Slide 1: Third-Quarter 2013 CFO Commentary
Exhibit 99.2 Third-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 third quarter of last year. Any discussion of our results will exclude these items to give you a be
Slide 2: Market view and fourth-quarter outlook
In global components, we view the overall market as stable. Our sales of $3.5 billion were in line with seasonality and expectations. Book-to-bill, which was at the highest third-quarter level in the last three years, was near parity. Sales advanced year over year in the Americas and Europe and were
Slide 3: Consolidated Overview – Third Quarter
Consolidated Overview – Third Quarter Y/Y Change Y/Y Q/Q P&L Highlights* Q3 2013 Adjusted for Change Change Acquisitions Sales $5,048 +2% +1% -5% Gross Profit Margin 13.3% -10bps -10bps +30bps Operating Expense/Sales 9.5% -10bps -20 bps +10bps Operating Income $194 +4% +3% flat Operating Margin 3.8%
Slide 4: Operating margin, tax rate, net income and EPS
● Operating income as a percentage of sales was 3.8% o Increased 20 basis points sequentially o Increased 10 basis points year over year and as adjusted for the impact of acquisitions ● Effective tax rate for the quarter was 29.4% o The tax rate was higher than our typical range of 27%-29%; we expec
Slide 5: Global Components
Global Components Sales ($ in millions) ● Sales increased 3% year over year and 2% sequentially ● Gross margin remained flat year over year and sequentially o Sequentially core gross margins advanced, offset by declines in the specialty businesses ● Book-to-bill was near parity at 0.99 o Highest thi
Slide 6: Americas Components Region
Americas Components Region Sales ($ in millions) ● Sales increased 2% year over year and 3% sequentially o In line with normal seasonality on a sequential basis o Increased sequentially across several of our vertical markets (aerospace, medical, lighting and alternative energy) ● Operating income de
Slide 7: Europe Components Region
Europe Components Region Sales ($ in millions) ● Sales increased 9% year over year and 1% sequentially o Adjusted for the impact of changes in foreign currencies, sales increased 4% year over year and 3% sequentially o All regions at or above prior year sales levels o Double digit growth in medical
Slide 8: Asia Pacific Components Region
Asia Pacific Components Region Sales ($ in millions) ● Sales increased 2% sequentially and were flat year over year o Core sales grew 7% year over year o Core sales were flat sequentially as we exited a customer engagement that did not meet our financial metrics o Both transportation and lighting sa
Slide 9: Global Enterprise Computing Solutions
Global Enterprise Computing Solutions Sales ($ in millions) ● Sales decreased 1% year over year and 17% sequentially o The sequential decline was higher than traditional seasonality due to our quarter end cut off, which was earlier than several of our suppliers; these sales were recorded in October
Slide 10: ECS America
ECS America Sales ($ in millions) ● Sales increased 3% year over year and decreased 14% sequentially o Sales in our core value-added distribution business was below traditional seasonality primarily due to our quarter-end cut off o Year over year growth in storage (+13%), services (+12%) and softwar
Slide 11: ECS Europe
ECS Europe Sales ($ in millions) ● Sales decreased 9% year over year and 25% sequentially o Adjusted for the impact of changes in foreign currencies, sales decreased 26% sequentially o Below traditional seasonality primarily due to our quarter end cut off and some push out of activity in the U.K. o
Slide 12: Cash Flow and Balance Sheet Highlights
Cash Flow and Balance Sheet Highlights ● Cash Flow from Operations Cash generated from operating activities in the third quarter was $81 million and $423 million on a trailing 12-month basis. We converted more than 96% of GAAP net income to cash over the last 12-months, well in excess of our targete
Slide 13: Arrow Electronics Revenue Seasonality
Arrow Electronics Revenue Seasonality* Global NAC EMEA ex FX AAP Components Q1 -2% to +4% +13% to +19% -1% to +5% Q2 -3% to +3% -5% to -11% +4% to +10% Q3 -2% to +4% -5% to +1% +3% to +9% Q4 -4% to +2% -3% to -9% -1% to -7% Global ECS NA EMEA ex FX Q1 -28% to -34% -21% to -27% Q2 +20% to +26% +1% to
Slide 14: Risk Factors; Certain Non-GAAP Financial Information
Risk Factors The discussion of the company’s business and operations should be read together with the risk factors contained in Item 1A of its 2012 Annual Report on Form 10-K, filed with the Securities and Exchange Commission, which describe various risks and uncertainties to which the company is or
Slide 15: Earnings Reconciliation
Earnings Reconciliation ($ in thousands, except per share data) Q3 2013 Q2 2013 Q3 2012 Operating income, as Reported $ 162,736 $ 155,875 $ 163,817 Intangible assets amortization expense 8,936 8,869 8,742 Restructuring, integration, and other charges 22,568 30,224 14,562 Operating income, as Adjuste
Slide 16: Adjustments and charges descriptions
Q2-13 Adjustments to Tax Reserves: During the second quarter of 2013, the company recorded an increase in the provision for income taxes of $5.4 million ($.05 per share on both a basic and diluted basis) and an increase in interest expense of $1.5 million ($.9 million net of related taxes or $.01 pe