7536--2/27/2006--ARROW_ELECTRONICS

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{customer, product, revenue}

{regulation, government, change}

{product, liability, claim}

{acquisition, growth, future}

{cost, contract, operation}

{system, service, information}

{debt, indebtedness, cash}

{cost, regulation, environmental}

{operation, international, foreign}

{control, financial, internal}

{capital, credit, financial}

{gas, price, oil}

{product, market, service}

{condition, economic, financial}

A large portion of the company s revenues come from the sale of semiconductors, which is a highly cyclical industry, and an industry down-cycle could have a material adverse effect on the company s business. If the company is unable to maintain its relationships with its suppliers, its business could be materially adversely affected. The company operates in a competitive industry and continues to be under the pressure of eroding gross profit margins, which could have a material adverse effect on the company s business. Products sold by the company may be found to be defective and, as a result, warranty and/or product liability claims may be asserted against the company which may have a material adverse effect on the company. Declines in value and other factors pertaining to the company s inventory could materially adversely affect its business. The company is subject to environmental laws and regulations that could materially adversely affect its business. Products sold by the company may be found to be defective and, as a result, warranty and/or product liability claims may be asserted against the company which may have a material adverse effect on the company. Declines in value and other factors pertaining to the company s inventory could materially adversely affect its business. The company is subject to environmental laws and regulations that could materially adversely affect its business. The company is currently involved in the investigation and remediation of environmental problems at two sites as a result of its Wyle Electronics acquisition, and the company is in litigation related to those sites. The company may not have adequate or cost-effective liquidity or capital resources. The company is currently involved in the investigation and remediation of environmental problems at two sites as a result of its Wyle Electronics acquisition, and the company is in litigation related to those sites. The company may not have adequate or cost-effective liquidity or capital resources. The agreements governing some of the company s financing arrangements contain various covenants and restrictions that limit the discretion of management in operating the business and could prevent the company from engaging in some activities that may be beneficial to its business. The company s failure to have long-term sales contracts may have a material adverse effect on its business. The company s non-U.S. locations, particularly Asia, represent a significant and growing portion of its sales, and consequently, the company is increasingly exposed to risks associated with operating internationally. The agreements governing some of the company s financing arrangements contain various covenants and restrictions that limit the discretion of management in operating the business and could prevent the company from engaging in some activities that may be beneficial to its business. The company s failure to have long-term sales contracts may have a material adverse effect on its business. The company s non-U.S. locations, particularly Asia, represent a significant and growing portion of its sales, and consequently, the company is increasingly exposed to risks associated with operating internationally. In the event the company makes acquisitions, it may not be able to successfully integrate such acquisitions or attain the anticipated benefits. If the company fails to maintain an effective system of internal controls or discovers material weaknesses in its internal controls over financial reporting, it may not be able to report its financial results accurately or timely or detect fraud, which could have a material adverse effect on its business. The Commerce Department may levy substantial fines on the company or may limit its ability to export products. The company relies heavily on its internal information systems which, if not properly functioning, could materially adversely affect the company s business. In the event the company makes acquisitions, it may not be able to successfully integrate such acquisitions or attain the anticipated benefits. If the company fails to maintain an effective system of internal controls or discovers material weaknesses in its internal controls over financial reporting, it may not be able to report its financial results accurately or timely or detect fraud, which could have a material adverse effect on its business. The Commerce Department may levy substantial fines on the company or may limit its ability to export products. The company relies heavily on its internal information systems which, if not properly functioning, could materially adversely affect the company s business.

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7536--2/27/2006--ARROW_ELECTRONICS_INC