Slide 1: Third-Quarter 2014 CFO Commentary
Exhibit 99.2 Third-Quarter 2014 CFO Commentary As reflected in our earnings release, there are a number of items that impact the comparability of our results with those in the trailing quarter and the third quarter of last year. Any discussion of our results will exclude these items to give you a be
Slide 2: Third-Quarter Summary
Our consolidated sales were $5.6 billion and non-GAAP diluted earnings per share were $1.40. Revenue was at the high end of our guidance range and EPS was above the high end of our guidance range and an all-time record for the third quarter. Operating income and diluted earnings per share advanced 1
Slide 3: Consolidated Overview – Third Quarter
Consolidated Overview – Third Quarter Y/Y Change Y/Y Adjusted for Q/Q P&L Highlights* Q3 2014 Change Acquisitions & Change Currency Sales $5,613 +11% +6% -1% Gross Profit Margin 13.0% -30bps -50bps -20bps Operating Expense/Sales 9.2% -30bps -50bps flat Operating Income $215 +11% +7% -6% Operating Ma
Slide 4: Tax Rate, Net Income and Earnings per Share
● Effective tax rate for the quarter was 26.0% ● Net income was $140 million o Increased $20 million year over year ● Earnings per share were $1.42 and $1.40 on a basic and diluted basis, respectively o Diluted EPS increased 19% year over year 4
Slide 5: Global Components
Global Components Sales ($ in millions) ● Sales increased 8% year over year and 5% sequentially ● Leading indicators, including lead times and cancellation rates, are in line with historical norms ● Book-to-bill of 0.97 was at a normal seasonal level for a third quarter ● Gross profit dollars increa
Slide 6: Americas Components Region
Americas Components Region Sales ($ in millions) ● Sales increased 2% year over year and 3% sequentially o Good growth in the alternative energy, transportation, and lighting verticals year-over-year o Sequential sales were at the high end of seasonality ● Looking ahead to the fourth quarter, we exp
Slide 7: Europe Components Region
Europe Components Region Sales ($ in millions) ● Sales increased 4% year over year and decreased 4% sequentially o Adjusted for the impact of acquisitions and changes in foreign currencies, sales increased 3% year over year o Good growth in the transportation and aerospace & defense verticals year o
Slide 8: Asia Pacific Components Region
Asia Pacific Components Region Sales ($ in millions) ● Sales increased 18% year over year and 14% sequentially o Robust growth in the transportation, wireless, and industrial power verticals and good growth in the lighting vertical year over year o Sequential sales above traditional seasonality ● Lo
Slide 9: Global Enterprise Computing Solutions
Global Enterprise Computing Solutions Sales ($ in millions) ● Sales increased 19% year over year and declined 11% sequentially ● Gross margin was down 40 basis points year over year due to customer mix ● Operating margin of 4.0% o Flat year over year o Operating margin adjusted for acquisitions and
Slide 10: ECS America
ECS America Sales ($ in millions) ● Sales increased 11% year over year and declined 5% sequentially o Very strong growth in software and services o Growth in storage and networking o Growth in industry-standard servers was offset by decline in proprietary servers ● Looking ahead to the fourth quarte
Slide 11: ECS Europe
ECS Europe Sales ($ in millions) ● Sales increased 41% year over year and declined 20% sequentially o Adjusted for the impact of acquisitions and changes in foreign currencies, sales increased 7% year over year o Very strong growth in software and services o Growth in storage, networking, industry-s
Slide 12: Cash Flow and Balance Sheet Highlights
Cash Flow and Balance Sheet Highlights ● Cash Flow from Operations Cash from operating activities in the third quarter was a use of $67 million. Cash flow from operating activities was $431 million on a trailing 12- month basis. We converted more than 83% of GAAP net income to cash over the last 12
Slide 13: Arrow Electronics Revenue Seasonality
Arrow Electronics Revenue Seasonality* Global NAC EMEA ex FX AAP Components Q1 -7% to +1% +9% to +17% -10% to -2% Q2 -1% to +7% -5% to +3% +9% to +17% Q3 -6% to +2% -3% to +5% -4% to +4% Q4 -3% to +5% -13% to -5% -4% to +4% Global ECS NA EMEA ex FX Q1 -27% to -19% -34% to -26% Q2 +15% to +23% +3% to
Slide 14: Risk Factors
Risk Factors The discussion of the company’s business and operations should be read together with the risk factors contained in Item 1A of its Form 10-Q for the quarterly period ended September 27, 2014, as well as its 2013 Annual Report on Form 10-K, filed with the Securities and Exchange Commissio
Slide 15: Certain Non-GAAP Financial Information
Certain Non-GAAP Financial Information In addition to disclosing results that are determined in accordance with Generally Accepted Accounting Principles ("GAAP"), the company provides certain non-GAAP financial information relating to operating income, net income attributable to shareholders, and ne
Slide 16: Earnings Reconciliation
Earnings Reconciliation ($ in thousands, except per share data) Q3 2014 Q2 2014 Q3 2013 Operating income, as Reported $ 199,816 $ 208,269 $ 162,736 Intangible assets amortization expense 11,108 10,870 8,936 Restructuring, integration, and other charges 3,935 9,632 22,568 Operating income, as Adjuste
Slide 17: Notes on Amortization and Restructuring Charges
Q2-14 Intangible Assets Amortization Expense: During the second quarter of 2014, the company recorded intangible assets amortization expense of $10.9 million ($8.9 million net of related taxes or $.09 per share on both a basic and diluted basis). Q2-14 Restructuring, Integration, and Other Charges: