Tech Data (TECD)

NOTE 9 — RESTRUCTURING PROGRAM

In May 2005, the Company announced a formal restructuring program to better align the European operating cost structure with the current business environment. The initiatives related to the restructuring program were completed during the third quarter of fiscal 2007. In connection with this restructuring program, the Company recorded charges for workforce reductions and the optimization of facilities and systems. The restructuring charges were incurred pursuant to formal plans developed by management and are accounted for in accordance with the guidance set forth in SFAS No. 146, “Accounting for Costs Associated with Exit or Disposal Activities.” The costs related to this restructuring program are reflected in the Consolidated Statement of Operations as “restructuring charges”, which is a component of operating income. The accrued restructuring charges are included in “accrued expenses and other liabilities” in the Consolidated Balance Sheet.

Summarized below is the activity related to accruals for the restructuring program recorded during the three months ended April 30, 2007:

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NOTE 7 — RESTRUCTURING PROGRAM

In May 2005, the Company announced a formal restructuring program to better align the European operating cost structure with the current business environment. The initiatives related to the restructuring program were completed during the third quarter of fiscal 2007. In connection with this restructuring program, the Company recorded charges for workforce reductions and the optimization of facilities and systems. During the year ended January 31, 2007, the Company recorded $23.8 million related to the restructuring program, comprised of $20.0 million for workforce reductions and $3.8 million for facility costs. Through January 31, 2007 (since inception of the program), the Company has incurred $54.7 million related to the restructuring program, comprised of $38.9 million for workforce reductions and $15.8 million for facility costs. Cash payments related to the restructuring program have been funded by operating cash flows and the Company’s credit facilities.

The restructuring charges were incurred pursuant to formal plans developed by management and are accounted for in accordance with the guidance set forth in SFAS No. 146, “Accounting for Costs Associated with Exit or Disposal Activities.” The costs related to this restructuring program, other than the external consulting costs, are reflected in the Consolidated Statement of Operations as “restructuring charges”, which is a component of operating income. The accrued restructuring charges are included in “accrued expenses and other liabilities” in the Consolidated Balance Sheet. In addition, during the years ended January 31, 2007 and 2006, the Company incurred $8.6 million and $9.6 million, respectively, of external consulting costs related to the restructuring program. These consulting costs are included in “selling, general and administrative expenses” in the Consolidated Statement of Operations.

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Summarized below is the activity related to accruals for restructuring charges recorded during the years ended January 31, 2007 and 2006:

NOTE 9 — RESTRUCTURING PROGRAM

In May 2005, the Company announced a formal restructuring program to better align the EMEA operating cost structure with the current business environment. In connection with this restructuring program, the Company continues to record charges for workforce reductions and the optimization of facilities and systems. Excluding consulting costs, the current estimate of total charges associated with the restructuring program is in the range of $55.0 to $57.0 million, compared to the original estimate of $40.0 to $50.0 million. The increase in the total estimated restructuring costs is the result of an increase in the estimated cost of headcount reductions and certain asset write-offs. The $55.0 to $57.0 million is comprised of $40.0 to $41.0 million related to workforce reductions and $15.0 to $16.0 million related to the optimization of facilities and systems. For the six months ended July 31, 2006, the Company recorded $17.6 million related to the restructuring program, comprised of $15.2 million for workforce reductions and $2.4 million for facility costs. Through July 31, 2006, the Company has incurred $48.6 million related to the restructuring program, comprised of $34.1 million for workforce reductions and $14.5 million for facility costs. The remaining charges are expected to be incurred during the third quarter of fiscal 2007. Costs related to the restructuring program have been funded by operating cash flows and the Company’s credit facilities. The recognition of restructuring charges requires the Company’s management to make judgments and estimates regarding the nature, timing, and amount of costs associated with the restructuring plan. Although the Company believes its estimates are appropriate and reasonable based on available information, actual results could differ from those estimates.

The restructuring charges are incurred pursuant to formal plans developed by management and are accounted for in accordance with the guidance set forth in SFAS No. 146, “Accounting for Costs Associated with Exit or Disposal Activities.” The costs related to this restructuring program, other than the external consulting costs, are reflected in the Consolidated Statement of Operations as “restructuring charges”, which is a component of operating income. The accrued restructuring charges are included in “accrued expenses and other liabilities” in the Consolidated Balance Sheet. In addition, during the six months ended July 31, 2006, the Company incurred $5.8 million of external consulting costs related to the restructuring program. These consulting costs are included in “selling, general and administrative expenses” in the Consolidated Statement of Operations.

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Summarized below is the activity related to accruals for the restructuring program recorded during the six months ended July 31, 2006:

NOTE 9 — RESTRUCTURING PROGRAM

In May 2005, the Company announced a formal restructuring program to better align the EMEA operating cost structure with the current business environment. In connection with this restructuring program, the Company continues to record charges for workforce reductions and the optimization of facilities and systems. Excluding consulting costs, the current estimate of total charges associated with the restructuring program are estimated to be in the range of $50.0 to $55.0 million, compared to the original estimate of $40.0 to $50.0 million. The increase in the total estimated restructuring costs is the result of an increase in the estimated cost of headcount reductions and certain asset write-offs. The $50.0 to $55.0 million is comprised of $35.0 to $37.0 million related to workforce reductions and $15.0 to $18.0 million related to the optimization of facilities and systems. For the quarter ended April 30, 2006, the Company recorded $6.5 million related to the restructuring program, comprised of $4.9 million for workforce reductions and $1.6 million for facility costs. Through April 30, 2006, the Company has incurred $37.4 million related to the restructuring program, comprised of $23.8 million for workforce reductions and $13.6 million for facility costs. The remaining charges are expected to be incurred over the next two quarters and may vary each quarter depending upon the timing of certain actions. Costs related to the restructuring program have been funded by operating cash flows and the Company’s credit facilities. The recognition of restructuring charges requires the Company’s management to make judgments and estimates regarding the nature, timing, and amount of costs associated with the restructuring plan. Although the Company believes its estimates are appropriate and reasonable based on available information, actual results could differ from those estimates.

The restructuring charges are incurred pursuant to formal plans developed by management and are accounted for in accordance with the guidance set forth in SFAS No. 146, “Accounting for Costs Associated with Exit or Disposal Activities.” The costs related to this restructuring program, other than the external consulting costs, are reflected in the Consolidated Statement of Operations as “restructuring charges”, which is a component of operating income. The accrued restructuring charges are included in “accrued expenses and other liabilities” in the Consolidated Balance Sheet. In addition, during the three months ended April 30, 2006, the Company incurred $4.1 million of external consulting costs related to the restructuring program. These consulting costs are included in “selling, general and administrative expenses” in the Consolidated Statement of Operations.

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Summarized below is the activity related to accruals for the restructuring program recorded during the quarter ended April 30, 2006:

NOTE 6 — RESTRUCTURING PROGRAM

In May 2005, the Company announced a formal restructuring program to better align the EMEA operating cost structure with the current business environment. In connection with this restructuring program, the Company has recorded and will continue to record charges for workforce reductions and the optimization of facilities and systems.

Excluding consulting costs, total cash charges associated with the restructuring program are estimated to be in the range of $40.0 to $50.0 million, comprised of $24.0 to $30.0 million related to workforce reductions and $16.0 to $20.0 million related to the optimization of facilities and systems. Through January 31, 2006, the Company has incurred $30.9 million related to the restructuring program, comprised of approximately $18.9 million related to workforce reductions and approximately $12.0 million for facility costs. The remaining charges are expected to be incurred over the next three quarters and may vary each quarter depending upon the timing of certain actions. Costs related to the restructuring program have been funded by operating cash flows and the Company’s credit facilities. The recognition of restructuring charges requires the Company’s management to make judgments and estimates regarding the nature, timing, and amount of costs associated with the restructuring plan. Although the Company believes its estimates are appropriate and reasonable based on available information, actual results could differ from those estimates.

The restructuring charges are incurred pursuant to formal plans developed by management and are accounted for in accordance with the guidance set forth in SFAS No. 146, “Accounting for Costs Associated with Exit or Disposal Activities.” The costs related to this restructuring program, other than the external consulting costs, are reflected in the Consolidated Statement of Operations as “restructuring charges”, which is a component of operating income. The accrued restructuring charges are included in “accrued expenses and other liabilities” in the Consolidated Balance Sheet. In addition, during the nine months ended January 31, 2006, the Company incurred approximately $9.6 million of external consulting costs related to the restructuring program. These consulting costs are included in “selling, general and administrative expenses” in the Consolidated Statement of Operations.

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Summarized below is the activity related to accruals for restructuring charges recorded during the year ended January 31, 2006:

NOTE 8— RESTRUCTURING PROGRAM

In May 2005, the Company announced a formal restructuring program to better align the EMEA operating cost structure with the current business environment. In connection with this restructuring program, the Company has recorded and will record charges for workforce reductions and the optimization of facilities and systems.

Excluding consulting costs, total cash charges associated with the restructuring program are estimated to be in the range of $40.0 to $50.0 million, comprised of $24.0 to $30.0 million related to workforce reductions and $16.0 to $20.0 million related to the optimization of facilities and systems. Through October 31, 2005, the Company has incurred $24.1 million related to the restructuring program, comprised of approximately $14.9 million related to workforce reductions and approximately $9.2 million for facility costs. These actions are expected to generate annualized savings aggregating approximately the same amount as the total restructuring costs

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incurred to date. The remaining charges are expected to be incurred over the next three to four quarters with all U.S. dollar amounts being approximated using an exchange rate of .8475 euros per U.S. dollar. Costs recorded in each quarter may vary depending upon the timing of certain actions. Future actions related to the restructuring program are targeted to generate annualized savings in the same range of the estimated charges. The recognition of restructuring charges requires the Company’s management to make judgments and estimates regarding the nature, timing, and amount of costs associated with the restructuring plan. Although the Company believes its estimates are appropriate and reasonable based on available information, actual results could differ from those estimates.

The restructuring charges are incurred pursuant to formal plans developed by management and are accounted for in accordance with the guidance set forth in SFAS No. 146, “Accounting for Costs Associated with Exit or Disposal Activities.” The costs related to this restructuring program are reflected in the Consolidated Statement of Operations as “restructuring charges”, which is a component of operating income. The accrued restructuring charges are included in “accrued expenses and other liabilities” in the Consolidated Balance Sheet. In addition, during the nine months ended October 31, 2005, the Company incurred approximately $5.3 million of external consulting costs related to the restructuring program. These consulting costs are included in “selling, general and administrative expenses” in the Consolidated Statement of Operations.

Summarized below is the activity related to accruals for restructuring charges recorded through October 31, 2005:

NOTE 8— RESTRUCTURING PROGRAM

In May 2005, the Company announced a formal restructuring program to better align the EMEA operating cost structure with the current business environment. In connection with this restructuring program, the Company will record charges for workforce reductions and the optimization of facilities and systems.

Excluding consulting costs, total cash charges associated with the restructuring program are estimated to be in the range of $40.0 to $50.0 million, comprised of $24.0 to $30.0 million related to workforce reductions and $16.0 to $20.0 million related to the optimization of facilities and systems. Through July 31, 2005, the Company has incurred $19.3 million related to the restructuring program, comprised of approximately $10.6 million related to workforce reductions and approximately $8.7 million for facility costs. These actions are expected to generate annualized savings of approximately the same amount. The remaining charges are expected to be incurred over the next four to five quarters with all U.S. dollar amounts being approximated using an exchange rate of .8333 euros per U.S. dollar. Costs recorded in each quarter may vary depending upon the timing of certain actions. Future actions related to the restructuring program are targeted to generate annualized savings in the same range of the estimated charges. The recognition of restructuring charges requires the Company’s management to make judgments and estimates regarding the nature, timing, and amount of costs associated with the restructuring plan. Although the Company believes its estimates are appropriate and reasonable based on available information, actual results could differ from those estimates.

The restructuring charges are incurred pursuant to formal plans developed by management and are accounted for in accordance with the guidance set forth in SFAS No. 146, “Accounting for Costs Associated with Exit or Disposal Activities”. The costs related to this restructuring program are reflected in the Consolidated Statement of Operations as “restructuring charges”, which is a component of operating income. The accrued restructuring charges are included in “accrued expenses and other liabilities” in the Consolidated Balance Sheet. In addition, during the quarter ended July 31, 2005, the Company incurred approximately $2.1 million of external consulting costs related to the restructuring program. These consulting costs are included as “selling, general and administrative expenses” in the Consolidated Statement of Operations.

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Summarized below is the activity related to accruals for restructuring charges recorded during the quarter ended July 31, 2005:

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TECH DATA CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)