TECH DATA CORPORATION FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q, including this Management's Discussion and
Analysis of Financial Condition and Results of Operations ("MD&A"), contains
forward-looking statements, as described in the "safe harbor" provision of the
Private Securities Litigation Reform Act of 1995. These statements involve a
number of risks and uncertainties and actual results could differ materially
from those projected. These forward-looking statements regarding future events
and the future results of Tech Data Corporation ("Tech Data", "we", "our", "us"
or the "Company") are based on current expectations, estimates, forecasts, and
projections about the industries in which we operate and the beliefs and
assumptions of our management. Words such as "expects," "anticipates,"
"targets," "goals," "projects," "intends," "plans," "believes," "seeks,"
"estimates," variations of such words, and similar expressions are intended to
identify such forward-looking statements. In addition, any statements that refer
to our future financial performance, our anticipated growth and trends in our
businesses, the impact of the COVID-19 pandemic and other characterizations of
future events or circumstances, are forward-looking statements. Readers are
cautioned that these forward-looking statements are only predictions and are
subject to risks, uncertainties, and assumptions. Therefore, actual results may
differ materially and adversely from those expressed in any forward-looking
statements. Readers are referred to the cautionary statements and important
factors discussed in Part I, Item 1A. Risk Factors in our Annual Report on Form
10-K for the year ended January 31, 2020 for further information with respect to
important risks and other factors that could cause actual results to differ
materially from those in the forward-looking statements. We undertake no
obligation to revise or update publicly any forward-looking statements for any
reason.
OVERVIEW
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.
Some of our key financial objectives are the following:
• Growing faster than the industry in select markets by gaining profitable
market share in key geographies within select product categories with
leading vendors.
• Improving operating income by growing gross profit faster than operating
costs.
• Delivering a return on invested capital above our weighted average cost of
capital.
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:
• Invest in next-generation technologies and delivery models such as the
cloud, security, analytics/IoT, and services.
• Strengthen our end-to-end portfolio of products, services and solutions.
• Transform our company digitally through greater automation, which we
believe will enhance the customer experience, improve productivity and
reduce costs.
• Optimize our global footprint by enhancing the operational efficiency and
effectiveness of our businesses around the world. We are focused on
enhancing the long-term profitability of our business and delivering a
better return on invested capital through targeted actions to removebusiness with lower returns, which we refer to as portfolio optimization.
Portfolio optimization actions allow working capital to be re-deployed in
our strategic focus areas, however, those actions may have a short-term
impact on revenues and gross profit.
OnNovember 25, 2019 , we completed the acquisition of DLT Solutions ("DLT"), a premier software and cloud solutions aggregator focused on theU.S. public sector. We acquired all of the outstanding shares of DLT for a preliminary purchase price of approximately$210 million in cash, subject to certain working capital and other adjustments. The DLT acquisition enables us to proactively develop opportunities, accelerate growth and simplify complexity for our channel partners that are serving theU.S. public sector space. Planned Acquisition OnNovember 12, 2019 , we entered into an Agreement and Plan of Merger, as subsequently amended onNovember 27, 2019 (the ''Merger Agreement''), with the affiliates of certain funds (the "Apollo Funds"), managed by affiliates ofApollo Global Management, LLC ("Apollo"), a leading global alternative investment manager. Pursuant to the Merger Agreement, the affiliates of Apollo Funds will acquire all the outstanding shares of the Company's common stock (other than shares held by the Company as treasury stock or held by certain affiliates of the Apollo Funds) for$145 per share in cash (the "Merger"). 24
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OnFebruary 12, 2020 , we held a special meeting of shareholders. At such meeting, the Merger Agreement was approved and adopted by a majority of the outstanding shares of the Company's common stock entitled to vote thereon. The waiting period with respect to the premerger notification and report form filed by the parties under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, has expired. The Company has received all regulatory approvals necessary to complete the Merger, except for the approval of theAustralian Foreign Investment Review Board ("AFIRB"), which has the matter under consideration. The Company and Apollo are still targeting a closing in the first half of calendar year 2020, although this timing may shift based on the timeline for receipt of Australian regulatory approval. The Company and Apollo expect to proceed with closing the transaction promptly after the final approval from the AFIRB is received, taking into account the timing requirements of the Merger Agreement, including the Marketing Period (as defined in the Merger Agreement). Impact of the COVID-19 Pandemic InMarch 2020 , theWorld 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 more than 95% of our global workforce participating in work-from-home arrangements and substantially all of our logistics centers are open and functioning with strict health and safety guidelines in place. We cannot at this time accurately predict what effects these conditions will have on our operations and financial condition, including due to uncertainties relating to the ultimate geographic spread of the virus, 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; however, we expect to see a negative impact to our revenue and earnings from the COVID-19 pandemic in the second quarter, which may continue into the third quarter or beyond. Accordingly, the operating results and financial condition discussed herein may not be indicative of future operating results and trends. 25
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NON-GAAP FINANCIAL INFORMATION
In addition to disclosing financial results that are determined in accordance with generally accepted accounting principles in theU.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 non-GAAP financial measures presented in this document include: • Net sales, as adjusted, which is defined as net sales adjusted for the impact of changes in foreign currencies;
• Gross profit, as adjusted, which is defined as gross profit as adjusted
for the impact of changes in foreign currencies;
• Selling, general and administrative expenses ("SG&A"), as adjusted, which
is defined as SG&A as adjusted for the impact of changes in foreign
currencies;
• Non-GAAP operating income, which is defined as operating income asadjusted to exclude acquisition, integration and restructuring expenses,
legal settlements and other, net, acquisition-related intangible assets
amortization expense and tax indemnifications;
• Non-GAAP net income, which is defined as net income as adjusted to exclude
acquisition, integration and restructuring expenses, legal settlements and
other, net, acquisition-related intangible assets amortization expense,
tax indemnifications and the income tax effects of these adjustments;
• Non-GAAP earnings per share-diluted, which is defined as earnings per
share-diluted as adjusted to exclude the per share impact of acquisition,
integration and restructuring expenses, legal settlements and other, net,
acquisition-related intangible assets amortization expense, tax
indemnifications and the income tax effects of these adjustments.
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. Management also uses these non-GAAP measures to
evaluate performance against certain operational goals and under certain of our
performance-based compensation plans. However, analysis of results on a non-GAAP
basis should be used as a complement to, and in conjunction with, data presented
in accordance with GAAP. Additionally, because these non-GAAP measures are not
calculated in accordance with GAAP, they may not necessarily be comparable to
similarly titled measures reported by other companies.
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RESULTS OF OPERATIONS
The following table sets forth our Consolidated Statement of Income as a
percentage of net sales:
Three months ended April 30,
2020 2019
Net sales 100.00 % 100.00 %
Cost of products sold 93.50 93.94
Gross profit 6.50 6.06
Operating expenses:
Selling, general and administrative expenses 5.23 4.82
Acquisition, integration and restructuring expenses 0.22 0.08
5.45 4.90
Operating income 1.05 1.16
Interest expense 0.21 0.31
Other expense (income), net 0.10 (0.01 )
Income before income taxes 0.74 0.86
Provision for income taxes 0.15 0.20
Net income 0.59 % 0.66 %
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Table of ContentsNET SALES
The following table summarizes our net sales and change in net sales by
geographic region for the three months ended
Three months ended April 30, Change
2020 2019 $ %
(in millions)
Consolidated net sales, as reported $ 8,175 $ 8,406 $ (231 ) (2.7 )%
Impact of changes in foreign currencies 175 - 175
Consolidated net sales, as adjusted $ 8,350
$ 156 4.1 % Impact of changes in foreign currencies 25 -
25
Europe net sales, as reported $ 3,971$ 4,309 $ (338 ) (7.8 )% Impact of changes in foreign currencies 138 -
138
Europe net sales, as adjusted $ 4,109$ 4,309
Asia-Pacific net sales, as reported $ 259$ 308 $ (49 ) (15.9 )% Impact of changes in foreign currencies 12 -
12
Asia-Pacific net sales, as adjusted $ 271$ 308 $ (37 ) (12.0 )% QUARTERLY COMMENTARYAMERICAS
• The increase in
primarily due to growth in personal computer systems, including increased
customer demand related to remote workforce enablement as a result of
COVID-19. Net sales also increased due to the acquisition of DLT in
November 2019 . The increase in net sales was partially offset by a
decrease in data center products, including impacts due to COVID-19,
coupled with portfolio optimization actions which reduced total
net sales by approximately 2 percent.
• The decrease in
primarily due to portfolio optimization actions which reduced total
net sales by approximately 3 percent, a decline in mobility products, as
well as a decrease in data center products including impacts due to
COVID-19. The decrease in net sales was partially offset by growth in
personal computer systems, including increased customer demand related to
remote workforce enablement as a result of COVID-19. The impact of changes
in foreign currencies is primarily due to the weakening of the euro
against the
• The decrease in
primarily due to a decrease in data center products, including portfolio
optimization actions which reduced total Asia-Pacific net sales by
approximately 12 percent and impacts due to COVID-19.
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MAJOR VENDORS
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 months endedApril 30, 2020 and 2019 (as a percent of consolidated net sales): Three months ended April 30, 2020 2019 Apple, Inc. 14% 13% Cisco Systems, Inc. 12% 11% HP Inc. 11% 10%
There were no customers that exceeded 10% of our consolidated net sales for the
three months ended
GROSS PROFIT
The following tables provide a comparison of our gross profit and gross profit as a percentage of net sales for the three months endedApril 30, 2020 and 2019: [[Image Removed: chart-e22d4b348373560486f.jpg]] Three months ended April 30, Change 2020 2019 $ % (in millions) Gross profit, as reported $ 531.7$ 509.4 $ 22.3 4.4 % Impact of changes in foreign currencies 11.6 - 11.6 Gross profit, as adjusted $ 543.3$ 509.4 $ 33.9 6.7 % The increase in gross profit, as adjusted, of$33.9 million and gross profit as a percentage of net sales, as reported, of 44 basis points is primarily due to lower inventory losses and the impact of the acquisition of DLT. 29
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Table of Contents OPERATING EXPENSES
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
The following table provides a comparison of our selling, general and
administrative expenses for the three months ended
Three months ended April 30, Change
2020 2019 $ %
(in millions)
SG&A, as reported $ 427.9 $ 405.5 $ 22.4 5.5 %
Impact of changes in foreign currencies 9.8 - 9.8
SG&A, as adjusted$ 437.7 $ 405.5
SG&A as a percentage of net sales, as reported 5.23 % 4.82 % 41 bps
The increase in SG&A, as adjusted, and SG&A as a percentage of net sales is primarily due to increased payroll costs, including the impact of the acquisition of DLT, and higher credit costs.
ACQUISITION, INTEGRATION AND RESTRUCTURING EXPENSES Acquisition, integration and restructuring expenses are primarily comprised of costs related to the Global Business Optimization Program which was initiated in fiscal 2019, the proposed Merger and the fiscal 2020 acquisition of DLT. Global Business Optimization Program In fiscal 2019, our Board of Directors approved the Global Business Optimization Program (the "GBO Program") to increase investment in our strategic priorities and implement operational initiatives to drive productivity and enhance profitability. Under the GBO Program, we expect to incur cumulative cash charges through fiscal 2021 of approximately$70 million to$80 million , primarily comprised of$40 million to$45 million of charges inEurope and$30 million to$35 million of charges in theAmericas . The cash charges primarily consist of severance costs, and also include professional services and other costs. The GBO Program is expected to result in annual cost savings of$70 million to$80 million by the end of fiscal 2021, of which approximately half is expected to be reinvested to accelerate our strategic priorities. Restructuring expenses related to the GBO Program are comprised of the following: Three months ended April 30, Cumulative Amounts 2020 2019 Incurred to Date (in millions) Severance costs $ 1.4 $ 4.1 $ 39.8 Professional services and other costs 0.3 2.1 21.8 Total $ 1.7 $ 6.2 $ 61.6 Restructuring expenses related to the GBO Program by segment are as follows: Three months ended April 30, 2020 2019 Cumulative Amounts Incurred to Date (in millions) Americas $ 1.0 $ 2.9 $ 21.0 Europe (0.2 ) 3.0 37.2 Asia-Pacific 0.9 0.3 3.4 Total $ 1.7 $ 6.2 $ 61.6 Pending Merger and DLT Acquisition During the three months endedApril 30, 2020 , we incurred professional services and other transaction related costs of$15.1 million related to the proposed Merger and$0.9 million related to the acquisition of DLT. The costs are primarily related to professional services fees for operational, tax, legal and other consulting services. 30
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Table of Contents OPERATING INCOME CONSOLIDATED RESULTS The following tables provide an analysis of GAAP operating income and non-GAAP operating income on a consolidated and regional basis as well as a reconciliation of GAAP operating income to non-GAAP operating income on a consolidated and regional basis for the three months endedApril 30, 2020 and 2019: [[Image Removed: chart-ff937323f41859ce92c.jpg]] [[Image Removed: chart-09c36160501b5628ba8.jpg]] Three months ended April 30, 2020 2019 (in millions) Operating income $ 86.1$ 97.6 Acquisition, integration and restructuring expenses 17.7 6.2 Legal settlements and other, net - (0.3 ) Acquisition-related intangible assets amortization expense 24.5 21.0 Tax indemnifications 0.6 0.3 Non-GAAP operating income$ 128.9 $ 124.8 CONSOLIDATED COMMENTARY
• The decrease in GAAP operating income of
an increase in acquisition, integration and restructuring expenses,
payroll costs and credit costs, partially offset by lower inventory
losses.
• The increase in non-GAAP operating income of
to lower inventory losses, partially offset by an increase in payroll
costs and credit costs.
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Table of ContentsAMERICAS [[Image Removed: chart-5716dc13d7525f0ca38.jpg]] [[Image Removed: chart-a0572951846454eda6a.jpg]] Three months ended April 30, 2020 2019 (in millions) Operating income - Americas $ 49.8$ 68.6 Acquisition, integration and restructuring expenses 17.0 2.9 Legal settlements and other, net - (0.3 ) Acquisition-related intangible assets amortization expense 16.9 13.5 Non-GAAP operating income - Americas $ 83.7$ 84.7 AMERICAS COMMENTARY
• The decrease in GAAP operating income of
an increase in acquisition, integration and restructuring expenses,
payroll costs and credit costs, partially offset by lower inventory
losses.
• The decrease in non-GAAP operating income of
to an increase in payroll costs and credit costs, partially offset by
lower inventory losses.
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Table of ContentsEUROPE [[Image Removed: chart-82e464706da35a1ea68.jpg]] [[Image Removed: chart-8b6df73bbe2f51bab67.jpg]] Three months ended April 30, 2020 2019 (in millions) Operating income - Europe $ 45.9 $ 36.4 Acquisition, integration and restructuring expenses (0.2 ) 3.0 Acquisition-related intangible assets amortization expense 6.3 6.2 Non-GAAP operating income - Europe $ 52.0 $ 45.6 EUROPE COMMENTARY
• The increases in both GAAP operating income and non-GAAP operating income
of
inventory losses, partially offset by an increase in payroll costs.
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Table of ContentsASIA-PACIFIC Three months ended April 30, 2020 2019 as a % of net $ in millions as a % of net sales $ in millions sales Operating (loss) income - Asia-Pacific$ (3.3 ) (1.25 )% $ 0.9 0.28 % Acquisition, integration and restructuring expenses 0.9 0.3 Acquisition-related intangible assets amortization expense 1.3 1.3 Tax indemnifications 0.6 0.3 Non-GAAP operating (loss) income - Asia-Pacific$ (0.5 ) (0.19 )% $ 2.8 0.91 %ASIA-PACIFIC COMMENTARY
• The decreases in both GAAP operating income and non-GAAP operating income
of $4.2 million and $3.3 million , respectively, are primarily due to a
decrease in net sales volume, including impacts from COVID-19.
OPERATING INCOME BY REGION
We do not consider stock-based compensation expenses in assessing the performance of our operating segments, and therefore we report stock-based compensation expenses separately. The following table reconciles our operating income by geographic region to our consolidated operating income:
Three months ended April 30,
2020 2019
(in millions)
Americas $ 49.8 $ 68.6
Europe 45.9 36.4
Asia-Pacific (3.3 ) 0.9
Stock-based compensation expense (6.3 ) (8.3 )
Operating income $ 86.1 $ 97.6
INTEREST EXPENSE
Interest expense decreased by $9.2 million to $17.0 million in the first quarter
of fiscal 2021 compared to $26.3 million in the first quarter of fiscal 2020,
primarily due to lower interest rates and average borrowings on our credit
facilities and a benefit of $3 million related to our net investment hedges (see
further discussion in Note 8 of Notes to Consolidated Financial Statements).
OTHER EXPENSE (INCOME), NET
"Other expense (income), net," consists primarily of gains and losses on the investments contained within life insurance policies used to fund our nonqualified deferred compensation plan, interest income, discounts on the sale of accounts receivable and net foreign currency exchange gains and losses on certain financing transactions and the related derivative instruments used to hedge such financing transactions. "Other expense (income), net," increased to$8.9 million of expense in the first quarter of fiscal 2021 compared to$0.7 million of income in the first quarter of the prior year, primarily due to a decline in the fair value of the investments contained within life insurance policies and increased hedging costs. The losses on investments are substantially offset in our payroll costs which are reflected in SG&A as part of operating income. 34
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Table of Contents PROVISION FOR INCOME TAXES
The following table provides a comparison of our provision for income taxes and
our effective tax rate for the three months ended
[[Image Removed: chart-71e7b00c2a1455edaa2.jpg]]
Three months ended April 30,
2020 2019
Effective tax rate 20.1% 23.1%
The decrease in the effective tax rate for the three months ended April 30,
2020 , as compared to the prior year, is primarily due to higher excess tax
benefits related to stock-based compensation. The decrease in the absolute
dollar value of the provision for income taxes for the three months ended April
30, 2020 , as compared to the prior year, is primarily due a decrease in taxable
earnings.
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NET INCOME AND EARNINGS PER SHARE-DILUTED
The following table provides an analysis of GAAP and non-GAAP net income and earnings per share-diluted as well as a reconciliation of results recorded in accordance with GAAP and non-GAAP financial measures for the three months endedApril 30, 2020 and 2019 ($ in millions, except per share data): [[Image Removed: chart-52a8aa4b584959a3a51.jpg]][[Image Removed: chart-91fadf3b6fe6529b82b.jpg]] CONSOLIDATED GAAP TO NON-GAAP RECONCILIATION Net Income Earnings per Share-Diluted Three months ended April 30: 2020 2019 2020 2019 (in millions, except per share data) GAAP results$ 48.1 $ 55.4 $ 1.34 $ 1.49 Acquisition, integration and restructuring expenses 17.7 6.2 0.49 0.17 Legal settlements and other, net - (0.3 ) - (0.01 ) Acquisition-related intangible assets amortization expense 24.5 21.0 0.68 0.56 Tax indemnifications 0.6 0.3 0.02 0.01
Income tax effect of tax indemnifications (0.6 ) (0.3 )
(0.02 ) (0.01 )
Income tax effect of other adjustments above (10.2 ) (6.4 )
(0.29 ) (0.17 ) Non-GAAP results$ 80.1 $ 75.9 $ 2.22 $ 2.04 36
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LIQUIDITY AND CAPITAL RESOURCES
Our discussion of liquidity and capital resources includes an analysis of our cash flows and capital structure for all periods presented.
CASH FLOWS
The following table summarizes our Consolidated Statement of Cash Flows:
Three months ended
2020 2019
(in millions) Net cash (used in) provided by: Operating activities$ (7.7 ) $ 63.2 Investing activities 24.1 (15.8 ) Financing activities (7.3 ) (35.8 ) Effect of exchange rate changes on cash and cash equivalents (21.5 ) (13.2 ) Net decrease in cash and cash equivalents$ (12.4 ) $
(1.6 )
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 April 30,
2020 and 2019, and January 31, 2020 and 2019:
[[Image Removed: chart-af680a115af959f9b2b.jpg]]
[[Image Removed: chart-41ed3df35e4152fc985.jpg]]
As of: April 30, 2020 January 31, 2020 As of: April 30, 2019 January 31, 2019
DSO 60 54 DSO 59 54
DOS 36 29 DOS 38 31
DPO (76 ) (68 ) DPO (78 ) (70 )
Net cash days 20 15 Net cash days 19 15
The net decrease in cash provided by operating activities of $70.9 million is
primarily due to the impact of changes in working capital. The increase in cash
provided by investing activities of $39.9 million is primarily due to $44.4
million of proceeds from the settlement of our net investment hedges. The
decrease in cash used in financing activities of $28.5 million is primarily due
to the suspension of our share repurchase program pursuant to the terms of the
Merger Agreement with the affiliates of Apollo Funds.
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CAPITAL RESOURCES AND DEBT COMPLIANCE
Our debt to total capital ratio was 32% atApril 30, 2020 . 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. The Company currently has sufficient resources, cash flows and liquidity within theU.S. to fund current and expected future working capital requirements. However, future repatriation of foreign cash will be considered to the extent the funds can be remitted with no material tax consequences. 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.
The following is a discussion of our various financing facilities:
Senior notes
InJanuary 2017 , we issued$500.0 million aggregate principal amount of 3.70% Senior Notes dueFebruary 15, 2022 (the "3.70% Senior Notes") and$500.0 million aggregate principal amount of 4.95% Senior Notes dueFebruary 15, 2027 (the "4.95% Senior Notes") (collectively the "2017 Senior Notes"). We pay interest on the 2017 Senior Notes semi-annually in arrears onFebruary 15 andAugust 15 of each year. The interest rate payable on the 2017 Senior Notes will be subject to adjustment from time to time if the credit rating assigned to such series of notes changes. 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 2017 Senior Notes are our senior unsecured obligations and will rank equally with all of our other unsecured and unsubordinated indebtedness from time to time outstanding. We, at our option, may redeem the 3.70% Senior Notes at any time prior toJanuary 15, 2022 and the 4.95% Senior Notes at any time prior toNovember 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 2017 Senior Notes to be redeemed or (ii) the sum of the present values of the remaining scheduled payments of principal and interest on the 2017 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 3.70% Senior Notes and 40 basis points for the 4.95% Senior Notes, plus the accrued and unpaid interest on the principal amount being redeemed up to the date of redemption. We may also redeem the 2017 Senior Notes, at any time in whole or from time to time in part, on or afterJanuary 15, 2022 for the 3.70% Senior Notes andNovember 15, 2026 for the 4.95% Senior Notes, in each case, at a redemption price equal to 100% of the principal amount of the 2017 Senior Notes to be redeemed. OnMarch 10, 2020 ,Tiger Merger Sub Co. , an affiliate of certain investment funds managed by affiliates of Apollo, launched an offer to purchase for cash any and all of our outstanding 3.70% Senior Notes and any and all of our outstanding 4.95% Senior Notes and a consent solicitation to amend the indenture and global securities establishing the 3.70% Senior Notes and the 4.95% Senior Notes to (i) eliminate the requirement to make a "change of control" offer in connection with the proposed merger ofTiger Merger Sub Co. into the Company pursuant to the 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,Tiger Merger Sub Co. launched a consent solicitation for the Proposed Amendments for holders of the 4.95% Senior Notes. OnMarch 24, 2020 ,Tiger Merger Sub Co. announced that the requisite more than 50% of consents were received to adopt the Proposed Amendments. The aforementioned consent solicitations were conducted byTiger Merger Sub Co. pursuant to the terms of, and subject to the conditions set forth in, the offer to purchase and consent solicitation statement, datedMarch 10, 2020 (the "Offer to Purchase and Consent Solicitation"), and the separate consent solicitation statement, datedMarch 10, 2020 (the "4.95% Consent Solicitation" and, together with the Offer to Purchase and Consent Solicitation, the "Offer to Purchase and Consent Solicitation Statements"). OnMarch 24, 2020 , we entered into a Supplemental Indenture with respect to the Indenture and Global Security for the 3.70% Senior Notes (the "3.70% Supplemental Indenture") and a Supplemental Indenture with respect to the Indenture and Global Security for the 4.95% Senior Notes (the "4.95% Supplemental Indenture" and, together with the 3.70% Supplemental Indenture, the "Supplemental Indentures") effecting the Proposed Amendments. The Proposed Amendments implemented by the Supplemental Indentures will become operative with respect to the 2017 Senior Notes only at such time as the following conditions are satisfied or otherwise waived, if applicable, byTiger Merger Sub Co. : (1) the 2017 Senior Notes that are validly tendered (and not validly withdrawn) have been accepted for purchase byTiger Merger Sub Co. in accordance with the terms of the Offer to Purchase and Consent Solicitation Statements (and, in the case of the 4.95% Senior Notes, whenTiger Merger Sub Co. provides notice that it will pay the consent fee as part of the 4.95% Consent Solicitation) and (2) the other conditions to the consent solicitations set forth in the Offer to Purchase and Consent Solicitation Statements, including the substantially concurrent consummation of the Merger, have been satisfied. 38
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Other credit facilities
We have a$1.5 billion revolving credit facility with a syndicate of banks (the "Credit Agreement") which, among other things, provides for (i) a maturity date ofMay 15, 2024 , (ii) an interest rate on borrowings, facility fees and letter of credit fees based on the Company's debt rating, (iii) the ability to increase the facility to a maximum of$1.75 billion , subject to certain conditions and (iv) certain subsidiaries of the Company to be designated as borrowers. The applicable borrower will pay interest on advances under the Credit Agreement based on LIBOR (or similar interbank offered rates depending on currency draw) plus a predetermined margin that is based on our debt rating. Our borrowings under the Credit Agreement vary within the period primarily based on changes in our working capital. There were no amounts outstanding under the Credit Agreement atApril 30, 2020 andJanuary 31, 2020 . OnAugust 2, 2019 , we entered into a term loan credit agreement (the "2019 Term Loan Credit Agreement") which, among other things, (i) provides for a$300 million term loan credit facility with a maturity date ofAugust 2, 2021 , (ii) provides for an interest rate on the outstanding principal amount of the loan that is based on LIBOR plus a predetermined margin, and (iii) may be increased up to a total of$500 million , subject to certain conditions. We had$300 million outstanding under the 2019 Term Loan Credit Agreement at bothApril 30, 2020 andJanuary 31, 2020 . We also have an agreement with a syndicate of banks (the "Receivables Securitization Program") that allows us to transfer an undivided interest in a designated pool ofU.S. accounts receivable, on an ongoing basis, to provide collateral for borrowings up to a maximum of$1.0 billion . The scheduled termination date of the agreement isApril 16, 2021 . Under this program, we transfer certainU.S. trade receivables into a wholly-owned bankruptcy remote special purpose entity. Such receivables, which are recorded in the Consolidated Balance Sheet, totaled approximately$1.6 billion at bothApril 30, 2020 andJanuary 31, 2020 . As collections reduce accounts receivable balances included in the collateral pool, we may transfer interests in new receivables to bring the amount available to be borrowed up to the maximum. We pay interest on advances under the Receivables Securitization Program at designated commercial paper or LIBOR-based rates plus an agreed-upon margin. Our borrowings under the Receivables Securitization Agreement vary within the period primarily based on changes in our working capital. There were no amounts outstanding under the Receivables Securitization Program atApril 30, 2020 andJanuary 31, 2020 . In addition to the facilities described above, we have various other committed and uncommitted lines of credit, short-term loans and overdraft facilities totaling approximately$458.2 million atApril 30, 2020 to support our operations. Most of these facilities are provided on an unsecured, short-term basis and are reviewed periodically for renewal, which may be impacted by the COVID-19 pandemic. Our borrowings under these facilities vary within the period primarily based on changes in our working capital. There was$104.6 million outstanding on these facilities atApril 30, 2020 , at a weighted average interest rate of 6.17%, and there was$108.4 million outstanding atJanuary 31, 2020 , at a weighted average interest rate of 6.79%. AtApril 30, 2020 , we had also issued standby letters of credit of$39.6 million . These letters of credit typically act as a guarantee of payment to certain third parties in accordance with specified terms and conditions. The issuance of certain of these letters of credit reduces the Company's borrowing availability under certain of the above-mentioned credit facilities. Certain of our credit facilities contain limitations on the amounts of annual dividends and repurchases of common stock and require compliance with other obligations, warranties and covenants. The financial ratio covenants within these credit facilities include a maximum total leverage ratio and a minimum interest coverage ratio. AtApril 30, 2020 , we were in compliance with all such financial covenants.
Accounts receivable purchase agreements
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. AtApril 30, 2020 andJanuary 31, 2020 , we had a total of$569.0 million and$739.2 million , respectively, of accounts receivable sold to and held by financial institutions under these agreements. During the three months endedApril 30, 2020 and 2019, discount fees recorded under these facilities were$3.1 million and$3.7 million , respectively. These discount fees are included as a component of "other expense (income), net" in our Consolidated Statement of Income. Share Repurchase Program InOctober 2018 , our Board of Directors authorized a share repurchase program for up to$200.0 million of our common stock. InFebruary 2019 , the Board of Directors approved a$100.0 million increase to the program. InAugust 2019 , our Board of Directors authorized the repurchase of up to an additional$200.0 million of our common stock, resulting in a total share repurchase authorization of$500.0 million . In conjunction with our share repurchase program, a 10b5-1 plan was executed that instructs the broker selected by the Company to repurchase shares on our behalf. The amount of common stock repurchased in accordance with the 10b5-1 plan on any given trading day is determined by a formula in the plan, which is based on the market price of our common stock. Shares we repurchase are held in treasury for general corporate purposes, including issuances under equity incentive and benefit plans. 39
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We repurchased 345,927 shares of our common stock at a cost of$35.7 million during the three months endedApril 30, 2019 . As ofApril 30, 2020 , we had$222.8 million available for future repurchases of our common stock under the authorized share repurchase program. Pursuant to the terms of the Merger Agreement with the affiliates of Apollo Funds, we suspended our share repurchase program as ofNovember 13, 2019 . CRITICAL ACCOUNTING POLICIES AND ESTIMATES Except as presented below, there have been no material changes to the critical accounting policies and estimates disclosed in our Annual Report on Form 10-K for the year endedJanuary 31, 2020 . Accounts Receivable We maintain an allowance for credit losses related to accounts receivable for future expected credit losses resulting from the inability or unwillingness of our customers to make required payments. In estimating the required allowance, we take 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. RECENT ACCOUNTING PRONOUNCEMENTS
See Note 1 of Notes to Consolidated Financial Statements for the discussion on recent accounting pronouncements.
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