What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2024-01-26 compared with 2023-01-24 · 202 added, 236 removed, 234 unchanged (65% of the section changed)

3 unchanged sentences

This section of the Form 10-K generally discusses fiscal 2023 and 2022 items and year-to-year comparisons between fiscal 2023 and 2022.

Discussions of fiscal 2020 items and year-to-year comparisons between fiscal 2021 and

2020 that are not included in this Form 10-K can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of the Company's Annual Report on Form 10-K for the fiscal year ended November 30, 2021 filed with the SEC on January 28, 2022.

Discussions of fiscal 2021 items and year-to-year comparisons between fiscal 2022 and 2021 that are not included in this Form 10-K can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of the Company's Annual Report on Form 10-K for the fiscal year ended November 30, 2022 filed with the SEC on January 24, 2023.

In addition to historical information, the MD&A contains forward-looking statements that involve risks and uncertainties.

1 unchanged sentence

Risk Factors of this Form 10-K and elsewhere in this document.

We are a leading global distributor and solutions aggregator for the information technology ("IT") ecosystem.

We are a Fortune 100 corporation and a leading global distributor and solutions aggregator for the information technology ("IT") ecosystem.

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 March 22, 2021, we 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, we 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.

See Note 3 - Acquisitions to the Consolidated Financial Statements for further information.

We previously had two reportable segments as of November 30, 2020:

Technology Solutions and Concentrix.

After giving effect to the previously announced separation of our customer experience services business (the "Separation") on December 1, 2020, we operated in a single reportable segment.

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

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

As a result, as of September 1, 2021 we began operating in three reportable segments based on our geographic regions:

the Americas, Europe and APJ.

Our three reportable segments each generate revenues from products and services across our Endpoint Solutions and Advanced Solutions portfolios.

Segment results for all prior periods have been restated for comparability to our current reportable segments.

For financial information by segment, refer to Note 13 – Segment Information, to the Consolidated Financial Statements in Item 8.

We have presented limited information by reportable segment within the Management’s Discussion and Analysis of Financial Condition and Results of Operations due to the lack of comparability between periods resulting from the Merger on September 1, 2021.

Revenue and Cost of Revenue

We distribute IT hardware, software, and systems including personal computing devices and peripherals, mobile phones and accessories, server and datacenter infrastructure, hybrid cloud, security, networking, communications and storage solutions, and system components.

We also provide systems design and integration solutions.

In fiscal years 2022 and 2021 approximately 45% and 37% of our revenue, respectively, was generated from our international operations.

As a result, our revenue growth is impacted by fluctuations in foreign currency exchange rates.

In fiscal year 2022, several foreign currencies in which we transact business depreciated against the U.S.

dollar, including the Euro and the Japanese yen, which adversely affected the revenue growth of our Europe and APJ segments.

The market for IT products has generally been characterized by declining unit prices and short product life cycles, although unit prices for certain products have increased during certain periods due to factors such as supply chain constraints and inflation.

Our overall business is also highly competitive on the basis of price.

We set our sales price based on the market supply and demand characteristics for each particular product or bundle of products we distribute and solutions we provide.

We also participate in the incentive and rebate programs of our OEM suppliers.

These programs are important determinants of the final sales price we charge to our reseller customers.

To mitigate the risk of declining prices and obsolescence of our distribution inventory, our OEM suppliers generally offer us limited price protection and return rights for products that are marked down or discontinued by them.

We carefully manage our inventory to maximize the benefit to us of these supplier-provided protections.

A significant portion of our cost of revenue is the purchase price we pay our OEM suppliers for the products we sell, net of any incentives, rebates, price protection and purchase discounts received from our OEM suppliers.

Cost of revenue also consists of provisions for inventory losses and write-downs, freight expenses associated with the receipt in and shipment out of our inventory, and royalties due to OEM vendors.

In addition, cost of revenue includes the cost of material, labor and overhead for our systems design and integration solutions.

The IT distribution industry in which we operate is characterized by low gross profit as a percentage of revenue, or gross margin, and low operating income as a percentage of revenue, or operating margin.

Our gross margin has fluctuated annually due to changes in the mix of products we offer, customers we sell to, incentives and rebates received from our OEM suppliers, competition, seasonality, replacement of lower margin business, inventory obsolescence, and lower costs associated with increased efficiencies.

Generally, when our revenue becomes more concentrated on limited products or customers, our gross margin tends to decrease due to increased pricing pressure from OEM suppliers or reseller customers.

Our operating margin has also fluctuated in the past, based primarily on our ability to achieve economies of scale, the management of our operating expenses, changes in the relative mix of our revenue, and the timing of our acquisitions and investments.

Economic and Industry Trends

Our revenue is highly dependent on the end-market demand for IT products, and on our partners' strategic initiatives and business models.

This end-market demand is influenced by many factors including the introduction of new IT products and software by OEMs, replacement cycles for existing IT products, trends toward cloud computing, seasonality, overall economic growth and general business activity.

A difficult and challenging economic environment due to the continued impacts of increased inflation, rising interest rates and Russia's invasion of Ukraine, may also lead to consolidation or decline in the IT distribution industry and increased price-based competition.

We are highly dependent on the end-market demand for IT products, and on our partners' strategic initiatives and business models.

This end-market demand is influenced by many factors including the introduction of new IT products and software by OEM suppliers, replacement cycles for existing IT products, trends toward cloud computing, overall economic growth and general business activity.

A difficult and challenging economic environment due to the continued persistence of inflation, elevated interest rates, and market volatility as a result of military conflicts in certain countries may also lead to consolidation or decline in the IT distribution industry and increased price-based competition.

Our results in fiscal 2023 were also negatively impacted by post-pandemic declines in demand for personal computing ecosystem products.

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 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 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.

We also divest businesses that we deem no longer strategic to our ongoing operations.

In our business we seek to acquire new OEM relationships, enhance our supply chain and integration capabilities, the services we provide to our customers and OEM suppliers, and expand our geographic footprint.

We seek to acquire new OEM relationships, enhance our supply chain and integration capabilities, the services we provide to our customers and OEM suppliers, and expand our geographic footprint.

Results of Operations

The following table sets forth, for the indicated periods, Consolidated Statement of Operations data as a percentage of revenue:

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

Fiscal Years Ended November 30,

Statements of Operations Data:

Consolidated Statements of Operations Data:

Revenue 100.00 % 100.00 %

11 unchanged sentences

In addition to disclosing financial results that are determined in accordance with GAAP, we also disclose certain non-GAAP financial information, including:

• 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 fiscal year ended November 30, 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.

• Non-GAAP gross profit, which is gross profit, adjusted to exclude the portion of purchase accounting adjustments that affected cost of revenue.

2 unchanged sentences

• Non-GAAP operating margin, which is non-GAAP operating income, as defined above, divided by revenue.

• Adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) which is net income before interest, taxes, depreciation and amortization, adjusted to exclude other (expense) income, net, acquisition, integration and restructuring costs, share-based compensation expense, and purchase accounting adjustments.

• Non-GAAP net income, which is net income, adjusted to exclude acquisition, integration and restructuring costs, amortization of intangible assets, share-based compensation expense, purchase accounting adjustments, legal settlements and other litigation, net, income taxes related to the aforementioned items, as well as a capital loss carryback benefit .

• 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, legal settlements and other litigation, net, 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.

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 an acquisition or divestiture.

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.

Our acquisition activities have resulted in the recognition of finite-lived intangible assets which consist primarily of customer relationships and vendor lists.

6 unchanged sentences

Intangible asset amortization is excluded from the related non-GAAP financial measure because the amortization, unlike the related revenue, is not affected by operations of any particular period unless an intangible asset becomes impaired or the estimated useful life of an intangible asset is revised.

S hare-based compensation expense is a non-cash expense arising from the grant of equity awards to employees and non-employee members of the Company's Board of Directors based on the estimated fair value of those awards.

S hare-based compensation expense is a non-cash expense arising from the grant of equity awards to employees and non-employee members of our Board of Directors based on the estimated fair value of those awards.

Although share-based compensation is an important aspect of the compensation of our employees, the fair value of the share-based awards may bear little resemblance to the actual value realized upon the vesting or future exercise of the related share-based awards and the expense can vary significantly between periods as a result of the timing of grants of new stock-based awards, including grants in connection with acquisitions.

1 unchanged sentence

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.

Legal settlements and other litigation, net includes a benefit recorded in other (expense) income, net during the fourth quarter of fiscal 2022 resulting from a decrease in our accrual for a legal matter in France.

For further discussion of this legal matter, please refer to Note 17 - Commitments and Contingencies to the Consolidated Financial Statements included in Part II, Item 8 of this report.

In connection with the Merger, we restructured our foreign financing structure, as well as select legal entities in anticipation of legally integrating legacy Tech Data and SYNNEX foreign operations.

In addition to the treasury efficiencies, these restructurings resulted in a one-time domestic capital loss which would offset certain domestic capital gains when carried back under United States tax law, resulting in an income tax capital loss carryback benefit.

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.

2 unchanged sentences

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.

Non-GAAP Financial Information:

Fiscal Years Ended November 30,

Fiscal Years Ended November 30, 2023 and 2022:

The following table summarizes our revenue and change in revenue by segment for the fiscal years ended November 30, 2023 and 2022:

Fiscal Years Ended November 30, Percent Change

2023 2022 2023 to 2022

Revenue in constant currency

(in thousands)

Revenue $ 57,555,416 $ 62,343,810 (7.7) %

Impact of changes in foreign currencies 99,152 —

Revenue in constant currency $ 57,654,568 $ 62,343,810 (7.5) %

Revenue $ 34,573,859 $ 38,791,102 (10.9) %

Impact of changes in foreign currencies 148,146 —

Revenue in constant currency $ 34,722,005 $ 38,791,102 (10.5) %

Revenue $ 19,422,297 $ 20,289,211 (4.3) %

Impact of changes in foreign currencies (168,747) —

Revenue in constant currency $ 19,253,550 $ 20,289,211 (5.1) %

Revenue $ 3,559,260 $ 3,263,497 9.1 %

Impact of changes in foreign currencies 119,753 —

Revenue in constant currency $ 3,679,013 $ 3,263,497 12.7 %

Consolidated Commentary

During the fiscal year ended November 30, 2023, consolidated revenue decreased by $4.8 billion and consolidated revenue in constant currency decreased by $4.7 billion, as compared to the prior fiscal year.

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, partially offset by growth in our Advanced Solutions portfolio.

A greater percentage of our revenue was presented on a net basis due to changes in product mix, which negatively impacted our revenue growth by approximately 4%.

Americas Commentary

During the fiscal year ended November 30, 2023, Americas revenue decreased by $4.2 billion and Americas revenue in constant currency decreased by $4.1 billion, as compared to the prior fiscal year.

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.

A greater percentage of our revenue was presented on a net basis due to changes in product mix, which negatively impacted our revenue growth by approximately 5%.

Europe Commentary

During the fiscal year ended November 30, 2023, Europe revenue decreased by $866.9 million and Europe revenue in constant currency decreased by $1.0 billion, as compared to the prior fiscal year.

A greater percentage of our revenue was presented on a net basis, which negatively impacted our revenue growth by approximately 4%.

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

APJ Commentary

During the fiscal year ended November 30, 2023, APJ revenue increased by $295.8 million and APJ revenue in constant currency increased by $415.5 million, as compared to the prior fiscal year.

The increases are primarily driven by high-growth technologies and our Advanced Solutions portfolio.

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

Fiscal Years Ended November 30, Percent Change

2023 2022 2023 to 2022

Gross Profit and Gross Margin - Consolidated (in thousands)

5 unchanged sentences

Non-GAAP gross margin 6.90 % 6.41 %

Our gross margin is affected by a variety of factors, including competition, selling prices, mix of products, the percentage of revenue that is presented on a net basis, product costs along with rebate and discount programs from our suppliers, reserves or settlement adjustments, freight costs, inventory losses and fluctuations in revenue.

Our gross profit increased during the fiscal year ended November 30, 2023, as compared to the prior fiscal year, 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 revenue in our Endpoint Solutions portfolio.

Our gross margin increased during the fiscal year ended November 30, 2023, as compared to the prior fiscal year, primarily due to product 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.

A greater percentage of our revenue was presented on a net basis due to changes in product mix, which positively impacted our gross margin by approximately 24 basis points.

Our non-GAAP gross profit decreased during the fiscal year ended November 30, 2023, as compared to the prior fiscal year, primarily due to the impact of a decline in revenue in our Endpoint Solutions portfolio, partially offset by our improved gross margin.

Our non-GAAP gross margin increased during the fiscal year ended November 30, 2023, as compared to the prior fiscal year, primarily due to product mix, including an increase in revenue in our Advanced Solutions portfolio and margin expansion in high-growth technologies.

Selling, General and Administrative Expenses

Fiscal Years Ended November 30, Percent Change

2023 2022 2023 to 2022

(in thousands)

Selling, general and administrative expenses $ 2,672,562 $ 2,627,007 1.7 %

Percentage of revenue 4.64 % 4.21 %

Our selling, general and administrative expenses consist primarily of personnel costs such as salaries, commissions, bonuses, share-based compensation and temporary personnel costs.

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.

Selling, general and administrative expenses increased in fiscal year 2023, compared to fiscal year 2022, 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 in our Endpoint Solutions portfolio and higher personnel costs.

A greater percentage of our revenue was presented on a net basis due to changes in product mix, which contributed to the increase in selling, general and administrative expenses as a percentage of revenue by approximately 17 basis points.

Acquisition, Integration and Restructuring Costs

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

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

Professional services costs are primarily comprised of IT and other consulting services, as well as legal expenses.

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

Long-lived asset charges and termination fees include accelerated depreciation and amortization expense of $17.4 million and $64.4 million during fiscal years 2023 and 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 $24.4 million recorded during fiscal year 2023 for termination fees related to certain IT systems, along with $4.7 million recorded during fiscal year 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 5 – Share-Based Compensation to the Consolidated Financial Statements for further information) and expenses for certain restricted stock awards issued in conjunction with the Merger.

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 $52.1 million of costs in connection with the VSP during the fiscal year ended November 30, 2023, including $42.3 million of severance costs and $9.8 million of duplicative labor costs.

During the fiscal years ended November 30, 2023 and 2022, acquisition and integration expenses related to the Merger were composed of the following:

Fiscal Years Ended November 30,

(in thousands)

Professional services costs $ 20,775 $ 29,352

Personnel and other costs 46,464 40,220

Long-lived assets charges and termination fees

41,812 69,053

Stock-based compensation

35,709 52,171

Voluntary severance program costs

Total $ 196,851 $ 190,796

During fiscal 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, partially offset by the decline in long-lived assets charges and termination fees and a decrease in stock-based compensation expense.

GBO 2 Program

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

TD SYNNEX continued this program in conjunction with the Company’s integration activities.

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

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

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

We incurred acquisition, integration, and restructuring costs under the GBO 2 Program of $9.4 million and $31.5 million during the fiscal years ended November 30, 2023 and 2022 , respectively.

During fiscal 2023, restructuring costs under the GBO 2 Program decreased, compared to the prior year period, due to the wind-down of activities as the program was completed as of November 30, 2023.

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 fiscal years ended November 30, 2023 and 2022 :

Fiscal Years Ended November 30, Percent Change

2023 2022 2023 to 2022

Operating Income and Operating Margin - Consolidated (in thousands)

6 unchanged sentences

Non-GAAP operating income $ 1,642,324 $ 1,724,039 (4.7) %

GAAP operating margin 1.69 % 1.97 %

Operating margin 1.87 % 1.69 %

Non-GAAP operating margin 2.85 % 2.77 %

Fiscal Years Ended November 30,

Consolidated operating income increased during the fiscal year ended November 30, 2023, compared to the prior fiscal year, primarily due to a decrease in purchase accounting adjustments related to the Merger and an improvement in gross margin due to product mix, including an increase in revenue in our Advanced Solutions portfolio and margin expansion in high-growth technologies, partially offset by the decline in revenues in our Endpoint Solutions portfolio and higher personnel costs.

Consolidated operating margin increased during the fiscal year ended November 30, 2023, compared to the prior fiscal year, primarily due to a decrease in purchase accounting adjustments related to the Merger and an improvement in gross margin due to product mix, 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.

Consolidated non-GAAP operating income decreased during the fiscal year ended November 30, 2023, compared to the prior fiscal year, 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 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 fiscal year ended November 30, 2023, compared to the prior fiscal year, primarily due to an increase in gross margin due to product mix, 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.

Fiscal Years Ended November 30, Percent Change

2023 2022 2023 to 2022

Operating Income and Operating Margin - Americas (in thousands)

8 unchanged sentences

Non-GAAP operating margin 3.20 % 2.94 %

Fiscal Years Ended November 30,

Americas operating income was flat during the fiscal year ended November 30, 2023, compared to the prior fiscal year, primarily due to increased gross margin in the region due to product 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, offset by the decrease in revenue in our Endpoint Solutions portfolio and costs incurred related to the VSP.

Americas operating margin increased during the fiscal year ended November 30, 2023, compared to the prior fiscal year, primarily due to increased gross margin in the region due to product 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 in our Endpoint Solutions portfolio and costs incurred related to the VSP.

Americas non-GAAP operating income decreased during the fiscal year ended November 30, 2023, compared to the prior fiscal year, primarily due to the decrease in revenue in our Endpoint Solutions portfolio, partially offset by increased gross margin in the region due to product mix, including an increase in revenue in our Advanced Solutions portfolio and margin expansion in high-growth technologies.

Americas non-GAAP operating margin increased during the fiscal year ended November 30, 2023, compared to the prior fiscal year, primarily due to increased gross margin in the region due to product mix, partially offset by higher selling, general and administrative expenses as a percentage of revenue due to the decrease in revenues.

Fiscal Years Ended November 30, Percent Change

2023 2022 2023 vs.

Operating Income and Operating Margin - Europe (in thousands)

8 unchanged sentences

Non-GAAP operating margin 2.17 % 2.37 %

Fiscal Years Ended November 30,

Europe operating income and operating margin increased during the fiscal year ended November 30, 2023, compared to the prior fiscal year, primarily due to an increase in gross margin in the region due to product mix, a decrease in purchase accounting adjustments related to the Merger, and a decrease in acquisition, integration, and restructuring costs, partially offset by the impact of the decline in revenues in our Endpoint Solutions portfolio and an increase in personnel costs.

Europe non-GAAP operating income and non-GAAP operating margin decreased during the fiscal year ended November 30, 2023, compared to the prior fiscal year, primarily due to the impact of 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 mix.

Fiscal Years Ended November 30, Percent Change

2023 2022 2023 vs.

Operating Income and Operating Margin - APJ (in thousands)

7 unchanged sentences

Non-GAAP operating margin 3.17 % 3.13 %

Fiscal Years Ended November 30,

Adjusted EBITDA - Consolidated (in thousands)

Net income $ 651,307 $ 395,069

APJ operating income and non-GAAP operating income increased during the fiscal year ended November 30, 2023, compared to the prior fiscal year, primarily due to increased sales in the region due to high-growth technologies and our Advanced Solutions portfolio partially offset by higher personnel costs.

APJ operating margin and non-GAAP operating margin were relatively flat, compared to the prior fiscal year.

Interest Expense and Finance Charges, Net

Provision for income taxes 175,823 71,416

Depreciation (1)

164,203 44,232

Amortization of intangibles 299,162 105,332

EBITDA $ 1,513,073 $ 773,884

Other expense (income), net 1,165 (1,102)

Acquisition, integration and restructuring costs 157,965 112,150

Share-based compensation 38,994 33,078

Purchase accounting adjustments 112,691 28,353

Adjusted EBITDA $ 1,823,888 $ 946,363

Fiscal Years Ended November 30, Percent Change

2023 2022 2023 vs.

(in thousands)

Interest expense and finance charges, net $ 288,318 $ 222,578 29.5 %

Percentage of revenue 0.50 % 0.36 %

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

Our interest expense and finance charges net, increased during fiscal year 2023, compared to fiscal year 2022, 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 $ 51.1 million and $ 26.2 million during the fiscal years ended November 30, 2023 and 2022, respectively.

Other Expense, Net

Fiscal Years Ended November 30, Percent Change

2023 2022 2023 vs.

(in thousands)

Other expense, net

$ 206 $ 1,165 (82.3) %

(1) Includes depreciation recorded in acquisition, integration, and restructuring costs.

Percentage of revenue 0.00 % 0.00 %

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 fiscal year 2023, our other expense, net was relatively flat, compared to fiscal year 2022.

Fiscal year 2023 activity was driven primarily by foreign currency hedging costs, partially offset by legal settlements received.

Fiscal year 2022 activity was driven primarily by foreign currency hedging costs, partially offset by a decrease in our accrual for a legal matter in France of $10.8 million.

For further discussion of this legal matter in France, please refer to Note 17 - Commitments and Contingencies to the Consolidated Financial Statements included in Part II, Item 8 of this Report.

Provision for Income Taxes

Fiscal Years Ended November 30, Percent Change

2023 2022 2023 vs.

(in thousands)

Provision for income taxes $ 162,597 $ 175,823 (7.5) %

Percentage of income before income taxes 20.59 % 21.26 %

Income taxes consist of our current and deferred tax expense resulting from our income earned in domestic and foreign jurisdictions.

Our income tax expense decreased during the fiscal year ended November 30, 2023, as compared to the prior fiscal year, primarily due to lower income during the period along with a lower effective tax rate.

The effective tax rate for fiscal year 2023 was lower when compared to the prior fiscal year 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:

Fiscal Years Ended November 30,

10 unchanged sentences

Fiscal Years Ended November 30,

Diluted Earnings Per Common Share (in thousands)

Diluted Earnings Per Common Share

Diluted EPS (1)

$ 6.70 $ 6.77

Acquisition, integration and restructuring costs 2.28 2.40

6 unchanged sentences

Non-GAAP diluted EPS $ 11.26 $ 11.94

Fiscal Years Ended November 30, 2022 and 2021

Fiscal Years Ended November 30, Percent Change

2022 2021 2022 to 2021

(in thousands)

Revenue $ 62,343,810 $ 31,614,169 97.2 %

We distribute a comprehensive range of products for the technology industry and design and integrate data center equipment.

The prices of our products are highly dependent on the volumes purchased within a product category.

The products we sell from one period to the next are often not comparable due to changes in product models, features and customer demand requirements.

Revenue increased in fiscal year 2022 compared to fiscal year 2021 primarily due to an increase in sales resulting from the Merger of approximately $28 billion, as well as broad-based demand for technology equipment.

Fiscal Years Ended November 30, Percent Change

2022 2021 2022 to 2021

(in thousands)

Gross profit $ 3,900,199 $ 1,889,534 106.4 %

Gross margin 6.26 % 5.98 %

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.

Our gross profit increased in fiscal year 2022, as compared to the prior fiscal year, primarily driven by an increase in sales as a result of the Merger, as well as product and customer mix.

The increase in gross margin during fiscal year 2022, as compared to fiscal year 2021, is primarily due to product and customer mix.

Selling, General and Administrative Expenses

Fiscal Years Ended November 30, Percent Change

2022 2021 2022 to 2021

(in thousands)

Selling, general and administrative expenses $ 2,627,007 $ 1,154,166 127.6 %

Percentage of revenue 4.21 % 3.65 %

Our selling, general and administrative expenses consist primarily of personnel costs such as salaries, commissions, bonuses, share-based compensation and temporary personnel costs.

Selling, general and administrative expenses increased in fiscal year 2022, compared to fiscal year 2021, primarily due to an increase in personnel costs resulting from the Merger and an increase in amortization of intangible assets acquired in connection with the Merger.

Selling, general and administrative expenses increased as a percentage of revenue, compared to the prior year period, primarily due to the impact of the Merger including an increase in personnel costs and amortization of intangible assets.

Acquisition, Integration and Restructuring Costs

Professional services costs are primarily comprised of IT and other consulting services, as well as legal expenses.

Personnel and other costs are primarily comprised of costs related to retention and other bonuses, severance and duplicative labor costs, as well as costs related to the settlement of certain outstanding long-term cash incentive awards for Tech Data upon closing of the Merger.

Long-lived asset charges for fiscal year 2022 are primarily comprised of accelerated depreciation and amortization expense of $64.4 million due to changes in asset useful lives in conjunction with the consolidation of certain IT systems, as well as impairment charges.

Long-lived asset charges for fiscal year 2021 represent an impairment charge of $22.2 million recorded for the write-off of capitalized costs associated with Tech Data’s tdONE program in conjunction with the decision to consolidate certain IT systems.

Stock-based compensation expense primarily relates to costs associated with the conversion of certain Tech Data performance-based equity awards issued prior to the Merger into restricted shares of TD SYNNEX (refer to Note 6 – Share-Based Compensation to the Consolidated Financial Statements for further information) and expenses for certain restricted stock awards issued in conjunction with the Merger.

To date, acquisition and integration expenses related to the Merger were composed of the following:

Fiscal Years Ended November 30,

(in thousands)

Professional services costs $ 29,352 $ 22,288

Personnel and other costs 40,220 33,716

Long-lived assets charges 69,053 22,166

Stock-based compensation 52,171 20,113

Total $ 190,796 $ 98,283

During fiscal 2022, acquisition and integration expenses related to the Merger increased, compared to the prior year period, due to the timing of the Merger as it was completed on September 1, 2021.

GBO 2 Program

TD SYNNEX continued this program in conjunction with the Company’s integration activities.

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

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

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

Acquisition, integration and restructuring costs under the GBO 2 Program for fiscal years 2022 and 2021 in cluded the following:

Fiscal Years Ended November 30,

(in thousands)

Restructuring costs $ 21,872 $ 8,709

Other costs 9,652 5,158

Total $ 31,524 $ 13,867

Restructuring costs under the GBO 2 Program for fiscal 2022 and 2021 we re composed of the following:

Fiscal Years Ended November 30,

(in thousands)

Severance $ 7,445 $ 2,893

Other exit costs 14,427 5,816

Total $ 21,872 $ 8,709

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

Fiscal Years Ended November 30,

(in thousands)

Americas $ 5,666 $ 2,658

Europe 15,737 5,746

Total $ 21,872 $ 8,709

During fiscal 2022, restructuring costs under the GBO 2 Program increased, compared to the prior year period, due to the timing of the Merger as it was completed on September 1, 2021.

The GBO 2 Program was not applicable to the Consolidated Financial Statements prior to the Merger.

Operating Income

Fiscal Years Ended November 30, Percent Change

2022 2021 2022 to 2021

(in thousands)

Operating income $ 1,050,873 $ 623,218 68.6 %

Operating margin 1.69 % 1.97 %

Operating income increased during fiscal year 2022, compared to fiscal year 2021, primarily due to increased sales as a result of the Merger and an increase in gross margin primarily due to product and customer mix, partially offset by an increase in personnel costs resulting from the Merger, an increase in amortization of intangible assets acquired in connection with the Merger and an increase in acquisition, integration and restructuring costs.

Operating margin decreased due to an increase in personnel costs resulting from the Merger, an increase in amortization of intangible assets acquired in connection with the Merger and an increase in acquisition, integration and restructuring costs, partially offset by an increase in gross margin primarily due to product and customer mix.

Interest Expense and Finance Charges, Net

Fiscal Years Ended November 30, Percent Change

2022 2021 2022 to 2021

(in thousands)

Interest expense and finance charges, net $ 222,578 $ 157,835 41.0 %

Percentage of revenue 0.36 % 0.50 %

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

Additionally, interest expense during fiscal year 2021 included approximately $47 million of acquisition and integration related financing costs primarily related to a commitment for a bridge loan facility obtained in March 2021 which was terminated as the permanent financing sources for the Merger were obtained or entered into.

The increase in our interest expense and finance charges net, during fiscal year 2022, compared to fiscal year 2021, was primarily due to an increase in interest expense from higher average outstanding borrowings as well as higher average interest rates, and increased costs associated with the sale of accounts receivable due to higher discount fees and higher volume of accounts receivable sold, partially offset by the $47 million of acquisition and integration related financing costs in fiscal year 2021.

Other (Expense) Income, Net

Fiscal Years Ended November 30, Percent Change

2022 2021 2022 to 2021

(in thousands)

Other (expense) income, net $ (1,165) $ 1,102 (205.7) %

Percentage of revenue 0.00 % 0.00 %

Amounts recorded as other (expense) income, net include certain 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.

Other (expense) income, net increased during fiscal year 2022, compared to fiscal year 2021, primarily due to increased costs for foreign exchange hedges coupled with an expanded program and a gain on sale of an investment in the prior year, partially offset by a decrease in our accrual during fiscal year 2022 for a legal matter in France of $10.8 million.

For further discussion of this legal matter, please refer to Note 18 - Commitments and Contingencies to the Consolidated Financial Statements included in Part II, Item 8 of this Report.

Provision for Income Taxes

Fiscal Years Ended November 30, Percent Change

2022 2021 2022 to 2021

(in thousands)

Provision for income taxes $ 175,823 $ 71,416 146.2 %

Percentage of income before income taxes 21.26 % 15.31 %

Income taxes consist of our current and deferred tax expense resulting from our income earned in domestic and foreign jurisdictions.

Our income tax expense increased during the fiscal year ended November 30, 2022, as compared to the prior year, due to the increase in income before income taxes, as well as a lower capital loss carryback benefit.

The effective tax rate for fiscal year 2022 was higher when compared to the prior year primarily due to the lower capital loss carryback benefit, partially offset by the impact of the relative mix of earnings and losses within the taxing jurisdictions in which we operate.

In connection with the Merger, the Company restructured its foreign financing structure, as well as select legal entities in anticipation of legally integrating legacy Tech Data and SYNNEX foreign operations.

In addition to the treasury efficiencies, these restructurings resulted in a one-time domestic capital loss which would offset certain domestic capital gains when carried back under United States tax law to tax year 2020, resulting in a tax benefit of $45.0 million during fiscal year 2021.

In fiscal year 2022, we recorded additional tax benefits of $8.3 million related to the capital loss carryback.

_________________________

(1) Diluted EPS is calculated using the two-class method.

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% and 0.7% of net income for the fiscal years ended November 30, 2023 and 2022, respectively.

Liquidity and Capital Resources

2 unchanged sentences

2023 November 30,

(Amounts in thousands)

(in thousands)

Days sales outstanding ("DSO")

1 unchanged sentence

Accounts receivable, net (b) 10,297,814 9,420,999

Days sales outstanding (c) = ((b)/(a))*the

number of days

during the period

Days sales outstanding (c) = ((b)/(a))*the number of days during the period

Days inventory outstanding ("DIO")

1 unchanged sentence

Inventories (e) 7,146,274 9,066,620

Days inventory outstanding (f) = ((e)/(d))*the

number of days

during the period

Days inventory outstanding (f) = ((e)/(d))*the number of days during the period

Days payable outstanding ("DPO")

1 unchanged sentence

Accounts payable (h) 13,347,281 13,988,980

Days payable outstanding (i) = ((h)/(g))*the

number of days

during the period

Days payable outstanding (i) = ((h)/(g))*the number of days during the period

Cash conversion cycle ("CCC") (j) = (c)+(f)-(i) 23 23

1 unchanged sentence

Our working capital needs are primarily to finance accounts receivable and inventory.

We rely heavily on term loans, sales of accounts receivable, our securitization programs, our revolver programs and trade credit from vendors for our working capital needs.

We rely heavily on term loans, sales of accounts receivable, our securitization program, our revolver programs and net trade credit from vendors for our working capital needs.

We have financed our growth and cash needs to date primarily through cash generated from operations and financing activities.

2 unchanged sentences

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 23 days and 14 days at the end of fiscal years 2022 and 2021, respectively.

The increase in fiscal year 2022, compared to fiscal year 2021, was primarily due to our DIO, which was impacted by an increase in inventory to support growth in our business and supply chain constraints, partially offset by a corresponding increase in our DPO.

Our CCC was 23 days at the end of fiscal year 2023, which remained flat, as compared to fiscal year 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.

We expect that such expansion would require an initial investment in working capital, personnel, facilities and operations.

We expect that any such expansions would require an initial investment in working capital, personnel, facilities and operations.

These investments or acquisitions would likely be funded primarily by our existing cash and cash equivalents, additional borrowings, or the issuance of securities.

Operating Activities

Net cash used in operating activities was $49.6 million during fiscal year 2022, primarily due to an increase in inventories and accounts receivable driven by growth in our business, partially offset by an increase in accounts payable due to timing of payments and increased net income.

Net cash provided by operating activities was $809.8 million during fiscal year 2021, primarily due to net income and an increase in accounts payable due to the timing of payments, including the impact of the Merger.

These cash inflows were partially offset by an increase in inventory and accounts receivable driven by growth in our business, including the impact of the Merger.

The significant components of our investing and financing cash flow activities are listed below.

Net cash provided by operating activities was $1.4 billion during fiscal year 2023 compared to net cash used in operating activities of $49.6 million during fiscal year 2022.

The increase in cash provided by operating activities was primarily due to favorable changes in working capital driven by the change in inventories.

In fiscal year 2022, our inventory increased to support growth in our business in comparison to a decline in our inventory during fiscal year 2023.

The favorable change in inventory was partially offset by a corresponding unfavorable change in accounts payable.

Investing Activities

• $117.0 million related to infrastructure investments.

• $907.1 million in net cash paid related to the Merger.

• $54.9 million related to infrastructure investments.

Net cash used in investing activities was $156.4 million and $115.5 million during fiscal years 2023 and 2022, respectively.

The increase as compared to fiscal year 2022 is primarily due to an increase in integration related capital expenditures due to the Merger.

Financing Activities

• Dividends of $114.9 million paid.

• Share repurchases under the share repurchase program of $125.0 million.

• Net repayments of borrowings of $32.1 million.

• Proceeds of $2.5 billion for issuance of Senior Notes to finance the Merger.

• Repayment of approximately $2.6 billion of debt of Tech Data paid off substantially concurrent with the closing of the Merger.

• $149.9 million net transfer of cash and cash equivalents to Concentrix Corporation in connection with the Separation.

• Dividends of $50.3 million paid.

• Debt issuance costs of $42.3 million paid.

Net cash used in financing activities was $785.9 million and $275.6 million during fiscal years 2023 and 2022, respectively.

The increase as compared to fiscal year 2022 is primarily due to an increase in share repurchases under the share repurchase program, which totaled $620.7 million for fiscal year 2023 as compared to $125.0 million for fiscal year 2022.

In addition, we paid stockholder dividends of $130.4 million and $114.9 million during fiscal years 2023 and 2022, respectively.

We believe our current cash balances, cash flows from operations and credit availability are sufficient to support our operating activities for at least the next twelve months.

Capital Resources

Our cash and cash equivalents totaled $522.6 million and $994.0 million as of November 30, 2022 and 2021, respectively.

Our cash and cash equivalents totaled $1.0 billion and $522.6 million as of November 30, 2023 and 2022, respectively.

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

1 unchanged sentence

Repatriation of some foreign balances is restricted by local laws.

Historically, we have fully utilized and reinvested all foreign cash to fund our foreign operations and expansion.

If in the future our intentions change, and we repatriate the cash back to the United States, we will report in our consolidated financial statements the impact of state and withholding taxes depending upon the planned timing and manner of such repatriation.

If in the future we repatriate foreign cash back to the United States, we will report in our Consolidated Financial Statements the impact of state and withholding taxes depending upon the planned timing and manner of such repatriation.

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, the cash flows expected to be generated from operations and our existing sources of liquidity, 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.

5 unchanged sentences

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

AR Arrangement has a maturity date of December 2024.

We are also party to a credit agreement, dated as of April 16, 2021 (the "TD SYNNEX Credit Agreement"), pursuant to which we 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 our request but subject to the lenders' discretion, potentially be increased by up to an aggregate amount of $500.0 million.

AR Arrangement, as amended December 11, 2023, has a maturity date of December 2025.

We also have a credit agreement, dated as of April 16, 2021 and amended May 22, 2023 (as amended, the "TD SYNNEX Credit Agreement"), pursuant to which we 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 our request but subject to the lenders' discretion, potentially be increased by up to an aggregate amount of $500.0 million.

The TD SYNNEX Credit Agreement also includes a $1.5 billion term loan facility that was fully funded in connection with the Merger.

The TD SYNNEX Credit Agreement has a maturity date of September 2026, in the case of the TD SYNNEX revolving credit facility, subject to two one-year extensions upon our prior notice to the lenders and the agreement of the lenders to extend such maturity date.

The TD SYNNEX Credit Agreement has a maturity date of September 2026 and, in the case of the TD SYNNEX revolving credit facility, subject to two one-year extensions upon our prior notice to the lenders and the agreement of the lenders to extend such maturity date.

The outstanding amount of our borrowings under the U.S.

1 unchanged sentence

There were no amounts outstanding under the U.S.

AR Arrangement and the TD SYNNEX revolving credit facility at November 30, 2022 and 2021.

We have various other committed and uncommitted lines of credit with financial institutions, accounts receivable securitization arrangements, finance leases, short-term loans, term loans, credit facilities and book overdraft facilities, totaling approximately $574.9 million in borrowing capacity as of November 30, 2022.

AR Arrangement or the TD SYNNEX revolving credit facility at November 30, 2023 and 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 $583.1 million in borrowing capacity as of November 30, 2023.

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

3 unchanged sentences

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

Our credit facilities have a number of covenants and restrictions that require us to maintain specified financial ratios.

They also limit our (or our subsidiaries', as applicable) ability to incur additional debt or liens, enter into agreements with affiliates, modify the nature of our business, and merge or consolidate.

As of November 30, 2022, we were in compliance with the financial covenant requirements for the above arrangements.

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

Our outstanding borrowings include Senior Notes of $2.5 billion at November 30, 2022 and 2021, and term loans under the term loan facility of the TD SYNNEX Credit Agreement of $1.4 billion and $1.5 billion at November 30, 2022 and 2021, respectively.

Our outstanding borrowings include Senior Notes of $2.5 billion at November 30, 2023 and 2022, and term loans under the term loan facility of the TD SYNNEX Credit Agreement of approximately $1.3 billion and $1.4 billion at November 30, 2023 and 2022, respectively.

For additional information on our borrowings, see Note 11 - Borrowings to the Consolidated Financial Statements included in Part II, Item 8 of this Report.

3 unchanged sentences

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

At November 30, 2022 and 2021, we had a total of $1.4 billion and $759.9 million, respectively, of trade accounts receivable sold to and held by financial institutions under these programs.

At November 30, 2023 and 2022, we had a total of $864.6 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 in the years ended November 30, 2023 and 2022 totaled $51.1 million and $26.2 million, respectively.

Share Repurchase Program

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

In January 2023, the Board of Directors authorized a new three-year $1.0 billion share repurchase program, replacing the existing $400.0 million share repurchase program, pursuant to which we may repurchase our outstanding common stock from time to time in the open market or through privately negotiated transactions.

We repurchased 6.5 million shares of common stock for $620.7 million and 1.3 million shares of common stock for $125.0 million in fiscal 2023 and 2022, respectively.

As of November 30, 2023, we had $395.9 million available for future repurchases of our common stock.

For additional information on our share repurchase program, see Note 6 - Stockholders' Equity to the Consolidated Financial Statements included in Part II, Item 8 of this Report.

Covenant Compliance

Our credit facilities have a number of covenants and restrictions that require us to maintain specified financial ratios.

As of November 30, 2023, we were in compliance with the financial covenant requirements for the above arrangements.

Contractual Obligations

19 unchanged sentences

Payments are due as per contract terms and do not contain a significant financing component.

In relation to product support, supply chain management and other services that we perform, revenue is recognized over time as the services are performed.

Service revenues represents less than 10% of the total revenue for the periods presented.

4 unchanged sentences

We recognize revenue on a net basis on certain contracts, where our performance obligation is to arrange for the products or services to be provided by another party or the rendering of logistics services for the delivery of inventory for which we do not assume the risks and rewards of ownership, by recognizing the margins earned in revenue with no associated cost of revenue.

Such arrangements include supplier service contracts, post-contract software support services, cloud computing and software as a service arrangements, certain fulfillment contracts, extended warranty contracts and certain of our systems design and integration solutions arrangements which operate under a customer-owned procurement model.

We consider shipping and handling activities as costs to fulfill the sale of products.

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

Business Combinations.

We allocate the fair value of purchase consideration to the assets acquired, liabilities assumed, and noncontrolling interests in the acquiree generally based on their fair values at the acquisition date.

The excess of the fair value of purchase consideration over the fair value of these assets acquired, liabilities assumed and noncontrolling interests in the acquiree is recorded as goodwill and may involve engaging independent third-parties to perform an appraisal.

When determining the fair values of assets acquired, liabilities assumed, and noncontrolling interests in the acquiree, we make significant estimates and assumptions, especially with respect to intangible assets.

Critical estimates in valuing intangible assets include, but are not limited to, expected future cash flows, which includes consideration of future growth rates and margins, attrition rates, and discount rates.

Fair value estimates are based on the assumptions we believe a market participant would use in pricing the asset or liability.

Amounts recorded in a business combination may change during the

measurement period, which is a period not to exceed one year from the date of acquisition, as additional information about conditions existing at the acquisition date becomes available.

Goodwill, intangible assets and long-lived assets

15 unchanged sentences

Goodwill is considered impaired if the carrying value of the reporting unit exceeds its fair value and the excess is recognized as an impairment loss.

We performed our annual goodwill impairment test as of September 1, 2022 and chose to bypass the qualitative assessment for all reporting units and proceed directly to the quantitative assessment, which indicated that the estimated fair values of our Europe and APJ reporting units exceeded their carrying values by approximately 6% and 9%, respectively.

The goodwill allocated to our Europe and APJ reporting units as of November 30, 2022 was approximately $1.3 billion and $74.8 million, respectively.

If actual results in our Europe or APJ reporting units are substantially lower than the projections used in our valuation methodology, if market discount rates substantially increase or our market capitalization substantially decreases, our future valuations could be adversely affected, potentially resulting in a future impairment.

No goodwill impairment has been identified for any of the years presented.

We performed our annual goodwill impairment test as of September 1, 2023 as a qualitative assessment, and determined that for all reporting units, it was not more likely than not that the fair value of the reporting unit was less than its carrying value.

We review the recoverability of our long-lived assets, such as finite-lived intangible assets, property and equipment and certain other assets, when events or changes in circumstances occur that indicate the carrying value of the asset or asset group may not be recoverable.

6 unchanged sentences

We recognize tax benefits from uncertain tax positions only if that tax position is more likely than not to be sustained on examination by the taxing authorities, based on the technical merits of the position.

The tax benefits

recognized in the financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon settlement.

The tax benefits recognized in the financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon settlement.

We recognize interest and penalties related to unrecognized tax benefits in the provision for income taxes.

4 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-K

Item 7. Management’s Discussion and Analysis