Henry Schein 2013 Annual Report Download - page 93

HENRY SCHEIN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(in thousands, except per share data)
84
Note 12 – Income Taxes – (Continued)
The tax effects of temporary differences that give rise to our deferred income tax asset (liability) were as
follows:
   Years Ended
   December 28, December 29,
   2013 2012
Current deferred income tax assets:
 Inventory, premium coupon redemptions and accounts receivable
  valuation allowances ..................................................................................... $ 31,016 $ 27,820
 Uniform capitalization adjustments to inventories ................................................. 7,318 9,944
 Other current assets ................................................................................................ 21,351 21,035
 Current deferred income tax asset (1) .................................................................... 59,685 58,799
N
on-current deferred income tax asset (liability):
 Property and equipment ......................................................................................... (5,571) (5,661)
 Stock-based compensation ..................................................................................... 35,995 42,875
 Other non-current liabilities ................................................................................... (211,180) (215,562)

N
et operating losses of domestic subsidiaries ........................................................ 693 2,768

N
et operating losses of foreign subsidiaries ........................................................... 45,254 47,101
  Total non-current deferred tax liability .......................................................... (134,809) (128,479)
  Valuation allowance for non-current deferred tax assets (2) ..................... (16,285) (30,598)

N
et non-current deferred tax liability (1) ............................................................... (151,094) (159,077)
N
et deferred income tax liability .................................................................................... $ (91,409) $ (100,278)
(1)Certain deferred tax amounts do not have a right of offset and are therefore reflected on a gross basis in current assets
and non-current liabilities in our consolidated balance sheets.
(2) Primarily relates to operating losses of acquired foreign subsidiaries, the benefits of which are uncertain. Any future reductions
of such valuation allowances will be reflected as a reduction of income tax expense in accordance with the provisions of
 ASC Topic 805, “Business Combinations.”

The assessment of the amount of value assigned to our deferred tax assets under the applicable accounting rules
is judgmental. We are required to consider all available positive and negative evidence in evaluating the likelihood
that we will be able to realize the benefit of our deferred tax assets in the future. Such evidence includes scheduled
reversals of deferred tax liabilities, projected future taxable income, tax planning strategies and the results of recent
operations. Since this evaluation requires consideration of events that may occur some years into the future, there
is an element of judgment involved. Realization of our deferred tax assets is dependent on generating sufficient
taxable income in future periods. We believe that it is more likely than not that future taxable income will be
sufficient to allow us to recover substantially all of the value assigned to our deferred tax assets. However, if future
events cause us to conclude that it is not more likely than not that we will be able to recover all of the value
assigned to our deferred tax assets, we will be required to adjust our valuation allowance accordingly.