snx-ex991


	Successor
	July 31, 2021		January 31, 2021
ASSETS	(Unaudited)
Current assets:
Cash and cash equivalents	$	307,540	$	832,976
Accounts receivable, net of allowances for credit losses of $74,003 and $86,913	5,418,592		6,267,052
Inventories	2,956,048		2,772,302
Prepaid expenses and other assets	367,523		392,145
Total current assets	9,049,703		10,264,475
Property and equipment, net	156,776		162,032
Goodwill	1,531,577		1,543,355
Intangible assets, net	2,882,771		2,928,996
Other assets, net	533,606		570,536
Total assets	$	14,154,433	$	15,469,394

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	6,497,364	$	7,950,394
Accrued expenses and other liabilities	1,106,632		1,202,608
Revolving credit loans and current maturities of long-term debt, net	419,395		132,120
Total current liabilities	8,023,391		9,285,122
Long-term debt, less current maturities	2,112,019		2,193,522
Other long-term liabilities	964,720		953,477
Total liabilities	11,100,130		12,432,121
Commitments and contingencies (Note 10)
Shareholders’ equity:
Common stock, par value $.01; 1,000 shares authorized; 100 shares issued at July 31, 2021 and January 31, 2021	—		—
Additional paid-in capital	2,758,093		2,755,227
Retained earnings	29,005		6,518
Accumulated other comprehensive income	267,205		275,528
Total shareholders' equity	3,054,303		3,037,273
Total liabilities and shareholders' equity	$	14,154,433	$	15,469,394

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


	Successor				Predecessor		Successor				Predecessor
	Three months ended July 31, 2021		One month ended July 31, 2020		Two months ended June 30, 2020		Six months ended July 31, 2021		One month ended July 31, 2020		Five months ended June 30, 2020
Net sales	$	9,236,945	$	3,044,951	$	5,184,382	$	18,598,304	$	3,044,951	$	13,359,556
Cost of products sold	8,657,844		2,855,997		4,875,209		17,474,803		2,855,997		12,518,724
Gross profit	579,101		188,954		309,173		1,123,501		188,954		840,832
Operating expenses:
Selling, general and administrative expenses	452,093		140,588		270,109		919,806		140,588		697,973
Acquisition, integration and restructuring expenses	14,282		164,742		12,487		51,021		164,742		30,167
Legal settlements and other litigation, net	5,095		—		41,157		3,352		—		41,157
	471,470		305,330		323,753		974,179		305,330		769,297
Operating income (loss)	107,631		(116,376)		(14,580)		149,322		(116,376)		71,535
Interest expense	40,745		12,332		12,674		79,990		12,332		29,708
Other expense (income), net	3,700		327		(562)		6,476		327		8,386
Income (loss) before income taxes	63,186		(129,035)		(26,692)		62,856		(129,035)		33,441
Provision (benefit) for income taxes	37,579		(20,990)		7,127		40,369		(20,990)		19,195
Net income (loss)	$	25,607	$	(108,045)	$	(33,819)	$	22,487	$	(108,045)	$	14,246

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


	Successor				Predecessor		Successor				Predecessor
	Three months ended July 31, 2021		One month ended July 31, 2020		Two months ended June 30, 2020		Six months ended July 31, 2021		One month ended July 31, 2020		Five months ended June 30, 2020
Net income (loss)	$	25,607	$	(108,045)	$	(33,819)	$	22,487	$	(108,045)	$	14,246
Other comprehensive (loss) income:
Foreign currency translation adjustment, net of tax	(42,210)		114,012		43,060		(17,251)		114,012		(13,487)
Unrealized (loss) gain on cash flow hedges, net of tax	(9,076)		(5,044)		—		8,928		(5,044)		(15)
Other comprehensive (loss) income	(51,286)		108,968		43,060		(8,323)		108,968		(13,502)
Total comprehensive (loss) income	$	(25,679)	$	923	$	9,241	$	14,164	$	923	$	744

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


	Successor
	Common stock			Additional paid-in capital		Retained earnings		Accumulated other comprehensive income (loss)		Total shareholders' equity
	Shares	Amount		Additional paid-in capital		Retained earnings		Accumulated other comprehensive income (loss)		Total shareholders' equity
Balance at January 31, 2021	—	$	—	$	2,755,227	$	6,518	$	275,528	$	3,037,273
Stock-based compensation expense	—	—		1,367		—		—		1,367
Total other comprehensive income	—	—		—		—		42,963		42,963
Net loss	—	—		—		(3,120)		—		(3,120)
Balance at April 30, 2021	—	$	—	$	2,756,594	$	3,398	$	318,491	$	3,078,483
Stock-based compensation expense	—	—		1,499		—		—		1,499
Total other comprehensive loss	—	—		—		—		(51,286)		(51,286)
Net income	—	—		—		25,607		—		25,607
Balance at July 31, 2021	—	$	—	$	2,758,093	$	29,005	$	267,205	$	3,054,303


	Successor
	Common stock			Additional paid-in capital		Treasury stock		Retained earnings		Accumulated other comprehensive (loss) income		Total shareholders' equity
	Shares	Amount		Additional paid-in capital		Treasury stock		Retained earnings		Accumulated other comprehensive (loss) income		Total shareholders' equity
Balance at June 30, 2020	59,246	$	89	$	839,416	$	(1,185,039)	$	3,475,260	$	(12,038)	$	3,117,688
Purchase accounting adjustments related to Apollo Merger	(59,246)	(89)		(839,416)		1,185,039		(3,475,260)		12,038		(3,117,688)
Equity contribution from parent	—	—		3,677,105		—		—		—		3,677,105
Total other comprehensive income	—	—		—		—		—		108,968		108,968
Net loss	—	—		—		—		(108,045)		—		(108,045)
Balance at July 31, 2020	—	$	—	$	3,677,105	$	—	$	(108,045)	$	108,968	$	3,678,028



	Predecessor
	Common stock			Additional paid-in capital		Treasury stock		Retained earnings		Accumulated other comprehensive income (loss)		Total shareholders' equity
	Shares	Amount		Additional paid-in capital		Treasury stock		Retained earnings		Accumulated other comprehensive income (loss)		Total shareholders' equity
Balance at January 31, 2020	59,246	$	89	$	855,020	$	(1,198,132)	$	3,461,014	$	1,464	$	3,119,455
Issuance of treasury stock for benefit plan and equity-based awards exercised	—	—		(22,445)		11,671		—		—		(10,774)
Stock-based compensation expense	—	—		6,307		—		—		—		6,307
Total other comprehensive loss	—	—		—		—		—		(56,562)		(56,562)
Net income	—	—		—		—		48,065		—		48,065
Balance at April 30, 2020	59,246	$	89	$	838,882	$	(1,186,461)	$	3,509,079	$	(55,098)	$	3,106,491
Issuance of treasury stock for benefit plan and equity-based awards exercised	—	—		(2,326)		1,422		—		—		(904)
Stock-based compensation expense	—	—		2,860		—		—		—		2,860
Total other comprehensive income	—	—		—		—		—		43,060		43,060
Net loss	—	—		—		—		(33,819)		—		(33,819)
Balance at June 30, 2020	59,246	$	89	$	839,416	$	(1,185,039)	$	3,475,260	$	(12,038)	$	3,117,688

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


	Successor				Predecessor
	Six months ended July 31, 2021		One month ended July 31, 2020		Five months ended June 30, 2020
Cash flows from operating activities:
Cash received from customers	$	25,090,555	$	4,166,777	$	18,324,636
Cash paid to vendors and employees	(25,617,914)		(4,042,224)		(17,930,110)
Interest paid, net	(62,462)		(21,861)		(35,654)
Income taxes paid	(36,660)		(7,883)		(26,207)
Net cash (used in) provided by operating activities	(626,481)		94,809		332,665
Cash flows from investing activities:
Acquisition of businesses, net of cash acquired	(14,101)		(5,228,100)		—
Expenditures for property and equipment	(14,308)		(2,379)		(12,485)
Software and software development costs	(43,405)		(11,038)		(24,369)
Proceeds from settlement of net investment hedges	—		—		53,421
Other	—		204		(198)
Net cash (used in) provided by investing activities	(71,814)		(5,241,313)		16,369
Cash flows from financing activities:
Contribution from parent	—		3,677,105		—
Proceeds from issuance of long-term debt	—		2,030,625		—
Principal payments on long-term debt	(25,246)		(1,114,947)		(6,169)
Cash paid for debt issuance costs	—		(118,389)		—
Net borrowings on revolving credit loans	220,257		5,306		1,604
Payments for employee tax withholdings on equity awards	—		—		(11,678)
Other	—		—		(562)
Net cash provided by (used in) financing activities	195,011		4,479,700		(16,805)
Effect of exchange rate changes on cash and cash equivalents	(22,152)		52,600		18,610
Net (decrease) increase in cash and cash equivalents	(525,436)		(614,204)		350,839
Cash and cash equivalents at beginning of period	832,976		1,192,205		841,366
Cash and cash equivalents at end of period	$	307,540	$	578,001	$	1,192,205
Reconciliation of net income (loss) to net cash (used in) provided by operating activities:
Net income (loss)	$	22,487	$	(108,045)	$	14,246
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:
Gain on bargain purchase	(275)		—		—
Depreciation and amortization	124,256		19,726		71,180
Provision for credit losses on accounts receivable	(1,038)		(912)		17,435
Stock-based compensation expense	2,866		—		9,167
Accretion of debt discount and debt issuance costs	16,144		2,563		1,411
Deferred income taxes	23,280		(1,110)		11,898
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable	810,938		45,480		715,966
Inventories	(201,619)		133,003		151,545
Prepaid expenses and other assets	79,170		12,494		(46,804)
Accounts payable	(1,391,668)		42,937		(632,776)
Accrued expenses and other liabilities	(111,022)		(51,327)		19,397
Total adjustments	(648,968)		202,854		318,419
Net cash (used in) provided by operating activities	$	(626,481)	$	94,809	$	332,665

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

Tiger Parent, LLC was formed on November 6, 2019 and was converted to Tiger Parent (AP) Corporation on June 12, 2020. Tiger Parent (AP) Corporation, through its wholly-owned subsidiaries including Tiger Midco, is the parent company of Tech Data Corporation subsequent to the Apollo Merger. The consolidated financial statements include the consolidated results of Tech Data Corporation for periods prior to the Apollo Merger on June 30, 2020 (the “predecessor period”) and the consolidated results of Tiger Parent (AP) Corporation for periods subsequent to the Apollo Merger (the “successor period”). References to the “Company” indicate Tiger Parent (AP) Corporation and its subsidiaries for periods subsequent to the date of the Apollo Merger and Tech Data Corporation and its subsidiaries for periods prior to the Apollo Merger.

The Company is one of the world’s largest IT distribution and solutions companies. The Company serves a critical role in the center of the IT ecosystem, bringing products from the world’s leading technology vendors to market, as well as helping customers create solutions best suited to maximize business outcomes for their end-user customers. The Company’s customers include value-added resellers, direct marketers, retailers, corporate resellers and managed service providers who support the diverse technology needs of end users. The Company manages its business in three geographic regions: the Americas, Europe and Asia-Pacific.

On March 22, 2021, the Company entered into an Agreement and Plan of Merger (the “SYNNEX Merger Agreement") with SYNNEX Corporation ("SYNNEX") and its affiliates. On September 1, 2021, pursuant to the SYNNEX Merger Agreement, and upon the terms and subject to the conditions described therein, the affiliates of SYNNEX acquired all the outstanding shares of the Company's common stock for $1,610,000,000 in cash, in the aggregate and 44,000,000 total shares of common stock of SYNNEX (the "SYNNEX Merger"). See Note 11 – Subsequent Events for further discussion.

The consolidated financial statements include the accounts of Tiger Parent (AP) Corporation and its subsidiaries during the successor period and Tech Data Corporation and its subsidiaries during the predecessor period. All significant intercompany accounts and transactions have been eliminated in consolidation. The Company operates on a fiscal year that ends on January 31.

The consolidated financial statements have been prepared by the Company, without audit, in conformity with generally accepted accounting principles in the U.S. (“GAAP”). These principles require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

The Apollo Merger was accounted for as a business combination using the purchase method of accounting. As a result of the application of purchase accounting, the consolidated financial statements for the successor period are not comparable to those of the predecessor period.

In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the consolidated financial position of the Company as of July 31, 2021,

and its consolidated statements of operations, comprehensive (loss) income, shareholders' equity and cash flows for all periods presented.

The Company’s quarterly operating results have fluctuated significantly in the past and will likely continue to do so in the future as a result of currency fluctuations and seasonal variations in the demand for the products and services it sells. Historical seasonal variations have included an increase in European demand during the Company’s fiscal fourth quarter. The seasonal trend in Europe typically results in greater operating leverage, and therefore, lower selling, general and administrative expenses as a percentage of net sales in the region during the Company's fourth quarter.

Furthermore, in March 2020, the World Health Organization declared the outbreak of the 2019 novel coronavirus ("COVID-19") a pandemic. The global impact of the COVID-19 pandemic has had a negative effect on the global economy, disrupting the financial markets and creating increasing volatility, impacting customer demand and impeding global supply chains. Despite improvements in the

global economy since the onset of the pandemic, the resurgence of the Delta variant and other mutations bring uncertainty to continued economic recovery. As a result, the Company cannot at this time accurately predict what effects these conditions will have on its operations and financial condition, including due to the uncertainties relating to the severity and duration of the pandemic, the effect on its customers and customer demand and the length of the restrictions and closures imposed by various governments. Therefore, the results of operations for the three and six months ended July 31, 2021 are not necessarily indicative of the results that can be expected for the entire fiscal year ended January 31, 2022.

The Company’s revenues primarily result from the sale of various technology products and services. The Company recognizes revenue as control of products is transferred to customers, which generally happens at the point of shipment. Products sold by the Company are delivered via shipment from the Company’s facilities, dropshipment directly from the vendor, or by electronic delivery of keys for software products. In relation to product support, supply chain management and other services performed by the Company, revenue is recognized over time as the services are performed. Service revenues and related contract liabilities were not material for the periods presented.

The Company has contracts with certain customers where the Company’s performance obligation is to arrange for the products or services to be provided by another party. In these arrangements, as the Company assumes an agency relationship in the transaction, revenue is recognized in the amount of the net fee associated with serving as an agent. These arrangements primarily relate to certain fulfillment contracts, as well as sales of software services and extended warranty services.

The Company allows its customers to exchange product or return for credit subject to certain limitations. A liability is recorded at the time of sale for estimated product returns based upon historical experience and an asset is recognized for the amount expected to be recorded in inventory upon product return. The Company also provides volume rebates and other discounts to certain customers which are considered variable consideration. A provision for customer rebates and other discounts is recorded as a reduction of revenue at the time of sale based on an evaluation of the contract terms and historical experience.

The Company considers shipping and handling activities as costs to fulfill the sales of products. Shipping revenue is included in net sales when control of the product is transferred to the customer, and the related shipping and handling costs are included in cost of products sold. Taxes imposed by governmental authorities on the Company’s revenue producing activities with customers, such as sales taxes and value added taxes, are excluded from net sales.

The Company disaggregates its revenue by geography, which the Company believes provides a meaningful depiction of the nature of its revenue. Net sales includes service revenues, which are not a significant component of total revenue and are aggregated within the respective geographies. The following table sets forth the Company's disaggregated net sales (in thousands):


	Successor				Predecessor		Successor				Predecessor
	Three months ended July 31, 2021		One month ended July 31, 2020		Two months ended June 30, 2020		Six months ended July 31, 2021		One month ended July 31, 2020		Five months ended June 30, 2020
Americas	$	4,164,405	$	1,358,588	$	2,352,134	$	8,187,886	$	1,358,588	$	6,296,894
Europe	4,656,518		1,580,718		2,663,419		9,570,180		1,580,718		6,634,549
Asia-Pacific	416,022		105,645		168,829		840,238		105,645		428,113
Total	$	9,236,945	$	3,044,951	$	5,184,382	$	18,598,304	$	3,044,951	$	13,359,556

The following table provides a comparison of sales generated from products purchased from vendors that exceeded 10% of the Company's consolidated net sales for each of the periods indicated (as a percent of consolidated net sales):

⁽¹⁾Sales generated from products purchased from these vendors were less than 10% of consolidated net sales during the period presented.

The Company maintains an allowance for credit losses related to accounts receivable for future expected credit losses resulting from the inability or unwillingness of its customers to make required payments. In estimating the required allowance, the Company takes into consideration historical credit losses, current conditions and reasonable and supportable forecasts. Adjustments to historical loss information are made for differences in current conditions as well as changes in forecasted macroeconomic conditions, such as changes in unemployment rates or gross domestic product growth. Expected credit losses are estimated on a pool basis when similar risk characteristics exist using an age-based reserve model. Receivables that do not share risk characteristics are evaluated on an individual basis.

The following is a reconciliation of the Company's allowance for credit losses (in thousands):

The Company has uncommitted accounts receivable purchase agreements under which certain accounts receivable may be sold, without recourse, to third-party financial institutions. Under these programs, the Company may sell certain accounts receivable in exchange for cash less a discount, as defined in the agreements. Available capacity under these programs, which the Company uses as a source of working capital funding, is dependent on the level of accounts receivable eligible to be sold into these programs and the financial institutions' willingness to purchase such receivables. In addition, certain of these agreements also require that the Company continue to service, administer and collect the sold accounts receivable. At July 31, 2021 and January 31, 2021, the Company had a total of $751.7 million and $691.9 million, respectively, of accounts receivable sold to and held by financial institutions under these agreements. During the three months ended July 31, 2021, the one month ended July 31, 2020 and two months ended June 30, 2020, the discount fees recorded under these facilities were $3.4 million, $0.9 million and $1.3 million respectively. During the six months ended July 31, 2021, the one month ended July 31, 2020 and the five months ended June 30, 2020, the discount fees recorded under these facilities were $5.9 million, $0.9 million and $4.4 million respectively. These discount fees are included as a component of "other expense (income), net" in the Consolidated Statement of Operations.

In connection with the Apollo Merger, the Company has entered into certain transactions with its parent, Tiger Parent Holdings, L.P. (the "Parent") and certain affiliates of Apollo, including a management fee agreement. Fees incurred under the management fee agreement were $2.3 million for the three months ended July 31, 2021, $0.7 million for the one month ended July 31, 2020 and $4.6 million for the six months ended July 31, 2021. These fees are included in “selling, general and administrative expenses” on the Consolidated Statement of Operations. At July 31, 2021, the Company had amounts payable to the Parent of $6.2 million primarily related to transaction costs associated with the completion of the Apollo Merger, which are included in “accrued expenses and other liabilities” on the Consolidated Balance Sheet.

In December 2019, the Financial Accounting Standards Board ("FASB") issued ASU 2019-12, which simplifies and clarifies various aspects of the income tax accounting guidance. Under the new standard, certain amendments are to be applied prospectively, while other amendments are to be applied retrospectively to all periods presented. The Company adopted this standard during the quarter ended April 30, 2021. The adoption of this standard had no material impact on the Company's consolidated financial statements.

The Company evaluated subsequent events through September 8, 2021, which is the date the financial statements were available to be issued.

Pursuant to the Apollo Merger Agreement, on June 30, 2020, Merger Sub merged with and into Tech Data Corporation, with Tech Data Corporation surviving the Apollo Merger as a direct wholly-owned subsidiary of Tiger Midco. Tiger Midco, which is a wholly-owned subsidiary of Tiger Parent (AP) Corporation, acquired all the outstanding shares of Tech Data Corporation’s common stock (other than shares held by Tech Data Corporation as treasury stock or held by certain affiliates of the Apollo Funds) for $145 per share in cash. Additionally, per the terms of the Apollo Merger Agreement, all nonvested restricted stock units (“RSU’s”) were vested, cancelled and converted into the right to receive an amount of $145 per share in cash. Nonvested performance based restricted stock units (“PRSU’s”) were also cancelled and converted into the right to receive an amount of $145 per share in cash determined as follows: (i) for PRSU’s granted during fiscal 2019, the number of shares equaled 130% of the target shares granted and (ii) for PRSU’s granted during fiscal 2020, the number of shares equaled 110% of the target shares granted. The aggregate purchase price was approximately $5.2 billion.

The Parent contributed approximately $3.7 billion as equity to Tiger Parent (AP) Corporation in conjunction with the Apollo Merger, of which approximately $3.6 billion was used to fund the purchase price for Tech Data Corporation. The remaining purchase price for Tech Data Corporation was financed through the issuance of debt (see Note 4 – Debt for further discussion) and cash on hand at Tech Data Corporation.

The Company has accounted for the Apollo Merger as a business combination and allocated the purchase price to the fair values of Tech Data Corporation's assets and liabilities.

The allocation of the value of identifiable intangible assets includes approximately $2.1 billion of customer relationships with amortization periods ranging from 10 years to 15 years, with a weighted average amortization period of 14 years and $622 million of indefinite-lived trade names. Goodwill is the excess of the consideration transferred over the net assets recognized and primarily represents future economic benefits arising from assets acquired that are not individually identified and separately recognized, including synergies inherent in the existing business, of which approximately $550 million is expected to be deductible for tax purposes.

The following table presents unaudited supplemental pro forma information as if the Apollo Merger had occurred at the beginning of fiscal 2020, after giving effect to certain adjustments related to the transaction. The pro forma results exclude any benefits that may result from potential cost savings and certain non-recurring costs. As a result, the pro forma information below does not purport to present what actual results would have been had the Apollo Merger been consummated on the date indicated and it is not necessarily indicative of the results of operations that may result in the future.

On September 30, 2020, the Company completed the acquisition of Innovix Distribution ("Innovix"), a leading technology distributor in the Asia-Pacific region for a purchase price of approximately $52 million in cash. The Innovix acquisition expands the Company's presence across the Asia-Pacific region and strengthens its Endpoint Solutions and Advanced Solutions capabilities. The Company has accounted for the acquisition as a business combination and allocated the purchase price to the fair values of assets acquired and liabilities assumed, including cash of approximately $21 million, accounts receivable of approximately $121 million, inventory of approximately $40 million and accounts payable, accrued expenses and other current liabilities of approximately $107 million. The excess of the fair values of the net tangible assets over the purchase price was recorded as a gain on bargain purchase of $30 million in the Consolidated Statement of Operations for the period ended January 31, 2021. The Company acquired the net assets of Innovix for an amount less than fair value as its former parent decided to exit this business after it concluded that Innovix represented an insignificant non-strategic portion of its consolidated operations.

Proforma information for the acquisition of Innovix has not been presented as the acquisition was not material to the Company’s consolidated financial position or results of operations.

On February 10, 2021, the Company completed the acquisition of Finance Technology AS ("Finance Technology"), a specialist technology-as-a-service ("TaaS") platform provider for a purchase price of approximately $14.1 million in cash. The Finance Technology acquisition enhances the Company's ability to offer innovative, integrated and flexible TaaS solutions at scale across the European region. The Company has accounted for the acquisition as a business combination and allocated the purchase price to the fair values of assets acquired, primarily intangible assets.

Proforma information for the acquisition of Finance Technology has not been presented as the acquisition was not material to the Company’s consolidated financial position or results of operations.

Acquisition, integration and restructuring expenses are primarily comprised of costs related to the Apollo Merger, the new Global Optimization Program initiated in fiscal 2021 (the “GBO 2 Program”), the prior Global Business Optimization Program which was initiated in fiscal 2019 (the “GBO Program”), the tdONE Program and the SYNNEX Merger.

The Company incurred transaction costs related to the completion of the Apollo Merger, including professional services costs, stock-based compensation expense and personnel and other costs. Professional services costs are primarily comprised of legal expenses and tax and other consulting services. Stock-based compensation expense relates to charges associated with the accelerated vesting of RSU's and PRSU's pursuant to the terms of the Apollo Merger Agreement. Personnel and other costs are primarily comprised of retention costs.

Additionally, the Company recorded approximately $37 million of professional services costs during the one month ended July 31, 2020 related to services associated with start-up activities, specifically organization costs, as well as transaction costs related to the Apollo Merger, directed by Tiger Midco on behalf of Tiger Parent (AP) Corporation. The nature of these services included legal services, investment banking services and tax and other consulting services.


	Successor				Predecessor		Successor				Predecessor
	Three months ended July 31, 2021		One month ended July 31, 2020		Two months ended June 30, 2020		Six months ended July 31, 2021		One month ended July 31, 2020		Five months ended June 30, 2020
(in thousands)
Professional services costs	$	908	$	127,524	$	5,902	$	3,342	$	127,524	$	20,039
Stock-based compensation expense	—		20,123		—		—		20,123		—
Personnel and other costs	1,172		9,108		1,014		3,700		9,108		2,014
Total	$	2,080	$	156,755	$	6,916	$	7,042	$	156,755	$	22,053

In conjunction with the completion of the Apollo Merger, in fiscal 2021 the Company began its GBO 2 Program. The GBO 2 Program includes investments that will optimize and standardize processes and apply data and analytics to be more agile in a rapidly evolving environment, increasing productivity, profitability and optimizing net-working capital. Acquisition, integration and restructuring expenses related to the GBO 2 Program are primarily comprised of restructuring costs and other professional services costs. Restructuring costs are comprised of severance costs and other associated exit costs, including certain consulting costs. Other professional services costs are primarily comprised of professional services fees unrelated to restructuring activities, including costs related to improving profitability and optimizing net-working capital. The Company has incurred cumulative acquisition, integration and restructuring expenses under the GBO 2 program of approximately $77 million through July 31, 2021. The Company’s estimate of total acquisition, integration and restructuring expenses under the GBO 2 program is $175 million to $200 million. The majority of the remaining costs are expected to be incurred through fiscal 2023.

Acquisition, integration and restructuring costs related to the GBO 2 Program are comprised of the following:


	Successor				Predecessor		Successor				Predecessor
	Three months ended July 31, 2021		One month ended July 31, 2020		Two months ended June 30, 2020		Six months ended July 31, 2021		One month ended July 31, 2020		Five months ended June 30, 2020
(in thousands)
Restructuring costs	$	7,222	$	2,008	$	859	$	16,920	$	2,008	$	859
Other professional services costs	(1,029)		2,801		2,991		9,262		2,801		2,991
Total	$	6,193	$	4,809	$	3,850	$	26,182	$	4,809	$	3,850

Restructuring costs related to the GBO 2 Program are comprised of the following:


	Successor				Predecessor		Successor				Predecessor		Cumulative Amounts Incurred to Date
	Three months ended July 31, 2021		One month ended July 31, 2020		Two months ended June 30, 2020		Six months ended July 31, 2021		One month ended July 31, 2020		Five months ended June 30, 2020		Cumulative Amounts Incurred to Date
(in thousands)
Severance costs	$	1,066	$	—	$	—	$	6,252	$	—	$	—	$	14,366
Other exit costs	6,156		2,008		859		10,668		2,008		859		27,490
Total	$	7,222	$	2,008	$	859	$	16,920	$	2,008	$	859	$	41,856

Restructuring activity during the six months ended July 31, 2021 related to the GBO 2 Program is as follows:

In fiscal 2019, the Company began its GBO Program to increase investment in its strategic priorities and implement operational initiatives to drive productivity and enhance profitability. The restructuring costs primarily consist of severance costs, and also include other associated exit costs, including certain professional services costs. The GBO Program was completed during the period ended July 31, 2020.


	Successor		Predecessor		Successor		Predecessor		Cumulative Amounts Incurred to Date
	One month ended July 31, 2020		Two months ended June 30, 2020		One month ended July 31, 2020		Five months ended June 30, 2020		Cumulative Amounts Incurred to Date
(in thousands)
Severance costs	$	999	$	418	$	999	$	1,797	$	41,190
Other exit costs	437		376		437		665		22,620
Total	$	1,436	$	794	$	1,436	$	2,462	$	63,810

In fiscal 2021, the Company began the tdONE Program to simplify, standardize and synchronize the Company's processes and systems in support of its global transformation initiative. Acquisition and integration costs related to the tdONE program include $1.7 million in professional services and $2.4 million in personnel and other costs for the three months ended July 31, 2021. Acquisition and integration costs related to the tdONE program include $6.1 million in professional services and $5.5 million in personnel and other costs for the six months ended July 31, 2021. Acquisition and integration costs related to the tdONE program include $1.3 million in professional services for the one month ended July 31, 2020. There were no tdONE costs incurred during the two or five months ended June 30, 2020.

During the three and six months ended July 31, 2021, the Company incurred transaction costs of $1.3 million and $3.5 million, respectively, related to the SYNNEX Merger, which are primarily comprised of professional services and transaction related costs.

The carrying value of the Company's outstanding debt consists of the following (in thousands):

In January 2017, the Company issued $500.0 million aggregate principal amount of 3.70% Senior Notes due February 15, 2022 (the "2022 Senior Notes") and $500.0 million aggregate principal amount of 4.95% Senior Notes due February 15, 2027 (the "2027 Senior Notes") (collectively the "Senior Notes"). The Company pays interest on the Senior Notes semi-annually in arrears on February 15 and August 15 of each year. The interest rate payable on the Senior Notes will be subject to adjustment from time to time if the credit rating assigned to such series of notes changes; however, at no point will the interest rate be reduced below the interest rate payable on the notes on the date of the initial issuance or increase more than 2.00% above the interest rate payable on the notes of the series on the date of their initial issuance. The interest rate payable on the Senior Notes initially increased by 1.00% as a result of the Apollo Merger and further increased an additional 1.00% during the quarter ended April 30, 2021. The Senior Notes are senior unsecured obligations of Tech Data Corporation and will rank equally with all other unsecured and unsubordinated indebtedness from time to time outstanding.

The Company, at its option, may redeem the 2022 Senior Notes at any time prior to January 15, 2022 and the 2027 Senior Notes at any time prior to November 15, 2026, in each case in whole or in part, at a redemption price equal to the greater of (i) 100% of the principal amount of the Senior Notes to be redeemed or (ii) the sum of the present values of the remaining scheduled payments of principal and interest on the Senior Notes to be redeemed, discounted to the date of redemption on a semi-annual basis at a rate equal to the sum of the applicable Treasury Rate plus 30 basis points for the 2022 Senior Notes and 40 basis points for the 2027 Senior Notes, plus the accrued and unpaid interest on the principal amount being redeemed up to the date of redemption. The Company may also redeem the Senior Notes, at any time in whole or from time to time in part, on or after January 15, 2022 for the 2022 Senior Notes and November 15, 2026 for the 2027 Senior Notes, in each case, at a redemption price equal to 100% of the principal amount of the Senior Notes to be redeemed.

On March 10, 2020, Merger Sub launched an offer to purchase for cash any and all of the Company’s outstanding 2022 Senior Notes and any and all of the Company’s outstanding 2027 Senior Notes and a consent solicitation to amend the indenture and global securities establishing the 2022 Senior Notes and the 2027 Senior Notes to (i) eliminate the requirement to make a “change of control” offer in connection with the proposed merger of Merger Sub into the Tech Data Corporation pursuant to the Apollo Merger Agreement and (ii) make certain other customary changes for a privately-held company to the “change of control” provisions (the “Proposed Amendments”). Concurrently with, but separate from, the aforementioned offer to purchase and consent solicitation, Merger Sub launched a consent solicitation for the Proposed Amendments for holders of the 2027 Senior Notes. On March 24, 2020, Merger Sub announced that the requisite more than 50% of consents were received to adopt the Proposed Amendments. The aforementioned consent solicitations were conducted by Merger Sub pursuant to the terms of, and subject to the conditions set forth in, the offer to purchase and consent solicitation statement, dated March 10, 2020 (the “Offer to Purchase and Consent Solicitation”), and the separate consent solicitation statement, dated March 10, 2020 (the “2027 Consent Solicitation” and, together with the Offer to Purchase and Consent Solicitation, the “Offer to Purchase and Consent Solicitation Statements”). On March 24, 2020, the Company entered into a

Supplemental Indenture with respect to the Indenture and Global Security for the 2022 Senior Notes (the “2022 Supplemental Indenture”) and a Supplemental Indenture with respect to the Indenture and Global Security for the 2027 Senior Notes (the “2027 Supplemental Indenture” and, together with the 2022 Supplemental Indenture, the “Supplemental Indentures”) effecting the Proposed Amendments.

On June 30, 2020, upon consummation of the Apollo Merger and the satisfaction of certain other conditions, Merger Sub accepted and paid for approximately $434.1 million principal amount of the 2022 Senior Notes and approximately $369.4 million principal amount of the 2027 Senior Notes.

On June 30, 2020, as part of the Apollo Merger transaction, the Company entered into an approximately $4.9 billion Asset Based Credit Agreement (the "ABL") with a syndicate of banks. The ABL is comprised of (i) a $2.8 billion revolving credit facility (the "ABL Revolver"), (ii) a $1.7 billion Non- First-In Last-Out ("FILO") Term Loan and (iii) a $370 million FILO Term Loan. The ABL facilities constitute senior debt of the Company that is secured by a first priority lien by a pledge of Tech Data Corporation’s capital stock directly held by Tiger Midco and first-priority security interests in substantially all of Tech Data Corporation’s accounts receivable, inventory, general intangibles (other than intellectual property), bank accounts and cash, and books and records related to the foregoing, in each case, subject to certain exceptions.

The ABL Revolver provides for (i) a maturity date of June 30, 2025 (ii) an interest rate on borrowings, facility fees and letter of credit fees based on average availability under the ABL Revolver and (iii) certain subsidiaries of the Company to be designated as borrowers. The applicable borrower pays interest on advances under the ABL Revolver based on LIBOR (or similar interbank offered rate depending on currency draw) plus a predetermined margin that is based on the Company’s average revolving availability.

The Non-FILO Term Loan and FILO Term Loan (collectively, the “ABL Term Loans”) have a maturity date of June 30, 2025. The Company pays interest at a variable rate based on LIBOR (or similar interbank offered rate depending on currency draw) plus, in each case, a fixed predetermined margin. The Company entered into two interest rate swaps which convert the interest payable on the ABL Term Loans from a variable rate to a fixed rate (see Note 8 – Derivative Instruments for further discussion). The Company must repay 0.25% of the original principal amount of the ABL Term Loans on a quarterly basis. Any refinancing through the issuance of certain debt or any repricing amendment, in either case, that constituted a “repricing event” applicable to the ABL Term Loans resulting in a lower yield would have been accompanied by a 1.00% prepayment premium or fee, as applicable, if any such repricing event occurred, (i) with respect to the Non-FILO Term Loan, at any time during the first six months after the closing date of the ABL and (ii) with respect to the FILO Term Loan, at any time during the first twelve months after the closing date of the ABL. As no such repricing event occurred within the specified period, the ABL Term Loans may be repaid at any time, without premium or penalty, subject to customary breakage costs, except that, subject to certain exceptions, the FILO Term Loan may not be prepaid prior to the payment in full of any amounts outstanding under the ABL Revolver and the Non-FILO Term Loan.

The ABL Revolver includes a springing financial maintenance covenant based on availability under the ABL Revolver. At July 31, 2021, the financial maintenance covenant did not apply. In addition, the ABL contains covenants that would restrict the Company’s ability to, among other things, incur certain debt and liens, make certain dividends and other restricted payments, make certain investments, sell certain assets and enter into certain transactions with affiliates. The ABL also contains certain customary events of default, including relating to a change of control. If an event of default occurs, the lenders under the ABL are entitled to take various actions, including the acceleration of amounts due under the ABL and all actions permitted to be taken by a secured creditor in respect of the collateral securing the ABL.

The Company has various other committed and uncommitted lines of credit, short-term loans and overdraft facilities totaling approximately $402.4 million at July 31, 2021 to support its operations. Most of these facilities are provided on an unsecured, short-term basis and are reviewed periodically for renewal.

At July 31, 2021, the Company had also issued standby letters of credit of $117.3 million. These letters of credit typically act as a guarantee of payment to certain third parties in accordance with specified terms and conditions.

The Company's provision (benefit) for income taxes increased to $37.6 million for the three months ended July 31, 2021 compared to $(21.0) million for the one month ended July 31, 2020 and $7.1 million for the two months ended June 30, 2020. The Company's effective tax rate was 59.5%, 16.3% and (26.7)% for the three months ended July 31, 2021, the one month ended July 31, 2020 and the two months ended June 30, 2020, respectively. The Company had a provision for income taxes of $7.1 million on a loss before income taxes of $26.7 million for the two months ended June 30, 2020 which results in a negative effective tax rate. The increase in both the provision for income taxes and the effective tax rate for the three months ended July 31, 2021, as compared to the prior year, is primarily due to income tax expense of $23.3 million for the three months ended July 31, 2021 related to the remeasurement of deferred tax liabilities in the United Kingdom due to a change in the statutory income tax rate. The increase in the provision for income taxes for the three months ended July 31, 2021 is also due to an increase in taxable earnings.

The Company's provision (benefit) for income taxes increased to $40.4 million for the six months ended July 31, 2021 compared to $(21.0) million for the one month ended July 31, 2020 and $19.2 million for the five months ended June 30, 2020. The Company's effective tax rate was 64.2%, 16.3% and 57.4% for the six months ended July 31, 2021, the one month ended July 31, 2020 and the five months ended June 30, 2020, respectively. The increase in both the provision for income taxes and the effective tax rate for the six months ended July 31, 2021, as compared to the prior year, is primarily due to income tax expense of $23.3 million for the six months ended July 31, 2021 related to the remeasurement of deferred tax liabilities in the United Kingdom due to a change in the statutory income tax rate. The increase in the provision for income taxes for the six months ended July 31, 2021 is also due to an increase in taxable earnings.

Subsequent to the Apollo Merger, certain of the Company’s employees have been granted equity awards (“Series B Units”) in the Parent. Series B Units entitle the holder to certain rights to receive amounts in cash upon a Substantially All Assets Sale Distribution or a Liquidation Event Distribution, each as defined in the Tiger Parent Holdings, L.P. Partnership Agreement. A total of 90,000 Series B Units are available for grant. Series B Units with service conditions only ("Time-based Series B Units") vest over a five-year period from the date of grant. Series B Units with service, market and performance conditions ("Performance-based Series B Units") vest if the total cash return to certain affiliates of Apollo (referred to as “MOIC”) upon a liquidation event exceeds certain defined thresholds while the holder of the Performance-based Series B Units is employed with the Company. Certain non-employee members of the Board of Directors of the Company have also been granted preferred shares ("Series A Units") and common shares in the Parent that vest over a one-year period from the date of grant.

The Company recorded stock-based compensation expense of $1.4 million and $2.7 million for the three and six months ended July 31, 2021, respectively, for the Time-based Series B Units. No expense was recorded for the Performance-based Series B Units as it is not considered probable that the performance conditions will be satisfied. The Company recorded stock-based compensation expense of $0.1 million and $0.2 million for the three and six months ended July 31, 2021, respectively, for the Series A Units and common shares.

A summary of the Company’s year to date Time-based Series B Units activity for the six months ended July 31, 2021 is as follows:

A summary of the Company’s year to date Performance-based Series B Units activity for the six months ended July 31, 2021, assuming maximum achievement for nonvested awards, is as follows:

The 2018 Equity Incentive Plan was approved by the Company’s shareholders in June 2018 and included 2.0 million shares available for grant. Prior to the Apollo Merger, the Company awarded officers, employees, and non-employee members of the Board of Directors restricted stock, options to purchase common stock, stock appreciation rights and performance awards that were dependent upon achievement of specified performance goals. Equity-based compensation awards had a maximum term of ten years, unless a shorter period was specified by the Compensation Committee of the Board of Directors ("Compensation Committee") or was required under local law. Awards under the plan were priced as determined by the Compensation Committee and were required to be priced at, or above, the fair market value of the Company’s common stock on the date of grant. Awards generally vested between one year and three years from the date of grant. The Company’s policy was to utilize shares of its treasury stock, to the extent available, to satisfy its obligation to issue shares upon the exercise of awards.

Pursuant to the terms of the Apollo Merger Agreement, upon closing of the Apollo Merger all nonvested RSU’s were vested, cancelled and converted into the right to receive an amount of $145 per share in cash. Nonvested PRSU’s were also cancelled and converted into the right to receive an amount of $145 per share in cash determined as follows: (i) for PRSU’s granted during fiscal 2019, the number of shares equaled 130% of the target shares granted and (ii) for PRSU’s granted during fiscal 2020, the number of shares equaled 110% of the target shares granted. The Company recorded $20.1 million of stock-based compensation expense within “acquisition, integration and restructuring expenses” during the one month ended July 31, 2020 related to the acceleration of the vesting of nonvested RSU and PRSU awards. The Company recorded $9.2 million of stock-based compensation expense during the five months ended June 30, 2020 related to awards issued under the 2018 Equity Incentive Plan.

The Company’s assets and liabilities carried or disclosed at fair value are classified in one of the following three categories: Level 1 – quoted market prices in active markets for identical assets and liabilities; Level 2 – inputs other than quoted market prices included in Level 1 above that are observable for the asset or liability, either directly or indirectly; and Level 3 – unobservable inputs for the asset or liability. The classification of an asset or liability within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

The following table summarizes the valuation of the Company's assets and liabilities that are measured at fair value on a recurring basis:

Successor

July 31, 2021

January 31, 2021

Fair value measurement category

Balance sheet location

Level 1

Level 2

Level 3

Level 1

Level 2

Level 3

(in thousands)

ASSETS

Derivatives not designated as hedging instruments:

Foreign currency forward contracts

Prepaid expenses and other assets

1,928

2,008

LIABILITIES

Cash flow hedges:

Interest rate swaps

Accrued expenses and other liabilities

13,876

14,103

Interest rate swaps

Other long-term liabilities

6,818

23,742

Derivatives not designated as hedging instruments:

Foreign currency forward contracts

Accrued expenses and other liabilities

3,419

2,524

The Company's foreign currency derivative instruments are measured on a recurring basis based on foreign currency spot rates and forward rates quoted by banks or foreign currency dealers and are marked-to-market each period. The Company's interest rate swaps are measured on a recurring basis using a discounted cash flow valuation technique considering the terms of the instrument, discount rates and projected LIBOR rates (see Note 8 – Derivative Instruments for further discussion).

The estimated fair value of the Senior Notes is based upon quoted market information (Level 1). The estimated fair value of the Senior Notes was approximately $218.1 million and $199.0 million, respectively, at July 31, 2021 and January 31, 2021 and the carrying value was $198.3 million and $198.7 million, respectively, at July 31, 2021 and January 31, 2021. The carrying amounts of accounts receivable, accounts payable and accrued expenses approximate fair value because of the short maturity of these items. The carrying amounts of debt outstanding pursuant to revolving credit facilities and term loans approximated fair value as the majority of these instruments have variable interest rates which approximate current market rates (Level 2 criteria).

In the ordinary course of business, the Company is exposed to movements in foreign currency exchange rates. The Company's foreign currency risk management objective has been to protect earnings and cash flows from the impact of exchange rate changes primarily through the use of foreign currency forward contracts and cross-currency swaps.

In fiscal 2020, the Company entered into foreign currency forward contracts to hedge a portion of its net investment in euro denominated foreign operations which were designated as net investment hedges. The Company entered into the net investment hedges to offset the risk of change in the U.S. dollar value of the Company's investment in a euro functional subsidiary due to fluctuating foreign exchange rates. The Company terminated these net investment hedge contracts during the first quarter of fiscal 2021. Gains and losses on the net investment hedges were recorded in other comprehensive (loss) income. Amounts recorded in accumulated other comprehensive (loss) income as of June 30, 2020 were eliminated as part of purchase accounting in conjunction with the Apollo Merger. Prior to the termination of the net investment hedges, the initial fair value of hedge components excluded from the assessment of effectiveness was recognized under a systematic and rational method over the life of the hedging instrument in interest expense, net on the Consolidated Statement of Operations. The Company classifies cash flows related to the settlement of its net investment hedges as investing activities in the Consolidated Statement of Cash Flows.

The company had no net investment hedges outstanding during the three or six months ended July 31, 2021, the one month ended July 31, 2020, or the two months ended June 30, 2020. The following table presents the effects of the Company's net investment hedges on accumulated other comprehensive income ("AOCI") and earnings for the five months ended June 30, 2020:

Prior to the Apollo Merger, Merger Sub entered into two interest rate swaps in order to hedge the exposure to interest rate fluctuations on expected borrowings under the ABL in conjunction with the closing of the Apollo Merger. These interest rate swaps convert the interest payable on the ABL Term Loans from a variable rate to a fixed rate. The interest rate swaps are designated as cash flow hedges. The notional values of the interest rate swaps totaled $2.0 billion at July 31, 2021 and they are set to mature on August 29, 2025. The Company has classified cash flows related to its interest rate swaps as operating activities in the Consolidated Statement of Cash Flows. Additionally, the Company previously entered into a cross-currency swap to hedge its cash flows related to certain foreign-currency denominated debt which was designated as a cash flow hedge. The notional value of this swap was $4.5 million at January 31, 2020 and the swap matured in February 2020. The Company has classified cash flows related to the settlement of its cross-currency swap as financing activities in the Consolidated Statement of Cash Flows.

The effective portion of changes in the fair value of derivatives designated and qualifying as cash flow hedges is initially reported as a component of other comprehensive (loss) income. These gains and losses are subsequently reclassified into earnings in the same period during which the hedged transaction affects earnings and are presented in the same operating statement line item as the earnings effect of the hedged item.

The following tables present the effects of the Company's cash flow hedges on AOCI and earnings for each of the periods indicated.
There was no cash flow hedge activity for the two months ended June 30, 2020:


Derivatives designated as cash flow hedges:	Amount of gain (loss) recognized in other comprehensive income (loss)		Amount of gain (loss) reclassified from AOCI into income (loss)		Amount of gain (loss) recognized in income (loss) (amount excluded from effectiveness testing)		Location of gain (loss) reclassified from AOCI into income (loss)
(in thousands)

Three months ended July 31, 2021 (Successor):
Interest rate swaps	$	(13,205)	$	(998)	$	—	Interest expense
Total	$	(13,205)	$	(998)	$	—

One month ended July 31, 2020 (Successor):
Interest rate swaps	$	(6,739)	$	—	$	—	Interest expense
Total	$	(6,739)	$	—	$	—


Derivatives designated as cash flow hedges:	Amount of gain (loss) recognized in other comprehensive income (loss)		Amount of gain (loss) reclassified from AOCI into income (loss)		Amount of gain (loss) recognized in income (loss) (amount excluded from effectiveness testing)		Location of gain (loss) reclassified from AOCI into income (loss)
(in thousands)

Six months ended July 31, 2021 (Successor):
Interest rate swaps	$	10,081	$	(1,914)	$	—	Interest expense
Total	$	10,081	$	(1,914)	$	—

One month ended July 31, 2020 (Successor):
Interest rate swaps	$	(6,739)	$	—	$	—	Interest expense
Total	$	(6,739)	$	—	$	—


Five months ended June 30, 2020 (Predecessor):
Cross-currency swap	$	402	$	(90)	$	—	Interest expense
	—		507		—		Other expense (income), net
Total	$	402	$	417	$	—

The Company additionally utilizes forward contracts that are not designated as hedging instruments to hedge intercompany loans, accounts receivable and accounts payable. The Company’s foreign currency exposure relates primarily to international transactions where the currency collected from customers can be different from the currency used to purchase the product. The Company’s transactions in its foreign operations are denominated primarily in the following currencies: Australian dollar, British pound, Canadian dollar, Czech koruna, Danish krone, euro, Indian rupee, Indonesian rupiah, Mexican peso, Norwegian krone, Polish zloty, Singapore dollar, Swedish krona, Swiss franc and U.S. dollar.

The Company considers inventory as an economic hedge against foreign currency exposure in accounts payable in certain circumstances. This practice offsets such inventory against corresponding accounts payable denominated in currencies other than the functional currency of the subsidiary buying the inventory when determining the net exposure to be hedged using traditional forward contracts. Under this strategy, the Company would expect to increase or decrease selling prices for products purchased in foreign currencies based on fluctuations in foreign currency exchange rates affecting the underlying accounts payable. To the extent the Company incurs a foreign currency exchange loss (gain) on the underlying accounts payable denominated in the foreign currency, a corresponding increase (decrease) in gross profit would be expected as the related inventory is sold. This strategy can result in a certain degree of quarterly earnings volatility as the underlying accounts payable is remeasured using the foreign currency exchange

rate prevailing at the end of each period, or settlement date if earlier, whereas the corresponding increase (decrease) in gross profit is not realized until the related inventory is sold.

The Company recognizes foreign currency exchange gains and losses on its derivative instruments not designated as hedges that are used to manage its exposures to foreign currency denominated accounts receivable and accounts payable as a component of “cost of products sold” which is consistent with the classification of the change in fair value upon remeasurement of the underlying hedged accounts receivable or accounts payable. The Company recognizes foreign currency exchange gains and losses on its derivative instruments not designated as hedges that are used to manage its exposures to foreign currency denominated financing transactions as a component of “other expense (income), net,” which is consistent with the classification of the change in fair value upon remeasurement of the underlying hedged loans. The gains and losses on the Company's foreign currency forward contracts are largely offset by the change in the fair value of the underlying hedged assets or liabilities. The Company classifies cash flows related to the settlement of forward contracts that are not designated as hedging instruments as operating activities in the Consolidated Statement of Cash Flows.

The total amount of gains (losses) recognized in earnings on the Company's derivatives not designated as hedges are as follows:


		Gains (losses) recognized in earnings
	Statement of Operations location	Successor				Predecessor		Successor				Predecessor
Derivatives not designated as hedges	Statement of Operations location	Three months ended July 31, 2021		One month ended July 31, 2020		Two months ended June 30, 2020		Six months ended July 31, 2021		One month ended July 31, 2020		Five months ended June 30, 2020
(in millions)
Foreign currency forward contracts	Cost of products sold	$	3.1	$	(6.7)	$	(5.5)	$	1.1	$	(6.7)	$	2.6
Foreign currency forward contracts	Other expense (income), net	(2.4)		(0.9)		(2.6)		(1.7)		(0.9)		(16.6)
Total		$	0.7	$	(7.6)	$	(8.1)	$	(0.6)	$	(7.6)	$	(14.0)

The Company's average notional amounts of derivatives not designated as hedges outstanding during the three months ended July 31, 2021, the one month ended July 31, 2020 and the two months ended June 30, 2020 were approximately $0.8 billion, $0.8 billion and $0.7 billion, respectively, with average maturities of 29 days, 29 days and 26 days, respectively. The Company's average notional amounts of derivatives not designated as hedges outstanding during the six months ended July 31, 2021, the one month ended July 31, 2020 and the five months ended June 30, 2020, were approximately $0.8 billion, $0.8 billion and $1.0 billion, respectively, with average maturities of 29 days, 29 days and 22 days, respectively. As discussed above, under the Company's hedging policies, gains and losses on these derivative financial instruments are largely offset by the gains and losses on the underlying assets or liabilities being hedged.

The Company’s derivatives are also discussed in Note 7 – Fair Value Measurements.

The following tables summarize the change in the components of AOCI for each of the periods indicated:


	Foreign currency translation adjustment, net of taxes		Unrealized gains (losses) on cash flow hedges, net of taxes		Total
(in thousands)
Successor:
Balance at April 30, 2021	$	291,918	$	26,573	$	318,491
Other comprehensive income (loss) before reclassification	(42,210)		(10,074)		(52,284)
Reclassification of (gain) loss from AOCI into income	—		998		998
Balance at July 31, 2021	$	249,708	$	17,497	$	267,205

Balance at June 30, 2020	$	(12,038)	$	—	$	(12,038)
Purchase accounting adjustment related to Apollo Merger	12,038		—		12,038
Other comprehensive income (loss) before reclassification	114,012		(5,044)		108,968
Balance at July 31, 2020	$	114,012	$	(5,044)	$	108,968


Predecessor:
Balance at April 30, 2020	$	(55,098)	$	—	$	(55,098)
Other comprehensive income (loss) before reclassification	43,060		—		43,060
Balance at June 30, 2020	$	(12,038)	$	—	$	(12,038)


	Foreign currency translation adjustment, net of taxes		Unrealized gains (losses) on cash flow hedges, net of taxes		Total
(in thousands)
Successor:
Balance at January 31, 2021	$	266,959	$	8,569	$	275,528
Other comprehensive income (loss) before reclassification	(17,251)		7,014		(10,237)
Reclassification of (gain) loss from AOCI into income	—		1,914		1,914
Balance at July 31, 2021	$	249,708	$	17,497	$	267,205

Balance at June 30, 2020	$	(12,038)	$	—	$	(12,038)
Purchase accounting adjustment related to Apollo Merger	12,038		—		12,038
Other comprehensive income (loss) before reclassification	114,012		(5,044)		108,968
Balance at July 31, 2020	$	114,012	$	(5,044)	$	108,968


Predecessor:
Balance at January 31, 2020	$	1,449	$	15	$	1,464
Other comprehensive income (loss) before reclassification	(13,487)		402		(13,085)
Reclassification of (gain) loss from AOCI into income	—		(417)		(417)
Balance at June 30, 2020	$	(12,038)	$	—	$	(12,038)

The Company has arrangements with certain finance companies that provide inventory financing facilities to the Company’s customers. In conjunction with certain of these arrangements, the Company would be required to purchase certain inventory in the event the inventory is repossessed from the customers by the finance companies. As the Company does not have access to information regarding the amount of inventory purchased from the Company still on hand with the customer at any point in time, the Company’s repurchase obligations relating to inventory cannot be reasonably estimated. Repurchases of inventory by the Company under these arrangements have been insignificant to date. The Company believes that, based on historical experience, the likelihood of a material loss pursuant to these inventory repurchase obligations is remote.

In December 2010, in a non-unanimous decision, a Brazilian appellate court overturned a 2003 trial court which had previously ruled in favor of the Company’s Brazilian subsidiary related to the imposition of certain taxes on payments abroad related to the licensing of commercial software products, commonly referred to as “CIDE tax.” The Company estimates the total exposure related to the CIDE tax, including interest, was approximately $15.5 million at July 31, 2021. The Brazilian subsidiary has appealed the unfavorable ruling to the Supreme Court and Superior Court, Brazil's two highest appellate courts. Based on the legal opinion of outside counsel, the Company believes that the chances of success on appeal of this matter are favorable and the Brazilian subsidiary intends to vigorously defend its position that the CIDE tax is not due. Accordingly, the Company has not recorded an accrual for the total estimated CIDE tax exposure. However, due to the lack of predictability of the Brazilian court system, the Company has concluded that it is reasonably possible that the Brazilian subsidiary may incur a loss up to the total exposure described above. The Company believes the resolution of this litigation will not be material to the Company’s consolidated net assets or liquidity.

The French Autorité de la Concurrence (“Competition Authority”) began in 2013 an investigation into the French market for certain products of Apple, Inc., for which the Company is a distributor. In March 2020, the Competition Authority imposed fines on the Company, on another distributor, and on Apple, finding that the Company entered into an anticompetitive agreement with Apple regarding volume allocations of Apple products. The fine imposed on the Company was €76 million. The Company has vigorously contested the arguments of the Competition Authority, and the Company has appealed its determination to the French courts, seeking to set aside or reduce the fine. Although the Company believes it has strong arguments on appeal, the Company determined during the second quarter of fiscal 2021 that the best estimate of probable loss related to this matter is €36 million. As a result, during the two months ended June 30, 2020, the Company recorded a charge of $41.2 million in “legal settlements and other litigation, net” in the Consolidated Statement of Operations. Under French law, the pendency of the Company’s appeal does not suspend the obligation to pay the fine. The Company has agreed to make eight equal installment payments in relation to the fine assessed for a total amount of €22.8 million on a quarterly basis from January 2021 through October 2022. If the appeal process is not completed prior to the end of December 2022, the Company may be required to pay further amounts towards the full fine assessed by the Competition Authority before the Company’s appeal is finally determined. However, any additional amounts that may need to be paid have not yet been determined. Additionally, the Company has provided a third-party surety bond to the Competition Authority to guarantee the payment of the amount of the fine and interest, if applicable. In June 2021, a civil lawsuit related to this matter, alleging anticompetitive actions in association with the established distribution networks for Apple, Tech Data and another distributor was filed by eBizcuss. The Company is currently evaluating this matter and cannot currently estimate the probability or amount of any potential loss.

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

On September 1, 2021, the affiliates of SYNNEX acquired all the outstanding shares of the Company's common stock for $1,610,000,000 in cash, in the aggregate and 44,000,000 total shares of common stock of SYNNEX. Prior to the effective time of the SYNNEX Merger, affiliates of Apollo made an additional equity contribution of $500 million in cash to the Company, as specified in the SYNNEX Merger Agreement.

Upon consummation of the SYNNEX Merger, the Company's indebtedness under the ABL was repaid in full and terminated in connection therewith. The Company notified the trustee (“Trustee”) for the Senior Notes of its intent to redeem, in full, the outstanding aggregate principal amount of its Senior Notes on October 1, 2021 (the “Redemption Date”). The redemption will be effected in accordance with the terms of the indenture (as supplemented by the respective officer’s certificates and supplemental indentures) governing the Senior Notes. The redemption price for the respective Senior Notes will be equal to the sum of the present values of the remaining scheduled payments of principal and interest on the respective Senior Notes to be redeemed from the Redemption Date to January 15, 2022 (in the case of the 2022 Senior Notes) or to November 15, 2026 (in the case of the 2027 Senior Notes), discounted to the Redemption Date on a semi-annual basis at a rate equal to the sum of the applicable treasury rate plus 30 basis points for the 2022 Senior Notes and 40 basis points for the 2027 Senior Notes, plus the accrued and unpaid interest on the respective principal amount being redeemed up to, but not including, the Redemption Date.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Management's Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”), contains forward-looking statements with respect to Tiger Parent (AP) Corporation and its subsidiaries. Such forward-looking statements include those regarding its plans, objectives, expectations and intentions, financial results, estimates and/or business prospects. Forward‐looking statements generally relate to future events or our future financial or operating performance. In some cases, readers can identify forward-looking statements by terminology such as “may”, “should”, “expect”, “intend”, “will”, “estimate”, “anticipate”, “believe”, “plans”, “predict”, “potential” or “continue”, or the negatives of these terms or variations of them or similar terminology. Such forward-looking statements are subject to risks, uncertainties and other factors which could cause actual results or performance to differ materially from those expressed or implied by such forward looking statements. Forward‐looking statements are not to be viewed as facts, and reflect various assumptions concerning the future performance of Tiger Parent (AP) Corporation and are subject to various business, financial, economic, operating, competitive and other risks and uncertainties and contingencies (many of which are difficult to predict and beyond the control of Tiger Parent (AP) Corporation) that could cause actual results or performance to differ materially from the estimates and forward-looking statements included herein. Accordingly, there can be no assurance as to the reliability or correctness of such forward-looking statements, nor should any assurances be inferred, and actual results and performance may vary materially. Recipients of these consolidated financial statements should not place undue reliance upon any forward-looking statements. We undertake no obligation to revise or update any forward-looking statements for any reason.

On November 12, 2019, Tech Data Corporation entered into an Agreement and Plan of Merger, as subsequently amended on November 27, 2019 (the ''Apollo Merger Agreement''), with Tiger Midco, LLC (“Tiger Midco”) and Tiger Merger Sub Co. (“Merger Sub”). Tiger Midco and Merger Sub are affiliates of certain funds (the “Apollo Funds”), managed by affiliates of Apollo Global Management Inc. (“Apollo”). Pursuant to the Apollo Merger Agreement, Tiger Midco agreed to acquire all the outstanding shares of Tech Data Corporation’s common stock (other than shares held by Tech Data Corporation as treasury stock or held by certain affiliates of the Apollo Funds) for $145 per share in cash. On June 30, 2020, Merger Sub merged with and into Tech Data Corporation (the “Apollo Merger”), with Tech Data Corporation surviving the Apollo Merger as a direct wholly-owned subsidiary of Tiger Midco (see Note 2 of Notes to Consolidated Financial Statements for additional information). Tiger Parent (AP) Corporation, through its wholly-owned subsidiaries including Tiger Midco, is the parent company of Tech Data Corporation subsequent to the Merger. The aggregate purchase price was approximately $5.2 billion. Tiger Parent Holdings, L.P. (the "Parent"), the parent company of Tiger Parent (AP) Corporation, contributed approximately $3.7 billion as equity to Tiger Parent (AP) Corporation in conjunction with the Apollo Merger, of which approximately $3.6 billion was used to fund the purchase price for Tech Data Corporation. The remaining purchase price for Tech Data Corporation was financed through the issuance of debt (see Note 4 of Notes to Consolidated Financial Statements for further discussion) and cash on hand at Tech Data Corporation.

The consolidated financial statements include the consolidated results of Tech Data Corporation for periods prior to the Apollo Merger on June 30, 2020 (the “predecessor period”) as well as the consolidated results of Tiger Parent (AP) Corporation after the date of the Apollo Merger (the “successor period”). References to “we”, “our”, “us” or the “Company” indicate Tiger Parent (AP) Corporation and its subsidiaries for periods subsequent to the date of the Apollo Merger and Tech Data Corporation and its subsidiaries for periods prior to the Apollo Merger.

On March 22, 2021, we entered into an Agreement and Plan of Merger (the “SYNNEX Merger Agreement") with SYNNEX Corporation ("SYNNEX") and its affiliates. On September 1, 2021, pursuant to the SYNNEX Merger Agreement, and upon the terms and subject to the conditions described therein, the affiliates of SYNNEX acquired all the outstanding shares of our common stock for $1,610,000,000 in cash, in the aggregate and 44,000,000 total shares of common stock of SYNNEX (the "SYNNEX Merger"). Prior to the effective time of the SYNNEX Merger, affiliates of Apollo made an additional equity contribution of $500 million in cash to the Company, as specified in the SYNNEX Merger Agreement.

We are one of the world’s largest IT distribution and solutions companies. We serve a critical role in the center of the IT ecosystem, bringing products from the world’s leading technology vendors to market, as well as helping our customers create solutions best suited to maximize business outcomes for their end-user customers. We distribute and market products from many of the world’s leading technology hardware manufacturers and software publishers, as well as suppliers of next-generation technologies and delivery models such as converged and hyperconverged infrastructure, the cloud, security, analytics/Internet of things ("IoT"), and services. Our customers include value-added resellers, direct marketers, retailers, corporate resellers and managed service providers who support the diverse technology needs of end users.

To enable a specialized approach to the market while maintaining the exceptional service levels that channel partners expect from us, we group our offerings into two primary solutions portfolios:

Our next-generation technology solutions, along with our services offerings, span our Endpoint and Advanced Solutions portfolios.

To strengthen our role at the center of the IT ecosystem well into the future and achieve our financial objectives, we are moving to higher value, focused on the following strategic priorities:

On September 30, 2020, we completed the acquisition of Innovix Distribution ("Innovix"), a leading technology distributor in the Asia-Pacific region, for a purchase price of approximately $52 million in cash. The Innovix acquisition expands our presence across the Asia-Pacific region and strengthens our Endpoint Solutions and Advanced Solutions capabilities.

In March 2020, the World Health Organization declared the outbreak of the 2019 novel coronavirus (“COVID-19”) a pandemic. The global impact of the COVID-19 pandemic has had a negative effect on the global economy, disrupting the financial markets and creating increasing volatility, impacting customer demand and impeding global supply chains. In response to COVID-19, the company continues to operate with a significant portion of our global workforce participating in work-from-home arrangements and all of our logistics centers are open and functioning with strict health and safety guidelines in place. Despite improvements in the global economy since the onset of the pandemic, the resurgence of the Delta variant and other mutations bring uncertainty to continued economic recovery. As a result, we cannot at this time accurately predict what effects these conditions will have on our operations and financial condition, including due to the uncertainties relating to the severity and duration of the pandemic, the effect on our customers and customer demand and the length of the restrictions and closures imposed by various governments. Accordingly, the operating results and financial condition discussed herein may not be indicative of future operating results and trends.

In addition to disclosing financial results that are determined in accordance with generally accepted accounting principles in the U.S. (“GAAP”), the Company also discloses certain non-GAAP financial information. Certain of these measures are presented as adjusted for the impact of changes in foreign currencies (referred to as “impact of changes in foreign currencies”). Removing the impact of the

changes in foreign currencies provides a framework for assessing our financial performance as compared to prior periods. The impact

of changes in foreign currencies is calculated by using the exchange rates from the prior year comparable period applied to the results

of operations for the current period. The measure of adjusted EBITDA is based on the defined terms in our Asset Based Credit Agreement. The non-GAAP financial measures presented in this document include:

Management believes that providing this additional information is useful to the reader to assess and understand our financial performance as compared with results from previous periods. However, analysis of results via these financial measures should be used as a complement to, and in conjunction with, data presented in accordance with GAAP. Reported EBITDA and adjusted EBITDA do not include, among other things, cash requirements for capital expenditures and working capital, or interest expense in relation to our debt facilities. Therefore, reported EBITDA and adjusted EBITDA may have certain limitations in analyzing our financial results. Additionally, because these measures are not calculated in accordance with GAAP, they may not necessarily be comparable to similarly titled measures reported by other companies.

The following tables set forth our Consolidated Statement of Operations as a percentage of net sales:


	Successor		Predecessor		Combined Predecessor/Successor
	One month ended July 31, 2020		Two months ended June 30, 2020		Three months ended July 31, 2020
Net sales	100.00	%	100.00	%	100.00	%
Cost of products sold	93.79		94.04		93.95
Gross profit	6.21		5.96		6.05
Operating expenses:
Selling, general and administrative expenses	4.62		5.21		4.99
Acquisition, integration and restructuring expenses	5.41		0.24		2.15
Legal settlements and other litigation, net	—		0.79		0.50
	10.03		6.24		7.64
Operating loss	(3.82)		(0.28)		(1.59)
Interest expense	0.40		0.24		0.30
Other expense (income), net	0.02		(0.01)		—
Loss before income taxes	(4.24)		(0.51)		(1.89)
(Benefit) provision for income taxes	(0.69)		0.14		(0.17)
Net loss	(3.55)	%	(0.65)	%	(1.72)	%


	Successor		Combined Predecessor/Successor
	Three months ended July 31, 2021		Three months ended July 31, 2020
Net sales	100.00	%	100.00	%
Cost of products sold	93.73		93.95
Gross profit	6.27		6.05
Operating expenses:
Selling, general and administrative expenses	4.89		4.99
Acquisition, integration and restructuring expenses	0.15		2.15
Legal settlements and other litigation, net	0.06		0.50
	5.10		7.64
Operating income (loss)	1.17		(1.59)
Interest expense	0.44		0.30
Other expense, net	0.05		—
Income (loss) before income taxes	0.68		(1.89)
Provision (benefit) for income taxes	0.40		(0.17)
Net income (loss)	0.28	%	(1.72)	%


	Successor		Predecessor		Combined Predecessor/Successor
	One month ended July 31, 2020		Five months ended June 30, 2020		Six months ended July 31, 2020
Net sales	100.00	%	100.00	%	100.00	%
Cost of products sold	93.79		93.71		93.72
Gross profit	6.21		6.29		6.28
Operating expenses:
Selling, general and administrative expenses	4.62		5.22		5.11
Acquisition, integration and restructuring expenses	5.41		0.22		1.19
Legal settlements and other litigation, net	—		0.31		0.25
	10.03		5.75		6.55
Operating (loss) income	(3.82)		0.54		(0.27)
Interest expense	0.40		0.22		0.26
Other expense, net	0.02		0.07		0.05
(Loss) income before income taxes	(4.24)		0.25		(0.58)
(Benefit) provision for income taxes	(0.69)		0.14		(0.01)
Net (loss) income	(3.55)	%	0.11	%	(0.57)	%


	Successor		Combined Predecessor/Successor
	Six months ended July 31, 2021		Six months ended July 31, 2020
Net sales	100.00	%	100.00	%
Cost of products sold	93.96		93.72
Gross profit	6.04		6.28
Operating expenses:
Selling, general and administrative expenses	4.95		5.11
Acquisition, integration and restructuring expenses	0.27		1.19
Legal settlements and other litigation, net	0.02		0.25
	5.24		6.55
Operating income (loss)	0.80		(0.27)
Interest expense	0.43		0.26
Other expense, net	0.03		0.05
Income (loss) before income taxes	0.34		(0.58)
Provision (benefit) for income taxes	0.22		(0.01)
Net income (loss)	0.12	%	(0.57)	%

The following table summarizes our net sales by geographic region for the one month ended July 31, 2020 and the two months ended June 30, 2020:

The following table summarizes our net sales and change in net sales by geographic region for the three months ended July 31, 2021 and 2020:


	Successor		Combined Predecessor/Successor		Change
	Three months ended July 31, 2021		Three months ended July 31, 2020		$		%
(in millions)
Consolidated net sales, as reported	$	9,236.9	$	8,229.3	$	1,007.6	12.2	%
Impact of changes in foreign currencies	(383.4)		—		(383.4)
Consolidated net sales, as adjusted	$	8,853.5	$	8,229.3	$	624.2	7.6	%

Americas net sales, as reported	$	4,164.4	$	3,710.7	$	453.7	12.2	%
Impact of changes in foreign currencies	(29.6)		—		(29.6)
Americas net sales, as adjusted	$	4,134.8	$	3,710.7	$	424.1	11.4	%

Europe net sales, as reported	$	4,656.5	$	4,244.1	$	412.4	9.7	%
Impact of changes in foreign currencies	(342.6)		—		(342.6)
Europe net sales, as adjusted	$	4,313.9	$	4,244.1	$	69.8	1.6	%

Asia-Pacific net sales, as reported	$	416.0	$	274.5	$	141.5	51.5	%
Impact of changes in foreign currencies	(11.2)		—		(11.2)
Asia-Pacific net sales, as adjusted	$	404.8	$	274.5	$	130.3	47.5	%

The following table summarizes our net sales by geographic region for the one month ended July 31, 2020 and the five months ended June 30, 2020:

The following table summarizes our net sales and change in net sales by geographic region for the six months ended July 31, 2021 and 2020:


	Successor		Combined Predecessor/Successor		Change
	Six months ended July 31, 2021		Six months ended July 31, 2020		$		%
(in millions)
Consolidated net sales, as reported	$	18,598.3	$	16,404.5	$	2,193.8	13.4	%
Impact of changes in foreign currencies	(860.5)		—		(860.5)
Consolidated net sales, as adjusted	$	17,737.8	$	16,404.5	$	1,333.3	8.1	%

Americas net sales, as reported	$	8,187.9	$	7,655.5	$	532.4	7.0	%
Impact of changes in foreign currencies	(61.8)		—		(61.8)
Americas net sales, as adjusted	$	8,126.1	$	7,655.5	$	470.6	6.1	%

Europe net sales, as reported	$	9,570.2	$	8,215.2	$	1,355.0	16.5	%
Impact of changes in foreign currencies	(771.2)		—		(771.2)
Europe net sales, as adjusted	$	8,799.0	$	8,215.2	$	583.8	7.1	%

Asia-Pacific net sales, as reported	$	840.2	$	533.8	$	306.4	57.4	%
Impact of changes in foreign currencies	(27.5)		—		(27.5)
Asia-Pacific net sales, as adjusted	$	812.7	$	533.8	$	278.9	52.2	%

The following table provides net sales generated from products purchased from vendors that exceeded 10% of our consolidated net sales for the periods indicated (as a percent of consolidated net sales):

The following table provides a comparison of net sales generated from products purchased from vendors that exceeded 10% of our consolidated net sales for the three and six months ended July 31, 2021 and 2020 (as a percent of consolidated net sales):

⁽¹⁾Sales generated from products purchased from these vendors were less than 10% of consolidated net sales during the period presented.

There were no customers that exceeded 10% of our consolidated net sales for the periods presented.

The following chart provides a comparison of our gross profit and gross profit as a percentage of net sales for the three months ended July 31, 2021 and 2020. Note that the results for the three months ended July 31, 2020 reflect the combined predecessor and successor periods:

The following table provides our gross profit for the one month ended July 31, 2020 and the two months ended June 30, 2020:

The following table provides a comparison of our gross profit for the three months ended July 31, 2021 and 2020:

The increase in gross profit, as adjusted, of $58.2 million is primarily due to an increase in net sales volume, including the impact of the acquisition of Innovix, and the impact of the mix of products sold. The increase in our year-over-year gross profit as a percentage of net sales is primarily due to the impact of the mix of products sold.

The following chart provides a comparison of our gross profit and gross profit as a percentage of net sales for the six months ended July 31, 2021 and 2020. Note that the results for the six months ended July 31, 2020 reflect the combined predecessor and successor periods:

The following table provides our gross profit for the one month ended July 31, 2020 and the five months ended June 30, 2020:

The following table provides a comparison of our gross profit for the six months ended July 31, 2021 and 2020:

The increase in gross profit, as adjusted, of $42.3 million is primarily due to an increase in net sales volume, including the impact of the acquisition of Innovix, partially offset by an unfavorable impact of $33.8 million for purchase accounting adjustments related to certain consideration received from vendors and the impact of the mix of products sold. The decrease in our year-over-year gross profit as a percentage of net sales is primarily due to the unfavorable impact of purchase accounting adjustments and the impact of the mix of products sold.

The following table provides a comparison of our SG&A for the one month ended July 31, 2020 and the two months ended June 30, 2020:

The following table provides a comparison of our SG&A for the three months ended July 31, 2021 and 2020:

The increase in SG&A, as adjusted, of $22.5 million is primarily due to an increase in acquisition related intangible assets amortization expense of $11.7 million and the impact of the acquisition of Innovix. The decrease in SG&A as a percentage of net sales, as reported of 10 basis points is primarily due to an increase in net sales volume, partially offset by an increase in acquisition related intangible assets amortization expense.

The following table provides a comparison of our SG&A for the one month ended July 31, 2020 and the five months ended June 30, 2020:

The following table provides a comparison of our SG&A for the six months ended July 31, 2021 and 2020:

The increase in SG&A, as adjusted, of $41.2 million is primarily due to an increase in acquisition related intangible assets amortization expense of $29.8 million and the impact of the acquisition of Innovix. The decrease in SG&A as a percentage of net sales, as reported of 16 basis points is primarily due to an increase in net sales volume, partially offset by an increase in acquisition related intangible assets amortization expense.

We incurred transaction costs related to the completion of the Apollo Merger, including professional services costs, stock-based compensation expense and personnel and other costs. Professional services costs are primarily comprised of legal expenses and tax and other consulting services. Stock-based compensation expense relates to charges associated with the accelerated vesting of restricted stock units and performance based restricted stock units pursuant to the terms of the Apollo Merger Agreement. Personnel and other costs are primarily comprised of retention costs.

Additionally, we recorded approximately $37 million of professional services costs during the one month ended July 31, 2020 related to services associated with start-up activities, specifically organization costs, as well as transaction costs related to the Merger, directed by Tiger Midco on behalf of Tiger Parent (AP) Corporation. The nature of these services included legal services, investment banking services and tax and other consulting services.


	Successor				Predecessor		Successor				Predecessor
	Three months ended July 31, 2021		One month ended July 31, 2020		Two months ended June 30, 2020		Six months ended July 31, 2021		One month ended July 31, 2020		Five months ended June 30, 2020
(in millions)
Professional services costs	$	0.9	$	127.6	$	5.9	$	3.3	$	127.6	$	20.0
Stock-based compensation expense	—		20.1		—		—		20.1		—
Personnel and other costs	1.2		9.1		1.0		3.7		9.1		2.1
Total	$	2.1	$	156.8	$	6.9	$	7.0	$	156.8	$	22.1

In conjunction with the completion of the Apollo Merger, in fiscal 2021 we began our GBO 2 Program. The GBO 2 Program includes investments that will optimize and standardize processes and apply data and analytics to be more agile in a rapidly evolving environment, increasing productivity, profitability and optimizing net-working capital. Acquisition, integration and restructuring expenses related to the GBO 2 Program are primarily comprised of restructuring costs and other professional services costs. Restructuring costs are comprised of severance costs and other associated exit costs, including certain consulting costs. Other professional services costs are primarily comprised of professional services fees unrelated to restructuring activities, including costs related to improving profitability and optimizing net-working capital. We have incurred cumulative acquisition, integration and restructuring expenses under the GBO 2 program of approximately $77 million through July 31, 2021. Our estimate of the total acquisition, integration and restructuring expenses under the GBO 2 program is $175 million to $200 million. The majority of the remaining costs are expected to be incurred through fiscal 2023.

Acquisition, integration and restructuring costs related to the GBO 2 Program are comprised of the following:


	Successor				Predecessor		Successor				Predecessor
	Three months ended July 31, 2021		One month ended July 31, 2020		Two months ended June 30, 2020		Six months ended July 31, 2021		One month ended July 31, 2020		Five months ended June 30, 2020
(in millions)
Restructuring costs	$	7.2	$	2.0	$	0.9	$	16.9	$	2.0	$	0.9
Other professional services costs	(1.0)		2.8		3.0		9.3		2.8		3.0
Total	$	6.2	$	4.8	$	3.9	$	26.2	$	4.8	$	3.9

Restructuring costs related to the GBO 2 Program are comprised of the following:


	Successor				Predecessor		Successor				Predecessor		Cumulative Amounts Incurred to Date
	Three months ended July 31, 2021		One month ended July 31, 2020		Two months ended June 30, 2020		Six months ended July 31, 2021		One month ended July 31, 2020		Five months ended June 30, 2020		Cumulative Amounts Incurred to Date
(in millions)
Severance costs	$	1.1	$	—	$	—	$	6.3	$	—	$	—	$	14.4
Other exit costs	6.1		2.0		0.9		10.6		2.0		0.9		27.5
Total	$	7.2	$	2.0	$	0.9	$	16.9	$	2.0	$	0.9	$	41.9

In fiscal 2019, we began our GBO Program to increase investment in the Company’s strategic priorities and implement operational initiatives to drive productivity and enhance profitability. The restructuring costs primarily consist of severance costs, and also include other associated exit costs, including certain professional services costs. The GBO Program was completed during the quarter ended July 31, 2020.


	Successor		Predecessor		Successor		Predecessor		Cumulative Amounts Incurred to Date
	One month ended July 31, 2020		Two months ended June 30, 2020		One month ended July 31, 2020		Five months ended June 30, 2020		Cumulative Amounts Incurred to Date
(in millions)
Severance costs	$	1.0	$	0.4	$	1.0	$	1.8	$	41.2
Other exit costs	0.4		0.4		0.4		0.7		22.6
Total	$	1.4	$	0.8	$	1.4	$	2.5	$	63.8

In fiscal 2021, we began our tdONE Program to simplify, standardize and synchronize our processes and systems in support of our global transformation initiative. Acquisition and integration costs related to the tdONE program include $1.7 million in professional services and $2.4 million in personnel and other costs for the three months ended July 31, 2021. Acquisition and integration costs related to the tdONE program include $6.1 million in professional services and $5.5 million in personnel and other costs for the six months ended July 31, 2021. Acquisition and integration costs related to the tdONE program include $1.3 million in professional services for the one month ended July 31, 2020. There were no tdONE costs incurred during the two or five months ended June 30, 2020.

During the three and six months ended July 31, 2021, we incurred transaction costs of $1.3 million and $3.5 million, respectively, related to the SYNNEX Merger, which are primarily comprised of professional services and transaction related costs.

During the two months ended June 30, 2020, we recorded a charge of $41.2 million in “legal settlements and other litigation, net” in the Consolidated Statement of Operations related to a legal matter in France (see Note 10 of Notes to Consolidated Financial Statements for further discussion).

Adjusted EBITDA is based on a defined term in our Asset Based Credit Agreement. Management believes that providing this additional information is useful to the reader to assess and understand our financial performance as compared with results from previous periods. However, analysis of results via this financial measure should be used as a complement to, and in conjunction with, data presented in accordance with GAAP. Reported and adjusted EBITDA do not include, among other things, cash requirements for capital expenditures and working capital, or interest expense in relation to our debt facilities. Therefore, reported and adjusted EBITDA may have certain limitations in analyzing our financial results. Additionally, because these measures are not calculated in accordance with GAAP, they may not necessarily be comparable to similarly titled measures reported by other companies.

The following table provides an analysis of reported EBITDA and adjusted EBITDA on a consolidated basis for the one month ended July 31, 2020, the two months ended June 30, 2020 and the five months ended June 30, 2020:


	Successor		Predecessor		Combined Predecessor/Successor		Successor		Predecessor		Combined Predecessor/Successor
	One month ended July 31, 2020		Two months ended June 30, 2020		Three months ended July 31, 2020		One month ended July 31, 2020		Five months ended June 30, 2020		Six months ended July 31, 2020
(in millions)
Net (loss) income	$	(108.0)	$	(33.9)	$	(141.9)	$	(108.0)	$	14.2	$	(93.8)
(Benefit) provision for income taxes	(21.0)		7.1		(13.9)		(21.0)		19.2		(1.8)
Interest expense	12.3		12.7		25.0		12.3		29.7		42.0
Other expense (income), net	0.4		(0.5)		(0.1)		0.4		8.4		8.8
Operating (loss) income	(116.3)		(14.6)		(130.9)		(116.3)		71.5		(44.8)
Depreciation and amortization	19.7		29.2		48.9		19.7		71.2		90.9
Reported EBITDA	$	(96.6)	$	14.6	$	(82.0)	$	(96.6)	$	142.7	$	46.1

Adjustments
Extraordinary, nonrecurring or unusual items ⁽¹⁾	(1.0)		2.0		1.0		(1.0)		4.7		3.7
Acquisition, integration and restructuring expenses ⁽²⁾	164.7		12.5		177.2		164.7		30.2		194.9
Human resources expenses ⁽³⁾	3.2		4.1		7.3		3.2		7.5		10.7
Stock-based and long term incentive compensation expense ⁽⁴⁾	0.5		5.5		6.0		0.5		13.3		13.8
Legal settlements and other litigation costs ⁽⁵⁾	0.5		43.0		43.5		0.5		46.2		46.7
Discontinued operations/facilities ⁽⁶⁾	—		—		—		—		0.1		0.1
Systems design, implementation or establishment costs ⁽⁷⁾	0.6		3.2		3.8		0.6		9.2		9.8
Public company costs ⁽⁸⁾	(0.3)		0.8		0.5		(0.3)		2.8		2.5
Purchase accounting adjustments ⁽⁹⁾	21.0		—		21.0		21.0		—		21.0
Management fees ⁽¹⁰⁾	0.7		—		0.7		0.7		—		0.7
Adjusted EBITDA	$	93.3	$	85.7	$	179.0	$	93.3	$	256.7	$	350.0

The following table provides an analysis of reported EBITDA and adjusted EBITDA on a consolidated basis for the three and six months ended July 31, 2021 and 2020, as well as the twelve months ended July 31, 2021:


	Successor		Combined Predecessor/Successor		Successor		Combined Predecessor/Successor		Successor
	Three months ended July 31, 2021		Three months ended July 31, 2020		Six months ended July 31, 2021		Six months ended July 31, 2020		Twelve months ended July 31, 2021
(in millions)
Net income (loss)	$	25.6	$	(141.9)	$	22.5	$	(93.8)	$	137.1
Provision (benefit) for income taxes	37.6		(13.9)		40.4		(1.8)		74.2
Interest expense	40.7		25.0		80.0		42.0		159.4
Other expense (income), net	3.7		(0.1)		6.4		8.8		11.2
Operating income (loss)	107.6		(130.9)		149.3		(44.8)		381.9
Depreciation and amortization	61.4		48.9		124.3		90.9		242.0
Reported EBITDA	$	169.0	$	(82.0)	$	273.6	$	46.1	$	623.9

Adjustments
Extraordinary, nonrecurring or unusual items ⁽¹⁾	1.7		1.0		5.6		3.7		9.3
Acquisition, integration and restructuring expenses ⁽²⁾	14.3		177.2		51.0		194.9		116.8
Human resources expenses ⁽³⁾	2.7		7.3		9.0		10.7		14.4
Stock-based and long term incentive compensation expense ⁽⁴⁾	6.6		6.0		17.0		13.8		33.6
Legal settlements and other litigation costs ⁽⁵⁾	5.2		43.5		3.9		46.7		5.4
Discontinued operations/facilities ⁽⁶⁾	(0.2)		—		(0.2)		0.1		(15.9)
Systems design, implementation or establishment costs ⁽⁷⁾	4.8		3.8		9.2		9.8		18.5
Public company costs ⁽⁸⁾	—		0.5		—		2.5		—
Purchase accounting adjustments ⁽⁹⁾	25.0		21.0		56.7		21.0		124.6
Management fees ⁽¹⁰⁾	2.3		0.7		4.6		0.7		8.7
Adjusted EBITDA	$	231.4	$	179.0	$	430.4	$	350.0	$	939.3

The following table provides an analysis of reported EBITDA and adjusted EBITDA for the Americas region for the one month ended July 31, 2020, the two months ended June 30, 2020 and the five months ended June 30, 2020:


	Successor		Predecessor		Combined Predecessor/Successor		Successor		Predecessor		Combined Predecessor/Successor
	One month ended July 31, 2020		Two months ended June 30, 2020		Three months ended July 31, 2020		One month ended July 31, 2020		Five months ended June 30, 2020		Six months ended July 31, 2020
(in millions)
Operating (loss) income	$	(122.3)	$	5.2	$	(117.1)	$	(122.3)	$	52.4	$	(69.9)
Depreciation and amortization	13.1		19.4		32.5		13.1		47.6		60.7
Reported EBITDA	$	(109.2)	$	24.6	$	(84.6)	$	(109.2)	$	100.0	$	(9.2)

Adjustments
Extraordinary, nonrecurring or unusual items ⁽¹⁾	(0.4)		0.6		0.2		(0.4)		4.2		3.8
Acquisition, integration and restructuring expenses ⁽²⁾	150.8		9.4		160.2		150.8		26.4		177.2
Human resources expenses ⁽³⁾	2.4		4.2		6.6		2.4		5.1		7.5
Stock-based and long term incentive compensation expense ⁽⁴⁾	0.2		2.5		2.7		0.2		6.1		6.3
Legal settlements and other litigation costs ⁽⁵⁾	—		—		—		—		—		—
Discontinued operations/facilities ⁽⁶⁾	—		—		—		—		0.1		0.1
Systems design, implementation or establishment costs ⁽⁷⁾	(1.3)		3.0		1.7		(1.3)		6.7		5.4
Public company costs ⁽⁸⁾	(0.3)		0.8		0.5		(0.3)		2.0		1.7
Purchase accounting adjustments ⁽⁹⁾	13.3		—		13.3		13.3		—		13.3
Management fees ⁽¹⁰⁾	0.7		—		0.7		0.7		—		0.7
Adjusted EBITDA	$	56.2	$	45.1	$	101.3	$	56.2	$	150.6	$	206.8

The following table provides an analysis of reported EBITDA and adjusted EBITDA for the Americas region for the three and six months ended July 31, 2021 and 2020:


	Successor		Combined Predecessor/Successor		Successor		Combined Predecessor/Successor
	Three months ended July 31, 2021		Three months ended July 31, 2020		Six months ended July 31, 2021		Six months ended July 31, 2020
(in millions)
Operating income (loss)	$	54.2	$	(117.1)	$	70.7	$	(69.9)
Depreciation and amortization	34.4		32.5		68.7		60.7
Reported EBITDA	$	88.6	$	(84.6)	$	139.4	$	(9.2)

Adjustments
Extraordinary, nonrecurring or unusual items ⁽¹⁾	1.6		0.2		4.1		3.8
Acquisition, integration and restructuring expenses ⁽²⁾	9.4		160.2		25.6		177.2
Human resources expenses ⁽³⁾	0.8		6.6		3.5		7.5
Stock-based and long term incentive compensation expense ⁽⁴⁾	4.5		2.7		11.2		6.3
Legal settlements and other litigation costs ⁽⁵⁾	—		—		(1.7)		—
Discontinued operations/facilities ⁽⁶⁾	(0.2)		—		(0.2)		0.1
Systems design, implementation or establishment costs ⁽⁷⁾	3.4		1.7		6.1		5.4
Public company costs ⁽⁸⁾	—		0.5		—		1.7
Purchase accounting adjustments ⁽⁹⁾	15.6		13.3		34.1		13.3
Management fees ⁽¹⁰⁾	2.3		0.7		4.6		0.7
Adjusted EBITDA	$	126.0	$	101.3	$	226.7	$	206.8

The following table provides an analysis of reported EBITDA and adjusted EBITDA for the Europe region for the one month ended July 31, 2020, the two months ended June 30, 2020 and the five months ended June 30, 2020:


	Successor		Predecessor		Combined Predecessor/Successor		Successor		Predecessor		Combined Predecessor/Successor
	One month ended July 31, 2020		Two months ended June 30, 2020		Three months ended July 31, 2020		One month ended July 31, 2020		Five months ended June 30, 2020		Six months ended July 31, 2020
(in millions)
Operating income (loss)	$	5.6	$	(18.4)	$	(12.8)	$	5.6	$	24.1	$	29.7
Depreciation and amortization	6.2		8.6		14.8		6.2		20.5		26.7
Reported EBITDA	$	11.8	$	(9.8)	$	2.0	$	11.8	$	44.6	$	56.4

Adjustments
Extraordinary, nonrecurring or unusual items ⁽¹⁾	(0.4)		(0.1)		(0.5)		(0.4)		(0.6)		(1.0)
Acquisition, integration and restructuring expenses ⁽²⁾	11.8		2.5		14.3		11.8		2.2		14.0
Human resources expenses ⁽³⁾	0.4		(0.2)		0.2		0.4		1.8		2.2
Stock-based and long term incentive compensation expense ⁽⁴⁾	0.2		2.7		2.9		0.2		6.5		6.7
Legal settlements and other litigation costs ⁽⁵⁾	0.3		42.0		42.3		0.3		43.3		43.6
Systems design, implementation or establishment costs ⁽⁶⁾	1.9		0.2		2.1		1.9		2.5		4.4
Public company costs ⁽⁷⁾	—		—		—		—		0.8		0.8
Purchase accounting adjustments ⁽⁸⁾	7.7		—		7.7		7.7		—		7.7
Adjusted EBITDA	$	33.7	$	37.3	$	71.0	$	33.7	$	101.1	$	134.8

The following table provides an analysis of reported EBITDA and adjusted EBITDA for the Europe region for the three and six months ended July 31, 2021 and 2020:


	Successor		Combined Predecessor/Successor		Successor		Combined Predecessor/Successor
	Three months ended July 31, 2021		Three months ended July 31, 2020		Six months ended July 31, 2021		Six months ended July 31, 2020
(in millions)
Operating income (loss)	$	47.6	$	(12.8)	$	76.8	$	29.7
Depreciation and amortization	25.5		14.8		52.5		26.7
Reported EBITDA	$	73.1	$	2.0	$	129.3	$	56.4

Adjustments
Extraordinary, nonrecurring or unusual items ⁽¹⁾	(0.1)		(0.5)		(0.8)		(1.0)
Acquisition, integration and restructuring expenses ⁽²⁾	3.5		14.3		20.3		14.0
Human resources expenses ⁽³⁾	1.7		0.2		4.9		2.2
Stock-based and long term incentive compensation expense ⁽⁴⁾	2.0		2.9		5.2		6.7
Legal settlements and other litigation costs ⁽⁵⁾	5.2		42.3		5.3		43.6
Systems design, implementation or establishment costs ⁽⁶⁾	1.4		2.1		3.1		4.4
Public company costs ⁽⁷⁾	—		—		—		0.8
Purchase accounting adjustments ⁽⁸⁾	9.4		7.7		22.6		7.7
Adjusted EBITDA	$	96.2	$	71.0	$	189.9	$	134.8

The following table provides an analysis of reported EBITDA and adjusted EBITDA for the Asia-Pacific region for the one month ended July 31, 2020, the two months ended June 30, 2020 and the five months ended June 30, 2020:


	Successor		Predecessor		Combined Predecessor/Successor		Successor		Predecessor		Combined Predecessor/Successor
	One month ended July 31, 2020		Two months ended June 30, 2020		Three months ended July 31, 2020		One month ended July 31, 2020		Five months ended June 30, 2020		Six months ended July 31, 2020
(in millions)
Operating income (loss)	$	0.4	$	(1.4)	$	(1.0)	$	0.4	$	(5.0)	$	(4.6)
Depreciation and amortization	0.4		1.2		1.6		0.4		3.1		3.5
Reported EBITDA	$	0.8	$	(0.2)	$	0.6	$	0.8	$	(1.9)	$	(1.1)

Adjustments
Extraordinary, nonrecurring or unusual items ⁽¹⁾	(0.2)		1.5		1.3		(0.2)		1.1		0.9
Acquisition, integration and restructuring expenses ⁽²⁾	2.1		0.6		2.7		2.1		1.6		3.7
Human resources expenses ⁽³⁾	0.4		0.1		0.5		0.4		0.6		1.0
Stock-based and long term incentive compensation expense ⁽⁴⁾	0.1		0.3		0.4		0.1		0.7		0.8
Legal settlements and other litigation costs ⁽⁵⁾	0.2		1.0		1.2		0.2		2.9		3.1
Adjusted EBITDA	$	3.4	$	3.3	$	6.7	$	3.4	$	5.0	$	8.4

The following table provides an analysis of reported EBITDA and adjusted EBITDA for the Asia-Pacific for the three and six months ended July 31, 2021 and 2020:


	Successor		Combined Predecessor/Successor		Successor		Combined Predecessor/Successor
	Three months ended July 31, 2021		Three months ended July 31, 2020		Six months ended July 31, 2021		Six months ended July 31, 2020
(in millions)
Operating income (loss)	$	5.8	$	(1.0)	$	1.8	$	(4.6)
Depreciation and amortization	1.5		1.6		3.1		3.5
Reported EBITDA	$	7.3	$	0.6	$	4.9	$	(1.1)

Adjustments
Extraordinary, nonrecurring or unusual items ⁽¹⁾	0.2		1.3		2.3		0.9
Acquisition, integration and restructuring expenses ⁽²⁾	1.4		2.7		5.1		3.7
Human resources expenses ⁽³⁾	0.2		0.5		0.6		1.0
Stock-based and long term incentive compensation expense ⁽⁴⁾	0.1		0.4		0.6		0.8
Legal settlements and other litigation costs ⁽⁵⁾	—		1.2		0.3		3.1
Adjusted EBITDA	$	9.2	$	6.7	$	13.8	$	8.4

The following table presents our interest expense for the one month ended July 31, 2020 and the two months ended June 30, 2020:

The following table presents a comparison of our interest expense for the three months ended July 31, 2021 and 2020:

The increase in interest expense of $15.7 million in the second quarter of fiscal 2022 compared to the second quarter of fiscal 2021 is primarily due to borrowings under the Asset Based Credit Agreement in conjunction with the Apollo Merger (see Note 4 of Notes to Consolidated Financial Statements for further discussion).

The following table presents our interest expense for the one month ended July 31, 2020 and the five months ended June 30, 2020:

The following table presents a comparison of our interest expense for the six months ended July 31, 2021 and 2020:

The increase in interest expense of $38.0 million in the first semester of fiscal 2022 compared to the first semester of fiscal 2021 is primarily due to borrowings under the Asset Based Credit Agreement in conjunction with the Apollo Merger (see Note 4 of Notes to Consolidated Financial Statements for further discussion).

The following table presents our other expense (income) for the one month ended July 31, 2020 and the two months ended June 30, 2020:

The following table presents a comparison of our other expense (income) for the three months ended July 31, 2021 and 2020:

"Other expense (income), net," consists primarily of discounts on the sale of accounts receivable, net foreign currency exchange gains and losses on certain financing transactions and the related derivative instruments used to hedge such financing transactions, interest income and gains and losses on the investments that were contained within life insurance policies used to fund our nonqualified deferred compensation plan. The change in other expense (income), net, in the second quarter of fiscal 2022 compared to the second quarter of the prior year is primarily due to a gain in the prior year in the fair value of investments contained within life insurance policies and higher discount fees on the sale of accounts receivable.

The following table presents our other expense, net for the one month ended July 31, 2020 and the five months ended June 30, 2020:

The following table presents a comparison of our other expense, net for the six months ended July 31, 2021 and 2020:

The change in other expense (income), net in the first semester of fiscal 2022 compared to the first semester of the prior year is primarily due to a decrease in hedging costs.

The following table provides a comparison of our (benefit) provision for income taxes and our effective tax rate for the one month ended July 31, 2020 and the two months ended June 30, 2020:

The following table provides a comparison of our provision (benefit) for income taxes and our effective tax rate for the three months ended July 31, 2021 and 2020:

The change in both the provision for income taxes and the effective tax rate for the three months ended July 31, 2021, as compared to the prior year period is primarily due to income tax expense of $23.3 million for the three months ended July 31, 2021 related to the remeasurement of deferred tax liabilities in the United Kingdom due to a change in the statutory income tax rate. The increase in the provision for income taxes for the three months ended July 31, 2021 was also due to an increase in taxable earnings.

The following table provides a comparison of our (benefit) provision for income taxes and our effective tax rate for the one month ended July 31, 2020 and the five months ended June 30, 2020:

The following table provides a comparison of our provision for income taxes and our effective tax rate for the six months ended July 31, 2021 and 2020:

The change in both the provision for income taxes and the effective tax rate for the six months ended July 31, 2021, as compared to the prior year, is primarily due to income tax expense of $23.3 million for the six months ended July 31, 2021 related to the remeasurement of deferred tax liabilities in the United Kingdom due to a change in the statutory income tax rate. The increase in the provision for income taxes for the six months ended July 31, 2021 was also due to an increase in taxable earnings.

Our discussion of liquidity and capital resources includes an analysis of our cash flows and capital structure for all periods presented.

As a distribution company, our business requires significant investment in working capital, particularly accounts receivable and inventory, partially financed through our accounts payable to vendors. An important driver of our operating cash flows is our cash conversion cycle (also referred to as “net cash days”). Our net cash days are defined as days of sales outstanding in accounts receivable ("DSO") plus days of supply on hand in inventory ("DOS"), less days of purchases outstanding in accounts payable ("DPO"). The following tables present the components of our cash conversion cycle, in days, as of July 31, 2021 and 2020, and January 31, 2021 and 2020:

The change in cash (used in) provided by operating activities of approximately $1.1 billion is primarily due to the impact of lower net working capital as of January 31, 2021, including the timing of payments to vendors. The decrease in cash flows used in investing activities of $5.2 billion is primarily due to cash outlays in the prior year resulting from the Apollo Merger transaction (see Note 2 of Notes to Consolidated Financial Statements for further discussion). The decrease in cash flows provided by financing activities of $4.3 billion is primarily due to prior year activity including a $3.7 billion contribution from Parent at the time of the Apollo Merger, $2.0 billion of borrowings under the Asset Based Credit Agreement (see Note 4 of Notes to Consolidated Financial Statements for further discussion) and the extinguishment of certain of our Senior Notes of approximately $0.8 billion and our prior term loan of approximately $0.3 billion in conjunction with the Apollo Merger.

As part of our capital structure and to provide us with significant liquidity, we have a diverse range of financing facilities across our geographic regions with various financial institutions. Also providing us liquidity are our cash and cash equivalents balances across our regions which are deposited and/or invested with various financial institutions. We are exposed to risk of loss on funds deposited with these financial institutions; however, we monitor our financing and depository financial institution partners regularly for credit quality. Our liquidity is subject to many factors, including the potential impact of the COVID-19 pandemic on financial markets; however, we believe that our existing sources of liquidity, including our financing facilities, trade credit from vendors, cash resources, as well as cash expected to be provided by operating activities will be sufficient to meet our working capital needs and cash requirements for at least the next 12 months.

We currently have sufficient resources, cash flows and liquidity within the U.S. to fund current and expected future working capital requirements. However, during fiscal 2021 we were able to repatriate foreign cash, along with the majority of our remaining foreign earnings which have been previously taxed, with minimal additional tax consequences. We plan to continue reinvesting future foreign earnings indefinitely outside the U.S. Any future remittances of foreign cash could be subject to additional foreign withholding tax, U.S. state taxes and certain tax impacts relating to foreign currency exchange effects.

For a discussion of our various financing arrangements, refer to Note 4 of Notes to Consolidated Financial Statements.

We have uncommitted accounts receivable purchase agreements under which certain accounts receivable may be sold, without recourse, to third-party financial institutions. Under these programs, we may sell certain accounts receivable in exchange for cash less a discount, as defined in the agreements. Available capacity under these programs, which we use as a source of working capital funding, is dependent on the level of accounts receivable eligible to be sold into these programs and the financial institutions' willingness to purchase such receivables, which may be impacted by the COVID-19 pandemic. In addition, certain of these agreements also require that we continue to service, administer and collect the sold accounts receivable. At July 31, 2021 and January 31, 2021, we had a total of $751.7 million and $691.9 million, respectively, of accounts receivable sold to and held by financial institutions under these agreements. During the three months ended July 31, 2021, the one month ended July 31, 2020 and two months ended June 30, 2020, the discount fees recorded under these facilities were $3.4 million, $0.9 million and $1.3 million, respectively. During the six months ended July 31, 2021, the one month ended July 31, 2020 and the five months ended June 30, 2020, the discount fees recorded under these facilities were $5.9 million, $0.9 million and $4.4 million, respectively. These discount fees are included as a component of "other expense (income), net" in the Consolidated Statement of Operations.

There have been no material changes to the critical accounting policies and estimates disclosed in our Annual Report for the year ended January 31, 2021.

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

For a description of the Company’s market risks, see “Quantitative and Qualitative Disclosures About Market Risk” in our Annual Report for the fiscal year ended January 31, 2021.


	Successor		Predecessor	Successor		Predecessor
	Three months ended July 31, 2021	One month ended July 31, 2020	Two months ended June 30, 2020	Six months ended July 31, 2021	One month ended July 31, 2020	Five months ended June 30, 2020
Apple Inc.	17%	17%	17%	16%	17%	15%
Lenovo	10%	N/A ⁽¹⁾	N/A ⁽¹⁾	10%	N/A ⁽¹⁾	N/A ⁽¹⁾
HP Inc.	N/A ⁽¹⁾	10%	10%	10%	10%	11%
Cisco Systems, Inc.	N/A ⁽¹⁾	11%	10%	N/A ⁽¹⁾	11%	11%


	Successor
	July 31, 2021		January 31, 2021
Senior Notes, interest payable semi-annually, due February 15, 2022	$	66,111	$	66,366
Senior Notes, interest payable semi-annually, due February 15, 2027	132,208		132,353
Asset-Based Non-FILO Term Loan, interest rate of 3.59% and 3.62% at July 31, 2021 and January 31, 2021, respectively	1,687,250		1,695,750
Asset-Based FILO Term Loan, interest rate of 5.59% and 5.62% at July 31, 2021 and January 31, 2021, respectively	367,225		369,075
ABL Revolver, interest rate of 1.50% at January 31, 2021	—		31,240
Other committed and uncommitted revolving credit facilities, average interest rate of 2.93% and 6.74% at July 31, 2021 and January 31, 2021, respectively	332,838		80,208
Other long-term debt	23,732		38,786
Less — unamortized debt discount and debt issuance costs	(77,950)		(88,136)
	2,531,414		2,325,642
Less — current maturities (included as “revolving credit loans and current maturities of long-term debt, net”)	(419,395)		(132,120)
Total long-term debt	$	2,112,019	$	2,193,522


	Shares
Successor:
Nonvested at January 31, 2021	24,976
Granted	75
Vested	(4,851)
Canceled	(950)
Nonvested at July 31, 2021	19,250


	Shares
Successor:
Nonvested at January 31, 2021	49,952
Granted	150
Canceled	(1,978)
Nonvested at July 31, 2021	48,124

	PAGE
FINANCIAL INFORMATION
Financial Statements	3
Consolidated Balance Sheet	3
Consolidated Statement of Operations	4
Consolidated Statement of Comprehensive (Loss) Income	5
Consolidated Statement of Shareholders' Equity	6
Consolidated Statement of Cash Flows	7
Notes to Consolidated Financial Statements	8
Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
Quantitative and Qualitative Disclosures about Market Risk	54


	Successor
Balance at January 31, 2021	$	86,913
Provision	(1,038)
Write-offs	(15,275)
Recoveries	2,930
Other ⁽¹⁾	473
Balance at July 31, 2021	$	74,003


(in millions)
Cash and cash equivalents	$	1,192
Accounts receivable	5,429
Inventories	2,895
Prepaid expenses and other assets	365
Property and equipment, net	464
Goodwill	1,482
Intangible assets	2,892
Other assets, net	404
Total assets	15,123

Accounts payable	6,447
Accrued expenses and other current liabilities	1,131
Revolving credit loans and current maturities of long-term debt, net	108
Long-term debt	1,348
Other long-term liabilities	866
Total liabilities	9,900

Purchase price	$	5,223


FORWARD-LOOKING STATEMENTS


OVERVIEW