News Column

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

May 2, 2014

AND RESULTS OF OPERATIONS

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion should be read in conjunction with the consolidated financial statements and the related notes that appear elsewhere in this Quarterly Report on Form 10-Q.

Quarterly Overview



We are a global provider of information technology ("IT") hardware, software and services solutions to businesses and public sector institutions in North America, Europe, the Middle East, Africa ("EMEA") and Asia-Pacific ("APAC"). Our offerings in North America and select countries in EMEA include IT hardware, software and services. Our offerings in the remainder of our EMEA segment and in APAC are almost entirely software and select software-related services.

Consolidated net sales increased 3% to $1.21 billion in the three months ended March 31, 2014, an increase of $32.9 million compared to the three months ended March 31, 2013. First quarter sales results were primarily driven by year over year improvement in hardware sales in our North America and EMEA segments and strong software sales in our North America segment, reflecting solid sales execution combined with improving demand trends globally. Consolidated gross profit also increased 4% year over year to $163.7 million, with gross margin increasing approximately 10 basis points year over year to 13.5%. The gross margin expansion was driven by all three of our operating segments. Most notably, our North America business benefited from improved profitability through a focus on specific clients and product offerings year over year and our continued efforts to optimize funding under programs with strategic partners. Additionally, our EMEA segment improved its results in the first quarter of 2014, after underperforming in recent quarters due to weak sales execution and systems integration challenges that had affected productivity. Further, we continued our focus on tight cost control on a global basis throughout the quarter, maintaining our operating costs at comparable levels year over year in all three of our operating segments, and we had significantly less severance expense during the first quarter of 2014 compared to the first quarter of 2013. All of this resulted in a 46% year over year increase in earnings from operations. On a consolidated basis, we reported earnings from operations of $21.0 million, net earnings of $11.6 million and diluted earnings per share of $0.28 for the first quarter of 2014. This compares to earnings from operations of $14.4 million, net earnings of $9.1 million and diluted earnings per share of $0.20 for the first quarter of 2013.

Our consolidated results of operations for the first quarter of 2014 include severance expense, net of adjustments, totaling $337,000, $224,000 net of tax, compared to $2.7 million, $1.9 million net of tax, recorded during the first quarter of 2013.

Net of tax amounts referenced above were computed using the statutory tax rate for the taxing jurisdictions in the operating segment in which the related expenses were recorded, adjusted for the effects of valuation allowances on net operating losses in certain jurisdictions.

Details about segment results of operations can be found in Note 11 to the Consolidated Financial Statements in Part I, Item 1 of this report.

As previously disclosed, our largest software partner made changes to its channel incentive program beginning in October 2013. The changes vary in substance and timing across this partner's offerings. Some of the changes became effective in the fourth quarter of 2013, and some become effective as client contracts renew under their stated terms over the next few years. We currently believe that we will receive between $15 and $20 million less in incentives from this partner in the full year 2014 compared to 2013. We are taking the necessary strategic steps to preserve our profitability and have identified actions associated with new business and cost reduction measures in 2014 that we expect will offset the adverse effect of these changes.

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Table of Contents INSIGHT ENTERPRISES, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)



Our discussion and analysis of financial condition and results of operations is intended to assist in the understanding of our consolidated financial statements, the changes in certain key items in those consolidated financial statements from period to period and the primary factors that contributed to those changes, as well as how certain critical accounting estimates affect our consolidated financial statements.

Critical Accounting Estimates



Our consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles ("GAAP"). For a summary of significant accounting policies, see Note 1 to the Consolidated Financial Statements in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2013. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, net sales and expenses. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results, however, may differ from estimates we have made. Members of our senior management have discussed the critical accounting estimates and related disclosures with the Audit Committee of our Board of Directors.

There have been no changes to the items disclosed as critical accounting estimates in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2013.

Results of Operations



The following table sets forth for the periods presented certain financial data as a percentage of net sales for the three months ended March 31, 2014 and 2013:

Three Months Ended March 31, 2014 2013 Net sales 100.0 % 100.0 % Costs of goods sold 86.5 86.6 Gross profit 13.5 13.4 Selling and administrative expenses 11.7 11.9 Severance and restructuring expenses <0.1 0.3 Earnings from operations 1.7 1.2 Non-operating expense, net 0.1 0.1 Earnings before income taxes 1.6 1.1 Income tax expense 0.6 0.3 Net earnings 1.0 % 0.8 %



We experience certain seasonal trends in our sales of IT hardware, software and services. Software sales are typically higher in our second and fourth quarters, particularly the second quarter; business clients, particularly larger enterprise businesses in the U.S., tend to spend more in our fourth quarter, as they utilize their remaining capital budget authorizations, and less in the first quarter; sales to the federal government in the U.S. are often stronger in our third quarter, while sales in the state and local government and education markets are stronger in our second quarter; and sales to public sector clients in the United Kingdom are often stronger in our first quarter. These trends create overall seasonality in our consolidated results such that sales and profitability are expected to be higher in the second and fourth quarters of the year.

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Table of Contents INSIGHT ENTERPRISES, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)



Throughout this "Results of Operations" section of "Management's Discussion and Analysis of Financial Condition and Results of Operations," we refer to changes in net sales, gross profit and selling and administrative expenses in EMEA and APAC excluding the effects of foreign currency movements. In computing these change amounts and percentages, we compare the current period amount as translated into U.S. dollars under the applicable accounting standards to the prior period amount in local currency translated into U.S. dollars utilizing the average translation rate for the current period.

Net Sales. Net sales for the three months ended March 31, 2014 increased 3% compared to the three months ended March 31, 2013. Our net sales by operating segment were as follows (dollars in thousands):

Three Months Ended March 31, % 2014 2013 Change North America $ 780,682$ 747,004 5 % EMEA 387,943 386,911 - APAC 45,905 47,707 (4 %) Consolidated $ 1,214,530$ 1,181,622 3 %



Net sales in North America increased 5%, or $33.7 million, for the three months ended March 31, 2014 compared to the three months ended March 31, 2013. Net sales of hardware and software increased 4% and 11%, respectively, year over year. Net sales of services declined 14%, year to year. Hardware and software sales comparisons reflect higher volume of sales, primarily to large enterprise clients, during the current quarter. We saw increased demand for notebooks, desktops and mobile devices in the hardware category and higher sales of business productivity and virtualization products in the software category. Additionally, the prior year period had a higher mix of software maintenance sales compared to this year, which were recorded net of related costs within the net sales line item of our financial statements. The decline in services sales was attributable to fewer technical deployment projects in the first quarter of 2014.

Net sales in EMEA were relatively flat year over year in U.S. dollars for the three months ended March 31, 2014 compared to the three months ended March 31, 2013. Excluding the effects of foreign currency movements, net sales decreased 5% compared to the first quarter of last year. Net sales of hardware increased 7% year over year, while net sales of software and services decreased 3% and 13%, respectively, year to year, all in U.S. dollars. Excluding the effects of foreign currency movements, hardware net sales increased 1%, while net sales of software and services declined 8% and 17%, respectively, compared to the first quarter of 2013. The increase in hardware net sales was due primarily to higher volume across all client groups, with year over year growth most notably with large enterprise and public sector clients in the United Kingdom. The decline in software net sales was due primarily to lower volume of business productivity software sales to our existing large enterprise clients. The decrease in net sales of services was due primarily to lower volume with existing clients.

Net sales in APAC decreased 4%, or $1.8 million, for the three months ended March 31, 2014, compared to the three months ended March 31, 2013. Excluding the effects of foreign currency movements, net sales increased 6% compared to the first quarter of last year. The increase primarily resulted from higher volume with mid-market and public sector clients.

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The percentage of net sales by category for North America, EMEA and APAC were as follows for the three months ended March 31, 2014 and 2013:

North America EMEA APAC Three Months Ended Three Months Ended Three Months Ended March 31, March 31, March 31, Sales Mix 2014 2013 2014 2013 2014 2013 Hardware 63 % 63 % 39 % 37 % 4 % 2 % Software 31 % 30 % 59 % 61 % 93 % 95 % Services 6 % 7 % 2 % 2 % 3 % 3 % 100 % 100 % 100 % 100 % 100 % 100 %



Gross Profit. Gross profit for the three months ended March 31, 2014 increased 4% compared to the three months ended March 31, 2013, with gross margin increasing approximately 10 basis points to 13.5% for the three months ended March 31, 2014 compared to 13.4% for the three months ended March 31, 2013. Our gross profit and gross profit as a percentage of net sales by operating segment were as follows (dollars in thousands):

Three Months Ended March 31, % of % of 2014 Net Sales 2013 Net Sales North America $ 107,413 13.8 % $ 102,527 13.7 % EMEA 49,321 12.7 % 48,610 12.6 % APAC 7,011 15.3 % 7,000 14.7 % Consolidated $ 163,745 13.5 % $ 158,137 13.4 %



North America's gross profit for the three months ended March 31, 2014 increased 5% compared to the three months ended March 31, 2013. As a percentage of net sales, gross margin increased approximately 10 basis points to 13.8% for the first quarter of 2014 from 13.7% in the first quarter of 2013. The increase was primarily attributable to a 46 basis point increase in product margin, which includes vendor funding and freight. The increase in product margin resulted from our profitability initiatives, including an increase in higher margin software product sales and an increase in vendor funding due to improvements in the mix of hardware sales with key strategic partners year over year. These increases in product margin were partially offset by a 39 basis point decrease in margin resulting from a lower mix of agency fees for enterprise software agreements, resulting from the partner program changes discussed above.

EMEA's gross profit increased 1% in U.S. dollars for the three months ended March 31, 2014 compared to the three months ended March 31, 2013. Excluding the effects of foreign currency movements, gross profit declined 4% compared to the first quarter of last year. Gross margin increased approximately 10 basis points to 12.7% for the first quarter of 2014 from 12.6% in the first quarter of 2013. A net increase in product margin, which includes vendor funding and freight, of 40 basis points was driven by increases in both hardware and software product margins. The improvement in hardware product margin was due to the relative product mix, as hardware sales, which are transacted at higher margins, increased as a percentage of total sales year over year. The increase in software product margin primarily resulted from the mix and size of deals transacted during the quarter and remediation efforts in response to partner program changes year to year. The net increase in product margin was offset partially by a decrease in gross margin from sales of services of 25 basis points due to lower volumes and a higher mix of third-party delivered services, which are transacted at lower margins.

APAC's gross profit remained flat at $7.0 million, with gross margin increasing to 15.3% for the three months ended March 31, 2014, compared to 14.7% for the three months ended March 31, 2013. Excluding the effects of foreign currency movements, gross profit increased 11% compared to the first quarter of last year. The increase was due primarily to higher fees from enterprise software agreements from new clients and an increase in vendor funding in the first quarter of 2014 compared to the first quarter of 2013.

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Selling and Administrative Expenses. Selling and administrative expenses increased $1.4 million, or 1%, for the three months ended March 31, 2014 compared to the three months ended March 31, 2013. Our selling and administrative expenses as a percent of net sales by operating segment were as follows (dollars in thousands):

Three Months Ended March 31, % of % of 2014 Net Sales 2013 Net Sales North America $ 89,181 11.4 % $ 89,196 11.9 % EMEA 47,105 12.1 % 45,756 11.8 % APAC 6,143 13.4 % 6,036 12.7 % Consolidated $ 142,429 11.7 % $ 140,988 11.9 %



North America's selling and administrative expenses remained flat at $89.2 million for both the three months ended March 31, 2014 and 2013 and, as a percentage of net sales, decreased approximately 50 basis points to 11.4% as we continued to manage our discretionary costs. IT contract labor expenses decreased by $2.1 million year to year resulting from the completion of our North America IT systems integration project in 2013. This decrease was offset by increases in other operating expenses, including employee benefit expenses that increased approximately $1.6 million year over year due to higher health benefits claims in the three months ended March 31, 2014. As discussed in Note 12 to the Consolidated Financial Statements in Part I, Item 1 of this report, we anticipate that we will record a non-cash impairment loss of approximately $5 million during the quarter ending June 30, 2014 to reduce the carrying amount of our property in Bloomingdale, Illinois to its estimated fair value less costs to sell.

EMEA's selling and administrative expenses increased 3%, or $1.3 million, for the three months ended March 31, 2014 compared to the three months ended March 31, 2013 and increased approximately 30 basis points year over year as a percentage of net sales to 12.1%. Excluding the effects of foreign currency movements, selling and administrative expenses declined 2% compared to the first quarter of last year. The year to year change was primarily driven by a decrease in support salaries and wages due to restructuring actions in prior periods, offset by higher variable compensation expenses.

APAC's selling and administrative expenses increased 2%, or $107,000, for the three months ended March 31, 2014 compared to the three months ended March 31, 2013 and increased as a percentage of net sales by approximately 70 basis points year over year to 13.4%. Excluding the effects of foreign currency movements, selling and administrative expenses increased 14% compared to the first quarter of last year. The increase was primarily driven by planned investments in the new IT system in the region.

Severance and Restructuring Expenses. During the three months ended March 31, 2014, North America and EMEA recorded severance expense, net of adjustments, of approximately $77,000 and $260,000, respectively. Comparatively, during the three months ended March 31, 2013, North America and EMEA recorded severance expense, net of adjustments, of approximately $1.1 million and $1.7 million, respectively, related to the elimination of certain positions as part of a re-alignment of roles and responsibilities.

Non-Operating (Income) Expense.

Interest Income. Interest income for the three months ended March 31, 2014 and 2013 was generated from interest earned on cash and cash equivalent bank balances. The decrease in interest income year to year is primarily due to lower average interest-bearing cash and cash equivalent balances during the three months ended March 31, 2014.

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Interest Expense. Interest expense for the three months ended March 31, 2014 and 2013 primarily relates to borrowings under our financing facilities and imputed interest under our inventory financing facility. Interest expense for the three months ended March 31, 2014 decreased 10%, or $160,000, compared to the three months ended March 31, 2013. The decrease was due primarily to lower average daily balances on our debt facilities in the 2014 periods and a decrease in imputed interest under our inventory financing facility. Imputed interest under our inventory financing facility was $552,000 for the three months ended March 31, 2014, compared to $602,000 for the three months ended March 31, 2013. This decrease was due to lower outstanding balances, partially offset by increases in our average incremental borrowing rate used to compute the imputed interest amounts. For a description of our various financing facilities, see Note 3 to our Consolidated Financial Statements in Part I, Item 1 of this report.

Net Foreign Currency Exchange Gains/Losses. These gains/losses result from foreign currency transactions, including gains/losses on foreign currency derivative contracts and intercompany balances that are not considered long-term in nature. The change in net foreign currency exchange gains/losses is due primarily to the underlying changes in the applicable exchange rates, mitigated by our use of foreign exchange forward contracts to hedge certain non-functional currency assets and liabilities against changes in exchange rate movements.

Other Expense, Net. Other expense, net, consists primarily of bank fees associated with our cash management activities.

Income Tax Expense. Our effective tax rate for the three months ended March 31, 2014 was 39.3% compared to 27.8% for the three months ended March 31, 2013. Our effective tax rate increased year over year due to the effects of discrete items recognized in the 2013 period. The effective tax rate for the three months ended March 31, 2013 included the recognition of certain tax benefits related to the re-measurement or settlement of specific uncertain tax positions during the quarter, which decreased the prior year rate.

Liquidity and Capital Resources



The following table sets forth certain consolidated cash flow information for the three months ended March 31, 2014 and 2013 (in thousands):

Three Months Ended March 31, 2014 2013 Net cash provided by operating activities $ 66,033$ 16,283 Net cash used in investing activities (2,018 ) (5,670 ) Net cash used in financing activities (10,749 ) (6,933 ) Foreign currency exchange effect on cash balances 781 (3,473 ) Increase in cash and cash equivalents 54,047 207 Cash and cash equivalents at beginning of period 126,817 152,119 Cash and cash equivalents at end of period $ 180,864$ 152,326



Cash and Cash Flow

Our primary uses of cash during the three months ended March 31, 2014 were to fund working capital requirements, to repurchase shares of our common stock and for capital expenditures. Operating activities provided $66.0 million in cash for the three months ended March 31, 2014, a 306% increase from the three months ended March 31, 2013. We had combined net borrowings on our long-term debt facilities of $22.5 million during the three months ended March 31, 2014. Capital expenditures were $2.0 million in the three months ended March 31, 2014, a 64% decrease from the prior year period, as our larger IT system upgrade projects were completed during 2013. Cash balances in the three months ended March 31, 2014 were positively affected by $781,000 as a result of foreign currency exchange rates, compared to a negative effect of $3.5 million in the prior year period.

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Net cash provided by operating activities. Cash flow from operations for the three months ended March 31, 2014 and 2013 reflect our net earnings, adjusted for non-cash items such as depreciation, amortization, stock-based compensation expense and write-offs and write-downs of assets, as well as changes in accounts receivable, accounts payable, inventories and accrued expenses and other liabilities. In both periods, the decreases in accounts receivable and accounts payable can be primarily attributed to the seasonal decrease in net sales from the fourth quarter to the first quarter, which results in lower accounts receivable and accounts payable balances as of March 31, compared to December 31. For the 2014 period, the increase in inventories is primarily attributable to an increase in inventory levels at March 31, 2014 to support specific client engagements. The decrease in accrued expenses and other liabilities is primarily attributable to decreases in accrued payroll and accrued VAT and sales taxes as of March 31, compared to December 31, due to the relative timing of related payments and to the reclassification of certain long-term liabilities to accounts payable as of March 31, 2014, as amounts became payable to partners under their contractual terms. For the 2013 period, the increase in other current assets can be primarily attributed to an overpayment of income taxes resulting in a receivable balance at March 31, 2013 and to the timing of the payment of certain prepaid expenses.

Our consolidated cash flow operating metrics for the quarters ended March 31, 2014 and 2013 were as follows:

2014 2013



Days sales outstanding in ending accounts receivable ("DSOs") (a) 80 82 Days inventory outstanding ("DIOs") (b)

9 9



Days purchases outstanding in ending accounts payable ("DPOs")(c) (65 ) (66 )

Cash conversion cycle (days) (d) 24 25



(a) Calculated as the balance of accounts receivable, net at the end of the

period divided by daily net sales. Daily net sales is calculated as net sales

for the quarter divided by 90 days.

(b) Calculated as average inventories divided by daily costs of goods sold.

Average inventories is calculated as the sum of the balances of inventories at the beginning of the quarter plus inventories at the end of the quarter divided by two. Daily costs of goods sold is calculated as costs of goods sold for the quarter divided by 90 days.



(c) Calculated as the balances of accounts payable, which includes the inventory

financing facility, at the end of the period divided by daily costs of goods sold. Daily costs of goods sold is calculated as costs of goods sold for the quarter divided by 90 days.



(d) Calculated as DSOs plus DIOs, less DPOs.

Our cash conversion cycle was 24 days in the quarter ended March 31, 2014 compared to 25 days in the quarter ended March 31, 2013. The year over year decrease primarily resulted from tighter cash management in our EMEA operating segment.

We expect that cash flow from operations will be used, at least partially, to fund working capital as we typically pay our partners on average terms that are shorter than the average terms granted to our clients in order to take advantage of supplier discounts. We intend to use cash generated in the remainder of 2014 in excess of working capital needs to pay down our outstanding debt balances, repurchase shares of our common stock and support our capital expenditures for the year. We also may use cash to fund potential small acquisitions to add select capabilities.

Net cash used in investing activities. Capital expenditures of $2.0 million and $5.7 million for the three months ended March 31, 2014 and 2013, respectively, were primarily related to investments in our IT systems. We expect capital expenditures for the full year 2014 to be between $15.0 million and $20.0 million, primarily for our IT systems upgrade projects and other facility and technology related upgrade projects.

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Net cash used in financing activities. During the three months ended March 31, 2014 and 2013, we repurchased $26.7 million and $6.9 million, respectively, of our common stock in open market transactions. These repurchases were part of programs approved by our Board of Directors in October 2013 and February 2013, respectively. All shares repurchased were immediately retired. During the three months ended March 31, 2014, we had net combined borrowings on our long-term debt under our revolving facility and our ABS facility that increased our outstanding debt balance by $22.5 million, and we had net repayments of $7.2 million under our inventory financing facility during the period. During the three months ended March 31, 2013, we had net combined repayments on our long-term debt under our revolving facility and our ABS facility that decreased our outstanding debt balance by $19.0 million, and we had net borrowings of $21.3 million under our inventory financing facility during the period.

Our consolidated debt balance that can be outstanding at the end of any fiscal quarter under our revolving facility and our ABS facility is limited by certain financial covenants, particularly a maximum leverage ratio. The maximum leverage ratio is calculated as aggregate debt outstanding divided by the sum of the Company's trailing twelve month net earnings (loss) plus (i) interest expense, excluding non-cash imputed interest on our inventory financing facility, (ii) income tax expense (benefit), (iii) depreciation and amortization and (iv) non-cash stock-based compensation ("adjusted earnings"). The maximum leverage ratio permitted under the agreements is 2.75 times trailing twelve-month adjusted earnings. We anticipate that we will be in compliance with our maximum leverage ratio requirements over the next four quarters. However, a significant drop in the Company's adjusted earnings would limit the amount of indebtedness that could be outstanding at the end of any fiscal quarter to a level that would be below the Company's combined facility maximum amount. Based on the maximum leverage ratio as of March 31, 2014, the Company's debt balance that could have been outstanding under our revolving facility and our ABS facility was reduced from the maximum borrowing capacity of $550.0 million to $472.9 million, of which $89.0 million was outstanding at March 31, 2014. Our debt balance as of March 31, 2014 was $91.6 million, including our capital lease obligation for certain IT equipment and other financing agreements with financial intermediaries to facilitate the purchase of products from certain vendors. As of March 31, 2014, the current portion of our long-term debt relates solely to our capital lease and other financing obligations.

Cash and cash equivalents held by foreign subsidiaries are generally subject to U.S. income taxation upon repatriation to the U.S. We do not provide for U.S. income taxes on the undistributed earnings of those of our foreign subsidiaries where earnings are reinvested and, in the opinion of management, will continue to be reinvested indefinitely outside of the U.S. As of March 31, 2014, we had approximately $161.3 million in cash and cash equivalents in certain of our foreign subsidiaries where we consider undistributed earnings of these foreign subsidiaries to be indefinitely reinvested. As of March 31, 2014, the majority of our foreign cash resides in the Netherlands, Canada, Australia and the United Kingdom. Certain of these cash balances could and will be remitted to the U.S. by paying down intercompany payables generated in the ordinary course of business. This repayment would not change our policy to indefinitely reinvest earnings of our foreign subsidiaries. We intend to use undistributed earnings for general business purposes in the foreign jurisdictions as well as to fund our IT systems, potential small acquisitions and various facility upgrades.

We anticipate that cash flows from operations, together with the funds available under our financing facilities, will be adequate to support our presently anticipated cash and working capital requirements for operations as well as other strategic investments over the next 12 months. We currently do not intend nor foresee a need to repatriate any foreign undistributed earnings. We expect existing domestic cash and cash flows from operations to continue to be sufficient to fund our domestic operating cash activities and cash commitments for investing and financing activities, such as capital expenditures and debt repayments, for at least the next 12 months.

Off-Balance Sheet Arrangements

We have entered into off-balance sheet arrangements, which include indemnifications. The indemnifications are discussed in Note 10 to the Consolidated Financial Statements in Part I, Item 1 of this report and that discussion is incorporated by reference herein. We believe that none of our off-balance sheet arrangements have, or are reasonably likely to have, a material current or future effect on our financial condition, sales or expenses, results of operations, liquidity, capital expenditures or capital resources.

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Recently Issued Accounting Pronouncements

The information contained in Note 1 to the Consolidated Financial Statements in Part I, Item 1 of this report concerning a description of recently issued accounting pronouncements which affect or may affect our financial statements, including our expected dates of adopting and the estimated effects on our results of operations and financial condition, is incorporated by reference herein.

In July 2013, the Financial Accounting Standards Board issued Accounting Standards Update ("ASU") 2013-11, "Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists." ASU 2013-11 clarifies guidance and eliminates diversity in practice on the presentation of unrecognized tax benefits when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists at the reporting date. This new guidance became effective for annual reporting periods beginning after December 15, 2013 and subsequent interim periods. We applied the requirements of ASU 2013-11 prospectively in preparing the March 31, 2014 consolidated balance sheet, which resulted in a decrease to noncurrent deferred tax assets and a decrease to noncurrent reserves for uncertain tax positions of approximately $1.0 million. Had we applied the requirements of ASU 2013-11 retrospectively to the December 31, 2013 consolidated balance sheet, the effect would have been materially the same.

Contractual Obligations

There have been no material changes in our reported contractual obligations, as described under "Contractual Obligations" in "Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources" in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2013.

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INSIGHT ENTERPRISES, INC.


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