Ingram Micro Holding CorpINGM
Ingram Micro Holding Corp Income Taxes Disclosure
Income Taxes
We account for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. We record adjustments based on filed returns as such returns are finalized and resultant adjustments are identified. The Company has made an accounting policy election to treat Global Intangible Low Tax Income (“GILTI”) as a current year tax expense in the period in which it is incurred.
The components of income before income taxes consist of the following:
| Fiscal Year | Fiscal Year | Fiscal Year | |||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| United States | $ | (72,228) | $ | (182,583) | $ | (205,969) | |||||||||||
| Foreign | 602,982 | 628,449 | 728,470 | ||||||||||||||
| Total | $ | 530,754 | $ | 445,866 | $ | 522,501 | |||||||||||
The provision for income taxes consists of the following:
| Fiscal Year | Fiscal Year | Fiscal Year | |||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Current: | |||||||||||||||||
| Federal | $ | (1,786) | $ | 52 | $ | (8,220) | |||||||||||
| State | 750 | 524 | 2,828 | ||||||||||||||
| Foreign | 231,898 | 194,337 | 233,705 | ||||||||||||||
| $ | 230,862 | $ | 194,913 | $ | 228,313 | ||||||||||||
| Deferred: | |||||||||||||||||
| Federal | $ | (6,974) | $ | (18,368) | $ | (29,113) | |||||||||||
| State | (1,381) | (2,826) | (9,818) | ||||||||||||||
| Foreign | (19,635) | 7,925 | (19,593) | ||||||||||||||
| (27,990) | (13,269) | (58,524) | |||||||||||||||
| Provision for income taxes | $ | 202,872 | $ | 181,644 | $ | 169,789 | |||||||||||
We adopted ASU 2023-09 "Income Taxes (Topic 740): Improvements To Income Tax Disclosures" on a prospective basis beginning with Fiscal Year 2025. The following table presents required disclosure pursuant to ASU 2023-09 and reconciles the U.S. federal statutory tax expense and tax rate to our actual global tax expense and effective tax rate for Fiscal Year 2025:
| Fiscal Year | |||||||||||
| 2025 | |||||||||||
| Amount | Percentage | ||||||||||
| U.S. federal statutory tax | $ | 111,458 | 21.0 | % | |||||||
| State and local income tax, net of federal income tax effect (1) | 196 | 0.0 | % | ||||||||
| Foreign tax effects: | |||||||||||
| Colombia | |||||||||||
| Changes in valuation allowances | 14,598 | 2.7 | % | ||||||||
| Other | 4,010 | 0.7 | % | ||||||||
| Brazil | |||||||||||
| Withholding tax | 6,850 | 1.3 | % | ||||||||
| Other | 5,328 | 1.0 | % | ||||||||
| India | 6,218 | 1.2 | % | ||||||||
| Other foreign jurisdictions | 45,109 | 8.5 | % | ||||||||
| Effects of cross-border tax laws: | |||||||||||
| Global intangible low-taxed income (GILTI) | 11,520 | 2.2 | % | ||||||||
| Subpart F | (6,073) | (1.1) | % | ||||||||
| Other | (462) | (0.1) | % | ||||||||
| Tax credits: | |||||||||||
| Research and development tax credits | (3,261) | (0.6) | % | ||||||||
| Foreign tax credits | (28,203) | (5.3) | % | ||||||||
| Changes in valuation allowances | 28,203 | 5.3 | % | ||||||||
| Nontaxable or nondeductible items | 6,030 | 1.1 | % | ||||||||
| Changes in unrecognized tax benefits | 1,351 | 0.3 | % | ||||||||
| Income Tax Expense and Effective Tax Rate | $ | 202,872 | 38.2 | % | |||||||
(1)The states and local jurisdictions that contribute to the majority (greater than 50%) of the tax effect in this category include California, Illinois, New Jersey, and New York.
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the United States. The OBBBA includes significant tax-related provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. The OBBBA did not have a material impact on our annual effective tax rate in 2025, and we are currently evaluating its potential impact on our consolidated financial statements for future periods.
The reconciliation of the statutory U.S. federal income tax rate to our effective tax rate for years prior to the adoption of ASU 2023-09 is as follows:
| Fiscal Year | Fiscal Year | ||||||||||
| 2024 | 2023 | ||||||||||
| U.S. statutory rate | 21.0 | % | 21.0 | % | |||||||
| State income taxes, net of federal income tax benefit | (0.5) | (1.3) | |||||||||
| U.S. tax on foreign earnings, net of foreign tax credits | 1.8 | 1.4 | |||||||||
| Effect of international operations | 8.0 | 5.7 | |||||||||
| Effect of change in valuation allowances | 0.7 | 1.2 | |||||||||
| Withholding tax | 7.1 | 4.8 | |||||||||
| Other | 2.6 | (0.3) | |||||||||
| Effective tax rate | 40.7 | % | 32.5 | % | |||||||
Many countries have enacted the Organization for Economic Co-operation and Development’s 15% global minimum tax regime effective for us starting in Fiscal Year 2024. The legislation did not have a material impact on our Fiscal Years 2024 and 2025 effective rates for income taxes or for cash taxes paid, however we continue to monitor developments and evaluate impacts, if any, of these rules on our consolidated financial statements.
Deferred income taxes reflect the tax effect of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Net deferred tax assets and liabilities are classified as non-current in the Consolidated Balance Sheets.
Significant components of our net deferred tax assets and liabilities are as follows:
| December 27, 2025 | December 28, 2024 | ||||||||||
| Deferred tax assets: | |||||||||||
| Net operating loss carryforwards | $ | 116,746 | $ | 118,632 | |||||||
| Tax credit carryforwards | 121,542 | 89,158 | |||||||||
| Interest expense carryforwards | 49,471 | 48,760 | |||||||||
| Employee benefits | 56,618 | 50,740 | |||||||||
| Inventory | 23,336 | 26,087 | |||||||||
| Depreciation and amortization | 22,170 | 23,387 | |||||||||
| Operating lease liabilities | 115,717 | 119,354 | |||||||||
| Sales return reserve | 31,785 | 35,879 | |||||||||
| Allowance on trade accounts receivable | 37,768 | 31,807 | |||||||||
| Reserves and accruals not currently deductible for income tax purposes | 31,859 | 20,849 | |||||||||
| Other | 67,675 | 33,846 | |||||||||
| Total deferred tax assets | 674,687 | 598,499 | |||||||||
| Valuation allowance | (169,117) | (129,206) | |||||||||
| Subtotal | 505,570 | 469,293 | |||||||||
| Deferred tax liabilities: | |||||||||||
| Depreciation and amortization | (209,000) | (209,616) | |||||||||
| Operating lease assets | (110,105) | (113,782) | |||||||||
| Inventory rights | (28,203) | (31,878) | |||||||||
| Other | (45,301) | (37,698) | |||||||||
| Total deferred tax liabilities | (392,609) | (392,974) | |||||||||
| Net deferred tax assets | $ | 112,961 | $ | 76,319 | |||||||
We record net deferred tax assets to the extent we believe these assets will more likely than not be realized. In making such determination, we consider all available positive and negative evidence, including the nature of the deferred tax assets and related statutory limits on utilization, recent operating results, future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations. In the event we were to determine that we would be able to realize our deferred income tax assets in the future in excess of or less than the net recorded amount, we would make an adjustment to the valuation allowance which would reduce or increase the provision for income taxes.
At December 27, 2025, we had deferred tax assets related to NOL carryforwards of $116,746 along with a valuation allowance of $42,482. $44,805 of the remaining $74,264 of net deferred tax assets associated with NOL carryforwards have no expiration date. The NOL carryforwards with no expiration date are comprised of $29,081 in Luxembourg, $6,951 in Belgium and $8,773 in a number of other jurisdictions worldwide. The $29,459 of net deferred tax assets associated with NOL carryforwards that have an expiration date are comprised of $18,494 in Luxembourg with expirations beginning in 2035 and $10,965 in a number of different jurisdictions with various expiration dates. We monitor our other deferred tax assets for realizability in a similar manner to those described above and will record or release valuation allowances as required to reflect the amount more likely than not to be realized.
At December 27, 2025, our tax credit carryforwards for income tax purposes were $121,542. Foreign tax credit carryforwards in the U.S. represent $109,435 of that amount, and our total valuation allowance related to such credit carryforwards was $109,435. A number of different federal and state credits with various expiration dates comprised the remaining $12,107 of tax credit carryforwards.
As of December 27, 2025, the valuation allowance increased by a net of $39,911 as compared to December 28, 2024, which was driven primarily by an increase in both U.S. foreign tax credits and associated valuation allowances. The remaining change relates primarily to book operating losses in certain subsidiaries that are currently not expected to be realized through future taxable income in these entities, partially offset by previously reserved amounts that became realizable based on taxable income generated in the current year.
As of December 28, 2024, the valuation allowance increased by a net of $22,827 as compared to December 30, 2023, which was driven primarily by an increase in both U.S. foreign tax credits and associated valuation allowances. The remaining change relates primarily to book operating losses in certain subsidiaries that are currently not expected to be realized through future taxable income in these entities, partially offset by previously reserved amounts that became realizable based on taxable income generated in the current year.
As of December 30, 2023, the valuation allowance increased by a net of $28,527 as compared to December 31, 2022, which was driven primarily by an increase in both U.S. foreign tax credits and associated valuation allowances. The remaining change relates primarily to book operating losses in certain subsidiaries that are currently not expected to be realized through future taxable income in these entities, partially offset by previously reserved amounts that became realizable based on taxable income generated in the current year.
We have not provided tax on undistributed foreign earnings of approximately $3,400,000 and $3,500,000 as of December 27, 2025, and December 28, 2024, respectively, because such earnings are considered to be indefinitely reinvested. A determination of the deferred tax liability on such earnings is not practical due to the complexity of the hypothetical calculation.
A reconciliation of the beginning and ending balances of the total amounts of gross unrecognized tax benefits is as follows:
| Fiscal Year | Fiscal Year | Fiscal Year | |||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Gross unrecognized tax benefits at beginning of the year | $ | 15,666 | $ | 16,785 | $ | 14,339 | |||||||||||
| Increases in tax positions for prior years | 2,537 | 172 | 1,048 | ||||||||||||||
| Decreases in tax positions for prior years | (3,199) | (1,523) | (102) | ||||||||||||||
| Increases in tax positions for current year | 1,632 | 2,203 | 1,870 | ||||||||||||||
| Settlements | — | (1,380) | — | ||||||||||||||
| Lapse in statute of limitations | (114) | (591) | (370) | ||||||||||||||
| Gross unrecognized tax benefits at end of the year | $ | 16,522 | $ | 15,666 | $ | 16,785 | |||||||||||
The total amount of gross unrecognized tax benefits is $16,522 as of December 27, 2025, substantially all of which would impact the effective tax rate if recognized.
We recognize interest and penalties related to unrecognized tax benefits in income tax expense. Total accruals for interest and penalties on our unrecognized tax benefits were $9,942 and $8,985 as of December 27, 2025, and December 28, 2024, respectively.
We conduct business globally and, as a result, we and/or one or more of our subsidiaries file income tax returns in the U.S. federal and various state jurisdictions and in over fifty foreign jurisdictions. In the normal course of business, we are subject to examination by taxing authorities in many of the jurisdictions in which we operate. In our material tax jurisdictions, the statute of limitations is open, in general, for three to five years.
In the U.S., we are no longer subject to federal tax examinations for years prior to 2023. It is possible that within the next twelve months, (1) ongoing tax examinations of several of our states and foreign jurisdictions may be resolved, (2) new tax exams may commence, and (3) other issues may be effectively settled. However, we do not expect our assessment of unrecognized tax benefits to change significantly over that time.
We adopted ASU 2023-09 on a prospective basis for Fiscal Year 2025 and have included the amounts of income taxes paid below as the result of our adoption:
| Fiscal Year | |||||
| 2025 | |||||
| Federal taxes | $ | 3,125 | |||
| State and local taxes | (260) | ||||
| Foreign taxes: | |||||
| Brazil | 28,781 | ||||
| India | 15,366 | ||||
| Australia | 12,137 | ||||
| United Kingdom | 12,014 | ||||
| Netherland | 9,904 | ||||
| Peru | 9,326 | ||||
| Other foreign taxes | 91,397 | ||||
| Total income taxes paid | $ | 181,790 | |||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 3, 2026 | Showing above |
| 2024 | Mar 5, 2025 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.