The Americas continue to be the major source of new product development globally and the leading market for supply chain management services. Today, more than 50 percent of Arrow's business in this region is managed through electronic connections with customers, facilitating materials planning and just-in-time delivery of components. Since much of the design activity for new products takes place in North America, our leading technical services and system tools provide early visibility to a customer's component needs. If a customer outsources manufacturing or transfers it overseas, Arrow teams follow that business to the manufacturing location to provide continuous support across the supply chain.

As the region serves global customer demand for design support, Americas Components' largest customer base consists of regionally-based original equipment and contract manufacturing customers who depend on Arrow's products and supply chain management services. Serving these customers requires offering Arrow's full line card of semiconductor and PEMCO (passive, electromechanical, and connector) products. In 2003, building on the successful acquisition of the electronic components division of Pioneer-Standard Electronics, we combined our two product-specific businesses which sold semiconductors and PEMCO products to the same customer base. This change, coupled with the momentum from our merger and improving market conditions, fueled a more than 24 percent sales growth in the region year-over-year.

As Americas Components entered 2004, we announced the formation of Arrow Electronics Components, a combination of Arrow/Bell Components, Arrow Contract Manufacturing Services, and Arrow Components Solutions. Arrow Electronics Components provides products and services to our core original equipment and contract manufacturing customers with dedicated sales teams organized to serve distinct customer segments. With this change, we offer the customized services that our customers expect and the unified demand creation support that our suppliers require in each local market. Arrow Americas Components speeds toward the future as a fast, flexible, and broadline distributor with the resources and capabilities of the world's leading electronic components distributor.