TD SYNNEX CORP 10-K

Item 8. Financial Statements and Supplementary Data INDEX Page Consolidated Financial Statements of TD SYNNEX Corporation Management’s Report on Internal Control over Financial Reporting 51 Report of Independent Registered Public Accounting Firm ( KPMG LLP , Santa Clara, CA , Auditor Firm I D: 185 ) 52 Consolidated Balance Sheets as of November 30, 202 2 and 202 1 55 Consolidated Statements of Operations for Fiscal Years Ended November 30, 202 2 , 202 1 and 20 20 56 Consolidated Statements of Comprehensive Income for Fiscal Years Ended November 30, 202 2 , 202 1 and 20 20 57 Consolidated Statements of Stockholders’ Equity for Fiscal Years Ended November 30, 202 2 , 202 1 and 20 20 58 Consolidated Statements of Cash Flows for Fiscal Years Ended November 30, 202 2 , 202 1 and 20 20 59 Notes to Consolidated Financial Statements 60 Financial Statement Schedule Schedule II: Valuation and Qualifying Accounts for Fiscal Years Ended November 30, 202 2 , 202 1 and 20 20 97 Financial statement schedules not listed above are either omitted because they are not applicable or the required information is shown in the Consolidated Financial Statements or in the Notes thereto. 50 Table of Contents Management’s Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of ours are being made only in accordance with authorizations of management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework). Based on this assessment, our management concludes that, as of November 30, 2022, our internal control over financial reporting was effective at the reasonable assurance level based on those criteria. The effectiveness of our internal control over financial reporting as of November 30, 2022 has been audited by KPMG LLP, an independent registered public accounting firm, as stated in their report which appears on page 52 of this Report. 51 Table of Contents Report of Independent Registered Public Accounting Firm To the Stockholders and Board of Directors TD SYNNEX Corporation: Opinions on the Consolidated Financial Statements and Internal Control Over Financial Reporting We have audited the accompanying consolidated balance sheets of TD SYNNEX Corporation and subsidiaries (the Company) as of November 30, 2022 and 2021, the related consolidated statements of operations, comprehensive income, stockholders’ equity, and cash flows for each of the years in the three-year period ended November 30, 2022, and the related notes and financial statement Schedule II - Valuation and Qualifying Accounts (collectively, the consolidated financial statements). We also have audited the Company’s internal control over financial reporting as of November 30, 2022, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of November 30, 2022 and 2021, and the results of its operations and its cash flows for each of the years in the three-year period ended November 30, 2022, in conformity with U.S. generally accepted accounting principles. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of November 30, 2022 based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Basis for Opinions The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s consolidated financial statements and an opinion on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. 52 Table of Contents Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Critical Audit Matters The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Sufficiency of audit evidence over revenue As discussed in Note 13 to the consolidated financial statements, and presented in the consolidated statements of operations, the Company reported revenue of $62,343,810 thousand for the fiscal year ended November 30, 2022. We identified the evaluation of the sufficiency of audit evidence over revenue as a critical audit matter. The geographical dispersion of distribution and administrative facilities required especially subjective auditor judgment in determining the nature and extent of procedures to perform and in evaluating those procedures. The following are the primary procedures we performed to address this critical audit matter. We applied auditor judgment to determine the nature and extent of procedures to be performed over revenue, including the determination of the locations at which those procedures were to be performed. For certain locations we evaluated the design and tested the operating effectiveness of certain internal controls related to the recognition of revenue. For the Americas and Europe segments, we performed a software-assisted data analysis at a transactional level to identify higher risk revenue entries to test. We tested the identified higher risk revenue transactions during the year by comparing the amounts recognized by the Company to relevant underlying documentation such as contracts, shipping documents, or other third-party evidence. For the APJ segment, we then tested samples of revenue transactions during the year by comparing the amounts recognized by the Company to relevant underlying documentation such as contracts, shipping documents, or other third-party evidence. We investigated a selection of journal entries that were made by the Company to adjust revenue. We evaluated the sufficiency of the audit evidence obtained over revenue by assessing the results of the procedures performed, including the appropriateness of the determination of locations to perform procedures. Fair value of the Europe reporting unit As discussed in Notes 2 and 8 to the consolidated financial statements, the Company tests goodwill for impairment annually as of September 1, or more frequently if events or changes in circumstances indicate that it may be impaired. The Company performed its annual goodwill impairment test as of September 1, 2022 and chose to bypass the qualitative assessment for all reporting units and proceed directly to the quantitative assessment. The quantitative assessment indicated that the estimated fair value of the Europe reporting unit exceeded its carrying value by approximately 6%. The goodwill allocated to the Europe reporting unit as of November 30, 2022 was $1,277,226 thousand. We identified the evaluation of the fair value of the Europe reporting unit as a critical audit matter. A higher degree of subjective auditor judgment was required to evaluate certain assumptions used in the Company’s estimate of the fair value of the Europe reporting unit. Specifically, the Company’s determination of the forecasted revenue growth rates and discount rate required subjective and challenging auditor judgment. Minor changes to these assumptions, either individually or in aggregate, could have a significant effect on the Company’s assessment of the fair value of the Europe reporting unit. Additionally, the audit effort associated with the discount rate required specialized skills and knowledge. 53 Table of Contents The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s goodwill impairment assessment process, including controls related to the determination of the forecasted revenue growth rates and discount rate used to estimate the fair value of the Europe reporting unit. To assess the Company’s ability to forecast revenues, we compared the Europe reporting unit’s historical revenue forecasts to actual revenues. We also evaluated the forecasted revenue growth rates by comparing them to the Company’s peers and industry reports. In addition, we involved valuation professionals with specialized skills and knowledge, who assisted in evaluating the discount rate by (i) comparing the inputs of the weighted average cost of capital to available market data for comparable entities and (ii) evaluating the reasonableness of the inputs and assumptions by assessing the methodology used by the Company. /s/ KPMG LLP We have served as the Company’s auditor since 2012. Santa Clara, California January 23, 2023 54 Table of Contents TD SYNNEX CORPORATION CONSOLIDATED BALANCE SHEETS (currency and share amounts in thousands, except par value) November 30, 2022 November 30, 2021 ASSETS Current assets: Cash and cash equivalents $ 522,604 $ 993,973 Accounts receivable, net 9,420,999 8,310,032 Receivables from vendors, net 819,135 1,118,963 Inventories 9,066,620 6,642,915 Other current assets 671,507 668,261 Total current assets 20,500,865 17,734,144 Property and equipment, net 421,064 483,443 Goodwill 3,803,850 3,917,276 Intangible assets, net 4,422,877 4,913,124 Other assets, net 585,342 618,393 Total assets $ 29,733,998 $ 27,666,380 LIABILITIES AND EQUITY Current liabilities: Borrowings, current $ 268,128 $ 181,256 Accounts payable 13,988,980 12,034,946 Other accrued liabilities 2,171,613 2,017,253 Total current liabilities 16,428,721 14,233,455 Long-term borrowings 3,835,665 3,955,176 Other long-term liabilities 501,856 556,134 Deferred tax liabilities 942,250 1,015,640 Total liabilities 21,708,492 19,760,405 Commitments and contingencies (Note 18) Stockholders’ equity: 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, 98,696 and 98,204 shares issued as of November 30, 2022 and 2021, respectively 99 98 Additional paid-in capital 7,374,100 7,271,337 Treasury stock, 4,049 and 2,633 shares as of November 30, 2022 and 2021, respectively ( 337,217 ) ( 201,139 ) Accumulated other comprehensive loss ( 719,710 ) ( 336,194 ) Retained earnings 1,708,234 1,171,873 Total stockholders' equity 8,025,506 7,905,975 Total liabilities and equity $ 29,733,998 $ 27,666,380 (Amounts may not add due to rounding) The accompanying Notes are an integral part of these Consolidated Financial Statements. 55 Table of Contents TD SYNNEX CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (currency and share amounts in thousands, except per share amounts) Fiscal Years Ended November 30, 2022 2021 2020 Revenue $ 62,343,810 $ 31,614,169 $ 19,977,150 Cost of revenue ( 58,443,611 ) ( 29,724,635 ) ( 18,783,292 ) Gross profit 3,900,199 1,889,534 1,193,858 Selling, general and administrative expenses ( 2,627,007 ) ( 1,154,166 ) ( 665,102 ) Acquisition, integration and restructuring costs ( 222,319 ) ( 112,150 ) ( 7,414 ) Operating income 1,050,873 623,218 521,341 Interest expense and finance charges, net ( 222,578 ) ( 157,835 ) ( 79,023 ) Other (expense) income, net ( 1,165 ) 1,102 ( 6,172 ) Income from continuing operations before income taxes 827,130 466,485 436,146 Provision for income taxes ( 175,823 ) ( 71,416 ) ( 101,609 ) Income from continuing operations 651,307 395,069 334,538 Income from discontinued operations, net of taxes — — 194,622 Net income $ 651,307 $ 395,069 $ 529,160 Earnings per common share: Basic Continuing operations $ 6.79 $ 6.28 $ 6.50 Discontinued operations — — 3.78 Net income $ 6.79 $ 6.28 $ 10.28 Diluted Continuing operations $ 6.77 $ 6.24 $ 6.46 Discontinued operations — — 3.76 Net income $ 6.77 $ 6.24 $ 10.21 Weighted-average common shares outstanding: Basic 95,225 62,239 50,900 Diluted 95,509 62,698 51,237 (Amounts may not add due to rounding) The accompanying Notes are an integral part of these Consolidated Financial Statements. 56 Table of Contents TD SYNNEX CORPORATION CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (currency in thousands) Fiscal Years Ended November 30, 2022 2021 2020 Net income $ 651,307 $ 395,069 $ 529,160 Other comprehensive (loss) income: Unrealized gains (losses) on cash flow hedges during the period, net of tax (expense) benefit of ($ 11,457 ), ($ 2,155 ) and $ 3,981 for fiscal years ended November 30, 2022, 2021 and 2020, respectively. 35,046 8,747 ( 16,405 ) Reclassification of net losses on cash flow hedges to net income, net of tax (benefit) of ($ 6,517 ), ($ 10,278 ) and ($ 880 ) for fiscal years ended November 30, 2022, 2021 and 2020, respectively. 19,926 31,837 3,190 Total change in unrealized gains (losses) on cash flow hedges, net of taxes 54,972 40,584 ( 13,215 ) Foreign currency translation adjustments and other, net of tax benefit (expense) of $ 3,192 , ($ 635 ) and $ 4,352 for fiscal years ended November 30, 2022, 2021 and 2020, respectively ( 438,488 ) ( 186,020 ) 27,721 Other comprehensive (loss) income ( 383,516 ) ( 145,436 ) 14,506 Comprehensive income $ 267,791 $ 249,633 $ 543,666 (Amounts may not add due to rounding) The accompanying Notes are an integral part of these Consolidated Financial Statements. 57 Table of Contents TD SYNNEX CORPORATION CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (currency and share amounts in thousands) Common stock Treasury stock Shares Amount Additional paid-in capital Shares Amount Accumulated other comprehensive income (loss) Retained earnings Total stockholders' equity Balances, November 30, 2019 53,154 $ 53 $ 1,545,421 2,399 $ ( 172,627 ) $ ( 209,077 ) $ 2,624,680 $ 3,788,450 Share-based compensation — — 33,202 — — — — 33,202 Issuance of common stock on exercise of options, for employee stock purchase plan and vesting of restricted stock, net of shares withheld for employee taxes 517 1 12,913 104 ( 15,184 ) — — ( 2,270 ) Repurchases of common stock — — — 35 ( 3,405 ) — — ( 3,405 ) Cash dividends declared — — — — — — ( 20,782 ) ( 20,782 ) Other comprehensive income (loss) — — — — — 14,506 — 14,506 Net income — — — — — — 529,160 529,160 Balances, November 30, 2020 53,671 54 1,591,536 2,538 ( 191,216 ) ( 194,571 ) 3,133,058 4,338,860 Separation of Concentrix — — — — — 3,813 ( 2,305,982 ) ( 2,302,169 ) Share-based compensation — — 53,192 — — — — 53,192 Issuance of common stock on exercise of options, for employee stock purchase plan and vesting of restricted stock, net of shares withheld for employee taxes 533 — 12,789 95 ( 9,923 ) — — 2,866 Cash dividends declared — — — — — — ( 50,272 ) ( 50,272 ) Issuance of common stock on Tech Data merger, net of issuance costs 44,000 44 5,613,820 — — — — 5,613,864 Other comprehensive income (loss) — — — — — ( 145,436 ) — ( 145,436 ) Net income — — — — — — 395,069 395,069 Balances, November 30, 2021 98,204 98 7,271,337 2,633 ( 201,139 ) ( 336,194 ) 1,171,873 7,905,975 Share-based compensation — — 91,167 — — — — 91,167 Issuance of common stock on exercise of options, for employee stock purchase plan and vesting of restricted stock, net of shares withheld for employee taxes 492 1 8,234 119 ( 11,062 ) — — ( 2,827 ) Repurchases of common stock — — — 1,297 ( 125,016 ) — — ( 125,016 ) Cash dividends declared — — — — — — ( 114,946 ) ( 114,946 ) Other comprehensive income (loss) — — — — — ( 383,516 ) — ( 383,516 ) Purchase of noncontrolling interest — — 3,362 — — — — 3,362 Net income — — — — — — 651,307 651,307 Balances, November 30, 2022 98,696 $ 99 $ 7,374,100 4,049 $ ( 337,217 ) $ ( 719,710 ) $ 1,708,234 $ 8,025,506 (Amounts may not add due to rounding) The accompanying Notes are an integral part of these Consolidated Financial Statements. 58 Table of Contents TD SYNNEX CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (currency in thousands) Fiscal Years Ended November 30, 2022 2021 2020 Cash flows from operating activities: Net income $ 651,307 $ 395,069 $ 529,160 Adjustments to reconcile net income to net cash (used in) provided by operating activities: Depreciation and amortization 463,365 151,664 341,637 Share-based compensation 91,167 53,192 33,202 Provision for doubtful accounts 34,741 ( 7,544 ) 49,281 Deferred income taxes ( 92,381 ) ( 322 ) ( 48,992 ) Impairment of long-lived assets 4,726 22,166 — Other 4,376 9,109 18,564 Changes in operating assets and liabilities, net of the impact of Concentrix separation and acquisition of businesses: Accounts receivable, net ( 1,497,995 ) ( 517,224 ) 12,691 Receivables from vendors, net 241,242 ( 113,602 ) 79,842 Inventories ( 2,636,759 ) ( 1,030,110 ) ( 128,786 ) Accounts payable 2,375,952 1,854,887 685,014 Other operating assets and liabilities 310,655 ( 7,498 ) 262,753 Net cash (used in) provided by operating activities ( 49,604 ) 809,787 1,834,366 Cash flows from investing activities: Purchases of property and equipment ( 117,049 ) ( 54,892 ) ( 197,965 ) Acquisition of businesses, net of cash acquired — ( 907,093 ) ( 5,560 ) Other 1,541 9,637 ( 5,970 ) Net cash used in investing activities ( 115,508 ) ( 952,348 ) ( 209,495 ) Cash flows from financing activities: Dividends paid ( 114,946 ) ( 50,272 ) ( 20,782 ) Repurchases of common stock ( 125,016 ) — ( 3,405 ) Net borrowings (repayments) on revolving credit loans 96,592 ( 417,072 ) 157,866 Principal payments on long-term debt ( 128,728 ) ( 2,277,913 ) ( 1,304,190 ) Proceeds from issuance of common stock 8,234 12,789 12,913 Repurchases of common stock for tax withholdings on equity awards ( 11,062 ) ( 9,923 ) ( 15,184 ) Net transfer of cash and cash equivalents to Concentrix — ( 149,948 ) — Borrowings on long-term debt — 2,545,535 892,234 Cash paid for debt issuance costs — ( 42,254 ) ( 8,521 ) Other ( 665 ) ( 3,562 ) ( 2,627 ) Net cash used in financing activities ( 275,591 ) ( 392,620 ) ( 291,696 ) Effect of exchange rate changes on cash, cash equivalents and restricted cash ( 31,354 ) ( 38,776 ) 4,545 Net (decrease) increase in cash, cash equivalents and restricted cash ( 472,057 ) ( 573,957 ) 1,337,721 Cash, cash equivalents and restricted cash at beginning of year 994,913 1,568,870 231,149 Cash, cash equivalents and restricted cash at end of year $ 522,856 $ 994,913 $ 1,568,870 Supplemental disclosures of cash flow information: Interest paid on borrowings $ 220,760 $ 116,983 $ 120,896 Income taxes paid $ 178,035 $ 173,547 $ 179,707 Supplemental disclosure of non-cash investing and financing activities: Issuance of stock to acquire business $ — $ 5,614,400 $ — Net assets transferred to Concentrix $ — $ 2,322,598 $ — (Amounts may not add due to rounding) The accompanying Notes are an integral part of these Consolidated Financial Statements. 59 Table of Contents TD SYNNEX CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (currency and share amounts in thousands unless otherwise noted, except per share amounts) NOTE 1—ORGANIZATION AND BASIS OF PRESENTATION: 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. Concentrix is now an independent public company trading under the symbol “CNXC” on the Nasdaq Stock Market. After the Separation, SYNNEX did 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 year ended November 30, 2020 are presented as income from discontinued operations, net of taxes on the Consolidated Statements of Operations. 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 5 – 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 have 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 services to SYNNEX following the Separation . 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 $ 1.6 billion in cash ($ 1.1 billion in cash after giving effect to a $ 500.0 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 $ 5.6 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. Certain columns and rows may not add due to the use of rounded numbers. NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Use of estimates The preparation of financial statements in conformity with generally accepted accounting principles (“GAAP”) in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expense during the reporting period. 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. Actual results could differ from the estimates. 60 Table of Contents Principles of consolidation 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 Consolidated Financial Statements include 100 % of the assets and liabilities of majority-owned subsidiaries. Investments in 20 % through 50 % owned affiliated companies are accounted under the equity method where the Company exercises significant influence over operating and financial affairs of the investee and is not the primary beneficiary. Investments in less than 20 % owned companies, where the Company does not have significant influence, are recorded at cost or fair value based on whether the equity securities have readily determinable fair values. Segment reporting Operating segments are based on components of the Company that engage in business activity that earn revenue and incur expenses and (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. 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 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 regions of the Americas, Europe and Asia-Pacific and Japan (“APJ”) and reviews and allocates resources based on these geographic regions. As a result, as of September 1, 2021 the Company began operating in three reportable segments based on its geographic regions: the Americas, Europe and APJ. Cash and cash equivalents The Company considers all highly liquid debt instruments purchased with an original maturity or remaining maturity at the date of purchase of three months or less to be cash equivalents. Cash equivalents consist principally of money market deposit accounts and money market funds that are stated at cost, which approximates fair value. The Company is exposed to credit risk in the event of default by financial institutions to the extent that cash balances with financial institutions are in excess of amounts that are insured. 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 original equipment manufacturer (“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 November 30, 2022, and 2021, accounts receivable sold to and held by the financial institutions under these programs were $ 1.4 billion 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. During the fiscal years ended November 30, 2022, 2021 and 2020, discount fees were $ 26.2 million, $ 4.7 million and $ 3.2 million, respectively. 61 Table of Contents Inventories Inventories are stated at the lower of cost and net realizable value. Cost is computed based on the weighted-average method. Inventories are comprised of finished goods and work-in-process. Finished goods include products purchased for resale, system components purchased for both resale and for use in the Company’s systems design and integration business and completed systems. Work-in-process inventories are not material to the Consolidated Financial Statements. Derivative Financial Instruments The Company accounts for its derivative instruments as either assets or liabilities and carries them at fair value. For derivative instruments that hedge the exposure to variability in expected future cash flows that are designated as cash flow hedges, the gain or loss on the derivative instrument is reported as a component of “Accumulated other comprehensive income (loss)” in stockholders’ equity and reclassified into earnings in the same line associated with the hedged transactions, in the same period or periods during which the hedged transaction affects earnings. To receive hedge accounting treatment, cash flow hedges must be highly effective in offsetting changes to expected future cash flows on hedged transactions. The company classifies cash flows related to the settlement of its cash flow hedges as operating activities in the Consolidated Statements of Cash Flows. For derivative instruments that hedge a portion of the Company's net investment in foreign-currency denominated operations that are designated as net investment hedges, the gain or loss on the derivative instrument is reported as a component of “Accumulated other comprehensive income (loss)” in stockholders’ equity until the sale or substantially complete liquidation of the underlying assets of the Company's investment. The initial fair value of hedge components excluded from the assessment of effectiveness is recognized in the Consolidated Statement of Operations under a systematic and rational method over the life of the hedging instrument. The excluded component is recognized in "Interest expense and finance charges, net" on the Consolidated Statement of Operations. The Company classifies cash flows related to the settlement of its net investment hedges as investing activities in the Consolidated Statements of Cash Flows. For derivative instruments that are not designated as hedges, gains and losses resulting from changes in fair value on derivative instruments are reported in the Consolidated Statements of Operations in the current period. Property and equipment Property and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method based upon the shorter of the estimated useful lives of the assets, or the lease term of the respective assets, if applicable. Maintenance and repairs are charged to expense as incurred, and improvements are capitalized. When assets are retired or otherwise disposed of, the cost and accumulated depreciation and amortization are removed from the accounts and any resulting gain or loss is reflected in operations in the period realized. The Company’s capitalized software has been obtained or developed for internal use only. Development and acquisition costs are capitalized for computer software only when management authorizes and commits to funding a computer software project through the approval of a capital expenditure requisition, and the software project is either for the development of new software, to increase the life of existing software or to add significantly to the functionality of existing software. Once these requirements have been met, capitalization would begin at the point that conceptual formulation, evaluation, design and testing of possible software project alternatives have been completed. Capitalization ceases when the software project is substantially complete and ready for its intended use. The ranges of estimated useful lives for property and equipment categories are as follows: Equipment and Furniture 3 - 10 years Software 3 - 10 years Leasehold Improvements 2 - 15 years Buildings and Building Improvements 10 - 40 years Business Combinations The purchase price is allocated to the assets acquired, liabilities assumed, and noncontrolling interests in the acquired entity generally based on their fair values at the acquisition date. The excess of the fair value of purchase 62 Table of Contents consideration over the fair value of these assets acquired, liabilities assumed and noncontrolling interests in the acquired entity is recorded as goodwill. The primary items that generate goodwill include the value of the synergies between the acquired entity and the Company and the value of the acquired assembled workforce, neither of which qualify for recognition as an intangible asset. Amounts recorded in a business combination may change during the measurement period, which is a period not to exceed one year from the date of acquisition, as additional information about conditions existing at the acquisition date becomes available. The Company includes the results of operations of the acquired business in the Consolidated Financial Statements prospectively from the date of acquisition. Acquisition-related charges are recognized separately from the business combination and are expensed as incurred. These charges primarily include direct third-party professional and legal fees, and integration-related costs. Goodwill and intangible assets The values assigned to intangible assets include estimates and judgment regarding expectations for the length of customer relationships acquired in a business combination. Included within intangible assets is an indefinite lived trade name intangible asset. The Company's indefinite lived trade name intangible asset is considered a single unit of accounting and is tested for impairment at the consolidated level annually as of September 1, and more frequently if events or changes in circumstances indicate that it is more likely than not that the asset is impaired. Other purchased intangible assets are amortized over the useful lives based on estimates of the use of the economic benefit of the asset or on the straight-line amortization method. The Company allocates goodwill to reporting units based on the reporting unit expected to benefit from the business combination and tests for impairment annually as of September 1, or more frequently if events or changes in circumstances indicate that it may be impaired. Goodwill is tested for impairment at the reporting unit level by first performing a qualitative assessment to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying value. The factors that are considered in the qualitative analysis include macroeconomic conditions, industry and market considerations, cost factors such as increases in product cost, labor, or other costs that would have a negative effect on earnings and cash flows; and other relevant entity-specific events and information. The Company also has the option to bypass the qualitative assessment for any reporting unit in any period. If the reporting unit does not pass or the Company chooses to bypass the qualitative assessment, then the reporting unit’s carrying value is compared to its fair value. The fair values of the reporting units are estimated using market and discounted cash flow approaches. The assumptions used in the market approach are based on the value of a business through an analysis of sales and other multiples of guideline companies and recent sales or offerings of a comparable entity. The assumptions used in the discounted cash flow approach are based on historical and forecasted revenue, operating costs, working capital requirements, future economic conditions, discount rates and other relevant factors. Goodwill is considered impaired if the carrying value of the reporting unit exceeds its fair value and the excess is recognized as an impairment loss. No goodwill impairment has been identified for any of the years presented. Finite-lived intangible assets consist primarily of customer relationships, vendor lists and other intangible assets. Amortization is based on the pattern in which the economic benefits of the intangible assets will be consumed or on a straight-line basis when the consumption pattern is not apparent over the following useful lives: Customer Relationships 4 - 15 years Vendor Lists 10 years Other Intangible Assets 1 - 10 years Impairment of long-lived assets The Company reviews the recoverability of its long-lived assets, including finite-lived intangible assets, property and equipment, right-of-use ("ROU") assets and certain other assets, when events or changes in circumstances occur that indicate the carrying value of the asset or asset group may not be recoverable. The assessment of possible impairment is based on the Company’s ability to recover the carrying value of the asset or asset group from the expected future pre-tax cash flows, undiscounted and without interest charges, of the related operations. If these cash flows are less than the carrying value of such assets, an impairment loss is recognized for the difference between estimated fair value and carrying value. 63 Table of Contents Leases The Company enters into leases as a lessee for property and equipment in the ordinary course of business. When procuring goods or services, or upon entering into a contract with its customers, the Company determines whether an arrangement contains a lease at its inception. As part of that evaluation, the Company considers whether there is an implicitly or explicitly identified asset in the arrangement and whether the Company, as the lessee, or the customer, if the Company is the lessor, has the right to control the use of that asset. When the Company is the lessee, all leases with a term of more than 12 months are recognized as ROU assets and associated lease liabilities in the Consolidated Balance Sheet. Lease liabilities are recorded at the lease commencement date and determined using the present value of the lease payments not yet paid, at the Company’s incremental borrowing rate, which approximates the rate at which the Company would borrow on a secured basis in the country where the lease was executed. The interest rate implicit in the lease is generally not determinable in transactions where the Company is the lessee. The ROU asset equals the lease liability adjusted for any initial direct costs, prepaid rent and lease incentives. The Company’s variable lease payments generally relate to payments tied to various indexes, non-lease components and payments above a contractual minimum fixed amount. Operating leases are included in other assets, net, other accrued liabilities and other long-term liabilities in the Consolidated Balance Sheet. Substantially all of the Company's leases are classified as operating leases and the Company’s finance leases are not material. The lease term includes options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. The Company made a policy election to not recognize leases with a lease term of 12 months or less in the Consolidated Balance Sheet. Lease expenses are recorded within selling, general, and administrative expenses in the Consolidated Statements of Operations. Operating lease payments are presented within “Cash flows from operating activities” in the Consolidated Statements of Cash Flows. Concentration of credit risk Financial instruments that potentially subject the Company to significant concentration of credit risk consist principally of cash and cash equivalents, accounts receivable, receivables from vendors and derivative instruments. 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 November 30, 2022, 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 OEM vendors primarily in the technology industry. 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 potential credit losses. 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 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): Twelve Months Ended November 30, 2022 November 30, 2021 November 30, 2020 Apple, Inc. 11 % N/A (1) N/A (1) HP Inc. 10 % 12 % 15 % __________________ ( 1) Revenue generated from products purchased from this vendor was less than 10% of consolidated revenue during the period presented. One customer accounted for 10 %, 17 % and 23 % of the Company’s total revenue in fiscal years 2022, 2021 and 2020, respectively. As of November 30, 2022 and 2021, no single customer comprised more than 10% of the consolidated accounts receivable balance. Book overdrafts Book overdrafts, representing checks issued in excess of balances on deposit in the applicable bank accounts and which have not been paid by the applicable bank at the balance sheet date are classified as “Borrowings, current” in the Company’s Consolidated Balance Sheets. Under the terms of the Company’s banking arrangements, the respective 64 Table of Contents financial institutions are not legally obligated to honor the book overdraft balances. The Company’s policy is to report the change in book overdrafts as a financing activity in the Consolidated Statements of Cash Flows. Revenue recognition The Company generates revenue primarily from the sale of various IT products. The Company recognizes revenues from the sale of IT hardware and software as control is transferred to customers, which is at the point in time when the product is shipped or delivered. 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. 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. In situations where arrangements include customer acceptance provisions, revenue is recognized when the Company can objectively verify the products comply with specifications underlying acceptance and the customer has control of the products. Revenue is presented net of taxes collected from customers and remitted to government authorities. The Company generally invoices a customer upon shipment, or in accordance w ith specific contractual provisions. Payments are due as per contract terms and do not contain a significant financing component. Service revenues represents less than 10 % of the total revenue for the periods presented. Provisions for sales returns and allowances are estimated based on historical data and are recorded concurrently with the recognition of revenue. A liability is recorded at the time of sale for estimated product returns based upon historical experience and an asset is recognized for the amount expected to be recorded in inventory upon product return. These provisions are reviewed and adjusted periodically by the Company. Revenue is reduced for early payment discounts and volume incentive rebates offered to customers, which are considered variable consideration, at the time of sale based on an evaluation of the contract terms and historical experience. The Company recognizes revenue on a net basis on certain contracts, where the Company’s performance obligation is to arrange for the products or services to be provided by another party or the rendering of logistics services for the delivery of inventory for which the Company does not assume the risks and rewards of ownership, by recognizing the margins earned in revenue with no associated cost of revenue. Such arrangements include supplier service contracts, post-contract software support services, cloud computing and software as a service arrangements, certain fulfillment contracts and extended warranty contracts. The Company considers shipping and handling activities as costs to fulfill the sale of products. 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. The Company disaggregates its operating segment revenue by geography, which the Company believes provides a meaningful depiction of the nature of its revenue. Disaggregated revenue disclosure is presented in Note 13 – Segment Information. Cost of Revenue Cost of revenue includes the product price paid to OEM suppliers, net of any incentives, rebates, price protection and purchase discounts received from the OEM suppliers. Cost of revenue also consists of provisions for inventory losses and write-downs, shipping and handling costs and royalties due to OEM vendors. In addition, cost of revenue includes the cost of materials, labor and overhead and warranty for design and integration activities. Selling, General and Administrative expenses Selling, general and administrative expenses are charged to income as incurred. Expenses of promoting and selling products and services are classified as selling expense and include such items as compensation, sales commissions and travel. General and administrative expenses include such items as compensation, cost of warehouse, delivery centers and other non-integration facilities, legal and professional costs, office supplies, non-income taxes, insurance and utility expenses. In addition, selling, general and administrative expenses include other operating items such as allowances for credit losses, depreciation and amortization of intangible assets. 65 Table of Contents OEM supplier programs Funds received from OEM suppliers for volume promotion programs, price protection and product rebates are recorded as adjustments to cost of revenue and/or the carrying value of inventories, as appropriate. Where there is a binding agreement, the Company tracks vendor promotional programs for volume discounts on a program-by-program basis and records them as a reduction to cost of revenue based on a systematic and rational allocation. The Company monitors the balances of vendor receivables on a quarterly basis and adjusts the balances due for differences between expected and actual sales volume. Vendor receivables are generally collected through reductions authorized by the vendor to accounts payable. Funds received for specific marketing and infrastructure reimbursements, net of related costs, are recorded as adjustments to “Selling, general and administrative expenses,” and any excess reimbursement amount is recorded as an adjustment to cost of revenue. Royalties The Company’s software product purchases include products licensed from OEM vendors, which are subsequently distributed to resellers. Royalties to OEM vendors are accrued and recorded in cost of revenue when software products are shipped and revenue is recognized. Warranties The Company’s OEM suppliers generally warrant the products distributed by the Company and allow returns of defective products. The Company generally does not independently warrant the products it distributes; however, the Company does warrant the following: (1) products that it builds to order from components purchased from other sources, (2) services with regard to products integrated for its customers; and (3) products sold in countries where the Company is responsible for defective product as a matter of law. The time period required by law in certain countries exceeds the warranty period provided by the manufacturer. The Company is obligated to provide warranty protection for sales of certain IT products within the European Union (“EU”) for up to two years as required under the EU directive where vendors have not affirmatively agreed to provide pass-through protection. Warranty expense and the accrual for warranty costs were not material to the Company’s Consolidated Financial Statements for any of the periods presented. Advertising Costs related to advertising and product promotion expenditures are charged to “Selling, general and administrative expenses” as incurred and are primarily offset by OEM marketing reimbursements. Net costs related to advertising and promotion expenditures were not material to the Company’s Consolidated Financial Statements for any of the periods presented. Income taxes The asset and liability method is used in accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for the expected tax consequences of temporary differences between the tax bases of assets and liabilities and their reported amounts in the financial statements using enacted tax rates and laws that will be in effect when the difference is expected to reverse. Tax on global low-taxed intangible income is accounted for as a current expense in the period in which the income is included in a tax return using the “period cost” method. Valuation allowances are provided against deferred tax assets that are not likely to be realized. The Company recognizes tax benefits from uncertain tax positions only if that tax position is more likely than not to be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon settlement. The Company recognizes interest and penalties related to unrecognized tax benefits in the provision for income taxes. Foreign currency translations The financial statements of the Company’s international subsidiaries whose functional currencies are the local currencies are translated into U.S. dollars for consolidation as follows: assets and liabilities at the exchange rate as of the balance sheet date, stockholders’ equity at the historical rates of exchange, and income and expense amounts at the average exchange rate for the month. Translation adjustments resulting from the translation of the subsidiaries’ accounts are included in “Accumulated other comprehensive income (loss)” in stockholders’ equity. Transactions denominated in currencies other than the applicable functional currency are converted to the functional currency at the exchange rate on the 66 Table of Contents transaction date. At period end, monetary assets and liabilities are remeasured to the functional currency using exchange rates in effect at the balance sheet date. Non-monetary assets and liabilities are remeasured at historical exchange rates. Gains and losses resulting from foreign currency transactions are included in earnings within “Cost of revenue” and “Other (expense) income, net.” Comprehensive income Comprehensive income is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. The primary components of comprehensive income for the Company include net income, foreign currency translation adjustments arising from the consolidation of the Company’s international subsidiaries and unrealized gains and losses on cash flow hedges. Share-based compensation The Company accounts for share-based payment transactions in which the Company receives services in exchange for equity instruments of the Company. Share-based compensation cost for stock options, restricted stock awards and units, performance-based restricted stock units and employee stock purchase plans is determined based on the fair value at the grant date. The Company recognizes share-based compensation cost as expense for awards other than its performance-based restricted stock units ratably on a straight-line basis over the requisite service period. The Company recognizes share-based compensation cost associated with its performance-based restricted stock units over the requisite service period if it is probable that the performance conditions will be satisfied. The Company accounts for expense reductions that result from the forfeiture of unvested awards in the period that the forfeitures occur. Earnings per common share Earnings per share is calculated using the two-class method. The two-class method is an earnings allocation proportional to the respective ownership among holders of common stock and participating securities. Basic earnings per common share is computed by dividing net income attributable to the Company’s common stockholders by the weighted-average of common shares outstanding during the period. Diluted earnings per common share also considers the dilutive effect of in-the-money stock options and restricted stock units, calculated using the treasury stock method. Treasury Stock Repurchases of shares of common stock are accounted for at cost, which includes brokerage fees and excise taxes, and are included as a component of stockholders’ equity in the Consolidated Balance Sheets. 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 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 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 29, 2024 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 fiscal year 2022 and will apply the guidance prospectively to future acquisitions. 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 adoption of this new guidance did not have a material impact on the Company's Consolidated Financial Statements. 67 Table of Contents Recently issued accounting pronouncements In September 2022, the FASB issued an accounting standards update which will require new enhanced disclosures by the buyer in supplier finance programs. Disclosures will include key terms of the program, including payment terms, along with the amount of related obligations, the financial statement caption that includes such obligations, and a rollforward of activity related to the obligations during the period. The new accounting standard must be adopted retrospectively to the earliest comparative period presented, except for the rollforward requirement, which should be applied prospectively. The accounting standard is effective for the Company beginning with the quarter ending February 29, 2024, except for the rollforward requirement which is effective for the quarter ending February 28, 2025. Early adoption is permitted. While the new accounting standard is not expected to have an impact on the Company's financial condition, results of operations or cash flows, the Company is currently evaluating the impact the new accounting standard will have on disclosures related to its supplier finance program obligations in the notes to the consolidated financial statements. In March 2020, the FASB issued optional guidance for a limited time to ease the potential burden in accounting for or recognizing the effects of reference rate reform, particularly, the risk of cessation of the London Interbank Offered Rate (“LIBOR”) on financial reporting. The guidance provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments are elective and were effective upon issuance for all entities through December 31, 2022, which was extended through December 31, 2024 per an update the FASB issued in December 2022. 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 $ 7.2 billion, comprised of $ 1.6 billion in cash ($ 1.1 billion in cash after giving effect to a $ 500.0 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 $ 5.6 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 $ 228.1 million of outstanding Tech Data Senior Notes. The Company has accounted for the Merger as a business combination and allocated the purchase price to the fair values of Tiger Parent (AP) Corporation’s assets acquired and liabilities assumed. As of August 31, 2022, the Company completed its evaluation of assets acquired and liabilities assumed and finalized all related estimates. During the year ended November 30, 2022, the Company updated the fair values of certain assets acquired and liabilities assumed, including an increase in goodwill of $ 43.7 million, an increase in deferred tax liabilities of $ 38.3 million, a decrease in net vendor receivables of $ 21.0 million and an increase in inventory of $ 9.4 million. As the measurement period has concluded, the impact of any future adjustments to the assets acquired and liabilities assumed will be recorded in the Consolidated Statement of Operations in the period such change occurs. 68 Table of Contents The allocation of the purchase price is as follows: Cash and cash equivalents $ 702,907 Accounts receivable, net 5,156,809 Receivables from vendors, net 709,629 Inventories 3,002,641 Other current assets 397,807 Property and equipment 347,532 Goodwill 3,588,317 Intangible assets 4,933,900 Other assets 473,194 Total assets 19,312,736 Borrowings, current 493,076 Accounts payable 6,613,664 Other accrued liabilities 1,251,049 Long-term borrowings 2,218,672 Other long-term liabilities 412,526 Deferred tax liabilities 1,099,349 Total liabilities 12,088,336 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 $ 500.0 million is expected to be deductible for tax purposes . Included within the Company’s Consolidated Statement of Operations are estimated revenues for the years ended November 30, 2022 and 2021 of approximately $ 38 billion and $ 10 billion, respectively, 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 fiscal years ended November 30, 2022 and 2021. 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 69 Table of Contents 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. (Unaudited) Fiscal Years Ended November 30, 2021 2020 Revenue $ 60,623,568 $ 55,974,478 Income from continuing operations attributable to TD SYNNEX Corporation 519,688 349,356 Adjustments reflected in the pro forma results include the following: • Amortization of acquired intangible assets • Interest costs associated with the Merger • Removal of certain non-recurring transaction costs of $ 22.3 million and non-recurring financing costs of $ 47.0 million • Tax effects of adjustments based on an estimated statutory tax rate NOTE 4—ACQUISITION, INTEGRATION AND RESTRUCTURING EXPENSES: Acquisition, integration and restructuring costs are primarily comprised of costs related to the Merger, costs related to the Global Business Optimization 2 Program initiated by Tech Data prior to the Merger (the “GBO 2 Program”) and costs related to the Separation. The Merger 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 IT and other consulting services, as well as legal expenses. Personnel and other costs are primarily comprised of costs related to retention and other bonuses, severance and duplicative labor costs, as well as costs related to the settlement of c ertain outstanding long-term cash incentive awards for Tech Data upon closing of the Merger. Long-lived asset charges for fiscal year 2022 are primarily comprised of accelerated depreciation and amortization expense of $ 64.4 million due to changes in asset useful lives in conjunction with the consolidation of certain IT systems, as well as impairment charges. Long-lived asset charges for fiscal year 2021 represent an impairment charge of $ 22.2 million recorded for the write-off of capitalized costs associated with Tech Data’s tdONE program in conjunction with the decision to consolidate 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 6 – Share Based Compensation for further information) and expenses for certain restricted stock awards issued in conjunction with the Merger. To date, acquisition and integration expenses related to the Merger were composed of the following: Fiscal Years Ended November 30, 2022 2021 Professional services costs $ 29,352 $ 22,288 Personnel and other costs 40,220 33,716 Long-lived assets charges 69,053 22,166 Stock-based compensation 52,171 20,113 Total $ 190,796 $ 98,283 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 continued 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 costs. Restructuring costs are comprised of severance costs and other 70 Table of Contents associated exit costs, including certain consulting costs. Other costs are primarily comprised of personnel costs, facilities costs and certain professional services fees not related to restructuring activities. Acquisition, integration and restructuring costs under the GBO 2 Program for fiscal 2022 and 2021 included the following: Fiscal Years Ended November 30, 2022 2021 Restructuring costs $ 21,872 $ 8,709 Other costs 9,652 5,158 Total $ 31,524 $ 13,867 Restructuring costs under the GBO 2 Program for fiscal 2022 and 2021 were composed of the following: Fiscal Years Ended November 30, 2022 2021 Severance $ 7,445 $ 2,893 Other exit costs 14,427 5,816 Total $ 21,872 $ 8,709 Restructuring costs related to the GBO 2 Program by segment are as follows: Fiscal Years Ended November 30, 2022 2021 Americas $ 5,666 $ 2,658 Europe 15,737 5,746 APJ 469 305 Total $ 21,872 $ 8,709 Restructuring activity during fiscal years 2022 and 2021 related to the GBO 2 Program is as follows: Restructuring costs Severance Other Exit Costs Total Accrued Balance as of November 30, 2020 $ — $ — $ — Balance acquired related to the Merger 5,095 221 5,316 Expenses during fiscal 2021 2,893 5,816 8,709 Cash payments ( 2,953 ) ( 4,427 ) ( 7,380 ) Foreign currency translation ( 117 ) ( 19 ) ( 136 ) Accrued Balance as of November 30, 2021 4,918 1,591 6,509 Expenses during fiscal 2022 7,445 14,427 21,872 Cash payments ( 6,628 ) ( 15,064 ) ( 21,692 ) Foreign currency translation ( 56 ) ( 419 ) ( 475 ) Accrued Balance as of November 30, 2022 $ 5,679 $ 535 $ 6,214 The Separation During the fiscal year ended November 30, 2020, the Company incurred $ 7.4 million in transaction costs related to the Separation of Concentrix. 71 Table of Contents NOTE 5—DISCONTINUED OPERATIONS: The following table summarizes the financial results from discontinued operations of Concentrix included in the Consolidated Statement of Operations: Fiscal Year Ended November 30, 2020 Revenue $ 4,719,534 Costs and expenses ( 4,410,773 ) Interest expense and finance charges and others, net ( 40,866 ) Income from discontinued operations before taxes 267,895 Provision for income taxes ( 73,273 ) Income from discontinued operations, net of taxes $ 194,622 There were no revenues earned or cost and expenses incurred of discontinued operations during the fiscal years ended November 30, 2022 or 2021. There were no non-cash items or capital expenditures of discontinued operations during the fiscal years ended November 30, 2022 or 2021. During the fiscal year ended November 30, 2020, significant non-cash items and capital expenditures of discontinued operations included in the Consolidated Statement of Cash Flows are outlined below: Fiscal Year Ended November 30, 2020 Operating activities: Depreciation and amortization $ 276,566 Share-based compensation 15,572 Provision for doubtful accounts 8,139 Deferred income taxes ( 29,470 ) Unrealized foreign exchange losses 5,647 Investing activities: Purchases of property and equipment $ 171,332 72 Table of Contents The following table presents assets and liabilities that were transferred to Concentrix as of December 1, 2020: Cash and cash equivalents $ 152,656 Accounts receivable, net 1,079,086 Other current assets 189,323 Current assets of discontinued operations $ 1,421,065 Property and equipment, net $ 451,649 Goodwill 1,836,050 Intangible assets, net 798,959 Deferred tax assets 47,423 Other assets 620,099 Noncurrent assets of discontinued operations $ 3,754,180 Borrowings, current $ 33,756 Accounts payable 140,575 Accrued compensation and benefits 419,715 Other accrued liabilities 371,069 Income taxes payable 20,725 Current liabilities of discontinued operations $ 985,840 Long-term borrowings $ 1,111,362 Other long-term liabilities 601,885 Deferred tax liabilities 153,560 Noncurrent liabilities of discontinued operations $ 1,866,807 In connection with the Separation, $ 3.8 million 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. NOTE 6—SHARE-BASED COMPENSATION: Overview of Stock Incentive Plans The Company’s stock incentive plans include plans adopted in 2020 and 2013 (the “TD SYNNEX Plan(s)”). The TD SYNNEX Plans, as amended, provide for the direct award or sale of shares of common stock, restricted stock awards ("RSAs"), restricted stock units ("RSUs"), the grant of options to purchase shares of common stock and the award of stock appreciation rights to employees and non-employee directors and consultants. No further grants may be made under the 2013 TD SYNNEX Plan and all outstanding awards under the 2013 TD SYNNEX Plan continue to be governed by their existing terms. As of November 30, 2022, there were 3.9 million shares of common stock authorized under the 2020 TD SYNNEX Plan available for future grants. Under the TD SYNNEX Plans, qualified employees are eligible for the grant of incentive stock options to purchase shares of common stock. Qualified employees and outside directors and consultants are eligible for the grant of non-qualified stock options, stock appreciation rights, RSAs and RSUs. The outstanding RSAs and RSUs generally vest ratably on an annual basis over a period of three to five years , with certain awards subject to other vesting periods as defined per the grant agreement. RSAs granted to qualified non-employee directors vest one fourth on a quarterly basis over a one-year period. The holders of RSAs are entitled to the same voting, dividend and other rights as the Company’s common stockholders. Certain RSUs vest subject to the achievement of individual, divisional or company-wide performance goals. The majority of the performance-based RSUs vest at the end of three-year requisite service periods, subject to the achievement of company-wide financial performance goals approved by the Compensation Committee. 73 Table of Contents The exercise price for incentive stock options will not be less than 100 % of the fair market value of the stock on the date of grant and the stock options have a contractual term of ten years . The majority of outstanding stock options vest as to one fifth of the stock underlying the stock options on the first anniversary date of the grant and the remaining vest monthly over a four-year period starting one month after the first anniversary of the date of grant. Unless terminated sooner, the 2020 TD SYNNEX Plan will terminate on March 17, 2030. The Company recognizes share-based compensation expense for all share-based awards made to employees and directors, including employee stock options, RSAs, RSUs, performance-based RSUs and employee stock purchase rights, based on estimated fair values. A summary of share-based compensation expense in the Consolidated Statements of Operations for TD SYNNEX stock incentive plans is presented below: Fiscal Years Ended November 30, 2022 2021 2020 Selling, general and administrative expenses $ 38,994 $ 33,078 $ 17,631 Acquisition, integration and restructuring costs (on awards issued in connection with the Merger) $ 6,514 $ 8,289 $ — Total share-based compensation expense $ 45,508 $ 41,367 $ 17,631 The Company settles all share-based award exercises with newly issued common shares or treasury shares. Valuation Assumptions The Company estimates the fair value of share-based payment awards on the grant date and recognizes as expense over the requisite service period in the Company’s Consolidated Financial Statements. The Company uses the Black-Scholes valuation model to estimate the fair value of stock options. The Black-Scholes option-pricing model was developed for use in estimating the fair value of short-lived exchange traded options that have no vesting restrictions and are fully transferable. In addition, option-pricing models require the input of highly subjective assumptions, including the option’s expected life and the price volatility of the underlying stock. The expected stock price volatility assumption was determined using historical volatility of the Company’s common stock. The fair value of stock awards is determined based on the stock price at the date of grant. For grants that do not accrue dividends or dividend equivalents, the fair value is the stock price reduced by the present value of estimated dividends over the vesting period. For performance-based RSUs, the grant-date fair value assumes that the targeted performance goals will be achieved. Over the performance period, the number of awards expected to vest will be adjusted higher or lower based on the probability of achievement of performance goals. The Company accounts for expense reductions that result from the forfeiture of unvested awards in the period that the forfeitures occur. Employee Stock Options A summary of the changes in the Company’s stock options is set forth below: Options Outstanding (number of shares in thousands) Number of shares Weighted- average exercise price per share Balances, November 30, 2021 689 $ 66.29 Options granted 72 90.16 Options exercised ( 84 ) 38.40 Balances, November 30, 2022 677 $ 72.29 74 Table of Contents The Company did not grant any options during the fiscal year 2020. The following assumptions were used in the Black-Scholes valuation model in fiscal years 2022 and 2021: Fiscal Years Ended November 30, 2022 2021 Expected life (years) 5.5 5.5 - 6.1 Risk free interest rate 1.73 % - 3.92 % 0.72 % - 1.16 % Expected volatility 39.10 % - 40.18 % 38.01 % - 38.85 % Dividend yield 1.13 % - 1.37 % 0.75 % - 0.88 % The weighted-average grant-date fair values of the stock options granted during fiscal years 2022 and 2021 were $ 33.57 and $ 34.37 , respectively. As of November 30, 2022, 677 options were outstanding with a weighted-average remaining contractual term of 7.09 years, a weighted-average exercise price of $ 72.29 per option and an aggregate pre-tax intrinsic value of $ 21.1 million. As of November 30, 2022, 362 options were vested and exercisable with a weighted-average remaining contractual term of 6.01 years, a weighted-average exercise price of $ 60.52 per share and an aggregate pre-tax intrinsic value of $ 15.3 million. The cash received from the exercise of options and the intrinsic values of options exercised during fiscal years 2022, 2021 and 2020 were as follows: Fiscal Years Ended November 30, 2022 2021 2020 Intrinsic value of options exercised $ 4,682 $ 16,163 $ 15,746 Cash received from exercise of options $ 3,216 $ 10,541 $ 9,018 As of November 30, 2022, the unamortized share-based compensation expense related to unvested stock options under the TD SYNNEX Plans was $ 4.6 million which will be recognized over an estimated weighted-average amortization period of 2.49 years. Restricted Stock Awards and Restricted Stock Units A summary of the changes in the Company’s non-vested RSAs and RSUs during fiscal year 2022 is presented below: Number of shares Weighted-average, grant-date fair value per share Non-vested as of November 30, 2021 1,066 $ 100.20 RSAs granted 341 88.64 RSUs granted 350 99.12 RSAs and RSUs vested ( 353 ) 93.23 RSAs and RSUs cancelled/forfeited (1) ( 97 ) 74.87 Non-vested as of November 30, 2022 1,307 $ 95.69 __________________ (1) For performance-based RSUs, the difference between maximum awards and the actual number of shares issued upon full vesting is included. The weighted-average grant-date fair value of the 537 RSAs and 147 RSUs granted during fiscal year 2021 were $ 100.04 and $ 96.29 , respectively. The weighted-average grant-date fair value of the 60 RSAs and 3 RSUs granted during fiscal year 2020 were $ 97.40 and $ 110.58 , respectively. As of November 30, 2022, there was $ 74.1 million of total unamortized share-based compensation expense related to non-vested RSAs and RSUs granted under the TD SYNNEX Plans. That cost is expected to be recognized over an estimated weighted-average amortization period of 2.06 years. 75 Table of Contents In connection with the Separation, as required by the TD S YNNEX 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. In accordance with the employee matters agreement, each exercisable and non-exercisable stock option and unvested RSA 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 RSUs and performance-contingent awards were modified to provide the holders RSUs 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 t he 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. 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 by Tiger Parent Holdings L.P. from shares received at closing into restricted shares of TD SYNNEX that vest over 2 years. The following table summarizes the activity related to these restricted shares during the year ended November 30, 2022: (in thousands) Restricted shares Nonvested at November 30, 2021 751 Vested ( 363 ) Canceled ( 38 ) Nonvested at November 30, 2022 350 The restricted shares had a fair value of $ 127.60 per share upon closing of the Merger which is being recorded as share-based compensation expense on a straight-line basis over the vesting period in “Acquisition, integration, and restructuring costs” in the Consolidated Statements of Operations. The Company recorded $ 45.7 million and $ 11.8 million of share-based compensation expense related to these restricted shares in "Acquisition, integration, and restructuring costs" during fiscal years 2022 and 2021, respectively. As of November 30, 2022, there was $ 35.6 million of total unamortized share-based compensation expense related to these unvested awards to be recognized over a weighted-average amortization period of 0.75 years. 2014 Employee Stock Purchase Plan On January 6, 2014, the Board of Directors approved the adoption of the 2014 Employee Stock Purchase Plan (“2014 ESPP”) to succeed the Company's 2003 Employee Stock Purchase Plan. The 2014 ESPP, as amended, commenced on January 1, 2015 with 750 authorized shares, which was due to antidilution provisions in the 2014 ESPP increased by 537 authorized shares following the Separation. Under the 2014 ESPP, there are four offering periods of three months each in a calendar year. Eligible employees in the United States can choose to have a fixed percentage deducted from their bi-weekly compensation, subject to a maximum purchase limit of $ 10 thousand in a calendar year, to purchase the Company’s common stock at a discount of 5 %. Highly compensated employees are not eligible to participate in the plan. Share-based compensation expense related to the 2014 ESPP was immaterial during fiscal years 2022, 2021 and 2020. Tax Benefit of Share-Based Compensation Expense During fiscal years 2022, 2021 and 2020, the Company recognized income tax benefits related to the plans discussed above of $ 8.2 million, $ 12.1 million, and $ 4.4 million, respectively, within the provision for income taxes. 76 Table of Contents NOTE 7—STOCKHOLDERS’ EQUITY: Share Repurchase Program In June 2020, the Board of Directors authorized a three-year $ 400.0 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. The following table presents information with respect to purchases of common stock by the Company under the share repurchase program during the year ended November 30, 2022. 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 1,297 96.37 Shares of treasury stock repurchased for tax withholdings on equity awards 119 93.14 Treasury stock balance at November 30, 2022 4,049 $ 83.29 In January 2023, the Board of Directors authorized a new three-year $ 1.0 billion share repurchase program, replacing the existing $ 400.0 million share repurchase program, pursuant to which the Company may repurchase its outstanding common stock from time to time in the open market or through privately negotiated transactions. Dividends The Company declared cumulative cash dividends of $ 1.20 , $ 0.80 and $ 0.40 per share during the years ended November 30, 2022, 2021 and 2020, respectively. On January 10, 2023 , the Company announced a cash dividend of $ 0.35 per share to stockholders of record as of January 20, 2023 , payable on January 27, 2023 . Dividends are subject to continued capital availability and the declaration by the Board of Directors in the best interest of the Company’s stockholders. NOTE 8—BALANCE SHEET COMPONENTS: Cash, cash equivalents and restricted cash: 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: As of November 30, 2022 2021 Cash and cash equivalents $ 522,604 $ 993,973 Restricted cash included in other current assets 252 940 Cash, cash equivalents and restricted cash $ 522,856 $ 994,913 Accounts receivable, net: As of November 30, 2022 2021 Accounts receivable $ 9,550,741 $ 8,424,868 Less: Allowance for doubtful accounts ( 129,742 ) ( 114,836 ) Accounts receivable, net $ 9,420,999 $ 8,310,032 77 Table of Contents Receivables from vendors, net: As of November 30, 2022 2021 Receivables from vendors $ 831,539 $ 1,130,091 Less: Allowance for doubtful accounts ( 12,404 ) ( 11,128 ) Receivables from vendors, net $ 819,135 $ 1,118,963 Allowance for doubtful trade receivables: Balance at November 30, 2019 $ 23,865 Additions 42,592 Write-offs, reclassifications and foreign exchange translation 904 Balance at November 30, 2020 67,361 Acquisitions 75,362 Additions ( 7,544 ) Write-offs, reclassifications and foreign exchange translation ( 20,343 ) Balance at November 30, 2021 114,836 Additions 34,741 Write-offs, reclassifications and foreign exchange translation ( 19,835 ) Balance at November 30, 2022 $ 129,742 Allowance for receivables from vendors: Balance at November 30, 2019 $ 5,481 Additions — Write-offs, reclassifications and foreign exchange translation ( 354 ) Balance at November 30, 2020 5,126 Acquisitions 7,524 Additions 588 Write-offs, reclassifications and foreign exchange translation ( 2,110 ) Balance at November 30, 2021 11,128 Additions 1,497 Write-offs, reclassifications and foreign exchange translation ( 221 ) Balance at November 30, 2022 $ 12,404 Property and equipment, net: As of November 30, 2022 2021 Land $ 27,311 $ 28,409 Equipment, computers and software 414,359 406,972 Furniture and fixtures 59,349 53,766 Buildings, building improvements and leasehold improvements 219,859 218,284 Construction-in-progress 6,859 1,045 Total property and equipment, gross $ 727,737 708,476 Total accumulated depreciation ( 306,673 ) ( 225,033 ) Property and equipment, net $ 421,064 $ 483,443 78 Table of Contents Depreciation and amortization expense for fiscal years 2022, 2021 and 2020, was $ 164.2 million, $ 44.2 million and $ 24.9 million, respectively. Fiscal year 2022 includes accelerated depreciation and amortization expense of $ 64.4 million due to changes in asset useful lives in conjunction with the consolidation of certain IT systems, which is recorded in "Acquisition, integration and restructuring expenses" in the Consolidated Statements of Operations. Goodwill: Fiscal Year Ended November 30, 2022 Americas Europe APJ Total Balance, beginning of year $ 2,451,478 $ 1,381,023 $ 84,775 $ 3,917,276 Adjustments to fair value during the measurement period for the Merger 16,619 31,404 ( 4,291 ) 43,732 Foreign exchange translation ( 16,271 ) ( 135,201 ) ( 5,686 ) ( 157,158 ) Balance, end of year $ 2,451,826 $ 1,277,226 $ 74,798 $ 3,803,850 Intangible assets, net: As of November 30, 2022 As of November 30, 2021 Gross Amounts Accumulated Amortization Net Amounts Gross Amounts Accumulated Amortization Net Amounts Intangible assets with indefinite lives: Trade name $ 1,003,974 $ — $ 1,003,974 $ 1,050,071 $ — $ 1,050,071 Intangible assets with finite lives: Customer relationships $ 3,800,710 $ ( 453,439 ) $ 3,347,271 $ 3,958,033 $ ( 186,263 ) $ 3,771,770 Vendor lists 176,910 ( 115,814 ) 61,096 177,105 ( 98,670 ) 78,435 Other intangible assets 28,215 ( 17,679 ) 10,536 28,213 ( 15,365 ) 12,848 $ 5,009,809 $ ( 586,932 ) $ 4,422,877 $ 5,213,422 $ ( 300,298 ) $ 4,913,124 Amortization expense for fiscal years 2022, 2021 and 2020, was $ 299.2 million, $ 105.3 million and $ 40.1 million, respectively. Estimated future amortization expense of the Company’s intangible assets is as follows: Fiscal years ending November 30, 2023 $ 288,230 2024 283,421 2025 279,994 2026 277,216 2027 274,152 Thereafter 2,015,889 Total $ 3,418,902 79 Table of Contents Accumulated other comprehensive income (loss) The components of accumulated other comprehensive income (loss) ("AOCI"), net of taxes, were as follows: Unrealized gains (losses) on cash flow hedges, net of taxes Foreign currency translation adjustment and other, net of taxes Total Balance, beginning of year $ ( 48,803 ) $ ( 287,391 ) $ ( 336,194 ) Other comprehensive income (loss) before reclassification 35,046 ( 438,488 ) ( 403,442 ) Reclassification of (gains) losses from other comprehensive income (loss) 19,926 — 19,926 Balance, end of year $ 6,169 $ ( 725,879 ) $ ( 719,710 ) Refer to Note 9 – Derivative Instruments for the location of gains and losses reclassified from accumulated other comprehensive income (loss) to the Consolidated Statements of Operations. NOTE 9—DERIVATIVE INSTRUMENTS: In the ordinary course of business, the Company is exposed to foreign currency risk, interest rate risk, equity risk, commodity price changes and credit risk. The Company enters into transactions, and owns monetary assets and liabilities, that are denominated in currencies other than the legal entity’s functional currency. The Company may enter into forward contracts, option contracts, swaps, or other derivative instruments to offset a portion of the risk on expected future cash flows, earnings, net investments in certain international subsidiaries and certain existing assets and liabilities. However, the Company may choose not to hedge certain exposures for a variety of reasons including, but not limited to, accounting considerations and the prohibitive economic cost of hedging particular exposures. 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’s hedging program is not used for trading or speculative purposes. All derivatives are recognized on the balance sheet at their fair value. Changes in the fair value of derivatives are recorded in the Consolidated Statements of Operations, or as a component of AOCI in the Consolidated Balance Sheets, as discussed below. Cash Flow Hedges 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 . The Company terminated interest rate swaps with a notional value of $ 400.0 million in December 2021. Gains and losses on cash flow hedges are recorded in AOCI until the hedged item is recognized in earnings. Deferred gains and losses associated with cash flow hedges of interest payments are recognized in "Interest expense and finance charges, net" in the Consolidated Statements of Operations in the same period as the related expense is recognized. Derivative instruments designated as cash flow hedges must be de-designated as hedges when it is probable the forecasted hedged transaction will not occur in the initially identified time period or within a subsequent two-month time period. Deferred gains and losses in AOCI associated with such derivative instruments are reclassified into earnings in the period of de-designation. Any subsequent changes in fair value of such derivative instruments are recorded in earnings unless they are re-designated as hedges of other transactions. Net Investment Hedges The Company has entered into foreign currency forward contracts to hedge a portion of its net investment in euro denominated foreign operations which are designated as net investment hedges. The Company entered into the net 80 Table of Contents investment hedges to offset the risk of change in the U.S. dollar value of the Company's investment in a euro functional subsidiary due to fluctuating foreign exchange rates. The aggregate notional values of the Company's outstanding net investment hedge contracts by year of maturity as of November 30, 2022 are as follows: Fiscal years ending November 30, 2023 $ 7,500 2024 257,500 2025 4,375 2026 254,375 2027 — Thereafter — Total $ 523,750 The Company had no net investment hedges outstanding as of November 30, 2021. Non-Designated Derivatives The Company uses short-term forward contracts to offset the foreign exchange risk of assets and liabilities denominated in currencies other than the functional currency of the respective entities. These contracts, which are not designated as hedging instruments, mature or settle within twelve months . Derivatives that are not designated as hedging instruments are adjusted to fair value through earnings in the financial statement line item to which the derivative relates. Fair Values of Derivative Instruments in the Consolidated Balance Sheets The fair values of the Company’s derivative instruments are disclosed in Note 10 - Fair Value Measurements and summarized in the table below: Value as of Balance Sheet Line Item November 30, 2022 November 30, 2021 Derivative instruments not designated as hedging instruments: Foreign exchange forward contracts (notional value) $ 1,853,188 $ 1,217,595 Other current assets 9,597 13,764 Other accrued liabilities 16,085 2,992 Derivative instruments designated as cash flow hedges: Interest rate swaps (notional value) $ 1,000,000 $ 1,500,000 Other current assets 17,222 — Other accrued liabilities — 38,670 Other long-term liabilities — 24,151 Derivative instruments designated as net investment hedges: Foreign currency forward contracts (notional value) $ 523,750 $ — Other accrued liabilities 255 — Other long-term liabilities 16,420 — Volume of Activity 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. 81 Table of Contents 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 net investment hedges in Other Comprehensive Income (“OCI”), and not designated as hedging instruments in the Consolidated Statements of Operations for the periods presented: Location of Gains (losses) in Income For the fiscal years ended November 30, 2022 2021 2020 Derivative instruments designated as cash flow hedges: Gains (losses) recognized in OCI on interest rate swaps $ 46,502 $ 10,902 $ ( 66,372 ) Losses on interest rate swaps reclassified from AOCI into income Interest expense and finance charges, net $ ( 26,443 ) $ ( 42,115 ) $ ( 34,443 ) Derivative instruments designated as net investment hedges: Losses recognized in OCI on foreign exchange forward contracts $ ( 18,477 ) $ — $ — Gains recognized in income (amount excluded from effectiveness testing) Interest expense and finance charges, net $ 1,802 $ — $ — Derivative instruments not designated as hedging instruments: Gains recognized from foreign exchange forward contracts, net (1) Cost of revenue $ 38,360 $ 18,073 $ — (Losses) gains recognized from foreign exchange forward contracts, net (1) Other (expense) income, net ( 10,504 ) ( 6,878 ) 1,844 Gains (losses) recognized from interest rate swaps, net Interest expense and finance charges, net — 128 ( 643 ) Total $ 27,856 $ 11,323 $ 1,201 __________________ (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. Except for the net investment hedge amount for fiscal 2022 shown above, there were no material gain or loss amounts excluded from the assessment of effectiveness. Existing net gains in AOCI that are expected to be reclassified into earnings in the normal course of business within the next twelve months are $ 9.6 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. NOTE 10—FAIR VALUE MEASUREMENTS: The Company’s fair value measurements are classified and disclosed in one of the following three categories: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; and 82 Table of Contents Level 3: 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). 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 November 30, 2022 As of November 30, 2021 Fair value measurement category Fair value measurement category Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Assets: Forward foreign currency exchange contracts not designated as hedges $ 9,597 — $ 9,597 — $ 13,764 — $ 13,764 — Interest rate swaps 17,222 — 17,222 — — — — — Liabilities: Forward foreign currency exchange contracts not designated as hedges $ 16,085 — $ 16,085 — $ 2,992 $ — $ 2,992 $ — Forward foreign currency exchange contracts designated as net investment hedges 16,675 — 16,675 — — — — — Interest rate swaps — — — — 62,821 — 62,821 — 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 long-term foreign currency exchange contracts are measured using valuations based upon quoted prices for similar assets and liabilities in active markets and are valued by reference to similar financial instruments, adjusted for terms specific to the contracts. 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 November 30, 2022 and 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. The estimated fair value of the Senior Notes was approximately $ 2.1 billion and $ 2.4 billion at November 30, 2022 and 2021, respectively. During the fiscal years ended November 30, 2022, 2021 and 2020, there were no transfers between the fair value measurement category levels. 83 Table of Contents NOTE 11—BORROWINGS: Borrowings consist of the following: As of November 30, 2022 2021 Committed and uncommitted revolving credit facilities and borrowings $ 193,128 $ 106,256 Current portion of TD SYNNEX term loan 75,000 75,000 Borrowings, current $ 268,128 $ 181,256 TD SYNNEX term loan $ 1,350,000 $ 1,425,000 TD SYNNEX Senior Notes 2,500,000 2,500,000 Other credit agreements and long-term debt 9,690 72,258 Long-term borrowings, before unamortized debt discount and issuance costs $ 3,859,690 $ 3,997,258 Less: unamortized debt discount and issuance costs ( 24,025 ) ( 42,082 ) Long-term borrowings $ 3,835,665 $ 3,955,176 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. AR Arrangement”). U nder the terms of the U.S. AR Arrangement, 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. The U.S. 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 the Secured Overnight Financing Rate ("SOFR"). 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 certain of its U.S. subsidiaries sell, on a revolving basis, their receivables to a wholly-owned, bankruptcy-remote subsidiary. Such receivables, which are recorded in the Consolidated Balance Sheet, totaled approximately $ 2.9 billion as of November 30, 2022. 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. Any amounts received under the U.S. AR Arrangement are recorded as debt on the Company's Consolidated Balance Sheets. There were no amounts outstanding under the U.S. AR Arrangement at November 30, 2022 or 2021. SYNNEX United States credit agreement Prior to the Merger, in the United States, the Company had a senior secured credit agreement (as amended, the "U.S. Credit Agreement") with a group of financial institutions. The U.S. Credit Agreement included a $ 600.0 million commitment for a revolving credit facility and a term loan in the original principal amount of $ 1.2 billion. Interest on borrowings under the U.S. Credit Agreement was based on LIBOR or a base rate at the Company's option, plus a margin. The margin for LIBOR loans ranged from 1.25 % to 2.00 % and the margin for base rate loans ranged from 0.25 % to 1.00 %, provided that LIBOR was not less than zero . The base rate was a variable rate which was 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 ranged from 0.175 % to 0.30 % per annum. The margins above the applicable interest rates and the revolving commitment fee for revolving loans were 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 were 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 were guaranteed by certain of the Company's United States domestic subsidiaries. The U.S. Credit Agreement was originally scheduled to mature in September 2022, however the U.S. Credit Agreement was terminated on September 1, 2021 and all outstanding balances were repaid in full as part of the Merger (see Note 3 – Acquisitions for further discussion). 84 Table of Contents SYNNEX United States term loan credit agreement Prior to the Merger, in the United States the Company had 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 $ 1.8 billion. The remaining outstanding principal was payable on maturity. Interest on borrowings under the U.S. Term Loan Credit Agreement were based on LIBOR or a base rate at the Company’s option, plus a margin. The margin for LIBOR loans ranged from 1.25 % to 1.75 % and the margin for base rate loans ranged from 0.25 % to 0.75 %, provided that LIBOR was not less than zero . The base rate was a variable rate which was 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 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 were 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 U.S. Credit Agreement pursuant to an intercreditor agreement, and were guaranteed by certain of its domestic subsidiaries. The U.S. Term Loan Credit Agreement was originally scheduled to mature in October 2023, however the U.S. Term Loan Credit Agreement was terminated on September 1, 2021 and all outstanding balances were repaid in full as part of the Merger (see Note 3 – Acquisitions for further discussion). TD SYNNEX Credit Agreement In connection with the Merger Agreement, the Company entered into 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 November 30, 2022 or 2021. The TD SYNNEX Credit Agreement also includes a senior unsecured term loan (the “TD SYNNEX term loan” and, together with the TD SYNNEX revolving credit facility, the “TD SYNNEX credit facilities”) in an aggregate principal amount of $ 1.5 billion, that was fully funded in connection with the closing of the Merger. The borrower under the TD SYNNEX Credit Agreement is the Company. There are no guarantors of the TD SYNNEX Credit Agreement. The maturity of the TD SYNNEX Credit Agreement is on the fifth anniversary of the September 2021 closing date, to occur in September 2026, subject in the case of the TD SYNNEX 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 1.750 %, 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 that 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 5.46 % and 1.49 % as of November 30, 2022 and 2021, respectively. The Company uses interest rate swap derivative contracts to economically convert a portion of the TD SYNNEX term loan to fixed-rate debt (see Note 9 - Derivative Instruments for further discussion). 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 that 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. 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 85 Table of Contents 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 corporate 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. On June 14, 2022, the Company commenced an offer to exchange (the "Exchange Offer") its outstanding unregistered Senior Notes for new registered notes (the "Exchange Notes"). The purpose of the Exchange Offer was to fulfill the Company's obligations under the applicable registration rights agreement entered into in connection with the issuance of the Senior Notes. The Company did not receive any proceeds from the Exchange Offer, and the aggregate principal amount of Exchange Notes that were issued was equal to the aggregate principal amount of Senior Notes that were surrendered pursuant to the Exchange Offer. The terms of the Exchange Notes are substantially identical to the terms of the respective series of the Senior Notes, except that the Exchange Notes are registered under the Securities Act, and certain transfer restrictions, registration rights, and additional interest provisions relating to the Senior Notes do not apply to the Exchange Notes. The Exchange Offer expired on July 14, 2022 and settlement occurred on July 15, 2022. Other Borrowings and Term Debt The Company has various other committed and uncommitted lines of credit with financial institutions, accounts receivable securitization arrangements, finance leases, short-term loans, term loans, credit facilities, and book overdraft facilities, totaling approximately $ 574.9 million in borrowing capacity as of November 30, 2022. Most of these facilities are provided on an unsecured, short-term basis and are reviewed periodically for renewal. Interest rates and other terms of borrowing under these lines of credit vary by country, depending on local market conditions. There was $ 193.1 million outstanding on these facilities at November 30, 2022, at a weighted average interest rate of 4.69 %, and there was $ 106.3 million outstanding at November 30, 2021, at a weighted average interest rate of 4.59 %. Borrowings under these lines of credit facilities are guaranteed by the Company or secured by eligible accounts receivable. 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 the Company entering into the TD SYNNEX Credit Agreement; and on August 9, 2021 the Bridge Facility was reduced to zero as a result of the issuance of the Senior Notes. At November 30, 2022, the Company was also contingently liable for reimbursement obligations with respect to issued standby letters of credit in the aggregate outstanding amount of $ 82.5 million. These letters of credit typically act as a guarantee of payment to certain third parties in accordance with specified terms and conditions. 86 Table of Contents The maximum commitment amounts for local currency credit facilities have been translated into United States Dollars at November 30, 2022 exchange rates. Future principal payments As of November 30, 2022, future principal payments under the above loans are as follows: Fiscal Years Ending November 30, 2023 $ 268,128 2024 784,488 2025 75,202 2026 1,900,000 2027 — Thereafter 1,100,000 Total $ 4,127,818 Covenant compliance 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 November 30, 2022, the Company was in compliance with the financial covenant requirements for the above arrangements. 87 Table of Contents NOTE 12—EARNINGS PER COMMON SHARE: The following table sets forth the computation of basic and diluted earnings per common share for the periods indicated: Fiscal Years Ended November 30, 2022 2021 2020 Basic earnings per common share: Income from continuing operations attributable to common stockholders (1) $ 646,963 $ 391,025 $ 330,780 Income from discontinued operations attributable to common stockholders (1) — — 192,497 Net income attributable to common stockholders (1) $ 646,963 $ 391,025 $ 523,276 Weighted-average number of common shares - basic 95,225 62,239 50,900 Basic earnings per common share Continuing operations $ 6.79 $ 6.28 $ 6.50 Discontinued operations — — 3.78 Total basic earnings per common share $ 6.79 $ 6.28 $ 10.28 Diluted earnings per common share: Income from continuing operations attributable to common stockholders (1) $ 646,974 $ 391,051 $ 330,802 Income from discontinued operations attributable to common stockholders (1) — — 192,510 Net income attributable to common stockholders (1) $ 646,974 $ 391,051 $ 523,313 Weighted-average number of common shares - basic 95,225 62,239 50,900 Effect of dilutive securities: Stock options and RSUs 284 459 337 Weighted-average number of common shares - diluted 95,509 62,698 51,237 Diluted earnings per common share Continuing operations $ 6.77 $ 6.24 $ 6.46 Discontinued operations — — 3.76 Total diluted earnings per common share $ 6.77 $ 6.24 $ 10.21 Anti-dilutive shares excluded from diluted earnings per share calculation 260 16 63 __________________ (1) RSAs granted by the Company are considered participating securities. Income available to participating securities was immaterial in all periods presented. 88 Table of Contents NOTE 13—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 Fiscal Year ended November 30, 2022 Revenue $ 38,791,102 $ 20,289,211 $ 3,263,497 $ 62,343,810 Operating income 734,103 227,249 89,521 1,050,873 Depreciation and amortization expense ( 280,113 ) ( 174,019 ) ( 9,233 ) ( 463,365 ) Purchases of property and equipment (1) ( 44,373 ) ( 15,754 ) ( 5,164 ) ( 65,291 ) Total assets 16,755,395 11,310,344 1,668,259 29,733,998 Fiscal Year ended November 30, 2021 Revenue $ 23,317,274 $ 6,201,302 $ 2,095,593 $ 31,614,169 Operating income 497,964 79,153 46,100 623,218 Depreciation and amortization expense ( 105,669 ) ( 41,333 ) ( 2,562 ) ( 149,564 ) Purchases of property and equipment (1) ( 32,733 ) ( 4,165 ) ( 2,789 ) ( 39,687 ) Total assets 15,708,483 10,657,886 1,300,011 27,666,380 Fiscal Year ended November 30, 2020 Revenue $ 17,844,621 $ 700,270 $ 1,432,259 $ 19,977,150 Operating income 438,667 43,463 39,211 521,341 Depreciation and amortization expense ( 61,545 ) ( 647 ) ( 2,879 ) ( 65,071 ) Purchases of property and equipment (1)(2) ( 24,722 ) ( 439 ) ( 1,472 ) ( 26,633 ) __________________ (1) Excludes purchases of capitalized software and application software. (2) Excludes amounts related to Concentrix prior to the Separation. The Company attributes revenues from external customers to the country from where products are delivered. Except for the United States, no other country accounted for 10% or more of the Company’s revenue for the periods presented. Except for the United States and France, no other country accounted for 10% or more of the Company’s property and equipment, net, less capitalized software and application software, for the periods presented: Fiscal Years Ended November 30, 2022 2021 2020 Revenue: United States $ 34,104,786 $ 19,923,466 $ 15,267,536 Others 28,239,024 11,690,703 4,709,614 Total $ 62,343,810 $ 31,614,169 $ 19,977,150 As of November 30, 2022 2021 Long-lived assets: United States $ 197,498 $ 199,209 France 35,142 38,933 Others 75,023 72,898 Total $ 307,663 $ 311,040 NOTE 14—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 one of the Company’s primary investors 89 Table of Contents through its affiliates. As of November 30, 2022 and 2021, MiTAC Holdings and its affiliates beneficially owned approximately 9.7 % and 9.5 % of the Company's outstanding common stock, respectively. Mr. 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 9.7 % of the Company’s outstanding common stock as of November 30, 2022. These shares are owned by the following entities: As of November 30, 2022 MiTAC Holdings (1) 5,300 Synnex Technology International Corp. (2) 3,860 Total 9,160 __________________ (1) Shares are held as follows: 302 shares by Silver Star Developments Ltd. and 2,595 shares by MiTAC International Corp., both of which are wholly owned subsidiaries of MiTAC Holdings, along with 2,403 shares held directly by MiTAC Holdings. Excludes 194 shares held directly by Mr. Miau, 217 shares indirectly held by Mr. Miau through a charitable remainder trust, and 190 shares held by his spouse. (2) Synnex Technology International Corp. (“Synnex Technology International”) is a separate entity from the Company and is a publicly-traded corporation in Taiwan. Shares are held via Peer Development Ltd., a wholly-owned subsidiary of Synnex Technology International. MiTAC Holdings directly and indirectly owns a noncontrolling interest of 14.1 % in MiTAC Incorporated, a privately-held Taiwanese company, which in turn holds a noncontrolling interest of 15.7 % in Synnex Technology International. Neither MiTAC Holdings nor Mr. Miau is affiliated with any person(s), entity, or entities that hold a majority interest in MiTAC Incorporated. The following table presents the Company's transactions with MiTAC Holdings and its affiliates for the periods indicated: Fiscal Years Ended November 30, 2022 2021 2020 Purchases of inventories and services $ 257,726 $ 199,698 $ 211,858 Sale of products to MiTAC Holdings and affiliates 1,317 623 764 Payments made for rent and overhead costs for use of facilities of MiTAC Holdings and affiliates, net 405 161 129 The following table presents the Company’s receivable from and payable to MiTAC Holdings and its affiliates for the periods presented: As of November 30, 2022 2021 Receivable from related parties (included in Accounts receivable, net) $ 1,222 $ 21,841 Payable to related parties (included in Accounts payable) 30,317 32,802 NOTE 15—EMPLOYEE BENEFITS PLANS: The Company has 401(k) plans in the United States under which eligible co-workers may contribute up to the maximum amount as provided by law. Co-workers generally 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. During fiscal years 2022, 2021 and 2020, the Company contributed $ 15.8 million, $ 6.5 million and $ 2.7 million, respectively, to these 401(k) plans. Co-workers in certain of the Company's international subsidiaries are covered by government mandated defined contribution plans, which are not material to operations. Additionally, the Company has defined benefit plans sponsored by certain international subsidiaries which are not material to its operations. 90 Table of Contents NOTE 16—LEASES: The Company leases certain of its facilities and equipment under noncancellable operating lease agreements, which expire in various periods through 2037 . The Company’s finance leases are not material. The following table presents the various components of lease costs. Fiscal Years Ended November 30, 2022 2021 2020 Operating lease cost $ 113,878 $ 48,167 $ 24,394 Short-term and variable lease cost 13,031 5,618 4,207 Sublease income ( 1,067 ) ( 223 ) ( 7 ) Total operating lease cost $ 125,842 $ 53,562 $ 28,594 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 November 30, 2022: Fiscal Years Ending November 30, 2023 $ 90,560 2024 73,020 2025 61,211 2026 50,188 2027 36,432 Thereafter 193,591 Total payments $ 505,002 Less: imputed interest* ( 82,095 ) Total present value of lease payments $ 422,907 * 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 November 30, 2022 and 2021: Operating leases Balance sheet location November 30, 2022 November 30, 2021 Operating lease ROU assets Other assets, net $ 406,165 $ 447,122 Current operating lease liabilities Other accrued liabilities 89,397 109,490 Non-current operating lease liabilities Other long-term liabilities 333,510 353,153 The following table presents s upplemental cash flow information related to the Company's operating leases for fiscal years 2022, 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 : Fiscal Years Ended November 30, Cash flow information 2022 2021 2020 Cash paid for amounts included in the measurement of lease liabilities $ 114,558 $ 29,887 $ 22,954 Non-cash ROU assets obtained in exchange for lease liabilities (subsequent to initial adoption) 72,885 34,179 25,172 The weighted-average remaining lease term and discount rate as of November 30, 2022 and 2021 were as follows: Operating lease term and discount rate 2022 2021 Weighted-average remaining lease term (years) 8.43 8.11 Weighted-average discount rate 4.07 % 4.05 % 91 Table of Contents NOTE 17—INCOME TAXES: The components of pretax income from continuing operations are as follows: Fiscal Years Ended November 30, 2022 2021 2020 United States $ 334,994 $ 246,331 $ 276,237 Foreign 492,136 220,154 159,910 $ 827,130 $ 466,485 $ 436,146 Significant components of the provision for income taxes are as follows: Fiscal Years Ended November 30, 2022 2021 2020 Current tax provision: Federal $ 88,745 $ ( 8,838 ) $ 56,355 State 35,320 13,916 19,537 Foreign 144,139 66,660 42,252 $ 268,204 $ 71,738 $ 118,144 Deferred tax provision (benefit): Federal $ ( 31,143 ) $ 13,597 $ ( 13,449 ) State ( 9,471 ) ( 675 ) ( 3,990 ) Foreign ( 51,767 ) ( 13,244 ) 904 $ ( 92,381 ) $ ( 322 ) $ ( 16,535 ) Total tax provision $ 175,823 $ 71,416 $ 101,609 The breakdown of net deferred tax assets and liabilities are as follows: As of November 30, 2022 2021 Deferred tax assets $ 46,523 $ 27,287 Deferred tax liabilities ( 942,250 ) ( 1,015,640 ) Total net deferred tax assets (liabilities) $ ( 895,727 ) $ ( 988,353 ) 92 Table of Contents The significant components of the Company’s deferred tax assets and liabilities are as follows: As of November 30, 2022 2021 Assets: Loss carryforwards $ 82,192 $ 98,472 Lease liabilities 96,236 92,803 Accrued liabilities 104,370 60,897 Foreign tax credit carryforwards 50,090 54,807 Disallowed interest expense 21,271 34,472 Allowance for doubtful accounts and sales return reserves 29,046 28,463 Capitalized inventory costs 6,541 20,527 Unrealized losses on cash flow hedges 3,820 17,668 Acquisition and transaction related costs 10,024 17,808 Share-based compensation expense 15,530 10,855 Deferred revenue 6,958 5,742 Long-lived assets 7,461 4,891 Other, net 2,385 6,303 435,924 453,708 Less: valuation allowance ( 102,891 ) ( 123,435 ) Total deferred tax assets $ 333,033 $ 330,273 Liabilities: Long-lived assets $ ( 1,112,041 ) $ ( 1,165,400 ) Lease right-of-use assets ( 96,738 ) ( 99,033 ) Deferred costs ( 8,214 ) ( 39,672 ) Capitalized marketing program costs ( 2,949 ) ( 4,977 ) Other, net ( 8,818 ) ( 9,544 ) Total deferred tax liabilities $ ( 1,228,760 ) $ ( 1,318,626 ) Net deferred tax (liability) asset $ ( 895,727 ) $ ( 988,353 ) The decrease in the Company's overall deferred tax liability position is primarily due to a reversal of a portion of the Company's deferred tax liabilities. The net change in the deferred tax valuation allowances in fiscal 2022 was a decrease of $ 20.5 million primarily resulting from fair value adjustments recorded during the measurement period related to the Merger. The valuation allowance at November 30, 2022 and November 30, 2021 primarily relates to carryforwards for foreign net operating losses and foreign tax credits in the United States. The Company considers all positive and negative evidence available in determining the potential of realizing deferred tax assets. To the extent that the Company generates consistent taxable income within those operations with valuation allowances, the Company may reduce the valuation allowances, thereby reducing income tax expense and increasing net income in the period the determination is made. The Company’s net operating loss carryforwards totaled $ 321.6 million at November 30, 2022. The majority of the net operating losses have an indefinite carryforward period with the remaining portion expiring in fiscal years 2023 through 2039. In addition, the Company has an immaterial net amount of state net operating losses. The Company’s foreign tax credit carryforwards in the United States totaled $ 50.1 million at November 30, 2022. The foreign tax credits have a ten-year carryforward period, and the majority is set to expire in fiscal year 2025 . 93 Table of Contents The reconciliation of the statutory United States federal income tax rate to the Company’s effective income tax rate is as follows: Fiscal Years Ended November 30, 2022 2021 2020 United States federal statutory income tax rate 21.0 % 21.0 % 21.0 % State income taxes, net of federal income tax benefit 1.8 2.5 2.4 Global intangible low taxed income 0.2 0.6 0.3 Tax on foreign earnings different than US federal rate ( 2.5 ) 1.6 1.7 Net changes in deferred tax valuation allowances ( 0.9 ) ( 0.4 ) — Interest not subject to tax, net 0.3 0.2 ( 1.8 ) Capital loss carryback ( 1.0 ) ( 9.6 ) — Net changes in reserves for uncertain tax positions ( 0.1 ) ( 0.7 ) — Stock compensation related to Tech Data equity awards 1.4 — — Other, net 1.1 0.1 ( 0.4 ) Effective income tax rate 21.3 % 15.3 % 23.3 % In connection with the Merger, the Company restructured its foreign financing structure, as well as select legal entities in anticipation of legally integrating legacy Tech Data and SYNNEX foreign operations. In addition to the treasury efficiencies, these restructurings resulted in a one-time domestic capital loss which would offset certain domestic capital gains when carried back under United States tax law to tax year 2020, resulting in a tax benefit of approximately $ 45.0 million during fiscal year 2021 and approximately $ 8.3 million during fiscal year 2022. The Company’s United States business has sufficient cash flow and liquidity to fund its operating requirements and the Company expects and intends that profits earned outside the United States will be fully utilized and reinvested outside of the United States. As of November 30, 2022, the Company had approximately $ 1.1 billion of undistributed earnings of its non-U.S. subsidiaries for which it has not provided for non-U.S. withholding taxes and state taxes because such earnings are intended to be reinvested indefinitely in international operations. It is not practicable to determine the amount of applicable taxes that would be due if such earnings were distributed. Accordingly, the Company has not provisioned United States state taxes and foreign withholding taxes on non-U.S. subsidiaries for which the earnings are permanently reinvested. The Company has been granted tax holidays in certain jurisdictions, primarily, China. The tax holidays provide for lower rates of taxation and require various thresholds of investment and business activities in those jurisdictions. Certain tax holidays begin to expire in fiscal year 2023 . The tax benefits from the above tax holidays for fiscal years 2022, 2021 and 2020 were not material. The estimates and assumptions used by the Company in computing the income taxes reflected in the Company’s consolidated financial statements could differ from the actual results reflected in the income tax returns filed during the subsequent year. Adjustments are recorded based on filed returns when such returns are finalized or the related adjustments are identified. 94 Table of Contents The aggregate changes in the balances of gross unrecognized tax benefits, excluding accrued interest and penalties, during fiscal years 2022, 2021 and 2020 were as follows: For the year ended November 30: 2022 2021 2020 Gross unrecognized tax benefits at beginning of period $ 26,330 $ 12,513 $ 22,445 Increases (decreases) in tax positions for prior years and acquisitions 1,069 17,579 ( 880 ) Decreases in tax positions for prior years ( 189 ) — ( 3,097 ) Increases in tax positions for current year 955 827 1,999 Expiration of statutes of limitation ( 3,074 ) ( 3,768 ) ( 7,486 ) Settlements ( 3,375 ) — — Changes due to translation of foreign currencies ( 1,021 ) ( 821 ) ( 468 ) Gross unrecognized tax benefits at end of period $ 20,695 $ 26,330 $ 12,513 As of November 30, 2022, the amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate was $ 20.7 million. Unrecognized tax benefits that have a reasonable possibility of significantly decreasing within the 12 months following November 30, 2022 would not have a material impact on the tax rate. The Company recognizes interest and penalties related to unrecognized tax benefits in the provision for income taxes. The Company’s accrued interest and penalties at November 30, 2022, would not have a material impact on the effective tax rate if reversed. The provision for income taxes for each of the fiscal years ended November 30, 2022, 2021 and 2020 includes interest expense on unrecognized income tax benefits for current and prior years which is not significant to the Company’s Consolidated Statement of Income. The change in the balance of accrued interest for fiscal 2022, 2021 and 2020, includes the current year end accrual, an interest benefit resulting from the expiration of statutes of limitation, and the translation adjustments on foreign currencies. The Company conducts business primarily in the Americas, Europe and APJ, and as a result, one or more of its subsidiaries files income tax returns in the U.S. federal, various state, local and foreign tax jurisdictions. In the normal course of business, the Company is subject to examination by taxing authorities. The Company is no longer subject to examinations by the Internal Revenue Service for years before fiscal 2019. The Company is no longer subject to foreign or state income tax audits for returns covering years through 2005, and fiscal year 2010, respectively. In preparation of the Separation, SYNNEX entered into a Tax Matters Agreement with Concentrix effective on December 1, 2020 that governs the rights and obligations of SYNNEX and Concentrix for certain pre-Separation tax liabilities. The Tax Matters Agreement provides that SYNNEX and Concentrix will share certain pre-Separation income tax liabilities that arise from adjustments made by tax authorities to SYNNEX and Concentrix’ U.S. and certain non-U.S. income tax returns. In certain jurisdictions SYNNEX and Concentrix have joint and several liability for past income tax liabilities and accordingly, SYNNEX could be legally liable under applicable tax law for such liabilities and required to make additional tax payments. In addition, if the distribution of Concentrix' common shares to the SYNNEX stockholders is determined to be taxable, Concentrix and SYNNEX would share the tax liability equally, unless the taxability of the distribution is the direct result of action taken by either Concentrix or SYNNEX subsequent to the distribution in which case the party causing the distribution to be taxable would be responsible for any taxes imposed on the distribution. NOTE 18—COMMITMENTS AND CONTINGENCIES: 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. 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. 95 Table of Contents 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 initial fine imposed on Tech Data was € 76.1 million. The Company appealed its determination to the French courts, seeking to set aside or reduce the fine. Although the Company believed it had strong arguments on appeal, the Company determined that the best estimate of probable loss related to this matter as of November 30, 2021 was € 36.0 million. 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 . Additionally, the Company provided a third-party surety bond to the Competition Authority to guarantee the payment of the amount of the fine and interest, if applicable. On October 6, 2022, the appeals court issued a ruling that reduced the fine imposed on the Company from € 76.1 million to € 24.9 million. The Company continues to contest the arguments of the Competition Authority and has further appealed this matter. As a result of the appeals court ruling, the Company has determined that the best estimate of probable loss related to this matter as of November 30, 2022 is € 24.9 million (approximately $ 25.7 million as of November 30, 2022), which has been paid in full. The Company decreased its accrual established for this matter by $ 10.8 million during fiscal year 2022 which is recorded in "Other (expense) income, net" in the Consolidated Statement of Operations . 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. Also, from time to time, the Company has been involved in various bankruptcy preference actions where the Company was a supplier to the companies now in bankruptcy. In addition, the Company is subject to various other claims, both asserted and unasserted, that arise in the ordinary course of business. The Company evaluates these claims and records the related liabilities. It is possible that the ultimate liabilities could differ from the amounts recorded. Under the Separation and Distribution agreement, SYNNEX agreed to indemnify Concentrix, each of its subsidiaries and each of their respective directors, officers and co-workers from and against all liabilities relating to, arising out of or resulting from, among other matters, the liabilities allocated to SYNNEX as part of the Separation. Similarly, Concentrix agreed to indemnify SYNNEX, each of its subsidiaries and each of their respective directors, officers and co-workers 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. 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. 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. 96 Table of Contents TD SYNNEX CORPORATION SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS For the Fiscal Years Ended November 30, 2022, 2021 and 2020 (in thousands) (Amounts may not add due to rounding) Balances at Beginning of Fiscal Year Charged to Revenue and Expense, net Additions and Measurement Period Adjustments Related to Acquisitions Reclassifications and Write-offs Balances at End of Fiscal Year Fiscal Year Ended November 30, 2020 Allowance for sales returns-gross $ 77,054 $ 17,385 $ — $ 183 $ 94,622 Allowance for deferred tax assets 6,226 ( 734 ) — — 5,492 Fiscal Year Ended November 30, 2021 Allowance for sales returns-gross $ 94,622 $ ( 12,241 ) $ 89,321 $ 167 $ 171,869 Allowance for deferred tax assets 5,492 — 120,411 ( 2,468 ) 123,435 Fiscal Year Ended November 30, 2022 Allowance for sales returns-gross $ 171,869 $ 43,127 $ — $ ( 9,172 ) $ 205,825 Allowance for deferred tax assets 123,435 ( 10,837 ) ( 19,445 ) 9,738 102,891 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.