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Income Taxes | 12 Months Ended
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Nov. 30, 2024
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES: The components of pretax income are as follows:
| Fiscal Years Ended November 30,
| 2024 |  | 2023 |  | 2022
| (currency in thousands)
United States | $ | 263,321 |  |  | $ | 283,233 |  |  | $ | 334,994 |
Foreign | 602,714 |  |  | 506,275 |  |  | 492,136 |
| $ | 866,035 |  |  | $ | 789,508 |  |  | $ | 827,130 |
Significant components of the provision for income taxes are as follows:
| Fiscal Years Ended November 30,
| 2024 |  | 2023 |  | 2022
| (currency in thousands)
Current tax provision: |  |  |  |  |
Federal | $ | 12,163 |  |  | $ | 78,239 |  |  | $ | 88,745 |
State | 24,501 |  |  | 40,436 |  |  | 35,320 |
Foreign | 169,093 |  |  | 135,494 |  |  | 144,139 |
| $ | 205,757 |  |  | $ | 254,169 |  |  | $ | 268,204 |
Deferred tax provision (benefit): |  |  |  |  |
Federal | $ | 18,006 |  |  | $ | (30,499) |  |  | $ | (31,143) |
State | (12,836) |  |  | (24,771) |  |  | (9,471) |
Foreign | (33,983) |  |  | (36,302) |  |  | (51,767) |
| $ | (28,813) |  |  | $ | (91,572) |  |  | $ | (92,381) |
Total tax provision | $ | 176,944 |  |  | $ | 162,597 |  |  | $ | 175,823 |
The breakdown of net deferred tax assets and liabilities are as follows:
| As of November 30,
| 2024 |  | 2023
| (currency in thousands)
Deferred tax assets | $ | 36,059 |  |  | $ | 79,512 |
Deferred tax liabilities | (812,763) |  |  | (893,021) |
Total net deferred tax assets (liabilities) | $ | (776,704) |  |  | $ | (813,509) |
The significant components of the Company’s deferred tax assets and liabilities are as follows:
| As of November 30,
| 2024 |  | 2023
| (currency in thousands)
Assets: |  |  |
Loss carryforwards | $ | 87,043 |  |  | $ | 82,014 |
Lease liabilities | 110,166 |  |  | 103,013 |
Accrued liabilities | 118,272 |  |  | 127,399 |
Foreign tax credit carryforwards | 36,290 |  |  | 45,732 |
Disallowed interest expense | 21,976 |  |  | 23,368 |
Allowance for doubtful accounts and sales return reserves | 19,713 |  |  | 34,476 |
Capitalized inventory costs | 11,974 |  |  | 12,106 |
Unrealized losses on hedges | 11,971 |  |  | 13,806 |
Acquisition and transaction related costs | 5,255 |  |  | 7,617 |
Share-based compensation expense | 15,575 |  |  | 16,548 |
Deferred revenue | 12,129 |  |  | 7,016 |
Long-lived assets | 4,665 |  |  | 6,188 |
Other, net | 3,251 |  |  | 688 |
| 458,280 |  |  | 479,971 |
Less: valuation allowance | (80,640) |  |  | (92,371) |
Total deferred tax assets | $ | 377,640 |  |  | $ | 387,600 |
Liabilities: |  |  |
Long-lived assets | $ | (1,017,777) |  |  | $ | (1,090,615) |
Lease right-of-use assets | (106,821) |  |  | (99,831) |
Deferred costs | (12,279) |  |  | (3,905) |
Deferred taxes on unremitted earnings | (5,116) |  |  | — |
Other, net | (12,351) |  |  | (6,758) |
Total deferred tax liabilities | $ | (1,154,344) |  |  | $ | (1,201,109) |
Net deferred tax liability | $ | (776,704) |  |  | $ | (813,509) |
The decrease in the Company's net 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 2024 was a decrease of $11.7 million primarily resulting from the release of valuation allowances on foreign tax credits in certain jurisdictions for which a valuation allowance had previously been established. The valuation allowance at November 30, 2024 and November 30, 2023 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 $265.1 million at November 30, 2024. The majority of the net operating losses have an indefinite carryforward period with the remaining portion expiring in fiscal years 2025 through 2043. In addition, the Company has a $22.4 million net amount of state net operating losses with the majority having an indefinite carryforward period. The Company’s foreign tax credit carryforwards in the United States totaled $36.3 million at November 30, 2024. 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,
| 2024 |  | 2023 |  | 2022
United States federal statutory income tax rate | 21.0 | % |  | 21.0 | % |  | 21.0 | %
State income taxes, net of federal income tax benefit | 1.0 |  |  | 1.1 |  |  | 1.8 |
Global intangible low taxed income | 0.4 |  |  | 0.7 |  |  | 0.2 |
Tax on foreign earnings different than US federal rate | (2.5) |  |  | (3.0) |  |  | (2.5) |
Net changes in deferred tax valuation allowances | (1.4) |  |  | (0.2) |  |  | (0.9) |
Interest not subject to tax, net | 0.1 |  |  | 0.1 |  |  | 0.3 |
Foreign withholding taxes | 2.4 |  |  | 0.6 |  |  | — |
Capital loss carryback | — |  |  | — |  |  | (1.0) |
Net changes in reserves for uncertain tax positions | (0.3) |  |  | — |  |  | (0.1) |
Stock compensation related to Tech Data equity awards | — |  |  | 0.9 |  |  | 1.4 |
Other, net | (0.3) |  |  | (0.6) |  |  | 1.1 |
Effective income tax rate | 20.4 | % |  | 20.6 | % |  | 21.3 | %
The Company’s U.S. business has sufficient cash flow and liquidity to fund its operating requirements and the Company expects and intends that profits earned outside the U.S. will be utilized and reinvested outside of the U.S. As of November 30, 2024, the Company had approximately $1.9 billion of undistributed earnings of its non-U.S. subsidiaries. The Company intends to indefinitely reinvest the remaining earnings from its foreign subsidiaries for which a deferred tax liability has not already been recorded. 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 will begin to expire in fiscal year 2025. The tax benefits from the above tax holidays for fiscal years 2024, 2023 and 2022 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 Organization for Economic Co-operation and Development has published a proposal to establish a new global minimum corporate tax rate of 15%, commonly referred to as Pillar Two. While the U.S. has not yet adopted the Pillar Two framework into law, several countries in which we operate have enacted tax legislation based on the Pillar Two framework with certain components of the minimum tax rules effective beginning in 2024 (fiscal year 2025 for the Company) and further rules becoming effective beginning in 2025. These rules are not expected to materially impact the Company's Consolidated Financial Statements. The Company will continue to monitor U.S. and global legislative action related to Pillar Two for potential impacts. The aggregate changes in the balances of gross unrecognized tax benefits, excluding accrued interest and penalties, during fiscal years 2024, 2023 and 2022 were as follows (currency in thousands):
For the year ended November 30: |  | 2024 |  | 2023 |  | 2022
Gross unrecognized tax benefits at beginning of period |  | $ | 18,940 |  |  | $ | 20,695 |  |  | $ | 26,330 |
Increases in tax positions for prior years |  | 1,068 |  |  | 859 |  |  | 1,069 |
Decreases in tax positions for prior years |  | (1,219) |  |  | (3,093) |  |  | (189) |
Increases in tax positions for current year |  | 1,390 |  |  | 3,101 |  |  | 955 |
Expiration of statutes of limitation |  | (3,167) |  |  | (2,874) |  |  | (3,074) |
Settlements |  | — |  |  | — |  |  | (3,375) |
Changes due to translation of foreign currencies |  | (215) |  |  | 252 |  |  | (1,021) |
Gross unrecognized tax benefits at end of period |  | $ | 16,797 |  |  | $ | 18,940 |  |  | $ | 20,695 |
As of November 30, 2024, the amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate was $16.8 million. Unrecognized tax benefits that have a reasonable possibility of significantly decreasing within the 12 months following November 30, 2024 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, 2024 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, 2024, 2023 and 2022 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 2024, 2023 and 2022, 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 2021. The Company is no longer subject to foreign or state income tax audits for returns covering years through 2011, and fiscal year 2017, respectively. On December 1, 2020, the Company completed the previously announced separation of its customer experience services business (the “Separation”), in a tax-free transaction for federal income tax purposes, which was accomplished by the distribution of one hundred percent of the outstanding common stock of Concentrix Corporation (“Concentrix”). SYNNEX stockholders received one share of Concentrix common stock for every share of SYNNEX common stock held at the close of business on the record date. 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.

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