What changed in this filing

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Item 2. Management’s Discussion and Analysis

2023-10-03 compared with 2023-07-06 · 121 added, 125 removed, 285 unchanged (46% of the section changed)

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When used in this Quarterly Report on Form 10-Q, or this “Report”, the words “anticipates,” “believes,” “estimates,” “expects,” “intends,” “allows,” “can,” “may,” “could,” “designed,” “will,” and similar expressions are intended to identify forward-looking statements.

These are statements that relate to future periods and include statements about our business model and our services, our business and market strategy, future growth, our infrastructure, our investment in our information technology, or IT, systems, our employee hiring and retention, the ownership interest of MiTAC Holdings Corporation or MiTAC Holdings, in us and its impact, the ownership interest of Apollo Global Management, Inc., or Apollo, in us and its impact, the impact of the Merger, our integration plans, our plans with respect to the GBO 2 Program, our revenue, sources of revenue, our gross margins, our operating costs and results, timing of payment, the value of our inventory, our competition, including with Synnex Technology International Corp., our future needs and sources for additional financing, contract terms, relationships with our suppliers, adequacy of our facilities, ability to meet demand, managing inventory and our shipping costs, our legal proceedings, our operations, foreign currency exchange rates and hedging activities, our strategic acquisitions including anticipated cost savings and other benefits, our goodwill, seasonality of sales, adequacy of our cash resources, our debt and financing arrangements, including the impact of any change to our credit rating, interest rate risk and impact thereof, cash held by our international subsidiaries and repatriation, changes in fair value of derivative instruments, our tax liabilities, adequacy of our disclosure controls and procedures, cybersecurity, the replacement of LIBOR, impact of our pricing policies, impact of economic and industry trends, changes to the markets in which we compete, impact of accounting policies, our estimates and assumptions, impact of inventory repurchase obligations and commitments and contingencies, our effective tax rates, impact of any impairment of our goodwill and intangible assets, our share repurchase and dividend program, and our purchase accounting adjustments.

These are statements that relate to future periods and include statements about our business model and our services, our business and market strategy, future growth, demand, our infrastructure, our investment in our information technology, or IT, systems, our employee hiring and retention, our Merger-related integration plans including with respect to the GBO 2 Program, our revenue, sources of revenue, our gross margins, our operating costs and results, timing of payment, our competition, our future needs and sources for additional financing, contract terms, relationships with our suppliers, adequacy of our facilities, our operations, foreign currency exchange rates and hedging activities, our strategic acquisitions including anticipated cost savings and other benefits, seasonality of sales, adequacy of our cash resources, our debt and financing arrangements, including the impact of any change to our credit rating, interest rate risk and impact thereof, cash held by our international subsidiaries and repatriation, changes in fair value of derivative instruments, our tax liabilities, adequacy of our disclosure controls and procedures, cybersecurity, impact of our pricing policies, impact of economic and industry trends, changes to the markets in which we compete, impact of new reporting rules and accounting policies, our estimates and assumptions, impact of inventory repurchase obligations and commitments and contingencies, our effective tax rates, and our share repurchase and dividend program.

Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected.

These risks and uncertainties include, but are not limited to, those risks discussed herein and risks related to the risk that the legacy SYNNEX and legacy Tech Data businesses will not be integrated successfully or realize the anticipated benefits of the combined company, the buying patterns of our customers, concentration of sales to large customers, the loss or consolidation of one or more of our significant original equipment manufacturer ("OEM") suppliers or customers, market acceptance of the products we assemble and distribute, competitive conditions in our industry and their impact on our margins, pricing and other terms with our OEM suppliers, our ability to gain market share, variations in supplier-sponsored programs, changes in our costs and operating expenses, increased inflation, dependence upon and trends in capital spending budgets in the IT industry, fluctuations in general economic conditions, changes in tax laws, risks associated with our international operations, uncertainties and variability in demand by our reseller and integration customers, supply shortages or delays, any termination or reduction in our floor plan financing arrangements, changes in value of foreign currencies and interest rates and other risk factors contained in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended November 30, 2022 and below under Part II, Item 1A, “Risk Factors.” These forward-looking statements speak only as of the date hereof.

These risks and uncertainties include, but are not limited to, those risks discussed herein and others, including risks related to the risk that the legacy SYNNEX and legacy Tech Data businesses will not be integrated successfully or realize the anticipated benefits of the combined company, the buying patterns of our customers, concentration of sales to large customers, the loss or consolidation of one or more of our significant original equipment manufacturer ("OEM") suppliers or customers, market acceptance of the products we assemble and distribute, competitive conditions in our industry and their impact on our margins, pricing and other terms with our OEM suppliers, our ability to gain market share, variations in supplier-sponsored programs, changes in our costs and operating expenses, increased inflation, dependence upon and trends in capital spending budgets in the IT industry, fluctuations in general economic conditions, changes in tax laws, risks associated with our international operations, uncertainties and variability in demand by our reseller and integration customers, supply shortages or delays, any termination or reduction in our floor plan financing arrangements, changes in value of foreign currencies and interest rates and other risk factors contained in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended November 30, 2022 and below under Part II, Item 1A, “Risk Factors.” These forward-looking statements speak only as of the date hereof.

We expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based, unless otherwise required by law.

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We serve a critical role, bringing products from the world's leading and emerging technology vendors to market, and helping our customers create solutions best suited to maximize business outcomes for their end-user customers.

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

On September 1, 2021, pursuant to the terms of the Merger Agreement, SYNNEX acquired all the outstanding shares of common stock of Tiger Parent (AP) Corporation, the parent corporation of Tech Data, for consideration of $1.6 billion in cash ($1.1 billion in cash after giving effect to a $500.0 million equity contribution by Tiger Parent Holdings, L.P., Tiger Parent (AP) Corporation's sole stockholder and an affiliate of Apollo Global Management, Inc., to Tiger Parent (AP) Corporation prior to the effective time of the Merger) and 44 million shares of common stock of SYNNEX, valued at approximately $5.6 billion.

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

On September 1, 2021, pursuant to the terms of the Merger Agreement, the Company acquired all the outstanding shares of common stock of Tiger Parent (AP) Corporation, the parent corporation of Tech Data, for consideration of $1.6 billion in cash ($1.1 billion in cash after giving effect to a $500.0 million equity contribution by Tiger Parent Holdings, L.P., Tiger Parent (AP) Corporation's sole stockholder and an affiliate of Apollo Global Management, Inc., to Tiger Parent (AP) Corporation prior to the effective time of the Merger) and 44 million shares of common stock of SYNNEX, valued at approximately $5.6 billion.

Digital transformation and the migration to cloud computing is reshaping our industry, enabling businesses and consumers to evaluate, procure, acquire, and consume technology products and services in a variety of ways.

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Our global strategy is to deliver higher value by focusing on the following strategic priorities:

• Invest in high-growth technologies such as hybrid cloud, security, analytics/Internet of Things ("IoT"), hyperscale infrastructure, and services.

• Invest in high-growth technologies such as hybrid cloud, security, analytics/Internet of Things ("IoT"), artificial intelligence ("AI"), hyperscale infrastructure, and services.

• Strengthen our end-to-end portfolio of products, services and solutions, including technology-as-a-service and recurring revenue models.

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Our systems design and integration solutions business is highly dependent on the demand for cloud infrastructure, and the number of key customers and suppliers in the market.

Our business includes operations in the Americas, Europe and Asia-Pacific and Japan ("APJ") so we are affected by demand for our products in those regions, and the weakening of local currencies relative to the U.S.

dollar which occurred during fiscal year 2022 may continue to adversely affect the operating results of our Europe and APJ segments.

Our business includes operations in the Americas, Europe and Asia-Pacific and Japan ("APJ") so we are affected by demand for our products in those regions, as well as the impact of fluctuations in foreign currency exchange rates compared to the U.S.

We continually seek to augment organic growth in our business with strategic acquisitions of businesses and assets that complement and expand our existing capabilities.

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The following table sets forth, for the indicated periods, data as percentages of total revenue:

Three Months Ended Six Months Ended

Three Months Ended Nine Months Ended

Statements of Operations Data:

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

August 31, 2023 August 31, 2022 August 31, 2023 August 31, 2022

Revenue 100.00 % 100.00 % 100.00 % 100.00 %

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• Revenue in constant currency, which is revenue adjusted for the translation effect of foreign currencies so that certain financial results can be viewed without the impact of fluctuations in foreign currency exchange rates, thereby facilitating period-to-period comparisons of our business performance.

Revenue in constant currency is calculated by translating the revenue for the three and six months ended May 31, 2023 in the billing currency using the comparable prior period currency conversion rate.

Revenue in constant currency is calculated by translating the revenue for the three and nine months ended August 31, 2023 in the billing currency using the comparable prior period currency conversion rate.

Generally, when the dollar either strengthens or weakens against other currencies, the growth at constant currency rates will be higher or lower than growth reported at actual exchange rates.

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• Non-GAAP diluted earnings per common share (“EPS”), which is diluted EPS excluding the per share impact of acquisition, integration and restructuring costs, amortization of intangible assets, share-based compensation expense, purchase accounting adjustments, income taxes related to the aforementioned items, as well as a capital loss carryback benefit.

Acquisition, integration and restructuring costs typically consist of acquisition, integration, restructuring and divestiture related costs and are expensed as incurred.

These expenses primarily represent professional services costs for legal, banking, consulting and advisory services, severance and other personnel related costs, share-based compensation expense and debt extinguishment fees.

Acquisition, integration and restructuring costs, which are expensed as incurred, primarily represent professional services costs for legal, banking, consulting and advisory services, severance and other personnel related costs, share-based compensation expense and debt extinguishment fees that are incurred in connection with acquisition, integration, restructuring and divestiture activities.

From time to time, this category may also include transaction-related gains/losses on divestitures/spin-off of businesses, costs related to long-lived assets including impairment charges and accelerated depreciation and amortization expense due to changes in asset useful lives, as well as various other costs associated with the acquisition or divestiture.

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Purchase accounting adjustments are primarily related to the impact of recognizing the acquired vendor and customer liabilities from the Merger at fair value.

The Company expects the duration of these adjustments to benefit our non-GAAP operating income through a portion of fiscal 2023 based on historical settlement patterns with our vendors and in accordance with the timing defined in our policy for releasing vendor and customer liabilities we deem remote to be paid.

These adjustments benefited our non-GAAP operating income through the third fiscal quarter of fiscal 2023 based on historical settlement patterns with our vendors and in accordance with the timing defined in our policy for releasing vendor and customer liabilities we deem remote to be paid.

We believe that providing this additional information is useful to the reader to better assess and understand our base operating performance, especially when comparing results with previous periods and for planning and forecasting in future periods, primarily because management typically monitors the business adjusted for these items in addition to GAAP results.

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These non-GAAP financial measures should not be considered in isolation or as a substitute for the comparable GAAP measures and should be used as a complement to, and in conjunction with data presented in accordance with GAAP.

Three and Six Months Ended May 31, 2023 and 2022:

The following table summarizes our revenue and change in revenue by segment for the three and six months ended May 31, 2023 and 2022:

Three Months Ended Six Months Ended

May 31, 2023 May 31, 2022 Percent Change May 31, 2023 May 31, 2022 Percent Change

Three and Nine Months Ended August 31, 2023 and 2022:

The following table summarizes our revenue and change in revenue by segment for the three and nine months ended August 31, 2023 and 2022:

Three Months Ended Nine Months Ended

August 31, 2023 August 31, 2022 Percent Change August 31, 2023 August 31, 2022 Percent Change

Revenue in constant currency (in thousands) (in thousands)

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Consolidated Commentary

During the three months ended May 31, 2023, consolidated revenue and revenue in constant currency decreased by $1.2 billion and $1.1 billion, respectively, as compared to the prior year period.

During the six months ended May 31, 2023, consolidated revenue and revenue in constant currency decreased by $1.6 billion and $961.0 million, respectively, as compared to the prior year period.

During the three months ended August 31, 2023, consolidated revenue and revenue in constant currency decreased by $1.4 billion and $1.6 billion, respectively, as compared to the prior year period.

During the nine months ended August 31, 2023, consolidated revenue and revenue in constant currency decreased by $2.9 billion and $2.5 billion, respectively, as compared to the prior year period.

The decreases are primarily driven by a decline in our Endpoint Solutions portfolio as the industry experienced a post-pandemic decline in demand for personal computer ecosystem products.

This decline was partially offset by increases in our Advanced Solutions portfolio and high-growth technologies.

The shift in product mix resulted in a greater percentage of our revenues being presented on a net basis, which negatively impacted our revenue compared to the prior three and six months ended May 31, 2022 by approximately 3%.

This decline was partially offset by an increase in our Advanced Solutions portfolio.

The shift in product mix resulted in a greater percentage of our revenues being presented on a net basis, which negatively impacted our revenue compared to the prior three and nine months ended August 31, 2022 by approximately 2% and 3%, respectively.

Americas Commentary

During the three months ended May 31, 2023, Americas revenue and revenue in constant currency decreased by $1.1 billion and $1.0 billion, respectively, as compared to the prior year period.

During the six months ended May 31, 2023, Americas revenue and revenue in constant currency decreased by $1.5 billion and $1.4 billion, respectively, as compared to the prior year period.

The decreases are primarily due to a decline in our Endpoint Solutions portfolio in the region as the industry experienced a post-pandemic decline in demand for personal computer ecosystem products, partially offset by growth in our Advanced Solutions portfolio and high-growth technologies.

The shift in product mix resulted in a greater percentage of our revenues being presented on a net basis, which negatively impacted our revenue by approximately 3% and 4% compared to the three and six months ended May 31, 2022, respectively.

During the three months ended August 31, 2023, Americas revenue and revenue in constant currency both decreased by $1.0 billion, as compared to the prior year period.

During the nine months ended August 31, 2023, Americas revenue and revenue in constant currency decreased by $2.5 billion and $2.4 billion, respectively, as compared to the prior year period.

The shift in product mix resulted in a greater percentage of our revenues being presented on a net basis, which negatively impacted our revenue by approximately 2% and 3% compared to the three and nine months ended August 31, 2022, respectively.

Europe Commentary

During the three months ended May 31, 2023, Europe revenue and revenue in constant currency decreased by $191.2 million and $164.2 million, respectively, as compared to the prior year period.

The decreases are primarily due to a shift in product mix that resulted in a greater percentage of our revenues being presented on a net basis, which negatively impacted our revenue by approximately 4% compared to the three months ended May 31, 2022.

The shift in product mix was primarily due to a decline in our Endpoint Solutions portfolio, which was offset by growth in our Advanced Solutions portfolio.

During the six months ended May 31, 2023, Europe revenue decreased by $250.5 million, as compared to the prior year period, primarily due to the impact of changes in foreign currencies.

The impact of changes in foreign currencies is primarily due to the weakening of the euro against the U.S.

During the six months ended May 31, 2023, Europe revenue in constant currency increased by $120.4 million, as compared to the prior year period, primarily due to growth in our Advanced Solutions portfolio, partially offset by a decline in our Endpoint Solutions portfolio.

The shift in product mix resulted in a greater percentage of our revenues being presented on a net basis, which negatively impacted our revenue by approximately 3% compared to the six months ended May 31, 2022.

During the three months ended August 31, 2023, Europe revenue and revenue in constant currency decreased by $454.2 million and $670.7 million, respectively, as compared to the prior year period.

The decrease is primarily due to a decline in our Endpoint Solutions portfolio in the region as the industry experienced a post-pandemic decline in demand for personal computer ecosystem products.

The shift in product mix resulted in a greater percentage of our revenues being presented on a net basis, which negatively impacted our revenue by approximately 5% compared to the three months ended August 31, 2022 .

The quarter-to-date impact of changes in foreign currencies is primarily due to the strengthening of the euro against the U.S.

During the nine months ended August 31, 2023, Europe revenue and revenue in constant currency decreased by $704.7 million and $550.3 million, respectively, as compared to the prior year period, primarily due to a shift in p roduct mix that resulted in a greater percentage of our revenues being presented on a net basis, which negatively impacted our revenue by approximately 4% compared to the nine months ended August 31, 2022 .

The year-to-date impact of changes in foreign currencies is primarily due to a weaker average foreign exchange rate for the euro against the U.S.

dollar during the first half of fiscal 2023 as compared to the average foreign exchange rate during the first half of fiscal 2022.

APJ Commentary

During the three months ended May 31, 2023, APJ revenue and revenue in constant currency increased by $61.1 million and $98.6 million, respectively, as compared to the prior year period.

During the six months ended May 31, 2023, APJ revenue and revenue in constant currency increased by $211.4 million and $309.5 million, respectively, as compared to the prior year period.

During the three months ended August 31, 2023, APJ revenue and revenue in constant currency increased by $79.9 million and $94.8 million, respectively, as compared to the prior year period.

During the nine months ended August 31, 2023, APJ revenue and revenue in constant currency increased by $291.3 million and $404.3 million, respectively, as compared to the prior year period.

The increases are primarily driven by growth in high-growth technologies.

Three Months Ended Percent Change Six Months Ended Percent Change

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

Three Months Ended Percent Change Nine Months Ended Percent Change

August 31, 2023 August 31, 2022 August 31, 2023 August 31, 2022

Gross Profit and Gross Margin - Consolidated (in thousands) (in thousands)

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Our gross margin is affected by a variety of factors, including competition, selling prices, mix of products, product costs along with rebate and discount programs from our suppliers, reserves or settlement adjustments, freight costs, inventory losses and fluctuations in revenue due to factors such as shift in product mix that may result in additional revenues being presented on a net basis.

Our gross profit increased during the three and six months ended May 31, 2023, as compared to the prior year periods, primarily due to the impact of lower purchase accounting adjustments related to the Merger and our improved gross margin, partially offset by the impact of a decline in revenues in our Endpoint Solutions portfolio.

The increase in gross margin during the three and six months ended May 31, 2023, as compared to the prior year periods, is primarily due to product and customer mix, including an increase in revenue in our Advanced Solutions portfolio and high-growth technologies, as well as the impact of lower purchase accounting adjustments related to the Merger.

The shift in product mix resulted in the presentation of additional revenues on a net basis, which positively impacted our gross margin during the three and six months ended May 31, 2023 by approximately 21 and 20 basis points, respectively.

During the three months ended May 31, 2023, non-GAAP gross profit decreased, as compared to the prior year period, primarily due to the decrease in revenues in our Endpoint Solutions portfolio, partially offset by an improvement in gross margin.

During the six months ended May 31, 2023, non-GAAP gross profit slightly increased, as compared to the prior year period, primarily due to an improvement in gross margin, partially offset by the decrease in revenues in our Endpoint Solutions portfolio.

During the three and six months ended May 31, 2023, non-GAAP gross margin increased, as compared to the prior year period, primarily due to product and customer mix, including an increase in revenue in our Advanced Solutions portfolio and high-growth technologies, as well as the presentation of additional revenues on a net basis.

Our gross profit increased during the three and nine months ended August 31, 2023, compared to the prior year period, primarily due to the impact of lower purchase accounting adjustments related to the Merger and our improved gross margin, partially offset by the impact of a decline in revenues in our Endpoint Solutions portfolio.

Our gross margin increased during the three and nine months ended August 31, 2023, compared to the prior year period, primarily due to product and customer mix, including an increase in revenue in our Advanced Solutions portfolio and margin expansion in high-growth technologies, as well as the impact of lower purchase accounting adjustments related to the Merger.

The shift in product mix resulted in the presentation of additional revenues on a net basis, which positively impacted our gross margin during the three and nine months ended August 31, 2023 by approximately 16 and 19 basis points, respectively.

During the three and nine months ended August 31, 2023, non-GAAP gross profit increased, as compared to the prior year period, primarily due to an improvement in gross margin, partially offset by the decrease in revenues in our Endpoint Solutions portfolio.

During the three and nine months ended August 31, 2023, non-GAAP gross margin increased, as compared to the prior year period, primarily due to product and customer mix, including an increase in revenue in our Advanced Solutions portfolio and margin expansion in high-growth technologies, as well as the presentation of additional revenues on a net basis.

Selling, General and Administrative Expenses

Three Months Ended Percent

Change Six Months Ended Percent

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

Change Nine Months Ended Percent

August 31, 2023 August 31, 2022 August 31, 2023 August 31, 2022

(in thousands) (in thousands)

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Selling, general and administrative expenses also include cost of warehouses, delivery centers and other non-integration facilities, utility expenses, legal and professional fees, depreciation on certain of our capital equipment, bad debt expense, amortization of our intangible assets, and marketing expenses, offset in part by reimbursements from our OEM suppliers.

During the three and six months ended May 31, 2023, selling, general and administrative expenses slightly increased, compared to the prior year period, primarily due to higher personnel costs.

Selling, general and administrative expenses increased as a percentage of revenue, compared to the prior year period, primarily due to the decrease in revenue.

During the three and nine months ended August 31, 2023, selling, general and administrative expenses increased, compared to the prior year period, primarily due to higher personnel costs.

Selling, general and administrative expenses increased as a percentage of revenue, compared to the prior year period, primarily due to a decrease in revenue and higher personnel costs.

Acquisition, Integration and Restructuring Costs

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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 $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.

Long-lived assets charges and termination fees include accelerated depreciation and amortization expense of $4.7 million and $16.2 million recorded during the three and nine months ended August 31, 2023, respectively, and $4.4 million and $57.3 million recorded during the three and nine months ended August 31, 2022, respectively due to changes in asset useful lives in conjunction with the consolidation of certain IT systems.

Long-lived asset charges and termination fees also include $0.4 million and $12.9 million recorded during the three and nine months ended August 31, 2023 for termination fees related to certain IT systems, along with $4.3 million recorded during the three and nine months ended August 31, 2022 for impairment charges.

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 to the Consolidated Financial Statements in Part I, Item 1 of this Report for further information) and expenses for certain restricted stock awards issued in conjunction with the Merger.

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

In July 2023, we offered a voluntary severance program ("VSP") to certain co-workers in the United States as part of our cost optimization efforts related to the Merger.

We incurred $37.2 million of costs in connection with the VSP during the three and nine months ended August 31, 2023, including $30.0 million of severance costs and $7.2 million of duplicative labor costs.

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

Three Months Ended Nine Months Ended

August 31, 2023 August 31, 2022 August 31, 2023 August 31, 2022

(in thousands)

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Stock-based compensation 11,912 12,911 34,472 39,376

Voluntary severance program costs

37,178 — 37,178 —

Total $ 68,634 $ 39,817 $ 150,586 $ 148,442

During the three months ended May 31, 2023, acquisition and integration expenses related to the Merger increased, compared to the prior year period, due to long-lived assets charges and termination fees, as well as an increase in personnel and other costs primarily due to higher severance costs.

During the six months ended May 31, 2023, acquisition and integration expenses related to the Merger decreased, compared to the prior year period, primarily due to the decrease in long-lived assets charges and termination fees.

During the three months ended August 31, 2023, acquisition and integration expenses related to the Merger increased, compared to the prior year period, primarily due to costs incurred related to the VSP.

During the nine months ended August 31, 2023, acquisition and integration expenses related to the Merger slightly increased, compared to the prior year period, primarily due to costs incurred related to the VSP, offset by the decrease in long-lived assets charges and termination fees.

GBO 2 Program

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

We incurred acquisition, integration and restructuring costs under the GBO 2 Program of $2.6 million and $9.4 million during the three months ended May 31, 2023 and 2022, respectively.

We incurred acquisition, integration, and restructuring costs under the GBO 2 Program of $6.1 million and $17.2 million during the six months ended May 31, 2023 and 2022, respectively.

During the three and six months ended May 31, 2023, acquisition, integration and restructuring costs under the GBO 2 Program decreased, compared to the prior year period, due to the wind-down of activities as the program is not expected to incur material amounts in future periods.

We incurred acquisition, integration and restructuring costs under the GBO 2 Program of $3.0 million and $6.6 million during the three months ended August 31, 2023 and 2022, respectively.

We incurred acquisition, integration, and restructuring costs under the GBO 2 Program of $9.0 million and $23.8 million during the nine months ended August 31, 2023 and 2022, respectively.

During the three and nine months ended August 31, 2023, acquisition, integration and restructuring costs under the GBO 2 Program decreased, compared to the prior year period, due to the wind-down of activities as the program is not expected to incur material amounts in future periods.

Operating Income

The following tables provide an analysis of operating income and non-GAAP operating income on a consolidated and regional basis as well as a reconciliation of operating income to non-GAAP operating income on a consolidated and regional basis for the three and six months ended May 31, 2023 and 2022:

Three Months Ended Percent

Change Six Months Ended Percent Change

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

Change Nine Months Ended Percent Change

August 31, 2023 August 31, 2022 August 31, 2023 August 31, 2022

Operating Income and Operating Margin - Consolidated (in thousands) (in thousands)

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Non-GAAP operating margin 2.84 % 2.59 % 2.82 % 2.67 %

Consolidated operating income was flat during the three months ended May 31, 2023, compared to the prior year period, primarily due to an improvement in gross margin due to product and customer mix and a decrease in purchase accounting adjustments related to the Merger, offset by the decline in revenues in our Endpoint Solutions portfolio.

Consolidated operating income increased during the six months ended May 31, 2023, compared to the prior year period, primarily due to an improvement in gross margin due to product and customer mix and a decrease in purchase accounting adjustments related to the Merger, partially offset by the decline in revenues in our Endpoint Solutions portfolio.

Consolidated operating margin increased during the three and six months ended May 31, 2023, compared to the prior year period, due to an increase in gross margin due to product and customer mix and a decrease in purchase accounting adjustments related to the Merger, partially offset by higher selling, general and administrative expenses as a percentage of revenue due to the decrease in revenues.

Consolidated non-GAAP operating income decreased during the three and six months ended May 31, 2023, compared to the prior year period, primarily due to the decrease in revenue, partially offset by an increase in gross margin due to product and customer mix.

Consolidated non-GAAP operating margin increased during the three and six months ended May 31, 2023, compared to the prior year period, primarily due to an increase in gross margin due to product and customer mix, partially offset by higher selling, general and administrative expenses as a percentage of revenue due to the decrease in revenues.

Three Months Ended Percent Change Six Months Ended Percent Change

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

Consolidated operating income slightly decreased during the three months ended August 31, 2023, compared to the prior year period, primarily due to the decline in revenues in our Endpoint Solutions portfolio, costs incurred related to the VSP and higher personnel costs, offset by an improvement in gross margin due to product and customer mix, including an increase in revenue in our Advanced Solutions portfolio and margin expansion in high-growth technologies, and a decrease in purchase accounting adjustments related to the Merger.

Consolidated operating income increased during the nine months ended August 31, 2023, compared to the prior year period, primarily due to an improvement in gross margin due to product and customer mix, including an increase in revenue in our Advanced Solutions portfolio and margin expansion in high-growth technologies, and a decrease in purchase accounting adjustments related to the Merger, partially offset by the decline in revenues in our Endpoint Solutions portfolio and higher personnel costs.

Consolidated operating margin increased during the three and nine months ended August 31, 2023, compared to the prior year period, due to an increase in gross margin due to product and customer mix, including an increase in revenue in our Advanced Solutions portfolio and margin expansion in high-growth technologies, and a decrease in purchase accounting adjustments related to the Merger, partially offset by higher selling, general and administrative expenses as a percentage of revenue due to the decrease in revenues and higher personnel costs.

Consolidated non-GAAP operating income decreased during the three and nine months ended August 31, 2023, compared to the prior year period, primarily due to the decrease in revenue in our Endpoint Solutions portfolio and higher personnel costs, partially offset by an increase in gross margin due to product and customer mix, including an increase in revenue in our Advanced Solutions portfolio and margin expansion in high-growth technologies.

Consolidated non-GAAP operating margin increased during the three and nine months ended August 31, 2023, compared to the prior year period, primarily due to an increase in gross margin due to product and customer mix, including an increase in revenue in our Advanced Solutions portfolio and margin expansion in high-growth technologies, partially offset by higher selling, general and administrative expenses as a percentage of revenue due to the decrease in revenues in our Endpoint Solutions portfolio and higher personnel costs.

Three Months Ended Percent Change Nine Months Ended Percent Change

August 31, 2023 August 31, 2022 August 31, 2023 August 31, 2022

Operating Income and Operating Margin - Americas (in thousands) (in thousands)

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Non-GAAP operating margin 3.40 % 2.85 % 3.17 % 2.84 %

Americas operating income decreased during the three months ended May 31, 2023, as compared to the prior year period, primarily due to the decrease in revenue in our Endpoint Solutions portfolio along with an increase in acquisition, integration, and restructuring costs, partially offset by increased gross margin in the region due to product and customer mix, as well as the impact of lower purchase accounting adjustments related to the Merger.

Americas operating income increased during the six months ended May 31, 2023, as compared to the prior year period, primarily due to increased gross margin in the region due to product and customer mix and the impact of lower purchase accounting adjustments related to the Merger, partially offset by the decline in revenues in our Endpoint Solutions portfolio.

Americas operating margin increased during the three and six months ended May 31, 2023, compared to the prior year period, primarily due to increased gross margin in the region due to product and customer mix as well as the impact of lower purchase accounting adjustments related to the Merger, partially offset by higher selling, general and administrative expenses as a percentage of revenue due to the decrease in revenues.

Americas non-GAAP operating income decreased during the three and six months ended May 31, 2023, compared to the prior year period, primarily due to the decrease in revenue in our Endpoint Solutions portfolio, partially offset by increased gross margin in the region due to product and customer mix.

Americas non-GAAP operating margin increased during the three and six months ended May 31, 2023, compared to the prior year period, primarily due to increased gross margin in the region due to product and customer mix, partially offset by higher selling, general and administrative expenses as a percentage of revenue due to the decrease in revenues.

Three Months Ended Percent Change Six Months Ended Percent Change

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

Americas operating income increased during the three and nine months ended August 31, 2023, as compared to the prior year period, primarily due to increased gross margin in the region due to product and customer mix, including an increase in revenue in our Advanced Solutions portfolio and margin expansion in high-growth technologies, and a decrease in purchase accounting adjustments related to the Merger, partially offset by the decrease in revenue in our Endpoint Solutions portfolio, costs incurred related to the VSP and higher personnel costs.

Americas operating margin increased during the three and nine months ended August 31, 2023, compared to the prior year period, primarily due to increased gross margin in the region due to product and customer mix, including an increase in revenue in our Advanced Solutions portfolio and margin expansion in high-growth technologies, and a decrease in purchase accounting adjustments related to the Merger, partially offset by higher selling, general and administrative expenses as a percentage of revenue due to the decrease in revenues in our Endpoint Solutions portfolio, costs incurred related to the VSP and higher personnel costs.

Americas non-GAAP operating income increased during the three and nine months ended August 31, 2023, compared to the prior year period, primarily due to increased gross margin in the region due to product and customer mix, including an increase in revenue in our Advanced Solutions portfolio and margin expansion in high-growth technologies, partially offset by the decrease in revenue in our Endpoint Solutions portfolio and higher personnel costs.

Americas non-GAAP operating margin increased during the three and nine months ended August 31, 2023, compared to the prior year period, primarily due to increased gross margin in the region due to product and customer mix, including an increase in revenue in our Advanced Solutions portfolio and margin expansion in high-growth technologies, partially offset by higher selling, general and administrative expenses as a percentage of revenue due to the decrease in revenues and higher personnel costs.

Three Months Ended Percent Change Nine Months Ended Percent Change

August 31, 2023 August 31, 2022 August 31, 2023 August 31, 2022

Operating Income and Operating Margin - Europe (in thousands) (in thousands)

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Non-GAAP operating margin 1.78 % 2.07 % 2.15 % 2.32 %

Europe operating income slightly decreased during the three months ended May 31, 2023, compared to the prior year period, primarily due to the decline in revenues in our Endpoint Solutions portfolio and an increase in personnel costs, partially offset by an increase in gross margin in the region due to product and customer mix and the impact of lower purchase accounting adjustments related to the Merger.

Europe operating income increased during the six months ended May 31, 2023, compared to the prior year period, primarily due to a decrease in acquisition, integration, and restructuring costs and the impact of lower purchase accounting adjustments related to the Merger, partially offset by the decline in revenues in our Endpoint Solutions portfolio and higher personnel costs.

Europe operating margin increased during the three months ended May 31, 2023, compared to the prior year period, primarily due to an increase in gross margin in the region due to product and customer mix and the impact of lower purchase accounting adjustments related to the Merger, partially offset by an increase in personnel costs.

Europe operating margin increased during the six months ended May 31, 2023, compared to the prior year period, primarily due to a decrease in acquisition, integration, and restructuring costs and the impact of lower purchase accounting adjustments related to the Merger, partially offset by an increase in personnel costs.

Europe non-GAAP operating income decreased during the three months ended May 31, 2023, compared to the prior year period, primarily due to the decline in revenues in our Endpoint Solutions portfolio and an increase in personnel costs, partially offset by an increase in gross margin in the region due to product and customer mix.

Europe non-GAAP operating income decreased during the six months ended May 31, 2023, compared to the prior year period, primarily due to the decline in revenues in our Endpoint Solutions portfolio and an increase in personnel costs.

Europe non-GAAP operating margin decreased during the three months ended May 31, 2023, compared to the prior year period, primarily due to an increase in personnel costs partially offset by an increase in gross margin due to product and customer mix.

Europe non-GAAP operating margin decreased during the six months ended May 31, 2023, compared to the prior year period, primarily due to an increase in personnel costs.

Three Months Ended Percent Change Six Months Ended Percent Change

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

Europe operating income decreased during the three months ended August 31, 2023, compared to the prior year period, primarily due to the decline in revenues in our Endpoint Solutions portfolio and an increase in personnel costs, partially offset by an increase in gross margin in the region due to product and customer mix and the impact of lower purchase accounting adjustments related to the Merger.

Europe operating income increased during the nine months ended August 31, 2023, compared to the prior year period, primarily due to a decrease in acquisition, integration, and restructuring costs, the impact of lower purchase accounting adjustments related to the Merger and an increase in gross margin due to product and customer mix, partially offset by the decline in revenues in our Endpoint Solutions portfolio and higher personnel costs.

Europe operating margin decreased during the three months ended August 31, 2023, compared to the prior year period, primarily due to higher selling, general and administrative expenses as a percentage of revenue due to the decrease in revenues and higher personnel costs, partially offset by improved gross margin in the region due to product and customer mix and the impact of lower purchase accounting adjustments related to the Merger.

Europe operating margin increased during the nine months ended August 31, 2023, compared to the prior year period, primarily due to a decrease in acquisition, integration, and restructuring costs, the impact of lower purchase accounting adjustments related to the Merger and an increase in gross margin due to product and customer mix, partially offset by higher selling, general and administrative expenses as a percentage of revenue due to the decrease in revenues and an increase in personnel costs.

Europe non-GAAP operating income decreased during the three and nine months ended August 31, 2023, compared to the prior year period, primarily due to the decline in revenues in our Endpoint Solutions portfolio and an increase in personnel costs, partially offset by an increase in gross margin in the region due to product and customer mix.

Europe non-GAAP operating margin decreased during the three and nine months ended August 31, 2023, compared to the prior year period, primarily due to higher selling, general and administrative expenses as a percentage of revenue due to the decrease in revenues and an increase in personnel costs, partially offset by an increase in gross margin due to product and customer mix.

Three Months Ended Percent Change Nine Months Ended Percent Change

August 31, 2023 August 31, 2022 August 31, 2023 August 31, 2022

Operating Income and Operating Margin - APJ (in thousands) (in thousands)

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Non-GAAP operating margin 2.34 % 2.50 % 2.96 % 2.67 %

APJ operating income increased during the three and six months ended May 31, 2023, compared to the prior year period, primarily due to increased sales in the region due to high-growth technologies, and a decrease in acquisition, integration, and restructuring costs.

APJ operating margin increased during the three and six months ended May 31, 2023, compared to the prior year period, primarily due to regional selling, general and administrative expenses remaining consistent despite the increase in sales and a decrease in acquisition, integration and restructuring costs.

APJ non-GAAP operating income increased during the three and six months ended May 31, 2023, compared to the prior year period, primarily due to increased sales in the region due to high-growth technologies.

APJ non-GAAP operating margin increased during the three and six months ended May 31, 2023, compared to the prior year period, primarily due to regional selling, general and administrative expenses remaining consistent despite the increase in sales.

During the three months ended August 31, 2023, APJ operating income and non-GAAP operating income were relatively flat, compared to the prior year period.

During the nine months ended August 31, 2023, APJ operating income and non-GAAP operating income increased, compared to the prior year period, primarily due to increased sales in the region due to high-growth technologies partially offset by higher personnel costs.

During the three months ended August 31, 2023, APJ operating margin and non-GAAP operating margin were relatively flat, compared to the prior year period.

During the nine months ended August 31, 2023, APJ operating margin and non-GAAP operating margin increased, compared to the prior year period, primarily due to lower selling, general and administrative expenses as a percentage of revenue.

Interest Expense and Finance Charges, Net

Three Months Ended Percent

Change Six Months Ended Percent

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

Change Nine Months Ended Percent

August 31, 2023 August 31, 2022 August 31, 2023 August 31, 2022

(in thousands) (in thousands)

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Amounts recorded in interest expense and finance charges, net, consist primarily of interest expense paid on our Senior Notes, our lines of credit, our accounts receivable securitization facility and our term loans, and fees associated with the sale of accounts receivable, partially offset by income earned on our cash investments.

During the three and six months ended May 31, 2023, our interest expense and finance charges, net increased, compared to the prior year period, primarily due to higher average interest rates, along with increased costs associated with the sale of accounts receivable due to higher discount fees, which totaled $12.0 million and $23.7 million in the three and six months ended May 31, 2023, respectively, compared to $3.9 million and $6.9 million in the three and six months ended May 31, 2022, respectively.

During the three and nine months ended August 31, 2023, our interest expense and finance charges, net increased, compared to the prior year period, primarily due to higher average interest rates, along with increased costs associated with the sale of accounts receivable due to higher discount fees, which totaled $12.5 million and $36.2 million in the three and nine months ended August 31, 2023, respectively, compared to $5.0 million and $11.9 million in the three and nine months ended August 31, 2022, respectively.

Other Expense, Net

Three Months Ended Percent

Change Six Months Ended Percent

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

Change Nine Months Ended Percent

August 31, 2023 August 31, 2022 August 31, 2023 August 31, 2022

(in thousands) (in thousands)

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Amounts recorded as other expense, net include foreign currency transaction gains and losses on certain financing transactions and the related derivative instruments used to hedge such financing transactions, the cost of hedging, investment gains and losses, and other non-operating gains and losses, such as settlements received from class action lawsuits.

During the three and six months ended May 31, 2023, our other expense, net decreased, compared to the prior year period, primarily due to lower foreign currency transaction losses.

During the three months ended August 31, 2023, our other expense, net was relatively flat, compared to the prior year period.

During the nine months ended August 31, 2023, our other expense, net decreased, compared to the prior year period, primarily due to lower foreign currency transaction losses.

Provision for Income Taxes

Three Months Ended Percent

Change Six Months Ended Percent

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

Change Nine Months Ended Percent

August 31, 2023 August 31, 2022 August 31, 2023 August 31, 2022

(in thousands) (in thousands)

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Income taxes for the interim periods presented have been included in the accompanying Consolidated Financial Statements on the basis of an estimated annual effective tax rate.

During the three months ended May 31, 2023, our income tax expense decreased compared to the prior year period, primarily due to lower income during the period.

During the six months ended May 31, 2023, our income tax expense slightly decreased compared to the prior year period, primarily due to a lower effective tax rate.

The effective tax rate was lower during the three and six months ended May 31, 2023 as compared to the three and six months ended May 31, 2022, primarily due to the relative mix of earnings and losses within the taxing jurisdictions in which we operate.

During the three months ended August 31, 2023, our income tax expense decreased, compared to the prior year period, primarily due to lower income during the period along with a lower effective tax rate.

During the nine months ended August 31, 2023, our income tax expense decreased, compared to the prior year period, primarily due to a lower effective tax rate.

The effective tax rate was lower during the three and nine months ended August 31, 2023 as compared to the three and nine months ended August 31, 2022, primarily due to the utilization of tax credits earned in certain jurisdictions and the relative mix of earnings and losses within the taxing jurisdictions in which we operate, partially offset by a tax benefit recorded in the prior year related to a capital loss carryback.

Net Income and Diluted EPS

The following tables present net income and diluted EPS as well as a reconciliation of our most comparable GAAP measures to the related non-GAAP measures presented:

Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

August 31, 2023 August 31, 2022 August 31, 2023 August 31, 2022

Net Income - Consolidated (in thousands)

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Non-GAAP net income $ 259,770 $ 263,424 $ 767,985 $ 818,125

Three Months Ended Six Months Ended

Diluted Earnings per Common Share May 31, 2023 May 31, 2022 May 31, 2023 May 31, 2022

Three Months Ended Nine Months Ended

Diluted Earnings per Common Share August 31, 2023 August 31, 2022 August 31, 2023 August 31, 2022

Diluted EPS (1)

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Unvested restricted stock awards granted to employees are considered participating securities.

For purposes of calculating Diluted EPS, net income allocated to participating securities was approximately 0.8% of net income for the three and six months ended May 31, 2023, and was approximately 0.7% and 0.6% of net income for the three and six months ended May 31, 2022, respectively.

For purposes of calculating Diluted EPS, net income allocated to participating securities was approximately 0.7% of net income for both the three and nine months ended August 31, 2023, and was approximately 0.6% of net income for both the three and nine months ended August 31, 2022.

Liquidity and Capital Resources

1 unchanged sentence

Three Months Ended

May 31, 2023 November 30, 2022 May 31, 2022

August 31, 2023 November 30, 2022 August 31, 2022

(Amounts in thousands)

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We calculate CCC as days of the last fiscal quarter’s revenue outstanding in accounts receivable plus days of supply on hand in inventory, less days of the last fiscal quarter’s cost of revenue outstanding in accounts payable.

Our CCC was 24 days and 23 days as of May 31, 2023 and November 30, 2022, respectively.

The increase was primarily due to our DSO, which was impacted by a shift in our product and customer mix to our Advanced Solutions portfolio and high-growth technologies which generally have a slightly longer cash conversion cycle.

Our CCC was 24 days and 21 days as of May 31, 2023 and May 31, 2022, respectively.

The increase was primarily due to our DSO, which was impacted by changes in product and customer mix and the timing of customer payments, partially offset by an increase in our DPO due to the timing of payments.

Our CCC was 23 days as of August 31, 2023, which remained flat as compared to November 30, 2022 and August 31, 2022 as our net working capital balances declined on a consistent basis with the decrease in revenues in the current quarter as compared to prior periods.

To increase our market share and better serve our customers, we may further expand our operations through investments or acquisitions.

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Operating Activities

Net cash provided by operating activities was $604.8 million during the six months ended May 31, 2023, compared to net cash used in operating activities of $284.5 million during the six months ended May 31, 2022.

The increase in net cash provided by operating activities was primarily due to a decline in sales volumes which resulted in decreases in accounts receivable and inventories, partially offset by a decrease in accounts payable.

Net cash provided by operating activities was $1.2 billion during the nine months ended August 31, 2023, compared to net cash used in operating activities of $351.8 million during the nine months ended August 31, 2022.

The increase in net cash provided by operating activities was primarily due to a decline in sales volumes which resulted in decreases in inventories and accounts receivable, partially offset by a decrease in accounts payable.

Investing Activities

Net cash used in investing activities during the six months ended May 31, 2023 and 2022 was $64.5 million and $46.7 million, respectively.

Net cash used in investing activities during the nine months ended August 31, 2023 and 2022 was $113.2 million and $77.0 million, respectively.

The increase in cash used in investing activities is primarily due to an increase in integration related capital expenditures due to the Merger.

Financing Activities

Net cash used in financing activities during the six months ended May 31, 2023 and 2022 was $247.1 million and $130.0 million, respectively.

The increase in cash used in financing activities is primarily due to an increase in repurchases of common stock under our share repurchase program, which totaled $174.8 million during the six months ended May 31, 2023 compared to $52.8 million during the six months ended May 31, 2022.

In addition, we paid stockholder dividends of $66.2 million and $57.6 million during the six months ended May 31, 2023 and 2022, respectively.

Net cash used in financing activities during the nine months ended August 31, 2023 and 2022 was $405.6 million and $159.2 million, respectively.

The increase in cash used in financing activities is primarily due to an increase in repurchases of common stock under our share repurchase program, which totaled $277.8 million during the nine months ended August 31, 2023 compared to $83.0 million during the nine months ended August 31, 2022.

In addition, we paid stockholder dividends of $98.9 million and $86.2 million during the nine months ended August 31, 2023 and 2022, respectively.

Capital Resources

Our cash and cash equivalents totaled $852.1 million and $522.6 million as of May 31, 2023 and November 30, 2022, respectively.

Our cash and cash equivalents totaled $1.3 billion and $522.6 million as of August 31, 2023 and November 30, 2022, respectively.

Our cash and cash equivalents held by international subsidiaries are no longer subject to U.S.

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Presently, we believe we have sufficient resources, cash flow and liquidity within the United States to fund current and expected future working capital, investment and other general corporate funding requirements.

We believe that our available cash and cash equivalents balances, cash flows from operations and our existing sources of liquidity, including available capacity under our borrowing facilities, will be sufficient to satisfy our current and planned working capital and investment needs for the next twelve months in all geographies.

We believe that our available cash and cash equivalents balances, cash flows from operations and our existing sources of liquidity, including available capacity under our borrowing facilities, will be sufficient to enable the repayment of $700.0 million of our Senior Notes due in August 2024 and satisfy our current and planned working capital and investment needs for the next twelve months in all geographies.

We also believe that our longer-term working capital, planned capital expenditures, anticipated stock repurchases, dividend payments and other general corporate funding requirements will be satisfied through cash flows from operations and, to the extent necessary, from our borrowing facilities and future financial market activities.

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There were no amounts outstanding under the U.S.

AR Arrangement or the TD SYNNEX revolving credit facility at May 31, 2023 or November 30, 2022.

We have 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.

AR Arrangement or the TD SYNNEX revolving credit facility at August 31, 2023 or November 30, 2022.

We have 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 $589.1 million in borrowing capacity as of August 31, 2023.

Our borrowings on these facilities vary within the period primarily based on changes in our working capital.

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%.

There was $164.9 million outstanding on these facilities at August 31, 2023, at a weighted average interest rate of 5.78%, and there was $193.1 million outstanding at November 30, 2022, at a weighted average interest rate of 4.69%.

Historically, we have renewed our accounts receivable securitization program and our parent company credit facilities on, or prior to, their respective expiration dates.

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We have had similar borrowing arrangements with various financial institutions throughout our years as a public company.

We had total outstanding borrowings of approximately $4.1 billion as of May 31, 2023 and November 30, 2022.

Our outstanding borrowings include Senior Notes of $2.5 billion at May 31, 2023 and November 30, 2022, and term loans under the term loan facility of the TD SYNNEX Credit Agreement of approximately $1.4 billion at May 31, 2023 and November 30, 2022.

We had total outstanding borrowings of approximately $4.1 billion as of August 31, 2023 and November 30, 2022.

Our outstanding borrowings include Senior Notes of $2.5 billion at August 31, 2023 and November 30, 2022 and term loans under the term loan facility of the TD SYNNEX Credit Agreement of approximately $1.4 billion at August 31, 2023 and November 30, 2022.

For additional information on our borrowings, see Note 8 - Borrowings to the Consolidated Financial Statements included in Part I, Item 1 of this Report.

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

At May 31, 2023 and November 30, 2022, we had a total of $1.1 billion and $1.4 billion, respectively, of trade accounts receivable sold to and held by financial institutions under these programs.

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.

At August 31, 2023 and November 30, 2022, we had a total of $834.5 million and $1.4 billion, respectively, of trade accounts receivable sold to and held by financial institutions under these programs.

Discount fees for these programs totaled $12.5 million and $36.2 million in the three and nine months ended August 31, 2023, respectively, and $5.0 million and $11.9 million in the three and nine months ended August 31, 2022, respectively.

Covenant Compliance

1 unchanged sentence

They also limit our ability to incur additional debt, create liens, enter into agreements with affiliates, modify the nature of our business, and merge or consolid ate.

As of May 31, 2023, we were in compliance with the financial covenant requirements for the above arrangements.

As of August 31, 2023, we were in compliance with the financial covenant requirements for the above arrangements.

Related Party Transactions

1 unchanged sentence

Critical Accounting Policies and Estimates

During the six months ended May 31, 2023, there were no material changes to our critical accounting policies and estimates previously disclosed in our Annual Report on Form 10-K for the fiscal year ended November 30, 2022.

During the nine months ended August 31, 2023, there were no material changes to our critical accounting policies and estimates previously disclosed in our Annual Report on Form 10-K for the fiscal year ended November 30, 2022.

Recently Issued Accounting Pronouncements

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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 2. Management’s Discussion and Analysis