What changed in this filing

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Item 1. Financial Statements

2022-05-04 compared with 2022-02-03 · 287 added, 247 removed, 988 unchanged (35% of the section changed)

4 unchanged sentences

dollars, except share data)

December 31, 2021 June 30, 2021

March 31, 2022 June 30, 2021

ASSETS (unaudited)

Cash and cash equivalents $ 1,633,702 $ 1,607,306

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)

Accounts receivable trade, net of allowance for credit losses of $ 16,439 as of March 31, 2022 and $ 22,151 as of June 30, 2021 (note 4)

429,877 438,547

31 unchanged sentences

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

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

270,231,166 and 271,540,755 Common Shares issued and outstanding at March 31, 2022 and June 30, 2021, respectively;

authorized Common Shares:

2 unchanged sentences

Retained earnings 2,151,369 2,153,326

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

Treasury stock, at cost ( 2,776,420 and 1,567,664 shares at March 31, 2022 and June 30, 2021, respectively)

( 124,033 ) ( 69,386 )

8 unchanged sentences

OPEN TEXT CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands of U.S.

dollars, except share and per share data)

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

Three Months Ended March 31, Nine Months Ended March 31,

2022 2021 2022 2021

25 unchanged sentences

Income before income taxes 115,763 123,346 418,781 471,622

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

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

Provision for income taxes (note 15) 41,041 31,818 123,757 342,121

Net income for the period $ 74,722 $ 91,528 $ 295,024 $ 129,501

Net (income) loss attributable to non-controlling interests ( 41 ) ( 38 ) ( 130 ) ( 112 )

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

Net income attributable to OpenText $ 74,681 $ 91,490 $ 294,894 $ 129,389

Earnings per share—basic attributable to OpenText (note 23) $ 0.28 $ 0.34 $ 1.09 $ 0.47

Earnings per share—diluted attributable to OpenText (note 23) $ 0.28 $ 0.33 $ 1.08 $ 0.47

Weighted average number of Common Shares outstanding—basic (in '000's) 270,693 272,832 271,623 272,414

2 unchanged sentences

OPEN TEXT CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands of U.S.

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

Three Months Ended March 31, Nine Months Ended March 31,

2022 2021 2022 2021

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

Net income for the period $ 74,722 $ 91,528 $ 295,024 $ 129,501

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 $ 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

Unrealized gain (loss) - net of tax expense (recovery) effect of $ 233 and $ 246 for the three months ended March 31, 2022 and 2021, respectively;

($ 158 ) and $ 1,302 for the nine months ended March 31, 2022 and 2021, respectively

648 681 ( 334 ) 3,608

(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

(Gain) loss reclassified into net income - net of tax (expense) recovery effect of $ 79 and ($ 399 ) for the three months ended March 31, 2022 and 2021, respectively;

($ 24 ) and ($ 682 ) for the nine months ended March 31, 2022 and 2021, respectively

219 ( 1,108 ) ( 86 ) ( 1,892 )

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

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

Actuarial gain (loss) - net of tax expense (recovery) effect of ($ 579 ) and $ 944 for the three months ended March 31, 2022 and 2021, respectively;

($ 811 ) and ($ 413 ) for the nine months ended March 31, 2022 and 2021, respectively

( 2,033 ) 344 ( 4,517 ) ( 2,342 )

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

Amortization of actuarial (gain) loss into net income - net of tax (expense) recovery effect of $ 66 and $ 95 for the three months ended March 31, 2022 and 2021, respectively;

$ 134 and $ 275 for the nine months ended March 31, 2022 and 2021, respectively

156 249 477 733

Total other comprehensive income (loss) net, for the period ( 14,083 ) ( 12,402 ) ( 48,972 ) 36,249

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

Total comprehensive income 60,639 79,126 246,052 165,750

Comprehensive (income) loss attributable to non - controlling interests

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

( 41 ) ( 38 ) ( 130 ) ( 112 )

Total comprehensive income attributable to OpenText $ 60,598 $ 79,088 $ 245,922 $ 165,638

See accompanying Notes to Condensed Consolidated Financial Statements

3 unchanged sentences

dollars and shares)

Three Months Ended December 31, 2021

Three Months Ended March 31, 2022

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

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

Issuance of Common Shares

3 unchanged sentences

Purchase of treasury stock — — ( 1,300 ) ( 56,067 ) — — — ( 56,067 )

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

Repurchase of Common Shares ( 1,000 ) ( 6,381 ) — — ( 38,702 ) — — ( 45,083 )

4 unchanged sentences

Net income for the period — — — — 74,681 — 41 74,722

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

Balance as of March 31, 2022

270,231 $ 2,010,146 ( 2,776 ) $ ( 124,033 ) $ 2,151,369 $ 17,266 $ 1,103 $ 4,055,851

Three Months Ended March 31, 2021

Common Shares and Additional Paid in Capital Treasury Stock Retained

3 unchanged sentences

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

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

Issuance of Common Shares

2 unchanged sentences

Share-based compensation — 12,357 — — — — — 12,357

Purchase of treasury stock — — ( 490 ) ( 22,977 ) — — — ( 22,977 )

Issuance of treasury stock — ( 1,146 ) 23 1,146 — — — —

3 unchanged sentences

Other comprehensive income (loss) - net — — — — — ( 12,402 ) — ( 12,402 )

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

Net income for the period — — — — 91,490 — 38 91,528

Balance as of March 31, 2021

272,973 $ 1,915,759 ( 1,568 ) $ ( 69,386 ) $ 2,130,047 $ 54,074 $ 1,431 $ 4,031,925

OPEN TEXT CORPORATION

2 unchanged sentences

dollars and shares)

Six Months Ended December 31, 2021

Nine Months Ended March 31, 2022

Common Shares and Additional Paid in Capital Treasury Stock Retained

4 unchanged sentences

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

Issuance of Common Shares

11 unchanged sentences

Net income for the period — — — — 294,894 — 130 295,024

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

Balance as of March 31, 2022

270,231 $ 2,010,146 ( 2,776 ) $ ( 124,033 ) $ 2,151,369 $ 17,266 $ 1,103 $ 4,055,851

Nine Months Ended March 31, 2021

Common Shares and Additional Paid in Capital Treasury Stock Retained

4 unchanged sentences

Balance as of June 30, 2020

271,863 $ 1,851,777 ( 622 ) $ ( 23,608 ) $ 2,159,396 $ 17,825 $ 1,319 $ 4,006,709

Adoption of ASU 2016-13 - cumulative effect, net

11 unchanged sentences

Net income for the period — — — — 129,389 — 112 129,501

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

Balance as of March 31, 2021

272,973 $ 1,915,759 ( 1,568 ) $ ( 69,386 ) $ 2,130,047 $ 54,074 $ 1,431 $ 4,031,925

See accompanying Notes to Condensed Consolidated Financial Statements

2 unchanged sentences

(In thousands of U.S.

Six Months Ended December 31,

Nine Months Ended March 31,

Cash flows from operating activities:

46 unchanged sentences

Reconciliation of cash, cash equivalents and restricted cash:

December 31, 2021 December 31, 2020

March 31, 2022 March 31, 2021

Cash and cash equivalents $ 1,633,702 $ 1,475,626

6 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three and Six Months Ended December 31, 2021

For the Three and Nine Months Ended March 31, 2022

(Tabular amounts in thousands of U.S.

3 unchanged sentences

We wholly own all of our subsidiaries with the exception of Open Text South Africa Proprietary Ltd.

(OT South Africa) and EC1 Pte.

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

(OT South Africa), which as of March 31, 2022, was 70 % owned by OpenText.

All intercompany balances and transactions have been eliminated.

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.

Previously, our ownership in EC1 Pte.

(GXS Singapore) was 81 %.

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 process to liquidate the subsidiary.

During the three months ended March 31, 2022, the liquidation of GXS Singapore was completed.

Throughout this Quarterly Report on Form 10-Q:

24 unchanged sentences

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 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.

As of March 31, 2022, 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.

11 unchanged sentences

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.

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

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

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

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

4 unchanged sentences

cloud services and subscriptions, customer support, license, and professional service and other.

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 December 31, Six Months Ended December 31,

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

Three Months Ended March 31, Nine Months Ended March 31,

2022 2021 2022 2021

31 unchanged sentences

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

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

As of March 31, 2022

As of June 30, 2021

Short-term contract assets $ 25,481 $ 25,344

5 unchanged sentences

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

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.

During the nine months ended March 31, 2022, we reclassified $ 26.6 million of contract assets to receivables as a result of the right to the transaction consideration becoming unconditional.

During the three and nine months ended March 31, 2022 and 2021, 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 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).

Our deferred revenues primarily relate to cloud services and 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 nine months ended March 31, 2022 that was included in the deferred revenue balances at June 30, 2021 was $ 775 million (nine months ended March 31, 2021—$ 737 million).

Incremental Costs of Obtaining a Contract with a Customer

5 unchanged sentences

Impact of foreign exchange rate changes ( 2,312 )

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.

Capitalized costs to obtain a contract as of March 31, 2022

During the three and nine months ended March 31, 2022 and 2021, 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 December 31, 2021, approximately $ 1.5 billion of revenue is expected to be recognized from remaining performance obligations on existing contracts.

As of March 31, 2022, 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.

5 unchanged sentences

Write-off / adjustments ( 3,417 )

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).

Balance as of March 31, 2022

Included in accounts receivable are unbilled receivables in the amount of $ 52.4 million as of March 31, 2022 (June 30, 2021—$ 51.4 million).

As of March 31, 2022, we have an allowance for credit losses of $ 0.6 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 December 31, 2021

As of March 31, 2022

Cost Accumulated

26 unchanged sentences

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

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

Three Months Ended March 31, Nine Months Ended March 31,

2022 2021 2022 2021

5 unchanged sentences

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

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

As of March 31, 2022 As of June 30, 2021

Weighted-average remaining lease term 6.17 years 6.47 years

2 unchanged sentences

The following table presents supplemental information relating to cash flows arising from lease transactions.

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:

Six Months Ended December 31,

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

Nine Months Ended March 31,

Cash paid for amounts included in the measurement of operating lease liabilities $ 53,200 $ 56,645

1 unchanged sentence

$ 24,880 $ 59,762

(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.

(1) The nine months ended March 31, 2022 excludes the impact of $ 8.1 million of right of use (ROU) 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).

(2) The nine months ended March 31, 2021 excludes the release of $ 22.3 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.

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 December 31,

The following table presents the future minimum lease payments under our operating leases liabilities as of March 31, 2022:

Fiscal years ending June 30,

2022 (six months ended) $ 36,636

2022 (three months ended)

Thereafter 85,329

15 unchanged sentences

Impact of foreign exchange rate changes ( 22,184 )

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

Balance as of March 31, 2022

NOTE 8— ACQUIRED INTANGIBLE ASSETS

As of December 31, 2021

As of March 31, 2022

Cost Accumulated Amortization Net

7 unchanged sentences

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

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.

Where applicable, the above balances as of March 31, 2022 have been reduced to reflect the impact of intangible assets where the gross cost has become fully amortized during the nine months ended March 31, 2022.

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 weighted average amortization periods for acquired technology and customer intangible assets are approximately six 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 (six months ended) $ 210,184

2022 (three months ended)

Thereafter 191,714

2 unchanged sentences

Prepaid expenses and other current assets:

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

As of March 31, 2022 As of June 30, 2021

Deposits and restricted cash $ 6,101 $ 3,027

3 unchanged sentences

Other assets:

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

As of March 31, 2022 As of June 30, 2021

Deposits and restricted cash $ 7,264 $ 11,577

8 unchanged sentences

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 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).

During the three and nine months ended March 31, 2022, our share of income (loss) from these investments was $ 27.7 million and $ 59.1 million, respectively (three and nine months ended March 31, 2021—$ 11.8 million and $ 20.0 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 December 31, 2021 As of June 30, 2021

As of March 31, 2022 As of June 30, 2021

Accounts payable—trade $ 87,242 $ 57,500

7 unchanged sentences

Long-term accrued liabilities:

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

As of March 31, 2022 As of June 30, 2021

Amounts payable in respect of restructuring and other special charges $ 3,150 $ 4,359

4 unchanged sentences

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

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).

As of March 31, 2022, the present value of this obligation was $ 15.9 million (June 30, 2021—$ 15.7 million), with an undiscounted value of $ 16.6 million (June 30, 2021—$ 16.4 million).

NOTE 11— LONG-TERM DEBT

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

As of March 31, 2022 As of June 30, 2021

Senior Notes 2031 $ 650,000 $ —

13 unchanged sentences

Non-current portion of long-term debt $ 4,210,582 $ 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).

(1) During the nine months ended March 31, 2022, we recorded $ 17.2 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.

7 unchanged sentences

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.

For the three and nine months ended March 31, 2022, we recorded interest expense of $ 6.7 million and $ 9.4 million, respectively, relating to Senior Notes 2031.

Senior Notes 2030

4 unchanged sentences

Senior Notes 2030 will mature on February 15, 2030, 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 $ 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).

For the three and nine months ended March 31, 2022, we recorded interest expense of $ 9.3 million and $ 27.9 million, respectively, relating to Senior Notes 2030 (three and nine months ended March 31, 2021—$ 9.3 million and $ 27.8 million, respectively).

Senior Notes 2029

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.

1 unchanged sentence

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.

For the three and nine months ended March 31, 2022, we recorded interest expense of $ 8.2 million and $ 11.5 million, respectively, relating to Senior Notes 2029.

Senior Notes 2028

3 unchanged sentences

Senior Notes 2028 will mature on February 15, 2028, 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 $ 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).

For the three and nine months ended March 31, 2022, we recorded interest expense of $ 8.7 million and $ 26.1 million, respectively, relating to Senior Notes 2028 (three and nine months ended March 31, 2021—$ 8.7 million and $ 26.0 million, respectively).

Senior Notes 2026

1 unchanged sentence

Senior Notes 2026 bear interest at a rate of 5.875 % per annum, payable semi-annually in arrears on June 1 and December 1, commencing on December 1, 2016.

Senior Notes 2026 will mature on June 1, 2026, unless earlier redeemed, in accordance with their terms, or repurchased.

Senior Notes 2026 would have matured on June 1, 2026, unless earlier redeemed, in accordance with their terms, or repurchased.

On December 20, 2016, we issued an additional $ 250 million in aggregate principal amount by reopening our Senior Notes 2026 at an issue price of 102.75 %.

The additional notes have identical terms, are fungible with and are a part of a single series with the previously issued $ 600 million aggregate principal amount of Senior Notes 2026.

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

The outstanding aggregate principal amount of Senior Notes 2026, after taking into consideration the additional issuance, was $ 850 million as of December 9, 2021.

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.

1 unchanged sentence

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).

For the three and nine months ended March 31, 2022, we recorded interest expense of nil and $ 21.9 million, respectively, relating to Senior Notes 2026 (three and nine months ended March 31, 2021—$ 12.5 million and $ 37.5 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 December 31, 2021, the outstanding balance on the Term Loan B bears an interest rate of 1.84 %.

As of March 31, 2022, the outstanding balance on the Term Loan B bears an interest rate of 1.96 %.

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 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).

As of March 31, 2022, our consolidated net leverage ratio was 1.9 :1.

For the three and nine months ended March 31, 2022, we recorded interest expense of $ 4.5 million and $ 13.6 million, respectively, relating to Term Loan B (three and nine months ended March 31, 2021—$ 4.6 million and $ 14.1 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 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).

As of March 31, 2022, we had no outstanding balance under the Revolver (June 30, 2021— nil ).

For the three and nine months ended March 31, 2022 we did not record any interest expense relating to the Revolver (three and nine months ended March 31, 2021— nil and $ 3.6 million, respectively, relating to amounts previously drawn).

Debt Issuance Costs and Premium on Senior Notes

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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.

The unamortized debt issuance costs and unamortized premium on Senior Notes 2026 were included in the loss on debt extinguishment recognized during our second quarter of Fiscal 2022.

See note 22 “Other Income (Expense), Net”.

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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 December 31, 2021 and June 30, 2021:

As of December 31, 2021

(GXS PHP) and other plans as of March 31, 2022 and June 30, 2021:

As of March 31, 2022

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 December 31, 2021, no additional contributions have been made since the inception of the plan.

Aside from an initial contribution which has a fair value of $ 0.03 million as of March 31, 2022, 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 December 31, 2021 As of June 30, 2021

As of March 31, 2022 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 December 31,

Three Months Ended March 31,

Pension expense:

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Interest cost 105 75 164 344 125 90 104 319

Amortization of actuarial (gains) and losses 121 6 ( 23 ) 104 181 29 — 210

Amortization of actuarial (gains) losses 117 6 ( 22 ) 101 175 28 — 203

Net pension expense $ 310 $ 122 $ 662 $ 1,094 $ 417 $ 169 $ 508 $ 1,094

Six Months Ended December 31,

Nine Months Ended March 31,

Pension expense:

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Interest cost 326 232 457 1,015 378 272 299 949

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

Amortization of actuarial (gains) losses 363 18 ( 68 ) 313 529 85 — 614

Net pension expense $ 962 $ 376 $ 1,809 $ 3,147 $ 1,261 $ 512 $ 1,544 $ 3,317

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 (Loss).

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

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 March 31, 2022 and June 30, 2021, respectively, we used the following weighted-average key assumptions:

As of March 31, 2022 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 (six months ended) $ 418 $ 502 $ 8

2022 (three months ended) $ 203 $ 244 $ —

2023 886 965 116

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Total $ 10,083 $ 8,884 $ 3,602

Other plans include defined benefit pension plans that are offered by certain of our foreign subsidiaries.

Other plans include defined benefit pension plans that are offered or statutorily required by certain of our foreign subsidiaries.

Many of these plans were assumed through our acquisitions or are required by local regulatory requirements.

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Cash Dividends

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).

For the three and nine months ended March 31, 2022, pursuant to the Company’s dividend policy, we declared total non-cumulative dividends of $ 0.2209 and $ 0.6627 per Common Share, respectively, in the aggregate amount of $ 59.1 million and $ 178.6 million, respectively, which we paid during the same period (three and nine months ended March 31, 2021—$ 0.2008 and $ 0.5762 per Common Share, respectively, in the aggregate amount of $ 54.5 million and $ 156.3 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 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).

During the three and nine months ended March 31, 2022, we repurchased 1,300,000 and 1,700,000 Common Shares, respectively, on the open market at a cost of $ 56.1 million and $ 75.7 million, respectively, for potential settlement of awards under “Long-Term Incentive Plans” and “Restricted Share Units” or other plans as described below (three and nine months ended March 31, 2021— 489,934 and 1,455,088 Common Shares, respectively, at a cost of $ 23.0 million and $ 64.8 million, respectively).

During the three and nine months ended March 31, 2022, we reissued nil and 491,244 Common Shares, respectively, from treasury stock in connection with the settlement of awards and other plans (three and nine months ended March 31, 2021— 23,640 and 509,721 Common Shares, respectively).

Share Repurchase Plan

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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.

During the three and nine months ended March 31, 2022, we repurchased and cancelled 1,000,000 and 2,809,559 Common Shares, respectively, for $ 45.1 million and $ 136.1 million, respectively (three and nine months ended March 31, 2021— nil , respectively).

Share repurchases during the three and nine months ended March 31, 2022 were completed under our 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 December 31, Six Months Ended December 31,

Three Months Ended March 31, Nine Months Ended March 31,

2022 2021 2022 2021

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Summary of Outstanding Stock Options

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.

As of March 31, 2022, an aggregate of 9,009,585 options to purchase Common Shares were outstanding and an additional 9,450,921 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.

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 six months ended December 31, 2021 is as follows:

A summary of activity under our stock option plans for the nine months ended March 31, 2022 is as follows:

Options Weighted-

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Outstanding at June 30, 2021

8,113,574 $ 40.16 4.88 $ 86,297

Granted 2,427,510 48.69

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Forfeited or expired ( 626,854 ) 44.60

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

Outstanding at March 31, 2022

9,009,585 $ 42.73 4.88 $ 21,827

Exercisable at March 31, 2022

2,580,100 $ 36.87 3.27 $ 15,360

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.

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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 December 31, Six Months Ended December 31,

Three Months Ended March 31, Nine Months Ended March 31,

2022 2021 2022 2021

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Average exercise share price $ 44.45 $ 48.74 $ 48.69 $ 45.57

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.

As of March 31, 2022, the total compensation cost related to the unvested stock option awards not yet recognized was $ 44.2 million, which will be recognized over a weighted-average period of 2.9 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 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).

The aggregate intrinsic value of options exercised during the three and nine months ended March 31, 2022 was $ 0.4 million and $ 16.7 million, respectively (three and nine months ended March 31, 2021—$ 2.1 million and $ 9.8 million, respectively).

For the three and nine months ended March 31, 2022, cash in the amount of $ 1.9 million and $ 31.1 million, respectively, was received as the result of the exercise of options granted under share-based payment arrangements (three and nine months ended March 31, 2021—$ 8.3 million and $ 23.8 million, respectively).

The tax benefit realized by us during the three and nine months ended March 31, 2022 from the exercise of options eligible for a tax deduction was $ 0.1 million and $ 1.6 million, respectively (three and nine months ended March 31, 2021—$ 0.3 million and $ 1.4 million, respectively).

Long-Term Incentive Plans

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Target RSUs become vested when an eligible employee remains employed throughout the vesting period.

PSUs and RSUs granted under the LTIPs have been measured at fair value as of the effective date, consistent with Topic 718, and will be charged to share-based compensation expense over the remaining life of the plan.

PSUs and RSUs granted under the LTIP have been measured at fair value as of the effective date, consistent with Topic 718, and will be charged to share-based compensation expense over the remaining life of the plan.

We estimate the fair value of PSUs using the Monte Carlo pricing model and RSUs have been valued based upon their grant date fair value.

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

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.

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

As of March 31, 2022, the total expected compensation cost related to the unvested LTIP awards not yet recognized was $ 41.3 million, which is expected to be recognized over a weighted average period of 1.9 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 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.

We settled the LTIP 2021 awards by issuing 349,792 Common Shares from treasury stock during our second quarter in Fiscal 2022, 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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We expect to settle the LTIP 2024 awards in stock.

Restricted Share Units (RSUs)

Restricted Share Units

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 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).

During the three months ended March 31, 2022, we granted RSUs through a special one-time grant for development, engagement and long-term retention to certain of our non-executive employees.

During the three and nine months ended March 31, 2022, we granted 2,459,929 RSUs, respectively, to employees (three and nine months ended March 31, 2021— nil and 484,956 RSUs, respectively).

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

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.

As of March 31, 2022, the total expected compensation cost related to the unvested RSU awards not yet recognized was $ 106.9 million, which is expected to be recognized over a weighted average period of 2.1 years.

We expect to settle RSU awards in stock.

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 ).

During the three and nine months ended March 31, 2022, 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 nine months ended March 31, 2021— nil ).

Deferred Share Units (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).

During the three and nine months ended March 31, 2022, we granted 5,058 and 78,705 DSUs, respectively, to certain non-employee directors (three and nine months ended March 31, 2021— 5,015 and 81,585 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 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.

During the three and nine months ended March 31, 2022, respectively, we did no t issue any of our Common Shares from treasury stock in connection with the settlement of vested DSUs (three and nine months ended March 31, 2021— 23,640 Common Shares, respectively, at a cost of $ 1.1 million, respectively).

Employee Stock Purchase Plan (ESPP)

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

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).

Our ESPP offers employees the opportunity to purchase our Common Shares at a purchase price discount of 15 %.

During the three and nine months ended March 31, 2022, 246,473 and 644,986 Common Shares, respectively, were eligible for issuance to employees enrolled in the ESPP (three and nine months ended March 31, 2021— 204,812 and 572,219 Common Shares, respectively).

During the three and nine months ended March 31, 2022, cash in the amount of $ 8.9 million and $ 25.3 million, respectively, was received from employees relating to the ESPP (three and nine months ended March 31, 2021—$ 8.3 million and $ 22.0 million, respectively).

NOTE 14— GUARANTEES AND CONTINGENCIES

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Payments due between

Total January 1, 2022 -

Total April 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).

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.

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.

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 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.

Assuming the utilization of available tax attributes (further described below), we estimate our potential aggregate liability, as of March 31, 2022, 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 $ 75 million.

As of March 31, 2022, we have provisionally paid approximately $ 34 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 March 31, 2022.

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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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.

On January 27, 2022, the CRA issued a notice of reassessment in respect of Fiscal 2017 on the basis of its position set forth in the Proposal Letter.

On April 19, 2022, we filed our notice of objection regarding the reassessment in respect of Fiscal 2017.

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.

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

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

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

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

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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 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 effective tax rate increased to a provision of 35.5 % for the three months ended March 31, 2022, compared to a provision of 25.8 % for the three months ended March 31, 2021.

Tax expense increased from $ 31.8 million during the three months ended March 31, 2021 to $ 41.0 million during the three months ended March 31, 2022.

This was primarily due to (i) an increase of $ 10.6 million related to the US Base Erosion and Anti-Abuse Tax (US BEAT) and (ii) an increase of $ 4.4 million relating to tax impacts of legal entity rationalization.

These were partially offset by (i) a net decrease of $ 2.9 million related to Foreign Accrual Property Income and (ii) a net increase of $ 2.1 million benefit related to the 50 % exclusion on gains in certain investment funds in which we are a limited partner.

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 effective tax rate decreased to a provision of 29.6 % for the nine months ended March 31, 2022, compared to a provision of 72.5 % for the nine months ended March 31, 2021.

Tax expense decreased from $ 342.1 million during the nine months ended March 31, 2021 to $ 123.8 million during the nine months ended March 31, 2022.

This was primarily due to (i) a decrease of $ 300.6 million related to Internal Revenue Service (IRS) settlements in Fiscal 2021, (ii) a decrease of $ 11.3 million related to differences in tax filings, (iii) a net decrease of $ 5.9 million for related Subpart F and (iv) an increase of $ 5.2 million benefit related to the 50 % exclusion on gains in certain investment funds in which we are a limited partner.

These were partially offset by (i) an increase of $ 90.6 million for changes in unrecognized tax benefits, (ii) a net increase of $ 17.0 million related to internal reorganizations and (iii) a decrease of $ 4.4 million in share-based compensation benefits.

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 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,

For the three and nine months ended March 31, 2022 and 2021, respectively, we recognized the following amounts as income tax-related interest expense and penalties:

Three Months Ended March 31, Nine Months Ended March 31,

2022 2021 2022 2021

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

Penalties expense (recoveries) 199 705 173 383

Interest expense $ 336 $ 1,315 $ 803 $ 45,422

Penalties expense 245 506 418 889

Total $ 581 $ 1,821 $ 1,221 $ 46,311

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

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

As of March 31, 2022 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 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.

We believe that it is reasonably possible that the gross unrecognized tax benefits, as of March 31, 2022, could decrease tax expense in the next 12 months by $ 3.1 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.

Our tax filings remain subject to audits by applicable tax authorities for a certain length of time following the tax year to which those filings relate.

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 and the Philippines.

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

As of December 31, 2021, the Fiscal 2015 and Fiscal 2016 tax years for Luxembourg became statute barred.

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

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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We cannot currently provide an estimate of the range of possible outcomes.

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

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.

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

As of March 31, 2022, we have recognized a provision of $ 29.2 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.

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 December 31, 2021 and June 30, 2021:

December 31, 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 March 31, 2022 and June 30, 2021:

March 31, 2022 June 30, 2021

Fair Market Measurements using:

December 31, 2021 Quoted prices

March 31, 2022 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 December 31, 2021, the fair value was $ 3.4 billion (June 30, 2021—$ 2.7 billion).

As of March 31, 2022, the fair value was $ 3.1 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 and six months ended December 31, 2021 and 2020, respectively, we did not have any transfers between Level 1, Level 2 or Level 3.

During the three and nine months ended March 31, 2022 and 2021, 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 and six months ended December 31, 2021 and 2020, respectively, no indications of impairments were identified and therefore no fair value measurements were required.

During the three and nine months ended March 31, 2022 and 2021, 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 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.

The fair value of the contracts, as of March 31, 2022, is recorded within “Prepaid expenses and other current assets” and represents the net gain before tax effect that is expected to be reclassified from accumulated other comprehensive income into earnings with the next twelve months.

As of March 31, 2022, the notional amount of forward contracts we held to sell U.S.

dollars in exchange for Canadian dollars was $ 67.0 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 December 31, 2021 As of June 30, 2021

As of March 31, 2022 As of June 30, 2021

Derivatives Balance Sheet Location Fair Value

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

Three and Six Months Ended December 31, 2021

Three and Nine Months Ended March 31, 2022

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

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(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

Three Months Ended March 31, 2022 Nine Months Ended March 31, 2022 Three Months Ended March 31, 2022 Nine Months Ended March 31, 2022

Foreign currency forward contracts $ 881 $ ( 455 ) Operating expenses $ ( 298 ) $ 117

Three and Six Months Ended December 31, 2020

Three and Nine Months Ended March 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)

2 unchanged sentences

(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

Three Months Ended March 31, 2021 Nine Months Ended March 31, 2021 Three Months Ended March 31, 2021 Nine Months Ended March 31, 2021

Foreign currency forward contracts $ 927 $ 4,910 Operating expenses $ 1,507 $ 2,574

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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 December 31, Six Months Ended December 31,

Three Months Ended March 31, Nine Months Ended March 31,

2022 2021 2022 2021

Fiscal 2022 Restructuring Plan $ 464 $ — $ 464 $ —

COVID-19 Restructuring Plan ( 495 ) 153 ( 1,310 ) ( 7,581 )

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Total $ 11,031 $ 2,846 $ 20,592 $ ( 1,404 )

Fiscal 2022 Restructuring Plan

During the third quarter of Fiscal 2022, as part of our return to office planning, we made a strategic decision to implement restructuring activities to streamline our operations and further reduce our real estate footprint around the world (Fiscal 2022 Restructuring Plan).

The Fiscal 2022 Restructuring Plan charges will relate to facility costs and workforce reductions.

Facility costs will include 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.

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

On a quarterly basis, we conduct an evaluation of the related liabilities and expenses and revise our assumptions and estimates as appropriate.

During the three and nine months ended March 31, 2022, we recorded charges of $ 0.5 million, respectively, related to workforce reductions.

As of March 31, 2022, we expect total costs to be incurred in connection with the Fiscal 2022 Restructuring Plan to be approximately $ 30.0 million to $ 35.0 million, of which $ 0.5 million has been recorded within “Special charges (recoveries)” to date.

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 nine months ended March 31, 2022 is shown below.

Fiscal 2022 Restructuring Plan Workforce reduction Total

Balance payable as of June 30, 2021

Accruals and adjustments 464 464

Cash payments ( 111 ) ( 111 )

Foreign exchange and other non-cash adjustments 2 2

Balance payable as of March 31, 2022

COVID-19 Restructuring Plan

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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 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 six months ended December 31, 2021 is shown below.

During the three and nine months ended March 31, 2022, we recorded net recoveries of $ 0.5 million and $ 1.3 million, respectively, related to abandoned facilities and workforce reductions.

During the three and nine months ended March 31, 2021, we recorded net recoveries of $ 1.5 million and $ 15.4 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 $ 2.2 million and $ 12.3 million, respectively, related to the reversal of lease liabilities (see note 6 “Leases”), with the remainder related to other facility charges and recoveries.

Additionally, during the three and nine months ended March 31, 2021, we incurred $ 1.6 million and $ 7.8 million, respectively, of charges related to abandoned facilities, workforce reductions and the write-off of fixed assets.

Since the inception of the COVID-19 Restructuring Plan, $ 43.4 million has been recorded within “Special charges (recoveries)” to date.

We do not expect to incur any further significant charges relating to the COVID-19 Restructuring Plan.

A reconciliation of the beginning and ending restructuring liability, which is included within “Accounts payable and accrued liabilities” and “Long-term accrued liabilities” in our Condensed Consolidated Balance Sheets, for the nine months ended March 31, 2022 is shown below.

COVID-19 Restructuring Plan Workforce reduction Facility charges Total

Balance payable as of June 30, 2021

$ 255 $ 4,010 $ 4,265

Accruals and adjustments ( 101 ) ( 1,462 ) ( 1,563 )

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Foreign exchange and other non-cash adjustments ( 10 ) ( 302 ) ( 312 )

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

Balance payable as of March 31, 2022

$ — $ 2,564 $ 2,564

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 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.

During the three and nine months ended March 31, 2022, we recorded immaterial charges and net recoveries of $ 0.1 million respectively, related to abandoned facilities and workforce reductions.

During the three and nine months ended March 31, 2021, we recorded net recoveries of $ 0.6 million and $ 13.6 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 $ 1.0 million and $ 10.0 million, respectively, related to the reversal of lease liabilities (see note 6 “Leases”), with the remainder related to other facility charges and recoveries.

Additionally, during the three and nine months ended March 31, 2021, we recognized a net recovery of $ 0.1 million and charges of $ 14.1 million, respectively, related to abandoned facilities, workforce reductions and the write-off of fixed assets.

Since the inception of the Fiscal 2020 Restructuring 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 the Fiscal 2020 Restructuring Plan.

Fiscal 2020 Restructuring Plan Workforce reduction Facility charges Total

Balance payable as of June 30, 2021

$ 2,217 $ 1,866 $ 4,083

Accruals and adjustments ( 226 ) 44 ( 182 )

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Foreign exchange and other non-cash adjustments ( 127 ) 7 ( 120 )

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

Balance payable as of March 31, 2022

$ — $ 1,653 $ 1,653

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 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).

Acquisition-related costs for the three and nine months ended March 31, 2022 were $ 1.3 million and $ 6.0 million, respectively (three and nine months ended March 31, 2021—$ 3.1 million and $ 4.6 million, respectively).

Other charges (recoveries)

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.

For the three and nine months ended March 31, 2022, “Other charges” includes $ 9.6 million and $ 11.6 million, respectively, related to pre-acquisition equity incentives, which upon acquisition were replaced by equivalent value cash settlements (see note 19 “Acquisitions”) and $ 0.1 million and $ 4.1 million, respectively, related to other miscellaneous charges.

For the three and nine months ended March 31, 2021, “Other charges” includes $ 0.3 million and $ 1.1 million, respectively, related to other miscellaneous charges.

NOTE 19— ACQUISITIONS

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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.

Total consideration for Zix was $ 894.5 million paid in cash, inclusive of cash acquired and $ 18.6 million relating to the cash settlement of pre-acquisition vested share-based compensation that was previously accrued but since paid as of March 31, 2022.

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

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Non-current tangible assets 13,736

Intangible assets 374,600

Intangible customer assets 213,600

Intangible technology assets 92,050

Liabilities assumed ( 86,539 )

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The gross amount receivable was $ 32.7 million, of which $ 2.6 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 .

Acquisition-related costs for Zix included in “Special charges (recoveries)” in the Condensed Consolidated Financial Statements for the three and nine months ended March 31, 2022 were $ 0.6 million and $ 2.7 million, respectively.

Pre-acquisition equity incentives of $ 26.6 million were replaced upon acquisition by equivalent value cash settlements to be settled in accordance with the original vesting dates, primarily over the next two years .

Of these equity incentives, $ 9.6 million and $ 11.6 million for the three and nine months ended March 31, 2022, respectively, were included in “Special charges (recoveries).”

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.

Since the date of acquisition, the acquisition had no significant impact on revenues and net earnings for the three and nine months ended March 31, 2022.

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

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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.

Since the date of acquisition, the acquisition had no significant impact on revenues and net earnings for the three and nine months ended March 31, 2022.

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

Three Months Ended March 31, 2022

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

Balance as of December 31, 2021

$ 43,969 $ ( 457 ) $ ( 12,163 ) $ 31,349

Other comprehensive income (loss) before reclassifications, net of tax ( 13,073 ) 648 ( 2,033 ) ( 14,458 )

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Total other comprehensive income (loss) net, for the period ( 13,073 ) 867 ( 1,877 ) ( 14,083 )

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

Six Months Ended December 31, 2021

Balance as of March 31, 2022

$ 30,896 $ 410 $ ( 14,040 ) $ 17,266

Nine Months Ended March 31, 2022

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

Other comprehensive income (loss) before reclassifications, net of tax ( 44,512 ) ( 334 ) ( 4,517 ) ( 49,363 )

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Total other comprehensive income (loss) net, for the period ( 44,512 ) ( 420 ) ( 4,040 ) ( 48,972 )

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

Three Months Ended December 31, 2020

Balance as of March 31, 2022

$ 30,896 $ 410 $ ( 14,040 ) $ 17,266

Three Months Ended March 31, 2021

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

Balance as of December 31, 2020

$ 81,678 $ 2,007 $ ( 17,209 ) $ 66,476

Other comprehensive income (loss) before reclassifications, net of tax ( 12,568 ) 681 344 ( 11,543 )

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

Amounts reclassified into net income, net of tax — ( 1,108 ) 249 ( 859 )

Total other comprehensive income (loss) net, for the period ( 12,568 ) ( 427 ) 593 ( 12,402 )

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

Six Months Ended December 31, 2020

Balance as of March 31, 2021

$ 69,110 $ 1,580 $ ( 16,616 ) $ 54,074

Nine Months Ended March 31, 2021

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

Balance as of June 30, 2020

$ 32,968 $ ( 136 ) $ ( 15,007 ) $ 17,825

Other comprehensive income (loss) before reclassifications, net of tax 36,142 3,608 ( 2,342 ) 37,408

1 unchanged sentence

Total other comprehensive income (loss) net, for the period 36,142 1,716 ( 1,609 ) 36,249

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

Balance as of March 31, 2021

$ 69,110 $ 1,580 $ ( 16,616 ) $ 54,074

NOTE 21— SUPPLEMENTAL CASH FLOW DISCLOSURES

Six Months Ended December 31,

Nine Months Ended March 31,

Cash paid during the period for interest $ 115,097 $ 117,359

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Cash paid during the period for income taxes (1)

$ 88,259 $ 369,246

(1) Included for the nine months ended March 31, 2021 is cash paid of $ 290.0 million relating to settlements with the IRS.

NOTE 22— OTHER INCOME (EXPENSE), NET

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

Three Months Ended March 31, Nine Months Ended March 31,

2022 2021 2022 2021

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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,

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 March 31, Nine Months Ended March 31,

2022 2021 2022 2021

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

Basic earnings per share

Net income attributable to OpenText $ 74,681 $ 91,490 $ 294,894 $ 129,389

Basic earnings per share attributable to OpenText $ 0.28 $ 0.34 $ 1.09 $ 0.47

Diluted earnings per share

Net income attributable to OpenText $ 74,681 $ 91,490 $ 294,894 $ 129,389

Diluted earnings per share attributable to OpenText $ 0.28 $ 0.33 $ 1.08 $ 0.47

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

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5,271 3,691 4,264 4,222

(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.

(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.

NOTE 24— RELATED PARTY TRANSACTIONS

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

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.

During the nine months ended March 31, 2022, Mr.

Stephen Sadler, a member of the Board of Directors, earned $ 0.4 million (nine months ended March 31, 2021 — $ 32 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.

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Cash Dividends

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.

As part of our quarterly, non-cumulative cash dividend program, we declared, on May 3, 2022, a dividend of $ 0.2209 per Common Share.

The record date for this dividend is June 3, 2022 and the payment date is June 24, 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.

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