Ingram Micro 2011 Annual Report Download - page 32

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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 is part of our office/distribution
facilities in Straubing, Germany.
ITEM 3. LEGAL PROCEEDINGS
Our Brazilian subsidiary has received a number of tax assessments including: (1) a 2005 Federal import tax
assessment claiming certain commercial taxes totaling Brazilian Reais 12,714 ($6,777 at December 31, 2011
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
($15,518 at December 31, 2011 exchange rates) of service taxes were due on the resale of acquired software
covering years 2002 through 2006, plus Brazilian Reais 25,972 ($13,844 at December 31, 2011 exchange rates)
of associated penalties; and (3) a 2011 Federal income tax assessment, a portion of which claims statutory
penalties totaling Brazilian Reais 15,900 ($8,475 at December 31, 2011 exchange rates) for delays in providing
certain electronic files during the audit of tax years 2008 and 2009, which was conducted through the course of
2011. After working with our advisor in evaluating the 2011 Federal income tax assessment, we believe the
matters raised in the assessment, other than the one noted above, represent a remote risk of loss.
In addition to the amounts assessed, it is possible that we could also be assessed up to Brazilian Reais
26,217 ($13,975 at December 31, 2011 exchange rates) for penalties and interest on the 2005 assessment and up
to Brazilian Reais 101,353 ($54,026 at December 31, 2011 exchange rates) for interest and inflationary
adjustments on the 2007 assessment. After working with our advisors on these matters, we believe we have good
defenses against each matter and do not believe it is probable that we will suffer a material loss for amounts in
the 2007 and the 2011 assessments or any other unassessed amounts noted above. While we will continue to
vigorously pursue administrative and, if applicable, judicial action in defending against the 2005 Federal import
tax assessment, we continue to maintain a reserve for the full amount assessed at December 31, 2011.
In March 2008, we and one of our subsidiaries were named as defendants in a lawsuit arising out of the
bankruptcy of Refco, Inc., and its subsidiaries and affiliates (collectively, “Refco”). The liquidators of numerous
Cayman Island-based hedge funds filed suit (the “Krys action”) against Grant Thornton LLP, Mayer Brown
Rowe & Maw, LLP, Phillipp Bennet, and numerous other individuals and entities. The Krys action alleges that
we and our subsidiary aided and abetted the fraud and breach of fiduciary duty of Refco insiders and others by
participating in loan transactions between the subsidiary and Refco in early 2000 and early 2001, causing damage
to the hedge funds in an unspecified amount. The action is pending in the U.S. District Court for the Southern
District of New York. We have motions to dismiss pending decision in the Krys matter. We intend to continue
vigorously defending the Krys matter and do not expect its final disposition to have a material adverse effect on
our consolidated financial position, results of operations, or cash flows.
ITEM 4. MINE SAFETY DISCLOSURES
Not Applicable.
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