Forward-Looking Statements

This Quarterly Report on Form 10-Q, 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 projections 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 Item 1A. Risk Factors in the Annual Report on Form 10-K for the year ended January 31, 2008, for further information. We undertake no obligation to revise or update publicly any forward-looking statements for any reason.

Factors that could cause actual results to differ materially include the following:

• global economic downturn

• competition

• narrow profit margins

• dependence on information systems

• acquisitions and dispositions

• exposure to natural disasters, war and terrorism

• dependence on independent shipping companies

• impact of increases in freight and handling fee charges to customers

• labor strikes

• risk of declines in inventory value

• product availability

• vendor terms and conditions

• loss of significant customers

• customer credit exposure

• need for liquidity and capital resources; fluctuations in interest rates

• foreign currency exchange rates; exposure to foreign markets

• changes in income tax and other regulatory legislation

• changes in accounting rules

• volatility of common stock price

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, configuration services, outbound telemarketing, marketing services and a suite of electronic commerce solutions. We manage our business in two geographic segments: the Americas (including North America and Latin America) and Europe.

Our strategy is to leverage our efficient cost structure combined with our multiple service offerings to generate demand and cost efficiencies for our suppliers and customers. 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 margins have been impacted by intense price competition, as well as changes in terms and conditions with our suppliers, including those terms related to rebates, product returns and other incentives and price protection. We

expect these competitive pricing pressures to continue in the foreseeable future and may be heightened in the relative near term given the challenging economic environment that currently exists in most of the markets in which we operate. We constantly 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 remain focused on not only disciplined pricing and purchasing practices, but also on realigning our customer and vendor portfolio to help drive long-term profitability throughout all of our operations. We continuously monitor the extension of credit and other terms and conditions offered to our customers to prudently balance risk, profitability and return on invested capital. As we evaluate our pricing, credit management and purchasing policies and make future changes, if any, within our customer or vendor portfolio, we may experience moderated sales growth or sales declines. In addition, 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. In addition, given the current economic environment and the worldwide credit constraints, we may experience a higher level of customer defaults than we have seen in recent years.

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 available cash for our working capital needs. We believe our balance sheet at October 31, 2008 was one of the strongest in the industry, with a debt to capital ratio (calculated as total debt divided by the aggregate of total debt and total shareholders' equity) of 20%.

Throughout the first nine months of fiscal 2009, we believe we have made measurable progress towards improving our profitability in our European operations. However, our international business was challenged during our third quarter as a result of the weakness in the global economy and the rapid devaluation of most foreign currencies against the U.S. dollar, particularly in the month of October. We incurred a foreign currency exchange loss of approximately $23.5 million during our third fiscal quarter, with approximately 73% of this loss occurring in the European region. The primary factor contributing to the foreign currency exchange loss was the use of certain portions of inventory as a hedge against foreign currency exposure in accounts payable. In such situations, we would normally expect our product selling prices to customers to fluctuate with changes in the foreign currency exchange rates when such product is purchased in a currency other than the currency in which the inventory is sold. We were able to recover a portion of this foreign currency exchange loss through increased gross margin and we expect to recover additional amounts in future periods as the remaining inventory at October 31, 2008 is sold. However, to the extent that foreign currencies remain volatile and the market conditions remain competitive, there can be no assurance as to the amount of additional gross margin we will be able to realize in future periods. Considering the various challenges faced during the quarter, we were pleased with our achievement of year-over-year third fiscal quarter sales growth in Europe (on a euro basis) when several recent indicators have pointed to flat or decreased IT spending in the region. We continue to make investments in the region to leverage our pan-European infrastructure and to diversify our product portfolio. In the Americas, we continued to experience heightened competitive pricing conditions and felt pressure from economic softness in the region. Within our Canadian and Latin American operations, we also experienced foreign currency volatility against the U.S. dollar, although the impact on the overall Americas business was not as significant as the European region. As a result, our third fiscal quarter net sales growth and operating margins in the Americas fell short of prior year levels achieved in the region. While the Americas results may not be at the level of recent years, considering the economic environment, we believe the region continues to provide solid profitability and returns on invested capital. We continue to make strategic investments in the Americas, through the enhancement of our customer-facing tools and general IT infrastructure related to logistics, finance and other functions in the region.

Our strategy of focusing on execution, diversification and innovation is intended to improve our financial results. However, there continues to be uncertainty surrounding the economic environment and its impact on IT spending. This economic uncertainty coupled with a very competitive pricing environment, especially in the Americas, may hinder our ability to improve our operating margins. As a result, we are constantly monitoring the factors that we can control, including our management of costs, working capital and capital spending and we will continue to work to manage our net sales, profitability and market share. We will also continue to make targeted strategic investments across our operations in IT enhancements and new business opportunities.

In May 2008, we completed the acquisition of certain assets of Scribona, AB, a publicly-traded IT distributor in the Nordic region of Europe, with operations in Sweden, Finland and Norway ("Scribona"). The acquisition expands the Company's presence in the Nordics. In connection with the acquisition, we paid approximately $78.3 million in cash for the net value of the acquired assets including inventory and certain other assets and the assumption of certain liabilities. The total purchase price has been paid in several installments, of which $68.2 million had been paid through October 31, 2008 with the final installment paid in the fourth quarter of fiscal 2009. The asset purchase agreement also provides for an additional earn-out payment of up to up to 1.5 million euros ($1.9 million at October 31, 2008) , if certain performance objectives are met.

Through October 31, 2008, we have recognized approximately $7.5 million of integration costs, primarily associated with customer transition, relocation initiatives, consulting and other integration activities related to the acquisition, which are included in "selling, general and administrative expenses" in the Consolidated Statement of Operations. We expect total integration costs to be approximately $9.0 million, all of which are anticipated to be incurred during fiscal 2009. While this acquisition is not anticipated to have a material impact on our fiscal 2009 results of operations, we believe the acquisition is an important step in our strategy to drive growth and leverage our infrastructure in the European region.

Critical Accounting Policies and Estimates

The information included within MD&A is based upon our consolidated financial statements, which have been 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 on-going basis, we evaluate these estimates, including those related to bad debts, inventory, vendor incentives, goodwill and intangible assets, deferred taxes, derivative financial instruments 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.

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 identified customer risks. Also influencing our estimates are the following:
(1) the large number of customers and their dispersion across wide geographic areas; (2) the fact that no single customer accounts for more than 10% of our net sales; (3) the value and 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 consolidated financial results. Conversely, if actual customer performance 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.

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 technological obsolescence and the nature of vendor terms surrounding price protection and product returns), foreign currency fluctuations 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 advertising allowances, infrastructure funding, volume rebates and other incentive agreements. These incentives are generally under quarterly, semi-annual or annual agreements with the vendors; however, some of these incentives are negotiated on an ad-hoc basis to support specific programs mutually developed with the vendor. Unrestricted volume rebates and early payment 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 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 outstanding receivables from vendors be deemed uncollectible, additional 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, intangible 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 valuation 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 substantially 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 allowance 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 reasonably 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 regulatory 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 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

See 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 recognized under SFAS No. 123R (revised 2004), "Share-Based Payments" 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 three and nine months ended October 31, 2008 and 2007:

                                             Three months ended                  Three months ended
                                              October 31, 2008                    October 31, 2007
                                            $           % of net sales          $           % of net sales
Net sales by geographic region ($
in thousands):
Americas                               $  2,760,985          45.0%         $  2,873,209          48.5%
Europe                                    3,375,127          55.0%            3,050,605          51.5%

Worldwide                              $  6,136,112         100.0%         $  5,923,814         100.0%


                                              Nine months ended                   Nine months ended
                                              October 31, 2008                    October 31, 2007
                                            $           % of net sales          $           % of net sales
Net sales by geographic region ($
in thousands):
Americas                               $  8,261,560          45.0%         $  8,270,009          48.8%
Europe                                   10,106,387          55.0%            8,669,190          51.2%

Worldwide                              $ 18,367,947         100.0%         $ 16,939,199         100.0%


                                             Three months ended                   Nine months ended
                                                 October 31,                         October 31,
                                           2008              2007              2008              2007
Year-over-year increase (decrease)
in net sales (%):
Americas                                   (3.9)%           10.3%              (0.1)%           11.1%
Europe (US$)                               10.6 %            7.9%              16.6 %           10.1%

                                                Three months ended                 Three months ended
                                                   October 31,                        October 31,
                                            2008               2007            2008               2007
Europe (euro)                                9.7%             (1.7)%            5.7%             1.2  %
Worldwide                                    3.6%              9.1 %            8.4%            10.6  %

                                                Three months ended                 Three months ended
                                                 October 31, 2008                   October 31, 2007
                                              $           % of net sales         $           % of net sales
Operating income ($ in thousands):
Americas                                  $  38,799           1.41 %         $  44,262           1.54 %
Europe                                       23,375           0.69 %            17,767           0.58 %
Stock-based compensation expense
recognized under SFAS No. 123R               (3,081 )        (0.05)%            (2,526 )        (0.04)%

Worldwide                                 $  59,093           0.96 %         $  59,503           1.01 %


                                                Nine months ended                  Nine months ended
                                                 October 31, 2008                   October 31, 2007
                                              $           % of net sales         $           % of net sales
Operating income (loss) ($ in
thousands):
Americas                                  $ 118,998           1.44 %         $ 127,991           1.55 %
Europe                                       33,388           0.33 %            (4,379 )        (0.05)%
Stock-based compensation expense
recognized under SFAS No. 123R               (8,775 )        (0.05)%            (7,692 )        (0.05)%

Worldwide                                 $ 143,611           0.78 %         $ 115,920           0.68 %

We sell many products purchased from the world's leading peripheral, system and networking manufacturers and software publishers. Products purchased from Hewlett Packard approximated 30% of our net sales in both the third quarter and first nine months of fiscal 2009 and 29% and 28% of our net sales in the third quarter and first nine months of fiscal 2008, respectively.

The following table sets forth our Consolidated Statement of Operations as a percentage of net sales for the three and nine months ended October 31, 2008 and 2007, as follows:

                                                     Three months ended        Nine months ended
                                                         October 31,              October 31,
                                                      2008          2007        2008         2007
Net sales                                             100.00 %     100.00 %     100.00 %    100.00 %
Cost of products sold                                  95.14        95.21        95.15       95.20

Gross profit                                            4.86         4.79         4.85        4.80

Operating expenses:
Selling, general and administrative expenses            3.90         3.78         4.07        3.94
Loss on disposal of subsidiaries                          -            -            -          .08
Restructuring charges                                     -            -            -          .10

                                                        3.90         3.78         4.07        4.12

Operating income                                         .96         1.01          .78         .68

Other expense (income):
Interest expense                                         .14          .09          .12         .12
Discount on sale of accounts receivable                  .01          .03          .01         .03
Interest income                                         (.04 )       (.07 )       (.04 )      (.06 )
Net foreign currency exchange loss (gain)                .38         (.04 )        .14        (.03 )

                                                         .49          .01          .23         .06

Income before income taxes and minority interest         .47         1.00          .55         .62

                                                      Three months ended            Nine months ended
                                                         October 31,                   October 31,
                                                     2008            2007          2008           2007
Provision for income taxes                              .17             .32           .21            .29

Income before minority interest                         .30             .68           .34            .33
Minority interest in net loss of joint venture           -              .01           .01            .01

Net income                                              .30 %           .69 %         .35 %          .34 %

Three and nine months ended October 31, 2008 and 2007

Net Sales

Our consolidated net sales were $6.1 billion in the third quarter of fiscal 2009, an increase of 3.6% when compared to the third quarter of fiscal 2008. On a regional basis, during the third quarter of fiscal 2009, net sales in the Americas decreased by 3.9%, when compared to the third quarter of fiscal 2008 and increased by 10.6% in Europe (an increase of 9.7% on a euro basis). On a year-to-date basis, net sales were $18.4 billion during the first nine months of fiscal 2009, an increase of 8.4% compared to the first nine months of fiscal 2008. Regionally, net sales in the Americas were relatively stable and Europe increased 16.6% (increase of 5.7% on a euro basis) during the first nine months of fiscal 2009 as compared to the same period of the prior year.

Our sales growth on a euro basis in Europe during both the third quarter and first nine months of fiscal 2009 is primarily the result of the May 2008 acquisition of Scribona AB, our German operations and certain other countries in the region, partially offset by softening in the economic environment and lower IT demand within several countries in which we operate. Our net sales results in the Americas during the third quarter and first nine months of fiscal 2009 are primarily the result of softer demand throughout the region and heightened . . .