Ingram Micro 1999 Annual Report Download - page 47

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4455
Ingram Micro
Annual Report
Reconciliation of the statutory U.S. federal income tax rate to the Company’s effective tax rate is as follows:
Fiscal Year
1999 1998 1997
U.S. statutory rate 35% 35% 35%
State income taxes, net of federal income tax benefit 3 4 4
Foreign rates in excess of statutory rate 2 1 1
Other (2) 0 0
Effective tax rate 38% 40% 40%
At January 1, 2000, the Company had foreign net operating tax loss carryforwards of $103,000 of which approximately
80% have no expiration date.The remaining foreign net operating tax loss carryforwards expire through the year 2008.
The Company does not provide for income taxes on undistributed earnings of foreign subsidiaries as such earnings are
intended to be permanently reinvested in those operations.
Note 9 — Commitments and Contingencies
There are various claims, lawsuits and pending actions against the Company incident to the Company’s operations. It is the
opinion of management that the ultimate resolution of these matters will not have a material adverse effect on the Company’s
financial position or results of operations.
The Company has arrangements with certain finance companies that provide accounts receivable and inventory financing
facilities for its customers. In conjunction with certain of these arrangements, the Company has agreements with the finance
companies that would require it to repurchase certain inventory which might be repossessed from the customers by the finance
companies. Such repurchases have been insignificant to date.
The Company leases the majority of its facilities and certain equipment under noncancelable operating leases. Renewal and
purchase options at fair values exist for a substantial portion of the leases. Rental expense for the years ended January 1, 2000,
January 2, 1999 and January 3, 1998 was $82,781, $55,906, and $42,321, respectively.
Future minimum rental commitments on operating leases that have remaining noncancelable lease terms in excess of one year
as of January 1, 2000, are as follows:
2000 $57,573
2001 53,151
2002 47,739
2003 36,812
2004 35,002
Thereafter 236,333
$466,610