What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-04-04 compared with 2023-10-03 · 275 added, 288 removed, 446 unchanged (56% of the section changed)

3 unchanged sentences

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

August 31, 2023 November 30, 2022

February 29, 2024 November 30, 2023

Current assets:

23 unchanged sentences

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

Common stock, $ 0.001 par value, 200,000 shares authorized, 99,012 and 98,696 shares issued as of August 31, 2023 and November 30, 2022, respectively

Common stock, $ 0.001 par value, 200,000 shares authorized, 99,012 shares issued as of February 29, 2024 and November 30, 2023

Additional paid-in capital 7,438,820 7,435,274

Treasury stock, 6,978 and 4,049 shares as of August 31, 2023 and November 30, 2022, respectively

Treasury stock, 12,171 and 10,343 shares as of February 29, 2024 and November 30, 2023, respectively

( 1,138,919 ) ( 949,714 )

8 unchanged sentences

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

Three Months Ended Nine Months Ended

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

Three Months Ended

February 29, 2024 February 28, 2023

Revenue $ 13,975,253 $ 15,125,371

18 unchanged sentences

TD SYNNEX CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(currency in thousands)

Three Months Ended Nine Months Ended

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

Three Months Ended

February 29, 2024 February 28, 2023

Net income $ 172,128 $ 167,020

Other comprehensive income (loss):

Unrealized gains on cash flow hedges during the period, net of tax expense of $ 0 and ($ 2,621 ) for the three months ended August 31, 2023 and 2022, respectively, and ($ 235 ) and ($ 9,043 ) for the nine months ended August 31, 2023 and 2022, respectively

— 8,024 702 27,654

Reclassification of net (gains) losses on cash flow hedges to net income, net of tax expense (benefit) of $ 880 and ($ 1,367 ) for the three months ended August 31, 2023 and 2022, respectively, and $ 1,766 and ($ 6,051 ) for the nine months ended August 31, 2023 and 2022, respectively

( 2,756 ) 4,185 ( 5,453 ) 18,499

Total change in unrealized (losses) gains on cash flow hedges, net of taxes ( 2,756 ) 12,209 ( 4,751 ) 46,153

Foreign currency translation adjustments and other, net of tax benefit (expense) of $ 2,807 and $ 22 for the three months ended August 31, 2023 and 2022, respectively, and $ 6,355 and ($ 84 ) for the nine months ended August 31, 2023 and 2022, respectively

77,802 ( 336,271 ) 224,501 ( 503,837 )

Reclassification of net foreign currency translation adjustment realized upon sale of foreign subsidiary, net of tax expense of $ 0 for the three and nine months ended August 31, 2023

Other comprehensive (loss) income:

Unrealized gains on cash flow hedges during the period, net of tax expense of $ 0 and ($ 289 ) for the three months ended February 29, 2024 and February 28, 2023, respectively

Reclassification of net (gains) on cash flow hedges to net income, net of tax expense of $ 0 and $ 285 for the three months ended February 29, 2024 and February 28, 2023, respectively

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

Foreign currency translation adjustments and other, net of tax (expense) benefit of ($ 1,348 ) and $ 1,919 for the three months ended February 29, 2024 and February 28, 2023, respectively

( 31,824 ) 84,089

Other comprehensive income (loss) 74,468 ( 324,062 ) 219,172 ( 457,684 )

Comprehensive income (loss) $ 213,730 $ ( 175,227 ) $ 658,541 $ ( 27,608 )

Other comprehensive (loss) income ( 31,824 ) 84,101

Comprehensive income $ 140,304 $ 251,121

(Amounts may not add or compute due to rounding)

3 unchanged sentences

(currency in thousands, except per share amounts)

Three Months Ended Nine Months Ended

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

Three Months Ended

February 29, 2024 February 28, 2023

Total Stockholders' equity, beginning balance $ 8,183,182 $ 8,025,506

4 unchanged sentences

( 13,944 ) 2,057

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

Ending balance 7,438,919 7,400,851

12 unchanged sentences

Beginning balance ( 507,248 ) ( 719,710 )

Other comprehensive income (loss) 74,468 ( 324,062 ) 219,172 ( 457,684 )

Other comprehensive (loss) income ( 31,824 ) 84,101

Ending balance ( 539,072 ) ( 635,609 )

6 unchanged sentences

(currency in thousands)

Nine Months Ended

August 31, 2023 August 31, 2022

Three Months Ended

February 29, 2024 February 28, 2023

Cash flows from operating activities:

3 unchanged sentences

Share-based compensation

17,490 24,595

Provision for doubtful accounts

Other 1,170 2,326

Changes in operating assets and liabilities:

Changes in operating assets and liabilities, net of acquisition of businesses:

Accounts receivable, net 1,343,075 187,536

6 unchanged sentences

Purchases of property and equipment

( 41,088 ) ( 37,278 )

Acquisition of businesses, net of cash acquired

Other 1,621 3,071

2 unchanged sentences

Dividends paid

( 35,652 ) ( 33,212 )

Proceeds from issuance of common stock and reissuances of treasury stock

Repurchases of common stock

( 199,225 ) ( 114,800 )

Repurchases of common stock for tax withholdings on equity awards

( 4,798 ) ( 6,681 )

Net (repayments) borrowings on revolving credit loans ( 56,055 ) 303,349

Principal payments on long-term debt ( 18,204 ) ( 21,166 )

Proceeds from issuance of common stock and reissuances of treasury stock 7,628 6,016

Repurchases of common stock for tax withholdings on equity awards ( 8,593 ) ( 5,986 )

Borrowings on long-term debt 51,837 —

Other 375 ( 665 )

Net cash used in financing activities ( 405,621 ) ( 159,246 )

Effect of exchange rate changes on cash, cash equivalents and restricted cash 50,089 ( 55,916 )

Net increase (decrease) in cash, cash equivalents and restricted cash 728,016 ( 643,936 )

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

Cash, cash equivalents and restricted cash at end of period $ 1,250,872 $ 350,977

Net cash (used in) provided by financing activities ( 311,207 ) 129,547

Effect of exchange rate changes on cash and cash equivalents

( 8,422 ) 23,884

Net (decrease) increase in cash and cash equivalents ( 2,830 ) 16,429

Cash and cash equivalents at beginning of period

1,033,776 522,856

Cash and cash equivalents at end of period

$ 1,030,946 $ 539,285

(Amounts may not add or compute due to rounding)

2 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three and nine months ended August 31, 2023 and 2022

For the three months ended February 29, 2024 and February 28, 2023

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

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.

TD SYNNEX Corporation (together with its subsidiaries, herein referred to as "TD SYNNEX", "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.

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

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

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

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

1 unchanged sentence

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

The accompanying interim unaudited Consolidated Financial Statements as of August 31, 2023 and for the three and nine months ended August 31, 2023 and 2022 have been prepared by the Company, without audit, in accordance with the rules and regulations of the United States ("U.S.") Securities and Exchange Commission ("SEC").

The accompanying interim unaudited Consolidated Financial Statements as of February 29, 2024 and for the three months ended February 29, 2024 and February 28, 2023 have been prepared by the Company, without audit, in accordance with the rules and regulations of the United States ("U.S.") Securities and Exchange Commission ("SEC").

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

9 unchanged sentences

Actual results could differ from the estimates.

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three and nine months ended August 31, 2023 and 2022

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

Concentration of Credit Risk

1 unchanged sentence

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

Through August 31, 2023, the Company has not experienced any material credit losses on such deposits and derivative instruments.

Through February 29, 2024, the Company has not experienced any material credit losses on such deposits and derivative instruments.

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended February 29, 2024 and February 28, 2023

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

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

4 unchanged sentences

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

Three Months Ended Nine Months Ended

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

10 % 12 % 10 % 11 %

Cisco Systems, Inc.

10 % N/A ( 1 )

10 % 10 % N/A ( 1 )

_________________________

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

One customer accounted for 11 % of the Company's total revenue during both the three and nine months ended August 31, 2023.

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

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

As of August 31, 2023 and November 30, 2022, no single customer comprised more than 10% of the consolidated accounts receivable balance.

Three Months Ended

February 29, 2024 February 28, 2023

One customer accounted for 10 % and 11 % of the Company's total revenue during the three months ended February 29, 2024 and February 28, 2023, respectively.

As of February 29, 2024 and November 30, 2023, no single customer comprised more than 10% of the consolidated accounts receivable balance.

Accounts Receivable

4 unchanged sentences

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.

The Company has uncommitted accounts receivable purchase agreements 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 August 31, 2023 and November 30, 2022, accounts receivable sold to and held by the financial institutions under these programs were $ 834.5 million and $ 1.4 billion, respectively.

As of February 29, 2024 and November 30, 2023, accounts receivable sold to and held by the financial institutions under these programs were $ 1.2 billion and $ 864.6 million, respectively.

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

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

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three and nine months ended August 31, 2023 and 2022

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

Discount fees for these programs totaled $ 16.0 million and $ 11.7 million in the three months ended February 29, 2024 and February 28, 2023, respectively.

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

3 unchanged sentences

The Company generates revenue primarily from the sale of various IT products.

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended February 29, 2024 and February 28, 2023

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

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.

6 unchanged sentences

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

In relation to product support, supply chain management and other services 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.

4 unchanged sentences

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

Such arrangements include supplier service contracts, post-contract software support services, 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.

Recently Adopted Accounting Pronouncements

In September 2022, the FASB issued an accounting standards update, ASU 2022-04, which requires new enhanced disclosures by the buyer in supplier finance programs.

Disclosures will include key terms of the program, including payment terms, along with the amount of related obligations, the financial statement caption that includes such obligations, and a rollforward of activity related to the obligations during the period.

The new accounting standard must be adopted retrospectively to the earliest comparative period presented, except for the rollforward requirement, which should be adopted prospectively.

The Company adopted this standard during the fiscal quarter ended February 29, 2024, except for the rollforward requirement which will be effective for the Company beginning with the quarter ending February 28, 2025.

The adoption of the new standard did not have an impact on the Company’s results of operations, financial condition, or cash flows.

For the required disclosures of key terms and amounts outstanding under the Company’s supplier finance programs, see Note 1 1 – Supplier Finance Programs.

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three and nine months ended August 31, 2023 and 2022

For the three months ended February 29, 2024 and February 28, 2023

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

Reclassifications

Certain reclassifications have been made to prior period amounts in the Consolidated Financial Statements to conform to the current period presentation.

These reclassifications did not have a material impact on previously reported amounts.

Recently Issued Accounting Pronouncements

In September 2022, the FASB issued an accounting standards update which will require new enhanced disclosures by the buyer in supplier finance programs.

The new accounting standard must be adopted retrospectively to the earliest comparative period presented, except for the rollforward requirement, which should be adopted prospectively.

The accounting standard is effective for the Company beginning with the quarter ending February 29, 2024, except for the rollforward requirement which is effective for the quarter ending February 28, 2025.

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 ending November 30, 2025, and for subsequent interim periods.

Early adoption is permitted.

While the new accounting standard is not expected to have an impact on the Company's financial condition, results of operations or cash flows, the Company is currently evaluating the impact the new accounting standard will have on its disclosures in the notes to the consolidated financial statements.

The Company is evaluating the terms of its arrangements with certain of its suppliers and currently estimates that approximately $ 2.0 billion to $ 2.5 billion of balances included in "Accounts payable" on the Consolidated Balance Sheet as of August 31, 2023 may be within the scope of the standard.

In March 2020, the FASB issued optional guidance for a limited time to ease the potential burden in accounting for or recognizing the effects of reference rate reform, particularly, the risk of cessation of the London Interbank Offered Rate (“LIBOR”) on financial reporting.

The guidance provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met.

The amendments are elective and are effective upon issuance for all entities through December 31, 2022, which was extended through December 31, 2024 per an update the FASB issued in December 2022.

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

The adoption of this new guidance did not have any material impacts for the Company.

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 ending 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— 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”).

Acquisition, integration and restructuring costs are primarily comprised of costs related to the Merger (as defined below), along with $ 3.5 million of costs during the three months ended February 28, 2023 related to the Global Business Optimization 2 Program initiated by Tech Data prior to the Merger (the “GBO 2 Program”).

The GBO 2 Program was completed in fiscal year 2023.

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").

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.

1 unchanged sentence

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

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

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

Long-lived asset charges and termination fees include accelerated depreciation and amortization expense of $ 0.4 million and $ 6.2 million recorded during the three months ended February 29, 2024 and February 28, 2023, respectively due to changes in asset useful lives in conjunction with the consolidation of certain IT systems, along with $ 6.6 million and $ 10.2 million recorded during the three months ended February 29, 2024 and February 28, 2023, respectively for termination fees related to certain IT systems.

Stock-based compensation expense primarily relates to costs associated with the conversion of certain Tech Data performance-based equity awards issued prior to the Merger into restricted shares of TD SYNNEX (refer to Note 4 - Share-Based Compensation for further information) and expenses for certain restricted stock awards issued in conjunction with the Merger.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three and nine months ended August 31, 2023 and 2022

For the three months ended February 29, 2024 and February 28, 2023

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

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

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

Three Months Ended Nine Months Ended

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

The Company incurred $ 7.2 million of costs in connection with the VSP during the three months ended February 29, 2024, including $ 6.0 million of severance costs and $ 1.2 million of duplicative labor costs.

During the three months ended February 29, 2024 and February 28, 2023, acquisition and integration expenses related to the Merger were composed of the following:

Three Months Ended

February 29, 2024 February 28, 2023

(currency in thousands)

Professional services costs $ 9,429 $ 6,810

3 unchanged sentences

Voluntary severance program costs

37,178 — 37,178 —

Total $ 31,649 $ 47,714

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 $ 3.0 million and $ 9.0 million during the three and nine months ended August 31, 2023, respectively, and $ 6.6 million and $ 23.8 million during the three and nine months ended August 31, 2022, respectively.

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

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

NOTE 4— SHARE-BASED COMPENSATION:

Overview of TD SYNNEX Stock Incentive Plans

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

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

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

The following tables summarize the Company's share-based awards activity for TD SYNNEX stock incentive plans during the three months ended February 29, 2024.

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

(shares in thousands)

Stock options

1 unchanged sentence

Exercised ( 33 )

Balances as of August 31, 2023

Balances as of February 29, 2024

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three and nine months ended August 31, 2023 and 2022

For the three months ended February 29, 2024 and February 28, 2023

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

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

(shares in thousands)

RSAs and RSUs

Nonvested as of November 30, 2022

Non-vested as of November 30, 2023

Vested ( 138 )

Canceled ( 67 )

Nonvested as of August 31, 2023

Attainment adjustments (1)

Non-vested as of February 29, 2024

__________________

(1) During the three months ended February 29, 2024, the attainment on PRSUs vested was adjusted to reflect actual performance.

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

Three Months Ended Nine Months Ended

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

Three Months Ended

February 29, 2024 February 28, 2023

(currency in thousands)

Selling, general and administrative expenses $ 17,490 $ 13,074

3 unchanged sentences

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 into restricted shares of TD SYNNEX that vest over two years .

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

Restricted shares

Nonvested as of November 30, 2022

Vested ( 15 )

Canceled ( 34 )

Nonvested as of August 31, 2023

The restricted shares had a fair value of $ 127.60 per share upon closing of the Merger which is being recorded as share-based compensation expense on a straight-line basis over the vesting period in “Acquisition, integration, and restructuring costs” in the Consolidated Statement of Operations.

The Company recorded $ 9.6 million and $ 29.2 million of share-based compensation expense related to these restricted shares in “Acquisition, integration, and restructuring costs” during the three and nine months ended August 31, 2023, respectively, and $ 11.4 million and $ 34.5 million during the three and nine months ended August 31, 2022, respectively.

All of the remaining unvested restricted shares as of August 31, 2023 vested on September 1, 2023.

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

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.

Vesting of the restricted shares was completed as of September 1, 2023, therefore there was no related share-based compensation expense recorded by the Company during the three months ended February 29, 2024.

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

NOTE 5— STOCKHOLDERS' EQUITY:

Share Repurchase Program

In January 2023, the Board of Directors authorized a three-year $ 1.0 billion 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, including pursuant to one or more Rule 10b5-1 trading plans adopted in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934.

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three and nine months ended August 31, 2023 and 2022

For the three months ended February 29, 2024 and February 28, 2023

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

On January 31, 2024, the Company announced the closing of a secondary public offering (the "January Offering") of an aggregate of 8.8 million shares (which includes approximately 1.1 million additional shares that underwriters had the option to purchase) of its common stock that were sold by certain entities managed by affiliates of Apollo Global Management, Inc (the "Selling Stockholders").

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

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

Also pursuant to the related underwriting agreement, the Company repurchased 1.4 million shares of its common stock from the underwriters as part of the January Offering, at a repurchase price of $ 100.50 per share, resulting in a purchase price of approximately $ 138.2 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.

As of February 29, 2024, the Company had $ 196.7 million available for future repurchases of its common stock under the authorized share repurchase program.

The Company's common share repurchase activity for the three months ended February 29, 2024 is summarized as follows:

(shares in thousands, except per share amounts)

Shares Weighted-average price per share

Treasury stock balance as of November 30, 2023

10,343 $ 91.82

Shares of treasury stock repurchased under share repurchase program (1)

Shares of treasury stock repurchased for tax withholdings on equity awards 47 101.86

Shares of treasury stock reissued for employee benefit plans ( 180 ) 92.70

Treasury stock balance as of February 29, 2024

12,171 $ 93.58

_________________________

(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 three months ended February 29, 2024 excludes amounts related to accrued excise tax that is included in "Other current liabilities" and "Treasury stock" on the Consolidated Balance Sheets at February 29, 2024.

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

In March 2024, the Board of Directors authorized a new $ 2.0 billion share repurchase program, supplementing the amount remaining under the existing 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, including pursuant to one or more Rule 10b5-1 trading plans adopted in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934.

The new March 2024 share repurchase authorization does not have an expiration date.

On March 27, 2024, the Company announced a secondary public offering (the "March Offering") of an aggregate of 12.1 million shares of its common stock (which includes approximately 1.6 million shares that underwriters had the option to purchase) that were sold by the Selling Stockholders.

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

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

Also pursuant to the related underwriting agreement, the Company repurchased 500 thousand shares of its common stock from the underwriters as part of the March Offering (the "March Concurrent Share Repurchase") at a repurchase price of $ 108.60 per share, resulting in a purchase price of $ 54.3 million.

The March Concurrent Share Repurchase was made under the Company's existing share repurchase program.

On March 26, 2024 , the Company announced that its Board of Directors declared a quarterly cash dividend of $ 0.40 per common share payable on April 26, 2024 to stockholders of record as of the close of business on April 12, 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.

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended February 29, 2024 and February 28, 2023

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

NOTE 6— EARNINGS PER COMMON SHARE:

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

Three Months Ended

February 29, 2024 February 28, 2023

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

Basic earnings per common share:

Net income attributable to common stockholders (1)

$ 170,624 $ 165,719

Weighted-average number of common shares - basic 87,891 94,259

Basic earnings per common share $ 1.94 $ 1.76

Diluted earnings per common share:

Net income attributable to common stockholders (1)

$ 170,628 $ 165,722

Weighted-average number of common shares - basic 87,891 94,259

Effect of dilutive securities:

Stock options and RSUs 312 280

Weighted-average number of common shares - diluted 88,203 94,539

Diluted earnings per common share $ 1.93 $ 1.75

Anti-dilutive shares excluded from diluted earnings per share calculation 220 238

_________________________

(1) RSAs granted by the Company are considered participating securities.

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

NOTE 7— 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:

August 31, 2023 November 30, 2022

Cash and cash equivalents $ 1,250,872 $ 522,604

Restricted cash included in other current assets — 252

Cash, cash equivalents and restricted cash $ 1,250,872 $ 522,856

Accounts receivable, net:

August 31, 2023 November 30, 2022

The following table summarizes accounts receivable, net:

February 29, 2024 November 30, 2023

(currency in thousands)

Accounts receivable $ 9,059,093 $ 10,448,567

1 unchanged sentence

Accounts receivable, net $ 8,902,803 $ 10,297,814

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended February 29, 2024 and February 28, 2023

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

Receivables from vendors, net:

August 31, 2023 November 30, 2022

The following table summarizes receivables from vendors, net:

February 29, 2024 November 30, 2023

(currency in thousands)

Receivables from vendors $ 934,495 $ 976,453

2 unchanged sentences

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, 2023

1 unchanged sentence

Write-offs, recoveries, reclassifications and foreign exchange translation ( 5,657 )

Balance as of August 31, 2023

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three and nine months ended August 31, 2023 and 2022

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

Allowance for doubtful receivables from vendors:

Balance as of February 29, 2024

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, 2023

1 unchanged sentence

Write-offs, recoveries, reclassifications and foreign exchange translation ( 157 )

Balance as of August 31, 2023

Balance as of February 29, 2024

Accumulated other comprehensive loss:

The components of accumulated other comprehensive loss (“AOCI”), net of taxes, were as follows:

Unrealized gains

hedges, net of

taxes Foreign currency

The following table summarizes the components of accumulated other comprehensive income (loss) ("AOCI"), net of taxes:

(currency in thousands) Foreign currency

adjustment and other,

net of taxes Total

Balance as of November 30, 2023

$ ( 507,248 )

Other comprehensive income before reclassification 702 224,501 225,203

Other comprehensive income (loss) before reclassification ( 31,824 )

Reclassifications from accumulated other comprehensive loss —

( 5,453 ) ( 578 ) ( 6,031 )

Balance as of August 31, 2023

Balance as of February 29, 2024

$ ( 539,072 )

Refer to Note 6 - Derivative Instruments for the location of gains and losses reclassified from AOCI to the Consolidated Statements of Operations on derivative instruments.

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.

Refer to Note 8 - Derivative Instruments for the location of gains and losses reclassified from accumulated other comprehensive income (loss) to the Consolidated Statements of Operations on derivative instruments.

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three and nine months ended August 31, 2023 and 2022

For the three months ended February 29, 2024 and February 28, 2023

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

17 unchanged sentences

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

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

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 February 29, 2024.

Net Investment Hedges

11 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three and nine months ended August 31, 2023 and 2022

For the three months ended February 29, 2024 and February 28, 2023

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

1 unchanged sentence

The fair values of the Company’s derivative instruments are disclosed in Note 9 - Fair Value Measurements and summarized in the table below:

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

Balance Sheet Line Item (currency in thousands)

February 29, 2024 November 30, 2023

Derivative instruments not designated as hedging instruments:

2 unchanged sentences

Other accrued liabilities 3,701 9,756

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:

2 unchanged sentences

Other long-term liabilities 14,325 18,041

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

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

The Company 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 are being reclassified from AOCI to "Interest expense and finance charges, net" over the period through October 2023.

Volume of Activity

4 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three and nine months ended August 31, 2023 and 2022

For the three months ended February 29, 2024 and February 28, 2023

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

1 unchanged sentence

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

Three Months Ended Nine Months Ended

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

Three Months Ended

Location of Gains (Losses) in Income February 29, 2024 February 28, 2023

(currency in thousands)

Derivative instruments not designated as hedging instruments:

(Losses) gains recognized from foreign exchange contracts, net⁽¹⁾ Cost of revenue $ ( 18,603 ) $ 36,804 $ ( 43,115 ) $ 40,922

Gains (losses) recognized from foreign exchange contracts, net⁽¹⁾ Cost of revenue $ 6,122 $ ( 16,901 )

Gains (losses) recognized from foreign exchange contracts, net⁽¹⁾ Other expense, net 2,056 ( 2,563 )

2 unchanged sentences

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

Gains (losses) on interest rate swaps reclassified from AOCI into income Interest expense and finance charges, net $ 3,636 $ ( 5,552 ) $ 7,219 $ ( 24,550 )

Gains on interest rate swaps reclassified from AOCI into income Interest expense and finance charges, net $ — $ 1,138

Derivative instruments designated as net investment hedges:

(Losses) recognized in OCI on foreign exchange forward contracts⁽²⁾ $ ( 12,580 ) $ — $ ( 27,237 ) $ —

Gains (losses) recognized in OCI on foreign exchange forward contracts $ 5,444 $ ( 8,025 )

Gains recognized in income (amount excluded from effectiveness testing) Interest expense and finance charges, net $ 2,256 $ 2,278

1 unchanged sentence

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

(2) The Company had no net investment hedges outstanding during the three and nine months ended August 31, 2022.

Except for the net investment hedge amount for fiscal 2023 shown above, there were no material gain or loss amounts excluded from the assessment of effectiveness.

Existing net gains in AOCI that are expected to be reclassified into earnings in the normal course of business within the next twelve months are $ 3.6 million.

Except for the net investment hedge amounts shown above, there were no 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.

2 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three and nine months ended August 31, 2023 and 2022

For the three months ended February 29, 2024 and February 28, 2023

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

4 unchanged sentences

Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).

The following table summarizes the valuation of the Company’s investments and financial instruments that are measured at fair value on a recurring basis:

As of August 31, 2023

The following table summarizes the valuation of the Company’s financial instruments that are measured at fair value on a recurring basis:

As of February 29, 2024

As of November 30, 2023

1 unchanged sentence

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

(currency in thousands)

Forward foreign currency exchange contracts not designated as hedges $ 5,202 $ — $ 5,202 $ — $ 4,326 $ — $ 4,326 $ —

Interest rate swaps — — — — 17,222 — 17,222 —

Forward foreign currency exchange contracts not designated as hedges $ 3,701 $ — $ 3,701 $ — $ 9,756 $ — $ 9,756 $ —

2 unchanged sentences

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 August 31, 2023.

The effect of nonperformance risk on the fair value of derivative instruments was not material as of August 31, 2023 and November 30, 2022.

There were no interest rate swaps outstanding as of February 29, 2024.

The effect of nonperformance risk on the fair value of derivative instruments was not material as of February 29, 2024 and November 30, 2023.

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 as of August 31, 2023 and November 30, 2022, respectively.

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

The estimated fair value of the Senior Notes was approximately $ 2.2 billion as of February 29, 2024 and November 30, 2023.

During the three months ended February 29, 2024, there were no transfers between the fair value measurement category levels.

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three and nine months ended August 31, 2023 and 2022

For the three months ended February 29, 2024 and February 28, 2023

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

1 unchanged sentence

Borrowings consist of the following:

August 31, 2023 November 30, 2022

Committed and uncommitted revolving credit facilities and borrowings $ 164,863 $ 193,128

February 29, 2024 November 30, 2023

(currency in thousands)

Current portion of TD SYNNEX Senior Notes

$ 700,000 $ 700,000

Current portion of TD SYNNEX term loan

75,000 75,000

Other short-term borrowings

151,807 208,694

Short-term borrowings before debt discount and issuance costs

1 unchanged sentence

current portion of unamortized debt discount and issuance costs

( 68 ) ( 109 )

Borrowings, current $ 926,739 $ 983,585

9 unchanged sentences

U nder the terms of the U.S.

AR Arrangement, the Company and its subsidiaries that are party to the U.S.

AR Arrangement, as amended December 11, 2023 and March 29, 2024, 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.

7 unchanged sentences

subsidiaries sell, on a revolving basis, their receivables to a wholly-owned, bankruptcy-remote subsidiary.

Such receivables, which are recorded in the Consolidated Balance Sheet, totaled approximately $ 3.3 billion and $ 2.9 billion as of August 31, 2023 and November 30, 2022, respectively.

Such receivables, which are recorded in the Consolidated Balance Sheet, totaled approximately $ 2.8 billion and $ 3.4 billion as of February 29, 2024 and November 30, 2023, 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.

2 unchanged sentences

There were no amounts outstanding under the U.S.

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

AR Arrangement at February 29, 2024 or November 30, 2023.

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three and nine months ended August 31, 2023 and 2022

For the three months ended February 29, 2024 and February 28, 2023

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

1 unchanged sentence

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 August 31, 2023 or November 30, 2022.

There were no amounts outstanding under the TD SYNNEX revolving credit facility at February 29, 2024 or November 30, 2023.

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.

5 unchanged sentences

The applicable margin on base rate loans is 1.00 % less than the corresponding margin on SOFR rate based loans.

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

The effective interest rate for the TD SYNNEX term loan was 6.81 % and 5.46 % as of August 31, 2023 and November 30, 2022, respectively.

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 6.80 % and 6.82 % as of February 29, 2024 and November 30, 2023, respectively.

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

5 unchanged sentences

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.

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three and nine months ended August 31, 2023 and 2022

For the three months ended February 29, 2024 and February 28, 2023

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

2 unchanged sentences

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.

In July 2022, the Company completed an offer to exchange (the "Exchange Offer") its outstanding unregistered Senior Notes for new registered notes (the "Exchange Notes").

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.

With respect to the 2024 Senior Notes, the Company is currently assessing its debt structure ahead of the August 9, 2024 maturity date, and its current intention is to refinance some or all of that debt prior to its maturity.

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

Most of these facilities are provided on an unsecured, short-term basis and are reviewed periodically for renewal.

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 $ 577.3 million in borrowing capacity as of February 29, 2024.

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

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

At August 31, 2023, the Company was also contingently liable for reimbursement obligations with respect to issued standby letters of credit in the aggregate outstanding amount of $ 57.4 million.

There was $ 151.8 million outstanding on these facilities at February 29, 2024, at a weighted average interest rate of 6.24 %, and there was $ 208.7 million outstanding at November 30, 2023, at a weighted average interest rate of 7.52 %.

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

At February 29, 2024, the Company was also contingently liable for reimbursement obligations with respect to issued standby letters of credit in the aggregate outstanding amount of $ 81.1 million.

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

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

dollars at August 31, 2023 exchange rates.

The maximum commitment amounts for local currency credit facilities have been translated into United States Dollars at February 29, 2024 exchange rates.

Covenant Compliance

1 unchanged sentence

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

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

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three and nine months ended August 31, 2023 and 2022

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

NOTE 9— EARNINGS PER COMMON SHARE:

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

Three Months Ended Nine Months Ended

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

Basic earnings per common share:

Net income attributable to common stockholders (1)

$ 138,260 $ 147,885 $ 436,069 $ 427,418

Weighted-average number of common shares - basic 92,590 95,115 93,400 95,355

Basic earnings per common share $ 1.49 $ 1.55 $ 4.67 $ 4.48

Diluted earnings per common share:

Net income attributable to common stockholders (1)

$ 138,263 $ 147,887 $ 436,076 $ 427,425

Weighted-average number of common shares - basic 92,590 95,115 93,400 95,355

Effect of dilutive securities:

Stock options and RSUs 291 292 276 293

Weighted-average number of common shares - diluted 92,881 95,407 93,676 95,648

Diluted earnings per common share $ 1.49 $ 1.55 $ 4.66 $ 4.47

Anti-dilutive shares excluded from diluted earnings per share calculation 303 235 282 241

_________________________

(1) RSAs granted by the Company are considered participating securities.

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

As of February 29, 2024, the Company was in compliance with the financial covenant requirements for the above arrangements.

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three and nine months ended August 31, 2023 and 2022

For the three months ended February 29, 2024 and February 28, 2023

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

NOTE 11 – SUPPLIER FINANCE PROGRAMS:

The Company has certain agreements with third-party financial institutions ("supplier finance programs"), which facilitate the participating vendors’ ability to sell their receivables from the Company to the third-party financial institutions, at the sole discretion of these vendors.

The Company is not party to the agreements between the vendor and the third-party financial institution.

As part of these arrangements, the Company generally receives more favorable payment terms from its vendors.

The Company’s rights and obligations to its vendors, including amounts due, are generally not impacted by supplier finance programs.

However, the Company agrees to make all payments to the third-party financial institutions, and the Company’s right to offset balances due from vendors against payment obligations is restricted by the agreements for those payment obligations that have been sold by the respective vendors.

The Company generally does not incur any fees under supplier finance programs;

however, the Company did recognize an immaterial amount of fees during the three months ended February 29, 2024 within "Cost of revenue" in the Company's Consolidated Statements of Operations related to an arrangement with a certain vendor.

As of both February 29, 2024 and November 30, 2023, the Company had $ 2.7 billion in obligations outstanding under these programs included in “ Accounts payable ” in the Company’s Consolidated Balance Sheets and all activity related to the obligations is presented within operating activities in the Consolidated Statements of Cash Flows.

NOTE 12— SEGMENT INFORMATION:

1 unchanged sentence

Americas Europe APJ Consolidated

Three Months Ended August 31, 2023

Revenue $ 8,879,585 $ 4,227,590 $ 853,440 $ 13,960,615

Operating income 192,606 29,531 18,096 240,233

Three Months Ended August 31, 2022

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

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

Nine Months Ended August 31, 2023

(currency in thousands)

Three Months Ended February 29, 2024

Revenue $ 7,903,096 $ 5,117,252 $ 954,905 $ 13,975,253

Operating income 159,682 108,325 34,565 302,572

Nine Months Ended August 31, 2022

Three Months Ended February 28, 2023

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

2 unchanged sentences

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

As of August 31, 2023 and November 30, 2022, MiTAC Holdings and its affiliates beneficially owned approximately 9.9 % and 9.7 % of the Company’s outstanding common stock, respectively.

Matthew Miau, Chairman Emeritus of the Company’s Board of Directors and a director, is the Chairman of MiTAC Holdings and a director or officer of MiTAC Holdings’ affiliates.

As of February 29, 2024 and November 30, 2023, MiTAC Holdings and its affiliates beneficially owned approximately 9.5 % and 9.3 % of the Company’s outstanding common stock, respectively.

Matthew Miau, who served as Chairman Emeritus of the Company’s Board of Directors and a director until his retirement from the Board effective as of March 20, 2024, is the Chairman of MiTAC Holdings and a director or officer of MiTAC Holdings’ affiliates.

Also effective as of March 20, 2024, the Company appointed Mr.

Ting Herh to serve on the Board as a director.

Herh also serves as an independent director on the board of MiTAC Holdings, a position he has held since May 2022.

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended February 29, 2024 and February 28, 2023

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

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 9.9 % of the Company’s outstanding common stock as of August 31, 2023.

As noted above, MiTAC Holdings and its affiliates in the aggregate beneficially owned approximately 9.5 % of the Company’s outstanding common stock as of February 29, 2024.

These shares are owned by the following entities:

As of August 31, 2023

(shares in thousands)

As of February 29, 2024

MiTAC Holdings (1)

2 unchanged sentences

(1) Shares are held as follows:

302 shares by Silver Star Developments Ltd.

and 2,595 shares by MiTAC International Corp., both of which are wholly-owned subsidiaries of MiTAC Holdings, along with 2,403 shares held directly by MiTAC Holdings.

Excludes 196 shares held directly by Mr.

Miau, 217 shares indirectly held by Mr.

Miau through a charitable remainder trust, and 190 shares held by his spouse.

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.

4 unchanged sentences

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

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three and nine months ended August 31, 2023 and 2022

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

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

Three Months Ended Nine Months Ended

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

Three Months Ended

February 29, 2024 February 28, 2023

(currency in thousands)

Purchases of inventories and services $ 56,130 $ 40,443

3 unchanged sentences

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

August 31, 2023 November 30, 2022

February 29, 2024 November 30, 2023

(currency in thousands)

Receivable from related parties (included in Accounts receivable, net) $ 6,782 $ 4,330

Payable to related parties (included in Accounts payable) 28,017 16,538

NOTE 12— 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.

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

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

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

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

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

As of August 31, 2023, the Company had $ 738.8 million available for future repurchases of its common stock under the authorized share repurchase program.

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three and nine months ended August 31, 2023 and 2022

For the three months ended February 29, 2024 and February 28, 2023

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

The Company's common share repurchase activity for the nine months ended August 31, 2023 is summarized as follows:

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)

Shares of treasury stock repurchased for tax withholdings on equity awards 83 103.74

Shares of treasury stock reissued for employee benefit plans ( 44 ) 87.93

Treasury stock balance as of August 31, 2023

6,978 $ 89.17

_________________________

( 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 nine months ended August 31, 2023 excludes $ 2.4 million of accrued excise tax that is included in "Other current liabilities" and "Treasury stock" on the Consolidated Balance Sheets at August 31, 2023.

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

On September 27, 2023 , the Company announced that its Board of Directors declared a quarterly cash dividend of $ 0.35 per common share payable on October 27, 2023 to stockholders of record as of the close of business on October 13, 2023 .

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

NOTE 14— COMMITMENTS AND CONTINGENCIES:

7 unchanged sentences

("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.

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

The initial fine imposed on the Company was € 76.1 million.

The Company appealed its determination to the French courts, seeking to set aside or reduce the fine.

On October 6, 2022, the appeals court issued a ruling that reduced the fine imposed on the Company from € 76.1 million to € 24.9 million.

As a result of the appeals court ruling, the Company determined that the best estimate of probable loss related to this matter is € 24.9 million (approximately $ 27.2 million as of August 31, 2023), which has been paid in full.

As a result of the appeals court ruling, the Company has determined that the best estimate of probable loss related to this matter is € 24.9 million (approximately $ 27.0 million as of February 29, 2024), which was paid in full in fiscal year 2022.

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

A civil lawsuit related to this matter, alleging anticompetitive actions in association with the established distribution networks for Apple, Tech Data and another distributor was filed by eBizcuss.

A civil lawsuit related to this matter, alleging anticompetitive actions in association with the established distribution networks for Apple, the Company 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.

TD SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three and nine months ended August 31, 2023 and 2022

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

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.

3 unchanged sentences

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

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”).

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

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

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

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

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

The Separation and Distribution agreement also included provisions that assign to each company responsibility for managing pending and future litigation related to the general corporate matters of SYNNEX arising prior to the Separation.

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.

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

What changed 10-Q

Item 1. Financial Statements