Unless otherwise stated, all currency amounts, other than per share information, contained in this Management's Discussion and Analysis of Financial Condition and Results of Operations are stated in thousands.

The following discussion contains forward-looking statements, including, but not limited to, management's expectations of competition; market share; revenues, margin, expenses and other operating results and ratios; economic conditions; vendor terms and conditions; deployment of enterprise systems; process and efficiency enhancements; synergies and cost-savings; cash flows; inventory levels; working capital days; capital expenditures; liquidity; capital requirements; impact of acquisitions and integration and other related costs; operating models; exchange rate fluctuations and related currency gains or losses; resolution of contingencies; seasonality; interest rates and expenses; taxes; and rates of return. Additionally, in connection with our recent acquisition of Brightpoint, Inc. ("BrightPoint") as discussed below, important risk factors that could cause actual results to differ materially from those discussed in the forward-looking statements include, without limitation:
BrightPoint's business may not perform as expected due to transaction-related uncertainty among vendors, customers and associates or other factors; growth of the mobility industry; management's ability to execute its strategies and objectives for future operations, including the execution of integration plans; our ability to maintain access to adequate levels of capital at reasonable rates; and our ability to achieve the expected benefits and manage the expected costs of the transaction. In evaluating our business, readers should carefully consider the important factors included in Item 1A "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2011, as filed with the Securities and Exchange Commission as well as those included in Part II Item 1A "Risk Factors" of this Form 10-Q.

We disclaim any duty to update any forward-looking statements.

Overview of Our Business

We are the largest wholesale distributor of information technology, or IT, products and supply chain solutions worldwide based on revenues. We offer a broad range of IT products and supply chain solutions and help generate demand and create efficiencies for our customers and suppliers around the world. Our results of operations have been, and will continue to be, directly affected by the conditions in the economy in general. The IT distribution industry in which we operate is characterized by narrow gross profit as a percentage of net sales, or gross margin, and narrow income from operations as a percentage of net sales, or operating margin. Historically, our margins have also been impacted by pressures from price competition and declining average selling prices, as well as changes in vendor terms and conditions, including, but not limited to, variations in vendor rebates and incentives, our ability to return inventory to vendors, and time periods qualifying for price protection. We expect competitive pricing pressures and restrictive vendor terms and conditions to continue in the foreseeable future. In addition, our margins have been and may continue to be impacted by our inventory levels, which are based on projections of future demand, product availability, product acceptance and marketability, and market conditions. Any sudden decline in demand and/or rapid technological changes in products could cause us to have a charge for excess and/or obsolete inventory. To mitigate these factors, we periodically implement changes to and continue to refine our pricing strategies, inventory management processes and vendor program processes. In addition, we continuously monitor and work to change, as appropriate, certain terms, conditions and credit offered to our customers to reflect those being imposed by our vendors, to recover costs and/or to facilitate sales opportunities. We have also strived to improve our profitability through diversification of product offerings, including our presence in specialty product categories, such as automatic identification/data capture and point-of-sale, or AIDC/POS, enterprise computing, cloud computing, consumer electronics and fee-for-service logistics offerings. Our business also requires significant levels of working capital primarily to finance trade accounts receivable and inventory. We have historically relied, and continue to rely heavily, on trade credit from vendors, available cash, debt and factoring of trade accounts receivable for our working capital needs.

Management's Discussion and Analysis Continued

We have complemented our internal growth initiatives with strategic business acquisitions. We have expanded our value-added distribution of mobile data and AIDC/POS solutions over the past few years through acquisitions of the distribution businesses of Eurequat SA, Intertrade A.F. AG, Paradigm Distribution Ltd. and Symtech Nordic AS in Europe, and Vantex Technology Distribution Limited and the Cantechs Group in Asia-Pacific. We have also expanded our presence in the mid-range enterprise market through the acquisitions of Computacenter Distribution, Albora Soluciones SL, interAct BVBA and Aretê Sistemas S.A., or Aretê, in Europe, and Value Added Distributors Limited and Asiasoft Hong Kong Limited in Asia-Pacific.

In July 2012, we announced the signing of a definitive agreement to acquire BrightPoint, a U.S. publicly traded company and a global leader in providing device lifecycle services to the wireless industry. BrightPoint had net sales of $5,200,000 and earnings from operations of $73,000 for the year ended December 31, 2011. We acquired all of the outstanding shares of BrightPoint on October 15, 2012. We believe this acquisition will greatly enhance our global position in mobility as well as our fee-for-service logistics offerings. We expect to realize annual cost synergies and efficiencies in excess of $55,000 by 2014, and the transaction is currently estimated to be accretive to earnings per share by approximately $0.18 per diluted share in 2013 and $0.35 per diluted share in 2014, excluding one-time charges and integration costs.

On August 13, 2012, we announced the signing of a definitive agreement to acquire certain IT distribution businesses of Aptec Holdings Ltd. ("Aptec"), a Dubai-based value-added distributor in the Middle East and Africa, with products and solutions covering data center, storage, security, networking and software categories, including technical services. We acquired Aptec, excluding its Turkey and Saudi Arabia businesses, on September 30, 2012 (the first day of our fiscal fourth quarter). The acquisitions of the excluded Aptec business units are expected to close within the next two quarters. This acquisition broadens our reach into the Middle East and Africa, while also building our portfolio of higher margin value-added distribution business.

We manage our business through continuous cost controls and process and efficiency enhancements. This may also include, from time to time, reorganization actions to further enhance productivity and profitability and could result in the recognition of reorganization costs or impairment of assets.

We are currently in the process of migrating our operations from our legacy proprietary system that was developed in the late-1980s to SAP systems in a phased, country-by-country approach over the next several years. We completed our first deployment in Singapore in 2009. In the period since, we have deployed SAP in New Zealand, Indonesia, Malaysia, Chile, Belgium and the Netherlands, and have also deployed the SAP financial modules in North America. In February 2011, we also deployed the new system in Australia, one of our largest operations. This deployment was somewhat unique in that Australia operated on a different legacy enterprise system than all of our other operations and had recently implemented Ingram Micro's warehouse management system, designed for our largest, most sophisticated distribution centers. Australia was the first country with this warehouse management system to deploy SAP. These features made the Australian conversion more complex than those we had previously undertaken in other countries. Connectivity between the new system and those of our warehouse and partners, and the ramp-up of effective order processing, did not run as we planned. In addition, the customer experience with the new system was not as robust as what we were providing with our legacy systems. As a result of these challenges, our sales and profitability in Australia were significantly negatively impacted. We believe we have addressed the customer-service and order management functionality of the new system and are currently deploying these upgrades to better meet our customers' needs. The pace of recovery of revenues and profitability in Australia have also been impacted by a weaker local market and have remained subdued in the first nine months of 2012, and we expect the year-over-year improvement to be somewhat tempered at least through the next few quarters as we continue to rebuild vendor and customer relationships. We have adjusted our SAP system deployment schedule to allow for the deployment of the enhanced functionality globally. However, we can make no assurances that we will not have disruptions, delays and/or negative business impacts from forthcoming deployments.

Management's Discussion and Analysis Continued



Operations

The following tables set forth our net sales by geographic region, excluding
intercompany sales, and the percentage of total net sales represented thereby,
as well as operating income and operating margin by geographic region, for each
of the periods indicated:



                                                   Thirteen Weeks Ended                                     Thirty-nine Weeks Ended
                                        September 29,                 October 1,                  September 29,                   October 1,
                                            2012                         2011                          2012                          2011
Net sales by geographic region:
North America                      $ 3,972,208        44.0 %    $ 3,769,733        42.4 %    $ 11,416,399        43.2 %    $ 11,036,595        41.8 %
Europe                               2,420,425        26.8        2,653,054        29.8         7,527,622        28.4         8,169,408        31.0
Asia-Pacific                         2,174,409        24.0        2,059,944        23.1         6,162,273        23.3         5,955,784        22.6
Latin America                          467,099         5.2          420,289         4.7         1,341,123         5.1         1,213,970         4.6

Total                              $ 9,034,141       100.0 %    $ 8,903,020       100.0 %    $ 26,447,417       100.0 %    $ 26,375,757       100.0 %

                                                 Thirteen Weeks Ended                               Thirty-nine Weeks Ended
                                       September 29,               October 1,               September 29,               October 1,
                                            2012                      2011                      2012                       2011
Operating income and operating
margin by geographic region:
North America                       $ 66,935        1.69 %    $ 64,247        1.70 %    $ 205,313        1.80 %    $ 190,984        1.73 %
Europe                                14,498        0.60        16,198        0.61         51,412        0.68         65,195        0.80
Asia-Pacific                           9,193        0.42         7,773        0.38         38,447        0.62         32,482        0.55
Latin America                          9,263        1.98         6,241        1.48         21,128        1.58         18,988        1.56
Stock-based compensation expense      (7,240 )        -         (9,080 )        -         (21,815 )        -         (25,068 )        -

Total                               $ 92,649        1.03 %    $ 85,379        0.96 %    $ 294,485        1.11 %    $ 282,581        1.07 %

We sell finished products purchased from many vendors and generated approximately 21%, 10% and 11% of our consolidated net sales for the thirty-nine weeks ended September 29, 2012 from Hewlett-Packard Company, Cisco Systems, Inc., and Apple Inc., respectively. For the thirty-nine weeks ended October 1, 2011, we generated approximately 22%, 11% and 6% of our consolidated net sales from products purchased from Hewlett-Packard Company, Cisco Systems, Inc. and Apple Inc., respectively. There were no other vendors or any customers that represented 10% or more of our consolidated net sales in either of the periods presented.

The following table sets forth certain items from our consolidated statement of income as a percentage of net sales, for each of the periods indicated (percentages below may not total due to rounding).

                                                Thirteen Weeks Ended                       Thirty-nine Weeks Ended
                                         September 29,           October 1,          September 29,            October 1,
                                              2012                  2011                  2012                   2011
Net sales                                         100.00 %            100.00 %                100.00 %             100.00 %
Cost of sales                                      94.98               95.05                   94.80                94.87

Gross profit                                        5.02                4.95                    5.20                 5.13
Operating expenses:
Selling, general and administrative                 3.94                3.98                    4.06                 4.06
Reorganization costs                                0.06                0.01                    0.03                 0.00

Income from operations                              1.03                0.96                    1.11                 1.07
Other expense, net                                  0.20                0.21                    0.18                 0.19

Income before income taxes                          0.83                0.75                    0.93                 0.88
Provision for income taxes                          0.24                0.49                    0.16                 0.35

Net income                                          0.59 %              0.26 %                  0.77 %               0.53 %

Management's Discussion and Analysis Continued

Results of Operations for the Thirteen Weeks Ended September 29, 2012 Compared to the

Thirteen Weeks Ended October 1, 2011

Our consolidated net sales increased 1.5% to $9,034,141 for the thirteen weeks ended September 29, 2012 or third quarter of 2012, from $8,903,020 for the thirteen weeks ended October 1, 2011, or third quarter of 2011. Net sales from our North American, Asia-Pacific and Latin American operations increased by 5.4%, 5.6% and 11.1%, respectively, in the third quarter of 2012 compared to the third quarter of 2011. In our European operations, net sales declined by 8.8% in the third quarter of 2012 compared to the prior year quarter. The translation impacts of weaker European, Asia-Pacific and Latin American currencies relative to the U.S. dollar had negative impacts of approximately 10, 5 and 8 percentage points in the respective regions' net sales with a combined negative effect of approximately five percentage points on our consolidated net sales. The year-over-year increase in our North American net sales was driven by solid growth in all U.S. business divisions, including double-digit increases in higher margin businesses of physical security, accessories and fee-for-service logistics, offset partially by a decline in our Canadian operation primarily due to soft economic conditions and the non-recurrence of a special promotional program by a large vendor that drove strong Canadian sales last year. The year-over-year decrease in our European net sales was primarily attributable to the translation impacts of European currencies, as discussed above. Our European net sales increased in local currency led by solid growth in Germany, the UK and France, offset by continued weakness in the Southern European and Benelux countries, all of which continue to experience challenging economic conditions. The year-over-year increase in our Asia-Pacific net sales was primarily attributable to the strong growth in two of our largest operations, China and India. We continued to experience challenges in Australia, which negatively affected the region's revenue growth by two percentage points, but did not have a significant impact on the consolidated revenue growth. The year-over-year increase in our Latin American net sales primarily reflects continued robust demand in most countries in which we operate, despite the negative impact of foreign exchange translation discussed above.

Gross margin increased seven basis points to 5.02% in the third quarter of 2012 from 4.95% in the third quarter of 2011. The increase year-over-year is primarily attributable to revenue growth from the higher margin businesses in North America, partially offset by a greater mix of high volume, lower gross margin sales. Gross margin, however, continues to be impacted by a highly competitive selling environment in many countries, particularly in the more commoditized product lines of our broadline business, as well as strong sales growth in tablets and other personal devices, the majority of which are delivered to the market in a high velocity, yet lower cost to serve model. We continuously evaluate and modify our pricing policies and certain terms, conditions and credit offered to our customers to reflect general market conditions, available vendor support and strategic opportunities to grow market share and to optimize our profitability and return on capital. These modifications may result in some volatility in our gross margin. Increased competition, product mix or any weakening of economies throughout the world may hinder our ability to maintain and/or improve gross margins from the levels realized in recent periods.

Total selling, general and administrative expenses, or SG&A, expenses, increased $1,790, or 0.5%, in the third quarter of 2012 compared to the third quarter of 2011, but decreased four basis points, as a percentage of consolidated net sales, to 3.94% in the third quarter of 2012 from 3.98% in the third quarter of 2011. The year-over-year increase in SG&A expenses was primarily attributable to the variable costs associated with growth in volume of business; investments in new growth initiatives; and $2,267 in costs associated primarily with our recent acquisition of BrightPoint; partially offset by translation impacts of foreign currencies, which yielded an approximate $13,000 reduction year-over-year; our continued cost control management; and a decrease in stock-based compensation expense of $1,840, primarily due to lower estimated achievement in one of our long-term incentive compensation plans largely as a result of the business disruptions in Australia.

During the third quarter of 2012, we incurred net reorganization costs of $5,268 related to employee termination benefits for workforce reductions primarily in Asia-Pacific ($3,832) and Europe ($1,582), partially offset by reorganization credits of $146 primarily in North America and Europe to reflect lower than expected costs associated with facility consolidations and employee termination benefits for workforce reductions recorded in prior periods (see Note 8 to our consolidated financial statements). In the third quarter of 2011, we incurred a net reorganization cost of $1,156 consisting of employee termination benefits for workforce reductions in our Australian operations in Asia-Pacific and adjustments to previous actions to reflect higher than expected costs to settle lease obligations in North America.

Management's Discussion and Analysis Continued

Operating margin was 1.03% in the third quarter of 2012 compared to 0.96% in the third quarter of 2011. The year-over-year increase in our consolidated operating margin primarily reflects the increase in our gross margin and lower SG&A expenses as a percentage of consolidated net sales, offset by higher reorganization costs as a percentage of consolidated net sales, as discussed above. Our North American operating margin remained relatively stable at 1.69% in the third quarter of 2012 compared to 1.70% in the third quarter of 2011. The growth in higher margin specialty businesses and logistics service was largely offset by the costs associated with the BrightPoint acquisition of approximately six basis points. Our European operating margin also remained relatively stable at 0.60% in the third quarter of 2012 compared to 0.61% in the third quarter of 2011. Our European operating margin reflects the impact of reorganization costs of six basis points as well as continued macro-economic challenges and competitive environment throughout the region, which were largely mitigated by successful cost control measures. Our Asia-Pacific operating margin increased to 0.42% in the third quarter of 2012 from 0.38% in the third quarter of 2011. Our Australian operations continue to experience modest improvements compared to the prior year quarter, however the overall economic situation in the country continues to be challenging and the selling environment remained highly competitive during the quarter. Australia negatively impacted the region's operating profitability by 78 basis points in the third quarter of 2012 compared to 93 basis points in the third quarter of 2011. For the rest of the region, operating margin declined primarily due to the sales mix, which was influenced by strong sales of high velocity, lower margin products and fulfillment sales. Our Latin American operating margin increased to 1.98% in the third quarter of 2012 from 1.48% in the third quarter of 2011 with good cost control and leverage on the robust growth. We continuously evaluate and may implement further process improvements and other changes in order to enhance profitability over the long-term. Such changes, if any, along with normal seasonal variations in net sales, may cause operating margins to fluctuate from quarter to quarter.

Other expense, net, consisted primarily of interest expense and income, foreign currency exchange losses and other non-operating gains and losses. We incurred other expenses of $17,623 in the third quarter of 2012 compared to $18,285 in the third quarter of 2011. The year-over-year decrease is primarily attributable to the loss of $5,624 from the termination of our cash flow hedge and write-off of the remaining unamortized deferred financing costs related to the settlement of our senior unsecured term loan in September 2011, offset partially by higher interest expense as a result of the $300,000 in public debt issued in mid-August 2012, structuring and underwriting fees of $1,950 for the $300,000 senior unsecured bridge term loan commitment which was terminated upon the issuance of our $300,000 senior unsecured notes due 2022 in August 2012 and net foreign-currency losses of $2,204 in the third quarter of 2012 compared to net foreign-currency gains of $1,348 in the third quarter of 2011, the majority of which relate to the foreign-currency translation impact on Euro-based inventory purchases in our pan-European entity, which designates the U.S. dollar as its functional currency.

The provision for income taxes was $21,715, or an effective tax rate of 28.9%, in the third quarter of 2012 compared to $43,768, or an effective tax rate of 65.2%, in the third quarter of 2011. The year-over-year change in the effective tax rate primarily reflects the non-cash charge to record a valuation allowance of $24,810 against all of the deferred tax assets of our operating subsidiary in Brazil in prior year quarter, as well as the change in mix of profit among different tax jurisdictions and losses in other tax jurisdictions in which we are not able to record a tax benefit. Under U.S. accounting rules for income taxes, quarterly effective tax rates may vary significantly depending on the actual operating results in the various tax jurisdictions, as well as changes in the valuation allowance related to the expected recovery of our deferred tax assets.

Results of Operations for the Thirty-nine Weeks Ended September 29, 2012 Compared to the

Thirty-nine Weeks Ended October 1, 2011

Our consolidated net sales increased 0.3% to $26,447,417 for the thirty-nine weeks ended September 29, 2012, or first nine months of 2012, from $26,375,757 for the thirty-nine weeks ended October 1, 2011, or first nine months of 2011. Net sales from our North American, Asia-Pacific and Latin American operations increased 3.4%, 3.5%, and 10.5%, respectively, in the first nine months of 2012 compared to the first nine months of 2011. In our European operations, net sales declined by 7.9% in the first nine months of 2012 compared to the prior year period. The translation impacts of relatively weaker European, Asia-Pacific and Latin American currencies relative to the U.S. dollar had negative impacts of approximately eight, three and nine percentage points of the year-over-year change in the respective region's net sales while the combined translation impacts of these foreign currencies had a negative effect of approximately three percentage points on our consolidated net sales. Beyond these currency impacts, the year-over-year change in our consolidated and regional net sales is attributable to the same factors discussed in the results for the third quarters of 2012 and 2011. Our acquisitions did not have a material impact in comparing our year-over-year regional and consolidated sales growth.

Management's Discussion and Analysis Continued

Gross margin improved seven basis points to 5.20% in the first nine months of 2012 compared to 5.13% in the first nine months of 2011. The increase year-over-year is primarily attributable to higher hard disk drive pricing in the first quarter of 2012, predominately in North America, which benefited gross margins by approximately three basis points globally, and improved performance in our higher margin specialty businesses and fee-for-service logistics business, largely offset by a greater mix of high volume, lower gross margin sales. Gross margin was also impacted by a highly competitive selling environment in many countries and a greater mix of sales into the e-tail and retail segments in international markets, which is generally lower margin business.

Total SG&A expenses were relatively flat at $1,073,030 in the first nine months of 2012 compared to $1,070,556 the first nine months of 2011. SG&A expenses as a percentage of consolidated net sales were also flat at 4.06% for both periods. The change in SG&A expenses primarily reflects acquisition-related costs of $6,315, asset impairments of $1,923 associated with the closure of our in-country Argentina operations, costs of $2,500 associated with the transition of our chief executive officer and investments in strategic initiatives and system and process improvements incurred in the current year period. These factors were generally offset by the translation impacts of foreign currencies, which yielded an approximate $29,000 reduction year-over-year, a decrease in stock-based compensation expense of $3,253 associated with our long-term . . .