Arrow Electronics 2007 Annual Report Download - page 10

8 • ARROW ELECTRONICS, INC. • ANNUAL REPORT 2007
Non-GAAP Financial Information
The noted references in the shareholder letter to operating income and net income per diluted share were each adjusted for certain charges, credits
and losses that we believe impact the comparability of our results of operations. These charges, credits and losses arise out of the company’s
efficiency enhancement initiatives, the company’s acquisitions of other companies, certain income tax related matters, the prepayment of debt and
the write-down of investments. This financial information has not been prepared in accordance with generally accepted accounting principles (GAAP).
The following table sets forth reconciliations of operating income, net income and net income per diluted share, prepared in accordance with GAAP,
to operating income, net income and net income per diluted share, each as adjusted.
We believe that such non-GAAP financial information may be useful to investors to assist in assessing and understanding our operating performance
and the underlying trends in our business because management considers the charges, credits and losses referred to above to be outside our core
operating results. This non-GAAP financial information is among the primary indicators management uses as a basis for evaluating our financial and
operating performance. In addition, our board of directors may use this non-GAAP financial information in evaluating management performance and
setting management compensation.
The presentation of this non-GAAP financial information is not meant to be considered in isolation or as a substitute for, or alternative to, operating
income, net income and net income per diluted share determined in accordance with GAAP. Analysis of results and outlook on a non-GAAP basis
should be used as a complement to, and in conjunction with, data presented in accordance with GAAP.
IN THOUSANDS EXCEPT PER SHARE DATA
Year ended December 31, 2007 2006 2005
Operating income, as reported $686,905 $606,225 $480,258
Restructuring and integration charges 11,745 11,829 12,716
Pre-acquisition warranty claim - 2,837 -
Pre-acquisition environmental matters - 1,449 -
Acquisition indemnification credit - - (1,672)
Operating income, as adjusted $698,650 $622,340 $491,302
Net income, as reported $407,792 $388,331 $253,609
Restructuring and integration charges 7,036 8,977 7,310
Deferred tax adjustment (6,024) - -
Pre-acquisition warranty claim - 1,861 -
Pre-acquisition environmental matters - 867 -
Impact of settlement of tax matters
Income taxes:
2005 and prior - (40,426) -
Interest (net of taxes):
2005 and prior - (2,431) -
Loss on prepayment of debt - 1,558 2,596
Write-down of investment - - 3,019
Acquisition indemnification credit - - (1,267)
Net income, as adjusted $408,804 $358,737 $265,267
Net income per diluted share, as reported $3.28 $3.16 $2.09
Restructuring charges .06 .07 .05
Deferred tax adjustment (.05) - -
Pre-acquisition warranty claim - .02 -
Pre-acquisition environmental matters - .01 -
Impact of settlement of tax matters
Income taxes:
2005 and prior - (.33) -
Interest (net of taxes):
2005 and prior - (.02) -
Loss on prepayment of debt - .01 .01
Write-down of investment - - .03
Acquisition indemnification credit - - -
Net income per diluted share, as adjusted $3.29 $2.92 $2.18