Ingram Micro 2013 Annual Report Download - page 49

Table of Contents
INGRAM MICRO INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In 000s, except per share data)
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We use the Black-Scholes option-pricing model to determine the fair value of stock options and the closing market price of our common stock on the
date of the grant to determine the fair value of our restricted stock and restricted stock units. Stock-based compensation expense is recorded for all stock
options, restricted stock and restricted stock units that are ultimately expected to vest as the requisite service is rendered. We recognize these compensation
costs, net of an estimated forfeiture rate, on a straight-line basis over the requisite service period of the award, which is the vesting term of outstanding stock-
based awards. We estimate the forfeiture rate based on our historical experience during the preceding five fiscal years.
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In July 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2013-11, 
, which requires a
reporting entity to present an unrecognized tax benefit as a liability in the financial statements separate from deferred tax assets if a net operating loss
carryforward, a similar tax loss, or a tax credit carryforward is not available as of the reporting date to settle taxes that would result from the disallowance of
the tax position or if a reporting entity does not intend to use the deferred tax asset for such purpose. This guidance will be effective for us beginning December
29, 2013, the first day of fiscal year 2014 and is not expected to have a material impact on our consolidated financial statements.
Note 3 — Reorganization Costs
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In 2013, we incurred net reorganization costs primarily relating to a number of key initiatives, including: (a) the integration of BrightPoint operations
into Ingram Micro, resulting in headcount reductions and the closure of certain BrightPoint facilities, and the exit of a portion of our Australian offices in Asia-
Pacific; (b) headcount reductions in Europe to respond to the current market environment, and (c) the transition of certain transaction-oriented service and
support functions to shared services centers.
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In 2012, we implemented headcount reductions primarily in Australia and New Zealand to better align our operating expenses with each country’s lower
sales volumes. Additionally, we moved certain transactions-oriented service and support functions to global shared service centers located in Asia-Pacific and
Europe. We closed our in-country Argentina operations in Latin America and are now servicing this market through our export operations in Miami. Associated
with these actions, we incurred net reorganization costs related to employee termination benefits.
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In 2011, we implemented a cost-reduction program related to our Australian operations in Asia-Pacific primarily to align our level of operating expenses
with declines in sales volume and the loss of market share in that country. We also implemented headcount reductions in certain operations in North America,
Europe and Latin America.
In 2009 and earlier, we incurred costs to integrate past acquisitions, and launched various other outsourcing and optimization plans, to improve
operating efficiencies and better align our level of operating expenses with the decline in sales volumes resulting from the economic downturn in that period.
While these reorganization actions were completed prior to the periods included herein, future cash outlays are required for future lease payments related
to exited facilities.
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