Ingram Micro Holding Corp 10-K

Item 8. Financial Statements and Supplementary Data INDEX TO FINANCIAL STATEMENTS Page Audited Consolidated Financial Statements Report of Independent Registered Public Accounting Firm (PCAOB ID: 238 ) 71 Consolidated Balance Sheets as of December 28, 2024 and December 30, 2023 73 Consolidated Statements of Income for Fiscal Year ended December 28, 2024, Fiscal Year ended December 30, 2023, and Fiscal Year ended December 31, 2022 74 Consolidated Statements of Comprehensive (Loss) Income for Fiscal Year ended December 28, 2024, Fiscal Year ended December 30, 2023, and Fiscal Year ended December 31, 2022 75 Consolidated Statements of Stockholders’ Equity for Fiscal Year ended December 28, 2024, Fiscal Year ended December 30, 2023, and Fiscal Year ended December 31, 2022 76 Consolidated Statements of Cash Flows for Fiscal Year ended December 28, 2024, Fiscal Year ended December 30, 2023, and Fiscal Year ended December 31, 2022 77 Notes to Consolidated Financial Statements 79 Schedules to the Audited Consolidated Financial Statements Schedule II – Valuation and Qualifying Accounts 113 70 Report of Independent Registered Public Accounting Firm To the Board of Directors and Stockholders of Ingram Micro Holding Corporation Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Ingram Micro Holding Corporation and its subsidiaries (the "Company") as of December 28, 2024 and December 30, 2023, and the related consolidated statements of income, of comprehensive (loss) income, of stockholders’ equity and of cash flows for each of the three years in the period ended December 28, 2024, including the related notes and schedule of valuation and qualifying accounts for each of the three years in the period ended December 28, 2024, appearing under Item 8 (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 28, 2024 and December 30, 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 28, 2024 in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Distribution Services Revenue Recognition As described in Note 2 to the consolidated financial statements, the Company’s net sales was $47,984 million for the year ended December 28, 2024, of which a significant portion relates to distribution services revenue. In a distribution services model, the Company buys, holds title to, and sells technology products and provides services to resellers, referred to subsequently as customers, while also providing resellers with multi-vendor solutions, integration services, electronic commerce tools, marketing, financing, training and enablement, technical support, and inventory management. Revenue is recognized when the control of products is transferred to customers, which generally happens at the point of shipment or point of delivery. The principal consideration for our determination that performing procedures relating to distribution services revenue recognition is a critical audit matter is a high degree of auditor effort in performing procedures related to distribution services revenue recognition. 71 Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the revenue recognition process of distribution services revenue. These procedures also included, among others, evaluating, on a test basis, revenue recognized for distribution services transactions by obtaining and inspecting customer contracts, invoices, purchase orders, shipping documentation, cash receipts, and trade accounts receivable confirmations from customers, where applicable. /s/ PricewaterhouseCoopers LLP Irvine, California March 5, 2025 We have served as the Company’s auditor since at least 1994. We have not been able to determine the specific year we began serving as auditor of the Company. 72 INGRAM MICRO HOLDING CORPORATION CONSOLIDATED BALANCE SHEETS (Amounts in thousands, except par value and share data) December 28, 2024 December 30, 2023 ASSETS Current assets: Cash and cash equivalents $ 918,401 $ 948,490 Trade accounts receivable (less allowances of $ 146,999 and $ 163,727 , respectively) 9,448,354 8,988,799 Inventory 4,699,483 4,659,624 Other current assets 734,939 757,404 Total current assets 15,801,177 15,354,317 Property and equipment, net 482,503 452,613 Operating lease right-of-use assets 412,662 430,705 Goodwill 833,662 851,780 Intangible assets, net 772,571 880,433 Other assets 477,115 450,466 Total assets $ 18,779,690 $ 18,420,314 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 10,005,824 $ 9,230,439 Accrued expenses and other 1,021,958 1,061,409 Short-term debt and current maturities of long-term debt 184,860 265,719 Short-term operating lease liabilities 93,889 105,564 Total current liabilities 11,306,531 10,663,131 Long-term debt, less current maturities 3,168,280 3,657,889 Long-term operating lease liabilities, net of current portion 369,493 366,139 Other liabilities 201,511 226,866 Total liabilities 15,045,815 14,914,025 Commitments and contingencies (Note 9) Stockholders’ equity: Class A Common Stock, par value $ 0.01 , no shares authorized, issued and outstanding at December 28, 2024; and 251,015,810 shares authorized and 220,742,854 shares issued and outstanding at December 30, 2023 — 2,207 Class B Common Stock, par value $ 0.01 , no shares authorized, issued and outstanding at December 28, 2024; 2,510,158 shares authorized and 1,657,146 shares issued and outstanding at December 30, 2023 — 17 Common Stock, par value $ 0.01 , 2,000,000,000 shares authorized and 234,825,581 issued and outstanding at December 28, 2024; and no shares authorized, issued and outstanding at December 30, 2023 2,348 — Additional paid-in capital 2,903,842 2,655,776 Retained earnings 1,337,399 1,079,776 Accumulated other comprehensive loss ( 509,714 ) ( 231,487 ) Total stockholders’ equity 3,733,875 3,506,289 Total liabilities and stockholders’ equity $ 18,779,690 $ 18,420,314 See accompanying notes to these consolidated financial statements. 73 INGRAM MICRO HOLDING CORPORATION CONSOLIDATED STATEMENTS OF INCOME (Amounts in thousands, except per share data) Fiscal Year Fiscal Year Fiscal Year 2024 2023 2022 Net sales $ 47,983,671 $ 48,040,364 $ 50,824,490 Cost of sales 44,538,726 44,493,227 47,131,098 Gross profit 3,444,945 3,547,137 3,693,392 Operating expenses (income): Selling, general and administrative 2,588,668 2,583,993 2,716,234 Merger-related costs — — 1,910 Restructuring costs 38,354 18,797 10,138 Gain on CLS Sale — — ( 2,283,820 ) Total operating expenses 2,627,022 2,602,790 444,462 Income from operations 817,923 944,347 3,248,930 Other (income) expense: Interest income ( 45,335 ) ( 34,977 ) ( 22,911 ) Interest expense 338,358 380,191 320,230 Net foreign currency exchange loss 22,901 42,070 69,597 Other expense 56,133 34,562 67,473 Total other (income) expense 372,057 421,846 434,389 Income before income taxes 445,866 522,501 2,814,541 Provision for income taxes 181,644 169,789 420,052 Net income $ 264,222 $ 352,712 $ 2,394,489 Basic earnings per share $ 1.18 $ 1.59 $ 10.77 Diluted earnings per share $ 1.18 $ 1.59 $ 10.77 See accompanying notes to these consolidated financial statements. 74 INGRAM MICRO HOLDING CORPORATION CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (Amounts in thousands) Fiscal Year Fiscal Year Fiscal Year 2024 2023 2022 Net income $ 264,222 $ 352,712 $ 2,394,489 Other comprehensive (loss) income, net of tax Foreign currency translation adjustment ( 277,541 ) 103,596 ( 270,685 ) Other ( 686 ) 2,375 ( 5,468 ) Other comprehensive (loss) income, net of tax ( 278,227 ) 105,971 ( 276,153 ) Comprehensive (loss) income $ ( 14,005 ) $ 458,683 $ 2,118,336 See accompanying notes to these consolidated financial statements. 75 INGRAM MICRO HOLDING CORPORATION CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Amounts in thousands, except share data) Class A Common Stock Class B Common Stock Common Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss Total Shares Amount Shares Amount Shares Amount Balance at January 1, 2022 220,726,568 $ 2,207 1,657,146 $ 17 — $ 2,655,776 $ 96,734 $ ( 61,305 ) $ 2,693,429 Dividends declared — — — — — — — ( 1,753,697 ) — ( 1,753,697 ) Net income — — — — — — — 2,394,489 — 2,394,489 Foreign currency translation adjustment — — — — — — — — ( 270,685 ) ( 270,685 ) Issuance of Class A Shares 16,286 — — — — — — — — — Other — — — — — — — — ( 5,468 ) ( 5,468 ) Balance at December 31, 2022 220,742,854 2,207 1,657,146 17 — — 2,655,776 737,526 ( 337,458 ) 3,058,068 Dividends declared — — — — — — — ( 10,462 ) — ( 10,462 ) Net income — — — — — — — 352,712 — 352,712 Foreign currency translation adjustment — — — — — — — — 103,596 103,596 Other — — — — — — 2,375 2,375 Balance at December 30, 2023 220,742,854 2,207 1,657,146 17 — — 2,655,776 1,079,776 ( 231,487 ) 3,506,289 Dividends declared — — — — — — — ( 6,599 ) — ( 6,599 ) Net income — — — — — — — 264,222 — 264,222 Conversion of Class A and Class B Common Stock to Common Stock ( 220,742,854 ) ( 2,207 ) ( 1,657,146 ) ( 17 ) 222,400,000 2,224 — — — — Issuance of Common Stock in initial public offering — — — — 11,600,000 116 241,048 — — 241,164 Stock-based compensation expense — — — — — — 34,067 — — 34,067 Issuance of Common Stock on vesting of restricted stock units, net of shares withheld for employee taxes — — — — 825,581 8 ( 14,305 ) — — ( 14,297 ) Foreign currency translation adjustment — — — — — — — — ( 277,541 ) ( 277,541 ) Other — — — — — — ( 12,744 ) — ( 686 ) ( 13,430 ) Balance at December 28, 2024 — $ — — $ — 234,825,581 $ 2,348 $ 2,903,842 $ 1,337,399 $ ( 509,714 ) $ 3,733,875 See accompanying notes to these consolidated financial statements. 76 INGRAM MICRO HOLDING CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (Amounts in thousands) Fiscal Year Fiscal Year Fiscal Year 2024 2023 2022 Cash flows from operating activities: Net income $ 264,222 $ 352,712 $ 2,394,489 Adjustments to reconcile net income to cash provided by (used in) operating activities: Depreciation and amortization 189,331 184,148 197,111 Stock based compensation 34,067 — — (Gain) loss on marketable securities, net ( 12,233 ) ( 10,941 ) 14,340 Gain on CLS Sale — — ( 2,283,820 ) Gain on sale leaseback of German warehouse — — ( 7,050 ) Noncash charges for interest and bond discount amortization 26,374 31,424 33,419 Loss on repayment of term loans 1,927 4,872 10,724 Amortization of operating lease asset 128,935 108,644 101,263 Deferred income taxes ( 14,984 ) ( 55,164 ) 16,573 (Gain) loss on foreign exchange ( 130 ) 1,989 ( 143,335 ) Other ( 1,164 ) 4,805 6,973 Changes in operating assets and liabilities, net of effects of acquisitions: Trade accounts receivable ( 1,060,810 ) ( 299,833 ) ( 590,576 ) Inventory ( 225,831 ) 772,396 ( 210,215 ) Other assets ( 18,917 ) ( 75,597 ) ( 30,322 ) Accounts payable 976,171 ( 738,389 ) 349,744 Change in book overdrafts 134,652 ( 34,367 ) 10,411 Operating lease liabilities ( 118,975 ) ( 104,897 ) ( 63,799 ) Accrued expenses and other 31,204 ( 82,978 ) ( 167,039 ) Cash provided by (used in) operating activities 333,839 58,824 ( 361,109 ) Cash flows from investing activities: Capital expenditures ( 142,703 ) ( 201,535 ) ( 135,785 ) Proceeds from deferred purchase price of factored receivables 252,199 162,622 145,003 Issuance of notes receivable ( 57,117 ) — — Proceeds from note receivables 38,291 — — Proceeds from CLS sale, net of cash sold — 23,977 2,977,825 Proceeds from sale leaseback of German warehouse — — 43,691 Other 14,871 ( 2,778 ) ( 1,966 ) Cash provided by (used in) investing activities 105,541 ( 17,714 ) 3,028,768 Cash flows from financing activities: Payment of contingent consideration related to Imola Mergers — — ( 250,000 ) Dividends paid to shareholders ( 6,174 ) ( 10,462 ) ( 1,753,697 ) 77 Fiscal Year Fiscal Year Fiscal Year 2024 2023 2022 Change in unremitted cash collections from servicing factored receivables ( 11,315 ) ( 18,413 ) 17,831 Proceeds from issuance of common stock in initial public offering, net of underwriting discounts 241,164 — — Repayment of term loans ( 483,100 ) ( 560,000 ) ( 517,500 ) Gross proceeds from other debt 101,779 72,351 50,116 Gross repayments of other debt ( 118,331 ) ( 92,417 ) ( 94,300 ) Net (repayments of) proceeds from revolving and other credit facilities ( 66,998 ) 131,467 89,285 Repurchase of common stock for tax withholdings on equity awards ( 14,164 ) — — Purchase of Colsof shares ( 22,621 ) — — Other ( 11,539 ) ( 466 ) ( 7,048 ) Cash used in financing activities ( 391,299 ) ( 477,940 ) ( 2,465,313 ) Effect of exchange rate changes on cash and cash equivalents ( 78,170 ) 65,183 ( 133,817 ) Cash and cash equivalents classified within held for sale — — 23,729 (Decrease) increase in cash and cash equivalents ( 30,089 ) ( 371,647 ) 92,258 Cash and cash equivalents, beginning of year 948,490 1,320,137 1,227,879 Cash and cash equivalents, end of year $ 918,401 $ 948,490 $ 1,320,137 Supplemental disclosures of cash flow information: Cash payments during the year: Interest $ 336,431 $ 378,554 $ 320,025 Income taxes $ 252,219 $ 271,541 $ 442,564 Supplemental disclosure of non-cash investing and financing information: Proceeds not yet received from CLS sale $ — $ — $ 23,997 Amounts obtained as a beneficial interest in exchange for transferring trade receivables in factoring arrangements $ 261,667 $ 171,114 $ 147,882 See accompanying notes to these consolidated financial statements. 78 INGRAM MICRO HOLDING CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Amounts in thousands, except share, unit and per share data) Note 1 — Organization and Basis of Presentation Ingram Micro Holding Corporation and its subsidiaries (“Ingram Micro”) are primarily engaged in the distribution of information technology (“IT”) products, cloud and other services worldwide. Ingram Micro operates in North America; Europe, Middle East and Africa (“EMEA”); Asia-Pacific; and Latin America. Ingram Micro Holding Corporation is a holding company with no material assets other than the indirect ownership of the stock of Ingram Micro Inc., and its operations are conducted through its wholly owned subsidiaries. Unless the context otherwise requires, the use of the terms “Ingram Micro,” “we,” “us,” “our” and the “Company” in these notes to the consolidated financial statements refers to Ingram Micro Holding Corporation together with its consolidated subsidiaries. The use of the term “Platinum” means Platinum Equity, LLC together with its affiliated investment vehicles. Platinum formed Ingram Micro Holding Corporation on September 28, 2020, and on December 9, 2020, Imola Acquisition Corporation, an investment vehicle of certain private investment funds sponsored and ultimately controlled by Platinum, entered into a definitive agreement with HNA Technology Co., Ltd. (“HNA Tech”) to acquire 100 % of the share capital of Ingram Micro Inc. The acquisition was consummated on July 2, 2021. As part of the acquisition, Imola Merger Corporation (“Escrow Issuer”) merged with and into GCL Investment Management Inc., an affiliate of HNA Tech, which immediately thereafter merged with and into GCL Investment Holdings, Inc., which subsequently and immediately then merged with and into Ingram Micro Inc., with Ingram Micro Inc. as the surviving entity (collectively, the “Imola Mergers”). Note 2 — Significant Accounting Policies Basis of Consolidation The consolidated financial statements include the accounts of Ingram Micro Holding Corporation and its subsidiaries and have been prepared by us pursuant to accounting principles generally accepted in the United States of America (“U.S. GAAP”). All significant intercompany accounts and transactions have been eliminated in consolidation. Fiscal Year Our fiscal year is a 52- or 53-week period ending on the Saturday nearest to December 31. All references herein to “Fiscal Year 2024”, “Fiscal Year 2023” and “Fiscal Year 2022” represent the fiscal years ended December 28, 2024 (52 weeks), December 30, 2023 (52 weeks) and December 31, 2022 (52 weeks), respectively. Stock Conversion and Stock Split In connection with our initial public offering (the “IPO”), on October 23 , 2024, we converted our Class A voting common stock and Class B non-voting common stock into Common Stock, par value $ 0.01 per share ( “Common Stock”), on a 1-for-1 basis and effected a 8367.19365 -for- 1 stock split with respect to our Common Stock. All figures have been presented on the basis of this stock split wherever applicable for the periods presented w ithin these consolidated financial statements. Initial Public Offering In October 2024, we completed an IPO, in which we issued and sold 11,600,000 shares of our Common Stock, and Imola JV Holdings, L.P. agreed to offer and sold 7,000,000 shares of their Common Stock at a public offering price of $ 22.00 per share. We received approximately $ 233,110 in net proceeds after deducting $ 14,036 of underwriting discounts and approximately $ 8,054 in estimated offering costs. Upon the closing of the IPO, we used the net proceeds from the offering to repay $ 233,100 of debt outstanding under our Term Loan Credit Facility (as defined herein). The underwriters were granted a 30-day option to purchase up to an additional 2,790,000 shares of Common Stock from Imola JV Holdings, L.P., the selling stockholder, which was exercised in full and closed on November 4, 2024. 79 INGRAM MICRO HOLDING CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Amounts in thousands, except share, unit and per share data) Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the financial statement date, and reported amounts of revenue and expenses during the reporting period. We review our estimates and assumptions on an on-going basis. Significant estimates primarily relate to the realizable value of accounts receivable, vendor programs, inventory, goodwill, intangible and other long-lived assets, income taxes, and contingencies and litigation. Actual results could differ significantly from these estimates. Revenue Recognition Revenue Streams In our distribution services model, we buy, hold title to, and sell technology products and provide services to resellers, referred to subsequently as our customer, while also providing resellers with multi-vendor solutions, integration services, electronic commerce tools, marketing, financing, training and enablement, technical support, and inventory management. In both Technology Solutions, which consists of Client and Endpoint Solutions and Advanced Solutions, and Cloud, we generally sell products and services to our customers (resellers) based on purchase orders instead of long-term contracts. Our agreements are generally not subject to minimum purchase requirements. Our customers place purchase orders with us for each transaction. Generally, our customers may cancel, delay or modify their purchase orders. In order to set up an account to trade with us, our customers generally have to accept our terms and conditions of sale which, together with the purchase order, form a binding contract on each individual order to which the purchase order applies. Our pricing varies and depends on many factors including costs, competitive pressure, availability of inventory, seasonality and vendor promotional programs, among others. We may offer early payment discounts or volume incentive rebates to our customers. The customer contracts relating to our Other services generally provide for an initial term of three to five years , subject to extension by the mutual agreement of the parties, allow for termination for convenience by either party after the second year and the pricing is fixed by discrete type of service and typically varies depending on the volume of the relevant services. We do not believe any contract related to our Other services has a material impact on our business or financial condition. Products are delivered via shipment from our facilities, drop-shipment directly from the vendor, or by electronic delivery of keys for software products. We recognize revenue when the control of products is transferred to our customers, which generally happens at the point of shipment or point of delivery. Any supplemental distribution services we provide are typically recognized over time as the services are performed. Service contracts may be based on a fixed price or on a fixed unit-price per transaction or other objective measure of output. Additionally, we offer services related to our supply chain management and CloudBlue platform. Our fee-based commerce and supply chain services are billed and recognized on a per-item service fee arrangement at the point when the service is provided. Our CloudBlue platform generates revenue through licensing the right to use the intellectual property (on-premise license), which is recognized at a point in time, providing the right to access (platform as a service), which is recognized over time across the term of the contract, or through our cloud marketplace, which is recognized in the amount of the net fee associated with serving as an agent when the services are provided. Service revenues represented less than 10% of total net sales for Fiscal Year 2024, Fiscal Year 2023, and Fiscal Year 2022. Related contract liabilities were not material for the periods presented. Agency Services We have contracts with certain customers where our performance obligation is to arrange for the products or services to be provided by another party. In these arrangements, as we assume an agency relationship in the transaction, revenue is recognized in the amount of the net fee associated with serving as an agent when the services are completed. These arrangements primarily relate to certain fulfillment and cloud-related contracts, as well as sales of certain software products, and extended vendor services, such as vendor warranties. Variable Consideration We, under specific conditions, permit our customers to return or exchange products. The provision for estimated sales returns is recorded concurrently with the recognition of revenue. A liability is recorded within accrued expenses and other on the Consolidated Balance Sheets for estimated product returns based upon historical experience and an asset is recorded within Inventory on the Consolidated Balance Sheets for the amount expected to be recorded for inventory upon product return. Amounts recorded within inventory are $ 131,298 and $ 127,143 as of December 28, 2024 and December 30, 2023, respectively. 80 INGRAM MICRO HOLDING CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Amounts in thousands, except share, unit and per share data) We also provide volume discounts, early payment discounts, and other discounts to certain customers which are considered variable consideration. A provision for such discounts is recorded as a reduction of revenue at the time of sale based on an evaluation of the contract terms and historical experience. Practical Expedients We account for shipping and handling activities that occur after the customer has obtained control of a good as fulfillment activities rather than a promised service. Accordingly, we accrue all fulfillment costs related to the shipping and handling of goods at the time of shipment. Additionally, we exclude the amount of certain taxes collected concurrent with revenue-producing activities from revenue. We disaggregate revenue by geography, which we believe provides a meaningful depiction of the nature of our revenue (see Note 11, “Segment Information”). Vendor Programs Funds received from vendors for price protection, product rebates, promotions and marketing, infrastructure reimbursement and meet-competition programs are recorded as adjustments to product costs, revenue, or selling, general and administrative (“SG&A”) expenses, according to the nature of the program. Some of these programs may extend over multiple reporting periods. We accrue rebates or other vendor incentives as earned based on sales of qualifying products or as services are provided in accordance with the terms of the related program. We sell products purchased from many vendors, but generated approximately 19 %, 16 %, and 15 % of our consolidated net sales in Fiscal Year 2024, Fiscal Year 2023, and Fiscal Year 2022, respectively, from products purchased from Apple Inc. Additionally, we generated approximately 10 % of our consolidated net sales in Fiscal Year 2024, Fiscal Year 2023, and Fiscal Year 2022 from products purchased from HP Inc. There were no other vendors whose products represented 10% or more of our net sales for the aforementioned periods. Warranties Our suppliers generally warrant the products distributed by us and allow returns of defective products, including those that have been returned to us by our customers. We generally do not independently warrant the products we distribute; however, local laws might impose warranty obligations upon distributors (such as in the case of supplier liquidation). We are obligated to provide warranty protection for sales of certain IT products within the European Union (“EU”) for up to two years as required under the EU directive where vendors have not affirmatively agreed to provide pass-through protection. In addition, we warrant the services we provide and products that we build-to-order from components purchased from other sources. Provision for estimated warranty costs is recorded at the time of sale and periodically adjusted to reflect actual experience. Warranty expense and the related obligations are not material to our consolidated financial statements. Foreign Currency Translation and Remeasurement Financial statements of our foreign subsidiaries, for which the functional currency is the local currency, are translated into U.S. dollars using the exchange rate at each balance sheet date for assets and liabilities and an average exchange rate for each period for statement of income items. Translation adjustments are recorded in accumulated other comprehensive loss, a component of stockholders’ equity. The functional currency of certain operations within our EMEA, Asia-Pacific, and Latin America regions is the U.S. dollar; accordingly, the monetary assets and liabilities of these subsidiaries are remeasured into U.S. dollars at the exchange rate in effect at the balance sheet date. Revenues, expenses, gains or losses are remeasured at the average exchange rate for the period. The remeasurement gains and losses of these operations as well as gains and losses from foreign currency transactions are included in the Consolidated Statements of Income. Cash and Cash Equivalents We consider all highly liquid investments with original maturities of three months or less from the date of purchase to be cash equivalents. We had $ 19,377 and $ 11,971 of cash equivalents as of December 28, 2024 and December 30, 2023, respectively. 81 INGRAM MICRO HOLDING CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Amounts in thousands, except share, unit and per share data) Book overdrafts of $ 544,029 and $ 409,420 as of December 28, 2024 and December 30, 2023, respectively, represent checks issued on disbursement bank accounts but not yet paid by such banks. These amounts are classified as accounts payable in our Consolidated Balance Sheets. We typically fund these overdrafts through normal collections of funds or transfers from other bank balances at other financial institutions. Under the terms of our facilities with the banks, the respective financial institutions are not legally obligated to honor the book overdraft balances as of December 28, 2024 and December 30, 2023, nor any balance on any given date. Trade Accounts Receivable We maintain an allowance for doubtful accounts receivable for expected losses in accordance with Accounting Standards Codification (“ASC”) 326, Financial Instruments — Credit Losses. In estimating the required allowance, we take into consideration the overall quality and aging of the receivable portfolio, the large number of customers and their dispersion across wide geographic areas, the existence of credit insurance where applicable, specifically identified customer risks, historical write-off experience and the current economic environment, reasonable and supportable forecasts of future economic conditions, and other factors that may affect our ability to collect from customers. Notes Receivable From time to time, we may provide loans to our customers to meet certain strategic objectives. These amounts are presented within “other current assets” and “other assets” on our Consolidated Balance Sheets with the associated cash flows presented within investing activities on our Consolidated Statements of Cash Flows. Factoring Programs We have several uncommitted factoring programs under which trade accounts receivable of several customers may be sold, without recourse, to financial institutions. Available capacity under these programs is dependent on the level of our trade accounts receivable eligible to be sold into these programs and the financial institutions’ willingness to purchase such receivables. The receivables under these factoring programs are sold at face value and are excluded from our Consolidated Balance Sheets. We account for these transactions as sales of receivables because control of the underlying asset is transferred and subsequent to the date of transfer, we typically do not have any continuing involvement in the transferred asset, except as discussed below. For certain of our factoring programs in EMEA, there is a deferred purchase price (“DPP”) which is paid to us at a later time once the customer pays the factored invoices. Subsequent to the sale, the DPP represents a beneficial interest in the transferred trade accounts receivable and is disclosed as a non-cash investing activity in our Consolidated Statements of Cash Flows. Accordingly, cash proceeds from the payments of DPPs are presented as investing activities in our Consolidated Statements of Cash Flows. At December 28, 2024 and December 30, 2023, there were $ 54,912 and $ 48,532 , respectively, of DPP within other current assets on our Consolidated Balance Sheets. In arrangements where we collect the customer payments on behalf of the factor, the net cash flows related to these collections are reported as financing activities in the Consolidated Statements of Cash Flows. At December 28, 2024 and December 30, 2023, we recorded unremitted cash within accrued expenses and other of $ 4,497 and $ 16,066 , respectively. At December 28, 2024 and December 30, 2023, we had a total of $ 737,302 and $ 738,714 , respectively, of trade accounts receivable sold to and held by financial institutions under these programs. Factoring fees of $ 38,619 , $ 27,292 , and $ 16,075 were incurred in Fiscal Year 2024, Fiscal Year 2023, and Fiscal Year 2022, respectively, related to the sale of trade accounts receivable under the facilities and are included in “other expense” in the other (income) expense section of our Consolidated Statements of Income. 82 INGRAM MICRO HOLDING CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Amounts in thousands, except share, unit and per share data) Supplier Finance Programs As part of our ongoing efforts to manage our working capital, we have worked with our vendors to optimize our terms and conditions, which include the terms of payment to the vendor. We are party to agreements, initiated either by the vendor or us, which allow vendors, at their discretion, to determine invoices that they want to sell to participating financial institutions. We are not a party to the agreements between the participating financial institutions and the vendors in connection with these programs, and the financial institutions do not provide us with incentives such as rebates. There are no assets pledged under these agreements and no interest is charged by the financial institutions as balances are typically paid when they are due. Certain agreements may require a parent guarantee, although parent guarantees are also required in certain vendor agreements that do not involve financial institutions. The payment terms under these arrangements typically range from 30 to 90 days. Certain programs provide for extended payment terms, which are within standard industry practice and consistent with the range of payment terms we negotiate with our vendors, regardless of whether they have an agreement with a financial institution. The following table is a rollforward of our outstanding obligations under our supplier finance programs: Fiscal Year 2024 Obligations outstanding at the beginning of the year $ 2,373,913 Confirmed invoices added during the year 11,210,979 Confirmed invoices paid during the year ( 11,083,805 ) Effect of foreign currency fluctuations ( 108,332 ) Obligations outstanding at the end of the year $ 2,392,755 In situations where amounts are not paid within the specified payment terms and interest is incurred, we reclassify the amount from accounts payable to debt. There were no outstanding payment obligations under these programs included in short-term debt and current maturities of long-term debt in the Consolidated Balance Sheets as of December 28, 2024 and December 30, 2023. Inventory Our inventory consists of finished goods purchased from various vendors for resale. We value our inventory at the lower of its cost or net realizable value, cost being determined on a moving average cost basis, which approximates the first-in, first out method. We write down our inventory for estimated excess or obsolescence equal to the difference between the cost of inventory and the net realizable value based upon an aging analysis of the inventory on hand, specifically known inventory-related risks (such as technological obsolescence and the nature of vendor terms regarding price protection and product returns), foreign currency fluctuations for foreign-sourced products, and assumptions about future demand. Market conditions or changes in terms and conditions by our vendors that are less favorable than those projected by management may require additional inventory write-downs, which could have an adverse effect on our consolidated financial results. Inventory is determined from the price we pay vendors, including freight and duties; we do not include labor, overhead, or other general or administrative costs in our inventory. Property and Equipment Property and equipment are recorded at cost and depreciated using the straight-line method over the estimated useful lives noted below. We also capitalize computer software costs that meet both the definition of internal-use software and defined criteria for capitalization. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful life. Depreciable lives of property and equipment are as follows: Buildings 30 - 40 years Leasehold improvements Shorter of the lease term or 3 - 17 years Distribution equipment 5 - 10 years Computer equipment and software 4 - 10 years Maintenance, repairs, and minor renewals are charged to expense as incurred. Additions, major renewals, and betterments to property and equipment are capitalized. 83 INGRAM MICRO HOLDING CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Amounts in thousands, except share, unit and per share data) Operating Leases Our leased physical properties are operating leases and we recognize rent expense on a straight-line basis. We recognize a right-of-use asset and lease liability within our Consolidated Balance Sheets for operating leases with terms greater than twelve months. The initial measurement of the lease liability is measured at the present value of lease payments not yet paid discounted using our incremental borrowing rate at the lease commencement date. Leases with an initial term of twelve months or less are not recorded on our Consolidated Balance Sheets, and we do not separate nonlease components from lease components. Long-Lived and Intangible Assets We assess potential impairments to our long-lived and intangible assets when events or changes in circumstances indicate that the carrying amount may not be fully recoverable. If required, an impairment loss is recognized to the extent the carrying value exceeds the fair value of the assets. Amortization expense was $ 86,878 , $ 87,003 , and $ 91,039 for Fiscal Year 2024, Fiscal Year 2023, and Fiscal Year 2022, respectively. Intangible assets consist of the following: December 28, 2024 December 30, 2023 Gross Amounts Accumulated Amortization Net Amounts Gross Amounts Accumulated Amortization Net Amounts Customer and vendor relationships $ 583,980 $ ( 170,831 ) $ 413,149 $ 599,237 $ ( 125,157 ) $ 474,080 Tradename and trademarks 417,532 ( 97,485 ) 320,047 429,924 ( 71,696 ) 358,228 Software and developed technology 70,000 ( 30,625 ) 39,375 70,000 ( 21,875 ) 48,125 Others 7,330 ( 7,330 ) — 7,590 ( 7,590 ) — $ 1,078,842 $ ( 306,271 ) $ 772,571 $ 1,106,751 $ ( 226,318 ) $ 880,433 The remaining useful lives of intangible assets are as follows: Customer and vendor relationships 9 years Tradename and trademarks 12 years Software and developed technology 5 years Future minimum amortization expense of finite-lived identifiable intangible assets that we expect to recognize over the next five years and thereafter are as follows: 2025 $ 85,525 2026 85,447 2027 85,437 2028 85,437 2029 81,017 Thereafter 349,708 $ 772,571 There were no material impairments to our long-lived and intangible assets in any of the periods presented herein. Goodwill Goodwill represents the excess of the purchase price over the fair value of the identifiable net assets acquired in an acquisition and is reviewed annually for potential impairment, or when circumstances warrant. Goodwill at December 28, 2024 primarily represents the excess of the consideration paid over the fair value of net assets acquired in connection with the Imola Mergers. 84 INGRAM MICRO HOLDING CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Amounts in thousands, except share, unit and per share data) Goodwill is required to be tested for impairment at least annually or sooner whenever events or changes in circumstances indicate that goodwill may be impaired. Goodwill impairment tests require judgment, including the identification of reporting units, assignment of assets and liabilities to reporting units, assignment of goodwill to reporting units, and determination of the fair value of each reporting unit. We perform our annual goodwill impairment assessment during our fiscal fourth quarter as of the date of our November month end. We have the option of first assessing qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. Such review includes an evaluation of whether events and circumstances have occurred that may indicate a potential change in recoverability of goodwill, including the impacts of a deterioration in general economic conditions, an increased competitive environment, a change in management, key personnel, strategy, vendors, or customers, negative or declining cash flows, or a decline in actual or planned revenue or earnings compared with actual and projected results of relevant prior periods. If, based on a review of qualitative factors, it is more likely than not that the fair value of a reporting unit is less than its carrying value, we perform a quantitative analysis by comparing the fair value of a reporting unit with its carrying amount. If the carrying value exceeds the fair value, we measure the amount of impairment loss, if any, by comparing the fair value of the reporting unit goodwill to its carrying amount. We performed a quantitative impairment analysis of goodwill in Fiscal Year 2024 and Fiscal Year 2023 for our North America and EMEA regions. In determining the fair value of our reporting units, we assessed general economic conditions, industry and market considerations, the impact of recent events to financial performance and other relevant events. Based on the valuations prepared, we determined that the estimated fair values of our reporting units were greater than their carrying values and no impairment of goodwill was identified in either period. In Fiscal Year 2024 and Fiscal Year 2023 we performed a qualitative analysis of goodwill for our Asia-Pacific and Latin America regions. No goodwill impairment was recorded during any of the periods presented herein based on the result of the procedures performed. The changes in the carrying amount of goodwill are as follows: North America EMEA Asia-Pacific Latin America Total Balance at December 31, 2022 $ 423,800 $ 230,360 $ 147,252 $ 43,324 $ 844,736 Adjustments /reclassifications /foreign currency exchange 1,365 4,389 ( 1,538 ) 2,828 7,044 Balance at December 30, 2023 $ 425,165 $ 234,749 $ 145,714 $ 46,152 $ 851,780 Adjustments /reclassifications /foreign currency exchange ( 2,852 ) ( 6,705 ) ( 3,962 ) ( 4,599 ) ( 18,118 ) Balance at December 28, 2024 $ 422,313 $ 228,044 $ 141,752 $ 41,553 $ 833,662 Earn-outs and Holdbacks We may be required to make earn-out payments upon the achievement of certain predefined targets attributable to acquisitions completed in recent years. At the acquisition date, the value of any earn-out is estimated using various valuation methodologies which include projections of future earnings as defined in each acquisition purchase agreement. Such projections are then discounted to reflect the risk in achieving the projected earnings, as well as the passage of time and time value of money. The fair value measurement of the earn-out is based primarily on significant inputs not observable in an active market and thus represents a Level 3 measurement as defined under U.S. GAAP. Changes in the fair value of the earn-out primarily reflect adjustments to the timing and amount of payments as well as the related accretion driven by the time value of money. These adjustments are recorded within SG&A expenses within the Consolidated Statements of Income, as applicable. The fair value of earn-out contingent consideration is presented within accrued expenses and other in our Consolidated Balance Sheets. For amounts currently recorded on the Consolidated Balance Sheets, see Note 13, “Fair Value Measurements”. In connection with the acquisition by Platinum, part of the consideration for the share capital of Ingram Micro included additional payments, not to exceed $ 325,000 in the aggregate, on the achievement by Ingram Micro and its subsidiaries of certain adjusted EBITDA targets for Fiscal Years 2021, 2022, and 2023. Based upon adjusted EBITDA achieved following the Imola Mergers through January 1, 2022, this contingent consideration of $ 325,000 was fully earned in its entirety and was paid to HNA Tech on April 11, 2022. 85 INGRAM MICRO HOLDING CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Amounts in thousands, except share, unit and per share data) In addition to earn-outs, we may be required to make additional payments associated with holdbacks in accordance with the applicable acquisition purchase agreement. Holdbacks are accrued for at the time of acquisition and cash outflows are recorded as additional purchase price at the time of payment. Concentration of Credit Risk Financial instruments that potentially subject us to significant concentrations of credit risk consist principally of cash and cash equivalents, trade accounts receivable from customers and vendors, borrowings, and derivative financial instruments. Our cash and cash equivalents are deposited and/or invested with various financial institutions globally that are monitored by us regularly for credit quality. We are exposed to credit risk in the event of default by financial institutions to the extent that cash balances with financial institutions are in excess of amounts that are insured. We have not experienced any material credit losses on such deposits for the periods presented. Our trade accounts receivable reflect a large number of customers dispersed across wide geographic areas, none of which has accounted for 10% or more of our consolidated net sales in any of the periods presented herein and no customer accounts receivable balance was greater than 10% of our total trade accounts receivable at December 28, 2024 or December 30, 2023. We perform ongoing credit evaluations of our customers’ financial conditions, obtain credit insurance in many locations, and require collateral in certain circumstances. We maintain an allowance for estimated credit losses. Derivative Financial Instruments We operate in various locations around the world. We reduce our exposure to fluctuations in foreign exchange rates by creating offsetting positions through the use of derivative financial instruments in situations where there are significant exposures and there are not offsetting balances that create a natural hedge. The market risk related to the foreign exchange agreements is offset by changes in the valuation of the underlying items being hedged. In accordance with our policy, we do not use derivative financial instruments for trading or speculative purposes, nor are we a party to leveraged derivatives. Foreign exchange risk is managed primarily by using forward contracts and spot transactions to hedge foreign currency-denominated receivables, payables, and intercompany loans and expenses. Interest rate swaps and forward contracts may be used to hedge foreign currency-denominated principal and interest payments related to intercompany loans. All derivatives are recorded in our Consolidated Balance Sheets at fair value. The estimated fair value of derivative financial instruments represents the amount required to enter into similar offsetting contracts with similar remaining maturities based on market-derived prices. Changes in the fair value of derivatives not designated as hedging instruments are recorded in current earnings. Changes in the fair value of derivatives designated as hedging instruments are reflected in accumulated other comprehensive loss in our Consolidated Balance Sheets. The notional amount of forward exchange contracts is the amount of foreign currency bought or sold at maturity. The notional amount of interest rate swaps is the underlying principal amount used in determining the interest payments exchanged over the life of the swap. Notional amounts are indicative of the extent of our involvement in the various types and uses of derivative financial instruments but are not a measure of our exposure to credit or market risks through our use of derivatives. Credit exposure for derivative financial instruments is limited to the amounts, if any, by which the counterparties’ obligations under the contracts exceed our obligations to the counterparties. We manage the potential risk of credit losses through careful evaluation of counterparty credit standing, selection of counterparties from a limited group of financial institutions, and other contract provisions. Comprehensive Income Comprehensive income consists primarily of our net income and foreign currency translation adjustments, net of tax. Earnings Per Share Basic Earnings Per Share (“Basic EPS”) excludes dilution and is computed by dividing net income by the weighted average number of common shares outstanding during the reported period. Diluted Earnings Per Share (“Diluted EPS”) is computed by dividing net income by the weighted average number of common shares outstanding, inclusive of the dilutive effect of restricted stock units, during the reported period. 86 INGRAM MICRO HOLDING CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Amounts in thousands, except share, unit and per share data) The computation of Basic and Diluted EPS is as follows: Fiscal Year 2024 2023 2022 Basic earnings per share: Net income attributable to common stockholders $ 264,222 $ 352,712 $ 2,394,489 Weighted-average number of common shares - basic 224,646,462 222,400,000 222,400,000 Basic earnings per common share $ 1.18 $ 1.59 $ 10.77 Diluted earnings per common share: Net income attributable to common stockholders $ 264,222 $ 352,712 $ 2,394,489 Weighted-average number of common shares - basic 224,646,462 222,400,000 222,400,000 Effect of dilutive securities Restricted stock units 72,043 — — Weighted-average number of common shares - diluted 224,718,505 222,400,000 222,400,000 Diluted earnings per common share $ 1.18 $ 1.59 $ 10.77 There were no anti-dilutive securities for Fiscal Year 2024, Fiscal Year 2023, and Fiscal Year 2022. Income Taxes We estimate income taxes in each of the taxing jurisdictions in which we operate. This process involves estimating our actual current tax expense together with assessing the future tax impact of any differences resulting from the different treatment of certain items, such as the timing for recognizing revenues and expenses for tax versus financial reporting purposes. These differences may result in deferred tax assets and liabilities, which are included in our Consolidated Balance Sheets. We are required to assess the likelihood that our deferred tax assets, which include net operating loss carryforwards, tax credits and temporary differences that are expected to be deductible in future years, will be recoverable from future taxable income. In making that assessment, we consider the nature of the deferred tax assets and related statutory limits on utilization, recent operating results, future market growth, forecasted earnings, future taxable income, the mix of earnings in the jurisdictions in which we operate and prudent and feasible tax planning strategies. If, based upon available evidence, recovery of the full amount of the deferred tax assets is not likely; we provide a valuation allowance on any amount not likely to be realized. Our effective tax rate includes the impact of not providing taxes on undistributed foreign earnings considered indefinitely reinvested. Material changes in our estimates of cash, working capital and long-term investment requirements in the various jurisdictions in which we do business could impact our effective tax rate if we no longer consider our foreign earnings to be indefinitely reinvested. The provision for tax liabilities and recognition of tax benefits involves evaluations and judgments of uncertainties in the interpretation of complex tax regulations by various taxing authorities. In situations involving uncertain tax positions related to income tax matters, we do not recognize benefits unless their sustainability is deemed more likely than not. As additional information becomes available, or these uncertainties are resolved with the taxing authorities, revisions to these liabilities or benefits may be required, resulting in additional provision for or benefit from income taxes reflected in our Consolidated Statements of Income. 87 INGRAM MICRO HOLDING CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Amounts in thousands, except share, unit and per share data) Accounting for Employee Awards Cash-based Compensation We issue cash awards to certain employees, which include both time-vested and performance-vested awards. The time-vested cash awards vest over a time period of three years , and the performance-vested cash awards vest upon the achievement of certain performance targets measured after a time period of three years . The performance condition for the cash awards for grants to management is based on earnings growth. Cumulative compensation expense for cash awards is recognized as a liability. Each cash award has a fixed fair value of $ 1.00 . We recognize these compensation costs, net of an estimated forfeiture rate, over the requisite service period of the award, which is the vesting term of the outstanding cash award. We estimate the forfeiture rate based on our historical experience. Stock-based Compensation In connection with the IPO, our board of directors adopted, and our stockholders approved, the 2024 Stock Incentive Plan (the “2024 Plan”). The purpose of the 2024 Plan is to assist the Company in attracting, retaining, motivating, and rewarding certain employees, officers, and directors of the Company and its affiliates and promoting the creation of long-term value for stockholders of the Company by closely aligning the interests of such individuals with those of the stockholders. The total number of shares of our common stock available for issuance pursuant to awards under the 2024 Plan is 20,347,826 , subject to adjustment as provided in the plan. The 2024 Plan provides for the grant of non-qualified stock options, restricted stock, restricted stock units, other stock-based awards, or any combination thereof to any of our employees and directors of our subsidiaries or affiliates. During the fourth quarter of 2024, in connection with the IPO, we issued 2,607,713 time vesting restricted stock units with an average grant date fair value of $ 22.01 per share to certain key employees and directors, of which 1,473,720 restricted stock units vested immediately upon grant resulting in an expense of $ 32,422 that was recorded within SG&A in the fourth quarter. We also issued 2,467,775 of performance vesting restricted stock units, 50 % of which will vest upon the achievement of a qualifying event, whereby the returns on invested capital by Platinum is 2.0 times the total of all capital or other contributions made by Platinum and the remaining 50 % will vest upon the achievement of a qualifying event, whereby the returns on invested capital by Platinum is 2.5 times the total of all capital or other contributions made by Platinum, in each case, except in certain circumstance s as specified in the award agreement, subject to the grantee ’ s continuous service with us through such qualifying event. The weighted-average grant date fair value of these awards, which was calculated using a Monte Carlo valuation model, was $ 17.42 per share . The assumptions used to value our performance vesting restricted stock units were a risk-free interest rate of 3.98 %, an expected volatility of 52.88 %, and a dividend yield of 0.00 %. Participation Plan for Certain Key Employees In July 2021, we adopted the 2021 Participation Plan (the “Plan”) to provide incentive compensation to certain key management. Under the Plan, participants are granted units, the value of which are related to our financial performance. Half of the units vest over a period of time specified in the applicable award agreement, typically in annual tranches over five years . Once vested, certain qualifying events are required for any payment related to these units, with accelerated vesting in the event of certain change in control or public offering events, in each case subject to the participant’s continued employment through the applicable vesting date. The other half are payable to participants only upon the occurrence of certain qualifying events. Any payment to a participant under the time-based or performance-based units is conditioned on our reaching a minimum valuation at the time of a qualifying event or through a series of qualifying events. A qualifying event may be either a sale of some or all of our capital stock or a sale of all or substantially all of our assets. Upon the Plan’s inception, we issued 216,874,665 performance units with an initial grant date value of $ 1.00 to key management of which none are vested. I mmediately prior to the IPO, the Plan was terminated, all participation units were cancelled, and no amounts were paid under the Plan. 88 INGRAM MICRO HOLDING CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Amounts in thousands, except share, unit and per share data) Sale of a Substantial Portion of our Commerce & Lifecycle Services ( “ CLS ” ) Business On December 6, 2021, we entered into a Purchase Agreement with CMA CGM Group to sell a substantial portion of our CLS businesses (“CLS Sale”), which comprises our other services offerings defined as “Other” herein. The sale included Shipwire and our e-commerce and other forward logistics businesses in North America, Europe, Latin America and Asia-Pacific at an initial cash purchase price of $ 3,000,000 subject to certain adjustments. On April 4, 2022, we completed the main closing of the sale of most of our CLS business in Europe, U.S., Canada, Peru, Colombia, Chile, and Argentina. We also closed the sale of our CLS businesses in Australia, India, Mexico and Costa Rica at the end of April 2022, New Zealand at the end of June 2022, and China in November 2022. These deferred closings of the CLS Sale were all completed between the primary closing date and November 16, 2022. As a result of the CLS Sale, we recorded a gain of $ 2,283,820 during Fiscal Year 2022, which had an income tax provision of $ 246,450 , or an effective tax rate of 10.8 percentage points. The CLS Sale effective tax rate is lower than statutory rates primarily due to the gain on sale of European subsidiaries being tax exempt due to the participation exemption in Europe. Sale Leaseback of German Warehouse In the second quarter of 2022, we sold one of our warehouses in Germany and leased it back from the buyer for an initial lease term of ten years . The net proceeds of the sale-leaseback transaction were $ 43,691 and it resulted in a gain of $ 7,050 which is included within SG&A expenses on the Consolidated Statements of Income for Fiscal Year 2022. Out of Period Correction As previously disclosed in the second quarter of 2024, we identified fraudulent activity within our India Professional Services business. In the fourth quarter of 2024, we continued our investigation into the fraudulent activity involving certain of our then-current employees (who have since been terminated or resigned) and a relatively small number of customers of our subsidiary in India. As a result of our continued investigation, we became aware that certain purchases of professional services were fraudulent due to a lack of evidence confirming delivery of service or any contractual obligation to provide those services and now date back to as early as 2022. As a result, certain additional amounts were misstated on our Consolidated Statements of Income and on our Consolidated Balance Sheets. Management has determined that these misstatements were not material to the previously issued consolidated financial statements and the financial statements as of and for Fiscal Year 2024, and therefore, has determined to correct for these additional misstatements in addition to other identified immaterial errors, out of period in the fourth quarter of Fiscal Year 2024. The incremental misstatements related to the fraudulent activity in India decreased operating income by $ 8,335 , income before income taxes by $ 9,554 , and net income by $ 7,476 and the other identified immaterial errors decreased operating income and income before taxes by $ 4,039 and net income by $ 3,022 resulting in combined decreases to operating income of $ 12,374 , income before income taxes of $ 13,593 , and net income of $ 10,498 . Recently Adopted Accounting Standards In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280) Improvements to Reportable Segment Disclosures”, which requires public entities to disclose information about their reportable segments’ significant expenses on an interim and annual basis. This update is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, and requires retrospective application to all prior periods presented in the financial statements. The adoption of this guidance resulted in additional reportable segment disclosures (see Note 11, “Segment Information”) and did not have a material financial impact on our results of operations, financial position, or liquidity. New Accounting Standards In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740) Improvements to Income Tax Disclosures”, which requires public entities to disclose specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold on an annual basis in order to enhance the transparency and decision usefulness of income tax disclosures. This update is effective for annual periods beginning after December 15, 2024, with early adoption permitted. We are currently evaluating the adoption impact that this ASU will have on our income tax disclosures in the notes to our consolidated financial statements. 89 INGRAM MICRO HOLDING CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Amounts in thousands, except share, unit and per share data) In November 2024, the FASB issued ASU 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses”, which requires disclosure in the notes to the financial statements of specified information about certain costs and expenses. The amendments are effective for fiscal years beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The amendments should be applied either prospectively to financial statements issued for reporting periods after the effective date of this ASU or retrospectively to any or all prior periods presented in the financial statements. We are currently evaluating the adoption impact that this ASU will have on our consolidated financial statements and related disclosures. Note 3 — Acquisitions, Goodwill and Intangible Assets Acquisitions In the third quarter of 2024, we exercised our option to acquire the remaining 49 % of shares of Colsof, a cloud services provider in Latin America, of which we now own 100 %, and paid cash of $ 22,621 . This acquisition has been included in our consolidated results of operations since the acquisition date and pro forma results of operations have not been presented to reflect this acquisition as it was not material to our consolidated financial statements. There were no material acquisitions during Fiscal Year Ended 2023 and Fiscal Year Ended 2022. Earn-outs and Holdbacks Earn-out liabilities for Fiscal Year 2024 and Fiscal Year 2023 decreased by $ 1,503 to $ 2,888 and increased by $ 84 to $ 4,391 , respectively. Holdback liabilities for Fiscal Year Ended 2024 and Fiscal Year Ended 2023 decreased by $ 111 to $ 0 and $ 988 to $ 111 , respectively. Note 4 — Property and Equipment Property and equipment consist of the following: December 28, 2024 December 30, 2023 Land $ 3,999 $ 4,251 Buildings and leasehold improvements 97,804 87,088 Distribution equipment 200,514 161,424 Computer equipment and software 478,361 357,630 780,678 610,393 Accumulated depreciation ( 337,045 ) ( 247,596 ) Construction-in-progress 38,870 89,816 Property and equipment, net $ 482,503 $ 452,613 Depreciation expense was $ 102,453 , $ 97,145 , and $ 106,072 for Fiscal Year 2024, Fiscal Year 2023, and Fiscal Year 2022, respectively. Note 5 — Leases Our leasing portfolio includes lease arrangements for our warehouses, distribution centers, corporate offices and equipment. We lease substantially all our facilities on varying terms which often include one or more options to renew. We include options to extend in the lease term if they are reasonably certain of being exercised. We do not have residual value guarantees associated with our leases. 90 INGRAM MICRO HOLDING CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Amounts in thousands, except share, unit and per share data) The following table includes the components of our rent expense recorded in SG&A expense: Fiscal Year Fiscal Year 2024 2023 Operating lease cost $ 128,935 $ 108,644 Variable lease cost 39,894 42,110 Short-term lease cost 6,823 5,640 Total $ 175,652 $ 156,394 Certain leases contain variable payments, which are expensed as incurred and not included in our operating lease right-of-use assets and operating lease liabilities. These amounts primarily include payments for maintenance, utilities, taxes, and insurance on our office and fulfillment center leases. Operating lease right-of-use assets and operating lease liabilities are recognized based on the present value of future minimum lease payments at lease commencement. Certain adjustments to our operating lease right-of-use assets may be required for items such as initial direct costs paid or incentives received. We calculate the present value of our leases using an estimated incremental borrowing rate, which requires judgment. Our incremental borrowing rate is based upon an estimate of our regional secured borrowing rates. The estimated secured borrowing rates used at the date of adoption for each lease varies in accordance with the term as well as geographical region of the lease. As of December 28, 2024, annual scheduled lease payments were as follows: 2025 $ 111,953 2026 112,859 2027 88,725 2028 64,071 2029 52,917 Thereafter 129,532 Total lease payments 560,057 Less: imputed interest ( 96,675 ) Present value of lease liabilities $ 463,382 The weighted average remaining term for our leases as of December 28, 2024 and December 30, 2023 was 5.9 years and 6.0 years, respectively. The weighted average discount rate for our leases as of December 28, 2024 and December 30, 2023 was 6.3 % and 6.1 % , respectively. Supplemental cash flow information related to our leases is as follows: Fiscal Year Fiscal Year Fiscal Year 2024 2023 2022 Cash paid for amounts included in the measurement of operating lease liabilities $ 128,936 $ 115,933 $ 108,728 Operating lease right-of-use assets obtained in exchange for operating lease liabilities $ 113,381 $ 154,925 $ 145,854 91 INGRAM MICRO HOLDING CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Amounts in thousands, except share, unit and per share data) Note 6 — Debt The carrying value of our outstanding debt consists of the following: December 28, 2024 December 30, 2023 Senior secured notes, 4.75 % due 2029, net of unamortized deferred financing costs of $ 30,232 and $ 37,250 , respectively $ 1,969,768 $ 1,962,750 Term loan credit facility, net of unamortized discount of $ 12,020 and $ 11,733 , respectively, and unamortized deferred financing costs of $ 28,998 and $ 35,780 , respectively 885,882 1,362,487 ABL revolving credit facility — 30,000 Revolving trade accounts receivable-backed financing programs 312,630 331,920 Lines of credit and other debt 184,860 236,451 Total debt 3,353,140 3,923,608 Short-term debt and current maturities of long-term debt ( 184,860 ) ( 265,719 ) Total long-term debt $ 3,168,280 $ 3,657,889 On April 22, 2021, in anticipation of the acquisition of Ingram Micro by Platinum, Escrow Issuer offered $ 2,000,000 Senior Secured Notes due May 2029 (“2029 Notes”). Prior to the acquisition, the 2029 Notes were the sole obligation of the Escrow Issuer. Upon consummation of the acquisition on July 2, 2021, the proceeds from the notes were used, in part, to finance the acquisition and repay existing indebtedness. The notes bear interest at a rate of 4.750 % per annum, which is payable semi-annually on May 15 and November 15 of each year, beginning on November 15, 2021. On July 2, 2021, we recognized $ 1,945,205 net of debt issuance costs of $ 54,795 , associated with the 2029 Notes. On July 2, 2021, we entered into the Term Loan Credit Facility for $ 2,000,000 , the proceeds of which were also used to, among other things, finance a portion of the acquisition of Ingram Micro by Platinum and repay certain of our existing indebtedness. We recognized $ 1,920,761 , net of debt issuance costs and discount of $ 59,239 and $ 20,000 , respectively, related to this facility. The Term Loan Credit Facility had an original maturity of July 2, 2028 and amortizes in equal quarterly installments aggregating to 1.00 % per annum. In June 2023, we voluntarily prepaid $ 500,000 of our Term Loan Credit Facility over and above normal quarterly installments, which, as a result of this prepayment, are no longer mandatory. In September 2023, we refinanced our Term Loan Credit Facility, reducing the interest rate spread over SOFR by 50 basis points. We also amended the aforementioned interest rate cap agreements to reflect the updated notional amount of the Term Loan Credit Facility, with the 5.317 % upper limit on the SOFR interest rate remaining unchanged under the amended interest rate cap agreements. In September 2024, we refinanced our Term Loan Credit Facility again, reducing the interest rate spread over SOFR by an additional 25 basis points, eliminating the credit-spread adjustments and extending the maturity date to September 19, 2031. Borrowings under the Term Loan Credit Facility bear interest at a rate per annum equal to, at our option, either (1) the base rate (which is the highest of (a) the then-current federal funds rate set by the Federal Reserve Bank of New York, plus 0.50 %, (b) the prime rate on such day and (c) the one-month SOFR rate published on such date plus 1.00 % and is subject to a 1.50 % floor) plus a margin of 1.75 % or (2) one-, three- or six-month SOFR (subject to a 0.50 % floor) plus a margin of 2.75 %. In connection with these refinancings, we repaid an incremental $ 50,000 and $ 100,000 in September 2023 and September 2024, respectively, of our Term Loan Credit Facility and in June 2024, we voluntarily repaid an incremental $ 150,000 of our Term Loan Credit Facility. Upon the closing of the IPO, we used the net proceeds from the offering to repay an additional $ 233,100 of our Term Loan Credit Facility. As of December 28, 2024 and December 30, 2023, $ 885,882 and $ 1,362,487 , respectively, remained outstanding under the Term Loan Credit Facility. 92 INGRAM MICRO HOLDING CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Amounts in thousands, except share, unit and per share data) On July 2, 2021, we entered into new ABL Credit Facilities providing for senior secured asset-based, multi-currency revolving loans and letter of credit availability in an aggregate amount of up to $ 3,500,000 (the “ABL Revolving Credit Facility”) and a senior secured asset-based term loan facility of $ 500,000 (the “ABL Term Loan Facility”), both of which had contractual maturity dates in July 2026. The ABL Term Loan Facility was repaid fully in April 2022. We may borrow under the ABL Revolving Credit Facility only up to our available borrowing base capacity. Borrowings under the ABL Revolving Credit Facility bear interest at a rate per annum equal to, at our option, either (1) the base rate plus a margin ranging (based on the availability under the ABL Revolving Credit Facility) from 0.25 % to 0.75 % or (2) SOFR (subject to a 0 % floor) plus a margin ranging (based on the availability under the ABL Revolving Credit Facility) from 1.25 % to 1.75 %. In September 2024, we amended the ABL Credit Agreement, to amend the ABL Revolving Credit Facility to, among other things, extend the maturity date to September 20, 2029. As of December 28, 2024 and December 30, 2023, we had borrowings of $ 0 and $ 30,000 , respectively, under our ABL Revolving Credit Facility. The weighted-average interest rate on the outstanding borrowings under the ABL Revolving Credit Facility, as amended, was 6.7 % and 8.1 % per annum at December 28, 2024 and December 30, 2023, respectively. We have a revolving trade accounts receivable-backed financing program in Europe (the “European ABS facility”), which provides for a borrowing capacity of up to € 375,000 , or approximately $ 390,788 at December 28, 2024 exchange rates. This program, which matures in October 2026, requires certain commitment fees and borrowings incur financing costs based on the local short-term bank indicator rate for the currency in which the drawing is made plus a predetermined margin. At December 28, 2024 and December 30, 2023, we had borrowings of $ 312,630 and $ 331,920 , respectively, under the European ABS Facility. The weighted-average interest rate on the outstanding borrowings under the European ABS Facility, as amended, was 4.9 % and 4.4 % per annum at December 28, 2024 and December 30, 2023, respectively. At December 28, 2024, our actual aggregate capacity under our ABL Revolving Credit Facility and other receivable-backed programs was approximately $ 3,870,281 , of which $ 312,630 was used. Even if we do not borrow or choose not to borrow to the full available capacity of certain programs, most of our trade accounts receivable-backed financing programs are subject to certain restrictions outlined in our ABL Revolving Credit Facility. These restrictions generally prohibit us from assigning or transferring the underlying eligible receivables as collateral for other financing programs, unless the underlying eligible receivables are sold in conjunction with a dedicated, non-recourse facility. We also have additional lines of credit, short-term overdraft facilities and other credit facilities with various financial institutions worldwide, which provide for borrowing capacity aggregating to $ 850,262 at December 28, 2024. Most of these arrangements are on an uncommitted basis and are reviewed periodically for renewal. At December 28, 2024 and December 30, 2023, we had $ 182,713 and $ 217,463 , respectively, outstanding under these facilities. The weighted-average interest rate on the outstanding borrowings under these facilities, which may fluctuate depending on geographic mix, was 6.9 % and 7.9 % per annum at December 28, 2024 and December 30, 2023, respectively. At December 28, 2024 and December 30, 2023, letters of credit totaling $ 166,613 and $ 108,690 , respectively, were issued to various customs agencies and landlords to support our subsidiaries. The issuance of these letters of credit reduces our available capacity under the corresponding agreements by the same amount. We are subject to certain customary affirmative covenants, including reporting and cash management requirements, and certain customary negative covenants that limit our and our subsidiaries’ ability to incur additional indebtedness or liens, to dispose of assets, to make certain fundamental changes, to enter into restrictive agreements, to make certain investments, loans, advances, guarantees and acquisitions, to prepay certain indebtedness, to pay dividends or other distributions in respect of our and our subsidiaries’ equity interests and to engage in transactions with affiliates. At December 28, 2024 and December 30, 2023 we were in compliance with all covenants and other requirements in all of our debt arrangements. Note 7 — 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. 93 INGRAM MICRO HOLDING CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Amounts in thousands, except share, unit and per share data) The components of income before income taxes consist of the following: Fiscal Year Fiscal Year Fiscal Year 2024 2023 2022 United States $ ( 182,583 ) $ ( 205,969 ) $ 651,446 Foreign 628,449 728,470 2,163,095 Total $ 445,866 $ 522,501 $ 2,814,541 The provision for income taxes consists of the following: Fiscal Year Fiscal Year Fiscal Year 2024 2023 2022 Current: Federal $ 52 $ ( 8,220 ) $ 133,866 State 524 2,828 25,242 Foreign 194,337 233,705 243,688 $ 194,913 $ 228,313 $ 402,796 Deferred: Federal $ ( 18,368 ) $ ( 29,113 ) $ 10,380 State ( 2,826 ) ( 9,818 ) 13,371 Foreign 7,925 ( 19,593 ) ( 6,495 ) ( 13,269 ) ( 58,524 ) 17,256 Provision for income taxes $ 181,644 $ 169,789 $ 420,052 The reconciliation of the statutory U.S. federal income tax rate to our effective tax rate is as follows: Fiscal Year Fiscal Year Fiscal Year 2024 2023 2022 U.S. statutory rate 21.0 % 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 1.0 Effect of change in valuation allowances 0.7 1.2 0.4 Effect of the CLS Sale — — ( 8.3 ) Withholding tax 7.1 4.8 0.9 Other 2.6 ( 0.3 ) ( 0.1 ) Effective tax rate 40.7 % 32.5 % 14.9 % The Organization for Economic Co-operation and Development (“OECD”) has announced a framework to implement a global minimum tax of 15%, referred to as Pillar Two. Certain countries have implemented or are in the process of implementing the Pillar Two legislation, which applied to us beginning in Fiscal Year 2024. While the implementation of this legislation did not materially impact our consolidated financial statements in Fiscal Year 2024 and we do not currently expect a material impact in the future, we continue to monitor the impact as countries implement legislation and the OECD provides additional guidance. 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. 94 INGRAM MICRO HOLDING CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Amounts in thousands, except share, unit and per share data) Significant components of our net deferred tax assets and liabilities are as follows: December 28, 2024 December 30, 2023 Deferred tax assets: Net operating loss carryforwards $ 118,632 $ 140,981 Tax credit carryforwards 89,158 52,653 Interest expense carryforwards 48,760 32,732 Employee benefits 50,740 57,735 Inventory 26,087 30,958 Depreciation and amortization 23,387 25,998 Operating lease liabilities 119,354 121,195 Sales return reserve 35,879 35,320 Allowance on trade accounts receivable 31,807 37,580 Reserves and accruals not currently deductible for income tax purposes 20,849 29,601 Other 33,846 44,059 Total deferred tax assets 598,499 608,812 Valuation allowance ( 129,206 ) ( 106,379 ) Subtotal 469,293 502,433 Deferred tax liabilities: Depreciation and amortization ( 209,616 ) ( 237,963 ) Operating lease assets ( 113,782 ) ( 117,304 ) Inventory rights ( 31,878 ) ( 30,651 ) Other ( 37,698 ) ( 48,127 ) Total deferred tax liabilities ( 392,974 ) ( 434,045 ) Net deferred tax assets $ 76,319 $ 68,388 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 28, 2024, we had deferred tax assets related to NOL carryforwards of $ 118,632 along with a valuation allowance of $ 34,330 . $ 47,677 of the remaining $ 84,302 of net deferred tax assets associated with NOL carryforwards have no expiration date. The NOL carryforwards with no expiration date are comprised of $ 33,554 in Luxembourg, $ 5,982 in Belgium and $ 8,141 in a number of other jurisdictions worldwide. The $ 36,625 of net deferred tax assets associated with NOL carryforwards that have an expiration date are comprised of $ 16,375 in Luxembourg with expirations beginning in 2035 and $ 20,250 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 28, 2024, our tax credit carryforwards for income tax purposes were $ 89,158 . Foreign tax credit carryforwards in the U.S. represent $ 81,232 of that amount, and our total valuation allowance related to such credit carryforwards was $ 81,232 . A number of different federal and state credits with various expiration dates comprised the remaining $ 7,926 of tax credit carryforwards. 95 INGRAM MICRO HOLDING CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Amounts in thousands, except share, unit and per share data) 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. As of December 31, 2022, the valuation allowance increased by a net of $ 24,501 as compared to January 1, 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 $ 3,500,000 and $ 3,400,000 as of December 28, 2024, and December 30, 2023, 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 2024 2023 2022 Gross unrecognized tax benefits at beginning of the year $ 16,785 $ 14,339 $ 18,978 Increases in tax positions for prior years 172 1,048 465 Decreases in tax positions for prior years ( 1,523 ) ( 102 ) ( 315 ) Increases in tax positions for current year 2,203 1,870 1,291 Settlements ( 1,380 ) — ( 935 ) Lapse in statute of limitations ( 591 ) ( 370 ) ( 5,145 ) Gross unrecognized tax benefits at end of the year $ 15,666 $ 16,785 $ 14,339 The total amount of gross unrecognized tax benefits is $ 15,666 as of December 28, 2024, 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 $ 8,985 and $ 9,282 as of December 28, 2024, and December 30, 2023, 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., our federal tax returns for the 2019 through 2022 tax years are under audit by the IRS. It is possible that within the next twelve months, (1) ongoing tax examinations of our U.S. federal tax returns, individual states, and several of our 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. 96 INGRAM MICRO HOLDING CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Amounts in thousands, except share, unit and per share data) Note 8 – Restructuring Costs In the third quarter of 2022, we elected to discontinue our operations in Russia, where we had an office that employed engineering and coding resources that supported the operation and maintenance of the Ingram Micro Cloud Marketplace. As a result, we incurred one-time termination costs of $ 11,377 during Fiscal Year 2022, of which $ 7,141 was recognized within restructuring costs and $ 4,236 was recognized within SG&A expenses on the Consolidated Statements of Income. In the third quarter of 2023, we sold our Russian subsidiary, recognizing a loss of $ 3,068 within SG&A expenses and leaving us with no remaining presence in Russia. In Fiscal Year 2023, as a result of changing global and local market conditions, we initiated a global restructuring plan which resulted in organizational and staffing changes, including a headcount reduction of 628 employees, primarily in our North American segment. We took further actions in the first quarter of 2024. Further, in the fourth quarter of 2024, we took actions to enhance organizational efficiency and strengthen customer service capabilities to better position us for long-term, sustainable growth, which included organizational and staffing changes as well as headcount reductions of 1,056 employees, inclusive of the actions taken in the first quarter of 2024. We anticipate additional charges in the range of $ 4 million and $ 7 million in the first quarter of 2025 in connection with the continuance of this restructuring plan. A summary of the restructuring costs incurred in Fiscal Year 2024 and Fiscal Year 2023, are as follows: Restructuring Costs Headcount Reduction (Number of Employees) Employee Termination Benefits Facility and Other Costs Total Restructuring Costs Fiscal Year 2024 North America $ 15,004 $ 231 $ 15,235 EMEA 15,762 1 15,763 Asia-Pacific 7,029 — 7,029 Latin America 268 59 327 Total 1,056 $ 38,063 $ 291 $ 38,354 Restructuring Costs Headcount Reduction (Number of Employees) Employee Termination Benefits Facility and Other Costs Total Restructuring Costs Fiscal Year 2023 North America $ 12,050 $ 3,401 $ 15,451 EMEA 1,878 18 1,896 Asia-Pacific 1,341 — 1,341 Latin America 109 — 109 Total 628 $ 15,378 $ 3,419 $ 18,797 The remaining liabilities, which are recorded within accrued expenses and other on our Consolidated Balance Sheets, and activities associated with the aforementioned actions for Fiscal Year 2024 are summarized in the tables below: Restructuring Liability Beginning Liability Expenses, Net Amounts Paid and Charged Against the Liability Foreign Currency Translation Remaining Liability as of December 28, 2024 Fiscal Year 2024 Employee termination benefits $ 2,060 $ 38,063 $ ( 27,678 ) $ ( 259 ) $ 12,186 Facility and other costs — 291 ( 291 ) — — Total $ 2,060 $ 38,354 $ ( 27,969 ) $ ( 259 ) $ 12,186 97 INGRAM MICRO HOLDING CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Amounts in thousands, except share, unit and per share data) Restructuring Liability Beginning Liability Expenses, Net Amounts Paid and Charged Against the Liability Foreign Currency Translation Remaining Liability as of December 30, 2023 Fiscal Year 2023 Employee termination benefits $ 1,144 $ 15,378 $ ( 14,549 ) $ 87 $ 2,060 Facility and other costs 10 3,419 ( 3,429 ) — — Total $ 1,154 $ 18,797 $ ( 17,978 ) $ 87 $ 2,060 The remaining liability of $ 12,186 will be substantially paid by the first half of 2025. Note 9 — Commitments and Contingencies As a company with a substantial employee population and with operations in a large number of countries, Ingram Micro is involved, either as a plaintiff or defendant, in a variety of ongoing claims, demands, suits, investigations, tax matters and proceedings that arise from time to time in the ordinary course of its business. The Company records a provision with respect to a claim, suit, investigation, or proceeding when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. If there is at least a reasonable possibility that a material loss may have been incurred associated with pending legal claims, or when assertion of unasserted material claims is considered probable, we disclose such fact, and if reasonably estimable, we provide an estimate of the possible loss or range of possible loss. We record our best estimate of a loss related to pending legal and regulatory proceedings when the loss is considered probable and the amount can be reasonably estimated. Where a range of loss can be reasonably estimated with no best estimate in the range, we record the minimum estimated liability. As additional information becomes available, we assess the potential liability related to pending legal and regulatory proceedings and revise our estimates and update our disclosures accordingly. Significant judgment is required in both the determination of probability and the determination as to whether a loss is reasonably estimable. Our legal costs associated with legal matters are recorded to expense as incurred. The Company reviews claims, suits, investigations and proceedings at least quarterly, and decisions are made with respect to recording or adjusting provisions and disclosing reasonably possible losses or range of losses (individually or in the aggregate). Whether any losses, damages, or remedies finally determined in any claim, suit, investigation or proceeding could reasonably have a material effect on the Company’s business, financial condition, results of operations or cash flows will depend on a number of variables, including: the timing and amount of such losses or damages; the structure and type of any such remedies; the significance of the impact of such losses, damages or remedies may have in the consolidated financial statements; and the unique facts and circumstances of the particular matter that may give rise to additional factors. Our Brazilian subsidiary has received a number of tax assessments primarily related to tax reporting compliance topics as well as transaction-tax related matters largely involving applicability of tax and categorization of products and services. The total amount related to these assessments and similar tax exposures that are not yet assessed that give rise to a probable risk where a reserve has been established is Brazilian Reais 21,711 ($ 3,502 at December 28, 2024 exchange rates) in principal and associated penalties, interest and fines. The total amount related to these assessments and similar tax exposures that are not yet assessed that we believe give rise to a reasonably possible loss is Brazilian Reais 843,008 ($ 135,986 at December 28, 2024 exchange rates) in principal and associated penalties, interest and fines. 98 INGRAM MICRO HOLDING CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Amounts in thousands, except share, unit and per share data) In June 2013, the French Competition Authority (“FCA”) launched an investigation of our subsidiary in France (“Ingram Micro France”), one of our competitors and one of our vendors in relation to alleged anticompetitive practices. In October 2018, the investigation services of the FCA filed a Statement of Objections against Ingram Micro France, as primary infringer, and Ingram Micro Europe BVBA and Ingram Micro, as parent companies (“Ingram”). In March 2020, the Board of the FCA issued its decision imposing a fine of € 62,900 on Ingram regarding volume allocations of Apple products. In July 2020, we appealed the decision of the Board of the FCA to the Paris Court of Appeals. On October 6, 2022, the Paris Court of Appeals issued a decision maintaining the infraction of volume allocation and reducing the fine to € 19,500 . In November 2022 the Company further appealed this matter to the “Cour de Cassation.” As the appeal to the “Cour de Cassation” did not suspend the obligation to pay the fine, in the third quarter of 2022, we recorded a contingent liability at that time within our Condensed Consolidated Balance Sheets. Under the payment plan agreed with the French Treasury, Ingram Micro France had already paid approximately $ 11,000 . On November 4, 2022, Ingram Micro France made an additional payment of approximately $ 9,000 to complete the total amount of the fine and the French Treasury released the third-party surety bond. As a result of the appeals court ruling, the Company determined that the best estimate of probable loss related to this matter is limited to the amounts already paid to date. On June 3, 2021, the reseller whose complaint to the FCA gave rise to the investigation filed a follow-on civil claim in the Paris Commercial Court seeking approximately € 95,000 ($ 99,000 at December 28, 2024 exchange rates) in damages from Ingram, one of our competitors and one of our vendors. On May 30, 2022, the Paris Commercial Court postponed the hearing on this reseller claim pending resolution of the appeal on the main case. On October 24, 2022, the reseller requested the re-opening of the proceedings and we petitioned the Paris Commercial Court to stay the proceedings until the main case is decided by the “Cour de Cassation.” On May 15, 2023, the Paris Commercial Court did not accept the request to suspend the case and set a calendar for a final hearing, which took place in June 2024. On November 25, 2024, the Paris Commercial Court issued a decision rejecting the follow-on damages claim in its entirety due to lack of causation, and the plaintiff appealed the decision on December 23, 2024. We are currently evaluating this matter and we do not believe any loss amount is estimable or probable at this time. In January 2021, we first learned through external sources that in June 2019, the Court of Additional Chief Metropolitan Magistrate (Special Acts), Central District, Tis Hazari in New Delhi (the “New Delhi Court”) issued a summoning order naming Ingram Micro India Ltd. (“IMIL”) as one of 40 legal entity defendants in a criminal complaint. IMIL is accused by the Serious Fraud Office of cheating and criminal conspiracy based on four payments it made over 16 years ago at the request of a certain vendor. In February 2021, outside legal counsel appeared on IMIL’s behalf at the New Delhi Court and requested relevant documentation pertaining to these charges to assess IMIL’s legal position. IMIL has vigorously contested the charges as we believe the charges to be meritless and in December 2021 filed a motion to dismiss. In September 2021, the Company’s subsidiary in Saudi Arabia received a tax assessment for Saudi Riyal 238,152 ($ 63,420 at December 28, 2024 exchange rates) in tax and associated penalties issued by ZATCA (tax and customs authority) asserting that withholding tax was due on payments to non-resident vendors for software distributed to resellers from 2015 through 2020. We believe the tax assessment gives rise to a reasonably possible loss of Saudi Riyal 159,985 ($ 42,604 at December 28, 2024 exchange rates) in tax and a probable risk of Saudi Riyal 5,466 ($ 1,456 at December 28, 2024 exchange rates) in tax. In addition, we believe it is possible the tax authorities will assess us for payments to non-resident vendors for software distributed to resellers for the years 2021 through 2024, which gives rise to a reasonably possible loss of Saudi Riyal 395,505 ($ 105,323 at December 28, 2024 exchange rates) in tax and a probable risk of Saudi Riyal 1,632 ($ 435 at December 28, 2024 exchange rates) in tax. Associated penalties have a remote risk due to the assessments being based on a difference in interpretation of Saudi tax law. In February 2024 and early April 2024, ZATCA issued new guidelines on taxation of payments for software, which largely appear to no longer assert that withholding tax is due on payments to non-resident vendors for software distributed to resellers. While we continue to analyze the guidelines it is unclear how ZATCA will utilize the guidelines with respect to the pre-guidelines periods since they are only applicable on a prospective basis; however, we believe there has been positive development as the new guidelines appear to be largely consistent with the interpretation before the assessments were made. In May 2024, at our request, the court granted a third 6-month suspension of the case. In September 2024, we submitted a resolution proposal for the years 2015 through 2020 for Saudi Riyal 5,466 ($ 1,456 at December 28, 2024 exchange rates), which is in alignment with the probable risk listed above. The proposal creates an indefinite suspension of the case for the duration of the resolution procedure. We strongly believe that we have administered taxes correctly, that these payments to non-resident vendors for software distributed to resellers are not subject to withholding tax and that we will ultimately prevail in this matter. Related to the matter discussed in section "Out of Period Correction" within Note 2, "Significant Accounting Policies", we have made voluntary disclosure to the Indian tax authorities, which we and our local advisors believe has mitigated the risk of any potential income tax penalties. 99 INGRAM MICRO HOLDING CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Amounts in thousands, except share, unit and per share data) We may be subject to non-income based tax unasserted claims related to transactions with certain non-U.S. affiliates and indirect tax related matters. As of December 28, 2024, the Company is unable to reasonably estimate the possible losses or range of losses, if any, arising from unasserted claims due to a number of factors, including the presence of complex or novel legal theories and the ongoing discovery and development of information important to potential unasserted claims. Claims, suits, investigations and proceedings are inherently uncertain, and it is not possible to predict the ultimate outcome of unasserted claims. It is possible that the Company’s business, financial condition, results of operations or cash flows could be materially affected in any particular period by the resolution of potential claims. As is customary in the IT distribution industry, we have arrangements with certain finance companies that provide inventory-financing facilities for our customers. In conjunction with certain of these arrangements, we have agreements with the finance companies that would require us to repurchase certain inventory that might be repossessed from the customers by the finance companies. Due to various reasons, including among other items, the lack of information regarding the amount of salable inventory purchased from us that is still on hand with the customer at any point in time, repurchase obligations relating to inventory cannot be reasonably estimated. Repurchases of inventory by us under these arrangements have been insignificant to date. We have guarantees to third parties that provide financing to a limited number of our customers. Net sales under these arrangements accounted for less than one percent of our consolidated net sales for each of the periods presented. The guarantees require us to reimburse the third party for defaults by these customers up to an aggregate of $ 6,591 . The fair value of these guarantees has been recognized as cost of sales on the Consolidated Statements of Income to these customers and is included in accrued expenses and other on the Consolidated Balance Sheets. Note 10 — Employee Awards Cash-based Compensation Activity related to the cash awards was as follows: Number of Cash Awards (in thousands) Non-vested at January 1, 2021 93,325 Granted 45,501 Vested ( 45,870 ) Forfeited ( 16,234 ) Non-vested at December 31, 2022 76,722 Granted 44,885 Vested ( 46,690 ) Forfeited ( 7,319 ) Non-vested at December 30, 2023 67,598 Granted 35,186 Vested ( 22,909 ) Forfeited ( 7,229 ) Non-vested at December 28, 2024 72,646 Fiscal Year Fiscal Year Fiscal Year 2024 2023 2022 Compensation expense - cash awards $ 24,626 $ 31,040 $ 35,418 Related income tax benefit $ 6,156 $ 7,760 $ 8,854 As of December 28, 2024, the unrecognized compensation costs related to the cash awards was $ 34,736 . We expect this cost to be recognized over a remaining weighted-average period of approximately 1.3 years. 100 INGRAM MICRO HOLDING CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Amounts in thousands, except share, unit and per share data) Stock-based Compensation Activity related to the time vesting restricted stock units granted under the 2024 Plan was as follows: Number of Awards (in thousands) Weighted-Average Grant Date Fair Value Non-vested at December 30, 2023 — $ — Granted 2,608 22.01 Vested ( 1,474 ) 22.00 Non-vested at December 28, 2024 1,134 $ 22.01 Fiscal Year 2024 Compensation expense $ 34,067 Related income tax benefit $ 3,731 We account for forfeitures as they occur. During Fiscal Year 2024, there were no forfeitures of awards granted under the 2024 plan. As of December 28, 2024, the unrecognized compensation costs related to the time vesting restricted stock units was $ 23,319 . We expect this cost to be recognized over a remaining weighted-average period of approximately 1.9 years. Activity related to the performance vesting restricted stock units granted under the 2024 Plan was as follows: Number of Awards (in thousands) Weighted-Average Grant Date Fair Value Non-vested at December 30, 2023 — $ — Granted 2,468 17.42 Non-vested at December 28, 2024 2,468 $ 17.42 We have not recognized any compensation costs related to the performance vesting restricted stock units as the performance condition depends on the occurrence of a qualifying event, which is not deemed probable until it occurs (see section “Stock-based Compensation” within Note 2, “Significant Accounting Policies”). We account for forfeitures as they occur. During Fiscal Year 2024, there were no forfeitures of time vesting or performance vesting restricted stock units granted under the 2024 plan. 101 INGRAM MICRO HOLDING CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Amounts in thousands, except share, unit and per share data) Participation Plan for Certain Key Employees Activity related to the awards granted in the Participation Plan was as follows: Number of Units (in thousands) Non-vested at January 1, 2021 216,875 Granted 11,039 Forfeited ( 36,200 ) Non-vested at December 31, 2022 191,714 Granted 4,306 Forfeited ( 1,420 ) Non-vested at December 30, 2023 194,600 Granted 14,580 Forfeited ( 209,180 ) Non-vested at December 28, 2024 — As a result of the IPO, the Plan was cancelled in the fourth quarter of 2024. There was no compensation cost recognized for these awards during any periods presented. Note 11 — Segment Information ASC 280, Segment Reporting, establishes standards for reporting information about operating segments. Operating segments are defined as components of an enterprise about which separate financial information is evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and in assessing performance. Our CODM is our Chief Executive Officer. Our reportable segments coincide with the geographic operating segments which include North America, EMEA, Asia-Pacific, and Latin America. The measure of segment profit is income from operations. Our CODM utilizes income from operations to analyze and compare year-over-year and budget-to-actual segment-level operational performance and profitability before non-operational items, ensure optimal alignment with our strategic priorities and make strategic decisions concerning resource allocation across our operating segments. Geographic areas in which we operated our reportable segments during 2024 include North America (the United States and Canada), EMEA (Austria, Belgium, Bosnia and Herzegovina, Bulgaria, Croatia, Czech Republic, Denmark, Egypt, Finland, France, Germany, Hungary, Ireland, Israel, Italy, Kosovo, Lebanon, Luxembourg, Macedonia, Morocco, Netherlands, Norway, Oman, Pakistan, Poland, Portugal, Qatar, Romania, Saudi Arabia, Serbia, Slovenia, Spain, Sweden, Switzerland, Turkey, United Arab Emirates and the United Kingdom), Asia-Pacific (Australia, Bangladesh, the People’s Republic of China including Hong Kong, India, Indonesia, Malaysia, New Zealand, Philippines, Singapore, Sri Lanka, and Thailand), and Latin America (Brazil, Chile, Colombia, Costa Rica, Mexico, Peru, Uruguay and our Latin American export operations in Miami). We do not allocate stock-based compensation expense or time-vested and performance-vested cash-based compensation recognized to our reportable segments (see Note 10, “Employee Awards”), certain Corporate costs, and the gain from the CLS Sale; therefore, we are reporting these amounts separately. Assets by reportable segment are not presented below as our CODM does not review assets by reportable segment. Financial information by reportable segment is as follows: 102 INGRAM MICRO HOLDING CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Amounts in thousands, except share, unit and per share data) Fiscal Year Fiscal Year Fiscal Year 2024 2023 2022 Net sales North America $ 17,373,047 $ 18,195,652 $ 20,908,493 EMEA 14,260,257 14,481,069 15,052,242 Asia-Pacific 12,756,802 11,573,489 11,184,575 Latin America 3,593,565 3,790,154 3,679,180 Total $ 47,983,671 $ 48,040,364 $ 50,824,490 Significant segment expenses Cost of sales North America $ 15,973,155 $ 16,712,010 $ 19,231,758 EMEA 13,183,955 13,367,664 13,942,955 Asia-Pacific 12,132,315 10,950,647 10,585,158 Latin America 3,249,301 3,462,906 3,371,227 Total $ 44,538,726 $ 44,493,227 $ 47,131,098 Compensation North America $ 840,696 $ 865,403 $ 972,994 EMEA 504,847 503,676 594,098 Asia-Pacific 204,894 209,448 219,963 Latin America 129,799 121,672 113,850 Total $ 1,680,236 $ 1,700,199 $ 1,900,905 Depreciation costs North America $ 74,939 $ 66,153 $ 72,991 EMEA 15,249 17,056 18,016 Asia-Pacific 6,648 7,834 8,669 Latin America 5,617 6,102 6,396 Total $ 102,453 $ 97,145 $ 106,072 Intangible asset amortization North America $ 42,148 $ 42,175 $ 42,253 EMEA 23,958 23,782 25,126 Asia-Pacific 17,441 17,594 20,308 Latin America 3,331 3,452 3,352 Total $ 86,878 $ 87,003 $ 91,039 Other departmental operating expenses (a) North America $ 193,057 $ 223,792 $ 249,633 EMEA 170,552 158,026 52,699 Asia-Pacific 91,503 73,192 58,233 Latin America 55,044 51,320 40,844 Total $ 510,156 $ 506,330 $ 401,409 Integration and transition costs (b) North America $ 5,659 $ 15,745 $ ( 2,334 ) EMEA 2,839 ( 31 ) 16,497 Asia-Pacific 1,656 ( 8 ) 6,864 Latin America ( 1,644 ) 4,388 2,428 Total $ 8,510 $ 20,094 $ 23,455 103 INGRAM MICRO HOLDING CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Amounts in thousands, except share, unit and per share data) Fiscal Year Fiscal Year Fiscal Year 2024 2023 2022 Other segment items (c) North America $ ( 78,766 ) $ ( 80,476 ) $ ( 72,930 ) EMEA 99,437 93,697 88,028 Asia-Pacific 78,896 67,639 54,886 Latin America 32,533 46,799 27,610 Total $ 132,100 $ 127,659 $ 97,594 Total segment expenses $ 47,059,059 $ 47,031,657 $ 49,751,572 Income from operations North America $ 322,159 $ 350,850 $ 414,128 EMEA 259,420 317,199 314,823 Asia-Pacific 223,449 247,143 230,494 Latin America 119,584 93,515 113,473 Segment profit $ 924,612 $ 1,008,707 $ 1,072,918 Reconciliation of segment profit to income before income taxes Gain on CLS Sale $ — $ — $ 2,283,820 Corporate ( 47,996 ) ( 33,320 ) ( 72,390 ) Cash-based compensation ( 24,626 ) ( 31,040 ) ( 35,418 ) Stock-based compensation ( 34,067 ) — — Other (income) expense Interest income $ ( 45,335 ) $ ( 34,977 ) $ ( 22,911 ) Interest expense 338,358 380,191 320,230 Net foreign currency exchange loss 22,901 42,070 69,597 Other expense 56,133 34,562 67,473 Income before income taxes $ 445,866 $ 522,501 $ 2,814,541 (a) Other Departmental Operating Expenses consist primarily of professional and outside service costs, lease rental and occupancy costs, repair and maintenance costs as well as other miscellaneous operating expenses. (b) Costs are primarily related to (i) professional, consulting and integration costs associated with our acquisitions, (ii) consulting, retention and transition costs associated with our reorganization programs charged to selling, general and administrative, or SG&A, expenses. (c) Other segment items consist primarily of management fees and direct management costs which represent costs that are incurred by the North American segment and allocated to the other segments, as well as bad debt/credit/flooring costs, credit card fees and restructuring costs. 104 INGRAM MICRO HOLDING CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Amounts in thousands, except share, unit and per share data) Net sales are attributed to countries based on the location of the originating entity’s registered domicile. Except for the United States, which is our country of domicile, and India, no other country accounted for 10% or more of net sales for the periods presented. Fiscal Year Fiscal Year Fiscal Year 2024 2023 2022 Net sales: United States $ 16,369,823 34 % $ 17,300,808 36 % $ 19,464,781 38 % India 4,903,734 10 4,571,294 10 4,311,474 8 Outside of the United States and India 26,710,114 56 26,168,262 54 27,048,235 54 Total $ 47,983,671 100 % $ 48,040,364 100 % $ 50,824,490 100 % Except for the United States, no other country accounted for 10% or more of long-lived assets for the periods presented. December 28, 2024 December 30, 2023 December 28, 2024 December 30, 2023 Long-lived assets: United States $ 869,921 $ 858,364 52 % 49 % Outside of the United States 797,815 905,387 48 51 Total (1) $ 1,667,736 $ 1,763,751 100 % 100 % (1) Includes $ 772,571 and $ 880,433 of intangible assets, net of which $ 325,444 and $ 362,572 are located within the United States as of December 28, 2024 and December 30, 2023, respectively. The following table summarizes additional entity-wide disclosure of net sales by product category for the following periods: Fiscal Year Fiscal Year Fiscal Year 2024 2023 2022 Net sales: Client and Endpoint Solutions $ 29,974,140 63 % $ 29,149,776 61 % $ 31,994,972 63 % Advanced Solutions 16,859,551 35 17,883,252 37 17,353,836 34 Cloud-based Solutions 462,127 1 383,329 1 325,981 1 Other (1) 687,853 1 624,007 1 1,149,701 2 Total $ 47,983,671 100 % $ 48,040,364 100 % $ 50,824,490 100 % (1) Other net sales consists mainly of revenues associated with our Commerce & Lifecycle Services business, the majority of which was disposed of and sold effective April 4, 2022. Note 12 — Derivative Financial Instruments We use foreign currency forward contracts primarily to manage currency risk associated with foreign currency-denominated trade accounts receivable, accounts payable and intercompany loans. At December 28, 2024 and December 30, 2023, we had no derivatives that were designated as hedging instruments. 105 INGRAM MICRO HOLDING CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Amounts in thousands, except share, unit and per share data) In the first quarter of 2023, we entered into agreements to purchase interest rate caps, which established a 5.5 % upper limit on the LIBOR interest rate applicable to a substantial portion of the borrowings under the Term Loan Credit Facility through the first quarter of 2025. These interest rate cap agreements qualify for hedge accounting treatment and, accordingly, we recorded the fair value of the agreements as an asset and the change in fair value within accumulated other comprehensive loss during the period in which the change occurs. Due to the cessation of the LIBOR interest rate on June 30, 2023, we amended the interest rate cap agreements during the second quarter of 2023 to establish a 5.317 % upper limit on the SOFR interest rate in order to align with the conversion to a SOFR-based rate for the underlying Term Loan Credit Facility. We elected to apply the practical expedient under ASU 2020-04 and continued to apply hedge accounting treatment until September 2023, when we dedesignated the interest rate cap in connection with the refinancing of our Term Loan Credit Facility (See Note 6, “Debt”), the impact of which was immaterial. The notional amounts and fair values of derivative instruments in our Consolidated Balance Sheets are as follows: Notional Amounts (1) Fair Value December 28, 2024 December 30, 2023 December 28, 2024 December 30, 2023 Derivatives not receiving hedge accounting treatment recorded in: Other current assets: Foreign exchange contracts $ 472,324 $ 515,691 $ 12,510 $ 1,805 Interest rate cap 1,375,000 1,099,807 — 707 Other (2) 1,265 1,265 9,616 8,758 Other assets: Interest rate cap — 275,193 — 177 Accrued expenses and other: Foreign exchange contracts 189,044 1,162,669 ( 780 ) ( 11,416 ) Total $ 2,037,633 $ 3,054,625 $ 21,346 $ 31 (1) Notional amounts represent the gross amount of foreign currency bought or sold at maturity for foreign exchange contracts. (2) Related to a convertible note receivable derivative. The amount recognized in earnings from our derivative instruments not receiving hedge accounting treatment, including ineffectiveness, is recorded in net foreign currency exchange (gain) loss as follows and is largely offset by the change in fair value of the underlying hedged assets or liabilities: Fiscal Year Fiscal Year Fiscal Year Location of (gain) loss in income 2024 2023 2022 Derivative instruments not qualifying as cash flow hedges: Net loss (gain) recognized in earnings Net foreign currency exchange loss $ 2,884 $ 43,096 $ 30,310 Interest expense 884 5,211 — Derivative instruments qualifying as hedging instruments: Gain recognized in accumulated other comprehensive income $ — $ ( 1,188 ) $ — Gain reclassified from accumulated other comprehensive income to interest expense Interest expense ( 686 ) ( 349 ) — 106 INGRAM MICRO HOLDING CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Amounts in thousands, except share, unit and per share data) There were no material gain or loss amounts excluded from the assessment of effectiveness. We report our derivatives at fair value as either assets or liabilities within our Consolidated Balance Sheets. See Note 13, “Fair Value Measurements”, for information on derivative fair values recorded on our Consolidated Balance Sheets for the periods presented. Note 13 — Fair Value Measurements Our assets and liabilities carried at fair value are classified and disclosed in one of the following three categories: Level 1 — quoted market prices in active markets for identical assets and liabilities; Level 2 — observable market-based inputs or unobservable inputs that are corroborated by market data; and Level 3 — unobservable inputs that are not corroborated by market data. As of December 28, 2024, our assets and liabilities measured at fair value on a recurring basis are categorized in the table below: December 28, 2024 Total Level 1 Level 2 Level 3 Assets: Derivative assets $ 22,126 $ — $ 22,126 $ — Investments held in Rabbi Trust 93,770 93,770 — — Total assets at fair value $ 115,896 $ 93,770 $ 22,126 $ — Liabilities: Derivative liabilities $ 780 $ — $ 780 $ — Contingent consideration 2,888 — — 2,888 Total liabilities at fair value $ 3,668 $ — $ 780 $ 2,888 As of December 30, 2023, our assets and liabilities measured at fair value on a recurring basis are categorized in the table below: December 30, 2023 Total Level 1 Level 2 Level 3 Assets: Derivative assets $ 10,563 $ — $ 10,563 $ — Interest rate cap 884 — 884 — Investments held in Rabbi Trust 82,498 82,498 — — Total assets at fair value $ 93,945 $ 82,498 $ 11,447 $ — Liabilities: Derivative liabilities $ 11,416 $ — $ 11,416 $ — Contingent consideration 4,391 — — 4,391 Total liabilities at fair value $ 15,807 $ — $ 11,416 $ 4,391 The fair value of the cash equivalents approximated its carrying value and the gain or loss on the marketable trading securities was recognized in the Consolidated Statements of Income to reflect these investments at fair value. 107 INGRAM MICRO HOLDING CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Amounts in thousands, except share, unit and per share data) Our senior secured notes due in 2029 and Term Loan Credit Facility are stated at amortized cost, and their respective fair values were determined based on Level 2 criteria. The fair values and carrying values of these notes are shown in the tables below: December 28, 2024 Fair Value Total Level 1 Level 2 Level 3 Carrying Value Senior secured notes, 4.75 % due 2029 $ 1,885,000 $ — $ 1,885,000 $ — $ 1,969,768 Term loan credit facility 931,535 — 931,535 — 885,882 $ 2,816,535 $ — $ 2,816,535 $ — $ 2,855,650 December 30, 2023 Fair Value Total Level 1 Level 2 Level 3 Carrying Value Senior secured notes, 4.75 % due 2029 $ 1,875,000 $ — $ 1,875,000 $ — $ 1,962,750 Term loan credit facility 1,402,950 — 1,402,950 — 1,362,487 $ 3,277,950 $ — $ 3,277,950 $ — $ 3,325,237 The carrying amounts of our trade accounts receivable, accounts payable and accrued expenses and other approximate fair value because of the short maturity of these items. Our ABL Revolving Credit Facility and European revolving trade accounts receivable-backed financing program bear interest at variable rates based on designated local reference rates and commercial paper rates, respectively, plus a predetermined fixed margin. The interest rates of our revolving unsecured credit facilities and other debt are dependent upon the local short-term bank indicator rate for a particular currency, which also resets regularly. The carrying amounts of all these facilities approximate their fair value because of the revolving nature of the borrowings and because the all-in rate (consisting of variable rates and fixed margin) adjusts regularly to reflect current market rates with appropriate consideration for our credit profile. Note 14 — Employee Benefit Plans Our U.S.-based employee savings benefit plans permit eligible employees to make contributions up to certain limits, which are matched by us at stipulated percentages. Our contributions charged to expense were $ 11,235 , $ 11,589 , and $ 12,901 in Fiscal Year 2024, Fiscal Year 2023, and Fiscal Year 2022, respectively. Deferred Compensation Plan We have a non-qualified deferred compensation plan (“NQDC”) that provides certain key officers and employees the ability to defer a portion of their compensation until a later date. The assets are held in a “Rabbi Trust” which invests in various mutual funds as directed by the plan participants. The Rabbi Trust is intended to be used as a source of funds to match respective funding obligations to participants. The assets of the trust are subject to the claims of our creditors in the event that we become insolvent. The assets and liabilities of the plan are recorded within other assets and other liabilities, respectively, in the Consolidated Balance Sheets. Changes in the deferred compensation balance are recorded to compensation expense and reflected within SG&A expenses of our Consolidated Statements of Income. Changes in the fair value of assets of the plan are recorded within other expense in our Consolidated Statements of Income. For amounts currently held on the Consolidated Balance Sheets, see Note 13, “Fair Value Measurements”. Self-Insurance We self-insure coverage for certain U.S. employee medical claims. Amounts accrued for such medical insurance coverage aggre gates to $ 6,922 and $ 7,051 as of December 28, 2024 and December 30, 2023, respectively, and are classified within accrued expenses and other on the Consolidated Balance Sheet. 108 INGRAM MICRO HOLDING CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Amounts in thousands, except share, unit and per share data) Note 15 — Stockholders’ Equity Following our IPO and stock conversion and stock split, our certificate of incorporation authorizes us to issue 2,000,000,000 shares of Common Stock, of which 234,825,581 were issued and outstanding as of December 28, 2024. Dividends Paid to Minority Interest Stockholders In Fiscal Year 2024, we paid $ 6,174 to the Aptec Saudi minority interest stockholders of record. In Fiscal Year 2023, we paid $ 9,909 to the Aptec Saudi minority interest stockholders of record, as well as $ 553 to the Aptec Turkey minority interest stockholders of record. Note 16 — Related Party Transactions In connection with the Imola Mergers, we entered into a Corporate Advisory Services Agreement (the “CASA”) with Platinum Equity Advisors, LLC (“Platinum Advisors”), an entity affiliated with Platinum, pursuant to which Platinum Advisors provides corporate and advisory services to us. Prior to the IPO, we incurred an annual fee of $ 25,000 , plus expenses incurred by Platinum Advisors in rendering such services. For Fiscal Year 2024, Fiscal Year 2023, and Fiscal Year 2022, we incurred fees and expenses of $ 20,679 , $ 26,927 , and $51,767, respectively, under the CASA. These amounts have been included within SG&A expenses within the Consolidated Statements of Income. Upon completion of the IPO, the CASA was terminated. Note 17 — Quarterly Information (Unaudited) In the second quarter of 2024, we identified fraudulent activity within our India Professional Services business involving certain of our then-current employees (which employees were subsequently terminated or resigned) and a relatively small number of customers of our subsidiary in India dating back to 2023. As part of these activities and the collusion of these former employees and customers, our India Professional Services business hired providers and paid for professional services that were never performed and recognized revenue for the sale of professional services that were never provided by our customers to the end users. As a result, our net sales and cost of sales, selling, general and administrative expenses, and provision for income taxes were misstated on our Condensed Consolidated Statements of Income, and our accounts receivable, inventory, other assets, accounts payable, and accrued expenses and other were misstated on our Condensed Consolidated Balance Sheets. We are working to recover amounts paid to such customers and we intend to vigorously pursue all legal remedies available to us. We will record a benefit when and if any such amounts are deemed probable of recovery. Management has determined that these misstatements were not material to the previously issued consolidated financial statements as of and for the Thirteen Weeks Ended March 30, 2024. However, in order to appropriately reflect the impacts of the identified misstatements in the appropriate period, management has determined to revise the financial statements as of and for the Thirteen Weeks Ended March 30, 2024 the next time such financial statements are filed. All misstatements related to the India Professional Services business are identified as (1) in the tables below. Additionally, other identified immaterial errors that have been corrected and revised are footnoted with a (2) in the tables below. The following tables present a summary of the impact of the corrections by financial statement line item: 109 INGRAM MICRO HOLDING CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Amounts in thousands, except share, unit and per share data) March 30, 2024 As Reported Adjustment As Revised Condensed Consolidated Balance Sheet: Trade accounts receivable (1) (2) $ 8,297,613 $ ( 15,301 ) $ 8,282,312 ( 18,896 ) (1) 3,595 (2) Inventory (1) 4,679,975 ( 3,382 ) 4,676,593 Other current assets (1) 735,795 404 736,199 Total current assets 14,570,960 ( 18,279 ) 14,552,681 Other assets (1) 483,334 4,076 487,410 Total assets $ 17,651,495 $ ( 14,203 ) $ 17,637,292 Accounts payable (1) $ 8,518,159 $ ( 2,504 ) $ 8,515,655 Accrued expenses and other (1) 1,009,487 ( 3,582 ) 1,005,905 Short-term debt and current maturities of long-term debt (2) 351,591 3,595 355,186 Total current liabilities 9,984,654 ( 2,491 ) 9,982,163 Total liabilities 14,618,012 ( 2,491 ) 14,615,521 Retained earnings (1) 1,141,040 ( 11,712 ) 1,129,328 Total stockholder's equity 3,483,483 ( 11,712 ) 3,471,771 Total liabilities and stockholders' equity $ 17,651,495 $ ( 14,203 ) $ 17,637,292 Thirteen Weeks Ended March 30, 2024 As Reported Adjustment As Revised Condensed Consolidated Statement of Income Net sales (1) $ 11,345,520 $ ( 10,586 ) $ 11,334,934 Cost of sales (1) 10,506,173 ( 6,177 ) 10,499,996 Gross profit 839,347 ( 4,409 ) 834,938 Selling, general and administrative expenses (1) 640,175 1,977 642,152 Total operating expenses 662,840 1,977 664,817 Income from operations 176,507 ( 6,386 ) 170,121 Income before income taxes 83,067 ( 6,386 ) 76,681 Provision for income taxes (1) 29,140 ( 2,011 ) 27,129 Net income $ 53,927 $ ( 4,375 ) $ 49,552 Basic and diluted earnings per share (3) $ 0.24 $ ( 0.02 ) $ 0.22 (3) Basic and diluted earnings per share reflects the stock conversion and stock split in connection with the IPO (see section “Stock Conversion and Stock Split” within Note 2, “Significant Accounting Policies”) . Thirteen Weeks Ended March 30, 2024 As Reported Adjustment As Revised Condensed Consolidated Statement of Comprehensive Income Net income (1) $ 53,927 $ ( 4,375 ) $ 49,552 Comprehensive income $ ( 30,143 ) $ ( 4,375 ) $ ( 34,518 ) 110 INGRAM MICRO HOLDING CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Amounts in thousands, except share, unit and per share data) Thirteen Weeks Ended March 30, 2024 As Reported Adjustment As Revised As Reported Adjustment As Revised Retained Earnings Total Condensed Consolidated Statement of Stockholders ’ Equity: Balance at December 30, 2023 (1) $ 1,087,113 $ ( 7,337 ) $ 1,079,776 $ 3,513,626 $ ( 7,337 ) $ 3,506,289 Net income (1) 53,927 ( 4,375 ) 49,552 53,927 ( 4,375 ) 49,552 Balance at March 30, 2024 $ 1,141,040 $ ( 11,712 ) $ 1,129,328 $ 3,483,483 $ ( 11,712 ) $ 3,471,771 Thirteen Weeks Ended March 30, 2024 As Reported Adjustment As Revised Condensed Consolidated Statement of Cash Flow Cash flows used in operating activities: Net income (1) $ 53,927 $ ( 4,375 ) $ 49,552 Changes in operating assets and liabilities, net of effects of acquisitions: Trade accounts receivable (1) (2) 536,150 7,144 543,294 7,159 (1) ( 15 ) (2) Inventory (1) ( 78,254 ) 2,876 ( 75,378 ) Other assets (1) ( 4,588 ) ( 2,011 ) ( 6,599 ) Accounts payable (1) ( 577,588 ) ( 2,258 ) ( 579,846 ) Accrued expenses and other (1) ( 25,433 ) ( 1,391 ) ( 26,824 ) Cash used in operating activities $ ( 100,251 ) $ ( 15 ) $ ( 100,266 ) Cash flows from financing activities: Net proceeds from revolving and other credit facilities (2) 22,475 15 22,490 Cash provided by financing activities $ 3,501 $ 15 $ 3,516 The following selected quarterly financial data is being provided in consideration of our 8367.19365 -for- 1 stock split as a result of our IPO as described in the “Initial Public Offering” section presented within Note 2, “Significant Accounting Policies”: Fiscal Year 2024 Thirteen Weeks Ended March 30, 2024 Thirteen Weeks Ended June 29, 2024 Thirteen Weeks Ended September 28, 2024 Thirteen Weeks Ended December 28, 2024 Net sales $ 11,334,934 $ 11,541,439 $ 11,762,628 $ 13,344,670 Income from operations $ 170,121 $ 181,128 $ 218,174 $ 248,500 Net income $ 49,552 $ 54,585 $ 76,969 $ 83,116 Basic and diluted earnings per share $ 0.22 $ 0.25 $ 0.35 $ 0.36 Fiscal Year 2023 Thirteen Weeks Ended April 1, 2023 Thirteen Weeks Ended July 1, 2023 Thirteen Weeks Ended September 30, 2023 Thirteen Weeks Ended December 30, 2023 Net sales $ 11,569,161 $ 11,526,329 $ 11,925,373 $ 13,019,501 Income from operations $ 194,150 $ 206,860 $ 212,402 $ 330,935 Net income $ 62,551 $ 66,854 $ 86,783 $ 136,524 Basic and diluted earnings per share $ 0.28 $ 0.30 $ 0.39 $ 0.61 111 INGRAM MICRO HOLDING CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Amounts in thousands, except share, unit and per share data) Note 18 — Subsequent Events On March 4, 2025, the Company announced that its board of directors had declared a cash dividend on the Company’s common stock of $ 0.074 per share, payable on March 25, 2025, to stockholders of record as of March 11, 2025. 112 INGRAM MICRO HOLDING CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Amounts in thousands, except share, unit and per share data) SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS (In 000s) Description Beginning Balance Charged to Costs and Expenses Deductions Other(*) Ending Balance Allowance for doubtful accounts: Fiscal Year 2024 $ 163,727 $ 30,534 $ ( 49,714 ) $ 2,452 $ 146,999 Fiscal Year 2023 $ 140,328 $ 58,197 $ ( 31,591 ) $ ( 3,207 ) $ 163,727 Fiscal Year 2022 $ 143,311 $ 26,804 $ ( 27,706 ) $ ( 2,081 ) $ 140,328 Allowance for sales returns(**): Fiscal Year 2024 $ 18,916 $ 186,646 $ ( 189,015 ) $ ( 308 ) $ 16,239 Fiscal Year 2023 $ 23,424 $ 272,933 $ ( 276,046 ) $ ( 1,395 ) $ 18,916 Fiscal Year 2022 $ 20,753 $ 274,860 $ ( 271,547 ) $ ( 642 ) $ 23,424 (*) “Other” includes recoveries, acquisitions, and the effect of fluctuations in foreign currencies. (**) The allowance for sales returns liability is shown net of the estimated product returns recorded within inventory, both of which are presented gross on the Consolidated Balance Sheets. For Fiscal Year 2023 and Fiscal Year 2022, as it relates to the Allowance for sales returns activity, we did not properly present the changes in the account activity for the Charged to Costs and Expenses, Deductions and Other amounts. For Fiscal Year 2023, the amoun ts related to Charged to Costs and Expenses, Deductions, and Other were previously $ 6,106 , $( 11,073 ) and $ 459 , respectively, and were corrected to $ 272,933 , $( 276,046 ) and $( 1,395 ) , respectively. For Fiscal Year 2022, the amounts related to Charged to Costs and Expenses, Deductions and Other were previously $ 52,407 , $( 50,117 ) and $ 381 , respectively, and were corrected to $ 274,860 , $( 271,547 ) and $( 642 ) , respectively. The corrected amounts did not result in a change to the Allowance for sales returns balance for Fiscal Year 2023 or Fiscal Year 2022 and accordingly, management concluded the impact of the correction was not material to the previously issued financial statements or the schedule of valuation and qualifying accounts. 113 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosures None.