TD SYNNEX CORP 10-K

Item 7A. Quantitative and Qualitative Disclosures about Market Risk Foreign Currency Risk We are exposed to foreign currency risk in the ordinary course of business. 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, Japanese Yen, British Pound and Chinese Yuan. We do not hold or issue derivative financial instruments for trading purposes. The following table presents the hypothetical changes in fair values of our outstanding foreign currency derivative instruments as of November 30, 2020 and 2019, arising from an instantaneous strengthening or weakening of the U.S. dollar by 5%, 10% and 15% (in thousands). Loss on Derivative Instruments Given a Weakening of U.S. dollar by X Percent Gain (Loss) Assuming No Change in Exchange Rate Gain on Derivative Instruments Given a Strengthening of U.S. dollar by X Percent 15% 10% 5% 5% 10% 15% Forward contracts at November 30, 2020 $ 262,969 $ 187,375 $ 119,730 $ 58,842 $ 3,747 $ (46,345 ) $ (90,519 ) Forward contracts at November 30, 2019 $ 231,880 $ 156,971 $ 89,117 $ 27,256 $ (29,477 ) $ (81,785 ) $ (129,773 ) 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 All of the long-term forward contracts were related to the Concentrix segment and upon completion of the Separation no longer represent a risk to us.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 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. Interest Rate Risk Our exposure to changes in interest rates relates primarily to our outstanding debt obligations which have floated relative to major interest rate benchmarks in the United States, Canada and Japan. We are most sensitive to fluctuations in U.S. 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 $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. 42 Table of Content 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). Interest Expense Given an Interest Rate Decrease by X Percent Actual Interest Expense Assuming No Change in Interest Rate Interest Expense Given an Interest Rate Increase by X Percent 15% 10% 5% 5% 10% 15% SYNNEX US $ 112,255 $ 112,716 $ 113,177 $ 113,638 $ 114,099 $ 114,560 $ 115,021 SYNNEX Canada 812 816 819 823 826 830 834 SYNNEX Japan 1,718 1,721 1,724 1,727 1,730 1,733 1,736 Total for the year ended November 30, 2020 $ 114,785 $ 115,253 $ 115,720 $ 116,188 $ 116,655 $ 117,123 $ 117,591 Interest Expense Given an Interest Rate Decrease by X Percent Actual Interest Expense Assuming No Change in Interest Rate Interest Expense Given an Interest Rate Increase by X Percent 15% 10% 5% 5% 10% 15% SYNNEX US $ 145,869 $ 149,180 $ 152,490 $ 155,801 $ 159,111 $ 162,422 $ 165,732 SYNNEX Canada 686 690 695 699 703 708 712 SYNNEX Japan 1,125 1,130 1,135 1,141 1,146 1,152 1,157 Total for the year ended November 30, 2019 $ 147,680 $ 151,000 $ 154,320 $ 157,641 $ 160,960 $ 164,282 $ 167,601 Equity Price Risk The equity price risk associated with our marketable equity securities as of November 30, 2020 and 2019 is not material in relation to our consolidated financial position, results of operations or cash flows. Marketable equity securities include shares of common stock and are recorded at fair market value based on quoted market prices. Gains and losses on marketable equity securities are included in earnings. 43 Table of Content Item 8. Financial Statemen ts and Supplementary Data INDEX Page Consolidated Financial Statements of SYNNEX Corporation Management’s Report on Internal Control over Financial Reporting 45 Report of Independent Registered Public Accounting Firm 46 Consolidated Balance Sheets as of November 30, 2020 and 2019 48 Consolidated Statements of Operations for Fiscal Years Ended November 30, 2020, 2019 and 2018 49 Consolidated Statements of Comprehensive Income for Fiscal Years Ended November 30, 2020, 2019 and 2018 50 Consolidated Statements of Stockholders’ Equity for Fiscal Years Ended November 30, 2020, 2019 and 2018 51 Consolidated Statements of Cash Flows for Fiscal Years Ended November 30, 2020, 2019 and 2018 52 Notes to Consolidated Financial Statements 53 Selected Quarterly Consolidated Financial Data (Unaudited) 85 Financial Statement Schedule Schedule II: Valuation and Qualifying Accounts for Fiscal Years Ended November 30, 2020, 2019 and 2018 86 Financial statement schedules not listed above are either omitted because they are not applicable or the required information is shown in the Consolidated Financial Statements or in the Notes thereto. 44 Table of Content Management’s Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f). Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of ours are being made only in accordance with authorizations of management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework). Based on this assessment, our management concludes that, as of November 30, 2020, our internal control over financial reporting was effective at the reasonable assurance level based on those criteria. The effectiveness of our internal control over financial reporting as of November 30, 2020 has been audited by KPMG LLP, an independent registered public accounting firm, as stated in their report which appears on page 46 of this Report. 45 Table of Content Report of Independent Registered Public Accounting Firm To the Stockholders and Board of Directors SYNNEX Corporation: Opinions on the Consolidated Financial Statements and Internal Control Over Financial Reporting 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, 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 The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s consolidated financial statements and an opinion on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. 46 Table of Content Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Critical Audit 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 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. /s/ KPMG LLP We have served as the Company’s auditor since 2012. Santa Clara, California January 28, 2021 47 Table of Content SYNNEX CORPORATION CONSOLIDATED BALANCE SHEETS (currency and share amounts in thousands, except par value) November 30, 2020 November 30, 2019 ASSETS Current assets: Cash and cash equivalents $ 1,564,672 $ 225,529 Accounts receivable, net 3,870,789 3,926,709 Receivables from vendors, net 286,327 368,505 Inventories 2,684,530 2,547,224 Other current assets 362,808 385,024 Total current assets 8,769,127 7,452,992 Property and equipment, net 609,294 569,899 Goodwill 2,259,935 2,254,402 Intangible assets, net 985,006 1,162,212 Deferred tax assets 87,059 97,539 Other assets, net 758,169 160,917 Total assets $ 13,468,590 $ 11,697,960 LIABILITIES AND EQUITY Current liabilities: Borrowings, current $ 158,715 $ 298,969 Accounts payable 3,891,815 3,149,443 Accrued compensation and benefits 522,790 402,771 Other accrued liabilities 989,684 723,716 Income taxes payable 67,088 32,223 Total current liabilities 5,630,092 4,607,122 Long-term borrowings 2,608,061 2,718,267 Other long-term liabilities 732,182 361,911 Deferred tax liabilities 159,396 222,210 Total liabilities 9,129,731 7,909,510 Commitments and contingencies ( Note 16 ) Stockholders’ equity: Preferred stock, $ 0.001 par value, 5,000 shares authorized, no shares issued or outstanding — — Common stock, $ 0.001 par value, 100,000 shares authorized, 53,671 and 53,154 shares issued as of November 30, 2020 and 2019, respectively 54 53 Additional paid-in capital 1,591,536 1,545,421 Treasury stock, 2,538 and 2,399 shares as of November 30, 2020 and 2019, respectively ( 191,216 ) ( 172,627 ) Accumulated other comprehensive income (loss) ( 194,571 ) ( 209,077 ) Retained earnings 3,133,058 2,624,680 Total stockholders' equity 4,338,860 3,788,450 Total liabilities and equity $ 13,468,590 $ 11,697,960 (Amounts may not add due to rounding) The accompanying Notes are an integral part of these Consolidated Financial Statements. 48 Table of Content SYNNEX CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (currency and share amounts in thousands, except per share amounts) Fiscal Years Ended November 30, 2020 2019 2018 Revenue: Products $ 19,976,885 $ 19,069,966 $ 17,323,078 Services 4,698,678 4,687,327 2,444,867 Total revenue 24,675,563 23,757,293 19,767,945 Cost of revenue: Products ( 18,783,042 ) ( 17,912,711 ) ( 16,326,576 ) Services ( 3,044,916 ) ( 2,946,664 ) ( 1,514,470 ) Gross profit 2,847,604 2,897,917 1,926,899 Selling, general and administrative expenses ( 2,017,502 ) ( 2,084,156 ) ( 1,376,664 ) Operating income 830,103 813,761 550,236 Interest expense and finance charges, net ( 127,336 ) ( 166,421 ) ( 84,675 ) Other income (expense), net 1,276 30,363 ( 8,984 ) Income before income taxes 704,042 677,703 456,577 Provision for income taxes ( 174,882 ) ( 176,991 ) ( 156,596 ) Net income $ 529,160 $ 500,712 $ 299,981 Earnings per common share: Basic $ 10.28 $ 9.79 $ 7.21 Diluted $ 10.21 $ 9.74 $ 7.17 Weighted-average common shares outstanding: Basic 50,900 50,669 41,215 Diluted 51,237 50,936 41,451 (Amounts may not add due to rounding) The accompanying Notes are an integral part of these Consolidated Financial Statements. 49 Table of Content SYNNEX CORPORATION CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (currency in thousands) Fiscal Years Ended November 30, 2020 2019 2018 Net income $ 529,160 $ 500,712 $ 299,981 Other comprehensive income (loss): 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. ( 8,500 ) ( 27,312 ) ( 2,989 ) Reclassification of net (gains) losses to net income, net of tax of $ 0 for fiscal years ended November 30, 2020, 2019 and 2018. ( 300 ) 1,791 2,039 Total change in unrealized losses of defined benefit plans, net of taxes ( 8,800 ) ( 25,521 ) ( 950 ) Unrealized gains (losses) on cash flow hedges during the period, net of taxes of $ 3,981 , $ 15,083 and $( 6,532 ) for fiscal years ended November 30, 2020, 2019 and 2018, respectively. ( 16,405 ) ( 52,714 ) 19,638 Reclassification of net (gains) losses on cash flow hedges to net income, net of tax expense (benefit) of ($ 880 ), $ 3,792 and $ 1,150 for fiscal years ended November 30, 2020, 2019 and 2018, respectively. 3,190 ( 11,138 ) ( 3,104 ) Total change in unrealized gains (losses) on cash flow hedges, net of taxes ( 13,215 ) ( 63,852 ) 16,534 Foreign currency translation adjustments, net of taxes of $ 603 , $ 1,767 and $ 274 for fiscal years ended November 30, 2020, 2019 and 2018, respectively 36,521 8,539 ( 79,953 ) Other comprehensive income (loss) 14,506 ( 80,834 ) ( 64,369 ) Comprehensive income $ 543,666 $ 419,878 $ 235,612 (Amounts may not add due to rounding) The accompanying Notes are an integral part of these Consolidated Financial Statements. 50 Table of Content SYNNEX CORPORATION CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (currency and share amounts in thousands) Common stock Additional paid-in Treasury stock Accumulated other comprehensive Retained Shares Amount capital Shares Amount income (loss) earnings Total stockholders' equity Balances, November 30, 2017 41,092 $ 41 $ 467,948 1,419 $ ( 77,133 ) $ ( 61,919 ) $ 1,958,361 $ 2,287,298 Share-based compensation — — 22,678 — — — — 22,678 Issuance of common stock on exercise of options, for employee stock purchase plan and vesting of restricted stock, net of shares withheld for employee taxes 258 — 4,924 68 ( 6,413 ) — — ( 1,489 ) Repurchases of common stock — — — 680 ( 65,987 ) — — ( 65,987 ) Cash dividends declared — — — — — — ( 59,720 ) ( 59,720 ) Common stock issued for the acquisition of Convergys, net of stock issuance costs 11,511 12 1,016,652 — — — — 1,016,664 Other comprehensive income (loss) — — — — — ( 64,369 ) — ( 64,369 ) Net income — — — — — — 299,981 299,981 Balances, November 30, 2018 52,861 53 1,512,201 2,167 ( 149,533 ) ( 126,288 ) 2,198,621 3,435,054 Share-based compensation — — 27,959 — — — — 27,959 Issuance of common stock on exercise of options, for employee stock purchase plan and vesting of restricted stock, net of shares withheld for employee taxes 293 — 5,367 72 ( 7,911 ) — — ( 2,544 ) Repurchases of common stock — — — 160 ( 15,184 ) — — ( 15,184 ) Cash dividends declared — — — — — — ( 76,607 ) ( 76,607 ) Other comprehensive income (loss) — — — — — ( 80,834 ) — ( 80,834 ) Cumulative effect of changes in accounting principles — — — — — ( 1,955 ) 1,955 — Stock issuance costs (related to the Convergys acquisition in fiscal year 2018) — — ( 107 ) — — — — ( 107 ) Net income — — — — — — 500,712 500,712 Balances, November 30, 2019 53,154 53 1,545,421 2,399 ( 172,627 ) ( 209,077 ) 2,624,680 3,788,450 Share-based compensation — — 33,202 — — — — 33,202 Issuance of common stock on exercise of options, for employee stock purchase plan and vesting of restricted stock, net of shares withheld for employee taxes 517 1 12,913 104 ( 15,184 ) — — ( 2,270 ) Repurchases of common stock — — — 35 ( 3,405 ) — — ( 3,405 ) Cash dividends declared — — — — — — ( 20,782 ) ( 20,782 ) Other comprehensive income (loss) — — — — — 14,506 — 14,506 Net income — — — — — — 529,160 529,160 Balances, November 30, 2020 53,671 $ 54 $ 1,591,536 2,538 $ ( 191,216 ) $ ( 194,571 ) $ 3,133,058 $ 4,338,860 (Amounts may not add due to rounding) The accompanying Notes are an integral part of these Consolidated Financial Statements. 51 Table of Content SYNNEX CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (currency in thousands) Fiscal Years Ended November 30, 2020 2019 2018 Cash flows from operating activities: Net income $ 529,160 $ 500,712 $ 299,981 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 341,637 372,108 225,287 Share-based compensation 33,202 27,959 22,678 Provision for doubtful accounts 49,281 34,911 7,246 Deferred income taxes ( 48,992 ) ( 18,189 ) ( 47,072 ) Contingent consideration — ( 19,034 ) — Unrealized foreign exchange (gains) losses 6,406 1,521 8,867 Convertible debt conversion option fair value and extinguishment (gains) losses — 1,559 ( 9,996 ) Other 12,158 9,719 ( 2,310 ) Changes in operating assets and liabilities, net of acquisition of businesses: Accounts receivable, net 12,691 ( 326,681 ) ( 451,188 ) Receivables from vendors, net 79,842 ( 26,389 ) ( 63,831 ) Inventories ( 128,786 ) ( 153,134 ) ( 366,392 ) Accounts payable 685,014 98,392 381,970 Other operating assets and liabilities 262,753 46,465 95,466 Net cash provided by operating activities 1,834,366 549,919 100,706 Cash flows from investing activities: Proceeds from maturity of held-to-maturity investments — — 5,680 Proceeds from sale of trading investments — — 12,893 Purchases of property and equipment ( 197,965 ) ( 137,423 ) ( 125,305 ) Acquisition of businesses (primarily Convergys), net of cash acquired ( 5,560 ) ( 9,427 ) ( 1,069,946 ) Other ( 5,970 ) 13 ( 2,914 ) Net cash used in investing activities ( 209,495 ) ( 146,837 ) ( 1,179,592 ) Cash flows from financing activities: Proceeds from borrowings, net of debt discount and issuance costs ($ 8,521 , $ 22 and $ 9,187 in fiscal years ended November 30, 2020, 2019 and 2018, respectively) 5,148,636 7,503,576 10,060,449 Repayments of borrowings ( 5,411,247 ) ( 8,024,961 ) ( 8,930,165 ) Dividends paid ( 20,782 ) ( 76,607 ) ( 59,720 ) Increase (decrease) in book overdraft ( 2,627 ) ( 1,908 ) ( 1,028 ) Repurchases of common stock ( 3,405 ) ( 15,184 ) ( 65,987 ) Proceeds from issuance of common stock 12,913 5,367 4,924 Repurchases of common stock for tax withholdings on equity awards ( 15,184 ) ( 7,911 ) ( 6,413 ) Settlement of contingent consideration — ( 13,966 ) — Other — ( 107 ) ( 914 ) Net cash provided by (used in) financing activities ( 291,696 ) ( 631,701 ) 1,001,146 Effect of exchange rate changes on cash, cash equivalents and restricted cash 4,545 ( 2,265 ) ( 16,969 ) Net increase (decrease) in cash, cash equivalents and restricted cash 1,337,721 ( 230,884 ) ( 94,709 ) Cash, cash equivalents and restricted cash at beginning of year 231,149 462,033 556,742 Cash, cash equivalents and restricted cash at end of year $ 1,568,870 $ 231,149 $ 462,033 Supplemental disclosures of cash flow information: Interest paid on borrowings $ 120,896 $ 156,261 $ 88,645 Income taxes paid $ 179,707 $ 236,493 $ 144,705 Supplemental disclosure of non-cash investing activities: Fair value of common stock issued for acquisition of Convergys business $ — $ — $ 1,017,329 Accrued costs for property and equipment purchases $ 9,651 $ 10,117 $ 4,186 (Amounts may not add due to rounding) The accompanying Notes are an integral part of these Consolidated Financial Statements. 52 Table of Content SYNNEX CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (currency and share amounts in thousands, except per share amounts) NOTE 1—ORGANIZATION AND BASIS OF PRESENTATION: 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: Technology Solutions and Concentrix. 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 five primary industry verticals. Certain columns and rows may not add due to the use of rounded numbers. NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Use of estimates The preparation of financial statements in conformity with generally accepted accounting principles (“GAAP”) in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expense during the reporting period. The Company evaluates these estimates on a regular basis and bases them on historical experience and on various assumptions that the Company believes are reasonable. 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. Principles of consolidation The Consolidated Financial Statements include the accounts of the Company, its wholly-owned subsidiaries, majority-owned subsidiaries in which no substantive participating rights are held by minority stockholders and variable interest entities if the Company is the primary beneficiary. All intercompany accounts and transactions have been eliminated. The Consolidated Financial Statements include 100 % of the assets and liabilities of majority-owned subsidiaries. Investments in 20 % through 50 % owned affiliated companies are accounted under the equity method where the Company exercises significant influence over operating and financial affairs of the investee and is not the primary beneficiary. Investments in less than 20 % owned companies, where the Company does not have significant influence, are recorded at cost or fair value based on whether the equity securities have readily determinable fair values. 53 Table of Content Segment reporting Operating segments are based on components of the Company that engage in business activity that earn revenue and incur expenses and (a) whose operating results are regularly reviewed by the Company’s chief operating decision maker to make decisions about resource allocation and performance and (b) for which discrete financial information is available. The Company has two reportable segments: Technology Solutions and Concentrix. The Technology Solutions segment represents an aggregation of the Technology Solutions United States, Canada, Japan and Latin America operating segments. The Technology Solutions segment distributes peripherals, IT systems, including data center servers, system components, software, networking, communications and security equipment, consumer electronics (“CE”) and complementary products to a variety of customers, including value-added resellers, system integrators and retailers. 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 five 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. Cash and cash equivalents The Company considers all highly liquid debt instruments purchased with an original maturity or remaining maturity at the date of purchase of three months or less to be cash equivalents. Cash equivalents consist principally of money market deposit accounts and money market funds that are stated at cost, which approximates fair value. The Company is exposed to credit risk in the event of default by financial institutions to the extent that cash balances with financial institutions are in excess of amounts that are insured. Allowance for doubtful accounts The allowance for doubtful accounts is an estimate to cover the losses resulting from uncertainty regarding collections from customers or original equipment manufacturer (“OEM”) vendors to make payments for outstanding balances. In estimating the required allowance, the Company takes into consideration the overall quality and aging of the accounts receivable, credit evaluations of customers’ financial condition and existence of credit insurance. The Company also evaluates the collectability of accounts receivable based on specific customer or OEM vendor circumstances, current economic trends, historical experience with collections and any value and adequacy of collateral received from customers. Inventories Inventories are stated at the lower of cost and net realizable value. Cost is computed based on the weighted-average method. Inventories are comprised of finished goods and work-in-process. Finished goods include products purchased for resale, system components purchased for both resale and for use in the Company’s systems design and integration business, and completed systems. Work-in-process inventories are not material to the Consolidated Financial Statements. Derivative Financial Instruments The Company accounts for its derivative instruments as either assets or liabilities and carries them at fair value. For derivative instruments that hedge the exposure to variability in expected future cash flows that are designated as cash flow hedges, the gain or loss on the derivative instrument is reported as a component of “Accumulated other comprehensive income (loss)” in stockholders’ equity and reclassified into earnings in the same line associated with the forecasted transactions, in the same period or periods during which the hedged transaction affects earnings. To receive hedge accounting treatment, cash flow hedges must be highly effective in offsetting changes to expected future cash flows on hedged transactions. 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. 54 Table of Content Property and equipment Property and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method based upon the shorter of the estimated useful lives of the assets, or the lease term of the respective assets, if applicable. Maintenance and repairs are charged to expense as incurred, and improvements are capitalized. When assets are retired or otherwise disposed of, the cost and accumulated depreciation and amortization are removed from the accounts and any resulting gain or loss is reflected in operations in the period realized. The ranges of estimated useful lives for property and equipment categories are as follows: Equipment and Furniture 3 - 10 years Software 3 - 7 years Leasehold improvements 2 - 15 years Buildings and building improvements 10 - 40 years Business Combinations The purchase price is allocated to the assets acquired, liabilities assumed, and noncontrolling interests in the acquired entity generally based on their fair values at the acquisition date. The excess of the fair value of purchase consideration over the fair value of these assets acquired, liabilities assumed and noncontrolling interests in the acquired entity is recorded as goodwill. The primary items that generate goodwill include the value of the synergies between the acquired entity and the Company and the value of the acquired assembled workforce, neither of which qualify for recognition as an intangible asset. Amounts recorded in a business combination may change during the measurement period, which is a period not to exceed one year from the date of acquisition, as additional information about conditions existing at the acquisition date becomes available. The Company includes the results of operations of the acquired business in the Consolidated Financial Statements prospectively from the date of acquisition. Acquisition-related charges are recognized separately from the business combination and are expensed as incurred. These charges primarily include direct third-party professional and legal fees, and integration-related costs. Goodwill and intangible assets The values assigned to intangible assets are based on estimates and judgment regarding expectations for the success and life cycle of products and technologies and length of customer relationships acquired in a business combination. Purchased intangible assets are amortized over the useful lives based on estimates of the use of the economic benefit of the asset or on the straight-line amortization method. The Company allocates goodwill to reporting units based on the reporting unit expected to benefit from the business combination and tests for impairment annually in the fourth quarter or more frequently if events or changes in circumstances indicate that it may be impaired. Goodwill is tested for impairment at the reporting unit level by first performing a qualitative assessment to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying value. The factors that are considered in the qualitative analysis include macroeconomic conditions, industry and market considerations, cost factors such as increases in product cost, labor, or other costs that would have a negative effect on earnings and cash flows; and other relevant entity-specific events and information. If the reporting unit does not pass the qualitative assessment, then the reporting unit’s carrying value is compared to its fair value. The fair values of the reporting units are estimated using market and discounted cash flow approaches. The assumptions used in the market approach are based on the value of a business through an analysis of sales and other multiples of guideline companies and recent sales or offerings of a comparable entity. The assumptions used in the discounted cash flow approach are based on historical and forecasted revenue, operating costs, future economic conditions, and other relevant factors. Goodwill is considered impaired if the carrying value of the reporting unit exceeds its fair value and the excess is recognized as an impairment loss. No goodwill impairment has been identified for any of the years presented. Intangible assets consist primarily of customer relationships and lists, vendor lists, technology and trade names. Amortization is based on the pattern in which the economic benefits of the intangible assets will be consumed or on a straight line basis when the consumption pattern is not apparent over the following useful lives: Customer relationships and lists 4 - 15 years Vendor lists 10 years Technology 5 years Other intangible assets 1 - 10 years 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 55 Table of Content recoverable. The assessment of possible impairment is based on the Company’s ability to recover the carrying value of the asset or asset group from the expected future pre-tax cash flows, undiscounted and without interest charges, of the related operations. If these cash flows are less than the carrying value of such assets, an impairment loss is recognized for the difference between estimated fair value and carrying value. Leases The Company enters into leases as a lessee for property and equipment in the ordinary course of business. When procuring goods or services, or upon entering into a contract with its customers 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 Financial instruments that potentially subject the Company to significant concentration of credit risk consist principally of cash and cash equivalents, accounts receivable and derivative instruments. The Company’s cash and cash equivalents and derivative instruments are transacted and maintained with financial institutions with high credit standing, and their compositions and maturities are regularly monitored by management. Through November 30, 2020, the Company has not experienced any credit losses on such deposits and derivative instruments. Accounts receivable include amounts due from customers, including related party customers. Receivables from vendors, net, includes amounts due from OEM vendors primarily in the technology industry. The Company performs ongoing credit evaluations of its customers’ financial condition and limits the amount of credit extended when deemed necessary, but generally requires no collateral. The Company also maintains allowances for potential credit losses. In estimating the required allowances, the Company takes into consideration the overall quality and aging of its receivable portfolio, the existence of a limited amount of credit insurance and specifically identified customer and vendor risks. Through November 30, 2020, such losses have been within management’s expectations. 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 Book overdrafts, representing checks issued in excess of balances on deposit in the applicable bank accounts and which have not been paid by the applicable bank at the balance sheet date are classified as “Borrowings, current” in the Company’s Consolidated Balance Sheets. Under the terms of the Company’s banking arrangements, the respective financial institutions are not legally obligated to honor the book overdraft balances. The Company’s policy is to report the change in book overdrafts as a financing activity in the Consolidated Statements of Cash Flows. 56 Table of Content Revenue recognition 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. Products revenue represents revenue from the Company’s Technology Solutions segment and services revenue represents revenue from the Company’s Concentrix segment. Technology Solutions The Company recognizes revenues from the sale of IT hardware and software as control is transferred to customers, which is at the point in time when the product is shipped or delivered. The Company accounts for a contract with a customer when it has written approval, the contract is committed, the rights of the parties, including payment terms, are identified, the contract has commercial substance and consideration is probable of collection. Binding purchase orders from customers together with agreement to the Company's terms and conditions of sale by way of an executed agreement or other signed documents are considered to be the contract with a customer. Products sold by the Company are delivered via shipment from the Company’s facilities, drop-shipment directly from the vendor, or by electronic delivery of software products. In situations where arrangements include customer acceptance provisions, revenue is recognized when the Company can objectively verify the products comply with specifications underlying acceptance and the customer has control of the products. Revenue is presented net of taxes collected from customers and remitted to government authorities. The Company generally invoices a customer upon shipment, or in accordance with specific contractual provisions. Payments are due as per contract terms and do not contain a significant financing component. Provisions for sales returns and allowances are estimated based on historical data and are recorded concurrently with the recognition of revenue. A liability is recorded at the time of sale for estimated product returns based upon historical experience and an asset is recognized for the amount expected to be recorded in inventory upon product return. These provisions are reviewed and adjusted periodically by the Company. Revenue is reduced for early payment discounts and volume incentive rebates offered to customers, which are considered variable consideration, at the time of sale based on an evaluation of the contract terms and historical experience. The Company recognizes revenue on a net basis on certain contracts, where the Company’s performance obligation is to arrange for the products or services to be provided by another party or the rendering of logistics services for the delivery of inventory for which the Company does not assume the risks and rewards of ownership , by recognizing the margins earned in revenue with no associated cost of revenue. Such arrangements, 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. The Company considers shipping and handling activities as costs to fulfill the sale of products. Shipping revenue is included in revenue when control of the product is transferred to the customer, and the related shipping and handling costs are included in cost of products sold. Concentrix 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. The Company accounts for a contract with a customer when it has written approval, the contract is committed, the rights of the parties, including payment terms, are identified, the contract has commercial substance and consideration is probable of collection. Revenue is presented net of taxes collected from customers and remitted to government authorities. The Company generally invoices a customer after performance of services or in accordance with specific contractual provisions. Service contracts may be based on a fixed price or on a fixed unit-price per transaction or other objective measure of output. The Company determines whether the services performed during the initial phases of an arrangement, such as setup activities, are distinct. In most cases, the arrangement is a single performance obligation comprised of a series of distinct services that are substantially the same and that have the same pattern of transfer (i.e., distinct days of service). The Company records deferred revenue attributable to certain process transition, setup activities where such activities do not represent separate performance obligations. Billings related to such transition activities are classified under contract liabilities and subsequently recognized ratably over the period in which the related services are performed. The Company applies a measure of progress (typically time-based) to any fixed consideration and allocates variable consideration to the distinct periods of service based on usage. As a result, revenue is generally recognized over the period the services are provided on a usage basis. This results in revenue recognition that corresponds with the benefit to the client of the services transferred to date relative to the remaining services promised. Revenue on fixed price contracts is recognized on a straight-line basis over the term of the contract as services are provided. Revenue on unit-price transactions is recognized using an objective measure of output including staffing hours or the number of transactions processed by service agents. Client contract terms can range from less than one year to more than five years. The Company generally invoices a customer after performance of services, or in accordance with specific contractual provisions. Payments are due as per contract terms and do not contain a significant financing component. 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 57 Table of Content 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 is presented in Note 11 . Cost of Revenue Cost of products revenue represents cost of the Company’s Technology Solutions segment and cost of services revenue represents cost of the Company’s Concentrix segment. Technology Solutions Cost of revenue includes the product price paid to OEM suppliers, net of any incentives, rebates, price protection and purchase discounts received from the OEM suppliers. Cost of revenue also consists of provisions for inventory losses and write-downs, shipping and handling costs and royalties due to OEM vendors. In addition, cost of revenue includes the cost of materials, labor and overhead and warranty for design and integration activities. Concentrix Recurring direct operating costs for services are recognized as incurred. Cost of services revenue consists primarily of personnel costs. Where a contract requires an up-front investment, which typically includes transition and set-up costs related to systems and processes, these amounts are deferred and amortized on a straight-line basis over the expected period of benefit, not to exceed the fixed term of the contract. The Company performs periodic reviews to assess the recoverability of deferred contract transition and setup costs. This review is done by comparing the estimated minimum remaining undiscounted cash flows of a contract to the unamortized contract costs. If such minimum undiscounted cash flows are not sufficient to recover the unamortized costs, an impairment loss is recognized for the difference between the estimated fair value and the carrying value. If a cash flow deficiency remains after reducing the carrying amount of the deferred costs, the Company evaluates any remaining long-lived assets related to that contract for impairment. Selling, General and Administrative expenses Selling, general and administrative expenses are charged to income as incurred. Expenses of promoting and selling products and services are classified as selling expense and include such items as compensation, sales commissions and travel. General and administrative expenses include such items as compensation, cost of warehouse, delivery centers and other non-integration facilities, legal and professional costs, office supplies, non-income taxes, insurance and utility expenses. In addition, selling, general and administrative expenses include other operating items such as allowances for credit losses, depreciation and amortization of non-technology related intangible assets. OEM supplier programs Funds received from OEM suppliers for volume promotion programs, price protection and product rebates are recorded as adjustments to cost of revenue and/or the carrying value of inventories, as appropriate. Where there is a binding agreement, the Company tracks vendor promotional programs for volume discounts on a program-by-program basis and records them as a reduction to cost of revenue based on a systematic and rational allocation. The Company monitors the balances of vendor receivables on a quarterly basis and adjusts the balances due for differences between expected and actual sales volume. Vendor receivables are generally collected through reductions authorized by the vendor to accounts payable. Funds received for specific marketing and infrastructure reimbursements, net of related costs, are recorded as adjustments to “Selling, general and administrative expenses,” and any excess reimbursement amount is recorded as an adjustment to cost of revenue. Royalties The Company’s software product purchases include products licensed from OEM vendors, which are subsequently distributed to resellers. Royalties to OEM vendors are accrued and recorded in cost of revenue when software products are shipped and revenue is recognized. Warranties The Company’s OEM suppliers generally warrant the products distributed by the Company and allow returns of defective products. The Company generally does not independently warrant the products it distributes; however, the Company does warrant the following: (1) products that it builds to order from components purchased from other sources; and (2) its services with regard to products that it assembles for its customers. Warranty expense and the accrual for warranty costs were not material to the Company’s Consolidated Financial Statements for any of the periods presented. 58 Table of Content Advertising Costs related to advertising and product promotion expenditures are charged to “Selling, general and administrative expenses” as incurred and are primarily offset by OEM marketing reimbursements. Net costs related to advertising and promotion expenditures were not material to the Company’s Consolidated Financial Statements for any of the periods presented. Income taxes The asset and liability method is used in accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for the expected tax consequences of temporary differences between the tax bases of assets and liabilities and their reported amounts in the financial statements using enacted tax rates and laws that will be in effect when the difference is expected to reverse. Tax on global low-taxed intangible income is accounted for as a current expense in the period in which the income is includable in a tax return using the “period cost” method. Valuation allowances are provided against deferred tax assets that are not likely to be realized. The Company recognizes tax benefits from uncertain tax positions only if that tax position is more likely than not to be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon settlement. The Company recognizes interest and penalties related to unrecognized tax benefits in the provision for income taxes. Foreign currency translations The financial statements of the Company’s international subsidiaries whose functional currencies are the local currencies are translated into U.S. dollars for consolidation as follows: assets and liabilities at the exchange rate as of the balance sheet date, stockholders’ equity at the historical rates of exchange, and income and expense amounts at the average exchange rate for the month. Translation adjustments resulting from the translation of the subsidiaries’ accounts are included in “Accumulated other comprehensive income (loss)” in stockholders’ equity. Transactions denominated in currencies other than the applicable functional currency are converted to the functional currency at the exchange rate on the transaction date. At period end, monetary assets and liabilities are remeasured to the functional currency using exchange rates in effect at the balance sheet date. Non-monetary assets and liabilities are remeasured at historical exchange rates. Gains and losses resulting from foreign currency transactions are included in earnings within “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 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 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 The funded status of the Company’s pension and other postretirement benefit plans is recognized in the Consolidated Balance Sheets. The funded status is measured as the difference between the fair value of plan assets and the benefit obligation at November 30, the measurement date. For defined benefit pension plans, the benefit obligation is the projected benefit obligation ("PBO") and, for the other postretirement benefit plans, the benefit obligation is the accumulated postretirement benefit obligation ("APBO"). The PBO represents the actuarial present value of benefits expected to be paid upon retirement. For active plans, the present value reflects estimated future compensation levels. The APBO represents the actuarial present value of postretirement benefits attributed to employee services already rendered. The fair value of plan assets represents the current market value of assets held by an irrevocable trust fund for the sole benefit of participants. 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 59 Table of Content and mortality rates. The assumptions used are reviewed on an annual basis. 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 Earnings per share is calculated using the two-class method. The two-class method is an earnings allocation proportional to the respective ownership among holders of common stock and participating securities. Basic earnings per common share is computed by dividing net income attributable to the Company’s common stockholders by the weighted-average of common shares outstanding during the period. Diluted earnings per common share also considers the dilutive effect of in-the-money stock options and restricted stock units, calculated using the treasury stock method. Treasury Stock Repurchases of shares of common stock are accounted for at cost, which includes brokerage fees, and are included as a component of stockholders’ equity in the Consolidated Balance Sheets. Reclassifications 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 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 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. In August 2018, the FASB issued new guidance to add, remove, and clarify disclosure requirements related to defined benefit pension and other postretirement plans. The amendment requires the Company to disclose the weighted-average interest crediting rates used in cash balance pension plans. It also requires the Company to disclose the reasons for significant changes in the benefit obligation or plan assets including significant gains and losses affecting the benefit obligation for the period. This standard is effective for fiscal years ending after December 15, 2020 and early adoption is permitted. The adoption is not expected to have a material impact on the Company's Consolidated Financial Statements. 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. Certain amendments should be applied prospectively, while 60 Table of Content 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. 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: 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 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. Restricted stock granted to qualified non-employee directors vests one fourth on a quarterly basis over a one-year period. The holders of restricted stock awards are entitled to the same voting, dividend and other rights as the Company’s common stockholders. 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 On January 6, 2014, the Board of Directors approved the adoption of the 2014 Employee Stock Purchase Plan (“2014 ESPP”) to succeed the Company's 2003 Employee Stock Purchase Plan. The 2014 ESPP, as amended, commenced on January 1, 2015 with 750 authorized shares. Under the 2014 ESPP, there are four offering periods of three months each in a calendar year. Eligible employees in the United States can choose to have a fixed percentage deducted from their bi-weekly compensation to purchase the Company’s common stock at a discount of 5 %. The maximum number of shares a participant may purchase is 0.625 during a single accumulation period subject to a maximum purchase limit of $ 10 in a calendar year. Employees at associate vice president level and above are not eligible to participate in the plan. Share-based compensation expense related to the 2014 ESPP was immaterial during fiscal years 2020, 2019 and 2018. Share Repurchase Programs 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. As of November 30, 2020, the Company had no t repurchased any shares under this program. 61 Table of Content 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 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. Dividends 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 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 purchase rights, 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: Fiscal Years Ended November 30, 2020 2019 2018 Total share-based compensation $ 33,543 $ 28,162 $ 22,767 Tax benefit recorded in the provision for income taxes ( 8,211 ) ( 6,990 ) ( 6,156 ) Effect on net income $ 25,332 $ 21,172 $ 16,611 Substantially all of the share-based compensation expense was recorded in “Selling, general and administrative expenses” in the Consolidated Statements of Operations. Valuation Assumptions 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 the fair value of stock options. The Black-Scholes option-pricing model was developed for use in estimating the fair value of short-lived exchange traded options that have no vesting restrictions and are fully transferable. In addition, option-pricing models require the input of highly subjective assumptions, including the option’s expected life and the price volatility of the underlying stock. The expected stock price volatility assumption was determined using historical volatility of the Company’s common stock. The fair value of stock awards is determined based on the stock price at the date of grant. For grants that do not accrue dividends or dividend equivalents, the fair value is the stock price reduced by the present value of estimated dividends over the vesting period. For performance-based restricted stock units, the grant-date fair value assumes that the targeted performance goals will be achieved. Over the performance period, the number of awards will be adjusted higher or lower based on the probability of achievement of performance goals. The Company accounts for expense reductions that result from the forfeiture of unvested awards in the period that the forfeitures occur. The following assumptions were used in the Black-Scholes valuation model in fiscal years 2019 and 2018: Fiscal Years Ended November 30, 2019 2018 Stock option plan: Expected life (years) 6.0 - 6.1 6.0 Risk free interest rate 1.59% - 2.62% 3.09 % Expected volatility 32.33% - 33.69% 30.85 % Dividend yield 1.36% - 1.54% 1.84 % 62 Table of Content 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 Shares available for grant Number of shares Weighted- average exercise price per share Balances, November 30, 2019 262 866 $ 83.10 Restricted stock awards granted ( 60 ) — — Restricted stock units granted ( 3 ) — — Restricted stock cancelled/forfeited ( 1) 54 — — Options exercised — ( 182 ) $ 49.55 Balances, November 30, 2020 252 684 $ 92.04 (1) 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 The weighted-average grant-date fair values of the stock options granted during fiscal years 2019 and 2018 were $ 32.76 , and $ 22.96 , respectively. As of November 30, 2020, 684 options were outstanding with a weighted-average life of 6.50 years, a weighted-average exercise price of $ 92.04 per option and an aggregate pre-tax intrinsic value of $ 46,669 . As of November 30, 2020, 418 options were vested and exercisable with a weighted-average life of 3.42 years, a weighted-average exercise price of $ 53.41 per share and an aggregate pre-tax intrinsic value of $ 30,514 . The cash received from the exercise of options and the intrinsic values of options exercised during fiscal years 2020, 2019 and 2018 were as follows: Fiscal Years Ended November 30, 2020 2019 2018 Intrinsic value of options exercised $ 15,746 $ 3,782 $ 2,465 Cash received from exercise of options $ 9,018 $ 1,908 $ 1,561 The Company settles employee stock option exercises with newly issued common shares. 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 A summary of the changes in the Company’s non-vested restricted stock awards and stock units during fiscal year 2020 is presented below: Number of shares Weighted-average, grant-date fair value per share Non-vested as of November 30, 2019 1,051 $ 103.51 Awards granted 60 97.40 Units granted 3 110.58 Awards and units vested ( 291 ) 104.63 Awards and units cancelled/forfeited ( 1) ( 54 ) 77.59 Non-vested as of November 30, 2020 768 $ 102.60 (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, 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. In 63 Table of Content 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: Cash, cash equivalents and restricted cash: The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Consolidated Balance Sheets that sum to the total of the same amounts shown in the Consolidated Statements of Cash Flows: As of November 30, 2020 2019 Cash and cash equivalents $ 1,564,672 $ 225,529 Restricted cash included in other current assets 4,198 5,620 Cash, cash equivalents and restricted cash $ 1,568,870 $ 231,149 Accounts receivable, net: As of November 30, 2020 2019 Accounts receivable $ 3,947,113 $ 3,956,629 Less: Allowance for doubtful accounts ( 76,324 ) ( 29,920 ) Accounts receivable, net $ 3,870,789 $ 3,926,709 Receivables from vendors, net: As of November 30, 2020 2019 Receivables from vendors $ 291,453 $ 373,986 Less: Allowance for doubtful accounts ( 5,126 ) ( 5,481 ) Receivables from vendors, net $ 286,327 $ 368,505 Allowance for doubtful trade receivables: Balance at November 30, 2017 $ 16,570 Additions 3,055 Write-offs and reclassifications ( 11,148 ) Balance at November 30, 2018 8,477 Additions 31,236 Write-offs and reclassifications ( 9,793 ) Balance at November 30, 2019 29,920 Additions 49,785 Write-offs and reclassifications ( 3,380 ) Balance at November 30, 2020 $ 76,324 Allowance for receivables from vendors: Balance at November 30, 2017 $ 2,623 Additions 4,191 Write-offs and reclassifications ( 626 ) Balance at November 30, 2018 6,188 Additions 3,675 Write-offs and reclassifications ( 4,382 ) Balance at November 30, 2019 5,481 Additions — Write-offs and reclassifications ( 354 ) Balance at November 30, 2020 $ 5,126 64 Table of Content Property and equipment, net: As of November 30, 2020 2019 Land $ 47,400 $ 47,494 Equipment, computers and software 620,445 503,240 Furniture and fixtures 121,299 111,408 Buildings, building improvements and leasehold improvements 483,613 428,180 Construction-in-progress 11,847 12,379 Total property and equipment, gross $ 1,284,605 1,102,702 Less: Accumulated depreciation ( 675,311 ) ( 532,803 ) Property and equipment, net $ 609,294 $ 569,899 Depreciation expense for fiscal years 2020, 2019 and 2018, was $ 154,206 , $ 161,627 and $ 100,955 , respectively. Goodwill: Fiscal Year Ended November 30, 2020 Fiscal Year Ended November 30, 2019 Technology Solutions Concentrix Total Technology Solutions Concentrix Total Balance, beginning of year $ 425,076 $ 1,829,326 $ 2,254,402 $ 427,775 $ 1,775,541 $ 2,203,316 Additions from acquisitions — — — — 34,797 34,797 Foreign exchange translation ( 1,190 ) 6,723 5,533 ( 2,699 ) 18,989 16,290 Balance, end of year $ 423,886 $ 1,836,049 $ 2,259,935 $ 425,076 $ 1,829,326 $ 2,254,402 Intangible assets, net: As of November 30, 2020 As of November 30, 2019 Gross Amounts Accumulated Amortization Net Amounts Gross Amounts Accumulated Amortization Net Amounts Customer relationships and lists $ 1,565,825 $ ( 696,127 ) $ 869,698 $ 1,546,349 $ ( 522,083 ) $ 1,024,266 Vendor lists 177,555 ( 82,187 ) 95,368 178,444 ( 66,954 ) 111,490 Technology 14,829 ( 11,034 ) 3,795 14,720 ( 8,998 ) 5,721 Other intangible assets 34,522 ( 18,377 ) 16,145 35,267 ( 14,532 ) 20,735 $ 1,792,731 $ ( 807,725 ) $ 985,006 $ 1,774,780 $ ( 612,567 ) $ 1,162,212 Amortization expense for fiscal years 2020, 2019 and 2018, was $ 187,431 , $ 210,481 and $ 124,332 , respectively. Estimated future amortization expense of the Company’s intangible assets is as follows: Fiscal years ending November 30, 2021 $ 174,291 2022 150,875 2023 132,746 2024 110,166 2025 96,688 Thereafter 320,240 Total $ 985,006 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. 65 Table of Content Accumulated other comprehensive income (loss) The components of accumulated other comprehensive income (loss) ("AOCI"), net of taxes, were as follows: Unrecognized gains (losses) on defined benefit plan, net of taxes Unrealized gains (losses) on cash flow hedges, net of taxes Foreign currency translation adjustment and other, net of taxes Total Balance, beginning of year $ ( 28,784 ) $ ( 46,932 ) $ ( 133,361 ) $ ( 209,077 ) Other comprehensive income (loss) before reclassification ( 8,500 ) ( 16,405 ) 36,521 11,616 Reclassification of (gains) losses from Other comprehensive income (loss) ( 300 ) 3,190 — 2,890 Balance, end of year $ ( 37,584 ) $ ( 60,147 ) $ ( 96,840 ) $ ( 194,571 ) Refer to Note 6 for the location of gains and losses reclassified from other comprehensive income (loss) to the Consolidated Statements of Operations. 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. NOTE 6—DERIVATIVE INSTRUMENTS: In the ordinary course of business, the Company is exposed to foreign currency risk, interest rate risk, equity risk, commodity price changes and credit risk. The Company enters into transactions, and owns monetary assets and liabilities, that are denominated in currencies other than the legal entity’s functional currency. The Company may enter into forward contracts, option contracts, swaps, or other derivative instruments to offset a portion of the risk on expected future cash flows, earnings, net investments in certain international subsidiaries and certain existing assets and liabilities. However, the Company may choose not to hedge certain exposures for a variety of reasons including, but not limited to, accounting considerations and the prohibitive economic cost of hedging particular exposures. There can be no assurance the hedges will offset more than a portion of the financial impact resulting from movements in foreign currency exchange or interest rates. Generally, the Company does not use derivative instruments to cover equity risk and credit risk. The Company’s hedging program is not used for trading or speculative purposes. All derivatives are recognized on the balance sheet at their fair value. Changes in the fair value of derivatives are recorded in the Consolidated Statements of Operations, or as a component of AOCI in the Consolidated Balance Sheets, as discussed below. Cash Flow Hedges To protect gross margins from fluctuations in foreign currency exchange rates, certain of the Company’s subsidiaries with functional currencies that are not in U.S. dollars may hedge a portion of forecasted revenue or costs not denominated in the subsidiaries’ functional currencies. These instruments mature at various dates through November 2022 . 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 . Gains and losses on cash flow hedges are recorded in AOCI until the hedged item is recognized in earnings. Deferred gains and losses associated with cash flow hedges of foreign currency revenue are recognized as a component of Revenue from Services in the same period as the related revenue is recognized, and deferred gains and losses related to cash flow hedges of costs are recognized as a component of Cost of revenue for services and/or Selling, general and administrative expenses in the same period as the related costs are recognized. Deferred gains and losses associated with cash flow hedges of interest payments are recognized in Interest expense and Finance charges, net in the same period as the related expense is recognized. Derivative instruments designated as cash flow hedges must be de-designated as hedges when it is probable the forecasted hedged transaction will not occur in the initially identified time period or within a subsequent two-month time period. Deferred gains and losses in AOCI associated with such derivative instruments are reclassified into earnings in the period of de-designation. Any subsequent changes in fair value of such derivative instruments are recorded in earnings unless they are re-designated as hedges of other transactions. Non-Designated Derivatives The Company uses short-term forward contracts to offset the foreign exchange risk of assets and liabilities denominated in currencies other than the functional currency of the respective entities. These contracts, which are not designated as hedging instruments, mature or settle within twelve months . Derivatives that are not designated as hedging instruments are adjusted to fair value through earnings in the financial statement line item to which the derivative relates. 66 Table of Content Fair Values of Derivative Instruments in the Consolidated Balance Sheets The fair values of the Company’s derivative instruments are disclosed in Note 7 -- Fair Value Measurements and summarized in the table below: Value as of Balance Sheet Line Item November 30, 2020 November 30, 2019 Derivative instruments not designated as hedging instruments: Foreign exchange forward contracts (notional value) $ 1,421,764 $ 1,192,964 Other current assets 15,875 11,757 Other accrued liabilities 9,447 2,637 Interest rate swap (notional value) $ 100,000 $ 100,000 Other assets, net — 515 Other accrued liabilities 128 — Derivative instruments designated as cash flow hedges: Foreign exchange forward contracts (notional value) $ 825,700 $ 563,654 Other current assets and other assets, net 38,212 14,523 Other accrued liabilities and other long-term liabilities 309 1,633 Interest rate swaps (notional value) $ 1,500,000 $ 1,900,000 Other accrued liabilities $ 115,598 $ 83,428 Volume of activity 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. The notional amounts for outstanding derivative instruments provide one measure of the transaction volume outstanding and do not represent the amount of the Company’s exposure to credit or market loss. The Company’s exposure to credit loss and market risk will vary over time as currency and interest rates change. 67 Table of Content 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 Gains (losses) For the fiscal years ended November 30, in Income 2020 2019 2018 Revenue for services $ 4,698,678 $ 4,687,327 $ 2,444,867 Cost of revenue for services ( 3,044,916 ) ( 2,946,664 ) ( 1,514,470 ) Selling, general and administrative expenses ( 2,017,502 ) ( 2,084,156 ) ( 1,376,664 ) Interest expense and finance charges, net ( 127,336 ) ( 166,421 ) ( 84,675 ) Other income (expense), net 1,276 30,363 ( 8,984 ) Derivative instruments designated as cash flow hedges: Gains (losses) recognized in OCI: Foreign exchange forward contracts $ 45,986 $ 20,772 $ 27,426 Interest rate swaps ( 66,372 ) ( 88,569 ) ( 1,256 ) Total $ ( 20,386 ) $ ( 67,797 ) $ 26,170 Gains (losses) reclassified from AOCI into income: Foreign exchange forward contracts Gains (losses) reclassified from AOCI into income Revenue for services $ — $ 127 $ — Gains (losses) reclassified from AOCI into income Cost of revenue for services 21,532 16,454 1,021 Gains (losses) reclassified from AOCI into income Selling, general and administrative expenses 8,841 6,767 441 Gains (losses) reclassified from AOCI into income Other income (expense), net — 36 — Interest rate swaps Gains (losses) reclassified from AOCI into income Interest expense and finance charges, net ( 34,443 ) ( 8,455 ) 2,792 Total $ ( 4,070 ) $ 14,929 $ 4,254 Derivative instruments not designated as hedging instruments: Gains (losses) recognized from Foreign exchange forward contracts, net ( 1) Cost of revenue for services and Selling, general and administrative expenses $ — $ — $ 3,378 Gains (losses) recognized from foreign exchange forward contracts, net ( 1) Other income (expense), net 33,994 20,246 ( 6,126 ) Gains (losses) recognized from interest rate swaps, net Interest expense and finance charges, net ( 643 ) ( 3,004 ) ( 318 ) Total $ 33,351 $ 17,242 $ ( 3,066 ) ( 1 ) The gains and losses largely offset the currency gains and losses that resulted from changes in the assets and liabilities denominated in nonfunctional currencies. There were no material gain or loss amounts excluded from the assessment of effectiveness. 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. 68 Table of Content 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 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. The Company manages the potential risk of credit losses through careful evaluation of counterparty credit standing and selection of counterparties from a limited group of financial institutions. NOTE 7—FAIR VALUE MEASUREMENTS: The Company’s fair value measurements are classified and disclosed in one of the following three categories: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; and Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity). The following table summarizes the valuation of the Company’s investments and financial instruments that are measured at fair value on a recurring basis: As of November 30, 2020 As of November 30, 2019 Fair value measurement category Fair value measurement category Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Assets: Cash equivalents $ 68,157 $ 68,157 $ — $ — $ 37,760 $ 37,760 $ — $ — Marketable equity securities 3,050 3,050 — — 2,834 2,834 — — Foreign government bond 1,355 1,355 — — 1,228 1,228 — — Forward foreign currency exchange contracts 54,087 — 54,087 — 26,280 — 26,280 — Interest rate swaps — — — — 515 — 515 — Liabilities: Forward foreign currency exchange contracts $ 9,756 $ — $ 9,756 $ — $ 4,270 $ — $ 4,270 $ — Interest rate swaps 115,726 — 115,726 — 83,428 — 83,428 — 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. The carrying values of cash equivalents approximate fair value since they are near their maturity. Investments in marketable equity securities, primarily comprising investments in other companies’ equity securities as per local customary business practice, are recorded at fair value based on quoted market prices. Investment in foreign government bond classified as available-for-sale debt security is recorded at fair value based on quoted market prices. The fair values of forward exchange contracts are measured based on the foreign currency spot and forward rates quoted by the banks or foreign currency dealers. Fair values of 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 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. 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. 69 Table of Content During fiscal years 2020, 2019 and 2018, there were no transfers between the fair value measurement category levels. NOTE 8—ACCOUNTS RECEIVABLE ARRANGEMENTS: The Company has an uncommitted supply-chain financing program with a global financial institution under which trade accounts receivable of certain customers and their affiliates may be acquired, without recourse, by the financial institution. Available capacity under this program is dependent on the level of the Company’s trade accounts receivable with these customers and the financial institution’s willingness to purchase such receivables. 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 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. SYNNEX Japan, the Company's Japanese Technology Solutions subsidiary, has arrangements with financial institutions for the sale and financing of approved accounts receivable and notes receivable. The amounts outstanding under these arrangements that were sold, but not collected, as of November 30, 2020 and 2019 were $ 5,798 and $ 2,856 , respectively. The Company also has other financing agreements in North America with financial institutions (“Flooring Companies”) to allow certain customers of the Company to finance their purchases directly with the Flooring Companies. Under these agreements, the Flooring Companies pay to the Company the selling price of products sold to various customers, less a discount, within approximately 15 to 30 days from the date of sale. The Company is contingently liable to repurchase inventory sold under flooring agreements in the event of any default by its customers under the agreement and such inventory being repossessed by the Flooring Companies. See Note 16 — Commitments and Contingencies for further information. The following table summarizes the net sales financed through flooring agreements and the flooring fees incurred: Fiscal Years Ended November 30, 2020 2019 2018 Net sales financed $ 2,092,218 $ 1,961,379 $ 1,734,860 Flooring fees ( 1) 13,277 13,130 10,698 (1) Flooring fees are included within “Interest expense and finance charges, net.” As of November 30, 2020 and 2019, accounts receivable subject to flooring agreements were $ 49,461 and $ 69,637 , respectively. 70 Table of Content NOTE 9—BORROWINGS: Borrowings consist of the following: As of November 30, 2020 2019 SYNNEX United States accounts receivable securitization arrangement $ — $ 108,000 SYNNEX Japan credit facility - revolving line of credit component 31,627 5,936 SYNNEX United States credit agreement - revolving line of credit component — 25,800 SYNNEX United States credit agreement - current portion of term loan component — 60,000 SYNNEX United States term loan credit agreement - current portion — 90,000 SYNNEX Japan credit facility - current portion of term loan component 67,088 — Concentrix credit agreement - current portion of term loan component 33,750 — Other borrowings 26,249 9,233 Borrowings, current $ 158,715 $ 298,969 SYNNEX Japan credit facility - term loan component $ — $ 63,921 SYNNEX United States credit agreement - term loan component 500,000 1,020,000 SYNNEX United States term loan credit agreement 1,000,000 1,642,500 Concentrix credit agreement - term loan component 866,250 — Concentrix accounts receivable securitization arrangement 250,000 — Other term debt 85 298 Long-term borrowings, before unamortized debt discount and issuance costs $ 2,616,335 $ 2,726,719 Less: unamortized debt discount and issuance costs ( 8,273 ) ( 8,452 ) Long-term borrowings $ 2,608,061 $ 2,718,267 SYNNEX United States accounts receivable securitization arrangement In the United States, the Company has an accounts receivable securitization program to provide additional capital for its operations (the “U.S. AR Arrangement”). 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 . Under the terms of the 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. The borrowings are funded by pledging all of the rights, title and interest in the receivables acquired by the Company's bankruptcy-remote subsidiary as security. Any amounts received under the U.S. AR Arrangement are recorded as debt on the Company's Consolidated Balance Sheets. SYNNEX Canada accounts receivable securitization arrangement 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, prior to an event of termination, SYNNEX Canada is obligated to pay a program fee of 0.75 % per annum based on 71 Table of Content 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 SYNNEX Japan has a credit agreement with a group of banks for a maximum commitment of JPY 15,000,000 or $ 143,761 . 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 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. The term loan can be repaid at any time prior to the expiration date without penalty. The Company has guaranteed the obligations of SYNNEX Japan under this facility. Concentrix India revolving lines of credit facilities 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. The Company guarantees the obligations under these credit facilities. These credit facilities can be terminated at any time by the Company’s Indian subsidiaries or the financial institution. 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 In the United States, the Company has a senior secured credit agreement (as amended, the "U.S. Credit Agreement") with a group of financial institutions. The U.S. Credit Agreement includes a $ 600,000 commitment for a revolving credit facility and a term loan in the original principal amount of $ 1,200,000 . The Company may request incremental commitments to increase the principal amount of the revolving line of credit or term loan by $ 500,000 , plus an additional amount which is dependent upon the Company's pro forma first lien leverage ratio, as calculated under the U.S. Credit Agreement. The U.S. Credit Agreement matures in September 2022 . 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. 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 2.00 % and the margin for base rate loans ranges from 0.25 % to 1.00 %, provided that LIBOR shall not be less than zero . 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, plus 1.0 %. 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 the Company’s consolidated leverage ratio, as calculated under the U.S. Credit Agreement. The Company’s obligations under the U.S. Credit Agreement are secured by substantially all of the parent company’s and its United States domestic subsidiaries’ assets on a pari passu basis with the interests of the lenders under the U.S. Term Loan Credit Agreement (defined below) pursuant to an intercreditor agreement and are guaranteed by certain of the Company's United States domestic subsidiaries. SYNNEX United States term loan credit agreement 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 . The U.S. Term Loan Credit Agreement matures in October 2023 . 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. Term Loan 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 1.75 % and the margin for base rate loans ranges from 0.25 % to 0.75 %, provided that LIBOR shall not be less than zero . The base rate is a variable rate which is the highest of (a) 0.5 % plus the greater of (x) the Federal Funds Rate in effect on such day and (y) the overnight bank funding rate in effect on such day, (b) the Eurodollar Rate plus 1.0 % per annum, and (c) the rate of interest last quoted by The Wall Street Journal as the “Prime Rate” in the U.S. 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 72 Table of Content the Company's consolidated leverage ratio as calculated under the U.S. Term Loan Credit Agreement. The Company's obligations under the U.S. Term Loan Credit Agreement are secured by substantially all of the Company’s and certain of its domestic subsidiaries’ assets on a pari passu basis with the interests of the lenders under the existing U.S. Credit Agreement pursuant to an intercreditor agreement, and are guaranteed by certain of its domestic subsidiaries. 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 SYNNEX Canada has an uncommitted revolving line of credit with a bank under which it can borrow up to CAD 50,000 , or $ 38,432 . Borrowings under the facility are secured by eligible inventory and bear interest at a base rate plus a margin ranging from 0.50 % to 2.25 % depending on the base rate used. The base rate could be a Banker's Acceptance Rate, a Canadian Prime Rate, LIBOR or U.S. Base Rate. As of both November 30, 2020 and 2019, there were no borrowings outstanding under this credit facility. Other borrowings and term debt Other borrowings and term debt include lines of credit with financial institutions at certain locations outside the United States, factoring of accounts receivable with recourse provisions, capital leases, a building mortgage and book overdrafts. As of November 30, 2020, commitments for these revolving credit facilities aggregated $ 47,920 . Interest rates and other terms of borrowing under these lines of credit vary by country, depending on local market conditions. 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. 73 Table of Content Future principal payments As of November 30, 2020, future principal payments under the above loans are as follows: Fiscal Years Ending November 30, 2021 $ 158,714 2022 795,085 2023 1,045,000 2024 45,000 2025 731,250 $ 2,775,049 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 The total interest expense and finance charges for the Company’s borrowings were $ 132,954 , $ 172,777 and $ 92,899 for fiscal years 2020, 2019 and 2018, respectively. The variable interest rates ranged between 0.74 % and 8.41 %, between 0.70 % and 11.38 % and between 0.58 % and 12.74 % in fiscal years 2020, 2019 and 2018, respectively. Covenant compliance The Company's credit facilities have a number of covenants and restrictions that, among other things, require the Company to maintain specified financial ratios and satisfy certain financial condition tests. The covenants also limit the Company’s ability to incur additional debt, make or forgive intercompany loans, pay dividends and make other types of distributions, make certain acquisitions, repurchase the Company’s stock, create liens, cancel debt owed to the Company, enter into agreements with affiliates, modify the nature of the Company’s business, enter into sale-leaseback transactions, make certain investments, transfer and sell assets, cancel or terminate any material contracts and merge or consolidate. As of November 30, 2020, the Company was in compliance with all material covenants for the above arrangements. NOTE 10—EARNINGS PER COMMON SHARE: The following table sets forth the computation of basic and diluted earnings per common share for the periods indicated: Fiscal Years Ended November 30, 2020 2019 2018 Basic earnings per common share: Net income $ 529,160 $ 500,712 $ 299,981 Less: net income allocated to participating securities ( 1) ( 5,884 ) ( 4,593 ) ( 2,728 ) Net income attributable to common stockholders $ 523,276 $ 496,119 $ 297,253 Weighted-average number of common shares - basic 50,900 50,669 41,215 Basic earnings per common share $ 10.28 $ 9.79 $ 7.21 Diluted earnings per common share: Net income $ 529,160 $ 500,712 $ 299,981 Less: net income allocated to participating securities ( 1) ( 5,847 ) ( 4,573 ) ( 2,716 ) Net income attributable to common stockholders $ 523,313 $ 496,139 $ 297,265 Weighted-average number of common shares - basic 50,900 50,669 41,215 Effect of dilutive securities: Stock options and restricted stock units 337 267 236 Weighted-average number of common shares - diluted 51,237 50,936 41,451 Diluted earnings per common share $ 10.21 $ 9.74 $ 7.17 Anti-dilutive shares excluded from diluted earnings per share calculation 63 108 97 (1) Restricted stock awards granted by the Company are considered participating securities. 74 Table of Content NOTE 11—SEGMENT INFORMATION: Summarized financial information related to the Company’s reportable business segments for the periods presented is shown below: Technology Solutions Concentrix Inter-Segment Elimination Consolidated Fiscal Year ended November 30, 2020 Revenue $ 19,977,150 $ 4,719,534 $ ( 21,121 ) $ 24,675,563 External revenue 19,976,885 4,698,678 24,675,563 Operating income 521,341 308,761 — 830,103 Depreciation and amortization expense 65,071 276,566 — 341,637 Total assets 9,993,448 5,177,556 ( 1,702,414 ) 13,468,590 Fiscal Year ended November 30, 2019 . Revenue $ 19,069,970 $ 4,707,912 $ ( 20,589 ) $ 23,757,293 External revenue 19,069,966 4,687,327 23,757,293 Operating income 519,429 294,332 — 813,761 Depreciation and amortization expense 66,329 305,779 — 372,108 Total assets 10,312,512 4,645,475 ( 3,260,027 ) 11,697,960 Fiscal Year ended November 30, 2018 Revenue $ 17,323,163 $ 2,463,151 $ ( 18,369 ) $ 19,767,945 External revenue 17,323,078 2,444,867 19,767,945 Operating income 405,475 144,761 — 550,236 Depreciation and amortization expense 70,688 154,599 — 225,287 Total assets 10,207,964 4,776,313 ( 3,440,779 ) 11,543,498 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 The Company attributes revenues from external customers to the country from where Technology Solutions products are delivered and the country of domicile of the Concentrix legal entity that is party to the client contract. Shown below are the countries that accounted for 10% or more of the Company’s revenue and property and equipment, net, for the periods presented: Fiscal Years Ended November 30, 2020 2019 2018 Revenue: United States $ 16,283,951 $ 15,760,749 $ 14,169,619 Others 8,391,612 7,996,544 5,598,326 Total $ 24,675,563 $ 23,757,293 $ 19,767,945 As of November 30, 2020 2019 Property and equipment, net: United States $ 276,063 $ 287,679 Philippines 87,686 63,421 Others 245,545 218,799 Total $ 609,294 $ 569,899 NOTE 12—RELATED PARTY TRANSACTIONS: The Company has a business relationship with MiTAC Holdings Corporation (“MiTAC Holdings”), a publicly-traded company in Taiwan, which began in 1992 when MiTAC Holdings became the Company’s primary investor through its affiliates. As of both November 30, 2020 and 2019, MiTAC Holdings and its affiliates beneficially owned approximately 18 % of the Company's outstanding common stock. Mr. 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. 75 Table of Content Beneficial ownership of the Company’s common stock by MiTAC Holdings As noted above, MiTAC Holdings and its affiliates in the aggregate beneficially owned approximately 18% of the Company’s outstanding common stock as of November 30, 2020. These shares are owned by the following entities: As of November 30, 2020 MiTAC Holdings ( 1) 5,300 Synnex Technology International Corp. ( 2) 3,860 Total 9,160 1. Shares are held via Silver Star Developments Ltd., a wholly-owned subsidiary of MiTAC Holdings. Excludes 190 shares held directly by Mr. Miau and 217 shares indirectly held by Mr. Miau through a charitable remainder trust, and 190 shares held by his spouse . 2. Synnex Technology International Corp. (“Synnex Technology International”) is a separate entity from the Company and is a publicly-traded corporation in Taiwan. Shares are held via Peer Development Ltd., a wholly-owned subsidiary of Synnex Technology International. MiTAC Holdings owns a noncontrolling interest of 8.7 % in MiTAC Incorporated, a privately-held Taiwanese company, which in turn holds a noncontrolling interest of 15.2 % in Synnex Technology International. Neither MiTAC Holdings nor Mr. Miau is affiliated with any person(s), entity, or entities that hold a majority interest in MiTAC Incorporated. 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. The following table presents the Company's transactions with MiTAC Holdings and its affiliates for the periods indicated: Fiscal Years Ended November 30, 2020 2019 2018 Purchases of inventories and services $ 211,858 $ 173,390 $ 217,430 Sale of products to MiTAC Holdings and affiliates 1,071 761 2,422 Reimbursements received (payments made) for rent and overhead costs for use of facilities by MiTAC Holdings and affiliates, net ( 129 ) ( 41 ) 71 The following table presents the Company’s receivable from and payable to MiTAC Holdings and its affiliates for the periods presented: As of November 30, 2020 2019 Receivable from related parties (included in Accounts receivable, net) $ 26,154 $ 4,405 Payable to related parties (included in Accounts payable) 49,603 23,179 The Company’s business relationship with MiTAC Holdings and its affiliates has been informal and is generally not governed by long-term commitments or arrangements with respect to pricing terms, revenue or capacity commitments. The Company negotiates pricing and other material terms on a case-by-case basis with MiTAC Holdings and affiliates. The Company has adopted a policy requiring that material transactions with MiTAC Holdings or its related parties be approved by its Audit Committee, which is composed solely of independent directors. In addition, Mr. Miau’s compensation is approved by the Nominating and Corporate Governance Committee, which is also composed solely of independent directors. Synnex Technology International is a publicly-traded corporation in Taiwan that currently provides distribution and fulfillment services to various markets in Asia and Australia, and is also a potential competitor of the Company. Neither MiTAC Holdings nor Synnex Technology International is restricted from competing with the Company. NOTE 13—PENSION AND EMPLOYEE BENEFITS PLANS: The Company has 401(k) plans in the United States under which eligible employees may contribute up to the maximum amount as provided by law. Employees become eligible to participate in these plans on the first day of the month after their employment date. The Company may make discretionary contributions under the plans. 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. The Company has a deferred compensation plan for certain directors and officers. Distributions under the plan are subject to Section 409A of the United States Tax Code. The Company may invest balances in the plan in trading securities reported on recognized exchanges. As of November 30, 2020 and 2019, the deferred compensation liability balance was $ 4,628 and $ 5,389 , respectively. 76 Table of Content Defined Benefit Plans 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 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. The pension benefit formula for the cash balance plan is determined by a combination of compensation, age-based credits and annual guaranteed interest credits. The qualified portion of the cash balance plan has been funded through contributions made to a trust fund. The plan assumptions are evaluated annually and are updated as deemed necessary. Net benefit costs were $ 13,823 , $ 10,308 and $ 3,960 , during fiscal years 2020, 2019 and 2018, respectively. The Company's measurement date for all defined benefit plans and other postretirement benefits is November 30 and the plan assumptions are evaluated annually and are updated as deemed necessary. The status of employee defined benefit plans is summarized below: Year Ended November 30, 2020 2019 Change in Benefit Obligation: Benefit obligation at beginning of year $ 268,537 $ 247,697 Service cost 7,886 6,439 Interest cost 8,404 10,291 Actuarial (gain) loss 24,112 32,584 Benefits paid ( 13,656 ) ( 16,274 ) Settlements ( 7,579 ) ( 13,140 ) Foreign currency adjustments 1,795 940 Projected obligation at end of year $ 289,499 $ 268,537 Change in Plan Assets: Fair value of plan assets at beginning of year $ 151,862 $ 164,693 Actual return on assets 13,780 5,438 Settlement ( 7,579 ) ( 13,140 ) Employer contributions 3,156 1,872 Employee contributions 813 723 Benefit paid ( 7,918 ) ( 7,728 ) Foreign currency adjustments 79 4 Fair value of plan assets at end of year $ 154,192 $ 151,862 Funded Status of Plans: Unfunded status $ 135,307 $ 116,675 Amounts recognized in the Consolidated Balance Sheet as of November 30, 2020 and 2019 consist of: As of November 30, 2020 2019 Current liability $ 10,206 $ 9,189 Non-current liability $ 125,101 $ 107,486 The following weighted-average rates were used in determining the benefit obligations at November 30, 2020 and 2019. 2020 2019 Discount rate 0.2% - 4.7% 0.2% - 7.4% Expected long-term rate of return on plan assets 1.5% - 7.5% 1.5% - 7.5% Expected rate of future compensation growth 1.75% - 8.5% 1.8% - 10.0% 77 Table of Content The following weighted-average rates were used in determining the pension costs during fiscal years ended November 30, 2020, 2019 and 2018: 2020 2019 2018 Discount rate 0.2% - 6.0% 0.3% - 7.6% 0.3% - 8.1% Expected long-term rate of return on plan assets 1.5% - 7.5% 1.5% - 7.5% 1.5% - 7.5% Expected rate of future compensation growth 1.75% - 8.5% 1.8% - 10.0% 1.8% - 10.0% 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 the 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. The plans outside the U.S. represented approximately 26 % and 24 %, respectively, of the Company's total projected benefit obligation for all plans as of November 30, 2020 and 2019 . Plan Assets 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. The Company's targeted allocation was 60 % equity and 40 % fixed income. The investment objectives for the plan assets are to generate returns that will enable the plan to meet its future obligations. The Company’s expected long-term rate of return was determined based on the asset mix of the plan, projected returns, past performance and other factors. The Company has satisfied its ERISA funding requirements through 2020. The following table sets forth the fair value of those plan assets as of November 30, 2020 and 2019: As of November 30, 2020 2019 Asset Category: Cash and cash equivalents $ 3,787 $ 3,474 Fixed income 58,943 61,005 Equity securities: U.S. large cap 43,020 48,293 U.S. small cap 9,662 9,025 International equity 38,097 29,271 Investment funds 416 374 Limited partnership 267 420 Total investments $ 154,192 $ 151,862 The cash balance plan holds level 2 investments in common/collective trust funds that are public investment vehicles valued using a net asset value provided by the manager of each fund based on the underlying net assets owned by the fund, divided by the number of shares outstanding. The Company’s cash balance plan holds Level 3 investments within equity funds that primarily invest in domestic early stage capital funds. Benefit Payments The following table details expected benefit payments for the assumed cash balance plan: Fiscal Years Ending November 30, 2021 $ 28,415 2022 26,364 2023 25,311 2024 24,501 2025 23,958 Thereafter (2026-2030) 101,065 $ 229,614 No plan assets are expected to be returned to the Company during fiscal year 2021. The Company expects to make approximately $ 8,319 in contributions during fiscal year 2021. The Company also expects approximately $ 4,652 of actuarial loss included in AOCI will be recognized during fiscal year 2021. 78 Table of Content 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 November 30, 2020 Operating lease cost $ 248,740 Short-term lease cost 11,229 Variable lease cost 43,954 Sublease income ( 1,675 ) Total operating lease cost $ 302,248 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, 2021 $ 216,224 2022 174,190 2023 125,389 2024 88,121 2025 50,851 Thereafter 39,928 Total payments $ 694,703 Less: imputed interest* 84,749 Total present value of lease payments $ 609,954 * 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 November 30, 2020 Operating lease ROU assets Other assets, net $ 576,943 Current operating lease liabilities Other accrued liabilities 183,180 Non-current operating lease liabilities Other long-term liabilities 426,774 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 $ 228,616 Non-cash ROU assets obtained in exchange for lease liabilities (subsequent to initial adoption) 149,546 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) 4.04 Weighted-average discount rate 6.74 % 79 Table of Content 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, 2020 $ 213,649 2021 174,611 2022 132,778 2023 96,084 2024 66,753 Thereafter 71,351 Total minimum lease payments $ 755,226 NOTE 15—INCOME TAXES: The sources of income before the provision for income taxes are as follows: Fiscal Years Ended November 30, 2020 2019 2018 United States $ 211,746 $ 204,651 $ 195,058 Foreign 492,296 473,052 261,519 $ 704,042 $ 677,703 $ 456,577 Provision for income taxes consists of the following: Fiscal Years Ended November 30, 2020 2019 2018 Current tax provision: Federal $ 61,488 $ 71,376 $ 113,243 State 19,547 14,421 20,263 Foreign 142,839 109,383 70,162 $ 223,874 $ 195,180 $ 203,668 Deferred tax provision (benefit): Federal $ ( 23,020 ) $ ( 20,166 ) $ ( 30,334 ) State ( 4,326 ) ( 1,389 ) ( 4,836 ) Foreign ( 21,646 ) 3,366 ( 11,902 ) $ ( 48,992 ) $ ( 18,189 ) $ ( 47,072 ) Total tax provision $ 174,882 $ 176,991 $ 156,596 On December 22, 2017, the TCJA was enacted into law. The TCJA provided for significant changes to the U.S. Internal Revenue Code of 1986, as amended, that impacted corporate taxation requirements. The TCJA significantly revised the ongoing U.S. corporate income tax law by lowering the U.S. federal corporate income tax rate from 35 % to 21%, implementing a territorial tax system, imposing a one-time tax on foreign unremitted earnings and setting limitations on deductibility of certain costs (e.g., interest expense), among other things. During fiscal year 2018, the Company accounted for the impact of the TCJA resulting in additional income tax expense of $ 33,109 . The significant components of this expense were (i) the one-time deemed repatriation tax on unremitted non-U.S. earnings and profits that were previously tax deferred and other tax impacts of the TCJA, which resulted in an increase in income tax expense, net of deductions and credits, of $ 59,823 and (ii) the remeasurement of net deferred tax liabilities at the lower enacted U.S. federal corporate tax rate, which resulted in a decrease of $ 26,714 in income tax expense. The following presents the breakdown of net deferred tax liabilities: As of November 30, 2020 2019 Deferred tax assets $ 87,059 $ 97,539 Deferred tax liabilities ( 159,396 ) ( 222,210 ) Total net deferred tax liabilities $ ( 72,337 ) $ ( 124,671 ) 80 Table of Content Net deferred tax liabilities consist of the following: As of November 30, 2020 2019 Assets: Operating lease liability $ 117,318 $ — Net operating losses 75,965 68,582 Accruals and other reserves 52,879 71,513 Unrealized losses on cash flow hedges 31,810 17,870 Allowance for doubtful accounts and sales return reserves 29,029 11,759 Inventory reserves 13,852 17,404 Share-based compensation expense 9,717 11,856 Foreign tax credit 5,829 296 Deferred revenue 5,418 5,625 Tax credits 5,302 6,810 Deferred and prepaid compensation 4,762 2,110 Property, Equipment and Intangible assets 185 12,579 Other 14,524 4,953 Gross deferred tax assets 366,589 231,357 Valuation allowance ( 50,518 ) ( 51,118 ) Total deferred tax assets $ 316,070 $ 180,239 Liabilities: Intangible assets $ ( 245,116 ) $ ( 277,147 ) ROU assets ( 111,466 ) — Unremitted non-U.S. earnings ( 28,882 ) ( 27,771 ) Other ( 2,944 ) 8 Total deferred tax liabilities $ ( 388,408 ) $ ( 304,910 ) Net deferred tax liabilities $ ( 72,337 ) $ ( 124,671 ) The valuation allowance relates primarily to certain state and foreign net operating loss carry forward, foreign deferred items and state credits. The Company’s assessment is that it is not more likely than not that these deferred tax assets will be realized. A reconciliation of the statutory United States federal income tax rate to the Company’s effective income tax rate is as follows: Fiscal Years Ended November 30, 2020 2019 2018 Federal statutory income tax rate 21.0 % 21.0 % 22.2 % State taxes, net of federal income tax benefit 1.4 1.5 2.4 Global intangible low taxed income 1.0 1.6 — Foreign taxes 0.3 ( 2.3 ) 0.6 Tax on anticipated distributions from subsidiaries 0.2 1.0 — Adjustments related to the TCJA — — 7.2 Uncertain tax benefits ( 0.8 ) 2.6 — Other 1.7 0.7 1.9 Effective income tax rate 24.8 % 26.1 % 34.3 % The Company’s United States business has sufficient cash flow and liquidity to fund its operating requirements and the Company expects and intends that profits earned outside the United States will be fully utilized and reinvested outside of the United States with the exception for earnings of certain previously acquired foreign entities. The Company recorded deferred tax liabilities related to non-U.S. withholding taxes related to the earnings likely to be repatriated in the future. 81 Table of Content As of November 30, 2020, the Company had approximately $ 1,814,000 of undistributed earnings of its non-U.S. subsidiaries for which it has not provided for non-U.S. withholding taxes and state taxes because such earnings are intended to be reinvested indefinitely in international operations. It is not practicable to determine the amount of applicable taxes that would be due if such earnings were distributed. Accordingly, the Company has not provisioned United States state taxes and foreign withholding taxes on non-U.S. subsidiaries for which the earnings are permanently reinvested. As of November 30, 2020, the Company had net operating loss carry forward of approximately $ 41,700 and $ 36,590 for federal and state purposes, respectively. The federal net operating loss carry forward will start expiring in fiscal year ending November 30, 2021 , if not used, and the state net operating loss carry forward will start expiring in fiscal year ending November 30, 2021 , if not used. The Company also had approximately $ 161,150 of foreign net operating loss carry forward that will also start expiring in fiscal year ending November 30, 2021 if not used. In addition, the Company had approximately $ 7,600 of various federal and state income tax credit carry forwards that if not used, will begin expiring in fiscal year ending November 30, 2021 . Utilization of the acquired loss carry forwards may be limited pursuant to Section 382 of the Internal Revenue Code of 1986. The Company enjoys tax holidays in certain jurisdictions, primarily, China, Costa Rica, Nicaragua and the Philippines. The tax holidays provide for lower or zero rates of taxation and require various thresholds of investment and business activities in those jurisdictions. Certain tax holidays begin to expire in fiscal year 2021 . The estimated range of tax benefits from the above tax holidays on diluted earnings per share for fiscal years 2020, 2019 and 2018 were approximately $ 0.25 to $ 0.29 , $ 0.06 to $ 0.07 and $ 0.10 to $ 0.12 , respectively. The aggregate changes in the balances of gross unrecognized tax benefits, excluding accrued interest and penalties, during fiscal years 2020, 2019 and 2018 were as follows: Balance as of November 30, 2017 $ 38,282 Additions based on tax positions related to the current year 8,173 Additions for tax positions of prior years and acquisition 10,763 Lapse of statute of limitations ( 3,641 ) Changes due to translation of foreign currencies 398 Balance as of November 30, 2018 53,975 Additions based on tax positions related to the current year 15,569 Additions for tax positions of prior years and acquisition 9,067 Lapse of statute of limitations ( 7,234 ) Changes due to translation of foreign currencies ( 15 ) Balance as of November 30, 2019 71,362 Additions based on tax positions related to the current year 7,080 Additions for tax positions of prior years and acquisition 3,228 Reductions for tax positions of prior years ( 3,097 ) Settlements ( 144 ) Lapse of statute of limitations ( 17,547 ) Changes due to translation of foreign currencies ( 467 ) Balance as of November 30, 2020 $ 60,416 The Company conducts business globally and files income tax returns in various U.S. and foreign tax jurisdictions. The Company is subject to continuous examination and audits by various tax authorities. 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. Although timing of the resolution of audits and/or appeals is highly uncertain, the Company believes it is reasonably possible that the total amount of unrecognized tax benefits as of November 30, 2020 will not materially change in the next twelve months. The Company is no longer subject to U.S. federal income tax audit for returns covering years through fiscal 2015. The Company is no longer subject to foreign or state income tax audits for returns covering years through 2003, and fiscal year 2002, respectively . As of November 30, 2020, $ 60,416 of the total unrecognized tax benefits, net of federal benefit, would affect the effective tax rate, if realized. The Company’s policy is to include interest and penalties related to income taxes, including unrecognized tax benefits, within the provision for income taxes. 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. 82 Table of Content 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 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. These arrangements are described in Note 8 and do not have expiration dates. As the Company does not have access to information regarding the amount of inventory purchased from the Company, still on hand with the customer at any point in time, the Company’s repurchase obligations relating to inventory cannot be reasonably estimated. Losses, if any, would be the difference between the repossession cost and the resale value of the inventory. There have been no repurchases through November 30, 2020 under these agreements and the Company is not aware of any pending customer defaults or repossession obligations. The Company believes that, based on historical experience, the likelihood of a material loss pursuant to these inventory repurchase obligations is remote. From time to time, the Company receives notices from third parties, including customers and suppliers, seeking indemnification, payment of money or other actions in connection with claims made against them. Also, from time to time, the Company has been involved in various bankruptcy preference actions where the Company was a supplier to the companies now in bankruptcy. In addition, the Company is subject to various other claims, both asserted and unasserted, that arise in the ordinary course of business. The Company evaluates these claims and records the related liabilities. It is possible that the ultimate liabilities could differ from the amounts recorded. 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. 83 Table of Content 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 ASSETS Current assets: Cash and cash equivalents $ 1,412,016 Accounts receivable, net 2,808,125 Receivable from vendors, net 286,327 Inventories 2,684,076 Other current assets 180,343 Total current assets 7,370,887 Property and equipment, net 157,645 Goodwill 423,885 Intangible assets, net 186,047 Deferred tax assets 39,636 Other assets 138,069 Total assets $ 8,316,169 LIABILITIES AND EQUITY Current liabilities: Borrowings, current $ 124,958 Accounts payable 3,753,634 Accrued compensation and benefits 103,075 Other accrued liabilities 618,616 Income taxes payable 46,363 Total current liabilities 4,646,647 Long-term borrowings 1,496,700 Other long-term liabilities 130,296 Deferred tax liabilities 5,836 Total liabilities 6,279,478 Stockholders' equity 2,036,692 Total liabilities and equity $ 8,316,169 As described in Note 3 , on January 11, 2021 , the Company declared the reinstatement of a quarterly cash dividend. 84 Table of Content 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. In the Company’s opinion, this unaudited information has been prepared on the same basis as the audited information and includes all adjustments (consisting of only normal recurring adjustments) necessary to fairly state the financial information for the periods presented. Fiscal Year 2020 Three Months Ended Fiscal Year 2019 Three Months Ended Statements of Operations Data: (currency and share amounts in thousands, except per share amounts) Feb. 29, 2020 May 31, 2020 Aug. 31, 2020 Nov. 30, 2020 Feb. 28, 2019 May 31, 2019 Aug. 31, 2019 Nov. 30, 2019 (Amounts may not add due to rounding) Revenue: Products $ 4,081,024 $ 4,470,928 $ 5,306,361 $ 6,118,571 $ 4,080,684 $ 4,567,072 $ 5,047,968 $ 5,374,241 Services 1,183,173 1,061,711 1,158,421 1,295,373 1,168,769 1,155,816 1,155,690 1,207,052 Total revenue 5,264,198 5,532,639 6,464,782 7,413,944 5,249,453 5,722,889 6,203,659 6,581,293 Cost of revenue: Products (3,825,920 ) (4,196,312 ) (5,008,881 ) (5,751,929 ) (3,833,117 ) (4,297,096 ) (4,746,197 ) (5,036,301 ) Services (739,934 ) (718,514 ) (747,809 ) (838,660 ) (737,415 ) (727,324 ) (731,472 ) (750,453 ) Gross profit 698,345 617,812 708,092 823,355 678,921 698,468 725,990 794,539 Selling, general and administrative expenses (509,690 ) (506,088 ) (498,956 ) (502,768 ) (516,958 ) (523,813 ) (517,135 ) (526,251 ) Operating income 188,655 111,724 209,136 320,588 161,963 174,655 208,855 268,288 Interest expense and finance charges, net (36,376 ) (33,921 ) (28,749 ) (28,290 ) (41,606 ) (43,144 ) (42,945 ) (38,726 ) Other income (expense), net 2,380 1,466 (567 ) (2,004 ) (695 ) 21,546 (1,087 ) 10,599 Income before income taxes 154,659 79,270 179,819 290,294 119,662 153,057 164,823 240,161 Provision for income taxes (32,075 ) (22,310 ) (45,356 ) (75,142 ) (32,556 ) (38,584 ) (41,691 ) (64,160 ) Net income $ 122,584 $ 56,960 $ 134,464 $ 215,152 $ 87,106 $ 114,473 $ 123,132 $ 176,001 Earnings per common share: Basic $ 2.38 $ 1.11 $ 2.61 $ 4.17 $ 1.70 $ 2.24 $ 2.41 $ 3.44 Diluted $ 2.36 $ 1.10 $ 2.60 $ 4.14 $ 1.69 $ 2.23 $ 2.40 $ 3.41 Weighted-average common shares outstanding - basic 50,815 50,849 50,890 51,048 50,706 50,675 50,601 50,693 Weighted-average common shares outstanding - diluted 51,232 51,047 51,241 51,432 50,927 50,939 50,845 51,032 Cash dividends declared per share $ 0.400 $ — $ — $ — $ 0.375 $ 0.375 $ 0.375 $ 0.375 EPS for each quarter is computed using the weighted-average number of shares outstanding during that quarter, while EPS for the fiscal year is computed using the weighted-average number of shares outstanding during the fiscal year. The sum of EPS for each of the four quarters may not equal EPS for the fiscal year. 85 Table of Content SYNNEX CORPORATION SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS For the Fiscal Years Ended November 30, 2020, 2019 and 2018 (in thousands) (Amounts may not add due to rounding) Additions/Deductions Balances at Beginning of Fiscal Year Charged to Revenue and Expense, net Additions from Acquisitions Reclassifications and Write-offs Balances at End of Fiscal Year Fiscal Year Ended November 30, 2018 Allowance for sales returns-gross $ 53,139 $ 7,917 $ — $ ( 1,869 ) $ 59,186 Allowance for deferred tax assets 18,604 ( 2,555 ) 45,791 — 61,840 Fiscal Year Ended November 30, 2019 Allowance for sales returns-gross $ 59,186 $ 20,875 — $ ( 4 ) $ 80,057 Allowance for deferred tax assets 61,840 5,361 — ( 16,083 ) 51,118 Fiscal Year Ended November 30, 2020 Allowance for sales returns-gross $ 80,057 $ 17,385 $ — $ 183 $ 97,625 Allowance for deferred tax assets 51,118 639 — ( 261 ) 51,496 86 Table of Content Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.