Ingram Micro 2013 Annual Report Download - page 19

Table of Contents
various governing bodies, including the Financial Accounting Standards Board and the SEC, who create and interpret appropriate accounting standards.
Future periodic assessments required by current or new accounting standards may result in additional noncash charges and/or changes in presentation or
disclosure. A change from current accounting standards could have a significant adverse effect on our reported financial position or results of operations.
Our quarterly results have fluctuated significantly. Our quarterly operating results have fluctuated significantly in the past and will likely continue
to do so in the future as a result of:
•general changes in economic or geopolitical conditions, including changes in legislation or regulatory environments in which we operate;
•competitive conditions in our industry, which may impact the prices charged and terms and conditions imposed by our suppliers and/or competitors
and the prices we charge our customers, which in turn may negatively impact our revenues and/or gross margins;
•seasonal variations in the demand for our products and services, which historically have included lower demand in Europe during the summer
months, worldwide pre-holiday stocking in the retail channel during the September-to-December period and the seasonal increase in demand for our
North American fee-based logistics services in the fourth quarter, which affects our operating expenses and gross margins;
•changes in product mix, including entry or expansion into new markets, as well as the exit or retraction of certain business;
•the impact of and possible disruption caused by integration and reorganization of our businesses and efforts to improve our IT capabilities, as well as
the related expenses and/or charges;
•currency fluctuations in countries in which we operate;
•variations in our levels of excess inventory and doubtful accounts, and changes in the terms of vendor-sponsored programs such as price protection
and return rights;
•changes in the level of our operating expenses;
•the impact of acquisitions and divestitures;
•variations in the mix of profits between multiple tax jurisdictions, including losses in certain tax jurisdictions in which we are not able to record a tax
benefit, as well as changes in assessments of uncertain tax positions or changes in the valuation allowances on our deferred tax assets, which could
affect our provision for taxes and effective tax rate;
•the occurrence of unexpected events or the resolution of existing uncertainties, including, but not limited to, litigation or regulatory matters;
•the loss or consolidation of one or more of our major suppliers or customers;
•product supply constraints; and
•interest rate fluctuations and/or credit market volatility, which may increase our borrowing costs and may influence the willingness or ability of
customers and end-users to purchase products and services.
These historical variations in our business may not be indicative of future trends in the near term. Our narrow operating margins may magnify the
impact of the foregoing factors on our operating results. We believe that you should not rely on period-to-period comparisons of our operating results as an
indication of future performance. In addition, the results of any quarterly period are not indicative of results to be expected for a full fiscal year.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 2. PROPERTIES
Our corporate headquarters is located in Santa Ana, California. We support our global operations through an extensive sales and administrative office
and distribution network throughout North America, Europe, Asia-Pacific (including MEA), and Latin America. We operate 132 distribution centers
worldwide (greater than 5,000 square feet in size).
We lease substantially all our facilities on varying terms. We do not anticipate any material difficulties with the renewal of any of our leases when they
expire or in securing replacement facilities on commercially reasonable terms. We also own several facilities, the most significant of which are two of our
distribution centers in Plainfield, Indiana and part of our office/distribution facilities in Straubing, Germany.
ITEM 3. LEGAL PROCEEDINGS
Our Brazilian subsidiary has received a number of tax assessments including the following: (1) a 2005 Federal import tax assessment claiming certain
commercial taxes totaling Brazilian Reais 12,714 ($5,401 at December 28, 2013 exchange rates) were due on the import of software acquired from
international vendors for the period January through September of 2002; (2) a 2007 Sao Paulo Municipal tax assessment claiming Brazilian Reais 29,111
($12,368 at December 28, 2013 exchange rates) of service taxes were due on the resale of acquired software covering years 2002 through 2006, plus Brazilian
Reais 25,972 ($11,034 at
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