Financial Analysis

15. Contingencies Environmental Matters The Company has accrued liabilities of $26.0 million for ongoing environmental remediation efforts at sites in Huntsville, Alabama (the Huntsville site) and Norco, California (the Norco site) at which contaminated soil and groundwater was identified. The contamination related to activities of certain subsidiaries which ended prior to 2000. Remediation efforts began in 2015 and 2003 at the Huntsville site and Norco site, respectively, and are progressing under action plans monitored by local environmental agencies. Costs are recorded for environmental matters when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated. Environmental liabilities are included in Accrued expenses and Other liabilities on the companys consolidated balance sheets. The company has determined that there is no amount within the environmental liability ranges discussed below, that is a better estimate than any other amount, and therefore has recorded the accruals at the minimum amount of the ranges. The liabilities were estimated based on current costs and are not discounted. Environmental costs related to these matters include remediation, project management, regulatory oversight, and investigative and feasibility study activities. To date, the company has spent approximately $9.5 million and $89.1 million related to environmental costs at the Huntsville site and the Norco site, respectively. The subsequent …

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6. Debt Short-term borrowings, including the current portion of long-term debt, consist of the following at December 31: (thousands) 2025 2024 4.00% notes, due April 2025 $ $ 349,808 Other short-term borrowings 341 170 $ 341 $ 349,978 The company has $500.0 million in uncommitted lines of credit. There were no outstanding borrowings under the uncommitted lines of credit at December 31, 2025 and 2024. The maturity for borrowings is generally short term and is agreed upon with lenders at the time of each borrowing. The uncommitted lines of credit had a weighted-average effective interest rate of 4.37% and 5.18% at December 31, 2025 and 2024, respectively. The company has a commercial paper program and the maximum aggregate balance of commercial paper outstanding may not exceed the borrowing capacity of $1.2 billion. Amounts outstanding under the commercial paper program are backstopped by available commitments under the companys revolving credit facility. The company had no outstanding borrowings under this program at December 31, 2025 and December 31, 2024. The commercial paper program had a weighted-average effective interest rate of 4.26% and 5.21% at December 31, 2025 and 2024, respectively. Long-term debt consists of the following at December 31: (thousands) 2025 2024 Revolving credit facility $ $ 30,000 North American asset securitization program 970,000 633,000 7.50% senior debentures, due 2027 110,348 110,266 3.875% notes, due 2028 498,480 497,775 5.15% notes, due 2029 …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

12. Employee Stock Plans Omnibus Plan The company maintains the Omnibus Plan, which provides an array of equity alternatives available to the company when designing compensation incentives. The Omnibus Plan permits the grant of cash-based awards, non-qualified stock options, ISOs, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance units, covered employee annual incentive awards, and other stock-based awards. The Compensation Committee determines the vesting requirements, termination provision, and the terms of the award for any awards under the Omnibus Plan when such awards are issued. Under the terms of the Omnibus Plan, a maximum of 24.0 million shares of common stock may be awarded. There were 4.1 million shares and 4.4 million shares available for grant under the Omnibus Plan as of December 31, 2025, and 2024 respectively. Generally, shares are counted against the authorization only to the extent that they are issued. Restricted stock, restricted stock units, performance shares, and performance units count against the authorization at a rate of 1.69 to 1. The company records share-based payment awards exchanged for employee services at fair value on the date of grant and the awards in the consolidated statements of operations on a straight-line basis over the requisite employee service period. Stock-based compensation expense includes an estimate for forfeitures. The company recorded, as a component of Selling, general, an …

DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock · excerpt; the full note is in the filing

2. Goodwill and Intangible Assets Goodwill represents the excess of the cost of an acquisition over the fair value of the net assets acquired. The company tests goodwill and other indefinite-lived intangible assets for impairment annually as of the first day of the fourth quarter, or more frequently if indicators of potential impairment exist. As of the first day of the fourth quarters of 2025, 2024, and 2023, the companys annual impairment testing did not result in any additional impairment of goodwill of companies acquired. Goodwill of companies acquired, allocated to the companys reportable segments, is as follows: Global (thousands) Components Global ECS Total Balance as of December 31, 2023 (a) $ 875,194 $ 1,175,232 $ 2,050,426 Acquisitions 35,870 35,870 Foreign currency translation adjustment (8,619) (22,382) (31,001) Balance as of December 31, 2024 (a) $ 902,445 $ 1,152,850 $ 2,055,295 Foreign currency translation adjustment 16,617 48,159 64,776 Balance as of December 31, 2025 (a) $ 919,062 $ 1,201,009 $ 2,120,071 (a) The total carrying value of goodwill as of December 31, 2025, 2024, and 2023 in the table above is reflected net of $1.6 billion of accumulated impairment charges, of which $1.3 billion was recorded in the global components segment and $301.9 million was recorded in the global ECS segment. Intangible assets, net, are comprised of the following as of December 31, 2025: Gross Carrying Accumulated (thousands) Amount Amortization Net Customer relationships $ …

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8. Income Taxes The provision for income taxes for the years ended December 31 consists of the following: (thousands) 2025 2024 2023 Current: Federal $ 14,859 $ (8,586) $ 33,832 State 4,837 3,352 16,108 International 164,720 200,912 299,031 $ 184,416 $ 195,678 $ 348,971 Deferred: Federal $ (22,831) $ (50,305) $ (59,342) State 655 (8,348) (11,960) International (14,006) (41,213) (22,678) (36,182) (99,866) (93,980) $ 148,234 $ 95,812 $ 254,991 The principal causes of the difference between the U.S. federal statutory tax rate of 21% and effective income tax rates for the years ended December 31 are as follows: (thousands) 2025 2024 2023 United States $ (68,852) $ (234,972) $ (38,848) International 786,780 724,291 1,203,202 Income before income taxes $ 717,928 $ 489,319 $ 1,164,354 2025 (thousands) Amount Percent U.S. Federal statutory tax rate $ 150,765 21.0 % State and local income taxes, net of federal income tax effect* 4,306 0.6 % Foreign tax effects Germany Foreign exchange difference (11,536) (1.6) % Other 3,809 0.5 % Cayman Islands Statutory tax rate difference between Cayman Islands and United States (12,170) (1.7) % Taiwan Foreign exchange difference (7,930) (1.1) % Other 807 0.1 % Other foreign jurisdictions 11,743 1.6 % Effect of cross-border tax laws 13,281 1.8 % Tax credits Research and development tax credits (9,635) (1.3) % Changes in valuation allowances Nontaxable or nondeductible items 1,358 0.2 % Changes in unrecognized tax benefits 1,452 0.2 % Other adjustmen …

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14. Lease Commitments The company leases certain offices, distribution centers, and other property under non-cancellable operating leases expiring at various dates through 2036. Substantially all leases are classified as operating leases. The company recorded operating lease costs of $109.1 million, $98.0 million, and $93.4 million in 2025, 2024, and 2023, respectively. The following amounts were recorded in the consolidated balance sheets at December 31: (thousands) 2025 2024 Operating Leases Right-of-use asset $ 248,823 $ 251,129 Lease liability - current $ 76,537 $ 68,941 Lease liability - non-current 186,721 198,466 Total operating lease liabilities $ 263,258 $ 267,407 Maturities of operating lease liabilities at December 31 were as follows: (thousands) 2025 2026 $ 87,157 2027 72,935 2028 55,371 2029 30,987 2030 18,963 Thereafter 31,200 Total lease payments 296,613 Less: imputed interest (33,355) Total $ 263,258 Other information pertaining to leases consists of the following for the year ended December 31: (thousands) 2025 2024 Supplemental Cash Flow Information Cash paid for amounts included in the measurement of operating lease liabilities $ 88,656 $ 94,829 Right-of-use assets obtained in exchange for operating lease obligations 52,287 62,583 Operating Lease Term and Discount Rate Weighted-average remaining lease term in years 4 years 5 years Weighted-average discount rate 4.9% 5.4% …

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Impact of Recently Issued Accounting Standards In November 2024, the FASB issued ASU No. 2024-03, Income Statement Reporting Comprehensive Income Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses . This ASU requires entities to disaggregate expense items in the notes to the financial statements and requires disclosure of specified information related to purchases of inventory, employee compensation, depreciation, and intangible asset amortization. The amendments in this ASU are effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027. Companies have the option to apply the guidance either on a retrospective or prospective basis, and early adoption is permitted. In January 2025, the FASB issued ASU No. 2025-01, Income Statement Reporting Comprehensive Income Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date . This ASU amends the effective date of ASU No. 2024-03 to clarify that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption of ASU No. 2024-03 is permitted. The company is currently evaluating the impact of these ASUs on its condensed consolidated financial statements and related disclosures. In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Top …

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13. Employee Benefit Plans The company maintains an unfunded Arrow SERP under which the company will pay supplemental pension benefits to certain employees upon retirement. As of December 31, 2025, there were 9 current and 27 former corporate officers participating in this plan. The Board determines those employees who are eligible to participate in the Arrow SERP. The Arrow SERP, as amended, provides for the pension benefits to be based on a percentage of average final compensation, based on years of participation in the Arrow SERP. The Arrow SERP permits early retirement, with payments at a reduced rate, based on age and years of service subject to a minimum retirement age of 55. The company uses a December 31 measurement date for the Arrow SERP benefit plan. Pension information for the years ended December 31 is as follows: Arrow SERP (thousands) 2025 2024 Accumulated benefit obligation $ 84,414 $ 74,530 Changes in projected benefit obligation: Projected benefit obligation at beginning of year 83,032 88,084 Service cost 2,748 3,193 Interest cost 4,399 4,081 Actuarial loss (gain) 3,584 (6,602) Benefits paid (6,206) (5,724) Projected benefit obligation at end of year 87,557 83,032 Funded status $ (87,557) $ (83,032) Amounts recognized in the company's consolidated balance sheets: Current liabilities $ (7,083) $ (6,168) Noncurrent liabilities (80,474) (76,864) Net liability at end of year $ (87,557) $ (83,032) Components of net periodic pension cost: Service cost $ 2,748 $ 3, …

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9. Restructuring, Integration, and Other The following table presents the components of the restructuring, integration, and other charges for the years ended December 31: (thousands) 2025 2024 2023 Restructuring, integration and related costs Operating Expense Efficiency Plan costs (a) $ 106,082 $ 10,279 $ Other plans 2,075 3,848 8,877 Other expenses Operating expense reduction costs not related to restructuring initiatives (b) (1,418) 84,510 19,077 Environmental remediation liabilities 4,463 756 23,336 Early lease termination costs 1,546 6,814 29,400 Consulting costs (c) 25,306 Other charges 3,371 11,404 3,226 $ 116,119 $ 142,917 $ 83,916 (a) See details related to the Operating Expense Efficiency Plan discussed below. (b) Primarily related to employee severance and benefit costs. As of December 31, 2025, the accrued liabilities related to these costs totaled $15.7 million and substantially all accrued amounts are expected to be spent in cash within two year s. (c) Consulting costs are related to operating expense reduction costs not related to the restructuring initiative. Operating Expense Efficiency Plan On October 31, 2024, in response to evolving business needs and as part of an initiative to optimize operating expenses, the company announced a multi-year restructuring plan (the Operating Expense Efficiency Plan or the Plan). The Plan is designed to improve operational efficiency through the following measures: (i) reorganizing and consolidating certain areas of the com …

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16. Segment and Geographic Information The company is a global provider of products, services, and solutions to industrial and commercial users of electronic components and enterprise computing solutions. The company organizes its operations by geographic region and global business lines. The companys operating segments reflect the way the chief executive officer (CODM as defined in ASC 280, Segment Reporting ) reviews financial information, makes operating decisions and assesses business performance. In identifying operating segments, the company also considers its annual budgeting and forecasting process, management reporting structure, the basis on which management compensation is determined, information presented to the Board of Directors and similarities such as the nature of products, the level of shared products, technology and other resources, and customer base. The company concluded that identifying operating segments by major geographic region within each of the companys major businesses was consistent with the objectives of ASC 280 and it has aggregated geographic operating segments within global components and global ECS based on similar characteristics including long-term financial performance, the nature of services provided, internal process for delivering those services, and types of customers. In the third quarter of 2025, in conjunction with Sean Kerinss separation from the company, William (Bill) F. Austen was appointed as the companys Interim President and …

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1. Summary of Significant Accounting Policies Principles of Consolidation The consolidated financial statements of Arrow Electronics, Inc. (the company or Arrow) include the accounts of the company, its majority-owned subsidiaries, and Arrow EMEA Funding Corp B.V. (see Note 4). All significant intercompany transactions are eliminated. Use of Estimates The preparation of financial statements in conformity with GAAP in the United States requires the company to make significant estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Cash and Cash Equivalents Cash equivalents consist of highly liquid investments, which are readily convertible into cash, with original maturities of three months or less. Trade Accounts Receivable Trade accounts receivable are reported at amortized cost, net of the allowance for credit losses in the consolidated balance sheets. The allowance for credit losses is a valuation account that is deducted from the receivables amortized cost basis to present the net amount expected to be collected. Receivables are written off against the allowance when management believes the receivable balance is confirmed to be uncollectible. Management estimates the allowance for credit losses using relevant available information about expected credit losses and an age-based reserve model. Inputs to the model include information about historical credit lo …

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10. Shareholders Equity Accumulated Other Comprehensive Loss The following table presents the changes in Accumulated other comprehensive loss, excluding noncontrolling interests: Gain Gain (Loss) on Foreign (Loss) on Foreign Exchange Interest Rate Currency Contracts Swaps Translation Designated as Designated as Post-retirement Adjustment and Net Investment Cash Flow Expense (thousands) Other, Net (a) Hedges, Net (b) Hedges, Net (b) Items, Net Total Balance as of December 31, 2023 $ (349,042) $ 12,159 $ 30,638 $ 8,206 $ (298,039) Other comprehensive income (loss) before reclassifications (222,489) 12,996 (685) 5,027 (205,151) Amounts reclassified into income (317) (5,137) (452) (173) (6,079) Net change in accumulated other comprehensive income (loss) for the year ended December 31, 2024 (222,806) 7,859 (1,137) 4,854 (211,230) Balance as of December 31, 2024 (571,848) 20,018 29,501 13,060 (509,269) Other comprehensive income (loss) before reclassifications 394,450 (9,123) (2,723) 382,604 Amounts reclassified into income 3,822 (2,605) (1,706) 514 25 Net change in accumulated other comprehensive income (loss) for the year ended December 31, 2025 398,272 (11,728) (1,706) (2,209) 382,629 Balance as of December 31, 2025 $ (173,576) $ 8,290 $ 27,795 $ 10,851 $ (126,640) (a) Foreign currency translation adjustment includes intra-entity foreign currency transactions that are of a long-term investment nature of $4.4 million and $(52.9) million for 2025 and 2024, respectively. (b) For ad …

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