TD SYNNEX CORP

Previous wording

•Revenue in constant currency, which is revenue adjusted for the translation effect of foreign currencies so that certain financial results can be viewed without the impact of fluctuations in foreign currency exchange rates, thereby facilitating period-to-period comparisons of our business performance. Revenue in constant currency is calculated by translating the revenue for the three and six months ended May 31, 2024 in the billing currency using the comparable prior period currency conversion rate. Generally, when the dollar either strengthens or weakens against other currencies, the growth at constant currency rates will be higher or lower than growth reported at actual exchange rates.

Current wording

•Revenue in constant currency, which is revenue adjusted for the translation effect of foreign currencies so that certain financial results can be viewed without the impact of fluctuations in foreign currency exchange rates, thereby facilitating period-to-period comparisons of our business performance. Revenue in constant currency is calculated by translating the revenue for the three and nine months ended August 31, 2024 in the billing currency using the comparable prior period currency conversion rate. Generally, when the dollar either strengthens or weakens against other currencies, the growth at constant currency rates will be higher or lower than growth reported at actual exchange rates.

Previous wording

Acquisition, integration and restructuring costs, which are expensed as incurred, primarily represent professional services costs for legal, banking, consulting and advisory services, severance and other personnel related costs, share-based compensation expense and debt extinguishment fees that are incurred in connection with acquisition, integration, restructuring and divestiture activities. From time to time, this category may also include transaction-related gains/losses on divestitures/spin-off of businesses, costs related to long-lived assets including impairment charges and accelerated depreciation and amortization expense due to changes in asset useful lives, as well as various other costs associated with the acquisition or divestiture.

Current wording

Acquisition, integration and restructuring costs, which are expensed as incurred, primarily represent professional services costs for legal, banking, consulting and advisory services, severance and other personnel related costs, share-based compensation expense and debt extinguishment fees that are incurred in connection with acquisition, integration, restructuring and divestiture activities. From time to time, this category may also include transaction-related gains/losses on divestitures/spin-off of businesses, costs related to long-lived assets including impairment charges and accelerated depreciation and amortization expense due to changes in asset useful lives, as well as various other costs associated with the acquisition or divestiture. Effective as of the third quarter of fiscal 2024, the Company ceased recording expenses associated with activities related to the Merger within acquisition, integration and restructuring costs.

Previous wording

The following table summarizes our revenue and change in revenue by segment for the three and six months ended May 31, 2024 and 2023:

Current wording

The following table summarizes our revenue and change in revenue by segment for the three and nine months ended August 31, 2024 and 2023:

Previous wording

During the three months ended May 31, 2024, consolidated revenue and revenue in constant currency slightly decreased by $114.2 million and $76.4 million, respectively, as compared to the prior year period. The decreases are primarily driven by the presentation of additional revenue on a net basis, which negatively impacted our revenue compared to the prior three months ended May 31, 2023 by approximately $550 million, or 4%, partially offset by growth in our Advanced Solutions and Endpoint Solutions portfolios. The impact of changes in foreign currencies is primarily due to the weakening of the Japanese yen against the U.S. dollar.

Current wording

During the three months ended August 31, 2024, consolidated revenue and revenue in constant currency increased by $724.1 million and $782.8 million, respectively, as compared to the prior year period. The increases are primarily driven by growth in both our Advanced Solutions and Endpoint Solutions portfolios, partially offset by a greater percentage of our revenue being presented on a net basis, which negatively impacted our revenue compared to the prior three months ended August 31, 2023 by approximately $550 million, or 4%.

Previous wording

During the six months ended May 31, 2024, Americas revenue and revenue in constant currency decreased by $877.4 million and $888.2 million, respectively, as compared to the prior year period. The decreases are primarily driven by the presentation of additional revenue on a net basis, which negatively impacted our revenue compared to the six months ended May 31, 2023 by approximately $780 million, or 5%, and a decline in our Endpoint Solutions portfolio in the region.

Current wording

During the three months ended August 31, 2024, Americas revenue and revenue in constant currency increased by $210.4 million and $238.2 million, respectively, as compared to the prior year period. The increases are primarily driven by growth in our Advanced Solutions portfolio in the region, partially offset by a greater percentage of our revenue being presented on a net basis, which negatively impacted our revenue compared to the three months ended August 31, 2023 by approximately $470 million, or 5%.

Previous wording

During the three months ended May 31, 2024, both Americas revenue and revenue in constant currency decreased by $141.8 million as compared to the prior year period. The decreases are primarily driven by the presentation of additional revenue on a net basis, which negatively impacted our revenue compared to the three months ended May 31, 2023 by approximately $440 million, or 5%, partially offset by growth in our Advanced Solutions portfolio.

Current wording

During the nine months ended August 31, 2024, Americas revenue and revenue in constant currency decreased by $667.0 million and $650.0 million, respectively, as compared to the prior year period. The decreases are primarily driven by the presentation of additional revenue on a net basis, which negatively impacted our revenue compared to the nine months ended August 31, 2023 by approximately $1.3 billion, or 5%, partially offset by growth in our Advanced Solutions portfolio.

Previous wording

During the three months ended May 31, 2024, Europe revenue and revenue in constant currency decreased by $34.7 million and $33.6 million, respectively, as compared to the prior year period. The decreases are primarily driven by the presentation of additional revenue on a net basis, which negatively impacted our revenue compared to the three months ended May 31, 2023 by approximately $90 million, or 2%, partially offset by an increase in our Endpoint Solutions portfolio.

Current wording

During the three months ended August 31, 2024, Europe revenue and revenue in constant currency increased by $363.6 million and $376.4 million, respectively, as compared to the prior year period. The increases are primarily driven by growth in both our Endpoint Solutions and Advanced Solutions portfolios in the region, partially offset by a greater percentage of our revenue being presented on a net basis, which negatively impacted our revenue compared to the three months ended August 31, 2023 by approximately $40 million, or 1%.

Previous wording

During the six months ended May 31, 2024, both consolidated revenue and revenue in constant currency decreased by $1.3 billion, as compared to the prior year period. The decreases are primarily driven by the presentation of additional revenue on a net basis, which negatively impacted our revenue compared to the prior six months ended May 31, 2023 by approximately $1 billion, or 3%, and a decline in our Endpoint Solutions portfolio. The impact of changes in foreign currencies is primarily due to the strengthening of the euro against the U.S. dollar, partially offset by the weakening of the Japanese yen against the U.S. dollar.

Current wording

During the nine months ended August 31, 2024, Europe revenue and revenue in constant currency decreased by $74.3 million and $179.8 million, respectively, as compared to the prior year period. The decreases are primarily driven by the presentation of additional revenue on a net basis, which negatively impacted our revenue by approximately $240 million, or 2%, compared to the nine months ended August 31, 2023, partially offset by growth in our Endpoint Solutions portfolio. The impact of changes in foreign currencies is primarily due to the strengthening of the euro against the U.S. dollar.

Previous wording

During the three months ended May 31, 2024, APJ revenue and revenue in constant currency increased by $62.2 million and $98.9 million, respectively, as compared to the prior year period. During the six months ended May 31, 2024, APJ revenue and revenue in constant currency increased by $50.9 million and $115.3 million, respectively, as compared to the prior year period. The increases are primarily driven by growth in our Advanced Solutions portfolio in the region, partially offset by a decline in our Endpoint Solutions portfolio. The impact of changes in foreign currencies is primarily due to the weakening of the Japanese yen against the U.S. dollar.

Current wording

During the nine months ended August 31, 2024, APJ revenue and revenue in constant currency increased by $201.0 million and $283.6 million, respectively, as compared to the prior year period. The increases are primarily driven by growth in our Advanced Solutions portfolio in the region, partially offset by a decline in our Endpoint Solutions portfolio and by a greater percentage of our revenue being presented on a net basis, which negatively impacted our revenue by approximately $60 million, or 2%. The impact of changes in foreign currencies is primarily due to the weakening of the Japanese yen against the U.S. dollar.

Previous wording

Europe operating income and margin decreased during the three months ended May 31, 2024, compared to the prior year period, primarily due to an increase in acquisition, integration and restructuring costs and a decline in gross margin, partially offset by a decrease in purchase accounting adjustments.

Current wording

Our gross profit, on both a GAAP and non-GAAP basis, decreased during the three months ended August 31, 2024, compared to the prior year period, primarily due a decrease in gross margin, partially offset by an increase in revenue due to growth in both our Advanced Solutions and Endpoint Solutions portfolios.

Previous wording

Our gross profit increased during the three and six months ended May 31, 2024, compared to the prior year period, primarily due to a decrease in purchase accounting adjustments related to the Merger. Our gross margin increased during the three and six months ended May 31, 2024, compared to the prior year period, primarily due to the presentation of additional revenue on a net basis, which positively impacted our gross margin by approximately 27 and 25 basis points, respectively, and the decrease in purchase accounting adjustments related to the Merger.

Current wording

Our gross profit increased slightly during the nine months ended August 31, 2024, compared to the prior year period, primarily due to a decrease in purchase accounting adjustments related to the Merger. Our non-GAAP gross profit decreased during the nine months ended August 31, 2024, compared to the prior year period, primarily due to the decrease in revenues.

Previous wording

During the three months ended May 31, 2024, acquisition and integration expenses related to the Merger slightly decreased, compared to the prior year period, primarily due to a decrease in stock-based compensation expense, partially offset by increases in long-lived assets charges and termination fees. During the six months ended May 31, 2024, acquisition and integration expenses related to the Merger decreased, compared to the prior year period, primarily due to a decrease in stock-based compensation expense, partially offset by voluntary severance program costs.

Current wording

During the three months ended August 31, 2024, selling, general and administrative expenses slightly decreased, compared to the prior year period, primarily due to lower credit costs, partially offset by higher share-based compensation expense. During the nine months ended August 31, 2024, selling, general and administrative expenses increased, compared to the prior year period, primarily due to higher share-based compensation expense, partially offset by lower credit costs.

Previous wording

During the three months ended May 31, 2024, selling, general and administrative expenses slightly decreased, compared to the prior year period, primarily due to lower personnel costs in the quarter, partially offset by higher share-based compensation expense. During the six months ended May 31, 2024, selling, general and administrative expenses increased, compared to the prior year period, primarily due to higher share-based compensation expense. During the three and six months ended May 31, 2024, selling, general and administrative expenses increased as a percentage of revenue, compared to the prior year period, primarily due to the decrease in revenue. A greater percentage of our revenue was presented on a net basis which contributed to the increase in selling, general and administrative expenses as a percentage of revenue for the three and six months ended May 31, 2024 by approximately 19 and 18 basis points, respectively.

Current wording

During the three months ended August 31, 2024, selling, general and administrative expenses decreased as a percentage of revenue, compared to the prior year period, primarily due to increased revenue and lower credit costs, partially offset by higher share-based compensation expense. During the nine months ended August 31, 2024, selling, general and administrative expenses increased as a percentage of revenue, compared to the prior year period, primarily due to a decrease in revenue along with higher share-based compensation expense, partially offset by lower credit costs. A greater percentage of our revenue was presented on a net basis which increased the ratio of selling, general and administrative expenses as a percentage of revenue for the three and nine months ended August 31, 2024 by approximately 16 and 17 basis points, respectively.

Previous wording

Acquisition, integration and restructuring costs are primarily comprised of costs related to the Merger, costs related to the Global Business Optimization 2 Program initiated by Tech Data prior to the Merger (the “GBO 2 Program”) of $3.9 million during the three and six months ended May 31, 2024 and $2.6 million and $6.1 million during the three and six months ended May 31, 2023, respectively, and $1.2 million of costs during the three and six months ended May 31, 2024 related to other acquisitions. We do not expect to incur additional costs under the GBO 2 Program in future periods.

Current wording

Acquisition, integration and restructuring costs are primarily comprised of costs related to the Merger and costs related to the Global Business Optimization 2 Program initiated by Tech Data prior to the Merger (the “GBO 2 Program”) of $3.9 million during the nine months ended August 31, 2024, and $3.0 million and $9.0 million during the three and nine months ended August 31, 2023, respectively. Acquisition, integration and restructuring costs related to other acquisitions were $0.7 million and $1.9 million during the three and nine months ended August 31, 2024, respectively. We do not expect to incur additional costs under the GBO 2 Program in future periods.

Previous wording

We incurred acquisition, integration and restructuring costs related to the completion of the Merger, including professional services costs, personnel and other costs, long-lived assets charges and termination fees, and stock-based compensation expense. Professional services costs are primarily comprised of IT and other consulting services, as well as legal expenses. Personnel and other costs are primarily comprised of costs related to retention and other bonuses, severance and duplicative labor costs. Long-lived assets charges and termination fees include accelerated depreciation and amortization expense of $5.1 million and $5.5 million recorded during the three and six months ended May 31, 2024, respectively, and $5.3 million and $11.5 million recorded during the three and six months ended May 31, 2023, respectively, due to changes in asset useful lives in conjunction with the consolidation of certain IT systems, along with $10.4 million and $17.0 million recorded during the three and six months ended May 31, 2024, respectively, and $2.3 million and $12.5 million recorded during the three and six months ended May 31, 2023, respectively, for termination fees related to certain IT systems. Stock-based compensation expense primarily relates to costs associated with the conversion of certain Tech Data performance-based equity awards issued prior to the Merger into restricted shares of TD SYNNEX (refer to Note 4 – Share-Based Compensation to the Consolidated Financial Statements in Part I, Item 1 of this Report for further information) and expenses for certain restricted stock awards issued in conjunction with the Merger.

Current wording

We have substantially completed the acquisition, integration and restructuring activities related to the Merger. Therefore, there were no material related expenses recorded within acquisition, integration and restructuring costs for the three months ended August 31, 2024 and there are no material expenses expected in future periods. We previously incurred acquisition, integration and restructuring costs related to the completion of the Merger, including professional services costs, personnel and other costs, long-lived assets charges and termination fees, and stock-based compensation expense. Professional services costs are primarily comprised of IT and other consulting services, as well as legal expenses. Personnel and other costs are primarily comprised of costs related to retention and other bonuses, severance and duplicative labor costs. Long-lived assets charges and termination fees include accelerated depreciation and amortization expense of $5.5 million recorded during the nine months ended August 31, 2024 and $4.7 million and $16.2 million recorded during the three and nine months ended August 31, 2023, respectively, due to changes in asset useful lives in conjunction with the consolidation of certain IT systems, along with $17.0 million recorded during the nine months ended August 31, 2024 and $0.4 million and $12.9 million recorded during the three and nine months ended August 31, 2023, respectively, for termination fees related to certain IT systems. Stock-based compensation expense primarily relates to costs associated with the conversion of certain Tech Data performance-based equity awards issued prior to the Merger into restricted shares of TD SYNNEX (refer to Note 4 – Share-Based Compensation to the Consolidated Financial Statements in Part I, Item 1 of this Report for further information) and expenses for certain restricted stock awards issued in conjunction with the Merger.

Previous wording

In July 2023, we offered a voluntary severance program ("VSP") to certain co-workers in the U.S. as part of our cost optimization efforts related to the Merger. We incurred $2.9 million and $10.1 million of costs in connection with the VSP during the three and six months ended May 31, 2024, respectively, including $2.0 million and $8.0 million of severance costs and $0.9 million and $2.1 million of duplicative labor costs, respectively.

Current wording

In July 2023, we offered a voluntary severance program ("VSP") to certain co-workers in the U.S. as part of our cost optimization efforts related to the Merger. We incurred $10.1 million of costs in connection with the VSP during the nine months ended August 31, 2024, including $8.0 million of severance costs and $2.1 million of duplicative labor costs. We incurred $37.2 million of costs in connection with the VSP during the three and nine months ended August 31, 2023, including $30.0 million of severance costs and $7.2 million of duplicative labor costs.

Previous wording

During the three and six months ended May 31, 2024 and 2023, acquisition and integration expenses related to the Merger were composed of the following:

Current wording

During the three and nine months ended August 31, 2024 and 2023, acquisition and integration expenses related to the Merger were composed of the following:

Previous wording

The following tables provide an analysis of operating income and non-GAAP operating income on a consolidated and regional basis as well as a reconciliation of operating income to non-GAAP operating income on a consolidated and regional basis for the three and six months ended May 31, 2024 and 2023:

Current wording

The following tables provide an analysis of operating income and non-GAAP operating income on a consolidated and regional basis as well as a reconciliation of operating income to non-GAAP operating income on a consolidated and regional basis for the three and nine months ended August 31, 2024 and 2023:

Previous wording

Americas non-GAAP operating income increased during the three months ended May 31, 2024, as compared to the prior year period, primarily due to increased gross profit in the region along with decreases in personnel costs and credit costs. Americas non-GAAP operating income slightly decreased during the six months ended May 31, 2024, as compared to the prior year period, primarily due to the decrease in revenue.

Current wording

Consolidated non-GAAP operating income slightly decreased during the three and nine months ended August 31, 2024, compared to the prior year period, primarily due to the decrease in non-GAAP gross profit, partially offset by lower credit costs.

Previous wording

Europe non-GAAP operating income and margin decreased during the three months ended May 31, 2024, compared to the prior year period, primarily due to a decline in gross margin. Europe non-GAAP operating income was flat during the six months ended May 31, 2024, compared to the prior year period, primarily due to an increase in gross margin due to margin expansion in strategic technologies, partially offset by the decrease in revenue. Europe non-GAAP operating margin increased during the six months ended May 31, 2024, compared to the prior year period, primarily due to an increase in gross margin due to margin expansion in strategic technologies.

Current wording

Consolidated non-GAAP operating margin decreased during the three months ended August 31, 2024, compared to the prior year period, primarily due to the decrease in gross margin due to higher strategic technologies margins in the prior year period and a less profitable mix of products sold in the current period. Consolidated non-GAAP operating margin was flat during the nine months ended August 31, 2024, compared to the prior year period.

Previous wording

Consolidated non-GAAP operating income increased during the three months ended May 31, 2024, compared to the prior year period, primarily due to the increase in gross profit and lower personnel costs. Consolidated non-GAAP operating income decreased during the six months ended May 31, 2024, compared to the prior year period, primarily due to slightly higher selling, general and administrative expenses.

Current wording

Americas non-GAAP operating income decreased during the three and nine months ended August 31, 2024, as compared to the prior year period, primarily due to the decrease in gross margin due to higher strategic technologies margins in the prior year period and a less profitable mix of products sold in the current period, partially offset by lower credit costs.

Previous wording

APJ operating income, on both a GAAP and non-GAAP basis, decreased during the three months ended May 31, 2024, compared to the prior year period, primarily due to decreased gross margin in the region and an increase in personnel costs, partially offset by an increase in revenue. APJ operating income, on both a GAAP and non-GAAP basis, slightly decreased during the six months ended May 31, 2024, compared to the prior year period, primarily due to higher personnel costs in the region, partially offset by the increase in revenue.

Current wording

APJ operating income, on both a GAAP and non-GAAP basis, increased during the three and nine months ended August 31, 2024, compared to the prior year period, primarily due to the increase in revenue.

Previous wording

During the three months ended May 31, 2024, our interest expense and finance charges, net increased, compared to the prior year period. The increase was primarily driven by increased costs associated with the sale of accounts receivable due to higher discount fees. During the six months ended May 31, 2024, our interest expense and finance charges, net decreased, compared to the prior year period. The decrease was primarily due to higher income earned on our cash investments, partially offset by increased costs associated with the sale of accounts receivable due to higher discount fees. Accounts receivable discount fees totaled $16.6 million and $32.6 million in the three and six months ended May 31, 2024, respectively, compared to $12.0 million and $23.7 million in the three and six months ended May 31, 2023, respectively.

Current wording

During the three months ended August 31, 2024, our interest expense and finance charges, net increased, compared to the prior year period, primarily driven by higher average volumes of short-term borrowings along with increased costs associated with the sale of accounts receivable due to higher discount fees. During the nine months ended August 31, 2024, our interest expense and finance charges, net increased, compared to the prior year period, primarily due to increased costs associated with the sale of accounts receivable due to higher discount fees. Accounts receivable discount fees totaled $16.4 million and $49.0 million in the three and nine months ended August 31, 2024, respectively, compared to $12.5 million and $36.2 million in the three and nine months ended August 31, 2023, respectively.

Previous wording

During the three months ended May 31, 2024, our other expense, net was relatively flat compared to the prior year period. During the six months ended May 31, 2024, our other expense, net increased, compared to the prior year period, primarily due to increased hedging costs.

Current wording

During the three and nine months ended August 31, 2024, our other expense, net was relatively flat, compared to the prior year period.

Previous wording

During the six months ended May 31, 2024, our income tax expense was flat, compared to the prior year period, as higher income during the period was offset by a lower effective tax rate. The effective tax rate was lower during the six months ended May 31, 2024 as compared to the six months ended May 31, 2023, primarily due to the relative mix of earnings and losses within the taxing jurisdictions in which we operate.

Current wording

During the three months ended August 31, 2024, our income tax expense increased, compared to the prior year period, primarily due to higher income during the period and a slightly higher effective tax rate. The effective tax rate was higher during the three months ended August 31, 2024 as compared to the three months ended August 31, 2023, primarily due to the prior year utilization of tax credits earned in certain jurisdictions and the relative mix of earnings and losses within the taxing jurisdictions in which we operate.

Previous wording

During the three months ended May 31, 2024, our income tax expense decreased, compared to the prior year period, primarily due to a lower effective tax rate, which was partially offset by higher income during the period. The effective tax rate was lower during the three months ended May 31, 2024 as compared to the three months ended May 31, 2023, primarily due to the relative mix of earnings and losses within the taxing jurisdictions in which we operate.

Current wording

During the nine months ended August 31, 2024, our income tax expense increased, compared to the prior year period, primarily due to higher income during the period, partially offset by a slightly lower effective tax rate. The effective tax rate was lower during the nine months ended August 31, 2024 as compared to the nine months ended August 31, 2023, primarily due to the relative mix of earnings and losses within the taxing jurisdictions in which we operate, partially offset by the prior year utilization of tax credits earned in certain jurisdictions.

Previous wording

(1)Diluted EPS is calculated using the two-class method. Unvested restricted stock awards granted to employees are considered participating securities. For purposes of calculating Diluted EPS, net income allocated to participating securities was approximately 0.9% of net income for both the three and six months ended May 31, 2024, and was approximately 0.8% of net income for both the three and six months ended May 31, 2023.

Current wording

(1)Diluted EPS is calculated using the two-class method. Unvested restricted stock awards granted to employees are considered participating securities. For purposes of calculating Diluted EPS, net income allocated to participating securities was approximately 0.9% of net income for both the three and nine months ended August 31, 2024, and was approximately 0.7% of net income for both the three and nine months ended August 31, 2023.

Previous wording

Our business is working capital intensive. Our working capital needs are primarily to finance accounts receivable and inventory. We rely heavily on term loans, sales of accounts receivable, our securitization program, our revolver programs and net trade credit from vendors for our working capital needs. We have financed our growth and cash needs to date primarily through cash generated from operations and financing activities. As a general rule, when sales volumes are increasing, our net investment in working capital dollars typically increases, which generally results in decreased cash flow generated from operating activities. Conversely, when sales volumes decrease, our net investment in working capital dollars typically decreases, which generally results in increases in cash flows generated from operating activities. We calculate CCC as days of the last fiscal quarter’s revenue outstanding in accounts receivable plus days of supply on hand in inventory, less days of the last fiscal quarter’s cost of revenue outstanding in accounts payable. Our CCC was 23 days as of both May 31, 2024 and November 30, 2023. Our CCC remained flat as compared to November 30, 2023, with offsetting decreases in DSO and DPO as both our accounts receivable and accounts payable balances declined due to the timing of cash receipts and payments. Our CCC was 23 days and 24 days as of May 31, 2024 and May 31, 2023, respectively. The decrease was primarily due to a decrease in our DIO due to a decline in our inventory balances, partially offset by an increase in our DSO due to the timing of cash receipts.

Current wording

We calculate CCC as days of the last fiscal quarter’s revenue outstanding in accounts receivable plus days of supply on hand in inventory, less days of the last fiscal quarter’s cost of revenue outstanding in accounts payable. Our CCC was 21 days as of August 31, 2024, and 23 days as of November 30, 2023 and August 31, 2023, respectively. Our CCC decreased as compared to November 30, 2023 primarily due to a decrease in DSO as our accounts receivable declined due to timing of cash receipts, with offsetting increases in DIO and DPO, due to an increase in our inventory balances to support growth in our business and a corresponding increase in our accounts payable. Our CCC decreased compared to August 31, 2023, primarily due to an increase in DPO due to timing of payments and a decrease in DIO due to growth in our business while inventory balances increased slightly, partially offset by an increase in DSO due to the timing of cash receipts.

Previous wording

Net cash provided by operating activities was $270.0 million during the six months ended May 31, 2024, compared to net cash provided by operating activities of $604.8 million during the six months ended May 31, 2023. The decrease in net cash provided by operating activities was primarily due to a larger decrease in inventory during the six months ended May 31, 2023 related to ongoing sell-through of strategic inventory purchases that occurred during fiscal year 2022, partially offset by a larger decrease in accounts payable during the six months ended May 31, 2023 correlated with the decrease in inventory.

Current wording

Net cash provided by operating activities was $655.8 million during the nine months ended August 31, 2024, compared to net cash provided by operating activities of $1.2 billion during the nine months ended August 31, 2023. The decrease in net cash provided by operating activities was primarily due to a decrease in inventory during the nine months ended August 31, 2023 related to ongoing sell-through of strategic inventory purchases that occurred during fiscal year 2022, along with a larger decrease in accounts receivable during the nine months ended August 31, 2023 correlated with the decrease in sales volumes. These changes were partially offset by an increase in accounts payable during the nine months ended August 31, 2024 related to the timing of cash payments, as compared to a decrease in accounts payable during the nine months ended August 31, 2023 correlated with the decrease in inventory in the prior year.

Previous wording

Net cash used in investing activities during the six months ended May 31, 2024 and May 31, 2023 was $100.8 million and $64.5 million, respectively. The increase in cash used in investing activities is primarily due to cash paid for the acquisition of a business of $26.2 million.

Current wording

Net cash used in investing activities during the nine months ended August 31, 2024 and August 31, 2023 was $181.6 million and $113.2 million, respectively. The increase in cash used in investing activities is primarily due to cash paid for the acquisition of businesses in the current year of $32.4 million, along with settlement of net investment hedges of $14.8 million.

Previous wording

Net cash used in financing activities during the six months ended May 31, 2024 was $17.5 million as compared to net cash used in financing activities during the six months ended May 31, 2023 of $247.1 million. The decrease in cash used in financing activities is primarily due to the issuance of the 2034 Senior Notes for $600.0 million, partially offset by an increase in repurchases of common stock under our share repurchase program, which totaled $453.4 million during the six months ended May 31, 2024, compared to $174.8 million during the six months ended May 31, 2023, coupled with $45.4 million of net repayments of short-term borrowings during the six months ended May 31, 2024 compared to $29.4 million of net short-term borrowings during the six months ended May 31, 2023.

Current wording

Net cash used in financing activities during the nine months ended August 31, 2024 was $655.4 million as compared to net cash used in financing activities during the nine months ended August 31, 2023 of $405.6 million. The increase in cash used in financing activities is primarily due to an increase in repurchases of common stock under our share repurchase program, which totaled $509.9 million during the nine months ended August 31, 2024, compared to $277.8 million during the nine months ended August 31, 2023.

Previous wording

Our cash and cash equivalents totaled $1.2 billion and $1.0 billion as of May 31, 2024 and November 30, 2023, respectively. Our cash and cash equivalents held by international subsidiaries are no longer subject to U.S. federal tax on repatriation into the U.S.. Repatriation of some foreign balances is restricted by local laws. If in the future we repatriate foreign cash back to the U.S., we will report in our Consolidated Financial Statements the impact of state and withholding taxes depending upon the planned timing and manner of such repatriation. Presently, we believe we have sufficient resources, cash flow and liquidity within the U.S. to fund current and expected future working capital, investment and other general corporate funding requirements.

Current wording

Our cash and cash equivalents totaled $853.9 million and $1.0 billion as of August 31, 2024 and November 30, 2023, respectively. Our cash and cash equivalents held by international subsidiaries are no longer subject to U.S. federal tax on repatriation into the U.S. Repatriation of some foreign balances is restricted by local laws. If in the future we repatriate foreign cash back to the U.S., we will report in our Consolidated Financial Statements the impact of state and withholding taxes depending upon the planned timing and manner of such repatriation. Presently, we believe we have sufficient resources, cash flow and liquidity within the U.S. to fund current and expected future working capital, investment and other general corporate funding requirements.

Previous wording

We believe that our available cash and cash equivalents balances, cash flows from operations and our existing sources of liquidity, including available capacity under our borrowing facilities, will be sufficient to enable the repayment of $700.0 million of our Senior Notes due in August 2024 and satisfy our current and planned working capital and investment needs for the next twelve months in all geographies. We also believe that our longer-term working capital, planned capital expenditures, anticipated stock repurchases, dividend payments and other general corporate funding requirements will be satisfied through cash flows from operations and, to the extent necessary, from our borrowing facilities and future financial market activities.

Current wording

We believe that our available cash and cash equivalents balances, cash flows from operations and our existing sources of liquidity, including available capacity under our borrowing facilities, will be sufficient to satisfy our current and planned working capital and investment needs for the next twelve months in all geographies. We also believe that our longer-term working capital, planned capital expenditures, anticipated stock repurchases, dividend payments and other general corporate funding requirements will be satisfied through cash flows from operations and, to the extent necessary, from our borrowing facilities and future financial market activities.

Previous wording

In the U.S., we have an accounts receivable securitization program to provide additional capital for our operations (the "U.S. AR Arrangement"). Under the terms of the U.S. AR Arrangement, we and our subsidiaries that are party to the U.S. AR Arrangement can borrow up to a maximum of $1.5 billion based upon eligible trade accounts receivable. The U.S. AR Arrangement, as amended December 11, 2023 and March 29, 2024, has a maturity date of December 2025. We also have an amended and restated credit agreement, dated as of April 16, 2024 (as amended, the "TD SYNNEX Credit Agreement"), pursuant to which we received commitments for the extension of a senior unsecured revolving credit facility not to exceed an aggregate principal amount of $3.5 billion, which revolving credit facility (the "TD SYNNEX Revolving Credit Facility") may, at our request but subject to the lenders' discretion, potentially be increased by up to an aggregate amount of $500.0 million. There were no amounts outstanding under the U.S. AR Arrangement or the TD SYNNEX Revolving Credit Facility at May 31, 2024 or November 30, 2023.

Current wording

In the U.S., we have an accounts receivable securitization program to provide additional capital for our operations (the "U.S. AR Arrangement"). Under the terms of the U.S. AR Arrangement, we and our subsidiaries that are party to the U.S. AR Arrangement can borrow up to a maximum of $1.5 billion based upon eligible trade accounts receivable. The U.S. AR Arrangement, as amended December 11, 2023, March 29, 2024 and August 1, 2024, has a maturity date of December 2025. We also have an amended and restated credit agreement, dated as of April 16, 2024 (as amended, the "TD SYNNEX Credit Agreement"), pursuant to which we received commitments for the extension of a senior unsecured revolving credit facility not to exceed an aggregate principal amount of $3.5 billion, which revolving credit facility (the "TD SYNNEX Revolving Credit Facility") may, at our request but subject to the lenders' discretion, potentially be increased by up to an aggregate amount of $500.0 million. There was $31.0 million outstanding under the U.S. AR Arrangement at August 31, 2024 at an interest rate of 6.21%. There were no amounts outstanding under the U.S. AR Arrangement at November 30, 2023. There were no amounts outstanding on the TD SYNNEX Revolving Credit Facility at August 31, 2024 or November 30, 2023.

Previous wording

We have various other committed and uncommitted lines of credit with financial institutions, short-term loans, term loans, credit facilities and book overdraft facilities, totaling approximately $569.6 million in borrowing capacity as of May 31, 2024. Our borrowings on these facilities vary within the period primarily based on changes in our working capital. There was $160.1 million outstanding on these facilities at May 31, 2024, at a weighted average interest rate of 5.93%, and there was $208.7 million outstanding on these facilities at November 30, 2023, at a weighted average interest rate of 7.52%.

Current wording

We have various other committed and uncommitted lines of credit with financial institutions, short-term loans, term loans, credit facilities and book overdraft facilities, totaling approximately $580.9 million in borrowing capacity as of August 31, 2024. Our borrowings on these facilities vary within the period primarily based on changes in our working capital. There was $283.2 million outstanding on these facilities at August 31, 2024, at a weighted average interest rate of 6.83%, and there was $208.7 million outstanding on these facilities at November 30, 2023, at a weighted average interest rate of 7.52%.

Previous wording

We had total outstanding borrowings of approximately $4.6 billion and $4.1 billion as of May 31, 2024 and November 30, 2023, respectively. Our outstanding borrowings include Senior Notes of $3.1 billion and $2.5 billion as of May 31, 2024 and November 30, 2023, respectively, and term loans described above as the TD SYNNEX Term Loan and 2024 Term Loan of approximately $1.3 billion and $1.4 billion at May 31, 2024 and November 30, 2023, respectively. For additional information on our borrowings, see Note 10 - Borrowings to the Consolidated Financial Statements included in Part I, Item 1 of this Report. With respect to our $700.0 million of 1.250% Senior Notes due August 9, 2024, our current intention is to repay these notes on or before their maturity date primarily using funds received from the issuance of our $600.0 million of 6.10% Senior Notes due April 12, 2034.

Current wording

We had total outstanding borrowings of approximately $4.1 billion as of both August 31, 2024 and November 30, 2023. Our outstanding borrowings include Senior Notes of $2.4 billion and $2.5 billion as of August 31, 2024 and November 30, 2023, respectively, and term loans described above as the TD SYNNEX Term Loan and 2024 Term Loan of approximately $1.3 billion and $1.4 billion at August 31, 2024 and November 30, 2023, respectively. For additional information on our borrowings, see Note 10 – Borrowings to the Consolidated Financial Statements included in Part I, Item 1 of this Report. We repaid the $700.0 million of 1.250% Senior Notes that were due August 9, 2024 primarily using funds received from the issuance of our $600.0 million of 6.10% Senior Notes due April 12, 2034.

Previous wording

We have uncommitted accounts receivable purchase agreements under which trade accounts receivable owed by certain customers may be acquired, without recourse, by certain financial institutions. Available capacity under these programs is dependent upon the level of our trade accounts receivable eligible to be sold into these programs and the financial institutions’ willingness to purchase such receivables. In addition, certain of these programs also require that we continue to service, administer and collect the sold accounts receivable. At May 31, 2024 and November 30, 2023, we had a total of $1.2 billion and $864.6 million, respectively, of trade accounts receivable sold to and held by financial institutions under these programs. Discount fees for these programs totaled $16.6 million and $32.6 million in the three and six months ended May 31, 2024, respectively, and $12.0 million and $23.7 million in the three and six months ended May 31, 2023, respectively.

Current wording

We have uncommitted accounts receivable purchase agreements under which trade accounts receivable owed by certain customers may be acquired, without recourse, by certain financial institutions. Available capacity under these programs is dependent upon the level of our trade accounts receivable eligible to be sold into these programs and the financial institutions’ willingness to purchase such receivables. In addition, certain of these programs also require that we continue to service, administer and collect the sold accounts receivable. At August 31, 2024 and November 30, 2023, we had a total of $1.0 billion and $864.6 million, respectively, of trade accounts receivable sold to and held by financial institutions under these programs. Discount fees for these programs totaled $16.4 million and $49.0 million in the three and nine months ended August 31, 2024, respectively, and $12.5 million and $36.2 million in the three and nine months ended August 31, 2023, respectively.

Previous wording

In January 2023, the Board of Directors authorized a three-year $1.0 billion share repurchase program. In March 2024, the Board of Directors authorized a new $2.0 billion share repurchase program, supplementing the amount remaining under the existing program, pursuant to which we may repurchase our outstanding common stock from time to time in the open market or through privately negotiated transactions, including pursuant to one or more Rule 10b5-1 trading plans adopted in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934. The March 2024 share repurchase authorization does not have an expiration date. We repurchased 2.3 million shares of common stock for $254.2 million and 4.2 million shares for $453.4 million in the three and six months ended May 31, 2024, respectively and 0.7 million shares for $60.0 million and 1.8 million shares for $174.8 million during the three and six months ended May 31, 2023, respectively. As of May 31, 2024, we had $1.9 billion available for future repurchases of our common stock. For additional information on our share repurchase program, see Note 5 - Stockholders' Equity to the Consolidated Financial Statements included in Part I, Item 1 of this Report.

Current wording

In January 2023, the Board of Directors authorized a three-year $1.0 billion share repurchase program. In March 2024, the Board of Directors authorized a new $2.0 billion share repurchase program, supplementing the amount remaining under the existing program, pursuant to which we may repurchase our outstanding common stock from time to time in the open market or through privately negotiated transactions, including pursuant to one or more Rule 10b5-1 trading plans adopted in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934. The March 2024 share repurchase authorization does not have an expiration date. We repurchased 0.5 million shares of common stock for $56.5 million and 4.7 million shares for $509.9 million in the three and nine months ended August 31, 2024, respectively and 1.1 million shares for $103.0 million and 2.9 million shares for $277.8 million during the three and nine months ended August 31, 2023, respectively. As of August 31, 2024, we had $1.9 billion available for future repurchases of our common stock. For additional information on our share repurchase program, see Note 5 – Stockholders' Equity to the Consolidated Financial Statements included in Part I, Item 1 of this Report.

Previous wording

During the six months ended May 31, 2024, there were no material changes to our critical accounting policies and estimates previously disclosed in our Annual Report on Form 10-K for the fiscal year ended November 30, 2023.

Current wording

During the nine months ended August 31, 2024, there were no material changes to our critical accounting policies and estimates previously disclosed in our Annual Report on Form 10-K for the fiscal year ended November 30, 2023.