What changed in this filing

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Item 1. Financial Statements

2022-04-05 compared with 2021-10-05 · 442 added, 598 removed, 335 unchanged (76% of the section changed)

Financial Statements

SYNNEX CORPORATION

TD SYNNEX CORPORATION

CONSOLIDATED BALANCE SHEETS

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

August 31, 2021

November 30, 2020

February 28, 2022 November 30, 2021

Current assets:

2 unchanged sentences

Receivables from vendors, net 1,102,988 1,118,963

Inventories 7,883,265 6,642,915

Other current assets 720,383 668,261

Current assets of discontinued operations

Total current assets 18,948,867 17,734,144

Property and equipment, net 429,765 483,443

Goodwill 3,911,973 3,917,276

Intangible assets, net 4,832,795 4,913,124

Deferred tax assets

Other assets, net 599,264 618,393

Noncurrent assets of discontinued operations

Total assets $ 28,722,664 $ 27,666,380

LIABILITIES AND EQUITY

2 unchanged sentences

Accounts payable 12,193,263 12,034,946

Accrued compensation and benefits

Other accrued liabilities 1,902,311 2,017,253

Income taxes payable

Current liabilities of discontinued operations

Total current liabilities 15,206,974 14,233,455

2 unchanged sentences

Deferred tax liabilities 1,043,677 1,015,640

Noncurrent liabilities of discontinued operations

Total liabilities 20,700,807 19,760,405

2 unchanged sentences

Preferred stock, $ 0.001 par value, 5,000 shares authorized, no shares issued or outstanding

Common stock, $ 0.001 par value, 200,000 shares authorized, 53,855 and 53,671 shares issued as of August 31, 2021 and November 30, 2020, respectively

Common stock, $ 0.001 par value, 200,000 shares authorized, 98,386 and 98,204 shares issued as of February 28, 2022 and November 30, 2021, respectively

Additional paid-in capital 7,293,780 7,271,337

Treasury stock, 2,550 and 2,538 shares as of August 31, 2021 and November 30, 2020, respectively

Accumulated other comprehensive income (loss)

Treasury stock, 2,915 and 2,633 shares as of February 28, 2022 and November 30, 2021, respectively

( 230,374 ) ( 201,139 )

Accumulated other comprehensive loss ( 317,015 ) ( 336,194 )

Retained earnings 1,275,368 1,171,873

3 unchanged sentences

The accompanying Notes are an integral part of these Consolidated Financial Statements (unaudited).

SYNNEX CORPORATION

TD SYNNEX CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

1 unchanged sentence

Three Months Ended

Nine Months Ended

August 31, 2021

August 31, 2020

August 31, 2021

August 31, 2020

February 28, 2022 February 28, 2021

Revenue $ 15,469,977 $ 4,939,014

Cost of revenue ( 14,501,316 ) ( 4,634,447 )

Gross profit 968,661 304,567

Acquisition, integration and restructuring costs ( 93,370 ) —

Selling, general and administrative expenses ( 652,851 ) ( 162,820 )

1 unchanged sentence

Interest expense and finance charges, net ( 42,343 ) ( 22,838 )

Other income (expense), net

Income from continuing operations before income taxes

Other expense, net ( 4,268 ) ( 1,333 )

Income before income taxes 175,829 117,575

Provision for income taxes ( 43,505 ) ( 29,754 )

Income from continuing operations

Income from discontinued operations, net of taxes

Net income $ 132,324 $ 87,822

Earnings per common share:

Continuing operations

Discontinued operations

Continuing operations

Discontinued operations

Basic $ 1.38 $ 1.70

Diluted $ 1.37 $ 1.69

Weighted-average common shares outstanding:

Basic 95,584 51,145

Diluted 95,892 51,563

(Amounts may not add due to rounding)

The accompanying Notes are an integral part of these Consolidated Financial Statements (unaudited).

SYNNEX CORPORATION

TD SYNNEX CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

1 unchanged sentence

Three Months Ended

Nine Months Ended

August 31, 2021

August 31, 2020

August 31, 2021

August 31, 2020

Other comprehensive income (loss):

Change in unrealized gains or losses of defined benefit plans, net of taxes of $ 0 for the three and nine months ended August 31, 2021, and $ 3,115 for the three and nine months ended August 31, 2020

Unrealized gains (losses) on cash flow hedges during the period, net of taxes of ($ 184 ) and $ 357 for the three and nine months ended August 31, 2021, respectively, and ($ 8,220 ) and $ 7,953 for the three and nine months ended August 31, 2020, respectively

Reclassification of net (gains) losses on cash flow hedges to net income, net of tax expense (benefit) of ($ 2,636 ) and ($ 7,796 ) for the three and nine months ended August 31, 2021, respectively, and ($ 563 ) and ($ 1,120 ) for the three and nine months ended August 31, 2020, respectively

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

Foreign currency translation adjustments, net of taxes of $ 308 and ($ 936 ) for the three and nine months ended August 31, 2021, respectively, and ($ 345 ) and ($ 51 ) for the three and nine months ended August 31, 2020, respectively

Other comprehensive income (loss)

February 28, 2022 February 28, 2021

Net income $ 132,324 $ 87,822

Other comprehensive income:

Unrealized gains on cash flow hedges during the period, net of tax (expense) of ($ 2,918 ) for the three months ended February 28, 2022 and ($ 38 ) for the three months ended February 28, 2021, respectively

Reclassification of net losses on cash flow hedges to net income, net of tax (benefit) of ($ 2,459 ) for the three months ended February 28, 2022 and ($ 2,539 ) for the three months ended February 28, 2021, respectively

Total change in unrealized gains on cash flow hedges, net of taxes 16,403 10,805

Foreign currency translation adjustments, net of tax (expense) of ($ 75 ) for the three months ended February 28, 2022 and ($ 844 ) for the three months ended February 28, 2021, respectively

Other comprehensive income 19,179 10,785

Comprehensive income $ 151,503 $ 98,607

1 unchanged sentence

The accompanying Notes are an integral part of these Consolidated Financial Statements (unaudited).

SYNNEX CORPORATION

TD SYNNEX CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

1 unchanged sentence

Three Months Ended

Nine Months Ended

August 31, 2021

August 31, 2020

August 31, 2021

August 31, 2020

February 28, 2022 February 28, 2021

Total Stockholders' equity, beginning balance $ 7,905,975 $ 4,338,860

12 unchanged sentences

Separation of Concentrix — ( 2,305,982 )

Net income 132,324 87,822

Cash dividends declared ( 28,829 ) ( 10,269 )

Ending balance 1,275,368 904,629

Accumulated other comprehensive income (loss):

Accumulated other comprehensive loss:

Beginning balance ( 336,194 ) ( 194,572 )

Separation of Concentrix — 3,813

Other comprehensive income (loss)

Other comprehensive income 19,179 10,785

Ending balance ( 317,015 ) ( 179,973 )

3 unchanged sentences

The accompanying Notes are an integral part of these Consolidated Financial Statements (unaudited).

SYNNEX CORPORATION

TD SYNNEX CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(currency in thousands)

Nine Months Ended

August 31, 2021

August 31, 2020

Three Months Ended

February 28, 2022 February 28, 2021

Cash flows from operating activities:

Adjustments to reconcile net income to net cash provided by operating activities:

Net income $ 132,324 $ 87,822

Adjustments to reconcile net income to net cash (used in) provided by operating activities:

Depreciation and amortization 155,501 15,614

1 unchanged sentence

Provision for doubtful accounts 15,927 901

Deferred income taxes

Unrealized foreign exchange (gains) losses

Other 3,424 3,947

Changes in operating assets and liabilities, net of the impact of Concentrix separation:

1 unchanged sentence

Receivables from vendors, net 14,721 17,136

Inventories ( 1,243,348 ) 126,927

Accounts payable 149,738 ( 636,045 )

Other operating assets and liabilities ( 148,081 ) ( 23,264 )

Net cash provided by operating activities

Net cash (used in) provided by operating activities ( 1,320,448 ) 24,977

Cash flows from investing activities:

Purchases of property and equipment ( 25,217 ) ( 4,253 )

Acquisition of businesses

Net cash used in investing activities ( 25,217 ) ( 4,041 )

Cash flows from financing activities:

Proceeds from borrowings

Repayments of borrowings

Dividends paid ( 28,829 ) ( 10,269 )

Repurchases of common stock ( 23,757 ) —

Increase (decrease) in book overdraft

Net borrowings on revolving credit loans 930,844 13,022

Principal payments on long term debt ( 20,400 ) —

Proceeds from issuance of common stock 2,116 174

1 unchanged sentence

Net transfer of cash and cash equivalents to Concentrix — ( 149,948 )

Proceeds from issuance of Bonds

Debt issuance cost

Net cash provided by (used in) financing activities 854,496 ( 147,219 )

Effect of exchange rate changes on cash, cash equivalents and restricted cash 6,663 1,640

Net increase in cash, cash equivalents and restricted cash

Net decrease in cash, cash equivalents and restricted cash ( 484,506 ) ( 124,645 )

Cash, cash equivalents and restricted cash at beginning of period 994,913 1,568,870

Cash, cash equivalents and restricted cash at end of period $ 510,407 $ 1,444,225

Supplemental disclosure of non-cash investing activities:

Accrued costs for property and equipment purchases

Supplemental disclosure of non-cash financing activities:

2 unchanged sentences

The accompanying Notes are an integral part of these Consolidated Financial Statements (unaudited).

SYNNEX CORPORATION

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three and nine months ended August 31, 2021 and 2020

For the three months ended February 28, 2022 and 2021

( Except per share amounts or as otherwise indicated, currency and share amounts in thousands )

NOTE 1—ORGANIZATION AND BASIS OF PRESENTATION:

SYNNEX Corporation (together with its subsidiaries, herein referred to as “SYNNEX” or the “Company”) is a leading provider of a comprehensive range of distribution, systems design and integration solutions for the technology industry, headquartered in Fremont, California and has operations in North and South America, Asia-Pacific and Europe.

On December 1, 2020 , the Company completed the previously announced separation of its customer experience services business (the “Separation”), in a tax-free transaction for federal income tax purposes, which was accomplished by the distribution of one hundred per cent of the outstanding common stock of Concentrix Corporation (“Concentrix”) to SYNNEX stockholders as of the close of business on November 17, 2020 , the record date for the distribution.

TD SYNNEX Corporation (together with its subsidiaries, herein referred to as “SYNNEX”, "TD SYNNEX" or the “Company”) is a leading global distributor and solutions aggregator for the information technology ("IT") ecosystem, headquartered in Fremont, California and Clearwater, Florida and has operations in North and South America, Europe and Asia-Pacific and Japan.

On December 1, 2020, the Company completed the previously announced separation of its customer experience services business (the “Separation”), in a tax-free transaction for federal income tax purposes, which was accomplished by the distribution of one hundred percent of the outstanding common stock of Concentrix Corporation (“Concentrix”).

SYNNEX stockholders received one share of Concentrix common stock for every share of SYNNEX common stock held at the close of business on the record date.

The Company distributed 51,602 shares of Concentrix common stock to its stockholders.

The Company distributed 51.6 million shares of Concentrix common stock to its stockholders.

Concentrix is now an independent public company trading under the symbol “CNXC” on the Nasdaq Stock Market.

After the Separation, SYNNEX does not beneficially own any shares of Concentrix’ common stock.

After the Separation, the Company does not beneficially own any shares of Concentrix’ common stock.

Beginning December 1, 2020, the Company no longer consolidates Concentrix within its financial results or reflects the financial results of Concentrix within its continuing results of operations.

The financial results of Concentrix for the three and nine months ended August 31, 2020 are presented as income from discontinued operations, net of taxes on the Consolidated Statements of Operations and its assets and liabilities as of November 30, 2020 are presented as discontinued operations in the Consolidated Balance Sheets.

The historical statements of comprehensive income, cash flows and the balances in stockholders' equity have not been revised to reflect the effect of the Separation.

For further information on discontinued operations, see Note 3 - Discontinued Operations.

Unless noted otherwise, discussion in the Notes to the Consolidated Financial Statements pertain to continuing operations.

In connection with the Separation, the Company and Concentrix entered into a separation and distribution agreement as well as various other agreements that provide a framework for the relationships between the parties going forward, including among others an employee matters agreement, a tax matters agreement, and a commercial agreement, pursuant to which Concentrix will continue to provide certain limited services to SYNNEX following the Separation.

The accompanying interim unaudited Consolidated Financial Statements as of August 31, 2021 and for the three and nine months ended August 31, 2021 and 2020 have been prepared by the Company in accordance with the rules and regulations of the Securities and Exchange Commission.

The amounts as of November 30, 2020 have been derived from the Company’s annual audited financial statements.

On March 22, 2021, SYNNEX entered into an agreement and plan of merger (the “Merger Agreement”) which provided that legacy SYNNEX Corporation would acquire legacy Tech Data Corporation, a Florida corporation ("Tech Data") through a series of mergers, which would result in Tech Data becoming an indirect subsidiary of TD SYNNEX Corporation (collectively, the "Merger").

On September 1, 2021, pursuant to the terms of the Merger Agreement, the Company acquired all the outstanding shares of common stock of Tiger Parent (AP) Corporation, the parent corporation of Tech Data, for consideration of $ 1.61 billion in cash ($ 1.11 billion in cash after giving effect to a $ 500 million equity contribution by Tiger Parent Holdings, L.P., Tiger Parent (AP) Corporation's sole stockholder and an affiliate of Apollo Global Management, Inc., to Tiger Parent (AP) Corporation prior to the effective time of the Merger) and 44 million shares of common stock of SYNNEX valued at approximately $ 5.61 billion.

The combined company is referred to as TD SYNNEX.

References to the "Company" indicate TD SYNNEX for periods after the Merger and SYNNEX for periods prior to the Merger.

The Consolidated Financial Statements include the accounts of the Company, its wholly-owned subsidiaries, majority-owned subsidiaries in which no substantive participating rights are held by minority stockholders and variable interest entities if the Company is the primary beneficiary.

All intercompany accounts and transactions have been eliminated.

The Company operates on a fiscal year that ends on November 30.

The accompanying interim unaudited Consolidated Financial Statements as of February 28, 2022 and for the three months ended February 28, 2022 and 2021 have been prepared by the Company, without audit, in accordance with the rules and regulations of the United States ("U.S.") Securities and Exchange Commission ("SEC").

Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles (“GAAP”) in the United States have been condensed or omitted in accordance with such rules and regulations.

1 unchanged sentence

These financial statements should be read in conjunction with the annual audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended November 30, 2021.

On March 22, 2021, the Company entered into an agreement and plan of merger (the “Merger Agreement”) to acquire 100 % of Tiger Parent (AP) Corporation, the parent company of Tech Data Corporation (“Tech Data”), in a cash and stock transaction (the "Merger").

On September 1, 2021, pursuant to the terms of the Merger Agreement, the Company acquired all the outstanding shares of common stock of Tiger Parent (AP) Corporation for consideration of $ 1.61 billion in cash and 44 million shares of common stock of SYNNEX.

The combined company is referred to as TD SYNNEX.

See Note 17 – Subsequent Event for further discussion.

Interim results of operations are not necessarily indicative of financial results for a full year, and the Company makes no representations related thereto.

Certain columns and rows may not add due to the use of rounded numbers.

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended February 28, 2022 and 2021

( Except per share amounts or as otherwise indicated, currency and share amounts in thousands )

NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

For a discussion of the Company’s significant accounting policies, refer to the discussion in the Company’s Annual Report on Form 10-K for the fiscal year ended November 30, 2021.

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

Accounting pronouncements adopted during the three months ended February 28, 2022 are discussed below.

Use of Estimates

1 unchanged sentence

The Company evaluates these estimates on a regular basis and bases them on historical experience and on various assumptions that the Company believes are reasonable.

The COVID-19 pandemic has negatively impacted the global economy, disrupted global supply chains and work force participation and created volatility and disruption of financial markets, the impact of which was most acute during the second quarter of fiscal year 2020.

Despite improvements in the global economy since

SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

For the three and nine months ended August 31, 2021 and 2020

( Except per share amounts or as otherwise indicated, currency and share amounts in thousands )

the onset of the pandemic, the resurgence of the Delta variant and other mutations bring uncertainty to continued economic recovery.

As a result, the Company cannot at this time accurately predict what effects these conditions will have on its operations and financial condition, including due to the uncertainties relating to the severity and duration of the pandemic, the effect on its customers and customer demand and the length of the restrictions and closures imposed by various governments.

The COVID-19 pandemic has negatively impacted the global economy, disrupted global supply chains and work force participation and created volatility and disruption of financial markets.

Despite improvements in the global economy since the onset of the pandemic, the emergence of the Delta and Omicron variants and other mutations bring uncertainty to continued economic recovery.

Consequently, many of the estimates and assumptions required increased judgment and carry a higher degree of variability and volatility.

As events continue to evolve and additional information becomes av ailable, these estimates may change in future periods.

As events continue to evolve and additional information becomes available, these estimates may change in future periods.

Actual results could differ from the estimates.

2 unchanged sentences

The Company’s cash and cash equivalents and derivative instruments are transacted and maintained with financial institutions with high credit standing, and their compositions and maturities are regularly monitored by management.

Through August 31, 2021, the Company has not experienced any credit losses on such deposits and derivative instruments.

The Company has not experienced any material credit losses on such deposits and derivative instruments.

Accounts receivable include amounts due from customers, including related party customers.

Receivables from vendors, net, includes amounts due from original equipment manufacturer (“OEM”) vendors primarily in the technology industry.

Receivables from vendors, net, includes amounts due from original equipment manufacturer ("OEM") vendors.

The Company performs ongoing credit evaluations of its customers’ financial condition and limits the amount of credit extended when deemed necessary, but generally requires no collateral.

The Company also maintains allowances for expected credit losses.

In estimating the required allowances, the Company takes into consideration the overall quality and aging of its receivable portfolio, the existence of a limited amount of credit insurance and specifically identified customer and vendor risks.

In estimating the required allowances, the Company takes into consideration the overall quality and aging of its receivable portfolio, the existence of credit insurance and specifically identified customer and vendor risks.

The Company also considers risks attributed to COVID-19 in establishing the required allowances.

Through August 31, 2021, such losses have been within management’s expectations.

One customer accounted for 23 % and 29 % of the Company’s total revenue during the three and nine months ended August 31, 2021, respectively.

The same customer accounted for 23 % and 22 % of the Company’s total revenue during the three and nine months ended August 31, 2020, respectively.

Products purchased from the Company’s largest OEM supplier, HP Inc., accounted for approximately 13 % of total revenue during both the three and nine months ended August 31, 2021, respectively, and approximately 15 % of total revenue during both the three and nine months ended August 31, 2020.

As of August 31, 2021 and November 30, 2020, one customer comprised 25 % and 15 %, respectively, of the consolidated accounts receivable balance.

The following table provides revenue generated from products purchased from vendors that exceeded 10% of our consolidated revenue for the periods indicated (as a percent of consolidated revenue):

Three Months Ended

February 28, 2022 February 28, 2021

( 1) Revenue generated from products purchased from this vendor was less than 10% of consolidated revenue during the period presented.

No single customer accounted for more than 10% of the Company's total revenue during the three months ended February 28, 2022.

One customer accounted for 18 % of the Company’s total revenue during the three months ended February 28, 2021.

As of February 28, 2022 and November 30, 2021, no single customer comprised more than 10% of the consolidated accounts receivable balance.

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended February 28, 2022 and 2021

( Except per share amounts or as otherwise indicated, currency and share amounts in thousands )

Accounts receivable

The Company maintains an allowance for doubtful accounts as an estimate to cover the future expected credit losses resulting from uncertainty regarding collections from customers or OEM vendors to make payments for outstanding balances.

In estimating the required allowance, the Company takes into consideration historical credit losses, current conditions and reasonable and supportable forecasts.

Adjustments to historical loss information are made for differences in current conditions as well as changes in forecasted macroeconomic conditions, such as changes in unemployment rates or gross domestic product growth.

Expected credit losses are estimated on a pool basis when similar risk characteristics exist using an age-based reserve model.

Receivables that do not share risk characteristics are evaluated on an individual basis.

The Company has uncommitted supply-chain financing programs with global financial institutions under which trade accounts receivable of certain customers and their affiliates may be acquired, without recourse, by the financial institutions.

Available capacity under these programs is dependent on the level of the Company’s trade accounts receivable with these customers and the financial institutions’ willingness to purchase such receivables.

In addition, certain of these programs also require that the Company continue to service, administer and collect the sold accounts receivable.

As of February 28, 2022 and November 30, 2021, accounts receivable sold to and held by the financial institutions under these programs were $ 966.0 million and $ 759.9 million, respectively.

Discount fees related to the sale of trade accounts receivable under these facilities are included in “Interest expense and finance charges, net” in the Consolidated Statements of Operations.

Discount fees for these programs in the three months ended February 28, 2022 and February 28, 2021 tota led $ 3.0 million an d $ 0.6 million, r espectively.

Inventories are stated at the lower of cost and net realizable value.

4 unchanged sentences

Operating segments are based on components of the Company that engage in business activities that earn revenues and incur expenses (a) whose operating results are regularly reviewed by the Company’s chief operating decision maker to make decisions about resource allocation and performance and (b) for which discrete financial information is available.

The Company had two reportable segments:

Prior to the Separation, the Company had two reportable segments:

Technology Solutions and Concentrix.

After giving effect to the Separation of the Concentrix segment, the Company now operates a single reportable segment, which represents an aggregation of four geographic operating segments of United States, Canada, Japan and Latin America.

The Company distributes peripherals, IT systems, including data center servers, system components, software, networking, communications and security equipment, consumer electronics and complementary products to a variety of customers, including value-added resellers, system integrators and retailers.

The Company also designs and integrates data center equipment built specific to the customers' data center environment.

SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

For the three and nine months ended August 31, 2021 and 2020

( Except per share amounts or as otherwise indicated, currency and share amounts in thousands )

After giving effect to the Separation of the Concentrix segment, the Company operated with one reportable segment:

Technology Solutions.

After completion of the Merger, the Company reviewed its reportable segments as there was a change in its chief executive officer, who is also the Company’s chief operating decision maker.

The Company’s chief operating decision maker has a leadership structure aligned with the geographic locations of the Americas, Europe and Asia-Pacific and Japan (“APJ”) and reviews and allocates resources based on these geographic locations.

As a result, as of September 1, 2021 the Company began operating in three reportable segments based on its geographic locations:

the Americas, Europe and APJ.

The Company's operating results are affected by the seasonality of the IT products industry.

The Company has historically experienced higher sales in the first and fourth fiscal quarters due to patterns in capital budgeting, government spending and purchasing cycles of its customers and end-users.

These historical patterns may not be repeated in subsequent periods.

Revenue Recognition

2 unchanged sentences

The Company accounts for a contract with a customer when it has written approval, the contract is committed, the rights of the parties, including payment terms, are identified, the contract has commercial substance and consideration is probable of collection.

Binding purchase orders from customers together with agreement to the Company's terms and conditions of sale by way of an executed agreement or other signed documents are considered to be the contract with a customer.

Binding purchase orders

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended February 28, 2022 and 2021

( Except per share amounts or as otherwise indicated, currency and share amounts in thousands )

from customers together with agreement to the Company's terms and conditions of sale by way of an executed agreement or other signed documents are considered to be the contract with a customer.

Products sold by the Company are delivered via shipment from the Company’s facilities, drop-shipment directly from the vendor, or by electronic delivery of software products.

12 unchanged sentences

Shipping revenue is included in revenue when control of the product is transferred to the customer, and the related shipping and handling costs are included in cost of revenue.

Reclassifications

Certain reclassifications have been made to prior period amounts in the Consolidated Financial Statements to conform to the current period presentation.

These reclassifications did not have a material impact on previously reported amounts.

Recently adopted accounting pronouncements

In August 2018, the Financial Accounting Standard Board (“FASB”) issued new guidance to add, remove, and clarify disclosure requirements related to defined benefit pension and other postretirement plans.

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

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

In December 2019, the Financial Accounting Standards Board ("FASB") issued new guidance that simplifies the accounting for income taxes.

The guidance is effective for annual reporting periods beginning after December 15, 2020, and interim periods within those reporting periods.

Certain amendments should be applied prospectively, while other amendments should be applied retrospectively to all periods presented.

The adoption of this new guidance did not have a material impact on the Company's Consolidated Financial Statements.

In August 2018, the FASB issued guidance to improve the effectiveness of fair value measurement disclosures by removing or modifying certain disclosure requirements and adding other requirements.

Certain amendments should be applied prospectively, while all other amendments should be applied retrospectively to all periods presented.

This guidance was applicable to the Company at the beginning of fiscal year 2021 and its adoption did not have a material impact on the Company's Consolidated Financial Statements.

In June 2016, the FASB issued a new credit loss standard to replace the incurred loss impairment methodology.

The new impairment model requires immediate recognition of estimated credit losses expected to occur for most financial assets and certain other instruments.

This new standard is to be adopted by way of a cumulative-effect adjustment to retained earnings as of the beginning of the first effective reporting period.

This guidance was applicable to the Company at the beginning of fiscal year 2021 and its adoption did not have a material impact on the Company's Consolidated Financial Statements.

In October 2021, the FASB issued new guidance which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with Accounting Standards Codification ("ASC") 606, “Revenue from Contracts with Customers.” Generally, this new guidance will result in the acquirer recognizing contract assets and contract liabilities at the same amounts recorded by the acquiree.

Historically, such amounts were recognized by the acquirer at fair value in acquisition accounting.

The guidance is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years (the fiscal quarter ending February 28, 2023 for the Company), and should be applied prospectively to acquisitions occurring on or after the effective date.

Early adoption is permitted.

The Company adopted this standard during the fiscal quarter ended February 28, 2022 and will apply the guidance prospectively to future acquisitions.

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended February 28, 2022 and 2021

( Except per share amounts or as otherwise indicated, currency and share amounts in thousands )

Recently issued accounting pronouncements

2 unchanged sentences

The amendments are elective and are effective upon issuance for all entities through December 31, 2022.

The Company is currently evaluating the impact of the new guidance.

In December 2019, the FASB issued new guidance that simplifies the accounting for income taxes.

The guidance is effective for annual reporting periods beginning after December 15, 2020, and interim periods within those reporting periods.

Certain amendments should be applied prospectively, while other amendments should be applied retrospectively to all periods presented.

The Company is currently evaluating the impact of the new guidance.

SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

For the three and nine months ended August 31, 2021 and 2020

( Except per share amounts or as otherwise indicated, currency and share amounts in thousands )

NOTE 3—DISCONTINUED OPERATIONS:

The following table summarizes the financial results from discontinued operations of Concentrix included in the Consolidated Statement of Operations:

Three Months Ended

Nine Months Ended

August 31, 2020

Costs and expenses

Interest expense and finance charges and others, net

Income from discontinued operations before taxes

Provision for income taxes

Income from discontinued operations, net of taxes

There were no revenues earned or cost and expenses incurred of discontinued operations during the three and nine months ended August 31, 2021.

There were no non-cash items or capital expenditures of discontinued operations during the nine months ended August 31, 2021.

During the nine months ended August 31, 2020, significant non-cash items and capital expenditures of discontinued operations included in the consolidated statement of cash flows are outlined below:

Nine Months Ended

August 31, 2020

Operating activities:

Depreciation and amortization

Share-based compensation

Provision for doubtful accounts

Deferred income taxes

Unrealized foreign exchange (gains) losses

Investing activities:

Purchases of property and equipment

SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

For the three and nine months ended August 31, 2021 and 2020

The Company does not currently expect any material impacts from the adoption of this new guidance.

NOTE 3— ACQUISITIONS:

Tech Data Merger

On September 1, 2021, pursuant to the terms of the Merger Agreement, the Company acquired all the outstanding shares of common stock of Tiger Parent (AP) Corporation, the parent corporation of Tech Data, for an aggregate purchase price of $ 7.22 billion, comprised of $ 1.61 billion in cash ($ 1.11 billion in cash after giving effect to a $ 500 million equity contribution by Tiger Parent Holdings, L.P., Tiger Parent (AP) Corporation’s sole stockholder and an affiliate of Apollo Global Management, Inc., to Tiger Parent (AP) Corporation prior to the effective time of the Merger) and 44 million shares of common stock of SYNNEX, valued at approximately $ 5.61 billion based on the closing price of the Company’s common stock on September 1, 2021.

The Merger created a leading global distributor and solutions aggregator for the IT ecosystem.

The Company used the net proceeds from the issuance of new Senior Notes, borrowings under its new credit agreement and cash on hand to fund the above payments.

Additionally, the Company repaid the majority of Tech Data's outstanding debt after the Merger, including approximately $ 2.4 billion outstanding under Tech Data’s existing Asset-Based Credit Agreement and approximately $ 0.2 billion of outstanding Tech Data Senior Notes.

The Company has accounted for the Merger as a business combination and allocated the purchase price to the estimated fair values of Tiger Parent (AP) Corporation’s assets acquired and liabilities assumed.

The Company has not yet completed its evaluation and determination of certain assets acquired and liabilities assumed, primarily (i) the final assessment and valuation of certain assets acquired and liabilities assumed, including accounts receivable, receivables from vendors, inventory, accrued expenses and other liabilities and (ii) the final assessment and valuation of certain income tax amounts.

Therefore, the final fair values of the assets and liabilities may vary from the Company's preliminary estimates.

No material adjustments to the preliminary allocation of the purchase price were recorded during the three months ended February 28, 2022.

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended February 28, 2022 and 2021

( Except per share amounts or as otherwise indicated, currency and share amounts in thousands )

The following table presents assets and liabilities that were transferred to Concentrix as of December 1, 2020 and presented as discontinued operations in the Consolidated Balance Sheet as of November 30, 2020:

November 30, 2020

The preliminary allocation of the purchase price is as follows:

Cash and cash equivalents $ 702,907

Accounts receivable, net 5,150,725

Receivables from vendors, net 730,431

Inventories 2,994,842

Other current assets 395,984

Current assets of discontinued operations

Property and equipment, net

Intangible assets, net

Deferred tax assets

Noncurrent assets of discontinued operations

Property and equipment 347,532

Goodwill 3,543,426

Intangible assets 4,933,900

Other assets 474,000

Total assets 19,273,747

Borrowings, current 493,076

Accounts payable 6,613,031

Accrued compensation and benefits

Other accrued liabilities 1,246,962

Income taxes payable

Current liabilities of discontinued operations

Long-term borrowings 2,218,672

1 unchanged sentence

Deferred tax liabilities 1,061,019

Noncurrent liabilities of discontinued operations

In connection with the Separation, $ 3,813 of accumulated other comprehensive income, net of income taxes, related to foreign currency translation adjustments, cash flow hedges and pension plan obligations was transferred to Concentrix on the Separation date.

Refer to Note 5 - Balance Sheet Components for more information.

Total liabilities 12,049,347

Purchase consideration $ 7,224,400

The allocation of the value of identifiable intangible assets is as follows:

Fair value Weighted average useful life

Customer relationships $ 3,860,200 14 years

Trade name 1,073,700 Indefinite lived

Total intangibles acquired $ 4,933,900

Goodwill is the excess of the consideration transferred over the net assets recognized and primarily represents future economic benefits arising from assets acquired that are not individually identified and separately recognized, including synergies inherent in the acquired business, of which approximately $ 500 million is expected to be deductible for tax purposes.

Included within the Company’s Consolidated Statement of Operations are revenues for the three months ended February 28, 2022, of approximately $ 10.0 billion from Tech Data.

As the Company began integrating certain sales and other functions after the closing of the acquisition, these amounts represent an estimate of the Tech Data revenues for the three months ended February 28, 2022.

It is not necessarily indicative of how the Tech Data operations would have performed on a stand-alone basis.

As a result of certain integration activities subsequent to the date of acquisition, it is impracticable to disclose net income from Tech Data for the period subsequent to the acquisition date.

The following table presents unaudited supplemental pro forma information as if the Merger had occurred at the beginning of fiscal 2020, after giving effect to certain adjustments related to the transaction.

The pro forma results exclude any benefits that may result from potential cost savings and certain non-recurring costs.

As a result, the pro forma

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended February 28, 2022 and 2021

( Except per share amounts or as otherwise indicated, currency and share amounts in thousands )

information below does not purport to present what actual results would have been had the Merger been consummated on the date indicated and it is not necessarily indicative of the results of operations that may result in the future.

Three Months Ended

February 28, 2021

Revenue $ 15,245,644

Net income $ 136,324

Adjustments reflected in the pro forma results include the following:

• Amortization of acquired intangible assets

• Interest costs associated with the Merger

• Tax effects of adjustments based on an estimated statutory tax rate

NOTE 4— ACQUISITION, INTEGRATION AND RESTRUCTURING COSTS:

Acquisition, integration and restructuring costs are primarily comprised of costs related to the Merger and costs related to the Global Business Optimization 2 Program initiated by Tech Data prior to the Merger (the “GBO 2 Program”).

There were no acquisition, integration and restructuring costs incurred during the three months ended February 28, 2021.

The Company incurred acquisition, integration and restructuring costs related to the completion of the Merger, including professional services costs, personnel and other costs, long-lived assets charges and stock-based compensation expense.

Professional services costs are primarily comprised of legal expenses and tax and other consulting services.

Personnel and other costs are primarily comprised of costs related to retention and other bonuses, as well as severance costs.

Long-lived assets charges are comprised of accelerated depreciation and amortization expense of $ 52.9 million recorded due to changes in asset useful lives in conjunction with the consolidation of certain IT systems.

Stock-based compensation expense primarily relates to costs associated with the conversion of certain Tech Data performance-based equity awards issued prior to the Merger into restricted shares of TD SYNNEX (refer to Note 5 - Share-Based Compensation for further information) and expenses for certain restricted stock awards issued in conjunction with the Merger.

During the three months ended February 28, 2022, acquisition and integration expenses related to the Merger were composed of the following:

Three Months Ended

February 28, 2022

Professional services costs $ 8,148

Personnel and other costs 10,944

Long-lived assets charges 52,871

Stock-based compensation 13,576

Total $ 85,539

GBO 2 Program

Prior to the Merger, Tech Data implemented its GBO 2 Program that includes investments to optimize and standardize processes and apply data and analytics to be more agile in a rapidly evolving environment, increasing productivity, profitability and optimizing net-working capital.

TD SYNNEX plans to continue this program in conjunction with the Company’s integration activities.

Acquisition, integration and restructuring expenses related to the GBO 2 Program are primarily comprised of restructuring costs and other professional services costs.

Restructuring costs are comprised of severance costs and other associated exit costs, including certain consulting costs.

Other professional services

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended February 28, 2022 and 2021

( Except per share amounts or as otherwise indicated, currency and share amounts in thousands )

costs are primarily comprised of professional services fees not related to restructuring activities, including costs related to improving profitability and optimizing net-working capital.

Acquisition, integration and restructuring costs under the GBO 2 Program for fiscal 2022 included the following:

Three Months Ended

February 28, 2022

Restructuring costs $ 6,046

Other professional services costs 1,785

Total $ 7,831

Restructuring costs under the GBO 2 Program for fiscal 2022 were composed of the following:

Three Months Ended

February 28, 2022

Severance $ 359

Other exit costs 5,687

Total $ 6,046

During the three months ended February 28, 2022, the Company recorded restructuring costs related to GBO 2 of $ 1.8 million, $ 3.9 million and $ 0.3 million, for the Americas, Europe and APJ regions, respectively.

Restructuring activity during the three months ended February 28, 2022 related to the GBO 2 Program is as follows:

Severance and Benefits Other Exit Costs Total

Accrued balance as of November 30, 2021

$ 4,918 $ 1,591 $ 6,509

Expenses 359 5,687 6,046

Cash payments ( 3,104 ) ( 6,755 ) ( 9,859 )

Foreign currency translation ( 2 ) ( 66 ) ( 68 )

Accrued balance as of February 28, 2022

$ 2,171 $ 457 $ 2,628

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended February 28, 2022 and 2021

( Except per share amounts or as otherwise indicated, currency and share amounts in thousands )

NOTE 5—SHARE-BASED COMPENSATION:

Overview of TD SYNNEX stock incentive plans

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

The following table summarizes the number of share-based awards granted under the Company’s stock incentive plans, during the three and nine months ended August 31, 2021 and 2020, and the measurement-date fair value of those awards:

Three Months Ended

Nine Months Ended

August 31, 2021

August 31, 2020

August 31, 2021

August 31, 2020

The following tables summarize the Company's share-based awards activity for TD SYNNEX stock incentive plans during the three months ended February 28, 2022.

A summary of the changes in the Company's stock options is set forth below:

Stock options

Restricted stock awards

Restricted stock units

* Less than a thousand units.

SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

For the three and nine months ended August 31, 2021 and 2020

Balances, November 30, 2021

Exercised ( 17 )

Balances, February 28, 2022

A summary of the changes in the Company's non-vested restricted stock awards and stock units is presented below:

Restricted stock awards and Restricted stock units

Nonvested at November 30, 2021

Vested ( 150 )

Canceled ( 36 )

Nonvested at February 28, 2022

The Company recorded $ 8.7 million and $ 4.9 million of share-based compensation expense in the Consolidated Statements of Operations for TD SYNNEX stock incentive plans during the three months ended February 28, 2022 and 2021, respectively, including $ 1.9 million recorded in “Acquisition, integration, and restructuring costs" during the three months ended February 28, 2022 for share-based awards issued in conjunction with the Merger.

Tech Data Equity Awards

Prior to the Merger, certain of Tech Data’s employees were granted performance-based equity awards in Tiger Parent Holdings L.P., a partnership entity that was the parent company of Tiger Parent (AP) Corporation and Tech Data, that were unvested at the time of the closing of the Merger.

Upon closing of the Merger, the unvested performance-based equity awards were converted into restricted shares of TD SYNNEX that vest over two years .

The following table summarizes the activity related to these restricted shares during the three months ended February 28, 2022:

Restricted shares

Nonvested at November 30, 2021

Canceled ( 15 )

Nonvested at February 28, 2022

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended February 28, 2022 and 2021

( Except per share amounts or as otherwise indicated, currency and share amounts in thousands )

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

Three Months Ended

Nine Months Ended

August 31, 2021

August 31, 2020

August 31, 2021

August 31, 2020

Total share-based compensation (recorded in selling, general and

administrative expenses)

Tax benefit recorded in the provision for income taxes

Effect on net income

In connection with the Separation, as required by the SYNNEX stock incentive plans, the Company made certain adjustments to outstanding employee equity awards with the intention of preserving the intrinsic value of the awards prior to the Separation.

There were 1,452 awards outstanding at November 30, 2020.

In accordance with the employee matters agreement, each exercisable and non-exercisable stock option and unvested restricted stock award was modified into similar awards of both SYNNEX and Concentrix and the exercise price of outstanding stock options was adjusted to preserve the intrinsic value of the awards.

Certain restricted stock units and performance-contingent awards were modified to provide the holders restricted stock units and performance contingent awards in the company that employs such employee following the Separation.

When settled wholly in the employer’s shares, the ratio was based on the closing stock price of SYNNEX at November 30, 2020 compared to the opening stock price of the respective entity on December 1, 2020.

The options strike prices were adjusted in the same manner.

The modification of these awards did not result in material incremental compensation cost.

The restricted shares had a fair value of $ 127.60 per share upon closing of the Merger which will be recorded as share-based compensation expense on a straight-line basis over the vesting period in “Acquisition, integration, and restructuring costs” in the Consolidated Statement of Operations.

The Company recorded $ 11.7 million of share-based compensation expense related to these restricted shares in “Acquisition, integration, and restructuring costs” during the three months ended February 28, 2022.

As of February 28, 2022, there was $ 70.4 million of total unamortized share-based compensation expense related to these restricted shares to be recognized over a weighted-average amortization period of 1.5 years.

NOTE 6—BALANCE SHEET COMPONENTS:

1 unchanged sentence

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Consolidated Balance Sheets that sum to the total of the same amounts shown in the Consolidated Statements of Cash Flows:

August 31, 2021

November 30, 2020

February 28, 2022 November 30, 2021

Cash and cash equivalents $ 510,207 $ 993,973

2 unchanged sentences

Accounts receivable, net:

August 31, 2021

November 30, 2020

February 28, 2022 November 30, 2021

Accounts receivable $ 8,856,447 $ 8,424,868

2 unchanged sentences

Receivables from vendors, net:

August 31, 2021

November 30, 2020

February 28, 2022 November 30, 2021

Receivables from vendors $ 1,118,469 $ 1,130,091

1 unchanged sentence

Receivables from vendors, net $ 1,102,988 $ 1,118,963

Property and equipment, net:

August 31, 2021

November 30, 2020

Equipment, computers and software

Furniture and fixtures

Buildings, building improvements and leasehold improvements

Construction-in-progress

Total property and equipment, gross

Accumulated depreciation

Property and equipment, net

SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

For the three and nine months ended August 31, 2021 and 2020

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended February 28, 2022 and 2021

( Except per share amounts or as otherwise indicated, currency and share amounts in thousands )

Depreciation expense was $ 5,633 and $ 16,800 , respectively, for the three and nine months ended August 31, 2021 and $ 5,937 and $ 17,650 , respectively, for the three and nine months ended August 31, 2020.

Balance as of November 30, 2020

Foreign exchange translation

Balance as of August 31, 2021

Intangible assets, net:

As of August 31, 2021

As of November 30, 2020

Customer relationships and lists

Trade name and others

Amortization expense was $ 9,386 and $ 28,128 , respectively, for the three and nine months ended August 31, 2021 and $ 9,995 and $ 30,130 , respectively, for the three and nine months ended August 31, 2020.

Estimated future amortization expense of the Company’s intangible assets is as follows:

Fiscal years ending November 30,

2021 (remaining three months)

Allowance for doubtful trade receivables:

Balance at November 30, 2021

Additions 15,927

Write-offs, reclassifications and foreign exchange translation ( 6,340 )

Balance at February 28, 2022

Allowance for receivables from vendors:

Balance at November 30, 2021

Additions 4,140

Write-offs, reclassifications and foreign exchange translation 213

Balance at February 28, 2022

Accumulated other comprehensive income (loss):

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

gains (losses) on

defined benefit

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

Unrealized gains

hedges, net of

Foreign currency

taxes Foreign currency

adjustment and other,

net of taxes Total

Balance as of November 30, 2021

Transferred to Concentrix

Other comprehensive income (loss) before reclassification

Reclassification of (gains) losses from Other comprehensive

income (loss)

Balance as of August 31, 2021

$ ( 48,803 ) $ ( 287,391 ) $ ( 336,194 )

Other comprehensive income before reclassification 8,902 2,776 11,678

Reclassification of (gains) losses from other comprehensive income (loss) 7,501 — 7,501

Balance as of February 28, 2022

$ ( 32,400 ) $ ( 284,615 ) $ ( 317,015 )

Refer to Note 7 - Derivative Instruments for the location of gains and losses reclassified from other comprehensive income to the Consolidated Statements of Operations.

Foreign currency translation adjustment and other, net of taxes, is comprised of foreign currency translation adjustments and unrealized gains and losses on Concentrix’ available-for-sale debt securities prior to the Separation.

SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

For the three and nine months ended August 31, 2021 and 2020

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended February 28, 2022 and 2021

( Except per share amounts or as otherwise indicated, currency and share amounts in thousands )

5 unchanged sentences

There can be no assurance the hedges will offset more than a portion of the financial impact resulting from movements in foreign currency exchange or interest rates.

Generally, the Company does not use derivative instruments to cover equity risk and credit risk.

The Company does not use derivative instruments to cover equity risk and credit risk.

The Company’s hedging program is not used for trading or speculative purposes.

2 unchanged sentences

Cash Flow Hedges

The Company uses interest rate derivative contracts to economically convert a portion of its variable-rate debt to fixed-rate debt.

The Company uses interest rate swap derivative contracts to economically convert a portion of its variable-rate debt to fixed-rate debt.

The swaps have maturities at various dates through October 2023 .

10 unchanged sentences

The fair values of the Company’s derivative instruments are disclosed in Note 8 - Fair Value Measurements and summarized in the table below:

Balance Sheet Line Item

August 31, 2021

November 30, 2020

Balance Sheet Line Item February 28, 2022 November 30, 2021

Derivative instruments not designated as hedging instruments:

2 unchanged sentences

Other accrued liabilities 6,073 2,992

Interest rate swap (notional value)

Other accrued liabilities

Derivative instruments designated as cash flow hedges:

1 unchanged sentence

Other accrued liabilities 19,907 38,670

Other long-term liabilities 7,027 24,151

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended February 28, 2022 and 2021

( Except per share amounts or as otherwise indicated, currency and share amounts in thousands )

The Company terminated interest rate swaps with a notional value of $ 400 million in December 2021.

Cumulative losses on the terminated interest rate swaps of $ 16 million will be reclassified from AOCI to “Interest expense and finance charges, net” over the period through September 2023 .

Volume of Activity

The notional amounts of foreign exchange forward contracts represent the gross amounts of foreign currency, including, principally, the Canadian Dollar, the Indian Rupee, the Brazilian Real, the Colombian Peso, the Euro, the Mexican Peso, the Chinese Yuan, and the Chilean Peso, that will be bought or sold at maturity.

The term and notional amount of interest rate swaps are determined based on management’s assessment of future interest rates and other factors such as debt maturities.

The notional amounts of foreign exchange forward contracts represent the gross amounts of foreign currency, including, principally, the Australian dollar, Brazilian real, British pound, Canadian dollar, Chinese yuan, Czech koruna, Danish krone, Euro, Indian rupee, Indonesian rupiah, Japanese yen, Mexican peso, Norwegian krone, Philippine peso, Polish zloty, Singapore dollar, Swedish krona, Swiss franc and Turkish lira that will be bought or sold at maturity.

The notional amounts for outstanding derivative instruments provide one measure of the transaction volume outstanding and do not represent the amount of the Company’s exposure to credit or market loss.

The Company’s exposure to credit loss and market risk will vary over time as currency and interest rates change.

SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

For the three and nine months ended August 31, 2021 and 2020

( Except per share amounts or as otherwise indicated, currency and share amounts in thousands )

The Effect of Derivative Instruments on AOCI and the Consolidated Statements of Operations

The following table shows the gains and losses, before taxes, of the Company’s derivative instruments designated as cash flow hedges and not designated as hedging instruments in Other Comprehensive Income (“OCI”), and the Consolidated Statements of Operations for the periods presented:

The following table shows the gains and losses, before taxes, of the Company’s derivative instruments designated as cash flow hedges in Other Comprehensive Income (“OCI”) and not designated as hedging instruments in the Consolidated Statements of Operations for the periods presented:

Three Months Ended,

Nine Months Ended,

Location of Gains (Losses) in Income

August 31, 2021

August 31, 2020

August 31, 2021

August 31, 2020

Interest expense and finance charges, net

Other income (expense), net

Location of Gains (Losses) in Income February 28, 2022 February 28, 2021

Derivative instruments designated as cash flow hedges:

Gains (losses) recognized in OCI on interest rate swaps $ 11,820 $ 3,055

Gains (losses) on interest rate swaps reclassified from AOCI into income

Interest expense and finance charges, net

Gains (losses) on interest rate swaps reclassified from AOCI into income Interest expense and finance charges, net $ ( 9,960 ) $ ( 10,326 )

Derivative instruments not designated as hedging instruments:

Gains (losses) recognized from foreign exchange forward contracts, net (1)

Cost of products sold $ ( 9,893 ) $ —

Gains (losses) recognized from foreign exchange forward contracts, net (1)

Other income (expense), net ( 210 ) ( 697 )

Gains (losses) recognized from interest rate swaps, net

Interest expense and finance charges, net

Gains (losses) recognized from interest rate swaps, net Interest expense and finance charges, net — 128

Total $ ( 10,103 ) $ ( 569 )

____________________________

(1) The gains and losses largely offset the currency gains and losses that resulted from changes in the assets and liabilities denominated in nonfunctional currencies.

There were no material gain or loss amounts excluded from the assessment of effectiveness.

Existing net losses in AOCI that are expected to be reclassified into earnings in the normal course of business within the next twelve months are $ 39,160 .

Offsetting of Derivatives

The Company’s derivative instruments are generally governed by standard International Swaps and Derivatives Association, Inc.

master agreements, which generally do not require the Company to post any collateral, and specify netting rights, and other customary provisions including events of defaults and termination rights.

In the Consolidated Balance Sheets, the Company does not offset derivative assets against liabilities in master netting arrangements.

If derivative exposures covered by a qualifying master netting agreement had been netted in the Consolidated Balance Sheets, the total derivative asset and liability positions would have been reduced by $ 630 each as of August 31, 2021 and $ 139 each as of November 30, 2020.

Existing net losses in AOCI that are expected to be reclassified into earnings in the normal course of business within the next twelve months are $ 29 million.

Credit exposure for derivative financial instruments is limited to the amounts, if any, by which the counterparties’ obligations under the contracts exceed the Company’s obligations to the counterparties.

The Company manages the potential risk of credit losses through careful evaluation of counterparty credit standing and selection of counterparties from a limited group of financial institutions.

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended February 28, 2022 and 2021

( Except per share amounts or as otherwise indicated, currency and share amounts in thousands )

NOTE 8—FAIR VALUE MEASUREMENTS:

3 unchanged sentences

Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).

SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

For the three and nine months ended August 31, 2021 and 2020

( Except per share amounts or as otherwise indicated, currency and share amounts in thousands )

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

As of August 31, 2021

As of February 28, 2022

As of November 30, 2021

Fair value measurement category

Cash equivalents

Marketable equity securities

Fair value measurement category Fair value measurement category

Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3

Forward foreign currency exchange contracts $ 8,653 $ — $ 8,653 $ — $ 13,764 $ — $ 13,764 $ —

1 unchanged sentence

Interest rate swaps 26,934 — 26,934 — 62,821 — 62,821 —

The Company’s cash equivalents consist primarily of highly liquid investments in money market funds and term deposits with maturity periods of three months or less.

The carrying values of cash equivalents approximate fair value since they are near their maturity.

Investments in marketable equity securities, primarily comprising investments in other companies’ equity securities as per local customary business practice, are recorded at fair value based on quoted market prices.

The fair values of forward exchange contracts are measured based on the foreign currency spot and forward rates quoted by the banks or foreign currency dealers.

Fair values of interest rate swaps are measured using standard valuation models using inputs that are readily available in public markets, or can be derived from observable market transactions, including LIBOR spot and forward rates.

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

The effect of nonperformance risk on the fair value of derivative instruments was not material as of February 28, 2022 and November 30, 2021.

The carrying values of accounts receivable, accounts payable and short-term debt approximate fair value due to their short maturities and interest rates which are variable in nature.

The carrying value of the Company’s term loans approximate their fair value since they bear interest rates that are similar to existing market rates.

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

NOTE 8—ACCOUNTS RECEIVABLE ARRANGEMENTS:

The Company has an uncommitted supply-chain financing program with a global financial institution under which trade accounts receivable of certain customers and their affiliates may be acquired, without recourse, by the financial institution.

Available capacity under this program is dependent on the level of the Company’s trade accounts receivable with these customers and the financial institution’s willingness to purchase such receivables.

As of August 31, 2021 and November 30, 2020, accounts receivable sold to and held by the financial institution under this program were $ 19,317 and $ 15,572 , respectively.

Discount fees related to the sale of trade accounts receivable under this facility are included in “Interest expense and finance charges, net” in the Consolidated Statements of Operations.

During the three and nine months ended August 31, 2021 and 2020, discount fees were not material to the Company’s results of operations.

SYNNEX Japan, the Company’s Japanese subsidiary, has arrangements with financial institutions for the sale and financing of approved accounts receivable and notes receivable.

The amounts outstanding under these arrangements that were sold, but not collected, as of August 31, 2021 and November 30, 2020 were $ 29,366 and $ 5,798 , respectively.

Discount fees related to the sale of trade accounts and notes receivable under this facility are included in “Interest expense and finance charges, net” in the Consolidated Statements of Operations.

During the three and nine months ended August 31, 2021 and 2020, discount fees were not material to the Company’s results of operations.

The Company also has other financing agreements in North America with financial institutions (“Flooring Companies”) to allow certain customers of the Company to finance their purchases directly with the Flooring Companies.

Under these agreements, the Flooring Companies pay to the Company the selling price of products sold to various customers, less a discount, within approximately 15 to 30 days from the date of sale.

The Company is contingently liable to repurchase inventory sold under flooring agreements in the event of any default by its customers under the agreement and such inventory being repossessed by the Flooring Companies.

See Note 16 - Commitments and Contingencies for further information.

SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

For the three and nine months ended August 31, 2021 and 2020

The estimated fair value of the Senior Notes was approximately $ 2.36 billion and $ 2.45 billion at February 28, 2022 and November 30, 2021, respectively.

During the three months ended February 28, 2022, there were no transfers between the fair value measurement category levels.

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended February 28, 2022 and 2021

( Except per share amounts or as otherwise indicated, currency and share amounts in thousands )

The following table summarizes the net sales financed through flooring agreements and the flooring fees incurred:

Three Months Ended

Nine Months Ended

August 31, 2021

August 31, 2020

August 31, 2021

August 31, 2020

Net sales financed

Flooring fees ( 1)

Flooring fees are included within “Interest expense and finance charges, net.”

As of August 31, 2021 and November 30, 2020, accounts receivable subject to flooring agreements were $ 42,114 and $ 49,461 , respectively.

NOTE 9—BORROWINGS:

Borrowings consist of the following:

August 31, 2021

November 30, 2020

SYNNEX Japan credit facility - revolving line of credit component

SYNNEX Japan credit agreement - term loan component

Other borrowings

February 28, 2022 November 30, 2021

TD SYNNEX U.S.

Accounts Receivable Securitization Agreement

$ 749,000 $ —

Other committed and uncommitted revolving credit facilities and borrowings 287,400 106,256

Current portion of TD SYNNEX term loan 75,000 75,000

Borrowings, current $ 1,111,400 $ 181,256

SYNNEX United States credit agreement - term loan component

SYNNEX United States term loan credit agreement

SYNNEX Japan credit facility - term loan component

SYNNEX new Senior Notes

Other term debt

TD SYNNEX term loan $ 1,406,250 $ 1,425,000

TD SYNNEX Senior Notes 2,500,000 2,500,000

Other credit agreements and long-term debt 69,281 72,258

Long-term borrowings, before unamortized debt discount and issuance costs $ 3,975,531 $ 3,997,258

1 unchanged sentence

Long-term borrowings $ 3,935,220 $ 3,955,176

SYNNEX United States accounts receivable securitization arrangement

TD SYNNEX United States accounts receivable securitization arrangement

In the United States, the Company has an accounts receivable securitization program to provide additional capital for its operations (the “U.S.

1 unchanged sentence

U nder the terms of the U.S.

AR Arrangement, which expires in May 2022 , the Company’s subsidiary that is the borrower under this facility could borrow up to a maximum of $ 650,000 based upon eligible trade accounts receivable.

In addition, the U.S.

AR Arrangement includes an accordion feature to allow requests for an increase in the lenders' commitment by an additional $ 150,000 .

AR Arrangement, as amended in December 2021, the Company and its subsidiaries that are party to the U.S.

AR Arrangement can borrow up to a maximum of $ 1.5 billion based upon eligible trade accounts receivable.

AR Arrangement has a maturity date of December 2024.

The effective borrowing cost under the U.S.

AR Arrangement is a blended rate based upon the composition of the lenders, that includes prevailing dealer commercial paper rates and a rate based upon LIBOR.

In addition, a program fee payable on the used portion of the lenders’ commitment, accrues at 1.25 % per annum in the case of lender groups who fund their advances based on prevailing commercial paper rates, and 1.30 % per annum in the case of lender groups who fund their advances based on LIBOR (subject to a 0.50 % per annum floor).

In addition, a program fee payable on the used portion of the lenders’ commitment accrues at 0.75 % per annum.

A facility fee is payable on the adjusted commitment of the lenders, to accrue at different tiers ranging between 0.30 % per annum and 0.40 % per annum depending on the amount of outstanding advances from time to time.

Under the terms of the U.S.

AR Arrangement, the Company and two of its U.S.

subsidiaries sell, on a revolving basis, their receivables to a wholly-owned, bankruptcy-remote subsidiary.

AR Arrangement, the Company and certain of its U.S.

subsidiaries sell, on a revolving basis, their receivables (other than certain excluded receivables) to a wholly-owned, bankruptcy-remote subsidiary.

The borrowings are funded by pledging all of the rights, title and interest in the receivables acquired by the Company's bankruptcy-remote subsidiary as security.

1 unchanged sentence

AR Arrangement are recorded as debt on the Company's Consolidated Balance Sheets.

SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

For the three and nine months ended August 31, 2021 and 2020

( Except per share amounts or as otherwise indicated, currency and share amounts in thousands )

SYNNEX Canada accounts receivable securitization arrangement

SYNNEX Canada Limited (“SYNNEX Canada”), the Company's subsidiary in Canada, has an accounts receivable securitization program with a bank to provide additional capital for its operations.

Under the terms of this program, which matures in May 2023 , SYNNEX Canada can borrow up to CAD 100,000 , or $ 79,264 , in exchange for the transfer of eligible trade accounts receivable, on an ongoing revolving basis.

The program includes an accordion feature that allows SYNNEX Canada to request an increase in the bank's commitment up to an additional CAD 50,000 , or $ 39,632 .

Any amounts received under this arrangement are recorded as debt on the Company's Consolidated Balance Sheets and are secured by pledging all of the rights, title and interest in the receivables to the bank.

The effective borrowing cost is based on the weighted-average of the Canadian Dollar Offered Rate plus a margin of 1.00 % per annum and the prevailing lender commercial paper rates.

In addition, prior to an event of termination, SYNNEX Canada is obligated to pay a program fee of 0.75 % per annum based on the used portion of the commitment.

After an event of termination, the program fee shall be the sum of the base rate and 2.50 % per annum, based on the used portion of the commitment.

SYNNEX Canada pays a fee of 0.40 % per annum for any unused portion of the commitment up to CAD 60,000 , or $ 47,559 , and when the unused portion exceeds CAD 60,000 , or $ 47,559 , a fee of 0.55 % per annum of the unused portion of the commitment.

As of both August 31, 2021 and November 30, 2020, there was no outstanding balance under this arrangement.

The Company has guaranteed the performance obligations of SYNNEX Canada under this facility.

SYNNEX Japan credit facility

SYNNEX Japan has a credit agreement with a group of banks for a maximum commitment of JPY 15,000,000 , or $ 136,351 .

The credit agreement is comprised of a JPY 5,000,000 , or $ 45,450 , term loan and a JPY 10,000,000 , or $ 90,901 , revolving credit facility and expires in June 2026 .

Prior to renewal in June 2021, SYNNEX Japan had a maximum commitment of JPY 15,000,000 , or $ 136,351 , comprised of a JPY 7,000,000 , or $ 63,631 , term loan and a JPY 8,000,000 , or $ 72,721 , revolving credit facility.

The interest rate for the term loan and revolving credit facility is based on the Tokyo Interbank Offered Rate, plus a margin, which, prior to the Merger transaction was based on the Company’s consolidated leverage ratio, and after the Merger transaction is based on the Company’s credit rating.

Currently the margin over the Tokyo Interbank Offered Rate equals 0.80 % per annum.

The unused line fee on the revolving credit facility is currently 0.125 % per annum and prior to the Merger was based on the Company's consolidated current leverage ratio, but is now also based on the Company’s credit rating.

The term loan can be repaid at any time prior to the expiration date without penalty.

The Company has guaranteed the obligations of SYNNEX Japan under this facility.

SYNNEX United States credit agreement

In the United States, the Company has a senior secured credit agreement (as amended, the "U.S.

Credit Agreement") with a group of financial institutions.

Credit Agreement includes a $ 600,000 commitment for a revolving credit facility and a term loan in the original principal amount of $ 1,200,000 .

The Company may request incremental commitments to increase the principal amount of the revolving line of credit or term loan by $ 500,000 , plus an additional amount which is dependent upon the Company's pro forma first lien leverage ratio, as calculated under the U.S.

Credit Agreement.

Credit Agreement matures in September 2022 .

The remaining outstanding principal of the term loan is payable on maturity.

Interest on borrowings under the U.S.

Credit Agreement can be based on LIBOR or a base rate at the Company's option, plus a margin.

The margin for LIBOR loans ranges from 1.25 % to 2.00 % and the margin for base rate loans ranges from 0.25 % to 1.00 %, provided that LIBOR shall not be less than zero .

The base rate is a variable-rate which is the highest of (a) the Federal Funds Rate, plus a margin of 0.5 %, (b) the rate of interest announced, from time to time, by the agent, Bank of America, N.A., as its “prime rate,” and (c) the Eurodollar Rate, plus 1.0 %.

The unused revolving credit facility commitment fee ranges from 0.175 % to 0.30 % per annum.

The margins above the applicable interest rates and the revolving commitment fee for revolving loans are based on the Company’s consolidated leverage ratio, as calculated under the U.S.

Credit Agreement.

The Company’s obligations under the U.S.

Credit Agreement are secured by substantially all of the parent company’s and its United States domestic subsidiaries’ assets on a pari passu basis with the interests of the lenders under the U.S.

Term Loan Credit Agreement (defined below) pursuant to an intercreditor agreement and are guaranteed by certain of the Company's United States domestic subsidiaries.

Credit Agreement was terminated on September 1, 2021 and all outstanding balances were repaid in full as part of the Merger transaction (see Note 17 – Subsequent Event for further discussion).

SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

For the three and nine months ended August 31, 2021 and 2020

There was $ 749.0 million outstanding under the U.S.

AR Arrangement at February 28, 2022 at an interest rate of 1.18 %.

There were no amounts outstanding under the U.S.

AR Arrangement at November 30, 2021.

TD SYNNEX credit agreement

The Company is party to a credit agreement, dated as of April 16, 2021 (the “TD SYNNEX Credit Agreement”) with the lenders party thereto and Citibank, N.A., as agent, pursuant to which the Company received commitments for the extension of a senior unsecured revolving credit facility not to exceed an aggregate principal amount of $ 3.5 billion, which revolving credit facility (the “TD SYNNEX revolving credit facility”) may, at the request of the Company but subject to the lenders’ discretion, potentially be increased by up to an aggregate amount of $ 500.0 million.

There were no amounts outstanding under the TD SYNNEX revolving credit facility at February 28, 2022 or November 30, 2021.

The TD SYNNEX Credit Agreement also includes a fully funded senior unsecured term loan (the “TD SYNNEX term loan” and, together with the TD SYNNEX revolving credit facility, the “TD SYNNEX credit facilities”) that had an original aggregate principal amount of $ 1.5 billion and has begun amortizing as described below.

The borrower under the TD SYNNEX credit facilities is the Company.

There are no guarantors of the TD SYNNEX credit facilities.

The maturity of the TD SYNNEX credit facilities is on the fifth anniversary of the September 2021 closing date, to occur in September 2026,

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended February 28, 2022 and 2021

( Except per share amounts or as otherwise indicated, currency and share amounts in thousands )

SYNNEX United States term loan credit agreement

The Company has a senior secured term loan credit agreement (the “U.S.

Term Loan Credit Agreement”) with a group of financial institutions in the original principal amount of $ 1,800,000 .

Term Loan Credit Agreement matures in October 2023 .

The remaining outstanding principal is payable on maturity.

Interest on borrowings under the U.S.

Term Loan Credit Agreement can be based on LIBOR or a base rate at the Company’s option, plus a margin.

The margin for LIBOR loans ranges from 1.25 % to 1.75 % and the margin for base rate loans ranges from 0.25 % to 0.75 %, provided that LIBOR shall not be less than zero .

The base rate is a variable-rate which is the highest of (a) 0.5 % plus the greater of (x) the Federal Funds Rate in effect on such day and (y) the overnight bank funding rate in effect on such day, (b) the Eurodollar Rate plus 1.0 % per annum, and (c) the rate of interest last quoted by The Wall Street Journal as the “Prime Rate” in the U.S.

During the period in which the term loans were available to be drawn, the Company paid term loan commitment fees.

The margins above the Company's applicable interest rates are, and the term loan commitment fee were, based on the Company's consolidated leverage ratio as calculated under the U.S.

Term Loan Credit Agreement.

The Company's obligations under the U.S.

Term Loan Credit Agreement are secured by substantially all of the Company’s and certain of its domestic subsidiaries’ assets on a pari passu basis with the interests of the lenders under the existing U.S.

Credit Agreement pursuant to an intercreditor agreement, and are guaranteed by certain of its domestic subsidiaries.

Term Loan Credit Agreement was terminated on September 1, 2021 and all outstanding balances were repaid in full as part of the Merger transaction (see Note 17 – Subsequent Event for further discussion).

SYNNEX new credit agreement

In connection with the Merger Agreement described in Note 17 – Subsequent Event, the Company entered into a new credit agreement, dated as of April 16, 2021 (the “New Credit Agreement”) with the lenders party thereto and Citibank, N.A., as agent, pursuant to which the Company received commitments for the extension of a senior unsecured revolving credit facility not to exceed an aggregate principal amount of $ 3,500,000 , which revolving credit facility (the “new revolving credit facility”) may, at the request of the Company but subject to the lenders’ discretion, potentially be increased by up to an aggregate amount of $ 500,000 .

The New Credit Agreement also includes a senior unsecured term loan (the “new term loan” and, together with the new revolving credit facility, the “new credit facilities”) in an aggregate principal amount of $ 1,500,000 , which was fully funded in connection with the closing of the Merger.

The borrower under the new credit facilities is the Company.

There are no guarantors of the new credit facilities.

The maturity of the new credit facilities is on the fifth anniversary of the September 2021 closing date, which will occur in September 2026, subject in the case of the revolving credit facility, to two one-year extensions upon the Company’s prior notice to the lenders and the agreement of the lenders to extend such maturity date.

The outstanding principal amount of the new term loan is payable in quarterly installments in an amount equal to 1.25% of the original $ 1,500,000 principal balance commencing on the last day of the first full fiscal quarter after the closing date of the new credit facilities, with the outstanding principal amount of the term loans due in full on the maturity date.

Loans borrowed under the New Credit Agreement bear interest, in the case of LIBOR (or successor) rate loans, at a per annum rate equal to the applicable LIBOR (or successor) rate, plus the applicable margin, which may range from 1.125 % to 1.75 %, based on the Company’s public debt rating (as defined in the New Credit Agreement).

subject in the case of the revolving credit facility, to two one -year extensions upon the Company’s prior notice to the lenders and the agreement of the lenders to extend such maturity date.

The outstanding principal amount of the TD SYNNEX term loan is payable in quarterly installments in an amount equal to 1.25 % of the original $ 1.5 billion principal balance, with the outstanding principal amount of the term loans due in full on the maturity date.

Loans borrowed under the TD SYNNEX Credit Agreement bear interest, in the case of LIBOR (or successor) rate loans, at a per annum rate equal to the applicable LIBOR (or successor) rate, plus the applicable margin, which may range from 1.125 % to 1.75 %, based on the Company’s public debt rating (as defined in the TD SYNNEX Credit Agreement).

The applicable margin on base rate loans is 1.00 % less than the corresponding margin on LIBOR (or successor rate) based loans.

In addition to these borrowing rates, there is a commitment fee which ranges from 0.125 % to 0.300 % on any unused commitment under the new revolving credit facility based on the Company’s public debt rating.

The New Credit Agreement contains various loan covenants that are customary for similar facilities for similarly rated borrowers that will restrict the ability of the Company and its subsidiaries to take certain actions.

The New Credit Agreement also contains financial covenants which require compliance with a maximum debt to EBITDA ratio and a minimum interest coverage ratio, in each case tested on the last day of each fiscal quarter commencing with the first full fiscal quarter to occur after the closing date of the new credit facilities.

The New Credit Agreement also contains various customary events of default, including with respect to a change of control of the Company.

See Note 17 – Subsequent Event for further discussion regarding borrowings under the New Credit Agreement in conjunction with the Merger.

SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

For the three and nine months ended August 31, 2021 and 2020

( Except per share amounts or as otherwise indicated, currency and share amounts in thousands )

On March 22, 2021, the Company had entered into a debt commitment letter (the “Commitment Letter”), under which Citigroup Global Markets Inc.

and certain other financing institutions joining thereto pursuant to the terms thereof committed to provide ( i ) a $ 1.5 billion senior unsecured term bridge facility (the "Term Loan A Bridge Facility"), (ii) a $ 2.5 billion senior unsecured term bridge facility (the “Bridge Facility”) and (iii) a $ 3.5 billion senior unsecured revolving bridge facility (the "Bridge Revolving Facility"), subject to the satisfaction of certain customary closing conditions.

On April 16, 2021, ( i ) the $ 1.5 billion commitment with respect to the Term Loan A Bridge Facility under the Commitment Letter and (ii) the $ 3.5 billion commitment with respect to the Bridge Revolving Facility under the Commitment Letter were reduced to zero , in each case, as a result of SYNNEX entering into the New Credit Agreement ;

and on August 9, 2021 the Bridge Facility was reduced to zero as a result of the issuance of the Notes described below.

SYNNEX new Senior Notes

On August 9, 2021, SYNNEX completed its offering of $ 2.5 billion aggregate principal amount of senior unsecured notes, consisting of $ 700.0 million of 1.25 % senior notes due 2024 , $ 700.0 million of 1.75 % senior notes due 2026 , $ 600.0 million of 2.375 % senior notes due 2028 , and $ 500.0 million of 2.65 % senior notes due 2031 (collectively, the “Notes,” and such offering, the “Notes Offering”).

SYNNEX incurred $ 27 million towards issuance costs.

SYNNEX will pay interest semi-annually on the notes on each of February 9 and August 9, beginning February 9, 2022.

The net proceeds from this offering were used to fund a portion of the aggregate cash consideration payable in connection with the Merger, refinance certain of SYNNEX’ and Tech Data’s existing indebtedness and pay related fees and expenses (see Note 17 – Subsequent Event for further discussion).

SYNNEX expects to use any remaining net proceeds from the Notes Offering for general corporate purposes.

SYNNEX Canada revolving line of credit

SYNNEX Canada has an uncommitted revolving line of credit with a bank under which it can borrow up to CAD 50,000 , or $ 39,632 .

Borrowings under the facility are secured by eligible inventory and bear interest at a base rate plus a margin ranging from 0.50 % to 2.25 % depending on the base rate used.

The base rate could be a Banker's Acceptance Rate, a Canadian Prime Rate, LIBOR or U.S.

As of both August 31, 2021 and November 30, 2020, there were no borrowings outstanding under this credit facility.

In addition to these borrowing rates, there is a commitment fee which ranges from 0.125 % to 0.300 % on any unused commitment under the TD SYNNEX revolving credit facility based on the Company’s public debt rating.

The effective interest rate for the TD SYNNEX term loan was 1.59 % and 1.49 % as of February 28, 2022 and November 30, 2021, respectively.

The TD SYNNEX Credit Agreement contains various loan covenants that are customary for similar facilities for similarly rated borrowers that restricts the ability of the Company and its subsidiaries to take certain actions.

The TD SYNNEX Credit Agreement also contains financial covenants which require compliance with a maximum debt to EBITDA ratio and a minimum interest coverage ratio, in each case tested on the last day of each fiscal quarter commencing with the first full fiscal quarter to occur after the closing date of the TD SYNNEX credit facilities.

The TD SYNNEX Credit Agreement also contains various customary events of default, including with respect to a change of control of the Company.

TD SYNNEX Senior Notes

On August 9, 2021, the Company completed its offering of $ 2.5 billion aggregate principal amount of senior unsecured notes, consisting of $ 700.0 million of 1.25 % senior notes due August 9, 2024 , $ 700.0 million of 1.75 % senior notes due August 9, 2026 , $ 600.0 million of 2.375 % senior notes due August 9, 2028 , and $ 500.0 million of 2.65 % senior notes due August 9, 2031 (collectively, the “Senior Notes,” and such offering, the “Senior Notes Offering”).

The Company incurred $ 19.6 million towards issuance costs on the Senior Notes.

The Company pays interest semi-annually on the notes on each of February 9 and August 9.

The net proceeds from this offering were used to fund a portion of the aggregate cash consideration payable in connection with the Merger, refinance certain of the Company's existing indebtedness and pay related fees and expenses and for general purposes.

The interest rate payable on each series of the Senior Notes will be subject to adjustment from time to time if the credit rating assigned to such series of Senior Notes is downgraded (or downgraded and subsequently upgraded).

The Company may redeem the Senior Notes, at any time in whole or from time to time in part, prior to (i) August 9, 2022 (the “2024 Par Call Date”) in the case of the 2024 Senior Notes, (ii) July 9, 2026 (the “2026 Par Call Date”) in the case of the 2026 Senior Notes, (iii) June 9, 2028 (the “2028 Par Call Date”) in the case of the 2028 Senior Notes, and (iv) May 9, 2031 in the case of the 2031 Senior Notes (the “2031 Par Call Date” and, together with the 2024 Par Call Date, the 2026 Par Call Date and the 2028 Par Call Date, each, a “Par Call Date” and together, the “Par Call Dates”), at a redemption price equal to the greater of (x) 100 % of the aggregate principal amount of the applicable Senior Notes to be redeemed and (y) the sum of the present values of the remaining scheduled payments of the principal and interest on the Senior Notes, discounted to the date of redemption on a semi-annual basis at a rate equal to the sum of the applicable treasury rate plus 15 basis points for the 2024 Senior Notes, 20 basis points for the 2026 Senior Notes and 25 basis points for the 2028 Senior Notes and 2031 Senior Notes, plus in each case, accrued and unpaid interest thereon to, but excluding, the redemption date.

The Company may also redeem the Senior Notes of any series at its option, at any time in whole or from time to time in part, on or after the applicable Par Call Date, at a redemption price equal to 100 % of the principal amount of the Senior Notes to be redeemed.

Other borrowings and term debt

Other borrowings and term debt include lines of credit with financial institutions at certain locations outside the United States, factoring of accounts receivable with recourse provisions, finance leases, a building mortgage and book overdrafts.

Interest rates and other terms of borrowing under these lines of credit vary by country, depending on local market conditions.

Borrowings under these lines of credit facilities are guaranteed by the Company or secured by eligible accounts receivable.

The maximum commitment amounts for local currency credit facilities have been translated into United States Dollars at August 31, 2021 exchange rates.

Future principal payments

As of August 31, 2021, future principal payments under the above loans are as follows:

Fiscal Years Ending November 30,

2021 (remaining three months)

Interest expense and finance charges

The total interest expense and finance charges for the Company's borrowings were $ 27,393 and $ 75,259 , respectively, for the three and nine months ended August 31, 2021, and $ 30,950 and $ 104,182 , respectively for the three and nine months ended August 31, 2020.

The variable interest rates ranged between 0.79 % and 4.46 % during the three months ended August 31, 2021, and between 0.77 % and 4.46 % during the nine months ended August 31, 2021.

During the three months ended August 31, 2020, the variable interest rates ranged between 0.74 % and 4.95 %, and between 0.74 % and 8.41 % during the nine months ended August 31, 2020.

SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

For the three and nine months ended August 31, 2021 and 2020

The Company has various other committed and uncommitted lines of credit with financial institutions, accounts receivable securitization arrangements, factoring of accounts receivable with recourse provisions, finance leases, short-term loans, term loans, credit facilities and book overdraft facilities, totaling approximately $ 618.8 million as of February 28, 2022.

Interest rates and other terms of borrowing under these lines of credit vary by country, depending on local market

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended February 28, 2022 and 2021

( Except per share amounts or as otherwise indicated, currency and share amounts in thousands )

There was $ 287.4 million outstanding on these facilities at February 28, 2022, at a weighted average interest rate of 2.98 %, and there was $ 106.3 million outstanding at November 30, 2021, at a weighted average interest rate of 4.59 %.

Borrowings under certain of these lines of credit facilities are guaranteed by the Company or secured by eligible accounts receivable.

At February 28, 2022, the Company was also contingently liable for reimbursement obligations with respect to issued standby letters of credit in the aggregate outstanding amount of $ 102.0 million.

These letters of credit typically act as a guarantee of payment to certain third parties in accordance with specified terms and conditions.

The maximum commitment amounts for local currency credit facilities have been translated into United States Dollars at February 28, 2022 exchange rates.

Covenant compliance

The Company's credit facilities have a number of covenants and restrictions that, among other things, require the Company to maintain specified financial ratios and satisfy certain financial condition tests.

The covenants also limit the Company’s ability to incur additional debt, make intercompany loans, pay dividends and make other types of distributions, make certain acquisitions, repurchase the Company’s stock, create liens, cancel debt owed to the Company, enter into agreements with affiliates, modify the nature of the Company’s business, enter into sale-leaseback transactions, make certain investments, transfer and sell assets, cancel or terminate any material contracts and merge or consolidate.

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

The Company's credit facilities have a number of covenants and restrictions that require the Company to maintain specified financial ratios.

The covenants also limit the Company’s ability to incur additional debt, create liens, enter into agreements with affiliates, modify the nature of the Company’s business and merge or consolidate.

As of February 28, 2022, the Company was in compliance with all current and material financial covenant requirements for the above arrangements.

NOTE 10—EARNINGS PER COMMON SHARE:

1 unchanged sentence

Three Months Ended

Nine Months Ended

August 31, 2021

August 31, 2020

August 31, 2021

August 31, 2020

February 28, 2022 February 28, 2021

Basic earnings per common share:

Income from continuing operations attributable to common stockholders ( 1)

Income from discontinued operations attributable to common stockholders ( 1)

Net income attributable to common stockholders (1)

$ 131,443 $ 86,933

Weighted-average number of common shares - basic 95,584 51,145

Basic earnings per common share $ 1.38 $ 1.70

Continuing operations

Discontinued operations

Total basic net earnings per share

Diluted earnings per common share:

Income from continuing operations attributable to common stockholders ( 1)

Income from discontinued operations attributable to common stockholders ( 1)

Net income attributable to common stockholders (1)

$ 131,446 $ 86,940

Weighted-average number of common shares - basic 95,584 51,145

3 unchanged sentences

Diluted earnings per common share $ 1.37 $ 1.69

Continuing operations

Discontinued operations

Total diluted net earnings per share

Anti-dilutive shares excluded from diluted earnings per share calculation 245 18

1 unchanged sentence

Income available to participating securities was immaterial in all periods presented.

SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

For the three and nine months ended August 31, 2021 and 2020

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended February 28, 2022 and 2021

( Except per share amounts or as otherwise indicated, currency and share amounts in thousands )

NOTE 11—GEOGRAPHIC INFORMATION:

The Company attributes revenues from external customers to the country from where products are delivered.

Shown below are the countries accounted for 10% or more of the Company’s revenue and property and equipment, net, for the periods presented:

Three Months Ended

Nine Months Ended

August 31, 2021

August 31, 2020

August 31, 2021

August 31, 2020

United States

August 31, 2021

NOTE 11—SEGMENT INFORMATION:

Segment results for all prior periods have been restated for comparability to the Company’s current reportable segments (see Note 1 – Organization and Basis of Presentation for further discussion).

Summarized financial information related to the Company’s reportable business segments for the periods presented is shown below:

Americas Europe APJ Consolidated

Three Months Ended February 28, 2022

Revenue $ 9,074,273 $ 5,579,788 $ 815,916 $ 15,469,977

Operating income 133,537 65,332 23,571 222,440

Three Months Ended February 28, 2021

Revenue $ 4,307,007 $ 132,532 $ 499,475 $ 4,939,014

Operating income 120,435 6,235 15,078 141,748

Americas Europe APJ Consolidated

February 28, 2022 $ 16,498,640 $ 10,619,007 $ 1,605,017 $ 28,722,664

November 30, 2021 15,708,483 10,657,886 1,300,011 27,666,380

Property and equipment, net:

United States

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended February 28, 2022 and 2021

( Except per share amounts or as otherwise indicated, currency and share amounts in thousands )

NOTE 12—RELATED PARTY TRANSACTIONS:

The Company has a business relationship with MiTAC Holdings Corporation (“MiTAC Holdings”), a publicly-traded company in Taiwan, which began in 1992 when MiTAC Holdings became the Company's primary investor through its affiliates.

As of both August 31, 2021 and November 30, 2020, MiTAC Holdings and its affiliates beneficially owned approximately 18 % of the Company’s outstanding common stock.

The Company has a business relationship with MiTAC Holdings Corporation (“MiTAC Holdings”), a publicly-traded company in Taiwan, which began in 1992 when MiTAC Holdings became one of the Company's primary investors through its affiliates.

As of both February 28, 2022 and November 30, 2021, MiTAC Holdings and its affiliates beneficially owned approximately 9.5 % of the Company’s outstanding common stock.

Matthew Miau, Chairman Emeritus of the Company’s Board of Directors and a director, is the Chairman of MiTAC Holdings and a director or officer of MiTAC Holdings’ affiliates.

Beneficial ownership of the Company’s common stock by MiTAC Holdings

As noted above, MiTAC Holdings and its affiliates in the aggregate beneficially owned approximately 18% of the Company’s outstanding common stock as of August 31, 2021.

As noted above, MiTAC Holdings and its affiliates in the aggregate beneficially owned approximately 9.5 % of the Company’s outstanding common stock as of February 28, 2022.

These shares are owned by the following entities:

As of August 31, 2021

As of February 28, 2022

MiTAC Holdings (1)

11 unchanged sentences

Miau is affiliated with any person(s), entity, or entities that hold a majority interest in MiTAC Incorporated.

MiTAC Holdings generally has influence over the Company regarding matters submitted to stockholders for consideration, including any merger or acquisition of the Company.

Among other things, this could have the effect of delaying, deterring or preventing a change of control over the Company.

The following table presents the Company's transactions with MiTAC Holdings and its affiliates for the periods indicated:

Three Months Ended

Nine Months Ended

August 31, 2021

August 31, 2020

August 31, 2021

August 31, 2020

February 28, 2022 February 28, 2021

Purchases of inventories and services $ 46,576 $ 41,157

2 unchanged sentences

for use of facilities of MiTAC Holdings and affiliates, net 36 32

SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

For the three and nine months ended August 31, 2021 and 2020

( Except per share amounts or as otherwise indicated, currency and share amounts in thousands )

The following table presents the Company’s receivable from and payable to MiTAC Holdings and its affiliates for the periods presented:

August 31, 2021

November 30, 2020

February 28, 2022 November 30, 2021

Receivable from related parties (included in Accounts receivable, net) $ 40,197 $ 21,841

Payable to related parties (included in Accounts payable) 35,825 32,802

The Company’s business relationship with MiTAC Holdings and its affiliates has been informal and is generally not governed by long-term commitments or arrangements with respect to pricing terms, revenue or capacity commitments.

The Company negotiates pricing and other material terms on a case-by-case basis with MiTAC Holdings and affiliates.

The Company has adopted a policy requiring that material transactions with MiTAC Holdings or its related parties be approved by its Audit Committee, which is composed solely of independent directors.

In addition, Mr.

Miau’s compensation is approved by the Nominating and Corporate Governance Committee, which is also composed solely of independent directors.

Synnex Technology International is a publicly-traded corporation in Taiwan that currently provides distribution and fulfillment services to various markets in Asia and Australia, and is also a potential competitor of the Company.

Neither MiTAC Holdings nor Synnex Technology International is restricted from competing with the Company.

NOTE 13—EMPLOYEE BENEFIT PLANS:

The Company has 401(k) plans in the United States under which eligible employees may contribute up to the maximum amount as provided by law.

Employees become eligible to participate in these plans on the first day of the month after their employment date.

The Company may make discretionary contributions under the plans.

Employees in certain international subsidiaries of the Company are covered by government-mandated defined contribution plans.

During the three and nine months ended August 31, 2021, the Company contributed $ 1,178 and $ 3,742 , respectively, to defined contribution plans.

During the three and nine months ended August 31, 2020, the Company contributed $ 960 and $ 3,176 , respectively, to defined contribution plans.

The Company has a deferred compensation plan for certain directors and officers.

Distributions under the plan are subject to Section 409A of the United States Tax Code.

The Company may invest balances in the plan in trading securities reported on recognized exchanges.

As of August 31, 2021, and November 30, 2020, the deferred compensation liability balance was $ 4,733 and $ 4,628 , respectively .

Defined Benefit Plans

The Company’s defined benefit plans sponsored by certain international subsidiaries are not material to operations.

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended February 28, 2022 and 2021

( Except per share amounts or as otherwise indicated, currency and share amounts in thousands )

NOTE 13—EQUITY:

Share repurchase program

In June 2020, the Board of Directors authorized a three-year $ 400,000 share repurchase program, effective July 1, 2020, pursuant to which the Company may repurchase its outstanding common stock from time to time in the open market or through privately negotiated transactions.

As of August 31, 2021, the Company had not repurchased any shares under this program.

On September 28, 2021 , the Company announced that its Board of Directors declared a quarterly cash dividend of $ 0.20 per common share payable on October 29, 2021 to stockholders of record as of the close of business on October 15, 2021 .

Future dividends are subject to continued capital availability, compliance with the covenants and conditions in some of the Company's credit facilities and declaration by the Board of Directors in the best interest of the Company’s stockholders.

NOTE 15—LEASES:

The Company leases certain of its facilities and equipment under operating lease agreements, which expire in various periods through 2030 .

The Company’s finance leases are not material.

SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

For the three and nine months ended August 31, 2021 and 2020

( Except per share amounts or as otherwise indicated, currency and share amounts in thousands )

The following table presents the various components of lease costs.

Three Months Ended

Nine Months Ended

August 31, 2021

August 31, 2020

August 31, 2021

August 31, 2020

Operating lease cost

Short-term lease cost

Variable lease cost

Sublease income

Total operating lease cost

As of August 31, 2021, the Company had $ 9,610 of future payments under additional leases, primarily for corporate facilities that had not yet commenced.

These leases will commence in 2021, with lease terms ranging from 3 to 5 years.

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

Fiscal Years Ending November 30,

2021 (remaining three months)

Total payments

imputed interest*

Total present value of lease payments

* Imputed interest represents the difference between undiscounted cash flows and discounted cash flows.

The following amounts were recorded in the Company's Consolidated Balance Sheet as of:

Operating leases

Balance sheet location

August 31, 2021

November 30, 2020

Operating lease Right of Use ("ROU") assets

Other assets, net

Current operating lease liabilities

Other accrued liabilities

Noncurrent operating lease liabilities

Other long-term liabilities

The following table presents s upplemental cash flow information related to the Company's operating leases for the nine months ended August 31, 2021, and 2020.

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

Nine months ended

Cash flow information

August 31, 2021

August 31, 2020

Cash paid for amounts included in the measurement of lease liabilities

Non-cash ROU assets obtained in exchange for lease liabilities (subsequent to initial adoption)

The weighted-average remaining lease term and discount rate were as follows:

Nine months ended

Operating lease term and discount rate

August 31, 2021

August 31, 2020

Weighted-average remaining lease term (years)

Weighted-average discount rate

SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

For the three and nine months ended August 31, 2021 and 2020

( Except per share amounts or as otherwise indicated, currency and share amounts in thousands )

In June 2020, the Board of Directors authorized a three -year $ 400 million share repurchase program, effective July 1, 2020, pursuant to which the Company may repurchase its outstanding common stock from time to time in the open market or through privately negotiated transactions.

As of February 28, 2022, the Company had $ 376.2 million available for future repurchases of its common stock under the authorized share repurchase program.

The Company's common share repurchase activity for the three months ended February 28, 2022 is summarized as follows:

Shares Weighted-average price per share

Treasury stock balance at November 30, 2021

2,633 $ 76.40

Shares of treasury stock repurchased under share repurchase program 229 103.73

Shares of treasury stock repurchased for tax withholdings on equity awards 53 102.80

Treasury stock balance at February 28, 2022

2,915 $ 79.03

On March 24, 2022 , the Company announced that its Board of Directors declared a quarterly cash dividend of $ 0.30 per common share payable on April 22, 2022 to stockholders of record as of the close of business on April 8, 2022 .

Future dividends are subject to continued capital availability and declaration by the Board of Directors that the dividend is in the best interest of the Company’s stockholders.

NOTE 14—COMMITMENTS AND CONTINGENCIES:

The Company was contingently liable as of August 31, 2021 under agreements to repurchase repossessed inventory acquired by flooring companies as a result of default on floor plan financing arrangements by the Company's customers.

These arrangements are described in Note 8 - Accounts Receivable Arrangements and do not have expiration dates.

As is customary in the technology industry, to encourage certain customers to purchase products from us, the Company also has other financing agreements with financial institutions to provide inventory financing facilities to the Company’s customers and allow certain customers of the Company to finance their purchases directly with the financial institutions.

The Company is contingently liable to repurchase inventory sold under these agreements in the event of any default by its customers under the agreement and such inventory being repossessed by the financial institutions.

As the Company does not have access to information regarding the amount of inventory purchased from the Company, still on hand with the customer at any point in time, the Company’s repurchase obligations relating to inventory cannot be reasonably estimated.

Losses, if any, would be the difference between the repossession cost and the resale value of the inventory.

There have been no repurchases through August 31, 2021 under these agreements and the Company is not aware of any pending customer defaults or repossession obligations.

Repurchases under these arrangements have been insignificant to date and the Company is not aware of any pending customer defaults or repossession obligations.

The Company believes that, based on historical experience, the likelihood of a material loss pursuant to these inventory repurchase obligations is remote.

The French Autorité de la Concurrence (“Competition Authority”) began in 2013 an investigation into the French market for certain products of Apple, Inc.

("Apple") for which the Company is a distributor.

In March 2020, the Competition Authority imposed fines on Tech Data, on another distributor, and on Apple, finding that Tech Data entered into an anticompetitive agreement with Apple regarding volume allocations of Apple products.

The fine imposed on Tech Data was € 76 million (approximately $ 85 million as of February 28, 2022).

The Company has vigorously contested the arguments of the Competition Authority, and the Company has appealed its determination to the French courts, seeking to set aside or reduce the fine.

Although the Company believes it has strong arguments on appeal, the Company has determined that the best estimate of probable loss related to this matter as of February 28, 2022 is € 36 million (approximately $ 40 million as of February 28, 2022).

Under French law, the pendency of the Company’s appeal does not suspend the obligation to pay the fine.

Tech Data agreed with the French authorities to make eight equal installment payments in relation to the fine assessed for a total amount of € 22.8 million on a quarterly basis from January 2021 through October 2022 .

As of February 28, 2022, the Company has an accrual established for this matter of € 21.8 million ($ 24.4 million as of February 28, 2022) that represents the total estimate of probable loss less installment payments made

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended February 28, 2022 and 2021

( Except per share amounts or as otherwise indicated, currency and share amounts in thousands )

If the appeal process is not completed prior to the end of December 2022, the Company may be required to pay further amounts towards the full fine assessed by the Competition Authority before the Company’s appeal is finally determined.

However, any additional amounts that may need to be paid have not yet been determined.

Additionally, the Company has provided a third-party surety bond to the Competition Authority to guarantee the payment of the amount of the fine and interest, if applicable.

A civil lawsuit related to this matter, alleging anticompetitive actions in association with the established distribution networks for Apple, Tech Data and another distributor was filed by eBizcuss.

The Company is currently evaluating this matter and cannot currently estimate the probability or amount of any potential loss.

From time to time, the Company receives notices from third parties, including customers and suppliers, seeking indemnification, payment of money or other actions in connection with claims made against them.

5 unchanged sentences

Similarly, Concentrix agreed to indemnify SYNNEX, each of its subsidiaries and each of their respective directors, officers and employees from and against all liabilities relating to, arising out of or resulting from, among other matters, the liabilities allocated to Concentrix as part of the Separation.

SYNNEX expects Concentrix to fully perform under the terms of the separation and distribution agreement.

The Company expects Concentrix to fully perform under the terms of the Separation and Distribution agreement.

Under the Separation and Distribution agreement, SYNNEX and Concentrix agreed to cooperate with each other in managing litigation related to both companies' businesses.

The Separation and Distribution agreement also included provisions that assign to each company responsibility for managing pending and future litigation related to the general corporate matters of SYNNEX arising prior to the Separation.

Under the tax matters agreement with Concentrix that was entered into in connection with the Separation, if the spin-off fails to qualify for tax-free treatment, Concentrix is generally required to indemnify the Company for any taxes resulting from the spin-off (and related costs and other damages) to the extent such amounts result from (1) an acquisition of all or a portion of the Concentrix’ equity securities or assets by any means, (2) any action or failure to act by Concentrix after the distribution affecting the voting rights of Concentrix’ stock, (3) other actions or failures to act by Concentrix, or (4) certain breaches of the Concentrix agreements and representations in the tax matters agreement.

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

SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

For the three and nine months ended August 31, 2021 and 2020

( Except per share amounts or as otherwise indicated, currency and share amounts in thousands )

NOTE 17—SUBSEQUENT EVENT:

On September 1, 2021, pursuant to the terms of the Merger Agreement, SYNNEX acquired all the outstanding shares of common stock of Tiger Parent (AP) Corporation, the parent company of Tech Data, for consideration of $ 1.61 billion in cash and 44 million shares of common stock of SYNNEX, valued at approximately $ 5,614,400 .

The combined company is referred to as TD SYNNEX.

The Merger is expected to create a leading global distributor and solutions aggregator for the IT ecosystem.

Following the Merger, the stockholders of Tiger Parent (AP) Corporation own approximately 46 % of SYNNEX common stock on a fully diluted basis, based on the Company’s shares outstanding as of August 31, 2021.

Given the short period of time from the close of the acquisition to the filing of this Form 10-Q, the Company is in the process of compiling the initial accounting for the Merger, including the determination of the fair values of tangible assets acquired and liabilities assumed, the valuation of intangible assets acquired, income and non-income based taxes, residual goodwill and the amount of goodwill that will be deductible for tax purposes.

In connection with the closing of the Merger, SYNNEX repaid in full all amounts outstanding and terminated all outstanding commitments under the U.S.

Credit Agreement, of which a principal amount of $ 500 million of term loans were outstanding on the date of repayment and termination, and the U.S.

Term Loan Credit Agreement, of which a principal amount of $ 1.0 billion of term loans were outstanding on the date of repayment and termination.

Indebtedness outstanding at the closing of the Merger under Tech Data’s Asset-Based Credit Agreement was also repaid in full and the agreement was terminated.

SYNNEX used the net proceeds from the Notes Offering, together with borrowings made under the New Credit Agreement, and cash on hand at SYNNEX and Tiger Parent (AP) Corporation, to fund the cash consideration for the Merger and repay existing borrowings.

Additionally, on October 1, 2021, approximately $ 66 million outstanding aggregate principal amount of Tech Data’s 3.70 % Senior Notes due in 2022 and approximately $ 131 million outstanding aggregate principal amount of Tech Data’s 4.95 % Senior Notes due in 2027 were redeemed in full.

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