Slide 1: Fourth-Quarter 2013 CFO Commentary
Exhibit 99.2 Fourth-Quarter 2013 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 fourth quarter of last year. Any discussion of our results will exclude these items to give you a
Slide 2: Enterprise Computing Solutions and Full Year Summary
In enterprise computing solutions our supplier matrix expansion, share growth, and excellent execution in the quarter all drove our record sales and operating income. Sales advanced 13 percent year over year, excluding the impact of the acquisition of Computerlinks on October 28, 2013. Computerlinks
Slide 3: Consolidated Overview – Fourth Quarter
Consolidated Overview – Fourth Quarter Y/Y Change Y/Y Q/Q P&L Highlights* Q4 2013 Adjusted for Change Change Acquisitions Sales $ 6,153 +14% +10% +22% Gross Profit Margin 12.8% -30bps -40bps -50bps Operating Expense/Sales 8.5% -80bps -90bps -100bps Operating Income $ 266 +29% +23% +37% Operating Mar
Slide 4: Consolidated Overview – Fourth Quarter (continued)
o Increased $32 million year over year o Increased $52 million sequentially ● Earnings per share were $1.71 and $1.69 on a basic and diluted basis, respectively o Diluted EPS increased 31% year over year and 43% sequentially 4
Slide 5: Global Components
Global Components Sales ($ in millions) ● Sales increased 8% year over year and were down 1% sequentially ● Gross profit dollars increased 6% year over year and were down 1% sequentially o Sales growth and an improvement in European gross profit dollars drove the improvement year over year ● Book-to
Slide 6: Americas Components Region
Americas Components Region Sales ($ in millions) ● Sales increased 3% year over year and were flat sequentially o Growth in all tracked verticals, with particularly good growth in medical and lighting year over year o In line with normal seasonality on a sequential basis ● Operating income increased
Slide 7: Europe Components Region
Europe Components Region Sales ($ in millions) ● Sales increased 15% year over year and decreased 3% sequentially o Adjusted for the impact of changes in foreign currencies, sales increased 10% year over year and decreased 6% sequentially o All regions at or above prior year sales levels o Sequentia
Slide 8: Asia Pacific Components Region
Asia Pacific Components Region Sales ($ in millions) ● Sales increased 9% year over year and were down 1% sequentially o Strong improvements in China drove year over year growth o Sequential sales in line with traditional seasonality ● Operating profit increased 18% year over year o Primarily due to
Slide 9: Global Enterprise Computing Solutions
Global Enterprise Computing Solutions Sales ($ in millions) ● Sales increased 23% year over year and 72% sequentially o Double digit growth year over year in services, storage, and software § Networking and infrastructure software lead the gains, up 31% and 33%, respectively ● Gross margin was flat
Slide 10: ECS America
ECS America Sales ($ in millions) ● Sales increased 19% year over year and 46% sequentially o Year over year growth in software (+25%), storage (+23%), and services (+19%) o Sales in our core value-added distribution business ahead of seasonality ● Operating income increased 22% year over year and 6
Slide 11: ECS Europe
ECS Europe Sales ($ in millions) ● Sales increased 29% year over year and 138% sequentially o Excluding the impact of Computerlinks, sales increased 94% sequentially in constant currency o Year over year growth in software (+66%), services (+31%), and storage (+29%) ● Operating profit increased 56%
Slide 12: Consolidated Overview – Full Year 2013
Consolidated Overview – Full Year 2013 Y/Y Change Y/Y P&L Highlights* 2013 Adjusted for Change Acquisitions Sales $ 21,357 +5% +2% Gross Profit Margin 13.1% -30bps -40bps Operating Expense/Sales 9.2% -20bps -30bps Operating Income $ 823 +2% flat Operating Margin 3.9% -110bps -110bps Net Income $ 519
Slide 13: Full Year 2013 Earnings per Share and Returns
● Earnings per share were $5.06 and $5.01 on a basic and diluted basis, respectively o Diluted EPS increased 7% year over year o Pro forma for acquisitions, EPS increased 5% year over year ● Returns on capital accretive to shareholders o Return on working capital was 25.1% o Return on invested capit
Slide 14: Cash Flow and Balance Sheet Highlights
Cash Flow and Balance Sheet Highlights · Cash Flow from Operations Cash generated from operating activities in the fourth quarter was $215 million and $451 million on a trailing 12-month basis. We converted more than 113% of GAAP net income to cash over the last 12-months, well in excess of our targ
Slide 15: Arrow Electronics Updated Revenue Seasonality
Arrow Electronics Updated Revenue Seasonality* Global NAC EMEA ex FX AAP Components Q1 -7% to +1% +9% to +17% -10% to -2% Q2 -1% to +7% -5% to +3% +9% to +17% Q3 -6% to +2% -3% to +5% -4% to +4% Q4 -3% to +5% -13% to -5% -4% to +4% Global ECS NA EMEA ex FX Q1 -27% to -19% -34% to -26% Q2 +15% to +23
Slide 16: Risk Factors and Non-GAAP Financial Information
Risk Factors The discussion of the company’s business and operations should be read together with the risk factors contained in Item 1A of its 2013 Annual Report on Form 10-K, filed with the Securities and Exchange Commission, which describe various risks and uncertainties to which the company is or
Slide 17: Earnings Reconciliation – Fourth Quarter
Earnings Reconciliation ($ in thousands, except per share data) Q4 2013 Q3 2013 Q4 2012 Operating income, as Reported $ 237,337 $ 162,736 $ 264,168 Intangible assets amortization expense 10,007 8,936 9,136 Restructuring, integration, and other charges 18,248 22,568 11,285 Settlement of legal matter
Slide 18: Reconciliation Notes – Q3-13 and Q4-12 Charges
Q3-13 Intangible Assets Amortization Expense: During the third quarter of 2013, the company recorded intangible assets amortization expense of $8.9 million ($7.1 million net of related taxes or $.07 per share on both a basic and diluted basis). Q3-13 Restructuring, Integration, and Other Charges: Du
Slide 19: Earnings Reconciliation – Full Year
Earnings Reconciliation ($ in thousands, except per share data) 2013 2012 Operating income, as Reported $ 693,500 $ 804,123 Intangible assets amortization expense 36,769 36,508 Restructuring, integration, and other charges 92,650 47,437 Settlement of legal matter -- (79,158) Operating income, as Adj
Slide 20: Reconciliation Notes – 2013 and 2012 Items
2013 Loss on prepayment of debt: In 2013, the company recorded a loss on prepayment of debt of $4.3 million ($2.6 million net of related taxes or $.03 per share on both a basic and diluted basis). 2013 Settlement of tax matters: In 2013, the company recorded an increase in the provision for income t