XML 43 R27.htm IDEA: XBRL DOCUMENT
v3.23.4

Income Taxes | 12 Months Ended
--- | ---
Nov. 30, 2023
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES: The components of pretax income are as follows:
| Fiscal Years Ended November 30,
| 2023 |  | 2022 |  | 2021
| (currency in thousands)
United States | $ | 283,233 |  |  | $ | 334,994 |  |  | $ | 246,331 |
Foreign | 506,275 |  |  | 492,136 |  |  | 220,154 |
| $ | 789,508 |  |  | $ | 827,130 |  |  | $ | 466,485 |
Significant components of the provision for income taxes are as follows:
| Fiscal Years Ended November 30,
| 2023 |  | 2022 |  | 2021
| (currency in thousands)
Current tax provision: |  |  |  |  |
Federal | $ | 78,239 |  |  | $ | 88,745 |  |  | $ | (8,838) |
State | 40,436 |  |  | 35,320 |  |  | 13,916 |
Foreign | 135,494 |  |  | 144,139 |  |  | 66,660 |
| $ | 254,169 |  |  | $ | 268,204 |  |  | $ | 71,738 |
Deferred tax provision (benefit): |  |  |  |  |
Federal | $ | (30,499) |  |  | $ | (31,143) |  |  | $ | 13,597 |
State | (24,771) |  |  | (9,471) |  |  | (675) |
Foreign | (36,302) |  |  | (51,767) |  |  | (13,244) |
| $ | (91,572) |  |  | $ | (92,381) |  |  | $ | (322) |
Total tax provision | $ | 162,597 |  |  | $ | 175,823 |  |  | $ | 71,416 |
The breakdown of net deferred tax assets and liabilities are as follows:
| As of November 30,
| 2023 |  | 2022
| (currency in thousands)
Deferred tax assets | $ | 79,512 |  |  | $ | 46,523 |
Deferred tax liabilities | (893,021) |  |  | (942,250) |
Total net deferred tax assets (liabilities) | $ | (813,509) |  |  | $ | (895,727) |
The significant components of the Company’s deferred tax assets and liabilities are as follows:
| As of November 30,
| 2023 |  | 2022
| (currency in thousands)
Assets: |  |  |
Loss carryforwards | $ | 82,014 |  |  | $ | 82,192 |
Lease liabilities | 103,013 |  |  | 96,236 |
Accrued liabilities | 127,399 |  |  | 104,370 |
Foreign tax credit carryforwards | 45,732 |  |  | 50,090 |
Disallowed interest expense | 23,368 |  |  | 21,271 |
Allowance for doubtful accounts and sales return reserves | 34,476 |  |  | 29,046 |
Capitalized inventory costs | 12,106 |  |  | 6,541 |
Unrealized losses on cash flow hedges | 13,806 |  |  | 3,820 |
Acquisition and transaction related costs | 7,617 |  |  | 10,024 |
Share-based compensation expense | 16,548 |  |  | 15,530 |
Deferred revenue | 7,016 |  |  | 6,958 |
Long-lived assets | 6,188 |  |  | 7,461 |
Other, net | 688 |  |  | 2,385 |
| 479,971 |  |  | 435,924 |
Less: valuation allowance | (92,371) |  |  | (102,891) |
Total deferred tax assets | $ | 387,600 |  |  | $ | 333,033 |
Liabilities: |  |  |
Long-lived assets | $ | (1,090,615) |  |  | $ | (1,112,041) |
Lease right-of-use assets | (99,831) |  |  | (96,738) |
Deferred costs | (3,905) |  |  | (8,214) |
Capitalized marketing program costs | (404) |  |  | (2,949) |
Other, net | (6,354) |  |  | (8,818) |
Total deferred tax liabilities | $ | (1,201,109) |  |  | $ | (1,228,760) |
Net deferred tax (liability) asset | $ | (813,509) |  |  | $ | (895,727) |
The decrease in the Company's overall deferred tax liability position is primarily due to a reversal of a portion of the Company's deferred tax liabilities. The net change in the deferred tax valuation allowances in fiscal 2023 was a decrease of $10.5 million primarily resulting from the write-off of deferred tax assets in certain foreign jurisdictions for which a valuation allowance had previously been established. The valuation allowance at November 30, 2023 and November 30, 2022 primarily relates to carryforwards for foreign net operating losses and foreign tax credits in the United States. The Company considers all positive and negative evidence available in determining the potential of realizing deferred tax assets. To the extent that the Company generates consistent taxable income within those operations with valuation allowances, the Company may reduce the valuation allowances, thereby reducing income tax expense and increasing net income in the period the determination is made. The Company’s net operating loss carryforwards totaled $281.2 million at November 30, 2023. The majority of the net operating losses have an indefinite carryforward period with the remaining portion expiring in fiscal years 2024 through 2043. In addition, the Company has an immaterial net amount of state net operating losses. The Company’s foreign tax credit carryforwards in the United States totaled $45.7 million at November 30, 2023. The foreign tax credits have a ten-year carryforward period, and the majority is set to expire in fiscal year 2025. The reconciliation of the statutory United States federal income tax rate to the Company’s effective income tax rate is as follows:
| Fiscal Years Ended November 30,
| 2023 |  | 2022 |  | 2021
United States federal statutory income tax rate | 21.0 | % |  | 21.0 | % |  | 21.0 | %
State income taxes, net of federal income tax benefit | 1.1 |  |  | 1.8 |  |  | 2.5 |
Global intangible low taxed income | 0.7 |  |  | 0.2 |  |  | 0.6 |
Tax on foreign earnings different than US federal rate | (3.0) |  |  | (2.5) |  |  | 1.6 |
Net changes in deferred tax valuation allowances | (0.2) |  |  | (0.9) |  |  | (0.4) |
Interest not subject to tax, net | 0.1 |  |  | 0.3 |  |  | 0.2 |
Capital loss carryback | — |  |  | (1.0) |  |  | (9.6) |
Net changes in reserves for uncertain tax positions | — |  |  | (0.1) |  |  | (0.7) |
Stock compensation related to Tech Data equity awards | 0.9 |  |  | 1.4 |  |  | — |
Other, net | — |  |  | 1.1 |  |  | 0.1 |
Effective income tax rate | 20.6 | % |  | 21.3 | % |  | 15.3 | %
In connection with the Merger, the Company restructured its foreign financing structure, as well as select legal entities in anticipation of legally integrating legacy Tech Data and SYNNEX foreign operations. In addition to the treasury efficiencies, these restructurings resulted in a one-time domestic capital loss which would offset certain domestic capital gains when carried back under United States tax law to tax year 2020, resulting in a tax benefit of approximately $45.0 million during fiscal year 2021 and approximately $8.3 million during fiscal year 2022. The Company’s United States business has sufficient cash flow and liquidity to fund its operating requirements and the Company expects and intends that profits earned outside the United States will be fully utilized and reinvested outside of the United States. As of November 30, 2023, the Company had approximately $1.5 billion of undistributed earnings of its non-U.S. subsidiaries for which it has not provided for non-U.S. withholding taxes and state taxes because such earnings are intended to be reinvested indefinitely in international operations. It is not practicable to determine the amount of applicable taxes that would be due if such earnings were distributed. Accordingly, the Company has not provisioned United States state taxes and foreign withholding taxes on non-U.S. subsidiaries for which the earnings are permanently reinvested. The Company has been granted tax holidays in certain jurisdictions, primarily, China. The tax holidays provide for lower rates of taxation and require various thresholds of investment and business activities in those jurisdictions. Certain tax holidays begin to expire in fiscal year 2024. The tax benefits from the above tax holidays for fiscal years 2023, 2022 and 2021 were not material. The estimates and assumptions used by the Company in computing the income taxes reflected in the Company’s consolidated financial statements could differ from the actual results reflected in the income tax returns filed during the subsequent year. Adjustments are recorded based on filed returns when such returns are finalized or the related adjustments are identified. The aggregate changes in the balances of gross unrecognized tax benefits, excluding accrued interest and penalties, during fiscal years 2023, 2022 and 2021 were as follows (currency in thousands):
For the year ended November 30: |  | 2023 |  | 2022 |  | 2021
Gross unrecognized tax benefits at beginning of period |  | $ | 20,695 |  |  | $ | 26,330 |  |  | $ | 12,513 |
Increases in tax positions for prior years and acquisitions |  | 859 |  |  | 1,069 |  |  | 17,579 |
Decreases in tax positions for prior years |  | (3,093) |  |  | (189) |  |  | — |
Increases in tax positions for current year |  | 3,101 |  |  | 955 |  |  | 827 |
Expiration of statutes of limitation |  | (2,874) |  |  | (3,074) |  |  | (3,768) |
Settlements |  | — |  |  | (3,375) |  |  | — |
Changes due to translation of foreign currencies |  | 252 |  |  | (1,021) |  |  | (821) |
Gross unrecognized tax benefits at end of period |  | $ | 18,940 |  |  | $ | 20,695 |  |  | $ | 26,330 |
As of November 30, 2023, the amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate was $18.9 million. Unrecognized tax benefits that have a reasonable possibility of significantly decreasing within the 12 months following November 30, 2023 would not have a material impact on the tax rate. The Company recognizes interest and penalties related to unrecognized tax benefits in the provision for income taxes. The Company’s accrued interest and penalties at November 30, 2023, would not have a material impact on the effective tax rate if reversed. The provision for income taxes for each of the fiscal years ended November 30, 2023, 2022 and 2021 includes interest expense on unrecognized income tax benefits for current and prior years which is not significant to the Company’s Consolidated Statement of Income. The change in the balance of accrued interest for fiscal 2023, 2022 and 2021, includes the current year end accrual, an interest benefit resulting from the expiration of statutes of limitation, and the translation adjustments on foreign currencies. The Company conducts business primarily in the Americas, Europe and APJ, and as a result, one or more of its subsidiaries files income tax returns in the U.S. federal, various state, local and foreign tax jurisdictions. In the normal course of business, the Company is subject to examination by taxing authorities. The Company is no longer subject to examinations by the Internal Revenue Service for years before fiscal 2020. The Company is no longer subject to foreign or state income tax audits for returns covering years through 2005, and fiscal year 2013, respectively. In preparation of the Separation, SYNNEX entered into a Tax Matters Agreement with Concentrix effective on December 1, 2020 that governs the rights and obligations of SYNNEX and Concentrix for certain pre-Separation tax liabilities. The Tax Matters Agreement provides that SYNNEX and Concentrix will share certain pre-Separation income tax liabilities that arise from adjustments made by tax authorities to SYNNEX and Concentrix’ U.S. and certain non-U.S. income tax returns. In certain jurisdictions SYNNEX and Concentrix have joint and several liability for past income tax liabilities and accordingly, SYNNEX could be legally liable under applicable tax law for such liabilities and required to make additional tax payments. In addition, if the distribution of Concentrix' common shares to the SYNNEX stockholders is determined to be taxable, Concentrix and SYNNEX would share the tax liability equally, unless the taxability of the distribution is the direct result of action taken by either Concentrix or SYNNEX subsequent to the distribution in which case the party causing the distribution to be taxable would be responsible for any taxes imposed on the distribution.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 946 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Publisher FASB -URI https://asc.fasb.org//1943274/2147480990/946-20-50-13 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//740/tableOfContent Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 14 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-14 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-21 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 270 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482526/740-270-50-1 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 17 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-17 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-1 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-2 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 30 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482603/740-30-50-2 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration