Ingram Micro 2008 Annual Report Download - page 62

The notional amount of forward exchange contracts is the amount of foreign currency bought or sold at
maturity. The notional amount of interest rate swaps is the underlying principal amount used in determining the
interest payments exchanged over the life of the swap. Notional amounts are indicative of the extent of the
Company’s involvement in the various types and uses of derivative financial instruments and are not a measure of
the Company’s exposure to credit or market risks through its use of derivatives.
Credit exposure for derivative financial instruments is limited to the amounts, if any, by which the counter-
parties’ obligations under the contracts exceed the obligations of the Company to the counterparties. The Company
manages the potential risk of credit losses through careful evaluation of counterparty credit standing, selection of
counterparties from a limited group of financial institutions and other contract provisions.
The following table lists the Company’s derivative financial instruments:
Notional
Amounts Estimated Fair Value Notional Amounts Estimated Fair Value
2008 2007
Fiscal Year End
Foreign exchange forward contracts ......... $1,218,450 $ 9,014 $1,419,690 $(12,865)
Interest rate swap ....................... 200,000 (11,754) — —
Fair Value Measurement
Effective December 30, 2007, the first day offiscal 2008, the Company adopted the provisions of Statement of
Financial Accounting Standards No. 157, “Fair Value Measurements” (“FAS 157”). FAS 157 defines fair value,
establishes a framework for measuring fair value in accordance with generally accepted accounting principles and
expands disclosures about fair value measurements. In February 2008, the Financial Accounting Standards Board
issued Staff Position Nos. 157-1 and 157-2, which partially deferred the effective date of FAS 157 for one year for
certain nonfinancial assets and liabilities and removed certain leasing transactions from its scope. The Company
does not expect the implementation of FSP 157-1 and 157-2 to have a material impact on the Company’s
consolidated financial position, results of operations or cash flows. In October 2008, the Financial Accounting
Standards Board issued Staff Position No. 157-3, which clarifies the application of FAS 157 and demonstrates how
the fair value of a financial asset is determined when the market for that financial asset is inactive. FSP 157-3
became effective upon issuance. The implementation of this standard did not have any impact on the Company’s
consolidated financial positions, results of operations or cash flows.
The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and other accrued
expenses approximate fair value because of the short maturity of these items. The carrying amounts of outstanding
debt issued pursuant to credit agreements approximate fair value because interest rates over the term of these
instruments approximate current market interest rates.
Treasury Stock
The Company accounts for repurchased shares of common stock as treasury stock. Treasury shares are
recorded at cost and are included as a component of stockholders’ equity in the Company’s consolidated balance
sheet.
Comprehensive Income (Loss)
Comprehensive income is defined as the change in equity (net assets) of a business enterprise during a period
from transactions and other events and circumstances from nonowner sources and is comprised of net income (loss)
and other comprehensive income (loss).
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INGRAM MICRO INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)