Ingram Micro 2011 Annual Report Download - page 59

INGRAM MICRO INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In 000s, except per share data)
We sell products purchased from many vendors, but generated approximately 21%, 23% and 24% of our net
sales in 2011, 2010 and 2009, respectively, from products purchased from Hewlett-Packard Company. There
were no other vendors whose products represented 10% or more of our net sales for each of the last three fiscal
years.
Warranties
Our suppliers generally warrant the products distributed by us and allow returns of defective products,
including those that have been returned to us by our customers. We generally do not independently warrant the
products we distribute; however, local laws might impose warranty obligations upon distributors (such as in the
case of supplier liquidation). We are obligated to provide warranty protection for sales of certain IT products
within the European Union (“EU”) for up to two years as required under the EU directive where vendors have
not affirmatively agreed to provide pass-through protection. In addition, we warrant the services we provide,
products that we build-to-order from components purchased from other sources, and our own branded products.
Provision for estimated warranty costs is recorded at the time of sale and periodically adjusted to reflect actual
experience. Warranty expense and the related obligations are not material to our consolidated financial
statements.
Foreign Currency Translation and Remeasurement
Financial statements of our foreign subsidiaries, for which the functional currency is the local currency, are
translated into U.S. dollars using the exchange rate at each balance sheet date for assets and liabilities and a
weighted average exchange rate for each period for statement of income items. Translation adjustments are
recorded in accumulated other comprehensive income, a component of stockholders’ equity. The functional
currency of a few operations within our EMEA, Asia-Pacific and Latin America regions is the U.S. dollar;
accordingly, the monetary assets and liabilities of these subsidiaries are translated into U.S. dollars at the
exchange rate in effect at the balance sheet date. Revenues, expenses, gains or losses are translated at the average
exchange rate for the period, and nonmonetary assets and liabilities are translated at historical rates. The resultant
remeasurement gains and losses of these operations as well as gains and losses from foreign currency
transactions are included in the consolidated statement of income.
Cash and Cash Equivalents
We consider all highly liquid investments with original maturities of three months or less from the date of
purchase to be cash equivalents.
Book overdrafts of $511,172 and $517,107 as of December 31, 2011 and January 1, 2011, respectively,
represent checks issued on disbursement bank accounts but not yet paid by such banks. These amounts are
classified as accounts payable in our consolidated balance sheet. We typically fund these overdrafts through
normal collections of funds or transfers from bank balances at other financial institutions. Under the terms of our
facilities with the banks, the respective financial institutions are not legally obligated to honor the book overdraft
balances as of December 31, 2011 and January 1, 2011, or any balance on any given date.
Trade Accounts Receivable Factoring Programs
We have an uncommitted factoring program in North America under which trade accounts receivable of one
large customer may be sold, without recourse, to a financial institution. The program’s total amount of
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