What changed in this filing

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Item 1. Financial Statements

2023-04-05 compared with 2022-10-04 · 233 added, 354 removed, 468 unchanged (56% of the section changed)

3 unchanged sentences

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

August 31, 2022 November 30, 2021

February 28, 2023 November 30, 2022

Current assets:

23 unchanged sentences

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

Common stock, $ 0.001 par value, 200,000 shares authorized, 98,475 and 98,204 shares issued as of August 31, 2022 and November 30, 2021, respectively

Common stock, $ 0.001 par value, 200,000 shares authorized, 98,901 and 98,696 shares issued as of February 28, 2023 and November 30, 2022, respectively

Additional paid-in capital 7,400,752 7,374,100

Treasury stock, 3,511 and 2,633 shares as of August 31, 2022 and November 30, 2021, respectively

Treasury stock, 5,287 and 4,049 shares as of February 28, 2023 and November 30, 2022, respectively

( 458,698 ) ( 337,217 )

3 unchanged sentences

Total liabilities and equity $ 29,235,166 $ 29,733,998

(Amounts may not add due to rounding)

(Amounts may not add or compute due to rounding)

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

2 unchanged sentences

(currency and share amounts in thousands, except per share amounts)

Three Months Ended Nine Months Ended

August 31, 2022 August 31, 2021 August 31, 2022 August 31, 2021

Three Months Ended

February 28, 2023 February 28, 2022

Revenue $ 15,125,371 $ 15,469,977

5 unchanged sentences

Interest expense and finance charges, net ( 80,200 ) ( 42,343 )

Other (expense) income, net ( 1,852 ) 4,796 ( 12,375 ) 2,707

Other expense, net ( 156 ) ( 4,268 )

Income before income taxes 217,806 175,829

7 unchanged sentences

Diluted 94,539 95,892

(Amounts may not add due to rounding)

(Amounts may not add or compute due to rounding)

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

TD SYNNEX CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(currency in thousands)

Three Months Ended Nine Months Ended

August 31, 2022 August 31, 2021 August 31, 2022 August 31, 2021

Three Months Ended

February 28, 2023 February 28, 2022

Net income $ 167,020 $ 132,324

Other comprehensive (loss) income:

Unrealized gains on cash flow hedges during the period, net of tax (expense) benefit of ($ 2,621 ) and ($ 184 ) for the three months ended August 31, 2022 and 2021, respectively, and ($ 9,043 ) and $ 357 for the nine months ended August 31, 2022 and 2021, respectively

8,024 500 27,654 1,696

Reclassification of net losses on cash flow hedges to net income, net of tax (benefit) of ($ 1,367 ) and ($ 2,636 ) for the three months ended August 31, 2022, and 2021, respectively, and ($ 6,051 ) and ($ 7,796 ) for the nine months ended August 31, 2022 and 2021, respectively

Other comprehensive income:

Unrealized gains on cash flow hedges during the period, net of tax (expense) of ($ 289 ) and ($ 2,918 ) for the three months ended February 28, 2023 and 2022, respectively

Reclassification of net (gains) losses on cash flow hedges to net income, net of tax expense (benefit) of $ 285 and ($ 2,459 ) for the three months ended February 28, 2023 and 2022, respectively

( 854 ) 7,501

Total change in unrealized gains on cash flow hedges, net of taxes 12 16,403

Foreign currency translation adjustments, net of tax benefit (expense) of $ 22 and $ 308 for the three months ended August 31, 2022 and 2021, respectively, and ($ 84 ) and ($ 936 ) for the nine months ended August 31, 2022 and 2021, respectively

( 336,271 ) ( 20,194 ) ( 503,837 ) 8,375

Other comprehensive (loss) income ( 324,062 ) ( 11,610 ) ( 457,684 ) 33,979

Comprehensive (loss) income $ ( 175,227 ) $ 83,095 $ ( 27,608 ) $ 309,607

(Amounts may not add due to rounding)

Foreign currency translation adjustments and other, net of tax benefit (expense) of $ 1,919 and ($ 75 ) for the three months ended February 28, 2023 and 2022, respectively

Other comprehensive income 84,101 19,179

Comprehensive income $ 251,121 $ 151,503

(Amounts may not add or compute due to rounding)

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

2 unchanged sentences

(currency in thousands, except per share amounts)

Three Months Ended Nine Months Ended

August 31, 2022 August 31, 2021 August 31, 2022 August 31, 2021

Three Months Ended

February 28, 2023 February 28, 2022

Total Stockholders' equity, beginning balance $ 8,025,506 $ 7,905,975

3 unchanged sentences

Common stock issued for employee benefit plans 2,057 2,116

Purchase of noncontrolling interest 2,640 — 2,640 —

Ending balance 7,400,851 7,293,878

6 unchanged sentences

Beginning balance 1,708,234 1,171,873

Separation of Concentrix — — — ( 2,305,982 )

Net income 167,020 132,324

3 unchanged sentences

Beginning balance ( 719,710 ) ( 336,194 )

Separation of Concentrix — — — 3,813

Other comprehensive (loss) income ( 324,062 ) ( 11,610 ) ( 457,684 ) 33,979

Other comprehensive income 84,101 19,179

Ending balance ( 635,609 ) ( 317,015 )

1 unchanged sentence

Cash dividends declared per share $ 0.35 $ 0.30

(Amounts may not add due to rounding)

(Amounts may not add or compute due to rounding)

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

2 unchanged sentences

(currency in thousands)

Nine Months Ended

August 31, 2022 August 31, 2021

Three Months Ended

February 28, 2023 February 28, 2022

Cash flows from operating activities:

Net income $ 167,020 $ 132,324

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

Adjustments to reconcile net income to net cash used in operating activities:

Depreciation and amortization 104,678 155,501

2 unchanged sentences

Other 2,326 3,424

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

Changes in operating assets and liabilities:

Accounts receivable, net 187,536 ( 420,981 )

3 unchanged sentences

Other operating assets and liabilities ( 47,680 ) ( 148,081 )

Net cash (used in) provided by operating activities ( 351,793 ) 248,791

Net cash used in operating activities ( 102,795 ) ( 1,320,448 )

Cash flows from investing activities:

5 unchanged sentences

Repurchases of common stock ( 114,800 ) ( 23,757 )

Net borrowings (repayments) on revolving credit loans 81,992 ( 64,481 )

Net borrowings on revolving credit loans 303,349 930,844

Principal payments on long term debt ( 21,166 ) ( 20,400 )

1 unchanged sentence

Repurchases of common stock for tax withholdings on equity awards ( 6,681 ) ( 5,478 )

Other ( 665 ) —

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

Proceeds from issuance of Bonds — 2,500,000

Debt issuance cost — ( 26,759 )

Net cash (used in) provided by financing activities ( 159,246 ) 2,232,658

Net cash provided by financing activities 129,547 854,496

Effect of exchange rate changes on cash, cash equivalents and restricted cash 23,884 6,663

Net (decrease) increase in cash, cash equivalents and restricted cash ( 643,936 ) 2,482,057

Net increase (decrease) in cash, cash equivalents and restricted cash 16,429 ( 484,506 )

Cash, cash equivalents and restricted cash at beginning of period 522,856 994,913

Cash, cash equivalents and restricted cash at end of period $ 539,285 $ 510,407

Supplemental disclosure of non-cash financing activities:

Net assets transferred to Concentrix $ — $ 2,322,598

(Amounts may not add due to rounding)

(Amounts may not add or compute due to rounding)

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

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three and nine months ended August 31, 2022 and 2021

For the three months ended February 28, 2023 and 2022

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

1 unchanged sentence

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 51.6 million shares of Concentrix common stock to its stockholders.

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

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

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

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

The Company operates in three reportable segments based on its geographic regions:

the Americas, Europe and Asia-Pacific and Japan ("APJ").

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").

1 unchanged sentence

The combined company is referred to as TD SYNNEX.

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

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

1 unchanged sentence

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

The accompanying interim unaudited Consolidated Financial Statements as of August 31, 2022 and for the three and nine months ended August 31, 2022 and 2021 have been prepared by the Company, without audit, in accordance with the rules and regulations of the United States ("U.S.") Securities and Exchange Commission ("SEC").

The accompanying interim unaudited Consolidated Financial Statements as of February 28, 2023 and for the three months ended February 28, 2023 and 2022 have been prepared by the Company, without audit, in accordance with the rules and regulations of the United States ("U.S.") Securities and Exchange Commission ("SEC").

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

2 unchanged sentences

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

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

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three and nine months ended August 31, 2022 and 2021

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

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

NOTE 2— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

For a discussion of the Company’s significant accounting policies, refer to the discussion in the Company’s Annual Report on Form 10-K for the fiscal year ended November 30, 2022.

Accounting pronouncements adopted during the nine months ended August 31, 2022 are discussed below.

No significant new accounting pronouncements were adopted during the three months ended February 28, 2023.

Use of Estimates

1 unchanged sentence

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

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

Despite improvements in the global economy since the onset of the pandemic, resurgences of COVID-19 variants and the related impacts bring uncertainty to continued economic recovery.

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

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

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

Actual results could differ from the estimates.

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended February 28, 2023 and 2022

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

Concentration of Credit Risk

1 unchanged sentence

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.

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

Through February 28, 2023, the Company has not experienced any material credit losses on such deposits and derivative instruments.

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

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

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

1 unchanged sentence

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

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

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

Three Months Ended Nine Months Ended

August 31, 2022 August 31, 2021 August 31, 2022 August 31, 2021

Three Months Ended

February 28, 2023 February 28, 2022

_________________________

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

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three and nine months ended August 31, 2022 and 2021

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

One customer accounted for 12 % of the Company's total revenue during the three months ended August 31, 2022.

No single customer accounted for more than 10% of the Company's total revenue during the nine months ended August 31, 2022.

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

As of August 31, 2022 and November 30, 2021, no single customer comprised more than 10% of the consolidated accounts receivable balance.

One customer accounted for 11 % of the Company's total revenue during the three months ended February 28, 2023.

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

As of February 28, 2023 and November 30, 2022, no single customer comprised more than 10% of the consolidated accounts receivable balance.

Accounts Receivable

7 unchanged sentences

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

As of August 31, 2022 and November 30, 2021, accounts receivable sold to and held by the financial institutions under these programs were $ 1.35 billion and $ 759.9 million, respectively.

As of February 28, 2023 and November 30, 2022, accounts receivable sold to and held by the financial institutions under these programs were $ 1.1 billion and $ 1.4 billion, respectively.

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

Discount fees for these programs totaled $ 5.0 million and $ 11.9 million in the three and nine months ended August 31, 2022, respectively, and $ 0.6 million and $ 1.8 million in the three and nine months ended August 31, 2021, respectively.

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 projects and integration-based completed systems.

Work-in-process inventories are not material to the Consolidated Financial Statements.

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

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.

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

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

These historical patterns may not be repeated in subsequent periods.

Discount fees for these programs totaled $ 11.7 million and $ 3.0 million in the three months ended February 28, 2023 and 2022, respectively.

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three and nine months ended August 31, 2022 and 2021

For the three months ended February 28, 2023 and 2022

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

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

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

These historical patterns may not be repeated in subsequent periods.

Revenue Recognition

14 unchanged sentences

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 and extended warranty contracts.

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.

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

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

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

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

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

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

The guidance is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years (the fiscal

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three and nine months ended August 31, 2022 and 2021

For the three months ended February 28, 2023 and 2022

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

quarter ending February 28, 2023 for the Company), and should be applied prospectively to acquisitions occurring on or after the effective date.

Early adoption is permitted.

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

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 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 adopted 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 are effective upon issuance for all entities through December 31, 2022, and subject to a proposed extension to December 31, 2024.

The amendments are elective and are 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 $ 7.22 billion, comprised of $ 1.61 billion in cash ($ 1.11 billion in cash after giving effect to a $ 500 million equity contribution by Tiger Parent Holdings, L.P., Tiger Parent (AP) Corporation’s sole stockholder and an affiliate of Apollo Global Management, Inc., to Tiger Parent (AP) Corporation prior to the effective time of the Merger) and 44 million shares of common stock of SYNNEX, valued at approximately $ 5.61 billion based on the closing price of the Company’s common stock on September 1, 2021.

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

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

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

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

As of August 31, 2022, the Company has completed its evaluation of assets acquired and liabilities assumed and finalized all related estimates.

During the nine months ended August 31, 2022, the Company updated the fair values of certain assets acquired and liabilities assumed, including an increase in goodwill of $ 44 million, an increase in deferred tax liabilities of $ 38 million, a decrease in net vendor receivables of $ 21 million and an increase in inventory of $ 9 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.

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three and nine months ended August 31, 2022 and 2021

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

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 million is expected to be deductible for tax purposes.

Included within the Company’s Consolidated Statement of Operations are revenues for the nine months ended August 31, 2022, of approximately $ 28 billion from Tech Data.

As the Company began integrating certain sales and other functions after the closing of the acquisition, these amounts represent an estimate of the Tech Data revenues for the nine months ended August 31, 2022.

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

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

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three and nine months ended August 31, 2022 and 2021

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

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

Three Months Ended Nine Months Ended

August 31, 2021 August 31, 2021

Revenue $ 14,339,201 $ 45,012,301

Net income $ 111,215 $ 355,919

Adjustments reflected in the pro forma results include the following:

• Amortization of acquired intangible assets

• Interest costs associated with the Merger

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

NOTE 3— ACQUISITION, INTEGRATION AND RESTRUCTURING COSTS:

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

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, as well as severance and duplicative labor costs.

Long-lived assets charges are primarily comprised of accelerated depreciation and amortization expense of $ 57.3 million recorded during the nine months ended August 31, 2022 due to changes in asset useful lives in conjunction with the consolidation of certain IT systems, as well as impairment charges.

Personnel and other costs are primarily comprised of costs related to retention and other bonuses, severance and duplicative labor costs.

Long-lived assets charges and termination fees are comprised of accelerated depreciation and amortization expense of $ 6.2 million and $ 52.9 million recorded during the three months ended February 28, 2023 and 2022, respectively, due to changes in asset useful lives in conjunction with the consolidation of certain IT systems, as well as $ 10.2 million recorded during the three months ended February 28, 2023 for termination fees related to 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 4 - Share-Based Compensation for further information) and expenses for certain restricted stock awards issued in conjunction with the Merger.

During the three and nine months ended August 31, 2022 and August 31, 2021, acquisition and integration expenses related to the Merger were composed of the following:

Three Months Ended Nine Months Ended

August 31, 2022 August 31, 2021 August 31, 2022 August 31, 2021

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended February 28, 2023 and 2022

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

During the three months ended February 28, 2023 and 2022, acquisition and integration expenses related to the Merger were composed of the following:

Three Months Ended

February 28, 2023 February 28, 2022

Professional services costs $ 6,810 $ 8,148

Personnel and other costs 13,007 10,944

Long-lived assets charges 8,693 — 61,564 —

Long-lived assets charges and termination fees 16,376 52,871

Stock-based compensation 11,521 13,576

4 unchanged sentences

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

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three and nine months ended August 31, 2022 and 2021

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

associated exit costs, including certain consulting costs.

Restructuring costs are comprised of severance costs and other 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 included the following:

Three Months Ended Nine Months Ended

August 31, 2022 August 31, 2022

Restructuring costs $ 4,654 $ 15,438

Other costs 1,947 8,386

Total $ 6,601 $ 23,824

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

Three Months Ended Nine Months Ended

August 31, 2022 August 31, 2022

Severance $ 2,099 $ 3,200

Other exit costs 2,555 12,238

Total $ 4,654 $ 15,438

Restructuring costs related to the GBO 2 Program by segment are as follows:

Three Months Ended Nine Months Ended

August 31, 2022 August 31, 2022

Americas $ 1,354 $ 4,776

Europe 3,248 10,193

Total 4,654 $ 15,438

Restructuring activity during the nine months ended August 31, 2022 related to the GBO 2 Program is as follows:

Severance and Benefits Other Exit Costs Total

Accrued balance as of November 30, 2021

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

Expenses 3,200 12,238 15,438

Cash payments ( 4,956 ) ( 12,898 ) ( 17,854 )

Foreign currency translation ( 29 ) ( 429 ) ( 458 )

Accrued balance as of August 31, 2022

$ 3,133 $ 502 $ 3,635

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three and nine months ended August 31, 2022 and 2021

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

The Company incurred acquisition, integration and restructuring costs under the GBO 2 Program of $ 3.5 million and $ 7.8 million during the three months ended February 28, 2023 and 2022, respectively.

The Company does not expect to incur material costs under the GBO 2 Program in future periods.

Cash payments related to restructuring costs and accrued restructuring balances related to the GBO 2 Program are not material as of February 28, 2023.

NOTE 4— SHARE-BASED COMPENSATION:

Overview of TD SYNNEX Stock Incentive Plans

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

The following tables summarize the Company's share-based awards activity for TD SYNNEX stock incentive plans during the nine months ended August 31, 2022.

The following tables summarize the Company's share-based awards activity for TD SYNNEX stock incentive plans during the three months ended February 28, 2023.

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

2 unchanged sentences

Exercised ( 26 )

Balances, August 31, 2022

Balances, February 28, 2023

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended February 28, 2023 and 2022

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

A summary of the changes in the Company's non-vested RSAs and RSUs is presented below:

3 unchanged sentences

Canceled ( 43 )

Nonvested at August 31, 2022

Nonvested at February 28, 2023

A summary of share-based compensation expense in the Consolidated Statements of Operations for TD SYNNEX stock incentive plans is presented below:

Three Months Ended Nine Months Ended

August 31, 2022 August 31, 2021 August 31, 2022 August 31, 2021

Three Months Ended

February 28, 2023 February 28, 2022

Selling, general and administrative expenses $ 13,074 $ 6,750

4 unchanged sentences

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

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three and nine months ended August 31, 2022 and 2021

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

The following table summarizes the activity related to these restricted shares during the nine months ended August 31, 2022:

The following table summarizes the activity related to these restricted shares during the three months ended February 28, 2023:

Restricted shares

Nonvested at November 30, 2022

Vested ( 12 )

Canceled ( 30 )

Nonvested at August 31, 2022

Nonvested at February 28, 2023

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 Statement of Operations.

The Company recorded $ 11.4 million and $ 34.5 million of share-based compensation expense related to these restricted shares in “Acquisition, integration, and restructuring costs” during the three and nine months ended August 31, 2022, respectively.

As of August 31, 2022, there was $ 45.5 million of total unamortized share-based compensation expense related to these restricted shares to be recognized over a weighted-average amortization period of 1 year.

An additional 357 shares vested on September 1, 2022, one year after the date of the Merger.

The Company recorded $ 10.0 million and $ 11.7 million of share-based compensation expense related to these restricted shares in “Acquisition, integration, and restructuring costs” during the three months ended February 28, 2023 and 2022, respectively.

As of February 28, 2023, there was $ 19.8 million of total unamortized share-based compensation expense related to these restricted shares to be recognized over a weighted-average amortization period of 0.5 years.

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended February 28, 2023 and 2022

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

NOTE 5— BALANCE SHEET COMPONENTS:

1 unchanged sentence

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

August 31, 2022 November 30, 2021

February 28, 2023 November 30, 2022

Cash and cash equivalents $ 539,285 $ 522,604

2 unchanged sentences

Accounts receivable, net:

August 31, 2022 November 30, 2021

February 28, 2023 November 30, 2022

Accounts receivable $ 9,493,317 $ 9,550,741

2 unchanged sentences

Receivables from vendors, net:

August 31, 2022 November 30, 2021

February 28, 2023 November 30, 2022

Receivables from vendors $ 991,783 $ 831,539

1 unchanged sentence

Receivables from vendors, net $ 974,720 $ 819,135

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three and nine months ended August 31, 2022 and 2021

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

Allowance for doubtful trade receivables:

1 unchanged sentence

Additions 5,898

Write-offs, reclassifications and foreign exchange translation ( 17,522 )

Balance at August 31, 2022

Write-offs, recoveries, reclassifications and foreign exchange translation 618

Balance at February 28, 2023

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended February 28, 2023 and 2022

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

Allowance for doubtful receivables from vendors:

2 unchanged sentences

Write-offs, reclassifications and foreign exchange translation ( 259 )

Balance at August 31, 2022

Balance at February 28, 2023

Accumulated other comprehensive loss:

7 unchanged sentences

$ 6,169 $ ( 725,879 ) $ ( 719,710 )

Other comprehensive income (loss) before reclassification 27,654 ( 503,837 ) ( 476,183 )

Other comprehensive income before reclassification 866 84,089 84,955

Reclassification of losses from accumulated other comprehensive loss ( 854 ) — ( 854 )

Balance as of August 31, 2022

Balance as of February 28, 2023

$ 6,181 $ ( 641,790 ) $ ( 635,609 )

2 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three and nine months ended August 31, 2022 and 2021

For the three months ended February 28, 2023 and 2022

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

17 unchanged sentences

Any subsequent changes in fair value of such derivative instruments are recorded in earnings unless they are re-designated as hedges of other 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.

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 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.

Gains and losses on the net investment hedges have been recorded in AOCI and will remain in AOCI until the sale or substantial liquidation of the underlying assets of the Company's investment.

The initial fair value of hedge components excluded from the assessment of effectiveness is being recognized in the Consolidated Statements of Operations under a systematic and rational method over the life of the hedging instrument.

The Company classifies cash flows related to the settlement of its net investment hedges as investing activities in the Consolidated Statements of Cash Flows.

Non-Designated Derivatives

4 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three and nine months ended August 31, 2022 and 2021

For the three months ended February 28, 2023 and 2022

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

1 unchanged sentence

The fair values of the Company’s derivative instruments are disclosed in Note 7 - Fair Value Measurements and summarized in the table below:

Balance Sheet Line Item August 31, 2022 November 30, 2021

Balance Sheet Line Item February 28, 2023 November 30, 2022

Derivative instruments not designated as hedging instruments:

5 unchanged sentences

Other current assets 14,935 17,222

Other assets, net 1,157 —

Derivative instruments designated as net investment hedges:

Foreign currency forward contracts (notional value) $ 520,000 $ 523,750

Other accrued liabilities 392 255

1 unchanged sentence

The Company terminated interest rate swaps with a notional value of $ 400.0 million in December 2021.

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

Cumulative losses on the terminated interest rate swaps of $ 16.0 million are being reclassified from AOCI to “Interest expense and finance charges, net” over the period through September 2023 .

Volume of Activity

4 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three and nine months ended August 31, 2022 and 2021

For the three months ended February 28, 2023 and 2022

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

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

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

Three Months Ended Nine Months Ended

Location of Gains (Losses) in Income August 31, 2022 August 31, 2021 August 31, 2022 August 31, 2021

Derivative instruments designated as cash flow hedges:

Gains recognized in OCI on interest rate swaps $ 10,645 $ 684 $ 36,696 $ 1,339

Losses on interest rate swaps reclassified from AOCI into income Interest expense and finance charges, net $ ( 5,552 ) $ ( 10,721 ) $ ( 24,550 ) $ ( 31,704 )

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:

Three Months Ended

Location of Gains (Losses) in Income February 28, 2023 February 28, 2022

Derivative instruments not designated as hedging instruments:

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

Losses recognized from foreign exchange forward contracts, net (1)

Cost of revenue $ ( 16,901 ) $ ( 9,893 )

(Losses) gains recognized from foreign exchange forward contracts, net (1)

Other (expense) income, net ( 3,285 ) 1,782 $ ( 4,444 ) $ ( 7,347 )

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

Losses recognized from foreign exchange forward contracts, net (1)

Other expense, net ( 2,563 ) ( 210 )

Total $ ( 19,464 ) $ ( 10,103 )

Derivative instruments designated as cash flow hedges:

Gains recognized in OCI on interest rate swaps $ 1,154 $ 11,820

Gains (losses) on interest rate swaps reclassified from AOCI into income Interest expense and finance charges, net $ 1,138 $ ( 9,960 )

Derivative instruments designated as net investment hedges:

Losses recognized in OCI on foreign exchange forward contracts (2)

$ ( 8,025 ) $ —

Gains recognized in income (amount excluded from effectiveness testing) (2)

Interest expense and finance charges, net $ 2,278 $ —

____________________________

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

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

Existing net losses in AOCI that are expected to be reclassified into earnings in the normal course of business within the next twelve months are $ 2 million.

(2) The Company had no net investment hedges outstanding during the three months ended February 28, 2022.

Except for the net investment hedge amount for fiscal 2023 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 $ 9.8 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.

On September 20, 2022, the Company entered into foreign currency forward contracts with an aggregate notional value of $ 524 million 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 investment hedges to offset the risk of change in the U.S.

dollar value of the Company's investments in Euro functional subsidiaries due to fluctuating foreign exchange rates.

Beginning in the fourth quarter of fiscal year 2022, the gains and losses on net investment hedges will be recorded in other comprehensive income (loss) 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 will be recognized in the Consolidated Statement of Operations under a systematic and rational method over the life of the hedging instrument.

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three and nine months ended August 31, 2022 and 2021

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

NOTE 7— FAIR VALUE MEASUREMENTS:

2 unchanged sentences

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;

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended February 28, 2023 and 2022

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

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 August 31, 2022

As of February 28, 2023

As of November 30, 2022

1 unchanged sentence

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

Forward foreign currency exchange contracts $ 21,910 $ — $ 21,910 $ — $ 13,764 $ — $ 13,764 $ —

Interest rate swaps 7,847 — 7,847 — — — — —

Forward foreign currency exchange contracts $ 10,715 $ — $ 10,715 $ — $ 2,992 $ — $ 2,992 $ —

Forward foreign currency exchange contracts not designated as hedges $ 14,152 $ — $ 14,152 $ — $ 9,597 $ — $ 9,597 $ —

Interest rate swaps 14,935 — 14,935 — 17,222 — 17,222 —

Forward foreign currency exchange contracts not designated as hedges $ 6,907 $ — $ 6,907 $ — $ 16,085 $ — $ 16,085 $ —

Forward foreign currency exchange contracts designated as net investment hedges — — 22,166 — 16,675 — 16,675 —

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

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

The effect of nonperformance risk on the fair value of derivative instruments was not material as of August 31, 2022 and November 30, 2021.

The effect of nonperformance risk on the fair value of derivative instruments was not material as of February 28, 2023 and November 30, 2022.

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 $ 2.16 billion and $ 2.45 billion at August 31, 2022 and November 30, 2021, respectively.

During the nine months ended August 31, 2022, there were no transfers between the fair value measurement category levels.

The estimated fair value of the Senior Notes was approximately $ 2.1 billion at February 28, 2023 and November 30, 2022.

During the three months ended February 28, 2023, there were no transfers between the fair value measurement category levels.

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three and nine months ended August 31, 2022 and 2021

For the three months ended February 28, 2023 and 2022

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

1 unchanged sentence

Borrowings consist of the following:

August 31, 2022 November 30, 2021

February 28, 2023 November 30, 2022

TD SYNNEX U.S.

Accounts Receivable Securitization Agreement

$ 110,000 $ —

Committed and uncommitted revolving credit facilities and borrowings 387,771 193,128

15 unchanged sentences

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 SOFR.

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.

2 unchanged sentences

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

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

Such receivables, which are recorded in the Consolidated Balance Sheet, totaled approximately $ 2.9 billion as of August 31, 2022.

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 $ 2.6 billion and $ 2.9 billion as of February 28, 2023 and November 30, 2022, respectively.

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

1 unchanged sentence

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

There was $ 110.0 million outstanding under the U.S.

AR Arrangement at February 28, 2023 at an interest rate of 5.51 %.

There were no amounts outstanding under the U.S.

AR Arrangement at August 31, 2022 or November 30, 2021.

TD SYNNEX Credit Agreement

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

There were no amounts outstanding under the TD SYNNEX revolving credit facility at August 31, 2022 or November 30, 2021.

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

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

There are no guarantors of the TD SYNNEX credit facilities.

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

AR Arrangement at November 30, 2022.

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three and nine months ended August 31, 2022 and 2021

For the three months ended February 28, 2023 and 2022

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

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

TD SYNNEX Credit Agreement

There were no amounts outstanding under the TD SYNNEX revolving credit facility at February 28, 2023 or November 30, 2022.

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 original 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 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.

2 unchanged sentences

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

The effective interest rate for the TD SYNNEX term loan was 3.91 % and 1.49 % as of August 31, 2022 and November 30, 2021, respectively.

The effective interest rate for the TD SYNNEX term loan was 6.02 % and 5.46 % as of February 28, 2023 and November 30, 2022, 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 6 - 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 which require compliance with a maximum debt to EBITDA ratio and a minimum interest coverage ratio, in each case tested on the last day of each fiscal quarter commencing with the first full fiscal quarter to occur after the closing date of the TD SYNNEX credit facilities.

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

3 unchanged sentences

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

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

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended February 28, 2023 and 2022

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

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).

4 unchanged sentences

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

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three and nine months ended August 31, 2022 and 2021

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

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 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 $ 585.0 million as of August 31, 2022.

The Company has various other committed and uncommitted lines of credit with financial institutions, finance leases, short-term loans, term loans, credit facilities and book overdraft facilities, totaling approximately $ 600.1 million in borrowing capacity as of February 28, 2023.

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 $ 177.2 million outstanding on these facilities at August 31, 2022, at a weighted average interest rate of 6.42 %, and there was $ 106.3 million outstanding at November 30, 2021, at a weighted average interest rate of 4.59 %.

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

At August 31, 2022, the Company was also contingently liable for reimbursement obligations with respect to issued standby letters of credit in the aggregate outstanding amount of $ 86.6 million.

There was $ 387.8 million outstanding on these facilities at February 28, 2023, at a weighted average interest rate of 4.88 %, and there was $ 193.1 million outstanding at November 30, 2022, at a weighted average interest rate of 4.69 %.

Borrowings under certain of these lines of credit facilities are guaranteed by the Company.

At February 28, 2023, the Company was also contingently liable for reimbursement obligations with respect to issued standby letters of credit in the aggregate outstanding amount of $ 84.1 million.

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

The maximum commitment amounts for local currency credit facilities have been translated into United States Dollars at August 31, 2022 exchange rates.

The maximum commitment amounts for local currency credit facilities have been translated into United States Dollars at February 28, 2023 exchange rates.

Covenant Compliance

1 unchanged sentence

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 August 31, 2022, the Company was in compliance with the financial covenant requirements for the above arrangements.

As of February 28, 2023, the Company was in compliance with the financial covenant requirements for the above arrangements.

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three and nine months ended August 31, 2022 and 2021

For the three months ended February 28, 2023 and 2022

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

1 unchanged sentence

The following table sets forth the computation of basic and diluted earnings per common share for the periods indicated:

Three Months Ended Nine Months Ended

August 31, 2022 August 31, 2021 August 31, 2022 August 31, 2021

Three Months Ended

February 28, 2023 February 28, 2022

Basic earnings per common share:

15 unchanged sentences

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

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three and nine months ended August 31, 2022 and 2021

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

NOTE 10— SEGMENT INFORMATION:

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

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

Americas Europe APJ Consolidated

Three Months Ended August 31, 2022

Revenue $ 9,900,779 $ 4,681,797 $ 773,509 $ 15,356,085

Operating income 180,471 44,260 16,803 241,534

Three Months Ended August 31, 2021

Revenue $ 4,609,909 $ 252,478 $ 344,677 $ 5,207,064

Operating income 132,053 10,171 5,980 148,204

Nine Months Ended August 31, 2022

Three Months Ended February 28, 2023

Revenue $ 8,638,704 $ 5,520,437 $ 966,230 $ 15,125,371

Operating income 179,505 88,205 30,452 298,162

Nine Months Ended August 31, 2021

Three Months Ended February 28, 2022

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

Operating income 138,519 65,332 18,589 222,440

Americas Europe APJ Consolidated

August 31, 2022 $ 17,483,227 $ 9,938,152 $ 1,670,689 $ 29,092,068

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

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three and nine months ended August 31, 2022 and 2021

For the three months ended February 28, 2023 and 2022

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

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

As of August 31, 2022 and November 30, 2021, MiTAC Holdings and its affiliates beneficially owned approximately 9.6 % and 9.5 % of the Company’s outstanding common stock, respectively.

As of February 28, 2023 and November 30, 2022, MiTAC Holdings and its affiliates beneficially owned approximately 9.8 % and 9.7 % of the Company’s outstanding common stock, respectively.

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 9.6 % of the Company’s outstanding common stock as of August 31, 2022.

As noted above, MiTAC Holdings and its affiliates in the aggregate beneficially owned approximately 9.8 % of the Company’s outstanding common stock as of February 28, 2023.

These shares are owned by the following entities:

As of August 31, 2022

As of February 28, 2023

MiTAC Holdings (1)

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_________________________

(1) Shares are held via Silver Star Developments Ltd., a wholly-owned subsidiary of MiTAC Holdings.

(1) Shares are held as follows:

302 shares by Silver Star Developments Ltd.

and 2,595 shares by MiTAC International Corp., both are 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.

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

Three Months Ended Nine Months Ended

August 31, 2022 August 31, 2021 August 31, 2022 August 31, 2021

Three Months Ended

February 28, 2023 February 28, 2022

Purchases of inventories and services $ 40,443 $ 46,576

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

August 31, 2022 November 30, 2021

February 28, 2023 November 30, 2022

Receivable from related parties (included in Accounts receivable, net) $ 4,006 $ 1,222

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three and nine months ended August 31, 2022 and 2021

For the three months ended February 28, 2023 and 2022

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

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Share Repurchase Program

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

As of August 31, 2022, the Company had $ 317.0 million available for future repurchases of its common stock under the authorized share repurchase program.

The Company's common share repurchase activity for the nine months ended August 31, 2022 is summarized as follows:

In June 2020, the Board of Directors authorized a three-year $ 400.0 million share repurchase program, effective July 1, 2020.

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.

On January 30, 2023, the Company announced the closing of a secondary public offering (the "Offering") of an aggregate of 5.2 million shares of its common stock that were sold by certain entities managed by affiliates of Apollo Global Management, Inc (the "Selling Stockholders").

All the shares in the Offering were sold by the Selling Stockholders.

The Company did not receive any of the proceeds from the sale of shares by the Selling Stockholders in the Offering.

Also pursuant to the related underwriting agreement, the Company repurchased 0.9 million shares of its common stock from the underwriters as part of the Offering, at the public offering price of $ 97.00 per share, resulting in a purchase price of $ 87.3 million (the "Concurrent Share Repurchase").

The Concurrent Share Repurchase was made under the Company's existing $ 1.0 billion share repurchase program, and is included within the caption "Shares of treasury stock purchased under share repurchase program" in the table below.

As of February 28, 2023, the Company had $ 901.7 million available for future repurchases of its common stock under the authorized share repurchase program.

The Company's common share repurchase activity for the three months ended February 28, 2023 is summarized as follows:

Shares Weighted-average price per share

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Shares of treasury stock repurchased for tax withholdings on equity awards 62 106.53

Treasury stock balance at August 31, 2022

Treasury stock balance at February 28, 2023

5,287 $ 86.76

On September 27, 2022 , the Company announced that its Board of Directors declared a quarterly cash dividend of $ 0.30 per common share payable on October 28, 2022 to stockholders of record as of the close of business on October 14, 2022 .

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

On March 28, 2023 , the Company announced that its Board of Directors declared a quarterly cash dividend of $ 0.35 per common share payable on April 28, 2023 to stockholders of record as of the close of business on April 14, 2023 .

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

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended February 28, 2023 and 2022

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

NOTE 13— COMMITMENTS AND CONTINGENCIES:

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

The fine imposed on Tech Data was € 76 million (approximate ly $ 76 million as o f August 31, 2022).

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

Although the Company believes it has strong arguments on appeal, the Company has determined that the best estimate of probable loss related to this matter as of August 31, 2022 is € 36 million (approximately $ 36 million as of August 31, 2022).

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

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

As of August 31, 2022, the Company has an accrued liability for this matter of € 16.0 million ($ 16.0 million as of August 31, 2022) that represents the total estimate of probable loss less installment payments made to date.

If the appeal

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three and nine months ended August 31, 2022 and 2021

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

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

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

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

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.

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.

As a result of the appeals court ruling, the Company determined that the best estimate of probable loss related to this matter is € 24.9 million (approximately $ 26.4 million as of February 28, 2023), which has been paid in full.

The Company continues to contest the arguments of the Competition Authority and has further appealed this matter.

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.

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It is possible that the ultimate liabilities could differ from the amounts recorded.

Under the Separation and Distribution agreement with Concentrix that was entered into in connection with the Separation, SYNNEX agreed to indemnify Concentrix, each of its subsidiaries and each of their respective directors, officers and employees from and against all liabilities relating to, arising out of or resulting from, among other matters, the liabilities allocated to SYNNEX as part of the Separation.

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

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended February 28, 2023 and 2022

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

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

2 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements