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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
______________________
FORM 10-Q
______________________
☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2023
OR
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                     
Commission file number: 0-27544
______________________________________
OPEN TEXT CORPORATION
(Exact name of Registrant as specified in its charter)
______________________
Canada98-0154400
(State or other jurisdiction of incorporation or organization)(IRS Employer Identification No.)
275 Frank Tompa Drive,N2L 0A1
Waterloo, OntarioCanada
(Address of principal executive offices)(Zip code)
Registrant's telephone number, including area code: (519) 888-7111

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 without par valueOTEXNASDAQ Global Select Market

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 every Interactive Data File required to be submitted 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 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 growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer  ☒  Accelerated filer  ☐ Non-accelerated filer  ☐ 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  ☒
At October 27, 2023, there were 271,514,728 outstanding Common Shares of the registrant.
1
OPEN TEXT CORPORATION
TABLE OF CONTENTS

2
Part I - Financial Information
Item 1. Financial Statements
OPEN TEXT CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands of U.S. dollars, except share data)
September 30, 2023June 30, 2023
ASSETS(unaudited)
Cash and cash equivalents$919,850 $1,231,625 
Accounts receivable trade, net of allowance for credit losses of $11,501 as of September 30, 2023 and $13,828 as of June 30, 2023 (Note 4)
676,594 682,517 
Contract assets (Note 3)
78,562 71,196 
Income taxes recoverable (Note 15)
70,179 68,161 
Prepaid expenses and other current assets (Note 9)
199,917 221,732 
Total current assets1,945,102 2,275,231 
Property and equipment (Note 5)
361,612 356,904 
Operating lease right of use assets (Note 6)
266,053 285,723 
Long-term contract assets (Note 3)
54,448 64,553 
Goodwill (Note 7)
8,618,765 8,662,603 
Acquired intangible assets (Note 8)
3,888,217 4,080,879 
Deferred tax assets (Note 15)
996,514 926,719 
Other assets (Note 9)
328,972 342,318 
Long-term income taxes recoverable (Note 15)
94,193 94,270 
Total assets$16,553,876 $17,089,200 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities (Note 10)
$836,042 $996,261 
Current portion of long-term debt (Note 11)
145,850 320,850 
Operating lease liabilities (Note 6)
90,418 91,425 
Deferred revenues (Note 3)
1,596,321 1,721,781 
Income taxes payable (Note 15)
153,396 89,297 
Total current liabilities2,822,027 3,219,614 
Long-term liabilities:
Accrued liabilities (Note 10)
49,333 51,961 
Pension liability (Note 12)
125,616 126,312 
Long-term debt (Note 11)
8,554,569 8,562,096 
Long-term operating lease liabilities (Note 6)
252,629 271,579 
Long-term deferred revenues (Note 3)
197,112 217,771 
Long-term income taxes payable (Note 15)
148,822 193,808 
Deferred tax liabilities (Note 15)
389,510 423,955 
Total long-term liabilities9,717,591 9,847,482 
Shareholders’ equity:
Share capital and additional paid-in capital (Note 13)
271,227,929 and 270,902,571 Common Shares issued and outstanding at September 30, 2023 and June 30, 2023, respectively; authorized Common Shares: unlimited
2,216,921 2,176,947 
Accumulated other comprehensive income (loss) (Note 20)
(70,025)(53,559)
Retained earnings2,062,107 2,048,984 
Treasury stock, at cost (4,753,281 and 3,536,375 shares at September 30, 2023 and June 30, 2023, respectively)
(196,119)(151,597)
Total OpenText shareholders' equity4,012,884 4,020,775 
Non-controlling interests1,374 1,329 
Total shareholders’ equity4,014,258 4,022,104 
Total liabilities and shareholders’ equity$16,553,876 $17,089,200 
Guarantees and contingencies (Note 14)
Related party transactions (Note 24)
Subsequent events (Note 25)
See accompanying Notes to Condensed Consolidated Financial Statements
3
OPEN TEXT CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands of U.S. dollars, except share and per share data)
(unaudited)

Three Months Ended September 30,
20232022
Revenues (Note 3):
Cloud services and subscriptions$451,014 $404,651 
Customer support697,713 317,351 
License173,026 62,548 
Professional service and other103,676 67,486 
Total revenues1,425,429 852,036 
Cost of revenues:
Cloud services and subscriptions171,412 131,799 
Customer support75,014 27,354 
License3,839 2,758 
Professional service and other79,922 53,800 
Amortization of acquired technology-based intangible assets (Note 8)
76,824 42,637 
Total cost of revenues407,011 258,348 
Gross profit1,018,418 593,688 
Operating expenses:
Research and development234,437 110,198 
Sales and marketing271,801 167,170 
General and administrative131,211 78,074 
Depreciation34,091 23,174 
Amortization of acquired customer-based intangible assets (Note 8)
120,192 54,438 
Special charges (recoveries) (Note 18)
13,794 14,281 
Total operating expenses805,526 447,335 
Income from operations
212,892 146,353 
Other income (expense), net (Note 22)
20,170 (189,231)
Interest and other related expense, net(141,764)(40,382)
Income (loss) before income taxes
91,298 (83,260)
Provision for income taxes (Note 15)
10,352 33,625 
Net income (loss) for the period
$80,946 $(116,885)
Net (income) attributable to non-controlling interests
(45)(44)
Net income (loss) attributable to OpenText
$80,901 $(116,929)
Earnings (loss) per share—basic attributable to OpenText (Note 23)
$0.30 $(0.43)
Earnings (loss) per share—diluted attributable to OpenText (Note 23)
$0.30 $(0.43)
Weighted average number of Common Shares outstanding—basic (in '000's)271,178 269,804 
Weighted average number of Common Shares outstanding—diluted (in '000's)271,902 269,804 

See accompanying Notes to Condensed Consolidated Financial Statements
4
OPEN TEXT CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands of U.S. dollars)
(unaudited)

 Three Months Ended September 30,
 20232022
Net income (loss) for the period
$80,946 $(116,885)
Other comprehensive income (loss)—net of tax:
Net foreign currency translation adjustments(14,583)(36,366)
Unrealized gain (loss) on cash flow hedges:
Unrealized gain (loss) - net of tax (1)
(1,841)(3,340)
(Gain) loss reclassified into net income - net of tax (2)
9 588 
Unrealized gain (loss) on available-for-sale financial assets:
Unrealized gain (loss) - net of tax (3)
(221)— 
Actuarial gain (loss) relating to defined benefit pension plans:
Actuarial gain (loss) - net of tax (4)
(19)4,164 
Amortization of actuarial (gain) loss into net income - net of tax (5)
189 37 
Total other comprehensive loss net, for the period
(16,466)(34,917)
Total comprehensive income (loss)
64,480 (151,802)
Comprehensive income attributable to non-controlling interests
(45)(44)
Total comprehensive income (loss) attributable to OpenText
$64,435 $(151,846)
______________________________
(1)Net of tax expense (recovery) of ($664) and $(1,206) for the three months ended September 30, 2023 and 2022, respectively.
(2)Net of tax expense (recovery) of $3 and $212 for the three months ended September 30, 2023 and 2022, respectively.
(3)Net of tax expense (recovery) of $59 and $— for the three months ended September 30, 2023 and 2022, respectively.
(4)Net of tax expense (recovery) of $19 and $1,104 for the three months ended September 30, 2023 and 2022, respectively.
(5)Net of tax expense (recovery) of $75 and $26 for the three months ended September 30, 2023 and 2022, respectively.
See accompanying Notes to Condensed Consolidated Financial Statements

5
OPEN TEXT CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(In thousands of U.S. dollars and shares)
(unaudited)

Three Months Ended September 30, 2023
Common Shares and Additional Paid in CapitalTreasury StockRetained
Earnings		Accumulated  Other
Comprehensive
Income		Non-Controlling InterestsTotal
SharesAmountSharesAmount
Balance as of June 30, 2023
270,903 $2,176,947 (3,536)$(151,597)$2,048,984 $(53,559)$1,329 $4,022,104 
Issuance of Common Shares
Under employee stock option plans85 2,892 — — — — — 2,892 
Under employee stock purchase plans240 8,641 — — — — — 8,641 
Share-based compensation— 37,004 — — — — — 37,004 
Purchase of treasury stock— — (1,400)(53,085)— — — (53,085)
Issuance of treasury stock— (8,563)183 8,563 — — — — 
Dividends declared
($0.25 per Common Share)
— — — — (67,778)— — (67,778)
Other comprehensive income (loss) - net— — — — — (16,466)— (16,466)
Net income (loss) for the period— — — — 80,901 — 45 80,946 
Balance as of September 30, 2023
271,228 $2,216,921 (4,753)$(196,119)$2,062,107 $(70,025)$1,374 $4,014,258 

Three Months Ended September 30, 2022
Common Shares and Additional Paid in CapitalTreasury StockRetained
Earnings		Accumulated  Other
Comprehensive
Income		Non-Controlling InterestsTotal
SharesAmountSharesAmount
Balance as of June 30, 2022
269,523 $2,038,674 (3,706)$(159,966)$2,160,069 $(7,659)$1,142 $4,032,260 
Issuance of Common Shares
Under employee stock option plans72 1,994 — — — — — 1,994 
Under employee stock purchase plans286 9,179 — — — — — 9,179 
Share-based compensation— 23,208 — — — — — 23,208 
Issuance of treasury stock— (5,174)120 5,174 — — — — 
Dividends declared
($0.24299 per Common Share)
— — — — (64,698)— — (64,698)
Other comprehensive income (loss) - net— — — — — (34,917)— (34,917)
Net income (loss) for the period— — — — (116,929)— 44 (116,885)
Balance as of September 30, 2022
269,881 $2,067,881 (3,586)$(154,792)$1,978,442 $(42,576)$1,186 $3,850,141 
See accompanying Notes to Condensed Consolidated Financial Statements

6
OPEN TEXT CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of U.S. dollars)
(unaudited)
Three Months Ended September 30,
 20232022
Cash flows from operating activities:
Net income (loss) for the period
$80,946 $(116,885)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of intangible assets231,107 120,249 
Share-based compensation expense37,095 23,208 
Pension expense3,171 1,387 
Amortization of debt discount and issuance costs
5,496 1,480 
Write-off of right of use assets4,715 2,827 
Loss on sale and write down of property and equipment458 — 
Deferred taxes(88,630)(20,667)
Share in net loss of equity investees
9,696 6,534 
Changes in financial instruments(17,895)181,461 
Changes in operating assets and liabilities:
Accounts receivable31,304 59,494 
Contract assets(22,566)(9,054)
Prepaid expenses and other current assets19,326 (2,934)
Income taxes29,597 15,834 
Accounts payable and accrued liabilities(124,214)(27,179)
Deferred revenue(150,476)(53,779)
Other assets4,104 (47,749)
Operating lease assets and liabilities, net(6,113)(2,268)
Net cash provided by operating activities
47,121 131,959 
Cash flows from investing activities:
Additions of property and equipment(37,539)(36,324)
Micro Focus acquisition
(9,272)— 
Proceeds from net investment hedge derivative contracts
1,966 — 
Other investing activities(5,554)— 
Net cash used in investing activities
(50,399)(36,324)
Cash flows from financing activities:
Proceeds from issuance of Common Shares from exercise of
stock options and ESPP
11,453 10,037 
Repayment of long-term debt and Revolver(186,463)(2,500)
Debt issuance costs(1,961)— 
Purchase of treasury stock(53,085)— 
Payments of dividends to shareholders(66,965)(64,698)
Net cash used in financing activities
(297,021)(57,161)
Foreign exchange loss on cash held in foreign currencies
(11,503)(28,102)
Increase (decrease) in cash, cash equivalents and restricted cash during the period
(311,802)10,372 
Cash, cash equivalents and restricted cash at beginning of the period1,233,952 1,695,911 
Cash, cash equivalents and restricted cash at end of the period$922,150 $1,706,283 
7
OPEN TEXT CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of U.S. dollars)
(unaudited)

Reconciliation of cash, cash equivalents and restricted cash:September 30, 2023September 30, 2022
Cash and cash equivalents$919,850 $1,704,385 
Restricted cash (1)
2,300 1,898 
Total cash, cash equivalents and restricted cash$922,150 $1,706,283 
_________________________________
(1)Restricted cash is classified under the Prepaid expenses and other current assets and Other assets line items on the Condensed Consolidated Balance Sheets (Note 9).

Supplemental cash flow disclosures (Note 6 and Note 21)

See accompanying Notes to Condensed Consolidated Financial Statements
8
OPEN TEXT CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the Three Months Ended September 30, 2023
(Tabular amounts in thousands of U.S. dollars, except share and per share data)
(unaudited)
NOTE 1—BASIS OF PRESENTATION
The accompanying Condensed Consolidated Financial Statements include the accounts of Open Text Corporation and our subsidiaries, collectively referred to as “OpenText” or the “Company.” We wholly own all of our subsidiaries with the exception of Open Text South Africa Proprietary Ltd. (OT South Africa), which as of September 30, 2023, was 70% owned by OpenText. All intercompany balances and transactions have been eliminated.
The following Fiscal Year terms are used throughout this Quarterly Report on Form 10-Q:
Fiscal YearBeginning DateEnding Date
Fiscal 2025
July 1, 2024June 30, 2025
Fiscal 2024
July 1, 2023June 30, 2024
Fiscal 2023
July 1, 2022June 30, 2023
Fiscal 2022
July 1, 2021June 30, 2022
Fiscal 2021
July 1, 2020June 30, 2021
Fiscal 2020
July 1, 2019June 30, 2020
Fiscal 2019
July 1, 2018June 30, 2019
Fiscal 2018
July 1, 2017June 30, 2018
Fiscal 2017
July 1, 2016June 30, 2017
Fiscal 2016
July 1, 2015June 30, 2016
Fiscal 2015
July 1, 2014June 30, 2015
Fiscal 2014
July 1, 2013June 30, 2014
Fiscal 2013
July 1, 2012June 30, 2013
Fiscal 2012
July 1, 2011June 30, 2012

These Condensed Consolidated Financial Statements are expressed in U.S. dollars and are prepared in accordance with United States generally accepted accounting principles (U.S. GAAP). The information furnished reflects all adjustments necessary for a fair presentation of the results for the periods presented and includes the consolidated financial results of Micro Focus International Limited, formerly Micro Focus International plc, and its subsidiaries (Micro Focus), with effect from February 1, 2023 (see below and Note 19 “Acquisitions”).
Use of estimates
The preparation of financial statements in conformity with U.S. GAAP requires us to make certain estimates, judgments and assumptions that affect the amounts reported in the Condensed Consolidated Financial Statements. These estimates, judgments and assumptions are evaluated on an ongoing basis. We base our estimates on historical experience and on various other assumptions that we believe are reasonable at that time, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from those estimates. In particular, key estimates, judgments and assumptions include those related to: (i) revenue recognition, (ii) accounting for income taxes, (iii) testing of goodwill for impairment, (iv) the valuation of acquired intangible assets, (v) the valuation of long-lived assets, (vi) the recognition of contingencies, (vii) restructuring accruals, (viii) acquisition accruals and pre-acquisition contingencies, (ix) the valuation of stock options granted and obligations related to share-based payments, including the valuation of our long-term incentive plans, (x) the valuation of pension obligations and pension assets, (xi) the valuation of available-for-sale investments and (xii) the valuation of derivative instruments.
9
Acquisition of Micro Focus
On January 31, 2023, we acquired all of the issued and to be issued share capital of Micro Focus (the Micro Focus Acquisition) for a total purchase price of $6.2 billion, inclusive of Micro Focus’ cash and repayment of Micro Focus’ outstanding indebtedness, subject to final adjustments. The results of operations of Micro Focus have been consolidated with those of OpenText with effect from February 1, 2023. See Note 19 “Acquisitions” to our Condensed Consolidated Financial Statements for more details.
NOTE 2—RECENT ACCOUNTING PRONOUNCEMENTS
Accounting Pronouncements Adopted in Fiscal 2024
During the three months ended September 30, 2023, we have adopted the following Accounting Standards Updates (ASU):
Supplier Financing Program Obligations
In September 2022, the Financial Accounting Standards Board (FASB) issued ASU 2022-04 “Liabilities-Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations.” This standard requires companies that participate in supplier finance programs in connection with the procurement of goods or services to disclose quantitative and qualitative information about the programs. We adopted this ASU as of July 1, 2023 which did not have a material impact on our Condensed Consolidated Financial Statements and related disclosures, as we had no material supplier finance program obligations as of September 30, 2023.
10
NOTE 3—REVENUES
Disaggregation of Revenue
We have four revenue streams: cloud services and subscriptions, customer support, license, and professional service and other. The following tables disaggregate our revenue by significant geographic area, based on the location of our direct end customer, by type of performance obligation and timing of revenue recognition for the periods indicated:
Three Months Ended September 30,
20232022
Total Revenues by Geography:
Americas (1)
$845,227 $557,788 
EMEA (2)
445,440 228,353 
Asia Pacific (3)
134,762 65,895 
Total revenues$1,425,429 $852,036 
Total Revenues by Type of Performance Obligation:
Recurring revenues (4)
Cloud services and subscriptions revenue
$451,014 $404,651 
Customer support revenue
697,713 317,351 
Total recurring revenues
$1,148,727 $722,002 
License revenue (perpetual, term and subscriptions) 173,026 62,548 
Professional service and other revenue103,676 67,486 
Total revenues$1,425,429 $852,036 
Total Revenues by Timing of Revenue Recognition:
Point in time $173,026 $62,548 
Over time (including professional service and other revenue)1,252,403 789,488 
Total revenues$1,425,429 $852,036 
___________________________
(1)Americas consists of countries in North, Central and South America.
(2)EMEA consists of countries in Europe, the Middle East and Africa.
(3)Asia Pacific primarily consists of Japan, Australia, China, Korea, Philippines, Singapore, India and New Zealand.
(4)Recurring revenue is defined as the sum of Cloud services and subscriptions revenue and Customer support revenue.
Contract Balances
A contract asset, net of allowance for credit losses, will be recorded if we have recognized revenue but do not have an unconditional right to the related consideration from the customer. For example, this will be the case if implementation services offered in a cloud arrangement are identified as a separate performance obligation and are provided to a customer prior to us being able to bill the customer. In addition, a contract asset may arise in relation to subscription licenses if the license revenue that is recognized upfront exceeds the amount that we are able to invoice the customer at that time. Contract assets are reclassified to accounts receivable when the rights become unconditional.
The balance for our contract assets and contract liabilities (i.e. deferred revenues) for the periods indicated below were as follows:
As of September 30, 2023
As of June 30, 2023
Short-term contract assets $78,562 $71,196 
Long-term contract assets
$54,448 $64,553 
Short-term deferred revenues$1,596,321 $1,721,781 
Long-term deferred revenues$197,112 $217,771 
    
The difference in the opening and closing balances of our contract assets and deferred revenues primarily results from the timing difference between our performance and the customer’s payments. We fulfill our obligations under a contract with a
11
customer by transferring products and services in exchange for consideration from the customer. During the three months ended September 30, 2023, we reclassified $25.1 million (three months ended September 30, 2022—$8.9 million) of contract assets to receivables as a result of the right to the transaction consideration becoming unconditional. During the three months ended September 30, 2023 and 2022, respectively, there was no significant impairment loss recognized related to contract assets.
We recognize deferred revenue when we have received consideration or an amount of consideration is due from the customer for future obligations to transfer products or services. Our deferred revenues primarily relate to cloud services and customer support agreements which have been paid for by customers prior to the performance of those services. The amount of revenue that was recognized during the three months ended September 30, 2023 that was included in the deferred revenue balances at June 30, 2023 was $739 million (three months ended September 30, 2022—$373 million).
Incremental Costs of Obtaining a Contract with a Customer
Incremental costs of obtaining a contract include only those costs that we incur to obtain a contract that we would not have incurred if the contract had not been obtained, such as sales commissions. The following table summarizes the changes in total capitalized costs to obtain a contract, since June 30, 2023:
Capitalized costs to obtain a contract as of June 30, 2023
$97,207 
New capitalized costs incurred11,719 
Amortization of capitalized costs(9,955)
Impact of foreign exchange rate changes(742)
Capitalized costs to obtain a contract as of September 30, 2023
$98,229 
During the three months ended September 30, 2023 and 2022, respectively, there was no significant impairment loss recognized related to capitalized costs to obtain a contract. Refer to Note 9 “Prepaid Expenses and Other Assets” for additional information on incremental costs of obtaining a contract.
Transaction Price Allocated to the Remaining Performance Obligations
As of September 30, 2023, approximately $2.5 billion of revenue is expected to be recognized from remaining performance obligations on existing contracts. We expect to recognize approximately 47% of this amount over the next 12 months and the remaining balance substantially over the next three years thereafter. We apply the practical expedient and do not disclose performance obligations that have original expected durations of one year or less.
NOTE 4—ALLOWANCE FOR CREDIT LOSSES
The following illustrates the activity in our allowance for credit losses on accounts receivable, since June 30, 2023:
Balance as of June 30, 2023
$13,828 
Credit loss expense (recovery)1,782 
Write-off / adjustments(4,109)
Balance as of September 30, 2023
$11,501 
Included in accounts receivable are unbilled receivables in the amount of $63.9 million as of September 30, 2023 (June 30, 2023—$66.5 million).
As of September 30, 2023, we have an allowance for credit losses of $0.2 million for contract assets (June 30, 2023—$0.3 million). For additional information on contract assets please see Note 3 “Revenues.”
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NOTE 5—PROPERTY AND EQUIPMENT
 As of September 30, 2023
 CostAccumulated
Depreciation		Net
Computer hardware$398,358 $(260,277)$138,081 
Computer software188,038 (142,234)45,804 
Capitalized software development costs224,334 (129,896)94,438 
Leasehold improvements118,370 (92,065)26,305 
Land and buildings61,877 (18,403)43,474 
Furniture, equipment and other54,738 (41,228)13,510 
Total$1,045,715 $(684,103)$361,612 
 
 As of June 30, 2023
 CostAccumulated
Depreciation		Net
Computer hardware$386,400 $(254,131)$132,269 
Computer software178,899 (135,123)43,776 
Capitalized software development costs216,762 (122,730)94,032 
Leasehold improvements123,607 (94,721)28,886 
Land and buildings62,041 (18,020)44,021 
Furniture, equipment and other55,741 $(41,821)13,920 
Total$1,023,450 $(666,546)$356,904 
NOTE 6—LEASES
We enter into operating leases, both domestically and internationally, for certain facilities, automobiles, data centers and equipment for use in the ordinary course of business. The duration of the majority of these leases generally ranges from 1 to 10 years, some of which include options to extend for an additional 3 to 5 years after the initial term. Additionally, the land upon which our headquarters in Waterloo, Ontario, Canada is located is leased from the University of Waterloo for a period of 49 years beginning in December 2005, with an option to renew for an additional term of 49 years. We also have finance lease liabilities comprised of equipment lease arrangements with an average duration of 4 to 5 years all of which are currently being sublet. Leases with an initial term of 12 months or less are not recorded on our Condensed Consolidated Balance Sheets.

13
The following illustrates the Condensed Consolidated Balance Sheets information related to leases:
As of September 30, 2023As of June 30, 2023
Operating LeasesBalance Sheet Location
Operating lease right of use assetsOperating lease right of use assets$266,053 $285,723 
Operating lease liabilities (current)Operating lease liabilities$90,418 $91,425 
Operating lease liabilities (noncurrent)Long-term operating lease liabilities252,629 271,579 
Total operating lease liabilities$343,047 $363,004 
Finance Leases
Finance lease receivables (current)Prepaid expenses and other current assets$5,492 $6,362 
Finance lease receivables (noncurrent)Other assets4,443 5,515 
Total finance lease receivables$9,935 $11,877 
Finance lease liabilities (current)Accounts payable and accrued liabilities$4,992 $5,281 
Finance lease liabilities (noncurrent)Accrued liabilities4,437 5,500 
Total finance lease liabilities$9,429 $10,781 
The weighted average remaining lease term and discount rate for the periods indicated below were as follows:
As of September 30, 2023As of June 30, 2023
Weighted-average remaining lease term
Operating leases5.49 years5.62 years
Finance leases2.22 years2.40 years
Weighted-average discount rate
Operating leases4.7 %4.66 %
Finance leases5.58 %5.60 %
Lease Costs and Other Information
The following illustrates the various components of lease costs for the period indicated:
Three Months Ended September 30,
20232022
Operating lease cost$23,740 $14,311 
Short-term lease cost1,155 387 
Variable lease cost1,135 579 
Sublease income(3,338)(2,912)
Total lease cost$22,692 $12,365 
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Supplemental Cash Flow Information
The following table presents supplemental information relating to cash flows arising from lease transactions. Cash payments made for variable lease costs and short-term leases are not included in the measurement of lease liabilities, and, as such, are excluded from the amounts below:
Three Months Ended September 30,
20232022
Cash paid for amounts included in the measurement of lease liabilities:
Operating leases$27,699 $17,740 
Finance leases$1,486 $— 
Right of use assets obtained in exchange for new lease liabilities:
Operating leases
$7,045 $22,467 
Maturity of Lease Liabilities
The following table presents the future minimum lease payments under our leases liabilities as of September 30, 2023:
Fiscal years ending June 30,Operating LeasesFinance Leases
2024 (nine months ended)
$79,726 $4,232 
2025
84,518 3,363 
2026
62,278 1,937 
2027
50,684 459 
2028
39,505 — 
Thereafter70,926 — 
Total lease payments$387,637 $9,991 
Less: Imputed interest(44,590)(562)
Total$343,047 $9,429 
Operating lease maturity amounts included in the table above do not include sublease income expected to be received under our various sublease agreements with third parties. Under the agreements initiated with third parties, we expect to receive sublease income of $9.4 million over the remainder of Fiscal 2024 and $34.0 million thereafter.
NOTE 7—GOODWILL
Goodwill is recorded when the consideration paid for an acquisition of a business exceeds the fair value of identifiable net tangible and intangible assets. The following table summarizes the changes in goodwill since June 30, 2023:
Balance as of June 30, 2023
$8,662,603 
Other acquisition (Note 19)
1,250 
Acquisition of Micro Focus (Note 19) (1)
(33,889)
Impact of foreign exchange rate changes(11,199)
Balance as of September 30, 2023
$8,618,765 
______________________
(1)Adjustments relating to open measurement period.
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NOTE 8—ACQUIRED INTANGIBLE ASSETS
As of September 30, 2023
CostAccumulated AmortizationNet
Technology assets$1,815,285 $(461,716)$1,353,569 
Customer assets3,694,061 (1,159,413)2,534,648 
Total$5,509,346 $(1,621,129)$3,888,217 
As of June 30, 2023
CostAccumulated AmortizationNet
Technology assets$1,815,260 $(385,868)$1,429,392 
Customer assets3,691,252 (1,039,765)2,651,487 
Total$5,506,512 $(1,425,633)$4,080,879 
The weighted average amortization periods for acquired technology and customer intangible assets are approximately six years and eight years, respectively.
The following table shows the estimated future amortization expense for the fiscal years indicated. This calculation assumes no future adjustments to acquired intangible assets:
Fiscal years ending June 30,
2024 (nine months ended)
$557,173 
2025643,188 
2026599,851 
2027529,474 
2028505,749 
2029 and Thereafter
1,052,782 
Total$3,888,217 
 
16
NOTE 9—PREPAID EXPENSES AND OTHER ASSETS
Prepaid expenses and other current assets:
As of September 30, 2023As of June 30, 2023
Deposits and restricted cash$4,400 $2,621 
Capitalized costs to obtain a contract36,020 39,685 
Short-term prepaid expenses and other current assets158,566 175,879 
Derivative asset (1)
931 3,547 
Total$199,917 $221,732 
______________________________
(1)Represents the asset related to our derivative instrument activity (see Note 17 “Derivative Instruments and Hedging Activities”).
Other assets:
As of September 30, 2023As of June 30, 2023
Deposits and restricted cash$18,364 $20,418 
Capitalized costs to obtain a contract62,209 57,522 
Investments137,229 147,974 
Available-for-sale financial assets39,048 39,858 
Long-term prepaid expenses and other long-term assets72,122 76,546 
Total$328,972 $342,318 
Deposits and restricted cash primarily relate to security deposits provided to landlords in accordance with facility lease agreements and cash restricted per the terms of certain contractual-based agreements.
Capitalized costs to obtain a contract relate to incremental costs of obtaining a contract, such as sales commissions, which are eligible for capitalization on contracts to the extent that such costs are expected to be recovered (see Note 3 “Revenues”).
Investments relate to certain investment funds in which we are a limited partner. Our interests in each of these investees range from 4% to below 20%. These investments are accounted for using the equity method. Our share of net income or losses based on our interest in these investments, which approximates fair value and is subject to volatility based on market trends and business conditions, is recorded as a component of Other income (expense), net in our Condensed Consolidated Statements of Income (see Note 22 “Other Income (Expense), Net”). During the three months ended September 30, 2023, our share of income (loss) from these investments was $(9.7) million (three months ended September 30, 2022—$(6.5) million).
Available-for-sale financial assets relate to contractual arrangements under insurance policies held by the Company with guaranteed interest rates that are utilized to meet certain pension and post-retirement obligations but do not meet the definition of a plan asset. The remaining portion of available-for-sale financial assets are primarily comprised of various debt and equity funds, which are valued utilizing market quotes provided by our third-party custodian. These arrangements are treated as available-for-sale financial assets measured at fair value quarterly (see Note 16 “Fair Value Measurement”) with unrealized gains and losses recorded within “Other Comprehensive Income (Loss) Net” (see Note 20 “Accumulated Other Comprehensive Income (Loss)”).
Prepaid expenses and other assets, both short-term and long-term, include advance payments on licenses that are being amortized over the applicable terms of the licenses and other miscellaneous assets.
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NOTE 10—ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
Accounts payable and accrued liabilities:
 
As of September 30, 2023As of June 30, 2023
Accounts payable—trade$138,460 $162,720 
Accrued salaries, incentives and commissions252,975 333,543 
Accrued liabilities222,748 239,817 
Accrued sales and other tax liabilities14,194 25,439 
Derivative liability (1)
127,152 161,191 
Accrued interest on long-term debt52,766 37,563 
Amounts payable in respect of restructuring and other special charges21,818 30,073 
Asset retirement obligations5,929 5,915 
Total$836,042 $996,261 
______________________
(1)Represents the liability related to our derivative instrument activity (see Note 17 “Derivative Instruments and Hedging Activities”).
Long-term accrued liabilities: 
As of September 30, 2023As of June 30, 2023
Amounts payable in respect of restructuring and other special charges$8,534 $8,875 
Other accrued liabilities16,829 17,749 
Asset retirement obligations23,970 25,337 
Total$49,333 $51,961 
Asset retirement obligations
We are required to return certain of our leased facilities to their original state at the conclusion of our lease. As of September 30, 2023, the present value of this obligation was $29.9 million (June 30, 2023—$31.3 million), with an undiscounted value of $33.5 million (June 30, 2023—$35.0 million).
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NOTE 11—LONG-TERM DEBT
As of September 30, 2023As of June 30, 2023
Total debt
Senior Notes 2031$650,000 $650,000 
Senior Notes 2030900,000 900,000 
Senior Notes 2029850,000 850,000 
Senior Notes 2028900,000 900,000 
Senior Secured Notes 20271,000,000 1,000,000 
Term Loan B945,000 947,500 
Acquisition Term Loan3,558,113 3,567,075 
Revolver100,000 275,000 
Total principal payments due8,903,113 9,089,575 
Unamortized debt discount and issuance costs (1)
(202,694)(206,629)
Total amount outstanding8,700,419 8,882,946 
Less:
Current portion of long-term debt
Term Loan B10,000 10,000 
Acquisition Term Loan35,850 35,850 
Revolver100,000 275,000 
Total current portion of long-term debt145,850 320,850 
Non-current portion of long-term debt$8,554,569 $8,562,096 
______________________
(1)During the three months ended September 30, 2023, we recorded $1.6 million of debt issuance costs related to the modification of the Acquisition Term Loan (as defined below).
Senior Unsecured Fixed Rate Notes
Senior Notes 2031
On November 24, 2021, OpenText Holdings, Inc. a wholly-owned indirect subsidiary of the Company, issued $650 million in aggregate principal amount of 4.125% Senior Notes due 2031 guaranteed by the Company (Senior Notes 2031) in an unregistered offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (Securities Act), and to certain non-U.S. persons in offshore transactions pursuant to Regulation S under the Securities Act. Senior Notes 2031 bear interest at a rate of 4.125% per annum, payable semi-annually in arrears on June 1 and December 1, commencing on June 1, 2022. Senior Notes 2031 will mature on December 1, 2031, unless earlier redeemed, in accordance with their terms, or repurchased.
For the three months ended September 30, 2023, we recorded interest expense of $6.7 million relating to Senior Notes 2031 (three months ended September 30, 2022— $6.7 million).
Senior Notes 2030
On February 18, 2020, OpenText Holdings, Inc. a wholly-owned indirect subsidiary of the Company, issued $900 million in aggregate principal amount of 4.125% Senior Notes due 2030 guaranteed by the Company (Senior Notes 2030) in an unregistered offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to certain non-U.S. persons in offshore transactions pursuant to Regulation S under the Securities Act. Senior Notes 2030 bear interest at a rate of 4.125% per annum, payable semi-annually in arrears on February 15 and August 15, commencing on August 15, 2020. Senior Notes 2030 will mature on February 15, 2030, unless earlier redeemed, in accordance with their terms, or repurchased.
For the three months ended September 30, 2023, we recorded interest expense of $9.3 million relating to Senior Notes 2030 (three months ended September 30, 2022—$9.3 million).
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Senior Notes 2029
On November 24, 2021, we issued $850 million in aggregate principal amount of 3.875% Senior Notes due 2029 (Senior Notes 2029) in an unregistered offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to certain non-U.S. persons in offshore transactions pursuant to Regulation S under the Securities Act. Senior Notes 2029 bear interest at a rate of 3.875% per annum, payable semi-annually in arrears on June 1 and December 1, commencing on June 1, 2022. Senior Notes 2029 will mature on December 1, 2029, unless earlier redeemed, in accordance with their terms, or repurchased.
For the three months ended September 30, 2023, we recorded interest expense of $8.2 million relating to Senior Notes 2029 (three months ended September 30, 2022—$8.2 million).
Senior Notes 2028
On February 18, 2020, we issued $900 million in aggregate principal amount of 3.875% Senior Notes due 2028 (Senior Notes 2028, and together with the Senior Notes 2031, Senior Notes 2030, Senior Notes 2029 and Senior Notes 2027, the Senior Notes) in an unregistered offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to certain non-U.S. persons in offshore transactions pursuant to Regulation S under the Securities Act. Senior Notes 2028 bear interest at a rate of 3.875% per annum, payable semi-annually in arrears on February 15 and August 15, commencing on August 15, 2020. Senior Notes 2028 will mature on February 15, 2028, unless earlier redeemed, in accordance with their terms, or repurchased.
For the three months ended September 30, 2023, we recorded interest expense of $8.7 million relating to Senior Notes 2028 (three months ended September 30, 2022—$8.7 million).
Senior Secured Fixed Rate Notes
Senior Secured Notes 2027
On December 1, 2022, we issued $1 billion in aggregate principal amount of Senior Secured Notes 2027 in connection with the financing of the Micro Focus Acquisition in an unregistered offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to certain non-U.S. persons in offshore transactions pursuant to Regulation S under the Securities Act. Senior Secured Notes 2027 bear interest at a rate of 6.90% per annum, payable semi-annually in arrears on June 1 and December 1, commencing on June 1, 2023. Senior Secured Notes 2027 will mature on December 1, 2027, unless earlier redeemed, in accordance with their terms, or repurchased.
The Senior Secured Notes 2027 are guaranteed on a senior secured basis by certain of the Company’s subsidiaries, and are secured with the same priority as the Company’s senior credit facilities. The Senior Secured Notes 2027 and the related guarantees are effectively senior to all of the Company’s and the guarantors’ senior unsecured debt to the extent of the value of the collateral (as defined in the indenture to the Senior Secured Notes 2027) and are structurally subordinated to all existing and future liabilities of each of the Company’s existing and future subsidiaries that do not guarantee the Senior Secured Notes 2027. As of September 30, 2023, the Senior Secured Notes 2027 bear an effective interest rate of 7.39%. The effective interest rate includes interest expense of $17.3 million and amortization of debt discount and issuance costs of $0.6 million.
For the three months ended September 30, 2023, we recorded interest expense of $17.3 million relating to Senior Secured Notes 2027 (three months ended September 30, 2022—nil).
Term Loan B
On May 30, 2018, we refinanced our existing term loan facility, by entering into a new $1 billion term loan facility (Term Loan B), whereby we borrowed $1 billion on that day and repaid in full the loans under our prior $800 million term loan facility originally entered into on January 16, 2014. Borrowings under Term Loan B are secured by a first charge over substantially all of our assets on a pari passu basis with the Revolver (as defined below), Acquisition Term Loan and Senior Secured Notes 2027. On June 6, 2023, we amended the Term Loan B to replace the LIBOR benchmark rate applicable to borrowings under Term Loan B with a Secured Overnight Financing Rate (SOFR) benchmark rate.
Term Loan B has a seven-year term, maturing in May 2025, and repayments made under Term Loan B are equal to 0.25% of the principal amount in equal quarterly installments for the life of Term Loan B, with the remainder due at maturity. Borrowings under Term Loan B currently bear a floating rate of interest equal to Adjusted Term SOFR (as defined in the Term Loan B) and applicable margin of 1.75%. As of September 30, 2023, the outstanding balance on the Term Loan B bears an interest rate of 7.18%. As of September 30, 2023, the Term Loan B bears an effective interest rate of 7.48%. The effective interest rate includes interest expense of $17.2 million and amortization of debt discount and issuance costs of $0.4 million.
Under Term Loan B, we must maintain a “consolidated net leverage” ratio of no more than 4.00:1.00 at the end of each financial quarter. Consolidated net leverage ratio is defined for this purpose as the proportion of our total debt reduced by unrestricted cash, including guarantees and letters of credit, over our trailing twelve months net income before interest, taxes,
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depreciation, amortization, restructuring, share-based compensation and other miscellaneous charges. As of September 30, 2023, our consolidated net leverage ratio, as calculated in accordance with the applicable agreement, was 3.64:1.00.
For the three months ended September 30, 2023, we recorded interest expense of $17.2 million relating to Term Loan B (three months ended September 30, 2022—$9.7 million).
Revolver
On October 31, 2019, we amended our committed revolving credit facility (the Revolver) to increase the total commitments under the Revolver from $450 million to $750 million as well as to extend the maturity from May 5, 2022 to October 31, 2024. Borrowings under the Revolver are secured by a first charge over substantially all of our assets, on a pari passu basis with Term Loan B, the Acquisition Term Loan and Senior Secured Notes 2027. On June 6, 2023, we entered into an amendment to replace the LIBOR benchmark rate applicable to borrowings under the Revolver with a SOFR benchmark rate.
The Revolver has no fixed repayment date prior to the end of the term. Borrowings under the Revolver bear interest per annum at a floating rate of interest equal to Adjusted Term SOFR (as defined in the Revolver) and a fixed margin dependent on our consolidated net leverage ratio ranging from 1.25% to 1.75%. As of September 30, 2023, the outstanding balance on the Revolver bears an interest rate of 7.18%.
As of September 30, 2023, we had a $100 million outstanding balance under the Revolver (June 30, 2023—$275 million). For the three months ended September 30, 2023, we recorded interest expense of $2.0 million relating to the Revolver (three months ended September 30, 2022—nil). In October 2023, the Company repaid the $100 million outstanding balance drawn under the Revolver.
Acquisition Term Loan
On December 1, 2022, we amended our first lien term loan facility (the Acquisition Term Loan), dated as of August 25, 2022, to increase the aggregate commitments under the senior secured delayed-draw term loan facility from an aggregate principal amount of $2.585 billion to an aggregate principal amount of $3.585 billion. During the third quarter of Fiscal 2023, the Company drew down $3.585 billion from the Acquisition Term Loan, net of original issuance discount of 3% and other fees (see Note 19 “Acquisitions” for more details). On August 14, 2023, we amended the Acquisition Term Loan, to reduce the applicable interest rate margin by 0.75% over the remaining term of the Acquisition Term Loan. The reduction in interest rate margin on the Acquisition Term Loan resulting from the amendment was accounted for by the Company as a debt modification.
The Acquisition Term Loan has a seven-year term from the date of funding, and repayments under the Acquisition Term Loan are equal to 0.25% of the principal amount in equal quarterly installments for the life of the Acquisition Term Loan, with the remainder due at maturity. Borrowings under the Acquisition Term Loan currently bear a floating rate of interest equal to 2.75% plus Adjusted Term SOFR (as defined in the Acquisition Term Loan). As of September 30, 2023, the outstanding balance on the Acquisition Term Loan bears an interest rate of 8.18%. As of September 30, 2023, the Acquisition Term Loan bears an effective interest rate of 9.27%. The effective interest rate includes interest expense of $77.2 million and amortization of debt discount and issuance costs of $3.3 million.
The Acquisition Term Loan has incremental facility capacity of (i) $250 million plus (ii) additional amounts, subject to meeting a “consolidated senior secured net leverage” ratio not exceeding 2.75:1.00, in each case subject to certain conditions. Consolidated senior secured net leverage ratio is defined for this purpose as the proportion of the Company’s total debt reduced by unrestricted cash, including guarantees and letters of credit, that is secured by the Company’s or any of the Company’s subsidiaries’ assets, over the Company’s trailing four financial quarter net income before interest, taxes, depreciation, amortization, restructuring, share-based compensation and other miscellaneous charges. Under the Acquisition Term Loan, we must maintain a “consolidated net leverage” ratio of no more than 4.50:1.00 at the end of each financial quarter. Consolidated net leverage ratio is defined for this purpose as the proportion of the Company’s total debt reduced by unrestricted cash, including guarantees and letters of credit, over the Company’s trailing four financial quarter net income before interest, taxes, depreciation, amortization, restructuring, share-based compensation and other miscellaneous charges as defined in the Acquisition Term Loan. As of September 30, 2023, our consolidated net leverage ratio, as calculated in accordance with the applicable agreement, was 3.64:1:00.
The Acquisition Term Loan is unconditionally guaranteed by certain subsidiary guarantors, as defined in the Acquisition Term Loan, and is secured by a first charge on substantially all of the assets of the Company and the subsidiary guarantors on a pari passu basis with the Revolver, Term Loan B and the Senior Secured Notes 2027.
For the three months ended September 30, 2023, we recorded interest expense of $77.2 million relating to the Acquisition Term Loan (three months ended September 30, 2022—nil). In October 2023, the Company repaid $75 million drawn under the Acquisition Term Loan.
21
Bridge Loan
On August 25, 2022, we entered into a bridge loan agreement (Bridge Loan) which provided for commitments of up to $2.0 billion to finance a portion of the repayment of Micro Focus’ existing debt. On December 1, 2022, we entered into an amendment to the Bridge Loan that reallocated commitments under the Bridge Loan to the Acquisition Term Loan. In connection with the amendment to the Bridge Loan and the receipt of proceeds from the issuance of the Senior Secured Notes 2027, all remaining commitments under the Bridge Loan were reduced to zero and the Bridge Loan was terminated, which resulted in a loss on debt extinguishment of $8.2 million relating to unamortized debt issuance costs in the second quarter of Fiscal 2023.
For the three months ended September 30, 2023, we did not have any borrowings or record any interest expense relating to the Bridge Loan (three months ended September 30, 2022—nil).
Debt Issuance Costs
Debt issuance costs relate primarily to costs incurred for the purpose of obtaining or amending our credit facilities and issuing our Senior Notes and are being amortized through interest expense over the respective terms of the Senior Notes, Senior Secured Notes, Term Loan B, and Acquisition Term Loan using the effective interest method and straight-line method for the Revolver.
NOTE 12—PENSION PLANS AND OTHER POST-RETIREMENT BENEFITS
Defined Benefit and Other Post-Retirement Benefit Plans
The Company has 52 pension and other post-retirement plans in multiple countries. All of our pension and other post-retirement plans are located outside of Canada and the United States. The plans are primarily located in Germany, which as of September 30, 2023, make up approximately 63% of the total net benefit pension obligations.
Our defined benefit pension plans include a mix of final salary type plans which provide for retirement, old age, disability and survivor’s benefits. Final salary pension plans provide benefits to members either in the form of a lump sum payment or a guaranteed level of pension payable for life in the case of retirement, disability and death. Benefits under our final salary type plans are generally based on the participant’s age, compensation and years of service as well as the social security ceiling and other factors. Many of these plans are closed to new members. The net periodic costs of these plans are determined using the projected unit credit method and several actuarial assumptions, the most significant of which are the discount rate and estimated service costs.
Other post-retirement plans include statutory plans that offer termination, indemnity or other end of service benefits. Many of these plans were assumed through our acquisitions or are required by local regulatory and statutory requirements. All of our defined benefit and other post-retirement plans are included in the aggregate projected benefit obligation within “Pension liability” on our Condensed Consolidated Balance Sheets.
The following are details of net pension expense relating to the defined benefit pension plans:
 Three Months Ended September 30,
 20232022
Pension expense:
Service cost$2,725 $1,059 
Interest cost3,089 970 
Expected return of plan assets(2,808)(403)
Amortization of actuarial (gains) losses 165 63 
Net pension expense$3,171 $1,689 
Service-related net periodic pension costs are recorded within operating expense and all other non-service related net periodic pension costs are classified under “Interest and other related expense, net” on our Condensed Consolidated Statements of Income.
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NOTE 13—SHARE CAPITAL, OPTION PLANS AND SHARE-BASED PAYMENTS
Cash Dividends
For the three months ended September 30, 2023, pursuant to the Company’s dividend policy, we declared total non-cumulative dividends of $0.25 per Common Share in the aggregate amount of $67.0 million which we paid during the same period (three months ended September 30, 2022—$0.24299 per Common Share in the aggregate amount of $64.7 million).
Share Capital
Our authorized share capital includes an unlimited number of Common Shares and an unlimited number of Preference Shares. No Preference Shares have been issued.
Treasury Stock
From time to time we may provide funds to an independent agent to facilitate repurchases of our Common Shares in connection with the settlement of awards under the Long-Term Incentive Plans (LTIP) or other plans.
During the three months ended September 30, 2023, 1,400,000 Common Shares were purchased on the open market at a cost of $53.1 million and held under trust for potential settlement of awards under our LTIP or other plans as described below (three months ended September 30, 2022—no Common Shares were purchased).
During the three months ended September 30, 2023, we delivered to eligible participants 183,313 Common Shares that were purchased in the open market in connection with the settlement of awards and other plans (three months ended September 30, 2022—120,406 Common Shares).
Share Repurchase Plan
On November 4, 2021, the Board authorized a share repurchase plan (Fiscal 2022 Repurchase Plan), pursuant to which we may purchase in open market transactions, from time to time over the 12-month period commencing November 12, 2021, up to an aggregate of $350 million of our Common Shares. During the three months ended September 30, 2023 and 2022, we did not repurchase and cancel any Common Shares.
Share-Based Payments
Share-based compensation expense for the periods indicated below is detailed as follows: 
 Three Months Ended September 30,
 20232022
Stock Options (issued under Stock Option Plans)$4,544 $3,585 
Performance Share Units (issued under LTIP)5,889 4,235 
Restricted Share Units (issued under LTIP)2,881 2,175 
Restricted Share Units (other)21,372 10,637 
Deferred Share Units (directors)914 961 
Employee Stock Purchase Plan1,495 1,615 
Total share-based compensation expense$37,095 $23,208 

A summary of unrecognized compensation cost for unvested shared-based payment awards is as follows: 
 As of September 30, 2023
 Unrecognized Compensation CostWeighted Average Recognition Period (years)
Stock Options (issued under Stock Option Plans)$48,754 2.6
Performance Share Units (issued under LTIP)56,484 2.5
Restricted Share Units (issued under LTIP)27,139 2.4
Restricted Share Units (other)83,793 1.3
Total unrecognized share-based compensation cost$216,170 
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Stock Option Plans
Stock Options
A summary of activity under our stock option plans for the three months ended September 30, 2023 is as follows:
OptionsWeighted-
Average Exercise
Price		Weighted-
Average
Remaining
Contractual Term
(years)
Aggregate Intrinsic Value

Outstanding at June 30, 2023
12,219,439 $38.44 4.68$62,473 
Granted840,610 36.79 
Exercised(84,885)34.08 
Forfeited or expired(221,571)42.39 
Outstanding at September 30, 2023
12,753,593 $38.29 4.60$23,473 
Exercisable at September 30, 2023
4,940,080 $40.16 3.10$2,691 
As of September 30, 2023, 5,331,793 options to purchase Common Shares were available for issuance under our stock option plans.
We estimate the fair value of stock options using the Black-Scholes option-pricing model or, where appropriate, the Monte Carlo pricing model, consistent with the provisions of ASC Topic 718, “Compensation—Stock Compensation” (Topic 718) and SEC Staff Accounting Bulletin No. 107. The option-pricing models require input of subjective assumptions, including the estimated life of the option and the expected volatility of the underlying stock over the estimated life of the option. We use historical volatility as a basis for projecting the expected volatility of the underlying stock and estimate the expected life of our stock options based upon historical data.
We believe that the valuation techniques and the approach utilized to develop the underlying assumptions are appropriate in calculating the fair value of our stock option grants. Estimates of fair value are not intended, however, to predict actual future events or the value ultimately realized by employees who receive equity awards.
For the periods indicated, the weighted-average fair value of options and weighted-average assumptions estimated under the Black-Scholes option-pricing model were as follows:
 Three Months Ended September 30,
 20232022
Weighted–average fair value of options granted$9.16 $8.16 
Weighted-average assumptions used:
Expected volatility30.93 %27.46 %
Risk–free interest rate4.44 %2.86 %
Expected dividend yield2.66 %2.32 %
Expected life (in years)4.244.18
Forfeiture rate (based on historical rates)7 %7 %
Average exercise share price$36.79 $39.09 
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Performance Options
During the three months ended September 30, 2023, we did not grant performance options (during the three months ended September 30, 2022—1,000,000).
For the period in which performance options were granted, the weighted-average fair value of performance options and weighted-average assumptions estimated under the Monte Carlo pricing model were as follows:
 Three Months Ended September 30,
 2022
Weighted–average fair value of options granted$8.09 
Derived service period (in years)1.70
Weighted-average assumptions used:
Expected volatility26.00 %
Risk–free interest rate3.21 %
Expected dividend yield2.00 %
Average exercise share price$31.89 
Long-Term Incentive Plans
We incentivize certain eligible employees, in part, with long-term compensation pursuant to our LTIP. The LTIP is a rolling three-year program that grants eligible employees a certain number of target Performance Share Units (PSUs) and/or Restricted Share Units (RSUs). Target PSUs become vested upon the achievement of certain financial and/or operational performance criteria (the Performance Conditions) that are determined at the time of the grant. The Performance Conditions for vesting of the PSUs are based solely upon market conditions. The RSUs are employee service-based awards and vest subject to an eligible employee’s continued employment throughout the applicable vesting period.
PSUs and RSUs granted under the LTIP have been measured at fair value as of the effective date, consistent with ASC Topic 718, and will be charged to share-based compensation expense over the remaining life of the plan. We estimate the fair value of PSUs using the Monte Carlo pricing model and RSUs have been valued based upon their grant date fair value. Beginning in Fiscal 2023, certain PSU and RSU grants were eligible to receive dividend equivalent units that vest under the same conditions as the underlying grants.
Performance Share Units (Issued Under LTIP)
A summary of activity under our performance share units issued under the LTIP for the three months ended September 30, 2023 is as follows:
UnitsWeighted-Average
Grant Date Fair Value		Weighted-
Average
Remaining
Contractual Term
(years)		Aggregate Intrinsic Value
($’000's)
Outstanding at June 30, 2023
1,013,385 $61.64 1.75$42,106 
Granted (1)
612,432 59.22 
Vested — — 
Forfeited or expired(24,049)61.69 
Outstanding at September 30, 2023
1,601,768 $60.76 2.16$56,222 
__________________________
(1)PSUs are earned based on market conditions and the actual number of PSUs earned, if any, is dependent upon performance and may range from 0 to 200 percent.
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For the periods indicated, the weighted-average fair value of PSUs issued under LTIP, and weighted-average assumptions estimated under the Monte Carlo pricing model were as follows:
 Three Months Ended September 30,
 20232022
Weighted–average fair value of performance share units granted$59.48 $55.06 
Weighted-average assumptions used:
Expected volatility28.05 %29.00 %
Risk–free interest rate4.38 %3.13 %
Expected dividend yield— %— %
Expected life (in years)3.113.11
Restricted Share Units (Issued Under LTIP)
A summary of activity under our RSUs issued under the LTIP for the three months ended September 30, 2023 is as follows:
UnitsWeighted-Average
Grant Date Fair Value		Weighted-
Average
Remaining
Contractual Term
(years)		Aggregate Intrinsic Value
($’000's)
Outstanding at June 30, 2023
774,360 $42.83 1.68$32,175 
Granted466,454 36.80 
Vested— — 
Forfeited or expired(24,049)41.83 
Outstanding at September 30, 2023
1,216,765 $40.55 2.11$42,708 
Restricted Share Units (Other)
In addition to the grants made in connection with the LTIP discussed above, from time to time, we may grant RSUs to certain employees in accordance with employment and other non-LTIP related agreements. RSUs (other) vest over a specified contract date, typically two or three years from the respective date of grants.
A summary of activity under our RSUs (other) issued for the three months ended September 30, 2023 is as follows:
UnitsWeighted-Average
Grant Date Fair Value		Weighted-
Average
Remaining
Contractual Term
(years)		Aggregate Intrinsic Value
($’000's)
Outstanding at June 30, 2023
5,310,595 $