What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2021-10-08 compared with 2021-07-09 · 147 added, 154 removed, 541 unchanged (36% of the section changed)

3 unchanged sentences

(currency and share amounts in thousands, except par value)

May 31, 2021 November 30, 2020

August 31, 2021 November 30, 2020

Current assets:

1 unchanged sentence

Accounts receivable, net 1,131,416 1,081,481

Assets held for sale 83,010 —

Other current assets 175,217 189,239

14 unchanged sentences

Income taxes payable 48,937 20,725

Liabilities held for sale 30,353 —

Total current liabilities 888,792 1,008,662

5 unchanged sentences

Stockholders’ equity:

Preferred stock, $ 0.0001 par value, 10,000 shares authorized as of May 31, 2021;

no shares issued and outstanding as of May 31, 2021

Common stock, $ 0.0001 par value, 250,000 shares authorized as of May 31, 2021;

51,296 shares issued and outstanding as of May 31, 2021

Preferred stock, $ 0.0001 par value, 10,000 shares authorized as of August 31, 2021;

no shares issued and outstanding as of August 31, 2021

Common stock, $ 0.0001 par value, 250,000 shares authorized as of August 31, 2021;

51,448 shares issued and outstanding as of August 31, 2021

Additional paid-in capital 2,338,108 —

Treasury stock, 4 shares as of May 31, 2021

Treasury stock, 93 shares as of August 31, 2021

Retained earnings 281,469 —

Former parent company investment — 2,305,899

Accumulated other comprehensive income (loss) 31,550 ( 3,814 )

Accumulated other comprehensive loss ( 39,863 ) ( 3,814 )

Total stockholders’ equity 2,565,755 2,302,085

5 unchanged sentences

(currency and share amounts in thousands, except per share amounts)

Three Months Ended Six Months Ended

May 31, 2021 May 31, 2020 May 31, 2021 May 31, 2020

Three Months Ended Nine Months Ended

August 31, 2021 August 31, 2020 August 31, 2021 August 31, 2020

Revenue $ 1,397,251 $ 1,163,694 $ 4,120,407 $ 3,418,676

19 unchanged sentences

(currency in thousands)

Three Months Ended Six Months Ended

May 31, 2021 May 31, 2020 May 31, 2021 May 31, 2020

Three Months Ended Nine Months Ended

August 31, 2021 August 31, 2020 August 31, 2021 August 31, 2020

Net income $ 109,754 $ 45,397 $ 281,469 $ 100,184

Other comprehensive income (loss):

Unrealized (loss) gain of defined benefit plans, net of taxes of $ 0 and $ 98 for the three and six months ended May 31, 2021, respectively, and $ 0 for the three and six months ended May 31, 2020, respectively

Unrealized gains (losses) of defined benefit plans, net of taxes of $ 0 and $ 98 for the three and nine months ended August 31, 2021, respectively, and $ 3,114 for the three and nine months ended August 31, 2020, respectively

2 ( 8,881 ) ( 446 ) ( 8,879 )

Unrealized gain on cash flow hedges during the period, net of taxes of $( 6,048 ) and $( 3,793 ) for the three and six months ended May 31, 2021, respectively, and $( 844 ) and $( 257 ) for the three and six months ended May 31, 2020, respectively

Unrealized gains (losses) on cash flow hedges during the period, net of taxes of $ 3,840 and $ 47 for the three and nine months ended August 31, 2021, respectively, and $( 8,677 ) and $( 8,934 ) for the three and nine months ended August 31, 2020, respectively

( 11,219 ) 26,086 ( 620 ) 26,860

Reclassification of net gains on cash flow hedges to net income, net of taxes of $ 2,518 and $ 5,540 for the three and six months ended May 31, 2021, respectively, and $ 1,144 and $ 2,798 for the three and six months ended May 31, 2020, respectively

Reclassification of net gains on cash flow hedges to net income, net of taxes of $ 1,400 and $ 6,940 for the three and nine months ended August 31, 2021, respectively, and $ 1,976 and $ 4,774 for the three and nine months ended August 31, 2020, respectively

( 4,091 ) ( 5,942 ) ( 20,617 ) ( 14,354 )

Total change in unrealized gain (loss) on cash flow hedges, net of taxes

Total change in unrealized gains (losses) on cash flow hedges, net of taxes

( 15,310 ) 20,144 ( 21,237 ) 12,506

Foreign currency translation gain (loss), net of taxes of $ 0 for the three and six months ended May 31, 2021 and 2020, respectively

Foreign currency translation gains (losses), net of taxes of $ 0 for the three and nine months ended August 31, 2021 and 2020, respectively

( 56,105 ) 74,383 ( 14,366 ) 35,893

1 unchanged sentence

( 71,413 ) 85,646 ( 36,049 ) 39,520

Comprehensive income (loss) $ 128,579 $ ( 24,676 ) $ 207,079 $ 8,661

Comprehensive income $ 38,341 $ 131,043 $ 245,420 $ 139,704

(Amounts may not add due to rounding)

3 unchanged sentences

(currency in thousands)

Three and Six Months Ended May 31, 2021

Three and Nine Months Ended August 31, 2021

Common stock Additional paid-in capital Treasury stock Retained earnings Former parent company investment Accumulated other comprehensive income (loss) Total

Balances, February 28, 2021 $ 5 $ 2,314,996 $ ( 409 ) $ 88,811 $ — $ ( 14,125 ) $ 2,389,278

Other comprehensive income — — — — — 45,675 45,675

Balances, May 31, 2021 $ 5 $ 2,327,025 $ ( 527 ) $ 171,715 $ — $ 31,550 $ 2,529,768

Other comprehensive loss — — — — — ( 71,413 ) ( 71,413 )

Share-based compensation activity — 11,083 — — — — 11,083

1 unchanged sentence

Net income — — — 109,754 — — 109,754

Balances, May 31, 2021 $ 5 $ 2,327,025 $ ( 527 ) $ 171,715 $ — $ 31,550 $ 2,529,768

Balances, August 31, 2021 $ 5 $ 2,338,108 $ ( 13,964 ) $ 281,469 $ — $ ( 39,863 ) $ 2,565,755

Balances, November 30, 2020 $ — $ — $ — $ — $ 2,305,899 $ ( 3,814 ) $ 2,302,085

Other comprehensive income — — — — — 35,364 35,364

Other comprehensive loss — — — — — ( 36,049 ) ( 36,049 )

Reclassification of net former parent investment in Concentrix — 2,305,899 — — ( 2,305,899 ) — —

3 unchanged sentences

Net income — — — 281,469 — — 281,469

Balances, May 31, 2021 $ 5 $ 2,327,025 $ ( 527 ) $ 171,715 $ — $ 31,550 $ 2,529,768

Balances, August 31, 2021 $ 5 $ 2,338,108 $ ( 13,964 ) $ 281,469 $ — $ ( 39,863 ) $ 2,565,755

(Amounts may not add due to rounding)

3 unchanged sentences

(currency in thousands)

Three and Six Months Ended May 31, 2020

Common stock Additional paid-in capital Treasury stock Retained earnings Former parent company investment Accumulated other comprehensive loss Total

Balances, February 29, 2020 $ — $ — $ — $ — $ 1,578,184 $ ( 69,062 ) $ 1,509,122

Three and Nine Months Ended August 31, 2020

Common stock Additional paid-in capital Treasury stock Retained earnings Former parent company investment Accumulated other comprehensive (loss) income Total

Balances, May 31, 2020 $ — $ — $ — $ — $ 1,588,748 $ ( 96,208 ) $ 1,492,540

Share-based compensation — — — — 3,834 — 3,834

Other comprehensive loss — — — — — ( 27,146 ) ( 27,146 )

Transfers from former parent — — — — ( 2,986 ) — ( 2,986 )

Other comprehensive income — — — — — 85,646 85,646

Hypothetical current tax expense recorded for separate return basis presentation — — — — 3,536 — 3,536

Net income — — — — 45,397 — 45,397

Balances, May 31, 2020 $ — $ — $ — $ — $ 1,588,748 $ ( 96,208 ) $ 1,492,540

Balances, August 31, 2020 $ — $ — $ — $ — $ 1,638,529 $ ( 10,562 ) $ 1,627,967

Balances, November 30, 2019 $ — $ — $ — $ — $ 1,519,923 $ ( 50,082 ) $ 1,469,841

Share-based compensation — — — — 11,821 — 11,821

Other comprehensive loss — — — — — ( 46,126 ) ( 46,126 )

Transfers from former parent — — — — ( 2,986 ) — ( 2,986 )

Other comprehensive income — — — — — 39,520 39,520

Hypothetical current tax expense recorded for separate return basis presentation — — — — 9,587 — 9,587

Net income — — — — 100,184 — 100,184

Balances, May 31, 2020 $ — $ — $ — $ — $ 1,588,748 $ ( 96,208 ) $ 1,492,540

Balances, August 31, 2020 $ — $ — $ — $ — $ 1,638,529 $ ( 10,562 ) $ 1,627,967

(Amounts may not add due to rounding)

3 unchanged sentences

(currency in thousands)

Six Months Ended

May 31, 2021 May 31, 2020

Nine Months Ended

August 31, 2021 August 31, 2020

Cash flows from operating activities:

7 unchanged sentences

Hypothetical current tax expense recorded for separate return basis presentation — 9,587

Unrealized foreign exchange gains 3,240 ( 3,678 )

Unrealized foreign exchange (gain) loss ( 446 ) 12,666

Gain on divestitures and related transaction costs ( 13,197 ) —

Other 66 ( 1,136 )

9 unchanged sentences

Acquisitions of business, net of cash acquired and refunds ( 3,279 ) ( 4,941 )

Proceeds from divestitures, net of cash sold 73,708 —

Net cash used in investing activities ( 42,440 ) ( 116,939 )

37 unchanged sentences

certain allocations of former parent costs and expenses, were separately maintained in a separate ledger in the legal entities that made up the CX business.

As the separate legal entities that made up the CX business were not historically held by a single legal entity, former parent company investment was shown in lieu of stockholders’ equity in the prior periods.

All significant intercompany balances and transactions between the legal entities that comprised the CX business were eliminated.

14 unchanged sentences

Reclassifications

Certain amounts in the consolidated financial statements related to the prior period have been reclassified to conform to the current period’s presentation.

Certain amounts in the consolidated financial statements related to the prior periods have been reclassified to conform to the current period’s presentation.

Risks and uncertainties related to the COVID-19 pandemic

2 unchanged sentences

The Company successfully transitioned a significant portion of its workforce to a remote working environment throughout the second quarter of 2020 and implemented a number of safety and social distancing measures in our sites to protect the health and safety of employees.

During the six months ended May 31, 2021, almost all of the Company’s workforce was productive.

During the nine months ended August 31, 2021, almost all of the Company’s workforce was productive.

The Company is unable to predict how long the pandemic conditions will persist in regions in which the Company operates, if or when countries or localities may experience an increase in COVID-19 cases, what additional measures may be introduced by governments or the Company’s clients in response to the pandemic generally or to an increase in COVID-19 cases in a particular country or locality, and the effect of any such additional measures on the Company’s business.

4 unchanged sentences

For a discussion of the Company’s significant accounting policies, refer to the Company’s Annual Report on Form 10-K for the fiscal year ended November 30, 2020.

Accounting pronouncements adopted during the six months ended May 31, 2021 are discussed below.

Accounting pronouncements adopted during the nine months ended August 31, 2021 are discussed below.

Concentration of credit risk

For the three and six months ended May 31, 2021, one client accounted for 11.2 % and 11.5 % of the Company’s consolidated revenue, respectively.

For the three and six months ended May 31, 2020, one client accounted for 10.8 % and 10.3 % of the Company’s consolidated revenue, respectively.

As of May 31, 2021 and November 30, 2020, one client comprised 14.0 % and 16.2 %, respectively, of the Company’s total accounts receivable balance.

For the three and nine months ended August 31, 2021, one client accounted for 11.9 % and 11.7 % of the Company’s consolidated revenue, respectively.

For the three and nine months ended August 31, 2020, one client accounted for 11.8 % and 10.8 % of the Company’s consolidated revenue, respectively.

As of August 31, 2021 and November 30, 2020, one client comprised 14.9 % and 16.2 %, respectively, of the Company’s total accounts receivable balance.

Recently adopted accounting pronouncements

12 unchanged sentences

In August 2018, the FASB issued new guidance to add, remove, and clarify disclosure requirements related to defined benefit pension and other postretirement plans.

The amendment requires the Company to disclose the weighted-average interest crediting rates used in cash balance pension plans.

The guidance requires the Company to disclose the weighted-average interest crediting rates used in cash balance pension plans.

It also requires the Company to disclose the reasons for significant changes in the benefit obligation or plan assets, including significant gains and losses affecting the benefit obligation for the period.

1 unchanged sentence

The adoption is not expected to have a material impact on the Company’s consolidated financial statements.

NOTE 3— ASSETS HELD FOR SALE:

In May 2021, the Company entered into a definitive agreement to sell its insurance third-party administration operations and software platform, Concentrix Insurance Solutions (“CIS”), to a third party.

The Company completed the sale of CIS during July 2021.

As of May 31, 2021, the assets and liabilities of the CIS business qualified as assets and liabilities held for sale due to the planned divestiture.

The following is a summary of the major categories of assets and liabilities that were reclassified to held for sale:

Accounts receivable, net $ 6,657

Other current assets 4,066

Property and equipment, net 37,454

Goodwill 14,690

Intangible assets, net 3,447

Other assets 16,696

Total assets held for sale $ 83,010

Accounts payable $ 838

Accrued compensation and benefits 5,008

Other accrued liabilities 3,043

Deferred tax liabilities 13,733

Other long-term liabilities 7,731

Total liabilities held for sale $ 30,353

The Company determined that the sale of CIS did not qualify as discontinued operations.

The CIS results of operations are included within the Company’s statements of operations for the full three and six months ended May 31, 2021.

NOTE 3— DIVESTITURES:

In July 2021, the Company completed the sales of its insurance third-party administration operations and software platform, Concentrix Insurance Solutions (“CIS”), and another non-CX solutions business in separate transactions for total cash consideration of approximately $ 73,708 , both subject to customary post-closing adjustments.

The divestitures generated a pre-tax gain of approximately $ 13,197 , net of related transaction costs.

The gain on divestitures and related transaction costs are included in selling, general and administrative expenses in the consolidated statements of operations.

The Company determined that the sales of the businesses did not qualify as discontinued operations.

The results of the sold businesses’ operations are included within the Company’s statements of operations for fiscal year 2021 through the sales dates in July 2021 .

NOTE 4— SHARE-BASED COMPENSATION:

5 unchanged sentences

Following the conversion, it was determined that the share-based awards were modified in accordance with the applicable accounting guidance.

As a result, the fair values of the share-based

awards immediately before and after the modification were assessed in order to determine if the modification resulted in any incremental compensation cost related to the awards.

As a result, the fair values of the share-based awards immediately before and after the modification were assessed in order to determine if the modification resulted in any incremental compensation cost related to the awards.

Based on the analysis performed, including consideration of the anti-dilution feature contained in the SYNNEX stock incentive plan, it was determined that the conversion resulted in an immaterial amount of incremental compensation cost for the outstanding awards.

1 unchanged sentence

The employee grants were delayed from October 2020 to January 2021 due to the previously pending spin-off.

On July 1, 2021, the Company granted 109 performance-based restricted stock units under the Concentrix Stock Incentive Plan.

The performance-based restricted stock units will vest, if at all, upon the achievement of certain annual financial targets during the three-year period ending November 30, 2023.

The Company recognizes share-based compensation expense for all share-based awards made to employees, including employee stock options, restricted stock awards, restricted stock units, performance-based restricted stock units and employee stock purchases, based on estimated fair values.

The Company recorded share-based compensation expense in the consolidated statements of operations for the three and six months ended May 31, 2021 and 2020 as follows:

Three Months Ended Six Months Ended

May 31, 2021 May 31, 2020 May 31, 2021 May 31, 2020

The Company recorded share-based compensation expense in the consolidated statements of operations for the three and nine months ended August 31, 2021 and 2020 as follows:

Three Months Ended Nine Months Ended

August 31, 2021 August 31, 2020 August 31, 2021 August 31, 2020

Total share-based compensation $ 9,457 $ 3,929 $ 25,858 $ 12,031

5 unchanged sentences

The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same amounts shown in the consolidated statements of cash flows:

May 31, 2021 November 30, 2020

August 31, 2021 November 30, 2020

Cash and cash equivalents $ 154,193 $ 152,656

4 unchanged sentences

Accounts receivable, net is comprised of the following:

May 31, 2021 November 30, 2020

August 31, 2021 November 30, 2020

Billed accounts receivable $ 657,873 $ 644,789

5 unchanged sentences

Presented below is a progression of the allowance for doubtful trade receivables:

Three Months Ended Six Months Ended

May 31, May 31,

Three Months Ended Nine Months Ended

August 31, August 31,

2021 2020 2021 2020

4 unchanged sentences

Property and equipment, net:

The following tables summarize the carrying amounts and related accumulated depreciation for property and equipment as of May 31, 2021 and November 30, 2020:

May 31, 2021 November 30, 2020

The following tables summarize the carrying amounts and related accumulated depreciation for property and equipment as of August 31, 2021 and November 30, 2020:

August 31, 2021 November 30, 2020

Land $ 27,759 $ 29,000

8 unchanged sentences

$ 397,841 $ 451,649

Shown below are countries where 10% or more of the Company’s property and equipment, net are located:

May 31, 2021 November 30, 2020

Shown below are the countries where 10% or more of the Company’s property and equipment, net are located:

August 31, 2021 November 30, 2020

Property and equipment, net:

4 unchanged sentences

Total $ 397,841 $ 451,649

The following table summarizes the changes in the Company’s goodwill for the period ended May 31, 2021:

The following table summarizes the changes in the Company’s goodwill for the nine months ended August 31, 2021:

Balance as of November 30, 2020

Acquisition 3,502

Assets held for sale ( 14,690 )

Divestitures ( 14,690 )

Foreign exchange translation ( 2,220 )

Balance as of May 31, 2021

Balance as of August 31, 2021

Intangible assets, net:

The following tables summarize the carrying amounts and related accumulated amortization for intangible assets as of May 31, 2021 and November 30, 2020:

As of May 31, 2021 As of November 30, 2020

amounts Accumulated amortization Net amounts Gross

amounts Accumulated amortization Net amounts

The following tables summarize the carrying amounts and related accumulated amortization for intangible assets as of August 31, 2021 and November 30, 2020:

As of August 31, 2021 As of November 30, 2020

Gross amounts Accumulated amortization Net amounts Gross amounts Accumulated amortization Net amounts

Customer relationships $ 1,362,259 $ ( 669,651 ) $ 692,608 $ 1,389,341 $ ( 595,024 ) $ 794,317

4 unchanged sentences

Fiscal years ending November 30,

2021 (remaining 6 months) $ 65,905

2021 (remaining three months) $ 33,824

Thereafter 284,268

2 unchanged sentences

The components of accumulated other comprehensive income (loss) (“AOCI”), net of taxes, were as follows:

Three Months Ended May 31, 2021 and 2020

Three Months Ended August 31, 2021 and 2020

Unrecognized gains (losses) on

3 unchanged sentences

Foreign currency translation

adjustments, net of taxes

Balance, February 29, 2020 $ ( 29,922 ) $ 10,788 $ ( 49,928 ) $ ( 69,062 )

gain (losses), net of taxes

Balance, May 31, 2020 $ ( 29,938 ) $ 9,885 $ ( 76,155 ) $ ( 96,208 )

Other comprehensive income (loss) before reclassification

2 unchanged sentences

— ( 5,942 ) — ( 5,942 )

Balances at May 31, 2020

Balances at August 31, 2020

$ ( 38,819 ) $ 30,029 $ ( 1,772 ) $ ( 10,562 )

Balance, February 28, 2021 $ ( 38,960 ) $ 12,998 $ 11,837 $ ( 14,125 )

Balance, May 31, 2021 $ ( 39,032 ) $ 23,312 $ 47,270 $ 31,550

Other comprehensive income (loss) before reclassification

2 unchanged sentences

— ( 4,091 ) — ( 4,091 )

Balances at May 31, 2021

Balances at August 31, 2021

$ ( 39,030 ) $ 8,002 $ ( 8,835 ) $ ( 39,863 )

Six Months Ended May 31, 2021 and 2020

Nine Months Ended August 31, 2021 and 2020

Unrecognized gains (losses) on

3 unchanged sentences

Foreign currency translation

adjustments, net of taxes

gains (losses), net of taxes

Balance, November 30, 2019 $ ( 29,940 ) $ 17,523 $ ( 37,665 ) $ ( 50,082 )

3 unchanged sentences

— ( 14,354 ) — ( 14,354 )

Balances at May 31, 2020

Balances at August 31, 2020

$ ( 38,819 ) $ 30,029 $ ( 1,772 ) $ ( 10,562 )

4 unchanged sentences

— ( 20,617 ) — ( 20,617 )

Balances at May 31, 2021

Balances at August 31, 2021

$ ( 39,030 ) $ 8,002 $ ( 8,835 ) $ ( 39,863 )

2 unchanged sentences

Restructuring:

The following table presents the activity related to liabilities for restructuring charges of previous acquisitions for the three and six months ended May 31, 2021 and 2020:

Three Months Ended May 31, 2021 and 2020

The following table presents the activity related to liabilities for restructuring charges of previous acquisitions for the three and nine months ended August 31, 2021 and 2020:

Three Months Ended August 31, 2021 and 2020

Restructuring costs

Severance and benefits Facility and exit costs Total

Accrued balance as of February 29, 2020 $ 1,753 $ 1,121 $ 2,874

Accrued balance as of May 31, 2020 $ 526 $ 10,548 $ 11,074

Additional (release of) accrual during the period ( 214 ) 336 122

Cash payments ( 219 ) ( 2,362 ) ( 2,581 )

Accrued balance as of August 31, 2020 $ 93 $ 8,522 $ 8,615

Accrued balance as of May 31, 2021 $ — $ 14,194 $ 14,194

Accrued balance as of February 28, 2021 $ — $ 15,806 $ 15,806

Release of accrual during the period — ( 410 ) ( 410 )

Additional accrual during the period — 62 62

Cash payments — ( 990 ) ( 990 )

Accrued balance as of May 31, 2021 $ — $ 14,194 $ 14,194

Six Months Ended May 31, 2021 and 2020

Accrued balance as of August 31, 2021 $ — $ 13,266 $ 13,266

Nine Months Ended August 31, 2021 and 2020

Restructuring costs

3 unchanged sentences

Cash payments ( 2,200 ) ( 6,093 ) ( 8,293 )

Accrued balance as of May 31, 2020 $ 526 $ 10,548 $ 11,074

Accrued balance as of August 31, 2020 $ 93 $ 8,522 $ 8,615

Accrued balance as of November 30, 2020 $ — $ 17,810 $ 17,810

1 unchanged sentence

Cash payments — ( 4,196 ) ( 4,196 )

Accrued balance as of May 31, 2021 $ — $ 14,194 $ 14,194

Accrued balance as of August 31, 2021 $ — $ 13,266 $ 13,266

NOTE 6— DERIVATIVE INSTRUMENTS:

12 unchanged sentences

dollars may hedge a portion of forecasted revenue or costs not denominated in the entities’ functional currencies.

These instruments mature at various dates through May 2023.

These instruments mature at various dates through August 2023.

Gains and losses on cash flow hedges are recorded in AOCI until the hedged item is recognized in earnings.

6 unchanged sentences

These contracts, which are not designated as hedging instruments, mature or settle within twelve months.

Derivatives that are not designated as hedging instruments are adjusted to fair value through earnings in the financial statement line item to which the derivative relates.

Derivatives that are not designated as

hedging instruments are adjusted to fair value through earnings in the financial statement line item to which the derivative relates.

Fair Values of Derivative Instruments in the Consolidated Balance Sheets

The fair values of the Company’s derivative instruments are disclosed in Note 7 and summarized in the table below:

Balance Sheet Line Item May 31, 2021 November 30, 2020

Balance Sheet Line Item August 31, 2021 November 30, 2020

Derivative instruments not designated as hedging instruments:

14 unchanged sentences

The following table shows the gains and losses, before taxes, of the Company’s derivative instruments designated as cash flow hedges and not designated as hedging instruments in other comprehensive income (“OCI”), and the consolidated statements of operations for the periods presented:

Locations of gain (loss) in income For the three months ended For the six months ended

May 31, 2021 May 31, 2020 May 31, 2021 May 31, 2020

Locations of gain (loss) in income Three Months Ended Nine Months Ended

August 31, 2021 August 31, 2020 August 31, 2021 August 31, 2020

Derivative instruments designated as cash flow hedges

Gains recognized in OCI:

(Losses) gains recognized in OCI:

Foreign exchange forward contracts $ ( 15,059 ) $ 34,764 $ ( 666 ) $ 35,795

5 unchanged sentences

Derivative instruments not designated as hedging instruments:

Gain recognized from foreign exchange forward contracts, net (1)

(Loss) gain recognized from foreign exchange forward contracts, net (1)

Other income (expense), net $ ( 13,388 ) $ 24,783 $ 4,653 $ 26,963

12 unchanged sentences

The following table summarizes the valuation of the Company’s investments and financial instruments that are measured at fair value on a recurring basis:

As of May 31, 2021 As of November 30, 2020

As of August 31, 2021 As of November 30, 2020

Fair value measurement category Fair value measurement category

9 unchanged sentences

Fair values of long-term foreign currency exchange contracts are measured using valuations based upon quoted prices for similar assets and liabilities in active markets and are valued by reference to similar financial instruments, adjusted for terms specific to the contracts.

The effect of nonperformance risk on the fair value of derivative instruments was not material as of May 31, 2021 and November 30, 2020.

The effect of nonperformance risk on the fair value of derivative instruments was not material as of August 31, 2021 and November 30, 2020.

The carrying values of term deposits with maturities less than one year, accounts receivable and accounts payable approximate fair value due to their short maturities and interest rates that are variable in nature.

The carrying values of the outstanding balance on the Term Loan under the Company’s Credit Facility and the outstanding balance on the Securitization Facility approximate their fair values since they bear interest rates that are similar to existing market rates.

During the three and six months ended May 31, 2021 and 2020, there were no transfers between the fair value measurement category levels.

During the three and nine months ended August 31, 2021 and 2020, there were no transfers between the fair value measurement category levels.

NOTE 8— BORROWINGS:

Borrowings consist of the following:

May 31, 2021 November 30, 2020

August 31, 2021 November 30, 2020

Credit Facility - current portion of Term Loan component $ — $ 33,750

Borrowings, current $ — $ 33,750

Credit Facility - Term Loan component $ 700,000 $ 866,250

8 unchanged sentences

The Credit Facility matures on November 30, 2025.

Beginning May 31, 2021, the outstanding principal amount of the Term Loan is payable in quarterly installments of $ 11,250 with the unpaid balance due in full on the maturity date.

Beginning May 31, 2021, the outstanding principal amount of the Term Loan was payable in quarterly installments of $ 11,250 with the unpaid balance due in full on the maturity date.

Concentrix may prepay the loans under the Credit Facility at any time without penalty, other than breakage fees.

During the three and six months ended May 31, 2021, the Company paid $ 150,000 and $ 200,000 of the principal balance on the Term Loan, respectively.

Concentrix may request, subject to obtaining commitments from any participating lenders and certain other conditions, incremental commitments to increase the amount of the Revolver or the Term Loan available under the Credit Facility in an aggregate principal amount equal to $ 450,000 , plus an additional amount, so long as after giving effect to the incurrence of such additional amount, the Company’s pro forma first lien leverage ratio (as defined in the Credit Facility) would not exceed 3.00 to 1.00.

During the nine months ended August 31, 2021, the Company paid $ 200,000 of the principal balance on the Term Loan.

Concentrix may request, subject to obtaining commitments from any participating lenders and certain other conditions, incremental commitments to increase the amount of the Revolver or the Term Loan available under the Credit Facility in an aggregate principal amount of up to $ 450,000 , plus an additional amount, so long as after giving effect to the incurrence of such additional amount, the Company’s pro forma first lien leverage ratio (as defined in the Credit Facility) would not exceed 3.00 to 1.00.

Obligations under the Credit Facility are secured by substantially all of the assets of Concentrix and certain of its U.S.

4 unchanged sentences

Commitments under the Revolver are subject to a commitment fee on the unused portion of the Revolver, which fee ranges from 25 to 45 basis points, based on Concentrix’ consolidated leverage ratio.

of assets, repurchase or redemption of capital stock, making certain investments, entering into certain transactions with affiliates or changing the nature of their business.

The Credit Facility contains various loan covenants that restrict the ability of Concentrix and its subsidiaries to take certain actions, including, incurrence of indebtedness, creation of liens, mergers or consolidations, dispositions of assets, repurchase or redemption of capital stock, making certain investments, entering into certain transactions

with affiliates or changing the nature of their business.

In addition, the Credit Facility contains financial covenants that require Concentrix to maintain at the end of each fiscal quarter, (i) a consolidated leverage ratio (as defined in the Credit Facility) not to exceed 3.75 to 1.0 and (ii) a consolidated interest coverage ratio (as defined in the Credit Facility) equal to or greater than 3.00 to 1.0.

The Credit Facility also contains various customary events of default, including payment defaults, defaults under certain other indebtedness, and a change of control of Concentrix.

At May 31, 2021 and November 30, 2020, no amounts were outstanding under the Revolver.

At August 31, 2021 and November 30, 2020, no amounts were outstanding under the Revolver.

Securitization Facility

13 unchanged sentences

Covenant compliance

As of May 31, 2021, Concentrix was in compliance with all covenants for the above arrangements.

As of August 31, 2021, Concentrix was in compliance with all covenants for the above arrangements.

NOTE 9— EARNINGS PER SHARE:

Basic and diluted earnings per share ( “ EPS ” ) are computed using the two-class method, which is an earnings allocation formula that determines EPS for each class of common stock and participating securities, according to dividends declared and participation rights in undistributed earnings.

Basic and diluted earnings per common share ( “ EPS ” ) are computed using the two-class method, which is an earnings allocation formula that determines EPS for each class of common stock and participating securities, according to dividends declared and participation rights in undistributed earnings.

The Company’s restricted stock awards are considered participating securities because they are legally issued at the grant date and holders have a non-forfeitable right to receive dividends.

Basic EPS is generally computed by dividing net income attributable to common stockholders by the weighted-average shares of common stock outstanding during the period.

Diluted earnings per share is generally computed by dividing net income attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period, increased to include the number of shares of common stock that would have been outstanding had potential dilutive shares of common stock been issued.

Basic EPS is generally computed by dividing net income attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period.

Diluted earnings per common share is generally computed by dividing net income attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period, increased to include the number of shares of common stock that would have been outstanding had potential dilutive shares of common stock been issued.

The dilutive effect of restricted stock units and stock options are reflected in diluted net income per share by applying the treasury stock method.

There were no Concentrix equity awards outstanding prior to the spin-off, thus the computation of basic and diluted earnings per common share for all prior periods disclosed is calculated using the shares issued in connection with the spin-off of 51.6 million shares.

Three Months Ended Six Months Ended

May 31, 2021 May 31, 2020 May 31, 2021 May 31, 2020

There were no Concentrix equity awards outstanding prior to the spin-off, thus the computation of basic and diluted earnings per common share for all prior year periods disclosed is calculated using the shares issued in connection with the spin-off of 51.6 million shares.

Three Months Ended Nine Months Ended

August 31, 2021 August 31, 2020 August 31, 2021 August 31, 2020

Basic earnings per common share:

19 unchanged sentences

In the following table, the Company’s revenue is disaggregated by primary industry verticals:

Three Months Ended Six Months Ended

May 31, 2021 May 31, 2020 May 31, 2021 May 31, 2020

Three Months Ended Nine Months Ended

August 31, 2021 August 31, 2020 August 31, 2021 August 31, 2020

Industry vertical:

19 unchanged sentences

On December 1, 2020, in connection with the spin-off, the Company became an independent publicly-traded company.

The following table presents the Company’s related party transactions with SYNNEX for the three and six months ended May 31, 2020:

Three Months Ended Six Months Ended

The following table presents the Company’s related party transactions with SYNNEX for the three and nine months ended August 31, 2020:

August 31, 2020

Three Months Ended Nine Months Ended

Revenue from customer experience services to former parent $ 5,273 $ 15,371

Interest expense on borrowings from former parent

13,496 31,859

Interest income on borrowings made to former parent

11 unchanged sentences

legal entities are covered by government mandated defined contribution plans.

During the three and six months ended May 31, 2021, the Company contributed $ 18,967 and $ 39,141 , respectively, to defined contribution plans.

During the three and six months ended May 31, 2020, the Company contributed $ 14,962 and $ 30,438 , respectively, to defined contribution plans.

During the three and nine months ended August 31, 2021, the Company contributed $ 27,503 and $ 66,644 , respectively, to defined contribution plans.

During the three and nine months ended August 31, 2020, the Company contributed $ 17,927 and $ 48,365 , respectively, to defined contribution plans.

Defined Benefit Plans

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The qualified portion of the cash balance plan has been funded through contributions made to a trust fund.

The plan assumptions are evaluated annually and are updated as deemed necessary.

Net benefit costs related to defined benefit plans were $ 3,372 and $ 6,683 , during the three and six months ended May 31, 2021, respectively.

Net benefit costs related to defined benefit plans were $ 2,665 and $ 5,941 , during the three and six months ended May 31, 2020, respectively.

On an aggregate basis, the plans were underfunded by $ 127,689 and $ 134,399 at May 31, 2021 and November 30, 2020, respectively.

The plan valuation assumptions are evaluated annually and are updated as deemed necessary.

Net benefit costs related to defined benefit plans were $ 6,288 and $ 12,971 , during the three and nine months ended August 31, 2021, respectively.

Net benefit costs related to defined benefit plans were $ 3,875 and $ 9,816 , during the three and nine months ended August 31, 2020, respectively.

On an aggregate basis, the plans were underfunded by $ 127,173 and $ 134,399 at August 31, 2021 and November 30, 2020, respectively.

NOTE 13— INCOME TAXES:

Income taxes consist of current and deferred tax expense resulting from income earned in domestic and international jurisdictions.

For the three and six months ended May 31, 2020, although the Company was included in the consolidated tax returns of SYNNEX in certain jurisdictions, the Company’s tax provision was recorded as if Concentrix had filed its taxes on a stand-alone basis.

As a result, Concentrix calculated a hypothetical tax as part of the SYNNEX consolidated group, which resulted in an expense adjustment to increase the income tax provision by $ 4,298 and $ 6,051 , respectively, for the three and six months ended May 31, 2020.

For the three and nine months ended August 31, 2020, although the Company was included in the consolidated tax returns of SYNNEX in certain jurisdictions, the Company’s tax provision was recorded as if Concentrix had filed its taxes on a stand-alone basis.

As a result, Concentrix calculated a hypothetical tax as part of the SYNNEX consolidated group, which resulted in an expense adjustment to increase the income tax provision by $ 3,536 and $ 9,587 , respectively, for the three and nine months ended August 31, 2020.

The offset to the hypothetical tax expense was reflected in parent company investment, a component of equity in the Company’s consolidated balance sheet prior to the spin-off.

The effective tax rates for the three and six months ended May 31, 2021 and 2020 were impacted by the geographic mix of worldwide income and certain discrete items, which included an additional expense of $ 9,247 in the second quarter of 2021 related to the change in our indefinite reinvestment assertion for CIS.

The liability for unrecognized tax benefits was $ 63,054 and $ 62,315 at May 31, 2021 and November 30, 2020, respectively, and is included in other long-term liabilities in the consolidated balance sheets.

As of May 31, 2021 and November 30, 2020, the total amount of unrecognized tax benefits that would affect income tax expense if recognized in the consolidated financial statements was $ 55,561 and $ 54,910 , respectively.

The effective tax rates for the three and nine months ended August 31, 2021 and 2020 were impacted by the geographic mix of worldwide income and certain discrete items, which included an expense related to the sale of CIS of $ 3,745 and $ 12,991 for the three and nine months ended August 31, 2021.

The liability for unrecognized tax benefits was $ 62,246 and $ 62,315 at August 31, 2021 and November 30, 2020, respectively, and is included in other long-term liabilities in the consolidated balance sheets.

As of August 31, 2021 and November 30, 2020, the total amount of unrecognized tax benefits that would affect income tax expense if recognized in the consolidated financial statements was $ 54,752 and $ 54,910 , respectively.

This amount includes net interest and penalties of $ 14,556 and $ 14,402 for the respective periods.

5 unchanged sentences

The following table presents the various components of lease costs:

Three Months Ended Six Months Ended

May 31, 2021 May 31, 2020 May 31, 2021 May 31, 2020

Three Months Ended Nine Months Ended

August 31, 2021 August 31, 2020 August 31, 2021 August 31, 2020

Operating lease cost $ 50,340 $ 55,682 $ 152,903 $ 165,884

Short-term least cost 3,819 2,986 7,527 6,267

Short-term lease cost 4,205 1,624 11,732 7,891

Variable lease cost 9,774 11,078 29,908 28,965

1 unchanged sentence

Total operating lease cost $ 63,951 $ 68,332 $ 193,284 $ 202,554

The following table presents a maturity analysis of expected undiscounted cash flows for operating leases on an annual basis for the next five years and thereafter as of May 31, 2021:

The following table presents a maturity analysis of expected undiscounted cash flows for operating leases on an annual basis for the next five years and thereafter as of August 31, 2021:

Fiscal Years Ending November 30,

2021 (remaining six months) $ 97,562

2021 (remaining three months) $ 49,030

Thereafter 45,573

4 unchanged sentences

The following amounts were recorded in the consolidated balance sheets related to the Company’s operating leases:

May 31, 2021 November 30, 2020

August 31, 2021 November 30, 2020

Operating lease ROU assets Other assets, net $ 499,111 $ 506,368

3 unchanged sentences

Cash payments related to variable lease costs and short-term leases are not included in the measurement of operating lease liabilities, and, as such, are excluded from the amounts below:

Six Months Ended

May 31, 2021 May 31, 2020

Nine Months Ended

August 31, 2021 August 31, 2020

Cash paid for amounts included in the measurement of lease liabilities $ 157,920 $ 152,094

Non-cash ROU assets obtained in exchange for lease liabilities 116,085 66,664

The weighted-average remaining lease term and discount rate as of May 31, 2021 and November 30, 2020 were as follows:

May 31, 2021 November 30, 2020

The weighted-average remaining lease term and discount rate as of August 31, 2021 and November 30, 2020 were as follows:

August 31, 2021 November 30, 2020

Weighted-average remaining lease term (years) 3.89 3.97

10 unchanged sentences

The Company does not believe that the above commitments and contingencies will have a material adverse effect on the Company’s results of operations, financial position or cash flows.

NOTE 16— SUBSEQUENT EVENTS:

In September 2021, the Company’s Board of Directors (the “Board”) declared a quarterly dividend of $ 0.25 per share.

The dividend will be payable in cash on November 2, 2021, to shareholders of record at the close of business on October 22, 2021.

In addition, the Board has authorized the Company to purchase up to $ 500 million of the Company’s outstanding shares of common stock from time to time as market and business conditions warrant, including through open market purchases or Rule 10b5-1 trading plans.

The repurchase program has no termination date and may be suspended or discontinued at any time.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements