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TECH DATA CORP
FORM 10-K
(Annual Report)
Filed 02/05/14 for the Period Ending 01/31/13
Address 5350 TECH DATA DR
CLEARWATER, FL 33760
Telephone 7275397429
CIK 0000790703
Symbol TECD
SIC Code
5045 - Computers and Computer Peripheral Equipment and Software
Industry Computer Hardware
Sector Technology
Fiscal Year 01/31
http://www.edgar-online.com
© Copyright 2014, EDGAR Online, Inc. All Rights Reserved.
Distribution and use of this document restricted under EDGAR Online, Inc. Terms of Use.

Table of contents

  • Page 1
    ... DATA CORP FORM 10-K (Annual Report) Filed 02/05/14 for the Period Ending 01/31/13 Address Telephone CIK Symbol SIC Code Industry Sector Fiscal Year 5350 TECH DATA DR CLEARWATER, FL 33760 7275397429 0000790703 TECD 5045 - Computers and Computer Peripheral Equipment and Software Computer Hardware...

  • Page 2
    ... of incorporation or organization) 59-1578329 (I.R.S. Employer Identification Number) 5350 Tech Data Drive Clearwater, Florida (Address of principal executive offices) 33760 (Zip Code) (Registrant's Telephone Number, including Area Code): (727) 539-7429 Securities registered pursuant...

  • Page 3
    ...3 Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes 3 Aggregate market value of the voting stock held by non-affiliates was $1,848,709,289 based on the reported last sale price of common stock on July 31, 2012 which is the last business day...

  • Page 4
    ...ITEM 15. Directors, Executive Officers and Corporate Governance Executive Compensation Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Certain Relationships and Related Transactions, and Director Independence Principal Accountant Fees and Services 94 94...

  • Page 5
    ... EXPLANATORY NOTE Restatement of Consolidated Financial Statements The filing of this Annual Report on Form 10-K of Tech Data Corporation ("Tech Data," "we," "our," "us," or the "Company") for the fiscal year ended January 31, 2013 was delayed pending the completion of an internal investigation...

  • Page 6
    ... our customers. Products are generally shipped from regionally located logistics centers the same day the orders are received. In addition, execution is marked by a high level of service provided to our customers through our company's technical, sales and marketing support, electronic commerce tools...

  • Page 7
    ... 2012 and available cash to fund the acquisition. The acquired distribution companies are Specialist Distribution Group (SDG) Limited; ETC Metrologie SARL; Best'Ware France SA; ETC Africa SAS and SDG BV (collectively "SDG"). SDG is a leading distributor of value and broadline IT products in the UK...

  • Page 8
    ...data that can be stored electronically. We offer a variety of software products, such as virtualization software, security software (firewalls, intrusion, detection and encryption), desktop application software, operating system software, utilities software and software service and support. Mobility...

  • Page 9
    ...sales teams. Customers typically call our inside sales teams on dedicated telephone numbers or contact us through various electronic methods to place orders. If the product is in stock and the customer has available credit, customer orders are generally shipped the same day from the logistics center...

  • Page 10
    ... technology products, logistics management, and other value-added services. While we operate primarily in one industry, we manage our business in two geographic segments: the Americas (including North America and South America) and Europe. Over the past several years, we have entered new geographic...

  • Page 11
    ...and Exchange Commission ("SEC"). We provide a link to all SEC filings where current reports on Form 8-K and any amendments to previously filed reports may be accessed, free of charge. Information on Tech Data's website is not incorporated into this Form 10-K or the Company's other securities filings...

  • Page 12
    ...based primarily on product availability, credit terms and availability, price, effectiveness of information systems and e-commerce tools, speed of delivery, ability to tailor specific solutions to customer needs, quality and depth of product lines and training, service and support. Our customers are...

  • Page 13
    ...'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 vendors, proceeds from public offerings...

  • Page 14
    ... to receive products into the logistics centers because of government action or labor disputes at critical ports of entry may have an adverse effect on the Company's business. Risks Related to our Financial Statements and Internal Controls We face risks to our reputation and investor confidence...

  • Page 15
    ... financial condition. ITEM 1B. Not applicable. ITEM 2. Properties. Unresolved Staff Comments. Our executive offices are located in Clearwater, Florida. As of January 31, 2013, we operated a total of 28 logistics centers to provide our customers timely delivery of products. These logistics centers...

  • Page 16
    ... were to be made. In connection with the restatement of our prior financial statements, the SEC has requested information from the Company with respect to these matters. The Company is cooperating with the SEC's request for information. The Company is subject to various other legal proceedings and...

  • Page 17
    ... $51.98 Sales Price High Fiscal year 2012 Fourth quarter Third quarter Second quarter First quarter Stock Performance Chart The five-year stock performance chart below assumes an initial investment of $100 on February 1, 2008 and compares the cumulative total return for Tech Data, the NASDAQ Stock...

  • Page 18
    ...63 64 2010 119 92 110 2011 136 117 133 2012 151 125 128 2013 148 143 119 Tech Data Corporation NASDAQ Stock Market (U.S.) Index SIC Code 5045 - Computer and Peripheral Equipment and Software 100 100 100 Unregistered Sales of Equity Securities None. Issuer Purchases of Equity Securities During...

  • Page 19
    ... 2013, the Company completed the acquisition of Brightstar Corp.'s fifty percent ownership interest in Brightstar Europe Limited, which was a consolidated joint venture between Tech Data and Brightstar Corp (see further discussion in Note 6 of Notes to Consolidated Financial Statements). Working...

  • Page 20
    ... for transactions with the Company's product suppliers ("vendor accounting"), including the recognition of vendor incentives, product discounts/price variances, promotions and other vendor credits of $6.5 million. Operating income primarily reflects the impact of the adjustments noted above and the...

  • Page 21
    ...the restatement, see Note 2 and Note 16 of Notes to Consolidated Financial Statements and for a description of the subsequent event see Note 14 of Notes to Consolidated Financial Statements. Reconciliation to Unaudited Financial Information previously reported in Current Report on Form 8-K filed on...

  • Page 22

  • Page 23
    ... include value-added resellers ("VARs") direct marketers, retailers and corporate resellers who support the diverse technology needs of end users. We manage our business in two geographic segments: the Americas (including North America and South America) and Europe. Our financial objectives are...

  • Page 24
    ... 2012 and available cash to fund the acquisition. The acquired distribution companies are Specialist Distribution Group (SDG) Limited; ETC Metrologie SARL; Best'Ware France SA; ETC Africa SAS and SDG BV (collectively "SDG"). SDG is a leading distributor of value and broadline IT products in the UK...

  • Page 25
    ... prepared in accordance with accounting principles generally accepted in the United 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 ongoing...

  • Page 26
    ... Note 1 of Notes to Consolidated Financial Statements for the discussion on recent accounting pronouncements. Results of Operations We do not consider stock-based compensation expense in assessing the performance of our operating segments, and therefore the Company reports stock-based compensation...

  • Page 27
    ...619,938 42.7% 57.3% 100.0% 2013 vs. 2012 2012 vs. 2011 (5.6)% 1.9% 9.3% (1.1)% 3.1% 12.7% 7.7% 8.6% % of net sales 2013 % of net sales 2012 (As restated) % of net sales 2011 (As restated) Operating income ($ in thousands): Americas Europe Stock-based compensation expense Total $ $ 150,055...

  • Page 28
    ... our Consolidated Statement of Income as a percentage of net sales for each of the three most recent fiscal years: 2013 2012 2011 Net sales Cost of products sold Gross profit Operating expenses: Selling, general and administrative expenses Loss on disposal of subsidiaries Value added tax assessment...

  • Page 29
    ...properly collect and remit VAT. During the fourth quarter of fiscal 2014, an appellate court issued an opinion upholding the assessment for several of the assessed years. The opinion represents a subsequent event that occurred prior to the issuance of the fiscal 2013 financial statements in relation...

  • Page 30
    ...losses on investments in life insurance policies to fund the Company's nonqualified deferred compensation plan, interest income, discounts on the sale of accounts receivable and net foreign currency exchange (gains) losses on certain financing transactions and the related derivative instruments used...

  • Page 31
    ..., in fiscal 2013, 2012 and 2011. As discussed above, in September 2012, the Company completed the acquisition of Brightstar's fifty percent ownership interest in BEL. Net income attributable to noncontrolling interest represents Brightstar's portion of the operating results of BEL prior to the...

  • Page 32
    ... results reported in accordance with generally accepted accounting principles in the United States ("GAAP") and non-GAAP financial measures. Year ended January 31, 2013 2012 (In thousands, except per share amounts) (As restated) (As restated) 2011 GAAP to non-GAAP reconciliation of operating income...

  • Page 33
    ... Europe. Additionally, the life cycles of major products, as well as the impact of future acquisitions and divestitures, 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...

  • Page 34
    ... the continuing expansion and upgrading of our IT systems, office facilities and equipment for our logistics centers in both the Americas and Europe and $24.9 million of cash used for acquisitions in Europe. Net cash provided by financing activities of $80.3 million during fiscal 2013 is primarily...

  • Page 35
    ... under the Receivables Securitization Program at January 31, 2012. In addition to the facilities described above, we have various other committed and uncommitted lines of credit and overdraft facilities totaling approximately $579.2 million at January 31, 2013 to support our operations. Most of...

  • Page 36
    ... the Company's restatement discussed in Note 2 of Notes to Consolidated Financial Statements. The ability to draw funds under certain credit facilities is dependent upon sufficient collateral (in the case of the Receivables Securitization Program) and meeting the aforementioned financial covenants...

  • Page 37
    ...Clearwater and Miami, Florida; Fort Worth, Texas; Fontana, California; Suwanee, Georgia; Swedesboro, New Jersey; and South Bend, Indiana. The Synthetic Lease has been accounted for as an operating lease and rental payments are calculated at the applicable LIBOR rate plus a margin based on our credit...

  • Page 38
    ... is sold. Our foreign currency exposure relates to our transactions in Europe, Canada and Latin America, where the currency collected from customers can be different from the currency used to purchase the product. During fiscal 2013 and 2012, the underlying exposures are denominated primarily...

  • Page 39
    ... in the value of the underlying transactions being hedged. VaR as of January 31, 2013 (In thousands) 2012 Foreign currency exchange rate sensitive financial instruments Interest rate sensitive financial instruments (1) Combined portfolio (1) $ (2,205) $ (661) (2,322) 0 (2,322) $ (2,866) $ As...

  • Page 40
    ... Notes to Consolidated Financial Statements Financial Statement Schedule Schedule II-Valuation and Qualifying Accounts 126 38 39 40 41 42 43 44 All schedules and exhibits not included are not applicable, not required or would contain information which is shown in the financial statements or notes...

  • Page 41
    ... 2013, 2012 (restated) and 2011 (restated), when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein. As discussed in Note 2 to the consolidated financial statements, Tech Data Corporation has restated...

  • Page 42
    ... at January 31, 2013 and 2012) Retained earnings Accumulated other comprehensive income Equity attributable to shareholders of Tech Data Corporation Noncontrolling interest Total equity Total liabilities and equity (1) See Note 2 - Restatement of Consolidated Financial Statements. $ $ 340,564...

  • Page 43
    Table of Contents TECH DATA CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENT OF INCOME (In thousands, except per share amounts) Year ended January 31, 2013 2012 (As restated) (1) 2011 (As restated) (1) Net sales Cost of products sold Gross profit Operating expenses: Selling, general and ...

  • Page 44
    ...TECH DATA CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (In thousands) Year ended January 31, 2013 2012 (As restated) (1) 2011 (As restated... to shareholders of Tech Data Corporation (1) See Note 2 - Restatement of Consolidated Financial Statements. $ 183,040...

  • Page 45
    ..., including related tax benefit of $2,718 (as restated) (1) Stock-based compensation expense (as restated) (1) Total other comprehensive loss (as restated) (1) Declaration of return of capital to joint venture partner Net income (as restated) (1) Balance-January 31, 2012 (as restated) (1) Purchase...

  • Page 46
    Table of Contents TECH DATA CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS (In thousands) Year ended January 31, 2013 Cash flows from operating activities: Cash received from customers Cash paid to vendors and employees Interest paid, net Income taxes paid Net cash provided by ...

  • Page 47
    Net cash provided by operating activities $ 120,753 $ 524,906 $ 176,129 ( 1) See Note 2 - Restatement of Consolidated Financial Statements. The accompanying Notes to Consolidated Financial Statements are an integral part of these financial statements. 43

  • Page 48
    ...value-added services. Tech Data's customers include value-added resellers, direct marketers, retailers and corporate resellers who support the diverse technology needs of end users. The Company is managed in two geographic segments: the Americas (including North America and South America) and Europe...

  • Page 49
    ... also require that the Company continue to service, administer and collect the sold accounts receivable. At January 31, 2013 and 2012, the Company had a total of $284.7 million and $176.6 million , respectively, of accounts receivable sold to and held by financial institutions under these agreements...

  • Page 50
    ... coding and testing activities (including development of data conversion programs) directly associated with the internal-use computer software project. Prepaid maintenance fees associated with a software application are accounted for separately from the related software and amortized over the life...

  • Page 51
    ... financial institutions globally that are monitored on a regular basis by the Company for credit quality. The Company sells its products to a large base of value-added resellers, direct marketers, retailers and corporate resellers throughout North America, South America and Europe. The Company...

  • Page 52
    ... January 31, 2013, 2012 and 2011, respectively. Stock-Based Compensation The Company records all equity-based incentive grants to employees and non-employee members of the Company's Board of Directors in "selling, general and administrative expenses" in the Company's Consolidated Statement of Income...

  • Page 53
    ... income by component, the income statement line item to which the reclassification was made and if applicable, cross-referenced to related footnote disclosures. The accounting standard was effective for the Company beginning with the quarter ending April 30, 2013. As the requirements of this...

  • Page 54
    Table of Contents carryforward exists. The accounting standard is effective for the Company beginning with the quarter ending April 30, 2014 and is to be applied prospectively. The Company currently follows the guidance and this update will have no impact on its financial statement disclosures. 50

  • Page 55
    ... issued quarterly and audited annual financial statements to correct accounting improprieties involving vendor accounting within the Company's primary operating subsidiary in the UK. The Company further stated that financial statements as of and for the fiscal years ended 2011, 2012, and 2013 and...

  • Page 56
    ... other comprehensive income have been adjusted primarily to consider the net impacts of the adjustments discussed above. The following tables present the impact of the restatement on the Company's previously issued consolidated financial statements. 52

  • Page 57
    ... of vendor accounting errors in the Company's primary operating subsidiary in the UK and two other European subsidiaries of $17.9 million . (6) Accrued expenses and other liabilities includes adjustments primarily related to reducing the taxes payable by $11.9 million as a result of the restatement...

  • Page 58
    Table of Contents Consolidated Statement of Income Fiscal Year Ended January 31, 2012 As Previously Reported Adjustments (In thousands, except per share amounts) As Restated Net sales Cost of products sold Gross profit Operating expenses: Selling, general and administrative expenses Loss on ...

  • Page 59
    ... sales of vendor warranty services and certain fulfillment contracts on an agency basis as net fees of $740.6 million , consistent with fiscal year 2013. (2) Gross profit adjustments primarily reflect the impact of vendor accounting errors in the Company's primary operating subsidiary in the UK...

  • Page 60
    ...Statement of Comprehensive Income Fiscal Year Ended January 31, 2012 As Previously Reported Adjustments (In thousands) As Restated... income attributable to noncontrolling interest Comprehensive income attributable to shareholders of Tech Data Corporation $ 216,848 (76,664) 140,184 (8,917) $ ...

  • Page 61
    Table of Contents Consolidated Statement of Cash Flows Fiscal Year Ended January 31, 2012 As Previously Reported Adjustments As Restated (In thousands) Cash flows from operating activities: Cash received from customers Cash paid to suppliers and employees Interest paid Income taxes paid Net cash ...

  • Page 62
    57

  • Page 63
    ... discount on Senior Notes and convertible senior debentures Deferred income taxes Excess tax benefit from stock-based compensation Changes in operating assets and liabilities, net of acquisitions: Accounts receivable Inventories Prepaid expenses and other assets Accounts payable Accrued expenses and...

  • Page 64
    ... net income attributable to shareholders of Tech Data by the weighted average number of shares outstanding during the reported period. Diluted EPS reflects the potential dilution related to equity-based incentives (further discussed in Note 10 - Employee Benefit Plans) using the if-converted and...

  • Page 65
    ...'s business acquisition in Europe (see also Note 6 - Acquisitions). In conjunction with the Company's annual impairment testing, the Company's goodwill was tested for impairment as of January 31, 2013. The impairment testing included a determination of the fair value of the Company's reporting units...

  • Page 66
    ... 2012 and available cash to fund the acquisition. The acquired distribution companies are Specialist Distribution Group (SDG) Limited; ETC Metrologie SARL; Best'Ware France SA; ETC Africa SAS and SDG BV (collectively "SDG"). SDG is a leading distributor of value and broadline IT products in the UK...

  • Page 67
    ... to the Company's operating results for the fiscal year ended January 31, 2013. The following table presents unaudited supplemental proforma information as if the SDG acquisition and the execution of the related preferred supplier agreement had both occurred at the beginning of fiscal 2012. The...

  • Page 68
    ... in Italy, France, UK and Poland and adding a number of highly skilled and qualified professionals, while leveraging the Company's existing logistics infrastructure in Europe. Proforma Financial Information Proforma information for the Company's acquisitions during fiscal 2012 has not been presented...

  • Page 69
    ... in Note 2 - Restatement of Consolidated Financial Statements. Each of the waiver agreements relates primarily to representations that may have been incorrect when made, the Company's potential failure to comply with certain covenants, including principally financial reporting covenants, as well as...

  • Page 70
    ... taxes reflected in the Company's consolidated financial statements could differ from the actual results reflected in the income tax returns filed during the subsequent year. Adjustments are recorded based on filed returns when such returns are finalized or the related adjustments are identified...

  • Page 71
    ... 0.0 1.1 28.0% In fiscal 2013 and fiscal 2012, the Company recorded income tax benefits of $25.1 million and $13.6 million , respectively, for the reversal of deferred tax valuation allowances related to specific European jurisdictions which had been recorded in prior fiscal years. The income tax...

  • Page 72
    ... allowances in fiscal 2011 was an increase of $0.1 million . The valuation allowances at both January 31, 2013 and 2012 primarily relate to foreign net operating loss carryforwards. The Company's foreign net operating loss carryforwards totaled $606.8 million and $640.5 million at January 31...

  • Page 73
    In connection with the SDG acquisition during fiscal 2013, the Company recorded a $30.1 million long-term deferred tax liability and a $3.1 million short-term deferred tax asset (see also Note 6 - Acquisitions). 67

  • Page 74
    ... to examinations by the Internal Revenue Service for years prior to fiscal 2010. Income tax returns of various foreign jurisdictions for fiscal 2006 and forward are currently under taxing authority examination or remain subject to audit. NOTE 10 - EMPLOYEE BENEFIT PLANS Overview of Equity Incentive...

  • Page 75
    ... of grant. Awards generally vest between one and four years from the date of grant. For the fiscal years ended January 31, 2013, 2012 and 2011, the Company recorded $13.6 million , $12.0 million and $10.4 million , respectively, of stock-based compensation expense, and related income tax benefits of...

  • Page 76
    ...,799 MVOs granted during the fiscal years ended January 31, 2013, 2012 and 2011 was $10.77 , $10.78 , and $7.97 , respectively, based on a two-step valuation utilizing both the Hull-White Lattice (binomial) and BlackScholes option-pricing models. A summary of the status of the Company's stock-based...

  • Page 77
    ... under the ESPP must be held by the employees for a period of one year. Stock-based compensation expense related to the ESPP was insignificant during fiscal 2013, 2012 and 2011. Retirement Savings Plan The Company sponsors the Tech Data Corporation 401(k) Savings Plan (the "401(k) Savings Plan") for...

  • Page 78
    ... foreign currency exposure relates primarily to international transactions in Europe, Canada and Latin America, where the currency collected from customers can be different from the currency used to purchase the product. The Company's transactions in its foreign operations are denominated primarily...

  • Page 79
    ... Fair Value Measurements. NOTE 14 - COMMITMENTS AND CONTINGENCIES Operating Leases The Company leases logistics centers, office facilities and certain equipment under non-cancelable operating leases, the majority of which expire at various dates through fiscal 2019. Fair value renewal and escalation...

  • Page 80
    ..., Florida; Fort Worth, Texas; Fontana, California; Suwanee, Georgia; Swedesboro, New Jersey; and South Bend, Indiana. The Synthetic Lease has been accounted for as an operating lease and rental payments are calculated at the applicable LIBOR rate plus a margin based on the Company's credit ratings...

  • Page 81
    ... loss pursuant to the above guarantees is remote. NOTE 15 - SEGMENT INFORMATION Tech Data operates predominately in a single industry segment as a distributor of technology products, logistics management, and other valueadded services. While the Company operates primarily in one industry, it is...

  • Page 82
    Table of Contents Financial information by geographic segment is as follows: Year ended January 31, 2013 2012 (As restated) (In thousands) Net sales to unaffiliated customers Americas (1) Europe Total $ $ 9,823,515 15,534,814 25,358,329 $ $ 10,405,428 15,241,885 25,647,313 $ $ 10,096,732 13,523,206 ...

  • Page 83

  • Page 84
    ... condensed consolidated financial statements: Quarter ended AS RESTATED Fiscal year 2013: Net sales Gross profit Operating income Consolidated net income Net income attributable to shareholders of Tech Data Corporation Net income per share attributable to shareholders of Tech Data Corporation: Basic...

  • Page 85
    77

  • Page 86
    Table of Contents Consolidated Statement of Income Quarter ended AS RESTATED Fiscal year 2013: Net sales Cost of products sold Gross profit Operating expenses: Selling, general and administrative expense Value added tax assessment Operating income Interest expense Other expense, net Income before ...

  • Page 87
    Table of Contents Quarter ended AS REPORTED Fiscal year 2013: Net sales Cost of products sold Gross profit Operating expenses: Selling, general and administrative expense Value added tax assessment Operating income Interest expense Other expense, net Income before income taxes Provision for income ...

  • Page 88
    ...Quarter ended AS RESTATED Fiscal year 2012: Net sales Cost of products sold Gross profit Operating expenses: Selling, general and administrative expense Loss on disposal of subsidiaries Operating...of Tech Data Corporation Net income per share attributable to shareholders of Tech Data Corporation: ...

  • Page 89
    ...Quarter ended AS REPORTED Fiscal year 2012: Net sales Cost of products sold Gross profit Operating expenses: Selling, general and administrative expense Loss on disposal of subsidiaries Operating...to correct errors previously discussed in Note 2 - Restatement of Consolidated Financial Statements. 81

  • Page 90
    ... year 2013: Current assets: Cash and cash equivalents Accounts receivable Inventories Prepaid expenses and other assets Total current assets Property and equipment, net Other assets, net Total assets Current liabilities: Accounts payable Accrued expenses and other liabilities Revolving credit loans...

  • Page 91
    82

  • Page 92
    ... year 2013: Current assets: Cash and cash equivalents Accounts receivable Inventories Prepaid expenses and other assets Total current assets Property and equipment, net Other assets, net Total assets Current liabilities: Accounts payable Accrued expenses and other liabilities Revolving credit loans...

  • Page 93
    83

  • Page 94
    ... year 2013: Current assets: Cash and cash equivalents Accounts receivable Inventories Prepaid expenses and other assets Total current assets Property and equipment, net Other assets, net Total assets Current liabilities: Accounts payable Accrued expenses and other liabilities Revolving credit loans...

  • Page 95
    ... year 2012: Current assets: Cash and cash equivalents Accounts receivable Inventories Prepaid expenses and other assets Total current assets Property and equipment, net Other assets, net Total assets Current liabilities: Accounts payable Accrued expenses and other liabilities Revolving credit loans...

  • Page 96

  • Page 97
    ... year 2012: Current assets: Cash and cash equivalents Accounts receivable Inventories Prepaid expenses and other assets Total current assets Property and equipment, net Other assets, net Total assets Current liabilities: Accounts payable Accrued expenses and other liabilities Revolving credit loans...

  • Page 98

  • Page 99
    ... year 2012: Current assets: Cash and cash equivalents Accounts receivable Inventories Prepaid expenses and other assets Total current assets Property and equipment, net Other assets, net Total assets Current liabilities: Accounts payable Accrued expenses and other liabilities Revolving credit loans...

  • Page 100
    ... issuance of the fiscal 2013 financial statements in relation to a loss contingency that existed as of January 31, 2013. As a result of this subsequent event, which is unrelated to the restatement discussed in Note 2 - Restatement of Consolidated Financial Statements, the Company has increased its...

  • Page 101
    ... France SA, ETC Africa SAS and SDG BV (collectively "SDG"), which was the distribution arm of Specialist Computer Holdings PLC ("SCH"), a privately-held IT services company headquartered in the United Kingdom. We have excluded SDG from management's report on internal control over financial reporting...

  • Page 102
    ... corrected by the restatement. The effectiveness of internal control over financial reporting as of January 31, 2013, 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...

  • Page 103
    ...no longer employed by the Company. • The Audit Committee, Board and executives have increased communication to all employees regarding the ethical values of the Company, requirement to comply with laws, the Code of Conduct and the Company's accounting policies. • The Company has engaged external...

  • Page 104
    ... over financial reporting did not include the internal controls of Specialist Distribution Group (SDG) Limited, ETC Metrologie SARL, Best'Ware France SA, ETC Africa SAS and SDG BV (collectively "SDG"), which is included in the 2013 consolidated financial statements of Tech Data Corporation and...

  • Page 105
    ... described above on the achievement of the objectives of the control criteria, Tech Data Corporation and subsidiaries has not maintained effective internal control over financial reporting as of January 31, 2013, based on the COSO criteria. /s/ Ernst & Young LLP Tampa, Florida February 5, 2014 93

  • Page 106
    ... and relationships within the IT distribution channel that allow him to provide value related to finance, management, supplier and customer relationships, operations, and risk. Robert M. Dutkowsky, Chief Executive Officer , has served as a Director since 2006. He joined Tech Data at that time as CEO...

  • Page 107
    ... the University of Chicago. Mr. Harczak is well qualified to serve as a member of the Company's Board. He was an audit partner at PricewaterhouseCoopers auditing public and private companies and the Chief Financial Officer and senior executive for one of the largest IT resellers in the Americas. He...

  • Page 108
    ... added services. His leadership roles in different distribution markets allow him to provide value related to management, operations, and risk. Patrick G. Sayer was appointed as a Director on November 27, 2012. Since 2002, Mr. Sayer has served as chief executive officer of Eurazeo, one of Europe...

  • Page 109
    ... persons who were serving as executive officers of Tech Data as of January 27, 2014. For information regarding Robert M. Dutkowsky, Chief Executive Officer and Director, and Jeffery P. Howells, Executive Vice President and Chief Financial Officer and Director, see "Directors" above. Name Age Title...

  • Page 110
    ... size and structure, director selection, CEO compensation, and merger and acquisition opportunities. Section 16(a) Beneficial Ownership Reporting Compliance During fiscal 2013, the executive officers and directors of the Company timely filed with the SEC reports relating to transactions involving...

  • Page 111
    ... "NEOs Robert M. Dutkowsky - Chief Executive Officer Jeffery P. Howells - Executive Vice President and Chief Financial Officer Néstor Cano - President, Europe Murray N. Wright - President, the Americas John A. Tonnison - Executive Vice President and Chief Information Officer The Company's fiscal...

  • Page 112
    ... overwhelming support for our executive compensation program. At the Company's most recent Annual Meeting, held on May 30, 2012, approximately 35,979,000 votes were cast in favor of the non-binding proposal to approve the compensation paid to our NEOs for fiscal 2012 (the "Say-on-Pay Proposal...

  • Page 113
    ...with this approach. Salary and bonus are targeted to the median of our peer group. Adjustments to our compensation levels are based upon the Company's annual operating plan. The type and size of equity awarded is influenced by associated costs to the Company in relation to the operating plan. Create...

  • Page 114
    ... to the Selected Companies Peer Group, the Committee also considered pay data from two broader general industry subgroups of companies representing a cross-section of manufacturing and services industries. The first such subgroup consisted of 172 companies with publicly reported revenues between $10...

  • Page 115
    ... inherent in our operating plan. In addition to market data, other factors are considered, such as the Company's annual operating plan, targeted earnings, internal pay equity, overall financial performance, the Company's ability to absorb increases in compensation costs, and regional performance...

  • Page 116
    ..., in order to drive and reward short-term superior participation and performance. Consistent with our pay-forperformance philosophy, the performance targets and the acceleration/deceleration table are directly tied to the Company's financial results in relation to its Board-approved annual operating...

  • Page 117
    ... quarterly Committee meeting following the quarter in which the hire or promotion occurred. The decision of what type of equity to grant and the value of the award is based upon an evaluation of the Company's annual operating plan, the desirability of long-term service from the executive officer...

  • Page 118
    ... the contributions each executive made during fiscal 2012. Mr. Wright and Mr. Tonnison each received a base salary increase of 10.0% to bring compensation closer to the peer group median. Salary increases were effective as of May 2012. Base salary increases for each NEO for fiscal 2013 were as...

  • Page 119
    106

  • Page 120
    ... The achievement levels were certified by the Committee in February 2014. Performance target achievement and resulting payouts were as follows: Fiscal 2013 Performance Measure Achievement (%) and Payout (%) Performance Measure EPS Worldwide ROIC Regional profitability (operating income) Americas in...

  • Page 121
    107

  • Page 122
    ... approval in executive session outside of the presence of the CEO. Mr. Dutkowsky received a CMI increase in his fiscal 2013 base salary of 3.5%. Based upon the information provided by Exequity LLP, Mr. Dutkowsky's base salary in March 2012 was 101.1% of the Selected Companies Peer Group median; his...

  • Page 123
    Table of Contents whose employment is severed due to a reduction in force also receive the prorated portion of his or her annual cash incentive that is based on their individual performance. NEO cash incentives were all based on Company performance. 109

  • Page 124
    ...Robert M. Dutkowsky Chief Executive Officer Jeffery P. Howells Executive Vice President and Chief Financial Officer Néstor Cano President, Europe Murray N. Wright President, the Americas John A. Tonnison Executive Vice President and Chief Information Officer Fiscal Year (b) 2013 2012 2011 2013 2012...

  • Page 125
    ... last sales price as quoted on the NASDAQ on the date of grant. (3) 9,308 RSUs are attributable to Mr. Wright's annual equity award. 4,627 RSUs are attributable to his Retention Equity Award, which terminated before vesting upon Mr. Wright's resignation from the Company on August 2, 2013. (4) 4,135...

  • Page 126
    ...awards as of January 31, 2013. Option Awards Stock Awards Number of Securities Underlying Unexercised Options Exercisable (#) (b) Name (a) Dutkowsky Number of Securities Underlying Unexercised Options Unexercisable (#) (1) (c) 26,119 Option Exercise Price ($) (2) (e) 21.13 Option Expiration Date...

  • Page 127
    ... Represents stock options and MVSSARs awarded prior to fiscal 2013; vesting occurs in equal annual installments over four years. (2) Option exercise price equal to the last sales price as quoted on NASDAQ on the date of grant. (3) The market value is based upon the last sales price of $50.91 on the...

  • Page 128
    ... The following table sets forth, for each of the NEOs, information with respect to the exercise of stock options, MVSSARs and similar instruments, and vesting of other equity-based awards during fiscal 2013: Option Awards (1) Number of Shares Acquired on Exercise (#) (b) 301,119 91,922 39,846 2,252...

  • Page 129
    Table of Contents Non-Qualified Deferred Compensation Plans The Company maintains the Tech Data Corporation Deferred Compensation Plan ("Deferred Compensation Plan") that provides executives and directors the opportunity to make pre-tax deferrals. Presently, participants may allocate deferrals ...

  • Page 130
    ... of plan administrator. Amount limited to expenses directly associated with the hardship and all related taxes. Allowed with a 10% penalty. In-service payout options default to 13 months following separation from service for prior inservice distribution elections payable after the separation date...

  • Page 131
    .... For both termination of employment and change in control, see the table in the "Non-Qualified Deferred Compensation Plans" section above. Compensation Policies and Practices and Risk Management The Company's compensation policies for all employees, including NEOs, address risk in the same manner...

  • Page 132
    ...-based compensation, non-employee directors receive equity incentives generally consistent with the philosophy for granting equity incentives to executive officers; i.e., to enable the non-employee directors to acquire and increase their proprietary interest in the long-term success of the Company...

  • Page 133
    ... Committee. ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. Equity Compensation Plan Information The number of shares issuable upon exercise of outstanding share-based equity incentives granted to employees and non-employee directors, as well...

  • Page 134
    ... table below sets forth certain information regarding the beneficial ownership of the Company's common stock as of January 31, 2014, by: (i) the Company's directors and director nominees; (ii) the Company's NEO; (iii) such directors and all executive officers as a group; and (iv) each person known...

  • Page 135
    ... ownership represents less than 1% of the Company's outstanding shares of common stock. The address for these beneficial owners is 5350 Tech Data Drive, Clearwater, Florida 33760. Includes shares held by Mr. Cano (2,606) and the executive officers and directors as a group (2,863) in the Employee...

  • Page 136
    119

  • Page 137
    ...non-executive employee. He receives a salary and equity awards as a part-time employee but does not receive a cash incentive. Mr. Raymund's compensation and benefit amounts that he received as a part-time employee of the Company are reported in the "Fiscal 2013 Board of Directors' Compensation Table...

  • Page 138
    ... review of financial statements included in the Company's Quarterly Reports on Form 10-Q, review and attestation of internal control over financial reporting and services that are normally provided by independent accounting firms in connection with statutory and regulatory filings or engagements for...

  • Page 139
    ... Number 2-A (26) 3-N (19) Agreement Relating to the Acquisition of the IT Distribution Business of the SCC Group dated as of September 4, 2012 Amended and Restated Articles of Incorporation of Tech Data Corporation filed on June 23, 2009 with the Secretary of the State of Florida Bylaws of Tech Data...

  • Page 140

  • Page 141
    ... 2000 Equity Incentive Plan of Tech Data Corporation Employment Agreement Between Tech Data Corporation and Robert M. Dutkowsky, dated October 2, 2006 Amendment Number 11 to Transfer and Administration Agreement dated as of March 20, 2007 Indenture for New 2.75% Convertible Senior Debentures due...

  • Page 142
    ... Amendment to the Tech Data Corporation 401(k) Savings Plan (as amended and restated January 1, 2006) dated December 11, 2012 Subsidiaries of Registrant Consent of Ernst & Young LLP Power of Attorney (included on signature page) Certification of Chief Executive Officer Pursuant to Exchange Act Rules...

  • Page 143
    ... September 21, 2012, File No. 0-14625. Incorporated by reference to the Exhibits included in the Company's Form 8-K dated March 7, 2005, File No. 0-14625. XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statements or prospectus for...

  • Page 144
    Table of Contents SCHEDULE II TECH DATA CORPORATION AND SUBSIDIARIES VALUATION AND QUALIFYING ACCOUNTS (In thousands) Activity Allowance for doubtful accounts receivable and sales returns January 31, 2013 2012 (as restated) 2011 (as restated) (1) Balance at beginning of period Charged to cost ...

  • Page 145
    ... of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on February 5, 2014. TECH DATA CORPORATION By /S/ ROBERT M. DUTKOWSKY Robert M. Dutkowsky Chief Executive Officer 127

  • Page 146
    ... Executive Officer, Director (principal executive officer) Executive Vice President and Chief Financial Officer, Director (principal financial officer) Senior Vice President and Corporate Controller (principal accounting officer) Chairman of the Board of Directors February 5, 2014 February 5, 2014...

  • Page 147
    ... Section 1(a), Administrator, in its entirety, as follows: (a) "Administrator" "Administrator" shall mean the Tech Data Corporation Retirement Plan Investment Committee appointed by the Sponsor in accordance with the Plan document to serve as the administrator of the Plan (within the meaning...

  • Page 148
    ... the Trustee and the Sponsor have caused this First Amendment to be executed by their duly authorized officers effective as of the day and year first above written. TECH DATA CORPORATION FIDELITY MANAGEMENT TRUST COMPANY By: /s/ Jeffery P. Howells EVP & CFO 8/2/2004 Date By: /s/ Rebecca Hayes...

  • Page 149
    ...application, signed procedures and required documentation to: Regular Mail: Fidelity Investments Tech Data Corporation P.O. Box 770001 Cincinnati, OH 45277-0018 Overnight Mail: Fidelity Investments Tech Data Corporation 100 Crosby Parkway Mailzone: KCIF~C Covington, KY 41015 5. The Trustee receives...

  • Page 150
    ... that must be paid in order to avoid eviction or foreclosure. 6. If the application and documentation meet the requirements, the Trustee will execute the transaction and mail the check directly to the Participant's home. If the application and documentation do not meet the requirements, the Trustee...

  • Page 151
    ... this sale and transfer directed by the Sponsor. ...new contributions and exchanges-in) IN WITNESS WHEREOF, the Trustee and the Sponsor have caused this Second Amendment to be executed by their duly authorized officers effective as of the day and year first above written. TECH DATA CORPORATION...

  • Page 152
    ... and the Sponsor heretofore entered into a Trust Agreement dated August 1,2003, with regard to the Tech Data Corporation 401(k) Savings Plan (the "Plan"); and WHEREAS, the Sponsor hereby directs the Trustee; in accordance with Section 8(c) of the Trust Agreement, as follows: (i) to redirect all...

  • Page 153
    ... are authorized to execute this document on behalf of the respective parties. Notwithstanding any contradictory provision of the agreement that this document amends, each party may rely without duty of inquiry on the foregoing representation. TECH DATA CORPORATION /s/ Charles V. Dannewitz 7/5/2006...

  • Page 154
    ...regard to the Tech Data Corporation 401(k) Savings...rate of $100 per hour, (3) Effective July 1, 2007, amending Schedule "B", FEE SCHEDULE , by adding the following: Non-Discrimination Testing Fees: Waived (4) Effective January 1,2012, amending Schedule "B", FEE SCHEDULE , by restating the "Annual...

  • Page 155
    ... the Trustee to use amounts held in the Revenue Credit Account to reimburse the Sponsor for fees and expenses associated with services provided to the Plan, or pay such vendors, including the Trustee or third parties, directly. Effective October 1, 2012, amounts unused for expenses may be allocated...

  • Page 156
    ... no direct or indirect financial interest in the operation of the plan or any agreement related thereto ...2012, amending Schedule "C", INVESTMENT OPTIONS , by adding the following paragraph at the end thereof: The Named Fiduciary hereby directs that for assets allocated to the Revenue Credit Account...

  • Page 157
    ...per calendar quarter, to allocate balances to Participant accounts. To the extent that the Named Fiduciary or Plan Administrator directs that balances in the Revenue Credit Account be allocated to Participants, the Trustee shall, in accordance with directions provided to the Trustee in good order on...

  • Page 158
    .... 3 Include PRCs as contributions for testing and reporting purposes. 3. List below any status codes to be excluded from Eligible Participants: _____ The Trustee shall be responsible for implementing the directions provided above, but has no responsibility for the legality or appropriateness...

  • Page 159
    ..., including, but not limited to, evaluations of information provided by Trustee or its affiliates, shall be made by exercising independent judgment. (2) Effective upon completion of the above-referenced Tech Data Stock Fund liquidation, amending Section I, Definitions , to delete subsection...

  • Page 160
    ... above-referenced Tech Data Stock Fund liquidation, deleting Schedule "M", Available Liquidity Procedures for Unitized Stock Fund , in its entirety. (7) IN WITNESS WHEREOF , the Trustee and the Sponsor have caused this fifth Amendment to be executed by their duly authorized officers effective as...

  • Page 161
    ... Plan (the "Plan") is made and entered into by Tech Data Corporation (the "Employer") this 11th day of December, 2012. WITNESSETH: WHEREAS , Tech Data Corporation, a Florida corporation (the "Employer") adopted and maintains the Tech Data Corporation 401(k) Savings Plan, as most recently amended and...

  • Page 162
    ... on transferability as the Company may reasonably require in order to assure compliance with applicable federal and state securities laws." 5. "(c) Paragraph (c) of Article IX of the Plan shall be deleted in its entirety: In Service Distribution of ESOP Merger Account. (1) Notwithstanding any other...

  • Page 163
    ..., prior to January 1, 2000, has attained age 55 and has been a Participant in the Tech Data Corporation Employee Stock Ownership Plan for at least ten years." 6. "(a) Subparagraph (a)(1) of Article X of the Plan shall be amended to read as follows: Investment Funds. (1) Each Participant may direct...

  • Page 164
    ... full force and effect. IN WITNESS WHEREOF , this Amendment to the Tech Data Corporation 401(k) Savings has been executed by its duly authorized officer as of the date set forth above. TECH DATA CORPORATION /s/ Caryl Lucarelli By: Caryl Lucarelli, VP/HR Americas 1494/74246-001 c urrent/32946732v2

  • Page 165
    ... Products Limited Quadrangle Technical Services Limited Screen Expert Limited UK SDG B.V. Specialized Distribution Group (SDG) Limited Tech Data Brasil, Ltda TD Facilities, Ltd. (Partnership) TD Fulfillment Services, LLC TD Tech Data AB TD Tech Data Portugal Lda TD United Kingdom Acquisition Limited...

  • Page 166

  • Page 167
    ... Europe Limited) Tech Data Mobile Netherlands B.V. (formerly known as M.C.C BV) Tech Data Norge AS Tech Data Operations Center, SA Tech Data Ã-sterreich GmbH Tech Data Peru S.A.C. Tech Data Polska Sp.z.o.o. Tech Data Product Management, Inc. Tech Data Resources, LLC Tech Data Service GmbH Tech Data...

  • Page 168
    ... statements and schedule of Tech Data Corporation and subsidiaries and the effectiveness of internal control over financial reporting of Tech Data Corporation, included in this Annual Report (Form 10-K) for the year ended January 31, 2013. /s/ Ernst & Young LLP Tampa, Florida February 5, 2014

  • Page 169
    ... of Chief Executive Officer Pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a) As Adopted Pursuant to Section 302 of The Sarbanes-Oxley Act of 2002 I, Robert M. Dutkowsky, certify that: 1. 2. I have reviewed this annual report on Form 10-K of Tech Data Corporation (the "registrant"); Based on...

  • Page 170
    ... of Chief Financial Officer Pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a) As Adopted Pursuant to Section 302 of The Sarbanes-Oxley Act of 2002 I, Jeffery P. Howells, certify that: 1. 2. I have reviewed this annual report on Form 10-K of Tech Data Corporation (the "registrant"); Based on...

  • Page 171
    ...the Securities Exchange Act of 1934, (15 U.S.C. 78m), and The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Dated: February 5, 2014 /s/ ROBERT M. DUTKOWSKY Robert M. Dutkowsky Chief Executive Officer

  • Page 172
    ...-K of Tech Data Corporation for the annual period ended January 31, 2013 (the "Report") fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934, (15 U.S.C. 78m), and The information contained in the Report fairly presents, in all material respects, the financial...