Tech Data

2008
ANNUAL R E P O R T

Year Ended January 31, 2008

IT depends on us.

Every day

Tech Data—

A strategic link in the information technology (IT) ecosystem

Vendor Partners

Hundreds of the world’s 

leading producers of IT 

hardware and software

W
are

a conduit through which the power of 

technology flows to the world—a single 

point of purchase for thousands of IT products 

from hundreds of hardware and software 

vendor partners. 

(cid:52)(cid:69)(cid:67)(cid:72)(cid:0)(cid:36)(cid:65)(cid:84)(cid:65)(cid:0)(cid:35)(cid:79)(cid:82)(cid:80)(cid:79)(cid:82)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)

1

Tech Data

Resellers

End Users

(cid:48)(cid:79)(cid:87)(cid:69)(cid:82)(cid:70)(cid:85)(cid:76)(cid:0)(cid:76)(cid:79)(cid:71)(cid:73)(cid:83)(cid:84)(cid:73)(cid:67)(cid:83)(cid:0)(cid:69)(cid:78)(cid:71)(cid:73)(cid:78)(cid:69)

(cid:55)(cid:79)(cid:82)(cid:76)(cid:68)(cid:13)(cid:67)(cid:76)(cid:65)(cid:83)(cid:83)(cid:0)(cid:83)(cid:65)(cid:76)(cid:69)(cid:83)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:77)(cid:65)(cid:82)(cid:75)(cid:69)(cid:84)(cid:73)(cid:78)(cid:71)

(cid:52)(cid:69)(cid:67)(cid:72)(cid:78)(cid:73)(cid:67)(cid:65)(cid:76)(cid:0)(cid:80)(cid:82)(cid:79)(cid:70)(cid:73)(cid:67)(cid:73)(cid:69)(cid:78)(cid:67)(cid:89)
Credit services 

Over 100,000 customers served

Value-added resellers (VARs)

(cid:36)(cid:73)(cid:82)(cid:69)(cid:67)(cid:84)(cid:0)(cid:77)(cid:65)(cid:82)(cid:75)(cid:69)(cid:84)(cid:69)(cid:82)(cid:83)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:82)(cid:69)(cid:84)(cid:65)(cid:73)(cid:76)(cid:69)(cid:82)(cid:83)
Corporate resellers

(cid:4)(cid:17)(cid:0)(cid:84)(cid:82)(cid:73)(cid:76)(cid:76)(cid:73)(cid:79)(cid:78)(cid:0)(cid:41)(cid:52)(cid:0)(cid:77)(cid:65)(cid:82)(cid:75)(cid:69)(cid:84)(cid:0)(cid:87)(cid:79)(cid:82)(cid:76)(cid:68)(cid:87)(cid:73)(cid:68)(cid:69)

Small and medium business (SMB)

Consumer

Enterprise

Purpose

IT depends on us

Mission

To be the IT distributor of choice

Strategic Objectives

(cid:37)(cid:88)(cid:69)(cid:67)(cid:85)(cid:84)(cid:69)(cid:0)(cid:115)(cid:0)(cid:36)(cid:73)(cid:86)(cid:69)(cid:82)(cid:83)(cid:73)(cid:70)(cid:89)(cid:0)(cid:115)(cid:0)(cid:41)(cid:78)(cid:78)(cid:79)(cid:86)(cid:65)(cid:84)(cid:69)

2

(cid:33)(cid:82)(cid:77)(cid:69)(cid:68)(cid:0)(cid:87)(cid:73)(cid:84)(cid:72)(cid:0)(cid:79)(cid:85)(cid:82) strategic building blocks
focused on execution, diversification and 

innovation, (cid:87)(cid:69)(cid:0)(cid:66)(cid:69)(cid:71)(cid:65)(cid:78)(cid:0)(cid:70)(cid:73)(cid:83)(cid:67)(cid:65)(cid:76)(cid:0)(cid:18)(cid:16)(cid:16)(cid:24)(cid:0)(cid:87)(cid:73)(cid:84)(cid:72)(cid:0)(cid:65)(cid:0)(cid:82)(cid:69)(cid:78)(cid:69)(cid:87)(cid:69)(cid:68)(cid:0)

(cid:69)(cid:78)(cid:69)(cid:82)(cid:71)(cid:89)(cid:12)(cid:0)(cid:83)(cid:69)(cid:84)(cid:84)(cid:73)(cid:78)(cid:71)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:83)(cid:84)(cid:65)(cid:71)(cid:69)(cid:0)(cid:70)(cid:79)(cid:82)(cid:0)(cid:71)(cid:82)(cid:79)(cid:87)(cid:84)(cid:72)(cid:12)(cid:0)(cid:73)(cid:77)(cid:80)(cid:82)(cid:79)(cid:86)(cid:69)(cid:68)(cid:0)

(cid:80)(cid:82)(cid:79)(cid:70)(cid:73)(cid:84)(cid:65)(cid:66)(cid:73)(cid:76)(cid:73)(cid:84)(cid:89)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:65)(cid:0)(cid:83)(cid:84)(cid:82)(cid:79)(cid:78)(cid:71)(cid:69)(cid:82)(cid:0)(cid:77)(cid:65)(cid:82)(cid:75)(cid:69)(cid:84)(cid:0)(cid:80)(cid:79)(cid:83)(cid:73)(cid:84)(cid:73)(cid:79)(cid:78)(cid:14)

(cid:36)(cid:69)(cid:65)(cid:82)(cid:0)(cid:38)(cid:69)(cid:76)(cid:76)(cid:79)(cid:87)(cid:0)(cid:51)(cid:72)(cid:65)(cid:82)(cid:69)(cid:72)(cid:79)(cid:76)(cid:68)(cid:69)(cid:82)(cid:83)(cid:12)

(cid:41)(cid:52)(cid:0)(cid:68)(cid:69)(cid:80)(cid:69)(cid:78)(cid:68)(cid:83)(cid:0)(cid:79)(cid:78)(cid:0)(cid:85)(cid:83)(cid:14)(cid:0)

Fiscal 2008 financial performance 

(cid:55)(cid:69)(cid:0)(cid:83)(cid:84)(cid:65)(cid:82)(cid:84)(cid:0)(cid:69)(cid:86)(cid:69)(cid:82)(cid:89)(cid:0)(cid:68)(cid:65)(cid:89)(cid:0)(cid:87)(cid:73)(cid:84)(cid:72)(cid:0)(cid:84)(cid:72)(cid:73)(cid:83)(cid:0)(cid:83)(cid:73)(cid:77)(cid:80)(cid:76)(cid:69)(cid:12)(cid:0)(cid:66)(cid:85)(cid:84)(cid:0)

(cid:0)(cid:83)(cid:73)(cid:71)(cid:78)(cid:73)(cid:70)(cid:73)(cid:67)(cid:65)(cid:78)(cid:84)(cid:0)(cid:84)(cid:69)(cid:78)(cid:69)(cid:84)(cid:0)(cid:73)(cid:78)(cid:0)(cid:77)(cid:73)(cid:78)(cid:68)(cid:14)(cid:0)(cid:52)(cid:69)(cid:67)(cid:72)(cid:0)(cid:36)(cid:65)(cid:84)(cid:65)(cid:0)(cid:80)(cid:82)(cid:79)(cid:86)(cid:73)(cid:68)(cid:69)(cid:83)(cid:0)

(cid:65)(cid:0)(cid:83)(cid:84)(cid:82)(cid:65)(cid:84)(cid:69)(cid:71)(cid:73)(cid:67)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:86)(cid:65)(cid:76)(cid:85)(cid:65)(cid:66)(cid:76)(cid:69)(cid:0)(cid:76)(cid:73)(cid:78)(cid:75)(cid:0)(cid:73)(cid:78)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:41)(cid:52)(cid:0)(cid:69)(cid:67)(cid:79)(cid:83)(cid:89)(cid:83)-

(cid:84)(cid:69)(cid:77)(cid:12)(cid:0)(cid:67)(cid:79)(cid:78)(cid:78)(cid:69)(cid:67)(cid:84)(cid:73)(cid:78)(cid:71)(cid:0)(cid:79)(cid:85)(cid:82)(cid:0)(cid:86)(cid:69)(cid:78)(cid:68)(cid:79)(cid:82)(cid:0)(cid:80)(cid:65)(cid:82)(cid:84)(cid:78)(cid:69)(cid:82)(cid:83)(cid:0)(cid:87)(cid:73)(cid:84)(cid:72)(cid:0)

(cid:84)(cid:69)(cid:67)(cid:72)(cid:78)(cid:79)(cid:76)(cid:79)(cid:71)(cid:89)(cid:0)(cid:85)(cid:83)(cid:69)(cid:82)(cid:83)(cid:0)(cid:65)(cid:82)(cid:79)(cid:85)(cid:78)(cid:68)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:87)(cid:79)(cid:82)(cid:76)(cid:68)(cid:0)(cid:84)(cid:72)(cid:82)(cid:79)(cid:85)(cid:71)(cid:72)(cid:0)

(cid:79)(cid:85)(cid:82)(cid:0)(cid:82)(cid:69)(cid:83)(cid:69)(cid:76)(cid:76)(cid:69)(cid:82)(cid:83)(cid:14)(cid:0)(cid:33)(cid:82)(cid:77)(cid:69)(cid:68)(cid:0)(cid:87)(cid:73)(cid:84)(cid:72)(cid:0)(cid:79)(cid:85)(cid:82)(cid:0)(cid:83)(cid:84)(cid:82)(cid:65)(cid:84)(cid:69)(cid:71)(cid:73)(cid:67)(cid:0)(cid:66)(cid:85)(cid:73)(cid:76)(cid:68)(cid:73)(cid:78)(cid:71)(cid:0)

(cid:66)(cid:76)(cid:79)(cid:67)(cid:75)(cid:83)(cid:0)(cid:70)(cid:79)(cid:67)(cid:85)(cid:83)(cid:69)(cid:68)(cid:0)(cid:79)(cid:78)(cid:0)(cid:69)(cid:88)(cid:69)(cid:67)(cid:85)(cid:84)(cid:73)(cid:79)(cid:78)(cid:12)(cid:0)(cid:68)(cid:73)(cid:86)(cid:69)(cid:82)(cid:83)(cid:73)(cid:70)(cid:73)(cid:67)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)

(cid:65)(cid:78)(cid:68)(cid:0)(cid:73)(cid:78)(cid:78)(cid:79)(cid:86)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:12)(cid:0)(cid:87)(cid:69)(cid:0)(cid:66)(cid:69)(cid:71)(cid:65)(cid:78)(cid:0)(cid:70)(cid:73)(cid:83)(cid:67)(cid:65)(cid:76)(cid:0)(cid:18)(cid:16)(cid:16)(cid:24)(cid:0)(cid:87)(cid:73)(cid:84)(cid:72)(cid:0)(cid:65)(cid:0)

(cid:82)(cid:69)(cid:78)(cid:69)(cid:87)(cid:69)(cid:68)(cid:0)(cid:69)(cid:78)(cid:69)(cid:82)(cid:71)(cid:89)(cid:12)(cid:0)(cid:83)(cid:69)(cid:84)(cid:84)(cid:73)(cid:78)(cid:71)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:83)(cid:84)(cid:65)(cid:71)(cid:69)(cid:0)(cid:70)(cid:79)(cid:82)(cid:0)(cid:71)(cid:82)(cid:79)(cid:87)(cid:84)(cid:72)(cid:12)(cid:0)

(cid:73)(cid:77)(cid:80)(cid:82)(cid:79)(cid:86)(cid:69)(cid:68)(cid:0)(cid:80)(cid:82)(cid:79)(cid:70)(cid:73)(cid:84)(cid:65)(cid:66)(cid:73)(cid:76)(cid:73)(cid:84)(cid:89)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:65)(cid:0)(cid:83)(cid:84)(cid:82)(cid:79)(cid:78)(cid:71)(cid:69)(cid:82)(cid:0)(cid:77)(cid:65)(cid:82)(cid:75)(cid:69)(cid:84)(cid:0)

(cid:80)(cid:79)(cid:83)(cid:73)(cid:84)(cid:73)(cid:79)(cid:78)(cid:14)(cid:0)(cid:47)(cid:85)(cid:82)(cid:0)(cid:82)(cid:69)(cid:83)(cid:85)(cid:76)(cid:84)(cid:83)(cid:0)(cid:86)(cid:65)(cid:76)(cid:73)(cid:68)(cid:65)(cid:84)(cid:69)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:69)(cid:70)(cid:70)(cid:69)(cid:67)(cid:84)(cid:73)(cid:86)(cid:69)(cid:78)(cid:69)(cid:83)(cid:83)(cid:0)

(cid:79)(cid:70)(cid:0)(cid:79)(cid:85)(cid:82)(cid:0)(cid:69)(cid:70)(cid:70)(cid:79)(cid:82)(cid:84)(cid:83)(cid:14)(cid:0)(cid:41)(cid:78)(cid:0)(cid:77)(cid:89)(cid:0)(cid:77)(cid:69)(cid:83)(cid:83)(cid:65)(cid:71)(cid:69)(cid:0)(cid:84)(cid:79)(cid:0)(cid:89)(cid:79)(cid:85)(cid:12)(cid:0)(cid:41)(cid:0)(cid:87)(cid:73)(cid:76)(cid:76)(cid:0)

highlight recent customer solutions that 

(cid:0)(cid:68)(cid:69)(cid:77)(cid:79)(cid:78)(cid:83)(cid:84)(cid:82)(cid:65)(cid:84)(cid:69)(cid:0)(cid:72)(cid:79)(cid:87)(cid:0)(cid:79)(cid:85)(cid:82)(cid:0)(cid:83)(cid:84)(cid:82)(cid:65)(cid:84)(cid:69)(cid:71)(cid:73)(cid:67)(cid:0)(cid:79)(cid:66)(cid:74)(cid:69)(cid:67)(cid:84)(cid:73)(cid:86)(cid:69)(cid:83)(cid:0)(cid:65)(cid:82)(cid:69)(cid:0)

driving our success and the success of our 

(cid:67)(cid:85)(cid:83)(cid:84)(cid:79)(cid:77)(cid:69)(cid:82)(cid:83)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:86)(cid:69)(cid:78)(cid:68)(cid:79)(cid:82)(cid:0)(cid:80)(cid:65)(cid:82)(cid:84)(cid:78)(cid:69)(cid:82)(cid:83)(cid:14)

2008

(cid:18)(cid:16)(cid:16)(cid:23)

(cid:18)(cid:16)(cid:16)(cid:22)

$23,423

(cid:4)(cid:0)(cid:18)(cid:17)(cid:12)(cid:20)(cid:20)(cid:16)(cid:0)

(cid:4)(cid:0)(cid:18)(cid:16)(cid:12)(cid:20)(cid:24)(cid:19)(cid:0)

$

$

$

$

$

$

188

219

(cid:4)(cid:0)

(cid:4)(cid:0)

(cid:8)(cid:20))

(cid:17)(cid:22)(cid:20)(cid:0)

1.96

(cid:4)(cid:0)

(cid:8)(cid:17)(cid:14)(cid:23)(cid:22))

(cid:4)(cid:0)

(cid:4)(cid:0)

(cid:4)(cid:0)

(cid:17)(cid:22)(cid:19)(cid:0)

(cid:18)(cid:16)(cid:20)(cid:0)

(cid:14)(cid:20)(cid:21)(cid:0)

2.51

(cid:4)(cid:0) (cid:17)(cid:14)(cid:20)(cid:16)(cid:0)

(cid:4)(cid:0) (cid:18)(cid:14)(cid:16)(cid:24)(cid:0)

28

447

383

(cid:19)(cid:16)

(cid:18)(cid:22)(cid:21)(cid:0)

(cid:20)(cid:20)(cid:19)(cid:0)

(cid:18)(cid:25)

(cid:17)(cid:21)(cid:23)(cid:0)

(cid:18)(cid:21)(cid:17)(cid:0)

(cid:4)(cid:0)

(cid:4)(cid:0)

(cid:4)(cid:0)

(cid:4)(cid:0)

validates strategy

(cid:44)(cid:79)(cid:79)(cid:75)(cid:73)(cid:78)(cid:71)(cid:0)(cid:65)(cid:84)(cid:0)(cid:79)(cid:85)(cid:82)(cid:0)(cid:70)(cid:73)(cid:83)(cid:67)(cid:65)(cid:76)(cid:0)(cid:18)(cid:16)(cid:16)(cid:24)(cid:0)(cid:70)(cid:73)(cid:78)(cid:65)(cid:78)(cid:67)(cid:73)(cid:65)(cid:76)(cid:0)(cid:80)(cid:69)(cid:82)(cid:70)(cid:79)(cid:82)-

(cid:77)(cid:65)(cid:78)(cid:67)(cid:69)(cid:12)(cid:0)(cid:87)(cid:69)(cid:0)(cid:65)(cid:67)(cid:72)(cid:73)(cid:69)(cid:86)(cid:69)(cid:68)(cid:0)(cid:77)(cid:65)(cid:82)(cid:75)(cid:69)(cid:68)(cid:0)(cid:73)(cid:77)(cid:80)(cid:82)(cid:79)(cid:86)(cid:69)(cid:77)(cid:69)(cid:78)(cid:84)(cid:0)(cid:79)(cid:86)(cid:69)(cid:82)(cid:0)

(cid:84)(cid:72)(cid:69)(cid:0)(cid:80)(cid:82)(cid:73)(cid:79)(cid:82)(cid:0)(cid:89)(cid:69)(cid:65)(cid:82)(cid:12)(cid:0)(cid:65)(cid:0)(cid:86)(cid:65)(cid:76)(cid:73)(cid:68)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:84)(cid:72)(cid:65)(cid:84)(cid:0)(cid:79)(cid:85)(cid:82)(cid:0)(cid:83)(cid:84)(cid:82)(cid:65)(cid:84)(cid:69)(cid:71)(cid:73)(cid:67)(cid:0)

(cid:79)(cid:66)(cid:74)(cid:69)(cid:67)(cid:84)(cid:73)(cid:86)(cid:69)(cid:83)(cid:0)(cid:65)(cid:82)(cid:69)(cid:0)(cid:68)(cid:69)(cid:76)(cid:73)(cid:86)(cid:69)(cid:82)(cid:73)(cid:78)(cid:71)(cid:0)(cid:82)(cid:69)(cid:83)(cid:85)(cid:76)(cid:84)(cid:83)(cid:14)(cid:0)(cid:46)(cid:69)(cid:84)(cid:0)(cid:83)(cid:65)(cid:76)(cid:69)(cid:83)(cid:0)

(cid:71)(cid:82)(cid:69)(cid:87)(cid:0)(cid:25)(cid:14)(cid:18)(cid:0)(cid:80)(cid:69)(cid:82)(cid:67)(cid:69)(cid:78)(cid:84)(cid:12)(cid:0)(cid:82)(cid:69)(cid:65)(cid:67)(cid:72)(cid:73)(cid:78)(cid:71)(cid:0)(cid:65)(cid:0)(cid:82)(cid:69)(cid:67)(cid:79)(cid:82)(cid:68)(cid:0)(cid:4)(cid:18)(cid:19)(cid:14)(cid:20)(cid:0)

(cid:66)(cid:73)(cid:76)(cid:76)(cid:73)(cid:79)(cid:78)(cid:0)(cid:65)(cid:76)(cid:79)(cid:78)(cid:71)(cid:83)(cid:73)(cid:68)(cid:69)(cid:0)(cid:83)(cid:79)(cid:76)(cid:73)(cid:68)(cid:0)(cid:80)(cid:82)(cid:79)(cid:70)(cid:73)(cid:84)(cid:65)(cid:66)(cid:73)(cid:76)(cid:73)(cid:84)(cid:89)(cid:0)(cid:73)(cid:77)(cid:80)(cid:82)(cid:79)(cid:86)(cid:69)-

(cid:77)(cid:69)(cid:78)(cid:84)(cid:14)(cid:0)(cid:52)(cid:72)(cid:82)(cid:79)(cid:85)(cid:71)(cid:72)(cid:0)(cid:82)(cid:69)(cid:83)(cid:80)(cid:79)(cid:78)(cid:83)(cid:73)(cid:66)(cid:76)(cid:69)(cid:0)(cid:71)(cid:82)(cid:79)(cid:87)(cid:84)(cid:72)(cid:12)(cid:0)(cid:70)(cid:79)(cid:67)(cid:85)(cid:83)(cid:69)(cid:68)(cid:0)

execution and improvements in gross margin 

(cid:77)(cid:65)(cid:78)(cid:65)(cid:71)(cid:69)(cid:77)(cid:69)(cid:78)(cid:84)(cid:12)(cid:0)(cid:87)(cid:69)(cid:0)(cid:65)(cid:67)(cid:72)(cid:73)(cid:69)(cid:86)(cid:69)(cid:68)(cid:0)(cid:78)(cid:69)(cid:84)(cid:0)(cid:73)(cid:78)(cid:67)(cid:79)(cid:77)(cid:69)(cid:0)(cid:79)(cid:78)(cid:0)

(cid:65)(cid:0)(cid:78)(cid:79)(cid:78)(cid:13)(cid:39)(cid:33)(cid:33)(cid:48)(cid:0)(cid:66)(cid:65)(cid:83)(cid:73)(cid:83)(cid:0)(cid:79)(cid:70)(cid:0)(cid:4)(cid:17)(cid:19)(cid:24)(cid:14)(cid:25)(cid:0)(cid:77)(cid:73)(cid:76)(cid:76)(cid:73)(cid:79)(cid:78)(cid:12)(cid:0)(cid:65)(cid:78)(cid:0)(cid:24)(cid:16)(cid:0)

(cid:80)(cid:69)(cid:82)(cid:67)(cid:69)(cid:78)(cid:84)(cid:0)(cid:73)(cid:78)(cid:67)(cid:82)(cid:69)(cid:65)(cid:83)(cid:69)(cid:0)(cid:79)(cid:86)(cid:69)(cid:82)(cid:0)(cid:70)(cid:73)(cid:83)(cid:67)(cid:65)(cid:76)(cid:0)(cid:18)(cid:16)(cid:16)(cid:23)(cid:14)(cid:0)(cid:47)(cid:85)(cid:82)(cid:0)(cid:83)(cid:84)(cid:69)(cid:65)(cid:68)-

fast approach to improving cash management 

metrics and shareholder returns generated 

cash from operations totaling more than 

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Strength in execution

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(cid:79)(cid:85)(cid:82)(cid:0)(cid:79)(cid:80)(cid:69)(cid:82)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:83)(cid:14)(cid:0)(cid:55)(cid:69)(cid:0)(cid:68)(cid:69)(cid:76)(cid:73)(cid:86)(cid:69)(cid:82)(cid:69)(cid:68)(cid:0)(cid:65)(cid:0)(cid:83)(cid:79)(cid:76)(cid:73)(cid:68)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:67)(cid:79)(cid:78)-

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(cid:65)(cid:78)(cid:0)(cid:79)(cid:80)(cid:69)(cid:82)(cid:65)(cid:84)(cid:73)(cid:78)(cid:71)(cid:0)(cid:77)(cid:65)(cid:82)(cid:71)(cid:73)(cid:78)(cid:0)(cid:73)(cid:78)(cid:0)(cid:76)(cid:73)(cid:78)(cid:69)(cid:0)(cid:87)(cid:73)(cid:84)(cid:72)(cid:0)(cid:79)(cid:85)(cid:82)(cid:0)(cid:65)(cid:78)(cid:78)(cid:85)(cid:65)(cid:76)(cid:0)

(cid:84)(cid:65)(cid:82)(cid:71)(cid:69)(cid:84)(cid:12)(cid:0)(cid:87)(cid:72)(cid:73)(cid:76)(cid:69)(cid:0)(cid:73)(cid:78)(cid:86)(cid:69)(cid:83)(cid:84)(cid:73)(cid:78)(cid:71)(cid:0)(cid:73)(cid:78)(cid:0)(cid:69)(cid:77)(cid:69)(cid:82)(cid:71)(cid:73)(cid:78)(cid:71)(cid:0)(cid:84)(cid:69)(cid:67)(cid:72)(cid:78)(cid:79)(cid:76)(cid:79)(cid:71)(cid:89)(cid:0)

(cid:77)(cid:65)(cid:82)(cid:75)(cid:69)(cid:84)(cid:83)(cid:12)(cid:0)(cid:83)(cid:65)(cid:76)(cid:69)(cid:83)(cid:0)(cid:84)(cid:79)(cid:79)(cid:76)(cid:83)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:73)(cid:78)(cid:67)(cid:82)(cid:69)(cid:77)(cid:69)(cid:78)(cid:84)(cid:65)(cid:76)(cid:0)(cid:83)(cid:65)(cid:76)(cid:69)(cid:83)(cid:0)

headcount focused on customers serving 

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$ 1,921

(cid:4)(cid:0) (cid:17)(cid:12)(cid:23)(cid:16)(cid:19)(cid:0)

(cid:4)(cid:0) (cid:17)(cid:12)(cid:23)(cid:22)(cid:16)(cid:0)

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Bob Dutkowsky

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(cid:46)(cid:69)(cid:84)(cid:0)(cid:51)(cid:65)(cid:76)(cid:69)(cid:83)

GAAP operating income (loss)

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GAAP net income (loss) per diluted share

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Cash and cash equivalents

Total debt

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(cid:52)(cid:69)(cid:67)(cid:72)(cid:0)(cid:36)(cid:65)(cid:84)(cid:65)(cid:0)(cid:35)(cid:79)(cid:82)(cid:80)(cid:79)(cid:82)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)

3

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(cid:51)(cid:33)(cid:48)(cid:0)(cid:55)(cid:65)(cid:82)(cid:69)(cid:72)(cid:79)(cid:85)(cid:83)(cid:69)(cid:0)(cid:45)(cid:65)(cid:78)(cid:65)(cid:71)(cid:69)(cid:77)(cid:69)(cid:78)(cid:84)(cid:0)(cid:51)(cid:89)(cid:83)(cid:84)(cid:69)(cid:77)(cid:0)(cid:8)(cid:55)(cid:45)(cid:51)(cid:9)(cid:0)

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(cid:73)(cid:77)(cid:80)(cid:82)(cid:79)(cid:86)(cid:69)(cid:0)(cid:80)(cid:82)(cid:79)(cid:68)(cid:85)(cid:67)(cid:84)(cid:73)(cid:86)(cid:73)(cid:84)(cid:89)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:67)(cid:85)(cid:83)(cid:84)(cid:79)(cid:77)(cid:69)(cid:82)(cid:0)(cid:83)(cid:69)(cid:82)(cid:86)(cid:73)(cid:67)(cid:69)(cid:12)(cid:0)

(cid:65)(cid:78)(cid:68)(cid:0)(cid:80)(cid:82)(cid:69)(cid:80)(cid:65)(cid:82)(cid:69)(cid:0)(cid:52)(cid:69)(cid:67)(cid:72)(cid:0)(cid:36)(cid:65)(cid:84)(cid:65)(cid:0)(cid:70)(cid:79)(cid:82)(cid:0)(cid:67)(cid:79)(cid:78)(cid:84)(cid:73)(cid:78)(cid:85)(cid:69)(cid:68)(cid:0)(cid:71)(cid:82)(cid:79)(cid:87)(cid:84)(cid:72)(cid:14)(cid:0)

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(cid:87)(cid:73)(cid:84)(cid:72)(cid:0)(cid:71)(cid:82)(cid:69)(cid:65)(cid:84)(cid:0)(cid:83)(cid:85)(cid:67)(cid:67)(cid:69)(cid:83)(cid:83)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:65)(cid:82)(cid:69)(cid:0)(cid:65)(cid:80)(cid:80)(cid:76)(cid:89)(cid:73)(cid:78)(cid:71)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:83)(cid:65)(cid:77)(cid:69)(cid:0)

implementation and training processes in 

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(cid:51)(cid:79)(cid:85)(cid:82)(cid:67)(cid:69)(cid:68)(cid:118)(cid:0)(cid:65)(cid:77)(cid:79)(cid:78)(cid:71)(cid:0)(cid:65)(cid:76)(cid:76)(cid:0)(cid:66)(cid:82)(cid:79)(cid:65)(cid:68)(cid:76)(cid:73)(cid:78)(cid:69)(cid:0)(cid:68)(cid:73)(cid:83)(cid:84)(cid:82)(cid:73)(cid:66)(cid:85)(cid:84)(cid:79)(cid:82)(cid:83)(cid:14)(cid:0)

We outperformed peers in several categories 

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expertise and post-sales support—each a 

critical component of our ever-expanding 

(cid:86)(cid:65)(cid:76)(cid:85)(cid:69)(cid:0)(cid:80)(cid:82)(cid:79)(cid:80)(cid:79)(cid:83)(cid:73)(cid:84)(cid:73)(cid:79)(cid:78)(cid:14)

Diversifying our business

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has been instrumental in building a portfolio 

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to a multi-vendor approach and have signed 

a number of leading mobile device vendor 

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further expand our vendor partner relation-

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performing operations in Europe combined 

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income and cash metrics at or above our 

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Over $90 million 
in IT products 
shipped every day.

Net sales

in billions

$23.4

$21.4

$20.5

$19.7

$17.4

‘04 ‘05 ‘06 ‘07 ‘08

4

Execute

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Investing in innovation

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process and provides our sales force the capa-

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e-commerce solution for a hotel chain, LaSalle 

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approach to expanding our coverage model 

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support of our vendor partners and dedicated 

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Moving forward in fiscal 2009

expand our SMB coverage model, but it also 

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strong cash generation, thoughtful balance 

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With one of the strongest balance sheets in 

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poised to further leverage our robust infra-

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business prospects and the strength of our 

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Value proposition drives customer success

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tinue to enhance the value proposition for 

our customers and strengthen our position 

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To our shareholders, customers and vendor 

management team have demonstrated 

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spending and changes in distribution strategies 

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(cid:65)(cid:66)(cid:76)(cid:69)(cid:0)(cid:83)(cid:85)(cid:67)(cid:67)(cid:69)(cid:83)(cid:83)(cid:14)

(cid:36)(cid:85)(cid:82)(cid:73)(cid:78)(cid:71)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:89)(cid:69)(cid:65)(cid:82)(cid:12)(cid:0)(cid:76)(cid:69)(cid:65)(cid:68)(cid:73)(cid:78)(cid:71)(cid:0)(cid:53)(cid:43)(cid:0)(cid:82)(cid:69)(cid:83)(cid:69)(cid:76)(cid:76)(cid:69)(cid:82)(cid:0)(cid:48)(cid:35)(cid:0)(cid:55)(cid:65)(cid:82)(cid:69)(cid:0)

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(cid:73)(cid:78)(cid:0)(cid:65)(cid:0)(cid:87)(cid:79)(cid:82)(cid:76)(cid:68)(cid:0)(cid:84)(cid:72)(cid:65)(cid:84)(cid:0)(cid:73)(cid:83)(cid:0)(cid:68)(cid:69)(cid:77)(cid:65)(cid:78)(cid:68)(cid:73)(cid:78)(cid:71)(cid:0)(cid:71)(cid:82)(cid:69)(cid:65)(cid:84)(cid:69)(cid:82)(cid:0)(cid:69)(cid:70)(cid:70)(cid:73)(cid:67)(cid:73)(cid:69)(cid:78)(cid:67)(cid:89)(cid:12)(cid:0)

development of a state-of-the-art data center 

(cid:66)(cid:69)(cid:84)(cid:84)(cid:69)(cid:82)(cid:0)(cid:83)(cid:69)(cid:67)(cid:85)(cid:82)(cid:73)(cid:84)(cid:89)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:69)(cid:86)(cid:69)(cid:82)(cid:13)(cid:69)(cid:88)(cid:80)(cid:65)(cid:78)(cid:68)(cid:73)(cid:78)(cid:71)(cid:0)(cid:77)(cid:79)(cid:66)(cid:73)(cid:76)(cid:73)(cid:84)(cid:89)(cid:12)(cid:0)

(cid:70)(cid:79)(cid:82)(cid:0)(cid:65)(cid:0)(cid:77)(cid:65)(cid:74)(cid:79)(cid:82)(cid:0)(cid:80)(cid:72)(cid:65)(cid:82)(cid:77)(cid:65)(cid:67)(cid:69)(cid:85)(cid:84)(cid:73)(cid:67)(cid:65)(cid:76)(cid:0)(cid:67)(cid:79)(cid:77)(cid:80)(cid:65)(cid:78)(cid:89)(cid:14)(cid:0)(cid:33)(cid:70)(cid:84)(cid:69)(cid:82)(cid:0)

(cid:65)(cid:0)(cid:84)(cid:72)(cid:79)(cid:82)(cid:79)(cid:85)(cid:71)(cid:72)(cid:0)(cid:65)(cid:83)(cid:83)(cid:69)(cid:83)(cid:83)(cid:77)(cid:69)(cid:78)(cid:84)(cid:12)(cid:0)(cid:52)(cid:69)(cid:67)(cid:72)(cid:0)(cid:36)(cid:65)(cid:84)(cid:65)(cid:0)(cid:81)(cid:85)(cid:73)(cid:67)(cid:75)(cid:76)(cid:89)(cid:0)

delivered a proposal for the data center detail-

(cid:73)(cid:78)(cid:71)(cid:0)(cid:83)(cid:80)(cid:65)(cid:67)(cid:69)(cid:0)(cid:79)(cid:80)(cid:84)(cid:73)(cid:77)(cid:73)(cid:90)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:82)(cid:69)(cid:67)(cid:79)(cid:77)(cid:77)(cid:69)(cid:78)(cid:68)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:83)(cid:12)(cid:0)

(cid:67)(cid:65)(cid:66)(cid:76)(cid:69)(cid:0)(cid:77)(cid:65)(cid:78)(cid:65)(cid:71)(cid:69)(cid:77)(cid:69)(cid:78)(cid:84)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:80)(cid:79)(cid:87)(cid:69)(cid:82)(cid:0)(cid:67)(cid:79)(cid:78)(cid:83)(cid:85)(cid:77)(cid:80)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)

(cid:34)(cid:79)(cid:66)(cid:0)(cid:36)(cid:85)(cid:84)(cid:75)(cid:79)(cid:87)(cid:83)(cid:75)(cid:89)

Chief Executive Officer

Tech Data Corporation

5

FINANCIAL TABLE OF CONTENTS

Selected Consolidated Financial Data

Management’s Discussion and Analysis of 

Financial Condition and Results of Operations

Reports of Independent Registered Certified Public Accounting Firm

Consolidated Balance Sheet

Consolidated Statement of Operations

Consolidated Statement of Shareholders’ Equity

Consolidated Statement of Cash Flows

Notes to Consolidated Financial Statements

Market for the Registrant’s Common Stock, Related Shareholder Matters

and Issuer Purchases of Equity Securities

Stock Performance Chart

GAAP to Non-GAAP Reconciliation (Unaudited)

6

8

28

30

31

32

33

35

57

59

60

6

SELECTED CONSOLIDATED FINANCIAL DATA

The following table sets forth certain selected consolidated financial data. In the first quarter of fiscal 2007, management sold the 
European training business (the “Training Business”). The results of operations of the Training Business have been reclassified and pre-
sented as “income (loss) from discontinued operations, net of tax,” for all periods presented below. The balance sheet data has not been 
reclassified as the net assets of the Training Business are less than 0.5% of the total net assets of the Company. This information should 
be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations on our consolidated 
financial statements and notes thereto appearing elsewhere in this Annual Report.

Five Year Financial Summary

2008

2007

2006

2005

2004

Income statement data:
Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 23,423,078
Cost of products sold . . . . . . . . . . . . . . . . . . . . . . . . . .
22,288,670

$ 21,440,445
20,433,674

$ 20,482,851
19,460,332

$ 19,730,917
18,667,184

$ 17,358,525
16,414,773

Gross profit  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,134,408

1,006,771

1,022,519

1,063,733

943,752

(In thousands, except per share data)

Year ended January 31, 

Operating expenses:

Selling, general and administrative expenses . . . . . . .
Goodwill impairment(1) . . . . . . . . . . . . . . . . . . . . . . .
Loss on disposal of subsidiaries(4)  . . . . . . . . . . . . . . .
Restructuring charges(2) . . . . . . . . . . . . . . . . . . . . . . .
Special charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

915,434
—
14,471
16,149
—

851,097
136,093
—
23,764
—

946,054

1,010,954

Operating income (loss) . . . . . . . . . . . . . . . . . . . . . . . .

188,354

(4,183)

Other expense (income):

Discount on sale of accounts receivable  . . . . . . . . . .
Interest expense, net . . . . . . . . . . . . . . . . . . . . . . . . .
Net foreign currency exchange (gain) loss . . . . . . . . .

7,219
15,256
(3,994)

18,481

12,509
28,742
(15)

41,236

828,278
—
—
30,946
—

859,224

163,295

5,503
23,996
1,816

31,315

Income (loss) from continuing operations 

before income taxes and minority interest  . . . . . . . .
Provision for income taxes(3) . . . . . . . . . . . . . . . . . . . . .

169,873
65,163

(45,419)
55,508

131,980
109,013

Income (loss) from continuing operations 

before minority interest . . . . . . . . . . . . . . . . . . . . . . .
Minority interest in net loss of joint venture . . . . . . . . .

Income (loss) from continuing operations . . . . . . . . . . .
Discontinued operations, net of tax . . . . . . . . . . . . . . .

104,710
3,559

108,269
—

(100,927)
—

(100,927)
3,946

22,967
—

22,967
3,619

832,178
—
—
—
—

832,178

231,555

—
22,867
(2,959)

19,908

211,647
52,025

159,622
—

159,622
2,838

771,786
—
—
—
3,065

774,851

168,901

—
16,566
(1,893)

14,673

154,228
47,040

107,188
—

107,188
(3,041)

Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

108,269

$

(96,981) $

26,586

$

162,460

$

104,147

(continued)

Tech Data Corporation

7

Year ended January 31, 

Five Year Financial Summary

2008

2007

2006

2005

2004

Income (loss) per common share—basic:

Continuing operations . . . . . . . . . . . . . . . . . . . . . . .  $
Discontinued operations. . . . . . . . . . . . . . . . . . . . . .

Net income (loss) per common share—basic . . . . . .

$

Income (loss) per common share—diluted:

Continuing operations . . . . . . . . . . . . . . . . . . . . . . .  $
Discontinued operations. . . . . . . . . . . . . . . . . . . . . .

Net income (loss) per common share—diluted. . . . .

$

Weighted average common shares outstanding:

Basic  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Dividends per common share  . . . . . . . . . . . . . . . . . . .

(In thousands, except per share data)

1.97
—

1.97

1.96
—

1.96

$

$

$

$

(1.83) $
0.07

(1.76) $

(1.83) $
0.07

(1.76) $

0.40
0.06

0.46

0.39
0.06

0.45

$

$

$

$

2.74
0.05

2.79

2.69
0.05

2.74

$

$

$

$

54,904

55,287

—

55,129

55,129

—

57,749

58,414

—

58,176

59,193

—

1.88
(0.05)

1.83

1.86
(0.05)

1.81

56,838

57,501

—

2008

2007

2006

2005

2004

Balance sheet data:
Working capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Revolving credit loans  . . . . . . . . . . . . . . . . . . . . . . . . .
Current portion of long-term debt. . . . . . . . . . . . . . . .
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other long-term liabilities  . . . . . . . . . . . . . . . . . . . . . .
Shareholders’ equity  . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 2,044,418
5,220,935
18,315
1,243
363,639
58,011
1,920,721

$ 1,816,564
4,703,864
77,195
2,376
363,604
46,252
1,702,720

$ 1,392,108
4,404,634
235,088
1,605
14,378
38,598
1,760,307

$ 1,488,617
4,557,736
68,343
291,625
17,215
45,178
1,927,471

$ 1,525,432
4,167,886
80,221
9,258
307,934
46,591
1,658,489

(1) See Note 6 of Notes to Consolidated Financial Statements for discussion of the goodwill impairment recorded in fiscal 2007. 
(2) See Note 8 of Notes to Consolidated Financial Statements for discussion of restructuring costs incurred in fiscal 2008, 2007 and 2006, respectively. 
(3)   See Note 11 of Notes to Consolidated Financial Statements for discussion of the $7.5 million decrease in the deferred tax asset valuation allowance in fiscal 2008 and the 

$8.4 million and $56.0 million increases in the deferred tax asset valuation allowance in fiscal 2007 and 2006, respectively. 

(4) See Note 7 of Notes to Consolidated Financial Statements for discussion of the $14.5 million loss on disposal of subsidiaries recorded in fiscal 2008. 

8

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements 

This Annual Report, including this Management’s Discussion and 
Analysis  of  Financial  Condition  and  Results  of  Operations 
(“MD&A”), contains forward-looking statements, as described in 
the  “safe  harbor”  provision  of  the  Private  Securities  Litigation 
Reform Act of 1995. These statements involve a number of risks 
and  uncertainties  and  actual  results  could  differ  materially  from 
those  projected.  These  forward-looking  statements  regarding 
future events and the future results of Tech Data Corporation are 
based  on  current  expectations,  estimates,  forecasts,  and  projec-
tions about the industries in which we operate and the beliefs and 
assumptions  of  our  management.  Words  such  as  “expects,” 
“anticipates,”  “targets,”  “goals,”  “projects,”  “intends,”  “plans,” 
“believes,”  “seeks,”  “estimates,”  variations  of  such  words,  and 
similar expressions are intended to identify such forward-looking 
statements.  In  addition,  any  statements  that  refer  to  projections 
of  our  future  financial  performance,  our  anticipated  growth  and 
trends  in  our  businesses,  and  other  characterizations  of  future 
events or circumstances, are forward-looking statements. Readers 
are  cautioned  that  these  forward-looking  statements  are  only 
predictions and are subject to risks, uncertainties, and assumptions. 
Therefore, actual results may differ materially and adversely from 
those  expressed  in  any  forward-looking  statements.  Readers  are 
referred  to  the  cautionary  statements  and  important  factors 
discussed in Risk Factors in this Annual Report. We undertake no 
obligation to revise or update publicly any forward-looking state-
ments for any reason. 

Factors  that  could  cause  actual  results  to  differ  materially 

include the following: 
(cid:115)(cid:0)(cid:67)(cid:79)(cid:77)(cid:80)(cid:69)(cid:84)(cid:73)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)
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(cid:115)(cid:0)(cid:68)(cid:69)(cid:80)(cid:69)(cid:78)(cid:68)(cid:69)(cid:78)(cid:67)(cid:69)(cid:0)(cid:79)(cid:78)(cid:0)(cid:73)(cid:78)(cid:70)(cid:79)(cid:82)(cid:77)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:83)(cid:89)(cid:83)(cid:84)(cid:69)(cid:77)(cid:83)(cid:0)
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(cid:115)(cid:0)(cid:69)(cid:88)(cid:80)(cid:79)(cid:83)(cid:85)(cid:82)(cid:69)(cid:0)(cid:84)(cid:79)(cid:0)(cid:78)(cid:65)(cid:84)(cid:85)(cid:82)(cid:65)(cid:76)(cid:0)(cid:68)(cid:73)(cid:83)(cid:65)(cid:83)(cid:84)(cid:69)(cid:82)(cid:83)(cid:12)(cid:0)(cid:87)(cid:65)(cid:82)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:84)(cid:69)(cid:82)(cid:82)(cid:79)(cid:82)(cid:73)(cid:83)(cid:77)(cid:0)
(cid:115)(cid:0)(cid:68)(cid:69)(cid:80)(cid:69)(cid:78)(cid:68)(cid:69)(cid:78)(cid:67)(cid:69)(cid:0)(cid:79)(cid:78)(cid:0)(cid:73)(cid:78)(cid:68)(cid:69)(cid:80)(cid:69)(cid:78)(cid:68)(cid:69)(cid:78)(cid:84)(cid:0)(cid:83)(cid:72)(cid:73)(cid:80)(cid:80)(cid:73)(cid:78)(cid:71)(cid:0)(cid:67)(cid:79)(cid:77)(cid:80)(cid:65)(cid:78)(cid:73)(cid:69)(cid:83)(cid:0)
(cid:115)(cid:0)(cid:76)(cid:65)(cid:66)(cid:79)(cid:82)(cid:0)(cid:83)(cid:84)(cid:82)(cid:73)(cid:75)(cid:69)(cid:83)(cid:0)
(cid:115)(cid:0)(cid:82)(cid:73)(cid:83)(cid:75)(cid:0)(cid:79)(cid:70)(cid:0)(cid:68)(cid:69)(cid:67)(cid:76)(cid:73)(cid:78)(cid:69)(cid:83)(cid:0)(cid:73)(cid:78)(cid:0)(cid:73)(cid:78)(cid:86)(cid:69)(cid:78)(cid:84)(cid:79)(cid:82)(cid:89)(cid:0)(cid:86)(cid:65)(cid:76)(cid:85)(cid:69)(cid:0)
(cid:115)(cid:0)(cid:80)(cid:82)(cid:79)(cid:68)(cid:85)(cid:67)(cid:84)(cid:0)(cid:65)(cid:86)(cid:65)(cid:73)(cid:76)(cid:65)(cid:66)(cid:73)(cid:76)(cid:73)(cid:84)(cid:89)(cid:0)
(cid:115)(cid:0)(cid:86)(cid:69)(cid:78)(cid:68)(cid:79)(cid:82)(cid:0)(cid:84)(cid:69)(cid:82)(cid:77)(cid:83)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:67)(cid:79)(cid:78)(cid:68)(cid:73)(cid:84)(cid:73)(cid:79)(cid:78)(cid:83)(cid:0)
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(cid:115)(cid:0)(cid:67)(cid:85)(cid:83)(cid:84)(cid:79)(cid:77)(cid:69)(cid:82)(cid:0)(cid:67)(cid:82)(cid:69)(cid:68)(cid:73)(cid:84)(cid:0)(cid:69)(cid:88)(cid:80)(cid:79)(cid:83)(cid:85)(cid:82)(cid:69)(cid:0)
(cid:115)(cid:0)(cid:78)(cid:69)(cid:69)(cid:68)(cid:0)(cid:70)(cid:79)(cid:82)(cid:0)(cid:76)(cid:73)(cid:81)(cid:85)(cid:73)(cid:68)(cid:73)(cid:84)(cid:89)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:67)(cid:65)(cid:80)(cid:73)(cid:84)(cid:65)(cid:76)(cid:0)(cid:82)(cid:69)(cid:83)(cid:79)(cid:85)(cid:82)(cid:67)(cid:69)(cid:83)(cid:27)(cid:0)(cid:70)(cid:76)(cid:85)(cid:67)(cid:84)(cid:85)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:83)(cid:0)(cid:73)(cid:78)(cid:0)(cid:73)(cid:78)(cid:84)(cid:69)(cid:82)(cid:69)(cid:83)(cid:84)(cid:0)(cid:82)(cid:65)(cid:84)(cid:69)(cid:83)

(cid:115)(cid:0)(cid:70)(cid:79)(cid:82)(cid:69)(cid:73)(cid:71)(cid:78)(cid:0)(cid:67)(cid:85)(cid:82)(cid:82)(cid:69)(cid:78)(cid:67)(cid:89)(cid:0)(cid:69)(cid:88)(cid:67)(cid:72)(cid:65)(cid:78)(cid:71)(cid:69)(cid:0)(cid:82)(cid:65)(cid:84)(cid:69)(cid:83)(cid:27)(cid:0)(cid:69)(cid:88)(cid:80)(cid:79)(cid:83)(cid:85)(cid:82)(cid:69)(cid:0)(cid:84)(cid:79)(cid:0)(cid:70)(cid:79)(cid:82)(cid:69)(cid:73)(cid:71)(cid:78)(cid:0)(cid:77)(cid:65)(cid:82)(cid:75)(cid:69)(cid:84)(cid:83)(cid:0)
(cid:115)(cid:0)(cid:67)(cid:72)(cid:65)(cid:78)(cid:71)(cid:69)(cid:83)(cid:0)(cid:73)(cid:78)(cid:0)(cid:73)(cid:78)(cid:67)(cid:79)(cid:77)(cid:69)(cid:0)(cid:84)(cid:65)(cid:88)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:79)(cid:84)(cid:72)(cid:69)(cid:82)(cid:0)(cid:82)(cid:69)(cid:71)(cid:85)(cid:76)(cid:65)(cid:84)(cid:79)(cid:82)(cid:89)(cid:0)(cid:76)(cid:69)(cid:71)(cid:73)(cid:83)(cid:76)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)
(cid:115)(cid:0)(cid:67)(cid:72)(cid:65)(cid:78)(cid:71)(cid:69)(cid:83)(cid:0)(cid:73)(cid:78)(cid:0)(cid:65)(cid:67)(cid:67)(cid:79)(cid:85)(cid:78)(cid:84)(cid:73)(cid:78)(cid:71)(cid:0)(cid:82)(cid:85)(cid:76)(cid:69)(cid:83)(cid:0)
(cid:115)(cid:0)(cid:86)(cid:79)(cid:76)(cid:65)(cid:84)(cid:73)(cid:76)(cid:73)(cid:84)(cid:89)(cid:0)(cid:79)(cid:70)(cid:0)(cid:67)(cid:79)(cid:77)(cid:77)(cid:79)(cid:78)(cid:0)(cid:83)(cid:84)(cid:79)(cid:67)(cid:75)(cid:0)(cid:80)(cid:82)(cid:73)(cid:67)(cid:69)

Overview 

Tech Data is a leading distributor of information technology (“IT”) 
products,  logistics  management  and  other  value-added  services. 
We distribute microcomputer hardware and software products to 
value-added  resellers,  corporate  resellers,  direct  marketers  and 
retailers.  Our  offering  of  value-added  customer  services  includes 
training and technical support, external financing options, config-
uration services, outbound telemarketing, marketing services and 
a  suite  of  electronic  commerce  solutions.  We  manage  our  busi-
ness in two geographic segments: the Americas (including North 
America and Latin America) and Europe. 

Our  strategy  is  to  leverage  our  efficient  cost  structure  com-
bined with our multiple service offerings to generate demand and 
cost efficiencies for our suppliers and customers around the world. 
The  IT  distribution  industry  in  which  we  operate  is  characterized 
by  narrow  gross  profit  as  a  percentage  of  sales  (“gross  margin”) 
and  narrow  income  from  operations  as  a  percentage  of  sales 
(“operating  margin”).  Historically,  our  gross  and  operating  mar-
gins have been impacted by intense price competition, as well as 
changes  in  terms  and  conditions  with  our  suppliers,  including 
those terms related to rebates and other incentives and price pro-
tection.  We  expect  these  competitive  pricing  pressures  to  con-
tinue in the foreseeable future, and therefore, we will continue to 
evaluate our pricing policies and terms and conditions offered to 
our customers in response to changes in our vendors’ terms and 
conditions and the general market environment. We will continue 
to focus on not only disciplined pricing and purchasing practices, 
but  also  on  realigning  our  customer  and  vendor  portfolio  to 
support a sustainable higher margin business that will help drive 
long-term  profitability  throughout  all  of  our  operations.  As  we 
continue to evaluate our existing pricing policies and make future 
changes,  if  any,  within  our  customer  or  vendor  portfolio,  we 
may experience moderated sales growth or sales declines. In addi-
tion,  increased  competition  and  changes  in  general  economic 
conditions within the markets in which we conduct business may 
hinder  our ability to  maintain and/or improve gross margin from 
its current level. 

Tech Data Corporation

9

From a balance sheet perspective, we require working capital 
primarily  to  finance  accounts  receivable  and  inventory.  We  have 
historically  relied  upon  debt,  trade  credit  from  our  vendors,  and 
accounts  receivable  financing  programs  for  our  working  capital 
needs. We believe our balance sheet at January 31, 2008 was one 
of the strongest in the industry, with a debt to capital ratio (calcu-
lated as total debt divided by the aggregate of total debt and total 
shareholders’ equity) of 17%. 

In  fiscal  2008,  we  delivered  solid  and  consistent  performance 
in the Americas, achieving an operating margin in excess of 1.5% 
while  at  the  same  time  continuing  to  invest  in  growth  and 
productivity  enhancement  initiatives.  In  Europe,  we  are  making 
measurable  progress  towards  improving  our  profitability  with 
improving  sales  coverage  in  many  of  our  European  regions. 
We have executed our restructuring programs throughout Europe, 
which  are  improving  our  operating  performance  going  forward. 
In  fiscal  2008,  the  vast  majority  of  our  European  businesses 
delivered  improved  operating  income  and  cash  metrics  in  com-
parison with fiscal 2007. We continue to fall short of our operat-
ing targets in Germany and in response, we have made significant 
changes to our German management structure. The new team is 
taking aggressive action to improve our execution throughout our 
German  operations.  These  changes  will  take  time  to  take  effect. 
While we still have opportunities and expectations for additional 
improvement,  we  believe  that  our  current  performance  within 
the  majority  of  the  European  countries  is  a  positive  indicator  of 
the Company’s ability to improve our operating performance. 

As discussed above, we believe our fiscal 2008 financial perfor-
mance  demonstrates  our  ability  to  execute  as  we  delivered  solid 
performance  in  the  Americas  and  achieved  significant  improve-
ments in our operating performance in Europe compared to fiscal 
2007.  During  fiscal  2008,  we  announced  several  initiatives 
designed to further enhance our long-term profitability and return 
on invested capital in Europe, including the following: 

(cid:115)(cid:0)(cid:0)(cid:55)(cid:69)(cid:0) (cid:67)(cid:69)(cid:65)(cid:83)(cid:69)(cid:68)(cid:0) (cid:79)(cid:80)(cid:69)(cid:82)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:83)(cid:0) (cid:73)(cid:78)(cid:0) (cid:84)(cid:72)(cid:69)(cid:0) (cid:53)(cid:78)(cid:73)(cid:84)(cid:69)(cid:68)(cid:0) (cid:33)(cid:82)(cid:65)(cid:66)(cid:0) (cid:37)(cid:77)(cid:73)(cid:82)(cid:65)(cid:84)(cid:69)(cid:83)(cid:0) (cid:8)(cid:104)(cid:53)(cid:33)(cid:37)(cid:118)(cid:9)(cid:14)(cid:0)
During fiscal 2008, our results included a loss on disposal of this 
subsidiary  of  approximately  $10.8  million,  representing  a  $9.8 
million foreign currency exchange loss on our investment in the 
subsidiary  (previously  recorded  in  shareholders’  equity  as  a 
component  of  accumulated  other  comprehensive  income)  and 
$1.0  million  for  severance  costs  and  fixed  asset  write-offs. 
(cid:41)(cid:78)(cid:0)(cid:65)(cid:68)(cid:68)(cid:73)(cid:84)(cid:73)(cid:79)(cid:78)(cid:12)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:53)(cid:33)(cid:37)(cid:0)(cid:73)(cid:78)(cid:67)(cid:85)(cid:82)(cid:82)(cid:69)(cid:68)(cid:0)(cid:79)(cid:84)(cid:72)(cid:69)(cid:82)(cid:0)(cid:79)(cid:80)(cid:69)(cid:82)(cid:65)(cid:84)(cid:73)(cid:78)(cid:71)(cid:0)(cid:76)(cid:79)(cid:83)(cid:83)(cid:69)(cid:83)(cid:0)(cid:79)(cid:70)(cid:0)(cid:65)(cid:80)(cid:80)(cid:82)(cid:79)(cid:88)(cid:73)-
mately  $0.9  million  during  fiscal  2008,  comprised  primarily  of 
inventory  write-downs  and  occupancy-related  expenses. 
(cid:52)(cid:72)(cid:69)(cid:0) (cid:53)(cid:33)(cid:37)(cid:7)(cid:83)(cid:0) (cid:79)(cid:80)(cid:69)(cid:82)(cid:65)(cid:84)(cid:73)(cid:78)(cid:71)(cid:0) (cid:82)(cid:69)(cid:83)(cid:85)(cid:76)(cid:84)(cid:83)(cid:0) (cid:68)(cid:85)(cid:82)(cid:73)(cid:78)(cid:71)(cid:0) (cid:70)(cid:73)(cid:83)(cid:67)(cid:65)(cid:76)(cid:0) (cid:18)(cid:16)(cid:16)(cid:23)(cid:0) (cid:65)(cid:78)(cid:68)(cid:0) (cid:18)(cid:16)(cid:16)(cid:22)(cid:0) (cid:87)(cid:69)(cid:82)(cid:69)(cid:0)
insignificant relative to our consolidated financial results. 

(cid:115)(cid:0)(cid:0)(cid:55)(cid:69)(cid:0)(cid:67)(cid:79)(cid:77)(cid:80)(cid:76)(cid:69)(cid:84)(cid:69)(cid:68)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:83)(cid:65)(cid:76)(cid:69)(cid:0)(cid:79)(cid:70)(cid:0)(cid:79)(cid:85)(cid:82)(cid:0)(cid:79)(cid:80)(cid:69)(cid:82)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:83)(cid:0)(cid:73)(cid:78)(cid:0)(cid:41)(cid:83)(cid:82)(cid:65)(cid:69)(cid:76)(cid:0)(cid:65)(cid:84)(cid:0)(cid:65)(cid:78)(cid:0)(cid:65)(cid:77)(cid:79)(cid:85)(cid:78)(cid:84)(cid:0)
approximating local currency net book value. During fiscal 2008, 
we  recorded  a  loss  on  disposal  of  this  subsidiary  of  approxi-
mately $3.7 million, representing a $2.7 million foreign currency 
exchange  loss  on  our  investment  in  the  subsidiary  (previously 
recorded  in  shareholders’  equity  as  a  component  of  accumu-
lated  other  comprehensive  income)  and  $1.0  million  for  costs 
related  to  the  sale.  In  addition,  Israel  had  operating  losses  of 
$0.1  million  during  fiscal  2008.  Israel’s  operating  results 
during  fiscal  2007  and  2006  were  insignificant  relative  to  our 
consolidated financial statements. 

(cid:115)(cid:0)(cid:0)(cid:55)(cid:69)(cid:0)(cid:67)(cid:79)(cid:77)(cid:80)(cid:76)(cid:69)(cid:84)(cid:69)(cid:68)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:69)(cid:88)(cid:73)(cid:84)(cid:0)(cid:70)(cid:82)(cid:79)(cid:77)(cid:0)(cid:79)(cid:85)(cid:82)(cid:0)(cid:76)(cid:79)(cid:71)(cid:73)(cid:83)(cid:84)(cid:73)(cid:67)(cid:83)(cid:0)(cid:67)(cid:69)(cid:78)(cid:84)(cid:69)(cid:82)(cid:0)(cid:73)(cid:78)(cid:0)(cid:39)(cid:69)(cid:82)(cid:77)(cid:65)(cid:78)(cid:89)(cid:0)(cid:8)(cid:84)(cid:72)(cid:69)(cid:0)
“Moers  logistics  center”)  during  the  second  quarter  of  fiscal 
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term synergies of having one logistics center serving Germany, 
Austria  and  the  Czech  Republic.  Related  to  the  Moers  logistics 
center exit, we are expanding our logistics center located in Bor, 
Czech Republic. We expect the net result of these transactions 
to be a reduction in our future operating expenses. During fiscal 
2008, we recorded $18.1 million in restructuring charges related 
to the closure of the Moers logistics center, comprised of $8.7 
million of workforce reductions and $9.4 million for facility costs 
and other fixed asset write-offs. 

(cid:115)(cid:0)(cid:0)(cid:55)(cid:69)(cid:0) (cid:69)(cid:88)(cid:69)(cid:67)(cid:85)(cid:84)(cid:69)(cid:68)(cid:0) (cid:65)(cid:0) (cid:74)(cid:79)(cid:73)(cid:78)(cid:84)(cid:0) (cid:86)(cid:69)(cid:78)(cid:84)(cid:85)(cid:82)(cid:69)(cid:0) (cid:65)(cid:71)(cid:82)(cid:69)(cid:69)(cid:77)(cid:69)(cid:78)(cid:84)(cid:0) (cid:87)(cid:73)(cid:84)(cid:72)(cid:0) (cid:34)(cid:82)(cid:73)(cid:71)(cid:72)(cid:84)(cid:83)(cid:84)(cid:65)(cid:82)(cid:0)
Corporation, one of the world’s largest wireless distributor and 
supply chain solutions providers. The joint venture will distribute 
mobile  phones  and  other  wireless  devices  to  a  variety  of  cus-
tomers including mobile operators, dealers, agents, retailers and 
e-tailers throughout the European market. Each of the joint ven-
ture  partners  has  a  50%  ownership  in  the  entity.  Throughout 
fiscal  2008,  we  executed  vendor  agreements  with  Motorola, 
Samsung, Nokia and LG in selected regions around Europe. The 
joint venture commenced sales during the third quarter of fiscal 
2008 and the operating results of the joint venture did not have 
a material impact on the fiscal 2008 results of operations. 

(cid:115)(cid:0)(cid:0)(cid:55)(cid:69)(cid:0)(cid:67)(cid:79)(cid:77)(cid:80)(cid:76)(cid:69)(cid:84)(cid:69)(cid:68)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:65)(cid:67)(cid:81)(cid:85)(cid:73)(cid:83)(cid:73)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:79)(cid:70)(cid:0)(cid:67)(cid:69)(cid:82)(cid:84)(cid:65)(cid:73)(cid:78)(cid:0)(cid:65)(cid:83)(cid:83)(cid:69)(cid:84)(cid:83)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:67)(cid:85)(cid:83)(cid:84)(cid:79)(cid:77)(cid:69)(cid:82)(cid:0)
base  of  Actebis  Switzerland  AG  in  the  third  quarter  of  fiscal 
2008,  for  a  purchase  price  of  approximately  $21.5  million. 
While  not  significant  to  our  worldwide  operations,  we  believe 
this acquisition will strengthen and further diversify our position 
in Switzerland and will provide our existing and new customers 
with  a  broader  portfolio  of  vendors  and  improved  sales 
coverage and support. 

10

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

continued

In  early  March  2008,  we  announced  the  execution  of  an 
agreement for the acquisition of certain assets of Scribona, AB, a 
publicly  traded  IT  distribution  company  in  the  Nordic  region  of 
Europe,  with  operations  in  Sweden,  Finland  and  Norway 
(“Scribona”).  The  purchase  price  for  the  assets  is  the  net  asset 
value  plus  a  premium  for  the  transferred  assets,  including  inven-
tory,  intellectual  property,  material  contracts,  office  equipment 
and  certain  other  assets.  The  premium  is  estimated  to  be  in  the 
range of 13.5 million to 16.5 million euros (approximately $20.0 to 
$25.0 million). The transaction is subject to various contingencies 
(cid:73)(cid:78)(cid:67)(cid:76)(cid:85)(cid:68)(cid:73)(cid:78)(cid:71)(cid:0)(cid:76)(cid:65)(cid:66)(cid:79)(cid:82)(cid:0)(cid:67)(cid:79)(cid:78)(cid:83)(cid:85)(cid:76)(cid:84)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:83)(cid:12)(cid:0)(cid:67)(cid:76)(cid:69)(cid:65)(cid:82)(cid:65)(cid:78)(cid:67)(cid:69)(cid:0)(cid:70)(cid:82)(cid:79)(cid:77)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:37)(cid:85)(cid:82)(cid:79)(cid:80)(cid:69)(cid:65)(cid:78)(cid:0)(cid:53)(cid:78)(cid:73)(cid:79)(cid:78)(cid:0)
and Scribona shareholder approval with a targeted completion in 
the second quarter of fiscal 2009. 

We  have  seen  stronger  recent  performance  in  virtually  all 
markets  in  Europe,  with  the  exception  of  Germany.  We  believe 
our strategy focused on execution, diversification and innovation 
will provide further improvements to our financial results. However, 
the  competitive  environment  and  changes  in  general  economic 
conditions within the markets in which we conduct business may 
hinder  our  ability  to  improve  our  operating  margins,  both  in 
Europe and the Americas. We will continue to work to selectively 
grow  our  net  sales,  profitability  and  market  share.  We  will  also 
continue  to  make  targeted  investments  across  our  worldwide 
operations  in  IT  enhancements,  sales  programs  and  new 
business units.

Critical Accounting Policies and Estimates 

The information included within MD&A is based upon our consoli-
dated  financial  statements,  which  have  been  prepared  in  accor-
(cid:68)(cid:65)(cid:78)(cid:67)(cid:69)(cid:0)(cid:87)(cid:73)(cid:84)(cid:72)(cid:0)(cid:65)(cid:67)(cid:67)(cid:79)(cid:85)(cid:78)(cid:84)(cid:73)(cid:78)(cid:71)(cid:0)(cid:80)(cid:82)(cid:73)(cid:78)(cid:67)(cid:73)(cid:80)(cid:76)(cid:69)(cid:83)(cid:0)(cid:71)(cid:69)(cid:78)(cid:69)(cid:82)(cid:65)(cid:76)(cid:76)(cid:89)(cid:0)(cid:65)(cid:67)(cid:67)(cid:69)(cid:80)(cid:84)(cid:69)(cid:68)(cid:0)(cid:73)(cid:78)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:53)(cid:78)(cid:73)(cid:84)(cid:69)(cid:68)(cid:0)
States.  The  preparation  of  these  financial  statements  requires  us 
to  make  estimates  and  judgments  that  affect  the  reported 
amounts of assets, liabilities, revenues and expenses, and related 
disclosures.  On  an  on-going  basis,  we  evaluate  these  estimates, 
including those related to bad debts, inventory, vendor incentives, 
goodwill and intangible assets, deferred taxes, and contingencies. 
Our  estimates  and  judgments  are  based  on  currently  available 
information,  historical  results,  and  other  assumptions  we  believe 
are  reasonable.  Actual  results  could  differ  materially  from  these 
estimates.  We  believe  the  critical  accounting  policies  discussed 
below  affect  the  more  significant  judgments  and  estimates  used 
in the preparation of our consolidated financial statements. 

In addition to those policies discussed below, it is important to 
note  that  effective  February  1,  2006,  we  adopted  the  fair  value 
recognition  provisions  of  Statement  of  Financial  Accounting 
Standards No. 123 (revised 2004), “Share-Based Payments” (“SFAS 
No.  123R”),  using  the  modified  prospective  transition  method, 
and therefore have not restated our results of operations for the 
(cid:80)(cid:82)(cid:73)(cid:79)(cid:82)(cid:0)(cid:80)(cid:69)(cid:82)(cid:73)(cid:79)(cid:68)(cid:83)(cid:14)(cid:0)(cid:53)(cid:78)(cid:68)(cid:69)(cid:82)(cid:0)(cid:84)(cid:72)(cid:73)(cid:83)(cid:0)(cid:84)(cid:82)(cid:65)(cid:78)(cid:83)(cid:73)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:77)(cid:69)(cid:84)(cid:72)(cid:79)(cid:68)(cid:12)(cid:0)(cid:83)(cid:84)(cid:79)(cid:67)(cid:75)(cid:13)(cid:66)(cid:65)(cid:83)(cid:69)(cid:68)(cid:0)(cid:67)(cid:79)(cid:77)(cid:80)(cid:69)(cid:78)-
sation expense for fiscal 2007 includes compensation expense for 
stock-based  compensation  awards  granted  prior  to,  but  not  yet 
vested as of January 31, 2006, and for stock-based compensation 
awards granted after January 31, 2006. SFAS No. 123R eliminates 
the  ability  to  account  for  stock-based  compensation  transactions 
using  the  intrinsic  value  method  under  Accounting  Principles 
Board Opinion No. 25, “Accounting for Stock Issued to Employees.” 
In  accordance  with  SFAS  No.  123R,  we  recognize  stock-based 
compensation  expense,  reduced  for  estimated  forfeitures,  on  a 
straight-line  basis  over  the  requisite  service  period  of  the  award. 
During  fiscal  2008  and  2007,  we  recognized  $10.3  million  and 
$8.0  million,  respectively,  of  stock-based  compensation  expense 
as a result of the adoption of SFAS No. 123R. See further discus-
sion related to our adoption of SFAS No. 123R included in Note 1 
of Notes to Consolidated Financial Statements. 

Accounts Receivable 
We  maintain  allowances  for  doubtful  accounts  for  estimated 
losses  resulting  from  the  inability  of  our  customers  to  make 
required payments. In estimating the required allowance, we take 
into consideration the overall quality and aging of the receivable 
portfolio, the existence of credit insurance and specifically identi-
fied customer risks. Also influencing our estimates are the follow-
ing: (1) the large number of customers and their dispersion across 
(cid:87)(cid:73)(cid:68)(cid:69)(cid:0) (cid:71)(cid:69)(cid:79)(cid:71)(cid:82)(cid:65)(cid:80)(cid:72)(cid:73)(cid:67)(cid:0) (cid:65)(cid:82)(cid:69)(cid:65)(cid:83)(cid:27)(cid:0) (cid:8)(cid:18)(cid:9)(cid:0) (cid:84)(cid:72)(cid:69)(cid:0) (cid:70)(cid:65)(cid:67)(cid:84)(cid:0) (cid:84)(cid:72)(cid:65)(cid:84)(cid:0) (cid:78)(cid:79)(cid:0) (cid:83)(cid:73)(cid:78)(cid:71)(cid:76)(cid:69)(cid:0) (cid:67)(cid:85)(cid:83)(cid:84)(cid:79)(cid:77)(cid:69)(cid:82)(cid:0)
(cid:65)(cid:67)(cid:67)(cid:79)(cid:85)(cid:78)(cid:84)(cid:83)(cid:0) (cid:70)(cid:79)(cid:82)(cid:0) (cid:77)(cid:79)(cid:82)(cid:69)(cid:0) (cid:84)(cid:72)(cid:65)(cid:78)(cid:0) (cid:17)(cid:16)(cid:5)(cid:0) (cid:79)(cid:70)(cid:0) (cid:79)(cid:85)(cid:82)(cid:0) (cid:78)(cid:69)(cid:84)(cid:0) (cid:83)(cid:65)(cid:76)(cid:69)(cid:83)(cid:27)(cid:0) (cid:8)(cid:19)(cid:9)(cid:0) (cid:84)(cid:72)(cid:69)(cid:0) (cid:86)(cid:65)(cid:76)(cid:85)(cid:69)(cid:0) (cid:65)(cid:78)(cid:68)(cid:0)
adequacy of collateral received from customers, if any and 4) our 
historical loss experience. If actual customer performance were to 
deteriorate to an extent not expected by us, additional allowances 
may be required which could have an adverse effect on our con-
solidated  financial  results.  Conversely,  if  actual  customer  perfor-
mance  were  to  improve  to  an  extent  not  expected  by  us,  a 
reduction  in  allowances  may  be  required  which  could  have  a 
favorable effect on our consolidated financial results. 

Tech Data Corporation

11

Inventory 
We  value  our  inventory  at  the  lower  of  its  cost  or  market 
value, with cost being determined on the first-in, first-out method. 
We write down our inventory for estimated obsolescence equal to 
the  difference  between  the  cost  of  inventory  and  the  estimated 
market  value  based  upon  an  aging  analysis  of  the  inventory  on 
hand,  specifically  known  inventory-related  risks  (such  as  techno-
logical obsolescence and the nature of vendor terms surrounding 
price  protection  and  product  returns),  foreign  currency  fluctua-
tions for foreign-sourced product, and assumptions about future 
demand.  Market  conditions  or  changes  in  terms  and  conditions 
by  our  vendors  that  are  less  favorable  than  those  projected  by 
management  may  require  additional  inventory  write-downs, 
which  could  have  an  adverse  effect  on  our  consolidated 
financial results. 

Vendor Incentives 
We receive incentives from vendors related to cooperative adver-
tising  allowances,  infrastructure  funding,  volume  rebates  and 
other incentive agreements. These incentives are generally under 
(cid:81)(cid:85)(cid:65)(cid:82)(cid:84)(cid:69)(cid:82)(cid:76)(cid:89)(cid:12)(cid:0) (cid:83)(cid:69)(cid:77)(cid:73)(cid:13)(cid:65)(cid:78)(cid:78)(cid:85)(cid:65)(cid:76)(cid:0) (cid:79)(cid:82)(cid:0) (cid:65)(cid:78)(cid:78)(cid:85)(cid:65)(cid:76)(cid:0) (cid:65)(cid:71)(cid:82)(cid:69)(cid:69)(cid:77)(cid:69)(cid:78)(cid:84)(cid:83)(cid:0) (cid:87)(cid:73)(cid:84)(cid:72)(cid:0) (cid:84)(cid:72)(cid:69)(cid:0) (cid:86)(cid:69)(cid:78)(cid:68)(cid:79)(cid:82)(cid:83)(cid:27)(cid:0)
however,  some  of  these  incentives  are  negotiated  on  an  ad-hoc 
basis  to  support  specific  programs  mutually  developed  with  the 
(cid:86)(cid:69)(cid:78)(cid:68)(cid:79)(cid:82)(cid:14)(cid:0)(cid:53)(cid:78)(cid:82)(cid:69)(cid:83)(cid:84)(cid:82)(cid:73)(cid:67)(cid:84)(cid:69)(cid:68)(cid:0)(cid:86)(cid:79)(cid:76)(cid:85)(cid:77)(cid:69)(cid:0)(cid:82)(cid:69)(cid:66)(cid:65)(cid:84)(cid:69)(cid:83)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:69)(cid:65)(cid:82)(cid:76)(cid:89)(cid:0)(cid:80)(cid:65)(cid:89)(cid:77)(cid:69)(cid:78)(cid:84)(cid:0)(cid:68)(cid:73)(cid:83)(cid:67)(cid:79)(cid:85)(cid:78)(cid:84)(cid:83)(cid:0)
received  from  vendors  are  recorded  when  they  are  earned  as  a 
reduction of inventory and as a reduction of cost of products sold 
as  the  related  inventory  is  sold.  Vendor  incentives  earned  for 
specifically identified cooperative advertising programs and infra-
structure funding are recorded as adjustments to selling, general 
and administrative expenses, and any amounts earned in excess of 
the  related  cost  is  recorded  in  the  same  manner  as  unrestricted 
volume rebates, as discussed above. 

We  also  provide  reserves  for  receivables  on  vendor  programs 
for  estimated  losses  resulting  from  vendors’  inability  to  pay  or 
rejections by vendors of claims. Should amounts recorded as out-
standing receivables from vendors be deemed uncollectible, addi-
tional  allowances  may  be  required  which  could  have  an  adverse 
effect on our consolidated financial results. 

Goodwill, Intangible Assets and Other Long-Lived Assets 
The  carrying  value  of  goodwill  is  reviewed  at  least  annually  for 
impairment and may also be reviewed more frequently if current 
events  and  circumstances  indicate  a  possible  impairment.  An 
impairment loss is charged to expense in the period identified. We 
also examine the carrying value of our intangible assets with finite 
lives, which includes capitalized software and development costs, 
purchased  intangibles,  and  other  long-lived  assets  as  current 

events and circumstances warrant determining whether there are 
any impairment losses. If indicators of impairment are present and 
future cash flows are not expected to be sufficient to recover the 
assets’ carrying amount, an impairment loss is charged to expense 
in the period identified. Factors that may cause a goodwill, intan-
gible asset or other long-lived asset impairment include negative 
industry  or  economic  trends  and  significant  underperformance 
relative to historical or projected future operating results. Our val-
uation  methodologies  include,  but  are  not  limited  to,  estimating 
the net present value of the projected cash flows of our reporting 
units. If actual results are substantially lower than our projections 
underlying these assumptions, or if market discount rates substan-
tially  increase,  our  future  valuations  could  be  adversely  affected, 
potentially resulting in future impairment charges.

Income Taxes 
We record valuation allowances to reduce our deferred tax assets 
to the amount expected to be realized. In assessing the adequacy 
of  a  recorded  valuation  allowance,  we  consider  all  positive  and 
negative evidence and a variety of factors including the scheduled 
reversal  of  deferred  tax  liabilities,  historical  and  projected  future 
taxable income, and prudent and feasible tax planning strategies. 
If we determine we would be able to use a deferred tax asset in 
the future in excess of its net carrying value, an adjustment to the 
deferred tax asset valuation allowance would be made to reduce 
income tax expense, thereby increasing net income in the period 
such determination was made. Should we determine that we are 
unable to realize all or part of our net deferred tax assets in the 
future,  an  adjustment  to  the  deferred  tax  asset  valuation  allow-
ance would be made to income tax expense, thereby reducing net 
income in the period such determination was made. 

Contingencies 
We  accrue  for  contingent  obligations,  including  estimated  legal 
costs, when the obligation is probable and the amount is reason-
ably estimable. As facts concerning contingencies become known, 
we  reassess  our  position  and  make  appropriate  adjustments  to 
the financial statements. Estimates that are particularly sensitive to 
future changes include those related to tax, legal, and other regu-
latory  matters  such  as  imports  and  exports,  the  imposition  of 
international governmental controls, changes in the interpretation 
and  enforcement  of  international  laws  (in  particular  related  to 
items  such  as  duty  and  taxation),  and  the  impact  of  local  eco-
nomic conditions and practices, which are all subject to change as 
events  evolve  and  as  additional  information  becomes  available 
during the administrative and litigation process.

12

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

continued

Recent Accounting Pronouncements and Legislation 

See Note 1 of Notes to Consolidated Financial Statements for the discussion on recent accounting pronouncements and legislation. 

Results of Operations 

We do not consider stock-based compensation expense recognized under SFAS No. 123R in assessing the performance of our operating 
segments, therefore the Company is reporting this as a separate amount. The following table summarizes our net sales, change in net 
sales and operating income, by geographic region, for the fiscal years ended January 31, 2008, 2007 and 2006: 

Net sales by geographic region ($ in thousands):

Americas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $11,003,893
Europe  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
12,419,185

47.0% $ 9,965,074
11,475,371
53.0

46.5% $ 9,464,667
11,018,184
53.5

46.2%
53.8

Worldwide  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $23,423,078

100.0% $21,440,445

100.0% $20,482,851

100.0%

2008

% of
net sales

2007

% of
net sales

2006

% of
net sales

Year-over-year increase (decrease) in net sales (%):
(cid:0) (cid:33)(cid:77)(cid:69)(cid:82)(cid:73)(cid:67)(cid:65)(cid:83)(cid:0)(cid:8)(cid:53)(cid:51)(cid:4)(cid:9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(cid:0) (cid:37)(cid:85)(cid:82)(cid:79)(cid:80)(cid:69)(cid:0)(cid:8)(cid:53)(cid:51)(cid:4)(cid:9). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Europe (Euro) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(cid:0) (cid:55)(cid:79)(cid:82)(cid:76)(cid:68)(cid:87)(cid:73)(cid:68)(cid:69)(cid:0)(cid:8)(cid:53)(cid:51)(cid:4)(cid:9)  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10.4%
8.2%
(1.4)%
9.2%

5.3% 11.6%
(2.0)%
4.1%
(0.6)%
1.5%
3.8%
4.7%

2008

2007

2006

Operating income (loss) ($ in thousands):

Americas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Europe  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
 Stock-based compensation expense recognized 

2008

% of
net sales

2007

% of
net sales

2006

% of
net sales

170,685
27,956

1.55% $
0.23%

160,720
(156,930)

1.61% $
(1.37)%

154,839
8,456

1.64%
0.08%

under SFAS No. 123R  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(10,287)

(0.04)%

(7,973)

(0.04)%

—

—

Worldwide  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

188,354

0.80% $

(4,183)

(0.02)% $

163,295

0.80%

We sell many products purchased from the world’s leading peripheral, system and networking manufacturers and software publishers. 
Products purchased from Hewlett Packard generated 28% of our net sales in fiscal 2008, 2007 and 2006, respectively. There were no 
other manufacturers or publishers that accounted for 10% or more of our net sales in the past three years. 

 
Tech Data Corporation

13

Net Sales 
Our  consolidated  net  sales  were  $23.4  billion  in  fiscal  2008,  an 
increase  of  9.2%  when  compared  to  fiscal  2007.  On  a  regional 
basis,  during  fiscal  2008,  net  sales  in  the  Americas  increased  by 
10.4% over fiscal 2007 and increased by 8.2% in Europe (a decrease 
of 1.4% on a euro basis). Our fiscal 2008 sales performance in the 
Americas is primarily the result of stronger execution and increased 
sales and product management resources compared to the same 
period  of  the  prior  year.  These  actions  delivered  strong  growth 
across  the  Americas,  most  notably  in  the  direct  marketer  and 
small- and medium-sized business space. We are generally pleased 
with our sales performance in Europe and we believe it is a reflec-
tion of our improved stability and stronger execution in the major-
ity of our European operations. The year-over-year sales decline in 
euros  can  largely  be  attributed  to  our  conscious  efforts  to  remix 
our customer portfolio across Europe to those markets providing 
more acceptable operating margins and/or requiring less working 
capital  to  serve.  These  efforts  are  consistent  with  our  focus  on 
increasing our overall return on capital employed in the European 
region.  Declining  average  selling  prices  for  the  majority  of  the 
products  we  sell  continued  to  have  an  offsetting  impact  on  our 
sales growth results within both the Americas and Europe. 

Our consolidated net sales were $21.4 billion in fiscal 2007, an 
increase  of  4.7%  when  compared  to  fiscal  2006.  On  a  regional 
basis,  during  fiscal  2007,  net  sales  in  the  Americas  increased  by 
5.3%  over  fiscal  2006  and  increased  by  4.1%  in  Europe  (an 
increase  of 1.5% on  a euro basis). Our sales performance  in  the 
Americas is primarily due to stronger sales to direct marketers and 
retailers compared to the prior year somewhat offset by declining 
average selling prices of many of the products we sell. The increase 
in  European  sales  in  fiscal  2007  is  primarily  the  result  of  the 
improved IT demand experienced in the second semester of fiscal 
2007  and  improved  stability  in  our  European  operations  partially 
offset by much lower demand in Western Europe during the first 
semester of fiscal 2007 (particularly in the second quarter). 

The  following  table  sets  forth  our  Consolidated  Statement  of 
Operations as a percentage of net sales for each of the three most 
recent fiscal years:

2008

2007

2006

Net sales . . . . . . . . . . . . . . . . . . . .
Cost of products sold . . . . . . . . . .

100.00% 100.00% 100.00%
95.30

95.01

95.16

Gross profit  . . . . . . . . . . . . . . . . .

4.84

4.70

4.99

Operating expenses:

 Selling, general and 

administrative expenses. . . . . 
Goodwill impairment  . . . . . . . .
 Loss on disposal 

of subsidiaries . . . . . . . . . . . .
Restructuring charges . . . . . . . .

Operating income (loss) . . . . . . . .

Other expense (income):

Interest expense . . . . . . . . . . . .
 Discount on sale of 

accounts receivable . . . . . . . .
Interest income . . . . . . . . . . . . .
 Net foreign currency 

3.91
—

0.06
0.07

4.04

0.80

0.12

0.03
(0.06)

exchange (gain) loss . . . . . . .

(0.02)

0.07

0.73
0.28

Income (loss) from continuing 
operations before income 
taxes and minority interest . . . .
Provision for income taxes . . . . . .

Income (loss) from continuing 

operations before 
minority interest . . . . . . . . . . . .

Minority interest in net 

3.98
0.63

—
0.11

4.72

(0.02)

4.04
—

—
0.15

4.19

0.80

0.18

0.16

0.06
(0.05)

—

0.19

0.03
(0.04)

0.01

0.16

(0.21)
0.26

0.64
0.53

0.45

(0.47)

0.11

loss of joint venture  . . . . . . . . .

0.01

—

—

Income (loss) from 

continuing operations . . . . . . . .

0.46

(0.47)

Discontinued operations, 

net of tax . . . . . . . . . . . . . . . . .

—

0.02

0.11

0.02

Net income (loss) . . . . . . . . . . . . .

0.46%

(0.45)%

0.13%

 
 
 
 
14

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

continued

Gross Profit 
Gross profit as a percentage of net sales (“gross margin”) during 
fiscal 2008 was 4.84%, a 14 basis point increase from 4.70% in 
fiscal  2007.  The  increase  in  gross  margin  is  primarily  attributable 
to continued improvements in our inventory and pricing manage-
ment  practices  in  Europe  as  well  as  continued  changes  in  the 
customer and product mix worldwide, partially offset by the com-
petitive pricing conditions in the Americas. 

Gross margin during fiscal 2007 was 4.70%, a decrease from 
4.99%  in  fiscal  2006.  The  decrease  in  gross  margin  is  primarily 
attributable  to  the  more  challenging  pricing  environment  in 
Europe, particularly in the second quarter of fiscal 2007 and the 
internal distractions of management related to the final phases of 
our comprehensive IT systems upgrade and harmonization project 
and  the  implementation  of  the  restructuring  program  in  Europe, 
as discussed above. Since the completion of these initiatives dur-
ing the third quarter of fiscal 2007, we saw our European opera-
tions  begin  to  stabilize  and  gross  margins  in  the  region  improve 
sequentially during the third and fourth quarters of fiscal 2007. 

We continue to remain cautiously optimistic as the competitive 
environment and changes in general economic conditions within 
the markets in which we conduct business may hinder our ability 
to  maintain  and/or  continue  to  improve  gross  margin  from  its 
current level. 

Operating Expenses 
Selling, general and administrative expenses (“SG&A”) 
SG&A  as  a  percentage  of  net  sales  decreased  to  3.91%  in  fiscal 
2008, compared to 3.98% in fiscal 2007. The decrease in SG&A 
as a percentage of net sales in fiscal 2008 is primarily the result of 
improvements  in  credit  performance,  productivity  improvements 
and the leveraging of our fixed costs in Europe, offset by strategic 
investments  made  in  personnel  and  information  systems  to 
support our long-term growth and productivity initiatives. 

In  absolute  dollars,  worldwide  SG&A  increased  by  $64.3  mil-
lion  in  fiscal  2008  compared  to  fiscal  2007.  The  year-over-year 
increase  in  SG&A  is  primarily  attributable  to  the  stronger  euro 
(cid:86)(cid:69)(cid:82)(cid:83)(cid:85)(cid:83)(cid:0) (cid:84)(cid:72)(cid:69)(cid:0) (cid:53)(cid:14)(cid:51)(cid:14)(cid:0) (cid:68)(cid:79)(cid:76)(cid:76)(cid:65)(cid:82)(cid:12)(cid:0) (cid:65)(cid:78)(cid:0) (cid:73)(cid:78)(cid:67)(cid:82)(cid:69)(cid:65)(cid:83)(cid:69)(cid:0) (cid:73)(cid:78)(cid:0) (cid:76)(cid:65)(cid:66)(cid:79)(cid:82)(cid:0) (cid:67)(cid:79)(cid:83)(cid:84)(cid:83)(cid:0) (cid:84)(cid:79)(cid:0) (cid:83)(cid:85)(cid:80)(cid:80)(cid:79)(cid:82)(cid:84)(cid:0) (cid:79)(cid:85)(cid:82)(cid:0)
longer-term  growth  initiatives,  start-up  and  other  operating 
expenses related to the Brightstar joint venture (which is consoli-
dated  for  financial  statement  reporting  purposes)  and  an  addi-
tional $2.3 million of stock compensation expense related to SFAS 
No. 123R. These increases were partially offset by a reduction in 

credit costs, as discussed above, and cost decreases of $8.6 million 
of external consulting costs related to the European restructuring 
program  incurred  during  fiscal  2007  that  did  not  recur  in 
fiscal 2008. 

SG&A as a percentage of net sales decreased to 3.98% in fiscal 
2007, compared to 4.04% in fiscal 2006. The decrease in SG&A as 
a  percentage  of  net  sales  in  fiscal  2007  is  the  result  of  improve-
ments  in  productivity,  particularly  in  Europe,  where  we  began  to 
realize the benefits associated with our restructuring efforts. 

In  absolute  dollars,  worldwide  SG&A  increased  by  $22.8  mil-
lion in fiscal 2007 compared to fiscal 2006. The increase in SG&A 
in fiscal 2007 is primarily attributable to an increase in credit costs 
in both the Americas and Europe due to higher than anticipated 
bankruptcies and other credit losses, increased labor costs in the 
(cid:33)(cid:77)(cid:69)(cid:82)(cid:73)(cid:67)(cid:65)(cid:83)(cid:12)(cid:0) (cid:65)(cid:0) (cid:83)(cid:84)(cid:82)(cid:79)(cid:78)(cid:71)(cid:69)(cid:82)(cid:0) (cid:69)(cid:85)(cid:82)(cid:79)(cid:0) (cid:86)(cid:69)(cid:82)(cid:83)(cid:85)(cid:83)(cid:0) (cid:84)(cid:72)(cid:69)(cid:0) (cid:53)(cid:14)(cid:51)(cid:14)(cid:0) (cid:68)(cid:79)(cid:76)(cid:76)(cid:65)(cid:82)(cid:0) (cid:73)(cid:78)(cid:0) (cid:70)(cid:73)(cid:83)(cid:67)(cid:65)(cid:76)(cid:0) (cid:18)(cid:16)(cid:16)(cid:23)(cid:0)
compared to fiscal 2006, and an additional $8.0 million of com-
pensation  expense  related  to  the  adoption  of  SFAS  No.  123R  in 
fiscal 2007. These increases were offset in part by the productivity 
improvements and benefits realized in Europe from the restructur-
ing program, which we completed during the third fiscal quarter 
of  2007.  SG&A  includes  external  consulting  costs  related  to  the 
European restructuring program of $8.6 million and $9.6 million 
for fiscal 2007 and 2006, respectively. 

Goodwill Impairment 
In fiscal 2007, due to certain indicators of impairment within our 
European reporting unit, the Company performed an impairment 
test  for  goodwill  as  of  July  31,  2006.  This  testing  included  the 
determination  of  the  European  reporting  unit’s  fair  value  using 
market  multiples  and  discounted  cash  flows  modeling.  The 
Company’s  reduced  earnings  and  cash  flow  forecast  for  our 
European  region  resulted  in  the  Company  determining  that  a 
goodwill impairment charge was necessary. As of July 31, 2006, 
the Company recorded a $136.1 million non-cash charge for the 
goodwill impairment in Europe. 

Restructuring Charges 
Restructuring charges were $16.1 million and $23.8 million during 
fiscal  2008  and  2007,  respectively.  As  further  discussed  below, 
these  restructuring  charges  include  the  charges  related  to  the 
closure of the German logistics center, announced in the second 
quarter  of  fiscal  2008,  and  charges  related  to  the  European 
restructuring program completed in October 2006. 

Tech Data Corporation

15

Closure of European Logistics Center 
On May 1, 2007, our Board of Directors approved the exit from 
our logistics center in Germany (the “Moers logistics center”). 
The  decision  to  exit  this  logistics  center  was  made  to  enable 
the Company to capitalize on the long-term synergies of hav-
ing one logistics center serving Germany, Austria and the Czech 
Republic and to reduce the Company’s expenses. In connection 
with the Moers logistics center exit, Tech Data is expanding its 
logistics  center  located  in  Bor,  Czech  Republic.  The  Company 
expects the net result of these transactions to be a reduction in 
our future operating expenses. 

During  the  year  ended  January  31,  2008,  the  Company 
completed  its  exit  of  the  Moers  logistics  facility  and  recorded 
$18.1  million  in  restructuring  charges  related  to  the  closure, 
comprised  of  $8.7  million  of  workforce  reductions  and  $9.4 
million for facility costs and other fixed asset write-offs. 

European Restructuring Program 
As discussed earlier in this MD&A, in May 2005, we announced 
a  formal  restructuring  program  to  better  align  the  European 
operating cost structure with the business environment prevail-
ing at the time. As of October 31, 2006, the initiatives related 
to the European restructuring program had been completed. 

During  fiscal  2008,  we  recorded  credits  of  $2.0  million 
related to changes in estimates of previously recorded restruc-
turing  accruals,  comprised  of  a  $1.6  million  credit  for  facility 
costs and a $0.4 million credit for workforce reductions. During 
fiscal 2007, we incurred $23.8 million related to the restructur-
ing program, comprised of $20.0 million for workforce reduc-
tions and $3.8 million for facility costs. In total, from inception 
through completion of the program, we incurred $54.7 million 
related to the restructuring program, comprised of $38.9 million 
for workforce reductions and $15.8 million for facility costs. 

Loss on Disposal of Subsidiaries 
We incurred losses on the disposal of subsidiaries of $14.5 million 
during fiscal 2008 for charges related to both the closure of our 
(cid:53)(cid:33)(cid:37)(cid:0) (cid:79)(cid:80)(cid:69)(cid:82)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:83)(cid:0) (cid:65)(cid:78)(cid:68)(cid:0) (cid:84)(cid:72)(cid:69)(cid:0) (cid:83)(cid:65)(cid:76)(cid:69)(cid:0) (cid:79)(cid:70)(cid:0) (cid:79)(cid:85)(cid:82)(cid:0) (cid:41)(cid:83)(cid:82)(cid:65)(cid:69)(cid:76)(cid:0) (cid:79)(cid:80)(cid:69)(cid:82)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:83)(cid:14)(cid:0) (cid:52)(cid:72)(cid:69)(cid:0) (cid:4)(cid:17)(cid:20)(cid:14)(cid:21)(cid:0)
million loss includes $10.8 million of losses related to the closure 
(cid:79)(cid:70)(cid:0)(cid:79)(cid:85)(cid:82)(cid:0)(cid:53)(cid:33)(cid:37)(cid:0)(cid:79)(cid:80)(cid:69)(cid:82)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:83)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:65)(cid:0)(cid:4)(cid:19)(cid:14)(cid:23)(cid:0)(cid:77)(cid:73)(cid:76)(cid:76)(cid:73)(cid:79)(cid:78)(cid:0)(cid:76)(cid:79)(cid:83)(cid:83)(cid:0)(cid:82)(cid:69)(cid:76)(cid:65)(cid:84)(cid:69)(cid:68)(cid:0)(cid:84)(cid:79)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:83)(cid:65)(cid:76)(cid:69)(cid:0)(cid:79)(cid:70)(cid:0)
(cid:79)(cid:85)(cid:82)(cid:0) (cid:41)(cid:83)(cid:82)(cid:65)(cid:69)(cid:76)(cid:0) (cid:79)(cid:80)(cid:69)(cid:82)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:83)(cid:14)(cid:0) (cid:52)(cid:72)(cid:69)(cid:0) (cid:76)(cid:79)(cid:83)(cid:83)(cid:0) (cid:82)(cid:69)(cid:76)(cid:65)(cid:84)(cid:69)(cid:68)(cid:0) (cid:84)(cid:79)(cid:0) (cid:84)(cid:72)(cid:69)(cid:0) (cid:67)(cid:76)(cid:79)(cid:83)(cid:85)(cid:82)(cid:69)(cid:0) (cid:79)(cid:70)(cid:0) (cid:79)(cid:85)(cid:82)(cid:0) (cid:53)(cid:33)(cid:37)(cid:0)
operations includes a $9.8 million impairment on our investment 
(cid:73)(cid:78)(cid:0) (cid:84)(cid:72)(cid:69)(cid:0) (cid:53)(cid:33)(cid:37)(cid:0) (cid:68)(cid:85)(cid:69)(cid:0) (cid:84)(cid:79)(cid:0) (cid:65)(cid:0) (cid:70)(cid:79)(cid:82)(cid:69)(cid:73)(cid:71)(cid:78)(cid:0) (cid:67)(cid:85)(cid:82)(cid:82)(cid:69)(cid:78)(cid:67)(cid:89)(cid:0) (cid:69)(cid:88)(cid:67)(cid:72)(cid:65)(cid:78)(cid:71)(cid:69)(cid:0) (cid:76)(cid:79)(cid:83)(cid:83)(cid:0) (cid:8)(cid:80)(cid:82)(cid:69)(cid:86)(cid:73)(cid:79)(cid:85)(cid:83)(cid:76)(cid:89)(cid:0)
recorded  in  shareholders’  equity  as  a  component  of  other  com-
prehensive income) and $1.0 million in severance costs and certain 
asset write-offs related to the exit. The $3.7 million loss related to 

the sale of our Israel operations includes a $2.7 million impairment 
on  our  investment  in  Israel  due  to  a  foreign  currency  exchange 
loss (previously recorded in shareholders’ equity as a component 
of  other  comprehensive  income)  and  $1.0  million  in  selling  costs 
(see  further  discussion  in  Note  7  of  Notes  to  Consolidated 
Financial Statements). 

Interest Expense, Discount on Sale of Accounts Receivable, 
Interest Income, Foreign Currency Exchange Gains/Losses 
Interest expense decreased 25.3% to $28.8 million in fiscal 2008 
compared to $38.5 million in the prior year. The decrease in inter-
est expense in fiscal 2008 is primarily attributable to two factors. 
First, we issued $350.0 million of convertible senior debentures in 
the  fourth  quarter  of  fiscal  2007,  which  bear  interest  at  2.75%. 
Second, we improved our daily management of our cash conver-
sion  cycle,  which  resulted  in  lower  average  outstanding  debt 
balances. The interest expense reduction resulting from these two 
factors  was  partially  offset  by  higher  interest  rates  on  revolving 
credit loans during fiscal 2008 compared to the prior year. 

Interest  expense  increased  22.5%  to  $38.5  million  in  fiscal 
2007  compared  to  $31.4  million  in  fiscal  2006.  The  increase  in 
interest  expense  in  fiscal  2007  is  primarily  attributable  to  the 
repurchase of the $290.0 million convertible subordinated deben-
tures  in  the  fourth  quarter  of  fiscal  2006  using  revolving  credit 
facilities,  which  have  higher  short-term  borrowing  rates.  In  addi-
tion, average short-term interest rates increased in comparison to 
the prior fiscal year, resulting in an increase in interest expense in 
fiscal 2007 compared to fiscal 2006. 

Discount  on  the  sale  of  accounts  receivable  totaled  $7.2  mil-
lion,  $12.5  million  and  $5.5  million,  respectively,  in  fiscal  2008, 
2007  and  2006.  The  discount  is  associated  with  the  accounts 
receivable  purchase  facility  agreements  executed  in  fiscal  2006 
(see further discussion below in this MD&A and in Note 4 of Notes 
to  Consolidated  Financial  Statements).  The  decrease  in  the  dis-
count on sale of accounts receivables in fiscal 2008 compared to 
fiscal 2007 is primarily related to a decrease in the average period 
outstanding  of  the  accounts  receivables  sold  during  fiscal  2008 
compared  to  fiscal  2007.  The  increase  in  the  discount  on  sale  of 
accounts  receivable  from  fiscal  2006  to  fiscal  2007  reflects  the 
fact  that  the  Company  began  selling  accounts  receivable  under 
the program in the second quarter of fiscal 2006 which resulted in 
an  increase  in  the  average  amount  of  accounts  receivables  sold 
under the programs and an increase in the discount rates charged 
in fiscal 2007 compared to fiscal 2006. 

16

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

continued

Interest income increased 38.2% to $13.5 million in fiscal 2008 
compared  to  $9.8  million  in  fiscal  2007.  The  increase  in  interest 
income during fiscal 2008 is primarily attributable to higher aver-
age  cash  balances  available  for  investment  and  higher  interest 
rates  earned  on  short-term  cash  investments  compared  to  the 
prior year. Interest income increased 31.5% to $9.8 million in fiscal 
2007  compared  to  $7.4  million  in  fiscal  2006.  The  increase  in 
interest  income  during  fiscal  2007  compared  to  fiscal  2006  is 
primarily attributable to higher interest rates earned on short-term 
cash  investments  and  higher  average  investment  balances 
compared to the prior fiscal year. 

We realized a net foreign currency exchange gain of $4.0 mil-
lion in fiscal 2008 compared to a net foreign currency exchange 
gain  of  $0.1  million  in  fiscal  2007  and  a  net  foreign  currency 
exchange loss of $1.8 million during fiscal 2006. We recognize net 
foreign  currency  exchange  gains  and  losses  primarily  due  to  the 
(cid:70)(cid:76)(cid:85)(cid:67)(cid:84)(cid:85)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:73)(cid:78)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:86)(cid:65)(cid:76)(cid:85)(cid:69)(cid:0)(cid:79)(cid:70)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:53)(cid:14)(cid:51)(cid:14)(cid:0)(cid:68)(cid:79)(cid:76)(cid:76)(cid:65)(cid:82)(cid:0)(cid:86)(cid:69)(cid:82)(cid:83)(cid:85)(cid:83)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:69)(cid:85)(cid:82)(cid:79)(cid:12)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:84)(cid:79)(cid:0)(cid:65)(cid:0)
lesser extent, versus other currencies. It continues to be our goal 
to  minimize  foreign  currency  exchange  gains  and  losses  through 
an  effective  hedging  program.  Our  hedging  policy  prohibits 
speculative foreign currency exchange transactions. 

Minority Interest in Net Loss of Joint Venture 
Minority  interest  was  $3.6  million  in  fiscal  2008  and  reflects  the 
loss  of  our  European  joint  venture  attributable  to  Brightstar 
Corporation’s  ownership  share  in  the  joint  venture.  The  minority 
interest represents Brightstar Corporation’s share of the joint ven-
ture losses, which is comprised primarily of start-up costs, as the 
joint  venture  is  a  consolidated  subsidiary  in  our  financial  state-
ments. The joint venture commenced sales in the third quarter of 
fiscal 2008, but sales to date have not been significant. 

Provision for Income Taxes 
Our effective tax rate for continuing operations was 38.4% in fis-
cal 2008 and (122.2)% in fiscal 2007. The change in the effective 
tax rate during fiscal 2008 compared to fiscal 2007 is primarily the 
result of the fiscal 2007 goodwill impairment in Europe of $136.1 
million, which is non-deductible for tax purposes, and an increase 
in net operating losses in certain tax jurisdictions for which no tax 
benefit  was  recognized.  The  change  in  the  effective  tax  rate 
between  fiscal  2008  and  fiscal  2007  was  also  impacted  by  the 
reversal  of  a  $7.5  million  deferred  tax  valuation  allowance  for 
Brazil in the fourth quarter of fiscal 2008. The reversal of the $7.5 
million valuation allowance was recorded as an income tax benefit 
(see  Note  11  of  Notes  to  Consolidated  Financial  Statements  for 
further  discussion).  In  addition,  in  fiscal  2007,  we  recorded  an 

increase in the deferred tax valuation allowance related to certain 
jurisdictions  in  Europe  of  $8.4  million  related  to  net  operating 
losses recorded in previous years. 

On  an  absolute  dollar  basis,  the  provision  for  income  taxes 
increased 17.4% to $65.2 million in fiscal 2008 compared to $55.5 
million  in  fiscal  2007.  The  increase  in  the  provision  for  income 
taxes  is  primarily  the  result  of  increased  income  within  both  the 
Americas and Europe in fiscal 2008 compared to fiscal 2007, off-
set by the $7.5 million reversal of the Brazilian valuation allowance 
on deferred tax assets discussed above and the effect of the $8.4 
million increase in the deferred tax valuation allowance related to 
certain jurisdictions in fiscal 2007. 

Our effective tax rate for continuing operations was (122.2)% 
in fiscal 2007 and 82.6% in fiscal 2006. The change in the effective 
tax rate during fiscal 2007 compared to fiscal 2006 is primarily the 
result  of  the  previously  discussed  goodwill  impairment  in  Europe 
of  $136.1  million,  which  is  non-deductible  for  tax  purposes,  and 
an increase in net operating losses in certain tax jurisdictions for 
which  no  tax  benefit  was  recognized.  Additionally,  we  recorded 
an  increase  in  the  deferred  tax  valuation  allowance  related  to 
certain jurisdictions in Europe of $8.4 million and $56.0 million in 
fiscal years 2007 and 2006, respectively, related to net operating 
losses recorded in previous years. On an absolute dollar basis, the 
provision  for  income  taxes  decreased  49.1%  to  $55.5  million  in 
fiscal 2007 as compared to $109.0 million in fiscal 2006 primarily 
as a result of the decrease in the adjustment to the deferred tax 
asset valuation allowance. 

While  we  believe  our  restructuring  efforts  are  improving  the 
operating performance within the European operations, we deter-
mined  the  respective  increases  in  the  valuation  allowances  on 
deferred tax assets in fiscal 2007 to be appropriate due to cumula-
tive losses realized or expected to be realized within the respective 
fiscal year, after considering the effect of prudent and feasible tax 
planning  strategies.  To  the  extent  we  generate  future  consistent 
taxable  income  within  those  operations  currently  requiring  the 
valuation  allowance,  the  valuation  allowance  on  the  related 
deferred tax assets will be reduced, thereby reducing tax expense 
and increasing net income in the same period. The underlying net 
operating loss carryforwards remain available to offset future tax-
able  income  in  the  specific  jurisdictions  requiring  the  valuation 
allowance, subject to applicable tax laws and regulations. 

(cid:52)(cid:72)(cid:69)(cid:0) (cid:69)(cid:70)(cid:70)(cid:69)(cid:67)(cid:84)(cid:73)(cid:86)(cid:69)(cid:0) (cid:84)(cid:65)(cid:88)(cid:0) (cid:82)(cid:65)(cid:84)(cid:69)(cid:0) (cid:68)(cid:73)(cid:70)(cid:70)(cid:69)(cid:82)(cid:69)(cid:68)(cid:0) (cid:70)(cid:82)(cid:79)(cid:77)(cid:0) (cid:84)(cid:72)(cid:69)(cid:0) (cid:53)(cid:14)(cid:51)(cid:14)(cid:0) (cid:70)(cid:69)(cid:68)(cid:69)(cid:82)(cid:65)(cid:76)(cid:0) (cid:83)(cid:84)(cid:65)(cid:84)(cid:85)(cid:84)(cid:79)(cid:82)(cid:89)(cid:0)
rate of 35% during these periods due to the relative mix of earn-
ings  or  losses  within  the  tax  jurisdictions  in  which  we  operate 
around the world such as: a) losses in tax jurisdictions where we 

Tech Data Corporation

17

(cid:65)(cid:82)(cid:69)(cid:0)(cid:78)(cid:79)(cid:84)(cid:0)(cid:65)(cid:66)(cid:76)(cid:69)(cid:0)(cid:84)(cid:79)(cid:0)(cid:82)(cid:69)(cid:67)(cid:79)(cid:82)(cid:68)(cid:0)(cid:65)(cid:0)(cid:84)(cid:65)(cid:88)(cid:0)(cid:66)(cid:69)(cid:78)(cid:69)(cid:70)(cid:73)(cid:84)(cid:27)(cid:0)(cid:66)(cid:9)(cid:0)(cid:69)(cid:65)(cid:82)(cid:78)(cid:73)(cid:78)(cid:71)(cid:83)(cid:0)(cid:73)(cid:78)(cid:0)(cid:84)(cid:65)(cid:88)(cid:0)(cid:74)(cid:85)(cid:82)(cid:73)(cid:83)(cid:68)(cid:73)(cid:67)(cid:84)(cid:73)(cid:79)(cid:78)(cid:83)(cid:0)
where  we  have  previously  recorded  a  valuation  allowance  on 
(cid:68)(cid:69)(cid:70)(cid:69)(cid:82)(cid:82)(cid:69)(cid:68)(cid:0) (cid:84)(cid:65)(cid:88)(cid:0) (cid:65)(cid:83)(cid:83)(cid:69)(cid:84)(cid:83)(cid:27)(cid:0) (cid:65)(cid:78)(cid:68)(cid:0) (cid:67)(cid:9)(cid:0) (cid:69)(cid:65)(cid:82)(cid:78)(cid:73)(cid:78)(cid:71)(cid:83)(cid:0) (cid:73)(cid:78)(cid:0) (cid:76)(cid:79)(cid:87)(cid:69)(cid:82)(cid:13)(cid:84)(cid:65)(cid:88)(cid:0) (cid:74)(cid:85)(cid:82)(cid:73)(cid:83)(cid:68)(cid:73)(cid:67)(cid:84)(cid:73)(cid:79)(cid:78)(cid:83)(cid:0)
(cid:84)(cid:72)(cid:82)(cid:79)(cid:85)(cid:71)(cid:72)(cid:79)(cid:85)(cid:84)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:87)(cid:79)(cid:82)(cid:76)(cid:68)(cid:0)(cid:70)(cid:79)(cid:82)(cid:0)(cid:87)(cid:72)(cid:73)(cid:67)(cid:72)(cid:0)(cid:78)(cid:79)(cid:0)(cid:53)(cid:14)(cid:51)(cid:14)(cid:0)(cid:84)(cid:65)(cid:88)(cid:69)(cid:83)(cid:0)(cid:72)(cid:65)(cid:86)(cid:69)(cid:0)(cid:66)(cid:69)(cid:69)(cid:78)(cid:0)(cid:80)(cid:82)(cid:79)(cid:86)(cid:73)(cid:68)(cid:69)(cid:68)(cid:0)
because  such  earnings  are  planned  to  be  reinvested  indefinitely 
(cid:79)(cid:85)(cid:84)(cid:83)(cid:73)(cid:68)(cid:69)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:53)(cid:14)(cid:51)(cid:14)(cid:0)

The  overall  effective  tax  rate  will  continue  to  be  dependent 
upon  the  geographic  distribution  of  our  worldwide  earnings  or 
losses and changes in tax laws or interpretations of these laws in 
these operating jurisdictions. We monitor the assumptions used in 
estimating the annual effective tax rate and adjust these estimates 
accordingly.  If  actual  results  differ  from  these  estimates,  future 
income tax expense could be materially affected. 

Our  future  effective  tax  rates  could  be  adversely  affected  by 
lower earnings than anticipated in countries with lower statutory 
rates,  changes  in  the  relative  mix  of  taxable  income  and  taxable 
loss  jurisdictions,  changes  in  the  valuation  of  our  deferred  tax 
assets or liabilities or changes in tax laws or interpretations thereof. 
In  addition,  our  income  tax  returns  are  subject  to  continuous 
examination  by  the  Internal  Revenue  Service  and  other  tax 
authorities.  We  regularly  assess  the  likelihood  of  adverse  out-
comes from these examinations to determine the adequacy of our 
provision for income taxes. To the extent we prevail in matters for 
which  accruals  have  been  established  or  are  required  to  pay 
amounts in excess of such accruals, our effective tax rate could be 
materially affected. 

Discontinued Operations, Net of Tax 
The  results  of  operations  and  the  gain  on  sale  of  the  Training 
Business  have  been  reclassified  and  presented  as  “discontinued 
operations,  net  of  tax,”  within  the  Consolidated  Statement  of 
Operations  for  all  periods  presented.  In  fiscal  2007,  we  realized 
income from discontinued operations, net of tax, of $3.9 million, 
comprised  of  a  $3.8  million  gain,  net  of  tax,  on  the  sale  of  the 
Training  Business  and  $0.1  million  of  income  from  operations  of 
the Training Business prior to the sale in March 2006. We realized 
$3.6 million of income from discontinued operations, net of tax, 
in fiscal 2006.

Impact of Inflation 

During the fiscal years ended January 31, 2008, 2007 and 2006, 
we  do  not  believe  that  inflation  had  a  material  impact  on  our 
consolidated operations or on our financial position.

Quarterly Data—Seasonality 

Our quarterly operating results have fluctuated significantly in the 
past  and  will  likely  continue  to  do  so  in  the  future  as  a  result  of 
currency  fluctuations  and  seasonal  variations  in  the  demand  for 
the  products  and  services  we  offer.  Narrow  operating  margins 
may magnify the impact of these factors on our operating results. 
Recent historical seasonal variations have included an increase in 
European demand during our fiscal fourth quarter and decreased 
demand  in  other  fiscal  quarters,  particularly  quarters  which 
include  summer  months.  Given  that  a  significant  portion  of  our 
revenues  are  derived  from  Europe,  the  worldwide  results  closely 
follow the seasonality trends in Europe. Additionally, the life cycles 
of major products, as well as the impact of future acquisitions and 
dispositions,  may  also  materially  impact  our  business,  financial 
condition,  or  results  of  operations.  See  Note  16  of  Notes  to 
Consolidated  Financial  Statements  for  further  information 
regarding our quarterly results.

Liquidity and Capital Resources 

Our discussion of liquidity and capital resources includes an analy-
sis  of  our  cash  flows  and  capital  structure,  which  includes  both 
continuing and discontinued operations for all periods presented. 
The  absence  of  cash  flows  from  discontinued  operations  is  not 
expected to affect the Company’s future liquidity. 

The  following  table  summarizes  Tech  Data’s  Consolidated 
Statement  of  Cash  Flows  for  the  fiscal  years  ended  January  31, 
2008, 2007 and 2006:

Years ended January 31, 

2008

2007

2006

(In thousands)

Net cash provided by (used in):

Operating activities . . . . . . . . . $ 357,422
Investing activities . . . . . . . . . .
(52,701)
Financing activities . . . . . . . . .
(136,933)
 Effect of exchange rate 
changes on cash and 
cash equivalents . . . . . . . . .

14,546

Net increase (decrease) in 

$ (13,988)
(23,666)
121,753

$ 257,439
(51,583)
(235,438)

24,242

(8,809)

cash and cash equivalents. . . . $ 182,334

$108,341

$ (38,391)

 
18

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

continued

Net cash provided by operating activities was $357.4 million in 
fiscal 2008 compared to $14.0 million of cash used in operations 
in fiscal 2007. The $357.4 million cash provided by operations in 
fiscal  2008  was  due  primarily  to  our  earnings  and  the  timing  of 
both cash receipts from our customers and payments to our ven-
dors.  We  continue  to  focus  on  working  capital  management  by 
monitoring  several  key  metrics,  including  our  cash  conversion 
cycle  (also  referred  to  as  “net  cash  days”)  and  owned  inventory 
levels, that we use to manage our working capital. Our net cash 
days are defined as days of sales outstanding in accounts receiv-
able  (“DSO”)  plus  days  of  supply  on  hand  in  inventory  (“DOS”), 
less days of purchases outstanding in accounts payable (“DPO”). 
Owned  inventory  is  calculated  as  the  difference  between  our 
inventory  and  accounts  payable  balances  divided  into  the  inven-
tory balance. Our net cash days improved to 28 days at the end of 
fiscal  2008  compared  to  30  days  at  the  end  of  fiscal  2007.  Our 
owned  inventory  level  (the  percentage  of  inventory  not  financed 
by  our  vendor  partners)  was  a  negative  39%  at  the  end  fiscal 
2008,  meaning  our  accounts  payable  balances  exceeded  our 
inventory  balances  by  39%.  This  compares  to  negative  owned 
inventory of 29% at the end fiscal 2007. 

The  following  table  presents  the  components  of  Tech  Data’s 
cash  conversion  cycle,  in  days,  as  of  January  31,  2008,  2007 
and 2006:

Days of sales outstanding . . . . . . . . . . . . . . .
Days of supply in inventory . . . . . . . . . . . . . .
Days of purchases outstanding . . . . . . . . . . .

Cash conversion cycle (days)  . . . . . . . . . . . .

As of January 31,

2008

2007

2006

37
24
(33)

28

37
24
(31)

30

36
26
(33)

29

Net  cash  used  in  investing  activities  of  $52.7  million  during 
fiscal  2008  was  primarily  the  result  of  our  purchase  of  certain 
assets from Actebis Switzerland AG for $21.5 million and capital 
expenditures  of  $38.4  million  for  the  continuing  expansion  and 
upgrading  of  our  IT  systems,  office  facilities  and  equipment  for 
our  logistics  centers,  offset  by  $7.2  million  of  proceeds  received 
from  the  sale  of  our  Israel  operations.  We  expect  to  make  total 
capital  expenditures  of  approximately  $40.0  million  during  fiscal 
2009 for equipment and machinery in our logistics centers, office 
facilities and IT systems. 

Net  cash  used  in  investing  activities  of  $23.7  million  during 
fiscal 2007 was primarily due to $43.7 million of expenditures for 
the continuing expansion and upgrading of our IT systems, office 
facilities  and  equipment  for  our  logistics  centers,  offset  by 
$16.5  million  proceeds  received  from  the  sale  of  the  Training 
Business  and  $3.6  million  of  proceeds  from  the  sale  of  property 
and equipment. 

Net  cash  used  in  financing  activities  of  $136.9  million  during 
fiscal 2008 primarily reflects $56.3 million of net repayments on 
our  revolving  credit  lines  and  long-term  debt  and  $100.0  million 
used in the repurchase of 2,698,654 shares of our common stock, 
offset by $12.5 million in proceeds received for the reissuance of 
treasury  stock  related  to  the  exercises  of  equity-based  incentives 
and  purchases  made  through  our  Employee  Stock  Purchase  Plan 
(“ESPP”) and $9.0 million of capital contributions from our partner 
in the European joint venture discussed above. 

Net cash provided by financing activities of $121.8 million dur-
ing  fiscal  2007  is  primarily  the  result  of  net  proceeds  of  $342.6 
million received from the issuance of $350.0 million of convertible 
debentures in December 2006, $25.2 million in proceeds received 
for the reissuance of treasury stock related to exercises of equity-
based incentives and purchases made through our ESPP, offset by 
$166.4 million of net repayments on our revolving credit lines and 
long-term debt and the use of $80.1 million for the repurchase of 
2,222,720 shares of our common stock. 

As  of  January  31,  2008,  we  maintained  a  Receivables 
Securitization  Program  with  a  syndicate  of  banks,  amended  in 
December 2007, which allows us to transfer an undivided interest 
(cid:73)(cid:78)(cid:0) (cid:65)(cid:0) (cid:68)(cid:69)(cid:83)(cid:73)(cid:71)(cid:78)(cid:65)(cid:84)(cid:69)(cid:68)(cid:0) (cid:80)(cid:79)(cid:79)(cid:76)(cid:0) (cid:79)(cid:70)(cid:0) (cid:53)(cid:14)(cid:51)(cid:14)(cid:0) (cid:65)(cid:67)(cid:67)(cid:79)(cid:85)(cid:78)(cid:84)(cid:83)(cid:0) (cid:82)(cid:69)(cid:67)(cid:69)(cid:73)(cid:86)(cid:65)(cid:66)(cid:76)(cid:69)(cid:12)(cid:0) (cid:79)(cid:78)(cid:0) (cid:65)(cid:78)(cid:0) (cid:79)(cid:78)(cid:71)(cid:79)(cid:73)(cid:78)(cid:71)(cid:0)
basis, to provide security or collateral for borrowings up to $305.0 
million.  We  pay  interest  (rate  of  5.16%  at  January  31,  2008)  on 
the Receivables Securitization  Program at designated commercial 
paper  rates  plus  an  agreed-upon  margin.  Additionally,  we  main-
tained  a  $250.0  million  Multi-currency  Revolving  Credit  Facility 
with a syndicate of banks, amended in March 2007, which expires 
in  March  2012.  We  pay  interest  (rate  of  3.77%  at  January  31, 
2008) under this facility at the applicable LIBOR rate plus a margin 
based  on  our  credit  ratings.  In  addition  to  these  credit  facilities, 
we  maintained  lines  of  credit  and  overdraft  facilities  totaling 
approximately  $768.5  million  at  January  31,  2008  (average 
interest rate on the borrowing was 5.33% at January 31, 2008). 

Tech Data Corporation

19

The  total  capacity  of  the  aforementioned  credit  facilities  was 
approximately $1.3 billion, of which $18.3 million was outstanding 
at January 31, 2008. Our credit agreements contain limitations on 
the  amounts  of  annual  dividends  and  repurchases  of  common 
stock. Additionally, the credit agreements require compliance with 
certain  warranties  and  covenants.  The  financial  ratio  covenants 
contained within the credit agreements include a debt to capital-
ization ratio, an interest to EBITDA (earnings before interest, taxes, 
deprecation  and  amortization)  ratio,  and  a  tangible  net  worth 
requirement. At January 31, 2008, we were in compliance with all 
such covenants. The ability to draw funds under these credit facili-
ties  is  dependent  upon  sufficient  collateral  (in  the  case  of  the 
Receivables  Securitization  Program)  and  meeting  the  aforemen-
tioned financial covenants, which may limit our ability to draw the 
full amount of these facilities. As of January 31, 2008, the maxi-
mum  amount  that  could  be  borrowed  under  these  facilities,  in 
consideration  of  the  availability  of  collateral  and  the  financial 
covenants, was approximately $753.1 million. 

At January 31, 2008, we had issued standby letters of credit of 
$26.2 million. These letters of credit typically act as a guarantee of 
payment to certain third parties in accordance with specified terms 
and conditions. The issuance of these letters of credit reduces our 
available  capacity  under  the  above  mentioned  facilities  by  the 
same amount. 

In  December  2006,  we  issued  $350.0  million  of  convertible 
senior  debentures  due  2026.  The  debentures  bear  interest  at 
2.75%  per  year.  We  pay  interest  on  the  debentures  on  June  15 
and  December  15  of  each  year,  beginning  on  June  15,  2007. 
In  addition,  beginning  with  the  period  commencing  on 
December  20,  2011  and  ending  on  June  15,  2012  and  for  each 
six-month  period  thereafter,  we  will  pay  contingent  interest  on 
the interest payment date for the applicable interest period, if the 
market price of the debentures exceeds specified levels. The con-
vertible senior debentures are convertible into our common stock 
and cash anytime after June 15, 2026, or i) if the market price of 
the  common  stock,  as  defined,  exceeds  135%  of  the  conversion 
price  per  share  of  common  stock,  or  ii)  if  the  Company  calls  the 
debentures for redemption, or iii) upon the occurrence of certain 
corporate transactions, as defined. Holders have the right to con-
vert  the  debentures  into  18.4310  shares  per  $1,000  principal 
amount of debentures, equivalent to a conversion price of approx-
(cid:73)(cid:77)(cid:65)(cid:84)(cid:69)(cid:76)(cid:89)(cid:0) (cid:4)(cid:21)(cid:20)(cid:14)(cid:18)(cid:22)(cid:0) (cid:80)(cid:69)(cid:82)(cid:0) (cid:83)(cid:72)(cid:65)(cid:82)(cid:69)(cid:14)(cid:0) (cid:53)(cid:80)(cid:79)(cid:78)(cid:0) (cid:67)(cid:79)(cid:78)(cid:86)(cid:69)(cid:82)(cid:83)(cid:73)(cid:79)(cid:78)(cid:12)(cid:0) (cid:87)(cid:69)(cid:0) (cid:87)(cid:73)(cid:76)(cid:76)(cid:0) (cid:68)(cid:69)(cid:76)(cid:73)(cid:86)(cid:69)(cid:82)(cid:0) (cid:67)(cid:65)(cid:83)(cid:72)(cid:0)
equal  to  the  lesser  of  the  aggregate  principal  amount  of  the 
debentures  to  be  converted  and  our  total  conversion  obligation 
and  shares  of  our  common  stock  in  respect  of  the  remainder,  if 
any,  of  our  conversion  obligation.  Holders  have  the  option  to 

require  us  to  repurchase  the  debentures  in  cash  on  any  of  the 
fifth,  tenth  or  fifteenth  anniversary  dates  from  the  issue  date  at 
100% of the principal amount plus accrued interest to the repur-
chase date. The debentures are redeemable in whole or in part for 
cash  at  our  option  at  any  time  on  or  after  December  20,  2011. 
Additionally,  the  debentures  are  senior,  unsecured  obligations 
and  rank  equally  in  right  of  payment  with  all  of  our  other  unse-
cured  and  unsubordinated  indebtedness.  The  debentures  are 
effectively  subordinated  to  all  of  our  existing  and  future  secured 
debt  and  are  structurally  subordinated  to  the  indebtedness  and 
other liabilities of our subsidiaries. The proceeds from the offering 
were  used  to  pay  off  short-term  debt  and  for  other  general 
corporate purposes. 

In September 2007, our Board of Directors authorized a share 
repurchase program of up to $100.0 million of our common stock. 
As of January 31, 2008, the share repurchase program authorized 
in September 2007 was complete. During fiscal 2008, we repur-
chased  2,698,654  shares  comprised  of  2,698,126  shares  pur-
chased in connection with the share repurchase program and 528 
shares purchased outside of the stock repurchase program, at an 
average of $37.06 per share, for a total cost, including expenses, 
of $100.0 million. 

In  fiscal  2006,  our  Board  of  Directors  also  authorized  a  share 
repurchase program of up to $200.0 million of our common stock. 
Share  repurchases  under  the  program  were  made  on  the  open 
market through block trades or otherwise. During fiscal 2007, we 
repurchased 2,222,720 shares comprised of 2,220,132 shares pur-
chased  in  conjunction  with  our  share  repurchase  program  and 
2,588 shares purchased outside of the stock repurchase program, 
at  an  average  of  $36.03  per  share,  for  a  total  cost,  including 
expenses,  of  $80.1  million.  As  of  October  31,  2006,  the  share 
repurchase program authorized in fiscal 2006 was completed. 

For our share repurchase programs, the number of shares pur-
chased  and  the  timing  of  the  purchases  was  based  on  working 
capital  requirements,  general  business  conditions  and  other  fac-
tors,  including  alternative  investment  opportunities.  Shares  we 
repurchase  are  held  in  treasury  for  general  corporate  purposes, 
including issuances under employee equity incentive plans. 

Our  debt  to  capital  ratio  was  17%  at  January  31,  2008. 
We  believe  that  our  existing  sources  of  liquidity,  including  cash 
resources and cash provided by operating activities, supplemented 
as necessary with funds available under our credit arrangements, 
will  provide  sufficient  resources  to  meet  our  present  and  future 
working  capital  and  cash  requirements  for  at  least  the  next 
12  months.  Changes  in  our  credit  rating  or  other  market  factors 
may  increase  our  interest  expense  or  other  costs  of  capital,  or 

20

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

continued

capital may not be available to us on acceptable terms to fund our 
working capital needs. The Company will continue to need addi-
tional  financing,  including  debt  financing.  The  inability  to  obtain 
such  sources  of  capital  could  have  an  adverse  effect  on  the 
Company’s business. The Company’s credit facilities contain vari-
ous  financial  and  other  covenants  that  may  limit  the  Company’s 
ability to borrow or limit the Company’s flexibility in responding to 
business conditions.

Contractual Obligations 

As of January 31, 2008, future payments of long-term debt  and 
amounts  due  under  future  minimum  lease  payments,  including 
minimum commitments under IT outsourcing agreements, are as 
follows (in thousands): 

Operating 
leases

Capital 
leases

Long-term
debt

Total

Fiscal year:
2009  . . . . . . . . . . . . . . $ 65,663
54,293
2010. . . . . . . . . . . . . . .
46,138
2011 . . . . . . . . . . . . . . .
27,323
2012 . . . . . . . . . . . . . . .
25,498
2013 . . . . . . . . . . . . . . .
50,810
Thereafter  . . . . . . . . . .

$ 2,253
2,065
2,065
2,065
2,065
8,335

 $

— $ 67,916
56,358
—
48,203
—
379,388
350,000
27,563
—
59,145
—

Total payments . . . . . . .
Less amounts 

representing 
interest . . . . . . . . . . .

Total principal 

269,725

18,848

350,000

638,573

—

(3,966)

—

(3,966)

payments  . . . . . . . . . $ 269,725

$ 14,882

$350,000

$634,607

Fair value renewal and purchase options and escalation clauses 
exist  for  a  substantial  portion  of  the  operating  leases  included 
above.  Purchase  orders  for  the  purchase  of  inventory  and  other 
goods  and  services  are  not  included  in  the  table  above.  We  are 
not  able  to  determine  the  aggregate  amount  of  such  purchase 
orders  that  represent  contractual  obligations,  as  purchase  orders 
typically represent authorizations to purchase rather than binding 
agreements. For the purposes of this table, contractual obligations 
for purchase of goods or services are defined as agreements that 
are enforceable and legally binding on Tech Data and that specify 
all significant terms, including: fixed or minimum quantities to be 
(cid:80)(cid:85)(cid:82)(cid:67)(cid:72)(cid:65)(cid:83)(cid:69)(cid:68)(cid:27)(cid:0) (cid:70)(cid:73)(cid:88)(cid:69)(cid:68)(cid:12)(cid:0) (cid:77)(cid:73)(cid:78)(cid:73)(cid:77)(cid:85)(cid:77)(cid:0) (cid:79)(cid:82)(cid:0) (cid:86)(cid:65)(cid:82)(cid:73)(cid:65)(cid:66)(cid:76)(cid:69)(cid:0) (cid:80)(cid:82)(cid:73)(cid:67)(cid:69)(cid:0) (cid:80)(cid:82)(cid:79)(cid:86)(cid:73)(cid:83)(cid:73)(cid:79)(cid:78)(cid:83)(cid:27)(cid:0) (cid:65)(cid:78)(cid:68)(cid:0) (cid:84)(cid:72)(cid:69)(cid:0)
approximate  timing  of  the  transaction.  Our  purchase  orders  are 
based on our current demand expectations and are fulfilled by our 
vendors  within  short  time  horizons.  We  do  not  have  significant 
non-cancelable agreements for the purchase of inventory or other 
goods specifying minimum quantities or set prices that exceed our 

expected requirements for the next three months. We also enter 
(cid:73)(cid:78)(cid:84)(cid:79)(cid:0) (cid:67)(cid:79)(cid:78)(cid:84)(cid:82)(cid:65)(cid:67)(cid:84)(cid:83)(cid:0) (cid:70)(cid:79)(cid:82)(cid:0) (cid:79)(cid:85)(cid:84)(cid:83)(cid:79)(cid:85)(cid:82)(cid:67)(cid:69)(cid:68)(cid:0) (cid:83)(cid:69)(cid:82)(cid:86)(cid:73)(cid:67)(cid:69)(cid:83)(cid:27)(cid:0) (cid:72)(cid:79)(cid:87)(cid:69)(cid:86)(cid:69)(cid:82)(cid:12)(cid:0) (cid:84)(cid:72)(cid:69)(cid:0) (cid:79)(cid:66)(cid:76)(cid:73)(cid:71)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:83)(cid:0)
under  these  contracts  were  not  significant  and  the  contracts 
generally  contain  clauses  allowing  for  cancellation  without 
significant penalty. 

At  January  31,  2008,  we  have  $13.7  million  recorded  as  a 
current  liability  for  uncertain  tax  positions  under  FIN  48.  We  are 
not able to reasonably estimate the timing of long-term payments, 
or the amount by which our liability will increase or decrease over 
(cid:84)(cid:73)(cid:77)(cid:69)(cid:27)(cid:0) (cid:84)(cid:72)(cid:69)(cid:82)(cid:69)(cid:70)(cid:79)(cid:82)(cid:69)(cid:12)(cid:0) (cid:84)(cid:72)(cid:69)(cid:0) (cid:76)(cid:79)(cid:78)(cid:71)(cid:13)(cid:84)(cid:69)(cid:82)(cid:77)(cid:0) (cid:80)(cid:79)(cid:82)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0) (cid:79)(cid:70)(cid:0) (cid:79)(cid:85)(cid:82)(cid:0) (cid:38)(cid:41)(cid:46)(cid:0) (cid:20)(cid:24)(cid:0) (cid:76)(cid:73)(cid:65)(cid:66)(cid:73)(cid:76)(cid:73)(cid:84)(cid:89)(cid:0)
of  $5.0  million  has  not  been  included  in  the  contractual  obliga-
tions  table  above  (see  Note  11  of  Notes  to  Consolidated 
Financial Statements).

Off-Balance Sheet Arrangements 

Synthetic Lease Facility 
We have a Synthetic Lease facility with a group of financial institu-
tions  under  which  we  lease  certain  logistics  centers  and  office 
facilities  from  a  third-party  lessor.  The  Synthetic  Lease  expires  in 
fiscal 2009 and we intend to renew the lease for an additional five 
years. At any time during the lease term, we may, at our option, 
purchase up to four of the seven properties, at an amount equal 
to each property’s cost. If we elect to remarket the properties, we 
have  guaranteed  the  lessor  a  percentage  of  the  cost  of  each  of 
the properties, in an aggregate  amount of approximately $118.4 
million  (the  “residual  value”).  We  pay  interest  on  the  Synthetic 
Lease at LIBOR plus an agreed-upon margin. The Synthetic Lease 
contains covenants that must be complied with, similar to the cov-
enants described in certain of the credit facilities discussed above 
and  in  Note  9  of  Notes  to  Consolidated  Financial  Statements. 
The  amount  funded  under  the  Synthetic  Lease  (approximately 
$133.2 million at January 31, 2008) is treated as debt under the 
definition  of  the  covenants  required  under  both  the  Synthetic 
Lease and the credit facilities. As of January 31, 2008, we were in 
compliance with all such covenants. 

In January 2007, we sold approximately 6 acres of excess land 
located in Miami, Florida. The sale was executed pursuant to the 
“excess  sale”  provisions  of  the  Synthetic  Lease  agreement  and 
resulted  in  a  gain  of  $3.6  million  recorded  during  the  quarter 
ended January 31, 2007. This gain is included within SG&A in our 
Consolidated Statement of Operations. 

Tech Data Corporation

21

The sum of future minimum lease payments under the Synthetic 
Lease  at  January  31,  2008  was  approximately  $3.8  million. 
Properties leased under the Synthetic Lease facility are located in 
(cid:35)(cid:76)(cid:69)(cid:65)(cid:82)(cid:87)(cid:65)(cid:84)(cid:69)(cid:82)(cid:0) (cid:65)(cid:78)(cid:68)(cid:0) (cid:45)(cid:73)(cid:65)(cid:77)(cid:73)(cid:12)(cid:0) (cid:38)(cid:76)(cid:79)(cid:82)(cid:73)(cid:68)(cid:65)(cid:27)(cid:0) (cid:38)(cid:79)(cid:82)(cid:84)(cid:0) (cid:55)(cid:79)(cid:82)(cid:84)(cid:72)(cid:12)(cid:0) (cid:52)(cid:69)(cid:88)(cid:65)(cid:83)(cid:27)(cid:0) (cid:38)(cid:79)(cid:78)(cid:84)(cid:65)(cid:78)(cid:65)(cid:12)(cid:0)
(cid:35)(cid:65)(cid:76)(cid:73)(cid:70)(cid:79)(cid:82)(cid:78)(cid:73)(cid:65)(cid:27)(cid:0)(cid:51)(cid:85)(cid:87)(cid:65)(cid:78)(cid:69)(cid:69)(cid:12)(cid:0)(cid:39)(cid:69)(cid:79)(cid:82)(cid:71)(cid:73)(cid:65)(cid:27)(cid:0)(cid:51)(cid:87)(cid:69)(cid:68)(cid:69)(cid:83)(cid:66)(cid:79)(cid:82)(cid:79)(cid:12)(cid:0)(cid:46)(cid:69)(cid:87)(cid:0)(cid:42)(cid:69)(cid:82)(cid:83)(cid:69)(cid:89)(cid:27)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:51)(cid:79)(cid:85)(cid:84)(cid:72)(cid:0)
Bend, Indiana. 

The  Synthetic  Lease  has  been  accounted  for  as  an  operating 
lease.  FASB  Interpretation  (“FIN”)  No.  46  requires  us  to  evaluate 
whether an entity with which we are involved meets the criteria of 
a variable interest entity (“VIE”) and, if so, whether we are required 
to  consolidate  that  entity.  We  have  determined  that  the  third-
party  lessor  of  this  synthetic  lease  facility  does  not  meet  the 
criteria of a VIE and, therefore, is not subject to the consolidation 
provisions of FIN No. 46. 

Trade Receivables Purchase Facility Agreements 
We have uncommitted revolving trade receivables purchase facility 
agreements (the “Receivables Facilities”) with third-party financial 
institutions  to  sell  accounts  receivable  on  a  non-recourse  basis. 
We  use  the  Receivables  Facilities  as  a  source  of  working  capital 
funding. The Receivables Facilities limit the amount of purchased 
accounts receivable the financial institutions may hold to $428.2 
million at January 31, 2008, based on currency exchange rates at 
(cid:84)(cid:72)(cid:65)(cid:84)(cid:0) (cid:68)(cid:65)(cid:84)(cid:69)(cid:14)(cid:0) (cid:53)(cid:78)(cid:68)(cid:69)(cid:82)(cid:0) (cid:84)(cid:72)(cid:69)(cid:0) (cid:50)(cid:69)(cid:67)(cid:69)(cid:73)(cid:86)(cid:65)(cid:66)(cid:76)(cid:69)(cid:83)(cid:0) (cid:38)(cid:65)(cid:67)(cid:73)(cid:76)(cid:73)(cid:84)(cid:73)(cid:69)(cid:83)(cid:12)(cid:0) (cid:87)(cid:69)(cid:0) (cid:77)(cid:65)(cid:89)(cid:0) (cid:83)(cid:69)(cid:76)(cid:76)(cid:0) (cid:67)(cid:69)(cid:82)(cid:84)(cid:65)(cid:73)(cid:78)(cid:0)
accounts receivable (the “Receivables”) in exchange for cash less a 
discount  based  on  LIBOR  plus  a  margin.  Such  transactions  have 
been  accounted  for  as  a  true  sale,  in  accordance  with  SFAS  No. 
140,  “Accounting  for  Transfers  and  Servicing  of  Financial  Assets 
and Extinguishment of Liabilities.” The Receivables Facilities, which 
have various expiration dates, require that we continue to service, 
administer and collect the sold accounts receivable. 

During  fiscal  2008,  2007  and  2006,  we  received  gross  pro-
ceeds of $1.2 billion, $1.3 billion and $796.1 million, respectively, 
from the sale of the Receivables and recognized related discounts 
totaling  $7.2  million,  $12.5  million  and  $5.5  million,  respectively. 
The  proceeds,  net  of  the  discount  incurred,  are  reflected  in  the 
Consolidated  Statement  of  Cash  Flows  in  operating  activities 
within cash received from customers and the change in accounts 
receivable. Prior to the second quarter of fiscal 2006, the Company 
did not utilize the Receivables Facilities as a source of funding. 

Guarantees 
As is customary in the IT industry, to encourage certain customers 
to purchase product from us, we have arrangements with certain 
finance  companies  that  provide  inventory-financing  facilities  for 
our customers. In conjunction with certain of these arrangements, 
we  have  agreements  with  the  finance  companies  that  would 
require us to repurchase certain inventory, which might be repos-
sessed from the customers by the finance companies. Due to vari-
ous reasons, including among other items, the lack of information 
regarding the amount of saleable 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. 
Repurchases  of  inventory  by  us  under  these  arrangements  have 
been  insignificant  to  date.  We  also  provide  additional  financial 
guarantees to finance companies on behalf of certain customers. 
The  majority  of  these  guarantees  are  for  an  indefinite  period  of 
time, where we would be required to perform if the customer is in 
default  with  the  finance  company.  The  Company  reviews  the 
underlying credit for these guarantees on at least an annual basis. 
As  of  January  31,  2008  and  2007,  the  aggregate  amount  of 
guarantees under these arrangements totaled approximately $19.4 
million  and  $11.5  million,  respectively,  of  which  approximately 
$14.7  million  and  $7.0  million,  respectively,  was  outstanding. 
We believe that, based on historical experience, the likelihood of a 
material loss pursuant to both of the above guarantees is remote. 
Additionally,  in  connection  with  the  sale  of  the  Training 
Business  discussed  in  Note  3  of  Notes  to  Consolidated  Financial 
Statements, we continue to negotiate the assignment of several of 
the related facility lease obligations with the lessors of such prop-
erties. To the extent the lessors are unwilling to agree to a direct 
lease arrangement with the purchaser, we will remain liable in the 
event  of  default  by  the  purchaser  of  the  Training  Business. 
The majority of these lease obligations expire at various dates over 
the next four years and would require that we make all required 
payments under the lease agreements in the event of default by 
the  purchaser.  The  maximum  potential  amount  of  future  pay-
ments  (undiscounted)  that  we  could  be  required  to  make  under 
the  guarantees  is  approximately  $7.2  million  as  of  January  31, 
2008. We believe that the likelihood of a material loss pursuant to 
these guarantees is remote. 

We  also  provide  residual  value  guarantees  related  to  our 
Synthetic  Lease  which  have  been  recorded  at  the  estimated  fair 
value of the residual value guarantees.

22

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

continued

Qualitative and Quantitative Disclosures 
About Market Risk 

As a large global organization, we face exposure to adverse move-
ments  in  foreign  currency  exchange  rates.  These  exposures  may 
change  over  time  as  business  practices  evolve  and  could  have  a 
material impact on our financial results in the future. In the nor-
mal course of business, we employ established policies and proce-
dures  to  manage  our  exposure  to  fluctuations  in  the  value  of 
foreign currencies. It is our policy to utilize financial instruments to 
reduce risks where internal netting cannot be effectively employed. 
Additionally,  we  do  not  enter  into  derivative  instruments  for 
speculative or trading purposes. 

Our  primary  foreign  currency  exposure  relates  to  transactions 
in  Europe,  where  the  currency  collected  from  customers  can  be 
different from the currency used to purchase the product. During 
fiscal 2008 and 2007, the underlying exposures are denominated 
(cid:80)(cid:82)(cid:73)(cid:77)(cid:65)(cid:82)(cid:73)(cid:76)(cid:89)(cid:0) (cid:73)(cid:78)(cid:0) (cid:84)(cid:72)(cid:69)(cid:0) (cid:70)(cid:79)(cid:76)(cid:76)(cid:79)(cid:87)(cid:73)(cid:78)(cid:71)(cid:0) (cid:67)(cid:85)(cid:82)(cid:82)(cid:69)(cid:78)(cid:67)(cid:73)(cid:69)(cid:83)(cid:26)(cid:0) (cid:53)(cid:14)(cid:51)(cid:14)(cid:0) (cid:68)(cid:79)(cid:76)(cid:76)(cid:65)(cid:82)(cid:12)(cid:0) (cid:34)(cid:82)(cid:73)(cid:84)(cid:73)(cid:83)(cid:72)(cid:0) (cid:80)(cid:79)(cid:85)(cid:78)(cid:68)(cid:12)(cid:0)
Canadian  dollar,  Czech  koruna,  Danish  krone,  euros,  Norwegian 
krone,  Polish  zloty,  Swedish  krona  and  Swiss  franc.  Our  foreign 
currency risk management objective is to protect our earnings and 
cash flows from the adverse impact of exchange rate changes and 
is managed by using foreign currency forward, option and swap 
contracts  to  hedge  both  intercompany  and  third  party  a)  loans, 
b) accounts receivable and c) accounts payable. 

We are also exposed to changes in interest rates primarily as a 
result  of  our  short-term  and  long-term  debt  used  to  maintain 
liquidity and to finance working capital, capital expenditures and 
business expansion. Interest rate risk is also present in the forward 
foreign currency contracts hedging intercompany and third-party 
loans. Our interest rate risk management objective is to limit the 
impact of interest rate changes on earnings and cash flows and to 
minimize overall borrowing costs. To achieve our objective, we use 
a  combination  of  fixed  and  variable  rate  debt.  The  nature  and 
amount of our long-term and short-term debt can be expected to 
vary as a result of future business requirements, market conditions 
and  other  factors.  As  of  January  31,  2008  and  2007,  approxi-
mately 95% and 83%, respectively, of our outstanding debt had 
fixed interest rates. We utilize various financing instruments, such 
as receivables securitization, leases, revolving credit facilities, con-
vertible senior debentures and trade receivable purchase facilities, 
to finance working capital needs. 

In  order  to  provide  an  assessment  of  the  Company’s  foreign 
currency  exchange  rate  and  interest  rate  risk,  the  Company  per-
formed  a  sensitivity  analysis  using  a  value-at-risk  (“VaR”)  model. 
The  VaR  model  consisted  of  using  a  Monte  Carlo  simulation  to 
generate 1,000 random market price paths. The VaR model deter-
mines the potential impact of the fluctuation in foreign exchange 
rates and interest rates assuming a one-day holding period, normal 
market  conditions  and  a  95%  confidence  level.  The  VaR  is  the 
maximum expected loss in fair value for a given confidence inter-
val to the Company’s foreign exchange and debt portfolio due to 
adverse  movements  in  the  rates.  The  model  is  not  intended  to 
represent actual losses but is used as a risk estimation and man-
agement  tool.  Firm  commitments,  assets  and  liabilities  denomi-
nated in foreign currencies were excluded from the model. 

Prior to January 31, 2008, the Company presented market risk 
exposures  using  a  tabular  format.  In  an  effort  to  provide  more 
meaningful  information  as  to  the  Company’s  exposure  to  future 
fluctuations in foreign currency exchange rates and interest rates 
the  Company  has  made  the  change  to  present  market  risk 
exposures using the VaR model. 

The following table represents the estimated maximum poten-
tial  one-day  loss  in  fair  value,  calculated  using  the  VaR  model  at 
January  31,  2008  and  2007.  We  believe  that  the  hypothetical 
loss  in  fair  value  of  our  foreign  exchange  derivatives  would  be 
offset  by  the  gains  in  the  value  of  the  underlying  transactions 
being hedged. 

VaR as of January 31,

2008

2007

(in thousands)

Currency rate sensitive 

financial instruments . . . . . . . . . . . . . . . . . . .

$(2,143.3)

$(1,191.8)

Interest rate sensitive 

financial instruments . . . . . . . . . . . . . . . . . . .

(407.7)

(501.0)

Combined portfolio . . . . . . . . . . . . . . . . . . . . .

$(2,551.0)

$(1,692.8)

Actual future gains and losses associated with the Company’s 
derivative  positions  may  differ  materially  from  the  analyses  per-
formed  as  of  January  31,  2008  due  to  the  inherent  limitations 
associated with predicting the changes in the timing and amount 
of  interest  rates,  foreign  currency  exchanges  rates,  and  the 
Company’s actual exposures and positions.

Tech Data Corporation

23

Risk Factors 

The  following  are  certain  risk  factors  that  could  affect  our  busi-
ness, financial position and results of operations. These risk factors 
should be considered in connection with evaluating the forward-
looking statements contained in this Annual Report because these 
factors  could  cause  the  actual  results  and  conditions  to  differ 
materially from those projected in the forward-looking statements. 
Before you buy our common stock or other securities, you should 
know that making such an investment involves risks, including the 
risks described below. The risks that have been highlighted below 
are not the only risks of our business. If any of the risks actually 
occur,  our  business,  financial  condition  or  results  of  operations 
could be negatively affected. In that case, the trading price of our 
common stock or other securities could decline, and you may lose 
all or part of your investment. Certain risk factors that could cause 
actual results to differ materially from our forward-looking state-
ments include the following: 

Competition 
The Company operates in a highly competitive environment. The 
computer  wholesale  distribution  industry  is  characterized  by 
intense competition, based primarily on product availability, credit 
availability,  price,  speed  of  delivery,  ability  to  tailor  specific  solu-
tions  to  customer  needs,  quality  and  depth  of  product  lines  and 
training, service and support. Weakness in demand in the market 
intensifies  the  competitive  environment  in  which  the  Company 
operates.  The  Company  competes  with  a  variety  of  regional, 
national  and  international  wholesale  distributors,  some  of  which 
have greater financial resources than the Company. The Company 
also faces competition from companies entering or expanding into 
the logistics and product fulfillment and e-commerce supply chain 
services market. 

Narrow Profit Margins 
As  a  result  of  intense  price  competition  in  the  industry,  the 
Company  has  narrow  gross  profit  and  operating  profit  margins. 
These  narrow  margins  magnify  the  impact  on  operating  results 
attributed to variations in sales and operating costs. Future gross 

profit and operating margins may be adversely affected by changes 
in  product  mix,  vendor  pricing  actions  and  competitive  and 
economic pressures. In addition, failure to attract new sources of 
business  from  expansion  of  products  or  services  or  entry  into 
new  markets  may  adversely  affect  future  gross  profit  and 
operating margins. 

Dependence on Information Systems 
The Company is highly dependent upon its internal computer and 
telecommunication systems to operate its business. There can be 
no  assurance  that  the  Company’s  information  systems  will  not 
fail  or  experience  disruptions,  that  the  Company  will  be  able  to 
attract and retain qualified personnel necessary for the operation 
of  such  systems,  that  the  Company  will  be  able  to  expand  and 
improve its information systems, that the Company will be able to 
convert  to  new  systems  efficiently,  or  that  the  Company  will  be 
able  to  integrate  new  programs  effectively  with  its  existing  pro-
grams. Any of such problems could have an adverse effect on the 
Company’s business. 

Acquisitions and Dispositions 
As part of its growth strategy, the Company pursues the acquisi-
tion of companies  that  either  complement or  expand its  existing 
business.  As  a  result,  the  Company  regularly  evaluates  potential 
acquisition opportunities, which may be material in size and scope. 
Acquisitions involve a number of risks and uncertainties, including 
expansion  into  new  geographic  markets  and  business  areas,  the 
requirement to understand local business practices, the diversion 
of  management’s  attention  to  the  assimilation  of  the  operations 
and  personnel  of  the  acquired  companies,  the  possible  require-
ment to upgrade the acquired companies’ management informa-
tion  systems  to  the  Company’s  standards,  potential  adverse 
short-term  effects  on  the  Company’s  operating  results  and  the 
amortization or impairment of any acquired intangible assets. The 
Company also regularly evaluates the divestiture of business units 
which may not meet the Company’s strategic, financial and/or risk 
tolerance objectives. No assurance can be given that the Company 
will be able to dispose of business units on favorable terms or on 
particular timelines. 

24

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

continued

Exposure to Natural Disasters, War and Terrorism 
The  Company’s  headquarters  facilities  and  some  of  its  logistics 
centers  as  well  as  certain  vendors  and  customers  are  located  in 
areas prone to natural disasters such as floods, hurricanes, torna-
does, or earthquakes. In addition, demand for the Company’s ser-
vices is concentrated in major metropolitan areas. Adverse weather 
conditions,  major  electrical  failures  or  other  natural  disasters  in 
these major metropolitan areas may disrupt the Company’s busi-
ness should its ability to distribute products be impacted by such 
an event. 

The Company operates in multiple geographic markets, several 
of  which  may  be  susceptible  to  acts  of  war  and  terrorism.  The 
Company’s business could be adversely affected should its ability 
to distribute products be impacted by such events. 

The  Company  and  many  of  its  suppliers  receive  parts  and 
products from Asia and operate in many parts of the world that 
may  be  susceptible  to  disease  or  epidemic  that  may  disrupt  the 
Company’s  ability  to  receive  or  deliver  products  or  other 
disruptions in operations. 

Dependence on Independent Shipping Companies 
The Company relies on arrangements with independent shipping 
(cid:67)(cid:79)(cid:77)(cid:80)(cid:65)(cid:78)(cid:73)(cid:69)(cid:83)(cid:12)(cid:0)(cid:83)(cid:85)(cid:67)(cid:72)(cid:0)(cid:65)(cid:83)(cid:0)(cid:38)(cid:69)(cid:68)(cid:69)(cid:82)(cid:65)(cid:76)(cid:0)(cid:37)(cid:88)(cid:80)(cid:82)(cid:69)(cid:83)(cid:83)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:53)(cid:78)(cid:73)(cid:84)(cid:69)(cid:68)(cid:0)(cid:48)(cid:65)(cid:82)(cid:67)(cid:69)(cid:76)(cid:0)(cid:51)(cid:69)(cid:82)(cid:86)(cid:73)(cid:67)(cid:69)(cid:12)(cid:0)(cid:70)(cid:79)(cid:82)(cid:0)
the  delivery  of  its  products  from  vendors  and  to  customers. 
The  failure  or  inability  of  these  shipping  companies  to  deliver 
products,  or  the  unavailability  of  their  shipping  services,  even 
temporarily,  could  have  a  material  adverse  effect  on  the 
Company’s business. The Company may also be adversely affected 
by  an  increase  in  freight  surcharges  due  to  rising  fuel  costs  and 
added security. There can be no assurance that Tech Data will be 
able to pass along the full effect of an increase in these surcharges 
to its customers. 

Labor Strikes 
The Company’s labor force is currently non-union with the excep-
tion of employees of certain European and Latin American subsid-
iaries,  which  are  subject  to  collective  bargaining  or  similar 
arrangements.  The  Company  does  business  in  certain  foreign 

countries where labor disruption is more common than is experi-
(cid:69)(cid:78)(cid:67)(cid:69)(cid:68)(cid:0)(cid:73)(cid:78)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:53)(cid:78)(cid:73)(cid:84)(cid:69)(cid:68)(cid:0)(cid:51)(cid:84)(cid:65)(cid:84)(cid:69)(cid:83)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:83)(cid:79)(cid:77)(cid:69)(cid:0)(cid:79)(cid:70)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:70)(cid:82)(cid:69)(cid:73)(cid:71)(cid:72)(cid:84)(cid:0)(cid:67)(cid:65)(cid:82)(cid:82)(cid:73)(cid:69)(cid:82)(cid:83)(cid:0)(cid:85)(cid:83)(cid:69)(cid:68)(cid:0)
by  the  Company  are  unionized.  A  labor  strike  by  a  group  of  the 
Company’s employees, one of the Company’s freight carriers, one 
of its vendors, a general strike by civil service employees, or a gov-
ernmental  shutdown  could  have  an  adverse  effect  on  the 
Company’s business. Many of the products the Company sells are 
manufactured in countries other than the countries in which the 
Company’s  logistics  centers  are  located.  The  inability  to  receive 
products into the logistics centers because of government action 
or  labor  disputes  at  critical  ports  of  entry  may  have  a  material 
adverse effect on the Company’s business.

Risk of Declines in Inventory Value 
The Company is subject to the risk that the value of its inventory 
will decline as a result of price reductions by vendors or techno-
logical  obsolescence.  It  is  the  policy  of  most  of  the  Company’s 
vendors to protect distributors from the loss in value of inventory 
due  to  technological  change  or  the  vendors’  price  reductions. 
Some  vendors,  however,  may  be  unwilling  or  unable  to  pay  the 
Company for price protection claims or products returned to them 
under  purchase  agreements.  Moreover,  industry  practices  are 
sometimes not embodied in written agreements and do not pro-
tect the Company in all cases from declines in inventory value. No 
assurance can be given that such practices to protect distributors 
will continue, that unforeseen new product developments will not 
adversely affect  the Company, or  that the Company will be  able 
to successfully manage its existing and future inventories. 

Product Availability 
The Company is dependent upon the supply of products available 
from its vendors. The industry is characterized by periods of severe 
product  shortages  due  to  vendors’  difficulties  in  projecting 
demand for certain products distributed by the Company. When 
such product shortages occur, the Company typically receives an 
allocation of product from the vendor. There can be no assurance 
that  vendors  will  be  able  to  maintain  an  adequate  supply  of 
products to fulfill all of the Company’s customer orders on a timely 

Tech Data Corporation

25

basis.  Failure  to  obtain  adequate  product  supplies  could  have  an 
adverse effect on the Company’s business. 

Vendor Terms and Conditions 
The Company relies on various rebates, cash discounts, and coop-
erative  marketing  programs  offered  by  its  vendors  to  support 
expenses associated with distributing and marketing the vendors’ 
products.  Currently,  the  rebates  and  purchase  discounts  offered 
by  vendors  are  influenced  by  sales  volumes  and  percentage 
increases  in  sales,  and  are  subject  to  changes  by  the  vendors. 
Additionally, certain of the Company’s vendors subsidize floorplan 
financing  arrangements  for  the  benefit  of  our  customers. 
Terminations  of  a  supply  or  services  agreement  or  a  significant 
change  in  supplier  terms  or  conditions  of  sale  could  negatively 
affect  our  operating  margins,  revenue  or  the  level  of  capital 
required to fund our operations. 

The  Company  receives  a  significant  percentage  of  revenues 
from products it purchases from relatively few manufacturers. As 
has  historically  been  the  case,  a  manufacturer  may  make  rapid, 
significant and adverse changes in its sales terms and conditions, 
such as reducing the amount of price protection and return rights 
as  well  as  reducing  the  level  of  purchase  discounts  and  rebates 
they  make  available  to  us,  or  may  merge  with  or  acquire  other 
significant manufacturers. The Company’s gross margins could be 
materially  and  negatively  impacted  if  the  Company  is  unable  to 
pass through the impact of these changes to the Company’s cus-
tomers  or  cannot  develop  systems  to  manage  ongoing  supplier 
programs.  In  addition,  the  Company’s  standard  vendor  distribu-
tion agreement permits termination without cause by either party 
upon  30  days  notice.  The  loss  of  a  relationship  with  any  of  the 
Company’s key vendors, a change in their strategy (such as increas-
ing direct sales), the merging of significant manufacturers, or sig-
nificant changes  in terms on their products may adversely affect 
the Company’s business. 

Loss of Significant Customers 
Customers do not have an obligation to make purchases from the 
Company. In some cases, the Company has made adjustments to 
its  systems,  vendor  offerings,  and  processes,  and  made  staffing 
decisions, in order to accommodate the needs of a significant cus-
tomer. In the event a significant customer decides to make its pur-
chases from another distributor, experiences a significant change 
in  demand  from  its  own  customer  base,  becomes  financially 

unstable,  or  is  acquired  by  another  company,  the  Company’s 
receipt  of  revenues  may  be  significantly  affected,  resulting  in  an 
adverse effect on the Company’s business. 

Customer Credit Exposure 
The Company sells its products to a large customer base of value-
added resellers, direct marketers, retailers and corporate resellers. 
The Company finances a significant portion of such sales through 
trade  credit.  As  a  result,  the  Company’s  business  could  be 
adversely affected in the event of a deterioration of the financial 
condition of its customers, resulting in the customers’ inability to 
repay  the  Company.  This  risk  may  increase  if  there  is  a  general 
economic  downturn  affecting  a  large  number  of  the  Company’s 
customers  and  in  the  event  the  Company’s  customers  do  not 
adequately  manage  their  business  or  properly  disclose  their 
financial condition. 

Need for Liquidity and Capital Resources; Fluctuations 
in Interest Rates 
The  Company’s  business  requires  substantial  capital  to  operate 
and to finance accounts receivable and product inventory that are 
not  financed  by  trade  creditors.  The  Company  has  historically 
relied  upon  cash  generated  from  operations,  bank  credit  lines, 
trade credit from its vendors, proceeds from public offerings of its 
common  stock  and  proceeds  from  debt  offerings  to  satisfy  its 
capital  needs  and  finance  growth.  The  Company  utilizes  various 
financing  instruments  such  as  receivables  securitization,  leases, 
revolving  credit  facilities  and  trade  receivable  purchase  facilities. 
As  the  financial  markets  change  and  new  regulations  come  into 
effect, the cost of acquiring financing and the methods of financ-
ing may change. Changes in our credit rating or other market fac-
tors may increase our interest expense or other costs of capital, or 
capital may not be available to us on acceptable terms to fund our 
working  capital  needs.  The  inability  to  obtain  such  sources  of 
capital could have an adverse effect on the Company’s business. 
The Company’s credit facilities contain various financial and other 
covenants that may limit the Company’s ability to borrow or limit 
the  Company’s  flexibility  in  responding  to  business  conditions. 
These financing instruments involve variable rate debt, thus expos-
ing the Company to risk of fluctuations in interest rates. Such fluc-
tuations  in  interest  rates  could  have  an  adverse  effect  on  the 
Company’s business. 

26

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

continued

Foreign Currency Exchange Risks; Exposure to 
Foreign Markets 
(cid:52)(cid:72)(cid:69)(cid:0)(cid:35)(cid:79)(cid:77)(cid:80)(cid:65)(cid:78)(cid:89)(cid:0)(cid:67)(cid:79)(cid:78)(cid:68)(cid:85)(cid:67)(cid:84)(cid:83)(cid:0)(cid:66)(cid:85)(cid:83)(cid:73)(cid:78)(cid:69)(cid:83)(cid:83)(cid:0)(cid:73)(cid:78)(cid:0)(cid:67)(cid:79)(cid:85)(cid:78)(cid:84)(cid:82)(cid:73)(cid:69)(cid:83)(cid:0)(cid:79)(cid:85)(cid:84)(cid:83)(cid:73)(cid:68)(cid:69)(cid:0)(cid:79)(cid:70)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:53)(cid:78)(cid:73)(cid:84)(cid:69)(cid:68)(cid:0)
States, which exposes the Company to fluctuations in foreign cur-
rency  exchange  rates.  The  Company  may  enter  into  short-term 
(cid:70)(cid:79)(cid:82)(cid:87)(cid:65)(cid:82)(cid:68)(cid:0) (cid:69)(cid:88)(cid:67)(cid:72)(cid:65)(cid:78)(cid:71)(cid:69)(cid:0) (cid:79)(cid:82)(cid:0) (cid:79)(cid:80)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0) (cid:67)(cid:79)(cid:78)(cid:84)(cid:82)(cid:65)(cid:67)(cid:84)(cid:83)(cid:0) (cid:84)(cid:79)(cid:0) (cid:72)(cid:69)(cid:68)(cid:71)(cid:69)(cid:0) (cid:84)(cid:72)(cid:73)(cid:83)(cid:0) (cid:82)(cid:73)(cid:83)(cid:75)(cid:27)(cid:0) (cid:78)(cid:69)(cid:86)(cid:69)(cid:82)-
theless, fluctuations in foreign currency exchange rates could have 
an  adverse  effect  on  the  Company’s  business.  In  particular,  the 
value  of  the  Company’s  equity  investment  in  foreign  countries 
may fluctuate based upon changes in foreign currency exchange 
rates.  These  fluctuations,  which  are  recorded  in  a  cumulative 
translation adjustment account, may result in losses in the event a 
foreign  subsidiary  is  sold  or  closed  at  a  time  when  the  foreign 
currency  is  weaker  than  when  the  Company  initially  invested  in 
the country. 

The  Company’s  international  operations  are  subject  to  other 
risks  such  as  the  imposition  of  governmental  controls,  export 
license requirements, restrictions on the export of certain technol-
ogy, political instability, trade restrictions, tariff changes, difficul-
ties in staffing and managing international operations, changes in 
the  interpretation  and  enforcement  of  laws  (in  particular  related 
to  items  such  as  duty  and  taxation),  difficulties  in  collecting 
accounts  receivable,  longer  collection  periods  and  the  impact  of 
local  economic  conditions  and  practices.  There  can  be  no  assur-
ance that these and other factors will not have an adverse effect 
on the Company’s business. 

Changes in Income Tax and Other Regulatory Legislation 
The  Company  operates  in  compliance  with  applicable  laws  and 
regulations. When new legislation is enacted with minimal advance 
notice,  or  when  new  interpretations  or  applications  of  existing 
laws are made, the Company may need to implement changes in 
its policies or structure. 

In addition, recent legislation requires all member states of the 
(cid:37)(cid:85)(cid:82)(cid:79)(cid:80)(cid:69)(cid:65)(cid:78)(cid:0) (cid:53)(cid:78)(cid:73)(cid:79)(cid:78)(cid:0) (cid:84)(cid:79)(cid:0) (cid:65)(cid:68)(cid:79)(cid:80)(cid:84)(cid:0) (cid:84)(cid:72)(cid:69)(cid:0) (cid:37)(cid:85)(cid:82)(cid:79)(cid:80)(cid:69)(cid:65)(cid:78)(cid:0) (cid:36)(cid:73)(cid:82)(cid:69)(cid:67)(cid:84)(cid:73)(cid:86)(cid:69)(cid:0) (cid:18)(cid:16)(cid:16)(cid:18)(cid:15)(cid:25)(cid:22)(cid:15)(cid:37)(cid:35)(cid:0)
regarding  Waste  in  Electrical  and  Electronic  Equipment  (“WEEE 
Directive”)  and  2002/95/EC  regarding  restrictions  of  the  use  of 
certain  hazardous  substances  in  electrical  and  electronic  equip-
ment (“RoHS Directive”) into national law. The manner and timing 
of  adoption  of  these  laws  impacts  the  Company  as,  in  some 

countries,  it  remains  unclear  to  what  extent  and  the  manner  in 
which the Company will be subject to compliance with these reg-
ulations and the financial costs and guarantees thereby required. 
The  Company  makes  plans  for  its  structure  and  operations 
based  upon  existing  laws  and  anticipated  future  changes  in  the 
law.  The  Company  is  susceptible  to  unanticipated  changes  in 
legislation, especially relating to income and other taxes, import/
export  laws,  hazardous  materials  and  electronic  waste  recovery 
legislation, and other laws related to trade, accounting, and busi-
ness  activities.  Such  changes  in  legislation,  both  domestic  and 
international,  may  have  a  significant  adverse  effect  on  the 
Company’s business. 

Changes in Accounting Rules 
The Company prepares its financial statements in conformity with 
(cid:65)(cid:67)(cid:67)(cid:79)(cid:85)(cid:78)(cid:84)(cid:73)(cid:78)(cid:71)(cid:0) (cid:80)(cid:82)(cid:73)(cid:78)(cid:67)(cid:73)(cid:80)(cid:76)(cid:69)(cid:83)(cid:0) (cid:71)(cid:69)(cid:78)(cid:69)(cid:82)(cid:65)(cid:76)(cid:76)(cid:89)(cid:0) (cid:65)(cid:67)(cid:67)(cid:69)(cid:80)(cid:84)(cid:69)(cid:68)(cid:0) (cid:73)(cid:78)(cid:0) (cid:84)(cid:72)(cid:69)(cid:0) (cid:53)(cid:78)(cid:73)(cid:84)(cid:69)(cid:68)(cid:0) (cid:51)(cid:84)(cid:65)(cid:84)(cid:69)(cid:83)(cid:14)(cid:0)
These  accounting  principles  are  subject  to  interpretation  by  the 
Financial  Accounting  Standards  Board,  the  Public  Company 
Accounting  Oversight  Board,  the  Securities  and  Exchange 
Commission, the American Institute of Certified Public Accountants 
and various other bodies formed to interpret and create appropri-
ate accounting policies. A change in these policies or a new inter-
pretation  of  an  existing  policy  could  have  a  significant  effect  on 
our reported results and may affect our reporting of transactions 
before a change is announced. 

Volatility of Common Stock Price 
Because of the foregoing factors, as well as other variables affect-
ing  the  Company’s  operating  results,  past  financial  performance 
should  not  be  considered  a  reliable  indicator  of  future  perfor-
mance, and investors should not use historical trends to anticipate 
results or trends in future periods. In addition, the Company’s par-
ticipation in a highly dynamic industry often results in significant 
volatility of the common stock price. Some of the factors that may 
affect the market price of the common stock, in addition to those 
discussed above, are changes in investment recommendations by 
securities  analysts,  changes  in  market  valuations  of  competitors 
and key vendors, and fluctuations in the overall stock market, but 
particularly in the technology sector. 

Tech Data Corporation

27

Controls and Procedures

Evaluation of Disclosure Controls and Procedures 
The  Company  maintains  disclosure  controls  and  procedures 
designed  to  ensure  that  information  required  to  be  disclosed  in 
reports  filed  under  the  Securities  Exchange  Act  of  1934,  as 
amended  (the  “Exchange  Act”),  is  recorded,  processed,  summa-
rized and reported within the specified time periods. In designing 
and  evaluating  our  disclosure  controls  and  procedures,  manage-
ment recognized that disclosure controls and procedures, no mat-
ter how well conceived and operated, can provide only reasonable, 
not absolute, assurance that the objectives of the disclosure con-
trols and procedures are met. Further, the design of a control sys-
tem must reflect the fact that there are resource constraints, and 
the benefits of controls must be considered relative to their costs. 
Because of the inherent limitations in all control systems, no eval-
uation of controls can provide absolute assurance that all control 
issues  and  instances  of  fraud,  if  any,  within  the  Company  have 
been detected. These inherent limitations include the realities that 
judgments in decision-making can be faulty, and that breakdowns 
can occur because of a simple error or mistake. Additionally, con-
trols can be circumvented by the individual acts of some persons, 
by collusion of two or more people, or by management override 
of the controls. The design of any system of controls also is based 
in  part  upon  certain  assumptions  about  the  likelihood  of  future 
events,  and  there  can  be  no  assurance  that  any  design  will  suc-
ceed in achieving its stated goals under all potential future condi-
tions.  Over  time,  controls  may  become  inadequate  because  of 
changes in conditions, or the degree of compliance with the poli-
cies or procedures may deteriorate. Because of the inherent limita-
tions in a cost-effective control system, misstatements due to error 
or fraud may occur and not be detected. 

Tech  Data’s  management,  with  the  participation  of  the 
Company’s  Chief  Executive  Officer  (“CEO”)  and  Chief  Financial 
Officer (“CFO”), has evaluated the effectiveness of the Company’s 
disclosure controls and procedures (as defined in Rules 13a-15(e) 
and 15(d)-15(e) under the Securities Exchange Act of 1934), as of 
January 31, 2008. Based on that evaluation, the Company’s CEO 
and  CFO  concluded  that  the  Company’s  disclosure  controls  and 
procedures were effective in providing reasonable assurance that 
the  objectives  of  the  disclosure  controls  and  procedures  are  met 
as of January 31, 2008. 

Management’s Report on Internal Control 
over Financial Reporting 
Management of the Company is responsible for establishing and 
maintaining  adequate  internal  control  over  financial  reporting  as 
defined  in  Rules  13a-15(f)  under  the  Securities  Exchange  Act  of 
1934.  The  Company’s  internal  control  over  financial  reporting  is 
designed to provide reasonable assurance regarding the reliability 
of financial reporting and the preparation of financial statements 
for  external  purposes  in  accordance  with  generally  accepted 
accounting principles. 

Because  of  its  inherent  limitations,  internal  control  over 
financial  reporting  may  not  prevent  or  detect  misstatements. 
Therefore, even those systems determined to be effective can pro-
vide only reasonable assurance with respect to financial statement 
preparation and presentation. Also, projections of any evaluation 
of the effectiveness to future periods are subject to the risk that 
controls  may  become  inadequate  because  of  changes  in  condi-
tions,  or  that  the  degree  of  compliance  with  the  policies  or 
procedures may deteriorate. 

(cid:53)(cid:78)(cid:68)(cid:69)(cid:82)(cid:0) (cid:84)(cid:72)(cid:69)(cid:0) (cid:83)(cid:85)(cid:80)(cid:69)(cid:82)(cid:86)(cid:73)(cid:83)(cid:73)(cid:79)(cid:78)(cid:0) (cid:65)(cid:78)(cid:68)(cid:0) (cid:87)(cid:73)(cid:84)(cid:72)(cid:0) (cid:84)(cid:72)(cid:69)(cid:0) (cid:80)(cid:65)(cid:82)(cid:84)(cid:73)(cid:67)(cid:73)(cid:80)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0) (cid:79)(cid:70)(cid:0) (cid:77)(cid:65)(cid:78)(cid:65)(cid:71)(cid:69)-
ment, including our principal executive officer and principal finan-
cial  officer,  we  assessed  the  effectiveness  of  the  Company’s 
internal  control  over  financial  reporting  as  of  January  31,  2008. 
In making this assessment, management used the criteria set forth 
by  the  Committee  of  Sponsoring  Organizations  of  the  Treadway 
Commission (“COSO”) in Internal Control—Integrated Framework. 
Based  on  our  assessment,  we  have  concluded  that,  as  of 
January  31,  2008,  the  Company’s  internal  control  over  financial 
reporting was effective based on those criteria. 

The effectiveness of internal control over financial reporting as 
of January 31, 2008 has been audited by Ernst & Young, LLP, the 
independent registered certified public accounting firm who also 
audited  the  Company’s  consolidated  financial  statements,  as 
stated in their report below. 

Changes in Internal Control over Financial Reporting 
There  were  no  changes  in  our  internal  control  over  financial 
reporting  (as  defined  in  Rules  13a-15(f)  and  15d-15(f)  under  the 
Exchange Act) identified in connection with management’s evalu-
ation  during  our  last  quarter  of  fiscal  2008  that  have  materially 
affected,  or  are  reasonably  likely  to  materially  affect,  the 
Company’s internal control over financial reporting. 

28

REPORT OF INDEPENDENT REGISTERED CERTIFIED PUBLIC ACCOUNTING FIRM

The Board of Directors and Shareholders of 
Tech Data Corporation: 

We  have  audited  the  accompanying  consolidated  balance 
sheets of Tech Data Corporation and subsidiaries as of January 31, 
2008 and 2007, and the related consolidated statements of oper-
ations, shareholders’ equity, and cash flows for each of the three 
years in the period ended January 31, 2008. These financial state-
ments are the responsibility of the Company’s management. Our 
responsibility is to express an opinion on these financial statements 
based on our audits. 

We conducted our audits in accordance with the standards of 
(cid:84)(cid:72)(cid:69)(cid:0)(cid:48)(cid:85)(cid:66)(cid:76)(cid:73)(cid:67)(cid:0)(cid:35)(cid:79)(cid:77)(cid:80)(cid:65)(cid:78)(cid:89)(cid:0)(cid:33)(cid:67)(cid:67)(cid:79)(cid:85)(cid:78)(cid:84)(cid:73)(cid:78)(cid:71)(cid:0)(cid:47)(cid:86)(cid:69)(cid:82)(cid:83)(cid:73)(cid:71)(cid:72)(cid:84)(cid:0)(cid:34)(cid:79)(cid:65)(cid:82)(cid:68)(cid:0)(cid:8)(cid:53)(cid:78)(cid:73)(cid:84)(cid:69)(cid:68)(cid:0)(cid:51)(cid:84)(cid:65)(cid:84)(cid:69)(cid:83)(cid:9)(cid:14)(cid:0)
Those  standards  require  that  we  plan  and  perform  the  audit  to 
obtain  reasonable  assurance  about  whether  the  financial  state-
ments are free of material misstatement. An audit includes exam-
ining,  on  a  test  basis,  evidence  supporting  the  amounts  and 
disclosures  in  the  financial  statements.  An  audit  also  includes 
assessing the accounting principles used and significant estimates 
made by management, as well as evaluating the overall financial 
statement  presentation.  We  believe  that  our  audits  provide  a 
reasonable basis for our opinion. 

In our opinion, the financial statements referred to above pres-
ent fairly, in all material respects, the consolidated financial posi-
tion  of  Tech  Data  Corporation  and  subsidiaries  at  January  31, 
2008  and  2007,  and  the  consolidated  results  of  their  operations 
and  their  cash  flows  for  each  of  the  three  years  in  the  period

(cid:69)(cid:78)(cid:68)(cid:69)(cid:68)(cid:0)(cid:42)(cid:65)(cid:78)(cid:85)(cid:65)(cid:82)(cid:89)(cid:0)(cid:19)(cid:17)(cid:12)(cid:0)(cid:18)(cid:16)(cid:16)(cid:24)(cid:12)(cid:0)(cid:73)(cid:78)(cid:0)(cid:67)(cid:79)(cid:78)(cid:70)(cid:79)(cid:82)(cid:77)(cid:73)(cid:84)(cid:89)(cid:0)(cid:87)(cid:73)(cid:84)(cid:72)(cid:0)(cid:53)(cid:14)(cid:51)(cid:14)(cid:0)(cid:71)(cid:69)(cid:78)(cid:69)(cid:82)(cid:65)(cid:76)(cid:76)(cid:89)(cid:0)(cid:65)(cid:67)(cid:67)(cid:69)(cid:80)(cid:84)(cid:69)(cid:68)(cid:0)
accounting principles. 

As  discussed  in  Note  11  to  the  consolidated  financial  state-
ments,  effective  February  1,  2007,  the  Company  adopted  the 
provisions of Financial Accounting Standards Board Interpretation 
No.  48,  Accounting  for  Uncertainty  in  Income  Taxes.  Also,  as 
discussed  in  Note  1  to  the  consolidated  financial  statements, 
effective February 1, 2006, the Company adopted the provisions 
of  Statement  of  Financial  Accounting  Standards  No.  123(R), 
Share-Based Payment.

We  also  have  audited,  in  accordance  with  the  standards  of 
(cid:84)(cid:72)(cid:69)(cid:0)(cid:48)(cid:85)(cid:66)(cid:76)(cid:73)(cid:67)(cid:0)(cid:35)(cid:79)(cid:77)(cid:80)(cid:65)(cid:78)(cid:89)(cid:0)(cid:33)(cid:67)(cid:67)(cid:79)(cid:85)(cid:78)(cid:84)(cid:73)(cid:78)(cid:71)(cid:0)(cid:47)(cid:86)(cid:69)(cid:82)(cid:83)(cid:73)(cid:71)(cid:72)(cid:84)(cid:0)(cid:34)(cid:79)(cid:65)(cid:82)(cid:68)(cid:0)(cid:8)(cid:53)(cid:78)(cid:73)(cid:84)(cid:69)(cid:68)(cid:0)(cid:51)(cid:84)(cid:65)(cid:84)(cid:69)(cid:83)(cid:9)(cid:12)(cid:0)
Tech  Data  Corporation’s  internal  control  over  financial  reporting 
as  of  January  31,  2008,  based  on  criteria  established  in 
Internal Control—Integrated Framework issued by the Committee 
of  Sponsoring  Organizations  of  the  Treadway  Commission  and 
our  report  dated  March  26,  2008,  expressed  an  unqualified 
opinion thereon. 

Tampa, Florida 
March 26, 2008 

Tech Data Corporation

29

REPORT OF INDEPENDENT REGISTERED CERTIFIED PUBLIC ACCOUNTING FIRM

The Board of Directors and Shareholders of 
Tech Data Corporation: 

We have audited Tech Data Corporation’s internal control over 
financial reporting as of January 31, 2008, based on criteria estab-
lished  in  Internal  Control—Integrated  Framework  issued  by  the 
Committee  of  Sponsoring  Organizations  of  the  Treadway 
Commission  (the  COSO  criteria).  Tech  Data  Corporation’s  man-
agement  is  responsible  for  maintaining  effective  internal  control 
over financial reporting and for its assessment of the effectiveness 
of internal control over financial reporting included in the accom-
panying Management’s Report on Internal Control Over Financial 
Reporting.  Our  responsibility  is  to  express  an  opinion  on  the 
company’s  internal  control  over  financial  reporting  based  on 
our audit. 

We  conducted  our  audit  in  accordance  with  the  standards  of 
(cid:84)(cid:72)(cid:69)(cid:0)(cid:48)(cid:85)(cid:66)(cid:76)(cid:73)(cid:67)(cid:0)(cid:35)(cid:79)(cid:77)(cid:80)(cid:65)(cid:78)(cid:89)(cid:0)(cid:33)(cid:67)(cid:67)(cid:79)(cid:85)(cid:78)(cid:84)(cid:73)(cid:78)(cid:71)(cid:0)(cid:47)(cid:86)(cid:69)(cid:82)(cid:83)(cid:73)(cid:71)(cid:72)(cid:84)(cid:0)(cid:34)(cid:79)(cid:65)(cid:82)(cid:68)(cid:0)(cid:8)(cid:53)(cid:78)(cid:73)(cid:84)(cid:69)(cid:68)(cid:0)(cid:51)(cid:84)(cid:65)(cid:84)(cid:69)(cid:83)(cid:9)(cid:14)(cid:0)
Those  standards  require  that  we  plan  and  perform  the  audit  to 
obtain  reasonable  assurance  about  whether  effective  internal 
control  over  financial  reporting  was  maintained  in  all  material 
respects. Our audit included obtaining an understanding of inter-
nal control over financial reporting, assessing the risk that a mate-
rial  weakness  exists,  testing  and  evaluating  the  design  and 
operating effectiveness of internal control based on the assessed 
risk, and performing such other procedures as we considered nec-
essary in the circumstances. We believe that our audit provides a 
reasonable basis for our opinion. 

A company’s internal control over financial reporting is a pro-
cess designed to provide reasonable assurance regarding the reli-
ability  of  financial  reporting  and  the  preparation  of  financial 
statements  for  external  purposes  in  accordance  with  generally 
accepted accounting principles. A company’s internal control over 
financial  reporting  includes  those  policies  and  procedures  that 
(1) pertain to the maintenance of records that, in reasonable detail, 
accurately  and  fairly  reflect  the  transactions  and  dispositions  of 
(cid:84)(cid:72)(cid:69)(cid:0)(cid:65)(cid:83)(cid:83)(cid:69)(cid:84)(cid:83)(cid:0)(cid:79)(cid:70)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:67)(cid:79)(cid:77)(cid:80)(cid:65)(cid:78)(cid:89)(cid:27)(cid:0)(cid:8)(cid:18)(cid:9)(cid:0)(cid:80)(cid:82)(cid:79)(cid:86)(cid:73)(cid:68)(cid:69)(cid:0)(cid:82)(cid:69)(cid:65)(cid:83)(cid:79)(cid:78)(cid:65)(cid:66)(cid:76)(cid:69)(cid:0)(cid:65)(cid:83)(cid:83)(cid:85)(cid:82)(cid:65)(cid:78)(cid:67)(cid:69)(cid:0)(cid:84)(cid:72)(cid:65)(cid:84)(cid:0)

transactions  are  recorded  as  necessary  to  permit  preparation  of 
financial  statements  in  accordance  with  generally  accepted 
accounting  principles,  and  that  receipts  and  expenditures  of 
the company are being made only in accordance with authoriza-
(cid:84)(cid:73)(cid:79)(cid:78)(cid:83)(cid:0) (cid:79)(cid:70)(cid:0) (cid:77)(cid:65)(cid:78)(cid:65)(cid:71)(cid:69)(cid:77)(cid:69)(cid:78)(cid:84)(cid:0) (cid:65)(cid:78)(cid:68)(cid:0) (cid:68)(cid:73)(cid:82)(cid:69)(cid:67)(cid:84)(cid:79)(cid:82)(cid:83)(cid:0) (cid:79)(cid:70)(cid:0) (cid:84)(cid:72)(cid:69)(cid:0) (cid:67)(cid:79)(cid:77)(cid:80)(cid:65)(cid:78)(cid:89)(cid:27)(cid:0) (cid:65)(cid:78)(cid:68)(cid:0)
(3)  provide  reasonable  assurance  regarding  prevention  or  timely 
detection  of  unauthorized  acquisition,  use,  or  disposition  of  the 
company’s  assets  that  could  have  a  material  effect  on  the 
financial statements. 

Because  of  its  inherent  limitations,  internal  control  over 
financial  reporting  may  not  prevent  or  detect  misstatements. 
Also, projections of any evaluation of effectiveness to future peri-
ods are subject to the risk that controls may become inadequate 
because  of  changes  in  conditions,  or  that  the  degree  of  compli-
ance with the policies or procedures may deteriorate. 

In our opinion, Tech Data Corporation maintained, in all mate-
rial  respects,  effective  internal  control  over  financial  reporting  as 
of January 31, 2008, based on the COSO criteria. 

We also have audited, in accordance with the standards of the 
(cid:48)(cid:85)(cid:66)(cid:76)(cid:73)(cid:67)(cid:0)(cid:35)(cid:79)(cid:77)(cid:80)(cid:65)(cid:78)(cid:89)(cid:0)(cid:33)(cid:67)(cid:67)(cid:79)(cid:85)(cid:78)(cid:84)(cid:73)(cid:78)(cid:71)(cid:0)(cid:47)(cid:86)(cid:69)(cid:82)(cid:83)(cid:73)(cid:71)(cid:72)(cid:84)(cid:0)(cid:34)(cid:79)(cid:65)(cid:82)(cid:68)(cid:0)(cid:8)(cid:53)(cid:78)(cid:73)(cid:84)(cid:69)(cid:68)(cid:0)(cid:51)(cid:84)(cid:65)(cid:84)(cid:69)(cid:83)(cid:9)(cid:12)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)
consolidated balance sheets of Tech Data Corporation and subsid-
iaries  as  of  January  31,  2008  and  2007,  and  the  related 
consolidated  statements  of  operations,  shareholders’  equity,  and 
cash  flows  for  each  of  the  three  years  in  the  period  ended 
January  31,  2008  of  Tech  Data  Corporation  and  subsidiaries 
and  our  report  dated  March  26,  2008,  expressed  an  unqualified 
opinion thereon. 

Tampa, Florida 
March 26, 2008 

30

CONSOLIDATED BALANCE SHEET

January 31,

2008

2007

(In thousands,
except share amounts)

Assets
Current assets:

Cash and cash equivalents  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 447,340
Accounts receivable, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,659,446
Inventories  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,642,317
Prepaid expenses and other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
173,879

$ 265,006
2,464,735
1,556,008
122,103

  Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets, net  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,922,982
129,139
2,966
165,848

4,407,852
140,762
2,966
152,284

  Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,220,935

$ 4,703,864

Liabilities And Shareholders’ Equity
Current liabilities:

Revolving credit loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current portion of long-term debt  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued expenses and other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

18,315
2,288,740
1,243
570,266

  Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other long-term liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,878,564
363,639
58,011

$

77,195
2,011,203
2,376
500,514

2,591,288
363,604
46,252

  Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,300,214

3,001,144

Commitments and contingencies (Note 14)
Shareholders’ equity:
(cid:0)

(cid:0)(cid:35)(cid:79)(cid:77)(cid:77)(cid:79)(cid:78)(cid:0)(cid:83)(cid:84)(cid:79)(cid:67)(cid:75)(cid:12)(cid:0)(cid:80)(cid:65)(cid:82)(cid:0)(cid:86)(cid:65)(cid:76)(cid:85)(cid:69)(cid:0)(cid:4)(cid:14)(cid:16)(cid:16)(cid:17)(cid:21)(cid:27)(cid:0)(cid:18)(cid:16)(cid:16)(cid:12)(cid:16)(cid:16)(cid:16)(cid:12)(cid:16)(cid:16)(cid:16)(cid:0)(cid:83)(cid:72)(cid:65)(cid:82)(cid:69)(cid:83)(cid:0)(cid:65)(cid:85)(cid:84)(cid:72)(cid:79)(cid:82)(cid:73)(cid:90)(cid:69)(cid:68)(cid:27)(cid:0)(cid:21)(cid:25)(cid:12)(cid:18)(cid:19)(cid:25)(cid:12)(cid:16)(cid:24)(cid:21)(cid:0)(cid:83)(cid:72)(cid:65)(cid:82)(cid:69)(cid:83)(cid:0)(cid:73)(cid:83)(cid:83)(cid:85)(cid:69)(cid:68)(cid:0)

at January 31, 2008 and 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additional paid-in capital  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Treasury stock, at cost (6,446,603 and 4,313,103 shares at January 31, 2008 and 2007) . . . . . . . . . . . . .
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated other comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

89
737,759
(236,960)
948,596
471,237

89
732,378
(157,628)
841,402
286,479

  Total shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,920,721

1,702,720

  Total liabilities and shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,220,935

$4,703,864

The accompanying Notes to Consolidated Financial Statements are an integral part of these financial statements.

 
 
 
 
 
 
Tech Data Corporation

31

CONSOLIDATED STATEMENT OF OPERATIONS

Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cost of products sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 23,423,078
22,288,670

$ 21,440,445
20,433,674

$ 20,482,851
19,460,332

Gross profit  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,134,408

1,006,771

1,022,519

Year ended January 31,

2008

2007

2006

(In thousands, except per share amounts)

Operating expenses:

Selling, general and administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill impairment  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss on disposal of subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restructuring charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

915,434
—
14,471
16,149

851,097
136,093
—
23,764

946,054

1,010,954

Operating income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

188,354

(4,183)

Other expense (income):

Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Discount on sale of accounts receivable  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net foreign currency exchange (gain) loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Income (loss) from continuing operations before income taxes 

and minority interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for income taxes  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Income (loss) from continuing operations before minority interest . . . . . . . . . . . . . . . . .
Minority interest in net loss of joint venture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Income (loss) from continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Discontinued operations, net of tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Income (loss) per common share—basic:

Continuing operations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net income (loss)  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Income (loss) per common share—diluted:

Continuing operations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net income (loss)  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Weighted average common shares outstanding:

Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Diluted  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

$

$

$

$

The accompanying Notes to Consolidated Financial Statements are an integral part of these financial statements. 

28,751
7,219
(13,495)
(3,994)

18,481

169,873
65,163

104,710
3,559

108,269
—

108,269

1.97
—

1.97

1.96
—

1.96

828,278
—
—
30,946

859,224

163,295

31,422
5,503
(7,426)
1,816

31,315

131,980
109,013

22,967
—

22,967
3,619

38,506
12,509
(9,764)
(15)

41,236

(45,419)
55,508

(100,927)
—

(100,927)
3,946

$

$

$

$

$

(96,981) $

26,586

(1.83) $
0.07

(1.76) $

(1.83) $
0.07

(1.76) $

0.40
0.06

0.46

0.39
0.06

0.45

54,904

55,287

55,129

55,129

57,749

58,414

32

CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY

Common Stock

Shares

Amount

Additional
paid-in
capital

Treasury
stock

Retained
earnings

(In thousands)

Accumulated
other
comprehensive
income (loss) (1)

Total
shareholders’
equity

Balance—January 31, 2005  . . . . . . . . . . 58,984
Issuance of common stock for benefit 
plans and stock options exercised,
including related tax 
benefit of $1,460 . . . . . . . . . . . . . . . .
Purchase of treasury stock, at cost . . . . .
Issuance of treasury stock for benefit 
plans and stock options exercised, 
including related tax 
benefit of $1,174 . . . . . . . . . . . . . . . . .
Comprehensive income (loss) . . . . . . . . .

255
—

—
—

Balance—January 31, 2006  . . . . . . . . . . 59,239
—
Purchase of treasury stock, at cost . . . . .
Issuance of treasury stock for benefit 
plans and equity-based awards 
exercised, including related tax 
benefit of $2,680 . . . . . . . . . . . . . . . .

—

Contribution of treasury stock to 

401(k) savings plan . . . . . . . . . . . . . . .
Stock-based compensation expense . . . .
Comprehensive (loss) income . . . . . . . . .

—
—
—

Balance—January 31, 2007  . . . . . . . . . . 59,239
Purchase of treasury stock, at cost . . . . .
—
Issuance of treasury stock for benefit 
plans and equity-based awards 
exercised, including related tax 
benefit of $1,078  . . . . . . . . . . . . . . . .

—

Contribution of treasury stock to 

401(k) savings plan . . . . . . . . . . . . . . .
Stock-based compensation expense . . . .
Adjustment for the cumulative effect of 
prior years of the adoption of FIN 48 . . .
Comprehensive income  . . . . . . . . . . . . .

—
—

—
—

$88

$724,562

$

— $911,797

$291,024

$1,927,471

1
—

—
—

89
—

—

—
—
—

89
—

—

—
—

—
—

8,001

—
— (127,027)

—
—

—
—

8,002
(127,027)

(3,108)
—

14,426
—

—
26,586

729,455
—

(112,601)
(80,093)

938,383
—

—
(86,043)

204,981
—

11,318
(59,457)

1,760,307
(80,093)

(5,123)

32,986

—

—

27,863

73
7,973
—

2,080
—
—

—

—
(96,981)

732,378

(157,628)
— (100,019)

841,402
—

—
81,498

286,479
—

—

2,153
7,973
(15,483)

1,702,720
(100,019)

(4,970)

18,590

64
10,287

2,097
—

—

—
—

—

—
—

13,620

2,161
10,287

—
—

—
(1,075)
— 108,269

—
184,758

(1,075)
293,027

Balance—January 31, 2008 . . . . . . . . . 59,239

$89

$737,759

$(236,960) $948,596

$471,237

$1,920,721

(1)   The  Company’s  accumulated  other  comprehensive  income  (loss)  is  comprised  exclusively  of  changes  in  the  Company’s  cumulative  foreign  currency  translation 

adjustment account. 

The accompanying Notes to Consolidated Financial Statements are an integral part of these financial statements. 

Tech Data Corporation

33

CONSOLIDATED STATEMENT OF CASH FLOWS

Year ended January 31, 

2008

2007

2006

(In thousands)

Cash flows from operating activities:

Cash received from customers  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash paid to suppliers and employees  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest paid, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 23,473,295
(23,053,048)
(14,273)
(48,552)

$ 21,185,902
(21,091,764)
(26,910)
(81,216)

$ 20,504,871
(20,160,865)
(21,082)
(65,485)

  Net cash provided by (used in) operating activities  . . . . . . . . . . . . . . . . . . . . . . .

357,422

(13,988)

257,439

Cash flows from investing activities:

Acquisition of business, net of cash acquired  . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from sale of business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from sale of property and equipment  . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expenditures for property and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Software and software development costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

  Net cash used in investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Cash flows from financing activities:

 Proceeds from the issuance of common stock and 

reissuance of treasury stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash paid for purchase of treasury stock  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital contributions from joint venture partner . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from issuance of convertible debentures, net of expenses . . . . . . . . . . . .
Net (repayments) borrowings on revolving credit loans . . . . . . . . . . . . . . . . . . . . . .
Principal payments on long-term debt  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Excess tax benefit from stock-based compensation . . . . . . . . . . . . . . . . . . . . . . . . .

  Net cash (used in) provided by financing activities . . . . . . . . . . . . . . . . . . . . . . . .

Effect of exchange rate changes on cash and cash equivalents  . . . . . . . . . . . . . . . . .

  Net increase (decrease) in cash and cash equivalents  . . . . . . . . . . . . . . . . . . . . .
Cash and cash equivalents at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(21,503)
7,161
—
(21,474)
(16,885)

(52,701)

12,542
(100,019)
9,000
—
(56,297)
(2,371)
212

(136,933)

14,546

182,334
265,006

—
16,500
3,563
(31,667)
(12,062)

(23,666)

25,183
(80,093)
—
342,554
(164,824)
(1,611)
544

121,753

24,242

108,341
156,665

—
—
9,169
(41,973)
(18,779)

(51,583)

16,686
(127,027)
—
—
166,530
(291,627)
—

(235,438)

(8,809)

(38,391)
195,056

Cash and cash equivalents at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

447,340

$

265,006

$

156,665

Reconciliation of net income (loss) to net cash provided by 

(used in) operating activities:

Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

108,269

$

(96,981) $

26,586

(continued)

 
 
 
 
 
34

CONSOLIDATED STATEMENT OF CASH FLOWS

continued

Year ended January 31, 

2008

2007

2006

(In thousands)

Adjustments to reconcile net income (loss) to net cash provided by 

(used in) operating activities:
Goodwill impairment  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss on disposal of subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gain on sale of discontinued operations, net of tax  . . . . . . . . . . . . . . . . . . . . . . . .
Gain on sale of land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for losses on accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock-based compensation expense  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred income taxes  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Excess tax benefit from stock-based compensation . . . . . . . . . . . . . . . . . . . . . . . . .
Minority interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Changes in operating assets and liabilities:
  Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
  Prepaid expenses and other assets  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
  Accounts payable  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
  Accrued expenses and other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

— $

14,471
—
—
53,881
11,200
10,287
6,537
(212)
(3,559)

57,419
57,904
(40,721)
83,845
(1,899)

$

136,093
—
(3,834)
(3,563)
53,280
27,655
7,973
4,296
(544)
—

(242,305)
25,806
5,636
21,985
50,515

  Total adjustments  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

249,153

82,993

—
—
—
—
53,744
6,172
—
26,466
—
—

(32,585)
(83,311)
3,078
214,804
42,485

230,853

  Net cash provided by (used in) operating activities  . . . . . . . . . . . . . . . . . . . . . . .

$

357,422

$

(13,988) $

257,439

The accompanying Notes to Consolidated Financial Statements are an integral part of these financial statements. 

 
 
 
 
 
 
 
 
 
Tech Data Corporation

35

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1—BUSINESS AND SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES

Description of Business 
Tech Data Corporation (“Tech Data” or the “Company”) is a lead-
ing  provider  of  information  technology  (“IT”)  products,  logistics 
management  and  other  value-added  services.  The  Company 
distributes  microcomputer  hardware  and  software  products  to 
value-added  resellers,  direct  marketers,  retailers  and  corporate 
resellers. The Company is managed in two geographic segments: 
the  Americas  (including  North  America  and  Latin  America) 
and Europe. 

Principles of Consolidation 
The  consolidated  financial  statements  include  the  accounts  of 
Tech  Data  and  its  subsidiaries.  All  significant  intercompany 
accounts and transactions have been eliminated in consolidation. 
Minority  interest  is  recognized  for  the  portion  of  a  consolidated 
joint venture not owned by the Company. The Company operates 
on a fiscal year that ends on January 31. 

Basis of Presentation 
In  accordance  with  Statement  of  Financial  Accounting  Standards 
(“SFAS” or “Statement”) No 144, “Accounting for the Impairment 
or Disposal of Long-lived Assets,” the Company has accounted for 
the  European  training  business  (the  “Training  Business”)  as  a 
discontinued  operation.  The  results  of  operations  of  the  Training 
Business  have  been  reclassified  and  presented  as  “discontinued 
operations, net of tax,” for all periods presented. The cash flows 
of the Training Business have not been reported separately within 
the Company’s Consolidated Statement of Cash Flows as the net 
cash  flows  of  the  Training  Business  are  not  material  and  the 
absence  of  cash  flows  from  discontinued  operations  has  not 
affected  the  Company’s  liquidity  subsequent  to  the  sale  of  the 
Training  Business.  The  transaction  is  further  discussed  in 
Note 3—Discontinued Operations. 

Method of Accounting 
The Company prepares its financial statements in conformity with 
(cid:53)(cid:14)(cid:51)(cid:14)(cid:0)(cid:71)(cid:69)(cid:78)(cid:69)(cid:82)(cid:65)(cid:76)(cid:76)(cid:89)(cid:0)(cid:65)(cid:67)(cid:67)(cid:69)(cid:80)(cid:84)(cid:69)(cid:68)(cid:0)(cid:65)(cid:67)(cid:67)(cid:79)(cid:85)(cid:78)(cid:84)(cid:73)(cid:78)(cid:71)(cid:0)(cid:80)(cid:82)(cid:73)(cid:78)(cid:67)(cid:73)(cid:80)(cid:76)(cid:69)(cid:83)(cid:0)(cid:73)(cid:78)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:53)(cid:78)(cid:73)(cid:84)(cid:69)(cid:68)(cid:0)(cid:51)(cid:84)(cid:65)(cid:84)(cid:69)(cid:83)(cid:14)(cid:0)
These  principles  require  management  to  make  estimates  and 
assumptions that affect the reported amounts of assets and liabili-
ties and disclosure of contingent  assets and liabilities at the date 
of the financial statements and the reported amounts of revenues 
and  expenses  during  the  reporting  period.  Actual  results  could 
differ from those estimates. 

Revenue Recognition 
Revenue is recognized once four criteria are met: (1) the Company 
(cid:77)(cid:85)(cid:83)(cid:84)(cid:0) (cid:72)(cid:65)(cid:86)(cid:69)(cid:0) (cid:80)(cid:69)(cid:82)(cid:83)(cid:85)(cid:65)(cid:83)(cid:73)(cid:86)(cid:69)(cid:0) (cid:69)(cid:86)(cid:73)(cid:68)(cid:69)(cid:78)(cid:67)(cid:69)(cid:0) (cid:84)(cid:72)(cid:65)(cid:84)(cid:0) (cid:65)(cid:78)(cid:0) (cid:65)(cid:82)(cid:82)(cid:65)(cid:78)(cid:71)(cid:69)(cid:77)(cid:69)(cid:78)(cid:84)(cid:0) (cid:69)(cid:88)(cid:73)(cid:83)(cid:84)(cid:83)(cid:27)(cid:0) (cid:8)(cid:18)(cid:9)(cid:0)
delivery must occur, which generally happens at the point of ship-
ment (this includes the transfer of both title and risk of loss, pro-
(cid:86)(cid:73)(cid:68)(cid:69)(cid:68)(cid:0)(cid:84)(cid:72)(cid:65)(cid:84)(cid:0)(cid:78)(cid:79)(cid:0)(cid:83)(cid:73)(cid:71)(cid:78)(cid:73)(cid:70)(cid:73)(cid:67)(cid:65)(cid:78)(cid:84)(cid:0)(cid:79)(cid:66)(cid:76)(cid:73)(cid:71)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:83)(cid:0)(cid:82)(cid:69)(cid:77)(cid:65)(cid:73)(cid:78)(cid:9)(cid:27)(cid:0)(cid:8)(cid:19)(cid:9)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:80)(cid:82)(cid:73)(cid:67)(cid:69)(cid:0)(cid:77)(cid:85)(cid:83)(cid:84)(cid:0)(cid:66)(cid:69)(cid:0)
(cid:70)(cid:73)(cid:88)(cid:69)(cid:68)(cid:0) (cid:79)(cid:82)(cid:0) (cid:68)(cid:69)(cid:84)(cid:69)(cid:82)(cid:77)(cid:73)(cid:78)(cid:65)(cid:66)(cid:76)(cid:69)(cid:27)(cid:0) (cid:65)(cid:78)(cid:68)(cid:0) (cid:8)(cid:20)(cid:9)(cid:0) (cid:67)(cid:79)(cid:76)(cid:76)(cid:69)(cid:67)(cid:84)(cid:73)(cid:66)(cid:73)(cid:76)(cid:73)(cid:84)(cid:89)(cid:0) (cid:77)(cid:85)(cid:83)(cid:84)(cid:0) (cid:66)(cid:69)(cid:0) (cid:82)(cid:69)(cid:65)(cid:83)(cid:79)(cid:78)(cid:65)(cid:66)(cid:76)(cid:89)(cid:0)
assured. Shipping revenue is included in net sales while the related 
costs,  including  shipping  and  handling  costs,  are  included  in  the 
cost of products sold. The Company allows its customers to return 
product  for  exchange  or  credit  subject  to  certain  limitations. 
A provision for such returns is recorded at the time of sale based 
upon historical experience. 

Service  revenue  associated  with  configuration,  training  and 
other  services  is  recognized  when  the  work  is  complete  and  the 
four  criteria  discussed  above  have  been  met.  Service  revenues 
have represented less than 10% of total net sales for fiscal years 
2008, 2007 and 2006. 

Accounts Receivable 
The  Company  maintains  an  allowance  for  doubtful  accounts  for 
estimated  losses  resulting  from  the  inability  of  our  customers  to 
make  required  payments.  In  estimating  the  required  allowance, 
the  Company  takes  into  consideration  the  overall  quality  and 
aging of the receivable portfolio, the existence of credit insurance, 
specifically identified customer risks and historical write-off expe-
rience. If actual customer performance were to deteriorate to an 
extent not expected by the Company, additional allowances may 
be required which could have an adverse effect on the Company’s 
financial results. Conversely, if actual customer performance were 
to  improve  to  an  extent  not  expected  by  us,  a  reduction  in  the 
allowance may be required which could have a favorable effect on 
the Company’s consolidated financial results. 

Inventories 
Inventories, consisting entirely of finished goods, are stated at the 
lower  of  cost  or  market,  cost  being  determined  on  the  first-in, 
first-out (“FIFO”) method. Inventory is written down for estimated 
obsolescence equal to the difference between the cost of inven-
tory and the estimated market value, based upon an aging analy-
sis of the inventory on hand, specifically known inventory-related 
risks  (such  as  technological  obsolescence  and  the  nature  of  ven-
dor terms surrounding price protection and product returns), for-
eign  currency  fluctuations  for  foreign-sourced  product  and 
assumptions about future demand. 

36

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

continued

Vendor Incentives 
The Company receives incentives from vendors related to cooper-
ative  advertising  allowances,  infrastructure  funding,  volume 
rebates and other incentive agreements. These incentives are gen-
erally under quarterly, semi-annual or annual agreements with the 
(cid:86)(cid:69)(cid:78)(cid:68)(cid:79)(cid:82)(cid:83)(cid:27)(cid:0)(cid:72)(cid:79)(cid:87)(cid:69)(cid:86)(cid:69)(cid:82)(cid:12)(cid:0)(cid:83)(cid:79)(cid:77)(cid:69)(cid:0)(cid:79)(cid:70)(cid:0)(cid:84)(cid:72)(cid:69)(cid:83)(cid:69)(cid:0)(cid:73)(cid:78)(cid:67)(cid:69)(cid:78)(cid:84)(cid:73)(cid:86)(cid:69)(cid:83)(cid:0)(cid:65)(cid:82)(cid:69)(cid:0)(cid:78)(cid:69)(cid:71)(cid:79)(cid:84)(cid:73)(cid:65)(cid:84)(cid:69)(cid:68)(cid:0)(cid:79)(cid:78)(cid:0)(cid:65)(cid:78)(cid:0)
ad-hoc  basis  to  support  specific  programs  mutually  developed 
(cid:87)(cid:73)(cid:84)(cid:72)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:86)(cid:69)(cid:78)(cid:68)(cid:79)(cid:82)(cid:14)(cid:0)(cid:53)(cid:78)(cid:82)(cid:69)(cid:83)(cid:84)(cid:82)(cid:73)(cid:67)(cid:84)(cid:69)(cid:68)(cid:0)(cid:86)(cid:79)(cid:76)(cid:85)(cid:77)(cid:69)(cid:0)(cid:82)(cid:69)(cid:66)(cid:65)(cid:84)(cid:69)(cid:83)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:69)(cid:65)(cid:82)(cid:76)(cid:89)(cid:0)(cid:80)(cid:65)(cid:89)(cid:77)(cid:69)(cid:78)(cid:84)(cid:0)
discounts  received  from  vendors  are  recorded  when  they  are 
earned as a reduction of inventory and as a reduction of cost of 
products  sold  as  the  related  inventory  is  sold.  Vendor  incentives 
earned for specifically identified cooperative advertising programs 
and infrastructure funding are recorded as adjustments to selling, 
general and administrative expenses, and any amounts earned in 
excess of the related cost is recorded in the same manner as unre-
stricted volume rebates, as discussed above. 

Reserves for receivables on vendor programs are recorded for 
estimated  losses  resulting  from  vendors’  inability  to  pay  or  rejec-
tions by vendors of claims. Should amounts recorded as outstand-
ing receivables from vendors be deemed uncollectible, additional 
allowances  may  be  required  which  could  have  an  adverse  effect 
on the Company’s consolidated financial results. 

Property and Equipment 
Property  and  equipment  are  stated  at  cost  and  property  and 
equipment under capital leases are stated at the present value of 
the  future  minimum  lease  payments.  Depreciation  expense 
includes  depreciation  of  purchased  property  and  equipment  and 
assets recorded under capital leases. Depreciation expense is com-
puted  over  the  shorter  of  the  estimated  economic  lives  or  lease 
periods using the straight-line method as follows: 

Buildings and improvements. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Leasehold improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Furniture, fixtures and equipment  . . . . . . . . . . . . . . . . . . . . . . . .

Years

15-39
3-10
3-10

Expenditures for renewals and improvements that significantly 
add to productive capacity or extend the useful life of an asset are 
capitalized. Expenditures for maintenance and repairs are charged 
to operations when incurred. When assets are sold or retired, the 
cost  of  the  asset  and  the  related  accumulated  depreciation  are 
eliminated and any gain or loss is recognized at such time.

Long-Lived Assets 
Long-lived  assets  are  reviewed  for  potential  impairment  at  such 
time  when  events  or  changes  in  circumstances  indicate  that  the 
carrying  amount  of  the  asset  may  not  be  recoverable. 

An  impairment  loss  is  evaluated  when  the  sum  of  the  expected, 
undiscounted  future  net  cash  flows  is  less  than  the  carrying 
amount  of  the  asset.  Any  impairment  loss  is  measured  by 
comparing the fair value of the asset to its carrying value. 

Goodwill 
The Company accounts for goodwill and other intangible assets in 
accordance SFAS No. 142, “Goodwill and Other Intangible Assets.” 
SFAS No. 142 requires an annual review for impairment, or more 
frequently if impairment indicators arise. This testing includes the 
determination  of  each  reporting  unit’s  fair  value  using  market 
multiples and discounted cash flow modeling. The Company per-
forms  its  annual  review  for  goodwill  impairment  in  the  fourth 
quarter of each fiscal year. 

Intangible Assets 
Included within other assets at both January 31, 2008 and 2007 
are  certain  intangible  assets  including  capitalized  software  costs, 
as well as value assigned to the acquired customer lists and trade-
marks primarily related to the acquisitions of Computer 2000 AG 
(“Computer 2000”) and Azlan Group PLC (“Azlan”). Such capital-
ized  costs  and  intangibles  are  being  amortized  over  a  period  of 
three to ten years. 

The  Company  capitalizes  computer  software  costs  that  meet 
both  the  definition  of  internal-use  software  and  defined  criteria 
for  capitalization  in  accordance  with  the  American  Institute  of 
Certified  Public  Accountants’  Statement  of  Position  No.  98-1, 
“Accounting  for  the  Cost  of  Computer  Software  Developed  or 
(cid:47)(cid:66)(cid:84)(cid:65)(cid:73)(cid:78)(cid:69)(cid:68)(cid:0)(cid:70)(cid:79)(cid:82)(cid:0)(cid:41)(cid:78)(cid:84)(cid:69)(cid:82)(cid:78)(cid:65)(cid:76)(cid:0)(cid:53)(cid:83)(cid:69)(cid:14)(cid:118)

The  Company’s  accounting  policy  is  to  amortize  capitalized 
software costs on a straight-line basis over periods ranging from 
three  to  ten  years,  depending  upon  the  nature  of  the  software, 
the  stability  of  the  hardware  platform  on  which  the  software  is 
installed, its fit in the Company’s overall strategy, and our experi-
ence with similar software. It is the Company’s policy to amortize 
personal  computer-related  software,  such  as  spreadsheet  and 
word processing applications, over three years, which reflects the 
rapid  changes  in  personal  computer  software.  Mainframe  soft-
ware  licenses  are  amortized  over  five  years,  which  is  in  line  with 
the longer economic life of mainframe systems compared to per-
sonal computer systems. Finally, strategic applications such as cus-
tomer relationship management and enterprise-wide systems are 
amortized over seven to ten years based on their strategic fit and 
the Company’s historical experience with such applications. 

Tech Data Corporation

37

Product Warranty 
The  Company’s  vendors  generally  warrant  the  products  distrib-
uted by the Company and allow the Company to return defective 
products, including those that have been returned to the Company 
by  its  customers.  The  Company  does  not  independently  warrant 
the  products  it  distributes.  However,  in  several  countries  where 
the Company operates, the Company is responsible for defective 
product  as  a  matter  of  law.  The  time  period  required  by  law  in 
certain  countries  exceeds  the  warranty  period  provided  by  the 
manufacturer. The Company is obligated to provide warranty pro-
(cid:84)(cid:69)(cid:67)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:70)(cid:79)(cid:82)(cid:0)(cid:83)(cid:65)(cid:76)(cid:69)(cid:83)(cid:0)(cid:79)(cid:70)(cid:0)(cid:67)(cid:69)(cid:82)(cid:84)(cid:65)(cid:73)(cid:78)(cid:0)(cid:41)(cid:52)(cid:0)(cid:80)(cid:82)(cid:79)(cid:68)(cid:85)(cid:67)(cid:84)(cid:83)(cid:0)(cid:87)(cid:73)(cid:84)(cid:72)(cid:73)(cid:78)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:37)(cid:85)(cid:82)(cid:79)(cid:80)(cid:69)(cid:65)(cid:78)(cid:0)(cid:53)(cid:78)(cid:73)(cid:79)(cid:78)(cid:0)
(cid:8)(cid:104)(cid:37)(cid:53)(cid:118)(cid:9)(cid:0) (cid:70)(cid:79)(cid:82)(cid:0) (cid:85)(cid:80)(cid:0) (cid:84)(cid:79)(cid:0) (cid:84)(cid:87)(cid:79)(cid:0) (cid:89)(cid:69)(cid:65)(cid:82)(cid:83)(cid:0) (cid:65)(cid:83)(cid:0) (cid:82)(cid:69)(cid:81)(cid:85)(cid:73)(cid:82)(cid:69)(cid:68)(cid:0) (cid:85)(cid:78)(cid:68)(cid:69)(cid:82)(cid:0) (cid:84)(cid:72)(cid:69)(cid:0) (cid:37)(cid:53)(cid:0) (cid:68)(cid:73)(cid:82)(cid:69)(cid:67)(cid:84)(cid:73)(cid:86)(cid:69)(cid:0)
where  vendors  have  not  affirmatively  agreed  to  provide  pass-
through  protection.  To  date,  the  Company  has  not  incurred  any 
significant costs for defective products under these legal require-
ments. The Company does warrant services with regard to prod-
ucts  integrated  for  its  customers.  A  provision  for  estimated 
warranty  costs  is  recorded  at  the  time  of  sale  and  periodically 
adjusted  to  reflect  actual  experience.  To  date,  the  Company  has 
not  incurred  any  significant  service  warranty  costs.  Fees  charged 
for  products  configured  by  the  Company  represented  less  than 
10% of net sales for fiscal years 2008, 2007 and 2006. 

Income Taxes 
Income  taxes  are  accounted  for  under  the  liability  method. 
Deferred  taxes  reflect  the  tax  consequences  on  future  years  of 
differences between the tax basis of assets and liabilities and their 
financial  reporting  amounts.  Deferred  taxes  have  not  been 
provided  on  the  cumulative  undistributed  earnings  of  foreign 
subsidiaries  or  the  cumulative  translation  adjustment  related  to 
those  investments  because  such  amounts  are  expected  to  be 
reinvested indefinitely. 

The  Company’s  future  effective  tax  rates  could  be  adversely 
affected  by  earnings  being  lower  than  anticipated  in  countries 
with lower statutory rates, changes in the valuation of its deferred 
tax  assets  or  liabilities  or  changes  in  tax  laws  or  interpretations 
thereof.  In  addition,  the  Company  is  subject  to  the  continuous 
examination  of  its  income  tax  returns  by  the  Internal  Revenue 
Service and other tax authorities. The Company regularly assesses 
the likelihood of adverse outcomes resulting from these examina-
tions to determine the adequacy of its provision for income taxes. 
To  the  extent  the  Company  were  to  prevail  in  matters  for  which 
accruals have been established or be required to pay amounts in 
excess of such accruals, the Company’s effective tax rate in a given 
financial statement period could be materially affected. 

Concentration of Credit Risk 
The  Company  sells  its  products  to  a  large  base  of  value-added 
resellers,  direct  marketers,  retailers  and  corporate  resellers 
throughout  North  America,  Latin  America  and  Europe.  The 
Company  performs  ongoing  credit  evaluations  of  its  customers 
and  generally  does  not  require  collateral.  The  Company  has 
obtained  credit  insurance,  which  insures  a  percentage  of  credit 
extended by the Company to certain of its customers against pos-
sible  loss.  The  Company  makes  provisions  for  estimated  credit 
losses at the time of sale. No single customer accounted for more 
than  ten  percent  of  the  Company’s  net  sales  during  fiscal  years 
2008, 2007 and 2006. 

Foreign Currency Translation 
Income and expense accounts of foreign operations are translated 
at  weighted  average  exchange  rates  during  the  year.  Assets  and 
liabilities  of  foreign  operations  that  operate  in  a  local  currency 
(cid:69)(cid:78)(cid:86)(cid:73)(cid:82)(cid:79)(cid:78)(cid:77)(cid:69)(cid:78)(cid:84)(cid:0) (cid:65)(cid:82)(cid:69)(cid:0) (cid:84)(cid:82)(cid:65)(cid:78)(cid:83)(cid:76)(cid:65)(cid:84)(cid:69)(cid:68)(cid:0) (cid:84)(cid:79)(cid:0) (cid:53)(cid:14)(cid:51)(cid:14)(cid:0) (cid:68)(cid:79)(cid:76)(cid:76)(cid:65)(cid:82)(cid:83)(cid:0) (cid:65)(cid:84)(cid:0) (cid:84)(cid:72)(cid:69)(cid:0) (cid:69)(cid:88)(cid:67)(cid:72)(cid:65)(cid:78)(cid:71)(cid:69)(cid:0) (cid:82)(cid:65)(cid:84)(cid:69)(cid:83)(cid:0)
in  effect  at  the  balance  sheet  date,  with  the  related  translation 
gains  or  losses  reported  as  components  of  accumulated  other 
comprehensive income in shareholders’ equity. 

Derivative Financial Instruments 
The  Company  faces  exposure  to  changes  in  foreign  currency 
exchange rates and interest rates. The Company reduces its expo-
sure by creating offsetting positions through the use of derivative 
financial  instruments.  The  majority  of  these  instruments  have 
terms of 90 days or less. It is the Company’s policy to utilize finan-
cial  instruments  to  reduce  risk  where  appropriate  and  prohibit 
entering  into  derivative  financial  instruments  for  speculative  or 
trading purposes. 

Derivative  financial  instruments  are  marked-to-market  each 
period  with  gains  and  losses  on  these  contracts  recorded  in  the 
Company’s  Consolidated  Statement  of  Operations  within  “net 
foreign  currency  exchange  (gain)  loss”  in  the  period  in  which 
their  value  changes,  with  the  offsetting  entry  for  unsettled 
positions  being  booked  to  either  other  current  assets  or  other 
current liabilities. 

The  notional  amount  of  forward  exchange  contracts  is  the 
amount  of  foreign  currency  to  be  bought  or  sold  at  maturity. 
Notional  amounts  are  indicative  of  the  extent  of  the  Company’s 
involvement  in  the  various  types  and  uses  of  derivative  financial 
instruments and are not a measure of the Company’s exposure to 
credit or market risks through its use of derivatives. The estimated 
fair value of derivative financial instruments represents the amount 
required  to  enter  into  similar  offsetting  contracts  with  similar 
remaining maturities based on quoted market prices. 

38

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

continued

The Company’s derivative financial instruments outstanding at 

January 31, 2008 and 2007 are as follows: 

January 31, 2008

January 31, 2007

Notional 
amounts

Estimated 
fair value

Notional 
amounts

Estimated 
fair value 

(In thousands)

Foreign exchange 

forward 
contracts . . . . . . $1,114,349

$(4,935)

$1,043,076

$(1,604)

Fair Value of Financial Instruments 
The  carrying  amounts  of  cash  and  cash  equivalents,  accounts 
receivable,  accounts  payable  and  accrued  expenses  approximate 
fair value because of the short maturity of these items. The carry-
ing  amount  of  debt  outstanding  pursuant  to  bank  credit  agree-
ments approximates fair value as interest rates on these instruments 
approximate current market rates. The estimated fair value of the 
convertible  senior  debentures  was  approximately  $325.5  million 
and  $339.0  million  at  January  31,  2008  and  2007,  respectively, 
based upon available market information. 

Comprehensive Income (Loss) 
Comprehensive  income  (loss)  is  defined  as  the  change  in  equity 
(net assets) of a business enterprise during a period from transac-
tions  and  other  events  and  circumstances  from  non-owner 
sources, and is comprised of “net income (loss)” and “other com-
prehensive  income  (loss).”  The  Company’s  other  comprehensive 
(loss) income is comprised exclusively of changes in the Company’s 
currency translation adjustment account (“CTA account”), including 
income taxes attributable to those changes. 

Comprehensive income (loss), net of taxes, for the years ended 

January 31, 2008, 2007 and 2006 is as follows: 

Year ended January 31, 

2008

2007

2006

(In thousands)

Comprehensive income (loss):

Net income (loss)  . . . . . . . . . . . . $108,269
Change in CTA(1) . . . . . . . . . . . . .
184,758

$ (96,981)
81,498

$ 26,586
(86,043)

Total . . . . . . . . . . . . . . . . . . . . $293,027

$ (15,483)

$ (59,457)

(1)   Net of income tax benefit of $5.6 million for the year ended January 31, 2008. 

There was no income tax effect in fiscal years 2007 or 2006. 

Accumulated  comprehensive  (loss)  income  includes  $23.0  mil-
lion  of  income  taxes  at  January  31,  2008  and  $28.6  million  of 
income taxes at both January 31, 2007 and 2006. 

Stock-Based Compensation 
Effective  February  1,  2006  (the  “Effective  Date”),  the  Company 
adopted  the  fair  value  recognition  provisions  of  SFAS  No.  123 
(revised 2004), “Share-Based Payments” (“SFAS No. 123R”). SFAS 
No.  123R  requires  all  stock-based  payments  to  employees  and 
non-employee  members  of  the  board  of  directors,  including 
grants  of  all  employee  equity  incentives,  to  be  recognized  in  the 
Company’s Consolidated Statement of Operations based on their 
fair  values.  In  March  2005,  the  SEC  issued  Staff  Accounting 
Bulletin  No.  107  (“SAB  No.  107”)  regarding  its  interpretation  of 
SFAS  No.  123R  and  the  valuation  of  stock-based  payments  for 
public companies. The Company has applied the provisions of SAB 
No. 107 in its adoption of SFAS No. 123R. 

SFAS No. 123R eliminates the ability to account for stock-based 
compensation  transactions  using  the  intrinsic  value  method  pre-
scribed under APB Opinion No. 25, “Accounting for Stock Issued 
to Employees,” and instead, generally requires that such transac-
tions be accounted for using a fair-value based method. Through 
fiscal  2005,  the  Company  used  the  Black-Scholes  option-pricing 
model to determine the fair value of its stock options under SFAS 
No. 123, “Accounting for Stock-Based Compensation” (“SFAS No. 
123”),  for  the  pro  forma  disclosures  required  under  this  pro-
nouncement. Beginning in fiscal 2006, the Company began issu-
ing  maximum  value  stock-settled  stock  appreciation  rights  (“MV 
Stock-settled SARs”) and maximum value stock options (“MVOs”), 
both of which are further discussed below. The fair value of MV 
Stock-settled SARs and MVOs under SFAS No. 123R is determined 
using  a  two-step  valuation  model  utilizing  both  the  Hull-White 
Lattice (binomial) and Black-Scholes option-pricing models, which 
is  consistent  with  the  valuation  method  used  for  the  MV  Stock-
settled SARs and MVOs previously included in the Company’s pro 
forma disclosures under SFAS No. 123. 

The Company has elected the “modified prospective” method 
as  permitted  by  SFAS  No.  123R,  and  accordingly,  prior  periods 
have  not  been  restated  to  reflect  the  impact  of  SFAS  No.  123R. 
The modified prospective method requires compensation expense 
to  be  recognized  for  all  stock-based  awards  granted  after  the 

Tech Data Corporation

39

Effective  Date  as  well  as  for  all  awards  granted  prior  to  the 
Effective  Date  that  remain  unvested  on  the  Effective  Date. 
Stock-based  compensation  expense  for  awards  granted  prior  to 
February  1,  2006  is  based  on  the  grant  date  fair  value  as 
previously  determined  under  the  provisions  of  SFAS  No.  123. 
Effective February 1, 2006 the Company began to recognize com-
pensation  expense,  reduced  for  estimated  forfeitures,  on  a 
straight-line  basis  over  the  requisite  service  period  of  the  award, 
which is generally the vesting term of the outstanding stock awards. 
The  Company  estimated  the  forfeiture  rates  for  the  fiscal 
years  ended  January  31,  2008  and  2007  based  on  its  historical 
experience  during  the  preceding  five  fiscal  years.  For  the  fiscal 
years ended January 31, 2008 and 2007, the Company recorded 
$10.3  million  and  $8.0  million,  respectively,  of  stock-based 
compensation  expense,  which  is  included  in  “selling,  general 
and  administrative  expenses”  in  the  Consolidated  Statement 
of Operations. 

In  accordance  with  SFAS  No.  123R,  beginning  in  the  quarter 
ended April 30, 2006, the Company has presented the tax bene-
fits resulting from tax deductions in excess of compensation cost 
recognized for stock-based awards (excess tax benefits) both as an 
operating  activity  and  as  a  financing  activity  in  the  Consolidated 
Statement  of  Cash  Flows.  Cash  received  from  stock  option  exer-
cises  during  the  fiscal  years  ended  January  31,  2008  and  2007 
was  $12.5  million  and  $25.2  million,  respectively,  and  the  actual 
benefit  received  from  the  tax  deduction  from  stock  option  exer-
cises  of  the  stock-based  payment  awards  was  $1.1  million  and 
$2.7  million,  respectively,  for  the  fiscal  years  ended  January  31, 
2008 and 2007. 

Prior  to  the  adoption  of  SFAS  No.  123R,  the  Company  mea-
sured  compensation  expense  for  its  stock-based  compensation 
plans using the intrinsic value method prescribed by APB Opinion 
No.  25  and  related  interpretations.  Options  granted  under  these 
plans  had  an  exercise  price  equal  to  or  greater  than  the  market 
value of the underlying common stock on the date of grant. The 
Company applied the disclosure only provisions of SFAS No. 148, 
which amends SFAS No. 123. SFAS No. 148 allowed for the con-
tinued  use  of  recognition  and  measurement  principles  of  APB 
Opinion No. 25 and related interpretations in accounting for those 
plans, but required disclosure of compensation expense as if the 
fair value-based method had been applied. 

The  following  table  illustrates  the  pro  forma  net  income  and 
pro  forma  income  per  share  for  fiscal  year  ended  January  31, 
2006, reflecting the compensation cost that the Company would 
have  recorded  on  its  equity  incentive  plans  had  it  used  the  fair 
value-based  method  at  grant  date  for  awards  under  the  plans 
consistent with the method prescribed by SFAS No. 123.

Net income, as reported . . . . . . . . . . . . . . . . . . . .
Deduct: Total stock-based employee 

compensation expense determined under 
fair value-based method for all awards, 
net of related tax effects (1) . . . . . . . . . . . . . . . .

Year ended
January 31, 2006 

(In thousands, except
per share amounts)
$ 26,586

(22,804)

Pro forma net income . . . . . . . . . . . . . . . . . . . . . .

$ 3,782

Earnings per share:

Basic—as reported . . . . . . . . . . . . . . . . . . . . . .

Basic—pro forma  . . . . . . . . . . . . . . . . . . . . . . .

Diluted—as reported  . . . . . . . . . . . . . . . . . . . .

Diluted—pro forma  . . . . . . . . . . . . . . . . . . . . .

$      0.46

$      0.07

$      0.45

$      0.06

(1)   Pro-forma  stock  compensation  expense  for  the  year  ended  January  31,  2006 
includes  incremental  expense,  net  of  the  related  tax  effects,  of  approximately 
$15.4  million  related  to  the  accelerated  vesting  of  stock  options  issued  in 
March 2004. 

Treasury Stock 
Treasury  stock  is  accounted  for  at  cost.  The  reissuance  of  shares 
from  treasury  stock  for  exercises  of  stock-based  awards  or  other 
corporate  purposes  is  based  on  the  weighted  average  purchase 
price of the shares. 

Cash Management System 
(cid:53)(cid:78)(cid:68)(cid:69)(cid:82)(cid:0) (cid:84)(cid:72)(cid:69)(cid:0) (cid:35)(cid:79)(cid:77)(cid:80)(cid:65)(cid:78)(cid:89)(cid:7)(cid:83)(cid:0) (cid:67)(cid:65)(cid:83)(cid:72)(cid:0) (cid:77)(cid:65)(cid:78)(cid:65)(cid:71)(cid:69)(cid:77)(cid:69)(cid:78)(cid:84)(cid:0) (cid:83)(cid:89)(cid:83)(cid:84)(cid:69)(cid:77)(cid:12)(cid:0) (cid:84)(cid:79)(cid:0) (cid:84)(cid:72)(cid:69)(cid:0) (cid:69)(cid:88)(cid:84)(cid:69)(cid:78)(cid:84)(cid:0)
that cash is unavailable locally, disbursements cleared by the bank 
are reimbursed on a daily basis from available credit facilities. As a 
result,  checks  issued  but  not  yet  presented  to  the  bank  by  the 
payee are classified in accounts payable. Included in accounts pay-
able are $136.6 million and $115.5 million at January 31, 2008 and 
2007, respectively, for which checks are outstanding.

40

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

continued

Statement of Cash Flows 
Short-term  investments  which  are  highly  liquid  and  have  an 
original  maturity  of  ninety  days  or  less  are  considered 
cash equivalents. 

Contingencies 
The  Company  accrues  for  contingent  obligations,  including  esti-
mated  legal  costs,  when  the  obligation  is  probable  and  the 
amount  is  reasonably  estimable.  As  facts  concerning  contingen-
cies  become  known,  the  Company  reassesses  its  position  and 
makes  appropriate  adjustments  to  the  financial  statements. 
Estimates that are particularly sensitive to future changes include 
those  related  to  tax,  legal  and  other  regulatory  matters  such  as 
imports and exports, the imposition of international governmental 
controls, changes in the interpretation and enforcement of inter-
national laws (particularly related to items such as duty and taxa-
tion), and the impact of local economic conditions and practices, 
which are all subject to change as events evolve and as additional 
information  becomes  available  during  the  administrative  and 
litigation process. 

Recent Accounting Pronouncements & Legislation 
In  December  2007,  the  Financial  Accounting  Standards  Board 
(“FASB”)  issued  Statement  of  Financial  Accounting  Standards 
No.  141(R),  “Business  Combinations”  (“SFAS  No.  141R”). 
SFAS  No.  141R  supercedes  Statement  of  Financial  Accounting 
Standards  No.  141,  “Business  Combinations,”  and  establishes 
principles  and  requirements  as  to  how  an  acquirer  in  a  business 
combination recognizes and measures in its financial statements: 
the  identifiable  assets  acquired,  the  liabilities  assumed  and  any 
(cid:67)(cid:79)(cid:78)(cid:84)(cid:82)(cid:79)(cid:76)(cid:76)(cid:73)(cid:78)(cid:71)(cid:0) (cid:73)(cid:78)(cid:84)(cid:69)(cid:82)(cid:69)(cid:83)(cid:84)(cid:27)(cid:0) (cid:71)(cid:79)(cid:79)(cid:68)(cid:87)(cid:73)(cid:76)(cid:76)(cid:0) (cid:65)(cid:67)(cid:81)(cid:85)(cid:73)(cid:82)(cid:69)(cid:68)(cid:0) (cid:73)(cid:78)(cid:0) (cid:84)(cid:72)(cid:69)(cid:0) (cid:66)(cid:85)(cid:83)(cid:73)(cid:78)(cid:69)(cid:83)(cid:83)(cid:0) (cid:67)(cid:79)(cid:77)(cid:66)(cid:73)(cid:78)(cid:65)-
(cid:84)(cid:73)(cid:79)(cid:78)(cid:27)(cid:0) (cid:79)(cid:82)(cid:0) (cid:65)(cid:0) (cid:71)(cid:65)(cid:73)(cid:78)(cid:0) (cid:70)(cid:82)(cid:79)(cid:77)(cid:0) (cid:65)(cid:0) (cid:66)(cid:65)(cid:82)(cid:71)(cid:65)(cid:73)(cid:78)(cid:0) (cid:80)(cid:85)(cid:82)(cid:67)(cid:72)(cid:65)(cid:83)(cid:69)(cid:14)(cid:0) (cid:51)(cid:38)(cid:33)(cid:51)(cid:0) (cid:46)(cid:79)(cid:14)(cid:0) (cid:17)(cid:20)(cid:17)(cid:50)(cid:0) (cid:82)(cid:69)(cid:81)(cid:85)(cid:73)(cid:82)(cid:69)(cid:83)(cid:0)
the  acquirer  to  record  contingent  consideration  at  the  estimated 
fair  value  at  the  time  of  purchase  and  establishes  principles  for 
treating subsequent changes in such estimates which could affect 
earnings in those periods. SFAS No. 141R also requires additional 
disclosure designed to enable users of the financial statements to 
evaluate the nature and financial effects of the business combina-
tion and disallows the capitalization of acquisition costs. SFAS No. 
141R  is  to  be  applied  prospectively  by  the  Company  to  business 
combinations  beginning  February  1,  2009  and  early  adoption  is 
prohibited.  The  Company  will  implement  the  provisions  of  SFAS 
No. 141R for any acquisitions made by the Company subsequent 
to February 1, 2009. 

In  December  2007,  the  FASB  issued  Statement  of  Financial 
Accounting  Standards  No.  160,  “Noncontrolling  Interests  in 
Consolidated Financial Statements—an amendment of ARB No. 51” 
(“SFAS No. 160”). SFAS No. 160 establishes new accounting and 

reporting standards for the noncontrolling interest in a subsidiary 
and the accounting for the deconsolidation of a subsidiary. SFAS 
No. 160 also clarifies that changes in a parent’s ownership interest 
in  a  subsidiary  that  do  not  result  in  deconsolidation  are  equity 
transactions  if  the  parent  retains  its  controlling  financial  interest 
and requires that a parent recognize a gain or loss in net income 
when a subsidiary is deconsolidated. The gain or loss will be mea-
sured using the fair value of the noncontrolling equity investment 
on the deconsolidation date. SFAS No. 160 also includes expanded 
disclosure requirements regarding the interests of the parent and 
its  noncontrolling  interest.  SFAS  No.  160  is  effective  for  the 
Company  beginning  February  1,  2009.  Early  adoption  is  prohib-
ited, but upon adoption SFAS No. 160 requires retroactive presen-
tation  and  disclosure  related  to  existing  minority  interests.  The 
Company  is  currently  in  the  process  of  assessing  what  impact 
SFAS  No.  160  may  have  on  its  consolidated  financial  position, 
results of operations or cash flows. 

In  February  2007,  the  FASB  issued  Statement  of  Financial 
Accounting Standard No. 159, “The Fair Value Option for Financial 
Assets  and  Liabilities”  (“SFAS  No.  159”).  SFAS  No.  159  permits 
companies  to  make  an  election  to  carry  certain  eligible  financial 
assets  and  liabilities  at  fair  value,  even  if  fair  value  measurement 
has  not  historically  been  required  for  such  assets  and  liabilities 
(cid:85)(cid:78)(cid:68)(cid:69)(cid:82)(cid:0)(cid:53)(cid:14)(cid:51)(cid:14)(cid:0)(cid:39)(cid:33)(cid:33)(cid:48)(cid:14)(cid:0)(cid:52)(cid:72)(cid:69)(cid:0)(cid:80)(cid:82)(cid:79)(cid:86)(cid:73)(cid:83)(cid:73)(cid:79)(cid:78)(cid:83)(cid:0)(cid:79)(cid:70)(cid:0)(cid:51)(cid:38)(cid:33)(cid:51)(cid:0)(cid:46)(cid:79)(cid:14)(cid:0)(cid:17)(cid:21)(cid:25)(cid:0)(cid:66)(cid:69)(cid:67)(cid:65)(cid:77)(cid:69)(cid:0)(cid:69)(cid:70)(cid:70)(cid:69)(cid:67)-
tive  for  the  Company’s  fiscal  year  beginning  February  1,  2008. 
The adoption of the provisions of SFAS No. 159 did not have an 
impact  on  the  Company’s  consolidated  financial  position,  results 
of operations or cash flows as the Company elected not to record 
eligible instruments in the financial statements at their respective 
fair value. 

In  September  2006,  the  FASB  issued  Statement  of  Financial 
Accounting Standards No. 157, “Fair Value Measurements” (“SFAS 
No.  157”).  SFAS  No.  157  defines  fair  value,  establishes  a  frame-
work  for  measuring  fair  value  in  accordance  with  generally 
accepted accounting principles and expands disclosures about fair 
value measurements. The adoption of the provisions of this state-
ment became effective for the Company’s fiscal year beginning on 
February  1,  2008  and  is  to  be  applied  prospectively.  In  February 
2008,  the  Financial  Accounting  Standards  Board  issued  Staff 
Position  Nos.  157-1  and  157-2  which  partially  deferred  the 
effective date of SFAS No. 157 for one year for certain nonfinan-
cial assets and liabilities and removed certain leasing transactions 
from the scope of SFAS No. 157. The Company is currently evalu-
ating the impact and disclosure requirements of this standard, but 
does  not  expect  SFAS  No.  157  to  have  a  material  impact  on 
its  consolidated  financial  position,  results  of  operations  or 
cash flows.

Tech Data Corporation

41

NOTE 2—EARNINGS PER SHARE (“EPS”) 

Basic EPS is computed by dividing net income by the weighted average number of shares outstanding during the reported period. For the 
years ended January 31, 2008, 2007 and 2006, diluted EPS reflects the potential dilution that could occur assuming the exercise of the 
stock options and similar equity incentives (as further discussed below) using the treasury stock or if-converted method, as applicable. 
The composition of basic and diluted EPS is as follows: 

Year ended January 31, 2008

Year ended January 31, 2007

Year ended January 31, 2006

Net 
income

Weighted 
average 
shares

Per 
share 
amount

Net
loss

Weighted 
average 
shares

Per 
share 
amount

Net 
income

Weighted 
average 
shares

Per 
share 
amount

(In thousands, except per share data)

Net income (loss) per common 

share—basic . . . . . . . . . . . . . . . . . . . . . . . .

$108,269

54,904

$1.97

$(96,981)

55,129

$(1.76)

$26,586

57,749

$0.46

Effect of dilutive securities:

Equity-based compensation awards . . . . . .

—

383

—

—

—

665

Net income (loss) per common 

share—diluted  . . . . . . . . . . . . . . . . . . . . . .

$108,269

55,287

$1.96

$(96,981)

55,129

$(1.76)

$26,586

58,414

$0.45

At  January  31,  2008,  2007  and  2006,  there  were  6,017,838, 
6,912,122  and  3,215,066  shares,  respectively,  excluded  from  the 
computation  of  diluted  earnings  per  share  because  their  effect 
would have been antidilutive. 

In December 2006, the Company issued $350.0 million of con-
vertible  senior  debentures  due  2026.  The  dilutive  impact  of  the 
$350.0 million convertible senior debentures does not impact earn-
ings per share at either January 31, 2008 or 2007, respectively, as 
the conditions for the contingent conversion feature have not been 
met (see further discussion in Note 10—Long Term Debt).

NOTE 3—DISCONTINUED OPERATIONS

In the fourth quarter of fiscal 2006, in order to dedicate strategic 
efforts and resources to core growth opportunities, the Company 
made  the  decision  to  sell  the  European  training  business  (the 
“Training  Business”).  On  March  10,  2006,  the  Company  closed 
the sale of the Training Business to a third-party (the “Purchaser”) 
for total cash consideration of $16.5 million, resulting in an after-
tax gain of $3.8 million. Net assets and other related costs included 
in the sale of the Training Business totaled $11.5 million, including 
$1.4 million of allocated goodwill. The Company provided IT ser-
vices  for  a  transitional  period  of  approximately  six  months,  but 
had no other significant continuing involvement in the operations 
of the Training Business subsequent to the closing of the sale. In 
addition, the Company has realized no continuing cash flows from 
the Training Business subsequent to the closing of the sale. 

In  accordance  with  SFAS  No.  144,  the  sale  of  the  Training 
Business  qualifies  as  a  discontinued  operation.  Accordingly,  the 
results of operations and the gain on sale of the Training Business 
have  been  reclassified  and  included  in  “discontinued  operations, 
net of tax,” within the Consolidated Statement of Operations for 
the fiscal years ended January 31, 2007 and 2006, respectively. 

The following table reflects the results of the Training Business 

reported as discontinued operations for all periods presented: 

Year ended 
January 31,

2007

2006

(In thousands)

Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $5,634
1,259
Cost of products sold . . . . . . . . . . . . . . . . . . . . . . . .

$59,290
11,519

Gross profit  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Selling, general and administrative expenses . . . . . .

4,375
4,056

47,771
42,545

Operating income from 

discontinued operations . . . . . . . . . . . . . . . . . . . .
Provision for income taxes . . . . . . . . . . . . . . . . . . . .

319
207

5,226
1,607

Income from discontinued operations, 

net of tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

112

3,619

Gain on sale of discontinued operations, 

net of tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,834

—

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3,946

$ 3,619

No amounts related to interest expense or interest income have 

been allocated to discontinued operations. 

42

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

continued

NOTE 4—ACCOUNTS RECEIVABLE, NET
Accounts receivable, net is comprised of the following:

January 31,

2008

2007

(In thousands)

Accounts receivable . . . . . . . . . . . . . . . . . .
Allowance for doubtful accounts . . . . . . . .

$2,723,592
(64,146)

$2,533,702
(68,967)

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$2,659,446

$2,464,735

Trade Receivables Purchase Facility Agreements 
The  Company  has  uncommitted  revolving  trade  receivables  pur-
chase facility agreements (the “Receivables Facilities”) with third-
party  financial  institutions  to  sell  accounts  receivable  on  a 
non-recourse basis. The Company uses the Receivables Facilities as 
a source of working capital funding. The Receivables Facilities limit 
the amount of purchased accounts receivable the financial institu-
tions  may  hold  to  $428.2  million  at  January  31,  2008,  based  on 
(cid:67)(cid:85)(cid:82)(cid:82)(cid:69)(cid:78)(cid:67)(cid:89)(cid:0) (cid:69)(cid:88)(cid:67)(cid:72)(cid:65)(cid:78)(cid:71)(cid:69)(cid:0) (cid:82)(cid:65)(cid:84)(cid:69)(cid:83)(cid:0) (cid:65)(cid:84)(cid:0) (cid:84)(cid:72)(cid:65)(cid:84)(cid:0) (cid:68)(cid:65)(cid:84)(cid:69)(cid:14)(cid:0) (cid:53)(cid:78)(cid:68)(cid:69)(cid:82)(cid:0) (cid:84)(cid:72)(cid:69)(cid:0) (cid:50)(cid:69)(cid:67)(cid:69)(cid:73)(cid:86)(cid:65)(cid:66)(cid:76)(cid:69)(cid:83)(cid:0)
Facilities,  the  Company  may  sell  certain  accounts  receivable  (the 
“Receivables”)  in  exchange  for  cash  less  a  discount  based  on 
LIBOR plus a margin. Such transactions have been accounted for 
as a true sale in accordance with SFAS No. 140, “Accounting for 
Transfers and Servicing of Financial Assets and Extinguishment of 
Liabilities.” The Receivables Facilities, which have various expiration 
dates,  require  that  the  Company  continue  to  service,  administer 
and collect the sold accounts receivable. 

During  the  fiscal  years  ended  January  31,  2008,  2007  and 
2006, the Company received gross proceeds of $1.2 billion, $1.3 
billion  and  $796.1  million,  respectively,  from  the  sale  of  the 
Receivables and recognized related discounts totaling $7.2 million, 
$12.5 million and $5.5 million, respectively. The proceeds, net of 
the discount incurred, are reflected in the Consolidated Statement 
of  Cash  Flows  in  operating  activities  within  cash  received  from 
customers and the change in accounts receivable. Prior to the sec-
ond  quarter  of  fiscal  2006,  the  Company  did  not  utilize  the 
Receivables Facilities as a source of funding.

NOTE 5—PROPERTY AND EQUIPMENT, NET

January 31,

2008

2007

(In thousands)

Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Buildings and leasehold improvements . . . . . .
Furniture, fixtures and equipment  . . . . . . . . .

$

7,352
85,875
348,728

$

6,584
91,370
340,398

Less accumulated depreciation . . . . . . . . . . . .

441,955
(312,816)

438,352
(297,590)

$ 129,139

$ 140,762

Depreciation expense, including amortization expense of assets 
recorded under capital leases, included in income from continuing 
operations for the years ended January 31, 2008, 2007 and 2006 
totaled $29.8 million, $31.0 million and $30.6 million, respectively. 
The  Company  has  property  and  equipment  leased  under  capital 
leases for the German logistics center, which was vacated during 
fiscal  2008  (see  further  discussion  at  Note  8—Restructuring 
Programs).  As  of  January  31,  2008,  the  net  book  value  of  $8.9 
million for property and equipment under capital leases is classi-
fied  as  an  asset  held  for  sale  in  “other  assets,  net”  within  the 
Consolidated  Balance  Sheet.  As  of  January  31,  2007,  “property 
and  equipment,  net”  includes  the  originally  capitalized  value  of 
the  German  logistics  center  of  $24.3  million  and  accumulated 
depreciation of $10.5 million.

NOTE 6—GOODWILL AND INTANGIBLE ASSETS

The Company accounts for goodwill and other intangible assets in 
accordance  with  SFAS  No.  142,  “Goodwill  and  Other  Intangible 
Assets.” SFAS No. 142 requires goodwill and indefinite-lived intan-
gible assets be reviewed annually for possible impairment, or more 
frequently if impairment indicators arise. Due to certain indicators 
of impairment within our European reporting unit, the Company 
performed  an  impairment  test  for  goodwill  as  of  July  31,  2006.
These  impairment  indicators  included  significantly  lower  than 
expected revenues in Europe during the quarter, further decelera-
tion  in  IT  demand  during  the  quarter  and  a  heightened  level  of 
pricing  pressure  in  Europe  during  the  quarter.  The  Company’s 
impairment  testing  included  the  determination  of  the  European 

Tech Data Corporation

43

reporting unit’s fair value using market multiples and discounted cash flows modeling. The Company’s reduced earnings and cash flow 
forecast  for  Europe,  primarily  due  to  the  increasingly  competitive  market  conditions  and  uncertain  demand,  resulted  in  the  Company 
determining that a goodwill impairment charge was necessary. During the second quarter of fiscal 2007, the Company recorded a $136.1 
million non-cash charge for the goodwill impairment in Europe. 

The changes in the carrying amount of goodwill for the years ended January 31, 2008 and 2007, respectively, are as follows: 

Balance as of January 31, 2006  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Allocation of goodwill to sale of Training Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustments to allocation of previously recorded purchase price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill impairment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other(1)  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$2,966
—
—
—
—

$ 131,361
(1,400)
990
(136,093)
5,142

$ 134,327
(1,400)
990
(136,093)
5,142

Balance as of January 31, 2007 and 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$2,966

$

— $

2,966

(1) “Other” primarily relates to the effect of fluctuations in foreign currencies.

Included within “other assets, net” are intangible assets as follows: 

Americas

Europe

Total

(In thousands)

January 31, 2008

January 31, 2007

Gross
carrying 
amount

Accumulated 
amortization

Net book 
value

Gross 
carrying 
amount

Accumulated 
amortization

Net book 
value

(In thousands)

(In thousands)

Amortized intangible assets:
Capitalized software and development costs . . . . . . . . . . . . . . . .
Customer lists . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trademarks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$231,365
37,474
9,208
2,363

$142,504
28,442
8,613
1,184

$88,861
9,032
595
1,179

$202,342
31,356
7,806
2,191

$120,847
20,829
5,985
666

$81,495
10,527
1,821
1,525

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$280,410

$180,743

$99,667

$243,695

$148,327

$95,368

The  Company  capitalized  intangible  assets  of  $18.4  million, 
$12.1  million  and  $18.8  million  for  the  years  ended  January  31, 
2008,  2007  and  2006,  respectively.  These  capitalized  intangible 
assets included capitalized interest of $0.3 million for the fiscal year 
ended January  31, 2006. There was no interest capitalized during 
the fiscal years ended January 31, 2008 and 2007. These capitalized 
assets  related  primarily  to  software  and  software  development 
expenditures to be used in the Company’s operations.

The  weighted  average  amortization  period  for  all  intangible 
assets  capitalized  during  fiscal  2008,  2007  and  2006  approxi-
mated five, six and nine years, respectively. The weighted average 
amortization  period  of  all  intangible  assets  was  approximately 
seven  years  for  fiscal  2008,  approximately  eight  years  for  fiscal 
2007 and approximately nine years for fiscal year 2006. 

Amortization  expense  included  in  income  from  continuing 
operations for the years ended January 31, 2008, 2007 and 2006 
totaled $24.1 million, $22.1 million and $21.2 million, respectively. 
Estimated  amortization  expense  of  currently  capitalized  costs  for 
assets placed in service is as follows (in thousands): 

Fiscal year:

2009. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $22,800
18,800
2010. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
13,200
2011. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
11,300
2012. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
10,500
2013. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

44

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

continued

NOTE 7—LOSS ON DISPOSAL OF SUBSIDIARIES

The Company’s loss on disposal of subsidiaries is the result of the 
(cid:35)(cid:79)(cid:77)(cid:80)(cid:65)(cid:78)(cid:89)(cid:7)(cid:83)(cid:0)(cid:68)(cid:69)(cid:67)(cid:73)(cid:83)(cid:73)(cid:79)(cid:78)(cid:0)(cid:84)(cid:79)(cid:0)(cid:69)(cid:88)(cid:73)(cid:84)(cid:0)(cid:73)(cid:84)(cid:83)(cid:0)(cid:79)(cid:80)(cid:69)(cid:82)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:83)(cid:0)(cid:73)(cid:78)(cid:0)(cid:41)(cid:83)(cid:82)(cid:65)(cid:69)(cid:76)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:53)(cid:78)(cid:73)(cid:84)(cid:69)(cid:68)(cid:0)
(cid:33)(cid:82)(cid:65)(cid:66)(cid:0)(cid:37)(cid:77)(cid:73)(cid:82)(cid:65)(cid:84)(cid:69)(cid:83)(cid:0)(cid:8)(cid:104)(cid:53)(cid:33)(cid:37)(cid:118)(cid:9)(cid:0)(cid:65)(cid:83)(cid:0)(cid:80)(cid:65)(cid:82)(cid:84)(cid:0)(cid:79)(cid:70)(cid:0)(cid:73)(cid:84)(cid:83)(cid:0)(cid:79)(cid:78)(cid:71)(cid:79)(cid:73)(cid:78)(cid:71)(cid:0)(cid:73)(cid:78)(cid:73)(cid:84)(cid:73)(cid:65)(cid:84)(cid:73)(cid:86)(cid:69)(cid:83)(cid:0)(cid:84)(cid:79)(cid:0)(cid:79)(cid:80)(cid:84)(cid:73)(cid:77)(cid:73)(cid:90)(cid:69)(cid:0)
profitability and return on capital employed. 

In late March 2007, the Company made the decision to cease 
(cid:79)(cid:80)(cid:69)(cid:82)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:83)(cid:0) (cid:73)(cid:78)(cid:0) (cid:84)(cid:72)(cid:69)(cid:0) (cid:53)(cid:33)(cid:37)(cid:12)(cid:0) (cid:84)(cid:72)(cid:69)(cid:0) (cid:67)(cid:76)(cid:79)(cid:83)(cid:85)(cid:82)(cid:69)(cid:0) (cid:79)(cid:70)(cid:0) (cid:87)(cid:72)(cid:73)(cid:67)(cid:72)(cid:0) (cid:87)(cid:65)(cid:83)(cid:0) (cid:83)(cid:85)(cid:66)(cid:83)(cid:84)(cid:65)(cid:78)(cid:84)(cid:73)(cid:65)(cid:76)(cid:76)(cid:89)(cid:0)
completed by the end of the second quarter of fiscal 2008. During 
the  year  ended  January  31,  2008,  the  Company  recorded  a  loss 
on  disposal  of  this  subsidiary  of  $10.8  million,  which  includes  a 
(cid:4)(cid:25)(cid:14)(cid:24)(cid:0)(cid:77)(cid:73)(cid:76)(cid:76)(cid:73)(cid:79)(cid:78)(cid:0)(cid:73)(cid:77)(cid:80)(cid:65)(cid:73)(cid:82)(cid:77)(cid:69)(cid:78)(cid:84)(cid:0)(cid:79)(cid:78)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:35)(cid:79)(cid:77)(cid:80)(cid:65)(cid:78)(cid:89)(cid:7)(cid:83)(cid:0)(cid:73)(cid:78)(cid:86)(cid:69)(cid:83)(cid:84)(cid:77)(cid:69)(cid:78)(cid:84)(cid:0)(cid:73)(cid:78)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:53)(cid:33)(cid:37)(cid:0)
due  to  a  foreign  currency  exchange  loss  (previously  recorded  in 
shareholders’ equity as accumulated other comprehensive income) 
and  $1.0  million  for  severance  costs  and  fixed  asset  write-offs. 
These  costs  are  reflected  in  the  Consolidated  Statement  of 
Operations  as  “loss  on  disposal  of  subsidiaries,”  which  is  a 
(cid:67)(cid:79)(cid:77)(cid:80)(cid:79)(cid:78)(cid:69)(cid:78)(cid:84)(cid:0) (cid:79)(cid:70)(cid:0) (cid:79)(cid:80)(cid:69)(cid:82)(cid:65)(cid:84)(cid:73)(cid:78)(cid:71)(cid:0) (cid:73)(cid:78)(cid:67)(cid:79)(cid:77)(cid:69)(cid:14)(cid:0) (cid:41)(cid:78)(cid:0) (cid:65)(cid:68)(cid:68)(cid:73)(cid:84)(cid:73)(cid:79)(cid:78)(cid:12)(cid:0) (cid:84)(cid:72)(cid:69)(cid:0) (cid:53)(cid:33)(cid:37)(cid:0) (cid:73)(cid:78)(cid:67)(cid:85)(cid:82)(cid:82)(cid:69)(cid:68)(cid:0)
operating  losses  of  approximately  $0.9  million  during  the  year 
ended  January  31,  2008,  comprised  primarily  of  inventory 
write-downs and occupancy-related expenses. 

During the quarter ended July 31, 2007, the Company executed 
an  agreement  for  the  sale  of  the  Israel  operations  at  an  amount 
approximating local currency net book value. In connection with 
this agreement, the Company recorded a loss on disposal of this 
subsidiary  of  $3.7  million,  which  includes  a  $2.7  million  impair-
ment  on  the  Company’s  investment  in  Israel  due  to  a  foreign 
currency  exchange  loss  (previously  recorded  in  shareholders’ 
equity  as  accumulated  other  comprehensive  income)  and  $1.0 
million  for  costs  related  to  the  sale.  These  costs  are  reflected  in 
the Consolidated Statement of Operations as “loss on disposal of 
subsidiaries,” which is a component of operating income. The sale 
of  the  Israel  operation  closed  during  the  quarter  ended 
October  31,  2007.  Israel  had  an  operating  loss  of  $0.1  million 
during fiscal 2008 through the date of closing.

NOTE 8—RESTRUCTURING PROGRAMS

The  Company’s  restructuring  charges  discussed  below  were 
incurred pursuant to formal plans developed by management and 
are  accounted  for  in  accordance  with  the  guidance  set  forth  in 
SFAS  No.  146,  “Accounting  for  Costs  Associated  with  Exit  or 
Disposal  Activities.”  The costs related to these restructuring pro-
grams are reflected in the Consolidated Statement of Operations 
as  “restructuring  charges,”  which  is  a  component  of  operating 
income.  The  accrued  restructuring  charges  are  included  in 
“accrued  expenses  and  other  liabilities”  in  the  Consolidated 
Balance Sheet. 

Closure of European Logistics Center 
On May 1, 2007, the Company’s Board of Directors approved the 
exit  from  our  logistics  center  in  Germany  (the  “Moers  logistics 
center”).  The  decision  to  exit  this  logistics  center  was  made  to 
enable  the  Company  to  capitalize  on  the  long-term  synergies  of 
having  one  logistics  center  serving  Germany,  Austria  and  the 
Czech  Republic.  Related  to  the  Moers  logistics  center  exit,  Tech 
Data is expanding its logistics center located in Bor, Czech Republic. 
The Company expects the net result of these transactions to be a 
reduction in our future operating expenses. 

In  connection  with  this  closure,  the  Company  recorded  $18.1 
million  in  restructuring  charges,  comprised  of  $8.7  million  of 
workforce reductions and $9.4 million for facility costs and other 
fixed asset write-offs. The recognition of the restructuring charges 
requires  the  Company’s  management  to  make  judgments  and 
estimates regarding the nature, timing and amounts of costs asso-
ciated  with  the  closure  of  the  Moers  logistics  center.  Cash  pay-
ments related to the restructuring program have been funded by 
operating cash flows and the Company’s credit facilities. Although 
the  Company  believes  its  estimates  are  appropriate  and  reason-
able based upon available information, actual results could differ 
from these estimates. The remaining net book value of the Moers 
logistics center of $8.9 million at January 31, 2008 is classified as 
an  asset  held  for  sale  under  SFAS  No.  144,  “Accounting  for  the 
Impairment  or  Disposal  of  Long-lived  Assets”  and,  accordingly, 
reclassified from “property and equipment, net” to “other assets, 
net” in the Consolidated Balance Sheet. 

European Restructuring Program 
In  May  2005,  the  Company  announced  a  formal  restructuring 
program  to  better  align  the  European  operating  cost  structure 
with  the  business  environment  prevailing  at  the  time.  The  initia-
tives related to the restructuring program were completed during 
the third quarter of fiscal 2007. In connection with this restructur-
ing program, the Company recorded charges for workforce reduc-
tions  and  the  optimization  of  facilities  and  systems.  During  the 
year  ended  January  31,  2008,  the  Company  recorded  credits  of 
$2.0 million related to changes in estimates of previously recorded 
restructuring accruals. Through January 31, 2008 (since inception 
of the program), the Company has incurred $52.7 million related 
to  the  restructuring  program,  comprised  of  $38.5  million  for 
workforce  reductions  and  $14.2  million  for  facility  costs.  Cash 
payments related to the restructuring program have been funded 
by operating cash flows and the Company’s credit facilities. 

Tech Data Corporation

45

The Company has an agreement (the “Receivables Securitization 
Program”), amended in December 2007, with a syndicate of banks 
that  allows  the  Company  to  transfer  an  undivided  interest  in  a 
(cid:68)(cid:69)(cid:83)(cid:73)(cid:71)(cid:78)(cid:65)(cid:84)(cid:69)(cid:68)(cid:0)(cid:80)(cid:79)(cid:79)(cid:76)(cid:0)(cid:79)(cid:70)(cid:0)(cid:53)(cid:14)(cid:51)(cid:14)(cid:0)(cid:65)(cid:67)(cid:67)(cid:79)(cid:85)(cid:78)(cid:84)(cid:83)(cid:0)(cid:82)(cid:69)(cid:67)(cid:69)(cid:73)(cid:86)(cid:65)(cid:66)(cid:76)(cid:69)(cid:12)(cid:0)(cid:79)(cid:78)(cid:0)(cid:65)(cid:78)(cid:0)(cid:79)(cid:78)(cid:71)(cid:79)(cid:73)(cid:78)(cid:71)(cid:0)(cid:66)(cid:65)(cid:83)(cid:73)(cid:83)(cid:12)(cid:0)
to provide security or collateral for borrowings up to a maximum 
(cid:79)(cid:70)(cid:0)(cid:4)(cid:19)(cid:16)(cid:21)(cid:14)(cid:16)(cid:0)(cid:77)(cid:73)(cid:76)(cid:76)(cid:73)(cid:79)(cid:78)(cid:14)(cid:0)(cid:53)(cid:78)(cid:68)(cid:69)(cid:82)(cid:0)(cid:84)(cid:72)(cid:73)(cid:83)(cid:0)(cid:80)(cid:82)(cid:79)(cid:71)(cid:82)(cid:65)(cid:77)(cid:12)(cid:0)(cid:87)(cid:72)(cid:73)(cid:67)(cid:72)(cid:0)(cid:69)(cid:88)(cid:80)(cid:73)(cid:82)(cid:69)(cid:83)(cid:0)(cid:73)(cid:78)(cid:0)(cid:36)(cid:69)(cid:67)(cid:69)(cid:77)(cid:66)(cid:69)(cid:82)(cid:0)
(cid:18)(cid:16)(cid:16)(cid:24)(cid:12)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:35)(cid:79)(cid:77)(cid:80)(cid:65)(cid:78)(cid:89)(cid:0)(cid:76)(cid:69)(cid:71)(cid:65)(cid:76)(cid:76)(cid:89)(cid:0)(cid:73)(cid:83)(cid:79)(cid:76)(cid:65)(cid:84)(cid:69)(cid:68)(cid:0)(cid:67)(cid:69)(cid:82)(cid:84)(cid:65)(cid:73)(cid:78)(cid:0)(cid:53)(cid:14)(cid:51)(cid:14)(cid:0)(cid:84)(cid:82)(cid:65)(cid:68)(cid:69)(cid:0)(cid:82)(cid:69)(cid:67)(cid:69)(cid:73)(cid:86)(cid:65)(cid:66)(cid:76)(cid:69)(cid:83)(cid:0)
into  a  wholly-owned  bankruptcy  remote  special  purpose  entity. 
Such receivables, which are recorded in the Consolidated Balance 
Sheet,  totaled  $510.5  million  and  $571.3  million  at  January  31, 
2008  and  2007,  respectively.  As  collections  reduce  accounts 
receivable  balances  included  in  the  pool,  the  Company  may 
transfer interests in new receivables to bring the amount available 
to be borrowed up to the maximum. The Company pays interest 
on  advances  under  the  Receivables  Securitization  Program  at 
designated commercial paper rates plus an agreed-upon margin. 
The Company plans to renew this program in December 2008. 

(cid:53)(cid:78)(cid:68)(cid:69)(cid:82)(cid:0) (cid:84)(cid:72)(cid:69)(cid:0) (cid:84)(cid:69)(cid:82)(cid:77)(cid:83)(cid:0) (cid:79)(cid:70)(cid:0) (cid:84)(cid:72)(cid:69)(cid:0) (cid:35)(cid:79)(cid:77)(cid:80)(cid:65)(cid:78)(cid:89)(cid:7)(cid:83)(cid:0) (cid:45)(cid:85)(cid:76)(cid:84)(cid:73)(cid:13)(cid:67)(cid:85)(cid:82)(cid:82)(cid:69)(cid:78)(cid:67)(cid:89)(cid:0) (cid:50)(cid:69)(cid:86)(cid:79)(cid:76)(cid:86)(cid:73)(cid:78)(cid:71)(cid:0)
Credit Facility with a syndicate of banks, amended in March 2007, 
the Company is able to borrow funds in major foreign currencies 
(cid:85)(cid:80)(cid:0) (cid:84)(cid:79)(cid:0) (cid:65)(cid:0) (cid:77)(cid:65)(cid:88)(cid:73)(cid:77)(cid:85)(cid:77)(cid:0) (cid:79)(cid:70)(cid:0) (cid:4)(cid:18)(cid:21)(cid:16)(cid:14)(cid:16)(cid:0) (cid:77)(cid:73)(cid:76)(cid:76)(cid:73)(cid:79)(cid:78)(cid:14)(cid:0) (cid:53)(cid:78)(cid:68)(cid:69)(cid:82)(cid:0) (cid:84)(cid:72)(cid:73)(cid:83)(cid:0) (cid:70)(cid:65)(cid:67)(cid:73)(cid:76)(cid:73)(cid:84)(cid:89)(cid:12)(cid:0) (cid:87)(cid:72)(cid:73)(cid:67)(cid:72)(cid:0)
expires in March 2012, the Company has provided either a pledge 
of  stock  or  a  guarantee  of  certain  of  its  significant  subsidiaries. 
The Company pays interest on advances under this facility at the 
applicable  LIBOR  rate  plus  a  margin  based  on  the  Company’s 
credit ratings. The Company can fix the interest rate for periods of 
seven to 180 days under various interest rate options. 

In  addition  to  the  facilities  described  above,  the  Company 
has  additional  lines  of  credit  and  overdraft  facilities  totaling 
approximately  $768.5  million  at  January  31,  2008  to  support  its 
worldwide  operations.  Most  of  these  facilities  are  provided  on 
an  unsecured,  short-term  basis  and  are  reviewed  periodically 
for renewal. 

The  total  capacity  of  the  aforementioned  credit  facilities  was 
approximately $1.3 billion, of which $18.3 million was outstanding 
at  January  31,  2008.  The  Company’s  credit  agreements  contain 
limitations  on  the  amounts  of  annual  dividends  and  repurchases 
of  common  stock.  Additionally,  the  credit  agreements  require 
compliance  with  certain  warranties  and  covenants.  The  financial 
ratio covenants contained within the credit agreements include a 
debt to capitalization ratio, an interest to EBITDA (earnings before 
interest, taxes, deprecation and amortization) ratio and a tangible 
net worth requirement. At January 31, 2008, the Company was in 
compliance  with  all  such  covenants.  The  ability  to  draw  funds 
under these credit facilities is dependent upon sufficient collateral 
(in  the  case  of  the  Receivables  Securitization  Program)  and 
meeting the aforementioned financial covenants, which may limit 
the Company’s ability to draw the full amount of these facilities. 

In  addition,  during  the  years  ended  January  31,  2007  and 
2006, the Company incurred $8.6 million and $9.6 million, respec-
tively,  of  external  consulting  costs  related  to  the  restructuring 
program. These consulting costs are included in “selling, general 
and  administrative  expenses”  in  the  Consolidated  Statement 
of Operations. 

Summarized below is the activity related to accruals for restruc-
turing  charges  under  the  restructuring  programs  discussed 
above, recorded during the years ended January 31, 2008, 2007 
and 2006:

Employee
termination 
benefits

Facility 
costs

Total

(In thousands)

Balance as of January 31, 2005  . . . .
Charges to operations  . . . . . . . . . . .
Cash payments . . . . . . . . . . . . . . . . .
Other(2) . . . . . . . . . . . . . . . . . . . . . . .

Balance as of January 31, 2006  . . . .
Charges to operations  . . . . . . . . . . .
Cash payments . . . . . . . . . . . . . . . . .
Other(2) . . . . . . . . . . . . . . . . . . . . . . .

Balance as of January 31, 2007  . . . .
Charges to operations  . . . . . . . . . . .
Impairment of assets leased 
under capital lease and 
fixed asset write-offs(1) . . . . . . . . .
Cash payments . . . . . . . . . . . . . . . . .
Other(2) . . . . . . . . . . . . . . . . . . . . . . .

$         — $        — $          —
30,946
(19,178)
715

18,888
(16,980)
151

12,058
(2,198)
564

2,059
19,989
(17,508)
(518)

4,022
7,920

10,424
3,775
(8,825)
1,821

7,195
8,229

12,483
23,764
(26,333)
1,303

11,217
16,149

—
(10,932)
1,104

(5,767)
(3,142)
1,098

(5,767)
(14,074)
2,202

Balance as of January 31, 2008 . . .

$  2,114

$   7,613

$   9,727

(1)   The  impairment  of  assets  leased  under  capital  lease  and  fixed  asset  write-offs 
were  related  to  the  Moers  logistics  facility  and  were  recorded  against  the 
respective asset accounts. 

(2) “Other” primarily relates to the effect of fluctuations in foreign currencies.

NOTE 9—REVOLVING CREDIT LOANS

January 31,

2008

2007

(In thousands)

Receivables Securitization Program, interest 

rate of 5.16% at January 31, 2008, 
expiring December 2008  . . . . . . . . . . . . . . . . . . $

— $

—

Multi-currency Revolving Credit Facility, interest 

rate of 3.77% at January 31, 2008, 
expiring March 2012 . . . . . . . . . . . . . . . . . . . . . .

Other revolving credit facilities, average interest 

rate of 5.33% at January 31, 2008, 
expiring on various dates throughout 
fiscal 2009  . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—

—

18,315

77,195

$ 18,315

$77,195

46

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

continued

As  of  January  31,  2008,  the  maximum  amount  that  could  be 
borrowed under these facilities, in consideration of the availability 
of  collateral  and  the  financial  covenants,  was  approximately 
$753.1 million. 

At January 31, 2008, the Company had issued standby letters 
of credit of $26.2 million. These letters of credit typically act as a 
guarantee of payment to certain third parties in accordance with 
specified  terms  and  conditions.  The  issuance  of  these  letters  of 
credit reduces the Company’s available capacity under the above 
mentioned facilities by the same amount. 

NOTE 10—LONG-TERM DEBT

January 31,

2008

2007

(In thousands)

Convertible senior debentures, interest 
at 2.75% payable semi-annually, 
due December 2026 . . . . . . . . . . . . . . . . . . .

$350,000

$350,000

Capital leases . . . . . . . . . . . . . . . . . . . . . . . . . .

14,882

15,980

remainder, if any, of the Company’s conversion obligation. Holders 
have the option to require the Company to repurchase the deben-
tures  in  cash  on  any  of  the  fifth,  tenth  or  fifteenth  anniversary 
dates  from  the  issue  date  at  100%  of  the  principal  amount  plus 
accrued  interest  to  the  repurchase  date.  The  debentures  are 
redeemable in whole or in part for cash at the Company’s option 
at  any  time  on  or  after  December  20,  2011.  Additionally,  the 
debentures are senior,  unsecured obligations and rank equally  in 
right of payment with all of the Company’s other unsecured and 
unsubordinated  indebtedness.  The  debentures  are  effectively 
subordinated to all of the Company’s existing and future secured 
debt  and  are  structurally  subordinated  to  the  indebtedness  and 
other liabilities of the Company’s subsidiaries. The proceeds from 
the  offering  were  used  to  pay  off  short-term  debt  and  for  other 
general corporate purposes. 

Future  payments  of  long-term  debt  and  capital  leases  at 
January 31, 2008 and for succeeding fiscal years, which assumes 
the $350 million convertible senior debentures will be redeemed 
on the first redemption date of December 20, 2011, are as follows 
(in thousands):

364,882

365,980

Fiscal year:

Less—current maturities . . . . . . . . . . . . . . . . . .

(1,243)

(2,376)

$363,639

$363,604

In  December  2006,  the  Company  issued  $350.0  million  of 
convertible  senior  debentures  due  2026.  The  debentures  bear 
interest  at  2.75%  per  year.  The  Company  pays  interest  on  the 
debentures on June 15 and December 15 of each year, beginning 
on  June  15,  2007.  In  addition,  beginning  with  the  period  com-
mencing on December 20, 2011 and ending on June 15, 2012 and 
for each six-month period thereafter, the Company will pay con-
tingent  interest  on  the  interest  payment  date  for  the  applicable 
interest period if the market price of the debentures equals speci-
fied levels. The convertible senior debentures are convertible into 
the  Company’s  common  stock  and  cash,  anytime  after  June  15, 
2026, or i) if the market price of the common stock, as defined, 
exceeds 135% of the conversion price per share of common stock 
or  ii)  if  the  Company  calls  the  debentures  for  redemption  or  iii) 
upon  occurrence  of  certain  corporate  transactions,  as  defined. 
Holders  have  the  right  to  convert  the  debentures  into  cash  and 
shares  of  the  Company’s  common  stock,  if  any,  at  a  conversion 
rate  of  18.4310  shares  per  $1,000  principal  amount  of  deben-
tures,  equivalent  to  a  conversion  price  of  approximately  $54.26 
(cid:80)(cid:69)(cid:82)(cid:0)(cid:83)(cid:72)(cid:65)(cid:82)(cid:69)(cid:14)(cid:0)(cid:53)(cid:80)(cid:79)(cid:78)(cid:0)(cid:67)(cid:79)(cid:78)(cid:86)(cid:69)(cid:82)(cid:83)(cid:73)(cid:79)(cid:78)(cid:12)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:35)(cid:79)(cid:77)(cid:80)(cid:65)(cid:78)(cid:89)(cid:0)(cid:87)(cid:73)(cid:76)(cid:76)(cid:0)(cid:68)(cid:69)(cid:76)(cid:73)(cid:86)(cid:69)(cid:82)(cid:0)(cid:67)(cid:65)(cid:83)(cid:72)(cid:0)(cid:69)(cid:81)(cid:85)(cid:65)(cid:76)(cid:0)
to the lesser of the aggregate principal amount of the debentures 
to  be  converted  and  the  Company’s  total  conversion  obligation 
and  shares  of  the  Company’s  common  stock  in  respect  of  the 

2009  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2010. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thereafter  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

2,253
2,065
2,065
352,065
2,065
8,335

Total payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less amounts representing interest on capital leases . . . . . .

368,848
(3,966)

Total principal payments . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$364,882

NOTE 11—INCOME TAXES

The Company accounts for income taxes in accordance with SFAS 
No. 109, “Accounting for Income Taxes.” The Company evaluates 
the realizability of its deferred tax assets on a quarterly basis. This 
evaluation  considers  all  positive  and  negative  evidence  and  fac-
tors, such as the scheduled reversal of temporary differences, his-
torical  and  projected  future  taxable  income,  and  prudent  and 
feasible tax planning strategies. 

As a result of the Company’s quarterly deferred tax asset eval-
uation  during  the  fourth  quarter  of  fiscal  2008,  the  Company 
determined that a valuation allowance against deferred tax assets 
related to Brazil was no longer necessary. Therefore, the Company 
reversed  the  $7.5  million  deferred  tax  asset  valuation  allowance 
associated  with  Brazil,  which  was  recorded  as  an  income  tax 
benefit during the fourth quarter of fiscal 2008. 

Tech Data Corporation

47

(cid:52)(cid:72)(cid:69)(cid:0)(cid:82)(cid:69)(cid:67)(cid:79)(cid:78)(cid:67)(cid:73)(cid:76)(cid:73)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:79)(cid:70)(cid:0)(cid:73)(cid:78)(cid:67)(cid:79)(cid:77)(cid:69)(cid:0)(cid:84)(cid:65)(cid:88)(cid:0)(cid:67)(cid:79)(cid:77)(cid:80)(cid:85)(cid:84)(cid:69)(cid:68)(cid:0)(cid:65)(cid:84)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:53)(cid:14)(cid:51)(cid:14)(cid:0)(cid:70)(cid:69)(cid:68)(cid:69)(cid:82)(cid:65)(cid:76)(cid:0)
statutory  tax  rates  to  income  tax  expense  for  continuing 
operations is as follows: 

Year ended January 31,

2008

2007

2006

35.0%

35.0%

35.0%

(cid:53)(cid:14)(cid:51)(cid:14)(cid:0)(cid:83)(cid:84)(cid:65)(cid:84)(cid:85)(cid:84)(cid:79)(cid:82)(cid:89)(cid:0)(cid:82)(cid:65)(cid:84)(cid:69)  . . . . . . . . . . . . . .
State income taxes, net of 

federal benefit  . . . . . . . . . . . . . . .
Changes in valuation allowance . . . .
Tax on foreign earnings different 
(cid:84)(cid:72)(cid:65)(cid:78)(cid:0)(cid:53)(cid:14)(cid:51)(cid:14)(cid:0)(cid:82)(cid:65)(cid:84)(cid:69) . . . . . . . . . . . . . . . .
(cid:0)
Nondeductible goodwill . . . . . . . . . .
Nondeductible interest . . . . . . . . . . .
Reserves established for foreign 

0.8
18.3

(19.3)
—
1.9

income tax contingencies . . . . . . .

2.1

Reversal of previously accrued 

income taxes . . . . . . . . . . . . . . . . .
Other—net . . . . . . . . . . . . . . . . . . . .

(0.7)
0.3

(1.0)
(100.7)

47.5
(104.7)
(5.3)

—

6.7
0.3

0.8
60.7

(14.0)
—
—

—

—
0.1

38.4% (122.2)%

82.6%

Included in the valuation allowance for fiscal 2008 is an income 
tax benefit of $7.5 million for the reversal of a valuation allowance 
on  deferred  tax  assets  related  to  Brazil,  which  was  recorded  in 
prior fiscal years. Included in the valuation allowance in fiscal 2007 
and 2006 are non-cash charges of $8.4 million and $56.0 million, 
respectively,  to  increase  the  valuation  allowance  on  deferred  tax 
assets  related  to  specific  jurisdictions  in  Europe  which  were 
recorded  in  prior  fiscal  years.  The  reversal  of  previously  accrued 
income taxes in fiscal 2007 represents the reversal of $3.0 million 
in accrued taxes due to the favorable resolution of various income 
tax examinations. 

The  components  of  pretax  income  (loss)  from  continuing 

operations are as follows: 

Year ended January 31,

2008

2007

2006

(cid:53)(cid:78)(cid:73)(cid:84)(cid:69)(cid:68)(cid:0)(cid:51)(cid:84)(cid:65)(cid:84)(cid:69)(cid:83) . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . .

$127,502
42,371

(In thousands)
$ 108,369
(153,788)

$122,125
9,855

$169,873

$  (45,419)

$131,980

In addition, as a result of the Company’s quarterly deferred tax 
asset  evaluation,  during  the  second  quarters  of  fiscal  2007  and 
2006, non-cash charges of $8.4 million and $56.0 million, respec-
tively, were recorded to increase the valuation allowance  against 
deferred  tax  assets  related  to  specific  jurisdictions  in  Europe. 
While the Company believes its restructuring efforts will improve 
the  operating  performance  within  the  European  operations,  the 
Company determined these charges to be appropriate due to the 
cumulative losses expected to be realized through both the prior 
and  current  fiscal  years,  after  considering  the  effect  of  prudent 
and  feasible  tax  planning  strategies.  To  the  extent  that  the 
Company generates consistent taxable income within those oper-
ations requiring a valuation allowance, the Company may reduce 
the valuation allowance, thereby reducing the income tax expense 
and increasing net income in the same period. The underlying net 
operating loss carryforwards remain available to offset future tax-
able  income  in  the  specific  jurisdictions  requiring  a  valuation 
allowance, subject to applicable tax laws and regulations. 

Significant  components  of  the  provision  for  income  taxes  for 

continuing operations are as follows:

Year ended January 31, 

2008

2007

2006

(In thousands)

Current:

Federal . . . . . . . . . . . . . . . . . . . . . $31,857
State . . . . . . . . . . . . . . . . . . . . . . .
1,633
Foreign . . . . . . . . . . . . . . . . . . . . .
25,136

$35,458
990
14,764

$ 62,032
3,931
16,584

  Total current . . . . . . . . . . . . . . .

58,626

51,212

82,547

Deferred:

Federal . . . . . . . . . . . . . . . . . . . . .
State . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . .

12,314
192
(5,969)

Total deferred . . . . . . . . . . . . . .

6,537

800
(302)
3,798

4,296

(22,747)
(2,371)
51,584

26,466

$65,163

$55,508

$109,013

 
48

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

continued

Significant  components  of  the  Company’s  deferred  tax 

liabilities and assets are as follows: 

January 31, 

2008

2007

(In thousands)

Deferred tax liabilities:

Depreciation and amortization . . . . . . . . . .
Capitalized marketing program costs . . . . .
Convertible debenture interest . . . . . . . . . .
Accruals currently deductible  . . . . . . . . . . .
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 23,802
3,990
6,685
10,252
1,376

$ 25,922
2,074
687
9,591
6,521

  Total deferred tax liabilities . . . . . . . . . . .

46,105

44,795

Deferred tax assets:

Accrued liabilities  . . . . . . . . . . . . . . . . . . . .
Loss carryforwards . . . . . . . . . . . . . . . . . . .
Amortizable goodwill . . . . . . . . . . . . . . . . .
Depreciation and amortization . . . . . . . . . .
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . .

50,886
151,775
28,410
5,017
5,716

59,284
143,896
29,655
9,946
2,333

Less: valuation allowance . . . . . . . . . . . . . . . .

241,804
(182,464)

245,114
(187,027)

  Total deferred tax assets . . . . . . . . . . . . .

59,340

58,087

  Net deferred tax asset . . . . . . . . . . . . .

$ 13,235

$ 13,292

The net change in the deferred income tax valuation allowance 
was a decrease of $4.6 million in fiscal 2008 and an increase of 
$50.5 million in fiscal 2007. The valuation allowance at January 31, 
2008  and  2007  primarily  relates  to  foreign  net  operating  loss 
carryforwards  of  $776.9  million  and  $549.8  million,  respectively. 
The majority of the net operating losses have an indefinite carry-
forward period with the remaining portion expiring in fiscal years 
2011 through 2023. The Company evaluates a variety of factors in 
determining  the  realizability  of  deferred  tax  assets,  including  the 
scheduled  reversal  of  temporary  differences,  projected  future 
taxable income, and prudent and feasible tax planning strategies. 
The activity in deferred tax liabilities during fiscal 2008 includes 
an adjustment of $5.6 million to reduce the deferred tax liability 
on accumulated other comprehensive income (loss) which lapsed 
due to statute expirations. This adjustment did not impact deferred 
income tax expense for fiscal 2008. 

At  January  31,  2008,  there  are  no  consolidated  cumulative 
undistributed  earnings  of  foreign  subsidiaries.  It  is  not  currently 
(cid:80)(cid:82)(cid:65)(cid:67)(cid:84)(cid:73)(cid:67)(cid:65)(cid:76)(cid:0) (cid:84)(cid:79)(cid:0) (cid:69)(cid:83)(cid:84)(cid:73)(cid:77)(cid:65)(cid:84)(cid:69)(cid:0) (cid:84)(cid:72)(cid:69)(cid:0) (cid:65)(cid:77)(cid:79)(cid:85)(cid:78)(cid:84)(cid:0) (cid:79)(cid:70)(cid:0) (cid:85)(cid:78)(cid:82)(cid:69)(cid:67)(cid:79)(cid:71)(cid:78)(cid:73)(cid:90)(cid:69)(cid:68)(cid:0) (cid:68)(cid:69)(cid:70)(cid:69)(cid:82)(cid:82)(cid:69)(cid:68)(cid:0) (cid:53)(cid:14)(cid:51)(cid:14)(cid:0)
income  tax  that  might  be  payable  if  any  earnings  were  to  be 
distributed by individual foreign subsidiaries. 

Effective February 1, 2007, the Company adopted the provisions 
(cid:79)(cid:70)(cid:0) (cid:38)(cid:33)(cid:51)(cid:34)(cid:0) (cid:41)(cid:78)(cid:84)(cid:69)(cid:82)(cid:80)(cid:82)(cid:69)(cid:84)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0) (cid:46)(cid:79)(cid:14)(cid:0) (cid:20)(cid:24)(cid:12)(cid:0) (cid:104)(cid:33)(cid:67)(cid:67)(cid:79)(cid:85)(cid:78)(cid:84)(cid:73)(cid:78)(cid:71)(cid:0) (cid:70)(cid:79)(cid:82)(cid:0) (cid:53)(cid:78)(cid:67)(cid:69)(cid:82)(cid:84)(cid:65)(cid:73)(cid:78)(cid:84)(cid:89)(cid:0) (cid:73)(cid:78)(cid:0)
Income Taxes—an interpretation of SFAS No. 109” (“FIN No. 48”). 
FIN No. 48 clarifies the accounting for uncertainty in income taxes 
recognized  in  an  enterprise’s  financial  statements  in  accordance 
with SFAS No. 109, “Accounting for Income Taxes,” and prescribes 
a recognition threshold and measurement attribute for the finan-
cial  statement  recognition  and  measurement  of  a  tax  position 
taken  or  expected  to  be  taken  in  a  tax  return.  FIN  No.  48  also 
provides  guidance  on  derecognition,  classification,  interest  and 
penalties, accounting in interim periods, disclosure and transition. 
The  adoption  of  FIN  No.  48  resulted  in  the  reduction  of  the 
Company’s consolidated beginning retained earnings of $1.1 mil-
lion.  As  of  the  adoption  date,  the  Company  had  gross  unrecog-
nized  tax  benefits  of  $10.5  million,  $6.9  million  of  which,  if 
recognized, would affect the effective tax rate. 

(cid:53)(cid:78)(cid:82)(cid:69)(cid:67)(cid:79)(cid:71)(cid:78)(cid:73)(cid:90)(cid:69)(cid:68)(cid:0)(cid:84)(cid:65)(cid:88)(cid:0)(cid:66)(cid:69)(cid:78)(cid:69)(cid:70)(cid:73)(cid:84)(cid:83)(cid:0)(cid:84)(cid:79)(cid:84)(cid:65)(cid:76)(cid:73)(cid:78)(cid:71)(cid:0)(cid:4)(cid:25)(cid:14)(cid:24)(cid:0)(cid:77)(cid:73)(cid:76)(cid:76)(cid:73)(cid:79)(cid:78)(cid:0)(cid:80)(cid:82)(cid:73)(cid:77)(cid:65)(cid:82)(cid:73)(cid:76)(cid:89)(cid:0)(cid:82)(cid:69)(cid:76)(cid:65)(cid:84)(cid:69)(cid:68)(cid:0)
to  the  foreign  taxation  of  certain  transactions  have  a  reason-
able  possibility  of  significantly  decreasing  within  the  12  months 
following January 31, 2008. 

Consistent with prior periods, the Company recognizes interest 
and penalties related to unrecognized tax benefits in the provision 
for income taxes. The Company has accrued interest of $2.7 mil-
lion  and  $1.6  million  at  January  31,  2008  and  February  1,  2007, 
respectively,  of  which  $1.9  million  and  $1.0  million,  respectively, 
all of which would impact the effective tax rate if reversed. 

The  provision  for  income  taxes  for  the  fiscal  year  ended 
January  31,  2008  includes  interest  expense  of  $1.0  million  on 
unrecognized  income  tax  benefits  for  current  and  prior  years. 
The change in the balance of accrued interest includes the current 
year end accrual, an interest benefit resulting from the expiration 
of  statutes  of  limitation,  and  the  translation  adjustments  on 
foreign currencies. 

A  reconciliation  of  the  beginning  and  ending  balances  of  the 
total  amount  of  gross  unrecognized  tax  benefits,  excluding 
accrued  interest  and  penalties,  for  the  year  ended  January  31, 
2008 is as follows (in thousands): 

Gross unrecognized tax benefits at February 1, 2007. . . . . . . . $10,481
5,137
Increases in tax positions for prior years . . . . . . . . . . . . . . . . . .
3,132
Increases in tax positions for current year . . . . . . . . . . . . . . . . .
(359)
Expiration of statutes of limitation . . . . . . . . . . . . . . . . . . . . . .
1,190
Changes due to translation of foreign currencies . . . . . . . . . . .

Gross unrecognized tax benefits at January 31, 2008 . . . . $19,581

 
 
 
 
Tech Data Corporation

49

At January 31, 2008, the amount of unrecognized tax benefits 
that,  if  recognized,  would  impact  the  effective  tax  rate  was 
$12.0 million. 

The Company conducts business globally and, as a result, one 
(cid:79)(cid:82)(cid:0)(cid:77)(cid:79)(cid:82)(cid:69)(cid:0)(cid:79)(cid:70)(cid:0)(cid:73)(cid:84)(cid:83)(cid:0)(cid:83)(cid:85)(cid:66)(cid:83)(cid:73)(cid:68)(cid:73)(cid:65)(cid:82)(cid:73)(cid:69)(cid:83)(cid:0)(cid:70)(cid:73)(cid:76)(cid:69)(cid:83)(cid:0)(cid:73)(cid:78)(cid:67)(cid:79)(cid:77)(cid:69)(cid:0)(cid:84)(cid:65)(cid:88)(cid:0)(cid:82)(cid:69)(cid:84)(cid:85)(cid:82)(cid:78)(cid:83)(cid:0)(cid:73)(cid:78)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:53)(cid:14)(cid:51)(cid:14)(cid:0)(cid:70)(cid:69)(cid:68)-
eral, various state, local and foreign tax jurisdictions. In the normal 
course of business, the Company is subject to examination by tax-
ing authorities. The Company is no longer subject to examinations 
by  the  Internal  Revenue  Service  for  years  before  fiscal  2005. 
Income  tax  returns  of  various  foreign  jurisdictions  for  2003  and 
forward  are  currently  under  taxing  authority  examination  or 
remain  subject  to  audit,  with  the  exception  of  a  jurisdiction  in 
Europe currently under examination for 2002.

NOTE 12—EMPLOYEE BENEFIT PLANS

Overview of Equity Incentive Plans 
At January 31, 2008, the Company had awards outstanding from 
four  equity-based  compensation  plans,  one  of  which  is  currently 
active and which authorizes the issuance of 9.5 million shares, of 
which  approximately  3.3  million  shares  are  available  for  future 
(cid:71)(cid:82)(cid:65)(cid:78)(cid:84)(cid:14)(cid:0) (cid:53)(cid:78)(cid:68)(cid:69)(cid:82)(cid:0) (cid:84)(cid:72)(cid:69)(cid:0) (cid:80)(cid:76)(cid:65)(cid:78)(cid:83)(cid:12)(cid:0) (cid:84)(cid:72)(cid:69)(cid:0) (cid:35)(cid:79)(cid:77)(cid:80)(cid:65)(cid:78)(cid:89)(cid:0) (cid:73)(cid:83)(cid:0) (cid:65)(cid:85)(cid:84)(cid:72)(cid:79)(cid:82)(cid:73)(cid:90)(cid:69)(cid:68)(cid:0) (cid:84)(cid:79)(cid:0) (cid:65)(cid:87)(cid:65)(cid:82)(cid:68)(cid:0)
officers, employees, and non-employee members of the Board of 
Directors  restricted  stock,  options  to  purchase  common  stock, 
MV Stock-settled SARs, MVOs and performance awards that are 
dependent  upon  achievement  of  specified  performance  goals. 
Equity-based compensation awards have a maximum term of 10 
years,  unless  a  shorter  period  is  specified  by  the  Compensation 
Committee  of  the  Board  of  Directors  or  is  required  under  local 
law.  Awards  under  the  plans  are  priced  as  determined  by  the 
Compensation Committee and under the terms of the Company’s 
active equity-based compensation plan are required to be priced 
at,  or  above,  the  fair  market  value  of  the  Company’s  common 
stock  on  the  date  of  grant.  Awards  generally  vest  between  one 
and  four  years  from  the  date  of  grant.  As  discussed  in 
Note 1—Business and Summary of Significant Accounting Policies, 
the Company accounts for its equity incentive plans in accordance 
with  SFAS  No.  123R,  which  was  effective  for  the  Company 
beginning February 1, 2006. 

Restricted Stock 
During  fiscal  2007,  the  Company’s  Board  of  Directors  made  the 
decision  to  begin  issuing  restricted  stock.  The  restricted  stock 
(cid:65)(cid:87)(cid:65)(cid:82)(cid:68)(cid:83)(cid:0)(cid:65)(cid:82)(cid:69)(cid:0)(cid:80)(cid:82)(cid:73)(cid:77)(cid:65)(cid:82)(cid:73)(cid:76)(cid:89)(cid:0)(cid:73)(cid:78)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:70)(cid:79)(cid:82)(cid:77)(cid:0)(cid:79)(cid:70)(cid:0)(cid:82)(cid:69)(cid:83)(cid:84)(cid:82)(cid:73)(cid:67)(cid:84)(cid:69)(cid:68)(cid:0)(cid:83)(cid:84)(cid:79)(cid:67)(cid:75)(cid:0)(cid:85)(cid:78)(cid:73)(cid:84)(cid:83)(cid:0)(cid:8)(cid:104)(cid:50)(cid:51)(cid:53)(cid:83)(cid:118)(cid:9)(cid:0)
and  typically  vest  annually  over  four  years,  unless  mandated  by 
country law, with the exception of the grant of 60,000 shares of 
(cid:50)(cid:51)(cid:53)(cid:83)(cid:0)(cid:84)(cid:79)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:35)(cid:79)(cid:77)(cid:80)(cid:65)(cid:78)(cid:89)(cid:7)(cid:83)(cid:0)(cid:35)(cid:72)(cid:73)(cid:69)(cid:70)(cid:0)(cid:37)(cid:88)(cid:69)(cid:67)(cid:85)(cid:84)(cid:73)(cid:86)(cid:69)(cid:0)(cid:47)(cid:70)(cid:70)(cid:73)(cid:67)(cid:69)(cid:82)(cid:0)(cid:87)(cid:72)(cid:73)(cid:67)(cid:72)(cid:0)(cid:86)(cid:69)(cid:83)(cid:84)(cid:83)(cid:0)(cid:81)(cid:85)(cid:65)(cid:82)-
terly  over  three  years  at  a  grant  price  of  $36.66  per  share. 
In  December  2006,  the  Company’s  Board  of  Directors  approved 
(cid:84)(cid:72)(cid:69)(cid:0)(cid:65)(cid:87)(cid:65)(cid:82)(cid:68)(cid:0)(cid:79)(cid:70)(cid:0)(cid:18)(cid:20)(cid:19)(cid:12)(cid:16)(cid:16)(cid:16)(cid:0)(cid:83)(cid:72)(cid:65)(cid:82)(cid:69)(cid:83)(cid:0)(cid:79)(cid:70)(cid:0)(cid:50)(cid:51)(cid:53)(cid:83)(cid:0)(cid:87)(cid:72)(cid:73)(cid:67)(cid:72)(cid:0)(cid:86)(cid:69)(cid:83)(cid:84)(cid:0)(cid:79)(cid:86)(cid:69)(cid:82)(cid:0)(cid:84)(cid:72)(cid:82)(cid:69)(cid:69)(cid:0)(cid:70)(cid:73)(cid:83)(cid:67)(cid:65)(cid:76)(cid:0)
years and have a grant price of $41.99. All of the restricted stock 
awards have a fair market value equal to the closing price of the 
Company’s  common  stock  on  the  date  of  grant.  Compensation 
expense of $4.9 million and $0.5 million was recorded for these 
instruments during fiscal 2008 and 2007, respectively. 

During the fiscal year ended January 31, 2007, the Company’s 
Board  of  Directors  approved  the  issuance  of  performance-based 
(cid:69)(cid:81)(cid:85)(cid:73)(cid:84)(cid:89)(cid:0) (cid:73)(cid:78)(cid:67)(cid:69)(cid:78)(cid:84)(cid:73)(cid:86)(cid:69)(cid:0) (cid:65)(cid:87)(cid:65)(cid:82)(cid:68)(cid:83)(cid:0) (cid:73)(cid:78)(cid:0) (cid:84)(cid:72)(cid:69)(cid:0) (cid:70)(cid:79)(cid:82)(cid:77)(cid:0) (cid:79)(cid:70)(cid:0) (cid:50)(cid:51)(cid:53)(cid:83)(cid:14)(cid:0) (cid:52)(cid:72)(cid:69)(cid:0) (cid:80)(cid:69)(cid:82)(cid:70)(cid:79)(cid:82)(cid:77)(cid:65)(cid:78)(cid:67)(cid:69)(cid:13)
(cid:66)(cid:65)(cid:83)(cid:69)(cid:68)(cid:0) (cid:50)(cid:51)(cid:53)(cid:83)(cid:0) (cid:86)(cid:69)(cid:83)(cid:84)(cid:0) (cid:79)(cid:78)(cid:76)(cid:89)(cid:0) (cid:85)(cid:80)(cid:79)(cid:78)(cid:0) (cid:65)(cid:67)(cid:72)(cid:73)(cid:69)(cid:86)(cid:69)(cid:77)(cid:69)(cid:78)(cid:84)(cid:0) (cid:79)(cid:70)(cid:0) (cid:67)(cid:69)(cid:82)(cid:84)(cid:65)(cid:73)(cid:78)(cid:0) (cid:80)(cid:69)(cid:82)(cid:70)(cid:79)(cid:82)(cid:77)(cid:65)(cid:78)(cid:67)(cid:69)(cid:0)
measures based on cumulative earnings for defined periods ended 
January  31,  2008.  These  grants  range  from  165,000  shares  to 
495,000  shares  and  have  a  weighted  average  grant  price  of 
$35.08, using the closing price of the Company’s common stock 
on the date of each of the grants. No compensation expense was 
recorded for these instruments during fiscal 2008 or 2007 as the 
achievement  of  the  performance  targets  was  not  met  and  the 
instruments did not vest on January 31, 2008. 

A  summary  of  the  status  of  the  Company’s  restricted  stock 

activity for the fiscal year ended January 31, 2008 is as follows: 

Weighted 
average 
grant date 
fair value

Shares

Outstanding at January 31, 2007 . . . . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Vested  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Canceled  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

440,404
205,547
(21,583)
(48,341)

$38.59
35.74
37.03
37.98

Outstanding at January 31, 2008 . . . . . . . . . .

576,027

38.04

Performance-based restricted stock awards 
outstanding at January 31, 2008 . . . . . . . .

138,166

35.08

50

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

continued

The total fair value of restricted stock vested during the fiscal 
year  ended  January  31,  2008  is  $0.8  million.  As  of  January  31, 
2008,  the  unrecognized  stock-based  compensation  expense 
(cid:82)(cid:69)(cid:76)(cid:65)(cid:84)(cid:69)(cid:68)(cid:0) (cid:84)(cid:79)(cid:0) (cid:78)(cid:79)(cid:78)(cid:13)(cid:86)(cid:69)(cid:83)(cid:84)(cid:69)(cid:68)(cid:0) (cid:50)(cid:51)(cid:53)(cid:83)(cid:0) (cid:87)(cid:65)(cid:83)(cid:0) (cid:4)(cid:17)(cid:16)(cid:14)(cid:25)(cid:0) (cid:77)(cid:73)(cid:76)(cid:76)(cid:73)(cid:79)(cid:78)(cid:12)(cid:0) (cid:87)(cid:72)(cid:73)(cid:67)(cid:72)(cid:0) (cid:84)(cid:72)(cid:69)(cid:0)
Company expects to be recognized over the next four years (over 
a remaining weighted average period of one year). 

MV Stock-settled SARs, MVOs and Stock Options 
MV Stock-settled SARs and MVOs are similar to traditional stock 
options, except these instruments contain a predetermined cap on 
the maximum earnings potential a recipient can expect to receive 
upon exercise. In addition, upon exercise, holders of an MV Stock-
settled  SAR  will  only  receive  shares  with  a  value  equal  to  the 
spread (the difference between the current market price per share 
of  the  Company’s  common  stock  subject  to  the  predetermined 
cap and the grant price). The grant price of the MV Stock-settled 
SARs  and  MVOs  is  determined  using  the  last  sale  price  of  the 
Company’s common stock as quoted on the NASDAQ on the date 
of  grant  (or  such  higher  price  as  may  be  required  by  applicable 
laws  and  regulations  of  specific  foreign  jurisdictions).  The  other 

terms of the awards (i.e., vesting schedule, contractual term, etc.) 
are  not  materially  different  from  the  terms  of  traditional  stock 
options previously granted by the Company. 

During  the  fiscal  years  ended  January  31,  2008,  2007  and 
2006, the Company’s Board of Directors approved the issuance of 
0.2 million, 1.5 million and 1.6 million, respectively, of long-term 
incentive awards in the form of MV Stock-settled SARs and MVOs 
pursuant  to  the  Amended  and  Restated  2000  Equity  Incentive 
Plan  of  Tech  Data  Corporation,  as  amended.  Compensation 
expense  of  $5.3  and  $7.6  million  was  recorded  for  these  instru-
ments during fiscal 2008 and 2007, respectively. Prior to the adop-
tion  of  SFAS  No.  123R,  the  Company  accounted  for  MV 
Stock-settled  SARs  and  MVOs  as  variable  awards.  In  accordance 
with  APB  No.  25,  these  variable  awards  were  remeasured  on  a 
quarterly  basis  and  changes  in  value  were  recorded  in  the 
Company’s  Consolidated  Statement  of  Operations  as  compensa-
tion  expense.  Compensation  expense  of  approximately  $0.1  mil-
lion  was  recorded  for  these  instruments  during  the  year  ended 
January 31, 2006. 

A  summary  of  the  status  of  the  Company’s  MV  Stock-settled  SARs,  MVOs  and  stock  options  for  the  fiscal  year  ended  January  31, 

2008 is as follows: 

Weighted 
average 
exercise price

Weighted 
average remaining 
contractual term 
(in years)

Aggregate 
intrinsic value 
(in thousands)

Shares

Outstanding at January 31, 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exercised  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Canceled  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6,770,221
205,000
(546,264)
(465,358)

Outstanding at January 31, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5,963,599

Vested and expected to vest at January 31, 2008 . . . . . . . . . . . . . . . . . . . . . .

5,915,575

Exercisable at January 31, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,306,985

$36.14
35.44
26.88
39.14

36.73

36.73

36.71

5.5

5.4

4.4

$9,600

$9,600

$9,600

The aggregate intrinsic value in the table above represents the difference between the closing price of the Company’s common stock 
on  January  31,  2008  and  the  grant  price  for  all  “in-the-money”  options  at  January  31,  2008.  The  intrinsic  value  of  the  equity-based 
awards changes based on the fair market value of the Company’s common stock. The intrinsic value of the MV Stock-settled SARs, MVO 
and stock option awards exercised during the fiscal year ended January 31, 2008 was $6.6 million. As of January 31, 2008, the Company 
expects $8.5 million of total unrecognized compensation cost related to MV Stock-settled SARs, MVOs and stock options to be recog-
nized over the next four fiscal years (over a weighted average period of one year). The total fair value of MV Stock-settled SARs, MVOs 
and stock options vested during the fiscal year ended January 31, 2008 was $8.3 million. 

Tech Data Corporation

51

The Company has elected to use the Hull-White Lattice (bino-
mial)  and  Black-Scholes  option-pricing  models  to  determine  the 
fair  value  of  MV  Stock-settled  SARs  and  MVO  awards  granted 
during  fiscal  2008,  2007  and  2006.  The  Company  used  the 
Black-Scholes  option-pricing  model  for  awards  granted  prior  to 
fiscal 2006. Both the Hull-White Lattice and Black-Scholes option-
pricing models incorporate various assumptions including expected 
volatility, expected life and risk-free interest rates, while the Hull-
White Lattice model also incorporates a suboptimal exercise factor 
(“SEF”)  assumption.  The  Company  calculates  expected  volatility 
using an equal blend of the historical volatility of the Company’s 
common stock over the most recent period equal to the contrac-
tual  term  of  the  award  and  the  implied  volatility  using  traded 
options  with  a  variety  of  remaining  maturities.  The  expected  life 
for  the  Hull-White  component  of  the  valuation  is  equal  to  the 
contractual term of the award and the Black-Scholes component 

is based on historical experience. The risk-free rate corresponds to 
the  ten-year  Treasury  rate  on  the  date  of  the  award  as  the  con-
tractual term of the award is generally 10 years. The SEF takes into 
consideration early exercise behavior or patterns based on stock-
price  appreciation.  The  SEF  is  computed  by  analyzing  historical 
exercises  and  stock  prices  on  the  exercise  date  as  a  multiple  of 
the  original  award  price.  Fair  value  calculations  are  subject 
to  change  based  upon  the  assumptions  applied  within  the 
applicable models. 

The  weighted  average  estimated  fair  value  of  the  MV  Stock-
settled SARs and MVOs  granted during the years ended  January 
31,  2008,  2007  and  2006  was  $7.00,  $7.19  and  $7.70,  respec-
tively, based on a two-step valuation utilizing both the Hull-White 
Lattice  (binomial)  and  Black-Scholes  option-pricing  models  using 
the following weighted average assumptions: 

Year ended January 31, 2008

Hull-White Lattice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Black-Scholes  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Year ended January 31, 2007

Hull-White Lattice. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Black-Scholes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Year ended January 31, 2006

Hull-White Lattice. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Black-Scholes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Expected option 
term (years)

Expected 
volatility

Risk-free 
interest rate

Expected 
dividend 
yield

Suboptimal 
exercise 
factor

10
4

10
4

10
4

42%
42%

42%
42%

41%
41%

4.74%
4.55%

4.87%
4.74%

4.65%
3.76%

0%
0%

0%
0%

0%
0%

1.19
—

1.20
—

1.24
—

A summary of the status of the Company’s stock-based equity incentives outstanding representing MV Stock-settled SARs, MVOs and 

stock options is as follows: 

Range of exercise prices

$16.50–$24.69  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
24.76 – 36.38  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
36.39 – 37.04  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
37.06 – 37.06  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
37.07 – 40.69  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
41.08 – 41.08  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
41.13 – 51.38  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Outstanding

Weighted 
average 
remaining 
contractual 
life (years)

3.7
4.7
8.2
7.0
1.6
6.0
3.9

5.5

Exercisable

Weighted 
average
exercise 
price

$21.68
31.84
36.94
37.06
39.76
41.08
43.40

Number
exercisable
at 1/31/08

553,282
639,348
282,537
463,170
488,260
882,189
998,199

36.73

4,306,985

Weighted 
average 
exercise 
price

$21.68
30.49
36.94
37.06
39.82
41.08
43.41

36.71

Number 
outstanding 
at 1/31/08

553,282
889,029
1,151,219
968,068
515,752
882,730
1,003,519

5,963,599

52

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

continued

The Company’s policy is to utilize shares of its treasury stock, 
to  the  extent  available,  for  the  exercise  of  awards.  See  further 
discussion  of  the  Company’s  share  repurchase  program  in 
Note 13—Shareholders’ Equity below.

Employee Stock Purchase Plan 
(cid:53)(cid:78)(cid:68)(cid:69)(cid:82)(cid:0) (cid:84)(cid:72)(cid:69)(cid:0) (cid:17)(cid:25)(cid:25)(cid:21)(cid:0) (cid:37)(cid:77)(cid:80)(cid:76)(cid:79)(cid:89)(cid:69)(cid:69)(cid:0) (cid:51)(cid:84)(cid:79)(cid:67)(cid:75)(cid:0) (cid:48)(cid:85)(cid:82)(cid:67)(cid:72)(cid:65)(cid:83)(cid:69)(cid:0) (cid:48)(cid:76)(cid:65)(cid:78)(cid:0) (cid:8)(cid:84)(cid:72)(cid:69)(cid:0) (cid:104)(cid:37)(cid:51)(cid:48)(cid:48)(cid:118)(cid:9)(cid:0)
approved in June 1995, the Company is authorized to issue up to 
1,000,000  shares  of  common  stock  to  eligible  employees  in  the 
(cid:35)(cid:79)(cid:77)(cid:80)(cid:65)(cid:78)(cid:89)(cid:7)(cid:83)(cid:0) (cid:53)(cid:14)(cid:51)(cid:14)(cid:0) (cid:65)(cid:78)(cid:68)(cid:0) (cid:35)(cid:65)(cid:78)(cid:65)(cid:68)(cid:73)(cid:65)(cid:78)(cid:0) (cid:83)(cid:85)(cid:66)(cid:83)(cid:73)(cid:68)(cid:73)(cid:65)(cid:82)(cid:73)(cid:69)(cid:83)(cid:14)(cid:0) (cid:53)(cid:78)(cid:68)(cid:69)(cid:82)(cid:0) (cid:84)(cid:72)(cid:69)(cid:0) (cid:84)(cid:69)(cid:82)(cid:77)(cid:83)(cid:0) (cid:79)(cid:70)(cid:0)
the ESPP, employees can choose to have a fixed dollar amount or 
percentage  deducted  from  their  bi-weekly  compensation  to  pur-
chase  the  Company’s  common  stock  and/or  elect  to  purchase 
shares once per calendar quarter. The purchase price of the stock 
is  85%  of  the  market  value  on  the  exercise  date  and  employees 
are  limited  to  a  maximum  purchase  of  $25,000  in  fair  market 
value each calendar year. From the inception of the ESPP through 
January  31,  2008,  the  Company  has  issued  414,631  shares  of 
common stock to the ESPP. All shares purchased under the ESPP 
must be held for a period of one year. 

Retirement Savings Plan 
The Company sponsors the Tech Data Corporation 401(k) Savings 
Plan  (“the  401(k)  Savings  Plan”)  for  its  employees.  At  the 
Company’s discretion, participant deferrals are matched monthly, 
in the form of company stock, in an amount equal to 50% of the 
first  6%  of  participant  deferrals  and  participants  are  fully  vested 
following four years of qualified service. Effective January 1, 2008, 
the  Company’s  401(k)  Savings  Plan  employee  match  will  be  in 
cash. At January 31, 2008 and 2007, the number of shares of Tech 
Data  common  stock  held  by  the  Company’s  401(k)  Savings  Plan 
totaled 280,000 and 270,000 shares, respectively. Aggregate con-
tributions made by the Company to the 401(k) Savings Plan were 
$2.2  million,  $2.2  million  and  $2.3  million  for  fiscal  2008,  fiscal 
2007 and fiscal 2006, respectively. 

NOTE 13—SHAREHOLDERS’ EQUITY

In September 2007, the Company’s Board of Directors authorized 
a  share  repurchase  program  of  up  to  $100.0  million  of 
the  Company’s  common  stock.  As  of  January  31,  2008,  the 
Company’s  share  repurchase  program  authorized  in  September 
2007 was complete. During fiscal 2008, the Company repurchased 
2,698,654  shares  comprised  of  2,698,126  shares  purchased  in 
connection  with  the  Company’s  share  repurchase  program  and 
528 shares purchased outside of the stock repurchase program, at 
an average of $37.06 per share, for a total cost, including expenses, 
of $100.0 million. 

In fiscal 2006, the Company’s Board of Directors authorized a 
share  repurchase  program  of  up  to  $200.0  million  of  the 
Company’s common stock. As of January 31, 2007, the Company’s 
share repurchase program authorized in fiscal 2006 was complete. 
During  fiscal  2007,  the  Company  repurchased  2,222,720  shares 
comprised of 2,220,132 shares purchased in conjunction with the 
Company’s share repurchase program and 2,588 shares purchased 
outside of the stock repurchase program, at an average of $36.03 
per  share,  for  a  total  cost,  including  expenses,  of  $80.1  million. 
During  fiscal  2006,  the  Company  repurchased  3,443,131  shares 
comprised  of  3,260,576  shares  purchased  in  conjunction  with 
the  Company’s  share  repurchase  program  and  182,555  shares 
purchased outside of the stock repurchase program, at an average 
of  $36.89  per  share,  for  a  total  cost,  including  expenses,  of 
approximately $127.0 million. 

The  Company’s  share  repurchases  were  made  on  the  open 
market  through  block  trades  or  otherwise  and  the  number  of 
shares purchased and the timing of the purchases were based on 
working  capital  requirements,  general  business  conditions  and 
other  factors,  including  alternative  investment  opportunities. 
Shares  repurchased  by  the  Company  are  held  in  treasury  for 
general  corporate  purposes,  including  issuances  under  equity 
incentive and employee benefit plans. 

NOTE 14—COMMITMENTS AND CONTINGENCIES

Operating Leases 
The  Company  leases  logistics  centers,  office  facilities  and  certain 
equipment under noncancelable operating leases, the majority of 
which  expire  at  various  dates  through  fiscal  2016.  Fair  value 
renewal  and  purchase  options  and  escalation  clauses  exist  for  a 
substantial portion of the operating leases included above. Rental 
expense related to continuing operations for all operating leases, 
including  minimum  commitments  under  IT  outsourcing  agree-
ments,  totaled  $60.6  million,  $59.3  million,  and  $59.0  million  in 
fiscal  years  2008,  2007  and  2006,  respectively.  Future  minimum 
lease payments at January 31, 2008 under all such leases, includ-
ing minimum commitments under IT outsourcing agreements and 
the  minimum  lease  payments  accrued  in  the  Company’s  restruc-
turing  programs  (see  Note  8—Restructuring  Programs)  for 
succeeding fiscal years are as follows (in thousands): 

Fiscal year:

2009  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 65,663
54,293
2010. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
46,138
2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
27,323
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
25,498
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
50,810
Thereafter  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 269,725

Tech Data Corporation

53

Synthetic Lease Facility 
The Company has a Synthetic Lease facility with a group of finan-
cial institutions under which the Company leases certain logistics 
centers and office facilities from a third-party lessor. The Synthetic 
Lease  expires  in  fiscal  year  2009  and  the  Company  intends  to 
renew  the  lease  for  an  additional  five  years.  At  any  time  during 
the  lease  term,  the  Company  may,  at  its  option,  purchase  up  to 
four of the seven properties, at an amount equal to each proper-
ty’s cost. If the Company elects to remarket the properties, it has 
guaranteed  the  lessor  a  percentage  of  the  cost  of  each  of  the 
properties,  in  an  aggregate  amount  of  approximately  $118.4 
million  (the  “residual  value”).  The  Company  pays  interest  on  the 
Synthetic  Lease  at  LIBOR  plus  an  agreed-upon  margin. 
The  Synthetic  Lease  contains  covenants  that  must  be  complied 
with,  similar  to  the  covenants  described  in  certain  of  the  credit 
facilities discussed in Note 9—Revolving Credit Loans. The amount 
funded under the Synthetic Lease (approximately $133.2 million at 
January  31,  2008)  is  treated  as  debt  under  the  definition  of  the 
covenants required under both the Synthetic Lease and the credit 
facilities. As of January 31, 2008 the Company was in compliance 
with all such covenants. 

In  January  2007,  the  Company  sold  approximately  6  acres  of 
excess land located in Miami, Florida. The sale was executed pur-
suant to the “excess sale” provisions of the Synthetic Lease agree-
ment  and  resulted  in  a  gain  of  $3.6  million  recorded  during  the 
quarter ended January 31, 2007. This gain is included within “sell-
ing,  general  and  administrative  expenses”  in  the  Company’s 
Consolidated Statement of Operations. 

The sum of future minimum lease payments under the Synthetic 
Lease  at  January  31,  2008  was  approximately  $3.8  million. 
Properties  leased  under  the  Synthetic  Lease  are  located  in 
(cid:35)(cid:76)(cid:69)(cid:65)(cid:82)(cid:87)(cid:65)(cid:84)(cid:69)(cid:82)(cid:0) (cid:65)(cid:78)(cid:68)(cid:0) (cid:45)(cid:73)(cid:65)(cid:77)(cid:73)(cid:12)(cid:0) (cid:38)(cid:76)(cid:79)(cid:82)(cid:73)(cid:68)(cid:65)(cid:27)(cid:0) (cid:38)(cid:79)(cid:82)(cid:84)(cid:0) (cid:55)(cid:79)(cid:82)(cid:84)(cid:72)(cid:12)(cid:0) (cid:52)(cid:69)(cid:88)(cid:65)(cid:83)(cid:27)(cid:0) (cid:38)(cid:79)(cid:78)(cid:84)(cid:65)(cid:78)(cid:65)(cid:12)(cid:0)
(cid:35)(cid:65)(cid:76)(cid:73)(cid:70)(cid:79)(cid:82)(cid:78)(cid:73)(cid:65)(cid:27)(cid:0)(cid:51)(cid:85)(cid:87)(cid:65)(cid:78)(cid:69)(cid:69)(cid:12)(cid:0)(cid:39)(cid:69)(cid:79)(cid:82)(cid:71)(cid:73)(cid:65)(cid:27)(cid:0)(cid:51)(cid:87)(cid:69)(cid:68)(cid:69)(cid:83)(cid:66)(cid:79)(cid:82)(cid:79)(cid:12)(cid:0)(cid:46)(cid:69)(cid:87)(cid:0)(cid:42)(cid:69)(cid:82)(cid:83)(cid:69)(cid:89)(cid:27)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:51)(cid:79)(cid:85)(cid:84)(cid:72)(cid:0)
Bend, Indiana. 

The  Synthetic  Lease  has  been  accounted  for  as  an  operating 
lease. FASB Interpretation (“FIN”) No. 46 requires the Company to 
evaluate  whether  an  entity  with  which  it  is  involved  meets  the 
criteria of a variable interest entity (“VIE”) and, if so, whether the 
Company is required to consolidate that entity. The Company has 
determined that the third-party lessor of its synthetic lease facility 
does not meet the criteria of a VIE and, therefore, is not subject to 
the consolidation provisions of FIN No. 46. 

Contingencies 
Prior to fiscal 2004, one of the Company’s European subsidiaries 
was  audited  in  relation  to  various  value-added  tax  (“VAT”) 
matters. As a result of those audits, the subsidiary received notices 

of  assessment  that  allege  the  subsidiary  did  not  properly  collect 
and remit VAT. It is management’s opinion, based upon the opin-
ion of outside legal counsel, that the Company has valid defenses 
related  to  a  substantial  portion  of  these  assessments.  Although 
the  Company  is  vigorously  pursuing  administrative  and  judicial 
action to challenge the assessments, no assurance can be given as 
to the ultimate outcome. The resolution of such assessments could 
be material to the Company’s operating results for any particular 
period, depending upon the level of income for such period. 

The Company is subject to various other legal proceedings and 
claims arising in the ordinary course of business. The Company’s 
management  does  not  expect  that  the  outcome  in  any  of  these 
other  legal  proceedings,  individually  or  collectively,  will  have  a 
material  adverse  effect  on  the  Company’s  financial  condition, 
results of operations, or cash flows. 

Guarantees 
As is customary in the IT industry, to encourage certain customers 
to purchase products from Tech Data, the Company has arrange-
ments  with  certain  finance  companies  that  provide  inventory 
financing  facilities  to  the  Company’s  customers.  In  conjunction 
with  certain  of  these  arrangements,  the  Company  would  be 
required to purchase certain inventory in the event the inventory is 
repossessed from the customers by the finance companies. 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. 
Repurchases  of  inventory  by  the  Company  under  these  arrange-
ments have been insignificant to date. The Company believes that, 
based  on  historical  experience,  the  likelihood  of  a  material  loss 
pursuant to these inventory repurchase obligations is remote. 

The  Company  provides  additional  financial  guarantees  to 
finance companies on behalf of certain customers. The majority of 
these  guarantees  are  for  an  indefinite  period  of  time,  where  the 
Company  would  be  required  to  perform  if  the  customer  is  in 
default  with  the  finance  company.  The  Company  reviews  the 
underlying credit for these guarantees on at least an annual basis. 
As  of  January  31,  2008  and  January  31,  2007,  the  aggregate 
amount  of  guarantees  under  these  arrangements  totaled  $19.4 
million and $11.5 million, respectively, of which $14.7 million and 
$7.0 million, respectively, was outstanding. The Company believes 
that,  based  on  historical  experience,  the  likelihood  of  a  material 
loss pursuant to the above guarantees is remote. 

54

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

continued

Additionally,  in  connection  with  the  sale  of  the  Training 
Business  discussed  in  Note  3—Discontinued  Operations,  the 
Company continues to negotiate the assignment of several of the 
related facility lease obligations with the lessors of such properties. 
To  the  extent  the  lessors  are  unwilling  to  agree  to  a  direct  lease 
arrangement with the purchaser, the Company will remain liable 
in the event of default by the purchaser of the Training Business. 
The majority of these lease obligations expire at various dates over 
the  next  four  years  and  would  require  the  Company  to  make  all 
required  payments  under  the  lease  agreements  in  the  event  of 
default by the purchaser. The maximum potential amount of future 
payments (undiscounted) that the Company could be required to 
make  under  the  guarantees  is  approximately  $7.2  million  as  of 
January 31, 2008. The Company believes that the likelihood of a 
material loss pursuant to these guarantees is remote. 

The  Company  also  provides  residual  value  guarantees  related 
to the Synthetic Lease which have been recorded at the estimated 
fair value of the residual guarantees.

NOTE 15—SEGMENT INFORMATION

Tech Data operates predominately in a single industry segment as 
a  distributor  of  IT  products,  logistics  management,  and  other 
value-added  services.  While  the  Company  operates  primarily  in 
one industry, because of its global presence, the Company is man-
aged  by  its  geographic  segments.  The  Company’s  geographic 
segments  include  the  Americas  (including  North  America  and 
Latin  America)  and  Europe.  The  Company  assesses  performance 
of and makes decisions on how to allocate resources to its operat-
ing segments based on multiple factors including current and pro-
jected operating income and market opportunities. The Company 
does not consider stock-based compensation expense recognized 
under  SFAS  No.  123R  in  assessing  the  performance  of  its 
operating  segments,  and  therefore  the  Company  is  reporting 
stock-based  compensation  expense  as  a  separate  amount. 
The  accounting  policies  of  the  segments  are  the  same  as  those 
described  in  Note  1—Business  and  Summary  of  Significant 
Accounting Policies. 

Financial information by geographic segment is as follows: 

Year ended January 31,

2008

2007

2006

(In thousands)

Net sales to unaffiliated 

customers
Americas . . . . . . . . . . . . . .
Europe  . . . . . . . . . . . . . . .

$ 11,003,893
12,419,185

$ 9,965,074
11,475,371

$ 9,464,667
11,018,184

Total . . . . . . . . . . . . . . . . .

$ 23,423,078

$ 21,440,445

$ 20,482,851

Operating income (loss)

Americas . . . . . . . . . . . . . .
Europe (1)(2) . . . . . . . . . . . . .
 Stock-based compensation 
expense recognized 
under SFAS No. 123R  . .

$

170,685
27,956

$

160,720
(156,930)

$

154,839
8,456

(10,287)

(7,973)

—

Total . . . . . . . . . . . . . . . . .

$

188,354

$

(4,183) $

163,295

Depreciation and 
amortization
Americas . . . . . . . . . . . . . .
Europe  . . . . . . . . . . . . . . .

Total . . . . . . . . . . . . . . . . .

Capital expenditures

Americas . . . . . . . . . . . . . .
Europe  . . . . . . . . . . . . . . .

Total . . . . . . . . . . . . . . . . .

Identifiable assets 

$

$

$

$

18,153
35,728

53,881

22,618
15,741

38,359

$

$

$

$

17,344
35,790

$

16,290
35,506

53,134

$

51,796

15,112
28,617

$

24,454
36,298

43,729

$

60,752

Americas . . . . . . . . . . . . . .
Europe  . . . . . . . . . . . . . . .

$ 1,716,065
3,504,870

$ 1,601,962
3,101,902

$ 1,436,508
2,968,126

Total . . . . . . . . . . . . . . . . .

$ 5,220,935

$ 4,703,864

$ 4,404,634

Goodwill

Americas . . . . . . . . . . . . . .
Europe  . . . . . . . . . . . . . . .

Total . . . . . . . . . . . . . . . . .

$

$

2,966
—

2,966

$

$

$

2,966
—

2,966
131,361

2,966

$

134,327

(1)   For the year ended January 31, 2008, the amounts shown above include $16.1 
million of restructuring costs related to the exit of the Company’s logistics center 
in Germany and changes in estimates of previously recorded restructuring accru-
als for the 2005 restructuring program and $14.5 million of loss on disposal of 
subsidiaries related to the closure of operations in the UAE and the sale of the 
Company’s  Israel  operations.  For  the  years  ended  January  31,  2007  and  2006, 
the amounts shown above include $23.8 million and $30.9 million, respectively, 
of  restructuring  charges  related  to  the  European  restructuring  program  and 
$8.6  million  and  $9.6  million,  respectively,  in  external  consulting  costs  associ-
ated with the restructuring program (see also Note 8—Restructuring Program). 
(2)   For the year ended January 31, 2007, the amount shown above includes a non-
cash  charge  of  $136.1  million  for  the  goodwill  impairment  in  Europe  (see  also 
Note 6—Goodwill and Intangible Assets).

 
Tech Data Corporation

55

NOTE 16—INTERIM FINANCIAL INFORMATION (UNAUDITED)
Interim financial information for fiscal years 2008 and 2007 is as follows. 

Quarter ended

April 30,

July 31,

October 31,

January 31,

(In thousands, except per share amounts)

Fiscal year 2008
Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 5,402,077

$ 5,613,308

$ 5,923,814

$ 6,483,879

Gross profit  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 255,248

$ 274,311

$ 283,746

$ 321,103

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Income per share—basic  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Income per share—diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

$

$

9,902

0.18

0.18

$

$

$

7,242

0.13

0.13

$

$

$

40,949

0.74

0.73

$

$

$

50,176

0.92

0.92

Fiscal year 2007
Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 4,944,126

$ 4,943,281

$ 5,431,347

$ 6,121,691

Gross profit  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 237,139

$ 225,610

$ 247,560

$ 296,462

Income (loss) from continuing operations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from discontinued operations, net of tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Income (loss) per share—basic:

Continuing operations  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net income (loss) per share. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Income (loss) per share—diluted:

Continuing operations  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net income (loss) per share. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

$

$

$

$

$

8,945
3,946

$ (155,529)
—

12,891

$ (155,529)

0.16
0.07

0.23

0.16
0.07

0.23

$

$

$

$

(2.81)
—  

(2.81)

(2.81)
—

(2.81)

$

$

$

$

$

$

9,598
—

9,598

0.18
—  

0.18

0.18
—

0.18

$

$

$

$

$

$

36,059
—

36,059

0.66
—  

0.66

0.66
—

0.66

Net income for the quarter ended April 30, 2007 includes loss 
on disposal of subsidiaries of $8.8 million related to the closure of 
(cid:84)(cid:72)(cid:69)(cid:0) (cid:35)(cid:79)(cid:77)(cid:80)(cid:65)(cid:78)(cid:89)(cid:7)(cid:83)(cid:0) (cid:53)(cid:33)(cid:37)(cid:0) (cid:79)(cid:80)(cid:69)(cid:82)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:83)(cid:0) (cid:65)(cid:78)(cid:68)(cid:0) (cid:4)(cid:8)(cid:16)(cid:14)(cid:21)(cid:9)(cid:0) (cid:77)(cid:73)(cid:76)(cid:76)(cid:73)(cid:79)(cid:78)(cid:0) (cid:82)(cid:69)(cid:76)(cid:65)(cid:84)(cid:69)(cid:68)(cid:0) (cid:84)(cid:79)(cid:0)
changes  in  estimates  for  the  European  restructuring  program 
completed  in  the  third  quarter  of  fiscal  2007,  the  net  of  which 
decreased  diluted  earnings  per  share  by  $0.15  per  share  for  the 
quarter ended April 30, 2007 (see also Note 7—Loss on Disposal 
of Subsidiaries and Note 8—Restructuring Programs). 

Net  income  for  the  quarter  ended  July  31,  2007  includes  loss 
on disposal of subsidiaries of $4.3 million related to the closure of 
(cid:84)(cid:72)(cid:69)(cid:0)(cid:35)(cid:79)(cid:77)(cid:80)(cid:65)(cid:78)(cid:89)(cid:7)(cid:83)(cid:0)(cid:53)(cid:33)(cid:37)(cid:0)(cid:79)(cid:80)(cid:69)(cid:82)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:83)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:83)(cid:65)(cid:76)(cid:69)(cid:0)(cid:79)(cid:70)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:35)(cid:79)(cid:77)(cid:80)(cid:65)(cid:78)(cid:89)(cid:7)(cid:83)(cid:0)(cid:41)(cid:83)(cid:82)(cid:65)(cid:69)(cid:76)(cid:0)
operations  and  $16.6  million  related  to  the  exit  of  the  logistics 
center  in  Germany,  which  decreased  diluted  earnings  per  share 
by  $0.37  per  share  for  the  quarter  ended  July  31,  2007 
(see  also  Note  7—Loss  on  Disposal  of  Subsidiaries  and 
Note 8—Restructuring Programs). 

Net  income  for  the  quarter  ended  January  31,  2008  includes 
loss on disposal of subsidiaries of $1.4 million related to the clo-
(cid:83)(cid:85)(cid:82)(cid:69)(cid:0) (cid:79)(cid:70)(cid:0) (cid:84)(cid:72)(cid:69)(cid:0) (cid:35)(cid:79)(cid:77)(cid:80)(cid:65)(cid:78)(cid:89)(cid:7)(cid:83)(cid:0) (cid:53)(cid:33)(cid:37)(cid:0) (cid:79)(cid:80)(cid:69)(cid:82)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:83)(cid:0) (cid:87)(cid:72)(cid:73)(cid:67)(cid:72)(cid:0) (cid:68)(cid:69)(cid:67)(cid:82)(cid:69)(cid:65)(cid:83)(cid:69)(cid:68)(cid:0) (cid:68)(cid:73)(cid:76)(cid:85)(cid:84)(cid:69)(cid:68)(cid:0)
earnings  per  share  by  $0.04  per  share  for  the  quarter  ended 
January 31, 2008 (see also Note 7—Loss on Disposal of Subsidiaries 
and Note 11—Income Taxes). 

Net income for the quarter ended April 30, 2006 includes $6.5 
million of restructuring charges and $4.1 million of external con-
sulting costs, both related to the European restructuring program 
completed during the third quarter of fiscal 2007, which decreased 
diluted  earnings  per  share  from  continuing  operations  by 
$0.16  per  share  for  the  quarter  ended  April  30,  2006  (see  also 
Note 8—Restructuring Programs). 

56

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

continued

Net loss for the quarter ended July 31, 2006 includes a $136.1 
million goodwill impairment in Europe, $11.2 million of restructur-
ing  charges  and  $1.6  million  of  external  consulting  costs,  both 
related to the European restructuring program completed during 
the  third  quarter  of  fiscal  2007  and  an  $8.4  million  increase  in 
the  valuation  allowance  recorded  against  deferred  tax  assets 
related  to  specific  jurisdictions  in  Europe,  primarily  Germany,  the 
total of which decreased diluted earnings per share from continu-
ing operations by $2.82 per share for the quarter ended July 31, 
2006.  (see  also  Note  7—Loss  on  Disposal  of  Subsidiaries, 
Note 8—Restructuring Programs and Note 11—Income Taxes). 

Net income for the quarter ended October 31, 2006 includes 
$6.1 million of restructuring charges and $2.8 million of external 
consulting costs, both related to the European restructuring pro-
gram,  completed  during  the  third  quarter  of  fiscal  2007,  which 
decreased  diluted  earnings  per  share  from  continuing  operations 
by $0.15 per share for the quarter ended October 31, 2006 (see 
also Note 8—Restructuring Programs).

NOTE 17—SUBSEQUENT EVENT

In early March 2008, the Company entered into an agreement for 
the acquisition of certain assets of Scribona, AB, a publicly traded 
IT distribution company in the Nordic region of Europe, with oper-
ations in Sweden, Finland and Norway (“Scribona”). The purchase 
price for the assets is the net asset book value plus a premium for 
the  transferred  assets,  including  inventory,  intellectual  property, 
material  contracts,  office  equipment  and  certain  other  assets. 
The  premium  is  estimated  to  be  in  the  range  of  13.5  million  to 
16.5  million  euros  (approximately  $20.0  to  $25.0  million).  The 
transaction  is  subject  to  various  contingencies  including  labor 
(cid:67)(cid:79)(cid:78)(cid:83)(cid:85)(cid:76)(cid:84)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:83)(cid:12)(cid:0) (cid:67)(cid:76)(cid:69)(cid:65)(cid:82)(cid:65)(cid:78)(cid:67)(cid:69)(cid:0) (cid:70)(cid:82)(cid:79)(cid:77)(cid:0) (cid:84)(cid:72)(cid:69)(cid:0) (cid:37)(cid:85)(cid:82)(cid:79)(cid:80)(cid:69)(cid:65)(cid:78)(cid:0) (cid:53)(cid:78)(cid:73)(cid:79)(cid:78)(cid:0) (cid:65)(cid:78)(cid:68)(cid:0) (cid:51)(cid:67)(cid:82)(cid:73)(cid:66)(cid:79)(cid:78)(cid:65)(cid:0)
shareholder  approval  with  a  targeted  completion  in  the  second 
quarter of fiscal 2009. 

Tech Data Corporation

57

MARKET FOR THE REGISTRANT’S COMMON STOCK, RELATED SHAREHOLDER MATTERS
AND ISSUER PURCHASES OF EQUITY SECURITIES

  Our  common  stock  is  traded  on  the  NASDAQ  Stock  Market, 
Inc.  (“NASDAQ”)  under  the  symbol  “TECD.”  We  have  not  paid 
cash dividends since fiscal 1983 and the Board of Directors has no 
current  plans  to  institute  a  cash  dividend  payment  policy  in  the 
foreseeable  future.  The  table  below  presents  the  quarterly  high 
and  low  sale  prices  for  our  common  stock  as  reported  by  the 
NASDAQ.  As  of  February  29,  2008,  there  were  341  holders 
of  record.  We  believe  that  there  are  approximately  53,000 
beneficial holders. 

Fiscal year 2008
Fourth quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Third quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Second quarter  . . . . . . . . . . . . . . . . . . . . . . . . . . . .
First quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Fiscal year 2007
Fourth quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Third quarter  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Second quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
First quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Sales Price 

High

Low

$39.36
41.40
39.47
38.80

$31.36
33.01
34.90
34.86

High

Low

$43.74
40.00
38.75
42.65

$36.23
32.10
33.99
34.94

Equity Compensation and Stock Purchase Plan Information 
The  number  of  shares  issuable  upon  exercise  of  outstanding  share-based  equity  incentives  granted  to  employees  and  non-employee 
directors, as well as the number of shares remaining available for future issuance, under our equity compensation and stock purchase 
plans as of January 31, 2008 are summarized in the following table:  

Plan category

Number of shares 
to be issued upon 
exercise of outstanding 
share-based incentives

Weighted average 
exercise price 
of outstanding 
share-based 
incentives (1)

Number of shares 
remaining available 
for future issuance 
under equity
compensation plans

Equity compensation plans approved by shareholders for:

Employee equity compensation (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Employee stock purchase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-employee directors’ equity compensation . . . . . . . . . . . . . . . . . . . . . . . . .

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Employee equity compensation plan not approved by shareholders . . . . . . . . . . .

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5,684,087
—
77,000

5,761,087
778,539

6,539,626

$32.68
—
35.36

32.71
39.25

33.49

3,279,408
585,369
—

3,864,777
—

3,864,777

(1)   The calculation of the weighted average exercise price includes both outstanding performance share awards and restricted stock awards that do not have an exercise 
price.  Excluding  the  performance  share  awards  and  restricted  stock  awards,  the  weighted  average  exercise  price  of  outstanding  options  and  stock  appreciation  rights 
would be $36.35 for equity compensation plans approved by security holders, $39.25 for equity compensation plans not approved by shareholders and $36.73 for all 
equity compensation plans. 

(2)   The share-based incentives outstanding include 2,200,698 maximum value stock-settled stock appreciation rights (“MV Stock-settled SARs”) and maximum value stock 
options (“MVOs”), have an average exercise price of $36.79. Assuming the maximum cap of $20 is reached, the maximum number of shares that would be issued from 
the  exercise  of  MV  Stock-settled  SARs  and  MVOs  would  be  approximately  775,000  shares.  The  share-based  incentives  outstanding  include  a  total  of  43,016  shares 
outstanding for non-employee directors. 

58

MARKET FOR THE REGISTRANT’S COMMON STOCK, RELATED SHAREHOLDER MATTERS
AND ISSUER PURCHASES OF EQUITY SECURITIES 

continued

Unregistered Sales of Equity Securities 
None. 

Issuer Purchases of Equity Securities 
In September 2007, the Company’s Board of Directors authorized 
a  share  repurchase  program  of  up  to  $100.0  million  of  the 
Company’s common stock. As of January 31, 2008, the Company’s 
share  repurchase  program  authorized  in  September  2007  was 
complete. The share repurchases were made on the open market, 
through  block  trades  or  otherwise.  The  number  of  shares 

purchased  and  the  timing  of  the  purchases  were  based  on 
working  capital  requirements,  general  business  conditions  and 
other  factors,  including  alternative  investment  opportunities. 
Shares  repurchased  by  the  Company  are  held  in  treasury  for 
general  corporate  purposes,  including  issuances  under  equity 
incentive and benefit plans. 

The  following  table  presents  information  with  respect  to 
purchases  of  common  stock  by  the  Company  under  the  share 
repurchase program during the quarter ended January 31, 2008:

Period

Issuer Purchases of Equity Securities 

Total number 
of shares 
purchased

Average price 
paid per share

Total numbers of shares 
purchased as part of 
publicly announced 
plan or programs

Maximum dollar value 
of shares that may yet 
be purchased under 
the plan or programs

November 1–November 30, 2007  . . . . . . . . . . . . . . . . . . . . . .
December 1–December 31, 2007 . . . . . . . . . . . . . . . . . . . . . . .
January 1–January 31, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . .

156,400
1,812,771
721,255

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,690,426

$37.59
$37.48
$35.86

$37.06

156,400
1,812,771
721,255

2,690,426

$—

Tech Data Corporation

59

STOCK PERFORMANCE CHART

Comparison of Five-Year Cumulative Total Return
Assumes Initial Investment of $100 on February 1, 2003 (1) 
Tech Data Corporation, NASDAQ Stock Market (U.S.) Index and SIC Code 5045

s
r
a

l
l

o
D

220

200

180

160

140

120

100

80

60

40

20

0

2003

2004

2005

2006

2007

2008

Tech Data Corporation

NASDAQ Stock Market (U.S.) Index

SIC Code 5045—Computer and Peripheral Equipment and Software

(1) The comparisons are provided in response to Securities and Exchange Commission requirements and are not intended
     to forecast or be indicative of Tech Data’s future stock performance.

Tech Data Corporation

NASDAQ Stock Market (U.S.) Index

SIC Code 5045—Computer and Peripheral Equipment and Software

2003

2004

2005

2006

2007

2008

100

100

100

166

157

172

168

156

195

165

176

192

149

189

197

138

183

178

60

GAAP TO NON-GAAP RECONCILIATION (UNAUDITED)

Fiscal year ended January 31, 

2008

2007

2006

(In thousands, 
except per share amounts)

Operating Income
GAAP operating income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $188,354
Goodwill impairment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
Loss on disposal of subsidiaries (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
14,471
Restructuring charges (2)  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
16,149
Other costs (3)  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—

$

(4,183)
136,093
—
23,764
8,596

$163,295
—
—
30,946
9,632

Non-GAAP operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $218,974

$ 164,270

$203,873

Net Income
GAAP income (loss) from continuing operations  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $108,269
Discontinued operations, net of tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—

$(100,927)
3,946

$ 22,967
3,619

GAAP net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill impairment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss on disposal of subsidiaries (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restructuring charges (2)  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other costs (3)  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax effect on non-GAAP adjustment items  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax assets valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

108,269
—
14,471
16,149
—
(10)
—

(96,981)
136,093
—
23,764
8,596
(2,502)
8,352

26,586
—
—
30,946
9,632
(1,603)
56,039

Non-GAAP net income  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $138,879

$ 77,322

$121,600

Net Income per Diluted Share (4)
GAAP net income (loss) per share from continuing operations  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Discontinued operations, net of tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

GAAP net income (loss) per share  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill impairment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss on disposal of subsidiaries (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restructuring charges (2)  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other costs (3)  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax effect on non-GAAP adjustment items  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax assets valuation allowance   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Non-GAAP net income per diluted share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

1.96
—

1.96
—
.26
.29
—
—
—

2.51

$

$

(1.83)
 .07 

(1.76)
2.46
—
.43
.16
(.04)
.15

.39
 .06 

.45
—
—
.53
.16
(.03)
.96

$

1.40

$

2.08

Weighted average common shares outstanding

Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

54,904
55,287

55,129
55,289

57,749
58,414

(1) Loss on disposal of subsidiaries relates to the exit of the company’s operations in the UAE and Israel.
(2) Restructuring charges for the fiscal year ended January 31, 2008 include $18.1 million related to the closure of a European logistics center and $(2.0) million for changes 
in estimates related to the European restructuring program. Restructuring charges for the fiscal years ended January 31, 2007 and 2006 relate to the company’s European 
restructuring program completed in October 2006. 

(3) Other costs represent consulting costs related to the company’s European restructuring program completed in October 2006.
(4) Periods that incurred a GAAP net loss per share from continuing operations are calculated using basic weighted average common shares outstanding.

Tech Data Corporation

Corporate

Information

Board of Directors

Officers

Robert M. Dutkowsky
Chief Executive Officer

Jeffery P. Howells
Executive Vice President and 
Chief Financial Officer

Néstor Cano
President, Europe

Kenneth Lamneck
President, the Americas

Joseph A. Osbourn
Executive Vice President and 
Chief Information Officer

Charles V. Dannewitz
Senior Vice President, Tax and Treasurer

Joseph B. Trepani
Senior Vice President,
Corporate Controller

David R. Vetter
Senior Vice President, General Counsel 
and Secretary

Steven A. Raymund
Chairman of the Board of Directors
Tech Data Corporation

Charles E. Adair
Partner, 
Cordova Ventures and Kowaliga Capital, Inc.

Maximilian Ardelt
Managing Director, 
ConDigit Consult GmbH

Robert M. Dutkowsky
Chief Executive Officer, 
Tech Data Corporation

Jeffery P. Howells
Executive Vice President and 
Chief Financial Officer, 
Tech Data Corporation

Kathy Misunas
Founder and Principal,
Essential Ideas

Thomas I. Morgan
Retired Chief Executive Officer, 
Hughes Supply, Inc.

David M. Upton
Albert J. Weatherhead III
Professor of Business Administration,
Technology and Operations Management,
Harvard Business School

John Y. Williams
Managing Director,
Equity-South Advisors, LLC

Corporate Headquarters
Tech Data Corporation
5350 Tech Data Drive
Clearwater, FL 33760
727-539-7429
www.techdata.com

Independent Registered Certified 
Public Accounting Firm
Ernst & Young LLP, Tampa, FL

Ethics Reporting Hotline
866-TD ETHIC—866-833-8442

Stock Listing
The NASDAQ Stock Market, Inc. 
Ticker symbol: TECD

Transfer Agent
BNY Mellon Shareowner Services
480 Washington Boulevard
Jersey City, NJ 07310-1900 
866-357-3551
www.bnymellon.com/shareowner/isd

Annual Meeting of Shareholders
All interested parties are cordially invited to 
attend the Annual Meeting of Shareholders 
on Wednesday, June 4th, 2008 at 3:00 p.m. 
at the company headquarters, Raymund 
Center, 5350 Tech Data Drive, Clearwater, 
FL 33760.

Financial Reports
Financial reports, including Form 10-K and 
annual reports, can be accessed online at: 
www.techdata.com. You may also obtain 
a copy upon written request to:

Tech Data Corporation
Attention: Investor Relations
5350 Tech Data Drive
Clearwater, FL 33760

Investor Inquiries
Investor Relations
Phone: 800-292-7906
Fax: 727-538-5860
Email: ir@techdata.com

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Tech Data Corporation
5350 Tech Data Drive
Clearwater, Florida 33760

P: 727-539-7429
www.techdata.com