Table of Contents Interest and Other Financing Expenses, Net Other Income (Expense), net Income Tax Expense 27 See Note 10, “Income taxes” to the Company’s consolidated financial statements included in Item 15 of this Annual Report on Form 10-K for additional information related to income taxes. Avnet’s effective tax rate is primarily a function of the tax rates in the numerous jurisdictions in which it does business applied to the mix of income before taxes. The effective tax rate may vary year over year as a result of changes in tax requirements in these jurisdictions, management’s evaluation of its ability to recognize its net deferred tax assets and the establishment of liabilities for unfavorable outcomes of tax positions taken on certain matters that are common to multinational enterprises and the actual outcome of those matters. Avnet’s effective tax rate on its income from continuing operations before income taxes was 198.5% in fiscal 2018 as compared with an effective tax rate of 15.2% in fiscal 2017. The fiscal 2018 effective tax rate is higher than the fiscal 2017 effective tax rate due primarily to (i) the provisional transition tax expense recorded under the requirements of the Act in fiscal 2018 and (ii) the goodwill impairment in fiscal 2018, which was not tax deductible, partially offset primarily by the mix of income in lower tax jurisdictions. Avnet’s effective tax rate on its income from continuing operations before income taxes was 25.7% in fiscal 2019 as compared with an effective tax rate of 198.5% in fiscal 2018. The fiscal 2019 effective tax rate is lower than the fiscal 2018 effective tax rate due primarily to the reduction in (i) the transition tax expense recorded under the requirements of the Act, and (ii) goodwill impairment. In fiscal 2017, the Company had $33.7 million of other expenses related to the non-service components periodic pension expenses, expenses related to foreign currency hedging and other costs associated with the Company’s acquisition of Farnell. In fiscal 2019, the Company had $11.2 million of other income as compared with $28.6 million of other income in fiscal 2018. In fiscal 2019, the Company had other income related to the non-service components of the Company’s periodic pension costs of $24.1 million, partially offset by foreign currency losses of $11.8 million and other miscellaneous expense of $1.1 million. In fiscal 2018, the Company had other income related to the non-service components of the Company’s periodic pension costs of $21.3 million and $7.3 million of foreign currency gains primarily related to the strengthening of both the Euro and British Pound compared to the U.S. Dollar during fiscal 2018 compared to fiscal 2017. Interest and other financing expenses for fiscal 2018 was $92.7 million, a decrease of $6.8 million, or 6.9%, compared with fiscal 2017. The decrease in interest and other financing expenses in fiscal 2018 compared to fiscal 2017 was primarily related to the impact of the Company’s repayment of its outstanding term loans and borrowings on its revolving credit facilities in the second half of fiscal 2017, which were used to help fund the Farnell acquisition. Interest and other financing expenses for fiscal 2019 was $134.9 million, an increase of $42.1 million, or 45.4%, compared with interest and other financing expenses of $92.7 million in fiscal 2018. The increase in interest and other financing expenses in fiscal 2019 compared to fiscal 2018 was primarily related to increased expenses in foreign regions to finance working capital needs including increases in average debt outstanding and from lower interest income from investments in cash equivalents between the fiscal years.