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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K
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(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED JANUARY 1, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ____________ TO ____________ .
COMMISSION FILE NUMBER: 1-12203
INGRAM MICRO INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 62-1644402
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
1600 E. ST. ANDREW PLACE, SANTA ANA, CALIFORNIA 92799-5125
(ADDRESS, INCLUDING ZIP CODE, OF PRINCIPAL EXECUTIVE OFFICES)
(714) 566-1000
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
CLASS A COMMON STOCK, PAR VALUE $.01 PER SHARE
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Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
The aggregate market value of the voting stock held by non-affiliates of
the Registrant at March 27, 2000 was $687,098,684 based on the closing sale
price on such date of $14.6875 per share.
The Registrant had 71,597,655 shares of Class A Common Stock, par value
$.01 per share, and 73,142,787 shares of Class B Common Stock, par value $.01
per share, outstanding at March 27, 2000.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Annual Report to Shareowners for the fiscal year ended
January 1, 2000 are incorporated by reference into Parts I and II of this Annual
Report on Form 10-K. Portions of the Proxy Statement for the Registrant's Annual
Meeting of Shareowners to be held May 17, 2000 are incorporated by reference
into Part III of this Annual Report on Form 10-K.
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PART I
ITEM 1. BUSINESS
In evaluating the business of Ingram Micro Inc., readers should carefully
consider the important factors discussed under Exhibit 99.01 hereto and under
"-- Safe Harbor for Forward-Looking Statements."
OVERVIEW
Ingram Micro Inc. ("Ingram Micro" or the "Company") is the leading
distributor of information technology products and services worldwide. The
Company markets computer hardware, networking equipment, and software products
to more than 175,000 reseller customers in more than 100 countries. The company
also provides logistics and fulfillment services to vendor and reseller
customers. As a distributor, the Company markets its products and services to
resellers and vendors as opposed to marketing directly to end-user customers.
Ingram Micro offers one-stop shopping to its customers by providing a
comprehensive inventory which, on a global basis, consists of more than 280,000
products (as measured by distinct part numbers assigned by manufacturers and
suppliers) from over 1,700 suppliers, including most of the computer industry's
leading hardware manufacturers, networking equipment suppliers, and software
publishers. The Company's broad product offerings include: desktop and notebook
personal computers, servers, and workstations; mass storage devices; CD-ROM
drives; monitors; printers; scanners; modems; networking hubs, routers, and
switches; network interface cards; business application software; entertainment
software; and computer supplies. In addition, to enhance sales and to support
its suppliers and reseller customers, the Company provides a wide range of
outsourcing and value-added programs, such as order fulfillment, tailored
financing programs, channel assembly, systems configuration and marketing
programs. The Company also provides outsourced warehouse and distribution
services for a number of resellers, including Internet-based resellers.
The Company is focused on providing a broad range of products and services,
quick and efficient order fulfillment, and consistent on-time and accurate
delivery to its customers around the world. The Company believes that IMpulse,
the Company's on-line information system, provides a competitive advantage
through real-time worldwide information access and processing capabilities.
IMpulse is a single, standardized, real-time information system and operating
environment, used across substantially all of the Company's worldwide
operations. These on-line information systems, coupled with the Company's
exacting operating procedures in telesales, credit support, customer service,
purchasing, technical support, and warehouse operations, enable the Company to
provide its customers with superior service in an efficient and low cost manner.
The Company's earliest predecessor began business in 1979 as a California
corporation named Micro D, Inc. This company and its parent, Ingram Micro
Holdings Inc. ("Holdings"), grew through a series of acquisitions, mergers, and
internal growth to encompass the Company's current operations. Ingram Micro Inc.
was incorporated in Delaware on April 29, 1996, in order to effect the
reincorporation of the Company in Delaware. Holdings and the successor to Micro
D, Inc. were merged into Ingram Micro Inc. in October 1996.
The Company completed an initial public offering and was split-off, in a
tax-free reorganization (the "Split-Off"), from its former parent, Ingram
Industries Inc.("Ingram Industries"), in November 1996.
THE INDUSTRY
The worldwide information technology products and services distribution
industry generally consists of suppliers and manufacturers ("suppliers"), which
sell directly to distributors, resellers, and end-users; distributors, which
sell to resellers; and resellers, which sell to other resellers and directly to
end-users. A variety of reseller categories exists, including corporate
resellers, value-added resellers or "VARs," systems integrators, original
equipment manufacturers, direct marketers, independent dealers, owner-operated
chains, franchise chains, and computer retailers. Relatively new to this list
are Internet resellers, whose virtual storefronts offer a wide variety of
products and services. Many of these companies are heavily dependent on
distribution partners with the necessary systems and infrastructure in place to
provide fulfillment and other
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services. Different types of resellers are defined and distinguished by the
end-user market they serve, such as large corporate accounts, small and
medium-sized businesses, or home users, and by the level of value they add to
the basic products they sell. Distributors generally sell only to resellers and
purchase a wide range of products in bulk directly from manufacturers.
Characteristics of the local reseller environment, as well as other factors
specific to a particular country or region, have shaped the evolution of
distribution models in different countries.
Based on a June 1999 report by market researcher International Data Corp.,
the growth of the information technology products and services distribution
industry continues to exceed the growth of the computer industry as a whole.
Suppliers are seeking to outsource an increasing portion of certain functions
such as distribution, service, and technical support to the distribution channel
to minimize costs and focus on their core capabilities in manufacturing, product
development, and marketing. Resellers are depending on distributors for more of
their product, marketing, and technical support needs. This is due to growing
product complexity, shorter product life cycles and an increasing number of
information technology products fueled by the emergence of open systems
architecture and the recognition of certain industry standards. In addition,
resellers are relying to an increasing extent on distributors for inventory
management and credit to avoid stocking large inventories and to reduce credit
lines necessary to finance their working capital needs.
Markets outside the United States, which represent over half of the
information technology industry's sales, are characterized by a more fragmented
distribution channel. Increasingly, suppliers and resellers pursuing global
growth are seeking distributors with international sales and support
capabilities.
A number of emerging industry trends provide new opportunities and
challenges for distributors of information technology products and services. For
example, the continued growth of the Internet provides distributors with an
additional means to serve both suppliers and reseller customers through the
development and use of effective electronic commerce tools. The growing presence
and importance of such electronic commerce capabilities also provides
distributors with new business opportunities as new categories of products,
customers, and suppliers develop.
Another example involves a reevaluation of the traditional roles played by
supply chain partners. The Company believes that the chain of relationships
between suppliers, distributors, resellers and end-users is transforming from a
manufacturer-push business model to one that is governed by end-user demand. In
the traditional industry model, distributors simply move product from
manufacturers to resellers who in turn service end-user businesses or customers.
In contrast, the "demand chain" management model would reverse these steps as
follows: (1) the reseller would start by listening to the needs of the end-user
business or consumer, (2) with a clear understanding of these needs, the
reseller would work with a distribution partner to design, sell and support
solutions that address the needs of the end-user business or consumer, and (3)
the distribution partner would then work closely with suppliers and
manufacturers to ensure that these solutions can be delivered through or on
behalf of the resellers in a cost effective and timely manner.
The challenges for this model include the speed and extent to which
distributors and their reseller and supplier partners embrace the model and make
changes to their traditional way of doing business. The benefits of the demand
chain model are increased efficiency and a reduced cost of doing business
resulting from reduced channel inventory and associated costs, shortened channel
response time, and improved value for each channel partner.
The drive to increase efficiency in the delivery of products and services
has resulted in consolidation pressure within the information technology
products distribution industry. This industry trend is evidenced by Compaq's
Distributor Alliance Program announced in May 1999, which decreased the number
of Compaq distribution partners in the U.S. from 39 to 4. Ingram Micro was
selected as one of those partners. The Company believes that it has the largest
global distribution network for information technology products and services and
that for the long term it is well positioned to assume a leadership role for
other manufacturing partners, should this consolidation trend continue.
Another industry trend is manufacturer-direct sales initiatives, developed
in an effort to duplicate the success of the direct sales business model.
Although this model removes distributors from their traditional
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role, the Company believes that this direct sales model presents new partnership
opportunities, such as providing logistics and fulfillment services to suppliers
and reseller customers.
The Company further believes that the dynamics of the information
technology products and services distribution business favor the largest
distributors, which have access to financing and are able to achieve economies
of scale, breadth of geographic coverage, and have the strongest vendor
relationships. Consequently, the distributors with these characteristics tend to
take share from smaller distributors as the industry undergoes a process of
consolidation. However, smaller, high value-added niche distributors may
continue to compete successfully in the consolidated market. The Company also
believes that distributors need to implement high volume/low cost operations on
a worldwide basis as ongoing price competition grows and the demand for
value-added services, the utilization of electronic commerce, as well as the
globalization of the information technology products and services industry
increases. In summary, the information technology products and services
distribution industry is growing rapidly while simultaneously consolidating,
creating an industry environment in which market share leadership and cost
efficiency are of paramount importance.
BUSINESS STRATEGY
The Company's strategic decisions and activities are guided by the
following Vision and Mission statements:
OUR VISION. We will always exceed expectations . . . with every partner,
every day.
OUR MISSION. To maximize shareowner value by being the best provider of
technology products and services for the world.
In addition, the Company's values encourage teamwork, respect,
accountability, integrity, and innovation.
The Company believes that it is the leading worldwide distributor of
information technology products and services and that it has developed the
capabilities and scale of operations critical for long-term success in the
information technology products and services distribution industry.
The Company's strategy of offering a broad line of products and services
provides customers with one-stop shopping. The Company generally is able to
purchase products in large quantities and to avail itself of special purchase
opportunities from a broad range of suppliers. This allows the Company to take
advantage of various discounts from its suppliers, which in turn enables the
Company to provide competitive pricing to its customers. The Company's global
market presence provides suppliers with access to a broad base of geographically
dispersed resellers, serviced by the Company's extensive network of systems,
distribution centers and support offices. Also, the Company benefits from being
able to make large investments in information systems, warehousing systems, and
infrastructure. Further, the Company is able to spread the costs of these
investments across its worldwide operations.
The Company is pursuing a number of strategies to further enhance its
leadership position within the information technology products and services
marketplace, including the following:
EXPAND WORLDWIDE MARKET AND PRODUCT COVERAGE. Ingram Micro is committed to
expanding its already extensive worldwide market coverage through internal
growth in all markets in which it currently participates. In addition, the
Company intends to pursue acquisitions, joint ventures, and strategic
relationships in order to take advantage of growth opportunities and to leverage
its strong systems, infrastructure, and global management skills.
By providing greater worldwide market coverage, Ingram Micro increases the
scale of its business, which results in greater cost economies. In addition, as
it increases its global reach, the Company can better diversify its business
across different markets, reducing its exposure to individual market downturns.
In 1999, the Company continued expansion of its global presence. For example,
the Company increased its reach in Europe, establishing IMICRO Lda., its
Portugal subsidiary, and increased its interest in Walton Networking KFT in
Hungary, giving Ingram Micro its first majority-owned subsidiary in Eastern
Europe. In Asia, the Company increased its ownership of Electronic Resources
Ltd. ("ERL"), a leading distributor of electronic
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components and computer peripherals, from 21% in 1998 to 100% in 1999. ERL was
renamed Ingram Micro Asia Ltd.
The Company has grown its operations outside the United States principally
through acquisitions, and currently has subsidiaries or offices in 30 countries
and sales representatives in another four countries, including Argentina,
Australia, Brazil, Canada, China, Colombia, Costa Rica, Chile, Ecuador, Hungary,
India, Indonesia, Malaysia, Mexico, New Zealand, Norway, Panama, Peru,
Singapore, Switzerland, Thailand, Venezuela, and 12 countries of the European
Union: Austria, Belgium, Denmark, Finland, France, Germany, Italy, The
Netherlands, Portugal, Spain, Sweden and The United Kingdom. The Company
believes that it is the market share leader in the United States, Canada,
Mexico, Brazil, Chile, Germany, and a number of other countries in Europe and
Asia. Ingram Micro believes it is the largest full-line distributor in Europe,
the largest distributor in Asia (excluding Japan), and the largest Pan-Latin
America distributor, based on publicly available data and management's knowledge
of the industry.
The Company continues to pursue initiatives to expand its global product
and service offerings in various categories, such as high-end storage, computer
telephony integration ("CTI"), and networking products. The recently formed
High-End Storage Group provides a dedicated and focused approach to the growing
storage area networks and network attached storage markets. The Company
continues to expand its CTI offering with solutions and products made possible
by the convergence of voice and data applications through its Converging
Technologies Group. Examples of such products include PC-based phone systems,
unified messaging applications, and a variety of Internet telephony and
voice-over Internet protocol products. Expansion areas for networking include
Internet appliances, wide area networking, and wireless networking solutions.
LEAD IN STREAMLINING THE DEMAND CHAIN. The information technology products
and services distribution industry is changing at a rapid pace. The chain of
relationships that spans across component suppliers, manufacturers,
distributors, resellers and end-users is transforming from a manufacturer-push
business model to one that is governed by end-user demand. The Company uses the
term "demand chain" to describe the build-to-demand model to which the channel
is evolving. In this industry model, the role of distributors is expanded from
the traditional movement of products from manufacturers to resellers, to one
that encompasses assembly, configuration, inventory management, order
management, and end-user fulfillment. Ingram Micro believes that as a
distributor with strong execution and broad product offerings, it will be best
able to lead the movement to the demand chain model.
The Company's commitment to streamlining the demand chain is evident in its
investment in infrastructure and programs that enable the most efficient flow of
products, services, and information up and down the demand chain. Frameworks(TM)
Total Integration Services(TM) ("Frameworks") is the Company's vehicle to
deliver world-class channel assembly, reconfiguration, contract manufacturing,
and the procurement of private label/unbranded solutions. Ingram Micro
management within each region is responsible for their respective region's
Frameworks program, allowing regional customer buying patterns to determine the
most appropriate mix among the four services. Another example of demand chain
streamlining in the U.S. is vendor co-location, where the distributor
establishes a site adjacent to the OEM assembly operation. Systems
reconfiguration and customer shipping occur at the vendor site, resulting in
cost and time-to-market efficiencies.
The Company's demand chain focus is also evident in two divisions that
support its business partners: Affiniti(TM) ("Affiniti") for resellers and
Global Partner Services ("GPS") for suppliers, each offer comprehensive suites
of value-added services matched to each partner's individual needs. Affiniti and
GPS are discussed further under the sections entitled "Deliver World-Class
Outsourcing And Value-Added Programs To Suppliers And Resellers" and "Services."
Equally important to streamlining the demand chain is better information
management through the development of industry-wide performance metrics and
standards that enable close collaboration among demand chain partners. Ingram
Micro has spearheaded this effort through its key role in the formation and
continuous support of RosettaNet(TM), an independent, self-funded, non-profit
organization dedicated to promoting an industry-wide initiative to adopt common
electronic business interfaces worldwide. As a next step, Ingram Micro was
instrumental in the formation of Viacore, Inc. Viacore
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is developing an e-commerce hub that can translate RosettaNet information for
member top-tier demand chain companies. This will allow business partners to
exchange critical business information such as real-time inventory,
transportation schedules, and resource planning opportunities, which can lower
costs and reduce cycle times. In addition, Ingram Micro is rapidly enhancing and
expanding electronic commerce tools that facilitate reseller to end-user
commerce.
EXPLOIT INFORMATION SYSTEMS LEADERSHIP AND ENHANCE ELECTRONIC COMMERCE
CAPABILITIES. Ingram Micro continually invests in its information systems, which
are crucial in supporting the Company's growth and its ability to maintain high
service and performance levels. The Company has a scalable, full-featured
information system, IMpulse, which it believes is critical to its ability to
deliver worldwide, real-time information to both suppliers and reseller
customers. IMpulse is an industry-leading information system and is used across
substantially all of the Company's markets worldwide, customized to suit local
market requirements. The Company believes that it is the only full-line
distributor of information technology products and services in the world with
such a centralized global system that is capable of supporting future growth and
new business ventures.
The Company's information systems provide the infrastructure that allows
the implementation of a demand chain, customer-centric channel model. It
provides the information necessary for Ingram Micro to act as the agent of
commerce among suppliers, resellers, and end-users. In 1999, the Company added
significant enhancements to its Web site, www.ingrammicro.com, creating a
prominent business-to-business tool for the technology solutions industry. The
Web site serves as a Business Center for resellers, providing them access to a
myriad of information, including vendor solutions and technical information.
Many other special features currently available in the U.S. and Canada include
real-time pricing and availability, on-line ordering, order status, and an
extensive product catalog. Plans for 2000 include extending this functionality
to nearly every other country in which Ingram Micro operates. The Company's
seamless, easy-to-use, electronic commerce offering provides resellers the
ability to more easily do business with Ingram Micro and end-users at a lower
cost. The Company's electronic commerce capabilities include: SpeedSource(TM), a
Java-based electronic commerce ordering tool that gives resellers in the U.S.
and Canada quick access to real-time ordering, product allocation, order status,
product search, pricing and availability; and InsideLine(TM), a direct
communication link that furnishes resellers with real-time access to the
Company's mainframe inventory systems. InsideLine is the commerce and
information engine behind many of today's successful Internet retailers. This
tool is currently available in the U.S., Canada, Europe, and Latin America, and
is expected to be available in the Asia Pacific region in 2000.
In 2000, Ingram Micro's e-commerce capabilities in the U.S. will support
the Company's individual programs for specialized resellers. These include
VentureTech Network(TM), which specializes in solutions for small-to-medium
sized businesses, and Partnership America(TM), which is focused on the
government and education market. www.venturetechnetwork.com enables
communication between solutions integrators, manufacturers and small-to-medium
business customers. The site, developed and maintained by Ingram Micro, provides
information and facilitates communication with tools such as electronic
storefronts to customers. The electronic storefront tools allow end-users to buy
product online with the order transparently sent to Ingram Micro for fulfillment
on behalf of the solutions integrator. www.partnershipamerica.com will bring
independent buyers in the public sector together with independent resellers of
technology. Partnershipamerica.com will also contain price-comparison tools,
decision-making content such as product reviews, news, events, on-line
presentations, and interactive communication tools for the entire demand chain.
The success of the Company's online capability is demonstrated by the
November 1999 Inter@ctive Week magazine ranking of the "Internet 500" (the
publication's first ranking of the 500 largest companies by Internet revenue).
The magazine's research placed Ingram Micro's online revenue at number 8
overall, the highest ranking among distributors in all industries. Information
Week published the "E-commerce 100" in its December 13, 1999 issue, identifying
"the most innovative practitioners of electronic applications and solutions" in
the U.S. Ingram Micro, the only broadline information technology products and
services distributor listed, ranked number 33 overall.
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PROVIDE SUPERIOR EXECUTION FOR RESELLER CUSTOMERS. Consistent with its
overall emphasis on "winning customers for life," Ingram Micro continually
refines and integrates its systems and business processes to provide superior
execution and service to resellers. The Company's electronic commerce tools
enable resellers to do business with their end-user customers quickly, easily,
and at a lower cost. To ensure efficient product delivery, the Company continues
to expand and upgrade its distribution network. For example, in 1999 the Company
completed the construction of new distribution centers in Toronto, Canada
(501,000 square feet), Straubing, Germany (400,000 square feet), Lomme, France
(200,000 square feet), and Barcelona, Spain (110,000 square feet). In 2000, the
Company plans to complete the construction of a new distribution center in
Lickdale, Pennsylvania (600,000 square feet) and convert the existing
Harrisburg, Pennsylvania distribution center (200,000 square feet) to a major
eastern returns processing center. Due to a change in business strategy, the
distribution center in Tilburg, The Netherlands, originally anticipated to be a
600,000 square foot facility serving the pan-European market is now planned as a
270,000 square foot facility primarily to serve the Dutch market. European
product flow will continue to be allocated primarily to individual in-country
distribution centers.
In 2000, the Company will begin the implementation of the next generation
of operations and logistics systems, built around a client-server warehouse
management system, allowing all of its North American distribution centers to
increase operating capacity from 20 hours a day to 24 hours a day. In the area
of process improvement, the Company works continuously to advance its formal
systems for evaluating and tracking key performance metrics such as
responsiveness to customers, processing accuracy, and order fill rate. Ingram
Micro uses these metrics as well as customer satisfaction surveys to measure
improvements on all key elements believed to be important to the customer. This
information, when used in conjunction with Ingram Micro's core values, allows
the Company's associates to provide a high level of customer satisfaction. The
Company's commitment to superior service has been widely recognized throughout
the industry. For example, in their 15th annual Preferred Distributor Study,
Computer Reseller News rated Ingram Micro a preferred distributor in more
categories than any other distributor in 1999.
Ingram Micro strives to maximize order fill rates by maintaining optimum
quantities of product in its 70 distribution centers worldwide. The Company's
advanced control systems and processes enable Ingram Micro to provide same-day
shipping for any order in the United States received by 5:00 p.m., with highly
accurate shipping performance. Another indication of the quality of Ingram
Micro's processes is the ISO 9002 certification of all U.S. business units
including customer service, returns, consolidation, operations, configuration,
distribution center, sales and purchasing, as well as a number of comparable
business units located outside the U.S. In addition, the Company has implemented
a number of programs that significantly reduce the time required for resellers
to obtain product. For example, the Company offers co-location services in which
Ingram Micro sets up a permanent location either on site or adjacent to a
supplier's manufacturing facility. Ingram Micro takes possession of product at
the supplier's location and then ships it to the reseller or end-user, depending
on the reseller's specification, cutting out a large portion of costs from the
supply chain.
DELIVER WORLD-CLASS OUTSOURCING AND VALUE-ADDED PROGRAMS TO SUPPLIERS AND
RESELLERS. As a global service-focused organization, Ingram Micro strives to
compete on the basis of total value rather than solely on price. By
understanding and anticipating customer needs, the Company continually develops
innovative business solutions to provide full back-room outsourcing services to
suppliers and resellers. Ingram Micro's GPS division assists suppliers in
outsourcing standard business functions, such as logistics and end-user
fulfillment. The Affiniti division aims to transform the Company's relationships
with its reseller customers from pure transactional relationships to
consultative partnerships where Ingram Micro satisfies not only the customers'
product needs but also their service requirements. Such relationships are
designed to enable the Company to transition from a product-centric commodity
business to a full solution and services provider, with expected benefits in
revenue and margin generation. Under the GPS and Affiniti initiatives, the
Company identifies and deploys value-added services to its supplier and reseller
partners such as warehousing, distribution, order management, product
fulfillment, product reconfiguration, channel assembly, and e-commerce credit
management. Ingram Micro, in conjunction with various strategic partners,
provides additional services in areas such as e-commerce, telemarketing,
transportation and marketing services. Together, these services are intended to
link reseller customers and suppliers to Ingram Micro as a one-stop
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provider of information technology products and related services, while meeting
demand by suppliers and resellers to outsource their non-core business
activities and thereby lower their operating costs.
MAINTAIN LOW COST LEADERSHIP THROUGH CONTINUOUS IMPROVEMENTS IN SYSTEMS AND
PROCESSES. Intense competition and narrow margins characterize the information
technology products and services distribution industry. As a result, achieving
economies of scale and controlling operating expenses are critical to achieving
and maintaining profitable growth. Over the past five years, the Company has
been successful in reducing SG&A expenses (including expenses allocated from
Ingram Industries prior to the Split-Off) as a percentage of net sales, to 4.0%
in 1999 from 4.9% in 1995.
Work is in progress on a number of programs designed to continue reducing
operating expenses as a percentage of net sales. Many U.S.-developed programs
are slated for implementation in the Company's international operations, while
other programs are region-specific. Current productivity improvement programs
include: (i) system enhancements to automatically route orders to the most
cost-efficient warehouse based on customer needs and warehouse capacity; (ii)
increased utilization of most of the Company's existing warehouse locations
resulting from the expansion of operating hours from 20 to 24 hours per day;
(iii) automated proof-of-delivery notifications to improve collection on past
due invoices; (iv) creation of "co-location" programs with key vendors to ship
product directly from the vendor to the end-user; (v) enhancements that allow a
close integration of major systems -- such as logistics and material handling
platforms -- resulting in increased efficiencies, product traceability, and
service offerings; and (vi) the expansion of the Company's electronic commerce
tools, including deployment of Internet ordering capabilities in 17 countries to
date, to increase the number of orders placed without the assistance of a
telesales representative. See "-- Information Systems."
The Company will, on an ongoing basis, examine its business processes and
systems to determine how it can continue to improve, while simultaneously
lowering costs.
DEVELOP HUMAN RESOURCES FOR EXCELLENCE AND TO SUPPORT FUTURE GROWTH. Ingram
Micro's growth to date is a result of the talent, dedication, and teamwork of
its associates. Future growth and success will be substantially dependent upon
the retention and development of existing associates, as well as the recruitment
of additional associates with superior talent.
Transferring functional skills and implementing cross-training programs
across all Ingram Micro locations have proven to be important factors in the
Company's growth and global expansion. A rigorous and systematic process is
being implemented for defining, developing and delivering the highest quality
training solutions in the most cost-effective way. In conjunction with these
training programs, the Company is expanding its human resources systems
worldwide to provide enhanced applicant tracking, hiring screens, career and
succession planning, education assistance, stock ownership participation, and
benefits administration. Also, the Company continues to seek top quality
associates worldwide through local, professional, and college recruiting
programs. Recognizing that hiring and retaining associates hinges, in part, on
providing a competitive salary and benefits package, the Company has developed a
global salary structure based on a comprehensive review of competitive salaries
and benefits by region. Based on feedback from the Company's annual associate
surveys and leadership behavior questionnaires, Ingram Micro has modified many
aspects of its programs and processes.
CUSTOMERS
Ingram Micro sells to more than 175,000 reseller customers in more than 100
countries worldwide. No single customer accounted for more than 4% of Ingram
Micro's net sales in 1999, 1998, or 1997.
The Company conducts business with most of the leading resellers of
information technology products and services around the world including, in the
United States, Best Buy, Buy.com, CDW Computer Centers, CompUSA, Dell Computer,
Insight, MicroAge, Micro Warehouse, Office Max, PC Connection and Staples. The
Company's reseller customers outside the United States include Club Compu Price,
DGS Retail Limited, EDS Innovations, Future Shop, GE Capital, Laboratorios
Magneticos, Micro Warehouse, Nueva Wal Mart and Telenor. In most cases, the
Company has resale contracts with its reseller customers which are generally
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terminable at will after a short notice period, and have no minimum purchase
requirements. The Company's business is not substantially dependent on any such
contracts.
Ingram Micro is well positioned to provide fulfillment and value-added
services to the Internet reseller marketplace. As of January 1, 2000, Ingram
Micro supported 34 Internet resellers (defined as those resellers whose primary
point of sale to their end-users is via the reseller's web site). Ingram Micro's
sales organization has specific resources dedicated to the recruitment,
development and sales support of the Internet reseller.
The Company's GPS Division provides a number of information technology
product manufacturers with supply chain optimization services including: call
center management, customer service, credit management, financial services,
invoicing, technical service, order management, warehouse management, kitting,
customized shipping labels, and reverse logistics services. The Company's
agreements with these manufacturers are generally for a number of years,
although either party may terminate the agreement after a relatively short
notice period.
The Company has specific agreements in place with its Affiniti customers to
provide order management, logistics management, configuration management and
procurement management services. Customers include CompUSA, SARCOM, Software
Spectrum and Unisys in the United States, ABM and Mobile Direct in Canada, and
GE Capital, IMS and Telenor in Europe. These agreements generally have longer
terms than the Company's resale agreements, but, in most cases, can be
terminated on relatively short notice by either party without cause.
SALES AND MARKETING
As of the end of fiscal 1999, Ingram Micro's sales department employed
approximately 3,600 sales representatives worldwide. Of these, approximately
1,300 representatives are located in the United States, 1,350 in Europe, and 900
in other regions. These individuals assist resellers with product
specifications, system configuration, new product/service introductions,
pricing, and availability.
The sales organization is structured to focus on resellers, who comprise
the following market sectors:
- VAR (value-added resellers): Internet service providers, corporate
resellers, direct marketers, independent dealers and owner-operated
chains;
- Consumers: Internet storefronts, consumer electronics stores, computer
superstores, mass merchants, office product superstores, and warehouse
clubs; and
- Telecommunications: telephone companies, telecommunications contractors
and interconnect value-added resellers.
The Company's product management and marketing groups also promote Ingram
Micro's sales growth and facilitate customer contact. For example, Ingram
Micro's marketing programs are tailored to meet specific supplier and reseller
customer needs. These needs are met through a wide offering of services by the
Company's in-house marketing organization, including advertising, direct mail
campaigns, market research, on-line marketing, retail programs, sales
promotions, training, and assistance with trade shows and other events.
SELLING ARRANGEMENTS. The Company offers various credit terms to qualifying
customers as well as prepay, credit card, and cash on delivery terms. The
Company also offers "end-user" financing based upon the end-user's
creditworthiness and collects outstanding accounts receivable on behalf of the
reseller. The Company closely monitors reseller customers' creditworthiness
through IMpulse, which contains detailed information on each customer's payment
history as well as other relevant information. In addition, the Company
participates in a U.S. credit association whose members exchange customer credit
rating information. In most markets, the Company utilizes various levels of
credit insurance to allow sales expansion and control credit risks; for example,
in Europe, approximately 90% of the Company's sales are covered by credit
insurance. The Company establishes reserves for estimated credit losses in the
normal course of business. If the Company's receivables were to experience a
substantial deterioration in their collectibility or if the
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Company cannot obtain credit insurance at reasonable rates, the Company's
financial condition and results of operations may be adversely impacted.
The Company also sells to certain customers in the United States through
arrangements that involve higher volume sales on limited lines of product. These
sales are generally funded by floor plan financing companies whose fees are
subsidized by the Company's suppliers. Historically, the Company received
payment from these financing institutions within three business days from the
date of the sale, allowing the Company's master reseller business to operate at
much lower relative working capital levels than the Company's distribution
business. Starting in the second half of 1998, certain of the industry's leading
hardware manufacturers reduced their flooring fee subsidies. As a result,
payments from institutions that finance master reseller sales with these reduced
subsidies are now received within 15 days. This delay in payment has increased
the Company's average borrowing levels and interest costs.
PRODUCTS AND SUPPLIERS
Ingram Micro believes that it has the largest inventory of products in the
industry, based on a review of its major competitors' publicly available data.
The Company distributes and markets more than 280,000 products (as measured by
distinct part numbers assigned by manufacturers and other suppliers) from the
industry's premier computer hardware manufacturers, networking equipment
suppliers, and software publishers worldwide. Product assortments vary by
market, and the manufacturers' relative importance to Ingram Micro also varies
from country to country. On a worldwide basis, the Company's sales mix is more
heavily weighted toward hardware products than software products. Net sales of
software products have decreased as a percentage of total net sales in recent
years due to a number of factors, including bundling of software with
microcomputers, increased prevalence of software licensing as compared to sales
of individual software titles and declines in software prices. The Company
believes that this is a trend that applies to the information technology
products distribution industry as a whole, and the Company expects it to
continue.
Ingram Micro's worldwide suppliers include leading computer hardware
manufacturers, networking equipment manufacturers, and software publishers such
as 3Com, Apple Computer, Cisco Systems, Compaq Computer, Corel, Epson,
Hewlett-Packard, IBM, Intel, Iomega, Microsoft, NEC Technologies, Novell,
Quantum, Seagate, Sun Microsystems, Symantec, Toshiba, Viewsonic, and Western
Digital.
The Company's suppliers generally warrant the products distributed by the
Company and allow returns of defective products, including those that have been
returned to the Company by its customers. The Company does not independently
warrant the products it distributes; however, the Company does warrant the
following: (i) its services with regard to products which it configures for its
customers, and (ii) products which it builds to order from components purchased
from other sources.
The Company has written distribution agreements with many of its suppliers;
however, these agreements usually provide for nonexclusive distribution rights
and often include territorial restrictions that limit the countries in which
Ingram Micro is permitted to distribute the products. The agreements are also
generally short term, subject to periodic renewal, and often contain provisions
permitting termination by either party without cause upon relatively short
notice. A supplier who elects to terminate a distribution agreement generally
will repurchase its product carried in the distributor's inventory. The Company
does not believe that its business is substantially dependent on the terms of
any such agreements.
The Company's business, like that of other distributors, is subject to the
risk that the value of its inventory will be affected adversely by suppliers'
price reductions or by technological changes affecting the usefulness or
desirability of the products comprising the inventory. It is the policy of most
technology product suppliers to protect distributors, such as the Company, from
the loss in value of inventory due to technological change or the supplier's
price reductions. Under many such agreements, the distributor has a designated
period of time within which to return for credit or exchange for other products
a portion of those inventory items purchased. In addition, under the terms of
many distribution agreements and if the distributor complies with certain
conditions, suppliers will credit the distributor for declines in inventory
value resulting from the supplier's price reductions. In the last year, however,
major PC suppliers have decreased the availability of price protection for
distributors. It is now more difficult for the Company to match its inventory
levels with
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price protection periods. The time periods within which distributors may receive
rebates or credit from manufacturers for decreases in prices on unsold inventory
are shorter. Consequently, the Company's risk of loss has increased due to
declines in the value of inventory held by the Company after such price
protection periods have passed. The Company is taking various actions, including
closer monitoring of its inventory levels and decreased purchases, to lessen
such risk.
While the industry practices discussed above are sometimes not embodied in
written agreements and do not protect the Company in all cases from declines in
inventory value, management believes that these practices provide a level of
protection from such declines. No assurance can be given, however, that such
practices will continue or that they will adequately protect the Company against
declines in inventory value.
SERVICES
Ingram Micro offers a variety of services to resellers and manufacturers.
The Company's Frameworks offering features reconfiguration to OEMs, and includes
other services in the U.S. and Europe. Through its GPS division, the Company
provides outsourcing services to manufacturers and through its Affiniti
division, it provides outsourcing services to its large reseller customers.
FRAMEWORKS. Ingram Micro introduced Frameworks, a channel assembly and
configuration initiative, in 1997 to improve efficiency and assist in reducing
manufacturers' inventory overhead. Frameworks, currently provides
reconfiguration services within each region Ingram Micro operates.
Reconfiguration consists of opening brand named finished product and upgrading
it with features such as memory, components, accessories, and third party
software. Reconfiguration is provided in the U.S. at two dedicated Frameworks
facilities and under co-location arrangements established adjacent to OEM
assembly operations in Houston, Texas; Raleigh, North Carolina; and Richmond,
Virginia. Outside the U.S., reconfiguration is performed at several of the
Company's distribution facilities around the world. Within the U.S. and European
regions, Frameworks services also include channel assembly (bringing together
individual OEM components into a manufacturer-authorized computer),
manufacturing of private label and unbranded systems, as well as other
manufacturing services.
GLOBAL PARTNER SERVICES. Ingram Micro established the GPS division in 1999
to provide outsourcing services to manufacturers. GPS, currently a U.S. and
Canadian initiative, helps manufacturers seamlessly provide end-users with
product selection, purchasing, delivery and customer service.
Ingram Micro provides a complete logistics and outsourcing solution to
manufacturers through its GPS division. The Company's service offerings include
warehousing, distribution, order management, product fulfillment, and credit
management, among others. Various strategic partners, working with Ingram Micro,
provide services in areas such as e-commerce, telemarketing, transportation, and
marketing services. These relationships include joint engagement with key
customers, as well as the development of value-added solutions to increase
customer satisfaction and expand opportunities.
The Company's agreements with these manufacturers are generally for a
number of years, although either party may terminate the agreement after a
relatively short notice period.
AFFINITI. In order to take advantage of the Company's scale and service
offerings, Ingram Micro also established Affiniti in 1999 within its U.S.,
Canadian, and European operations. Affiniti provides the Company's large
reseller customers with outsourcing and supply chain management services. This
service offering includes order management, product procurement, configuration,
fulfillment, marketing services and certain other outsourcing services.
Resellers benefit by reducing their fixed investments while at the same time
having access to the latest technology and logistics services through Ingram
Micro.
The Company has specific agreements in place with its Affiniti customers to
provide order management, procurement management, configuration management and
logistics management services. Customers include CompUSA, SARCOM, Software
Spectrum and Unisys in the United States, ABM and Mobile Direct in Canada, and
GE Capital, IMS and Telenor in Europe. These agreements generally have longer
terms than the Company's resale agreements, but, in most cases, can be
terminated on relatively short notice by either party without cause.
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INFORMATION SYSTEMS
Ingram Micro's systems are primarily mainframe-based and provide the high
level of scalability and performance required to manage such a large and complex
business operation. IMpulse, Ingram Micro's enterprise wide system, is a single,
standardized, real-time information system and operating environment, used
across substantially all of the Company's worldwide operations. It has been
customized as necessary for use in all countries in which the Company operates
and has the capability to handle multiple languages and currencies. On a daily
basis, the Company's systems typically handle 60 million on-line transactions,
compared to 12 million on-line transactions handled on a daily basis by IMpulse
in 1996. The Company has designed IMpulse as a scalable system that has the
capability to support increased transaction volume. The overall internal
response time for the Company's IMpulse system consisting of over 47,000
terminal sessions (terminals, printers, personal computers, and radio frequency
hand held terminals) is less than one second.
Worldwide, Ingram Micro's centralized processing system supports more than
40 operational functions including customer management, inventory management,
order management, warehouse management, and accounting. At the core of the
IMpulse system is on-line, real-time distribution software to which considerable
enhancements and modifications have been made to support the Company's low cost
business model and its growth. The Company makes extensive use of advanced
telecommunications technologies with customer service-enhancing features, such
as Automatic Call Distribution to route customer calls to the telesales
representatives. The Telesales Department uses its Sales Wizard system for
on-line, real-time tracking of all customer calls, for proactive outbound
calling, and for status reports on sales statistics such as number of customer
calls, customer call intentions, and total sales generated. IMpulse allows the
Company's telesales representatives to deliver real-time information on product
pricing, inventory availability, and order status to reseller customers. The
Sales Adjusted Gross Profit pricing system enables telesales representatives to
make informed pricing decisions through access to specific product and order and
fulfillment-related costs for each sales opportunity.
In the United States, the Company has implemented CTI technology, which
provides the telesales representatives with Automatic Number Identification
capability and advanced telecommunications features such as on-screen call
waiting and automatic call return, thereby reducing the time required to process
customer orders.
In order for Ingram Micro to act as the agent of commerce among suppliers,
resellers, and end-users, the Company greatly improved its web site,
www.ingrammicro.com during 1999. The Company is rapidly enhancing and deploying
seamless, easy-to-use electronic commerce solutions that provide resellers with
the ability to do business with Ingram Micro and with end-users at lower cost.
The Company's electronic commerce capabilities have expanded during 1999 through
two major enhancements to the Ingram Micro web site. The first enhancement
provided 24 hours a day/7 days a week ordering capability, along with a major
re-design of the user interface and product search functionality. The second
enhancement added end-user quote generation and financing options. These
enhancements, bundled with InsideLine, a direct communication link that
furnishes resellers with real-time access to the Company's mainframe inventory
systems, create a strong base from which to roll out additional customer-focused
solutions. VentureTech Network uses these developments to provide customers an
end-user web storefront targeted specifically to the small-to-medium sized
business market segment. The site provides targeted content and promotional
offerings to end-users, and allows Ingram Micro customers to conduct business
transactions via the Internet with their end-users.
To complement Ingram Micro's telesales, customer service, and technical
support capabilities, IMpulse offers a number of different electronic products
and services through which customers can conduct business with the Company.
These products and services include the Customer Automated Purchasing System,
Electronic Data Interchange, the Bulletin Board Service, internet-based
Electronic Catalog, TechNotes, and Auction Block. The Electronic Catalog
provides reseller customers with access to product pricing and availability,
with the capability to search by product category, name, or manufacturer.
TechNotes is a comprehensive multi-manufacturer database which customers can
deploy on their own web sites and contains timely and accurate product, sales,
and technical information. TechNotes information is updated regularly by the
manufacturers. Auction Block is a real-time, on-line bidding service that allows
reseller customers to
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competitively bid on unopened products that are not returnable to suppliers
(e.g., discontinued products, products with cosmetic damage to their packaging,
returned products not conforming to the supplier's return policies).
The Company's warehouse operations use extensive bar-coding technology and
radio frequency technology for receiving and shipping, and real-time links to
United Parcel Service and Federal Express for freight processing and shipment
tracking. The customer service department uses the POWER System for on-line
documentation and faster processing of customer product returns. To ensure that
adequate inventory levels are maintained, the Company's buyers depend on the
purchasing system to track inventory on a continual basis. Many other features
of IMpulse help to expedite the order processing cycle and reduce operating
costs for the Company as well as its reseller customers and suppliers.
The Company employs various security measures and backup systems designed
to protect against unauthorized use or failure of its information systems.
Access to the Company's information systems is controlled through the use of
passwords and additional security measures are taken with respect to sensitive
information. The Company has a contract with Sungard Recovery Services for
disaster recovery. In addition, the Company has backup power sources for
emergency power. The Company has not in the past experienced significant
failures or downtime of IMpulse or any of its other information systems, but any
such failure or significant downtime could prevent it from taking customer
orders, printing product pick-lists and/or shipping product, and could also
prevent the Company's customers from accessing price and product availability
information.
The Company believes that in order to remain competitive, it will be
necessary to continuously upgrade its information systems. The Company's
mainframe computer systems were upgraded during 1999 to allow for continued
growth and to allow further and faster integration of new web-based technology
with the legacy systems. The Company has also begun to migrate its IMpulse
system from a mainframe-based system using Cobol language to a client-server
based system using Oracle database management systems. The Company believes that
this new information system architecture will address the Company's need for a
distributed computing environment. Doing so will provide for improved and
simpler connectivity to vendors and customers 24 hours a day/7 days a week and
will increase system scalability and fault tolerance.
EURO CONVERSION
On January 1, 1999, a single currency called the euro was introduced in
Europe. Eleven of the 15 member countries of the European Union adopted the euro
as their common legal currency on that date. Fixed conversion rates between
these participating countries' existing currencies (the "legacy currencies") and
the euro were established as of that date. The legacy currencies are scheduled
to remain legal tender as denominations of the euro until at least January 1,
2002 (but not later than July 1, 2002). During this transition period, parties
may settle transactions using either the euro or a participating country's
legacy currency. Beginning in January 2002, new euro-denominated bills and coins
will be issued and legacy currencies will be withdrawn from circulation. The
Company has implemented plans to address the issues raised by the euro currency
conversion. These plans include, among others, the need to adapt computer
information systems and business processes and equipment to accommodate
euro-denominated transactions; the need to analyze the legal and contractual
implications on contracts; and the ability of the Company's customers and
vendors to accommodate euro-denominated transactions on a timely basis. Since
the implementation of the euro on January 1, 1999, the Company has experienced
improved efficiencies in its cash management program in Europe as all
intra-company transactions within participating countries are conducted in
euros. In addition, the Company has reduced hedging activities in Europe for
transactions conducted between euro participating countries. Since the Company's
information systems and processes generally accommodate multiple currencies, the
Company anticipates that modifications to its information systems, equipment and
processes will be made on a timely basis and does not expect any failures which
would have a material adverse effect on the Company's financial position or
results of operations or that the costs of such modifications will have a
material effect on the Company's financial position or results of operations.
The Company has not experienced any material adverse effects on its financial
position or results of operations in connection with the January 1, 1999 first
stage conversion.
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NON-U.S. OPERATIONS AND EXPORT SALES
OPERATIONS OUTSIDE THE UNITED STATES. The Company has subsidiaries or
offices outside the U.S. in 30 countries and sales representatives in another
four countries, including Argentina, Australia, Brazil, Canada, China, Colombia,
Costa Rica, Chile, Ecuador, Hungary, India, Indonesia, Malaysia, Mexico, New
Zealand, Norway, Panama, Peru, Singapore, Switzerland, Thailand, Venezuela, and
12 countries of the European Union: Austria, Belgium, Denmark, Finland, France,
Germany, Italy, The Netherlands, Portugal, Spain, Sweden and The United Kingdom.
In 1999, 1998, and 1997, 40.1%, 34.7%, and 30.4%, respectively, of the Company's
net sales were derived from operations outside of the United States. The Company
expects its net sales from operations outside the United States to increase as a
percentage of total net sales in the future due primarily to organic growth and,
to a lesser extent, acquisitions.
The Company's net sales from operations outside the United States are
primarily denominated in currencies other than the U.S. dollar. Accordingly, the
Company's operations outside the United States impose risks upon its business as
a result of exchange rate fluctuations. Additionally, the Company's net sales
from operations outside the United States expose the business to financial risks
from interest rate fluctuations in foreign markets. The Company mitigates most
of this risk primarily through matching the currencies of its non-U.S. costs and
revenues, borrowing in foreign currencies, and utilizing derivative financial
instruments such as forward exchange contracts and interest rate swaps. See
"Item 7. -- Management's Discussion and Analysis of Financial Condition and
Results of Operations" and "Item 7A. -- Quantitative and Qualitative Disclosures
About Market Risk."
EXPORT MARKETS. The Company continues to serve markets where it does not
have a stand-alone, in-country presence through its general telesales operations
in Santa Ana, California and Buffalo, New York and in Export offices in Miami,
Florida; and Heerlen, The Netherlands. In addition, the Export branch in Latin
America has field sales representatives based in Bogota, Colombia; San Jose,
Costa Rica; Caracas, Venezuela; Quito, Ecuador; San Juan, Puerto Rico; and Sao
Paulo, Brazil.
For segment information regarding the Company's United States and non-U.S.
operations, see Note 10 of Notes to Consolidated Financial Statements.
COMPETITION
The Company operates in a highly competitive environment, both in the
United States and internationally. The information technology products and
services distribution industry is characterized by intense competition, based
primarily on price, product availability, speed and accuracy of delivery,
effectiveness of sales and marketing programs, credit availability, ability to
tailor specific solutions to customer needs, quality and breadth of product
lines and service, and availability of technical and product information. The
Company believes it competes favorably with respect to each of these factors.
Ingram Micro competes in the U.S. against full-line distributors such as
Tech Data, Merisel and Pinacor (MicroAge's distribution arm), as well as
specialty distributors such as Gates/Arrow (desktop and enterprise products),
Daisytek (consumables), Access Graphics (enterprise products) and Avnet
(industrial and enterprise products). Ingram Micro competes internationally with
a variety of national and regional distributors. In the European market,
competitors include international distributors such as Tech Data (which acquired
Computer 2000, a European competitor). During 1999, CHS Electronics, a large
international competitor, began divesting the majority of its operations in
Europe and in Latin America to the respective management groups. European
regional and local competitors include the divested European operations of CHS,
Actebis, Raab Karcher and Scribona. In Canada, Ingram Micro competes with
Merisel, Beamscope and Tech Data (which acquired Globelle in 1999). In Latin
America, Ingram Micro competes with international distributors such as Tech
Data, and several regional and local distributors including the divested Latin
American operations of CHS, MPS Mayorista, Alvimer and Sonda-Beamscope S.A. In
the Asia Pacific market, Ingram Micro faces both regional and local competitors,
of whom the largest are Tech Pacific, a broadline distributor and SiS
Distribution Ltd., a Hong Kong-based distributor of microcomputer products.
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The Company is constantly seeking to expand its business into areas closely
related to its core information technology products and services distribution
business. As the Company enters new business areas, including value-added
services, it may encounter increased competition from current competitors and/or
from new competitors, some of which may be current customers of the Company. As
electronic purchases of software become more prevalent in the industry,
electronic software distributors may become significant competitors of the
Company. In addition, the Company will continue to seek new opportunities to
provide warehousing and distribution support to Internet storefronts. Electronic
commerce companies could potentially compete with the Company by purchasing
product directly from manufacturers and selling to reseller or end-user
customers.
The Company believes that as customers move their back-room operations to
distribution partners, outsourcing and value-added capabilities will become more
important competitive factors. Examples of value-added capabilities include
channel assembly, configuration, innovative financing programs, and order
fulfillment programs. Many of the Company's manufacturers and reseller customers
are looking to outsourcing partners to perform back-room operations. There are
many potential competitors that provide outsourcing services including other
distributors, freight companies such as United Parcel Service and Federal
Express, and logistics outsourcing companies such as Excel Logistics.
Ingram Micro also competes with hardware manufacturers and software
publishers that sell directly to reseller customers and end-users.
ASSET MANAGEMENT
The Company seeks to maintain sufficient quantities of product inventories
to achieve high order fill rates. The Company believes that the risks associated
with slow moving and obsolete inventory are mitigated by price protection and
stock return privileges provided by suppliers and also by establishing and
continuing to accrue for excess and obsolete inventory reserves based upon
current requirements. In the event of a supplier price reduction, the Company
generally receives a credit for products based upon the terms and conditions
with that supplier. In addition, the Company has the right to return a certain
percentage of purchases, subject to certain limitations.
Historically, price protection, stock return privileges, and inventory
management procedures have helped to reduce the risk of decline in the value of
inventory. However, major PC suppliers have stated that it is their intention to
control the amount of inventory in the channel, particularly in light of the
growth of vendor direct and channel assembly strategies. In the last year, many
suppliers have changed the terms and conditions of their price protection plans
from "full coverage" to "past shipment coverage." This results in an exposure
for the distribution partner. The shorter time periods during which distributors
may receive credit for decreases in manufacturer prices on unsold inventory have
made it more difficult for the Company to match its inventory levels with the
price protection periods. Consequently, the Company's risk of loss due to
declines in value of inventory held by the Company after such price protection
periods have passed has increased.
Inventory levels may vary from period to period, due in part to the
addition of new suppliers or new lines with current suppliers and large cash
purchases of inventory due to advantageous terms offered by suppliers. In
addition, payment terms with inventory suppliers may vary from time to time, and
could result in less inventory being financed by vendors and a greater amount of
inventory being financed by the Company's capital.
EMPLOYEES
As of January 1, 2000, the Company employed 15,363 associates located in
the following regions: United States -- 8,003, Europe -- 4,466, and all other
regions -- 2,894. Ingram Micro's success depends on the skill and dedication of
its associates. The Company strives to attract, develop, and retain outstanding
personnel. Certain of the Company's operations in Europe, Latin America and
Canada are subject to collective bargaining or similar arrangements. The Company
has a process for continuously measuring the status of associate relations and
responding to associate priorities.
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In February 1999, the Company initiated a plan principally in the United
States, but also in Europe, to streamline operations and reorganize resources to
increase flexibility and service and maximize cost savings and operational
efficiencies. This reorganization plan included several organizational and
structural changes, including the closing of the Company's California-based
consolidation center and certain other redundant locations, realignment of the
Company's sales force and the creation of a product management organization that
integrates purchasing, vendor services, and product marketing functions, as well
as a realignment of administrative functions and processes. Outside the U.S.,
the Company increased its cost effectiveness with process improvement efforts
directed at increasing productivity in its distribution centers. In addition,
during the fourth quarter of 1999, further organizational and strategic changes
were implemented in the Company's Frameworks organization including the
selection of an outsource partner to produce unbranded systems and the
reallocation of resources to the Company's custom-configuration services
capabilities.
On March 6, 2000, the Company named Kent B. Foster chief executive officer
and president. He was also elected to Ingram Micro's board of directors. Jerre
L. Stead will remain chairman of the board until his retirement at the Company's
annual meeting of shareowners in May 2000, at which time Mr. Foster will succeed
him as chairman.
EXECUTIVE OFFICERS AND/OR REGIONAL PRESIDENTS OF THE COMPANY
The following table sets forth certain information with respect to each
person who is an executive officer and/or regional president of the Company as
of March 6, 2000:
PRESENT AND PRIOR POSITIONS HELD WITHIN
NAME AGE THE PAST FIVE YEARS(1) YEARS POSITIONS HELD
---- --- --------------------------------------- --------------------
Kent B. Foster(2)...... 56 Chief Executive Officer and President 03/00 to current
President, GTE, a telecommunications services 06/95 to 12/99
company
Vice Chairman and President, GTE Telephone 01/93 to 06/95
Operations
Michael J. Grainger.... 47 Executive Vice President and Worldwide Chief 10/96 to current
Financial Officer
Chief Financial Officer 05/96 to 10/96
Vice President and Controller, Ingram 07/90 to 10/96
Industries
Kevin M. Murai......... 36 Executive Vice President and President, 03/00 to current
Ingram Micro U.S.
Senior Vice President, Chief Operating 01/00 to 03/00
Officer and Acting President, Ingram
Micro U.S.
Senior Vice President and President, Ingram 12/97 to 01/00
Micro Canada
Vice President, Operations, Ingram Micro 01/93 to 12/97
Canada
Gregory M.E. 43 Executive Vice President and President, 06/99 to current
Spierkel............. Ingram Micro Europe
Senior Vice President and President, Ingram 07/97 to 06/99
Micro Asia-Pacific
Vice President, Global Sales & Marketing, 03/96 to 06/97
Mitel Inc., a manufacturer of
telecommunications and semiconductor
products
President, North America, Mitel Inc. 04/92 to 03/96
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17
PRESENT AND PRIOR POSITIONS HELD WITHIN
NAME AGE THE PAST FIVE YEARS(1) YEARS POSITIONS HELD
---- --- --------------------------------------- --------------------
Guy P. Abramo.......... 38 Senior Vice President and Chief Information 01/00 to current
Officer
Senior Vice President and Acting Chief 11/99 to 01/00
Information Officer
Senior Vice President, Marketing, Worldwide 09/98 to 11/99
Partner, Yankelovich Partners, a marketing 05/98 to 10/98
professional services company
Managing Director, Marketing Intelligence, 02/95 to 05/98
Peat Marwick, LLP, an accounting and
professional services company
Manager, Marketing, Mobil Corporation, an 06/87 to 02/95
international oil company
James E. Anderson, Jr.. 52 Senior Vice President, Secretary and General 01/96 to current
Counsel
Vice President, Secretary and General 09/91 to 11/96
Counsel, Ingram Industries
Asger Falstrup......... 50 Senior Vice President and President Ingram 01/00 to current
Micro Canada
Vice President Northern Europe 11/96 to 01/00
Managing Director, Denmark 08/94 to 11/96
David M. Finley........ 59 Senior Vice President, Human Resources, 07/96 to current
Worldwide
Senior Vice President, Human Resources, 05/95 to 07/96
Budget Rent a Car, a car rental company
Vice President, Human Resources, The 01/77 to 05/95
Southland Corporation, a convenience
retail company
Henri T. Koppen........ 57 Senior Vice President and President, Ingram 03/00 to current
Micro Asia-Pacific
Senior Vice President and President, Ingram 01/98 to 02/00
Micro Latin America
President, Latin America, General Electric 07/96 to 12/97
Capital Information Technology Solutions,
a systems integrator/reseller company
Vice President, Latin America, Ameridata 05/95 to 07/96
Global Inc., a systems integrator/reseller
company
General Manager, Mexico, Control Data 05/94 to 05/95
Systems, a systems manufacturer and
integrator
Donald R. Lyman........ 54 Senior Vice President and President, Ingram 03/00 to current
Micro Latin America
Senior Director, Latin America Export 08/99 to 02/00
Channel Sales Manager, Latin America, 01/99 to 07/99
IBM Personal Systems Group, a systems
manufacturer
Netfinitiy Business Unit Manager, IBM 02/98 to 12/98
Personal Systems Group
Channel Manager, IBM Personal Systems Group 10/95 to 01/98
Brand Manager, Commercial Desktop, 09/92 to 10/95
IBM Personal Systems Group
17
18
PRESENT AND PRIOR POSITIONS HELD WITHIN
NAME AGE THE PAST FIVE YEARS(1) YEARS POSITIONS HELD
---- --- --------------------------------------- --------------------
James F. Ricketts...... 53 Corporate Vice President and Worldwide 04/99 to current
Treasurer
Vice President and Worldwide Treasurer 09/96 to 04/99
Treasurer, Sundstrand Corporation, a 02/92 to 09/96
manufacturer of aerospace and related
technology
- ---------------
(1) The first position and any other positions not given a separate corporate
identification are with the Company.
(2) Mr. Foster is a director of Campbell Soup Co., J.C. Penney Co. Inc., and New
York Life Insurance Co.
TRADEMARKS AND SERVICE MARKS
The Company owns or is the licensee of various trademarks and service
marks, including, among others, "Ingram Micro," "IMpulse," the Ingram Micro
logo, "Partnership America," "Leading the Way in Worldwide Distribution,"
"Frameworks Total Integration Services," "Affiniti," "VentureTech Network" and
"eSolutions." Certain of these marks are registered, or are in the process of
being registered, in the United States and various other countries. Even though
the Company's marks may not be registered in every country where the Company
conducts business, in many cases the Company has acquired rights in those marks
because of its continued use of them. Management believes that the value of the
Company's marks is increasing with the development of its business, but that the
business of the Company as a whole is not materially dependent on such marks.
SAFE HARBOR FOR FORWARD-LOOKING INFORMATION
The Private Securities Litigation Reform Act of 1995 (the "Act") provides a
"safe harbor" for "forward-looking statements" to encourage companies to provide
prospective information, so long as such information is identified as
forward-looking and is accompanied by meaningful cautionary statements
identifying important factors that could cause actual results to differ
materially from those discussed in the statement. Except for historical
information, certain statements contained in this Annual Report on Form 10-K may
be "forward-looking statements" within the meaning of the Act. In order to take
advantage of the "safe harbor" provisions of the Act, the Company identifies the
following important factors which could affect the Company's actual results and
cause such results to differ materially from those projected, forecasted,
estimated, budgeted or otherwise expressed by the Company in forward-looking
statements made by or on behalf of the Company:
(1) Intense competition may lead to reduced prices, lower sales or
reduced sales growth, and lower gross margins. This includes competition
from alternative business models, such as direct manufacturer to end-user
selling.
(2) The Company's narrow margins magnify the impact on operating
results of variations in operating costs. A number of factors may reduce
the Company's margins. For example, if PC manufacturers substantially
reduce or terminate price protection programs, if PC manufacturers
substantially raise the threshold on sales volume before distributors may
qualify for discounts and/or rebates or reduce the overall amount of
incentives available, if the Company's receivables experience a substantial
deterioration in their collectibility or if the Company cannot obtain
credit insurance at reasonable rates, the Company's financial condition and
results of operations may be adversely impacted.
(3) Seasonal variations in the demand for products and services, as
well as the introduction of new products, may cause variations in the
Company's quarterly results.
(4) The availability (or lack thereof) of capital on acceptable terms
may hamper the Company in its efforts to fund its increasing working
capital needs.
(5) The failure of the Company to adequately manage its growth may
adversely impact the Company's results of operations.
18
19
(6) A failure of the Company's information systems may adversely
impact the Company's results of operations.
(7) Devaluation of a foreign currency, or other disruption of a
foreign market, may adversely impact the Company's operations in that
country or globally.
(8) The loss of a key executive officer or other key employee may
adversely impact the Company's operations.
(9) The inability of the Company to obtain products on favorable terms
may adversely impact the Company's results of operations.
(10) The Company's operations may be adversely impacted by an
acquisition that (i) is not suited for the Company, (ii) is improperly
executed, or (iii) substantially increases the Company's debt.
(11) The Company's financial condition may be adversely impacted by a
decline in value of a portion of the Company's inventory.
(12) The Company may experience an increased risk of credit loss as a
result of reseller customers' businesses being negatively impacted by
dramatic changes in the information technology products and services
industry as well as intense competition among resellers.
(13) The failure of certain shipping companies to deliver product to
the Company, or from the Company to its customers, may adversely impact the
Company's results of operations.
(14) If the Company's inventory suppliers terminate or substantially
reduce the subsidies relating to floor planning financing for the Company's
master reseller business, such change in policy may adversely impact the
Company's financial condition and results of operations.
Reference is made to Exhibit 99.01 hereto for additional discussion of the
foregoing factors, as well as additional factors which may affect the Company's
actual results and cause such results to differ materially from those projected,
forecasted, estimated, budgeted or otherwise expressed in forward-looking
statements.
ITEM 2. PROPERTIES
Ingram Micro's worldwide executive headquarters, as well as its West Coast
sales and support offices, are located in a three-building office complex in
Santa Ana, California. The Company also maintains an East Coast operations
center in Williamsville (Buffalo), New York. In October, 1999, the Company
established an office site in Mississauga (Toronto), Ontario, Canada.
As of March 6, 2000, the Company operates seven distribution centers
throughout the continental United States. The Company also operates 63
distribution centers outside of the U.S. -- in Argentina, Australia, Brazil,
Canada, Chile, China, India, Indonesia, Hong Kong, Malaysia, Mexico, New
Zealand, Norway, Peru, Singapore, Switzerland, Thailand, and most countries of
the European Union.
As of March 6, 2000, the Company operates two integration centers located
in Memphis, Tennessee and 's-Hertogenbosch, The Netherlands. As of the same
date, the Company operates three returns centers, two in Santa Ana, California
and one in Toronto, Canada.
As of March 6, 2000, all of the Company's facilities are leased, with the
exception of the office in Buenos Aires, Argentina and the combination office
and distribution facility in Santiago, Chile. These leases have varying terms.
The Company does not anticipate any material difficulty in renewing any of its
leases as they expire or securing replacement facilities, in each case on
commercially reasonable terms. In addition, the Company owns two undeveloped
properties in Santa Ana, California totaling approximately 16.27 acres, and has
options on approximately 60 acres in Millington, Tennessee.
ITEM 3. LEGAL PROCEEDINGS
There are no material pending legal proceedings to which the Company is a
party or to which any of its property is subject.
19
20
As a result of an internal review by the Company of export shipments made
from its United States distribution facilities, the Company has determined that
certain of these shipments and related documentation were not in compliance with
U.S. export regulations. The Company has notified the appropriate federal
government agencies pursuant to applicable voluntary self-disclosure procedures
(the "Disclosure"). The reported shipments consisted of modems and other
telecommunications products and shrink-wrapped, commercial software readily
available through normal retail outlets that contained encryption features
controlled under export regulations. These shipments had a total value of
approximately $673,240. Violations of export laws and regulations are subject to
both civil and criminal penalties, including in appropriate circumstances
suspension or loss of export privileges. Since the Disclosure, a representative
of the Department of Commerce has requested additional documents relating to the
Disclosure, which the Company provided in January 1999. The Department has not
communicated with the Company since then. The Company does not know what
position the Department will take upon further review of the Disclosure. The
Company is not able to estimate at this time the amount or nature of penalties,
if any, that might be sought against the Company as a result of the reported
violations; however, penalties to which the Company potentially may be subject
could be material.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during the fourth
quarter of the fiscal year covered by this report, through the solicitation of
proxies or otherwise.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
As of March 27, 2000, there were 636 holders of record of the Class A
Common Stock and 134 holders of record of the Class B Common Stock. The Company
believes that there are approximately 35,000 beneficial holders of the Class A
Common Stock.
Information as to the Company's quarterly stock prices is included on the
inside back cover of the Company's 1999 Annual Report to Shareowners, which is
included as part of Exhibit 13.01 and is incorporated in this Annual Report on
Form 10-K.
Information as to the principal market on which the Class A Common Stock is
traded is included on the inside back cover of the Company's 1999 Annual Report
to Shareowners, which is included as part of Exhibit 13.01 and is incorporated
in this Annual Report on Form 10-K.
DIVIDEND POLICY. The Company has not declared or paid any dividends on its
Class A or Class B Common Stock in the preceding two fiscal years. The Company
currently intends to retain its future earnings to finance the growth and
development of its business and, therefore, does not anticipate declaring or
paying cash dividends on its Class A or Class B Common Stock for the foreseeable
future. Any future decision to declare or pay dividends will be at the
discretion of the Board of Directors and will be dependent upon the Company's
financial condition, results of operations, capital requirements, and such other
factors as the Board of Directors deems relevant. In addition, certain of the
Company's debt facilities contain restrictions on the declaration and payment of
dividends.
ITEM 6. SELECTED FINANCIAL DATA
The selected financial information of Ingram Micro for the five year period
ended January 1, 2000 is included on page 18 of the Company's 1999 Annual Report
to Shareowners, which is included as part of Exhibit 13.01 and is incorporated
in this Annual Report on Form 10-K. It should be read in conjunction with the
consolidated financial statements included on pages 30 through 50 of the
Company's 1999 Annual Report to Shareowners which are also included as part of
Exhibit 13.01 and incorporated in this Annual Report on Form 10-K and the
financial statement schedule below in Item 14 of this Annual Report on Form
10-K.
20
21
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Management's Discussion and Analysis of Financial Condition and Results of
Operations is included on pages 19 through 29 of the Company's 1999 Annual
Report to Shareowners, which are also included as part of Exhibit 13.01 and are
incorporated in this Annual Report on Form 10-K.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The required disclosure is included on pages 28 through 29 of the Company's
1999 Annual Report to Shareowners, which is also included as part of Exhibit
13.01 and incorporated in this Annual Report on Form 10-K.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Company's consolidated financial statements are included on pages 30
through 50 of the Company's 1999 Annual Report to Shareowners, which are also
included as part of Exhibit 13.01 and incorporated in this Annual Report on Form
10-K. Reference is made to the Index to the Financial Statements in Item 14
below.
A financial statement schedule for the Company, and report thereon, are
included on pages 27 and 28, respectively, of this Annual Report on Form 10-K.
Reference is made to the Index to Financial Statements in Item 14 below.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
There have been no changes in the Company's independent accountants or
disagreements with such accountants on accounting principles or practices or
financial statement disclosures.
PART III
Information regarding executive officers required by Item 401 of Regulation
S-K is furnished in a separate disclosure in Part I of this report because the
Company will not furnish such information in its definitive Proxy Statement
prepared in accordance with Schedule 14A.
The Notice and Proxy Statement for the 2000 Annual Meeting of Shareowners,
to be filed pursuant to Regulation 14A under the Securities Exchange Act of
1934, as amended, which is incorporated by reference in this Annual Report on
Form 10-K pursuant to General Instruction G(3) of Form 10-K, will provide the
remaining information required under Part III (Items 10, 11, 12, and 13).
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) 1. FINANCIAL STATEMENTS:
The consolidated financial statements, together with the report thereon of
PricewaterhouseCoopers LLP dated February 17, 2000, except as to the second
paragraph of Note 5, which is as of March 8, 2000, all appearing on pages 30
through 51 in the 1999 Annual Report to Shareowners, are incorporated in this
Annual Report on Form 10-K. With the exception of the aforementioned information
and the information incorpo-
21
22
rated in Items 5, 6, 7, 7A and 8, the 1999 Annual Report to Shareowners is not
deemed filed as part of this Annual Report on Form 10-K.
PAGE NO. IN
ANNUAL REPORT
TO SHAREOWNERS
--------------
Index to Financial Information.............................. 17
Consolidated Balance Sheet at January 1, 2000 and January 2,
1999...................................................... 30
Consolidated Statement of Income for the years ended January
1, 2000, January 2, 1999, and January 3, 1998............. 31
Consolidated Statement of Stockholders' Equity for the years
ended January 1, 2000, January 2, 1999, and January 3,
1998...................................................... 32
Consolidated Statement of Cash Flows for the years ended
January 1, 2000, January 2, 1999, and January 3, 1998..... 33
Notes to Consolidated Financial Statements.................. 34
Report of Independent Accountants........................... 51
Pages 18 through 52 and the inside back cover page of the 1999 Annual
Report to Shareowners of Ingram Micro Inc. include the Selected Financial Data,
Management's Discussion and Analysis of Financial Condition and Results of
Operations, the Consolidated Financial Statements and related notes thereto, the
Independent Accountants' Report, Shareholder Information and Quarterly Stock
Prices. These pages are filed with the Securities and Exchange Commission as
Exhibit 13.01 to this Annual Report on Form 10-K.
2. FINANCIAL STATEMENT SCHEDULES:
Schedule II -- Valuation and Qualifying Accounts.
3. LIST OF EXHIBITS:
EXHIBIT
NO. EXHIBIT
------- -------
3.01 Form of Certificate of Incorporation of the Registrant
(incorporated by reference to Exhibit 3.01 to the Company's
Registration Statement on Form S-1 (File No. 333-08453) (the
"IPO S-1"))
3.02 Amended and Restated Bylaws of the Registrant (incorporated
by reference to Exhibit 3.02 to the Company's Annual Report
on Form 10-K for the fiscal year ended January 3, 1998)
10.01 Ingram Micro Inc. 2000 Executive Incentive Bonus Plan
10.02 Reserved
10.03 Reserved
10.04 Reserved
10.05 Reserved
10.06 Amendment No. 1 to the Ingram Micro Inc. Amended and
Restated 1996 Equity Incentive Plan (incorporated by
reference to Exhibit 10.06 to the Company's Annual Report on
Form 10-K for the fiscal year ended January 3, 1998)
10.07 Ingram Micro Inc. Rollover Stock Option Plan (incorporated
by reference to Exhibit 10.07 to the IPO S-1)
10.08 Ingram Micro Inc. Key Employee Stock Purchase Plan
(incorporated by reference to Exhibit 10.08 to the IPO S-1)
10.09 Ingram Micro Inc. 1996 Equity Incentive Plan (incorporated
by reference to Exhibit 10.09 to the IPO S-1)
10.10 Ingram Micro Inc. Amended and Restated 1996 Equity Incentive
Plan (incorporated by reference to Exhibit 10.10 to the IPO
S-1)
22
23
EXHIBIT
NO. EXHIBIT
------- -------
10.11 Reserved
10.12 Credit Agreement dated as of October 30, 1996 among the
Company and Ingram European Coordination Center N.V., Ingram
Micro Singapore Pte Ltd., and Ingram Micro Inc., as
Borrowers and Guarantors, certain financial institutions, as
the Lenders, NationsBank of Texas, N.A., as Administrative
Agent for the Lenders and The Bank of Nova Scotia as
Documentation Agent for the Lenders (incorporated by
reference to Exhibit 10.12 to the Company's Registration
Statement on Form S-1 (File No. 333-16667) (the "Thrift Plan
S-1"))
10.13 Amended and Restated Reorganization Agreement dated as of
October 17, 1996 among the Company, Ingram Industries, and
Ingram Entertainment (incorporated by reference to Exhibit
10.13 to the Thrift Plan S-1)
10.14 Registration Rights Agreement dated as of November 6, 1996
among the Company and the persons listed on the signature
pages thereof (incorporated by reference to Exhibit 10.14 to
the Thrift Plan S-1)
10.15 Board Representation Agreement dated as of November 6, 1996
(incorporated by reference to Exhibit 10.15 to the Thrift
Plan S-1)
10.16 Thrift Plan Liquidity Agreement dated as of November 6, 1996
among the Company and the Ingram Thrift Plan (incorporated
by reference to Exhibit 10.16 to the Thrift Plan S-1)
10.17 Tax Sharing and Tax Services Agreement dated as of November
6, 1996 among the Company, Ingram Industries, and Ingram
Entertainment (incorporated by reference to Exhibit 10.17 to
The Thrift Plan S-1)
10.18 Reserved
10.19 Employee Benefits Transfer and Assumption Agreement dated as
of November 6, 1996 among the Company, Ingram Industries,
and Ingram Entertainment (incorporated by reference to
Exhibit 10.19 to the Thrift Plan S-1)
10.20 Reserved
10.21 Amended and Restated Exchange Agreement dated as of November
6, 1996 among the Company, Ingram Industries, Ingram
Entertainment and the other parties thereto (incorporated by
reference to Exhibit 10.21 to the Thrift Plan S-1)
10.22 Agreement dated as of August 26, 1996 between the Company
and Jerre L. Stead (incorporated by reference to Exhibit
10.22 to the IPO S-1)
10.23 Definitions for Ingram Funding Master Trust Agreements
(incorporated by reference to Exhibit 10.23 to the IPO S-1)
10.24 Asset Purchase and Sale Agreement dated as of February 10,
1993 between Ingram Industries and Ingram Funding Inc.
(incorporated by reference to Exhibit 10.24 to the IPO S-1)
10.25 Pooling and Servicing Agreement dated as of February 10,
1993 among Ingram Funding, Ingram Industries and Chemical
Bank (incorporated by reference to Exhibit 10.25 to the IPO
S-1)
10.26 Amendment No. 1 to the Pooling and Servicing Agreement dated
as of February 12, 1993, the Asset Purchase and Sale
Agreement dated as of February 12, 1993, and the Liquidity
Agreement dated as of February 12, 1993 (incorporated by
reference to Exhibit 10.26 to the IPO S-1)
10.27 Certificate Purchase Agreement dated as of July 23, 1993
(incorporated by reference to Exhibit 10.27 to the IPO S-1)
23
24
EXHIBIT
NO. EXHIBIT
------- -------
10.28 Schedule of Certificate Purchase Agreements (incorporated by
reference to Exhibit 10.28 to the IPO S-1)
10.29 Series 1993-1 Supplement to Ingram Funding Master Trust
Pooling and Servicing Agreement dated as of July 23, 1993
(incorporated by reference to Exhibit 10.29 to the IPO S-1)
10.30 Schedule of Supplements to Ingram Funding Master Trust
Pooling and Servicing Agreement dated as of July 23, 1993
(incorporated by reference to Exhibit 10.30 to the IPO S-1)
10.31 Letter of Credit Reimbursement Agreement dated as of
February 10, 1993 (incorporated by reference to Exhibit
10.31 to the IPO S-1)
10.32 Liquidity Agreement dated as of February 10, 1993
(incorporated by reference to Exhibit 10.32 to the IPO S-1)
10.33 Amendment No. 2 to the Pooling and Servicing Agreement dated
as of February 12, 1993, the Asset Purchase and Sale
Agreement dated as of February 12, 1993, and the Liquidity
Agreement dated as of February 12, 1993 (incorporated by
reference to Exhibit 10.33 to the IPO S-1)
10.34 Reserved
10.35 Form of Repurchase Agreement (incorporated by reference to
Exhibit 10.35 to the IPO S-1)
10.36 First Amendment to the Credit Agreement dated as of October
28, 1997 (incorporated by reference to Exhibit 10.36 to the
Company's Registration Statement on Form S-3 (File No.
333-39457) (the "Rollover/Thrift Plan S-3"))
10.37 European Credit Agreement dated as of October 28, 1997 among
the Company and Ingram European Coordination Center N.V., as
Borrowers and Guarantors, certain financial institutions, as
the Lenders, The Bank of Nova Scotia, as Administrative
Agent for the Lenders and NationsBank of Texas, N.A. as
Documentation Agent for the Lenders, as arranged by The Bank
of Nova Scotia and NationsBanc Capital Markets, Inc., as the
Arrangers (incorporated by reference to Exhibit 10.37 to the
Rollover/Thrift Plan S-3)
10.38 Canadian Credit Agreement dated as of October 28, 1997 among
the Company and Ingram Micro Inc. (Canada), as Borrowers and
Guarantors, certain financial institutions, as the Lenders,
The Bank of Nova Scotia., as Administrative Agent for the
Lenders, Royal Bank of Canada as the Syndication Agent for
the Lenders, and Bank of Tokyo-Mitsubishi (Canada) as the
Co-Agent (incorporated by reference to Exhibit 10.38 to the
Rollover/ Thrift Plan S-3)
10.39 Reserved
10.40 Second Amendment to Credit Agreement dated as of September
25, 1998, among the Company, Ingram European Coordination
Center N.V. ("IECC"), and Ingram Micro Inc. (Canada), as
Borrowers and Guarantors, and certain financial institutions
as the Relevant Required Lenders, amending the
US$1,000,000,000 Credit Agreement dated as of October 30,
1996, also among certain financial institutions, as the
Lenders, NationsBank, N.A (successor in interest by merger
with NationsBank of Texas, N.A.), as Administrative Agent
for the Lenders, and The Bank of Nova Scotia, as
Documentation Agent for the Lenders and certain named
Co-Agents (incorporated by reference to Exhibit 10.40 to the
Company's Quarterly Report on Form 10-Q for the fiscal
quarter ended October 3, 1998 ("the Q3 98 10-Q"))
24
25
EXHIBIT
NO. EXHIBIT
------- -------
10.41 First Amendment to European Credit Agreement dated as of
September 25, 1998, among the Company and IECC as the
Primary Borrowers and Guarantors, and certain financial
institutions as the Relevant Required Lenders, amending the
US$500,000,000 European Credit Agreement dated as of October
28, 1997, also among the Company and IECC, as the Primary
Borrowers and Guarantors, certain financial institutions as
the Lenders, The Bank of Nova Scotia, as Administrative
Agent for the Lenders and NationsBank, N.A. (successor in
interest by merger to NationsBank of Texas, N.A.), as
Documentation Agent for the Lenders, as arranged by The Bank
of Nova Scotia and NationsBanc Capital Markets, Inc., as the
Arrangers (incorporated by reference to Exhibit 10.41 to the
Q3 98 10-Q)
10.42 First Amendment to Canadian Credit Agreement dated as of
September 25, 1998, among the Company and Ingram Micro Inc.
(Canada) as the Borrowers and Guarantors, and certain
financial institutions as the Relevant Required Lenders,
amending the US$150,000,000 Canadian Credit Agreement dated
as of October 28, 1997, also among the Company, Ingram Micro
Inc. (Canada) as the Borrowers and Guarantors, certain
financial institutions as the Lenders, The Bank of Nova
Scotia, as Administrative Agent for the Lenders, Royal Bank
of Canada, as Syndication Agent for the Lenders, and Bank of
Tokyo-Mitsubishi (Canada) as the Co-Agent (incorporated by
reference to Exhibit 10.42 to the Q3 98 10-Q)
10.43 Ingram Micro Supplemental Investment Savings Plan
(incorporated by reference to Exhibit 10.45 to the Company's
Quarterly Report on Form 10-Q for the fiscal quarter ended
July 3, 1999)
10.44 Ingram Micro Inc. 1998 Equity Incentive Plan (incorporated
by reference to Exhibit 10.43 to the 1998 10K)
10.45 Registration Agreement dated as of December 3, 1999 between
the Company and Softbank Corp. (incorporated by reference to
Exhibit 4.01 to the Company's Registration Statement on Form
S-3 (File No. 333-93783) (the "1999 S-3"))
10.46 Warrant Agreement dated as of December 3, 1999 between the
Company and Softbank Corp. (incorporated by reference to
Exhibit 4.02 to the 1999 S-3)
10.47 Agreement with Jeffrey R. Rodek, dated October 31, 1999
10.48 Executive Retention Agreement with Michael J. Grainger,
dated January 31, 2000
10.49 Executive Retention Agreement with Kevin M. Murai, dated
January 31, 2000
10.50 Executive Retention Agreement with Gregory M.E. Spierkel,
dated January 31, 2000
10.51 Executive Retention Agreement with Henri T. Koppen, dated
January 31, 2000
10.52 Executive Retention Agreement with Guy P. Abramo, dated
January 31, 2000
10.53 Executive Retention Agreement with James E. Anderson, Jr.,
dated January 31, 2000
10.54 Executive Retention Agreement with David M. Finley, dated
January 31, 2000
10.55 Employment Agreement with Kent B. Foster, dated March 6,
2000
10.56 Amended and Restated Pooling Agreement dated as of March 8,
2000 among Ingram Funding Inc. ("Funding"), the Company and
The Chase Manhattan Bank ("Chase"), as trustee (the "Amended
Pooling Agreement")
10.57 Amended and Restated Receivables Sale Agreement dated as of
March 8, 2000 between Funding, as Purchaser, and the
Company, as Seller and Servicer
10.58 Amended and Restated Servicing Agreement dated as of March
8, 2000 among Funding, the Company as Master Servicer and
Servicer, and Chase
25
26
EXHIBIT
NO. EXHIBIT
------- -------
10.59 Series 2000-1 Supplement to the Amended Pooling Agreement
dated as of March 8, 2000 among Funding, the Company and
Chase
10.60 Series 1994-2 Supplement to the Amended Pooling Agreement
dated as of March 8, 2000 among Funding, the Company and
Chase
10.61 Series 1994-3 Supplement to the Amended Pooling Agreement
dated as of March 8, 2000 among Funding, the Company and
Chase
10.62 Series 1993-2 Supplement to the Amended Pooling Agreement
dated as of March 8, 2000 among Funding, the Company and
Chase
10.63 Agreement dated March 8, 2000 among the Company, Funding and
General Electric Capital Corporation
13.01 Portions of Annual Report to Shareowners for the year ended
January 1, 2000
21.01 Subsidiaries of the Registrant
23.01 Consent of Independent Accountants regarding certain
Registration Statements on Form S-8
23.02 Consent of Independent Accountants regarding Registration
Statements on Form S-3
27.01 Financial Data Schedule (included in electronic version
only)
99.01 Cautionary Statements for Purposes of the "Safe Harbor"
Provisions of the Private Securities Litigation Reform Act
of 1995
(b) REPORTS ON FORM 8-K
No reports on Form 8-K were filed during the fiscal quarter ended January
1, 2000.
26
27
INGRAM MICRO INC.
SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
(IN THOUSANDS)
BALANCE AT CHARGED TO
BEGINNING COSTS AND BALANCE AT
DESCRIPTION OF YEAR EXPENSES DEDUCTIONS OTHER(*) END OF YEAR
----------- ---------- ---------- ---------- -------- -----------
ALLOWANCE FOR DOUBTFUL ACCOUNTS
RECEIVABLE AND SALES RETURNS:
1999............................... $55,904 $75,835 $(42,788) $11,803 $100,754
1998............................... 48,541 32,534 (31,200) 6,029 55,904
1997............................... 38,622 31,652 (27,102) 5,369 48,541
INVENTORY OBSOLESCENCE:
1999............................... $18,394 $94,756 $(54,370) $ 6,493 $ 65,273
1998............................... 18,886 26,129 (27,554) 933 18,394
1997............................... 13,326 21,524 (20,201) 4,237 18,886
- ---------------
* Other includes recoveries, acquisitions and the effect of fluctuation in
foreign currency.
27
28
REPORT OF INDEPENDENT ACCOUNTANTS ON
FINANCIAL STATEMENT SCHEDULE
To the Board of Directors of Ingram Micro Inc.
Our audits of the consolidated financial statements referred to in our report
dated February 17, 2000, except as to the second paragraph of Note 5, which is
as of March 8, 2000, appearing in the 1999 Annual Report to Shareowners of
Ingram Micro Inc. (which report and consolidated financial statements are
incorporated by reference in this Annual Report on Form 10-K) also included an
audit of the financial statement schedule listed in Item 14(a)(2) of this Form
10-K. In our opinion, this financial statement schedule presents fairly, in all
material respects, the information set forth therein when read in conjunction
with the related consolidated financial statements.
/s/ PRICEWATERHOUSECOOPERS LLP
PricewaterhouseCoopers LLP
Costa Mesa, California
February 17, 2000, except as to
the second paragraph of Note 5,
which is as of March 8, 2000
28
29
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
INGRAM MICRO INC.
By: /s/ JAMES E. ANDERSON, JR.
------------------------------------
James E. Anderson, Jr.,
Senior Vice President,
Secretary and General Counsel
March 31, 2000
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ KENT B. FOSTER Chief Executive Officer and March 31, 2000
- ----------------------------------------------------- President (Principal Executive
Kent B. Foster Officer) and Director
/s/ MICHAEL J. GRAINGER Executive Vice President and March 31, 2000
- ----------------------------------------------------- Worldwide Chief Financial
Michael J. Grainger Officer (Principal Financial
Officer and Principal
Accounting Officer)
/s/ JERRE L. STEAD Chairman of the Board March 31, 2000
- -----------------------------------------------------
Jerre L. Stead
/s/ DON H. DAVIS, JR. Director March 31, 2000
- -----------------------------------------------------
Don H. Davis, Jr.
/s/ JOHN R. INGRAM Director March 31, 2000
- -----------------------------------------------------
John R. Ingram
/s/ MARTHA R. INGRAM Director March 31, 2000
- -----------------------------------------------------
Martha R. Ingram
/s/ ORRIN H. INGRAM II Director March 31, 2000
- -----------------------------------------------------
Orrin H. Ingram II
/s/ PHILIP M. PFEFFER Director March 31, 2000
- -----------------------------------------------------
Philip M. Pfeffer
/s/ GERHARD SCHULMEYER Director March 31, 2000
- -----------------------------------------------------
Gerhard Schulmeyer
/s/ JOE B. WYATT Director March 31, 2000
- -----------------------------------------------------
Joe B. Wyatt
29
30
EXHIBIT INDEX
EXHIBIT
NO. EXHIBIT
------- -------
3.01 Form of Certificate of Incorporation of the Registrant
(incorporated by reference to Exhibit 3.01 to the Company's
Registration Statement on Form S-1 (File No. 333-08453) (the
"IPO S-1"))
3.02 Amended and Restated Bylaws of the Registrant (incorporated
by reference to Exhibit 3.02 to the Company's Annual Report
on Form 10-K for the fiscal year ended January 3, 1998)
10.01 Ingram Micro Inc. 2000 Executive Incentive Bonus Plan
10.02 Reserved
10.03 Reserved
10.04 Reserved
10.05 Reserved
10.06 Amendment No. 1 to the Ingram Micro Inc. Amended and
Restated 1996 Equity Incentive Plan (incorporated by
reference to Exhibit 10.06 to the Company's Annual Report on
Form 10-K for the fiscal year ended January 3, 1998)
10.07 Ingram Micro Inc. Rollover Stock Option Plan (incorporated
by reference to Exhibit 10.07 to the IPO S-1)
10.08 Ingram Micro Inc. Key Employee Stock Purchase Plan
(incorporated by reference to Exhibit 10.08 to the IPO S-1)
10.09 Ingram Micro Inc. 1996 Equity Incentive Plan (incorporated
by reference to Exhibit 10.09 to the IPO S-1)
10.10 Ingram Micro Inc. Amended and Restated 1996 Equity Incentive
Plan (incorporated by reference to Exhibit 10.10 to the IPO
S-1)
10.11 Reserved
10.12 Credit Agreement dated as of October 30, 1996 among the
Company and Ingram European Coordination Center N.V., Ingram
Micro Singapore Pte Ltd., and Ingram Micro Inc., as
Borrowers and Guarantors, certain financial institutions, as
the Lenders, NationsBank of Texas, N.A., as Administrative
Agent for the Lenders and The Bank of Nova Scotia as
Documentation Agent for the Lenders (incorporated by
reference to Exhibit 10.12 to the Company's Registration
Statement on Form S-1 (File No. 333-16667) (the "Thrift Plan
S-1"))
10.13 Amended and Restated Reorganization Agreement dated as of
October 17, 1996 among the Company, Ingram Industries, and
Ingram Entertainment (incorporated by reference to Exhibit
10.13 to the Thrift Plan S-1)
10.14 Registration Rights Agreement dated as of November 6, 1996
among the Company and the persons listed on the signature
pages thereof (incorporated by reference to Exhibit 10.14 to
the Thrift Plan S-1)
10.15 Board Representation Agreement dated as of November 6, 1996
(incorporated by reference to Exhibit 10.15 to the Thrift
Plan S-1)
10.16 Thrift Plan Liquidity Agreement dated as of November 6, 1996
among the Company and the Ingram Thrift Plan (incorporated
by reference to Exhibit 10.16 to the Thrift Plan S-1)
10.17 Tax Sharing and Tax Services Agreement dated as of November
6, 1996 among the Company, Ingram Industries, and Ingram
Entertainment (incorporated by reference to Exhibit 10.17 to
The Thrift Plan S-1)
10.18 Reserved
30
31
EXHIBIT
NO. EXHIBIT
------- -------
10.19 Employee Benefits Transfer and Assumption Agreement dated as
of November 6, 1996 among the Company, Ingram Industries,
and Ingram Entertainment (incorporated by reference to
Exhibit 10.19 to the Thrift Plan S-1)
10.20 Reserved
10.21 Amended and Restated Exchange Agreement dated as of November
6, 1996 among the Company, Ingram Industries, Ingram
Entertainment and the other parties thereto (incorporated by
reference to Exhibit 10.21 to the Thrift Plan S-1)
10.22 Agreement dated as of August 26, 1996 between the Company
and Jerre L. Stead (incorporated by reference to Exhibit
10.22 to the IPO S-1)
10.23 Definitions for Ingram Funding Master Trust Agreements
(incorporated by reference to Exhibit 10.23 to the IPO S-1)
10.24 Asset Purchase and Sale Agreement dated as of February 10,
1993 between Ingram Industries and Ingram Funding Inc.
(incorporated by reference to Exhibit 10.24 to the IPO S-1)
10.25 Pooling and Servicing Agreement dated as of February 10,
1993 among Ingram Funding, Ingram Industries and Chemical
Bank (incorporated by reference to Exhibit 10.25 to the IPO
S-1)
10.26 Amendment No. 1 to the Pooling and Servicing Agreement dated
as of February 12, 1993, the Asset Purchase and Sale
Agreement dated as of February 12, 1993, and the Liquidity
Agreement dated as of February 12, 1993 (incorporated by
reference to Exhibit 10.26 to the IPO S-1)
10.27 Certificate Purchase Agreement dated as of July 23, 1993
(incorporated by reference to Exhibit 10.27 to the IPO S-1)
10.28 Schedule of Certificate Purchase Agreements (incorporated by
reference to Exhibit 10.28 to the IPO S-1)
10.29 Series 1993-1 Supplement to Ingram Funding Master Trust
Pooling and Servicing Agreement dated as of July 23, 1993
(incorporated by reference to Exhibit 10.29 to the IPO S-1)
10.30 Schedule of Supplements to Ingram Funding Master Trust
Pooling and Servicing Agreement dated as of July 23, 1993
(incorporated by reference to Exhibit 10.30 to the IPO S-1)
10.31 Letter of Credit Reimbursement Agreement dated as of
February 10, 1993 (incorporated by reference to Exhibit
10.31 to the IPO S-1)
10.32 Liquidity Agreement dated as of February 10, 1993
(incorporated by reference to Exhibit 10.32 to the IPO S-1)
10.33 Amendment No. 2 to the Pooling and Servicing Agreement dated
as of February 12, 1993, the Asset Purchase and Sale
Agreement dated as of February 12, 1993, and the Liquidity
Agreement dated as of February 12, 1993 (incorporated by
reference to Exhibit 10.33 to the IPO S-1)
10.34 Reserved
10.35 Form of Repurchase Agreement (incorporated by reference to
Exhibit 10.35 to the IPO S-1)
10.36 First Amendment to the Credit Agreement dated as of
October28, 1997 (incorporated by reference to Exhibit 10.36
to the Company's Registration Statement on Form S-3 (File
No. 333-39457) (the "Rollover/Thrift Plan S-3"))
31
32
EXHIBIT
NO. EXHIBIT
------- -------
10.37 European Credit Agreement dated as of October 28, 1997 among
the Company and Ingram European Coordination Center N.V., as
Borrowers and Guarantors, certain financial institutions, as
the Lenders, The Bank of Nova Scotia, as Administrative
Agent for the Lenders and NationsBank of Texas, N.A. as
Documentation Agent for the Lenders, as arranged by The Bank
of Nova Scotia and NationsBanc Capital Markets, Inc., as the
Arrangers (incorporated by reference to Exhibit 10.37 to the
Rollover/Thrift Plan S-3)
10.38 Canadian Credit Agreement dated as of October 28, 1997 among
the Company and Ingram Micro Inc. (Canada), as Borrowers and
Guarantors, certain financial institutions, as the Lenders,
The Bank of Nova Scotia., as Administrative Agent for the
Lenders, Royal Bank of Canada as the Syndication Agent for
the Lenders, and Bank of Tokyo-Mitsubishi (Canada) as the
Co-Agent (incorporated by reference to Exhibit 10.38 to the
Rollover/ Thrift Plan S-3)
10.39 Reserved
10.40 Second Amendment to Credit Agreement dated as of September
25, 1998, among the Company, Ingram European Coordination
Center N.V. ("IECC"), and Ingram Micro Inc. (Canada), as
Borrowers and Guarantors, and certain financial institutions
as the Relevant Required Lenders, amending the
US$1,000,000,000 Credit Agreement dated as of October 30,
1996, also among certain financial institutions, as the
Lenders, NationsBank, N.A (successor in interest by merger
with NationsBank of Texas, N.A.), as Administrative Agent
for the Lenders, and The Bank of Nova Scotia, as
Documentation Agent for the Lenders and certain named
Co-Agents (incorporated by reference to Exhibit 10.40 to the
Company's Quarterly Report on Form 10-Q for the fiscal
quarter ended October 3, 1998 ("the Q3 98 10-Q"))
10.41 First Amendment to European Credit Agreement dated as of
September 25, 1998, among the Company and IECC as the
Primary Borrowers and Guarantors, and certain financial
institutions as the Relevant Required Lenders, amending the
US$500,000,000 European Credit Agreement dated as of October
28, 1997, also among the Company and IECC, as the Primary
Borrowers and Guarantors, certain financial institutions as
the Lenders, The Bank of Nova Scotia, as Administrative
Agent for the Lenders and NationsBank, N.A. (successor in
interest by merger to NationsBank of Texas, N.A.), as
Documentation Agent for the Lenders, as arranged by The Bank
of Nova Scotia and NationsBanc Capital Markets, Inc., as the
Arrangers (incorporated by reference to Exhibit 10.41 to the
Q3 98 10-Q)
10.42 First Amendment to Canadian Credit Agreement dated as of
September 25, 1998, among the Company and Ingram Micro Inc.
(Canada) as the Borrowers and Guarantors, and certain
financial institutions as the Relevant Required Lenders,
amending the US$150,000,000 Canadian Credit Agreement dated
as of October 28, 1997, also among the Company, Ingram Micro
Inc. (Canada) as the Borrowers and Guarantors, certain
financial institutions as the Lenders, The Bank of Nova
Scotia, as Administrative Agent for the Lenders, Royal Bank
of Canada, as Syndication Agent for the Lenders, and Bank of
Tokyo-Mitsubishi (Canada) as the Co-Agent (incorporated by
reference to Exhibit 10.42 to the Q3 98 10-Q)
10.43 Ingram Micro Supplemental Investment Savings Plan
(incorporated by reference to Exhibit 10.45 to the Company's
Quarterly Report on Form 10-Q for the fiscal quarter ended
July 3, 1999)
10.44 Ingram Micro Inc. 1998 Equity Incentive Plan (incorporated
by reference to Exhibit 10.43 to the 1998 10K)
32
33
EXHIBIT
NO. EXHIBIT
------- -------
10.45 Registration Agreement dated as of December 3, 1999 between
the Company and Softbank Corp. (incorporated by reference to
Exhibit 4.01 to the Company's Registration Statement on Form
S-3 (File No. 333-93783) (the "1999 S-3"))
10.46 Warrant Agreement dated as of December 3, 1999 between the
Company and Softbank Corp. (incorporated by reference to
Exhibit 4.02 to the 1999 S-3)
10.47 Agreement with Jeffrey R. Rodek, dated October 31, 1999
10.48 Executive Retention Agreement with Michael J. Grainger,
dated January 31, 2000
10.49 Executive Retention Agreement with Kevin M. Murai, dated
January 31, 2000
10.50 Executive Retention Agreement with Gregory M.E. Spierkel,
dated January 31, 2000
10.51 Executive Retention Agreement with Henri T. Koppen, dated
January 31, 2000
10.52 Executive Retention Agreement with Guy P. Abramo, dated
January 31, 2000
10.53 Executive Retention Agreement with James E. Anderson, Jr.,
dated January 31, 2000
10.54 Executive Retention Agreement with David M. Finley, dated
January 31, 2000
10.55 Employment Agreement with Kent B. Foster, dated March 6,
2000
10.56 Amended and Restated Pooling Agreement dated as of March 8,
2000 among Ingram Funding Inc. ("Funding"), the Company and
The Chase Manhattan Bank ("Chase"), as trustee (the "Amended
Pooling Agreement")
10.57 Amended and Restated Receivables Sale Agreement dated as of
March 8, 2000 between Funding, as Purchaser, and the
Company, as Seller and Servicer
10.58 Amended and Restated Servicing Agreement dated as of March
8, 2000 among Funding, the Company as Master Servicer and
Servicer, and Chase, as trustee
10.59 Series 2000-1 Supplement to the Amended Pooling Agreement
dated as of March 8, 2000 among Funding, the Company and
Chase
10.60 Series 1994-2 Supplement to the Amended Pooling Agreement
dated as of March 8, 2000 among Funding, the Company and
Chase
10.61 Series 1994-3 Supplement to the Amended Pooling Agreement
dated as of March 8, 2000 among Funding, the Company and
Chase
10.62 Series 1993-2 Supplement to the Amended Pooling Agreement
dated as of March 8, 2000 among Funding, the Company and
Chase
10.63 Agreement dated March 8, 2000 among the Company, Funding and
General Electric Capital Corporation
13.01 Portions of Annual Report to Shareowners for the year ended
January 1, 2000
21.01 Subsidiaries of the Registrant
23.01 Consent of Independent Accountants regarding certain
Registration Statements on Form S-8
23.02 Consent of Independent Accountants regarding Registration
Statements on Form S-3
27.01 Financial Data Schedule (included in electronic version
only)
99.01 Cautionary Statements for Purposes of the "Safe Harbor"
Provisions of the Private Securities Litigation Reform Act
of 1995
33