FinanceLooker

Excrept from filing document 2024-11-30

The aggregate market value of Common Stock held by non affiliates of the registrant based upon the closing sale price on the New York Stock Exchange as of May 31 2024 the last business day of the registrant s most recently completed second fiscal quarter was 10 978 333 656 Shares held by each executive officer director and by each person who owns 10 or more of the outstanding Common Stock have been excluded in that such persons may be deemed to be affiliates This determination of affiliate status is not necessarily a conclusive determination for other purposes
Items 10 as to directors and Delinquent Section 16 a Reports if any 11 12 as to Beneficial Ownership 13 and 14 of Part III incorporate by reference information from the registrant s proxy statement to be filed with the Securities and Exchange Commission in connection with the solicitation of proxies for the registrant s 2025 Annual Meeting of Stockholders to be held on April 2 2025
When used in this Annual Report on Form 10 K this Report the words anticipates believes estimates expects intends allows can may could designed will and similar expressions are intended to identify forward looking statements These are statements that relate to future periods and include statements about our business model and our services our business and market strategy future growth demand our infrastructure our investment in our information technology or IT systems our co worker hiring and retention our revenue sources of revenue our gross margins our operating costs and results timing of payment the value of our inventory our competition our future needs and sources for additional financing contract terms relationships with our suppliers adequacy of our facilities our legal proceedings our operations foreign currency exchange rates and hedging activities our strategic acquisitions including anticipated cost savings and other benefits our goodwill seasonality of sales adequacy of our cash resources our debt and financing arrangements including our supplier finance programs the impact of any change to our credit rating interest rate risk and impact thereof cash held by our international subsidiaries and repatriation changes in fair value of derivative instruments our tax liabilities adequacy of our disclosure controls and procedures cybersecurity and cyberattacks impact of our pricing policies impact of economic and industry trends changes to the markets in which we compete impact of new reporting rules and accounting policies our estimates and assumptions impact of inventory repurchase obligations and commitments and contingencies our effective tax rates impact of any impairment of our goodwill and intangible assets human capital resources environmental and ESG initiatives and our share repurchase and dividend program Forward looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected These risks and uncertainties include but are not limited to those risks discussed herein and others including the buying patterns of our customers concentration of sales to large customers the loss or consolidation of one or more of our significant original equipment manufacturer or OEM suppliers or customers market acceptance of the products we assemble and distribute competitive conditions in our industry and their impact on our margins pricing and other terms with our OEM suppliers our ability to gain market share variations in supplier sponsored programs changes in our costs and operating expenses increased inflation dependence upon and trends in capital spending budgets in the IT industry fluctuations in general economic conditions changes in tax laws risks associated with our international operations uncertainties and variability in demand by our reseller and integration customers supply shortages or delays changes in value of foreign currencies and interest rates and other risk factors contained below under Part I Item 1A Risk Factors These forward looking statements speak only as of the date hereof We expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward looking statements contained herein to reflect any change in our expectations with regard thereto or any change in events conditions or circumstances on which any such statement is based unless otherwise required by law
In the sections of this Report entitled Business and Management s Discussion and Analysis of Financial Condition and Results of Operations all references to TD SYNNEX SYNNEX we us our or the Company mean TD SYNNEX Corporation and its subsidiaries except where it is made clear that the term means only the parent company or one of its segments
TD SYNNEX the TD SYNNEX Logo and all other TD SYNNEX company product and services names and slogans are trademarks or registered trademarks of TD SYNNEX Corporation Other names and marks are the property of their respective owners
We are a Fortune 100 corporation and a leading global distributor and solutions aggregator for the information technology IT ecosystem We serve a critical role bringing products from the world s leading and emerging technology vendors to market and helping our customers create solutions best suited to maximize business outcomes for their end user customers We aggregate and distribute IT hardware software and systems including personal computing devices and peripherals mobile phones and accessories printers server and datacenter infrastructure hybrid cloud security networking communications and storage solutions and system components We also design and deliver purpose built server storage and networking solutions for the hyperscale infrastructure market We operate in three reportable segments based on our geographic regions the Americas Europe and Asia Pacific and Japan APJ
We have been in business since 1980 and have headquarters in both Clearwater Florida and Fremont California We were originally incorporated in the State of California as COMPAC Microelectronics Inc in November 1980 and we changed our name to SYNNEX Information Technologies Inc in February 1994 We later reincorporated in the State of Delaware under the name of SYNNEX Corporation in October 2003 On March 22 2021 we entered into an agreement and plan of merger the Merger Agreement which provided that legacy SYNNEX Corporation would acquire legacy Tech Data Corporation a Florida corporation Tech Data through a series of mergers which would result in Tech Data becoming an indirect subsidiary of TD SYNNEX Corporation collectively the Merger The Merger was completed on September 1 2021 On October 22 2021 as a result of the Merger we filed with the Secretary of State of the State of Delaware a Certificate of Amendment to the Company s Restated Certificate of Incorporation to change our corporate name from SYNNEX Corporation to TD SYNNEX Corporation effective November 3 2021
Digital transformation and the migration to cloud computing is reshaping our industry enabling businesses and consumers to evaluate procure acquire and consume technology products and services in a variety of ways Hybrid models of IT consumption supporting both physical and virtual delivery methods are emerging as hardware and software based solutions become increasingly combined As a result customers are seeking greater integration of products services and solutions that tie technologies together Therefore we believe it is important to provide a broad end to end portfolio with deep capabilities across the computing continuum to help customers manage the increasingly complex IT ecosystem and deliver the solutions and business outcomes the market desires Our vision for the future is to be the vital solutions aggregator and orchestrator that connects the IT ecosystem
our company digitally through greater automation and advanced analytics which we believe will enhance the customer experience broaden our customer base increase sales and augment our presence in high growth technologies
We offer a comprehensive catalog of more than 200 000 technology products as measured by active SKU s from approximately 2 500 original equipment manufacturers OEM suppliers of traditional technologies such as personal computing devices mobile phones and accessories and strategic technologies such as cloud security data analytics AI and hyperscale infrastructure This enables us to offer comprehensive solutions to our reseller and retail customers We group the majority of our offerings into two primary solutions portfolios Endpoint Solutions and Advanced Solutions which are comprised of the following
Our Advanced Solutions portfolio primarily includes data center technologies such as hybrid cloud security storage networking servers software converged and hyper converged infrastructure and hyperscale infrastructure via our Hyve business
Our suppliers include leading IT systems system components and peripherals software communications and security equipment and networking equipment manufacturers We purchase these and other complementary products from our suppliers and sell them to our reseller and retail customers We perform a similar function for our distribution of licensed software products We provide our vendors with access to large and highly fragmented markets such as small and medium sized businesses SMB and serve as a variable cost effective route to market for our vendors by providing them with access to resellers and end users
Our primary OEM suppliers include Apple Inc Cisco Systems Inc Dell Inc Hewlett Packard Enterprise Company HP Inc International Business Machines Corporation Lenovo Group Ltd Microsoft Corporation and Samsung Electronics Co Ltd
We have distribution agreements with most of our suppliers including Apple Inc and HP Inc These agreements usually provide for nonexclusive distribution rights and pertain to specific geographic territories The agreements are also generally short term subject to periodic renewal and often contain provisions permitting termination by either our supplier or us without cause upon relatively short notice Our vendor agreements generally do not restrict us from selling similar products manufactured by competitors nor do they require us to sell a specified quantity of product As a result we have the flexibility to terminate or curtail sales of one product line in favor of another due to technological change pricing considerations product availability and customer demand or vendor distribution policies An OEM supplier that elects to terminate a distribution agreement will generally repurchase its products carried in our inventory
Our business subjects us to the risk that the value of our inventory will be affected adversely by suppliers price reductions or by technological changes affecting the usefulness or desirability of the products comprising our inventory Many of our OEM suppliers offer us limited protection from the loss in value of our inventory due to a supplier s price reduction or technological change Under many of these agreements we have a limited period of time to return or exchange products or claim price protection credits Historically price protection and stock rotation privileges as well as our inventory management procedures have helped reduce the risk of loss of inventory value We monitor our inventory levels and attempt to time our purchases to maximize our protection under supplier programs
Our products are marketed globally to an active reseller base of more than 150 000 customers Our reseller customers include value added resellers VARs corporate resellers government resellers system integrators direct marketers retailers and managed service providers MSPs Resellers are classified primarily by their end user customers End users include large corporations or enterprises federal state and local governments SMBs and individual consumers In addition resellers vary greatly in size and geographic reach Our reseller customers buy from us and other distributors Our larger reseller customers also buy certain products directly from OEM suppliers System integrators offer services in addition to product resale primarily in systems customization integration and deployment Retailers serve mostly individual end users and to a small degree small office home office customers We also provide systems design and integration solutions for data center servers and networking solutions built specific to our customers workloads and data center environments
We combine our core strengths in distribution with demand generation supply chain management and design and integration solutions to help our customers achieve greater efficiencies in time to market cost minimization real time linkages in the supply chain and aftermarket product support We also provide comprehensive IT solutions in key vertical markets such as government and healthcare and specialized service offerings that increase efficiencies in the areas of global computing components logistics services and supply chain management
One customer accounted for 12 11 and 10 of our total revenue in fiscal years 2024 2023 and 2022 respectively As of November 30 2024 and 2023 no single customer comprised more than 10 of the consolidated accounts receivable balance While we do not believe that the loss of any single customer would have a material adverse effect on us such loss could result in an adverse impact on certain of our businesses
Our business is characterized by low gross profit as a percentage of revenue or gross margin and low operating income as a percentage of revenue or operating margin The market for IT products has generally been characterized by declining unit prices and short product life cycles although unit prices for certain products have increased during certain periods due to factors such as supply chain constraints and inflation We set our sales price based on the market supply and demand characteristics for each particular product or bundle of products we distribute and services we provide Our gross margin has fluctuated annually due to changes in the mix of products we offer the percentage of revenue that is presented on a net basis customers we sell to incentives and rebates received from our OEM suppliers competition seasonality replacement of lower margin business inventory obsolescence and lower costs associated with increased efficiencies Generally when our revenue becomes more concentrated on limited products or customers our gross margin tends to decrease due to increased pricing pressure from OEM suppliers or reseller customers
We are highly dependent on the end market demand for IT products and on our partners strategic initiatives and business models This end market demand is influenced by many factors including the introduction of new IT products and software by OEM suppliers replacement cycles for existing IT products trends toward cloud computing and software as a service arrangements overall economic growth and general business activity A difficult and challenging economic environment may also lead to consolidation or decline in the IT industries and increased price based competition
We offer a variety of business process services to our customers These services can be purchased individually or in combination with others in the form of supply chain solutions and aftermarket product support We have sophisticated pick pack and ship operations which allows us to efficiently receive shipments from our OEM suppliers and quickly fill orders for our reseller and retail customers We generally stock or otherwise have access to the inventory of our OEM suppliers to satisfy the demands of our reseller and retail customers
We provide our customers with systems design and full rack integration solutions build to order and configure to order assembly capabilities We offer design integration test and other production value added solutions such as thermal testing power draw efficiency testing burn in quality and logistics support
We provide logistics support to our reseller customers such as outsourced fulfillment virtual distribution and direct ship to end users Other logistics support activities we provide include generation of customized shipping documents multi level serial number tracking for customized configured products and online order and shipment tracking We also offer full turn key logistics solutions designed to address the needs of large volume or specialty logistics services Our full turn key service offering is modular in nature and is designed to cover all aspects of the logistics life cycle including transportation management inventory optimization complementary product matching reverse logistics asset refurbishment and disposal and strategic procurement
We provide scalable depot repair services delivered by certified engineers and technicians that enable OEMs to maintain productivity participate in the circular economy and reduce costs Our depot repair services cover the full spectrum of products so OEMs can provide their customers comprehensive repair services without needing to dedicate their own resources to the task
Our customer management services are designed to support sales ecosystems including operations and customer success financing engineering business intelligence and IT training Using dedicated resources and an in house data analytics team we design customer centric distributor neutral solutions that keep customers engaged so OEMs can expand their reach and capture additional revenue opportunities
We provide cloud based solutions and services to our reseller customers to enable sales of and migration to technologies in a hosted environment to small and medium businesses Our proprietary cloud platform offers a complete package of cloud based solutions on a user friendly platform and allows our reseller customers and OEM suppliers to own the complete customer lifecycle through direct billing provisioning management and support Our solutions cover all end user customer needs including pure public cloud solutions in productivity and collaboration IaaS or Infrastructure as a Service PaaS or Platform as a Service SaaS or Software as a Service Security Mobility AI and other hybrid solutions Our dedicated cloud team comprising developers sales engineers and solutions specialists supports our reseller customers in the sales of these solutions
We maintain electronic data interchange EDI extensible markup language XML web based communication links and mobile applications with many of our reseller and retail customers These links improve the speed and efficiency of our transactions with our customers by enabling them to search for products check inventory availability and prices configure systems place and track orders receive invoices review account status and process returns We also have web based application software that allows our customers or their end user customers to order software and take delivery online In addition we use proprietary and industry standard application programming interfaces APIs to connect with OEMs and resellers providing dynamic transactional capabilities to our platforms
We offer our reseller customers various financing options including net terms third party leasing floor plan financing and letters of credit backed financing and arrangements where we collect payments directly from the end user We also lease products to our reseller customers and their end users and provide DaaS or Device as a Service to end users The availability and terms of our financing services are subject to our credit policies or those of third party financing providers to our customers
We offer our OEM suppliers a full range of marketing activities targeting resellers system integrators and retailers including direct mail external media advertising reseller product training targeted telemarketing campaigns national and regional trade shows trade groups database analysis print on demand services and web based marketing
We serve our large commercial government reseller and retail customers through dedicated sales professionals Our sales professionals receive comprehensive training on our policies procedures and the technical specifications of products and attend additional training offered by our vendors We market to smaller resellers and OEM suppliers through dedicated regional sales teams In addition we have dedicated product management and business development specialists that focus on the sale and promotion of products and services of selected suppliers or for specific end market verticals These specialists are also directly involved in establishing new relationships with leading OEM suppliers to create demand for their products and services and with resellers for their customers needs We also have a direct sales approach for our design and integration solutions business Our sales and marketing professionals are complemented by members of our executive management team who are integral in identifying potential new customer opportunities promoting sales growth and ensuring customer satisfaction We have sales and marketing professionals in close geographic proximity to our customers and OEM suppliers
We operate 158 distribution and administrative facilities globally Our distribution processes are highly automated to ensure timely order fulfillment and accuracy and enhance the efficiency of our warehouse operations and back office administration Our distribution facilities are geographically dispersed to be near reseller customers and their end users This decentralized regional strategy enables us to benefit from lower shipping costs and shorter delivery lead times to our customers Furthermore we track multiple performance measurements to continuously improve the efficiency and capabilities of our distribution operations Our regional locations also enable us to make local deliveries and provide will call fulfillment to more customers than if our distribution operations were more centralized resulting in better service to our customers To optimize response to short term changes in order activity our workforce is comprised of permanent and temporary co workers
Our proprietary IT systems and processes enable us to automate many of our distribution operations We use radio frequency and bar code scanning technologies in our warehouse operations to maintain real time inventory records facilitate strong inventory control and improve the speed and accuracy of order fulfillment
To enhance the accuracy of our distribution order fulfillment and protect our inventory from shrinkage our distribution systems also incorporate numerous controls These controls include robotic automation order weight checks bar code scanning and serial number profile verification We also use digital video imaging to record both receiving and shipping activities These images and other warehouse and shipping data are available online to our customer service representatives enabling us to quickly respond to order inquiries by our customers
We operate our principal systems design and integration solutions facilities in the United States with additional locations in the United Kingdom and China We generally design and integrate IT systems data center servers and networking solutions and IT appliances by incorporating system components either purchased directly from vendors obtained from our distribution inventory or through a customer owned procurement model Some of our design and integration solutions facilities are ISO 9001 2015 and ISO 14001 2015 certified
Approximately 47 of our consolidated revenue for fiscal year 2024 was generated by our international operations Our end market strategy is to continue expanding internationally on a selective basis in order to provide our distribution capabilities to OEM suppliers in locations that meet their regional requirements
Sales and cost concentrations in foreign jurisdictions subject us to various risks including the impact of changes in the value of these foreign currencies relative to the U S dollar which in turn can impact reported sales
Our operating results are affected by the seasonality of the IT products industry We have historically experienced slightly higher sales in our first and fourth fiscal quarters due to patterns in capital budgeting federal government spending and purchasing cycles of our customers and end users These historical patterns may not be repeated in subsequent periods
Product cost represents our single largest expense and IT product inventory is one of our largest working capital investments Furthermore product procurement from our OEM suppliers is a highly complex process that involves incentive programs rebate programs price protection volume and early payment discounts and other arrangements Consequently efficient and effective purchasing operations are critical to our success
Our purchasing group works closely with many areas of our organization especially our product managers who work closely with our OEM suppliers and our sales force to understand the volume and mix of IT products that should be purchased In addition depending on the business unit the purchasing group utilizes either internally developed proprietary information systems or commercial off the shelf applications that further aid in forecasting future product demand based on several factors including historical sales levels expected product life cycle and current and projected economic conditions We may also rely on our receipt of good faith non binding customer forecasts We maintain electronic connections with our OEM suppliers to send purchase orders receive purchase order status and receive notification once the product has shipped from our supplier Our information system also tracks warehouse and channel inventory levels and open purchase orders on a real time basis enabling us to stock inventory at a regional level closer to the customer as well as to actively manage our working capital resources This level of automation promotes greater efficiencies of inventory management by replenishing and turning inventory as well as placing purchase orders on a more frequent basis Furthermore our system tool also allows for automated checks and controls to prevent the generation of inaccurate orders
Managing our OEM supplier incentive programs is another critical function of our purchasing and product management teams We also attempt to maximize the benefits of incentives rebates and volume and early payment discounts that our OEM suppliers offer us We carefully evaluate these supplier incentive benefits relative to our product handling and carrying costs so that we do not over invest in our inventory We also closely monitor inventory levels on a product by product basis and plan purchases to take advantage of OEM supplier provided price protection By managing inventory levels and monitoring customer purchase patterns at each of our regional distribution facilities we believe we can minimize our shipping costs by stocking products near our resellers and retailers and their end user customers
We offer various financing options to our customers as well as prepayment credit card and cash on delivery terms In providing credit terms to our reseller and retail customers we closely and regularly monitor their creditworthiness through our information systems their credit ratings information and periodic detailed credit file reviews by our financial services staff We have also purchased credit insurance in most geographies to further control customer credit risks Finally we establish reserves for estimated credit losses in the normal course of business based on the overall quality and aging of our accounts receivable portfolio the existence of credit insurance and specifically identified customer risks
We also sell to certain reseller customers pursuant to third party floor plan financing The expenses charged by these financing companies are subsidized either by our OEM suppliers or paid by us We receive payment from these financing companies based on agreed upon terms that depend on the specific arrangement
Our IT systems manage the entire order cycle including processing customer orders customer billing and payment tracking These IT systems make our operations more efficient and provide visibility into our operations We believe our IT infrastructure is scalable to support further growth We continue to enhance and invest in our IT systems to improve product and inventory management streamline order and fulfillment processes and increase operational flexibility
To allow our customers and suppliers to communicate and transact business with us in an efficient and consistent manner we have implemented a mix of proprietary and off the shelf software programs that integrate our IT systems with those of our customers and suppliers In particular we maintain EDI XML API and web based communication links and mobile platform applications with many of our reseller and retail customers to enable them to search for products check real time pricing inventory availability and specifications place and track orders receive invoices and process returns
We operate in a highly competitive global environment The IT product industry is characterized by intense competition based primarily on product availability credit terms and availability price speed and accuracy of delivery effectiveness of sales and marketing programs ability to tailor specific solutions to customer needs quality and depth of product lines and training pre and post sale technical support flexibility and timely response to design changes technological capabilities and product quality service and support We compete with a variety of regional national and international IT product distributors and manufacturers
We compete against several distributors in the Americas market including Arrow Electronics Inc Arrow Ingram Micro Inc and ScanSource Inc and regional distributors The competitive environment in Europe is more fragmented with market share spread among several regional and local competitors such as ALSO Holding and Esprinet as well as international distributors such as Ingram Micro Inc Westcon Comstor and Arrow The competitive environment in APJ is fragmented with market share spread among international distributors such as Ingram Micro Inc and Westcon Comstor as well as several regional distributors such as VSTECS Holdings Ltd and Synnex Technology International Corp a separate entity from the Company We also face competition from our OEM suppliers that sell directly to resellers retailers and end users The distribution industry has historically undergone and continues to undergo consolidation We have participated in this consolidation and expect to continue to assess opportunities
As we enter new business areas we may encounter increased competition from our current competitors and or new competitors We constantly seek to expand our business into areas primarily related to our core distribution as well as other support logistics and related value added services both organically and through strategic acquisitions
As of November 30 2024 we had over 23 000 full time co workers Given the variability in our business and the quick response time required by customers it is critical that we are able to rapidly ramp up and ramp down our operational capabilities to maximize efficiency As a result we use temporary or contract workers who totaled approximately 5 500 as of November 30 2024 on a full time equivalent basis Certain of our co workers in various countries outside of the
We are committed to fostering a diverse and inclusive workplace that attracts and retains exceptional talent Through ongoing co worker development comprehensive compensation and benefits and a focus on health safety and co worker well being we strive to help our co workers in all aspects of their lives so they can do their best work
We are committed to being unconditionally inclusive to capture the ideas and perspectives that fuel innovation and enable our workforce customers and communities to succeed in the digital age We accomplish this through a focus on our core values of inclusion integrity collaboration and excellence and we strive to create an inclusive and welcoming environment where people can bring their authentic selves to work Our commitment to diversity and inclusion starts at the top with a highly skilled and diverse Board of Directors Women represent 40 of our Board of Directors including our chair of the board 28 of our leadership at the employee director level and above and 43 of our total co worker base Additionally 60 of our Board of Directors is ethnically diverse or gender diverse We are committed to increasing diversity in our workforce We aim to increase representation of people who identify as women to 50 of our co worker base and 40 of our leadership roles by 2030 in addition to increasing representation of underrepresented groups in 2025
We believe people should be paid for what they do and how they do it regardless of their gender race or other personal characteristics To deliver on that commitment we benchmark and set pay ranges based on market data and consider factors such as a co worker s role and experience the location of their job and their performance We also review our compensation practices both in terms of our overall workforce and individual co workers to ensure our pay is fair and equitable Our practice includes reviewing the compensation of co workers to ensure consistent pay practices by conducting a pay equity analysis annually comparing co workers in the same role within a country or location As we move forward we aim to improve our pay equity position across the globe through our compensation and benefits programs as well as promotion practices to ensure fairness for all co workers Each year we will assess our progress and make adjustments to improve our pay equity position
We require a talented workforce and are committed to providing total rewards that are market competitive and performance based driving innovation and operational excellence Our compensation programs practices and policies reflect our commitment to reward short and long term performance that aligns with and drives stockholder value Total direct compensation is generally positioned within a competitive range of the market median with differentiation based on performance experience tenure and skills to attract and retain key talent
We regularly collect feedback to measure co worker engagement to better understand and improve the co worker experience and to identify opportunities to continually strengthen our culture We want to know what is working well what we can do better and how well our co workers understand and are practicing our cultural values
Human capital development underpins our efforts to execute our strategy and continue to distribute design integrate and market innovative products and services We continually invest in our co workers career growth and provide co workers with a wide range of development opportunities including face to face virtual social and self directed learning mentoring coaching and external development
The physical health financial well being life balance and mental health of our co workers is vital to our success Our environmental health and safety leadership team uses our global injury and illness reporting system to assess trends regionally and worldwide as a part of quarterly reviews Our warehouse and integration facilities continue to represent our most significant health and safety risks Managing and reducing risks at these facilities remains a focus and injury rates continue to be low We also sponsor a wellness program designed to enhance physical financial and mental well being for all our co workers Throughout the year we encourage healthy behaviors through regular communications educational sessions voluntary progress tracking wellness challenges and other incentives
We remain focused on protecting our planet and reducing our global carbon footprint In support of this TD SYNNEX had previously committed to the Science Based Targets Initiative SBTi Business Ambition Pledge with the goal to achieve net zero greenhouse gas GHG emissions by 2045 In support of that commitment in fiscal year 2023 we submitted near term and long term emissions reduction targets to SBTi for validation SBTi approved these targets during fiscal year 2024
We are committed to embedding a culture of sustainability across our organization increasing our sustainability initiatives and supporting our customers and vendors We engage in and continue to explore a range of sustainability projects that support our decarbonization journey such as renewables energy conservation measures environmental management systems and waste minimization projects We have a Corporate Citizenship Steering Committee in place to help drive our strategy around these efforts in addition to multiple working groups that focus on areas such as the Circular Economy and Sustainable Transportation Logistics
Additional human capital and environmental information was included in our fiscal year 2023 Corporate Citizenship Report which is available on our website Information contained in our Corporate Citizenship Report and website is not deemed part of this Annual Report on Form 10 K
Our website is http www tdsynnex com We make available free of charge on or through our website our Annual Report on Form 10 K quarterly reports on Form 10 Q current reports on Form 8 K and amendments to those reports if any or other filings filed or furnished pursuant to Section 13 a or 15 d of the Exchange Act as soon as reasonably practicable after electronically filing or furnishing these reports with the Securities and Exchange Commission SEC Information contained on our website is not a part of this Report We have adopted a code of conduct applicable to our co workers including our principal executive financial and accounting officers and it is available free of charge on our website s investor relations page
The SEC maintains an Internet site at http www sec gov that contains our Annual Report on Form 10 K quarterly reports on Form 10 Q current reports on Form 8 K and amendments to those reports if any or other filings filed or furnished pursuant to Section 13 a or 15 d of the Exchange Act and our proxy and information statements
Mr Zammit joined Tech Data in February 2017 as President Europe through Tech Data s acquisition of Avnet s Technology Solutions business and served in this capacity until the Merger in September 2021 when he also assumed the role of President APJ which he served until his appointment as Chief Operating Officer effective January 1 2024 Mr Zammit served as Chief Operating Officer until his appointment as Chief Executive Officer and as a member of our Board of Directors effective September 1 2024 Prior to joining our company Mr Zammit was employed for more than twenty years at Avnet Inc Nasdaq AVT an electronic components distribution company From January 2015 to January 2017 Mr Zammit served as Global President of Avnet Technology Solutions Prior to that position from October 2006 until January 2015 Mr Zammit served as President of Avnet Electronics Marketing EMEA From 1993 to 2006 Mr Zammit served in management positions of increasing responsibilities Prior to joining Avnet Mr Zammit was employed by Arthur Andersen from 1989 to 1993 Mr Zammit holds a Masters in Business Administration equivalent from Paris Business School ESLSCA
is our Chief Financial Officer and has served in this capacity since April 2013 Prior to joining TD SYNNEX Mr Witt was Senior Vice President of Finance and Controller with FedEx Freight Inc a freight services company During his fifteen year tenure with FedEx Corporation NYSE FDX a multinational transportation e commerce and business services company Mr Witt held progressive financial and operational roles Prior to FedEx Corporation he held accounting and finance leadership positions including five years with KPMG LLP a professional services firm as an audit manager for banking and transportation clients Mr Witt holds a Bachelor of Business Administration in Finance from Pacific Lutheran University and a Masters in Accounting from Seattle University and is a Certified Public Accountant
has served as a member of our Board of Directors since February 2012 and as our Hyve Solutions Executive since September 2021 Mr Polk joined TD SYNNEX in 2002 and served as President and Chief Executive Officer of TD SYNNEX from March 2018 to September 2021 Prior to that position he served as Chief Operating Officer Chief Financial Officer and Senior Vice President of Corporate Finance of TD SYNNEX In conjunction with the Merger in September 2021 Mr Polk was appointed as Executive Chair of the Board of Directors and he served as Executive Chair until September 1 2023
is our Chief Legal Officer Mr Vetter joined Tech Data in June 1993 as Vice President General Counsel and was promoted to Corporate Vice President General Counsel in April 2000 In March 2003 he was promoted to Senior Vice President and effective July 2003 was appointed Secretary In January 2017 Mr Vetter was promoted to Executive Vice President Chief Legal Officer and in conjunction with the Merger in September 2021 he assumed this role for TD SYNNEX Prior to joining Tech Data Mr Vetter was employed by the law firm of Robbins Gaynor Bronstein P A from 1984 to 1993 most recently as a partner Mr Vetter is a member of the Florida Bar Association and holds Bachelor of Arts degrees in English and Economics from Bucknell University and a Juris Doctorate Degree from the University of Florida
is our Chief Business Officer Prior to this role Mr Leung served as Senior Vice President General Counsel and Corporate Secretary for TD SYNNEX from May 2001 until the Merger in September 2021 Mr Leung joined TD SYNNEX in November 2000 as Corporate Counsel Prior to TD SYNNEX Mr Leung was an attorney at the law firm of Paul Hastings Janofsky Walker LLP Mr Leung received a Bachelor of Arts degree from the University of California Davis in International Relations and his Juris Doctor degree from the University of Minnesota Law School
is our Chief Accounting Officer Mr Henry joined Tech Data in 2015 as the Vice President of Corporate Accounting In November 2020 he was promoted to Senior Vice President Chief Accounting Officer and in conjunction with the Merger in September 2021 he assumed this role for TD SYNNEX Prior to joining Tech Data Mr Henry served as a public accountant with both Arthur Andersen LLP and PricewaterhouseCoopers LLP and as an accountant for DirecTV and AECOM NYSE ACM Mr Henry is a Certified Public Accountant in the State of California and a graduate of California State University in Fresno with a degree in Accounting
The following discussion is divided into several sections The first section which begins immediately following this paragraph captioned Risks Related to Our Business and Operations discusses some of the risks that may affect our business results of operations and financial condition The second section captioned Risks Related to Our Indebtedness discusses our debt related risks
The third section captioned Risks Related to our Industry discusses risks impacting businesses operating in our industry The fourth section captioned Risks Related to the Macro Economic and Regulatory Environment relates to risks which broadly affect companies operating in regions in which we operate You should carefully review all of these sections as well as our consolidated financial statements and notes thereto and the other information appearing in this report for important information regarding risks that affect us These risk factors should be considered in connection with evaluating the forward looking statements contained in this Report because these factors could cause the actual results and conditions to differ materially from those projected in the forward looking statements Before you invest in our Company you should know that making such an investment involves some risks including the risks described below The risks that have been highlighted here are not the only ones that we face If any of the risks actually occur our business financial condition and results of operations could be negatively affected In that case the trading price of our common stock could decline and you may lose all or part of your investment
Although we attempt to control our expense levels these levels are based in part on anticipated revenue Therefore we may not be able to control spending in a timely manner to compensate for any unexpected revenue shortfall
Our operating results are affected by the seasonality of the IT products and services industry We have historically experienced slightly higher sales in our first and fourth fiscal quarters due to patterns in the capital budgeting federal government spending and purchasing cycles of our customers and end users These historical patterns may not be repeated in subsequent periods You should not rely on period to period comparisons of our operating results as an indication of future performance In future years our operating results may be below our expectations or those of our public market analysts or investors which would likely cause our share price to decline
We are subject to uncertainties and variability in demand by our customers which could decrease revenue and adversely affect our operating results and we have customer contracts with provisions that could cause fluctuations in our revenue
We typically sell to our customers on a purchase order basis rather than pursuant to long term contracts or contracts with minimum purchase requirements Consequently our sales are subject to demand variability by our customers The level and timing of orders placed by our customers vary for a variety of reasons including seasonal buying by end users the introduction of new hardware and software technologies and general economic conditions Customers submitting a purchase order may cancel reduce or delay their orders If we are unable to anticipate and respond to the demands of our reseller retail and design and integration solutions customers we may lose customers because we have an inadequate supply of products or we may have excess inventory either of which could harm our business financial position and operating results
With regard to our design and integration solutions customers unique parts are purchased based both on customer purchase orders and forecasted demand We have limited protection against excess inventory should anticipated demand not materialize
We depend on a limited number of OEMs to supply the IT products and services that we sell and the loss of or a material change in our business relationship with a major OEM supplier could adversely affect our business financial position and operating results
of our total revenue for fiscal years 2024 2023 and 2022 respectively and sales of HP Inc products and services comprised approximately 10 of our total revenue for fiscal year 2022 Our OEM supplier agreements typically are short term and may be terminated without cause upon short notice OEM supplier agreements are often established at a regional or country level and these relationships may change in some countries or regions and not others The loss or deterioration of our relationship with Apple Inc HP Inc or any other major OEM supplier the authorization by OEM suppliers of additional distributors the sale of products by OEM suppliers directly to our reseller and retail customers and end users or our failure to establish relationships with new OEM suppliers or to expand the distribution and supply chain services that we provide OEM suppliers could adversely affect our business financial position and operating results In addition OEM suppliers may face liquidity or solvency issues that in turn could negatively affect our business and operating results
Our business is also highly dependent on the terms provided by our OEM suppliers Generally each OEM supplier has the ability to change the terms and conditions of its distribution agreements such as reducing the amount of price protection and return rights or reducing the level of purchase discounts incentive rebates scope of the geographic area in which we can sell and marketing programs available to us
Additionally we have certain arrangements with third party financial institutions Supplier Finance Programs which facilitate the participating OEM suppliers ability to sell their accounts receivable from us to third party financial institutions at the sole discretion of these OEM suppliers As part of these arrangements we generally receive more favorable payment terms from the participating OEM suppliers Significant changes in these Supplier Finance Programs or in other vendor payment terms could negatively impact our liquidity and financial condition
From time to time we may conduct business with a supplier without a formal agreement because the agreement has expired or was otherwise terminated In such case we are subject to additional risk with respect to products warranties and returns and other terms and conditions If we are unable to pass the impact of these changes through to our reseller and retail customers our business financial position and operating results could be adversely affected
As a result of significant price competition in the IT products and services industry our gross margins are low and we expect them to continue to be low in the future Increased competition arising from industry consolidation and low demand for certain IT products and services may hinder our ability to maintain or improve our gross margins These low gross margins magnify the impact of variations in revenue and operating costs on our operating results A portion of our operating expenses are relatively fixed and planned expenditures are based in part on anticipated orders that are forecasted with limited visibility of future demand As a result we may not be able to reduce our operating expenses to sufficiently mitigate any further reductions in gross profit or margin in the future If we cannot proportionately decrease our cost structure in response to competitive price pressures our business and operating results could suffer
We also receive purchase discounts and rebates from OEM suppliers based on various factors including sales or purchase volume and breadth of customers A decrease in revenue could negatively affect the level of volume rebates received from our OEM suppliers and thus our gross margin Because some rebates from OEM suppliers are based on percentage increases in sales of products it may become more difficult for us to achieve the percentage growth in sales required for larger discounts due to the current size of our revenue base A decrease or elimination of purchase discounts and rebates from our OEM suppliers would adversely affect our business and operating results
We are subject to the risk that our inventory value may decline and protective terms under our OEM supplier agreements may not adequately cover the decline in value which in turn may harm our business financial position and operating results
The IT products industry is subject to rapid technological change new and enhanced product specification requirements and evolving industry standards These changes may cause inventory on hand to decline substantially in value or to rapidly become obsolete Most of our OEM suppliers offer limited protection from the loss in value of inventory For example we can receive a credit from many OEM suppliers for products held in inventory in the event of a supplier price reduction In addition we have a limited right to return a certain percentage of purchases to most OEM suppliers These policies are often subject to time restrictions and do not protect us in all cases from declines in inventory value In addition our OEM suppliers may become unable or unwilling to fulfill their protection obligations to us The decrease or elimination of price protection or the inability of our OEM suppliers to fulfill their protection obligations could lower our gross margins and cause us to record inventory write downs If we are unable to manage our inventory with our OEM suppliers with a high degree of precision we may have insufficient product supplies or we may have excess inventory resulting in inventory write downs either of which could harm our business financial position and operating results
We depend on OEM suppliers to maintain an adequate supply of products to fulfill customer orders on a timely basis and any supply shortages or delays could cause us to be unable to timely fulfill orders which in turn could harm our business financial position and operating results
Our ability to obtain particular products in the required quantities and to fulfill reseller and retail customer orders on a timely basis is critical to our success In most cases we have no guaranteed price or delivery agreements with our OEM suppliers We have experienced supply shortages of certain products as a result of strong demand or problems experienced by our OEM suppliers If shortages or delays persist the price of those products may increase or the products may not be available at all Such delays could also impact our ability to procure critical components required to complete customer orders In addition our OEM suppliers may decide to distribute or to substantially increase their existing distribution business through other distributors their own dealer networks or directly to resellers retailers or end users Accordingly if we are not able to secure and maintain an adequate supply of products to fulfill our customer orders on a timely basis our business financial position and operating results could be adversely affected
Our business experiences customer concentration from time to time One customer accounted for 12 11 and 10 of our total revenue in fiscal years 2024 2023 and 2022 respectively The loss of one of our significant customers could result in an adverse impact on our business For example our systems design and integration solutions product line has significant customer concentration requires investments in working capital and infrastructure and has customer contracts that often offer limited or no volume guarantees or protection for end of life investments The loss of a customer or reduction in order volumes could adversely impact our revenue provision for inventory losses the absorption of fixed overhead costs and our future expansion plans The systems design and integration solutions business operates in a competitive environment Volumes can fluctuate based on customer demand delivery quality and the competitive landscape Our ability to deliver customized solutions on a timely basis is critical to our success Any delay could impact our competitive position and result in loss of customer orders which could impact our financial position and operating results
We have pursued and intend to continue to pursue strategic acquisitions or investments in new markets and may encounter risks associated with these activities which could harm our business and operating results
We have in the past pursued and in the future expect to pursue acquisitions of or investments in businesses and assets in new markets either within or outside the IT products and services industry that complement or expand our existing business Our acquisition strategy involves a number of risks including
We may incur additional costs and certain redundant expenses in connection with our acquisitions and investments which may have an adverse impact on our operating margins Future acquisitions may result in dilutive issuances of equity securities the incurrence of additional debt large write offs a decrease in future profitability or future losses The incurrence of debt in connection with any future acquisitions could restrict our ability to obtain working capital or other financing necessary to operate our business Our recent and future acquisitions or investments may not be successful and if we fail to realize the anticipated benefits of these acquisitions or investments our business and operating results could be harmed
We recorded substantial goodwill and both finite and indefinite lived intangible assets as a result of our previous acquisitions including the Merger We review our goodwill and intangible assets for impairment when events or changes in circumstances indicate the carrying value may not be recoverable We assess whether there has been an impairment in the value of goodwill and indefinite lived intangible assets at least annually Factors that may be considered a change in circumstances indicating that the carrying value of our goodwill or intangible assets may not be recoverable include declines in stock price market capitalization or cash flows and slower growth rates in our industry Our annual goodwill impairment testing indicated no goodwill impairments for any of the years presented We could be required to record a significant charge to earnings in our financial statements during the period in which any impairment of our goodwill or intangible assets is determined negatively impacting our results of operations
Because of the capital intensive nature of our business we need continued access to capital which if not available to us or if not available on favorable terms could harm our ability to operate or expand our business
Our business requires significant levels of capital to finance accounts receivable and product inventory that is not financed by trade creditors If cash from available sources is insufficient proceeds from our accounts receivable securitization and revolving credit programs are limited or cash is used for unanticipated needs we may require additional capital sooner than anticipated
In the event we are required or elect to raise additional funds we may be unable to do so on favorable terms or at all and may incur expenses in raising the additional funds Our current and future indebtedness could adversely affect our operating results and severely limit our ability to plan for or react to changes in our business or industry We could also be limited by financial and other restrictive covenants in our securitization or credit arrangements including limitations on our borrowing of additional funds and issuing dividends Furthermore the cost of securitization or debt financing could significantly increase in the future making it cost prohibitive to securitize our accounts receivable or borrow which could force us to issue new equity securities If we issue new equity securities existing stockholders may experience dilution or the new equity securities may have rights preferences or privileges senior to those of existing holders of common stock If we cannot raise funds on acceptable terms we may not be able to take advantage of future opportunities or respond to competitive pressures or unanticipated requirements Any inability to raise additional capital when required could have an adverse effect on our business and operating results
We extend credit to our customers for a significant portion of our sales to them and they have a period of time generally 30 days after the date of invoice to make payment However in certain cases for some of our customers we offer longer terms of payment As a result we are subject to the risk that our customers will not pay on time or at all Our credit exposure risk may increase due to financial difficulties or liquidity or solvency issues experienced by our customers resulting in their inability to repay us The liquidity or solvency issues may increase as a result of an economic downturn increases in costs including due to inflation or higher interest rates or a decrease in IT spending by end users If we are unable to collect payments in a timely manner from our customers due to changes in financial or economic conditions or for other reasons and we are unable to collect under our credit insurance policies we may write off the amount due from the customers These write offs may result in credit insurance being more expensive and on terms that are less favorable to us and may negatively impact our ability to utilize accounts receivable based financing In addition the failure of customers to pay within a specified time period after the date of an invoice could result in defaults under our accounts receivable securitization program These circumstances could negatively impact our cash flow and liquidity position or result in the cross default to our other indebtedness and acceleration of the repayment of our indebtedness Further we are exposed to higher collection risk as we continue to expand internationally where the payment cycles are generally longer and the credit rating process may not be as robust as in the United States and where our access to accounts receivable financing is more limited
We depend on IT and telecommunications systems and the Internet for our operations These systems support a variety of functions including inventory management order processing shipping shipment tracking and billing
Failures or significant downtime of our IT or telecommunications systems has in the past and could in the future prevent us from taking customer orders printing product pick lists shipping products billing customers and handling call volume Sales also may be affected if our reseller and retail customers are unable to access our pricing and product availability information We also rely on the Internet and in particular EDI and XML for a large portion of our orders and information exchanges with our OEM suppliers and reseller and retail customers The Internet and individual websites have experienced a number of disruptions slowdowns and security breakdowns some of which were caused by organized attacks If we were to experience a future security breakdown disruption or breach that compromised sensitive information it could harm our relationship with our OEM suppliers and reseller and retail customers Disruption of our website or the Internet in general could impair our order processing or more generally prevent our OEM suppliers and reseller and retail customers from accessing information A significant increase in our IT costs or a temporary or permanent loss of our IT systems could harm our relationships with our customers The occurrence of any of these events could have an adverse effect on our operations and financial results
Because of the experience of our key personnel in the IT industry and their technological and industry expertise if we were to lose any of our key personnel it could inhibit our ability to operate and grow our business successfully
We are dependent in large part on our ability to retain the services of our key senior executives and other technological and industry experts and personnel Except for certain of our key executives we generally do not have employment agreements with our co workers We also do not carry key person insurance coverage for any of our key executives We compete for qualified senior management and technical personnel The loss of or inability to hire key executives or qualified co workers could inhibit our ability to operate and grow our business successfully
From time to time we have experienced incidents of theft at various facilities water damages to our properties and other casualty events These types of incidents may make it more difficult or expensive for us to obtain insurance coverage in the future Also the same or similar incidents may occur in the future for which we may not have sufficient insurance coverage or policy limits to be fully compensated for the loss which may have an adverse effect on our business and financial results
We may become involved in intellectual property or other disputes that could cause us to incur substantial costs divert the efforts of our management and require us to pay substantial damages or require us to obtain a license which may not be available on commercially reasonable terms if at all
From time to time we receive notifications alleging infringements of intellectual property rights allegedly held by others relating to our business or the products we sell or integrate for our OEM suppliers and others Litigation with respect to patents or other intellectual property matters could result in substantial costs and diversion of management and other resources and could have an adverse effect on our business Although we generally have various levels of indemnification protection from our OEM suppliers and design and integration solutions customers in many cases any indemnification to which we may be entitled is subject to maximum limits or other restrictions
In addition we have developed proprietary IT systems mobile applications and cloud based technology and acquired technologies that play an important role in our business If any infringement claim is successful against us and if indemnification is not available or sufficient we may be required to pay substantial damages or we may need to seek and obtain a license of the other party s intellectual property rights We may be unable to obtain such a license on commercially reasonable terms if at all
We are from time to time involved in other litigation in the ordinary course of business which has and may include claims with respect to antitrust mergers and acquisitions and other matters In the ordinary course of business we also receive inquiries from and have discussions with government entities regarding the compliance of our contracting and sales practices with laws and regulations We may not be successful in defending these or other claims Regardless of the outcome litigation could result in substantial expense and could divert the efforts of our management Allegations made in the course of regulatory or legal proceedings may also harm our reputation regardless of whether there is merit to such claims Furthermore because litigation and the outcome of regulatory proceedings are inherently unpredictable our business financial condition or operating results could be materially affected by an unfavorable resolution of one or more of these proceedings claims demands or investigations We do not expect that the ultimate resolution of these matters will have a material adverse effect on our consolidated financial position However the resolution of certain of these matters could be material to our operating results for any particular period For further information regarding our current litigation matters refer to
Our worldwide operations could be subject to natural disasters adverse weather conditions global pandemics and other business disruptions which could seriously harm our revenue and financial condition and increase our costs and expenses We have significant operations in our facilities located in the Americas Europe and APJ Certain of our facilities including our corporate headquarters locations in Clearwater Florida and Fremont California are located in geographic areas that heighten our exposure to hurricanes tropical storms earthquakes and other severe weather events Any prolonged disruption in the operations of our facilities whether due to technical difficulties power failures break ins destruction damage to or prolonged closure of the facilities as a result of a natural disaster fire pandemic or any other reason could harm our operating results If there are related disruptions in local or international supply chains we may experience supply shortages or delays in receiving products from our OEM suppliers or experience other delays in shipping to our customers If we are unable to fulfill customer requirements in a timely manner this could harm our operating results We currently have a disaster recovery plan and carry property damage and business interruption insurance however they may not be sufficient to compensate for losses that may occur
The terms of our debt arrangements impose restrictions on our ability to operate which in turn could negatively affect our ability to respond to business and market conditions and therefore could have an adverse effect on our business and operating results
Borrowings to the Consolidated Financial Statements in Item 8 lines of credit and our accounts receivable securitization program excluding trade payables The terms of one or more of the agreements under which this indebtedness was incurred may limit or restrict among other things our or our subsidiaries as applicable ability to
We are also required to maintain specified financial ratios and satisfy certain financial condition tests under certain of our debt facilities Our inability to meet these ratios and tests could result in the acceleration of the repayment of the related debt termination of the applicable facility an increase in our effective cost of funds or the cross default of other debt facilities and securitization arrangements As a result our ability to operate may be restricted and our ability to respond to business and market conditions may be limited which could have an adverse effect on our business and operating results
Our ability to make scheduled debt payments or to refinance our debt obligations depends on our financial and operating performance which is subject to prevailing economic and competitive conditions and to certain financial business and other factors beyond our control We cannot be certain that we will maintain a level of cash flows from operating activities sufficient to permit us to pay the principal and interest on our indebtedness
If our cash flows and capital resources are insufficient to fund our debt service obligations we may be forced to reduce or delay capital expenditures sell assets or operations seek additional capital or restructure or refinance our indebtedness We cannot be certain that we would be able to take any of these actions that these actions would be successful and permit us to meet our scheduled debt service obligations or that these actions would be permitted under the terms of our existing or future debt agreements In the absence of such operating results and resources we could face substantial liquidity problems and might be required to dispose of material assets or operations to meet our debt service and other obligations Some of our indebtedness restricts our ability to dispose of certain assets As such we may not be able to consummate those dispositions or use any resulting proceeds and in addition such proceeds may not be adequate to meet any debt service obligations then due
section of Item 7 of this Report contains restrictions on the incurrence of additional indebtedness by our subsidiaries these restrictions are subject to a number of qualifications and exceptions and the additional indebtedness incurred in compliance with these restrictions could be substantial
Certain of our financing instruments involve variable rate debt thus exposing us to the risk of fluctuations in interest rates In addition the interest rate payable on our Senior Notes our revolving and term loan credit agreement and certain other debt instruments is subject to adjustment from time to time if our credit rating is downgraded
Interest rates in the United States and other countries where we operate have increased and may continue to increase in the future As a result interest rates on the obligations under certain of our credit facilities our and our subsidiaries respective accounts receivable securitization programs and debt facilities or other
variable rate debt incurrences or offerings could be higher than current levels If interest rates increase debt service obligations and our interest expense will increase even though the amount borrowed remains the same Our net income and cash flows including cash available for servicing indebtedness will correspondingly decrease
An increase in interest rates may increase our future borrowing costs and restrict our access to capital Additionally current market conditions the global economy and overall credit conditions could limit our availability of capital which could cause increases in interest margin spreads over underlying indices effectively increasing the cost of our borrowing While some of our debt arrangements have contractually negotiated spreads any changes to these spreads in connection with renegotiations of our credit facilities could adversely affect our results of operations
We have in the past experienced decreases in demand and we anticipate that the industries we operate in will be subject to a high degree of cyclicality in the future Softening demand for our products and services caused by economic downturns and over capacity may impact our revenue as well as the salability of inventory and collection of reseller and retail customer accounts receivable In addition if we are not able to adequately adapt to the emergence of new technology or customer demand such as cloud based IT infrastructure and technology as a service our future operating results could be adversely affected
We operate in a highly competitive environment both in the United States and internationally This competition is based primarily on product and service availability credit availability price effectiveness of information systems and e commerce tools speed of delivery ability to tailor specific solutions to customer needs quality and depth of product and service lines pre sales and post sales technical support flexibility and timely response to design changes and technological capabilities service and support We compete with a variety of regional national and international IT product and service providers and contract manufacturers and assemblers In some instances we also compete with our own customers and our own OEM suppliers
Some of our competitors may have a broader range of services than us and may have more developed relationships with their existing customers We may lose market share in the United States or in international markets or may be forced in the future to reduce our prices in response to the actions of our competitors and thereby experience a reduction in our gross margins
We may initiate other business activities including the broadening of our supply chain capabilities and may face competition from companies with more experience in those new areas In addition as we enter new areas of business we may also encounter increased competition from current competitors or from new competitors including some that may once have been our OEM suppliers or reseller and retail customers Increased competition and negative reaction from our OEM suppliers or reseller and retail customers resulting from our expansion into new business areas could harm our business and operating results
A determination by any of our primary OEMs to consolidate their business with other distributors or integration service providers could negatively affect our business and operating results Consolidation of OEM suppliers has resulted in fewer sources for some of the products and services that we distribute This consolidation has also resulted in larger OEM suppliers that have significant operating and financial resources Other suppliers may reduce or eliminate promotional activities to reduce their expenses which could in turn result in declined demand from our reseller or retailer customers and end users
Some OEM suppliers including some of the leading OEM suppliers that we service have been selling products and services directly to reseller and retail customers and end users thereby limiting our business opportunities If large OEM suppliers increasingly sell directly to end users or our resellers and retailers or select a competitor rather than use us as the distributor of their products and services our business and operating results will suffer
The IT industry is subject to rapidly changing technologies and process developments and we may not be able to adequately adjust our business to these changes which in turn would harm our business and operating results
Dynamic changes in the IT industry including the consolidation of OEM suppliers and reductions in the number of authorized distributors used by OEM suppliers have resulted in new and increased responsibilities for management personnel and have placed and continue to place a significant strain upon our management operating and financial systems and other resources We may be unable to successfully respond to and manage our business in light of industry developments and trends As end users migrate to cloud based IT infrastructure and technology as a service sales of hardware products may be reduced thereby negatively impacting our operating results Also crucial to our success in managing our operations is our ability to achieve additional economies of scale Our failure to achieve these additional economies of scale or to respond to changes in the IT industry could adversely affect our business and operating results
Approximately 47 47 and 45 of our revenues in fiscal years 2024 2023 and 2022 respectively were generated outside the United States Most of our international revenue cost of revenue and operating expenses are denominated in foreign currencies
We presently have currency exposure arising from both sales and purchases denominated in foreign currencies Changes in exchange rates between foreign currencies and the U S dollar may adversely affect our operating margins For example if these foreign currencies appreciate against the U S dollar it will be more expensive in terms of U S dollars to purchase inventory or pay expenses with foreign currencies This could have a negative impact on us if revenue related to these purchases is transacted in U S dollars In addition currency devaluation can result in products that we purchase in U S dollars being relatively more expensive to procure than products manufactured locally Furthermore our local competitors in certain markets may have different purchasing models that provide them reduced foreign currency exposure compared to us This may result in market pricing that we cannot meet without significantly lower profit on sales
We hedge some of our exposure to changes in foreign exchange rates through the use of currency forward or option contracts Hedging foreign currencies can be risky Certain of these hedge positions are undesignated hedges of balance sheet exposures such as intercompany loans and typically have maturities of less than one year While we maintain policies to protect against fluctuations in currency exchange rates extreme fluctuations may result in our incurring losses in some countries
There is also additional risk if the currency is not freely or actively traded Some currencies such as the Chinese Renminbi are subject to limitations on conversion into other currencies which can limit our ability to hedge or to otherwise react to rapid foreign currency devaluations We cannot predict the impact of future exchange rate fluctuations on our business and operating results
We do not use derivative financial instruments for speculative trading purposes nor do we hedge our foreign currency exposure in a manner that entirely offsets the effects of changes in foreign exchange rates
As a general rule we do not use financial instruments to hedge local currency denominated operating expenses in countries where a natural hedge exists For example in many countries revenue in the local currency substantially offsets the local currency denominated operating expenses
The translation of the financial statements of foreign operations into U S dollars is also impacted by fluctuations in foreign currency exchange rates which may positively or negatively impact our results of operations For example in the past several foreign currencies in which we transact business depreciated against the U S dollar including the euro and the Japanese yen which adversely affected the results of operations of our Europe and APJ segments in the applicable periods In addition the value of our equity investment in foreign countries may fluctuate based upon changes in foreign currency exchange rates These fluctuations which are recorded in a cumulative translation adjustment account may result in losses in the event a foreign subsidiary is sold or closed at a time when the foreign currency is weaker than when we made investments in the country The realization of any or all of these risks could have a significant adverse effect on our financial results
We rely almost entirely on arrangements with independent shipping companies such as FedEx and UPS for the delivery of our products from OEM suppliers and delivery of products to reseller and retail customers Freight and shipping charges can have a significant impact on our gross margin As a result an increase in freight surcharges due to inflation rising fuel cost or general price increases will have an immediate adverse effect on our margins unless we are able to pass the increased charges to our reseller and retail customers or renegotiate terms with our OEM suppliers In addition in the past carriers have experienced work stoppages due to labor negotiations with management An increase in freight or shipping charges the termination of our arrangements with one or more of these independent shipping companies the failure or inability of one or more of these independent shipping companies to deliver products or the unavailability of their shipping services even temporarily could have an adverse effect on our business and operating results
A substantial portion of our IT systems operations including a substantial portion of our IT systems support and software development operations are located in China In addition we also conduct general and administrative activities from our facilities in China Our operations in China are subject to a number of risks relating to China s economic and political systems including
Our IT systems are an important part of our global operations Any significant interruption in service whether resulting from any of the above uncertainties natural disasters or otherwise could result in delays in our inventory purchasing errors in order fulfillment reduced levels of customer service and other disruptions in operations any of which could cause our business and operating results to suffer
We conduct business globally and file income tax returns in various tax jurisdictions Our effective tax rate could be adversely affected by several factors many of which are outside of our control including
Many jurisdictions have enacted legislation and adopted policies resulting from the Organization for Economic Co operation and Development s OECD Anti Base Erosion and Profit Shifting project which generally grants additional taxing rights over profits earned by multinational enterprises to the countries in which their products are sold and services rendered Rules adopted in response to this project establish a global per country minimum tax of 15 and the European Union has approved a directive requiring members to adopt similar provisions into their respective domestic laws The directive requires the rules to initially become effective for fiscal years starting on or after December 31 2023 fiscal year 2025 for the Company Numerous countries have enacted legislation or have indicated their intent to adopt legislation to implement certain aspects of these rules effective January 1 2024 with general implementation of the remaining global minimum tax rules effective January 1 2025 The OECD and implementing countries are expected to continue to make further revisions to their legislation and release additional guidance Due to these new rules our income tax expense could be unfavorably impacted as the legislation becomes effective in countries in which we conduct business We will continue to monitor the legislation and implementation by individual countries
Certain countries are evaluating their tax policies and regulations which could affect international business and may have an adverse effect on our overall tax rate along with increasing the complexity burden and cost of tax compliance Additional changes in the U S tax regime or in how U S multinational corporations are taxed on foreign earnings including changes in how existing tax laws are interpreted or enforced could adversely affect our business financial condition or results of operations
We report our results of operations based on our determination of the amount of taxes owed in various tax jurisdictions in which we operate The determination of our worldwide provision for income taxes and other tax liabilities requires estimation judgment and calculations where the ultimate tax determination may not be certain Our determination of tax liability is always subject to review or examination by tax authorities in various tax jurisdictions Any adverse outcome of such review or examination could have a negative impact on our operating results and financial condition The results from various tax examinations and audits may differ from the liabilities recorded in our financial statements and could adversely affect our financial results and cash flows
Our business is heavily dependent upon information technology networks and systems including those of our vendors suppliers and partners Internal or external attacks on those networks and systems could disrupt our normal operations centers and impede our ability to provide critical products and services to our customers subjecting us to liability under our contracts and damaging our reputation Additionally such attacks could compromise our or our customers or vendors intellectual property or confidential information or result in fraud or other financial loss For example in July 2021 we announced publicly that a threat actor had gained access to our systems That incident did not have a material impact to the business In July 2022 and September 2023 we became aware that a sophisticated threat actor gained access to a portion of our networks and systems After conducting a thorough review of those attacks with a leading third party cybersecurity firm we determined that those attacks did not have a material impact on us Evidence indicates that the threat actor responsible for these incidents is related to or the same as the threat actor that previously gained unauthorized access to our systems in July 2021 In November 2024 we were notified by a partner of one of our wholly owned subsidiaries that a different threat actor gained unauthorized access to the partner s networks and systems which contained data and information of a few of our subsidiary s customers
In response to these threats we engaged in remedial and preventative actions to remove the threat actor and prevent further unauthorized access to our network analyzed the information that the threat actors accessed enhanced our data security and governance program added additional protective security layers and are cooperating with law enforcement authorities While we do not believe at this time that these cyber attacks had a material impact on our systems or operations should new or different information come to light establishing that the intrusions are broader than now known or if additional attacks occur it could have a broader impact on our systems and operations and we could incur significant costs in responding to such intrusions
Our business also involves the use storage and transmission of information about our co workers and customers If any person including any of our co workers negligently disregards or intentionally breaches our established controls with respect to such data or otherwise mismanages or misappropriates that data we could be subject to monetary damages fines or criminal prosecution
We have security controls for our systems and other security practices in place to protect the security of and prevent unauthorized access to our systems and personal and proprietary information such as firewalls and anti virus software and we also provide information to our co workers about the need to deploy security measures and the impact of doing so however notwithstanding our efforts to date there are numerous sophisticated threat actors that are actively engaging in cyber attacks that include our systems and there can be no assurance that such security measures will prevent additional improper access to our networks and systems or access to or disclosure of personally identifiable or proprietary information which could harm our business
Furthermore data privacy is subject to frequently changing rules and regulations which sometimes conflict among the various jurisdictions and countries in which we provide services The General Data Protection Regulation GDPR in Europe the California Consumer Privacy Act and other similar laws have resulted and will continue to result in increased compliance costs Our failure to adhere to or successfully implement processes in response to these and other changing regulatory requirements in this area could result in legal liability or impairment to our reputation in the marketplace which could have a material adverse effect on our business financial condition and results of operations
Worldwide economic conditions remain uncertain due to the persistence of inflation elevated interest rates market volatility as a result of political leadership in certain countries including due to Russia s invasion of Ukraine the conflicts involving Israel and the surrounding region and other disruptions to global and regional economies and markets External factors such as potential terrorist attacks acts of war geopolitical and social turmoil or epidemics and other similar outbreaks in many parts of the world could prevent or hinder our ability to do business increase our costs and negatively affect our stock price More generally these geopolitical social and economic conditions could result in increased volatility in the United States and worldwide financial markets and economies For example increased instability may enhance volatility in currency exchange rates cause our customers or potential customers to delay or reduce spending on our products or services and limit our suppliers access to credit It could also adversely impact our ability to obtain adequate insurance at reasonable rates and may require us to incur increased costs for security measures for our domestic and international operations We are predominantly uninsured for losses and interruptions caused by terrorism acts of war and similar events These uncertainties make it difficult for us and our suppliers and customers to accurately plan future business activities
We could be negatively impacted by the widespread outbreak of an illness any other communicable disease or any other public health crisis that results in economic and trade disruptions including the disruption of global supply chains The extent of the impact of any such public health crisis on our future operational and financial performance including our ability to execute our business strategies and initiatives in the expected time frame could depend on future developments including the effect on our customers and demand for our products and services our ability to sell and provide our products and services including as a result of travel restrictions and people working remotely the ability of our customers to pay for our solutions any closures of our or our customers or partners offices and facilities and the impact of governmental actions or mandates imposed in response to any such public health crisis all of which are uncertain and cannot be predicted An extended period of global supply chain and economic disruption could materially affect our business our results of operations our access to sources of liquidity the carrying value of our goodwill and intangible assets our financial condition and our stock price
Part of our business is conducted outside of the United States exposing us to additional risks that may not exist in the United States which in turn could cause our business and operating results to suffer
We may continue to expand internationally to respond to competitive pressure and customer and market requirements Establishing operations in any foreign country or region presents risks such as those described above as well as risks specific to the particular country or region For example periodically we receive reports directly from co workers vendors and customers related to or otherwise become aware of potential non compliance with our Code of Conduct and various U S or foreign laws such as the FCPA U K bribery laws or local anti corruption laws We investigate these reports and matters report the activity to governmental authorities as required and also cooperate with investigations by U S and foreign law enforcement authorities While we do not believe any of the findings of these investigations have been material to the Company to date we take these matters seriously and activities of our employees vendors and customers in these regions could subject us to liability even if we do not explicitly authorize or have actual knowledge of their activities In addition until a payment history is established over time with customers in a new geography or region the likelihood of collecting accounts receivable generated by such operations could be less than our expectations As a result there is a greater risk that reserves set with respect to the collection of such accounts receivable may be inadequate Furthermore if our international expansion efforts in any foreign country are unsuccessful we may decide to cease operations which would likely cause us to incur additional expense and loss
In addition changes in policies or laws of the United States or foreign governments resulting in among other things higher taxation currency conversion limitations restrictions on fund transfers or the expropriation of private enterprises could reduce the anticipated benefits of our international expansion Any actions by countries in which we conduct business to reverse policies that encourage foreign trade or investment could adversely affect our business If we fail to realize the anticipated growth of our future international operations our business and operating results could suffer
Companies are facing increasing attention from investors customers partners consumers and other stakeholders relating to ESG matters including environmental stewardship social responsibility diversity and inclusion racial justice and workplace conduct In addition organizations that provide information to investors on corporate governance and related matters have developed ratings processes for evaluating companies on their approach to ESG matters Such ratings are used by some investors to inform their investment and voting decisions Unfavorable ESG ratings may lead to negative investor sentiment toward the Company which could have a negative impact on our stock price and our access to and costs of capital
We have established corporate social responsibility programs aligned with sound environmental social and governance principles These programs reflect our current initiatives and are not guarantees that we will be able to achieve them Our ability to successfully execute these initiatives and accurately report our progress presents numerous operational financial legal reputational and other risks many of which are outside our control and all of which could have a material negative impact on our business Additionally the implementation of these initiatives imposes additional costs on us If our ESG initiatives fail to satisfy investors customers partners and our other stakeholders our reputation our ability to sell products and services to customers our ability to attract or retain co workers and our attractiveness as an investment business partner or acquirer could be negatively impacted Similarly our failure or perceived failure to pursue or fulfill our goals targets and objectives or to satisfy various reporting standards within the timelines we announce or at all could also have similar negative impacts and expose us to government enforcement actions and private litigation
If we are unable to maintain effective internal control over financial reporting our ability to report our financial results on a timely and accurate basis may be adversely affected which in turn could cause the market price of our common stock to decline
Section 404 of the Sarbanes Oxley Act of 2002 requires our management to report on and our independent registered public accounting firm to attest to the effectiveness of our internal control structure and procedures for financial reporting We completed an evaluation of the effectiveness of our internal control over financial reporting for fiscal year 2024 and we have an ongoing program to perform the system and process evaluation and testing necessary to continue to comply with these requirements However internal control over financial reporting has inherent limitations including human error the possibility that controls could be circumvented or become inadequate because of changed conditions and fraud Because of the inherent limitations misstatements due to error or fraud may occur and may not always be prevented or timely detected We expect to continue to incur significant expenses and to devote management resources to Section 404 compliance In the event that our management or independent registered public accounting firm determines that there is a material weakness in our internal control over financial reporting investor perceptions and our reputation may be adversely affected and the market price of our stock could decline
We prepare our financial statements to conform to generally accepted accounting principles in the United States GAAP These accounting principles are subject to interpretation by the Financial Accounting Standards Board American Institute of Certified Public Accountants the SEC and various bodies formed to interpret and create appropriate accounting policies A change in those policies can have a significant effect on our reported results and may affect our reporting of transactions completed before a change is announced Changes to those rules or the questioning of current practices may adversely affect our reported financial results or the way we conduct our business
Our cybersecurity program is designed to protect the confidentiality integrity and availability of critical assets and information using a proactive and risk based approach We utilize the National Institute of Standards and Technology NIST Cybersecurity Framework as well as other globally recognized standards The NIST framework is structured around six Core Functions Govern Identify Protect Detect Recover and Respond and is a comprehensive approach to information and cybersecurity risk management Our program includes policies practices procedures and controls designed to manage material risks from cybersecurity threats including training requirements threat monitoring and detection threat containment and risk assessments
Our process for identifying and assessing material risks from cybersecurity threats operates alongside our company s broader overall risk assessment process We refine our cybersecurity program by staying informed on security threats conducting tabletop exercises to proactively identify areas for improvements and leveraging third party cybersecurity firms and investing in enhancements to our preventive and defensive capabilities We utilize a third party remediation team on retainer for assistance in investigating and addressing cybersecurity incidents or threats We maintain procedures for screening and evaluating third party providers prior to granting them access to our information systems Depending on the nature of the product or service to be provided we screen any third parties that could present a cybersecurity risk through a cyber risk assessment and we review third party suppliers post engagement to identify changes in their security risk profile including the occurrence of cybersecurity events affecting such suppliers Contractual and statutory provisions require third party suppliers to inform us of cyber incidents in most cases Additionally we maintain cybersecurity insurance coverage that we believe is appropriate for the size and complexity of our business to cover certain costs related to cybersecurity incidents
While we focus on prevention and detection we also have incident response and recovery plans in place designed to analyze contain remediate and communicate cybersecurity matters to help ensure a timely and robust response to actual or attempted incidents In the event of a cybersecurity incident our incident response process involves assessing incident severity conducting root cause analysis creating and implementing plans to address the incident mobilizing appropriate resources and identifying potential remedial measures and other appropriate next steps We also have on retainer a third party consultant to assist us in our incident response and remediation
As of the date of this report we are not aware of any risks from cybersecurity threats that have materially affected the Company including our business strategy results of operations or financial condition However we cannot provide assurance that these threats will not result in such an impact in the future For more information regarding risks relating to information technology and cybersecurity see
We have a team of information security professionals who lead our enterprise wide cybersecurity strategy risk management cyber defense software security security monitoring and other related functions This team is overseen by our Chief Information Security Officer CISO who reports to our Chief Information Officer CIO and works with our Chief Legal Officer Our CISO has over 30 years of experience in the fields of cybersecurity and intelligence with the Department of Defense the defense contracting community and with publicly traded companies and holds various technical credentials in the field including a CIO Program Certificate from the College of Information and Cyberspace National Defense University and maintains a Certified Information System Security Professional CISSP designation as well as a Certified Information Privacy Professional CIPP designation
The Board of Directors is responsible for overseeing our enterprise risk management process including our information security program compliance and risk management and cybersecurity risks The CISO regularly provides reporting on cybersecurity matters to senior management and reports to the Board of Directors on at least a semi annual basis and going forward to the newly formed Technology Committee of the Board of Directors on at least a quarterly basis This reporting includes updates on our information security strategy key cyber risks and threats progress towards protecting the Company from such risks and threats and assessments of our cybersecurity program with regard to emerging trends Depending on the magnitude of a cybersecurity incident certain matters are required to be reported promptly to the Board of Directors as appropriate in accordance with our security incident response plan
The Board of Directors is in the process of creating a Technology Committee to have an oversight role regarding technology based issues including in relation to cybersecurity and generative artificial intelligence With respect to cybersecurity the committee s role may include assisting the Board of Directors in evaluating management s role in preparing presenting and assessing our IT systems reviewing our cyber risks and strategies as well as any significant incidents and providing guidance regarding the Company s cybersecurity compliance obligations
Our principal executive offices are located in Fremont California and Clearwater Florida We own our Fremont property while the Clearwater location is currently leased We operate distribution integration contact center and administrative facilities in different countries
We occupy 158 facilities covering approximately 14 9 million square feet including warehouse logistics and administrative facilities We own approximately 2 7 million square feet of property and lease the remainder Our facilities are located in the following principal markets the Americas 54 Europe 66 and APJ 38
We have sublet unused portions of some of our facilities We believe our facilities are well maintained and adequate for current and near future operating needs Upon the expiration or termination of any of our leased facilities we believe we could obtain comparable office space
We are from time to time involved in legal proceedings in the ordinary course of business We do not believe that these proceedings will have a material adverse effect on the results of our operations our financial position or the cash flows of our business
In addition we have been involved in various bankruptcy preference actions where we were a supplier to the companies now in bankruptcy These preference actions are filed by the bankruptcy trustee on behalf of the bankrupt estate and generally seek to have payments made by the debtor within 90 days prior to the bankruptcy returned to the bankruptcy estate for allocation among all of the bankruptcy estate s creditors We are not currently involved in any material preference proceedings
In 2013 the French Autorité de la Concurrence Competition Authority began an investigation into the French market for certain products of Apple Inc Apple for which we are a distributor In March 2020 the Competition Authority imposed fines on the Company on another distributor and on Apple finding that the Company entered into an anticompetitive agreement with Apple regarding volume allocations of Apple products The initial fine imposed on the Company was 76 1 million The Company appealed its determination to the French courts seeking to set aside or reduce the fine
On October 6 2022 the appeals court issued a ruling that reduced the fine imposed on us from 76 1 million to 24 9 million As a result of the appeals court ruling the Company paid 24 9 million through fiscal year 2022 We decreased our accrual established for this matter by 10 8 million during fiscal year 2022 which was recorded in Other expense net in the Consolidated Statement of Operations We continue to contest the arguments of the Competition Authority and have further appealed this matter A civil lawsuit related to this matter alleging anticompetitive actions in association with the established distribution networks for Apple the Company and another distributor was filed by eBizcuss On November 25 2024 the Paris Commercial Court ruled in favor of the Company and the other defendants and dismissed the claims in the eBizcuss civil lawsuit An appeal to the ruling has since been made by eBizcuss and while we continue to evaluate this matter based on the favorable ruling from the Paris Commercial Court we believe the likelihood of a material loss related to the eBizcuss lawsuit is remote
As of January 15 2025 our common stock was held by approximately 2 250 stockholders of record Because many of the shares of our common stock are held by brokers and other institutions on behalf of stockholders we are unable to estimate the total number of beneficial owners represented by these stockholders of record
The stock price performance graph below which assumes a 100 investment on November 30 2019 compares our cumulative total stockholder return the S P Midcap 400 Index and Computer and Peripheral Equipment index
for the period beginning November 30 2019 through November 30 2024 The Computer and Peripheral Equipment index is based on the Standard Industrial Classification Code 5045 Wholesale Computer and Computer Peripheral Equipment and Software The closing price per share of our common stock was 118 99
On January 10 2025 the Company announced a cash dividend of 0 44 per share to stockholders of record as of January 24 2025 payable on January 31 2025 Dividends are subject to continued capital availability and the declaration by our Board of Directors in the best interest of our stockholders The Company currently expects that comparable cash dividends will continue to be paid in the future
In January 2023 our Board of Directors authorized a three year 1 0 billion share repurchase program In March 2024 our Board of Directors authorized a new 2 0 billion share repurchase program supplementing the 196 7 million remaining authorization under the prior program collectively the share repurchase program pursuant to which we may repurchase our outstanding common stock from time to time in the open market or through privately negotiated transactions 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 Exchange Act The March 2024 share repurchase authorization does not have an expiration date
For an understanding of TD SYNNEX and the significant factors that influenced our performance during the past three fiscal years the following discussion and analysis of our financial condition and results of operations should be read in conjunction with the description of the business appearing in Item 1 of this Report and Item 8 Financial Statements and Supplementary Data included elsewhere in this Report
This section of the Form 10 K generally discusses fiscal years 2024 and 2023 items and year to year comparisons between fiscal years 2024 and 2023 Discussions of fiscal year 2022 items and year to year comparisons between fiscal years 2023 and 2022 that are not included in this Form 10 K can be found in Management s Discussion and Analysis of Financial Condition and Results of Operations in Part II Item 7 of the Company s Annual Report on Form 10 K for the fiscal year ended November 30 2023 filed with the SEC on January 26 2024
In addition to historical information the MD A contains forward looking statements that involve risks and uncertainties These forward looking statements include but are not limited to those matters discussed under the heading Note Regarding Forward looking Statements Our actual results could differ materially from those anticipated by these forward looking statements due to various factors including but not limited to those set forth under Item 1A Risk Factors of this Form 10 K and elsewhere in this document
We are a Fortune 100 corporation and a leading global distributor and solutions aggregator for the information technology IT ecosystem We serve a critical role bringing products from the world s leading and emerging technology vendors to market and helping our customers create solutions best suited to maximize business outcomes for their end user customers
We are highly dependent on the end market demand for IT products and on our partners strategic initiatives and business models This end market demand is influenced by many factors including the introduction of new IT products and software by OEM suppliers replacement cycles for existing IT products trends toward cloud computing overall economic growth and general business activity A difficult and challenging economic environment due to the continued persistence of inflation elevated interest rates and market volatility as a result of military conflicts in certain countries may also lead to consolidation or decline in the IT distribution industry and increased price based competition Our results in fiscal 2023 were also negatively impacted by post pandemic declines in demand for personal computing ecosystem products Our systems design and integration solutions business is highly dependent on the demand for cloud infrastructure and the number of key customers and suppliers in the market Our business includes operations in the Americas Europe and Asia Pacific and Japan APJ so we are affected by demand for our products in those regions as well as the impact of fluctuations in foreign currency exchange rates compared to the U S dollar
We continually seek to augment organic growth in our business with strategic acquisitions of businesses and assets that complement and expand our existing capabilities We also divest businesses that we deem no longer strategic to our ongoing operations We seek to acquire new OEM relationships enhance our supply chain and integration capabilities the services we provide to our customers and OEM suppliers and expand our geographic footprint
On March 22 2021 we entered into an agreement and plan of merger the Merger Agreement which provided that legacy SYNNEX Corporation would acquire legacy Tech Data Corporation a Florida corporation Tech Data through a series of mergers which would result in Tech Data becoming an indirect subsidiary of TD SYNNEX Corporation collectively the Merger On September 1 2021 pursuant to the terms of the Merger Agreement we acquired all the outstanding shares of common stock of Tiger Parent AP Corporation the parent corporation of Tech Data for consideration of 1 6 billion in cash 1 1 billion in cash after giving effect to a 500 0 million equity contribution by Tiger Parent Holdings L P Tiger Parent AP Corporation s sole stockholder and an affiliate of Apollo Global Management Inc to Tiger Parent AP Corporation prior to the effective time of the Merger and 44 million shares of common stock of SYNNEX valued at approximately 5 6 billion
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 fiscal year ended November 30 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
Non GAAP operating income which is operating income adjusted to exclude acquisition integration and restructuring costs amortization of intangible assets share based compensation expense and purchase accounting adjustments
Non GAAP net income which is net income adjusted to exclude acquisition integration and restructuring costs amortization of intangible assets share based compensation expense purchase accounting adjustments and income taxes related to the aforementioned items
Non GAAP diluted earnings per common share EPS which is diluted EPS excluding the per share impact of acquisition integration and restructuring costs amortization of intangible assets share based compensation expense purchase accounting adjustments and income taxes related to the aforementioned items
Acquisition integration and restructuring costs which are expensed as incurred primarily represent professional services costs for legal banking consulting and advisory services severance and other personnel related costs share based compensation expense and debt extinguishment fees that are incurred in connection with acquisition integration restructuring and divestiture activities 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
Our acquisition activities have resulted in the recognition of finite lived intangible assets which consist primarily of customer relationships and vendor lists Finite lived intangible assets are amortized over their estimated useful lives and are tested for impairment when events indicate that the carrying value may not be recoverable The amortization of intangible assets is reflected in our Consolidated Statements of Operations Although intangible assets contribute to our revenue generation the amortization of intangible assets does not directly relate to the sale of our products Additionally intangible asset amortization expense typically fluctuates based on the size and timing of our acquisition activity Accordingly we believe excluding the amortization of intangible assets along with the other non GAAP adjustments which neither relate to the ordinary course of our business nor reflect our underlying business performance enhances our and our investors ability to compare our past financial performance with our current performance and to analyze underlying business performance and trends Intangible asset amortization excluded from the related non GAAP financial measure represents the entire amount recorded within our GAAP financial statements and the revenue generated by the associated intangible assets has not been excluded from the related non GAAP financial measure Intangible asset amortization is excluded from the related non GAAP financial measure because the amortization unlike the related revenue is not affected by operations of any particular period unless an intangible asset becomes impaired or the estimated useful life of an intangible asset is revised
hare based compensation expense is a non cash expense arising from the grant of equity awards to employees and non employee members of our Board of Directors based on the estimated fair value of those awards Although share based compensation is an important aspect of the compensation of our employees the fair value of the share based awards may bear little resemblance to the actual value realized upon the vesting or future exercise of the related share based awards and the expense can vary significantly between periods as a result of the timing of grants of new stock based awards including grants in connection with acquisitions Given the variety and timing of awards and the subjective assumptions that are necessary when calculating share based compensation expense we believe this additional information allows investors to make additional comparisons between our operating results from period to period
Purchase accounting adjustments are primarily related to the impact of recognizing the acquired vendor and customer liabilities from the Merger at fair value These adjustments benefited our non GAAP operating income through the third fiscal quarter of fiscal 2023 based on historical settlement patterns with our vendors and in accordance with the timing defined in our policy for releasing vendor and customer liabilities we deem remote to be paid
We believe that providing this additional information is useful to the reader to better assess and understand our base operating performance especially when comparing results with previous periods and for planning and forecasting in future periods primarily because management typically monitors the business adjusted for these items in addition to GAAP results Management also uses these non GAAP measures to establish operational goals and in some cases for measuring performance for compensation purposes As these non GAAP financial measures are not calculated in accordance with GAAP they may not necessarily be comparable to similarly titled measures employed by other companies These non GAAP financial measures should not be considered in isolation or as a substitute for the comparable GAAP measures and should be used as a complement to and in conjunction with data presented in accordance with GAAP
During the fiscal year ended November 30 2024 consolidated revenue increased by 897 0 million and consolidated revenue in constant currency increased by 775 4 million as compared to the prior fiscal year The increases are primarily driven by growth in our Advanced Solutions portfolio partially offset by the presentation of additional revenue on a net basis due to changes in product mix which negatively impacted our revenue growth by approximately 1 2 billion or 2
During the fiscal year ended November 30 2024 Americas revenue increased by 218 0 million and Americas revenue in constant currency increased by 250 9 million as compared to the prior fiscal year The increases are primarily driven by growth in our Advanced Solutions portfolio partially offset by the presentation of additional revenue on a net basis due to changes in product mix which negatively impacted our revenue growth by approximately 960 million or 3 and a decline in our Endpoint Solutions portfolio in the region
During the fiscal year ended November 30 2024 Europe revenue increased by 211 9 million and Europe revenue in constant currency slightly decreased by 15 0 million as compared to the prior fiscal year The increase in revenue is primarily driven by growth in our Endpoint Solutions portfolio in the region along with the impact of changes in foreign currencies partially offset by the presentation of additional revenue on a net basis due to changes in product mix which negatively impacted our revenue growth by approximately 200 million or 1 The impact of changes in foreign currencies is primarily due to the strengthening of the euro against the U S dollar
During the fiscal year ended November 30 2024 APJ revenue increased by 467 2 million and APJ revenue in constant currency increased by 539 5 million as compared to the prior fiscal year The increases are primarily driven by growth in our Advanced Solutions portfolio in the region partially offset by the presentation of additional revenue on a net basis due to changes in product mix which negatively impacted our revenue by approximately 60 million or
Our gross margin is affected by a variety of factors including competition selling prices mix of products the percentage of revenue that is presented on a net basis product costs along with rebate and discount programs from our suppliers reserves or settlement adjustments freight costs inventory losses and fluctuations in revenue
Our gross profit on both a GAAP and non GAAP basis increased during the fiscal year ended November 30 2024 as compared to the prior fiscal year primarily due to the increase in revenue Our gross margin on both a GAAP and non GAAP basis slightly decreased during the fiscal year ended November 30 2024 as compared to the prior fiscal year primarily due to higher strategic technologies margins in the prior year period The presentation of additional revenues on a net basis due to changes in product mix positively impacted our gross margin by approximately 14 basis points
Our selling general and administrative expenses consist primarily of personnel costs such as salaries commissions bonuses share based compensation and temporary personnel costs Selling general and administrative expenses also include cost of warehouses delivery centers and other non integration facilities utility expenses legal and professional fees depreciation on certain of our capital equipment bad debt expense amortization of our intangible assets and marketing expenses offset in part by reimbursements from our OEM suppliers
Selling general and administrative expenses increased in fiscal year 2024 compared to fiscal year 2023 primarily due to higher personnel costs and higher share based compensation expense partially offset by lower credit costs Selling general and administrative expenses as a percentage of revenue was relatively flat compared to the prior year period A greater percentage of our revenue was presented on a net basis due to changes in product mix which increased the ratio of selling general and administrative expenses as a percentage of revenue for fiscal year 2024 by approximately 10 basis points
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 Costs related to the GBO 2 Program were 3 9 million and 9 4 million during the fiscal years ended November 30 2024 and
respectively Acquisition integration and restructuring costs related to other acquisitions were 3 0 million for fiscal year 2024 We do not expect to incur additional costs under the GBO 2 Program in future periods
We substantially completed the acquisition integration and restructuring activities related to the Merger during the first half of fiscal year 2024 and there are no related 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
and 17 4 million during fiscal years 2024 and 2023 respectively due to changes in asset useful lives in conjunction with the consolidation of certain IT systems Long lived asset charges and termination
fees also include 17 0 million and 24 4 million recorded during fiscal years 2024 and 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
In July 2023 we offered a voluntary severance program VSP to certain co workers in the United States as part of our cost optimization efforts related to the Merger We incurred 10 1 million of costs in connection with the VSP during fiscal year 2024 including 8 0 million of severance costs and 2 1 million of duplicative labor costs We incurred 52 1 million of costs in connection with the VSP during fiscal year 2023 including 42 3 million of severance costs and 9 8 million of duplicative labor costs
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 fiscal years ended November 30 2024 and
Consolidated operating income and margin increased during the fiscal year ended November 30 2024 compared to the prior fiscal year primarily due to lower acquisition integration and restructuring costs
Consolidated non GAAP operating income slightly decreased during the fiscal year ended November 30 2024 compared to the prior fiscal year primarily due to a decrease in strategic technologies gross margins and higher personnel costs partially offset by the increase in revenue and lower credit costs
Consolidated non GAAP operating margin slightly decreased during the fiscal year ended November 30 2024 compared to the prior fiscal year primarily due to the decrease in strategic technologies gross margins and higher personnel costs partially offset by lower credit costs
Americas operating income increased during the fiscal year ended November 30 2024 compared to the prior fiscal year primarily due to lower acquisition integration and restructuring costs lower credit costs and an increase in revenue partially offset by a decrease in strategic technologies gross margins
Americas operating margin increased during the fiscal year ended November 30 2024 compared to the prior fiscal year primarily due to lower acquisition integration and restructuring costs lower credit costs and the impact of the presentation of additional revenue on a net basis due to changes in product mix partially offset by the decrease in strategic technologies gross margins
Americas non GAAP operating income decreased during the fiscal year ended November 30 2024 compared to the prior fiscal year primarily due to the decrease in strategic technologies gross margins partially offset by lower credit costs
Americas non GAAP operating margin decreased during the fiscal year ended November 30 2024 compared to the prior fiscal year primarily due to the decrease in strategic technologies gross margins partially offset by lower credit costs and the impact of the presentation of additional revenue on a net basis due to changes in product mix
Europe operating income increased during the fiscal year ended November 30 2024 compared to the prior fiscal year primarily due to lower acquisition integration and restructuring costs the prior year impact of purchase accounting adjustments related to the Merger and an increase in revenue
Europe operating margin increased during the fiscal year ended November 30 2024 compared to the prior fiscal year primarily due to lower acquisition integration and restructuring costs and the prior year impact of purchase accounting adjustments related to the Merger
APJ operating income and non GAAP operating income increased during the fiscal year ended November 30 2024 compared to the prior fiscal year primarily due to the increase in revenue partially offset by higher personnel costs
APJ operating margin and non GAAP operating margin decreased during the fiscal year ended November 30 2024 compared to the prior fiscal year primarily due to a decrease in gross margin in the region partially offset by a decrease in selling general and administrative expenses as a percentage of revenue due to the increase in revenue
Amounts recorded in interest expense and finance charges net consist primarily of interest expense on our Senior Notes our lines of credit our term loans and our accounts receivable securitization facility and fees associated with the sale of accounts receivable partially offset by income earned on our cash investments
Our interest expense and finance charges net increased during fiscal year 2024 compared to fiscal year 2023 primarily due to increased costs associated with the sale of accounts receivable due to higher discount fees which totaled 67 8 million and 51 1 million during the fiscal years ended November 30 2024 and 2023 respectively along with higher average interest rates on our Senior Notes
Amounts recorded as other expense net include foreign currency transaction gains and losses on certain financing transactions and the related derivative instruments used to hedge such financing transactions the cost of hedging investment gains and losses and other non operating gains and losses such as settlements received from class action lawsuits
During fiscal year 2024 our other expense net increased compared to fiscal year 2023 Fiscal year 2024 other expense net consisted primarily of foreign currency hedging costs Fiscal year 2023 other expense net was lower due to legal settlements received of 10 7 million which partially offset our foreign currency hedging costs These legal settlements did not recur in fiscal year 2024
Our income tax expense increased during the fiscal year ended November 30 2024 as compared to the prior fiscal year primarily due to higher income during the period The effective tax rate for fiscal year 2024 was slightly lower when compared to the prior fiscal year primarily due to the utilization of tax credits earned in certain jurisdictions and the relative mix of earnings and losses within the taxing jurisdictions in which we operate partially offset by current year withholding taxes in certain jurisdictions and other favorable tax items in the prior fiscal year
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 and 0 8 of net income for the fiscal years ended November 30 2024 and 2023 respectively
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 18 days at the end of fiscal year 2024 and 23 days at the end of fiscal year 2023 respectively Our CCC decreased as compared to fiscal year 2023 primarily due to a decrease in DSO as our revenue increased year over year while our accounts receivable balance remained relatively consistent due to increased collections
To increase our market share and better serve our customers we may further expand our operations through investments or acquisitions We expect that any such expansions would require an initial investment in working capital personnel facilities and operations These investments or acquisitions would likely be funded primarily by our existing cash and cash equivalents additional borrowings or the issuance of securities
Net cash provided by operating activities was 1 2 billion during fiscal year 2024 compared to net cash provided by operating activities of 1 4 billion during fiscal year 2023 The decrease in net cash provided by operating activities was primarily due to a decrease in inventory during fiscal year 2023 related to ongoing sell through of strategic inventory purchases that occurred during fiscal year 2022 as compared to an increase in inventory in fiscal year 2024 correlated with the year over year revenue growth in the fourth quarter as well as a decrease in other accrued liabilities in fiscal year 2024 This change was partially offset by an increase in accounts payable during fiscal year 2024 related to the increase in inventory purchases and associated timing of cash payments as compared to a decrease in accounts payable during fiscal year 2023 correlated with the decrease in inventory in the prior year
Net cash used in investing activities was 193 8 million and 156 4 million during fiscal years 2024 and 2023 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 43 7 million increased capital expenditures of 25 1 million and an increase in payments to settle net investment hedges of 14 3 million partially offset by proceeds from the sale of a building in the current year of 42 9 million
Net cash used in financing activities was 953 1 million and 785 9 million during fiscal years 2024 and 2023 respectively The increase in net cash used in financing activities as compared to fiscal year 2023 is primarily due to an increase in net repayments of long term borrowings of 114 5 million primarily due to the net repayment of senior notes an increase in net repayments of short term borrowings of 37 0 million and 13 9 million of debt issuance costs
Our cash and cash equivalents totaled 1 1 billion and 1 0 billion as of November 30 2024 and 2023 respectively Our cash and cash equivalents held by international subsidiaries are no longer subject to U S federal tax on repatriation into the United States Repatriation of some foreign balances is restricted by local laws If in the future we repatriate foreign cash back to the United States we will report in our Consolidated Financial Statements the impact of state and withholding taxes depending upon the planned timing and manner of such repatriation Presently we believe we have sufficient resources cash flow and liquidity within the United States to fund current and expected future working capital investment and other general corporate funding requirements
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
In the United States 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 has a maturity date of November 2026 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 we
The TD SYNNEX Credit Agreement also includes a 1 5 billion term loan facility the TD SYNNEX Term Loan that was fully funded in connection with the Merger The TD SYNNEX Term Loan has a maturity date of September 2026 As amended
On April 19 2024 we entered into a Term Loan Credit Agreement the 2024 Term Loan Credit Agreement which provides for a senior unsecured term loan in the amount of 750 0 million the 2024 Term Loan The proceeds from the 2024 Term Loan were used to repay a portion of the TD SYNNEX Term Loan The 2024 Term Loan will mature on September 1 2027
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 570 5 million in borrowing capacity as of November 30 2024 Our borrowings on these facilities vary within the period primarily based on changes in our working capital There was 171 1 million outstanding on these facilities at November 30 2024 at a weighted average interest rate of 7 91 and there was 208 7 million outstanding at November 30 2023 at a weighted average interest rate of 7 52
Historically we have renewed our accounts receivable securitization program and our parent company credit facilities on or prior to their respective expiration dates We have no reason to believe that these and other arrangements will not be renewed or replaced as we continue to be in good credit standing with the participating financial institutions We have had similar borrowing arrangements with various financial institutions throughout our years as a public company
We had total outstanding borrowings of approximately 3 9 billion and 4 1 billion as of November 30 2024 and 2023 respectively Our outstanding borrowings include Senior Notes of 2 4 billion and 2 5 billion at November 30 2024 and 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 November 30 2024 and 2023 respectively For additional information on our borrowings see
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 November 30 2024 and 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 in the years ended November 30 2024 and 2023 totaled 67 8 million and 51 1 million respectively
In January 2023 our Board of Directors authorized a three year 1 0 billion share repurchase program In March 2024 our 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 Exchange Act The March 2024 share repurchase authorization does not have an expiration date We repurchased 5 5 million shares of common stock for 611 9 million and 6 5 million shares of common stock for 620 7 million in fiscal 2024 and 2023 respectively As of November 30 2024 we had 1 8 billion available for future repurchases of our common stock For additional information on our share repurchase program see
Our credit facilities have a number of covenants and restrictions that require us to maintain specified financial ratios They also limit our or our subsidiaries as applicable ability to incur additional debt or liens enter into agreements with affiliates modify the nature of our business and merge or consolidate As of November 30 2024 we were in compliance with all material covenants for the above arrangements
We are contingently liable under agreements without expiration dates to repurchase repossessed inventory acquired by flooring companies as a result of default on floor plan financing arrangements by our customers There have been no material repurchases through November 30 2024 under these agreements and we are not aware of any pending customer defaults or repossession obligations As we do not have access to information regarding the amount of inventory purchased from us still on hand with the customer at any point in time our repurchase obligations relating to inventory cannot be reasonably estimated
The discussions and analysis of our consolidated financial condition and results of operations are based on our Consolidated Financial Statements which have been prepared in conformity with GAAP The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities disclosure of any contingent assets and liabilities at the financial statement date and reported amounts of revenue and expenses during the reporting period On an ongoing basis we review and evaluate our estimates and assumptions Our estimates are based on our historical experience and a variety of other assumptions that we believe to be reasonable under the circumstances the results of which form the basis for making our judgment about the carrying values of assets and liabilities that are not readily available from other sources Actual results could differ from these estimates under different assumptions or conditions
We account 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 our 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 us are delivered via shipment from our 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 we can objectively verify the products comply with specifications underlying acceptance and the customer has control of the products
is presented net of taxes collected from customers and remitted to government authorities We generally invoice 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 In relation to product support supply chain management and other services that we perform revenue is recognized over time as the services are performed Service revenues represents less than 10 of the total revenue for the periods presented
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 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
We recognize revenue on a net basis on certain contracts where our 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 we do not assume the risks and rewards of ownership by recognizing the margins earned in revenue with no associated cost of revenue Such arrangements include supplier service contracts post contract software support services cloud computing and software as a service arrangements certain fulfillment contracts extended warranty contracts and certain of our systems design and integration solutions arrangements which operate under a customer owned procurement model
We consider shipping and handling activities as costs to fulfill the sale of products Shipping revenue is included in revenue when control of the product is transferred to the customer and the related shipping and handling costs are included in cost of revenue
The values assigned to intangible assets include estimates and judgment regarding expectations for the length of customer relationships acquired in a business combination Included within intangible assets is an indefinite lived trade name intangible asset Our indefinite lived trade name intangible asset is considered a single unit of accounting and is tested for impairment at the consolidated level annually as of September 1 and more frequently if events or changes in circumstances indicate that it is more likely than not that the asset is impaired No impairment of our indefinite lived trade name intangible asset has been identified for any of the periods presented Other 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
We allocate goodwill to reporting units based on the reporting unit expected to benefit from the business combination and test for impairment annually as of September 1 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 We also have the option to bypass the qualitative assessment for any reporting unit in any period
If the reporting unit does not pass or we choose to bypass 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 working capital requirements future economic conditions discount rates and other relevant factors The assumptions used in the market and discounted cash flow approaches include inherent uncertainty and actual results could differ from these estimates 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
We performed our annual goodwill impairment test as of September 1 2024 as a qualitative assessment and determined that for all reporting units it was not more likely than not that the fair value of the reporting unit was less than its carrying value
We review the recoverability of our long lived assets such as finite lived intangible assets property and equipment and certain other assets when events or changes in circumstances occur that indicate the carrying value of the asset or asset group may not be recoverable The assessment of possible impairment is based on our ability to recover the carrying value of the asset or asset group from the expected future pre tax cash flows undiscounted and without interest charges of the related operations If these cash flows are less than the carrying value of such assets an impairment loss is recognized for the difference between estimated fair value and carrying value
The 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 included in a tax return using the period cost method Valuation allowances are provided against deferred tax assets that are not likely to be realized
We recognize 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 We recognize interest and penalties related to unrecognized tax benefits in the provision for income taxes
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 Australian dollar Brazilian real British pound Canadian dollar Chinese yuan Czech koruna Danish krone Euro Indian rupee Indonesian rupiah Japanese yen Mexican peso Norwegian krone Polish zloty Romanian leu Singapore dollar Swedish krona Swiss franc and Turkish lira We do not hold or issue derivative financial instruments for trading purposes
In order to provide an assessment of our foreign currency exchange rate risk we performed an analysis using a value at risk VaR model The VaR model uses a Monte Carlo simulation to generate 1 000 random market price paths The VaR model determines the potential impact of the fluctuation in foreign exchange rates assuming a one day holding period normal market conditions and a 95 confidence level The model is not intended to represent actual losses but is used as a risk estimation and management tool Firm commitments assets and liabilities denominated in foreign currencies were excluded from the model The estimated maximum potential one day loss in fair value calculated using the VaR model would be approximately 5 4 million and 3 6 million at November 30 2024 and 2023 respectively We believe that the hypothetical loss in fair value of our foreign exchange derivatives would be offset by the gains in the value of the underlying transactions being hedged Actual future gains and losses associated with our derivative positions may differ materially from the analyses performed as of November 30 2024 due to the inherent limitations associated with predicting the changes in foreign currency exchange rates and our actual exposures and positions
We are also exposed to changes in interest rates primarily as a result of our debt used to provide liquidity and to finance working capital capital expenditures and acquisitions Our interest rate risk management objective is to limit the impact of interest rate changes on earnings and cash flows and to minimize overall borrowing costs To achieve our objective we use a combination of fixed and variable rate debt The nature and amount of our long term and short term debt can be expected to vary as a result of future business requirements market conditions and other factors
Certain of our borrowing facilities and our securitization arrangement are variable rate obligations and expose us to interest rate risks As of November 30 2024 we had approximately 1 3 billion of outstanding term loan debt subject to variable interest rates and our subsidiaries had approximately 171 1 million in the
aggregate outstanding under debt facilities subject to variable interest rates The outstanding amount of our borrowings under these facilities may fluctuate in response to changes in our working capital and other liquidity requirements To the extent that there are changes in interest rates the interest expense on our variable rate debt may fluctuate Additionally discount fees paid to sell accounts receivable under our accounts receivable purchase agreements are impacted by changes in interest rates and expose us to interest rate risks
A one percentage point 100 basis point variation in average interest rates would have an impact on annual interest expense of 14 8 million based on the Company s outstanding variable rate debt at November 30 2024
The equity price risk associated with our marketable equity securities as of November 30 2024 and 2023 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
Our management is responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined in Exchange Act Rule 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 2024 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 2024 has been audited by KPMG LLP an independent registered public accounting firm as stated in their report which appears on page 49
We have audited the accompanying consolidated balance sheets of TD SYNNEX Corporation and subsidiaries the Company as of November 30 2024 and 2023 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 2024 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 2024 based on criteria established in
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 2024 and 2023 and the results of its operations and its cash flows for each of the years in the three year period ended November 30 2024 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 2024 based on criteria established in
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
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
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
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that 1 relates to accounts or disclosures that are material to the consolidated financial statements and 2 involved our especially challenging subjective or complex judgments The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements taken as a whole and we are not by communicating the critical audit matter below providing separate opinions on the critical audit matter or on the accounts or disclosures to which they relate
As discussed in Note 12 to the consolidated financial statements and presented in the consolidated statements of operations the Company reported revenue of 58 452 436 thousand for the fiscal year ended November 30 2024
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 For certain locations we evaluated the design and tested the operating effectiveness of certain internal controls related to the recognition of revenue For the Americas and Europe segments we performed a software assisted data analysis at a transactional level to identify higher risk revenue records to test We tested the identified higher risk 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 For the APJ segment 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
headquartered in Fremont California and Clearwater Florida and has operations in North and South America Europe and Asia Pacific and Japan The Company operates on a fiscal year that ends on November 30
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 Actual results could differ from the estimates
The Consolidated Financial Statements include the accounts of the Company its wholly owned subsidiaries and variable interest entities if the Company is the primary beneficiary All intercompany accounts and transactions have been eliminated
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
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 s chief executive officer who is also the chief operating decision maker reviews and allocates resources based on geographic regions As a result the Company operates in three reportable segments based on its geographic regions the Americas Europe and Asia Pacific and Japan APJ
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
The Company maintains an allowance for doubtful accounts as an estimate to cover the future expected credit losses resulting from uncertainty regarding collections from customers or OEM vendors to make payments for outstanding balances In estimating the required allowance the Company takes into consideration historical credit losses current conditions and reasonable and supportable forecasts Adjustments to historical loss information are made for differences in current conditions as well as changes in forecasted macroeconomic conditions such as changes in unemployment rates or gross domestic product growth Expected credit losses are estimated on a pool basis when similar risk characteristics exist using an age based reserve model Receivables that do not share risk characteristics are evaluated on an individual basis
The Company has uncommitted accounts receivable purchase agreements with global financial institutions under which trade accounts receivable of certain customers and their affiliates may be acquired without recourse by the financial institutions Available capacity under these programs is dependent on the level of the Company s trade accounts receivable with these customers and the financial institutions willingness to purchase such receivables In addition certain of these programs also require that the Company continue to service administer and collect the sold accounts receivable As of November 30 2024 and 2023 accounts receivable sold to and held by the financial institutions under these programs were 1 2 billion and 864 6 million respectively Discount fees related to the sale of trade accounts receivable under these facilities are included in Interest expense and finance charges net in the Consolidated Statements of Operations During the fiscal years ended November 30 2024 2023 and 2022 discount fees were 67 8 million 51 1 million and 26 2 million respectively
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
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 hedged 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 The company classifies cash flows related to the settlement of its cash flow hedges as operating activities in the Consolidated Statements of Cash Flows
For derivative instruments that hedge a portion of the Company s net investment in foreign currency denominated operations that are designated as net investment hedges the gain or loss on the derivative instrument is included within the caption Foreign currency translation adjustments and other on the Consolidated Statements of Comprehensive Income and is reported as a component of Accumulated other comprehensive income loss in stockholders equity until the sale or substantially complete liquidation of the underlying assets of the Company s investment The initial fair value of hedge components excluded from the assessment of effectiveness is recognized in the Consolidated Statement of Operations under a systematic and rational method over the life of the hedging instrument The excluded component is recognized in Interest expense and finance charges net on the Consolidated Statement of Operations The Company classifies cash flows related to the settlement of its net investment hedges as investing activities in the Consolidated Statements of Cash Flows
For derivative instruments that are not designated as hedges gains and losses resulting from changes in fair value on derivative instruments are reported in the Consolidated Statements of Operations in the current period
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 Company s capitalized software has been obtained or developed for internal use only Development and acquisition costs are capitalized for computer software only when management authorizes and commits to funding a computer software project through the approval of a capital expenditure requisition and the software project is either for the development of new software to increase the life of existing software or to add significantly to the functionality of existing software Once these requirements have been met capitalization would begin at the point that conceptual formulation evaluation design and testing of possible software project alternatives have been completed Capitalization ceases when the software project is substantially complete and ready for its intended use
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
The values assigned to intangible assets include estimates and judgment regarding expectations for the length of customer relationships acquired in a business combination Included within intangible assets is an indefinite lived trade name intangible asset The Company s indefinite lived trade name intangible asset is considered a single unit of accounting and is tested for impairment at the consolidated level annually as of September 1 and more frequently if events or changes in circumstances indicate that it is more likely than not that the asset is impaired Other 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 as of September 1 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 The Company also has the option to bypass the qualitative assessment for any reporting unit in any period
If the reporting unit does not pass or the Company chooses to bypass 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 working capital requirements future economic conditions discount rates 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
Finite lived intangible assets consist primarily of customer relationships vendor lists and other intangible assets 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
The Company reviews the recoverability of its long lived assets including finite lived intangible assets property and equipment right of use ROU assets and certain other assets when events or changes in circumstances occur that indicate the carrying value of the asset or asset group may not be recoverable The assessment of possible impairment is based on the Company s ability to recover the carrying value of the asset or asset group from the expected future pre tax cash flows undiscounted and without interest charges of the related operations If these cash flows are less than the carrying value of such assets an impairment loss is recognized for the difference between estimated fair value and carrying value
The Company enters into leases as a lessee for property and equipment in the ordinary course of business When procuring goods or services or upon entering into a contract with its customers 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 When the Company is the lessee all leases with a term of more than 12 months are recognized as 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 Substantially all of the Company s leases are classified as operating leases and the Company s finance leases are not material 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 and Cost of revenue in the Consolidated Statements of Operations Operating lease payments are presented within Cash flows from operating activities in the Consolidated Statements of Cash Flows
Financial instruments that potentially subject the Company to significant concentration of credit risk consist principally of cash and cash equivalents accounts receivable receivables from vendors 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 2024 the Company has not experienced any material credit losses
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 credit insurance and specifically identified customer and vendor risks
One customer accounted for 12 11 and 10 of the Company s total revenue in fiscal years 2024 2023 and 2022 respectively As of November 30 2024 and 2023 no single customer comprised more than 10 of the consolidated accounts receivable balance
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
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 w
ith specific contractual provisions Payments are due as per contract terms and do not contain a significant financing component In relation to product support supply chain management and other services performed by the Company revenue is recognized over time as the services are performed
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 include supplier service contracts post contract software support services cloud computing and software as a service arrangements certain fulfillment contracts extended warranty contracts and certain of the Company s systems design and integration solutions arrangements which operate under a customer owned procurement model
The Company considers shipping and handling activities as costs to fulfill the sale of products Shipping revenue is included in revenue when control of the product is transferred to the customer and the related shipping and handling costs are included in cost of revenue
The Company disaggregates its operating segment revenue by geography which the Company believes provides a meaningful depiction of the nature of its revenue Disaggregated revenue disclosure is presented in
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
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 intangible assets
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
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
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 2 services with regard to products integrated for its customers and 3 products sold in countries where the Company is responsible for defective product as a matter of law The time period required by law in certain countries exceeds the warranty period provided by the manufacturer The Company is obligated to provide warranty protection for sales of certain IT products within the European Union EU for up to two years as required under the EU directive where vendors have not affirmatively agreed to provide pass through protection Warranty expense and the accrual for warranty costs were not material to the Company s Consolidated Financial Statements for any of the periods presented
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
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 included 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
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 Cost of revenue and Other expense net
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 and unrealized gains and losses on cash flow hedges
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 grant 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
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
Repurchases of shares of common stock are accounted for at cost which includes brokerage fees and excise taxes and are included as a component of stockholders equity in the Consolidated Balance Sheets Shares repurchased by the Company are held in treasury for general corporate purposes including issuances under stock incentive plans The reissuance of shares from treasury stock is based on the weighted average purchase price of the shares
Certain reclassifications have been made to prior period amounts in the Consolidated Financial Statements to conform to the current period presentation These reclassifications did not have a material impact on previously reported amounts
In September 2022 the FASB issued an accounting standards update ASU 2022 04 which requires new enhanced disclosures by the buyer in supplier finance programs Disclosures will include key terms of the program including payment terms along with the amount of related obligations the financial statement caption that includes such obligations and a rollforward of activity related to the obligations during the period The new accounting standard must be adopted retrospectively to the earliest comparative period presented except for the rollforward requirement which should be adopted prospectively The Company adopted this standard during the fiscal quarter ended February 29 2024 except for the annual rollforward requirement which will be effective for the Company beginning with the fiscal year ending November 30 2025 The adoption of the new standard did not have an impact on the Company s results of operations financial condition or cash flows For the required disclosures of key terms and amounts outstanding under the Company s Supplier Finance Programs see
In November 2023 the FASB issued an accounting standards update ASU 2023 07 which requires the following enhanced segment disclosures on an annual and interim basis 1 significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss 2 other segment items by reportable segment and a description of its composition and 3 the title of the chief operating decision maker an explanation of how they use the reported measures of segment profit loss in assessing segment performance and decide how to allocate resources as well as clarifications if they use more than one measure of a segment s profit or loss in assessing segment performance The amendments in ASU 2023 07 are effective for annual periods beginning after December 15 2023 which for the Company would be for the fiscal year ending November 30 2025 and for subsequent interim periods Early adoption is permitted The Company is currently evaluating the impact the new accounting standard will have on its segment reporting disclosures in the notes to the consolidated financial statements
In December 2023 the FASB issued an accounting standards update ASU 2023 09 which requires enhanced income tax disclosures The enhanced disclosures required include disclosure of specific categories and disaggregation of information in the rate reconciliation table ASU 2023 09 also requires disclosure of disaggregated information related to income taxes paid income or loss from continuing operations before income tax expense or benefit and income tax expense or benefit from continuing operations The amendments in ASU 2023 09 are effective for annual periods beginning after December 15 2024 which for the Company would be the fiscal year ending November 30 2026 Early adoption is permitted and the amendments should be applied on a prospective basis Retrospective application is permitted The Company is currently evaluating the impact the new accounting standard will have on its income tax disclosures in the notes to the consolidated financial statements
In November 2024 the FASB issued an accounting standards update ASU 2024 03 which requires new tabular disclosures in the notes to consolidated financial statements disaggregating certain cost and expense categories within relevant captions on the Consolidated Statements of Operations The prescribed cost and expense categories requiring disaggregated disclosures include purchases of inventory employee compensation depreciation and intangible asset amortization along with certain other expense disclosures already required by U S GAAP that would need to be integrated within the new tabular disaggregated expense disclosures Additionally the amendments also require the disclosure of total selling expenses and an entity s definition of those expenses The amendments in ASU 2024 03 are effective for annual periods beginning after December 15 2026 which for the Company would be the fiscal year ending November 30 2028 and for subsequent interim periods Early adoption is permitted and the amendments should be applied on a prospective basis Retrospective application is permitted The Company is currently evaluating the impact the new accounting standard will have on its expense disclosures in the notes to the consolidated financial statements
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 9 4 million and
respectively Acquisition integration and restructuring costs related to other acquisitions were 3 0 million for fiscal year 2024 The Company does not expect to incur additional costs under the GBO 2 Program in future periods
On March 22 2021 the Company entered into an agreement and plan of merger the Merger Agreement which provided that legacy SYNNEX Corporation would acquire legacy Tech Data Corporation a Florida corporation Tech Data through a series of mergers which would result in Tech Data becoming an indirect subsidiary of TD SYNNEX Corporation collectively the Merger On September 1 2021 pursuant to the terms of the Merger Agreement the Company acquired all the outstanding shares of common stock of
Parent AP Corporation the parent corporation of Tech Data for consideration of 1 6 billion in cash 1 1 billion in cash after giving effect to a 500 0 million equity contribution by Tiger Parent Holdings L P Tiger Parent AP Corporation s sole stockholder and an affiliate of Apollo Global Management Inc to Tiger Parent AP Corporation prior to the effective time of the Merger and 44 million shares of common stock of SYNNEX valued at approximately 5 6 billion The combined company is referred to as TD SYNNEX
The Company substantially completed the acquisition integration and restructuring activities related to the Merger during the first half of fiscal year 2024 and there are no material related expenses expected in future periods The Company 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 L
of 5 5 million 17 4 million and 64 4 million during fiscal years 2024 2023 and 2022 respectively due to changes in asset useful lives in conjunction with the consolidation of certain IT systems Long lived asset charges and termination fees also include 17 0 million and 24 4 million recorded during fiscal years 2024 and 2023 respectively for termination fees related to certain IT systems along with 4 7 million for impairment charges recorded during fiscal year 2022 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
In July 2023 the Company offered a voluntary severance program VSP to certain co workers in the United States as part of the Company s cost optimization efforts related to the Merger The Company incurred 10 1 million of costs in connection with the VSP during fiscal year 2024 including 8 0 million of severance costs and 2 1 million of duplicative labor costs The Company incurred 52 1 million of costs in connection with the VSP during fiscal year 2023 including 42 3 million of severance costs and 9 8 million of duplicative labor costs
The Company s stock incentive plans include plans adopted in 2020 and 2013 the TD SYNNEX Plan s The TD SYNNEX Plans as amended provide for the direct award or sale of shares of common stock restricted stock awards RSAs restricted stock units RSUs 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 No further grants may be made under the 2013 TD SYNNEX Plan and all outstanding awards under the 2013 TD SYNNEX Plan continue to be governed by their existing terms As of November 30 2024 there were 2 3 million shares of common stock authorized under the 2020 TD SYNNEX Plan available for future grants
Under the TD SYNNEX 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 RSAs and RSUs
The outstanding RSAs and RSUs generally vest ratably on an annual basis over a period of three to five years with certain awards subject to other vesting periods as defined per the grant agreement RSAs granted to qualified non employee directors vest one fourth on a quarterly basis over a one year period The holders of RSAs are entitled to the same voting dividend and other rights as the Company s common stockholders Certain RSUs vest subject to the achievement of individual divisional or company wide performance goals These performance based RSUs 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
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
The Company recognizes share based compensation expense for all share based awards made to employees and outside directors including employee stock options RSAs RSUs performance based RSUs and employee stock purchase rights based on estimated fair values
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 is 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 RSUs the grant date fair value assumes that the targeted performance goals will be achieved Over the performance period the number of awards expected to vest will be adjusted higher or lower based on the probability of achievement of performance goals
As of November 30 2024 482 thousand stock options were outstanding with a weighted average remaining contractual term of 3 79 years a weighted average exercise price of 78 52 per share and an aggregate pre tax intrinsic value of 19 5 million As of November 30 2024 444 thousand options were vested and exercisable with a weighted average remaining contractual term of 3 55 years a weighted average exercise price of 76 52 per share and an aggregate pre tax intrinsic value of 18 9 million
As of November 30 2024 the unamortized share based compensation expense related to unvested stock options under the TD SYNNEX Plans was 0 5 million which will be recognized over an estimated weighted average amortization period of 1 57 years
The weighted average grant date fair value of the 635 thousand RSAs and RSUs granted during fiscal year 2023 was 96 75 The weighted average grant date fair value of the 691 thousand RSAs and RSUs granted during fiscal year 2022 was 93 95 The total fair value of RSAs and RSUs vested during fiscal years 2024 2023 and 2022 was 73 0 million 54 4 million and 32 9 million respectively
As of November 30 2024 there was 82 7 million of total unamortized share based compensation expense related to non vested RSAs and RSUs granted under the TD SYNNEX Plans That cost is expected to be recognized over an estimated weighted average amortization period of 1 83 years
Prior to the Merger certain of Tech Data s employees were granted performance based equity awards in Tiger Parent Holdings L P a partnership entity that was the parent company of Tiger Parent AP Corporation and Tech Data that were unvested at the time of the closing of the Merger Upon closing of the Merger the unvested performance based equity awards were converted i
The restricted shares had a fair value of 127 60 per share upon closing of the Merger which was recorded as share based compensation expense on a straight line basis over the vesting period in Acquisition integration and restructuring costs in the Consolidated Statement of Operations Vesting of the restricted shares was completed as of September 1 2023 therefore there was no related share based compensation expense recorded by the Company during fiscal year 2024 The Company recorded 29 2 million and 45 7 million of share based compensation expense related to these restricted shares in Acquisition integration and restructuring costs during fiscal years 2023 and 2022 respectively
On January 10 2024 the Board of Directors approved the adoption of the 2024 Employee Stock Purchase Plan 2024 ESPP to succeed the Company s 2014 Employee Stock Purchase Plan The 2024 ESPP commenced with 750 thousand authorized shares Under the 2024 ESPP there are two offering periods per calendar year Eligible employees in the United States and Canada can choose to have a fixed percentage deducted from their bi weekly compensation to purchase the Company s common stock at a discount of 15 subject to a maximum purchase limit of 25 thousand in fair market value of common stock in a calendar year
During fiscal years 2024 2023 and 2022 the Company recognized income tax benefits related to the plans discussed above of 15 6 million 12 6 million and 8 2 million respectively within the provision for income taxes
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 the March 2024 share repurchase program supplementing the 196 7 million remaining authorization under the prior program pursuant to which the Company may repurchase its outstanding common stock from time to time in the open market or through privately negotiated transactions including pursuant to one or more Rule 10b5 1 trading plans adopted in accordance with Rule 10b5 1 of the Securities Exchange Act of 1934 The March 2024 share repurchase program does not have an expiration date
On January 31 2024 March 27 2024 and April 4 2024 the Company announced the closing of secondary public offerings the Offerings of an aggregate of 26 2 million shares in total which includes approximately 2 7 million of additional shares that underwriters had the option to purchase of its common stock that were sold by certain entities managed by affiliates of Apollo Global Management Inc the Selling Stockholders All the shares in the Offerings were sold by the Selling Stockholders The Company did not receive any of the proceeds from the sale of shares by the Selling Stockholders in the Offerings Also pursuant to the related underwriting agreements the Company repurchased a total of 3 6 million shares of its common stock from the respective underwriters as part of the Offerings for a total purchase price in the aggregate of approximately 392 3 million the Concurrent Share Repurchases The Offerings reduced the Selling Stockholders ownership interest in the Company to zero
The Concurrent Share Repurchases were all made under the Company s share repurchase programs described above and are included within the caption Shares of treasury stock purchased under share repurchase program in the table below
Weighted average price per share excludes broker s commissions and excise taxes Repurchases of common stock in the Consolidated Statements of Cash Flows for the twelve months ended November 30 2024 and
excludes amounts related to excise tax that when accrued are recorded in Other current liabilities and Treasury stock on the Consolidated Balance Sheets Excise taxes paid are classified as operating activities in the Consolidated Statements of Cash Flows
The Company declared cumulative cash dividends of 1 60 1 40 and 1 20 per share during the years ended November 30 2024 2023 and 2022 respectively On January 10 2025 the Company announced a cash dividend of 0 44 per share to stockholders of record as of January 24 2025 payable on January 31 2025 Dividends are subject to continued capital availability and the declaration by the Board of Directors in the best interest of the Company s stockholders
Depreciation and amortization expense for fiscal years 2024 2023 and 2022 was 115 2 million 124 6 million and 164 2 million respectively Fiscal years 2024 2023 and 2022 include accelerated depreciation and amortization expense of 5 5 million 17 4 million and 64 4 million respectively due to changes in asset useful lives in conjunction with the consolidation of certain IT systems which is recorded in Acquisition integration and restructuring costs in the Consolidated Statements of Operations
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 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 accumulated other comprehensive loss AOCI in the Consolidated Balance Sheets as discussed below
The Company uses interest rate swap derivative contracts to economically convert a portion of its variable rate debt to fixed rate debt 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 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 The Company terminated its remaining interest rate swaps in May 2023 and had no interest rate swaps designated as cash flow hedges outstanding as of November 30 2024
The Company has entered into foreign currency forward contracts as well as foreign currency forward contracts combined with zero cost foreign exchange collar contracts to hedge a portion of its net investment in euro denominated foreign operations which are designated as net investment hedges The Company entered into the net investment hedges to offset the risk of change in the U S dollar value of the Company s investment in a euro functional subsidiary due to fluctuating foreign exchange rates The Company s net investment hedges mature in various periods through 2031
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
The notional amounts of foreign exchange forward contracts represent the gross amounts of foreign currency including principally the Australian dollar Brazilian real British pound Canadian dollar Chinese yuan Czech koruna Danish krone Euro Indian rupee Indonesian rupiah Japanese yen Mexican peso Norwegian krone Polish zloty Romanian leu Singapore dollar Swedish krona Swiss franc and Turkish lira that will be bought or sold at maturity The notional amounts of foreign exchange collar contracts represent the amounts of put and call options to sell or purchase Euros at a predetermined strike price 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
The following table shows the gains and losses before taxes of the Company s derivative instruments designated as cash flow hedges and net investment hedges in Other Comprehensive Income OCI and not designated as hedging instruments in the Consolidated Statements of Operations for the periods presented
The Company terminated interest rate swaps with a notional value of 400 0 million in December 2021 the December 2021 Terminations Cumulative losses from the December 2021 Terminations totaled 16 0 million and were reclassified from AOCI to Interest expense and finance charges net over the period through September 2023 The Company additionally terminated interest rate swaps with a notional value of 1 0 billion in May 2023 the May 2023 Terminations Cumulative gains from the May 2023 Terminations totaled 10 0 million and were reclassified from AOCI to Interest expense and finance charges net over the period through October 2023
Except for the net investment hedge amounts shown above there were no material gain or loss amounts excluded from the assessment of effectiveness There are no existing gains or losses in AOCI expected to be reclassified into earnings in the normal course of business within the next 12 months
Credit exposure for derivative financial instruments is limited to the amounts if any by which the counterparties obligations under the contracts exceed the Company s obligations to the counterparties 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
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 The fair values of foreign exchange collar contracts are measured using the cash flow of the contracts discount rates to account for the passage of time implied volatility and current foreign exchange market data which are all based on inputs readily available in public markets The effect of nonperformance risk on the fair value of derivative instruments was not material as of November 30 2024 and 2023
The carrying values of accounts receivable accounts payable and short term debt approximate fair value due to their short maturities and interest rates which are variable in nature The carrying value of the Company s term loans approximate their fair value since they bear interest rates that are similar to existing market rates The estimated fair value of the Senior Notes was approximately 2 3 billion and 2 2 billion at November 30 2024 and 2023 respectively
The interest rate payable on each of these series of Senior Notes is subject to adjustment from time to time if the credit rating assigned to such series of Senior Notes is downgraded or downgraded and subsequently upgraded
The Company pays interest semi annually on the Senior Notes on each of February 9 and August 9 except for the 2034 Senior Notes in which the Company pays interest semi annually on each of April 12 and October 12 which commenced on October 12 2024
In the U S the Company has an accounts receivable securitization program to provide additional capital for its operations the U S AR Arrangement Under the terms of the U S AR Arrangement as amended the Company and its subsidiaries that are party to the U S AR Arrangement can borrow based on the key terms in the table below currency in thousands
Under the terms of the U S AR Arrangement the Company and certain of its U S subsidiaries sell on a revolving basis their receivables to a wholly owned bankruptcy remote subsidiary Such receivables which are recorded in the Consolidated Balance Sheet totaled approximately 3 4 billion as of both November 30 2024 and 2023 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 borrowed under the U S AR Arrangement are recorded as debt on the Company s Consolidated Balance Sheets There were no amounts outstanding under the U S AR Arrangement at November 30 2024 or 2023
The Company is party to an amended and restated credit agreement dated as of April 16 2024 as amended the TD SYNNEX Credit Agreement with the lenders party thereto and Citibank N A as agent pursuant to which the Company received commitments for the extension of a senior unsecured revolving credit facility the TD SYNNEX Revolving Credit Facility not to exceed an aggregate principal amount of 3 5 billion which may at the request of the Company but subject to the lenders discretion potentially be increased by up to an aggregate amount of 500 0 million The borrowers under the TD SYNNEX Credit Agreement are TD SYNNEX Corporation and certain subsidiaries of the Company
There were no amounts outstanding under the TD SYNNEX Revolving Credit Facility at November 30 2024 or 2023 Borrowings under the TD SYNNEX Revolving Credit Facility bear interest at a per annum rate equal to the applicable SOFR rate plus a credit spread adjustment plus the applicable margin as well as a commitment fee as referenced in the table below
The margin is based on the Company s Public Debt Rating as defined in the TD SYNNEX Credit Agreement The applicable margin on base rate loans is 1 00 less than the corresponding margin on SOFR rate based loans
Loans borrowed under the TD SYNNEX Credit Agreement bear interest at a per annum rate equal to the applicable SOFR rate plus a credit spread adjustment plus the applicable margin as well as a commitment fee as referenced in the table below
the Company entered into a Term Loan Credit Agreement the 2024 Term Loan Credit Agreement with the initial lenders party thereto Bank of America N A as administrative agent for the lenders and BOFA Securities Inc as lead arranger and lead bookrunner The 2024 Term Loan Credit Agreement provides for a senior unsecured term loan in the aggregate principal amount of
Loans borrowed under the 2024 Term Loan Credit Agreement bear interest at a per annum rate equal to the applicable SOFR rate plus credit spread adjustment plus the applicable margin within a range based on the Company s Public Debt Rating as defined in the 2024 Term Loan Credit Agreement Key terms for the 2024 Term Loan Credit Agreement are as follows
On August 9 2021 the Company completed its offering of 2 5 billion aggregate principal amount of senior unsecured notes due in 2024 2026 2028 and 2031 collectively the Senior Notes and such offering the Senior Notes Offering
In July 2022 the Company completed an offer to exchange the Exchange Offer its outstanding unregistered Senior Notes for new registered notes the Exchange Notes The aggregate principal amount of Exchange Notes that were issued was equal to the aggregate principal amount of Senior Notes that were surrendered pursuant to the Exchange Offer The terms of the Exchange Notes are substantially identical to the terms of the respective series of the Senior Notes except that the Exchange Notes are registered under the Securities Act and certain transfer restrictions registration rights and additional interest provisions relating to the Senior Notes do not apply to the Exchange Notes
senior notes due in 2034 the 2034 Senior Notes and such offering the 2034 Senior Notes Offering The Company used the net proceeds from the 2034 Senior Notes Offering together with other available funds to repay the 700 0 million aggregate principal amount of the 1 250 Senior Notes that were due August 9 2024 and for general corporate purposes The Company incurred 6 1 million towards issuance costs on the 2034 Senior Notes References to the collective Senior Notes hereafter also include the 2034 Senior Notes
The Company may redeem the outstanding Senior Notes in whole or in part at any time and from time to time prior to respective Par Call Dates at a redemption price equal to the greater of x 100 of the aggregate principal amount of the applicable Senior Notes to be redeemed and y the sum of the present values of the remaining scheduled payments of the principal and interest on the Senior Notes in each case discounted to the date of redemption assuming the applicable Senior Notes matured on the applicable Par Call Date on a semi annual basis assuming a 360 day year consisting of twelve 30 day months at a rate equal to the sum of the applicable treasury rate as defined in the supplemental indenture establishing the terms of the applicable Senior Notes plus the applicable spread as shown in the table below plus in each case accrued and unpaid interest thereon to but excluding the redemption date The Company may also redeem the Senior Notes of any series at its option in whole or in part at any time and from time to time on or after the applicable Par Call Date at a redemption price equal to 100 of the principal amount of the Senior Notes to be redeemed
The Company has various other committed and uncommitted lines of credit with financial institutions short term loans term loans credit facilities and book overdraft facilities totaling approximately 570 5 million in borrowing capacity as of November 30 2024 Most of these facilities are provided on a short term basis and are reviewed periodically for renewal Interest rates and other terms of borrowing under these lines of credit vary by country depending on local market conditions There was 171 1 million outstanding on these facilities at November 30 2024 at a weighted average interest rate of 7 91 and there was 208 7 million outstanding at November 30 2023 at a weighted average interest rate of 7 52 Borrowings under these lines of credit facilities are guaranteed by the Company or secured by eligible accounts receivable
At November 30 2024 the Company was also contingently liable for reimbursement obligations with respect to issued standby letters of credit in the aggregate outstanding amount of 47 8 million These letters of credit typically act as a guarantee of payment to certain third parties in accordance with specified terms and conditions
require the Company to maintain specified financial ratios including a maximum debt to EBITDA ratio and a minimum interest coverage ratio in each case tested on the last day of each fiscal quarter The covenants also limit the Company s ability to incur additional debt create liens enter into agreements with affiliates modify the nature of the Company s business and merge or consolidate As of November 30 2024 the Company was in compliance with all material covenants for the above arrangements
The Company has certain arrangements with third party financial institutions Supplier Finance Programs which facilitate the participating vendors ability to sell their accounts receivable from the Company to third party financial institutions at the sole discretion of these vendors The Company is not party to the agreements between the vendor and the third party financial institution As part of these arrangements the Company generally receives more favorable payment terms from its vendors The Company s rights and obligations to its vendors including amounts due are generally not impacted by Supplier Finance Programs However the Company agrees to make all payments to the third party financial institutions and the Company s right to offset balances due from vendors against payment obligations is restricted by the agreements for those payment obligations that have been sold by the respective vendors The Company generally does not incur any fees under Supplier Finance Programs however the Company did recognize an immaterial amount of fees during fiscal year 2024 within Cost of revenue in the Company s Consolidated Statements of Operations related to an arrangement with a certain vendor As of November 30 2024 and November 30 2023 the Company had 3 2 billion and 2 7 billion respectively in obligations outstanding under these programs included in Accounts payable in the Company s Consolidated Balance Sheets and all activity related to the obligations is presented within operating activities in the Consolidated Statements of Cash Flows
The Company attributes revenues from external customers to the country from where products are delivered Except for the U S no other country accounted for 10 or more of the Company s revenue for the periods presented
The Company has 401 k plans in the U S under which eligible co workers may contribute up to the maximum amount as provided by law Co workers generally 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 During fiscal years 2024 2023 and 2022 the Company contributed 17 0 million 17 3 million and 15 8 million respectively to these 401 k plans Co workers in certain of the Company s international subsidiaries are covered by government mandated defined contribution plans which are not material to operations Additionally the Company has defined benefit plans sponsored by certain international subsidiaries which are not material to its operations
The decrease in the Company s net deferred tax liability position is primarily due to a reversal of a portion of the Company s deferred tax liabilities The net change in the deferred tax valuation allowances in fiscal 2024 was a decrease of 11 7 million primarily resulting from the release of valuation allowances on foreign tax credits in certain jurisdictions for which a valuation allowance had previously been established
The valuation allowance at November 30 2024 and November 30 2023 primarily relates to carryforwards for foreign net operating losses and foreign tax credits in the United States The Company considers all positive and negative evidence available in determining the potential of realizing deferred tax assets To the extent that the Company generates consistent taxable income within those operations with valuation allowances the Company may reduce the valuation allowances thereby reducing income tax expense and increasing net income in the period the determination is made
The Company s net operating loss carryforwards totaled 265 1 million at November 30 2024 The majority of the net operating losses have an indefinite carryforward period with the remaining portion expiring in fiscal years 2025 through 2043 In addition the Company has a 22 4 million net amount of state net operating losses with the majority having an indefinite carryforward period The Company s foreign tax credit carryforwards in the United States totaled 36 3 million at November 30 2024 The foreign tax credits have a ten year carryforward period and the majority is set to expire in fiscal year 2025
The Company s U S business has sufficient cash flow and liquidity to fund its operating requirements and the Company expects and intends that profits earned outside the U S will be utilized and reinvested outside of the U S
As of November 30 2024 the Company had approximately 1 9 billion of undistributed earnings of its non U S subsidiaries The Company intends to indefinitely reinvest the remaining earnings from its foreign subsidiaries for which a deferred tax liability has not already been recorded 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
The Company has been granted tax holidays in certain jurisdictions primarily China The tax holidays provide for lower rates of taxation and require various thresholds of investment and business activities in those jurisdictions Certain tax holidays will begin to expire in fiscal year 2025 The tax benefits from the above tax holidays for fiscal years 2024 2023 and 2022 were not material
The estimates and assumptions used by the Company in computing the income taxes reflected in the Company s consolidated financial statements could differ from the actual results reflected in the income tax returns filed during the subsequent year Adjustments are recorded based on filed returns when such returns are finalized or the related adjustments are identified
The Organization for Economic Co operation and Development has published a proposal to establish a new global minimum corporate tax rate of 15 commonly referred to as Pillar Two While the U S has not yet adopted the Pillar Two framework into law several countries in which we operate have enacted tax legislation based on the Pillar Two framework with certain components of the minimum tax rules effective beginning in 2024 fiscal year 2025 for the Company and further rules becoming effective beginning in 2025 These rules are not expected to materially impact the Company s Consolidated Financial Statements The Company will continue to monitor U S and global legislative action related to Pillar Two for potential impacts
As of November 30 2024 the amount of unrecognized tax benefits that if recognized would impact the effective tax rate was 16 8 million Unrecognized tax benefits that have a reasonable possibility of significantly decreasing within the 12 months following November 30 2024 would not have a material impact on the tax rate The Company recognizes interest and penalties related to unrecognized tax benefits in the provision for income taxes The Company s accrued interest and penalties at November 30 2024 would not have a material impact on the effective tax rate if reversed The provision for income taxes for each of the fiscal years ended November 30 2024 2023 and 2022 includes interest expense on unrecognized income tax benefits for current and prior years which is not significant to the Company s Consolidated Statement of Income The change in the balance of accrued interest for fiscal 2024 2023 and 2022 includes the current year end accrual an interest benefit resulting from the expiration of statutes of limitation and the translation adjustments on foreign currencies
The Company conducts business primarily in the Americas Europe and APJ and as a result one or more of its subsidiaries files income tax returns in the U S federal various state local and foreign tax jurisdictions In the normal course of business the Company is subject to examination by taxing authorities The Company is no longer subject to examinations by the Internal Revenue Service for years before fiscal 2021 The Company is no longer subject to foreign or state income tax audits for returns covering years through 2011 and fiscal year 2017 respectively
On December 1 2020 the Company completed the previously announced separation of its customer experience services business the Separation in a tax free transaction for federal income tax purposes which was accomplished by the distribution of one hundred percent of the outstanding common stock of Concentrix Corporation Concentrix 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 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
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
As is customary in the technology industry to encourage certain customers to purchase products from us the Company also has other financing agreements with financial institutions to provide inventory financing facilities to the Company s customers and allow certain customers of the Company to finance their purchases directly with the financial institutions The Company is contingently liable to repurchase inventory sold under these agreements in the event of any default by its customers under the agreement and such inventory being repossessed by the financial institutions
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 Repurchases under these arrangements have been insignificant to date 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
In 2013 the French Autorité de la Concurrence Competition Authority began an investigation into the French market for certain products of Apple Inc Apple for which the Company is a distributor In March 2020 the Competition Authority imposed fines on the Company on another distributor and on Apple finding that the Company entered into an anticompetitive agreement with Apple regarding volume allocations of Apple products The initial fine imposed on the Company was 76 1 million The Company appealed its determination to the French courts seeking to set aside or reduce the fine On October 6 2022 the appeals court issued a ruling that reduced the fine imposed on the Company from 76 1 million to 24 9 million As a result of the appeals court ruling the Company paid 24 9 million through fiscal year 2022 The Company decreased its accrual established for this matter by 10 8 million during fiscal year 2022
The Company continues to contest the arguments of the Competition Authority and has further appealed this matter A civil lawsuit related to this matter alleging anticompetitive actions in association with the established distribution networks for Apple the Company and another distributor was filed by eBizcuss On November 25 2024 the Paris Commercial Court ruled in favor of the Company and the other defendants and dismissed the claims in the eBizcuss civil lawsuit An appeal to the ruling has since been made by eBizcuss and while the Company continues to evaluate this matter based on the favorable ruling from the Paris Commercial Court the Company believes the likelihood of a material loss related to the eBizcuss lawsuit 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 in cases where a contingent obligation is deemed probable and reasonably estimable It is possible that the ultimate liabilities could differ from the amounts recorded
We maintain disclosure controls and procedures as such term is defined in Rule 13a 15 e under the Securities Exchange Act of 1934 the Exchange Act that are designed to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded processed summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms and that such information is accumulated and communicated to our management including our Chief Executive Officer and Chief Financial Officer as appropriate to allow timely decisions regarding required disclosures In designing and evaluating our disclosure controls and procedures management recognized that disclosure controls and procedures no matter how well conceived and operated can provide only reasonable not absolute assurance that the objectives of the disclosure controls and procedures are met Our disclosure controls and procedures have been designed to meet reasonable assurance standards Additionally in designing disclosure controls and procedures our management necessarily was required to apply its judgment in evaluating the cost benefit relationship of possible disclosure controls and procedures The design of any disclosure controls and procedures is also based in part upon certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions
Based on their evaluation as of the end of the period covered by this Report our Chief Executive Officer our principal executive officer and Chief Financial Officer our principal financial officer have concluded that as of such date our disclosure controls and procedures were effective at the reasonable assurance level
Management s Report on Internal Control over Financial Reporting on page 48 and the attestation report of KPMG LLP an independent registered public accounting firm on page 49 is incorporated herein by reference
There were no changes in our internal control over financial reporting as defined in Rule 13a 15 f under the Exchange Act identified in connection with management s evaluation during our last quarter of fiscal 2024 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting
On October 13 2024 Dennis Polk a member of the Company s Board of Directors and Hyve Solutions Executive adopted a trading arrangement on behalf of the Polk family trust of which Mr Polk is a trustee for the sale of securities of the Company s common stock that is intended to satisfy the affirmative defense conditions of Securities Exchange Act Rule 10b5 1 c The Rule 10b5 1 trading arrangement provides for the sale of up to 35 853 shares of common stock until February 3 2026 pursuant to the terms of the plan
The information required by this item with respect to Directors as well as the information required by Item 407 c 3 if applicable and 407 d 4 and d 5 of Regulation S K is incorporated by reference from the information under the captions Election of Directors and Corporate Governance Organization of the Board of Directors contained in our Proxy Statement to be filed with the Securities and Exchange Commission in connection with the solicitation of proxies for our 2025 Annual Meeting of Stockholders to be held on April 2 2025 the Proxy Statement Certain information also required by Item 401 of Regulation S K concerning executive officers is set forth in Part I of this Report under the caption Information About Our Executive Officers
Item 405 of Regulation S K calls for disclosure of any known late filing or failure by an insider to file a report required by Section 16 a of the Exchange Act To the extent disclosure for delinquent reports is being made it can be found under the caption Delinquent Section 16 a Reports in the Proxy Statement and is incorporated herein by reference
With respect to Item 406 of Regulation S K we have adopted a code of ethics that applies to all of our co workers including our principal executive officer our principal financial officer our principal accounting officer our controllers and persons performing similar functions This code of ethical business conduct called Code of Conduct Our Shared Principles is available free of charge on our public website www tdsynnex com on the investor relations webpage Future amendments or waivers relating to the code of ethics will be disclosed on the webpage referenced in this paragraph within five 5 business days following the date of such amendment or waiver
With respect to Item 408 b of Regulation S K the Company has an insider trading policy governing the purchase sale and other dispositions of the Company s securities that applies to the Company and its personnel including officers directors all other co workers of the Company and its subsidiaries and other covered persons The Company believes that its insider trading policy is reasonably designed to promote compliance with insider trading laws rules and regulations and listing standards applicable to the Company A copy of the Company s insider trading policy is filed as Exhibit 19 1 to this Form 10 K
The information required by this item is incorporated by reference from the information under the captions Executive Compensation Corporate Governance 2024 Directors Compensation Table Corporate Governance Narrative to Directors Compensation Table and Corporate Governance Compensation Committee Interlocks and Insider Participation contained in the Proxy Statement
The information required by this item of Regulation S K with respect to security ownership of certain beneficial owners and management is incorporated by reference from the information under the caption Security Ownership of Certain Beneficial Owners and Management contained in the Proxy Statement
Includes the number of shares reserved for issuance under our 2020 Plan The number of shares initially authorized for issuance under our 2020 Plan will not exceed the sum of i 2 493 196 shares of common stock plus ii any shares under the 2013 Plan that are subject to outstanding awards 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 a maximum of 1 443 193 shares Due to antidilution provisions in the 2020 TD SYNNEX Plan the number of authorized shares was increased by 2 620 859 shares following the Separation Please see
The information required by this item is incorporated by reference from the information contained under the caption Certain Relationships and Related Party Transactions and Election of Directors contained in the Proxy Statement
The information required by this item is incorporated by reference from the information contained under the caption Ratification of the Appointment of Independent Registered Public Accountants contained in the Proxy Statement
Agreement and Plan of Merger dated as of March 22 2021 by and among SYNNEX Spire Sub I Inc Spire Sub II LLC and Tiger Parent AP Corporation incorporated by reference to Exhibit 2 1 to the Company s Current Report on Form 8 K filed on March 22 2021
Description of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934 incorporated by reference to Exhibit 4 1 to the Company s Annual Report on Form 10 K for the year ended November 30 2021
Indenture dated as of August 9 2021 by and between SYNNEX Corporation and Citibank N A as trustee incorporated by reference to Exhibit 4 1 to the Company s Current Report on Form 8 K filed on August 9 2021
First Supplemental Indenture dated as of August 9 2021 between SYNNEX Corporation and Citibank N A as trustee incorporated by reference to Exhibit 4 2 to the Company s Current Report on Form 8 K filed on August 9 2021
Second Supplemental Indenture dated as of August 9 2021 between SYNNEX Corporation and Citibank N A as trustee incorporated by reference to Exhibit 4 3 to the Company s Current Report on Form 8 K filed on August 9 2021
Third Supplemental Indenture dated as of August 9 2021 between SYNNEX Corporation and Citibank N A as trustee incorporated by reference to Exhibit 4 4 to the Company s Current Report on Form 8 K filed on August 9 2021
Fourth Supplemental Indenture dated as of August 9 2021 between SYNNEX Corporation and Citibank N A as trustee incorporated by reference to Exhibit 4 5 to the Company s Current Report on Form 8 K filed on August 9 2021
Fifth Supplemental Indenture dated as of April 12 2024 by and between TD SYNNEX Corporation and Citibank N A as trustee incorporated by reference to Exhibit 4 2 to the Company s Current Report on Form 8 K filed on April 12 2024
Registration Rights Agreement dated as of August 9 2021 by and between SYNNEX Corporation and Citigroup Global Markets Inc as representative of the initial purchasers of the Notes incorporated by reference to Exhibit 10 1 to the Company s Current Report on Form 8 K filed on August 9 2021
Amendment No 1 to the SYNNEX Corporation 2013 Stock Incentive Plan incorporated by reference to the Company s additional definitive proxy materials to the 2013 Proxy Statement on Schedule 14A File No 001 31892 filed on March 5 2013
Form of incentive award agreements related to the SYNNEX Corporation 2013 Stock Incentive Plan incorporated by reference to Exhibit 10 2 to the Company s Quarterly Report on Form 10 Q for the quarter ended February 28 2014
Forms of incentive award agreements related to the 2020 SYNNEX Corporation Stock Incentive Plan incorporated by reference to Exhibit 10 1 to the Company s Quarterly Report on Form 10 Q filed on October 9 2020
SYNNEX Corporation Deferred Compensation Plan as amended and restated effective January 1 2005 incorporated by reference to Exhibit 10 22 to the Company s Annual Report on Form 10 K for the fiscal year ended November 30 2007
Amendment to Offer Letter dated January 4 2018 by and between SYNNEX Corporation and Dennis Polk incorporated by reference to Exhibit 10 1 to the Company s Current Report on Form 8 K filed on January 26 2021
Amendment No 2 to Offer Letter dated September 28 2021 by and between TD SYNNEX and Dennis Polk incorporated by reference to Exhibit 10 1 to the Company s Current Report on Form 8 K filed on September 28 2021
Manager s Agreement Between TS Europe Executive BVBA and Mr Patrick Zammit dated as of February 1 2017 incorporated by reference to Exhibit 10 20 to Tech Data Corporation s Form 10 K filed on March 25 2020
Addendum to the Manager s Agreement Between TS Europe Executive BVBA and Mr Patrick Zammit dated as of February 28 2017 incorporated by reference to Exhibit 10 21 to Tech Data Corporation s Form 10 K filed on March 25 2020
Separation and Distribution Agreement between SYNNEX Corporation and Concentrix Corporation dated as of November 30 2020 incorporated by reference to Exhibit 10 1 to the Current Report on Form 8 K filed on December 2 2020
Employee Matters Agreement between SYNNEX Corporation and Concentrix Corporation dated as of November 30 2020 incorporated by reference to Exhibit 10 2 to the Current Report on Form 8 K filed on December 2 2020
Tax Matters Agreement between SYNNEX Corporation and Concentrix Corporation dated as of November 30 2020 incorporated by reference to Exhibit 10 3 to the Current Report on Form 8 K filed on December 2 2020
Master Commercial Agreement between SYNNEX Corporation and Concentrix Corporation dated as of December 1 2020 incorporated by reference to Exhibit 10 4 to the Current Report on Form 8 K filed on December 2 2020
Investor Rights Agreement dated September 1 2021 between SYNNEX and Tiger Parent Holdings L P incorporated by reference to Exhibit 10 1 to the Company s Current Report on Form 8 K filed on September 2 2021
Credit Agreement dated as of April 16 2021 among SYNNEX Corporation and named Initial Lenders and Citibank N A as administrative agent incorporated by reference to Exhibit 10 1 to the Company s Current Report on Form 8 K filed on April 20 2021
Fifth Amended and Restated Receivables Funding and Administration Agreement dated as of December 22 2021 by and among SIT Funding Corporation TD SYNNEX Corporation the lenders party thereto and The Toronto Dominion Bank as agent incorporated by reference to Exhibit 10 1 to the Company s Current Report on Form 8 K filed on December 29 2021
Twentieth Amendment to Third Amended and Restated Receivables Sale and Servicing Agreement dated as of December 22 2021 by and among TD SYNNEX Corporation SIT Funding Corporation Westcon Group North America Inc the originators party thereto the lenders party thereto and The Toronto Dominion Bank as agent incorporated by reference to Exhibit 10 2 to the Company s Current Report on Form 8 K filed on December 29 2021
Amendment No 3 to Offer Letter dated January 4 2023 by and between TD SYNNEX and Dennis Polk incorporated by reference to Exhibit 10 1 to the Company s Current Report on Form 8 K filed on January 10 2023
Form of Notice of Restricted Stock Unit Award and Restricted Stock Unit Agreement time based U S incorporated by reference to Exhibit 10 5 to the Company s Current Report on Form 8 K filed on September 19 2022
Form of Notice of Restricted Stock Unit Award and Restricted Stock Unit Agreement time based non U S incorporated by reference to Exhibit 10 6 to the Company s Current Report on Form 8 K filed on September 19 2022
Form of Notice of Performance Based Restricted Stock Unit Award and Performance Based Restricted Stock Unit Agreement U S incorporated by reference to Exhibit 10 7 to the Company s Current Report on Form 8 K filed on September 19 2022
Form of Notice of Performance Based Restricted Stock Unit Award and Performance Based Restricted Stock Unit Agreement non U S incorporated by reference to Exhibit 10 8 to the Company s Current Report on Form 8 K filed on September 19 2022
First Omnibus Amendment to the Fifth Amended and Restated Receivables Funding and Administration Agreement dated as of August 22 2022 by and among SIT Funding Corporation TD SYNNEX Corporation the lenders party thereto and The Toronto Dominion Bank as agent incorporated by reference to Exhibit 10 9 to the Company s Quarterly Report on Form 10 Q for the quarter ended August 31 2022
Amendment No 1 dated as of May 22 2023 to the Credit Agreement dated as of April 16 2021 among TD SYNNEX Corporation and named Initial Lenders and Citibank N A as administrative agent incorporated by reference to Exhibit 10 1 to the Company s Quarterly Report on Form 10 Q for the quarter ended May 31 2023
Second Amendment to Fifth Amended and Restated Receivables Funding and Administration Agreement dated as of May 30 2023 by and among SIT Funding Corporation TD SYNNEX Corporation the lenders party thereto and The Toronto Dominion Bank as agent incorporated by reference to Exhibit 10 2 to the Company s Quarterly Report on Form 10 Q for the quarter ended May 31 2023
Second Omnibus Amendment to the Fifth Amended and Restated Receivables Funding and Administration Agreement and the Third Amended and Restated Receivables Sale and Servicing Agreement dated as of December 11 2023 by and among SIT Funding Corporation TD SYNNEX Corporation the originators party thereto the lenders party thereto and the Toronto Dominion Bank as agent incorporated by reference to Exhibit 10 1 to the Company s Current Report on Form 8 K filed on December 14 2023
Fourth Amendment to the Fifth Amended and Restated Receivables Funding and Administration Agreement dated as of March 29 2024 by and among TD SYNNEX Corporation SIT Funding Corporation the originators party thereto the lenders party thereto and the Toronto Dominion Bank as agent incorporated by reference to Exhibit 10 3 to the Company s Quarterly Report on Form 10 Q for the quarter ended February 29 2024
Amended and Restated Credit Agreement dated as of April 16 2024 by and among TD SYNNEX Corporation the lenders party thereto and Citibank N A as agent incorporated by reference to Exhibit 10 1 to the Company s Current Report on Form 8 K filed on April 22 2024
Credit Agreement dated as of April 19 2024 by and among TD SYNNEX Corporation the lenders party thereto and Bank of America N A as agent incorporated by reference to Exhibit 10 2 to the Company s Current Report on Form 8 K filed on April 22 2024
Third Omnibus Amendment to the Fifth Amended and Restated Receivables Funding and Administration Agreement and the Third Amended and Restated Receivables Sale and Servicing Agreement dated as of August 1 2024 by and among TD SYNNEX Corporation SIT Funding Corporation the originators party thereto the lenders party thereto and the Toronto Dominion Bank as agent incorporated by reference to Exhibit 10 3 to the Company s Quarterly Report on Form 10 Q for the quarter ended August 31 2024
Fifth Omnibus Amendment to the Fifth Amended and Restated Receivables Funding and Administration Agreement and the Third Amended and Restated Receivables Sale and Servicing Agreement dated as of December 12 2024 by and among SIT Funding LLC TD SYNNEX Corporation the originators party thereto the lenders and managing agents party thereto and the Toronto Dominion Bank as administrative agent incorporated by reference to Exhibit 10 1 to the Company s Current Report on Form 8 K filed on December 17 2024
In accordance with Item 601 b 32 ii of Regulation S K and SEC Release Nos 33 8238 and 34 47986 Final Rule Management s Reports on Internal Control Over Financial Reporting and Certification of Disclosure in Exchange Act Periodic Reports the certifications furnished in Exhibit 32 1 hereto are deemed to accompany this Form 10 K and will not be deemed filed for purpose of Section 18 of the Exchange Act Such certifications will not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act except to the extent that the registrant specifically incorporates it by reference
Schedules or similar attachments and certain information have been omitted pursuant to Items 601 a 5 601 a 6 and or 601 b 10 iv of Regulation S K TD SYNNEX hereby undertakes to furnish supplementally a copy of any omitted schedule or exhibit to such agreement to the U S Securities and Exchange Commission upon request provided however that TD SYNNEX may request confidential treatment pursuant to Rule 24b 2 of the Securities Exchange Act of 1934 as amended for any schedules or exhibits so furnished
Pursuant to the requirements of Section 13 or 15 d of the Securities Exchange Act of 1934 the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized
KNOW ALL MEN BY THESE PRESENTS that each person whose signature appears below constitutes and appoints Patrick Zammit and Marshall W Witt and each of them his true and lawful attorneys in fact each with full power of substitution for him or her in any and all capacities to sign any amendments to this report on Form 10 K and to file the same with exhibits thereto and other documents in connection therewith with the Securities and Exchange Commission hereby ratifying and confirming all that each of said attorneys in fact or their substitute or substitutes may do or cause to be done by virtue hereof
Pursuant to the requirements of the Securities Exchange Act of 1934 this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated

Company Name	TD SYNNEX CORP Vist SEC web-site
Category	WHOLESALE-COMPUTER & PERIPHERAL EQUIPMENT & SOFTWARE
Trading Symbol	SNX