TD SYNNEX CORP 10-K

Item 8. Financial Statements and Supplementary Data INDEX Page Consolidated Financial Statements of TD SYNNEX Corporation Management’s Report on Internal Control over Financial Reporting 50 Report of Independent Registered Public Accounting Firm ( KPMG LLP , Santa Clara, CA , Auditor Firm ID: 185 ) 51 Consolidated Balance Sheets as of November 30, 202 3 and 20 2 2 53 Consolidated Statements of Operations for Fiscal Years Ended November 30, 202 3 , 202 2 and 20 2 1 54 Consolidated Statements of Comprehensive Income for Fiscal Years Ended November 30, 202 3 , 202 2 and 202 1 55 Consolidated Statements of Stockholders’ Equity for Fiscal Years Ended November 30, 202 3 , 202 2 and 202 1 56 Consolidated Statements of Cash Flows for Fiscal Years Ended November 30, 202 3 , 202 2 and 202 1 57 Notes to Consolidated Financial Statements 58 Financial Statement Schedule Schedule II: Valuation and Qualifying Accounts for Fiscal Years Ended November 30, 202 3 , 202 2 and 202 1 93 Financial statement schedules not listed above are either omitted because they are not applicable or the required information is shown in the Consolidated Financial Statements or in the Notes thereto. 49 Table of Contents Management’s Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of ours are being made only in accordance with authorizations of management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework). Based on this assessment, our management concludes that, as of November 30, 2023, our internal control over financial reporting was effective at the reasonable assurance level based on those criteria. The effectiveness of our internal control over financial reporting as of November 30, 2023 has been audited by KPMG LLP, an independent registered public accounting firm, as stated in their report which appears on page 51 of this Report. 50 Table of Contents Report of Independent Registered Public Accounting Firm To the Stockholders and Board of Directors TD SYNNEX Corporation: Opinions on the Consolidated Financial Statements and Internal Control Over Financial Reporting We have audited the accompanying consolidated balance sheets of TD SYNNEX Corporation and subsidiaries (the Company) as of November 30, 2023 and 2022, the related consolidated statements of operations, comprehensive income, stockholders’ equity, and cash flows for each of the years in the three-year period ended November 30, 2023, and the related notes and financial statement Schedule II - Valuation and Qualifying Accounts (collectively, the consolidated financial statements). We also have audited the Company’s internal control over financial reporting as of November 30, 2023, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of November 30, 2023 and 2022, and the results of its operations and its cash flows for each of the years in the three-year period ended November 30, 2023, in conformity with U.S. generally accepted accounting principles. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of November 30, 2023 based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Basis for Opinions The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s consolidated financial statements and an opinion on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. 51 Table of Contents Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which they relate. Sufficiency of audit evidence over revenue As discussed in Note 12 to the consolidated financial statements, and presented in the consolidated statements of operations, the Company reported revenue of $57,555,416 thousand for the fiscal year ended November 30, 2023. We identified the evaluation of the sufficiency of audit evidence over revenue as a critical audit matter. The geographical dispersion of distribution and administrative facilities required especially subjective auditor judgment in determining the nature and extent of procedures to perform and in evaluating those procedures. The following are the primary procedures we performed to address this critical audit matter. We applied auditor judgment to determine the nature and extent of procedures to be performed over revenue, including the determination of the locations at which those procedures were to be performed. For certain locations we evaluated the design and tested the operating effectiveness of certain internal controls related to the recognition of revenue. For the Americas and Europe segments, we performed a software-assisted data analysis at a transactional level to identify higher risk revenue records to test. We tested the identified higher risk revenue transactions during the year by comparing the amounts recognized by the Company to relevant underlying documentation such as contracts, shipping documents, or other third-party evidence. For the APJ segment, we tested samples of revenue transactions during the year by comparing the amounts recognized by the Company to relevant underlying documentation such as contracts, shipping documents, or other third-party evidence. We investigated a selection of journal entries that were made by the Company to adjust revenue. We evaluated the sufficiency of the audit evidence obtained over revenue by assessing the results of the procedures performed, including the appropriateness of the determination of locations to perform procedures. /s/ KPMG LLP We have served as the Company’s auditor since 2012. Santa Clara, California January 26, 2024 52 Table of Contents TD SYNNEX CORPORATION CONSOLIDATED BALANCE SHEETS (currency and share amounts in thousands, except par value) November 30, 2023 November 30, 2022 ASSETS Current assets: Cash and cash equivalents $ 1,033,776 $ 522,604 Accounts receivable, net 10,297,814 9,420,999 Receivables from vendors, net 964,334 819,135 Inventories 7,146,274 9,066,620 Other current assets 642,238 671,507 Total current assets 20,084,436 20,500,865 Property and equipment, net 450,024 421,064 Goodwill 3,904,170 3,803,850 Intangible assets, net 4,244,314 4,422,877 Other assets, net 729,870 585,342 Total assets $ 29,412,814 $ 29,733,998 LIABILITIES AND EQUITY Current liabilities: Borrowings, current $ 983,585 $ 268,128 Accounts payable 13,347,281 13,988,980 Other accrued liabilities 2,407,896 2,171,613 Total current liabilities 16,738,762 16,428,721 Long-term borrowings 3,099,193 3,835,665 Other long-term liabilities 498,656 501,856 Deferred tax liabilities 893,021 942,250 Total liabilities 21,229,632 21,708,492 Commitments and contingencies (Note 17) Stockholders’ equity: Preferred stock, $ 0.001 par value, 5,000 shares authorized, no shares issued or outstanding — — Common stock, $ 0.001 par value, 200,000 shares authorized, 99,012 and 98,696 shares issued as of November 30, 2023 and 2022, respectively 99 99 Additional paid-in capital 7,435,274 7,374,100 Treasury stock, 10,343 and 4,049 shares as of November 30, 2023 and 2022, respectively ( 949,714 ) ( 337,217 ) Accumulated other comprehensive loss ( 507,248 ) ( 719,710 ) Retained earnings 2,204,771 1,708,234 Total stockholders' equity 8,183,182 8,025,506 Total liabilities and equity $ 29,412,814 $ 29,733,998 (Amounts may not add or compute due to rounding) The accompanying Notes are an integral part of these Consolidated Financial Statements. 53 Table of Contents TD SYNNEX CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (currency and share amounts in thousands, except per share amounts) Fiscal Years Ended November 30, 2023 2022 2021 Revenue $ 57,555,416 $ 62,343,810 $ 31,614,169 Cost of revenue ( 53,598,587 ) ( 58,443,611 ) ( 29,724,635 ) Gross profit 3,956,829 3,900,199 1,889,534 Selling, general and administrative expenses ( 2,672,562 ) ( 2,627,007 ) ( 1,154,166 ) Acquisition, integration and restructuring costs ( 206,235 ) ( 222,319 ) ( 112,150 ) Operating income 1,078,032 1,050,873 623,218 Interest expense and finance charges, net ( 288,318 ) ( 222,578 ) ( 157,835 ) Other (expense) income, net ( 206 ) ( 1,165 ) 1,102 Income before income taxes 789,508 827,130 466,485 Provision for income taxes ( 162,597 ) ( 175,823 ) ( 71,416 ) Net income $ 626,911 $ 651,307 $ 395,069 Earnings per common share: Basic $ 6.72 $ 6.79 $ 6.28 Diluted $ 6.70 $ 6.77 $ 6.24 Weighted-average common shares outstanding: Basic 92,572 95,225 62,239 Diluted 92,853 95,509 62,698 (Amounts may not add or compute due to rounding) The accompanying Notes are an integral part of these Consolidated Financial Statements. 54 Table of Contents TD SYNNEX CORPORATION CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (currency in thousands) Fiscal Years Ended November 30, 2023 2022 2021 Net income $ 626,911 $ 651,307 $ 395,069 Other comprehensive income (loss): Unrealized gains on cash flow hedges during the period, net of tax expense of ($ 235 ), ($ 11,457 ) and $( 2,155 ) for fiscal years ended November 30, 2023, 2022 and 2021, respectively. 702 35,046 8,747 Reclassification of net (gains) losses on cash flow hedges to net income, net of tax expense (benefit) of $ 2,623 , ($ 6,517 ) and ($ 10,278 ) for fiscal years ended November 30, 2023, 2022 and 2021, respectively. ( 6,871 ) 19,926 31,837 Total change in unrealized (losses) gains on cash flow hedges, net of taxes ( 6,169 ) 54,972 40,584 Foreign currency translation adjustments and other, net of tax benefit (expense) of $ 7,160 , $ 3,192 and $( 635 ) for fiscal years ended November 30, 2023, 2022 and 2021, respectively 219,209 ( 438,488 ) ( 186,020 ) Reclassification of net foreign currency translation adjustment realized upon sale of foreign subsidiary, net of tax expense of $ 0 for the fiscal year ended November 30, 2023 ( 578 ) — — Total change in foreign currency translation adjustments and other, net of taxes 218,631 ( 438,488 ) ( 186,020 ) Other comprehensive income (loss) 212,462 ( 383,516 ) ( 145,436 ) Comprehensive income $ 839,373 $ 267,791 $ 249,633 (Amounts may not add or compute due to rounding) The accompanying Notes are an integral part of these Consolidated Financial Statements. 55 Table of Contents TD SYNNEX CORPORATION CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (currency and share amounts in thousands) Common stock Treasury stock Shares Amount Additional paid-in capital Shares Amount Accumulated other comprehensive income (loss) Retained earnings Total stockholders' equity Balances, November 30, 2020 53,671 $ 54 $ 1,591,536 2,538 $ ( 191,216 ) $ ( 194,571 ) $ 3,133,058 $ 4,338,860 Separation of Concentrix — — — — — 3,813 ( 2,305,982 ) ( 2,302,169 ) Share-based compensation — — 53,192 — — — — 53,192 Issuance of common stock on exercise of options, for employee stock purchase plan and vesting of restricted stock, net of shares withheld for employee taxes 533 — 12,789 95 ( 9,923 ) — — 2,866 Issuance of common stock on Tech Data merger, net of issuance costs 44,000 44 5,613,820 — — — — 5,613,864 Cash dividends declared ($ 0.80 per share) — — — — — — ( 50,272 ) ( 50,272 ) Other comprehensive loss — — — — — ( 145,436 ) — ( 145,436 ) Net income — — — — — — 395,069 395,069 Balances, November 30, 2021 98,204 98 7,271,337 2,633 ( 201,139 ) ( 336,194 ) 1,171,873 7,905,975 Share-based compensation — — 91,167 — — — — 91,167 Issuance of common stock on exercise of options, for employee stock purchase plan and vesting of restricted stock, net of shares withheld for employee taxes 492 1 8,234 119 ( 11,062 ) — — ( 2,827 ) Repurchases of common stock — — — 1,297 ( 125,016 ) — — ( 125,016 ) Cash dividends declared ($ 1.20 per share) — — — — — — ( 114,946 ) ( 114,946 ) Other comprehensive loss — — — — — ( 383,516 ) — ( 383,516 ) Purchase of noncontrolling interest — — 3,362 — — — — 3,362 Net income — — — — — — 651,307 651,307 Balances, November 30, 2022 98,696 99 7,374,100 4,049 ( 337,217 ) ( 719,710 ) 1,708,234 8,025,506 Share-based compensation — — 84,983 — — — — 84,983 Issuance of common stock and reissuance of treasury stock on exercise of options, for employee stock purchase plan and vesting of restricted stock, net of shares withheld for employee taxes 316 — ( 23,809 ) ( 176 ) 13,729 — — ( 10,080 ) Repurchases of common stock — — — 6,470 ( 626,226 ) — — ( 626,226 ) Cash dividends declared ($ 1.40 per share) — — — — — — ( 130,374 ) ( 130,374 ) Other comprehensive income — — — — — 212,462 — 212,462 Net income — — — — — — 626,911 626,911 Balances, November 30, 2023 99,012 $ 99 $ 7,435,274 10,343 $ ( 949,714 ) $ ( 507,248 ) $ 2,204,771 $ 8,183,182 (Amounts may not add or compute due to rounding) The accompanying Notes are an integral part of these Consolidated Financial Statements. 56 Table of Contents TD SYNNEX CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (currency in thousands) Fiscal Years Ended November 30, 2023 2022 2021 Cash flows from operating activities: Net income $ 626,911 $ 651,307 $ 395,069 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization 418,315 463,365 151,664 Share-based compensation 84,983 91,167 53,192 Provision for doubtful accounts 44,742 34,741 ( 7,544 ) Deferred income taxes ( 91,572 ) ( 92,381 ) ( 322 ) Impairment of long-lived assets — 4,726 22,166 Other ( 2,757 ) 4,376 9,109 Changes in operating assets and liabilities, net of the impact of Concentrix separation and acquisition of businesses: Accounts receivable, net ( 656,630 ) ( 1,497,995 ) ( 517,224 ) Receivables from vendors, net ( 127,046 ) 241,242 ( 113,602 ) Inventories 2,032,202 ( 2,636,759 ) ( 1,030,110 ) Accounts payable ( 971,747 ) 2,375,952 1,854,887 Other operating assets and liabilities 49,972 310,655 ( 7,498 ) Net cash provided by (used in) operating activities 1,407,373 ( 49,604 ) 809,787 Cash flows from investing activities: Purchases of property and equipment ( 150,007 ) ( 117,049 ) ( 54,892 ) Acquisition of businesses, net of cash acquired — — ( 907,093 ) Other ( 6,404 ) 1,541 9,637 Net cash used in investing activities ( 156,411 ) ( 115,508 ) ( 952,348 ) Cash flows from financing activities: Dividends paid ( 130,374 ) ( 114,946 ) ( 50,272 ) Proceeds from issuance of common stock and reissuances of treasury stock 8,846 8,234 12,789 Repurchases of common stock ( 620,659 ) ( 125,016 ) — Repurchases of common stock for tax withholdings on equity awards ( 18,926 ) ( 11,062 ) ( 9,923 ) Net (repayments) borrowings on revolving credit loans ( 2,571 ) 96,592 ( 417,072 ) Principal payments on long-term debt ( 74,408 ) ( 128,728 ) ( 2,277,913 ) Net transfer of cash and cash equivalents to Concentrix — — ( 149,948 ) Borrowings on long-term debt 51,837 — 2,545,535 Cash paid for debt issuance costs — — ( 42,254 ) Other 375 ( 665 ) ( 3,562 ) Net cash used in financing activities ( 785,880 ) ( 275,591 ) ( 392,620 ) Effect of exchange rate changes on cash, cash equivalents and restricted cash 45,838 ( 31,354 ) ( 38,776 ) Net increase (decrease) in cash, cash equivalents and restricted cash 510,920 ( 472,057 ) ( 573,957 ) Cash, cash equivalents and restricted cash at beginning of year 522,856 994,913 1,568,870 Cash, cash equivalents and restricted cash at end of year $ 1,033,776 $ 522,856 $ 994,913 Supplemental disclosures of cash flow information: Interest paid on borrowings $ 318,236 $ 220,760 $ 116,983 Income taxes paid $ 282,512 $ 178,035 $ 173,547 Supplemental disclosure of non-cash investing and financing activities: Issuance of stock to acquire business $ — $ — $ 5,614,400 Net assets transferred to Concentrix $ — $ — $ 2,322,598 (Amounts may not add or compute due to rounding) The accompanying Notes are an integral part of these Consolidated Financial Statements. 57 Table of Contents TD SYNNEX CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (currency and share amounts in thousands unless otherwise noted, except per share amounts) NOTE 1— ORGANIZATION AND BASIS OF PRESENTATION: TD SYNNEX Corporation (together with its subsidiaries, herein referred to as “SYNNEX”, “TD SYNNEX” or the “Company”) is a leading global distributor and solutions aggregator for the information technology ("IT") ecosystem , headquartered in Fremont, California and Clearwater, Florida and has operations in North and South America, Europe and Asia-Pacific and Japan. On December 1, 2020, the Company completed the previously announced separation of its customer experience services business (the “Separation”), in a tax-free transaction for federal income tax purposes, which was accomplished by the distribution of one hundred percent of the outstanding common stock of Concentrix Corporation (“Concentrix”). SYNNEX stockholders received one share of Concentrix common stock for every share of SYNNEX common stock held at the close of business on the record date. The Company distributed 51,602 shares of Concentrix common stock to its stockholders. Concentrix is now an independent public company trading under the symbol “CNXC” on the Nasdaq Stock Market. After the Separation, SYNNEX did not beneficially own any shares of Concentrix’ common stock. Beginning December 1, 2020, the Company no longer consolidates Concentrix within its financial results or reflects the financial results of Concentrix within its continuing results of operations. 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. The combined company is referred to as TD SYNNEX. The Company operates on a fiscal year that ends on November 30. Certain columns and rows may not add or compute due to the use of rounded numbers. NOTE 2— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles (“GAAP”) in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expense during the reporting period. The Company evaluates these estimates on a regular basis and bases them on historical experience and on various assumptions that the Company believes are reasonable. Actual results could differ from the estimates. Principles of Consolidation The Consolidated Financial Statements include the accounts of the Company, its wholly-owned subsidiaries, majority-owned subsidiaries in which no substantive participating rights are held by minority stockholders and variable interest entities if the Company is the primary beneficiary. All intercompany accounts and transactions have been eliminated. The Consolidated Financial Statements include 100 % of the assets and liabilities of majority-owned subsidiaries. Investments in 20 % through 50 % owned affiliated companies are accounted under the equity method where the Company exercises significant influence over operating and financial affairs of the investee and is not the primary beneficiary. Investments in less than 20 % owned companies, where the Company does not have significant influence, are recorded at cost or fair value based on whether the equity securities have readily determinable fair values. 58 Table of Contents Segment Reporting Operating segments are based on components of the Company that engage in business activity that earn revenue and incur expenses and (a) whose operating results are regularly reviewed by the Company’s chief operating decision maker to make decisions about resource allocation and performance and (b) for which discrete financial information is available. The Company’s chief executive officer, who is also the 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, the Company operates in three reportable segments based on its geographic regions: the Americas, Europe and APJ. Cash and Cash Equivalents The Company considers all highly liquid debt instruments purchased with an original maturity or remaining maturity at the date of purchase of three months or less to be cash equivalents. Cash equivalents consist principally of money market deposit accounts and money market funds that are stated at cost, which approximates fair value. The Company is exposed to credit risk in the event of default by financial institutions to the extent that cash balances with financial institutions are in excess of amounts that are insured. Accounts Receivable The Company maintains an allowance for doubtful accounts as an estimate to cover the future expected credit losses resulting from uncertainty regarding collections from customers or OEM vendors to make payments for outstanding balances. In estimating the required allowance, the Company takes into consideration historical credit losses, current conditions and reasonable and supportable forecasts. Adjustments to historical loss information are made for differences in current conditions as well as changes in forecasted macroeconomic conditions, such as changes in unemployment rates or gross domestic product growth. Expected credit losses are estimated on a pool basis when similar risk characteristics exist using an age-based reserve model. Receivables that do not share risk characteristics are evaluated on an individual basis. The Company has uncommitted supply-chain financing programs with global financial institutions under which trade accounts receivable of certain customers and their affiliates may be acquired, without recourse, by the financial institutions. Available capacity under these programs is dependent on the level of the Company’s trade accounts receivable with these customers and the financial institutions’ willingness to purchase such receivables. In addition, certain of these programs also require that the Company continue to service, administer and collect the sold accounts receivable. As of November 30, 2023, and 2022, accounts receivable sold to and held by the financial institutions under these programs were $ 864.6 million and $ 1.4 billion, respectively. Discount fees related to the sale of trade accounts receivable under these facilities are included in “Interest expense and finance charges, net” in the Consolidated Statements of Operations. During the fiscal years ended November 30, 2023, 2022 and 2021, discount fees were $ 51.1 million, $ 26.2 million and $ 4.7 million, respectively. Inventories Inventories are stated at the lower of cost and net realizable value. Cost is computed based on the weighted-average method. Inventories are comprised of finished goods and work-in-process. Finished goods include products purchased for resale, system components purchased for both resale and for use in the Company’s systems design and integration business and completed systems. Work-in-process inventories are not material to the Consolidated Financial Statements. Derivative Financial Instruments The Company accounts for its derivative instruments as either assets or liabilities and carries them at fair value. For derivative instruments that hedge the exposure to variability in expected future cash flows that are designated as cash flow hedges, the gain or loss on the derivative instrument is reported as a component of “Accumulated other comprehensive income (loss)” in stockholders’ equity and reclassified into earnings in the same line associated with the hedged transactions, in the same period or periods during which the hedged transaction affects earnings. To receive hedge accounting treatment, cash flow hedges must be highly effective in offsetting changes to expected future cash flows on hedged transactions. The company classifies cash flows related to the settlement of its cash flow hedges as operating activities in the Consolidated Statements of Cash Flows. 59 Table of Contents For derivative instruments that hedge a portion of the Company's net investment in foreign-currency denominated operations that are designated as net investment hedges, the gain or loss on the derivative instrument is reported as a component of “Accumulated other comprehensive income (loss)” in stockholders’ equity until the sale or substantially complete liquidation of the underlying assets of the Company's investment. The initial fair value of hedge components excluded from the assessment of effectiveness is recognized in the Consolidated Statement of Operations under a systematic and rational method over the life of the hedging instrument. The excluded component is recognized in "Interest expense and finance charges, net" on the Consolidated Statement of Operations. The Company classifies cash flows related to the settlement of its net investment hedges as investing activities in the Consolidated Statements of Cash Flows. For derivative instruments that are not designated as hedges, gains and losses resulting from changes in fair value on derivative instruments are reported in the Consolidated Statements of Operations in the current period. Property and Equipment Property and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method based upon the shorter of the estimated useful lives of the assets, or the lease term of the respective assets, if applicable. Maintenance and repairs are charged to expense as incurred, and improvements are capitalized. When assets are retired or otherwise disposed of, the cost and accumulated depreciation and amortization are removed from the accounts and any resulting gain or loss is reflected in operations in the period realized. The Company’s capitalized software has been obtained or developed for internal use only. Development and acquisition costs are capitalized for computer software only when management authorizes and commits to funding a computer software project through the approval of a capital expenditure requisition, and the software project is either for the development of new software, to increase the life of existing software or to add significantly to the functionality of existing software. Once these requirements have been met, capitalization would begin at the point that conceptual formulation, evaluation, design and testing of possible software project alternatives have been completed. Capitalization ceases when the software project is substantially complete and ready for its intended use. The ranges of estimated useful lives for property and equipment categories are as follows: Equipment and Furniture 3 - 10 years Software 3 - 10 years Leasehold Improvements 2 - 15 years Buildings and Building Improvements 10 - 40 years Business Combinations The purchase price is allocated to the assets acquired, liabilities assumed, and noncontrolling interests in the acquired entity generally based on their fair values at the acquisition date. The excess of the fair value of purchase consideration over the fair value of these assets acquired, liabilities assumed and noncontrolling interests in the acquired entity is recorded as goodwill. The primary items that generate goodwill include the value of the synergies between the acquired entity and the Company and the value of the acquired assembled workforce, neither of which qualify for recognition as an intangible asset. Amounts recorded in a business combination may change during the measurement period, which is a period not to exceed one year from the date of acquisition, as additional information about conditions existing at the acquisition date becomes available. The Company includes the results of operations of the acquired business in the Consolidated Financial Statements prospectively from the date of acquisition. Acquisition-related charges are recognized separately from the business combination and are expensed as incurred. These charges primarily include direct third-party professional and legal fees, and integration-related costs. Goodwill and Intangible Assets The values assigned to intangible assets include estimates and judgment regarding expectations for the length of customer relationships acquired in a business combination. Included within intangible assets is an indefinite lived trade name intangible asset. The Company's indefinite lived trade name intangible asset is considered a single unit of accounting and is tested for impairment at the consolidated level annually as of September 1, and more frequently if events or changes in circumstances indicate that it is more likely than not that the asset is impaired. Other purchased intangible assets are amortized over the useful lives based on estimates of the use of the economic benefit of the asset or on the straight-line amortization method. 60 Table of Contents The Company allocates goodwill to reporting units based on the reporting unit expected to benefit from the business combination and tests for impairment annually as of September 1, or more frequently if events or changes in circumstances indicate that it may be impaired. Goodwill is tested for impairment at the reporting unit level by first performing a qualitative assessment to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying value. The factors that are considered in the qualitative analysis include macroeconomic conditions, industry and market considerations, cost factors such as increases in product cost, labor, or other costs that would have a negative effect on earnings and cash flows; and other relevant entity-specific events and information. The Company also has the option to bypass the qualitative assessment for any reporting unit in any period. If the reporting unit does not pass or the Company chooses to bypass the qualitative assessment, then the reporting unit’s carrying value is compared to its fair value. The fair values of the reporting units are estimated using market and discounted cash flow approaches. The assumptions used in the market approach are based on the value of a business through an analysis of sales and other multiples of guideline companies and recent sales or offerings of a comparable entity. The assumptions used in the discounted cash flow approach are based on historical and forecasted revenue, operating costs, working capital requirements, future economic conditions, discount rates and other relevant factors. Goodwill is considered impaired if the carrying value of the reporting unit exceeds its fair value and the excess is recognized as an impairment loss. No goodwill impairment has been identified for any of the years presented. Finite-lived intangible assets consist primarily of customer relationships, vendor lists and other intangible assets. Amortization is based on the pattern in which the economic benefits of the intangible assets will be consumed or on a straight-line basis when the consumption pattern is not apparent over the following useful lives: Customer Relationships 4 - 15 years Vendor Lists 10 years Other Intangible Assets 1 - 10 years Impairment of Long-Lived Assets The Company reviews the recoverability of its long-lived assets, including finite-lived intangible assets, property and equipment, right-of-use ("ROU") assets and certain other assets, when events or changes in circumstances occur that indicate the carrying value of the asset or asset group may not be recoverable. The assessment of possible impairment is based on the Company’s ability to recover the carrying value of the asset or asset group from the expected future pre-tax cash flows, undiscounted and without interest charges, of the related operations. If these cash flows are less than the carrying value of such assets, an impairment loss is recognized for the difference between estimated fair value and carrying value. Leases The Company enters into leases as a lessee for property and equipment in the ordinary course of business. When procuring goods or services, or upon entering into a contract with its customers, the Company determines whether an arrangement contains a lease at its inception. As part of that evaluation, the Company considers whether there is an implicitly or explicitly identified asset in the arrangement and whether the Company, as the lessee, or the customer, if the Company is the lessor, has the right to control the use of that asset. When the Company is the lessee, all leases with a term of more than 12 months are recognized as ROU assets and associated lease liabilities in the Consolidated Balance Sheet. Lease liabilities are recorded at the lease commencement date and determined using the present value of the lease payments not yet paid, at the Company’s incremental borrowing rate, which approximates the rate at which the Company would borrow on a secured basis in the country where the lease was executed. The interest rate implicit in the lease is generally not determinable in transactions where the Company is the lessee. The ROU asset equals the lease liability adjusted for any initial direct costs, prepaid rent and lease incentives. The Company’s variable lease payments generally relate to payments tied to various indexes, non-lease components and payments above a contractual minimum fixed amount. Operating leases are included in other assets, net, other accrued liabilities and other long-term liabilities in the Consolidated Balance Sheet. Substantially all of the Company's leases are classified as operating leases and the Company’s finance leases are not material. The lease term includes options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. The Company made a policy election to not recognize leases with a lease term of 12 months or less in the Consolidated Balance Sheet. Lease expenses are recorded within selling, general, and administrative expenses in the Consolidated Statements of Operations. Operating lease payments are presented within “Cash flows from operating activities” in the Consolidated Statements of Cash Flows. 61 Table of Contents Concentration of Credit Risk Financial instruments that potentially subject the Company to significant concentration of credit risk consist principally of cash and cash equivalents, accounts receivable, receivables from vendors and derivative instruments. The Company’s cash and cash equivalents and derivative instruments are transacted and maintained with financial institutions with high credit standing, and their compositions and maturities are regularly monitored by management. Through November 30, 2023, the Company has not experienced any material credit losses on such deposits and derivative instruments. Accounts receivable include amounts due from customers, including related party customers. Receivables from vendors, net, includes amounts due from OEM vendors primarily in the technology industry. The Company performs ongoing credit evaluations of its customers’ financial condition and limits the amount of credit extended when deemed necessary, but generally requires no collateral. The Company also maintains allowances for potential credit losses. In estimating the required allowances, the Company takes into consideration the overall quality and aging of its receivable portfolio, the existence of credit insurance and specifically identified customer and vendor risks. The following table provides revenue generated from products purchased from vendors that exceeded 10% of our consolidated revenue for the periods indicated (as a percent of consolidated revenue): Twelve Months Ended November 30, 2023 November 30, 2022 November 30, 2021 Apple, Inc. 11 % 11 % N/A (1) HP Inc. N/A ( 1 ) 10 % 12 % __________________ ( 1) Revenue generated from products purchased from this vendor was less than 10% of consolidated revenue during the period presented. One customer accounted for 11 %, 10 % and 17 % of the Company’s total revenue in fiscal years 2023, 2022 and 2021, respectively. As of November 30, 2023 and 2022, no single customer comprised more than 10% of the consolidated accounts receivable balance. Book Overdrafts Book overdrafts, representing checks issued in excess of balances on deposit in the applicable bank accounts and which have not been paid by the applicable bank at the balance sheet date are classified as “Borrowings, current” in the Company’s Consolidated Balance Sheets. Under the terms of the Company’s banking arrangements, the respective financial institutions are not legally obligated to honor the book overdraft balances. The Company’s policy is to report the change in book overdrafts as a financing activity in the Consolidated Statements of Cash Flows. Revenue Recognition The Company generates revenue primarily from the sale of various IT products. The Company recognizes revenues from the sale of IT hardware and software as control is transferred to customers, which is at the point in time when the product is shipped or delivered. The Company accounts for a contract with a customer when it has written approval, the contract is committed, the rights of the parties, including payment terms, are identified, the contract has commercial substance and consideration is probable of collection. Binding purchase orders from customers together with agreement to the Company's terms and conditions of sale by way of an executed agreement or other signed documents are considered to be the contract with a customer. Products sold by the Company are delivered via shipment from the Company’s facilities, drop-shipment directly from the vendor, or by electronic delivery of software products. In situations where arrangements include customer acceptance provisions, revenue is recognized when the Company can objectively verify the products comply with specifications underlying acceptance and the customer has control of the products. Revenue is presented net of taxes collected from customers and remitted to government authorities. The Company generally invoices a customer upon shipment, or in accordance w ith specific contractual provisions. Payments are due as per contract terms and do not contain a significant financing component. In relation to product support, supply chain management and other services performed by the Company, revenue is recognized over time as the services are performed. Service revenues represents less than 10 % of the total revenue for the periods presented. 62 Table of Contents Provisions for sales returns and allowances are estimated based on historical data and are recorded concurrently with the recognition of revenue. A liability is recorded at the time of sale for estimated product returns based upon historical experience and an asset is recognized for the amount expected to be recorded in inventory upon product return. These provisions are reviewed and adjusted periodically by the Company. Revenue is reduced for early payment discounts and volume incentive rebates offered to customers, which are considered variable consideration, at the time of sale based on an evaluation of the contract terms and historical experience. The Company recognizes revenue on a net basis on certain contracts, where the Company’s performance obligation is to arrange for the products or services to be provided by another party or the rendering of logistics services for the delivery of inventory for which the Company does not assume the risks and rewards of ownership, by recognizing the margins earned in revenue with no associated cost of revenue. Such arrangements include supplier service contracts, post-contract software support services, cloud computing and software as a service arrangements, certain fulfillment contracts, extended warranty contracts and certain of the Company's systems design and integration solutions arrangements which operate under a customer-owned procurement model. The Company considers shipping and handling activities as costs to fulfill the sale of products. Shipping revenue is included in revenue when control of the product is transferred to the customer, and the related shipping and handling costs are included in cost of revenue. The Company disaggregates its operating segment revenue by geography, which the Company believes provides a meaningful depiction of the nature of its revenue. Disaggregated revenue disclosure is presented in Note 12 – Segment Information. Cost of Revenue Cost of revenue includes the product price paid to OEM suppliers, net of any incentives, rebates, price protection and purchase discounts received from the OEM suppliers. Cost of revenue also consists of provisions for inventory losses and write-downs, shipping and handling costs and royalties due to OEM vendors. In addition, cost of revenue includes the cost of materials, labor and overhead and warranty for design and integration activities. Selling, General and Administrative Expenses Selling, general and administrative expenses are charged to income as incurred. Expenses of promoting and selling products and services are classified as selling expense and include such items as compensation, sales commissions and travel. General and administrative expenses include such items as compensation, cost of warehouse, delivery centers and other non-integration facilities, legal and professional costs, office supplies, non-income taxes, insurance and utility expenses. In addition, selling, general and administrative expenses include other operating items such as allowances for credit losses, depreciation and amortization of intangible assets. OEM Supplier Programs Funds received from OEM suppliers for volume promotion programs, price protection and product rebates are recorded as adjustments to cost of revenue and/or the carrying value of inventories, as appropriate. Where there is a binding agreement, the Company tracks vendor promotional programs for volume discounts on a program-by-program basis and records them as a reduction to cost of revenue based on a systematic and rational allocation. The Company monitors the balances of vendor receivables on a quarterly basis and adjusts the balances due for differences between expected and actual sales volume. Vendor receivables are generally collected through reductions authorized by the vendor to accounts payable. Funds received for specific marketing and infrastructure reimbursements, net of related costs, are recorded as adjustments to “Selling, general and administrative expenses,” and any excess reimbursement amount is recorded as an adjustment to cost of revenue. Royalties The Company’s software product purchases include products licensed from OEM vendors, which are subsequently distributed to resellers. Royalties to OEM vendors are accrued and recorded in cost of revenue when software products are shipped and revenue is recognized. 63 Table of Contents Warranties The Company’s OEM suppliers generally warrant the products distributed by the Company and allow returns of defective products. The Company generally does not independently warrant the products it distributes; however, the Company does warrant the following: (1) products that it builds to order from components purchased from other sources, (2) services with regard to products integrated for its customers; and (3) products sold in countries where the Company is responsible for defective product as a matter of law. The time period required by law in certain countries exceeds the warranty period provided by the manufacturer. The Company is obligated to provide warranty protection for sales of certain IT products within the European Union (“EU”) for up to two years as required under the EU directive where vendors have not affirmatively agreed to provide pass-through protection. Warranty expense and the accrual for warranty costs were not material to the Company’s Consolidated Financial Statements for any of the periods presented. Advertising Costs related to advertising and product promotion expenditures are charged to “Selling, general and administrative expenses” as incurred and are primarily offset by OEM marketing reimbursements. Net costs related to advertising and promotion expenditures were not material to the Company’s Consolidated Financial Statements for any of the periods presented. Income Taxes The asset and liability method is used in accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for the expected tax consequences of temporary differences between the tax bases of assets and liabilities and their reported amounts in the financial statements using enacted tax rates and laws that will be in effect when the difference is expected to reverse. Tax on global low-taxed intangible income is accounted for as a current expense in the period in which the income is included in a tax return using the “period cost” method. Valuation allowances are provided against deferred tax assets that are not likely to be realized. The Company recognizes tax benefits from uncertain tax positions only if that tax position is more likely than not to be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon settlement. The Company recognizes interest and penalties related to unrecognized tax benefits in the provision for income taxes. Foreign Currency Translations The financial statements of the Company’s international subsidiaries whose functional currencies are the local currencies are translated into U.S. dollars for consolidation as follows: assets and liabilities at the exchange rate as of the balance sheet date, stockholders’ equity at the historical rates of exchange, and income and expense amounts at the average exchange rate for the month. Translation adjustments resulting from the translation of the subsidiaries’ accounts are included in “Accumulated other comprehensive income (loss)” in stockholders’ equity. Transactions denominated in currencies other than the applicable functional currency are converted to the functional currency at the exchange rate on the transaction date. At period end, monetary assets and liabilities are remeasured to the functional currency using exchange rates in effect at the balance sheet date. Non-monetary assets and liabilities are remeasured at historical exchange rates. Gains and losses resulting from foreign currency transactions are included in earnings within “Cost of revenue” and “Other (expense) income, net.” Comprehensive Income Comprehensive income is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. The primary components of comprehensive income for the Company include net income, foreign currency translation adjustments arising from the consolidation of the Company’s international subsidiaries and unrealized gains and losses on cash flow hedges. 64 Table of Contents Share-based Compensation The Company accounts for share-based payment transactions in which the Company receives services in exchange for equity instruments of the Company. Share-based compensation cost for stock options, restricted stock awards and units, performance-based restricted stock units and employee stock purchase plans is determined based on the fair value at the grant date. The Company recognizes share-based compensation cost as expense for awards other than its performance-based restricted stock units ratably on a straight-line basis over the requisite service period. The Company recognizes share-based compensation cost associated with its performance-based restricted stock units over the requisite service period if it is probable that the performance conditions will be satisfied. The Company accounts for expense reductions that result from the forfeiture of unvested awards in the period that the forfeitures occur. Earnings per Common Share Earnings per share is calculated using the two-class method. The two-class method is an earnings allocation proportional to the respective ownership among holders of common stock and participating securities. Basic earnings per common share is computed by dividing net income attributable to the Company’s common stockholders by the weighted-average of common shares outstanding during the period. Diluted earnings per common share also considers the dilutive effect of in-the-money stock options and restricted stock units, calculated using the treasury stock method. Treasury Stock Repurchases of shares of common stock are accounted for at cost, which includes brokerage fees and excise taxes, and are included as a component of stockholders’ equity in the Consolidated Balance Sheets. Shares repurchased by the Company are held in treasury for general corporate purposes, including issuances under stock incentive plans. The reissuance of shares from treasury stock is based on the weighted average purchase price of the shares. Reclassifications Certain reclassifications have been made to prior period amounts in the Consolidated Financial Statements to conform to the current period presentation. These reclassifications did not have a material impact on previously reported amounts. Recently Adopted Accounting Pronouncements In March 2020, the FASB issued ASU 2020-04 which provides optional guidance for a limited time to ease the potential burden in accounting for or recognizing the effects of reference rate reform, particularly, the risk of cessation of the London Interbank Offered Rate (“LIBOR”) on financial reporting. The guidance provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments are elective and were effective upon issuance for all entities through December 31, 2022, which was extended through December 31, 2024 per ASU 2022-06 which the FASB issued in December 2022. On May 22, 2023, the TD SYNNEX Credit Agreement (as defined below) was amended to replace LIBOR with the Secured Overnight Financing Rate ("SOFR") as its benchmark rate (see Note 11 - Borrowings for further discussion of the TD SYNNEX Credit Agreement). The adoption of this new guidance did not have any material impacts for the Company. Recently Issued Accounting Pronouncements In September 2022, the FASB issued an accounting standards update, ASU 2022-04, which will require new enhanced disclosures by the buyer in supplier finance programs. Disclosures will include key terms of the program, including payment terms, along with the amount of related obligations, the financial statement caption that includes such obligations, and a rollforward of activity related to the obligations during the period. The new accounting standard must be adopted retrospectively to the earliest comparative period presented, except for the rollforward requirement, which should be applied prospectively. The accounting standard is effective for the Company beginning with the quarter ending February 29, 2024, except for the rollforward requirement which is effective for the quarter ending February 28, 2025. Early adoption is permitted. While the new accounting standard is not expected to have an impact on the Company's financial condition, results of operations or cash flows, the Company will include disclosures related to its supplier finance program obligations in the notes to the consolidated financial statements. The Company is finalizing its evaluation of the terms of its arrangements with certain of its suppliers and currently estimates that approximately $ 2.6 billion to $ 2.8 billion of balances included in "Accounts payable" on the Consolidated Balance Sheet as of November 30, 2023 are within the scope of the standard. 65 Table of Contents In November 2023, the FASB issued an accounting standards update, ASU 2023-07, which requires the following enhanced segment disclosures on an annual and interim basis: (1) significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, (2) other segment items by reportable segment and a description of its composition, and (3) the title of the chief operating decision maker, an explanation of how they use the reported measures of segment profit/loss in assessing segment performance and decide how to allocate resources, as well as clarifications if they use more than one measure of a segment’s profit or loss in assessing segment performance. The amendments in this ASU are effective for annual periods beginning after December 15, 2023, which for the Company would be for the fiscal year ended November 30, 2025, and for subsequent interim periods. Early adoption is permitted. The Company is currently evaluating the impact the new accounting standard will have on its segment reporting disclosures in the notes to the consolidated financial statements. In December 2023, the FASB issued an accounting standards update, ASU 2023-09, which requires enhanced income tax disclosures. The enhanced disclosures required include disclosure of specific categories and disaggregation of information in the rate reconciliation table. The ASU also requires disclosure of disaggregated information related to income taxes paid, income or loss from continuing operations before income tax expense or benefit, and income tax expense or benefit from continuing operations. The amendments in this ASU are effective for annual periods beginning after December 15, 2024, which for the Company would be the fiscal year ended November 30, 2026. Early adoption is permitted and the amendments should be applied on a prospective basis. Retrospective application is permitted. The Company is currently evaluating the impact the new accounting standard will have on its income tax disclosures in the notes to the consolidated financial statements. NOTE 3— ACQUISITIONS: Tech Data Merger On September 1, 2021, pursuant to the terms of the Merger Agreement, the Company acquired all the outstanding shares of common stock of Tiger Parent (AP) Corporation, the parent corporation of Tech Data, for an aggregate purchase price of $ 7.2 billion, comprised of $ 1.6 billion in cash ($ 1.1 billion in cash after giving effect to a $ 500.0 million equity contribution by Tiger Parent Holdings, L.P., Tiger Parent (AP) Corporation’s sole stockholder and an affiliate of Apollo Global Management, Inc., to Tiger Parent (AP) Corporation prior to the effective time of the Merger) and 44 million shares of common stock of SYNNEX, valued at approximately $ 5.6 billion based on the closing price of the Company’s common stock on September 1, 2021. The Merger created a leading global distributor and solutions aggregator for the IT ecosystem. The Company used the net proceeds from the issuance of new Senior Notes, borrowings under its new credit agreement and cash on hand to fund the above payments. Additionally, the Company repaid the majority of Tech Data's outstanding debt after the Merger, including approximately $ 2.4 billion outstanding under Tech Data’s existing Asset-Based Credit Agreement and approximately $ 228.1 million of outstanding Tech Data Senior Notes. The Company accounted for the Merger as a business combination and allocated the purchase price to the fair values of Tiger Parent (AP) Corporation’s assets acquired and liabilities assumed. Included within the Company’s Consolidated Statement of Operations are estimated revenues for the years ended November 30, 2022 and 2021 of approximately $ 38 billion and $ 10 billion, respectively, from Tech Data. As the Company began integrating certain sales and other functions after the closing of the acquisition, these amounts represent an estimate of the Tech Data revenues for the fiscal years ended November 30, 2022 and 2021. It is not necessarily indicative of how the Tech Data operations would have performed on a stand-alone basis. As a result of certain integration activities subsequent to the date of acquisition, it is impracticable to disclose estimated revenues from Tech Data for fiscal year 2023 or net income from Tech Data for the period subsequent to the acquisition date. 66 Table of Contents The following table presents unaudited supplemental pro forma information as if the Merger had occurred at the beginning of fiscal 2020, after giving effect to certain adjustments related to the transaction. The pro forma results exclude any benefits that may result from potential cost savings and certain non-recurring costs. As a result, the pro forma information below does not purport to present what actual results would have been had the Merger been consummated on the date indicated and it is not necessarily indicative of the results of operations that may result in the future. (Unaudited) Fiscal Year Ended November 30, 2021 Revenue $ 60,623,568 Net income 519,688 Adjustments reflected in the pro forma results include the following: • Amortization of acquired intangible assets • Interest costs associated with the Merger • Removal of certain non-recurring transaction costs of $ 22.3 million and non-recurring financing costs of $ 47.0 million • Tax effects of adjustments based on an estimated statutory tax rate NOTE 4— ACQUISITION, INTEGRATION AND RESTRUCTURING COSTS: Acquisition, integration and restructuring costs are primarily comprised of costs related to the Merger and costs related to the Global Business Optimization 2 Program initiated by Tech Data prior to the Merger (the “GBO 2 Program”). The Merger The Company incurred acquisition, integration and restructuring costs related to the completion of the Merger, including professional services costs, personnel and other costs, long-lived assets charges and 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, as well as costs related to the settlement of c ertain outstanding long-term cash incentive awards for Tech Data upon closing of the Merger. Long-lived asset charges 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, $ 4.7 million for impairment charges recorded during fiscal year 2022, and an impairment charge of $ 22.2 million recorded during fiscal year 2021 for the write-off of capitalized costs associated with Tech Data’s tdONE program. 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 for further information) and expenses for certain restricted stock awards issued in conjunction with the Merger. In July 2023, the Company offered a voluntary severance program ("VSP") to certain co-workers in the United States as part of the Company's cost optimization efforts related to the Merger. The Company 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. 67 Table of Contents To date, acquisition and integration expenses related to the Merger were composed of the following: Fiscal Years Ended November 30, 2023 2022 2021 (currency in thousands) Professional services costs $ 20,775 $ 29,352 $ 22,288 Personnel and other costs 46,464 40,220 33,716 Long-lived assets charges and termination fees 41,812 69,053 22,166 Stock-based compensation 35,709 52,171 20,113 Voluntary severance program costs 52,091 — — Total $ 196,851 $ 190,796 $ 98,283 GBO 2 Program Prior to the Merger, Tech Data implemented its GBO 2 Program that includes investments to optimize and standardize processes and apply data and analytics to be more agile in a rapidly evolving environment, increasing productivity, profitability and optimizing net-working capital. TD SYNNEX continued this program in conjunction with the Company’s integration activities. Acquisition, integration and restructuring expenses related to the GBO 2 Program are primarily comprised of restructuring costs and other costs. Restructuring costs are comprised of severance costs and other 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. The Company incurred acquisition, integration, and restructuring costs under the GBO 2 Program of $ 9.4 million, $ 31.5 million and $ 13.9 million during the fiscal years ended November 30, 2023, 2022, and 2021, respectivel y. The GBO 2 Program was completed as of November 30, 2023. Accrued restructuring balances related to the GBO 2 Program were not material as of November 30, 2023 and 2022. NOTE 5— SHARE-BASED COMPENSATION: Overview of Stock Incentive Plans The Company’s stock incentive plans include plans adopted in 2020 and 2013 (the “TD SYNNEX Plan(s)”). The TD SYNNEX Plans, as amended, provide for the direct award or sale of shares of common stock, restricted stock awards ("RSAs"), restricted stock units ("RSUs"), the grant of options to purchase shares of common stock and the award of stock appreciation rights to employees and non-employee directors and consultants. No further grants may be made under the 2013 TD SYNNEX Plan and all outstanding awards under the 2013 TD SYNNEX Plan continue to be governed by their existing terms. As of November 30, 2023, there were 2.9 million shares of common stock authorized under the 2020 TD SYNNEX Plan available for future grants. Under the TD SYNNEX Plans, qualified employees are eligible for the grant of incentive stock options to purchase shares of common stock. Qualified employees and outside directors and consultants are eligible for the grant of non-qualified stock options, stock appreciation rights, RSAs and RSUs. The outstanding RSAs and RSUs generally vest ratably on an annual basis over a period of three to five years , with certain awards subject to other vesting periods as defined per the grant agreement. RSAs granted to qualified non-employee directors vest one fourth on a quarterly basis over a one-year period. The holders of RSAs are entitled to the same voting, dividend and other rights as the Company’s common stockholders. Certain RSUs vest subject to the achievement of individual, divisional or company-wide performance goals. The majority of these performance-based RSUs vest at the end of three-year requisite service periods, subject to the achievement of company-wide financial performance goals approved by the Compensation Committee. The exercise price for stock options will not be less than 100 % of the fair market value of the stock on the date of grant and the stock options have a contractual term of ten years . The majority of outstanding stock options vest as to one fifth of the stock underlying the stock options on the first anniversary date of the grant and the remaining vest monthly over a four-year period starting one month after the first anniversary of the date of grant. Unless terminated sooner, the 2020 TD SYNNEX Plan will terminate on March 17, 2030. 68 Table of Contents The Company recognizes share-based compensation expense for all share-based awards made to employees and outside directors, including employee stock options, RSAs, RSUs, performance-based RSUs and employee stock purchase rights, based on estimated fair values. A summary of share-based compensation expense in the Consolidated Statements of Operations for TD SYNNEX stock incentive plans is presented below: Fiscal Years Ended November 30, 2023 2022 2021 (currency in thousands) Selling, general and administrative expenses $ 49,273 $ 38,994 $ 33,078 Acquisition, integration and restructuring costs 6,526 6,514 8,289 Total share-based compensation expense $ 55,799 $ 45,508 $ 41,367 The Company settles all share-based award exercises with newly issued common shares or the reissuance of treasury shares. Valuation Assumptions The Company estimates the fair value of share-based payment awards on the grant date and recognizes as expense over the requisite service period in the Company’s Consolidated Financial Statements. The Company uses the Black-Scholes valuation model to estimate the fair value of stock options. The Black-Scholes option-pricing model was developed for use in estimating the fair value of short-lived exchange traded options that have no vesting restrictions and are fully transferable. In addition, option-pricing models require the input of highly subjective assumptions, including the option’s expected life and the price volatility of the underlying stock. The expected stock price volatility assumption is determined using historical volatility of the Company’s common stock. The fair value of stock awards is determined based on the stock price at the date of grant. For grants that do not accrue dividends or dividend equivalents, the fair value is the stock price reduced by the present value of estimated dividends over the vesting period. For performance-based RSUs, the grant-date fair value assumes that the targeted performance goals will be achieved. Over the performance period, the number of awards expected to vest will be adjusted higher or lower based on the probability of achievement of performance goals. The Company accounts for expense reductions that result from the forfeiture of unvested awards in the period that the forfeitures occur. Employee Stock Options A summary of the changes in the Company’s stock options is set forth below: Options Outstanding (shares in thousands, except per share amounts) Number of shares Weighted- average exercise price per share Balances, November 30, 2022 677 $ 72.29 Options exercised ( 83 ) 53.46 Balances, November 30, 2023 594 $ 74.93 The following assumptions were used in the Black-Scholes valuation model in fiscal years 2022 and 2021: Fiscal Years Ended November 30, 2022 2021 Expected life (years) 5.5 5.5 - 6.1 Risk free interest rate 1.73 % - 3.92 % 0.72 % - 1.16 % Expected volatility 39.10 % - 40.18 % 38.01 % - 38.85 % Dividend yield 1.13 % - 1.37 % 0.75 % - 0.88 % 69 Table of Contents There were no new stock options granted during fiscal year 2023. The weighted-average grant-date fair values of the stock options granted during fiscal years 2022 and 2021 were $ 33.57 and $ 34.37 , respectively. As of November 30, 2023, 594 thousand stock options were outstanding with a weighted-average remaining contractual term of 6.23 years, a weighted-average exercise price of $ 74.93 per option and an aggregate pre-tax intrinsic value of $ 15.4 million. As of November 30, 2023, 409 thousand options were vested and exercisable with a weighted-average remaining contractual term of 5.68 years, a weighted-average exercise price of $ 66.62 per share and an aggregate pre-tax intrinsic value of $ 13.7 million. The cash received from the exercise of stock options and the intrinsic values of stock options exercised during fiscal years 2023, 2022 and 2021 were as follows: Fiscal Years Ended November 30, 2023 2022 2021 (currency in thousands) Intrinsic value of options exercised $ 3,570 $ 4,682 $ 16,163 Cash received from exercise of options $ 4,448 $ 3,216 $ 10,541 As of November 30, 2023, the unamortized share-based compensation expense related to unvested stock options under the TD SYNNEX Plans was $ 2.1 million which will be recognized over an estimated weighted-average amortization period of 2.13 years. Restricted Stock Awards and Restricted Stock Units A summary of the changes in the Company’s non-vested RSAs and RSUs during fiscal year 2023 is presented below: (shares in thousands, except per share amounts) Number of shares Weighted-average, grant-date fair value per share Non-vested as of November 30, 2022 1,307 $ 95.69 Granted 635 96.75 Vested ( 544 ) 100.07 Attainment adjustments (1) ( 12 ) 91.34 Cancelled ( 79 ) 92.73 Non-vested as of November 30, 2023 1,307 $ 94.92 __________________ (1) During the year ended November 30, 2023, t he attainment on PRSUs vested was adjusted to reflect actual performance. The weighted-average grant-date fair value of the 691 thousand RSAs and RSUs granted during fiscal year 2022 was $ 93.95 . The weighted-average grant-date fair value of the 684 thousand RSAs and RSUs granted during fiscal year 2021 was $ 99.28 . As of November 30, 2023, there was $ 74.8 million of total unamortized share-based compensation expense related to non-vested RSAs and RSUs granted under the TD SYNNEX Plans. That cost is expected to be recognized over an estimated weighted-average amortization period of 2.07 years. In connection with the Separation, as required by the TD SYNNEX stock incentive plans, the Company made certain adjustments to outstanding employee equity awards with the intention of preserving the intrinsic value of the awards prior to the Separation. In accordance with the employee matters agreement, each exercisable and non-exercisable stock option and unvested RSA was modified into similar awards of both SYNNEX and Concentrix and the exercise price of outstanding stock options was adjusted to preserve the intrinsic value of the awards. Certain RSUs and performance-contingent awards were modified to provide the holders RSUs and performance contingent awards in the company that employs such employee following the Separation. When settled wholly in the employer’s shares, the ratio was based on the closing stock price of SYNNEX at November 30, 2020 compared to the opening stock price of the respective entity on December 1, 2020. The options strike prices were adjusted in the same manner. The modification of these awards did not result in material incremental compensation cost. 70 Table of Contents Tech Data Equity Awards Prior to the Merger, certain of Tech Data’s employees were granted performance-based equity awards in Tiger Parent Holdings L.P., a partnership entity that was the parent company of Tiger Parent (AP) Corporation and Tech Data, that were unvested at the time of the closing of the Merger. Upon closing of the Merger, the unvested performance-based equity awards were converted i nto restricted shares of TD SYNNEX that vest over two years . The following table summarizes the activity related to these restricted shares during the year ended November 30, 2023: (share amounts in thousands) Restricted shares Nonvested as of November 30, 2022 350 Vested ( 316 ) Canceled ( 34 ) Nonvested as of November 30, 2023 0 The restricted shares had a fair value of $ 127.60 per share upon closing of the Merger which was recorded as share-based compensation expense on a straight-line basis over the vesting period in “Acquisition, integration, and restructuring costs” in the Consolidated Statement of Operations. The Company recorded $ 29.2 million, $ 45.7 million and $ 11.8 million of share-based compensation expense related to these restricted shares in "Acquisition, integration, and restructuring costs" during fiscal years 2023, 2022 and 2021, respectively. All remaining restricted shares vested on September 1, 2023. Employee Stock Purchase Plan On January 6, 2014, the Board of Directors approved the adoption of the 2014 Employee Stock Purchase Plan (“2014 ESPP”) to succeed the Company's 2003 Employee Stock Purchase Plan. The 2014 ESPP, as amended, commenced on January 1, 2015 with 750 thousand authorized shares, which was due to antidilution provisions in the 2014 ESPP increased by 537 thousand authorized shares following the Separation. Under the 2014 ESPP, there are four offering periods of three months each in a calendar year. Eligible employees in the United States can choose to have a fixed percentage deducted from their bi-weekly compensation, subject to a maximum purchase limit of $ 10 thousand in a calendar year, to purchase the Company’s common stock at a discount of 5 %. Highly compensated employees are not eligible to participate in the plan. On January 10, 2024, the Board of Directors approved the adoption of the 2024 Employee Stock Purchase Plan (“2024 ESPP”) to succeed the Company's 2014 Employee Stock Purchase Plan. The 2024 ESPP will commence with 750 thousand authorized shares. Under the 2024 ESPP, there will be two offering periods per calendar year. Eligible employees in the United States and Canada can choose to have a fixed percentage deducted from their bi-weekly compensation to purchase the Company's common stock at a discount of 15 %, subject to a maximum purchase limit of $ 25 thousand in fair market value of common stock in a calendar year. Share-based compensation expense related to the 2014 ESPP was immaterial during fiscal years 2023, 2022 and 2021. Tax Benefit of Share-Based Compensation Expense During fiscal years 2023, 2022 and 2021, the Company recognized income tax benefits related to the plans discussed above of $ 12.6 million, $ 8.2 million, and $ 12.1 million, respectively, within the provision for income taxes. NOTE 6— STOCKHOLDERS’ EQUITY: Share Repurchase Program In June 2020, the Board of Directors authorized a three-year $ 400.0 million share repurchase program, effective July 1, 2020. In January 2023, the Board of Directors authorized a new three-year $ 1.0 billion share repurchase program, replacing the existing $ 400.0 million share repurchase program, pursuant to which the Company may repurchase its outstanding common stock from time to time in the open market or through privately negotiated transactions. 71 Table of Contents On January 30, 2023, the Company announced the closing of a secondary public offering (the "January Offering") of an aggregate of 5.2 million shares of its common stock that were sold by certain entities managed by affiliates of Apollo Global Management, Inc (the "January Selling Stockholders"). All the shares in the January Offering were sold by the January Selling Stockholders. The Company did not receive any of the proceeds from the sale of shares by the January Selling Stockholders in the January Offering. Also pursuant to the related underwriting agreement, the Company repurchased 900 thousand shares of its common stock from the underwriters as part of the January Offering, at the public offering price of $ 97.00 per share, resulting in a purchase price of $ 87.3 million (the "January Concurrent Share Repurchase"). The January Concurrent Share Repurchase was made under the Company's existing $ 1.0 billion share repurchase program, and is included within the caption "Shares of treasury stock purchased under share repurchase program" in the table below. On October 10, 2023, the Company announced a secondary public offering (the "October Offering") of an aggregate of 7.8 million shares of its common stock (which includes approximately 1.0 million additional shares that underwriters had the option to purchase), of which 6.8 million shares were sold by certain entities managed by affiliates of Apollo Global Management, Inc. and 966 thousand shares were sold by certain entities affiliated with MiTAC Holdings Corporation (collectively, the "October Selling Stockholders"). All of the shares in the October Offering were sold by the October Selling Stockholders. The Company did not receive any of the proceeds from the sale of shares by the October Selling Stockholders in the October Offering. Also pursuant to the related underwriting agreement, the Company repurchased approximately 2.8 million shares from the underwriters as part of the October Offering, at a repurchase price of $ 95.5135 per share, resulting in a purchase price of approximately $ 262.7 million (the "October Concurrent Share Repurchase"). The October Concurrent Share Repurchase was made under the Company's existing $ 1.0 billion share repurchase program, and is included within the caption "Shares of treasury stock purchased under share repurchase program" in the table below. As of November 30, 2023, the Company had $ 395.9 million available for future repurchases of its common stock under the authorized share repurchase program. The following table presents information with respect to purchases of common stock by the Company under the share repurchase program during the year ended November 30, 2023. (shares in thousands, except per share amounts) Shares Weighted-average price per share Treasury stock balance as of November 30, 2022 4,049 $ 83.29 Shares of treasury stock repurchased under share repurchase program (1) 6,470 95.92 Shares of treasury stock repurchased for tax withholdings on equity awards 189 100.57 Shares of treasury stock reissued for employee benefit plans ( 365 ) 90.11 Treasury stock balance as of November 30, 2023 10,343 $ 91.82 __________________ (1) Weighted-average price per share excludes broker's commissions and excise taxes. "Repurchases of common stock" in the Consolidated Statements of Cash Flows for the twelve months ended November 30, 2023 excludes $ 5.6 million of accrued excise tax that is included in "Other current liabilities" and "Treasury stock" on the Consolidated Balance Sheets at November 30, 2023. Excise taxes when paid are classified as operating activities in the Consolidated Statements of Cash Flows. Dividends The Company declared cumulative cash dividends of $ 1.40 , $ 1.20 and $ 0.80 per share during the years ended November 30, 2023, 2022 and 2021, respectively. On January 9, 2024 , the Company announced a cash dividend of $ 0.40 per share to stockholders of record as of January 19, 2024 , payable on January 26, 2024 . Dividends are subject to continued capital availability and the declaration by the Board of Directors in the best interest of the Company’s stockholders. 72 Table of Contents NOTE 7— EARNINGS PER COMMON SHARE: The following table sets forth the computation of basic and diluted earnings per common share for the periods indicated: Fiscal Years Ended November 30, 2023 2022 2021 (currency and share amounts in thousands, except per share amounts) Basic earnings per common share: Net income attributable to common stockholders (1) $ 622,045 $ 646,963 $ 391,025 Weighted-average number of common shares - basic 92,572 95,225 62,239 Basic earnings per common share $ 6.72 $ 6.79 $ 6.28 Diluted earnings per common share: Net income attributable to common stockholders (1) $ 622,056 $ 646,974 $ 391,051 Weighted-average number of common shares - basic 92,572 95,225 62,239 Effect of dilutive securities: Stock options and RSUs 281 284 459 Weighted-average number of common shares - diluted 92,853 95,509 62,698 Diluted earnings per common share $ 6.70 $ 6.77 $ 6.24 Anti-dilutive shares excluded from diluted earnings per share calculation 287 260 16 __________________ (1) RSAs granted by the Company are considered participating securities. Income available to participating securities was immaterial in all periods presented. NOTE 8— BALANCE SHEET COMPONENTS: Cash, cash equivalents and restricted cash: The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Consolidated Balance Sheets that sum to the total of the same amounts shown in the Consolidated Statements of Cash Flows: As of November 30, 2023 2022 (currency in thousands) Cash and cash equivalents $ 1,033,776 $ 522,604 Restricted cash included in other current assets — 252 Cash, cash equivalents and restricted cash $ 1,033,776 $ 522,856 73 Table of Contents Accounts receivable, net: The following table summarizes accounts receivable, net: As of November 30, 2023 2022 (currency in thousands) Accounts receivable $ 10,448,567 $ 9,550,741 Less: Allowance for doubtful accounts ( 150,753 ) ( 129,742 ) Accounts receivable, net $ 10,297,814 $ 9,420,999 Receivables from vendors, net: The following table summarizes receivables from vendors, net: As of November 30, 2023 2022 (currency in thousands) Receivables from vendors $ 976,453 $ 831,539 Less: Allowance for doubtful accounts ( 12,119 ) ( 12,404 ) Receivables from vendors, net $ 964,334 $ 819,135 Allowance for doubtful trade receivables: The following table summarizes the changes to the allowance for doubtful trade receivables (currency in thousands): Balance as of November 30, 2020 $ 67,361 Acquisitions 75,362 Additions ( 7,544 ) Write-offs, recoveries, reclassifications and foreign exchange translation ( 20,343 ) Balance as of November 30, 2021 114,836 Additions 34,741 Write-offs, recoveries, reclassifications and foreign exchange translation ( 19,835 ) Balance as of November 30, 2022 129,742 Additions 44,742 Write-offs, recoveries, reclassifications and foreign exchange translation ( 23,731 ) Balance as of November 30, 2023 $ 150,753 74 Table of Contents Allowance for receivables from vendors: The following table summarizes the changes to the allowance for receivables from vendors (currency in thousands): Balance as of November 30, 2020 $ 5,126 Acquisitions 7,524 Additions 588 Write-offs, reclassifications and foreign exchange translation ( 2,110 ) Balance as of November 30, 2021 11,128 Additions 1,497 Write-offs, reclassifications and foreign exchange translation ( 221 ) Balance as of November 30, 2022 12,404 Additions ( 106 ) Write-offs, reclassifications and foreign exchange translation ( 179 ) Balance as of November 30, 2023 $ 12,119 Property and equipment, net: The following table summarizes property and equipment, net: As of November 30, 2023 2022 (currency in thousands) Land $ 27,871 $ 27,311 Equipment, computers and software 513,030 414,359 Furniture and fixtures 64,429 59,349 Buildings, building improvements and leasehold improvements 236,479 219,859 Construction-in-progress 17,681 6,859 Total property and equipment, gross $ 859,490 $ 727,737 Total accumulated depreciation ( 409,466 ) ( 306,673 ) Property and equipment, net $ 450,024 $ 421,064 Depreciation and amortization expense for fiscal years 2023, 2022 and 2021, was $ 124.6 million, $ 164.2 million and $ 44.2 million, respectively. Fiscal years 2023 and 2022 include accelerated depreciation and amortization expense of $ 17.4 million and $ 64.4 million, respectively, due to changes in asset useful lives in conjunction with the consolidation of certain IT systems, which is recorded in "Acquisition, integration and restructuring costs" in the Consolidated Statements of Operations. Goodwill: The following table summarizes changes in the carrying amount of goodwill: Fiscal Year Ended November 30, 2023 Americas Europe APJ Total (currency in thousands) Balance, beginning of year $ 2,451,826 $ 1,277,226 $ 74,798 $ 3,803,850 Dispositions upon sale of subsidiaries ( 3,128 ) — — ( 3,128 ) Foreign exchange translation 31,380 72,514 ( 446 ) 103,448 Balance, end of year $ 2,480,078 $ 1,349,740 $ 74,352 $ 3,904,170 75 Table of Contents Intangible assets, net: The following table summarizes intangible assets, net: As of November 30, 2023 As of November 30, 2022 Gross Amounts Accumulated Amortization Net Amounts Gross Amounts Accumulated Amortization Net Amounts (currency in thousands) Intangible assets with indefinite lives: Trade name $ 1,033,378 $ — $ 1,033,378 $ 1,003,974 $ — $ 1,003,974 Intangible assets with finite lives: Customer relationships $ 3,898,701 $ ( 741,388 ) $ 3,157,313 $ 3,800,710 $ ( 453,439 ) $ 3,347,271 Vendor lists 177,737 ( 132,440 ) 45,297 176,910 ( 115,814 ) 61,096 Other intangible assets 28,579 ( 20,253 ) 8,326 28,215 ( 17,679 ) 10,536 $ 5,138,395 $ ( 894,081 ) $ 4,244,314 $ 5,009,809 $ ( 586,932 ) $ 4,422,877 Amortization expense for fiscal years 2023, 2022 and 2021, was $ 293.7 million, $ 299.2 million and $ 105.3 million, respectively. Estimated future amortization expense of the Company’s intangible assets is as follows: Fiscal years ending November 30, (currency in thousands) 2024 $ 290,907 2025 287,510 2026 284,724 2027 281,641 2028 265,319 Thereafter 1,800,835 Total $ 3,210,936 Accumulated other comprehensive income (loss) The following table summarizes the components of accumulated other comprehensive income (loss) ("AOCI"), net of taxes: (currency in thousands) Unrealized gains (losses) on cash flow hedges, net of taxes Foreign currency translation adjustment and other, net of taxes Total Balance, beginning of year $ 6,169 $ ( 725,879 ) $ ( 719,710 ) Other comprehensive income (loss) before reclassification 702 219,209 219,911 Reclassification of (gains) losses from other comprehensive income (loss) ( 6,871 ) ( 578 ) ( 7,449 ) Balance, end of year $ — $ ( 507,248 ) $ ( 507,248 ) Refer to Note 9 – Derivative Instruments for the location of gains and losses reclassified from accumulated other comprehensive income (loss) to the Consolidated Statements of Operations. The reclassification of the net foreign currency translation adjustment realized upon sale of a foreign subsidiary was recorded within selling, general and administrative expenses in the Consolidated Statements of Operations. 76 Table of Contents NOTE 9— DERIVATIVE INSTRUMENTS: In the ordinary course of business, the Company is exposed to foreign currency risk, interest rate risk, equity risk, commodity price changes and credit risk. The Company enters into transactions, and owns monetary assets and liabilities, that are denominated in currencies other than the legal entity’s functional currency. The Company may enter into forward contracts, option contracts, swaps, or other derivative instruments to offset a portion of the risk on expected future cash flows, earnings, net investments in certain international subsidiaries and certain existing assets and liabilities. However, the Company may choose not to hedge certain exposures for a variety of reasons including, but not limited to, accounting considerations and the prohibitive economic cost of hedging particular exposures. There can be no assurance the hedges will offset more than a portion of the financial impact resulting from movements in foreign currency exchange or interest rates. The Company does not use derivative instruments to cover equity risk and credit risk. The Company’s hedging program is not used for trading or speculative purposes. All derivatives are recognized on the balance sheet at their fair value. Changes in the fair value of derivatives are recorded in the Consolidated Statements of Operations, or as a component of AOCI in the Consolidated Balance Sheets, as discussed below. Cash Flow Hedges The Company uses interest rate swap derivative contracts to economically convert a portion of its variable-rate debt to fixed-rate debt. Gains and losses on cash flow hedges are recorded in AOCI until the hedged item is recognized in earnings. Deferred gains and losses associated with cash flow hedges of interest payments are recognized in “Interest expense and finance charges, net” in the same period as the related expense is recognized. Derivative instruments designated as cash flow hedges must be de-designated as hedges when it is probable the forecasted hedged transaction will not occur in the initially identified time period or within a subsequent two-month time period. Deferred gains and losses in AOCI associated with such derivative instruments are reclassified into earnings in the period of de-designation. Any subsequent changes in fair value of such derivative instruments are recorded in earnings unless they are re-designated as hedges of other transactions. The Company terminated its remaining interest rate swaps in May 2023 and had no interest rate swaps designated as cash flow hedges outstanding as of November 30, 2023. Net Investment Hedges The Company has entered into foreign currency forward contracts to hedge a portion of its net investment in euro denominated foreign operations which are designated as net investment hedges. The Company entered into the net investment hedges to offset the risk of change in the U.S. dollar value of the Company's investment in a euro functional subsidiary due to fluctuating foreign exchange rates. The aggregate notional values of the Company's outstanding net investment hedge contracts by year of maturity as of November 30, 2023 are as follows: Fiscal years ending November 30, (currency in thousands) 2024 $ 257,500 2025 4,375 2026 254,375 Total $ 516,250 Non-Designated Derivatives The Company uses short-term forward contracts to offset the foreign exchange risk of assets and liabilities denominated in currencies other than the functional currency of the respective entities. These contracts, which are not designated as hedging instruments, mature or settle within twelve months . Derivatives that are not designated as hedging instruments are adjusted to fair value through earnings in the financial statement line item to which the derivative relates. 77 Table of Contents Fair Values of Derivative Instruments in the Consolidated Balance Sheets The fair values of the Company’s derivative instruments are disclosed in Note 10 - Fair Value Measurements and summarized in the table below: Value as of Balance Sheet Line Item (currency in thousands) November 30, 2023 November 30, 2022 Derivative instruments not designated as hedging instruments: Foreign exchange forward contracts (notional value) $ 1,456,110 $ 1,853,188 Other current assets 4,326 9,597 Other accrued liabilities 9,756 16,085 Derivative instruments designated as cash flow hedges: Interest rate swaps (notional value) $ — $ 1,000,000 Other current assets — 17,222 Derivative instruments designated as net investment hedges: Foreign currency forward contracts (notional value) $ 516,250 $ 523,750 Other accrued liabilities 18,335 255 Other long-term liabilities 18,041 16,420 The Company terminated interest rate swaps with a notional value of $ 400.0 million in December 2021 (the "December 2021 Terminations"). Cumulative losses from the December 2021 Terminations totaled $ 16.0 million and were reclassified from AOCI to "Interest expense and finance charges, net" over the period through September 2023. The Company additionally terminated interest rate swaps with a notional value of $ 1.0 billion in May 2023 (the "May 2023 Terminations"). Cumulative gains from the May 2023 Terminations totaled $ 10.0 million and were reclassified from AOCI to "Interest expense and finance charges, net" over the period through October 2023. Volume of Activity The notional amounts of foreign exchange forward contracts represent the gross amounts of foreign currency, including, principally, the Australian dollar, Brazilian real, British pound, Canadian dollar, Chinese yuan, Czech koruna, Danish krone, Euro, Indian rupee, Indonesian rupiah, Japanese yen, Mexican peso, Norwegian krone, Philippine peso, Polish zloty, Singapore dollar, Swedish krona, Swiss franc and Turkish lira that will be bought or sold at maturity. The notional amounts for outstanding derivative instruments provide one measure of the transaction volume outstanding and do not represent the amount of the Company’s exposure to credit or market loss. The Company’s exposure to credit loss and market risk will vary over time as currency and interest rates change. 78 Table of Contents The Effect of Derivative Instruments on AOCI and the Consolidated Statements of Operations The following table shows the gains and losses, before taxes, of the Company's derivative instruments designated as cash flow hedges and net investment hedges in Other Comprehensive Income (“OCI”), and not designated as hedging instruments in the Consolidated Statements of Operations for the periods presented: Location of Gains (losses) in Income For the fiscal years ended November 30, 2023 2022 2021 (currency in thousands) Derivative instruments designated as cash flow hedges: Gains recognized in OCI on interest rate swaps $ 937 $ 46,502 $ 10,902 Gains (losses) on interest rate swaps reclassified from AOCI into income Interest expense and finance charges, net $ 9,494 $ ( 26,443 ) $ ( 42,115 ) Derivative instruments designated as net investment hedges: Losses recognized in OCI on foreign exchange forward contracts $ ( 29,405 ) $ ( 18,477 ) $ — Gains recognized in income (amount excluded from effectiveness testing) Interest expense and finance charges, net $ 9,149 $ 1,802 $ — Derivative instruments not designated as hedging instruments: (Losses) gains recognized from foreign exchange forward contracts, net (1) Cost of revenue $ ( 43,338 ) $ 38,360 $ 18,073 Losses recognized from foreign exchange forward contracts, net (1) Other (expense) income, net ( 6,212 ) ( 10,504 ) ( 6,878 ) Gains recognized from interest rate swaps, net Interest expense and finance charges, net — — 128 Total $ ( 49,550 ) $ 27,856 $ 11,323 __________________ (1) The gains and losses largely offset the currency gains and losses that resulted from changes in the assets and liabilities denominated in nonfunctional currencies. Except for the net investment hedge amounts shown above, there were no material gain or loss amounts excluded from the assessment of effectiveness. There are no existing gains or losses in AOCI expected to be reclassified into earnings in the normal course of business within the next 12 months. Credit exposure for derivative financial instruments is limited to the amounts, if any, by which the counterparties’ obligations under the contracts exceed the Company’s obligations to the counterparties. The Company manages the potential risk of credit losses through careful evaluation of counterparty credit standing and selection of counterparties from a limited group of financial institutions. NOTE 10— FAIR VALUE MEASUREMENTS: The Company’s fair value measurements are classified and disclosed in one of the following three categories: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; and Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity). 79 Table of Contents The following table summarizes the valuation of the Company’s financial instruments that are measured at fair value on a recurring basis: As of November 30, 2023 As of November 30, 2022 Fair value measurement category Fair value measurement category Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 (currency in thousands) Assets: Forward foreign currency exchange contracts not designated as hedges $ 4,326 — $ 4,326 — $ 9,597 — $ 9,597 — Interest rate swaps — — — — 17,222 — 17,222 — Liabilities: Forward foreign currency exchange contracts not designated as hedges $ 9,756 — $ 9,756 — $ 16,085 $ — $ 16,085 $ — Forward foreign currency exchange contracts designated as net investment hedges 36,376 — 36,376 — 16,675 — 16,675 — The fair values of forward exchange contracts are measured based on the foreign currency spot and forward rates quoted by the banks or foreign currency dealers. Fair values of interest rate swaps are measured using standard valuation models using inputs that are readily available in public markets, or can be derived from observable market transactions, including spot and forward rates. There were no interest rate swaps outstanding as of November 30, 2023. The effect of nonperformance risk on the fair value of derivative instruments was not material as of November 30, 2023 and 2022. The carrying values of accounts receivable, accounts payable and short-term debt approximate fair value due to their short maturities and interest rates which are variable in nature. The carrying value of the Company’s term loans approximate their fair value since they bear interest rates that are similar to existing market rates. The estimated fair value of the Senior Notes was approximately $ 2.2 billion and $ 2.1 billion at November 30, 2023 and 2022, respectively. During the fiscal years ended November 30, 2023, 2022 and 2021, there were no transfers between the fair value measurement category levels. 80 Table of Contents NOTE 11— BORROWINGS: Borrowings consist of the following: As of November 30, 2023 2022 (currency in thousands) Current portion of TD SYNNEX Senior Notes $ 700,000 $ — Current portion of TD SYNNEX term loan 75,000 75,000 Other short-term borrowings 208,694 193,128 Short-term borrowings before debt discount and issuance costs $ 983,694 $ 268,128 Less: current portion of unamortized debt discount and issuance costs ( 109 ) — Borrowings, current $ 983,585 $ 268,128 TD SYNNEX term loan $ 1,275,000 $ 1,350,000 TD SYNNEX Senior Notes 1,800,000 2,500,000 Other credit agreements and long-term debt 41,985 9,690 Long-term borrowings, before unamortized debt discount and issuance costs $ 3,116,985 $ 3,859,690 Less: unamortized debt discount and issuance costs ( 17,792 ) ( 24,025 ) Long-term borrowings $ 3,099,193 $ 3,835,665 TD SYNNEX United States Accounts Receivable Securitization Arrangement In the United States, the Company has an accounts receivable securitization program to provide additional capital for its operations (the “U.S. AR Arrangement”). U nder the terms of the U.S. AR Arrangement, the Company and its subsidiaries that are party to the U.S. AR Arrangement can borrow up to a maximum of $ 1.5 billion based upon eligible trade accounts receivable. The effective borrowing cost under the U.S. AR Arrangement is a blended rate based upon the composition of the lenders, that includes prevailing dealer commercial paper rates and a rate based upon the SOFR. In addition, a program fee payable on the used portion of the lenders’ commitment accrues at 0.75 % per annum. A facility fee is payable on the adjusted commitment of the lenders, to accrue at different tiers ranging between 0.30 % per annum and 0.40 % per annum depending on the amount of outstanding advances from time to time. On December 11, 2023, the U.S. AR Arrangement was amended. The amendment extended the maturity date of the agreement by one year to December 2025 and increased the program fee payable on the used portion of the lenders’ commitment to 0.85 %. Under the terms of the U.S. AR Arrangement, the Company and certain of its U.S. subsidiaries sell, on a revolving basis, their receivables to a wholly-owned, bankruptcy-remote subsidiary. Such receivables, which are recorded in the Consolidated Balance Sheet, totaled approximately $ 3.4 billion and $ 2.9 billion as of November 30, 2023 and 2022, respectively. The borrowings are funded by pledging all of the rights, title and interest in the receivables acquired by the Company's bankruptcy-remote subsidiary as security. Any amounts received under the U.S. AR Arrangement are recorded as debt on the Company's Consolidated Balance Sheets. There were no amounts outstanding under the U.S. AR Arrangement at November 30, 2023 or 2022. 81 Table of Contents TD SYNNEX Credit Agreement The Company is party to a credit agreement, dated as of April 16, 2021 and amended May 22, 2023 (as amended, the “TD SYNNEX Credit Agreement”) with the lenders party thereto and Citibank, N.A., as agent, pursuant to which the Company received commitments for the extension of a senior unsecured revolving credit facility not to exceed an aggregate principal amount of $ 3.5 billion which revolving credit facility (the “TD SYNNEX revolving credit facility”) may, at the request of the Company but subject to the lenders’ discretion, potentially be increased by up to an aggregate amount of $ 500.0 million. There were no amounts outstanding under the TD SYNNEX revolving credit facility at November 30, 2023 or 2022. The TD SYNNEX Credit Agreement also includes a senior unsecured term loan (the “TD SYNNEX term loan” and, together with the TD SYNNEX revolving credit facility, the “TD SYNNEX credit facilities”) in an original aggregate principal amount of $ 1.5 billion, that was fully funded in connection with the closing of the Merger. The borrower under the TD SYNNEX Credit Agreement is the Company. There are no guarantors of the TD SYNNEX Credit Agreement. The maturity of the TD SYNNEX Credit Agreement is on the fifth anniversary of the September 2021 closing date, to occur in September 2026, subject in the case of the revolving credit facility, to two one-year extensions upon the Company’s prior notice to the lenders and the agreement of the lenders to extend such maturity date. The outstanding principal amount of the TD SYNNEX term loan is payable in quarterly installments in an amount equal to 1.25 % of the original $ 1.5 billion principal balance, with the outstanding principal amount of the term loans due in full on the maturity date. Loans borrowed under the TD SYNNEX Credit Agreement bear interest, in the case of SOFR rate loans, at a per annum rate equal to the applicable SOFR rate, plus the applicable margin, which may range from 1.125 % to 1.750 %, based on the Company’s public debt rating (as defined in the TD SYNNEX Credit Agreement). The applicable margin on base rate loans is 1.00 % less than the corresponding margin on SOFR rate based loans. In addition to these borrowing rates, there is a commitment fee that ranges from 0.125 % to 0.300 % on any unused commitment under the TD SYNNEX revolving credit facility based on the Company’s public debt rating. The effective interest rate for the TD SYNNEX term loan was 6.82 % and 5.46 % as of November 30, 2023 and 2022, respectively. The Company used interest rate swap derivative contracts to economically convert a portion of the TD SYNNEX term loan to fixed-rate debt. The interest rate swaps were terminated in May 2023 (see Note 9 - Derivative Instruments for further discussion). The TD SYNNEX Credit Agreement contains various loan covenants that are customary for similar facilities for similarly rated borrowers that restricts the ability of the Company and its subsidiaries to take certain actions. The TD SYNNEX Credit Agreement also contains financial covenants which require compliance with a maximum debt to EBITDA ratio and a minimum interest coverage ratio, in each case tested on the last day of each fiscal quarter. The TD SYNNEX Credit Agreement also contains various customary events of default, including with respect to a change of control of the Company. TD SYNNEX Senior Notes On August 9, 2021, the Company completed its offering of $ 2.5 billion aggregate principal amount of senior unsecured notes, consisting of $ 700.0 million of 1.25 % senior notes due August 9, 2024 , $ 700.0 million of 1.75 % senior notes due August 9, 2026 , $ 600.0 million of 2.375 % senior notes due August 9, 2028 , and $ 500.0 million of 2.65 % senior notes due August 9, 2031 (collectively, the “Senior Notes,” and such offering, the “Senior Notes Offering”). The Company incurred $ 19.6 million towards issuance costs on the Senior Notes. The Company pays interest semi-annually on the notes on each of February 9 and August 9. The net proceeds from this offering were used to fund a portion of the aggregate cash consideration payable in connection with the Merger, refinance certain of the Company’s existing indebtedness and pay related fees and expenses and for general corporate purposes. 82 Table of Contents The interest rate payable on each series of the Senior Notes will be subject to adjustment from time to time if the credit rating assigned to such series of Senior Notes is downgraded (or downgraded and subsequently upgraded). The Company may redeem the Senior Notes, at any time in whole or from time to time in part, prior to (i) August 9, 2022 (the “2024 Par Call Date”) in the case of the 2024 Senior Notes, (ii) July 9, 2026 (the “2026 Par Call Date”) in the case of the 2026 Senior Notes, (iii) June 9, 2028 (the “2028 Par Call Date”) in the case of the 2028 Senior Notes, and (iv) May 9, 2031 in the case of the 2031 Senior Notes (the “2031 Par Call Date” and, together with the 2024 Par Call Date, the 2026 Par Call Date and the 2028 Par Call Date, each, a “Par Call Date” and together, the “Par Call Dates”), at a redemption price equal to the greater of (x) 100 % of the aggregate principal amount of the applicable Senior Notes to be redeemed and (y) the sum of the present values of the remaining scheduled payments of the principal and interest on the Senior Notes, discounted to the date of redemption on a semi-annual basis at a rate equal to the sum of the applicable treasury rate plus 15 basis points for the 2024 Senior Notes, 20 basis points for the 2026 Senior Notes and 25 basis points for the 2028 Senior Notes and 2031 Senior Notes, plus in each case, accrued and unpaid interest thereon to, but excluding, the redemption date. The Company may also redeem the Senior Notes of any series at its option, at any time in whole or from time to time in part, on or after the applicable Par Call Date, at a redemption price equal to 100 % of the principal amount of the Senior Notes to be redeemed. On June 14, 2022, the Company commenced an offer to exchange (the "Exchange Offer") its outstanding unregistered Senior Notes for new registered notes (the "Exchange Notes"). The purpose of the Exchange Offer was to fulfill the Company's obligations under the applicable registration rights agreement entered into in connection with the issuance of the Senior Notes. The Company did not receive any proceeds from the Exchange Offer, and the aggregate principal amount of Exchange Notes that were issued was equal to the aggregate principal amount of Senior Notes that were surrendered pursuant to the Exchange Offer. The terms of the Exchange Notes are substantially identical to the terms of the respective series of the Senior Notes, except that the Exchange Notes are registered under the Securities Act, and certain transfer restrictions, registration rights, and additional interest provisions relating to the Senior Notes do not apply to the Exchange Notes. The Exchange Offer expired on July 14, 2022 and settlement occurred on July 15, 2022. Other Short-Term Borrowings The Company has various other committed and uncommitted lines of credit with financial institutions, short-term loans, term loans, credit facilities, and book overdraft facilities, totaling approximately $ 583.1 million in borrowing capacity as of November 30, 2023. Most of these facilities are provided on an unsecured, short-term basis and are reviewed periodically for renewal. Interest rates and other terms of borrowing under these lines of credit vary by country, depending on local market conditions. There was $ 208.7 million outstanding on these facilities at November 30, 2023, at a weighted average interest rate of 7.52 %, and there was $ 193.1 million outstanding at November 30, 2022, at a weighted average interest rate of 4.69 %. Borrowings under these lines of credit facilities are guaranteed by the Company or secured by eligible accounts receivable. At November 30, 2023, the Company was also contingently liable for reimbursement obligations with respect to issued standby letters of credit in the aggregate outstanding amount of $ 48.8 million. These letters of credit typically act as a guarantee of payment to certain third parties in accordance with specified terms and conditions. The maximum commitment amounts for local currency credit facilities have been translated into United States Dollars at November 30, 2023 exchange rates. Future Principal Payments As of November 30, 2023, future principal payments under the above loans are as follows: Fiscal Years Ending November 30, (currency in thousands) 2024 $ 983,694 2025 94,137 2026 1,911,448 2027 11,400 2028 600,000 Thereafter 500,000 Total $ 4,100,679 83 Table of Contents Covenant Compliance The Company's credit facilities have a number of covenants and restrictions that require the Company to maintain specified financial ratios. The covenants also limit the Company’s ability to incur additional debt, create liens, enter into agreements with affiliates, modify the nature of the Company’s business, and merge or consolidate. As of November 30, 2023, the Company was in compliance with the financial covenant requirements for the above arrangements. NOTE 12— SEGMENT INFORMATION: Summarized financial information related to the Company’s reportable business segments for the periods presented is shown below: Americas Europe APJ Consolidated (currency in thousands) Fiscal Year ended November 30, 2023 Revenue $ 34,573,859 $ 19,422,297 $ 3,559,260 $ 57,555,416 Operating income 736,605 236,477 104,950 1,078,032 Depreciation and amortization expense ( 256,911 ) ( 151,712 ) ( 9,692 ) ( 418,315 ) Purchases of property and equipment (1) ( 68,667 ) ( 21,027 ) ( 4,840 ) ( 94,534 ) Total assets 16,693,727 11,006,064 1,713,023 29,412,814 Fiscal Year ended November 30, 2022 Revenue $ 38,791,102 $ 20,289,211 $ 3,263,497 $ 62,343,810 Operating income 734,103 227,249 89,521 1,050,873 Depreciation and amortization expense ( 280,113 ) ( 174,019 ) ( 9,233 ) ( 463,365 ) Purchases of property and equipment (1) ( 44,373 ) ( 15,754 ) ( 5,164 ) ( 65,291 ) Total assets 16,755,395 11,310,344 1,668,259 29,733,998 Fiscal Year ended November 30, 2021 Revenue $ 23,317,274 $ 6,201,302 $ 2,095,593 $ 31,614,169 Operating income 497,964 79,153 46,100 623,218 Depreciation and amortization expense ( 105,669 ) ( 41,333 ) ( 2,562 ) ( 149,564 ) Purchases of property and equipment (1) ( 32,733 ) ( 4,165 ) ( 2,789 ) ( 39,687 ) __________________ (1) Excludes purchases of capitalized software and application software. The Company attributes revenues from external customers to the country from where products are delivered. Except for the United States, no other country accounted for 10% or more of the Company’s revenue for the periods presented. Fiscal Years Ended November 30, 2023 2022 2021 (currency in thousands) Revenue: United States $ 30,418,425 $ 34,104,786 $ 19,923,466 Others 27,136,991 28,239,024 11,690,703 Total $ 57,555,416 $ 62,343,810 $ 31,614,169 84 Table of Contents Except for the United States and France, no other country accounted for 10% or more of the Company’s property and equipment, net, less capitalized software and application software, for the periods presented: As of November 30, 2023 2022 (currency in thousands) Long-lived assets: United States $ 221,411 $ 197,498 France 36,796 35,142 Others 78,659 75,023 Total $ 336,866 $ 307,663 NOTE 13— RELATED PARTY TRANSACTIONS: The Company has a business relationship with MiTAC Holdings Corporation (“MiTAC Holdings”), a publicly-traded company in Taiwan, which began in 1992 when MiTAC Holdings became one of the Company’s primary investors through its affiliates. As of November 30, 2023 and 2022, MiTAC Holdings and its affiliates beneficially owned approximately 9.3 % and 9.7 % of the Company's outstanding common stock, respectively. Mr. Matthew F.C. Miau, Chairman Emeritus of the Company’s Board of Directors and a director, is the Chairman of MiTAC Holdings and a director or officer of MiTAC Holdings’ affiliates. Beneficial Ownership of the Company’s Common Stock by MiTAC Holdings As noted above, MiTAC Holdings and its affiliates in the aggregate beneficially owned approximately 9.3 % of the Company’s outstanding common stock as of November 30, 2023. These shares are owned by the following entities: (shares in thousands) As of November 30, 2023 MiTAC Holdings (1) 4,770 Synnex Technology International Corp. (2) 3,474 Total 8,244 __________________ (1) Shares are held as follows: 302 thousand shares by Silver Star Developments Ltd. and 2,065 thousand shares by MiTAC International Corp., both of which are wholly owned subsidiaries of MiTAC Holdings, along with 2,403 thousand shares held directly by MiTAC Holdings. Excludes 146 thousand shares held directly by Mr. Miau, 217 thousand shares indirectly held by Mr. Miau through a charitable remainder trust, and 190 thousand shares held by his spouse. (2) Synnex Technology International Corp. (“Synnex Technology International”) is a separate entity from the Company and is a publicly-traded corporation in Taiwan. Shares are held via Peer Development Ltd., a wholly-owned subsidiary of Synnex Technology International. MiTAC Holdings owns a noncontrolling interest of 14.1 % in MiTAC Incorporated, a privately-held Taiwanese company, which in turn holds a noncontrolling interest of 15.7 % in Synnex Technology International. Neither MiTAC Holdings nor Mr. Miau is affiliated with any person(s), entity, or entities that hold a majority interest in MiTAC Incorporated. The following table presents the Company's transactions with MiTAC Holdings and its affiliates for the periods indicated: Fiscal Years Ended November 30, 2023 2022 2021 (currency in thousands) Purchases of inventories and services $ 174,121 $ 257,726 $ 199,698 Sale of products to MiTAC Holdings and affiliates 12,331 1,317 623 Payments made for rent and overhead costs for use of facilities of MiTAC Holdings and affiliates, net 950 405 161 85 Table of Contents The following table presents the Company’s receivable from and payable to MiTAC Holdings and its affiliates for the periods presented: As of November 30, 2023 2022 (currency in thousands) Receivable from related parties (included in Accounts receivable, net) $ 4,330 $ 1,222 Payable to related parties (included in Accounts payable) 16,538 30,317 NOTE 14— EMPLOYEE BENEFITS PLANS: The Company has 401(k) plans in the United States under which eligible co-workers may contribute up to the maximum amount as provided by law. Co-workers generally become eligible to participate in these plans on the first day of the month after their employment date. The Company may make discretionary contributions under the plans. During fiscal years 2023, 2022 and 2021, the Company contributed $ 17.3 million, $ 15.8 million and $ 6.5 million, respectively, to these 401(k) plans. Co-workers in certain of the Company's international subsidiaries are covered by government mandated defined contribution plans, which are not material to operations. Additionally, the Company has defined benefit plans sponsored by certain international subsidiaries which are not material to its operations. NOTE 15— LEASES: The Company leases certain of its facilities and equipment under noncancellable operating lease agreements, which expire in various periods through 2037 . The Company’s finance leases are not material. The following table presents the various components of lease costs. Fiscal Years Ended November 30, 2023 2022 2021 (currency in thousands) Operating lease cost $ 109,789 $ 113,878 $ 48,167 Short-term and variable lease cost 26,022 13,031 5,618 Sublease income ( 950 ) ( 1,067 ) ( 223 ) Total operating lease cost $ 134,861 $ 125,842 $ 53,562 The following table presents a maturity analysis of expected undiscounted cash flows for operating leases on an annual basis for the next five years and thereafter as of November 30, 2023: Fiscal Years Ending November 30, (currency in thousands) 2024 $ 97,948 2025 86,176 2026 75,618 2027 59,515 2028 51,441 Thereafter 186,086 Total payments $ 556,784 Less: imputed interest (1) ( 88,712 ) Total present value of lease payments $ 468,072 __________________ (1) Imputed interest represents the difference between undiscounted cash flows and discounted cash flows. 86 Table of Contents The following amounts were recorded in the Company's Consolidated Balance Sheet as of November 30, 2023 and 2022: Operating leases Balance sheet location November 30, 2023 November 30, 2022 (currency in thousands) Operating lease ROU assets Other assets, net $ 450,966 $ 406,165 Current operating lease liabilities Other accrued liabilities 95,128 89,397 Non-current operating lease liabilities Other long-term liabilities 372,944 333,510 The following table presents s upplemental cash flow information related to the Company's operating leases for fiscal years 2023, 2022 and 2021. Cash payments related to variable lease costs and short-term leases are not included in the measurement of operating lease liabilities, and, as such, are excluded from the amounts below : Fiscal Years Ended November 30, Cash flow information 2023 2022 2021 (currency in thousands) Cash paid for amounts included in the measurement of lease liabilities $ 108,880 $ 114,558 $ 29,887 Non-cash ROU assets obtained in exchange for lease liabilities 128,953 72,885 34,179 The weighted-average remaining lease term and discount rate as of November 30, 2023 and 2022 were as follows: Operating lease term and discount rate 2023 2022 Weighted-average remaining lease term (years) 7.63 8.43 Weighted-average discount rate 4.53 % 4.07 % NOTE 16— INCOME TAXES: The components of pretax income are as follows: Fiscal Years Ended November 30, 2023 2022 2021 (currency in thousands) United States $ 283,233 $ 334,994 $ 246,331 Foreign 506,275 492,136 220,154 $ 789,508 $ 827,130 $ 466,485 87 Table of Contents Significant components of the provision for income taxes are as follows: Fiscal Years Ended November 30, 2023 2022 2021 (currency in thousands) Current tax provision: Federal $ 78,239 $ 88,745 $ ( 8,838 ) State 40,436 35,320 13,916 Foreign 135,494 144,139 66,660 $ 254,169 $ 268,204 $ 71,738 Deferred tax provision (benefit): Federal $ ( 30,499 ) $ ( 31,143 ) $ 13,597 State ( 24,771 ) ( 9,471 ) ( 675 ) Foreign ( 36,302 ) ( 51,767 ) ( 13,244 ) $ ( 91,572 ) $ ( 92,381 ) $ ( 322 ) Total tax provision $ 162,597 $ 175,823 $ 71,416 The breakdown of net deferred tax assets and liabilities are as follows: As of November 30, 2023 2022 (currency in thousands) Deferred tax assets $ 79,512 $ 46,523 Deferred tax liabilities ( 893,021 ) ( 942,250 ) Total net deferred tax assets (liabilities) $ ( 813,509 ) $ ( 895,727 ) 88 Table of Contents The significant components of the Company’s deferred tax assets and liabilities are as follows: As of November 30, 2023 2022 (currency in thousands) Assets: Loss carryforwards $ 82,014 $ 82,192 Lease liabilities 103,013 96,236 Accrued liabilities 127,399 104,370 Foreign tax credit carryforwards 45,732 50,090 Disallowed interest expense 23,368 21,271 Allowance for doubtful accounts and sales return reserves 34,476 29,046 Capitalized inventory costs 12,106 6,541 Unrealized losses on cash flow hedges 13,806 3,820 Acquisition and transaction related costs 7,617 10,024 Share-based compensation expense 16,548 15,530 Deferred revenue 7,016 6,958 Long-lived assets 6,188 7,461 Other, net 688 2,385 479,971 435,924 Less: valuation allowance ( 92,371 ) ( 102,891 ) Total deferred tax assets $ 387,600 $ 333,033 Liabilities: Long-lived assets $ ( 1,090,615 ) $ ( 1,112,041 ) Lease right-of-use assets ( 99,831 ) ( 96,738 ) Deferred costs ( 3,905 ) ( 8,214 ) Capitalized marketing program costs ( 404 ) ( 2,949 ) Other, net ( 6,354 ) ( 8,818 ) Total deferred tax liabilities $ ( 1,201,109 ) $ ( 1,228,760 ) Net deferred tax (liability) asset $ ( 813,509 ) $ ( 895,727 ) The decrease in the Company's overall deferred tax liability position is primarily due to a reversal of a portion of the Company's deferred tax liabilities. The net change in the deferred tax valuation allowances in fiscal 2023 was a decrease of $ 10.5 million primarily resulting from the write-off of deferred tax assets in certain foreign jurisdictions for which a valuation allowance had previously been established. The valuation allowance at November 30, 2023 and November 30, 2022 primarily relates to carryforwards for foreign net operating losses and foreign tax credits in the United States. The Company considers all positive and negative evidence available in determining the potential of realizing deferred tax assets. To the extent that the Company generates consistent taxable income within those operations with valuation allowances, the Company may reduce the valuation allowances, thereby reducing income tax expense and increasing net income in the period the determination is made. The Company’s net operating loss carryforwards totaled $ 281.2 million at November 30, 2023. The majority of the net operating losses have an indefinite carryforward period with the remaining portion expiring in fiscal years 2024 through 2043. In addition, the Company has an immaterial net amount of state net operating losses. The Company’s foreign tax credit carryforwards in the United States totaled $ 45.7 million at November 30, 2023. The foreign tax credits have a ten-year carryforward period, and the majority is set to expire in fiscal year 2025 . 89 Table of Contents The reconciliation of the statutory United States federal income tax rate to the Company’s effective income tax rate is as follows: Fiscal Years Ended November 30, 2023 2022 2021 United States federal statutory income tax rate 21.0 % 21.0 % 21.0 % State income taxes, net of federal income tax benefit 1.1 1.8 2.5 Global intangible low taxed income 0.7 0.2 0.6 Tax on foreign earnings different than US federal rate ( 3.0 ) ( 2.5 ) 1.6 Net changes in deferred tax valuation allowances ( 0.2 ) ( 0.9 ) ( 0.4 ) Interest not subject to tax, net 0.1 0.3 0.2 Capital loss carryback — ( 1.0 ) ( 9.6 ) Net changes in reserves for uncertain tax positions — ( 0.1 ) ( 0.7 ) Stock compensation related to Tech Data equity awards 0.9 1.4 — Other, net — 1.1 0.1 Effective income tax rate 20.6 % 21.3 % 15.3 % In connection with the Merger, the Company restructured its foreign financing structure, as well as select legal entities in anticipation of legally integrating legacy Tech Data and SYNNEX foreign operations. In addition to the treasury efficiencies, these restructurings resulted in a one-time domestic capital loss which would offset certain domestic capital gains when carried back under United States tax law to tax year 2020, resulting in a tax benefit of approximately $ 45.0 million during fiscal year 2021 and approximately $ 8.3 million during fiscal year 2022. The Company’s United States business has sufficient cash flow and liquidity to fund its operating requirements and the Company expects and intends that profits earned outside the United States will be fully utilized and reinvested outside of the United States. As of November 30, 2023, the Company had approximately $ 1.5 billion of undistributed earnings of its non-U.S. subsidiaries for which it has not provided for non-U.S. withholding taxes and state taxes because such earnings are intended to be reinvested indefinitely in international operations. It is not practicable to determine the amount of applicable taxes that would be due if such earnings were distributed. Accordingly, the Company has not provisioned United States state taxes and foreign withholding taxes on non-U.S. subsidiaries for which the earnings are permanently reinvested. The Company has been granted tax holidays in certain jurisdictions, primarily, China. The tax holidays provide for lower rates of taxation and require various thresholds of investment and business activities in those jurisdictions. Certain tax holidays begin to expire in fiscal year 2024 . The tax benefits from the above tax holidays for fiscal years 2023, 2022 and 2021 were not material. The estimates and assumptions used by the Company in computing the income taxes reflected in the Company’s consolidated financial statements could differ from the actual results reflected in the income tax returns filed during the subsequent year. Adjustments are recorded based on filed returns when such returns are finalized or the related adjustments are identified. 90 Table of Contents The aggregate changes in the balances of gross unrecognized tax benefits, excluding accrued interest and penalties, during fiscal years 2023, 2022 and 2021 were as follows (currency in thousands): For the year ended November 30: 2023 2022 2021 Gross unrecognized tax benefits at beginning of period $ 20,695 $ 26,330 $ 12,513 Increases in tax positions for prior years and acquisitions 859 1,069 17,579 Decreases in tax positions for prior years ( 3,093 ) ( 189 ) — Increases in tax positions for current year 3,101 955 827 Expiration of statutes of limitation ( 2,874 ) ( 3,074 ) ( 3,768 ) Settlements — ( 3,375 ) — Changes due to translation of foreign currencies 252 ( 1,021 ) ( 821 ) Gross unrecognized tax benefits at end of period $ 18,940 $ 20,695 $ 26,330 As of November 30, 2023, the amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate was $ 18.9 million. Unrecognized tax benefits that have a reasonable possibility of significantly decreasing within the 12 months following November 30, 2023 would not have a material impact on the tax rate. The Company recognizes interest and penalties related to unrecognized tax benefits in the provision for income taxes. The Company’s accrued interest and penalties at November 30, 2023, would not have a material impact on the effective tax rate if reversed. The provision for income taxes for each of the fiscal years ended November 30, 2023, 2022 and 2021 includes interest expense on unrecognized income tax benefits for current and prior years which is not significant to the Company’s Consolidated Statement of Income. The change in the balance of accrued interest for fiscal 2023, 2022 and 2021, includes the current year end accrual, an interest benefit resulting from the expiration of statutes of limitation, and the translation adjustments on foreign currencies. The Company conducts business primarily in the Americas, Europe and APJ, and as a result, one or more of its subsidiaries files income tax returns in the U.S. federal, various state, local and foreign tax jurisdictions. In the normal course of business, the Company is subject to examination by taxing authorities. The Company is no longer subject to examinations by the Internal Revenue Service for years before fiscal 2020. The Company is no longer subject to foreign or state income tax audits for returns covering years through 2005, and fiscal year 2013, respectively. In preparation of the Separation, SYNNEX entered into a Tax Matters Agreement with Concentrix effective on December 1, 2020 that governs the rights and obligations of SYNNEX and Concentrix for certain pre-Separation tax liabilities. The Tax Matters Agreement provides that SYNNEX and Concentrix will share certain pre-Separation income tax liabilities that arise from adjustments made by tax authorities to SYNNEX and Concentrix’ U.S. and certain non-U.S. income tax returns. In certain jurisdictions SYNNEX and Concentrix have joint and several liability for past income tax liabilities and accordingly, SYNNEX could be legally liable under applicable tax law for such liabilities and required to make additional tax payments. In addition, if the distribution of Concentrix' common shares to the SYNNEX stockholders is determined to be taxable, Concentrix and SYNNEX would share the tax liability equally, unless the taxability of the distribution is the direct result of action taken by either Concentrix or SYNNEX subsequent to the distribution in which case the party causing the distribution to be taxable would be responsible for any taxes imposed on the distribution. NOTE 17— COMMITMENTS AND CONTINGENCIES: As is customary in the technology industry, to encourage certain customers to purchase products from us, the Company also has other financing agreements with financial institutions to provide inventory financing facilities to the Company’s customers and allow certain customers of the Company to finance their purchases directly with the financial institutions. The Company is contingently liable to repurchase inventory sold under these agreements in the event of any default by its customers under the agreement and such inventory being repossessed by the financial institutions. As the Company does not have access to information regarding the amount of inventory purchased from the Company still on hand with the customer at any point in time, the Company’s repurchase obligations relating to inventory cannot be reasonably estimated. Losses, if any, would be the difference between the repossession cost and the resale value of the inventory. Repurchases under these arrangements have been insignificant to date and the Company is not aware of any pending customer defaults or repossession obligations. The Company believes that, based on historical experience, the likelihood of a material loss pursuant to these inventory repurchase obligations is remote. 91 Table of Contents The French Autorité de la Concurrence (“Competition Authority”) began in 2013 an investigation into the French market for certain products of Apple, Inc., (“Apple”) for which the Company is a distributor. In March 2020, the Competition Authority imposed fines on Tech Data, on another distributor, and on Apple, finding that Tech Data entered into an anticompetitive agreement with Apple regarding volume allocations of Apple products. The initial fine imposed on Tech Data was € 76.1 million. The Company appealed its determination to the French courts, seeking to set aside or reduce the fine. Although the Company believed it had strong arguments on appeal, the Company determined that the best estimate of probable loss related to this matter as of November 30, 2021 was € 36.0 million. Under French law, the pendency of the Company’s appeal does not suspend the obligation to pay the fine. Tech Data agreed with the French authorities to make eight equal installment payments in relation to the fine assessed for a total amount of € 22.8 million on a quarterly basis from January 2021 through October 2022 . On October 6, 2022, the appeals court issued a ruling that reduced the fine imposed on the Company from € 76.1 million to € 24.9 million. The Company continues to contest the arguments of the Competition Authority and has further appealed this matter. As a result of the appeals court ruling, the Company has determined that the best estimate of probable loss related to this matter as of November 30, 2023 is € 24.9 million (approximately $ 27.3 million as of November 30, 2023), which was paid in full in fiscal year 2022. The Company decreased its accrual established for this matter by $ 10.8 million during fiscal year 2022 which is recorded in "Other (expense) income, net" in the Consolidated Statement of Operations . A civil lawsuit related to this matter, alleging anticompetitive actions in association with the established distribution networks for Apple, Tech Data and another distributor was filed by eBizcuss. The Company is currently evaluating this matter and cannot currently estimate the probability or amount of any potential loss. From time to time, the Company receives notices from third parties, including customers and suppliers, seeking indemnification, payment of money or other actions in connection with claims made against them. Also, from time to time, the Company has been involved in various bankruptcy preference actions where the Company was a supplier to the companies now in bankruptcy. In addition, the Company is subject to various other claims, both asserted and unasserted, that arise in the ordinary course of business. The Company evaluates these claims and records the related liabilities. It is possible that the ultimate liabilities could differ from the amounts recorded. The Company does not believe that the above commitments and contingencies will have a material adverse effect on the Company’s results of operations, financial position or cash flows. 92 Table of Contents TD SYNNEX CORPORATION SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS For the Fiscal Years Ended November 30, 2023, 2022 and 2021 (in thousands) (Amounts may not add or compute due to rounding) Balances at Beginning of Fiscal Year Charged to Revenue and Expense, net Additions and Measurement Period Adjustments Related to Acquisitions Deductions, Reclassifications and Write-offs Balances at End of Fiscal Year Fiscal Year Ended November 30, 2021 Allowance for sales returns-gross $ 94,622 $ ( 12,241 ) $ 89,321 $ 167 $ 171,869 Allowance for deferred tax assets 5,492 — 120,411 ( 2,468 ) 123,435 Fiscal Year Ended November 30, 2022 Allowance for sales returns-gross $ 171,869 $ 43,127 $ — $ ( 9,172 ) $ 205,825 Allowance for deferred tax assets 123,435 ( 10,837 ) ( 19,445 ) 9,738 102,891 Fiscal Year Ended November 30, 2023 Allowance for sales returns-gross $ 205,825 $ 21,342 $ — $ ( 57,132 ) $ 170,035 Allowance for deferred tax assets 102,891 ( 933 ) — ( 9,587 ) 92,371 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.