What changed in this filing

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Item 1. Financial Statements

2022-02-03 compared with 2021-11-04 · 395 added, 196 removed, 840 unchanged (41% of the section changed)

4 unchanged sentences

dollars, except share data)

September 30, 2021 June 30, 2021

December 31, 2021 June 30, 2021

ASSETS (unaudited)

Cash and cash equivalents $ 1,511,792 $ 1,607,306

Accounts receivable trade, net of allowance for credit losses of $ 18,643 as of September 30, 2021 and $ 22,151 as of June 30, 2021 (note 4)

Accounts receivable trade, net of allowance for credit losses of $ 15,849 as of December 31, 2021 and $ 22,151 as of June 30, 2021 (note 4)

427,020 438,547

31 unchanged sentences

Share capital and additional paid-in capital (note 13)

272,533,754 and 271,540,755 Common Shares issued and outstanding at September 30, 2021 and June 30, 2021, respectively;

271,006,308 and 271,540,755 Common Shares issued and outstanding at December 31, 2021 and June 30, 2021, respectively;

authorized Common Shares:

2 unchanged sentences

Retained earnings 2,174,467 2,153,326

Treasury stock, at cost ( 1,426,212 and 1,567,664 shares at September 30, 2021 and June 30, 2021, respectively)

Treasury stock, at cost ( 1,476,420 and 1,567,664 shares at December 31, 2021 and June 30, 2021, respectively)

( 67,966 ) ( 69,386 )

5 unchanged sentences

Related party transactions (note 24)

Subsequent events (note 25)

Subsequent event (note 25)

See accompanying Notes to Condensed Consolidated Financial Statements

OPEN TEXT CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)

(In thousands of U.S.

dollars, except share and per share data)

Three Months Ended September 30,

Three Months Ended December 31, Six Months Ended December 31,

2021 2020 2021 2020

Revenues (note 3):

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Provision for (recovery of) income taxes (note 15) 39,266 267,559 82,716 310,303

Net income for the period $ 131,966 $ 103,406

Net income (loss) for the period $ 88,336 $ ( 65,433 ) $ 220,302 $ 37,973

Net (income) loss attributable to non-controlling interests ( 38 ) ( 44 ) ( 89 ) ( 74 )

Net income attributable to OpenText $ 131,915 $ 103,376

Earnings per share—basic attributable to OpenText (note 23) $ 0.48 $ 0.38

Earnings per share—diluted attributable to OpenText (note 23) $ 0.48 $ 0.38

Net income (loss) attributable to OpenText $ 88,298 $ ( 65,477 ) $ 220,213 $ 37,899

Earnings (loss) per share—basic attributable to OpenText (note 23) $ 0.32 $ ( 0.24 ) $ 0.81 $ 0.14

Earnings (loss) per share—diluted attributable to OpenText (note 23) $ 0.32 $ ( 0.24 ) $ 0.81 $ 0.14

Weighted average number of Common Shares outstanding—basic (in '000's) 272,112 272,433 272,078 272,210

2 unchanged sentences

OPEN TEXT CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands of U.S.

Three Months Ended September 30,

Net income for the period $ 131,966 $ 103,406

Three Months Ended December 31, Six Months Ended December 31,

2021 2020 2021 2020

Net income (loss) for the period $ 88,336 $ ( 65,433 ) $ 220,302 $ 37,973

Other comprehensive income (loss)—net of tax:

1 unchanged sentence

Unrealized gain (loss) on cash flow hedges:

Unrealized gain (loss) - net of tax expense (recovery) effect of ($ 391 ) and $ 305 for the three months ended September 30, 2021 and 2020, respectively

Unrealized gain (loss) - net of tax expense (recovery) effect of $ 37 and $ 751 for the three months ended December 31, 2021 and 2020, respectively;

($ 354 ) and $ 1,056 for the six months ended December 31, 2021 and 2020, respectively

104 2,082 ( 982 ) 2,927

(Gain) loss reclassified into net income - net of tax (expense) recovery effect of ($ 103 ) and ($ 56 ) for the three months ended September 30, 2021 and 2020, respectively

(Gain) loss reclassified into net income (loss)- net of tax (expense) recovery effect of ($ 7 ) and ($ 227 ) for the three months ended December 31, 2021 and 2020, respectively;

($ 110 ) and ($ 283 ) for the six months ended December 31, 2021 and 2020, respectively

( 18 ) ( 628 ) ( 305 ) ( 784 )

Actuarial gain (loss) relating to defined benefit pension plans:

Actuarial gain (loss) - net of tax expense (recovery) effect of ($ 232 ) and ($ 916 ) for the three months ended September 30, 2021 and 2020, respectively

Actuarial gain (loss) - net of tax expense (recovery) effect of ($ 104 ) and ($ 441 ) for the three months ended December 31, 2021 and 2020, respectively;

($ 336 ) and ($ 1,357 ) for the six months ended December 31, 2021 and 2020, respectively

( 1,435 ) ( 981 ) ( 2,484 ) ( 2,686 )

Amortization of actuarial (gain) loss into net income - net of tax (expense) recovery effect of $ 68 and $ 87 for the three months ended September 30, 2021 and 2020, respectively

Amortization of actuarial (gain) loss into net income (loss)- net of tax (expense) recovery effect of $ 67 and $ 93 for the three months ended December 31, 2021 and 2020, respectively;

$ 135 and $ 180 for the six months ended December 31, 2021 and 2020, respectively

159 243 321 484

Total other comprehensive income (loss) net, for the period ( 22,537 ) 26,781 ( 34,889 ) 48,651

Total comprehensive income 119,614 125,276

Total comprehensive income (loss) 65,799 ( 38,652 ) 185,413 86,624

Comprehensive (income) loss attributable to non-controlling interests ( 38 ) ( 44 ) ( 89 ) ( 74 )

Total comprehensive income attributable to OpenText $ 119,563 $ 125,246

Total comprehensive income (loss) attributable to OpenText $ 65,761 $ ( 38,696 ) $ 185,324 $ 86,550

See accompanying Notes to Condensed Consolidated Financial Statements

3 unchanged sentences

dollars and shares)

Three Months Ended September 30, 2021

Three Months Ended December 31, 2021

Common Shares and Additional Paid in Capital Treasury Stock Retained

3 unchanged sentences

Shares Amount Shares Amount

Balance as of September 30, 2021 272,534 $ 1,991,719 ( 1,426 ) $ ( 63,477 ) $ 2,225,363 $ 53,886 $ 1,024 $ 4,208,515

Issuance of Common Shares

Under employee stock option plans 56 1,966 — — — — — 1,966

Under employee stock purchase plans 226 9,421 — — — — — 9,421

Share-based compensation — 14,409 — — — — — 14,409

Purchase of treasury stock — — ( 400 ) ( 19,593 ) — — — ( 19,593 )

Issuance of treasury stock — ( 15,104 ) 350 15,104 — — — —

Repurchase of Common Shares ( 1,810 ) ( 11,498 ) — — ( 79,536 ) — — ( 91,034 )

Dividends declared

($ 0.2209 per Common Share)

— — — — ( 59,658 ) — — ( 59,658 )

Other comprehensive income (loss) - net — — — — — ( 22,537 ) — ( 22,537 )

Net income for the period — — — — 88,298 — 38 88,336

Balance as of December 31, 2021 271,006 $ 1,990,913 ( 1,476 ) $ ( 67,966 ) $ 2,174,467 $ 31,349 $ 1,062 $ 4,129,825

Three Months Ended December 31, 2020

Common Shares and Additional Paid in Capital Treasury Stock Retained

Earnings Accumulated Other

Comprehensive

Income Non-Controlling Interests Total

Shares Amount Shares Amount

Balance as of September 30, 2020 272,174 $ 1,872,411 ( 1,394 ) $ ( 58,788 ) $ 2,213,053 $ 39,695 $ 1,349 $ 4,067,720

Issuance of Common Shares

Under employee stock option plans 213 6,893 — — — — — 6,893

Under employee stock purchase plans 202 7,260 — — — — — 7,260

Share-based compensation — 14,526 — — — — — 14,526

Issuance of treasury stock — ( 11,233 ) 293 11,233 — — — —

Dividends declared

($ 0.2008 per Common Share)

— — — — ( 54,500 ) — — ( 54,500 )

Other comprehensive income (loss) - net — — — — — 26,781 — 26,781

Net income (loss) for the period — — — — ( 65,477 ) — 44 ( 65,433 )

Balance as of December 31, 2020 272,589 $ 1,889,857 ( 1,101 ) $ ( 47,555 ) $ 2,093,076 $ 66,476 $ 1,393 $ 4,003,247

OPEN TEXT CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(In thousands of U.S.

dollars and shares)

Six Months Ended December 31, 2021

Common Shares and Additional Paid in Capital Treasury Stock Retained

Earnings Accumulated Other

Comprehensive

Income Non-Controlling Interests Total

Shares Amount Shares Amount

Balance as of June 30, 2021 271,541 $ 1,947,764 ( 1,568 ) $ ( 69,386 ) $ 2,153,326 $ 66,238 $ 1,511 $ 4,099,453

3 unchanged sentences

Share-based compensation — 28,343 — — — — — 28,343

Purchase of treasury stock — — ( 400 ) ( 19,593 ) — — — ( 19,593 )

Issuance of treasury stock — ( 21,013 ) 492 21,013 — — — —

Repurchase of Common Shares ( 1,810 ) ( 11,498 ) — — ( 79,536 ) — — ( 91,034 )

Dividends declared

4 unchanged sentences

Net income for the period — — — — 220,213 — 89 220,302

Balance as of September 30, 2021 272,534 $ 1,991,719 ( 1,426 ) $ ( 63,477 ) $ 2,225,363 $ 53,886 $ 1,024 $ 4,208,515

Three Months Ended September 30, 2020

Balance as of December 31, 2021 271,006 $ 1,990,913 ( 1,476 ) $ ( 67,966 ) $ 2,174,467 $ 31,349 $ 1,062 $ 4,129,825

Six Months Ended December 31, 2020

Common Shares and Additional Paid in Capital Treasury Stock Retained

5 unchanged sentences

Adoption of ASU 2016-13 - cumulative effect, net

— — — — ( 2,450 ) — — ( 2,450 )

Issuance of Common Shares

3 unchanged sentences

Purchase of treasury stock — — ( 965 ) ( 41,870 ) — — — ( 41,870 )

Issuance of treasury stock — ( 11,233 ) 293 11,233 — — — —

Dividends declared

3 unchanged sentences

Net income for the period — — — — 37,899 — 74 37,973

Balance as of September 30, 2020 272,174 $ 1,872,411 ( 1,394 ) $ ( 58,788 ) $ 2,213,053 $ 39,695 $ 1,349 $ 4,067,720

Balance as of December 31, 2020 272,589 $ 1,889,857 ( 1,101 ) $ ( 47,555 ) $ 2,093,076 $ 66,476 $ 1,393 $ 4,003,247

See accompanying Notes to Condensed Consolidated Financial Statements

2 unchanged sentences

(In thousands of U.S.

Three Months Ended September 30,

Six Months Ended December 31,

Cash flows from operating activities:

5 unchanged sentences

Amortization of debt issuance costs 2,454 2,254

Loss on extinguishment of debt 27,413 —

Loss on sale and write down of property and equipment 38 953

13 unchanged sentences

Additions of property and equipment ( 37,347 ) ( 22,956 )

Purchase of Zix Corporation, net of cash acquired ( 837,573 ) —

Purchase of Bricata Inc.

Purchase of XMedius — 444

Purchase of Dynamic Solutions Group Inc.

Other investing activities ( 3,271 ) ( 1,370 )

2 unchanged sentences

Proceeds from issuance of Common Shares from exercise of stock options and ESPP 45,688 29,177

Proceeds from long-term debt and Revolver 1,500,000 —

Repayment of long-term debt and Revolver ( 855,000 ) ( 605,000 )

Debt extinguishment costs (note 22) ( 24,969 ) —

Debt issuance costs ( 15,347 ) —

Repurchase of Common Shares ( 91,034 ) —

Purchase of treasury stock ( 19,593 ) ( 41,870 )

6 unchanged sentences

Cash, cash equivalents and restricted cash at end of the period $ 1,514,095 $ 1,503,678

OPEN TEXT CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands of U.S.

Reconciliation of cash, cash equivalents and restricted cash:

September 30, 2021 September 30, 2020

December 31, 2021 December 31, 2020

Cash and cash equivalents $ 1,511,792 $ 1,500,561

6 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three Months Ended September 30, 2021

For the Three and Six Months Ended December 31, 2021

(Tabular amounts in thousands of U.S.

4 unchanged sentences

(OT South Africa) and EC1 Pte.

(GXS Singapore), which as of September 30, 2021, were 70 % and 81 % owned, respectively, by OpenText.

(GXS Singapore), which as of December 31, 2021, were 70 % and 81 % owned, respectively, by OpenText.

All intercompany balances and transactions have been eliminated.

During the three months ended September 30, 2021, we made a final cash distribution of $ 0.4 million to the non-controlling interest holder in GXS Singapore, as part of the ongoing process to liquidate the subsidiary, which is expected to be complete by the end of Fiscal 2022.

During the first quarter of Fiscal 2022 (as defined below), we made a final cash distribution of $ 0.4 million to the non-controlling interest holder in GXS Singapore, as part of the ongoing process to liquidate the subsidiary, which is expected to be complete by the end of Fiscal 2022.

Throughout this Quarterly Report on Form 10-Q:

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As the impacts of the pandemic continue to evolve, estimates and assumptions about future events and their effects cannot be determined with certainty and therefore require increased judgment.

As of September 30, 2021, we have recorded certain estimates resulting from the pandemic, particularly with respect to the COVID-19 Restructuring Plan (as defined herein) and allowance for credit losses, based on management's estimates and assumptions utilizing the most currently available information.

As of December 31, 2021, we have recorded certain estimates resulting from the pandemic, particularly with respect to the COVID-19 Restructuring Plan (as defined herein) and allowance for credit losses, based on management's estimates and assumptions utilizing the most currently available information.

Such estimates may be subject to change particularly given the unprecedented nature of the COVID-19 pandemic.

6 unchanged sentences

Simplifying the Accounting for Income Taxes"

Business Combinations

In October 2021, the Financial Accounting Standards Board (FASB) issued ASU 2021-08 "Business Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers." This standard requires contract assets and contract liabilities acquired in a business combination to be recognized and measured as if the acquirer had originated the original contract in accordance with Accounting Standards Codification (ASC) Topic 606.

Previously, contract assets and contract liabilities were measured at fair value.

The standard is effective for us in our fiscal year ending June 30, 2024, with early adoption permitted.

We have elected to early adopt the ASU in our second quarter of Fiscal 2022.

Early adoption requires retrospective adoption to business combinations completed on or after July 1, 2021 and prospective adoption to business combinations that occur on or after the date of adoption.

There was no retrospective impact of early adoption as we did not have acquisitions in our first quarter of Fiscal 2022.

Acquisitions disclosed in note 19 "Acquisitions" are in accordance with ASU 2021-08.

The adoption will not have a material impact to our reported financial position, results of operations or cash flows.

NOTE 3— REVENUES

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The following tables disaggregate our revenue by significant geographic area, based on the location of our end customer, by type of performance obligation and timing of revenue recognition for the periods indicated:

Three Months Ended September 30,

Three Months Ended December 31, Six Months Ended December 31,

2021 2020 2021 2020

Total Revenues by Geography:

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deferred revenues) for the periods indicated below were as follows:

As of September 30, 2021 As of June 30, 2021

As of December 31, 2021 As of June 30, 2021

Short-term contract assets $ 22,336 $ 25,344

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We fulfill our obligations under a contract with a customer by transferring products and services in exchange for consideration from the customer.

During the three months ended September 30, 2021, we reclassified $ 8.1 million of contract assets to receivables as a result of the right to the transaction consideration becoming unconditional.

During the three months ended September 30, 2021 and 2020, respectively, there was no significant impairment loss recognized related to contract assets.

During the six months ended

December 31, 2021, we reclassified $ 18.3 million of contract assets to receivables as a result of the right to the transaction consideration becoming unconditional.

During the three and six months ended December 31, 2021 and 2020, respectively, there was no significant impairment loss recognized related to contract assets.

We recognize deferred revenue when we have received consideration or an amount of consideration is due from the customer for future obligations to transfer products or services.

Our deferred revenues primarily relate to customer support agreements which have been paid for by customers prior to the performance of those services.

The amount of revenue that was recognized during the three months ended September 30, 2021 that was included in the deferred revenue balances at June 30, 2021 was $ 359 million (three months ended September 30, 2020—$ 343 million).

The amount of revenue that was recognized during the six months ended December 31, 2021 that was included in the deferred revenue balances at June 30, 2021 was $ 630 million (six months ended December 31, 2020—$ 626 million).

Incremental Costs of Obtaining a Contract with a Customer

5 unchanged sentences

Impact of foreign exchange rate changes ( 1,517 )

Capitalized costs to obtain a contract as of September 30, 2021 $ 73,328

During the three months ended September 30, 2021 and 2020, respectively, there was no significant impairment loss recognized related to capitalized costs to obtain a contract.

Capitalized costs to obtain a contract as of December 31, 2021 $ 74,858

During the three and six months ended December 31, 2021 and 2020, respectively, there was no significant impairment loss recognized related to capitalized costs to obtain a contract.

Refer to note 9 "Prepaid Expenses and Other Assets" for additional information on incremental costs of obtaining a contract.

Transaction Price Allocated to the Remaining Performance Obligations

As of September 30, 2021, approximately $ 1.4 billion of revenue is expected to be recognized from remaining performance obligations on existing contracts.

As of December 31, 2021, approximately $ 1.5 billion of revenue is expected to be recognized from remaining performance obligations on existing contracts.

We expect to recognize approximately 46 % of this amount over the next 12 months and the remaining balance substantially over the next three years thereafter.

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Write-off / adjustments ( 4,105 )

Balance as of September 30, 2021 $ 18,643

Included in accounts receivable are unbilled receivables in the amount of $ 48.4 million as of September 30, 2021 (June 30, 2021—$ 51.4 million).

As of September 30, 2021, we have an allowance for credit losses of $ 0.6 million for contract assets (June 30, 2021—$ 0.4 million).

Balance as of December 31, 2021 $ 15,849

Included in accounts receivable are unbilled receivables in the amount of $ 62.3 million as of December 31, 2021 (June 30, 2021—$ 51.4 million).

As of December 31, 2021, we have an allowance for credit losses of $ 0.5 million for contract assets (June 30, 2021—$ 0.4 million).

For additional information on contract assets please see note 3 "Revenues".

NOTE 5— PROPERTY AND EQUIPMENT

As of September 30, 2021

As of December 31, 2021

Cost Accumulated

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The following illustrates the various components of operating lease costs for the period indicated:

Three Months Ended September 30,

Three Months Ended December 31, Six Months Ended December 31,

2021 2020 2021 2020

Operating lease cost $ 15,572 $ 15,720 $ 30,963 $ 31,262

4 unchanged sentences

The weighted average remaining lease term and discount rate for the periods indicated below were as follows:

As of September 30, 2021 As of June 30, 2021

As of December 31, 2021 As of June 30, 2021

Weighted-average remaining lease term 6.39 years 6.47 years

3 unchanged sentences

Cash payments made for variable lease cost and short-term lease are not included in the measurement of operating lease liabilities, and, as such, are excluded from the amounts below:

Three Months Ended September 30,

Six Months Ended December 31,

Cash paid for amounts included in the measurement of operating lease liabilities $ 35,046 $ 38,725

1 unchanged sentence

$ 20,416 $ 52,541

(1) The six months ended December 31, 2021 excludes the impact of $ 9.7 million of right of use assets obtained through the acquisition of Zix Corporation.

See note 19 "Acquisitions" for further details including expected finalization of preliminary purchase price allocation.

(2) The six months ended December 31, 2020 excludes the release of $ 19.1 million of lease liabilities relating to office space that was abandoned during the fourth quarter of Fiscal 2020 and has since been early terminated or assigned to a third party.

These recoveries were recorded in "Special charges (recoveries)" in the Condensed Consolidated Statements of Income (Loss).

Please see note 18 "Special Charges (Recoveries)".

Maturity of Lease Liabilities

The following table presents the future minimum lease payments under our operating leases liabilities as of September 30,

The following table presents the future minimum lease payments under our operating leases liabilities as of December 31,

Fiscal years ending June 30,

2022 (nine months ended) $ 49,273

2022 (six months ended) $ 36,636

Thereafter 85,374

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Balance as of June 30, 2021 $ 4,691,673

Acquisition of Zix Corporation (note 19) 508,026

Acquisition of Bricata Inc.

(note 19) 10,382

Impact of foreign exchange rate changes ( 15,003 )

Balance as of September 30, 2021 $ 4,686,907

Balance as of December 31, 2021 $ 5,195,078

NOTE 8— ACQUIRED INTANGIBLE ASSETS

As of September 30, 2021

As of December 31, 2021

Cost Accumulated Amortization Net

7 unchanged sentences

Total $ 2,390,263 $ ( 1,203,003 ) $ 1,187,260

The weighted average amortization periods for acquired technology and customer intangible assets are approximately five years and seven years , respectively.

Where applicable, the above balances as of December 31, 2021 have been reduced to reflect the impact of intangible assets where the gross cost has become fully amortized during the six months ended December 31, 2021.

The impact of this resulted in a reduction of $ 91.0 million to technology assets cost and accumulated amortization.

The weighted average amortization periods for acquired technology and customer intangible assets are approximately five years and eight years , respectively.

The following table shows the estimated future amortization expense for the fiscal years indicated.

1 unchanged sentence

Fiscal years ending June 30,

2022 (nine months ended) $ 293,631

2022 (six months ended) $ 210,184

Thereafter 222,270

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Prepaid expenses and other current assets:

As of September 30, 2021 As of June 30, 2021

As of December 31, 2021 As of June 30, 2021

Deposits and restricted cash $ 5,839 $ 3,027

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Other assets:

As of September 30, 2021 As of June 30, 2021

As of December 31, 2021 As of June 30, 2021

Deposits and restricted cash $ 7,938 $ 11,577

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These investments are accounted for using the equity method.

Our share of net income or losses based on our interest in these investments, which approximates fair value, is recorded as a component of Other income (expense), net in our Condensed Consolidated Statements of Income (see note 22 "Other Income (Expense), Net").

During the three months ended September 30, 2021, our share of income (loss) from these investments was $ 29.3 million (three months ended September 30, 2020—$ 6.2 million).

Our share of net income or losses based on our interest in these investments, which approximates fair value and subject to volatility based on market trends and business conditions, is recorded as a component of Other income (expense), net in our Condensed Consolidated Statements of Income (Loss) (see note 22 "Other Income (Expense), Net").

During the three and six months ended December 31, 2021, our share of income (loss) from these investments was $ 2.0 million and $ 31.4 million, respectively (three and six months ended December 31, 2020—$ 2.0 million and $ 8.3 million, respectively).

Prepaid expenses and other assets, both short-term and long-term, include advance payments on licenses that are being amortized over the applicable terms of the licenses and other miscellaneous assets.

1 unchanged sentence

Accounts payable and accrued liabilities:

As of September 30, 2021 As of June 30, 2021

As of December 31, 2021 As of June 30, 2021

Accounts payable—trade $ 63,321 $ 57,500

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Long-term accrued liabilities:

As of September 30, 2021 As of June 30, 2021

As of December 31, 2021 As of June 30, 2021

Amounts payable in respect of restructuring and other special charges $ 3,337 $ 4,359

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We are required to return certain of our leased facilities to their original state at the conclusion of our lease.

As of September 30, 2021, the present value of this obligation was $ 15.6 million (June 30, 2021—$ 15.7 million), with an undiscounted value of $ 16.3 million (June 30, 2021—$ 16.4 million).

As of December 31, 2021, the present value of this obligation was $ 15.2 million (June 30, 2021—$ 15.7 million), with an undiscounted value of $ 15.9 million (June 30, 2021—$ 16.4 million).

NOTE 11— LONG-TERM DEBT

As of September 30, 2021 As of June 30, 2021

As of December 31, 2021 As of June 30, 2021

Senior Notes 2031 $ 650,000 $ —

1 unchanged sentence

Senior Notes 2029 850,000 —

Senior Notes 2028 900,000 900,000

Senior Notes 2026 — 850,000

Term Loan B 962,500 967,500

2 unchanged sentences

Debt issuance costs (1)

( 41,012 ) ( 32,711 )

Total amount outstanding 4,221,488 3,588,859

3 unchanged sentences

Non-current portion of long-term debt $ 4,211,488 $ 3,578,859

(1) During the six months ended December 31, 2021, we recorded $ 17.3 million of debt issuance costs relating to the issuance of Senior Notes 2031 and Senior Notes 2029 (both defined below).

Additionally, upon redemption of Senior Notes 2026 (defined below), $ 6.2 million of unamortized debt issuance costs and ($ 3.8 ) million of the unamortized premium were included in the loss on debt extinguishment.

See note 22 "Other Income (Expense), Net".

Senior Unsecured Fixed Rate Notes

Senior Notes 2031

On November 24, 2021, OpenText Holdings, Inc.

a wholly-owned indirect subsidiary of the Company, issued $ 650 million in aggregate principal amount of 4.125 % Senior Notes due 2031 guaranteed by the Company (Senior Notes 2031) in an unregistered offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (Securities Act), and to certain non-U.S.

persons in offshore transactions pursuant to Regulation S under the Securities Act.

Senior Notes 2031 bear interest at a rate of 4.125 % per annum, payable semi-annually in arrears on June 1 and December 1, commencing on June 1, 2022.

Senior Notes 2031 will mature on December 1, 2031, unless earlier redeemed, in accordance with their terms, or repurchased.

For the three and six months ended December 31, 2021, we recorded interest expense of $ 2.7 million, respectively, relating to Senior Notes 2031.

Senior Notes 2030

On February 18, 2020, OpenText Holdings, Inc.

a wholly-owned indirect subsidiary of the Company, issued $ 900 million in aggregate principal amount of 4.125 % Senior Notes due 2030 guaranteed by the Company (Senior Notes 2030) in an unregistered offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (Securities Act), and to certain persons in offshore transactions pursuant to Regulation S under the Securities Act.

persons in offshore transactions pursuant to Regulation S under the Securities Act.

Senior Notes 2030 bear interest at a rate of 4.125 % per annum, payable semi-annually in arrears on February 15 and August 15, commencing on August 15, 2020.

Senior Notes 2030 will mature on February 15, 2030, unless earlier redeemed, in accordance with their terms, or repurchased.

For the three months ended September 30, 2021, we recorded interest expense of $ 9.3 million relating to Senior Notes 2030 (three months ended September 30, 2020—$ 9.2 million).

For the three and six months ended December 31, 2021, we recorded interest expense of $ 9.3 million and $ 18.6 million, respectively, relating to Senior Notes 2030 (three and six months ended December 31, 2020—$ 9.3 million and $ 18.5 million, respectively).

Senior Notes 2029

On February 18, 2020, we issued $ 900 million in aggregate principal amount of 3.875 % Senior Notes due 2028 (Senior Notes 2028) in an unregistered offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to certain persons in offshore transactions pursuant to Regulation S under the Securities Act.

On November 24, 2021, we issued $ 850 million in aggregate principal amount of 3.875 % Senior Notes due 2029 (Senior Notes 2029) in an unregistered offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to

certain non-U.S.

persons in offshore transactions pursuant to Regulation S under the Securities Act.

Senior Notes 2029 bear interest at a rate of 3.875 % per annum, payable semi-annually in arrears on June 1 and December 1, commencing on June 1, 2022.

Senior Notes 2029 will mature on December 1, 2029, unless earlier redeemed, in accordance with their terms, or repurchased.

For the three and six months ended December 31, 2021, we recorded interest expense of $ 3.3 million, respectively, relating to Senior Notes 2029.

Senior Notes 2028

persons in offshore transactions pursuant to Regulation S under the Securities Act.

Senior Notes 2028 bear interest at a rate of 3.875 % per annum, payable semi-annually in arrears on February 15 and August 15, commencing on August 15, 2020.

Senior Notes 2028 will mature on February 15, 2028, unless earlier redeemed, in accordance with their terms, or repurchased.

For the three months ended September 30, 2021, we recorded interest expense of $ 8.7 million relating to Senior Notes 2028 (three months ended September 30, 2020—$ 8.6 million).

For the three and six months ended December 31, 2021, we recorded interest expense of $ 8.7 million and $ 17.4 million, respectively, relating to Senior Notes 2028 (three and six months ended December 31, 2020—$ 8.7 million and $ 17.3 million, respectively).

Senior Notes 2026

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The outstanding aggregate principal amount of Senior Notes 2026, after taking into consideration the additional issuance, is $ 850 million.

For the three months ended September 30, 2021, we recorded interest expense of $ 12.5 million relating to Senior Notes 2026 (three months ended September 30, 2020—$ 12.5 million).

On December 9, 2021, we redeemed Senior Notes 2026 in full at a price equal to 102.9375 % of the principal amount plus accrued and unpaid interest to, but excluding, the redemption date.

A portion of the net proceeds from the offerings of Senior Notes 2029 and Senior Notes 2031 was used to redeem Senior Notes 2026.

Upon redemption, Senior Notes 2026 were cancelled and any obligation thereunder was extinguished.

The resulting loss of $ 27.4 million, consisting of $ 25.0 million relating to the early termination call premium, $ 6.2 million relating to unamortized debt issuance costs and ($ 3.8 ) million relating to unamortized premium, has been recorded as a component of Other income (expense), net in our Condensed Consolidated Statements of Income (Loss).

See note 22 "Other Income (Expense), Net".

For the three and six months ended December 31, 2021, we recorded interest expense of $ 9.4 million and $ 21.9 million, respectively, relating to Senior Notes 2026 (three and six months ended December 31, 2020—$ 12.5 million and $ 25.0 million, respectively).

On May 30, 2018, we refinanced our existing term loan facility, by entering into a new $ 1 billion term loan facility (Term Loan B), whereby we borrowed $ 1 billion on that day and repaid in full the loans under our prior $ 800 million term loan facility originally entered into on January 16, 2014.

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Borrowings under Term Loan B currently bear a floating rate of interest equal to 1.75 % plus LIBOR.

As of September 30, 2021, the outstanding balance on the Term Loan B bears an interest rate of 1.84 %.

As of December 31, 2021, the outstanding balance on the Term Loan B bears an interest rate of 1.84 %.

For more information regarding the impact of LIBOR, see "Stress in the global financial system may adversely affect our finances and operations in ways that may be hard to predict or to defend against" included within Part I, Item 1A, "Risk Factors" in our Annual Report on Form 10-K for Fiscal 2021.

Under Term Loan B, we must maintain a “consolidated net leverage” ratio of no more than 4 :1 at the end of each financial quarter.

Consolidated net leverage ratio is defined for this purpose as the proportion of our total debt reduced by unrestricted cash, including guarantees and letters of credit, over our trailing twelve months net income before interest, taxes, depreciation, amortization, restructuring, share-based compensation and other miscellaneous charges.

As of September 30, 2021, our consolidated net leverage ratio was 1.4 :1.

For the three months ended September 30, 2021, we recorded interest expense of $ 4.6 million relating to Term Loan B (three months ended September 30, 2020—$ 4.8 million).

amortization, restructuring, share-based compensation and other miscellaneous charges.

As of December 31, 2021, our consolidated net leverage ratio was 2.0 :1.

For the three and six months ended December 31, 2021, we recorded interest expense of $ 4.5 million and $ 9.1 million, respectively, relating to Term Loan B (three and six months ended December 31, 2020—$ 4.7 million and $ 9.5 million, respectively).

On October 31, 2019, we amended our committed revolving credit facility (the Revolver) to increase the total commitments under the Revolver from $ 450 million to $ 750 million as well as to extend the maturity from May 5, 2022 to October 31, 2024.

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As of September 30, 2021, we had no outstanding balance under the Revolver (June 30, 2021— nil ).

For the three months ended September 30, 2021 we did no t record any interest expense relating to the Revolver (three months ended September 30, 2020—$ 3.0 million relating to amounts previously drawn).

As of December 31, 2021, we had no outstanding balance under the Revolver (June 30, 2021— nil ).

For the three and six months ended December 31, 2021 we did no t record any interest expense relating to the Revolver (three and six months ended December 31, 2020—$ 0.6 million and $ 3.6 million, respectively, relating to amounts previously drawn).

Debt Issuance Costs and Premium on Senior Notes

Debt issuance costs relate primarily to costs incurred for the purpose of obtaining our credit facilities and issuing our Senior Notes 2026, Senior Notes 2028 and Senior Notes 2030 (collectively referred to as the Senior Notes) and are being amortized through interest expense over the respective terms of the Senior Notes and Term Loan B and the Revolver using the effective interest method.

The premium on Senior Notes 2026 represents the excess of the proceeds received over the face value of Senior Notes 2026.

This premium is amortized as a reduction to interest expense over the term of Senior Notes 2026 using the effective interest method.

Debt issuance costs relate primarily to costs incurred for the purpose of obtaining our credit facilities and issuing our Senior Notes 2026, Senior Notes 2028, Senior Notes 2029, Senior Notes 2030 and Senior Notes 2031 (collectively referred to as the Senior Notes) and are being amortized through interest expense over the respective terms of the Senior Notes and Term Loan B and the Revolver using the effective interest method.

The premium on Senior Notes 2026 represented the excess of the proceeds received over the face value of Senior Notes 2026.

This premium was amortized as a reduction to interest expense over the term of Senior Notes 2026 using the effective interest method.

The unamortized debt issuance costs and unamortized premium on Senior Notes 2026 were included in the loss on debt extinguishment.

See note 22 "Other Income (Expense), Net".

NOTE 12— PENSION PLANS AND OTHER POST RETIREMENT BENEFITS

The following table provides details of our defined benefit pension plans and long-term employee benefit obligations for Open Text Document Technologies GmbH (CDT), GXS GmbH (GXS GER), GXS Philippines, Inc.

(GXS PHP) and other plans as of September 30, 2021 and June 30, 2021:

As of September 30, 2021

(GXS PHP) and other plans as of December 31, 2021 and June 30, 2021:

As of December 31, 2021

Total benefit

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The net periodic cost of this pension plan is determined using the projected unit credit method and several actuarial assumptions, the most significant of which are the discount rate and estimated service costs.

Aside from an initial contribution which has a fair value of $ 0.04 million as of September 30, 2021, no additional contributions have been made since the inception of the plan.

Aside from an initial contribution which has a fair value of $ 0.04 million as of December 31, 2021, no additional contributions have been made since the inception of the plan.

The following are the details of the change in the benefit obligation for each of the above mentioned pension plans for the periods indicated:

As of September 30, 2021 As of June 30, 2021

As of December 31, 2021 As of June 30, 2021

CDT GXS GER GXS PHP Total CDT GXS GER GXS PHP Total

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The following are details of net pension expense relating to the following pension plans:

Three Months Ended September 30,

Three Months Ended December 31,

Pension expense:

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Net pension expense $ 321 $ 125 $ 609 $ 1,055 $ 431 $ 175 $ 512 $ 1,118

Service-related net periodic pension costs are recorded within operating expense and all other non-service related net periodic pension costs are classified under "Interest and other related expense, net" on our Condensed Consolidated Statements of Income.

In determining the fair value of the pension plan benefit obligations as of September 30, 2021 and June 30, 2021, respectively, we used the following weighted-average key assumptions:

As of September 30, 2021 As of June 30, 2021

Six Months Ended December 31,

Pension expense:

CDT GXS GER GXS PHP Total CDT GXS GER GXS PHP Total

Service cost $ 185 $ 85 $ 900 $ 1,170 $ 237 $ 104 $ 841 $ 1,182

Interest cost 221 157 293 671 253 182 195 630

Amortization of actuarial (gains) and losses 246 12 ( 46 ) 212 354 57 — 411

Net pension expense $ 652 $ 254 $ 1,147 $ 2,053 $ 844 $ 343 $ 1,036 $ 2,223

In determining the fair value of the pension plan benefit obligations as of December 31, 2021 and June 30, 2021, respectively, we used the following weighted-average key assumptions:

As of December 31, 2021 As of June 30, 2021

CDT GXS GER GXS PHP CDT GXS GER GXS PHP

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CDT GXS GER GXS PHP

2022 (nine months ended) $ 650 $ 781 $ 25

2022 (six months ended) $ 418 $ 502 $ 8

2023 912 993 255

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Cash Dividends

For the three months ended September 30, 2021, pursuant to the Company’s dividend policy, we declared total non-cumulative dividends of $ 0.2209 per Common Share in the aggregate amount of $ 59.9 million, which we paid during the same period (three months ended September 30, 2020—$ 0.1746 per Common Share, in the aggregate amount of $ 47.3 million).

For the three and six months ended December 31, 2021, pursuant to the Company’s dividend policy, we declared total non-cumulative dividends of $ 0.2209 and $ 0.4418 per Common Share, respectively, in the aggregate amount of $ 59.7 million and $ 119.5 million, respectively, which we paid during the same period (three and six months ended December 31, 2020—$ 0.2008 and $ 0.3754 per Common Share, respectively, in the aggregate amount of $ 54.5 million and $ 101.8 million, respectively).

Share Capital

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From time to time we may provide funds to an independent agent to facilitate repurchases of our Common Shares in connection with the settlement of awards under the Long-Term Incentive Plans (LTIP) or other plans.

During the three months ended September 30, 2021, we did not repurchase any of our Common Shares on the open market for potential reissuance under our LTIP or other plans as described below (three months ended September 30, 2020— 965,154 Common Shares, respectively, at a cost of $ 41.9 million).

During the three months ended September 30, 2021, we reissued 141,452 Common Shares from treasury stock in connection with the settlement of awards and other plans (three months ended September 30, 2020— 193,680 Common Shares).

During the three and six months ended December 31, 2021, we repurchased 400,000 Common Shares, respectively, on the open market at a cost of $ 19.6 million, respectively, for potential reissuance under our LTIP or other plans as described below (three and six months ended December 31, 2020— nil and 965,154 Common Shares, respectively, at a cost of nil and $ 41.9 million, respectively).

During the three and six months ended December 31, 2021, we reissued 349,792 and 491,244 Common Shares, respectively, from treasury stock in connection with the settlement of awards and other plans (three and six months ended December 31, 2020— 292,401 and 486,081 Common Shares, respectively).

Share Repurchase Plan

On November 5, 2020, the Board authorized a share repurchase plan (Repurchase Plan), pursuant to which we may purchase in open market transactions, from time to time over the 12 month period commencing November 12, 2020, up to an aggregate of $ 350 million of our Common Shares.

During the three months ended September 30, 2021, we did not repurchase any of our Common Shares under the Repurchase Plan.

Please see note 25 "Subsequent Events" for additional details.

On November 5, 2020, the Board authorized a share repurchase plan (Repurchase Plan), pursuant to which we were authorized to purchase in open market transactions, from time to time over the 12 month period commencing November 12, 2020, up to an aggregate of $ 350 million of our Common Shares.

On November 4, 2021, the Board authorized a share repurchase plan (Renewed Repurchase Plan), pursuant to which we may purchase in open market transactions, from time to time over the 12 month period commencing November 12, 2021, up to an aggregate of $ 350 million of our Common Shares.

During the three and six months ended December 31, 2021, we repurchased and cancelled 1,809,559 Common Shares, respectively, for $ 91.0 million, respectively (three and six months ended December 31, 2020— nil , respectively).

Share repurchases during the three and six months ended December 31, 2021 were completed under the share repurchase plans authorized on both November 5, 2020 and November 4, 2021.

Share-Based Payments

Total share-based compensation expense for the periods indicated below is detailed as follows:

Three Months Ended September 30,

Three Months Ended December 31, Six Months Ended December 31,

2021 2020 2021 2020

Stock options $ 4,748 $ 4,575 $ 9,015 $ 7,869

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Summary of Outstanding Stock Options

As of September 30, 2021, an aggregate of 8,084,264 options to purchase Common Shares were outstanding and an additional 10,484,700 options to purchase Common Shares were available for issuance under our stock option plans.

Our stock options generally vest over four years and expire between seven and ten years from the date of the grant.

As of December 31, 2021, an aggregate of 8,212,360 options to purchase Common Shares were outstanding and an additional 10,300,222 options to purchase Common Shares were available for issuance under our stock option plans.

options generally vest over four years and expire between seven and ten years from the date of the grant.

Currently we also have options outstanding that vest over five years , as well as options outstanding that vest based on meeting certain market conditions.

The exercise price of all our options is set at an amount that is not less than the closing price of our Common Shares on the NASDAQ on the trading day immediately preceding the applicable grant date.

A summary of activity under our stock option plans for the three months ended September 30, 2021 is as follows:

A summary of activity under our stock option plans for the six months ended December 31, 2021 is as follows:

Options Weighted-

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Forfeited or expired ( 352,755 ) 44.41

Outstanding at September 30, 2021 8,084,264 $ 42.10 5.03 $ 57,378

Exercisable at September 30, 2021 2,343,797 $ 36.22 3.59 $ 29,347

We estimate the fair value of stock options using the Black-Scholes option-pricing model or, where appropriate, the Monte Carlo pricing model, consistent with the provisions of Accounting Standards Codification (ASC) Topic 718, "Compensation—Stock Compensation" (Topic 718) and SEC Staff Accounting Bulletin No.

Outstanding at December 31, 2021 8,212,360 $ 42.52 4.87 $ 47,275

Exercisable at December 31, 2021 2,448,802 $ 36.40 3.41 $ 27,144

We estimate the fair value of stock options using the Black-Scholes option-pricing model or, where appropriate, the Monte Carlo pricing model, consistent with the provisions of ASC Topic 718, "Compensation—Stock Compensation" (Topic 718) and SEC Staff Accounting Bulletin No.

The option-pricing models require input of subjective assumptions, including the estimated life of the option and the expected volatility of the underlying stock over the estimated life of the option.

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For the periods indicated, the weighted-average fair value of options and weighted-average assumptions estimated under the Black-Scholes option-pricing model were as follows:

Three Months Ended September 30,

Three Months Ended December 31, Six Months Ended December 31,

2021 2020 2021 2020

Weighted–average fair value of options granted $ 9.73 $ 7.33 $ 9.74 $ 8.38

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Average exercise share price $ 51.61 $ 41.44 $ 52.35 $ 45.36

As of September 30, 2021, the total compensation cost related to the unvested stock option awards not yet recognized was $ 42.6 million, which will be recognized over a weighted-average period of 2.8 years.

As of December 31, 2021, the total compensation cost related to the unvested stock option awards not yet recognized was $ 40.8 million, which will be recognized over a weighted-average period of 2.8 years.

No cash was used by us to settle equity instruments granted under share-based compensation arrangements in any of the periods presented.

We have no t capitalized any share-based compensation costs as part of the cost of an asset in any of the periods presented.

The aggregate intrinsic value of options exercised during the three months ended September 30, 2021 was $ 15.4 million (three months ended September 30, 2020—$ 5.2 million).

For the three months ended September 30, 2021, cash in the amount of $ 27.3 million was received as the result of the exercise of options granted under share-based payment arrangements (three months ended September 30, 2020—$ 8.6 million).

The tax benefit realized by us during the three months ended September 30, 2021 from the exercise of options eligible for a tax deduction was $ 1.3 million (three months ended September 30, 2020—$ 0.7 million).

The aggregate intrinsic value of options exercised during the three and six months ended December 31, 2021 was $ 0.9 million and $ 16.3 million, respectively (three and six months ended December 31, 2020—$ 2.5 million and $ 7.7 million, respectively).

For the three and six months ended December 31, 2021, cash in the amount of $ 2.0 million and $ 29.3 million, respectively, was received as the result of the exercise of options granted under share-based payment arrangements (three and six months ended December 31, 2020—$ 6.9 million and $ 15.5 million, respectively).

The tax benefit realized by us during the three and six months ended December 31, 2021 from the exercise of options eligible for a tax deduction was $ 0.2 million and $ 1.5 million, respectively (three and six months ended December 31, 2020—$ 0.4 million and $ 1.1 million, respectively).

Long-Term Incentive Plans

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Stock options granted under the LTIPs have been measured using the Black-Scholes option-pricing model, consistent with Topic 718.

As of September 30, 2021, the total expected compensation cost related to the unvested LTIP awards not yet recognized was $ 59.7 million, which is expected to be recognized over a weighted average period of 2.3 years.

As of December 31, 2021, the total expected compensation cost related to the unvested LTIP awards not yet recognized was $ 50.9 million, which is expected to be recognized over a weighted average period of 2.1 years.

LTIP grants that have recently vested, or have yet to vest, are described below.

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The RSUs are employee service-based awards and vest over the life of the LTIP 2021.

We expect to settle the LTIP 2021 awards in stock during the second quarter of Fiscal 2022.

We settled the LTIP 2021 awards by issuing 349,792 Common Shares from treasury stock during the three months ended December 31, 2021, at a cost of $ 15.1 million.

Grants made in Fiscal 2020 under the LTIP (collectively referred to as LTIP 2022), consisting of PSUs and RSUs, took effect in Fiscal 2020 starting on August 5, 2019.

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In addition to the grants made in connection with the LTIP plans discussed above, from time to time, we may grant RSUs to certain employees in accordance with employment and other non-LTIP related agreements.

During the three months ended September 30, 2021, we did no t grant any such RSUs to employees (three months ended September 30, 2020— 484,956 RSUs).

During the three and six months ended December 31, 2021, we did no t grant any such RSUs to employees (three and six months ended December 31, 2020— nil and 484,956 RSUs, respectively).

RSUs vest over a specified contract date, typically three years from the respective date of grants.

As of September 30, 2021, the total expected compensation cost related to the unvested RSU awards not yet recognized was $ 6.6 million, which is expected to be recognized over a weighted average period of 1.5 years.

As of December 31, 2021, the total expected compensation cost related to the unvested RSU awards not yet recognized was $ 5.0 million, which is expected to be recognized over a weighted average period of 1.3 years.

We expect to settle RSU awards in stock.

During the three months ended September 30, 2021, we issued 141,452 Common Shares from treasury stock in connection with the settlement of vested RSUs, with a cost of $ 5.9 million (three months ended September 30, 2020— nil ).

During the three and six months ended December 31, 2021, we issued nil and 141,452 Common Shares, respectively, from treasury stock in connection with the settlement of vested RSUs, at a cost of nil and $ 5.9 million, respectively (three and six months ended December 31, 2020— nil ).

Deferred Share Units (DSUs)

During the three months ended September 30, 2021, we granted 5,335 DSUs, to certain non-employee directors (three months ended September 30, 2020— 3,667 DSUs).

During the three and six months ended December 31, 2021, we granted 68,312 and 73,647 DSUs, respectively, to certain non-employee directors (three and six months ended December 31, 2020— 72,903 and 76,570 DSUs, respectively).

The DSUs were issued under our Deferred Share Unit Plan.

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No DSUs are payable by us until the director ceases to be a member of the Board.

During the three months ended September 30, 2021, we did no t issue any of our Common Shares from treasury stock in connection with the settlement of vested DSUs (three months ended September 30, 2020— nil ).

During the three and six months ended December 31, 2021 and 2020, respectively, we did no t issue any of our Common Shares from treasury stock in connection with the settlement of vested DSUs.

Employee Stock Purchase Plan (ESPP)

Our ESPP offers employees a purchase price discount of 15 %.

During the three months ended September 30, 2021, 225,731 Common Shares were eligible for issuance to employees enrolled in the ESPP (three months ended September 30, 2020— 200,772 Common Shares).

During the three months ended September 30, 2021, cash in the amount of $ 9.4 million was received from employees relating to the ESPP (three months ended September 30, 2020—$ 7.2 million).

During the three and six months ended December 31, 2021, 172,782 and 398,513 Common Shares, respectively, were eligible for issuance to employees enrolled in the ESPP (three and six months ended December 31, 2020— 166,635 and 367,407 Common Shares, respectively).

During the three and six months ended December 31, 2021, cash in the amount of $ 7.0 million and $ 16.4 million, respectively, was received from employees relating to the ESPP (three and six months ended December 31, 2020—$ 6.5 million and $ 13.7 million, respectively).

NOTE 14— GUARANTEES AND CONTINGENCIES

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Payments due between

Total October 1, 2021 -

Total January 1, 2022 -

June 30, 2022 July 1, 2022 -

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Quarterly, we review the status of each significant legal matter and evaluate such matters to determine how they should be treated for accounting and disclosure purposes in accordance with the requirements of ASC Topic 450-20 "Loss Contingencies" (Topic 450-20).

Specifically, this evaluation process includes the centralized tracking and itemization of the status of all our disputes and litigation items, discussing the nature of any litigation and claim, including any dispute or claim that is reasonably likely to result in litigation, with relevant internal and external counsel, and assessing the progress of each matter in light of its merits and our experience with similar proceedings under similar circumstances.

that is reasonably likely to result in litigation, with relevant internal and external counsel, and assessing the progress of each matter in light of its merits and our experience with similar proceedings under similar circumstances.

If the potential loss from any claim or legal proceeding is considered probable and the amount can be reasonably estimated, we accrue a liability for the estimated loss in accordance with Topic 450-20.

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As part of its ongoing audit of our Canadian tax returns, the Canada Revenue Agency (CRA) has disputed our transfer pricing methodology used for certain intercompany transactions with our international subsidiaries and has issued notices of reassessment for Fiscal 2012, Fiscal 2013, Fiscal 2014, Fiscal 2015 and Fiscal 2016.

Assuming the utilization of available tax attributes (further described below), we estimate our potential aggregate liability, as of September 30, 2021, in connection with the CRA's reassessments for Fiscal 2012, Fiscal 2013, Fiscal 2014, Fiscal 2015 and Fiscal 2016, to be limited to penalties, interest and provincial taxes that may be due of approximately $ 72 million.

As of September 30, 2021, we have provisionally paid approximately $ 28 million in order to fully preserve our rights to object to the CRA's audit positions, being the minimum payment required under Canadian legislation while the matter is in dispute.

This amount is recorded within "Long-term income taxes recoverable" on the Condensed Consolidated Balance Sheets as of September 30, 2021.

Assuming the utilization of available tax attributes (further described below), we estimate our potential aggregate liability, as of December 31, 2021, in connection with the CRA's reassessments for Fiscal 2012, Fiscal 2013, Fiscal 2014, Fiscal 2015 and Fiscal 2016, to be limited to penalties, interest and provincial taxes that may be due of approximately $ 73 million.

As of December 31, 2021, we have provisionally paid approximately $ 33 million in order to fully preserve our rights to object to the CRA's audit positions, being the minimum payment required under Canadian legislation while the matter is in dispute.

This amount is recorded within "Long-term income taxes recoverable" on the Condensed Consolidated Balance Sheets as of December 31, 2021.

The notices of reassessment for Fiscal 2012, Fiscal 2013, Fiscal 2014, Fiscal 2015 and Fiscal 2016 would, as drafted, increase our taxable income by approximately $ 90 million to $ 100 million for each of those years, as well as impose a 10 % penalty on the proposed adjustment to income.

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Even if we are unsuccessful in challenging the CRA's reassessments to increase our taxable income for Fiscal 2012, Fiscal 2013, Fiscal 2014, Fiscal 2015 and Fiscal 2016, we have elective deductions available for those years (including carry-backs from later years) that would offset such increased amounts so that no additional cash tax would be payable, exclusive of any assessed penalties and interest, as described above.

The CRA is also currently auditing Fiscal 2017 on a basis that we strongly disagree with and will vigorously contest.

The CRA has also been auditing Fiscal 2017 on a basis that we strongly disagree with and will vigorously contest.

The focus of the CRA audit has been the valuation of certain intellectual property and goodwill when one of our subsidiaries continued into Canada from Luxembourg in July 2016.

In accordance with applicable rules, these assets were recognized for tax purposes at fair market value as of that time, which value was supported by an expert valuation prepared by an independent

leading accounting and advisory firm.

In accordance with applicable rules, these assets were recognized for tax purposes at fair market value as of that time, which value was supported by an expert valuation prepared by an independent leading accounting and advisory firm.

In conjunction with the Fiscal 2017 audit, the CRA issued a proposal letter dated April 7, 2021 (Proposal Letter) indicating to us that it proposes to reassess our Fiscal 2017 tax year to reduce the depreciable basis of these assets.

We are currently engaged in dialogue with the CRA regarding the 2017 audit and have made extensive submissions in support of our position.

CRA’s currently-proposed position for Fiscal 2017 relies in significant part on the application of its positions regarding our transfer pricing methodology that are the basis for its reassessment of our fiscal years 2012 to 2016 described above, and that we believe are without merit.

Other aspects of CRA’s currently-proposed position for Fiscal 2017 conflict with the expert valuation prepared by the independent leading accounting and advisory firm that was used to support our original filing position.

If the CRA determines to issue a notice of reassessment in respect of Fiscal 2017 on the basis of its position set forth in the Proposal Letter and we are ultimately unsuccessful in defending our position, the estimated impact of the proposed adjustment could result in us recording an income tax expense, with no immediate cash payment, to reduce the stated value of our deferred tax assets of up to approximately $ 470 million.

We have made extensive submissions in support of our position.

CRA’s position for Fiscal 2017 relies in significant part on the application of its positions regarding our transfer pricing methodology that are the basis for its reassessment of our fiscal years 2012 to 2016 described above, and that we believe are without merit.

Other aspects of CRA’s position for Fiscal 2017 conflict with the expert valuation prepared by the independent leading accounting and advisory firm that was used to support our original filing position.

Despite our submissions, on February 1, 2022, we were notified that the CRA issued a notice of reassessment in respect of Fiscal 2017 on the basis of its position set forth in the Proposal Letter.

If we are ultimately unsuccessful in defending our position, the estimated impact of the proposed adjustment could result in us recording an income tax expense, with no immediate cash payment, to reduce the stated value of our deferred tax assets of up to approximately $ 470 million.

Any such income tax expense could also have a corresponding cash tax impact that would primarily occur over a period of several future years based upon annual income realization in Canada.

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We are confident that our original tax filing positions were appropriate.

Accordingly, as of the date of this Quarterly Report on Form 10-Q, we have not recorded any accruals in respect of these reassessments or proposed reassessment in our Condensed Consolidated Financial Statements.

Accordingly, as of the date of this Quarterly Report on Form 10-Q, we have not recorded any

accruals in respect of these reassessments or proposed reassessment in our Condensed Consolidated Financial Statements.

The CRA is currently in preliminary stages of auditing Fiscal 2018 and Fiscal 2019.

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On November 20, 2020, the lead plaintiff filed a notice of appeal to the Court of Appeals for the First Circuit.

The appeal has been fully briefed and oral arguments before the Court of Appeals for the First Circuit were held on July 29, 2021.

The court’s decision on the appeal is expected in the coming months and the defendants remain confident in the District Court’s dismissal with prejudice of the Securities Actions.

On December 21, 2021, the First Circuit issued a decision reversing and remanding the Securities Actions to the district court for further proceedings.

The defendants remain confident in their position, believe the Securities Actions are without merit, and will continue to vigorously defend the matter.

Carbonite vs Realtime Data

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We continue to vigorously defend the matter, and the U.S.

District Court for the District of Massachusetts indicated, on September 30, 2021, that it will issue a claim construction

order before staying the case pending the appeal in the related case.

District Court for the District of Massachusetts recently issued a claim construction order.

We anticipate motion practice based upon the result of that order.

We have not accrued a loss contingency related to this matter because litigation related to a non-practicing entity is inherently unpredictable.

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Our effective tax rate represents the net effect of the mix of income earned in various tax jurisdictions that are subject to a wide range of income tax rates.

The effective tax rate decreased to a provision of 24.8 % for the three months ended September 30, 2021, compared to a provision of 29.2 % for the three months ended September 30, 2020.

Tax expense increased from $ 42.7 million during the three months ended September 30, 2020 to $ 43.5 million during the three months ended September 30, 2021.

This was primarily due to (i) an increase of $ 8.3 million relating to higher net income including the impact of foreign rates and (ii) an increase of $ 7.6 million related to tax benefits of internal reorganizations in Fiscal 2021 that did not reoccur in Fiscal 2022.

These were partially offset by (i) a decrease of $ 4.1 million related to the US Base Erosion Anti-Abuse Tax (US BEAT), (ii) a decrease of $ 3.5 million for changes in unrecognized tax benefits, (iii) a decrease of $ 3.2 million related to differences in tax filings being lower than estimates and (iv) a decrease of $ 1.2 million related to permanent differences.

The effective tax rate decreased to a provision of 30.8 % for the three months ended December 31, 2021, compared to a provision of 132.4 % for the three months ended December 31, 2020.

Tax expense decreased from $ 267.6 million during the three months ended December 31, 2020 to $ 39.3 million during the three months ended December 31, 2021.

This was primarily due to (i) a decrease of $ 299.3 million related to Internal Revenue Service (IRS) settlements in Fiscal 2021, (ii) a decrease of $ 20.2 million relating to lower net income before taxes including the impact of foreign rates, (iii) a decrease of $ 7.3 million related to differences in tax filings being lower than estimates and (iv) a decrease of $ 6.0 million related to the US Base Erosion and Anti-Abuse Tax (US BEAT).

These were partially offset by (i) an increase of $ 93.4 million for changes in unrecognized tax

benefits and (ii) an increase of $ 4.9 million related to tax benefits of internal reorganizations in Fiscal 2021 that did not reoccur in Fiscal 2022.

The remainder of the difference was due to normal course movements and non-material items.

The effective tax rate decreased to a provision of 27.3 % for the six months ended December 31, 2021, compared to a provision of 89.1 % for the six months ended December 31, 2020.

Tax expense decreased from $ 310.3 million during the six months ended December 31, 2020 to $ 82.7 million during the six months ended December 31, 2021.

This was primarily due to (i) a decrease of $ 299.3 million related to IRS settlements in Fiscal 2021, (ii) a decrease of $ 12.0 million relating to lower net income before taxes including the impact of the foreign rates, (iii) a decrease of $ 10.5 million related to differences in tax filings being lower than estimates and (iv) a decrease of $ 10.1 million related to US BEAT.

These were partially offset by (i) an increase of $ 89.8 million for changes in unrecognized tax benefits and (ii) an increase of $ 12.5 million related to tax benefits of internal reorganizations in Fiscal 2021 that did not reoccur in Fiscal 2022.

The remainder of the difference was due to normal course movements and non-material items.

We recognize interest expense and penalties related to income tax matters in income tax expense.

For the three months ended September 30, 2021 and 2020, respectively, we recognized the following amounts as income tax-related interest expense and penalties:

Three Months Ended September 30,

For the three and six months ended December 31, 2021 and 2020, respectively, we recognized the following amounts as income tax-related interest expense and penalties:

Three Months Ended December 31, Six Months Ended December 31,

2021 2020 2021 2020

Interest expense (recoveries) $ 368 $ 41,558 $ 467 $ 44,107

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The following amounts have been accrued on account of income tax-related interest expense and penalties:

As of September 30, 2021 As of June 30, 2021

As of December 31, 2021 As of June 30, 2021

Interest expense accrued (1)

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(1) These balances are primarily included within "Long-term income taxes payable" within the Condensed Consolidated Balance Sheets.

We believe that it is reasonably possible that the gross unrecognized tax benefits, as of September 30, 2021, could decrease tax expense in the next 12 months by $ 3.7 million, relating primarily to the expiration of competent authority relief and tax years becoming statute barred for purposes of future tax examinations by local taxing jurisdictions.

We believe that it is reasonably possible that the gross unrecognized tax benefits, as of December 31, 2021, could decrease tax expense in the next 12 months by $ 4.2 million, relating primarily to the expiration of competent authority relief and tax years becoming statute barred for purposes of future tax examinations by local taxing jurisdictions.

Our four most significant tax jurisdictions are Canada, the United States, Luxembourg and Germany.

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The earliest fiscal years open for examination are 2012 for Germany, 2016 for the United States, 2015 for Luxembourg, and 2012 for Canada.

We are subject to tax audits in all major taxing jurisdictions in which we operate and currently have tax audits open in Canada, the United States, Germany, India, Austria, Italy, France, the Philippines and South Africa.

On a quarterly basis we assess the status of these examinations and the potential for adverse outcomes to determine the adequacy of the provision for income and other taxes.

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For more information relating to certain tax audits, please refer to note 14 "Guarantees and Contingencies".

As of September 30, 2021, we have recognized a provision of $ 27.2 million (June 30, 2021—$ 27.5 million) in respect of both additional foreign taxes or deferred income tax liabilities for temporary differences related to the undistributed earnings of certain non-United States subsidiaries and planned periodic repatriations from certain German subsidiaries, that will be subject to withholding taxes upon distribution.

As of December 31, 2021, we have recognized a provision of $ 28.0 million (June 30, 2021—$ 27.5 million) in respect of both additional foreign taxes or deferred income tax liabilities for temporary differences related to the undistributed earnings of certain non-United States subsidiaries and planned periodic repatriations from certain German subsidiaries, that will be subject to withholding taxes upon distribution.

We have not provided for additional foreign withholding taxes or deferred income tax liabilities related to undistributed earnings of all other non-Canadian subsidiaries, since such earnings are considered permanently invested in those subsidiaries or are not subject to withholding taxes.

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Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis:

Our financial assets and liabilities measured at fair value on a recurring basis consisted of the following types of instruments as of September 30, 2021 and June 30, 2021:

September 30, 2021 June 30, 2021

Our financial assets and liabilities measured at fair value on a recurring basis consisted of the following types of instruments as of December 31, 2021 and June 30, 2021:

December 31, 2021 June 30, 2021

Fair Market Measurements using:

September 30, 2021 Quoted prices

December 31, 2021 Quoted prices

(liabilities) Significant

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The fair value of our Senior Notes is determined based on observable market prices and categorized as a Level 2 measurement.

As of September 30, 2021, the fair value was $ 2.7 billion (June 30, 2021—$ 2.7 billion).

As of December 31, 2021, the fair value was $ 3.4 billion (June 30, 2021—$ 2.7 billion).

The carrying value of our other long-term debt facilities approximates the fair value since the interest rate is at market.

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If applicable, we will recognize transfers between levels within the fair value hierarchy at the end of the reporting period in which the actual event or change in circumstance occurs.

During the three months ended September 30, 2021 and 2020, respectively, we did not have any transfers between Level 1, Level 2 or Level 3.

During the three and six months ended December 31, 2021 and 2020, respectively, we did not have any transfers between Level 1, Level 2 or Level 3.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

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These assets and liabilities are recognized at fair value when they are deemed to be other-than-temporarily impaired.

During the three months ended September 30, 2021 and 2020, respectively, no indications of impairments were identified and therefore no fair value measurements were required.

During the three and six months ended December 31, 2021 and 2020, respectively, no indications of impairments were identified and therefore no fair value measurements were required.

NOTE 17— DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

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Accordingly, quarterly unrealized gains or losses on the effective portion of these forward contracts have been included within "Other Comprehensive Income (Loss), net".

The fair value of the contracts, as of September 30, 2021, is recorded within "Accounts payable and accrued liabilities" and represents the net loss before tax effect that is expected to be reclassified from accumulated other comprehensive income into earnings with the next twelve months.

As of September 30, 2021, the notional amount of forward contracts we held to sell U.S.

The fair value of the contracts, as of December 31, 2021, is recorded within "Accounts payable and accrued liabilities" and represents the net loss before tax effect that is expected to be reclassified from accumulated other comprehensive income into earnings with the next twelve months.

As of December 31, 2021, the notional amount of forward contracts we held to sell U.S.

dollars in exchange for Canadian dollars was $ 67.3 million (June 30, 2021—$ 66.9 million).

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Fair Value of Derivative Instruments in the Condensed Consolidated Balance Sheets (see note 16 "Fair Value Measurement")

As of September 30, 2021 As of June 30, 2021

As of December 31, 2021 As of June 30, 2021

Derivatives Balance Sheet Location Fair Value

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Foreign currency forward contracts designated as cash flow hedges Prepaid expenses and other current assets (Accounts payable and accrued liabilities) $ ( 620 ) $ 1,131

Effects of Derivative Instruments on Income and Other Comprehensive Income (OCI)

Three Months Ended September 30, 2021

Derivatives in Cash Flow Hedging Relationship Amount of Gain or (Loss) Recognized in OCI on Derivatives (Effective Portion) Location of Gain or (Loss)

Reclassified from Accumulated OCI into Income

(Effective Portion) Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income

Effects of Derivative Instruments on Income and Other Comprehensive Income (OCI) (Loss)

Three and Six Months Ended December 31, 2021

Derivatives in Cash Flow Hedging Relationship Amount of Gain or (Loss) Recognized in OCI (Loss) on Derivatives (Effective Portion) Location of Gain or (Loss)

Reclassified from Accumulated OCI into Income (Loss)

(Effective Portion) Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income (Loss)

(Effective Portion)

Three Months Ended December 31, 2021 Six Months Ended December 31, 2021 Three Months Ended December 31, 2021 Six Months Ended December 31, 2021

Foreign currency forward contracts $ 141 $ ( 1,336 ) Operating expenses $ 25 $ 415

Three Months Ended September 30, 2020

Derivatives in Cash Flow Hedging Relationship Amount of Gain or (Loss) Recognized in OCI on Derivatives (Effective Portion) Location of Gain or (Loss)

Reclassified from Accumulated OCI into Income

(Effective Portion) Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income

Three and Six Months Ended December 31, 2020

Derivatives in Cash Flow Hedging Relationship Amount of Gain or (Loss) Recognized in OCI (Loss) on Derivatives (Effective Portion) Location of Gain or (Loss)

Reclassified from Accumulated OCI into Income (Loss)

(Effective Portion) Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income (Loss)

(Effective Portion)

Three Months Ended December 31, 2020 Six Months Ended December 31, 2020 Three Months Ended December 31, 2020 Six Months Ended December 31, 2020

Foreign currency forward contracts $ 2,833 $ 3,983 Operating expenses $ 855 $ 1,067

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Special charges (recoveries) include costs and recoveries that relate to certain restructuring initiatives that we have undertaken from time to time under our various restructuring plans, as well as acquisition-related costs and other charges.

Three Months Ended September 30,

Three Months Ended December 31, Six Months Ended December 31,

2021 2020 2021 2020

COVID-19 Restructuring Plan $ ( 369 ) $ ( 11,285 ) $ ( 815 ) $ ( 7,734 )

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With respect to the COVID-19 Restructuring Plan, at the time of initial abandonment we assumed there would be no additional sublease income, lease assignments or early terminations from vacated facilities.

During the three months ended September 30, 2021, we recorded net recoveries of $ 0.4 million related to abandoned facilities and workforce reductions.

During the three months ended September 30, 2020, we recorded net charges of $ 3.0 million related to abandoned facilities and workforce reductions and $ 0.6 million associated with the write-off of fixed assets.

During the three and six months ended December 31, 2021, we recorded net recoveries of $ 0.4 million and $ 0.8 million, respectively, related to abandoned facilities and workforce reductions.

During the three and six months ended December 31, 2020, we recorded net recoveries of $ 13.6 million and $ 13.9 million, respectively, related to office space that was abandoned during the fourth quarter of Fiscal 2020 and has since been early terminated or assigned to a third party.

Included in these recoveries are $ 9.7 million and $ 10.1 million, respectively, related to the reversal of lease liabilities (see note 6 "Leases"), with the remainder related to the reversal of other facility charges.

Additionally, during the three and six months ended December 31, 2020, we incurred $ 2.3 million and $ 6.2 million, respectively, of charges related to abandoned facilities, workforce reductions and the write-off of fixed assets.

Since the inception of the plan, $ 43.9 million has been recorded within "Special charges (recoveries)" to date.

We do not expect to incur any further significant charges relating to this plan.

A reconciliation of the beginning and ending restructuring liability, which is included within "Accounts payable and accrued liabilities" in our Condensed Consolidated Balance Sheets, for the three months ended September 30, 2021 is shown below.

COVID-19 Restructuring Plan Workforce reduction Facility charges Total

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Foreign exchange and other non-cash adjustments ( 7 ) ( 337 ) ( 344 )

Balance payable as of September 30, 2021 $ 162 $ 3,114 $ 3,276

Balance payable as of December 31, 2021 $ 36 $ 2,715 $ 2,751

Fiscal 2020 Restructuring Plan

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The Fiscal 2020 Restructuring Plan charges relate to workforce reductions and facility costs, including the accelerated amortization associated with the abandonment of ROU assets, the write-off of fixed assets and other related variable lease and exit costs.

These charges require management to make certain judgments and estimates regarding the amount and timing of restructuring charges or recoveries.

These charges require management to make certain judgments and estimates regarding the

amount and timing of restructuring charges or recoveries.

Our estimated liability could change subsequent to its recognition, requiring adjustments to the expense and the liability recorded.

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With respect to the Fiscal 2020 Restructuring Plan, at the time of the initial abandonment we assumed there would be no additional sublease income, lease assignments or early terminations from vacated facilities.

During the three months ended September 30, 2021, we recorded net recoveries of $ 0.1 million related to abandoned facilities and workforce reductions.

During the three months ended September 30, 2020, we recorded net charges of $ 8.7 million related to abandoned facilities and workforce reductions.

During the three and six months ended December 31, 2021, we recorded net recoveries of $ 0.1 million respectively, related to abandoned facilities and workforce reductions.

During the three and six months ended December 31, 2020, we recorded net recoveries of $ 12.9 million and $ 13.0 million, respectively, related to office space that was abandoned during the fourth quarter of Fiscal 2020 and has since been early terminated or assigned to a third party.

Included in these recoveries are $ 8.8 million and $ 9.0 million, respectively, related to the reversal of lease liabilities (see note 6 "Leases"), with the remainder related to the reversal of other facility charges.

Additionally, during the three and six months ended December 31, 2020, we incurred $ 5.4 million and $ 14.2 million, respectively, of charges related to abandoned facilities, workforce reductions and the write-off of fixed assets.

Since the inception of the plan, $ 30.2 million has been recorded within "Special charges (recoveries)" to date.

We do not expect to incur any further significant charges relating to this plan.

Fiscal 2020 Restructuring Plan Workforce reduction Facility charges Total

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Foreign exchange and other non-cash adjustments ( 127 ) 33 ( 94 )

Balance payable as of September 30, 2021 $ 210 $ 1,749 $ 1,959

Balance payable as of December 31, 2021 $ 40 $ 1,710 $ 1,750

Acquisition-related costs

Acquisition-related costs, recorded within "Special charges (recoveries)" include direct costs of potential and completed acquisitions.

Acquisition-related costs for the three months ended September 30, 2021 were $ 0.7 million (three months ended September 30, 2020—$ 0.8 million).

Acquisition-related costs for the three and six months ended December 31, 2021 were $ 3.9 million and $ 4.7 million, respectively (three and six months ended December 31, 2020—$ 0.7 million and $ 1.4 million, respectively).

Other charges (recoveries)

For the three months ended September 30, 2021, "Other charges" includes $ 0.2 million relating to other miscellaneous charges (three months ended September 30, 2020—$ 0.1 million relating to other miscellaneous charges).

For the three months ended December 31, 2021, "Other charges" includes $ 2.0 million relating to pre-acquisition equity incentives, which upon acquisition were replaced by equivalent value cash settlements (see note 19 "Acquisitions") and $ 3.7 million relating to other miscellaneous charges.

For the six months ended December 31, 2021, "Other charges" includes $ 2.0 million relating to pre-acquisition equity incentives,which upon acquisition were replaced by equivalent value cash settlements (see note 19 "Acquisitions") and $ 3.9 million relating to other miscellaneous charges.

For the three and six months ended December 31, 2020.

"Other charges" includes $ 0.7 million and $ 0.8 million, respectively, relating to other miscellaneous charges.

NOTE 19— ACQUISITIONS

Fiscal 2022 and Fiscal 2021 Acquisitions

Fiscal 2022 Acquisitions

Acquisition of Zix Corporation

On December 23, 2021, we acquired all of the equity interest in Zix Corporation (Zix), a leader in software as a service (SaaS) based email encryption, threat protection and compliance cloud solutions for small and medium-sized businesses (SMB).

Total consideration for Zix was $ 896.0 million, comprised of $ 875.9 million paid in cash (inclusive of cash acquired) and $ 20.1 million, relating to the cash settlement of pre-acquisition vested share-based compensation, currently held back and unpaid in accordance with the purchase agreement.

In accordance with ASC Topic 805 "Business Combinations" (Topic 805), this acquisition was accounted for as a business combination.

We believe the acquisition increases our position in the data protection, threat management, email security and compliance solutions spaces.

The results of operations of Zix have been consolidated with those of OpenText beginning December 23, 2021.

Preliminary Purchase Price Allocation

The recognized amounts of identifiable assets acquired and liabilities assumed, based on their preliminary fair values as of December 23, 2021, are set forth below:

Current assets (inclusive of cash acquired of $ 38.3 million)

Non-current tangible assets 40,935

Intangible assets 374,600

Liabilities assumed ( 94,045 )

Total identifiable net assets 387,961

Goodwill 508,026

Net assets acquired $ 895,987

The goodwill of $ 508.0 million is primarily attributable to the synergies expected to arise after the acquisition.

There is $ 103.7 million of goodwill that is deductible for tax purposes.

The fair value of current assets acquired includes accounts receivable with a fair value of $ 19.2 million.

The gross amount receivable was $ 19.8 million, of which $ 0.6 million is expected to be uncollectible.

Acquisition-related costs for Zix included in "Special charges (recoveries)" in the Condensed Consolidated Financial Statements for the three and six months ended December 31, 2021 were $ 2.1 million, respectively.

Also included in "Special charges (recoveries)" for the three and six months ended December 31, 2021, were $ 2.0 million, respectively, in other charges related to pre-acquisition equity incentives, which upon acquisition were replaced by equivalent value cash settlements to be settled in accordance with the original vesting dates (see note 18 "Special Charges (Recoveries)." As of December 31, 2021, we expect $ 26.7 million to be settled in cash and recorded to "Special charges (recoveries)" primarily over the next two years .

The finalization of the above purchase price allocation is pending the finalization of the valuation of fair value for the assets acquired and liabilities assumed, including intangible assets and taxation-related balances as well as for potential unrecorded liabilities.

We expect to finalize this determination on or before our quarter ending December 31, 2022.

Since the date of acquisition, the acquisition had no significant impact on revenues and net earnings for the three and six months ended December 31, 2021.

Pro forma results of operations for this acquisition have not been presented because they are not material to our consolidated results of operations.

Acquisition of Bricata Inc.

On November 24, 2021, we acquired all of the equity interest in Bricata Inc.

(Bricata) for $ 17.9 million.

In accordance with Topic 805, this acquisition was accounted for as a business combination.

We believe the acquisition strengthens our OpenText Security and Protection Cloud with Network Detection and Response technologies.

The results of operations of Bricata have been consolidated with those of OpenText beginning November 24, 2021.

Since the date of acquisition, the acquisition had no significant impact on revenues and net earnings for the three and six months ended December 31, 2021.

Pro forma results of operations for this acquisition have not been presented because they are not material to our consolidated results of operations.

NOTE 20— ACCUMULATED OTHER COMPREHENSIVE INCOME

Three Months Ended December 31, 2021

Foreign Currency Translation Adjustments Cash Flow Hedges Defined Benefit Pension Plans Accumulated Other Comprehensive Income

Balance as of September 30, 2021 $ 65,316 $ ( 543 ) $ ( 10,887 ) $ 53,886

Other comprehensive income (loss) before reclassifications, net of tax ( 21,347 ) 104 ( 1,435 ) ( 22,678 )

Amounts reclassified into net income, net of tax — ( 18 ) 159 141

Total other comprehensive income (loss) net, for the period ( 21,347 ) 86 ( 1,276 ) ( 22,537 )

Balance as of December 31, 2021 $ 43,969 $ ( 457 ) $ ( 12,163 ) $ 31,349

Six Months Ended December 31, 2021

Foreign Currency Translation Adjustments Cash Flow Hedges Defined Benefit Pension Plans Accumulated Other Comprehensive Income

Balance as of June 30, 2021 $ 75,408 $ 830 $ ( 10,000 ) $ 66,238

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Total other comprehensive income (loss) net, for the period ( 31,439 ) ( 1,287 ) ( 2,163 ) ( 34,889 )

Balance as of December 31, 2021 $ 43,969 $ ( 457 ) $ ( 12,163 ) $ 31,349

Three Months Ended December 31, 2020

Foreign Currency Translation Adjustments Cash Flow Hedges Defined Benefit Pension Plans Accumulated Other Comprehensive Income

Balance as of September 30, 2020 $ 55,613 $ 553 $ ( 16,471 ) $ 39,695

Other comprehensive income (loss) before reclassifications, net of tax 26,065 2,082 ( 981 ) 27,166

Amounts reclassified into net income (loss), net of tax — ( 628 ) 243 ( 385 )

Total other comprehensive income (loss) net, for the period 26,065 1,454 ( 738 ) 26,781

Balance as of December 31, 2020 $ 81,678 $ 2,007 $ ( 17,209 ) $ 66,476

Six Months Ended December 31, 2020

Foreign Currency Translation Adjustments Cash Flow Hedges Defined Benefit Pension Plans Accumulated Other Comprehensive Income

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Total other comprehensive income (loss) net, for the period 48,710 2,143 ( 2,202 ) 48,651

Balance as of September 30, 2020 $ 55,613 $ 553 $ ( 16,471 ) $ 39,695

Balance as of December 31, 2020 $ 81,678 $ 2,007 $ ( 17,209 ) $ 66,476

NOTE 21— SUPPLEMENTAL CASH FLOW DISCLOSURES

Three Months Ended September 30,

Six Months Ended December 31,

Cash paid during the period for interest $ 73,389 $ 75,433

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NOTE 22— OTHER INCOME (EXPENSE), NET

Three Months Ended September 30,

Three Months Ended December 31, Six Months Ended December 31,

2021 2020 2021 2020

Foreign exchange gains (losses) $ 192 $ 3,476 $ 543 $ ( 10 )

OpenText share in net income of equity investees (1)

2,042 2,034 31,357 8,255

Loss on debt extinguishment (2)

( 27,413 ) — ( 27,413 ) —

Other miscellaneous income (expense) 142 ( 259 ) 258 ( 111 )

Total other income (expense), net $ ( 25,037 ) $ 5,251 $ 4,745 $ 8,134

(1) Represents our share in net income of equity investees, which approximates fair value, based on our interest in certain investment funds in which we are a limited partner.

(1) Represents our share in net income of equity investees, which approximates fair value and subject to volatility based on market trends and business conditions, based on our interest in certain investment funds in which we are a limited partner.

Our interests in each of these investees range from 4 % to below 20 % and these investments are accounted for using the equity method (see note 9 "Prepaid Expenses and Other Assets" for more details).

NOTE 23— EARNINGS PER SHARE

Basic earnings per share are computed by dividing net income, attributable to OpenText, by the weighted average number of Common Shares outstanding during the period.

Diluted earnings per share are computed by dividing net income, attributable to OpenText, by the shares used in the calculation of basic earnings per share plus the dilutive effect of Common Share equivalents, such as stock options, using the treasury stock method.

Common Share equivalents are excluded from the computation of diluted earnings per share if their effect is anti-dilutive.

Three Months Ended September 30,

Basic earnings per share

Net income attributable to OpenText $ 131,915 $ 103,376

Basic earnings per share attributable to OpenText $ 0.48 $ 0.38

Diluted earnings per share

Net income attributable to OpenText $ 131,915 $ 103,376

Diluted earnings per share attributable to OpenText $ 0.48 $ 0.38

(2) On December 9, 2021, we redeemed Senior Notes 2026 in full, which resulted in a loss on debt extinguishment of $ 27.4 million.

Of this, $ 25.0 million related to the early termination call premium, $ 6.2 million related to unamortized debt issuance costs and ($ 3.8 ) million related to unamortized premium (see note 11 "Long-Term Debt" for more details).

NOTE 23— EARNINGS (LOSS) PER SHARE

Basic earnings (loss) per share are computed by dividing net income (loss), attributable to OpenText, by the weighted average number of Common Shares outstanding during the period.

Diluted earnings (loss) per share are computed by dividing net income (loss), attributable to OpenText, by the shares used in the calculation of basic earnings (loss) per share plus the dilutive effect of Common Share equivalents, such as stock options, using the treasury stock method.

Common Share equivalents are excluded from the computation of diluted earnings (loss) per share if their effect is anti-dilutive.

For periods in which we incur a net loss, our outstanding Common Share equivalents are not included in the calculation of diluted loss per share as their effect is anti-dilutive.

Accordingly, basic and diluted net loss per share for those periods are identical.

Three Months Ended December 31, Six Months Ended December 31,

2021 2020 2021 2020

Basic earnings (loss) per share

Net income (loss) attributable to OpenText $ 88,298 $ ( 65,477 ) $ 220,213 $ 37,899

Basic earnings (loss) per share attributable to OpenText $ 0.32 $ ( 0.24 ) $ 0.81 $ 0.14

Diluted earnings (loss) per share

Net income (loss) attributable to OpenText $ 88,298 $ ( 65,477 ) $ 220,213 $ 37,899

Diluted earnings (loss) per share attributable to OpenText $ 0.32 $ ( 0.24 ) $ 0.81 $ 0.14

Weighted-average number of shares outstanding (in '000's)

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Excluded as anti-dilutive (1)

(1) Represents options to purchase Common Shares excluded from the calculation of diluted earnings per share because the exercise price of the stock options was greater than or equal to the average price of the Common Shares during the period.

3,108 9,549 2,845 5,762

(1) Represents options to purchase Common Shares excluded from the calculation of diluted earnings (loss) per share because the exercise price of the stock options was greater than or equal to the average price of the Common Shares during the period.

NOTE 24— RELATED PARTY TRANSACTIONS

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and if applicable, the availability of other sources of comparable services or products.

During the three months ended September 30, 2021, Mr.

Stephen Sadler, a member of the Board of Directors, earned $ 4 thousand ( three months ended September 30, 2020 — $ 6 thousand) in consulting fees from OpenText for assistance with acquisition-related business activities.

During the six months ended December 31, 2021, Mr.

Stephen Sadler, a member of the Board of Directors, earned $ 0.4 million ( six months ended December 31, 2020 — $ 17 thousand) in consulting fees from OpenText for assistance with acquisition-related business activities.

Sadler abstained from voting on all transactions from which he would potentially derive consulting fees.

NOTE 25— SUBSEQUENT EVENTS

NOTE 25— SUBSEQUENT EVENT

Cash Dividends

As part of our quarterly, non-cumulative cash dividend program, we declared, on November 3, 2021, a dividend of $ 0.2209 per Common Share.

The record date for this dividend is December 3, 2021 and the payment date is December 22, 2021.

As part of our quarterly, non-cumulative cash dividend program, we declared, on February 2, 2022, a dividend of $ 0.2209 per Common Share.

The record date for this dividend is March 4, 2022 and the payment date is March 25, 2022.

Future declarations of dividends and the establishment of future record and payment dates are subject to the final determination and discretion of our Board.

Share Repurchase Plan

Subsequent to the end of the quarter, we announced on November 4, 2021 authorization of a share repurchase plan pursuant to which we may purchase in open market transactions, from time to time over the 12 month period commencing November 12, 2021, up to an aggregate of $ 350 million of our Common Shares on the NASDAQ Global Select Market, the Toronto Stock Exchange (as part of a Normal Course Issuer Bid) and/or other exchanges and alternative trading systems in Canada and/or the United States, if eligible, subject to applicable law and stock exchange rules (the Renewed Repurchase Plan).

The price that we have paid and will pay for Common Shares in open market transactions has been and will be the market price at the time of purchase or such other price as may be permitted by applicable law or stock exchange rules.

The Renewed Repurchase Plan has been and will be effected in accordance with Rule 10b-18 under the U.S.

Securities Exchange Act of 1934, as amended (Exchange Act).

Purchases made under the Renewed Repurchase Plan are subject to a limit of 13,638,008 shares (representing 5 % of the Company’s issued and outstanding Common Shares as of October 31, 2021).

All Common Shares purchased by us pursuant to the Renewed Repurchase Plan will be cancelled.

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