What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-07-06 compared with 2023-04-05 · 169 added, 153 removed, 548 unchanged (37% of the section changed)

3 unchanged sentences

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

February 28, 2023 November 30, 2022

May 31, 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, 98,901 and 98,696 shares issued as of February 28, 2023 and November 30, 2022, respectively

Common stock, $ 0.001 par value, 200,000 shares authorized, 98,991 and 98,696 shares issued as of May 31, 2023 and November 30, 2022, respectively

Additional paid-in capital 7,422,716 7,374,100

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

Treasury stock, 5,963 and 4,049 shares as of May 31, 2023 and November 30, 2022, respectively

( 521,157 ) ( 337,217 )

8 unchanged sentences

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

Three Months Ended

February 28, 2023 February 28, 2022

Three Months Ended Six Months Ended

May 31, 2023 May 31, 2022 May 31, 2023 May 31, 2022

Revenue $ 14,062,124 $ 15,269,791 $ 29,187,495 $ 30,739,768

18 unchanged sentences

TD SYNNEX CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(currency in thousands)

Three Months Ended

February 28, 2023 February 28, 2022

Three Months Ended Six Months Ended

May 31, 2023 May 31, 2022 May 31, 2023 May 31, 2022

Net income $ 133,087 $ 148,917 $ 300,107 $ 281,241

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

Other comprehensive income (loss):

Unrealized (losses) gains on cash flow hedges during the period, net of tax benefit (expense) of $ 53 and ($ 3,504 ) for the three months ended May 31, 2023 and 2022, respectively, and ($ 235 ) and ($ 6,422 ) for the six months ended May 31, 2023 and 2022, respectively

( 164 ) 10,728 702 19,630

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

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

Reclassification of net (gains) losses on cash flow hedges to net income, net of tax expense (benefit) of $ 602 and ($ 2,225 ) for the three months ended May 31, 2023 and 2022, respectively, and $ 886 and ($ 4,684 ) for the six months ended May 31, 2023 and 2022, respectively

( 1,843 ) 6,813 ( 2,697 ) 14,314

Total change in unrealized (losses) gains on cash flow hedges, net of taxes ( 2,007 ) 17,541 ( 1,995 ) 33,944

Foreign currency translation adjustments and other, net of tax benefit (expense) of $ 1,629 and ($ 31 ) for the three months ended May 31, 2023 and 2022, respectively, and $ 3,548 and ($ 106 ) for the six months ended May 31, 2023 and 2022, respectively

62,610 ( 170,342 ) 146,699 ( 167,566 )

Other comprehensive income (loss) 60,603 ( 152,801 ) 144,704 ( 133,622 )

Comprehensive income (loss) $ 193,690 $ ( 3,884 ) $ 444,811 $ 147,619

(Amounts may not add or compute due to rounding)

3 unchanged sentences

(currency in thousands, except per share amounts)

Three Months Ended

February 28, 2023 February 28, 2022

Three Months Ended Six Months Ended

May 31, 2023 May 31, 2022 May 31, 2023 May 31, 2022

Total Stockholders' equity, beginning balance $ 8,148,586 $ 8,021,857 $ 8,025,506 $ 7,905,975

16 unchanged sentences

Beginning balance ( 635,609 ) ( 317,015 ) ( 719,710 ) ( 336,194 )

Other comprehensive income 84,101 19,179

Other comprehensive income (loss) 60,603 ( 152,801 ) 144,704 ( 133,622 )

Ending balance ( 575,006 ) ( 469,816 ) ( 575,006 ) ( 469,816 )

6 unchanged sentences

(currency in thousands)

Three Months Ended

February 28, 2023 February 28, 2022

Six Months Ended

May 31, 2023 May 31, 2022

Cash flows from operating activities:

Net income $ 300,107 $ 281,241

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

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

Depreciation and amortization 209,632 255,126

8 unchanged sentences

Other operating assets and liabilities ( 296,768 ) ( 56,147 )

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

Net cash provided by (used in) operating activities 604,750 ( 284,482 )

Cash flows from investing activities:

9 unchanged sentences

Repurchases of common stock for tax withholdings on equity awards ( 7,765 ) ( 5,881 )

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

Net cash used in financing activities ( 247,087 ) ( 129,950 )

Effect of exchange rate changes on cash, cash equivalents and restricted cash 36,098 ( 12,082 )

6 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended February 28, 2023 and 2022

For the three and six months ended May 31, 2023 and 2022

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

9 unchanged sentences

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

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").

The accompanying interim unaudited Consolidated Financial Statements as of May 31, 2023 and for the three and six months ended May 31, 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.

5 unchanged sentences

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.

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

No significant new accounting pronouncements were adopted during the six months ended May 31, 2023.

Use of Estimates

4 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended February 28, 2023 and 2022

For the three and six months ended May 31, 2023 and 2022

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

2 unchanged sentences

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

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

Through May 31, 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.

4 unchanged sentences

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

Three Months Ended

February 28, 2023 February 28, 2022

Three Months Ended Six Months Ended

May 31, 2023 May 31, 2022 May 31, 2023 May 31, 2022

10 % 10 % 11 %

Cisco Systems, Inc.

10 % N/A ( 1 )

10 % 11 % N/A ( 1 )

10 % N/A ( 1 )

_________________________

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

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.

One customer accounted for 12 % and 11 % of the Company's total revenue during the three and six months ended May 31, 2023, respectively.

No single customer accounted for more than 10% of the Company's total revenue during the three and six months ended May 31, 2022.

As of May 31, 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 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.

As of May 31, 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 $ 11.7 million and $ 3.0 million in the three months ended February 28, 2023 and 2022, respectively.

Discount fees for these programs totaled $ 12.0 million and $ 23.7 million in the three and six months ended May 31, 2023, respectively, and $ 3.9 million and $ 6.9 million in the three and six months ended May 31, 2022, respectively.

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended February 28, 2023 and 2022

For the three and six months ended May 31, 2023 and 2022

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

23 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended February 28, 2023 and 2022

For the three and six months ended May 31, 2023 and 2022

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

8 unchanged sentences

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.

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 its disclosures in the notes to the consolidated financial statements.

The Company is evaluating the terms of its arrangements with certain of its suppliers and currently estimates that approximately $ 2 billion to $ 3 billion of balances included in "Accounts payable" on the Consolidated Balance Sheet may be within the scope of the standard.

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.

1 unchanged sentence

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.

On May 22, 2023, the TD SYNNEX Credit Agreement (as defined below) was amended to replace LIBOR with the Secured Overnight Financing Rate ("SOFR") as its benchmark rate (see Note 8 - Borrowings for further discussion of the TD SYNNEX Credit Agreement).

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

4 unchanged sentences

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.

Long-lived assets charges and termination fees are comprised of accelerated depreciation and amortization expense of $ 5.3 million and $ 11.5 million recorded during the three and six months ended May 31, 2023, respectively, and $ 52.9 million recorded during the six months ended May 31, 2022 due to changes in asset useful lives in conjunction with the consolidation of certain IT systems, as well as $ 2.3 million and $ 12.5 million recorded during the three and six months ended May 31, 2023 for termination fees related to certain IT systems.

There were no long-lived assets charges and termination fees recorded during the three months ended May 31, 2022.

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.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended February 28, 2023 and 2022

For the three and six months ended May 31, 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

During the three and six months ended May 31, 2023 and 2022, acquisition and integration expenses related to the Merger were composed of the following:

Three Months Ended Six Months Ended

May 31, 2023 May 31, 2022 May 31, 2023 May 31, 2022

Professional services costs $ 4,311 $ 5,793 $ 11,121 $ 13,941

9 unchanged sentences

Other costs are primarily comprised of personnel costs, facilities costs and certain professional services fees not related to restructuring activities.

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 incurred acquisition, integration and restructuring costs under the GBO 2 Program of $ 2.6 million and $ 6.1 million during the three and six months ended May 31, 2023, respectively, and $ 9.4 million and $ 17.2 million during the three and six months ended May 31, 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.

Cash payments related to restructuring costs and accrued restructuring balances related to the GBO 2 Program are not material as of May 31, 2023.

NOTE 4— SHARE-BASED COMPENSATION:

1 unchanged sentence

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 purchase rights, based on estimated fair values.

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.

The following tables summarize the Company's share-based awards activity for TD SYNNEX stock incentive plans during the six months ended May 31, 2023.

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

2 unchanged sentences

Exercised ( 62 )

Balances, February 28, 2023

Balances, May 31, 2023

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended February 28, 2023 and 2022

For the three and six months ended May 31, 2023 and 2022

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

4 unchanged sentences

Canceled ( 62 )

Nonvested at February 28, 2023

Nonvested at May 31, 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

February 28, 2023 February 28, 2022

Three Months Ended Six Months Ended

May 31, 2023 May 31, 2022 May 31, 2023 May 31, 2022

Selling, general and administrative expenses $ 7,648 $ 7,038 $ 20,722 $ 13,788

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 .

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

The following table summarizes the activity related to these restricted shares during the six months ended May 31, 2023:

Restricted shares

2 unchanged sentences

Canceled ( 34 )

Nonvested at February 28, 2023

Nonvested at May 31, 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 $ 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.

The Company recorded $ 9.5 million and $ 19.6 million of share-based compensation expense related to these restricted shares in “Acquisition, integration, and restructuring costs” during the three and six months ended May 31, 2023, respectively, and $ 11.3 million and $ 23.0 million during the three and six months ended May 31, 2022, respectively.

As of May 31, 2023, there was $ 9.6 million of total unamortized share-based compensation expense related to these restricted shares to be recognized over a weighted-average amortization period of 0.25 years.

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended February 28, 2023 and 2022

For the three and six months ended May 31, 2023 and 2022

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

2 unchanged sentences

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:

February 28, 2023 November 30, 2022

May 31, 2023 November 30, 2022

Cash and cash equivalents $ 852,079 $ 522,604

2 unchanged sentences

Accounts receivable, net:

February 28, 2023 November 30, 2022

May 31, 2023 November 30, 2022

Accounts receivable $ 8,511,937 $ 9,550,741

2 unchanged sentences

Receivables from vendors, net:

February 28, 2023 November 30, 2022

May 31, 2023 November 30, 2022

Receivables from vendors $ 1,001,608 $ 831,539

5 unchanged sentences

Write-offs, recoveries, reclassifications and foreign exchange translation ( 13,737 )

Balance at February 28, 2023

Balance at May 31, 2023

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended February 28, 2023 and 2022

For the three and six months ended May 31, 2023 and 2022

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

2 unchanged sentences

Additions 5,897

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

Balance at February 28, 2023

Write-offs, recoveries, reclassifications and foreign exchange translation ( 326 )

Balance at May 31, 2023

Accumulated other comprehensive loss:

8 unchanged sentences

Other comprehensive income before reclassification 702 146,699 147,401

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

Balance as of February 28, 2023

Reclassification of gains from accumulated other comprehensive loss ( 2,697 ) — ( 2,697 )

Balance as of May 31, 2023

$ 4,174 $ ( 579,180 ) $ ( 575,006 )

2 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended February 28, 2023 and 2022

For the three and six months ended May 31, 2023 and 2022

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

11 unchanged sentences

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 .

Gains and losses on cash flow hedges are recorded in AOCI until the hedged item is recognized in earnings.

4 unchanged sentences

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

The Company terminated its remaining interest rate swaps in May 2023 and had no interest rate swaps designated as cash flow hedges outstanding as of May 31, 2023.

Net Investment Hedges

11 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended February 28, 2023 and 2022

For the three and six months ended May 31, 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 February 28, 2023 November 30, 2022

Balance Sheet Line Item May 31, 2023 November 30, 2022

Derivative instruments not designated as hedging instruments:

9 unchanged sentences

Other long-term liabilities 26,038 16,420

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 $ 16.0 million are being reclassified from AOCI to “Interest expense and finance charges, net” over the period through September 2023 .

The Company terminated interest rate swaps with a notional value of $ 400.0 million in December 2021 ("the December 2021 Terminations").

Cumulative losses from the December 2021 Terminations totaled $ 16.0 million and are being reclassified from AOCI to “Interest expense and finance charges, net” over the period through September 2023.

The Company terminated the remaining interest rate swaps with a notional value of $ 1.0 billion in May 2023 (the "May 2023 Terminations").

Cumulative gains from the May 2023 Terminations totaled $ 10.0 million and are being reclassified from AOCI to "Interest expense and finance charges, net" over the period through October 2023.

Volume of Activity

4 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended February 28, 2023 and 2022

For the three and six months ended May 31, 2023 and 2022

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

1 unchanged sentence

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

Three Months Ended Six Months Ended

Location of Gains (Losses) in Income May 31, 2023 May 31, 2022 May 31, 2023 May 31, 2022

Derivative instruments not designated as hedging instruments:

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

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

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

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

(Losses) gains recognized from foreign exchange contracts, net⁽¹⁾ Cost of revenue $ ( 7,611 ) $ 14,013 $ ( 24,512 ) $ 4,118

Losses recognized from foreign exchange contracts, net⁽¹⁾ Other expense, net ( 2,662 ) ( 949 ) ( 5,225 ) ( 1,159 )

Total $ ( 10,273 ) $ 13,064 $ ( 29,737 ) $ 2,959

Derivative instruments designated as cash flow hedges:

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

(Losses) gains recognized in OCI on interest rate swaps $ ( 217 ) $ 14,232 $ 937 $ 26,051

Gains (losses) on interest rate swaps reclassified from AOCI into income Interest expense and finance charges, net $ 2,445 $ ( 9,038 ) $ 3,583 $ ( 18,998 )

1 unchanged sentence

(Losses) recognized in OCI on foreign exchange forward contracts⁽²⁾ $ ( 6,632 ) $ — $ ( 14,657 ) $ —

$ ( 8,025 ) $ —

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

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

Gains recognized in income (amount excluded from effectiveness testing)⁽²⁾ Interest expense and finance charges, net $ 2,308 $ — $ 4,586 $ —

____________________________

(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.

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

(2) The Company had no net investment hedges outstanding during the three and six months ended May 31, 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.

2 unchanged sentences

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

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three and six months ended May 31, 2023 and 2022

( 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 February 28, 2023

As of May 31, 2023

As of November 30, 2022

6 unchanged sentences

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 February 28, 2023 and November 30, 2022.

There were no interest rate swaps outstanding as of May 31, 2023.

The effect of nonperformance risk on the fair value of derivative instruments was not material as of May 31, 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 $ 2.1 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.

The estimated fair value of the Senior Notes was approximately $ 2.1 billion as of both May 31, 2023 and November 30, 2022.

During the six months ended May 31, 2023, there were no transfers between the fair value measurement category levels.

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended February 28, 2023 and 2022

For the three and six months ended May 31, 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:

February 28, 2023 November 30, 2022

TD SYNNEX U.S.

Accounts Receivable Securitization Agreement

$ 110,000 $ —

May 31, 2023 November 30, 2022

Committed and uncommitted revolving credit facilities and borrowings $ 224,738 $ 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 the Secured Overnight Financing Rate ("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 SOFR.

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

3 unchanged sentences

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.

Such receivables, which are recorded in the Consolidated Balance Sheet, totaled approximately $ 2.4 billion and $ 2.9 billion as of May 31, 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 November 30, 2022.

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 )

AR Arrangement at May 31, 2023 or November 30, 2022.

TD SYNNEX Credit Agreement

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

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

The Company is party to a credit agreement, dated as of April 16, 2021 and amended May 22, 2023 (as amended, 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 May 31, 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.

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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.

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three and six months ended May 31, 2023 and 2022

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

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.

Loans borrowed under the TD SYNNEX Credit Agreement bear interest, in the case of SOFR rate loans, at a per annum rate equal to the applicable SOFR 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 SOFR rate based loans.

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

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 effective interest rate for the TD SYNNEX term loan was 6.63 % and 5.46 % as of May 31, 2023 and November 30, 2022, respectively.

The Company used interest rate swap derivative contracts to economically convert a portion of the TD SYNNEX term loan to fixed-rate debt.

The interest rate swaps were terminated in May 2023 (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.

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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.

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).

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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, 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.

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three and six months ended May 31, 2023 and 2022

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

Other Short-Term Borrowings

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 $ 588.5 million in borrowing capacity as of May 31, 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 $ 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 %.

There was $ 224.7 million outstanding on these facilities at May 31, 2023, at a weighted average interest rate of 6.54 %, 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.

At May 31, 2023, the Company was also contingently liable for reimbursement obligations with respect to issued standby letters of credit in the aggregate outstanding amount of $ 30.6 million.

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

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

The maximum commitment amounts for local currency credit facilities have been translated into U.S.

dollars at May 31, 2023 exchange rates.

Covenant Compliance

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

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

As of May 31, 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 months ended February 28, 2023 and 2022

For the three and six months ended May 31, 2023 and 2022

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

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

Three Months Ended

February 28, 2023 February 28, 2022

Three Months Ended Six Months Ended

May 31, 2023 May 31, 2022 May 31, 2023 May 31, 2022

Basic earnings per common share:

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

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three and six months ended May 31, 2023 and 2022

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

NOTE 10— SEGMENT INFORMATION:

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Americas Europe APJ Consolidated

Three Months Ended February 28, 2023

Three Months Ended May 31, 2023

Revenue $ 8,699,342 $ 4,461,461 $ 901,321 $ 14,062,124

Operating income 187,259 40,057 25,567 252,883

Three Months Ended February 28, 2022

Three Months Ended May 31, 2022

Revenue $ 9,776,933 $ 4,652,611 $ 840,247 $ 15,269,791

Operating income 192,823 40,525 19,389 252,737

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 )

Six Months Ended May 31, 2023

Revenue $ 17,338,046 $ 9,981,898 $ 1,867,551 $ 29,187,495

Operating income 366,764 128,262 56,019 551,045

Six Months Ended May 31, 2022

Revenue $ 18,851,206 $ 10,232,399 $ 1,656,163 $ 30,739,768

Operating income 331,342 105,857 37,978 475,177

NOTE 11— 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 through its affiliates.

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.

As of May 31, 2023 and November 30, 2022, MiTAC Holdings and its affiliates beneficially owned approximately 9.9 % 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 9.8 % of the Company’s outstanding common stock as of February 28, 2023.

As noted above, MiTAC Holdings and its affiliates in the aggregate beneficially owned approximately 9.9 % of the Company’s outstanding common stock as of May 31, 2023.

These shares are owned by the following entities:

As of February 28, 2023

As of May 31, 2023

MiTAC Holdings (1)

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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.

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 196 shares held directly by Mr.

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

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three and six months ended May 31, 2023 and 2022

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

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

Three Months Ended

February 28, 2023 February 28, 2022

Three Months Ended Six Months Ended

May 31, 2023 May 31, 2022 May 31, 2023 May 31, 2022

Purchases of inventories and services $ 41,193 $ 54,474 $ 81,636 $ 101,050

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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:

February 28, 2023 November 30, 2022

May 31, 2023 November 30, 2022

Receivable from related parties (included in Accounts receivable, net) $ 4,423 $ 1,222

Payable to related parties (included in Accounts payable) 10,204 30,317

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 12— EQUITY:

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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:

As of May 31, 2023, the Company had $ 841.7 million available for future repurchases of its common stock under the authorized share repurchase program.

The Company's common share repurchase activity for the six months ended May 31, 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 74 104.99

Treasury stock balance at February 28, 2023

Treasury stock balance at May 31, 2023

5,963 $ 87.40

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.

_________________________

( 1) Weighted-average price per share excludes broker's commissions and excise taxes.

"Repurchases of common stock" in the Consolidated Statements of Cash Flows for the six months ended May 31, 2023 excludes $ 1.4 million of accrued excise tax that is included in "Other current liabilities" and "Treasury stock" on the Consolidated Balance Sheets at May 31, 2023.

Excise taxes when paid are classified as operating activities in the Consolidated Statements of Cash Flows.

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended February 28, 2023 and 2022

For the three and six months ended May 31, 2023 and 2022

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

On June 27, 2023 , the Company announced that its Board of Directors declared a quarterly cash dividend of $ 0.35 per common share payable on July 28, 2023 to stockholders of record as of the close of business on July 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.

NOTE 13— COMMITMENTS AND CONTINGENCIES:

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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.

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 $ 26.7 million as of May 31, 2023), which has been paid in full.

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

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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.

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.

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

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

For the three and six months ended May 31, 2023 and 2022

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

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

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

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