Ingram Micro 2013 Annual Report Download - page 9

Table of Contents
value, or that they will not be revised in such a manner as to adversely impact our ability to obtain price protection. In addition, suppliers may become
insolvent and unable to fulfill their protection obligations to us. We are subject to the risk that our inventory values may decline and protective terms under
supplier agreements may not adequately cover the decline in values. In addition, we distribute a small amount of private label products for which price
protection is not customarily contractually available, for which we do not normally enjoy return rights, and for which we bear certain increased risks. We
manage these risks through pricing and continual monitoring of existing inventory levels relative to customer demand, reflecting our forecasts of future
demand and market conditions. On an ongoing basis, we reduce inventory values for excess and obsolescence to assist in the liquidation of impacted
inventories.
Inventory levels may vary from period to period, due, in part, to differences in actual demand from that forecasted when placing orders, the addition of
new suppliers or new lines with current suppliers, expansion into new product areas and strategic purchases of inventory. In addition, payment terms with
inventory suppliers may vary from time to time, and could result in fewer inventories being financed by suppliers and a greater amount of inventory being
financed by our capital. Our payment patterns can be influenced by incentives, such as early pay discounts offered by suppliers.
Our Trademarks and Service Marks
We own or license various trademarks and service marks, including, among others, “Ingram Micro,” the Ingram Micro logo, “V7” (Video Seven),
“VentureTech Network,” “AVAD,” “Vantex,” “BrightPoint” and “Aptec.” Certain of these marks are registered, or are in the process of being registered, in the
United States and various other countries. Even though our marks are not registered in every country where we conduct business, in many cases we have
acquired rights in those marks because of our continued use of them.
Our Employees
As of December 28, 2013, we employed approximately21,800 associates worldwide (as measured on a full-time equivalent basis). Certain of our
employees in Europe, Asia-Pacific and Latin America are subject to union representation, collective bargaining or similar arrangements. Our success depends
on the talent and dedication of our associates, and we strive to attract, hire, develop, and retain outstanding associates. We believe we realize significant
benefits from having a strong and seasoned management team with many years of experience in the IT and related industries.
Our Corporate Social Responsibility
We introduced our Corporate Social Responsibility initiative three years ago, solidifying our commitment to being an outstanding corporate citizen in all
aspects of our business, including prudent stewardship of our resources, limiting our impact on the environment and maintaining a safe and respectful
workplace. Our associates worldwide continue to show their commitment to saving energy, reducing paper consumption and contributing their time, skills and
financial resources to our communities. Our sustainability commitment is formally captured on our corporate website and in our publicly available baseline
annual report ().
Regulatory Matters
The following disclosure is being made in accordance with Section 219 of the Iran Threat Reduction and Syria Human Rights Act of 2012:
During the quarter ended March 29, 2014, we learned that Aptec, our wholly-owned non-U.S. subsidiary, made two sales during the quarter ended
March 30, 2013, to a reseller which identified its intended customer as Iranian Hospital, which is located in Dubai, United Arab Emirates. These sales by our
subsidiary to the reseller consisted of technology products resulting in revenue to us of approximately $15, with net profits of substantially less than that.
Iranian Hospital is operated by the Iranian Red Crescent Society, a humanitarian aid organization that is a member organization of the International Red
Cross and Red Crescent Federation (“IFRC”). According to its Fundamental Principles, the IFRC requires that all of its member organizations remain
autonomous from government actors. The IFRC has informed us that it does not consider the Iranian Red Crescent Society to be an Iranian government entity,
and that to its knowledge, the Iranian Red Crescent Society is a non-governmental organization with its own general assembly and governing board that is
elected and independent of the government. Neither Iranian Hospital nor the Iranian Red Crescent Society appears on the list of “specially designated nationals
and blocked persons” maintained by the Office of Foreign Assets Control (“OFAC”). However, OFAC has recently given us oral guidance that it believes the
Iranian Red Crescent Society to be wholly owned by the Government of Iran and accordingly part of the Government of Iran. We have blocked further sales to
resellers where Iranian Hospital or Iranian Red Crescent Society is identified as their customer.
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