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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

2021-01-28 compared with 2020-01-29 · 388 added, 381 removed, 1139 unchanged (40% of the section changed)

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We manage cash flow exposures for our major countries and the foreign currency impact of assets and liabilities denominated in non-functional currencies using a combination of forward contracts.

Principal currencies hedged are the Philippine Peso, Indian Rupee, Euro, Canadian Dollar, British Pound, Chinese Yuan, Brazilian Real, and Colombian Peso.

Principal currencies hedged are the Philippine Peso, Indian Rupee, Euro, Canadian Dollar, Japanese Yen, British Pound and Chinese Yuan.

We do not hold or issue derivative financial instruments for trading purposes.

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November 30, 2019

We apply hedge accounting to our long-term forward contracts which would reduce the variability of cash flows denominated in foreign currencies.

We serve many of our clients using service delivery centers in other geographies.

We applied hedge accounting to our long-term forward contracts which would reduce the variability of cash flows denominated in foreign currencies.

We served many of our clients in our Concentrix segment using service delivery centers in other geographies.

As a result, the contracts with these clients are typically priced in one currency, while a substantial portion of the costs incurred to deliver services under these contracts are denominated in the local currency of the country where services are provided, which represents a foreign exchange exposure.

The change in the value of these forward contracts would be expected to offset a corresponding foreign currency change in forecasted hedged revenues or cost when recognized.

All of the long-term forward contracts were related to the Concentrix segment and upon completion of the Separation no longer represent a risk to us.

All other foreign exchange contracts have typical maturities of twelve months or less and are executed to protect us against foreign currency exposure pertaining to receivables, payables and intercompany transactions that are denominated in currencies different from the functional currencies of the respective entities.

These contracts are marked-to-market and any material gains and

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losses on our hedge contracts resulting from a hypothetical, instantaneous change in the strength of the U.S.

These contracts are marked-to-market and any material gains and losses on our hedge contracts resulting from a hypothetical, instantaneous change in the strength of the U.S.

dollar would be significantly offset by mark-to-market gains and losses on the corresponding assets and liabilities being hedged.

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We are most sensitive to fluctuations in U.S.

interest rates, changes in which affects the costs associated with hedging and interest paid on our debt.

interest rates, changes which affect the costs associated with hedging and interest paid on our debt.

To manage interest rate risk on the U.S.

dollar-denominated floating-rate debt, we have entered into interest rate swaps with aggregate notional amounts of $2.0 billion as of both November 30, 2019 and 2018, which effectively converted a portion of the floating rate debt to a fixed interest rate.

dollar-denominated floating-rate debt, we have entered into interest rate swaps with aggregate notional amounts of $1.6 billion and $2.0 billion as of November 30, 2020 and 2019 respectively, which effectively converted a portion of the floating rate debt to a fixed interest rate.

Substantially, all of our interest rate swaps are accounted as cash flow hedges.

A 15% variation in our interest rates would not have a material impact on the fair value of our swaps.

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The following tables present hypothetical interest expense related to our outstanding borrowings with variable interest rates (after considering the impact of the above mentioned swaps) for the years ended November 30, 2020 and 2019 , arising from hypothetical parallel shifts in the respective countries’ yield curves, of plus or minus 5%, 10% and 15% (in thousands).

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Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework).

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework).

Based on this assessment, our management concludes that, as of November 30, 2020, our internal control over financial reporting was effective at the reasonable assurance level based on those criteria.

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Opinions on the Consolidated Financial Statements and Internal Control Over Financial Reporting

We have audited the accompanying consolidated balance sheets of SYNNEX Corporation and its subsidiaries (the Company) as of November 30, 2019 and 2018, the related consolidated statements of operations, comprehensive income, stockholders’ equity, and cash flows for each of the years in the three-year period ended November 30, 2019, and the related notes and financial statement Schedule II:

Valuation and Qualifying Accounts (collectively, the consolidated financial statements).

We also have audited the Company’s internal control over financial reporting as of November 30, 2019, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We have audited the accompanying consolidated balance sheets of SYNNEX Corporation and subsidiaries (the Company) as of November 30, 2020 and 2019, the related consolidated statements of operations, comprehensive income, stockholders’ equity, and cash flows for each of the years in the three-year period ended November 30, 2020, and the related notes and financial statement Schedule II - Valuation and Qualifying Accounts (collectively, the consolidated financial statements).

We also have audited the Company’s internal control over financial reporting as of November 30, 2020, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of November 30, 2020 and 2019, and the results of its operations and its cash flows for each of the years in the three-year period ended November 30, 2020, in conformity with U.S.

generally accepted accounting principles.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of November 30, 2019 based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of November 30, 2020, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework).

Change in Accounting Principle

As discussed in Note 2 to the consolidated financial statements, the Company changed its method of accounting for leases as of December 1, 2019 due to the adoption of Financial Accounting Standards Board’s Accounting Standards Codification Topic 842, Leases .

Basis for Opinions

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Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgment.

The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Evaluation of the Sufficiency of Audit Evidence Over Revenue

As discussed in Note 12 to the consolidated financial statements, and disclosed in the consolidated statements of operations, the Company recorded $23.8 billion of revenue in 2019.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Sufficiency of audit evidence over revenue

As discussed in Note 11 to the consolidated financial statements, and presented in the consolidated statements of operations, the Company reported revenue of $24,675,563 thousand for the fiscal year ended November 30, 2020.

We identified the evaluation of the sufficiency of audit evidence over revenue as a critical audit matter.

The geographical dispersion of distribution and administrative facilities, and employees providing revenue generating services, required especially subjective auditor judgment in determining the nature and extent of procedures to perform and in the performance of procedures over revenue.

Our audit team consisted of auditors located in numerous countries around the world.

This required especially challenging auditor judgment and coordination in determining the level of supervision and review to provide to each audit team, and in evaluating the individual countries audit results on the consolidated financial statements.

Further, the Company recognizes revenue on a net basis on certain contracts, where the Company does not control the specified good or service before that good or service is transferred to a customer.

In addition, the Company recognizes revenue upon delivery to the customer for certain arrangements with acceptance provisions due to the determination of when transfer of control occurs.

This required especially challenging auditor judgment in determining the nature and extent of procedures to perform and performance of procedures to test whether revenue for products are recognized on either a gross or net basis as well as the timing of revenue recognition based on when transfer of control occurs when acceptance provisions are present.

The primary procedures we performed to address this critical audit matter included the following.

We tested certain internal controls over the Company’s revenue processes, including controls related to the determination of revenue on a gross or net basis, recognition and consolidation of global revenue amounts, and global monitoring of revenue.

We assessed the recorded revenues by testing a sample of revenue transactions during the year and subsequent to year-end.

This was done by comparing the amounts recognized by the Company, including determination of gross versus net presentation and timing of revenue recognized, to relevant underlying documentation such as contracts and shipping documents or other third-party evidence.

We investigated revenue entries that were made by the Company during the year, at the end of the year, and subsequent to the financial statement close process.

After completion of these procedures, we evaluated the overall sufficiency of the audit evidence over revenues.

The geographical dispersion of distribution and administrative facilities and employees providing revenue generating services required especially subjective auditor judgment in determining the nature and extent of procedures to perform and in evaluating those procedures.

The following are the primary procedures we performed to address this critical audit matter.

We applied auditor judgment to determine the nature and extent of procedures to be performed over revenue, including the determination of the locations at which those procedures were to be performed.

At each location selected, we performed the following procedures.

We evaluated the design and tested the operating effectiveness of certain internal controls related to the recognition of revenue.

We tested samples of revenue transactions during the year by comparing the amounts recognized by the Company to relevant underlying documentation such as contracts, shipping documents, or other third-party evidence.

We investigated a selection of journal entries that were made by the Company to adjust revenue.

We evaluated the sufficiency of the audit evidence obtained over revenue by assessing the results of the procedures performed, including the appropriateness of the determination of locations to perform procedures.

Separation of Concentrix Corporation in a tax-free transaction

As discussed in Note 1 and Note 17 to the consolidated financial statements, the separation of Concentrix Corporation, a wholly-owned subsidiary of the Company, into a separately publicly-traded company was completed in a tax-free transaction on December 1, 2020.

The Company received a favorable opinion from a third-party with respect to the tax-free nature of the transaction for federal income tax purposes.

We identified the evaluation of the tax-free status relating to the separation of Concentrix Corporation as a critical audit matter.

Complex auditor judgment, including the involvement of tax professionals with specialized skills and knowledge, was required to evaluate the Company’s interpretation and application of tax law.

The following are the primary procedures we performed to address this critical audit matter.

We evaluated the design and tested the operating effectiveness of certain internal controls related to the determination of the tax-free status of the transaction.

This included controls related to the Company’s interpretation and application of relevant tax law and determination of tax-free status.

We involved tax professionals with specialized skills and knowledge who assisted in reading the favorable opinion and basis of conclusions received by the Company from a third-party and performing an evaluation of the tax treatment of the transaction to assess the Company’s interpretation and application of relevant tax law.

We have served as the Company’s auditor since 2012.

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

(As adjusted)

Current assets:

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Deferred tax assets

Other assets, net

LIABILITIES AND EQUITY

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Fiscal Years Ended November 30,

(As adjusted)

Total revenue

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Fiscal Years Ended November 30,

(As adjusted)

Other comprehensive income (loss):

Change in unrealized losses of defined benefit plans, net of taxes of $ 5,909 , $ 0 and $ 0 for fiscal year ended November 30, 2019, 2018 and 2017, respectively.

Change in unrealized losses of defined benefit plans, net of taxes of $ 3,749 , $ 5,909 and $ 0 for fiscal years ended November 30, 2020, 2019 and 2018, respectively.

Reclassification of net (gains) losses to net income, net of tax of $ 0 for fiscal years ended November 30, 2020, 2019 and 2018.

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(currency and share amounts in thousands)

SYNNEX Corporation Stockholders

Treasury stock

comprehensive

Noncontrolling

income (loss)

(As adjusted)

Total stockholders' equity

Balances, November 30, 2017

Cumulative effect of change in accounting principles

Share-based compensation

Tax benefits from equity awards

Issuance of common stock on exercise of options, for employee

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shares withheld for employee taxes

Repurchases of common stock

Cash dividends declared

Changes in ownership of noncontrolling interests

Common stock issued for the acquisition of Convergys, net of

stock issuance costs

Other comprehensive income (loss)

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Cash dividends declared

Common stock issued for the acquisition of Convergys, net of

stock issuance costs

Other comprehensive income (loss)

Cumulative effect of changes in accounting principles

Stock issuance costs (related to the Convergys acquisition in fiscal year 2018)

Balances, November 30, 2019

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Other comprehensive income (loss)

Cumulative effect of changes in accounting principles

Stock issuance costs (related to the Convergys acquisition in fiscal year 2018)

Balances, November 30, 2020

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Fiscal Years Ended November 30,

(As adjusted)

Cash flows from operating activities:

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Provision for doubtful accounts

Excess tax benefit from share-based compensation

Deferred income taxes

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Cash flows from investing activities:

Purchases of investments

Proceeds from maturity of held-to-maturity investments

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Purchases of property and equipment

Acquisition of businesses, net of cash acquired and refunds

Purchase of non-marketable equity security investments

Acquisition of businesses (primarily Convergys), net of cash acquired

Net cash used in investing activities

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Dividends paid

Excess tax benefit from share-based compensation

Increase (decrease) in book overdraft

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Supplemental disclosure of non-cash investing activities:

Fair value of common stock issued for acquisition of business

Fair value of common stock issued for acquisition of Convergys business

Accrued costs for property and equipment purchases

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NOTE 1—ORGANIZATION AND BASIS OF PRESENTATION:

SYNNEX Corporation (together with its subsidiaries, herein referred to as “SYNNEX” or the “Company”) is a business process services company headquartered in Fremont, California and has operations in North and South America, Asia-Pacific, Europe and Africa.

SYNNEX Corporation (together with its subsidiaries, herein referred to as “SYNNEX” or the “Company”) is a leading provider of a comprehensive range of distribution, systems design and integration solutions for the technology industry, headquartered in Fremont, California and has operations in North and South America, Asia-Pacific, Europe and Africa.

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 per cent of the outstanding common stock of Concentrix Corporation (“Concentrix”) to SYNNEX stockholders as of the close of business on November 17, 2020 , the record date for the distribution.

SYNNEX stockholders received one share of Concentrix common stock for every share of SYNNEX common stock held at the close of business on the record date.

The Company distributed 51,602 shares of Concentrix common stock to its stockholders.

Concentrix is now an independent public company trading under the symbol “CNXC” on the Nasdaq Stock Market .

After the Separation, SYNNEX does not beneficially own any shares of Concentrix’ common stock.

The historical results of operations and the financial position of Concentrix are included in the consolidated financial statements of SYNNEX for each of the fiscal years included in this report and will be reported as discontinued operations beginning in the first quarter of fiscal year 2021.

Beginning December 1, 2020, the Company will no longer be consolidating Concentrix within its financial results or reflect the financial results of Concentrix within its continuing results of operations.

In connection with the Separation, the Company and Concentrix have 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 services to SYNNEX following the Separation .

The Company has two reportable segments:

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The Technology Solutions segment distributes a broad range of information technology (“IT”) systems and products and also provides systems design and integration solutions.

The Concentrix segment offers a portfolio of technology-infused strategic solutions and end-to-end global business outsourcing services focused on customer experience, process optimization, technology innovation, front and back-office automation and business transformation to clients in eight industry verticals.

On January 9, 2020, subsequent to year-end, the Company announced a plan to separate the Concentrix segment into an independent publicly-traded company.

Refer Note 17 for further details.

Certain columns and rows may not add due to the use of rounded numbers.

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The Company evaluates these estimates on a regular basis and bases them on historical experience and on various assumptions that the Company believes are reasonable.

The COVID-19 pandemic has negatively impacted the global economy, disrupted global supply chains and work force participation and created volatility and disruption of financial markets, the impact of which was most acute during the second quarter of fiscal year 2020.

As of November 30, 2020, due to the ongoing impact of the COVID-19 pandemic on the Company’s business, many of the estimates and assumptions required increased judgment and carry a higher degree of variability and volatility.

As events continue to evolve and additional information becomes available, these estimates may change in future periods.

Actual results could differ from the estimates.

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Investments in less than 20 % owned companies, where the Company does not have significant influence, are recorded at cost or fair value based on whether the equity securities have readily determinable fair values.

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Segment reporting

Operating segments are based on components of the Company that engage in business activity that earns revenue and incurs expenses and (a) whose operating results are regularly reviewed by the Company’s chief operating decision maker to make decisions about resource allocation and performance and (b) for which discrete financial information is available.

Operating segments are based on components of the Company that engage in business activity that earn revenue and incur expenses and (a) whose operating results are regularly reviewed by the Company’s chief operating decision maker to make decisions about resource allocation and performance and (b) for which discrete financial information is available.

The Company has two reportable segments:

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The segment also designs and integrates data center equipment built specific to the customers' data center environment.

The Concentrix segment offers a range of technology-infused global business outsourcing services focused on customer experience, process optimization and front and back-office automation to clients in eight industry verticals.

The portfolio of services offered comprises end-to-end process outsourcing services that are delivered through omni-channels including both voice and non-voice.

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Cash and cash equivalents

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For derivative instruments that are not designated as hedges, gains and losses on derivative instruments are reported in the Consolidated Statements of Operations in the current period.

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Property and equipment

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These charges primarily include direct third-party professional and legal fees, and integration-related costs.

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Goodwill and intangible assets

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Impairment of long-lived assets

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

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The assessment of possible impairment is based on the Company’s ability to recover the carrying value of the asset or asset group from the expected future pre-tax cash flows, undiscounted and without interest charges, of the related operations.

If these cash flows are less than the carrying value of such assets, an impairment loss is recognized for the difference between estimated fair value and carrying value.

The Company enters into leases as a lessee for property and equipment in the ordinary course of business.

When procuring goods or services, or upon entering into a contract with its customers and clients, the Company determines whether an arrangement contains a lease at its inception.

As part of that evaluation, the Company considers whether there is an implicitly or explicitly identified asset in the arrangement and whether the Company, as the lessee, or the customer, if the Company is the lessor, has the right to control the use of that asset.

Effective December 1, 2019 , when the Company is the lessee, all leases with a term of more than 12 months are recognized as right-of-use (“ROU”) assets and associated lease liabilities in the Consolidated Balance Sheet.

Lease liabilities are recorded at the lease commencement date and determined using the present value of the lease payments not yet paid, at the Company’s incremental borrowing rate, which approximates the rate at which the Company would borrow on a secured basis in the country where the lease was executed.

The interest rate implicit in the lease is generally not determinable in transactions where the Company is the lessee.

The ROU asset equals the lease liability adjusted for any initial direct costs, prepaid rent and lease incentives.

The Company’s variable lease payments generally relate to payments tied to various indexes, non-lease components and payments above a contractual minimum fixed amount.

Operating leases are included in other assets, net, other accrued liabilities and other long-term liabilities in the Consolidated Balance Sheet.

Finance leases are included in property and equipment, net, borrowings, current and long-term borrowings in the Consolidated Balance Sheet.

Substantially all of the Company's leases are classified as operating leases.

The lease term includes options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option.

The Company made a policy election to not recognize leases with a lease term of 12 months or less in the Consolidated Balance Sheet.

Lease expenses are recorded within selling, general, and administrative expenses in the Consolidated Statements of Operations.

Operating lease payments are presented within “Cash flows from operating activities” in the Consolidated Statements of Cash Flows.

For all asset classes, the Company has elected the lessee practical expedient to combine lease and non-lease components (e.g., maintenance services) and account for the combined unit as a single lease component.

Variable lease payments are recognized in the period in which the obligation for those payments is incurred.

Concentration of credit risk

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Through November 30, 2020, such losses have been within management’s expectations.

In fiscal years 2019, 2018 and 2017, one customer accounted for 19 %, 17 % (as adjusted) and 21 % (as adjusted), respectively of the Company’s consolidated revenue.

Products purchased from the Company’s largest OEM supplier, HP Inc., accounted for approximately 12 %, 13 % (as adjusted) and 14 % (as adjusted) of the consolidated revenue for fiscal years 2019, 2018 and 2017, respectively.

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As of November 30, 201 9 and 2018 , one customer comprised 19 % and 11 % (as adjusted), respectively, of the total accounts receivable balance .

One customer accounted for 19 % of the Company’s consolidated revenue in fiscal years 2020 and 2019 and 17 % of the Company’s consolidated revenue in fiscal year 2018.

Products purchased from the Company’s largest OEM supplier, HP Inc., accounted for approximately 12 % of the Company’s consolidated revenue during fiscal years 2020 and 2019 and approximately 13 % of consolidated revenue during fiscal year 2018.

As of November 30, 2020 and 2019, one customer comprised 11 % and 19 %, respectively, of the consolidated accounts receivable balance.

Book overdrafts

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The Company’s policy is to report the change in book overdrafts as a financing activity in the Consolidated Statements of Cash Flows.

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Revenue recognition

The Company adopted Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (“ASC Topic 606”) on December 1, 2018 on a full retrospective basis to ensure a consistent basis of presentation within the Company’s consolidated financial statements for all periods reported.

The Company generates revenue primarily from (i) the sale of various IT products through its Technology Solutions business unit and (ii) the provision of business outsourcing services focused on customer experience through its Concentrix business unit.

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Products sold by the Company are delivered via shipment from the Company’s facilities, drop-shipment directly from the vendor, or by electronic delivery of software products.

In situations where arrangements include customer acceptance provisions, revenue is recognized when the Company can objectively verify the products comply with specifications underlying acceptance and the customer has control of the goods.

Revenue is presented net of taxes collected from customers and remitted to government authorities.

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Such arrangements, which are not material to the Company’s consolidated revenue or its “Products” or “Services” revenue, include supplier service contracts, post-contract software support services and extended warranty contracts.

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The Company considers shipping and handling activities as costs to fulfill the sale of products.

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

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 products sold.

The Company recognizes revenue from services contracts over time as the promised services are delivered to clients for an amount that reflects the consideration to which the Company is entitled in exchange for those services.

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Certain client contracts include incentive payments from the customer upon achieving certain agreed-upon service levels and performance metrics or service level agreements that could result in credits or refunds to the client.

Revenue relating to such arrangements is accounted for as variable consideration when the likely amount of revenue to be recognized can be estimated to the extent that it is probable that a significant reversal of any incremental revenue will not occur.

Revenue relating to such

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arrangements is accounted for as variable consideration when the likely amount of revenue to be recognized can be estimated to the extent that it is probable that a significant reversal of any incremental revenue will not occur.

Deferred revenue contract liabilities and deferred costs to obtain or fulfill a contract are not material.

Disaggregated revenue disclosure are presented in Note 12.

Disaggregated revenue disclosure is presented in Note 11 .

Cost of Revenue

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Expenses of promoting and selling products and services are classified as selling expense and include such items as compensation, sales commissions and travel.

General and administrative expenses include such items as compensation, cost of warehouse, delivery centers and other non-integration facilities,

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legal and professional costs, office supplies, non-income taxes, insurance and utility expenses.

In addition, selling, general and administrative expenses include other operating items such as allowances for credit losses, depreciation and amortization of non-technology r el at ed intangible assets.

General and administrative expenses include such items as compensation, cost of warehouse, delivery centers and other non-integration facilities, legal and professional costs, office supplies, non-income taxes, insurance and utility expenses.

OEM supplier programs

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and (2) its services with regard to products that it assembles for its customers.

To date neither warranty expense, nor the accrual for warranty costs has been material to the Company’s Consolidated Financial Statements.

Warranty expense and the accrual for warranty costs were not material to the Company’s Consolidated Financial Statements for any of the periods presented.

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Costs related to advertising and product promotion expenditures are charged to “Selling, general and administrative expenses” as incurred and are primarily offset by OEM marketing reimbursements.

To date, net costs related to advertising and promotion expenditures have not been material.

Net costs related to advertising and promotion expenditures were not material to the Company’s Consolidated Financial Statements for any of the periods presented.

The asset and liability method is used in accounting for income taxes.

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

The Company recognizes interest and penalties related to unrecognized tax benefits in the provisions for income taxes.

The Company recognizes interest and penalties related to unrecognized tax benefits in the provision for income taxes.

Foreign currency translations

The financial statements of the Company’s foreign subsidiaries whose functional currencies are the local currencies are translated into U.S.

The financial statements of the Company’s international subsidiaries whose functional currencies are the local currencies are translated into U.S.

dollars for consolidation as follows:

assets and liabilities at the exchange rate as of the balance sheet date, stockholders’ equity at the historical rates of exchange, and income and expense amounts at the average exchange rate for the month.

Translation adjustments resulting from the translation of the subsidiaries’ accounts are included in “Accumulated other comprehensive income (loss).” Transactions denominated in currencies other than the applicable functional currency are converted to the functional currency at the exchange rate on the transaction date.

Translation adjustments resulting from the translation of the subsidiaries’ accounts are included in “Accumulated other comprehensive income (loss)” in stockholders’ equity.

Transactions denominated in currencies other than the applicable functional currency are converted to the functional currency at the exchange rate on the transaction date.

At period end, monetary assets and liabilities are remeasured to the functional currency using exchange rates in effect at the balance sheet date.

Non-monetary assets and liabilities are remeasured at historical exchange rates.

Gains and losses resulting from foreign currency transactions are included within “Other income (expense), net.”

Gains and losses resulting from foreign currency transactions are included in earnings within “Other income (expense), net.”

Comprehensive income

Comprehensive income is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources.

The primary components of comprehensive income for the Company include net

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income, foreign currency translation adjustments arising from the consolidation of the Company’s foreign subsidiaries, unrealized gains and losses on the Company’s available-for-sale debt securities, unrealized gains and losses on cash flow hedges and the changes in unrecognized pension and post-retirement benefits.

The primary components of comprehensive income for the Company include net income, foreign currency translation adjustments arising from the consolidation of the Company’s international subsidiaries, unrealized gains and losses on the Company’s available-for-sale debt securities, unrealized gains and losses on cash flow hedges and the changes in unrecognized pension and post-retirement benefits.

Share-based compensation

The Company accounts for stock-based payment transactions in which the Company receives services in exchange for equity instruments of the Company.

Stock-based compensation cost for stock options, restricted stock awards and units, performance restricted stock units and employee stock purchase plans is determined based on the fair value at the measurement date.

The Company recognizes stock-based compensation cost as expense for awards other than its performance-based restricted stock units ratably on a straight-line basis over the requisite service period.

The Company recognizes stock-based compensation cost associated with its performance-based restricted stock units over the requisite service period if it is probable that the performance conditions will be satisfied.

Effective fiscal year 2018, the Company accounts for expense reductions that result from the forfeiture of unvested awards in the period that the forfeitures occur.

Prior to fiscal year 2018, the Company estimated forfeitures and only recorded compensation costs for those awards that were expected to vest.

The Company accounts for share-based payment transactions in which the Company receives services in exchange for equity instruments of the Company.

Share-based compensation cost for stock options, restricted stock awards and units, performance-based restricted stock units and employee stock purchase plans is determined based on the fair value at the measurement date.

The Company recognizes share-based compensation cost as expense for awards other than its performance-based restricted stock units ratably on a straight-line basis over the requisite service period.

The Company recognizes share-based compensation cost associated with its performance-based restricted stock units over the requisite service period if it is probable that the performance conditions will be satisfied.

The Company accounts for expense reductions that result from the forfeiture of unvested awards in the period that the forfeitures occur.

Pension and post-retirement benefits

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The measurement of the benefit obligation is based on the Company’s estimates and actuarial valuations.

These valuations reflect the terms of the plans and use participant-specific information such as compensation, age and years of service, as well as certain key assumptions that require significant judgment, including, but not limited to, estimates of discount rates, expected return on plan assets, inflation, rate of compensation increases, interest crediting rates and mortality rates.

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and mortality rates.

The assumptions used are reviewed on an annual basis.

The Company records pension expense related to multi-employer plans based on the amount of contributions that are contractually owed during the period based on the service provided by the employee.

The Company records components other than the service cost component in Other income (expense), net in the Consolidated Statement s of Operations.

Earnings per common share

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Reclassifications

Certain reclassifications have been made to prior period amounts in the Consolidated Balance Sheets, the Consolidated Statements of Cash Flows and the notes thereto to conform to current period presentation.

These reclassifications had no effect on total current assets, total assets, total current liabilities, total liabilities or cash flows from operating, investing or financing activities as previously reported.

In addition, refer below for the impact of reclassifications made due to adoption of new accounting pronouncements.

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

These reclassifications had no effect on cash flows from operating, investing or financing activities as previously reported.

Recently adopted accounting pronouncements

In June 2018, the Financial Accounting Standard Board (the “FASB”) issued new guidance which simplifies the accounting for share-based compensation issued to non-employees by making the guidance substantially the same as the accounting for employee share-based compensation.

The Company adopted the guidance during its first quarter of fiscal year 2019.

The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.

In January 2016, the FASB issued new guidance which amends various aspects of the recognition, measurement, presentation, and disclosure of financial instruments.

With respect to the Company’s consolidated financial statements, the most significant impact relates to the accounting for equity investments (other than those that are consolidated or accounted under the equity method) which are measured at fair value through earnings.

The Company adopted the guidance as of December 1, 2018, by means of a cumulative-effect adjustment to the balance sheet, with other amendments related specifically to equity securities without readily determinable fair values applied prospectively.

This resulted in a reclassification of net unrealized gains of $ 1,955 from accumulated other

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comprehensive income (loss) to retained earnings.

The Company has elected to use the measurement alternative for non-marketable equity securities, defined as cost adjusted for changes from observable transactions for identical or similar investments of the same issuer, less impairment.

The adoption of this guidance increases the volatility of other income (expense), net, as a result of the remeasurement of equity securities;

however, the adoption did not have a material impact on the Company’s consolidated financial statements.

In May 2014, the FASB issued a comprehensive new revenue recognition standard for contracts with customers with amendments in 2015 and 2016, codified as Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (“ASC Topic 606”) .

The Company adopted the guidance effective December 1, 2018 on a full retrospective basis to ensure a consistent basis of presentation within the Company’s consolidated financial statements for all periods reported, which resulted in an adjustment to retained earnings of $ 4,536 at the beginning of fiscal year 2017.

In addition, the Company elected the one year practical expedient for contract costs .

The primary impact of adoption in the Technology Solutions segment relates to the application of gross versus net criteria in recording revenue.

In addition, the Company is recognizing revenue earlier on certain arrangements with acceptance provisions due to the determination of when transfer of control occurs.

The Company also reclassified certain amounts on the consolidated balance sheet related to sales returns and allowances, from a reduction of accounts receivable to other accrued liabilities, as these amounts represent refund liabilities to customers.

Similarly, the Company reclassified certain amounts for the Company's right to recover assets from customers related to sales returns, from inventories to other current assets.

The Company also presented receivables from customers separately from other receivables.

The impact of adoption is not material to the Concentrix segment and relates primarily to the capitalization of certain sales commissions that are assessed to be incremental for obtaining new contracts.

Such costs are amortized over the period of expected benefit rather than being expensed as incurred as was the Company’s prior practice.

Prior periods were not adjusted, as the amounts were not material to the Company’s consolidated financial statements.

The effects of adoption on the Company’s Consolidated Balance Sheet as of November 30, 2018, the Company’s Consolidated Statements of Operations and the Consolidated Statements of Cash Flows for fiscal years 2018 and 2017 were as follows:

As of November 30, 2018

Consolidated Balance Sheet Caption

Adjustments for

ASC Topic 606

Accounts receivable, net (1)

Receivables from vendors, net

Other current assets (1)

Liabilities and Stockholders' Equity

Other accrued liabilities

Deferred tax liabilities

Retained earnings

Amounts “As adjusted” may not agree to the Consolidated Balance Sheet due to other reclassifications to conform to current period presentation.

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Year Ended November 30, 2018

Year Ended November 30, 2017

Consolidated Statements of Operations

Adjustments for

ASC Topic 606

Adjustments for

ASC Topic 606

Total revenue

Cost of revenue:

Selling, general and administrative expenses

Operating income

Interest expense and finance charges, net

Other income (expense), net

Income before income taxes

Provision for income taxes

Earnings per common share:

Year Ended November 30, 2018

Consolidated Statement of Cash Flows Caption

Adjustments for

ASC Topic 606

Cash flows from operating activities:

Adjustments to reconcile net income to cash provided by operating activities:

Deferred income taxes

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

Accounts receivables, net

Receivables from vendors, net

Other operating assets and liabilities

Net cash provided by operating activities

Year Ended November 30, 2017

Consolidated Statement of Cash Flows Caption

Adjustments for

ASC Topic 606

Cash flows from operating activities:

Adjustments to reconcile net income to cash provided by operating activities:

Deferred income taxes

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

Accounts receivables, net

Receivables from vendors, net

Other operating assets and liabilities

Net cash provided by operating activities

In February 2018, the Financial Accounting Standard Board (the “FASB”) issued guidance that permits the Company to reclassify disproportionate tax effects in accumulated other comprehensive income caused by the Tax Cuts and Jobs Act of 2017 (the “TCJA”) to retained earnings.

The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted.

The adoption of this new guidance did not have a material impact on the Company’s Consolidated Financial Statements.

In February 2016, the FASB issued a new standard which revises various aspects of accounting for leases, with amendments in 2018 and 2019 codified as Accounting Standards Codification Topic 842, Leases.

The Company adopted the guidance effective December 1, 2019 , applying the optional transition method, which allows an entity to apply the new standard at the adoption date with a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption.

In addition, the Company elected the package of practical expedients not to reassess prior conclusions related to contracts containing leases, lease classification and initial direct costs and the lessee practical expedient to combine lease and non-lease components for all asset classes.

The Company made a policy election to not recognize ROU assets and lease liabilities for short-term leases for all asset classes.

The most significant impact of adoption to the Company’s Consolidated Financial Statements relates to the recognition of a right-of-use asset and a lease liability for its leases other than short-term leases.

The liability was equal to the present value of lease payments.

The asset is based on the liability, and subject to adjustment, such as for initial direct costs.

The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee depends primarily on its classification.

For income statement purposes, operating leases will result in a straight-line expense while finance leases will result in a front-loaded expense pattern.

Upon adoption, the Company recorded $ 591,129 of ROU assets and of $ 642,567 of liabilities relating to its operating leases on its Consolidated Balance Sheet.

The adoption did no t have an impact on the Company’s retained earnings as of December 1, 2019, its consolidated statements of operations or its consolidated statements of cash flows.

Recently issued accounting pronouncements

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.

The Company is currently evaluating the impact of the new guidance.

In December 2019, the FASB issued new guidance that simplifies the accounting for income taxes.

The guidance is effective for annual reporting periods beginning after December 15, 2020, and interim periods within those reporting periods.

Certain amendments

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should be applied prospectively, while other amendments should be applied retrospectively to all periods presented.

Certain amendments should be applied prospectively, while other amendments should be applied retrospectively to all periods presented.

The Company is currently evaluating the impact of the new guidance.

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In August 2018, the FASB issued guidance to improve the effectiveness of fair value measurement disclosures by removing or modifying certain disclosure requirements and adding other requirements.

The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted.

Certain amendments should be applied prospectively, while all other amendments should be applied retrospectively to all periods presented.

The Company is currently evaluating the impact of the new guidance.

In February 2018, the FASB issued guidance that permits the Company to reclassify disproportionate tax effects in accumulated other comprehensive income caused by the Tax Cuts and Jobs Act of 2017 to retained earnings.

The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted.

The adoption of this new guidance is not expected to have a material impact on the Company's Consolidated Financial Statements.

Certain amendments should be applied prospectively, while

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all other amendments should be applied retrospectively to all periods presented.

Th is guidance is applicable to the Company at the beginning of fiscal year 2021 and its adoption is not expected to have a material impact on the Company's Consolidated Financial Statements .

In June 2016, the FASB issued a new credit loss standard that replaces the incurred loss impairment methodology in current GAAP.

The new impairment model requires immediate recognition of estimated credit losses expected to occur for most financial assets and certain other instruments.

It is effective for annual reporting periods beginning after December 15, 2019 and interim periods within those annual periods.

Early adoption for fiscal years beginning after December 15, 2018 is permitted.

Entities will apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first effective reporting period.

The Company is currently evaluating the impact of the new guidance.

In February 2016, the FASB issued a new standard which revises various aspects of accounting for leases.

The most significant impact to the Company’s Consolidated Financial Statements relates to the recognition by a lessee of a right-of-use asset and a lease liability for virtually all of its leases other than short-term leases.

The liability will be equal to the present value of lease payments.

The asset will be based on the liability, subject to adjustment, such as for initial direct costs.

Consistent with current guidance, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification.

For income statement purposes, operating leases will result in a straight-line expense while finance leases will result in a front-loaded expense pattern.

This accounting standard, applicable to the Company at the beginning of its first quarter of fiscal year 2020, will be adopted using a modified retrospective approach.

The Company is currently evaluating the impact of adoption of this standard and expects that most of its operating lease commitments will be subject to the new standard and be recognized as operating lease liabilities and right-of-use assets upon adoption.

The adoption will materially increase total assets and total liabilities relative to such amounts prior to adoption.

NOTE 3—ACQUISITIONS:

Fiscal 2018 acquisition

On October 5, 2018, the Company acquired 100 % of Convergys Corporation ("Convergys"), a customer experience outsourcing company, for a purchase price of $ 2,269,527 , pursuant to a merger agreement dated June 28, 2018 .

The acquisition is related to the Company's Concentrix segment and added scale, diversified the revenue base, expanded the Company's service delivery footprint and strengthened the Company’s leadership position as a top global provider of services to improve customer experience.

The purchase price for the acquisition was allocated to the net tangible and intangible assets based on their fair values at the acquisition date.

The excess of the purchase price over the net tangible assets and intangible assets was recorded as goodwill, and was attributed to the assembled workforce and the expected revenue and cost synergies due to the diversified revenue base and comprehensive service portfolio delivery capabilities resulting from the acquisition.

During fiscal year 2019, the Company recorded measurement period adjustments of $ 32,698 to goodwill.

These adjustments comprised of an increase of $ 49,771 in tax liabilities and an increase of $ 17,073 to the fair value of other acquired net tangible assets, resulting in net tangible liabilities of $ 51,600 , goodwill of $ 1,394,127 , and intangible assets of $ 927,000 , primarily consisting of customer relationships.

Goodwill is not deductible for tax purposes.

Acquisition-related and integration expenses related to the Convergys acquisition were $ 70,473 and $ 37,490 during the years ended November 30, 2019 and 2018.

Substantially all acquisition-related expenses were recorded in “Selling, general and administrative expenses” and comprised of legal and professional services, severance and lease termination payments, accelerated depreciation, bridge financing commitment fees and other costs incurred to complete the acquisition and retention payments to integrate this business.

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This new standard is to be adopted by way of a cumulative-effect adjustment to retained earnings as of the beginning of the first effective reporting period.

This guidance is applicable to the Company at the beginning of fiscal year 2021 and its adoption is not expected to have a material impact on the Company's Consolidated Financial Statements.

NOTE 3—STOCKHOLDERS’ EQUITY:

2013 Stock Incentive Plan

The Company’s 2013 Stock Incentive Plan was adopted by its Board of Directors and approved by its stockholders in 2013.

The 2013 Stock Plan as amended and restated from time to time provides for the direct award or sale of shares of common stock, restricted stock awards, and restricted stock units, the grant of options to purchase shares of common stock and the award of stock appreciation rights to employees and non-employee directors and consultants.

The number of authorized shares under the 2013 Stock Incentive Plan will not exceed the sum of 1,696 shares of common stock, plus any shares under the Amended and Restated 2003 Stock Incentive Plan (the “2003 Stock Incentive Plan”) that are subject to outstanding awards granted to the extent those awards expire, terminate or are canceled for any reason prior to exercise without the issuance or delivery of such shares, any shares subject to vesting restrictions that are subsequently forfeited, and any reserved shares not issued or subject to outstanding awards, up to 2,750 shares.

No participant in the 2013 Stock Incentive Plan may receive option grants or stock appreciation rights, restricted shares or restricted stock units of more than 1,500 shares per calendar year, or more than 2,500 shares in the participant’s first calendar year of service.

The option price for incentive stock options will not be less than 100 % of the fair market value of the stock on the date of grant.

Under the 2013 Stock Incentive Plan, qualified employees are eligible for the grant of incentive stock options to purchase shares of common stock.

Stock incentive plans

The Company’s stock incentive plans include plans adopted in 2020, 2013 and 2003 (the SYNNEX Plan(s)”).

The SYNNEX Plans, as amended, provide for the direct award or sale of shares of common stock, restricted stock awards, and restricted stock units, the grant of options to purchase shares of common stock and the award of stock appreciation rights to employees and non-employee directors and consultants.

The number of authorized shares under the 2020 SYNNEX Plan will not exceed the sum of 2,493 shares of common stock, plus any shares under the amended and restated 2013 and 2003 SYNNEX Plans that are subject to outstanding awards granted to the extent those awards expire, terminate or are canceled for any reason prior to exercise without the issuance or delivery of such shares, any shares subject to vesting restrictions that are subsequently forfeited, and any reserved shares not issued or subject to outstanding awards, up to 3,950 shares.

No further grants may be made under the 2013 or 2003 SYNNEX Plans and a ll outstanding awards under the 2013 and 2003 Plans continue to be governed by their existing terms.

Under the Plans, qualified employees are eligible for the grant of incentive stock options to purchase shares of common stock.

Qualified employees and outside directors and consultants are eligible for the grant of non-qualified stock options, stock appreciation rights, restricted stock grants and restricted stock units.

The outstanding stock options and restricted stock awards generally vest over a five-year period and the stock options have a contractual term of ten years .

Certain restricted stock awards and units granted to employees vest over a four year period with 67 % of the award scheduled to vest on the third anniversary and remaining 33 % scheduled to vest on the fourth anniversary.

The outstanding restricted stock awards and units generally vest one fifth ratably over a five-year period.

Certain restricted stock awards granted to employees vest at the end of a three year period and certain restricted stock awards and units granted to employees vest over a four year period with 67 % of the award scheduled to vest on the third anniversary and remaining 33 % scheduled to vest on the fourth anniversary.

Certain restricted stock units could vest subject to the achievement of individual, divisional or company-wide performance goals.

The majority of the performance-based restricted stock units vest at the end of three-year requisite service periods, subject to the achievement of company-wide financial performance goals approved by the Compensation Committee.

The exercise price for incentive stock options will not be less than 100 % of the fair market value of the stock on the date of grant and the stock options have a contractual term of ten years .

The outstanding stock options vest as to one fifth of the stock underlying the stock options on the first anniversary date of the grant and the remaining vest monthly over a four-year period starting one month after the first anniversary of the date of grant .

Stock options granted to qualified non-employee directors vest as to one third of the stock underlying the stock options on the first anniversary date of the grant and the remaining vest monthly over a two-year period starting one month after the first anniversary of the date of grant.

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The holders of restricted stock awards are entitled to the same voting, dividend and other rights as the Company’s common stockholders.

Certain restricted stock units could vest subject to the achievement of individual, divisional or company-wide performance goals.

Unless terminated sooner, the 2013 Stock Incentive Plan will terminate on March 19, 2023.

2003 Stock Incentive Plan

The Company’s 2003 Stock Incentive Plan terminated in March 2013.

The number of authorized shares under the 2003 Stock Incentive Plan was 14,120 shares of common stock.

The equity awards outstanding under this plan as of November 30, 2019 continue to be governed by their existing terms.

The outstanding stock options granted to qualified employees vested over a five-year period and have a contractual term of ten years .

Stock options granted to qualified non-employee directors vested over three years .

The exercise price of incentive stock option grants was equal to 100 % of the fair market value of those shares on the date of the grant.

Unless terminated sooner, the 2020 SYNNEX Plan will terminate on March 17, 2030 .

Concentrix Stock Incentive Plan

In November 2020, in connection with the Separation, the Concentrix Stock Incentive Plan (the “Concentrix Incentive Plan”), was approved by SYNNEX as the sole stockholder of Concentrix to be effective upon completion of the Separation.

The number of authorized shares of Concentrix under the Concentrix Incentive Plan are 4,000 shares of Concentrix’ common stock .

2014 Employee Stock Purchase Plan

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In June 2020, the Board of Directors authorized a three-year $ 400,000 share repurchase program, effective July 1, 2020, pursuant to which the Company may repurchase its outstanding common stock from time to time in the open market or through privately negotiated transactions.

During fiscal year November 30, 2019, the Company repurchased 160 shares for a total cost of $ 15,184 .

As of November 30, 2019, the Company repurchased shares aggregating 840 at a total cost of $ 81,172 .

The share purchases were made on the open market and the shares repurchased by the Company are held in treasury for general corporate purposes.

As of November 30, 2020, the Company had no t repurchased any shares under this program.

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In June 2017, the Board of Directors authorized a three-year $ 300,000 share repurchase program pursuant to which the Company could repurchase its outstanding common stock from time to time in the open market or through privately negotiated transactions.

Through the expiration of the program in June 2017, the Company had purchased 207 shares at a total cost of $ 15,654 .

Through the expiration of this program in June 2020, the Company had purchased 875 shares at a total cost of $ 84,577 .

The share purchases were made on the open market and the shares repurchased by the Company are held in treasury for general corporate purposes.

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The Company declared cumulative cash dividends of $ 0.40 , $ 1.50 and $ 1.40 per share during the years ended November 30, 2020, 2019 and 2018, respectively.

On January 9, 2020 , the Company announced a cash dividend of $ 0.40 per share to stockholders of record as of January 24, 2020 , payable on January 31, 2020 .

On March 24, 2020, as a result of the unpredictable economic environment due to the impact of the COVID-19 pandemic, the Company announced the suspension of its quarterly dividend.

On January 11, 2021 , the Company announced the reinstatement of a quarterly cash dividend of $ 0.20 per share to stockholders of record as of January 22, 2021 , payable January 29, 2021 .

Dividends are subject to continued capital availability, compliance with the covenants and conditions in some of the Company's credit facilities and the declaration by the Board of Directors in the best interest of the Company’s stockholders.

NOTE 4—SHARE-BASED COMPENSATION:

The Company recognizes share-based compensation expense for all share-based awards made to employees and directors, including employee stock options, restricted stock awards, restricted stock units, performance-based restricted stock units and employee stock purchases, based on estimated fair values.

The Company recorded share-based compensation expense in the Consolidated Statements of Operations for fiscal years 2020, 2019 and 2018 as follows:

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The Company estimates the fair value of share-based payment awards on the measurement date and recognizes as expense over the requisite service period in the Company’s consolidated financial statements.

The Company uses the Black-Scholes valuation model to estimate fair value of stock options.

The Company uses the Black-Scholes valuation model to estimate the fair value of stock options.

The Black-Scholes option-pricing model was developed for use in estimating the fair value of short-lived exchange traded options that have no vesting restrictions and are fully transferable.

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Over the performance period, the number of awards will be adjusted higher or lower based on the probability of achievement of performance goals.

Through fiscal year 2017, the Company estimated forfeitures and only recorded compensation costs for those awards that were expected to vest.

The assumptions for forfeitures were determined based on the type of award and historical experience.

Forfeiture assumptions were adjusted at the point in time a significant change was identified, with any adjustment recorded in the period of change, and the final adjustment at the end of the requisite service period to equal actual forfeitures.

From fiscal year 2018, the Company accounts for expense reductions that result from the forfeiture of unvested awards in the period that the forfeitures occur.

The Company accounts for expense reductions that result from the forfeiture of unvested awards in the period that the forfeitures occur.

The following assumptions were used in the Black-Scholes valuation model in fiscal years 2019 and 2018:

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1.36% - 1.54%

A summary of the activities under the Company’s stock incentive plan is set forth below:

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The Company did no t grant any options during the fiscal year 2020.

A summary of the activities under the SYNNEX Plans is set forth below:

Options Outstanding

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Restricted stock cancelled/forfeited ( 1)

Options granted

Options exercised

Balances, November 30, 2020

For performance-based restricted stock units, the difference between maximum awards and the actual number of shares issued upon full vesting is included.

Employee Stock Options

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The Company settles employee stock option exercises with newly issued common shares.

As of November 30, 2019, the unamortized share-based compensation expense related to unvested stock options under the 2013 Stock Incentive Plan was $ 10,990 which will be recognized over an estimated weighted-average amortization period of 3.67 years.

As of November 30, 2020, the unamortized share-based compensation expense related to unvested stock options under the SYNNEX Plans was $ 7,521 which will be recognized over an estimated weighted-average amortization period of 2.91 years.

Restricted Stock Awards and Restricted Stock Units

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Non-vested as of November 30, 2020

For performance-based restricted stock units, the maximum number of shares that can be awarded upon full vesting of the grants is included.

(1) For performance-based restricted stock units, the difference between maximum awards and the actual number of shares issued upon full vesting is included.

As of November 30, 2019, there was $ 86,120 of total unamortized share-based compensation expense related to non-vested restricted stock awards and stock units granted under the 2013 Stock Incentive Plan.

As of November 30, 2020, there was $ 54,514 of total unamortized share-based compensation expense related to non-vested restricted stock awards and stock units granted under the SYNNEX Plans.

That cost is expected to be recognized over an estimated weighted-average amortization period of 2.94 years.

In connection with its annual employee stock awards for fiscal year 2020, the Company has reserved approximately $ 9,500 under the SYNNEX Plan to be granted subsequent to completion of the Separation.

Similarly, approximately $ 44,000 was reserved for grants to be made subsequent to completion of the Separation under the Concentrix Incentive Plan.

In connection with the Separation, as required by the SYNNEX Plans, the Company will make certain adjustments to outstanding employee equity awards with the intention of preserving the intrinsic value of the awards prior to the Separation.

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accordance with the employee matters agreement e ach exercisable and non-exercisable stock option and unvested restricted stock award will be converted into similar awards of both SYNNEX and Concentrix and the exercise price of outstanding stock options will be adjusted to preserve the intrinsic value of the awards.

Certain restricted stock unit s and performance-contingent awards will be adjusted to provide holders restricted stock units and performance contingent awards in the company that employs such employee following the Separation.

NOTE 5—BALANCE SHEET COMPONENTS:

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Restricted cash included in other current assets

Restricted cash included in other assets

Cash, cash equivalents and restricted cash

Restricted cash balances relate primarily to temporary restrictions caused by the timing of lockbox collections under borrowing arrangements, the issuance of bank guarantees and a government grant.

Accounts receivable, net:

As of November 30,

(As adjusted)

Accounts receivable

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As of November 30,

(As adjusted)

Receivables from vendors

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Balance, beginning of year

Additions/adjustments from acquisitions

Additions from acquisitions

Foreign exchange translation

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Fiscal years ending November 30,

Subsequent to November 30, 2020, $ 798,960 of intangibles assets, net related to the Concentrix segment are no longer the Company’s assets pursuant to the completion of the Separation.

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Balance, beginning of year

Opening balance adjustment for the adoption of new

accounting guidance

Other comprehensive income (loss) before reclassification

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Refer to Note 6 for the location of gains and losses reclassified from other comprehensive income (loss) to the Consolidated Statements of Operations.

Foreign currency translation adjustment and other, net of taxes, is comprised of foreign currency translation adjustment and unrealized gains and losses on available-for-sale debt securities.

Reclassifications of amortization of actuarial (gains) losses of defined benefits plans is recorded in "Other income (expense), net" in the combined statement of operations.

Foreign currency translation adjustment and other, net of taxes, is comprised of the foreign currency translation adjustment and unrealized gains and losses on available-for-sale debt securities.

Substantially, all of the balance at both November 30, 2019 and 2020 represents foreign currency translation adjustment.

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The Company enters into transactions, and owns monetary assets and liabilities, that are denominated in currencies other than the legal entity’s functional currency.

The Company may enter into forward contracts, option contracts, swaps, or other derivative instruments to offset a portion of the risk on expected future cash flows, earnings, net investments in certain foreign subsidiaries and certain existing assets and liabilities.

The Company may enter into forward contracts, option contracts, swaps, or other derivative instruments to offset a portion of the risk on expected future cash flows, earnings, net investments in certain international subsidiaries and certain existing assets and liabilities.

However, the Company may choose not to hedge certain exposures for a variety of reasons including, but not limited to, accounting considerations and the prohibitive economic cost of hedging particular exposures.

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These instruments mature at various dates through November 2022 .

The Company also uses interest rate derivative contracts to economically convert a portion of its variable-rate debt to fixed-rate debt.

The Company also uses interest rate swap derivative contracts to economically convert a portion of its variable-rate debt to fixed-rate debt.

The swaps have maturities at various dates through October 2023 .

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Interest rate swap (notional value)

Other assets, net

Other accrued liabilities

Derivative instruments designated as cash flow hedges:

Foreign exchange forward contracts (notional value)

Other current assets and other assets

Other current assets and other assets, net

Other accrued liabilities and other long-term liabilities

Interest rate swaps (notional value)

Other current assets and other assets

Other accrued liabilities and other long-term liabilities

Other accrued liabilities

Volume of activity

The notional amounts of foreign exchange forward contracts represent the gross amounts of foreign currency, including, principally, the Philippine Peso, the Indian Rupee, the Euro, the Canadian Dollar, the British Pound, the Chinese Yuan, the Brazilian Real and the Colombian Peso that will be bought or sold at maturity.

The notional amounts of foreign exchange forward contracts represent the gross amounts of foreign currency, including, principally, the Philippine Peso, Indian Rupee, the Euro, the Canadian Dollar, the Japanese Yen, the British Pound, the Brazilian Real and the Chinese Yuan that will be bought or sold at maturity.

The term and notional amount of interest rate swaps are determined based on management’s assessment of future interest rates and other factors such as debt maturities.

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The Effect of Derivative Instruments on AOCI and the Consolidated Statement s of Operations

The Effect of Derivative Instruments on AOCI and the Consolidated Statements of Operations

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

Location of Gain (Loss)

Location of Gains (losses)

For the fiscal years ended November 30,

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Foreign exchange forward contracts

Gain (loss) reclassified from AOCI into income

Gains (losses) reclassified from AOCI into income

Revenue for services

Gain (loss) reclassified from AOCI into income

Gains (losses) reclassified from AOCI into income

Cost of revenue for

Gain (loss) reclassified from AOCI into income

Gains (losses) reclassified from AOCI into income

Selling, general and

administrative expenses

Gain (loss) reclassified from AOCI into income

Gains (losses) reclassified from AOCI into income

(expense), net

Interest rate swaps

Gain (loss) reclassified from AOCI into

Gains (losses) reclassified from AOCI into

Interest expense and

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Derivative instruments not designated as hedging instruments:

Gain (loss) recognized from Foreign exchange

Gains (losses) recognized from Foreign exchange

forward contracts, net ( 1)

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Existing net losses in AOCI that are expected to be reclassified into earnings in the normal course of business within the next twelve months are $ 8,054 .

Included in this amount are net gains of $ 32,142 of foreign exchange forward contracts related to the Concentrix segment, which following the completion of the Separation will no longer be reclassified into the Company’s earnings.

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Offsetting of Derivatives

The Company’s derivative instruments are generally governed by standard International Swaps and Derivatives Association, Inc.

master agreements, which generally do not require the Company to post any collateral, and specify netting rights, and other customary provisions including events of defaults and termination rights.

In the Consolidated Balance Sheets, the Company does not offset derivative assets against liabilities in master netting arrangements.

If derivative exposures covered by a qualifying master netting agreement had been netted in the Consolidated Balance

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Sheets , the total derivative asset and liability positions would have been reduced by $ 6,003 each as of November 30, 201 9 and $ 6,850 each as of November 30, 201 8 .

If derivative exposures covered by a qualifying master netting agreement had been netted in the Consolidated Balance Sheet, the total derivative asset and liability positions would have been reduced by $ 6,659 each as of November 30, 2020 and $ 6,003 each as of November 30, 2019.

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.

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Interest rate swaps

Contingent consideration payable

Forward foreign currency exchange contracts

Interest rate swaps

Convertible debentures conversion option

The Company’s cash equivalents consist primarily of highly liquid investments in money market funds and term deposits with maturity periods of three months or less.

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Fair values of long-term foreign currency exchange contracts are measured using valuations based upon quoted prices for similar assets and liabilities in active markets and are valued by reference to similar financial instruments, adjusted for terms specific to the contracts.

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 London Interbank Offered Rate (“LIBOR”) spot and forward rates.

The effect of nonperformance risk on the fair value of derivative instruments was not material as of November 30, 2020 and 2019.

Contingent consideration payable represented future potential earn-out payments related to the Westcon-Comstor Americas acquisition in fiscal year 2017.

The fair value of the contingent consideration liability was based on a probabilistic analysis using an option pricing model as implemented via a Monte Carlo simulation.

During fiscal year 2019, the fair value of the contingent consideration liability was remeasured and the resulting decrease of $ 19,034 was recorded as a benefit to "other income (expense), net" in the Consolidated Statements of Operations.

The change in the fair value was due to final settlement of the gross profit related to the achievement of the established earn-out target with the sellers.

The settled amount was paid during fiscal year 2019.

The fair value of the Convertible Debentures conversion option was based on a probabilistic analysis using the Monte Carlo simulation approach.

The model considered simulated movements in the Company's stock price until the conversion date using

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estimated stock volatility of 35 %, a risk free rate of 2.7 %, discount and dividend yields of 4.6 % and $ 0.35 per share each quarter, respectively, over the period until September 2019 , when the Company would become entitled to redeem the debentures .

During fiscal year 2019, the Company settled all the outstanding convertible debentures and recorded a loss of $ 1,559 upon settlement in other income (expense), net .

The carrying values of term deposits with maturities less than one year , accounts receivable, accounts payable and short-term debt approximate fair value due to their short maturities and interest rates which are variable in nature.

Long-term non-marketable equity securities consist primarily of investments in equity securities of private entities.

The fair value of non-marketable equity investments is based on an internal valuation of the investees based on the best available information at the measurement date.

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.

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During fiscal years 2020, 2019 and 2018, there were no transfers between the fair value measurement category levels.

3 unchanged sentences

As of November 30, 2020 and 2019, accounts receivable sold to and held by the financial institution under this program were $ 16,735 and $ 32,472 , respectively.

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

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

During the fiscal years ended November 30, 2020, 2019 and 2018, discount fees were $ 3,186 , $ 2,281 and $ 1,621 , respectively.

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SYNNEX United States term loan credit agreement - current portion

Convertible debentures

SYNNEX Japan credit facility - current portion of term loan component

Concentrix credit agreement - current portion of term loan component

Other borrowings

3 unchanged sentences

SYNNEX United States term loan credit agreement

Concentrix credit agreement - term loan component

Concentrix accounts receivable securitization arrangement

Other term debt

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AR Arrangement”).

Under the terms of the U.S.

AR Arrangement, which expires in May 2020 , the Company’s subsidiary that is the borrower under this facility can borrow up to a maximum of $ 850,000 based upon eligible trade accounts receivable.

Prior to the amendment in May 2020 that is described in this paragraph, u nder the terms of the U.S.

AR Arrangement, the Company’s subsidiary that is the borrower under this facility could borrow up to a maximum of $ 850,000 based upon eligible trade accounts receivable.

The effective borrowing cost under the U.S.

AR Arrangement is a blended rate based upon the composition of the lenders, that includes prevailing dealer commercial paper rates and a rate based upon LIBOR.

In addition, prior to the May 2020 amendment, a program fee of 0.75 % per annum based on the used portion of the commitment, and a facility fee of 0.35% per annum, was payable on the adjusted commitment of the lenders.

In May 2020 , the U.S.

AR Arrangement was amended to revise the maximum borrowing amount to $ 650,000 and to extend the maturity date of the U.S.

AR Arrangement to May 2022 .

The program fee payable on the used portion of the lenders’ commitment, was modified to accrue at 1.25 % per annum in the case of lender groups who fund their advances based on prevailing commercial paper rates, and 1.30 % per annum in the case of lender groups who fund their advances based on LIBOR (subject to a 0.50 % per annum floor).

The amendment also modified the facility fee payable on the adjusted commitment of the lenders, to accrue at different tiers ranging between 0.35 % per annum and 0.45 % per annum depending on the amount of outstanding advances from time to time.

In addition, the U.S.

AR Arrangement includes an accordion feature to allow requests for an increase in the lenders' commitment by an additional $ 150,000 .

The effective borrowing cost under the U.S.

AR Arrangement is a blended rate based upon the composition of the lenders, that includes prevailing dealer commercial paper rates and a rate based upon LIBOR, provided that LIBOR shall not be less than zero .

In addition, a program fee of 0.75 % per annum based on the used portion of the commitment, and a facility fee of 0.35 % per annum, is payable on the adjusted commitment of the lenders.

Under the terms of the U.S.

AR Arrangement, the Company and two of its U.S.

Arrangement, the Company and two of its U.S.

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

3 unchanged sentences

SYNNEX Canada accounts receivable securitization arrangement

In Canada, the Company has an accounts receivable securitization program with a bank to provide additional capital for its operations.

Under the terms of this program, SYNNEX Canada Limited (“SYNNEX Canada”) can borrow up to CAD 100,000 , or $ 75,296 , in exchange for the transfer of eligible trade accounts receivable, on an ongoing revolving basis through May 2020.

The program includes an accordion feature that allows SYNNEX Canada to request an increase in the bank’s commitment by an additional CAD 50,000 , or $ 37,648 .

SYNNEX Canada Limited (“SYNNEX Canada”), the Company's Technology Solutions subsidiary in Canada, has an accounts receivable securitization program with a bank to provide additional capital for its operations.

In March 2020, SYNNEX Canada renewed this agreement to mature in May 2023 .

Under the terms of this program, SYNNEX Canada can borrow up to CAD 100,000 , or $ 76,864 , in exchange for the transfer of eligible trade accounts receivable, on an ongoing revolving basis.

The program includes an accordion feature that allows SYNNEX Canada to request an increase in the bank’s commitment up to an additional CAD 50,000 , or $ 38,432 .

Any amounts received under this arrangement are recorded as debt on the Company's Consolidated Balance Sheets and are secured by pledging all of the rights, title and interest in the receivables to the bank.

The effective borrowing cost is based on the weighted-average of the Canadian Dollar Offered Rate plus a margin of 1.00 % per annum and the prevailing lender commercial paper rates.

In addition, SYNNEX Canada is obligated to pay a program fee of 0.75 % per annum based on the used portion of the commitment.

SYNNEX Canada pays a fee of 0.40 % per annum for any unused portion of the commitment up to CAD 60,000 , or $ 45,177 , and when the unused portion exceeds CAD60,000, or $45,177, a fee of 0.40 % on the first CAD 25,000 , or $ 18,824 , of the unused portion and a fee of 0.55 % per annum of the remaining unused commitment.

In addition, prior to an event of termination, SYNNEX Canada is obligated to pay a program fee of 0.75 % per annum based on

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the used portion of the commitment.

After an event of termination, the program fee shall be the sum of the base rate and 2.50 % per annum, based on the used portion of the commitment.

SYNNEX Canada pays a fee of 0.40 % per annum for any unused portion of the commitment up to CAD 60,000 , or $ 46,118 , and when the unused portion exceeds CAD 60,000 , or $ 46,118 , a fee of 0.55 % per annum of the unused portion of the commitment .

As of both November 30, 2020 and 2019 , there was no outstanding balance under this arrangement.

The Company has guaranteed the performance obligations of SYNNEX Canada under this facility.

SYNNEX Japan credit facility

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The credit agreement is comprised of a JPY 7,000,000 , or $ 67,088 , term loan and a JPY 8,000,000 , or $ 76,672 , revolving credit facility and expires in November 2021 .

The interest rate for the term loan and revolving credit facility is based on the Tokyo Interbank Offered

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Rate, plus a margin, which is based on the Company’s consolidated leverage ratio, and currently equals 0.70 % per annum .

The interest rate for the term loan and revolving credit facility is based on the Tokyo Interbank Offered Rate, plus a margin, which is based on the Company’s consolidated leverage ratio, and currently equals 0.70 % per annum.

The unused line fee on the revolving credit facility is currently 0.10 % per annum based on the Company's consolidated current leverage ratio.

1 unchanged sentence

The Company has guaranteed the obligations of SYNNEX Japan under this facility.

Latin America revolving line of credit facility

One of t he Company’s subsidiaries in Mexico maintains a United States Dollar denominated $ 40,000 revolving credit facility with a financial institution (the “LATAM facility”).

The revolving credit facility matures in February 2020 .

The Company guarantees the obligations under this credit facility.

The interest rate on this facility ranges from 10.12 % to 10.85 % per annum.

There were no borrowings outstanding under the LATAM facility as of either November 30, 2019 or 2018.

Concentrix India revolving lines of credit facilities

The Company's Indian subsidiaries have credit facilities with a financial institution to borrow up to an aggregate amount of $ 22,000 .

Concentrix' Indian subsidiaries have credit facilities with a financial institution to borrow up to an aggregate amount of $ 22,000 .

The interest rate under these facilities is the higher of the bank's minimum lending rate or LIBOR, plus a margin of 0.9 % per annum.

2 unchanged sentences

There were no borrowings outstanding under these credit facilities as of either November 30, 2020 or 2019.

Subsequent to November 30, 2020, with the completion of the Separation, these facilities are no longer part of the Company’s lines of credit.

SYNNEX United States credit agreement

5 unchanged sentences

Credit Agreement matures in September 2022 .

The outstanding principal amount of the term loan is repayable in quarterly installments of $ 15,000 , with the unpaid balance due in full on the September 2022 maturity date.

The outstanding principal amount of the term loan was repayable in quarterly installments of $ 15,000 , with the unpaid balance due in full on the September 2022 maturity date.

The term loan can be repaid at any time prior to the maturity date without penalty.

At November 30, 2020, in connection with the Separation, the Company partially repaid the term loan using a portion of the funds drawn under the Concentrix United States Credit Agreement and the Concentrix accounts receivable securitization arrangement.

The remaining outstanding principal of the term loan is payable on maturity.

Interest on borrowings under the U.S.

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SYNNEX United States term loan credit agreement

In order to fund the Convergys acquisition (See Note 3 ), the related refinancing or settlement of Convergys' debt and payment of related fees and expenses, the Company entered into a secured term loan credit agreement on August 9, 2018 (the “U.S.

Term Loan Credit Agreement”) with a group of financial institutions, which provided for the extension of one or more term loans in an aggregate principal amount not to exceed $ 1,800,000 .

The Company has a secured term loan credit agreement (the “U.S.

Term Loan Credit Agreement”) with a group of financial institutions in the original principal amount of $ 1,800,000 .

Term Loan Credit Agreement matures in October 2023 .

Until November 30, 2018, the Company had drawn $ 1,550,000 of term loans.

During fiscal year 2019, the Company borrowed the remaining available amount of $ 250,000 under the facility to settle part of Convergys’ outstanding Convertible Debentures.

The outstanding principal amount of the term loans is payable in quarterly installments of $ 22,500 , with the unpaid balance due in full on the maturity date.

The outstanding principal amount of the term loans was payable in quarterly installments of $ 22,500 , with the unpaid balance due in full on the maturity date.

The term loan can be repaid at any time prior to the expiration date without penalty.

At November 30, 2020, in connection with Separation, the Company partially repaid the term loan using a portion of the funds drawn under the Concentrix United States Credit Agreement and the Concentrix accounts receivable securitization arrangement.

The remaining outstanding principal is payable on maturity.

Interest on borrowings under the U.S.

3 unchanged sentences

During the period in which the term loans were available to be drawn, the Company paid term loan commitment fees.

The margins above the Company's applicable interest rates are, and the term loan commitment fee were, based on the Company's consolidated leverage ratio as calculated under the U.S.

The margins above the Company's applicable interest rates are, and the term loan commitment fee were, based on

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the Company's consolidated leverage ratio as calculated under the U.S.

Term Loan Credit Agreement.

2 unchanged sentences

Credit Agreement pursuant to an intercreditor agreement, and are guaranteed by certain of its domestic subsidiaries.

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Convertible Debentures

In connection with the Convergys acquisition, Convergys was merged into Concentrix CVG and Concentrix CVG became the obligor under Convergys' $ 124,963 aggregate principal amount of 5.75 % Junior Subordinated Convertible Debentures due September 2029 .

The Company determined that the embedded conversion feature included in the convertible debentures required liability treatment because a portion was convertible into a fixed dollar amount based on a variable conversion rate, and was recorded at fair value in other accrued liabilities in the Consolidated Balance Sheets.

Subsequent to the acquisition, the Company settled the entire principal amount and conversion obligation in excess of the aggregate principal amount in cash, of which $ 69,982 of the principal amount was settled in cash for $ 148,047 during fiscal year 2019.

Concentrix United States credit agreement

In October 2020, in preparation for the Separation, Concentrix, which was a subsidiary of the Company at the time, entered into a secured credit agreement (the "Concentrix Credit Agreement") with a group of financial institutions.

The Concentrix Credit Agreement includes a $ 600,000 revolving credit facility and a $ 900,000 term loan.

On November 30, 2020, the full amount of the term loan was drawn.

Concentrix may request incremental commitments to increase the principal amount of the revolving line of credit or term loan by $ 450,000 , plus an additional amount which is dependent upon the Concentrix' post Separation pro forma first lien leverage ratio, as calculated under the Concentrix Credit Agreement.

The outstanding principal amount of the term loan is repayable in quarterly installments of $ 11,250 commencing on May 31, 2021 , with the unpaid balance due in full on the November 2025 maturity date.

The term loan can be repaid at any time prior to the maturity date without penalty.

Interest on borrowings under the Concentrix Credit Agreement can be based on LIBOR or a base rate at the Company's option, plus a margin.

The margin for LIBOR loans ranges from 1.25 % to 2.25 % and the margin for base rate loans ranges from 0.25 % to 1.25 %, provided that LIBOR shall not be less than 0.25 %.

The base rate is a variable rate which is the highest of (a) the Federal Funds Rate, plus a margin of 0.5 %, (b) the rate of interest announced, from time to time, by the agent, Bank of America, N.A., as its “prime rate,” and (c) the Eurodollar Rate (subject to a minimum of 0.25 %), plus 1.0 % per annum.

The unused revolving credit facility commitment fee ranges from 0.175 % to 0.30 % per annum.

The margins above the applicable interest rates and the revolving commitment fee for revolving loans are based on Concentrix’ post Separation consolidated leverage ratio, as calculated under the Concentrix Credit Agreement.

The obligations under the Concentrix Credit Agreement are secured by substantially all of Concentrix and its United States domestic subsidiaries’ assets and are guaranteed by certain of Concentrix’ United States domestic subsidiaries.

The funds borrowed under this facility were utilized to partially repay the Company’s outstanding term loans in the United States described earlier in this note.

Subsequent to November 30, 2020, with the completion of the Separation, the Concentrix Credit Agreement is no longer recorded as borrowings on the Company’s consolidated balance sheet .

At November 30, 2020, no amount was outstanding under the revolving line of credit.

Concentrix accounts receivable securitization arrangement

In October 2020, in anticipation of the Separation, Concentrix and certain of its subsidiaries, entered into a $ 350,000 accounts receivable securitization program (the “Concentrix AR Arrangement) with a maturity date of October 2022 .

Under the terms of the Concentrix AR Arrangement, Concentrix and certain of its U.S.

subsidiaries sell, on a revolving basis, their receivables to a wholly-owned, bankruptcy-remote subsidiary of Concentrix, which is the borrower under this facility.

The amount received under the Concentrix AR Arrangement is recorded as debt on the Company's Consolidated Balance Sheet.

Borrowings under this facility will bear interest with respect to loans that lenders fund through the issuance of commercial paper at the applicable commercial paper rate plus a spread of 1.05 % per annum and, otherwise, at a per annum rate equal to the applicable LIBOR rate plus a spread of 1.15 %.

In addition, the borrower is obligated to pay a monthly undrawn fee from the initial funding date that will range from 0.30 % per annum to 0.38 % per annum depending on the amount of outstanding advances from time to time.

The borrowings are funded by pledging all of the rights, title and interest in the receivables acquired by Concentrix’ bankruptcy-remote subsidiary as security.

The funds borrowed under this facility were utilized to partially repay the Company’s outstanding term loans in the United States described later in this note.

Subsequent to November 30, 2020, with the completion of the Separation, the Concentrix AR Arrangement is no longer recorded as borrowings on the Company’s consolidated balance sheet.

SYNNEX Canada revolving line of credit

7 unchanged sentences

Interest rates and other terms of borrowing under these lines of credit vary by country, depending on local market conditions.

Borrowings under these facilities are guaranteed by the Company or secured by accounts receivable.

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

The maximum commitment amounts for local currency credit facilities have been translated into United States Dollars at November 30, 2020 exchange rates.

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Future principal payments

1 unchanged sentence

Fiscal Years Ending November 30,

Subsequent to November 30, 2020, upon completion of the Separation, outstanding borrowings aggregating $ 1,145,118 , net of unamortized debt discount and issuance costs, which were part of the arrangements entered into by Concentrix and its subsidiaries, are no longer recorded as borrowings on the Company’s consolidated balance sheet.

Interest expense and finance charges

5 unchanged sentences

As of November 30, 2020, the Company was in compliance with all material covenants for the above arrangements.

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NOTE 10—EARNINGS PER COMMON SHARE:

1 unchanged sentence

Fiscal Years Ended November 30,

(As adjusted)

Basic earnings per common share:

12 unchanged sentences

Anti-dilutive shares excluded from diluted earnings per share calculation

Restricted stock awards granted to employees by the Company are considered participating securities.

Restricted stock awards granted by the Company are considered participating securities.

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NOTE 11—SEGMENT INFORMATION:

6 unchanged sentences

Fiscal Year ended November 30, 2019

Revenue (as adjusted)

External revenue (as adjusted)

Operating income (as adjusted)

External revenue

Operating income

Depreciation and amortization expense

Total assets (as adjusted)

Fiscal Year ended November 30, 2018

Revenue (as adjusted)

External revenue (as adjusted)

Operating income (as adjusted)

External revenue

Operating income

Depreciation and amortization expense

Total assets (as adjusted)

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Inter-segment elimination represents services and transactions, principally intercompany investments and loans, between the Company’s reportable segments that are eliminated on consolidation.

Inter-segment elimination represents services and other transactions, principally intercompany investments and loans, between the Company’s reportable segments that are eliminated on consolidation.

In preparation of the Separation, SYNNEX entered into a Commercial Agreement with Concentrix effective on December 1, 2020 that governs the provision of ongoing services and other items between SYNNEX and Concentrix.

Geographic information

2 unchanged sentences

Fiscal Years Ended November 30,

(As adjusted)

United States

6 unchanged sentences

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.

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Beneficial ownership of the Company’s common stock by MiTAC Holdings

14 unchanged sentences

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

MiTAC Holdings generally has significant influence over the Company regarding matters submitted to stockholders for consideration, including any merger or acquisition of the Company.

MiTAC Holdings generally has influence over the Company regarding matters submitted to stockholders for consideration, including any merger or acquisition of the Company.

Among other things, this could have the effect of delaying, deterring or preventing a change of control over the Company.

4 unchanged sentences

Reimbursements received (payments made) for rent and overhead costs for use of facilities by MiTAC Holdings and affiliates, net

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

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The Company may make discretionary contributions under the plans.

Employees in most of the Company's foreign subsidiaries are covered by government mandated defined contribution plans.

Employees in most of the Company's international subsidiaries are covered by government mandated defined contribution plans.

During fiscal years 2020, 2019 and 2018, the Company contributed $ 67,772 , $ 47,441 and $ 38,531 , respectively, to defined contribution plans.

3 unchanged sentences

As of November 30, 2020 and 2019, the deferred compensation liability balance was $ 4,628 and $ 5,389 , respectively.

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Defined Benefit Plans

The Company has defined benefit pension or retirement plans for eligible employees in certain foreign subsidiaries.

The Company has defined benefit pension or retirement plans for eligible employees in certain international subsidiaries.

Benefits under these plans are primarily based on years of service and compensation during the years immediately preceding retirement or termination of participation in the plans.

In addition, as part of the Convergys acquisition, the Company acquired a frozen defined benefit pension plan, which includes both a qualified and non-qualified portion, for all eligible employees in the U.S.

In addition, as part of a prior acquisition, the Company acquired a frozen defined benefit pension plan, which includes both a qualified and non-qualified portion, for all eligible employees in the U.S.

(“the cash balance plan”) and unfunded defined benefit plans for certain eligible employees in the Philippines, Malaysia and France.

5 unchanged sentences

The status of employee defined benefit plans is summarized below:

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Year Ended November 30,

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Expected rate of future compensation growth

The following weighted-average rates were used in determining the pension costs at November 30, 2019 and 2018.

Amounts were not material in fiscal year 2017.

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The following weighted-average rates were used in determining the pension costs during fiscal years ended November 30, 2020, 2019 and 2018:

Discount rate

1 unchanged sentence

Expected rate of future compensation growth

The range of discount rates utilized in determining the pension cost and projected benefit obligation of the Company's defined benefit plans reflects a lower prevalent rate applicable to the frozen cash balance plan for eligible employees in U.S.

and a higher applicable rate for the unfunded defined benefit plan for certain eligible employees in the Philippines, France, India, Japan and Malaysia.

1 unchanged sentence

represented approximately 26 % and 24 %, respectively, of the Company's total projected benefit obligation for all plans as of November 30, 2020 and 2019 .

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As of November 30, 2020 and 2019, plan assets for the cash balance plan consisted of common/collective trusts (of which approximately 60 % are invested in equity backed funds and approximately 40 % are invested in funds in fixed income instruments) and a private equity fund.

21 unchanged sentences

The Company also expects approximately $ 4,652 of actuarial loss included in AOCI will be recognized during fiscal year 2021.

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Substantially all of the defined benefit plans are related to the Concentrix segment.

Subsequent to November 30, 2020, upon completion of the Separation, the Company no longer has any obligation under the plans related to the Concentrix segment.

NOTE 14—LEASES:

The Company leases certain of its facilities and equipment under operating lease agreements, which expire in various periods through 2034 .

The Company’s finance leases are not material.

The following table presents the various components of lease costs.

Fiscal Year Ended

Operating lease cost

Short-term lease cost

Variable lease cost

Sublease income

Total operating lease cost

The following table presents a maturity analysis of expected undiscounted cash flows for operating leases on an annual basis for the next five years and thereafter as of November 30, 2020:

Fiscal Years Ending November 30,

Total payments

imputed interest*

Total present value of lease payments

* Imputed interest represents the difference between undiscounted cash flows and discounted cash flows.

Subsequent to November 30, 2020, upon completion of the Separation, undiscounted future cash flows of $ 611,568 which were part of lease agreements entered into by Concentrix are no longer the Company’s obligation.

During the fiscal years ended November 30, 2019 and 2018, rent expense was $ 257,809 and $ 136,870 , respectively.

Sublease income was immaterial for both these years.

The following amounts were recorded in the Company's Consolidated Balance Sheet as of November 30, 2020:

Operating leases

Balance sheet location

Operating lease ROU assets

Other assets, net

Current operating lease liabilities

Other accrued liabilities

Non-current operating lease liabilities

Other long-term liabilities

The following table presents s upplemental cash flow information related to the Company's operating leases for fiscal year ended November 30, 2020.

Cash payments related to variable lease costs and short-term leases are not included in the measurement of operating lease liabilities, and, as such, are excluded from the amounts below :

Fiscal Year Ended

Cash flow information

November 30, 2020

Cash paid for amounts included in the measurement of lease liabilities

Non-cash ROU assets obtained in exchange for lease liabilities (subsequent to initial adoption)

The weighted-average remaining lease term and discount rate as of November 30, 2020 were as follows:

Operating lease term and discount rate

Operating Leases

Weighted-average remaining lease term (years)

Weighted-average discount rate

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Future minimum contractually required cash payment obligations under non-cancellable lease agreements as of November 30, 2019 were as follows:

Fiscal Years Ending November 30,

Total minimum lease payments

NOTE 15—INCOME TAXES:

1 unchanged sentence

Fiscal Years Ended November 30,

(As adjusted)

United States

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Provision for income taxes consists of the following:

Fiscal Years Ended November 30,

(As adjusted)

Current tax provision:

1 unchanged sentence

Total tax provision

On December 22, 2017, Public Law 115-97, informally referred to as the Tax Cuts and Jobs Act (the “TCJA”) was enacted into law.

On December 22, 2017, the TCJA was enacted into law.

The TCJA provided for significant changes to the U.S.

9 unchanged sentences

As of November 30,

(As adjusted)

Deferred tax assets

4 unchanged sentences

As of November 30,

(As adjusted)

Operating lease liability

Net operating losses

1 unchanged sentence

Unrealized losses on cash flow hedges

Allowance for doubtful accounts and sales return reserves

Inventory reserves

Depreciation and amortization

Share-based compensation expense

Allowance for doubtful accounts and sales return reserves

Deferred revenue

Intercompany payables/receivables

Foreign tax credit

Deferred revenue

Deferred and prepaid compensation

Property, Equipment and Intangible assets

Gross deferred tax assets

3 unchanged sentences

Unremitted non-U.S.

Depreciation and amortization

Total deferred tax liabilities

4 unchanged sentences

Fiscal Years Ended November 30,

(As adjusted)

Federal statutory income tax rate

State taxes, net of federal income tax benefit

Global intangible low taxed income

Foreign taxes

Tax on anticipated distributions from subsidiaries

Adjustments related to the TCJA

Global intangible low taxed income

Uncertain tax benefits

Tax on anticipated distributions from subsidiaries

Effective income tax rate

21 unchanged sentences

Additions based on tax positions related to the current year

Additions for tax positions of prior years

Additions for tax positions of prior years and acquisition

Lapse of statute of limitations

8 unchanged sentences

Additions for tax positions of prior years and acquisition

Reductions for tax positions of prior years

Lapse of statute of limitations

4 unchanged sentences

The Company is subject to continuous examination and audits by various tax authorities.

Significant audits are underway in the Unites States, Canada and India.

Significant audits are underway in the United States, Canada and India.

The Company is not aware of any material exposures arising from these tax audits or in other jurisdictions not already provided for.

6 unchanged sentences

As of November 30, 2020 and 2019, the Company had accrued $ 15,686 and $ 15,627 , respectively, in income taxes payable related to accrued interest and penalties.

In preparation of the Separation, SYNNEX entered into a Tax Matters Agreement with Concentrix effective on December 1, 2020 that governs the rights and obligations of SYNNEX and Concentrix for certain pre-Separation tax liabilities.

The Tax Matters Agreement provides that SYNNEX and Concentrix will share certain pre-Separation income tax liabilities that arise from adjustments made by tax authorities to SYNNEX and Concentrix’ U.S.

and certain non-U.S.

income tax returns.

In certain jurisdictions SYNNEX and Concentrix have joint and several liability for past income tax liabilities and accordingly, SYNNEX could be legally liable under applicable tax law for such liabilities and required to make additional tax payments.

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In addition, if the distribution of Concentrix' common shares to the SYNNEX stockholders is determined to be taxable, Concentrix and SYNNEX would share the tax liability equally, unless the taxability of the distribution is the direct result of action taken by either Concentrix or SYNNEX subsequent to the distribution in which case the party causing the distribution to be taxable would be responsible for any taxes imposed on the distribution.

NOTE 16—COMMITMENTS AND CONTINGENCIES:

The Company leases certain of its facilities and equipment under operating lease agreements, which expire in various periods through 2034.

Future minimum contractually required cash payment obligations under non-cancellable lease agreements as of November 30, 2019 were as follows:

Fiscal Years Ending November 30,

Total minimum lease payments

Rent expense for the years ended November 30, 2019, 2018 and 2017 amounted to $ 257,809 , $ 136,870 and $ 115,480 , respectively.

Sublease income was immaterial for each of the periods presented and is immaterial for the amounts entitled to be received in future periods under non-cancellable sublease arrangements.

The Company was contingently liable as of November 30, 2020 under agreements to repurchase repossessed inventory acquired by flooring companies as a result of default on floor plan financing arrangements by the Company's customers.

9 unchanged sentences

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

Under the separation and distribution agreement, 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.

SYNNEX 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.

NOTE 17—SUBSEQUENT EVENT:

On January 9, 2020, the Company announced a plan to separate its Concentrix segment into an independent publicly-traded company, in a transaction expected to be completed in the second half of 2020.

The separation is intended to qualify as a tax-free transaction for federal income tax purposes for both the Company and its current stockholders.

Immediately following the separation, it is expected that the Company’s stockholders will own shares of both SYNNEX and Concentrix, at the same percentage ownership that they held of SYNNEX prior to the transaction.

Completion of the separation will not require a stockholder vote but will be subject to customary closing conditions, including, among others, obtaining final approval from the Company’s Board of Directors, receipt of a favorable opinion with respect to the tax-free nature of the transaction for federal income tax purposes, and the effectiveness of a Form 10 registration statement with the Securities and Exchange Commission.

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SELECTED QUARTERLY CONSOLIDAT ED FINANCIAL DATA (Unaudited)

NOTE 17—SUBSEQUENT EVENTS:

As described in Note 1 , on December 1, 2020, the Company completed the previously announced separation of Concentrix, its customer experience services businesses, into an independent public company in a tax-free transaction for federal income tax purposes .

In order to present the impact of the Separation, the Company has prepared t he following unaudited pro forma condensed consolidated balance sheet as if the Separation occurred on November 30, 2020.

The unaudited pro forma condensed consolidated balance sheet has been prepared for illustrative and informational purposes only and does not purport to project the future financial position of SYNNEX following the completion of the Separation.

The pro forma adjustments include classification of intercompany balances as third party balances and a charge to SYNNEX’ consolidated retained earnings to reflect the distribution of Concentrix stock to its stockholders.

Pro forma SYNNEX

Current assets:

Cash and cash equivalents

Accounts receivable, net

Receivable from vendors, net

Other current assets

Total current assets

Property and equipment, net

Intangible assets, net

Deferred tax assets

LIABILITIES AND EQUITY

Current liabilities:

Borrowings, current

Accounts payable

Accrued compensation and benefits

Other accrued liabilities

Income taxes payable

Total current liabilities

Long-term borrowings

Other long-term liabilities

Deferred tax liabilities

Total liabilities

Stockholders' equity

Total liabilities and equity

As described in Note 3 , on January 11, 2021 , the Company declared the reinstatement of a quarterly cash dividend.

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SELECTED QUARTERLY CONSOLIDATED FINANCIAL DATA (Unaudited)

The following table presents selected unaudited consolidated financial results for each of the eight quarters in the two-year period ended November 30, 2020.

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Total revenue

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What changed 10-K

Item 7A. Quantitative and Qualitative Disclosures About Market Risk