Slide 1: Fourth-Quarter 2014 CFO Commentary
Exhibit 99.2 Fourth-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 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
Sales in our enterprise computing solutions business were $2.8 billion, in-line with our guidance. In the Americas, sales grew 9% year over year and were up 44% sequentially, ahead of traditional seasonality. In Europe, sales in constant currency advanced 3% year over year. Global enterprise computi
Slide 3: Consolidated Overview – Fourth Quarter
Consolidated Overview – Fourth Quarter Y/Y Change Y/Y Adjusted for Q/Q P&L Highlights* Q4 2014 Change Acquisitions & Change Currency Sales $6,397 +4% +4% +14% Gross Profit Margin 12.8% flat -20bps -20bps Operating Expense/Sales 8.4% -10bps -20bps -80bps Operating Income $280 +6% +5% +30% Operating M
Slide 4: Tax Rate, Net Income and Earnings per Share
● Effective tax rate for the quarter was 27.0% ● Net income was $184 million o Increased $12 million year over year ● Earnings per share were $1.91 and $1.88 on a basic and diluted basis, respectively o Diluted EPS increased 11% year over year 4
Slide 5: Global Components
Global Components Sales ($ in millions) ● Sales increased 4% year over year and decreased seasonally 4% sequentially ● Leading indicators, including lead times and cancellation rates, are in-line with historical norms ● Book-to-bill of 1.03 was at a normal seasonal level for a fourth quarter ● Gross
Slide 6: Americas Components Region
Americas Components Region Sales ($ in millions) ● Sales increased 4% year over year and 2% sequentially o Good growth in the alternative energy, transportation, and lighting verticals year over year o On a sequential basis, core sales were in-line with seasonality ● Looking ahead to the first quart
Slide 7: Europe Components Region
Europe Components Region Sales ($ in millions) ● Sales increased 1% year over year and decreased 6% sequentially o Adjusted for the impact of changes in foreign currencies and acquisitions, sales increased 8% year over year o Good growth in the transportation, lighting, and aerospace & defense verti
Slide 8: Asia Pacific Components Region
Asia Pacific Components Region Sales ($ in millions) ● Sales increased 8% year over year and declined 9% sequentially o Robust growth in the transportation and industrial power verticals and good growth in wireless year over year o On a sequential basis, core sales were below traditional seasonality
Slide 9: Global Enterprise Computing Solutions
Global Enterprise Computing Solutions Sales ($ in millions) ● Sales increased 3% year over year and 49% sequentially ● Gross margin was down 10 basis points year over year due to a higher mix from Americas ● Operating margin of 5.9% o Up 30 basis points year over year and up in both regions o Operat
Slide 10: ECS America
ECS America Sales ($ in millions) ●● Sales increased 9% year over year and 44% sequentially o Very strong double-digit growth in software and services o Growth in storage o Growth in industry-standard servers was offset by decline in proprietary servers ● Looking ahead to the first quarter, we expec
Slide 11: ECS Europe
ECS Europe Sales ($ in millions) ● Sales declined 6% year over year and increased 59% sequentially o Adjusted for the impact of acquisitions and changes in foreign currencies, sales decreased 3% year over year o Growth in services and software o Growth in industry-standard servers was offset by decl
Slide 12: Consolidated Overview – Full-Year 2014
Consolidated Overview – Full-Year 2014 Y/Y Change Y/Y Adjusted for P&L Highlights* 2014 Change Acquisitions & Currency Sales $22,769 +7% +3% Gross Profit Margin 13.2% +10bps flat Operating Expense/Sales 9.1% -10bps -30bps Operating Income $924 +12% +9% Operating Margin 4.1% +20bps +30bps Net Income
Slide 13: Full-Year Earnings per Share
● Earnings per share were $6.01 and $5.93 on a basic and diluted basis, respectively o Diluted EPS increased 19% year over year o Pro forma for acquisitions, diluted EPS increased 16% year over year 13
Slide 14: Cash Flow and Balance Sheet Highlights
Cash Flow and Balance Sheet Highlights ● Cash Flow from Operations Cash from operating activities in the fourth quarter was $457 million. Cash flow from operating activities was $673 million on a trailing 12-month basis. We converted more than 135% of GAAP net income to cash over the last 12 months.
Slide 15: First-Quarter 2015 Guidance
First-Quarter 2015 Guidance Consolidated Sales $4.9 billion to $5.3 billion Global Components $3.35 billion to $3.55 billion Global ECS $1.55 billion to $1.75 billion Diluted Earnings per Share* $1.27 to $1.39 * First-quarter guidance assumes average diluted shares outstanding of 98 million. Arrow E
Slide 16: Risk Factors and Forward-Looking Statements
Risk Factors The discussion of the company’s business and operations should be read together with the risk factors contained in Item 1A of its 2014 Annual Report on Form 10-K, filed with the Securities and Exchange Commission, which describe various risks and uncertainties to which the company is or
Slide 17: Certain Non-GAAP Financial Information
Certain Non-GAAP Financial Information In addition to disclosing financial results that are determined in accordance with accounting principles generally accepted in the United States (“GAAP”), the company also provides certain non-GAAP financial information relating to sales, operating income, net
Slide 18: Earnings Reconciliation
Earnings Reconciliation ($ in thousands, except per share data) Q4 2014 Q3 2014 Q4 2013 Operating income, as Reported $ 176,432 $ 199,816 $ 237,337 Intangible assets amortization expense 11,138 11,108 10,007 Restructuring, integration, and other charges 14,660 3,935 18,248 Trade name impairment char
Slide 19: Notes on Adjustment Items
Q4-14 Trade name impairment Charge: During the fourth quarter of 2014, the company recorded a non-cash impairment charge associated with discontinuing the use of a trade name of $78.0 million ($47.9 million net of related taxes or $.49 per share on both a basic and diluted basis). Q3-14 Intangible A