Avnet 2007 Annual Report Download - page 66

The significant components of deferred tax assets and liabilities, included primarily in other long-term assets
on the consolidated balance sheets, are as follows:
June 30,
2007
July 1,
2006
(Thousands)
Deferred tax assets:
Inventory valuation ........................................ $ 7,120 $ 7,108
Accounts receivable valuation ................................ 24,017 16,057
Federal, state and foreign tax loss carry-forwards .................. 400,923 409,344
Various accrued liabilities and other ............................ 43,496 49,117
475,556 481,626
Less — valuation allowance .................................. (346,947) (270,745)
128,609 210,881
Deferred tax liabilities:
Depreciation and amortization of property, plant and equipment ....... (6,825) 833
Net deferred tax assets ....................................... $135,434 $ 210,048
During fiscal 2007, the Company utilized net operating loss carryforwards and recognized an additional
deferred tax asset, which is substantially offset with a related valuation allowance, resulting in a decrease to the net
deferred tax assets. As of June 30, 2007, the Company had foreign net operating loss carry-forwards of approx-
imately $1,127,957,000, approximately $85,656,000 of which have expiration dates ranging from fiscal 2008 to
2022 and the remaining $1,042,301,000 of which have no expiration date. The carrying value of the Company’s net
operating loss carry-forwards is dependent upon the Company’s ability to generate sufficient future taxable income
in certain tax jurisdictions. In addition, the Company considers historic levels of income, expectations and risk
associated with estimates of future taxable income and on-going prudent and feasible tax planning strategies in
assessing a tax valuation allowance.
During fiscal 2006, the Company acquired deferred tax assets and related valuation allowances as a result of
the acquisition of Memec (see Note 2). Following the acquisition, Avnet analyzed these assets based upon the
evaluation of relevant factors, assessed the likelihood of recoverability of these deferred tax assets and established,
through purchase accounting, appropriate adjustments to these valuation allowances. In fiscal 2007 certain of these
previously valued deferred tax assets were realized. The release of the related valuation allowance was recorded
through goodwill (see Note 6).
10. Pension and retirement plans
Pension Plan
The Company’s noncontributory defined benefit pension plan (the “Plan”) covers substantially all domestic
employees. Employees are eligible to participate in the Plan following the first year of service during which they
worked at least 1,000 hours. The Plan provides defined benefits pursuant to a cash balance feature whereby a
participant accumulates a benefit based upon a percentage of current salary, which varies with age, and interest
credits. The Company uses June 30 as the measurement date for determining pension expense and benefit
obligations for each fiscal year.
Not included in the tabulations and discussions that follow are pension plans of certain non-U.S. subsidiaries,
which are not material.
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AVNET, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)