What changed in this filing

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Item 1. Financial Statements

2024-05-02 compared with 2024-02-01 · 322 added, 276 removed, 1219 unchanged (33% of the section changed)

4 unchanged sentences

dollars, except share data)

December 31, 2023 June 30, 2023

March 31, 2024 June 30, 2023

ASSETS (unaudited)

Cash and cash equivalents $ 1,125,323 $ 1,231,625

Accounts receivable trade, net of allowance for credit losses of $ 10,642 as of December 31, 2023 and $ 13,828 as of June 30, 2023 (Note 4)

Accounts receivable trade, net of allowance for credit losses of $ 11,390 as of March 31, 2024 and $ 13,828 as of June 30, 2023 (Note 4)

654,190 682,517

2 unchanged sentences

Income taxes recoverable (Note 15)

14,119 68,161

Prepaid expenses and other current assets (Note 9)

51 unchanged sentences

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

271,854,655 and 270,902,571 Common Shares issued and outstanding at December 31, 2023 and June 30, 2023, respectively;

272,561,685 and 270,902,571 Common Shares issued and outstanding at March 31, 2024 and June 30, 2023, respectively;

authorized Common Shares:

3 unchanged sentences

Retained earnings 2,059,060 2,048,984

Treasury stock, at cost ( 4,400,034 and 3,536,375 shares at December 31, 2023 and June 30, 2023, respectively)

Treasury stock, at cost ( 3,376,994 and 3,536,375 shares at March 31, 2024 and June 30, 2023, respectively)

( 133,606 ) ( 151,597 )

12 unchanged sentences

Three Months Ended

December 31, Six Months Ended

March 31, Nine Months Ended

2024 2023 2024 2023

31 unchanged sentences

104,355 45,193 241,444 271,230

Provision for income taxes (Note 15)

Provision for (recovery of) income taxes (Note 15)

6,028 ( 12,420 ) 24,434 71,979

16 unchanged sentences

Three Months Ended

December 31, Six Months Ended

March 31, Nine Months Ended

2024 2023 2024 2023

10 unchanged sentences

Unrealized gain (loss) - net of tax (3)

90 ( 900 ) 319 ( 900 )

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

12 unchanged sentences

______________________

(1) Net of tax expense (recovery) of $ 549 and $ 347 for the three months ended December 31, 2023 and 2022, respectively;

$( 115 ) and $( 859 ) for the six months ended December 31, 2023 and 2022, respectively.

(2) Net of tax expense (recovery) of $ 118 and $ 397 for the three months ended December 31, 2023 and 2022, respectively;

$ 121 and $ 609 for the six months ended December 31, 2023 and 2022, respectively.

(3) Net of tax expense (recovery) of ($ 119 ) and $ — for the three months ended December 31, 2023 and 2022, respectively;

($ 60 ) and $ — for the six months ended December 31, 2023 and 2022, respectively.

(4) Net of tax expense (recovery) of $ 91 and $ 106 for the three months ended December 31, 2023 and 2022, respectively;

$ 110 and $ 1,210 for the six months ended December 31, 2023 and 2022, respectively.

(5) Net of tax expense (recovery) of $ 50 and $ 25 for the three months ended December 31, 2023 and 2022, respectively;

$ 125 and $ 51 for the six months ended December 31, 2023 and 2022, respectively .

(1) Net of tax expense (recovery) of ($ 589 ) and $ 15 for the three months ended March 31, 2024 and 2023, respectively;

$( 704 ) and $( 844 ) for the nine months ended March 31, 2024 and 2023, respectively.

(2) Net of tax expense (recovery) of $ 42 and $ 252 for the three months ended March 31, 2024 and 2023, respectively;

$ 163 and $ 861 for the nine months ended March 31, 2024 and 2023, respectively.

(3) Net of tax expense (recovery) of $ 24 and ($ 238 ) for the three months ended March 31, 2024 and 2023, respectively;

$ 84 and ($ 238 ) for the nine months ended March 31, 2024 and 2023, respectively.

(4) Net of tax expense (recovery) of $ — and $( 892 ) for the three months ended March 31, 2024 and 2023, respectively;

$ 110 and $ 318 for the nine months ended March 31, 2024 and 2023, respectively.

(5) Net of tax expense (recovery) of $ 50 and $ 25 for the three months ended March 31, 2024 and 2023, respectively;

$ 175 and $ 76 for the nine months ended March 31, 2024 and 2023, respectively .

See accompanying Notes to Condensed Consolidated Financial Statements

3 unchanged sentences

dollars and shares)

Three Months Ended December 31, 2023

Three Months Ended March 31, 2024

Common Shares and Additional Paid in Capital Treasury Stock Retained

3 unchanged sentences

Shares Amount Shares Amount

Balance as of September 30, 2023

Balance as of December 31, 2023

271,855 $ 2,261,856 ( 4,400 ) $ ( 179,089 ) $ 2,029,643 $ ( 83,499 ) $ 1,436 $ 4,030,347

9 unchanged sentences

Net income for the period — — — — 98,285 — 42 98,327

Balance as of December 31, 2023

Balance as of March 31, 2024

272,562 $ 2,276,758 ( 3,377 ) $ ( 133,606 ) $ 2,059,060 $ ( 73,045 ) $ 1,478 $ 4,130,645

Three Months Ended December 31, 2022

Three Months Ended March 31, 2023

Common Shares and Additional Paid in Capital Treasury Stock Retained

3 unchanged sentences

Shares Amount Shares Amount

Balance as of September 30, 2022

Balance as of December 31, 2022

270,235 $ 2,092,079 ( 3,295 ) $ ( 142,126 ) $ 2,171,236 $ ( 1,028 ) $ 1,223 $ 4,121,384

Issuance of Common Shares

Under employee stock option plans 16 479 — — — — — 479

Under employee stock purchase plans 228 5,776 — — — — — 5,776

6 unchanged sentences

Net income for the period — — — — 57,556 — 57 57,613

Balance as of December 31, 2022

Balance as of March 31, 2023

270,479 $ 2,130,343 ( 3,216 ) $ ( 138,700 ) $ 2,163,338 $ ( 33,114 ) $ 1,280 $ 4,123,147

3 unchanged sentences

dollars and shares)

Six Months Ended December 31, 2023

Nine Months Ended March 31, 2024

Common Shares and Additional Paid in Capital Treasury Stock Retained

16 unchanged sentences

Net income for the period — — — — 216,861 — 149 217,010

Balance as of December 31, 2023

Balance as of March 31, 2024

272,562 $ 2,276,758 ( 3,377 ) $ ( 133,606 ) $ 2,059,060 $ ( 73,045 ) $ 1,478 $ 4,130,645

Six Months Ended December 31, 2022

Nine Months Ended March 31, 2023

Common Shares and Additional Paid in Capital Treasury Stock Retained

15 unchanged sentences

Net income for the period — — — — 199,113 — 138 199,251

Balance as of December 31, 2022

Balance as of March 31, 2023

270,479 $ 2,130,343 ( 3,216 ) $ ( 138,700 ) $ 2,163,338 $ ( 33,114 ) $ 1,280 $ 4,123,147

3 unchanged sentences

(In thousands of U.S.

Six Months Ended December 31,

Nine Months Ended March 31,

Cash flows from operating activities:

8 unchanged sentences

Loss on extinguishment of debt 10,803 8,152

Loss on sale and write down of property and equipment 1,877 121

Loss on sale and write down of property and equipment, net

Deferred taxes ( 249,174 ) ( 178,700 )

Share in net loss of equity investees

19,013 11,547

Changes in financial instruments 3,551 112,567

13 unchanged sentences

Micro Focus acquisition

( 9,272 ) ( 5,655,606 )

Realized gain on financial instruments

Proceeds from net investment hedge derivative contracts

11 unchanged sentences

Payments of dividends to shareholders ( 200,672 ) ( 194,481 )

Other financing activities ( 1,447 ) ( 2,193 )

Net cash provided by (used in) financing activities

2 unchanged sentences

( 3,982 ) 2,632

Increase (decrease) in cash, cash equivalents and restricted cash during the period

Decrease in cash, cash equivalents and restricted cash during the period

( 106,469 ) ( 296,191 )

5 unchanged sentences

Reconciliation of cash, cash equivalents and restricted cash:

December 31, 2023 December 31, 2022

March 31, 2024 March 31, 2023

Cash and cash equivalents $ 1,125,323 $ 1,396,817

7 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three and Six Months Ended December 31, 2023

For the Three and Nine Months Ended March 31, 2024

(Tabular amounts in thousands of U.S.

2 unchanged sentences

The accompanying Condensed Consolidated Financial Statements include the accounts of Open Text Corporation and our subsidiaries, collectively referred to as “OpenText” or the “Company.” We wholly own all of our subsidiaries with the exception of Open Text South Africa Proprietary Ltd.

(OT South Africa), which as of December 31, 2023, was 70 % owned by OpenText.

(OT South Africa), which as of March 31, 2024, was 70 % owned by OpenText.

All intercompany balances and transactions have been eliminated.

17 unchanged sentences

dollars and are prepared in accordance with United States generally accepted accounting principles (U.S.

The information furnished reflects all adjustments necessary for a fair presentation of the results for the periods presented and includes the consolidated financial results of Micro Focus International Limited, formerly Micro Focus International plc, and its subsidiaries (Micro Focus), with effect from February 1, 2023 (see below and Note 19 “Acquisitions and Divestitures”).

Use of estimates

5 unchanged sentences

In particular, key estimates, judgments and assumptions include those related to:

(i) revenue recognition, (ii) accounting for income taxes, (iii) testing of goodwill for impairment, (iv) the valuation of acquired intangible assets, (v) the valuation of long-lived assets, (vi) the recognition of contingencies, (vii) restructuring accruals, (viii) acquisition accruals and pre-acquisition contingencies, (ix) the valuation of stock options granted and obligations related to share-based payments, including the valuation of our long-term incentive plans, (x) the valuation of pension obligations and pension assets, (xi) the valuation of available-for-sale investments, (xii) the valuation of derivative instruments and (xiii) the accounting for assets held for sale and proposed divestitures.

Acquisition of Micro Focus

On January 31, 2023, we acquired all of the issued and to be issued share capital of Micro Focus (the Micro Focus Acquisition) for a total purchase price of $ 6.2 billion, inclusive of Micro Focus’ cash and repayment of Micro Focus’ outstanding indebtedness, subject to final adjustments.

The results of operations of Micro Focus have been consolidated with those of OpenText with effect from February 1, 2023.

See Note 19 “Acquisitions and Divestitures” to our Condensed Consolidated Financial Statements for more details.

Proposed Divestiture of AMC Business

On November 28, 2023, the Company entered into an agreement to sell its Application Modernization and Connectivity (AMC) business to Rocket Software, Inc.

(Rocket Software), for $ 2.275 billion in cash before taxes, fees and other adjustments.

The transaction remains subject to certain regulatory approvals and other customary closing conditions and is expected to close in the fourth quarter of Fiscal 2024.

The Company determined that the assets and liabilities of the AMC business met the criteria for held for sale classification and the respective assets and liabilities have been reclassified to assets held for sale and liabilities held for sale reported in our Condensed Consolidated Balance Sheets as of December 31, 2023.

The Company has determined that the AMC business does not constitute a component, as its operations and cash flows can not be clearly distinguished from the rest of the Company’s operations and cash flows due to significant shared costs, therefore, the transaction does not meet the discontinued operations criteria, and the results of operations from the AMC business are presented within income from operations in our Condensed Consolidated Statements of Income.

The Company expects that the sale proceeds less costs to sell will exceed the preliminary estimate of the carrying value of the net assets for the AMC business.

See Note 19 “Acquisitions and Divestitures” for more details.

Divestiture of AMC Business

On May 1, 2024, the Company completed the previously announced sale of its Application Modernization and Connectivity (AMC) business to Rocket Software, Inc.

(Rocket Software), for $ 2.275 billion in cash before taxes, fees and other adjustments (the AMC Divestiture).

For the three and nine months ended March 31, 2024, the results of the AMC business were recorded and presented within our Condensed Consolidated Financial Statements.

See Note 25 “Subsequent Events” for more details.

As of March 31, 2024, the Company determined that the assets and liabilities of the AMC business met the criteria for held for sale classification and the respective assets and liabilities have been reclassified to Assets held for sale and Liabilities held for sale reported in our Condensed Consolidated Balance Sheets.

The Company has determined that the AMC business does not constitute a component, as its operations and cash flows cannot be clearly distinguished from the rest of the Company’s operations and cash flows due to significant shared costs, therefore, the transaction does not meet the discontinued operations criteria, and the results of operations from the AMC business are presented within Income from operations in our Condensed Consolidated Statements of Income.

The Company expects that the sale proceeds less costs to sell will exceed the carrying value of the net assets for the AMC business.

The carrying value is subject to change based on developments leading up to the closing date.

See Note 19 “Acquisitions and Divestitures” to our Condensed Consolidated Financial Statements for more details.

See Note 19 “Acquisitions and Divestitures” for more details.

NOTE 2— ACCOUNTING POLICIES AND RECENT ACCOUNTING PRONOUNCEMENTS

5 unchanged sentences

Further, the Company ceases to record depreciation and amortization expense on assets that are classified as held for sale.

The Company has classified assets and liabilities held for sale as of December 31, 2023 related to the proposed divestiture of our AMC business and the proposed sale of a company owned facility (which is unrelated to the divestiture of our AMC business).

The Company has classified Assets held for sale and Liabilities held for sale as of March 31, 2024 related to the AMC Divestiture.

Accounting Pronouncements Adopted in Fiscal 2024

3 unchanged sentences

Disclosure of Supplier Finance Program Obligations.” This standard requires companies that participate in supplier finance programs in connection with the procurement of goods or services to disclose quantitative and qualitative information about the programs.

We adopted this ASU as of July 1, 2023 which did not have a material impact on our Condensed Consolidated Financial Statements and related disclosures, as we had no material supplier finance program obligations as of December 31, 2023.

We adopted this ASU as of July 1, 2023, which did not have a material impact on our Condensed Consolidated Financial Statements and related disclosures, as we had no material supplier finance program obligations as of March 31, 2024.

Accounting Pronouncements Not Yet Adopted in Fiscal 2024

2 unchanged sentences

Improvements to Reportable Segment Disclosures,” which provides guidance to improve the disclosures about a public entity’s reportable segments and address requests from investors for additional, more detailed information about a reportable segment’s expenses.

Public entities

must adopt the new guidance for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

Public entities must adopt the new guidance for fiscal years beginning after December 15, 2023, and interim periods within fiscal years

beginning after December 15, 2024.

The amendments in this ASU must be applied on a retrospective basis to all prior periods presented in the financial statements and early adoption is permitted.

10 unchanged sentences

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 December 31, Six Months Ended December 31,

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

2024 2023 2024 2023

32 unchanged sentences

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

As of December 31, 2023

As of March 31, 2024

As of June 30, 2023

8 unchanged sentences

______________________

(1) Excludes $ 4.9 million of short-term contract assets and $ 2.7 million of long-term contract assets that have been reclassified to Assets held for sale, as well as $ 172.8 million of short-term deferred revenues and $ 23.1 million of long-term deferred revenues that have been reclassified to Liabilities held for sale as of December 31, 2023, related to the proposed divestiture of the AMC business.

See Note 19 “Acquisitions and Divestitures.”

(1) Excludes $ 5.5 million of short-term contract assets and $ 2.9 million of long-term contract assets that have been reclassified to Assets held for sale, as well as $ 176.9 million of short-term deferred revenues and $ 24.5 million of long-term deferred revenues that have been reclassified to Liabilities held for sale as of March 31, 2024, related to the AMC Divestiture.

See Note 19 “Acquisitions and Divestitures” for more details.

The difference in the opening and closing balances of our contract assets and deferred revenues, excluding the impact of assets held for sale, primarily results from the timing difference between our performance and the customer’s payments.

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, 2023, we reclassified $ 58.5 million (six months ended December 31, 2022 — $ 20.2 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, 2023 and 2022, respectively, there was no significant impairment loss recognized related to contract assets.

During the nine months ended March 31, 2024, we reclassified $ 90.6 million (nine months ended March 31, 2023 — $ 37.7 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, 2024 and 2023, 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, excluding the impact of Liabilities held for sale, 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 six months ended December 31, 2023 that was included in the deferred revenue balances at June 30, 2023 was $ 1,268 million (six months ended December 31, 2022—$ 658 million).

The amount of revenue that was recognized during the nine months ended March 31, 2024 that was included in the deferred revenue balances at June 30, 2023 was $ 1,566 million (nine months ended March 31, 2023—$ 813 million).

Incremental Costs of Obtaining a Contract with a Customer

6 unchanged sentences

Reclassification to Assets held for sale (1)

Capitalized costs to obtain a contract as of December 31, 2023

Capitalized costs to obtain a contract as of March 31, 2024

______________________

(1) Capitalized costs to obtain a contract of $ 2.6 million have been reclassified to Assets held for sale related to the proposed divestiture of our AMC business.

See Note 19 “Acquisitions and Divestitures.”

During the three and six months ended December 31, 2023 and 2022, respectively, there was no significant impairment loss recognized related to capitalized costs to obtain a contract.

(1) Adjustment to reclassify capitalized costs to obtain a contract to Assets held for sale related to the AMC Divestiture.

See Note 19 “Acquisitions and Divestitures” for more details.

During the three and nine months ended March 31, 2024 and 2023, 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, 2023, approximately $ 2.5 billion of revenue is expected to be recognized from remaining performance obligations on existing contracts, excluding performance obligations related to the proposed divestiture of our AMC business which are reported within Liabilities held for sale.

As of March 31, 2024, approximately $ 2.6 billion of revenue is expected to be recognized from remaining performance obligations on existing contracts, excluding performance obligations related to the AMC Divestiture which are reported within Liabilities held for sale.

We expect to recognize approximately 45 % of this amount over the next 12 months and the remaining balance substantially over the next three years thereafter.

As of December 31, 2023, approximately $ 128.9 million of revenue is expected to be recognized from remaining performance obligations on existing contracts relates to the proposed divestiture of our AMC business and we expect to recognize approximately 49 % of this amount over the next 12 months.

As of March 31, 2024, approximately $ 130.0 million of revenue is expected to be recognized from remaining performance obligations on existing contracts related to the AMC Divestiture and the AMC business expects to recognize approximately 50 % of this amount over the next 12 months.

We apply the practical expedient and do not disclose performance obligations that have original expected durations of one year or less.

See Note 25 “Subsequent Events” for more details.

NOTE 4— ALLOWANCE FOR CREDIT LOSSES

4 unchanged sentences

Reclassification to Assets held for sale (1)

Balance as of December 31, 2023

Balance as of March 31, 2024

______________________

(1) Allowance for credit losses of $ 1.1 million have been reclassified to Assets held for sale related to the proposed divestiture of our AMC business.

See Note 19 “Acquisitions and Divestitures.”

Included in accounts receivable are unbilled receivables in the amount of $ 108.2 million as of December 31, 2023 (June 30, 2023—$ 66.5 million).

As of December 31, 2023, we have an allowance for credit losses of $ 0.2 million for contract assets (June 30, 2023—$ 0.3 million).

For additional information on contract assets please see Note 3 “Revenues.”

(1) Allowance for credit losses of $ 1.1 million have been reclassified to Assets held for sale related to the AMC Divestiture.

See Note 19 “Acquisitions and Divestitures” for more details.

Included in accounts receivable are unbilled receivables in the amount of $ 68.5 million as of March 31, 2024 (June 30, 2023—$ 66.5 million).

As of March 31, 2024, we have an allowance for credit losses of $ 1.3 million for contract assets (June 30, 2023—$ 0.3 million).

For additional information on contract assets, see Note 3 “Revenues.”

NOTE 5— PROPERTY AND EQUIPMENT

As of December 31, 2023

As of March 31, 2024

Depreciation (1)

7 unchanged sentences

______________________

(1) Excludes Property and equipment with cost of $ 6.3 million, accumulated depreciation of $ 1.0 million and a net book value of $ 5.3 million that have been reclassified to Assets held for sale related to the proposed divestiture of our AMC business and proposed divestiture of certain facilities owned by the Company.

See Note 19 “Acquisitions and Divestitures.”

(1) Excludes Property and equipment with cost of $ 1.7 million, accumulated depreciation of $ 0.7 million and a net book value of $ 1.0 million that have been reclassified to Assets held for sale related to the AMC Divestiture.

See Note 19 “Acquisitions and Divestitures” for more details.

As of June 30, 2023

8 unchanged sentences

Total $ 1,023,450 $ ( 666,546 ) $ 356,904

Proposed Sale of Company Owned Facility

During the three months ended December 31, 2023, the Company entered into a Purchase and Sale Agreement to dispose of a Company owned facility which has a carrying value of $ 4.4 million and has been classified as held for sale as of December 31, 2023.

Sale of Company Owned Facility

During the three months ended March 31, 2024, we completed the sale of a Company owned facility with a carrying value of $ 4.5 million that was previously classified within Assets held for sale.

The Company recognized a gain of $ 1.0 million on this sale.

NOTE 6— LEASES

5 unchanged sentences

The following illustrates the Condensed Consolidated Balance Sheets information related to leases:

As of December 31, 2023 As of June 30, 2023

Operating Leases Balance Sheet Location

Operating Leases Balance Sheet Location As of March 31, 2024 As of June 30, 2023

Operating lease right of use assets (1)

2 unchanged sentences

Operating lease liabilities $ 80,960 $ 91,425

Operating lease liabilities (noncurrent) (1)

Operating lease liabilities (non-current) (1)

Long-term operating lease liabilities 224,984 271,579

2 unchanged sentences

Finance lease receivables (current) Prepaid expenses and other current assets $ 4,255 $ 6,362

Finance lease receivables (noncurrent) Other assets 3,676 5,515

Finance lease receivables (non-current)

Other assets 2,934 5,515

Total finance lease receivables $ 7,189 $ 11,877

Finance lease liabilities (current) Accounts payable and accrued liabilities $ 3,785 $ 5,281

Finance lease liabilities (noncurrent) Accrued liabilities 3,672 5,500

Finance lease liabilities (non-current)

Accrued liabilities 2,932 5,500

Total finance lease liabilities $ 6,717 $ 10,781

______________________

(1) Excludes Operating lease right of use assets of $ 0.7 million that have been reclassified to Assets held for sale, as well as $ 0.3 million of Operating lease liabilities and $ 0.4 million of Long-term operating lease liabilities that have been reclassified to Liabilities held for sale related to the proposed divestiture of our AMC business.

See Note 19 “Acquisitions and Divestitures.”

(1) Excludes Operating lease right of use assets of $ 3.4 million that have been reclassified to Assets held for sale, as well as $ 2.1 million of Operating lease liabilities and $ 1.4 million of Long-term operating lease liabilities that have been reclassified to Liabilities held for sale related to the AMC Divestiture.

See Note 19 “Acquisitions and Divestitures” for more details.

The weighted average remaining lease term and discount rate, inclusive of Assets held for sale for the periods indicated below were as follows:

As of December 31, 2023 As of June 30, 2023

As of March 31, 2024 As of June 30, 2023

Weighted-average remaining lease term

6 unchanged sentences

The following illustrates the various components of 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,

2024 2023 2024 2023

7 unchanged sentences

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

Six Months Ended December 31,

Nine Months Ended March 31,

Cash paid for amounts included in the measurement of lease liabilities:

4 unchanged sentences

$ 19,360 $ 28,579

______________________

(1) The nine months ended March 31, 2023 excludes the impact of $ 129.3 million of right of use assets obtained through the Micro Focus Acquisition.

See Note 19 “Acquisitions and Divestitures” for further details including the finalization of the purchase price allocation for the Micro Focus Acquisition.

Maturity of Lease Liabilities

The following table presents the future minimum lease payments under our lease liabilities as of December 31, 2023:

The following table presents the future minimum lease payments under our lease liabilities as of March 31, 2024:

Fiscal years ending June 30, Operating Leases Finance Leases

2024 (six months ended)

2024 (three months ended)

$ 26,578 $ 1,295

14 unchanged sentences

( 1,102,367 )

Balance as of December 31, 2023

Balance as of March 31, 2024

______________________

(1) Adjustments relate to open measurement period.

(2) Adjustment to reclassify goodwill to Assets held for sale related to the proposed divestiture of our AMC business .

See Note 19 “Acquisitions and Divestitures.”

(1) Adjustments relate to the measurement period, which closed on February 1, 2024.

(2) Adjustment to reclassify Goodwill to Assets held for sale related to the AMC Divestiture.

See Note 19 “Acquisitions and Divestitures” for more details.

NOTE 8— ACQUIRED INTANGIBLE ASSETS

As of December 31, 2023

As of March 31, 2024

Accumulated Amortization (1)

10 unchanged sentences

______________________

(1) Excludes technology and customer intangible net assets with cost of $ 432.1 million and $ 610.2 million respectively, accumulated amortization of $ 48.7 million and $ 62.9 million respectively, and net book value of $ 383.4 million and $ 547.3 million, respectively, that have been reclassified to Assets held for sale related to the proposed divestiture of our AMC business.

See Note 19 “Acquisitions and Divestitures.”

Where applicable, the above balances as of December 31, 2023 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, 2023.

The impact of this resulted in a reduction of $ 228 million to technology assets and accumulated amortization.

See Note 19 “Acquisitions and Divestitures” for more details.

Where applicable, the above balances as of March 31, 2024 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, 2024.

The impact of this resulted in reductions to the cost and accumulated amortization of technology assets and customer assets of $ 228 million and $ 71 million, respectively.

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

2 unchanged sentences

Fiscal years ending June 30,

2024 (six months ended)

2024 (three months ended)

2029 and Thereafter

2 unchanged sentences

Prepaid expenses and other current assets:

As of December 31, 2023 As of June 30, 2023

As of March 31, 2024 As of June 30, 2023

Deposits and restricted cash $ 3,809 $ 2,621

6 unchanged sentences

______________________

(1) Excludes capitalized costs to obtain a contract of $ 1.8 million and short-term prepaid expenses and other current assets of $ 0.1 million that have been reclassified to Assets held for sale as of March 31, 2024 related to the AMC Divestiture.

See Note 19 “Acquisitions and Divestitures” for more details.

(2) Represents the asset related to our derivative instrument activity.

See Note 17 “Derivative Instruments and Hedging Activities.”

(2) Excludes Capitalized costs to obtain a contract of $ 1.2 million and Short-term prepaid expenses and other current assets of $ 0.1 million that have been reclassified to Assets held for sale as of December 31, 2023 related to the proposed divestiture of our AMC business.

See Note 19 “Acquisitions and Divestitures.”

See Note 17 “Derivative Instruments and Hedging Activities” for more details.

Other assets:

As of December 31, 2023 As of June 30, 2023

As of March 31, 2024 As of June 30, 2023

Deposits and restricted cash (1)

$ 19,031 $ 20,418

Capitalized costs to obtain a contract (1)

6 unchanged sentences

______________________

(1) Excludes Capitalized costs to obtain a contract of $ 1.4 million that has been reclassified to Assets held for sale as of December 31, 2023 related to the proposed divestiture of our AMC business.

See Note 19 “Acquisitions and Divestitures.”

(1) Excludes deposits and restricted cash of $ 1.4 million and capitalized costs to obtain a contract of $ 2.3 million that have been reclassified to Assets held for sale as of March 31, 2024 related to the AMC Divestiture.

See Note 19 “Acquisitions and Divestitures” for more details.

Deposits and restricted cash primarily relate to security deposits provided to landlords in accordance with facility lease agreements and cash restricted per the terms of certain contractual-based agreements.

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Our share of net income or losses based on our interest in these investments, which approximates fair value and is 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 (see Note 22 “Other Income (Expense), Net”).

During the three and six months ended December 31, 2023, our share of income (loss) from these investments was $( 8.5 ) million and $( 18.2 ) million, respectively (three and six months ended December 31, 2022—$( 0.3 ) million and $( 6.8 ) million, respectively).

During the three and nine months ended March 31, 2024, our share of income (loss) from these investments was $( 0.8 ) million and $( 19.0 ) million, respectively (three and nine months ended March 31, 2023—$( 4.7 ) million and $( 11.5 ) million, respectively).

As part of the Micro Focus Acquisition, we acquired the rights to certain available-for-sale financial assets.

5 unchanged sentences

Accounts payable and accrued liabilities:

As of December 31, 2023 As of June 30, 2023

As of March 31, 2024 As of June 30, 2023

Accounts payable—trade $ 169,451 $ 162,720

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______________________

(1) Represents the liability related to our derivative instrument activity (see Note 17 “Derivative Instruments and Hedging Activities”).

(2) Excludes $ 24.8 million of Accounts payable and accrued liabilities that have been reclassified to Liabilities held for sale related to the proposed divestiture of our AMC business.

See Note 19 “Acquisitions and Divestitures.”

(1) Represents the liability related to our derivative instrument activity (see Note 17 “Derivative Instruments and Hedging Activities” for more details).

(2) Excludes $ 18.9 million of Accounts payable and accrued liabilities that have been reclassified to Liabilities held for sale related to the AMC Divestiture.

See Note 19 “Acquisitions and Divestitures” for more details.

Long-term accrued liabilities:

As of December 31, 2023 As of June 30, 2023

As of March 31, 2024 As of June 30, 2023

Amounts payable in respect of restructuring and other special charges $ 9,141 $ 8,875

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______________________

(1) Excludes $ 0.1 million of Long-term accrued liabilities that have been reclassified to Liabilities held for sale related to the proposed divestiture of our AMC business.

See Note 19 “Acquisitions and Divestitures.”

(1) Excludes $ 2.1 million of long-term accrued liabilities and asset retirement obligations that have been reclassified to Liabilities held for sale related to the AMC Divestiture.

See Note 19 “Acquisitions and Divestitures” for more details.

Asset retirement obligations

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

As of December 31, 2023, the present value of this obligation was $ 30.4 million (June 30, 2023—$ 31.3 million), with an undiscounted value of $ 33.9 million (June 30, 2023—$ 35.0 million).

As of March 31, 2024, the present value of this obligation was $ 29.2 million (June 30, 2023—$ 31.3 million), with an undiscounted value of $ 32.1 million (June 30, 2023—$ 35.0 million), inclusive of $ 0.7 million of asset retirement obligations reclassified to Liabilities held for sale.

NOTE 11— LONG-TERM DEBT

As of December 31, 2023 As of June 30, 2023

As of March 31, 2024 As of June 30, 2023

Senior Notes 2031 $ 650,000 $ 650,000

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______________________

(1) During the three and six months ended December 31, 2023, we recorded $ 0.8 million and $ 2.4 million of debt issuance costs, respectively, related to the amendment of the Revolver (as defined below) and the modification of the Acquisition Term Loan (as defined below).

(1) During the three and nine months ended March 31, 2024, we recorded nil and $ 2.4 million of debt issuance costs, respectively, related to the amendment of the Revolver (as defined below) and the modification of the Acquisition Term Loan (as defined below) (three and nine months ended March 31, 2023— $ 8.5 million and $ 78.0 million, respectively, related to the issuance of the Senior Secured Notes 2027 and Acquisition Term Loan, each as defined below).

(2) During the three and nine months ended March 31, 2024, we recognized a loss on debt extinguishment of $ 10.8 million related to the acceleration and recognition of unamortized debt discount and issuance costs related to the optional repayments of the Acquisition Term Loan (as defined below) in Fiscal 2024.

Senior Unsecured Fixed Rate Notes

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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, 2023, we recorded interest expense of $ 6.7 million and $ 13.4 million, respectively, relating to Senior Notes 2031 (three and six months ended December 31, 2022—$ 6.7 million and $ 13.4 million, respectively).

For the three and nine months ended March 31, 2024, we recorded interest expense of $ 6.7 million and $ 20.1 million, respectively, relating to Senior Notes 2031 (three and nine months ended March 31, 2023—$ 6.7 million and $ 20.1 million, respectively).

Senior Notes 2030

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

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

Senior Notes 2030 bear interest at a rate of

4.125 % per annum, payable semi-annually in arrears on February 15 and August 15, commencing on August 15, 2020.

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

For the three and six months ended December 31, 2023, 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, 2022—$ 9.3 million and $ 18.6 million, respectively).

For the three and nine months ended March 31, 2024, 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, 2023—$ 9.3 million and $ 27.9 million, respectively).

Senior Notes 2029

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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, 2023, we recorded interest expense of $ 8.2 million and $ 16.4 million, respectively, relating to Senior Notes 2029 (three and six months ended December 31, 2022—$ 8.2 million and $ 16.4 million, respectively).

For the three and nine months ended March 31, 2024, we recorded interest expense of $ 8.2 million and $ 24.6 million, respectively, relating to Senior Notes 2029 (three and nine months ended March 31, 2023—$ 8.2 million and $ 24.6 million, respectively).

Senior Notes 2028

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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, 2023, 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, 2022—$ 8.7 million and $ 17.4 million, respectively).

For the three and nine months ended March 31, 2024, 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, 2023—$ 8.7 million and $ 26.1 million, respectively).

Senior Secured Fixed Rate Notes

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The Senior Secured Notes 2027 and the related guarantees are effectively senior to all of the Company’s and the guarantors’ senior unsecured debt to the extent of the value of the Collateral (as defined in the indenture to the Senior Secured Notes 2027) and are structurally subordinated to all existing and future liabilities of each of the Company’s existing and future subsidiaries that do not guarantee the Senior Secured Notes 2027.

As of December 31, 2023, the Senior Secured Notes 2027 bear an effective interest rate of 7.39 %.

As of March 31, 2024, the Senior Secured Notes 2027 bear an effective interest rate of 7.39 %.

The effective interest rate includes interest expense of $ 51.9 million and amortization of debt discount and issuance costs of $ 2.0 million.

For the three and six months ended December 31, 2023, we recorded interest expense of $ 17.3 million and $ 34.6 million, respectively, relating to Senior Secured Notes 2027 (three and six months ended December 31, 2022—$ 5.8 million).

For the three and nine months ended March 31, 2024, we recorded interest expense of $ 17.3 million and $ 51.9 million, respectively, relating to Senior Secured Notes 2027 (three and nine months ended March 31, 2023—$ 17.3 million and $ 23.1 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 Adjusted Term SOFR (as defined in the Term Loan B) and the applicable margin of 1.75 %.

As of December 31, 2023, the outstanding balance on the Term Loan B bears an interest rate of 7.20 %.

As of December 31, 2023, the Term Loan B bears an effective interest rate of 7.49 %.

As of March 31, 2024, the outstanding balance on the Term Loan B bears an interest rate of 7.18 %.

As of March 31, 2024, the Term Loan B bears an effective interest rate of 7.47 %.

The effective interest rate includes interest expense of $ 51.6 million and amortization of debt discount and issuance costs of $ 1.3 million.

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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, 2023, our consolidated net leverage ratio, as calculated in accordance with the applicable agreement, was 3.70 :1.00.

For the three and six months ended December 31, 2023, we recorded interest expense of $ 17.3 million and $ 34.5 million, respectively, relating to Term Loan B (three and six months ended December 31, 2022—$ 13.2 million and $ 22.9 million, respectively).

As of March 31, 2024, our consolidated net leverage ratio, as calculated in accordance with the applicable agreement, was 3.82 :1.00.

For the three and nine months ended March 31, 2024, we recorded interest expense of $ 17.1 million and $ 51.6 million, respectively, relating to Term Loan B (three and nine months ended March 31, 2023—$ 15.0 million and $ 37.9 million, respectively).

Following the end of the quarter, on May 1, 2024, we provided notices to prepay $ 2.0 billion of our aggregate outstanding debt including $ 940 million of the aggregate principal amount outstanding under Term Loan B, using the net proceeds from the AMC Divestiture.

We expect the prepayment to be made on or about May 6, 2024.

See Note 25 “Subsequent Events” for more details.

On December 19, 2023, we amended our committed revolving credit facility (the Revolver) to, among other things, extend the maturity from October 31, 2024 to December 19, 2028, and to remove the 10 -basis point credit spread adjustment for loans bearing interest based on the SOFR rate.

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Borrowings under the Revolver bear interest per annum at a floating rate of interest equal to Term SOFR (as defined in the Revolver) and a fixed margin dependent on our consolidated net leverage ratio ranging from 1.25 % to 1.75 %.

As of December 31, 2023, we had no outstanding balance under the Revolver (June 30, 2023—$ 275 million).

For the three and six months ended December 31, 2023, we recorded interest expense of $ 0.2 million and $ 2.2 million, respectively, relating to the Revolver (three and six months ended December 31, 2022— nil ).

As of March 31, 2024, we had no outstanding balance under the Revolver (June 30, 2023—$ 275 million).

For the three and nine months ended March 31, 2024, we recorded interest expense of nil and $ 2.2 million, respectively, relating to the Revolver (three and nine months ended March 31, 2023—$ 5.0 million).

Acquisition Term Loan

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Borrowings under the Acquisition Term Loan currently bear a floating rate of interest equal to 2.75 % plus Adjusted Term SOFR (as defined in the Acquisition Term Loan).

As of December 31, 2023, the outstanding balance on the Acquisition Term Loan bears an interest rate of 8.20 %.

As of December 31, 2023, the Acquisition Term Loan bears an effective interest rate of 9.31 %.

As of March 31, 2024, the outstanding balance on the Acquisition Term Loan bears an interest rate of 8.18 %.

As of March 31, 2024, the Acquisition Term Loan bears an effective interest rate of 9.29 %.

The effective interest rate includes interest expense of $ 219.5 million and amortization of debt discount and issuance costs of $ 14.5 million.

2 unchanged sentences

Under the Acquisition Term Loan, we must maintain a “consolidated net leverage” ratio of no more than 4.50 :1.00 at the end of each financial quarter.

Consolidated net leverage ratio is defined for this purpose as the proportion of the Company’s total debt reduced by unrestricted cash, including guarantees and letters of credit, over the Company’s trailing four financial quarter net income before interest, taxes, depreciation, amortization, restructuring, share-based compensation and other miscellaneous charges as defined in the Acquisition Term Loan.

As of December 31, 2023, our consolidated net leverage ratio, as calculated in accordance with the applicable agreement, was 3.70 :1:00.

net leverage ratio is defined for this purpose as the proportion of the Company’s total debt reduced by unrestricted cash, including guarantees and letters of credit, over the Company’s trailing four financial quarter net income before interest, taxes, depreciation, amortization, restructuring, share-based compensation and other miscellaneous charges as defined in the Acquisition Term Loan.

As of March 31, 2024, our consolidated net leverage ratio, as calculated in accordance with the applicable agreement, was 3.82 :1:00.

The Acquisition Term Loan is unconditionally guaranteed by certain subsidiary guarantors, as defined in the Acquisition Term Loan, and is secured by a first charge on substantially all of the assets of the Company and the subsidiary guarantors on a pari passu basis with the Revolver, Term Loan B and the Senior Secured Notes 2027.

For the three and six months ended December 31, 2023, we recorded interest expense of $ 73.1 million and $ 150.3 million, respectively, relating to the Acquisition Term Loan (three and six months ended December 31, 2022— nil , respectively).

Following the end of the quarter, on January 22, 2024, the Company repaid an additional $ 175 million drawn under the Acquisition Term Loan (see Note 25 “Subsequent Events” to our Condensed Consolidated Financial Statements for more details).

For the three and nine months ended March 31, 2024, we recorded interest expense of $ 69.2 million and $ 219.5 million, respectively, relating to the Acquisition Term Loan (three and nine months ended March 31, 2023— 48.1 million).

Following the end of the quarter, on May 1, 2024, we provided notices to prepay an additional $ 2.0 billion of our aggregate outstanding debt including $ 1.06 billion drawn under the Acquisition Term Loan using net proceeds from the AMC Divestiture.

We expect the prepayment to be made on or about May 6, 2024.

See Note 25 “Subsequent Events” for more details.

On August 25, 2022, we entered into a bridge loan agreement (Bridge Loan) which provided for commitments of up to $ 2.0 billion to finance a portion of the repayment of Micro Focus’ existing debt.

1 unchanged sentence

In connection with the amendment to the Bridge Loan and the receipt of proceeds from the issuance of the Senior Secured Notes 2027, all remaining commitments under the Bridge Loan were reduced to zero and the Bridge Loan was terminated, which resulted in a loss on debt extinguishment of $ 8.2 million relating to unamortized debt issuance costs in the second quarter of Fiscal 2023 .

For the three and six months ended December 31, 2023, we did not have any borrowings or record any interest expense relating to the Bridge Loan (three and six months ended December 31, 2022— nil ).

Debt Issuance Costs

Debt issuance costs relate primarily to costs incurred for the purpose of obtaining or amending our credit facilities and issuing our Senior Notes and are being amortized through interest expense over the respective terms of the Senior Notes, Senior Secured Notes, Term Loan B, and Acquisition Term Loan using the effective interest method and straight-line method for the Revolver.

For the three and nine months ended March 31, 2024, we did not have any borrowings or record any interest expense relating to the Bridge Loan (three and nine months ended March 31, 2023— nil ).

Debt Discount and Issuance Costs

Debt discount and issuance costs relate primarily to costs incurred for the purpose of obtaining or amending our credit facilities and issuing our Senior Notes and are being amortized through interest expense over the respective terms of the Senior Notes, Senior Secured Notes, Term Loan B, and Acquisition Term Loan using the effective interest method and straight-line method for the Revolver.

During the three and nine months ended March 31, 2024, we recognized a loss on debt extinguishment of $ 10.8 million related to the acceleration and recognition of unamortized debt discount and issuance costs resulting from the optional repayments of the Acquisition Term Loan in Fiscal 2024.

NOTE 12— PENSION PLANS AND OTHER POST-RETIREMENT BENEFITS

2 unchanged sentences

All of our pension and other post-retirement plans are located outside of Canada and the United States.

The plans are primarily located in Germany, which as of December 31, 2023, make up approximately 63 % of the Company’s total net benefit pension obligations.

The plans are primarily located in Germany, which as of March 31, 2024, make up approximately 61 % of the Company’s total net benefit pension obligations.

Our defined benefit pension plans include a mix of final salary type plans which provide for retirement, old age, disability and survivor’s benefits.

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

All of our defined benefit and other post-retirement plans are included in the aggregate projected benefit obligation within “Pension liability” on our Condensed Consolidated Balance Sheets.

of our defined benefit and other post-retirement plans are included in the aggregate projected benefit obligation within Pension liability, net on our Condensed Consolidated Balance Sheets.

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

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

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

2024 2023 2024 2023

8 unchanged sentences

Cash Dividends

For the three and six months ended December 31, 2023, pursuant to the Company’s dividend policy, we declared total non-cumulative dividends of $ 0.25 and $ 0.50 per Common Share, respectively, in the aggregate amount of $ 66.4 million and $ 133.4 million, respectively, which we paid during the same periods (three and six months ended December 31, 2022—$ 0.24299 and $ 0.48598 per Common Share, respectively, in the aggregate amount of $ 64.9 million and $ 129.6 million, respectively).

For the three and nine months ended March 31, 2024, pursuant to the Company’s dividend policy, we declared total non-cumulative dividends of $ 0.25 and $ 0.75 per Common Share, respectively, in the aggregate amount of $ 67.3 million and $ 200.7 million, respectively, which we paid during the same periods (three and nine months ended March 31, 2023—$ 0.24299 and $ 0.72897 per Common Share, respectively, in the aggregate amount of $ 64.9 million and $ 194.5 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, 2023, nil and 1,400,000 Common Shares were purchased on the open market at a cost of nil and $ 53.1 million, respectively, and held under trust for potential settlement of awards under our LTIP or other plans as described below (three and six months ended December 31, 2022— no Common Shares were purchased, respectively).

During the three and six months ended December 31, 2023, we delivered to eligible participants 353,247 and 536,560 Common Shares, respectively, that were purchased in the open market in connection with the settlement of awards and other plans (three and six months ended December 31, 2022— 290,970 and 411,376 Common Shares, respectively).

During the three and nine months ended March 31, 2024, nil and 1,400,000 Common Shares were purchased on the open market at a cost of nil and $ 53.1 million, respectively, and held under trust for potential settlement of awards under our LTIP or other plans as described below (three and nine months ended March 31, 2023— no Common Shares were purchased).

During the three and nine months ended March 31, 2024, we delivered to eligible participants 1,022,821 and 1,559,381 Common Shares, respectively, that were purchased in the open market in connection with the settlement of awards and other plans (three and nine months ended March 31, 2023— 78,650 and 490,026 Common Shares, respectively).

Share Repurchase Plan

On November 4, 2021, the Board authorized a share repurchase plan (Fiscal 2022 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, 2023 and 2022, we did not repurchase and cancel any Common Shares.

On November 4, 2021, the Board authorized a share repurchase plan (Fiscal 2022 Repurchase Plan), pursuant to which we may purchase for cancellation, 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 nine months ended March 31, 2024 and 2023, we did not repurchase and cancel any Common Shares.

On April 30, 2024, the Board authorized a new share repurchase plan (Fiscal 2024 Repurchase Plan) pursuant to which we may purchase for cancellation, in open market transactions from time to time over the 12-month period commencing on May 7, 2024 until May 6, 2025, up to $ 250 million of our Common Shares.

The Fiscal 2024 Repurchase Plan includes a normal course issuer bid to provide means to execute purchases over the Toronto Stock Exchange (TSX) (see Note 25 “Subsequent Events” for more details).

Share-Based Payments

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Three Months Ended

December 31, Six Months Ended

March 31, Nine Months Ended

2024 2023 2024 2023

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A summary of unrecognized compensation cost for unvested share-based payment awards is as follows:

As of December 31, 2023

As of March 31, 2024

Unrecognized Compensation Cost Weighted Average Recognition Period (years)

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Stock Options

A summary of activity under our stock option plans for the six months ended December 31, 2023 is as follows:

Options Weighted-

Average Exercise

Price Weighted-

Contractual Term

(years) Aggregate Intrinsic Value

A summary of activity under our stock option plans for the nine months ended March 31, 2024 is as follows:

Options Weighted-Average

Intrinsic Value

Outstanding at June 30, 2023

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Forfeited or expired ( 871,540 ) 37.62

Outstanding at December 31, 2023

Outstanding at March 31, 2024

11,977,437 $ 38.96 4.43 $ 35,333

Exercisable at December 31, 2023

Exercisable at March 31, 2024

4,562,883 $ 41.34 3.12 $ 5,566

As of December 31, 2023, 4,909,525 options to purchase Common Shares were available for issuance under our stock option plans.

As of March 31, 2024, 5,250,642 options to purchase Common Shares were available for issuance under our stock option plans.

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,

2024 2023 2024 2023

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Performance Options

During the three and six months ended December 31, 2023, we did not grant performance options (during the three and six months ended December 31, 2022— nil and 1,000,000 , respectively).

During the three and nine months ended March 31, 2024, we did not grant performance options (during the three and nine months ended March 31, 2023— nil and 1,000,000 , respectively).

For the period in which performance options were granted, the weighted-average fair value of performance options and weighted-average assumptions estimated under the Monte Carlo pricing model were as follows:

Six Months Ended December 31,

Nine Months Ended March 31,

Weighted–average fair value of options granted $ 8.09

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Performance Share Units (Issued Under LTIP)

A summary of activity under our performance share units issued under the LTIP for the six months ended December 31, 2023 is as follows:

A summary of activity under our performance share units issued under the LTIP for the nine months ended March 31, 2024 is as follows:

Units Weighted-Average

Grant Date Fair Value Weighted-

Contractual Term

(years) Aggregate Intrinsic Value

Intrinsic Value

Outstanding at June 30, 2023

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Forfeited or expired ( 88,593 ) 59.16

Outstanding at December 31, 2023

Outstanding at March 31, 2024

1,611,528 $ 56.96 1.97 $ 62,576

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For the periods indicated, the weighted-average fair value of market-based PSUs issued under LTIP, and weighted-average assumptions estimated under the Monte Carlo pricing model were as follows:

Six Months Ended December 31,

Nine Months Ended March 31,

Weighted–average fair value of performance share units granted $ 59.48

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Expected life (in years) 3.10 3.11

The weighted-average fair value of the performance-based PSUs granted was $ 40.14 for the six months ended December 31, 2023.

The weighted-average fair value of the performance-based PSUs granted was $ 40.14 for the nine months ended March 31, 2024.

Restricted Share Units (Issued Under LTIP)

A summary of activity under our RSUs issued under the LTIP for the six months ended December 31, 2023 is as follows:

A summary of activity under our RSUs issued under the LTIP for the nine months ended March 31, 2024 is as follows:

Units Weighted-Average

Grant Date Fair Value Weighted-

Contractual Term

(years) Aggregate Intrinsic Value

(years) Aggregate

Intrinsic Value

Outstanding at June 30, 2023

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Forfeited or expired ( 71,519 ) 40.19

Outstanding at December 31, 2023

Outstanding at March 31, 2024

976,133 $ 39.93 2.05 $ 37,903

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RSUs (other) vest over a specified contract date, typically two or three years from the respective date of grants.

A summary of activity under our RSUs (other) issued for the six months ended December 31, 2023 is as follows:

A summary of activity under our RSUs (other) issued for the nine months ended March 31, 2024 is as follows:

Units Weighted-Average

Grant Date Fair Value Weighted-

Contractual Term

(years) Aggregate Intrinsic Value

Intrinsic Value

Outstanding at June 30, 2023

3 unchanged sentences

Forfeited or expired ( 271,589 ) 37.47

Outstanding at December 31, 2023

Outstanding at March 31, 2024

5,101,360 $ 35.61 1.94 $ 198,086

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

A summary of activity under our DSUs issued for the six months ended December 31, 2023 is as follows:

A summary of activity under our DSUs issued for the nine months ended March 31, 2024 is as follows:

Units Weighted-Average

Price Weighted-

Contractual Term

(years) Aggregate Intrinsic Value

Intrinsic Value

Outstanding at June 30, 2023 (1)

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Granted 77,442 39.64

Outstanding at December 31, 2023 (2)

Outstanding at March 31, 2024 (2)

1,072,010 $ 30.68 0.67 $ 41,626

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

During the three and six months ended December 31, 2023, 186,974 and 473,746 Common Shares, respectively, were eligible for issuance to employees enrolled in the ESPP (three and six months ended December 31, 2022— 227,885 and 582,350 Common Shares, respectively).

During the three and six months ended December 31, 2023, cash in the amount of $ 6.7 million and $ 15.3 million, respectively, was received from employees relating to the ESPP (three and six months ended December 31, 2022—$ 5.8 million and $ 13.8 million, respectively).

During the three and nine months ended March 31, 2024, 312,990 and 786,736 Common Shares, respectively, were eligible for issuance to employees enrolled in the ESPP (three and nine months ended March 31, 2023— 266,297 and 848,647 Common Shares, respectively).

During the three and nine months ended March 31, 2024, cash in the amount of $ 10.3 million and $ 25.6 million, respectively, was received from employees relating to the ESPP (three and nine months ended March 31, 2023—$ 8.7 million and $ 22.5 million, respectively).

NOTE 14— GUARANTEES AND CONTINGENCIES

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Payments due between

Total January 1, 2024 - June 30, 2024 July 1, 2024 - June 30, 2026 July 1, 2026 - June 30, 2028 July 1, 2028 and beyond

Total April 1, 2024 - June 30, 2024 July 1, 2024 - June 30, 2026 July 1, 2026 - June 30, 2028 July 1, 2028 and beyond

Long-term debt obligations (1)

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(1) Includes interest up to maturity and principal payments.

Please see Note 11 “Long-Term Debt” for more details.

(2) For contractual obligations relating to leases and purchase obligations accounted for under ASC Topic 842, please see Note 6 “Leases.”

See Note 11 “Long-Term Debt” for more details.

(2) For contractual obligations relating to leases and purchase obligations accounted for under ASC Topic 842, see Note 6 “Leases.”

Guarantees and Indemnifications

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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, 2023, 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 $ 79 million.

As of December 31, 2023, 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, 2023.

Assuming the utilization of available tax attributes (further described below), we estimate our potential aggregate liability, as of March 31, 2024, 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 $ 79 million.

As of March 31, 2024, 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 March 31, 2024.

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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1:19-cv-11662-LTS) (the Luna Complaint).

The complaint alleges violations of the federal securities laws under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated thereunder.

The complaint alleges violations of the federal securities laws under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended (the Exchange Act), and Rule 10b-5 promulgated thereunder.

The complaint generally alleges that the defendants made materially false and misleading statements in connection with Carbonite’s Server Backup VM Edition, and seeks, among other things, the designation of the action as a class action, an award of unspecified compensatory damages, costs and expenses, including counsel fees and expert fees, and other relief as the court deems appropriate.

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On October 22, 2020, the district court granted with prejudice the defendants’ motion to dismiss the Securities Actions.

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

On November 20, 2020,

the lead plaintiff filed a notice of appeal to the United States Court of Appeals for the First Circuit.

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

On July 14, 2023, the district court certified the lead plaintiff’s proposed class, following which the defendants filed a motion for class decertification.

On January 31, 2024 the parties filed a motion for preliminary approval of a settlement to fully resolve the litigation.

The proposed settlement is subject to the court’s approvals and, if approved, will be substantially paid from insurance coverage, with any remaining amount not covered by insurance expected to be immaterial to the Company.

On January 31, 2024 the parties filed a motion for preliminary approval of a settlement to fully resolve the litigation and, on February 1, 2024, the court issued a preliminary approval order.

The proposed settlement is subject to the court’s final approval and, if approved, will be substantially paid from insurance coverage, with any remaining amount not covered by insurance being immaterial to the Company.

All defendants have denied, and continue to deny, the merit of the claims alleged in the case and the settlement does not reflect any admission of fault, wrongdoing, or liability as to any defendant.

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NOTE 15— INCOME TAXES

The Company’s effective tax rate for the three months ended December 31, 2023, increased to a provision of 17.6 %, compared to a provision of 16.4 % for the three months ended December 31, 2022.

The Company’s effective tax rate for the six

months ended December 31, 2023, decreased to a provision of 13.4 %, compared to a provision of 37.3 % for the six months ended December 31, 2022.

The Company’s effective tax rate for the three months ended December 31, 2023, differs from the Canadian statutory rate of 26.5 % primarily due to tax benefits related to foreign tax credits, research and development credits, partially offset by US Base Erosion and Anti-Abuse Tax (BEAT).

The Company’s effective tax rate for the three months ended December 31, 2022 differs from the Canadian statutory rate primarily due to tax benefits related to benefits of internal reorganizations partially offset by permanent items and uncertain tax positions.

The Company’s effective tax rate for the six months ended December 31, 2023, differs from the Canadian statutory rate of 26.5 % primarily due to tax benefits related to foreign tax credits and research and development credits, partially offset by US BEAT.

The Company’s effective tax rate for the six months ended December 31, 2022, differs from the Canadian statutory rate primarily due to permanent items and uncertain tax positions, partially offset by research and development credits.

As of December 31, 2023, the gross amount of unrecognized tax benefits accrued was $ 182.7 million (June 30, 2023 — $ 178.7 million), which is inclusive of interest and penalties accrued of $ 19.3 million (June 30, 2023 — $ 13.5 million).

The Company’s effective tax rate for the three months ended March 31, 2024, increased to a provision of 5.8 %, compared to a provision of ( 27.5 )% for the three months ended March 31, 2023.

The Company’s effective tax rate for the nine months ended March 31, 2024, decreased to a provision of 10.1 %, compared to a provision of 26.5 % for the nine months ended March 31, 2023.

The Company’s effective tax rate for the three months ended March 31, 2024, differs from the Canadian statutory rate of 26.5 % primarily due to tax benefits related to change in valuation allowance, foreign tax credits, and research and development credits, partially offset by U.S.

Base Erosion and Anti-Abuse Tax (BEAT), withholding taxes, and an increase to uncertain tax positions.

The Company’s effective tax rate for the three months ended March 31, 2023, differs from the Canadian statutory rate primarily due to tax benefits related to the internal reorganization and a pre-tax gain created by the mark-to-market valuation on the derivatives not designated as hedges that the Company entered into in connection with the Micro Focus Acquisition (see Note 17 “Derivative Instruments and Hedging Activities”).

The mark-to-market gains in the quarter were considered capital in nature for income tax purposes and 50% of realized gains were not taxable.

Other items impacting the rate included permanent items such as disallowed stock-based compensation and foreign income inclusions, offset by research and development credits, foreign tax credits and a net decrease in uncertain tax positions.

The Company’s effective tax rate for the nine months ended March 31, 2024, differs from the Canadian statutory rate of 26.5 % primarily due to tax benefits related to foreign tax credits, research and development credits, and a change in valuation allowance, partially offset by U.S.

BEAT and withholding taxes.

The Company’s effective tax rate for the nine months ended March 31, 2023, differs from the Canadian statutory rate primarily due to a net increase in uncertain tax positions, US BEAT and permanent items such as disallowed stock-based compensation and foreign passive income inclusion, partially offset by research and development credits, foreign tax credits, 50% non-taxable portion of capital gains on mark-to-market derivatives not designated as a hedge and tax benefits of internal reorganizations.

As of March 31, 2024, the gross amount of unrecognized tax benefits accrued was $ 187.3 million (June 30, 2023 — $ 178.7 million), which is inclusive of interest and penalties accrued of $ 21.1 million (June 30, 2023 — $ 13.5 million).

We believe that it is reasonably possible that the gross unrecognized tax benefit could decrease by $ 34.5 million in the next 12 months, 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.

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

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

As of December 31, 2023, we have recognized a deferred income tax liability of $ 29.5 million (June 30, 2023—$ 28.3 million) on taxable 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, refer to Note 14 “Guarantees and Contingencies.”

As of March 31, 2024, we have recognized a deferred income tax liability of $ 28.5 million (June 30, 2023—$ 28.3 million) on taxable 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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On June 8, 2022, the General Court of the CJEU found in favor of the European Commission’s decision that the UK’s ‘Financing Company Partial Exemption’ legislation is in breach of EU State Aid rules.

The UK government and UK-based

international companies, supported by Micro Focus, lodged an appeal against the judgement with the CJEU.

Micro Focus previously received and settled State Aid charging notices from HM Revenue and Customs (including historic interest) and given that an appeal would be expected to take more than a year, a long-term income tax recoverable continues to be recognized as part of non-current tangible assets as of December 31, 2023, in the preliminary purchase price allocation relating to the Micro Focus Acquisition, as described in Note 19 “Acquisitions and Divestitures.”

The UK government and UK-based international companies, supported by Micro Focus, lodged an appeal against the judgement with the CJEU.

Micro Focus previously received and settled State Aid charging notices from HM Revenue and Customs (including historic interest) and given that an appeal would be expected to take more than a year, a long-term income tax recoverable continues to be recognized as part of non-current tangible assets as of March 31, 2024, as described in Note 19 “Acquisitions and Divestitures.”

NOTE 16— FAIR VALUE MEASUREMENT

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See Note 11 “Long-Term Debt” for further details.

The following table summarizes the fair value of our financial instruments as of December 31, 2023 and June 30, 2023:

Fair Value Hierarchy December 31, 2023 June 30, 2023

The following table summarizes the fair value of our financial instruments as of March 31, 2024 and June 30, 2023:

Fair Value Hierarchy March 31, 2024 June 30, 2023

Available-for-sale financial assets (Note 9)

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Changes in Level 3 Fair Value Measurements

The following table provides a reconciliation of changes in the fair value of our Level 3 available-for-sale financial assets between June 30, 2023 and December 31, 2023.

The following table provides a reconciliation of changes in the fair value of our Level 3 available-for-sale financial assets between June 30, 2023 and March 31, 2024.

Available-for-sale

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Gain (loss) recognized in income 185

Balance as of December 31, 2023

Balance as of March 31, 2024

Our derivative liabilities and our derivative assets are classified as Level 2 and are comprised of foreign currency forward and swap contracts.

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Our Level 2 available-for-sale financial assets are comprised primarily of various debt and equity funds, which are valued utilizing market quotes provided by our third-party custodian.

Our Level 3 available-for-sale financial assets are comprised of insurance contracts which are valued by an external insurance expert by applying a discount rate to the future cash flows and taking into account the fixed interest rate, mortality rates and term of the insurance contracts.

Our Level 3 available-for-sale financial assets are comprised of insurance contracts which are valued by an

external insurance expert by applying a discount rate to the future cash flows and taking into account the fixed interest rate, mortality rates and term of the insurance contracts.

See Note 9 “Prepaid Expenses and Other Assets” for further details.

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, 2023 and 2022, respectively, we did not have any transfers between Level 1, Level 2 or Level 3.

During the three and nine months ended March 31, 2024 and 2023, 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, 2023 and 2022, respectively, no indications of impairments were identified and therefore no fair value measurements were required.

During the three and nine months ended March 31, 2024 and 2023, respectively, no indications of impairments were identified and therefore no fair value measurements were required.

NOTE 17— DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

Non-designated Hedges

In connection with the Micro Focus Acquisition, in August 2022, we entered into certain derivative transactions to meet certain foreign currency obligations under UK cash confirmation requirements related to the purchase price of the Micro Focus Acquisition, mitigate the risk of foreign currency appreciation in the GBP denominated purchase price and mitigate the risk of

foreign currency appreciation in the EUR denominated existing debt held by Micro Focus.

We entered into the following derivatives:

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We are engaged in hedging programs with various banks to limit the potential foreign exchange fluctuations incurred on future cash flows relating to a portion of our Canadian dollar payroll expenses.

We operate internationally and are therefore exposed to foreign currency exchange rate fluctuations in the normal course of our business, in particular to changes in the Canadian dollar on account of large costs that are incurred from our centralized Canadian operations, which are denominated in Canadian dollars.

Canadian dollars.

As part of our risk management strategy, we use foreign currency forward contracts to hedge portions of our payroll exposure with typical maturities of between one and twelve months .

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As the critical terms of the hedging instrument and of the entire hedged forecasted transaction are the same, in accordance with Topic 815, we have been able to conclude that changes in fair value or cash flows attributable to the risk being hedged are expected to completely offset at inception and on an ongoing basis.

Accordingly, quarterly unrealized gains or losses on the effective portion of these forward contracts have been included within “Other Comprehensive Income (Loss) - net.” As of December 31, 2023, the fair value of the contracts 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 (loss) into earnings with the next twelve months.

As of December 31, 2023, the notional amount of forward contracts we held to sell U.S.

Accordingly, quarterly unrealized gains or losses on the effective portion of these forward contracts have been included within Other comprehensive income (loss), net within the Condensed Consolidated Statements of Comprehensive Income.

As of March 31, 2024, the fair value of the contracts is recorded within Accounts payable and accrued liabilities within the Condensed Consolidated Balance Sheets and represents the net loss before tax effect that is expected to be reclassified from accumulated other comprehensive income (loss) into earnings within the next twelve months.

As of March 31, 2024, the notional amount of forward contracts we held to sell U.S.

dollars in exchange for Canadian dollars was $ 96.2 million (June 30, 2023—$ 96.3 million).

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The fair values of outstanding derivative instruments are as follows:

December 31, 2023 As of

March 31, 2024 As of

June 30, 2023

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Derivatives designated as hedges:

Cash flow hedge Prepaid expenses and other current assets $ 1,554 $ — $ 1,530 $ —

Cash flow hedge Prepaid expenses and other current assets (Accounts payable and accrued liabilities) $ — $ ( 509 ) $ 1,530 $ —

Net investment hedge Prepaid expenses and other current assets (Accounts payable and accrued liabilities)

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Three Months Ended

December 31, Six Months Ended

March 31, Nine Months Ended

Instrument Income Statement Location 2024 2023 2024 2023

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The effects of the cash flow and net investment hedges on our Condensed Consolidated Statements of Comprehensive Income:

Three Months Ended

December 31, Six Months Ended

Condensed Consolidated Statements of Income and Condensed Consolidated Statements of Comprehensive Income Location

Three Months Ended

March 31, Nine Months Ended

2024 2023 2024 2023

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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,

2024 2023 2024 2023

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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 six months ended December 31, 2023, we recognized costs of $ 12.3 million and $ 17.7 million, respectively, related to abandoned office spaces that have been early terminated or assigned to a third party, of which $ 6.1 million and $ 10.2 million, respectively, were related to the write-off of right of use assets, and $ 1.0 million and $ 1.5 million, respectively, in charges associated with the write-off of property and equipment as part of the Micro Focus Acquisition Restructuring Plan.

As of December 31, 2023, we expect total costs to be incurred in connection with the Micro Focus Acquisition Restructuring Plan to be approximately $ 160.0 million to $ 175.0 million, of which $ 123.9 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 six months ended December 31, 2023 is shown below.

During the three and nine months ended March 31, 2024, we recognized costs of $ 10.1 million and $ 27.8 million, respectively, related to abandoned office spaces that have been early terminated or assigned to a third party, of which $ 4.3 million and $ 14.5 million, respectively, were related to the write-off of right of use assets, and $ 1.0 million and $ 2.5 million, respectively, in charges associated with the write-off of property and equipment as part of the Micro Focus Acquisition Restructuring Plan.

As of March 31, 2024, we expect total costs to be incurred in connection with the Micro Focus Acquisition Restructuring Plan to be approximately $ 155.0 million to $ 170.0 million, of which $ 133.5 million has been recorded within Special charges (recoveries) within the Condensed Consolidated Statements of Income 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, 2024 is shown below.

Micro Focus Acquisition Restructuring Plan Workforce reduction Facility charges Total

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Foreign exchange and other non-cash adjustments 198 ( 2,860 ) ( 2,662 )

Balance payable as of December 31, 2023

Balance payable as of March 31, 2024

$ 14,747 $ 14,639 $ 29,386

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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 six months ended December 31, 2023, we recognized costs of $ 0.1 million and $ 0.2 million, respectively, related to abandoned office space that have been early terminated or assigned to a third party, of which nil related to the write-off of right of use assets.

Since the inception of the Fiscal 2022 Restructuring Plan, $ 32.6 million has been recorded within “Special charges (recoveries)” to date.

During the three and nine months ended March 31, 2024, we recognized costs of nil and $ 0.2 million, respectively, related to abandoned office spaces that have been early terminated or assigned to a third party, of which nil related to the write-off of right of use assets.

Since the inception of the Fiscal 2022 Restructuring Plan, $ 32.6 million has been recorded within Special charges (recoveries) in our Condensed Consolidated Financial Statements to date.

We do not expect to incur any further significant charges relating to the Fiscal 2022 Restructuring Plan.

Fiscal 2022 Restructuring Plan Workforce reduction Facility charges Total

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Foreign exchange and other non-cash adjustments ( 7 ) ( 45 ) ( 52 )

Balance payable as of December 31, 2023

Balance payable as of March 31, 2024

$ 174 $ 2,564 $ 2,738

Divestiture-related costs

Divestiture-related costs recorded within “Special charges (recoveries)” include the direct costs related to the proposed divestiture of our AMC business.

For the three and six months ended December 31, 2023, divestiture-related costs were $ 5.4 million and $ 7.0 million, respectively (three and six months ended December 31, 2022— nil ).

Divestiture-related costs, recorded within Special charges (recoveries), include the direct costs related to the AMC Divestiture.

For the three and nine months ended March 31, 2024, divestiture-related costs were $ 7.3 million and $ 14.3 million, respectively (three and nine months ended March 31, 2023— nil ) .

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, 2023 were $ 0.1 million and $ 1.1 million, respectively (three and six months ended December 31, 2022—$ 6.0 million and $ 10.6 million, respectively).

Acquisition-related costs for the three and nine months ended March 31, 2024 were $ 0.7 million and $ 1.8 million, respectively (three and nine months ended March 31, 2023—$ 34.8 million and $ 45.4 million, respectively).

Other charges (recoveries)

For the three months ended December 31, 2023, “Other charges (recoveries)” includes $ 2.5 million of compensation related charges and $ 1.3 million of other miscellaneous charges, both associated with the Micro Focus Acquisition, and $ 0.5 million related to pre-acquisition equity incentives of Zix Corporation (Zix), which upon acquisition were replaced by equivalent value cash settlements (see Note 19 “Acquisitions and Divestitures”).

For the six months ended December 31, 2023, “Other charges (recoveries)” includes $ 5.4 million of compensation related charges and $ 2.4 million of other miscellaneous charges, both associated with the Micro Focus Acquisition, and $ 0.9 million related to pre-acquisition equity incentives of Zix, which upon acquisition were replaced by equivalent value cash settlements.

For the three and six months ended December 31, 2022, “Other charges” includes $ 3.6 million and $ 7.2 million, respectively, related to Zix pre-acquisition equity incentives, which upon acquisition were replaced by equivalent value cash settlements, and $( 0.7 ) million and $( 0.2 ) million, respectively, related to other miscellaneous charges (recoveries).

For the three and nine months ended March 31, 2024, Other charges (recoveries) includes $ 0.1 million and $ 5.5 million, of compensation related charges and $ 1.7 million and $ 4.1 million of other miscellaneous charges, respectively, both associated with the Micro Focus Acquisition, along with $ 0.3 million and $ 1.2 million related to pre-acquisition equity incentives of Zix Corporation (Zix), which upon acquisition were replaced by equivalent value cash settlements (see Note 19 “Acquisitions and Divestitures”).

For the three and nine months ended March 31, 2023, Other charges (recoveries) includes $ 21.4 million of severance charges, $ 7.5 million of other miscellaneous charges, both associated with the Micro Focus Acquisition and $ 0.8 million and $ 8.0 million, respectively, related to Zix pre-acquisition equity incentives, which upon acquisition were replaced by equivalent value cash settlements, and nil and $( 0.2 ) million, respectively, related to other Zix miscellaneous charges (recoveries).

NOTE 19— ACQUISITIONS AND DIVESTITURES

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The results of operations of Micro Focus have been consolidated with those of OpenText beginning February 1, 2023.

Preliminary Purchase Price Allocation

As of December 31, 2023, the recognized amounts of identifiable assets acquired and liabilities assumed, based on their fair values as of January 31, 2023, are set forth below:

Purchase Price Allocation

As of March 31, 2024, the recognized amounts of identifiable assets acquired and liabilities assumed, based on their fair values as of January 31, 2023, are set forth below:

Cash and cash equivalents

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There is $ 67.3 million of goodwill that is deductible for tax purposes.

(3) Current period purchase price allocation adjustments of $ 23.8 million for the six months ended December 31, 2023, were primarily driven by changes in other current assets and other liabilities related to adjustments of pre-acquisition other current assets and deferred tax liabilities.

(3) Current period purchase price allocation adjustments of $ 32.1 million for the nine months ended March 31, 2024, were primarily driven by changes in other current assets and other liabilities related to adjustments of pre-acquisition other current assets and deferred tax liabilities.

A settlement related to Micro Focus’ securities litigation that was agreed to prior to the Micro Focus Acquisition has been accrued as part of the liabilities assumed.

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During the third quarter of Fiscal 2023, payment was made into escrow by insurers, and therefore both the associated receivable and liability are no longer included on the Condensed Consolidated Balance Sheets as of June 30, 2023.

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 as of January 31, 2024.

The unaudited pro forma revenues and net income (loss) of the combined entity for the three and six months ended December 31, 2022, had the Micro Focus Acquisition been consummated on July 1, 2021, are set forth below:

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

The finalization of the purchase price allocation during the three months ended March 31, 2024 did not result in any significant changes to the preliminary amounts previously disclosed.

The unaudited pro forma revenues and net income (loss) of the combined entity for the three and nine months ended March 31, 2023, had the Micro Focus Acquisition been consummated on July 1, 2021, are set forth below:

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

Supplemental Unaudited Pro Forma Information 2023 2023

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______________________

(1) Included in the pro forma net loss for the three and six months ended December 31, 2022, is a $ 448.2 million goodwill impairment by Micro Focus in its pre-acquisition historical results as a result of the Company’s offer to acquire Micro Focus at a price of 532 pence per share.

(1) Included in the pro forma net loss for the three and nine months ended March 31, 2023, is a $ 448.2 million goodwill impairment by Micro Focus in its pre-acquisition historical results as a result of the Company’s offer to acquire Micro Focus at a price of 532 pence per share.

The unaudited pro forma financial information in the table above is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the Micro Focus Acquisition had taken place at the beginning of the periods presented or the results that may be realized in the future.

Fiscal 2024 Divestiture

Proposed Divestiture of AMC Business

On November 28, 2023, the Company entered into an agreement to sell its AMC business to Rocket Software, for $ 2.275 billion in cash before taxes, fees and other adjustments.

The transaction remains subject to certain regulatory approvals and other customary closing conditions and is expected to close in the fourth quarter of Fiscal 2024.

The Company expects that the sale proceeds less costs to sell will exceed the preliminary estimate of the carrying value of the net assets for the AMC business.

Divestiture of AMC Business

On May 1, 2024, the Company completed the previously announced sale of its AMC business to Rocket Software for $ 2.275 billion in cash before taxes, fees and other adjustments.

For the three and nine months ended March 31, 2024, the results of the AMC business were recorded and presented within our Condensed Consolidated Financial Statements.

See Note 25 “Subsequent Events” for more details.

operations criteria, and the results of operations from the AMC business are presented within Income from operations in our Condensed Consolidated Statements of Income.

The Company expects that the sale proceeds less costs to sell will exceed the carrying value of the net assets for the AMC business.

The carrying value is subject to change based on developments leading up to the closing date.

The following are classified as held for sale in the Condensed Consolidated Balance Sheets, which are related to the proposed divestiture of our AMC business.

The following are classified as held for sale in the Condensed Consolidated Balance Sheets, which are related to the AMC Divestiture.

The following balances incorporate the use of management estimates and are subject to change based on developments leading up to the closing date of the transaction.

Refer to Note 1 “Basis of Presentation.”

As of December 31, 2023

As of March 31, 2024

Assets held for sale

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Total Liabilities held for sale

The Company presents its deferred tax assets and liabilities related to transactions structured as share sales within Deferred tax assets and Deferred tax liabilities in our Condensed Consolidated Balance Sheets instead of presenting them as Assets held for sale or Liabilities held for sale in accordance with our accounting policies.

The deferred tax liability associated with the share sale entities related to the AMC Divestiture, which was not presented as part of Liabilities held for sale, was $ 113.3 million as of March 31, 2024.

NOTE 20— ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

Three Months Ended December 31, 2023

Three Months Ended March 31, 2024

Foreign Currency Translation Adjustments (1)

Cash Flow Hedges Available-for-Sale Financial Assets Defined Benefit Pension Plans Accumulated Other Comprehensive Income (Loss)

Balance as of September 30, 2023

Balance as of December 31, 2023

$ ( 74,493 ) $ 1,142 $ ( 373 ) $ ( 9,775 ) $ ( 83,499 )

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Total other comprehensive income (loss), net for the period

Balance as of December 31, 2023

11,765 ( 1,516 ) 90 115 10,454

Six Months Ended December 31, 2023

Balance as of March 31, 2024

$ ( 62,728 ) $ ( 374 ) $ ( 283 ) $ ( 9,660 ) $ ( 73,045 )

Nine Months Ended March 31, 2024

Foreign Currency Translation Adjustments (1)

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Total other comprehensive income (loss), net for the period

Balance as of December 31, 2023

( 18,614 ) ( 1,498 ) 319 307 ( 19,486 )

Balance as of March 31, 2024

$ ( 62,728 ) $ ( 374 ) $ ( 283 ) $ ( 9,660 ) $ ( 73,045 )

(1) The amount of foreign currency translation recognized in other comprehensive income during the three and six months ended December 31, 2023 included net gains (losses) relating to our net investment hedges of $( 43.1 ) million and $( 26.0 ) million, respectively, as further discussed in Note 17 “Derivative Instruments and Hedging Activities.”

Three Months Ended December 31, 2022

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

Balance as of September 30, 2022

______________________

(1) The amount of foreign currency translation recognized in other comprehensive income during the three and nine months ended March 31, 2024 included net gains (losses) relating to our net investment hedges of $ 15.1 million and $( 10.9 ) million, respectively, as further discussed in Note 17 “Derivative Instruments and Hedging Activities.”

Three Months Ended March 31, 2023

Foreign Currency Translation Adjustments Cash Flow Hedges Available-for-Sale Investments Defined Benefit Pension Plans Accumulated Other Comprehensive Income (Loss)

Balance as of December 31, 2022

$ ( 263 ) $ ( 1,348 ) $ — $ 583 $ ( 1,028 )

Other comprehensive income (loss) before reclassifications, net of tax ( 28,640 ) 38 ( 900 ) ( 3,318 ) ( 32,820 )

1 unchanged sentence

Total other comprehensive income (loss), net for the period

Balance as of December 31, 2022

( 28,640 ) 737 ( 900 ) ( 3,283 ) ( 32,086 )

Six Months Ended December 31, 2022

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

Balance as of March 31, 2023

$ ( 28,903 ) $ ( 611 ) $ ( 900 ) $ ( 2,700 ) $ ( 33,114 )

Nine Months Ended March 31, 2023

Foreign Currency Translation Adjustments Cash Flow Hedges Available-for-Sale Investments Defined Benefit Pension Plans Accumulated Other Comprehensive Income (Loss)

Balance as of June 30, 2022

3 unchanged sentences

Total other comprehensive income (loss), net for the period

Balance as of December 31, 2022

( 25,587 ) 45 ( 900 ) 987 ( 25,455 )

Balance as of March 31, 2023

$ ( 28,903 ) $ ( 611 ) $ ( 900 ) $ ( 2,700 ) $ ( 33,114 )

NOTE 21— SUPPLEMENTAL CASH FLOW DISCLOSURES

Six Months Ended December 31,

Nine Months Ended March 31,

Cash paid during the period for interest $ 409,452 $ 196,238

2 unchanged sentences

NOTE 22— OTHER INCOME (EXPENSE), NET

Three Months Ended

December 31, Six Months Ended

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

2024 2023 2024 2023

4 unchanged sentences

16,671 ( 102,713 ) ( 3,551 ) ( 112,567 )

OpenText share in net income (loss) of equity investees (2)

Realized gains on derivatives

not designated as hedges (3)

— 137,471 — 137,471

OpenText share in net loss of equity investees (4)

( 835 ) ( 4,724 ) ( 19,013 ) ( 11,547 )

Loss on debt extinguishment (5) (6)

1 unchanged sentence

Other miscellaneous income (expense)

1,111 135 ( 913 ) 362

Total other income (expense), net

$ 9,950 $ 85,706 $ ( 38,664 ) $ 59,824

______________________

(1) The three and nine months ended March 31, 2023 include a foreign exchange gain of $ 36.6 million resulting from the delayed payment of a portion of the purchase consideration, settled on February 9, 2023, related to the Micro Focus Acquisition (see Note 19 “Acquisitions and Divestitures” for more details).

(2) Represents the unrealized gains (losses) on our derivatives not designated as hedges related to the Micro Focus Acquisition (see Note 17 “Derivative Instruments and Hedging Activities” for more details).

(3) Represents the realized gains (losses) on our derivatives not designated as hedges related to the Micro Focus Acquisition (see Note 17 “Derivative Instruments and Hedging Activities” for more details).

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

1 unchanged sentence

(5) On December 1, 2022, we amended the Acquisition Term Loan and Bridge Loan to reallocate commitments under the Bridge Loan to the Acquisition Term Loan and terminated all remaining commitments under the Bridge Loan which resulted in a loss on debt extinguishment related to unamortized debt issuance costs (see Note 11 “Long-Term Debt” for more details).

(6) During the three and nine months ended March 31, 2024, we recognized a loss on debt extinguishment of $ 10.8 million related to the acceleration and recognition of unamortized debt discount and issuance costs resulting from the optional repayments of the Acquisition Term Loan in Fiscal 2024 (see Note 11 “Long-Term Debt” for more details).

NOTE 23— EARNINGS (LOSS) PER SHARE

2 unchanged sentences

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

Three Months Ended

December 31, Six Months Ended

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

2024 2023 2024 2023

21 unchanged sentences

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

During the six months ended December 31, 2023, Mr.

Stephen Sadler, a member of the Board of Directors, earned $ 4 thousand (six months ended December 31, 2022 — $ 7 thousand) in consulting fees from OpenText for assistance with acquisition-related business activities.

During the nine months ended March 31, 2024, Mr.

Stephen Sadler, a member of the Board of Directors, earned $ 5 thousand (nine months ended March 31, 2023 — $ 0.3 million) 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.

1 unchanged sentence

Cash Dividends

As part of our quarterly, non-cumulative cash dividend program, we declared, on January 31, 2024, a dividend of $ 0.25 per Common Share.

The record date for this dividend is March 1, 2024 and the payment date is March 20, 2024.

As part of our quarterly, non-cumulative cash dividend program, we declared, on April 30, 2024, a dividend of $ 0.25 per Common Share.

The record date for this dividend is May 31, 2024 and the payment date is June 18, 2024.

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

Debt Repayment

Following the end of the quarter, on January 22, 2024 we repaid an additional $ 175 million on the Acquisition Term Loan using cash on hand.

As of January 31, 2024, we had a balance of $ 3.3 billion outstanding on our Acquisition Term Loan.

Divestiture of AMC Business

On May 1, 2024, the Company completed the previously announced sale of its AMC business to Rocket Software, for $ 2.275 billion in cash before taxes, fees and other adjustments.

For the three and nine months ended March 31, 2024, the results of the AMC business were recorded and presented within our Condensed Consolidated Financial Statements.

Due to the limited time since the transaction’s closing date and the size and complexity of the transaction, the Company has not completed the accounting for the business divestiture, including the determination of the gain or loss to be recognized in connection with its completion.

The Company is using the net proceeds from the transaction to prepay in full the outstanding principal balances of the Term Loan B and prepay a portion of the outstanding principal balance of the Acquisition Term Loan, as further described below under “Debt Prepayment.” The Company has also agreed to provide certain transition services to Rocket Software following completion of the divestiture for up to 24 months.

Debt Prepayment

On May 1, 2024, we provided notices to prepay $ 2.0 billion of our aggregate outstanding debt including $ 1.06 billion on the Acquisition Term Loan and $ 940 million under Term Loan B using net proceeds from the AMC Divestiture.

We expect the prepayments to be made on or about May 6, 2024, at which point the remaining balance of the Acquisition Term Loan will be $ 2.23 billion and the Term Loan B will have been repaid in full.

Share Repurchase Plan

On April 30, 2024, the Board authorized a share repurchase plan (the Fiscal 2024 Repurchase Plan), pursuant to which we may purchase for cancellation, in open market transactions from time to time over the 12 month period commencing on May 7, 2024 until May 6, 2025, up to an aggregate of $ 250 million of our Common Shares on the NASDAQ Global Select Market, the TSX (as part of a Fiscal 2024 NCIB, defined below) and/or other exchanges and alternative trading systems in Canada and/or the United States, if eligible, subject to applicable law and stock exchange rules.

Normal Course Issuer Bid (NCIB)

On April 30, 2024, the Company established a Normal Course Issuer Bid (the Fiscal 2024 NCIB) in order to provide it with a means to execute purchases over the TSX as part of the overall Fiscal 2024 Repurchase Plan.

The TSX approved the Company’s notice of intention to commence the Fiscal 2024 NCIB, pursuant to which the Company may purchase Common Shares over the TSX for the period commencing on May 7, 2024 until May 6, 2025 in accordance with the TSX's normal course issuer bid rules, including that such purchases were to be made at prevailing market prices or as otherwise permitted.

Under the rules of the TSX, the maximum number of Common Shares that may be purchased in this period is 13,643,472 (representing 5 % of the Company’s issued and outstanding Common Shares as of April 26, 2024), and the maximum number of Common Shares that could be purchased on a single day was 138,175 Common Shares, which was 25 % of 552,700 (the average daily trading volume for the Common Shares on the TSX for the six months ended March 31, 2024), subject to certain exceptions for block purchases, and subject in any case to the volume and other limitations under Rule 10b-18 under the Exchange Act.

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