Avnet 2015 Annual Report Download - page 65

TableofContents
AVNET, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
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effectivetaxrateprimarilyduetoalessertaxbenefitfromthevaluationallowancereleasedinfiscal2016ascomparedwiththe
amountreleasedinfiscal2015.
The Company applies the guidance in ASC 740 Income Taxes , which requires management to use its judgment to the
appropriate weighting of all available evidence when assessing the need for the establishment or the release of valuation
allowances. As part of this analysis,the Company examines all available evidence on a jurisdiction byjurisdiction basis and
weighs the positive and negative evidence when determining the need for full or partial valuation allowances. The evidence
considered for each jurisdiction includes, among other items: (i) the historic levels of income or losses over a range of time
periods, which may extend beyond the most recent three fiscal years depending upon the historical volatility of income in an
individual jurisdiction; (ii) expectations and risk associated with underlying estimates of future taxable income, including
consideringthehistoricaltrendofdown-cyclesintheCompany’sservedindustries;(iii)jurisdictionalspecificlimitationsonthe
utilizationofdeferredtaxassetsincludingwhensuchassetsexpire;and(iv)prudentandfeasibletaxplanningstrategies.
Asoftheendoffiscal2015,theCompanyreleasedtheremainingvaluationallowanceagainstsignificantnetdeferredtax
assetsrelated toalegalentityinEMEA.Dueto theprofitabilityforthisentityandtheprojectionsforthefuture,management
concludedafullreleaseofthevaluationallowancewasappropriateinfiscal2015.
NoprovisionforU.S.incometaxes hasbeenmadeforapproximately $3.18billionofcumulativeunremittedearningsof
foreign subsidiaries at July 2, 2016, because those earnings are expected to be permanently reinvested outside the U.S. A
hypotheticalcalculationofthedeferredtaxliability,assumingthoseearningswereremitted,isnotpracticable.
The significant components of deferred tax assets and liabilities, included in “other assets” on the consolidated balance
sheets,areasfollows:
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  July 2,  June 27, 
  2016 2015 
  (Thousands) 
Deferredtaxassets:     
Federal,stateandforeignnetoperatinglosscarry-forwards  $ 131,544  $ 249,385 
Inventoriesvaluation   21,766   16,806 
Receivablesvaluation   10,996   16,989 
Variousaccruedliabilitiesandother   15,410  14,427 
   179,716   297,607 
Less—valuationallowances   (101,208) (111,381)
   78,508   186,226 
Deferredtaxliabilities:     
Depreciationandamortizationofproperty,plantandequipment   (88,663) (67,828)
Netdeferredtaxassets  $ (10,155)$ 118,398 
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Inadditiontonetdeferred taxliabilities,theCompany alsohas$105.7 millionofincometax relateddeferredchargesin
accordancewithASC810included asacomponentof“otherassets”intheconsolidatedbalancesheetasofJuly2,2016,asa
resultofa fiscal 2016 business restructuring in EMEA.Infiscal2015,priorto the business restructuring, such amounts were
classifiedasnetdeferredtaxassets.
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