Loss (Gain) on Investments, Net (USD, thousands)

Other Adjustments to Net Income (USD, thousands)

Accounts Receivable, Net (Change) (USD, thousands)

Inventories (Change) (USD, thousands)

Accounts Payable (Change) (USD, thousands)

Accrued Expenses (Change) (USD, thousands)

Other Assets and Liabilities (Change) (USD, thousands)

Net Cash Provided by (Used for) Operating Activities (USD, thousands)

Acquisition of Property, Plant, and Equipment (USD, thousands)

Other Investing Activities (USD, thousands)

Net Cash Used for Investing Activities (USD, thousands)

Change in Short-Term and Other Borrowings (USD, thousands)

Proceeds from (Repayments of) Long-Term Bank Borrowings, Net (USD, thousands)

Proceeds from Exercise of Stock Options (USD, thousands)

Repurchases of Common Stock (USD, thousands)

Net Cash (Used for) Provided by Financing Activities (USD, thousands)

Effect of Exchange Rate Changes on Cash (USD, thousands)

Net (Decrease) Increase in Cash and Cash Equivalents (USD, thousands)

Deferred Income Taxes (USD, thousands)

Cash and Cash Equivalents at Beginning of Year/Period (USD, thousands)

Cash and Cash Equivalents at End of Year/Period (USD, thousands)

e569ed3c33415d00ea94f0604fd79030457d1fe64cd060a48aba1570b0ea7c23

Cash and cash equivalents (USD, thousands)

Accounts receivable, net (USD, thousands)

Inventories (USD, thousands)

Other current assets (USD, thousands)

Total current assets (USD, thousands)

Land (USD, thousands)

Buildings and improvements (USD, thousands)

Machinery and equipment (USD, thousands)

Property, plant, and equipment, net (USD, thousands)

Investments in affiliated companies (USD, thousands)

Intangible assets, net (USD, thousands)

Goodwill (USD, thousands)

Other assets (USD, thousands)

Total assets (USD, thousands)

Accounts payable (USD, thousands)

Accrued expenses (USD, thousands)

Short-term borrowings, including current portion of long-term debt (USD, thousands)

Total current liabilities (USD, thousands)

Long-term debt (USD, thousands)

Other liabilities (USD, thousands)

Common stock, par value $ 1: Issued (USD, thousands)

Capital in excess of par value (USD, thousands)

Treasury stock (USD, thousands)

Retained earnings (USD, thousands)

Accumulated other comprehensive loss (USD, thousands)

Total shareholders’ equity (USD, thousands)

Noncontrolling interests (USD, thousands)

Total equity (USD, thousands)

Total liabilities and equity (USD, thousands)

f95f9fef777c0e33c93e3c543b20da6bf386a63dc115fbc503d38a7218ed7be8

The **decline in Cash and cash equivalents** in Q4 2024 was primarily due to significant outflows in financing activities—such as a **reduction in short-term and other borrowings** and **repurchases of common stock**—as well as adverse effects from **exchange rate changes**. Although the company generated **$326,464 thousand** from operating activities, the substantial cash used for financing and the negative impact of exchange rate fluctuations outweighed this positive inflow, with additional moderate outflows from investing activities contributing to the drop.  **[0001894806-25-000002_arw-20250206xex99d1.htm:8]** 

Why did Cash and cash equivalents decline in Q4 2024?

The dip in total assets in Q2 2024 was driven by several key factors. **Accounts receivable** fell by **$1,351,572 thousand** and **inventories** dropped by **$532,432 thousand**, both of which significantly reduced the asset base. Additionally, there were modest declines in **property, plant, and equipment (net)** by **$31,016 thousand** and in **intangible assets (net)** by **$14,970 thousand**. While an increase in **other current assets** by **$326,816 thousand** slightly mitigated these decreases, the overall effect was a reduction in total assets from **$21,726,168 thousand** at the end of 2023 to **$20,107,766 thousand** in Q2 2024.  **[0001859644-24-000008_arw-20240801xex99d1.htm:6]** **[0001558370-24-010531_arw-20240629x10q.htm:5]** 

What contributed to the dip in Total assets in Q2 2024?

The spike in **long-term debt** for Q4 2024 was driven by several key factors. Firstly, **new notes were issued** – specifically **5.15% notes due 2029** and **5.875% notes due 2034**, which added approximately **$990,195** in debt. Secondly, the company made **significant repayments** by settling **$500 million** of its **6.125% notes due March 2026** and **$500 million** of its **3.25% notes due September 2024**. Lastly, there was an **increase in borrowings under the North American Asset Securitization Program** from **$198,000** in 2023 to **$633,000** in 2024. These combined actions resulted in the observed debt spike in Q4 2024.  **[0001558370-25-000781_arw-20241231x10k.htm:75]** **[0001558370-25-000781_arw-20241231x10k.htm:47]** 

What caused the spike in Long-term debt in Q4 2024?

The **sharp drop** in short-term borrowings in **Q4 2024** is primarily attributable to the following actions: the **repayment of debt**—including repaying **$500.0 million of 3.25% notes** due in September 2024 and **$500.0 million of 6.125% notes** due in March 2026—and the **reduction in commercial paper outstanding** from **$1,121,882 thousand to $0**, which significantly decreased the short-term debt figure. Additionally, a shift in the debt composition with the issuance of **4.00% notes due April 2025** further impacted the overall balance.  **[0001558370-25-000781_arw-20241231x10k.htm:75]** **[0001558370-25-000781_arw-20241231x10k.htm:47]** 

Why did Short-term borrowings drop sharply in Q4 2024?

The documents do not provide a specific explanation for the change. However, they note that **Other current assets** decreased from **$684,126 thousand** at the end of 2023 to **$471,909 thousand** in Q4 2024, indicating a significant decline over the period.  **[0001894806-25-000002_arw-20250206xex99d1.htm:7]** **[0001558370-25-000781_arw-20241231x10k.htm:59]** 

What explains the significant decline in Other current assets in Q4 2024?

9717f91dd4c07f5bf0d4df7c569d9a72974f95b8ae8a7cad5dc61d4046ac802e

In Q1 2024, operating cash flow was notably high at **$403,210 thousand** due to effective management of working capital. The company reduced inventories by **$362,813 thousand**, experienced a favorable adjustment in accounts receivable, and saw a less pronounced decline in accounts payable compared to Q1 2023. Additionally, an increase in accrued expenses by **$21,053 thousand** further boosted operating cash flow. These combined factors contributed significantly to the improved cash flow from operations during the quarter.  **[0001859644-24-000005_arw-20240502xex99d1.htm:6]** **[0001558370-24-006456_arw-20240330x10q.htm:6]** 

Why was operating cash flow so high in Q1 2024?

The dramatic drop was mainly driven by a **significant increase in accounts receivable**—a negative impact of **$(701,168) thousand** compared to a decrease in the previous quarter—and a **decrease in accrued expenses** of **$(83,506) thousand** that further reduced cash inflows. Although **accounts payable** increased by **$550,797 thousand** and the change in **inventories** provided some positive contributions, they were not enough to offset these negative factors.  **[0001894806-24-000004_arw-20241028xex99d1.htm:7]** 

What drove the dramatic drop in operating cash flow in Q3 2024?

The **significant increase** in FY 2024 operating cash flow was primarily driven by **counter-cyclical cash flow** combined with key **changes in working capital**. Specifically, the company experienced a reduction in investments in working capital, most notably through **lower inventory levels**, which provided additional cash. Additionally, there were notable shifts in working capital accounts: the **Accounts Receivable** saw a significant change from an inflow of **$189,425 thousand** in FY 2023 to an outflow of **$(1,013,091) thousand** in FY 2024, while **Inventories** contributed an inflow of **$421,063 thousand** in FY 2024 compared to **$139,313 thousand** in FY 2023. Finally, **Accounts Payable** improved considerably, with an inflow of **$1,092,488 thousand** in FY 2024 compared to an outflow of **$(457,382) thousand** in FY 2023.  **[0001894806-25-000002_arw-20250206xex99d1.htm:9]** **[0001558370-25-000781_arw-20241231x10k.htm:45]** 

What factors contributed to the significant increase in FY 2024 operating cash flow?

The documents do not provide a detailed explanation for the increase in capital expenditures. They only show that the amount spent on the acquisition of property, plant, and equipment increased from **$20,114 thousand** in Q1 2023 to **$29,535 thousand** in Q1 2024, without specifying the reasons behind this change.  **[0001558370-24-006456_arw-20240330x10q.htm:6]** **[0001859644-24-000005_arw-20240502xex99d1.htm:6]** 

Why did capital expenditures increase in Q1 2024?

The significant decline in share repurchases in Q1 2024 was primarily due to **lower repurchase activity**, driven by the company's broader financial strategy that considered **working capital needs, cash requirements for acquisitions, debt repayment obligations, share price, and general economic and market conditions**. Additionally, the accrual of **$0.7 million in excise tax** further reduced the available authorization for repurchases.  **[0001558370-24-006456_arw-20240330x10q.htm:19]** **[0001558370-24-006456_arw-20240330x10q.htm:32]** 

What led to the significant decline in share repurchases in Q1 2024?

b560ee8985b7cceeeb8903dbff0a4f7d6ea0a9cd047aab09a11e9f6bf8c76ce0

Arrow Electronics' sales declined significantly in Q1 2024 primarily due to several factors. The **global components segment** experienced a **24.3% drop** in sales as customer demand weakened, especially in key verticals such as industrial, communications, and transportation across different regions. Additionally, the **Enterprise Computing Solutions (ECS) segment** declined by **7.9%** because of a shift towards products like software-as-a-service and cloud-based solutions, coupled with softer demand in the Americas. The overall market was also affected by **cyclical market conditions**, which led to reduced demand and inventory destocking by customers. These combined factors resulted in a **20.7% overall decline** in consolidated sales from Q1 2023 to Q1 2024.  **[0001859644-24-000005_arw-20240502xex99d1.htm:0]** **[0001859644-24-000005_arw-20240502xex99d1.htm:7]** **[0001558370-24-006456_arw-20240330x10q.htm:26]** 

Why did Sales drop so significantly in Q1 2024?

The steep decline in Operating Income in Q1 2024 was driven by several factors. First, there was a **21% decrease** in consolidated sales—from **$8,736,428** in Q1 2023 to **$6,924,260** in Q1 2024—which had a direct impact on operating income.  **[0001859644-24-000005_arw-20240502xex99d1.htm:4]** **[0001558370-24-006456_arw-20240330x10q.htm:25]**  In addition, the gross profit dropped from **$1,113,822** to **$857,826**, further eroding margins.  **[0001859644-24-000005_arw-20240502xex99d1.htm:4]** **[0001558370-24-006456_arw-20240330x10q.htm:25]**  Moreover, there were significantly higher restructuring, integration, and other charges—the expenses increased sharply from around **$2.6 million** in Q1 2023 to **$46.9 million** in Q1 2024—which compounded the decline.  **[0001859644-24-000005_arw-20240502xex99d1.htm:4]** **[0001859644-24-000005_arw-20240502xex99d1.htm:9]**  Lastly, the Global Components segment incurred **$10.5 million** in inventory write-downs related to the wind-down of a business, further contributing to the lower operating income.  **[0001859644-24-000005_arw-20240502xex99d1.htm:9]** 

What drove the steep decline in Operating Income in Q1 2024?

In Q1 2024, **Net Income was significantly lower** due to a combination of factors. **Sales declined by 21%**, which led to a substantial decrease in **gross profit** (23% lower year-over-year) while **operating expenses surged** because of increased restructuring, integration, and other charges (rising from **$2,560 thousand** to **$46,856 thousand**). Additionally, a **slightly higher effective tax rate** further impacted profitability. These factors together contributed to the much lower net income in Q1 2024.  **[0001558370-24-006456_arw-20240330x10q.htm:4]** **[0001859644-24-000005_arw-20240502xex99d1.htm:9]** **[0001859644-24-000005_arw-20240502xex99d1.htm:0]** **[0001859644-24-000005_arw-20240502xex99d1.htm:4]** **[0001859644-24-000005_arw-20240502xex99d1.htm:8]** 

Why was Net Income so low in Q1 2024?

The spike in **Restructuring, Integration, and Other Expenses** in Q1 2024 was primarily driven by **significant termination charges amounting to $42.8 million** related to personnel terminations, which were part of broader operating expense reduction initiatives. Additionally, the company incurred other restructuring and integration costs aimed at improving operational efficiency and consolidating its operations.  **[0001558370-24-006456_arw-20240330x10q.htm:27]** **[0001558370-24-006456_arw-20240330x10q.htm:17]** 

What caused the spike in Restructuring Expenses in Q1 2024?

The fiscal year net income declined sharply in FY 2024 due to several factors. **Sales dropped by 15.7%**, falling from **$33,107,120 thousand in 2023** to **$27,923,324 thousand in 2024**, which significantly impacted overall profitability.  **[0001894806-25-000002_arw-20250206xex99d1.htm:11]**  Additionally, **operating income declined from $1,471,164 thousand to $768,557 thousand**, reducing the earnings generated from core business operations.  **[0001894806-25-000002_arw-20250206xex99d1.htm:14]**  A major factor was the foreign currency translation adjustment, which shifted from a **gain of $74,800 thousand in 2023** to a **loss of $225,564 thousand in 2024**, adversely affecting the income statement.  **[0001558370-25-000781_arw-20241231x10k.htm:58]**  Finally, increased **restructuring, integration, and other charges** (rising from **$83,916 thousand in 2023** to **$142,917 thousand in 2024**) further contributed to the net income decline.  **[0001894806-25-000002_arw-20250206xex99d1.htm:6]** 

Why did Fiscal Year Net Income decline so sharply in FY 2024?

3a1547bc775d20dbfa45abe52f035478e521eb3793d68e5eb25b6307e7e79d69

ARROW ELECTRONICS (ARW)

Financials