(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.001 per share	SNX	The New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and ~~"emerging~~“emerging growth ~~company"~~company” in Rule 12b-2 of the Exchange Act. ~~(Check one).~~



Large accelerated filer☒	☒	Accelerated filer	☐



Non-accelerated filer☐ ~~(Do not check if a smaller reporting company)~~	☐	Smaller reporting company	☐



Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

Table of Contents

SYNNEX CORPORATION

FORM 10-Q

INDEX


		Page
PART I	FINANCIAL INFORMATION	3
Item 1.	Financial Statements	~~Page~~ 3
~~PART I~~	~~FINANCIAL INFORMATION~~	3
~~Item 1.~~	~~Financial Statements~~	3
	Consolidated Balance Sheets (unaudited) as of August 31, ~~2017~~2020 and November 30, ~~2016~~2019	3
	Consolidated Statements of Operations (unaudited) for the Three and Nine Months Ended August 31, ~~2017~~2020 and ~~2016~~2019	4
	Consolidated Statements of Comprehensive Income (unaudited) for the Three and Nine Months Ended August 31, ~~2017~~2020 and ~~2016~~2019	5
	Consolidated Statements of Stockholders’ Equity (unaudited) for the Three and Nine Months Ended August 31, 2020 and 2019	6
	Consolidated Statements of Cash Flows (unaudited) for the Nine Months Ended August 31, ~~2017~~2020 and ~~2016~~2019	6 7
	Notes to the Consolidated Financial Statements (unaudited)	7 8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27 26
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	41 39
Item 4.	Controls and Procedures	41 39

PART II	OTHER INFORMATION	43 40
Item 1A.	Risk Factors	43 40
Item 6.	Exhibits	44 41
Signatures		45
~~Exhibit Index~~		46 42

Table of Contents

PART I - FINANCIAL INFORMATION

ITEM 1. Financial Statements

SYNNEX CORPORATION

CONSOLIDATED BALANCE SHEETS

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

(unaudited)

	August 31, 2020			November 30, 2019
ASSETS
Current assets:
Cash and cash equivalents	$	1,452,273		$	225,529
Accounts receivable, net		3,580,970			3,926,709
Receivables from vendors, net		323,027			368,505
Inventories		2,832,607			2,547,224
Other current assets		375,273			385,024
Total current assets		8,564,151			7,452,992
Property and equipment, net		583,951			569,899
Goodwill		2,257,292			2,254,402
Intangible assets, net		1,031,168			1,162,212
Deferred tax assets		116,263			97,539
Other assets, net		710,283			160,917
Total assets	$	13,263,107		$	11,697,960

LIABILITIES AND EQUITY
Current liabilities:
Borrowings, current	$	244,114		$	298,969
Accounts payable		3,655,215			3,149,443
Accrued compensation and benefits		447,661			402,771
Other accrued liabilities		1,257,160			723,716
Income taxes payable		27,998			32,223
Total current liabilities		5,632,148			4,607,122
Long-term borrowings		2,609,809			2,718,267
Other long-term liabilities		722,343			361,911
Deferred tax liabilities		205,225			222,210
Total liabilities		9,169,525			7,909,510
Commitments and contingencies (Note 15)
Stockholders’ equity:
Preferred stock, $0.001 par value, 5,000 shares authorized, 0 shares issued or outstanding		0			0
Common stock, $0.001 par value, 100,000 shares authorized, 53,380 and 53,154 shares issued as of August 31, 2020 and November 30, 2019, respectively		53			53
Additional paid-in capital		1,579,026			1,545,421
Treasury stock, 2,454 and 2,399 shares as of August 31, 2020 and November 30, 2019, respectively		(178,775	)		(172,627	)
Accumulated other comprehensive income (loss)		(224,628	)		(209,077	)
Retained earnings		2,917,906			2,624,680
Total stockholders' equity		4,093,582			3,788,450
Total liabilities and equity	$	13,263,107		$	11,697,960

~~(unaudited)~~

August 31,
2017 November 30,
2016
ASSETS
Current assets:
Cash and cash equivalents $ 243,265
$ 380,717
Restricted cash 3,677
6,265
Short-term investments 5,487
5,109
Accounts receivable, net 1,861,409
1,756,494
Receivable from related parties 72
102
Inventories 2,242,083
1,741,734
Other current assets 97,940
104,609
Total current assets 4,453,933
3,995,030
Property and equipment, net 329,885
312,716
Goodwill 536,306
486,239
Intangible assets, net 279,818
298,550
Deferred tax assets 66,215
58,564
Other assets 73,203
64,182
Total assets $ 5,739,360
$ 5,215,281
LIABILITIES AND EQUITY
Current liabilities:
Borrowings, current $ 489,904
$ 362,889
Accounts payable 1,770,435
1,683,155
Payable to related parties 33,675
30,679
Accrued compensation and benefits 173,146
165,585
Other accrued liabilities 291,599
217,127
Income taxes payable 14,603
17,097
Total current liabilities 2,773,362
2,476,532
Long-term borrowings 564,085
601,095
Other long-term liabilities 114,151
103,217
Deferred tax liabilities 70,891
58,639
Total liabilities 3,522,489
3,239,483
Commitments and contingencies (Note 16)

SYNNEX Corporation stockholders’ equity:
Preferred stock, $0.001 par value, 5,000 shares authorized, no shares issued or outstanding —
—
Common stock, $0.001 par value, 100,000 shares authorized, 40,949 and 40,816 shares issued as of August 31, 2017 and November 30, 2016, respectively 41
41
Additional paid-in capital 458,916
440,713
Treasury stock, 1,373 and 1,339 shares as of August 31, 2017 and November 30, 2016, respectively (71,184 ) (67,262 )
Accumulated other comprehensive income (loss) (46,550 ) (93,116 )
Retained earnings 1,875,648
1,695,400
Total SYNNEX Corporation stockholders’ equity 2,216,871
1,975,776
Noncontrolling interest —
22
Total equity 2,216,871
1,975,798
Total liabilities and equity $ 5,739,360
$ 5,215,281

(Amounts may not add due to rounding)

The accompanying Notes are an integral part of these Consolidated Financial Statements (unaudited).

Table of Contents

SYNNEX CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(currency and share amounts in thousands, except ~~for~~ per share amounts)

(unaudited)

	Three Months Ended						Nine Months Ended
	August 31, 2020			August 31, 2019			August 31, 2020			August 31, 2019
Revenue:
Products	$	5,306,361		$	5,047,968		$	13,858,313		$	13,695,725
Services		1,158,421			1,155,690			3,403,305			3,480,275
Total revenue		6,464,782			6,203,659			17,261,619			17,176,000
Cost of revenue:
Products		(5,008,881	)		(4,746,197	)		(13,031,113	)		(12,876,410	)
Services		(747,809	)		(731,472	)		(2,206,256	)		(2,196,212	)
Gross profit		708,092			725,990			2,024,249			2,103,379
Selling, general and administrative expenses		(498,956	)		(517,135	)		(1,514,734	)		(1,557,906	)
Operating income		209,136			208,855			509,515			545,473
Interest expense and finance charges, net		(28,749	)		(42,945	)		(99,046	)		(127,695	)
Other income (expense), net		(567	)		(1,087	)		3,280			19,764
Income before income taxes		179,819			164,823			413,748			437,542
Provision for income taxes		(45,356	)		(41,691	)		(99,740	)		(112,831	)
Net income	$	134,464		$	123,132		$	314,008		$	324,711
Earnings per common share:
Basic	$	2.61		$	2.41		$	6.10		$	6.35
Diluted	$	2.60		$	2.40		$	6.07		$	6.32
Weighted-average common shares outstanding:
Basic		50,890			50,601			50,851			50,661
Diluted		51,241			50,845			51,172			50,903

~~(unaudited)~~

Three Months Ended Nine Months Ended
August 31, 2017 August 31, 2016 August 31, 2017 August 31, 2016
Revenue:
Products $ 3,784,599
$ 3,267,287
$ 10,289,463
$ 9,099,762
Services 492,087
402,527
1,444,360
1,075,173
Total revenue 4,276,686
3,669,814
11,733,823
10,174,935
Cost of revenue:
Products (3,590,007 ) (3,096,529 ) (9,736,190 ) (8,608,518 )
Services (311,735 ) (247,328 ) (908,661 ) (662,238 )
Gross profit 374,944
325,957
1,088,972
904,179
Selling, general and administrative expenses (252,728 ) (227,935 ) (739,867 ) (655,225 )
Operating income 122,216
98,022
349,105
248,954
Interest expense and finance charges, net (9,754 ) (7,517 ) (26,898 ) (20,245 )
Other income (expense), net 1,854
(378 ) 1,325
4,605
Income before income taxes 114,316
90,127
323,532
233,314
Provision for income taxes (39,153 ) (31,426 ) (113,432 ) (83,619 )
Net income 75,163
58,701
210,100
149,695
Net loss (income) attributable to noncontrolling interest —
3
—
(67 )
Net income attributable to SYNNEX Corporation $ 75,163
$ 58,704
$ 210,100
$ 149,628
Earnings attributable to SYNNEX Corporation per common share:
Basic $ 1.88
$ 1.48
$ 5.27
$ 3.77
Diluted $ 1.87
$ 1.47
$ 5.24
$ 3.75
Weighted-average common shares outstanding:
Basic 39,563
39,346
39,530
39,285
Diluted 39,748
39,534
39,722
39,492
Cash dividends declared per share $ 0.25
$ 0.20
$ 0.75
$ 0.60

(Amounts may not add due to rounding)

The accompanying Notes are an integral part of these Consolidated Financial Statements (unaudited).

Table of Contents

SYNNEX CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(currency in thousands)

(unaudited)

	Three Months Ended						Nine Months Ended
	August 31, 2020			August 31, 2019			August 31, 2020			August 31, 2019
Net income	$	134,464		$	123,132		$	314,008		$	324,711
Other comprehensive income (loss):
Change in unrealized gains (losses) of defined benefit plans, net of taxes of $3,115 for the three and nine months ended August 31, 2020, and $0 for the three and nine months ended 2019		(8,985	)		0			(8,768	)		307
Unrealized gains (losses) on cash flow hedges during the period, net of taxes of $(8,220) and $7,953 for the three and nine months ended August 31, 2020, respectively, and $8,722 and $24,605 for the three and nine months ended August 31, 2019, respectively		24,641			(23,744	)		(24,772	)		(71,414	)
Reclassification of net (gains) losses on cash flow hedges to net income, net of tax expense (benefit) of $(563) and $(1,120) for the three and nine months ended August 31, 2020, respectively, and $1,121 and $3,241 for three and nine months ended August 31, 2019, respectively		1,824			(3,371	)		3,462			(9,387	)
Total change in unrealized gains (losses) on cash flow hedges, net of taxes		26,465			(27,115	)		(21,310	)		(80,801	)
Foreign currency translation adjustments, net of taxes of $(345) and $(51) for the three and nine months ended August 31, 2020, respectively, and $(31) and $(55) for the three and nine months ended August 31, 2019, respectively		95,168			(19,395	)		14,526			(26,334	)
Other comprehensive income (loss)		112,648			(46,510	)		(15,552	)		(106,828	)
Comprehensive income	$	247,112		$	76,622		$	298,456		$	217,883

~~(unaudited)~~

Three Months Ended Nine Months Ended
August 31, 2017 August 31, 2016 August 31, 2017 August 31, 2016
Net income $ 75,163
$ 58,701
$ 210,100
$ 149,695
Other comprehensive income (loss):
Unrealized gains (losses) on available-for-sale securities, net of taxes of $0 for the three and nine months ended August 31, 2017 and 2016 220
(359 ) 710
(578 )
Changes in unrealized losses of defined benefit plans, net of taxes of $0 for the three and nine months ended August 31, 2017 and 2016 (45 ) —
(58 ) (455 )
Unrealized gains (losses) on cash flow hedges, net of taxes of $222 and $(128) for the three and nine months ended August 31, 2017, respectively, and $722 and $3,159 for the three and nine months ended August 31, 2016, respectively (355 ) (1,135 ) 203
(4,961 )
Foreign currency translation adjustments, net of taxes of $(834) and $(895) for the three and nine months ended August 31, 2017, respectively, and $28 and $(1,371) for the three and nine months ended August 31, 2016, respectively 29,840
(2,068 ) 45,711
(3,347 )
Other comprehensive income (loss) 29,660
(3,562 ) 46,566
(9,341 )
Comprehensive income: 104,823
55,139
256,666
140,354
Comprehensive income attributable to noncontrolling interest —
(9 ) —
(100 )
Comprehensive income attributable to SYNNEX Corporation $ 104,823
$ 55,130
$ 256,666
$ 140,254

(Amounts may not add due to rounding)

The accompanying Notes are an integral part of these Consolidated Financial Statements (unaudited).

Table of Contents

SYNNEX CORPORATION

CONSOLIDATED STATEMENTS OF ~~CASH FLOWS~~

STOCKHOLDERS’ EQUITY

(currency in ~~thousands)~~thousands, except per share amounts)

(unaudited)

	Three Months Ended						Nine Months Ended
	August 31, 2020			August 31, 2019			August 31, 2020			August 31, 2019
Total Stockholders' equity, beginning balance	$	3,834,381		$	3,537,053		$	3,788,450		$	3,435,054

Common stock and additional paid-in capital:
Beginning balance		1,566,817			1,527,436			1,545,474			1,512,254
Share-based compensation		8,829			6,430			25,041			19,515
Common stock issued for employee benefit plans		3,433			929			8,564			3,134
Stock issuance costs (related to the Convergys acquisition in fiscal year 2018)		—		—				—			(107	)
Ending balance		1,579,079			1,534,796			1,579,079			1,534,796

Treasury stock:
Beginning balance		(178,609	)		(165,601	)		(172,627	)		(149,533	)
Repurchases of common stock for tax withholdings on equity awards		(166	)		(109	)		(2,743	)		(994	)
Repurchases of common stock		—		—				(3,405	)		(15,184	)
Ending balance		(178,775	)		(165,710	)		(178,775	)		(165,710	)

Retained earnings:
Beginning balance		2,783,449			2,363,779			2,624,680			2,198,621
Net income		134,464			123,132			314,008			324,711
Cash dividends declared		(7	)		(19,116	)		(20,782	)		(57,491	)
Cumulative effect of changes in accounting principles		—		—				—			1,955
Ending balance		2,917,906			2,467,795			2,917,906			2,467,795

Accumulated other comprehensive income (loss):
Beginning balance		(337,276	)		(188,561	)		(209,077	)		(126,288	)
Other comprehensive income (loss)		112,648			(46,510	)		(15,552	)		(106,828	)
Cumulative effect of changes in accounting principles		—		—				—			(1,955	)
Ending balance		(224,628	)		(235,070	)		(224,628	)		(235,070	)

Total stockholders' equity, ending balance	$	4,093,582		$	3,601,810		$	4,093,582		$	3,601,810

Cash dividends declared per share	$	—		$	0.375		$	0.400		$	1.125

~~(unaudited)~~

Nine Months Ended
August 31, 2017 August 31, 2016
Cash flows from operating activities:
Net income $ 210,100
$ 149,695
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation and amortization 108,302
83,058
Share-based compensation 12,412
10,615
Provision for doubtful accounts 7,299
884
Excess tax benefit from share-based compensation (2,466 ) (5,309 )
Deferred income taxes (746 ) (5,811 )
Unrealized foreign exchange gains (2,731 ) (8,943 )
Others 868
—
Changes in assets and liabilities, net of acquisition of businesses:
Accounts receivable, including from related parties (76,866 ) 224,757
Inventories (484,650 ) (224,752 )
Accounts payable, including to related parties 76,463
70,361
Other assets and liabilities 71,846
(20,933 )
Net cash (used in) provided by operating activities (80,169 ) 273,622
Cash flows from investing activities:
Purchases of investments (8,487 ) (83,671 )
Proceeds from sale and maturity of investments 6,230
82,886
Purchases of property and equipment (72,130 ) (95,161 )
Acquisition of businesses, net of cash acquired and refunds (51,309 ) (403,923 )
Others 1,538
4,123
Net cash used in investing activities (124,158 ) (495,746 )
Cash flows from financing activities:
Proceeds from borrowings 5,371,963
1,902,424
Repayments of borrowings (5,289,800 ) (1,851,750 )
Dividends paid (29,852 ) (23,809 )
Excess tax benefit from share-based compensation 2,466
5,309
Increase (decrease) in book overdrafts 984
(3,501 )
Repurchases of common stock —
(6,917 )
Proceeds from issuance of common stock 3,240
6,014
Repurchases of common stock for tax withholdings on equity awards (3,922 ) (3,427 )
Others —
(1,337 )
Net cash provided by financing activities 55,079
23,006
Effect of exchange rate changes on cash, cash equivalents and restricted cash 9,293
1,112
Net decrease in cash, cash equivalents and restricted cash (139,955 ) (198,006 )
Cash, cash equivalents and restricted cash at beginning of period 387,167
424,630
Cash, cash equivalents and restricted cash at end of period $ 247,212
$ 226,624

Supplemental disclosure of non-cash investing activities
Accrued costs for property and equipment purchases $ 1,598
$ 5,135

(Amounts may not add due to rounding)

The accompanying Notes are an integral part of these Consolidated Financial Statements (unaudited).

Table of Contents

SYNNEX CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(currency in thousands)

(unaudited)

	Nine Months Ended
	August 31, 2020			August 31, 2019
Cash flows from operating activities:
Net income	$	314,008		$	324,711
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		251,459			281,392
Share-based compensation		25,041			19,515
Provision for doubtful accounts		48,233			25,496
Deferred income taxes		(24,070	)		(16,789	)
Contingent consideration		0			(19,034	)
Unrealized foreign exchange (gains) losses		12,764			(4,115	)
Other		7,456			8,595
Changes in operating assets and liabilities, net of acquisition of businesses:
Accounts receivable, net		280,476			148,128
Receivables from vendors, net		44,666			13,322
Inventories		(282,654	)		(390,018	)
Accounts payable		454,290			(119,599	)
Other operating assets and liabilities		415,428			(69,131	)
Net cash provided by operating activities		1,547,097			202,473
Cash flows from investing activities:
Purchases of property and equipment		(127,326	)		(93,432	)
Acquisition of businesses		(4,941	)		(8,647	)
Other		(5,248	)		(199	)
Net cash used in investing activities		(137,515	)		(102,279	)
Cash flows from financing activities:
Proceeds from borrowings, net of debt discount and issuance costs		3,747,096			5,620,134
Repayments of borrowings		(3,915,519	)		(5,834,258	)
Dividends paid		(20,782	)		(57,491	)
Increase (decrease) in book overdraft		(1,051	)		336
Repurchases of common stock		(3,405	)		(15,184	)
Proceeds from issuance of common stock		8,564			3,134
Repurchases of common stock for tax withholdings on equity awards		(2,743	)		(994	)
Settlement of contingent consideration		0			(13,966	)
Other		0			(107	)
Net cash used in financing activities		(187,841	)		(298,397	)
Effect of exchange rate changes on cash, cash equivalents and restricted cash		3,902			3,575
Net increase (decrease) in cash, cash equivalents and restricted cash		1,225,644			(194,628	)
Cash, cash equivalents and restricted cash at beginning of period		231,149			462,033
Cash, cash equivalents and restricted cash at end of period	$	1,456,793		$	267,405
Supplemental disclosure of non-cash investing activities:
Accrued costs for property and equipment purchases	$	13,425		$	2,905

(Amounts may not add due to rounding)

The accompanying Notes are an integral part of these Consolidated Financial Statements (unaudited).

Table of Contents

SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three and nine months ended August 31, ~~2017~~2020 and ~~2016~~

2019

(currency and share amounts in thousands, except per share amounts)

(unaudited)

NOTE 1—ORGANIZATION AND BASIS OF PRESENTATION:

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

Africa.

The Company has ~~two~~2 reportable segments: Technology Solutions and Concentrix. The Technology Solutions segment ~~distributes~~provides a ~~broad~~comprehensive range of distribution, logistics and integration solutions for the information technology ~~systems and products and also provides systems design and integration solutions.~~(“IT”) industry. The Concentrix segment offers a portfolio of technology-infused strategic solutions and end-to-end global business outsourcing services focused on customer ~~engagement strategy,~~experience, process optimization, technology innovation, front and back-office automation and business transformation to clients in ~~ten identified~~5 primary industry verticals.

On January 9, 2020, the Company announced a plan to separate its Concentrix segment into an independent publicly-traded company. The transaction, which was delayed due to the focus on managing the economic impact of a pandemic caused by an outbreak of a new strain of coronavirus (“ COVID-19”), barring further economic disruption, is now expected to be completed in the fourth quarter of calendar year 2020. The plan is subject to current economic and capital market trends. The separation is intended to qualify as a tax-free transaction for federal income tax purposes for both the Company and its then current stockholders. Immediately following the separation, it is expected that the Company’s stockholders will own shares of both SYNNEX and Concentrix, at the same percentage ownership that they held of SYNNEX prior to the transaction. Completion of the separation will not require a stockholder vote but will be subject to customary closing conditions, including, among others, obtaining final approval from the Company’s Board of Directors, receipt of a favorable opinion with respect to the tax-free nature of the transaction for federal income tax purposes, and the effectiveness of a Form 10 registration statement with the Securities and Exchange Commission.

The accompanying interim unaudited Consolidated Financial Statements as of August 31, ~~2017~~2020 and for the three and nine months ended August 31, ~~2017~~2020 and ~~2016~~2019 have been prepared by the Company in accordance with the rules and regulations of the Securities and Exchange ~~Commission (“SEC”).~~Commission. The amounts as of November 30, ~~2016~~2019 have been derived from the Company’s annual audited financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles (“GAAP”) in the United States have been condensed or omitted in accordance with such rules and regulations. In the opinion of management, the accompanying unaudited Consolidated Financial Statements reflect all adjustments, consisting only of normal recurring adjustments, necessary to state fairly the financial position of the Company and its results of operations and cash flows as of and for the periods presented. These financial statements should be read in conjunction with the annual audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended November 30, ~~2016.~~

2019.

Interim results of operations are not necessarily indicative of financial results for a full year, and the Company makes no representations related thereto.

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

NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

For a discussion of the ~~Company's~~Company’s significant accounting policies, ~~please see~~refer to the discussion in the ~~Company's~~Company’s Annual Report on Form 10-K for the fiscal year ended November 30, ~~2016. During~~2019. As described more fully in Note 16, as of August 31, 2020, due to the ongoing impact of the COVID-19 pandemic on the Company’s business, many of our estimates and assumptions required increased judgment and carry a higher degree of variability and volatility. As events continue to evolve and additional information becomes available, these estimates may change in future periods. Accounting pronouncements adopted during the nine months ended August 31, ~~2017, the Company adopted certain new accounting pronouncements which~~2020 are discussed below.

Concentration of credit risk

Financial instruments that potentially subject the Company to significant concentration of credit risk consist principally of cash and cash equivalents, accounts receivable, 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 August 31, ~~2017,~~2020, the Company ~~had~~has not experienced any credit losses on such deposits and derivative instruments.

Accounts receivable include amounts due from customers, ~~and~~including related party customers. Receivables from vendors, net, includes amounts due from original equipment manufacturer (“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 ~~the~~its receivable portfolio, the existence of a limited amount of credit insurance and specifically identified customer and vendor risks. Through August 31, ~~2017,~~2020, such losses have been within management’s expectations.

~~One~~

NaN customer accounted for ~~22%~~16% and ~~20%,respectively,~~17% of the ~~Company's~~Company’s total revenue during the three and nine months ended August 31, ~~2017. During~~2020. The same customer accounted for 21% and 19% of the Company’s total revenue during the three and nine months ended August 31, ~~2016,~~2019.Products

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SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

For the ~~same customer accounted for 12%~~three and ~~10%, respectively, of the Company's total revenue. Products~~ nine months ended August 31, 2020 and 2019

(currency and share amounts in thousands, except per share amounts)

(unaudited)

purchased from the Company’s largest OEM supplier, HP Inc., accounted for approximately ~~14% of total revenue during both the three and nine months ended August 31, 2017, and approximately 16% and 17%, respectively,~~12% of total revenue during the three and nine months ended August 31, ~~2016.~~

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~~SYNNEX CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS---(continued)~~

~~For the three~~2020 and ~~nine months ended August 31, 2017 and 2016~~

~~(currency and share amounts in thousands, except per share amounts)~~

~~(unaudited)~~

2019.

As of August 31, ~~2017, one~~2020 and November 30, 2019, 1 customer comprised ~~14%~~18% and 19%, respectively, of the ~~total~~consolidated accounts receivable balance. ~~As of November 30, 2016, no customer comprised 10% or more of the total accounts receivable balance.~~

Inventories

Inventories ~~as of November 30, 2016 were stated at the lower of cost or market. Commencing December 1, 2016, inventories~~ are stated at the lower of cost orand 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~~projects and ~~integration business, and~~integration-based completed systems. Work-in-process inventories are not material to the Consolidated Financial Statements.

~~Reclassifications~~

~~Certain reclassifications have been made~~

Leases

The Company enters into leases as a lessee for property and equipment in the ordinary course of business. When procuring goods or services, or upon entering into a contract with its customers and clients, the Company determines whether an arrangement contains a lease at its inception. As part of that evaluation, the Company considers whether there is an implicitly or explicitly identified asset in the arrangement and whether the Company, as the lessee, or the customer, if the Company is the lessor, has the right to ~~prior period amounts~~control the use of that asset. Effective December 1, 2019, when the Company is the lessee, all leases with a term of more than 12 months are recognized as right-of-use (“ROU”) assets and associated lease liabilities in the Consolidated Balance ~~Sheets,~~Sheet. Lease liabilities are measured at the lease commencement date and determined using the present value of the lease payments not yet paid, at the Company’s incremental borrowing rate, which approximates the rate at which the Company would borrow on a secured basis in the country where the lease was executed. The interest rate implicit in the lease is generally not determinable in transactions where the Company is the lessee. The ROU asset equals the lease liability adjusted for any initial direct costs, prepaid rent and lease incentives. The Company’s variable lease payments generally relate to payments tied to various indexes, non-lease components and payments above a contractual minimum fixed amount.

Operating leases are included in other assets, net, other accrued liabilities and other long-term liabilities in the Consolidated Balance Sheet. Finance leases are included in property and equipment, net, borrowings, current and long-term borrowings in the Consolidated Balance Sheet. Substantially all of the Company's leases are classified as operating leases. The lease term includes options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. The Company made a policy election to not recognize leases with a lease term of 12 months or less in the Consolidated Balance Sheet. Lease expenses are recorded within selling, general, and administrative expenses in the Consolidated Statements of Cash Flows and the notes thereto to conform to current period presentation, primarily pursuant to the adoption of new accounting pronouncements. The impact of reclassifications pursuant to adoption of new guidance is provided below under “Recently adopted accounting pronouncements.” Other reclassificationsOperations. Operating lease payments are presented within “Cash flows from operating activities” in the Consolidated Statements of Cash ~~Flows had no effect on cash flows from operating, investing or financing activities~~Flows.

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

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

Recently adopted ~~Accounting Pronouncements~~

accounting pronouncements

In ~~May 2017,~~February 2018, the Financial Accounting Standard Board (the “FASB”) issued guidance that permits the Company to ~~clarify when~~reclassify disproportionate tax effects in accumulated other comprehensive income caused by the Tax Cuts and Jobs Act of 2017 to account for a change to the terms or conditions of a share-based payment award as a modification. Under the new guidance, modification accounting is required only if the fair value, the vesting conditions, or the classification of the award (as equity or liability) changes as a result of the change in terms or conditions.retained earnings. The guidance is effective ~~prospectively~~ for ~~all companies for annual periods~~fiscal years, and interim periods within those ~~annual periods, beginning on or after December 15, 2017. The Company adopted the guidance prospectively in the second quarter of~~ fiscal ~~year 2017. The adoption had no impact on the Company's Consolidated Financial Statements, nor is it likely to have a material impact for the remainder of the fiscal year.~~

In January 2017, the FASB issued guidance to simplify the accounting for goodwill impairment. It removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. Goodwill impairment will now be calculated as the amount by which a reporting unit’s carrying value exceeds its fair value, not exceeding the carrying amount of goodwill. In addition, income tax effects from any tax deductible goodwill shall also be considered in measuring goodwill impairment loss, if applicable. The guidance is effective for annual and interim periodsyears, beginning after December 15, ~~2019 and should be adopted prospectively. Early~~2018, with early adoption is permitted for interim or annual goodwill impairment test performed with a measurement date after January 1, 2017. The Company adopted the guidance prospectively in the first quarter of fiscal year 2017.permitted. The adoption ~~had no impact on the Company's Consolidated Financial Statements, nor is it likely to have a material impact for the remainder~~ of ~~the fiscal year.~~

In November 2016, the FASB issued new guidance which requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The Company adopted this new guidance ~~in the first quarter of fiscal year 2017, with retrospective effect. The adoption~~ did not have a material impact on the Company's cash flow statement for the nine months ended August 31, 2017, nor is it likely to have a material impact for the remainder of the fiscal year. For the nine months ended August 31, 2016, cash used in investing activities increased by~~$85,400.~~

Company’s Consolidated Financial Statements.

In ~~October~~February 2016, the FASB issued a new ~~guidance that requires a reporting entity to recognize the tax expense from intra-entity transfers~~standard which revises various aspects of ~~assets other than inventory~~accounting for leases, with amendments in the selling entity’s tax jurisdiction when the transfer occurs, even though the pre-tax effects of that transaction are eliminated in consolidation. Any deferred tax asset that arises in the buying entity’s jurisdiction would also be recognized at the time of the transfer. 2018 and 2019 codified as Accounting Standards Codification Topic 842, Leases. The Company adopted ~~this~~the guidance effective December 1, 2019, applying the optional transition method, which allows an entity to apply the new ~~guidance~~standard at the adoption date with a cumulative effect adjustment to the opening balance of retained earnings in the ~~first quarter~~period of ~~fiscal year 2017 using~~adoption. In addition, the ~~modified retrospective approach.~~Company elected the package of practical expedients not to reassess prior conclusions related to contracts containing leases, lease classification and initial direct costs and the lessee practical expedient to combine lease and non-lease components for all asset classes. The Company made a policy election to not recognize ROU assets and lease liabilities for short-term leases for all asset classes. The most significant impact of adoption to the Company’s Consolidated Financial Statements relates to the recognition of a right-of-use asset and a lease liability for virtually all of its leases other than short-term leases. The liability was equal to the present value of lease payments. The asset is based on the liability, and subject to adjustment, such as for initial direct costs. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee depends primarily on its classification. For income statement purposes, operating leases will result in a straight-line expense while finance leases will result in a front-loaded expense pattern. Upon adoption, the Company recorded $591,129 of ROU assets and of $642,567 of liabilities relating to its operating leases on its Consolidated Balance Sheet. The adoption did not have ~~a material~~an impact on the ~~Company's Consolidated Financial Statements, nor is it likely to have a material impact for the remainder~~Company’s consolidated statements of ~~the fiscal year.~~

~~In August 2016, the FASB issued an amendment to the statement~~operations or its consolidated statements of cash flows. ~~It addresses eight specific cash flow issues to clarify the presentation and classification of cash receipts and cash payments in the statement of cash flows where~~

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SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL ~~STATEMENTS---~~STATEMENTS—(continued)

For the three and nine months ended August 31, ~~2017~~2020 and ~~2016~~

2019

(currency and share amounts in thousands, except per share amounts)

(unaudited)

~~diversity~~

Recently issued accounting pronouncements

In March 2020, the FASB issued optional guidance for a limited time to ease the potential burden in ~~practice exists.~~accounting for or recognizing the effects of reference rate reform, particularly, the risk of cessation of the London Interbank Offered Rate (“LIBOR”) on financial reporting. The guidance provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments are elective and are effective upon issuance for all entities through December 31, 2022. The Company ~~adopted this new standard in~~ is currently evaluating the ~~first quarter of fiscal year 2017, with retrospective effect. The adoption did not have a material~~ impact ~~on the Company's cash flows from operating, investing or financing activities, nor is it likely to have a material impact for the remainder~~ of the ~~fiscal year.~~

new guidance.

In November 2015, the FASB issued a new accounting standard that requires deferred tax liabilities and assets be classified as noncurrent on a company’s balance sheet. The Company adopted this new standard in the first quarter of fiscal year 2017, with retrospective effect. Although the adoption did not materially impact the company's consolidated financial position or results of operations, it resulted in a reclassification of $44,116 of deferred tax assets from current to noncurrent and a reclassification of $448 of deferred tax liabilities from current to noncurrent at November 30, 2016. In addition, the Company offset $5,000 of current deferred tax assets against noncurrent deferred tax liabilities as of November 30, 2016 in order to present a single noncurrent deferred tax balance by tax jurisdiction.

In September 2015, the FASB issued a new accounting standard that eliminates the requirement to restate prior period financial statements for measurement period adjustments. The new guidance requires that the cumulative impact of a measurement period adjustment (including the impact on prior periods) be recognized in the reporting period in which the adjustment is identified. Consistent with existing guidance, the new guidance requires an acquirer to disclose the nature and amount of measurement period adjustments. In addition, companies are required to present separately on the face of the income statement or disclose in the notes the portion of the adjustment recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. The Company adopted this new standard prospectively in the first quarter of fiscal year 2017. The adoption did not have a material impact on the Company's Consolidated Financial Statements, nor is it likely to have a material impact for the remainder of the fiscal year.

In July 2015, the FASB issued a new accounting standard that simplifies the subsequent measurement of inventory. It replaces the lower of cost or market test with the lower of cost or net realizable value test. Net realizable value is defined as the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The Company adopted this new standard prospectively in the first quarter of fiscal year 2017. The adoption did not have a material impact on the Company's Consolidated Financial Statements, nor is it likely to have a material impact for the remainder of the fiscal year.

~~In April 2015,~~December 2019, the FASB issued new guidance ~~to customers about whether a cloud computing arrangement includes a software license. If~~that simplifies the ~~cloud computing arrangement includes a software license, the customer should account~~accounting for the software license element of the arrangement consistent with the acquisition of other software licenses. If the cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract.income taxes. The Company adopted this new standard prospectively in the first quarter of fiscal year 2017. The adoption had no impact on the Company's Consolidated Financial Statements, nor is it likely to have a material impact for the remainder of the fiscal year.

In April 2015, the FASB issued a new accounting standard that requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the corresponding debt liability. In August 2015, the FASB clarified that for a line-of-credit arrangement, a company can continue to defer and present the debt issuance costs as an asset and subsequent amortization of debt issuance costs over the term of the line-of-credit arrangement, whether or not there are any outstanding borrowings on the line-of-credit arrangement. The Company adopted this new standard in the first quarter of fiscal year 2017, with retrospective effect. The adoption did not have a material impact on the Company's Consolidated Financial Statements, nor is it likely to have a material impact for the remainder of the fiscal year.

~~Recently issued accounting pronouncements~~

~~In August 2017, the FASB issued a new accounting standard that amends and simplifies existing~~ guidance ~~related to hedge accounting in order to allow companies to more accurately present the economic effects of risk management activities in their financial statements. It~~ is effective for annual reporting periods beginning after December 15, ~~2018~~2020, and interim periods within those ~~annual~~reporting periods. Certain amendments should be applied prospectively, while other amendments should be applied retrospectively to all periods ~~with~~presented. The Company is currently evaluating the impact of the new guidance.

In August 2018, the FASB issued new guidance to add, remove, and clarify disclosure requirements related to defined benefit pension and other postretirement plans. The amendment requires the Company to disclose the weighted-average interest crediting rates used in cash balance pension plans. It also requires the Company to disclose the reasons for significant changes in the benefit obligation or plan assets including significant gains and losses affecting the benefit obligation for the period. This standard is effective for fiscal years ending after December 15, 2020, and early adoption is permitted. ~~Entities will apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first effective reporting period.~~ The ~~Company does~~adoption is not ~~expect the adoption of this standard~~expected to have a material impact on ~~its~~the Company's Consolidated Financial ~~Statements but expects this new~~Statements.

In August 2018, the FASB issued guidance to ~~ease~~improve the ~~administrative burden~~effectiveness of ~~hedge documentation~~fair value measurement disclosures by removing or modifying certain disclosure requirements and ~~assessing hedge effectiveness.~~adding other requirements. The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted. Certain amendments should be applied prospectively, while all other amendments should be applied retrospectively to all periods presented. The Company ~~plans to adopt this guidance in~~is currently evaluating the ~~fourth quarter~~impact of ~~fiscal year 2017.~~

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~~SYNNEX CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS---(continued)~~

~~For~~ the ~~three and nine months ended August 31, 2017 and 2016~~

~~(currency and share amounts in thousands, except per share amounts)~~

~~(unaudited)~~

new guidance.

In June 2016, the FASB issued a new credit loss standard that replaces the incurred loss impairment methodology in current GAAP. The new impairment model requires immediate recognition of estimated credit losses expected to occur for most financial assets and certain other instruments. It is effective for annual reporting periods beginning after December 15, 2019 and interim periods within those annual periods. Early adoption for fiscal years beginning after December 15, 2018 is permitted. Entities will apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first effective reporting period. The Company is currently evaluating the impact of the new guidance.

In March 2016, the FASB issued guidance which changes the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification in the Consolidated Statement of Cash Flows. The guidance is effective for interim and annual periods beginning after December 15, 2016 and early adoption is permitted. Had the Company adopted this guidance during the nine months ended August 31, 2017, income tax expense would be lower by $639 and $2,466 for the three and nine months ended August 31, 2017, respectively, and net income would be higher by approximately the same amounts. The tax impact is included in additional paid-in capital for the nine months ended August 31, 2017. Cash used in operating activities during the nine months ended August 31, 2017 would be lower by $2,466.

In February 2016, the FASB issued a new standard which revises various aspects of accounting for leases. The most significant impact to the Company’s Consolidated Financial Statements relates to the recognition by a lessee of a right-of-use asset and a lease liability for virtually all of its leases other than short-term leases. The liability will be equal to the present value of lease payments. The asset will be based on the liability, subject to adjustment, such as for initial direct costs. Consistent with current guidance, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification. For income statement purposes, operating leases will result in a straight line expense while finance leases will result in a front-loaded expense pattern. This accounting standard will be applicable to the Company at the beginning of its first quarter of fiscal year 2020 using a modified retrospective approach and early adoption is permitted. The Company expects that most of its operating lease commitments will be subject to the new standard and recognized as operating lease liabilities and right-of-use assets upon adoption and is currently evaluating the impact on its Consolidated Financial Statements upon the adoption of this new standard.

In January 2016, the FASB issued new guidance which amends various aspects of the recognition, measurement, presentation, and disclosure of financial instruments. With respect to the Company’s consolidated financial statements, the most significant impact relates to the accounting for equity investments (other than those that are consolidated or accounted under the equity method) which will be measured at fair value through earnings. The new guidance is effective for annual reporting periods, and interim periods within those years beginning after December 15, 2017, with early adoption permitted only for certain provisions. The amendments should be applied by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption, with other amendments related specifically to equity securities without readily determinable fair values applied prospectively. The Company does not expect the adoption of this standard to have a material impact on its Consolidated Financial Statements.

In May 2014, the FASB issued a comprehensive new revenue recognition standard for contracts with customers that will supersede most current revenue recognition guidance, including industry-specific guidance. The core principle of this standard is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this core principle, the standard provides a five-step analysis of transactions to determine when and how revenue is recognized. Other major provisions include the capitalization and amortization of certain contract costs, ensuring the time value of money is considered in the transaction price, and allowing estimates of variable consideration to be recognized before contingencies are resolved in certain circumstances. This guidance also requires enhanced disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity’s contracts with customers. In August 2015, the FASB amended this accounting standard and postponed the implementation date to fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. Early application for fiscal years, and interim periods within those years, beginning after December 15, 2016 is permitted. The standard permits the use of either the retrospective or cumulative effect transition method. This accounting standard will be applicable to the Company at the beginning of its first quarter of fiscal year 2019. The Company has established an implementation team and engaged external advisers to assess the Company’s business and contracts. The Company is in the process of determining the transition method and evaluating the impact of several aspects of the standard including principal versus agent considerations, identification of performance obligations and the determination of when control of goods and services transfers to the Company’s customers.

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~~SYNNEX CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS---(continued)~~

~~For the three and nine months ended August 31, 2017 and 2016~~

~~(currency and share amounts in thousands, except per share amounts)~~

~~(unaudited)~~

NOTE 3—~~ACQUISITIONS:~~

~~Fiscal 2017 acquisitions~~

On July 31, 2017, the Company acquired 100% of Tigerspike Pty Ltd (“Tigerspike”), a digital products company incorporated in Australia, specializing in strategy, experience design, development and systems integration, for a preliminary purchase price of $68,457 in cash subject to post-closing adjustments, including $10,000 payable by October 31, 2017. The acquisition is being integrated into the Concentrix segment and is expected to enhance Concentrix' digital and mobility competencies by providing improved business intelligence and performance for its clients through enabling technologies that are designed to create effortless, personalized end-user engagements. Based on the preliminary purchase price allocation, the Company recorded net tangible liabilities of $692, goodwill of $43,727 and intangible assets of $25,423, primarily comprising customer relationships and technology. The primary area of the preliminary purchase price allocation that is not yet finalized relates to the valuation of intangible assets acquired. Acquisition-related and integration expenses incurred were $321 during both the three and nine months ended August 31, 2017. These charges were recorded in “Selling, general and administrative expenses.”

Subsequent to the fiscal quarter ended August 31, 2017, on September 1, 2017, the Company acquired the North America and Latin America distribution businesses, of Datatec Limited, a public limited company incorporated in the Republic of South Africa (“Datatec”), through the purchase of 100% of the shares of its subsidiary, Westcon Group, Inc., a Delaware company (“Westcon-Comstor Americas”). The purchase price of approximately $600,000 was paid in cash. In addition, a potential earnout amount of up to $200,000 will be payable in cash if certain gross profit targets are achieved for the twelve-month period ending February 28, 2018. The acquisition is related to the Technology Solutions segment and is expected to strengthen the Company’s line card in the security, Unified Communications and Collaboration and networking markets, enhance the Company’s North American position and expand the Company’s footprint into Latin America.

The Company also purchased 10% of Datatec’s EMEA (Europe, Middle East and Africa) and APAC (Asia Pacific) distribution businesses for $30,000 through the purchase of 10% of the shares of each of Westcon Emerging Markets Group (Pty) Limited, a South Africa company, and Westcon Group European Holdings, Limited, a United Kingdom company. The Company has an option to purchase up to an additional 10% equity interest in each of the EMEA and APAC distribution businesses within the twelve months following the closing of the acquisition, for an additional cash consideration of up to $30,000 depending on the percentage of equity interest the Company determines to purchase in either entity.

~~In order to fund the acquisition, the Company amended and increased its existing senior secured credit agreement in the United States on September 1, 2017. See Note 10 for further information.~~

For its fiscal year ended February 28, 2017, Westcon-Comstor Americas generated $2,235 in revenue. Given the short period of time from the close of the acquisition to the filing of this Form10-Q, the Company is in the process of compiling the initial accounting for the Westcon-Comstor Americas combination including the determination of the fair values of the earnout amount and the range of outcomes, certain tangible assets acquired and liabilities assumed, the valuation of intangible assets acquired, income and non-income based taxes and residual goodwill and the amount of goodwill that will be deductible for tax purposes.

~~Fiscal 2016 acquisition~~

In August 2016, the Company acquired 100% of the Minacs group of companies (“Minacs”), which provide integrated business process outsourcing services, for a purchase price of $429,135 paid in cash, after certain post-closing adjustments. During the nine months ended August 31, 2017, the Company received a refund of $6,500 related to post-closing adjustments. This amount is reflected in the Consolidated Statements of Cash Flows under investing activities. The Company also recorded certain immaterial measurement period adjustments to the fair value of acquired net tangible assets. Acquisition-related and integration expenses were $9,798, of which $0 and $611, respectively, were~~incurred during the three and nine months ended August 31, 2017. These charges were recorded in “Selling, general and administrative expenses.”~~

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~~SYNNEX CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS---(continued)~~

~~For the three and nine months ended August 31, 2017 and 2016~~

~~(currency and share amounts in thousands, except per share amounts)~~

~~(unaudited)~~

~~NOTE 4—~~SHARE-BASED COMPENSATION:

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

The following table summarizes the number of share-based awards granted under the Company’s 2013 Stock Incentive Plan, as amended, during the three and nine months ended August 31, ~~2017~~2020 and ~~2016,~~2019, and the ~~grant-date~~measurement-date fair value of those awards:

	Three Months Ended								Nine Months Ended
	August 31, 2020				August 31, 2019				August 31, 2020				August 31, 2019
	Shares awarded		Fair value of grants		Shares awarded		Fair value of grants		Shares awarded		Fair value of grants		Shares awarded		Fair value of grants
Stock options		0	$	0		0	$	0		0	$	0		17	$	500
Restricted stock awards		0		0		1		90		36		2,983		27		2,699
Restricted stock units		0		0		107		9,852		1		73		158		14,617
		0	$	0		108	$	9,942		37	$	3,056		202	$	17,816

Three Months Ended Nine Months Ended
August 31, 2017 August 31, 2016 August 31, 2017 August 31, 2016
Shares awarded Fair value of grants Shares awarded Fair value of grants Shares awarded Fair value of grants Shares awarded Fair value of grants
Restricted stock awards 2
$ 250
2
$ 175
25
$ 2,803
16
$ 1,410
Restricted stock units —

—
1
76
33
3,768
35
2,840
2
$ 250
3
$ 251
58
$ 6,571
51
$ 4,250

~~The Company's share-based compensation expense was $4,125 and $12,501 for~~

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SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

For the three and nine months ended August 31, ~~2017, respectively,~~2020 and ~~$3,424~~2019

(currency and ~~$10,654~~share amounts in thousands, except per share amounts)

(unaudited)

The Company recorded share-based compensation expense in the Consolidated Statements of Operations for the three and nine months ended August 31, ~~2016, respectively. The Company recorded substantially all of its share-based compensation expense in “Selling, general~~2020 and ~~administrative expenses” in the Consolidated Statements of Operations.~~2019 as follows:

	Three Months Ended						Nine Months Ended
	August 31, 2020			August 31, 2019			August 31, 2020			August 31, 2019
Total share-based compensation (recorded in selling, general and administrative expenses)	$	8,925		$	6,461		$	25,251		$	19,616
Tax benefit recorded in the provision for income taxes		(2,211	)		(1,653	)		(6,271	)		(5,146	)
Effect on net income	$	6,714		$	4,808		$	18,980		$	14,470

NOTE 5—4—BALANCE SHEET COMPONENTS:

Cash, cash equivalents and restricted ~~cash~~

cash:

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Consolidated Balance Sheets that sum to the total of the same amounts shown in the Consolidated Statements of Cash Flows:

	As of
	August 31, 2020		November 30, 2019
Cash and cash equivalents	$	1,452,273	$	225,529
Restricted cash included in other current assets		4,520		5,620
Cash, cash equivalents and restricted cash	$	1,456,793	$	231,149

Accounts receivable, net:

	As of
	August 31, 2020			November 30, 2019
Accounts receivable	$	3,657,245		$	3,956,629
Less: Allowance for doubtful accounts		(76,275	)		(29,920	)
Accounts receivable, net	$	3,580,970		$	3,926,709

Receivables from vendors, net:

	As of
	August 31, 2020			November 30, 2019
Receivables from vendors	$	327,958		$	373,986
Less: Allowance for doubtful accounts		(4,931	)		(5,481	)
Receivables from vendors, net	$	323,027		$	368,505

As of
August 31, 2017 November 30, 2016
Cash and cash equivalents $ 243,265
$ 380,717
Restricted cash 3,677
6,265
Restricted cash included in other assets 270
185
Total cash, cash equivalents and restricted cash shown in the Consolidated Statements of Cash Flows $ 247,212
$ 387,167

~~Restricted cash balances relate primarily to temporary restrictions caused by the timing of lockbox collections under borrowing arrangements~~

Property and ~~the issuance of bank guarantees.~~equipment, net:

	As of
	August 31, 2020			November 30, 2019
Land	$	47,702		$	47,494
Equipment, computers and software		585,195			503,240
Furniture and fixtures		116,886			111,408
Buildings, building improvements and leasehold improvements		462,716			428,180
Construction-in-progress		8,259			12,379
Total property and equipment, gross	$	1,220,759		$	1,102,702
Less: Accumulated depreciation		(636,808	)		(532,803	)
Property and equipment, net	$	583,951		$	569,899

As of
August 31, 2017 November 30, 2016
Accounts receivable, net:
Accounts receivable $ 1,926,103
$ 1,820,049
Less: Allowance for doubtful accounts (18,653 ) (13,564 )
Less: Allowance for sales returns (46,041 ) (49,991 )
$ 1,861,409
$ 1,756,494

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SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL ~~STATEMENTS---~~STATEMENTS—(continued)

For the three and nine months ended August 31, ~~2017~~2020 and ~~2016~~

2019

(currency and share amounts in thousands, except per share amounts)

(unaudited)

As of
August 31, 2017 November 30, 2016
Property and equipment, net:
Land $ 23,953
$ 23,629
Equipment, computers and software 291,688
255,400
Furniture and fixtures 56,819
51,767
Buildings, building improvements and leasehold improvements 243,772
219,780
Construction-in-progress 27,643
12,007
Total property and equipment, gross 643,875
562,583
Less: Accumulated depreciation (313,990 ) (249,867 )

$ 329,885
$ 312,716

Depreciation expense was ~~$20,185~~$37,447 and ~~$59,058~~$111,139, respectively, for the three and nine months ended August 31, ~~2017,~~2020 and $39,124 and $123,242, respectively, ~~and $15,375 and $46,549~~ for the three and nine months ended August 31, ~~2016, respectively.~~2019.

Goodwill:

	Technology Solutions			Concentrix		Total
Balance as of November 30, 2019	$	425,076		$	1,829,326	$	2,254,402
Foreign exchange translation		(3,308	)		6,198		2,890
Balance as of August 31, 2020	$	421,768		$	1,835,524	$	2,257,292

Intangible assets, net:

Goodwill:
Technology Solutions Concentrix Total
Balance as of November 30, 2016 $ 96,412
$ 389,827
$ 486,239
Additions from acquisitions, net of adjustments (See Note 3) —
37,642
37,642
Foreign exchange translation 3,494
8,931
12,425
Balance as of August 31, 2017 $ 99,906
$ 436,400
$ 536,306

	As of August 31, 2020							As of November 30, 2019
	Gross Amounts		Accumulated Amortization			Net Amounts		Gross Amounts		Accumulated Amortization			Net Amounts
Customer relationships and lists	$	1,563,164	$	(652,341	)	$	910,823	$	1,546,349	$	(522,083	)	$	1,024,266
Vendor lists		177,102		(78,100	)		99,002		178,444		(66,954	)		111,490
Technology		14,831		(10,523	)		4,308		14,720		(8,998	)		5,721
Other intangible assets		34,388		(17,353	)		17,035		35,267		(14,532	)		20,735
Total	$	1,789,485	$	(758,317	)	$	1,031,168	$	1,774,780	$	(612,567	)	$	1,162,212

As of August 31, 2017 As of November 30, 2016
Gross
Amounts Accumulated
Amortization Net
Amounts Gross
Amounts Accumulated
Amortization Net
Amounts
Intangible assets, net:
Customer relationships and lists $ 468,123
$ (211,132 ) $ 256,991
$ 448,008
$ (160,033 ) $ 287,975
Vendor lists 36,815
(35,946 ) 869
36,815
(34,793 ) 2,022
Technology 26,154
(4,741 ) 21,413
10,900
(3,227 ) 7,673
Other intangible assets 5,939
(5,394 ) 545
5,827
(4,947 ) 880
$ 537,031
$ (257,213 ) $ 279,818
$ 501,550
$ (203,000 ) $ 298,550

Amortization expense was ~~$16,688~~$46,828 and ~~$49,244~~$140,320, respectively, for the three and nine months ended August 31, ~~2017,~~2020 and $52,428 and $158,150, respectively, ~~and $13,011 and $36,509~~ for the three and nine months ended August 31, ~~2016, respectively.~~

2019.

Estimated future amortization expense of the ~~Company's~~Company’s intangible assets ~~including preliminary estimates from the acquisition of Tigerspike,~~ is as follows:

Fiscal years ending November 30,
2020 (remaining three months)	$	57,525
2021		173,532
2022		150,213
2023		131,762
2024		109,475
Thereafter		408,661
Total	$	1,031,168

Other accrued liabilities:

	As of
	August 31, 2020		November 30, 2019
Customer advances and other customer liabilities	$	398,571	$	108,401
Current operating lease liabilities		178,723		—
Derivative instruments		143,514		87,406
Other accrued expenses and payables		536,352		527,909
Total	$	1,257,160	$	723,716

Fiscal Years Ending November 30,
2017 (remaining three months) $ 17,102
2018 57,971
2019 46,025
2020 40,907
2021 35,690
thereafter 82,123
Total $ 279,818

Other accrued expenses and payables includes accrued expenses, sales and value added tax accruals, sales return reserve, and other third-party liabilities.

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SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL ~~STATEMENTS---~~STATEMENTS—(continued)

For the three and nine months ended August 31, ~~2017~~2020 and ~~2016~~

2019

(currency and share amounts in thousands, except per share amounts)

(unaudited)

Accumulated other comprehensive income (loss):

The components of accumulated other comprehensive income (loss) (“AOCI”), net of taxes, ~~attributable to SYNNEX Corporation~~ were as follows:

	Unrecognized gains (losses) on defined benefit plans, net of taxes			Unrealized gains (losses) on cash flow hedges, net of taxes			Foreign currency translation adjustment and other, net of taxes			Total
Balance as of November 30, 2019	$	(28,784	)	$	(46,932	)	$	(133,361	)	$	(209,077	)
Other comprehensive income (loss) before reclassification		(8,768	)		(24,772	)		14,526			(19,013	)
Reclassification of (gains) losses from Other comprehensive income (loss)		0			3,462			0			3,462
Balance as of August 31, 2020	$	(37,552	)	$	(68,242	)	$	(118,835	)	$	(224,628	)

Unrealized gains on available-for-sale securities, net of taxes Unrecognized defined benefit plan costs, net of taxes Unrealized gains (losses) on cash flow hedges, net of taxes Foreign currency translation adjustment, net of taxes Total
Balance as of November 30, 2016 $ 713
$ (850 ) $ (4,458 ) $ (88,521 ) $ (93,116 )
Other comprehensive gain (loss) 710
(58 ) 203
45,711
46,566
Balance as of August 31, 2017 $ 1,423
$ (908 ) $ (4,255 ) $ (42,810 ) $ (46,550 )

Refer to Note 5

~~NOTE 6—INVESTMENTS:~~

~~The carrying amount~~ for the location of gains and losses reclassified from other comprehensive income (loss) to the Consolidated Statements of Operations.

Foreign currency translation adjustment and other, net of taxes, is comprised of foreign currency translation adjustment and unrealized gains and losses on available-for-sale debt securities. Substantially, all of the ~~Company’s investments is shown in the table below:~~

As of
August 31, 2017 November 30, 2016
Adjusted Cost Basis Unrealized Gains Carrying
Value Adjusted Cost Basis Unrealized Gains Carrying
Value
Short-term investments:
Held-to-maturity investments $ 5,487
$ —
$ 5,487
$ 5,109
$ —
$ 5,109

Long-term investments in other assets:
Available-for-sale securities $ 988
$ 1,711
$ 2,699
$ 928
$ 955
$ 1,883
Held-to-maturity investments 4,963
—
4,963
2,102
—
2,102
Cost-method investments 3,835
—
3,835
3,884
—
3,884

~~Short-term held-to-maturity investments primarily consist of term deposits with maturities from the date of purchase greater than three months~~balance at both November 30, 2019 and less than one year. These term deposits are held until the maturity date and are not traded. Long-term available-for-sale securities primarily consist of investments in other companies’ equity securities. Long-term held-to-maturity investments consist of foreign government bonds of $1,242 purchased pursuant to local regulations, maturing in fiscal year 2023, and term deposits with maturities not exceeding one year. These term deposits are renewed due to certain restrictions under the terms of an acquisition arrangement. Long-term cost-method investments consist of investments in equity securities of private entities.

Available-for-sale securities are recorded at fair value in each reporting period and therefore the carrying value of these securities equals their fair value. For cost-method investments, the Company records an impairment charge when the decline in fair value is determined to be other-than-temporary. The fair value of cost-method investments is based on an internal valuation of the investees. The fair value of foreign government bonds is $1,173 as of August 31, ~~2017.~~

Cash flows from purchases, sales, and maturities of available-for-sale and held-to-maturity securities are classified as cash flows from investing activities and reported gross on a combined basis as these principally represent cash flows from held-to-maturity securities.

2020 represents foreign currency translation adjustment.

NOTE 7—5—DERIVATIVE INSTRUMENTS:

In the ordinary course of business, the Company is exposed to foreign currency risk, interest rate risk, equity risk, commodity price changes and credit risk. ~~The Company’s transactions in most of its foreign operations are primarily denominated in local currency.~~ 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

~~Table of Contents~~

~~SYNNEX CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS---(continued)~~

~~For the three and nine months ended August 31, 2017 and 2016~~

~~(currency and share amounts in thousands, except per share amounts)~~

~~(unaudited)~~

instruments to offset a portion of the risk on expected future cash flows, onearnings, net investments in certain foreign subsidiaries and on certain existing assets and liabilities. However, the Company may choose not to hedge certain exposures for a variety of reasons including, but not limited to, accounting considerations and the prohibitive economic cost of hedging particular exposures. There can be no assurance the hedges will offset more than a portion of the financial impact resulting from movements in foreign currency exchange or interest rates.

Generally, the Company does not use derivative instruments to cover equity risk and credit risk. The Company’s hedging program is not used for trading or speculative purposes.

All derivatives are recognized on the balance sheet at their fair value. Changes in the fair value of ~~a derivative~~derivatives are recorded in the Consolidated Statements of Operations, ~~as “Other income (expense), net”~~ or as a component of ~~“Accumulated other comprehensive income (loss)”~~AOCI in the Consolidated Balance Sheets, as discussed below.

~~As part~~

Cash Flow Hedges

To protect gross margins from fluctuations in foreign currency exchange rates, certain of ~~its risk management strategy,~~ the ~~Company uses short-term forward contracts to offset the foreign exchange risk on assets and liabilities~~Company’s subsidiaries with functional currencies that are not in U.S. dollars may hedge a portion of forecasted revenue or costs not denominated in ~~currencies other than~~ the subsidiaries’ functional ~~currency of the respective entities.~~currencies. These ~~forward-exchange contracts are not designated as hedging instruments.~~instruments mature at various dates through August 2022. The ~~forward exchange contracts are recorded at fair value in each reporting period and any gains or losses, resulting from the changes in fair value, are recorded in earnings in the period of change.~~

~~In May 2015, the~~ Company ~~entered into~~also uses interest rate ~~swaps with an aggregate notional amount of $400,000~~derivative contracts to economically convert a portion of its variable-rate debt to fixed-rate debt. The ~~effective portions of~~swaps have maturities at various dates through October 2023. Gains and losses on cash flow hedges are recorded in ~~“Accumulated other comprehensive income (loss)”~~AOCI until the hedged item is recognized in earnings. Deferred gains and losses associated with cash flow hedges of foreign currency revenue are recognized as a component of Revenue from Services in the same period as the related revenue is recognized, and deferred gains and losses related to cash flow hedges of costs are recognized as a component of “Cost of revenue” for “services” and/or “Selling, general and administrative expenses” in the same period as the related costs are recognized. Deferred gains and losses associated with cash flow hedges of interest ~~expense~~payments are recognized in ~~“Other income (expense),~~“Interest expense and Finance charges, net” in the same period as the related expense is recognized. ~~The ineffective portions and amounts excluded from the effectiveness testing of cash flow hedges are recognized in “Other income (expense), net.”~~

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 ~~“Accumulated other comprehensive income (loss)”~~AOCI associated with such derivative instruments are reclassified ~~immediately~~ into ~~“Other income (expense), net.”~~earnings in the period of de-designation. Any subsequent changes in fair value of such derivative instruments are ~~reflected~~recorded in ~~“Other income (expense), net”~~earnings unless they are re-designated as hedges of other transactions.

Generally, the Company does not use derivative instruments to cover equity risk and credit risk. The Company’s policy is not to allow the use of derivatives for trading or speculative purposes. The fair values of the Company’s derivative instruments are also disclosed in Note 8.

~~The following table summarizes the fair value of the Company’s derivative instruments as of August 31, 2017 and November 30, 2016:~~

Fair Value as of
Balance Sheet Line Item August 31, 2017
November 30, 2016
Derivative instruments not designated as hedging instruments
Foreign exchange forward contracts
Other current assets $ 940
$ 1,700
Other accrued liabilities 1,187
979
Derivative instruments designated as cash flow hedges
Interest rate swaps
Other accrued liabilities $ 1,295
$ 706
Other long-term liabilities 5,622
6,542

~~The notional amounts of the foreign exchange forward contracts that were outstanding as of August 31, 2017 and November 30, 2016 were$209,539and~~$275,163, respectively. The notional amounts represent the gross amounts of foreign currency, including the Canadian Dollar, British Pound, Philippines Peso, Mexican Peso, Euro, Brazilian Real, Japanese Yen and Australian Dollar, that will be bought or sold at maturity. The contracts mature in six months or less. In relation to its forward contracts not designated as hedging instruments, the Company recorded losses of $1,581 and $3,780, respectively,

Non-Designated Derivatives

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SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL ~~STATEMENTS---~~STATEMENTS—(continued)

For the three and nine months ended August 31, ~~2017~~2020 and ~~2016~~

2019

(currency and share amounts in thousands, except per share amounts)

(unaudited)

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.

Fair Values of Derivative Instruments in the Consolidated Balance Sheets

The fair values of the Company’s derivative instruments are disclosed in Note 6— Fair Value Measurements and summarized in the table below:

	Value as of
Balance Sheet Line Item	August 31, 2020		November 30, 2019
Derivative instruments not designated as hedging instruments:
Foreign exchange forward contracts (notional value)	$	1,429,429	$	1,192,964
Other current assets		29,808		11,757
Other accrued liabilities		14,123		2,637
Interest rate swap (notional value)	$	100,000	$	100,000
Other assets, net		0		515
Other accrued liabilities		367		0
Derivative instruments designated as cash flow hedges:
Foreign exchange forward contracts (notional value)	$	814,879	$	563,654
Other current assets and other assets, net		38,288		14,523
Other accrued liabilities and other long-term liabilities		740		1,633
Interest rate swaps (notional value)	$	1,500,000	$	1,900,000
Other accrued liabilities		128,418		83,428

~~(unaudited)~~

~~during~~

Volume of Activity

The notional amounts of foreign exchange forward contracts represent the gross amounts of foreign currency, including, principally, the Philippine Peso, Indian Rupee, the Euro, Canadian Dollar, British Pound, the Chinese Yuan, the Japanese Yen and the Brazilian Real that will be bought or sold at maturity. The term and notional amount of interest rate swaps are determined based on management’s assessment of future interest rates and other factors such as debt maturities. The notional amounts for outstanding derivative instruments provide one measure of the transaction volume outstanding and do not represent the amount of the Company’s exposure to credit or market loss. The Company’s exposure to credit loss and market risk will vary over time as currency and interest rates change.

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SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

For the three and nine months ended August 31, ~~2017,~~2020 and ~~losses~~2019

(currency and share amounts in thousands, except per share amounts)

(unaudited)

The Effect of ~~$1,668~~Derivative Instruments on AOCI and ~~$6,126, respectively, during~~ the ~~three and nine months ended August 31, 2016, in “Other income (expense), net.”~~

~~During~~Consolidated Statements of Operations

The following table shows the ~~three and nine months ended August 31, 2017, the Company recorded losses before tax of $577 and~~ gains ~~before tax of $331, respectively,~~ and losses, before ~~tax~~taxes, of ~~$1,857 and $8,120, respectively, for~~ the ~~three and nine months ended August 31, 2016 in “Other comprehensive income (loss)” related to changes in the fair value of its~~Company’s derivative instruments designated as cash flow hedges and not designated as hedging ~~instruments. During~~instruments in Other Comprehensive Income (“OCI”), and the ~~three and nine months ended August 31, 2017 and 2016, there was no hedge ineffectiveness related to these derivative instruments. During~~Consolidated Statements of Operations for the ~~three and nine months ended August 31, 2017 and 2016, there~~periods presented:

	Location of Gain (Loss)	Three Months Ended August 31,						Nine Months Ended August 31,
	in Income	2020			2019			2020			2019

Revenue for services		$	1,158,421		$	1,155,690		$	3,403,305		$	3,480,275
Cost of revenue for services			(747,809	)		(731,472	)		(2,206,256	)		(2,196,212	)
Selling, general and administrative expenses			(498,956	)		(517,135	)		(1,514,734	)		(1,557,906	)
Interest expense and finance charges, net			(28,749	)		(42,945	)		(99,046	)		(127,695	)
Other income (expense), net			(567	)		(1,087	)		3,280			19,764

Derivative instruments designated as cash flow hedges:
Gains (losses) recognized in OCI:
Foreign exchange forward contracts		$	34,764		$	1,592		$	35,795		$	8,304
Interest rate swaps			(1,902	)		(34,058	)		(68,520	)		(104,323	)
Total		$	32,862		$	(32,466	)	$	(32,725	)	$	(96,020	)

Gains (losses) reclassified from AOCI into income:
Foreign exchange forward contracts
Gain (loss) reclassified from AOCI into income	Revenue for services	$	0		$	73		$	0		$	89
Gain (loss) reclassified from AOCI into income	Cost of revenue for services		5,568			4,586			13,322			12,034
Gain (loss) reclassified from AOCI into income	Selling, general and administrative expenses		2,350			1,888			5,805			5,041
Gain (loss) reclassified from AOCI into income	Other income (expense), net		0			10			—			10
Interest rate swaps
Gain (loss) reclassified from AOCI into income	Interest expense and finance charges, net		(10,305	)		(2,065	)		(23,710	)		(4,545	)
Total		$	(2,387	)	$	4,492		$	(4,583	)	$	12,629

Derivative instruments not designated as hedging instruments:
Gains (losses) recognized from foreign exchange forward contracts, net⁽¹⁾	Other income (expense), net	$	24,972		$	(1,286	)	$	32,512		$	8,657
Gains (losses) recognized from interest rate swaps, net	Interest expense and finance charges, net		222			(807	)		(882	)		(2,984	)
Total		$	25,194		$	(2,093	)	$	31,630		$	5,673

(1)

The gains and losses largely offset the currency gains and losses that resulted from changes in the assets and liabilities denominated in nonfunctional currencies.

There were no ~~gains~~material gain or loss amounts excluded from the assessment of effectiveness. Existing net losses ~~recognized~~ in ~~earnings associated with an underlying exposure~~AOCI that ~~did not, or was not~~are expected to ~~occur; nor are there any anticipated~~be reclassified into earnings in the normal course of business within the next twelve ~~months.~~

months are $9,002.

Offsetting of Derivatives

The Company’s derivative instruments are generally governed by standard International Swaps and Derivatives Association, Inc. master agreements, which generally do not require the Company to post any collateral, and specify netting rights, and other customary provisions including events of defaults and termination rights. In the Consolidated Balance Sheets, the Company does not offset derivative assets against liabilities in master netting arrangements. If derivative exposures covered by a qualifying master netting agreement had been netted in the

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SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

For the three and nine months ended August 31, 2020 and 2019

(currency and share amounts in thousands, except per share amounts)

(unaudited)

Consolidated ~~Statement of Financial Position,~~Balance Sheet, the total derivative asset and liability positions would have been reduced by ~~$935~~$12,458 each as of August 31, ~~2017~~2020 and ~~$1,364~~$6,003 each as of November 30, ~~2016.~~

2019.

Credit exposure for derivative financial instruments is limited to the amounts, if any, by which the counterparties’ obligations under the contracts exceed ~~our~~the Company’s obligations to the counterparties. ~~We manage~~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.~~

institutions

NOTE 8—6—FAIR VALUE MEASUREMENTS:

The Company’s fair value measurements are classified and disclosed in one of the following three categories:

Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability;

and

Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).

The following table summarizes the valuation of the Company’s investments and financial instruments that are measured at fair value on a recurring basis:

	As of August 31, 2020								As of November 30, 2019
			Fair value measurement category								Fair value measurement category
	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
Assets:
Cash equivalents	$	50,019	$	50,019	$	0	$	0	$	37,760	$	37,760	$	0	$	0
Marketable equity securities		3,192		3,192		0		0		2,834		2,834		0		0
Foreign government bond		1,378		1,378		0		0		1,228		1,228		0		0
Forward foreign currency exchange contracts		68,096		0		68,096		0		26,280		0		26,280		0
Interest rate swaps		0		0		0		0		515		0		515		0
Liabilities:
Forward foreign currency exchange contracts	$	14,863	$	0	$	14,863	$	0	$	4,270	$	0	$	4,270	$	0
Interest rate swaps		128,785		0		128,785		0		83,428		0		83,428		0

As of August 31, 2017 As of November 30, 2016
Total Fair value measurement category Total Fair value measurement category
Level 1 Level 2 Level 3 Level 1 Level 2 Level 3
Assets:
Cash equivalents $ 49,048
$ 49,048
$ —
$ —
$ 43,043
$ 43,043
$ —
$ —
Available-for-sale securities 2,699
2,699
—
—
1,883
1,883
—
—
Forward foreign currency exchange contracts 940
—
940
—
1,700
—
1,700
—
Liabilities:
Forward foreign currency exchange contracts $ 1,187
$ —
$ 1,187
$ —
$ 979
$ —
$ 979
$ —
Interest rate swaps 6,917
—
6,917
—
7,248
—
7,248
—

The Company’s cash equivalents consist primarily of highly liquid investments in money market funds and term deposits with maturity periods of three months or less. The carrying values of cash equivalents approximate fair value since they are near their maturity. Investments in ~~available-for-sale securities consist of~~marketable equity securities, ~~and~~primarily comprising investments in other companies’ equity securities as per local customary business practice, are recorded at fair value based on quoted market prices. Investment in foreign government bond classified as available-for-sale debt security is recorded at fair value based on quoted market prices. The fair values of forward exchange contracts are measured based on the foreign currency spot and

~~Table of Contents~~

~~SYNNEX CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS---(continued)~~

~~For the three and nine months ended August 31, 2017 and 2016~~

~~(currency and share amounts in thousands, except per share amounts)~~

~~(unaudited)~~

forward rates quoted by the banks or foreign currency dealers. Fair values of long-term foreign currency exchange contracts are measured using valuations based upon quoted prices for similar assets and liabilities in active markets and are valued by reference to similar financial instruments, adjusted for terms specific to the contracts. Fair values of interest rate swaps are measured using standard valuation models using inputs that are readily available in public markets, or can be derived from observable market transactions, including ~~the London Interbank Offered Rate (“LIBOR”)~~LIBOR spot and forward rates.The effect of nonperformance risk on the fair value of derivative instruments was not material as of August 31, ~~2017~~2020 and November 30, ~~2016.~~

2019.

The carrying values of ~~held-to-maturity securities with maturities less than one year,~~ accounts receivable, accounts payable and short-term debt approximate fair value due to their short maturities and interest rates which are variable in nature. The ~~fair value of long-term held-to-maturity investments in foreign government bonds is based on quoted market prices. 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.

During the nine months ended August 31, ~~2017,~~2020, there were no0 transfers between the fair value measurement category levels.

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SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

For the three and nine months ended August 31, 2020 and 2019

(currency and share amounts in thousands, except per share amounts)

(unaudited)

NOTE 9—7—ACCOUNTS RECEIVABLE ARRANGEMENTS:

The Company has an uncommitted supply-chain financing program with a global financial institution under which trade accounts receivable of a certain ~~customer~~customers and ~~its~~their affiliates may be acquired, without recourse, by the financial institution. Available capacity under this program is dependent on the level of ~~our~~the Company’s trade accounts receivable with ~~this customer~~these customers and the financial institution’s willingness to purchase such receivables. As of August 31, ~~2017~~2020 and November 30, ~~2016,~~2019, accounts receivable sold to and held by the financial institution under this program were ~~$8,774~~$17,957 and ~~$8,988,~~$32,472, respectively. Discount fees related to the sale of trade accounts receivable under this facility are included in “Interest expense and finance charges, net” in the Consolidated ~~Statement~~Statements of Operations. During the three and nine months ended August 31, ~~2017~~2020 and ~~2016,~~2019, discount fees were not material to the ~~Company's~~Company’s results of operations.

SYNNEX ~~Infotec,~~Japan, the ~~Company's~~Company’s Japanese Technology Solutions subsidiary, has arrangements with ~~various banks and~~ financial institutions for the sale and financing of approved accounts receivable and notes receivable. The amounts outstanding under these arrangements that were sold, but not collected, as of August 31, ~~2017~~2020 and November 30, ~~2016~~2019 were ~~$2,414~~$5,760 and ~~$3,564,~~$2,856, respectively.

The Company also has other financing agreements in North America with ~~various~~ financial institutions (“Flooring Companies”) to allow certain customers of the Company to finance their purchases directly with the Flooring Companies. Under these agreements, the Flooring Companies pay to the Company the selling price of products sold to various customers, less a discount, within approximately 15 to 30 days from the date of sale. The Company is contingently liable to repurchase inventory sold under flooring agreements in the event of any default by its customers under the agreement and such inventory being repossessed by the Flooring Companies. ~~Please see~~ See Note 1615 — Commitments and Contingencies for further information.

The following table summarizes the net sales financed through ~~the~~ flooring agreements and the flooring fees incurred:


	Three Months Ended				Nine Months Ended				Three Months Ended				Nine Months Ended
	August 31, 2017		August 31, 2016		August 31, 2017		August 31, 2016		August 31, 2020		August 31, 2019		August 31, 2020		August 31, 2019
Net sales financed	$	313,058	$	362,491	$	869,478	$	922,448	$	584,901	$	521,341	$	1,512,429	$	1,424,081
Flooring fees⁽¹⁾	2,126		2,287		5,887		5,996			3,690		3,584		9,563		9,410


(1)	Flooring fees are included within “Interest expense and finance charges, net.”

As of August 31, ~~2017~~2020 and November 30, ~~2016,~~2019, accounts receivable subject to flooring agreements were ~~$63,665~~$58,567 and ~~$65,099,~~$69,637, respectively.

NOTE 8—BORROWINGS:

Borrowings consist of the following:

	As of
	August 31, 2020			November 30, 2019
SYNNEX United States accounts receivable securitization arrangement	$	0		$	108,000
SYNNEX Japan credit facility - revolving line of credit component		72,696			5,936
SYNNEX United States credit agreement - revolving line of credit component		0			25,800
SYNNEX United States credit agreement - current portion of term loan component		60,000			60,000
SYNNEX United States term loan credit agreement - current portion		90,000			90,000
Other borrowings		21,418			9,233
Borrowings, current	$	244,114		$	298,969

SYNNEX Japan credit facility - term loan component	$	66,088		$	63,921
SYNNEX United States credit agreement - term loan component		975,000			1,020,000
SYNNEX United States term loan credit agreement		1,575,000			1,642,500
Other term debt		95			298
Long-term borrowings, before unamortized debt discount and issuance costs	$	2,616,183		$	2,726,719
Less: unamortized debt discount and issuance costs		(6,374	)		(8,452	)
Long-term borrowings	$	2,609,809		$	2,718,267

Table of Contents

SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL ~~STATEMENTS---~~STATEMENTS—(continued)

For the three and nine months ended August 31, ~~2017~~2020 and ~~2016~~

2019

(currency and share amounts in thousands, except per share amounts)

(unaudited)

~~NOTE 10—BORROWINGS:~~

~~Borrowings consist of~~

SYNNEX United States accounts receivable securitization arrangement

In the ~~following:~~

As of
August 31, 2017 November 30, 2016
SYNNEX U.S. AR arrangement $ 353,000
$ 262,900
SYNNEX Canada AR arrangement 24,033
—
SYNNEX U.S. credit agreement 558,594
585,938
SYNNEX Infotec credit facility 95,472
81,251
India credit facilities 12,000
12,000
Other borrowings 13,099
24,877
Total borrowings 1,056,198
966,966
Less: unamortized debt discount and issuance costs (2,209 ) (2,982 )
Total borrowings, net of unamortized debt discount and issuance costs 1,053,989
963,984
Less: current portion (489,904 ) (362,889 )
Noncurrent portion $ 564,085
$ 601,095

~~SYNNEX U.S. AR arrangement~~

~~The~~United States, the Company has an accounts receivable securitization program to provide additional capital for its operations (the “U.S. AR Arrangement”). ~~The U.S. AR Arrangement expires on November 1, 2019. Under~~Prior to the amendment in May 2020 that is described in this paragraph, under the terms of the U.S. AR Arrangement, the Company’s subsidiary that is the borrower under this facility ~~can~~could borrow up to a maximum of ~~$600,000~~$850,000 based upon eligible trade accounts ~~receivable denominated~~receivable. The effective borrowing cost under the U.S. AR Arrangement is a blended rate based upon the composition of the lenders, that includes prevailing dealer commercial paper rates and a rate based upon LIBOR.In addition, prior to the May 2020 amendment, a program fee of 0.75% per annum based on the used portion of the commitment, and a facility fee of 0.35% per annum, was payable on the adjusted commitment of the lenders. In May 2020, the U.S. AR Arrangement was amended to revise the maximum borrowing amount to $650,000 and to extend the maturity date of the U.S. AR Arrangement to May 2022. The program fee payable on the used portion of the lenders’ commitment, was modified to accrue at 1.25% per annum in ~~United States dollars.~~the case of lender groups who fund their advances based on prevailing commercial paper rates, and 1.30% per annum in the case of lender groups who fund their advances based on LIBOR (subject to a 0.50% per annum floor). The amendment also modified the facility fee payable on the adjusted commitment of the lenders, to accrue at different tiers ranging between 0.35% per annum and 0.45% per annum depending on the amount of outstanding advances from time to time. In addition, the U.S. AR Arrangement includes an accordion feature to allow requests for an increase in the lenders' commitment by an additional $120,000. The effective borrowing cost under the U.S. AR Arrangement is a blended rate that includes prevailing dealer commercial paper rates and the daily London Interbank Offered Rate (“LIBOR”), plus a program fee of 0.75% per annum based on the used portion of the commitment, and a facility fee of 0.35% per annum payable on the adjusted commitment of the lenders. As of August 31, 2017 and November 30, 2016, $353,000 and $262,900, respectively, was outstanding under the U.S. AR Arrangement.

$150,000.

Under the terms of the U.S. AR Arrangement, the Company and ~~one~~two of its U.S. subsidiaries sell, on a revolving basis, their receivables ~~(other than certain specifically excluded receivables)~~ to a wholly-owned, bankruptcy-remote subsidiary. The borrowings are funded by pledging all of the rights, title and interest in ~~and to~~ the receivables acquired by the Company's bankruptcy-remote subsidiary as security. Any ~~borrowings~~amounts received under the U.S. AR Arrangement are recorded as debt on the Company's Consolidated Balance Sheets.

SYNNEX Canada ARaccounts receivable securitization arrangement

~~In May 2017,~~

SYNNEX Canada Limited (“SYNNEX Canada”) ~~entered into~~, the Company's Technology Solutions subsidiary in Canada, has an accounts receivable securitization program with a bank to provide additional capital for its operations. In March 2020, SYNNEX Canada renewed this agreement to mature in May 2023. Under the terms of this program, SYNNEX Canada can borrow up to CAD100,000, or $76,628, in exchange for the transfer of eligible trade accounts receivable, on an ongoing revolving ~~basis, up to CAD65,000, or $52,071, through May 10, 2020.~~basis. The program includes an accordion feature that allows SYNNEX Canada to ~~allow a~~ request toan increase in the ~~lender's~~bank's commitment byup to an additional ~~CAD25,000,~~CAD50,000, or ~~$20,027.~~$38,314. Any ~~borrowings~~amounts received under this arrangement are recorded as debt on the Company's Consolidated Balance ~~Sheets.~~Sheets and are secured by pledging all of the rights, title and interest in the receivables to the bank. The effective borrowing cost is based on the ~~weighted average~~weighted-average of the Canadian Dollar Offered Rate plus a margin of ~~2.00%~~1.00% per annum and the prevailing lender commercial paper rates. In addition, prior to an event of termination, SYNNEX Canada is obligated to pay a program fee of 0.75% per annum based on the used portion of the commitment. ~~It will pay~~After an event of termination, the program fee shall be the sum of the base rate and 2.50%per annum, based on the used portion of the commitment. SYNNEX Canada pays a fee of 0.40% per annum for any unused portion of the commitment ~~below CAD25,000~~up to CAD60,000, or $45,977, and ~~an additional 0.55% per annum if~~when the unused portion exceeds ~~CAD25,000.~~CAD60,000, or $45,977, a fee of 0.55% per annum of the unused portion of the commitment. As of both August 31, ~~2017, borrowings outstanding under this arrangement were $24,033.~~

~~SYNNEX U.S. credit agreement~~

As of August 31, 2017, the Company’s senior secured credit agreement (the “U.S. Credit Agreement”) was comprised of a $275,000 revolving credit facility and a $625,000 term loan. The Company could request incremental commitments to increase the principal amount of the revolving line of credit or term loan available under the U.S. Credit Agreement up to $350,000.

~~Table of Contents~~

~~SYNNEX CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS---(continued)~~

~~For the three and nine months ended August 31, 2017 and 2016~~

~~(currency and share amounts in thousands, except per share amounts)~~

~~(unaudited)~~

Interest on borrowings under the U.S. Credit Agreement can be based on LIBOR or a base rate at the Company’s option. Through August 31, 2017, loans borrowed under the U.S. Credit Agreement had interest, in the case of LIBOR loans, at a per annum rate equal to the applicable LIBOR, plus a margin which could range from 1.50% to 2.25%, based on the Company’s consolidated leverage ratios, as determined in accordance with the U.S. Credit Agreement. Loans borrowed under the U.S. Credit Agreement that were not LIBOR loans, but were instead base rate loans, had interest at a per annum rate equal to (i) the greatest of (A) the Federal Funds Rate plus a margin of 1/2 of 1.0%, (B) LIBOR plus 1.0% per annum, and (C) the rate of interest announced, from time to time, by the agent, Bank of America, N.A, as its “prime rate,” plus (ii) a margin which could range from 0.50% to 1.25%, based on the Company's consolidated leverage ratios as determined in accordance with the U.S. Credit Agreement. The unused revolving credit facility was subject to a commitment fee ranging from 0.20% to 0.35% per annum, based on the Company's consolidated leverage ratios.

~~As of August 31, 2017~~2020 and November 30, ~~2016, balances~~2019, there was 0 outstanding balance under this arrangement.

The Company has guaranteed the ~~term loan component~~performance obligations of ~~the U.S. Credit Agreement were $558,594 and $585,938, respectively. There were no borrowings outstanding~~SYNNEX Canada under ~~the revolving~~this facility.

SYNNEX Japan credit facility ~~as of either August 31, 2017 or November 30, 2016.~~

Subsequent to the fiscal quarter ended August 31, 2017, on September 1, 2017, the U.S. Credit Agreement was amended to increase the revolving credit facility commitment to $600,000 and the term loan to $1,200,000. The incremental commitment amount to increase the principal amount of the revolving line of credit or term loan was increased to $400,000. The U.S. Credit Agreement was extended to mature in September 2022. The outstanding principal amount of the term loan is repayable in quarterly installments of $15,000 commencing on February 28, 2018, with the unpaid balance due in full on the September 2022 maturity date. Interest on the borrowings under the U.S. Credit Agreement was amended to change the margin for LIBOR loans to range from 1.25% to 2.00% and for base rate loans to range from 0.25% to 1.00%, provided that LIBOR shall not be less than zero. In addition, the commitment fee was modified to range from 0.175% to 0.30% per annum. The entire term loan of $1,200,000 was fully drawn in September 2017.

SYNNEX ~~Infotec credit facility~~

~~SYNNEX Infotec~~Japan has a credit agreement with a group of ~~financial institutions~~banks for a maximum commitment of ~~JPY14,000,000,~~JPY15,000,000 or ~~$127,296.~~$141,616. The credit ~~facility~~agreement is comprised of a ~~JPY6,000,000,~~JPY7,000,000, or ~~$54,555,~~$66,088, term loan and a JPY8,000,000, or ~~$72,741, short-term~~$75,529, revolving credit ~~facility.~~facility and expires in November 2021. The interest rate for the term loan and revolving credit facility is based on the Tokyo Interbank Offered Rate, plus a margin, ofwhich is based on the Company’s consolidated leverage ratio, and currently equals 0.70% per annum. The unused line fee on the revolving credit facility is currently 0.10% per ~~annum. This credit facility expires in November 2018. As of August 31, 2017 and November 30, 2016,~~annum based on the balances outstanding under the term loan component of the facility were $54,555 and $52,420, respectively. Balances outstanding under the revolving credit facility were $40,917 and $28,831 as of August 31, 2017 and November 30, 2016, respectively.Company's consolidated current leverage ratio. The term loan can be repaid at any time prior to the expiration date without penalty. The Company has guaranteed the obligations of SYNNEX ~~Infotec~~Japan under this facility.

Concentrix India revolving lines of credit facilities

The Company's Indian subsidiaries have credit facilities with a financial institution to borrow up to an aggregate amount of $22,000. The interest rate under these facilities is the higher of the bank's minimum lending rate or LIBOR, plus a margin of 0.9% per annum. The Company guarantees the obligations under these credit facilities. These credit facilities can be terminated at any time by the Company’s Indian subsidiaries or the financial institution. There were 0 borrowings outstanding under these credit facilities as of either August 31, 2020 or November 30, 2019.

Table of Contents

SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

For the three and nine months ended August 31, 2020 and 2019

(currency and share amounts in thousands, except per share amounts)

(unaudited)

SYNNEX United States credit agreement

In the United States, the Company has a senior secured credit agreement (as amended, the "U.S. Credit Agreement") with a group of financial institutions. The U.S. Credit Agreement includes a $600,000 commitment for a revolving credit facility and a term loan in the original principal amount of $1,200,000. The Company may request incremental commitments to increase the principal amount of the revolving line of credit or term loan by $500,000, plus an additional amount which is dependent upon the Company's pro forma first lien leverage ratio, as calculated under the U.S. Credit Agreement. The U.S. Credit Agreement matures in September 2022. The outstanding principal amount of the term loan is repayable in quarterly installments of $15,000, with the unpaid balance due in full on the September 2022 maturity date. The term loan can be repaid at any time prior to the maturity date without penalty. Interest on borrowings under the U.S. Credit Agreement can be based on LIBOR or a base rate at the Company's option, plus a margin. The margin for LIBOR loans ranges from 1.25% to 2.00% and the margin for base rate loans ranges from 0.25% to 1.00%, provided that LIBOR shall not be less than 0. The base rate is a variable rate which is the highest of (a) the Federal Funds Rate, plus a margin of 0.5%, (b) the rate of interest announced, from time to time, by the agent, Bank of America, N.A., as its “prime rate,” and (c) the Eurodollar Rate, plus 1.0%. The unused revolving credit facility commitment fee ranges from 0.175% to 0.30% per annum. The margins above the applicable interest rates and the revolving commitment fee for revolving loans are based on the Company’s consolidated leverage ratio, as calculated under the U.S. Credit Agreement. The Company’s obligations under the U.S. Credit Agreement are secured by substantially all of the parent company’s and its United States domestic subsidiaries’ assets on a pari passu basis with the interests of the lenders under the U.S. Term Loan Credit Agreement (defined below) pursuant to an intercreditor agreement and are guaranteed by certain of the Company's United States domestic subsidiaries.

SYNNEX United States term loan credit agreement

The Company has a secured term loan credit agreement (the “U.S. Term Loan Credit Agreement”) with a group of financial institutions in the original principal amount of $1,800,000. The U.S. Term Loan Credit Agreement matures in October 2023. The outstanding principal amount of the term loans is payable in quarterly installments of $22,500, with the unpaid balance due in full on the maturity date. The term loan can be repaid at any time prior to the expiration date without penalty. Interest on borrowings under the U.S. Term Loan Credit Agreement can be based on LIBOR or a base rate at the Company’s option, plus a margin. The margin for LIBOR loans ranges from 1.25% to 1.75% and the margin for base rate loans ranges from 0.25% to 0.75%, provided that LIBOR shall not be less than 0. The base rate is a variable rate which is the highest of (a) 0.5% plus the greater of (x) the Federal Funds Rate in effect on such day and (y) the overnight bank funding rate in effect on such day, (b) the Eurodollar Rate plus 1.0% per annum, and (c) the rate of interest last quoted by The Wall Street Journal as the “Prime Rate” in the U.S. During the period in which the term loans were available to be drawn, the Company paid term loan commitment fees. The margins above the Company's applicable interest rates are, and the term loan commitment fee were, based on the Company's consolidated leverage ratio as calculated under the U.S. Term Loan Credit Agreement. The Company's obligations under the U.S. Term Loan Credit Agreement are secured by substantially all of the Company’s and certain of its domestic subsidiaries’ assets on a pari passu basis with the interests of the lenders under the existing U.S. Credit Agreement pursuant to an intercreditor agreement, and are guaranteed by certain of its domestic subsidiaries.

SYNNEX Canada revolving line of credit

~~In May 2017,~~

SYNNEX Canada ~~entered into~~has an uncommitted revolving line of credit with a bank under which it can borrow up to ~~CAD35,000,~~CAD50,000, or ~~$28,038.~~$38,314. Borrowings under the facility are secured by eligible inventory and bear interest at a base rate plus a margin ranging from 0.50% to 2.25% depending on the base rate used. The base rate could be a Banker's Acceptance Rate, a Canadian Prime Rate, LIBOR or USU.S. Base Rate. ~~As of August 31, 2017, there were no borrowings outstanding under the credit facility.~~

~~India credit facilities~~

The Company's Indian subsidiaries have credit facilities with a financial institution to borrow up to an aggregate amount of $22,000. The interest rate is the higher of the bank's minimum lending rate or LIBOR plus a margin of 0.9% per annum. These credit facilities can be terminated at any time by the Company’s Indian subsidiaries or the financial institution. As of both August 31, ~~2017~~2020 and November 30, ~~2016, $12,000 was~~2019, there were 0 borrowings outstanding under ~~these facilities.~~

this credit facility.

Other borrowings

~~As of August 31, 2017~~ and ~~November 30, 2016, the Company recorded $8,683~~term debt

Other borrowings and $8,657, respectively, on its Consolidated Balance Sheets in obligations attributable to SYNNEX Infotec for the sale and financing of this subsidiary’s approved accounts receivable and notes receivable with recourse provisions.

~~Table of Contents~~

~~SYNNEX CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS---(continued)~~

~~For the three and nine months ended August 31, 2017 and 2016~~

~~(currency and share amounts in thousands, except per share amounts)~~

~~(unaudited)~~

~~The Company also maintains other~~term debt include lines of credit with financial institutions at certain locations outside the United States, ~~aggregating $21,907.~~factoring of accounts receivable with recourse provisions, capital leases, a building mortgage and book overdrafts. As of August 31, 2020, commitments for these revolving credit facilities aggregated $83,335. Interest rates and other terms of borrowing under these lines of credit vary ~~from country to~~by country, depending on local market conditions. ~~As of August 31, 2017 and November 30, 2016, $31 and $8,774, respectively, was outstanding~~Borrowings under these ~~facilities.~~

~~SYNNEX Canada had a term loan associated with the purchase~~lines of its logistics facility in Guelph, Canada. The interest rate for the unpaid principal amount was a fixed rate of 5.374% per annum. As of November 30, 2016, the balance outstanding on the term loan was $4,064. The loan was repaid in full upon maturity in April 2017.

~~As of August 31, 2017 and November 30, 2016,~~credit facilities are guaranteed by the Company ~~had book overdrafts of $4,385 and $3,382, respectively. Book overdrafts represent checks issued in excess of balances on deposit in the applicable bank~~or secured by eligible accounts and which have not been paid by the applicable bank at the balance sheet date. Under the terms of the Company's banking arrangements, the respective financial institutions are not legally obligated to honor the book overdraft balances.

receivable.

The maximum commitment amounts for local currency credit facilities have been translated into United States Dollars at August 31, ~~2017~~2020 exchange rates.

Table of Contents

SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

For the three and nine months ended August 31, 2020 and 2019

(currency and share amounts in thousands, except per share amounts)

(unaudited)

Future principal payments

As of August 31, ~~2017,~~2020, future principal payments under the above loans are as follows:

Fiscal Years Ending November 30,
2020 (remaining three months)	$	131,519
2021		216,274
2022		1,050,004
2023		1,462,500
Total	$	2,860,297

Fiscal Years Ending November 30,
2017 (remaining three months) $ 450,842
2018 105,349
2019 62,507
2020 437,500
$ 1,056,198

~~Refer above for the increase in the Company’s term loan amount and extension of the maturity date under the U.S. credit agreement subsequent to August 31, 2017.~~

Interest expense and finance charges

The total interest expense and finance charges for the Company's borrowings were ~~$10,224~~$31,021 and ~~$28,186,~~$105,017, respectively, for the three and nine months ended August 31, ~~2017,~~2020, and ~~$8,178~~$44,401 and ~~$22,022,~~$132,111, respectively, for the three and nine months ended August 31, ~~2016.~~2019. The variable interest rates ranged between ~~0.71%~~0.74% and ~~4.50%~~4.95% during the three months ended August 31, ~~2017,~~2020, and ~~0.58%~~between 0.74% and ~~4.50%~~8.41% during the nine months ended August 31, ~~2017~~2020. During the three months ended August 31, 2019, the variable interest rate ranged between 0.87% and 10.74%, and between ~~0.73%~~0.70% and ~~4.00%~~11.38% during ~~both~~ the ~~three and~~ nine months ended August 31, ~~2016.~~

2019.

Covenant compliance

The Company's credit facilities have a number of covenants and restrictions that, among other things, require the Company to maintain specified financial ratios and satisfy certain financial condition tests. The covenants also limit the Company’s ability to incur additional debt, make or forgive intercompany loans, pay dividends and make other types of distributions, make certain acquisitions, repurchase the Company’s stock, create liens, cancel debt owed to the Company, enter into agreements with affiliates, modify the nature of the Company’s business, enter into sale-leaseback transactions, make certain investments, ~~enter into new real estate leases,~~ transfer and sell assets, cancel or terminate any material contracts and merge or consolidate. As of August 31, ~~2017,~~2020, the Company was in compliance with all material covenants for the above arrangements.

~~Table of Contents~~

~~SYNNEX CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS---(continued)~~

~~For the three and nine months ended August 31, 2017 and 2016~~

~~(currency and share amounts in thousands, except per share amounts)~~

~~(unaudited)~~

NOTE ~~11—~~9—EARNINGS PER COMMON SHARE:

The following table sets forth the computation of basic and diluted earnings per common share for the periods ~~indicated.~~

indicated:


	Three Months Ended						Nine Months Ended						Three Months Ended						Nine Months Ended
	August 31, 2017			August 31, 2016			August 31, 2017			August 31, 2016			August 31, 2020			August 31, 2019			August 31, 2020			August 31, 2019
Basic earnings per common share:
Net income attributable to SYNNEX Corporation	$	75,163		$	58,704		$	210,100		$	149,628
Net income													$	134,464		$	123,132		$	314,008		$	324,711
Less: net income allocated to participating securities⁽¹⁾	(689		)	(592		)	(1,951		)	(1,566		)		(1,491	)		(1,070	)		(3,623	)		(2,894	)
Net income attributable to SYNNEX Corporation common stockholders	$	74,474		$	58,112		$	208,149		$	148,062
Net income attributable to common stockholders													$	132,973		$	122,062		$	310,385		$	321,817

Weighted-average number of common shares - basic	39,563			39,346			39,530			39,285				50,890			50,601			50,851			50,661
Basic earnings attributable to SYNNEX Corporation per common share	$	1.88		$	1.48		$	5.27		$	3.77

Basic earnings per common share													$	2.61		$	2.41		$	6.10		$	6.35

Diluted earnings per common share:
Net income attributable to SYNNEX Corporation	$	75,163		$	58,704		$	210,100		$	149,628
Net income													$	134,464		$	123,132		$	314,008		$	324,711
Less: net income allocated to participating securities⁽¹⁾	(686		)	(589		)	(1,943		)	(1,559		)		(1,481	)		(1,066	)		(3,602	)		(2,883	)
Net income attributable to SYNNEX Corporation common stockholders	$	74,477		$	58,115		$	208,157		$	148,069
Net income attributable to common stockholders													$	132,983		$	122,066		$	310,406		$	321,828

Weighted-average number of common shares - basic	39,563			39,346			39,530			39,285				50,890			50,601			50,851			50,661
Effect of dilutive securities:
Stock options and restricted stock units	185			188			192			207				351			244			321			242
Weighted-average number of common shares - diluted	39,748			39,534			39,722			39,492				51,241			50,845			51,172			50,903
Diluted earnings attributable to SYNNEX Corporation per common share	$	1.87		$	1.47		$	5.24		$	3.75

Diluted earnings per common share													$	2.60		$	2.40		$	6.07		$	6.32
Anti-dilutive shares excluded from diluted earnings per share calculation	9			5			12			10				41			121			83			120

~~(1)~~

(1)

Restricted stock awards granted to employees ~~and non-employee directors~~ by the Company ~~and its subsidiaries~~ are considered participating securities.

Table of Contents

SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL ~~STATEMENTS---~~STATEMENTS—(continued)

For the three and nine months ended August 31, ~~2017~~2020 and ~~2016~~

2019

(currency and share amounts in thousands, except per share amounts)

(unaudited)

NOTE ~~12—~~10—SEGMENT INFORMATION:

Summarized financial information related to the Company’s reportable business segments for the ~~three and nine months ended August 31, 2017 and 2016~~periods presented is shown below:

	Technology Solutions		Concentrix		Inter-Segment Elimination			Consolidated
Three months ended August 31, 2020
Revenue	$	5,306,361	$	1,163,694	$	(5,273	)	$	6,464,782
External revenue		5,306,361		1,158,421					6,464,782
Operating income		132,373		76,763		—			209,136
Three months ended August 31, 2019
Revenue	$	5,047,970	$	1,160,928	$	(5,240	)	$	6,203,659
External revenue		5,047,968		1,155,690					6,203,659
Operating income		138,830		70,025		—			208,855
Nine months ended August 31, 2020
Revenue	$	13,858,313	$	3,418,676	$	(15,371	)	$	17,261,619
External revenue		13,858,313		3,403,305		—			17,261,619
Operating income		320,962		188,554		—			509,515
Nine months ended August 31, 2019
Revenue	$	13,695,729	$	3,495,076	$	(14,805	)	$	17,176,000
External revenue		13,695,725		3,480,275		—			17,176,000
Operating income		352,594		192,879		—			545,473
Total assets as of August 31, 2020	$	11,164,679	$	5,110,950	$	(3,012,522	)	$	13,263,107
Total assets as of November 30, 2019	$	10,312,512	$	4,645,475	$	(3,260,027	)	$	11,697,960

Technology Solutions Concentrix
Inter-Segment
Elimination
Consolidated
Three months ended August 31, 2017
Revenue $ 3,784,678
$ 495,974
$ (3,966 ) $ 4,276,686
External revenue 3,784,599
492,087
4,276,686
Operating income 99,968
22,248
—
122,216
Three months ended August 31, 2016
Revenue 3,267,354
406,715
(4,255 ) 3,669,814
External revenue 3,267,287
402,527
3,669,814
Operating income 79,410
18,564
48
98,022
Nine months ended August 31, 2017
Revenue $ 10,289,694
$ 1,455,817
$ (11,688 ) $ 11,733,823
External revenue 10,289,463
1,444,360
11,733,823
Operating income 282,094
66,989
22
349,105
Nine months ended August 31, 2016
Revenue 9,099,969
1,087,332
(12,366 ) 10,174,935
External revenue 9,099,762
1,075,173
10,174,935
Operating income 222,896
25,855
203
248,954
Total assets as of August 31, 2017 $ 5,226,676
$ 1,632,479
$ (1,119,795 ) $ 5,739,360
Total assets as of November 30, 2016 4,844,271
1,614,623
(1,243,613 ) 5,215,281

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

Geographic information

~~Shown below is summarized financial information related~~

The Company attributes revenues from external customers to the ~~geographic areas in which the Company operates. The revenue attributable to countries is based on the geography of the entities~~country from where ~~the~~Technology Solutions products are delivered and the country of domicile of the Concentrix legal entity that is party to the client contract. Shown below are the countries that accounted for 10% or ~~from where customer service contracts are managed.~~more of the Company’s revenue and property and equipment, net, for the periods presented:

	Three Months Ended				Nine Months Ended
	August 31, 2020		August 31, 2019		August 31, 2020		August 31, 2019
Revenue:
United States	$	4,650,397	$	4,181,667	$	11,576,670	$	11,327,961
Others		1,814,385		2,021,992		5,684,948		5,848,039
Total	$	6,464,782	$	6,203,659	$	17,261,619	$	17,176,000

	As of
	August 31, 2020		November 30, 2019
Property and equipment, net:
United States	$	279,008	$	287,679
Philippines		69,315		63,421
Others		235,628		218,799
Total	$	583,951	$	569,899

Three Months Ended Nine Months Ended
August 31, 2017 August 31, 2016 August 31, 2017 August 31, 2016
Revenue:
United States $ 3,188,407
$ 2,726,126
$ 8,563,766
$ 7,456,117
Canada 410,916
369,439
1,187,843
1,101,464
Others 677,363
574,249
1,982,214
1,617,354
Total $ 4,276,686
$ 3,669,814
$ 11,733,823
$ 10,174,935

Table of Contents

SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL ~~STATEMENTS---~~STATEMENTS—(continued)

For the three and nine months ended August 31, ~~2017~~2020 and ~~2016~~

2019

(currency and share amounts in thousands, except per share amounts)

(unaudited)

As of
August 31, 2017 November 30, 2016
Property and equipment, net:
United States $ 139,552
$ 129,633
India 40,477
41,285
Philippines 32,001
36,219
Others 117,855
105,579
Total $ 329,885
$ 312,716

~~During the three and nine months ended August 31, 2017 and 2016, no other country represented more than 10%of total revenue. As of August 31, 2017 and November 30, 2016, no other country represented more than 10%of total net property and equipment.~~

NOTE ~~13—~~11—RELATED PARTY TRANSACTIONS:

The Company has a business relationship with MiTAC Holdings Corporation (“MiTAC Holdings”), a publicly-traded company in Taiwan, which began in 1992 when MiTAC Holdings became the Company's primary investor through its affiliates. As of both August 31, ~~2017~~2020 and November 30, ~~2016,~~2019, MiTAC Holdings and its affiliates beneficially owned approximately~~24%~~ 18% of the Company’s outstanding common stock. Mr. Matthew Miau, ~~the Company’s~~ Chairman Emeritus of the Company’s Board of Directors and a director, is the Chairman of MiTAC Holdings and a director or officer of MiTAC Holdings’ affiliates.

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

As noted above, MiTAC Holdings and its affiliates in the aggregate beneficially owned approximately ~~24%~~18% of the Company’s outstanding common stock as of August 31, ~~2017.~~2020. These shares are owned by the following entities:

_________________________

(1)
~~(1)~~	Shares are held via Silver Star Developments Ltd., a wholly-owned subsidiary of MiTAC Holdings. Excludes ~~376~~190 shares held directly ~~held~~ by Mr. ~~Matthew~~ Miau, ~~and 218~~217 shares indirectly held by Mr. ~~Mathew~~ Miau through a charitable remainder ~~trust.~~

	trust, and 190 shares held by his spouse.
(2)		Synnex Technology International Corp. (“Synnex Technology International”) is a separate entity from the Company and is a publicly-traded corporation in Taiwan. Shares are held via Peer Development Ltd., a wholly-owned subsidiary of Synnex Technology International. MiTAC Holdings owns a noncontrolling interest of ~~8.7%~~8.7% in MiTAC Incorporated, a privately-held Taiwanese company, which in turn holds a noncontrolling interest of ~~13.6%~~14.9% in Synnex Technology International. Neither MiTAC Holdings nor Mr. Miau is affiliated with any person(s), entity, or entities that hold a majority interest in MiTAC Incorporated.

MiTAC Holdings generally has significant influence over the Company regarding matters submitted to stockholders for consideration, including any merger or acquisition of the Company. Among other things, this could have the effect of delaying, deterring or preventing a change of control over the Company.

The ~~Company purchased inventories from~~following table presents the Company's transactions with MiTAC Holdings and its affiliates ~~totaling $66,298~~for the periods indicated:

	Three Months Ended				Nine Months Ended
	August 31, 2020		August 31, 2019		August 31, 2020		August 31, 2019
Purchases of inventories and services	$	53,365	$	41,989	$	151,929	$	120,093
Sale of products to MiTAC Holdings and affiliates		285		142		882		546
Rent and overhead costs incurred for use of facilities of MiTAC Holdings and affiliates		27		0		91		0

The following table presents the Company’s receivable from and ~~$183,390, respectively, during the three and nine months ended~~ ~~August 31, 2017, and totaling $44,060 and $105,405, respectively, during the three and nine months ended August 31, 2016. The Company’s sales~~payable to MiTAC Holdings and its affiliates ~~during~~for the ~~three and nine months ended~~ ~~August 31, 2017~~ totaled $237 and $972, respectively, and totaled $635 and $1,298, respectively, during the three and nine months ended August 31, 2016. In addition, the Company received reimbursements of rent and overhead costs for facilities used by MiTAC Holdings amounting to $36 and $109, respectively,~~during the three and nine months ended~~ ~~August 31, 2017, and $98 and $172, respectively, during the three and nine months ended August 31, 2016.~~periods presented:

	August 31, 2020		November 30, 2019
Receivable from related parties (included in Accounts receivable, net)	$	15,841	$	4,405
Payable to related parties (included in Accounts payable)		28,761		23,179

~~Table of Contents~~

~~SYNNEX CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS---(continued)~~

~~For the three and nine months ended August 31, 2017 and 2016~~

~~(currency and share amounts in thousands, except per share amounts)~~

~~(unaudited)~~

The Company’s business relationship with MiTAC Holdings and its affiliates has been informal and is generally not governed by long-term commitments or arrangements with respect to pricing terms, revenue or capacity commitments. The Company negotiates pricing and other material terms on a case-by-case basis with MiTAC ~~Holdings.~~Holdings and affiliates. The Company has adopted a policy requiring that material transactions with MiTAC Holdings or its related parties be approved by its Audit Committee, which is composed solely of independent directors. In addition, Mr. ~~Matthew~~ Miau’s compensation is approved by the Nominating and Corporate Governance Committee, which is also composed solely of independent directors.

Synnex Technology International is a publicly-traded corporation in Taiwan that currently provides distribution and fulfillment services to various markets in Asia and Australia, and is also a potential competitor of the Company. Neither MiTAC Holdings nor Synnex Technology International is restricted from competing with the Company.

NOTE ~~14—~~12—PENSION AND EMPLOYEE BENEFITS PLANS:

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SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

For the three and nine months ended August 31, 2020 and 2019

(currency and share amounts in thousands, except per share amounts)

(unaudited)

Company may make discretionary contributions under the plans. Employees in most of the Company's foreign subsidiaries are covered by government-mandated defined contribution plans. During the three and nine months ended August 31, 2020, the Company contributed $18,874 and $51,487, respectively, to defined contribution plans. During the three and nine months ended August 31, 2019, the Company contributed $11,052 and $34,596, respectively, to defined contribution plans.

The Company has a deferred compensation plan for certain directors and officers. Distributions under the plan are subject to Section 409A of the United States Tax Code. The Company may invest balances in the plan in trading securities reported on recognized exchanges. As of August 31, 2020 and November 30, 2019, the deferred compensation liability balance was $5,511 and $5,389, respectively.

Defined Benefit Plans

The Company has defined benefit pension or retirement plans for eligible employees in certain foreign subsidiaries. Benefits under these plans are primarily based on years of service and compensation during the years immediately preceding retirement or termination of participation in the plans. In addition, the Company ~~provides government mandated postemployment~~has a frozen defined benefit ~~plans to~~pension plan, which includes both a qualified and non-qualified portion, for all eligible employees in ~~certain foreign subsidiaries. Net~~the U.S. (“the cash balance plan”). The pension ~~costs were $1,456~~benefit formula for the cash balance plan is determined by a combination of compensation, age-based credits and ~~$5,000, respectively, during the three and nine months ended August 31, 2017, and $911 and $1,909, respectively, during the three and nine months ended August 31, 2016.~~annual guaranteed interest credits. The Company contributed $1,321 and $2,599, respectively, to these plans during the three and nine months ended August 31, 2017, and $776 and $1,958, respectively, during the three and nine months ended August 31, 2016. As of August 31, 2017 and November 30, 2016, these plans were unfunded by $17,643 and $16,113, respectively.

The Company has 401(k) plans in the United States under which eligible employees may contribute up to the maximum amount as provided by law. Employees become eligible to participate in these plans on the first dayqualified portion of the ~~month after their employment date.~~cash balance plan has been funded through contributions made to a trust fund. The ~~Company may make discretionary contributions under the plans. Employees in most of the Company's foreign subsidiaries~~plan assumptions are ~~covered by government mandated defined contribution plans.~~ evaluated annually and are updated as deemed necessary.

During the three and nine months ended August 31, ~~2017,~~2020, net periodic pension costs were $3,995 and $10,171, respectively, and the ~~Company contributed $8,062~~Company’s contribution was $239 and ~~$24,611, respectively, to defined contribution plans.~~$636, respectively. During the three and nine months ended August 31, ~~2016,~~2019, net periodic pension costs were $6,204 and $11,678, respectively, and the ~~Company contributed $8,138~~Company’s contribution was $2,225 and ~~$22,238, respectively, to defined contribution plans.~~

$5,437, respectively. The ~~Company has a deferred compensation plan for certain directors~~plans were underfunded by $135,313 and ~~officers. Distributions under the plan are subject to Section 409A of the United States Tax Code. The Company may invest balances in the plan in trading securities reported on recognized exchanges. As~~$116,675 as of August 31, ~~2017~~2020 and November 30, ~~2016, the deferred compensation liability balance was $7,604 and $7,468,~~2019, respectively.

NOTE ~~15—~~13—EQUITY:

Share repurchase program

In June ~~2017,~~2020, the Board of Directors authorized a three-year ~~$300,000~~ $400,000 share repurchase program, effective July 1, ~~2017,~~2020, pursuant to which the Company may repurchase its outstanding common stock from time to time in the open market or through privately negotiated transactions. As of August 31, ~~2017,~~2020, the Company had ~~not~~0t repurchased anyshares under ~~the~~this program.

In June ~~2014,~~2017, the Board of Directors authorized a three-year ~~$100,000~~ $300,000 share repurchase program, effective July 1, 2017, pursuant to which the Company could repurchase its outstanding common stock from time to time in the open market or through privately negotiated transactions. Through the expiration of ~~the~~this program in June ~~2017,~~2020, the Company had ~~purchased 207~~repurchased 875 shares at a total cost of ~~$15,654.~~$84,577. The share purchases were made on the open market and the shares repurchased by the Company are held in treasury for general corporate purposes.

Dividends

~~The Company paid cash dividends~~

On March 24, 2020, as a result of ~~$9,955 and $7,922 during~~ the ~~three months ended August 31, 2017 and 2016, respectively. On September 25, 2017,~~unpredictable economic environment due to the impact of the COVID-19 pandemic, the Company announced the suspension of its quarterly dividend.

NOTE 14—LEASES:

The Company leases certain of its facilities and equipment under operating lease agreements, which expire in various periods through 2034. The Company’s finance leases are not material.

The following table presents the various components of lease costs.

	Three Months Ended			Nine Months Ended
	August 31, 2020			August 31, 2020
Operating lease cost	$	61,354		$	182,374
Short-term lease cost		1,753			8,574
Variable lease cost		11,941			31,500
Sublease income		(52	)		(193	)
Total operating lease cost	$	74,996		$	222,255

The following table presents a maturity analysis of expected undiscounted cash ~~dividend of $0.30 per share payable~~flows for operating leases on ~~October 27, 2017 to stockholders of record~~ an annual basis for the next five years and thereafter as of ~~October 13, 2017. Future dividends are subject to declaration by the Board of Directors.~~

August 31, 2020:

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SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL ~~STATEMENTS---~~STATEMENTS—(continued)

For the three and nine months ended August 31, ~~2017~~2020 and ~~2016~~

2019

(currency and share amounts in thousands, except per share amounts)

(unaudited)

Fiscal Years Ending November 30,
2020 (remaining three months)	$	56,407
2021		200,153
2022		158,322
2023		111,850
2024		78,311
Thereafter		80,229
Total payments	$	685,272
Less: imputed interest*		91,428
Total present value of lease payments	$	593,844

~~(unaudited)~~

~~Changes in equity~~

~~A reconciliation of~~

*Imputed interest represents the ~~changes in equity for the nine months ended~~ ~~August 31, 2017~~difference between undiscounted cash flows and ~~2016 is presented below:~~

Nine Months Ended August 31, 2017 Nine Months Ended August 31, 2016

Attributable to
SYNNEX
Corporation

Attributable to
Noncontrolling
interest
Total Equity Attributable to SYNNEX Corporation
Attributable to
Noncontrolling
interest
Total Equity
Beginning balance: $ 1,975,776
$ 22
$ 1,975,798
$ 1,799,381
$ 516
$ 1,799,897
Issuance of common stock on exercise of options 1,053
—
1,053
4,243
—
4,243
Issuance of common stock for employee stock purchase plan 2,187
—
2,187
1,771
—
1,771
Tax benefit from employee stock plans 2,466
—
2,466
5,262
—
5,262
Taxes paid for the settlement of equity awards (3,922 ) —
(3,922 ) (3,427 ) —
(3,427 )
Share-based compensation 12,412

12,412
10,615
—
10,615
Changes in ownership of noncontrolling interest 85
(22 ) 63
(628 ) (578 ) (1,206 )
Repurchases of common stock —
—
—
(6,917 ) —
(6,917 )
Dividends declared (29,852 ) —
(29,852 ) (23,809 ) —
(23,809 )
Comprehensive income:
Net income 210,100
—
210,100
149,628
67
149,695
Other comprehensive income (loss):

Unrealized gains (losses) on available-for-sale securities, net of taxes 710
—
710
(575 ) (3 ) (578 )
Change in unrealized gain (losses) in defined benefit plans, net of taxes (58 ) —
(58 ) (455 ) —
(455 )
Unrealized gains (losses) on cash flow hedges, net of taxes 203
—
203
(4,961 ) —
(4,961 )
Foreign currency translation adjustments, net of taxes 45,711
—
45,711
(3,383 ) 36
(3,347 )
Total other comprehensive income (loss) 46,566
—
46,566
(9,374 ) 33
(9,341 )
Total comprehensive income 256,666
—
256,666
140,254
100
140,354
Ending balance: $ 2,216,871
$ —
$ 2,216,871
$ 1,926,745
$ 38
$ 1,926,783

~~Table of Contents~~

~~SYNNEX CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS---(continued)~~

~~For~~discounted cash flows.

During the three and nine months ended August 31, ~~2017~~2019, rent expense was $66,749 and ~~2016~~$197,645, respectively. Sublease income was immaterial.

The following amounts were recorded in the Company's Consolidated Balance Sheet as of August 31, 2020:

Operating leases	Balance sheet location	August 31, 2020
Operating lease ROU assets	Other assets, net	$	540,990
Current operating lease liabilities	Other accrued liabilities		178,723
Non-current operating lease liabilities	Other long-term liabilities		415,121

~~(currency~~

The following table presents supplemental cash flow information related to the Company's operating leases for the nine months ended August 31, 2020. Cash payments related to variable lease costs and ~~share amounts~~short-term leases are not included in ~~thousands, except per share amounts)~~

~~(unaudited)~~

~~NOTE 16—COMMITMENTS AND CONTINGENCIES:~~

~~The Company leases certain~~the measurement of ~~its facilities under~~ operating lease ~~agreements, which expire in various periods through 2027.~~ liabilities, and, as such, are excluded from the amounts below:

The weighted-average remaining lease term and discount rate as of August 31, 2020 were as follows:

Operating lease term and discount rate	Operating Leases
Weighted-average remaining lease term (years)		4.13
Weighted-average discount rate	7.01%

Future minimum contractually required cash payment obligations under non-cancellable lease agreements as of ~~August 31, 2017~~November 30, 2019 were as follows:

Fiscal Years Ending November 30,
2020	$	213,649
2021		174,611
2022		132,778
2023		96,084
2024		66,753
Thereafter		71,351
Total minimum lease payments	$	755,226

Fiscal Years Ending November 30,
2017 (remaining three months) $ 23,075
2018 87,070
2019 76,209
2020 62,148
2021 40,481
Thereafter 82,473
Total minimum lease payments $ 371,456

~~During~~

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SYNNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

For the three and nine months ended August 31, ~~2017, rent expense was $28,504~~2020 and ~~$85,237, respectively. During the three~~2019

(currency and ~~nine months ended August 31, 2016, rent expense was $26,395 and $76,998, respectively. Sublease income was immaterial for each of the periods presented and is immaterial for the~~share amounts ~~entitled to be received~~ in ~~future periods under non-cancellable sublease arrangements.~~

thousands, except per share amounts)

(unaudited)

NOTE 15— COMMITMENTS AND CONTINGENCIES:

The Company was contingently liable as of August 31, ~~2017~~2020 under agreements to repurchase repossessed inventory acquired by flooring companies as a result of default on floor plan financing arrangements by the Company's customers. These arrangements are described in Note 97 and do not have expiration dates. As the Company does not have access to information regarding the amount of inventory purchased from the Company, still on hand with the customer at any point in time, the Company’s repurchase obligations relating to inventory cannot be reasonably estimated. Losses, if any, would be the difference between the repossession cost and the resale value of the inventory. There have been no repurchases through August 31, ~~2017~~2020 under these agreements and the Company is not aware of any pending customer defaults or repossession obligations. The Company believes that, based on historical experience, the likelihood of a material loss pursuant to these inventory repurchase obligations is remote.

From time to time, the Company receives notices from third parties, including customers and suppliers, seeking indemnification, payment of money or other actions in connection with claims made against them. Also, from time to time, the Company has been involved in various bankruptcy preference actions where the Company was a supplier to the companies now in bankruptcy. In addition, the Company is subject to various other claims, both asserted and unasserted, that arise in the ordinary course of business. The Company evaluates these claims and records the related liabilities. It is ~~currently not involved in any material proceedings.~~

In December 2009, the Company sold China Civilink (Cayman), which operated in China as HiChina Web Solutions, to Alibaba.com Limited. In conjunction with this sale, the Company has recorded a contingent indemnification liability of $4,122.

~~Guarantees~~

~~The Company, as~~possible that the ultimate ~~parent, guaranteed~~liabilities could differ from the obligations of SYNNEX Investment Holdings Corporation up to $35,035 in connection with the sale of China Civilink (Cayman), which operated in China as HiChina Web Solutions, to Alibaba.com Limited. The guarantee expires in fiscal year 2018.

amounts recorded.

The Company does not believe that the above commitments and contingencies will have a material adverse effect on the Company's results of operations, financial position or cash flows.

NOTE 16— RISKS AND UNCERTAINTIES RELATED TO THE COVID-19 PANDEMIC:

On March 11, 2020, the World Health Organization characterized the COVID-19 outbreak as a pandemic. The COVID-19 pandemic has negatively impacted the global economy, disrupted global supply chains and work force participation and created significant volatility and disruption of financial markets. These disruptions, which were most acute during the second quarter of fiscal year 2020, have impacted the Company’s business including Concentrix’ ability to support customer demand due to decreased workforce productivity and limiting the Technology Solutions segment’s ability to support end market demand due to supply chain disruptions. As a result, many of the estimates and assumptions used in preparation of these interim financial statements required increased judgment and carry a higher degree of variability and volatility. As events continue to evolve with respect to the pandemic, the Company’s estimates may materially change in future periods.

Table of Contents

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the Consolidated Financial Statements and related Notes included elsewhere in this Report.

Amounts in certain tables may not add or compute due to rounding.

When used in this Quarterly Report on Form 10-Q, or ~~the Report,~~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 the impact of COVID-19, market trends, our business model and our services, our business and market strategy, our proposed separation of SYNNEX and Concentrix, including the timing and impact thereof, future growth, including expansion of our product and service lines, ~~our infrastructure, our investment in information technology, or IT, systems,~~ our employee hiring, ~~impact~~retention of the ownership interest of MiTAC Holdings Corporation or (“MiTAC ~~Holdings, ownership interest~~Holdings”), in us and its impact, our revenue, ~~and operating results,~~including our products revenue, sources of revenue, our gross margins, our operating costs and results, timing of payment, the value of our inventory, our competition, including with Synnex Technology International Corp., our future needs for additional financing, the likely sources for such funding and the impact of such funding, concentration of customers and suppliers, customer and supplier contract terms, customer forecasts and its impact on us, relationships with our suppliers, adequacy of our facilities, productivity, our data center and contact center operations, use of technology at contact centers, ability to manage and communicate with international resources, scalability of customer management solutions, ability to meet demand, managing inventory and our shipping costs, our operations and trends related thereto, our international operations, foreign currency exchange rates and hedging activities, the withdrawal of the UK from the EU, expansion of our operations and related effects, ~~including our Concentrix business,~~ our strategic acquisitions and divestitures of businesses and assets, ~~including the impact~~seasonality of ~~the acquisition of Tigerspike and the Westcon-Comstor Americas business on our business, and the investment~~sales, changes in ~~Datatec's Westcon EMEA (Europe, Middle East and Africa) and APAC (Asia Pacific) businesses,~~share price, adequacy of our cash resources to meet our capital needs, our debt and financing arrangements, cash held by our foreign subsidiaries and repatriation, changes in fair value of derivative instruments, our tax liabilities, adequacy of our disclosure controls and procedures, dependency on personnel, pricing pressures, ~~competition,~~ impact of economic and industry trends, changes to the markets in which we compete, impact of our accounting policies and recently issued accounting pronouncements, our estimates and assumptions, impact of inventory repurchase obligations and commitments and contingencies, our effective tax rates, ~~and plans regarding tax repatriation,~~ our share repurchase and dividend program, ~~and statements regarding~~ our securitization programs, term loans and revolving credit lines, and our investments in working capital ~~personnel, facilities~~ and ~~operations.~~personnel. 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 risks related to the impact of COVID-19 or coronavirus, or other pandemics, and the impact of related governmental, individual and business responses, including the ability of our staff to travel to work, our ability to maintain adequate inventories, delivery capabilities, the impact on our customers and supply chain, and the impact on demand in general, the proposed separation, as well as with respect to the acquisition of Tigerspike and the Westcon-Comstor Americas business, the risks associated with the transaction including the ability to successfully integrate employees and operations, diversion of management’s attention and the ability to retain key employee, as well as risks relating to our business including the seasonality ofthe buying patterns of our customers, concentration of sales to large customers, dependence upon and trends in capital spending budgets in the IT, and consumer electronics ~~or CE,~~(“CE”), industries, fluctuations in general economic and market conditions, change in the market for our customers' products, employee turnover, changes in value of foreign currencies and interest rates and other risk factors contained ~~herein~~below under Part I, Item 1A, ~~and in our Annual Report on Form 10-K for the year ended November 30, 2016.~~“Risk Factors.” These forward-looking statements speak only as of the date hereof. We ~~expressly disclaim any obligation or undertaking~~do not intend 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.~~

based, except as may be 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 “SYNNEX,” “we,” “us,” “our” or the “Company” mean SYNNEX Corporation and its subsidiaries, except where it is made clear that the term means only the parent company or one of its segments.

SYNNEX, the SYNNEX Logo, CONCENTRIX, and all other SYNNEX company, product and services names and slogans are trademarks or registered trademarks of SYNNEX Corporation. SYNNEX, the SYNNEX Logo, and CONCENTRIX Reg. U.S. Pat. & Tm. Off. Other names and marks are the property of their respective owners.

Overview

We are a Fortune ~~500~~200 corporation and a leading business process services company, providing a comprehensive range of distribution, logistics and integration services for the technology industry and providing outsourced services focused on customer ~~engagement strategy~~experience to a broad range of enterprises. We are organized to provide our products and services through two reportable business segments: Technology Solutions and Concentrix. Our Technology Solutions segment ~~distributes~~sells peripherals, ITinformation technology (“IT”) systems including data center server and storage solutions, system components, software, ~~networking/communications/~~networking, communications and security equipment, consumer electronics ~~or CE,~~(“CE”) and complementary products. ~~Within our Technology Solutions segment, we also provide systems design and integration solutions.~~ Our Concentrix segment offers a portfolio of technology-infused strategic solutions and end-to-end business services focused on customer ~~engagement strategy,~~experience, process optimization, technology innovation, front and back-office automation and business transformation to clients in ~~ten identified~~five primary industry verticals.

In our Technology Solutions segment, we distribute more than ~~30,000~~40,000 technology products (as measured by active SKUs) from more than ~~300~~400 IT, CE and ~~original equipment manufacturers, or~~ OEM, suppliers, to more than ~~20,000~~25,000 resellers, system integrators, and retailers throughout the United States, Canada, Japan, Mexico and ~~Japan.~~Central and South America. We purchase peripherals, IT systems, system components, software, ~~networking/communications/~~networking, communications and, security equipment, CE and 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. Our reseller customers include value-added resellers ~~or VARs,~~(“VARs”), corporate resellers, government resellers, system integrators, direct marketers, and national and regional retailers. 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 ~~after-market~~aftermarket product support. We also provide comprehensive IT solutions in key vertical markets such as government and healthcare, and we provide specialized service

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offerings that increase efficiencies in the areas of print management, renewals, ~~networking,~~ logistics services and supplychain management. Additionally, we provide our customers with systems design and integration solutions for data center servers and networking solutions built specific to our customers' workloads and data center environments.

Our Technology Solutions business is characterized by low gross profit as a percentage of revenue, or gross margin, and low income from operations as a percentage of revenue, or operating margin. The market for IT and CE products is generally characterized by declining unit prices and short product life cycles. 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.

In our Technology Solutions segment, we are highly dependent on the end-market demand for IT and CE 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 and CE products and software by OEMs, replacement cycles for existing IT and CE products, trends toward cloud computing, overall economic growth and general business activity. A difficult and challenging economic environment may also lead to consolidation or decline in the IT and CE industries and increased price-based competition.

In our Concentrix segment, we provide a comprehensive range of strategic services and solutions to enhance our clients' customer life cycles to acquire, support and renew customer relationships, to automate and optimize processes, to maximize the value of every customer ~~interaction~~experience and to improve business outcomes. Our portfolio of services includes end-to-end process outsourcing to customers in various industry vertical markets delivered through omni-channels that include both voice and non-voice ~~mediums~~media and in more than 4070 languages. Our portfolio of solutions and services support our clients and their customers globally.

~~From a geographic perspective, approximately 75%~~

Our Concentrix segment generates revenue from performing services that are generally tied to our clients’ products and ~~73%~~services and how they are received in the marketplace. Any shift in business or size of the market for our clients’ products, any failure of technology or failure of acceptance of our ~~total revenue~~clients’ products in the market may impact our business. The employee turnover rate in this business and the risk of losing experienced employees is high. Higher turnover rates can increase costs and decrease operating efficiencies and productivity.

We have been in business since 1980 and are headquartered in Fremont, California. We have significant operations in North and South America, Asia-Pacific, Europe and Africa. 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. As of August 31, 2020, we had over 252,000 full-time and temporary employees worldwide.

In December 2019, there was ~~from~~an outbreak of a new strain of coronavirus (“COVID-19”). In March 2020, the ~~United States~~World Health Organization characterized COVID-19 as a pandemic. The COVID-19 pandemic has negatively impacted the global economy, disrupted global supply chains and workforce participation, including our own, and created significant volatility and disruption of financial markets. The impact of the COVID-19 pandemic on our business is discussed below and at other appropriate places in the discussion of the results of our operations for the three and nine months ended August 31, ~~2017, respectively,~~2020:

‒The disruptions due to COVID-19 have impacted our business including logistics operations in our Technology Solutions segment and limited the productive ability of many of our associates in our Concentrix segment, particularly during the second quarter of fiscal year 2020. We have successfully transitioned a significant portion of our workforce in both segments to a remote working environment and implemented a number of safety and social distancing measures within our premises to protect the health and safety of associates who are required to be on-premise to support our business. As of August 31, 2020, the majority of our workforce across both segments was productive. During the three months ended August 31, 2020, we incurred net incremental costs associated with COVID-19 of approximately ~~74%~~$21 million, of which Concentrix incurred net costs of approximately $13 million and ~~73%~~Technology Solutions incurred net costs of approximately $8 million. During the nine months ended August 31, 2020, we incurred net incremental costs associated with COVID-19 of approximately $110 million, of which Concentrix incurred net costs of approximately $65 million and Technology Solutions incurred net costs of approximately $45 million. We are unable to predict how long these conditions will persist, what additional measures may be introduced by governments, vendors or customers and the effect of any such additional measures on our business. As a result, many of the estimates and assumptions involved in the preparation of the financial statements included in this report on Form 10-Q, required increased judgment and carry a higher degree of variability and volatility. As events continue to evolve with respect to the pandemic, our estimates may materially change in future periods.

‒In March 2020, we announced the suspension of share repurchases and our quarterly dividends. In June 2020, our board of directors approved a new three-year $400 million share repurchase program effective July 1st, 2020. We view this as the “first step” in the return to the capital allocation program we had in place pre-pandemic. The focus of this new repurchase program will be anti-dilutive, similar to our historical approach, albeit at a more measured pace to start given the current environment and opportunistic buying when available.

‒On January 9, 2020, we announced a plan to separate our Concentrix segment into an independent publicly-traded company. The transaction, which was delayed due to the economic impact of the COVID-19 pandemic, is now expected to be completed in the fourth quarter of calendar year 2020, subject to market conditions. The separation is intended to qualify as a tax-free transaction for federal income tax purposes. Immediately following the separation, it is expected that our stockholders will own shares of both SYNNEX and Concentrix, at the same percentage ownership that they held prior to the transaction. Completion of the separation will not require a stockholder vote but will be subject to customary closing conditions, including, among others, obtaining final approval from our Board of

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Directors, receipt of a favorable opinion with respect to the tax-free nature of the transaction for federal income tax purposes, and the effectiveness of a Form 10 registration statement with the Securities and Exchange Commission.

Critical Accounting Policies and Estimates

During the three and nine months ended August 31, ~~2016, respectively. The revenue attributable~~2020, there were no material changes to countries is based on geographical locations from where products are delivered or from where customer service contracts are managed. Approximately 42% and 41% of our net property and equipment was located in the United States as of both August 31, 2017 and November 30, 2016, respectively. As of August 31, 2017, we had approximately 111,000 full-time and temporary employees worldwide.

~~Critical Accounting Policies and Estimates~~

~~During the nine months ended August 31, 2017, we adopted certain new accounting pronouncements. For more information on all of~~ our critical accounting policies ~~please see the discussion~~and estimates previously disclosed in our Annual Report on Form 10-K for the fiscal year ended November 30, ~~2016 and~~ 2019.

See Note 2 to ~~the~~our Consolidated Financial ~~Statements.~~

Statements for impact of adoption of Accounting Standards Codification Topic 842, Leases, which revises various aspects of accounting for lease arrangements.

As of August 31, 2020, the impact of COVID-19 on our business continued to unfold. As a result, many of our estimates and assumptions carry a higher degree of variability and volatility. As events continue to evolve and additional information becomes available, our estimates may change in future periods.

Acquisitions

We continually seek to augment organic growth in both our business segments 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. In our Technology Solutions business, we seek to acquire new OEM relationships, enhance our supply chain and integration capabilities, ~~geographic coverage, and~~ the services we provide to our customers and OEM suppliers, and ~~customers.~~expand our geographic footprint. In our Concentrix segment, we seek to ~~further~~ enhance our capabilities and domain expertise in our key verticals, expand our geographic footprint and further expand into higher value service offerings. We are also strategically focused on further increasing our scale to support our customers.

~~Fiscal 2017 acquisitions~~

On July 31, 2017, we acquired Tigerspike, a digital products company specializing in strategy, experience design, development and systems integration, for a preliminary purchase price of $68.5 million in cash subject to post-closing adjustments, including $10.0 million payable by October 31, 2017. The acquisition is being integrated into our Concentrix segment and is expected to enhance Concentrix' digital and mobility competencies by providing improved business intelligence and performance for its clients through enabling technologies that are designed to create effortless, personalized end-user engagements. The preliminary purchase price allocation consisted of net tangible liabilities of $0.7 million, goodwill of $43.7 million and intangible assets of $25.4 million.

Subsequent to the fiscal quarter ended August 31, 2017, on September 1, 2017, we acquired the North America and Latin America distribution businesses, or the Westcon-Comstor Americas business, of Datatec, for a purchase price of approximately $600.0 million paid in cash, and a potential earnout amount of up to $200.0 million, payable in cash if certain gross profit targets are achieved by the Westcon-Comstor Americas business for the twelve-month period ending February 28, 2018. The acquisition is related to our Technology Solutions segment and is expected to strengthen our line card in the security, Unified Communications and Collaboration and networking markets, enhance our North American position and expand our footprint into Latin America. For its fiscal year ended February 28, 2017, the Westcon Americas business generated approximately $2.2 billion of revenue.

We also purchased 10% of Datatec’s EMEA (Europe, Middle East and Africa) and APAC (Asia Pacific) distribution businesses for $30.0 million through the purchase of 10% of the shares of each of Westcon Emerging Markets Group (Pty) Limited, a South Africa company, and Westcon Group European Holdings, Limited, a United Kingdom company. We have an option to purchase up to an additional 10% equity interest in each of the EMEA and APAC distribution businesses within the twelve months following the closing of the acquisition, for an additional cash consideration of up to $30.0 million depending on the percentage of equity interest we determine to purchase in either entity.

~~Fiscal year 2016 acquisition~~

~~During fiscal year 2016,we acquired the Minacs group of companies (“Minacs”) for a purchase price of$429.1 million paid in cash. The acquisition provides greater scale and expanded our services in key industries such as automotive, and service offerings such as marketing optimization.~~

Results of Operations

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

	Three Months Ended						Nine Months Ended
Statements of Operations Data:	August 31, 2020			August 31, 2019			August 31, 2020			August 31, 2019
Products revenue		82.08	%		81.37	%		80.28	%		79.74	%
Services revenue		17.92			18.63			19.72			20.26
Total revenue		100.00			100.00			100.00			100.00
Cost of products revenue		(77.48	)		(76.51	)		(75.49	)		(74.97	)
Cost of services revenue		(11.57	)		(11.79	)		(12.78	)		(12.79	)
Gross profit		10.95			11.70			11.73			12.25
Selling, general and administrative expenses		(7.72	)		(8.34	)		(8.78	)		(9.07	)
Operating income		3.24			3.37			2.95			3.18
Interest expense and finance charges, net		(0.44	)		(0.69	)		(0.57	)		(0.74	)
Other income (expense), net		(0.01	)		(0.02	)		0.02			0.12
Income before income taxes		2.78			2.66			2.40			2.55
Provision for income taxes		(0.70	)		(0.67	)		(0.58	)		(0.66	)
Net income		2.08	%		1.98	%		1.82	%		1.89	%

Statements of Operations Data: Three Months Ended Nine Months Ended
August 31, 2017 August 31, 2016 August 31, 2017 August 31, 2016
Products revenue 88.49 % 89.03 % 87.69 % 89.43 %
Services revenue 11.51
10.97
12.31
10.57
Total revenue 100.00
100.00
100.00
100.00
Cost of products revenue (83.94 ) (84.38 ) (82.98 ) (84.61 )
Cost of services revenue (7.29 ) (6.74 ) (7.74 ) (6.50 )
Gross profit 8.77
8.88
9.28
8.89
Selling, general and administrative expenses (5.91 ) (6.21 ) (6.30 ) (6.44 )
Operating income 2.86
2.67
2.98
2.45
Interest expense and finance charges, net (0.23 ) (0.20 ) (0.23 ) (0.21 )
Other income (expense), net 0.04
(0.01 ) 0.01
0.05
Income before income taxes 2.67
2.46
2.76
2.29
Provision for income taxes (0.91 ) (0.86 ) (0.97 ) (0.82 )
Net income 1.76
1.60
1.79
1.47
Net loss (income) attributable to noncontrolling interest 0.00
0.00
0.00
(0.00 )
Net income attributable to SYNNEX Corporation 1.76 % 1.60 % 1.79 % 1.47 %

With the announcement of a plan to separate the Concentrix segment into a separate publicly-traded company in a transaction expected to be completed in the fourth calendar quarter of 2020, subject to market conditions, our services revenue and cost of services revenue which represent revenue and cost of revenue of our Concentrix segment are expected to be discontinued following the separation. Further, selling, general and administrative expenses, interest expense and finance charges, net, other income (expense), net and provision for income-taxes are expected to decrease by amounts related to the Concentrix segment or impacted by the proposed separation, with related reductions in gross profit, operating income and net income. Additionally, our gross margin and operating margin are expected to decrease due to the discontinuance of the higher margins earned in the Concentrix segment.

Due to the ongoing impact the COVID-19 pandemic, current results and financial condition discussed herein may not be indicative of future operating results and trends.

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Certain non-GAAP financial information

In addition to disclosing financial results that are determined in accordance with ~~accounting principles generally accepted in the United States (“GAAP”),~~GAAP, we also disclose certain non-GAAP financial information, including:

•

Revenue in constant currency, which is revenue adjusted for the translation effect of foreign currencies so that certain financial results can be viewed without the impact of fluctuations in foreign currency exchange rates, thereby facilitating period-to-period comparisons of our business performance. Revenue in constant currency is calculated by translating the revenue for the three and nine months ended August 31, 2020 in the billing currency using their comparable prior period currency conversion rate. Generally, when the dollar either strengthens or weakens against other currencies, the growth at constant currency rates or adjusting for currency will be higher or lower than growth reported at actual exchange rates.

Revenue in constant currency, which is revenue adjusted for the translation effect of foreign currencies so that certain financial results can be viewed without the impact of fluctuations in foreign currency exchange rates, thereby facilitating period-to-period comparisons of our business performance. Revenue in constant currency is calculated by translating the revenue for the three and nine months ended August 31, 2017, in local currency using their comparable prior period currency conversion rate. Generally, when the dollar either strengthens or weakens against other currencies, the growth at constant currency rates or adjusting for currency will be higher or lower than growth reported at actual exchange rates.

•

Non-GAAP operating income, which is operating income adjusted to exclude acquisition-related and integration expenses, restructuring costs and amortization of intangible assets.

~~Non-GAAP operating income, which is operating income as adjusted to exclude acquisition-related and integration expenses, restructuring costs and amortization of intangible assets.~~

•

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

•

Adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) which excludes other income (expense), net and acquisition-related and integration expenses.

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

•

Non-GAAP diluted earnings per common share (“EPS”), which is diluted EPS excluding the per share, tax effected impact of (i) acquisition-related and integration expenses, (ii) amortization of intangible assets and (iii) a gain recorded in fiscal year 2019 upon the settlement of contingent consideration related to the acquisition of Westcon-Comstor Americas in fiscal year 2017.

~~Adjusted earnings before interest, taxes, depreciation and amortization, or adjusted EBITDA, which is non-GAAP operating income, as defined above, plus depreciation.~~

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. ~~However, analysis~~These non-GAAP financial measures also exclude amortization of ~~results~~intangible assets. Our acquisition activities have resulted in the recognition of intangible assets which consist primarily of customer relationships, vendor lists and technology. Definite-lived intangible assets are amortized over their estimated useful lives and are tested for impairment when events indicate that the carrying value may not be recoverable. The amortization of intangible assets is reflected in our statements of operations within each segment. Although intangible assets contribute to our revenue generation, the amortization of intangible assets does not directly relate to the sale of our products and the services performed for our clients. Additionally, intangible asset amortization expense typically fluctuates based on athe size and timing of our acquisition activity. Accordingly, we believe excluding the amortization of intangible assets, along with the other non-GAAP ~~basis should be used as a complement~~adjustments which neither relate to the ordinary course of our business nor reflect our underlying business performance, enhances our and ~~in conjunction~~our investors’ ability to compare our past financial performance with ~~data presented in accordance with GAAP. Additionally,~~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. 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.

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Non-GAAP Financial Information:

The following table provides the reconciliations of our most comparable GAAP measures to our non-GAAP measures presented:

Three Months Ended Nine Months Ended
August 31, 2017 August 31, 2016 August 31, 2017 August 31, 2016
(in thousands, except per share amounts)
Consolidated
Revenue $ 4,276,686
$ 3,669,814
$ 11,733,823
$ 10,174,935
Foreign currency translation 9,131
9,297

Revenue in constant currency $ 4,285,817
$ 3,669,814
$ 11,743,120
$ 10,174,935

Operating income $ 122,216
$ 98,022
$ 349,105
$ 248,954
Acquisition-related and integration expenses 1,026
2,358
1,637
3,928
Restructuring charges —
258
—
4,255
Amortization of intangibles 16,688
13,011
49,244
36,509
Non-GAAP operating income $ 139,930
$ 113,649
$ 399,986
$ 293,646
Depreciation 20,185
15,375
59,058
46,549
Adjusted EBITDA $ 160,115
$ 129,024
$ 459,044
$ 340,195

Operating margin 2.86 % 2.67 % 2.98 % 2.45 %
Non-GAAP operating margin 3.27 % 3.10 % 3.41 % 2.89 %

Technology Solutions
Revenue $ 3,784,678
$ 3,267,354
$ 10,289,694
$ 9,099,969
Foreign currency translation 8,827
2,305

Revenue in constant currency $ 3,793,505
$ 3,267,354
$ 10,291,999
$ 9,099,969

Operating income $ 99,968
$ 79,410
$ 282,094
$ 222,896
Acquisition-related and integration expenses 705
—
705
—
Amortization of intangibles 656
674
1,961
1,987
Non-GAAP operating income $ 101,329
$ 80,084
$ 284,760
$ 224,883
Depreciation 3,530
3,558
10,408
10,446

													Three Months Ended						Nine Months Ended
													August 31, 2020			August 31, 2019			August 31, 2020			August 31, 2019
	Three Months Ended						Nine Months Ended						(in thousands, except per share amounts)
	August 31, 2017			August 31, 2016			August 31, 2017			August 31, 2016
	(in thousands, except per share amounts)
Adjusted EBITDA	$	104,859		$	83,642		$	295,168		$	235,329

Concentrix
Consolidated
Revenue	$	495,974		$	406,715		$	1,455,817		$	1,087,332		$	6,464,782		$	6,203,659		$	17,261,619		$	17,176,000
Foreign currency translation	304						6,992							35,239						111,756
Revenue in constant currency	$	496,278		$	406,715		$	1,462,809		$	1,087,332		$	6,500,021		$	6,203,659		$	17,373,375		$	17,176,000

Operating income	$	22,248		$	18,564		$	66,989		$	25,855		$	209,136		$	208,855		$	509,515		$	545,473
Acquisition-related and integration expenses	321			2,358			932			3,928				4,163			9,200			22,701			53,582
Restructuring charges	—			258			—			4,255
Amortization of intangibles	16,032			12,337			47,283			34,522				46,828			52,428			140,320			158,149
Non-GAAP operating income	$	38,601		$	33,517		$	115,204		$	68,560		$	260,127		$	270,483		$	672,536		$	757,204
Depreciation	16,655			11,866			48,673			36,306

Operating margin														3.24	%		3.37	%		2.95	%		3.18	%
Non-GAAP operating margin														4.02	%		4.36	%		3.90	%		4.41	%

Net income													$	134,464		$	123,132		$	314,008		$	324,711
Interest expense and finance charges, net														28,749			42,945			99,046			127,695
Provision for income taxes														45,356			41,691			99,740			112,831
Depreciation (excluding accelerated depreciation included in acquisition-related and integration expenses below)														37,446			38,597			110,981			119,004
Amortization of intangibles														46,828			52,428			140,320			158,149
EBITDA													$	292,843		$	298,793		$	764,095		$	842,390
Other (income) expense, net (excluding amounts included in acquisition-related and integration expenses below)														567			1,087			(3,798	)		(19,593	)
Acquisition-related and integration expenses														4,163			9,200			23,219			53,411
Adjusted EBITDA	$	55,256		$	45,383		$	163,877		$	104,866		$	297,573		$	309,080		$	783,516		$	876,208

Diluted EPS	$	1.87		$	1.47		$	5.24		$	3.75		$	2.60		$	2.40		$	6.07		$	6.32
Acquisition-related and integration expenses	0.03			0.06			0.04			0.10				0.08			0.18			0.45			1.04
Restructuring charges	—			0.01			—			0.11
Amortization of intangibles	0.42			0.33			1.23			0.91				0.90			1.02			2.71			3.08
Contingent consideration														—			—			—			(0.37	)
Income taxes related to the above⁽¹⁾	(0.15		)	(0.14		)	(0.44		)	(0.40		)		(0.25	)		(0.30	)		(0.80	)		(1.08	)
Non-GAAP diluted EPS⁽²⁾	$	2.16		$	1.73		$	6.06		$	4.47
Non-GAAP diluted EPS													$	3.33		$	3.30		$	8.43		$	8.99

Technology Solutions
Revenue													$	5,306,361		$	5,047,970		$	13,858,313		$	13,695,729
Foreign currency translation														32,798						79,488
Revenue in constant currency													$	5,339,159		$	5,047,970		$	13,937,801		$	13,695,729

Operating income													$	132,373		$	138,830		$	320,962		$	352,594
Acquisition-related and integration expenses														—			—			—			981
Amortization of intangibles														9,995			10,999			30,130			32,968
Non-GAAP operating income													$	142,368		$	149,829		$	351,092		$	386,543

Operating margin														2.49	%		2.75	%		2.32	%		2.57	%
Non-GAAP operating margin														2.68	%		2.97	%		2.53	%		2.82	%

Net income													$	85,531		$	87,778		$	204,237		$	236,080
Interest expense and finance charges, net														19,747			17,775			59,531			55,725
Provision for income taxes														27,119			29,739			56,189			77,873
Depreciation														5,937			5,875			17,650			16,719
Amortization of intangibles														9,995			10,999			30,130			32,968
EBITDA													$	148,329		$	152,166		$	367,737		$	419,365
Other (income) expense, net														(25	)		3,538			1,004			(17,083	)
Acquisition-related and integration expenses														—			—			—			981
Adjusted EBITDA													$	148,304		$	155,704		$	368,741		$	403,263

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~~(1) The tax effect of the non-GAAP adjustments was calculated using the effective year-to-date tax rate during the respective periods presented.~~

	Three Months Ended						Nine Months Ended
	August 31, 2020			August 31, 2019			August 31, 2020			August 31, 2019
	(in thousands, except per share amounts)
Concentrix
Revenue	$	1,163,694		$	1,160,928		$	3,418,676		$	3,495,076
Foreign currency translation		2,441						32,268
Revenue in constant currency	$	1,166,135		$	1,160,928		$	3,450,944		$	3,495,076

Operating income	$	76,763		$	70,025		$	188,554		$	192,879
Acquisition-related and integration expenses		4,163			9,200			22,701			52,601
Amortization of intangibles		36,833			41,429			110,190			125,181
Non-GAAP operating income	$	117,759		$	120,654		$	321,445		$	370,661

Operating margin		6.60	%		6.03	%		5.52	%		5.52	%
Non-GAAP operating margin		10.12	%		10.39	%		9.40	%		10.61	%

Net income	$	48,933		$	35,354		$	109,771		$	88,631
Interest expense and finance charges, net		9,002			25,170			39,515			71,970
Provision for income taxes		18,236			11,952			43,551			34,958
Depreciation (excluding accelerated depreciation included in acquisition-related and integration expenses below)		31,509			32,722			93,331			102,285
Amortization of intangibles		36,833			41,429			110,190			125,181
EBITDA	$	144,513		$	146,627		$	396,358		$	423,025
Other (income) expense, net (excluding amounts included in acquisition-related and integration expenses below)		592			(2,450	)		(4,802	)		(2,510	)
Acquisition-related and integration expenses		4,163			9,200			23,219			52,430
Adjusted EBITDA	$	149,268		$	153,377		$	414,775		$	472,945

(1)

The tax effect of taxable and deductible non-GAAP adjustments was calculated using the effective year-to-date tax rate during the respective periods.

~~(2) The sum of the components of non-GAAP diluted EPS may not agree to totals, as presented, due to rounding.~~

Three and Nine Months Ended August 31, ~~2017~~2020 and ~~2016~~2019

Revenue

	Three Months Ended						Percent			Nine Months Ended						Percent
	August 31, 2020			August 31, 2019			Change			August 31, 2020			August 31, 2019			Change
	(in thousands)									(in thousands)
Revenue	$	6,464,782		$	6,203,659			4.2	%	$	17,261,619		$	17,176,000			0.5	%
Technology Solutions revenue		5,306,361			5,047,970			5.1	%		13,858,313			13,695,729			1.2	%
Concentrix revenue		1,163,694			1,160,928			0.2	%		3,418,676			3,495,076			(2.2	)%
Inter-segment elimination		(5,273	)		(5,240	)					(15,371	)		(14,805	)

~~Revenue~~

Three Months Ended Nine Months Ended
August 31, 2017 August 31, 2016 Percent Change August 31, 2017 August 31, 2016 Percent Change
(in thousands) (in thousands)
Revenue $ 4,276,686
$ 3,669,814
16.5 % $ 11,733,823
$ 10,174,935
15.3 %
Technology Solutions revenue 3,784,678
3,267,354
15.8 % 10,289,694
9,099,969
13.1 %
Concentrix revenue 495,974
406,715
21.9 % 1,455,817
1,087,332
33.9 %
Inter-segment elimination (3,966 ) (4,255 )

(11,688 ) (12,366 )

Our ~~revenues include~~revenue includes sales of products and services. In our Technology Solutions segment, we distribute a comprehensive range of products for the technology ~~industry.~~industry and design and integrate data center equipment. The prices of our products are highly dependent on the volumes purchased within a product category. The products we sell from one period to the next are often not comparable ~~because of rapid~~due to changes in product models, features and ~~features. We also design and integrate data center servers.~~customer demand requirements. The revenue generated inby our Concentrix

segment relates to business outsourcing services focused on customer experience, process optimization ~~customer engagement strategy~~ and back office automation. Inter-segment elimination represents services ~~and transactions~~ generated between our reportable segments that are eliminated on consolidation. Substantially all of the inter-segment revenue represents services provided by the Concentrix segment to the Technology Solutions segment.

Revenue in our Technology Solutions segment increased during the three and nine months ended August 31, ~~2017~~2020, compared to the prior year periods, due to a demand for technology equipment as COVID-19 related government mandated shelter-in-place restrictions during the second and third quarters of fiscal year 2020 led to increased needs for work-at-home, learn-at-home and related solutions. The increase in Technology Solutions revenue during the nine months ended August 31, 2020, compared to the prior year period was partially offset by a decline in integration-based server solutions in the first half of fiscal year 2020.

Revenue in our Concentrix segment during the three months ended August 31, 2020 increased slightly due to growth with technology, retail and e-commerce clients, partially offset by lower demand from media, communications, travel, tourism and automotive clients. Revenue for the nine months ended August 31, 2020 decreased compared to the prior period primarily due to ~~strong demand for~~the impact of COVID-19 related government mandated shelter in place restrictions in several countries in the world. These restrictions adversely impacted our ~~systems design and integration solutions and higher sales across~~revenue due to the inability of a ~~majority~~significant number of our ~~other product lines. On a constant currency basis,~~associates to work despite client demand. This impact was most acute in the second quarter of 2020.

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Our revenue for the nine months ended August 31, 2020 was also adversely impacted by lower demand from media, communications, travel, tourism and automotive clients, partially offset by an increase in ~~our Technology Solutions segment increased 16.1%~~demand from technology, financial services, retail, e-commerce and ~~13.1%, respectively,~~government clients. In addition, revenue during the three and nine months ended August 31, ~~2017.~~

~~Revenue in our Concentrix segment increased during the three and nine months ended August 31, 2017,~~2020 decreased compared to ~~the~~ prior ~~year~~ periods ~~primarily~~ due to the Minacs acquisition which became effective on August 1, 2016. On a constant currency basis, revenue in our Concentrix segment increased 22.0% and 34.5%, respectively, during the three and nine months ended August 31, 2017.

adverse translation effects of foreign currencies.

Gross Profit

	Three Months Ended						Percent			Nine Months Ended						Percent
	August 31, 2020			August 31, 2019			Change			August 31, 2020			August 31, 2019			Change
	(in thousands)									(in thousands)
Gross profit	$	708,092		$	725,990			(2.5	)%	$	2,024,249		$	2,103,379			(3.8	)%
Gross margin		10.95	%		11.70	%					11.73	%		12.25	%
Technology Solutions gross profit	$	297,480		$	301,774			(1.4	)%	$	827,201		$	819,319			1.0	%
Technology Solutions gross margin		5.61	%		5.98	%					5.97	%		5.98	%
Concentrix gross profit	$	412,533		$	426,181			(3.2	)%	$	1,202,893		$	1,290,017			(6.8	)%
Concentrix gross margin		35.45	%		36.71	%					35.19	%		36.91	%
Inter-segment elimination	$	(1,922	)	$	(1,964	)				$	(5,845	)	$	(5,957	)

Three Months Ended Nine Months Ended
August 31, 2017 August 31, 2016 Percent Change August 31, 2017 August 31, 2016 Percent Change
(in thousands) (in thousands)
Gross profit $ 374,944
$ 325,957
15.0 % $ 1,088,972
$ 904,179
20.4 %
Gross margin 8.77 % 8.88 % 9.28 % 8.89 %
Technology Solutions gross profit 194,669
170,825
14.0 % 553,500
491,451
12.6 %
Technology Solutions gross margin 5.14 % 5.23 % 5.38 % 5.40 %
Concentrix gross profit 181,977
157,168
15.8 % 541,121
418,418
29.3 %
Concentrix gross margin 36.69 % 38.64 %

37.17 % 38.48 %
Inter-segment elimination (1,702 ) (2,036 ) (5,649 ) (5,690 )

Our Technology Solutions gross margin is affected by a variety of factors, including competition, ~~average~~ selling prices, mix of products and services, ~~we sell, our customers,~~ product costs along with rebate and discount programs from our suppliers, reserves or settlement adjustments, freight costs, ~~charges for~~ inventory losses, ~~acquisitions and divestitures~~acquisition of business units and fluctuations in revenue. Concentrix margins, which are ~~generally~~ higher than those in our Technology Solutions segment, can be impacted by resource ~~locations, competitive wage, customer~~location, client mix and pricing, additional lead time for programs to be fully scalable, and transition and initial set-up costs.

~~Gross profit in our~~

Technology Solutions ~~segment~~gross profit and margin decreased during the three months ended August 31, 2020, as compared to the prior year period, primarily due to lower margins driven by the product mix from our projects and integration-based server solutions.

Technology Solutions gross profit increased, during the ~~three and~~ nine months ended August 31, ~~2017,~~2020, as compared to the prior year ~~periods as~~period, driven by strong demand for our systems design and integration and cloud services solutions continued and we maintained our pricing discipline across the majority of our product lines. Gross margin in our Technology Solutions segmenttechnology products as COVID-19 related government mandated shelter-in-place restrictions during the ~~three~~second and ~~nine months ended August 31, 2017 decreased compared~~third quarters of fiscal year 2020 led to ~~the prior year periods, primarily due to the~~a greater need for work-at-home, learn-at-home and related solutions. This increase was partially offset by lower margins driven by product mix ~~of business~~from our projects and ~~costs associated with higher level of inventories.~~

~~Gross~~integration-based server solutions.

Our Concentrix segment’s gross profit ~~in our Concentrix segment increased during both the three~~ and ~~nine months ended August 31, 2017, compared to the prior year periods, primarily due to the Minacs acquisition. Gross~~ margin ~~in the Concentrix segment~~ decreased during the three and nine ~~months~~month periods ended August 31, ~~2017,~~2020 as compared to the prior ~~year~~ periods ~~primarily~~ due to ~~the mix~~a decrease in revenue and an incremental impact of ~~customers.~~

$9 million and $55 million, respectively, related to COVID-19 related non-productive workforce costs. In addition, gross margin was temporarily impacted by decreased productivity as we transitioned our workforce to work-from-home.

Selling, General and Administrative Expenses

	Three Months Ended						Percent			Nine Months Ended						Percent
	August 31, 2020			August 31, 2019			Change			August 31, 2020			August 31, 2019			Change
	(in thousands)									(in thousands)
Selling, general and administrative expenses	$	498,956		$	517,135			(3.5	)%	$	1,514,734		$	1,557,906			(2.8	)%
Percentage of revenue		7.72	%		8.34	%					8.78	%		9.07	%
Technology Solutions selling, general and administrative expenses	$	165,107		$	162,944			1.3	%	$	506,239		$	466,725			8.5	%
Percentage of Technology Solutions revenue		3.11	%		3.23	%					3.65	%		3.41	%
Concentrix selling, general and administrative expenses	$	335,770		$	356,155			(5.7	)%	$	1,014,339		$	1,097,139			(7.5	)%
Percentage of Concentrix revenue		28.85	%		30.68	%					29.67	%		31.39	%
Inter-segment elimination	$	(1,922	)	$	(1,964	)				$	(5,845	)	$	(5,957	)

Three Months Ended Nine Months Ended
August 31, 2017 August 31, 2016 Percent Change August 31, 2017 August 31, 2016 Percent Change
(in thousands) (in thousands)
Selling, general and administrative expenses $ 252,728
$ 227,935
10.9 % $ 739,867
$ 655,225
12.9 %
Percentage of revenue 5.91 % 6.21 % 6.30 % 6.44 %
Technology Solutions selling, general and administrative expenses 94,702
91,415
3.6 % 271,407
268,555
1.1 %
Technology Solutions percentage of revenue 2.50 % 2.80 % 2.64 % 2.95 %
Concentrix selling, general and administrative expenses 159,728
138,604
15.2 % 474,132
392,563
20.8 %
Concentrix percentage of revenue 32.21 % 34.08 % 32.57 % 36.10 %
Inter-segment elimination (1,702 ) (2,084 ) (5,672 ) (5,893 )

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 non-technology related intangible assets, and marketing expenses, offset in part by reimbursements from our OEM suppliers.

During the three and nine months ended August 31, ~~2017,~~2020, selling, general and administrative expenses in our Technology Solutions segment increased in absolute dollars compared to the prior year period, primarily due to an increase in allowance for doubtful accounts and higher salaries and employee related expenses due to COVID-19, partially offset by a decrease in amortization of intangible assets and

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acquisition-related and integration expenses. Incremental costs related to COVID-19 were approximately $8 million and $45 million for the three and nine months ended August 31, 2020.

Concentrix segment selling, general and administrative expenses for the three and nine month periods ended August 31, 2020 decreased in absolute dollars and as a percentage of revenue, compared to the prior year periods, ~~primarily~~due to ~~support higher sales~~lower facility and employee costs pursuant to Convergys acquisition-related integration and facility rationalization under taken in fiscal year 2019, a decrease in the amortization of ~~our system design~~intangible assets of $4.6 million and $14.0 million for the three and nine month periods ended August 31, 2020, compared to the respective prior periods and a decrease in acquisition-related and integration ~~solutions. Selling, general~~expenses of $5.0 million and ~~administrative expenses as a percentage~~$29.2 million for these same periods. These decreases were offset by incremental COVID-19 cost of ~~revenue~~$4 million and $10 million for these same periods.

Operating Income

	Three Months Ended						Percent			Nine Months Ended						Percent
	August 31, 2020			August 31, 2019			Change			August 31, 2020			August 31, 2019			Change
	(in thousands)									(in thousands)
Operating income	$	209,136		$	208,855			0.1	%	$	509,515		$	545,473			(6.6	)%
Operating margin		3.24	%		3.37	%					2.95	%		3.18	%
Technology Solutions operating income	$	132,373		$	138,830			(4.7	)%	$	320,962		$	352,594			(9.0	)%
Technology Solutions operating margin		2.49	%		2.75	%					2.32	%		2.57	%
Concentrix operating income	$	76,763		$	70,025			9.6	%	$	188,554		$	192,879			(2.2	)%
Concentrix operating margin		6.60	%		6.03	%					5.52	%		5.52	%

Operating income and margin in our Technology Solutions segment decreased during the three and nine months ended August 31, ~~2017 decreased, compared to the prior year periods, as we scaled the growth of business and effectively managed discretionary spend.~~

The increase in selling, general and administrative expenses in our Concentrix segment during the three and nine months ended August 31, 2017, compared to the prior year periods, was primarily due to the full period impact of the Minacs acquisition. This increase was partially offset by the favorable impact of certain restructuring activities of $4.3 million in the prior year. Amortization of intangible assets increased $3.3 million and $12.3 million, respectively, during the three and nine months ended August 31, 2017, primarily due to the Minacs acquisition. We incurred 0.3 million and 0.9 million of acquisition-related and integration expenses during the three and nine months ended August 31, 2017, respectively, compared to $2.4 million and $3.9 million during the three and nine months ended August 31, 2016, respectively.

~~Operating income~~

Three Months Ended Nine Months Ended
August 31, 2017 August 31, 2016 Percent Change August 31, 2017 August 31, 2016 Percent Change
(in thousands) (in thousands)
Operating income $ 122,216
$ 98,022
24.7 % $ 349,105
$ 248,954
40.2 %
Operating margin 2.86 % 2.67 % 2.98 % 2.45 %
Technology Solutions operating income 99,968
79,410
25.9 % 282,094
222,896
26.6 %
Technology Solutions operating margin 2.64 % 2.43 % 2.74 % 2.45 %
Concentrix operating income 22,248
18,564
19.8 % 66,989
25,855
159.1 %
Concentrix operating margin 4.49 % 4.56 % 4.60 % 2.38 %
Inter-segment eliminations —
48

22
203

~~Operating income and margin in our Technology Solutions segment increased during the three and nine months ended August 31, 2017,~~2020, compared to the prior year periods, primarily due to product mix, as well as COVID-19 related incremental costs associated with allowances for doubtful accounts and higher ~~gross profit from our systems design~~salary and ~~integration and cloud services solutions, and effective scale and management of our operating expenses.~~

employee related costs.

Operating income and margin in our Concentrix segment increased during the three ~~and nine months~~month period ended August 31, ~~2017 compared to the prior year periods~~2020 primarily due to ~~higher gross profit as described earlier.~~lower acquisition-related and integration expenses and lower amortization of intangible assets partially offset by the impact of COVID-19 related revenue decreases and incremental costs. Operating ~~margin~~income decreased during ~~the three months ended August 31, 2017 compared to the prior year period, primarily due to revenue mix of ramping clients and new country openings. Operating margin increased in~~ the nine months ended August 31, ~~2017~~2020 compared to the comparable prior ~~year~~ period ~~primarily due to infrastructure~~reflecting the decrease in revenue and ~~facility investments made~~COVID-19 related incremental costs as discussed above. Operating margin was unchanged across the two periods as the decrease in ~~the prior year.~~

gross profit was offset by a reduction in selling, general and administrative expenses as a percent of revenue as discussed above.

Interest Expense and Finance Charges, Net

	Three Months Ended						Percent			Nine Months Ended						Percent
	August 31, 2020			August 31, 2019			Change			August 31, 2020			August 31, 2019			Change
	(in thousands)									(in thousands)
Interest expense and finance charges, net	$	28,749		$	42,945			(33.1	)%	$	99,046		$	127,695			(22.4	)%
Percentage of revenue		0.44	%		0.69	%					0.57	%		0.74	%

Three Months Ended Nine Months Ended
August 31, 2017 August 31, 2016 Percent Change August 31, 2017 August 31, 2016 Percent Change
(in thousands) (in thousands)
Interest expense and finance charges, net $ 9,754
$ 7,517
29.8 % $ 26,898
$ 20,245
32.9 %
Percentage of revenue 0.23 % 0.20 % 0.23 % 0.21 %

Amounts recorded in interest expense and finance charges, net, consist primarily of interest expense paid on our lines of credit and term loans, fees associated with third party accounts receivable flooring arrangements and the sale or pledge of accounts receivable through our securitization ~~facility,~~facilities, offset by income earned on our cash investments.

During the three and nine months ended August 31, ~~2017,~~2020, our interest expense and finance charges, net, ~~increased~~decreased compared to the prior year period, due to lower interest expense as a result of reduction of approximately $700 million in our average borrowings during fiscal year 2020, as compared to the prior year periods, ~~primarily due to higher interest expense~~as well as a ~~result of additional borrowings to fund the Minacs and Tigerspike acquisitions and support growth in our Technology Solutions segment, and the impact of step-up~~lower interest rate ~~swaps related~~environment. Approximately 56% of our outstanding borrowings at August 31, 2020 have been economically converted to ~~our term loan in the United States. In connection with our term loan in the United States, we entered into step-up~~fixed-rate debt through interest rate swaps, which effectively converted a portion of the floating rate term loan to a fixed interest rate, which is higher than the prevailing floating rate. The fixed rate on the swaps steps up to a higher rate in June each year.

swaps.

Other Income (Expense), Net

	Three Months Ended						Percent			Nine Months Ended						Percent
	August 31, 2020			August 31, 2019			Change			August 31, 2020			August 31, 2019			Change
	(in thousands)									(in thousands)
Other income (expense), net	$	(567	)	$	(1,087	)		47.8	%	$	3,280		$	19,764			83.4	%
Percentage of revenue		(0.01	)%		(0.02	)%					0.02	%		0.12	%

Three Months Ended Nine Months Ended
August 31, 2017 August 31, 2016 Percent Change August 31, 2017 August 31, 2016 Percent Change
(in thousands) (in thousands)
Other income (expense), net $ 1,854
$ (378 ) 590.5 % $ 1,325
$ 4,605
(71.2 )%
Percentage of revenue 0.04 % (0.01 )% 0.01 % 0.05 %

Amounts recorded as other income (expense), net include foreign currency transaction gains and losses, investment gains and losses, non-service component of pension costs, and other non-operating gains and ~~losses.~~

~~The increase in other~~losses, such as settlements received from class actions lawsuits.

Other income (expense), net, which was a net expense during the three months ended August 31, ~~2017 compared to~~2020, was consistent with the prior year ~~period was primarily due to foreign currency exchange losses in the prior year~~ period.

~~The decrease in other~~

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Other income (expense), net, which was a net income during the nine months ended August 31, ~~2017~~2020, decreased compared to the prior year period, ~~was~~ primarily due to ~~lower benefit~~a $19.0 million gain recorded in fiscal year 2019 upon the settlement of ~~$3.9 million received from class-action legal settlements~~contingent consideration related to our acquisition of Westcon-Comstor Americas in ~~our Technology Solutions segment,~~fiscal year 2017. This decrease was partially offset by ~~lower foreign currency exchange losses~~a $3.5 million gain recorded in fiscal year 2020, upon reversal of ~~$1.8 million.~~

certain tax indemnification provisions set up at the time of disposition of a subsidiary in a prior year.

Provision for Income Taxes

	Three Months Ended						Percent			Nine Months Ended						Percent
	August 31, 2020			August 31, 2019			Change			August 31, 2020			August 31, 2019			Change
	(in thousands)									(in thousands)
Provision for income taxes	$	45,356		$	41,691			8.8	%	$	99,740		$	112,831			(11.6	)%
Percentage of income before income taxes		25.22	%		25.29	%					24.11	%		25.79	%

Income taxes consist of our current and deferred tax expense resulting from our income earned in domestic and foreign jurisdictions.

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

During the three months ended August 31, 2020, our income tax expense increased due to an increase in our income before income taxes. The effective tax rate ~~for~~was consistent with the ~~three and~~prior year period.

During the nine months ended August 31, ~~2017 was 34.2% and 35.1%, respectively,~~2020, our income tax expense decreased compared to ~~34.9% and 35.8%, respectively, for~~ the ~~three and nine months ended August 31, 2016.~~prior year period primarily due to a decrease in our income before income taxes as a result of the economic impact of COVID-19 during the first half of fiscal year 2020, as well as a lower effective tax rate. The effective tax rate for the ~~three and~~ nine months ended August 31, ~~2017 decreased relative~~2020, was lower compared to the prior year ~~periods~~period, due to the ~~mix~~benefit from exercising of ~~income in different tax jurisdictions, the~~employee stock options and reversal of ~~certain~~uncertain tax ~~reserves as a result of~~positions. The comparative decrease in the ~~expiration of the statute of limitation in certain~~effective tax ~~jurisdictions, and the settlement of an appeal resulting in a favorable impact during~~rate for the nine months ended August 31, ~~2017.~~

2020 was partially offset by the favorable impact of a nontaxable contingent consideration gain recorded in the prior year period related to the fiscal year 2017 Westcon-Comstor Americas acquisition.

Liquidity and Capital Resources

Cash Conversion Cycle

		Three Months Ended
		August 31, 2020		November 30, 2019		August 31, 2019
		(Amounts in thousands)
Days sales outstanding ("DSO")
Revenue (products and services)	(a)	$	6,464,782	$	6,581,293	$	6,203,659
Accounts receivable	(b)		3,580,970		3,926,709		3,452,976
Days sales outstanding	(c) = (b)/((a)/the number of days during the period)		51		54		51

Days inventory outstanding ("DIO")
Cost of revenue (products and services)	(d)	$	5,756,690	$	5,786,754	$	5,477,669
Inventories	(e)		2,832,607		2,547,224		2,787,159
Days inventory outstanding	(f) = (e)/((d)/the number of days during the period)		45		40		47

Days payable outstanding ("DPO")
Cost of revenue (products and services)	(g)	$	5,756,690	$	5,786,754	$	5,477,669
Accounts payable	(h)		3,655,215		3,149,443		2,932,046
Days payable outstanding	(i) = (h)/((g)/the number of days during the period)		58		50		49

Cash conversion cycle ("CCC")	(j) = (c)+(f)-(i)		38		44		49

Three Months Ended
August 31, 2017 August 31, 2016
(in thousands)
Days sales outstanding
Revenue (products and services) (a) $ 4,276,686
$ 3,669,814
Accounts receivable, including receivable from related parties (b) 1,861,481
1,651,173
Days sales outstanding (b)/((a)/the number of days during the period) 40
41

Days inventory outstanding
Cost of revenue (products and services) (c) $ 3,901,742
$ 3,343,857
Inventories (d) 2,242,083
1,568,697
Days inventory outstanding (d)/((c)/the number of days during the period) 53
43

Days payable outstanding
Cost of revenue (products and services) (c) $ 3,901,742
$ 3,343,857
Accounts payable, including payable to related parties (e) 1,804,110
1,531,664
Days payable outstanding (e)/((c)/the number of days during the period) 43
42

Cash conversion cycle 50
42

Cash Flows

Our Technology Solutions business is working capital intensive. Our working capital needs are primarily to finance accounts receivable and inventory. We rely heavily on term loans, accounts receivable arrangements, our securitization programs, and our revolver programs for

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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 volume decreases, our net investment in working capital dollars typically decreases, which generally results in increases in cash flows generated from operating activities. Concentrix working capital is primarily comprised of accounts receivable. Our cash conversion cycle was 5038 days and 4249 days as of August 31, ~~2017~~2020 and ~~August 31, 2016,~~2019, respectively. We calculate cash conversion cycle as days of the last fiscal quarter’s sales outstanding in accounts receivable plus days of supply on hand in inventory, less days of the last fiscal quarter’s purchases outstanding in accounts payable. The ~~increase, compared to the prior year period,~~decrease was primarily ~~a result of higher inventories~~due to ~~support growth~~faster turnover of our ~~systems design~~inventories and ~~integration solutions line~~the timing of ~~business. These inventories typically have longer cash conversion cycles.~~

payments of accounts payables.

To increase our market share and better serve our customers, we may further expand our operations through investments or acquisitions. We expect that such expansion 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 ~~used in~~provided by operating activities was ~~$80.2 million~~$1.547 billion during the nine months ended August 31, ~~2017,~~2020, primarily due to ~~an increase in inventories of $484.7 million and an increase in accounts receivable of $76.9 million. This cash outflow was~~

~~partially offset by~~ net income of ~~$210.1~~$314.0 million, adjustments for non-cash items of ~~$122.9~~$320.9 million, decreases in accounts receivable of $280.5 million and receivables from vendors of $44.7 million, an increase in accounts payable of ~~$76.5~~$454.3 million and a net change of $415.4 million in other operating assets and liabilities. These cash inflows were partially offset by an increase in inventories of $282.7 million. The decrease in accounts receivable and vendor receivables is primarily due to lower revenue in both segments during the three months ended August 31, 2020 compared to a seasonally high fourth quarter of fiscal year 2019 as well as an improvement in our collections. Notwithstanding the current economic uncertainties due to the impact of COVID-19, DSO in our Technology Solutions segment also decreased by approximately 3 days from the end of fiscal year 2019. The increase in accounts payable and cash inflow from changes in other operating assets and liabilities ~~of $71.8 million.~~reflects primarily efficient working capital management and prepayments from customers received in our Technology Solutions segment. The ~~increases~~increase in inventories ~~accounts receivable and accounts payable~~was driven by purchases related to larger projects in the second fiscal quarter which were ~~primarily due to strong demand for our systems design and integration solutions.~~transacted in the third fiscal quarter, with further shipments expected in subsequent quarters. The adjustments for non-cash items consist primarily of amortization and depreciation, provision for doubtful accounts, share-based compensation expense, unrealized foreign exchange losses and ~~stock-based compensation expense.~~

a deferred tax benefit.

Net cash provided by operating activities was ~~$273.6~~$202.5 million during the nine months ended August 31, ~~2016,~~2019, primarily due to net income of ~~$149.7~~$324.7 million, adjustments for non-cash items of ~~$74.5~~$295.1 million, and a decrease in accounts receivable of ~~$224.8 million and an increase in accounts payable of $70.4~~$148.1 million. These cash inflows were partially offset by an increase in inventories of ~~$224.8~~$390.0 million, a decrease in accounts payable of $119.6 million, and a net change in other operating assets and liabilities of $69.1 million. The decrease in accounts receivable and accounts payable was primarily due to timing of collections and payments, respectively. Accounts receivable was also lower ~~days~~due to lower days’ sales outstanding ~~in our Technology Solutions segment as of August 31, 2016~~ compared to ~~November 30, 2015, while~~ the fourth quarter of fiscal year 2018. The increase in ~~accounts payable and~~ inventories ~~over the same period~~ was primarily due to ~~increased~~strong demand for our systems design and integration ~~solutions.~~solutions business, where we carry higher levels of inventories, and higher anticipated seasonal demand in the fourth quarter. The adjustments for non-cash items consist primarily of amortization and depreciation, ~~and~~provision for doubtful accounts, stock-based compensation ~~expense.~~

expense, a $19.0 million gain recorded upon the settlement of contingent consideration related to our Westcon-Comstor Americas acquisition in fiscal year 2017, and deferred tax benefit.

Net cash used in investing activities during the nine months ended August 31, ~~2017~~2020 was ~~$124.2~~$137.5 million, primarily due to capital expenditures of ~~$72.1~~$127.3 million ~~substantially~~ related to infrastructure investments to support growth in both of our ~~Concentrix segment~~business segments and ~~a payment~~$4.9 million of ~~$57.8 million to acquire Tigerspike. This~~ cash ~~outflow was partially offset by a refund of excess consideration received~~paid related to the ~~Minacs~~settlement of employee stock-based awards assumed under the Convergys acquisition, ~~as a result of post-closing adjustments.~~

being paid in accordance with the original vesting schedule.

Net cash used in investing activities during the nine months ended August 31, ~~2016~~2019 was ~~$495.7~~$102.3 million, primarily due to ~~a payment of $404.5 million to acquire Minacs and~~ capital expenditures of ~~$95.2~~$93.4 million ~~substantially~~ related to infrastructure investments to support growth in both of our ~~Concentrix segment.~~

business segments and $8.6 million of cash paid related to the settlement of employee stock-based awards assumed under the Convergys acquisition.

Net cash ~~provided by~~used in financing activities during the nine months ended August 31, ~~2017~~2020 was ~~$55.1~~$187.8 million, ~~consisting~~representing primarily a pay down of ~~$82.2~~our revolving lines of credit with cash generated from operations and scheduled quarterly repayments of our term loans aggregating $168.4 million. In addition, we paid dividends of $20.8 million in January 2020, prior to suspension of ~~net proceeds from~~ our ~~borrowing arrangements~~dividends program due to ~~fund our working capital requirements and~~ the ~~acquisition of Tigerspike. This cash inflow was partially offset by $29.9 million of dividend payments.~~

COVID-19 related economic uncertainties in March 2020.

Net cash ~~provided by~~used in financing activities during the nine months ended August 31, ~~2016~~2019 was ~~$23.0~~$298.4 million ~~consisting~~ primarily ~~of $50.7 million~~due to net ~~proceeds from~~repayments under our borrowing arrangements ~~partially offset by $23.8~~of $214.1 million. Cash generated from operations was used to pay down revolving lines of credit. During the nine months ended August 31, 2019, the Company drew the last tranche of $250.0 million under a term loan facility obtained in fiscal year 2018 for the Convergys acquisition for the settlement of the remaining amount of convertible debentures assumed as part of the acquisition and the remainder was used for working capital. The Company also returned cash to stockholders in the form of $57.5 million of dividend ~~payments.~~

payments and $15.2 million of repurchases of our common stock, and $14.0 million of cash was used to pay the contingent consideration related to our Westcon-Comstor Americas acquisition.

Capital Resources

Our cash and cash equivalents totaled ~~$243.3 million~~$1.452 billion and ~~$380.7~~$225.5 million as of August 31, ~~2017~~2020 and November 30, ~~2016,~~2019, respectively. Of our total cash and cash equivalents, the cash held by our foreign subsidiaries was ~~$191.4~~$397.5 millionand ~~$200.0~~$219.7 millionas of August 31, ~~2017~~2020 and November 30, ~~2016,~~2019, respectively.~~Repatriation of the~~ Our cash and cash equivalents held by ~~our~~ foreign subsidiaries ~~would be~~are no longer subject to U.S. federal tax on repatriation into the United ~~States federal income taxes. Also, repatriation~~States. Repatriation of some foreign balances is restricted by local laws. ~~However,~~Historically, we have ~~historically~~ fully utilized and reinvested all foreign cash to fund our foreign operations and expansion. If in the future our intentions change, and we repatriate the cash back to the United States, we will report in our ~~consolidated financial statements~~Consolidated Financial Statements the impact of ~~the applicable~~state and withholding taxes depending upon the

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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, ~~the~~ cash flows ~~expected to be generated~~ from operations and our existing sources of liquidity 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.

Historically, we have renewed our accounts receivable securitization ~~program~~programs and our ~~U.S.~~ credit facility ~~agreement~~agreements described below 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.

On-Balance Sheet Arrangements

In the United States, we have an accounts receivable securitization program ~~or the U.S. AR Arrangement,~~ to provide additional capital for our ~~operations. The~~operations (the “U.S. AR Arrangement”). Prior to the amendment in May 2020 described in this paragraph, under the terms of the U.S. AR Arrangement, ~~expires on November 1, 2019. One~~which had a maturity date of May 2020, our ~~subsidiaries,~~subsidiary, which is the borrower under ~~the U.S. AR Arrangement, can~~this facility, could borrow up to a maximum of ~~$600.0~~ $850.0million based upon eligible trade accounts ~~receivable denominated in United States dollars. The U.S. AR Arrangement includes an accordion feature to allow requests for an increase in the lenders' commitment by an additional $120.0 million.~~receivable. The effective borrowing cost under the U.S. AR Arrangement is a blended rate based upon the composition of the lenders that ~~includes~~included prevailing dealer commercial paper rates and a rate based upon LIBOR. In addition, prior to the ~~daily London Interbank Offered Rate, or LIBOR, plus~~May 2020 amendment, a program fee of 0.75% per annum based on the used portion of the commitment, and a facility fee of 0.35% per annum was payable on the adjusted commitment of the lenders. ~~As of August 31, 2017 and November 30, 2016, $353.0 million and $262.9 million, respectively, were outstanding under~~In May 2020, the U.S. AR ~~Arrangement.~~

Arrangement was amended to revise the maximum borrowing amount to $650,000 and to extend the maturity date of the U.S. AR Arrangement to May 2022. The program fee payable on the used portion of the lenders’ commitment, was modified to accrue at 1.25% per annum in the case of lender groups who fund their advances based on prevailing commercial paper rates, and 1.30% per annum in the case of lender groups who fund their advances based on LIBOR (subject to a 0.50% per annum floor). The amendment also modified the facility fee payable on the adjusted commitment of the lenders, to accrue at different tiers ranging between 0.35% per annum and 0.45% per annum depending on the amount of outstanding advances from time to time. In addition, the U.S. AR Arrangement includes an accordion feature to allow requests for an increase in the lenders' commitment by an additional $150.0 million.

Under the terms of the U.S. AR Arrangement, we and ~~one~~two of our ~~United States~~U.S. subsidiaries sell, on a revolving basis, our receivables ~~(other than certain specifically excluded receivables)~~ to a wholly-owned, bankruptcy-remote subsidiary. The borrowings are funded by pledging all of the rights, title and interest in ~~and to~~ the receivables acquired by our bankruptcy-remote subsidiary as security. Any ~~borrowings~~amounts received under the U.S. AR Arrangement are recorded as debt on our Consolidated Balance Sheets.

As of August 31, 2020, there were no borrowings outstanding under this facility. As of November 30, 2019, $108.0 million was outstanding under the U.S. AR Arrangement.

In ~~May 2017, SYNNEX~~ Canada, ~~Limited, or SYNNEX Canada, entered into~~we have an accounts receivable securitization program with a bank to provide additional capital for operations. Under the terms of this program, as renewed in March 2020, SYNNEX Canada Limited (“SYNNEX Canada”) can borrow up to CAD100.0 million, or $76.6 million, in exchange for the transfer of eligible trade accounts receivable, on an ongoing revolving basis ~~up to CAD65.0 million, or $52.1 million,~~ through May ~~10, 2020.~~2023. The program includes an accordion feature that allows us to ~~allow a~~ request toan increase in the ~~lender's~~bank's commitment by an additional ~~CAD25.0~~CAD50.0 million, or ~~$20.0~~$38.3 million. Any ~~borrowings~~amounts received under this arrangement are recorded as debt on our Consolidated Balance ~~Sheets.~~Sheets and are secured by pledging all of the rights, title and interest in the receivables to the bank. We guarantee the performance obligations of SYNNEX Canada under this arrangement. The effective borrowing cost is based on the ~~weighted average~~weighted-average of the Canadian Dollar Offered Rate plus a margin of ~~2.00%~~1.00% per annum and the prevailing lender commercial paper rates. In addition, prior to an event of termination, SYNNEX Canada is obligated to pay a program fee of 0.75% per annum based on the used portion of the commitment. ~~We will pay~~After an event of termination, the program fee shall be the sum of the base rate and 2.50% per annum, based on the used portion of the commitment. SYNNEX Canada pays a fee of 0.40% per annum for any unused portion of the commitment ~~below CAD25.0~~up to CAD60.0 million, or $46.0 million, and ~~an additional 0.55% per annum if~~when the unused portion exceeds ~~CAD25.0 million.~~CAD60.0 million, or $46.0 million, a fee of 0.55% per annum on the remaining unused commitment. As of both August 31, ~~2017, borrowings~~2020 and November 30, 2019, there was no outstanding balance under this ~~arrangement were $24.0 million.~~

~~As of August 31, 2017, our senior secured~~arrangement.

SYNNEX Japan has a credit agreement with a group of banks for a maximum commitment of JPY15.0 billion or ~~the U.S. Credit Agreement, was~~$141.6 million. The credit agreement is comprised of a ~~$275.0~~JPY7.0 billion, or $66.1 million, term loan and a JPY8.0 billion, or $75.5 million, revolving credit facility and expires in November 2021. The interest rate for the term loan and revolving credit facility is based on the Tokyo Interbank Offered Rate, plus a ~~$625.0~~margin, which is based on our consolidated leverage ratio, and currently equals 0.70% per annum. The unused line fee on the revolving credit facility is currently 0.10% per annum based on our consolidated current leverage ratio. The term loan can be repaid at any time prior to the expiration date without penalty. We have guaranteed the obligations of SYNNEX Japan under this facility. As of August 31, 2020 and November 30, 2019, the balances outstanding under the term loan component of these facilities were $66.1 million and $63.9 million, respectively. As of August 31, 2020 and November 30, 2019, $72.7 million and $5.9 million, respectively, was outstanding under the revolving credit facility.

Indian subsidiaries of our Concentrix segment have credit facilities with a financial institution to borrow up to an aggregate amount of $22.0 million. The interest rate under these facilities is the higher of the bank's minimum lending rate or LIBOR, plus a margin of 0.9% per annum. We guarantee the obligations under these credit facilities. These credit facilities can be terminated at any time by our Indian subsidiaries or the financial institution. There were no borrowings outstanding under these credit facilities as of either August 31, 2020 or November 30, 2019.

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In the United States, we have a senior secured credit agreement (as amended, the "U.S. Credit Agreement") with a group of financial institutions. The U.S. Credit Agreement includes a $600.0 million commitment for a revolving credit facility and a term ~~loan.~~loan in the original principal amount of $1.2 billion. We ~~could~~can request incremental commitments to increase the principal amount of the revolving line of credit or term loan ~~available~~by $500.0 million, plus an additional amount which is dependent upon our pro forma first lien leverage ratio, as calculated under the U.S. Credit Agreement. The U.S. Credit Agreement upmatures in September 2022. The outstanding principal amount of the term loan is repayable in quarterly installments of $15.0 million, with the unpaid balance due in full on the September 2022 maturity date. The term loan can be repaid at any time prior to ~~$350.0 million.~~the maturity date without penalty. Interest on borrowings under the U.S. Credit Agreement can be based on LIBOR or a base rate at our ~~option. Through August 31, 2017, loans borrowed under the U.S. Credit Agreement had interest, in the case of~~option, plus a margin. The margin for LIBOR loans ~~at a per annum rate equal~~ranges from 1.25% to 2.00% and the ~~applicable LIBOR, plus a~~ margin which could range from 1.50% to 2.25%, based on our consolidated leverage ratios, as determined in accordance with the U.S. Credit Agreement. Loans borrowed under the U.S. Credit Agreement that were not LIBOR loans, but were insteadfor base rate loans ~~had interest at~~ranges from 0.25% to 1.00%, provided that LIBOR shall not be less than zero. The base rate is a ~~per annum~~variable rate ~~equal to (i)~~which is the ~~greatest~~highest of ~~(A)~~(a) the Federal Funds Rate, plus a margin of ~~1/2 of 1.0%~~0.50%, ~~(B) LIBOR plus 1.0% per annum, and (C)~~(b) the rate of interest announced, from time to time, by the agent, Bank of America, ~~N.A,~~N.A., as its “prime rate,” and (c) the Eurodollar Rate, plus ~~(ii) a margin which could range~~1.00%. The unused revolving credit facility commitment fee ranges from ~~0.50%~~0.175% to ~~1.25%,~~0.30% per annum. The margins above the applicable interest rates and the revolving commitment fee for revolving loans are based on our consolidated leverage ~~ratios~~ratio, as ~~determined in accordance with~~calculated under the U.S. Credit Agreement. ~~The unused revolving credit facility was subject to a commitment fee ranging from 0.20% to 0.35% per annum, based on our consolidated leverage ratios.~~ Our obligations under the U.S. Credit Agreement are secured by substantially all of the parent company’s and its United States domestic subsidiaries’ assets on a pari passu basis with the interests of the lenders under the U.S. Term Loan Credit Agreement (defined below) pursuant to an intercreditor agreement and are guaranteed by certain of our United States domestic subsidiaries.

As of August 31, ~~2017~~2020 and November 30, ~~2016, balances~~2019, the balance outstanding under the term loan component of the U.S. Credit Agreement ~~were $558.6 million~~was $1.0 billion and ~~$585.9 million,~~$1.1 billion, respectively. There were no borrowings outstanding under the revolving line of credit ~~facility~~under the U.S. Credit Agreement as of ~~either~~ August 31, ~~2017 or~~2020. As of November 30, ~~2016.~~

~~Subsequent to~~ 2019, the ~~fiscal quarter ended August 31, 2017, on September 1, 2017,~~balance outstanding under the revolving line of credit component of the U.S. Credit Agreement was ~~amended to increase the revolving credit facility commitment to $600.0 million and the~~$25.8 million.

We have a secured term loan ~~to $1.2 billion. The incremental commitment amount to increase~~credit agreement (the “U.S. Term Loan Credit Agreement”) with a group of financial institutions, in the original principal amount of ~~the revolving line of credit or term loan was increased to $400.0 million.~~$1.8 billion. The U.S. Term Loan Credit Agreement ~~was extended to mature~~matures in ~~September 2022. The~~October 2023.The outstanding principal amount of the term ~~loan~~loans is ~~repayable~~payable in quarterly installments of ~~$15.0~~$22.5 million, ~~commencing on February 28, 2018,~~ with the unpaid balance due in full on the ~~September 2022~~ maturity date. Interest on the borrowings under the U.S. Credit Agreement was amended to change the margin for LIBOR loans to range from 1.25% to 2.00% and for base rate loans to range from 0.25% to 1.00%, provided that

~~LIBOR shall not be less than zero. In addition, the commitment fee was modified to range from 0.175% to 0.30% per annum. The entire term loan of $1.2 billion was fully drawn in September 2017.~~

SYNNEX Infotec has a credit agreement with a group of financial institutions for a maximum commitment of JPY14.0 billion, or $127.3 million. The credit agreement is comprised of a JPY6.0 billion, or $54.6 million, term loan and a JPY8.0 billion, or $72.7 million, short-term revolving credit facility. The interest rate for the term loan and revolving credit facility is based on the Tokyo Interbank Offered Rate plus a margin of 0.70% per annum. The unused line fee on the revolving credit facility is 0.10% per annum. This credit facility expires in November 2018. As of August 31, 2017 and November 30, 2016, the balances outstanding under the term loan component of the facility were $54.6 million and $52.4 million, respectively. Balances outstanding under the revolving credit facility were $40.9 million and $28.8 million, respectively, as of August 31, 2017 and November 30, 2016. The term loan can be repaid at any time prior to the ~~expiration~~maturity date without penalty. ~~We have~~Interest on borrowings under the U.S. Term Loan Credit Agreement can be based on LIBOR or a base rate at our option, plus a margin. The margin for LIBOR loans ranges from 1.25% to 1.75% and the margin for base rate loan ranges from 0.25% to 0.75%, provided that LIBOR shall not be less than zero. The base rate is a variable rate which is the highest of (a) 0.5% plus the greater of (x) the Federal Funds Rate in effect on such day and (y) the overnight bank funding rate in effect on such day, (b) the Eurodollar Rate plus 1.0% per annum, and (c) the rate of interest last quoted by The Wall Street Journal as the “Prime Rate” in the U.S. During the period in which the term loans were available to be drawn, we paid term loan commitment fees. The margins above our applicable interest rates are, and the term loan commitment fee were, based on our consolidated leverage ratio as calculated under the U.S. Term Loan Credit Agreement. Our obligations under the U.S. Term Loan Credit Agreement are secured by substantially all of the parent company and certain of its domestic subsidiaries’ assets on a pari passu basis with the interests of the lenders under the existing U.S. Credit Agreement pursuant to an intercreditor agreement, and are guaranteed by certain of our domestic subsidiaries. As of both August 31, 2020 and November 30, 2019, the ~~obligations of SYNNEX Infotec~~balance outstanding under ~~this facility.~~

~~In May 2017,~~ the U.S. Term Loan Credit Agreement was $1.7 billion.

SYNNEX Canada ~~entered into~~has an uncommitted revolving line of credit with a bank under which it can borrow up to ~~CAD35.0~~CAD50.0 million, or ~~$28.0~~$38.3 million. Borrowings under the facility are secured by eligible inventory and bear interest at a base rate plus a margin ranging from 0.50% to 2.25% depending on the base rate used. The base rate could be a Banker's Acceptance Rate, a Canadian Prime Rate, LIBOR or USU.S. Base Rate. As of both August 31, ~~2017,~~2020 and November 30, 2019, there were no borrowings outstanding under ~~the~~this credit facility.

~~Our Indian subsidiaries have credit facilities with a financial institution to borrow up to an aggregate amount~~

Table of $22.0 million. The interest rate under the credit facilities is the higher of the bank's minimum lending rate or LIBOR plus a margin of 0.9% per annum. The credit facilities can be terminated at any time by our Indian subsidiaries or the financial institution. We guarantee the obligations under these credit facilities. As of both August 31, 2017Contents

Other borrowings and ~~November 30, 2016, borrowings outstanding under these credit facilities were $12.0 million.~~

As of August 31, 2017 and November 30, 2016, we recorded $8.7 million and $8.7 million, respectively, on our Consolidated Balance Sheets in obligations attributable to SYNNEX Infotec for the sale and financing of this subsidiary's approved accounts receivable and notes receivable with recourse provisions.

~~We also maintain other local currency denominated~~term debt include lines of credit with financial institutions at certain locations outside the United States, ~~aggregating $21.9~~factoring of accounts receivable with recourse provisions, capital leases, a building mortgage and book overdrafts. As of August 31, 2020, commitments for these revolving credit facilities aggregated $83.3 million. Interest rates and other terms of borrowing under these lines of credit vary ~~from country to~~by country, depending on local market conditions. Borrowings under these facilities are generally guaranteed by us or secured by eligible accounts receivable. As of August 31, ~~2017~~2020 and November 30, ~~2016, borrowings~~2019, the balances outstanding under these revolving credit facilities were ~~$31,000~~$19.2million and ~~$8.8~~$6.0 million, respectively.

The maximum commitment amounts for local currency credit facilities have been translated into United States Dollars at August 31, ~~2017~~2020 exchange rates.

Off-Balance Sheet Arrangements

We have financing programs in the United States and Japan under which trade accounts receivable of certain customers may be sold to 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. At August 31, ~~2017~~2020 and November 30, ~~2016,~~2019, we had a total of ~~$11.2~~$23.7 million and ~~$12.6~~$35.3 million, respectively, of trade accounts receivable sold to and held by the financial institutions under these programs.

Covenant Compliance

Our credit facilities have a number of covenants and restrictions that, among other things, require us to maintain specified financial ratios and satisfy certain financial condition tests. They also limit our ability to incur additional debt, make intercompany loans, pay dividends and make other types of distributions, make certain acquisitions, repurchase our stock, create liens, cancel debt owed to us, enter into agreements with affiliates, modify the nature of our business, enter into sale-leaseback transactions, make certain investments, enter into new real estate leases, transfer and sell assets, cancel or terminate any material contracts and merge or consolidate. As of August 31, ~~2017,~~2020, we were in compliance with all material covenants for the above ~~arrangements.~~

arrangements, and we do not believe we are at material risk of not meeting such covenants.

Contractual Obligations

Our contractual obligations consist of future payments due under our loans, ~~capital leases and~~payments for our operating lease ~~arrangements.~~commitments and repatriation tax under the TCJA which are already recorded on our Consolidated Balance Sheet. In addition, our contractual obligations include interest on our debt. As of August 31, ~~2017,~~2020, there have been no material changes from our disclosure in our Annual Report on Form 10-K for the fiscal year ended November 30, ~~2016.~~2019. For more information on our future minimum rental obligations under ~~noncancellable~~non-cancellable lease agreements as of August 31, ~~2017,~~2020, see Note 1614 to the Consolidated Financial ~~Statements.~~

~~As discussed in Note 10 to the Consolidated Financial~~ Statements on September 1, 2017, we entered into an amendment to our U.S. Credit Agreement by increasing the amount of the revolving line of credit commitment to $600 million and increasing the amount of the term loan to $1.2 billion. In addition, the maturity date for revolving line of credit and the existing term loan was extended to September 1, 2022. The outstanding principal amount of the term loan is repayable in quarterly installments of $15.0 million, commencing on February 28, 2018, with the unpaid balance due in full on the September 2022 maturity date.

Guarantees

We, as the ultimate parent, guaranteed the obligations of SYNNEX Investment Holdings Corporation up to $35.0 million in connection with the sale of China Civilink (Cayman), which operated in China as HiChina Web Solutions, to Alibaba.com Limited. The guarantee expires in fiscal year 2018.

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 repurchases through August 31, ~~2017~~2020 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. As of August 31, 2020 and November 30, 2019, accounts receivable subject to flooring arrangements was $58.6 million and $69.6 million, respectively. For more information on our third-party revolving short-term financing arrangements, see Note 97 to the Consolidated Financial Statements.

Related Party Transactions

We have a business relationship with MiTAC Holdings, a publicly-traded company in Taiwan, which began in 1992 when MiTAC Holdings became our primary investor through its affiliates. As of both August 31, ~~2017~~2020 and November 30, ~~2016,~~2019, MiTAC Holdings and its affiliates beneficially owned approximately ~~24%~~18% of our outstanding common stock. Mr. Matthew Miau, the Chairman Emeritus of our Board of Directors and a director, is the Chairman of MiTAC Holdings' and a director or officer of MiTAC Holdings' affiliates.

The shares owned by MiTAC Holdings are held by the following entities:



	As of August 31, ~~2017~~2020
		(in thousands)
MiTAC Holdings⁽¹⁾	~~5,449~~		5,300
Synnex Technology International Corp.⁽²⁾	~~4,209~~		3,860
Total	~~9,658~~		9,160

(1)
~~(1)~~	Shares are held via Silver Star Developments Ltd., a wholly-owned subsidiary of MiTAC Holdings. Excludes ~~376~~190 thousand shares held directly ~~held~~ by Mr. ~~Matthew~~ Miau, ~~and 218~~217 thousand shares indirectly held by Mr. ~~Matthew~~ Miau through a charitable remainder ~~trust.~~

	trust, and 190 thousand shares held by his spouse.
(2)		Synnex Technology International Corp. (“Synnex Technology International”) is a separate entity from us and is a publicly-traded corporation in Taiwan. Shares are held via Peer Development Ltd., a wholly-owned subsidiary of Synnex Technology International. MiTAC Holdings owns a noncontrolling interest of ~~8.7%~~8.7% in MiTAC Incorporated, a privately-held Taiwanese company, which in turn holds a noncontrolling interest of ~~13.6%~~14.9% in Synnex Technology International. Neither MiTAC Holdings nor Mr. Miau is affiliated with any person(s), entity, or entities that hold a majority interest in MiTAC Incorporated.

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MiTAC Holdings generally has significant influence over us regarding matters submitted to stockholders for consideration, including any merger or acquisition of ours. Among other things, this could have the effect of delaying, deterring or preventing a change of control over us.

We purchased inventories and services from MiTAC Holdings and its affiliates totaling ~~$66.3~~$53.4 million and ~~$183.4~~$151.9 million during the three and nine months ended August 31, 2020, respectively, and totaling $42.0 million and $120.1 million, respectively, during the three and nine months ended August 31, ~~2017,~~2019. Our sales to MiTAC Holdings and ~~totaling $44.1~~its affiliates totaled $0.3 million and ~~$105.4~~$0.9 million during the three and nine months ended August 31, 2020, respectively, and totaled $0.1 million and $0.5 million, respectively, during the three and nine months ended August 31, ~~2016. Our sales to~~2019. In addition, we paid rent and overhead costs for the use of the facilities of MiTAC Holdings and its affiliates ~~totaled $0.2 million~~amounting to $27.0 thousand and ~~$1.0 million, respectively,~~$91.0 thousand during the three and nine months ended August 31, ~~2017,~~2020. There were no rent and ~~totaled $0.6 million and $1.3 million, respectively,~~overhead costs during the three and nine months ended August 31, ~~2016. In addition, we received reimbursements~~2019.

As of ~~rent~~August 31, 2020 and ~~overhead costs for facilities used by~~November 30, 2019, our payables to MiTAC Holdings ~~amounting to $36,000~~ and ~~$109,000, respectively, during the three~~its affiliates were $28.8 million and ~~nine months ended~~$23.2 million, respectively. As of August 31, ~~2017,~~2020 and ~~$98,000~~November 30, 2019, our receivables from MiTAC Holdings and ~~$172,000, respectively, during the three~~its affiliates were $15.8 million and ~~nine months ended August 31, 2016.~~

$4.4 million, respectively.

Our business relationship with MiTAC Holdings and its affiliates has been informal and is generally not governed by long-term commitments or arrangements with respect to pricing terms, revenue or capacity commitments. We negotiate pricing and other material terms on a case-by-case basis with MiTAC Holdings. We have adopted a policy requiring that material transactions with MiTAC Holdings or its related parties be approved by our Audit Committee, which is composed solely of independent directors. In addition, Mr. ~~Matthew~~ Miau’s compensation is approved by the Nominating and Corporate Governance Committee, which is also composed solely of independent directors.

Synnex Technology International is a publicly-traded corporation in Taiwan that currently provides distribution and fulfillment services to various markets in Asia and Australia, and is also our potential competitor. MiTAC Holdings and its affiliates are not restricted from competing with us.

Recently Issued Accounting Pronouncements

For a summary of recent accounting pronouncements and the anticipated effects on our ~~consolidated financial statements,~~Consolidated Financial Statements, see Note 2 - Summary of Significant Accounting Policies to the Consolidated Financial Statements.

ITEM 3. Quantitative and Qualitative Disclosures about Market Risk

There have been no material changes in our quantitative and qualitative disclosures about market risk during the nine months ended August 31, ~~2017~~2020 from our Annual Report on Form 10-K for the fiscal year ended November 30, ~~2016.~~2019. For a discussion of the Company's exposure to market risk, reference is made to disclosures set forth in Part II, Item 7A of our above-mentioned Annual Report on Form 10-K.

ITEM 4. Controls and Procedures

(a) Evaluation of disclosure controls and procedures. 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 is 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 Quarterly Report on Form 10-Q, 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.

(b) Changes in internal control over financial reporting. There was no change 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 fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Table of Contents

PART II - OTHER INFORMATION

ITEM 1A. Risk Factors

You should carefully review and consider the information regarding certain factors that could materially affect our business, financial condition or future results set forth under Part I-Item 1A (Risk Factors) in our Annual Report on Form 10-K for the fiscal year ended November 30, ~~2016. Except as~~2019. In addition, the risk to our business from the impact of the COVID-19 pandemic and the United Kingdom’s withdrawal from the European Union are set forth ~~below,~~below:

The widespread outbreak of an illness or any other communicable disease, or any other public health crisis, could adversely affect our business, results of operations and financial condition.

We could be negatively impacted by the widespread outbreak of an illness or any other communicable disease, or any other public health crisis that results in economic and trade disruptions, including the disruption of global supply chains. In December 2019, there ~~have been no material changes from~~was an outbreak of a new strain of coronavirus, COVID-19. On March 11, 2020, the ~~risk factors disclosed in~~World Health Organization characterized COVID-19 as a pandemic. The COVID-19 pandemic has negatively impacted the global economy, disrupted global supply chains and workforce participation due to “shelter-in-place” restrictions by various governments worldwide and created significant volatility and disruption of financial markets. This has adversely impacted our ~~2016 Annual Report on Form 10-K.~~

~~Risks Related to~~results of operations during the ~~Acquisition~~nine months ended August 31, 2020. The extent of the ~~Westcon-Comstor Americas~~impact of the COVID-19 pandemic on our future operational and financial performance, including our ability to execute our business

~~We may not be able~~ strategies and initiatives in the expected time frame, will depend on future developments, including the duration and spread of the pandemic and related restrictions on travel and transports, the effect on our customers and clients and demand for our products and services; our ability to ~~realize~~sell and provide our products and services, including as a result of travel restrictions and people working from home; the ability of our clients to pay for our services and solutions; and any closures of our and our customers’ and clients’ offices and facilities all of ~~the anticipated benefits of the acquisition of the Westcon-Comstor Americas business~~which are uncertain and cannot be predicted. We could also face legal, reputational and financial risks if we fail to ~~integrate this~~protect customer and internal data from security breaches or cyberattacks.

An extended period of global supply chain and economic disruption could materially affect our business, ~~successfully,~~our plans to separate our Concentrix segment into an independent public company, 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.

The United Kingdom’s withdrawal from the European Union (“EU”) could adversely impact our business, results of operations and financial condition.

On January 31, 2020, the United Kingdom left the EU (“Brexit”). The United Kingdom and EU are now in a transitional period during which the United Kingdom will maintain access to the EU single market and to the global trade deals negotiated by the EU on behalf of its members, and remain subject to EU law, until December 31, 2020.

The uncertainty regarding the status of Brexit has negatively impacted the United Kingdom’s and the EU’s economies. This negative impact will likely continue until the United Kingdom and EU reach and implement a definitive resolution on their future trading relationship. Any additional impact of Brexit will depend on the terms of such resolution. Even if the United Kingdom maintains access to the EU single market and trade deals following the transition period, Brexit could ~~reduce~~result in further economic downturn globally. If the United Kingdom ultimately loses access to the EU single market and trade deals, significant market and economic disruption could occur, our ~~profitability~~customer experience, service quality and international operations could be negatively impacted, and the demand for our services could be depressed. Additionally, we may face new regulations regarding trade, tax, security and employees, among others, in the United Kingdom. Compliance with such regulations could be costly, negatively impacting our business, results of operations and financial condition. Brexit could also adversely affect ~~our stock price.~~

~~Our ability~~European and worldwide economic and market conditions and could contribute to ~~realize~~instability in global financial and foreign exchange markets, including volatility in the ~~anticipated benefits~~value of the ~~Westcon-Comstor Americas acquisition will depend, in part, on our ability to integrate this business successfully~~Euro and ~~efficiently with our business. The integration~~the British Pound.

Table of this business in several geographic locations, including ones new to us, is a complex, costly and time-consuming process. The integration process may disrupt our business and, if implemented ineffectively, preclude realization of the full benefits expected by us. If we are not successful in this integration, our financial results could be adversely impacted. Our management will be required to dedicate significant time and effort to this integration process, which could divert their attention from other business concerns. In addition, the overall integration may result in unanticipated problems, expenses, liabilities, competitive responses, loss of customer and other relationships, a loss of key employees, and diversion of management’s attention, and may cause our stock price to decline. The difficulties of combining the operations of the two businesses include, among others:

~~challenges associated with minimizing the diversion of management attention from ongoing business concerns;~~

~~coordinating geographically separate organizations which may be subject to additional complications resulting from being geographically distant from other of our operations;~~

~~coordinating and combining international operations, relationships, and facilities, and eliminating duplicative operations;~~

~~retaining key employees and maintaining employee morale, particularly in areas where we do not currently have personnel;~~

~~unanticipated changes in general business or market conditions that might interfere with our ability to carry out all of our integration plans;~~

~~unanticipated issues in integrating information, communications and other systems;~~

~~geopolitical events in relevant geographic locations, including natural disasters, public health issues, acts of war, and terrorism;~~

~~issues not discovered in our due diligence process; and~~

~~preserving important strategic and customer relationships.~~

In addition, even if the integration is successful, we may not realize the full potential benefits of the transaction, including synergies, revenues, cost savings or sales or growth opportunities that we expect. Such benefits may not be achieved within the anticipated time frame, or at all. As a result, we cannot assure you that this acquisition will result in the realization of the full benefits anticipated from the transaction.

Contents

ITEM 6. Exhibits



Exhibit Number		Description of Document

~~2.1~~ 10.1		~~Share Purchase Agreement among~~Forms of incentive award agreements related to the 2020 SYNNEX Corporation ~~Datatec Limited and Datatec PLC dated June 5, 2017 (incorporated by reference to Exhibit 2.1 of the Company’s Current Report on Form 8-K filed on June 6, 2017).~~Stock Incentive Plan.

~~2.2~~ 31.1		Amendment No. 1 to Share Purchase Agreement among SYNNEX Corporation, Datatec Limited and Datatec PLC dated July 22, 2017 (incorporated by reference to Exhibit 2.2 of the Company’s Current Report on Form 8-K filed on September 7, 2017).

~~2.3~~		Amendment No. 2 to Share Purchase Agreement among SYNNEX Corporation, Datatec Limited and Datatec PLC dated August 30, 2017 (incorporated by reference to Exhibit 2.3 of the Company’s Current Report on Form 8-K filed on September 7, 2017).

~~10.1~~		Seventh Amendment to Third Amended and Restated Receivables Sale and Servicing Agreement, dated as of September 1, 2017, by and among SYNNEX Corporation, SIT Funding Corporation, Hyve Solutions Corporation, the lenders party thereto and The Bank of Tokyo-Mitsubishi UFJ, Ltd..

~~10.2~~		Fifth Amendment to Credit Agreement among SYNNEX Corporation, the guarantors party thereto, the lenders party thereto and Bank of America, N.A., in its capacity as Administrative Agent, an L/C Issuer and the Swing Line Lender dated July 7, 2017.

~~10.3~~		Sixth Amendment to Credit Agreement among SYNNEX Corporation, the guarantors party thereto, the lenders party thereto and Bank of America, N.A., in its capacity as Administrative Agent, an L/C Issuer and the Swing Line Lender dated September 1, 2017 (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed on September 7, 2017).

~~31.1~~		Rule 13a-14(a) Certification of Chief Executive Officer.

31.2		Rule 13a-14(a) Certification of Chief Financial Officer.

32.1*		Statement of the Chief Executive Officer and Chief Financial Officer under Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350).

101.INS		Inline XBRL Instance ~~Document.~~Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH		Inline XBRL Taxonomy Extension Schema Document.

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document.

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document.

104		Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

~~_____________________________________________~~

* 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-Q 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.

Table of Contents

SIGNATURES

Pursuant to the requirements 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.

Date: October ~~3, 2017~~

9, 2020

SYNNEX CORPORATION



By:		/s/ ~~Kevin M. Murai~~Dennis Polk
		~~Kevin M. Murai~~ Dennis Polk
		President and Chief Executive Officer
		(Duly authorized officer and principal executive officer)



By:		/s/ Marshall W. Witt
		Marshall W. Witt
		Chief Financial Officer
		(Duly authorized officer and principal financial officer)

~~EXHIBIT INDEX~~



~~Exhibit~~ ~~Number~~		~~Description of Document~~

~~2.1~~		Share Purchase Agreement among SYNNEX Corporation, Datatec Limited and Datatec PLC dated June 5, 2017 (incorporated by reference to Exhibit 2.1 of the Company’s Current Report on Form 8-K filed on June 6, 2017).

~~2.2~~		Amendment No. 1 to Share Purchase Agreement among SYNNEX Corporation, Datatec Limited and Datatec PLC dated July 22, 2017 (incorporated by reference to Exhibit 2.2 of the Company’s Current Report on Form 8-K filed on September 7, 2017).

~~2.3~~		Amendment No. 2 to Share Purchase Agreement among SYNNEX Corporation, Datatec Limited and Datatec PLC dated August 30, 2017 (incorporated by reference to Exhibit 2.3 of the Company’s Current Report on Form 8-K filed on September 7, 2017).

~~10.1~~		Seventh Amendment to Third Amended and Restated Receivables Sale and Servicing Agreement, dated as of September 1, 2017, by and among SYNNEX Corporation, SIT Funding Corporation, Hyve Solutions Corporation, the lenders party thereto and The Bank of Tokyo-Mitsubishi UFJ, Ltd..

~~10.2~~		Fifth Amendment to Credit Agreement among SYNNEX Corporation, the guarantors party thereto, the lenders party thereto and Bank of America, N.A., in its capacity as Administrative Agent, an L/C Issuer and the Swing Line Lender dated July 7, 2017.

~~10.3~~		Sixth Amendment to Credit Agreement among SYNNEX Corporation, the guarantors party thereto, the lenders party thereto and Bank of America, N.A., in its capacity as Administrative Agent, an L/C Issuer and the Swing Line Lender dated September 1, 2017 (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed on September 7, 2017).

~~31.1~~		~~Rule 13a-14(a) Certification of Chief Executive Officer.~~

~~31.2~~		~~Rule 13a-14(a) Certification of Chief Financial Officer.~~

32.1*		~~Statement of the Chief Executive Officer and Chief Financial Officer under Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350).~~

~~101.INS~~		~~XBRL Instance Document.~~

~~101.SCH~~		~~XBRL Taxonomy Extension Schema Document.~~

~~101.CAL~~		~~XBRL Taxonomy Extension Calculation Linkbase Document.~~

~~101.DEF~~		~~XBRL Taxonomy Extension Definition Linkbase Document.~~

~~101.LAB~~		~~XBRL Taxonomy Extension Label Linkbase Document.~~

~~101.PRE~~		~~XBRL Taxonomy Extension Presentation Linkbase Document.~~

~~_____________________________________________~~

Delaware		94-2703333

~~Delaware~~		~~94-2703333~~
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

44201 Nobel Drive Fremont, California		94538
(Address of principal executive offices)		(Zip Code)


☒
☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



	August 31, 2017			November 30, 2016
ASSETS
Current assets:
Cash and cash equivalents	$	243,265		$	380,717
Restricted cash	3,677			6,265
Short-term investments	5,487			5,109
Accounts receivable, net	1,861,409			1,756,494
Receivable from related parties	72			102
Inventories	2,242,083			1,741,734
Other current assets	97,940			104,609
Total current assets	4,453,933			3,995,030
Property and equipment, net	329,885			312,716
Goodwill	536,306			486,239
Intangible assets, net	279,818			298,550
Deferred tax assets	66,215			58,564
Other assets	73,203			64,182
Total assets	$	5,739,360		$	5,215,281
LIABILITIES AND EQUITY
Current liabilities:
Borrowings, current	$	489,904		$	362,889
Accounts payable	1,770,435			1,683,155
Payable to related parties	33,675			30,679
Accrued compensation and benefits	173,146			165,585
Other accrued liabilities	291,599			217,127
Income taxes payable	14,603			17,097
Total current liabilities	2,773,362			2,476,532
Long-term borrowings	564,085			601,095
Other long-term liabilities	114,151			103,217
Deferred tax liabilities	70,891			58,639
Total liabilities	3,522,489			3,239,483
Commitments and contingencies (Note 16)
SYNNEX Corporation stockholders’ equity:
Preferred stock, $0.001 par value, 5,000 shares authorized, no shares issued or outstanding	—			—
Common stock, $0.001 par value, 100,000 shares authorized, 40,949 and 40,816 shares issued as of August 31, 2017 and November 30, 2016, respectively	41			41
Additional paid-in capital	458,916			440,713
Treasury stock, 1,373 and 1,339 shares as of August 31, 2017 and November 30, 2016, respectively	(71,184		)	(67,262		)
Accumulated other comprehensive income (loss)	(46,550		)	(93,116		)
Retained earnings	1,875,648			1,695,400
Total SYNNEX Corporation stockholders’ equity	2,216,871			1,975,776
Noncontrolling interest	—			22
Total equity	2,216,871			1,975,798
Total liabilities and equity	$	5,739,360		$	5,215,281



	As of
	August 31, 2017		November 30, 2016
Cash and cash equivalents	$	243,265	$	380,717
Restricted cash	3,677		6,265
Restricted cash included in other assets	270		185
Total cash, cash equivalents and restricted cash shown in the Consolidated Statements of Cash Flows	$	247,212	$	387,167



	As of August 31, 2017							As of November 30, 2016
	Gross Amounts		Accumulated Amortization			Net Amounts		Gross Amounts		Accumulated Amortization			Net Amounts
Intangible assets, net:
Customer relationships and lists	$	468,123	$	(211,132	)	$	256,991	$	448,008	$	(160,033	)	$	287,975
Vendor lists	36,815		(35,946		)	869		36,815		(34,793		)	2,022
Technology	26,154		(4,741		)	21,413		10,900		(3,227		)	7,673
Other intangible assets	5,939		(5,394		)	545		5,827		(4,947		)	880
	$	537,031	$	(257,213	)	$	279,818	$	501,550	$	(203,000	)	$	298,550



Fiscal Years Ending November 30,
2017 (remaining three months)	$	17,102
2018	57,971
2019	46,025
2020	40,907
2021	35,690
thereafter	82,123
Total	$	279,818



	Unrealized gains on available-for-sale securities, net of taxes		Unrecognized defined benefit plan costs, net of taxes			Unrealized gains (losses) on cash flow hedges, net of taxes			Foreign currency translation adjustment, net of taxes			Total
Balance as of November 30, 2016	$	713	$	(850	)	$	(4,458	)	$	(88,521	)	$	(93,116	)
Other comprehensive gain (loss)	710		(58		)	203			45,711			46,566
Balance as of August 31, 2017	$	1,423	$	(908	)	$	(4,255	)	$	(42,810	)	$	(46,550	)



		Fair Value as of
	Balance Sheet Line Item	August 31, 2017		November 30, 2016
Derivative instruments not designated as hedging instruments
Foreign exchange forward contracts
	Other current assets	$	940	$	1,700
	Other accrued liabilities	1,187		979
Derivative instruments designated as cash flow hedges
Interest rate swaps
	Other accrued liabilities	$	1,295	$	706
	Other long-term liabilities	5,622		6,542



Fiscal Years Ending November 30,
2017 (remaining three months)	$	450,842
2018	105,349
2019	62,507
2020	437,500
	$	1,056,198



	Nine Months Ended August 31, 2017									Nine Months Ended August 31, 2016
	Attributable to SYNNEX Corporation			Attributable to Noncontrolling interest			Total Equity			Attributable to SYNNEX Corporation			Attributable to Noncontrolling interest			Total Equity
Beginning balance:	$	1,975,776		$	22		$	1,975,798		$	1,799,381		$	516		$	1,799,897
Issuance of common stock on exercise of options	1,053			—			1,053			4,243			—			4,243
Issuance of common stock for employee stock purchase plan	2,187			—			2,187			1,771			—			1,771
Tax benefit from employee stock plans	2,466			—			2,466			5,262			—			5,262
Taxes paid for the settlement of equity awards	(3,922		)	—			(3,922		)	(3,427		)	—			(3,427		)
Share-based compensation	12,412						12,412			10,615			—			10,615
Changes in ownership of noncontrolling interest	85			(22		)	63			(628		)	(578		)	(1,206		)
Repurchases of common stock	—			—			—			(6,917		)	—			(6,917		)
Dividends declared	(29,852		)	—			(29,852		)	(23,809		)	—			(23,809		)
Comprehensive income:
Net income	210,100			—			210,100			149,628			67			149,695
Other comprehensive income (loss):
Unrealized gains (losses) on available-for-sale securities, net of taxes	710			—			710			(575		)	(3		)	(578		)
Change in unrealized gain (losses) in defined benefit plans, net of taxes	(58		)	—			(58		)	(455		)	—			(455		)
Unrealized gains (losses) on cash flow hedges, net of taxes	203			—			203			(4,961		)	—			(4,961		)
Foreign currency translation adjustments, net of taxes	45,711			—			45,711			(3,383		)	36			(3,347		)
Total other comprehensive income (loss)	46,566			—			46,566			(9,374		)	33			(9,341		)
Total comprehensive income	256,666			—			256,666			140,254			100			140,354
Ending balance:	$	2,216,871		$	—		$	2,216,871		$	1,926,745		$	38		$	1,926,783



Fiscal Years Ending November 30,
2017 (remaining three months)	$	23,075
2018	87,070
2019	76,209
2020	62,148
2021	40,481
Thereafter	82,473
Total minimum lease payments	$	371,456

Outstanding as of ~~September 26, 2017~~October 2, 2020

Common Stock, $0.001 par value

~~39,965,158~~
51,544,234