What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-04-04 compared with 2023-10-03 · 156 added, 164 removed, 242 unchanged (57% of the section changed)

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

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

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

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

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

These risks and uncertainties include, but are not limited to, those risks discussed herein and others, including risks related to the buying patterns of our customers, concentration of sales to large customers, the loss or consolidation of one or more of our significant original equipment manufacturer ("OEM") suppliers or customers, market acceptance of the products we assemble and distribute, competitive conditions in our industry and their impact on our margins, pricing and other terms with our OEM suppliers, our ability to gain market share, variations in supplier-sponsored programs, changes in our costs and operating expenses, increased inflation, dependence upon and trends in capital spending budgets in the IT industry, fluctuations in general economic conditions, changes in tax laws, risks associated with our international operations, uncertainties and variability in demand by our reseller and integration customers, supply shortages or delays, any termination or reduction in our floor plan financing arrangements, changes in value of foreign currencies and interest rates and other risk factors contained in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended November 30, 2023 and below under Part II, Item 1A, “Risk Factors.” These forward-looking statements speak only as of the date hereof.

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

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

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

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

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

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

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

• Invest in strategic technologies such as hybrid cloud, security, data analytics, artificial intelligence ("AI"), hyperscale infrastructure and services.

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

• Transform our company digitally through greater automation and advanced analytics, which we believe will enhance the customer experience, broaden our customer base, increase sales and augment our presence in high growth technologies.

• Expand our global footprint and enhance the operational excellence of our businesses around the world.

We offer a comprehensive catalog of technology products from original equipment manufacturers (“OEM”), suppliers of high-growth technologies such as converged and hyper-converged infrastructure, cloud, security, data/analytics/IoT and services.

We purchase IT hardware, software, and systems including personal computing devices and peripherals, mobile phones and accessories, printers, server and datacenter infrastructure, networking, communications and storage solutions, and systems components from our suppliers and sell them to our reseller and retail customers.

We offer a comprehensive catalog of technology products from original equipment manufacturers (“OEM”), such as personal computing devices, mobile phones and accessories, and strategic technologies such as cloud, security, data/analytics, AI and hyperscale infrastructure.

This enables us to offer comprehensive solutions to our reseller and retail customers.

Our reseller customers include value-added resellers, corporate resellers, government resellers, system integrators, direct marketers, retailers and managed service providers.

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Additionally, we provide systems design and integration solutions for data center servers and networking solutions built specific to our customers’ workloads and data center environments.

We group the majority of our offerings into two primary solutions portfolios, Endpoint Solutions and Advanced Solutions.

Our Endpoint Solutions portfolio primarily includes personal computing devices and peripherals, mobile phones and accessories, printers, peripherals, and supplies.

Our Advanced Solutions portfolio primarily includes data center technologies such as hybrid cloud, security, storage, networking, servers, software, converged and hyper-converged infrastructure and hyperscale infrastructure, via our Hyve business.

Our business is characterized by low gross profit as a percentage of revenue, or gross margin, and low operating income as a percentage of revenue, or operating margin.

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

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

A difficult and challenging economic environment, including the continued persistence of inflation and elevated interest rates, may also lead to consolidation or decline in the IT industries and increased price-based competition.

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

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

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

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

Three Months Ended Nine Months Ended

Statements of Operations Data:

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

Three Months Ended

Consolidated Statements of Operations Data:

February 29, 2024 February 28, 2023

Revenue 100.00 % 100.00 %

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

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

Revenue in constant currency is calculated by translating the revenue for the three months ended February 29, 2024 in the billing currency using the comparable prior period currency conversion rate.

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

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

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

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

• Non-GAAP net income, which is net income, adjusted to exclude acquisition, integration and restructuring costs, amortization of intangible assets, share-based compensation expense, purchase accounting adjustments and income taxes related to the aforementioned items.

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

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

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Finite-lived intangible assets are amortized over their estimated useful lives and are tested for impairment when events indicate that the carrying value may not be recoverable.

The amortization of intangible assets is reflected in our statements of operations.

The amortization of intangible assets is reflected in our Consolidated Statements of Operations.

Although intangible assets contribute to our revenue generation, the amortization of intangible assets does not directly relate to the sale of our products.

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

Share-based compensation expense is a non-cash expense arising from the grant of equity awards to employees based on the estimated fair value of those awards.

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

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

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

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

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

Three Months Ended Nine Months Ended

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

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

Three Months Ended February 29, 2024 and February 28, 2023:

The following table summarizes our revenue and change in revenue by segment for the three months ended February 29, 2024 and February 28, 2023:

Three Months Ended

February 29, 2024 February 28, 2023 Percent Change

Revenue in constant currency

(in thousands)

Revenue $ 13,975,253 $ 15,125,371 (7.6) %

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Consolidated Commentary

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

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

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

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

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

During the three months ended February 29, 2024, consolidated revenue and revenue in constant currency decreased by $1.2 billion and $1.3 billion, respectively, as compared to the prior year period.

The decreases are primarily driven by our Advanced Solutions portfolio due to market dynamics of the prior year which resulted in higher revenues from strong demand and backlog conversion, as well as a decline in our Endpoint Solutions portfolio.

A greater percentage of our revenues were presented on a net basis, which negatively impacted our revenue compared to the prior three months ended February 28, 2023 by approximately $450 million, or 3%.

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

Americas Commentary

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

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

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

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

During the three months ended February 29, 2024, Americas revenue and revenue in constant currency decreased by $735.6 million and $746.5 million, respectively, as compared to the prior year period.

A greater percentage of our revenues were presented on a net basis, which negatively impacted our revenue by approximately $350 million, or 4%, compared to the three months ended February 28, 2023.

Europe Commentary

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

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

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

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

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

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

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

During the three months ended February 29, 2024, Europe revenue and revenue in constant currency decreased by $403.2 million and $522.5 million, respectively, as compared to the prior year period.

A greater percentage of our revenues were presented on a net basis, which negatively impacted our revenue by approximately $100 million, or 2%, compared to the three months ended February 28, 2023.

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

APJ Commentary

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

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

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

Three Months Ended Percent Change Nine Months Ended Percent Change

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

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

During the three months ended February 29, 2024, APJ revenue decreased by $11.3 million, primarily due to the impact of changes in foreign currencies.

During the three months ended February 29, 2024, APJ revenue in constant currency increased by $16.4 million, as compared to the prior year period, driven primarily by growth in our Advanced Solutions portfolio in the region.

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

Three Months Ended

February 29, 2024 February 28, 2023 Percent Change

Non-GAAP gross profit & non-GAAP gross margin - Consolidated

(in thousands)

Revenue $ 13,975,253 $ 15,125,371 (7.6) %

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Non-GAAP gross margin 7.20 % 6.68 %

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

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

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

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

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

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

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

Our gross profit increased during the three months ended February 29, 2024, compared to the prior year period, primarily due to our improved gross margin along with a decrease in purchase accounting adjustments related to the Merger, partially offset by the decrease in revenues.

Our gross margin increased during the three months ended February 29, 2024, compared to the prior year period, primarily due to margin expansion in strategic technologies, the presentation of additional revenues on a net basis which positively impacted our gross margin by approximately 23 basis points, and the decrease in purchase accounting adjustments related to the Merger.

During the three months ended February 29, 2024, non-GAAP gross profit decreased, as compared to the prior year period, primarily due to the decrease in revenues, partially offset by an improvement in gross margin.

During the three months ended February 29, 2024, non-GAAP gross margin increased, as compared to the prior year period, primarily due to margin expansion in strategic technologies and the presentation of additional revenues on a net basis.

Selling, General and Administrative Expenses

Three Months Ended Percent

Change Nine Months Ended Percent

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

(in thousands) (in thousands)

Three Months Ended

February 29, 2024 February 28, 2023 Percent Change

(in thousands)

Selling, general and administrative expenses $ 671,545 $ 654,223 2.6 %

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

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

During the three months ended February 29, 2024, selling, general and administrative expenses increased, compared to the prior year period, primarily due to higher personnel costs.

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

A greater percentage of our revenue was presented on a net basis which contributed to the increase in selling, general and administrative expenses as a percentage of revenue by approximately 15 basis points.

Acquisition, Integration and Restructuring Costs

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

Acquisition, integration and restructuring costs are primarily comprised of costs related to the Merger, along with $3.5 million of costs in fiscal year 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.

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

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

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

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

Long-lived assets charges and termination fees include $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 to the Consolidated Financial Statements in Part I, Item 1 of this Report for further information) and expenses for certain restricted stock awards issued in conjunction with the Merger.

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

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

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

Three Months Ended Nine Months Ended

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

We 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

(in thousands)

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Voluntary severance program costs

37,178 — 37,178 —

Total $ 31,649 $ 47,714

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

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

GBO 2 Program

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

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

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

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

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

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

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

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

During the three months ended February 29, 2024, acquisition and integration expenses related to the Merger decreased, compared to the prior year period, primarily due to decreases in stock-based compensation expense and long-lived assets charges and termination fees, partially offset by voluntary severance program costs.

Operating Income

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

Three Months Ended Percent

Change Nine Months Ended Percent Change

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

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

Three Months Ended

February 29, 2024 February 28, 2023 Percent Change

Non-GAAP operating income & non-GAAP operating margin - Consolidated

(in thousands)

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

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Non-GAAP operating income $ 424,588 $ 442,891 (4.1) %

Operating margin 1.72 % 1.57 % 1.83 % 1.55 %

GAAP operating margin

2.17 % 1.97 %

Non-GAAP operating margin 3.04 % 2.93 %

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

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

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

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

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

Three Months Ended Percent Change Nine Months Ended Percent Change

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

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

Consolidated operating income increased during the three months ended February 29, 2024, compared to the prior year period, primarily due to decreases in acquisition, integration, and restructuring costs and the improvement in gross margin due to margin expansion in strategic technologies, partially offset by the decline in revenues and higher personnel costs.

Consolidated operating margin increased during the three months ended February 29, 2024, compared to the prior year period, primarily due to the improvement in gross margin due to margin expansion in strategic technologies, the presentation of additional revenues on a net basis, and decreases in acquisition, integration, and restructuring costs, partially offset by higher selling, general and administrative expenses as a percentage of revenue due to the decline in revenues and higher personnel costs.

Consolidated non-GAAP operating income decreased during the three months ended February 29, 2024, compared to the prior year period, primarily due to the decline in revenues and higher personnel costs, partially offset by an increase in gross margin due to margin expansion in strategic technologies.

Consolidated non-GAAP operating margin increased during the three months ended February 29, 2024, compared to the prior year period, primarily due to an increase in gross margin due to margin expansion in strategic technologies and the presentation of additional revenues on a net basis, partially offset by higher selling, general and administrative expenses as a percentage of revenue due to the decline in revenues and higher personnel costs.

Three Months Ended

February 29, 2024 February 28, 2023 Percent Change

Non-GAAP operating income & non-GAAP operating margin - Americas

(in thousands)

Revenue $ 7,903,096 $ 8,638,704

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Share-based compensation 11,798 9,362

Purchase accounting adjustments — 19,564 — 56,132

Non-GAAP operating income $ 240,305 $ 266,414 (9.8) %

Operating margin 2.17 % 1.82 % 2.13 % 1.78 %

GAAP operating margin

2.02 % 2.08 %

Non-GAAP operating margin 3.04 % 3.08 %

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

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

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

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

Three Months Ended Percent Change Nine Months Ended Percent Change

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

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

Americas operating income, on both a GAAP and non-GAAP basis, decreased during the three months ended February 29, 2024, as compared to the prior year period, primarily due to the decrease in revenues in the region.

Americas operating margin, on both a GAAP and non-GAAP basis, decreased during the three months ended February 29, 2024, compared to the prior year period, primarily due to higher selling, general and administrative expenses as a percentage of revenue due to the decrease in revenues, partially offset by increased gross margin due to the presentation of additional revenues on a net basis.

Three Months Ended

February 29, 2024 February 28, 2023 Percent Change

Non-GAAP operating income & non-GAAP operating margin - Europe

(in thousands)

Revenue $ 5,117,252 $ 5,520,437

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Non-GAAP operating income $ 147,842 $ 143,399 3.1 %

Operating margin 0.70 % 0.95 % 1.11 % 1.01 %

GAAP operating margin

2.12 % 1.60 %

Non-GAAP operating margin 2.89 % 2.60 %

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

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

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

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

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

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

Three Months Ended Percent Change Nine Months Ended Percent Change

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

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

Europe operating income increased during the three months ended February 29, 2024, compared to the prior year period, primarily due to an increase in gross margin due to margin expansion in strategic technologies, along with decreases in acquisition, integration and restructuring costs and purchase accounting adjustments, partially offset by the decline in revenues and an increase in personnel costs.

Europe operating margin increased during the three months ended February 29, 2024, compared to the prior year period, primarily due to an increase in gross margin due to margin expansion in strategic technologies and the presentation of additional revenues on a net basis, along with decreases in acquisition, integration and restructuring costs and purchase accounting adjustments, partially offset by higher selling, general and administrative expenses as a percentage of revenue due to the decrease in revenues and higher personnel costs.

Europe non-GAAP operating income increased during the three months ended February 29, 2024, compared to the prior year period, primarily due to an increase in gross margin due to margin expansion in strategic technologies, partially offset by the decline in revenues and an increase in personnel costs.

Europe non-GAAP operating margin increased during the three months ended February 29, 2024, compared to the prior year period, primarily due to an increase in gross margin due to margin expansion in strategic technologies and the presentation of additional revenues on a net basis, partially offset by higher selling, general and administrative expenses as a percentage of revenue due to the decrease in revenues and higher personnel costs.

Three Months Ended

February 29, 2024 February 28, 2023 Percent Change

Non-GAAP operating income & non-GAAP operating margin - APJ

(in thousands)

Revenue $ 954,905 $ 966,230

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Non-GAAP operating income $ 36,441 $ 33,078 10.2 %

Operating margin 2.12 % 2.17 % 2.72 % 2.25 %

GAAP operating margin

3.62 % 3.15 %

Non-GAAP operating margin 3.82 % 3.42 %

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

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

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

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

During the three months ended February 29, 2024, APJ operating income and margin increased, on both a GAAP and non-GAAP basis, compared to the prior year period, primarily due to increased gross profit and gross margin in the region due to margin expansion in strategic technologies.

Interest Expense and Finance Charges, Net

Three Months Ended Percent

Change Nine Months Ended Percent

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

(in thousands) (in thousands)

Three Months Ended

February 29, 2024 February 28, 2023 Percent Change

(in thousands)

Interest expense and finance charges, net $ 75,891 $ 80,200 (5.4) %

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

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

During the three months ended February 29, 2024, our interest expense and finance charges, net decreased, compared to the prior year period, primarily due to higher income earned on our cash investments, partially offset by increased costs associated with the sale of accounts receivable due to higher discount fees, which totaled $ 16.0 million in the three months ended February 29, 2024, compared to $ 11.7 million in the three months ended February 28, 2023.

Other Expense, Net

Three Months Ended Percent

Change Nine Months Ended Percent

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

(in thousands) (in thousands)

Three Months Ended

February 29, 2024 February 28, 2023 Change in Dollars

(in thousands)

Other expense, net $ 2,884 $ 156 $ 2,728

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

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

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

During the three months ended February 29, 2024, our other expense, net increased, compared to the prior year period, primarily due to increased hedging costs.

Provision for Income Taxes

Three Months Ended Percent

Change Nine Months Ended Percent

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

(in thousands) (in thousands)

Three Months Ended

February 29, 2024 February 28, 2023 Percent Change

(in thousands)

Provision for income taxes $ 51,669 $ 50,786 1.7 %

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

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

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

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

During the three months ended February 29, 2024, our income tax expense slightly increased, compared to the prior year period, primarily due to higher income during the period, partially offset by a slightly lower effective tax rate.

The effective tax rate was slightly lower during the three months ended February 29, 2024 as compared to the three months ended February 28, 2023, primarily due to the relative mix of earnings and losses within the taxing jurisdictions in which we operate.

Net Income and Diluted EPS

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

Three Months Ended Nine Months Ended

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

Net Income - Consolidated (in thousands)

Net income $ 139,262 $ 148,835 $ 439,369 $ 430,076

Three Months Ended

February 29, 2024 February 28, 2023

Non-GAAP net income - Consolidated

(in thousands)

$ 172,128 $ 167,020

Acquisition, integration and restructuring costs 31,649 53,424

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Income taxes related to the above (27,921) (34,756)

Income tax capital loss carryback benefit — (5,053) — (8,299)

Non-GAAP net income $ 266,223 $ 279,235

Three Months Ended Nine Months Ended

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

Three Months Ended

Non-GAAP diluted EPS

February 29, 2024 February 28, 2023

Diluted EPS (1)

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Income taxes related to the above (0.31) (0.36)

Income tax capital loss carryback benefit — (0.05) — (0.09)

Non-GAAP diluted EPS $ 2.99 $ 2.93

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

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

For purposes of calculating Diluted EPS, net income allocated to participating securities was approximately 0.9% and 0.8% of net income for the three months ended February 29, 2024 and February 28, 2023, respectively.

Liquidity and Capital Resources

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Three Months Ended

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

February 29, 2024 November 30, 2023 February 28, 2023

(Amounts in thousands)

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

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

Our CCC was 21 days and 23 days as of February 29, 2024 and November 30, 2023, respectively.

Our CCC decreased as compared to November 30, 2023 primarily due to a decrease in DSO partially offset by a decrease in DPO, as both our accounts receivable and accounts payable balances declined due to the timing of cash receipts and payments.

Our CCC was 21 days and 26 days as of February 29, 2024 and February 28, 2023, respectively.

The decrease was primarily due to an increase in our DPO related to the timing of payments, along with a decrease in our DIO due to a decline in our inventory balances which were higher in the prior year as a result of strategic inventory purchases that occurred during fiscal year 2022.

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

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Operating Activities

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

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

Net cash provided by operating activities was $384.7 million during the three months ended February 29, 2024, compared to net cash used in operating activities of $102.8 million during the three months ended February 28, 2023.

The increase in net cash provided by operating activities was primarily due to a decrease in accounts receivable during the three months ended February 29, 2024 related to timing of cash receipts, partially offset by a decrease in inventory during the three months ended February 28, 2023 due to the ongoing sell-through of strategic inventory purchases that occurred during fiscal year 2022.

Investing Activities

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

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

Net cash used in investing activities during the three months ended February 29, 2024 and February 28, 2023 was $67.9 million and $34.2 million, respectively.

The increase in cash used in investing activities is primarily due to cash paid for the acquisition of a business of $28.4 million.

Financing Activities

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

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

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

Net cash used in financing activities during the three months ended February 29, 2024 was $311.2 million as compared to net cash provided by financing activities during the three months ended February 28, 2023 of $129.5 million.

The increase in cash used in financing activities is primarily due to a decrease in net short-term borrowings needed to fund working capital requirements, which totaled $56.1 million of net repayments during the three months ended February 29, 2024 compared to $303.3 million of net borrowings during the three months ended February 28, 2023.

Additionally, there was an increase in repurchases of common stock under our share repurchase program, which totaled $199.2 million during the three months ended February 29, 2024, compared to $114.8 million during the three months ended February 28, 2023.

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

Capital Resources

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

Our cash and cash equivalents totaled $1.0 billion as of February 29, 2024 and November 30, 2023.

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

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Repatriation of some foreign balances is restricted by local laws.

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

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

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

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

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

AR Arrangement has a maturity date of December 2024.

AR Arrangement, as amended December 11, 2023 and March 29, 2024, has a maturity date of December 2025.

We also have a credit agreement, dated as of April 16, 2021 and amended May 22, 2023 (as amended, the "TD SYNNEX Credit Agreement"), pursuant to which we received commitments for the extension of a senior unsecured revolving credit facility not to exceed an aggregate principal amount of $3.5 billion, which revolving credit facility (the "TD SYNNEX revolving credit facility") may, at our request but subject to the lenders' discretion, potentially be increased by up to an aggregate amount of $500.0 million.

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

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

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

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

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There were no amounts outstanding under the U.S.

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

We have various other committed and uncommitted lines of credit with financial institutions, finance leases, short-term loans, term loans, credit facilities and book overdraft facilities, totaling approximately $589.1 million in borrowing capacity as of August 31, 2023.

AR Arrangement or the TD SYNNEX revolving credit facility at February 29, 2024 or November 30, 2023.

We have various other committed and uncommitted lines of credit with financial institutions, finance leases, short-term loans, term loans, credit facilities and book overdraft facilities, totaling approximately $577.3 million in borrowing capacity as of February 29, 2024.

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

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%.

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 on these facilities at November 30, 2023, at a weighted average interest rate of 7.52%.

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

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

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

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

We had total outstanding borrowings of approximately $4.0 billion and $4.1 billion as of February 29, 2024 and November 30, 2023, respectively.

Our outstanding borrowings include Senior Notes of $2.5 billion at both February 29, 2024 and November 30, 2023, and term loans under the term loan facility of the TD SYNNEX Credit Agreement of approximately $1.3 billion and $1.4 billion at February 29, 2024 and November 30, 2023, respectively.

For additional information on our borrowings, see Note 10 - Borrowings to the Consolidated Financial Statements included in Part I, Item 1 of this Report.

With respect to our $700.0 million of 1.25% Senior Notes due August 9, 2024, we are currently assessing our debt structure ahead of the maturity date, and our current intention is to refinance some or all of that debt prior to its maturity.

Accounts Receivable Purchase Agreements

We have uncommitted supply-chain financing programs under which trade accounts receivable owed by certain customers may be acquired, without recourse, by certain financial institutions.

We have uncommitted accounts receivable purchase agreements under which trade accounts receivable owed by certain customers may be acquired, without recourse, by certain financial institutions.

Available capacity under these programs is dependent upon the level of our trade accounts receivable eligible to be sold into these programs and the financial institutions’ willingness to purchase such receivables.

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

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

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

At February 29, 2024 and November 30, 2023, we had a total of $1.2 billion and $864.6 million, respectively, of trade accounts receivable sold to and held by financial institutions under these programs.

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

Share Repurchase Program

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

We repurchased 2.0 million shares of common stock for $199.2 million and 1.2 million shares of common stock for $114.8 million in the three months ended February 29, 2024 and February 28, 2023, respectively.

As of February 29, 2024, we had $196.7 million available for future repurchases of our common stock.

In March 2024, the Board of Directors authorized a new $2.0 billion share repurchase program, supplementing the existing program of which $196.7 million remains, 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.

For additional information on our share repurchase program, see Note 5 - Stockholders' Equity to the Consolidated Financial Statements included in Part I, Item 1 of this Report.

Covenant Compliance

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

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

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

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

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

Related Party Transactions

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Critical Accounting Policies and Estimates

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

During the three months ended February 29, 2024, there were no material changes to our critical accounting policies and estimates previously disclosed in our Annual Report on Form 10-K for the fiscal year ended November 30, 2023.

Recently Issued Accounting Pronouncements

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis