CFA Written Report 1-9-16-1-4 (2)

CFA Institute Research Challenge Hosted by

Local Challenge CFA Society of South Florida Florida

International University

Florida International University – Student ResearchConsumer Discretionary Sector, Wholesale Distributor Industry

NASDAQ

Tech Data Corp

Date: 1/10/2016

Ticker – NYSE: TECD

Current Price: $60.77 (1/08/16)

Headquarter: Clearwater, FL

Recommendation: SELL

Target Price: $54.86

This report is published for educational purposes

only by students competing in the CFA Institute

Research Challenge.

Highlights

52-Week High/Low

79.06 -

52.93

Average Volume (3M) 465,659

Diluted Shares Out.

36,651,39

5

Market Cap 2.13B

Beta 0.629

EV/Revenue .88x

EV/EBITDA 6.08x

Operating Income Per

Share 7.01

EPS 4.59

Projected EPS 4.55

Trailing P/E 9.59

Forward P/E 13.07

• Short Interest in Tech Data Corp (TECD) Decreases By 21.2% -

01/04/2016: Short Interest of TECD shares dropped 21.2% from November

30th to a total of 2,942,975 shares

• Tech Data (TECD) Stock Plunges on Earnings Miss – 11/24/2015: Shares

dropped by over 10.41% after the Company’s fiscal 2016 third quarter

earnings results missed expectations.

• Tech Data Downgraded to Underperform at Raymond James –

10/12/2015: Tech Data has had a decrease in sales growth for the year of

4.8% and a operating margin in the trailing 12-month period was 1.3%

relative to the 2.8% median among its competitors.

Recent News

4.7

2 5.1

4

6.8

7

6.9

6

6.7

8

5.9

8

7.0

1

2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2 2 0 1 3 2 0 1 4 2 0 1 5

TE

CD

PE

R S

HA

RE

Operating Income per Share

Financial Condition 2014 2015F 2016F 2017F 2018F 2019F 2020F

Total Revenue $ 25,647 $ 25,358 $ 26,822 $ 27,671 $ 27,062 $ 27,671 $ 27,967

Gross Profit Margin

5.08%

5.04% 5.09% 5.07% 5.06% 5.07% 5.07%

EBITDA Margin

0.92%

1.01% 1.03% 1.01% 1.00% 1.01% 1.01%

Operating Margin

0.72%

0.95% 1.07% 0.93% 0.93% 0.94% 0.93%

EBT/Pre-tax

Margin 0.76% 0.86% 1.21% 0.90% 0.92% 0.93% 0.93%

Net Income Margin

0.67%

0.63% 0.87% 0.70% 0.71% 0.71% 0.67%

We issue a SELL recommendation on Tech Data Corp. (TECD) based upon a one-

year target price of $ 54.86, implying a 10.8% downside from its current closing

price on January 8th, 2016. Our recommendation is driven by the following:

• Weakening Wholesale Distribution Industry – The nature of Tech Data

Business operates within the Consumer Discretionary, Wholesale Distribution

sub-sector, which we believe is a contracting industry. As technology continues

to improve, Tech Data vendors will seek out other efficient options that

eliminates a middlemen, or a wholesaler.

• Highly Competitive Market – Tech Data conducts business in a highly

competitive market with no barriers to entry, as a result many new companies are

constantly entering the sector and potentially drag business away from Tech

Data. This can jeopardize Tech Data bottom line as they are expose to newly

competitors with different, or more cost-efficient pricing.

• Decreasing Revenue Growth - Due to the consumer discretionary sector’s

cyclical nature, Tech Data has been involved in significant growth volatility.

Moreover, the increase in technological improvements and new shipping

methodologies have led the way for diminishing returns in the Wholesale

Distribution subsector. With very unstable growth and constant risk exposure,

Tech Data’s margins will continue to shrink over time.

Source: Bloomberg

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500

1000

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SPX TECD

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Business Description

Tech Data Corporation (TECD) was founded in 1974 and is currently

headquartered in Clearwater, Florida. TECD operated as a private company for

12 years until its IPO in 1986. Together with its direct and indirect subsidiaries,

TECD is a wholesale distributor of technology products. TECD serves value-

added resellers, direct marketers, retailers and corporate resellers in more than

100 countries and provides over 150,000 products. The Company also provides

its customers with advanced logistics capabilities and value-added services. As

of Q2 2015, TECD holds ownership in 55 offices throughout North America

and Europe – consisting of 23 logistics centers and 32 sales offices. Tech Data

conducts business with companies like HP, Apple, Cisco, Microsoft and many

others, to bring hardware devices and software application used in daily

procedures.

Tech Data focuses to grow sales at above the overall IT market by gaining

market share in select product areas, growing earnings in local currency,

generating positive cash flow, and earning a return on capital invested. In order

to executive this, they focus on maintaining a large and well diverse client book.

It customers include over 115,000 value-added resellers, direct marketers,

retailers, and corporate resellers who consumers and supports the diverse

technological needs of their demands. Tech Data offers a variety of products

including: Broadline, Mobility, Software & Cloud Aggregation, Consumer

Electronics, integrated Supply Chain Solutions and Data Center Solutions. In

addition, to the range of product offerings, the Company provides resellers

training and technical support, a suite of electronic commerce tools to impact

and improve vendors business, customized shipping documents, and product

configuration or integration services.

To achieve their goal, TECD continuously provides innovative solutions and

services to value-added reseller including: small and medium-size businesses,

large enterprises, educational institutions, government agencies, and consumers.

TECD offers a vast array of technology products, latest software, cloud

mobility, and consumer technology in conjunction with a range of technical

support solutions to passively grow their market share.

Strategic Focus

The company’s main strategy is to continue to grow sales at or above the IT

market growth rate. Tech Data’s operations are designed to generate and

increase value through:

• Execution- The company execution strategy is supported by their highly

efficient infrastructure, combined with their variety of service offerings, to

generate demand, develop markets and provide supply chain services for

local businesses and vendors. More than 95% of the company’s net sales are

on one common IT platform and over $100 million of orders are processed

each day, which management believes will give Tech Data significant

competitive advantages in providing greater supply chain opportunities by

expanding their value-added services to their customers, on-boarding news

vendors and products faster and improving their ability to rapidly respond to

changes in the market.

• Diversification- The company’s broad selection of products and services

assist in the balance of their overall performance and improve long-term

profitability throughout their steady and efficient operations. The company’s

boardline business is comprised primarily of personal computers,

notebooks, tablets, desktops, printers & supplies, components and other

similar products remains a core part of their business and represents a

significant percentage of total revenue. As technology continues to evolve,

TECD continues to improve their business model, product mix, and value-

added offerings in order to provide their vendors with the most efficient

distribution channel for their products, and their customers with a broad

array of innovative solutions to provide.

• Innovation- The Company’s interest in innovating IT systems provides

them with flexibility to meet the demands of the ever-evolving technology

market across both Americas and European regions. Their global IT systems

provide TECD a competitive advantage by driving efficiencies throughout

their business models while delivering innovative solutions for its business

partners and vendors.

39%65% 60%

42%60%

61%35% 40%

58%40%

0%

20%

40%

60%

80%

100%

Q3 FY!% Q4 FY15 Q1 FY16 Q2 FY16 Q3 FY16

America Europe

$2.6B $2.6B

$2.3B

$2.7B

$2.6B

$2.1

$2.2

$2.3

$2.4

$2.5

$2.6

$2.7

$2.8

Q3 FY15 Q4 FY15 Q1 FY16 Q2 FY16 Q3 FY16

Net Sales

America

$20,000

$22,000

$24,000

$26,000

$28,000

2011 2012 2013 2014 2015

Revenues

$4.1B $4.1B$4.8B

$3.5B$3.8B

Q2 FY15 Q3 FY15 Q4 FY15 Q1 FY16 Q2 FY

Europe

Net Sales

47%

22%

18%

10%

3%

Key Drivers

Broadline

Data Center

Software & Cloud

Mobility

ConsumerElectronics

$12B+

$6B

$5B

$3B

$1B

Source: Company Data

Source: Company Filings

Source: Company Filings

Source: Company Filings

Source: Company Filings

Summary business Strategy

The company’s strategy of execution, diversification, and innovation has

separated TECD in the market they serve and has generated solid margins in both

Americas and Europe for several years.

Management & Governance

Senior level management has been a significant driver for Tech Data. Due to

their previous experiences, and current active roles within the company Tech

Data has excelled in its performance. Each member on the board is highly

qualified for their role due to the fact that every member has over 20 years of

experience in their respective profession. This team, with the exception of one

newly joined member, is also responsible for successfully guiding Tech Data

through a variety of economic conditions; most significantly through the 2008

economic downturn. The culture and values within Tech Data have also been a

main contributor to its success. Their desire to expand abroad, diversify their

services, as well as implement a triple bottom line emphasizing equality, is only

another factor demonstrating their competitive advantage.

The executive team consists of a diverse population, in the sense that some of the

executives were dynamically brought in due to the acquisitions Tech Data has

partaken in. This demonstrates the efficiency this company is willing to have

to successfully serve as a fiduciary to its customers . Tech Data also maintains

a minimum of a two thirds majority of the members of the Board to be

independent (“Independence” defined by regulations of the SEC & NASDAQ

rules) to abstain from antagonistic conflicts of interest. Although the Board does

not consider a maximum limit of terms served by its members, it evaluates each

member’s performance in the respective role to determine the continuation or

termination of the board membership. Compensation matters within Tech Data

are constantly being reviewed by The Compensation Committee based on similar

practices by comparable companies, the work required by each individual roles,

legal considerations, and other key factors.

To maintain shareholder involvement, Tech Data has implemented several

techniques to facilitate the communication between the Board, governing

committees and shareholders. The Tech Data Ethics line is an outside line

directed to a third party provider who creates and directs matters of attention

from a Board member to the General Counsel as well as to the Chief Ethics and

Compliance Officer. The Governance and Nominating Committee considers

Board Nominees from the current Board and company shareholders, and the

Board highly values shareholder input regarding compensation practices within

the company. Lastly, succession planning is constantly discussed although no

clear plans are stated.

With a diverse executive team and an innovative diversification strategy

applicable to their customer, product, and service portfolios Tech Data’s

management and corporate structure has been able to maintain their revenue

stream. But with decreasing sales, and narrow margins given by the nature of the

industry, it is in management’s best interest to continue to enforce their

governance strategy and strengthen their core values to avoid market volatility

and uncertainty in the foreseeable future.

To achieve this, Tech Data focuses on the following values to improve their

corporate governance:

• Committees: Well established and represented Audit, Compensation, and

Governance and Nominating Committees in order to properly oversee and

guide the company, all complying with independence requirements

established by NASDAQ rules.

85%

2% -15%

Ownership Type

InstitutionalInsiderRetail & Other

86%

6%

2%

6%

Institutional Owners

Investment Advisor Hedge Fund Manager

Individuals Others

44%

35%

9%

7%5%

Insider Owners

S. Raymund R. Roberts J. Howells

N. Cano D. Vetter

Source: Bloomberg

Source: Bloomberg

Source: Bloomberg

• Values: Strong ethical values serve as a strong foundation for the company’s

accomplishments. The board also performs self-evaluations, as well as a

separate evaluation of the Chairman and the board on a regular basis .

• Code of Conduct: A strict but personable set of legal and ethical model

which lays out expectations for employees

• Shareholder Priority: With a strong commitment to its shareholders, Tech

Data executives must have an equity ownership requirement of four times the

annual base retainer paid for board membership, to demonstrate their

confidence in the company and create value for its shareholders.

Economic Performance

Strong growth in United States Economy

The United States Economy has rebounded tremendously since the financialcrisis that began in 2007. Strong job growth, wage growth, stable inflation, havelaunched the United States back into its dominant economic position in the globalforefront. Real Gross Domestic Product has grown 2.1 percent in the third quarterof 2015. This steady growth over the past 4 years has been a direct reflection ofQE thereby stimulating consumer demand and economic expansion.

Stable growth in Europe

The current landscape of the European economy has been mostly positive butwith still major shadows of uncertainty continuing to loom over a lot of thecountries in the Euro zone. GDP growth has picked up 0.5% in the first quarter of2015 but has slowed 10 basis points each quarter since. Europe has had a boost intheir economy in the forms of falling energy and oil prices, which has translatedinto an increase in consumer spending and overall disposable income to theaverage consumer. Much like the United States, The Eurozone has been impactedby falling oil prices and QE which has spiked consumer demand in recent years.Optimism in the European economic landscape lies in the voluntary weakening ofthe euro which has contributed to the region’s current account surplus of 3.7% ofGDP. Headwinds from the weakened emerging markets have worked against thisprogress. The Eurozone is projected to continue to expand it’s GDP figures byabout 1.7% propelled by increases in domestic demand and consumption.

Consumer Discretionary Driven by Positive Economic Gains

The Consumer discretionary industry is one that is continuously defined by theoverall economic outlook of a given companies location. For Tech data economicgrowth in the Americas and European countries are of particular interest given themakeup of the company’s revenue streams. Consumer Discretionary poses one ofthe most elastic industries in the financial markets given its “discretionary”nature. Monetary policies, unemployment rates, wage growth, consumerconfidence, consumer spending rates, inflation, and exchange rates are allvariables to consider. The Consumer Discretionary Sector is largely correlatedwith overall economic performance of a given country as illustrated here. Theconsumer Discretionary sector carries a 0.77 (very high) correlation to the S&P500.

Consumer Discretionary Cycle

Consumer discretionary and tech demand are both cyclical in nature. The currentstate of the consumer discretionary industry in the context of the globalizedeconomic landscape we live in is one that implies future expansion of consumerspending. Wholesale distribution companies and more specifically a techdistribution companies rely on manufacture cycles as well as economic cycles toproject growth prospects. At the moment Global economic expansion is projectedto grow at a modest 2.8% YOY with wholesale distribution following suit.

Exchange Rates

Management for Tech Data have emphasized growth in the company all inconstant currencies to adjust for headwinds endured by the company in the pastfiscal year. Tech Data revenue streams come 40% domestically and 60% in theEuropean markets exhibiting the impact that exchange rates have on companieslike TECD. Currently, TECD is impacted on their top line performance with a0.92 USD/EUR exchange rate.

-5.00

0.00

5.00

200620072008200920102011201220132014

Real GDP % Change YOY

Euro area United States

1790

1840

1890

1940

1990

2040

2090

2140

2190

500

520

540

560

580

600

620

640

660

S&P 500 Consumer Discretionary

Source: Eurostat and The Bureau of

Economic Analysis

Source: Bloomberg

Source: Team Analysis

10,000.0

12,000.0

14,000.0

16,000.0

18,000.0

20,000.0

03/31/06 03/31/09 03/30/12 03/31/15

Consumer Confidence Impact on GDP

GDP in Current DollarsGDP in 2009 Dollars

Source: Bloomberg

Technology penetration

Technology demand and high skilled labor in developed countries have growncontinuously as R&D and innovation spillovers have contributed to globaleconomic expansion. Internet penetration in the Eurozone has reached 79.3% with12% of the population being internet users. The United States boasts a lessfragmented market of 87.7% with 48.1% of the population being internet users.

Labor statistics and Consumer Confidence

Consumer discretionary is driven by a consumer’s disposable income andwillingness to spend. When wage growth increases we generally see an increase inconsumer spending and consumer confidence as a whole. Uncertainty andinstability in the market can cause increased saving by consumer which can be veryharmful for a company like Tech Data. Consumer spending and overall consumerdiscretionary industry growth is driven by income and unemployment rates wherethe two factors (consumer spending and disposable income) carry a high correlationof about 0.67. Disposable income and wage growth carry a correlation of about0.57. Employment rates places high pressure on wage levels and consumerspending as a result.

A transforming workplace

Skilled labor in both U.S. and European has grown at rapidly in the past couple ofdecades reflecting a changing workplace toward a more Technological demandingone. In Western Europe and the Americas where Tech data mainly operate, thedemographics of highly skilled labor and jobs requiring technology expertisecontinue to grow. In both Europe and North America’s economies we have seensteady recovery since the global crisis in the late 2000’s. To illustrate, The UnitedStates Unemployment is currently at 5.5% with the wholesale distribution expectedto see increasing employment of about 5% by 2024 (U.S. Bureau Labor Statistics).Both Supply and Demand for highly skilled labor have increased along with thetotal high tech trade as a percent of total trade in Europe. The current account forEuropean trade boasts a trade surplus mainly due to a weakened Euro.

Wholesale Distribution Trends

The wholesale distribution industry continues to shift in different directions withthe advances in technology and although these changes could move the industryforward there are also some challenges that they will face. First, mobile operationalefficiency has continued to effect the landscape of wholesale distribution. Thismobile connectivity has begun to simplify the communications between theretailers to the distributors and distributors to the customer. Customer service hasimproved tremendously by automating orders, checking and securing inventory,finalizing trade promotion activities and integrating mobile data into analytics toname a few examples. Second, value added services have been a source ofdifferentiated relationships but can become very competitive in the long run. InTech data’s perspective these services include IT solution, instillations, cloudcomputing, among others. Although in the short run these may improve customerloyalty it may become the norm in the long run with expectations driving downservice pricing, premiums, and ultimately profitability (this is mainly due to the lowbarriers of entry for wholesale distribution companies).

Competitive Position

TECD has placed itself in a strong position in the tech distribution realm throughits long standing history in the business. Tech data has been in the industry since1971 which has provided the company with the reputation and goodwill to stabilizethe company’s earnings throughout the year. As the largest IT distributor in Europeit has been able to hedge its risk against domestic turbulence, one key componentthat has established Tech Data’s reliability. Another one of Tech Data’scompetitive advantage is increasing demand for data center system, cloud andmobility solutions is a key growth factor for TECD. The company’s efforts todiversify into new domains are significantly positive. The higher level of spendingis expected to drive revenue growth for Tech Data as the company consolidates itsposition in the fast-growing domain of data center, mobile technology, softwareand integrated supply chain. TECD also has a diversified customer base in bothNorth America and Europe. This leads to a steady revenue steam since a volatilityof any region is balanced out by the strength of others. TECD has a strong presencein Europe, which accounted for 58% or $6.6B of sales in Q2, despite of the weakeneuro. Tech Data has been able to consistently outperform the industry averagesbecause of these reasons

012345

New Entrantsinto theIndustry

Competiton inthe Industry

Power ofSuppliers

Power ofCustomers

Threat ofSubstituteProducts

Porter's Five Forces

130

150

170

190

210

230

0.8

0.9

1

1.1

1.2

1.3

1.4

1.5

3/1/2011 3/1/2013 3/1/2015

EUR/USD vs. Net Income (TECD)

Net Income2 EUR/USD

54% 57% 59% 62%66%

72% 70%

79%84% 87%

30

40

50

60

70

80

90

2010 2011 2012 2013 2014

Daily Internet Users

Europe U.S. Linear (U.S.)

Now

•Operational Mobility

•Traceability

Near Term

•Middle Men No Long

•Analytics

Future

•Retail Revolution

•Increased Competition

Source: Company Fillings and Bloomberg

Source: Eurostat and OECD

Source: Team Analysis

Source: Team Analysis

Barriers to entry

Tech Data has developed a good position within its industry as a trusted entity thathas been around for 40 years but the lack of barriers to entry could pose potentialproblems to TECD. Technology distribution, naturally, is not an industry with highbarriers to entry. Technology expertise and IT solutions are becoming morecommon place as the increase in skilled labor (especially at very low costs) havecaused the IT maintenance and solutions market to become more flooded (despitethe continuous increases in demand for IT expertise as a whole). In addition,innovation capabilities are minimal in a distribution company limiting its ability tobe a unique entity that is irreplaceable to manufacturers, and resellers. Techdistribution companies have begun to diversify their value added services toprovide for the increased demand in expertise for the ever expanding markets intech innovation. As mentioned, these needs are niche markets that are soon to beflooded much like much of the tech innovations we have seen through the years.Wholesale distributors ultimately gain competitive advantages through reputationand building relationships.

Investment Summary

20,000.0

22,500.0

25,000.0

27,500.0

30,000.0

-2.00%

0.00%

2.00%

4.00%

6.00%

Revenue Growth

Source: Team Calculations

We issued a Sell Recommendation on Tech Data Corp (TECD) with a target price of

$54.86 using a Discounted Cash Flow Analysis, Relative and Comparable Multiple

Valuation. This Valuation is supported by numerous merits, as outlined below, as

well as assumptions we have taken into consideration.

Weakening Wholesale Distribution Industry

We are assuming that the entire Wholesale Distribution industry will weaken, especially

the IT distribution part of it. Big consumer electronic stores like Best Buy have started and

will grow their own take of value added services to customers. As giant IT companies

expand their presence around the world, it will be less and less likely for an individual to

purchase through a third party vendor as supposed to purchasing their IT products directly

from the corporation.

Assumptions

Highly Exposed to Europe's Economy

• Tech Data is a multinational corporation that operates 60% of its core businessin Europe’s economy which has stagnated in recent years.

• Unemployment rates in the Eurozone remain high with a current 9.6%unemployment rate.

• Tech Data’s bottom line has been strongly impacted by the weakening Euro in

recent years. Over the past year the Euro has fallen from 1.39 in 2014 down to1.09 where it currently stands.

Decreasing Revenue Growth

Over the years we’ve seen a volatile growth in Tech Data’s revenue. We believe that this

is a result from the cyclical consumer discretion sector in which they operate in. In

addition, we believe that the Wholesale Distribution sub-sector is also diminishing due to

technological improvements and new shipping methods from manufacturers to vendors.

With unstable sales growth, Tech Data is constantly being exposed to potential risks,

which in turn forces margins to contract.

Highly Dependable to their suppliers

Tech Data relies heavily on its vendors, which we considered a foreseeable problem. One

simple termination of a contract, change of contract, agreement, or pricing can create

tremendous downward pressure on Tech Data’s bottom line. In a market with no barriers

to entry, new competition arises rapidly and vendors are given other options. Tech Data

must continue to match pricing, contract, and other terms in other to keep its vendors.

Low Return on Investment Compared to the Market (Ben)

Tech Data for the most part has been lagging the overall S&P 500. As of Jan 8 2016, the

S&P 500 has gained 48.62% vs Tech Data's 30.18% over the past 5 years. Tech Data has

also lagged the S&P 500 in the past 3/5 years. As revenue growth is expected to slow and

decrease, it is highly likely that Tech Data will continue to underperform the broader

market.

0%

20%

40%

60%

80%

100%

2012 2013 2014 2015

Historical Cap Structure Book

Value

Total Debt Total Common Equity

Total Minority Interest

Source: Team Calculations

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

2009 2010 2011 2012 2013 2014 2015

EV/EBITDA EV/EBIT

Historical Earnings Margins

Source: Bloomberg

Concerns:

Financial Analysis

Financial Condition 2013 2014 2015F 2016F 2017F 2018F 2019F 2020F

Prifitability

Gross Profit Margin 5.14% 5.08% 5.04% 5.09% 5.07% 5.06% 5.07% 5.07%

EBITDA Margin 1.16% 0.92% 1.01% 1.03% 1.01% 1.00% 1.01% 1.01%

Operating Margin 1.04% 0.72% 0.95% 1.07% 0.93% 0.93% 0.94% 0.93%

EBT/Pre-tax Margin 0.90% 0.76% 0.86% 1.21% 0.90% 0.92% 0.93% 0.93%

Net Income Margin 0.70% 0.67% 0.63% 0.87% 0.70% 0.71% 0.71% 0.67%

Management

Effectiveness

Return on Asset 2.58% 2.51% 2.85% 3.30% 2.68% 2.76% 2.75% 2.55%

Return on Equity 9.2% 8.6% 8.94% 11.59% 8.15% 7.85% 7.25% 6.40%

Short-term Liquidity

Current Ratio 1.38x 1.40x 1.49x 1.32x 1.35x 1.41x 1.49x 1.55x

Quick Ratio 0.88x 0.87x 0.97x 0.87x 0.89x 0.93x 1.00x 1.06x

Cash Ratio 0.08x 0.12x 0.15x 0.14x 0.17x 0.19x 0.20x 0.22x

Asset Turnover

Inventory Turnover 11.2x 10.9x 14.12x 12.64x 12.68x 12.85x 13.03x 13.08x

Accounts Receivable

Turnover

8.3x 9.2x

Total Asset Turnover 3.7x 3.7x 4.51x 3.77x 3.84x 3.88x 3.86x 3.80x

Financial Leverage

Long-term Debt to

Asset 0.05x 0.05x 0.06x 0.05x 0.00x 0.00x 0.00x 0.00x

Long-term Debt to

Equity

0.18x 0.17x

0.18x 0.17x 0.00x 0.00x 0.00x 0.00x

Debt to Equitiy 2.56x 2.42x 2.13x 0.17x 0.00x 0.00x 0.00x 0.00x

Interest Coverage 0.07x 0.07x 0.08x 1.00x 1.00x 1.00x 1.00x

Shareholder Ratios

Earnings per Share 0.18x 0.18x 0.18x 0.13x 0.16x 0.16x 0.16x

*Capital

IQ

*Students

Estimates

1.30x

1.35x

1.40x

1.45x

1.50x

1.55x

1.60x

2013 2014 2015 2016 2017 2018 2019 2020

Current Ratio

4.00%

6.00%

8.00%

10.00%

12.00%

2015 2016E 2017E 2018E 2019E 2020E

Return on Equity

Source: Team Calculations

Source: Team Calculations

2.00%

2.40%

2.80%

3.20%

3.60%

2015 2016E 2017E 2018E 2019E 2020E

Return on Assets

Source: Team Calculations

Highly Competitive Market with no Barriers to Entry

The wholesale industry is a very competitive market with many companies constantly entering

the sector. As more and more companies join the wholesale IT distribution, prices will

eventually need to come down to adjust with the oversupply of companies. Smaller and newer

companies will come and price their items lower than giant corporations like Tech Data just to

gain some market share from them. It is then highly unlikely for Tech Data to gain new

customers with the giant presence and competitive prices that other companies will be offering

new clients in the market looking for IT products. Each company is constantly trying to be

better than the next by provided better VAR services as well as lowering prices which will

significantly hurt Tech Data’s top and bottom line.

OverviewThe financial condition chart above displays Tech Data projections based on our assumptions(see appendix). Based on our analysis of historical financials, 2015 is not an idea starting pointfor our projections because of Tech Data accrued accounting methods.

Profit MarginsMost of Tech Data’s profitability margins will stay the same because of their constant COGSas a % of revenue. Historically ,Tech Data’s COGS has always been around 94-95% of techData’s revenue.

Management EffectivenessTech Data has had phenomenal management effectiveness in the past. As revenues begin todecline as well as net income, these ratios begin to slowly shrink.

50

55

60

65

70

75

80

11/2014 12/2014 2/2015 4/2015 5/2015 7/2015 9/2015 10/2015 12/2015 1/2016

TECD Share Prices and News Flow

5/8EVA Dimensions initiates Buy Rating

5/28Raymond James reiteratesMarket Perform Rating

8/20EPS Actual 1.43 vs 1 estimate

9/29Morningstar initiatesHold Rating

10/12Raymond James initiates Underperform Rating

11/24EPS Actual 1.28 vs 1.3tech3 estimate

EPS: 0.8 vs 0.69 estimate

EPS: 1.96 vs 2.03 estimate

-4.00%

-2.00%

0.00%

2.00%

4.00%

2015 2016 2017 2018 2019 2020

YoY Revenue Growth

Source: Team Calculations

Short-term liquidityTech Data’s short term liquidity ratios seem to be relatively the same exceptfor cash ratio which increases as Tech Data begins to accumulate cash. Wedo not believe that in the next 5 years any significant project will come alongthat will require a significant amount of debt.

Financial LeverageTech Data has very little debt compared to the amount of assets and equityTech Data has. Some Ratios will turn into 0 because of the lack of debt TechData will take in. Tech Data has accumulated very little debt and is about topay off their biggest and basically only impactful debt of around 300 Million.We don’t believe that Tech Data will accumulate much more debt in thefuture given the amount of cash they have. Tech Data is also not known toissue a lot of debt.

Source: Team Calculations

Source: Team Calculations

Source: Team Calculations

Valuation

Discounted Cash Flow:

Revenue Growth: Tech Data has maintained steady levels of revenue

growth throughout the years, primarily due to the cyclical nature of the

consumer discretion industry in which they operate in, among other

factors. In order to forecast future earnings we applied the average of prior

years revenue growth rates. When calculating this average we arrived at a

growth rate by assuming a variety of key factors that may impact Tech

Data’s top line.

Cost of Capital: In order to calculate Tech Data’s cost of capital, we

utilized the weighted average cost of capital method (WACC). After

calculating both the cost of equity, as well as the cost of debt, and applying

a determined weight for each component, we were able to arrive at a

9.09% WACC.

Cost of Equity: Tech Data’s cost of equity was calculated using the

Capital Asset Pricing Model (CAPM). By calculating an expected market

return of 10.0% and subtracting it from our assumed risk free rate (10 Year

US Treasury) of 2.23%, we arrived at risk premium of 7.8%. When

applying the Capital Asset Pricing Model we used the following figures for

the risk free rate, the market premium, and the Beta: 2.23%, 7.8%, 1.01.

Cost of Debt: When calculating the after-tax cost of debt for Tech Data

we multiplied its before-tax cost of debt, 2.3%, and multiplied this by one

minus their marginal tax-rate, 26.8%.

Free Cash Flow: Tech Data’s revenue growth has been steady

throughout the years and management has made it a point to transform

their base business model from a distributive “box moving” company to a

service and value adding company. YOY % growth in revenue is expected

to slow in the coming years but the diversification of Tech Data’s business

operations will help support their cash flows. As show by our DCF model

we project near term shrinking with strong long term potential upside,

most significantly in the cash flows from operations. Capital expenditure is

projected to slow as the need for plant property and equipment will

diminish as demand for wholesale distribution (the need for middle men)

slows but technology penetration continues to grow in Europe’s

fragmented market. Free Cash flow will likely shrink short term but has

strong potential upside for our 5 year DCF window.

Valuation

($ in millions of U.S. dollars except per share amounts) Projected Fiscal Years Ending January 31

Free Cash Flows 2015 2016 2017 2018 2019 2020

EBIT * (1-tax rate) 193 209 199 199 201 192

Depreciation And Amortization (19) (10) (12) (13) (13) (10)

Capex (19) (21) (20) (17) (18) (14)

Net change in working capital (147) 66 106 (137) (57) 225

Free cash flows to the firm (FCFF) 9 244 273 32 113 394

Years to Discount 1.00 2.00 3.00 4.00 5.00 6.00

Cost of Capital 9.3% 9.3% 9.3% 9.3% 9.3% 9.3%

Discount Factor 0.91 0.84 0.77 0.70 0.64 0.59

PV Free cash flows to the firm (FCFF) 8 205 209 23 73 231

FCFF Fair Value Multiple Method

EBITDA Multiple 5.6x

Last forecast EBITDA 286

Terminal Value 1,603

Present Value of Terminal Value 941

Terminal Value as % of Total Value 55.7%

Present Value of Forecast FCF 748

Forecast Period as % of Total Value 44.3%

Enterprise Value 1,689

- Debt (hardcode as of valuation date) (365.1)

+ Cash (hardcode as of valuation date) 586.0

Net Debt (220.9)

Equity Value (Market Cap) 1,910

Shares outstanding 35.1

Fair value share price 54.40

Model Summary

Projected Fiscal Years Ending January 31

Forecast Summary 2015 2016 2017 2018 2019 2020

Revenues 27,671 27,062 27,671 27,967 28,070 28,416

Revenue Growth Rate 3.2% -2.2% 2.3% 1.1% 0.4% 1.2%

EBITDA 280 277 279 281 284 286

EBITDA Growth Rate 13.9% -0.9% 0.5% 0.7% 1.2% 0.8%

EBITDA Margin 1.01% 1.03% 1.01% 1.00% 1.01% 1.01%

Weighted Average Cost of Capital

10 Year US Treasury 2.23%

Expected market return 10.2%

Market risk premium8.0%

Beta 1.01

CAPM cost of equity 10.3%

Cost of debt 2.2%

Tax Rate 26.8%

After tax cost of debt2.3%

Target gearing 12.5%

WACC9.29%

Perpetual growth of firm cash flows (post year

5) 1.90%

Investment Risks

Operational Risks:

The company operates in a mature sector. The IT distribution sector is maturewith constant competition entering the market. Tech Data has to go up againstlarge corporations as well as smaller distributors around the areas they operate.Any of their competitors can take significant share of the market by simplyreducing the prices on the products they sell. Customers are not required to buya specific amount of items. These customers can move to one of theircompetitors within the next day.

Currency Risk:

Nearly 58% of Tech Data’s revenue derives from international markets withtheir largest presence being Europe. Local competitors might have differentpurchasing models than Tech Data, which reduces foreign currency exposure,allowing them to lower prices. Because of Tech Data’s large exposure to thestrong dollar, it will not be able to compete with competitor prices withoutsignificantly lowering their profits on sales.

Supply Risk:

Tech Data relies heavily on PC’s, which has seen a constant decline within thepast couple of year. One of their biggest products, Hewlett Packard, has seen aconstant decline in sales recently. The bulk of what Hewlett Packard has tooffer is personal computers. A constant decline in computer sales willnegatively impact Tech Data.

Rely heavily on large vendors:

Termination or a change of contract from Tech Data’s largest vendors willcreate tremendous problems. Tech Data relies heavily on large vendors and asimple change of contract, agreement on price protection, or return right willreduce their profits. The company's standard distribution agreement allowstermination without cause with a simple 30-day notice.

Fully rely on one shipping company:

Tech Data ships their products through independent shipping companies. Theinability of these independent shipping companies to operate will have atremendous effect on Tech Data.

Employment Risk:

The company’s labor force in America is non-union but its Europeansubsidiaries are subject to collective bargaining and similar things. According toTech Data, “The country does business in foreign countries where labordisruption is more common than in the United States”. Some of the freightcompanies are unionized. Any strike imposed by the company’s employeescould have a negative impact on its business.

Credit Risks:

Tech Data’s business requires a substantial amount of capital. They rely oncapital to finance their product inventory. As the Federal Reserve is anticipatedto gradually increasing interest rates, the costs of acquiring finance and themethods they use to finance certain things might change. Many of thecompanies financing instruments involve variable debt. An increase in interestrates will increase the interest on the company’s debt which will decreaseprofitability.

Economic Risks:

Most of Europe and South America’s economy is contrasting. It is challengingfor Tech Data to earn a profit in a down economy. 60% of Tech Data’s revenuederives from Europe. With high unemployment rate, tough austerity measures,and low inflation within many countries in Europe, it may be difficult for theeconomy to grow. This forces pressure on Tech Data’s earnings and revenue .

Other Risk:

Political instability, government controls, trade restrictions, changes in theinterpretation of the law, difficulty in acquiring account receivables, and tariffchanges are all risks which may have a negative impact on the company. Theinability to receive product into the logistics centers because of governmentrestrictions or labor disputes will have a negative effect on the business.

Operational Risk

currency Risk

Supply RiskEmployment

Risk

Other Risk

20

40

60

80

100

0 20 40 60 80 100

CO

NSE

QU

ENC

E

PROBABILITY

RISK ASSESMENT

Risk Mitigation/Solution

Lost of customers

Management ability to maintain

customers using various tactics like value

added services

Competition due to

disadvantage in

currency market

Hedge against stronger dollar and ability

to keep customers from choosing a

different company

Constant decline in

computer Sales

Create new products and services to be

able to diversify away from PC's

Rely Heavily on

Large vendors

Keep large vendors happy and wanting to

keep doing business with Tech Data

Fully rely on one

shipping company

Look at more than one shipping company

for a specific area

Employment RiskKeep employers happy and keep their

needs satisfied

Credit RisksTry to switch some debt into fixed rates

as supposed to variable rates

Economic RisksFind ways to still be able to profit from a

down economy

Other Risks

Keep an eye out for political tension in

certain area to be able to be prepared

incase some political tension does occur

0

1

2

3

4

5Total Strengths

TotalWeaknesses

TotalOpportunities

Total Threats

Tech Data SWOT Analysis

Disclosures:Ownership and material conflicts of interest:The author(s), or a member of their household, of this report does not hold a financial interest in the securities of this company.The author(s), or a member of their household, of this report does not know of the existence of any conflicts of interest that might bias the content or publication of this report.Receipt of compensation:Compensation of the author(s) of this report is not based on investment banking revenue.Position as a officer or director:The author(s), or a member of their household, does not serve as an officer, director or advisory board member of the subject company.Market making:The author(s) does not act as a market maker in the subject company’s securities.Disclaimer:The information set forth herein has been obtained or derived from sources generally available to the public and believed by the author(s) to be reliable, but the author(s) does not make any representation or warranty, express or implied, as to its accuracy or completeness. The information is not intended to be used as the basis of any investment decisions by any person or entity. This information does not constitute investment advice, nor is it an offer or a solicitation of an offer to buy or sell any security. This report should not be considered to be a recommendation by any individual affiliated with CFA Society of South Florida, CFA Institute or the CFA Institute Research Challenge with regard to this company’s stock.

Appendix A: Value Added Reseller Structure and Glossary of Terms

Board Independence: According to Tech Data’s Corporate Governance Principles, a minimum of a two thirds majority of

the members of the Board should be independent, as “independence” is defined by applicable regulations including the SEC

and NASDAQ rules. (Source: Investopedia & Techdata.com)

Quantitative Easing: it is an unorthodox monetary policy used by central banks to stimulate the economy when standard

monetary policy has become ineffective. Central banks purchase government securities, as well as other securities from the

market in order to lower interest rates and increase the money supply. (Source: Investopedia)

Value Added Reseller: As value added resellers, Tech Data’s customers pride themselves in enhancing the value of the

products it resells by including extra services & products. (Source: Investopedia & Techdata.com)

Value Added Services: As one of the largest distributors of technology products, services, and solutions, Tech Data

provides its resellers around the globe the technology support they need to please end users of all sizes.

Source: Investopedia & Techdata.com

Appendix B: TECD Organizational Chart

Robert DutkowskyCEO

Charles DannewitzCFO and Executive Vice

President

Senior Vice President and Chief Financial Officer,

Europe

Joseph B. TrepaniSenior Vice President and

Chief Financial Officer, The Americas

John TonnisonExecutive Vice President,

Cloud Computing and Chief Information Officer

Beth E. SimonettiSenior Vice President and Chief Human Resources

Officer

Jeffrey L. TaylorSenior Vice President and

Corporate Controller

Tech Data Organizational Chart

Appendix C: Quantitative Easing, Currency Fluctuation, and FED Interest Policy

I. Quantitative Easing

I. The Consumer Discretionary and Technology industries are ones that are both driven both consumer’s willingness to spend andto further analyze the prospects of growth in these industries we need to determine at what point in the economic cycle acountry may be in. Tech Data which operates 60% in the Euro Zone and 40% in North America has recently been faced witheconomic stagnation followed by steady recovery (in the United States). Quantitative Easing, or the method of the federalgovernment creating money to buy financial assets such as government bonds, was first used by Japan in the early 2000’s andlater adopted by the United States as a solvent for the recent liquidity trap that resulted from the recent financial crisis. Sincethe first wave of asset purchases by the fed in 2009 (QE1) the Unemployment rate has fallen to just 5%, Consumer spending isup, and so is unemployment. In Europe the ECB has recently announced It plans to spend €60 billion ($70 billion) a month for atleast 19 months, adding hefty purchases of government bonds to an existing scheme to buy covered bonds and asset-backedsecurities (currently around €10 billion-worth a month)Tech Data could be a seemingly long term beneficiary of these QE plans ifinflation could reach the planned 2% growth rate in Europe and if the Euro is able to recover.

I. Currency Fluctuation

I. The History of the Euro against the Dollar has been well documented and is one of the main bottom line differentiators for acompany like Tech Data. Multinational Corporations are particularly concerned with the currency valuation of all its operatingcountries and most of the time its growth is dependent on what these costs of doing business are. Recently, The Euro Has fallenagainst the Dollar ultimately causing Tech Data to forfeit some of its profitability; as a result Tech Data constantly stresses theirconsistent growth in constant currencies. For a company headquartered in Clearwater, Florida the cost of its operations in theUnited States would weigh more heavily on its bottom line production when it revenues from the Euro zone weaken. As a resultthe return that Tech Data has been getting on its assets have shrank and management has mentioned that it has began todiversify its products and shift toward adding more importance on the cloud, and value added services. The Euro has fallenagainst the Dollar due to the recent volatility in the EU markets. Some factors include the Quantitative easing measuresannounced by the ECB, the Dollar yielding higher interest rates, and the ECB’s record low interest rates. The prospects forincreased Euro valuations are largely dependent on domestic demand and inflation in the EU which doesn’t seem like anythingmore than a steady recovery at the moment. Current USD:EUR : 0.915

II. Fed Interest Rate Policies

I. Both the United States’ Federal Reserve and the Europe Union Union’s European Central Bank have the responsibility ofcontrolling the countries’ monetary policies by adjusting its interest rate landscape. In recent years the ECB and the federalreserve have set their lending rates at drastically low levels to boost economic consumption and ultimately spur their economiesinto recovery. With the improvement in the United States economy the Fed has cited improved employment numbers andincreased wages as the main reasons for the first rate hike since June 2006. In the European Union we have seen desperatelylow interest rates and even negative interest rates (depositors are charged to keep money in their account). The EU has beengrappling with its highest unemployment rates since 1999 and low inflation and domestic demand. Mario Draghi has been citedhas being willing to do “whatever it takes” to save the EU’s common currency which has been very volatile since the Eurozone’spoor Fiscal Policy decisions have taken hold.

Belgium 8.5

Bulgaria 11.4

Czech Republic 6.1

Denmark 6.6

Germany (until 1990 former territory of the FRG)5.0

Estonia 7.4

Ireland 11.3

Greece 26.5

Spain 24.5

France 10.3

Croatia 17.3

Italy 12.7

Cyprus 16.1

Latvia 10.8

Lithuania 10.7

Luxembourg 6.0

Hungary 7.7

Malta 5.8

Netherlands 7.4

Austria 5.6

Poland 9.0

Portugal 14.1

Romania 6.8

Slovenia 9.7

Slovakia 13.2

Finland 8.7

Sweden 7.9

United Kingdom 6.1

Iceland 5.0

Norway 3.5

Turkey 9.9

United States 6.2

8.511.4

6.16.6

5.07.4

11.326.5

24.510.3

17.312.7

16.110.810.7

6.07.7

5.87.4

5.69.0

14.16.8

9.713.2

8.77.9

6.15.0

3.59.9

6.2

0.0 5.0 10.0 15.0 20.0 25.0 30.0

Unemployment Across Europe

0

20

40

60

80

100

120

10,000.0

12,000.0

14,000.0

16,000.0

18,000.0

20,000.0

31

-Mar

-06

29

-Dec

-06

28

-Se

p-0

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30

-Ju

n-0

8

31

-Mar

-09

31

-Dec

-09

30

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p-1

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30

-Ju

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30

-Mar

-12

31

-Dec

-12

30

-Se

p-1

3

30

-Ju

n-1

4

31

-Mar

-15 C

Consumer Confidence Impact on GDP

GDP in Current Dollars GDP in 2009 Dollars

Consumer Confidence Index

1

1.1

1.2

1.3

1.4

1.5

1.6

1.7

Exch

ange

Rat

es

EUR/USD Exchange Rates

1-J

an-1

0

1-M

ay-1

0

1-S

ep

-10

1-J

an-1

1

1-M

ay-1

1

1-S

ep

-11

1-J

an-1

2

1-M

ay-1

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1-S

ep

-12

1-J

an-1

3

1-M

ay-1

3

1-S

ep

-13

1-J

an-1

4

1-M

ay-1

4

1-S

ep

-14

1-J

an-1

5

1-M

ay-1

5

1-S

ep

-15

Consumer Confidence Index

0

1

2

3

4

5

6

Inte

rest

rat

e (%

)

Interest Rates

Fed Funds Rate (US) Refi Rate

Appendix D: Historical Financial Performance and Projected Financial Statements

Balance Sheet

Balance Sheet

Balance Sheet as of:

Jan-31-2014 Jan-31-2015 Jan 2016 Jan 2017 Jan 2018 Jan 2019 Jan 2020

Currency USD USD USD USD USD USD USD

ASSETS

Cash And Equivalents 570.10 543.00 679.45 815.91 867.88 893.43 973.17

Total Cash & ST Investments 570.10 543.00 679.45 815.91 867.88 893.43 973.17

Accounts Receivable 3,215.7 2,812.0 2,996.6 3,168.0 3,196.9 3,329.8 3,491.4

Other Receivables 100.0 37.8 215.8 60.3 45.2 30.8 36.9

Total Receivables 3,315.7 2,849.8 3,212.3 3,228.3 3,242.1 3,360.6 3,528.3

245.5

Inventory 2,450.8 1,959.6 2,140.5 2,181.8 2,175.7 2,153.9 2,173.0

Prepaid Exp. 126.3 114.1 129.1 123.3 122.7 120.6 119.9

Other Current Assets 6.2 111.6 52.3 48.1 43.8 39.5 36.0

Total Current Assets 6,469.0 5,578.1 6,213.6 6,397.3 6,452.1 6,568.1 6,830.3

Gross Property, Plant & Equipment 413.4 371.2 365.2 360.4 355.3 350.1 345.8

Accumulated Depreciation (335.8) (308.1) (300.2) (298.4) (296.3) (292.9) (290.1)

Net Property, Plant & Equipment 77.6 63.1 65.0 62.0 59.0 57.2 55.7

Goodwill 230.5 198.6 212.7 202.0 181.8 163.6 147.3

Other Intangibles 237.9 176.8 191.3 153.0 137.7 123.9 111.5

Other Long-Term Assets 154.6 121.7 498.7 398.9 379.0 360.0 342.0

Total Assets 7,169.7 6,138.2 7,181.2 7,213.3 7,209.6 7,273.0 7,486.9

LIABILITIES

Accounts Payable 3,959.4 3,119.6 4,002.7 4,049.7 3,908.9 3,757.7 3,799.1

Accrued Exp. 558.3 495.1 542.3 547.3 531.0 518.1 517.0

Short-term Borrowings 43.5 13.3 13.3 13.3 13.3 13.3 13.3

Other Current Liabilities 56.4 115.1 137.3 137.6 133.4 133.3 80.1

Total Current Liabilities 4,617.6 3,743.1 4,695.6 4,747.9 4,586.6 4,422.4 4,409.5

Long-Term Debt 354.1 353.1 353.1 3.1 3.1 3.1 3.1

Other Non-Current Liabilities 99.3 81.9 89.2 89.2 89.2 89.2 89.2

Total Liabilities 5,071.1 4,178.1 5,137.91 4,840.26 4,678.93 4,514.70 4,501.84

Common Stock 0.1 0.1 0.1 0.1 0.1 0.1 0.1

Additional Paid In Capital 675.6 680.0 680.0 680.0 680.0 680.0 680.0

Retained Earnings 1,993.3 2,168.5 2,405.2 2,598.5 2,797.2 2,997.2 3,188.4

Treasury Stock (894.9) (939.1) (1,070.5) (934.1) (975.1) (947.5) (911.9)

Comprehensive Inc. and Other 324.6 50.8 28.5 28.5 28.5 28.5 28.5

Total Common Equity 2,098.6 1,960.1 2,043.3 2,373.0 2,530.7 2,758.3 2,985.1

Minority Interest - -0 0 0 0 0

Total Equity 2,098.6 1,960.1 2,043.3 2,373.0 2,530.7 2,758.3 2,985.1

Total Liabilities And Equity 7,169.7 6,138.2 7,181.2 7,213.3 7,209.6 7,273.0 7,486.9

Income Statement

Income Statement

For the Fiscal Period Ending

Restated

12 months

Jan-31-2011

Restated

12 months

Jan-31-2012

12 months

Jan-31-2013

Reclassified

12 months

Jan-31-2014

12 months

Jan-31-2015 Jan 2016 Jan 2017 Jan 2018 Jan 2019 Jan 2020

Currency USD USD USD USD USD USD USD USD USD USD

Revenue 23,619.9 25,647.3 25,358.3 26,821.9 27,670.6 27,061.88 27,670.77 27,966.85 28,070.32 28,415.59

% Revenue Growth 8.58% -1.13% 5.77% 3.16% -2.20% 2.25% 1.07% 0.37% 1.23%

Other Revenue - - - - - 0 0 0 0 0

Total Revenue 23,619.9 25,647.3 25,358.3 26,821.9 27,670.6 27,061.86 27,670.79 27,966.86 28,070.33 28,415.60

YoY % Growth 8.58% -1.13% 5.77% 3.16% -2.20% 2.25% 1.07% 0.37% 1.23%

Cost Of Goods Sold 22,341.7 24,269.9 24,055.3 25,459.6 26,276.7 25,685.72 26,268.62 26,550.79 26,646.61 26,975.62

COGS as a % of revenue 94.63% 94.86% 94.92% 94.96%94.91% 94.93% 94.94% 94.93% 94.93%

Gross Profit 1,278.3 1,377.4 1,303.1 1,362.3 1,394.0 1,376.14 1,402.18 1,416.07 1,423.72 1,439.98

Gross profit margin (%) 5.41% 5.37% 5.14% 5.08% 5.04% 5.09% 5.07% 5.06% 5.07% 5.07%

Selling General & Admin Exp. 956.8 1,044.6 1,009.9 1,116.6 1,114.0 1,098.71 1,123.43 1,135.45 1,139.66 1,153.67

SG&A as a % of revenue 4.05% 4.07% 3.98% 4.16% 4.03%4.06% 4.06% 4.06% 4.06% 4.06%

R & D Exp. - - - - - 0 0 0 0 0

R&D as a % of revenue 0% 0% 0% 0% 0% 0% 0% 0% 0%

Total Operating Expenses 956.8 1,044.60 1,009.87 1,116.55 1,114.03 1,098.71 1,123.43 1,135.45 1,139.66 1,153.67

Total Operating Expense as a % of revenue

4.05% 4.07% 3.98% 4.16% 4.03% 4.06% 4.06% 4.06% 4.06% 4.06%

EBITDA 321.4 332.8 293.2 245.8 279.9 277.4 278.7 280.6 284.1 286.3

EBITDA margin (%) (% of revenue) 1.36% 1.30% 1.16% 0.92% 1.01% 1.03% 1.01% 1.00% 1.01% 1.01%

EBITDA Growth Yoy% 3.56% -11.92% -16.16% 13.88% -0.89% 0.47% 0.67% 1.23% 0.79%

Depreciation & Amort. - - - - - 0 0 0 0 0

Other Operating Expense/(Income) 0 0 29.5 53.8 15.8 (12.6) 21.6 21.6 21.6 21.6

Other Operating Exp., Total 0 0 29.5 53.8 15.8 (12.6) 21.6 21.6 21.6 21.6

Operating Income/EBIT 321.4 332.8 263.7 192.0 264.1 290.0 257.1 259.0 262.5 264.7

Operating Income as a % of Revenue 1.36% 1.30% 1.04% 0.72% 0.95% 1.07% 0.93% 0.93% 0.94% 0.93%

Interest Expense (29.9) (31.4) (30.1) (26.6) (26.5) (14.1) (7.6) (0.9) (0.9) (0.9)

Interest and Invest. Income - - - - - 0 0 0 0 0

Net Interest Exp. (29.9) (31.4) (30.1) (26.6) (26.5) (14.1) (7.6) (0.9) (0.9) (0.9)

Other Non-Operating Inc. (Exp.) 4.4 (0.9) (4.1) 3.4 (1.7) (2.0) 0.2 0.2 0.2 0.2

EBT Excl. Unusual Items 295.8 300.6 229.5 168.8 235.9 273.9 249.7 258.4 261.8 264.1

Impairment of Goodwill - - - - - 0 0 0 0 0

Gain (Loss) On Sale Of Assets - (28.3) - - (1.3) (2.0) 0.0 0.0 0.0 0.0

Legal Settlements - - - 35.5 5.1 (1.2) 0.0 0.0 0.0 0.0

Other Unusual Items - - - - (0.4) 57.6 0.0 0.0 0.0 0.0

EBT Incl. Unusual Items 295.8 272.3 229.5 204.3 239.3 328.3 249.7 258.4 261.8 264.1

Income Tax Expense 82.8 71.1 46.4 24.4 64.0 91.60 56.44 59.68 61.79 72.88

28.0% 26.1% 20.2% 11.9% 26.8% 27.9% 22.6% 23.1% 23.6% 27.6%

Earnings from Cont. Ops. 213.0 201.2 183.0 179.9 175.3 236.7 193.3 198.7 200.0 191.2

Earnings of Discontinued Ops. - - - - - 0 0 0 0 0

Extraord. Item & Account. Change - - - - - 0 0 0 0 0

Net Income to Company 213.0 201.2 183.0 179.9 175.3 236.7 193.3 198.7 200.0 191.2

Minority Int. in Earnings (4.6) (10.5) (6.8) - - 0 0 0 0 0

Net Income 208.4 190.8 176.3 179.9 175.2 236.7 193.3 198.7 200.0 191.2

Cash Flow

Cash Flow

For the Fiscal Period Ending

Restated

12 months

Jan-31-2011

Restated

12 months

Jan-31-2012

Restated

12 months

Jan-31-2013

12 months

Jan-31-2014

12 months

Jan-31-2015 Jan 2016 Jan 2017 Jan 2018 Jan 2019 Jan 2020

Currency USD USD USD USD USD USD USD USD USD USD

Net Income 208.4 190.8 176.3 179.9 175.2 236.7 193.3 198.7 200.0 191.2

Depreciation & Amortization 21.0 21.9 20.6 21.2 19.2 10.1 12.3 13.4 12.5 9.6

Amort. of Goodwill and Intangibles 26.3 35.4 37.8 51.8 49.5 49.5 50.3 53 48 46

Depreciation & Amort., Total 47.3 57.3 58.4 73.0 68.7 59.6 62.6 66.4 60.5 55.6

Other Amortization 10.3 9.0 0.1 0.3 0.3 0.3 0.3 0.3 0.3 0.3

Minority Int. in Earnings 4.6 10.5 6.8 - -0 0 0 0 0

(Gain) Loss From Sale Of Assets - 28.3 - - (1.0) 2 0 0 0 0

Stock-Based Compensation 10.4 12.0 13.6 8.9 13.7 15.4 13.9 12.7 15.6 16

Tax Benefit from Stock Options (1.2) (2.0) (5.3) (0.9) (0.7) (3.0) (1.7) (1.6) (0.8) (0.9)

Provision & Write-off of Bad debts 11.8 10.8 9.7 11.7 10.4 6.8 7.5 8.5 9.6 8.1

Other Operating Activities 7.2 (34.0) (22.8) (53.5) (0.3) (0.3) (25.0) (16.0) (14.3) (18.4)

Change in Acc. Receivable (13.7) (10.7) (103.5) (36.0) 22.2 (154.3) 171.4 28.9 133.0 161.5

Change In Inventories (481.6) 457.2 (151.7) (209.4) 245.5 22.1 41.3 (6.1) (21.8) 19.1

Change in Acc. Payable 396.3 (124.6) 218.6 321.3 (469.8) 228.8 47.1 (140.9) (151.2) 41.4

Change in Other Net Operating Assets (23.7) (79.3) (76.4) 84.0 55.3 (30.6) (153.8) (18.9) (16.6) 3.3

Cash from Ops. 176.1 525.2 123.7 379.1 119.4 383.5 356.8 132.1 214.3 477.2

Capital Expenditure (18.7) (13.7) (14.9) (15.6) (18.6) (20.7) (19.8) (16.7) (18.1) (13.9)

Sale of Property, Plant, and Equipment - - - - 7.1 0.0 0.0 0.0 0.0 0.0

Cash Acquisitions (141.1) (24.9) (310.3) 6.4 -(27.8) 0.0 (60.0) (35.0) 0.0

Divestitures - - - - -20.0 0.0 0.0 0.0 0.0

Sale (Purchase) of Intangible assets (12.1) (30.9) (23.5) (14.8) (9.5) (11.6) (20.6) (17.4) (19.6) (13.8)

Invest. in Marketable & Equity Securt. - - - - -0.0 0.0 0.0 0.0 0.0

Net (Inc.) Dec. in Loans Originated/Sold - - - - -0.0 0.0 0.0 0.0 0.0

Other Investing Activities 4.8 - - - -0.0 0.0 0.0 0.0 0.0

Cash from Investing (167.1) (69.5) (348.6) (24.0) (21.1) (40.1) (40.4) (94.1) (72.7) (27.7)

Short Term Debt Issued - - 87.2 - 7.3 0 0 0 0

Long-Term Debt Issued 34.6 0.5 345.8 - -0 0 0 0 0

Total Debt Issued 34.6 0.5 433.1 - 7.3 0 0 0 0 0

Short Term Debt Repaid (51.5) (41.2) - (122.7) -

Long-Term Debt Repaid (0.5) (352.3) (50.0) (0.5) (0.5) (0.5) (0.5) (0.5) (0.5) (0.5)

Total Debt Repaid (51.9) (393.5) (50.0) (123.2) (0.5) (0.5) (0.5) (0.5) (0.5) (0.5)

Issuance of Common Stock 5.0 35.1 3.4 1.1 1.5 1.5 5 3.5 1 3.5

Repurchase of Common Stock (200.0) (314.9) (185.1) - (53.0) (200.0) (260.0) 0.0 (56.0) (180.0)

(195.0) (279.8) (181.7) 1.1 (51.5) (198.5) (255.0) 3.5 (55.0) (176.5)

Total Dividends Paid - - - - -0 0 0 0 0

Special Dividend Paid - - - - -0 0 0 0 0

Other Financing Activities 1.2 2.0 (121.0) (5.3) (4.3) (2.5) (3.5) (10.0) (1.0) (5.4)

Cash from Financing (211.2) (670.8) 80.3 (127.3) (49.1) (201.5) (259.0) (7.0) (56.5) (182.4)

Foreign Exchange Rate Adj. (2.6) (21.3) (1.1) 1.7 (72.1) (5.4) (5.4) (5.4) (5.4) (5.4)

Misc. Cash Flow Adj. - - - - (4.2) 0 0 0 0 0

Net Change in Cash (204.8) (236.3) (145.7) 229.5 (27.1) 136.5 52.0 25.6 79.7 261.7

Appendix E: Insiders Holdings

Holder Name Position Market Value Ownership

Steven A. Raymund 293,641 20,061,553 0.84%

Robert M. Dutkowsky 231,459 15,813,279 0.66%

Jeffery P. Howells 60,242 4,115,733 0.17%

Nestor Cano 47,656 3,256,473 0.14%

David R. Vetter 36,748 2,510,623 0.11%

Appendix F: Logistic Centers and Headquarters, Marketing plan, Operations, and Re

Headquarter:Clearwater, FL

Signature Tech Group:Maricopa, AZTempe, AZRancho Cordova, CA

Canadian Office:Mississauga, OntarioRichmond, BCDorval, QuebecLogistic Centers:Fontana, CAFt. Worth, TXSouth Bend, INSuwanee, GASwedesboro, NJRichmond, BCMississauga, Ontario

Offices:Costa RicaMexico

Offices:AustriaBalticsBelgiumCzech RepublicDenmarkFinlandFranceGermanyHungaryIrelandItalyNetherlandsNorwayPolandPortugalRomaniaSpainSwedenSwitzerlandUnited Kingdom

North America Latin America Europe

Appendix F: Logistic Centers and Headquarters, Marketing plan, Operations, and Re

Appendix G: Product Pipeline

Notebooks, tables, Desktops, Printers &

Supplies Components

Mobile Phones, Accessories, Activations, Mobile Device

Management

Virtualization, Security, Desktop Application,

Operating System, Utilities Software

TVs, Digital Display, Network-Attached, Consumer Devices

Provides all in one supply challenge and logistic services to its vendors

Industry Standard Servers, Proprietary Servers,

Networking, Storage, Private Clouds

TECD’s Vendors:

Absolute SoftwareAcerAcronisAdaptecAdobe SystemsAllied TelesisAmer NetworksAntecAPCApricornAten TechnologyAutodeskAvayaAvocentAxiomAXISBelkinBenQBlockmasterBretfordBrocadeBrotherBuffalo TechnologyCACables To GoCanon

CastelCheck Point SoftwareCiscoComqiCorelCyber AcousticsDa-LiteDellDigi InternationalDiskeeper CorporationD-Link NetworksDoubleTake Software/Vision SolutionsDraperEaton/PowerwareEizo Nanao TechnologiesElfiq NetworksEMCEmulexEnterasys NetworksErgotronExabyteExtreme NetworksFellowesFilemakerFortinet

FortinetFoundryFujifilmFujitsuFusion-ioHauppaugeHitachiHPIBMImationInFocusInfoPrint SolutionsIntelIomegaIpcelerateIPSwitchKaspersky LabKensingtonKingstonKodakKofaxLantronixLenovoLexmarkLG ElectronicsLiebert

LiebertLifeSizeLinksysLogitechMaxellMcAfeeMicrosoftMitsubishiMoxa TechnologiesMulti-Tech SystemsNEC Display SolutionsNetgearNovellOki DataOptomaOracleOverlandPanasonicParallelsPharosPeerless AVPhilipsPhybridgePlanarPNY ElectronicsPremier Mounts

Operational Risk

currency Risk

Supply Risk

Employment Risk

Credit Risk

Other Risk

0

10

20

30

40

50

60

70

80

90

100

0 10 20 30 40 50 60 70 80 90 100

CO

NSE

QU

ENC

E

PROBABILITY

Operational Risk

Probability: Moderate

Consequence: Moderate

The lack of growth within the IT sector

causes a lack of growth within the IT

distribution sector. The lack of growth

shows a mature sector where any

company can just come and grab

market share from competitors. It is

moderately possible that another

company can easily come and take

away market share from Tech Data. If a

few customers do decide to leave for

one of Tech Data’s competitors, the

consequence would be moderate.

Currency Risk

Probability: moderate

Consequence: moderate

With an increasing strong dollar, local

competitors now have the option to

price their products at a lower level

knowing that outside competition will

not be able to keep up with their price

decrease. The probability of this

happening is moderate. Local

companies do have this option to

explore but might not pursue this option

because of the risk of their own

company loosing profits due to the

lowering of prices. The consequence

would also be moderate. The loss of

customers due to the business models of

local companies will impact tech Data’s

profits, but the impact would be

minimal. Tech Data has many

customers and a lose of a few would not

greatly impact their profits.

Supply Risk

Probability: Low

Consequence: High

Tech Data deals with several different

suppliers to obtain the products they

need to be able to sell to their

customers. A termination of contact

from one of Tech Data’s large vendors

seems unlikely given the fact that it has

rarely occurred. If large vendors do

decide to terminate a contract with

Tech Data, then the consequence will

be tremendous. Customers would not be

able to obtain these large vendors and

specific products which will bring an

outwards flow of many of Tech Data’s

loyal customers. An outward flow of

customers would significantly decrease

Tech Data’s profits.

Employment Risk:

Probability: Low

Consequence: Moderate

Many of Tech Data’s subsidiaries in

Europe are subject to collective

bargaining agreements. Employers in

Europe can go on a union strike and

cause delays in the day to day

operations of Tech Data. The

probability of a union strike seems

unlikely. The consequence would be

moderate. A slowdown of the day to

day operations would affect the

company, but the slowdown would only

last for a few days compared to the

amount of days Tech Data operates

within its lifetime.

Credit Risk:

Probability: High

Consequence: Low

With the Federal reserve recently announcing

a gradual rate hike, some of Tech Data’s

interest on its debt is bound to go up. The

speed at which the Federal Reserve will raise

rates is slow and gradual. The amount of

basis points in which interest rates will rise is

also minimal compared to the long term

average of interest rates within the United

States.

Other Risk:

Probability: Low

Consequence: High

Political tension and chaos can occur at any

moment. The chances of this happening is

very low and unlikely. If political tension and

chaos does occur in certain countries where

Tech Data does business, certain aspects of

the business will be greatly impacted. Tech

Data might have a hard time getting their

accounts receivable or moving merchandise

to certain logistic centers which would bring

high consequences to the business.

Apendix H: Risk Assesment

Appendix I: Competitor Comparison

Direct Competitor Comparison

TECD IM SNX ARW Industry

Market Cap: 2.40B 4.87B 3.66B 5.22B 446.40M

Employees: 8,900 21,700 70,000 17,000 161

QTERLY Rev Growth

(yoy): -0.05 -0.06 -0.06 0.02 0.09

Revenue (ttm): 26.24B 45.67B 13.61B 22.93B 376.44M

Gross Margin (ttm): 0.05 0.06 0.09 0.13 0.08

EBITDA (ttm): 361.85M 785.69M 473.71M 1.05B 1.78M

Operating Margin (ttm): 0.01 0.01 0.03 0.04 0.01

Net Income (ttm): 250.27M 192.91M 200.97M 455.41M N/A

EPS (ttm): 6.79 1.21 5.11 4.7 0.02

IM = Ingram Micro Inc.

SNX = SYNNEX Corp.

ARW = Arrow Electronics, Inc.

Industry = Computers Wholesale

Appendix J: TECD Key Executives (Ivan, Ben) Create a table showing the executive name, title, career history, and description. You can find all of this information on BBG if under management

Name Title TECD Highlights Description

Robert M.

Dutkowsky

Chief Executive

Officer

Chief Executive office

10/2006-Present

Awards:

Ellis island Medal of Honor

2000

Mr. Dutkowsky has been the CEO of Tech Data Corp and a member of the

Company’s Board of Directors. He oversees all aspects of the companies

worldwide It products distribution. He has more than 30 years of

experience within the IT industry. He has held senior executive positions in

sales marketing and channel distributing with software publishers like IBM,

EMC, and J.D Edwards. He is currently a board member at ADT Corp, Tech

Data Corp, and Sepaton Inc. He is also a recipient of the 2000 Ellis Island

Medal of Honor which recognizes distinguished American citizens.

Charles V.

Dannewitz

Executive Vice

President and

Chief Financial

Officer

Senior VP: Taxes

03/2000-07/2003

Senior VP: Treasury

07/2003-02/2014

Senior VP & CFO: Americas

02/2014-06/2015

Chief Financial Officer

06/2015-Present

Charles Dannewitz joined Tech Data’s team in February of 1995 as Vice

President of Taxes. In February of 2014 he was appointed Chief Financial

Officer of the Americas. In June of 2015 he was promoted to Executive Vice

President and Chief Financial Officer.Before Tech Data, Mr. Dannewitz

worked at Price Waterhouse from 1981-1995 most recently as a tax partner.

He is also a certified Public Accountant and holds a Bachelor of Science

Degree in Accounting from Illinois Wesleyan University.

John

Tonnison

Executive Vice

President,

Cloud

Computing and

Chief

Information

Officer

VP: Worldwide E-Business

2011-12/2006

Senior VP: Information

Technology 12/2006-2009

Executive VP/CIO

2009-07/2015

Executive VP/CIO/Global

Cloud Operations

07/2015-Present

John Tonnison joined Tech Data in 2001 as vice President, Worldwide E-

Business, leading the development of Tech Data’s E-Business strategy. He

was promoted to senior vice president, IT Americas in 2006 and in 2009 he

was named Executive vice president, CIO. Mr. Tonnison is now responsible

for all business systems technology, application software, and operations.

In July 2015 he was appointed to lead the strategic direction, operations,

and market executive of the company’s worldwide cloud business.

Beth E.

Simonetti

Senior Vice

President and

Chief Human

Resources

Officer

Tech Data Corp

Senior VP/ Chief Human

Resources

09/2015-Present

Beth Simonetti joined the company in September 2015. Prior to Tech Data

she serves as Senior Vice President of Human Resources at Baker & Taylor,

Inc. Previously she was an executive search consultant with Cardinal Health

for 12 years and held various leadership positions. She holds a B.S from

Miami University in Ohio and a Masters of Hospital and Health Services

Administration from the Ohio State University

Jeffrey L.

Taylor

Senior Vice

President and

Corporate

Controller

Vice President of

Corporate Accounting

Former

Vice President and

Assistant Corporate

Controller

October 2012- June 2015

Senior Vice President and

Corporate Controller

June 2015-Present

Jeffrey Taylor has served as Senior Vice President and Corporate Controller

at Tech Data since June 2015. Taylor serves as the company’s chief

accounting officer responsible for all global accounting policy, controls and

financial reporting. Previously, he served as the company’s vice President

and Assistant Corporate Controller focusing on the optimization of

processes, controls, and financial reporting of the company’s worldwide

finance teams. Prior to rejoining Tech Data in October 2015, Taylor served

in executive financial management with a value added reseller. He was also

previously employed by Deloitte & Touché from 1992 to 2003. He holds a

B.S in Accounting from San Diego State University

David R.

Vetter

Senior Vice

President,

General

Counsel and

Secretary

VP/General Counsel

06/1993-03/2003

Senior VP/ General Counsel

03/2003-06/2003

Senior

VP/Secretary/General

Counsel

06/2003-Present

David R. Vetter Joined the company in June 1993 as Vice President and

General Counsel and was later promoted to Corporate Vice President and

General Counsel in April 2000. In March 2003 he was promoted to Senior

Vice President and in July 2003 he was appointed Corporate Secretary. Prior

to joining the Company he was part of a law firm of Robbins, Gaynor &

Bronstein, and P.A from 1984 to 1993 most recently as a partner. Mr. Vetter

is a member of the Florida Bar Association and graduated from

Bucknell University with a Bachelor of Art Degrees in English and

Economics. He also holds a Juris Doctorate Degree from the University of

Florida.

Appendix K: TECD Board Members (Ivan, Ben) pull information from BBH create same type of table as previous slide, include member, career background, and tenure

Name Tenure Career Highlights Age

Chairman

Steve A

Raymund

24.8 Tech Data Corp

Operations Manager

1981-01/1984

Chief Operating Officer

1984-01/1986

Chief Executive Officer

01/1986-04/1991

Chairman/CEO

04/1991-09/2006

University of Oregon Foundation

Treasurer/Secretary

Present

59

Lead Director

Thomas I

Morgan

Unknown US Office Products Co

Chief Executive Officer

11/1997-01/1999

Value America Inc.

Chief Executive Officer

02/1999-11/1999

Enfotrust Networks

Chief Executive Officer

02/2000-03/2001

Hughes Supply Inc.

President/COO

04/2001-05/2003

Chief Executive Officer

04/2003-03/2006

Baker & Taylor Inc.

Chairman/CEO

07/2008-01/2013

Bpv Wealth Management LLC

Partner

61

Board Member

Charles E Adair

21.1

Durr-Fillauer Medical Inc.

President/COO

1981-1992

Kowaliga Capitals Inc

Partner/Mgr: Venture Capital Fund

1993-Present

Cordova Ventures

Partner/Mgr: Venture Capital Fund

12/1993-Present

68

Board Member

David M Upton

18.0 Careers:

Harvard Business School

Professor

University of Oxford

Professor

5

5

Board Member

Kathleen

Misunas

16.1 AMR Corp

Various Positions

1973-1993

AMR Corp

President & CEO: Sabre

1993-1995

Reed Elsevier PLC:

CEO; Reed Travel

1996-1998

Brandwise LLC

President/CEO

1999-06/2000

Airtreks

Chief Executive Officer

07/2001-09/2001

Essential Ideas

Principal/Founder

2001-Present

64

Appendix L: TECD Committee

TECD Committees

Audit Committee Title

Charles E. Adair Chairman

Harry J. Harczak Jr Member

Patric G Sayer Member

Tugn Wai-Hok Member

Compensation Committee Title

Kathleen Misunas Chairman

Thomas I. Morgan Member

David M. Upton Member

Governance & Nominating Title

Thomas I Morgan Chairman

Charles E. Adair Member

Harry J. Harczak Member

Kathleen Misunas Member

Patrick G. Sayer Member

Tung Wai-Hok Member

David M. Upton Member

Source: Bloomberg

Appendix M: Porter’s Five Forces Analysis (Ivan, Michael, Ben) work together to create this analysis and graph, and them explain the different opportunities

TECD Porter’s Five Force Analysis

1. SIGNIFICANT THREAT Potential of new entrants into the industry: Due to the accessibility of technology

products and the facilitated distribution methods available to a large percentage of the globe, the barriers to

entry are a weak point of TECD and the industry as a whole. That being said, Tech Data has been diversifying

their products and services in order to maintain a competitive advantage over its rivals. Unfortunately though,

these barriers will continue to decrease as the increase in demand for IT products will pose for more companies

to follow the diversification trend, creating more entrants to the industry, building a greater threat for Tech

Data.

2. HIGH THREAT Competition in the Industry: Considering Tech Data is a key player in the wholesale distribution

industry of technology products, services and solutions, but is only in possession of an estimate of 15% of the

industry’s market share draws for the conclusion of a high threat to Tech Data.

In its comparable company’s universe, it holds the smallest market capitalization, and a decrease in growth

year over year. Moving forward, competitive rivalry will continue to increase, as will the threat it poses on

Tech Data, unless it continuous to expand through acquisitions as it has in the past, but at a significantly faster

rate.

1. LOW THREAT Power of Suppliers: In previous years, the technology industry has grown tremendously, and it will

continue to experience this growth due to the fact that it is in the nature of the industry to advance daily as new

technology is constantly being developed. This increase in demand causes for suppliers to reach out to whole

sale distributors to be able to ration their products more efficiently around the globe. With a constant demand,

cannot afford to constantly fluctuate pricing on their products, creating a low threat for the bargaining power of

suppliers.

2. LOW THREAT Power of Customers: Currently, with the variety of buyers in the market, but the stagnant similar

prices globally, the bargaining power of customers poses a low threat. However, with an increase in internet

innovations, that creates awareness for lower prices, this threat will cause the wholesale IT distribution industry

to be more unattractive in the future.

3. INSIGNIFICANT THREAT Threat of substitute products: Although substitutes for the Technology industry are

constantly being created, or current devices being updated, as a result of Tech Data being a whole sale

distributor, it is able to uphold the most updated products posing an insignificant threat to Tech Data.

LEGEND

0 No Threat to Tech Data

1 Insignificant Threat to Tech Data

2 Low Threat to Tech Data

3Moderate threat to Tech Data

4Significant Threat to Tech Data

5 High Threat to Tech Data 0

1

2

3

4

5

New Entrants into theIndustry

Competiton in theIndustry

Power of SuppliersPower of Customers

Threat of SubstituteProducts

Porter's Five Forces

Appendix N: SWOT Analysis (Ben and Michael) create a SWOT analysis refer to previous presentation for template

Primary factors

SWOT ANALYSIS

Strengths

• Diversified customer base

• Strong acquisitions in North America

& Europe

• Strategic retail distribution

agreements with leading electronics

manufacturers

• Streamlining its business

Opportunities

• Increasing demand for cloud and mobility

• Potential for expansion through acquisitions

Threats

• Potential New Entrants to the Industry• Competition• Mature Sector• Low General Economic Growth• Decrease in PC sales

Weaknesses

• Declining Revenue

• Heavily relies on certain vendors

S W

TO

Appendix O: Comparable Companies and Multiples Analysis (NATALIE)

Name Market Cap EV/EBITDA P/E P/S P/B P/FCF

SHENZHEN GONGJIN ELECTRONI-A 2353.7 38.3 57.4 2.0 6.7 N/A

SHANGHAI EAST-CHINA COMPUT-A 2576.6 N/A 64.1 2.9 11.0 103.2

SHENZHEN AISIDI CO LTD-A 2856.1 N/A 208.2 0.4 4.1 N/A

ANIXTER INTERNATIONAL INC 2006.2 7.8 13.7 0.3 1.7 22.4

WPG HOLDINGS LTD 1580.2 14.0 9.4 0.1 1.1 N/A

SYNNEX TECHNOLOGY INTL CORP 1537.8 19.7 12.2 0.2 1.2 N/A

ELECTROCOMPONENTS PLC 1566.9 10.2 24.6 0.8 2.9 28.3

TSINGHUA UNISPLENDOUR CO-A 3298.2 N/A 128.9 1.7 10.5 N/A

DIGITAL CHINA HOLDINGS LTD 1251.8 14.7 23.1 0.2 1.1 N/A

SYNNEX CORP 3666.9 7.7 17.2 0.3 2.1 7.5

WUHAN P&S INFORMATION TECH-A 1096.3 N/A 203.6 6.8 10.4 N/A

INSIGHT ENTERPRISES INC 972.6 5.3 12.4 0.2 1.5 14.7

SCANSOURCE INC 893.1 9.3 14.3 0.3 1.2 632.9

ALSO HOLDING AG-REG 892.9 7.1 12.7 0.1 1.8 8.8

FPT CORP 854.5 6.5 11.1 0.4 2.3 N/A

RYOSAN CO LTD 814.9 7.0 26.8 0.4 0.8 N/A

MACNICA FUJI ELECTRONICS HOL 783.4 N/A 13.9 0.4 0.9 N/A

SIIX CORP 781.4 7.0 13.6 0.4 2.0 N/A

TIANJIN HI-TECH DEVELOPMEN-A 724.5 N/A N/A 6.5 2.7 N/A

EPLUS INC 723.7 6.1 15.7 0.6 2.4 N/A

DATATEC LTD 698.6 6.4 8.9 0.1 0.8 N/A

REDINGTON INDIA LTD 695.8 9.2 12.0 0.1 1.9 78.1

LAGERCRANTZ GROUP AB-B SHS 656.1 N/A 28.9 2.1 5.9 N/A

PC CONNECTION INC 590.5 5.6 13.0 0.2 1.5 29.9

PREMIER FARNELL PLC 551.0 7.5 8.4 0.4 5.1 5.1

CONEXIO CORP 530.0 4.9 10.0 0.2 1.9 N/A

AURORA CORP 522.2 16.4 14.6 1.2 2.2 22.0

ELEMATEC CORP 512.8 5.7 10.8 0.3 1.3 N/A

KANEMATSU ELECTRONICS LTD 509.2 3.1 15.7 1.0 1.6 N/A

ESPRINET SPA 486.6 8.9 15.5 0.2 1.6 3001.7

WT MICROELECTRONICS CO LTD 484.3 11.6 7.9 0.1 1.0 N/A

DAOU DATA CORP 474.2 N/A 20.8 0.5 1.9 N/A

SAMART CORPORATION PUB CO 432.6 10.4 14.1 0.8 2.6 N/A

KAGA ELECTRONICS CO LTD 430.7 3.8 9.8 0.2 0.8 N/A

VST HOLDINGS LTD 394.4 8.0 5.2 0.1 0.8 N/A

DAIWABO HOLDINGS CO LTD 386.7 5.2 8.7 0.1 0.8 N/A

UKC HOLDINGS CORP 355.2 N/A 9.4 0.1 0.7 N/A

PEKING UNIVERSITY RESOURCES 367.0 N/A 16.7 0.3 1.0 N/A

GSH CORP LTD 349.2 N/A 7.1 4.5 1.3 N/A

RYOYO ELECTRO CORP 326.2 N/A 32.7 0.3 0.5 N/A

CHINA INNOVATIONPAY GROUP 318.2 N/A N/A 20.1 N/A N/A

WAH LEE INDUSTRIAL CORP 312.5 12.2 8.5 0.3 1.1 10.4

RYODEN TRADING CO LTD 308.5 N/A 15.8 0.1 0.6 10.7

SANSHIN ELECTRONICS CO LTD 308.6 N/A 17.8 0.2 0.6 N/A

TACHIBANA ELETECH CO LTD 285.7 3.8 6.4 0.2 0.6 N/A

DAIWA ASSOCIATE HOLDINGS 284.5 N/A N/A 5.0 7.8 N/A

SHINKO SHOJI CO LTD 270.8 2.9 17.5 0.2 0.5 N/A

TOYO CORP 264.8 8.2 29.7 1.4 0.9 N/A

ACAL PLC 261.9 7.6 24.8 0.6 2.0 56.9

HAKUTO CO LTD 245.2 4.5 9.1 0.2 0.5 9.1

Name ROA* ROE* ROIC* Debt/Assets* Debt/Equity*

SHENZHEN GONGJIN ELECTRONI-A 5.5 12.4 7.3 21.8 47.3

SHANGHAI EAST-CHINA COMPUT-A 6.8 18.4 13.3 11.1 26.9

SHENZHEN AISIDI CO LTD-A 0.7 2.0 2.7 40.4 111.5

ANIXTER INTERNATIONAL INC 4.4 13.9 6.5 34.3 107.5

WPG HOLDINGS LTD 3.2 12.5 5.7 40.8 162.0

SYNNEX TECHNOLOGY INTL CORP 3.0 9.8 4.2 44.4 145.3

ELECTROCOMPONENTS PLC 5.0 11.9 7.7 22.0 52.2

TSINGHUA UNISPLENDOUR CO-A 3.3 8.9 4.6 30.9 73.6

DIGITAL CHINA HOLDINGS LTD 1.8 7.5 4.2 14.7 50.9

SYNNEX CORP 4.7 12.0 8.4 17.5 42.1

WUHAN P&S INFORMATION TECH-A 3.5 5.2 6.0 19.4 28.5

INSIGHT ENTERPRISES INC 4.6 10.9 11.0 5.0 12.9

SCANSOURCE INC 4.3 7.9 7.1 7.1 14.4

ALSO HOLDING AG-REG 4.1 14.7 11.0 14.9 55.4

FPT CORP 7.9 21.4 14.0 32.3 76.6

RYOSAN CO LTD 2.2 3.0 2.9 7.8 10.9

MACNICA FUJI ELECTRONICS HOL 18.0 28.8

SIIX CORP 6.4 15.6 10.2 16.8 38.6

TIANJIN HI-TECH DEVELOPMEN-A -0.6 -1.1 0.2 20.1 41.9

EPLUS INC 8.5 17.4 13.5 7.2 14.0

DATATEC LTD 2.1 7.6 7.1 16.0 58.1

REDINGTON INDIA LTD 4.9 17.6 12.5 22.3 72.3

LAGERCRANTZ GROUP AB-B SHS 10.3 25.7

PC CONNECTION INC 8.0 12.2 12.2 0.0 0.0

PREMIER FARNELL PLC 7.7 58.1 15.8 40.9 288.2

CONEXIO CORP 6.0 20.0 4.6 14.7

AURORA CORP 7.7 15.3 6.5 20.5 37.2

ELEMATEC CORP 6.2 13.3 12.7 5.7 12.7

KANEMATSU ELECTRONICS LTD 7.2 10.5 10.4 0.1 0.2

ESPRINET SPA 4.0 10.1 8.3 17.4 44.2

WT MICROELECTRONICS CO LTD 4.1 13.3 6.8 37.8 116.7

DAOU DATA CORP 0.5 9.1 4.2 19.0 81.2

SAMART CORPORATION PUB CO 4.3 19.3 8.1 53.5 177.1

KAGA ELECTRONICS CO LTD 4.2 8.9 6.5 10.7 21.9

VST HOLDINGS LTD 4.7 16.1 9.5 29.9 104.4

DAIWABO HOLDINGS CO LTD 2.4 10.1 5.4 20.1 81.6

UKC HOLDINGS CORP 3.6 8.3 5.2 22.7 52.1

PEKING UNIVERSITY RESOURCES 1.0 12.6 -1.1 52.6 651.8

GSH CORP LTD 10.4 19.9 29.8 64.2

RYOYO ELECTRO CORP 1.3 1.7

CHINA INNOVATIONPAY GROUP

WAH LEE INDUSTRIAL CORP 4.9 13.6 6.1 26.6 66.2

RYODEN TRADING CO LTD 1.9 3.7

SANSHIN ELECTRONICS CO LTD 2.0 3.1

TACHIBANA ELETECH CO LTD 5.8 10.4 6.6 1.8 3.2

DAIWA ASSOCIATE HOLDINGS -9.7 -19.1 -13.9 6.8 13.2

SHINKO SHOJI CO LTD 2.2 3.2 2.9 5.7 8.0

TOYO CORP 2.8 3.2 2.3 0.0 0.0

ACAL PLC 3.6 7.6 11.3 18.8 40.0

HAKUTO CO LTD 3.7 5.9 4.4 7.5 11.5

Name Gross Margin*

EBITDA

Margin*

Pretax

Margin* Profit Margin*

SHENZHEN GONGJIN ELECTRONI-A 12.8 6.2 5.2 4.5

SHANGHAI EAST-CHINA COMPUT-A 16.9 7.1 5.7

SHENZHEN AISIDI CO LTD-A 3.1 0.3 0.3

ANIXTER INTERNATIONAL INC 22.2 5.5 3.8 2.2

WPG HOLDINGS LTD 4.0 1.7 1.4 1.2

SYNNEX TECHNOLOGY INTL CORP 3.6 1.5 0.3 0.4

ELECTROCOMPONENTS PLC 43.3 7.5 3.2 2.2

TSINGHUA UNISPLENDOUR CO-A 3.8 1.2 0.6

DIGITAL CHINA HOLDINGS LTD 15.9 2.1 3.8 5.6

SYNNEX CORP 8.7 3.3 2.2 1.4

WUHAN P&S INFORMATION TECH-A 16.1 4.2 3.6

INSIGHT ENTERPRISES INC 13.6 3.1 2.4 1.6

SCANSOURCE INC 10.1 3.4 2.8 1.8

ALSO HOLDING AG-REG 6.7 1.7 1.0 0.7

FPT CORP 20.1 6.5 6.6 4.1

RYOSAN CO LTD 7.9 2.9 2.0 1.3

MACNICA FUJI ELECTRONICS HOL 12.9 4.6 2.8

SIIX CORP 8.5 5.3 4.1 3.3

TIANJIN HI-TECH DEVELOPMEN-A 2.8 -8.0 -8.3

EPLUS INC 21.4 8.0 7.9 4.7

DATATEC LTD 13.1 3.1 1.4 0.7

REDINGTON INDIA LTD 2.3 1.8 1.2

LAGERCRANTZ GROUP AB-B SHS 35.7 12.1 10.3 7.9

PC CONNECTION INC 13.0 3.4 3.2 1.9

PREMIER FARNELL PLC 35.2 9.7 6.1 4.3

CONEXIO CORP 16.7 3.8 3.3 2.1

AURORA CORP 39.9 8.9 11.2 9.0

ELEMATEC CORP 8.4 3.7 3.3 2.4

KANEMATSU ELECTRONICS LTD 28.0 11.1 13.7 8.9

ESPRINET SPA 5.8 1.9 1.1 0.8

WT MICROELECTRONICS CO LTD 5.7 2.3 2.1 1.8

DAOU DATA CORP 37.8 17.6 12.8 2.5

SAMART CORPORATION PUB CO 21.1 17.5 6.8 4.9

KAGA ELECTRONICS CO LTD 13.9 3.6 4.1 2.8

VST HOLDINGS LTD 4.1 1.9 1.6 1.4

DAIWABO HOLDINGS CO LTD 8.6 2.4 1.8 1.1

UKC HOLDINGS CORP 6.5 2.2 1.6

PEKING UNIVERSITY RESOURCES 6.6 -3.1 20.5 10.5

GSH CORP LTD 14.7 -1.8 113.3 115.4

RYOYO ELECTRO CORP 3.9 1.1 -3.4 -2.2

CHINA INNOVATIONPAY GROUP 35.3 -180.3 -176.7

WAH LEE INDUSTRIAL CORP 9.2 3.4 4.2 2.8

RYODEN TRADING CO LTD 10.4 2.1 1.5 0.8

SANSHIN ELECTRONICS CO LTD 6.1 1.5 1.7 1.3

TACHIBANA ELETECH CO LTD 13.3 3.5 3.7 2.5

DAIWA ASSOCIATE HOLDINGS 25.8 -4.7 5.2 3.0

SHINKO SHOJI CO LTD 7.5 2.4 1.7 1.1

TOYO CORP 39.0 7.7 2.8 0.0

ACAL PLC 31.6 8.0 3.4 2.5

HAKUTO CO LTD 14.5 4.2 2.6 1.8

Market

Cap

EV/EBITD

A P/E P/S P/B P/FCF

Gross

Margin*

EBITDA

Margin*

Pretax

Margin*

Profit

Margin* ROA* ROE* ROIC*

Debt/Asse

ts*

Debt/Equit

y*

Median* 540.5 7.0 13.0 0.2 1.3 9.1 13.0 3.4 3.2 2.0 4.2 10.7 6.7 18.8 44.2

Average* 876.9 7.0 13.6 0.3 1.5 9.5 15.6 4.5 2.4 1.2 4.1 11.4 6.9 19.9 70.3

High 3666.9 38.3 208.2 20.1 11.0 3001.7 43.3 17.6 113.3 115.4 10.4 58.1 15.8 53.5 651.8

Low 245.2 2.9 5.2 0.1 0.5 5.1 2.8 -4.7 -180.3 -176.7 -9.7 -19.1 -13.9 0.0 0.0

TECH DATA

CORP 2382.8 5.6 13.6 0.1 1.2 6.6 4.9 1.6 1.0 0.7 3.8 12.3 10.7 5.7 18.6

Current Trading Price (01/03-12016) $66.60Discount to Valuation 12%

Current Trading Price (01/03-12016) $66.60Discount to Valuation 48%

TechData Metrics 416.50

Narrow Comps EV/EBITDA

Total Enterprise Value 2,390.04

- Debt (365.14)

- Preferred & Other -

+ Cash 586.00

Equity Value 2,610.90

Shares Oustanding (millions) 35.1

Fair Value Share Price $74.38

TechData Metrics 250.30

Narrow Comps P/E

Total Enterprise Value 3,261.42

- Debt (365.14)

- Preferred & Other -

+ Cash 586.00

Equity Value 3,482.28

Shares Oustanding (millions) 35.1

Fair Value Share Price $99.21

TechData Metrics 26235.70

Narrow Comps EV/Rev

Total Enterprise Value 2,821.77

- Debt (365.14)

- Preferred & Other -

+ Cash 586.00

Equity Value 3,042.63

Shares Oustanding (millions) 35.1

Fair Value Share Price $86.68

Current Trading Price (01/03-2016) $66.60Discount to Valuation 19%

TechData Metrics 384.80

Narrow Comps P/FCF

Total Enterprise Value 2,658.02

- Debt (365.14)

- Preferred & Other -

+ Cash 586.00

Equity Value 2,878.88

Shares Oustanding (millions) 35.1

Fair Value Share Price $82.02

Current Trading Price (01/03-12016) $66.60Discount to Valuation 23%

TechData Metrics 1969.46

Narrow Comps P/BV

Total Enterprise Value 2,728.98

- Debt (365.14)

- Preferred & Other -

+ Cash 586.00

Equity Value 2,949.84

Shares Oustanding (millions) 35.1

Fair Value Share Price $84.04

Current Trading Price (01/03-2016) $66.60Discount to Valuation 26%

TechData Metrics 26235.70

Narrow Comps P/S

Total Enterprise Value 3,655.32

- Debt (365.14)

- Preferred & Other -

+ Cash 586.00

Equity Value 3,876.18

Shares Oustanding (millions) 35.1

Fair Value Share Price $110.43

Current Trading Price (01/03-2016) $66.60Discount to Valuation 65%

Appendix P: Comparable Companies and Multiples Analysis (NATALIE)

In analyzing the fundamental profitability of TECD and direct competitors, our Hold/Sell recommendation is supported for a number of reasons. First of all, Tech Data generates a profit margin that is nearly _________ in comparison with its narrow comps. We focused on liquidity and fundamentals multiples like Debt to EBITDA, and Total Debt to Asset Ratio to support our recommendation

Industry Comps EV/EBITDA

Total Enterprise Value 2,915.50

- Debt (365.14)

- Preferred & Other -

+ Cash 586.00

Equity Value 3,136.36

Shares Oustanding (millions) 35.1

Fair Value Share Price $89.35

Industry Comps P/E

Total Enterprise Value 3,253.90

- Debt (365.14)

- Preferred & Other -

+ Cash 586.00

Equity Value 3,474.76

Shares Oustanding (millions) 35.1

Fair Value Share Price $99.00

Industry Comps EV/Rev

Total Enterprise Value 5,247.14

- Debt (365.14)

- Preferred & Other -

+ Cash 586.00

Equity Value 5,468.00

Shares Oustanding (millions) 35.1

Fair Value Share Price $155.78

Industry Comps P/BV

Total Enterprise Value 2,560.30

- Debt (365.14)

- Preferred & Other -

+ Cash 586.00

Equity Value 2,781.16

Shares Oustanding (millions) 35.1

Fair Value Share Price $79.24

Industry Comps P/S

Total Enterprise Value 5,247.14

- Debt (365.14)

- Preferred & Other -

+ Cash 586.00

Equity Value 5,468.00

Shares Oustanding (millions) 35.1

Fair Value Share Price $155.78

Industry Comps P/FCF

Total Enterprise Value 3,501.68

- Debt (365.14)

- Preferred & Other -

+ Cash 586.00

Equity Value 3,722.54

Shares Oustanding (millions) 35.1

Fair Value Share Price $106.06

Current Trading Price (01/03-12016) $66.60Discount to Valuation 34%%

Current Trading Price (01/03-12016) $66.60Discount to Valuation 48%

Current Trading Price (01/03-12016) $66.60Discount to Valuation 134%

Current Trading Price (01/03-12016) $66.60Discount to Valuation 134%

Current Trading Price (01/03-12016) $66.60Discount to Valuation 59%

Current Trading Price (01/03-12016) $66.60Discount to Valuation 18%

A competitor comparison based on narrow and industry multiple does not predominantly signify Tech Data Valuation in any way. Therefore, in tangent with our valuation methodologies, we believe in our Hold/Sell recommendation on TECD

Appendix Q: Treasury Stock Method – Diluted Shares Outstanding (Natalie)

Treasury Stock Method

Current Share Price $65.11

Number of Basic Shares Outstanding 36,631,255

Number of Outstanding Options (In The Money) 42,110

Average Option Strike Price $33.97

Total Option Proceeds $1,430,476.70

Treasury Stock Method Shares Repurchased 21970

Additional Shares Outstanding 20,140

Total Diluted Shares Outstanding 36,651,395

Source: Tech Data's 10k

In order to calculate Tech Data’s fully diluted shares we decided to applied the Treasury Stock Method. By using TECD’s latest 10-K, and taking into account the total amount of outstanding in-the-money options, we were able to arrive at their Fully Diluted Shares Outstanding

Appendix R: Debt Structure and Schedule (Natalie)

Debt Schedule

(in US$ millions) Actuals Estimates

Period Ending January 31 2013A 2014A 2015A 2016E 2017E 2018E 2019E 2020E

Cash available to pay down debt

Cash at beginning of year 543.0 515.9 302.4 354.3 379.9

Cash flow before debt paydown (27.1) 136.5 52.0 25.6 79.7

Total cash available to pay down debt 515.9 652.4 354.3 379.9 459.6

Short term borrowings / revolver

Short term borrowings (beginning of year) 13.3 13.3 13.3 13.3 13.3

Mandatory issuances / (retirements) 0.0 0.0 0.0 0.0 0.0

Non-mandatory issuances / (retirements) 0.0 0.0 0.0 0.0 0.0

Short term borrowings (end of year) 13.3 13.3 13.3 13.3 13.3 13.3

Short term interest expense 0.0 0.0 0.0 0.0 0.0

Short term interest rate

Long term debt due within one year

Long term debt due within one year (beginning of year) 16.7 16.7 16.7 16.7 16.7

Mandatory issuances / (retirements) 0.0 0.0 0.0 0.0 0.0

Non-mandatory issuances / (retirements) 0.0 0.0 0.0 0.0 0.0

Long term debt due within one year (end of year) 16.7 16.7 16.7 16.7 16.7 16.7

Interest expense 0.9 0.9 0.9 0.9 0.9

Interest rate 5.1% 5.1% 5.1% 5.1% 5.1%

Obligations under capital leases due within one year

Obligations under capital leases due within one year (beginning of year) 0.0 0.0 0.0 0.0 0.0

Mandatory issuances / (retirements) 0.0 0.0 0.0 0.0 0.0

Non-mandatory issuances / (retirements) 0.0 0.0 0.0 0.0 0.0

Obligations under capital leases due within one year (end of year) 0.0 0.0 0.0 0.0 0.0

Interest expense 0.0 0.0 0.0 0.0 0.0

Interest rate

Long term debt

Long term debt (beginning of year) 353.1 353.1 3.1 3.1 3.1

Mandatory issuances / (retirements) 0.0 (350.0) 0.0 0.0 0.0

Non-mandatory issuances / (retirements) 0.0 0.0 0.0 0.0 0.0

Long term debt (end of year) 353.1 353.1 3.1 3.1 3.1 3.1

Interest expense 13.2 6.8 0.0 0.0 0.0

Interest rate 3.8% 3.8%

Long term obligations under capital leases

Long term obligations under capital leases (beginning of year) 4.2 0.0 0.0 0.0 0.0 0.0

Mandatory issuances / (retirements) (4.2) 0.0 0.0 0.0 0.0 0.0

Non-mandatory issuances / (retirements) 0.0 0.0 0.0 0.0 0.0

Long term obligations under capital leases (end of year) 0.0 0.0 0.0 0.0 0.0 0.0

Interest expense 0.0 0.0 0.0 0.0 0.0

Interest rate 0.0% 0.0% 0.0% 0.0% 0.0%

Total issuances / (retirements) 0.0 (350.0) 0.0 0.0 0.0

Total interest expense 14.1 7.6 0.9 0.9 0.9

Cash at the end of the year 543.0 515.9 302.4 354.3 379.9 459.6

Interest income

Appendix S: Discounted Cash Flow Analysis (Natalie)

TechData Corp. Discounted Cashflow Model - Valuation

Assumptions Model Summary

Projected Fiscal Years Ending January 31

10 Year US Treasury2.23%

Forecast Summary 2015 2016 2017 2018 2019 2020

Expected market return10.0%

Revenues 27,671 27,062 27,830 28,621 29,434 30,270

Market risk premium

7.8% Revenue Growth Rate 3.2% -2.2% 2.8% 2.8% 2.8% 2.8%

Beta1.01

EBITDA 280 254 262 269 277 285

CAPM cost of equity10.1%

EBITDA Growth Rate 13.9% -9.1% 2.8% 2.8% 2.8% 2.8%

Cost of debt2.2%

EBITDA Margin 1.0% 0.9% 0.9% 0.9% 0.9% 0.9%

Tax Rate26.8%

After tax cost of debt

2.3%

Target gearing12.5%

WACC

9.09%

Perpetual growth of firm cash flows (post year 5)

1.90%

TechData Corp. Valuation Model - Discounted Cash Flow ValuationValuation

($ in millions of U.S. dollars except per share amounts) Projected Fiscal Years Ending January 31

Free Cash Flows 2015 2016 2017 2018 2019 2020

EBIT * (1-tax rate) 193 192 186 190 195 190

Depreciation And Amortization (19) (10) (12) (13) (13) (10)

Capex (19) (21) (20) (17) (18) (14)

Net change in working capital (147) 66 292 129 114 185

Free cash flows to the firm (FCFF) 9 228 446 289 278 352

Years to Discount 1.00 2.00 3.00 4.00 5.00 6.00

Cost of Capital 9.1% 9.1% 9.1% 9.1% 9.1% 9.1%

Discount Factor 0.92 0.84 0.77 0.71 0.65 0.59

PV Free cash flows to the firm (FCFF) 8 191 343 204 180 209

FCFF Fair Value Perpetuity Method FCFF Fair Value Multiple Method

EBITDA Multiple 5.6x

Grown TV FCFF 2,894 Last forecast EBITDA 285

Terminal Value 2,962 Terminal Value 1,593

Present Value of Terminal Value 1,758 Present Value of Terminal Value 946

Terminal Value as % of Total Value 60.7% Terminal Value as % of Total Value 45.4%

Present Value of Forecast FCF 1,136 Present Value of Forecast FCF 1,136

Forecast Period as % of Total Value 39.3% Forecast Period as % of Total Value 54.6%

Enterprise Value 2,894 Enterprise Value 2,082

- Debt (hardcode as of valuation date) (365.1) - Debt (hardcode as of valuation date) (365.1)

+ Cash (hardcode as of valuation date) 586.0 + Cash (hardcode as of valuation date) 586.0

Net Debt (220.9) Net Debt (220.9)

Equity Value (Market Cap) 3,115 Equity Value (Market Cap) 2,303

Shares outstanding 35.1 Shares outstanding 35.1

Fair value share price 88.74 Fair value share price 65.60