I am uncertain how to factor this expression correctly.

The greatest common factor is

However, I am not seeing how the author picks the 2nd power when factoring out from the rest of the expression. I was under the impression that when factoring out powers of a variable, the

*smallest* power that appears in any on term is the most that can be factored out.

In this example I am not seeing how

is the smallest power that appears in the terms if someone could please clarify. Specifically why "xy" is raised to the 2nd power for the lowest.