UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the quarterly period ended
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ARROW ELECTRONICS, INC.
Table of Contents
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Management’s Discussion and Analysis of Financial Condition and Results of Operations | 24 | ||
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2
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
ARROW ELECTRONICS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except per share data)
(Unaudited)
Quarter Ended | |||||||
March 30, | April 1, | ||||||
| 2024 |
| 2023 |
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Sales | $ | | $ | | |||
Cost of sales |
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Gross profit |
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Operating expenses: |
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Selling, general, and administrative |
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Depreciation and amortization |
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Restructuring, integration, and other |
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Operating income |
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Equity in losses of affiliated companies |
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Gain on investments, net |
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Employee benefit plan expense, net |
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Interest and other financing expense, net |
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Income before income taxes |
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Provision for income taxes |
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Consolidated net income |
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Noncontrolling interests |
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Net income attributable to shareholders | $ | | $ | | |||
Net income per share: |
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Basic | $ | | $ | | |||
Diluted | $ | | $ | | |||
Weighted-average shares outstanding: |
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Basic |
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Diluted |
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See accompanying notes.
3
ARROW ELECTRONICS, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
(Unaudited)
Quarter Ended | |||||||||||
March 30, | April 1, | ||||||||||
| 2024 |
| 2023 |
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Consolidated net income | $ | | $ | 275,325 | |||||||
Other comprehensive income (loss): |
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Foreign currency translation adjustment and other, net of taxes |
| ( |
| 11,285 | |||||||
Gain (loss) on foreign exchange contracts designated as net investment hedges, net of taxes |
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| (433) | |||||||
Gain (loss) on interest rate swaps designated as cash flow hedges, net of taxes |
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| (3,709) | |||||||
Employee benefit plan items, net of taxes |
| ( |
| (272) | |||||||
Other comprehensive (loss) income |
| ( |
| 6,871 | |||||||
Comprehensive (loss) income |
| ( |
| 282,196 | |||||||
Less: Comprehensive (loss) income attributable to noncontrolling interests |
| ( |
| 4,652 | |||||||
Comprehensive (loss) income attributable to shareholders | $ | ( | $ | 277,544 |
See accompanying notes.
4
ARROW ELECTRONICS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands except par value)
(Unaudited)
March 30, | December 31, | ||||||
| 2024 |
| 2023 |
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ASSETS |
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Current assets: |
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Cash and cash equivalents | $ | | $ | | |||
Accounts receivable, net |
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Inventories |
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Other current assets |
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Total current assets |
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Property, plant, and equipment, at cost: |
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Land |
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Buildings and improvements |
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Machinery and equipment |
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Less: Accumulated depreciation and amortization |
| ( |
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Property, plant, and equipment, net |
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Investments in affiliated companies |
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Intangible assets, net |
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Goodwill |
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Other assets |
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Total assets | $ | | $ | | |||
LIABILITIES AND EQUITY |
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Current liabilities: |
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Accounts payable | $ | | $ | | |||
Accrued expenses |
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Short-term borrowings, including current portion of long-term debt |
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Total current liabilities |
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Long-term debt |
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Other liabilities |
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Contingencies (Note L) | |||||||
Equity: |
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Shareholders’ equity: |
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Common stock, par value $ |
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Authorized - |
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Issued - |
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Capital in excess of par value |
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Treasury stock ( |
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Retained earnings |
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Accumulated other comprehensive loss |
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Total shareholders’ equity |
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Noncontrolling interests |
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Total equity |
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Total liabilities and equity | $ | | $ | |
See accompanying notes.
5
ARROW ELECTRONICS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Quarter Ended | |||||||
March 30, | April 1, | ||||||
| 2024 |
| 2023 |
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Cash flows from operating activities: |
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Consolidated net income | $ | | $ | | |||
Adjustments to reconcile consolidated net income to net cash provided by operations: |
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Depreciation and amortization |
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Amortization of stock-based compensation |
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Equity in losses of affiliated companies |
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Deferred income taxes |
| ( |
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Loss (gain) on investments, net |
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Other |
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Change in assets and liabilities, net of effects of acquired businesses: |
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Accounts receivable, net |
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Inventories |
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Accounts payable |
| ( |
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Accrued expenses |
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Other assets and liabilities |
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Net cash provided by operating activities |
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Cash flows from investing activities: |
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Acquisition of property, plant, and equipment |
| ( |
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Other |
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Net cash used for investing activities |
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Cash flows from financing activities: |
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Change in short-term and other borrowings |
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Proceeds from long-term bank borrowings, net |
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Net proceeds from note offering |
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Redemption of notes |
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Proceeds from exercise of stock options |
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Repurchases of common stock |
| ( |
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Net cash used for financing activities |
| ( |
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Effect of exchange rate changes on cash |
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Net increase in cash and cash equivalents |
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Cash and cash equivalents at beginning of period | | | |||||
Cash and cash equivalents at end of period | $ | | $ | |
See accompanying notes.
6
ARROW ELECTRONICS, INC.
CONSOLIDATED STATEMENTS OF EQUITY
(In thousands)
(Unaudited)
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| Accumulated |
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Common | Capital in | Other | |||||||||||||||||||
Stock at Par | Excess of Par | Treasury | Retained | Comprehensive | Noncontrolling | ||||||||||||||||
| Value |
| Value | Stock | Earnings |
| Loss | Interests | Total | ||||||||||||
Balance at December 31, 2023 | $ | | $ | | $ | ( | $ | | $ | ( | $ | | $ | | |||||||
Consolidated net income (loss) |
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Other comprehensive loss |
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Amortization of stock-based compensation |
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Shares issued for stock-based compensation awards |
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Repurchases of common stock |
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Balance at March 30, 2024 | $ | | $ | | $ | ( | $ | | $ | ( | $ | | $ | |
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| Accumulated |
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Common | Capital in | Other | |||||||||||||||||||
Stock at Par | Excess of Par | Treasury | Retained | Comprehensive | Noncontrolling | ||||||||||||||||
Value | Value | Stock | Earnings |
| Loss | Interests | Total | ||||||||||||||
Balance at December 31, 2022 | $ | | $ | | $ | ( | $ | | $ | ( | $ | | $ | | |||||||
Consolidated net income |
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Other comprehensive income |
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Amortization of stock-based compensation |
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Shares issued for stock-based compensation awards |
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Repurchases of common stock |
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Balance at April 1, 2023 | $ | | $ | | $ | ( | $ | | $ | ( | $ | | $ | |
See accompanying notes.
7
ARROW ELECTRONICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
8
ARROW ELECTRONICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note A – Basis of Presentation
The accompanying consolidated financial statements of Arrow Electronics, Inc. (the “company”) were prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and reflect all adjustments of a normal recurring nature, which are, in the opinion of management, necessary for a fair presentation of the consolidated financial position and results of operations at, and for the periods presented. The consolidated results of operations for the interim periods are not necessarily indicative of results for the full year.
These consolidated financial statements do not include all of the information or notes necessary for a complete presentation and, accordingly, should be read in conjunction with the company’s audited consolidated financial statements and accompanying notes for the year ended December 31, 2023, as filed in the company’s Annual Report on Form 10-K.
Quarter End
The company operates on a quarterly calendar that closes on the Saturday closest to the end of the calendar quarter, except for the fourth quarter, which closes on December 31, 2024.
Reclassification
Certain prior period amounts were reclassified to conform to the current period presentation. These reclassifications did not have a material impact on previously reported amounts.
Note B – Impact of Recently Issued Accounting Standards
In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). Upon adoption of ASU 2023-09, the company will disclose specific new categories in its income tax rate reconciliation and provide additional information for reconciling items above a quantitative threshold. The company will also disclose the amount of income taxes paid disaggregated by federal, state, and foreign taxes, and also disaggregated by individual jurisdictions in which income taxes paid were above a threshold. The company expects these amendments will first be applied in the company’s annual report on form 10-K for the fiscal year ending December 31, 2025, on a prospective basis.
In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”). Upon adoption of ASU 2023-07, the company will disclose significant segment expenses, the title and position of the chief operating decision maker (“CODM”), and an explanation of how the reported measure of segment profit or loss is used by the CODM to assess segment performance and make resource allocation decisions. These amendments will first be applied in the company’s annual report on form 10-K for the fiscal year ending December 31, 2024, and will be applied retrospectively for all prior periods presented in the financial statements.
9
ARROW ELECTRONICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note C – 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.
Goodwill of companies acquired, allocated to the company’s reportable segments, is as follows:
| Global |
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(thousands) | Components | Global ECS | Total | ||||||
Balance as of December 31, 2023 (a) | $ | | $ | | $ | | |||
Acquisitions | | | | ||||||
Foreign currency translation adjustment |
| ( |
| ( |
| ( | |||
Balance as of March 30, 2024 (a) | $ | | $ | | $ | |
(a) | The total carrying value of goodwill as of March 30, 2024, and December 31, 2023 in the table above is reflected net of $ |
Intangible assets, net, are comprised of the following as of March 30, 2024:
| Gross |
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Carrying | Accumulated | ||||||||
(thousands) | Amount | Amortization | Net | ||||||
Customer relationships | $ | | $ | ( | $ | | |||
Amortizable trade name |
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| ( |
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$ | | $ | ( | $ | |
Intangible assets, net, are comprised of the following as of December 31, 2023:
| Gross |
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Carrying | Accumulated | ||||||||
(thousands) | Amount | Amortization | Net | ||||||
Customer relationships | $ | | $ | ( | $ | | |||
Amortizable trade name |
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| ( |
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$ | | $ | ( | $ | |
During the first quarter of 2024 and 2023, the company recorded amortization expense related to identifiable intangible assets of $
10
ARROW ELECTRONICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note D – Investments in Affiliated Companies
The company owns a
The following table presents the company’s investment in affiliated companies:
| March 30, |
| December 31, | |||
(thousands) | 2024 | 2023 | ||||
Marubun/Arrow | $ | | $ | | ||
Other |
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$ | | $ | |
The equity in losses of affiliated companies consists of the following:
Quarter Ended | ||||||
March 30, | April 1, | |||||
(thousands) |
| 2024 |
| 2023 | ||
Marubun/Arrow | $ | ( | $ | ( | ||
Other |
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$ | ( | $ | ( |
Under the terms of various joint venture agreements, the company is required to pay its pro-rata share of the third-party debt of the joint ventures in the event that the joint ventures are unable to meet their obligations. There were
Note E – Accounts Receivable
Accounts receivable, net, consists of the following:
March 30, | December 31, | |||||
(thousands) |
| 2024 |
| 2023 | ||
Accounts receivable | $ | | $ | | ||
Allowance for credit losses |
| ( |
| ( | ||
Accounts receivable, net | $ | | $ | |
The following table is a rollforward for the company’s allowance for credit losses:
Quarter Ended | ||||||
March 30, | April 1, | |||||
(thousands) |
| 2024 |
| 2023 | ||
Balance at beginning of period | $ | | $ | | ||
Charged to income |
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Translation adjustments |
| ( |
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Write-offs |
| ( |
| ( | ||
Balance at end of period | $ | | $ | |
The company monitors the current credit condition of its customers in estimating the expected credit losses and has not experienced significant changes in customers’ payment trends or significant deterioration in customers’ credit risk as of March 30, 2024.
11
ARROW ELECTRONICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
EMEA Asset Securitization
The company has an EMEA asset securitization program under which it continuously sells its interest in designated pools of trade accounts receivable of certain of its subsidiaries in the EMEA region at a discount to a special purpose entity, which in turn sells certain of the receivables to unaffiliated financial institutions and conduits administered by such unaffiliated financial institutions (“unaffiliated financial institutions”) on a monthly basis. The company may sell up to €
Sales of accounts receivable to unaffiliated financial institutions under the EMEA asset securitization program:
Quarter Ended | ||||||
March 30, | April 1, | |||||
(thousands) |
| 2024 |
| 2023 | ||
EMEA asset securitization, sales of accounts receivable | $ | | $ | |
Receivables sold to unaffiliated financial institutions under the program are excluded from “Accounts receivable, net” on the company’s consolidated balance sheets, and cash receipts are reflected in the “Cash provided by operating activities” section of the consolidated statements of cash flows. The purchase price is paid in cash when the receivables are sold. Certain unsold receivables held by Arrow EMEA Funding Corp B.V. are pledged as collateral to unaffiliated financial institutions. These unsold receivables are included in “Accounts receivable, net” on the company’s consolidated balance sheets.
The company continues servicing the receivables which were sold and in exchange receives a servicing fee under the program. The company does not record a servicing asset or liability on the company’s consolidated balance sheets as the company estimates that the fee it receives to service these receivables approximates the fair market compensation to provide the servicing activities.
Other amounts related to the EMEA asset securitization program:
March 30, | December 31, | |||||
(thousands) |
| 2024 |
| 2023 | ||
Receivables sold to unaffiliated financial institutions that were uncollected | $ | | $ | | ||
Collateralized accounts receivable held by Arrow EMEA funding Corp B.V. |
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Any accounts receivable held by Arrow EMEA Funding Corp B.V. would likely not be available to other creditors of the company in the event of bankruptcy or insolvency proceedings if there are outstanding balances under the EMEA asset securitization program. The assets of the special purpose entity cannot be used by the company for general corporate purposes. Additionally, the financial obligations of Arrow EMEA Funding Corp B.V. to the unaffiliated financial institutions under the program are limited to the assets it owns and there is no recourse to Arrow Electronics, Inc. for receivables that are uncollectible as a result of an account debtor’s insolvency or inability to pay.
12
ARROW ELECTRONICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The EMEA asset securitization program includes terms and conditions that limit the incurrence of additional borrowings and require that certain financial ratios be maintained at designated levels. As of March 30, 2024, the company was in compliance with all such financial covenants.
Factoring
In the normal course of business, certain of the company’s subsidiaries have factoring agreements to sell, with limited or no recourse, selected trade accounts receivable to financial institutions and accounts for these transactions as sales of the related receivables. The receivables are excluded from “Accounts receivable, net” on the company’s consolidated balance sheets and cash receipts are reflected as “Cash provided by operating activities” on the consolidated statements of cash flows. The company typically does not retain financial or legal interests in these receivables. Factoring fees for the sales of accounts receivables are included in “Interest and other financing expense, net” in the consolidated statements of operations. The company continues servicing the receivables which were sold.
Sales of trade accounts receivable under the company’s factoring programs:
Quarter Ended | ||||||
March 30, | April 1, | |||||
(thousands) | 2024 | 2023 | ||||
Sales of accounts receivable under the factoring programs | $ | | $ | |
Other amounts under the company’s factoring programs:
March 30, | December 31, | |||||
(thousands) | 2024 | 2023 | ||||
Receivables sold under the factoring programs that were uncollected | $ | | $ | |
Note F – Supplier Finance Programs
At the request of certain of the company’s suppliers, the company has entered into agreements (“supplier finance programs”) with third-party finance providers, which facilitate the participating suppliers’ ability to sell their receivables from the company to the third-party financial institutions, at the sole discretion of the suppliers. For agreeing to participate in these programs, the company seeks to secure improved standard payment terms with its suppliers. The company is not involved in negotiating terms of the arrangements between its suppliers and the financial institutions and has no economic interest in a supplier’s decision to enter into these agreements, or sell receivables from the company. The company’s rights and obligations to its suppliers, including amounts due, are not impacted by suppliers’ decisions to sell amounts under the arrangements. However, the company agrees to make all payments to the third-party financial institutions, and the company’s right to offset balances due from suppliers against payment obligations is restricted by the agreements for those payment obligations that have been sold by suppliers. As of March 30, 2024, and December 31, 2023, the company had $
13
ARROW ELECTRONICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note G – Debt
Short-term borrowings, including current portion of long-term debt, consist of the following:
March 30, | December 31, | |||||
(thousands) |
| 2024 |
| 2023 | ||
$ | | $ | | |||
Commercial paper |
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Other short-term borrowings |
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$ | | $ | |
The company has $
The company has a commercial paper program, and the maximum aggregate balance of commercial paper outstanding may not exceed the borrowing capacity of $
Long-term debt consists of the following:
March 30, | December 31, | |||||
(thousands) |
| 2024 |
| 2023 | ||
Revolving Credit Facility | $ | | $ | | ||
North American asset securitization program | | | ||||
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Other obligations with various interest rates and due dates |
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$ | | $ | |
(a) | Upon issuance of the |
(b) | In April 2024, the company completed the sale of $ |
The
14
ARROW ELECTRONICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The estimated fair market value of long-term debt, using quoted market prices, is as follows:
March 30, | December 31, | |||||
(thousands) |
| 2024 |
| 2023 | ||
$ | | $ | | |||
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The carrying amount of the company’s other short-term borrowings, uncommitted lines of credit, revolving credit facility,
The company has a $
The company has a North American asset securitization program collateralized by accounts receivable of certain of its subsidiaries. The company may borrow up to $
The company had $
Both the revolving credit facility and North American asset securitization program include terms and conditions that limit the incurrence of additional borrowings and require that certain financial ratios be maintained at designated levels. As of March 30, 2024, the company was in compliance with all such financial covenants.
Interest and dividend income of $
15
ARROW ELECTRONICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note H – Financial Instruments Measured at Fair Value
Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The company utilizes a fair value hierarchy, which maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. The fair value hierarchy has three levels of inputs that may be used to measure fair value:
Level 1 | Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. |
Level 2 | Quoted prices in markets that are not active; or other inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability. |
Level 3 | Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable. |
The following table presents assets (liabilities) measured at fair value on a recurring basis at March 30, 2024:
(thousands) |
| Balance Sheet Location |
| Level 1 |
| Level 2 |
| Level 3 |
| Total | ||||
Cash equivalents (a) |
| Cash and cash equivalents | $ | | $ | | $ | | $ | | ||||
Equity investments (b) |
| Other assets |
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Foreign exchange contracts designated as net investment hedges |
| Other assets / other current assets |
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| | ||||
$ | | $ | | $ | | $ | |
The following table presents assets (liabilities) measured at fair value on a recurring basis at December 31, 2023:
(thousands) |
| Balance Sheet Location |
| Level 1 |
| Level 2 |
| Level 3 |
| Total | ||||
Cash equivalents (a) |
| Cash and cash equivalents | $ | | $ | | $ | | $ | | ||||
Equity investments (b) |
| Other assets |
| |
| |
| |
| | ||||
Interest rate swap designated as fair value hedge |
| Other liabilities |
| |
| ( |
| |
| ( | ||||
Foreign exchange contracts designated as net investment hedges |
| Other assets / other current assets |
| |
| |
| |
| | ||||
$ | | $ | | $ | | $ | |
(a) | Cash equivalents include highly liquid investments with an original maturity of less than three months. |
(b) | The company has an |
Assets and liabilities that are measured at fair value on a nonrecurring basis relate primarily to goodwill and identifiable intangible assets (refer to Note C). The company tests these assets for impairment if indicators of potential impairment exist or at least annually if indefinite-lived.
Derivative Instruments
The company uses various financial instruments, including derivative instruments, for purposes other than trading. Certain derivative instruments are designated at inception as hedges and measured for effectiveness both at inception and on an ongoing basis. Derivative instruments not designated as hedges are carried at fair value on the consolidated balance sheets with changes in fair value recognized in earnings.
16
ARROW ELECTRONICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Interest Rate Swaps
The company manages the risk of variability in interest rates of future expected debt issuances by entering into various forward-starting interest rate swaps, designated as cash flow hedges. Changes in fair value of interest rate swaps designated as cash flow hedges are recorded in the shareholders’ equity section in the company’s consolidated balance sheets in “Accumulated other comprehensive loss” and will be reclassified into income over the life of the anticipated debt issuance or in the period the hedged forecasted cash flows are deemed no longer probable to occur. Reclassified gains and losses are recorded within the line item “Interest and other financing expense, net” in the consolidated statements of operations. The fair value of interest rate swaps are estimated using a discounted cash flow analysis on the expected cash flows of each derivative using observable inputs, including interest rate curves and credit spreads.
In June 2023, the company terminated its outstanding forward-starting interest rate swaps and received a cash payment of $
The company occasionally enters into interest rate swap transactions, designated as fair value hedges, that convert certain fixed-rate debt to variable-rate debt in order to manage its targeted mix of fixed- and floating-rate debt. For qualifying interest rate fair value hedges, gains or losses on derivatives are included in “Interest and other financing expense, net” in the consolidated statements of operations. The change in fair value of the hedged item attributable to the risk being hedged is reported as an adjustment to its carrying value and is also included in “Interest and other financing expense, net”.
As of December 31, 2023, the company had one outstanding interest rate swap designated as a fair value hedge of its
|
| Notional Amount |
| Interest Rate due |
| Interest Rate due to | |||
Trade Date | Maturity Date | (thousands) | from Counterparty | Counterparty | |||||
February 2023 | March 2026 | $ | | SOFR+ |
The counterparty to the interest rate swap had the option to cancel the swaps after one year, without penalty. In March 2024, the counterparty cancelled the swap and the company de-designated the fair value hedging relationship.
Foreign Exchange Contracts
The company’s foreign currency exposure relates primarily to international transactions where the currency collected from customers can be different from the currency used to purchase the product. The company’s primary exposures to such transactions are denominated primarily in the following currencies: Euro, Indian Rupee, and Chinese Renminbi. The company enters into foreign exchange forward, option, or swap contracts (collectively, the “foreign exchange contracts”) to facilitate the hedging of foreign currency exposures resulting from inventory purchases and sales and mitigate the impact of changes in foreign currency exchange rates related to these transactions. Foreign exchange contracts generally have terms of no more than six months. The company does not enter into foreign exchange contracts for trading purposes. The risk of loss on a foreign exchange contract is the risk of nonperformance by the counterparties, which the company minimizes by limiting its counterparties to major financial institutions. The fair value of the foreign exchange contracts is estimated using foreign currency spot rates and forward rates quotes by third-party financial institutions. The notional amount of the foreign exchange contracts inclusive of foreign exchange contracts designated as a net investment hedge at March 30, 2024 and December 31, 2023 was $
17
ARROW ELECTRONICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Gains and losses related to non-designated foreign currency exchange contracts are recorded in “Cost of sales” on the company’s consolidated statements of operations. Gains and losses related to foreign currency exchange contracts designated as cash flow hedges are recorded in “Cost of sales,” “Selling, general, and administrative,” and “Interest and other financing expense, net” based upon the nature of the underlying hedged transaction, on the company’s consolidated statements of operations. Gains or losses on these contracts are deferred and recognized when the underlying future purchase or sale is recognized or when the corresponding asset or liability is revalued, and were not material to the financial statements for the periods presented.
At March 30, 2024 and December 31, 2023, the following foreign exchange contracts were designated as net investment hedges, hedging a portion of the company’s net investments in subsidiaries with Euro-denominated net assets: